CC - Item 3D - Transmittal of FY 2012-13 City of Rosemead and Rosemead Housing Corporation Annual Financial ReportROSEMEAD CITY COUNCIL
STAFF REPORT
TO: THE HONORABLE MAYOR AND CITY COUNCIL
FROM: JEFF ALLRED, CITY MANAGER
DATE: JANUARY 14, 2014
SUBJECT: TRANSMITTAL OF FY 2012 -13 CITY OF ROSEMEAD AND ROSEMEAD
HOUSING CORPORATION ANNUAL FINANCIAL REPORTS
SUMMARY
This is to transmit the FY 2012 -13 annual financial reports for the City of Rosemead and
the Rosemead Housing Development Corporation to the City Council. The attached
reports provide a complete presentation of the finances of each of the above mentioned
organizations. The 2012 -13 Fiscal Year was a year of recovery for the City's General
Fund. Due to many large one -time revenue payments along with an improved economic
base, the City was able to put money back into reserves at the conclusion of the fiscal
year. As noted on page 20 of the Comprehensive Annual Financial Report (CAFR), the
General Fund collected $2.796 million more than was expended, increasing the fund
balance from $14.8 million to $17.6 million. While some of these funds have been
programmed in the 2013 -14 Fiscal Year for much needed capital improvement projects
such as the renovation of the Garvey Gym and remodel work at City Hall, the majority of
these funds will remain in the fund balance to rebuild reserves.
Staff Recommendation
Staff recommends that the City Council receive and file the City of Rosemead
Comprehensive Annual Financial Report (CAFR) and the Rosemead Housing
Development Corporation Annual Financial and Compliance Report for the 2012 -13
Fiscal Year.
ANALYSIS
Governmental activities. From year to year the net assets of all Governmental
activities typically fluctuates a few percentage points which can equal a couple million
dollars. These fluctuations are generally the result of new construction for City facilities
or changes in long term debt. For Fiscal Year 2012 -13, Governmental activities (all
governmental funds) decreased the City of Rosemead's net assets by $6.88 million or
8.75 %. This is a result of the final winding down of the Rosemead Community
Development Commission (Redevelopment agency) and the remaining related assets
being transferred from the Successor Agency of the County of Los Angeles. This is
ITEM NUMBER: ...J D
City Council Meeting
January 14, 2014
Page 2 of 3
anticipated to be the final large change related to the dissolution of redevelopment and
fluctuations such as this are not anticipated for the future. General Fund highlights are
presented below and a detailed presentation of all funds is available in the attached
Comprehensive Annual Financial Report (CAFR).
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 $11,063,116, while total fund balance reached $17,617,440. 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 62.8
percent of total general fund expenditures, while total fund balance represents 100.0
percent of that same amount.
The fund balance of the City of Rosemead's general fund increased by $2,796,268
during the current year. Highlights of the change in fund balance are presented below:
• General Fund property tax increased $1,406,386 over last year. The City
received a settlement from the County of Los Angeles of $480,000 related to a
legal dispute over property tax administrative fees. The City also received one-
time property tax payments related to the dissolution of redevelopment.
• The City's solid waste provider issued an upfront franchise fee payment of $1.6
million upon the issuance of a new 10 -year franchise agreement.
• The City continued to make payments towards the unfunded portion of the Other
Post Employment Benefits liability in the amount of $644,548. While this payment
was originally budgeted to be taken from Unassigned General Fund Balance,
there was an increase in Fund Balance due to the large increase in revenues.
• Operating cost overruns in the City as a whole were minimal and were generally
related to emergency response to several events during the fiscal year. The
largest costs were related to the clean -up efforts from the wind storm, which
resulted in a large loss of trees and supporting infrastructure in the northern part
of the City. 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.
City Council Meeting
January 14, 2014
Page 3 of 3
PUBLIC NOTICE PROCESS
This item has been noticed through the regular agenda notification process.
Submitted by:
Matthew E. Hawkesworth
Assistant City Manager /Finance Director
Attachments: (1) City of Rosemead Comprehensive Annual Financial Report
(2) Rosemead Housing Development Corporation Financial and Compliance Report
CITY OF ROSEMEAD
Rosemead. California
Comprehensive Annual Financial Report
Fiscal Year Ended June 30, 2013
Prepared by the Finance Department
Matthew Hawkesworth
Director of Finance
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CITY OF ROSEMEAD
Comprehensive Annual Financial Report
Fiscal Year Ended June 30, 2013
TABLE OF CONTENTS
Page
INTRODUCTORY SECTION
Letter of Transmittal i
Directory of Officials v
Organizational Chart vi
FINANCIAL SECTION
Independent Auditor's Report
1
Management's Discussion and Analysis (Required Supplementary Information)
4
Basic Financial Statements:
59
Government -wide Financial Statements:
Statement of Net Position
15
Statement of Activities
16
Fund Financial Statements:
61
Governmental Funds:
62
Balance Sheet
17
Reconciliation of the Balance Sheet of Governmental Funds to the
Statement of Net Position
19
Statement of Revenues, Expenditures, and Changes in Fund Balances
20
Reconciliation of the Statement of Revenues, Expenditures, and
Changes in Fund Balances of Governmental Funds to the
Statement of Activities
22
Proprietary Funds:
Statement of Net Position
23
Statement of Revenues, Expenses, and Changes in Fund Net Position
24
Statement of Cash Flows
25
Fiduciary Funds:
Statement of Fiduciary Net Position
26
Statement of Changes in Fiduciary Net Position
27
Notes to the Basic Financial Statements
28
REQUIRED SUPPLEMENTARY INFORMATION
Notes to the Required Supplementary Information
58
Schedule of Revenues, Expenditures, and Changes in Fund Balances -
Budget and Actual — General Fund
59
Schedule of Revenues, Expenditures, and Changes in Fund Balances -
Budget and Actual — Rosemead Housing Development Corporation
60
Schedule of Revenues, Expenditures, and Changes in Fund Balances -
Budget and Actual — HOME Program
61
Schedule of Funding Progress — PARS Retirement Enhancement Plan
62
Schedule of Funding Progress — Other Post Employment Benefits Plan
62
CITY OF ROSEMEAD
Comprehensive Annual Financial Report
Fiscal Year Ended June 30, 2013
TABLE OF CONTENTS, (continued)
FINANCIAL SECTION, (continued)
OTHER SUPPLEMENTARY INFORMATION
Page
Combining Balance Sheet— Non -Major Governmental Funds
65
Combining Statement of Revenues, Expenditures, and Changes in Fund
Balances — Non -Major Governmental Funds
68
Schedule of Revenues, Expenditures, and Changes in Fund Balances -
Budget and Actual — Community Development Block Grant
71
Schedule of Revenues, Expenditures, and Changes in Fund Balances -
Budget and Actual — Proposition A
72
Schedule of Revenues, Expenditures, and Changes in Fund Balances -
Budget and Actual — Proposition C
73
Schedule of Revenues, Expenditures, and Changes in Fund Balances -
Budget and Actual — Federal Highway Grant
74
Schedule of Revenues, Expenditures, and Changes in Fund Balances -
Budget and Actual — State Gas Tax
75
Schedule of Revenues, Expenditures, and Changes in Fund Balances -
Budget and Actual — Air Quality Management District
76
Schedule of Revenues, Expenditures, and Changes in Fund Balances -
Budget and Actual — Street Lighting
77
Schedule of Revenues, Expenditures, and Changes in Fund Balances -
Budget and Actual — Narcotics Seizure
78
Schedule of Revenues, Expenditures, and Changes in Fund Balances -
Budget and Actual — Measure R
79
Major Fund Budget and Actual Schedules:
Schedule of Revenues, Expenditures, and Changes in Fund Balances -
Budget and Actual — City Capital Projects 80
Internal Service Funds
Combining Statement of Net Position 82
Combining Statement of Revenues, Expenses and Changes in Fund
Net Position 83
Combining Statement of Cash Flows 84
Statement of Changes in Fiduciary Assets and Liabilities — Agency Fund 85
CITY OF ROSEMEAD
Comprehensive Annual Financial Report
Fiscal Year Ended June 30, 2013
TABLE OF CONTENTS, (continued)
Page
STATISTICAL SECTION
Net Position by Component
87
Changes in Net Position
89
Fund Balances of Governmental Funds
91
Changes in Fund Balances of Governmental Funds
93
Assessed Value and Estimated Actual Value of Taxable Property
95
Direct and Overlapping Property Tax Rates
96
Principal Property Taxpayers
97
Property Tax Levies and Collections
98
Ratios of Outstanding Debt by Type
99
Ratio of General Bonded Debt Outstanding
100
Direct and Overlapping Governmental Activities Debt
101
Legal Debt Margin
102
Pledged- Revenue Coverage
104
Demographic and Economic Statistics
105
Principal Employers
106
Full -time and Part-time City Employees by Function
107
Operating Indicators by Function
108
Capital Assets Statistics by Function
109
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MAYOR:
POLLY LOW
N,L1YOR PRO TEM;
WJLLIA.m ALARCAN
COUNCIL MEYRSENS;
S.ANDPA.AnILNTA
MARGAR£f CLARK
STFVRN LY
January 8, 2014
City Of w9semead
8838 E. VALLEY BOULEVARD P.O BOX 399
ROSEMEAD, CALIFORNIA 91770
TELEPHONE (626) 569 -2100
FAX (626) 307 -9218
To the Honorable Mayor, Members of the City Council, and Citizens of the City of Rosemead;
Sound financial practice dictates that all general - purpose local governments publish within six
months of the close of each fiscal year a complete set of financial statements presented in
conformity with generally accepted accounting principles (GAAP) and audited in accordance
with generally accepted auditing standards by a firm of licensed certified public accountants.
Pursuant to that requirement, we hereby issue the comprehensive annual financial report of the
City of Rosemead for the fiscal year ended June 30, 2013.
This report consists of management's representations concerning the finances_ of the City of
Rosemead. Consequently, management assumes full responsibility for the completeness and
reliability of all of the information presented in this report. To provide a reasonable basis for
making these representations, management of the City of Rosemead has established a
comprehensive internal control framework that is designed both to protect the government's
assets from loss, theft, or misuse and to compile sufficient reliable information for the
preparation of the City of Rosemead's financial statements in conformity with GAAP. Because
the cost of internal controls should not outweigh their benefits, the City of Rosemead's
comprehensive framework of internal controls has been designed to provide reasonable rather
than absolute assurance that the financial statements will be free from material misstatement.
As management, we assert that, to the best of our knowledge and belief, this financial report is
complete and reliable in all material respects.
The City of Rosemead's financial statements have been audited by Rogers, Anderson, Malody,
& Scott, LLP ( "RAMS "), a firm of licensed certified public accountants. The goal of the
independent audit was to provide reasonable assurance that the financial statements of the City
of Rosemead for the fiscal year ended June 30, 2013, are free of material misstatement. The
independent audit involved examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements; assessing the accounting principles used and significant
estimates made by management; and evaluating the overall financial statement presentation.
The independent auditor concluded, based upon the audit, that there was a reasonable basis for
rendering an unqualified opinion that the City of Rosemead's financial statements for the fiscal
year ended June 30, 2013, are fairly presented in conformity with GAAP. The independent
auditor's report is presented as the first component of the financial section of this report.
The independent audit of the financial statements of the City of Rosemead was part of a
broader, federally mandated "Single Audit" designed to meet the special needs of federal
grantor agencies. The standards governing Single Audit engagements require the independent
auditor to report not only on the fair presentation of the financial statements, but also on the
audited government's internal controls and compliance with legal requirements, with special
emphasis on internal controls and legal requirements involving the administration of federal
awards. These reports are available in the City of Rosemead's separately issued Single Audit
Report. GAAP 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 and private agencies under contract. Some of the contracts in effect
during the fiscal year were for police and street maintenance. The City also has two blended
component units: 1) the Rosemead Financing Authority (the Authority) and 2) 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 both
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. For the general
fund and major special revenue funds, these comparison schedules are presented as part of the
required supplementary information in the accompanying financial statements. For
governmental funds that have appropriated annual budgets, other than the general fund and
major special revenue funds, these comparison schedules are presented in the other
supplementary section of the accompanying financial statements.
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 along with some
new restaurants and retail businesses have helped the City's sales tax to stabilize with some
growth. A direct comparison with the previous fiscal year will show a decline in sales tax
revenues; however, this is due to the misallocation of taxes that will be corrected in the 2013/14
Fiscal Year. It should be noted that while the stability and growth has been positive, sales tax
receipts are still down in comparison to the 2008109 peak. The stability realized in retail has
helped keep Rosemead's unemployment rate down to 9.0% whereas the larger Los Angeles,
Long Beach, Glendale area rate is 10.2 %. Major employers are listed in the statistical section of
the accompanying financial report. TGI Fridays and Olive Garden opened during the year and 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 action items designed
to meet these goals were started in the 2011 -12 Fiscal Year and continued throughout the
2012 -13 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 City's first five -year financial plan
was developed during the fiscal year and will be used annually as part of the budget
development process to identify capital and operating needs over the next five years.
Cash management policies and practices. Cash, temporarily idle during the year, was
invested in federally insured certificates of deposit, medium term notes, 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 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 and reinsurance, and to arrange for group - purchased
insurance for property and other coverage. Additional information can be found in Note 10 in
the notes to the Basic Financial Statements.
Pension and other postemployment benefits. The City of Rosemead contracts 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 annual tax increment revenue to the City. The State has continued to provide funding
for enforceable obligations such as debt service and the Rosemead Housing Development
Corporation's Operating and Assistance agreement and will continue to do so until all of the
obligations have been repaid in full. The consequence is that the City lost more than $2 million
in funding for economic development and job creation.
Awards and Acknowledgement
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,
np* 4 --�
Matthew E. Hawkesworth
Assistant City Manager /Director of Finance
iv
��t"01A:Z91614r, A
Directory of Officials
June 30, 2013
CITY COUNCIL
Polly Low, Mayor
William Alarcon, Mayor Pro Tern
Sandra Armenta, Council Member
Margaret Clark, Council Member
Steven Ly, Council Member
CITY MANAGEMENT
Jeff Allred, City Manager
Matthew E. Hawkesworth, Assistant City Manager /Finance Director
Michelle Ramirez, Community Development Director
David Montgomery- Scott, Director of Parks and Recreation
Chris Marcarello, Public Works Director
Lt. Ignacio Somoano, Chief of Police
Gloria Molleda, City Clerk/Director of Public Information & Communications
Burke, Williams & Sorensen, LLP, City Attorney
CITY OF ROSEMEAD
Function Based Organizational Chart
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VI
FINANCIAL SECTION
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ROGERS, ANDERSON, MAl_ODY & SCOTT, LLP
CERT IrIED PUBUCACCOUNTANTS, SINCE 1948
975 E. Ca,"negle Dr'. Suite i00 The Honorable Mayor and City Council
San Bernardino. CA 92408 City of Rosemead
909 809 067 T Rosemead, California
909 889 5361. F
ramscpa.net INDEPENDENT AUDITOR'S REPORT
PARi'NcRS
P,e„da L 0d1t,. CPA, MS Report on the financial Statements
Terry P. Shea, CPA
K " "'"'`
f9 ,e v C YVikr�� CPA, N.Sk, Ci3MA We have audited the accompanying financial statements of the
..
Sco.i w Mnrnx CPA C .MA governmental activities, each major fund, and the aggregate remaining fund
„Sh,nbh, -. CPA MST, CGMA information of the City of Rosemead, California (City), as of and for the year
J'r" C PA iliom, ` "" ended June 30, 2013, and the related notes to the financial statements,
PI -d1, H. WIlil °. "AU ":,,<,: P,r, "` "".`' which collectively comprise the City's basic financial statements as listed in
MAP,JAGTRS 1 STAFF the table of contents.
Nan,y Q'R,MFo ty. CPA. MBA -
Bi - , '' ierd:A ' EAel CPA. `'PA Management's Responsibility for the Financial Statements
]en „y Llu, CWk. NET
P M t,3' uaI PA. M3A
1,, S iv CVA, MBA Management is responsible for the preparation and fair presentation of these
t,3 M,,'+ CPA financial statements in accordance with accounting principles generally
H t <« CPA sA accepted in the United States of America; this includes the design,
r s L)t s,"r„ `,PA
r::,Pr- dvp.CPA implementation, and maintenance of internal control relevant to the
QaNe1 T. Tic ;nrr, cSA. MSA preparation and fair presentation of financial statements that are free from
D: rel,I aro v:,. CPA, MSP material misstatement, whether due to fraud or error;.
,,,,,A D. H, ! ,-ood. CPA
Auditor's Responsibility
Our responsibility is to express opinions on these financial statements based
on our audit. We conducted our audit in accordance with auditing standards
generally accepted in the United States of America and the standards
applicable to financial audits contained in Government Auditing Standards,
issued by the Comptroller General of the United States. Those standards
require that we plan and perform the audit to obtain reasonable assurance
about whether the financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the
amounts and disclosures in the financial statements. The procedures
FM'ERS selected depend on the auditor's judgment, including the assessment of the
r ,.,,,;t „reof risks of material misstatement of the financial statements, whether due to
Cem i b'`A " °° ° " n ` l fraud or error, In making those risk assessments, the auditor considers
PCPs �h,,A!CPAAMa,(e internal control relevant to the entity's preparation and fair presentation of
S C P`Ajq,, ” the financial statements in order to design audit procedures that are
A u d `` appropriate in the circumstances, but not for the purpose of expressing an
Q ` ` " wer opinion on the effectiveness of the entity's internal control. Accordingly, we
So c"'Y & express no such opinion. An audit also includes evaluating the
.d Pub (A. v „ ,:t„nt, appropriateness of accounting policies used and the reasonableness of
significant accounting estimates made by management, as well as
evaluating the overall presentation of the financial statements.
STABILITY. ACCURACY. TRUST.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a
basis for our audit opinions.
Opinions
In our opinion, the financial statements referred to above present fairly, in all material respects,
the respective financial position of the governmental activities, each major fund, and the
aggregate remaining fund information of the City of Rosemead, as of June 30, 2013, and the
respective changes in financial position and cash flows, where applicable, thereof for the year
then ended in conformity with accounting principles generally accepted in the United States of
America.
Other Matters
Required Supplementary Information
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.
Other Information
Our audit was conducted for the purpose of forming opinions on the financial statements that
collectively comprise the City's basic financial statements. 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 basic financial
statements. Such information has been subjected to the auditing procedures applied in the audit
of the basic financial statements and certain additional procedures, including comparing and
reconciling such information directly to the underlying accounting and other records used to
prepare the basic financial statements or to the basic financial statements themselves, and
other additional procedures in accordance with auditing standards generally accepted in the
United States of America. In our opinion, the combining and individual nonmajor fund financial
statements and nonmajor fund budgetary comparison schedules are 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.
Implementation of new pronouncements
As discussed in Note 1 of the financial statements, the City adopted the provisions of GASB
Statement No. 63, Financial Reporting of Deferred Outflows of Resources, Deferred Inflows of
Resources and Net Position.
Other Reporting Required by Government Auditing Standards
In accordance with Government Auditing Standards, we have also issued our report dated
January 8, 2014, 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 in considering the City's internal control over financial reporting and compliance.
fi'�v�aJ (.i'n�t.aoa�tlotA.� t �or� LEf�
San Bernardino, California
January 8, 2014
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Management's Discussion and Analysis
As management of the City of Rosemead, we offer readers of the City of Rosemead's financial
statements this narrative overview and analysis of the financial activities of the City of
Rosemead for the fiscal year ended June 30, 2013. 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
• General Fund unassigned fund balance at the end of FY 2012 -13 has increased for the
first time in 6 years due to increased revenues and several large one -time payments.
Since the downturn in the economy in 2007 -08, the City has worked diligently to reduce
expenditures while maintaining programs and service levels. This increase in fund
balance and reserves is the direct result of the difficult decisions that have been made
over the last several years to live within our means. The City's staff and elected officials
are committed to setting aside funds in the good years to ensure reserves are available
during the lean years.
*The General Fund budget assumed for a decrease in unassigned reserves of
approximately $825 thousand due to contributions to the Other Post Employment Benefit
fund and Capital Improvement Projects; however, due to increased revenues, several
large one -time revenues, and a reduction in expenditures, approximately $1.544 million
was added in FY 2012 -13.
