CC - Item 7D - Transmittal of City Community Development Commission & Housing Corporation FY 2009-10 AuditROSEMEAD CITY COUNCIL
STAFF REPORT
TO: THE HONORABLE MAYOR AND CITY C UNCIL
FROM: JEFF ALLRED, CITY MANAGER
DATE: JANUARY 11, 2011
SUBJECT: TRANSMITTAL OF CITY, COMMUNITY DEVELOPMENT COMMISSION
AND HOUSING CORPORATION FY 2009 -10 AUDITED FINANCIAL
REPORTS AND REQUIRED LETTERS
SUMMARY
As of December 20, 2010 the City's independent auditors, Mayer Hoffman McCann
P.C., completed their audit field work and helped City staff prepare the fiscal year ended
June 30, 2010 Comprehensive Annual Financial Report (CAFR), the Rosemead
Community Development Commission (RCDC) audited financial report and the
Rosemead Housing Development Corporation (RHDC) audited financial report. The
three financial reports and three required letters are included with this staff report for
City Council review.
Staff Recommendation
Staff recommends that the City Council receive and file the following:
1. City's FY 2009 -10 CAFR.
2. Rosemead Community Development Commission's audited financial report.
3. Rosemead Housing Development Corporation's audited financial report.
4. Single Audit Report on Federal Awards.
5. Letter on Auditor's Responsibility under U.S. Generally Accepted Auditing
Standards and OMB A -133.
6. Letter report on the City's internal controls.
7. ' Letter on agreed upon procedures.
ANALYSIS
The City's CAFR and the financial reports for its component units (RCDC and RHDC)
have each received audit opinions stating that the financial statements present fairly, in
all material respects, the financial positions of the governmental activities and each
major fund as of June 30, 2010 as well as changes in financial position, in conformity
with accounting principles generally accepted in the United States of America.
APPROVED FOR CITY COUNCIL AGENDA: ITEM NUMBER: 1U
City Council Meeting
January 11, 2011
Page 2 of 2
As in prior years, the City's CAFR has been SL
Officers' Association of the United States and Car
Certificate of Achievement for Excellence in Fim
submitted for the Certificate, the City's CAFR is
throughout the country and is graded based
completeness, presentation format, and understan
that the CAFR is, overall, a quality document in
excellence defined by the GFOA and that Rosen
similar agencies.
Only the CAFR of the primary government is
consideration for the Certificate. Accordingly,
the RHDC are not submitted.
PUBLIC NOTICE PROCESS
This item has been noticed through the regular
Submitted by:
Steve Brisco
Director of Finance
Attachment A:
CAFR
Attachment B:
RCDC Financial Report
Attachment C:
RHDC Financial Report
Attachment D:
Single Audit Report on Fedel
Attachment E:
Letter on Auditor's Respon:
Auditing Standards and OME
Attachment F:
Letter report on City Internal
Attachment G:
Letter on Agreed Upon Proc(
)miffed to the Government Finance
ada (GFOA) for consideration for the
ncial Reporting (Certificate). When
valuated by various qualified peers
upon strict criteria for accuracy,
lability. The certificate tells the world
Dnformity with the high standards of
ead's CAFR is comparable to other
lified for submittal to the GFOA for
financial reports for the RCDC and
notification process.
it Awards
bility under U.S. Generally Accepted
A -133
;ontrols
Of Rose#" ATTACHMENT -A
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Comprehensive Annual
Financial Report
Fiscal Ye Ended June 30, 2010
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' CITY OF ROSEMEAD
Rosemead, California
Comprehensive Annual Financial Report
' Fiscal Year Ended June 30, 2010
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' Prepared by the Finance Department
Steve Brisco
Director of Finance
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' CITY OF ROSEMEAD
Comprehensive Annual Financial Report
Fiscal Year Ended June 30, 2010
'
TABLE OF CONTENTS
Page
INTRODUCTORY SECTION
'
Letter of Transmittal
i
Directory of Officials
vi
'
Certificate of Achievement for Excellence in Financial Reporting (GFOA)
vii
Organizational Chart
viii
FINANCIAL SECTION
Independent Auditors' Report
1
Management's Discussion and Analysis (Required Supplementary Information)
3
Basic Financial Statements:
'
Government -wide Financial Statements:
Statement of Net Assets
14
'
Statement of Activities
15
Fund Financial Statements:
Governmental Funds:
'
Balance Sheet
16
Reconciliation of the Balance Sheet of Governmental Funds
'
to the Statement of Net Assets
Changes Fund Balances
19
Statement of Revenues, Expenditures and in
20
Reconciliation of the Statement of Revenues, Expenditures, and Changes
'
in Fund Balances of Governmental Funds to the Statement of Activities
22
Proprietary Funds:
Statement of Net Assets
23
Statement of Revenues, Expenses, and Changes in Fund Net Assets
24
Statement of Cash Flows
25
Statement of Fiduciary Assets and Liabilities - Agency Fund
26
Notes to the Basic Financial Statements
27
' REQUIRED SUPPLEMENTARY INFORMATION:
Notes to Required Supplementary Information 58
Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget
and Actual - General Fund 59
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CITY OF
Comprehensive Annual Financial Report
Fiscal Year Ended Junel 30,2010
TABLE OF CONTENTS. bContinued)
FINANCIAL SECTION, (Continued)
REQUIRED SUPPLEMENTARY INFORMATION, (Continued)
Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget
and Actual - Low - Moderate Income Housing Set -Aside
OTHER SUPPLEMENTARY INFORMATION
Combining Balance Sheet — Non -Major Governmental Funds
Combining Statement of Revenues, Expenditures and Changes
in Fund Balances — Non -Major Governmental Funds
Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget
and Actual - Traffic Safety
Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget
and Actual — Community Development Block Grant
Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget
and Actual — HOME Program
Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget
and Actual - Proposition A
Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget
and Actual — Proposition C
Schedule of Revenues, Expenditures and Changes e in Fund Balances - Budget
and Actual - Federal Highway Grant
Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget
and Actual - State Gas Tax
Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget
and Actual - Air Quality Management District
Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget
and Actual - Local Transportation
Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget
and Actual - Street Lighting
Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget
and Actual - Narcotics Forfeiture and Seizure
Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget
and Actual — _Measure R
Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget
and Actual - Rosemead Housing Development Corporation
Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget
and Actual — City Capital Projects
Page
60
64
66
68
69
70
71
72
73
74
75
76
77
78
79
80
81
' CITY OF ROSEMEAD
Comprehensive Annual Financial Report
' Fiscal Year Ended June 30, 2010
TABLE OF CONTENTS (Continued)
' FINANCIAL SECTION, (Continued) Paqe
OTHER SUPPLEMENTARY INFORMATION, (Continued)
Major Fund Budget and Actual Schedules:
Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget
' and Actual - Redevelopment Agency Debt Service Fund 82
Schedule of Revenues, Expenditures and Changes in Fund Balances — Budget
and Actual — Redevelopment Agency Capital Projects Fund 83
Internal Service Funds:
Combining Statement of Net Assets 86
Combining Statement of Revenues, Expenses and Changes in Fund Net Assets 87
' Combining Statement of Cash Flows 88
Statement of Changes in Assets and Liabilities - Agency Fund 89
' STATISTICAL SECTION
Net Assets by Component 92
' Changes in Net Assets 93
Fund Balances of Governmental Funds 94
Changes in Fund Balances of Governmental Funds 95
' Assessed Value and Estimated Actual Value of Taxable Property 96
Direct and Overlapping Property Tax Rates 97
Principal Property Tax Payers 98
Property Tax Levies and Collections 99
t Ratios of Outstanding Debt by Type 100
Ratio of General Bonded Debt Outstanding 101
Direct and Overlapping Governmental Activities Debt 102
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Legal Debt Margin
103
Pledged Revenue Coverage
104
Demographic and Economic Statistics
105
'
Principal Employers
106
Full -time and Part-time City Employees
107
Operating Indicators by Function
108
Capital Asset Statistics by Function
109
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MAYOR:
' GARY TAYLOR
MAYOR PRO TEM:
STEVEN LY
COUNCIL MEMBERS:
SA NDRA RGARET CL
MARGARET CLARK
POLLV LOW
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December 20, 2010
Ppscmcad
8838 E. VALLEY BOULEVARD • P.O. BOX 399
ROSEMEAD, CALIFORNIA 91770
TELEPHONE (626) 569 -2100
FAX (626) 307 -9218
To the Honorable Mayor, Members of the City Council, and Citizens of the City of Rosemead:
Sound financial practice dictates that all general- purpose local governments publish within six
months of the close of each fiscal vear a complete set of financial statements presented in
conformity with generally accepted accounting principles (GAAP) and audited in accordance
with generally accepted auditing standards by a firm of licensed certified public accountants.
Pursuant to that requirement, we hereby issue the comprehensive annual financial report of the
City of Rosemead for the fiscal year ended June 30, 2010.
This report consists of management's representations concerning the finances of the City of
Rosemead. Consequently, management assumes full responsibility for the completeness and
reliability of all of the information presented in this report. To provide a reasonable basis for
making these representations, management of the City of Rosemead has established a
comprehensive internal control framework that is designed both to protect the government's
assets from loss, theft, or misuse and to compile sufficient reliable information for the
preparation of the City of Rosemead's financial statements in conformity with GAAP. Because
the cost of internal controls should not outweigh their benefits, the City of Rosemead's
comprehensive framework of internal controls has been designed to provide reasonable rather
than absolute assurance that the financial statements will be free from material misstatement. As
management, we assert that, to the best of our knowledge and belief, this financial report is
complete and reliable in all material respects.
' The City of Rosemead's financial statements have been audited by Mayer Hoffman McCann
P.C., a firm of licensed certified public accountants. The goal of the independent audit was to
provide reasonable assurance that the financial statements of the City of Rosemead for the fiscal
' year ended June 30, 2010, - are free of material misstatement. The independent audit involved
examining, on a test basis, evidence supporting the amounts and disclosures in the financial
statements; assessing the accounting principles used and significant estimates made by
management; and evaluating the overall financial statement presentation. The independent
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auditor concluded, based upon the audit, that there was a
unqualified opinion that the City of Rosemead's ftnancia
June 30, 2010, are fairly presented in conformity with G.
is presented as the first component of the financial sectic
The independent audit of the financial statements of the
federally mandated "Single Audit" designed to meet the
agencies. The standards governing Single Audit engages
report not only on the fair presentation of the financial s
government's internal controls and compliance with leg
on internal controls and legal requirements involving thi
reports are available in the City of Rosemead's separate
require that management provide a narrative introductio
the basic financial statements in the form of Manageme:
This letter of transmittal is designed to complement ME
with it. The City of Rosemead's MD &A can be found h
independent auditors.
Profile of the Government
The City of Rosemead, incorporated in 1959, is located
which is considered to be the top growth area in the stal
country. The City of Rosemead currently occupies a lar
population of more than 57,000. Property tax is levied
Angeles. The City and Community Development Com
by the County.
The City of Rosemead has operated under the
Policy- making and legislative authority are vested in a
and four other members. The governing council is rest
ordinances, adopting the budget, appointing committet
attorney and clerk. The government's manager is respc
ordinances of the governing council, for overseeing thi
and for appointing the heads of the various department
basis. Council members serve four -year staggered tern
every two years and two elected the opposite two year
five council members, by the council members, and se
2sonable basis for rendering an
statements for the fiscal year ended
kP. The independent auditor's report
of this report.
ity of Rosemead was part of a broader,
>ecial needs of federal grantor
!nts require the independent auditor to
ements, but also on the audited
requirements, with special emphasis
administration of federal awards. These
issued Single Audit Report. GAAP
overview, and analysis to accompany
s Discussion and Analysis W &A).
A and should be read in conjunction
following the report of the
the southwestern part of the state,
and one of the top growth areas in the
area of 5.5 square miles and serves a
9 collected by the County of Los
ission's portion is remitted to the City
anager form of government since 1959.
overning council consisting of the mayor
asible, among other things, for passing
, and hiring the government's manager,
sible for carrying out the policies and
Jay-to-day operations of the government,
The council is elected on a non - partisan
with three council members elected
The mayor is selected from among the
for a one year term.
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Many of the functions often provided by municipal government are provided by special districts.
Examples of some of Rosemead's 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 a
variety of other public and private agencies under contract. Some of the contracts in effect
' during the fiscal year were for police and street maintenance. The City also has three blended
component units: 1) the Rosemead Financing Authority (the Authority), 2) the Rosemead
Community Development Commission (the RCDC) and 3) the Rosemead Housing Development
' Corporation (RHDC). The City of Rosemead also provides a full range of services, including
recreational activities and cultural events. Additional information on all three of these legally
' separate entities can be found in Note 1(a) in the notes to the financial statements.
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The annual budget serves as the foundation for the City of Rosemead and its component unit's
financial planning and control. All business units and component units of the City of Rosemead
are required to submit requests for appropriation to the City Manager in mid March of each year.
The City Manager uses these requests as the starting point for developing a proposed budget. The
City Manager then presents this proposed budget to the City Council for review prior to June 30.
The City Council is required to hold public hearings on the proposed budget and to adopt a final
budget no later than June 30, the close of the City of Rosemead's fiscal year. The appropriated
budget is prepared by fund and department (e.g., public safety). Department heads, with City
Manager approval, may make transfers of appropriations within a department. Transfers of
appropriations between departments, however, require the approval of the City Council. Budget -
to- actual comparisons are provided in this report for each individual governmental fund for
which an appropriated annual budget has been adopted. For the general fund, this comparison is
presented on page - as part of the basic financial statements for the governmental funds. For
governmental funds, other than the general fund, with appropriated annual budgets, this
comparison is presented in the governmental fund subsection of this report, which starts on page
Factors Affecting Financial Condition
The information presented in the financial statements is perhaps best understood when it is
considered from the broader perspective of the specific environment within which the City of
Rosemead operates.
Local economy. Considering the current recessionary economy, the City of Rosemead currently
enjoys a reasonably favorable economic environment and local indicators point to moderate
declines due to the current economy. The region has a varied retail and industrial base including
two national general merchandise stores that historically
economy. They have continued to perform fairly well an
only 1.3% _ compared with the same period a year earlie
keep Rosemead's unemployment rate down to 11.0% wh
Beach, Glendale area rate is 12.5 %. Major employers are
accompanying financial report. A new grocery store ai
10 and should help relieve some of the City's unemployr
Long -term Financial Planning. On December 8, 2009
long -term plan that identifies three Key Organizational
Infrastructure and Improve Public Facilities. 2) Enhanc
Ensure the City's Financial Viability with Balanced But
these goals the City Council has approved capital impro
and slurry sealing, curb and ramp improvements, tree pl
renovations and improvements Additionally revenue fri
Reinvestment Act (ARRA) grant has been received by t
provide funding for infrastructure improvements during
Cash management policies and practices. Cash, temp
in a money market account and the State Treasurer's Lo
Due to the unsettled state of California finances, $2.25 1
market account which has a lower yield than LAIF, but
risk in the event that the State should withdraw significi
State also invests in LAIF and although they are legally
cash, a large run on the State's LAIF cash could potenti
available for local withdrawals. With LAIF yields remi
increasing in yield without unnecessary safety risks, Cif
investments.- In accordance with State law, all City inv(
in order of importance, of: 1) safety, 2) liquidity and 3
Risk Management. The City is a member of the Cali.
(the Authority). The Authority is composed of 107 Ca
under a joint powers agreement pursuant to California
purpose of the Authority is to arrange and administer F
losses, to purchase excess insurance and reinsurance,a
insurance for property and other coverage. Additional
notes to the Basic Financial Statements.
Pension and other postemployment benefits. The
erform well in a recessionary
helped the City's sales tax decline
Modest sales tax losses have helped
teas the larger Los Angeles, Long
isted in the statistical section of the
i major gym opened during FY 2009-
e City Council approved a strategic
ials: 1) Beautify Community
Public Safety and Quality of Life. 3)
ets and Prudent, Reserves. To meet
ement projects for street resurfacing
sting as well as other park and facility
i the 2009 American Recovery and
City. The grant awards were used to
Y 2009 -10.
-arily idle during the year, was invested
al Agency Investment Fund (LAIF).
illion remained invested in a money
rill avoid some potential LAIF liquidity
it amounts of cash from LAIF. The
rohibited from borrowing local agency
.ly limit the amount of liquid cash
ping low and other investments
staff is began to cautiously diversify
tments strictly adhere to the priorities,
yield.
da Joint Powers Insurance Authority
rnia public entities and is organized
vernment Code §6500 et seq. The
;rams for the pooling of self - insured
to arrange for group - purchased
ormation can be found in Note 9 in the
of Rosemead is contracted with the
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California Public Employees Retirement System (CaIPERS) for retirement benefits for full time
employees. Supplemental retirement benefits are offered to qualified full -time employees,
retirees and part-time employees through Public Agency Retirement Services (PARS). The City
' also provides health insurance benefits for certain qualified retirees. In accordance with GASB
45, additional information on the City of Rosemead's pension arrangements and postemployment
benefits can be found in Note 10 in the notes to the Basic Financial Statements.
' Awards and Acknowledgements
The Government Finance Officers Association of the United States and Canada (GFOA)
' awarded a Certificate of Achievement for Excellence in Financial Reporting to the City of
Rosemead for its comprehensive annual financial report (CAFR) for the fiscal year ended June
' 30, 2009. In order to be awarded a Certificate of Achievement, the government had to publish an
easily readable and efficiently organized CAFR that satisfied both generally accepted accounting
principles and applicable legal requirements.
' A Certificate of Achievement is valid for a period of one year only. We believe that our current
' CAFR continues to meet the Certificate of Achievement Program's requirements and we are
submitting it to the GFOA to determine its eligibility for another certificate.
t The preparation of this report would not have been possible without the efficient and dedicated
services of the entire team of the finance and administration departments. We would like to
express our appreciation to all members of the departments who assisted and contributed to the
' preparation of this report. Credit also must be given to the mayor and the governing council for
their unfailing support for maintaining the highest standards of professionalism in the
management of the City of Rosemead's finances.
Respectfully submitted,
Steven L. Brisco
Director of Finance
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City of Roser
Directory of Offic
June 30, 2010,
head
Gary A. Taylor, Mayor
Steven Ly, Mayor Pro Tern
Margaret F. Clark, Council Member
Sandra Armenta, Council Member
Polly Low, Council Member
Jeff Allred, City Manager
Matthew E. Hawkesworth, Assistant City Manager
Stan Wong, Community Development Director
Steve Brisco, Director of Finance
David Montgomery-Scott, Director of Parks and Recreation
Chris Marcarello, Public Works Director
Tim Murakami, Lieutenant (Contracted)
Gloria Molleda, City Clerk
Joseph M. Montes, City Attorney (Contracted)
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Certificate of
Achievement
for Excellence
in Financial
Reporting
Presented to
City of Rosemead
California
For its Comprehensive Annual
Financial Report
for the Fiscal Year Ended
June 30, 2009
A Certificate of Achievement for Excellence in Financial
Reporting is presented by the Government Finance Officers
Association of the United States and Canada to
government units and public employee retirement
systems whose comprehensive annual financial
reports (CAFRs) achieve the highest
standards in government accounting
and financial reporting.
V or gy`
u IN4
s trued g
T a y oaiwmx s
President
Executive Director
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11
FINANCIAL SECTION
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' Mayer Hoffman McCann P.C.
The Honorable Mayor and City Council
1 City of Rosemead
Rosemead, California
' INDEPENDENT AUDITORS' REPORT
We have audited the accompanying financial statements of the governmental activities, each
' major fund, and the aggregate remaining fund information of the City of Rosemead, California,
as of and for the year ended June 30, 2010, which collectively comprise the City's basic
financial statements, as listed in the table of contents. These financial statements are the
' responsibility of the management of the City of Rosemead. Our responsibility is to express
opinions on these financial statements based on our audit.
' We conducted our audit in accordance with auditing standards generally accepted in the United
States of America, and the standards applicable to financial audits contained in
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 opinions. .
' In our opinion, the financial statements referred to above present fairly, in all material respects,
the respective financial position of the governmental activities, each major fund, and the
aggregate remaining fund information of the City of Rosemead, California, as of June 30, 2010,
and the respective changes in financial position of the City of Rosemead, California for the year
then ended in conformity with accounting principles generally accepted in the United States of
America.
[1
The information identified in the accompanying table of contents as management's discussion
and analysis and required supplementary information are not a required part of the basic
financial statements but are supplementary information required by accounting principles
generally accepted in the United States of America. We have applied certain limited procedures,
which consisted principally of inquiries of management regarding the methods of measurement
and presentation of the supplementary information. However, we did not audit the information
and express no opinion on it.
An Independent CPA Firm
2301 Dupont Drive, Suite 200
Irvine, California 92612
'
949 -474 -2020 ph
949 - 263 -5520 fx
'
www.mhm -pacom
' INDEPENDENT AUDITORS' REPORT
We have audited the accompanying financial statements of the governmental activities, each
' major fund, and the aggregate remaining fund information of the City of Rosemead, California,
as of and for the year ended June 30, 2010, which collectively comprise the City's basic
financial statements, as listed in the table of contents. These financial statements are the
' responsibility of the management of the City of Rosemead. Our responsibility is to express
opinions on these financial statements based on our audit.
' We conducted our audit in accordance with auditing standards generally accepted in the United
States of America, and the standards applicable to financial audits contained in
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 opinions. .
' In our opinion, the financial statements referred to above present fairly, in all material respects,
the respective financial position of the governmental activities, each major fund, and the
aggregate remaining fund information of the City of Rosemead, California, as of June 30, 2010,
and the respective changes in financial position of the City of Rosemead, California for the year
then ended in conformity with accounting principles generally accepted in the United States of
America.
[1
The information identified in the accompanying table of contents as management's discussion
and analysis and required supplementary information are not a required part of the basic
financial statements but are supplementary information required by accounting principles
generally accepted in the United States of America. We have applied certain limited procedures,
which consisted principally of inquiries of management regarding the methods of measurement
and presentation of the supplementary information. However, we did not audit the information
and express no opinion on it.
The Honorable Mayor and City Council
City of Rosemead
Rosemead, California
Our audit was conducted for the purpose of forming o
collectively comprise the City of Rosemead's basic
section, combining and individual fund financial statemf
listed in the table of contents are presented for purpo!
required part of the basic financial statements. The
statements and schedules have been subjected to the
of the basic financial statements, and in our opinion, ai
relation to the basic financial statements taken as
statistical tables have not been subjected to the auditir
basic financial statements and, accordingly, we express
nions on the financial statements that
nancial statements. The introductory
is and schedules and statistical tables
s of additional analysis and are not a
mbining and individual fund financial
editing procedures applied in the audit
fairly stated in all material respects in
whole. The introductory section and
procedures applied in the audit of the
o opinion on them.
In accordance with Government Auditing Standards,1 we have also issued a report dated
December 20, 2010 on our consideration of the City'sl internal control over financial reporting
and our tests of its compliance with certain provisions of laws, regulations, contracts, grant
agreements, and other matters. The purpose of that (report is to describe the scope of our
testing of internal control over financial reporting and compliance and the results of that testing,
and not to provide an opinion on the internal control over financial reporting or on compliance.
That report is an integral part of an audit performed in accordance with Government Auditing
Standards and should be considered in assessing the results of our audit.
aczu A /WMA.+ xe L 4 ann 1 e.
Irvine, California
December 20, 2010
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Management's Discussion and Analysis
As management of the City of Rosemead, we offer readers of the City of Rosemead's financial
statements this narrative overview and analysis of the financial activities of the City of Rosemead for the
fiscal year ended June 30, 2010. We encourage readers to consider the information presented here in
conjunction with additional information that we have furnished in our letter of transmittal, which can be
found on pages i - v of this report. All amounts, unless otherwise indicated, are in thousands of dollars.
Financial Highlights
• The assets of the City of Rosemead exceed its liabilities at the close of the most recent fiscal
year by $46,401 (net assets). Of this amount, $20,490 (unrestricted) may be used to meet the
government's ongoing obligations to citizens and creditors.
• The government's total net assets decreased by $3,672 primarily due to a State take -away of
$1,438 and a return to routine revenues after several one -time revenues received in FY 2008 -09.
• As of the of the current fiscal year, the City of Rosemead's governmental funds reported
combined ending fund balances of $36,060, a decrease of $3,956 in comparison with the prior
year. Approximately 66 percent of this total amount, $23,788, is available for spending at the
government's discretion (unreserved, undesignated fund balance).
• At the end of the current fiscal year, unreserved, undesignated fund balance for the General
Fund was $13,627 or 75 percent of total General Fund expenditures.
• The City of Rosemead's total long -term debt decreased by $571 or 1.6 percent during the
current fiscal year, primarily due to principal payments of $945. Additions to debt include a
new capital lease for a lift truck, a retrospective insurance payment of $512 and a $65 net
increase in the compensated absences balance. For more detailed information please refer to
Note No. 7, Changes in Long -Term Liabilities found on page No. 45 of the Basic Financial Report.
Overview of the Financial Statements
This discussion and analysis is intended to serve as an introduction to the City of Rosemead's basic
financial statements. The City of Rosemead's basic financial statements comprise three components: 1)
government -wide financial statements, 2) fund financial statements, and 3) notes to the financial
statements. This report also contains other supplemental information in addition to the basic financial
statements themselves.
Government -wide Financial Statements. The government -wide financial statements are designed to
provide readers with a broad overview of the City of Rosemead's finances, in a manner similar to
private- sector business.
The statement of net assets presents information on all of the City of Rosemead's assets and liabilities,
with the difference between the two reported as net assets. Over time, increases or decreases in net
11
assets may serve as a useful indicator of whether the financial position of the City of Rosemead is
improving or deteriorating.
The statement of activities presents information showing ho
during the most recent fiscal year. All changes in net assets
event giving rise to the change occurs, regardless of the timb
and expenses are reported in this statement for some items
fiscal periods (e.g., uncollected taxes and earned but unused
Both of the government -wide financial statements distingui
are principally supported by taxes and intergovernmental n
functions that are intended to recover all or a significant po
charges (business -type activities). The City of Rosemead do
governmental activities of the City of Rosemead include get
works, community services, community development, and I
the government's net assets changed
a reported as soon as the underlying
of related cash flows. Thus, revenues
at will only result in cash flows in future
cation leave).
functions of the City of Rosemead that
nues (governmental activities) from other
in of their costs through user fees and
not have any business -type activities. The
al government, public safety, public
ks and recreation.
The government -wide financial statements include not only the City of Rosemead itself (known as the
primary government), but also a legally separate redevelopment agency and a legally separate low
income housing corporation, for which the City of Rosemead is financially accountable. Financial
information for the component units is reported separately from the financial information presented for
the primary government itself.
The government -wide financial statements can be found on
Fund financial statements. A fund is a grouping of related
over resources that have been segregated for specific activi
other state and local governments, uses fund accounting to
finance - related legal requirements. All of the funds of the
categories: governmental funds, internal service funds and
14 -15 of this report.
)unts that is used to maintain control
or objectives. The City of Rosemead, like
>ure and demonstrate compliance with
of Rosemead can be divided into three
ry funds.
Governmental funds. Governmental funds are used to account for essentially the same functions
reported as governmental activities in the govern ment- widelfinancial statements. However, unlike the
government -wide financial statements, governmental fund financial statements focus on near -term
inflows and outflows of spendable resources, as well as on balances of spendable resources available at
the end of the fiscal year. Such information may be useful in evaluating a government's near -term
financing requirements.
Because the focus of governmental funds is narrower than
statements, it is useful to compare the information present
information presented for governmental activities in the gc
doing so, readers may better understand the long -term iml
decisions. Both the governmental fund balance sheet and
revenues, expenditures, and changes in fund balances prov
comparison between governmental funds and government
t of the government -wide financial
for governmental funds with similar
nment -wide financial statements. By
of the government's near -term financing
governmental fund statement of
a reconciliation to facilitate this
' activities.
4
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11
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1
The City of Rosemead and its component units maintain 18 active governmental funds. Information is
presented separately in the governmental fund balance sheet and in the governmental fund statement
of revenues, expenditures, and changes in fund balances for the General Fund, Low - Moderate Income
Housing Set -Aside Fund, Debt Service Funds and Capital Projects Funds, all four of which are considered
to be major funds. Data from the other 14 governmental funds are combined into a single, aggregated
presentation. Individual fund data for each of these non -major governmental funds is provided in the
form of combining statements elsewhere in this report.
The City of Rosemead adopts an annual appropriated budget for all its funds. A budgetary comparison
statement has been provided for the General Fund, Low - Moderate Income Housing Set -Aside Fund,
Traffic Safety Fund, Community Development Block Grant Fund, HOME Program Fund, Proposition A
Fund, Proposition C Fund, Measure R, Federal Highway Grant Fund, State Gas Tax Fund, Air Quality
Management District Fund, Street Lighting Fund, Narcotic Forfeiture and Seizure Fund, Rosemead
Housing Development Corporation Fund, City Capital Projects Fund, Redevelopment Agency debt
Service Fund and the Redevelopment Agency Capital Projects Fund to demonstrate compliance with
this budget.
The basic governmental fund financial statements can be found on pages 16 - 22 of this report.
Fiduciary funds. Fiduciary funds are used to account for resources held for the benefit of parties outside
the government. Fiduciary funds are not reflected in the government -wide financial statement because
the resources of those funds are not available to support the City of Rosemead's own programs. The
accounting used for fiduciary funds is much like that used for proprietary funds. The basic fiduciary fund
financial statements can be found on page 26 of this report.
Notes to the financial statements. The notes provide additional information that is essential to a full
understanding of the data provided in the government -wide and fund financial statements. The notes
to the Basic Financial Statements can be found on pages 27 — 55 of this report.
Other information. In addition to the basic financial statements and accompanying notes, this report
also presents certain required supplementary information concerning the City of Rosemead's progress in
funding its obligation to provide pension benefits to its employees. Required supplementary
information and notes can be found beginning on page 57 of this report.
The combining statements referred to earlier in connection with non -major governmental funds and
internal service funds are presented immediately following the required supplementary information on
pensions. Combining and individual fund statements and schedules can be found on pages 59 -89 of this
report.
Government -wide Financial Analysis
As noted earlier, net assets may serve over time as a useful indicator of a government's financial
position. In the case of the City of Rosemead, assets exceeded liabilities by $46,401 at the close of the
most recent fiscal year.
The largest portion of the City of Rosemead's net assets (19
assets (e.g. land, buildings, machinery, and equipment); less
assets that is still outstanding. The City of Rosemead uses th
citizens; consequently, these assets are not available for Tutu
Rosemead's investment in its capital assets is reported net of
resources needed to repay this debt must be provided from i
themselves cannot be used to liquidate these liabilities.
City of Rosemead's N
As of June 30, 2010 i
(thousands)
=rcent) reflects its investment in capital
,y related debt used to acquire those
;e capital assets to provide services to the
spending. Although the City of
elated debt, it should be noted that the
her sources, since the capital assets
t Assets
id 2009
An additional portion of the City of Rosemead's net assets (�8 percent) represents resources that are
subject to external restrictions on how they may be used. T' e remaining balance of unrestricted net
assets ($20,490) may be used to meet the government's ongoing obligations to citizens and creditors.
At the end of the current fiscal year, the City of Rosemead i i able to report positive net asset balances.
The situation also held true for the prior fiscal year.
The government's net assets decreased by $3,672 during t.
contributors to the decrease in net assets are: 1) A return
time events in FY 2008 -09 and 2) the continuation of very
one half percent range. Most of the City's surplus cash wa
current fiscal year. The two main
o normal revenue levels, after several on-
iw interest earnings reflecting yields in the
invested in the State's Local Agency
0
... 1 6 x ri ,x i
� r }Governmental +Qctivrties�;��
lydar 2010k ",w4�i
�Att' -2009a 4 g ig
Current and other assets
42,101
44,504
Capital assets
44,861
46,369
Total assets
86,962
90,873
Long -term liabilities outstanding I
36,005
36,476
Other liabilities
4,556
4,324
Total liabilities
40,561
40,800
Net assets:
Invested in capital assets, net of related debt
12,712
11,829
Restricted
13,199
13,361
Unrestricted
20,490
1 24,883
Total net assets C
$ 46,401
1 $ 50,073
An additional portion of the City of Rosemead's net assets (�8 percent) represents resources that are
subject to external restrictions on how they may be used. T' e remaining balance of unrestricted net
assets ($20,490) may be used to meet the government's ongoing obligations to citizens and creditors.
At the end of the current fiscal year, the City of Rosemead i i able to report positive net asset balances.
The situation also held true for the prior fiscal year.
The government's net assets decreased by $3,672 during t.
contributors to the decrease in net assets are: 1) A return
time events in FY 2008 -09 and 2) the continuation of very
one half percent range. Most of the City's surplus cash wa
current fiscal year. The two main
o normal revenue levels, after several on-
iw interest earnings reflecting yields in the
invested in the State's Local Agency
0
' Investment Fund (LAIF) investment pool. However, as yields start creeping up cash is being invested in
more productive investments, mostly certificates of deposit and federal agencies.
Governmental activities. Governmental activities decreased the City of Rosemead's net assets by
$3,672. Contributing to the change in net assets are several single occurrence events described below.
' Total revenues increased by $575, and are offset by noteworthy expenditures that include:
• A State mandated contribution to the Supplemental Education Rehabilitation Augmentation
Fund (SERAF) of $1,438, a State budget balancing amendment.
• Revenues that are measurable but not available of $1,078.
' • An installment to fund Other Post Employment Benefits (OPEB) liabilities of $645.
• Deferred Transient Occupancy Tax (TOT) of $41.
1
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1
City of Rosemead's Changes in Net Assets
Years Ended June 30, 2010 and 2009
(thousands)
8
tivties�F�i°-'-iaL.�+".
R
3` 201'0 " "rr "
z�2009
Program revenues:
Charges for services
$
2,830
$ 3,006
Operating grants and contributions
8,214
6,403
Capital grants and contributions
680
1,748
General revenues:
Property taxes
12,329
12,288
Othertaxes
6,100
6,624
Investment income
389
885
Intergovernmental, unrestricted
169
195
Other
337
134
Total revenues
31,048
31,283
Expenses:
General government
5,992
12,177
Public safety
8,880
9,082
Public works
12,891
6,465
Community services
590
773
Community development
2,141
1,290
Parks and recreation
2,734
2,031
Interest on long -term debt
1,492
1,523
Total expenses
34,720
33,341
Increase in net assets before transfers
I
(3,672)
(2,058)
Transfers
Increase in net assets
(3,672)
(2,058)
Net assets -June 30, 2009
I
50,073
52,131
Net assets -June 30, 2010
$ (
46,401
$ 50,073
8
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t
1
Expenses and Program Revenues
Governmental Activities
14,000,000 .____, .. .. _....
12,000,000 - ---
10,000,000
8,000,000
6,000,000 �
4,000,000
2,000,000,. - - - -
i 6expenses
F a ova ,\`e5 Fac~ ai °c revenues
a e 0~
5 e
O` e No
o
Q�`0 001
� c\a a ha c
� �o
Q e e s
�c`
Revenues by Source - Governmental
Activities
Investment Motor vehicle Other
incor
Fra
tax
Transient
occupancy
taxes, 6%
Sales and use
taxes, 23%
9
Property
axes, 63%
a�
e c
O` e No
o
Q�`0 001
� c\a a ha c
� �o
Q e e s
�c`
Revenues by Source - Governmental
Activities
Investment Motor vehicle Other
incor
Fra
tax
Transient
occupancy
taxes, 6%
Sales and use
taxes, 23%
9
Property
axes, 63%
Financial Analysis of the Government's Funds
The focus of the City of Rosemead's governmental funds is to
inflows, and balances of spendable resources. Such informati
Rosemead's financing requirements. In particular, unreserveG
measure of a government's net resources available for spendi
As of the end of the current fiscal year, the City of Rosemea
fund balances of $36,060 a decrease of $3,956 in comparisc
this total amount $23,788 constitutes unreserved, undesign
spending at the government's discretion. The remainder of
to indicate that it is not available for new spending because
receivable of $886, 2) advances to other funds of $6,976, 3)
expenses of $2.
xovide information on the near -term
m is useful in assessing the City of
fund balance may serve as a useful
ig at the end of the fiscal year.
governmental funds reported combined
Nith the prior year. Approximately 66% of
!d fund balance, which is available for
e fund balance is reserved or designated
has already been committed for: 1) notes
nd held for resale of $4,408 and 4) prepaid
General Fund. The general fund is the chief operating fund of the City of Rosemead. At the end of the
current fiscal year, unreserved, undesignated fund balance of the general fund was $13,627, while total
fund balance reached $16,954. As a measure of the general fund's liquidity, it may be useful to compare
both unreserved fund balance and total fund balance to total fund expenditures. Unreserved,
undesignated fund balance represents 75 percent of total general fund expenditures, while total fund
balance represents 94 percent of that same amount.
