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2012 CAFRMOM - V on, ` I •. III - 111 - 11 -1 CITY OF ROSEMEAD Rosemead, California Comprehensive Annual Financial Report Fiscal Year Ended June 30, 2012 Prepared by the Finance Department Steve Brisco Director of Finance CITY OF ROSEMEAD Comprehensive Annual Financial Report Fiscal Year Ended June 30, 2012 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: 61 Government -wide Financial Statements: Statement of Net Assets 14 Statement of Activities 15 Fund Financial Statements: 63 Governmental Funds: Balance Sheet 16 Reconciliation of the Balance Sheet of Governmental Funds to the 65 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 to the Statement of Activities 21 Proprietary Funds: Statement of Net Assets 22 Statement of Revenues, Expenses, and Changes in Fund Net Assets 23 Statement of Cash Flows 24 Fiduciary Funds: Statement of Fiduciary Net Assets 25 Statement of Changes in Fiduciary Net Assets 26 Notes to the Basic Financial Statements 27 REQUIRED SUPPLEMENTARY INFORMATION: Notes to the Required Supplementary Information 60 Schedule of Revenues, Expenditures, and Changes in Fund Balances - Budget and Actual — General Fund 61 Schedule of Revenues, Expenditures, and Changes in Fund Balances - Budget and Actual — Rosemead Housing Development Corporation 62 Schedule of Revenues, Expenditures, and Changes in Fund Balances - Budget and Actual — Low and Moderate Income Housing Asset 63 Schedule of Revenues, Expenditures, and Changes in Fund Balances - Budget and Actual — Low and Moderate Income Housing Set -Aside 64 Schedule of Funding Progress —PARS Retirement Enhancement Plan 65 Schedule of Funding Progress —Other Post Employment Benefits Plan 65 CITY OF ROSEMEAD Comprehensive Annual Financial Report Fiscal Year Ended June 30, 2012 TABLE OF CONTENTS continued FINANCIAL SECTION, (continued) . t Combining Balance Sheet -- Non -Major Governmental Funds 68 Combining Statement of Revenues, Expenditures, and Changes in Fund Balances — Non -Major Governmental Funds 71 Schedule of Revenues, Expenditures, and Changes in Fund Balances - Budget and Actual — Community Development Block Grant 74 Schedule of Revenues, Expenditures, and Changes in Fund Balances - Budget and Actual — HOME Program 75 Schedule of Revenues, Expenditures, and Changes in Fund Balances - Budget and Actual — Proposition A 76 Schedule of Revenues, Expenditures, and Changes in Fund Balances - Budget and Actual — Proposition C 77 Schedule of Revenues, Expenditures, and Changes in Fund Balances - Budget and Actual — Federal Highway Grant 78 Schedule of Revenues, Expenditures, and Changes in Fund Balances - Budget and Actual — State Gas Tax 79 Schedule of Revenues, Expenditures, and Changes in Fund Balances - Budget and Actual — Air Quality Management District 80 Schedule of Revenues, Expenditures, and Changes in Fund Balances - Budget and Actual — Local Transportation 81 Schedule of Revenues, Expenditures, and Changes in Fund Balances - Budget and Actual - Street Lighting 82 Schedule of Revenues, Expenditures, and Changes in Fund Balances - Budget and Actual — Narcotics Seizure 83 Schedule of Revenues, Expenditures, and Changes in Fund Balances - Budget and Actual -- Measure R 84 Major Fund Budget and Actual Schedules: Schedule of Revenues, Expenditures, and Changes in Fund Balances - Budget and Actual — Redevelopment Agency Debt Service Fund 85 Schedule of Revenues, Expenditures, and Changes in Fund Balances - Budget and Actual — Redevelopment Agency Capital Projects Fund 86 Schedule of Revenues, Expenditures, and Changes in Fund Balances - Budget and Actual -- City Capital Projects 87 CITY OF ROSEMEAD Comprehensive Annual Financial Report Fiscal Year Ended June 30, 2012 TABLE OF CONTENTS, (continued) Page FINANCIAL SECTION, (continued) Internal Service Funds: T Combining Statement of Net Assets 89 Combining Statement of Revenues, Expenses and Changes in Fund Net Assets 90 Combining Statement of Cash Flows 91 Statement of Changes in Fiduciary Assets and Liabilities — Agency Fund .92 STATISTICAL SECTION Net Assets by Component 94 Changes in Net Assets 96 Fund Balances of Governmental Funds 98 Changes in Fund Balances of Governmental Funds 100 Assessed Value and Estimated Actual Value of Taxable Property 102 Direct and Overlapping Property Tax Rates 103 Principal Property Taxpayers 104 Property Tax Levies and Collections 105 Ratios of Outstanding Debt by Type 106 Ratio of General Bonded Debt Outstanding 107 Direct and Overlapping Governmental Activities Debt 108 Legal Debt Margin 109 Pledged- Revenue Coverage 111 Demographic and Economic Statistics 112 Principal Employers 113 Full -time and Part -time City Employees by Function 114 Operating Indicators by Function 115 Capital Assets Statistics by Function 116 J� 9 awards. These reports are available in the City of Rosemead's separately issued Single Audit Report. GAAP require 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 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, 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 54,000. 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 governing 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` private agencies under contract. Some of the contracts in effect during the fiscal year were for police and street maintenance_ The City also has three blended component units: 1) the Rosemead Financing Authority (the Authority), 2) the Rosemead Community Development Commission (the RCDC) and 3) the Rosemead Housing Development Corporation (RHDC). The City of Rosemead also provides a full range of services, including recreational activities and cultural events. Additional information on all three of these legally separate entities can be found in Note 1(a) in the notes to the financial statements. The annual budget serves as the foundation for the City of Rosemead and its component unit's financial planning and control. All business units and component units of the City of Rosemead are required to submit requests for appropriation to the City Manager in mid March of each year. The City Manager uses these requests as the starting point for developing a proposed budget. The City Manager then presents this proposed budget to the City Council for review prior to June 30. The City Council is required to hold public hearings on the proposed budget and to adopt a final budget no later than June 30, the close of the City of Rosemead's fiscal year. The appropriated budget is prepared by fund and department (e.g., public safety). Department heads, with City Manager approval, may make transfers of appropriations within a department. Transfers of appropriations between departments, however, require the approval of the City Council. Budget -to-actual comparisons are provided in this report for each individual governmental fund for which an appropriated annual budget has been adopted. These comparison schedules are presented in the governmental fund subsection of this report, which starts on page 61. Factors Affecting Financial Condition The information presented in the financial statements is perhaps best understood when it is considered from the broader perspective of the specific environment within which the City of Rosemead operates. Local economy. Considering the current recessionary economy, the City of Rosemead currently enjoys a reasonably favorable economic environment and local indicators point to stability with slow growth 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 stabilize with some growth compared with the same period a year earlier. It should be noted that while the stability and growth has been positive, sales tax receipts are still down approximately 1% in comparison to the 2008109 peak. The stability realized in retail has helped keep Rosemead's unemployment rate down to 9.7% whereas the larger Los Angeles, Long Beach, Glendale area rate is 11.1%. 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 its vision for the year 2020 and on January 10, 2012 the City Council amended its implementation plan for the years 2012 and 2013. The implementation plan identifies three Key Organizational Goals: 1) Ensure the City's Continued Financial Viability. 2) Enhance Public Safety and Quality of Life. 3) Beautify Residential Neighborhoods and Commercial Corridors. Many of these goals were started in the 2011 -12 fiscal year 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. Additionally, one of the new implementation strategies that was 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 how to fund them acrd 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 priorities, in order of importance, of: 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 121 California public entities and is organized under a joint powers agreement pursuant to California Government Code §6600 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 in the notes to 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 11 in the notes to the Basic Financial Statements. Dissolution of the Redevelopment Agency (RCDC). On December 29, 2011 the California State Supreme court upheld the ruling that allows the . legislature to dissolve redevelopment agencies. The dissolution became 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 and other enforceable obligations, but the remainder will be re- directed to the County and 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 Acknowledgement 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, 2011. In order to be awarded a Certificate of Achievement, the government had to publish an easily readable and efficiently organized CAFR that satisfied both generally accepted accounting principles and applicable legal requirements. A Certificate of Achievement is valid for a period of one year only. We believe that our current CAFR continues to meet the Certificate of Achievement Program's requirements; however, we are not submitting it to the GFOA for review due to budgetary concerns. 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 city council for their unfailing support for maintaining the highest standards of professionalism in the management of the City of Rosemead's finances. Respectfully submitted, n r_h_�� Matthew F. Hawkesworth Assistant City Manager /Director of Finance iv (This page intentionally left blank) C�L�TZON ► it Directory of Officials June 30, 2012 CITY COUNCIL Sandra Armenta, Mayor Polly Low, Mayor Pro Tern Margaret Clark, Council Member Steven Ly, Council Member William Alarcon, Council Member CITY MANAGEMENT Jeff Allred, City Manager Matthew E. Hawkesworth, Assistant City Manager Michelle Ramirez, 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 Reporting Presented to City of Rosemead California For its Comprehensive Animal Financial Report for the Fiscal Year Ended June 30, 2011 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. N CITY OF ROSEMEr D Function used Organizational Chart Planning Commission € City Clerk L Assistant City Manager . Technology & - �- Business Support i i i Human r - - Resources i I i i - _ Finance i i i Risk �- - - Management City .Manager ...Traffic Commission City Attorney i Public Safety Community Development Public Works' Parks & Recreation Vii FINANCIAL SECTION (This page intentionally left blank) -+ -... In accordance with Government Auditing Standards, we have also issued our report dated January 16, 2013, 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, combining and individual nonmajor fund financial statements, nonmajor fund budgetary comparison schedules, and statistical section 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 and nonmajor fund budgetary comparison schedules 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 and statistical sections 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. 1 50LAA) otnttwo LU January 16, 2013 4 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, 2012. 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 ® On January 31, 2012 the Rosemead Community Development Commission (RCDC) was dissolved through actions of the state to eliminate redevelopment agencies. The City of Rosemead has elected to become the Successor Agency for the RCDC and will receive tax increment funding to fund payments for any enforceable obligations. Additionally, the Successor Agency is holding approximately $7 million in bond proceeds from the 2010 Tax Increment Bonds and will be able to expend these once the California Department of Finance issues a Finding of Completion to the Successor Agency in early 2013. • The General Fund budget assumed for a decrease in unassigned reserves of approximately $1.36 million due to contributions to the Other Post Employment Benefit fund, the absorption of salary and benefit related costs from redevelopment and other Capital Improvement Projects; however, due to increased revenues and a reduction in expenditures, only $497,900 was used in FY 2011 -12. ® The net assets related to Government Activities has changed by more than $28 million in FY 2011 -12 due to creation of the Successor Agency which absorbed the assets of the former Rosemead Community Development Commission. *At the end of the current fiscal year unassigned fund balance for the General Fund was $9,519,173 or 56 percent of total General Fund expenditures. 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 are comprised of 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. 