• The assets related to Government Activities has been reduced by more than $9 million
in FY 2012 -13 due to final close outs of the former Redevelopment Agency and the Low
and Moderate Income Housing Fund.
• At the end of the current fiscal year unassigned fund balance for the General Fund was
$11,063,116 or 63 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 comprise three
components: 1) government -wide financial statements, 2) fund financial statements, and 3)
notes to the financial statements. This report also contains other supplemental information in
addition to the basic financial statements themselves.
Government -wide Financial Statements. The govemment -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 position presents information on all of the City of Rosemead's assets and
liabilities, with the difference between the two reported as net position. Over time, increases or
decreases in net position may serve as a useful indicator of whether the financial position of the
City of Rosemead is improving or deteriorating.
The statement of activities .presents information showing how the government's net position
changed during the most recent fiscal year. All changes in net position 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 development, and parks and
recreation.
The government -wide financial statements include not only the City of Rosemead itself (known
as the primary govemment), but also a legally separate financing authority and a legally
separate low income housing corporation, for which the City of Rosemead is financially
accountable. Financial information for the component units is reported separately from the
financial information presented for the primary government itself.
The government -wide financial statements can be found on pages 15 -16 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 14 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, Successor Agency Low -
Moderate Income Housing Set -Aside Fund, HOME Fund and Capital Project Fund, all five of
which are considered to be major funds. Data from the other 9 governmental funds are
5
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 schedule has been provided for the General Fund, Rosemead Housing
Development Corporation Fund, HOME Program Fund, Community Development Block Grant
Fund, Proposition A Fund, Proposition C Fund, Federal Highway Grant Fund, State Gas Tax
Fund, Air Quality Management District Fund, Street Lighting Fund, Narcotic Forfeiture and
Seizure Fund, Measure R Fund, and City Capital Projects Fund to demonstrate compliance with
this budget.
The basic governmental fund financial statements can be found on pages 17 - 22 of this report.
Fiduciary funds. Fiduciary funds are used to account for resources held for the benefit of
parties outside the government. Fiduciary funds are not reflected in the government -wide
financial statement because the resources of those funds are not available to support the City of
Rosemead's own programs. The accounting used for fiduciary funds is much like that used for
proprietary funds. The basic fiduciary fund financial statements can be found on pages 26 - 27
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 28 — 56 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 pages 58 - 62 of this
report.
The combining statements referred to earlier in connection with non -major governmental funds
and internal service funds are presented immediately following the required supplementary
information on pensions. Combining and individual fund statements and schedules can be
found on pages 65 - 84 of this report.
Government -wide Financial Analysis
As noted earlier, net position 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 position)
by $71,698,587 at the close of the most recent fiscal year.
A significant portion of the City of Rosemead's net position (71.1 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,
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 Position
As of June 30, 2013 and 2012
(thousands)
Current and other assets
$ 23,847
$ 30,709
Capital assets
51,011
53,312
Total assets
74,858
84,021
Long -term liabilities outstanding
1,432
1,616
Other liabilities
1,727
3,836
Total liabilities
3,159
5,452
Net position:
Net investment in capital assets
51,133
54,010
Restricted
2,829
10,871
Unrestricted
17,737
13,688
Total net position
$ 71,699
$ 78,569
An additional portion of the City of Rosemead's
that are subject to external restrictions on how
unrestricted net position ($17.737 million) ma'
obligations to citizens and creditors.
net position (3.9 percent) represents resources
they may be used. The remaining balance of
be used to meet the government's ongoing
At the end of the current fiscal year, the City of Rosemead is able to report positive net position
balances. The situation also held true for the prior fiscal year.
The government's net position decreased by $6,870,268 during the current fiscal year. The
decrease can be attributed to the final unwinding of redevelopment, which included the
repayment of excess cash to the County of Los Angeles and the write -off of interfund debt
between former redevelopment funds.
Governmental activities. Governmental activities decreased the City of Rosemead's net
position by $6,870,268 Contributing to the change in net position are several single occurrence
events described below.
• As mentioned above, the final unwinding of the redevelopment agency sent cash
payments totaling $2.7 million to the County of Los Angeles.
• Less: A $4.5 million loan payable from future tax increment revenues to the Low &
Moderate Income Housing Fund was written off when the fund was closed out.
City of Rosemead's Changes in Net Position
Years Ended June 30, 2013 and 2012
(thousands)
Program revenues:
Charges for services
$ 3,277
$ 3,206
Operating grants and contributions
6,362
5,051
Capital grants and contributions
944
1,568
General revenues:
Property taxes
8,900
10,567
Othertaxes
6,940
5,158
Investment income
28
195
Other
1,181
854
Loss on sale of capital assets
-
(2,340)
Transfer to Successor Agency
(6,393)
-
Extraordinary item:
Gain on dissolution of redevelopment agency
-
34,271
Total revenues
21,239
58,530
Expenses:
General government
3,382
3,989
Public safety
7,791
7,517
Public works
11,717
11,588
Community development
2,616
4,080
Parks and recreation
2,595
2,533
Interest on long-term debt
8
570
Total expenses
28,109
30,277
Increase in net position
6,870
28,253
Net position - June 30, 2012
78,569
1 50,316
Net position - June 30, 2013
$ 71,699
$ 78,569
Revenues by Source
Governmental Activities
Transh
Successor
-67'
'opertytaxes
82%
Otherrevenue
12%
Investment inco
0%
Othertax
1%
es
34%
occupancytaxes
15%
Expenses and Program Revenues
Governmental Activities
14,000,000
12,000,000
10,000,000
8,000,000
6,000,000
4,000,000
2,000,000
■ expenses
revenues
e e
�\\`3
Q
Q4
aea
a a�o °
KA
aca`
ma c`
■ expenses
revenues
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 $19,658,363 a decrease of $4,741,151 in comparison with the prior
year. Approximately 52.3% of this total amount $10,274,892 constitutes unassigned fund
balance, which is available for spending at the government's discretion. The remainder of the
fund balance is segregated into nonspendable fund balance, restricted fund balance, committed
fund balance, or assigned fund balance to indicate that it is not available for new spending
because it has already been 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
$11,063,116, while total fund balance reached $17,617,440. 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 62.8 percent of total
general fund expenditures, while total fund balance represents 100.0 percent of that same
amount.
The fund balance of the City of Rosemead's general fund increased by $2,796,268 during the
current year. Highlights of the change in fund balance are presented below:
• General Fund property tax increased $1,406,386 over last year. The City received a
settlement from the County of Los Angeles of $480,000 related to a legal dispute over
property tax administrative fees. The City also received one -time property tax payments
related to the dissolution of redevelopment.
• The City's solid waste provider issued an upfront franchise fee payment of $1.6 million
upon the issuance of a new 10 -year franchise agreement.
• The City continued to make payments towards the unfunded portion of the Other Post
Employment Benefits liability in the amount of $644,548. While this payment was originally
budgeted to be taken from Unassigned General Fund Balance, there was an increase in
Fund Balance due to the large increase in revenues.
• Operating cost overruns in the City as a whole were minimal and were generally related
to emergency response to several events during the fiscal year. The largest costs were
related to the clean -up efforts from the wind storm, which resulted in a large loss of trees
and supporting infrastructure in the northern part of the City. 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.
10
General Fund Budget Analysis. The City's General Fund collected revenues of slightly more
than $3 million in comparison to the budgeted estimates. The majority of these revenues were
for one -time events and were not needed to fund ongoing operations. Major contributors for the
excess revenue were the settlement payment by the County of Los Angeles related to a
property tax administration fee lawsuit, an upfront franchise fee payment from the City's solid
waste provider, and property tax related to the dissolution of redevelopment agencies. Since
these were one -time funds and not needed to balance the budget or fund existing operations,
revenue adjustments to the budget were not made during the fiscal year. Other contributors to
the variance in Taxes revenue includes an increase of $96,000 in Sales Tax, which was driven
by an improving economy and the opening of some new businesses, an increase of $231,000 in
Transient Occupancy Tax from an improving travel industry. Shortfalls from budgeted estimates
were isolated to interest earnings, $57,000, due an investment market that continues to
struggle. A positive variance of $206,000 in Fines and Forfeitures was a result of increased
collections of parking citations by the City's new third -party agent and the administrative citation
process implemented in 2011 -12. Charges for services, primarily in the Parks and Recreation
Division were underestimated by approximately $105,000 which can be credited to increased
usage of the new aquatics facilities and contract classes. The remainder, Other Revenue, was
$103,000 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 $710,290. The main
contributor to the increase was the $644,548 appropriation for the City's unfunded retirement
liability, and the second major adjustment was an increase due to legal fees from a lawsuit filed
against the City. Additional adjustments were made for expenditures such as parking ticket
processing, which was more than offset by increased revenue collection. Net actual
expenditures were $730,819 less than the amended budget. General Government underspent
by $405,533 due to Housing Development Corporation obligations being covered by the
Successor Agency rather than the General Fund along with reduced legal fees for attorney
services and public noticing. Public works was over budget by $142,488 due to wind storm
emergency clean -up response of $74,000, and a large water billing adjustment of $70,000.
Public Safety underspent by $22,284 which was a direct result of some personnel related costs
due to temporary vacancies. The Community Development Department also underspent their
budget by $142,089 due to temporary staffing vacancies and a reduction in the use of
contracted services. Parks and Recreation had aggregate savings of $308,727 largely due to
the reduced reliance on part-time staffing and temporary staffing vacancies, larger than
anticipated utility savings at the two new aquatic centers and reduced costs for special events.
The department also realized some savings due to the reduced participation in programs such
as excursions and the senior lunch program.
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 on gasoline. The 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 $223,607. 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.
11
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, 2013, amounts to $51,010,955 (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:
• Street resurfacing and right -of way improvements on Mission Drive
• Completion of the Safe Routes to Schools 2011 -12 Grant related projects
• Citywide Energy Efficiency renovations
• Replaced ball field lighting at City parks
• Rosemead Community Center modernization project .
• Catch Basin Insert installations in compliance with NPDES regulations
• Completed residential resurfacing projects in several neighborhoods
12
City of Rosemead's Capital Assets
(net of depreciation)
(thousands)
Land
$ 2,912
$ 2,912
Buildings
14,397
15,032
Improvements other than
Buildings
431
526
Machinery and equipment
141
116
Autos and trucks
215
381
Furniture and office equipment
25
34
Infrastructure
32,873
34,299
Construction in progress
1 17
1 12
Total
1 $ 51,011
1 $ 53,312
Additional information on the City of Rosemead's capital assets can be found in Note No. 7,
found on pages 43 - 44 of the Basic Financial Statements.
Long -term debt. At the end of the current fiscal year, the Successor Agency for the Rosemead
Community Development Commission had total bonded debt outstanding of $41,740,000. Of
this amount, all of it is backed by future property tax increment revenues.
City of Rosemead's Outstanding Debt
Revenue Bonds
(thousands)
Allocation Bonds
41,740
The Successor Agency's total bonded debt decreased by approximately $1,800,000 during the
current fiscal year due to debt service payments. For more detailed information about the City's
long -term debt please refer to Note No. 15, Successor Agency found on page 54 of the Basic
Financial Statements.
Economic Factors and Next Year's Budgets and Rates
• As discussed throughout this Management's Discussion and Analysis report, while there
were significant General Fund revenue increases in FY 2012 -13, most were due to one-
time payments and will not be ongoing into 2013 -14. Both Sales Tax and Property Tax
revenues have shown modest increases and are projected to continue in a slow but
steady growth pattern. The budget was balanced using only $50,000 in one -time
13
revenues for 2013 -14, which is in line with the Strategic Plan of eliminating the use of one-
time revenues over a 3 year period.
• At the time the FY 2013 -14 budget was being prepared the City had received the Finding
of Completion from the State's Department of Finance, which was the final step need to
utilized approximately $7 million in tax increment bond proceeds from the former
redevelopment agency. The City has included capital improvement project funding from
these funds in order to complete several projects that have been on hold for more than
two years. The Public Plaza and Rosemead Community Recreation Center should both
be completed by the end of the fiscal year.
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.
14
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CITY OF ROSEMEAD
Statement of Net Position
June 30, 2013
Total assets 74,857,730
Liabilities
Accounts payable and accrued liabilities
Governmental
Accrued salaries and benefits
Activities
Assets:
5,970
Cash and investments (note 2)
$ 19,928,301
Receivables:
384,413
Accounts
1,421,376
Interest
34,703
Notes
405,488
Due from Successor Agency (note 5)
86,729
Prepaid expenses
1,970,178
Capital assets (note 7):
Land
2,912,284
Construction in progress
17,429
Other capital assets, net
48,081,242
Total assets 74,857,730
Liabilities
Accounts payable and accrued liabilities
1,509,922
Accrued salaries and benefits
210,917
Retentions payable
5,970
Non - current liabilities (note 8):
2,684,491
Due within one year
384,413
Due in more than one year
1,047,921
Total liabilities 3,159,143
Net position
Net investment in capital assets
51,132,854
Restricted for:
Public safety
2,723
Public works
2,684,491
Community service
141,933
Unrestricted
17,736,586
Total net position
$ 71,698,587
The accompanying notes are an integral part of these financial statements.
15
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CITY OF ROSEMEAD
Statement of Activities
Fiscal Year Ended June 30, 2013
Governmental activities:
Net (expense)
revenue and
changesin
Program Revenues _
net position
Operating Capital
(973,324)
Charges for Contributions Contributions
Governmental
Expenses Services and Grants and Grants
Activities
Governmental activities:
General government
$ 3,381,686
$ 140,777
$ 2,267,585 $ - $
(973,324)
Public safety
7,791,073
678,501
- 944,410
(6,168,162)
Public works
11,717,276
272,797
3,596,488 -
(7,847,991)
Community development
2,616,531
1,399,274
497,602 -
(719,655)
Parks and recreation
2,594,863
785,611
- -
(1,809,252)
Interest and other charges
7,827
-
- -
( 7,827)
Total governmental activities
$ 28,109,256
$ 3,
$ 6,361,675 $ 944,410
(17,526,211)
General revenues:
Taxes:
Property taxes
Sales and use taxes
Property taxes in lieu of sales and use taxes
Transient occupancy taxes
Franchise taxes
Othertaxes
Investment income
Other
Transfer to Successor Agency (note 15)
Total general revenues
Change in net position
Net position, beginning of year
Net position, end of year
7,848,670
3,215,897
1,051,558
1,447,820
2,187,195
88,791
28,202
1,180,688
(6,392,878)
10,655,943
(6,870,268)
78,568,855
$ 71,698,587
The accompanying notes are an integral part of these financial statements.
16
CITY OF ROSEMEAD
Governmental Funds
Balance Sheet
June 30, 2013
Liabilities and Fund Balances
Special Revenue
Liabilities:
Rosemead Housing Low 8 Moderate
Accounts payable and accrued liabilities $
1,075,272 $
Development Income Housing
Accrued salaries and benefits
General
Corporation Asset
Assets
1,166
- -
Cash and investments (note 2)
$ 16,618,191
$ 136,346 $ -
Receivables:
328,040
Accounts
1,168,692
14,243 -
Interest
34,703
- -
Notes
405,488
- -
Prepaid items
133,196
- -
Due from other funds (note 4)
749,194
- -
Due from Successor Agency (note 5)
80,929
- -
Total assets
$ 19.190,393
$ 150.589 $
Liabilities and Fund Balances
Liabilities:
Accounts payable and accrued liabilities $
1,075,272 $
53,269 $ -
Accrued salaries and benefits
168,475
- -
Retentions payable
1,166
- -
Due to other funds (note 4)
-
- -
Deferred revenue
328,040
Total liabilities
1,572,953
53,269
Fund balances:
Nonspendable
133,196
- -
Restricted for
Public safety
-
- -
Public works
-
- -
Community services
-
- -
Low and moderate income housing
-
97,320 -
Committed
6,415,416
- -
Assigned
5,712
- -
Unassigned
11,063,116
Total fund balances (deficit)
17,617,440
97,320 -
Total liabilities and fund balances $ 19.190.393 $ 150.589 $
The accompanying notes are an integral part of these financial statements.
17
Special Revenue Capital Projects
- - 2,723
2,723
Non -Major
2,684,491
HOME
City
Governmental
Totals
- - -
6,415,416
5,712
$ - $
-
$ 2,882,983
$ 19,637,520
62,957
-
175,484
1,421,376
-
-
34,703
-
-
-
405,488
-
-
-
133,196
-
-
-
749,194
60,929
$ 62,957 $
$ 3.058.467
_L22 462 406
$ 300 $
100,042
$ 281,039
$ 1,509,922
732
5,281
36,429
210,917
-
4,624
180
5,970
532,000
126,553
90,641
749,194
328,040
533,032
236,500
408,289
2,804,043
-
-
-
133,196
- - 2,723
2,723
- - 2,684,491
2,684,491
- - 44,613
44,613
-
97,320
- - -
6,415,416
5,712
(470,075) (236,500) (81,649)
10,274,892
(470,075) (236,500) 2,650,178
19,658,363
$ 62.957 $ $ 3.058,467 $
22.462.406
IR
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CITY OF ROSEMEAD
Governmental Funds
Reconciliation of the Balance Sheet of
Governmental Funds to the Statement of Net Position
June 30, 2013
Fund balances of governmental funds
Amounts reported for governmental activities in the statement of net position 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.
50,804,814
(617,980)
(656,565)
1,836,982
328,040
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. 344,933
Net position of governmental activities
$ 19,658,363
$ 71,698,587
The accompanying notes are an integral part of these financial statements.
19
CITY OF ROSEMEAD
Governmental Funds
Statement of Revenues, Expenditures, and Changes in Fund Balances
Fiscal Year Ended June 30, 2013
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
Total expenditures
Excess (deficiency) of revenues
over (under) expenditures
Special Revenue
Rosemead Housing Low & Moderate
Development Income Housing
General Corporation Asset
$ 16,602,329 $ - $ -
287,508 432,632 -
1,156,968 - -
989,166
691,548
280,219 415,571 -
687,152 5,971
20,694,890 854,174
3,809,752 - -
7,503,716 - -
3,011,588 - -
1,111,111 815,925 -
2,097,973 - -
5,326
17,539,466 815,925
3,155,424 38,249
Other financing sources (uses):
Transfers in (note 6)
-
- -
Transfers out (note 6)
(359,156)
- -
Transfer to Successor Agency (note 15)
(6,392,878)
Total other financing sources (uses)
(359,156)
(6,392,878)
Net change in fund balances
2,796,268
38,249 (6,392,878)
Fund balances (deficit), beginning of year
14,821,172
59,071 6,392,878
Fund balances (deficit), end of year
$ 17.617.440 $
97.320 $ -
The accompanying notes are an integral part of these financial statements.
20
Special Revenue Capital Proiecls
(477,162) (62,318) 3,665,873 24,399,514
$ (470.075) $ (236.5001 $ 2.650.178 $ 19.658.363
21
Non -Major
HOME
city
Governmental
Totals
$ - $
-
$ - $
16,602,329
180,864
599,758
4,898,520
6,399,282
-
-
-
1,156,968
-
1,040
82,548
1,072,754
-
-
-
691,548
-
-
937,405
937,405
-
-
14,653
710,443
693,123
180,864
600,798
5,933,126
28,263,852
-
-
178,404
3,988,156
-
-
270,322
7,774,038
-
211,945
3,761,675
6,985,208
173,777
-
504,414
2,605,227
-
-
34,854
2,132,827
3,121,343
3,126,669
173,777
3,333,288
4,749,669
26,612,125
7,087
(2,732,490)
1,183,457
1,651,727
-
2,558,308
214,107
2,772,415
-
-
(2,413,259)
(2,772,415)
(6,392,878)
2,558,308
(2,199,152)
(6,392,878)
7,087
(174,182)
(1,015,695)
(4,741,151)
(477,162) (62,318) 3,665,873 24,399,514
$ (470.075) $ (236.5001 $ 2.650.178 $ 19.658.363
21
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, 2013
Net change in fund balances -total governmental funds $ (4,741,151)
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) 976,545
Depreciation expense (net of Internal Service Fund) (3,221,736)
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 489,814
Compensated absences and retrospective deposits payable expenses reported in the
statement of activities do not require the use of current financial resources and,
therefore, are not reported as expenditures in governmental funds.