The fund balance of the City of Rosemead's general fund
Key factors in this decline are as follows:
• General Fund revenue decreased $1,730 over last y
2008 -09 will not be repeated in subsequent years, !
was reimbursed to the City in FY 2008 -09, payment
Recreation building beautification grant of approxir
franchise fees of $112. The auto auction has ceases
to revenue were the result of a mandated loan of p
remitted to the State) of $616 and building permit i
reflection of the recessionary economy.
• To compensate for the expected decline in revenue
primarily in salaries and benefits as well as legal fee
sales tax was identified and paid, by the State, to tf
and was not repeated in FY 2009 -10. Because of w
recover the mis- allocated sales tax they were paid
than $5 in FY 2009 -10.
Proposition C Fund. Proposition C expenditures have dro
2009 -10. In FY 2008 -09 expenditures included outlays of
ased by $2,288 during the current year.
ar. Several revenue sources received in FY
ch as: mis- allocated sales tax revenue that
f a Los Angeles County Parks and
3tely $236 and payment of auto auction
operations in the City. Further reductions
)perty tax (withheld by the County and
venue declined by about $123, as a
expenditures were cut by almost 10 %,
In FY 2008 -09 a sizeable miss - allocation of
City. The payment was a one -time event
k by the City's sales tax consultant to
87. Payments to the consultant were less
from $1,404 in FY 2008 -09 to $687 in FY
ves for the re- construction of the Garvey
U1
' Avenue Bridge. By FY 2009 -10 the bridge project was complete and expenditures returned to
transportation operating costs only.
' Low - Moderate Income Housing Fund. The Low- Moderate Income Housing Fund (Low -Mod Fund),
including transfers, finished the year with a $496 increase in fund balance. The Low -Mod Fund receives
' its funding primarily from transfers of property tax increment from the Community Development
Commission and then transfers $250 to the Rosemead Housing Development Corporation to subsidize
operations of the Corporations' senior low income housing apartments. Additionally, $189, a decrease
' of $67, compared with FY 2008 -09, was spent on planning and administrative costs related to low
income housing planning and fund administration.
1
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Vehicle Replacement and Technology Replacement Funds. As a budget balancing measure no charges
to other departments were made for vehicle maintenance or technology replacement. Using
departments are assessed charges for equipment used by the departments. The charges are
accumulated in the internal service funds for future replacement of vehicles and equipment. However,
there were expenditures of $48 in the Vehicle Replacement Fund and $24 in the Technology
Replacement Fund. All expenditures came from fund balance.
Community Development Commission Funds. The combined Community Development Commission
(CDC) funds, debt service and capital projects, decreased fund balance by $1,466. Contributing to the
decrease in fund balance was a mandated payment to the State of $1,438 for the Supplemental
Education Rehabilitation Augmentation Fund (SERAF), a budget balancing measure forced on all local
governments. Another $1,688 was spent on capital projects, consisting primarily of street overlay and
community beautification projects. Debt service for the year was $1,502.
Capital Asset and Debt Administration
Capital assets. The City of Rosemead's investment in capital assets for its governmental activities as of
June 30, 2010, amounts to $44,862 (net of accumulated depreciation). This investment in capital assets
includes land, buildings and improvements, machinery and equipment, park facilities, roads, highways,
bridges and construction in progress.
Major capital asset events during the current fiscal year included the following:
• Garvey Avenue resurfacing
• The addition of ADA compliant curb ramps throughout the City
• Del Mar Avenue beautification project
1
City of Rosemead's Capital Assets
(net of depreciation)
(thousands)
Land
Buildings
Improvements other than
Buildings
Machinery and equipment
Autos and trucks
Furniture and office equipment
Infrastructure
Construction in Droeress
Additional information on the City of Rosemead's capital a
pages 44 -45 of the Basic Financial Report.
Long -term debt. At the end of the current fiscal year, the
Commission had total bonded debt outstanding of $34,491
property tax increment revenues.
$ 2,969
$ 2,969
16,612
17,365
81
120
215
205
349
204
108
157
24,144
25,349
IRA
-
44,862 ( $ 46,369
can be found in note No. 6, found on
.emead Community Development
)f this amount, all of it is backed by future
City of Rosemead's Outsta
Revenue Bonds
(thousands)
Tax Allocation Bonds
The Rosemead Community Development Commission's to
current fiscal year due to debt service payments leaving bi
ng Debt
I bonded debt decreased by $945 during the
ded indebtedness at $34,490.
12
I
' Economic Factors and Next Year's Budgets and Rates
• As discussed throughout this management's Discussion and Analysis report , there were
t significant revenue reductions in the FY 2010 -11 budget. Accordingly, the Salary and benefit and
operating and maintenance expenditures cut by 10 percent. Sales tax in the City has remained
' remarkably stable with only a small decline projected for budget purposes.
• At the time the FY 2010 -11 budget was being prepared the recessionary economy was showing
few signs of letting up. Therefore staff took a conservative approach in projecting discretionary
' revenues such as building permits and parks and recreation activities.
All of these factors were considered in preparing the City of Rosemead's budget for the 2011 fiscal year.
' The operating budget was balanced without the use of reserves.
Requests for Information
1 This financial report is designed to provide a general overview of the City of Rosemead's finances for all
those with an interest in the government's finances. Questions concerning any of the information
' provided in this report or requests for additional financial information should be addressed to the Office
of the Director of Finance, 8838 East Valley Boulevard, Rosemead, CA 91770.
1
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CITY OF ROSEMEAD
Statement of Net Assets
June 30, 2010
See accompanying notes to the basic financial statements
14
Governmental
Activities
Assets:
Cash and investments (note 2)
$ 32,854,626
Receivables:
Accounts
3,151,742
Accrued interest
53,526
Notes
885,779
Prepaid expenses
326,872
Deferred charges
420,835
Land held for resale
4,407,616
Capital assets (note 6):
Land
2,968,824
Construction in progress
383,536
Other capital assets, net
41,508,836
Total assets
86,962,192
Liabilities:
Accounts payable and accrued liabilities
3,338,364
Accrued salaries and benefits
375,081
Retentions payable
98,911
Accrued interest payable
595,826
Unearned revenue
147,528
Noncurrent liabilities (note 7 to 9):
Due within one year
1,307,823
Due in more than one year
34,697,258
Total liabilities
40,560,791
Net assets:
Invested in capital assets, net of related debt
12,712,242
Restricted for:
Public works
4,218,751
Public safety
2,518,253
Low- moderate income housing
6,462,434
Unrestricted
20,489,721
Total net assets
$ 46,401,401
See accompanying notes to the basic financial statements
14
CITY OF ROSEMEAD
' Statement of Activities
Fiscal Year ended June 30, 2010
1
Governmental activities:
General government
Public safety
Public works
Community services
Community development
Parks and recreation
Interest expense
Program Revenues
Operating Capital
Charges for Contributions Contributions
Expenses Services and Grants and Grants
Net (Expense)
Revenue and
Changesin
Net Assets
1
1
1
Total governmental
activities
$ 5,991,796
507,547
1,066,148
- (4,418,101)
8,879,854
491,484
122,078
680,115 (7,586,177)
12,890,803
1,065,482
6,986,529
- (4,838,792)
589,650
186,283
-
- (403,367)
2,141,218
558,404
38,998
- (1,543,816)
2,733,885
20,800
-
- (2,713,085)
1,491,717
(1,491,717)
$ 34,718,923
2,830,000
8,213,753
680,115 (22,995,055)
General revenues:
Taxes:
Property taxes
Sales and use taxes
Transient occupancy taxes
Franchise taxes
Investment income
Motor vehicle in lieu, unrestricted
Other general revenues
Total general revenues
Change in net assets
' Net assets at beginning of year
Net assets at end of year
1
1
' See accompanying notes to the basic financial statements.
15
1
12,328,634
4,408, 367
1,129,146
562,317
389,310
169,042
336,668
19,323,484
(3,671,571)
50, 072, 972
$ 46,401,401
i
CITY OF ROSEMEAD
Balance
Sheet - Governme Funds
June 30,
2010
S pecial
Revenu
Debt Service
Low - Moderate
Income Housing
i
Redevelopment
General
Set -Aside
Agency
Assets:
Cash and investments
$ 14,211,365
1,289,449
7,187,527
Receivables:
Accounts
1,288,261
-
468,654
Accrued interest
25,396
2,474
16,626
Notes
827,228
-
-
Prepaid items
2,034
-
Due from other funds (note 4)
764,607
718,929
Land held for resale
-
-
Advances to other funds (note 4)
2,497,920
4,477,945
-
Total assets
$ 19,616,811
1
6,488,797
7,672,807
Liabilities and Fund Balance
Liabilities:
Accounts payable and accrued liabilities
$ 1,615,016
2,303
390,937
Accrued salaries and benefits
298,734
393
15
Retentions payable
1,245
-
-
Due to other funds (note 4)
249
23,667
Deferred revenue
747,611
-
-
Advances from other funds (note 4)
-
-
4,477,945
Total liabilities
2,662,855
I
26,363
4,868,897
Fund balance:
Reserved for:
Notes receivable
827,228
Prepaid items
2,034
Land held for Resale
-
Advances to other funds
2,497,920
4,477,945
Unreserved, reported in:
General fund
13,626,774
-
Special revenue funds
-
1,984,489
-
Debt service funds
-
2,803,910
Capital projects funds
-
-
Total fund balance
16,953,956
I
6,462,434
2,803,910
Total liabilities and fund balance
$ 19,616,811
I
6,488,797
7,672,807
See accompanying notes to the basic financial sta
16
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1
' Capital Projects
' Redevelopment
Agency
' 2,408,466
56,862
' 8,640
' 9,799
4,407,616
' 6,891,383
t
52,576
' 110
1,285,616
' 53,315
2,497,920
3,889,537
4,407,616
(1,405,770)
t 3,001,846
6,891,383
t
t
1
Non -Major
Governmental Total
7,687,584 32,784,391
1,337,965 3,151,742
390 53,526
58,551 885,779
- 2,034
395,229 1,888,564
- 4,407,616
6,975,865
9,479,719 50,149,517
1,275,233 3,336,065
75,829
375,081
97,666
98,911
579,032
1,888,564
614,538
1,415,464
-
6,975,865
2,642,298 14,089,950
58,551 885,779
- 2,034
4,407,616
6,975,865
- 13,626,774
6,778,870 8,763,359
- 2,803,910
- (1,405,770)
6,837,421 36,059,567
9,479,719 50,149,517
17
(This page intentionally left blank)
E
CITY OF ROSEMEAD
Governmental Funds
Reconciliation of the Balance Sheet of Governmental Funds
to the Statement of Net Assets
June 30, 2010
' Fund balances of governmental funds $ 36,059,567
Revenues that are measurable but not available. Amounts are recorded
as deferred revenue under the modified accrual basis of accounting. 1,267,936
1
Internal service funds are used by management to charge the costs of
certain activates, such as equipment management, to individual funds.
The assets of the internal service funds must be added to the statement
of net assets. 67,936
Net assets of governmental activities $ 46,401,401
See accompanying notes to the basic financial statements.
1
Amounts reported for governmental activities in the statement of
'
net assets are different because:
Capital assets, net of depreciation, have not been included
'
as financial resources in governmental fund activity.
Capital assets
80,083,054
'
Accumulated depreciation
(35,221,858)
Long -term debt and compensated absences that have not been included
in the governmental fund activity:
'
Compensated absences
(487,764)
Retrospective deposits payable
(719,551)
'
Unamortized bond premiums
Capital lease payable
(237,622)
(70,144)
Tax allocation bonds
(34,490,000)
'
Debt issuance costs are not current financial resources and, therefore,
are not reported in the governmental funds.
420,835
'
Accrued interest payable for the current portion of interest due on
bonds payable has not been reported in the governmental funds.
(595,826)
Long -term assets that are not available for current use. Amounts are
not reported in the governmental funds.
324,838
Revenues that are measurable but not available. Amounts are recorded
as deferred revenue under the modified accrual basis of accounting. 1,267,936
1
Internal service funds are used by management to charge the costs of
certain activates, such as equipment management, to individual funds.
The assets of the internal service funds must be added to the statement
of net assets. 67,936
Net assets of governmental activities $ 46,401,401
See accompanying notes to the basic financial statements.
1
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CITY OF ROSEMEAD
Statement of Revenues,
Expenditures and
Ch in Fund
Balances
Governmental Funds
Fiscal
Year ended June
30, 2010
Special Revenu
Debt Service
Low- Moderate
Income Housing
Redevelopment
General
S -Aside
Agency
Revenues:
Taxes
$ 12,264,948
-
6,243,948
Intergovernmental
894,325
-
-
Licenses and permits
1,079,429
-
-
Charges for services
708,434
-
-
Fines, forfeitures and penalties
491,574
-
-
Special assessments
-
-
-
Investment income
177,794
10,308
67,878
Other
235,864
-
-
Total revenues
15,852,368
I
10,308
6,311,826
Expenditures:
Current:
General government
3,612,875
106,884
Public safety
7,318,037
-
975,509
Public works
2,951,999
-
-
Community services
218,138
-
Community development
966,631
189,359
Parks and recreation
2,733,885
-
Capital outlay
290,885
-
-
Debt service:
Principal
-
-
945,000
Interest and fiscal charges
-
1,501,667
Total expenditures
i
18,092,450
I
189,359
3,529,060
Excess (deficiency) of revenues
over (under) expenditures
(2,240,082)
(179,051)
2,782,766
Other financing sources (uses):
Transfers in (note 5)
70,996
925,481
-
Transfers out (note 5)
(221,478)
(250,000)
(2,782,766)
Proceeds of capital lease
102,501
-
Total other financing sources (uses)
(47,981)
I
675,481
(2,782,766)
Change in fund balances
(2,288,063)
496,430
-
Fund balances at beginning of year
19,242,019
5,966,004
2,803,910
Fund balances at end of year
$ 16,953,956
1
6,462,434
2,803,910
See accompanying notes to the basic financial
20
1
Capital Projects
'
Redevelopment
Non -Major
Agency
Governmenta
Total
'
-
18,508,896
6,962,467
7,856,792
-
1,079,429
'
-
708,434
491,574
-
680,288
680,288
42,884
90,446
389,310
18,746
254,610
61,630
7,733,201
29,969,333
1,452,328
731,839
5,903,926
t
569,688
8,863,234
1,687,774
6,624,447
11,264,220
-
366,325
584,463
'
784,651
1,940,641
-
2,733,885
-
290,885
-
945,000
-
-
1,501,667
'
3,140,102
9,076,950
34,027,921
'
(3,078,472)
(1,343,749)
(4,058,588)
1,916,090
1,220,987
4,133,554
'
(304,065)
(575,245)
(4,133,554)
-
102,501
1,612,025
645,742
102,501
(1,466,447)
(698,007)
(3,956,087)
4,468,293
7,535,428
40,015,654
'
3,001,846
6,837,421
36,059,567
21
CITY OF ROSEMEAD
Governmental Funds
Reconciliation of the Statement of Revenues, Expenditures,
and Changes in Fund Balances of Governmental Funds
to the Statement of Activities
Fiscal Year ended June 30, 2010
Net changes in fund balances of governmental funds
Amounts reported for governmental activities in the statement of
activities is different because:
Governmental funds report capital outlay as expenditures. However, in
the statement of activities, the cost of those assets is allocatedl over their
estimated useful lives as depreciation expense. This is the amount by which
capital outlays exceeded depreciation in the current period.
Capital outlay
Depreciation expense
Repayment of bond principal is an expenditure in the governmental funds, but
the repayment reduces long -term liabilities in the statement of net assets.
To record as an expense the net change in the other post employment benefit
obligation in the statement of activities.
To record as an expense the net change in retrospective deposit payable
in the statement of activities.
Bond issuance costs, premiums, discounts, and similar items are recorded
as expenditures in governmental funds when debt is first issued, whereas
these amounts are deferred and amortized in the statement of activities.
This amount is the net offset of the differences.
$ (3,956,087)
807,636
(2,282,670)
945,000
478,129
(512,075)
(12,570)
To record as an expense the net change in capital leases payable in the
statement of activities. I (102,501)
The statement of net assets includes accrued interest on long . term debt. 22,520
To record as an expense the net change in compensated absences
in the
statement of activities.
(64,914)
Revenues that are measurable but not available. Amounts are
not recorded
as revenue under the modified accrual basis of accounting.
1,078,019
Internal service funds are used by management to charge the
costs of certain
activities, such as equipment management, to individual funds.
The net revenues
(expenses) of the internal service funds is reported with governmental
activities.
(72,058)
Change in net assets of governmental activities
I
$ (3,671,571)
See accompanying notes to the basic financial statements.
22
1
1
1
i
1
1
1
i
1
i
1
1
1
i
1
1
1
i
1
Current assets:
Cash and investments
Total assets
Current liabilities:
Accounts payable
Total liabilities
CITY OF ROSEMEAD
Statement of Net Assets
Proprietary Funds
June 30, 2010
Assets
Liabilities
Net assets
Internal
Service
$ 70,235
70,235
2,299
2,299
Unrestricted
Total net assets
67,936
$ 67,936
See accompanying notes to the basic financial statements.
23
CITY OF ROSEMI
Statement of Revenues, Expenses and C
Proprietary Fun(
Year ended June 30
Operating expenses:
Contractual services
Total operating expenses
Changes in net assets
Net assets at beginning of year
Net assets at end of year
See accompanying notes to the
in Fund Net Assets
'010
Internal
Service
$ 72,058
72,058
(72,058)
139,994
$ 67,936
financial statements.
24
CITY OF ROSEMEAD
Statement of Cash Flows
Proprietary Funds
Year ended June 30, 2010
Net cash proved by (used for) capital
and related financing activities
Net cash provided by (used for)
investing activities
Net increase (decrease) in cash
and cash equivalents 70,235
Cash and cash equivalents at
beginning of year -
Cash and cash equivalents at end of year $ 70,235
Reconciliation of operating income
to net cash provided by (used for)
operating activities:
Operating income (loss) $ (72,058)
Adjustments to reconcile operating
income (loss) to net cash provided
by (used for) operating activities:
Increase (decrease) in accounts payable 2,299
(Increase) decrease in due from other funds 139,994
Total adjustments 142,293
Net cash provided by
operating activities $ 70,235
See accompanying notes to the basic financial statements.
25
Internal
Service
Cash flows from operating activities:
Cash received from user departments
$ 72,534
Cash payments to suppliers for
goods and services
(2,299)
Net cash provided by (used for)
operating activities
70,235
Net cash proved by (used for) capital
and related financing activities
Net cash provided by (used for)
investing activities
Net increase (decrease) in cash
and cash equivalents 70,235
Cash and cash equivalents at
beginning of year -
Cash and cash equivalents at end of year $ 70,235
Reconciliation of operating income
to net cash provided by (used for)
operating activities:
Operating income (loss) $ (72,058)
Adjustments to reconcile operating
income (loss) to net cash provided
by (used for) operating activities:
Increase (decrease) in accounts payable 2,299
(Increase) decrease in due from other funds 139,994
Total adjustments 142,293
Net cash provided by
operating activities $ 70,235
See accompanying notes to the basic financial statements.
25
CITY OF ROSEMEAD
Statement of Fiduciary Assets and Liabilities
Agency Fund
June 30, 2010
i
Assets
i
Cash and investments (note 2) $ 479,080
Total assets $ 479,080
Liabilities
Deposits payable $ 479,080
Total liabilities $ 479,080
See accompanying notes to the basic f inancial statements.
26
I
C
CITY OF ROSEMEAD, CALIFORNIA
Notes to the Basic Financial Statements
Fiscal Year Ended June 30, 2010
(1) Summary of Significant Accounting Policies
(a) Reporting Entity
The City of Rosemead, California, ( "the City ") was incorporated in August 1959
under the general laws of the State of California. The City operates under an
elected Council /City Manager form of government. It 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 a variety of
other public and private agencies under contract. Some of the contracts now in
effect are for police, street maintenance and animal control.
r�
I
The accounting policies of the City conform to generally accepted accounting
principles as applicable to governments. As required by generally accepted
accounting principles, these financial statements present the government and its
component units, which are entities for which the government is considered to be
financially accountable. The City is considered to be financially accountable for
an organization if the City appoints a voting majority of that organization's
governing body and the City is able to impose its will on that organization or there
is a potential for that organization to provide specific financial benefits to or
impose specific financial burdens on the City. The City is also considered to be
financially accountable if an organization is fiscally dependent (i.e., it is unable to
adopt its budget, levy taxes, set rates or charges, or issue bonded debt without
approval from the City). In certain cases, other organizations are included as
component units if the nature and significance of their relationship with the City
are such that their exclusion would cause the City's financial statements to be
misleading or incomplete.
Based upon the above criteria, the blended component units of the City are the
Rosemead Financing Authority (the Authority), the Rosemead Community
Development Commission (the Commission) and the Rosemead Housing
Development Corporation (the Corporation).
27
t
CITY OF ROSEMEAD, CALIFORNIA
Notes to the Basic Financial Statements
(Continued)
(a) Reporting Entity, (Continued)
Rosemead Financing Authority
The Authority provides for the fin
improvements and working capital req
contractual arrangements with the Autl
or refinancing of public capital
is of local agencies that enter into
The Commission's purpose is to
improvement, rehabilitation and rede%
The Commission finances street, p
acquires and constructs major capital
Area No. 1.
Although the Agency is legally separate
because the City Council also serves
Separate financial statements of the A
Department.
and carry out plans for the
of blighted areas within the City.
and utility improvements, and also
ties, all within the Rosemead Project
is reported as if it were part of the City
the governing board of the Agency.
icv can be obtained from the Finance
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.
Since the City Council and /or other City officials serve as the Governing Board
for these component units, all of the City's component units are considered to be
blended component units. Blended component units, although legally separate
entities, are, in substance, part of the ICity's operations. Therefore, data from
these units are reported with the funds of the primary government, the City. The
Commission and the Corporation issue separate component unit financial
statements. The financial statements of these component units can be obtained
from the Finance Department.
28
CITY OF ROSEMEAD, CALIFORNIA
Notes to the Basic Financial Statements
C
1
f1
1
(Continued)
(1) Summary of Significant Accounting Policies, (Continued)
(b) Basis of Accounting and Measurement Focus
The basic financial statements of the City are composed of the following:
• Government -wide financial statements
• Fund financial statements
• Notes to the basic financial statements
Financial reporting is based upon all GASB pronouncements, as well as the
FASB Statements and Interpretations, APB Opinions, and Accounting Research
Bulletins that were issued on or before November 30, 1989 that do not conflict
with or contradict GASB pronouncements.
Government -wide Financial Statements
Government -wide financial statements display information about the reporting
government as a whole, except for its fiduciary activities. These statements
include separate columns for the governmental and business -type activities of
the primary government (including its blended component units), as well as its
presented component units. The City of Rosemead has no discretely presented
component units. Eliminations have been made in the Statement of Activities so
that certain allocated expenses are recorded only once (by function to which they
were allocated). However, general governmental expenses have not been
allocated as indirect expenses to the various functions of the City.
Government -wide financial statements are presented using the economic
resources measurement focus and the accrual basis of accounting. Under the
economic resources measurement focus, all (both current and long -term)
economic resources and obligations of the reporting government are reported in
the government -wide financial statements. Basis of accounting refers to when
revenues and expenditures are recognized in the accounts and reported in the
financial statements. Under the accrual basis of accounting, revenues, expenses,
gains, losses, assets, and liabilities resulting from exchange and exchange -like
transactions are recognized when the exchange takes place. Revenues,
expenses, gains, losses, assets, and liabilities resulting from nonexchange
transactions are recognized in accordance with the requirements of GASB
Statement No. 33.
29
(b)
CITY OF ROSEMEAD,
Notes to the Basic Fi
(Continued)
Program revenues include charges
payments made by parties outside of t
money is restricted to a particular pro
program expenses in the statement of
program.
Amounts paid to acquire capital as:
government -wide financial statements,
Proceeds of long -term debt are record
financial statements, rather than as o'
reduce long -term indebtedness of the
reduction of the related liability, rather th
Fund Financial Statements
The underlying accounting system of th
basis of separate funds, each of which is
entity. The operations of each fund are
balancing accounts that comprise its as!
expenditures or expenses, as approprial
to and accounted for in individual funds
are to be spent and the means by which
Fund financial statements for the
proprietary, and fiduciary funds are
financial statements. These statement
individually and nonmajor funds in the a
funds. Fiduciary statements include fin
similar component units. Fiduciary fun
held by the City in a custodial capacity f
Governmental Funds
In the fund financial statements, gove
modified - accrual basis of accounting. l
become measurable and available as n
the amounts can be estimated, or oth
the amounts were collected during the r
to be available to finance the expenditL
City uses a sixty day availability period.
ME
•3T: RWI
services, special assessments, and
reporting government's citizenry if that
m. Program revenues are netted with
tivities to present the net cost of each
is are capitalized as assets in the
rather than reported as expenditure.
i as a liability in the government -wide
er financing source. Amounts paid to
porting government are reported as a
i as expenditure.
City is organized and operated on the
considered to be a separate accounting
::counted for with a separate set of self -
;ts, liabilities, fund equity, revenues and
. Governmental resources are allocated
lased upon the purposes for which they
pending activities are controlled.
primary government's governmental,
presented after the government -wide
display information about major funds
gregate for governmental and enterprise
icial information for fiduciary funds and
> of the City primarily represent assets
other individuals or organizations.
mental funds are presented using the
air revenues are recognized when they
current assets. Measurable means that
vise determined. Available means that
orting period or soon enough thereafter
s accrued for the reporting period. The
' CITY OF ROSEMEAD, CALIFORNIA
Notes to the Basic Financial Statements
' (Continued)
' (1) Summary of Significant Accounting Policies (Continued
(b) Basis of Accounting and Measurement Focus (Continued)
Revenue recognition is subject to the measurable and available criteria for the
governmental funds in the fund financial statements. Exchange transactions are
' recognized as revenues in the period in which they are earned (i.e., the related
goods or services are provided). Locally imposed derived tax revenues are
recognized as revenues in the period in which the underlying exchange
' transaction on which they are based takes place. Imposed non - exchange
transactions are recognized as revenues in the period for which they were
imposed. If the period of use is not specified, they are recognized as revenues
' when an enforceable legal claim to the revenues arises or when they are
received, whichever occurs first. Government - mandated and voluntary non -
exchange transactions are recognized as revenues when all applicable eligibility
requirements have been met.
In the fund financial statements, governmental funds are presented using the
current financial resources measurement focus. This means that only current
' assets and current liabilities are generally included on their balance sheets. The
reported fund balance (net current assets) is considered to be a measure of
"available spendable resources." Governmental fund operating statements
' present increases (revenues and other financing sources) and decreases
(expenditures and other financing uses) in net current assets. Accordingly, they
are said to present a summary of sources and uses of "available spendable
resources" during a period
Non - current portions of long -term receivables due to governmental funds are
a reported on their balance sheets in spite of their spending measurement focus.
Special reporting treatments are used to indicate, however, that they should not
be considered "available spendable resources," since they do not represent net
current assets. Recognition of governmental fund type revenues represented by
noncurrent receivables are deferred until they become current receivables.
Noncurrent portions of other long -term receivables are offset by fund balance
reserve accounts.
Because of their spending measurement focus, expenditure recognition for
governmental fund types excludes amounts represented by noncurrent liabilities.
Since they do not affect net current assets, such long -term amounts are not
recognized as governmental fund type expenditures or fund liabilities.
Amounts expended to acquire capital assets are recorded as expenditures in the
year that resources were expended, rather than as fund assets. The proceeds of
long -term debt are recorded as other financing sources rather than as a fund liability.
Amounts paid to reduce long-term indebtedness are reported as fund expenditures.
31
CITY OF ROSEMEAD, CALIFORNIA
Notes to the Basic Financial Statement
(Continued)
1
1
(b)
(c)
11
When both restricted and unrestrictedl resources are combined in a fund,
expenses are considered to be paid first from restricted resources, and then from '
unrestricted resources.
Fiduciary Funds
The City's fiduciary funds account for a:
capacity or as an agent on behalf of oth
by the government under the terms of a
Maior and Fiduciary Fund Tvoes
held by the government in a trustee
Trust funds account for assets held
it trust agreement.
The City's major governmental funds are
General Fund — Accounts for all financi
accounted for in another fund. These
general services that the City performs f
20% of gross property tax increment
fund future projects involving the n
moderate - income housing within City Ii
resources for the payment of
related costs.
follows:
resources except those required to be
:sources are devoted to financing the
its citizens.
al Revenue Fund — Accounts for
received by the Commission to
it or rehabilitation of low and
nd — Accounts for the accumulation of
long -term debt principal, interest and
Redevelopment Agency Capital Projects 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 City.
Internal Service Funds — These funds are used to account for vehicle and
technology replacement. Departments of the City are charged for the services
provided or benefits received from theselfunds.
32
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1
CITY OF ROSEMEAD, CALIFORNIA
Notes to the Basic Financial Statements
(Continued)
(1) Summary of Significant Accounting Policies, (Continued)
(c) Maior and Fiduciary Fund Types, (Continued)
The City's Fiduciary Fund is as follows:
Agency Fund — Accounts 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. The Agency Fund is custodial in
nature and does not present results of operations or have a measurement focus.
(d) Investments
For financial reporting purposes, investments are adjusted to their fair value
whenever the difference between fair value and the carrying amount is material.
Changes in fair value that occur during a fiscal year are recognized as
investment income reported for that fiscal year. Investment income includes
interest earnings, changes in fair value, and any gains or losses realized upon
the liquidation or sale of investments.
The City pools cash and investments of all funds, except for assets held by fiscal
agents. Each fund's share in this pool is displayed in the accompanying financial
statements as cash and investments. Investment income earned by the pooled
investments is allocated to the various funds based on each fund's average cash
and investment balance.
(e) Cash Equivalents
For purposes of the statement of cash flows, cash equivalents are defined as
short-term, highly liquid investments that are both readily convertible to known
amounts of cash or so near their maturity that they present insignificant risk of
changes in value because of changes in interest rates. Cash equivalents also
represent the proprietary funds' share in the cash and investment pool of the City
of Rosemead. Cash equivalents have an original maturity date of three months or
less from the date of purchase. For purposes of the statement of cash flows, the
entire balance of cash and investments on the combined balance sheet for the
internal service fund is considered cash and cash equivalents.
33
CITY OF ROSEMEAD, CALIFORNIA
Notes to the Basic Financial Statements
(Continued)
(f)
(g)
Capital Assets
Capital assets (including infrastructure
records are available and at an estim
records exist. Contributed capital assets
value at the date of the contribution. Gei
of $10,000 are capitalized if they have
more.
are recorded at cost where historical
ated historical cost where no historical
are valued at their estimated fair market
erally, capital asset purchases in excess
an expected useful life of one year or
Capital assets include public dom
consisting of certain improvements ii
and storm drains.
astructure) general capital assets
roads, streets, sidewalks, medians,
Capital assets used in operations are Idepreciated over their estimated useful
lives using the straight -line method in the government —wide financial statements
and in the fund financial statements of the internal service funds. Depreciation is
charged as an expense against operations and accumulated depreciation is
reported on the respective balance sheet.
The following schedule summarizes
Buildings
Improvements other than buildi
Machinery and equipment
Autos and trucks
Furniture and office equipment
Infrastructure:
Bridges
Sewer system and storm drs
Medians and sidewalks
Traffic signals
Streets
asset useful lives:
50 years
15 years
7 years
5 years
7 years
50 years
system 50 -100 years
40 years
30 years
20 years
Compensated Absences
Vacation and sick leave pay are payal
termination of employment. All vac
government -wide level financial staterr
probable that the benefits will result in
taken as absences due to illness <
appointments and funerals).
to employees at the time used or upon
on is accrued when incurred in the
its. Sick pay is accrued to the extent it is
rmination payments (i.e., rather than be
other contingencies, such as medical
34
I
' CITY OF ROSEMEAD, CALIFORNIA
Notes to the Basic Financial Statements
(Continued)
1
(1) Summary of Significant Accounting Policies. (Continued)
' (g) Compensated Absences, (Continued)
The sick leave liability is estimated based on the City's past experience of
making termination payments from sick leave, adjusted for the effect of changes
in its termination payment policy and other current factors. A liability for these
' amounts is reported in governmental funds only if it has matured or will be paid
from available resources of the current period. City employees accumulate
vacation hours that 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 City allows employees who have earned vacation time an opportunity to
' have the City buy back up to two weeks of vacation time per year. In order to
participate in the Vacation Buy -Back Program, an employee must take at least 40
consecutive hours of vacation at one time.
' (h) Prepaid Items
' Prepaid items are reported in the governmental funds under the consumption
method and are offset by a reservation in fund balance to indicate that they are
not available for appropriation and are not expendable financial resources.
' (i) Fund Equity
In the fund financial statements, governmental funds report reservations of fund
' balance for amounts that are not available for appropriation or are legally
restricted by outside parties for use for a specific purpose. Designations of fund
balance represent tentative management plans that are subject to change.
' (j) Use of Estimates
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions
that affect certain reported amounts and disclosures. Accordingly, actual results
' could differ from those estimates.
1
35
CITY OF ROSEMEAD, (
Notes to the Basic Financi
(Continued)
(k)
On October 9, 1991 the Commission pr
of $6,813,850 from proceeds from it:
payment was restructured in 1993 al
bonds. As a result, the Commission's
$469,142 per year until the 2021 -22 fisc
(2) Cash and Investments
Cash and investments as of June 30, 2010 ar(
statements as follows:
Statement of Net Assets:
Cash and investments
Statement of Fiduciary Assets and Liabilities:
Cash and investments
Total cash and investments
Cash and investments as of June 30, 2010
Deposits with financial institutions
Investments
Total cash and investments
- IFORNIA
Statements
aid its housing obligation in the amount
1987 tax allocation notes. This pre -
g with the 1993 series tax allocation
Busing obligation has been reduced by
year.
classified in the accompanying financial
$32,854,626
479,080
$33.333,706
of the following:
$ 3,179,348
30,154, 358
$33.333.706
36
I
1
1
1
[1
1
1
I
1
1
CITY OF ROSEMEAD, CALIFORNIA
Notes to the Basic Financial Statements
(Continued)
(2) Cash and Investments. (Continued)
Investments Authorized by the California Government Code and the City's Investment
Policy
The table below identifies the investment types that are authorized for the City by the
California Government Code and the City's investment policy. The table also identifies
certain provisions of the California Government Code (or the City's investment policy, if
more restrictive) that address interest rate risk, credit risk, and concentration of credit
risk. This table does not address investments of debt proceeds held by bond trustee that
are governed by the provisions of debt agreements of the City, rather than the general
provisions of the California Government Code or the City's investment policy.