3 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 and moderate income housing corporation, for which the City of Rosemead is financially accountable. Financial information for the component units is reported separately from the financial information presented for the primary government itself. The government -wide financial statements can be found on 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 18 active governmental funds. Information is presented separately in the governmental fund balance sheet and in the governmental fund statement of revenues, expenditures, and changes in fund balances for the General Fund, Rosemead Housing Development Corporation Fund, Low and Moderate Income Housing Asset Fund, Low and Moderate Income Housing Set -Aside Fund, Redevelopment Agency Debt Service Fund, Redevelopment Agency Capital Projects Fund and City Capital 4 Projects Fund, all seven of which are considered to be major funds. Data from the other 11 governmental funds are combined into a single, aggregated presentation. Individual fund data for each of these non -major governmental funds is provided in the form of combining statements elsewhere in this report. The City of Rosemead adopts an annual appropriated budget for all its funds. A budgetary comparison statement has been provided for the General Fund, Rosemead Housing Development Corporation Fund, Low and Moderate Income Housing Asset Fund, Low and 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, Narcotics Seizure Fund, Measure R Fund, City Capital Projects Fund, Redevelopment Agency Debt Service Fund and the Redevelopment Agency Capital Projects Fund to demonstrate compliance with this budget. The basic governmental fund financial statements can be found on pages 16 - 21 of this report. Fiduciary funds. Fiduciary funds are used to account for resources held for the benefit of parties outside the government. Fiduciary funds are not reflected in the government -wide financial statement because the resources of those funds are not available to support the City of Rosemead's own programs. The accounting used for fiduciary funds is much like that used for proprietary funds. The basic fiduciary fund financial statements can be found on pages 25 - 26 of this report. Notes to the financial statements. The notes provide additional information that is essential to a full understanding of the data provided in the government -wide and fund financial statements. The notes to the Basic Financial Statements can be found on pages 27 — 58 of this report. Other information. In addition to the basic financial statements and accompanying notes, this report also presents certain required supplementary information concerning the City of Rosemead's progress in funding its obligation to provide pension benefits to its employees. Required supplementary information and notes can be found beginning on page 59 - 65 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 section. Combining and individual fund statements and schedules can be found on pages 68 — 92 of this report. Government -wide Financial Analysis As noted earlier, net assets may serve over time as a useful indicator of a government's financial position. In the case of the City of Rosemead, assets exceeded liabilities (net assets) by $78,568,855 at the close of the most recent fiscal year. A significant portion of the City of Rosemead's net assets (68.8 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 the 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, 5 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, 2012 and 2011 (thousands) Current and other assets $ 30,709 $ 49,410 Capital assets 53,312 52,137 Total assets 84,021 101,547 Long -term liabilities outstanding 1,616 46,208 Other liabilities 3,836 5,023 Total liabilities 5,452 51,231 Net assets: Invested in capital assets, net of related debt 54,010 14,761 Restricted 10,871 24,807 Unrestricted 13,688 10,748 Total net assets $ 78,569 $ 50,316 An additional portion of the City of Rosemead's net assets (13.8 percent) represents resources that are subject to external restrictions on how they may be used. The remaining balance of unrestricted net assets ($13.7 million) 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 $28.3 million during the current fiscal year. The increase can be credited to the dissolution of redevelopment agency and all of the assets of the former agency being transferred to the City as the Successor Agency. Governmental activities. Governmental activities increased the City of Rosemead's net assets by $28.3 million. Contributing to the change in net assets are several single occurrence events described below. • As mentioned above the dissolution of the assets to the City totaling $34.3 million. • Less: Operating contributions and Property the dissolution of redevelopment agency. redevelopment agency transferred all the Tax contributions decreased as a result of M City of Rosemead's Changes in Net Assets Years Ended June 30, 2012 and 2011 (thousands) Program revenues: Charges for services $ 3,206 $ 3,108 Operating grants and contributions 5,051 9,039 Capital grants and contributions 1,568 4,252 General revenues: Property taxes 10,567 13,656 Other taxes 5,158 5,534 Investment income 195 368 Intergovernmental, unrestricted - 264 Other 854 253 Loss on sale of capital assets (2,340) - Extraordinary item: Gain on dissolution of redevla ment agency 34,271 - Total revenues 58,530 36,474 Expenses: General government 3,989 3,160 Public safety 7,517 8,882 Public works 11,588 11,907 Community services - 596 Community development 4,080 3,969 Parks and recreation 2,533 2,363 Interest on long-term debt 570 1,682 Total expenses 30,277 32,559 Increase in net assets 28,253 3,915 Net assets - June 30, 2011 50,316 46,401 Net assets - June 30, 2012 1 $ 78,569 $ 50,316 0 04 ! .1 - xag�muqw q Y Ot NNW N . C 11 ■ III �y ■ Y 1 u A — M ra 1 1 1 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. As of the end of the current fiscal year, the City of Rosemead's governmental funds reported combined fund balances of $24,399,514 a decrease of $13,992,675 in comparison with the prior year. Approximately 33.7 percent or $8,226,768 of this total fund balance, constitutes unassigned, undesignated 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 committed 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 $9,519,173, while total fund balance reached $14,821,172. 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 56 percent of total general fund expenditures, while total fund balance represents 87 percent of that same amount. The fund balance of the City of Rosemead's general fund decreased by $497,900 during the current year. Highlights of the change in fund balance are presented below: • General Fund revenues increased by $600,936 over last year. The main driver relating to revenue increases came from tax increases in property tax, sales tax, transient occupancy tax (hotel tax), and building permit fees due to an improving economy. Additionally, the City realized increases in recreation related revenue due to increases in facility rentals for the new aquatics facilities and an increase in program participation. • Continued outreach by Code Enforcement and Administration resulted in an increase in business license fees of approximately $62,000 in comparison to FY 2010 -11. • The City Council implemented an Administrative Citation Process which is being used instead of issuing criminal citations for many civil code violations. Along with this new process, the City has contracted with a new third -party provider to handle the processing of all the parking citation and administrative citations. Despite only being in place for part of the year, an increase of $70,000 has been realized due to improved collection efforts. • The City continued to make payments towards the unfunded portion of the Other Post Employment Benefits liability in the amount of $644,548 from Unassigned General Fund Balance. Despite this budgeted reduction in Fund Balance, the actual fund balance reduction was only $497,900 for the General Fund. L Operating cost overruns in the City as a whole were due to the elimination of Redevelopment as of January 31, 2012. Although Tax Increment funding was eliminated, the City absorbed all staffing related costs and some program related costs in the General Fund for the remaining five months of the fiscal year. The costs totaled approximately $408,000 for the five month period. Additional costs overruns, such as those for citation processing and building inspections were covered by increases in revenue which more than offset the related costs. There were also additional costs related to fuel and vehicle maintenance. Fuel prices increased during the year at rates above those originally projected, resulting in additional costs of $62,000. General Fund Budget Analysis. Due to some transition in staffing and the additional work created by the elimination of redevelopment, budget adjustments to revenue were not made during the fiscal year. Staff continued to track individual revenues, but did not make any adjustments to the original budget. The actual revenue variance was $782,000 or 4.8 percent more than the adjusted budget. Major contributors to the variance in Taxes revenue includes an increase of $154,000 in Property Taxes resulting from the reallocation of former redevelopment tax increment, Sales Tax increases of $252,000 which was driven by an improving economy and the increase in fuel prices, and Transient Occupancy Tax increases from an improving travel industry. Shortfalls from budgeted estimates in Vehicle License Fees (VLF) of $170,000, due to the State eliminating VLF funding which is currently being challenged in court, and in interest earnings of $120,000, due to an investment market that continues to struggle, 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 $141,000 in Licenses and Permits was a result of increased building and development activity in the City. Charges for services, primarily in the Parks and Recreation Division were underestimated by approximately $37,000, which can be credited to increased usage of the new aquatics facilities. The remainder, Other Revenue, was $178,000 higher than estimated revenue because of grants and other reimbursements provided to the City during the year. The General Fund original expenditure budget was increased by $644,548. The contributor to the increase was the $644 appropriation for the City's unfunded retirement liability. Net actual expenditures were $234,692 more than the amended budget primarily due to the absorption of staffing costs formerly charged to the redevelopment agency. General Government overspent by $202,193 due to additional legal costs of $72,000 and employee related costs from redevelopment and retirements of $130,000. Public works was over budget by net $138,218 due to increased fuel costs of $62,000 and employee related costs of $76,000. Public Safety overspent by $65,338 which was a direct result of increased costs related to parking and administrative citation processing which was more than covered by increases in revenue from improved collection efforts. The Community Development Department overspent their budget by $164,885 for building and plan check fees or $73,000 and employee related costs of $92,000. Parks and Recreation had aggregate savings of $342,243 largely because of the temporary closure of one community center due to renovations, a consolidation of many recreational programs to community parks and the reduction in reliance on part-time staffing for many day -to -day and special event tasks which are now performed by full -time personnel. 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. Prop 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 all three funds exceeded revenue estimated by $187,000. 10 Since the transportation taxes are an enhancement to sales tax we can see that consumer sales is 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. Measure R, the newest of the funds, is beginning to spend its revenue for future project planning. Rosemead Housing Development Corporation (RHDC). The RHDC Fund has traditionally received its funding from tenant rents and subsidies from the former Low - Moderate Income Housing Fund. As operational costs have continued to increase and tenant rents have remained relatively constant, the reliance on the subsidy from the Low - Moderate Income Housing Fund has become more important. Through the elimination of redevelopment this obligation was submitted and subsequently approved by the Department of Finance as an enforceable obligation which will ensure ongoing funding for the RHDC into the future. As such, revenues and expenditures in this fund will typically balance out at the end of each fiscal year with just a minimal balance remaining due to timing issues. Vehicle Replacement and Technology Replacement Funds. These funds are utilized to cover the costs of equipment and vehicle replacement over time. Using departments are assessed charges for equipment used by them. The charges are accumulated in the internal service funds for future replacement of vehicles and equipment. Capital Asset and Debt Administration Capital assets. The City of Rosemead's investment in capital assets for its governmental activities as of June 30, 2012, amounts to $53,311,995 (net of accumulated depreciation). This investment in capital assets includes land, buildings and improvements, machinery and equipment, park facilities, roads, highways, bridges and construction in progress. Major capital asset events during the current fiscal year included the following: • Construction of the new parking lot for the Rosemead Community Recreation Center and Library • Various street resurfacing and construction related projects • City Hall Emergency Generator acquisition and installation • City -wide energy efficiency upgrades including new HVAC systems at the Rosemead Community Recreation Center and City Hall • Catch Basin Insert installations in compliance with NPDES regulations 11 City of Rosemead's Capital Assets (net of depreciation) (thousands) Land $ 2,912 $ 2,969 Buildings 15,032 16,054 Improvements other than Buildings 526 567 Machinery and equipment 116 170 Autos and trucks 381 375 Furniture and office equipment 34 67 Infrastructure 34,299 24,503 Construction in progress 12 7,432 Total $ 53,312 $ 52,137 Additional information on the City of Rosemead's capital assets can be found in Note 7, found on pages 44 -45 of the Basic Financial Statements. Long -term debt. At the end of the current fiscal year, the Successor Agency to the Rosemead Community Development Commission had total bonded debt outstanding of $43,535,000. Of this amount, all of it is backed by future property tax increment revenues. City of Rosemead's Outstanding Debt Revenue Bonds (thousands) Tax Allocation Bonds 1 $ 43,5351 $ 44,745 The Successor Agency's total bonded debt decreased by $1,210,000 during the current fiscal year due to debt service payments. For more detailed information about the City's longterm debt please refer to Note 8, Changes in Long -Term Liabilities, found on page 45 of the Basic Financial Statements. 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 and has started to show slow improvements. 12 • At the time the FY 2012 -13 budget was being prepared, State legislators and the Governor had not resolved their significant budget deficit and assumptions were made that no additional reductions would be made to local revenues since redevelopment was eliminated and VLF funds were seized in FY 2011 -12. The budget is balanced; however, some revenue sources such as the sale of Proposition A funds will not provide a permanent ongoing revenue source for the General Fund. The operating budget was balanced without the use of reserves, and another payment to the unfunded other post employment benefit liability will be made. 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 Assistant City Manager /Finance Director, 8838 East Valley Boulevard, Rosemead, CA 91770. 13 CITY OF ROSEMEAD Statement of Net Assets June 30, 2012 Total assets 84,020,443 Liabilities: Accounts payable and accrued liabilities Governmental Accrued salaries and benefits Activities Assets: 259,298 Cash and investments (note 2) $ 21,921,833 Receivables: 379,575 Accounts 1,738,372 1 nterest 27,387 Notes 1,117,667 Due from Successor Agency (note 5) 76,042 Advances to Successor Agency (note 5) 4,477,945 Prepaid expenses 1,349,202 Capital assets (note 7): Land 2,912,284 Construction in progress 11,515 Other capital assets, net 50,388,196 Total assets 84,020,443 Liabilities: Accounts payable and accrued liabilities 3,373,896 Accrued salaries and benefits 202,595 Retentions payable 259,298 Non - current liabilities (note 8): Due within one year 379,575 Due in more than one,year 1,236,224 Total liabilities 5,451,588 Net assets: Invested in capital assets, net of related debt 54,010,031 Restricted for: Public safety 2,715 Public works 4,416,083 Community service 59,071 Low and moderate housing 6,392,878 Unrestricted 13,688,077 Total net assets $ 78,568,855 The accompanying notes are an integral part of these financial statements. 