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CITY OF ROSEMEAD
Rosemead, California
Comprehensive Annual Financial Report
Fiscal Year Ended June 30, 2011
Prepared by the Finance Department
Steve Brisco
Director of Finance
CITY OF ROSEMEAD
Comprehensive Annual Financial Report
Fiscal Year Ended June 30, 2011
TABLE OF CONTENTS
Page
INTRODUCTORY SECTION
Letter of Transmittal i
Directory of Officials v
Certificate of Achievement for Excellence in Financial Reporting (GFOA) vi
Organizational Chart vii
FINANCIAL SECTION
Independent Auditor's 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
18
Statement of Revenues, Expenditures, and Changes in Fund Balances
19
Reconciliation of the Statement of Revenues, Expenditures, and
and Changes in Fund Balances of Governmental Funds
21
Proprietary Funds:
Statement of Net Assets
22
Statement of Revenues, Expenses, and Changes in Fund Net Assets
23
Statement of Cash Flows
24
Statement of Fiduciary Assets and Liabilities - Agency Fund
25
Notes to the Basic Financial Statements
26
REQUIRED SUPPLEMENTARY INFORMATION:
Notes to Required Supplementary Information 59
Schedule of Revenues, Expenditures, and Changes in Fund Balances -
Budget and Actual - General Fund 60
Schedule of Revenues, Expenditures and Changes in Fund Balances -
Budget and Actual - Low Moderate Income Housing Set-Aside 61
Schedule of Funding Progress -PARS Retirement Enhancement Plan 62
Schedule of Funding Progress -Other Post Employment Benefits Plan 62
CITY OF ROSEMEAD
Comprehensive Annual Financial Report
Fiscal Year Ended June 30, 2011
TABLE OF CONTENTS, (continued)
Page
FINANCIAL SECTION, (continued)
OTHER SUPPLEMENTARY INFORMATION
Combining Balance Sheet - Non-Major Governmental Funds
65
Combining Statement of Revenues, Expenditures, and Changes in Fund
Balances - Non-Major Governmental Funds
68
Schedule of Revenues, Expenditures, and Changes in Fund Balances -
Budget and Actual - Community Development Block Grant
71
Schedule of Revenues, Expenditures, and Changes in Fund Balances -
Budget and Actual - HOME Program
72
Schedule of Revenues, Expenditures, and Changes in Fund Balances -
Budget and Actual - Proposition A
73
Schedule of Revenues, Expenditures, and Changes in Fund Balances -
Budget and Actual - Proposition C
74
Schedule of Revenues, Expenditures, and Changes in Fund Balances -
Budget and Actual - Federal Highway Grant
75
Schedule of Revenues, Expenditures, and Changes in Fund Balances -
Budget and Actual - State Gas Tax
76
Schedule of Revenues, Expenditures, and Changes in Fund Balances -
Budget and Actual - Air Quality Management District
77
Schedule of Revenues, Expenditures, and Changes in Fund Balances -
Budget and Actual - Local Transportation
78
Schedule of Revenues, Expenditures, and Changes in Fund Balances -
Budget and Actual - Street Lighting
79
Schedule of Revenues, Expenditures, and Changes in Fund Balances -
Budget and Actual - Narcotics Forfeiture and Seizure
80
Schedule of Revenues, Expenditures, and Changes in Fund Balances -
Budget and Actual - Measure R
81
Schedule of Revenues, Expenditures, and Changes in Fund Balances -
Budget and Actual - Rosemead Housing Development Corporation
82
Major Fund Budget and Actual Schedules:
Schedule of Revenues, Expenditures, and Changes in Fund Balances -
Budget and Actual - Redevelopment Agency Debt Service Fund 83
Schedule of Revenues, Expenditures, and Changes in Fund Balances -
Budget and Actual - Redevelopment Agency Capital Projects Fund 84
Schedule of Revenues, Expenditures, and Changes in Fund Balances -
Budget and Actual - City Capital Projects 85
CITY OF ROSEMEAD
Comprehensive Annual Financial Report
Fiscal Year Ended June 30, 2011
TABLE OF CONTENTS, (continued)
Page
FINANCIAL SECTION, (continued)
Internal Service Funds:
Combining Statement of Net Assets 87
Combining Statement of Revenues, Expenses and Changes in Fund
Net Assets 88
Combining Statement of Cash Flows 89
Statement of Changes in Fiduciary Assets and Liabilities - Agency Fund 90
STATISTICAL SECTION
Net Assets by Component
92
Changes in Net Assets
94
Fund Balances of Governmental Funds
96
Changes in Fund Balances of Governmental Funds
98
Assessed Value and Estimated Actual Value of Taxable Property
100
Direct and Overlapping Property Tax Rates
101
Principal Property Taxpayers
102
Property Tax Levies and Collections
103
Ratios of Outstanding Debt by Type
104
Ratio of General Bonded Debt Outstanding
105
Direct and Overlapping Governmental Activities Debt
106
Legal Debt Margin
107
Pledged-Revenue Coverage
109
Demographic and Economic Statistics
110
Principal Employers
111
Full-time and Part-time City Employees by Function
112
Operating Indicators by Function
113
Capital Assets Statistics by Function
114
MAYOR:
STEVEN LY
MAYOR PRO TEM:
SANDRA ARNEENTA
COUNCIL MEMBERS:
BILL ALARCON
MARGARET CLARK
POLLY LOW
January 18, 2012
C~ itch ~ Rosemead
8838 E. VALLEY BOULEVARD • PO. 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 year 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, 2011.
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 Rogers, Anderson, Malody
& Scott, LLP, 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, 2011, 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
auditor concluded, based upon the audit, that there was a reasonable basis for rendering an
unqualified opinion that the City of Rosemead's basic financial statements for the fiscal year
ended June 30, 2011, were fairly presented in conformity with GAAP. The independent auditor's
report is presented as the first component of the financial section of this report.
The independent audit of the financial statements of the City of Rosemead was part of a
broader, federally mandated "Single Audit" designed to meet the special needs of federal
grantor agencies. The standards governing Single Audit engagements require the independent
auditor to report not only on the fair presentation of the financial statements, but also on the
audited government's internal controls and compliance with legal requirements, with special
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emphasis on internal controls and legal requirements involving the administration of federal
awards. These reports are available in the City of Rosemead's separately issued Single Audit
Report. GAAP requires that management provide a narrative introduction, overview, and
analysis to accompany the basic financial statements in the form of Management's Discussion
and Analysis (MD&A). This letter of transmittal is designed to complement the MD&A and
should be read in conjunction with it. The City of Rosemead's MD&A can be found immediately
following the report of the independent auditors.
Profile of the Government
The City of Rosemead, incorporated in 1959, is located in the southwestern part of the state of
Califomia, which is considered to be the top growth area in the state, and one of the top growth
areas in the country. The City of Rosemead currently occupies a land area of 5.5 square miles
and serves a population of more than 57,000. Property tax is levied and collected by the County
of Los Angeles. The City and Community Development Commission's portion is remitted to the
City by the County.
The City of Rosemead has operated under the council-manager form of government since
1959. Policy-making and legislative authority are vested in a governing council consisting of the
mayor and four other members. The governing council is responsible, among other things, for
passing ordinances, adopting the budget, appointing committees and commissioners, and hiring
the government's manager, attorney and clerk. The government's manager is responsible for
carrying out the policies and ordinances of the goveming council, for overseeing the day-to-day
operations of the government, and for appointing the heads of the various departments. The
council is elected on a non-partisan basis. Council members serve four-year staggered terms,
with three council members elected every two years and two elected the opposite two years.
The mayor is selected from among the five council members, by the council members, and
serves for a one year term.
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 enforcement 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 Commission), and 3) the Rosemead
Housing Development Corporation (the Corporation). 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) of the Basic Financial
Statements.
The annual budget serves as the foundation for the City of Rosemead and its component unit
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 and the Low-Moderate Income Housing Set-Aside Fund, this comparison is presented on
pages 60 - 61, as part of the basic financial statements for the governmental funds. For
governmental funds, other than the General Fund and the Low-Moderate Income Housing Set-
Aside Fund, with appropriated annual budgets, this comparison is presented in the
governmental fund subsection of this report, which starts on page 71.
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 although 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 perform well in a
recessionary economy. They have continued to perform fairly well and helped the City's sales
tax to decline only .97% compared with the same period a year earlier. Modest sales tax losses
have helped keep Rosemead's unemployment rate down to 10.7%, whereas the larger Los
Angeles, Long Beach and Glendale areas, the rate is 12.3%. Major employers are listed in the
statistical section of the accompanying financial report. No new major retail establishments
opened during the year, but a number of major establishments have signed agreements to
locate in Rosemead or have shown serious interest in doing so in the near future.
Long-term Financial Planning. On December 8, 2009 the City Council approved a strategic
long-term plan that identifies three Key Organizational Goals: 1) Beautify Community
Infrastructure and Improve Public Facilities. 2) Enhance Public Safety and Quality of Life. 3)
Ensure the City's Financial Viability with Balanced Budgets and Prudent Reserves. Many of
these goals have been met including capital improvement projects for street resurfacing, slurry
sealing, curb and ramp improvements and tree planting as well as other park and facility
renovations and improvements On January 10, 2012, the City Council approved a new long-
term financial plan for the coming two years. One of the new strategies that were added is to
complete a formal long-term financial plan for the City. The goal of the long-term financial plan
is to identify capital and operating needs over the next ten years and create a plan on how to
fund them and continue to improve the City.
Cash Management Policies and Practices. Cash, temporarily idle during the year, was
invested in Federally insured certificates of deposit, Federal agency debt issuances and the
State Treasurer's Local Agency Investment Fund (LAIF). In accordance with State law, and the
City's more conservative investment policy, all City investments strictly adhere to the following
priorities, in order of importance: 1) safety, 2) liquidity, and 3) yield.
Risk Management. The City is a member of the California Joint Powers Insurance Authority
(the Authority). The Authority is composed of 107 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 and reinsurance, and to arrange for group-purchased
insurance for property and other coverage. Additional information can be found in Note 9, found
on pages 50 - 51 of the Basic Financial Statements.
Pension and Other Postemployment Benefits. The City of Rosemead is contracted with the
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
Statement No. 45, additional information on the City of Rosemead's pension arrangements and
postemployment benefits can be found in Note 10, found on pages 52 - 54 of the Basic
Financial Statements.
Dissolution of the Redevelopment Agency. On December 29, 2011 the California State
Supreme court upheld the ruling that allows the legislature to dissolve redevelopment agencies.
The dissolution becomes effective on February 1, 2012, thus eliminating nearly $7 million of tax
increment revenue to the City in FY 2011-12. The State will provide money to the City to pay
existing debt service, but the remainder will be re-directed to the State. The consequence will
be a significantly smaller City budget in FY 2012-13 with accompanying reductions in programs,
service levels and service quality.
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, 2010. In order to be awarded a Certificate of Achievement, the government had to publish
an easily readable and efficiently organized CAM 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.
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
iv
City of Rosemead
Directory of Officials
June 30, 2011
CITY COUNCIL
Steven Ly, Mayor
Sandra Armenta, Mayor Pro Tern
Margaret Clark, Council Member
Polly Low, Council Member
William Alarcon, Council Member
CITY MANAGEMENT
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
Lt. Tim Murakami, Chief of Police
Gloria Molleda, City Clerk
Rachel Richman, City Attorney
v
Certificate of
Achievement
for Excellence
in Financial
Presented to
City of Rosemead
California
For its Comprehensive Annual
Financial Report
for the Fiscal Year Ended
June 30, 2010
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.
e. jwg~~
President
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Executive Director
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CITY OF ROSEMEAD
Function Based Organizational Chart
Planning
Commission
City Clerk
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L - Assistant
City Manager
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Technology &
- - Business Support
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Human
r - - Resources
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L - - Finance
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i Risk
L - - Management
City Manager
Traffic
Commission
City Attorney
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Public Safety
Community
Development
Public Works
Parks &
Recreation
vii
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FINANCIAL SECTION
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73S E Carnegie Dr Suite 100
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San Bernardino. CA 92408
909 889 0871 T
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909 889 S361 F
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amscpa net
PARTNERS
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' enda L, Odle. CPA. MST
l :11-ry P Shea, CPA
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V k A Franks. CPA
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t^atthew B Wilson, CPA. MSA
ott W Manno, CPA
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_•ena Shanbhag, CPA, MST
. I-' 7ercher. CPA ,Reared!
MANAGERS / STAFF
Nancy O'Rafferty, CPA, MBA
Bradferd A Welebir, CPA, MBA
fenny Liu, CPA. MST
Katie L- Mdlsom. CPA
Papa Matar Thraw, CPA. MBA
Maya S Ivanova, CPA, MBA
Danielle E Odgers, CPA
William C Clayton, CPA
Peter E Murray. CPA
Genivive Schwarzkopf. CPA
Megan Hackney. CPA
Seong-Hyea Lee. CPA, MBA
Charles De Sirnoni. CPA
0 ''i!:MBERS
I • ne:,can Institute of
r tfied Public Accountants
PCPS The AICPA Alliance
for CPA Firms
Governrnentaf Audit
Quality Center
• Ifornia Society of
rtihed Public Accountants
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ROGERS, ANDERSON, MALODY & SCOTT, LLP
CERTIFIED PUBLIC ACCOUNTANTS, SINCE 1948
The Honorable Mayor and City Council
City of Rosemead
Rosemead, California
INDEPENDENT AUDITOR'S 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 (City), as of and for the year ended June 30,
2011, 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, as of June 30, 2011, and the respective changes in
financial position and cash flows, where applicable, thereof for the year then
ended in conformity with accounting principles generally accepted in the
United States of America.
As explained in note 14 to the basic financial statements, it is uncertain as to
the future continuation of redevelopment agencies (a significant component
unit of the City of Rosemead) in the State of California as a result of certain
legislative actions enacted by the California State Legislature.
During the year under audit, the City adopted Governmental Accounting
Standards Board Statement No. 54, Fund Balance Reporting and
Governmental Fund Type Definitions.
STABILITY. ACCURACY. TRUST.
In accordance with Government Auditing Standards, we have also issued a report dated
January 18, 2012 on our consideration of the City'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.
Accounting principles generally accepted in the United States of America require that the
management's discussion and analysis, budgetary comparison information and the schedule of
funding progress as listed on the table of contents, be presented to supplement the basic
financial statements. Such information, although not a part of the basic financial statements, is
required by the Governmental Accounting Standards Board, who considers it to be an essential
part of financial reporting for placing the basic financial statements in an appropriate
operational, economic, or historical context. We have applied certain limited procedures to the
required supplementary information in accordance with auditing standards generally accepted in
the United States of America, which consisted of inquiries of the management about the
methods of preparing the information and comparing the information for consistency with
management's responses to our inquiries, the basic financial statements, and other knowledge
we obtained during our audit of the basic financial statements. We do not express an opinion or
provide any assurance on the information because the limited procedures do not provide us with
sufficient evidence to express an opinion or provide any assurance.
Our audit was conducted for the purpose of forming opinions on the financial statements that
collectively comprise the City's financial statements as a whole. The introductory section, the
combining and individual nonmajor fund financial statements, and the schedules and statistical
tables listed in the table of contents are presented for purposes of additional analysis and are
not a required part of the financial statements. The combining and individual nonmajor fund
financial statements are the responsibility of management and were derived from and relate
directly to the underlying accounting and other records used to prepare the financial statements.
The information has been subjected to the auditing procedures applied in the audit of the
financial statements and certain additional procedures, including comparing and reconciling
such information directly to the underlying accounting and other records used to prepare the
financial statements or to the financial statements themselves, and other additional procedures
in accordance with auditing standards generally accepted in the United States of America. In
our opinion, the information is fairly stated in all material respects in relation to the financial
statements as a whole. The introductory section and statistical tables have not been subjected
to the auditing procedures applied in the audit of the basic financial statements and,
accordingly, we do not express an opinion or provide any assurance on them.
January 18, 2012
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, 2011. 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 - iv of this report. All amounts, unless
otherwise indicated, are in thousands of dollars.
Financial Highlights
• Beginning in FY 2010-11 the City implemented the Governmental Accounting
Standards Board (GASB) Statement No. 54 designation. Frequent references are
made to GASB Statement No. 54 "unassigned fund balance" which is the rough
equivalent of "unreserved, undesignated fund balance" from prior years. There is an
expanded explanation presented later in this report.
• The assets of the City of Rosemead exceeded its liabilities at the close of the most
recent fiscal year by $50,316 (net assets). Of this amount, $10,748 (unrestricted)
may be used to meet the government's ongoing obligations to citizens and creditors.
• The government's total net assets increased by $3,914 (8.4 percent) mostly due to
grants for capital projects; these will be discussed in greater detail later in this report.
As of the current fiscal year, the City of Rosemead's governmental funds reported
combined ending fund balances of $38,392, an increase of $2,333 in comparison
with the prior year. Approximately 15 percent of the ending fund balance, or $5,806
(unassigned fund balance), is available for spending at the government's discretion.
• At the end of the current fiscal year unassigned fund balance for the General Fund
was $10,209, or 57.6 percent, of total General Fund expenditures.
• The City of Rosemead's total long-term debt increased by $10,203, or 28.3 percent,
during the current fiscal year. Major changes in total debt were: 1) the issuance of
$11,230 of tax allocation bonds, 2) bond principal payments of $975, and 3) a new
capital lease of $275 to pay for financial software. For more detailed information
about the City's long-term debt please refer to Note 7, Changes in Long-Term
Liabilities, found on page 44 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 assets may serve as a useful indicator of whether the financial position of the
City of Rosemead is improving or deteriorating.
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The statement of activities presents information showing how the government's net assets
changed during the most recent fiscal year. All changes in net assets are reported as soon as
the underlying event giving rise to the change occurs, regardless of the timing of related cash
flows. Thus, revenues and expenses are reported in this statement for some items that will only
result in cash flows in future fiscal periods (e.g., uncollected taxes and earned but unused
vacation leave).
Both of the government-wide financial statements distinguish functions of the City of Rosemead
that are principally supported by taxes and intergovernmental revenues (governmental
activities) from other functions that are intended to recover all or a significant portion of their
costs through user fees and charges (business-type activities). The City of Rosemead does not
have any business-type activities. The governmental activities of the City of Rosemead include
general government, public safety, public works, community services, community development,
and parks 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 these component units is reported separately from the
financial information presented for the primary government itself.
The government-wide financial statements can be found on pages 14-15 of this report.
Fund financial statements. A fund is a grouping of related accounts that is used to maintain
control over resources that have been segregated for specific activities or objectives. The City
of Rosemead, like other state and local governments, uses fund accounting to ensure and
demonstrate compliance with finance-related legal requirements. All of the funds of the City of
Rosemead can be divided into three categories: governmental funds, internal service funds and
fiduciary funds.
Governmental funds. Governmental funds are used to account for essentially the same
functions reported as governmental activities in the government-wide financial 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 that of the government-wide financial
statements, it is useful to compare the information presented for governmental funds with similar
information presented for governmental activities in the government-wide financial statements.
By doing so, readers may better understand the long-term impact of the government's near-term
financing decisions. Both the governmental fund balance sheet and the governmental fund
statement of revenues, expenditures, and changes in fund balances provide a reconciliation to
facilitate this comparison between governmental funds and governmental activities.
The City of Rosemead and its component units maintain 17 active governmental funds.
Information is presented separately in the governmental funds balance sheet and in the
governmental funds statement of revenues, expenditures, and changes in fund balances for the
General Fund, Low-Moderate Income Housing Set-Aside Fund, Debt Service Fund,
Redevelopment Agency Capital Projects Fund and City Capital Projects Fund, all five of which
are considered to be major funds. Data from the other 12 governmental funds are combined
4
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 governmental funds. A
budgetary comparison statement has been provided for the General Fund, Low-Moderate
Income Housing Set-Aside Fund, Community Development Block Grant Fund, HOME Program
Fund, Proposition A Fund, Proposition C Fund, Federal Highway Grant Fund, State Gas Tax
Fund, Air Quality Management District Fund, Local Transportation Fund, Street Lighting Fund,
Narcotic Forfeiture and Seizure Fund, Measure R Fund, Rosemead Housing Development
Corporation Fund, Redevelopment Agency Debt Service Fund, Redevelopment Agency Capital
Projects Fund and the City Capital Projects Fund to demonstrate compliance with this budget.
The basic governmental fund financial statements can be found on pages 16 - 21 of this report.
Proprietary funds. The City uses internal service funds to account for its Equipment
Replacement and Information Technology Replacement. Because these services predominantly
benefits governmental rather than business-type functions, they have been included with
governmental activities in the government-wide financial statements. The basic proprietary fund
financial statements can be found on page 22 - 24 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 statements 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 25 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 26 - 57 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 can be found on page 62 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 beginning on page 65 of this report.
In February 2009, GASB released Statement No. 54 which substantially altered the focus and
terminology used in fund balance reporting. The City was required to implement GASB
Statement No. 54 no later than June 30, 2011. Therefore, the components of fund balance, as
directed by Statement No. 54, which are used throughout the financial reports are:
1. Nonspendable fund balance
2. Restricted fund balance
3. Committed fund balance
4. Assigned fund balance
5. Unassigned fund balance
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 (net assets)
by $50,316 at the close of the most recent fiscal year.
A significant portion of the City of Rosemead's net assets (29.3 percent) reflects its investment
in capital assets (e.g., land, buildings, machinery, and equipment); less any related outstanding
debt used to acquire those assets. The City of Rosemead uses these capital assets to provide
services to its citizens; consequently, these assets are not available for future spending.
Although the City of Rosemead's investment in its capital assets is reported net of related debt,
it should be noted that the resources needed to repay this debt must be provided from other
sources, since the capital assets themselves cannot be used to liquidate these liabilities.
City of Rosemead's Net Assets
As of June 30, 2011 and 2010
(thousands)
Current and other assets
$ 49,410
$ 42,101
Capital assets
52,137
44,861
Total assets
101,547
86,962
Long-term liabilities outstanding
46,208
36,005
Other liabilities
5,023
4,556
Total liabilities
51,231
40,561
Net assets:
Invested in capital assets, net of related debt
14,761
12,712
Restricted
24,807
13,199
Unrestricted
10,748
20,490
Total net assets
$ 50,316
$ 46,401
An additional portion of the City of Rosemead's net assets (49.3 percent) represents resources
that are subject to external restrictions on how they may be used. The remaining balance of
unrestricted net assets ($10,748) 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 is able to report positive net asset
balances. The situation also held true for the prior fiscal year.
The government's net assets increased by $3,915 during the current fiscal year. The increase
can be credited to the construction of the Splash Zone aquatic facility which will be paid for with
park grant funds from the State.
6
Governmental activities. Governmental activities increased the City of Rosemead's net
assets by $3,915. Contributing to this change in net assets are the following single-occurrence
events:
• As mentioned above the construction a new aquatic facility that was paid for entirely
with park grant funds,
• Less: An installment to fund Other Post Employment Benefits (OPEB) liabilities of
$645.
City of Rosemead's Changes in Net Assets
Years Ended June 30, 2011 and 2010
(thousands)
Governmental
Activities
2011
2010
Program revenues:
Charges for services
$ 3,108
$ 2,830
Operating grants and contributions
9,039
8,214
Capital grants and contributions
4,252
680
General revenues:
Property taxes
13,656
12,329
Other taxes
5,534
6,100
Investment income
368
389
Intergovernmental, unrestricted
264
169
Other
253
337
Total revenues
36,474
31,048
Expenses:
General government
3,160
5,992
Public safety
8,882
8,880
Public works
11,907
12,891
Community services
596
590
Community development
3,969
2,141
Parks and recreation
2,363
2,734
Interest on long-term debt
1,682
1,492
Total expenses
32,559
34,720
Increase in net assets before transfers
3,915
(3,672)
Tra nsfers
Increase in net assets
3,915
(3,672)
Net assets - June 30, 2010
46,401
50,073
Net assets - June 30, 2011
$ 50,316
$ 46,401
7
Revenues by Source - Governmental Activities
Motor vehicle in-
Investment income. 1;- Other revenue. 1%
F
Transient
taxe
Sales and
19
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
S S C
~~ec ya~~%A
a\~oec Q~~\\` QJ~\\` 5e a e\o~ e``
sec J c\~ y'a
Ve L°
e
Co~~J
J c~
Property taxes, 68%
■ expenses
revenues
8
Financial Analysis of the Government's Funds
The focus of the City of Rosemead's governmental funds is to provide information on the near-
term inflows, and balances of spendable resources. Such information is useful in assessing the
City of Rosemead's financing requirements. In particular, unassigned fund balance may serve
as a useful measure of a government's net resources available for spending at the end of the
fiscal year.
At the end of the current fiscal year, the City of Rosemead's governmental funds reported
combined fund balances of $38,392, an increase of $2,333 in comparison with the prior year.
Approximately 15 percent of this total amount, $5,806, constitutes unassigned fund balance,
which is available for spending at the government's discretion. The remainder of the fund
balance is segregated into nonspendable fund balance, restricted fund balance, committed fund
balance or assigned fund balance to indicate that it is not available for new spending because it
has already been designated for other purposes.