Decrease in retrospective deposits payable 184,649
Increase in compensated absences payable (54,206)
Revenues in the statement of activities that do not provide current financial resources are
not reported as revenues in the funds. (631,986)
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. 127,803
Change in net position of governmental activities $ (6,870,268)
The accompanying notes are an integral part of these financial statements.
22
CITY OF ROSEMEAD
Statement of Net Position
Internal Service Funds
June 30, 2013
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:
Lease payable - current (note 8)
Total current liabilities
Non - current liabilities:
Lease payable (note 8)
Total non - current liabilities
Total liabilities
Net position
Net investment in capital assets
Unrestricted
Total net position
$ 290,781
5,800
296,581
141
206,141
502,722
55,288
55,288
102,501
102,501
157,789
48,352
296,581
$ 344,933
The accompanying notes are an integral part of these financial statements.
23
CITY OF ROSEMEAD
Statement of Revenues, Expenses, and Changes in Fund Net Position
Internal Service Funds
Fiscal Year Ended June 30, 2013
Operating revenues:
Charges for services $ 286,100
Total operating revenues 286,100
Operating expenses:
Contractual services 94,621
Depreciation 55,849
Total operating expenses 150,470
Operating income 135,630
Non - operating revenues (expenses):
Interest expense (7,827)
Total non - operating revenues (expenses) (7,827)
Changes in net position 127,803
Net position, beginning of year 217,130
Net position, end of year $ 344,933
The accompanying notes are an integral part of these financial statements.
24
CITY OF ROSEMEAD
Statement of Cash Flows
Internal Service Funds
Fiscal Year Ended June 30, 2013
Cash flows from operating activities:
Cash received from users departments $ 289,544
Cash payments to suppliers for goods and services (95,874)
Net cash provided by operating activities 193,670
Cash flows from capital and related financing activities:
Principal paid on capital lease (53,022)
Interest paid on capital lease (7,827)
Net cash (used for) capital and related financing activities (60,849)
Net increase in cash and investments 132,821
Cash and investments, beginning of year
157,960
Cash and investments, end of year
$ 290,781
Reconciliation of operating income to net cash
provided by operating activities:
Operating income
$ 135,630
Adjustments to reconcile operating income to net
cash provided by operating activities:
Depreciation
55,849
(Increase) decrease in due from other funds
3,444
Increase (decrease) in accounts payable
(1,253)
Total adjustments
58,040
Net cash provided by operating activities
$ 193,670
The accompanying notes are an integral part of these financial statements.
25
CITY OF ROSEMEAD
Statement of Fiduciary Net Position
June 30, 2013
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 Position
Held in trust for the Successor Agency
Total net position (deficit)
Successor Agency
Private - purpose Agency
Trust Fund Fund
$ 12,005,715 $ 420,105
3,547 -
118,011 -
2,114,496 -
481,411 -
$ 14,723,180 $ 420,105
$ 5,978 $ -
- 420,105
382,098 -
86,729
118,011
1,860,022
39,906,700 -
42,359,538 $ 420,105
(27,636,358)
$ (27,636,358)
The accompanying notes are an integral part of these financial statements.
26
CITY OF ROSEMEAD
Statement of Changes in Fiduciary Net Position
Fiscal Year Ended June 30, 2013
Successor Agency
Private - purpose
Trust Fund
Additions
Property taxes $ 5,439,677
Investment earnings 179,640
Other 3,548
Total additions 5,622,865
Deductions
Administrative expenses
310,479
Affected taxing entities
961,565
Interest expense
1,909,437
Other payments of enforceable obligations
1,889,600
Total deductions
5,071,081
Transfer from City of Rosemead (note 15)
6,392,878
Change in net position
6,944,662
Net position (deficit), beginning of period
(34,581,020)
Net position (deficit), end of period
$ (27,636,358)
The accompanying notes are an integral part of these financial statements.
27
CITY OF ROSEMEAD
Notes to the Basic Financial Statements
Fiscal Year Ended June 30, 2013
(1) Summary of Significant Accounting Policies
(a) Reporting Entity
The City of Rosemead, California, ( "the City ") was incorporated in August 1959
under the general laws of the State of California. The City operates under an elected
Council /City Manager form of government. It provides a broad range of services to
its citizens, including general government, public safety, streets, sanitation and
health, cultural and park facilities, and social services.
Many of the functions often provided by municipal government are, in the City,
provided by special districts. Examples of some of these special districts, which
usually encompass areas larger than the City itself, are the Fire Protection District,
the Library District, and the County Flood Control District. Certain other
governmental functions are paid for by the City, but performed by a variety of other
public and private agencies under contract. Some of the contracts now in effect are
for police, solid waste disposal, 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) 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.
28
CITY OF ROSEMEAD
Notes to the Basic Financial Statements
Fiscal Year Ended June 30, 2013
(1) Summary of Significant Accounting Policies, (continued)
(a) Reporting Entity. (continued)
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.
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.
29
CITY OF ROSEMEAD
Notes to the Basic Financial Statements
Fiscal Year Ended June 30, 2013
(1) Summary of Significant Accounting Policies, (continued)
(b) Basis of Accounting and Measurement Focus, (continued)
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.
Fund Financial Statements
The underlying accounting system of the City is organized and operated on the basis
of separate funds, each of which is considered to be a separate accounting entity.
The operations of each fund are accounted for with a separate set of self - balancing
accounts that comprise its assets, liabilities, fund equity, revenues and expenditures
or expenses, as appropriate. Governmental resources are allocated to and
accounted for in individual funds based upon the purposes for which they are to be
spent and the means by which spending activities are controlled.
Fund financial statements for the primary government's governmental, proprietary,
and fiduciary funds are presented after the government -wide financial statements.
These statements display information about major funds individually and non major
funds in the aggregate for governmental and enterprise funds. Fiduciary statements
include financial information for fiduciary funds and similar component units.
Fiduciary funds of the City primarily represent assets held by the City in custodial
capacity for other individuals or organizations.
30
CITY OF ROSEMEAD
Notes to the Basic Financial Statements
Fiscal Year Ended June 30, 2013
(1) Summary of Significant Accounting Policies, (continued)
(b) Basis of Accounting and Measurement Focus (continued)
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.
Govemment- mandated and voluntary non - exchange transactions are recognized as
revenues when all applicable eligibility requirements have been met.
In the fund financial statements, governmental funds are presented using the current
financial resources measurement focus. This means that only current assets and
current liabilities are generally included on their balance sheets. The reported fund
balance (net current assets) is considered to be a measure of "available spendable
resources." Governmental fund operating statements present increases (revenues
and other financing sources) and decreases (expenditures and other financing uses)
in net current assets. Accordingly, they are said to present a summary of sources
and uses of "available spendable resources" during a period.
Non - current portions of long -term receivables due to governmental funds are
reported on their balance sheets in spite of their spending measurement focus.
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.
31
CITY OF ROSEMEAD
Notes to the Basic Financial Statements
Fiscal Year Ended June 30, 2013
(1) Summary of Significant Accounting Policies, (continued)
(b) Basis of Accounting and Measurement Focus, (continued)
Amounts expended to acquire capital assets are recorded as expenditures in the
year that resources were expended, rather than as fund assets. The proceeds of
long -term debt are recorded as 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 fund is custodial in nature (assets equal liabilities) and do not involve the
recording of City revenues and expenses.
(c) Major and Fiduciary Fund Types
The City's major governmental funds are as follows
General Fund - Accounts for all financial resources except those required to be
accounted for in another fund. These resources are devoted to financing the general
services that the City performs for its citizens.
Rosemead Housing 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.
HOME Program Fund - This fund is used to account for HOME Investment
Partnerships Program monies received to create and retain affordable housing.
City Capital Projects Fund - Accounts for financial resources to be used for the
acquisition and construction of major capital facilities within the City.
32
CITY OF ROSEMEAD
Notes to the Basic Financial Statements
Fiscal Year Ended June 30, 2013
(1) Summary of Significant Accounting Policies, (continued)
(c) Major and Fiduciary Fund Types, (continued)
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.
(d) Investments
For financial reporting purposes, investments are adjusted to their fair value
whenever the difference between fair value and the carrying amount is material.
Changes in fair value that occur during a fiscal year are recognized as investment
income reported for that fiscal year. Investment income includes interest earnings,
changes in fair value, and any gains or losses realized upon the liquidation or sale of
investments.
The City pools cash and investments of all funds, except for assets held by fiscal
agents. Each fund's share in this pool is displayed in the accompanying financial
statements as cash and investments. Investment income earned by the pooled
investments is allocated to the various funds based on each fund's average cash
and investment balance.
(e) Cash Equivalents
For purposes of the statement of cash flows, cash equivalents are defined as short -
term, highly liquid investments that are both readily convertible to known amounts of
cash or so near their maturity that they present insignificant risk of changes in value
because of changes in interest rates. Cash equivalents also represent the
proprietary funds' share in the cash and investment pool of the City of Rosemead.
Cash equivalents have an original maturity date of three months or less from the
date of purchase. For purposes of the statement of cash flows, the entire balance of
cash and investments on the combined balance sheet for the internal service fund is
considered cash and cash equivalents.
33
CITY OF ROSEMEAD
Notes to the Basic Financial Statements
Fiscal Year Ended June 30, 2013
(1)
Summary of Significant Accounting Policies, (continued)
(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.
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.
CITY OF ROSEMEAD
Notes to the Basic Financial Statements
Fiscal Year Ended June 30, 2013
(
Summary of Significant Accounting Policies, (continued)
(g) Compensated Absences, (continued)
The City allows full -time employees who have earned vacation time an opportunity
to have the City buy back up to 40 hours of vacation time per year.
(h) Prepaid Items
Prepaid items are reported in the governmental funds under the consumption
method and are offset by a nonspendable designation in fund balance to indicate
that they are not available for appropriation and are not expendable financial
resources.
(i) Fund Equity
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."
35
CITY OF ROSEMEAD
Notes to the Basic Financial Statements
Fiscal Year Ended June 30, 2013
(1) Summary of Significant Accounting Policies, (continued)
(i) Fund Equity. (continued)
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.
Q) Use of Estimates
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions
that affect certain reported amounts and disclosures. Accordingly, actual results
could differ from those estimates.
(k) Implementation of New Pronouncements
Beginning with the current fiscal year, the City implemented GASBS No. 63,
Financial Reporting of Deferred Outflows of Resources, Deferred Inflows of
Resources, and Net Position. This statement is designed to improve financial
reporting by standardizing the presentation of deferred outflows of resources and
deferred inflows of resources and their effects on the government's net position.
Deferred outflows of resources are transactions that result in the consumption of net
position in one period that are applicable to future periods and are not considered
assets as described by the statement. Deferred outflows of resources are required to
be presented separately after assets on the statement of net position.
Deferred inflows of resources are transactions that result in the acquisition of net
position in one period that are applicable to future periods and are not considered to
be liabilities as described by the statement. Deferred outflows of resources are
required to be presented separately after liabilities on the statement of net position.
The statement defines net position as the residual of all other elements presented in
a statement of financial position. It is the difference between (a) assets and deferred
outflows of resources and (b) liabilities and deferred inflows of resources.
For the years covered by these financial statements, the City had no transactions
that would be classified as deferred inflows or outflows of resources.
36
CITY OF ROSEMEAD
Notes to the Basic Financial Statements
Fiscal Year Ended June 30, 2013
(
Cash and Investments
Cash and investments as of June 30, 2013 are classified in the accompanying financial
statements as follows:
Statement of Net Position:
Cash and investments
Statement of Fiduciary Net Position:
Cash and investments
Total cash and investments
$ 19,928,301
12,425,820
$ 32,354,121
Cash and investments as of June 30, 2013 consist of the following:
Deposits Wth financial institutions
$ 13,367,256
Investments
18,986,865
Total cash and investments
$ 32,354,121
Investments Authorized by the California Government Code and the City's Investment
Policy
The table below identifies the investment types that are authorized for the City by the
California Government Code and the City's investment policy. The table also identifies
certain provisions of the California Government Code (or the City's investment policy, if
more restrictive) that address interest rate risk, credit risk, and concentration of credit risk.
This table does not address investments of debt proceeds held by bond trustee that are
governed by the provisions of debt agreements of the City, rather than the general
provisions of the California Government Code or the City's investment policy.
Investment Types
Authorized by State Law
Authorized
by
Investment Maximum
Policy Maturity*
Maximum Maximum
Percentage Investment in
of Portfolio* One Issuer*
US Treasury Obligations
Yes
5 years
None
None
US Agency Securities
Yes
5 years
None
None
Bankers Acceptances
Yes
180 days
20%
30%
Commercial Paper
Yes
180 days
15%
10%
Negotiable Certificates of Deposit
Yes
5 years
30%
None
Medium -Term Notes
Yes
5 years
30%
None
Money Market Mutual Funds
Yes
N/A
20%
10%
Local Agency Investment Funds (LAIF)
Yes
N/A
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, 2013
(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 Relating to Interest Rate Risk
Interest rate risk is the risk that changes in market interest rates will adversely affect the
fair value of an investment. Generally, the longer the maturity of an investment, the
greater the sensitivity of its fair value to changes in market interest rates. One of the ways
that the City manages its exposure to interest rate risk is by purchasing a combination of
shorter term and longer term investments and by timing cash flows from maturities so that
a portion of the portfolio is maturing or coming close to maturity evenly over time as
necessary to provide the cash flow and liquidity needed for operations.
Information about the sensitivity of the fair values of the City's investments (including
investments held by bond trustee) to market interest rate fluctuations is provided by the
following table that shows the distribution of the City's investments by maturity:
ON
Maximum
Maximum
Maximum
Percentage of
Imestment in
Authorized Imrnestment 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
Imestment Agreements
None
None
None
Disclosures Relating to Interest Rate Risk
Interest rate risk is the risk that changes in market interest rates will adversely affect the
fair value of an investment. Generally, the longer the maturity of an investment, the
greater the sensitivity of its fair value to changes in market interest rates. One of the ways
that the City manages its exposure to interest rate risk is by purchasing a combination of
shorter term and longer term investments and by timing cash flows from maturities so that
a portion of the portfolio is maturing or coming close to maturity evenly over time as
necessary to provide the cash flow and liquidity needed for operations.
Information about the sensitivity of the fair values of the City's investments (including
investments held by bond trustee) to market interest rate fluctuations is provided by the
following table that shows the distribution of the City's investments by maturity:
ON
CITY OF ROSEMEAD
Notes to the Basic Financial Statements
Fiscal Year Ended June 30, 2013
(2) Cash and Investments, (continued)
Investment Type
State investment pool
Certificates of deposits
US agency securities
Medium -term notes
Held by bond trustee:
Money market mutual funds
Certificates of deposit
Remaining Maturity
12 months 13 to 24 25 to 60
Total or less months months
$ 8,191,936 $ 8,191,936
4,334,905 651,148
2,694,061 -
1,479,743
498,807
3,184,950
2,694,061
1,479, 743
1,143,054 1,143,054 - -
1,143,166 561,427 480,173 101,566
Total $ 18,986,865 $ 10,547,565 $ 978,980 $7,460,320
Disclosures Relating to Credit Risk
Generally, credit risk is the risk that an issuer of an investment will not fulfill its obligation
to the holder of the investment. This is measured by the assignment of a rating by a
nationally recognized statistical rating organization. Presented below is the minimum
rating required by (where applicable) the California Government Code, the City's
investment policy, or debt agreements, and the actual rating as of year end for each
investment type.
minimum
Legal Rating as of Year End
Investment Type Total Rating A- A A+ AA+ AAA Not Rated
State investment pool
$ 8,191,936
WA
$ - $ - $ - $ -
$ - $ 8,191,936
Certificates of deposits
4,334,905
WA
- - - -
- 4,334,905
US agency securities
2,694,061
WA
- - - 2,694,061
- -
rulediurn-termnotes
1,479,743
A
480,327 263,637 492,257 243,522
- -
Hold by bond trustee:
Nbney market mutual funds
1,143,054
WA
- - - -
1,143,054 -
Certficatesofdeposit
1,143,166
WA
- - - -
- 1,143,166
Total
$18,986,865
$480,327 $263,637 $492,257 $2,937,583
$1,143,054 $13,670,007
39
CITY OF ROSEMEAD
Notes to the Basic Financial Statements
Fiscal Year Ended June 30, 2013
(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 Mortgage Corporation US Agency Securities $ 976,010
Federal National Mortgage Association US Agency Securities $ 1,229,371
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, 2013, 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.
40
CITY OF ROSEMEAD
Notes to the Basic Financial Statements
Fiscal Year Ended June 30, 2013
(3)
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
January 1
July 1
November 1 and February 1
December 10 and April 10
(4) Interfund Receivables and Payables
Current interfund receivables and payables balances at June 30, 2013 are as follows:
Due from other funds Due to other funds Amount
General Fund HOME $ 532,000
City Capital Projects Fund 126,553
Non -Major Governmental Funds 90,641
Total $ 749,194
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, 2013
(5) Intergovernmental Receivables and Payables
Current intergovernmental receivables and payables balances at June 30, 2013 are as
follows:
Due to City of Rosemead Due from Successor Agency Amount
Successor Agency General Fund $ 80,929
Internal Service Fund 5,800
Total $ 86,729
Intergovernmental amounts between the Successor Agency and the City are for
reimbursement of payroll expenses and short-term loans to cover operations.
(6) Interfund Transfers
Interfund transfers were as follows for the year ended June 30, 2013:
Transfers In
Transfers Out
Amount
City Capital Projects Fund General Fund $ 286,049
Non -Major Governmental Funds 2,272,259
2,558,308 (A)
Non -Major Governmental Funds General Fund 73,107
Non -Major Governmental Funds 141,000
214,107
Total
(A) To subsidize various programs and capital projects.
$ 2,772,415
42
CITY OF ROSEMEAD
Notes to the Basic Financial Statements
Fiscal Year Ended June 30, 2013
(7) Capital Assets
Capital asset activity was as follows for the year ended June 30, 2013:
Total accumulated depreciation (35,474,387) (3,277,585) 27,524 (38,
Total capital assets, being depreciated, net 50,388,196 (2,122,078) (184,876) 48,081,242
Govemmental activities capital assets, net
of accumulated depreciation $53,311,99 $ (2,116, $ (184,8 $51,010,955
43
Beginning
Ending
Governmental activities:
ba
Additions
Deletions
ba
Capital assets, not being depreciated:
Land
$ 2,912,284
$ -
$ -
$ 2,912,284
Construction in progress
11,515
5,914
-
17,429
Total capital assets, not
being depreciated
2,923,799
5,914
-
2,929,713
Capital assets, being depreciated:
Buildings
21,500,598
368,557
(212,400)
21,656,755
Improvements other than buildings
1,265,700
-
-
1,265,700
Machinery and equipment
474,756
68,776
-
543,532
Autos and trucks
897,432
-
-
897,432
Furniture and office equipment
1,118,088
-
-
1,118,088
Infrastructure
60,606,009
718,174
-
61,324,183
Total capital assets, being depreciated
85,862,583
1,155,507
(212,400)
86,805,690
Less accumulated depreciation for:
Buildings
(6,468,368)
(818,546)
27,524
(7,259,390)
Improvements other than buildings
(739,834)
(95,755)
-
(835,589)
Machinery and equipment
(359,505)
(43,151)
-
(402,656)
Autos and trucks
(516,087)
(166,573)
-
(682,660)
Furniture and office equipment
(1,083,843)
(9,459)
-
(1,093,302)
Infrastructure
(26,306,750)
(2,144,101)
-
(28,450,851)
Total accumulated depreciation (35,474,387) (3,277,585) 27,524 (38,
Total capital assets, being depreciated, net 50,388,196 (2,122,078) (184,876) 48,081,242
Govemmental activities capital assets, net
of accumulated depreciation $53,311,99 $ (2,116, $ (184,8 $51,010,955
43
CITY OF ROSEMEAD
Notes to the Basic Financial Statements
Fiscal Year Ended June 30, 2013
(7)
(
Capital Assets, (continued)
Depreciation expense was charged to functions /programs of the primary government as
follows:
Governmental activities:
General government
Public safety
Public works
Community development
Parks and recreation
$ 45,739
36,140
2,706,153
14,528
475,025
Total depreciation expense
Changes in Long -Term Liabilities
$ 3,277,585
Long -term debt consists of the following at June 30, 2013:
Beginning Ending Due in
Governmental activities: Balance Additions Deletions Balance One Year
Computer lease $
210,811
$ - $ 53,022 $
157,789 $
53,022
Retrospective deposit
841,214
- 184,649
656,565
65,660
Compensated absences
563,774
285,055 230,849
617,980
265,731
Total long -term debt $ 1,615,799 $285,055 $ 468,520 $ 1,432,334 $ 384,413
The City records expenditures related to compensated absences through the City's
General Fund.