14 CITY OF ROSEMEAD Statement of Activities Fiscal Year Ended June 30, 2012 Net (expense) Governmental activities: General government revenue and $ 108,748 $ 21,702 $ changesin Pro ram Revenues net assets Operating Capital 773,260 (6,062,342) Charges for Contributions Contributions Governmental Expenses Services and Grants and Grants Activities Governmental activities: General government $ 3,989,359 $ 108,748 $ 21,702 $ - $ (3,858,909) Public safety 7,517,101 681,499 - 773,260 (6,062,342) Public works 11,588,278 193,278 3,840,596 - (7,554,404) Community development 4,080,294 1,518,211 1,188,424 794,447 (579,212) Parks and recreation 2,532,665 704,029 - - (1,828,636) Interest and other charges 569,045 - - - (569,045) Total governmental activities $ 30,276,742 $ 3,205,765 $ 5,050,722 $ 1,567,707 (20,452,548) General revenues: Taxes: Property taxes 9,653,228 Sales and use taxes 3,200,911 Property taxes in lieu of sales and use taxes 914,281 Transient occupancy taxes 1,323,886 Franchise taxes 587,109 Other taxes 46,284 Investment income 195,165 Other 853,956 Loss on sale of capital assets (2,340,090) Extraordinary item: Gain on dissolution of redevelopment agency 34,271,082 Total general revenues and extraordinary item 48,705,812 Change in net assets 28,253,264 Net assets, beginning of year 50,315,591 Net assets, end of year $ 78,568,855 The accompanying notes are an integral part of these financial statements. 15 CITY OF ROSEMEAD Governmental Funds Balance Sheet June 30, 2012 W. Special Revenue Rosemead Housing Low & Moderate Low & Moderate Development Income }lousing Income Housing General Cor oration Asset Set -Aside Assets Cash and investments (note 2) $ 14,061,333 $ 00,609 $ 1,915,783 $ - Receivables: Accounts 1,297,857 13,734 - - Interest 24,655 - - Notes 1,059,116 - - - Prepaid items 2,034 - - - Due from other funds (note 4) 1,284,416 - - - Due from Successor Agency (note 5) 13,796 - - - Advances to Successor Agency (note 5) - - 4,477,945 - Total assets $ 17,743,207 $ 104,343 $ 6,393,728 $ Liabilities and Fund Balances Liabilities: Accounts payable and accrued liabilities $ 1,870,557 $ 45,272 $ - $ - Accrued salaries and benefits 152,735 - - - Retentions payable - - - Due to other funds (note 4) - 850 - Deferred revenue 898,743 - - - Total liabilities 2,922,035 45,272 850 - Fund balances: Nonspendable 2,034 - - - Restricted for: Public safety - - - - Public works - - Low and moderate income housing - 59,071 6,392,878 - Committed 5,294,253 - - Assigned 5,712 - - Unassigned 9,519,173 - - Total fund balances (deficit) 14,821,172 59,071 6,392,878 - Total liabilities and fund balances $ 17,743,207 104 343 $ 6,393,728 $ - W. Debt Service Capital Projects Redevelopment Redevelopment Non -Major Agency Agency City Governmental Totals $ - $ - $ 1,149,397 $ 4,546,751 $ 21,763,873 - - - 426,781 1,738,372 - - - 2,732 27,387 - - 58,551 1,117,667 - - - 2,034 - - - - 1,284,416 - - 50,974 2,028 66,798 - - - - 4,477,945 $ - 1,200,371 $ 5,036,843 $ 30,478,492 $ - $ $ 1,010,963 $ 445,851 $ 3,372,643 - - 7,077 42,783 202,595 - - 244,649 14,649 259,298 - - 1,283,566 1,284,416 - - - 61,283 960,026 - 1,262,689 1,848,132 6,078,978 - - - - 2,034 - - 2,715 2,715 - - 4,416,083 4,416,083 - - - 6,451, 949 - - - 5,294,253 - - - - 5,712 - (62,318) (1,230,087) 8,226,768 - - (62,318) 3,188,711 24,399,514 1,200,371 5,036,843 _ __$ 30,478,492 17 (This page intentionally left Blank) CITY OF ROSEMEAD Governmental Funds Reconciliation of the Balance Sheet of Governmental Funds to the Statement of Net Assets June 30, 2012 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, net of depreciation Long term debt and compensated absences that have not been included in the governmental fund activity. Compensated absences Retrospective deposits payable 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. 53,050,005 (563,774) (841,214) 1,347,168 960,026 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. 217,130 Net assets of governmental activities $ 24,399,514 $ 78,568,855 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, 2012 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 development Parks and recreation Capital outlay Debt service: Principal lnterest and fiscal charges Total expenditures Excess (deficiency) of revenues over (under) expenditures Other financing sources (uses): Transfers in (note 6) Transfers out (note 6) Total other financing sources (uses) Extraordinary item: Gain (loss) on dissolution of redevelopment agency (note 15) Net change in fund balances Fund balances (deficit), beginning of year Fund balances (deficit), and of year Rosemead Housing Development General Corporation $ 13,358,683 $ 187,349 1,156,719 1,025,797 619,397 79,669 412,471 650,622 6,234 17,078,236 418,705 Special Revenue Low & Moderate Low & Moderate Income Housing Income Housing Asset Set -Aside 2,550 1,814 4,364 3,799,041 7,071,438 2,574,618 - - - 1,094,885 805,235 109 146,867 2,455,457 - - - 6,301 17,001,740 805,235 109 146,867 76,496 (386,530) (109) (142,503) 400,028 139,724 (574,396) - (191,175) (208,853) (574,396) 400,028 191,175 (69,129) - 6,584,162 (6,584,162) (497,900) 13,498 6,392,878 (6,795,794) 15,319,072 45,573 - 6,795,794 $ 14,821,172 $ 59,071 $ 6,392,878 $ - 19 Debt Service Capital Projects Redevelopment Redevelopment Non -Major Agency Agency cit Governmental Totals $ 2,601,979 $ $ - $ - $ 15,960,662 - 3,992,578 5,381,991 9,561,918 1,156,719 737 28,857 1,055,391 - - 619,397 - 768,997 768,997 22,362 17,645 47,479 582,176 - - 658,670 2,624,341 17,645 3,993,315 6,227,324 30,363,930 - 6,767 - 397,494 4,203,302 - - 445,663 7,517,101 - 395,264 3,447,921 6,417,803 534,130 - 1,100,677 3,681,903 - - - 77,208 2,532,665 - 3,339,723 5,683,866 60,186 9,090,076 1,210,000 - - - 1,210,000 961,506 - - 961,506 2,705,636 3,346,490 6,079,130 5,529,149 35,614,356 (81,295) 3,328,845 (2,085,815) 698,175 (5,250,426) - 5,891,622 - 6,431,374 (139,724) (124,521) - (5,315,705) (6,554,374) (139,724) (124,521) , 5,891,622 (5,315,705) (123,000) (5,723,858) (2,895,391) (8,619,249) (5,944,877) (6,348,757) 3,805,807 (4,617,530) (13,992,675) 5,944,877 6,348,757 (3,868,125) 7,806,241 38,392,189 $ - $ - $ (62,318} $ 3,188 711 $ 24.399.514 20 (This page intentionally left blank) 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, 2012 Net change in fund balances - total governmental funds 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 expense exceeded capital outlays in the current year. This activity is reconciled as follows: Cost of assets capitalized, less disposals at net book value (net of Internal Service Fund) Depreciation expense (net of Internal Service Fund) 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 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 Decrease in accrued interest payable 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. Increase in retrospective deposits payable Increase in compensated absences payable Revenues in the statement of activities that do not provide current financial resources are not reported as revenues in the funds. 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. The transfer of long -term assets and liabilities to the Successor Agency resulted in an extraordinary gain /loss due to the dissolution of the redevelopment agency. Deferred charges were not current resources and the long -term liabilities were not payable in the current period, and, therefore, were not reported in the governmental funds: Extraordinary loss from transfer of deferred revenues to the Successor Agency Extraordinary loss from transfer of deferred charges to the Successor Agency Extraordinary gain from transfer of long -term debt to the Successor Agency Change in net assets of governmental activities $ (13,992,675) 3,679,953 (2,499,049) 1,210,000 486,031 402,454 (217,758) (58,380) (3,764,919) 117,276 (53, 315) (591,354) 43, 535, 000 $ 28,253,264 The accompanying notes are an integral part of these financial statements. 21 CITY OF ROSEMEAD Statement of Net Assets Internal Service Funds June 30, 2012 Assets Current assets: Cash and investments (note 2) Due from Successor Agency (note 5) Total current assets Non - current assets: Capital assets: Other capital assets, net (note 7) Total non - current assets Total assets Liabilities Current liabilities: Accounts payable Lease payable - current (note 8) Total current liabilities Non - current liabilities: Lease payable (note, 8) Total non - current liabilities Total liabilities Net assets Invested in capital assets, net of related debt Unrestricted Total net assets $ 157,960 9,244 167.204 261,990 261,990 429,194 1,253 53,022 54.275 157,789 157,789 212,064 51,179 165,951 $ 217,130 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, 2012 Operating revenues: Charges for services $ 95,500 Total operating revenues 95,500 Operating expenses: Contractual services 35,385 Depreciation 55,849 Total operating expenses 91,234 Operating income 4,266 Non - operating revenues (expenses): Investment income 3 Interest expense (9,993) Total non - operating revenues (expenses) (9 Income (loss) before transfers (5,724) Transfers in (note 6) 123,000 Changes in net assets 117,276 Net assets, beginning of year 99,854 Net assets, end of year $ 217,130 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, 2012 Cash flows from operating activities: Cash received from users departments $ 101,468 Cash payments to suppliers for goods and services (189,301) Net cash (used for) operating activities (87,833) Cash flows from noncapital financing activities: Cash received from other funds 123,000 Net cash provided by noncapital financing activities 123,000 Cash flows from capital and related financing activities: Principal paid on capital lease (50,848) Interest paid on capital lease (9,993) Cash paid to purchase capital asset (86,303) Net cash (used for) capital and related financing activities (147,144) Cash flows from investing activities: Interest on investment 3 Net cash provided by investing activities 3 Net (decrease) in cash and investments (111,974) Cash and investments, beginning of year 269,934 Cash and investments, end of year $ 157,960 Reconciliation of operating income to net cash (used for) operating activities: Operating income $ 4,266 Adjustments to reconcile operating income to net cash (used for) operating activities: Depreciation 55,849 (Increase) decrease in due from other funds 5,968 Increase (decrease) in accounts payable (153,916) Total adjustments (92,099) Net cash (used for) operating activities $ (87,833) The accompanying notes are an integral part of these financial statements. 24 CITY OF ROSEMEAD Statement of Fiduciary Net Assets June 30, 2012 Assets Cash and investments (note 2) Receivables: Accounts Interest Notes Deferred charges Total assets Liabilities Accounts payable Deposits payable Accrued interest payable Due to City of Rosemead (note 5) Advances from City of Rosemead (note 5) Deferred revenue Long -term debt (note 15): Due within one year Due in more than one year Total liabilities Net Assets Held in trust for the Successor Agency Total net assets Successor Agency Private- purpose Agency Trust Fund Fund $ 12,086,245 $ 510,715 56,862 - 140,481 - 2,474,014 - 554,765 - $ 15,312,367 $ 510,715 1,238,684 375 393,116 76,042 4,477,945 140,481 1,800,022 41,766,722 49, 893, 387 510,715 $ 510,715 (34,581,020) $ (34,581,020) The accompanying notes are an integral part of these financial statements. 25 CITY OF ROSEMEAD Statement of Changes in Fiduciary Net Assets For the Period of Inception February 1, 2012 through June 30, 2012 Additions Property taxes Investment earnings Other Total additions Deductions Administrative expenses Affected taxing entities AB 1484 demand payment Interest expense Total deductions Extraordinary loss on dissolution of redevelopment agency (note 15) Change in net assets Net assets (deficit), beginning of period Net assets (deficit), end of period Successor Agency Private - purpose Trust Fund $ 3,081,085 41,948 3,60'1 3,126,634 69,858 742,427 1,222,008 1,402,279 3,436,572 (34,271,082) (34,581,020) $ (34,581,020) The accompanying notes are an integral part of these financial statements. 26 CITY OF ROSEMEAD Notes to the Basic Financial Statements Fiscal Year Ended June 30, 2012 (1) Summary of Significant Accounting Policies (a) Reporting Entitx 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 building and safety. 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. 27 CITY OF ROSEMEAD Notes to the Basic Financial Statements Fiscal Year Ended June 30, 2012 (1) Summary of Significant Accounting Policies, (continued) (a) Reporting Entity, continued Rosemead Communitv 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. The activities of the Commission are recorded in the Low Moderate Income Housing special revenue fund, the CDC Debt Service fund, and the CDC Capital Projects fund. On December 29, 2011, a Supreme Court ruling directed that all redevelopment agencies dissolved on February 1, 2012; therefore, these funds account for activities of the Commission through January 31, 2012. See footnote 15 for additional information on the redevelopment dissolution. Due to the dissolution, the Commission did not issue separate financial statements for the fiscal year ending June 30, 2012. Prior year financial statements 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. The activities of the Corporation are recorded in the RHDC special revenue fund. Separately issued financial statements of the Corporation can be obtained from the Finance Department. 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. (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 Governmental Accounting Standards Board pronouncements. 28 CITY OF ROSEMEAD Notes to the Basic Financial Statements Fiscal Year Ended June 30, 2012 (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. 0 CITY OF ROSEMEAD Notes to the Basic Financial Statements Fiscal Year Ended June 30, 2012 (1) Summary of Significant Accounting Policies, (continued) (b) Basis of Accounting and Measurement Focus, (continued) Fund Financial Statem 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. 30 CITY OF ROSEMEAD Notes to the Basic Financial Statements Fiscal Year Ended .June 30, 2012 (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. However, special reporting treatments are used to indicate 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 maintains two fiduciary fund types. The first is a private - purpose trust fund which uses the economic resources measurement focus and the accrual basis of accounting. The second is an agency fund which has no measurement focus. Agency funds are custodial in nature (assets equal liabilities) and do not involve the recording of City revenues and expenses. 31 CITY OF ROSEMEAD Notes to the Basic Financial Statements Fiscal Year Ended June 30,2012 (1) Summary of Significant Accounting Policies, (continued) (c) Maior 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. Rosemead Housin Development Corporation -- Accounts for the construction, financing and operations of low and moderate income housing. The Corporation is a blended component unit of the City of Rosemead Low and Moderate Income Housing Asset Special Revenue Fund - Accounts for the housing assets transferred from the former redevelopment agency and the low and moderate housing activities of the City. Low and 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 Protects 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 Funds are as follows: Private- purpose Trust Fund -- Accounts for the activity of the Successor Agency to the Community Development Commission of the City of Rosemead. 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. 