General Fund. The General Fund is the chief operating fund of the City of Rosemead. At the
end of the current fiscal year, the unassigned fund balance of the General Fund was $10,209,
while total fund balance reached $15,319. As a measure of the General Fund's liquidity, it may
be useful to compare both unassigned fund balance and total fund balance to total fund
expenditures. Unassigned fund balance represents 57 percent of total general fund
expenditures, while total fund balance represents 86 percent of that same amount.
The fund balance of the City of Rosemead's General Fund decreased by $1,635 during the
current year. Highlights of the change in fund balance are presented below:
General Fund revenue increased $625 over last year. The main driver relating to
revenue increases came from building permits. Southern California Edison
underwent a major facility expansion to their corporate headquarters; the expansion
helped increase building permit revenue by $668, or 87 percent, over FY 2009-10.
The expansion is now complete and revenues are expected to return to previous
levels.
An updated business license fee resolution was approved by City Council which
more than doubled business fee revenue from $51 in FY 2009-10 to $118 in FY
2010-11.
A comprehensive fee resolution was also adopted by City Council which resulted in a
$48 increase over the prior year for planning, animal control, recreation and aquatic
activities. While the revenue increase of $48 may seem small, it must be pointed out
that during the year the City's two public pools were demolished to make way for two
new pools. The loss of aquatic-based revenue prevented the $48 increase from
being greater this year. The pools will be open FY 2011-12 and a return of aquatic-
based revenue is projected for the coming year.
• Planned capital expenditures were partially funded with $381 of General Fund
reserves. The expenditures included: 1) new generator, 2) impact fee planning
work, 3) playground equipment at various parks, 4) planning work for Hellman Park,
and 5) a central irrigation control system.
Operating cost overruns in the General Services Division were caused by the initial
costs of a new phone system; the Finance Department cost overages were caused
by unexpected expenses for data conversion associated with the implementation of
new financial software; excess bank charges, which were resolved with adjustments
to service levels; excess audit costs associated with changing audit firms; and
excess printing charges. There were additional costs for engineering and building
regulation services that were related to the Edison Company expansion and public
safety costs exceeded budgeted amounts due to labor and benefit costs.
General Fund Budget Analysis. Overall, adjustments to the General Fund revenue budget were
modest, just a 1.8 percent increase. The majority of the adjustments were re-evaluations of
revenue projections for the full year, once six months of actual revenue history was factored into
the estimates. The actual revenue variance was $292, or 1.8 percent, more than the adjusted
budget. Major contributors to the variance in Tax revenues included a shortfall of $130 in
Transient Occupancy Tax caused by non-payment of tax by one of the large hotels, and a
sluggish travel economy as well as a decline in cable TV franchise fees. A positive variance of
$178 in Intergovernmental revenues was due to $54 more than what was projected in Vehicle
License Fees, and $99 more in Sales Tax In-lieu fees. The variances were the outcome of
many variations of projected fees, by the State, to be passed through to local governments. Due
to a large building expansion by Southern California Edison Company an additional $604 than
the original budget was received by the City. Charges for Services, primarily in the Parks and
Recreation Division, were underestimated by approximately $143. Interest earnings were
underestimated by almost 50 percent due to extremely low interest rates and a stagnant
economic recovery. The remainder, Other revenues, was $185 lower than estimated revenue
because of lower than expected collections of law enforcement cost reimbursements, crossing
guard reimbursements from the school district and Federal grants for public safety.
The General Fund original budget was increased by $1,155. The primary contributors to the
increase were: $645 appropriation for the City's unfunded retirement liability, an additional $218
for building inspections needed for the Southern California Edison building expansion, $172 for
additional building and grounds maintenance, $19 for department supplies and $28 for the
purchase of a new service truck. Net actual expenditures were $391 more than the amended
budget because the Finance Department overspent $37 for unexpected costs for hiring
replacement City auditors and additional costs for converting existing data for use in the new
finance software system, as well as $58 for a new telephone system and department supplies.
Public Works was over budget by net $203 due to Park Maintenance overspending. Park
Maintenance salaries and benefits had a $114 deficit, tree maintenance was $30 over budget,
and the water utilities line item was overspent by $52. The Community Development
Department overspent their budget by $224 for plan check fees, netted with other line item
savings for a total deficit of $182. The extra plan check services were needed for the Southern
California Edison building expansion. Parks and Recreation had aggregate savings of $147
largely because of construction of two new aquatics centers, one at Rosemead Park and one at
Garvey Park. The pool construction was paid for with redevelopment and grant money, but pool
operations were General Fund expenditure. There was $190 in savings in the Aquatics Division
because during construction of the pools there were no salary and benefit charges; however,
Aquatics savings were offset by minor operating cost overruns in other Parks & Recreation
divisions.
10
Proposition A, C and Measure R Funds. These three funds are for transportation purposes and
they are all funded with voter approved additions to sales tax. Proposition A Fund is used
mainly for public transportation services (fixed route bus service and Dial-A-Ride services).
Proposition C has some transportation elements to it but it is focused more on transportation
infrastructure maintenance purposes. Measure R mainly focuses on new transportation
infrastructure development. Combined revenues in these three funds have increased $205, or
11.3 percent, over FY 2009-10. Since the transportation taxes are an enhancement to sales tax
we can see that consumer sales are beginning to increase, an early sign of economic recovery.
Expenditures for the Proposition A Fund are increasing as greater efforts are being made to
increase fixed route ridership as are the operating expenditures for Dial-A-Ride in the
Proposition C Fund. The Proposition C Fund had capital expenditures of $329 in FY 2009-10
that were not repeated in FY 2010-11, as the focus is back to operations. Measure R, the
newest of the funds, is beginning to spend its revenue for future project planning.
Low-Moderate Income Housinq Fund. The Low-Moderate Income Housing Fund (Low-Mod
Fund), including transfers, finished the year with a $333 increase in fund balance. The Low-
Mod Fund received its funding primarily from transfers of property tax increment from the
Community Development Commission and then transferred $355 to the Rosemead Housing
Development Corporation, a low income senior housing corporation to subsidize operations of
the Corporation's senior low income housing apartments. As a FY 2011-12 budget balancing
measure, the California legislature and the Governor voted to eliminate redevelopment
agencies. By doing so, the Low-Moderate Income Housing Fund will be eliminated. Without
funding from the Low-Moderate Income Housing Fund the future of the Housing Corporation is
uncertain.
Equipment Replacement and Technology Replacement Funds. As a City budget balancing
measure, departments were not charged an internal service fund allocation in FY 2009-10. In
FY 2010-11 the internal service fund allocations resumed. There were charges to using
departments during the year of $120 and operating expenses of $86. Using departments are
assessed charges for equipment they use. The charges are accumulated in the internal service
funds for future replacement of vehicles and equipment.
Community Development Commission Funds. The combined Community Development
Commission (CDC) funds, debt service and capital projects, increased fund balance by $6,488
from prior year. The major elements in the change of fund balance were the construction of a
new aquatics facility at Rosemead Park for $2,713, miscellaneous capital projects totaling
$1,601 for various capital projects and other operating charges, as well as the issuance of tax
allocation bonds totaling $11,230.
As discussed in the Low-Moderate Income Housing Fund section, the California State
legislature and the Governor have passed legislation dissolving all redevelopment agencies as
a means of reducing the State budget deficit. The consequence will be the confiscation of most
redevelopment assets during the 2011-12 fiscal year by the State and dissolution of the Agency.
Capital Assets and Debt Administration
Capital assets. The City of Rosemead's investment in capital assets for its governmental
activities as of June 30, 2011, amounts to $52,137 (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.
11
Major capital asset events during the current fiscal year included the following:
• Construction of the Rosemead Park Aquatic Facility
• Construction of the "Splash Zone" Aquatic Facility
• Freeway overpass beautification project
City of Rosemead's Capital Assets
(net of depreciation)
(thousands)
Governmental Activities
2011
2010
Land
$ 2,969
$ 2,969
Buildings
16,054
16,612
Improvements other than
Buildings
567
81
Machinery and equipment
170
215
Autos and trucks
375
349
Furniture and office equipment
67
108
Infrastructure
24,503
24,144
Construction in progress
7,432
384
Total
$ 52,137
$ 44,862
Additional information on the City of Rosemead's capital assets can be found in Note 6, found
on pages 43 - 44 of the Basic Financial Report.
Long-term debt. At the end of the current fiscal year, the Rosemead Community Development
Commission had total bonded debt outstanding of $44,745. Of this amount, all of it is backed by
future property tax increment revenues.
City of Rosemead's Outstanding Debt
Revenue Bonds
(thousands)
Tax
ernmental Activities
_1 2010
745
The Rosemead Community Development Commission's total bonded debt increased by$10,255
during the current fiscal year due to debt service payments of $975 and the issuance of tax
allocation bonds of $11,230, leaving bonded indebtedness at $44,745. For more detailed
information about the City's long-term debt please refer to Note 7, Changes in Long-Term
Liabilities, beginning on page 44 of the Basic Financial Report.
12
Economic Factors and Next Year's Budgets and Rates
As discussed throughout this Management's Discussion and Analysis report, there were
modest revenue increases in the FY 2011-12 budget. Accordingly, the budget was
balanced using such items as the sale of Proposition A surplus funds and careful
reductions to service delivery. Sales tax in the City has remained remarkably stable with
only a small decline projected for budget purposes.
At the time the FY 2011-12 budget was being prepared, State legislators and the
Governor had not revealed their budget balancing scheme of dissolving redevelopment
agencies and confiscating the Agency assets. Therefore the balance is adjusted
charging some staffing to redevelopment and funding projects and programs with
redevelopment money. Prior to the dissolution of redevelopment agencies, 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
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.
13
CITY OF ROSEMEAD
Statement of Net Assets
June 30, 2011
Governmental
Activities
Assets:
Cash and investments (note 2)
$ 35,788,364
Receivables:
Accounts
6,320,301
Interest
38,549
Notes
1,364,142
Prepaid expenses
863,171
Deferred charges
628,120
Land held for resale
4,407,616
Capital assets (note 6):
Land
2,968,824
Construction in progress
7,431,882
Other capital assets, net
41,735,938
Total assets 101,546,907
Liabilities
Accounts payable and accrued liabilities
3,785,704
Accrued salaries and benefits
298,165
Retentions payable
395,603
Accrued interest payable
402,454
Unearned revenue
141,108
Non-current liabilities (note 7 to 9):
Due within one year
1,581,546
Due in more than one year
44,626,736
Total liabilities 51,231,316
Net assets
Invested in capital assets, net of related debt
14,760,940
Restricted for:
Public safety
2,655,692
Public works
9,672,504
Community service
94,416
Low and moderate housing
6,841,367
Debt service
5,542,423
Unrestricted
10,748,249
Total net assets
$ 50,315,591
The accompanying notes are an integral part of these financial statements.
14
CITY OF ROSEMEAD
Statement of Activities
Fiscal Year Ended June 30, 2011
Net (expense)
revenue and
changes in
Program Revenues
net assets
Operating Capital
Charges for Contributions Contributions
Governmental
Expenses Services and Grants and Grants
Activities
Governmental activities
General government
$ 3,160,306
$ 362,029
$ 686,698 $ -
$ (2,111,579)
Public safety
8,881,926
303,102
249,040 741,382
(7,588,402)
Public works
11,907,245
154,506
5,478,481 3,510,324
(2,763,934)
Community services
595,904
34,053
415,951 -
(145,900)
Community development
3,969,502
1,558,531
2,195,081 -
(215,890)
Parks and recreation
2,362,860
634,070
20,367 -
(1,708,423)
Interest and other charges
1,681,875
-
- -
(1,681,875)
Total governmental activities
$ 32,559,618
$ 3,046,291
$ 9,045,618 $ 4,251,706
(16,216,003)
General revenues,
Taxes
Property taxes
Sales and use taxes
Transient occupancy taxes
Franchise taxes
Motor vehicle in lieu, unrestricted
Investment income
Other
Total general revenues
Change in net assets
Net assets, beginning of year
Net assets, end of year
13,656,347
3,737, 363
1,219,977
576,904
263,983
367,961
307,658
20,130,193
3,914,190
46,401,401
$ 50,315,591
The accompanying notes are an integral part of these financial statements
15
CITY OF ROSEMEAD
Governmental Funds
Balance Sheet
June 30, 2011
Assets
Cash and investments (note 2)
Receivables:
Accounts
Interest
Notes
Prepaid items
Due from other funds (note 4)
Land held for resale
Advances to other funds
Total assets
Liabilities and Fund Balances
Liabilities:
Accounts payable and accrued liabilities
Accrued salaries and benefits
Retentions payable
Due to other funds (note 4)
Deferred revenue
Advances from other funds (note 4)
Total liabilities
Fund balances:
Nonspendable
Restricted for:
Public safety
Public works
Community services
Low and moderate income housing
Debt service
Committed
Unassigned
Total fund balances (deficit)
Total liabilities and fund balances
General
Special Revenue Debt Service
Low-Moderate
Income Housing Redevelopment
Set-Aside Agency
$ 11,177,197 $
1,279,879
28,775
1,079,277
2,034
4,494,551
2,342,659 $
2,157
4,477,945
10, 044, 954
376,350
1,533
$ 18,061,713 $ 6,822,761 $ 10,422,837
$ 1,573,825 $ 1,814 $ 15
158,842 - -
- 25,153 -
1,009,974 - -
4,477,945
2,742,641 26,967 4,477,960
2.034
5,107, 963
10.209, 075
6,795,794 -
- 5,944,877
15,319,072 6,795,794 5,944,877
$ 18,061,713 $ 6,822,761 $ 10,422,837
The accompanying notes are an integral part of these financial statements.
16
Capital Projects
Redevelopment Non-Major
Agency City Governmental
$ 3,365,822 $ - $
56,862 3,919,755
4,523 -
226,314 -
- 647,283
4,407,616 -
Totals
8,587,798 $ 35,518,430
687,455 6,320,301
1,561 38,549
58,551 1,364,142
- 2,034
- 5,141,834
- 4,407,616
- 4,477,945
$ 8,061,137 $ 4,567,038 $ 9,335,365 $ 57,270,851
$ 856,740 $
789,701 $
408,440 $
3,630,535
100,000
11,299
28,024
298,165
-
372,535
23,068
395,603
702,325
3,467,733
961,835
5,157,046
53,315
3,793,895
62,184
4,919,368
-
-
-
4,477,945
1,712,380
8,435,163
1,483,551
18,878,662
2,034
- - 2,655,692
6,348,757 - 51590,972
- - 94,416
- 45,573
- (3,868,125) (534,839
6,348,757 (3,868,125) 7,851,814
8,061,137 $ 4,567,038 $ 9,335,365
2,655,692
11,939,729
94,416
6,841,367
5,944,877
5,107,963
5,806,111
38,392,189
57,270,851
17
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CITY OF ROSEMEAD
Governmental Funds
Reconciliation of the Balance Sheet of
Governmental Funds to the Statement of Net Assets
June 30, 2011
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 the governmental fund activity.
Capital assets
Accumulated depreciation
Long term debt and compensated absences that have not been included
in the governmental fund activity.
Compensated absences
Retrospective deposits payable
Unamortized bond premiums
Capital leases payable
Tax allocation bonds
Costs associated with the issuance of debt are capitalized and amortized
in the statement of net assets and expensed in the governmental funds.
Deferred charges
Discount on bonds
Accrued interest payable for the current portion of interest due on bonds
payable has not been reported in the governmental funds.
Long-term assets that are not available for current use. Amounts are not
reported in the governmental funds.
Revenues that are measurable but not available. Amounts are recorded as
deferred revenue under the modified accrual basis of accounting.
89,264,479
(37,359,371)
(505,394)
(623,456)
(217,820)
(36,007)
(44,745,000)
628,120
181,054
(402,454)
861.137
4,778,260
Internal service funds are used by management to charge the costs of
certain activities, such as equipment management, to individual funds.
The assets of the internal service funds must be added to the statement
of net assets. 99,854
Net assets of governmental activities
$ 38,392,189
$ 50,315,591
The accompanying notes are an integral part of these financial statements.
18
CITY OF ROSEMEAD
Governmental Funds
Statement of Revenues, Expenditures, and Changes in Fund Balances
Fiscal Year Ended June 30, 2011
Revenues:
Taxes
Intergovernmental
Licenses and permits
Charges for services
Fines, forfeitures and penalties
Special assessments
Investment income
Other
Total revenues
Expenditures:
Current:
General government
Public safety
Public works
Community services
Community development
Parks and recreation
Capital outlay
Debt service:
Principal
Interest and fiscal charges
Bond issuance costs
Total expenditures
Excess (deficiency) of revenues
over (under) expenditures
Other financing sources (uses):
Transfers in (note 4)
Transfers out (note 4)
Discount on bonds
Issuance of long-term debt
Total other financing
sources and (uses)
Net change in fund balances
General
$ 12,419,519
751,955
1,764,162
677,861
462,389
156,032
245,382
Special Revenue
Low-Moderate
Income Housing
Set-Aside
S
6,268
Debt Service
Redevelopment
Agency
$ 6,893,575
56,578
16,477,300 6,268 6,950,153
3,684,113
7,253,698
2,762,543
163,742
1,410, 866
2,362,860
93,121
292,372
115,623
995,468
975,000
1,882,092
17,730,943 292,372 3,968,183
(1,253,643) (286,104) 2,981,970
- 974,464 1,133,461
(381,241) (355,000) (974,464)
(381,241) 619,464 158,997
(1,634,884) 333,360 3,140,967
Fund balances (defecit), beginning of year
16,953,956
6,462,434
2,803,910
Fund balances (deficit), end of year $
15,319,072 $
6,795,794 $
5,944,877
The accompanying notes are an integral part of these financial statements.
19
•
Capital Projects
•
Redevelopment
Non-Major
Agency
City
Governmental
Totals
•
•
$ - $
-
$ - $
19,313,094
1,715,181
6,916,120
9,383,256
-
-
-
1,764,162
•
-
-
677,861
-
-
-
462,389
-
741,382
741,382
•
59,176
-
89,902
367,956
7,997
-
-
253,379
67,173
1,715,181
7,747,404
32,963,479
•
1,750
-
-
3,801,486
-
-
633,749
8,882,915
5,803,685
7,601,816
3,234,880
19,402,924
-
-
432,162
595,904
1,693,834
3,397,072
2,362,860
-
-
-
93,121
•
-
-
-
975,000
-
-
1,882,092
•
275,344
-
-
275,344
6,080,779
7,601,816
5,994,625
41,668,718
(6,013,606)
(5,886,635)
1,752,779
(8,705,239)
-
2,361,994
355,000
4,824,919
•
(1.677.344)
_
(1,436,870)
(4,824,919)
(192,139)
(192,139)
•
11,230,000
-
11,230,000
•
9,360,517
2,361,994
(1,081,870)
11,037,861
3,346,911
(3,524,641)
670,909
2,332,622
•
3,001,846
(343.484)
7,180,905
36,059,567
•
$ 6,348,757 $
(3,868,125)
$ 7,851,814 $
38,392,189
20
CITY OF ROSEMEAD
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, 2011
Net change in fund balances - total governmental funds $ 2,332,622
Amounts reported for governmental activities in the statement of activities
differs from the amounts reported in the statement of activities because:
Governmental funds report capital outlays as expenditures. However, in
the statement of activities, the costs of those assets is allocated over
their estimated useful lives as depreciation expense. This is the amount
by which depreciation exceeded capital outlays in the current period.
Capital outlays
9,215,562
Depreciation
(2,137,513)
The issuance of long-term debt provides current financial resources to
governmental funds, while the repayment of the principal of long-term
debt consumes the current financial resources of governmental funds.
Neither transaction, however, has an effect on net assets.
Principal payments on debt
975,000
Proceeds from long-term debt
(11,230,000)
Discount on issuance
192,139
Cost of issuance
275,344
Some expenses reported in the statement of activities do not require the
use of current financial resources and, therefore, are not reported as
expenditures in governmental funds.
Increase in OPEB asset
536,299
Decrease in accrued interest payable
193,372
Amortization of bond issuance costs
(68,059)
Amortization of issuance discounts
(11,085)
Amortization of bond premiums
19,802
Compensated absences and retrospective deposits payable expenses
reported in the statement of activities do not require the use of current
financial resources and, therefore, are not reported as expenditures in
governmental funds.
Decrease in retrospective deposits payable
96,095
Increase in compensated absences payable
(17,630)
Revenues in the statement of activities that do not provide current
financial resources are not reported as revenues in the funds.
3,510,324
Internal service funds 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 are reported with
governmental activities.
31,918
Change in net assets of governmental activities
$ 3,914,190
The accompanying notes are an integral part of these financial statements
21
CITY OF ROSEMEAD
Statement of Net Assets
Internal Service Funds
June 30, 2011
Current assets:
Cash and investments $ 269,934
Due from other funds 15,212
Total current assets 285,146
Non-current assets:
Capital assets:
Other capital assets, net (note 6) 231,536
Total non-current assets 231,536
516,682
Current liabilities:
Accounts payable
Lease payable - current
Total current liabilities 206,017
Non-current liabilities:
Lease payable 210,811
Total non-current liabilities 210,811
Total liabilities 416,828
Net assets
Invested in capital assets,
net of related debt (30,123)
Unrestricted 129,977
Total net assets $ 99,854
The accompanying notes are an integral part of these financial statements.
22
CITY OF ROSEMEAD
Statement of Revenues, Expenses, and Changes in Fund Net Assets
Internal Service Funds
Fiscal Year Ended June 30, 2011
Operating revenues:
Charges for services $ 119,576
Total operating revenues 119,576
Operating expenses:
Contractual services 47,202
Depreciation 38,589
Total operating expenses 85,791
Operating income 33,785
Non-operating revenues (expenses):
Investment income 5
Interest expense (1,872)
Total non-operating revenues (expenses) (1,867)
Changes in net assets 31,918
Net assets, beginning of year 67,936
Net assets, end of year $ 99,854
The accompanying notes are an integral part of these financial statements.
23
CITY OF ROSEMEAD
Statement of Cash Flows
Internal Service Funds
Fiscal Year Ended June 30, 2011
Cash flows from operating activities:
Cash received from users departments $ 104,364
Cash payments to suppliers for goods and services (49,216)
Net cash provided by operating activities 55,148
Cash flows from capital and related financing activities:
Proceeds from capital lease 275,603
Principal paid on capital lease (13,944)
Interest paid on capital lease (1,872)
Cash paid to purchase capital asset (115,241)
Net cash provided by capital and related financing activities 144,546
Cash flows from investing activities:
Interest on investment 5
Net cash provided by investing activities
Net increase in cash and investments 199,699
Cash and investments, beginning of year
70,235
Cash and investments, end of year
$
269,934
Reconciliation of operating income to net cash
provided by operating activities:
Operating income
$
33,785
Adjustments to reconcile operating income to net
cash provided by operating activities:
Depreciation
38,589
(Increase) decrease in due from other funds
(15,212)
Increase (decrease) in accounts payable
(2,014)
Total adjustments
21,363
Net cash provided by operating activities
$
55,148
Noncash capital, financing and investing activities:
Capital asset acquired through accounts payable
$
154,884
The accompanying notes are an integral part of these financial statements.
24
CITY OF ROSEMEAD
Statement of Fiduciary Assets and Liabilities
June 30, 2011
Assets
Cash and investments
Accounts receivable
Total assets
Liabilities
Deposits payable
Total liabilities
$ 591,716
5,758
$ 597,474
597,474
$ 597,474
The accompanying notes are an integral part of these financial statements.
25
CITY OF ROSEMEAD
Notes to the Basic Financial Statements
Fiscal Year Ended June 30, 2011
(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.
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).
Rosemead Financing Authority
The Authority provides for the financing or refinancing of public capital
improvements and working capital requirements of local agencies that enter into
contractual arrangements with the Authority.
26
CITY OF ROSEMEAD
Notes to the Basic Financial Statements
Fiscal Year Ended June 30, 2011
(1)
Summary of Significant Accounting Policies, (continued)
(a) Reporting Entity, (continued)
Rosemead Community Development Commission
The Commission's purpose is to prepare and carry out plans for the improvement,
rehabilitation, and redevelopment of blighted areas within the City.
The Commission finances street, park and utility improvements, and also acquires
and constructs major capital facilities, all within the Rosemead Project Area No. 1.
Although the Agency is legally separate, it is reported as if it were part of the City
because the City Council also serves as the governing board of the Agency.
Separate financial statements of the Agency can be obtained from the Finance
Department.
Rosemead Housing Development Corporation
The Corporation accounts for the construction, financing and operations of low and
moderate-income housing. It is a California nonprofit benefit corporation organized
under Section 501(c)(3) of the Internal Revenue Code.
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 City'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.
(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.
27
CITY OF ROSEMEAD
Notes to the Basic Financial Statements
Fiscal Year Ended June 30, 2011
(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 discretely
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.
Program revenues include charges for services, special assessments, 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 an 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.
28
CITY OF ROSEMEAD
Notes to the Basic Financial Statements
Fiscal Year Ended June 30, 2011
(1)
Summary of Significant Accounting Policies, (continued)
(b) Basis of Accountinq and Measurement Focus, (continued)
Fund Financial Statements
The underlying accounting system of the City 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 non major
funds in the aggregate for governmental and enterprise funds. Fiduciary
statements include financial information for fiduciary funds and similar component
units. Fiduciary funds of the City primarily represent assets held by the City in
custodial capacity for other individuals or organizations.