Investment Types
Authorized by State Law
Authorized
By Investment *Maximum
Policy Maturi
*Maximum
*Maximum
Percentage
Investment
Of Portfolio
In One Issuer
U.S. Treasury Obligations
U.S. Agency Securities
Banker's Acceptances
Commercial Paper
Negotiable Certificates of Deposit
Repurchase Agreements
Reverse Repurchase Agreements
Medium -Term Notes
Money Market Mutual Funds
Local Agency Investment Fund
(LAIF)
Yes
5 years
None
None
Yes
5 years
None
None
Yes
270 days
40%
10%
Yes
270 days
25%
10%
Yes
3 years
30%
None
No
N/A
N/A
N/A
No
N/A
N/A
N/A
Yes
3 years
15%
10%
Yes
N/A
None
None
Yes
N/A
None
None
* Based on state law requirements or investment policy requirements, whichever is more
restrictive.
37
CITY OF ROSEMEAD, CALIFORNIA
Notes to the Basic Financial Statements
(Continued)
2) Cash and Investments. (Continued)
Investments Authorized by Debt Agreements
Investment of debt proceeds held by bond trust
agreements, rather than the general provision
the City's investment policy. The table below
authorized for investments held by bond tri
provisions of these debt agreements that ad
concentration of credit risk.
are governed by provisions of the debt
of the California Government Code or
lentifies the investment types that are
tee. The table also identifies certain
ass interest rate risk, credit risk, and
Disclosures Relating to Interest Rate Risk
Interest rate risk is the risk that changes in m;
fair value of an investment. Generally, the I
greater the sensitivity of its fair value to cha
ways that the City manages its exposure to
investments, such as LAIF.
interest rates will adversely affect the
r the maturity of an investment, the
in market interest rates. One of the
:st rate risk is by investing in pooled
Maximum
Maximum
Authorized
Maximum
Percentage
Investment
Investment Type
Maturi
Allowed
in One Issuer
U.S. Treasury Obligations
5 years
None
None
U.S. Agency Securities
5 years
None
None
Banker's Acceptances
270 days
40%
10%
Commercial Paper
180 days
10%
10%
Money Market Portfolio
11year
None
None
Investment Agreements
None
None
None
Disclosures Relating to Interest Rate Risk
Interest rate risk is the risk that changes in m;
fair value of an investment. Generally, the I
greater the sensitivity of its fair value to cha
ways that the City manages its exposure to
investments, such as LAIF.
interest rates will adversely affect the
r the maturity of an investment, the
in market interest rates. One of the
:st rate risk is by investing in pooled
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CITY OF ROSEMEAD, CALIFORNIA
Notes to the Basic Financial Statements
(Continued)
(2) Cash and Investments, (Continued)
Information about the sensitivity of the fair values of the City's investments (including
investments held by bond trustee) to market interest rate fluctuations is provided by the
following table that shows the distribution of the City's investments by maturity:
Remaining Maturity (in Months)
12 Months 13 to 24 25 Months
Investment Type Total Or Less Months or Greater
State investment pool $ 28,031,304 28,031,304 - -
Certificates of deposit 980,000 - 490,000 490,000
Held by bond trustee:
Investment agreement 1,143,054 - - 1,143,054
Total $3Q,154 358 28.031.304 490,000 1 633 054
Disclosures Relatina to Credit Risk
Generally, credit risk is the risk that an issuer of an investment will not fulfill its obligation
to the holder of the investment. This is measured by the assignment of a rating by a
nationally recognized statistical rating organization. Presented below is the minimum
rating required by (where applicable) the California Government Code, the City's
investment policy, or debt agreements, and the actual rating as of year end for each
investment type.
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Minimum
Legal
Not
Investment Type
Total
Rating
AAA Rated
State investment pool
$ 28,031,304
N/A
28,031,304
Certificates of deposit
980,000
N/A
980,000
Held by bond trustee:
t
Investment agreement
1,143,054
N/A
1.143,054
'
Total
$ 30.154.358
30.154.358
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CITY OF ROSEMEAD,
Notes to the Basic
(Continued)
(2) Cash and Investments. (Continued)
Custodial Credit Risk
Custodial credit risk for deposits is the risk that,
financial institution, a government will not be a
able to recover collateral securities that are in
custodial credit risk for investments is the risF
counterparty (e.g., broker - dealer) to a transac
recover the value of its investment or collatera
another party. The California Government Cod(
contain legal or policy requirements that would
for deposits or investments, other than the
California Government Code requires that a fins
state or local governmental units by pledging
held by a depository regulated under state law
unit). The fair value of the pledged securities i
110% of the total amount deposited by the pu
financial institutions to secure City deposits by
having a value of 150% of the secured public d(
no deposits with financial institutions in excess i
in uncollateralized accounts.
Investment in State Investment Pool
The City is a voluntary participant in the Loci
regulated by the California Government Code (
State of California. The fair value of the City's
accompanying financial statements at amount
the fair value provided by LAIF for the entire I
cost of that portfolio). The balance available f
records maintained by LAIF, which are recorde
Statements
in the event of the failure of a depository
Die to recover its deposits or will not be
:he possession of an outside party. The
that, in the event of the failure of the
tion, a government will not be able to
securities that are in the possession of
and the City's investment policy do not
imit the exposure to custodial credit risk
following provision for deposits: The
ncial institution secure deposits made by
ecurities in an undivided collateral pool
(unless so waived by the governmental
i the collateral pool must equal at least
)lic agencies. California law also allows
pledging first trust deed mortgage notes
!posits. As of June 30, 2010 the City had
�f federal depository insurance limits held
Agency Investment Fund (LAIF) that is
ider the oversight of the Treasurer of the
ivestment in this pool is reported in the
based upon the City's pro -rata share of
CIF portfolio (in relation to the amortized
withdrawal is based on the accounting
on an amortized cost basis.
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Under California law, property taxes are assessed and collected by the counties up to
1% of assessed value, plus other increases approved by the voters. The property taxes
are recorded initially in a pool, and are then allocated to the cities based on complex
formulas. Accordingly, the City of Rosemead accrues only those taxes that are received
from the County within sixty days after year -end.
' Lien date January 1
Levy date July 1
Due dates November 1 and February 1
' Collection dates December 10 and April 10
The Community Development Commission of the City of Rosemead's primary source of
' revenue comes from property taxes. Property taxes allocated to the Commission are
computed in the following manner:
1
CITY OF ROSEMEAD, CALIFORNIA
Notes to the Basic Financial Statements
(Continued)
(3) Property Taxes
(a) The assessed valuation of all property within the project area is determined on
the date of adoption of the Redevelopment Plan.
(b) Property taxes related to the incremental increase in assessed values after the
adoption of the Redevelopment Plan are allocated to the Commission; all taxes
on the "frozen" assessed valuation of the property are allocated to the City and
other districts.
The Commission has no power to levy and collect taxes and any legislative property tax
shift might reduce the amount of tax revenues that would otherwise be available to pay
the principal of, and interest on, debt. Broadened property tax exemptions could have a
similar effect. Conversely, any increase in the tax rate or assessed valuation, or any
reduction or elimination of present exemptions would increase the amount of tax
revenues that would be available to pay principal and interest on debt.
41
CITY OF ROSEMEAD, C
Notes to the Basic Financie
(Continued)
(4) Interfund Receivables and Pavables
Current interfund receivables and payables
Due from other funds Due'
General Fund Low-
Capital
statements
at June 30, 2010 are as follows
nds Amount
Income $ 23,667
t Agency
:ts Fund 171,458
fernmental Fund 569.482
M ,
Total General Fund
764,607
Non -Major
Redevelopment Agency
Governmental Fund
Capital Projects Fund
395.229
Redevelopment Agency
Capital Projects Fund
General Fund
249
Non -Maji r Governmental Fund
9.550
Total RDA Capital Projects Fund
9,799
Redevelopment Agency
Low- Moderate Income
Capital Projects Fund
718.929
i
Total
$ 1.888.564
(A) Short-term borrowing to cover temporary cash deficits.
Noncurrent interfund receivable and payable balances at June 30, 2010
are as follows:
Advances to other funds
Advances from other funds
Amount
Low - Moderate Income
Redevelopment Agency
Housing Set -Aside
DebtIService Fund
$ 4,477,945 (B)
General Fund
Rede lelopment Agency
Capital Projects Fund
2,497.920
(C)
Total
$ 6.975 865
M ,
' CITY OF ROSEMEAD, CALIFORNIA
Notes to the Basic Financial Statements
' (Continued)
(4) Interfund Receivables and Payables, (Continued)
' (B) Under State law, the Commission is required to set aside a portion of its property
tax increment revenue for low- and moderate - income housing. The Commission
has made findings that, for the years ended June 30, 1986 through 1991, it was
' allowed to defer funding of the set - aside. The set -aside amounts incurred during
the fiscal years ended June 30, 1994, 1995 and 1996 were also deferred until the
fiscal year ending June 30, 2023, as provided by the Commission's adoption of
the housing deficit repayment plan. As of June 30, 2010, the accumulated set-
, aside amount not yet funded was $4,477,945. As required by law, the
Commission devised a plan to fund the accumulating amount.
(C) In September 2007 the General Fund advanced the Redevelopment Agency
' Capital Projects Fund $2,497,920 at an interest rate of 5.25% per annum.
Accrued interest is payable in annual installments of $131,141 beginning on
September 28, 2008, and continuing until September 28, 2027, at which time the
remaining principal and interest shall be due in full.
(5) Interfund Transfers
Interfund transfers were as follows for the year ended June 30, 2010:
' Transfer In Transfer Out Amount
General Fund Non -Major Governmental $ 70,996
' Funds
Low- Moderate Income Redevelopment Agency
Housing Set -Aside Debt Service Fund 925,481 (A)
Redevelopment Agency Redevelopment Agency
Capital Projects Fund Debt Service Fund 1,190,363 (B)
General Fund 221,478
Non -Major Governmental
Funds 504.249
Total Redevelopment Agency
Capital Projects Fund 1,916,090
Non -Major Governmental Low - Moderate Income
Housing Set -Aside 250,000
8 Redevelopment Agency
Capital Projects Fund 304,065
Redevelopment Agency
Debt Service Fund 666,922
Total Non -Major Governmental
Funds 1.220,987
8 Total $ 4133.554
The following describes the significant transfers in and transfers out included in the
financial statements:
(A) To record the low and moderate income housing set -aside for the year
ended June 30, 2010.
(B) To transfer remaining tax increment, net of pass- through payments, 20%
set aside and debt service payments to the Capital Projects Fund.
43
e
CITY OF ROSEMEAD, CF
Notes to the Basic Financia
(Continued)
(6) Capital Assets
Capital asset activity was as follows for the year
Balance at
- IFORNIA
Statements
June 30. 2010:
Balance at
Increases Decreases June 30, 2010
Governmental activities:
Capital assets not depreciated:
Land
$ 2,968,824
2,968,824
Construction in progress
383,536
- 383,536
Total capital assets
not being depreciated
2.968,824
383.536
3,352,360
Capital assets being depreciated:
Buildings
23,994,956
-
- 23,994,956
Improvements other than
buildings
1,027,097
-
- 1,027,097
Machinery and equipment
977,031
36,904
- 1,013,935
Autos and trucks
637,129
229,169
- 866,298
Furniture and office equipment
2,501,386
-
- 2
Infrastructure
47,201,352
125,670
- 47,327,022
Total capital assets
being depreciated
76.338 951
391.743
76,730,694
Less accumulated depreciation for:
Buildings
(6,630,318)
(752,881)
- (7,383,199)
Improvements other than
buildings
(907,476)
(38,997)
- (946,473)
Machinery and equipment
(772,319)
(26,340)
- (798,659)
Autos and trucks
(432,500)
(85,039)
- (517,539)
Furniture and office equipment
(2,344,395)
(48,807)
- (2
Infrastructure
(21,852,180
(1.330,606
- (23,182,786
Total accumulated
I
depreciation
(32,939,188
(2.282,670
(35,221,858
Total capital assets being
depreciated, net
43,399,763
(1.890.927)
41,508,836
Governmental activities
I
capital assets, net
$46.368 587
(1.507.391)
44.861.196
..
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' CITY OF ROSEMEAD, CALIFORNIA
Notes to the Basic Financial Statements
' (Continued)
(6) Capital Assets, (Continued)
Depreciation expense was charged to functions /programs of the primary government as
follows:
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Governmental activities:
Public works
$2,082,093
Community development
200,577
Total depreciation expense
$2.282.670
(7) Changes in Long -Term Liabilities
Long -term debt consists of the following
at June 30, 2010:
Balance at
June 30, 2009
Additions
Reductions
Balance at Due within Due Beyond
June 30, 2010 One Year One Year
Governmental activities:
Tax allocation bonds,
Series 2006A $11,570,000
870,000
10,700,000
900,000 9,800,000
Tax allocation bonds,
Series 20068 23,865,000
Unamortized bond
75,000
23,790,000
75,000 23,715,000
premiums 257,424
19,802
237,622
19,802 217,820
Capital lease -
102,501
32,357
70,144
34,137 36,007
Retrospective deposit 207,476
512,075
-
719,551
69,159 650,392
Compensated
absences 422.850
348.936
284.022
487,764
209.725 278.039
8
$36 3 2,750
X63 _`Z
1 2�1 181
6 OQS. 081
1 0 34 697 2-5
a
The City records expenditures
related to
compensated absences
through the City's
General Fund.
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CITY OF ROSEMEAD, CALIFORNIA
Notes to the Basic Financial Statements
(Continued)
(7) Changes in Long -Term Liabilities. (Continued)
Capital Lease
In 2010, the City entered into a lease agreemei
The lease agreement qualifies as a capital lea
at end of lease) and, therefore, has been rec
minimum lease payments as of the date of ince
fiscal year under this lease agreement is recc
The outstanding balance at June 30, 2010 was
for the acquisition of an aerial lift truck.
for accounting purposes (title transfer
rded at the present value of the future
lion. The equipment acquired during the
Jed at its acquisition cost of $102,501.
70,144.
The calculation of the present value of the future lease payments is as follows:
Amount of future lease payments
for the year ending June 30,
2011
2012
Governmental Activities
$ 37,995
37,995
Subtotal
Less amount representing interest
Present value of future lease payments
75,982
( 5,838)
7 144
Tax Allocation Bonds, Series 2006A
On March 9, 2006, the Commission issued)
$14,005,000 (Series 2006A) to: (1) refund a
Series 1993A bonds and (2) to finance redeveli
Area No.1. The bonds bear interest ranging fre
installments of $780,000 to $1,250,000 on vari
Commission purchased a surety bond in Ii
$1,323,238. Portions of the bonds are subject!
Commission, beginning October 1, 2017.
tax allocation bonds in the amount of
>ortion of the Commission's outstanding
)pment activity in Redevelopment Project
m 3.25% to 5.00% and mature in annual
pus dates through October 1, 2022. The
�u of cash reserve in the amount of
to early redemption, at the option of the
A surety bond has been acquired to satisfy
2010 the outstanding balance was $10,700,0(
reserve requirements. As of June 30,
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CITY OF ROSEMEAD, CALIFORNIA
Notes to the Basic Financial Statements
(Continued)
(7) Changes in Long -Term Liabilities. (Continued)
Tax Allocation Bonds, Series 20068
In December 2006, the Commission issued $24,230,000 in Project Area No. 1 Tax
Allocation Bonds. The bonds mature in amounts ranging from $70,000 to $1,430,000
with interest rates ranging from 3.25% to 4.25% through October 1, 2025. The net
proceeds were used to refund the remaining $23,095,000 amount outstanding on the
1993 Tax Allocation Bonds. The securities were deposited in an irrevocable trust with
an escrow agent to provide for all future debt service payments on the 1993 Bonds. As
a result, the entire 1993 Bonds are considered to be defeased and the liability for those
bonds has been removed from the government -wide financial statements.
A surety bond has been acquired to satisfy the reserve requirements. As of June 30,
2010, $23,790,000 of the bonds are outstanding.
At June 30, 2010, debt service requirements to maturity for governmental activities long-
term debt are as follows:
Year Ending June 30
2011
2012
2013
2014
2015
2016 -2020
2021 -2023
2025 -2029
2030 -2034
2006A Tax Allocation Bonds 2006B Tax Allocation Bonds
Principal Interest Principal Interest
$ 900,000
449,856
75,000
930,000
419,481
80,000
965,000
386,931
80,000
1,000
353,156
85,000
1,035,000
313,156
85,000
4,965,000
768,155
1,500,000
905,000
75,694
6,360,000
-
-
7,850,000
7,675,000
$10.700.000
2,766.429
23,790 000
1,035,049
1,032,336
1,029,536
1,026,649
1,023,674
5,046,903
4,181,211
2,646,266
701.955
17.723.579
47
8
CITY OF ROSEMEAD,
Notes to the Basic
Statements
(Continued)
(8) Post Employment Benefit Plan
Plan Description: The City administers a sing
provides medical insurance benefits to eligible i
with various labor agreements. The City has nc
by the City for the purpose of holding assets a
65, Medicare automatically becomes the primar
defined benefit plan becomes the secondary
noticeable change in health benefits or plan adn
in the City's cost of health coverage as the
benefit plan administrator establishes the cost o
City will pay 100% for eligible retirees' health co
employer defined benefit plan which
stirees and their spouses in accordance
established a trust that is administered
;cumulated for plan benefits. After age
provider of health coverage. The City's
)rovider. Eligible retirees will have no
inistration; however, there is a reduction
econdary provider. The City's defined
secondary provider rates annually. The
Eligibility: Employees are eligible for retiree health benefits if they retire from the City on
or after age 50 with at least 5 years of service, and are eligible for a PERS pension. ,
Membership of the plan consisted of the follow' ing at January 1, 2008, the date of the
latest actuarial valuation:
Retirees and beneficiaries receiving beriefits 14
Active plan members 30
Total 1 44
City's Funding Policy. The contribution requirements of plan members and the City are
established and may be amended by City Cou `cil. The contribution required to be made
under City Council and labor agreement requirements is based on a pay -as- you -go basis
(i.e., as medical insurance premiums become` due). For fiscal year 2009 -10, the City
contributed $131,487 to the plan for current premiums.
Annual OPEB Cost and Net OPEB Obligatior
benefit (OPEB) cost (expense) is calculated b;
the employer (ARC), an amount actuaria
parameters of GASB Statement No. 45. The
paid on an ongoing basis, is projected to cove
unfunded actuarial liabilities (or funding exces
The following table shows the components of
the amount actually contributed to the plar
obligation for these benefits:
The City's annual other postemployment
ced on the annual required contribution of
determined in accordance with the
,RC represents a level of funding that, if
normal cost each year and amortize any
over a period not to exceed thirty years.
ie City's annual OPEB cost for the year,
and changes in the City's net OPEB
En
I
' CITY OF ROSEMEAD, CALIFORNIA
Notes to the Basic Financial Statements
(Continued)
1
(8) Post Employment Benefit Plan (Continued)
Annual required contribution $284,778
Interest on net OPEB obligation 5,917
Adjustments to annual required contributions (5,917
Annual OPEB cost (expense) 284,778
Contributions made (including premiums paid) (762,907)
Decrease in net OPEB obligation (478,129)
Net OPEB obligation- beginning of year 153.291
Net OPEB asset -end of year 24 838
The net OPEB asset is reported in the government -wide statements as part of prepaid
expenses.
The City's annual OPEB cost, the percentage of annual OPEB cost contributed to the
plan, and the net OPEB obligation for 2010 and the two preceding years were as follows:
Percentage of Net
Annual OPEB
Fiscal Annual OPEB Cost Obligation
Year OPEB Cost Contributed Asset
6/30/08 N/A N/A N/A
6/30/09 $284,778 46% $153,291
6/30/10 284,778 268% (324,838)
Actuarial valuations of an ongoing plan involve estimates of the value of reported
amounts and assumptions about the probability of occurrence of events far into the
future. Examples include assumptions about future employment, mortality, and the
healthcare cost trend. Amounts determined regarding the funded status of the plan and
the annual required contributions of the employer are subject to continual revision as
actual results are compared with past expectations and new estimates are made about
the future. The schedule of funding progress, presented as required supplementary
information following the notes to the financial statements, presents multi -year trend
information about whether the actuarial value of plan assets is increasing or decreasing
over time relative to the actuarial accrued liabilities for the benefits.
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49
CITY OF ROSEMEAD, CALIFORNIA
Notes to the Basic Financial Statements
(Continued)
(8) Post Employment Benefit Plan, (Continued)
Actuarial Methods and Assumptions. Projec
purposes are based on the substantive plan (
and the plan members) and include the types
valuation and the historical pattern of sharing
plan members to that point. The actuarial i
techniques that are designed to reduce the e
accrued liabilities and the actuarial assets, cor
the calculations.
is of benefits for financial reporting
plan as understood by the employer
benefits provided at the time of each
benefit costs between employer and
hods and assumptions used include
;ts of short-term volatility in actuarial
tent with the long -term perspective of
The actuarial cost method used for determini
Entry Age Actuarial Cost Method. The actue
investment rate of return, which is the as!
investment returns on plan assets calculated be
valuation date, and an annual healthcare cost
by decrements of 0.5 per year to an ultimate r<
UAAL is being amortized as a level percentag(
assumed the City's payroll will increase 3.25% 1
SCHEDULE OF
Actuarial
Accrued
g the benefit obligations is the Frozen
al assumptions included a 4.5 percent
imed rate of the expected long -term
;ed on the funded level of the plan at the
'end rate of 10 percent initially, reduced
e of 5 percent after the tenth year. The
of projected payroll over 30 years. It is
:r year.
PROGRESS
UAAL as a
Covered
Date (a) (b)
1/01/06 N/A N/A
1/01/07 N/A N/A
1/01/08 $0 $3,548,605
a/b
N/A N/A N/A
N/A N/A N/A
0% $1,682,985 211%
(9) Risk Management
The City is a member of the California Joint Powers Insurance Authority (Authority). The
Authority is composed of 122 California public entities and is organized under a joint
powers agreement pursuant to California Government Code §6500 et seq. The purpose
of the Authority is to arrange and administer) programs for the pooling of self- insured
losses, to purchase excess insurance or reinsurance, and to arrange for group
purchased insurance for property and other I coverages. The Authority's pool began
covering claims of its members in 1978. Each member government has an elected
official as its representative on the Board of Directors. The Board operates through a 9-
member Executive Committee.
50
D
' CITY OF ROSEMEAD, CALIFORNIA
Notes to the Basic Financial Statements
(Continued)
1 (9) Risk Management. (Continued
Each member government pays a primary deposit to cover estimated losses for a fiscal
year (claims year). After the close of a fiscal year, outstanding claims are valued. A
retrospective deposit computation is then made for each open claims year. Claims are
pooled separately between police and non - police. Costs are allocated to members by
the following methods within each of the four layers of coverage: (1) the first $30,000 of
each occurrence is charged directly to the member's primary deposit; (2) costs from
$30,000 to $750,000 and the loss development reserves associated with losses up to
$750,000 are pooled based on the member's share of losses under $30,000; (3) losses
from $750,000 to $2,000,000 and the associated loss development reserves are pooled
1 based on payroll; (4a) costs of covered claims from $2,000,000 to $50,000,000 are paid
under reinsurance and excess insurance policies (4b) subject to a $3,000,000 annual
aggregate deductible (4c) and a quota- sharing agreement whereby the Authority is
financially responsible for 40% of losses occurring within the $2,000,000 to $10,000,000
layer. The costs associated with 4a -c are estimated using actuarial models and pre -
funded as part of the primary and retrospective deposits.
The overall policy limit for each member including all layers of coverage is $50,000,000
per occurrence. Costs of covered claims for subsidence losses are paid by excess
insurance with the following sub - limits per member: $25,000,000 per occurrence with a
$15,000,000 annual aggregate.
The City also participates in the workers' compensation pool administered by the
Authority. Each member pays a primary deposit to cover estimated losses for a fiscal
year (claims year). After the close of a fiscal year, outstanding claims are valued. A
retrospective deposit computation is then made for each open claims year. Claims are
1 pooled separately between public safety and non - public safety
Costs are allocated to members by the following methods within each of the four layers
a of coverage: (1) the first $50,000 of each loss is charged directly to the member's
primary deposit; (2) losses from $50,000 to $100,000 and the loss development reserve
associated with losses up to $100,000 are pooled based on the member's share of
losses under $50,000; (3) losses from $100,000 to $2,000,000 and the loss development
reserves associated with those losses are pooled based on payroll; (4) losses from
$2,000,000 up to statutory limits are paid under an excess insurance policy. Protection
is provided per statutory liability under California Workers' Compensation law.
Employer's Liability losses are pooled among members to $2,000,000, coverage from
$2,000,000 to $4,000,000 is purchased as part of an excess insurance policy, and
0 losses from $4,000,000 to $10,000,000 are pooled among members.
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8
CITY OF ROSEMEAD, CALIFORNIA
Notes to the Basic Financial Statements
(Continued)
(9) Risk Management, (Continued)
The City participates in the pollution legal liabili
which is available through the Authority. The F
of scheduled property, streets, and storm drain
is on a claims -made basis. There is a $50,00
$50,000,000 for the 3 -year period from July 1,
of the Authority has a $10,000,000 sub -limit du
and remediation legal liability insurance
icy covers sudden and gradual pollution
owned by City of Rosemead. Coverage
deductible. The Authority has a limit of
)08 through July 1, 2011. Each member
ig the 3 -year term of the policy.
During the past three fiscal years, none of thelabove programs of protection have had
settlements or judgments that exceeded pooled or insured coverage. There have been
no significant reductions in pooled or insured liability coverage from coverage in the prior
year. i
As of June 30, 2010 the City had retrosp
amount of $719,551. The deposit will be
the next three years. The retrospective d(
liabilities on the Statement of Net Assets.
(10) Retirement Plans
Defined Benefit Pension Plan
deposits payable to the Authority in the '
I through adjustments to premiums over
)avable has been included in noncurrent
The City of Rosemead contributes to the California Public Employees Retirement
System (PERS), a cost - sharing multiple - employer public employee defined benefit
pension plan. PERS provides retirement, disability benefits, and death benefits to plan
members and beneficiaries. PERS acts as al common investment and administrative
agent for participating public entities within the State of California. PERS issues a
publicly available financial report that includes financial statements and required
supplementary information for the cost sharing plans that are administered by PERS.
Copies of PERS' annual financial report may f be obtained by writing to 400 "P" Street,
Sacramento, California 95814.
Contributions and Funding Policy
Miscellaneous participants are required to cor
The City is required to contribute at an actuari
ended June 30, 2010 is 26.454% percent of
requirements of plan members and the City
City Council in conjunction with applicable lab(
miscellaneous plan for the years ending June
$1,428,348, and $1,361,873, respectively, an
for each year.
ribute 7% of their annual covered salary.
illy determined rate. The rate for the year
annual covered payroll. The contribution
reestablished and maybe amended by
contracts. The City's contributions to the
10, 2008, 2009, and 2010 were $828,584,
were equal to the required contributions
[7
52
' CITY OF ROSEMEAD, CALIFORNIA
Notes to the Basic Financial Statements
(Continued)
' (10) Retirement Plan. (Continued)
Supplemental Defined Benefit Pension Plan
Effective July 1, 2000, the City entered into an agreement with Public Agency
Retirement Services (PARS) whereby the City contributes to a supplemental employee
pension plan (the plan II), a single - employer defined benefit pension plan administered
by Phase II Systems. The plan II provides a supplemental retirement benefit of 1% for
each year of service to plan members and beneficiaries. Employees with at least 10
years of service and City Council members with at least 10 years of service are eligible
to participate at age 60 and receive an annual benefit equal to 3% of the highest annual
1 gross pay for each year of service. Benefits are determined using the same method as
CalPERS benefits.
PARS issues a publicly available financial report that includes financial statements and
required supplementary information for the plan II. That report may be obtained by
writing to PARS, 3961 MacArthur Boulevard, Suite 200, Newport Beach, California,
92660.
An actuarial valuation of the City of Rosemead Supplemental Defined Benefit Pension
Plan was performed as of July 1, 2008 to determine the funding level requirement of the
plan for the current fiscal period. Actuarial valuations are performed once every two
years. The employer contribution rate for the plan years 2009 and 2010 was 5.83 %.
1
1
1
A summary of principle assumptions and methods used to determine the ARC is shown
below.
Valuation Date
Actuarial Cost Method
Amortization Method
Asset Valuation Method
Actuarial Assumptions:
Investment Rate of Return
Inflation Rate
Retirement
Cost of Living Adjustment
July 1, 2008
Entry Age Normal
Level Dollar
Market Value
7.50% for funding purposes
3%
For miscellaneous employees and the contract City
Attorney: Retirement rate of 20% at ages 60 and
older with between 10 and 20 years of service, and
retirement rate of 30% at ages 55 and older with
more than 20 years of service. For City Council
members: Retirement rates of 30% per year.
2% compounded annually
Initial unfunded liabilities are amortized over a closed 20 year period from July 1,
2002 with amortization payments increasing 3.25% annually. Payments are assumed
to be made throughout the year.
53
CITY OF ROSEMEAD
Notes to the Basic
(Continued)
10) Retirement Plan, (Continued)
37:7N1"
Statements
The Schedule of Funding Progress below show's the recent history of the actuarial value
of assets, actuarial accrued liability, their relationship, and the relationship of the
unfunded actuarial accrued liability to payroll.
Employer
Ended June 30
Contribution
Required Supplementary Information
$246,265
2009
74,317
2010
Entry Age
Valuation Normal Actuarial
Unfunded
UAL As a
Date Accrued Value of
Liability (UAL)/
Funded
Valuation
% of
July 1 Liability Assets
(Excess Assets)
Status
Payroll
Payroll
2004 12,582,633 828,182
1,754,4151
32.07%
2,037,432
86.11%
2006 2,973,299 1,438,282
1,535,0
48.37%
2,367,310
64.84%
2008 2,242,154 1,910,854
331,300
85.22%
3,747,667
8.84%
Three -year trend information:
Annual Pension Cost (Employer Contribution)
Fiscal Years
Employer
Ended June 30
Contribution
2008
$246,265
2009
74,317
2010
70,019
11) Commitments and Continaencies
The City is a member of the Los Angeles Cc
which was set up to pay for litigation invi
Department within any of the 40 cities that
Sheriffs' Department. The Trust Fund was ai
upon each city's allocated surcharge, cak
contribution to the total contracted amount wi
for the use of its deputies. Based upon the ag1
time the Trust Fund originated, the cities will
against the Los Angeles County Sheriffs' Del
the 40 cities.
Net
Pension
Obligation
100%
100%
100%
my Liability Trust Fund (the Trust Fund),
ving the Los Angeles County Sheriffs'
are served by the Los Angeles County
i is being funded by the 40 cities based
elated as a percentage of each city's
i the County paid to Los Angeles County
! ement signed by all of the 40 cities at the
e jointly liable for any and all claims filed
3rtment, regardless of the location within
54
I
1
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1
i
1
CITY OF ROSEMEAD, CALIFORNIA
Notes to the Basic Financial Statements
(Continued)
(11) Commitments and Contingencies, (Continued)
In 1998 the County of Los Angeles lost a litigation mailer that resulted in a $25,000,000
judgment against the Los Angeles County Sheriffs' Department, which Los Angeles
County has since paid. The City believes its share of this liability is approximately 3 %, or
$600,000, which will accrue interest at 4% and be paid by the Trust Fund to Los Angeles
County (from amounts on deposit with the Trust Fund) over the next 10 years. No
additional liability will be incurred by the City. However, if the City decided to terminate
its association with the Trust Fund, it would become immediately liable for its share of
the remaining liability.
(12) Fund Deficits
The following funds had deficit balances as of June 30, 2010:
Fund Name
HOME
Federal Highway Grant
City Capital Projects
Deficit Fund
Balance
$ 464,042
72,093
343,484
The fund deficits noted above primarily relate to expenditures charged to projects during
the fiscal year ended June 30, 2010, which were submitted for reimbursement.
(13) Expenditures in Excess of Appropriations
Expenditures exceeded appropriations in the following funds:
Fund
General fund
RDA Capital Projects
CDBG
State Gas Tax
AQMD
Narcotics Forfeiture
Measure R
Budget
Actual
Variance
$18,058,846
18,092,450
(33,604)
1,558,336
3,140,102
(1,581,766)
1,557,794
1,570,655
(12,861)
1,798,665
1,960,655
(161,990)
-
31,129
(31,129)
3,088
(3,088)
514
(514)
(14) Subsequent Event
In July 2010 the Commission issued tax allocation bonds in the amount of $11,230,000.
The bonds were issued to provide funds to finance the costs of certain redevelopment
projects within the Merged Project Area including infrastructure improvements, and the
acquisition of land. Principal and interest payments are due on June 1 and December 1
each year until the bonds mature in 2023.
55
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56
I
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1
i
1
1
1
1
1
1
i
1
1
i
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Required Supplementary Information
57
CITY OF ROSEMEAD,
Note to the Required Su
Fiscal Year Ended June
Information
2010
(1) Budgetary Information
Annual budgets are legally adopted on a
generally accepted in the United States of f
appropriations lapse at fiscal year end.
consistent with accounting principles
for all governmental funds. All annual
On or before the last day in March of each yeah, all business units and component units
of the government submit requests for appropriations to the City Manager so that a
budget may be prepared. Before the first Thursday of June, the proposed budget is
presented to the City Council for review. The Council holds public hearings and a final
budget must be prepared and adopted no later than June 30.
The appropriated budget is prepared by fund, Iand department. The City's Department
Heads, with approval of the Finance Director and City Manager, may make transfers of
appropriations within a department and between departments within a fund. Transfers of
appropriations between funds must be approved by the City Council. The legal level of
budgetary control (i.e., the level at which I expenditures may not legally exceed
appropriations) is the fund level. The council made several supplemental budgetary
appropriations throughout the year. The supplemental budgetary appropriations made in
the various governmental funds are detailed in the required supplementary information.
Encumbrance accounting is employed in g(
purchase orders, contracts) outstanding at ye
balances and do not constitute expenditures
be reappropriated and honored during the sut
;rnmental funds. Encumbrances (e.g.,
end are reported as reservations of fund
liabilities because the commitments will
�quent year.
RN
1
CITY OF ROSEMEAD
General Fund
'
Schedule of Revenues,
Expenditures and Changes in
Fund Balances - Budget and Actual
Fiscal Year ended June 30, 2010
Budgeted Amounts
Variance -
Positive
Original
Final
Actual
(Negative)
Revenues:
'
Taxes:
Property taxes
$ 7,679,000
7,679,000
7,401,447
(277,553)
Business license tax
50,000
50,000
51,768
1,768
'
Sales and use tax
2,695,000
2,695,000
3,011,781
316,781
Transient occupancy tax
1,490,000
1,490,000
1,129,146
(360,854)
Franchise tax
640,000
640,000
562,317
(77,683)
'
Real estate transfer tax
106,000
106,000
108,489
2,489
Total taxes
12,660,000
12,660,000
12,264,948
(395,052)
Intergovernmental
860,763
860,763
894,325
33,562
Licenses and permits
1,241,000
1,306,000
1,079,429
(226,571)
Charges for services
856,900
765,700
708,434
(57,266)
Fines and penalties
566,000
546,000
491,574
(54,426)
Investment income
388,000
388,000
177,794
(210,206)
Other
566,310
161,410
235,864
74,454
'
Total revenues
17,138,973
16,687,873
15,852,368
(835,505)
Expenditures:
Current:
'
General government
3,634,583
3,634,583
3,612,875
21,708
Public safety
7,057,772
7,057,772
7,318,037
(260,265)
Public works
2,911,861
2,911,861
2,951,999
(40,138)
Community services
173,600
173,600
218,138
(44,538)
Community development
1,090,715
1,090,715
966,631
124,084
Parks and recreation
2,973,104
2,973,104
2,733,885
239,219
'
Capital outlay
217,211
217,211
290,885
(73,674)
'
Total expenditures
18,058,846
18,058,846
18,092,450
(33,604)
Excess (deficiency) of revenues
over(under)expenditures
(919,873)
(1,370,973)
(2,240,082)
(869,109)
'
Other financing sources (uses):
Transfers in
351,600
70,996
(280,604)
Transfers out
_
(221,478)
(221,478)
'
Proceeds of capital lease
102,501
102,501
Total other financing
'
sources (uses)
351,600
(47,981)
(399,581)
Change in fund balances
(919,873)
(1,019,373)
(2,288,063)
(1,268,690)
'
Fund balances at beginning
of year
19,242,019
19,242,019
19,242,019
'
Fund balances at end of year
$ 18,322,146
18,222,646
16,953,956
(1,268,690)
59
CITY OF ROSEMEAD
Low - Moderate Income Housing Set -Aside
Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual
Fiscal Year ended June 30, 2010
Revenues:
Investment income
Total revenues
Expenditures:
Current:
Community development
Total expenditures
Excess (deficiency) of revenues
over (under) expenditures
Other financing sources (uses):
Transfers in
Transfers out
Total other financing
sources (uses)
Change in fund balances
Fund balance at beginning of year
Fund balance at end of year
Variance -
Final Positive
Budget Actual (Negative)
10,308 10,308
10,308 10,308
339 189,359 164,980
339 189,359 164,980
(179,051) 175,288
- 925,481 925,481
))� (250,000) -
25( 0,000)
675,481 925,481
(604,339)
496,430 1,100,769
, ,966,004
5,966,004 -
1,361,665
6,462,434 1,100,769
.�
L]
[1
ri
1
1
Other Supplementary Information
61
(This page intentionally left blank)
n
62
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1
NONMAJOR GOVERNMENTAL FUNDS
Traffic Safety Fund — This fund is used to account for the receipt of vehicle code fines which are
expended for construction, maintenance of traffic control devices, streets, crossing guard salaries, and
equipment and supplies for traffic enforcement and accident prevention.