10W CITY OF ROSEMEAD Notes to the Basic Financial Statements Fiscal Year Ended June 30, 2012 (1) Summary of Significant Accounting Policies, (continued) (d) Investments For financial reporting purposes, investments are adjusted to their fair value whenever the difference between fair value and the carrying amount is material. Changes in fair value that occur during a fiscal year are recognized as investment income reported for that fiscal year. Investment income includes interest earnings, changes in fair value, and any gains or losses realized upon the liquidation or sale of investments. The City pools cash and investments of all funds, except for assets held by fiscal agents. Each fund's share in this pool is displayed in the accompanying financial statements as cash and investments. Investment income earned by the pooled investments is allocated to the various funds based on each fund's average cash and investment balance. (e) Cash Equivalents For purposes of the statement of cash flows, cash equivalents are defined as short - term, highly liquid investments that are both readily convertible to known amounts of cash or so near their maturity that they present insignificant risk of changes in value because of changes in interest rates. Cash equivalents also represent the proprietary funds' share'in the cash and investment pool of the City of Rosemead. Cash equivalents have an original maturity date of three months or less from the date of purchase. For purposes of the statement of cash flows, the entire balance of cash and investments on the combined balance sheet for the internal service fund is considered` 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 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. 33 CITY OF ROSEMEAD Notes to the Basic Financial Statements Fiscal Year Ended June 30, 2012 (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 is 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. 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. Full -time employees can accumulate up to four weeks of accrued vacation per year depending on the length of employment. In addition, employees can accrue compensatory time. The City allows full -time employees who have earned vacation time an opportunity to have the City buy back up to 80 hours 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. 34 CITY OF ROSEMEAD Notes to the Basic Financial Statements Fiscal Year Ended June 30, 2012 (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 funds under the consumption nonspendable designation in fund balance to indicate for appropriation and are not expendable financial The City 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 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. 35 CITY OF ROSEMEAD Notes to the Basic Financial Statements Fiscal Year Ended June 30, 2012 (1) Summary of Significant Accounting Policies, (continued) () 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 as of June 30, 2012 are classified in the accompanying financial statements as follows: Statement of Net Assets: Cash and investments Statement of Fiduciary Net Assets: Cash and investments $ 21,921,833 12,596,960 Total cash and investments $ 34,518,793 Cash and investments as of June 30, 2012 consist of the following: Deposits with financial institutions Investments Total cash'and investments $ 13,917,263 20,601,530 $ 34,518,793 36 CITY OF ROSEMEAD Notes to the Basic Financial Statements Fiscal Year Ended June 30, 2012 (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 Banker's Acceptances Yes 180 days 40% 10% Commercial Paper Yes 270 days 25% 10% Negotiable Certificates of Deposit Yes 5 years 30% None Repurchase Agreements No NIA NIA NIA Reverse Repurchase Agreements No NIA NIA NIA Medium -Term Notes Yes 5 years 30% 10% Money Market Mutual Funds Yes NIA None None Local Agency Investment Funds (LAIF) Yes NIA None None Based on state law requirements or investment policy requirements, whichever is more restrictive. 37 CITY OF ROSEMEAD Notes to the Basic Financial Statements Fiscal Year Ended June 30, 2012 (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 trustees. The table also identifies certain provisions of these debt agreements that address interest rate risk, credit risk, and concentration of credit risk, Disclosures Relatinq 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: W-1 Maximum Maximum Maximum Percentage of Investment in Authorized Investment Type Maturity 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 Portfolios 1 year None None Investment Agreements None None None Disclosures Relatinq 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: W-1 CITY OF ROSEMEAD Notes to the Basic Financial Statements Fiscal Year Ended June 30, 2012 (2) Cash and Investments, (continued) Remaining Maturity 12 months 13 to 24 25 to 60 Investment Type Total or less months months State investment pool $ 12,267,696 $ 12,267,696 $ - $ - Certificates of deposits 3,877,120 146,687 905,000 2,825,433 US agency securities 2,160,630 - - 2,160,630 Field by bond trustee: Money market mutual funds 1,144,221 1,144,221 - - Certificates of deposit 1,151,863 - 568,626 583,237 Total $ 20,601,530 $ 13,558,604 $1,473,626 $5,569,300 Disclosures Relatina to Credit Risk Generally, credit risk is the risk that an issuer of an investment will not fulfill its obligation to the holder of the investment. This is measured by the assignment of a rating by a nationally recognized statistical rating organization. Presented below is the minimum rating required by (where applicable) the California Government Code, the City's investment policy, or debt agreements, and the actual rating as of year end for each investment type. Minimum Legal Rating as of Year End Investment Type Total Rating AA AA+ AAA Not Rated State investment pool $12,267,696 Certificates of deposits 3,877,120 US agency securities 2,160,630 Held bybond trustee: Money market mutual funds 1,144,221 Certificates of deposit 1,151,863 Total $2 0,601,530 NIA $ - $ - $ - $12,267,696 NIA - - - 3,877,120 NIA 1,152,480 1,008,150 - - NIA - - 1,144,221 - NIA - - - 1,151,863 $1,152480 $1,008, $1,144, $17,2 96,679 39 CITY OF ROSEMEAD Notes to the Basic Financial Statements Fiscal Year Ended June 30, 2012 (2) Cash and Investments, (continued) Concentration of Credit Risk The investment policy of the City contains certain limitations on the amount that can be invested in any one issuer. Investments in any one issuer (other than U.S. Treasury securities, mutual funds, and external investment pools) that represent 5% or more of total City investments are as follows: Investment Reported Issuer Type Amount Federal Home Loan Bank US Agency Securities $ 1,152,480 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, 2012 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. E P] CITY OF ROSEMEAD Notes to the Basic Financial Statements Fiscal Year Ended June 30, 2012 ( (4) Property Taxes Property tax revenue is recognized in accordance with GASB Codification Section P70; that is, in the fiscal year for which the taxes have been levied providing they become available. Available means due, or past due and receivable within the current period and collected within the current period or expected to be collected soon enough thereafter (not to exceed 60 days) to be used to pay liabilities in the current period. 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 Levy date Due dates Collection dates Interfund Receivables and Payables January 1 July 1 November 1 and February 1 December 10 and April 10 Current interfund receivables and payables balances at June 30, 2012 are as follows: Due from other funds Due to other funds Amount General Fund Low & Moderate Income Housing Asset Fund $ 850 Non -Major Governmental Funds 1,283,566 Total $ 1,284,416 The interfund amounts are for short-term loans to cover temporary cash deficits. 41 CITY OF ROSEMEAD Notes to the Basic Financial Statements Fiscal Year Ended June 30, 2012 ( Intergovernmental Receivables and Payables Current intergovernmental receivables and payables balances at June 30, 2012 are as follows: Due to City of Rosemead Successor Agency Due from Successor Agency Amount General Fund $ 13,796 City Capital Projects Fund 50,974 Non -Major Governmental Funds 2,028 Internal Service Fund 9,244 Total $ 76,042 Intergovernmental amounts between the Successor Agency and the City are for reimbursement of payroll expenses and short -term loans to cover operations. Noncurrent intergovernmental receivables and payables balances at June 30, 2012 are as follows: Advances from Advances to Amount Successor Agency Low & Moderate Income Housing Asset Fund $ 4,477,945 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, 2012, 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. On February 1, 2012, the outstanding balances of the receivable and payable, respectively, were transferred to the Successor Agency and the Low and Moderate Income Housing Asset fund. 42 CITY OF ROSEMEAD Notes to the Basic Financial Statements Fiscal Year Ended June 30, 2012 (6) Interfund Transfers Interfund transfers were as follows for the year ended June 30, 2012: Transfers In Transfers Out Amount City Capital Projects Fund General Fund Redevelopment Agency Capital Projects Fund Non -Major Governmental Funds Rosemead Housing Development Corporation Low & Moderate Income Housing Asset Fund Low & Moderate Income Housing Set -Aside Low & Moderate Income Housing Set -Aside Internal Service Fund Redevelopment Agency Debt Service Funds General Fund Total $ 451,396 124,521 5,315,705 5,891,622 (A) 191,175 208,853 400,028 (B) 139,724 123,000 $ 6,554,374 (A) To subsidize various programs and capital projects. (B) To subsidize the shortfall of rents for affordable housing units. 43 CITY OF ROSEMEAD Notes to the Basic Financial Statements Fiscal Year Ended June 30, 2012 (7) Capital Assets Capital asset activity was as follows for the year ended June 30, 2012: Beginning, Ending Governmental activities: balance Additions Deletions balance Capital assets, not being depreciated: Land Construction in progress $ 2,968,824 $ - $ (56,540) $ 2,912,284 7,431,882 3,461,688 (10,882,055) 1 1,515 Total capital assets, not being depreciated 10,400,706 3,461,688 (10,938,595) 2,923,799 Capital assets, being depreciated: Buildings 23,994,956 556,640 (3,050,998) 21,500,598 Improvements other than buildings 1,639,703 86,025 (460,028) 1,265,700 Machinery and equipment 1,013,935 16,164 - (555,343) 474,756 Autos and trucks 927,426 110,824 (140,818) 897,432 Furniture and office equipment 2,501,386 11,620 (1,394,918) 1,118,088 Infrastructure 49,056,492 11,549,517 - 60,606,009 Total capital assets, being depreciated 79,133,898 12,330,790 (5,602,105) 85,862,583 Less accumulated depreciation for: Buildings Improvements other than buildings Machinery and equipment Autos and trucks Fumiture and office equipment Infrastructure (7,940,577) (496,015) (1,072,982) (126,880) (844,169) (36,233) (552,900) (118,371) (2,434,310) (23,671) (24, 553,022) (1,753,728) 1,968,224 (6,468,368) 460,028 (739,834) 520,897 (359, 505) 155,184 (516, 087) 1,374,138 (1,083, 843) - (26,306,750) Total accumulated depreciation (37,397,960) (2,554,898) 4,478,471 (35,474,387) Total capital assets, being depreciated, net 41,735,938 9,775,892 (1,1 23,634) 50,3 Governmental activities capital assets, net of accumulated depreciation $52,136,644 $13,237,580 $(12,062,229) $53,311,995 44 CITY OF ROSEMEAD Notes to the Basic Financial Statements Fiscal Year Ended June 30, 2012 (7) Capital Assets, (continued) Depreciation expense was charged to functions /programs of the primary government as follows: Governmental activities: Public works $ 2,156,507 Community development 398,391 Total depreciation expense $ 2,554,898 (8) Changes in Long -Term Liabilities Long -term debt consists of the following at June 30, 2012: The City records expenditures related to compensated absences through the City's General Fund. 45 Balance transferred to Beginning Successor Ending Due in Governmental activities: Balance Additions Deletions Agency Balance One Year Bonds: Tax Allocation Bonds, Series 2006A $ 9,800,000 $ - $ 930,000 $ 8,870,000 $ - $ - TaxAllocation Bonds, Series 2006E 23,715,000 _ 80,000 23,635,000 - - TaxAllocation Bonds, Series 2010A 11,230,000 - 200,000 11,030,000 - Subtotal bonds 44,745,000 - 1,210,000 43,535,000 - - Deferred amounts: Unamortized bond premiums 217,820 - - 217,820 - - Discounton issuance (181,054) - - (181,054) - - Total bonds 44,781,766 - 1,210,000 43,571,766 - - Capital lease 36,007 - 36,007 - - Computer lease 261,659 - 50,848 - 210,811 53,022 Retrospective deposit 623,456 217,758 - - 841,214 84,130 Compensated absences 505,394 292,974 234,594 - 563,774 242,423 Total long-term debt $46,208,282 $510,732 $1,531,449 $43,571,766 $ 1,615,799 $379,575 The City records expenditures related to compensated absences through the City's General Fund. 45 CITY OF ROSEMEAD Notes to the Basic Financial Statements Fiscal Year Ended June 30, 2012 (8) Changes in Long -Term Liabilities, (continued) Capital-Lease 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, 2012 was $210,811. 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 2013 2014 2015 2016 Subtotal Less amount representing interest Present value of future lease payments $ 60,849 60,849 60,849 45,637 228,184 (17,373) $ 210,811 Accumulated depreciation on assets purchased through lease agreements are as follows: Activities Assets: - Improvements other than buildings $ 270,125 Less: accumulated depreciation (77,178) Total $ 192,947 Ere CITY OF ROSEMEAD Notes to the Basic Financial Statements Fiscal Year Ended June 30, 2012 (9) Post Employment Benefit Plan Plan Description: The City administers a single - employer defined benefit plan which provides medical benefits to eligible retirees and their spouses in accordance with various labor agreements. 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. 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. Membership of the plan consisted of the following at January 1, 2011, the date of the latest actuarial valuation: Retirees and beneficiaries receiving benefits 63 Active plan members 17 Total Funding Policy. The contribution requirements of plan members and the City are established and may be amended by City Council. On May 26, 2009, the City Council passed a resolution to participate in the PARS Public Agencies Post - Retirement Health Care Plan Trust, an irrevocable trust established to fund post - employment benefits for its employees. The purpose of the trust is to accumulate, hold, and distribute medical benefit plan assets for the exclusive benefit of retirees and beneficiaries within the IRS Code Section 115 and in conformance with the accounting standard. The trust is administered by Public Agency Retirement Services (PARS). PARS issues a separate Comprehensive Annual Financial Report. Copies of the PARS annual financial report may be obtained from PARS, 4350 Von Karman Avenue, Suite 100, Newport Beach, CA 92660. 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 2011 -12, the City contributed $809,509 to the plan. 47 CITY OF ROSEMEAD Notes to the Basic Financial Statements Fiscal Year Ended June 30, 2012 (g) Post Employment Benefit Plan, (continued) 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 $ 309,960 Interest on net OPEB obligation (51,668) Adjustment to annual required contribution 65,186 Annual OPEB cost (expense) 323,478 Contributions made (809,509) Increase in net OPEB obligation (486,031) Net OPEB obligation - beginning of year (861,137) Net OPEB obligation - end of year $ (1,347,168) 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 2012 and the two preceding years were as follows: i; Percentage Net of Annual OPEB Fiscal Annual OPEB OPEB Cost Obligation Year Cost Contributed (Asset) 6/30/2010 $ 284,778 268% $ (324,838) 6/30/2011 $ 270,403 298% $ (861,137) 6/3012012 $ 323,478 250% $ (1,347,168) i; CITY OF ROSEMEAD Notes to the Basic Financial Statements Fiscal Year Ended June 30, 2012 (9) Post Employment Benefit Plan, (continued) Annual OPEB Cost and Net OPEB Obligation: 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 ARC for the plan for the current fiscal year ended June 30, 2012, was determined as part of the January 1, 2011 actuarial valuation. The actuarial cost method used for determining the benefit obligations is the Entry Age Actuarial Cost Method. The actuarial assumptions included a 6.0% 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 7.6% initially, reduced decrements of 0.4 % -0.5% per year to an ultimate rate of 5% after the tenth year. The UAAL is being amortized on a level dollar approach over 30 years on a closed basis. It is assumed the City's payroll will increase 3.25% per year. (10) 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. 