Governmental Funds
In the fund financial statements, governmental 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 City
uses a sixty day availability period.
Revenue recognition is subject to the measurable and available criteria for the
government 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.
29
CITY OF ROSEMEAD
Notes to the Basic Financial Statements
Fiscal Year Ended June 30, 2011
(1) Summary of Significant Accounting Policies, (continued)
(b) Basis of Accounting and Measurement Focus, (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.
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.
When both restricted and unrestricted resources are combined in a fund,
expenditures are considered to be paid first from restricted resources, and then
from unrestricted resources.
Fiduciary Funds
The City's fiduciary funds account for assets held by the government in a trustee
capacity or as an agent on behalf of others. Trust funds account for assets held by
the government under the terms of a formal trust agreement.
30
CITY OF ROSEMEAD
Notes to the Basic Financial Statements
Fiscal Year Ended June 30,2011
(1) Summary of Significant Accounting Policies, (continued)
(c) Major and Fiduciary Fund Types
The City's major governmental funds are as follows:
General Fund - Accounts for all financial resources except those required to be
accounted for in another fund. These resources are devoted to financing the
general services that the City performs for its citizens.
Low-Moderate Income Housing Set-Aside Special Revenue Fund - Accounts for
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.
Redevelopment Agency Debt Service Fund - Accounts for the accumulation of
resources for the payment of general long-term debt principal, interest and related
costs.
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.
City Capital Projects Fund - Accounts for financial resources to be used for the
acquisition and 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 these funds.
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.
31
CITY OF ROSEMEAD
Notes to the Basic Financial Statements
Fiscal Year Ended June 30, 2011
(1) Summary of Significant Accounting Policies, (continued)
(d) Investments, (continued)
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.
(f) Capital Assets
Capital assets (including infrastructure) are recorded at cost where historical
records are available and at an estimated historical cost where no historical
records exist. Contributed capital assets are valued at their estimated fair market
value at the date of the contribution. Generally, capital asset purchases in excess
of $10,000 are capitalized if they have an expected useful life of one year or more
years.
Capital assets include public domain (infrastructure) general capital assets
consisting of certain improvements including roads, streets, sidewalks, medians,
and storm drains.
Capital assets used in operations are depreciated 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.
32
CITY OF ROSEMEAD
Notes to the Basic Financial Statements
Fiscal Year Ended June 30, 2011
(1)
Summary of Significant Accounting Policies, (continued)
(f) Capital Assets, (continued)
The following schedule summarizes capital asset useful lives:
Buildings
50 years
Improvements other than buildings
15 years
Machinery and equipment
7 years
Autos and trucks
5 years
Furniture and office equipment
7 years
Infrastructure:
Bridges
50 years
Sewer system and storm drain system
50-100 years
Medians and sidewalks
40 years
Traffic signals
30 years
Streets
20 years
(g) Compensated Absences
Vacation and sick leave pay are payable to employees at the time used or upon
termination of employment. All vacation is accrued when incurred in the
government-wide level financial statements. Sick pay is accrued to the extent it is
probable that the benefits will result in termination payments (i.e., rather than be
taken as absences due to illness or other contingencies, such as medical
appointments and funerals).
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.
33
CITY OF ROSEMEAD
Notes to the Basic Financial Statements
Fiscal Year Ended June 30, 2011
(1)
Summary of Significant Accounting Policies, (continued)
(h) Prepaid Items
Prepaid items are reported
method and are offset by a
that they are not available
resources.
(i) Fund Equity
in the governmental fun
nonspendable designation
for appropriation and ar
is under the consumption
in fund balance to indicate
not expendable financial
The City implemented GASB Statement No. 54, Fund Balance Reporting ano
Governmental Fund Type Definitions during the year ended June 30, 2011. This
statement provides more clearly defined fund balance categories to make the
nature and extent of the constraints placed on a government's fund balance more
transparent. The following classifications describe the relative strength of the
spending constraints placed on the purposes for which resources can be used:
• Nonspendable - amounts that are not in a spendable form (such as inventory)
or are required to be maintained intact.
• Restricted - amounts constrained to specific purposes by their providers (such
as grantors, bondholders and higher levels of government), through
constitutional provisions or by enabling legislation.
• Committed - amounts constrained to specific purposes by a government itself,
using the highest level of decision-making authority; to be reported as
committed, amounts cannot be used for any other purpose unless the
government takes the same highest level action to remove or change the
constraint.
• Assigned - amounts a government intends to use for a specific purpose; intent
can be expressed by the governing body or by an official or body to which the
governing body delegates the authority.
• Unassigned - amounts that are for any purpose; positive amounts are reported
only in a general fund.
The City Council establishes (and modifies or rescinds) fund balance commitments
by passage of an ordinance or resolution. The City Council has designated the
Finance Committee and City Manager as the City officials to determine, define, and
make the necessary account or fund transfers for the amounts to those
components of fund balance that are classified as "Assigned Fund Balance".
When both restricted and unrestricted resources are available for use when an
expenditure is incurred, it is the City's policy to use restricted resources first, then
unrestricted resources as they are needed. It is the City's policy to consider
committed amounts as being reduced first, followed by assigned amounts, and
then unassigned amounts when expenditures are incurred for purposes for which
amounts in any of those unrestricted fund balance classifications could be used.
34
CITY OF ROSEMEAD
Notes to the Basic Financial Statements
Fiscal Year Ended June 30, 2011
(1)
Summary of Significant Accounting Policies, (continued)
0) 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) 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 prepayment
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.
(2)
Cash and Investments
Cash and investments as of June 30, 2011 are classified in the accompanying financial
statements as follows:
Statement of Net Assets:
Cash and investments $ 35,788,364
Statement of Fiduciary Assets and Liabilities:
Cash and investments 591,716
Total cash and investments $ 36,380,080
Cash and investments as of June 30, 2011 consist of the following:
Deposits with financial institutions $ 10,042,476
Investments 26, 337,604
Total cash and investments $ 36,380,080
35
CITY OF ROSEMEAD
Notes to the Basic Financial Statements
Fiscal Year Ended June 30, 2011
(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.
Authorized
by Maximum Maximum
Investment Types Investment Maximum Percentage Investment in
Authorized by State Law Policy Maturity* of Portfolio* One Issuer*
US Treasury Obligations
Yes
5 years
None
None
US Agency Securities
Yes
5 years
None
None
Bankers Acceptances
Yes
270 days
40%
10%
Commercial Paper
Yes
270 days
25%
10%
Negotiable Certificate of Deposit
Yes
3 year
30%
None
Repurchase Agreements
No
NIA
NIA
N/A
Reverse Repurchase Agreements
No
N/A
N/A
N/A
Medium-Term Notes
Yes
3 years
15%
10%
Money Market Mutual Funds
Yes
N/A
None
None
Local Agency Investment Funds (LAIF)
Yes
N/A
None
None
* Based on state law requirements or investment policy requirements, whichever is more
restrictive.
36
CITY OF ROSEMEAD
Notes to the Basic Financial Statements
Fiscal Year Ended June 30, 2011
(2)
Cash and Investments, (continued)
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
Maximum Percentage Investment in
Authorized Investment Type Maturity of Portfolio One Issuer
US Treasury Obligations
5 years
None
None
US Agency Securities
5 years
None
None
Banker's Acceptances
270 days
40%
10%
Commercial Paper
180 days
10%
10%
Money Market Portfolio
1 year
None
None
Investment Agreements
None
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 City 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.
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:
37
CITY OF ROSEMEAD
Notes to the Basic Financial Statements
Fiscal Year Ended June 30, 2011
(2) Cash and Investments, (continued)
Investment Type
State investment pool
Certificates of deposits
US agency securities
Held by bond trustee:
Money market mutual funds
Certificates of deposit
Total
Total
Remaining Maturity (in months)
12 months 13 to 24 25 to 60
or less months months
$ 21, 089, 353
$ 21, 089, 353 $ -
$ -
1,483, 526
490,000 490,000
503,526
1,497,500
- -
1,497,500
1,144, 225
1,144, 225 -
-
1,123,000
- -
1,123,000
$ 26,337,604 $ 22,723,578 $ 490,000 $3,124,026
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.
Rating as of Year End
Minimum
Legal
Investment Type Total Rating AAA Not Rated
State investment pool
$ 21,089,353
N/A
$ - $ 21,089,353
Certificates of deposits
1,483,526
N/A
- 1,483,526
US agency securities
1,497,500
AAA
1,497,500 -
Held by bond trustee:
Money market mutual funds
1,144,225
N/A
1,144,225 -
Certificates of deposit
1,123, 000
- 1,123, 000
Total
$ 26,337,604
$ 2,641,725 $ 23,695,879
38
CITY OF ROSEMEAD
Notes to the Basic Financial Statements
Fiscal Year Ended June 30, 2011
(2)
Cash and Investments, (continued)
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 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 fair 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 City deposits by pledging first trust deed mortgage notes
having a value of 150% of the secured public deposits. As of June 30, 2011 the City had
no deposits with financial institutions in excess of federal depository insurance limits held
in uncollateralized accounts.
Investment in State Investment Pool
The City 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 City's investment in this pool is reported in the
accompanying financial statements at amounts based upon the City'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.
39
CITY OF ROSEMEAD
Notes to the Basic Financial Statements
Fiscal Year Ended June 30, 2011
(3) Property Taxes
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:
(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.
40
CITY OF ROSEMEAD
Notes to the Basic Financial Statements
Fiscal Year Ended June 30, 2011
(4)
Interfund Receivables and Payables
Current interfund receivables and payables balances at June 30, 2011 are as follows:
Due from other funds
Due to other funds Amount
General Fund Low-Moderate Income
Redevelopment Agency
Capital Projects Fund
City Capital Projects Fund
Non-Major Governmental Funds
City Capital Projects Fund Redevelopment Agency
Capital Projects Fund
Non-Major Governmental Funds
Proprietary Funds
Non-Major Governmental Funds
Redevelopment Agency
Capital Projects Fund
Total
(A) Short-term borrowing to cover temporary cash deficits.
$ 25,153
98,563
3,467,733 (A)
903,102 (A)
4,494, 551
599,351
47,932
647,283
10,801
4,411
15.212
$ 5,157,046
Noncurrent interfund receivable and payable balances at June 30, 2011 are as follows:
Advances from other funds Advances to other funds
Redevelopment Agency Low-Moderate Income
Debt Service Fund Housing Set-Aside
Total
Amount
$ 4,477,945 A
$ 4,477,945
41
CITY OF ROSEMEAD
Notes to the Basic Financial Statements
Fiscal Year Ended June 30, 2011
(4)
(5)
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, 2011, 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.
Interfund Transfers
Interfund transfers were as follows for the year ended June 30, 2011:
Transfers In Transfers Out
City Capital Projects Fund
General Fund
Redevelopment Agency
Capital Projects Fund
Non-Major Governmental Funds
Low-Moderate Income
Housing Set-Aside
Redevelopment Agency
Debt Service Fund
Redevelopment Agency
Debt Service Funds
Redevelopment Agency
Capital Projects Fund
Low-Moderate Income
Non-Major Governmental Funds Housing Set-Aside
Total
Am ount
$ 381,241
543,883
1,436,870
2,361,994 (A)
974,464 (B)
1,133,461 P
355,000
$ 4,824,919
The following describes the significant transfers in and transfers out included in the
financial statements:
(A) To subsidize various programs and capital projects.
(B) To record the low and moderate income housing set-aside for the year ended
June 30, 2011.
(C) To record the Series 2010A Tax Allocation Bond proceeds deposited into the
2010 Debt Service Reserve Fund.
42
CITY OF ROSEMEAD
Notes to the Basic Financial Statements
Fiscal Year Ended June 30, 2011
(6) Capital Assets
Capital asset activity was as follows for the year ended June 30, 2011:
Beginning
Ending
Governmental activities:
balance
Additions
Deletions
balance
Capital assets, not being depreciated:
Land
$ 2,968,824
$ -
$ -
$ 2,968,824
Construction in progress
383,536
7,431,882
(383,536)
7,431,882
Total capital assets, not being
3,352,360
7,431,882
(383,536)
10,400,706
Capital assets, being depreciated:
Buildings
23, 994, 956
-
-
23, 994, 956
Improvements other than buildings
1,027,097
612,606
-
1,639,703
Machinery and equipment
1,013,935
-
-
1,013,935
Autos and trucks
866,298
61,128
-
927,426
Furniture and office equipment
2,501,386
-
-
2,501,386
Infrastructure
47,327,022
1,729,470
-
49,056,492
Total capital assets, being depreciated
76,730,694
2,403,204
-
79,133,898
Less accumulated depreciation for.
Buildings
(7,383,199)
(557,378)
-
(7,940,577)
Improvements other than buildings
(946,473)
(126,509)
-
(1,072,982)
Machinery and equipment
(798,659)
(45,510)
-
(844,169)
Autos and trucks
(517,539)
(35,361)
-
(552,900)
Furniture and office equipment
(2,393,202)
(41,108)
-
(2,434,310)
Infrastructure
(23,182,786)
(1,370,236)
-
(24,553,022)
Total accumulated depreciation
(35,221,858)
(2,176,102)
-
(37,397,960)
Total capital assets, being depreciated, net 41,508,836 227,102 - 41,735,938
Governmental activities capital assets, net
of accumulated depreciation $44,861,196 $ 7,658,984 $(383,536) $52,136,644
43
CITY OF ROSEMEAD
Notes to the Basic Financial Statements
Fiscal Year Ended June 30, 2011
(6)
(7)
Capital Assets, (continued)
Depreciation expense was charged to functions/programs of the primary government as
follows:
Governmental activities:
Public works
Community development
Total depreciation expense
Changes in Long-Term Liabilities
$ 1,670,990
505,112
$ 2,176,102
Long-term debt consists of the following at June 30, 2011:
Governmental activities:
Bonds:
Tax Allocation Bonds,
Series 2006A
Tax Allocation Bonds,
Series 2006B
Tax Allocation Bonds,
Series 2010A
Beginning
Balance Additions
$10,700,000 $ -
23, 790, 000
Ending Due in
Deletions Balance One Year
Subtotal bonds
Deferred amounts:
Unamortized bond
premiums
Discount on issuance
Total bonds
$ 900,000 $ 9,800,000 $ 930,000
75,000 23, 715, 000 80,000
11,230,000 11,230,000 200,000
34, 490, 000 11, 230, 000 975,000 44, 745, 000 1,210,000
237,622 - 19,802 217,820 19,802
(192,139) (11,085) (181,054) (14,780)
34,727,622 11,037,861 983,717 44,781,766 1,215,022
Capital lease 70,144
- 34,137
36,007
36,007
Computer lease -
275,000 13,341
261,659
50,848
Retrospective deposit 719,551
- 96,095
623,456
62,350
Compensated absences 487,764
265,661 248,031
505,394
217,319
Total long-term debt $36,005,081 $11,578,522 $1,375,321 $46,208,282 $1,581,546
The City records expenditures related to compensated absences through the City's
General Fund.
44
CITY OF ROSEMEAD
Notes to the Basic Financial Statements
Fiscal Year Ended June 30, 2011
(7)
Changes in Long-Term Liabilities, (continued)
Capital Lease
In 2010, the City entered into a lease agreement for the acquisition of an aerial lift truck.
The lease agreement qualifies as a capital lease for accounting purposes (title transfer
at end of lease) and, therefore, has been recorded at the present value of the future
minimum lease payments as of the date of inception. The equipment acquired during the
fiscal year under this lease agreement is recorded at its acquisition cost of $102,851.
The outstanding balance at June 30, 2011was $36,007.
In 2011, the City entered into a lease agreement for the acquisition of finance computer
software. The lease agreement qualifies as a capital lease for accounting purposes and,
therefore, has been recorded at the present value of the future minimum lease payments
as of the date of inception. The equipment acquired during the fiscal year under this
lease agreement is recorded at its acquisition cost of $270,125. The outstanding balance
at June 30, 2011was $261,659.
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.
Governmental
Activities
2012
2013
2014
2015
2016
Subtotal
Less amount representing interest
Present value of future lease payments
$ 98,836
60,849
60,849
60,849
45,637
327,020
(29,354)
$ 297,666
Accumulated depreciation on assets purchased through lease agreements are as
follows:
Assets:
Autos and trucks
Improvements other than buildings
Less: accumulated depreciation
Governmental
Activities
$ 102,851
270,125
(59,159)
Total
$ 313,817
45
CITY OF ROSEMEAD
Notes to the Basic Financial Statements
Fiscal Year Ended June 30, 2011
(7) Changes in Long-Term Liabilities, (continued)
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, 2011 was $217,820. As of June 30,
2011 the outstanding balance was $9,800,000.
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. A surety bond
has been acquired to satisfy the reserve requirements. As of June 30, 2011 the
outstanding balance was $23,715,000.
Tax Allocation Bonds, Series 2010A
In July 2010, the Commission issued $11,230,000 in Merged Project Area Tax Allocation
Bonds. The bonds mature in amounts ranging from $200,000 to $1,135,000 with interest
rates ranging from 3.00% to 5.00% through December 1, 2023. 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
is payable annually on December 1, beginning on December 1, 2011. Interest is payable
semi-annually on June 1 and December 1. Per the bond indenture, a reserve is required
to be maintained. At June 30, 2011, the balance held in the reserve account was
$1,143,054. As of June 30, 2011 the outstanding balance was $11,230,000.
46
CITY OF ROSEMEAD
Notes to the Basic Financial Statements
Fiscal Year Ended June 30, 2011
(7)
(8)
Changes in Long-Term Liabilities, (continued)
At June 30, 2011, debt service requirements to maturity for governmental activities long-
term debt are as follows:
Fiscal years ending
June 30, Principal
2012
2013
2014
2015
2016
2017-2021
2022-2026
2027-2031
2032-2034
Totals
$ 1,210,000
1,795,000
1,855,000
1,920,000
1,995,000
11, 360, 000
10, 515, 000
8,215,000
5,880,000
$ 44,745,000
Post Employment Benefit Plan
Interest
$ 1,902,336
1,852,124
1,790,511
1,718,574
1,635,579
6,777,216
4,188,559
2,279,891
399,406
$ 22,544,196
Plan Description: The City administers a single employer defined benefit plan which
provides medical insurance benefits to eligible retirees and their spouses in accordance
with various labor agreements. The City has not established a trust that is administered
by the City for the purpose of holding assets accumulated for plan benefits. After age 65,
Medicare automatically becomes the primary provider of health coverage. The City's
defined benefit plan becomes the secondary provider. Eligible retirees will have no
noticeable change in health benefits or plan administration; however, there is a reduction
in the City's cost of health coverage as the secondary provider. The City's defined
benefit plan administrator establishes the cost of secondary provider rates annually. The
City will pay 100% for eligible retirees' health coverage.
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 following at January 1, 2008, the date of the
latest actuarial valuation:
Retirees and beneficiaries receiving benefits 14
Active plan members 30
Total 44
47
CITY OF ROSEMEAD
Notes to the Basic Financial Statements
Fiscal Year Ended June 30, 2011
(8)
Post Employment Benefit Plan, (continued)
City's Funding Policy. The contribution requirements of plan members and the City are
established and may be amended by City Council. 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 2010-11, the
City contributed $127,584 to the plan for current premiums.
Annual OPEB Cost and Net OPEB Obligation. The City's annual other postemployment
benefit (OPEB) cost (expense) is calculated based on the annual required contribution of
the employer (ARC), an amount actuarially determined in accordance with the
parameters of GASB Statement No. 45. The ARC represents a level of funding that, if
paid on an ongoing basis, is projected to cover normal cost each year and amortize any
unfunded actuarial liabilities (or funding excess) over a period not to exceed thirty years.
The following table shows the components of the City's annual OPEB cost for the year,
the amount actually contributed to the plan, and changes in the City's net OPEB
obligation for these benefits:
Annual required contribution
$ 273,591
Interest on net OPEB obligation
(14,618)
Adjustment to annual required contribution
11,430
Annual OPEB cost (expense)
270,403
Contributions made
(806,702)
Increase in net OPEB obligation
(536,299)
Net OPEB obligation - beginning of year
(324,838)
Net OPEB obligation - end of year
$ (861,137)
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 2011 and the two preceding years were as follows:
Percentage
Net
of Annual
OPEB
Fiscal
Annual OPEB
OPEB Cost
Obligation
Year
Cost
Contributed
(Asset)
6/30/2009
$ 284,778
46%
$ 153,291
6/30/2010
$ 284,778
268%
$ (324,838)
6/30/2011
$ 270,403
298%
$ (861,137)
48
CITY OF ROSEMEAD
Notes to the Basic Financial Statements
Fiscal Year Ended June 30, 2011
(8) Post Employment Benefit Plan, (continued)
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.
Actuarial Methods and Assumptions. Projections of benefits for financial reporting
purposes are based on the substantive plan (the plan as understood by the employer
and the plan members) and include the types of benefits provided at the time of each
valuation and the historical pattern of sharing of benefit costs between employer and
plan members to that point. The actuarial methods and assumptions used include
techniques that are designed to reduce the effects of short-term volatility in actuarial
accrued liabilities and the actuarial assets, consistent with the long-term perspective of
the calculations.
The actuarial cost method used for determining the benefit obligations is the Frozen
Entry Age Actuarial Cost Method. The actuarial assumptions included a 4.5 percent
investment rate of return, which is the assumed rate of the expected long-term
investment returns on plan assets calculated based on the funded level of the plan at the
valuation date, and an annual healthcare cost trend rate of 10 percent initially, reduced
by decrements of 0.5 per year to an ultimate rate of 5 percent after the tenth year. The
UAAL is being amortized as a level percentage of projected payroll over 30 years on a
closed basis. It is assumed the City's payroll will increase 3.25% per year.
Required Supplementary Information: Schedule of Funding Progress
Entry Age Actuarial Unfunded UAAL as a
Actuarial Actuarial Accrued Value of AAL Funded Covered % of Covered
Valuation Liability (AAL) Assets (UAAL) Ratio Payroll Payroll
Date (a) (b) (a - b) (b / a) (c) ((a-b)/c)
1/1/2008
$ 3,548,605 $ -
$ 3,548,605
0%
$ 1,682,985
211%
N/A
N/A N/A
N/A
N/A
N/A
N/A
N/A
N/A N/A
N/A
N/A
N/A
N/A
49
CITY OF ROSEMEAD
Notes to the Basic Financial Statements
Fiscal Year Ended June 30, 2011
(9) Risk Management
Self-insurance pool pursuant to joint powers agreement
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 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.
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
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
prefunded 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: $35,000,000 per occurrence with a
$20,000,000 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
pooled separately between public safety and non-public safety.
50
CITY OF ROSEMEAD
Notes to the Basic Financial Statements
Fiscal Year Ended June 30, 2011
(g)
Risk Management, (continued)
Costs are allocated to members by the follo%
of coverage: (1) the first $50,000 of each
primary deposit; (2) losses from $50,000 to 9
associated with losses up to $100,000 are
losses under $50,000; (3) losses from $100,C
reserves associated with those losses are
$2,000,000 up to statutory limits are paid and
provided per statutory liability under Californi,
ng methods within each of the four layers
)ss is charged directly to the member's
00,000 and the loss development reserve
)ooled based on the member's share of
0 to $2,000,000 and the loss development
ooled based on payroll; (4) losses from
r an excess insurance policy. Protection is
Norkers' Compensation law.
Employer's Liability losses are pooled among members to $2,000,000, coverage from
$2,000,000 to $5,000,000 is purchased as part of an excess insurance policy, and
losses from $5,000,000 to $10,000,000 are pooled among members.
The City participates in the pollution legal liability and remediation legal liability insurance
which is available through the Authority. The policy covers sudden and gradual pollution
of scheduled property, streets, and storm drains owned by City of Rosemead. Coverage
is on a claims-made basis. There is a $50,000 deductible. The Authority has a limit of
$50,000,000 for the 3-year period from July 1, 2008 through July 1, 2011. Each member
of the Authority has a $10,000,000 sub-limit during the 3-year term of the policy.
During the past three fiscal years, none of the above 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.
As of June 30, 2011 the City had retrospective deposits payable to the Authority in the
amount of $623,456. The deposit will be repaid through adjustments to premiums over
the next three years. The retrospective deposit payable has been included in noncurrent
liabilities on the Statement of Net Assets.
51
CITY OF ROSEMEAD
Notes to the Basic Financial Statements
Fiscal Year Ended June 30, 2011
(10) Retirement Plan
Defined Benefit Pension Plan
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 a 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 be obtained by writing to 400 "P" Street,
Sacramento, California 95814.
Contributions and Funding Policy
Miscellaneous participants are required to contribute 7% of their annual covered salary.
The City is required to contribute at an actuarially determined rate. The rate for the year
ended June 30, 2011 is 22.476% percent of annual covered payroll. The contribution
requirements of plan members and the City are established and may be amended by
City Council in conjunction with applicable labor contracts. The City's contributions to the
miscellaneous plan for the years ending June 30, 2009, 2010, and 2011 were
$1,428,348, $1,361,873, and $1,191,665 respectively, and were equal to the required
contributions for each year.
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 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 11. That report may be obtained by
writing to PARS, 3961 MacArthur Boulevard, Suite 200, Newport Beach, California,
92660.