44
CITY OF ROSEMEAD
Notes to the Basic Financial Statements
Fiscal Year Ended June 30, 2013
(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, 2013 was $157,789.
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
2014
2015
2016
Subtotal
Less amount representing interest
Present value of future lease payments
$ 60,849
60,849
45,637
167,335
(9.546)
$ 157,789
Accumulated depreciation on assets purchased through lease agreements are as follows:
Governmental
Activities
Assets:
Improvements other than buildings $ 270,125
Less: accumulated depreciation (115,767)
Total $ 154,358
45
CITY OF ROSEMEAD
Notes to the Basic Financial Statements
Fiscal Year Ended June 30, 2013
(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 17
Active plan members 63
Total 80
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 2012 -13, the City contributed $822,547 to the plan.
46
CITY OF ROSEMEAD
Notes to the Basic Financial Statements
Fiscal Year Ended June 30, 2013
(
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
Interest on net OPEB obligation
Adjustment to annual required contribution
Annual OPEB cost (expense)
Contributions made
Increase in net OPEB obligation
Net OPEB obligation - beginning of year
Net OPEB obligation - end of year
$ 309,960
(80,830)
103,603
332,733
(822,547)
(489,814)
(1,347,168)
$ (1,836,982)
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 2013 and the two preceding years were as follows:
47
Percentage
Net
of Annual
OPEB
Fiscal
Annual OPEB
OPEB Cost.
Obligation
Year
Cost
Contributed
(Asset)
6/30/2011
$
270,403
298%
$ (861,137)
6/30/2012
$
323,478
250%
$ (1,347,168)
6/3012013
$
332,733
250%
$ (1,836,982)
47
CITY OF ROSEMEAD
Notes to the Basic Financial Statements
Fiscal Year Ended June 30, 2013
(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, 2013, 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 by 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
Description of 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 lines of coverage. The California JPIA 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 nine - member
Executive Committee.
48
CITY OF ROSEMEAD
Notes to the Basic Financial Statements
Fiscal Year Ended June 30, 2013
(10) Risk Management, (continued)
Self- Insurance Programs of the Authority
Each member pays an annual contribution to cover estimated losses for the coverage
period. This initial funding is paid at the beginning of the coverage period. After the close
of the coverage period, outstanding claims are valued. A retrospective deposit
computation is then conducted annually thereafter until all claims incurred during the
coverage period are closed on a pool -wide basis. This subsequent cost re- allocation
among members based on actual claim development can result in adjustments of either
refunds or additional deposits required.
The total funding requirement for self- insurance programs is estimated using actuarial
models and pre- funded through the annual contribution. Costs are allocated to individual
agencies based on exposure (payroll) and experience (claims) relative to other members
of the risk - sharing pool. Additional information regarding the cost allocation methodology
is provided below.
Liability
In the liability program claims are pooled separately between police and non - police
exposures. (1) The payroll of each member is evaluated relative to the payroll of other
members. A variable credibility factor is determined for each member, which establishes
the weight applied to payroll and the weight applied to losses within the formula. (2) The
first layer of losses includes incurred costs up to $30,000 for each occurrence and is
evaluated as a percentage of the pool's total incurred costs within the first layer. (3) The
second layer of losses includes incurred costs from $30,000 to $750,000 for each
occurrence and is evaluated as a percentage of the pool's total incurred costs within the
second layer. (4) Incurred costs in excess of $750,000 up to the reinsurance attachment
point of $5 million are distributed based on the outcome of cost allocation within the first
and second loss layers. (5) Costs of covered claims from $5 million to $10 million are
paid under a reinsurance contract subject to a $2.5 million annual aggregate deductible.
The $2.5 million annual aggregate deductible is fully covered under a separate policy; as
such no portion of it is retained by the Authority. Costs of covered claims from $10 million
to $15 million are paid under two reinsurance contracts subject to a combined $3 million
annual aggregate deductible. The $3.0 million annual aggregate deductible is fully
retained by the Authority. (6) Costs of covered claims from $15 million up to $50 million
are covered through excess insurance policies.
The overall coverage limit for each member including all layers of coverage is $50 million
per occurrence.
Costs of covered claims for subsidence losses are paid by reinsurance and excess
insurance with a pooled sub -limit of $25 million per occurrence. This $25 million
subsidence sub -limit is composed of (a) $5 million retained within the pool's SIR, (b) $10
million in reinsurance and (c) $10 million in excess insurance. The excess insurance layer
has a $10 million annual aggregate.
49
CITY OF ROSEMEAD
Notes to the Basic Financial Statements
Fiscal Year Ended June 30, 2013
(10) Risk Management, (continued)
Self- Insurance Programs of the Authority, (continued
Workers' Compensation
In the workers' compensation program claims are pooled separately between public safety
(police and fire) and non - public safety exposures. (1) The payroll of each member is
evaluated relative to the payroll of other members. A variable credibility factor is
determined for each member, which establishes the weight applied to payroll and the
weight applied to losses within the formula. (2) The first layer of losses includes incurred
costs up to $50,000 for each occurrence and is evaluated as a percentage of the pool's
total incurred costs within the first layer. (3) The second layer of losses includes incurred
costs from $50,000 to $100,000 for each occurrence and is evaluated as a percentage of
the pool's total incurred costs within the second layer. (4) Incurred costs in excess of
$100,000 up to the reinsurance attachment point of $2 million are distributed based on the
outcome of cost allocation within the first and second loss layers. (5) Costs of covered
claims from $2 million up to statutory limits are paid under a reinsurance policy.
Protection is provided per statutory liability under California Workers' Compensation Law.
Employer's Liability losses are pooled among members to $2 million. Coverage from $2
million to $5 million is purchased as part of a reinsurance policy, and Employer's Liability
losses from $5 million to $10 million are pooled among members.
Purchased Insurance
Pollution Legal Liability Insurance
The City of Rosemead participates in the pollution legal liability insurance program
(formerly called environmental 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 million for the 3 -year period from July
1, 2011 through July 1, 2014. Each member of the Authority has a $10 million sub -limit
during the 3 -year term of the policy.
Adequacy of Protection
During the past three fiscal years, none of the above programs of protection experienced
settlements or judgments that exceeded pooled or insured coverage. There were also no
significant reductions in pooled or insured liability coverage in 2012 -13.
As of June 30, 2013 the City had retrospective deposits payable to the Authority in the
amount of $656,565. 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 Position.
50
CITY OF ROSEMEAD
Notes to the Basic. Financial Statements
Fiscal Year Ended June 30, 2013
(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.
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, 2013 were 26.660% and 10.238 %,
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, 2011, 2012, and 2013 were $1,191,665, $1,299,866 and $1,149,116,
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 II), a single - employer defined benefit pension plan
administered by Phase II Systems. The plan II provides a supplemental retirement benefit
of 1 % for each year of service to plan members and beneficiaries. Employees with at least
20 years of service and City Council members with at least 20 years of service are eligible
to participate at age 55 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 2012 and 2013
was 3.73 %.
51
CITY OF ROSEMEAD
Notes to the Basic Financial Statements
Fiscal Year Ended June 30, 2013
(11)
Retirement Plan, (continued)
Annual Pension Cost: For fiscal year ended June 30, 2013, the City's annual pension cost
of $113,173 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
6/30/2011 $ 69,010
6/30/2012 $ 136,440
6/30/2013 $ 113,173
100% $
100% $
100% $
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 Living 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.
52
CITY OF ROSEMEAD
Notes to the Basic Financial Statements
Fiscal Year Ended June 30, 2013
(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.
The City is a defendant in certain legal actions arising in the normal course of operations.
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, 2013:
Major Governmental Fund:
Capital Projects:
City Capital Projects $ 236,500
Special Revenue:
HOME Program 470,075
Non -Major Fund:
Special Revenue:
Proposition C
81,649
The fund deficits noted above primarily relate to expenditures charged to projects during
the fiscal year ended June 30, 2013, which were submitted for reimbursement.
53
CITY OF ROSEMEAD
Notes to the Basic Financial Statements
Fiscal Year Ended June 30, 2013
(14) Expenditures in Excess of Appropriations
Expenditures exceeded appropriations in the following funds:
Fund
Rosemead Housing
Development Corporation
Proposition C
State Gas Tax
Air Quality Management District
Measure R
(15) Successor Agency
Budget Actual Variance
$ 394,500 $ 815,925 $ (421,425)
211,401 225,547 (14,146)
912,800 933,604 (20,804)
- 427 (427)
258,900 271,795 (12,895)
Successor Agency Long -Term Debt
The debt of the Successor Agency as of June 30, 2013 is as follows:
54
Beginning
Ending
Due in
Successor Agency:
Balance Additions
Deletions
Balance
One Year
Bonds:
Tax Allocation Bonds,
Series 2006A
$ 8,870,000 $ -
$ 965,000
$ 7,905,000
$ 1,000,000
Tax Allocation Bonds,
Series 2006B
23,635,000 -
80,000
23,555,000
85,000
Tax Allocation Bonds,
Series 2010A
11,030,000 -
750,000
10,280,000
770,000
Subtotal bonds
43,535,000 -
1,795,000
41,740,000
1,855,000
Deferred amounts:
Unamortized bond
premiums
198,018 -
19,802
178,216
19,802
Discount on issuance
(166,274) -
(14,780)
(151,494)
(14,780)
Total bonds
43,566,744 -
1,800,022
41,766,722
1,860,022
Total long -term debt
$43,566,744 $ -
$1,800,022
$41,766,7
$ 1,860,022
54
CITY OF ROSEMEAD
Notes to the Basic Financial Statements
Fiscal Year Ended June 30, 2013
(15) Successor Agency, (continued)
Successor Agency Long -Term Debt. (continued)
Future debt service requirements are as follows:
Fiscal years ending
June 30, Principal Interest
2014
$ 1,855,000 $
1,790,511
2015
1,920,000
1,718,574
2016
1,995,000
1,635,579
2017
2,085,000
1,545,190
2018
2,180, 000
1,453, 346
2019 -2023
12,350,000
5,755,956
2024 -2028
8,320,000
3,347,689
2029 -2033
8,990,000
1,497,625
2034
2,045,000
45,266
Totals
$ 41,740,000 $
18,789,736
Tax Allocation Bonds, Series 2006A
On March 9, 2006, the Commission issued tax allocation bonds in the amount of
$14,005,000 (Series 2006A) to: (1) refund a portion of the Commission's outstanding
Series 1993A bonds and (2) to finance redevelopment activity in Redevelopment Project
Area No.1. The bonds bear interest ranging from 3.25% to 5.00% and mature in annual
installments of $780,000 to $1,250,000 on various dates through October 1, 2022. The
Commission purchased a surety bond in lieu of cash reserve in the amount of $1,323,238.
Portions of the bonds are subject to early redemption, at the option of the Commission,
beginning October 1, 2017. Bond premiums are amortized over the life of the bonds. The
unamortized balance as of June 30, 2013 was $178,216. As of June 30, 2013 the
outstanding balance was $7,905,000.
Tax Allocation Bonds, Series 2006B
In December 2006, the Commission issued $24,230,000 in Project Area No.1 Tax
Allocation Bonds. The bonds mature in amounts ranging from $70,000 to $1,430,000 with
interest rates ranging from 3.25% to 4.25% through October 1, 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, 2013 the outstanding balance
was $23,555,000.
55
CITY OF ROSEMEAD
Notes to the Basic Financial Statements
Fiscal Year Ended June 30, 2013
(15) Successor Agency, (continued)
Successor Aaencv Lona -Term Debt. (continued
Tax Allocation Bonds. Series 2010A
In July 2010, the Commission issued $11,230,000 in Merged Project Area Tax Allocation
Bonds. The bonds mature in amounts ranging from $200,000 to $1,135,000 with interest
rates ranging from 3.00% to 5.00% through December 1, 2023. The bonds were issued to
provide funds to finance the costs of certain redevelopment projects within the Merged
Project Area including infrastructure improvements and the acquisition of land. Principal is
payable annually on December 1, beginning on December 1, 2011. Interest is payable
semi - annually on June 1 and December 1. Per the bond indenture, a reserve is required
to be maintained. At June 30, 2013, the balance held in the reserve account was
$1,143,054. As of June 30, 2013 the outstanding balance was $10,280,000.
Transfer from City of Rosemead
Under State law, the Rosemead Community Development Commission (Commission)
was required to set aside a portion of its property tax increment revenue for low and
moderate income housing. The Commission made findings that, for the years ended June
30, 1986 through 1991, it was 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. Due to the dissolution of the former
Rosemead Community Development Commission,. the Department of Finance has
determined the accumulated set aside amount not to be an enforceable obligation. As of
June 30, 2013, the outstanding balances of the Low and Moderate Income Housing Fund
were transferred to the Successor Agency.
56
Required Supplementary Information
57
CITY OF ROSEMEAD
Note to the Required Supplementary Information
Fiscal Year Ended June 30, 2013
(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.
58
CITY OF ROSEMEAD
General Fund
Schedule of Revenue, Expenditures, and Changes in Fund Balances - Budget and Actual
Fiscal Year Ended June 30, 2013
Revenues:
Taxes
Intergovernmental
Licenses and permits
Charges for services
Fines, forfeitures and penalties
Investment income
Other
Total revenues
Expenditures:
Current:
General government
Public safety
Public works
Community development
Park and recreation
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
Original Final
Budget Budget
Variance
Positive
Actual (Negative)
$ 13,931,200 $ 14,016,200 $ 16,602,329 $ 2,586,129
182,600
274,695
287,508
12,813
1,128,300
1,128,300
1,156,968
28,668
883,700
883,700
989,166
105,466
485,300
485,300
691,548
206,248
154,000
337,400
280,219
(57,181)
584,400
584,400
687,152
102,752
17,349,500 17,709,995 20,694,890 2,984,895
3,417,800
4,215,285
3,809,752
405,533
7,516,200
7,526,000
7,503,716
22,284
2,759,100
2,869,100
3,011,588
(142,488)
1,253,200
1,253,200
1,111,111
142,089
2,406,700
2,406,700
2,097,973
308,727
-
-
5,326
(5,326)
17,353,000
18,270,285
17,539,466
730,819
(3,500) (560,290) 3,155,424 3,715,714
(150,000) (359,156) (209,156)
(150,000) (359,156) (209,156)
(3,500) (710,290) 2,796,268 3,506,558
14, 821,172 14,821,172 14, 821,172
$ 14,817,672 $ 14,110,882 $ 17,617,440 $ 3,506,558
59
CITY OF ROSEMEAD
Rosemead Housing Development Corporation
Schedule of Revenue, Expenditures, and Changes in Fund Balances - Budget and Actual
Fiscal Year Ended June 30, 2013
Revenues:
Intergovernmental
Investment income
Other
Total revenues
Expenditures:
Current:
Community development
Total expenditures
Net change in fund balance
Fund balance, beginning of year
Fund balance, end of year
Original
Budget
Final
Budget
Actual
Variance
Positive
(Negative)
$ -
$ -
$ 432,632
$ 432,632
412,500
412,500
415,571
3,071
5,700
5,700
5,971
271
418,200
418,200
854,174
435,974
394,500
394,500
815,925
(421,425)
394,500
394,500
815,925
(421,425)
23,700
23,700
38,249
14,549
59,071 59,071 59,071
$ 82,771 $ 82,771 $ 97,320 $ 14,549
ME
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, 2013
Revenues:
Intergovernmental
Total revenues
Expenditures:
Current:
Community development
Total expenditures
Net change in fund balance
Fund balance (deficit), beginning of year
Variance
Final Positive
Budget Actual (Negative)
$ 688,300 $ 180,864 $ (507,436)
.�
180,864 (507,436)
686,000 173,777 512,223
686,000 173,777 512,223
2,300 7,087 4,787
(477,162) (477,162)
Fund balance (deficit), end of year $ (474,862) $ (470,075) $ 4,787
61
CITY OF ROSEMEAD
Required Supplementary Information
Fiscal Year Ended June 30, 2013
(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
Unfunded
UAAL as a
UAAL as a
Actuarial
Actuarial Accrued
Value of
Funded
AAL
Funded
Covered
% of Covered
Valuation
Liability (AAL)
Assets
Payroll
(UAAL)
Ratio
Payroll
Payroll
Date
(a)
(b)
((a -b) /c)
(a - b)
(b / a)
(c)
((a -b) /c)
1/1/2008
$ 3,548,605
$ -
$ 3,548,605
0%
7/1/2006
$ 2,973,299
$ 1,438,282
$
1,535,017
48.37%
$2,367,310
64.84%
7/1/2008
$ 2,242,154
$ 1,910,854
$
331,300
85.22%
$3,747,667
8.84%
7/1/2010
$ 2,778,943
$ 1,833,895
$
945,048
65.99%
$3,678,700
25.69%
(3) Other Post Employment Benefits Plan
Schedule of Funding Progress
62
Entry Age
Actuarial
Unfunded
UAAL as a
Actuarial
Actuarial Accrued
Value of
AAL
Funded
Covered
% of Covered
Valuation
Liability (AAL)
Assets
(UAAL)
Ratio
Payroll
Payroll
Date
(a)
(b)
(a - b)
(b / a)
(c)
((a -b) /c)
1/1/2008
$ 3,548,605
$ -
$ 3,548,605
0%
$ 1,682,985
211%
1/1/2011
$ 3,378,875
$ 615,576
$ 2,763,299
18%
$ 3,876,698
71%
N/A
N/A
N/A
N/A
N/A
N/A
N/A
62
Other Supplementary Information
63
(This 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.
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.
Street Lighting Fund - This fund is used to account for monies collected by ad valorem property
tax based on $0.2495 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.
64
CITY OF ROSEMEAD
Non -Major Governmental Funds
Combining Balance Sheet
June 30, 2013
Revenue Funds
CDBG Proposition Proposition
Grant A C
Assets
Cash and investments $ - $ 185,004 $
Receivables:
Accounts 129,696
$ 129,696 $ 185,004 $
Liabilities and Fund Balances
Liabilities:
Accounts payable and accrued liabilities $ 43,701 $ 75,584 $ 13,497
Accrued salaries and benefits 16,808 7,906 2,085
Retentions payable - - -
Due to other funds 24,574 66,067
Total liabilities
Fund balances:
Restricted for:
Public safety
Public works
Community services
Unassigned
Total fund balances (deficit)
Total liabilities and fund balances
85,083 83,490 81,649
- 101,514
44,613 -
- (81,649)
44,613 101,514 (81,649)
$ 129,696 $ 185,004 $
65
Soecial Revenue Funds
Federal
Air Quality
Highway State Gas
Management
Street
Grant Tax
District
Lighting
$ $ 43,922
$ 158,637
$ 1,958,557
8,000
16,900
20,888
$ $ 51.922
$ 175,537
$ 1,979,445
$ $ 47,215 $ $ 62,187
4,352 2,950
180 -
51,747 65,137
175 175,537 1,914,308
175 175,537 1,914,308
$ $ 51,922 $ 175,537 $ 1,979.445
(continued)
..