49 CITY OF ROSEMEAD Notes to the Basic Financial Statements Fiscal Year Ended June 30, 2012 (10) Risk Management, (continued) Each member government pays a primary deposit to cover estimated losses for a fiscal year (claims year). After the close of a fiscal year, outstanding claims are valued. A retrospective deposit computation is then made .for each open claims year. Claims are pooled separately between police and non - police. Costs are allocated to members by the following methods within each of the four layers of coverage: (1) the first $30,000 of each occurrence is charged directly to the member's primary deposit; (2) costs from $30,000 to $750,000 and the loss development reserves associated with losses up to $750,000 are pooled based on the member's share of losses under $30,000; (3) losses from $750,000 to $2,000,000 and the associated loss development reserves are pooled 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. Costs are allocated to members by the following methods within each of the four layers of coverage: (1) the first $50,000 of each loss is charged directly to the member's primary deposit; (2) losses from $50,000 to $100,000 and the loss development reserve associated with losses up to $100,000 are pooled based on the member's share of losses under $50,000; (3) losses from $100,000 to $2,000,000 and the loss development reserves associated with those losses are pooled based on payroll; (4) losses from $2,000,000 up to statutory limits are paid under an excess insurance policy. Protection is provided per statutory liability under California Workers' Compensation law. AN CITY OF ROSEMEAD Notes to the Basic Financial Statements Fiscal Year Ended June 30, 2012 (10) Risk Management, (continued) 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 the 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, 2011 through July 1, 2014. 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, 2012 the City had retrospective deposits payable to the Authority in the amount of $841,214. 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. (11) Retirement Plan Defined Benefit Pension Plan Plan Description. 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. Benefit provisions and all other requirements are established by state statue and City ordinance. For employees hired prior to July 1, 2010, the 2.7% at 55 retirement plan (First -Tier Plan) is applicable. For employees hired after July 1, 2010, the 2% at 55 (Second -Tier Plan) retirement plan is applicable. 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. 51 CITY OF ROSEMEAD Notes to the Basic Financial Statements Fiscal Year Ended June 30, 2012 (11) Retirement Plan, (continued) Funding Policy: Miscellaneous First -Tier and Second -Tier participants are required to contribute 8% and 7 %, respectively, of their annual covered payroll. The City is required to contribute at an actuarially determined rate. The First -Tier and Second -Tier employer contribution rates for the year ended June 30, 2012 were 24.712% and 10.059 %, respectively, 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, 2010, 2011, and 2012 were $1,361,873, $1,191,665, and $1,299,866, respectively, and were equal to the required contributions for each year. Supplemental Defined Benefit Pension Plan Plan Description: 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 11), a single - employer defined benefit pension plan administered by Phase 11 Systems. The plan II provides a supplemental retirement benefit of 11% 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 CaIPERS benefits. PARS issues a publicly available financial report that includes financial statements and required supplementary information for the plan II. That report may be obtained by writing to PARS, 3961 MacArthur Boulevard, Suite 200, Newport Beach, California, 92660. Funding Policy: An actuarial valuation of the City of Rosemead Supplemental Defined Benefit Pension Plan was performed as of July 1, 2010 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 2011 and 2012 was 14.63 %. Annual Pension Cost: For fiscal year ended June 30, 2012, the City's annual pension cost of $136,440 for PARS was equal to the City's required and actual contributions. Three -year trend information Annual Pension Cost (Employer Contribution) Fiscal Employer Percentage Net Pension Year Contribution Contributed Obligation 6/30/2010 $ 70,019 100% $ 6/30/2011 $ 69,010 100% $ 6/30/2012 $ 136,440 100% $ IVA CITY OF ROSEMEAD Notes to the Basic Financial Statements Fiscal Year Ended June 30, 2012 (11) Retirement Plan, (continued) The schedule of funding progress, presented as required supplementary information following the notes to the financial statements, 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. Actuarial Methods and Assumptions: 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 Citing Adjustment July 1, 2010 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 11 years remaining at July 1, 2011. Payments are assumed to be made throughout the year. 53 CITY OF ROSEMEAD Notes to the Basic Financial Statements Fiscal Year Ended June 30, 2012 (12) 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. The City is a defendant in certain legal actions arising in the normal course of operatoins. In the opinion of management, any liability resulting from such actions will not have a material adverse effect on the City's financial position. (13) Fund Deficits The following funds had deficit balances as of June 30, 2012: Major Governmental Fund: Capital Project: City Capital Projects 62,318 Non -Major Funds: Special Revenue: CDBG Grant 400,847 HOME Program 477,162 Proposition C 279,985 Federal Highway Grant 72,093 The fund deficits noted above primarily relate to expenditures charged to projects during the fiscal year ended June 30, 2012, which were submitted for reimbursement. CITY OF ROSEMEAD Notes to the Basic Financial Statements Fiscal Year Ended June 30, 2012 (14) Expenditures in Excess of Appropriations Expenditures exceeded appropriations in the following funds: Fund General Successor Agency Low and Moderate Income Housing Proposition C State Gas Tax Street Lighting Narcotics Forfeiture & Seizure Measure R RedeVopment Agency Capital Projects Fund Budget Actual Variance $ 16, 767, 048 $ 17, 001, 740 $ (234, 692) - 109 (109) 788,601 854,034 (65,433) 893,400 907,794 (14,394) 710,201 749,441 (39,240) - 4,013 (4,013) 173,300 228,039 (54, 739) 1,330,600 3,346,490 (2,015,890) (15) Successor Agency Trust for Assets of the Former Redevelopment Agency On December 29, 2011, the California Supreme Court upheld Assembly Bill X1 26 (the Bill) that provides for the dissolution of all redevelopment agencies in the State of California. This action impacted the reporting entity of the City since the City had previously reported its redevelopment agency as a blended component unit on the City's financial statements. The Bill provides that upon dissolution of the redevelopment agency, either the city or another unit of local government will agree to serve as the "successor agency" to hold the assets of the dissolved redevelopment agency until they are distributed to other units of state and local government. On January 10, 2012, the City Council adopted resolution 2012 -08, electing to become the Successor Agency for the former redevelopment agency in accordance with the Bill. After enactment of the law, which occurred on June 28, 2011, redevelopment agencies in the State of California were prohibited from entering into new projects, obligations or commitments. Subject to the control of a newly established oversight board, remaining assets can only be used to pay enforceable obligations in existence at the date of dissolution, including the completion of any unfinished projects that were subject to legally enforceable contractual commitments. yd4i CITY OF ROSEMEAD Notes to the Basic Financial Statements Fiscal Year Ended June 30, 2012 (15) Successor Agency Trust for Assets of the Former Redevelopment Agency, (continued) In future fiscal years, successor agencies will only be allocated revenue in the amount that is necessary to pay the estimated annual payments on enforceable obligations of the former redevelopment agency until all enforceable'obligations of the prior redevelopment agency have been paid in full and all assets have been liquidated. The Bill 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 the Bill. Management believes, in consultation with legal counsel, that the obligations of the former redevelopment agency due to the City are valid enforceable obligations payable by the successor agency trust under the requirements of the Bill. The City's position on this issue is not a position of settled law and there is considerable legal uncertainty regarding this issue. It is reasonably possible that a legal determination may be made at a later date by an appropriate judicial authority that would resolve this issue unfavorably to the City. In accordance with the timeline set forth in the Bill (as modified by the California Supreme Court on December 29, 2011), all redevelopment agencies in the State of California were dissolved and ceased to operate as a legal entity as of February 1, 2012. Prior to that date, the final seven months of activity of the redevelopment agency continued to be reported in the governmental funds of the City. These funds included the Low and Moderate Income Housing Special Revenue Fund, the CDC Debt Service Fund, and the CDC Projects Capital Projects Fund. After the date of dissolution, the assets, liabilities, and activities of the dissolved redevelopment agency are reported in a private - purpose trust fund, a type of fiduciary fund, in the financial statements of the City. In accordance with the provisions of AB X1 26 (Bill) and the California Supreme Court's decision to uphold the Bill, the obligations of the former redevelopment agency became vested with the funds established for the successor agency upon the date of dissolution, February 1, 2012. Former tax increment revenues pledged to fund the debts of the former redevelopment agency will be distributed to the Successor Agency subject to the reapportionment of such revenues as provided by the Bill. CITY OF ROSEMEAD Notes to the Basic Financial Statements Fiscal Year Ended June 30, 2012 (15) Successor Agency Trust for Assets of the Former Redevelopment Agency, (continued) The debt of the Successor Agency as of June 30, 2012 is as follows: Deferred amounts: Balance transferred from Redevelopment Ending Due in Successor Agency: Agency Additions Deletions Balance One Year Bonds: (14,780) (166,274) (14,780) Tax Allocation Bonds, 43,571,766 - 5,022 43,566,744 Series 2006A $ 8,870,000 $ - $ - $ 8,870,000 $ 965,000 Tax Allocation Bonds, $ 1,800,022 Series 2006B 23,635,000 - - 23,635,000 80,000 Tax Allocation Bonds, Series 2010A 11, 030, 000 - - 11, 030, 000 750,000 Subtotal bonds 43,535,000 - - 43,535,000 1,795,000 Deferred amounts: Unamortized bond premiums 217,820 _ 19,802 198,018 19,802 Discount on issuance (181,054) (14,780) (166,274) (14,780) Total bonds 43,571,766 - 5,022 43,566,744 1,800,022 Total long -term debt $43,571,766 $ - $ 5,022 $43,566,744 $ 1,800,022 Future debt service requirements are as follows: Fiscal years ending June 30, Principal Interest 2013 2014 2015 2016 2017 2018 -2022 2023 -2027 2028 -2032 2033 -2034 $ 1,795,000 1,855,000 1,920,000 1,995,000 2,085,000 11, 845, 000 9,440, 000 8,595,000 4,005,000 $ 1,852,124 1,790,511 1,718,574 1,635,579 1,545,190 6,279,178 3,745,110 1,896,125 179,469 Totals $ 43, 535, 000 $ 20, 641, 860 57 CITY OF ROSEMEAD Notes to the Basic Financial Statements Fiscal Year Ended June 30, 2012 (15) Successor Agency Trust for the Assets of the Former Redevelopment Agency, (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 bands. The unamortized balance as of June 30, 2012 was $198,018. As of June 30, 2012 the outstanding balance was $8,870,000. Tax Allocation Bonds, Series 2006E 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, 2033. 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, 2012 the outstanding balance was $23,635,000. Tax Allocatidri 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, 2012, the balance held in the reserve account was $1,143,054. As of June 30, 2012 the outstanding balance was $11,030,000. 'W:3 Required Supplementary Information (This page intentionally left blank) CITY OF ROSEMEAD Note to the Required Supplementary Information Fiscal Year Ended June 30, 2012 (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 (i.e., 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. RI CITY OF ROSEMEAD General Fund Schedule of Revenue, Expenditures, and Changes in Fund Balances - Budget and Actual Fiscal Year Ended June 30, 2012 61 Variance Original Final Positive Budget Budget Actual (Negative) Revenues: Taxes $ 12,782,500 $ '12,782,500 $ 13,358,683 $ 576,183 Intergovernmental 260,400 260,400 187,349 (73,051) Licenses and permits 1,015,100 1,015,100 1,156,719 141,619 Charges for services 988,900 988,900 1,025,797 36,897 Fines, forfeitures and penalties 576,900 576,900 619,397 42,497 Investment income 200,300 200,300 79,669 (120,631) Other 471,900 471,900 650,622 178,722 Total revenues 16,296,000 16,296,000 17,078,236 782,236 Expenditures: Current: General government 2,952,300 3,596,848 3,799,041 (202,193) Public safety 7,006,100 7,006,100 7,071,438 (65,338) Public works 2,436,400 2,436,400 2,574,618 (138,218) Community development 930,000 930,000 1,094,885 (164,885) Park and recreation 2,797,700 2,797,700 2,455,457 342,243 Capital outlay - - 6,301 (6,301) Total expenditures 16,122,500 16,767,048 17,001,740 (234,692) Excess (deficiency) of revenues over(under)expenditures 173,500 (471,048) 76,496 547,544 Other financing sources (uses): Transfers out (891,000) (891,000) (574,396) 316,604 Total other financing sources (uses) (891,000) (891,000) (574,396) 316,604 Net change in fund balance (717,500) (1,362,048) (497,900) 864,148 Fund balance, beginning of year 15,319,072 15,319,072 15,319,072 - Fund balance, end of year $ 14,601,572 $ 13,957,024 $ 14,821,172 $ 864,148 61 CITY OF ROSEMEAD Rosemead Housing Development Corporation Schedule of Revenue, Expenditures, and Changes in Fund Balances - Budget and Actual Fiscal Year Ended June 30, 2012 62 Variance Original Final Positive Budget Budget Actual (Negative) Revenues: Investment income $ 412,200 $ 412,200 $ 412,471 $ 271 Other 4,600 4,600 6,234 1,634 Total revenues 416,800 416,800 418,705 1,905 Expenditures: Current: Community development 854,500 854,500 805,235 49,265 Total expenditures 854,500 854,500 805,235 49,265 Excess (deficiency) of revenues over (under) expenditures (437,700) (437,700) (386,530) 51,170 Other financing sources (uses): Transfers in - 451,500 400,028 (51,472) Total other financing sources (uses) - 451,500 