52
CITY OF ROSEMEAD
Notes to the Basic Financial Statements
Fiscal Year Ended June 30, 2011
(10) Retirement Plan, (continued)
An actuarial valuation of the City of Rosemead Supplemental Defined Benefit Pension
Plan was performed as of July 1, 2011 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 2010 and 2011 was 14.63%.
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, 2011
Entry Age Normal
Level Dollar
Market Value
6.50 % 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.
The Schedule of Funding Progress below shows 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.
Required Supplementary Information: Schedule of Funding Progress
Entry Age
Actuarial
Unfunded
UAAL as a
Actuarial Actuarial Accrued
Value of
AAL
Funded Co\ered
% of Co\ered
Valuation Liability (AAL)
Assets
(UAAL)
Ratio Payroll
Payroll
Date (a)
(b)
(a - b)
(b / a) (c)
((a-b)/c)
7/1/2006
$
2,973,299
$ 1,438,282
$
1,535,017
48.
37%
$2,367,310
64.84%
7/1/2008
$
2,242,154
$ 1,910,854
$
331,300
85.
22%
$3,747,667
8.84%
7/1/2010
$
2,778,943
$ 1,833,895
$
945,048
65.
99%
$3,678,700
25.69%
53
CITY OF ROSEMEAD
Notes to the Basic Financial Statements
Fiscal Year Ended June 30, 2011
(10) Retirement Plan, (continued)
Supplemental Defined Benefit Pension Plan - continued
Three-year trend information:
Annual Pension Cost (Employer Contribution)
Fiscal
Employer
Percentage
Net Pension
Year
Contribution
Contributed
Obligation
6/30/2009
$ 74,317
100%
$ -
6/30/2010
$ 70,019
100%
$ -
6/30/2011
$ 69,010
100%
$ -
(11) Commitments and Contingencies
The City is a member of the Los Angeles County Liability Trust Fund (the Trust Fund),
which was set up to pay for litigation involving the Los Angeles County Sheriffs'
Department within any of the 40 cities that are served by the Los Angeles County
Sheriffs' Department. The Trust Fund was and is being funded by the 40 cities based
upon each city's allocated surcharge, calculated as a percentage of each city's
contribution to the total contracted amount with the County paid to Los Angeles County
for the use of its deputies. Based upon the agreement signed by all of the 40 cities at the
time the Trust Fund originated, the cities will be jointly liable for any and all claims filed
against the Los Angeles County Sheriffs' Department, regardless of the location within
the 40 cities.
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.
54
CITY OF ROSEMEAD
Notes to the Basic Financial Statements
Fiscal Year Ended June 30, 2011
(12) Fund Deficits
The following funds had deficit balances as of June 30, 2011:
Major Governmental Fund:
Capital Project:
City Capital Projects $ 3,868,125
Non-Major Funds:
Special Revenue:
HOME Program 462,746
Federal Highway Grant 72,093
The fund deficits noted above primarily relate to expenditures charged to projects during
the fiscal year ended June 30, 2011, which were submitted for reimbursement.
(13) Expenditures in Excess of Appropriations
Expenditures exceeded appropriations in the following funds:
Fund
Budget
Actual
Variance
General
$ 17,339,924
$ 17,730,943
$ (391,019)
Low-Mederate Income
Housing Set-Aside
261,200
292,372
(31,172)
RDA Debt Service
3,529,700
3,968,183
(438,483)
Proposition C
732,695
745,020
(12,325)
State Gas Tax
984,634
1,075,439
(90,805)
AQMD
-
20,757
(20,757)
RHDC
797,500
803,834
(6,334)
55
CITY OF ROSEMEAD
Notes to the Basic Financial Statements
Fiscal Year Ended June 30, 2011
(14) Recent Changes in Legislation Affecting California Redevelopment Agencies
On June 29, 2011, the Governor of the State of California signed Assembly Bills X1 26
and 27 as part of the State's budget package. Assembly Bill X1 26 requires each
California redevelopment agency to suspend (effective July 1, 2011) nearly all activities
except to implement existing contracts, meet already-incurred obligations, preserve its
assets and prepare for the impending dissolution of the agency. Assembly Bill X1 27
provides a means for redevelopment agencies to continue to exist and operate by
means of a Voluntary Alternative Redevelopment Program. Under this program, each
agency would adopt an ordinance agreeing to make certain payments to the County
Auditor Controller in fiscal year 2011-12 and annual payments each fiscal year
thereafter. Assembly Bill X1 26 indicates that the agency "may use any available funds
not otherwise obligated for other uses" to make this payment. The Agency intends to use
available monies of its redevelopment agency for this purpose. The amounts to be paid
after fiscal year 2012-13 have yet to be determined by the state legislature.
Assembly Bill X1 26 directs the State Controller of the State of California to review the
propriety of any transfers of assets between redevelopment agencies and other public
bodies that occurred after January 1, 2011. If the public body that received such
transfers is not contractually committed to a third party for the expenditure or
encumbrance of those assets, the State Controller is required to order the available
assets to be transferred to the public body designated as the successor agency by
Assembly Bill X1 26.
The League of California Cities and the California Redevelopment Association (CRA)
filed a lawsuit on July 18, 2011 on behalf of cities, counties and redevelopment agencies
petitioning the California Supreme Court to overturn Assembly Bills X1 26 and 27 on the
grounds that they violate the California Constitution. On August 11, 2011, the California
Supreme Court issued a stay of all of Assembly Bill X1 27 and most of Assembly Bill X1
26. The California Supreme Court stated in its order that "the briefing schedule is
designed to facilitate oral argument as early as possible in 2011, and a decision before
January 15, 2012." A second order issued by the California Supreme Court on August
17, 2011 indicated that certain provisions of Assembly Bills X1 26 and 27 were still in
effect and not affected by its previous stay, including requirements to file an appeal of
the determination of the community remittance payment by August 15, the requirement
to adopt an Enforceable Obligations Payment Schedule ("EOPS") by August 29, 2011,
and the requirement to prepare a preliminary draft of the initial Recognized Obligation
Payment Schedule ("ROPS") by September 30, 2011.
56
Ile
CITY OF ROSEMEAD
Notes to the Basic Financial Statements
Fiscal Year Ended June 30, 2011
(14)
Recent Changes in Legislation Affecting California Redevelopment Agencies,
(continued)
Because the stay provided by Assembly Bill X1 26 only affects enforcement, each
agency must adopt an Enforceable Obligation Payment Schedule and draft Recognized
Obligation Payment Schedule prior to September 30, as required by the statute.
Enforceable obligations include bonds, loans and payments required by the federal or
state government; legally enforceable payments required in connection with agency
employees such as pension payments and unemployment payments, judgments or
settlements; legally binding and enforceable agreements or contracts; and contracts or
agreements necessary for the continued administration or operation of the agency that
are permitted for purposes set forth in ABX1 26.
On August 9, 2011, the Commission adopted Ordinance No. 917 indicating it will comply
with the Voluntary Alternative Redevelopment Program in order to permit the continued
existence and operation of the agency, in the event Assembly Bills X1 26 and/or 27 are
upheld as constitutional. The initial payment by the agency is estimated to be
$2,112,991 with one half due on January 15, 2012 and the other half due May 15, 2012.
Thereafter, an estimated $500,000 will be due annually. The semi-annual payments will
be due on January 15 and May 15 of each year and would increase or decrease with
changes in tax increment. Additionally, an increased amount would be due to schools if
any new debt is incurred. Assembly Bill X1 27 allows a one-year reprieve on the
agency's obligation to contribute 20% of tax increment to the low and moderate income
housing fund so as to permit the Agency to assemble sufficient funds to make its initial
payments.
On December 29, 2011, the California Supreme Court upheld the constitutionality of
Assembly Bill X1 26 and declared Assembly Bill X1 27 to be unconstitutional. This
decision, which will abolish all redevelopment agencies unless further action is taken by
the California Legislature, will have various implications on the City, the extent of which
is unknown as of the date of this report.
57
•
•
•
•
•
•
•
•
•
•
•
•
•
Required Supplementary Information
58
CITY OF ROSEMEAD
Note to the Required Supplementary Information
Fiscal Year Ended June 30, 2011
(1)
Budgetary Information
Annual budgets are legally adopted on a basis consistent with accounting principles
generally accepted in the United States of America for all governmental funds. All annual
appropriations lapse at fiscal year end.
On or before the last day in March of each year, 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 and 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 (Le.. the level at which 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 governmental funds. Encumbrances (e.g.,
purchase orders, and contracts) outstanding at year end do not constitute expenditures
or liabilities because the commitments will be reappropriated and honored during the
subsequent year.
59
CITY OF ROSEMEAD
General Fund
Schedule of Revenue, Expenditures, and Changes in Fund Balances - Budget and Actual
Fiscal Year Ended June 30, 2011
Revenues:
Taxes
Intergovernmental
Licenses and permits
Charges for services
Fines, forfeitures and penalties
Investment income
Other
Total revenues
Expenditures:
Current:
General government
Public safety
Public works
Community services
Community development
Park and recreation
Capital outlay
Orginal Final
Budget Budget
$ 12,608,323 $ 12,608,323 $ 12,419,519 $ (188,804)
574,000
574,000
751,955
177,955
1,217,500
1,217,500
1,764,162
546,662
535,000
535,000
677,861
142,861
520,000
520,000
462,389
(57,611)
300,000
300,000
156,032
(143,968)
430,000
430,000
245,382
(184,618)
Variance
Positive
Actual (Negative)
16,184,823 16,184,823 16,477,300
2,932,500
7,196,500
2,365,000
1,001,000
2,689,800
3,579,600
7,203,700
2,560,010
160,000
1,229,025
2,509,800
97,789
3,684,113
7,253,698
2,762,543
163,742
1,410,866
2,362,860
93,121
292,477
(104,513)
(49,998)
(202,533)
(3,742)
(181,841)
146,940
4,668
Total expenditures 16,184,800 17,339,924 17,730,943 (391,019)
Excess (deficiency) of revenues
over (under) expenditures 23 (1,155,101) (1,253,643) (98,542)
Other financing sources (uses):
Transfers out - - (381,241) (381,241)
Total other financing sources (uses) - - (381,241) (381,241)
Net change in fund balance 23 (1,155,101) (1,634,884) (479,783)
Fund balance, beginning of year
Fund balance, end of year
16,953,956 16,953,956 16,953,956
$ 16,953,979 $ 15,798,855 $ 15,319,072 $ (479,783)
60
CITY OF ROSEMEAD
Low-Moderate Income Housing Set-Aside
Schedule of Revenue, Expenditures, and Changes in Fund Balances - Budget and Actual
Fiscal Year Ended June 30, 2011
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)
Variance
Orginal Final Positive
Budget Budget Actual (Negative)
$ - $ - $ 6,268 $ 6,268
6,268 6,268
511,200 261,200
511,200 261,200
292,372 (31,172)
292,372 (31,172)
(511,200) (261,200)
(286,104) (24,904)
903,500 - 974,464 974,464
(250,000) (250,000) (355,000) (105,000)
653,500 (250,000) 619,464 869,464
Net change in fund balance
142,300
(511,200)
333,360 844,560
Fund balance, beginning of year
6,462,434
6,462,434
6,462,434 -
Fund balance, end of year
$ 6,604,734
$ 5,951,234
$ 6,795,794 $ 844,560
61
CITY OF ROSEMEAD
Required Supplementary Information
Fiscal Year Ended June 30, 2011
(2) Public Agency Retirement Services (PARS) - Retirement Enhancement Plan
Schedule of Funding Progress
Entry Age
Actuarial
Unfunded
UAAL as a
Actuarial Actuarial Accrued
Value of
AAL
Funded Covered
% of Covered
Valuation Liability (AAL)
Assets
(UAAL)
Ratio Payroll
Payroll
Date (a)
(b)
(a - b)
(b / a) (c)
((a-b)/c)
7/1/2006
$
2,973,299
$ 1,438,282
$
1,535,017
48.37%
$2,367,310
64.84%
7/1/2008
$
2,242,154
$ 1,910,854
$
331,300
85.22%
$3,747,667
8.84%
7/1/2010
$
2,778,943
$ 1,833,895
$
945,048
65.99%
$3,678,700
25.69%
(3) Other Post Employment Benefits Plan
Schedule of Funding Progress
Entry Age
Actuarial
Unfunded
UAAL as a
Actuarial Actuarial Accrued
Value of
AAL Funded
Covered
% of Covered
Valuation Liability (AAL)
Assets
(UAAL) Ratio
Payroll
Payroll
Date (a)
(b)
(a - b) (b / a)
(c)
((a-b)/c)
1/1/2008
$ 3,548,605 $ -
$ 3,548,605
0%
$ 1,682,985
211%
N/A
N/A N/A
N/A
N/A
N/A
N/A
N/A
N/A N/A
N/A
N/A
N/A
N/A
62
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Other Supplementary Information
63
NONMAJOR GOVERNMENTAL FUNDS
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 Fund - 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 Lighting 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 Fund - 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.
64
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CITY OF ROSEMEAD
Non-Major Governmental Funds
Combining Balance Sheet
June 30, 2011
Special Revenue Funds
CDBG HOME Proposition
Grant Program A
Assets
Cash and investments
Receivables:
Accounts
Interest
Notes
Liabilities and Fund Balances
Liabilities:
Accounts payable and accrued liabilities
Accrued salaries and benefits
Retentions payable
Due to other funds
Deferred revenue
Total liabilities
Fund balances:
Restricted for:
Public safety
Public works
Community services
Low and moderate income housing
Unassigned
$ - $ - $ 1,334,907
356,188 204,413 -
$ 356,188 $ 204,413 $ 1,334,907
$ 47,223 $ 17,786
12,609 909
- 15,953
199,868 632,511
2,072 -
$ 27,277
5,764
261,772 667,159 33,041
94,416
(462,746)
Total fund balances (deficit)
Total liabilities and fund balances
1,301,866
94,416 (462,746) 1,301,866
$ 356,188 $ 204,413 $ 1,334,907
65
Special Revenue Funds
Federal
Air Quality
•
Proposition
Highway
State Gas
Management
Local
Street
C
Grant
Tax
District
Transportation
Lighting
$ 1,708,201
$ -
$ 1,913,937
$ 118,874
$ -
$ 2,670,293
-
-
7,305
16,500
47,932
40,675
-
-
-
-
-
1,561
•
-
-
-
-
-
58,551
$ 1,708,201
$ -
$ 1,921,242
$ 135,374
$ 47,932
$ 2,771,080
$ 59,067
$ -
$ 158,556
$ -
$ -
$ 55,413
2,561
-
3,391
-
-
1,546
•
-
-
7,115
-
-
-
-
72,093
4,411
-
47,932
5,020
-
-
-
-
-
60,112
•
61,628
72,093
173,473
-
47,932
122,091
-
-
-
-
-
2,648,989
1,646,573
-
1,747,769
135,374
-
-
-
(72,093)
-
-
-
-
•
1,646,573
(72,093)
1,747,769
135,374
-
2,648,989
$ 1,708,201
$ -
$ 1,921,242
$ 135,374
$ 47,932
$ 2,771,080
66
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CITY OF ROSEMEAD
Non-Major Governmental Funds
Combining Balance Sheet
June 30, 2011
Special Revenue Funds
Rosemead
Housing
Narcotics Measure
Development
Seizure R
Corporation
Totals
Assets
Cash and investments
$ 6,703 $ 761,286
$ 73,597 $
8,587,798
Receivables:
Accounts
- -
14,442
687,455
Interest
- -
-
1,561
Notes
- -
-
58,551
$ 6,703 $ 761,286
$ 88,039 $
9,335,365
Liabilities and Fund Balances
Liabilities:
Accounts payable and accrued liabilities
$ - $ 652
$ 42,466 $
408,440
Accrued salaries and benefits
- 1,244
-
28,024
Retentions payable
- -
-
23,068
Due to other funds
- -
-
961,835
Deferred revenue
- -
-
62,184
Total liabilities - 1,896 42,466 1,483,551
Fund balances:
Restricted for:
Public safety 6,703 - - 2,655,692
Public works - 759,390 - 5,590,972
Community services - - - 94,416
Low and moderate income housing - - 45,573 45,573
Unassigned - - - (534,839)
Total fund balances (deficit) 6,703 759,390 45,573 7,851,814
Total liabilities and fL.nd balances S 6.703 $ 761,286 $ 88,039 $ 9,335,365
67
CITY OF ROSEMEAD
Non-Major Governmental Funds
Combining Statement of Revenues, Expenditures, and Changes in Fund Balances
Fiscal Year Ended June 30, 2011
Special Revenue Funds
CDBG HOME Proposition
Grant Program A
Revenues:
Intergovernmental
Special assessments
Investment income
Total revenues
Expenditures:
Current:
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)
Net change in fund balances
Fund balances (deficit), beginning of year
Fund balances (deficit), end of year
$ 1,303,721 $ 891,296 $ 790,507
13,601
1,303,721 891,296 804,108
664,713 - 633,833
432,162 - -
- 890,000
-
1,096,875 890,000 633,833
206,846 1,296 170,275
(285,773) -
(285.773) - -
(78,927) 1,296 170,275
173,343 (464,042) 1,131,591
$ 94,416 $ (462,746) $ 1,301,866
68
Special Revenue Funds
•
Federal
Air Quality
Proposition
Highway
State Gas
Management
Local
Street
•
C
Grant
Tax
District
Transportation
Lighting
$ 708,431
$ -
$ 2,202,877
$ 66,059
$ 47,932
$ -
•
-
-
-
-
-
741,382
20,018
-
21,242
883
-
27,897
•
728,449
-
2,224,119
66,942
47,932
769,279
i
-
-
-
-
-
633,749
745,020
-
1,075,439
20,757
-
-
745,020
-
1,075,439
20,757
-
633,749
•
(16,571)
-
1,148,680
46,185
47,932
135,530
(127,818)
-
(970,712)
-
(47,932)
(4,500)
•
(127,818)
-
(970,712)
-
(47,932)
(4,500)
(144,389)
-
177,968
46,185
-
131,030
•
1,790,962
(72,093)
1,569,801
89,189
-
2,517,959
$ 1,646,573
$ (72,093)
$ 1,747,769
$ 135,374
$ -
$ 2,648,989
69
CITY OF ROSEMEAD
Non-Major Governmental Funds
Combining Statement of Revenues, Expenditures, and Changes in Fund Balances
Fiscal Year Ended June 30, 2011
Revenues:
Intergovernmental
Special assessments
Investment income
Total revenues
Expenditures:
Current:
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)
Net change in fund balances
Fund balances (deficit), beginning of year
Fund balances (deficit), end of year
Special Revenue Funds
Rosemead
Housing
Narcotics Measure Development
Seizure R Corporation Totals
$ 6,394 $ 482,952 $ 415,951 $ 6,916,120
- - - 741,382
15 6,206 40 89,902
6,409 489,158 415,991 7,747,404
- - 633,749
95,118 - 3,234,880
- - 432,162
- 803,834 1,693,834
95,118 803,834 5,994,625
6,409 394,040 (387,843) 1,752,779
- 355,000 355,000
(135) - (1,436,870)
(135) 355,000 (1,081,870)
6,409 393,905 (32,843) 670,909
294 365,485 78,416 7,180,905
$ 6,703 $ 759,390 $ 45,573 $ 7,851,814
70
CITY OF ROSEMEAD
Community Development Block Grant
Non-Major Special Revenue Fund
Schedule of Revenue, Expenditures, and Changes in Fund Balances - Budget and Actual
Fiscal Year Ended June 30, 2011
Revenues:
Intergovernmental
Total revenues
1,801,930 1,303,721 (498,209)
Expenditures:
Current:
Public works 985,217
Community services 403,500
Total expenditures 1,388,717
Excess (deficiency) of revenues
over (under) expenditures 413,213
Other financing sources (uses):
Transfers out -
Total other financing sources (uses) -
Net change in fund balance 413,213
Fund balance, beginning of year 173,343
664,713 320,504
432,162 (28,662)
1,096, 875 291,842
206,846 (206,367)
(285,773) (285,773)
(285,773) (285,773)
(78,927)
(492,140)
173,343
Fund balance, end of year $ 586,556 $ 94,416 $ (492,140)
Variance
Final Positive
Budget Actual (Negative)
$ 1,801,930 $ 1,303,721 $ (498,209)
71
CITY OF ROSEMEAD
HOME Program
Non-Major Special Revenue Funds
Schedule of Revenue, Expenditures, and Changes in Fund Balances - Budget and Actual
Fiscal Year Ended June 30, 2011
Revenues:
Intergovernmental
Final
Budget
$ 1,415,560
1,415,560
$ 891,296 $ (524,264)
Total revenues
Expenditures:
Current:
Community development
Total expenditures
Net change in fund balance
Fund balance, beginning of year
Fund balance, end of year
Variance
Positive
Actual (Negative)
891,296 (524,264)
1,182,200 890,000 292,200
1,182,200 890,000 292,200
233,360 1,296 (232,064)
(464,042) (464,042) -
$ (230,682) $ (462,746) $ (232,064)
72
CITY OF ROSEMEAD
Proposition A
Non-Major Special Revenue Fund
Schedule of Revenue, Expenditures, and Changes in Fund Balances - Budget and Actual
Fiscal Year Ended June 30, 2011
Variance
Final
Positive
Budget
Actual
(Negative)
Revenues:
Intergovernmental
$ 811,800
$ 790,507
$ (21,293)
Investment Income
10,000
13,601
3,601
Total revenues
821,800
804,108
(17,692)
Expenditures:
Current:
Public works
Total expenditures
Net change in fund balance
Fund balance, beginning of year
787,400
633,833
153,567
787,400
633,833
153,567
34,400
170,275
135,875
1,131,591 1,131,591 -
Fund balance, end of year $ 1,165,991 $ 1,301,866 $ 135,875
73
CITY OF ROSEMEAD
Proposition C
Non-Major Special Revenue Fund
Schedule of Revenue, Expenditures, and Changes in Fund Balances - Budget and Actual
Fiscal Year Ended June 30, 2011
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)
Net change in fund balance
Fund balance, beginning of year
Fund balance, end of year
Variance
Final Positive
Budget Actual (Negative)
$ 721,500 $ 708,431 $ (13,069)
23,000 20,018 (2,982)
744,500 728,449 (16,051)
732,695 745,020 (12,325)
732,695
745,020
(12,325)
11,805
(16,571)
(28,376)
-
(127,818)
(127,818)
-
(127,818)
(127,818)
11,805
(144,389)
(156,194)
1,790,962
1,790,962
-
$ 1,802,767 $ 1,646,573 $ (156,194)
74
CITY OF ROSEMEAD
Federal Highway Grant
Non-Major Special Revenue Fund
Schedule of Revenue, Expenditures, and Changes in Fund Balances - Budget and Actual
Fiscal Year Ended June 30, 2011
Revenues:
Intergovernmental
Total revenues
Net change in fund balance
Fund balance (deficit), beginning of year
Variance
Final Positive
Budget Actual (Negative)
(72,093) (72,093)
Fund balance (deficit), end of year $ (72,093) $ (72,093) $ -
75
CITY OF ROSEMEAD
State Gas Tax
Non-Major Special Revenue Fund
Schedule of Revenue, Expenditures, and Changes in Fund Balances - Budget and Actual
Fiscal Year Ended June 30, 2011
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)
Net change in fund balance
Fund balance, beginning of year
Variance
Final Positive
Budget Actual (Negative)
$ 1,472,600 $ 2,202,877
17,250 21,242
1,489,850 2,224,119
984,634 1,075,439 (90,805)
984,634 1,075,439 (90,805)
505,216 1,148,680 643,464
$ 730,277
3,992
734,269
(970,712) (970,712)
(970,712) (970,712)
505,216
177,968
(327,248)
1,569,801
1,569,801
Fund balance, end of year $ 2,075,017 $ 1,747,769 $ (327,248)
76
CITY OF ROSEMEAD
Air Quality Management District
Non-Major Special Revenue Fund
Schedule of Revenue, Expenditures, and Changes in Fund Balances - Budget and Actual
Fiscal Year Ended June 30, 2011
Revenues:
Intergovernmental
Investment income
Total revenues
Expenditures:
Current:
Public works
Total expenditures
Final
Budget
$ 65,000 $
700
65,700 66,942 1.242
Variance
Positive
Actual (Negative)
66,059 $ 1,059
883 183
20,757 (20,757)
20,757 (20,757)
Net change in fund balance
Fund balance, beginning of year
65,700
89,189
46,185
89,189
(19,515)
Fund balance, end of year $ 154,889 $ 135,374 $ (19,515)
77
CITY OF ROSEMEAD
Local Transportation
Non-Major Special Revenue Fund
Schedule of Revenue, Expenditures, and Changes in Fund Balances - Budget and Actual
Fiscal Year Ended June 30, 2011
Variance
Final
Positive
Budget
Actual
(Negative)
Revenues:
Intergovernmental $ -
$ 47,932
$ 47,932
Total revenues -
47,932
47,932
Excess (deficiency) of revenues
over (under) expenditures -
47,932
47,932
Other financing sources (uses):
Transfers out -
(47,932)
(47,932)
Total other financing sources (uses) -
(47,932)
(47,932)
Net change in fund balance -
-
-
Fund balance, beginning of year -
-
-
Fund balance, end of year $ - $ - $ -
78
CITY OF ROSEMEAD
Street Lighting
Non-Major Special Revenue Fund
Schedule of Revenue, Expenditures, and Changes in Fund Balances - Budget and Actual
Fiscal Year Ended June 30, 2011
Revenues:
Special Assessments
Investment income
Total revenues
Expenditures:
Current:
Public safety
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, beginning of year
Variance
Final Positive
Budget Actual (Negative)
$ 736,000 $ 741,382 $ 5,382
32,400 27,897 (4,503)
768,400 769,279 879
686,600 633,749 52,851
686,600 633,749 52,851
81,800
135,530 53,730
(4,500) (4,500)
(4,500) (4,500)
81,800 131,030 49,230
2,517,959 2,517,959
Fund balance, end of year $ 2,599,759 $ 2,648,989 $ 49,230
79
CITY OF ROSEMEAD
Narcotics Forfeiture and Seizure
Non-Major Special Revenue Fund
Schedule of Revenue, Expenditures, and Changes in Fund Balances - Budget and Actual
Fiscal Year Ended June 30, 2011
Revenues:
Intergovernmental
Investment income
Total revenues
Net change in fund balance
Fund balance, beginning of year
Fund balance, end of year
Variance
Final Positive
Budget Actual (Negative)
$ - $ 6,394 $ 6,394
15 15
6,409 6,409
6,409 6,409
294 294 -
$
80
294 $ 6,703 $ 6,409
CITY OF ROSEMEAD
Measure R
Non-Major Special Revenue Fund
Schedule of Revenue, Expenditures, and Changes in Fund Balances - Budget and Actual
Fiscal Year Ended June 30, 2011
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)
Net change in fund balance
Fund balance, beginning of year
Fund balance, end of year
Variance
Final
Positive
Budget
Actual
(Negative)
$ 504,000
$ 482,952
$ (21,048)
-
6,206
6,206
504,000
489,158
(14,842)
117,800 95,118 22,682
117,800 95,118 22,682
386,200 394,040 7,840
(135) (135)
- (135) (135)
386,200 393,905 7,705
365,485 365.485 -
$ 751,685 $ 759,390 $ 7,705
81
CITY OF ROSEMEAD
Rosemead Housing Development Corporation
Non-Major Special Revenue Fund
Schedule of Revenue, Expenditures, and Changes in Fund Balances - Budget and Actual
Fiscal Year Ended June 30, 2011
Revenues:
Intergovernmental
Investment income
Total revenues
Expenditures:
Current:
Community development
Total expenditures
Excess (deficiency) of revenues
over (under) expenditures
Other financing sources (uses):
Transfers in
Total other financing sources (uses)
Net change in fund balance
Fund balance, beginning of year
Fund balance, end of year
Variance
Final Positive
Budget Actual (Negative)
$ 416,700 $ 415,951 $ (749)
- 40 40
416,700 415,991 (709)
797,500 803,834 (6,334)
797,500 803,834 (6,334)
(380,800) (387,843)
(7,043)
355,000 355,000
355,000 355,000
(380,800) (32,843) 347,957
78,416 78,416 -
$ (302,384) $ 45,573 $ 347,957
82
CITY OF ROSEMEAD
Redevelopment Agency Debt Service Fund
Major Debt Service Fund
Schedule of Revenue, Expenditures, and Changes in Fund Balances - Budget and Actual
Fiscal Year Ended June 30, 2011
Revenues:
Taxes
Investment income
Total revenues
Expenditures:
Current:
General government
Public safety
Debt Service:
Principal
Interest
Total expenditures
Excess (deficiency) of revenues
over (under) expenditures
Variance
Final
Positive
Budget Actual
(Negative)
$ 6,101,800 $ 6,893,575
$ 791,775
30,000 56,578
26,578
6,131,800
6,950,153 818,353
101,000
984,000
975,000
1,469,700
3,529,700
2,602,100
115,623 (14,623)
995,468 (11,468)
-
975,000
1,882,092 (412,392)
3,968,183 (438,483)
2,981,970
Other financing sources (uses):
Transfers in
Transfers out
Total other financing sources (uses)
- 1,133,461
(903,500) (974,464)
(903,500) 158,997
Net change in fund balance
Fund balance, beginning of year
1,698,600
2,803,910
3,140, 967
2,803,910
379,870
1,133,461
(70,964)
1,062,497
1,442, 367
Fund balance, end of year $ 4,502,510 $ 5,944,877 $ 1,442,367
83
CITY OF ROSEMEAD
Redevelopment Agency Capital Projects Fund
Major Capital Projects Fund
Schedule of Revenue, Expenditures, and Changes in Fund Balances - Budget and Actual
Fiscal Year Ended June 30, 2011
Revenues:
Investment income
Other
Total revenues
Expenditures:
Current:
General government
Public works
Bond issuance costs
Total expenditures
Excess (deficiency) of revenues
over (under) expenditures
Other financing sources (uses):
Transfers out
Discount on bonds
Proceeds from long-term debt
Total other financing sources (uses)
Net change in fund balance
Fund balance, beginning of year
Fund balance, end of year
Variance
Final Positive
Budget Actual (Negative)
$ - $ 59,176 $ 59,176
7,997 7,997
67,173 67,173
10,000
1,750
8,250
9,279,760
5,803,685
3,476,075
332,500
275,344
57,156
9,622,260 6,080,779 3,541,481
(9,622,260) (6,013,606)
3,608,654
- (1,677,344)
(1,677,344)
- (192,139)
(192,139)
- 11,230,000
11,230,000
- 9,360,517 9,360,517
(9,622,260) 3,346,911 12,969,171
3,001,846 3,001,846 -
$ (6,620,414) $ 6,348,757 $ 12,969,171
84
CITY OF ROSEMEAD
City Capital Projects
Major Capital Projects Fund
Schedule of Revenue, Expenditures, and Changes in Fund Balances - Budget and Actual
Fiscal Year Ended June 30, 2011
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)
Net change in fund balance
Fund balance, beginning of year
Variance
Final Positive
Budget Actual (Negative)
$ 3,432,000 $ 1,715,181 $ (1,716,819)
3,432,000
1,715,181 (1,716,819)
19,514,773 7,601,816 11,912,957
19,514,773 7,601,816 11,912,957
(16,082,773) (5,886,635) 10,196,138
- 2,361,994 2,361,994
2,361,994 2,361,994
(16,082,773) (3,524,641) 12,558,132
(343,484) (343,484) -
Fund balance, end of year $ (16,426,257) $ (3,868,125) $ 12,558,132
85
INTERNAL SERVICE FUNDS
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:
Equipment Replacement - To account for the accumulation and allocation of costs associated
with the repair and maintenance of the City's equipment.