Community Development Block Grant Fund — Accounts for Community Development Block Grants
received from the U.S. Department of Housing and Urban Development.
HOME Program Fund — This fund is used to account for HOME Investment Partnerships Program monies
received to create and retain affordable housing.
Proposition A Fund — This fund is used to finance public transportation projects. Effective July 1, 1982,
this fund accounts for the City's share of additional sales tax collected in the County of Los Angeles as a
result of Proposition A.
Proposition C — This fund is to be used by the cities for public transit to increase safety and improve road
conditions by repairing and maintaining streets heavily used by public transit.
Federal Highway Grant Accounts for Federal Highway Grants received from the California Department
of Transportation.
State Gas Tax Fund — This fund is used to account for monies that are collected by the State under the
title of Motor Vehicle Fuel License Tax and represent an additional + or - $.10 per gallon of gas sold.
Air Quality Management District Fund — This fund accounts for the receipt of monies from the Air Quality
Maintenance District. These funds shall be used to implement programs to reduce air pollution from
mobile sources pursuant to the California Clean Air Act.
Local Transportation Fund — This fund is used to account for monies made available by the State for
' mass transit, bike paths, and pedestrian walkways. City policy has been to use this money for
construction of sidewalks, pedestrian access to schools, parks or commercial areas.
' Street Liqhtinq Fund — This fund is used to account for monies collected by ad valorem property tax
based on $.2495 per $1000 of assessed property value to provide for energy cost and maintenance of the
Rosemead Lighting District, whose boundaries, with the exception of the Southern California Edison
company property, coincide with the city's boundaries. Proposition 13 has limited the ad valorem tax that
' can be collected.
Narcotics Seizure Fund — This fund is used to account for funds received from the County of Los Angeles
for monies forfeited, and the proceeds from the sale of assets seized from illegal narcotic activities within
the City of Rosemead. The forfeited funds must be used by the law enforcement and prosecutorial
agencies exclusively to support law enforcement and prosecutorial efforts.
' Measure R - A county -wide one half percent sales tax to fund transportation projects. Receipts can be
used to synchronize traffic signals, repair potholes, keep senior, student and disabled bus fares low and
provide community traffic relief. The tax receipts will be used primarily to improve public transit and street
' maintenance projects.
Rosemead Housing Development Corporation — This fund is used to account for the construction,
' financing and operations of low and moderate income housing. The Corporation is a blended component
until of the City of Rosemead.
City Capital Projects Fund - To account for the acquisition and construction of major capital facilities
1
63
1
CITY OF ROSEMEA
Non -Major Governmental
Combining Balance St
June 30, 2010
64
Federal
Traffic
CDBG
HOME
Proposition
Proposition
Highway
Safety
Grant
Grant
A
C
Grant
Assets
Cash and investments
$ -
-
-
1,169,094
1,858,574
Receivables:
Accounts
-
463,881
52,764
-
-
Accrued interest
-
-
-
-
-
-
Notes
-
-
-
-
-
-
Due from other funds
Total assets
$
463,881
52,764
1,169,094
1,858,574
Liabilities and Fund Balances
Liabilities:
Accounts payable and accrued liabilities
$ -
233,887
55,125
26,658
63,725
Accrued salaries and benefits
-
31,182
1,909
10,845
3,887
Retentions payable
-
-
-
-
-
-
Due to other funds
-
25,469
459,708
72,093
Deferred revenue
-
-
64
-
Totalliabilities
-
290,538
516,806
37,503
67,612
72,093
Fund balances:
Unreserved, reported in:
Special revenue funds
-
173,343
464,042
1,131,591
1,790,962
7( 2,093)
Total fund balances (deficit)
-
173,343
464,042
1,131,591
1,790,962
7( 2,093)
Total liabilities and
fund balances
$ -
463,881
52,764
1,169,094
1,8 58,574
-
64
1
1
Capital Projects
'
Special Revenue Funds
Fund
Rosemead
Air Quality
Housing
City
t
State Gas
Management
Local Street
Narcotics
Measure
Development
Capital
Tax
District
Transportation Lighting
Seizure
R
Corporation
Projects
Total
'
1,592,558
71,676
- 2,527,993
294
365,999
101,396
-
7,687,584
152,571
17,513
- 47,546
-
-
13,777
589,913
1,337,965
'
390
_
58,551 551
_
58,551
-
395,229
395,229
t 1,745,129
89,189
- 2,634,480
294
365,999
115,173
985,142
9,479,719
1
168,683
-
57,580
-
-
36,757
632,818
1,275,233
5,400
-
514
-
22,092
75,829
1,245
96,421
97,666
'
-
-
21,762
579,032
- 58,941
-
-
555,533
614,538
'
175,328
- 116,521
-
514
36,757
1,328,626
2,642,298
'
1,569,801
89,189
- 2,517,959
294
365,485
78,416
(343,484)
6,837,421
1,569,801
89,189
2,517,959
294
365,485
78,416
(343,484)
6,837,421
'
1,745,129
89,189
2,634,480
294
365,999
115,173
985,142
9,479,719
1
1
1
65
CITY OF ROSEMEAD
Non -Major Governmental Funds
Combining Statement of Revenues. Expenditures aid Changes in Fund Balances
Fiscal Year ended June 30, 2010
Revenues:
Intergovernmental
Special assessments
Investment income
I
Total revenues
Expenditures:
Current:
General government
Public safety
Public works
Community services
Community development
Total expenditures
Excess (deficiency) of revenues
over (under) expenditures
Other financing sources (uses):
Transfers in
Transfers out
Total other financing
sources (uses)
Change in fund balances
Fund balance (deficit) at beginning of year
Fund balance (deficit) at end of year
)ecial Revenue Fun
1,204,330
366,325
1,570,655
163 174,290
(13,090
)
13,090
(12,927) 174,290
12,927 (947)
$ - 173,343
590,184 686,804
590,184 686,804
164,212 9,567
- - (328,722) -
(328,722)
(124,999) 164,212 (319,155) -
(339,043 ) 967,379 2,110,117 (72,093)
(464,042 ) 1,131,591 1,790,962 (72,093)
m
Federal
Traffic
CDBG
HOME
Proposition
Proposition Highway
Safe
Grant
Grant
A
C Grant
$
1,744,197
650,653
740,797
668,931
163
748
-
13,599
27,440
163
1,744,945
I 650,653
754,396
696,371 -
1,204,330
366,325
1,570,655
163 174,290
(13,090
)
13,090
(12,927) 174,290
12,927 (947)
$ - 173,343
590,184 686,804
590,184 686,804
164,212 9,567
- - (328,722) -
(328,722)
(124,999) 164,212 (319,155) -
(339,043 ) 967,379 2,110,117 (72,093)
(464,042 ) 1,131,591 1,790,962 (72,093)
m
1
1
1
1
1
t
1
1
1
1
1
1
(490,301 ) 34,676 - 143,989
- 4,892 252 -
233,433 - - -
263 365,485 (311,767) (1,309,327) 1,343,749
250,000 965,843 1,220,987
- - (575,245)
233,433
4,892 252
- 250,000
965,843
645,742
(723,734)
Capital Projects
263 365,485 (61,767)
(343,484)
(698,007)
Special Revenue Funds
49,621 (252) 2,373,970
31 - 140,183
Fund
7,535,428
1,569,801
89,189 2,517,959
294 365,485 78,416
343,484
6,837,421
Rosemead
Air Quality
Housing
City
State Gas
Management
Local Street
Narcotics
Measure
Development
Capital
Tax
District
Transportation Lighting
Seizure
R
Corporation
Projects
Total
1,454,190
65,212
- -
3,342
364,636
420,006
850,503
6,962,467
-
-
- 680,288
-
-
-
-
680,288
16,164
593
30,301
9
1,363
66
-
90,446
1,470,354
65,805
- 710,589
3,351
365,999
420,072
850,503
7,733,201
_
_
_ _
_
-
731,839
-
731,839
-
-
- 566,600
3,088
-
-
-
569,688
1,960,655
22,130
- -
-
514
-
2,159,830
6,624,447
_
_ _
_
-
-
-
366,325
-
8,999
- -
-
-
-
-
784,651
1,960,655
31,129
566,600
3,088
514
731,839
2,159,830
9,076,950
(490,301 ) 34,676 - 143,989
- 4,892 252 -
233,433 - - -
263 365,485 (311,767) (1,309,327) 1,343,749
250,000 965,843 1,220,987
- - (575,245)
233,433
4,892 252
- 250,000
965,843
645,742
(723,734)
39,568 252 143,989
263 365,485 (61,767)
(343,484)
(698,007)
2,293,535
49,621 (252) 2,373,970
31 - 140,183
-
7,535,428
1,569,801
89,189 2,517,959
294 365,485 78,416
343,484
6,837,421
67
CITY OF ROSEMEAD
Traffic Safety
Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual
Fiscal Year ended June 30, 2010
Revenues:
Investment income
Total revenues
Excess (deficiency) of
revenues over
(under) expenditures
Other financing sources (uses):
Transfers out
Total other financing
sources (uses)
Change in fund balances
Fund balance at beginning of year
Fund balance at end of year
Variance -
Final Positive
Budget Actual (Negative)
163 163
163 163
A
163 163
(13,090) (13,090)
(13,090) (13,090)
- (12,927) (12,927)
927 12,927
927 (12,927)
1
1
1
1
1
1
CITY OF ROSEMEAD
Community Development Block Grant
Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual
Fiscal Year ended June 30, 2010
Revenues:
Intergovernmental
Investment income
Total revenues
Expenditures:
Current:
Public works
Community services
Total expenditures
Excess (deficiency) of
revenues over (under)
expenditures
Fund balance (deficit) at beginning of year
Fund balance at end of year
.•
Variance -
Final Positive
Budget Actual (Negative)
$ 1,942,757 1,744,197 (198,560)
- 748 748
1,942,757 1,744,945 (197,812)
1,527,109 1,204,330 322,779
30,685 366,325 (335,640
1,557,794 1,570,655 (12,861)
384,963 174,290 (210,673)
(947) (947) -
$ 384,016 173,343 (210,673)
CITY OF ROSEMEAD
HOME Program
Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual
Fiscal Year ended June 30, 2010
Revenues:
Intergovernmental
Total revenues
Expenditures:
Current:
Community development
Total expenditures
Net change in fund balance
Fund balance (deficit) at beginning of year
Fund balance (deficit) at end of year
70
Variance -
Final Positive
Budget Actual (Negative)
1,780,921 650,653 (1,130,268)
1,780,921 650,653 (1,130,268)
3,071,784
775,652
2,296,132
3,071,784
775,652
2,296,132
(1,290,863)
(124,999)
1,165,864
(339,043)
(339,043)
-
$I (1,629,906)
(464,042)
1,165,864
1
1
1
' CITY OF ROSEMEAD
Proposition A
' Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual
Fiscal Year ended June 30, 2010
'
Revenues:
(193,324)
Intergovernmental
'
Investment income
944,121
Total revenues
'
Expenditures:
Current:
'
Public works
Total expenditures
'
Excess (deficiency) of
revenues over
(under) expenditures
Other financing sources (uses):
Transfers out
Total other financing
sources (uses)
Change in fund balances
Fund balance at beginning of year
Fund balance at end of year
I
U
I
I
Variance -
Final Positive
Budget Actual (Negative)
$ 934,121
740,797
(193,324)
10,000
13,599
3,599
944,121
754,396
(189,725)
821,200 590,184 231,016
821,200 590,184 231,016
(821,200) 164,212 41,291
(50,000) 50,000
(50,000) 50,000
122,921 164,212 41,291
967,379 967,379 -
$ 1,090,300 1,131,591 41,291
1 71
CITY OF ROSEMEj
Proposition C
Schedule of Revenues, Expenditures and Changes it
Fiscal Year ended June
Revenues:
Intergovernmental
Investment income
i
Total revenues
Expenditures:
Current:
Public works
Total expenditures
Excess (deficiency) of
revenues over (under)
expenditures
Other financing sources (uses):
Transfers out
Total other financing
sources (uses)
Net change in fund balance
Fund balance at beginning of year
Fund balance at end of year
ind Balances - Budget and Actual
2010
Variance -
Final Positive
udget Actual (Negative)
762,326 668,931 (93,395)
50,000 27,440 (22,560)
812,326 696,371 (115,955)
983,770 686,804 296,966
I k 983,770 686,804 296,966
(171,444) 9,567 181,011
(328,722) (328,722)
(328,722) (328,722)
(171,444) (319,155) (147,711)
2,110,117 2,110,117
$ 1,938,673 1,790,962 (147,711)
72
1
1
1
1
CITY OF ROSEMEAD
Federal Highway Grant
Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual
Fiscal Year ended June 30, 2010
Revenues:
Intergovernmental
Total revenues
Net change in fund balance
Fund balance (deficit) at beginning of year
Fund balance (deficit) at end of year
73
Variance -
Final Positive
Budget Actual (Negative)
(72,093) (72,093)
$ (72,093) (72,093)
CITY OF ROSEMEAD
State Gas Tax
Schedule of Revenues, Expenditures and Changes in F und Balances - Budget and Actual
Fiscal Year ended June 30, 2010
Revenues:
Intergovernmental
Investment income
Total revenues
Expenditures:
Current:
Public works
Total expenditures
Excess (deficiency) of
revenues over
(under) expenditures
Other financing sources (uses):
Transfers out
Total other financing
sources (uses)
! Change in fund balance
Fund balance at beginning of year
Fund balance at end of year
Variance -
Final Positive
Budget Actual (Negative)
$ 951,500 1,454,190 502,690
- 16,164 16,164
951,500 1,470,354 518,854
1,802,017 1,960,655 (158,638)
I
1,960,655 (158,638)
(490,301) 360,216
(233,433) (233,433)
(233,433) (233,433)
(850,517)
(723,734) 126,783
1 293,535
2,293,535 -
,443, 018
1,569,801 126,783
74
I
' CITY OF ROSEMEAD
Air Quality Management District
' Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual
Fiscal Year ended June 30, 2010
1
G I
C
I
I
1
1
Revenues:
Intergovernmental
Investment income
Total revenues
Expenditures:
Current:
Public works
Community development
Total expenditures
Excess (deficiency) of
revenues over
(under) expenditures
Other financing sources (uses):
Transfers in
Total other financing
sources (uses)
Change in fund balances
Fund balance at beginning of year
Fund balance at end of year
Variance -
Final Positive
Budget Actual (Negative)
$ 68,500 65,212 (3,288)
1,000 593 (407)
69,500 65,805 (3,695)
22,130 (22,130)
8,999 (8,999)
31,129 (31,129)
69,500 34,676 (34,824)
4,892 4,892
- 4,892 4,892
69,500 39,568 (29,932)
49,621 49,621
$ 119,121 89,189 (29,932)
75
CITY OF ROSEMEAD
Local Transportation
Schedule of Revenues, Expenditures and Changes lin Fund Balances - Budget and Actual
Fiscal Year ended June 30, 2010
Revenues:
Intergovernmental
Total revenues
Excess (deficiency) of
revenues over
(under) expenditures
Other financing sources (uses):
Transfers in
Total other financing
sources (uses)
Change in fund balances
Fund balance (deficit) at beginning of year
Fund balance (deficit) at end of year
Variance -
Final Positive
Budget Actual (Negative)
252 252
252 252
- 252 252
(252) (252) -
$ (252) 252
76
' CITY OF ROSEMEAD
Street Lighting
' Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual
Fiscal Year ended June 30, 2010
1
1
1
11
77
Variance-
'
Final
Positive
Budget
Actual
(Negative)
'
Revenues:
Special assessments
$ 687,500
680,288
(7,212)
'
Investment income
-
30,301
30,301
Total revenues
687,500
710,589
23,089
'
Expenditures:
Current:
Public safety
750,984
566,600
184,384
Total expenditures
750,984
566,600
184,384
Change in fund balances
(63,484)
143,989
207,473
Fund balance at beginning of year
2,373,970
2,373,970
'
Fund balance at end of year
$ 2,310,486
2,517,959
207,473
1
1
1
11
77
CITY OF ROSEMEAD
Narcotics Forfeiture and Seizure
Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual
Fiscal Year ended June 30, 2010
Variance-
Final Positive
Budget Actual (Negative)
Revenues:
Intergovernmental $ 3,342 (3,342)
Investment income 50 9 (41)
Total revenues I 50 3,351 (3,383)
Expenditures:
Current:
Public safety 3,088 (3,088)
Total expenditures I 3,088 (3,088)
Change in fund balances I 50 263 (6,471)
Fund balance at beginning of year 31 31
I
Fund balance at end of year $ 81 294
iT
1
t
1
1
1
CITY OF ROSEMEAD
Measure R
Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual
Fiscal Year ended June 30, 2010
Revenues:
Intergovernmental
Investment income
Total revenues
Expenditures:
Current:
Public works
Total expenditures
Change in fund balance
Fund balance at beginning of year
Fund balance at end of year
79
Variance -
Final Positive
Budget Actual (Negative)
$ 295,727 364,636 68,909
- 1,363 1,363
295,727 365,999 70,272
514 (514)
- 514 (514)
295,727 365,485 69,758
$ 295,727 365,485 69,758
CITY OF ROSEMEAD
Rosemead
Housing Development
Corporation
Schedule of Revenues, Expenditures
and Changes inl
Fund Balances - Budget and Actual
Fiscal Year ended June
30, 2010
Variance -
Final
Positive
Budget
Actual
(Negative)
Revenues:
I$
Intergovernmental
422,300
420,006
(2,294)
Investment income
I
I -
66
66
Total revenues
422,300
420,072
(2,228)
Expenditures:
Current:
General government
761,200
731,839
29,361
Total expenditures
761,200
731,839
29,361
Excess (deficiency) of
revenues over
(under) expenditures
(338,900)
(311,767)
27,133
Other financing sources (uses):
Transfers in
-
250,000
250,000
Total other financing
sources (uses)
250,000
250,000
Change in fund balances
(338,900)
(61,767)
250,000
Fund balance at beginning of year
140,183
140,183
-
Fund balance (deficit) at end of year
$ (198,717)
78,416
250,000
80
1
1
1
1
1
1
CITY OF ROSEMEAD
City Capital Projects
Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual
Fiscal Year ended June 30, 2010
Revenues:
Intergovernmental
Total revenues
Expenditures:
Current:
Public Works
Total expenditures
Excess (deficiency) of
revenues over
(under) expenditures
Other financing sources (uses):
Transfers in
Total other financing
sources (uses)
Change in fund balances
Fund balance at beginning of year
Fund balance (deficit) at end of year
81
Variance -
Final Positive
Budget Actual (Negative)
$ 850,503
850,503
6,977,805
2,159,830
4,817,975
(6,977,805)
(343,484)
6,634,321
$ (6,977,805
343,484
6,977,805
2,159,830
4,817,975
(6,977,805) (1,309,327) 5,668,478
965,843 965,843
965,843
965,843
(6,977,805)
(343,484)
6,634,321
$ (6,977,805
343,484
6,634,321
0
m
CITY OF ROSEMEAD
Redevelopment Agency Debt
Service Fund
Schedule of Revenues, Expenditures
and Changes in
Fund Balances - Budget and Actual
Fiscal Year ended June 30,
2010
Variance-
Final
Positive
Budget
Actual
(Negative)
Revenues:
Taxes
$
7,103,000
6,243,948
(859,052)
Investment income
37,000
67,878
30,878
Total revenues
1
7,140,000
6,311,826
(828,174)
Expenditures:
Current:
General government
498,000
106,884
391,116
Public safety
1,021,000
975,509
45,491
Debt service:
Principal
945,000
945,000
-
Interest and fiscal charges
1,501,667
1,501,667
-
Total expenditures
1
3,965,667
3,529,060
436,607
Excess (deficiency) of
i revenues over (under)
expenditures
3,174,333
2,782,766
(391,567)
Other financing sources (uses):
Transfers out
-
(2,782,766)
(2,782,766)
Total other financing
sources (uses)
-
(2,782,766)
(2,782,766)
Net change in fund balance
3,174,333
-
(3,174,333)
Fund balance at beginning of year
2,803,910
2,803,910
Fund balance at end of year
$ 5,978,243
2,803,910
(3,174,333)
0
m
1
CITY OF ROSEMEAD
'
Redevelopment Agency Capital Projects Fund
Schedule of Revenues, Expenditures and Changes in Fund Balances
- Budget and Actual
'
Fiscal Year
June 30, 2010
ended
1
'
Final
Variance -
Positive
Budget
Actual
(Negative)
'
Revenues:
Investment income
$
42,884
42,884
'
Other
18,746
18,746
Total revenues
-
61,630
61,630
Expenditures:
Current:
t
General government
1,361,576
196,760
1,452,328
1,687,774
(90,752)
(1,491,014)
Public works
Total expenditures
1,558,336
3,140,102
(1,581,766)
'
Excess (deficiency) of
revenues over (under)
t expenditures
(1,558,336)
(3,078,472)
(1,520,136)
Other financing sources (uses):
'
Transfers in
1,916,090
1,916,090
Transfers out
=
(304,065)
(304,065)
'
Total other financing sources (uses)
1,612,025
1,612,025
Net change in fund balance
(1,558,336)
(1,466,447)
91,889
'
Fund balance at beginning of year
4,468,293
4,468,293
-
'
Fund balance at end of year
$ 2,909,957
3,001,846
91,889
11
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RE
a
0
I
' INTERNAL SERVICE FUNDS
1
The internal service funds are used to account for goods and services provided by one City
' department to other City departments on a cost reimbursements basis.
The City of Rosemead has the following Internal Service Funds:
' Vehicle Replacement — To account for the accumulation and allocation of costs associated with
the repair and maintenance of City owned vehicles.
' Technology Replacement — To account for the accumulation and allocation of costs associated
with the repair and maintenance of the City's technological equipment.
1
1
1
1
W
1
CITY OF ROSEMEAD
Combining Statement of Net Assets
Internal Service Fund s
June 30, 2010
i
Assets
Current assets:
Cash and investments
Total assets
i
Liabilities
Current liabilities:
Accounts payable
Total liabilities
Net assets
Unrestricted
Total net assets
766
43,766
Technology
Replacement Total
26,469 70,235
26,469 70,235
2,299
2,299
2,299
2,299
24,170
67,936
24,170
67,936
..
1
1
1
1
1
1
1
1
i
1
1
1
1
1
1
1
1
1
1
CITY OF ROSEMEAD
Combining Statement of Revenues, Expenses and Changes in Fund Net Assets
Internal Service Funds
Year ended June 30, 2010
87
Total
72,058
72,058
(72,058)
139,994
67,936
Vehicle
Technology
Replacement
Replacement
Operating expenses:
Contract services
$ 48,038
24,020
Total operating expenses
48,038
24,020
Changes in net assets
(48,038)
(24,020)
Net assets at beginning of year
91,804
48,190
Net assets at end of year
$ 43,766
24,170
87
Total
72,058
72,058
(72,058)
139,994
67,936
CITY OF ROSEMEAD
Combining Statement of Cash
Flows- Internal Service
Funds
Year ended June 30, 2010
Vehicle
Technology
i
Replacement
Replacement
Total
Cash flows from operating activities:
Cash received from user departments
$ 43,766
28,768
72,534
Cash payments to suppliers for
goods and services
(2,299)
(2,299)
Net cash provided by (used for)
operating activities
$ 43,766
26,469
70,235
Net cash provided by (used for)
noncapital financing activities
-
Net cash proved by (used for) capital
and related financing activities
Net cash provided by (used for)
investing activities
-
-
Net increase (decrease) in cash
and cash equivalents
43,766
26,469
70,235
Cash and cash equivalents at
beginning of year
-
-
Cash and cash equivalents at end of year
$ -3,766
26,469
70,235
Reconciliation of operating income
to net cash provided by (used for)
operating activities:
Operating income (loss)
$ (48,038)
(24,020)
(72,058)
Adjustments to reconcile operating
income (loss) to net cash provided
by (used for) operating activities:
Increase (decrease) in accounts payable
-
2,299
2,299
(Increase) decrease in due from other funds
91,804
48,190
139,994
Total adjustments
91,804
50,489
142,293
Net cash provided by
1
operating activities
$ 3,766
26,469
70,235
W
1
1
1
1
1
1
Assets
Cash and investments
Total assets
Liabilities
Deposits payable
Total liabilities
CITY OF ROSEMEAD
Agency Fund
Statement of Changes in Assets and Liabilities
Fiscal Year ended June 30, 2010
Balance at Balance at
June 30, 2009 Additions Deletions June 30, 2010
$ 360,557 448,920 (330,397) 479,080
$ 360,557 448,920 (330,397) 479,080
$ 360,557 448,920 (330,397) 479,080
$ 360,557 448,920 (330,397) 479,080
:•
STATISTICAL S
This part of the City of Rosemead's Comprehensive Anhual Financial Report presents detailed
information as a context for understanding what the information in the financial statements, note
disclosures, and required supplementary information Isays about the government's overall
financial heath. 44
Contents
Financial Trends
These schedules contain trend information to
the government's financial performance and we
Revenue Capacity
These schedules contain trend information
government's most significant local revenue sc
Debt Capacity
These schedules present information to help
of the government's current levels of outsN
ability to issue additional debt in the future.
Page
92
the reader understand how
g have changed over time.
96
help the reader asses the
the property tax.
100
reader assess the affordability
g debt and the government's
Demographic and Economic Information I 105
These schedules offer demographic and economic indicators to help the reader
understand the environment within which the government's financial activities
take place.
Operating Information 107
These schedules contain service and infrastructure data to help the reader
understand how the information in the government's financial report relates to the
services the government provides and the activities it performs.
Sources: Unless otherwise noted, the information in
Comprehensive Annual Financial Reports for the rel
a schedules is derived from the
year.
eH
I
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(This page intentionally left blank)
11
1
91
CITY OF ROSEMEAD
Net Assets by Component
Last Seven Fiscal Years
(accrual basis of accounting)
The City of Rosemead implemented GASB 34 for the fiscal year ended June 30.
1004. Information prior to the implementation of GASH 34 is not available.
Year
2007
2004
2005
2006
Governmental activities:
Invested in capital assets,
12,981,537
11,828,993
12,712,242
net of related debt
$ 10,439,445
12,130,249
13,345,433
Restricted
6,526.788
6,035,250
6.901,454
Unrestricted
26,498,620
31,114,414
302 99,115 —
Total governmental activities net assets
$ 43,464,853
49,279.913
50,546,002
The City of Rosemead implemented GASB 34 for the fiscal year ended June 30.
1004. Information prior to the implementation of GASH 34 is not available.
Year
2007
2008
2009
2010
0,541,606
12,981,537
11,828,993
12,712,242
8.181 231
11,443,583
13,361,249
13,199,438
5,293,732
27,705,715
24,882,730
21,910,910
4016.569
52,130,835
50,072,972
47,822.590
92
I
1
[1
i
1
1
1
1
[l
CITY OF ROSEMEAD
Changes in Net Assets
Last Seven Fiscal Years
(accrual basis of accounting)
2004 2005 2006 2007 2008 2009 2010
Expenses:
Governmental activities'.
General government
S 4,803476
S 4,800,168
5,629,316
4,980519
7,259,587
12,176,877
5,991,796
Public safety
5,797,080
6,058,824
6,065,066
6,618 779
8,043,771
9,081,719
8,879,854
Public works
2,058,252
3,252,252
3,4U3,699
6,120,563
13,550,042
6,465,355
11,469,614
Public health
65,583
60,828
51,286
-
-
-
Community services
3,121996
2,862,328
3,223,843
602,114
669,827
773,374
589,650
Community development
-
-
-
2,467,842
3,645207
1,290,108
2,141218
Parks and recreation
3,201,236
3,456,308
3,959,590
4,178,000
4,078,631
2,030,698
2,733,885
Interest expense
1,854,185
1,830,836
1,832219
2,698,372
1,790,348
1,523 391
1 491,717
Total governmental activities expenses
20,901808
22,321,544
24,165,019
27,666,189
39,037,413
33,341,522
33297,734
Program revenues:
Governmental activities:
Charges for services:
General government
7,026282
6,299,415
3288 225
316,849
642,716
547,577
1573,695
Public safety
726,345
984,965
900,359
1598,159
1547,182
1512,475
1293,677
Public works
3,091,146
3760,495
4,144,733
7600,778
11729,725
7,581,801
8052,011
Public health
-
-
-
-
-
-
-
Community services
1,691,586
1 211 615
814,754
1,403,059
166,118
858,809
186,283
Community development
-
-
-
3206,303
1,484,065
621,375
597,402
Parks and recreation
287,137
266,398
337,815
36,800
36,000
20,800
Total governmental activities
program revenues
12,822496
12522,
9,485,886
14,125,148
15,606,606
11,158037
11,723868
Net revenues (expenses):
Governmental activities
Total net revenues (expenses)
(8,079,312)
(9,798,656
(14,679,133)
(13,541,041)
(23,430,807)
(22,183,485)
(21,573,866)
General revenues and other changes in net assets:
Governmental activities:
Taxes'.
Property taxes
3,941,383
4077,332
3915,980
9,121,682
13,181837
12288,177
12,328,634
Sales and use taxes
2865,887
3.518 657
3.525 557
2,501.106
3,747,416
4,589,998
4,408,367
Transient occupancy taxes
1081,174
1,102756
1,207,298
1311,697
1,411,421
1272,092
1,129,146
Othertaxes
149,737
765,215
1 076,806
713,821
949,007
761,410
562,317
Intergovernmental /in- lieu VLF
-
3,165,148
2966,002
-
-
-
-
Investmentincome
187,278
1,260,095
1 930,059
2,028,128
1,678,791
884,847
389,310
Motor vehicle in -lieu, unrestricted
-
1,716,656
1,290,667
856,701
254,527
195,273
169,042
Other general revenues
-
7,857
32,853
478,473
143,748
133,825
336,668
Total governmental activities
8,225459
15,613.716
15945,222
17,011,608
21,366,747
20,125,622
19,323,484
Changes in net assets
Governmental activities
Total primary government S 146,147 S 5.815060 $ 1,266,089 S 3470,567 S (2064060) S (2057,863 S (2250,382
The Cin of Rosemead implemented GASH 3J for the fiscal year ended June 30. 2009.
Information prior to the implementation of GASH 34 is not available.
93
CITY OF ROSEMEAD
Fund Balances of Governmental Funds
Last Seven Fiscal Years
(modified accrual basis of accounting)
The Citv of Rosemead has elected to show only six rears of dma for this schedule
2007
2008
2009
1
2004
2005
2006 _
General fund:
2,460,545
18,633,154
16,135,102
Reserved
$ 353,616
1,719,044
256,765
Unreserved
20,053,506
19,896,581
22,228 341 _
Total general fund
$20,407,122
21,615,625
22,485,106 _
8,763,359
552
All other governmental funds,
2,803,910
2,803,910
7,397,454
Reserved
$ 3,195,415
-
7,693,216
Unreserved, reported in
Special revenue funds
5.653, 208
7,336,247
6,821.660
Debt service funds
32,835 -
2.354,835
-
Capital projects funds
6,264,457
8433,842
6.435,798 _
Total all other governmental funds
$ 15,145 915
18,124 924
20.950.674 _
The Citv of Rosemead has elected to show only six rears of dma for this schedule
2007
2008
2009
2010
150,000
3,074,496
3,106,917
3,327,182
2,460,545
18,633,154
16,135,102
13,626,774
2,610,545
21,707.650
19.242,019
16,953,956
4,947,087
9,000,561
9,000,561
8,944,112
6,142,833
6,140,289
9,023,487
8,763,359
552
692,475
2,803,910
2,803,910
7,397,454
2,490553
(54,323)
(1,405,770)
8,487,926 18.323.878 20,773,635 19,105,611
94
CITY OF ROSEMEAD
Changes in Fund Balances of Governmental Funds
Last Seven Fiscal Years
(modified accrual basis of accounting)
I
95
2004
2005
2006
2007
2008
2009
2010
Revenues:
Taxes
$ 9,041,026
$ 9,189,326
S 9,527,384
$13,648,306
$17,841,792
$17,153,625
$18,508,896
Intergovernmental
8,826,909
14,379,314
10,785,591
9419,698
15,716,610
10,992,235
7,856,792
Licenses and permits
1,508,009
1,595,115
1,528,864
1,683,204
1,503,659
1,178,362
1,079,429
Charges for services
581,848
550,478
660.890
414,375
57,430
638,244
708,434
'
Fines, forfeitures and penalties
589,890
857,135
753,224
437,117
641,566
565,643
491,574
Special assessments
-
-
-
789,089
687,568
736,213
680,288
Investment income
1,372,591
1,260,286
1,947,566
2,028,128
1,678,791
884,847
389,310
Other
37
30,316
29,332
478,473
141,930
381,429
254,610
'
Total revenues
21 920,310
27,861.970
25232,851
28,898.390
38,749.346
32.530,598
29,969.333
Expenditures
' Current:
General government
2,965,572
3,023,192
3,790,631
4,780,837
7,356,665
11,956,179
5,903,926
Public safety
5,797,080
6.087,918
6.536.043
6.737,912
8,043,771
9,114,009
8,863,234
Public works
3,144,358
5208,142
6,064,980
8,898,768
12,116,508
4,964,867
11,264.220
Community services
65,583
60,828
51,286
1,419,424
669,827
783,452
584,463
Community development
3,259,505
3,424,954
3216,935
2,690,420
3,408,691
1,047,529
1,940,641
Parks and recreation
3,201236
3383.358
3,881,469
4,249,462
4,078,631
2,030,698
2,733,885
Capital outlay
26.639
184,301
149,641
-
1,647,673
202,752
290,885
Debt service:
-
'
Principal
445.000
465,000
490,000
780,000
1,105,000
915,000
945,000
Interest and fiscal charges
1,859,747
1,836,765
1,559,114
2,512,725
1,567,849
1,531,986
1,501,667
Payment to bond escrow agent
550,323
1.323,238
'
Total expenditures
20.764,720
23,674,458
26.290,422
33. 392,786
39,994.615
32,546,472
34,027,921
Excess (deficiency) of
revenues over (under)
expenditures
1,155,590
4,187,512
(1,057,571)
(4,494,396)
(1,245,269)
15,874
(4,058,588)
Other financing sources (uses):
Transfers in
3.905,993
4,941,103
13,300,319
26,183,078
2,962,087
4,078,483
4,133,554
Transfers out
(3,905,993)
(4,941,103)
(13,300,319)
(26,183,078)
(2,962,087)
(4,078,483)
(4,133,554)
Proceeds of bonds
-
-
14,005,000
24230,000
'
Premium on debt issued
316,830
Payment to bond escrow agent
-
-
(9, 569.028)
(22.075,305)
-
-
-
Proceeds of capital lease
-
-
102,501
1
Total other financing
sources (uses)
4,752,802
2,154,695
102,501
Net change in fund balances
$ 1,155,590
4,187,512
3,695,231
2,339,701
1,245,269
(15,874)
(3,956,087
Debt service as a percentage of
'
noncapital expenditures
11.1%
9.8%
9.9%
16.6%
7.0%
7,6%
7.7%
The City of Rosemead has elected to show only six years of
data for this schedule.
