CC - Item 4E - Transmittal of Fiscal Year 2018-19 of Annual Financial Reports (----E M F
��,gawf 9 ° ROSEMEAD CITY COUNCIL
STAFF REPORT
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RPORATED 159
TO: THE HONORABLE MAYOR AND CITY COUNCIL
FROM: GLORIA MOLLEDA, CITY MANAGER It 0 .
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DATE: DECEMBER 10, 2019
SUBJECT: TRANSMITTAL OF FISCAL YEAR 2018-19 CITY OF ROSEMEAD AND
ROSEMEAD HOUSING CORPORATION ANNUAL FINANCIAL
REPORTS
SUMMARY
This report provides the Fiscal Year (FY) 2018-19 annual financial reports for the City of
Rosemead and the Rosemead Housing Development Corporation to the City Council. The City
of Rosemead Comprehensive Annual Financial Report (CAFR) (Attachment A) and Rosemead
Housing Development Corporation Financial and Compliance Report (Attachment B) provide a
complete presentation of the finances of each of the above-mentioned organizations.
DISCUSSION
After the close of each fiscal year, the Finance Department is responsible for the preparation and
publication of the City's CAFR following an independent, certified audit. The goal of the
financial audit and report is to provide users with a reasonable assurance that the information
presented in the statements is accurate and timely.
The CAFR presents information on the status of the City's financial affairs, first on a citywide
basis (Government-Wide Financial Statements) in which all City activities are reported as
governmental activities. A second set of statements (Fund Financial Statements) report
separately, the activities of all City funds.
The CAFR is organized into three primary sections:
1. Introductory Section — which includes the Finance Director's Letter of Transmittal, List
of Principal Officials, and the Organizational Chart.
2. Financial Section — which includes the Independent Auditor's Report, Management's
Discussion and Analysis, and the general-purpose financial statements consisting of the
combined financial statements, notes to the financial statements, and supplemental
statements.
AGENDA ITEM 4.E
City Council Meeting
December 10,2019
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3. Statistical Section —which includes comparative information on pertinent City data such
as expenditures, revenues, assessed valuations, tax levies, demographic data, and
performance measurements.
The CAFR is utilized by the investment community, including bond buyers, underwriters, bond
issuers, and credit rating agencies. The CAFR serves as a public information tool in the form of
a comprehensive presentation of all the City's financial activities.
ANALYSIS
For FY 2018/19, the accounting firm of Lance, Soll & Lunghard, LLP performed an independent
audit to determine the financial statements are fairly presented and free from material
misstatement. The independent auditor concluded there was a reasonable basis for rendering an
unmodified opinion, and that the City's financial statements are fairly presented in conformity
with Generally Accepted Accounting Principles (GAAP). An unmodified opinion provides a
high level of assurance that a professional, independent examination of financial statements has
not revealed any actual or possible material misstatements in those financial statements.
Listed below are the financial highlights for FY 2018-19:
• The fund balance of General Fund increased $2.8 million. This is due to a combination
of increases in property tax and interest revenues and a decrease in General Fund
expenditures due to less capital spending.
• The unassigned fund balance for the General Fund was $13.8 million or 63% of total
General Fund expenditures. $7.7 million or 31% of General Fund revenues is set aside to
meet the City's reserve policy.
• The assets related to Governmental Activities has increased by approximately $3.7
million which is largely due to an increase in cash and investments.
There are two primary citywide financial statements: The Statement of Net Position and the
Statement of Activities. Like a balance sheet in private sector accounting, the Statement of Net
Position presents the City's overall financial position at a specific point in time — in the City's
Comprehensive Annual Financial Report for Fiscal Year Ending June 30, 2019 case, this is as of
the last day of the fiscal year (i.e., June 30). The Statement of Activities is similar to the income
statement, presenting the City's results of operations over a period of time.
AGENDA ITEM 4.E
City Council Meeting
December 10,2019
Page 3 of 9
City of Rosemead's Net Position
As of June 30, 2019 and 2018
(thousands)
Governmental Activities
2019 2018
Current and other assets 37,251 30,515
Capital assets 50,883 53,587
Total assets 88,134 84,102
Deferred outflows of resources 3,583 4,232
Long-term liabilities outstanding 9,680 10,268
Other liabilities 2,952 2,930
Total liabilities 12,632 13,198
Deferred inflows of resources 989 783
Net assets:
Invested in capital assets, net of related debt 50,883 53,587
Restricted 9,730 5,467
Unrestricted 17,483 15,299
Total net position $ 78,096 $ 74,353
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 $78 million at the close of the most recent fiscal year.
A significant portion of the City of Rosemead's net position (65%) 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.
An additional portion of the City of Rosemead's net position (12.5%) represents resources that
are subject to external restrictions on how they may be used. The remaining balance of
unrestricted net position ($17.5 million) may be used to meet the government's ongoing
obligations to citizens and creditors.
At the end of the current fiscal year, the City of Rosemead is able to report positive net position
balances. The situation also held true for the prior fiscal year.
AGENDA ITEM 4.E
City Council Meeting
December 10,2019
Page 4 of 9
City of Rosemead's Changes in Net Position
Years Ended June 30, 2019 and 2018
(thousands)
Governmental
Activities
2019 2018
Program revenues:
Charges for services $ 7,897 $ 7,864
Operating grants and contributions 4,122 4,822
Capital grants and contributions 1,218 1,172
General revenues:
Property taxes 9,567 9,129
Other taxes 9,380 9,570
Investment income 1,158 210
Other 124 648
Total revenues 33,466 33,415
Expenses:
General government 4,205 4,554
Public safety 9,126 9,500
Public works 7,662 9,554
Community development 6,353 3,410
Parks and recreation 2,377 2,746
Total expenses 29,723 29,764
Change in net position 3,743 3,651
Net position-June 30, 2018 74,353 72,884
Restatement - (2,182)
Net position-June 30, 2019 $ 78,096 $ 74,353
Governmental activities increased the City of Rosemead's net position remained the same as
prior year at $3.7 million. General revenue and program revenue exceeded expenses by this
amount. The expenses increased in Community Development mainly due to a shift in Code
Enforcement costs to this function category. Total revenues and expenses remain the same as
prior year.
AGENDA ITEM 4.E
City Council Meeting
December 10,2019
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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 $13.8 million, while total fund
balance reached $23.3 million. 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 63% of total General Fund expenditures, while total fund
balance represents 106% of that same amount.
The fund balance of the City of Rosemead's General Fund increased by $2.8 million during the
current year. Highlights of the change in fund balance are presented below:
• The General Fund revenues $24.7 million exceeded expenditures of $21.9 million and;
therefore, fund balance had an increase of $2.8 million. Several revenues had large
increases including property tax and interest revenues. Additional highlights of the
change in fund balance are presented below.
• General Fund revenues increased $263 thousand in FY 2018/19 over the prior year.
There were increases in property taxes by $438 thousand, interest revenues by $728
thousand, and parks and recreation revenues by $39 thousand. The increases were offset
by a reduction in sales tax by $194 thousand, building permits by $494 thousand, and
miscellaneous revenues by $316 thousand. Property taxes increased approximately 5%
due an increase in total net assessed value from the L.A. County's 2018/19 tax roll. TOT
remains the same as prior year. Interest revenues increased due to changes in investment
strategies; however, the priorities for safety, liquidity, and yield of investments were
maintained. Parks and recreation revenues increased due to more enrollment in the
summer and seasonal day camp programs, youth sports classes, and aquatic classes.