Technology Replacement - To account for the accumulation and allocation of costs associated
with the repair and maintenance of the City's technological equipment.
86
CITY OF ROSEMEAD
Combining Statement of Net Assets
Internal Service Funds
June 30, 2011
Assets
Current assets:
Cash and investments
Due from other funds
Total current assets
Non-current assets:
Capital assets:
Other capital assets, net (note 6)
Total non-current assets
Total assets
Liabilities
Current liabilities:
Accounts payable
Lease payable - current
Total current liabilities
Non-current liabilities:
Lease payable
Total non-current liabilities
Total liabilities
Net assets
Invested in capital assets,
net of related debt
Unrestricted
Total net assets
Equipment
Technology
Replacement
Replacement
Total
$ 107,629
$ 162,305 $
269,934
-
15,212
15,212
107,629
177,517
285,146
-
231,536
231,536
-
231,536
231,536
107,629
409,053
516,682
-
155,169
155,169
-
50,848
50,848
-
206,017
206,017
-
210,811
210,811
-
210,811
210,811
-
416,828
416,828
- (30,123) (30,123)
107,629 22,348 129,977
$ 107,629 $ (7,775) $ 99,854
87
CITY OF ROSEMEAD
Combining Statement of Revenues, Expenses, and Changes in Fund Net Assets
Internal Service Funds
Fiscal Year Ended June 30, 2011
Operating revenues:
Charges for services
Total operating revenues
Operating expenses:
Contractual services
Depreciation
Total operating expenses
Operating income
Non-operating revenues (expenses):
Investment income
Interest expense
Total non-operating revenues (expenses)
Changes in net assets
Net assets, beginning of year
Net assets, end of year
Equipment Technology
Replacement Replacement Total
$ 63,863 $ 55,713 $ 119,576
63,863 55,713 119,576
47,202 47,202
38,589 38,589
791 85,791
63,863 (30,078) 33,785
5 5
(1,872) (1,872)
(1,867) (11867)
63,863 (31,945) 31,918
43,766 24,170 67,936
$ 107,629 $ (7,775) $ 99,854
88
CITY OF ROSEMEAD
Combining Statement of Cash Flows
Internal Service Funds
Fiscal Year Ended June 30, 2011
Cash flows from operating activities:
Cash received from users departments
Cash payments to suppliers for goods and services
Net cash provided by (used for) operating activities
Cash flows from capital and related financing activities:
Proceeds from capital lease
Principal paid on capital lease
Interest paid on capital lease
Cash paid to purchase capital asset
Net cash provided by capital and
related financing activities
Cash flows from investing activities:
Interest on investment
Net cash provided by investing activities
Equipment Technology
Replacement Replacement Total
$ 63,863 $ 40,501 $ 104,364
- (49,216) (49,216)
63,863 (8,715) 55,148
275,603
275,603
(13,944)
(13,944)
(1,872)
(1,872)
(115,241)
(115,241)
144,546 144,546
5 5
5 5
Net increase in cash and investments 63,863 135,836 199,699
Cash and investments beginning of year
Cash and investments, end of year
Reconciliation of operating income to net cash
provided by (used for) operating activities:
Operating income
Adjustments to reconcile operating income to net
cash provided by (used for) operating activities:
Depreciation
(Increase) decrease in due from other funds
Increase (decrease) in accounts payable
43,766 26,469 70,235
$ 107,629 $ 162,305 $ 269,934
$ 63,863 $ (30,078) $ 33,785
38,589 38,589
(15,212) (15,212)
(2,014) (2,014)
Total adjustments
Net cash provided by (used for) operating activities
Noncash capital, financing and investing activities:
Capital asset acquired through accounts payable
21,363 21,363
$ 63,863 $ (8,715) $ 55,148
$ - $ 154,884 $ 154,884
89
CITY OF ROSEMEAD
Statement of Changes in Fiduciary Assets and Liabilities
Year ended June 30, 2011
Balance
July 1, 2010 Additions
Deductions
Balance
June 30, 2011
Assets
Cash and investments $ 479,080 $ 8,012,783 $ (7,900,147) $ 591,716
Accounts receivable - 28,351 (22,593) 5,758
Total assets $ 479,080 $ 8,041,134 $ (7,922,740) $ 597,474
Liabilities
Deposits payable $ 479,080 $ 8,041,134 $ (7,922,740) $ 597,474
Total liabilities $ 479,080 $ 8,041,134 $ (7,922,740) $ 597,474
90
STATISTICAL SECTION
This part of the City of Rosemead's Comprehensive Annual Financial Report presents detailed
information as a context for understanding what the information in the financial statements, note
disclosures, and required supplementary information says about the government's overall
financial health.
Contents
Financial Trends
These schedules contain trend information to help the reader
understand how the government's financial performance and well-
being have changed over time.
Revenue Capacity
These schedules contain trend information to help the reader assess
the government's most significant revenue source, property tax.
Debt Capacity
These schedules present information to help the reader assess the
affordability of the government's current levels of outstanding debt and
the government's ability to issue additional debt in the future.
Demographic and Economic Information
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
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.
Page
92
100
104
110
112
Sources: Unless otherwise noted, the information in these schedules is derived from the
Comprehensive Annual Financial Reports for the relevant year.
91
CITY OF ROSEMEAD
Net Assets by Component
Last Eight Fiscal Years
(accrual basis of accounting)
Fiscal Year
2004
2005
2006
2007
Governmental activities:
Invested in capital assets,
net of related debt
$ 10,439,445
$ 12,130,249
$ 13,345,433
$ 10,541,606
Restricted
6,526,788
6,035,250
6,901,454
8,181,231
Unrestricted
26,498,620
31,114,414
30,299,115
35,293,732
Total governmental activities net assets
$ 43,464,853
$ 49,279,913
$ 50,546,002
$ 54,016,569
The City, gllosetnead implemented GASB 34.ror the.fscal year ended June 30, 2004.
In1ormation prior to the implementation ol'G.4SB 34 is not available.
92
Fiscal Year
•
2008
2009
2010
2011
$ 12,981,537
$ 11,828,993
$ 12,712,242
$ 14,760,940
•
11,443,583
13,361,249
13,199,438
24,806,402
•
27,705,715
24,882,730
20,489,721
10,748,249
•
$ 52,130,835
$ 50,072,972
$ 46,401,401
$ 50,315,591
93
CITY OF ROSEMEAD
Changes in Net Assets
Last Eight Fiscal Years
(accrual basis of accounting)
Expenses:
Governmental activities:
General government
Public safety
Public works
Public health
Community services
Community development
Parks and recreation
Interest and other charges
Total governmental activities expenses
Program revenues:
Governmental activities:
Charges for services:
General government
Public safety
Public works
Community services
Community development
Parks and recreation
Total governmental activities program revenues
Fiscal Year
2004 2005 2006 2007
$ 4,803,476
$ 4,800,168
$ 5,629,316
$ 4,980,519
5,797,080
6,058,824
6,065,066
6,618,779
2,058,252
3,252,252
3,403,699
6,120,563
65,583
60,828
51,286
-
3,121,996
2,862,328
3,223,843
602,114
-
-
-
2,467,842
3,201,236
3,456,308
3,959,590
4,178,000
1,854,185
1,830,836
1,832.219
2.698.372
20,901,808
22 321,544
24,165,019
2' 666,189
7,026,282
6,299,415
3,288,225
316,849
726,345
984,965
900,359
1,598,159
3,091,146
3,760,495
4,144,733
7,600,778
1,691,586
1,211,615
814,754
1,403,059
-
3,206,303
287,137
266,398
337,815
-
12,822,496
12,522,888
9,485,886
14,125,148
Net revenues (expenses):
Governmental activities
Total primary government net revenues (expenses) (8,079,312) (9,798,656) (14,679,133) (13,541,041)
General revenues and other changes in net assets:
Governmental activities:
Taxes:
Property taxes
Sales and use taxes
Transient occupancy taxes
Other taxes
Intergovernmental/ in-lieu VLF
Investment income
Motor vehicle in-lieu, unrestricted
Other general revenues
Total governmental activities general revenues
Changes in net assets
Governmental activities
Total primary government
3,941,383
4,0
77,332
3,915,980
9,121,682
2,865,887
3,5
18,657
3,525,557
2,501,106
1,081,174
1,1
02, 756
1.207.298
1, 311,697
149,737
7
65,215
1,076,806
713,821
-
3,1
65,148
2,966,002
-
187,278
1,2
60,095
1,930,059
2,028,128
-
1,7
16,656
1,290,667
856,701
7,857
32,853
478,473
8,225,459
15,6
13,716
15,945,222
17,011,608
$ 146,147 $ 5,815,060 $ 1,266,089 $ 3,470,567
The Citi• of Rr %emead implemented G.4SB 34,for the fiscal rear ended June 30, 2004. Information
prior to the implementation oj'G.4SB 34 is not available.
94
•
Fisca
l Year
2008
2009
2010
2011
$ 7,259,587
$ 12,176,877
$ 5,991,796
$ 3,160,306
•
8,043,771
9,081,719
8,879,854
8,881,926
•
13,550,042
6,465,355
11,469,614
11,907,245
•
669,827
773,374
589,650
595,904
•
3,645,207
1,290,108
2,141,218
3,969,502
4,078,631
2,030,698
2,733,885
2,362,860
•
1,790,348
1,523,391
1,491,717
1,681,875
39,037,413
33,341,522
33,297,734
32,559,618
•
•
642,716
547,577
1,573,695
1,048,727
1,547,182
1,512,475
1,293,677
1,293,524
11,729,725
7,581,801
8,052,011
9,143,311
•
166,118
858,809
186,283
450,004
1,484,065
621,375
597,402
3,753,612
36,800
36,000
20,800
654,437
•
15,606,606
11,158,037
11,723,868
16,343.615
(23,430,807)
(22,183,485)
(21,573,866)
(16,216,003)
•
13,181,837
12.288.177
12,328,634
13,656,347
3,747,416
4,589,998
4,408,367
3,737,363
.
1.411.421
1,272,092
1,129,146
1,219.977
949,007
761,410
562,317
576,904
•
1,678,791
884,847
389,310
367,961
254,527
195.273
169,042
263,983
143,748
133,825
336,668
307,658
•
21,366,747
20,125 622
19,323,484
20,130,193
•
$ (2,064,060)
$ (2,057,863)
$ (2,250,382)
$ 3,914,190
•
95
CITY OF ROSEMEAD
Fund Balances of Governmental Funds
Last Eight Fiscal Years
(modified accrual basis of accounting)
General fund:
Reserved
Unreserved
Nonspendable
Restricted
Committed
Assigned
Unassigned
Total general fund
All other governmental funds
Fiscal Year
2004 2005 2006 2007
$ 353,616
20,053,506
$ 1,719,044
19,896,581
$ 20,407,122 $ 21,615,625
$ 256,765 $ 150,000
22,228,341 22,460,545
$ 22,485,106 $ 22,610,545
Reserved
$ 3,195,415
$ -
$ 7,693,216
$ 4,947,087
Unreserved, reported in:
Special revenue funds
5,653,208
7,336,247
6,821,660
6,142,833
Debt service funds
32,835
2,354,835
-
552
Capital projects funds
6,264,457
8,433,842
6,435,798
7,397,454
Nonspendable
-
-
-
-
Restricted
-
-
-
-
Committed
-
-
-
-
Assigned
-
-
-
-
Unassigned
-
-
-
-
Total all other governmental funds
$ 15,145,915
$ 18,124,924
$ 20,950,674
$ 18,487,926
The Cio, ol'Roserneacl has electecl to show onhv eight years of data for this schedule.
The City implemented GASB 34 for the fiscal year ended June 30, 2011. The categories of
firnd balance for governmental _f rnds have been changed as described more.fully in the
notes to the basic financial statements. Prior year fiord balances reflect the guidance in
ef/ect when those linancial statements here prepared.
96
•
•
•
•
•
•
•
Fiscal Year
2008
2009
2010
2011
•
•
$
3,074,496
$
3,106,917
$
3,327,182
$
-
•
18,633,154
16,135,102
13,626,774
-
•
-
_
=
2,034
-
-
5,107,963
•
-
-
-
10,209,075
$
21,707,650
$
19,242,019
$
16,953,956
$
15,319,072
•
•
$
9,000,561
$
9,000,561
$
8,944,112
$
-
6,140,289
9,023,487
8,763,359
-
•
692,475
2,803,910
2,803,910
-
•
2,490,553
(54,323)
(1,405,770)
-
27,476,081
•
-
-
-
(4,402,964)
•
$
18,323,878
$
20,773,635
$
19,105,611
$
23,073,117
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
97
•
CITY OF ROSEMEAD
Changes in Fund Balances of Governmental Funds
Last Eight Fiscal Years
(modified accrual basis of accounting)
Fiscal Year
2004
2005
2006
2007
Revenues:
Taxes
$ 9,041,026
$ 9,189,326
$ 9,527,384
$ 13,648,306
Intergovernmental
8,826,909
14,379,314
10,785,591
9,419,698
Licenses and permits
1,508,009
1,595,115
1,528,864
1,683,204
Charges for services
581,848
550,478
660,890
414,375
Fines, forfeitures and penalties
589,890
857,135
753,224
437,117
Special assessments
-
-
-
789,089
Investment income
1,372,591
1,260,286
1,947,566
2,028,128
Other
37
30,316
29,332
478,473
Total revenues
21,920,310
27,861,970
25,232,851
28,898,390
Expenditures
Current:
General government
2,965,572
3,023,192
3,790,631
4,780,837
Public safety
5,797,080
6,087,918
6,536,043
6,737,912
Public works
3,144,358
5,208,142
6,064,980
8,898,768
Community services
65,583
60,828
51,286
1,419,424
Community development
3,259,505
3,424,954
3,216,935
2,690,420
Parks and recreation
3,201,236
3,383,358
3,881,469
4,249,462
Capital outlay
26,639
184,301
149,641
-
Debt service:
Principal
445,000
465,000
490,000
780,000
Interest and fiscal charges
1,859,747
1,836,765
1,559,114
2,512,725
Bond issuance costs
-
-
550,323
1,323,238
Total expenditures
20,764,720
23,674,458
26,290,422
33,392,786
Excess (deficiency) of
revenues over (under)
expenditures
1,155,590
4,187,512
(1,057,571)
(4,494,396)
Other financing sources (uses):
Transfers in
3,905,993
4,941,103
13,300,319
26,183,078
Transfers out
(3,905,993)
(4,941,103)
(13,300,319)
(26,183,078)
Issuance of long-term debt
14,005,000
24,230,000
Discount on bonds
-
-
-
Premium on debt issued
316,830
-
Payment to bond escrow agent
-
(9,569,028)
(22,075,305)
Proceeds of capital lease
-
-
-
Total other financing
sources (uses)
-
-
4,752,802
2,154,695
Net change in fund balances
$ 1,155,590
$ 4,187,512
$ 3,695,231
$ (2,339,701)
Debt service as a percentage of
noncapital expenditures
11.1%
9.8%
9.9%
16.6%
The City vf'Rosemeud has elected to show o'74, eight years of data for this schedule
98
•
Fisca
l Year
2008
2009
2010
2011
•
$ 17,841,792
$ 17,153,625
$ 18,508,896
$ 19,313,094
15,716,610
10,992,235
7,856,792
9,383,256
•
1,503,659
1,178,362
1,079,429
1,764,162
•
537,430
638,244
708,434
677,861
641,566
565,643
491,574
462,389
687,568
736,213
680,288
741,382
•
1,678,791
884,847
389,310
367,956
141,930
381,429
254,610
253,379
38,749,346
32,530,598
29,969,333
32,963,479
•
7,356,665
11,956,179
5,903,926
3,801,486
8,043,771
9,114,009
8,863,234
8,882,915
12,116,508
4,964,867
11,264,220
19,402,924
•
669,827
783,452
584,463
595,904
3,408,691
047,529
1
1,940,641
3,397,072
4,078,631
,
2,030,698
2,733,885
2,362,860
•
1,647,673
202,752
290,885
93,121
•
1,105,000
915,000
945,000
975,000
1,567,849
1,531,986
1,501,667
1,882,092
•
-
-
-
275,344
39,994,615
32,546,472
34,027,921
41,668,718
•
(1,245,269)
(15,874)
(4,058,588)
(8,705,239)
2,962,087
4,078,483
4,133,554
4,824,919
•
(2,962,087)
(4,078,483)
(4,133,554)
(4,824,919)
11,230,000
-
-
-
(192,139)
-
102,501
-
•
-
102,501
11,037,861
$ (1,245,269)
$ (15,874)
$ (3,956,087)
$ 2,332,622
7.0%
7.6%
7.4%
9.7%
99
CITY OF ROSEMEAD
Assessed Value and Estimated Actual Value of Taxable Property
Last Ten Fiscal Years
(in thousands of dollars)
City
Fiscal Year
Taxable
Ended
SBE
Assessed
Total Direct
June 30,
Secured
Unsecured
Non-Unitary
Value
Tax Rate
2002
1,894,448,049
49,217,140
1,632,754
1,945,297,943
17.80%
2003
2,017,936,508
50,453,472
2,601,128
2,070,991,108
18.15%
2004
2,168,666,818
52,904,496
19,367,174
2,240,938,488
18.51%
2005
2,345,083,686
57,368,008
20,426,612
2,422,878,306
19.46%
2006
2,561,631,859
64,776,971
18,555,208
2,644,964,038
20.73%
2007
2,826,876,615
55,851,646
19,173,832
2,901,902,093
20.56%
2008
3,085,354,513
61,564,235
18,883,761
3,165,802,509
21.85%
2009
3,277,256,282
66,506,103
18,883,761
3,362,646,146
22.61%
2010
3,333,876,047
62,148,114
3,307,527
3,399,331,688
22.27%
2011
3,364,287,629
64,231,062
3,301,527
3,431,820,218
22.41%
Notes:
' Beginning with the fiscal year ended June 30, 2002, exemptions are netted directly against the
individual property categories.
In 1978 the voters of the State of California passed Proposition 13 which limited property taxes to a total
maximum rate of 1 % based upon the assessed value of the property being taxed. Each year, the
assessed value of property may be increased by an "inflation factor" (limited to a maximum increase of
2%). With few exceptions, property is only re-assessed at the time that it is sold to a new owner. At
that point, the new assessed value is reassessed at the purchase price of the property sold. The
assessed valuation data shown above represents the only data currently available with respect to the
actual market value of taxable property and is subject to the limitations described above.