I
95
Fiscal Year
Ended
June 30
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
Secured Unsecured
1,801,399,282
1,894,448,049
2,017,936.508
2,168,666,818
2,345,083,686
2,561,631,859
2,826,876,615
3,085,354,513
3,277,256,282
3,333,876,047
48,058,831
49,217,140
50,453,472
52,904,496
57.368,008
64,776,971
55,851,646
61,564,235
66,506,103
62,148,114
Beginning with the fiscal year ended June 30, 2002,
individual property categories.
NOTE:
In 1978 the voters of the State of California passed Propc
taxes to a total maximum rate of 1% based upon the asse
taxed. Each year, the assessed value of property may be i
(limited to a maximum increase of 2 %). With few except
at the time that it is sold to a new owner. At that point, the
at the purchase price of the property sold. The assess
represents the only data currently available with respect to i
property and is subject to the limitations described above.
Source: HDL Coren & Cone and Los Angeles County
SBE
664,802
1,632,754
2,601,128
19,367,174
20,426,612
18,555,208
19,173,832
18,883,761
18,883,761
3,307,527
Taxable
Assessed
Value
1,850,122,915
1,945,297,943
2,070,991,108
2,240,93 8,488
2,422,878,306
2,644,964,038
2,901,902,093
3,165,802,509
3,362,646,146
3,399,331,688
are netted directly against the
on 13 which limited property
d value of the property being
-eased by an "inflation factor"
s, property is only re- assessed
w assessed value is reassessed
valuation data shown above
actual market value of taxable
Office
Total Direct
Tax Rate
20.30%
21.07%
20.82%
21.36%
22.57%
21.89%
23.35%
24.57%
25.29%
22.27%
W .
1
CITY OF ROSEMEAD
'
Assessed Value and Estimated Actual Value of Taxable Property
Last Ten Fiscal Years
(in thousands of dollars)
'
Fiscal Year
Ended
June 30
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
Secured Unsecured
1,801,399,282
1,894,448,049
2,017,936.508
2,168,666,818
2,345,083,686
2,561,631,859
2,826,876,615
3,085,354,513
3,277,256,282
3,333,876,047
48,058,831
49,217,140
50,453,472
52,904,496
57.368,008
64,776,971
55,851,646
61,564,235
66,506,103
62,148,114
Beginning with the fiscal year ended June 30, 2002,
individual property categories.
NOTE:
In 1978 the voters of the State of California passed Propc
taxes to a total maximum rate of 1% based upon the asse
taxed. Each year, the assessed value of property may be i
(limited to a maximum increase of 2 %). With few except
at the time that it is sold to a new owner. At that point, the
at the purchase price of the property sold. The assess
represents the only data currently available with respect to i
property and is subject to the limitations described above.
Source: HDL Coren & Cone and Los Angeles County
SBE
664,802
1,632,754
2,601,128
19,367,174
20,426,612
18,555,208
19,173,832
18,883,761
18,883,761
3,307,527
Taxable
Assessed
Value
1,850,122,915
1,945,297,943
2,070,991,108
2,240,93 8,488
2,422,878,306
2,644,964,038
2,901,902,093
3,165,802,509
3,362,646,146
3,399,331,688
are netted directly against the
on 13 which limited property
d value of the property being
-eased by an "inflation factor"
s, property is only re- assessed
w assessed value is reassessed
valuation data shown above
actual market value of taxable
Office
Total Direct
Tax Rate
20.30%
21.07%
20.82%
21.36%
22.57%
21.89%
23.35%
24.57%
25.29%
22.27%
W .
I
1
1
1
1
CITY OF ROSEMEAD
Direct and Overlapping Property Tax Rates
a
(Rate per $100 of Taxable Value)
Last Ten Fiscal Years
' "4 Last lOTirccall.Years�I'�`".'x;;s
Agency
2000/01
2001/02
2002/03
2003/04
2004/05
2005/06
2006/07
2007/08
2008/09
2009/10
Basic Levy
1.00000
1.00000
1.00000
1.00000
1 00000
1.00000
1.00000
1.00000
1.00000 q
1.00000
County Detention Facilities 1987 Debts
0.00131
0.00113
0.00103
0.00099
0.00092
0.00080
0.00066
0.00000
0.00000 9
0.00000
El Monte School Districts
0,04196
0.05196
0.06592
0.05072
0.07246
0.08056
0.06402
0.08067
0.09044 9
0.11907
El Monte Union High School
0.00000
0.00000
0.00000
0.03573
0.03928
0.05425
0.05846
0.02820
0,05159 9
0.09654
Garvey School Districts
0.00000
003118
0.05286
0.02471
0.02319
0.05221
0.05075
0.05061
0068359
0.07836
Los Angeles Community College
0.00000
0.01600
001460
0.01986
0.01810
0.01430
0.02146
0.00878
0.02212 9
0.02311
L.A. Co. Flood Control Bonds
0.00155
0.00107
0.00088
0.00047
0,00024
0.00005
0.00005
0.00000
0.00000 9
0.00000
Metropolitan Water District
0.00880
0.00770
0.00670
0.00610
0.00580
0.00520
0.00470
000450
0.00430 9
000430
Montebello Unified School District
0,03423
0.04369
0.03983
0.04076
0.04172
0.07053
0.06731
0.06681
0.08065 9
009673
Pasadena Area Community College
0.00000
0,00000
0 00000
0.00681
0.00879
0.00410
0.02080
0.01972
0.01741 9
0.02300
Rio Hondo Community College
0.00000
0.00000
000000
0.00000
0.02170
0.01802
001469
0.01370
0.02320 9
0.03714
Rosemead School Districts
0.00000
0.08858
0.00540
0.04517
0.07095
007515
0.05420
0.08282
0.06875 9
0.11358
San Gabriel Unified School District
0.00000
0.00000
0.05803
0.05224
0.05729
005284
0.04930
0.05742
0.09294 9
0.70071
San Gabriel Valley Mwd Bonds
0.00225
0.00000
0.00000
0.00000
0.00000
0.00000
0.00000
0.00000
0.00000 9
0.00000
San Gabriel Vly Mwd State Water Bond
0.02176
0.02400
0.02400
0.02200
0.02000
0.02000
0.02000
0.02000
0.01800
0.01800
Total Direct & Overlapping Tax Rates
1.11186
1.26531
1.26925
1.30556
1.38044
1.44801
1.42640
1.43323
1.53775 9
1.70054
City's Share of 1% Levy Per Prop 13 3
0.09276
0.09388
0.09388
0.09388
0.09388
0.09388
0.09388
0.09388
0.09388 9
0.09388
' General Obligation Deb, Rate
Redevelopment Rate 4 1.01167 1.00990 1.00861 1.00755 1.00697 1.00604 1.00541 1.00450 1.00430 9 1 00430
Total Direct Rate s 0.17509 0.17800 0.18152 0.18513 0.19461 0.20733 0.20556 0.21850 0.22614 9 0.22370
' Notes:
'In 1978, California voters passed Proposition 13 which set the progeny tax rate of a 1.00% fixed amount. This 1.00% is shared by all taxing agencies for which the subject progeny resides
within. In addition to the 1.00% fixed amount, property owners are charged taxes as a percentage of assessed property values for the payment of any voter approved bonds.
'Overlapping rates are those of local and county governments that apply to property owners within the City Not all overlapping rates apply to all city property owners.
' ' Citys share of 1 % Levy is based on the Citys share of the general fund tax rate area with the largest net taxable value within the city. ERAF general fund tax shifts may not be included in
tax ratio figures.
' ' RDA rate is based on the largest RDA tax rate area (TRA) and includes only rate(s) from indebtedness adopted prior to 1989 per California State statute. RDA direct and overlapping
rates are applied only to the incremental property values.
' Total Direct Rate is the weighted average of all individual direct rates applied by the government preparing the statistical section information.
We arrive at this percentage by dividing the Citys revenue by total net taxable assessed value.
' Source L.A. County Assessor 2000101 - 2009/10 Tax Rate Table and HDL Coren & Cone
1
11
1
97
CITY OF ROSEMEAD
Principal Property Tax Payers
Current Year and Nine Years Ago
i
Taxpayer
Taxable
Assessed
Value R;
Rosemead Place, LLC $
i
45,110,229
Walmart Real Estate Business Trust
36,002,085
Rosemead Hwang, LLC
32,202,355
AFG Investment Fund 5 LLC
23,929,197
Metodo Investments, LLC
19,438,568
420 Boyd Street LLC
18,461,000
Macy's California Inc.
16,374,428
Potters Avenue
13,417,592
Panda Restaurant Group, Inc.
12,874,832
Sunshine Inn
10,469,716
Aespace America, Inc.
0.36%
General Electric Credit Auto Auctions
9
May Department Stores Company
5,457,185
California Federal Savings and Loan Assoc
0.29%
Chicago Title Insurance Company
Builder Square LLC
Tony & Helen Hua Trust
Procolor, Inc.
BHC Alhambra Hospital, Inc.
Source: Hdl Coren & Cone, Los Angeles County Assessor
Percent of
Total City
Taxable
Assessed
nk Value
1.33%
1.06%
0.95%
0.70%
0.57%
i 0.54%
0.48%
0.39%
0.38%
D 0.31%
2000/01
Percent of
Total City
Taxable Taxable
Assessed Assessed
Value Rank Value
6,919,448
7
0.37%
32,089,836
1
1.73%
14,964,078
2
0.81%
14,856,152
3
0.80%
9,299,434
4
0.50%
8,330,000
5
0.45%
7,252,770
6
0.39%
6,719,000
8
0.36%
6,632,685
9
0.36%
5,457,185
10
0.29%
110 Combined Tax Rolls.
98
1
1
1
t
1
1
1
1
1
1
1
CITY OF ROSEMEAD
Property Tax Levies and Collections
Last Ten Fiscal Years
* Information not available.
** Note: For these years the information was not available so an estimate was made to reduce the
total collections to date to 100 %.
Source: HDL Coren & Cone and Los Angeles County Auditor Controller's Office
..
Collected within the
Fiscal
Taxes Levied
Fiscal Year of Levy Collections in
Total Collections to Date
Year Ended
for the
Percent Subsequent
Percent
June 30
Fiscal Year
Amount
of Levy Years
Amount
of Levy
2001
1,059,067
1,059,033
100.00% -
1,059,033
100.00% **
2002
1,111,483
1,111,453
100.00% -
1,111,453
100.00% **
2003
1,181,683
1,161,629
98.30% -
1,161,629
98.30%
2004
1,262,684
1,262,622
100.00% -
1,262,622
100.00% **
2005
1,364,266
1.203,406
88.21% -
1,203,406
88.21%
2006
2,054,921
2,054
100.00% -
2,054,859
100.00% **
2007
2,269,752
2,147,626
94.62% -
2,147
94.62%
2008
2,442,009
2,406,199
98.53% -
2,406,199
98.53%
2009
2,569.429
2,435.807
94.80% -
2,435,807
94.80%
2010
2,609,456
1,898,973
72.77% -
1,898,973
72.77%
* Information not available.
** Note: For these years the information was not available so an estimate was made to reduce the
total collections to date to 100 %.
Source: HDL Coren & Cone and Los Angeles County Auditor Controller's Office
..
CITY OF ROSEMEAD
Ratios of Outstanding Debt by "Type
Last Ten Fiscal Years
Notes: Details regarding the City's outstanding debt can be found in the notes to the
financial statements.
These ratios are calculated using personal income and population for the prior calendar year
11
Tax
Percentage
Debt
Allocation
of Personal
Per
Fiscal Year
Bonds
Income
I
Capita
1999/00
$ 34.970,000
2.31%
617
2000/01
34,625,000
2.14%
6 04
2001/02
34,255,000
2.10%
619
2002/03
33,830,000
2.00%
1 612
2003/04
33,385.000
1.93%
1 595
2004/05
32,920,000
1.65%
580
2005/06
37,100,000
7.70%
649
2006/07
37,455,000
7.30%
1 655
2007/08
36,350,000
6.74%
1 633
2008/09
35,435,000
6.41%
1 617
2009/10
34,490,000
6.26%
1599
Notes: Details regarding the City's outstanding debt can be found in the notes to the
financial statements.
These ratios are calculated using personal income and population for the prior calendar year
11
1
1
1
CITY OF ROSEMEAD
Ratio of General Bonded Debt Outstanding
Last Ten Fiscal Years
(In Thousands, except Per Capita)
Fiscal Year
"fax
Allocation
Bonds
Percent of
Assessed
Value I
Per
Capita
2000/01
34,625
1.87%
604
2001/02
34,255
1.76%
619
2002/03
33,830
1.63%
612
2003/04
33,385
1.49%
595
2004/05
32,920
1.36%
580
2005/06
37,100
1.40%
649
2006/07
37,455
1.29%
655
2007/08
36,350
.1.15%
633
2008/09
35,435
1.05%
617
2009/10
34,490
1.01%
599
General bonded debt is debt payable with governmental fund resources and general
obligation bonds recorded in enterprise funds (of which, the City has none).
Assessed value has been used because the actual value of taxable property is not
readily available in the State of California.
ril
CITY OF ROSEMEAD
Direct and Overlapping Governmental Activities Debt
June 30, 2010
2009/10 Assessed Valuation: $2,815,313,666 After Deducting $584,01
Debt to Assessed Valutation Ratios.
Direct Debt
Overlapping Debt
Total Debt
" This fund is a portion of a larger agency, and is repsonsible for debt
This report reflects debt which is being repaid through voter- approved
mortgage revenue, tax allocation bonds, interim financing obligations,
certificates of participation, unless provided by the city.
Source: Hdl Caren & Cone, L.A. County Assessor and Auditor Combii
Redevelopment Increment
0.00%
2.78%
2.78%
outside the city.
;tax indebtedness. It excludes
ided capital lease obligations, and
2009/10 Lien Date Tax Rolls.
102
Percentage
Gross Bolded
Applicable
Net Bonded
Debt Balance
To City
Debt
Overlapping Debt
' Metropolitan Water District
$ 121,475,156
0.326%
396,521
Garvey School District DS 2000 Series A
6.50,903
51.648%
3,359,677
Garvey School District DS 2000 Series B
6
51.648%
3,251,017
Garvey School District 2004 Series 2005
8,653,736
51.648%
4,469,514
Garvey Sch DS 2004 Ser 2006
10,793,178
51.648%
5,575,534
Garvey Sch DS 2004 Ser C
8,9917,964
51.648%
4,647,302
Rosemead Sch Dist DS 2000 Ser A
6,595,000
68.637%
4,526,586
Rosemead Sch Dist DS 2000 Ser B
9,150,000
68.637%
6,280,252
Rosemead Sch DS 2000 Ser C
6,775,000
68.637%
4,650,132
Rosemead SD DS 2007 Ref Bonds
5,000,000
68.637%
3,431,832
Rosemead School DS 2008 Series A
9,000,000
68.637%
6,177,297
E1 Monte Union HS Dist 2002 Series A
3,670,000
14.150%
519,289
El Monte Union HS Dist Series B
5.585,000
14.150%
790,252
El Monte Un HSD DS 2006 Ref Bds
37,343,698
14.150%
5,283,966
El Monte Un Hi DS 2002 Ser C
29,490,000
14.150%
4,172,703
El Monte Union High DS 2008 Ser A
54,001,305
14.150%
7,640,943
L.A. CCD DS 2001 Ser A
19,835,000
0.315%
62,564
L.A. CCD DS 2003 Ser B
74,435,000
0.315 %
234,783
L.A. CCD DS 2003 Taxable Ser 2004B
20,765,000
0.315%
65,308
L.A. CCD DS 2001 Taxable Ser 2004A
74 940,000
0.315%
236,376
LACC DS Ref 2001 Series 2005 A
431,720,000
0.315%
1,361,734
LA CCD DS 2001 2006 Series B
382,990,000
0.315%
1,208,030
LA CCD DS 2003, 2006 Series C
300,625,000
0.315%
948,233
LACC US 2001, 2008 Ser E -I
276,560,000
0.315%
872,138
LACC DS 2001, 2008 Taxable Ser E -2
5,2SQ000
0.315%
16,560
LACC DS 2003. 2008 Ser F -1
344,915,000
0.315%
1,087,933
LACC DS 2003, 2008 Taxable Ser F -2
8.660,000
0315%
27,126
LACC DS 2008, 2009 Taxable Ser A
350,060,000
0.315%
1,103,972
LACC DS 2008, 2009 Taxable Ser B
75,060,000
0.315%
236,566
Pasadena Area CCD DS 2002 Serics A
2,835,000
2.642%
74,914
Pasadena CCD DS 2006 Series B
50,590,000
2.642%
1,336,833
Pasadena CCD DS 2006 Ref BD Series C
16,337.379
2.642%
431,713
Pasadena CCD DS 1 _002, 2006 Ser D
52.060.000
2.642%
1,374,092
Montebello Unif DS 1998 Series 98
12.439,696
1387%
172,515
Montebello Unif SD DS 98 Series 99
11,872.854
1.387%
164,654
Montebello USD DS 1998 Series 2001
12,847,827
1387%
178,175
Montebello Unified DS 1998 Series 2002
12,659,966
1.387%
175,570
Montebello Unif DS 2004 Ser 2005
26,810,000
1.387%
371,805
Montebello Unified DS 2004 Ser 2009
33.0 00,000
1.387%
457,648
San Gabriel USD DS 2002 Series A
10,667.600
1.434%
152,931
San Gabriel USD DS 2002 Series B
6,683,892
1.434%
95,821
San Gabriel USD DS 2005 Ref Bonds
17,205.000
1.434%
246,652
San Gabriel USD US 2002 Series 2007 C
10,807,878
1.434%
154,942
San Gabriel USD DS 2008 Ser A
19,988,245
1.434%
286,553
2009/10 Assessed Valuation: $2,815,313,666 After Deducting $584,01
Debt to Assessed Valutation Ratios.
Direct Debt
Overlapping Debt
Total Debt
" This fund is a portion of a larger agency, and is repsonsible for debt
This report reflects debt which is being repaid through voter- approved
mortgage revenue, tax allocation bonds, interim financing obligations,
certificates of participation, unless provided by the city.
Source: Hdl Caren & Cone, L.A. County Assessor and Auditor Combii
Redevelopment Increment
0.00%
2.78%
2.78%
outside the city.
;tax indebtedness. It excludes
ided capital lease obligations, and
2009/10 Lien Date Tax Rolls.
102
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CITY OF ROSEMEAD
Pledged- Revenue Coverage
Last Ten Fiscal Years
(In Thousands)
Note: Details regarding the city's outstanding debt can be to
statements. Operating expenses do not include interes
1.29
1.40
1.34
1.46
1.52
1.62
1.76
2.33
2.31
2.55
d in the notes to the financial
)r depreciation expenses.
104
Tax Allocation Bonds
Fiscal Year
Ended
Tax
Debt Service
June 30
Increment
Principal
Interest
2001
2,945,877
345,000
1,931853
2002
3,197,754
370,000
1,912.843
2003
3,105,416
425,000
1,891.273
2004
3,376.579
445,000
1,870,873
2005
3,494,330
465,000
1,836,765
2006
3,310,295
490.000
1,559,114
2007
4,029,714
780.000
1.505,781
2008
6,219,884
1,105,000
1,567.849
2009
5,649,896
915,000
1,531,987
2010
6,243,948
945,000
1,501,667
Note: Details regarding the city's outstanding debt can be to
statements. Operating expenses do not include interes
1.29
1.40
1.34
1.46
1.52
1.62
1.76
2.33
2.31
2.55
d in the notes to the financial
)r depreciation expenses.
104
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CITY OF ROSEMEAD
Demographic and Economic Statistics
Last Ten Calendar Years
Sources: (1) California State Department of Finance
(2) U.S. Department of Commerce - Bureau of Economic Analysis
(3) State of California Employment Development Department (data shown
is for the County)
105
Per
Personal
Capita
Unemployment
Fiscal
Population
Income
Personal
Rate
Year
(1)
(in thousands) (2
Income (2)
(3)
2000/01
55,351
1,634,072
29,522
5.90%
2001/02
55,289
1,692,452
30,611
6.10%
2002/03
56,065
1,727,026
30,804
6.80%
2003/04
56,710
1,991,372
35,115
6.00%
2004/05
57,189
482.011
36,746
4.50%
2005/06
57,144
513,123
39,011
4.60%
2006/07
57,427
539,163
41,875
4.90%
2007/08
57.422
552,450
42,916
4.47%
2008/09
57.594
551,271
42,818
11.10%
2009/10
57,756
N/A
N/A
11.00%
Sources: (1) California State Department of Finance
(2) U.S. Department of Commerce - Bureau of Economic Analysis
(3) State of California Employment Development Department (data shown
is for the County)
105
CITY OF ROSEMEAD
Principal Employers
Current Year and Nine Years Ago
2010
Based upon Employment Development Department's est
* Information for 2001 is not available.
Source: City of Rosemead and Rosemead Chamber of
2001
Number of
Employer
Total
Employees
ployment
Employees Employment
Southern California Edison
1
4.000
Garvey School District
2
953
Wal -Mart
3
420
Panda Restaurant Group, Inc.
4
400
Rosemead School District
5
337
Target
6
200
Hemetic Seal Corporation
7
130
Don Bosco Tech
8
90
Double Tree
9
90
Marge Carson, Inc.
10
80
Based upon Employment Development Department's est
* Information for 2001 is not available.
Source: City of Rosemead and Rosemead Chamber of
e of 22,200 residents employed in 2009 -10.
w
2001
ercentof
Percent of
Total
Number of Total
ployment
Employees Employment
18.02%
- 0.00%
4.29%
- 0.00%
1.89%
- 0.00%
1.80%
- 0.00%
1.52%
- 0.00%
0.90%
- 0.00%
0.59%
- 0.00%
0.41%
- 0.00%
0.41%
- 0.00%
0.36%
- 0.00%
e of 22,200 residents employed in 2009 -10.
w
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CITY OF ROSEMEAD
Full -time and Part-time City Employees
by Function
Last Ten Fiscal Years
Total 148 148 161 139 132 150 151 179 208 199
The City of Rosemead contracts with the Los Angeles County Sheriffs Department for all police services
with the exception of parking control and crossing guards which are provided by City personnel.
The City of Rosemead is part of the Los Angeles County Fire Protection District which provides fire fighting,
fire prevention, and plan check services for the City.
Source: City Finance Department
107
Full -Time and
Part-time
Employees as of June 30
Function
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
General government
16
19
16
14
15
18
17
19
16
22
Public safety 1
19
16
23
22
17
23
22
34
39
42
Community
development
12
6
5
6
6
6
11
23
18
23
Parks and recreation
101
107
117
97
94
103
101
103
135
112
Total 148 148 161 139 132 150 151 179 208 199
The City of Rosemead contracts with the Los Angeles County Sheriffs Department for all police services
with the exception of parking control and crossing guards which are provided by City personnel.
The City of Rosemead is part of the Los Angeles County Fire Protection District which provides fire fighting,
fire prevention, and plan check services for the City.
Source: City Finance Department
107
CITY OF ROSEMEAD
Operating Indicators
by Function
Last Ten Fiscal Years
2001 2002 2003 2004
Police:
Arrests
1,310
1,299
1,102
1,081
1,23
Parking citations issued
n/a
n/a
n/a
14,676
18,35
Fire:
Number of emergency calls
2,634
2,809
2,728
2,733
2,80
Inspections
117
117
117
117
11
Public works:
Street resurfacing (miles)
-
1.7
-
1.3
Parks and recreation:
Number of recreation classes
400
400
420
450
53
Number of facility rentals
n/a
n/a
n/a
n/a
n/a
I
Source: City of Rosemead
Year
2006 2007 2008 2009 2010
1,315 1,786 1,506 1,478 1,733
15,176 13,210 11,766 10,517 8,450
2,868 2,994 3,094 1,834 2,574
117 117 2,518 2,093 3,137
1.3 2.5 1.1 2.8 15
720 775 484 397 727
n/a n/a 540 453 236
108
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CITY OF ROSEMEAD
Capital Asset Statistics
by Function
Last Ten Fiscal Years
Source: City of Rosemead
109
Fiscal Year
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
Public Safety:
Sheriff stations
1
1
I
1
1
1
I
1
1
1
Fire:
Fire stations
2
2
2
2
2
2
2
2
2
2
Public works:
Streets (miles)
76.80
76.80
76.80
76.80
76.80
76.80
76.80
77.55
77.55
77.55
Streetlights
2.571
2.506
2.700
2.700
1702
2305
2306
2.712
2.712
2.712
Traffic signals
39
39
39
39
39
39
41
42
42
42
Parks and recreation:
Parks
10
10
10
10
10
10
10
10
10
10
Community centers
2
2
2
2
2
2
2
2
2
2
Source: City of Rosemead
109
(This page intentionally left blank)
110
' ATTACHMENT - B
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J
ROSEMEAD COMMUNITY DEVELOPMENT
COMMISSION
FINANCIAL STATEMENTS
Fiscal Year Ended June 30, 2010
' ROSEMEAD COMMUNITY DEVELOPMENT COMMISSION
FINANCIAL STATEMENTS
' Fiscal Year Ended June 30, 2010
I � I
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TABLE OF CONTENTS
INDEPENDENT AUDITORS' REPORT
FINANCIAL STATEMENTS
' Government -wide Financial Statements
Statement of Net Assets
' Statement of Activities
Fund Financial Statements
Balance Sheet - Governmental Funds
' Reconciliation of the Balance Sheet of Governmental Funds to the
Statement of Net Assets
Statement of Revenues, Expenditures and Changes in Fund
' Balances - Governmental Funds
Reconciliation of Statement of Revenues, Expenditures and
Changes in Fund Balances of Governmental Funds to the
' Statement of Activities
Notes to the Basic Financial Statements
' REQUIRED SUPPLEMENTARY INFORMATION
' Notes to Required Supplementary Information
Low - Moderate Income Housing Set -Aside Schedule of Revenues,
Expenditures and Changes in Fund Balances — Budget and Actual
Rosemead Housing Development Corporation Schedule of Revenues,
Expenditures and Changes in Fund Balances — Budget and Actual
Supplementary Information:
Computation of Low /Moderate Housing Fund — Excess Surplus
' Report on Compliance and Other Matters and on Internal Control Over
Financial Reporting Based on an Audit of Financial Statements
Performed in Accordance with Government Auditing Standards
' Schedule of Findings and Recommendations
0
Page
25
26
27
28
29
31
' Mayer Hoffman McCann P.C.
1
Board of Directors
' Rosemead Community Development Commission
Rosemead, California
INDEPENDENT AUDITORS' REPORT
' We have audited the accompanying financial statements of the governmental activities and
each major fund of the Rosemead Community Development Commission (the Commission), a
component unit of the City of Rosemead, California, as of and for the year ended June 30,
2010, which collectively comprise of the Commission's basic financial statements as listed in the
table of contents. These financial statements are the responsibility of the Commission's
' management. Our responsibility is to express an opinion on these financial statements based on
our audit.
We conducted our audit in accordance with auditing standards generally accepted in the United
' States of America and the standards applicable to financial audits contained in 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 opinions.
' In our opinion, the financial statements referred to above present fairly, in all material respects,
the respective financial position of the governmental activities and each major fund of the
Commission as of June 30, 2010, and the respective changes in financial position thereof for
' the year then ended, in conformity with accounting principles generally accepted in the United
States of America.
' The Commission has not presented management's discussion and analysis which according to
accounting principles generally accepted in the United States of America is necessary to
supplement, although not required to be part of, the basic financial statements.
' The information identified in the accompanying table of contents as required supplementary
information is not a required part of the basic financial statements but is supplementary
information required by accounting principles generally accepted in the United States of
' America. We have applied certain limited procedures, which consisted principally of inquiries of
management regarding the methods of measurement and presentation of the required
supplementary information. However, we did not audit the information and express no opinion
on it
An Independent CPA Firm
2301 Dupont Drive, Suite 200
t
Irvine, California 92612
949- 474 -2020 ph
949 - 263 -5520 fx
'
www.mhm- pc.com
INDEPENDENT AUDITORS' REPORT
' We have audited the accompanying financial statements of the governmental activities and
each major fund of the Rosemead Community Development Commission (the Commission), a
component unit of the City of Rosemead, California, as of and for the year ended June 30,
2010, which collectively comprise of the Commission's basic financial statements as listed in the
table of contents. These financial statements are the responsibility of the Commission's
' management. Our responsibility is to express an opinion on these financial statements based on
our audit.
We conducted our audit in accordance with auditing standards generally accepted in the United
' States of America and the standards applicable to financial audits contained in 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 opinions.
' In our opinion, the financial statements referred to above present fairly, in all material respects,
the respective financial position of the governmental activities and each major fund of the
Commission as of June 30, 2010, and the respective changes in financial position thereof for
' the year then ended, in conformity with accounting principles generally accepted in the United
States of America.
' The Commission has not presented management's discussion and analysis which according to
accounting principles generally accepted in the United States of America is necessary to
supplement, although not required to be part of, the basic financial statements.
' The information identified in the accompanying table of contents as required supplementary
information is not a required part of the basic financial statements but is supplementary
information required by accounting principles generally accepted in the United States of
' America. We have applied certain limited procedures, which consisted principally of inquiries of
management regarding the methods of measurement and presentation of the required
supplementary information. However, we did not audit the information and express no opinion
on it
I
Board of Directors
Rosemead Community Development Commission
Page Two
Our audit was conducted for the purpose of forming opinions on the financial statements that
' collectively comprise the Rosemead Community Development Commission's basic financial
statements. The supplementary information is presented for purposes of additional analysis and
is not a required part of the basic financial statements. The supplementary information has
' been subjected to the auditing procedures applied in the audit of the basic financial statements
and, in our opinion, are fairly stated in all material respects in relation to the basic financial
statements taken as a whole.
In accordance with Government Auditing Standards, we have also issued our report dated
December 20, 2010 on our consideration of the Commission's internal control over financial
reporting and our tests of its compliance with certain provisions of laws, regulations, contracts,
' grant agreements and other matters. The purpose of that report is to describe the scope of our
testing of internal control over financial reporting and compliance and the results of that testing,
and not to provide an opinion on the internal control over financial reporting or on compliance.
That report is an integral part of an audit performed in accordance with Government Auditing
Standards and should be considered in assessing the results of our audit.
�p 6f h °� 4 W.0 AC 1 I' (.
' Irvine, California
December 20, 2010
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ROSEMEAD COMMUNITY DEVELOPMENT COMMISSION
Statement of Net Assets
June 30, 2010
1
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Assets
Cash and investments (note 2)
Receivables:
Accounts
Accrued interest
Due from City of Rosemead
Land held for resale
Deferred charges
Capital assets, net (note 5)
Land
Other capital assets, net
Total assets
Liabilities and Net Assets
Liabilities:
Accounts payable
Deposits payable
Due to City of Rosemead
Accrued interest payable
Noncurrent liabilities (note 6):
Due within one year
Due in more than one year
Total liabilities
Net assets:
Restricted for:
Low - moderate income housing
Unrestricted
Total net assets
See accompanying notes to the basic financial statements.
3
$ 10,986,838
539,293
27,740
728,728
4,407,616
420,835
2,425,898
13,222,983
32,759,931
446,913
36,180
1,309,283
595,826
994,802
36,230,740
39,613,744
6,462,434
(13,316,247)
$ (6,853,813)
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ROSEMEAD COMMUNITY DEVELOPMENT COMMISSION
Statement of Activities
Fiscal Year ended June 30, 2010
General revenues:
Program Revenues
Property taxes
4,806,091
Operating Capital
121,136
Other general revenues
18,746
Charges for _ Contributions Contributions
Governmental
Change in net assets
Expenses
Services and Grants and Grants
Activities
Governmental activities:
$ (6,853,813)
Community development
$ 4,603,129
, 420,006`
(4,183,123)
Interest expense
1,491,717
-
(1,491,717)
Total governmental
activities
$ 6,094,846
420,006
(5,674,840)
General revenues:
Taxes:
Property taxes
4,806,091
Investment income
121,136
Other general revenues
18,746
Total general revenues
4,945,973
Change in net assets
(728,867)
Net assets at beginning of year
(6,124,946)
Net assets at end of year
$ (6,853,813)
See accompanying notes to the basic financial statements.
E
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ROSEMEAD COMMUNITY DEVELOPMENT COMMISSION
Balance Sheet - Governmental Funds
June 30, 2010
Low - Moderate
Rosemead
1,984,489
78,416 - 2,062,905
-
Income
Housing
- - 1,092,150 1.092 150
6,462,434
78,416 2,803,908 5,499,766 14,844,524
Housing
Development
Debt
Capital
Set -Aside
Corporation
Service
Projects
Total
$ 1,289,449
101,396
7,187,527
2,408,466
10,986,838
-
13,777
468,654
56,862
539,293
2,474
-
16,626
8,640
27,740
718,929
-
9,799
726,728
-
4,407,616
4,407,616
4,477,945
-
4,477,945
$ 6,488,797
115,173
7,672,807
6,891,383
21,168,160
1
Assets:
Cash and investments
Receivables:
Accounts
Accrued interest
' Due from City of Rosemead
Land held for resale
Advances to other funds (note 4)
' Total assets
' Liabilities and Fund Balance
Liabilities:
Accounts payable
' Deposits payable
Due to City of Rosemead
Deferred revenue
' Advances from other funds (note 4)
Total liabilities
' Fund balance:
Reserved for:
Land held for resale
' Advances to other funds
Unreserved, reported in:
Special revenue funds
Debt service funds
Capital projects funds
Total fund balance
t Total liabilities and fund balance
1
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$ 2,696 577 390,954 52,686 446,913
- 36,180 - - 36,180
23,667 - 1,285,616 1,309,283
- - 53,315 53,315
4,477,945 - 4,477,945
26,363 36,757 4,868,899 1,391,617 6,323,636
4,407,616 4,407,616
4,477,945
- 4,477,945
1,984,489
78,416 - 2,062,905
-
- 2,803,908 - 2,803,908
-
- - 1,092,150 1.092 150
6,462,434
78,416 2,803,908 5,499,766 14,844,524
$ 6,488,797
115,173 7,672,807 6,891,383 21,168,160
See accompanying notes to the basic financial statements.
5
I
'
ROSEMEAD COMMUNITY DEVELOPMENT COMMISSION
Governmental Funds
'
Reconciliation of the Balance Sheet of Governmental Funds
to the Statement of Net Assets
'
June 30, 2010
I Fund balances of governmental funds $ 14,844,524
t Amounts reported for governmental activities in the statement of
net assets are different because:
'
Capital assets, net of depreciation, have not been included
as financial resources in governmental fund activity.
Capital assets
22,246,786
'
Accumulated depreciation
(6,597,905)
Long -term debt has not been included in the governmental fund activity.
'
Advances from City
(2,497,920)
Bonds payable
(34,490,000)
Unamortized bond premiums
(237,622)
'
Cost associated with the issuance of debt are capitalized and amortized in the
statement of net assets and expensed in the governmental funds.
'
Deferred charges
420,835
Accrued interest payable for the current portion of interest due on
t bonds
payable has not been reported in the governmental funds.
(595,826)
Revenues that are measurable but not available. Amounts are recorded
as deferred revenue under the modified accrual basis of accounting.
53,315
Net assets of governmental activities
t
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' See accompanying notes to the basic financial statements.