Sales tax decreased as a result of a one-time use tax payment received last year from GE
Electronics. Miscellaneous revenue decreased due to a one-time reimbursement received
last year from Southern CA Edison for participating in the LED light conversion. Lastly,
the decrease in building permits is due to the collection of fees last year for several
mixed-used projects, a 21-unit residential planned development, and several single-
family dwelling developments.
• General Fund expenditures decreased $976 thousand over the prior year for the following
reasons:
o General government expenditures decreased by $470 thousand. Prior year
number included cost for the 710 freeway litigation between the City and Metro.
AGENDA ITEM 4.E
City Council Meeting
December 10,2019
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The litigation ended last fiscal year, the City incurred minor expenses during the
current year.
o Public safety expenditures is one of the City's largest area of expenditures. The
Los Angeles County's Sheriffs Department contract increased by 2.57% over the
previous year and the Liability Trust Fund increased 0.5% as well. The City also
implemented the Success Through Awareness & Resistance (STAR) program
with Rosemead and Garvey School Districts where a Deputy teaches in-classroom
instruction to 4th, 5th, and 6th grade level students of the STAR program on
school grounds. The Sheriff contract increased $313 thousand for the deputy
service unit, $60 thousand for special events patrol, and $122 thousand for the
STAR program this year. The increased costs were offset by $549 thousand cost
savings. Cost decreased in the Public Safety Admin division because the City had
continuous turnover of part-time Community Services Officers during the year
and the City did not fund the Probation Officer position. In addition, the Code
Enforcement salary and benefit costs were no longer recorded under Public
Safety, it was moved to Community Development Department.
o Community development expenditures increased $105 thousand due Code
Enforcement costs transferred to this department. On November 13, 2018, the
City held a public hearing on substantial amendment to the 2015-2020
Consolidated Plan and 2018-19 Annual Action Plan. The salary and benefit of
Code Enforcement was no longer funded from CDBG. The City will utilize $390
thousand CDBG funding for the Garvey Park Restroom Renovation. During the
year, the salary and benefit cost for the Code Enforcement Division was
approximately $400 thousand funded from the General Fund. The increased costs
were offset by a cost saving of$300 thousand due to the City soliciting a Request
for Proposals to contract Building & Plan Checks services with another company
that provided lower costs.
o Public works expenditures increased $235 thousand primarily due to operational
costs increases. The custodial contract increased by $90 thousand, industrial
waste and sewer fees increased $45 thousand related 'to the cleanup of the wash
near State Route 60 freeway, and the hiring of a new Public Works Director
during the fiscal year $100 thousand.
o Capital outlay expenditures decreased $690 thousand due to a decline in capital
projects completed during the year. Capital projects were carried over during the
budget process.
AGENDA ITEM 4.E
City Council Meeting
December 10,2019
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o Parks and Recreation expenditures decreased by $86 thousand primarily due to
the vacancy of a Recreation Supervisor during the fiscal year.
o The City, like all other cities, are faced with an increase in retirement costs as a
result of the discount rate and assumption changes approved by the Ca1PERS
board; this has impacted the actuarial valuation performed and caused an increase
to participants' retirement contributions.
Revenues by Source
Investment Governmental Activities
income
6% Other revenue
1%
Franchise taxes
6%
Transient occupancy Property taxes
taxes 47%
12%
Sales and use taxes
28%
Expenses and Program Revenues
Governmental Activities
10,000,000
9,000,000 --------.____-----------.__._—_
8,000,000
7,000,000
6,000,000
5,000,000
4,000,000 —
3,000,000
2,000,000
1,000,000 111 Expenses
Revenues
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AGENDA ITEM 4.E
City Council Meeting
December 10,2019
Page 8 of 9
In conclusion, the City continues to remain in satisfactory financial condition thanks to a
relatively diverse and stable revenue base including sales tax, property tax, TOT, and various
licenses and permits. Property tax is the City's largest tax source at $9.6 million, sales tax as the
second largest revenue source at $5.7 million, and TOT at $2.2 million. The aggregate debt
service payments are reduced by $2.2 million during the current fiscal year due to principal and
interest payments. The City is ending its fiscal year 2018-19 with a healthy General Fund
Balance of$23.3 million.
Rosemead Housing Development Corporation (RHDC)
The RHDC Fund receives its funding from tenant rents and subsidies from the Successor
Agency. As operational costs have continued to increase and tenant rents have remained
relatively constant, the reliance on the subsidy from the Successor Agency 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.
The preparation and publication of this report is made possible through the dedication of the
entire Finance Department staff The department coordinated the closing of the books for the
fiscal year, ensuring timely and accurate reporting. This report would also not have been
possible without the leadership of the City Manager and continued commitment from the Mayor
and City Council in conducting the financial operations and corresponding financial disclosures
of the City in an open, public and transparent manner.
STAFF RECOMMENDATION
It is recommended that the City Council receive and file the City of Rosemead Comprehensive
Annual Financial Report (CAFR) and Rosemead Housing Development Corporation (RHDC)
Annual Financial Statement for the Fiscal Year ending June 30, 2019.
FISCAL IMPACT
There is no fiscal impact as this is a receive and file item.
STRATEGIC PLAN IMPACT—N/A
PUBLIC NOTICE PROCESS
This item has been noticed through the regular agenda notification process.
AGENDA ITEM 4.E
City Council Meeting
December 10,2019
Page 9 of 9
Prepared by:
Pearl Lieu, Finance Dir ctor
Attachment A:City of Rosemead Comprehensive Annual Financial Report
Attachment B:Rosemead Housing Development Corporation Financial Statement
AGENDA ITEM 4.E
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Attachment A
City of Rosemead
Comprehensive Annual Financial Report
CITY OF RCA
Comprehensive Annual Financial Report
Fiscal Year 2018-2019
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CITY OF ROSEMEAD, CALIFORNIA
COMPREHENSIVE ANNUAL FINANCIAL REPORT
FISCAL YEAR ENDED JUNE 30, 2019
Prepared by:
Finance Department
THIS PAGE INTENTIONALLY LEFT BLANK
CITY OF ROSEMEAD, CALIFORNIA
COMPREHENSIVE ANNUAL FINANCIAL REPORT
FOR THE FISCAL YEAR ENDED JUNE 30, 2019
TABLE OF CONTENTS
Page
Number
INTRODUCTORY SECTION
Letter of Transmittal
Directory of Officials vii
Organizational Chart viii
Certificate of Achievement of Excellence ix
FINANCIAL SECTION
INDEPENDENT AUDITORS' REPORT 1
MANAGEMENT'S DISCUSSION AND ANALYSIS 5
Government—Wide Financial Statements
Statement of Net Position 16
Statement of Activities 17
Fund Financial Statements
Balance Sheet—Governmental Funds 18
Reconciliation of the Balance Sheet of Governmental Funds
to the Statement of Net Position 19
Statement of Revenues, Expenditures and Changes in Fund
Balances—Governmental Funds 20
Reconciliation of the Statement of Revenues, Expenditures and
Changes in Fund Balances of Governmental Funds to the
Statement of Activities 21
Statement of Net Position—Proprietary Funds 22
Statement of Revenues, Expenses and Changes in Fund Net
Position—Proprietary Funds 23
Statement of Cash Flows—Proprietary Funds 24
Statement of Fiduciary Net Position—Fiduciary Funds 25
Statement of Changes in Fiduciary Net
Position—Fiduciary Funds 26
Notes to Financial Statements 27
REQUIRED SUPPLEMENTARY INFORMATION
Notes to Required Supplementary Information 61
Budgetary Comparison Schedules
General Fund 63
CITY OF ROSEMEAD, CALIFORNIA
COMPREHENSIVE ANNUAL FINANCIAL REPORT
FOR THE FISCAL YEAR ENDED JUNE 30, 2019
TABLE OF CONTENTS
Page
Number
FINANCIAL SECTION (Continued)
Pension Plan
Schedule of Proportionate Share of Net Pension Liability 64
Schedule of Plan Contributions 65
Schedule of Changes in Net Pension Liability/(Asset)and Related Ratios 66
Schedule of Plan Contributions 67