CITY OF ROSEMEAD
Non -Major Governmental Funds
Combining Balance Sheet, Continued
June 30, 2013
Assets
Cash and investments
Receivables:
Accounts
Special Revenue Funds
Narcotics Measure
Seizure R Totals
$ 2,723 $ 534,140 $ 2,882,983
175,484
$ 2,723 $ 534,140 $ 3,058,467
Liabilities and Fund Balances
Liabilities:
Accounts payable and accrued liabilities
Accrued salaries and benefits
Retentions payable
Due to other funds
Total liabilities
Fund balances:
Restricted for:
Public safety
Public works
Community services
Unassigned
Total fund balances (deficit)
Total liabilities and fund balances
$ $ 38,855 $ 281,039
2,328 36,429
- 180
90,641
41,183 408,289
2,723 - 2,723
- 492,957 2,684,491
- 44,613
(81,649)
2,723 492,957 2,650,178
$ 2,723 $ 534,140 $ 3,058,467
67
(This page intentionally left blank)
CITY OF ROSEMEAD
Non -Major Governmental Funds
Combining Statement of Revenues, Expenditures, and Changes in Fund Balances
Fiscal Year Ended June 30, 2013
Revenues:
Intergovernmental
Charges for services
Special assessments
Investment income
Total revenues
Expenditures:
Current:
General government
Public safety
Public works
Community development
Parks and recreation
Total expenditures
Excess (deficiency) of revenues
over (under) expenditures
Other financing sources (uses):
Transfers in
Transfers out
Total other financing sources (uses)
Net change in fund balances
Fund balances (deficit), beginning of year
Fund balances (deficit), end of year
Special Revenue Funds
CDBG
Proposition
Proposition
Grant
A
C
$ 1,229,062
$ 892,472
$ 801,920
12,767
33,590
36,191
905
-
1,241,829
926,967
838,111
7,827 122,527 -
249,274 - 20,621
- 1,736,538 204,926
504,414 - -
34,854
796,369 1,859,065 225,547
445,460 (932,098) 612,564
(414,228)
- (414,228)
445,460 (932,098) 198,336
(400,847) 1,033,612 (279,985)
$ 44,613 $ 101,514 $ (81,649)
W
Special Revenue Funds
Federal Air Quality
Highway State Gas Management Street
Grant Tax District Lighting
$ 1,355,550 $ 64,970 $
- - 937,405
765 390 10,602
1,356,315 65,360 948,007
2,045 - 11,003
- 427 -
931,559 - 651,859
933,604 427 662,862
422,711 64,933 285,145
72,093 142,014
- (993,451) (2,063) (495,333)
72,093 (851,437) (2,063) (495,333)
72,093 (428,726) 62,870 (210,188)
(72,093) 428,901 112,667 2,124,496
$ $ 175 $ 175,537 $ 1,914,308
continue
.•
CITY OF ROSEMEAD
Non -Major Governmental Funds
Combining Statement of Revenues, Expenditures, and Changes in Fund Balances, Continued
Fiscal Year Ended June 30, 2013
Revenues:
Intergovernmental
Charges for services
Special assessments
Investment income
Total revenues
Expenditures:
Current:
General government
Public safety
Public works
Community development
Parks and recreation
Total expenditures
Excess (deficiency) of revenues
over (under) expenditures
Other financing sources (uses):
Transfers in
Transfers out
Total other financing sources (uses)
Net change in fund balances
Fund balances (deficit), beginning of year
Fund balances (deficit), end of year
Special Revenue Funds
Narcotics Measure
Seizure R Totals
$ $ 554,546 $ 4,898,520
- 82,548
- 937,405
8 1,983 14,653
8 556,529 5,933,126
35,002 178,404
- 270,322
236,793 3,761,675
- 504,414
- 34,854
271,795 4,749,669
8 284,734 1,183,457
214,107
(508,184) (2,413,259)
(508,184) (2,199,152)
8 (223,450) (1,015,695)
2,715 716,407 3,665,873
$ 2,723 - I -- A92 .957 $ 2,650,178
70
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, 2013
Revenues:
Intergovernmental
Charges for services
Total revenues
Expenditures:
Current:
General government
Public safety
Community development
Parks and recreation
Total expenditures
Net change in fund balance
Fund balance (deficit), beginning of year
Fund balance (deficit), end of year
Final
Budget
Actual
Variance
Positive
(Negative)
$ 848,000 $ 1,229,062 $ 381,062
94,600 12,767 (81,833)
942,600 1,241,829 299,229
7,900
7,827
73
226,400
249,274
(22,874)
645,000
504,414
140,586
43,300
34,854
8,446
922,600
796,369
126,2
20,000
445,460
425,460
(400,847)
(400,847)
-
$ (380,847), $ 44,613 $ 425,460
71
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, 2013
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
Final
Budget
$ 854,800
12,300
2,000
869,100
143,100
Variance
20,573
Positive
Actual
(Negative)
$ 892,472
$ 37,672
33,590
21,290
905
(1,095)
926,967
57,867
143,100
122,527
20,573
1,803,267
1,736,538
66,729
1,946,367
1,859,065
87,302
(1,077,267) (932,098) 145,169
1,033,612 1,033,612 -
Fund balance, end of year $ (43,655) $ 101,514 $ 145,169
72
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, 2013
Revenues:
Intergovernmental
Charges for services
Investment income
Total revenues
Expenditures:
Current:
Public safety
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 (deficit), beginning of year
17,200
20,621
Variance
Final
204,926
Positive
Budget
Actual
(Negative)
$ 709,000
$ 801,920
$ 92,920
51,500
36,191
(15,309)
6,700
-
(6,700)
767,200
838,111
70,911
17,200
20,621
(3,421)
194,201
204,926
(10,725)
211,401
225,547
(14,
555,799
612,564
56,765
(450,000)
(414,228)
35,772
(450,000)
(414,228)
35,772
105,799
198,336
92,537
(279,985)
(279,985)
-
Fund balance (deficit), end of year $ (174,186) $ (81,649) $ 92,537
73
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, 2013
Total revenues
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 (deficit), beginning of year
Fund balance (deficit), end of year
Variance
Final Positive
Budget Actual (Negative)
72,093 72,093
72,093 72,093
72,093 72,093
(72,093) (72,093) -
$ (72,093) $ $ 72,093
74
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, 2013
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 in
Transfers out
Total other financing sources (uses)
Net change in fund balance
Fund balance, beginning of year
Variance
Final Positive
Budget Actual (Negative)
$ 1,500,600 $ 1,355,550 $ (145,050)
19,000 765 (18,235)
1,519,600 1,356,315 (163,285)
- 2,045 (2,045)
912,800 931,559 (18,759)
912,800 933,604 (20,804)
606,800
422,711
(184,089)
-
142,014
142,014
(1,400,000)
(993,451)
406,549
(1,400,000)
(851,437)
548,563
(793,200)
(428,726)
364,474
428,901
428,901
-
Fund balance, end of year $ (364,299) $ 175 $ 364,474
75
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, 2013
Revenues:
Intergovernmental
Investment income
Total revenues
Expenditures:
Current:
Public safety
Total expenditures
Excess (deficiency) of revenues
over (under) expenditures
Other financing sources (uses):
Transfers out
Total other financing sources (uses)
Net change in fund balance
Fund balance, beginning of year
Variance
Final Positive
Budget Actual (Negative)
$ 66,000 $ 64,970 $ (1,030)
500 390 (110)
66,500 65,360 (1,140)
427 (427)
427 (427)
66,500 64,933 (1,567)
(2,063) (2,063)
(2,063) (2,063)
66,500
112,667
62,870
112,667
(3,630)
Fund balance, end of year $ 179,167 $ 175,537 $ (3,630)
76
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, 2013
Revenues:
Special Assessments
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
11,000
11,003
Variance
Final
651,859
Positive
Budget
Actual
(Negative)
$ 750,000
$ 937,405 $
187,405
10,400
10,602
202
760,400
948,007
187,607
11,000
11,003
(3)
712,701
651,859
60,842
723,701
662,862
60,839
3 6,699
285,14
248,446
(390,400)
(495,333)
(104,933)
(390,400).
(495,333)
(104,933)
(353,701)
(210,188)
143,513
2,124,496
2,124,496
-
Fund balance, end of year $ 1,770,795 $ 1,914,308 $ 143,513
77
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, 2013
Revenues:
Investment income
Total revenues
Total expenditures
Net change in fund balance
Fund balance, beginning of year
Variance
Final Positive
Budget Actual (Negative)
$ 100 $ 8 $ (92)
100 8 (92)
100 8 (92)
2,715 2,715 -
Fund balance, end of year $ 2,815 $ 2,723 $ (92)
W
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, 2013
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
59,000
35,002
Variance
Final
236,793
Positive
Budget
Actual
(Negative)
$ 458,600
$ 554,546
$ 95,946
3,100
1,983
(1,117)
461,700
556,529
94,829
59,000
35,002
23,998
199,900
236,793
(36,893)
258,900
271,795
(12,895)
202,800
284,734
81,934
(425,000)
(508,184)
(83,184)
(425,000).
(508,184)
( 83,184)
(222,200)
(223,450)
(1,250)
716,407
716,407
Fund balance, end of year $ 494,207 $ 492,957 $ (1,250)
79
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, 2013
Revenues:
Intergovernmental
Charges for services
Total revenues
Expenditures:
Current:
Public works
Capital outlay
Total expenditures
Excess (deficiency) of revenues
over (under) expenditures
Variance
Final Positive
Budget Actual (Negative)
$ 2,575,000 $ 599,758 $ (1,975,242)
- 1,040 1,040
2,575,000 600,798 (1,974,202)
235,000 211,945 23,055
5,000,000 3,121,343 1,878,657
5,235,000 3,333,288 1,901,712
(2,660,000) (2,732,490) (72,490)
Other financing sources (uses):
Transfers in 2,915,400 2,558,308 (357,092)
Total other financing sources (uses) 2,915,400 2,558,308 (
Net change in fund balance
Fund balance (deficit), beginning of year
255,400
(174,182)
(429,582)
(62,318)
(62,318)
Fund balance (deficit), end of year $ 193,082 $ (236,500) $ (429,582)
f
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.
(This page intentionally left blank)
CITY OF ROSEMEAD
Combining Statement of Net Position
Internal Service Funds
June 30. 2013
Assets
Current assets:
Cash and investments
Due from Successor Agency
Equipment Technology
Replacement Replacement Total
$ 266,696
$ 24,085 $ 290,781
5,800 5,800
Total current assets 266,696 29,885 296,581
Non - current assets:
Capital assets:
Other capital assets, net 51,783 154,358 206,141
Total non- current assets
51,783
154,358
206,141
Total assets
318,479
184,243
502,722
Liabilities
Current liabilities:
Lease payable - current
-
55,288
55,288
Total current liabilities
-
55,288
55,288
Non - current liabilities:
Lease payable
-
102,501
102,501
Total non - current liabilities
-
102,501
102,501
Total liabilities
-
157,789
157,789
Net position
Net investment in capital assets
51,783
(3,431)
48,352
Unrestricted
266,696
29,885
296,581
Total net position
$ 318,479 $
26,454 $
344,933
99
CITY OF ROSEMEAD
Combining Statement of Revenues, Expenses, and Changes in Fund Net Position
Internal Service Funds
Fiscal Year Ended June 30, 2013
Operating revenues:
Charges for services
Total operating revenues
Operating expenses:
Contractual services
Depreciation
Total operating expenses
Operating income
Non - operating revenues (expenses):
Interest expense
Total non - operating revenues (expenses)
Changes in net position
Net position, beginning of year
Equipment Technology
Replacement Replacement Total
$ 123,100 $ 163,000 $ 286,100
123,100 163,000 286,100
730 93,891 94,621
17,260 38,589 55,849
17,990 132,480 150,470
105,110 30,520 135,630
(7,827) (7,827)
(7,827) (7,827)
105,110 22,693 127,803
213,369 3,761 217,130
Net position, end of year $ 318,479 $ 26,454 $ 344,933
A
CITY OF ROSEMEAD
Combining Statement of Cash Flows
Internal Service Funds
Fiscal Year Ended June 30, 2013
Cash flows from operating activities:
Cash received from users departments
Cash payments to suppliers for goods and services
Net cash provided by operating activities
Cash flows from capital and related financing activities:
Principal paid on capital lease
Interest paid on capital lease
Net cash (used for) capital and related financing activities
Net increase in cash and investments
Equipment Technology
Replacement Replacement Total
$ 123,100 $ 166,444 $ 289,544
(730) (95,144) (95,874)
122,370 71,300 193,670
(53,022) (53,022)
(7,827) (7,827)
(60,849) (60,849)
122,370 10,451 132,821
Cash and investments, beginning of year
Cash and investments, end of year
Reconciliation of operating income to net cash
provided by operating activities:
Operating income
Adjustments to reconcile operating income to net
cash provided by operating activities:
Depreciation
(Increase) decrease in due from other funds
Increase (decrease) in accounts payable
Total adjustments
Net cash (used for) operating activities
144,326 13,634 157,960
$ 266,696 $ 24,085 $ 290,781
$ 105,110 $ 30,520 $ 135,630
17,260 38,589 55,849
3,444 3,444
(1,253) (1,253)
17,260 40,780 58,040
$ 122,370 $ 71,300 $ 193,670
84
CITY OF ROSEMEAD
Statement of Changes in Fiduciary Assets and Liabilities
Agency Fund
Fiscal Year Ended June 30, 2013
Balance
July 1, 2012
Additions
Balance
Deductions June 30, 2013
Assets
Cash and investments $ 510,715 $ 76,520 $ (167,130) $ 420,105
Total assets $ 510,715 $ 76,520 $ (167,130) $ 420,105
Liabilities
Deposits payable $ 510,715 $ 208,838 $ (299,448) $ 420,105
Total liabilities $ 510,715 $ 208,838 _L__299,4481 $ 420,105
m
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 87
These schedules contain trend information to help the reader
understand how the government's financial performance and well-
being have changed overtime.
Revenue Capacity 95
These schedules contain trend information to help the reader assess
the government's most significant revenue source, property tax.
Debt Capacity 99
These schedules present information to help the reader assess the
affordability of the government's current levels of outstanding debt and
the government's ability to issue additional debt in the future.
Demographic and Economic Information 105
These schedules offer demographic and economic indicators to help
the reader understand the environment within which the government's
financial activities take place.
Operating Information 107
These schedules contain service and infrastructure data to help the
reader understand how the information in the government's financial
report relates to the services the government provides and the
activities it performs.
Sources: Unless otherwise noted, the information in these schedules is derived from the
Comprehensive Annual Financial Reports for the relevant year.
I
CITY OF ROSEMEAD
Net Position by Component
Last Ten Fiscal Years
(accrual basis of accounting)
Total governmental activities net position $ 43,464,853 $ 49,279,913 $ 50,546,002 $ 54,016,569 $ 52,130,835
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.
87
Fiscal Year
2004
2005
2006
2007
2008
Governmental activities:
Net investment in capital assets
$ 10,439,445
$ 12,130,249
$ 13,345,433
$ 10,541,606
$ 12,981,537
Restricted
6,526,788
6,035,250
6,901,454
8,181,231
11,443,583
Unrestricted
26,498,620
31,114,414
30,299,115
35,293,732
27,705,715
Total governmental activities net position $ 43,464,853 $ 49,279,913 $ 50,546,002 $ 54,016,569 $ 52,130,835
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.
87
Fiscal Year
2009 2010 2011 2012 2013
$ 11,828,993 $ 12,712,242 $ 14,760,940 $ 54,010,031 $ 51,132,854
13,361,249 13,199,438 24,806,402 10,870,747 2,829,147
24,882,730 20,489,721 10,748,249 13,688,078 17,736,586
$ 50,072,972 $ 46,401,401 $ 50,315,591 $ 78,568,856 $ 71,698,587
ED
CITY OF ROSEMEAD
Changes in Net Position
Last Ten 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
Net revenues (expenses):
Governmental activities
Total net revenues (expenses)
Fiscal Year
2004 2005 2006 2007 2008
$ 4,803,476 $ 4,800,168 $ 5,629,316 $ 4,980,519 $ 7,259,587
5,797,080
6,058,824
6,065,066
6,618,779
8,043,771
2,058,252
3,252,252
3,403,699
6,120,563
13,550,042
65,583
60,828
51,286
-
-
3,121,996
2,862,328
3,223,843
602,114
669,827
-
-
-
2,467,842
3,645,207
3,201,236
3,456,308
3,959,590
4,178,000
4,078,631
1,854,185
1,830,836
1,832,219
2,698,372
1,790,348
20,901,808
22,321,544
24,165,019
27,666,189
39,037,413
7,026,282
6,299,415
3,288,225
316,849
642,716
726,345
984,965
900,359
1,598,159
1,547,182
3,091,146
3,760,495
4,144,733
7,600,778
11,729,725
1,691,586
1,211,615
814,754
1,403,059
166,118
-
-
-
3,206,303
1,484,065
287,137
266,398
337,815
2,028,128
36,800
-
1,716,656
1,290,667
856,701
254,527
12,822,496
12,522,888
9,485,886
14,125,148
15,606,606
(8,079,312) (9,798,656) (14,679,133) (13,541,041) (23,430,807)
General revenues and other changes in net position:
Governmental activities:
Taxes:
Property taxes
Sales and use taxes
Transient occupancy taxes
Othertaxes
Intergovernmental / in -lieu VLF
Investment income
Motor vehicle in -lieu, unrestricted
Other general revenues
Loss on sale of capital assets
Transfer to Successor Agency
Extraordinary item:
3,941,383
4,077,332
3,915,980
9,121,682
13,181,837
2,865,887
3,518,657
3,525,557
2,501,106
3,747,416
1,081,174
1,102,756
1,207,298
1,311,697
1,411,421
149,737
765,215
1,076,806
713,821
949,007
-
3,165,148
2,966,002
-
-
187,278
1,260,095
1,930,059
2,028,128
1,678,791
-
1,716,656
1,290,667
856,701
254,527
-
7,857
32,853
478,473
143,748
Gain on dissolution of redevelopment agency - - -
Total governmental activities 8,225,459 15,613,716 15,945,222 17,011,608 21,366,747
Changes in net position
Governmental activities
Total primary government $ 146,147 $ 5,815,060 $ 1,266,089 $ 3,470,567 _L_(2,064,0601
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.
99
Fiscal Year
2009 2010 2011 2012 2013
$ 12,176,877 $ 5,991,796 $ - 3,160,306 $ 3,989,359 $ 3,381,686
9,081,719
8,879,854
8,881,926
7,517,101
7,791,073
6,465,355
11,469,614
11,907,245
11,588,278
11,717,276
773,374
589,650
595,904
-
-
1,290,108
2,141,218
3,969,502
4,080,294
2,616,531
2,030,698
2,733,885
2,362,860
2,532,665
2,594,863
1,523,391
1,491,717
1,681,875
569,045
7,827
33,341,522
33,297,734
32,559,618
30,276,742
28,109,256
547,577
1,573,695
1,048,727
130,450
2,408,362
1,512,475
1,293,677
1,293,524
1,454,759
1,622,911
7,581,801
8,052,011
9,143,311
4,033,874
3,869,285
858,809
186,283
450,004
-
-
621,375
597,402
3,753,612
3,501,082
1,896,876
36,000
20,800
654,437
704,029
785,611
11,158,037 11,723,868 16,343,615 9,824,194 10,583,045
(22,183,485) (21,573,866) (16,216,003) (20,452,548) (17,526,211)
12,288,177
12,328,634
13,656,347
10,567,509
8,900,228
4,589,998
4,408,367
3,737,363
3,200,911
3,215,897
1,272,092
1,129,146
1,219,977
1,323,886
1,447,820
761,410
562,317
576,904
633,393
2,275,986
884,847
389,310
367,961
195,165
28,202
195,273
169,042
263,983
-
-
133,825
336,668
307,658
853,956
1,180,688
-
-
-
(2,340,090)
-
-
-
-
-
(6,392,878)
- - 34,271,082 -
20,125,622 19,323,484 20,130,193 48,705,812 10,655,943
_L _(?,057,863 $ (2,250,382) $ 3,914,190 $ 28,253,264 $ (6,870,268)
Eli
CITY OF ROSEMEAD
Fund Balances of Governmental Funds
Last Ten Fiscal Years
(modified accrual basis of accounting)
All other governmental funds
Reserved
$ 3,195,415
$ -
Fiscal Year
$ 4,947,087
$ 9,000,561
Unreserved, reported in:
2004
2005
2006
2007
2008
General fund:
5,653,208
7,336,247
6,821,660
6,142,833
6,140,289
Reserved
$ 353,616
$ 1,719,044
$ 256,765
$ 150,000
$ 3,074,496
Unreserved
20,053,506
19,896,581
22,228,341
22,460,545
18,633,154
Nonspendable
-
-
-
-
-
Restricted
-
-
-
-
-
Committed
-
-
-
-
-
Assigned
-
-
-
-
-
Unassigned
-
-
-
-
-
Totalgeneralfund
$ 20,407,122
$ 21,615,625
$ 22,485,106
$ 22,610,545
$ 21,707,650
All other governmental funds
Reserved
$ 3,195,415
$ -
$ 7,693,216
$ 4,947,087
$ 9,000,561
Unreserved, reported in:
Special revenue funds
5,653,208
7,336,247
6,821,660
6,142,833
6,140,289
Debt service funds
32,835
2,354,835
-
552
692,475
Capital projects funds
6,264,457
8,433,842
6,435,798
7,397,454
2,490,553
Nonspendable
-
-
-
-
-
Restricted
-
-
-
-
-
Committed
-
-
-
-
-
Assigned
-
-
-
-
-
Unassigned
-
-
-
-
-
Total all other governmental funds
$ 15,145,915
$ 18,124,924
$ 20,950,674
$ 18,487,926
$ 18,323,878
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.