6
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ROSEMEAD COMMUNITY DEVELOPMENT COMMISSION
Statement of Revenues, Expenditures and Changes in Fund Balances -
Governmental Funds
Fiscal Year ended June 30, 2010
Revenues:
Taxes
Rental income
Investment income
Other
Total revenues
Expenditures:
Current:
General government
Public safety
Public works
Community development
Debt service:
Principal
Interest and fiscal charges
Total expenditures
Excess (deficiency) of
revenues over (under)
expenditures
Other financing sources (uses):
Transfers in (note 4)
Transfers out (note 4)
Transfers to City of Rosemead
Total other financing
sources (uses)
Change in fund balances
Fund balances at beginning
of year
Fund balances at end of year
Low - Moderate
Rosemead
1,857,285
3,032,766
Income
Housing
(2,782,766)
-
(3,032,766)'
Housing
Development
Debt
Capital
(245,260)
Set -Aside
Corporation
Service
Projects
Total
$
-
6,243,948
1,612,025
6,243,948
-
420,006
-
-
420,006
10,308
66
67,878
42,884
121,136
-
-
78,416
18,746
18,746
10,308
420,072
6,311,826
61,630
6,803,836
731,839 106,884 1,452,328 2,291,051
- 975,509 - 975,509
- 1,687,774 1,687,774
189,359 - 189,359
945,000 945,000
- - 1,501,667 - 1,501,667
189,359 731,839 3,529,060 3,140,102 7,590,360
(179,051) (311,767) 2,782,766 (3,078,472) (786,524)
925,481
250,000
1,857,285
3,032,766
(250,000)
-
(2,782,766)
-
(3,032,766)'
-
(245,260)
(245,260)
675,481
250,000
(2,782,766)
1,612,025
(245,260)
496,430
(61,767)
-
(1,466,447)
(1,031,784)
5,966,004
140,183
2,803,908
6,966,213
15,876,308
$ 6,462,434
78,416
2,803,908
5,499,766
14,844,524
See accompanying notes to the basic financial statements.
7
Net changes in fund balances of governmental funds $ (1,031,784)
Amounts reported for governmental activities in the statement of
' activities is different because:
Governmental funds report capital outlay as expenditures. However, in
' the statement of activities, the cost of those assets is allocated over their
estimated useful lives as depreciation expense. This is the amount by which
' capital outlays exceeded depreciation in the current period.
Depreciation expense (705,348)
Bond issuance costs, premiums, discounts, and similar items are recorded
as expenditures in governmental funds when debt is first issued, whereas
ROSEMEAD COMMUNITY DEVELOPMENT COMMISSION
these amounts are deferred and amortized in the statement of activities.
Governmental Funds
'
Reconciliation of the Statement of Revenues, Expenditures,
'
and Changes in Fund Balances of Governmental Funds
Repayment of bond principal is an expenditure in the governmental funds,
to the Statement of Activities
'
Fiscal Year ended June 30, 2010
Net changes in fund balances of governmental funds $ (1,031,784)
Amounts reported for governmental activities in the statement of
' activities is different because:
Governmental funds report capital outlay as expenditures. However, in
' the statement of activities, the cost of those assets is allocated over their
estimated useful lives as depreciation expense. This is the amount by which
' capital outlays exceeded depreciation in the current period.
Depreciation expense (705,348)
1
' See accompanying notes to the basic financial statements.
Bond issuance costs, premiums, discounts, and similar items are recorded
as expenditures in governmental funds when debt is first issued, whereas
8
these amounts are deferred and amortized in the statement of activities.
'
This amount is the net offset of the differences.
32,372
Repayment of bond principal is an expenditure in the governmental funds,
'
but the repayment reduces long -term liabilities in the statement of net assets.
945,000
The statement of net assets includes accrued interest on long term debt.
(22,422)
'
Revenues that are measurable but not available. Amounts are not recorded
as revenue under the modified accrual basis of accounting.
53,315
Change in net assets of governmental activities
1
1
' See accompanying notes to the basic financial statements.
8
I
' ROSEMEAD COMMUNITY DEVELOPMENT COMMISSION
Notes to the Basic Financial Statements
' Fiscal Year ended June 30, 2010
t (1) Summary of Significant Accounting Policies
(a) Reporting Entity
The Rosemead Redevelopment Agency was established in June 1972 pursuant
' to State of California Health and Safety Code Section 33000 entitled Community
Redevelopment Law. The Agency's name was changed to the Rosemead
Community Development Commission (the Commission) in January 2002. 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
Commission is a blended component unit of the City of Rosemead, California,
(the City) and is included in the basic financial statements of the City. The
financial statements contain information for the Commission only. The City's
financial statements can be obtained from the Finance Department of the City.
' Governmental Accounting Standards Board (GASB) Statement No. 14. The
Financial Reporting Entity, defines the reporting entity as the primary government
' and those component units for which the primary government is, or has the
potential to be, financially accountable. Financial accountability is defined as
appointment of a voting majority of the component unit's Board and either (a) the
' primary government has the ability to impose its will or (b) the possibility that the
component unit will provide a financial benefit to, or impose a financial burden
on, the primary government.
' Based upon the above criteria, the Rosemead Housing Development Corporation
(the Corporation), is a blended component unit of the Commission as the
Commission's governing board serves as the governing board of the
' Corporation.
Since the City Council of the City also serves as the Board of Directors of the
' Commission, the City, in effect, has the ability to influence and control
operations. Therefore, the City has oversight responsibility for the Commission.
Accordingly, the Commission is a blended component unit of the City.
' (b) Basis of Accounting and Measurement Focus
The basic financial statements of the Commission are composed of the following:
Government -wide financial statements
Fund financial statements
' . Notes to the basic financial statements
1
ROSEMEAD COMMUNITY DEVELOPMENT COMMISSION
Notes to the Basic Financial Statements
' (Continued)
' (1) Summary of Significant Accounting Policies, (Continued)
' (b) Basis of Accounting and Measurement Focus, (Continued)
Government -wide Financial Statements
' Government -wide financial statements display information about the reporting
government as a whole, except for its fiduciary activities. These statements
' include separate columns for the governmental and business -type activities of
the primary government (including its blended component units), as well as its
discreetly presented component units. The Community Development
' Commission of the City of Rosemead has no business -type activities or
discretely presented component units. Eliminations have been made in the
Statement of Activities so that certain allocated expenses are recorded only once
(by the function to which they were allocated). However, general government
expenses have not been allocated as indirect expenses to the various functions
of the Commission.
' Government -wide financial statements are presented using the economic
resources measurement focus and the accrual basis of accounting. Under the
economic resources measurement focus, all (both current and long -term)
' economic resources and obligations of the reporting government are reported in
the government -wide financial statements. Basis of accounting refers to when
revenues and expenditures are recognized in the accounts and reported in the
' financial statements. Under the accrual basis of accounting, revenues, expenses,
gains, losses, assets, and liabilities resulting from exchange and exchange -like
transactions are recognized when the exchange takes place. Revenues,
expenses, gains, losses, assets, and liabilities resulting from nonexchange
' transaction are recognized in accordance with the requirements of GASB
Statement No. 33.
' Program revenues include charges for services and payments made by parties
outside of the reporting government's citizenry if that money is restricted to a
particular program. Program revenues are netted with program expenses in the
' statement of activities to present the net cost of each program.
Amounts paid to acquire capital assets are capitalized as assets in the
government -wide financial statements, rather than reported as expenditure.
' Proceeds of long -term debt are recorded as a liability in the government -wide
financial statements, rather than as other financing source. Amounts paid to
reduce long -term indebtedness of the reporting government are reported as a
I reduction of the related liability, rather than as an expenditure
1 10
I
1 ROSEMEAD COMMUNITY DEVELOPMENT COMMISSION
Notes to the Basic Financial Statements
1 (Continued)
1 (1) Summary of Significant Accounting Policies, (Continued)
1 (b) Basis of Accounting and Measurement Focus, (Continued)
Fund Financial Statements
1 The underlying accounting system of the Commission is organized and operated
on the basis of separate funds, each of which is considered to be a separate
1 accounting entity. The operations of each fund are accounted for with a separate
set of self - balancing accounts that comprise its assets, liabilities, fund equity,
revenues and expenditures or expenses, as appropriate. Governmental
1 resources are allocated to and accounted for in individual funds based upon the
purposes for which they are to be spent and the means by which spending
activities are controlled.
1 Fund financial statements for the primary government's governmental,
proprietary, and fiduciary funds are presented after the government -wide
financial statements. These statements display information about major funds
1 individually and nonmajor funds in the aggregate for governmental and enterprise
funds. Fiduciary statements include financial information for fiduciary funds and
similar component units. Fiduciary funds primarily represent assets held by the
1 Commission in a custodial capacity for other individuals or organizations. The
Commission has no enterprise funds or fiduciary funds.
Governmental Funds
1 In the fund financial statements, governmental funds and agency funds are
presented using the modified - accrual basis of accounting. Their revenues are
recognized when they become measurable and available as net current assets.
Measurable means that the amounts can be estimated, or otherwise determined.
Available means that the amounts were collected during the reporting period or
1 soon enough thereafter to be available to finance the expenditures accrued for
the reporting period. The Commission uses a sixty day availability period.
Revenue recognition is subject to the measurable and available criteria for the
1 governmental funds in the fund financial statements. Exchange transactions are
recognized as revenues in the period in which they are earned (i.e., the related
goods or services are provided). Locally imposed derived tax revenues are
1 recognized as revenues in the period in which the underlying exchange
transaction upon which they are based takes place. Imposed non - exchange
transactions are recognized as revenues in the period for which they were
imposed. If the period of use is not specified, they are recognized as revenues
1 when an enforceable legal claim to the revenues arises or when they are
received, whichever occurs first. Government - mandated and voluntary non -
exchange transactions are recognized as revenues when all applicable eligibility
i requirements have been met
1 11
1
t
1
(1)
1
1
1
ROSEMEAD COMMUNITY DEVELOPMENT COMMISSION
Notes to the Basic Financial Statements
(Continued)
Summary of Significant Accounting Policies. (Continued)
(b) Basis of Accounting and Measurement Focus, (Continued)
Governmental Funds, (Continued)
In the fund financial statements, governmental funds are presented using the
current financial resources measurement focus. This means that only current
assets and current liabilities are generally included on their balance sheets. The
reported fund balance (net current assets) is considered to be a measure of
"available spendable resources." Governmental fund operating statements
present increases (revenues and other financing sources) and decreases
(expenditures and other financing uses) in net current assets. Accordingly, they
are said to present a summary of sources and uses of "available spendable
resources' during a period.
Non- current portions of long -term receivables due to governmental funds are
reported on their balance sheets in spite of their spending measurement focus.
Special reporting treatments are used to indicate, however, that they should not
be considered "available spendable resources," since they do not represent net
current assets. Recognition of governmental fund type revenues represented by
noncurrent receivables are deferred until they become current receivables.
Noncurrent portions of other long -term receivables are offset by fund balance
reserve accounts.
Because of their spending measurement focus, expenditure recognition for
governmental fund types excludes amounts represented by noncurrent liabilities.
Since they do not affect net current assets, such long -term amounts are not
recognized as governmental fund type expenditures or fund liabilities.
Amounts expended to acquire capital assets are recorded as expenditures in the
year that resources were expended, rather than as fund assets. The proceeds of
long -term debt are recorded as an other financing source rather than as a fund
liability. Amounts paid to reduce long -term indebtedness are reported as fund
expenditures.
When both restricted and unrestricted resources are combined in a fund,
expenses are considered to be paid first from restricted resources, and then from
unrestricted resources.
12
' ROSEMEAD COMMUNITY- DEVELOPMENT COMMISSION
Notes to the Basic Financial Statements
(Continued)
(1) Summary of Significant Accounting Policies, (Continued)
(c) Property Taxes
Real property taxes are levied for the period from July 1 to June 30 against
' property owners of record on March 1. The taxes are due in two installments, on
December 10 and April 10, and become delinquent after December 10 and April
10, respectively. Under the provisions of NCGA Interpretation 3, property tax
t revenue is recognized in the fiscal year for which the taxes have been levied,
provided it is collected within sixty days of the end of the fiscal year in the fund
financial statements.
t (d) Major Funds
' The Commission reports the following major governmental funds:
Low- Moderate Income Housing Set -Aside Fund — Accounts for the 20% of gross
' property tax increment revenue received by the Commission to fund future
projects involving the replacement or rehabilitation of low- and moderate - income
housing within City limits.
' Rosemead Housing Development Corporation (the Corporation) — Accounts for
the construction and financing of low- and moderate - income housing.
' Debt Service Fund — Accounts for the accumulation of resources for the payment
of principal, interest and related costs associated with all long -term debt of the
Commission.
' 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 Commission.
(e) Cash and Investments
' Cash includes amounts in demand and time deposits. Investments are reported
in the accompanying balance sheet at fair value, except for certain money market
' contracts that are reported at cost because they are not transferable and they
have terms that are not affected by changes in market interest rates.
Changes in fair value that occur during a fiscal year are recognized as
' investment income reported for that fiscal year. Investment income includes
interest earnings, changes in fair value and any gains or losses realized upon the
liquidation, maturity or sale of investments.
1 13
ROSEMEAD COMMUNITY DEVELOPMENT COMMISSION
Notes to the Basic Financial Statements
' (Continued)
(1) Summary of Significant Accounting Policies (Continued)
' (f) Capital Assets
' Capital assets, which include land, buildings, equipment and infrastructure assets
(e.g., roads, bridges, traffic signals and similar items), are reported in the
government -wide financial statements. Capital assets are defined by the
Commission as assets with an initial individual cost of more than $10,000 and an
estimated useful life in excess of one year. Such assets are recorded at historical
cost or estimated historical cost if purchased or constructed. Donated capital
assets are recorded at estimated fair market value at the date of donation.
' The cost of normal maintenance and repairs that do not add to the value of an
asset or materially extend an asset's useful life are not capitalized. Construction
' in progress costs are transferred to their respective fixed asset category upon
completion.
' Depreciation is charged to operations using the straight -line method based on
the estimated useful life of an asset. The estimated useful lives of depreciable
assets are as follows:
' Buildings 50 years
Improvements other than buildings 15 years
' Furniture and office equipment 7 years
Streets 30 years
Sidewalks 40 years
Vehicles 5 years
(g) Long -term Obligations
' Long -term debt and other long -term obligations are reported as liabilities in the
applicable governmental activities statement of net assets. Bond premiums,
discounts and issuance costs are deferred and amortized over the life of the
' bonds. Bonds payable are reported net of the applicable bond premium or
discount. Bond issuance costs are reported as deferred charges and amortized
over the term of the related debt.
' In the fund financial statements, governmental fund types recognize bond
premiums, discounts and issuance costs during the current period, the face
' amount of debt issued is reported as other financing sources. Premiums received
on debt issuances are reported as other financing sources, while discounts on
debt issuances are reported as other financing uses. Issuance costs, whether or
not withheld from the actual debt proceeds received, are reported as debt service
' expenditures.
1 14
I
' ROSEMEAD COMMUNITY DEVELOPMENT COMMISSION
Notes to the Basic Financial Statements
(Continued)
(1) Summary of Significant Accounting Policies, (Continued
(h) Fund Equity
t In the fund financial statements, governmental funds report reservations of fund
balances for amounts that are not available for appropriation or are legally
' restricted by outside parties for use for a specific purpose. Designations of fund
balances represent tentative management plans and are subject to change.
' (i) Low - Moderate Income Housing Set -Aside
On October 9, 1991 the Commission prepaid its housing obligation in the amount
of $6,813,850 from proceeds from its 1987 tax allocation notes. This pre-
' payment was restructured in 1993 along with the 1993 series tax allocation
bonds. As a result, the Commission's housing obligation has been reduced by
$469,142 per year until the 2021 -22 fiscal year.
' (j) Use of Estimates
' The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions
that affect certain reported amounts and disclosures. Accordingly, actual results
could differ from those estimates.
(k) Land Held for Resale
' Land acquired by the Commission for future development and sale is valued at
the lower of cost or net realizable- value and is offset by a reservation of fund
balance to indicate that the assets do not constitute available spendable
resources.
(2) Cash and Investments
' Cash and investments as of June 30, 2010 are classified in the accompanying financial
statements as follows:
Statement of net assets:
Cash and investments $10,986,838
' Total cash and investments $10 986 838
Cash and investments as of June 30, 2010 consist of the following:
' Deposits with financial institutions $ 423,860
Investments 10,562,978
' Total cash and investments $10 986 838
' 15
I
[�
1
I
I
1
1
1
1
1
ROSEMEAD COMMUNITY DEVELOPMENT COMMISSION
Notes to the Basic Financial Statements
(Continued)
(2) Cash and Investments, (Continued)
Investments Authorized by the California Government Code and the Citv's Investment
Policy
The table below identifies the investment types that are authorized for the City by the
California Government Code and the City's investment policy. The table also identifies
certain provisions of the California Government Code (or the City's investment policy, if
more restrictive) that address interest rate risk, credit risk, and concentration of credit
risk. This table does not address investments of debt proceeds held by bond trustee that
are governed by the provisions of debt agreements of the City, rather than the general
provisions of the California Government Code or the City's investment policy.
* Based on state law requirements or investment policy requirements, whichever is more
restrictive.
16
Authorized by
Maximum
Maximum
Investment Types
Investment
Maximum
Percentage
Investment
Authorized by State Law
Policy
Maturity*
of Portfolio*
In One Issuer*
Local Agency Bonds
No
5 years
None
None
U.S. Treasury Obligations
Yes
5 years
None
None
U.S. Agency Securities
Yes
5 years
None
None
Banker's Acceptances
Yes
180 days
40%
30%
Commercial Paper
Yes
270 days
25%
10%
Negotiable Certificates of Deposit
Yes
1 year
30%
None
Repurchase Agreements
No
1 year
None
None
Reverse Repurchase Agreements
No
92 days
20% of base value None
Medium -Term Notes
Yes
5 years
10%
None
Mutual Funds
Yes
N/A
20%
10%
Money Market Mutual Funds
Yes
N/A
20%
10%
Mortgage Pass- Through Securities
No
5 years
20%
None
County Pooled Investment Funds
No
N/A
None
None
Local Agency Investment Fund
Yes
N/A
None
None
JPA Pools (other investment pools)
No
N/A
None
None
* Based on state law requirements or investment policy requirements, whichever is more
restrictive.
16
I
' (2) Cash and Investments, (Continued)
ROSEMEAD COMMUNITY DEVELOPMENT COMMISSION
Notes to the Basic Financial Statements
'
(Continued)
' (2) Cash and Investments, (Continued)
1
I
11
17
Investments Authorized by Debt Agreements
Investment of debt proceeds held by bond trustee are governed by provisions of the debt
agreements, rather than the general provisions of the California Government Code or the
'
City's investment policy. The table below identifies the investment types that are
authorized for investments held by bond trustee. The table also identifies certain
provisions of these debt agreements that address interest rate risk, credit risk, and
'
concentration of credit risk.
Maximum Maximum
Authorized Maximum Percentage Investment
'
Investment Type Maturity Allowed In One Issuer
Local Agency Bonds None None None
'
U.S. Treasury Obligations None None None
U.S. Agency Securities None None None
Banker's Acceptances 1 year None None
Commercial Paper 1 year None 10%
Repurchase Agreements 30 days None None
Money Market Mutual Funds N/A 20% 10%
Local Agency Investment Fund N/A None None
'
Investment Agreements N/A None None
Certificates of Deposits 1 year None None
'
Disclosures Relating to Interest Rate Risk
'
Interest rate risk is the risk that changes in market interest rates will adversely affect the
fair value of an investment. Generally, the longer the maturity of an investment, the greater
the sensitivity of its fair value to changes in market interest rates. One of the ways that the
Agency manages its exposure to interest rate risk is by purchasing a combination of
'
shorter term and longer term investments and by timing cash flows from maturities so that
a portion of the portfolio is maturing or coming close to maturity evenly over time as
'
necessary to provide the cash flow and liquidity needed for operations.
1
I
11
17
I
' ROSEMEAD COMMUNITY DEVELOPMENT COMMISSION
Notes to the Basic Financial Statements
' (Continued)
1
(2) Cash and Investments, (Continued)
' Disclosures Relating to Interest Rate Risk, (Continued)
' Information about the sensitivity of the fair values of the Agency's investments (including
investments held by bond trustee) to market interest rate fluctuations is provided by the
following table that shows the distribution of the Agency's investments by maturity:
' Remaining Maturing (in Months)
12 Months 13 to 24 25 to 60 More Than
' Investment Type Or Less Months Months 60 Months
State investment pool $ 9,419,924 9,419,924 -
Held by bond trustee:
' Investment agreement 1,143,054 - 1,143,054
Total $10,562 4�1 92 1 4
' Disclosures Relating to Credit Risk
' Generally, credit risk is the risk that an issuer of an investment will not fulfill its obligation to
the holder of the investment. This is measured by the assignment of a rating by a
nationally recognized statistical rating organization. Presented below is the minimum rating
' required by (where applicable) the California Government Code, the City's investment
policy, or debt agreements, and the actual rating as of year end for each investment type.
' Minimum Exempt Rating as of Year End
Legal From Not
' Investment Type Rating Disclosure AAA Rated
State investment pool $ 9,419,924 N/A 9,419,924
Held by bond trustee:
' Investment agreement 1,143,054 N/A 1,143,054
Total $10 10.562.978
1
1
1
1 18
I
' ROSEMEAD COMMUNITY DEVELOPMENT COMMISSION
Notes to the Basic Financial Statements
1 (Continued)
' (2) Cash and Investments (Continued)
' Concentration of Credit Risk
The investment policy contains no limitations on the amount that can be invested in any
' one issuer beyond that stipulated by the California Government Code. Investments in any
one issuer (other than U.S. Treasury securities, mutual funds, and external investment
pools) that represent 5% or more of total Agency investments are as follows:
' Issuer Investment Type Reported Amount
AIG Match Funding Corp Investment agreement $ 1,143,054
Custodial Credit Risk
' Custodial credit risk for deposits is the risk that, in the event of the failure of a depository
financial institution, a government will not be able to recover its deposits or will not be able
to recover collateral securities that are in the possession of an outside party. The custodial
t credit risk for investments is the risk that, in the event of the failure of the counterparty
(e.g., broker - dealer) to a transaction, a government will not be able to recover the value of
its investment or collateral securities that are in the possession of another party. The
California Government Code and the City's investment policy do not contain legal or policy
' requirements that would limit the exposure to custodial credit risk for deposits or
investments, other than the following provision for deposits: The California Government
Code requires that a financial institution secure deposits made by state or local
' governmental units by pledging securities in an undivided collateral pool held by a
depository regulated under state law (unless so waived by the governmental unit). The
market value of the pledged securities in the collateral pool must equal at least 110% of
the total amount deposited by the public agencies. California law also allows financial
' institutions to secure Agency deposits by pledging first trust deed mortgage notes having a
value of 150% of the secured public deposits. As of June 30, 2010, the Commission had
no deposits with financial institutions in excess of federal depository insurance limits.
' For investments identified herein as held by bond trustee, the bond trustee selects the
investment under the terms of the applicable trust agreement, acquires the investment,
' and holds the investment on behalf of the reporting government.
Investment in State Investment Pool
' The Agency is a voluntary participant in the Local Agency Investment Fund (LAIF) that is
regulated by the California Government Code under the oversight of the Treasurer of the
State of California. The fair value of the Agency's investment in this pool is reported in the
' accompanying financial statements at amounts based upon the Agency's pro -rata share of
the fair value provided by LAIF for the entire LAIF portfolio (in relation to the amortized
cost of that portfolio). The balance available for withdrawal is based on the accounting
' records maintained by LAIF, which are recorded on an amortized cost basis.
1 19
1
Amount
1
1
$ 925,481 (A)
1
Debt Service Fund
(3)
Low - Moderate Income
Housing Set -Aside
250,000
1
$ 3.032.766
' (4)
1
1
1
t
ROSEMEAD COMMUNITY DEVELOPMENT COMMISSION
Notes to the Basic Financial Statements
(Continued)
Operating Lease
The Corporation entered into a 55 -year lease agreement with the City for the use of the
Angelus Senior Housing facility for $60,000 annually, expiring June 2047. Total lease
commitments remaining are $2,220,000 for the Angelus Senior Housing facility at June
30, 2010. The Corporation also entered into a 55 -year lease agreement with the City
for use of the Garvey Senior Housing facility for $72,000 annually, expiring November
2057. Total lease commitments remaining are $3,414,000 for the Garvey Senior
Housing facility at June 30, 2010. The Corporation paid $60,000 and $72,000 in lease
payments to the City during the year ended June 30, 2010 for the Angelus and Garvey
Senior Housing facilities, respectively.
Interfund Activity
Noncurrent Interfund Receivable and Payable Balances
Under State law, the Commission is required to set aside a portion of its property tax
increment revenue for low -and moderate - income housing. The Commission has made
findings that, for the years ended June 30, 1986 through 1991, it was allowed to defer
funding of the set - aside. The set -aside amounts incurred during the fiscal years ended
June 30, 1994, 1995 and 1996 were also deferred until the fiscal year ending June 30,
2023, as provided by the Commission's adoption of the housing deficit repayment plan.
As of June 30, 2010, the accumulated set -aside amount not yet funded was
approximately $4,477,945. As required by law, the Commission devised a plan to fund
the accumulating amount.
Interfund transfers were as follows for the year ended June 30, 2010:
Transferin
Low - Moderate Income
Housing Set -Aside
Redevelopment Agency
Capital Projects Fund
Rosemead Housing
Development Corporation
Transfer Out
Amount
Redevelopment Agency
Debt Service Fund
$ 925,481 (A)
Redevelopment Agency
Debt Service Fund
1,857,285 (B)
Low - Moderate Income
Housing Set -Aside
250,000
Total
$ 3.032.766
The following describes the significant transfers in and transfers out included in the
financial statements:
(A) To record the low and moderate income housing set -aside for the year ended
June 30, 2010.
(B) To transfer remaining tax increment net of pass through payments, 20% set
aside and debt service payments to the Capital Projects Fund.
20
1
1
1
1
1
1
1
1
1
1
ROSEMEAD COMMUNITY DEVELOPMENT COMMISSION
Notes to the Basic Financial Statements
(Continued)
(5) Capital Assets
Capital asset activity for the year ended June 30,
2010 is as follows:
Balance at
Balance at
June 30, 2009
Increases Decreases
June 30, 2010
Governmental activities:
Capital assets not being
depreciated:
Land
$ 2,425,898
2,425,898
Total capital assets, not
being depreciated
2,425,898
2,425,898
Capital assets being depreciated:
Buildings and improvements
18,273,719
18,273,719
Vehicles
93,280
93,280
Furniture and office equipment
1,453.889
1,453,889
Total capital assets being
depreciated
19,820,888
19,820,888
Less accumulated depreciation for:
Buildings and improvements
(4,415,776)
(655,397)
(5,071,173)
Vehicles
(89,076)
(4,204)
(93,280)
Furniture and office equipment
(1,387,705
4( 5,747
(1,433,452
Total accumulated
depreciation
(5.892,557
(705,348)
(6,597.905
Total capital assets being
depreciated, net
13.928,331
(705,348)
13,222,983
Governmental activities
capital assets, net
$16.354.229
70 34)
15.648.881
Depreciation expense was charged entirely to the community development function
of the Commission for the year ended June 30, 2010.
21
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' ROSEMEAD COMMUNITY DEVELOPMENT COMMISSION
Notes to the Basic Financial Statements
' (Continued)
(6) Long -Term Debt
' Long -term debt consists of the following at June 30, 2010:
Balance at Balance at Due within Due Beyond
June 30, 2009 Additions Reductions June 30. 2010 One Year One Year
Governmental activities:
' Advances from City $ 2,497,920 - - 2,497,920 - 2,497,920
Tax allocation bonds,
Series 2006A 11,570,000 870,000 10,700,000 900,000 9,800,000
Tax allocation bonds,
' Series 2006B 23,865,000 - 75,000 23,790,000 75,000 23,715,000
Unamortized bond
premiums 257,424 - 19,802 237,622 19.802 217,820
838 190 344
—96A&0-2 37 225 542 994,802 36 230 740
Advances from City
In November 2007 the City of Rosemead's General Fund advanced to the Rosemead
Community Development Commission $2,497,920 at an interest rate of 5.25% to be
' paid back over 20 years. Accrued interest is payable in annual installments of
$131,141 beginning on September 28, 2008, and continuing until September 28, 2027,
at which time the remaining principal and interest shall be due in full. The amount
' outstanding at June 30, 2010 is $2,497,920.
Tax Allocation Bonds, Series 2006A
' On March 9, 2006, the Commission issued tax allocation bonds in the amount of
$14,005,000 (Series 2006A) to: (1) refund a portion of the Commission's outstanding
Series 1993A bonds and (2) to finance redevelopment activity in Redevelopment
' Project Area No.1. The bonds bear interest ranging from 3.25% to 5.00% and mature in
annual installments of $780,000 to $1,250,000 on various dates through October 1,
2022. The Commission purchased a surety bond in lieu of cash reserve in the amount
of $1,323,238. Portions of the bonds are subject to early redemption, at the option of
' the Commission, beginning October 1, 2017. Bond premiums are amortized over the
life of the bonds. The unamortized balance as of June 30, 2010 was $237,622. A
surety bond has been acquired to satisfy the reserve requirements. As of June 30,
' 2010 the outstanding balance was $10,700,000.
Tax Allocation Bonds, Series 2006B
' In December 2006, the Commission issued $24,230,000 in Project Area No. 1 Tax
Allocation Bonds. The bonds mature in amounts ranging from $70,000 to $1,430,000
with interest rates ranging from 3.25% to 4.25% through October 1, 2025. The net
' proceeds were used to refund the remaining $23,095,000 amount outstanding on the
1993 Tax Allocation Bonds. The securities were deposited in an irrevocable trust with
an escrow agent to provide for all future debt service payments on the 1993 Bonds. As
' a result, the entire 1993 Bonds are considered to be defeased and the liability for those
bonds has been removed from the government -wide financial statements.
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ROSEMEAD COMMUNITY DEVELOPMENT COMMISSION
Notes to the Basic Financial Statements
(Continued)
Long -Term Debt (Continued)
A surety bond has been acquired to satisfy the reserve requirements. As of June 30,
2010, $23,790,000 of the bonds are outstanding.
At June 30, 2010, debt service requirements to maturity for governmental activities long-
term debt are as follows:
Risk Management
The Commission is exposed to various risks of loss related to torts; thefts of, damage to
and destruction of assets; errors and omissions; and natural disasters. The Commission,
through the City, carries commercial liability insurance coverage. The Commission
carries no insurance coverage for natural disasters. Since the Commission does not
have any employees (it uses employees from the City), it is not liable for injury to
employees, workers' compensation, or employee health and accident insurance. The
City has had no reductions in insurance coverage, nor did the City have any settlements
that were in excess of insurance coverage in any of the three preceding years.
Subsequent Event
In July 2010 the Commission issued tax allocation bonds in the amount of $11,230,000.
The bonds were issued to provide funds to finance the costs of certain redevelopment
projects within the Merged Project Area including infrastructure improvements, and the
acquisition of land. Principal and interest payments are due on June 1 and December 1
each year until the bonds mature in 2023.
23
2006A Tax Allocation Bonds
2006B Tax Allocation Bonds
Year Ending June 30
Principal
Interest
Principal
Interest
2011
$ 900,000
449,856
75,000
1,035,049
2012
930,000
419,481
80,000
1,032,336
2013
965,000
386,931
80,000
1,029,536
2014
1,000,000
353,156
85,000
1,026,649
2015
1,035,000
313,156
85,000
1,023,674
2016 -2020
4,965,000
768,155
1,500,000
5,046,903
2021 -2023
905,000
75,694
6,360,000
4,181,211
2025 -2029
-
-
7,850,000
2,646,266
2030 -2034
-
7,675,000
701,955
X10.700.000
2.766 429
23 790.000
17,723 579
Risk Management
The Commission is exposed to various risks of loss related to torts; thefts of, damage to
and destruction of assets; errors and omissions; and natural disasters. The Commission,
through the City, carries commercial liability insurance coverage. The Commission
carries no insurance coverage for natural disasters. Since the Commission does not
have any employees (it uses employees from the City), it is not liable for injury to
employees, workers' compensation, or employee health and accident insurance. The
City has had no reductions in insurance coverage, nor did the City have any settlements
that were in excess of insurance coverage in any of the three preceding years.
Subsequent Event
In July 2010 the Commission issued tax allocation bonds in the amount of $11,230,000.
The bonds were issued to provide funds to finance the costs of certain redevelopment
projects within the Merged Project Area including infrastructure improvements, and the
acquisition of land. Principal and interest payments are due on June 1 and December 1
each year until the bonds mature in 2023.
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ROSEMEAD COMMUNITY DEVELOPMENT COMMISSION
Notes to Required Supplementary Information
Fiscal Year Ended June 30, 2010
(1) Budgetary Information
Annual budgets are adopted on a basis consistent with accounting principles generally
accepted in the United States of America for the governmental fund. All annual
appropriations lapse at fiscal year end.
On or before the last day in March of each year, the Commission submits a request for
appropriations to the City Manager so that a budget may be prepared. Before the first
Thursday of June 30, the proposed budget is presented to the Commission's governing
board for review. The governing board holds public hearings and a final budget must be
prepared and adopted no later than June 30.
The appropriated budget is prepared by fund, function and department. The
Commission's department heads, with approval of the Finance Director and City
Manager, may make transfers of appropriations within a department and between
departments within a fund. Transfers of appropriations between funds must be approved
by the governing board. The legal level of budgetary control (i.e., the level at which
expenditures may not legally exceed appropriations) is the fund level. The governing
board made several supplemental budgetary appropriations throughout the year. The
supplemental budgetary appropriations made in the governmental funds are detailed in
the required supplementary information.
Encumbrance accounting is employed in the governmental funds. Encumbrances (e.g.,
purchase orders, contracts) outstanding at each year end are reported as reservations of
fund balances and do not constitute expenditures or liabilities because the commitments
will be re- appropriated and honored during the subsequent year.
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' ROSEMEAD COMMUNITY DEVELOPMENT COMMISSION
Low- Moderate Income Housing Set -Aside
' Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual
Fiscal Year ended June 30, 2010
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Revenues:
Investment income
Total revenues
Expenditures:
Current:
Community development
Total expenditures
Excess (deficiency) of
revenues over
(under) expenditures
Other financing sources (uses):
Transfers in
Transfers out
Total other financing
sources (uses)
Change in fund balances
Fund balance at beginning of year
Fund balance at end of year
Variance
Final Positive
Budget Actual (Negative)
$ 10,308 10,308
10,308 10,308
354,339 189,359 164,980
354,339 189,359 164,980
(354,339) (179,051) 175,288
925,481 925,481
(250,000) (250,000) -
(250,000)
675,481 925,481
(604,339)
496,430 1,100,769
5,966,004
5,966,004
$ 5,361,665
6,462,434 1,100,769
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' ROSEMEAD COMMUNITY DEVELOPMENT COMMISSION
Rosemead Housing Development Corporation
' Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual
Fiscal Year ended June 30, 2010
1
'
Revenues:
(88,900)
Intergovernmental
140,183
Interest income
'
Total
revenues
Expenditures:
'
Current:
General government
'
Total expenditures
Excess (deficiency) of
'
revenues over
(under) expenditures
'
Other financing sources (uses):
Transfers in
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Total other financing
sources (uses)
Change in fund balances
Fund balance at beginning of year
Fund balance at end of year
Variance
Final Positive
Budget Actual (Negative
$,422,300 420,006 (2,294)
66 66
422,300 420,072 (2,228)
761,200 731,839 29,361
761,200 731,839 29,361
(338,900) (311,767) 27,133
250,000 250,000
250,000
250,000 -
(88,900)
(61,767) 27,133
140,183
140,183 -
$ 51,283
78,416 27,133
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ROSEMEAD COMMUNITY DEVELOPMENT COMMISSION
Computation of Low /Moderate Housing Fund - Excess Surplus
June 30, 2010
Fund Balance - June 30, 2010 $ 6,462,434
Less Unavailable Amounts:
Advances to Other Funds (4,477,945)
Available Low /Moderate Income Housing Funds 1,984,489
Limitation (Greater of $1,000,000 or Four Years Set - Aside):
Set -aside for last four years
2009-2010 925,481
2008-2009 928,000
2007-2008 985,195
2006-2007 1,019,082
Total set -aside for last four years 3,857,758
Base limitation 1,000,000
Greater Amount 3,857,758
Computed Excess Surplus - June 30, 2010 $
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Mayer Hoffman McCann P.C.