Schedule of Changes in Net OPEB Liability and Related Ratios 68
Schedule of Plan Contributions 69
COMBINING AND INDIVIDUAL FUND STATEMENTS AND SCHEDULES
Combining Balance Sheet—Nonmajor Governmental Funds 70
Combining Statement of Revenues, Expenditures and
Changes in Fund Balances—Nonmajor Governmental Funds 76
Budgetary Comparison Schedules
State Gas Tax Fund 82
Local Transportation/Sidewalk Grant 83
Proposition A 84
Proposition C 85
Measure R 86
Measure M 87
Air Quality Management District 88
Street Lighting 89
Development Impact Fee Traffic 90
Development Impact Fee Public Safety 91
Development Impact Fee General Government 92
Development Impact Fee Parks 93
Community Development Block Grant(CDBG) 94
Home Program 95
Rosemead Housing Development Corporation 96
Road Maintenance and Rehabilitation Account SB1 97
Combining Statement of Net Position—Internal Service Funds 98
Combining Statement of Revenues, Expenses and Changes in
Fund Net Position—Internal Service Funds 99
Combining Statement of Cash Flows—Internal Service Funds 100
•
Combining Statement of Assets and Liabilities—Agency Fund 101
CITY OF ROSEMEAD, CALIFORNIA
COMPREHENSIVE ANNUAL FINANCIAL REPORT
FOR THE FISCAL YEAR ENDED JUNE 30, 2019
TABLE OF CONTENTS
Page
Number
STATISTICAL SECTION
Net Position by Component 104
Changes in Net Position 106
Fund Balances of Governmental Funds 108
Changes in Fund Balances of Governmental Funds 110
Assessed Value and Estimated Actual Value of Taxable Property 112
Direct and Overlapping Property Tax Rates 113
Principal Property Taxpayers 114
Property Tax Levies and Collections 115
Ratios of Outstanding Debt by Type 116
Ratio of General Bonded Debt Outstanding 117
Direct and Overlapping General Bonded Debt Outstanding 118
Legal Debt Margin 120
Pledged-Revenue Coverage 122
Demographic and Economic Statistics 123
Principal Employers 124
Full-time and Part-time City Employees by Function 125
Operating Indicators by Function 126
Capital Assets Statistics by Function 128
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SANDRA ARAIENTA r I
CMC 8838 E.VALLEY BOULEVARD P.O BOX 399
COUNCIL MEMBERS: c» � 1r ROSEMEAD,CALIFORNIA 91770
SEAN DaNG
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POLLY Low a`O"poRmt-D J' FAX(626)307-9218
STEVEN LY
November 25, 2019
To the Honorable Mayor, Members of the City Council, and Citizens of the City of Rosemead:
We proudly present to you the City of Rosemead's Comprehensive Annual Financial Report
(CAFR). This report consists of management's representations concerning the finances of the
City of Rosemead. It was prepared by the Finance Department in accordance with Generally
Accepted Accounting Principles (GAAP) as promulgated by the Government Accounting
Standards Board (GASB). Management assumes full responsibility for the completeness and
reliability of all of the information presented in this report. We believe that the data presented is
complete and reliable in all material respects; that it is presented in a manner designed to fairly
set forth the financial activity of the City's various funds; and that all disclosures necessary to
enable the reader to gain a good understanding of the City's financial activity have been
included.
The City of Rosemead's financial statements have been audited by Lance, Soil, Lunghard, LLP
("LSL"), 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, 2019, 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, 2019, 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 requires that management provide a narrative introduction, overview, and
analysis to accompany the basic financial statements in the form of Management's Discussion
and Analysis (MD&A). This letter of transmittal is designed to complement the MD&A and
should be read in conjunction with it. The City of Rosemead's MD&A can be found immediately
following the report of the independent auditors.
Profile of the Government
The City of Rosemead, incorporated in 1959, is located in the southwestern part of the state.
The City occupies a land area of 5.5 square miles and serves a population of more than 55,000.
The City Council consists of five City Council Members who are elected at large by the citizens
of Rosemead and are on a rotational Mayor and Mayor Pro Tern term. The Council, as the
legislative body, represents the citizens of Rosemead to formulate Citywide policy, enact local
legislation, adopt budgets, and appoint the City Manager, City Attorney, and City Clerk. The
Council conducts City Council meetings and study sessions as required. The Council establish
policies and ordinances to ensure the development and maintenance of a balanced and stable
community for citizens, by servicing the community with resourceful, efficient, progressive and
professional leadership.
Public schools serving residents of Rosemead are under the authority of independent school
districts, but the City works closely with them to provide quality educational opportunities for
grades K-12. Garvey School District, Rosemead School District, and El Monte Union High
School District serve residents of Rosemead. There are 9 elementary schools, 3 middle
schools, and 1 high school. The City of Rosemead and El Monte Union High School District
share a 50/50 % contribution to fund one full-time Los Angeles County Sheriff's Deputy to
service as a Rosemead High School Resource Officer (SRO). The City of Rosemead shares a
50% contribution to fund crossing guard services for 15 location sites; and the Garvey School
District and Rosemead School District share the remaining 50% contribution. Additionally, the
City implemented the Success Through Awareness & Resistance (STAR) program with the
Rosemead and Garvey School Districts. A Deputy will teach in-classroom instruction to 4th,
5th, and 6th grade level students of the STAR program on school grounds.
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 three
of these legally separate entities can be found in Note 1(a) in the notes to the financial
statements.
The annual budget serves as the foundation for the City of Rosemead and its component unit's
financial planning and control. All business units and component units of the City of Rosemead
are required to submit requests for appropriation to the City Manager in mid-March of each year.
The City Manager uses these requests as the starting point for developing a proposed budget.
The City Manager then presents this proposed budget to the City Council for review prior to
June 30. The City Council is required to hold public hearings on the proposed budget and to
adopt a final budget no later than June 30, the close of the City of Rosemead's fiscal year. The
appropriated budget is prepared by fund and department (e.g., public safety).
ii
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
The City of Rosemead continues to remain in satisfactory financial condition thanks to a
relatively diverse and stable revenue base including sales tax, property tax, transient occupancy
tax, and various licenses and permits. The region has a varied retail and industrial base
including two national general merchandise stores that continues to perform well along with
some new restaurants and retail businesses.
Property tax is the City's largest tax source at $9.6 million and makes up approximately 39% of
the General Fund revenues. Total gross assessed value from the 2018/19 tax roll is $4.7 billion,
up $220 million from last year. This is primarily due to an increase in residential properties from
9,681.to 9,730 parcels/assessment counts and an increase in median sales price for single
family homes from $557,000 to $593,500. The residential category assessed value increased
approximately $183 million, which represents a 5.4% increase. The peak median price before
recession in 2006 was $495,000 and the current median price is $593,500, an increase of
19.9%. Data also show that Rosemead retains $0.0668 for every dollar of property tax collected
within the City.
Sales tax is the second largest revenue source for the General Fund, at $5.7 million and makes
up approximately 23% of the General Fund revenues. The City continues to receive sales tax
from three large general consumer goods businesses (Walmart, Target and Macy's), which
generate 40% of sales tax revenues. The City has continuously added new businesses such as
Ross, Lucille's Smokehouse Bar-B-Que, Boiling Crab, Starbucks, Sunshine Seafood, Skechers
(Walgreen's location), and St. Exotics over the last two years. The City anticipates new
retailers/restaurants opening when several mixed-used projects are completed.