91
Fiscal Year
2009
2010
2011
2012
2013
$ 3,106,917
$ 3,327,182
$ -
$ -
$ -
16,135,102
13,626,774
-
-
-
-
-
2,034
2,034
133,196
-
-
5,107,963
5,294,253
6,415,416
-
-
-
5,712
5,712
-
10,209,075
9,519,173
11,063,116
$ 19,242,019
$ 16,953,956
$ 15,319,072
$ 14,821,172
$ 17,617,440
$ 9,000,561 $ 8,944,112 $
9,023,487 8,763,359
2,803,910 2,803,910
(54,323) (1,405,770)
$ 20;773,635 $ 19,105,611
27,476,081
10,870,747
2,829,147
(4,402,964) (1,292,405) (788,224)
$ 23,073,117 $ 9,578,342 $ 2,040,923
92
CITY OF ROSEMEAD
Changes in Fund Balances of Governmental Funds
Last Ten Fiscal Years
(modified accrual basis of accounting)
Revenues:
Taxes
Intergovernmental
Licenses and permits
Charges for services
Fines, forfeitures and penalties
Special assessments
Investment income
Other
Total revenues
Fiscal Year
2004 2005 2006 2007 2008
$ 9,041,026 $ 9,189,326 $ 9,527,384 $ 13,648,306 $ 17,841,792
8,826,909
14,379,314
10,785,591
9,419,698
15,716,610
1,508,009
1,595,115
1,528,864
1,683,204
1,503,659
581,848
550,478
660,890
414,375
537,430
589,890
857,135
753,224
437,117
641,566
-
-
-
789,089
687,568
1,372,591
1,260,286
1,947,566
2,028,128
1,678,791
37
30,316
29,332
478,473
141,930
21,920,310
27,861,970
25,232,851
28,898,390
38,749,346
Expenditures
Current:
General government
Public safety
Public works
Community services
Community development
Parks and recreation
Capital outlay
Debt service:
2,965,572
3,023,192
3,790,631
4,780,837
7,356,665
5,797,080
6,087,918
6,536,043
6,737,912
8,043,771
3,144,358
5,208,142
6,064,980
8,898,768
12,116,508
65,583
60,828
51,286
1,419,424
669,827
3,259,505
3,424,954
3,216,935
2,690,420
3,408,691
3,201,236
3,383,358
3,881,469
4,249,462
4,078,631
26,639
184,301
149,641
-
1,647,673
Principal
445,000
465,000
490,000
780,000
1,105,000
Interest and fiscal charges
1,859,747
1,836,765
1,559,114
2,512,725
1,567,849
Bond issuance costs
-
550,323
1,323,238
Total expenditures
20,764,720
23,674,458
26,290,422
33,392,786
39,994,615
Excess (deficiency) of
revenues over (under)
expenditures
1,155,590
4,187,512
(1,057,571)
(4,494,396)
(1,245,269)
Other financing sources (uses):
Transfers in
Transfers out
Transfer to Successor Agency
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
3,905,993
(3,905,993)
4,941,103 13,300,319
(4,941,103) (13,300,319)
14,005,000
316,830
(9,569,028)
4,752,802 2,154,695
26,183,078 2,962,087
(26,183,078) (2,962,087)
24,230,000
(22,075,305)
Net change in fund balances $ 1,155,590 $ 4,187,512 $ 3,695,231
Debt service as a percentage of
noncapital expenditures 11.1% 9.8% 7.8% 11.8% 7.0%
The City of Rosemead has elected to show only nine years of data for this schedule.
93
Fiscal Year
2009 2010 2011 2012 2013
$ 17,153,625 $ 18,508,896 $ 19,313,094 $ 15,960,662 $ 16,602,329
10,992,235
7,856,792
9,383,256
9,561,918
6,399,282
1,178,362
1,079,429
1,764,162
1,156,719
1,156,968
638,244
708,434
677,861
1,055,391
1,072,754
565,643
491,574
462,389
619,397
691,548
736,213
680,288
741,382
768,997
937,405
884,847
389,310
367,956
582,176
710,443
381,429
254,610
253,379
658,670
693,123
32,530,598
29,969,333
32,963,479
30,363,930
28,263,852
11,956,179
5,903,926
3,801,486
4,203,302
3,988,156
9,114,009
8,863,234
8,882,915
7,517,101
7,774,038
4,964,867
11,264,220
19,402,924
6,417,803
6,985,208
783,452
584,463
595,904
-
-
1,047,529
1,940,641
3,397,072
3,681,903
2,605,227
2,030,698
2,733,885
2,362,860
2,532,665
2,132,827
202,752
290,885
93,121
9,090,076
3,126,669
915,000
945,000
975,000
1,210,000
-
1,531,986
1,501,667
1,882,092
961,506
-
275,344
32,546,472
34,027,921
41,668,718
35,614,356
26,612,125
(15,874) (4,058,588) (8,705,239) (5,250,426) 1,651,727
4,078,483 4,133,554 4,824,919 6,431,374 2,772,415
(4,078,483) (4,133,554) (4,824,919) (6,554,374) (2,772,415)
- - - - (6,392,878)
- - 11,230,000 - -
- (192,139) - -
102,501
102,501 11,037,861 (123,000) (6,392,878)
- - (8,619,249) -
$ (15,874 $ (3,956,087) $ 2,332,622 $ (13,992,675) $ (4,741,151)
7.6% 7.4% 8.8% 6.8% 0.0%
M
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CITY OF ROSEMEAD
Assessed Value and Estimated Actual Value of Taxable Property
Last Ten Fiscal Years
(in thousands of dollars)
Fiscal Year
Taxable
Ended
SBE
Assessed
Total Direct
June 30
Secured
Unsecured
Non - Unitary
Value
Tax Rate
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%
2013
3,531,097,436
68,996,223
3,301,527
3,603,395,186
22.11%
' 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
99
CITY OF ROSEMEAD
Direct and Overlapping Property Tax Rates
(Rate per $100 of Taxable Value)
Last Ten Fiscal Years
Agency
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
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
0.00099
0.00092
0.00080
0.00066
0.00000
0.00000
0.00000
0.00000
0.00000
0.00000
El Monte School Districts
0.05072
0.07246
0.08056
0.06402
0.08067
0.09044
0.11907
0.12388
0.12733
0.13268
El Monte Union High School
0.03573
0.03928
0.05425
0.05846
0.02820
0.05159
0.09654
0.08475
0.09591
0.08992
Garvey School Districts
0.02471
0.02319
0.05221
0.05075
0.05061
0.06835
0.07836
0.08503
0.08404
0.08832
La Ccd Ds 2008 2012 Series F
0.00000
0.00000
0.00000
0.00000
0.00000
0.00000
0.00000
0.00000
0.00000
0.01119
Los Angeles Community College
0.01986
0.01810
0.01430
0.02146
0.00878
0.02212
0.02311
0.04031
0.03530
0.03756
L.A. Co. Flood Control Bonds
0.00047
0.00024
0.00005
0.00005
0.00000
0.00000
0.00000
0.00000
0.00000
0.00000
Metropolitan Water District
0.00610
0.00580
0.00520
0.00470
0.00450
0.00430
0.00430
0.00370
0.00370
0.00350
Montebello Unified School District
0.04076
0.04172
0.07053
0.06731
0.06681
0.08065
0.09673
0.09792
0.10001
0.09630
Pasadena Ccd Ds 2002, 2006 Ser D
0.00000
0.00000
0.00000
0.00000
0.00000
0.00000
0.00000
0.00000
0.00000
0.00225
Pasadena Area Community College
0.00681
0.00879
0.00410
0.02080
0.01972
0.01741
0.02300
0.01986
0.01956
0.01830
Rio Hondo Community College
0.00000
0.02170
0.01802
0.01469
0.01370
0.02320
0.02714
0.03439
0.03418
0.02812
Rosemead School Districts
0.04517
0.07095
0.07515
0.05420
0.08282
0.06875
0.11358
0.10743
0.10507
0.10240
San Gabriel Unified School District
0.05224
0.05729
0.05284
0.04930
0.05742
0.09294
0.10071
0.10190
0.08454
0.10523
San Gabriel Vly Mwd State Water Bond
0.02200
0.02000
0.02000
0.02000
0.02000
0.01800
0.01800
0.01800
0.01800
0.01800
Total Direct & Overlapping' Tax Rates
1.30556
1.38044
1.44801
1.42640
1.43323
1.53775
1.70054
1.71717
1.70764
1.73397
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
1.00755
1.00697
1.00604
1.00541
1.00450
1.00430
1.00430
1.00370
1.00370
Total Direct Rate
0.18513
0.19461
0.20733
0.20556
0.21850
0.22614
0.22270
0.22407
0.22351
0.22113
Notes:
r In 1978, California voters passed Proposition 13 which set
the property
tax rate at a
1.00% fixed amount. This
1.00% is shared
by all
taxing agencies
for which
the subject
property resides within. In addition to the 1.00%
fixed amount,
property owners are charged
taxes
as a percentage of assessed property
values for the
payment or any voter
approved bonds.
'Overlapping rates are those of local and county
governments
that apply
to property owners within
the City. Not all overlapping rates apply to all city
property owners.
e
City's share of 1 Y 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 lax 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 mists) from indebtedness adopted prior to 1989
per California State statute. RDA direct and
overlapping rates are applied only to the incremental property values. The approval of
ABX7 26 eliminated,
Redevelopment
from the State of California for the fiscal year 201:
13 and years thereafter.
5 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 2003/04 - 2012113 Tax Rate Table and HDL Coren & Cone
m
CITY OF ROSEMEAD
Principal Property Taxpayers
Current Year and Nine Years Ago
T
Rosemead Place, LLC
Walmart Stores, Inc
Rosemead Hwang, LLC
AFG Investment Fund 5 LLC
Metodo Investments LLC
420 Boyd Street LLC
Panda Restaurant Group, Inc.
Macy's California Inc.
Shurland Kay Curci Foundation
Sunshine Inn
Rosemead Place, LLC
May Department Stores Company
Southern California Edison Co.
General Electric Credit Auto Auctions
Aespace America, Inc.
California Federal Savings & Loan Assn.
Sunshine Inn
Panda Restaurant Group, Inc.
Builder Square, LLC
Huy Fong Foods, Inc.
2012/13
2003/04
Percent of
Percent of
Total City
Total City
Taxable
Taxable
Taxable
Taxable
Assessed
Assessed
Assessed
Assessed
Value
Rank
Value
Value
Rank
Value
$ 46,249,013
1
1.28%
37,041,505
2
1.03%
27,825,000
3
0.77%
24,533,279
4
0.68%
18,498,227
5
0.51%
17,000,000
6
0.47%
14,098,496
7
0.39%
13,942,680
8
0.39%
13,756,316
9
0.38%
10,559,863
10
0.29%
$ 20,641,081
1
0.92%
16,816,057
2
0.75%
16,790,880
3
0.75%
15,882,413
4
0.71%
12,954,103
5
0.58%
9,626,052
6
0.43%
9,322,230
7
0.42%
8,000,000
8
0.36%
7,696,695
9
0.34%
7,203,512
10
0.32%
Source: Hdl Coren & Cone, Los Angeles County Assessor 2012/13 Combined Tax Rolls.
NU
CITY OF ROSEMEAD
Property Tax Levies and Collections
Last Ten Fiscal Years
Collected within the
Fiscal
Taxes Levied
Fiscal Year of Levy Collections in
Total Collections to Date
Year Ended
for the
Percent Subsequent
Percent
June 30
Fiscal Year
Amount
of Levy Years
Amount
of Levy
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%
2013
2,771,913
2,710,893
97.80% -
2,710,893
97.80%
Information not available.
Note: For these years the information was not available so an estimate was made to reduce the
total collections to date to 100 %.
Source: HDL Coren & Cone and Los Angeles County Auditor Controller's Office
K2
CITY OF ROSEMEAD
Ratios of Outstanding Debt by Type
Last Ten Fiscal Years
Fiscal Year
2003/04
2004/05
2005/06
2006/07
2007/08
2008/09
2009/10
2010/11
2011/12
2012/13
Tax
Allocation
. 2
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
41,740,000
Percentage
Debt
of Personal
Per
Income 1
Capita 1
1.93%
595
4.83%
587
5.18%
656
5.01%
660
4.59%
639
4.33%
623
4.17%
605
5.51%
780
4.63%
754
4.38%
771
Notes: Details regarding the outstanding debt can be found in the notes
to the basic financial statements.
I These ratios are calculated using personal income and population for
the prior calendar year.
2 The Rosemead Community Development Commission was dissolved
on February 1, 2012. As a result, the tax allocation bonds are not debt of
the primary government.
we;
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).
' Assessed value has been used because the actual value of
taxable property is not readily available in the State of
California-
2 The Rosemead Community Development Commission was
dissolved on February 1, 2012. As a result, the tax allocation
bonds are not debt of the primary government.
100
Tax
Percent of
Allocation
Assessed
Per
Fiscal Year
Bonds 2
Value 1
Capita
2003/04
33,385
1.49%
595
2004/05
32,920
1.36%
587
2005/06
37,100
1.40%
656
2006/07
37,455
1.29%
660
2007/08
36,350
1.15%
639
2008/09
35,435
1.05%
623
2009/10
34,490
1.01%
605
2010/11.
44,745
1.30%
780
2011/12
43,535
1.23%
754
2012/13
41.740
1.16%
771
General bonded debt is debt payable with governmental fund
resources and general obligation bonds recorded in enterprise
funds (of which, the City has none).
' Assessed value has been used because the actual value of
taxable property is not readily available in the State of
California-
2 The Rosemead Community Development Commission was
dissolved on February 1, 2012. As a result, the tax allocation
bonds are not debt of the primary government.
100
CITY OF ROSEMEAD
Direct and Overlapping Governmental Activities Debt
June 30, 2013
® e.
2012/13 Assessed Valuation: $2,989,980,664 After Deducing $613,414,522 Incremental Value
Debt to Assessed Valulalian Ratios:
Direct Debt 0.00%
Overlapping Debt 2.80%
Total Debt 2.80%
' 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. II excludes mortgage revenue, lax allocation bonds, interim financing obligations, non -
bonded capital lease obligations, and certificates of participation, unless provided by the city.
Source: Hall Caren 8 Cone, L.A. County Assessor and Auditor Combined 2012113 Lien Dale Tax Rolls.
101
Percentage
Gross Bonded
Applicable
Net Bonded
Debt Balance
To City
Debt
Overlapping Debt
' Metropolitan Water District
$ 79,696,126
0.339%
$ 270,170
Garvey SD DS 2000 Series A
350,222
51.350%
179,839
Garvey SD DS 2000 Series B
6,244,519
51.350%
3,206,561
Garvey SD DS 2004 Series 2005
7,653,736
51.350%
3,930,193
Garvey SD DS 2004 Series 2006
10,134,168
51.350%
5,203,895
Garvey SD DS 2004 Series C
8,932,964
51.350%
4,587,077
Garvey SD DS 2011 Refund Bonds
5,145,000
51.350%
2,641,958
Rosemead SO DS 2000 Series C
6,390,000
69.326%
4,429,931
Rosemead SO DS 2007 Series D
4,690,000
69.326%
3,251,389
Rosemead SO DS 200B Series A
8,575,000
69.326%
5,944,705
Rosemead SO DS 2011 Ref Bond
14,835,000
69.326%
10,284,512
El Monte Union HS Dist 2002 Series A
1,260900
14.704%
185,270
El Monte Union HS Dist 2002 Series B
2,370,000
14.704%
348,485
El Monte Union HSD DS 2006 Ref Bois
34,798,086
14.704%
5,116,711
El Monte Union HSD DS 2002 Series C
28,190900
14.704%
4,145,058
El Monte Union HSD DS 2008 Series A
52,822,277
14.704%
7,766,988
El Monte Union HSD DS 2008 Series B
30,297,787
14.704%
4,454,987
L.A. CCD DS 2003 Series B
3,100,000
0.32B%
10,168
L.A. CCD DS 2003 Taxable Ser 20048
11,985,000
0.32B%
39,311
L.A. CCD DS 2001 Taxable Series 2004A
74,440,000
0.328%
244,163
LACC DS Ref 2001 Series 2005 & 2013
473,395,000
0.328%
1,552,736
LA CCD DS 2001 2006 Series B
275,300,000
0.328%
902,984
LA CCD DS 2003, 2006 Series C
382,160,000
0.328%
1,253,485
LACC DS 2001, 2008 Ser E -1
271,710,000
0.328%
891,209
LACC DS 2003, 2008 Ser F -1
344,915,000
0.328%
1,131,321
LACC DS 2003, 2008 Taxable Ser F -2
550,000
0.328%
1,804
LACC DS 2008, 2009 Taxable SerA
350,000,000
0.328%
1,148,000
LACC DS 2008, 2009 Taxable Ser B _
75,000,000
0.328%
246,000
LACC Debt 2008, 2010 Tax Ser D
175,000,000
0.328%
574,000
LACC Debt 2008, 2010 Tax Ser E (BABS)
900,000,000
0.328%
2,952,000
LACC DS 2008, 2010 Series C
125,000,000
0.328%
410,000
LA CCD DS 2008, 2012 Series F
250,000,000
0.328%
820,000
Pasadena CCD DS 2006 Series B
46,100,000
2.617%
1,206,437
Pasadena CCD DS 2006 Ref BD Series C
5,315,367
2.617%
139,103
Pasadena CCD DS 2002, 2006 Ser D
26,505,000
2.617%
693,636
Pasadena CCD 2002, 2009 Series E (BABS)
25,295,000
2.617%
661,970
Montebello USD DS 1998 Series 1998
8,715,223
1.400%
122,013
Montebello USD DS 98 Series 1999
7,712,854
1.400%
107,980
Montebello USD DS 1998 Series 2001
2,632,827
1.400%
36,860
Montebello USD DS 1998 Series 2004
7,560,273
1.400%
105,844
Montebello Unified DS 1998 Series 2002
9,956,587
1.400%
139,392
Montebello Unit DS 2004 Series 2005
940,000
1.400%
13,160
Montebello USD DS 2004 Series 2008
32,255,000
1.400%
451,570
Montebello USD DS 2004 Sedes -1 2009 -1
19,565,000
1.400%
274,190
Montebello USD 2004 Series 2009A -2 BABS
12,640,000
1.400%
176,960 -
Montebello USD DS 2010 & 2013 Ref Bonds
34,075,000
1.400%
477,050
San Gabriel USD DS 2002 Series B
6,181,492
1.352%
83,574
San Gabriel USD DS 2005 Ref Bonds
16 955,000
1.352%
229,232
San Gabriel USD DS 2002 Ser 2007 C
10,667,878
1.352%
144,230
San Gabriel USD DS 2008 SerA
18,088,245
1.352%
244,553
San Gabriel USD DS 2010 Ref Bonds
6,410,000
1.352%
86,663
San Gabriel USD DS 2008 Series B
16,003,464
1.352%
216,367
San Gabriel USD DS 2012 Ref Bonds Series B
2,790,000
1.352%
37,721
® e.
2012/13 Assessed Valuation: $2,989,980,664 After Deducing $613,414,522 Incremental Value
Debt to Assessed Valulalian Ratios:
Direct Debt 0.00%
Overlapping Debt 2.80%
Total Debt 2.80%
' 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. II excludes mortgage revenue, lax allocation bonds, interim financing obligations, non -
bonded capital lease obligations, and certificates of participation, unless provided by the city.