400,028 (51,472) Net change in fund balance (437,700) 13,800 13,498 (302) Fund balance, beginning of year 45,573 45,573 45,573 - Fund balance, end of year $ 392,127 $ 59,373 $ 59,071 $ (302) 62 CITY OF ROSEMEAD Low and Moderate Income Housing Asset Schedule of Revenue, Expenditures, and Changes in Fund Balances - Budget and Actual Fiscal Year Ended June 30, 2012 Total revenues Expenditures: Current: Community development Total expenditures Excess (deficiency) of revenues over (under) expenditures Other financing sources (uses): Transfers out Total other financing sources (uses) Extraordinary item: Gain on dissolution of redevelopment agency Net change in fund balance Fund balance, beginning of year Fund balance, end of year Variance Original Final Positive Budget Budget Actual (Negative) 109 (109) - 109 (109) (109) (109) - (191,175) (191,175) - (191,175) (191,175) - - 6,584,162 6,584,162 - - 6,392,878 6,392,878 $ 6,392,878 $ 6,392,878 63 CITY OF ROSEMEAD Low and Moderate Income Housing Set -Aside Schedule of Revenue, Expenditures, and Changes in Fund Balances - Budget and Actual Fiscal Year Ended June 30, 2012 Extraordinary item: Loss on dissolution of redevelopment agency - - (6,584,162) (6,584,162) Net change in fund balance 389,400 219,400 (6,795,794) (7,015,194) Fund balance, beginning of year 6,795,794 6,795,794 6,795,794 - Fund balance, end of year $ 7,185,194 $ 7,015,194 $ - $ (7,015,194) 64 Variance Original Final Positive Budget Budget Actual (Negative) Revenues: Investment Income $ - $ - $ 2,550 $ 2,550 Other income - - 1,814 1,814 Total revenues - - 4,364 4,364 Expenditures: Current: Community development 264,100 264,100 146,867 117,233 Total expenditures 264,100 264,100 146,867 117,233 Excess (deficiency) of revenues over(under)expenditures (264,100) (264,100) (142,503) 121,597 Other financing sources (uses): Transfers in 903,500 935,000 139,724 (795,276) Transfers out (250,000) (451,500) (208,853) 242,647 Total other financing sources (uses) 653,500 483,500 (69,129) (552,629) Extraordinary item: Loss on dissolution of redevelopment agency - - (6,584,162) (6,584,162) Net change in fund balance 389,400 219,400 (6,795,794) (7,015,194) Fund balance, beginning of year 6,795,794 6,795,794 6,795,794 - Fund balance, end of year $ 7,185,194 $ 7,015,194 $ - $ (7,015,194) 64 CITY OF ROSEMEAD Required Supplementary Information Fiscal Year Ended .tune 30, 2012 (2) Public Agency Retirement Services (PARS) — Retirement Enhancement Plan Schedule of Funding Progress (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 1 a) (c) ((a -b)Ic) 1/1/2008 $ 3,548,605 $ - $3,548,605 0% $ 1,682,985 211% 7/1/2006 $ 2,973,299 $1,438,282 $ 1,536,017 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 65 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 1 a) (c) ((a -b)lc) 1/1/2008 $ 3,548,605 $ - $3,548,605 0% $ 1,682,985 211% 1/1/2011 $ 3,378,875 $ 615,576 $2,763,299 18% $ 3, 876, 698' 71% NIA NIA NIA NIA NIA NIA NIA 65 Other Supplementary Information M . ('his page intentionally left blank) 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. 67 CITY OF ROSEMEAD Non -Major Governmental Funds Combining Balance Sheet June 30, 2012 Special Revenue Funds Assets Cash and investments Receivables: Accounts Interest Notes Due from Successor Agency 147,699 93,532 - 71 - 1,931 $ 147,770 $ 93,532 $ 1,067,301 CDBG HOME Proposition Grant Program A $ - $ - $ 1,065,370 Liabilities and Fund Balances Liabilities: Accounts payable and accrued liabilities $ 48,941 $ 75,363 $ 25,532 Accrued salaries and benefits 18,629 1,201 8,157 Retentions payable - 7,534 - Due to other funds 481,047 486,596 - Deferred revenue - - - Total liabilities 548,617 570,694 33,689 Fund balances: Restricted for: Public safety - - - Public works - - 1,033,612 Unassigned (400,847) (477,162) - Total fund balances (deficit) 400,847 (477,162) 1,033,612 Total liabilities and fund balances $ 147,770 $ 93,532 $ 1,067301 Special Revenue Funds Federal Air Quality Proposition Highway State Gas Management Local Street C Grant Tax District Transportation Liahtina 536,381 $ 95,767 $ - $ 2,155,594 - - 8,000 16,900 47,932 61,501 - - - - - 2,732 _ - - 58,551 - - - - - 14 544,381 $ 112,667 $ 47,932 $ 2,278,392 $ 80,344 $ - $ 102,177 $ - $ - $ 89,752 3,743 - 6,188 - - 2,861 - - 7,115 - - - 195,898 72,093 - - 47,932 - - - - - - 61,283 279,985 72,093 115,480 - 47,932 153,896 428,901 112,667 - 2,124,496 (279,985 ) (72,093) - - - - (279,985) (72,093) 428,901 112,667 - 2,124,496 $ 544,381 $ 112,667 $ 47,932 $ 2,278,392 (continued) .• (This page intentionally left blank) CITY OF ROSEMEAD Non -Major Governmental Funds Combining Balance Sheet, Continued June 30, 2012 Special Revenue Funds Narcotics Measure Seizure R Totals Assets Cash and investments Receivables: Accounts Interest Notes Due from Successor Agency Liabilities and Fund Balances Liabilities: Accounts payable and accrued liabilities $ - Accrued salaries and benefits - Retentions payable - Due to other funds - Deferred revenue - $ 2,715 $ 690,924 $ 4,546,751 51,217 426,781 - - 2,732 - - 58,551 - 12 2,028 $ 2,715 $ 742,153 $ 5,036,843 Total liabilities Fund balances: Restricted for: Public safety Public works Unassigned Total fund balances (deficit) Total liabilities and fund balances $ 23,742 $ 445,851 2,004 42,783 - 14,649 1,283,566 - 61,283 25,746 1,848,132 2,715 - 2,715 - 716,407 4,416,083 - - (1,230,087) 2,715 716,407 3,188,711 $ 21715 $ 742,153 $ 5,036,843 70 CITY OF ROSEMEAD Non -Major Governmental Funds Combining Statement of Revenues, Expenditures, and Changes in Fund Balances Fiscal Year Ended June 30, 2012 Revenues: Intergovernmental Charges for services Special assessments Investment income Total revenues Expenditures: Current: General government Public safety Public works Community development Parks and recreation Capital outlay Total expenditures Excess (deficiency) of revenues over (under) expenditures ti Other financing sources (uses): 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 CDBG HOME Proposition Grant Program A $ 1,125,418 $ 450,347 $ 843,986 14,425 - 14,432 - - 7,024 1,139,843 450,347 865,442 31,192 - 229,373 418,885 - - - - 904,323 635,914 464,763 - 77,208 - - 1,163,199 464,763 1,133,696 (23,356) (14,416) (268,254) (471, 907) - 471,907 - - (495,263) (14,416) (268,254) 94,416 (462,746) 1,301,866 $ (400,847) $ (477,162) $ 1,033,612 71 Special Revenue Funds continue 72 Federal Air Quality Proposition Highway State Gas Management Local Street C Grant Tax District Transportation Lighting $ 758,408 $ - $ 1,617,102 $ 65,078 $ $ - - - - - - 768,997 7,775 - 11,792 645 - 15,392 766,183 - 1,628,894 65,723 - 784,389 37,013 - 17,540 - - 26,817 22,765 - - - - - 794,256 - 872,246 - - 704,616 - - 18,008 24,171 - 18,007 854,034 - 907,794 24,171 - 749,440 (87,851) - 721,100 41,552 - 34,949 (1,838,707) - (2,039,968) (64,259) - 559,442 (1,838,707) - (2,039,968) (64,259) - (559,442) (1,926,558) - (1,318,868) (22,707) - (524,493) 1,646,573 (72,093) 1,747,769 135,374 - 2,648,989 $ (279,985) $ (72,093) $ 428,901 $ 112,667 $ - _$ 2,124,496 continue 72 CITY OF ROSEMEAD Non -Major Governmental Funds Combining Statement of Revenues, Expenditures, and Changes in Fund Balances, Continued Fiscal Year Ended June 30, 2012 Special Revenue Funds Narcotics Measure Seizure R Totals Revenues: Intergovernmental Charges for services Special assessments Investment income Total revenues Expenditures: Current: General government Public safety Public works Community development Parks and recreation Capital outlay Total expenditures Excess (deficiency) of revenues over (under) expenditures i Other financing sources (uses): Transfers out Total other financing sources (uses) Net change in fund balances Fund balances (deficit), beginning of year Fund balances (deficit), end of year - $ 521,652 $ 5,381,991 - 28,857 - 768,997 25 4,826 47,479 25 526,478 6,227,324 - 55,559 397,494 4,013 - 445,663 - 172,480 3,447,921 - 1,100,677 77,208 60,186 4,013 228,039 5,529,149 (3,988) 298,439 698,175 - (341,422) (5,315,705) (341,422) (5,315,705) (3,988) (42,983) (4,617,530) 6,703 759,390 7,806,241 _$___-2,715 $ 716.407 $ 3,188,711 73 CITY OF ROSEMEAD Community Development Block Grant Non -Major Special Revenue Fund Schedule of Revenues, Expenditures, and Changes in Fund Balances - Budget and Actual Fiscal Year Ended June 30, 2012 Revenues: Intergovernmental Charges for services Total revenues Expenditures: Current: General government Public safety Community development Parks and recreation 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 $ (469,284) $ (400,847) $ 58,437 74 Variance Final Positive Budget. Actual (Negative) $ 779,100 $ 1,125,418 $ 346,318 - 14,425 14,425 779,100 1,139,843 360,743 29,400 31,192 (1,792) 448,100 418,885 29,215 771,700 635,914 135,786 93,600 77,208 16,392 1,342,800 1,163,199 179,601 (563,700) (23,356) 540,344 - (471,907) (471,90 - (471,907) (471,907) (563,700) (495,263) 68,437 94,416 94,416 - Fund balance, end of year $ (469,284) $ (400,847) $ 58,437 74 CITY OF ROSEMEAD HOME Program Non -Major Special Revenue Fund Schedule of Revenues, Expenditures, and Changes in Fund Balances - Budget and Actual Fiscal Year Ended June 30, 2012 Revenues: Intergovernmental Total revenues Expenditures: Current: Community development Total expenditures Net change in fund balance Fund balance, beginning of year Fund balance, end of year ti Final Budget, $ 1,013,500 $ 1,013,500 Variance Positive Actual (Negative) 450,347 $ (563,153) 450,347 (563,153) 1,013,500 464,763 548,737 1,013,500 464,763 548,7 (462,746) (14,416) (14,416) (462, 746) - $ (462,746) $ (477,162) $ (14,416) 75 CITY OF ROSEMEAD Proposition A Non -Major Special Revenue Fund Schedule of Revenues, Expenditures, and Changes in Fund Balances - Budget and Actual Fiscal Year Ended June 30, 2012 Revenues: Intergovernmental Charges for services Investment Income Total revenues Expenditures: Current: General government Public works Total expenditures Net change in fund balance Fund balance, beginning of year 248,800 229,373 Variance Final 904,323 Positive Budget, Actual (Negative) $ 783,000 $ 843,986 $ 60,986 - 14,432 14,432 6,200 7,024 824 789,200 865,442 76,242 248,800 229,373 19,427 1,105,330 904,323 201,007 1,354, 1,133,696 220,4 (564,930) (268,254) 296,676 1,301,866 1,301,866 - Fund balance, end of year $ 736,936 $ 1,033,612 $ 296,676 t[• CITY OF ROSEMEAD Proposition C Non -Major Special Revenue Fund Schedule of Revenues, Expenditures, and Changes in Fund Balances - Budget and Actual Fiscal Year Ended June 30, 2012 Revenues: Intergovernmental Investment income Total revenues Expenditures: Current: General government Public safety Public works Capital outlay 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 (1,535,401) (1,926,558) (391,157) 1,646, 573 1,646,573 - $ 111,172 $ (279,9851 $ (391,157) 77 Variance Final Positive Budget Actual (Negative) $ 703,200 $ 758,408 $ 55,208 - 7,775 7,775 703,200 766,183 62,983 36,600 37,013 (413) 23,600 22,765 835 680,901 794,256 (113,355) 47,500 - 47,500 788 , 6 01 854,034 (65,433) (85,401) (87,851) (2,450) (1,450,000) (1,838,707) (3 88,707) (1,450,000) (1,838,707) (388,707) (1,535,401) (1,926,558) (391,157) 1,646, 573 1,646,573 - $ 111,172 $ (279,9851 $ (391,157) 77 CITY OF ROSEMEAD Federal Highway Grant Non -Major Special Revenue Fund Schedule of Revenues, Expenditures, and Changes in Fund Balances - Budget and Actual Fiscal Year Ended June 30, 2012 Total revenues Total expenditures 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) $ - 78 CITY OF ROSEMEAD State Gas Tax Non -Major Special Revenue Fund Schedule of Revenues, Expenditures, and Changes in Fund Balances - Budget and Actual Fiscal Year Ended June 30, 2012 Revenues: Intergovernmental Investment income Charges for services Total revenues Expenditures: Current: General government Public works Capital outlay 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 $ 1,083,569 $ 428,901 $ __(q54,668) 79 Variance Final Positive Budget Actual (Negative) $ 1,540,900 $ 1,617,102 $ 76,202 10,300 11,792 1,492 8,000 - (8,000) 1,559,200 1,628,894 69,694 15,500 17,540 (2,040) 862,800 872,246 (9,446) 15,100 18,008 (2,908) 893,400 907,794 (14,394) 665,800 721,100 55,300 (1,330,000) (2,039,968) (709,968) (1,330,000) (2,039,968) (70 9,968) (664,200) (1,318,868) (654,668) 1,747,769 1,747,769 - Fund balance, end of year $ 1,083,569 $ 428,901 $ __(q54,668) 79 CITY OF ROSEMEAD Air Quality Management District Non -Major Special Revenue Fund Schedule of Revenues, Expenditures, and Changes in Fund Balances - Budget and Actual Fiscal Year Ended June 30, 2012 Revenues: Intergovernmental Investment income Total revenues Expenditures: Current: Capital outlay 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 Final Budget, $ 65,000 $ 300 65,300 25,000 25,000 40,300 (100,000) (100, 000) (59,700) 135,374 (22,707) 135,374 829 829 1,252 35,741 35,741 36,993 $ 75,674 $ 112,667 $ 36,993 IN Variance Positive Actual (Negative) 65,078 $ 78 645 345 65,723 423 24,171 24,171 41,552 (64, 259) (64,259) CITY OF ROSEMEA© Local Transportation Non -Major Special Revenue Fund Schedule of Revenues, Expenditures, and Changes in Fund Balances - Budget and Actual Fiscal Year Ended June 30, 2012 Revenues: Investment Income Total revenues Final Budget, $ 9,200 $ 9,200 Variance Positive (Negative) $ (9,200) (9,200) Total expenditures - - - Net change in fund balance 9,200 - (9,200) Fund balance, beginning of year - - - Fund balance, end of year $ 9,200 $ - $ (9,200) F-1 1 Actual CITY OF ROSEMEAD Street Lighting Non -Major Special Revenue Fund Schedule of Revenues, Expenditures, and Changes in Fund Balances - Budget and Actual Fiscal Year Ended June 30, 2012 Revenues: Special Assessments Investment income Total revenues Expenditures: Current: General government Public works Parks and recreation 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 $ 2,443,788 $ 2,124,496 $ (319,292) Variance Final Positive Budget Actual (Negative) $ 742,000 $ 768,997 $ 26,997 13,000 15,392 2,392 755,000 784,389 29,389 26,000 26,817 (817) 612,401 704,616 (92,215) 71,800 - 71,800 - 18,007 (18,007) 710,201 749,440 (39,239) 44,799 34,949 (9,850) (250,000) (559,442) (309,442) (250,000) (559,442) (309,442) (205,201) (524,493) (319,292) 2,648,989 2,648,989 - $ 2,443,788 $ 2,124,496 $ (319,292) CITY OF ROSEMEAD Narcotics Seizure Non -Major Special Revenue Fund Schedule of Revenues, Expenditures, and Changes in Fund Balances - Budget and Actual Fiscal Year Ended June 30, 2012 Revenues: Investment income Total revenues Expenditures: Current: Public safety Total expenditures Net change in fund balance Fund balance, beginning of year Fund balance, end of year Final Budget, 25 25 - 4,013 (4,013) - 4,013 (4,013) - (3,988) (3,988) 6,703 6 - $ 6,703 $ 2,715$ (3,988) 83 Variance Positive Actual (Negative) $ 25 $ 25 CITY OF ROSEMEAD Measure R Non -Major Special Revenue Fund Schedule of Revenues, Expenditures, and Changes in Fund Balances - Budget and Actual Fiscal Year Ended June 30, 2012 Revenues: Intergovernmental Investment income Total revenues Expenditures: Current: General government 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 $ 14,090 $ 716,407 $ 702,317 84 Variance Final Positive Budget, Actual (Negative) $ 478,000 $ 521,652 $ 43,652 - 4,826 4,826 478,000 526,478 48,478 62,500 55,559 6,941 110,800 172,480 (61,680) 173,300 228,039 (54,739) 304,700 298,439 (6,261) (1,050,000) (341,422) 708,5 (1,050,000) (341,422) 708,578 (745,300) (42,983) 702,317 759,390 759,390 - Fund balance, end of year $ 14,090 $ 716,407 $ 702,317 84 CITY OF ROSEMEAD Redevelopment Agency Debt Service Fund Major Debt Service Fund Schedule of