Hotel transient occupancy tax (TOT) revenues are the third largest source of income to the
General Fund at $2.3 million and makes up approximately 9% of the General Fund revenues.
The three largest revenue producers are Double Tree, Fairfield Inn & Suites, and Motel 6, which
generates 69% of TOT tax revenues.
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Long-term Financial Planning
In December 2009, the City Council adopted a Strategic Plan to guide the organizational efforts
of the Council, Commission, and staff. The initial strategic planning process included an
extensive public outreach process and a series of public meetings. In 2012, the first biannual
update of the Strategic Plan was adopted by the City Council. The Strategic Plan was later
updated in 2016, both of which included public community meetings. The City Council held two
special public workshop meetings to develop a Strategic Plan update for 2018-2020 on August
1, 2018 and September 27, 2018. During these workshops, the City Council, community
members and staff participated in discussions to set the City's priorities. The updated strategic
plan for 2018-2020 uses the City of Rosemead's vision and key organizational goals, to set
clear priorities and action items for the next two years. The vision, key organizational goals, and
action items in the Strategic Plan update are designed to guide the decisions of the City
Council, focus of the City administration, and daily work of City staff. The Strategic Plan and
action items also provide accountability for City Council and City administration.
The three Key Organizational Goals are: 1) Ensure the City's continued financial viability by
actively pursuing quality economic development. 2) Beautify residential neighborhoods and
commercial corridors. 3) Enhance public safety and quality of life.
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 over 120 California public entities and is organized under a joint
powers agreement pursuant to California Government Code §6500 et seq. The purpose of the
Authority is to arrange and administer programs for the pooling of self-insured losses, to
purchase excess insurance and reinsurance, and to arrange for group-purchased insurance for
property and other coverage. Additional information can be found in Note 9 in the notes to the
Basic Financial Statements.
Pension and other postemployment benefits
The City of Rosemead is contracted with the California Public Employees Retirement System
(CaIPERS) for retirement benefits for full-time employees. Supplemental retirement benefits are
offered to qualified full-time employees, retirees, and part-time employees through Public
Agency Retirement Services (PARS). The City also provides health insurance benefits for
certain qualified retirees. In accordance with GASB Statement No. 68 and GASB Statement
No. 75, additional information on the City of Rosemead's pension plans and postemployment
benefits can be found in Notes 10 and 11 in the notes to the Basic Financial Statements.
iv
- i
Debt Administration
The City has no outstanding general obligation bonds as of June 30, 2019. The Successor
Agency to the Rosemead Community Development Commission includes the 2016 Tax
Allocation Bonds for $23,295,000 and 2010A Tax Allocation Bonds for $6,160,000. Additional
information on the Successor Agency's debt can be found in Note 14 in the notes to the Basic
Financial Statements.
Construction In Progress (CIP) Projects
Each year, Rosemead makes significant investments in maintaining, expanding, and improving
civic infrastructure for the benefit of residents and businesses. The City currently has a city-wide
Pavement Condition Index (PCI) of 75.6, which is higher than neighboring cities.
Current projects that are currently in progress and will complete in FY 2019/20 include the City
Hall Basement Improvement Project, Phase II, Traffic Signal Upgrade Project, Garvey Park
Restroom Renovation Project, Walnut Grove Avenue Resurfacing Project, Safe Routes (SR2S)
Sidewalk Gap Closure Project, and High Intensity Activated Crosswalk Project—Mission/Ivar.
Major Accomplishments
Substantial progress has been made during the past fiscal year toward responding to priorities
previously identified by City Council and staff. Some of those accomplishments include the
completion of Safe Route to School Project (Savannah Elementary), Garvey Avenue
Resurfacing Project (from Del Mar Ave to Eastern City Limit), Sidewalk Installation at
Klingerman, Bridge Maintenance Program, Garvey Center Electric Charging Station Project,
City Hall Basement Improvement.Project, Phase I, WIFI Installation for Garvey Center and
Rosemead Park, and improvements to various roadways, sidewalks, parks, storm water, and
traffic signal upgrades.
With the completion of the Garvey Avenue Specific Plan, the City will continue its efforts to bring
national name-brand businesses to Rosemead to spur and guide economic development.
Recent project completion includes a residential/commercial mixed-use project called the "New
Garvey 168 Plaza"; the location site is at 8479 Garvey Avenue. They received a Certificate of
Occupancy and held their grand opening event on April 27, 2019. The New Garvey 168 Plaza
comprises of a 10,460 square feet commercial property and 36 residential units.
Future Initiatives
Future development includes the Garvey Garden Plaza Project with a location site at 8408
Garvey Ave; this project is currently under construction and will complete in early 2020. The
project comprises a 11,860 square feet commercial property and 46 residential units. The City
also received entitlement applications for a dual hotel project, Residence Inn and Courtyard by
Marriott, with the location site at 500 Montebello Blvd. next to Doubletree Hotel. The project will
demolish all existing building and improvements on the property and is expected to build 97
rooms for the Marriot Residence Inn and 105 rooms for the Marriott Courtyard. The City also
anticipates the Hampton Inn and Suites coming to the City of Rosemead in FY 2019/20. These
projects will generate more Transient Occupancy Tax(TOT) revenues in the future.
v
During FY 2019/20, the City will continue its excellent work to improve and maintain the public
infrastructure and aesthetics of the community. An aggressive capital improvement program
(CIP) administered by the Public Works Department includes, funding for improvements to ,
various roadways, sidewalks and traffic signal upgrades, parks and storm water improvements.
The Annual Slurry Seal project, Sidewalk Replacement project, Traffic Impact Analysis,
Crosswalk Installation project, and City Hall Basement Improvement Phase I project were
completed in FY 2018/19. The City also established its first Community Garden.
In the upcoming year, the community will see the Walnut Grove Resurfacing Project Phase
and II, Valley Boulevard Resurfacing Project Phase I and II, Walnut Grove Utility Underground
Project from Marshall Avenue to Valley Boulevard, and City Entry Monuments will be started
and completed in FY 2019/20. The City anticipates the Garvey Park Restroom Renovation, Duff
Park Improvement project, construction of a dog park, and replacement of picnic tables and
trash receptacles will be completed in FY 2019/20.
Acknowledgements
The preparation and publication of this report is made possible through the dedication of the
entire Finance Department staff. The department coordinated the closing of the books for the
fiscal year, ensuring timely and accurate reporting. This report would also not have been
possible without the leadership of the City Manager, Gloria Molleda, and continued commitment
from the Mayor and City Council in conducting the financial operations and corresponding
financial disclosures of the City in an open, public and transparent manner. Finally, thanks are
extended to the firm of Lance, Soli, & Lunghard, LLP for their contributions towards improving
our financial reporting.