Source: HdL Coren & Cone and Los Angeles County Assessor's Office
100
CITY OF ROSEMEAD
Direct and Overlapping Property Tax Rates
(Rate per $100 of Taxable Value)
Last Ten Fiscal Years
Agency
2002
2003
2004
2005
Fiscal Year
2006 2007 2008 2009 2010 2011
Basic Levy'
1.00000
1.00000
1.00000
1 00000
1.00000
1.00000
1.00000
1.00000
1.00000
1.00000
County Detention Facilities 1987 Debts
0.00113
0.00103
0.00099
0.00092
0.00080
0.00066
0.00000
0.00000
0.00000
0.00000
El Monte School Districts
0.05196
0.06592
0.05072
0.07246
0.08056
0.06402
0.08067
0.09044
0.11907
0.12388
El Monte Union High School
0.00000
0.00000
0.03573
0.03928
0.05425
0.05846
0.02820
0.05159
0.09654
0.08475
Garvey School Districts
0.03118
0.05286
0.02471
0.02319
0.05221
0.05075
0.05061
0.05835
0.07836
0.08503
Los Angeles Community College
0.01600
0.01460
0.01986
0.01810
0.01430
0.02146
0.00878
0.02212
0.02311
0.04031
L.A. Co. Flood Control Bonds
0.00107
0.00088
0.00047
0.00024
0.00005
0.00005
0.00000
0.00000
0.00000
0.00000
Metropolitan Water District
0.00770
0.00670
0.00610
0.00580
0.00520
0.00470
0.00450
0.00430
0.00430
0.00370
Montebello Unified School District
0.04369
0.03983
0.04076
004172
0.07053
0.06731
0.06681
0.08065
0.09673
0.09792
Pasadena Area Community College
0.00000
0.00000
0.00681
0.00879
0.00410
0.02080
0.01972
0.01741
0.02300
0.01986
Rio Hondo Community College
000000
000000
0.00000
0.02170
0.01802
0.01469
001370
0.02320
0.02714
0.03439
Rosemead School Districts
0.08858
0.00540
004517
0.07095
0.07515
0.05420
0.08282
0.06875
0.11358
0.10743
San Gabriel Unified School District
0.00000
005803
005224
0.05729
0.05284
0.04930
0.05742
0.09294
0.10071
0.10190
San Gabriel Valley Mwd Bonds
0.00000
0.00000
0.00000
000000
0.00000
0.00000
0.00000
0.00000
0.00000
0.01800
San Gabriel Vly Mwd State Water Bond
0.02400
D 02400
002200
0.02000
0.02000
0.02000
0.02000
001800
001800
0.00000
Total Direct & Overlappingz Tax Rates
1.26531
1.26925
1.30556
1.38044
1.44801
1.42640
1.43323
1.53775
1.70054
1.71717
City's Share of 1% Levy Per Prop 13 7
0.09388
0.09388
0.09388
0.09388
0.09388
0.09388
0.09388
0.09388
0.09388
0.09388
General Obligation Debt Rate
Redevelopment Rate 4
1.00990
1.00861
1.00755
1.00697
1.00604
1.00541
1.00450
1.00430
1.00430
1.00370
Total Direct Rate 5
0.17800
0.18152
0.18513
0.19461
0.20733
020556
011850
0.22614
0.22270
0.22407
Notes
' In 1978, Califomia voters passed Proposition 13 which set the property tax rate at a 1.00% fixed amount. This 1.00% is shared by all taxing
agencies for which the subject property 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.
2 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.
7 City's share of 1% Levy is based on the City's 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-
4 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.
s 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 City's revenue by total net taxable assessed value.
Source L.A County Assessor 2001/02 - 2010/11 Tax Rate Table and HdL Coren & Cone
101
CITY OF ROSEMEAD
Principal Property Taxpayers
Current Year and Nine Years Ago
2011
Percent of
Total City
2002
Percent of
Total City
Taxable
Assessed
Value
Taxable Taxable Taxable
Assessed Assessed Assessed
Taxpayer Value Rank Value Value Rank
Rosemead Place, LLC $ 45,003,310 1
Walmart Real Estate Business Trust 36,384,479 2
Rosemead Hwang, LLC 32,126,034 3
AFG Investment Fund 5 LLC
Metodo Investments, LLC
420 Boyd Street LLC
Macy's California Inc.
California Federal Savings and Loan Assoc
Panda Restaurant Group, Inc.
Sunshine Inn
Aespace America, Inc.
General Electric Credit Auto Auctions
May Department Stores Company
California Federal Savings and Loan Assoc
Sunshine Inn
Chicago Title Insurance Company
Builder Square LLC
Tony & Helen Hua Trust
BHC Alhambra Hospital, Inc.
Hellman Hospital, LLC
31,401,714
1
1.61%
15,649,438
2
0.80%
14,961,492
3
0.77%
9,252,263
4
0.48%
9,042,557
5
0.46%
8,330,000
6
0.43%
7,397,824
7
0.38%
6,288,000
8
0.32%
5,593,485
9
0.29%
5,409,647
10
0.28%
Source: HdL Coren & Cone, Los Angeles County Assessor 2010111 Combined Tax Rolls.
23,872,481 4
1.31%
1.06%
0.94%
0.70%
19,136,512
5
0.56%
18,417,245
6
0.54%
13,567,141
7
0.40%
13,385,792
8
0.39%
12,831,374
9
0.37%
10,557,466
10
0.31%
102
CITY OF ROSEMEAD
Property Tax Levies and Collections
Last Ten Fiscal Years
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
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
2,054,859
100.00% -
2,054,859
100.00%
2007
2,269,752
2,147,626
94.62% -
2,147,626
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%
2011
2,633,288
2,595,289
98.56% -
2,595,289
98.56%
Notes:
* Information not available.
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
103
CITY OF ROSEMEAD
Ratios of Outstanding Debt by Type
Last Ten Fiscal Years
Tax
Percentage
Debt
Allocation
of Personal
Per
Fiscal Year
Bonds
Income'
Capita'
2002
34,255,000
2.10%
619
2003
33,830,000
2.00%
612
2004
33,385,000
1.93%
595
2005
32,920,000
1.65%
580
2006
37,100,000
7.70%
649
2007
37,455,000
7.30%
655
2008
36,350,000
6.74%
633
2009
35,435,000
6.41%
617
2010
34,490,000
6.26%
599
2011
44,745,000
8.12%
775
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.
104
CITY OF ROSEMEAD
Ratio of General Bonded Debt Outstanding
Last Ten Fiscal Years
(In Thousands, except Per Capita)
Tax
Percent of
Allocation
Assessed
Per
Fiscal Year
Bonds
Value'
Capita
2002
34,255
1.76%
619
2003
33,830
1.63%
612
2004
33,385
1.49%
595
2005
32,920
1.36%
580
2006
37,100
1.40%
649
2007
37,455
1.29%
655
2008
36,350
1.15%
633
2009
35,435
1.05%
617
2010
34,490
1.01%
599
2011
44,745
1.30%
775
Notes:
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.
105
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CITY OF ROSEMEAD
•
Direct and Overlapping Governmental Activities Debt
June 30, 2011
•
Percentage
•
Gross Bonded
Applicable
Net Bonded
Debt Balance
To City
Debt
•
Overlapping Debt
' Metropolitan Water District
$ 107,259,876
0.334%
358,222
•
Garvey School District DS 2000 Series A
6,189.903
51.469%
3.185.904
•
Garvey School District DS 2000 Series B
6,244,519
51.469%
3,214,014
Garvey School District 2004 Series 2005
8,358,736
51.469%
4,302.188
•
Garvey Sch DS 2004 Ser 2006
10.584.714
51.469%
5,447.885
Garvey Sch DS 2004 Ser C
8,987.964
51.469%
4,626.048
•
Rosemead Sch Dist DS 2000 Ser A
6,410.000
69.425%
4,450.154
Rosemead Sch Dist DS 2000 Ser B
8.930.000
69.425%
6,199,668
•
Rosemead Sch DS 2000 Ser C
6.655.000
69.425%
4,620,245
Rosemead Sch DS 2000 Ser D
4.845,000
69.425%
3,363,650
•
Rosemead School DS 2008 Series A
8.865,000
69.425%
5,154,541
•
El Monte Union HS Dist 2002 Series A
2,870,000
14.419%
413,826
El Monte Union HS Dist Series B
4,555.000
14.419%
656,787
•
El Monte Un HSD DS 2006 Ref Bds
36,572,828
14.419%
5,273,445
El Monte Un Hi DS 2002 Ser C
29,140,000
14.419%
4,201,704
•
El Monte Union High DS 2008 Ser A
53,625,511
14.419%
7,732,275
L A CCD DS 2001 Ser A
10,590.000
0.326%
34,518
•
L A CCD DS 2003 Ser B
71,760,000
0.326%
233,275
L A. CCD DS 2003 Taxable Ser 20048
17,935,000
0.326%
58,302
•
L A CCD DS 2001 Taxable Ser 2004A
74,760,000
0.326%
243,027
•
LACC DS Ref 2001 Series 2005 A
431,075,000
0.326%
1,401,323
LA CCD DS 2001 2006 Series B
382,830,000
0.326%
1,244.490
•
LA CCD DS 2003, 2006 Series C
292,480.000
0.326%
950.763
LACC DS 2001. 2008 Ser E-1
276,500,000
0326%
898.836
•
LACC DS 2001, 2008 Taxable Ser E-2
2,420,000
0.326%
7.867
LACC DS 2003. 2008 Ser F-1
344,915,000
0.326%
1,121,237
•
LACC DS 2003. 2008 Taxable Ser F-2
6,480,000
0.326%
21,065
LACC DS 2008. 2009 Taxable Ser A
350,000,000
0.326%
1,137,767
•
LACC DS 2008. 2009 Taxable Ser B
75.000.000
0.326%
243,807
•
LACC Debi 2008. 2010 Tax Ser D
175,000.000
0.326%
568,953
LACC Debi 2010. Tax Ser E (GABS)
900,000.000
0.326%
2,926,042
•
LACC DS 2008. 2010 Series C
125,000,000
0.326%
406.395
Pasadena Area CCD DS 2002 Series S-A
1,925,000
2.626%
50,550
•
Pasadena CCD DS 2006 Series B
48,955,000
2.626%
1.285.555
Pasadena CCD DS 2006 Ref BD Series C
12,302,327
2.626%
323,058
•
Pasadena CCD DS 2002, 2006 Ser D
26.705,000
2.626%
701,271
•
Pasadena CCD 2002. 2009 Series E (BABS)
25,295,000
2.626%
664,245
Montebello Unif DS 1998 Series 98
10,679,698
1.404%
149,983
•
Montebello Unif SO DS 98 Series 99
7,712,854
1.404%
108,318
Montebello USD DS 1998 Series 2001
3,282,827
1404%
46.103
•
Montebello USD DS 1998 Series 2004
9.090.273
1.404%
127,662
Montebello Unified DS 1998 Series 2002
11,730,999
1.404%
164,747
•
Montebello Unif DS 2004 Ser 2005
25,955.000
1.404%
364.506
Montebello Unit DS 2004 Ser 2008
32.900.000
1 404%
462,040
•
Montebello Unified DS 2004 Ser 2009
31000.000
1 404%
463,444
•
Montebello Unified 2010 Refunding Bonds
l
i
D
bt
15,770,000
1.404%
221,470
ota Over
app
ng
e
•
2010/11 Assessed Valuation 52,837,697.115 After Deducting $594.123,103 Redevelopment Increment
•
Debt to Assessed Valutation Ratios:
•
Direct Debt
0.00%
Overlapping Debt
2.85%
•
Total Debt
2.85%
This fund is a portion of a larger agency, and
is repsonsible for debt in areas outside the
city. This report
reflects debt
•
which is being repaid through voter-approved property tax indebtedness. It excludes mortgage revenue, tax allocation
bonds, interim financing obligations, non-bonded capital lease obligations, and certificates
of participation,
unless
•
provided by the city
•
Source HdL Coren & Cone_ L A County Assessor and Auditor Combined 2010111 Lien Date Tax Rolls
•
106
•
CITY OF ROSEMEAD
Legal Debt Margin Information
Last Ten Fiscal Years
Assessed valuation
Conversion percentage
Adjusted assessed valuation
Debt limit percentage
Debt limit
Total net debt applicable to limit:
General obligation bonds
Legal debt margin
Total debt applicable to the limit
Fiscal Year
2002 2003 2004 2005 2006
1,945,297,943 2,070,991,108 2,240,938,488 2,422,878,306 2,644,964,038
25% 25% 25% 25% 25%
486,324,486 517,747,777 560,234,622 605,719,577 661,241,010
15% 15% 15% 15% 15%
72,948,673 77,662,167 84,035,193 90,857,936 99,186,151
72,948,673 77,662,167 84,035,193 90,857,936 99,186,151
as a percentage of debt limit 0.0% 0.0% 0.0%
The Government Code of the State of California provides for a legal debt limit of
15% of gross assessed valuation. However, this provision was enacted when
assessed valuation was based upon 25% of market value. Effective with the 1981-82
fiscal year, each parcel is now assessed at 100% of market value (as of the most
recent change in ownership for that parcel). The computations shown above reflect
a conversion of assessed valuation data for each fiscal year from the current full
valuation perspective to the 25% level that was in effect at the time that the legal
debt margin was enacted by the State of California for local governments located
within the state.
Sources: Rosemead Finance Department
Los Angeles County Tax Assessor's Office
0.0% 0.0%
107
•
Fiscal Year
2007
2008
2009
2010
2011
2,901,902,093
3,165,802,509
3,362,646,146
3,399,331,688
3,431,820,218
•
25%
25%
25%
25%
25%
•
725,475,523
791,450,627
840,661,537
849,832,922
857,955,055
•
15%
15%
15%
15%
15%
•
108,821,328
118,717,594
126,099,230
127,474,938
128,693,258
108,821,328
118,717,594
126,099,230
127,474,938
128,693,258
•
0.0%
0.0%
0.0%
0.0%
0.0%
108
CITY OF ROSEMEAD
Pledged-Revenue Coverage
Last Ten Fiscal Years
(In Thousands)
Tax Allocation Bonds
Fiscal Year
Ended Tax Debt Service
June 30, Increment Principal Interest Coverage
2002
3,197,754
370,000
1,912,843
1.40
2003
3,105,416
425,000
1,891,273
1.34
2004
3,376,579
445,000
1,870,873
1.46
2005
3,494,330
465,000
1,836,765
1.52
2006
3,310,295
490,000
1,559,114
1.62
2007
4,029,714
780,000
1,505,781
1.76
2008
6,219,884
1,105,000
1,567,849
2.33
2009
5,649,896
915,000
1,531,987
2.31
2010
6,243,948
945,000
1,501,667
2.55
2011
6,893,575
975,000
1,882,092
2.41
Note: Details regarding the City's outstanding debt can be found in the notes to the financial
financial statements. Operating expenses do not include interest or depreciation expenses.
109
CITY OF ROSEMEAD
Demographic and Economic Statistics
Last Ten Calendar Years
Calendar Population
Year (1)
2001/02
2002/03
2003/04
2004/05
2005/06
2006/07
2007/08
2008/09
2009/10
2010/11
55,289
56,065
56,710
57,189
57,144
57,427
57,422
57,594
57,756
54,034
Personal
Income
(in thousands) (2)
1,692,452
1,727,026
1,991,372
482,011
513,123
539,163
552,450
551,271
550,832
N/A
Per
Capita
Personal
Income (2)
30,611
30,804
35,115
36,746
39,011
41,875
42,916
42,818
42,784
N/A
Unemployment
Rate
(3)
6.10%
6.80%
6.00%
4.50%
4.60%
4.90%
4.47%
11.10%
10.50%
0.00%
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)
110
CITY OF ROSEMEAD
Principal Employers
Current Year and Nine Years Ago
Employer
Southern California Edison
Garvey School District
Wal-Mart
Panda Restaurant Group, Inc.
Rosemead School District
Target
Hemetic Seal Corporation
Don Bosco Tech
Double Tree
Marge Carson, Inc.
2011
2002 "
Percent of
Percent of
Number of
Total
Number of Total
Employees
Employment'
Employees Employment
1
4,100
18.47%
- 0.00%
2
804
3.62%
- 0.00%
3
420
1.89%
- 0.00%
4
400
1.80%
- 0.00%
5
337
1.52%
- 0.00%
6
200
0.90%
- 0.00%
7
150
0.68%
- 0.00%
8
90
0.41%
- 0.00%
9
76
0.34%
- 0.00%
10
80
0.36%
- 0.00%
Notes:
' Based upon Employment Development Department's estimate of 22,200 residents employed in 2010-11
Information for 2001 is not available.
Source: City of Rosemead and Rosemead Chamber of Commerce
111
CITY OF ROSEMEAD
Full-time and Part-time City Employees by Function
Last Ten Fiscal Years
Full-time and Part-time
Employ
ees as of June 30
Function
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
General government
19
16
14
15
18
17
19
16
22
19
Public safety'
16
23
22
17
23
22
34
39
42
42
Community
development
6
5
6
6
6
11
23
18
23
23
Parks and recreation
107
117
97
94
103
101
103
135
112
99
Total
148
161
139
132
150
151
179
208
199
183
Notes:
' 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
112
CITY OF ROSEMEAD
Operating Indicators by Function
Last Ten Fiscal Years
Fiscal Year
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
Police:
Arrests
1,299
1,102
1,081
1,230
1,315
1,786
1,506
1,478
1,733
1,888
Parking citations issued
n/a
n/a
14,676
18,357
15,176
13,210
11,766
10,517
8,450
7,515
Fire:
Number of emergency calls
2,809
2,728
2,733
2,800
2,868
2,994
3,094
1,834
2,574
2,627
Inspections
117
117
117
117
117
117
2,518
2,093
3,137
845
Public works:
Street resurfacing (miles)
17
-
1.3
-
1.3
2.5
1.1
2.8
3.5
3.5
Parks and recreation:
Number of recreation classes
400
420
450
530
720
775
484
397
727
617
Number of facility rentals
n/a
n/a
n/a
n/a
n/a
n/a
540
453
236
1,786
Source: City of Rosemead
113
•
Public Safety:
Sheriff stations
•
Fire:
Fire stations
Public works:
Streets (miles)
•
Streetlights
•
Traffic signals
•
Parks and recreation:
•
Parks
Community centers
Source: City of Rosemead
CITY OF ROSEMEAD
Capital Asset Statistics by Function
Last Ten Fiscal Years
Fiscal Year
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
1
1
1
1
1
1
1
1
1
1
2
2
2
2
2
2
2
2
2
2
76.80
76.80
76.80
76.80
76.80
76.80
77.55
77.55
77.55
77.55
2,506
2,700
2,700
2,702
2,705
2,706
2,712
2,712
2,712
2,712
39
39
39
39
39
41
42
42
42
42
10
10
10
10
10
10
10
10
10
10
2
2
2
2
2
2
2
2
2
2
114
Rosemead City Hall
8838 E. Valley Boulevard Rosemead, CA 91770
Telephone: (626) 569-2100
ROSEMEAD HOUSING
DEVELOPMENT CORPORATION
FINANCIAL AND COMPLIANCE REPORT
Fiscal Year Ended June 30, 2011
ROGERS, ANDERSON, MALODY & SCOTT, LLP
CERTIFIED PUBLIC ACCOUNTANTS, SINCE 1948
ROSEMEAD HOUSING DEVELOPMENT CORPORATION
FINANCIAL AND COMPLIANCE REPORT
Fiscal Year Ended June 30, 2011
TABLE OF CONTENTS
Page
INDEPENDENT AUDITOR'S REPORT
FINANCIAL STATEMENTS:
Government-wide Financial Statements
Statement of Net Assets
Statement of Activities
Fund Financial Statements
3
4
Balance Sheet
5
Reconciliation of the Balance Sheet of Governmental Fund to the
Statement of Net Assets
6
Statement of Revenues, Expenditures and Changes in Fund
Balance
7
Reconciliation of the Statement of Revenues, Expenditures and Changes in
Fund Balance of Governmental Fund to the Statement of Activities
8
Notes to the Basic Financial Statements
REQUIRED SUPPLEMENTARY INFORMATION
Notes to Required Supplementary Information
9
18
Schedule of Revenues, Expenditures and Changes in Fund Balance -
Budget and Actual 19
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 20
•
•
•
•
•
•
• 735 E Carnegie or Suite 100
• San Bernardino. CA 92408
909 889 0871 T
• 909 889 5361 F
• ramscpa ne[
Fh,11,p f-I Waller, CPA
B onda L Odle. CPA. MST
Terry P Shea. CPA
Kirk A Franks. CPA
Matthew B Wilson, CPA, MSA
Scott W Manno. CPA
Leena Shanbhag. CPA. MST
Jay H. Zercher, CPA (Retired)
MANAGERS / STAFF
Nancy O'Rafferty. CPA, MBA
Bradferd A Welebir. CPA, MBA
Jenny Liu, CPA, MST
Katie L Millsom, CPA
Papa Matar Thiaw. CPA, MBA
Maya S. Ivanova, CPA, MBA
Danielle E- Odgers, CPA
William C. Clayton, CPA
Scott Millsom, CPA
Peter E Murray, CPA
Genivive Schwarzkopf. CPA
Megan Hackney, CPA
MEMBERS
American Institute of
Certified Public Accountants
PCPS The AICPA Alliance
for CPA Arms
Governmental Audit
Quality Center
California Society of
Certified Public Accountants
•
•
•
ROGERS. ANDERSON, MALODY $ SCOTT, LLP
CERTIFIED PUBLIC ACCOUNTANTS, SINCE 1948
Board of Directors
Rosemead Housing Development Corporation
City of Rosemead, California
INDEPENDENT AUDITOR'S 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, 2011, 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 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 the major fund of the Corporation as of June 30, 2011, 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.
During the year under audit, the Corporation adopted Governmental
Accounting Standards Board Statement No. 54, Fund Balance Reporting and
Governmental Fund Type Definitions.
STABILITY. ACCURACY. TRUST
-1-
Board of Directors
Rosemead Housing Development Corporation
Rosemead, California
Page Two
In accordance with Government Auditing Standards, we have also issued a report dated
December 1, 2011 on our consideration of the Corporation's internal control over financial
reporting and on 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.
Management has omitted Management's Discussion and Analysis that accounting principles
generally accepted in the United States of America requires to be presented to supplement the
basic financial statements. Such missing information, although not a part of the basic financial
statements, is required by the Governmental Accounting Standards Board, who considers it to
be an essential part of financial reporting for placing the basic financial statements in an
appropriate operational, economic, or historical context. Our opinion on the basic financial
statements is not affected by this missing information.
Accounting principles generally accepted in the United States of America require that the
budgetary comparison information listed in the table of contents be presented to supplement the
basic financial statements. Such information, although not a part of the basic financial
statements, is required by the Governmental Accounting Standards Board, who considers it to
be an essential part of financial reporting for placing the basic financial statements in an
appropriate operational, economic, or historical context. We have applied certain limited
procedures to the required supplementary information in accordance with auditing standards
generally accepted in the United States of America, which consisted of inquiries of management
about the methods of preparing the information and comparing the information for consistency
with management's responses to our inquiries, the basic financial statements, and other
knowledge we obtained during our audit of the basic financial statements. We do not express an
opinion or provide any assurance on the information because the limited procedures do not
provide us with sufficient evidence to express an opinion or provide any assurance.
ow~
December 1, 2011
0
•
-2-
FINANCIAL SECTION
Rosemead Housing Development Corporation
Statement of Net Assets
June 30, 2011
Governmental
Activities
ASSETS
Cash and investments (note 2) $ 73,597
Accounts receivable 14,442
Capital assets, depreciated, net (note 4) 8,667,490
Total assets 8,755,529
LIABILITIES
Accounts payable and accrued liabilities 6,090
Refundable deposits 36,376
Total liabilities 42,466
NET ASSETS
Invested in capital assets 8,667,490
Unrestricted 45.573
Total net assets $ 8,713,063
The accompanying notes are an integral part of these financial statements
-3-
Rosemead Housing Development Corporation
Statement of Activities
For the Year Ended June 30, 2011
Program Revenues
Operating Capital
Charges for Contributions Contributions Governmental
Expenses Services and Grants and Grants Activities
Governmental activities:
General government $ 1,024,686 $ 415,951 $ 355,000 $ - $ (253,735)
Total governmental
activities $ 1,024,686 $ 415,951 $ 355,000 $ - (253,735)
General revenues:
Investment income 40
Total general revenues 40
Change in net assets (253,695)
Net assets, beginning of year 8,966,758
Net assets, end of year $ 8,713,063
The accompanying notes are an integral part of these financial statements
-4-
Rosemead Housing Development Corporation
Balance Sheet
Governmental Fund
June 30, 2011
ASSETS
Cash and investments
Other receivables
Total assets
LIABILITIES AND FUND BALANCE
Liabilities:
Accounts payable and accrued liabilities
Refundable deposits
Total liabilities
Fund balance:
Restricted for:
Housing
Total fund balance
Total liabilities and fund balance
The accompanying notes are an integral part of these financial statements.
-5-
General
Fund
$ 73,597
14,442
$ 88,039
$ 6,090
36,376
466
45,573
45,573
$ 88,039
Rosemead Housing Development Corporation
Reconciliation of the Balance Sheet of Governmental
Fund to the Statement of Net Assets
June 30, 2011
Fund balance of governmental fund
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 the governmental fund activity.
Capital assets
Accumulated depreciation
Net assets of governmental activities
$ 45,573
11,171,141
(2,503,651)
$ 8,713,063
The accompanying notes are an integral part of these financial statements.