Revenues, Expenditures, and Changes in Fund Balances - Budget and Actual Fiscal Year Ended June 30, 2012 Revenues: Taxes Investment income Total revenues Expenditures: Current: Community development Debt Service: Principal Interest Total expenditures Excess (deficiency) of revenues over (under) expenditures Other financing sources (uses): Transfers out Total other financing sources (uses) Extraordinary item: Loss on dissolution of redevelopment agency Net change in fund balance Fund balance, beginning of year Fund balance, end of year $ 7,914,477 $ - $ (7,914,477) 85 Variance Final Positive Budget Actual (Negative) $ 7,021,000 $ 2,601,979 $ (4,419,021) 10,000 22,362 12,362 7,031,000 2,624,341 (4,406,659) 1,014,000 534,130 479,870 1,210,000 1,210,000 - 1,902,400 961,506 940,894 4,126,400 2,705,636 1,420,764 2,904,600 (81,295) (2,985,895) (935,000) (139,724) 795,276 (935,000) (139,724) 795,276 - (5,723,858) (5,723,858) 1,969,600 (5,944,877) (7,914,477) 5,944,877 5,944,877 - $ 7,914,477 $ - $ (7,914,477) 85 CITY OF ROSEMEAD Redevelopment Agency Capita[ Projects Fund Major Capital Projects Fund Schedule of Revenues, Expenditures, and Changes in Fund Balances - Budget and Actual Fiscal Year Ended June 30, 2012 Revenues: Investment income Total revenues Expenditures: Current: General government Capital outlay Total expenditures Excess (deficiency) of revenues over (under) expenditures Other financing sources (uses): Transfers in Transfers out Total other financing sources (uses) Extraordinary item: Loss on dissolution of redevelopment agency Net change in fund balance Fund balance, beginning of year (1,325,600) (3,328,845) (2,003,245) 423,600 - (423,600) (2,310,DDa} (124,521) 2,185,479 (1,886,400) (124,521) 1,761,879 - (2,895,391) (2,895,3 (3,212,000) (6,348,757) (3,136,757) 6,348,757 6,348,757 - Fund balance, end of year $ 3,136,757 $ - $ (3,136,757) :. Variance Final Positive Budget Actual (Negative) $ 5,000 $ 17,645 $ 12,645 5,000 17,645 12,645 11,600 6,767 4,833 1,319,000 3,339,723 (2,020,723) 1,330,600 3,346,490 (2,015,890) (1,325,600) (3,328,845) (2,003,245) 423,600 - (423,600) (2,310,DDa} (124,521) 2,185,479 (1,886,400) (124,521) 1,761,879 - (2,895,391) (2,895,3 (3,212,000) (6,348,757) (3,136,757) 6,348,757 6,348,757 - Fund balance, end of year $ 3,136,757 $ - $ (3,136,757) :. CITY OF ROSEMEAD City Capital Projects Major Capital Projects Fund Schedule of Revenues, Expenditures, and Changes in Fund Balances - Budget and Actual Fiscal Year Ended June 30, 2012 Revenues: Intergovernmental Charges for services Total revenues Expenditures: Current: Public works Capital outlay 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 $ (5,115,324) $ (62,318) $ 7,719,762 M. Variance Final Positive Budget, Actual (Negative) $ 1,600,000 $ 3,992,578 $ 2,392,578 - 737 737 1,600,000 3,993,315 2,393,315 433,199 395,264 37,935 9,639,000 5,683,866 3,955,134 10,072,199 6,079,130 3,993,069 (8,472,199) (2,085,815) 6,386,384 7,225,000 5,891,622 1,333,378 7,225,000 5,891,622 1,333,378 (1,247,199) 3,805,807 7,719,762 (3,868,125) (3,868,125) - Fund balance, end of year $ (5,115,324) $ (62,318) $ 7,719,762 M. 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. 0 (This page intentionally left blank) CITY OF ROSEMEAD Combining Statement of Net Assets Internal Service Funds June 30, 2012 Equipment Technology Assets Replacement Replacement Total Current assets: Cash and investments $ 144,326 $ 13,634 $ 157,960 Due from Successor Agency - 9,244 9,244 Total current assets 144,326 22,878 167,204 Non - current assets: Capital assets: Other capital assets, net 69,043 192,947 261,990 Total non - current assets 69,043 192,947 261,990 Total assets 213.369 215,825 429.194 Liabilities Current liabilities: Accounts payable - 1,253 1,253 Lease payable - current - 53,022 53,022 Total current liabilities - 54,275 54,275 Non - current liabilities: Lease payable - 157,789 157,789 Total non- current liabilities - 157,789 157,789 Total liabilities - 212,064 212,064 Net assets Invested in capital assets, net of related debt 69,043 (17,864) 51,179 Unrestricted 144,326 21,625 165,951 Total net assets $ 213,369 $ 3,761 $ 217,130 CITY OF ROSEMEAD Combining Statement of Revenues, Expenses, and Changes in Fund Net Assets Internal Service Funds Fiscal Year Ended June 30, 2012 Operating revenues: Charges for services Total operating revenues Operating expenses: Contractual services Depreciation Equipment Technology Replacement Replacement Total $ - $ 95,500 $ 95,500 95,500 95,500 - 35,385 35,385 17,260 38,589 55,849 Total operating expenses 17,260 73,974 91,234 Operating income (17,260) 21,526 4,266 Non - operating revenues (expenses): Investment income - 3 3 Interest expense - (9,993) (9,993) Total non - operating revenues (expenses) - (9,990) (9,990) Income (loss) before transfers 1 (17,260) 11,536 (5,724) Transfers in Changes in net assets Net assets, beginning of year Net assets, end of year 123,000 105,740 - 123,000 11,536 117,276 107,629 (7,775) 99,854 $ 213,369 $ 3,761 $ 217,130 00 CITY OF ROSEMEAD Combining Statement of Cash Flows Internal Service Funds Fiscal Year Ended June 30, 2012 Cash flows from operating activities: Cash received from users departments Cash payments to suppliers for goods and services Net cash (used for) operating activities Cash flows from noncapital financing activities: Cash received from other funds Net cash provided by noncapital financing activities Cash flows from capital and related financing activities: Principal paid on capital lease Interest paid on capital lease Cash paid to purchase capital asset Equipment Technology Replacement Replacement Total $ - $ 101,468 $ 101,468 (189,301) (189,301) (87,833) 87,833) 123,000 - 123,000 123,000 - 123,000 - (50,848) (50,848) - (9,993) (9,993) (86,303) - (86,303) Net cash (used for) capital and related financing activities (86,303) (60,841) (147,144) Cash flows from investing activities: Interest on investment 3 3 Net cash provided by investing activities Net increase (decrease) in cash and investments Cash and investments, beginning of year Cash and investments, end of year Reconciliation of operating income (loss) to net cash (used for) operating activities: Operating income (loss) Adjustments to reconcile operating income (loss) to net cash (used for) operating activities: Depreciation (Increase) decrease in due from other funds Increase (decrease) in accounts payable Total adjustments Net cash (used for) operating activities 36,697 (148,671) 3 (111,974) 107,629 162,305 269,934 $ 144,326 $ 13,634 $ 157,960 $ (17,260) $ 21,526 $ 4,266 17,260 38,589 55,849 - 5,968 5,968 (153,916) ---- (153,916) 17,260 (109,359) (92,099) $ - $ (87,833) $ (87,833) 91 CITY OF ROSEMEAD Statement of Changes in Fiduciary Assets and Liabilities Agency Fund Year ended June 30, 2012 Balance Balance July 1, 2011 Additions Deductions June 30, 2012 Assets Cash and investments $ 591,716 $ 258,101 $ (339,102) $ 510,715 Accounts receivable 5,758 - (5,758) - Total assets $ 597,474 $ 258,101 $ (344,860) $ 510,715 Liabilities Deposits payable $ 597,474 $ 456,955 $ (543,714) $ 510,715 Total liabilities $ 597,474 $ 456,955 $ (543,714) $ 510,715 92 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 Page Financial Trends 94 These schedules contain trend information to help the reader understand how the government's financial performance and well- being have changed overtime, Revenue Capacity 1 These schedules contain trend information to help the reader assess the government's most significant revenue source, property tax. Debt Capacity 106 These schedules present infonnation 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 112 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 114 These schedules contain service and infrastructure data to help the reader understand how the information in the government's financial report relateq to the services the government provides and the activities it performs. Sources: Unless otherwise noted, the information in these schedules is derived from the Comprehensive Annual Financial Reports for the relevant year. 93 CITY OF ROSEMEAD Net Assets by Component Last Nine 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 $ 12,1130,249 $ 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 of Rosemead implemented GASB 34 for the fiscal year ended June 30, 2004. Information prior to the implementation of GASB 34 is not available. 94 Fiscal Year 2008 2009 2010 2011 2012 $ 12,981,537 $ 11,828,993 $ 12,712,242 $ 1.4,760,940 $ 54,010,031 11,443,583 13,361,249 13,199,438 24,806,402 10,870,747 27,705,715 24,882,730 20,489,721 10,748,249 13,688,078 $ 52,130,835 $ 50,072,972 $ 46,401,401 $ 50,315,591 $ 78,568,856 M CITY OF ROSEMEAD Changes in Net Assets Last Nine 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 27,666,189 7,026,282 6,299,415 3,288,225 316,849 726,345 984,965 900,359 9,598,159 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 - 92,822,496. 12,522,888 9,485,886 14,125,148 Net revenues (expenses): Governmental activities Total net revenues (expenses) (8,079,312) 9,798,656 14,679,133 {13,541,D41) General revenues and other changes in net assets: Governmentai 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 Loss on sale of capital assets Extraordinary item: Gain on dissolution of redevelopment agency Total governmental activities Changes in net assets Governmental activities Total primary government 3,941,383 4,077,332 3,915,980 9,121,682 2,865,887 3,518,657 3,525557 2,501,106 1,081,174 1,102,756 1,207,298 1,311,697 149,737 765,215 1,076,806 713, 821 - 3,165,148 2,966,002 - 187,278 1,260,095 1,930,059 2,028,128 - 1,716,656 1,290,667 856,701 - 7,857 32,853 478,473 8225,459 15,945,222 15,613,716 17,011,608 $ 146,147 $ 5,815,060 $ 1,266,089 $ 3,470,567 The City of Rosemead implemented GASB 34 for the fiscal year ended June 30, 2004. Information prior to the implementation of GASB 34 is not available. .I Fiscal Year 2008 2009 2010 2011 2012 $ 7,259,587 $ 12,176,877 $ 5,991,796 $ 3,160,306 $ 3,989,359 8,043,771 9,081,719 8,879,854 8,881,926 7,517,101 13,550,042 6,465,355 11,469,614 11,907,245 11,588,278 669,827 773,374 589,650 595,904 - 3,645,207 1,290,108 2,141,218 3,969,502 4,080,294 4,078,631 2,030,698 2,733,885 2,362,860 2,532,665 1,790,348 1,523,391 1,491,717 1,681,875 569,045 39,037,413 33,341,522 33,297,734 32,559,618 30,276,742 642,716 547,577 1,573,695 1,048,727 130,450 1,547,182 1,512,475 1,293,677 1,293,524 1,454,759 11,729,725 7,581,801 8,052,011 9,143,311 4,033,874 166,118 858,809 186,283 450,004 - 1,484,065 621,375 597,402 3,753,612 3,501,082 36,800 36,000 20,800 654,437 704,029 143,748 133,825 15,606,606 11,158,037 11,723,868 16,343,615 9,824,194 (23,430,807) (22,183,485) (21,573,866) (16,216,003) (20,452,548) 13,181, 837 12,288,177 12, 328, 634 13,656, 347 10, 567, 509 3,747,416 4,589,998 4,408,367 3,737,363 3,200,911 1,411,421 1,272,092 1,129,146 1,219,977 1,323,886 949,007 761,410 562,317 576,904 633,393 1,678,791 884,847 389,310 367,961 195,165 254,527 195,273 169,042 263,983 - 143,748 133,825 336,668 307,658 853,956 - - - - (2,340,090) - - - - 34,271,082 21,366,747 20,125,622 19,323,484 20,130,193 48,705,812 $ (2,064,060) $ (2,057,863) $ (2,250,382) $ 3,914,190 $ 28,253,264 97 CITY OF ROSEMEAD Fund Balances of Governmental Funds Last Nine Fiscal Years (modified accrual basis of accounting) All other governmental funds: Reserved $ 3,195,415 Fiscal Year $ 7,693,216 $ 4,947,087 2004 2005 2006 2007 General fund: Special revenue funds 5,653,208 Reserved $ 353,616 $ 1,719,044 $ 256,765 $ 150,000 Unreserved 20,053, 506 19, 896, 581 22, 228, 341 22,460,545 Nonspendable - - - - Restricted - - - - Committed - - - - Assigned - - - - Unassigned - - - - Total general fund $ 20,407,122 $ 21,615,625 $ 22,485,106 $ 22,610,545 All other governmental funds: 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 City of Rosemead has elected to show only nine years of data for this schedule. The City implemented GASB 54 for the fiscal year ended June 30, 2012. The categories of fund balance for governmental funds have been changed as described more fully in the notes to the basic financial statements. Prior year fund balances reflect the guidance in effect when those financial statements were prepared. .; Fiscal Year 2008 2009 2010 2011 2012 $ 3,074,496 $ 3,106,917 $ 3,327,182 $ - $ - 18,633,154 16,135,102 13, 626, 774 - - - - - 2,034 2,034 - - 5,107,963 5,294,253 - - - 5,712 - - 10,209,075 9,519,173 $ 21,707,650 $ 19,242,019 $ 16,953,956 $ 15,319,072 $ 14,821,172 $ 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 10,870,747 - - - (4,402,964) (1,292,405) $ 18,323,878 $ 20,773,635 $ 19,105,611 $ 23,073,117 $ 9,578,342 0 CITY OF ROSEMEAD Changes in Fund Balances of Governmental Funds Last Dine Fiscal Years (modified accrual basis of accounting) Other financing sources (uses): Transfers in 3,905,993 Transfers out (3,905,993) Issuance of long -term debt - Discount on bonds - Premium on debt issued - Payment to bond escrow agent - Proceeds of capital lease - Total other financing sources (uses) - Extraordinary item: Gain (loss) on dissolution of redevelopment agency - 4,941,103 13,300,319 26,183,078 (4,941,103) (13,300,319) (26,183,078) - 14,005,000 24,230,000 - 316,830 - - (9,569,028) (22,075,305) 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% 7.8% 11.8% The City of Rosemead has elected to show only nine years of data for this schedule. 100 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 - - 55Q323 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 Transfers out (3,905,993) Issuance of long -term debt - Discount on bonds - Premium on debt issued - Payment to bond escrow agent - Proceeds of capital lease - Total other financing sources (uses) - Extraordinary item: Gain (loss) on dissolution of redevelopment agency - 4,941,103 13,300,319 26,183,078 (4,941,103) (13,300,319) (26,183,078) - 14,005,000 24,230,000 - 316,830 - - (9,569,028) (22,075,305) 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% 7.8% 11.8% The City of Rosemead has elected to show only nine years of data for this schedule. 