Respectfully submitted,
ifirk
Pearl Lieu
Director of Finance
vi
CITY OF ROSEMEAD
Directory of Officials
June 30, 2019
City Council
Margaret Clark, Mayor
Sandra Armenta, Mayor Pro Tern
Sean Dang, Council Member
Polly Low, Council Member
Steven Ly, Council Member
City Management Staff
Gloria Molleda, City Manager
Benjamin Kim, Assistant City Manager
Lt. Chris Kusayanagi, Chief of Police
Rachel H. Richman, City Attorney
Ericka Hernandez, City Clerk
Thomas Boecking, Parks and Recreation Director
Christopher Daste, Public Works Director
Pearl Lieu, Finance Director
Vacant, Community Development Director
vii
CITY OF ROSEMEAD
Function Based Organization Chart
Planning Traffic
Commission L Commission
Beautification r City Council
Commission Parks
Commission
City Clerk
Assistant City Attorney
City Manager
City Manager
Technology&
I——— Business Support Finance
——— Human Resources Community
Development
——- Public Safety Public Works
——- Risk Management - Parks&Recreation
•
VIII
Government Finance Officers Association
Certificate of
Achievement
for Excellence
in Financial
Reporting
Presented to
City of Rosemead
California
For its Comprehensive Annual
Financial Report
for the Fiscal Year Erided
June 30, 2018
0,04.2. 47/244. 2)tetu:Le
Executive Director/CEO
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••
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•
CPAs AND ADVISORS
INDEPENDENT AUDITORS' REPORT
To the Honorable Mayor and Members of the City Council
City of Rosemead, California
Report on the Financial Statements
We have audited the accompanying financial statements of the governmental activities, each major fund,
and the aggregate remaining fund information of City of Rosemead, California, (the City) as of and for the
year ended June 30, 2019, and the related notes to the financial statements, which collectively comprise
the City's basic financial statements as listed in the table of contents.
Management's Responsibility for the Financial Statements
Management is responsible for the preparation and fair presentation of these financial statements in
accordance with accounting principles generally accepted in the United States of America; this includes
the design, implementation, and maintenance of internal control relevant to the preparation and fair
presentation of financial statements that are free from 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 amounts and disclosures in
the financial statements. The procedures selected depend on the auditor's judgment, including the
assessment of the risks of material misstatement of the financial statements, whether due to fraud or
error. In making those risk assessments, the auditor considers internal control relevant to the entity's
preparation and fair presentation of the financial statements in order to design audit procedures that are
appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of
the entity's internal control. Accordingly, we 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.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for
our audit opinions.
PrimeGlobal
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203 N.Brea Blvd.,Suite 203 I Brea,CA 92821 I Phone:714.672.0022
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To the Honorable Mayor and Members of the City Council
City of Rosemead, California
Opinions
In our opinion, the financial statements referred to above present fairly, in all material respects, the
respective financial position of the governmental activities, each major fund, and the aggregate remaining
fund information of the City of Rosemead, California, as of June 30, 2019, and the respective changes in
financial position and, where applicable, cash flows 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 management's
discussion and analysis, the budgetary comparison schedule for the general fund, the schedule of
changes in net pension liability/(asset) and related ratio, the schedules of plan contributions, the schedule
of proportionate share of the net pension liability, and the schedule of changes in net OPEB liability and
related ratios be presented to supplement the basic financial statements. Such information, although not
a part of the basic financial statements, is required by the Governmental Accounting Standards Board,
who considers it to be an essential part of financial reporting for placing the basic financial statements in
an appropriate operational, economic, or historical context. We have applied certain limited procedures to
the required supplementary information in accordance with auditing standards generally accepted in the
United States of America, which consisted of inquiries of management about the methods of preparing
the information and comparing the information for consistency with management's responses to our
inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic
financial statements. We do not express an opinion or provide any assurance on the information because
the limited procedures do not provide us with sufficient evidence to express an opinion or provide any
assurance.
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 fund
financial statements and schedules, and statistical section are presented for purposes of additional
analysis and are not a required part of the basic financial statements.
The combining and individual fund financial statements and 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. The 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 fund financial statements and
schedules are fairly stated, in all material respects in relation to the basic 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.
2
S :
AVD AD.'i SCRS
To the Honorable Mayor and Members of the City Council
City of Rosemead, California
Other Reporting Required by Government Auditing Standards
In accordance with Government Auditing Standards, we have also issued our report dated
November 25, 2019 on our consideration of the City's internal control over financial reporting and on our
tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and
other matters. The purpose of that report is solely 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 effectiveness of the City's 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.
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November 25, 2019
3
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4
Management's Discussion and Analysis
As management of the City of Rosemead, we offer readers of the City of Rosemead's financial
statements this narrative overview and analysis of the financial activities of the City of Rosemead
for the fiscal year ended June 30, 2019. We encourage readers to consider the information
presented here in conjunction with additional information that we have furnished in our letter of
transmittal and the City's financial statements.
Financial Highlights
• At the end of Fiscal Year 2018/19, the fund balance of General Fund increased
$2.8 million. This is due to a combination of increases in property tax and interest
revenues and a decrease in General Fund expenditures due to less capital spending.
• At the end of the current fiscal year, unassigned fund balance for the General Fund was
$13.8 million or 63% of total General Fund expenditures. $7.7 million or 31% of General
Fund revenues is set aside to meet the City's reserve policy.
• The assets related to Governmental Activities has increased by approximately $3.7
million which is largely due to an increase in cash and investments.
Overview of the Financial Statements
This discussion and analysis is intended to serve as an introduction to the City of Rosemead's
basic financial statements. The City of Rosemead's basic financial statements comprise three
components: 1) government-wide financial statements, 2) fund financial statements, and 3) notes
to the financial statements. This report also contains other supplemental information in addition
to the basic financial statements themselves.
Government-wide Financial Statements. The government-wide financial statements are
designed to provide readers with a broad overview of the City of Rosemead's finances, in a
manner similar to private-sector business.
The statement of net 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)
5
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 government), but also a legally separate Successor Agency, 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 16-17 of this report.
Fund financial statements. A fund is a grouping of related accounts that is used to maintain
control over resources that have been segregated for specific activities or objectives. The City of
Rosemead, like other state and local governments, uses fund accounting to ensure and
demonstrate compliance with finance-related legal requirements. All of the funds of the City of
Rosemead can be divided into three categories: governmental funds, internal service funds and
fiduciary funds.
Governmental funds. Governmental funds are used to account for essentially the same
functions reported as governmental activities in the government-wide financial statements.
However, unlike the government-wide financial statements, governmental fund financial
statements focus on near-term inflows and outflows of spendable resources, as well as on
balances of spendable resources available at the end of the fiscal year. Such information may
be useful in evaluating a government's near-term financing requirements.
Because the focus of governmental funds is narrower than that of the government-wide financial
statements, it is useful to compare the information presented for governmental funds with similar
information presented for governmental activities in the government-wide financial statements.
By doing so, readers may better understand the long-term impact of the government's near-term
financing decisions. Both the governmental fund balance sheet and the governmental fund
statement of revenues, expenditures, and changes in fund balances provide a reconciliation to
facilitate this comparison between governmental funds and governmental activities.
The City of Rosemead and its component units maintain 17 active governmental funds.
Information is presented separately in the governmental fund balance sheet and in the
governmental fund statement of revenues, expenditures, and changes in fund balances for the
General Fund, considered to be a major fund. Data from the other 16 governmental funds are
combined into a single, aggregated presentation. Individual fund data for each of these non-major
governmental funds is provided in the form of combining statements elsewhere in this report.
The City of Rosemead adopts an annual appropriated budget for all its funds. A budgetary
comparison statement has been provided for the General Fund, State Gas Tax Fund, Local
Transportation/Sidewalk Grant, Proposition A Fund, Proposition C Fund, Measure R Fund,
Measure M Fund, Air Quality Management District Fund, Street Lighting Fund, Development
Impact Fee Funds, Community Development Block Grant Fund, HOME Program Fund,
Rosemead Housing Development Corporation Fund, and Road Maintenance and Rehabilitation
Account SB1 Fund, to demonstrate compliance with this budget.
6
The basic governmental fund financial statements can be found on pages 18-21 of this report.
Fiduciary funds. Fiduciary funds are used to account for resources held for the benefit of
parties outside the government. Fiduciary funds are not reflected in the government-wide
financial statement because the resources of those funds are not available to support the City of
Rosemead's own programs. The accounting used for fiduciary funds is much like that used for
proprietary funds. The basic fiduciary fund financial statements can be found on page 25-26 of
this report.