-6-
Rosemead Housing Development Corporation
Statement of Revenues, Expenditures, and Changes in Fund Balance
Governmental Fund
For the Year Ended June 30, 2011
General
Fund
REVENUES
Rental income $ 415,951
Investment income 40
Total revenues 415,991
EXPENDITURES
Operating 452,234
Administrative services paid to City of Rosemead 219,600
Facility rent paid to City of Rosemead 132,000
Total expenditures
803,834
Deficiency of revenues
under expenditures
(387,843)
OTHER FINANCING SOURCES
Transfers from Rosemead Community
Development Commission
355,000
Total other financing sources
355,000
Net change in fund balance
(32,843)
Fund balance, beginning of year 78,416
Fund balance, end of year $ 45,573
The accompanying notes are an integral part of these financial statements
-7-
Rosemead Housing Development Corporation
Reconciliation of the Statement of Revenues, Expenditures, and
Changes in Fund Balance of Governmental Fund to the
Statement of Activities
For the Year Ended June 30, 2011
Net change in fund balance - total governmental fund
Amounts reported for governmental activities in the statement of activities
are different because:
$ (32,843)
Governmental funds report capital outlays as expenditures. However, in
statement of activities, the costs of those assets is allocated over their
estimated useful lives as depreciation expense. Therefore,
depreciation expense is not reported as an expenditure in the
governmental funds.
Depreciation expense
Change in net assets of governmental activities
(220,852)
$ (253,695)
The accompanying notes are an integral part of these financial statements.
-8-
Rosemead Housing Development Corporation
Notes to the Basic Financial Statements
June 30, 2011
(1) 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 exists 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
-9-
Rosemead Housing Development Corporation
Notes to the Basic Financial Statements
June 30, 2011
(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
discretely 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 Corporation.
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.
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
government-wide financial statements, rather than reported
Proceeds of long-term debt are recorded as a liability in the
financial statements, rather than as an other financing source
reduce long-term indebtedness of the reporting government
reduction of the related liability, rather than as an expenditure.
10-
as assets in the
as expenditures.
government-wide
. Amounts paid to
are reported as a
Rosemead Housing Development Corporation
Notes to the Basic Financial Statements
June 30, 2011
(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.
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., when 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
nonexchange transactions are recognized as revenues when all applicable
eligibility requirements have been met.
-11-
Rosemead Housing Development Corporation
Notes to the Basic Financial Statements
June 30, 2011
(1)
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.
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.
(c) Major Fund
The Corporation reports the General Fund as its only major fund.
-12-
Rosemead Housing Development Corporation
Notes to the Basic Financial Statements
June 30, 2011
(1) Summary of Significant Accounting Policies (continued)
(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 $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.
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
Improvement 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.
-13-
Rosemead Housing Development Corporation
Notes to the Basic Financial Statements
June 30, 2011
(1) Summary of Significant Accounting Policies (continued)
(g) Fund Equity
The Corporation implemented GASB Statement No. 54, Fund Balance Reporting
and Governmental Fund Type Definitions during the year ended June 30, 2011.
This statement provides more clearly defined fund balance categories to make
the nature and extent of the constraints placed on a government's fund balance
more transparent. The following classifications describe the relative strength of
the spending constraints placed on the purposes for which resources can be
used:
• Nonspendable - amounts that are not in a spendable form (such as
inventory) or are required to be maintained intact.
• Restricted - amounts constrained to specific purposes by their providers
(such as grantors, bondholders and higher levels of government), through
constitutional provisions or by enabling legislation.
• Committed - amounts constrained to specific purposes by a government
itself, using the highest level of decision-making authority; to be reported as
committed, amounts cannot be used for any other purpose unless the
government takes the same highest level action to remove or change the
constraint.
• Assigned - amounts a government intends to use for a specific purpose;
intent can be expressed by the governing body or by an official or body to
which the governing body delegates the authority.
• Unassigned - amounts that are for any purpose, positive amounts are
reported only in a general fund.
The Board of Directors establishes (and modifies or rescinds) fund balance
commitments by passage of an ordinance or resolution. The Board designates
the Finance Committee and City Manager as the Corporation officials to
determine, define, and make the necessary account or fund transfers for the
amounts to those components of fund balance that are classified as "Assigned
Fund Balance".
When both restricted and unrestricted resources are available for use when an
expenditure is incurred, it is the Corporation's policy to use restricted resources
first, then unrestricted resources as they are needed. It is the Corporation's
policy to consider committed amounts as being reduced first, followed by
assigned amounts, and then unassigned amounts when expenditures are
incurred for purposes for which amounts in any of those unrestricted fund
balance classifications could be used.
14-
Rosemead Housing Development Corporation
Notes to the Basic Financial Statements
June 30, 2011
(1)
Summary of Significant Accounting Policies (continued)
(h) Rental Income
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.
(2)
Cash and Investments
Cash and investments at June 30, 2011 consisted of deposits with financial institutions.
The carrying amount of the Corporation's deposits was $73,597.
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, 2011, the Corporation had no deposits with financial institutions
in excess of federal depository insurance limits.
15-
Rosemead Housing Development Corporation
Notes to the Basic Financial Statements
June 30, 2011
(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, 2011. 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 $2,160,000 for the Angelus Senior Housing facility at June
30, 2011. 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 $3,342,000 for the Garvey Senior Housing
facility at June 30, 2011. The Corporation paid $60,000 and $72,000 in lease payments
to the City during the year ended June 30, 2011 for the Angelus and Garvey Senior
Housing facilities, respectively.
(4) Capital Assets
During the year ended June 30, 2011, the changes in capital assets were as follows:
Balance at
Balance at
June 30, 2010 Additions
Deletions June 30, 2011
Government activities:
Capital assets being depreciated:
Buildings and improvements
$ 11,042,597 $ -
$ - $ 11,042,597
Furniture and equipment
128,544 -
- 128,544
Total capital aseets being
depreciated
Less accumulated depreciation:
Buildings and improvements
Furniture and equipment
Total accumulated
depreciation
Governmental activities
capital assets, net
11,171,141 - - 11,171,141
(2,154,255) (220,852) - (2,375,107)
(128,544) - - (128,544)
(2,282,799) (220,852) - (2,503,651)
$ 8,888,342 $ (220,852) $ - $ 8,667,490
Depreciation expense is allocated to the general government function in the statement of
activities.
-16-
Rosemead Housing Development Corporation
Notes to the Basic Financial Statements
June 30, 2011
(5)
(6)
(7)
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.
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, 2011.
Excess of Expenditures Over Appropriations
Excess of expenditures over appropriations in individual funds are as follows:
Fund Expenditures Appropriations
General $ 803,834 $ 797,500 $
Excess
(6,334)
17-
Required Supplementary Information
I•
Rosemead Housing Development Corporation
Notes to Required Supplementary Information
June 30, 2011
(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, 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 do not constitute expenditures or
liabilities because the commitments will be re-appropriated and honored during the
subsequent year.
• -18-
Rosemead Housing Development Corporation
Schedule of Revenues, Expenditures, and Changes in Fund Balance
Budget and Actual - General Fund
For the Year Ended June 30, 2011
REVENUES
Rental income
Investment income
Total revenues
EXPENDITURES
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)
Net change in fund balance
Fund balance, beginning of year
Fund balance, end of year
Variance
Final Positive
Budget Actual (Negative)
$ 416,700 $ 415,951 $ (749)
- 40 40
416,700 415,991 (709)
445,900 452,234 (6,334)
219,600 219,600 -
132,000 132,000 -
797,500 803,834 (6,334)
(380,800) (387,843) (7,043)
355,000 355,000
355,000 355,000
(380,800) (32,843) 347,957
78,416 78,416 -
$ (302,384) $ 45,573 $ 347,957
19-
•
•
•
•
•
•
•
735 E. Carnegie Dr Suite 100
•
San Bernardino, CA 92408
909 889 0871 T
909 889 5361 F
•
amscpa net
a~nT'~LRS
•
-y,,11hp H Waller, CPA
onda L Odle, CPA. MST
•
y P Shea, CPA
K,, 1< A Franks
CPA
•
.
'''hew B Wilson, CPA, MSA
•
_ott W Marino, CPA
L-ona Shanbhag. CPA, MST
-
i, H. Zercher, CPA (Retired)
MANAGERS/STAFF
Nancy O'Rafferty, CPA. MBA
Bradferd A Welebir. CPA. MBA
fenny Liu, CPA, MST
Katie L Mlllsom, CPA
Papa Matar Thiaw. CPA. MBA
Maya S Ivanova, CPA, MBA
Danielle E Odgers. CPA
William C Clayton, CPA
Scott Millsom. CPA
Peter E Murray, CPA
Genivrve Schwarzkopf. CPA
Megan Hackney, CPA
MEMBERS
American Institute of
Certified Public Accountants
PCPS The AICPA Alliance
for CPA Firms
Governmental Audit
Quality Center
California Society of
Certified Public Accountants
ROGERS, ANDERSON, MALODY & SCOTT, LLP
CERTIFIED PUBLIC ACCOUNTANTS, SINCE 1948
Board of Directors
Rosemead Housing Development Corporation
City of 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
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,
2011, which collectively comprise the Corporation's basic financial
statements and have issued our report thereon dated December 1, 2011. 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.
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 overfinancial 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 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 Corporation's financial statements will not be
prevented, or detected and corrected in a timely basis.
STABILITY. ACCURACY- TRUST
-20-
Board of Directors
Rosemead Housing Development Corporation
Rosemead, California
Page Two
Our consideration of internal control over financial reporting was for the limited purpose
described in the first paragraph of this section and was not designed to identify all deficiencies
in internal control over financial reporting 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.
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.
This report is intended solely for the information and use of the Board of Directors, and
management of the Corporation and is not intended to be and should not be used by anyone
other than these specified parties.
December 1, 2011
-21-
ROSEMEAD COMMUNITY
DEVELOPMENT COMMISSION
FINANCIAL STATEMENTS
Fiscal Year Ended June 30, 2011
ROGERS, ANDERSON, MALODY & SCOTT, LLP
CERTIFIED PUBLIC ACCOUNTANTS, SINCE 1948
ROSEMEAD COMMUNITY DEVELOPMENT COMMISSION
FINANCIAL STATEMENTS
Fiscal Year Ended June 30, 2011
TABLE OF CONTENTS
Page
INDEPENDENT AUDITOR'S REPORT
FINANCIAL STATEMENTS:
Government-wide Financial Statements
Statement of Net Assets
Statement of Activities
Fund Financial Statements
1
3
4
Balance Sheet - Governmental Funds 5
Reconciliation of the Balance Sheet of Governmental Funds to the
Statement of Net Assets 6
Statement of Revenues, Expenditures and Changes in Fund
Balances - Governmental Funds 7
Reconciliation of the Statement of Revenues, Expenditures and Changes in
Fund Balances of Governmental Funds to the Statement of Activities 8
Notes to the Basic Financial Statements
REQUIRED SUPPLEMENTARY INFORMATION
9
Notes to Required Supplementary Information 29
Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget
and Actual - Low-Moderate Income Housing Set-Aside Fund 30
Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget
and Actual - Rosemead Housing Development Corporation 31
Supplementary Information.
Computation of Low and Moderate Income Housing Fund - Excess Surplus 32
Report on Internal Control Over Financial Reporting and on Compliance
and Other Matters Based on an Audit of Financial Statements Performed
in Accordance with Government Auditing Standards 33
Independent Auditor's Report on Compliance with Health and Safety Code
Section 33080.1 35
ROGERS. ANDERSON, MALODY & SCOTT, LLP
CERTIFIED PUBLIC ACCOUNTANTS. SINCE 1948
735 E Carnegie Dr Suite 100
San Bernardino. CA 92408
909 889 0871 T
909 889 5361 F
I* ramscpa net
10
PARTNERS
Phillip H Waller, CPA
Brenda L. Odle. CPA. MST
Terry P Shea, CPA
Kirk A. Franks, CPA
Matthew B Wilson. CPA. MSA
I • S_ott W Marino. CPA
L-,rla Shanbhag, CPA. MST
:y H Zercher, CPA (Retired)
MANAGERS / STAFF
Nancy O'Rafferty. CPA, MBA
Bradferd A Welebir, CPA, MBA
fenny Liu. CPA, MST
Katie L. Millsom. CPA
Papa Matar Thiaw, CPA. MBA
Maya S Ivanova, CPA, MBA
Danielle E Odgers, CPA
William C, Clayton. CPA
Scott Millsom. CPA
Peter E Murray, CPA
Genivrve Schwarzkopf, CPA
Megan Hackney. CPA
MEMBERS
American Institute of
Certified Public Accountants
Board of Directors
Rosemead Community Development Commission
Rosemead, California
INDEPENDENT AUDITOR'S 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, 2011, which collectively
comprise 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 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 and each major fund of the Commission as of June 30, 2011, 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.
PCPS The AICPA Arnonce
As explained in Note 8 of these financial statements, it is uncertain as to the
for CPA Firms
future continuation of redevelopment agencies in the State of California as a
Governmental Audit
result of certain legislative actions enacted by the California State Legislature.
Quality Center
California Society of
Certified Public Accountants
STABILITY ACCURACY. TRUST
i
Board of Directors
Rosemead Community Development Commission
Page Two
During the year under audit, the Commission adopted Governmental Accounting Standards
Board Statement No. 54, Fund Balance Reporting and Governmental Fund Type Definitions.
In accordance with Government Auditing Standards, we have also issued a report dated
December 1, 2011 on our consideration of the Commission's internal control over financial
reporting and on 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.
Management has omitted Management's Discussion and Analysis that accounting principles
generally accepted in the United States of America requires to be presented to supplement the
basic financial statements. Such missing information, although not a part of the basic financial
statements, is required by the Governmental Accounting Standards Board, who considers it to
be an essential part of financial reporting for placing the basic financial statements in an
appropriate operational, economic, or historical context. Our opinion on the basic financial
statements is not affected by this missing information.
Accounting principles generally accepted in the United States of America require that the
budgetary comparison information listed in the table of contents be presented to supplement the
basic financial statements. Such information, although not a part of the basic financial
statements, is required by the Governmental Accounting Standards Board, who considers it to
be an essential part of financial reporting for placing the basic financial statements in an
appropriate operational, economic, or historical context. We have applied certain limited
procedures to the required supplementary information in accordance with auditing standards
generally accepted in the United States of America, which consisted of inquiries of management
about the methods of preparing the information and comparing the information for consistency
with management's responses to our inquiries, the basic financial statements, and other
knowledge we obtained during our audit of the basic financial statements. We do not express an
opinion or provide any assurance on the information because the limited procedures do not
provide us with sufficient evidence to express an opinion or provide any assurance. 091,04141, In 'Z;~ ~j,,, Y CCo
December 1, 2011
-2-
Rosemead Community Development Commission
Statement of Net Assets
June 30, 2011
Governmental
Activities
ASSETS
Cash and investments (note 2) $ 15,827,032
Accounts receivable 447,654
Interest receivable 8,213
Due from City of Rosemead 226,314
Land held for resale 4,407,616
Deferred charges 628,120
Capital assets, depreciated, net (note 5) 18,942,276
Total assets 40,487,225
LIABILITIES
Accounts payable
864,659
Deposits payable
136,376
Due to City of Rosemead
727,478
Accrued interest payable
402,454
Noncurrent liabilities:
Due within one year
1,215,022
Due in more than one year
43,566,744
Total liabilities 46,912,733
NET ASSETS
Restricted for:
Low and moderate income housing 6,795,794
Unrestricted (deficit) (13,221,302)
Total net assets (deficit) $ (6,425,508)
The accompanying notes are an integral part of these financial statements
-3-
Rosemead Community Development Commission
Statement of Activities
For the Year Ended June 30, 2011
Program Revenues
Operating Capital
Charges for Contributions Contributions Governmental
Expenses Services and Grants and Grants Activities
Governmental activities:
Community development $ 5,331,277 $ 415,951 $ - $ - $ (4,915,326)
Interest expense 1,680,003 - - - (1,680,003)
Total governmental
activities $ 7,011,280 $ 415,951 $ - $ - $ (6,595,329)
General revenues:
Tax increment
Investment income
Other general revenues
Total general revenues
Change in net assets
Net assets (deficit), beginning of year
Net assets (deficit), end of year
6,893,575
122,062
7,997
7,023,634
428,305
(6,853,813)
$ (6,425,508)
The accompanying notes are an integral part of these financial statements.
-4-
Rosemead Community Development Commission
Balance Sheet
Governmental Funds
June 30, 2011
Low-Moderate
Rosemead
Income
Housing
Housing
Development
Debt
Capital
Set-Aside
Corporation
Service
Projects
Total
ASSETS
Cash and investments
$
2,342,659
$ 73,597
$
10,044,954
$
3,365,822
$
15,827,032
Accounts receivable
-
14,442
376,350
56,862
447,654
Interest receivable
2,157
-
1,533
4,523
8,213
Due from City of Rosemead
-
-
-
226,314
226,314
Land held for resale
-
-
4,407,616
4,407,616
Advances to other funds (note 4)
4,477,945
-
-
-
4,477,945
Total assets
$
6,822,761
$ 88,039
$
10,422,837
$
8,061,137
$
25,394,774
LIABILITIES AND FUND
BALANCES
Liabilities:
Accounts payable
$
1,814
$ 6,090
$
15
$
856,740
$
864,659
Deposits payable
-
36,376
100,000
136,376
Due to City of Rosemead
25,153
-
-
702,325
727,478
Deferred Revenue
-
-
-
53,315
53,315
Advances from other funds (note 4)
-
-
4,477,945
-
4,477,945
Total liabilities
26,967
42,466
4,477,960
1,712,380
6,259,773
Fund balances:
Restricted for:
Low and moderate housing
6,795,794
45,573
-
-
6,841,367
Debt service
-
-
5,944,877
-
5,944,877
Capital projects
-
-
1,941,141
1,941,141
Land held for resale
-
-
-
4,407,616
4,407,616
Total fund balances
6,795,794
45,573
5,944,877
6,348,757
19,135,001
Total liabilities and fund
balances
S
6,822,761
$ 88,039
$
10,422,837
S
8,061,137
$
25,394,774
The accompanying notes are an integral part of these financial statements
-5-
Rosemead Community Development Commission
Reconciliation of the Balance Sheet of Governmental
Funds to the Statement of Net Assets
June 30, 2011
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 the governmental fund activity.
Capital assets
Accumulated depreciation
Long-term debt has not been included in the governmental fund activity.
Bonds payable
Unamortized bond premiums
Costs associated with the issuance of debt are capitalized and amortized
in the statement of net assets and expensed in the governmental funds.
Deferred charges
Discount on bonds
Accrued interest payable for the current portion of interest due on bonds
payable has not been reported in the governmental funds.
Revenues that are measurable but not available. Amounts are recorded as
deferred revenue under the modified accrual basis of accounting.
Net assets of governmental activities
$ 19,135,001
26,045,293
(7,103,017)
(44,745,000)
(217,820)
628,120
181,054
(402,454)
53,315
$ (6,425,508)
The accompanying notes are an integral part of these financial statements.
-6-
Rosemead Community Development Commission
Statement of Revenues, Expenditures, and Changes in Fund Balances
Governmental Funds
For the Year Ended June 30, 2011
REVENUES
Tax increment
Rental Income
Investment income
Other
Total revenues
EXPENDITURES
Current:
General government
Public safety
Public works
Community development
Debt service:
Principal
Interest and fiscal charges
Cost of issuance of bonds
Total expenditures
Excess (deficiency) of
revenues over (under)
expenditures
OTHER FINANCING SOURCES
(USES)
Transfers in (note 4)
Transfers out (note 4)
Transfers to the City of Rosemead
Discount on bonds
Proceeds from long-term debt
Total other financing sources
(uses)
Net change in fund balances
Low-Moderate
Rosemead
Income
Housing
Housing
Development Debt Capital
Set-Aside
Corporation Service Projects Total
$ - $ - $ 6,893,575 $ - $ 6,893,575
415,951 - 415,951
6,268 40 56,578 59,176 122,062
- - - 7,997 7,997
6,268 415,991 6,950,153 67,173 7,439,585
- - 115,621
1,750
117,371
- - 995,468
-
995,468
- - -
5,803,685
5,803,685
292,372 803,834 -
-
1,096,206
- - 975,000
2,497,920
3,472,920
- 1,882,092
-
1,882,092
- -
275,344
275,344
292,372 803,834 3,968,181 8,578,699 13,643,086
(286,104) (387,843) 2,981,972 (8,511,526) (6,203,501)
974,464 355,000 1,133,461
2,462,925
(355,000) - (974,464) (1,133,461)
(2,462,925)
- - - (543,883)
(543,883)
- - - (192,139)
(192,139)
- - - 11,230,000
11,230,000
619,464 355,000 158,997 9,360,517 10,493,978
333,360 (32,843) 3,140,969 848,991 4,290,477
Fund balances, beginning of year 6,462,434 78,416 2,803,908 5,499,766 14,844,524
Fund balances, end of year S 6 795 794 S 45.573 S 5.944.877 $ 6.348.757 $ 19.135.001
The accompanying notes are an integral part of these financial statements.
-7-
Rosemead Community Development Commission
Reconciliation of the Statement of Revenues, Expenditures, and
Changes in Fund Balances of Governmental Funds to the
Statement of Activities
For the Year Ended June 30, 2011
Net change in fund balances - total governmental funds
Amounts reported for governmental activities in the statement of activities differ
from the amounts reported in the statement of activities because:
Governmental funds report capital outlays as expenditures. However, in the
statement of activities, the costs of those assets is allocated over their
estimated useful lives as depreciation expense.
Capital outlay
Depreciation expense
The issuance of long-term debt provides current financial resources to
governmental funds, while the repayment of the principal of long-term
debt consumes the current financial resources of governmental funds.
Neither transaction, however, has an effect on net assets.
Principal payments on debt
Proceeds from long-term debt
Discount on issuance
Cost of issuance
Some expenses reported in the statement of activities do not require the
use of current financial resources and, therefore, are not reported as
expenditures in governmental funds.
Decrease in accrued interest payable
Amortization of bond issuance costs
Amortization of issuance discounts
Amortization of bond premiums
Change in net assets of governmental activities
$ 4,290,477
3,798,507
(505,112)
3,472,920
(11,230,000)
192,139
275,344
193,372
(68,059)
(11,085)
19,802
8 428,305
The accompanying notes are an integral part of these financial statements.
-8-
Rosemead Community Development Commission
Notes to the Basic Financial Statements
June 30, 2011
(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 exists 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
-9-
Rosemead Community Development Commission
Notes to the Basic Financial Statements
June 30, 2011
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 transactions 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 expenditures.
Proceeds of long-term debt are recorded as a liability in the government-wide
financial statements, rather than other financing sources. 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-
Rosemead Community Development Commission
Notes to the Basic Financial Statements
June 30, 2011
(1)
Summary of Significant Accounting Policies, (continued)
(b) Basis of Accounting and Measurement Focus, (continued)
Fund Financial Statements
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
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 Commission in a
custodial capacity for other individuals or organizations. The Commission 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 Commission uses a sixty day availability period.
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.
-11-
Rosemead Community Development Commission
Notes to the Basic Financial Statements
June 30, 2011
(1) 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.
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
June 30, 2011
(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
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.
(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.
13-
Rosemead Community Development Commission
Notes to the Basic Financial Statements
June 30, 2011
(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 an other financing source. 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.
• -14-
Rosemead Community Development Commission
Notes to the Basic Financial Statements
June 30, 2011
(1)
Summary of Significant Accounting Policies, (continued)
(h) Fund Equity
The Commission implemented GASB Statement No. 54, Fund Balance Reporting
and Governmental Fund Type Definitions during the year ended June 30, 2011.
This statement provides more clearly defined fund balance categories to make the
nature and extent of the constraints placed on a government's fund balance more
transparent. The following classifications describe the relative strength of the
spending constraints placed on the purposes for which resources can be used:
• Nonspendable - amounts that are not in a spendable form (such as inventory)
or are required to be maintained intact.
• Restricted - amounts constrained to specific purposes by their providers (such
as grantors, bondholders and higher levels of government), through
constitutional provisions or by enabling legislation.
• Committed - amounts constrained to specific purposes by a government itself,
using the highest level of decision-making authority; to be reported as
committed, amounts cannot be used for any other purpose unless the
government takes the same highest level action to remove or change the
constraint.
• Assigned - amounts a government intends to use for a specific purpose; intent
can be expressed by the governing body or by an official or body to which the
governing body delegates the authority.
• Unassigned - amounts that are for any purpose; positive amounts are reported
only in a general fund.
The Board of Directors establishes (and modifies or rescinds) fund balance
commitments by passage of an ordinance or resolution. The Board designates the
Finance Committee and City Manager as the Commission officials to determine,
define, and make the necessary account or fund transfers for the amounts to those
components of fund balance that are classified as "Assigned Fund Balance".
When both restricted and unrestricted resources are available for use when an
expenditure is incurred, it is the Commission's policy to use restricted resources
first, then unrestricted resources as they are needed. It is the Commission's policy
to consider committed amounts as being reduced first, followed by assigned
amounts, and then unassigned amounts when expenditures are incurred for
purposes for which amounts in any of those unrestricted fund balance
classifications could be used.