An Independent CPA Firm
2301 Dupont Drive, Suite 200
Irvine, California 92612
949- 474 -2020 ph
949 - 263 -5520 fx
www.mhm- pc.conn
Board of Directors
Community Development Commission of the City of Rosemead
Rosemead, California
REPORT ON COMPLIANCE AND OTHER MATTERS AND ON INTERNAL CONTROL OVER
FINANCIAL REPORTING BASED ON AN AUDIT OF FINANCIAL STATEMENTS
PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS
We have audited the financial statements of the Community Development Commission of the
City of Rosemead (Commission), as of and for the year ended June 30, 2010, which collectively
comprise the Commission's basic financial statements and have issued our report thereon
dated December 20, 2010. We conducted our audit in accordance with auditing standards
generally accepted in the United States of America and the standards applicable to financial
audits contained in Government Auditing Standards, issued by the Comptroller General of the
United States.
Compliance and Other Matters
As part of obtaining reasonable assurance about whether the Commission's financial
statements are free of material misstatement, we performed tests of its compliance with certain
provisions of laws, regulations, contracts and grant agreements, noncompliance with which
could have a direct and material effect on the determination of financial statement amounts.
Such provisions included those provisions of laws and regulations identified in the Guidelines for
Comptroller Audits of California Redevelopment Agencies, issued by the State Controller and as
interpreted in the Suggested Auditing Procedures for Accomplishing Compliance Audits of
California Redevelopment Agencies, issued by the Governmental Accounting and Auditing
Committee of the California Society of Certified Public Accountants. However, providing an
opinion on compliance with those provisions was not an objective of our audit and, accordingly,
we do not express such an opinion.
The result of our tests disclosed no instances of noncompliance or other matters that are
required to be reported under Government Auditing Standards. However, we noted an other
matter involving compliance with respect to the items tested, the Commission complied, in all
material respects, with the provisions referred to in the preceding paragraph, except for the
instance that is described as follows: Health & Safety Code §33080.1 requires Agencies to
annually report on their Low and Moderate Income Housing Fund and housing activities. During
our review of this annual report it was noted that certain amounts being reported for fiscal year
ended June 30, 2009 materially did not agree to the Commissions' audited financial statements.
29
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' Board of Directors
Community Development Commission of the City of Rosemead
Rosemead, California
' Page Two
' Internal Control Over Financial Reporting
In planning and performing our audit, we considered the Commission's internal control over
' financial reporting as a basis for designing our auditing procedures for the purpose of
expressing our opinions on the financial statements, but not for the purpose of expressing an
opinion on the effectiveness of the Commission's internal control over financial reporting.
Accordingly, we do not express an opinion on the effectiveness of the Commission's internal
' control over financial reporting.
Our consideration of internal control was for the limited purpose described in the preceding
' paragraph and was not designed to identify all deficiencies in internal control that might be
deficiencies, significant deficiencies, or material weaknesses and therefore there can be no
assurance that all such deficiencies have been identified.
A deficiency in internal control exists when the design or operation of a control does not allow
management or employees, in the normal course of performing their assigned functions, to
prevent, or detect and correct misstatements on a timely basis. A material weakness is a
' deficiency, or combination of deficiencies, in internal control, such that there is a reasonable
possibility that a material misstatement of the entity's financial statements will not be prevented,
or detected and corrected on a timely basis. We did not identify any deficiencies in internal
' control that we consider to be material weaknesses.
A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is
' less severe than a material weakness, yet important enough to merit attention by those charged
with governance. We consider the items that have been described in the accompanying
schedule of findings and recommendations to be significant deficiencies in internal control over
' financial reporting.
The City's written responses to the matters communicated herein have not subjected to the
auditing procedures applied in the audit of the financial statements and, accordingly, we express
' no opinion on it.
This report is intended solely for the information and use of the Board of Directors,
management, and the State Controller and is not intended to be and should not be used by
anyone other than these specified parties.
IVct4gnn /_? 1 (7 .
Irvine, California
' December 20, 2010
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' ROSEMEAD COMMUNITY DEVELOPMENT COMMISSION
' Schedule of Findings and Recommendations
Fiscal Year Ended June 30, 2010
' (2010 -01) Establishment of System Access Rights
During our review of the internal control structure of the City, we noted that all finance
personnel have the ability to perform the following functions:
• Establish vendors and process invoices for payment
1 • Make changes to the payroll master file (adding and deleting employees, making
pay rate changes, etc.)
• Process payroll
' • Post adjustments to the general ledger
Recommendation
' We recommend that the City restrict system access rights for each individual in the
Finance Department with respect to that individual's capability to process invoices, make
changes to payroll and post adjustments to the general ledger, in order to adequately
' safeguard City assets.
Management's Corrective Actions Planned
' In January 2011 the City will begin implementing a new finance software system.
Defining access rights, along with work -flow authorizations is an integral part of the
overall finance system implementation; it has been in the planning stage for the past
' year and is a high priority with staff. Full implementation, including the auditor's
recommendations, is expected to be complete by July 2011.
' (2010 -02) Adjustments Detected Through the Audit Process
Auditing standards require that the auditor include in the report of deficiencies any
' material adjustments detected by the audit process. For the year ended June 30, 2010,
material adjustments detected by the audit process were as follows:
t • An adjustment to properly record a new capital lease agreement entered into by
the City during the current year.
' • An adjustment to remove an interfund borrowing established between two special
revenue funds that had not been approved by the City Council.
' • An adjustment to record construction in progress for the year ended June 30,
2010.
• An adjustment to correct accumulated depreciation.
' • An adjustment to move CDBG activity recorded in a capital projects fund into the
City's CDBG fund.
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' ROSEMEAD COMMUNITY DEVELOPMENT COMMISSION
' Schedule of Findings and Recommendations
(Continued)
1
(2010 -02) Adjustments Detected Through the Audit Process, (Continued)
Recommendation
' We recommend that the City develop and implement procedures to assist Finance
Department staff in the process of closing the accounting records at the end of each
fiscal year to ensure all material accounting entries have been prepared prior to the
' auditors conducting the audit. These procedures could involve checklists of processes
to be completed and accounts to be reviewed and /or analyzed.
Management's Corrective Actions Planned
' Staff will increase the comprehensiveness of existing checklists and exercise greater
' diligence at following them. Errors to accumulated depreciation will be resolved by the
use of the capital asset module in the new finance system.
' (2010 -03) Need for Improved Accounting Over Capital Assets
During our testwork over the City's capital asset records for the year ended June 30,
' 2010, the following discrepancies were noted:
Construction in progress in the amount of $383,536 was not recorded by the City
in the capital asset spreadsheet. This amount reflects capital projects that were
in progress and not yet completed as of June 30, 2010.
• Additions to the City's infrastructure in the amount of $125,670 were not recorded
' by the City in the capital asset spreadsheet. This amount represents capital
projects that had been completed during fiscal year ended June 30, 2010, but
had not been recorded by the City.
' • The City's schedule to track accumulated depreciation contained several errors
within the formulas that included over depreciating City assets.
Recommendation
' We recommend that the Finance Department review all capital outlay expenditures each
year to determine if any of the projects should be capitalized.
' Management's Corrective Actions Planned
The City's new financial software, which will be implemented in January 2011, includes a
capital asset module. Capital assets are flagged as a capital asset at the time they are
' purchased and that information flows to the capital asset module. This reduces the
likelihood of not posting a capital asset in the capital assets module. Further, proven
depreciation formulas are hardcoded into the capital asset module and will be tested for
' accuracy at the time of implementation.
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ROSEMEAD COMMUNITY DEVELOPMENT COMMISSION
Schedule of Findings and Recommendations
(Continued)
(2010 -04) Community Development Commission Allocations
Total Community Development Commission (CDC) expenditures are approximately 20%
of total City expenditures. However, administrative salaries charged for certain
individuals are up to 55% of those individual's total salary. The City provided explanation
of duties performed to justify these charges; however these allocations were based on
estimates of time spent working on CDC activities, not actual time spent.
Recommendation
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Health & Safety Code §33334.6 states "The Agency shall determine annually that the
planning and administrative expenses are necessary for the production, improvement or
preservation of low -and moderate - income housing." The code also says "Planning and
general administrative costs which may be paid with moneys from the Low and
Moderate Income Housing Fund are those expenses incurred by the Agency which are
directly related to the programs and activities authorized under the Code."
We recommend that the City personnel perform
employees that charge time directly to the CDC
employees to track their time on timesheets and
time incurred.
Management's Corrective Actions Planned
a time study of those administrative
to support future charges or require
record direct charges based on actual
During the next budget preparation cycle staff will take into consideration the time
worked to be allocated to the CDC. Also, included with the new financial software is an
employee self service feature which will permit staff to input hours worked to the
appropriate cost center.
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1 ROSEMEAD HOUSING DEVELOPMENT
CORPORATION
FINANCIAL AND COMPLIANCE REPORT
1 Fiscal Year Ended June 30, 2010
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ROSEMEAD HOUSING DEVELOPMENT CORPORATION
FINANCIAL AND COMPLIANCE REPORT
Fiscal Year Ended June 30, 2010
TABLE OF CONTENTS
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INDEPENDENT AUDITORS' REPORT
FINANCIAL STATEMENTS
Government -wide Financial Statements
Statement of Net Assets
Statement of Activities
Fund Financial Statements
Balance Sheet
Reconciliation of the Fund Balance of Governmental Funds
to the Statement of Net Assets
Statement of Revenues, Expenditures and Changes in Fund
Balances
Reconciliation of the Statement of Revenues, Expenditures and Changes
in Fund Balances to the Statement of Activities
Notes to the Basic Financial Statements
REQUIRED SUPPLEMENTARY INFORMATION
Notes to Required Supplementary Information
Schedule of Revenues, Expenditures and Changes in Fund
Balances - Budget and Actual
Report on Compliance and other Matters and on Internal Control over
Financial Reporting Based on an Audit of Financial Statements
Performed in Accordance with Government Auditing Standards
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Mayer Hoffman McCann P.C.
An Independent CPA Firm
2301 Dupont Drive, Suite 200
Irvine, California 92612
949 - 474 -2020 ph
949- 263 -5520 fx
www.mhm- pc.com
' Rosemead Housing Development Corporation
Board of Directors
City of Rosemead, California
INDEPENDENT AUDITORS' REPORT
We have audited the accompanying financial statements of the governmental activities and the
major fund of the Rosemead Housing Development Corporation (the Corporation), a component
unit of the Community Development Commission of the City of Rosemead, California, as of and
for the year ended June 30, 2010, which collectively comprise the Corporation's basic financial
' statements as listed in the table of contents. These financial statements are the responsibility of
the Corporation's management. Our responsibility is to express opinions on these financial
statements based on our audit.
' We conducted our audit in accordance with auditing standards generally accepted in the United
States of America and the standards applicable to financial audits contained in 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 financial statements referred to above present fairly, in all material respects,
the respective financial position of the governmental activities and the major fund of the
' Corporation as of June 30, 2010, and the respective changes in financial position thereof for the
year then ended, in conformity with accounting principles generally accepted in the United
States of America.
' The Corporation has not presented management's discussion and analysis which according to
accounting principles generally accepted in the United States of America is necessary to
supplement, although not required to be part of, the basic financial statements.
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Rosemead Housing Development Corporation
Board of Directors
Page Two
The information identified in the accompanying table of contents as required supplementary
information is not a required part of the basic financial statements but is supplementary
information required by accounting principles generally accepted in the United States of
America. We have applied certain limited procedures, which consisted principally of inquiries of
management regarding the methods of measurement and presentation of the required
supplementary information. However, we did not audit the information and express no opinion
on it_
In accordance with Government Auditing Standards, we have also issued our report dated
December 20, 2010 on our consideration of the Corporation's internal control over financial
reporting and our tests of its compliance with certain provisions of laws, regulations, contracts,
grant agreements and other matters. The purpose of that report is to describe the scope of our
testing of internal control over financial reporting and compliance and the results of that testing,
and not to provide an opinion on the internal control over financial reporting or on compliance.
That report is an integral part of an audit performed in accordance with Government Auditing
Standards and should be considered in assessing the results of our audit.
/itAYZA 1Ak47)1,a,1 Re 1 "'a4.07 /*
Irvine, California
December 20, 2010
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ROSEMEAD HOUSING DEVELOPMENT CORPORATION
Statement of Net Assets
June 30, 2010
Assets
Cash and investments (note 2)
Receivables
Capital assets, net (note 4)
Total assets
Liabilities and Net Assets
Liabilities:
Accounts payable and accrued liabilities
Refundable deposits
Total liabilities
Net assets:
Invested in capital assets
Unrestricted
Total net assets
See accompanying notes to the basic financial statements.
3
Governmental
Activities
$ 101,396
13,777
8,888,342
9,003,515
577
36.180
757
8,888,342
78,416
$ 8,966,758
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Governmental activities:
General government
Total governmental
activities
ROSEMEAD HOUSING DEVELOPMENT CORPORATION
Statement of Activities
Fiscal Year Ended June 30, 2010
Program Revenues Net (Expense)
Operating Capital Revenue and
Charges for Contributions Contributions Changes in
Expenses Services and Grants and Grants Net Assets
$ 952,694 420,006 250,000
(282,688)
$ 952,694 420,006 250,000 (282,688)
General revenues:
Investment income 66
Total general revenues 66
Change in net assets (282.622)
Net assets at beginning of year, as restated (note 7) 9,249,380
Net assets at end of year $ 8,966,758
j
See accompanying notes to the basic financial statements.
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ROSEMEAD HOUSING DEVELOPMENT CORPORATION
Governmental Funds
Balance Sheet
June 30, 2010
See accompanying notes to the basic financial statements.
5
General
Fund
Assets:
Cash and investments
$
101,396
Other receivables
13,777
Total assets
$
115,173
Liabilities and Fund Balance
Liabilities:
Accounts payable and accrued liabilities
$
577
Refundable deposits
36,180
Total liabilities
36,757
Fund balance, unreserved
78,416
Total liabilities and fund balance
$
115,173
See accompanying notes to the basic financial statements.
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ROSEMEAD HOUSING DEVELOPMENT CORPORATION
Governmental Funds
Reconciliation of the Balance Sheet of Governmental Funds
to the Statement of Net Assets
June 30, 2010
Fund balances of governmental funds
Amounts reported for governmental activities in the statement of
net assets are different because:
Capital assets, net of depreciation, have not been included
as financial resources in governmental fund activity.
Capital assets
Accumulated depreciation
Net assets of governmental activities
See accompanying notes to the basic financial statements.
6
$ 78,416
11,171,141
(2,282,799)
$ 8,966,758
1
ROSEMEAD HOUSING DEVELOPMENT CORPORATION
Statement of Revenues, Expenditures and Changes in Fund Balances
Governmental Funds
Fiscal Year Ended June 30, 2010
General
Fund
Revenues:
Rental income $ 420,006
Investment income 66
Total revenues 420,072
Expenditures:
Operating 380,239
Administrative services paid to City of Rosemead 219,600
Facility rent paid to City of Rosemead 132,000
Total expenditures
731,839
Excess (deficiency) of revenues
over(under)expenditures
(311,767)
Other financing sources (uses):
Transfers from City of Rosemead
250,000
Total other financing sources (uses)
250,000
Change in fund balance
(61,767)
Fund balance at beginning of year
140,183
Fund balance at end of year
$ 78,416
See accompanying notes to the basic financial statements.
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Governmental Funds
Reconciliation of the Statement of Revenues, Expenditures,
1
and Changes in Fund Balances of Governmental Funds
to the Statement of Activities
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Fiscal Year Ended June 30, 2010
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Net changes in fund balances of governmental funds
Amounts reported for governmental activities in the statement of
activities is different because:
Depreciation expense on capital assets is reported in the government -wide
statement of activities and changes in net assets, but they do not require the
use of current financial resources. Therefore, depreciation expense is not
reported as expenditures in the governmental fund.
Depreciation expense
Change in net assets of governmental activities
See accompanying notes to the basic financial statements.
H
$ (61,767)
(220,855)
$ (282,622)
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ROSEMEAD HOUSING DEVELOPMENT CORPORATION
Notes to the Basic Financial Statements
Fiscal Year Ended June 30, 2010
Summary of Significant Accounting Policies
(a) Reporting Entity
The Rosemead Housing Development Corporation (the Corporation) is a
nonprofit corporation whose purpose is to provide assistance to the Rosemead
Community Development Commission (the Commission) to account for the
construction, financing and operations of low- and moderate - income housing for
the benefit of the City of Rosemead (the City). The Corporation currently
maintains the Angelus and Garvey Senior Housing facilities. The Corporation is
exempt from income taxes under Section 501(c)(3) of the Internal Revenue Code
(IRC) and applicable state statutes.
Governmental Accounting Standards Board (GASB) Statement No. 14, The
Financial Reporting Entity, defines the reporting entity as the primary government
and those component units for which the primary government is financially
accountable. Financial accountability is defined as appointment of a voting
majority of the component unit's Board and either (a) the primary government
has the ability to impose its will or (b) the possibility that the component unit will
provide a financial benefit to or impose a financial burden on the primary
government. Since the Board of Directors of the Commission and the Council
members also serve as the Board of Directors of the Corporation, the
Commission and the City, in effect, have the ability to influence and control
operations. Therefore, the Commission has oversight responsibility for the
Corporation. Accordingly, in applying the criteria of GASB Statement No. 14, the
financial statements of the Corporation are included in the Commission's and the
City's financial reports.
The Corporation has the same fiscal year as the City and the Commission.
These financial statements contain information for the Corporation only. The
City's and the Commission's financial reports may be obtained by contacting the
Financial Department of the City.
(b) Basis of Accounting and Measurement Focus
The basic financial statements of the Corporation are composed of the following:
• Government -wide financial statements
• Fund financial statements
• Notes to the basic financial statements
1
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(1)
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1
ROSEMEAD HOUSING DEVELOPMENT CORPORATION
Notes to the Basic Financial Statements
(Continued)
Summary of Significant Accounting Policies, (Continued)
(b) Basis of Accounting and Measurement Focus, (Continued)
Government -wide Financial Statements
Government -wide financial statements display information about the reporting
government as a whole, except for its fiduciary activities. These statements
include separate columns for the governmental and business -type activities of
the primary government (including its blended component units), as well as its
discreetly presented component units. The Corporation has no business -type
activities or discretely presented component units. Eliminations have been made
in the Statement of Activities so that certain allocated expenses are recorded
only once (by the function to which they were allocated), However, general
government expenses have not been allocated as indirect expenses to the
various functions of the Commission.
Government -wide financial statements are presented using the economic
resources measurement focus and the accrual basis of accounting. Under the
economic resources measurement focus, all (both current and long -term)
economic resources and obligations of the reporting government are reported in
the government -wide financial statements. Basis of accounting refers to when
revenues and expenditures are recognized in the accounts and reported in the
financial statements. Under the accrual basis of accounting, revenues, expenses,
gains, losses, assets, and liabilities resulting from exchange and exchange -like
transactions are recognized when the exchange takes place. Revenues,
expenses, gains, losses, assets, and liabilities resulting from nonexchange
transaction are recognized in accordance with the requirements of GASB
Statement No. 33.
Program revenues include charges for services and payments made by parties
outside of the reporting government's citizenry if that money is restricted to a
particular program. Program revenues are netted with program expenses in the
statement of activities to present the net cost of each program.
Amounts paid to acquire capital assets are capitalized as assets in the
government -wide financial statements, rather than reported as expenditure.
Proceeds of long -term debt are recorded as a liability in the government -wide
financial statements, rather than as other financing source, Amounts paid to
reduce long -term indebtedness of the reporting government are reported as a
reduction of the related liability, rather than as an expenditure.
10
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1
ROSEMEAD HOUSING DEVELOPMENT CORPORATION
Notes to the Basic Financial Statements
(Continued)
(1) Summary of Significant Accounting Policies, (Continued)
(b) Basis of Accounting and Measurement Focus (Continued)
Fund Financial Statements
The underlying accounting system of the Corporation is organized and operated
on the basis of separate funds, each of which is considered to be a separate
accounting entity. The operations of each fund are accounted for with a separate
set of self - balancing accounts that comprise its assets, liabilities, fund equity,
revenues and expenditures or expenses, as appropriate. Governmental
resources are allocated to and accounted for in individual funds based upon the
purposes for which they are to be spent and the means by which spending
activities are controlled.
Fund financial statements for the primary government's governmental,
proprietary, and fiduciary funds are presented after the government -wide
financial statements. These statements display information about major funds
individually and nonmajor funds in the aggregate for governmental and enterprise
funds. Fiduciary statements include financial information for fiduciary funds and
similar component units. Fiduciary funds primarily represent assets held by the
Corporation in a custodial capacity for other individuals or organizations. The
Corporation has no enterprise funds or fiduciary funds.
' Governmental Funds
In the fund financial statements, governmental funds and agency funds are
presented using the modified - accrual basis of accounting. Their revenues are
recognized when they become measurable and available as net current assets.
Measurable means that the amounts can be estimated, or otherwise determined.
' Available means that the amounts were collected during the reporting period or
soon enough thereafter to be available to finance the expenditures accrued for
the reporting period. The Corporation uses a sixty day availability period.
1
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(1)
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ROSEMEAD HOUSING DEVELOPMENT CORPORATION
Notes to the Basic Financial Statements
(Continued)
Summary of Significant Accounting Policies, (Continued)
(b) Basis of Accounting and Measurement Focus, (Continued)
Governmental Funds, (Continued)
Revenue recognition is subject to the measurable and available criteria for the
governmental funds in the fund financial statements. Exchange transactions are
recognized as revenues in the period in which they are earned (i.e., the related
goods or services are provided). Locally imposed derived tax revenues are
recognized as revenues in the period in which the underlying exchange
transaction upon which they are based takes place. Imposed non - exchange
transactions are recognized as revenues in the period for which they were
imposed. If the period of use is not specified, they are recognized as revenues
when an enforceable legal claim to the revenues arises or when they are
received, whichever occurs first. Government- mandated and voluntary non -
exchange transactions are recognized as revenues when all applicable eligibility
requirements have been met.
In the fund financial statements, governmental funds are presented using the
current financial resources measurement focus. This means that only current
assets and current liabilities are generally included on their balance sheets. The
reported fund balance (net current assets) is considered to be a measure of
'available spendable resources." Governmental fund operating statements
present increases (revenues and other financing sources) and decreases
(expenditures and other financing uses) in net current assets. Accordingly, they
are said to present a summary of sources and uses of "available spendable
resources" during a period.
Non - current portions of long -term receivables due to governmental funds are
reported on their balance sheets in spite of their spending measurement focus.
Special reporting treatments are used to indicate, however, that they should not
be considered "available spendable resources," since they do not represent net
current assets. Recognition of governmental fund type revenues represented by
noncurrent receivables are deferred until they become current receivables.
Noncurrent portions of other long -term receivables are offset by fund balance
reserve accounts.
Because of their spending measurement focus, expenditure recognition for
governmental fund types excludes amounts represented by noncurrent liabilities.
Since they do not affect net current assets, such long -term amounts are not
recognized as governmental fund type expenditures or fund liabilities.
12
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ROSEMEAD HOUSING DEVELOPMENT CORPORATION
Notes to the Basic Financial Statements
(Continued)
(1) Summary of Significant Accounting Policies, (Continued)
(b) Basis of Accounting and Measurement Focus, (Continued)
Governmental Funds, (Continued)
Amounts expended to acquire capital assets are recorded as expenditures in the
year that resources were expended, rather than as fund assets. The proceeds of
long -term debt are recorded as an other financing source rather than as a fund
liability. Amounts paid to reduce long -term indebtedness are reported as fund
expenditures.
When both restricted and unrestricted resources are combined in a fund,
expenses are considered to be paid first from restricted resources, and then from
unrestricted resources.
(c) Maior Fund
The Corporation reports the General Fund as its only major fund.
(d) Cash and Investments
Cash includes amounts in demand and time deposits. Investments, if any, are
reported in the accompanying balance sheet at fair value, except for certain
money market and investment contracts that are reported at cost because they
are not transferable and they have terms that are not affected by changes in
market interest rates.
Changes in fair value that occur during a fiscal year are recognized as income
from property and investments reported for that fiscal year. Income from property
and investments includes interest earnings; changes in fair value; any gains or
losses realized upon the liquidation, maturity or sale of investments; property
rentals; and the sale of City -owned property.
' (e) Capital Assets
' Capital assets, which include buildings and improvements, and furniture and
equipment, are reported as part of governmental activities in the government -
wide financial statements. Capital assets are defined by the Corporation as
assets with an initial, individual cost of more than $500 and an estimated useful
' life in excess of one year. Such assets are recorded at historical cost, or
estimated historical cost if purchased or constructed. Donated capital assets are
recorded at estimated fair market value at the date of donation.
1
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' ROSEMEAD HOUSING DEVELOPMENT CORPORATION
Notes to the Basic Financial Statements
(Continued)
(1) Summary of Significant Accounting Policies (Continued)
'
(e)
Capital Assets (Continued)
The cost of normal maintenance and repairs that do not add to the value of an
extend an asset's useful life are not capitalized.
asset or materially
Costs associated with construction in progress are recorded in their respective
'
capital assets category upon approval by the Corporation's governing board,
which approximates the completion date.
'
Depreciation is charged to operations using the straight -line method based on
the estimated useful life of an asset. The estimated useful lives of depreciable
assets are as follows:
'
Buildings 50 years
Improvements 15 years
'
Furniture and equipment 7 years
(f)
Income Taxes
'
The Corporation is exempt from federal income taxes under Section 501(c)(3) of
the IRC and a similar exemption under state law.
'
(g)
Fund Equity
In the fund financial statements, governmental funds report reservations of fund
balances for amounts that are not available for appropriation or are legally
'
restricted by outside parties for use for a specific purpose. Designations of fund
balances represent tentative management plans and are subject to change.
Rental Income
(h)
The management company collects rent payments on the first day of the month
'
and recognizes revenue in the month due. Monthly rental income per unit ranges
from $250 to $450 and is approved by the annual budget.
'
(i)
Use of Estimates
The preparation of financial statements in conformity with generally accepted
'
accounting principles requires management to make estimates and assumptions
that affect certain reported amounts and disclosures. Accordingly, actual results
could differ from those estimates.
14
' ROSEMEAD HOUSING DEVELOPMENT CORPORATION
Notes to the Basic Financial Statements
(Continued)
(2) Cash and Investments
Cash and investments at June 30, 2010 consisted of deposits with financial institutions.
The carrying amount of the Corporation's deposits was $101,396.
' Custodial Credit Risk
' Custodial credit risk for deposits is the risk that, in event of the failure of a depository
financial institution, a government will not be able to recover its deposits or will not be
able to recover collateral securities that are in the possession of an outside party. The
Corporation maintains its bank accounts at financial institutions that are collateralized
with securities held by the pledging financial institution, or by its Trust Department or
agent, but not in the Corporation's name. The primary difference between the carrying
amount and the bank balance are deposits in transit and outstanding checks. In
' accordance with state statutes, the Corporation maintains deposits at those depository
institutions insured by the FDIC. The California Government Code (the 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 pledge 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 a corporation's total
deposits. As of June 30, 2010, the Corporation had no deposits with financial institutions
in excess of federal depository insurance limits.
' (3) Reimbursement Agreements and Related -party Transactions
The' Corporation has entered into a reimbursement agreement with the City for the
' Corporation's administrative services. The Corporation paid $219,600 for administrative
services to the City during the year ended June 30, 2010. The Corporation is funded, in
part, by advances from the Commission.
The Corporation has also entered into a 55 -year lease agreement with the City for the
Angelus Senior Housing facility at $60,000 annually, expiring June 2047. Total lease
' commitments remaining are $2,220,000 for the Angelus Senior Housing facility at June
30, 2010. The Corporation has also entered into a 55 -year lease agreement with the City
for the Garvey Senior Housing facility at $72,000 annually, expiring November 2057.
' Total lease commitments remaining are $3,414,000 for the Garvey Senior Housing
facility at June 30, 2010. The Corporation paid $60,000 and $72,000 in lease payments
to the City during the year ended June 30, 2010 for the Angelus and Garvey Senior
Housing facilities, respectively.
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ROSEMEAD HOUSING DEVELOPMENT CORPORATION
Notes to the Basic Financial Statements
I 1
0
1
(4) Capital Assets
(Continued)
During the year ended June 30, 2010, the changes in capital assets were as follows:
Governmental activities:
Capital assets being depreciated:
Buildings and improvements
Furniture and equipment
Total capital assets being
depreciated
Less accumulated depreciation for:
Buildings and improvements
Furniture and equipment
Total accumulated
depreciation
Total governmental activities
capital assets, net
Balance Balance
June 30, 2009' Additions Deletions June 30, 2010
$11,042,597
128,544
11,042,597
128,544
11,171,141
(1,933,403) (220,852)
(128,541 (3
11,171,141
(2,154,255)
(128,544
(2,061,944 22( 0,855 (2,282,799)
$ 9109197 22� $2
Depreciation expense is allocated to the general government function in the statement of
activities.
`The beginning balance of capital assets has been restated. See note 7.
(5) Risk Management
The Corporation is exposed to various risks of loss related to torts; thefts of, damage to
and destruction of assets; errors and omissions; and natural disasters. The Corporation,
through the City, carries commercial liability insurance coverage. The Corporation
carries no insurance coverage for natural disasters. Since the Corporation does not have
any employees (it uses employees from the City), it is not liable for injury to employees,
workers' compensation, or employee health and accident insurance. The City has had
no reduction in insurance coverage, nor did the City have any settlements that were in
excess of insurance coverage in any of the three preceding years.
(6) Property Management and Operations
' The Corporation has two agreements with a management company, dated July 1994
and April 2002, to operate the development housing. These agreements are
automatically renewed for successive periods of one year, unless terminated by the
Corporation. The management company is responsible for collecting rents and receipts,
employing an on -site manager and maintaining financial records. Total fees paid to the
management company were $25,092 for the Angelus Senior Housing facility and
$35,424 for the Garvey Senior Housing facility during fiscal year ended June 30, 2010.
1
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ROSEMEAD HOUSING DEVELOPMENT CORPORATION
Notes to the Basic Financial Statements
(Continued)
(7) Restatement of Net Assets
During fiscal year 2009 -2010, net assets were restated to record accumulated
depreciation to capital assets that had not been previously recorded by the Corporation.
The following schedule summarizes the effects of the prior period adjustment to the
Government -wide Statements.
Net assets at beginning of
year, as previously reported $9,400,835
Adjustment to record accumulated
depreciation that had not been
previously recorded by the
Corporation (151,455
Fund balance at beginning of
year, as restated $9 249 380
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Required Supplementary Information
1
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ROSEMEAD HOUSING DEVELOPMENT CORPORATION
Notes to Required Supplementary Information
Fiscal Year Ended June 30, 2010
Budgetary Information
Annual budgets are adopted on a basis consistent with accounting principles generally
accepted in the United States of America for the governmental fund. All annual
appropriations lapse at fiscal year end.
On or before the last day in March of each year, all agencies of the government submit
requests for appropriations to the government's manager so that a budget may be
prepared. Before the first Thursday of June, the proposed budget is presented to the
Corporation's governing board for review. The governing board holds public hearings
and a final budget must be prepared and adopted no later than June 30.
The appropriated budget is prepared by fund, function and department. The
Corporation's department heads, with approval of the Finance Director and City
Manager, may make transfers of appropriations within a department and between
departments within a fund. Transfers of appropriations between funds must be approved
by the governing board. The legal level of budgetary control (i.e., the level at which
expenditures may not legally exceed appropriations) is the fund level.
Encumbrance accounting is employed in governmental funds, encumbrances (e.g.,
purchase orders, contracts) outstanding at year end are reported as reservations of fund
balances and do not constitute expenditures or liabilities because the commitments will
be re- appropriated and honored during the subsequent year.
18
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' ROSEMEAD HOUSING DEVELOPMENT CORPORATION
Rosemead Housing Development Corporation
' Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual
Fiscal Year Ended June 30, 2010
1
Revenues:
Rental income
Investment income
Total revenues
' Expenditures:
Current:
' Operating
Administrative services paid to City of Rosemead
Facility rent paid to City of Rosemead
' Total expenditures
Excess (deficiency) of revenues over
' (under) expenditures
Other financing sources (uses):
Transfers from Rosemead Community
' Development Commission
Total other financing
' sources (uses)
Change in fund balance
' Fund balance at beginning of year
Fund balance at end of year
1
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Final
Budget
$ 422,300
422,300
409,600
219,600
132,000
761,200
(338,900)
Variance -
Positive
Actual (Negative)
420,006 (2,294)
66 66
420,072 (2,228)
380,239
219,600
132,000
731,839
29,361
29,361
(311,767)
27,133
250,000 250,000
250,000
(88,900)
140,183
$ 51,283
250,000
(61, 767)
140,183
78,416
27,133
27,133
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Mayer Hoffman McCann P.C.
An Independent CPA Firm
2301 Dupont Drive, Suite 200
Irvine, California 92612
949 - 474 -2020 ph
949 - 263 -5520 fx
www.mhm - pc.com
REPORT ON COMPLIANCE AND OTHER MATTERS AND ON INTERNAL CONTROL
OVER FINANCIAL REPORTING BASED ON AN AUDIT OF FINANCIAL STATEMENTS
PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS
Board of Directors
Rosemead Housing Development Corporation
We have audited the financial statements of the governmental activities and the governmental
fund of the Rosemead Housing Development Corporation (the Corporation), a component unit
of the Community Development Commission of the City of Rosemead, California, as of and for
the year ended June 30, 2010, which collectively comprise the Corporation's basic financial
statements and have issued our report thereon dated December 20, 2010. We conducted our
audit in accordance with auditing standards generally accepted in the United States of America
and the standards applicable to financial audits contained in Government Auditing Standards,
issued by the Comptroller General of the United States.
Compliance and Other Matters
As part of obtaining reasonable assurance about whether the Corporation's financial statements
are free of material misstatement, we performed tests of its compliance with certain provisions
of laws, regulations, contracts and grant agreements, noncompliance with which could have a
direct and material effect on the determination of financial statement amounts. However,
providing an opinion on compliance with those provisions was not an objective of our audit and,
accordingly, we do not express such an opinion. The results of our tests disclosed no instances
of noncompliance or other matters that are required to be reported under Government Auditing
Standards.
Internal Control Over Financial Reporting
In planning and performing our audit, we considered the Corporation's internal control over
financial reporting as a basis for designing our auditing procedures for the purpose of
expressing our opinions on the financial statements, but not for the purpose of expressing an
opinion on the effectiveness of the Corporation's internal control over financial reporting.
Accordingly, we do not express an opinion on the effectiveness of the Corporation's internal
control over financial reporting.
Our consideration of internal control was for the limited purpose described in the preceding
paragraph and was not designed to identify all deficiencies in internal control that might be
deficiencies, significant deficiencies, or material weaknesses and therefore there can be no
assurance that all such deficiencies have been identified.
NEI
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' Board of Directors
Rosemead Housing Development Corporation
Page Two
A deficiency in internal control exists when the design or operation of a control does not allow
management or employees, in the normal course of performing their assigned functions, to
prevent, or detect and correct misstatements on a timely basis. A material weakness is a
deficiency, or combination of deficiencies, in internal control, such that there is a reasonable
possibility that a material misstatement of the entity's financial statements will not be prevented,
' or detected and corrected on a timely basis. We did not identify any deficiencies in internal
control that we consider to be material weaknesses.