Notes to the financial statements.The notes provide additional information that is essential
to a full understanding of the data provided in the government-wide and fund financial statements.
The notes to the Basic Financial Statements can be found on pages 27-60 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 61-69 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 70-101 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 $78
million at the close of the most recent fiscal year.
A significant portion of the City of Rosemead's net position (65%) 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.
7
City of Rosemead's Net Position
As of June 30, 2019 and 2018
(thousands)
Governmental Activities
2019 2018
Current and other assets 37,251 30,515
Capital assets 50,883 53,587
Total assets 88,134 84,102
Deferred outflows of resources 3,583 4,232
Long-term liabilities outstanding 9,680 10,268
Other liabilities 2,952 2,930
Total liabilities 12,632 13,198
Deferred inflows of resources 989 783
Net assets:
Invested in capital assets, net of related debt 50,883 53,587
Restricted 9,730 5,467
Unrestricted 17,483 15,299
Total net position $ 78,096 $ 74,353
An additional portion of the City of Rosemead's net position (12.5%) represents resources that
are subject to external restrictions on how they may be used. The remaining balance of
unrestricted net position ($17.5 million) may be used to meet the government's ongoing
obligations to citizens and creditors.
At the end of the current fiscal year, the City of Rosemead is able to report positive net position
balances. The situation also held true for the prior fiscal year.
8
City of Rosemead's Changes in Net Position
Years Ended June 30, 2019 and 2018
(thousands)
Governmental
Activities.
2019 2018
Program revenues:
Charges for services $ 7,897 $ 7,864
Operating grants and contributions 4,122 4,822
Capital grants and contributions 1,218 1,172
General revenues:
Property taxes 9,567 9,129
Other taxes 9,380 9,570
Investment income 1,158 210
Other 124 648
Total revenues 33,466 33,415
Expenses:
General government 4,205 4,554
Public safety 9,126 9,500
Public works 7,662 9,554
Community development 6,353 3,410
Parks and recreation 2,377 2,746
Total expenses 29,723 29,764
Change in net position 3,743 3,651
Net position-June 30, 2018 74,353 72,884
Restatement - (2,182)
Net position -June 30, 2019 $ 78,096 $ 74,353
Governmental activities. The City of Rosemead's change in net position remained the same
as prior year at$3.7 million. General revenue and program revenue exceeded expenses by this
amount. The expenses increased in Community Development mainly due to a shift in Code
Enforcement costs to this function category. Total revenues and expenses remained the same
as prior year.
9
Revenues by Source
Investment Governmental Activities
income
6% Other revenue
1%
Franchise taxes
6%
Transient occupancy Property taxes
taxes 47%
12%
Sales and use taxes
28%
Expenses and Program Revenues
Governmental Activities
10,000,000
9,000,000 -
8,000,000
7,000,000
6,000,000 -
5,000,000 -
4,000,000 - —
3,000,000
2,000,000
1,000,000 , — ■Expenses
Revenues
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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$33 million, an increase of$7 million in comparison with the prior year.
Approximately 42% of this total amount, $13.8 million constitutes unassigned, undesignated fund
10
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$13.8 million,while
total fund balance reached $23.3 million. 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 63% of total General Fund expenditures, while total fund
balance represents 106% of that same amount.
The fund balance of the City of Rosemead's General Fund increased by $2.8 million during the
current year. Highlights of the change in fund balance are presented below:
• The General Fund revenues $24.7 million exceeded expenditures.of $21.9 million and;
therefore, fund balance had an increase of $2.8 million. Several revenues had large
increases including property tax and interest revenues. Additional highlights of the
change in fund balance are presented below.
• General Fund revenues increased $263 thousand in FY 2018/19 over the prior year.
There were increases in property taxes by $438 thousand, interest revenues by $728
thousand, and parks and recreation revenues by $39 thousand. The increases were
offset by a reduction in sales tax by $194 thousand, building permits by $494 thousand,
and miscellaneous revenues by$316 thousand. Property taxes increased approximately
5% due an increase in total net assessed value from the L.A. County's 2018/19 tax roll.
TOT remains the same as prior year. Interest revenues increased due to changes in
investment strategies; however, the priorties for safety, liquidity, and yield of investments
were maintained. Parks and recreation revenues increased due to more enrollment in the
summer and seasonal day camp programs, youth sports classes, and aquatic classes.
Sales tax decreased as a result of a one-time use tax payment received last year from GE
Electronics. Miscellaneous revenue decreased due to a one-time reimbursement received
last year from Southern CA Edison for participating in the LED light conversion. Lastly,
the decrease in building permits is due to the collection of fees last year for several mixed-
used projects, a 21-unit residential planned development, and several single-family
dwelling development.
• General Fund expenditures decreased $976 thousand over the prior year for the following
reasons:.
o General government expenditures decreased by $470 thousand. Prior year
number included cost for the 710 freeway litigation between the City and Metro.
The litigation ended last fiscal year, the City incurred minor expenses during the
current year.
o Public safety expenditures is one of the City's largest area of expenditures. The
Los Angeles County's Sheriffs Department contract increased by 2.57% over the
previous year and the Liability Trust Fund increased 0.5% as well. The City also
11
implemented the Success Through Awareness&Resistance(STAR) program with
Rosemead and Garvey School Districts where a Deputy teaches in-classroom
instruction to 4th, 5th, and 6th grade level students of the STAR program on school
grounds. The Sheriff contract increased$313 thousand for the deputy service unit,
$60 thousand for special events patrol, and $122 thousand for the STAR program
this year. The increased costs were offset by $549 thousand cost savings. Cost
decreased in the Public Safety Admin division because the City had continuous
turnover of part-time Communty Services Officers during the year and the City did
not fund the Probation Officer position. In addition, the Code Enforcement salary
and benefit costs were no longer recorded under Public Safety, it was moved to
Community Development Department.
o Community development expenditures increased $105 thousand due Code
Enforcement costs transferred to this department. On November 13, 2018, the
City held a public hearing on substantial amendment to the 2015-2020
Consolidated Plan and 2018-19 Annual Action Plan. The salary and benefit of
Code Enforcement was no longer funded from CDBG. The City will utilize
$390,000 CDBG funding for the Garvey Park Restroom Renovation. During the
year, the salary and benefit cost for the Code Enforcement Division was
approximately $400 thousand funded from the General Fund. The increased
costs were offset by a cost saving of $300 thousand due to the City soliciting a
Request for Proposals to contract Building & Plan Checks services with another
company that provided lower costs.
o Public works expenditures increased $235 thousand primarily due to operational
costs increases. The custodial contract increased by $90 thousand, industrial
waste and sewer fees increased $45 thousand related to the clean up of the wash
near State Route 60 freeway, and the hiring of a new Public Works Director during
the fiscal year$100 thousand.
o Capital outlay expenditures decreased $690 thousand due to a decline in capital
projects completed during the year. Capital projects were carried over during the
budget process.
o Parks and Recreation expenditures decreased by $86 thousand primarily due to
the vacancy of a Recreation Supervisor during the fiscal year.
o The City, like all other cities, are faced with an increase in retirement costs as a
result of the discount rate and assumption changes approved by the CaIPERS
board;this has impacted the actuarial valuation performed and caused an increase
to participants' retirement contributions.
General Fund Budget Analysis. The City's General Fund collected revenues of$669 thousand in
comparison to the budgeted estimates or 2% more than the budget. Property tax increases of
$438 thousand due to an increase in tax values. Licenses and permits increases of $167
thousand is due to building permit revenues. Interest revenues increased $728 thousand due to
12
change of investment strategies. Intergovernmental revenues decreased $777 thousand due to
capital projects were not started; therefore, the City was unable to file for budgeted state grant
reimbursements for the Dog Park and Duff Park projects.