15-
Rosemead Community Development Commission
Notes to the Basic Financial Statements
June 30, 2011
(1)
Summary of Significant Accounting Policies, (continued)
(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 of its 1987 tax allocation notes. This prepayment 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.
0) 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.
(2)
Cash and Investments
Cash and investments as of June 30, 2011 are classified in the accompanying financial
statements as follows:
Statement of net assets:
Cash and investments $ 15,827,032
Total cash and investments $ 15,827,032
Cash and investments as of June 30, 2011 consist of the following:
Deposits with financial institutions
$ 7,396,998
Investments
8,430,034
Total cash and investments
$ 15,827.032
16-
Rosemead Community Development Commission
Notes to the Basic Financial Statements
June 30, 2011
(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.
Authorized
by
Maximum Maximum
Investment Types Investment Maximum
Percentage of Investment in
Authorized by State Law Policy Maturity'
Portfolio' One Issuer'
Local Agency Bonds
No
5 years
None
None
US Treasury Obligations
Yes
5 years
None
None
US Agency Securities
Yes
5 years
None
None
Banker's Acceptances
Yes
180 days
40
30%
Commercial Paper
Yes
270 days
25%
10%
Negotiable Certificate of Deposit
Yes
1 year
30%
None
Repurchase Agreements
No
1 year
None
None
Reverse Repurchase Agreements
No
92 days
20% 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
NIA
None
None
Local Agency Investment Funds
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.
-17-
Rosemead Community Development Commission
Notes to the Basic Financial Statements
June 30, 2011
(2)
Cash and Investments, (continued)
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
Maximum percentage investment
Authorized Investment Type maturity of portfolio in one
Local Agency Bonds
None
None
None
US Treasury Obligations
None
None
None
US 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
NIA
20%
10%
Local Agency Investment Funds
NIA
None
None
Investment Agreements
NIA
None
None
Certificate 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 Commission 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.
18-
Rosemead Community Development Commission
Notes to the Basic Financial Statements
June 30, 2011
(2)
Cash and Investments, (continued)
Disclosures Relating to Interest Rate Risk, (continued)
Information about the sensitivity of the fair values of the Commission'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:
Investment
State investment pool
Held by bond trustee:
Money market mutual funds
Certificates of deposit
Total
12 Months
Amount Or Less
Remaining Maturity
13-24 25-60
Months Months
$ 6,162,809 $ 6,162,809 $
1,143,054 1,143,054
1,124,171 -
1,124,171
More Than
60 Months
$ 8,430,034 $ 7,305,863 $ - $ 1,124,171 $ -
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 Rating as of Year End
Legal Not
Investment Type Amount Rating AAA Aa2 Rated
State investment pool S 6,162,809 N/A $ - $ - $6,162,809
Held by bond trustee:
Money market mutual funds 1,143, 054 N/A 1,143, 054 - -
Certificates of deposit 1,124,171 N/A - - 1,124,171
Total S 8,430,034 $1,143,054 $ - $7,286,980
19-
Rosemead Community Development Commission
Notes to the Basic Financial Statements
June 30, 2011
(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. The Commission
had no investments in any one issuer (other than U.S. Treasury securities, mutual funds,
and external investment pools) that represent 5% or more of total Commission's
investments.
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 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 Commission deposits by pledging first trust deed
mortgage notes having a value of 150% of the secured public deposits. As of June 30,
2011, 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 Commission 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 Commission'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.
-20-
Rosemead Community Development Commission
Notes to the Basic Financial Statements
June 30, 2011
(3) 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 $2,160,000 for the Angelus Senior Housing facility at June
30, 2011. 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 $3,342,000 for the Garvey Senior Housing
facility at June 30, 2011. The Corporation paid $60,000 and $72,000 in lease payments
to the City during the year ended June 30, 2011 for the Angelus and Garvey Senior
Housing facilities, respectively.
(4) 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 funds. 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, 2011, 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.
-21-
Rosemead Community Development Commission
Notes to the Basic Financial Statements
June 30, 2011
(4)
Interfund Activity (continued)
Interfund transfers were as follows for the year ended June 30, 2011:
Transfers in:
Low-Moderate Rosemead
Income Housing Debt
Housing Development Service
Set-Aside Corporation Fund Total
Transfers out:
Debt Service Funds $ 974,464 $ - $ - $ 974,464 (A)
Low-Moderate Income
Housing Set-Aside - 355,000 - 355,000
Capital Projects Fund - - 1,133,461 1,133,461 (B)
Totals $ 974,464 $ 355,000 $1,133,461 $2,462,925
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, 2011.
(B) To record the Series 2010A Tax Allocation Bond proceeds deposited into the 2010
Debt Service Reserve Fund.
-22-
Rosemead Community Development Commission
Notes to the Basic Financial Statements
June 30, 2011
(5)
Capital Assets
Capital asset activity for the year ended June 30, 2011 is as follows:
Government activities:
Capital assets not being
depreciated:
Land
Construction in progress
Total capital assets, not
being depreciated
Beginning Ending
Balance Additions Deletions Balance
$ 2,425,898 $ - $ - $ 2,425,898
- 3,589,363 3,589,363
2,425,898 3,589,363 - 6,015,261
Capital assets being depreciated:
Buildings and improvements 18,273,719 209,144
Vehicles 93,280 -
Furniture and office equipment 1,453,889 -
Total capital assets being
depreciated 19,820,888 209,144
Less accumulated depreciation:
Buildings and improvements (5,071,173) (493,511)
Vehicles (93,280) -
Furniture and office equipment (1,433,452) (11,601)
Total accumulated
depreciation (6,597,905) (505,112)
18,482, 863
93,280
- 1,453,889
20, 030, 032
(5,564,684)
- (93,280)
(1,445, 053)
(7,103,017)
Total capital assets being
depreciated, net 13,222,983 (295.968) - 12,927,015
Governmental activities
capital assets, net $15,648,881 $ 3,293,395 $ - $ 18,942,276
Depreciation expense was charged entirely to the community development function of
the Commission for the year ended June 30, 2011.
-23-
Rosemead Community Development Commission
Notes to the Basic Financial Statements
June 30, 2011
(6)
Long-Term Debt
Long-term debt consists of the following at June 30, 2011:
Bonds:
Tax Allocation Bonds,
Series 2006A
Tax Allocation Bonds,
Series 2006B
Tax Allocation Bonds,
Series 2010A
Subtotal bonds
Deferred amounts:
Unamortized bond
premiums
Discount on issuance
Total bonds
Beginning Ending Due in
Balance Additions Deletions Balance One Year
$ 10,700,000 $
- $ 900,000
$ 9,800,000
$ 930,000
23,790,000
- 75,000
23,715,000
80,000
11,230,000 - 11,230,000 200,000
34, 490, 000 11, 230, 000 975,000 44, 745, 000 1,210,000
237,622 - 19,802 217,820 19,802
- (192,139) (11,085) (181,054) (14,780)
34,727,622 11,037,861 983,717 44,781,766 1,215,022
Advances from City 2,497,920
2,497,920 -
Total long-term debt $ 37,225,542 $ 11,037,861 $ 3,481,637 $ 44,781,766 $1,215,022
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 loan was retired during
the fiscal year ended June 30, 2011.
-24-
Rosemead Community Development Commission
Notes to the Basic Financial Statements
June 30, 2011
(6) Long-Term Debt (continued)
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
Commission, beginning October 1, 201
the bonds. The unamortized balance as
has been acquired to satisfy the re
outstanding balance was $9,800,000.
Tax Allocation Bonds, Series 2006B
subject to early redemption, at the option of the
7. Bond premiums are amortized over the life of
of June 30, 2011 was $217,820. A surety bond
serve requirements. As of June 30, 2011 the
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, 2011 the
outstanding balance was $23,715,000.
Tax Allocation Bonds, Series 2010A
In July 2010, the Commission issued $11,230,000 in Merged Project Area Tax Allocation
Bonds. The bonds mature in amounts ranging from $200,000 to $1,135,000 with interest
rates ranging from 3.00% to 5.00% through December 1, 2023. 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
is payable annually on December 1, beginning on December 1, 2011. Interest is payable
semi-annually on June 1 and December 1. Per the bond indenture, a reserve is required
to be maintained. At June 30, 2011, the balance held in the reserve account was
$1,143,054. As of June 30, 2011 the outstanding balance was $11,230,000.
• -25-
Rosemead Community Development Commission
Notes to the Basic Financial Statements
June 30, 2011
(6)
(7)
Long-Term Debt, (continued)
At June 30, 2011, debt service requirements to maturity for governmental activities long-
term debt are as follows:
Fiscal years ending
June 30, Principal
2012
2013
2014
2015
2016
2017-2021
2022-2026
2027-2031
2032-2034
$ 1,210,000
1,795,000
1,855,000
1,920,000
1,995,000
11,360,000
10,515,000
8,215,000
5,880,000
Totals
Risk Management
Interest
$ 1,902,336
1,852,124
1,790,511
1,718,574
1,635,579
6,777,216
4,188,559
2,279,891
399,406
$ 44,745,000 $ 22,544,196
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.
-26-
Rosemead Community Development Commission
Notes to the Basic Financial Statements
June 30, 2011
(8)
Recent Changes in Legislation Affecting California Redevelopment Agencies
On June 29, 2011, the Governor of the State of California signed Assembly Bills X1 26
and 27 as part of the State's budget package. Assembly Bill X1 26 requires each
California redevelopment agency to suspend (effective July 1, 2011) nearly all activities
except to implement existing contracts, meet already-incurred obligations, preserve its
assets and prepare for the impending dissolution of the agency. Assembly Bill X1 27
provides a means for redevelopment agencies to continue to exist and operate by
means of a Voluntary Alternative Redevelopment Program. Under this program, each
agency would adopt an ordinance agreeing to make certain payments to the County
Auditor Controller in fiscal year 2011-12 and annual payments each fiscal year
thereafter. Assembly Bill X1 26 indicates that the agency "may use any available funds
not otherwise obligated for other uses" to make this payment. The Agency intends to use
available monies of its redevelopment agency for this purpose. The amounts to be paid
after fiscal year 2012-13 have yet to be determined by the state legislature.
Assembly Bill X1 26 directs the State Controller of the State of California to review the
propriety of any transfers of assets between redevelopment agencies and other public
bodies that occurred after January 1, 2011. If the public body that received such
transfers is not contractually committed to a third party for the expenditure or
encumbrance of those assets, the State Controller is required to order the available
assets to be transferred to the public body designated as the successor agency by
Assembly Bill X1 26.
The League of California Cities and the California Redevelopment Association (CRA)
filed a lawsuit on July 18, 2011 on behalf of cities, counties and redevelopment agencies
petitioning the California Supreme Court to overturn Assembly Bills X1 26 and 27 on the
grounds that they violate the California Constitution. On August 11, 2011, the California
Supreme Court issued a stay of all of Assembly Bill X1 27 and most of Assembly Bill X1
26. The California Supreme Court stated in its order that "the briefing schedule is
designed to facilitate oral argument as early as possible in 2011, and a decision before
January 15, 2012." A second order issued by the California Supreme Court on August
17, 2011 indicated that certain provisions of Assembly Bills X1 26 and 27 were still in
effect and not affected by its previous stay, including requirements to file an appeal of
the determination of the community remittance payment by August 15, the requirement
to adopt an Enforceable Obligations Payment Schedule ("EOPS") by August 29, 2011,
and the requirement to prepare a preliminary draft of the initial Recognized Obligation
Payment Schedule ("ROPS") by September 30, 2011.
-27-
Rosemead Community Development Commission
Notes to the Basic Financial Statements
June 30, 2011
(8)
(9)
Recent Changes in Legislation Affecting California Redevelopment Agencies (continued)
Because the stay provided by Assembly Bill X1 26 only affects enforcement, each
agency must adopt an Enforceable Obligation Payment Schedule and draft Recognized
Obligation Payment Schedule prior to September 30, as required by the statute.
Enforceable obligations include bonds, loans and payments required by the federal or
state government; legally enforceable payments required in connection with agency
employees such as pension payments and unemployment payments, judgments or
settlements; legally binding and enforceable agreements or contracts; and contracts or
agreements necessary for the continued administration or operation of the agency that
are permitted for purposes set forth in ABX1 26.
On August 9, 2011, the Commission adopted Ordinance No. 917 indicating it will comply
with the Voluntary Alternative Redevelopment Program in order to permit the continued
existence and operation of the agency, in the event Assembly Bills X1 26 and/or 27 are
upheld as constitutional. The initial payment by the agency is estimated to be
$2,112,991 with one half due on January 15, 2012 and the other half due May 15, 2012.
Thereafter, an estimated $500,000 will be due annually. The semi-annual payments will
be due on January 15 and May 15 of each year and would increase or decrease with
changes in tax increment. Additionally, an increased amount would be due to schools if
any new debt is incurred. Assembly Bill X1 27 allows a one-year reprieve on the
agency's obligation to contribute 20% of tax increment to the low and moderate income
housing fund so as to permit the Agency to assemble sufficient funds to make its initial
payments.
Management believes that the Commission will have sufficient funds to pay its
obligations as they become due during the fiscal year ending June 30, 2012. The nature
and extent of the operation of redevelopment agencies in the State of California beyond
that fiscal year are dependent upon the outcome of litigation surrounding the actions of
the State.
Excess of Expenditures Over Appropriations
Excess of expenditures over appropriations in individual funds are as follows:
Fund
Low-Mod Housing
RHDC
Expenditures Appropriations Excess
$ 292,372 $ 261,200 $ (31,172)
$ 803,834 $ 797,500 $ (6,334)
-28-
Required Supplementary Information
Rosemead Community Development Commission
Notes to Required Supplementary Information
June 30, 2011
(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 do not constitute expenditures
or liabilities because the commitments will be re-appropriated and honored during the
subsequent year.
29-
Rosemead Community Development Commission
Schedule of Revenues, Expenditures, and Changes in Fund Balance
Budget and Actual - Low-Moderate Income Housing Set-Aside Fund
For the Year Ended June 30, 2011
REVENUES
Investment income
Total revenues
EXPENDITURES
Current:
Community development
Total expenditures
Excess of revenues
over (under) expenditures
OTHER FINANCING SOURCES
(USES)
Transfers in
Transfers out
Total other financing
sources (uses)
Net change in fund balance
Fund balance, beginning of year
Fund balance, end of year
Variance
Final Positive
Budget Actual (Negative)
$ - $ 6,268 $ 6,268
6,268 6,268
261,200 292,372 (31,172)
261,200 292,372 (31,172)
(261,200) (286,104) (24,904)
974,464 974,464
(250,000) (355,000) (105,000)
(250,000) 619,464 869,464
(511,200) 333,360 844,560
6,462,434 6,462,434
$ 5,951,234 $ 6,795,794 $ 844,560
-30-
Rosemead Community Development Commission
Schedule of Revenues, Expenditures, and Changes in Fund Balance
Budget and Actual - Rosemead Housing Development Corporation Fund
For the Year Ended June 30, 2011
Variance
Final
Positive
Budget
Actual
(Negative)
REVENUES
Rental income
$ 416,700
$ 415,951
$ (749)
Investment income
-
40
40
Total revenues
416,700
415,991
(709)
EXPENDITURES
Current:
Community development
797,500
803,834
(6,334)
Total expenditures
797,500
803,834
(6,334)
Excess of revenues
over (under) expenditures (380,800) (387,843) (7,043)
OTHER FINANCING SOURCES
(USES)
Transfers in - 355,000 355,000
Total other financing
sources (uses) - 355,000 355,000
Net change in fund balance (380,800) (32,843) 347,957
Fund
balance, beginning of year
78,416
78,416 -
Fund
balance, end of year
$ (302,384) $
45,573 $ 347,957
-31-
Rosemead Community Development Commission
Computation of Low and Moderate Income Housing - Excess Surplus
July 1, 2010
Opening fund balance - July 1, 2010 $ 6,462,434
Adjusted balance 1,984,489
Limitation (greater of $1,000,00 or four years set-aside)
2008 - 2009
$ 928,000
2007 - 2008
1,454,337
2006 - 2007
1,019,082
2005 - 2006
989,417
Total $ 4,390,836
Base limitation $ 1,000,000
Greater amount 4,390,836
Computed excess surplus - July 1, 2010 $ -
-32-
ROGERS, ANDERSON, MALODY & SCOTT, LLP
CERTIFIED PUBLIC ACCOUNTANTS, SINCE 1948
735 E Carnegie Dr. Suite 100
Is San Bernardino. CA 92408
909 889 0871 T
909 889 S361 F
ramscpa net
Board of Directors
PARTNERS
Rosemead Community Development Commission
Phillip H Waller, CPA
Rosemead, California
Brenda L Odle. CPA, MST
Terry P Shea. CPA
Kirk A Franks. CPA
Matthew B Wilson. C 1., ,
Report on Internal Control Over Financial Reporting and on Compliance
Scott W Manno, CPA
and Other Matters Based on an Audit of Financial Statements
Leena Shanbhag.
,
performed in Accordance with Government Auditing Standards
JayH Ze Zercher<her, CPA PA lk
r
euedi
MANAGERS / STAFF
Nancy O'Rafferty, CPA. MBA We have audited the financial statements of the governmental activities and
Bradferd A Welebir CPA MBA each major fund of Rosemead Community Development
Commission the
jenny Liu. CPA, MST
Katie L. Millsom. CPA Commission), a component unit of the City of Rosemead, California, as of
Papa Matar Thiaw. CIA MBA. and for the year ended June 30, 2011, and have issued our report thereon
Maya S Ivanova, CPA, MBA dated December 1, 2011. We conducted our audit in accordance with
Danielle E. Odgers. CPA
William C Clayton. C-FIB.. auditing standards generally accepted in the United States of America and
Scott Millsom, CPA the standards applicable to financial audits contained in Govemment Auditing
Peter E Murray, CPA Standards, issued by the Comptroller General of the United States.
Genivive Sehwarzkoei. CPA
Megan Hackney. CPS.
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 basic
component unit 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.
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 detect and correct misstatements on a
MEMBERS timely basis. A material weakness is a deficiency or combination of
American Institute of
Certified Public Accountants deficiencies, in internal control such that there is a reasonable possibility that
a material misstatement of the Commission's financial statements will not be
PCPS The AICPA Alliance prevented, or detected and corrected in a timely basis.
for CPA Forms
Governmental Audit
Quality Center
California Society of
Certified Public Accountants
-33-
STABILITY ACCURACY. TRUST
Board of Directors
Rosemead Community Development Commission
Rosemead, California
Page Two
Our consideration of internal control over financial reporting was for the limited purpose
described in the first paragraph of this section and was not designed to identify all deficiencies
in internal control over financial reporting 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.
Compliance
As part of obtaining reasonable assurance about whether the basic component unit financial
statements of the Commission 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 and, accordingly, we do not express such an opinion. The results of our
tests disclosed no instances of noncompliance that are required to be reported under
Government Auditing Standards.
This report is solely intended for the information and use of the Board of Directors,
management, and the State Controller's Office, Division of Accounting and Reporting and is not
intended to be and should not be used by anyone other than these specified parties.
Rte,, , Aa4,J <<~
December 1, 2011
-34-
ROGERS. ANDERSON, MALODY 8, SCOTT, LLP
CERTIFIED PUBLIC ACCOUNTANTS, SINCE 1948
735 E Carnegie Dr Suite 100
San Bernardino. CA 92408
909 889 0871 T
909 889 5361 F
Board of Directors
ramscpa net
Rosemead Community Development Commission
Rosemead, California
PARTNERS
Phdhp H Waller. CPA Independent Auditor's Report on Compliance
Brenda L Odle. CPA. MST with Health and Safety Code Section 33080.1
Terry P Shea, CPA
Kirk A. Franks. CPA
Matthew B Wilson, CPA MSA Compliance
Scott W Manna, CPA
Leena ag. CPA. MST
Jay ay H H We have audited Rosemead Community Development Commission's (the
. Zerc Zercheher, CPA (ReureJ ~
Commission) compliance with the California Health and Safety Code as
MANAGERS / STAFF required by Section 33080.1 for the year ended June 30, 2011. Compliance
Nancy O'Rafferty, CPA, MBA with the requirements referred to above is the responsibility of Commission's
Bradferd A. Welebir, CPA, MBA management. Our responsibility is to express an opinion on Commission's
Jenny Liu. CPA, MST
Katie L Millsom, CPA compliance based on our audit.
Papa Matar Thiaw. CPA. MBA
Maya S. Ivanova. CPA, MBA We conducted our audit of compliance in accordance with auditing standards
Danielle E. Odgers. CPA
William C Clayton, CPA generally accepted in the United States of America; the standards applicable
Scott Millsom. CPA to financial audits contained in Government Auditing Standards, issued by the
Peter E Murray, CPA Comptroller General of the United States; and Guidelines for Compliance
Genivrve Schwarzkopf (__PA Audits of Califomia Redevelopment Agencies, June 2011, issued by the State
CPA
Controller and as interpreted in the Auditing Procedures for Accomplishing
Compliance Audits of California Redevelopment Agencies, August 2011,
issued by the Governmental Accounting and Auditing Committee of the
California Society of Certified Public Accountants.
Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether noncompliance with the compliance
requirements referred to above could have a material effect on the
Commission has occurred. An audit includes examining, on a test basis,
evidence about the Commission's compliance with those requirements and
performing such other procedures as we considered necessary in the
circumstances.
MEMBERS We believe that our audit provides a reasonable basis for our opinion. Our
American Institute of
Certified Public Accountants audit does not provide a legal determination of Commission's compliance
with those requirements. In our opinion, except for Finding 2011-01 below,
for PIPS CPA The Firms A1cPA A+I,;,n the Commission complied, in all material respects, with the compliance
Governmental Aud,t requirements referred to above that are applicable for the year ended June
Quality Center 30, 2011.
California Society of
Certified Public Accountants
-35-
STABILITY. ACCURACY. TRUST
Board of Directors
Rosemead Community Development Commission
Rosemead, California
Page Two
Finding 2011-01:
A. Pursuant to §33080 of the California Community Redevelopment Law, each
redevelopment agency shall perform the following within six months of the end of the
agency's fiscal year:
1. File a copy of the annual report (as defined by §33080.1 of the California Community
Redevelopment Law) with the State Controller's Office and the agency's legislative
body.
The Blight Progress and the Property reports were not submitted to the State
Controller's Office.
Management's Corrective Actions Planned
Staff will ensure that these reports are included in future submittals to the State
Controller's Office as they are already in the file.
B. Pursuant to §33080.1 of the California Community Redevelopment Law, each
redevelopment agency shall file a fiscal statement that includes substantially all of the
information required by §33080.5.
Although the required information was presented to the Commission Board, it was not a
"cohesive whole report" as required by the State Controller's Office. In their report,
Selected Redevelopment Agencies - Review Report, Analysis of Administrative,
Financial and Reporting Practices dated March 2011, the Controller's Office commented
that the required information, although available, needs to be presented in a cohesive
whole report.
Management's Corrective Actions Planned
Staff will ensure that future information is included in a cohesive report.
C. Pursuant to §33080.1(8) of the California Community Redevelopment Law, each
redevelopment agency shall file an annual report containing:
i. The time limit for the commencement for eminent domain proceeding to acquire
property within the project area(s)
This information was not provided.
Management's Corrective Actions Planned
Staff will ensure that future annual reports to the Commission include the expiration date
of Project Area's 2 eminent domain authority.
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Board of Directors
Rosemead Community Development Commission
Rosemead, California
Page Three
In addition, the results of our procedures disclosed an immaterial instance of noncompliance
with the provisions described in the Guidelines for Compliance Audits of California
Redevelopment Agencies, June 2011 listed below as Finding 2011-02:
Finding 2011-02
Section §33606 of the Health and Safety Code requires a Redevelopment Agency to adopt
a budget which includes proposed indebtedness, a work program and goals, and an
examination of the previous year's achievements along with a comparison with the previous
year's work program.
During the fiscal year being audited, the Commission did adopt a budget but the budget did
not contain any proposed indebtedness even though the Commission issued debt during the
year under audit. Also, although the budget did contain the required work program and
goals, however, it did not include an examination of the previous year's achievements along
with a comparison with the previous year's work program.
Management's Corrective Actions Planned
Staff will ensure that these budget requirements are met when adopting future budgets.
Internal control over compliance
Management of the Commission is responsible for establishing and maintaining effective
internal control over compliance with the compliance requirements referred to above. In
planning and performing our audit, we considered the Commission's internal control over
compliance to determine the 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
Commission's internal control over compliance.
A deficiency in internal control over compliance 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, noncompliance 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 possibility that material
noncompliance with a compliance requirement will not be prevented, or detected and corrected,
on a timely basis.
Our consideration of internal control over compliance was for the limited purpose described in
the first paragraph of this section and was not designed to identify all deficiencies in internal
control that might be deficiencies, significant deficiencies, or material weaknesses in internal
control over compliance. We did not identify any deficiencies in internal control over compliance
that we consider to be material weaknesses, as defined above.
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This report is intended solely for the information and use of management, Board of Directors,
others within the entity, and the State Controller's Office, Division of Accounting and Reporting
and is not intended to be and should not be used by anyone other than these specified parties.
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December 1, 2011
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