Source: Hall Caren 8 Cone, L.A. County Assessor and Auditor Combined 2012113 Lien Dale Tax Rolls.
101
CITY OF ROSEMEAD
Legal Debt Margin
Last Ten Fiscal Years
Assessed valuation
Conversion percentage
Adjusted assessed valuation
Debt limit percentage
Fiscal Year
2004 2005 2006 2007 2008
2,240,938,488 2,422,878,306
25% 25%
560,234,622 605,719,577
15% 15%
2,644,964,038 2,901,902,093 3,165,802,509
25% 25% 25%
661,241,010 725,475,523 791,450,627
15% 15% 15%
Debt limit 84,035,193 90,857,936 99,186,151 108,821,328 118,717,594
Total net debt applicable to limit:
General obligation bonds
Legal debt margin 84,035,193 90,857,936 99,186,151 108,821,328 118,717,594
Total debt applicable to the limit
as a percentage of debt limit 0.0% 0.0% 0.0%
The Government Code of the Stale of California provides for a legal debt limit of
15% or gross assessed valuation. However, this provision was enacted when
assessed valuation was based upon 25% of market value. Effective with the 1981 -82
fiscal year, each parcel is now assessed at 100% of market value (as of the most
recent change in ownership for that parcel). The computations shown above reflect
a conversion of assessed valuation data for each fiscal year from the current full
valuation perspective to the 25% level that was in effect at the time that the legal
debt margin was enacted by the State of California for local governments located
within the state.
Source: Rosemead Finance Department
Los Angeles County Tax Assessor's Office
0.0% 0.0%
102
126,099,230 127,474,938 128,693,258 132,494, 707 135,127, 319
0.0% 0.0% 0.0% 0.0% 0.0%
103
Fiscal Year
2009
2010
2011
2012
2013
3,362,646,146
3,399,331,688
3,431,820,218
3,533,192,184
3,603,395,186
25%
25%
25%
25%
25%
840,661,537
849,832,922
857,955,055
883,298,046
900,848,797
15%
15%
15%
15%
15%
126,099,230
127,474,938
128,693,258
132,494,707
135,127,319
126,099,230 127,474,938 128,693,258 132,494, 707 135,127, 319
0.0% 0.0% 0.0% 0.0% 0.0%
103
CITY OF ROSEMEAD
Pledged- Revenue Coverage
Last Ten Fiscal Years
(In Thousands)
Tax Allocation Bonds
Fiscal Year
Ended Tax Debt Service
June 30 Increment Principal Interest Coverage
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
2013
5,439,677
1,795,000
1,852,123
1.49
Note: Details regarding the city's outstanding debt can be found in the notes to the financial
statements. Operating expenses do not include interest or depreciation expenses.
104
CITY OF ROSEMEAD
Demographic and Economic Statistics
Last Ten Calendar Years
Sources: (1) California State Department of Finance
(2) HDL Coren 8 Cone and based on the last available census
(3) State of California Employment Development Department
105
Per
Personal
Capita
Unemployment
Calendar
Population
Income
Personal
Rate
Year
(1)
(in thousands) (2)
Income (2)
(3)
2003/04
56,120
681,218
12,139
6.10%
2004/05
56,536
715,679
12,659
5.70%
2005/06
56,786
747,331
13,160
4.70%
2006/07
56,929
791,649
13,906
4.20%
2007/08
56,876
819,088
14,401
4.40%
2008/09
57,003
827,444
14,516
6.50%
2009/10
57,381
812,343
14,157
10.20%
2010/11
57,756
939,575
16,268
11.20%
2011/12
54,172
952,560
17,584
10.80%
2012/13
54,464
959,982
17,626
8.10%
Sources: (1) California State Department of Finance
(2) HDL Coren 8 Cone and based on the last available census
(3) State of California Employment Development Department
105
CITY OF ROSEMEAD
Principal Employers
Current Year and Nine Years Ago
' Based upon Employment Development Department's estimate of 23,300 residents employed in 2012 -13.
* Information for 2004 is not available.
Source: City of Rosemead and Rosemead Chamber of Commerce
106
2013
2004*
Percent of
Percent of
Number of
Total
Number of
Total
Employer
Employees
Employment
Employees
Employment
Southern California Edison
1
4,100
17.60%
-
0.00%
Garvey School District
2
804
3.45%
-
0.00%
Wal -Mart
3
420
1.80%
-
0.00%
Panda Restaurant Group, Inc.
4
400
1.72%
-
0.00%
Rosemead School District
5
337
1.45%
-
0.00%
Target
6
200
0.86%
-
0.00%
Hemetic Seal Corporation
7
150
0.64%
-
0.00%
Olive Garden
8
150
0.64%
-
0.00%
Don Bosco Tech
9
90
0.39%
-
0.00%
Double Tree
10
76
0.33%
-
0.00%
' Based upon Employment Development Department's estimate of 23,300 residents employed in 2012 -13.
* Information for 2004 is not available.
Source: City of Rosemead and Rosemead Chamber of Commerce
106
CITY OF ROSEMEAD
Full -time and Part-time City Employees
by Function
Last Ten Fiscal Years
Full -time and Part-time employees as of June 30,
Function 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
General government
14
15
18
17
19
16
22
19
15
13
Public safety'
22
17
23
22
34
39
42
42
33
15
Community
development
6
6
6
11
23
18
23
23
7
8
Public Works
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
26
22
Parks and recreation
97
94
103
101
103
135
112
99
68
81
Total
139
132
150
151
179
208
199
183
149
139
' The City of Rosemead contracts with the Los Angeles County Sheriffs Department for all police services
with the exception of parking control and crossing guards which are provided by City personnel.
' The City of Rosemead is part of the Los Angeles County Fire Protection District which provides fire fighting,
fire prevention, and plan check services for the City.
Source: City Finance Department
107
CITY OF ROSEMEAD
Operating Indicators
by Function
Last Ten Fiscal Years
Source: City of Rosemead
108
Fiscal Year
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
Police:
Arrests
1,081
1,230
1,315
1,786
1,506
1,478
1,733
1,888
1,842
1,186
Parking citations issued
14,676
18,357
15,176
13,210
11,766
10,517
8,450
7,515
7,797
8,765
Fire:
Number of emergency calls
2,589
2,617
2,617
2,749
2,846
2,959
2,853
2,745
2,928
2,785
Inspections
-
-
-
-
2,518
2,093
2,137
1,845
2,066
2,012
Public works:
Street resurfacing (miles)
1.3
-
1.3
2.5
1.1
2.8
3.5
3.5
3.6
0.9
Parks and recreation:
Number of recreation classes
450
530
720
775
484
397
727
617
519
638
Number of facility rentals
n/a
n/a
n/a
n/a
540
453
236
1,786
3,261
3,124
Source: City of Rosemead
108
CITY OF ROSEMEAD
Capital Asset Statistics
by Function
Last Ten Fiscal Years
Source: City of Rosemead
ibRl
Fiscal Year
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
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
77.55
77.55
77.55
77.55
77.55
77.55
Streetlights
2,700
2,702
2,705
2,706
2,712
2,712
2,712
2,712
2,712
2,712
Traffic signals
39
39
39
41
42
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
ibRl
ROSEMEAD HOUSING
DEVELOPMENT CORPORATION
FINANCIAL AND COMPLIANCE REPORT
Fiscal Year Ended June 30, 2013
4 M Y w ♦ • A r ^� Y
ROSEMEAD HOUSING DEVELOPMENT CORPORATION
FINANCIAL AND COMPLIANCE REPORT
Fiscal Year Ended June 30, 2013
TABLE OF CONTENTS
Page
INDEPENDENT AUDITOR'S REPORT
FINANCIAL STATEMENTS
Government -wide Financial Statements
Statement of Net Position
Statement of Activities
Fund Financial Statements
4
5
Balance Sheet 6
Reconciliation of the Balance Sheet of Governmental Fund to the
Statement of Net Position 7
Statement of Revenues, Expenditures and Changes in Fund Balance 8
Reconciliation of the Statement of Revenues, Expenditures and Changes in
Fund Balance of Governmental Fund to the Statement of Activities 9
Notes to the Basic Financial Statements 10
REQUIRED SUPPLEMENTARY INFORMATION
Notes to Required Supplementary Information 19
Schedule of Revenues, Expenditures and Changes in Fund Balance -
Budget and Actual 20
Independent Auditor's Report on Internal Control Over Financial Reporting and
on Compliance and Other Matters Based on an Audit of Financial Statements
Performed in Accordance with Government Auditing Standards 21
j
CERTIFIED PUBLIC ACCOUNTANTS, SINCE 1948
735 -E, Carnegie Dr. Since 100 Board of Directors
San Bernardino, CA 92408 Rosemead Housing Development Corporation
909869 0871 T City of Rosemead, California
9048895361 F
ramscpa.net
INDEPENDENT AUDITOR'S REPORT
PARTNERS
gmnrla L. Odle, CPA. MSS'
Terry P. Shea, CPA- :Report on the financial Statements
KL P,anks, CPA
M;,cihew i3. Wilson, CPA, an MSA,CGMA We have audited the accompanying financial statements of the
Scott WW, Manno, CPA. CiGMA P y 9
Leena snaf>bhly. CPA. MST, CGMA governmental activities and the major fund of the Rosemead Housing .
ia i4, ze <[,e, CPA (Partner Errw.du) Development Corporation (the Corporation), a component unit of the City of
Phillip Hi W CPA {PaitcneeEn,entus) Rosemead, California, as of and for the year ended June- 30, 2013, and the
MANAGERS r STAFF related notes to the financial statements, which collectively comprise the
Rancy D'Rarleray, CPA, MBA Corporation's basic financial statements as listed in the table of contents..
B, ridh -• d A Welebir. cr A, MBA:
]engy Lit, CPA, MST .Management's Responsibility for the Financial Statements
Papa Ma[ r I Ntiw, CPA, MRA
Mapa S, 6va,xQ,a, CPA, MBA
Petei e..s -Hmi Ay , CFA Managements responsible for the preparation and fair presentation of these
Soong -Hyea Lee, CPA.. MBA financial statements . in accordance with accounting principles generally
Cha F ang _ n_ Simon CPA
.accepted in the United States of America; this includes the design,
'}aa(rl L _:;rner,�C.P... Msn implementation, and maintenance of internal control relevant to the
Der ek I. Blow,,, CPA, MST preparation and fair presentation of financial statements that are free. from
David D Fienwood. CPA material misstatement, whether due to fraud or error.
Auditor's Responsibility
Our responsibility is to express opinions on these financial statements based
on our audit We conducted our audit in accordance with auditing standards
generally accepted in the United States of America and the standards
applicable to financial audits contained in Government Auditing Standards,
issued by the Comptroller General of the United States.. Those standards
require that we plan and perform the audit to obtain reasonable assurance
about whether the financial statements are free from material misstatement:
An audit involves performing procedures to obtain audit evidence about the
MEN5ERS amounts and disclosures in the financial statements. The procedures
Amnrlcan InsHtuteof selected depend on the auditor's judgment, :including the assessment of the
Cv,0P0d Public Accountants risks of material misstatement of the financial statements, whether due to
PCPSTh,AICPAAnrnna fraud or error. In making those risk assessments, the auditor considers
for CPA. fmr..s internal control relevant to the entity's preparation and fair presentation of
A,dit the financial statements in order to design audit procedures that are
C, e C w" appropriate in the circumstances, but not for the purpose of expressing an
Ca"fo -ma Society of opinion on the effectiveness of the entity's internal. control. Accordingly, we
``" "t`ed P ubl ic AccQu nMnt ` express no such opinion. An audit also includes evaluating the
appropriateness of accounting policies used and the reasonableness of
significant accounting estimates made by management„ as well as
evaluating the overall presentation of the financial statements.
-1-
STABILITY. ACCURACY. TRUST.
ROGERS ANDERSON.,. MALODY S SCOTT, LLP
735 -E, Carnegie Dr. Since 100 Board of Directors
San Bernardino, CA 92408 Rosemead Housing Development Corporation
909869 0871 T City of Rosemead, California
9048895361 F
ramscpa.net
INDEPENDENT AUDITOR'S REPORT
PARTNERS
gmnrla L. Odle, CPA. MSS'
Terry P. Shea, CPA- :Report on the financial Statements
KL P,anks, CPA
M;,cihew i3. Wilson, CPA, an MSA,CGMA We have audited the accompanying financial statements of the
Scott WW, Manno, CPA. CiGMA P y 9
Leena snaf>bhly. CPA. MST, CGMA governmental activities and the major fund of the Rosemead Housing .
ia i4, ze <[,e, CPA (Partner Errw.du) Development Corporation (the Corporation), a component unit of the City of
Phillip Hi W CPA {PaitcneeEn,entus) Rosemead, California, as of and for the year ended June- 30, 2013, and the
MANAGERS r STAFF related notes to the financial statements, which collectively comprise the
Rancy D'Rarleray, CPA, MBA Corporation's basic financial statements as listed in the table of contents..
B, ridh -• d A Welebir. cr A, MBA:
]engy Lit, CPA, MST .Management's Responsibility for the Financial Statements
Papa Ma[ r I Ntiw, CPA, MRA
Mapa S, 6va,xQ,a, CPA, MBA
Petei e..s -Hmi Ay , CFA Managements responsible for the preparation and fair presentation of these
Soong -Hyea Lee, CPA.. MBA financial statements . in accordance with accounting principles generally
Cha F ang _ n_ Simon CPA
.accepted in the United States of America; this includes the design,
'}aa(rl L _:;rner,�C.P... Msn implementation, and maintenance of internal control relevant to the
Der ek I. Blow,,, CPA, MST preparation and fair presentation of financial statements that are free. from
David D Fienwood. CPA material misstatement, whether due to fraud or error.
Auditor's Responsibility
Our responsibility is to express opinions on these financial statements based
on our audit We conducted our audit in accordance with auditing standards
generally accepted in the United States of America and the standards
applicable to financial audits contained in Government Auditing Standards,
issued by the Comptroller General of the United States.. Those standards
require that we plan and perform the audit to obtain reasonable assurance
about whether the financial statements are free from material misstatement:
An audit involves performing procedures to obtain audit evidence about the
MEN5ERS amounts and disclosures in the financial statements. The procedures
Amnrlcan InsHtuteof selected depend on the auditor's judgment, :including the assessment of the
Cv,0P0d Public Accountants risks of material misstatement of the financial statements, whether due to
PCPSTh,AICPAAnrnna fraud or error. In making those risk assessments, the auditor considers
for CPA. fmr..s internal control relevant to the entity's preparation and fair presentation of
A,dit the financial statements in order to design audit procedures that are
C, e C w" appropriate in the circumstances, but not for the purpose of expressing an
Ca"fo -ma Society of opinion on the effectiveness of the entity's internal. control. Accordingly, we
``" "t`ed P ubl ic AccQu nMnt ` express no such opinion. An audit also includes evaluating the
appropriateness of accounting policies used and the reasonableness of
significant accounting estimates made by management„ as well as
evaluating the overall presentation of the financial statements.
-1-
STABILITY. ACCURACY. TRUST.
Der ek I. Blow,,, CPA, MST preparation and fair presentation of financial statements that are free. from
David D Fienwood. CPA material misstatement, whether due to fraud or error.
Auditor's Responsibility
Our responsibility is to express opinions on these financial statements based
on our audit We conducted our audit in accordance with auditing standards
generally accepted in the United States of America and the standards
applicable to financial audits contained in Government Auditing Standards,
issued by the Comptroller General of the United States.. Those standards
require that we plan and perform the audit to obtain reasonable assurance
about whether the financial statements are free from material misstatement:
An audit involves performing procedures to obtain audit evidence about the
MEN5ERS amounts and disclosures in the financial statements. The procedures
Amnrlcan InsHtuteof selected depend on the auditor's judgment, :including the assessment of the
Cv,0P0d Public Accountants risks of material misstatement of the financial statements, whether due to
PCPSTh,AICPAAnrnna fraud or error. In making those risk assessments, the auditor considers
for CPA. fmr..s internal control relevant to the entity's preparation and fair presentation of
A,dit the financial statements in order to design audit procedures that are
C, e C w" appropriate in the circumstances, but not for the purpose of expressing an
Ca"fo -ma Society of opinion on the effectiveness of the entity's internal. control. Accordingly, we
``" "t`ed P ubl ic AccQu nMnt ` express no such opinion. An audit also includes evaluating the
appropriateness of accounting policies used and the reasonableness of
significant accounting estimates made by management„ as well as
evaluating the overall presentation of the financial statements.
-1-
STABILITY. ACCURACY. TRUST.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a
basis for our audit opinions.
Opinions
In our opinion, the financial statements referred to above present fairly, in all material respects,
the respective financial position of the governmental activities and the major fund of the
Corporation, as of June 30, 2013, and the respective changes in financial position thereof for
the year then ended in accordance with accounting principles generally accepted in the United
States of America.
Other Matters
Required Supplementary Information
Accounting principles generally accepted in the United States of America require that the
budgetary comparison information 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.
Management has omitted Management's Discussion and Analysis that accounting principles
generally accepted in the United States of America requires to be presented to supplement the
basic financial statements. Such missing information, although not a part of the basic financial
statements, is required by the Governmental Accounting Standards Board, who considers it to
be an essential part of financial reporting for placing the basic financial statements in an
appropriate operational, economic, or historical context. Our opinion on the basic financial
statements is not affected by this missing information.
Implementation of new pronouncements
As discussed in Note 1 of the financial statements, the Corporation adopted the provisions of
GASB Statement No. 63, Financial Reporting of Deferred Outflows of Resources, Deferred
Inflows of Resources and Net Position.
-2-
Other Reporting Required by Government Auditing Standards
In accordance with Government Auditing Standards, we have also issued our report dated
January 8, 2014, on our consideration of the Corporation's internal control over financial
reporting and our tests of its compliance with certain provisions of laws, regulations, contracts,
grant agreements, and other matters. The purpose of that report is to describe the scope of our
testing of internal control over financial reporting and compliance and the results of that testing,
and not to provide an opinion on the internal control over financial reporting or on compliance.
That report is an integral part of an audit performed in accordance with Government Auditing
Standards in considering the Corporation's internal control over financial reporting and
compliance.
�0¢W at(r�, #p Ajott t LCP
San Bernardino, California
January 8, 2014
-3-
FINANCIAL SECTION
Rosemead Housing Development Corporation
Notes to the Basic Financial Statements
June 30, 2013
(1) Summary of Significant Accounting Policies
(a) Reporting Entity
The Rosemead Housing Development Corporation (the Corporation) is a
nonprofit corporation whose purpose is to provide assistance to the Rosemead
Community Development Commission (the Commission) to account for the
construction, financing and operations of low- and moderate - income housing for
the benefit of the City of Rosemead (the City). The Corporation currently
maintains the Angelus and Garvey Senior Housing facilities. The Corporation is
exempt from income taxes under Section 501 (c)(3) of the Internal Revenue
Code (IRC) and applicable state statutes.
Governmental Accounting Standards Board (GASB) Statement No. 14, The
Financial Reporting Entity, defines the reporting entity as the primary government
and those component units for which the primary government is financially
accountable. Financial accountability is defined as appointment of a voting
majority of the component unit's Board and either (a) the primary government has
the ability to impose its will or (b) the possibility exists that the component unit will
provide a financial benefit to or impose a financial burden on the primary
government. Since the Board of Directors of the Commission and the Council
members also serve as the Board of Directors of the Corporation, the
Commission and the City, in effect, have the ability to influence and control
operations. Therefore, the City has oversight responsibility for the Corporation.
Accordingly, in applying the criteria of GASB Statement No. 14, the financial
statements of the Corporation are included in the City's financial reports.
The Corporation has the same fiscal year as the City. These financial statements
contain information for the Corporation only. The City's financial report may be
obtained by contacting the Financial Department of the City.
As a result of the Assembly Bill X1 26 signed into law as part of the State of
California's budget package on June 29, 2011, the Rosemead Community
Development Commission ceased to exist as of February 1, 2012. On January
10, 2012, the City Council elected to serve as the successor agency to the
Commission, and retain the housing assets and functions previously held and
performed by the Commission.