The General Fund expenditure budget to actual variance of$997 thousand was due to the City
completing less CIP projects than budgeted as a result of turnover in the Public Works
Department.
Proposition A, C, Measure R and Measure M Funds. These four 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 and Measure M mainly focus on
new transportation infrastructure development. Expenditures for the Proposition A fund are
increasing as greater efforts are being made to increase fixed route ridership as are the operating
expenditures for Dial-A-Ride in the Proposition C Fund. The City is utilizing Measure R and
Measure M funds for capital improvement projects for street improvements, paving, sidewalk
installation, traffic study, and transportation program planning.
Rosemead Housing Development Corporation (RHDC). The RHDC Fund receives its funding
from tenant rents and subsidies from the Successor Agency. As operational costs have continued
to increase and tenant rents have remained relatively constant, the reliance on the subsidy from
the Successor Agency 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, 2019, amounts to $50.9 million (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:
• Completion of Safe Route to School Project (Savannah Elementary)
• Completion of Garvey Avenue Resurfacing Project (from Del Mar Ave to Eastern City
Limit)
• Completion of Sidewalk Installation at Klingerman
• Completion of the Bridge Maintenance Program
13
• Completion of Garvey Center Electric Charging Station Project
• Completion of City Hall Basement Improvement Project, Phase I
• Completion of WIFI Installation for Garvey Center and Rosemead Park
• Construction in progress for City Hall Basement Improvement Project, Phase II
• Construction in progress for Traffic Signal Upgrade Project
• Construction in progress for Garvey Park Restroom Renovation Project
• Construction in progress for Walnut Grove Avenue Resurfacing Project
• Construction in progress for Safe Routes (SR2S) Sidewalk Gap Closure Project
• Construction in progress for High Intensity Activated Crosswalk Project— Mission/Ivar
City of Rosemead's Capital Assets
(net of depreciation)
(thousands)
,Governmental Activities
2019 2018
Land $ 4,417 $ 4,417
Buildings 14,003 14,411
Improvements other than
Buildings 3,673 3,955
Machinery and equipment 129 131
Autos and trucks 186 351
Furniture and office equipment 101 133
Infrastructure 28,096 28,590
Construction in progress 278 1,599
Total $ 50,883 $ 53,587
Additional information on the City of Rosemead's capital assets can be found in note No. 7, found
on pages 40-41 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$27,295,000. Of this
amount, all of it is backed by future property tax increment revenues.
City of Rosemead's Outstanding Debt
Revenue Bonds
(thousands)
Governmental Activities
2019 2018,
Tax Allocation Bonds $ 27,295 $ 29,455
14
• The Successor Agency's total bonded debt decreased by $2.2 million during the current
fiscal year due to principal and interest payments. For more detailed information about
the Successor's Agency Long Term Debt, please refer to Note No. 14 on pages 59-60 of
the Basic Financial Statements.
Economic Factors and Next Year's Budgets and Rates
• As discussed throughout this Management's Discussion and Analysis report, there were
modest General Fund revenue increases in FY 2018/19. Property tax revenues have
shown modest increases and are projected to continue with steady growth pattern. Sales
taxes are expected to increase due to new restaurants and stores addition to the
community. License and permit revenues are expected to increase due to an increase in'
growth and development in the City. Additionally, TOT revenues are expected to increase
due to future projects with the Hampton Inn & Suites and Marriot hotel.
• The local economy is projected to continue its modest growth in the coming year and has
been reflected in the City's FY 2019/20 Revenue budget. At the time of budget preparation
and up to its adoption, General Fund Revenue is projected to increase 3% over the FY
2018/19 budgeted amount.
• The City adopted the General Fund FY 2019/20 budget with a projected $20.2 million fund
balance reserve. With the FY 2018/19 revenue surplus, the projected fund balance for
the General Fund is $23 million. The Operating Budget for Fiscal Year 2019/20 is a well
balanced budget. In order to maintain a balanced budget, it will be essential for the City
to continue its history of conservative spending.
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:
Finance Director
8838 East Valley Boulevard
Rosemead, CA 91770.
15
CITY OF ROSEMEAD,CALIFORNIA
STATEMENT OF NET POSITION
JUNE 30,2019
Governmental
Activities
Assets:
Cash and investments $ 32,456,810
Receivables:
Accounts 2,893,756
Notes and loans 336,872
Accrued interest 290,652
Prepaid costs 758,800
Inventories 2,034
Capital assets, not being depreciated 4,694,658
Capital assets, net of depreciation 46,187,894
Net pension asset 512,555
Total Assets 88,134,031
Deferred Outflows of Resources:
Deferred outflows related to pensions 3,485,522
Deferred outflows related to other post employment benefits 97,132
Total Deferred Outflows of Resources 3,582,654
Liabilities:
Accounts payable 2,353,908
Accrued liabilities 217,461
Retentions payable 21,556
Deposits payable 40,385
Compensated absences, due within one year 318,076
Noncurrent liabilities:
Compensated absences, due in more than one year 262,566
Net pension liability 8,688,626
Net other post employment benefits liability 729,082
Total Liabilities 12,631,660
Deferred Inflows of Resources:
Deferred inflows related to pensions 895,771
Deferred inflows related to other post employment benefits 93,078
Total Deferred Inflows of Resources 988,849
Net Position:
Investment in capital assets 50,882,552
Restricted:
Community services 202,232
Low and moderate income housing 340,982
Public works 5,376,769
Capital projects 3,810,219
Unrestricted 17,483,422
Total Net Position $ 78,096,176
The notes to financial statements are an integral part of this statement.
16
CITY OF ROSEMEAD,CALIFORNIA
STATEMENT OF ACTIVITIES
FOR THE YEAR ENDED JUNE 30,2019
Net(Expenses)
Revenues and
Changes in
Program Revenues Net Position
Operating Capital
Charges for Contributions Contributions Governmental
Expenses Services and Grants and d Grants Activities
Functions/Programs
Governmental Activities:
General government $ 4,205,482 $ 422,329 $ 397,042 $ - $ (3,386,111)
Public safety 9,125,853 701,520 - 1,146,074 (7,278,259)
Community development 6,353,025 2,827,811 545,435 - (2,979,779)
Parks and recreation 2,376,713 958,176 - - (1,418,537)
Public works 7,662,344 2,987,193 3,179,697 71,685 (1,423,769)
Total Governmental Activities $ 29,723,417 $ 7,897,029 $ 4,122,174 $ 1,217,759 (16,486,455)
General Revenues:
Taxes:
Property taxes,levied for general purpose 9,566,800
Sales taxes 5,735,491
Transient occupancy taxes 2,314,723
Franchise taxes 1,254,048
Other taxes 75,774
Use of money and property 1,158,407
Other 123,924
Total General Revenues 20,229,167
Change in Net Position 3,742,712
Net Position at the Beginning of the Year, 74,353,464
Net Position at the End of the Year $ 78,096,176
The notes to financial statements are an integral part of this statement.