' We noted certain matters we reported to the management of the City of Rosemead in a
separate letter dated December 20, 2010.
' This report is intended solely for the information and use of the Board of Directors, and
management of the Corporation's and is not intended to be and should not be used by anyone
other than these specified parties.
' Irvine, California
December 20, 2010
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ATTACHMENT - D
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L]
P°
•
C
•
•
•
CITY OF ROSEMEAD
Rosemead, California
Single Audit Report on
Federal Awards
Year ended June 30, 2010
40
•
CITY OF ROSEMEAD
•
Single Audit Report on Federal Awards
Year ended June 30, 2010
•
TABLE OF CONTENTS
Paqe
Report on Compliance and Other Matters and on Internal Control over
• Financial Reporting Based on an Audit of Firiancial Statements Performed
in Accordance with Government Auditing Standards 1
Report on Compliance with Requirements that Could Have a Direct and
Material Effect on Each Major Program, Internal Control over Compliance
• and on the Schedule of Expenditures of Federal Awards in Accordance
with OMB Circular A -133 3
I
Schedule of Expenditures of Federal Awards 6
•
Notes to the Schedule of Expenditures of Federal Awards 7
Schedule of Findings and Questioned Costs; 8
•
Summary Schedule of Prior Audit Findings 13
•
•
•
•
•
Li
Mayer Hoffman McCann P.C.
An Independent CPA Firm
2301 Dupont Drive, Suite 200
Irvine, California 92612
949 - 474 -2020 ph
949 - 2635520 fx
www.mhm - pc.com
• Honorable Mayor and City Council
City of Rosemead
Rosemead, California
REPORT ON COMPLIANCE AND OTHER MATTERS AND ON INTERNAL CONTROL OVER
• FINANCIAL REPORTING BASED ON AN AUDIT OF FINANCIAL STATEMENTS
PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS
We have audited the financial statements of the governmental activities and each major fund
• and the aggregate remaining fund information of the City of Rosemead, California, (the City) as
of and for the year ended June 30, 2010, which collectively comprise the City's basic financial
statements and have issued our report thereon dated December 20, 2010. We conducted our
audit in accordance with auditing standards generally accepted in the United States of America
and the standards applicable to financial audits contained in Government Auditing Standards,
issued by the Comptroller General of the United States.
• Compliance and Other Matters
As part of obtaining reasonable assurance about whether the City's financial statements are
free of material misstatement, we performed tests of its compliance with certain provisions of
laws, regulations, contracts and grant agreements, noncompliance with which could have a
direct and material effect on the determination of financial statement amounts. However,
• providing an opinion on compliance with those provisions was not an objective of our audit and,
accordingly, we do not express such an opinion. The results of our tests disclosed no material
instances of noncompliance or other matters that are required to be reported under
Government Auditing Standards.
•
Internal Control Over Financial Reporting
In planning and performing our audit, we considered the City's internal control over financial
reporting as a basis for designing our auditing procedures for the purpose of expressing our
opinions on the financial statements, but not for the purpose of expressing an opinion on the
effectiveness of the City's internal control over financial reporting. Accordingly, we do not
• express an opinion on the effectiveness of the City's internal control over financial reporting.
A deficiency in internal control exists when the design or operation of a control does not allow
management or employees, in the normal course of performing their assigned functions, to
prevent or detect and correct misstatements on a timely basis. A material weakness is a
deficiency, or combination of deficiencies, in internal control, such that there is a reasonable
possibility that a material misstatement of the entity's financial statements will not be prevented,
• or detected and corrected on a timely basis.
•
•
Honorable Mayor and City Council
City of Rosemead
Page Two
•
Our consideration of the internal control over financial reporting was for the limited purpose
described in the first paragraph of this section and would not necessarily identify all the
• deficiencies in the internal control that might be deficiencies, significant deficiencies or material
weaknesses. We did not identify any deficiencies in internal control over financial reporting that
we consider to be material weaknesses, as defined above. However, we identified certain
deficiencies in internal control over financial reporting, described in the accompanying Schedule
of Findings and Questioned Costs as items 2010 -01 through 2010 -04 that we consider to be
significant deficiencies in internal control over financial reporting. A significant deficiency is a
• deficiency, or combination of deficiencies, in internal control that is less severe than a material
weakness, yet important enough to merit the attention of those charged with governance.
The City's written responses to the significant deficiencies identified in our audit have not been
subjected to the audit procedures applied in the audit of financial statements and, accordingly,
we express no opinion on them.
•
This report is intended solely for the information and use of the City Council, management and
federal awarding agencies and pass- through entities, and is not intended to be, and should not
be, used by anyone other than those specified parties.
M IlWma4 A44 1
Irvine, California
December 20. 2010
•
•
•
•
•
•
Mayer Hoffman McCann P.C.
An Independent CPA Firm
2301 Dupont Drive, Suite 200
Irvine, California 92612
949- 474-2020 ph _
949- 263 -5520 fx
www.mhm - pc.com
Honorable Mayor and Members of
• the City Council
City of Rosemead
Rosemead, California
REPORT ON COMPLIANCE WITH REQUIREMENTS THAT COULD HAVE A DIRECT AND
• MATERIAL EFFECT ON EACH MAJOR PROGRAM, INTERNAL CONTROL OVER
COMPLIANCE AND ON THE SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS IN
ACCORDANCE WITH OMB CIRCULAR A -133
Compliance
•
We have audited the compliance of the City of Rosemead, California, (the City) with the types
of compliance requirements described in the U.S. Office of Management and Budget (OMB)
Circular A -133 Compliance Supplement that are applicable to its major federal programs for the
year ended June 30, 2010. The City's major federal programs are identified in the summary of
auditors' results section of the accompanying schedule of findings and questioned costs.
• Compliance with the requirements of laws, regulations, contracts and grants applicable to its
major federal programs are the responsibility of the City's management. Our responsibility is to
express an opinion on the City's compliance based on our audit.
We conducted, our audit of compliance in accordance with auditing standards generally
accepted in the United States of America; the standards applicable to financial audits contained
• in Government Auditing Standards, issued by the Comptroller General of the United States and
OMB Circular A -133, Audits of States, Local Governments, and Non - Profit Organizations.
Those standards and. OMB Circular A -133 require that we plan and perform the audit to obtain
reasonable assurance about whether noncompliance with the types of compliance requirements
referred to above that could have a direct and material effect on a major federal program
occurred. An audit includes examining, on a test basis, evidence about the City's compliance
• with those requirements and performing such other procedures as we considered necessary in
the circumstances. We believe that our audit provides a reasonable basis for our opinion. Our
audit does not provide a legal determination on the City's compliance with those requirements.
In our opinion, the City of Rosemead complied, in all material respects, with the requirements
• referred to above that could have a direct and material effect on each of its major federal
programs for the year ended June 30, 2010. However, the results of our auditing procedures
disclosed one instance of noncompliance with those requirements, which is required to be
reported in accordance with OMB Circular A -133 and which is described in the accompanying
Schedule of Findings and Questioned Costs as items 2010 -05.
•
•
•
Honorable Mayor and Members of
the City Council
• City of Rosemead
Page Two
Internal Control Over Compliance
The management of the City is responsible for establishing and maintaining effective internal
• control over compliance with requirements of laws, regulations, contracts and grants applicable
to federal programs. In planning and performing our audit, we considered the City's internal
control over compliance with requirements that could have a direct and material effect on a
major federal program in order to determine our auditing procedures for the purpose of
expressing our opinion on compliance, but not for the purpose of expressing an opinion on the
effectiveness of internal control over compliance. Accordingly, we do not express an opinion on
• the effectiveness of the City's internal control over compliance.
A deficiency in internal control over compliance exists when the design or operation of a control
over compliance does not allow management or employees, in the normal course of performing
their assigned functions, to prevent, or detect and correct, noncompliance with a type of
compliance requirement of a federal program on a timely basis. A material weakness in internal
• control over compliance is a deficiency, or combination of deficiencies, in internal control over
compliance, such that there is a reasonable a possibility that material noncompliance with a
type of compliance requirement of a federal program will not be prevented, or detected and
corrected, on a timely basis.
Our consideration of the internal control over compliance was for the limited purpose described
• in the first paragraph of this section and would not necessarily identify all deficiencies in internal
control that might be significant deficiencies or material weaknesses. We did not identify any
deficiencies in internal control over compliance that we consider to be material weaknesses, as
defined above.
However, we consider the deficiency in internal control over compliance described in the
• accompanying Schedule of Findings and Questioned Costs as item 2010 -05 to be a significant
deficiency. A significant deficiency in internal control over compliance is a deficiency, or a
combination of deficiencies, in internal control over compliance with a type of compliance
requirement of a federal program that is less severe than a material weakness in internal
control over compliance, yet important enough to merit attention by those charged with
governance.
i
Schedule of Federal Awards
We have audited the basic financial statements of the governmental activities, each major fund
and the aggregate remaining fund information of the City as of and for the year ended June 30,
• 2010, which collectively comprise the City's basic financial statements, and have issued our
report thereon dated December 20, 2010. Our audit was performed for the purpose of forming
our opinions on the financial statements that collectively comprise the City's basic financial
statements. The accompanying Schedule of Expenditures of Federal Awards is presented for
purposes of additional analysis in accordance with the requirements of OMB Circular A -133 and
is not a required part of the basic financial statements. Such information has been subjected to
! the auditing procedures applied in the audit of the basic financial statements and, in our
opinion, is fairly stated, in all material respects, in relation to the basic financial statements
taken as a whole.
•
•
Honorable Mayor and Members of
the City Council
• City of Rosemead
Page Three
• The City of Rosemead's responses to the findings identified in our audit are described in the
accompanying schedule of findings and questioned costs. We did not audit City of Rosemead's
responses and, accordingly, we express no opinion on the responses.
This report is intended solely for the information of the City Council, management, federal
awarding agencies and pass- through entities and is not intended to be and should not be used
• by anyone other than these specified parties.
/ &'WA lAg"411 Ae l'an7 P L.
Irvine, California
• December 20, 2010
•
•
•
C]
•
5
•
•
CITY OF ROSEMEAD
Schedule of Expenditures of Federal Awards
Year ended June 30, 2010
0
U.S. Department of Transportation
Pass - through State Department of Transportation:
ARRA - Highway Planning and Construction
07 -5358R 20.205 434,721 `
0
Total Federal Awards Expended
40
Denotes a Major Program
CFDA = Catalog of Federal Domestic Assistance
11
0
See accompanying notes to the schedule of expenditures of federal awards
6
$ 2,661,852 116,808
0
Federal
Amount
Federal Grantor /Pass- through
Pass- through
CFDA
Federal
Provided to
Grantor /Program Title
Number
Number
Expenditures
Subrecipients
U.S. Department of Housing and Urban Development
Direct Programs:
Community Development Block Grant
N/A
14.218
$ 1,116,376
- 116,808
ARRA - Community Development Block Grant - R
N/A
14.253
306,851
' -
HOME
N/A
14.239
675,344
-
Subtotal
2,098,571
116,808
U.S. Department of Justice
Pass - through City of Los Angeles:
Edward Byrne Memorial Justice Assistance Grant
C- 117929
16.738
26,044
-
ARRA - Edward Byrne Memorial Justice Assistance Grant
C- 117668
16.738
102,516
-
Subtotal
128,560
-
i
U.S. Department of Transportation
Pass - through State Department of Transportation:
ARRA - Highway Planning and Construction
07 -5358R 20.205 434,721 `
0
Total Federal Awards Expended
40
Denotes a Major Program
CFDA = Catalog of Federal Domestic Assistance
11
0
See accompanying notes to the schedule of expenditures of federal awards
6
$ 2,661,852 116,808
0
•
CITY OF ROSEMEAD
Notes to the Schedule of Expenditures of Federal Awards
C.
C7
Year ended June 30, 2010
(1) Summary of Significant Accounting Policies Applicable to the Schedule of Federal Awards
(a) Scope of Presentation
r
•
The accompanying schedule presents only the expenditures incurred by the City of
Rosemead that are reimbursable by agencies providing federal assistance. For the
purposes of this schedule, federal financial assistance includes both federal
financial assistance received directly from a federal agency, as well as federal
funds received indirectly from a non - federal agency or other organization. Only the
portion of program expenditures reimbursable with such federal funds are reported
in the accompanying schedule. Program expenditures in excess of the maximum
federal reimbursement authorized or the portion of the program expenditures that
were funded with state, local or other non - federal funds are excluded from the
accompanying schedule.
(b) Basis of Accountin
The expenditures included
• modified accrual basis o
accounting, expenditures
payment as a result of the
reported include any prope
program.
•
(c) Subrecipient Expenditures
in the accompanying schedule were reported on the
f accounting. Under the modified accrual basis of
are recognized when the agency becomes obligated for
receipt of the related goods and services. Expenditures
rty or equipment acquisitions incurred under the federal
Payments to subrecipients totaled $116,808 for the Community Development Block
Grant for the fiscal year ended June 30, 2010.
•
•
•
•
•
CITY OF ROSEMEAD
Schedule of Findings and Questioned Costs
Year ended June 30, 2010
• (A) Summary of Auditors' Results
1.
An unqualified report was issued by the auditors on the financial statements of the
auditee.
2.
There were no material weaknesses in internal control over financial reporting.
•
There were four significant deficiencies in internal control over financial reporting
that we described as items 2010 -01 through 2010 -04.
3.
The audit disclosed no noncompliance which is material to the financial statements
of the auditee.
• 4.
There was one significant deficiency in internal control over the major programs
that we described as item 2010 -05.
5.
An unqualified opinion was issued by the auditors on compliance for major
programs.
• 6.
The audit disclosed no audit finding that is required to be reported under paragraph
.510(a) of OMB Circular A -133.
7.
The major programs of the auditee were U.S. Department of Housing and Urban
Development, Community Development Block Grants, CFDA No. 14.218,
Community Development Block Grants — Recovery, CFDA No. 14.253, U.S.
•
Department of Justice, Edward Byrne Memorial Justice Assistance Grant, CFDA
No. 16.738 and U.S. Department of Transportation, Highway Planning and
Construction Grant, CFDA No. 20.205,
8. The dollar threshold used to distinguish Type A and Type B programs was
$300,000.
•
9. The auditee did not qualify as a low risk auditee, as defined by OMB Circular A-
133, paragraph .530, for the year ended June 30, 2010 for the purpose of
determining major programs.
•
(2010 -01) Establishment of System Access Rights
During our review of the internal control structure of the City, we noted that all finance
personnel have the ability to perform the following functions:
•
0
•
•
CITY OF ROSEMEAD
•
Schedule of Findings and Questioned Costs
(Continued)
•
(2010 -01) Establishment of System Access Rights (Continued)
• Establish vendors and process invoices for payment
• • Make changes to the payroll master file (adding and deleting employees, making
pay rate changes, etc.)
• Process payroll
• Post adjustments to the general ledger
Recommendation
We recommend that the City restrict system access rights for each individual in the
Finance Department with respect to that individual's capability to process invoices, make
changes to payroll and post adjustments to the general ledger, in order to adequately
safeguard City assets.
• Management's Corrective Actions Planned
In January 2011 the City will begin implementing a new finance software system.
Defining access rights, along with work -flow authorizations is an integral part of the
overall finance system implementation; it has been in the planning stage for the past
year and is a high priority with staff. Full implementation, including the auditor's
recommendations, is expected to be complete by July 2011.
U
(2010 -02) Adjustments Detected Through the Audit Process
Auditing standards require that the auditor include in the report of deficiencies any
material adjustments detected by the audit process. For the year ended June 30, 2010,
• material adjustments detected by the audit process were as follows:
• An adjustment to properly record a new capital lease agreement entered into by
the City during the current year.
• An adjustment to remove an interfund borrowing established between two
special revenue funds that had not been approved by the City Council.
• An adjustment to record construction in progress for the year ended June 30,
2010.
An adjustment to correct accumulated depreciation.
An adjustment to move CDBG activity recorded in a capital projects fund into the
• City's CDBG fund.
•
r
CITY OF ROSEMEAD
Schedule of Findings and Questioned Costs
[7
•
(Continued)
(2010 -02) Adjustments Detected Through the Audit Process, (Continued)
Recommendation
•
We recommend that the City develop and implement procedures to assist Finance
Department staff in the process of closing the accounting records at the end of each
fiscal year to ensure all material accounting entries have been prepared prior to the
auditors conducting the audit. These procedures could involve checklists of processes
• to be completed and accounts to be reviewed and /or analyzed.
Management's Corrective Actions Planned
We recommend that the City develop and implement procedures to assist Finance
Department staff in the process of closing the accounting records at the end of each
fiscal year to ensure all material accounting entries have been prepared prior to the
• auditors conducting the audit. These procedures could involve checklists of processes
to be completed and accounts to be reviewed and /or analyzed.
(2010 -03) Need for Improved Accounting Over Capital Assets
• During our testwork over the City's capital asset records for the year ended June 30,
2010, the following discrepancies were noted:
• Construction in progress in the amount of $383,536 was not recorded by the City
in the capital asset spreadsheet. This amount reflects capital projects that were
in progress and not yet completed as of June 30, 2010.
• 0 Additions to the 'City's infrastructure in the amount of $125,670 were not
recorded by the City in the capital asset spreadsheet. This amount represents
capital projects that had been completed during fiscal year ended June 30, 2010,
but had not been recorded by the City.
• The City's schedule to track accumulated depreciation contained several errors
• within the formulas that included over depreciating City assets.
Recommendation
•
We recommend that the Finance Department review all capital outlay expenditures each
year to determine if any of the projects should be capitalized.
10
•
•
CITY OF ROSEMEAD
Schedule of Findings and Questioned Costs
•
•
•
•
(Continued)
(2010 -03) Need for Improved Accounting Over Capital Assets (Continued)
Management's Corrective Actions Planned
The City's new financial software, which will be implemented in January 2011, includes a
capital asset module. Capital assets are flagged as a capital asset at the time they are
purchased and that information flows to the capital asset module. This reduces the
likelihood of not posting a capital asset in the capital assets module. Further, proven
depreciation formulas are hardcoded into the capital asset module and will be tested for
accuracy at the time of implementation.
(2010 -04) Community Development Commission Allocations
Total Community Development Commission (CDC) expenditures are approximately 20%
of total City expenditures. However, administrative salaries charged for certain
individuals are up to 55% of those individual's total salary. The City provided explanation
of duties performed to justify these charges; however these allocations were based on
estimates of time spent working on CDC activities, not actual time spent.
• Recommendation
Health & Safety Code §33334.6 states "The Agency shall determine annually that the
planning and administrative expenses are necessary for the production, improvement or
preservation of low -and moderate - income housing." The code also says "Planning and
general administrative costs which may be paid with moneys from the Low and
• Moderate Income Housing Fund are those expenses incurred by the Agency which are
directly related to the programs and activities authorized under the Code."
We recommend that the City personnel perform a time study of those administrative
employees that charge time directly to the CDC to support future charges or require
employees to track their time on timesheets and record direct charges based on actual
• time incurred.
Management's Corrective Actions Planned
During the next budget preparation cycle staff will take into consideration the time
worked to be allocated to the CDC. Also, included with the new financial software is an
employee self service feature which will permit staff to input hours worked to the
appropriate cost center.
11
•
CITY OF ROSEMEAD
•
Schedule of Findings and Questioned Costs
(Continued)
(C) Findings and Questioned Costs for Federal Awards as Defined in Paragraph .510(a) of
• OMB Circular A -133
(2010 -05) Highway Planning and Construction — Reporting
Federal Agency: Department of Transportation
CFDA No.: 20.205
• Federal Program Income: Highway Planning and Construction
Federal Award Program No.: 07- 933512
Federal Award Year: 2009
Control Category: Reporting
Questioned Costs: $0
• The City of Rosemead received a Highway Planning and Construction grant from the
Department of Transportation under the American Recovery and Reinvestment Act (ARRA).
One of the new reporting requirements for this grant under ARRA is for the City to submit a
Monthly Employment Report to the granting agency. This report is used to show the
number of jobs created as a result of the project funded with the grant. For the year ended
• June 30, 2010, the City had not submitted any Monthly Employment Reports to the granting
agency.
Recommendation
We recommend that each time the City receives a new grant, that the grant agreement and
• all reporting requirements are closely reviewed to ensure the City is fully complying with all
the requirements of the grant.
Management's Response Regarding Corrective Action Taken or Planned
Subsequent to June 30, 2010 all monthly employment reports have been filed. Staff is now
• filing reports on any existing projects in a timely manner.
•
•
12
•
•
CITY OF ROSEMEAD
Summary Schedule of Prior Audit Findings
•
Year ended June 30, 2010
• The following is the status of the prior audit finding for the year ended June 30, 2009:
(09 -01) Establishment of System Access Rights
Matter was not resolved and therefore was repeated as a current year finding. See
accompanying Schedule of Findings and Questioned Costs as item 2010 -01.
•
•
•
•
•
•
IN
•
i
•
C
•
•
•
•
I
•
•
r
Mayer Hoffman McCann P.C.
An Independent CPA Firm
2301 Dupont Drive, Suite 200
Irvine, California 92612
949 - 474 -2020 ph
949- 263 -5520 fx
www.mhm - pc.com
Honorable Mayor and Members of the City Council
City of Rosemead
Rosemead, California
ATTACHMENT - E
We have audited the financial statements of the governmental activities, the business -type activities, the
aggregate discretely presented component units, each major fund, and the aggregate remaining fund information
of the City of Rosemead ( "the City'), California, as of and for the year ended June 30, 2010, and have issued our
report thereon dated December 20, 2010. Professional standards require that we provide you with the following
information related to our audit.
Our Responsibility under U.S. Generally Accepted Auditing Standards and OMB Circular A -133
Our responsibility, as described by professional standards, is to express opinions about whether the financial
statements prepared by management with your oversight are fairly presented, in all material respects, in
conformity with U.S. generally accepted accounting principles. Our audit of the financial statements does not
relieve you or management of your responsibilities.
In planning and performing our audit, we considered the City's internal control over financial reporting in order to
determine our auditing procedures for the purpose of expressing our opinions on the financial statements and not
to provide assurance on the internal control over financial reporting. We also considered internal control over
compliance with requirements that could have a direct'and material effect on a major federal program in order to
determine our auditing procedures for the purpose of expressing our opinion on compliance and to test and report
on internal control over compliance in accordance with OMB Circular A -133.
As part of obtaining reasonable assurance about whether the City's financial statements are free of material
misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts, and
grants, noncompliance with which could have a direct and material effect on the determination of financial
statement amounts. However, providing an opinion on compliance with those provisions was not an objective of
our audit. Also in accordance with OMB Circular A -133, we examined, on a test basis, evidence about the City's
compliance with the types of compliance requirements described in the "U.S. Office of Management and Budget
(OMB) Circular A -133 Compliance Supplement" applicable to each of its major federal programs for the purpose
of expressing an opinion on the City's compliance with those requirements. While our audit provides a reasonable
basis for our opinion, it does not provide a legal determination on the City's compliance with those requirements.
Scope and Timing of the Audit
We performed the audit according to the planned scope and timing previously communicated to you in a separate
letter to the Honorable Mayor and Members of the City Council on April 15, 2010.
Significant Audit Findings
We have separately reported to you in a separate letter dated December 20, 2010 the deficiencies in internal
control that we consider to be significant deficiencies.
Honorable Mayor and Members of the City Council
City of Rosemead
Rosemead, California
Page Two
Qualitative Aspects of Accounting Practices
Management is responsible for the selection and use of appropriate accounting policies. The significant
accounting policies used by the City are described in Note 1 to the financial statements. No new accounting
policies were adopted and the application of existing policies was not changed during the fiscal year ended June
30, 2010. We noted no transactions entered into by the governmental unit during the year for which there is a
lack of authoritative guidance or consensus. There are no significant transactions that have been recognized in
the financial statements in a different period than when the transaction occurred.
Accounting estimates are an integral part of the financial statements prepared by management and are based on
management's knowledge and experience about past and current events and assumptions about future events.
Certain accounting estimates are particularly sensitive because of their significance to the financial statements
and because of the possibility that future events affecting them may differ significantly from those expected. The
most sensitive estimate affecting the financial statements was:
• Judgments concerning which capital projects represent ordinary maintenance activities
necessary to keep an asset operational for its originally intended useful life versus
significant improvement, replacement, and life extending projects that should be capitalized
as additions to capital assets.
The disclosures in the financial statements are neutral, consistent, and clear. Certain financial statement
disclosures are particularly sensitive because of their significance to financial statement users. The most
sensitive disclosures affecting the financial statements were:
The disclosure of fund balance deficits in Note 12 to the financial statements. This footnote
makes the financial statement user aware of the excess of expenditures over revenues.
Difficulties Encountered in Performing the Audit
We encountered no significant difficulties in dealing with management in performing and completing our audit.
Corrected and Uncorrected Misstatements
Professional standards require us to accumulate all known and likely misstatements identified during the audit,
other than those that are trivial, and communicate them to the appropriate level of management. Management
has corrected all such misstatements. The following material misstatements detected as a result of audit
procedures were corrected by management:
• An adjustment to properly record a new capital lease agreement entered into by the City during
the current year.
• An adjustment to remove an interfund borrowing established between two special revenue funds
that had not been approved by the City Council.
• An adjustment to record construction in progress for the year ended June 30, 2010.
• An adjustment to record infrastructure in the City's fixed asset records for projects completed
during fiscal year 2009 -2010.
• An adjustment to correct accumulated depreciation.
• An adjustment to move CDBG activity recorded in a capital projects fund into the City's CDBG
fund.
Honorable Mayor and Members of the City Council
City of Rosemead
Rosemead, California
Page Three
Disagreements with Management
For purposes of this letter, professional standards define a disagreement with management as a financial
accounting, reporting, or auditing matter, whether or not resolved to our satisfaction, that could be significant to
the financial statements or the auditor's report. We are pleased to report that no such disagreements arose during
the course of our audit.
Management Representations
We have requested certain representations from management that are included in the management
representation letter dated December 20, 2010.
Management Consultations with Other Independent Accountants
In some cases, management may decide to consult with other accountants about auditing and accounting matters,
similar to obtaining a "second opinion" on certain situations. If a consultation involves application of an accounting
principle to the governmental unit's financial statements or a determination of the type of auditor's opinion that
may be expressed on those statements, our professional standards require the consulting accountant to check
with us to determine that the consultant has all the relevant facts. To our knowledge, there were no such
consultations with other accountants.
Other Audit Findings or Issues
We generally discuss a variety of matters, including the application of accounting principles and auditing
standards, with management each year prior to retention as the governmental unit's auditors. However, these
discussions occurred in the normal course of our professional relationship and our responses were not a condition
to our retention.
This information is intended solely for the use of the City of Rosemead and is not intended to be and should not
be used by anyone other than these specified parties.
/r an Ne t"ann Q Y.
December 20, 2010
Irvine, California
Mayer Hoffman McCann P.C.
An Independent CPA Firm
2301 Dupont Drive, Suite 200
Irvine, California 92612
949 -474 -2020 ph
949 - 263 -5520 fx
w .mhm- pc.conn
Honorable Mayor and City Council
City of Rosemead
Rosemead. California
ATTACHMENT -F
In planning and performing our audit of the financial statements of the City of Rosemead (the
"City ") as of and for the year ended June 30, 2010, in accordance with auditing standards
generally accepted in the United States of America, we considered the City's internal control
over financial reporting as a basis for designing our auditing procedures for the purpose of
expressing our opinion on the financial statements, but not for the purpose of expressing an
opinion on the effectiveness of the City's internal control. Accordingly, we do not express an
opinion on the effectiveness of the City's internal control.
Our consideration of internal control was for the limited purpose described in the preceding
paragraph and was not designed to identify all deficiencies in internal control that might be
deficiencies, significant deficiencies, or material weaknesses and therefore there can be no
assurance that all such deficiencies have been identified.
A deficiency in internal control exists when the design or operation of a control does not allow
management or employees, in the normal course of performing their assigned functions, to
prevent, or detect and correct misstatements on a timely basis. A material weakness is a
deficiency, or combination of deficiencies, in internal control, such that there is a reasonable
possibility that a material misstatement of the entity's financial statements will not be prevented,
or detected and corrected on a timely basis. We did not identify any deficiencies in internal
control that we consider to be material weaknesses.
A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is
less severe than a material weakness, yet important enough to merit attention by those charged
with governance. The following matters conform to this definition:
(1) Establishment of System Access Rights
During our review of the internal control structure of the City, we noted that all finance
personnel have the ability to perform the following functions:
• Establish vendors and process invoices for payment
• Make changes to the payroll master file (adding and deleting employees, making
pay rate changes, etc.)
• Process payroll
• Post adjustments to the general ledger
Recommendation
We recommend that the City restrict system access rights for each individual in the
Finance Department with respect to that individual's capability to process invoices, make
changes to payroll and post adjustments to the general ledger, in order to adequately
safeguard City assets.
Honorable Mayor and City Council
City of Rosemead
Page 2
(1) Establishment of System Access Rights (continued)
Management's Corrective Actions Planned
In January 2011 the City will begin implementing a new finance software system.
Defining access rights, along with work -flow authorizations is an integral part of the
overall finance system implementation; it has been in the planning stage for the past
year and is a high priority with staff. Full implementation, including the auditor's
recommendations, is expected to be complete by July 2011.
(2) Adjustments Detected Through the Audit Process
Auditing standards require that the auditor include in the report of deficiencies any
material adjustments detected by the audit process. For the year ended June 30, 2010,
material adjustments detected by the audit process were as follows:
• An adjustment to properly record a new capital lease agreement entered into by
the City during the current year.
• An adjustment to remove an interfund borrowing established between two special
revenue funds that had not been approved by the City Council.
• An adjustment to record construction in progress for the year ended June 30,
2010.
• An adjustment to record infrastructure in the City's fixed asset records for
projects completed during fiscal year 2009 -2010.
• An adjustment to correct accumulated depreciation.
• An adjustment to move CDBG activity recorded in a capital projects fund into the
City's CDBG fund.
Recommendation
We recommend that the City develop and implement procedures to assist Finance
Department staff in the process of closing the accounting records at the end of each
fiscal year to ensure all material accounting entries have been prepared prior to the
auditors conducting the audit. These procedures could involve checklists of processes
to be completed and accounts to be reviewed and /or analyzed.
Honorable Mayor and City Council
City of Rosemead
Page 3
(2) Adjustments Detected Through the Audit Process, (continued)
Management's Corrective Actions Planned
Staff will increase the comprehensiveness of existing checklists and exercise greater
diligence at following them. Errors to accumulated depreciation will be resolved by the
use of the capital asset module in the new finance system.
(3) Need for Improved Accounting Over Capital Assets
During our testwork over the City's capital asset records for the year ended June 30,
2010, the following discrepancies were noted:
• Construction in progress in the amount of $383,536 was not recorded by the City
in the capital asset spreadsheet. This amount reflects capital projects that were
in progress and not yet completed as of June 30, 2010.
• Additions to the City's infrastructure in the amount of $125,670 were not recorded
by the City in the capital asset spreadsheet. This amount represents capital
projects that had been completed during fiscal year ended June 30, 2010, but
had not been recorded by the City.
• The City's schedule to track accumulated depreciation contained several errors
within the formulas that included over depreciating City assets.
Recommendation
We recommend that the Finance Department review all capital outlay expenditures each
year to determine if any of the projects should be capitalized.
Management's Corrective Actions Planned
The City's new financial software, which will be implemented in January 2011, includes a
capital asset module. Capital assets are flagged as a capital asset at the time they are
purchased and that information flows to the capital asset module. This reduces the
likelihood of not posting a capital asset in the capital assets module. Further, proven
depreciation formulas are hardcoded into the capital asset module and will be tested for
accuracy at the time of implementation.
(4) Community Development Commission Allocations
Total Community Development Commission (CDC) expenditures are approximately 20%
of total City expenditures. However, administrative salaries charged for certain
individuals are up to 55% of those individual's total salary. The City provided explanation
of duties performed to justify these charges; however these allocations were based on
estimates of time spent working on CDC activities, not actual time spent.
Honorable Mayor and City Council
City of Rosemead
Page 4
(4) Community Development Commission Allocations, (continued)
Recommendation
Health & Safety Code §33334.6 states "The Agency shall determine annually that the
planning and administrative expenses are necessary for the production, improvement or
preservation of low -and moderate - income housing." The code also says "Planning and
general administrative costs which may be paid with moneys from the Low and
Moderate Income Housing Fund are those expenses incurred by the Agency which are
directly related to the programs and activities authorized under the Code."
We recommend that the City personnel perform
employees that charge time directly to the CDC
employees to track their time on timesheets and
time incurred.
Management's Corrective Actions Planned
a time study of those administrative
to support future charges or require
record direct charges based on actual
During the next budget preparation cycle staff will take into consideration the time
worked to be allocated to the CDC. Also, included with the new financial software is an
employee self service feature which =will permit staff to input hours worked to the
appropriate cost center.
This report is intended solely for the information and use of management of the City of
Rosemead and its City Council and is not intended to be and should not be used by anyone
other than these specified parties.
4 #Vg"an /Nc Bann
Irvine, California
December 20. 2010
Mayer Hoffman McCann P.C.
An Independent CPA Firm
2301 Dupont Drive, Suite 200
Irvine, California 92612
949 - 474 -2020 ph
949 - 263 -5520 fx
www,mhm- pc.com
Honorable Mayor and City Council
City of Rosemead, California
ATTACHMENT -G
INDEPENDENT ACCOUNTANTS' REPORT ON AGREED UPON PROCEDURES
APPLIED TO APPROPRIATIONS LIMIT WORKSHEETS
We have applied the procedures enumerated below to the appropriations limit worksheets
prepared by the City of Rosemead California for the year ended June 30, 2010. These
procedures, which were agreed to by the City of Rosemead; California and the League of
California Cities (as presented in the League publication entitled Article XIIIB Appropriations
Limitation Uniform Guidelines) were performed solely to assist the City of Rosemead, California
in meeting the requirements of Section 1.5 of Article XIIIB of the California Constitution. The
City's management is responsible for maintaining the appropriations limit records and its
calculations.
This engagement to apply agreed -upon procedures was performed in accordance with
attestation standards established by the American Institute of Certified Public Accountants. The
sufficiency of the procedures is solely the responsibility of the specified users of the report.
Consequently, we make no representation regarding the sufficiency of the procedures described
below either for the purpose for which this report has been requested or for any other purpose.
The procedures performed and the results of those procedures were as follows:
We obtained the worksheets referred to above and compared the limit and annual
adjustment factors included in those worksheets to the limit and annual adjustment
factors that were adopted by resolution of the City Council. We also compared the
population and inflation options included in the aforementioned worksheets to those that
were selected by a recorded vote of the City Council,
Results: No exceptions were noted as a result of our procedures.
2. We recalculated the mathematical computations reflected in the City worksheets.
Results: No exceptions were noted as a result of our procedures.
3. We compared the current year information used to determine the current year limit and
found that it agreed to worksheets prepared by the City and to information provided by
the State Department of Finance.
Results: No exceptions were noted as a result of our procedures.
4. We compared the amount of the prior year appropriations limit presented in the
worksheets to the amount adopted by the City Council for the prior year.
Honorable Mayor and City Council
City of Rosemead, California
Page 2
Results: No exceptions were noted as a result of our procedures.
We were not engaged to, and did not, perform an audit, the objective of which would be the
expression of an opinion on the worksheets referred to above. Accordingly, we do not express
such an opinion. Had we performed additional procedures, other matters might have come to
our attention that would have been reported to you. No procedures have been performed with
respect to the determination of the appropriation limit for the base year, as defined by the
League publication entitled Article XIIIB Appropriations Limitation Uniform Guidelines.
This report is intended solely for the information and use of the City of Rosemead, California
and should not be used by those who have not agreed to the procedures and taken
responsibility for the sufficiency of the procedures for their purposes.
Aaym mtrmman /fie �ann l e
Irvine, California
December 20, 2010