(b) Basis of Accounting and Measurement Focus
The basic financial statements of the Corporation are composed of the following:
• Government -wide financial statements
• Fund financial statements
• Notes to the basic financial statements
Rosemead Housing Development Corporation
Notes to the Basic Financial Statements
June 30, 2013
(1) Summary of Significant Accounting Policies (continued)
(b) Basis of Accounting and Measurement Focus (continued)
Government -wide Financial Statements
Government -wide financial statements display information about the reporting
government as a whole, except for its fiduciary activities. These statements
include separate columns for the governmental and business -type activities of
the primary government (including its blended component units), as well as its
discretely presented component units. The Corporation has no business -type
activities or discretely presented component units. Eliminations have been made
in the Statement of Activities so that certain allocated expenses are recorded
only once (by the function to which they were allocated), however, general
government expenses have not been allocated as indirect expenses to the
various functions of the Corporation.
Government -wide financial statements are presented using the economic
resources measurement focus and the accrual basis of accounting. Under the
economic resources measurement focus, all (both current and long -term)
economic resources and obligations of the reporting government are reported in
the government -wide financial statements. Basis of accounting refers to when
revenues and expenditures are recognized in the accounts and reported in the
financial statements. Under the accrual basis of accounting, revenues, expenses,
gains, losses, assets, and liabilities resulting from exchange and exchange -like
transactions are recognized when the exchange takes place. Revenues,
expenses, gains, losses, assets, and liabilities resulting from nonexchange
transactions are recognized in accordance with the requirements of GASB
Statement No. 33.
Program revenues include charges for services and payments made by parties
outside of the reporting government's citizenry if that money is restricted to a
particular program. Program revenues are netted with program expenses in the
statement of activities to present the net cost of each program.
Amounts paid to acquire capital assets are capitalized as assets in the
government -wide financial statements, rather than reported as expenditures.
Proceeds of long -term debt are recorded as a liability in the government -wide
financial statements, rather than as an 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.
- 11 -
Rosemead Housing Development Corporation
Notes to the Basic Financial Statements
June 30, 2013
(1)
Summary of Significant Accounting Policies (continued)
(b) Basis of Accounting and Measurement Focus (continued)
Fund Financial Statements
The underlying accounting system of the Corporation is organized and operated
on the basis of separate funds, each of which is considered to be a separate
accounting entity. The operations of each fund are accounted for with a separate
set of self - balancing accounts that comprise its assets, liabilities, fund equity,
revenues and expenditures or expenses, as appropriate. Governmental
resources are allocated to and accounted for in individual funds based upon the
purposes for which they are to be spent and the means by which spending
activities are controlled.
Fund financial statements for the primary government's governmental,
proprietary, and fiduciary funds are presented after the government -wide
financial statements. These statements display information about major funds
individually and nonmajor funds in the aggregate for governmental and enterprise
funds. Fiduciary statements include financial information for fiduciary funds and
similar component units. Fiduciary funds primarily represent assets held by the
Corporation in a custodial capacity for other individuals or organizations. The
Corporation has no enterprise funds or fiduciary funds.
Governmental Funds
In the fund financial statements, governmental funds and agency funds are
presented using the modified - accrual basis of accounting. Their revenues are
recognized when they become measurable and available as net current assets.
Measurable means that the amounts can be estimated, or otherwise determined.
Available means that the amounts were collected during the reporting period or
soon enough thereafter to be available to finance the expenditures accrued for
the reporting period. The Corporation uses a sixty day availability period.
Revenue recognition is subject to the measurable and available criteria for the
governmental funds in the fund financial statements. Exchange transactions are
recognized as revenues in the period in which they are earned (i.e., when the
related goods or services are provided). Locally imposed derived tax revenues
are recognized as revenues in the period in which the underlying exchange
transaction upon which they are based takes place. Imposed non - exchange
transactions are recognized as revenues in the period for which they were
imposed. If the period of use is not specified, they are recognized as revenues
when an enforceable legal claim to the revenues arises or when they are
received, whichever occurs first. Government- mandated and voluntary
nonexchange transactions are recognized as revenues when all applicable
eligibility requirements have been met.
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Rosemead Housing Development Corporation
Notes to the Basic Financial Statements
June 30, 2013
(1) Summary of Significant Accounting Policies (continued)
(b) Basis of Accounting and Measurement Focus (continued)
Governmental Funds (continued
In the fund financial statements, governmental funds are presented using the
current financial resources measurement focus. This means that only current
assets and current liabilities are generally, included on their balance sheets. The
reported fund balance (net current assets) is considered to be a measure of
"available spendable resources." Governmental fund operating statements
present increases (revenues and other financing sources) and decreases
(expenditures and other financing uses) in net current assets. Accordingly, they
are said to present a summary of sources and uses of "available spendable
resources" during a period.
Non - current portions of long -term receivables due to governmental funds are
reported on their balance sheets in spite of their spending measurement focus.
Special reporting treatments are used to indicate, however, that they should not
be considered "available spendable resources," since they do not represent net
current assets. Recognition of governmental fund type revenues represented by
noncurrent receivables are deferred until they become current receivables.
Because of their spending measurement focus, expenditure recognition for
governmental fund types excludes amounts represented by noncurrent liabilities.
Since they do not affect net current assets, such long -term amounts are not
recognized as governmental fund type expenditures or fund liabilities.
Amounts expended to acquire capital assets are recorded as expenditures in the
year that resources were expended, rather than as fund assets. The proceeds of
long -term debt are recorded as an other financing source rather than as a fund
liability. Amounts paid to reduce long -term indebtedness are reported as fund
expenditures.
When both restricted and unrestricted resources are combined in a fund,
expenses are considered to be paid first from restricted resources, and then from
unrestricted resources.
(c) Major Fund
The Corporation reports the General Fund as its only major fund.
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Rosemead Housing Development Corporation
Notes to the Basic Financial Statements
June 30, 2013
(1) Summary of Significant Accounting Policies (continued)
(d) Cash and Investments
Cash includes amounts in demand and time deposits. Investments, if any, are
reported in the accompanying balance sheet at fair value, except for certain
money market and investment contracts that are reported at cost because they
are not transferable and they have terms that are not affected by changes in
market interest rates.
Changes in fair value that occur during a fiscal year are recognized as income
from property and investments reported for that fiscal year. Income from property
and investments includes interest earnings, changes in fair value, any gains or
losses realized upon the liquidation, maturity or sale of investments, property
rentals, and the sale of City -owned property.
(e) Capital Assets
Capital assets, which include buildings and improvements, and furniture and
equipment, are reported as part of governmental activities in the government -
wide financial statements. Capital assets are defined by the Corporation as
assets with an initial, individual cost of more than $10,000 and an estimated
useful life in excess of one year. Such assets are recorded at historical cost, or
estimated historical cost if purchased or constructed. Donated capital assets are
recorded at estimated fair market value at the date of donation.
The cost of normal maintenance and repairs that do not add to the value of an
asset or materially extend an asset's useful life are not capitalized.
Costs associated with construction in progress are recorded in their respective
capital assets category upon approval by the Corporation's governing board,
which approximates the completion date.
Depreciation is charged to operations using the straight -line method based on
the estimated useful life of an asset. The estimated useful lives of depreciable
assets are as follows:
Buildings 50 years
Improvement 15 years
Furniture and equipment 7 years
(f) Income Taxes
The Corporation is exempt from federal income taxes under Section 501(c)(3) of
the IRC and a similar exemption under state law.
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Rosemead Housing Development Corporation
Notes to the Basic Financial Statements
June 30, 2013
(1) Summary of Significant Accounting Policies (continued)
(g) Fund Equity
The Corporation implemented GASB Statement No. 54, Fund Balance Reporting
and Governmental Fund Type Definitions during the year ended June 30, 2013.
This statement provides more clearly defined fund balance categories to make
the nature and extent of the constraints placed on a government's fund balance
more transparent. The following classifications describe the relative strength of
the spending constraints placed on the purposes for which resources can be
used:
• Nonspendable — amounts that are not in a spendable form (such as
inventory) or are required to be maintained intact.
• Restricted — amounts constrained to specific purposes by their providers
(such as grantors, bondholders and higher levels of government), through
constitutional provisions or by enabling legislation.
• Committed — amounts constrained to specific purposes by a government
itself, using the highest level of decision - making authority; to be reported as
committed, amounts cannot be used for any other purpose unless the
government takes the same highest level action to remove or change the
constraint.
• Assigned — amounts a government intends to use for a specific purpose;
intent can be expressed by the governing body or by an official or body to
which the governing body delegates the authority.
• Unassigned — amounts that are for any purpose; positive amounts are
reported only in a general fund.
The Board of Directors establishes (and modifies or rescinds) fund balance
commitments by passage of an ordinance or resolution. The Board designates
the Finance Committee and City Manager as the Corporation officials to
determine, define, and make the necessary account or fund transfers for the
amounts to those components of fund balance that are classified as "Assigned
Fund Balance ".
When both restricted and unrestricted resources are available for use when an
expenditure is incurred, it is the Corporation's policy to use restricted resources
first, then unrestricted resources as they are needed. It is the Corporation's
policy to consider committed amounts as being reduced first, followed by
assigned amounts, and then unassigned amounts when expenditures are
incurred for purposes for which amounts in any of those unrestricted fund
balance classifications could be used.
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Rosemead Housing Development Corporation
Notes to the Basic Financial Statements
June 30, 2013
(1) Summary of Significant Accounting Policies (continued)
(h) Rental Income
The management company collects rent payments on the first day of the month
and recognizes revenue in the month due. Monthly rental income per unit ranges
from $250 to $450 and is approved by the annual budget.
(i) Use of Estimates
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions
that affect certain reported amounts and disclosures. Accordingly, actual results
could differ from those estimates.
Q) Implementation of New Pronouncements
Beginning with the current fiscal year, the Corporation implemented GASBS No.
63, Financial Reporting of Deferred Outflows of Resources, Deferred Inflows of
Resources, and Net Position. This statement is designed to improve financial
reporting by standardizing the presentation of deferred outflows of resources and
deferred inflows of resources and their effects on the government's net position.
Deferred outflows of resources are transactions that result in the consumption of
net position in one period that are applicable to future periods and are not
considered assets as described by the statement. Deferred outflows of resources
are required to be presented separately after assets on the statement of net
position.
Deferred inflows of resources are transactions that result in the acquisition of net
position in one period that are applicable to future periods and are not considered
to be liabilities as described by the statement. Deferred outflows of resources are
required to be presented separately after liabilities on the statement of net
position.
The statement defines net position as the residual of all other elements
presented in a statement of financial position. It is the difference between (a)
assets and deferred outflows of resources and (b) liabilities and deferred inflows
of resources.
For the years covered by these financial statements, the Corporation had no
transactions that would be classified as deferred inflows or outflows of resources.
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Rosemead Housing Development Corporation
Notes to the Basic Financial Statements
June 30, 2013
(2) Cash and Investments
Cash and investments at June 30, 2013 consisted of deposits with financial institutions.
The carrying amount of the Corporation's deposits was $136,346.
Custodial Credit Risk
Custodial credit risk for deposits is the risk that, in event of the failure of a depository
financial institution, a government will not be able to recover its deposits or will not be
able to recover collateral securities that are in the possession of an outside party. The
Corporation maintains its bank accounts at financial institutions that are collateralized
with securities held by the pledging financial institution, or by its Trust Department or
agent, but not in the Corporation's name. The primary difference between the carrying
amount and the bank balance are deposits in transit and outstanding checks. In
accordance with state statutes, the Corporation maintains deposits at those depository
institutions insured by the FDIC. The California Government Code (the Code) requires
California banks and savings and loan associations to collateralize the deposits of
governmental entities by pledging government securities as collateral. The market value
of pledge securities must equal at least 110% of those deposits. California law also
allows financial institutions to secure the deposits of governmental entities by pledging
first trust deed mortgage notes having a collateral value of 150% of a corporation's total
deposits. As of June 30, 2013, the Corporation had no deposits with financial institutions
in excess of federal depository insurance limits.
(3) Reimbursement Agreements and Related -party Transactions
The Corporation has entered into a reimbursement agreement with the City for the
Corporation's administrative services. The Corporation paid $226,200 for administrative
services to the City during the year ended June 30, 2013. The Corporation is funded, in
part, by advances from the Commission.
The Corporation has also entered into a 55 -year lease agreement with the City for the
Angelus Senior Housing facility at $60,000 annually, expiring June 2047. Total lease
commitments remaining are $1,977,904 for the Angelus Senior Housing facility at June
30, 2013. The Corporation has also entered into a 55 -year lease agreement with the City
for the Garvey Senior Housing facility at $72,000 annually, expiring November 2057.
Total lease commitments remaining are $3,157,907 for the Garvey Senior Housing
facility at June 30, 2013. The Corporation paid $91,200 and $92,200 in lease payments
to the City during the year ended June 30, 2013 for the Angelus and Garvey Senior
Housing facilities, respectively.
-17-
Rosemead Housing Development Corporation
Notes to the Basic Financial Statements
June 30, 2013
(4)
(5)
Capital Assets
During the year ended June 30, 2013, the changes in capital assets were as follows:
Balance at
Balance at
June 30, 2012 Additions Deletions June 30, 2013
Government activities:
Capital assets being depreciated:
Buildings and improvements $11,042,597 $ $ $11,042,597
Furniture and equipment 128,544 128,544
Total capital assets being
depreciated 11,171,141
Less accumulated depreciation:
Buildings and improvements (2,595,959) (223,335)
Furniture and equipment (128,544)
Total accumulated
depreciation
Governmental activities
capital assets, net
(2,724,503) (223,335)
11,171,141
(2,819,294)
(128,544)
(2,947,838)
$ 8,446, $ (223, 335) $ - $ 8,223,303
Depreciation expense is allocated to the general government function in the statement of
activities.
Risk Management
The Corporation is exposed to various risks of loss related to torts; thefts of, damage to
and destruction of assets; errors and omissions; and natural disasters. The Corporation,
through the City, carries commercial liability insurance coverage. The Corporation
carries no insurance coverage for natural disasters. Since the Corporation does not have
any employees (it uses employees from the City), it is not liable for injury to employees,
workers' compensation, or employee health and accident insurance. The City has had
no reduction in insurance coverage, nor did the City have any settlements that were in
excess of insurance coverage in any of the three preceding years.
(6) Property Management and Operations
The Corporation has two agreements with a management company, dated July 1994
and April 2002, to operate the development housing. These agreements are
automatically renewed for successive periods of one year, unless terminated by the
Corporation. The management company is responsible for collecting rents and receipts,
employing an on -site manager and maintaining financial records. Total fees paid to the
management company were $25,092 for the Angelus Senior Housing facility and
$35,424 for the Garvey Senior Housing facility during fiscal year ended June 30, 2013.
-18-
Required Supplementary Information
Rosemead Housing Development Corporation
Notes to Required Supplementary Information
June 30, 2013
(1)
Budgetary Information
Annual budgets are adopted on a basis consistent with accounting principles generally
accepted in the United States of America for the governmental fund. All annual
appropriations lapse at fiscal year end.
On or before the last day in March of each year, all agencies of the government submit
requests for appropriations to the government's manager so that a budget may be
prepared. Before the first Thursday of June, the proposed budget is presented to the
Corporation's governing board for review. The governing board holds public hearings
and a final budget must be prepared and adopted no later than June 30.
The appropriated budget is prepared by fund, function and department. The
Corporation's department heads, with approval of the Finance Director and City
Manager, may make transfers of appropriations within a department and between
departments within a fund. Transfers of appropriations between funds must be approved
by the governing board. The legal level of budgetary control (i.e., the level at which
expenditures may not legally exceed appropriations) is the fund level.
Encumbrance accounting is employed in governmental funds. Encumbrances (e.g.,
purchase orders, contracts) outstanding at year end do not constitute expenditures or
liabilities because the commitments will be re- appropriated and honored during the
subsequent year.
-19-
ROGERS, ANDERSON,. MALODY & SCOTT, LLF
CERTIFIED PUBLIC ACCOUNTANTS, .SINCE 1948
735 E, Carnegie. Dr,. suite 100
- San Bernardino, CA 92406 Board of Directors
909 e89 5871 F :Rosemead Housing Development Corporation
vas ee9 53dI F g P p
ramscpa.net City of Rosemead, California
PARTNERS INDEPENDENT AUDITOR'S. REPORT ON INTERNAL CONTROL OVER -
Brenua L Ode, CPA, MST FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERS
Terr P Shea, CPA;
Kirk A. Franks, CPA. BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN
Matthew - B.Wilson, CPA, MSA, CGMA ACCORDANCE WITH GOVERNMENTAL AUDITING STANDARDS
Scott W. Mannq, CPA. CGMA
y H, ZB,tnPor. CPA (Parane, sn nbhag. CPA M Fi
Jay H, W have audited,. in accordance- with the auditing standards generally
mer Emen [asj
PhillipH, Wain, . CPA (Psme Eraem.$) accepted in the United States of America and the standards applicable to
financial audits contained in Government Auditing Standards issued by the
MANAGERS r STAFF Comptroller General of the United States, the financial .statements of the
Nanc oAa
8radlerdA VJyie6ir, CPA, MBA governmental activities and the major fund of the Rosemead Housing
Jenny Liu, CPA, MST Development Corporation. (the Corporation), a component unit of the City of
Pap Matnr Ihtaw, CPA, MBA Rosemead., California, as of and for the year ended June 30, 2013, and the
M ya 5, Inanova CPA, MBA related notes to the financial statements, which collectively comprise the
Pece, - Mn, ee,
aeong Hyea Cce,:CP CP A, MBA Corporation's basic financial statements and have issued our report thereon
Char;es De sirnoni, CPA dated January S, 2014..
Y,ann rang. CPA
Dania T. Turner, CPA, MSA Internal Control Over Financial Reporting -
Der'a kj. Brown, CPA, MST
DaOd D. Henvood, CPA.
In planning and performing our audit of the financial statements, we
considered the Corporation's internal control over financial reporting (internal
control) to determine the audit procedures that are appropriate in the
circumstances for the purpose of expressing our opinions on the financial
statements, but not for the purpose of expressing an opinion on the
effectiveness of the Corporation's internal control. Accordingly, we do not
express an opinion on the effectiveness of the Corporation's internal control.
A deficiency in internal control exists when the design or operation of a
control does not allow management or employees, in the normal course of
performing their assigned functions, to prevent, or detect and correct,
misstatements on a timely basis, A material weakness is a deficiency, or a
combination of deficiencies, in internal control, such that there is a
MEMBERS reasonable possibility that a material misstatement of the entity's financial
C .rt, ed Public i A Gt6o LInCAniS statements will not be prevented, or detected and corrected on a timely
Ce1 "Cif,9d A
basis. A significant deficiency is a deficiency, or a combination of
for CPA F,,ns ,m Alliance deficiencies, in internal control that is less severe than a material weakness,
r,„ r
c.> Aud,: yet important enough to merit attention by those charged with governance.
Quu4<p C l ter
Calllernia Scoety of
Cernfied P.Olic Accaunuants
-21
STABILITY. ACCURACY, TRUST.
Our consideration of internal control was for the limited purpose described in the first paragraph
of this section and was not designed to identify all deficiencies in internal control that might be
material weaknesses or, significant deficiencies. Given these limitations, during our audit we did
not identify any deficiencies in internal control that we consider to be material weaknesses.
However, material weaknesses may exist that have not been identified.
Compliance and Other Matters
As part of obtaining reasonable assurance about whether the Corporation's financial statements
are free from material misstatement, we performed tests of its compliance with certain
provisions of laws, regulations, contracts, and grant agreements, noncompliance with which
could have a direct and material effect on the determination of financial statement amounts.
However, providing an opinion on compliance with those provisions was not an objective of our
audit, and accordingly, we do not express such an opinion. The results of our tests disclosed no
instances of noncompliance or other matters that are required to be reported under Government
Auditing Standards.
Purpose of this Report
The purpose of this report is solely to describe the scope of our testing of internal control and
compliance and the results of that testing, and not to provide an opinion on the effectiveness of
the entity's internal control or on compliance. This report is an integral part of an audit
performed in accordance with Government Auditing Standards in considering the entity's
internal control and compliance. Accordingly, this communication is not suitable for any other
purpose.
DQ.1�I.EJ 1�.4Ad94 &.f'AL I 1JC077 L t.P
San Bernardino, California
January 8, 2014
-22-