100 Fiscal Year 2008 2009 2010 2011 2012 $ 17,841,792 $ 17,153,625 $ 18,508,896 $ 19,313,094 $ 15,980,662 15,716,610 10,992,235 7,856,792 .9,383,256 9,561,918 1,503,659 1,178, 362 1,079,429 1,764,162 1,156,719 537,430 638,244 708,434 677,861 1,055,391 641,566 565,643 491,574 462,389 619,397 687,568 736,213 680,288 741,382 768,997 1,678,791 884,847 389,310 367,956 582,176 141,930 381,429 254,610 253,379 658570 38,749,346 32,530,598 29,969,333 32,963,479 30,363,930 7,356,665 11, 956,179 5,903,926 3,801,486 4,203,302 8,043,771 9,114,009 8,863,234 8,882,915 7,517,101 12,116,508 4,964,867 11,264,220 19,402,924 6,417,803 669,827 783,452 584,463 595,904 - 3,408,691 1,047,529 1,940,641 3,397,072 3,681,903 4,078,631 2,030,698 2,733,885 2,362,860 2,532,665 1,647,673 202,752 290,885 93,121 9,090,076 1,105,000 915,000 945,000 975,000 1,210,000 1,567,849 1,531,986 1,501,667 1,882,092 961,506 - - - 275,344 - 39,994,615 32,546,472 34,027,921 41,668,718 35,614,356 (1,245269) (15,874) (4,058,588) (8,705,239) (5,250,426} 2,962,087 4,078,483 (2,962,087) (4,078,483) 4,133,554 4,824,919 6,431,374 (4,133,554) (4,824,919) (6,554,374) - 11,230,000 - (192,139) 102,501 - 102,501 11,037,861 (123,000) - - - (8,619,249) $ (1,245,269) $ (15,874) $ (3,956,087) $ 2,332,622 $ (13,992,675) 7.0% 7.6% 7.4% 8.8% 6.8% 101 (This page intentionally left blank) CITY OF ROSEMEAD Assessed Value and Estimated Actual Value of Taxable Property Last Ten Fiscal Years (in thousands of dollars) 1 Beginning with the fiscal year ended June 30, 2002, exemptions are netted directly against the individual property categories. NOTE: 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 102 City Fiscal Year Taxable Ended SBE Assessed Total Direct June 30 Secured Unsecured Non - Unitary Value Tax Rate 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% 2012 3,458,570,185 71,320,472 3,301,527 3,533,192,184 22.35% 1 Beginning with the fiscal year ended June 30, 2002, exemptions are netted directly against the individual property categories. NOTE: 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 102 CITY OF ROSEMEAD Direct and Overlapping Property Tax Rates (Rate per $100 of Taxable Value) Last Ten Fiscal Years Agenc 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 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 0.00103 0.00099 0.00092 0.00080 0.00066 0.00000 0.00000 0.00000 0.00000 0.00000 EI Monte School Districts 0.06592 0.05072 0.07246 0.08056 0.06402 0.08067 0.09044 0.11907 0.12388 0.12733 El Monte union High School 0.00000 0.03573 0.03928 0.05425 0.05846 0.02820 0.05159 0.09654 0.08475 0.09591 Garvey School Districts 0.05286 0.02471 0.02319 0.05221 0.05075 0.05061 0.06835 0.07836 0.08503 0.08404 Los Angeles Community College 0.01460 0.01986 0.01810 0.01430 0.02146 0.00878 0.02212 0.02311 0.04031 0.03530 L.A. Co. Flood Control Bonds 0.00088 0.00047 0.00024 0.00005 0.00005 0.00000 0.00000 0.00000 0.00000 0.00000 Metropolitan Water District 0.00670 0.00610 0.00580 0.00520 0.00470 0.00450 0,00430 0.00430 0.00370 0.00370 Montebello Unified School District 0.03983 0.04076 0.04172 0.07053 0.06731 0.06681 0.08065 0.09673 0.09792 0.10001 Pasadena Area Community College 0.00000 0.00681 0.00879 0.00410 0.02080 0.01972 0.01741 0.02300 0.01986 0.01956 Rio Hondo Community College 0.00000 0.00000 0.02170 0.01802 0.01469 0.01370 0.02320 0.02714 0.03439 0.03418 Rosemead School Districts 0.00540 0.04517 0.07095 0.07515 0.05420 0.08282 0.06875 0.11358 0.10743 0.10507 San Gabriel Unified School District 0.05803 0.05224 0.05729 0.05284 0.04930 0.05742 0.09294 0.10071 0.10190 0.08454 San Gabriel Valley Mwd Bonds 0.00000 0.00000 0.00000 0.00000 0.00000 0.00000 0.00000 0.00000 0.01800 0.01800 San Gabriel Vly Mwd State Water Bond 0.02400 0.02200 0.02000 0.02000 0.02000 0.02000 0.01800 0.01800 0.00000 0.00000 Total Direct & Overlapping Tax Rates 1.26925 1.30556 1.38044 1.44801 1.42640 1.43323 1.53775 1.70054 1.71717 1.70764 City's Share of 1% Levy Per Prop 13 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 1.00861 1.00755 1.00697 1.00604 1.00541 1.00450 1.00430 1.00430 1.00370 1.00370 Total Direct Rate 5 0.18152 0.18513 0.19461 0.20733 0.20556 0.21850 0.22614 022270 0,22407 0.22351 Notes: 'in 1978, California voters passed Proposition 13 which set the property tax rate at a 1 AO% 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. ' 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 2002103 - 2011/12 Tax Rate Table and HDL Coren & Cone 103 CITY OF ROSEMEAD Principal Property Taxpayers Current Year and Nine Years Ago 2011112 Taxpayer Rosemead Place, LLC Walmart Real Estate Business Trust Rosemead Hwang, LLC AFG Investment Fund 5 LLC 420 Boyd Street LLC Metodo Investments 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 1683 Walnut Grove LLC Builder Square LLC Rosemead Shopping Center LLC Prographics ILLS BHC Alhambra Hospital, Inc. 2002103 Taxable Assessed Value Rank Percent of Total City Taxable Assessed Value $ 41,688,891 1 1.18% 36,517,540 2 1.03% 32,367,942 3 0.92% 24,052,238 4 0.68% 18,555,925 5 0.53% 18,135,525 6 0.51% 13,669,299 7 0.39% 13,486,586 8 0.38% 13,049,543 9 0.37% 10,444,559 10 0.30% Percent of Total City Taxable Taxable Assessed Assessed Value Rank Value $ 31,990,380 1 1.54% 15,742,047 2 0.76% 15,456,334 3 0.75% 9,643,981 4 0.47% 9,146,029 5 0.44% 8,058,000 6 0.39% 7,545,780 7 0.36% 7,024,763 8 0.34% 6,448,378 9 0.31% 5,776,622 10 0.28% Source: Hdl Coren & Cone, Los Angeles County Assessor 2010111 Combined Tax Rolls. 104 CITY OF ROSEMEAD Property Tax Levies and Collections Last Ten Fiscal Years * Information not available. "* Dote: For these years the information was not available so an estimate was made to reduce the total collections to date to 100 %. Source: HDL Caren & Cone and Los Angeles County Auditor Controller's Office 105 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 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% 2012 2,711,546 2,699,377 .99.55% - 2,699,377 99.55% * Information not available. "* Dote: For these years the information was not available so an estimate was made to reduce the total collections to date to 100 %. Source: HDL Caren & Cone and Los Angeles County Auditor Controller's Office 105 CITY OF ROSEMEAD Ratios of Outstanding Debt by Type Last Ten Fiscal Years Tax Percentage Allocation of Personal Fiscal Year Bonds Income 1 2002103 2003104 2004105 2005106 2006107 2007108 2008109 2009110 2010111 2011112 33,830,000 33,385,000 32,920,000 37,100,000 37,455,000 36,350,000 35,435,000 34,490,000 44,745,000 43,535,000 2.00% 1.93% 1.65% 7.70% 7.30% 6.74% 6.41% 6.26% 8.12% 7.76% Debt Per Cam. 612 595 580 649 655 633 617 599 775 806 Motes: 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. 106 CITY OF ROSEMEAD Ratio of General Bonded Debt Outstanding Last Ten Fiscal Years (In Thousands, except Per Capita) General bonded debt is debt payable with governmental fund resources and general obligation bonds recorded in enterprise funds (of which, the City has none). 1 Assessed value has been used because the actual value of taxable property is not readily available in the State of California. 107 Tax Percent of Allocation Assessed Per Fiscal Year Bonds Value t . ' Capita 2002103 33,830 1.63% 612 2003104 33,385 1.49% 595 2004105 32,920 1.36% 580 2005106 37,100 1.40% 649 2006107 37,455 1.29% 655 2007108 36,350 1.15% 633 2008/09 35,435 1.05% 617 _. 2009/10 34,490 1.01% 599 2010/11 44,745 1.30% 775 2011/12 43,535 1.23% 806 General bonded debt is debt payable with governmental fund resources and general obligation bonds recorded in enterprise funds (of which, the City has none). 1 Assessed value has been used because the actual value of taxable property is not readily available in the State of California. 107 CITY OF ROSEMEAD Direct and Overlapping Governmental Activities Debt June 30, 2012 2011112 Assessed Valuation: $2,925,016,943 After Deducting $608,175,241 Incremental Value. Debt to Assessed Val utation Ratios: Direct Debt 0.00% Overlapping Debt 2.75% Total Debt 2.75% * This fund is a portion of a larger agency, and is responsible 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 Caren & Cone, L.A. County Assessor and Auditor Combined 2011112 Lien Date Tax Rolls. 108 Percentage Gross Bonded Applicable Net Bonded Debt Balance To City Debt Overlapping Debt * Metropolitan Water District $ 94,031,705 0.339% 318,454 Garvey School District DS 2000 Series A 529,903 51.444% 272,605 Garvey School District DS 2000 Series B 6,244,519 51.444% 3,212,451 Garvey School District 2004 Series 2005 8,023,736 51.444% 4,127,758 Garvey Sch DS 2004 Ser 2006 10,365,155 51.444% 5,332,285 Garvey Sch DS 2004 Ser C & 2011 14,167,964 51.444% 7,288,615 Rosemead Sch Dist DS 2000 Ser B 5,275,000 69.810% 3,682,469 Rosemead Sch DS 2000 Ser C 6,525,000 69.810% 4,555,092 Rosemead SD DS 2007 Ref. Bonds 9,665,000 69.810% 6,747,122 Rosemead School DS 2008 Series A 13,495,000 61810% 9,420,839 El Monte Union HS Dist 2002 Series A 2,065,000 14.660% 302,739 El Monte Union HS Dist Series B 3,485,000 14.660% 510,918 El Monte Un HSD DS 2006 Ref Bds 35,718,692 14.660% 5,236,538 El Monte Un Hi DS 2002 Ser C 28,705,000 14.660% 4,208,295 El Monte Union High DS 2008 SerA 53,225,754 14.660% 7,803,160 L.A. CCD DS 2003 Ser B 68,950,000 0.329% 227,018 L.A. CCD DS 2003 Taxable Ser 2004E 15,010,00D 0.329% 49,421 L.A. CCD DS 2001 Taxable Ser 2004A 74,615,000 6.329% 245,670 LACC DS Ref 2001 Series 2005 A 430,410,000 0.329% 1,417,127 LA CCD DS 2001 2006 Series B 382,575,000 0.329% 1,259,630 LA CCD DS 2003, 2006 Series C 284,050,000 0.329% 935,236 LACC DS 2001, 2008 Ser E -1 275,580,000 0.329% 907,349 LACC DS 2003, 2008 Ser F -1 344,915,000 0.329% 1,135,634 LACC DS 2003, 2008 Taxable Ser F -2 3,805,000 0.329% 12,528 LACC DS 2008, 2009 Taxable SerA 350,060,000 0.329% 1,152,377 LACC DS 2008, 2009 Taxable Ser B 75,060,000 0.329% 246,938 LACC Debt 2008, 2010 Tax Ser D 175,000,000 0.329% 576,188 LACC Debt 2008, 2010 Tax Ser E (BABS) 900,DOD,000 0.329% 2,963,255 LACC DS 2008, 2010 Series C 125,000,000 D.329% 411,563 Pasadena Area CCD DS 2002 Series S -A 980,000 2.647% 25,940 Pasadena CCD DS 2006 Series B 47,560,000 2.647% 1,258,871 Pasadena CCD DS 2006 Ref BD Series C 8,660,106 2.647% 229,225 Pasadena CCD DS 2002, 2006 Ser D 26,615,000 2.679% 713,088 Pasadena CCD 2002, 2009 Series E (BABS) 25,295,000 2.647% 669,536 Montebello Unif DS 1998 Series 98 9,679,140 1.401% 135,613 Montebello Unif SD DS 98 Series 99 7,712,854 1.401% 108,064 Montebello USD DS 1998 Series 2001 2,632,827 1.401 % 36,888 Montebello USD DS 1998 Series 2004 8,350,273 1.401% 116,995 Montebello Unified DS 1998 Series 2002 10,829,117 1.401% 151,726 Montebello Unif DS 2004 Ser 2005 25,070,000 1.401% 351,253 Montebello Unif DS 2004 Ser 2008 32,605,D00 1.401% 456,825 Montebello Unified DS 2004 Ser 2009 20,000,000 1.401% 280,218 Montebello Unified 04 Series 2009A -2 BABS 12,640,000 1.401% 177,098 Montebello Unified 2010 Refunding Bonds 14,165,000 1.401% 198,464 San Gabriel USD DS 2002 Series A 1,832,600 1.360% 24,921 San Gabriel USD DS 2602 Series B 5,128,892 1.360% 69,746 San Gabriel USD DS 2005 & 2012 Ref. Bonds 26,355,000 1.360% 358,393 San Gabriel USD DS 2002 Ser 2007 C 10,727,878 1.360% 145,885 San Gabriel USD DS 2008 SerA 34,356,709 1.360% 467,205 Total 0verfapprng t]ebt � ' � , 8f1,535 22B 2011112 Assessed Valuation: $2,925,016,943 After Deducting $608,175,241 Incremental Value. Debt to Assessed Val utation Ratios: Direct Debt 0.00% Overlapping Debt 2.75% Total Debt 2.75% * This fund is a portion of a larger agency, and is responsible 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 Caren & Cone, L.A. County Assessor and Auditor Combined 2011112 Lien Date Tax Rolls. 108 CITY OF ROSEMEAD Legal Debt Margin Last Ten Fiscal Years Fiscal Year 2003 2004 2005 2006 2007 Assessed valuation 2,070,991,108 2,240,938,488 2,422,878,306 2,644,964,038 2,901,902,093 Conversion percentage 25% 25% 25% 25% 25% Adjusted assessed valuation 517,747,777 560,234,622 605,719,577 661,241,010 725,475,523 Debt limit percentage 15% 15% 15% 15% 15% Debt limit 77,662,167 84,035,193 90,857,936 99,186,151 108,821,328 Total net debt applicable to limit: General obligation bonds - - - - - Legal debt margin 77,662,167 84,035,193 90,857,936 99,186,151 108,821,328 Total debt applicable to the limit as a percentage of debt limit 0.0% 0.0% 0.0% 0.0% 0.0 %6 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 currentfuil 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. Source; Rosemead Finance Department Los Angeles County Tax Assessor's Office 109 Fiscal Year 2008 2009 2010 2011 2012 3,165,802,509 3,362,646,146 3,399,331,688 3,431,820,218 3,533,192,184 25% 25% 25% 25% 25% 791,450,627 840,661,537 849,832,922 857,955,055 883,298,046 15% 15% 15% 15% 15% 118 ,717,594 926,099,230 927,474,938 128,693,258 132,494,707 118,717,594 126, 099,230 127,474,938 128,693,258 132,494,707 0.0% 0.0% 0.0% 0.0% 0.0% 110 CITY OF ROSEME=AD Pledged - Revenue Coverage Last Ten Fiscal Years (in Thousands) Note: Details regarding the city's outstanding debt can be found in the motes to the financial statements. Operating expenses do not include interest or depreciation expenses. 111 Tax Allocation Bonds Fiscal Year Ended Tax Debt Service June 30 Increment Principal Interest Coverage 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 2012 2,601,979 1,210,000 961,506 1.20 Note: Details regarding the city's outstanding debt can be found in the motes to the financial statements. Operating expenses do not include interest or depreciation expenses. 111 CITY OF ROSEMEAD Demographic and Economic Statistics Last Ten Calendar Years Per Personal Capita Unemployment Calendar Population Income Personal Rate Year 1 (in thousands) (2) Income (2) (3) 2002103 56,065 1,727,026 30,804 6.80% 2003104 56,710 1,991,372 35,115 6.00% 2004105 57,189 482,011 36,746 4.50% 2005106 57,144 513,123 39,011 4.60% 2006107 57,427 539,163 41,875 4.90% 2007108 57,422 552,450 42,916 4.47% 2008109 57,594 551,271 42,818 11.10% 2009110 57,756 550,832 42,784 10.50% 2010111 54,034 561,142 43,688 10.80% 2011112 54,172 NIA NIA 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) 112 CITY OF ROSEMEAD Principal Employers Current Year and Nine Years Ago 1 Based upon Employment Development Department's estimate of 22,300 residents employed in 2011 -12. * Information for 2003 is not available. Source: City of Rosemead and Rosemead Chamber of Commerce 113 2012 2003 Percent of Percent of Number of Total Number of Total Employer Employees Employment Employees Employment Southern California Edison 1 4,100 18.47% - 0.00% Garvey School District 2 804 3.62% - 0.00% Wal -Mart 3 420 1.89% - 0.00% Panda Restaurant Group, Inc. 4 400 1.80% - 0.00% Rosemead School District 5 337 1.52% - 0.00% Target 6 200 0.90% - 0.00% Hemetic Seal Corporation 7 150 0.68% - 0.00% Don Bosco Tech 8 90 0.41% - 0.00% Double Tree 9 76 0.34% - 0.00% Marge Carson, Inc. 10 80 0.36% - 0.00% 1 Based upon Employment Development Department's estimate of 22,300 residents employed in 2011 -12. * Information for 2003 is not available. Source: City of Rosemead and Rosemead Chamber of Commerce 113 CITY OF ROSEMEAD Full -time and Part -time City Employees by Function Last Ten Fiscal Years 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, t 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 114 Full -time and Part -time employees as of June 30, Function 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 General government 16 14 15 18 17 19 16 22 19 15 Public safety 1 23 22 17 23 22 34 39 42 42 33 Community development 5 6 6 6 11 23 18 23 23 7 Public Works nla nla nla nla nla nla nla nla nla 26 Parks and recreation 117 97 94 103 101 103 135 112 99 . 68 Total 161 139 132 150 151 179 208 199 183 149 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, t 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 114 CITY OF ROSEMEAD Operating Indicators by Function Last Ten Fiscal Years Source: City of Rosemead 115 Fiscal Year 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 Police: Arrests 1,102 1,081 1,230 1,315 1,786 1,506 1,478 1,733 1,888 1,842 Parking citations issued n/a 14,676 18,357 15,176 13,210 11,766 10,517 8,450 7,515 7,797 Fire: Number at emergency calls 2,728 2,589 2,617 2,617 2,749 2,846 2,959 2,853 2,745 2,928 Inspections - - - - - 2,518 2,093 2,137 1,845 2,066 Public works: Street resurfacing (miles) - 1.3 - 1.3 2.5 1.1 23 3.5 3.5 3.6 Parks and recreation: Number of recreation classes 420 450 530 720 775 484 397 727 617 519 Number of facility rentals n/a n/a n/a n/a n/a 540 453 236 1,786 3,261 Source: City of Rosemead 115 CITY OF ROSEMEAD Capital Asset Statistics by Function Last Ten Fiscal Years Fiscal Year 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 Public Safety: Sheriff stations 1 1 1 1 1 1 1 1 1 1 Fire: Fire stations 2 2 2 2 2 2 2 2 2 2 Public works: Streets (miles) 76.80 76.80 76.80 76.80 76.80 77.55 77.55 77.55 77.55 77.55 Streetlights 2,700 2,700 2,702 2,705 2,706 2,712 2,712 2,712 2,712 2,712 Traffic signals 39 39 39 39 41 42 42 42 42 42 Parks and recreation: Parks 10 10 10 10 10 10 10 10 10 10 Community centers 2 2 2 2 2 2 2 2 2 2 Source: City of Rosemead 116 (This page intentionally left blank)