17
CITY OF ROSEMEAD,CALIFORNIA
BALANCE SHEET
GOVERNMENTAL FUNDS
JUNE 30,2019
Other Total
Governmental Governmental
General Funds Funds
Assets:
Cash and investments $ 21,642,289 $ 10,081,468 $ 31,723,757
Receivables:
Accounts 2,293,000 600,756 2,893,756
Notes and loans 336,872 - 336,872
Accrued interest 290,652 - 290,652
Prepaid costs 758,800 - 758,800
Due from other funds 182,165 - 182,165
Inventories 2,034 - 2,034
Total Assets $ 25,505,812 $ 10,682,224 $ 36,188,036
Liabilities, Deferred inflows of Resources,
and Fund Balances:
Liabilities:
Accounts payable $ 1,702,524 $ 651,384 $ 2,353,908
Accrued liabilities 198,394 19,067 217,461
Deposits payable 484 39,901 40,385
Due to other funds - 182,165 182,165
Retentions payable - 21,556 21,556
Total Liabilities 1,901,402 914,073 2,815,475
Deferred Inflows of Resources:
Unavailable revenues 309,456 61,741 371,197
Total Deferred Inflows of Resources 309,456 61,741 371,197
Fund Balances:
Nonspendable:
Notes and loans 109,785 - 109,785
Prepaid costs 758,800 - 758,800
Inventory 2,034 - 2,034
Restricted:
Community services - 202,232 202,232
Low and moderate income housing 340,982 340,982
Public works 5,376,769 5,376,769
Capital projects - 3,810,219 3,810,219
Committed:
Capital projects 825,391 - 825,391
Reserve contingency 7,667,401 - 7,667,401
Assigned:
Building maintenance 71,617 - 71,617
Tree in lieu 50,250 - 50,250
Unassigned 13,809,676 (23,792) 13,785,884
Total Fund Balances 23,294,954 9,706,410 33,001,364
Total Liabilities, Deferred Inflows of
Resources,and Fund Balances $ 25,505,812 $ 10,682,224 $ 36,188,036
The notes to financial statements are an integral part of this statement.
18
CITY OF ROSEMEAD,CALIFORNIA
RECONCILIATION OF THE BALANCE SHEET OF GOVERNMENTAL FUNDS
TO THE STATEMENT OF NET POSITION
JUNE 30,2019
Amounts reported for governmental activities in the statement of net position are different because:
Total fund balances-governmental funds $ 33,001,364
Capital assets used in governmental activities are not financial resources and,
therefore, are not reported in the funds. 50,815,697
Compensated absences are not due and payable in the current period,and
therefore, are not reported in the funds. (580,642)
Governmental funds report all pension contributions as expenditures; however,
in the statement of activities,the excess/deficiency of the total pension liability
over/under the plan fiduciary net position is reported as a net pension liability/asset.
CaIPERS Miscellaneous Plan net pension liability $ (8,688,626)
PARS Retirement Enhancement Plan net pension asset 512,555 (8,176,071)
Pension-related deferred outflows of resources that have not been included as
financial uses in the governmental fund activity are as follows:
Contributions made after the actuarial measurement date 1,389,145
Changes in assumptions 802,281
Difference between expected and actual experiences 275,200
Net difference between projected and actual earnings on plan investments 58,762
Adjustments due to differences in proportions 169,283
Difference in proportionate share 790,851 3,485,522
Other post-employment-related deferred outflows of resources that have not been
included asfinancial uses in the governmental fund activity are as follows:
Contributions made after the actuarial measurement date 97,132 97,132
Pension-related deferred inflows of resources that have not been included as
financial resources in the governmental fund activity are as follows:
Changes in assumptions (190,220)
Difference between expected and actual experiences (282,747)
Adjustments due to differences in proportions (343,564)
Difference in proportionate share (79,240) (895,771)
Governmental funds report all other post-employment benefits contributions as
expenditures; however, in the statement of net position,the excess of the total
other post-employment benefits liability over the plan fiduciary net position is
reported as a net other post-employment benefits liability. (729,082)
Other post-employment-related deferred inflows of resources that have not been
included as financial resources in the governmental fund activity are as follows:
Net difference between projected and actual earnings on plan investments - (93,078)
Revenues reported as unavailable revenue in the governmental funds are recognized
in the statement of activities. 371,197
Internal service funds are used by management to charge the costs of certain
activities,such as equipment and technology replacement,to individual funds.
The assets and liabilities of the internal service funds must be added to the
statement of net position. 799,908
Net Position of Governmental Activities $ 78,096,176
The notes to financial statements are an integral part of this statement.
19
CITY OF ROSEMEAD, CALIFORNIA
STATEMENT OF REVENUES,
EXPENDITURES AND CHANGES IN FUND BALANCES ;
GOVERNMENTAL FUNDS
FOR THE YEAR ENDED JUNE 30,2019
Other Total
Governmental Governmental
General _ Funds Funds
Revenues:
Taxes $ 18,946,836 $ - $ 18,946,836
Licenses and permits 2,636,026 - 2,636,026
Intergovernmental 274,414 8,313,797 8,588,211
Charges for services 1,135,748 517,347 1,653,095
Use of money and property 935,375 223,032 1,158,407
Fines and forfeitures 622,221 - 622,221
Contributions 2,721 - 2,721
Developer participation - 117,115 117,115
Miscellaneous 180,201 67,442 247,643
Total Revenues 24,733,542 9,238,733 33,972,275
Expenditures:
Current:
General government 3,896,082 181,434 4,077,516
Public safety 9,062,545 27,100 9,089,645
Community development 2,137,789 1,499,903 3,637,692
Parks and recreation 2,280,559 62,893 2,343,452
Public works 4,277,070 2,970,321 7,247,391
Capital outlay 268,824 227,014 495,838
Total Expenditures 21,922,869 4,968,665 26,891,534
Net Change in Fund Balances 2,810,673 4,270,068 7,080,741
Fund Balances at the Beginning of the Year 20,484,281 5,436,342 25,920,623
Fund Balances at the End of the Year $ 23,294,954 $ 9,706,410 $ 33,001,364
I
The notes to financial statements are an integral part of this statement.
20
CITY OF ROSEMEAD,CALIFORNIA
RECONCILIATION OF THE STATEMENT OF REVENUES,EXPENDITURES,
AND CHANGES IN FUND BALANCES OF GOVERNMENTAL FUNDS
TO THE STATEMENT OF ACTIVITIES
FOR THE YEAR ENDED JUNE 30,2019
Amounts reported for governmental activities in the statement of activities are different because:
Net change in fund balances-total governmental funds $ 7,080,741
Governmental funds report capital outlays'as expenditures. However, in the
statement of activities,the cost of these assets is allocated over their estimated
useful lives and reported as depreciation expense. This is the amount by which
capital outlays exceeded depreciation expense in the current period.
Capital outlay $ 261,941
Depreciation (2,918,144), (2,656,203)
Compensated absences 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. 92,343
Pension obligation 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. (280,115)
Other post-employment benefits obligation 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. (50,995)
Revenues reported as unavailable revenue in the governmental funds are
recognized in the statement of activities. These are included in the operating
contributions and miscellaneous income in the statement of activities. (506,146)
Internal service funds are used by management to charge the costs of certain
activities,such as equipment and technology replacement,to individual funds.
The net revenues of the internal service funds are reported with governmental
. activities. 63,087
Change in Net Position of Governmental Activities $ 3,742,712
The notes to financial statements are an integral part of this statement.
21
CITY OF ROSEMEAD,CALIFORNIA
STATEMENT OF NET POSITION
PROPRIETARY FUNDS
JUNE 30,2019
Governmental
Activities
Internal
Service Funds
Assets:
Current Assets:
Cash and investments $ 733,053
Total Current Assets 733,053
Noncurrent Assets:
Capital assets, net of accumulated depreciation 66,855
Total Noncurrent Assets 66,855
Total Assets 799,908
Net Position:
Investment in capital assets 66,855
Unrestricted 733,053
Total Net Position $ 799,908
The notes to financial statements are an integral part of this statement.
22
CITY OF ROSEMEAD,CALIFORNIA
STATEMENT OF REVENUES, EXPENSES
AND CHANGES IN FUND NET POSITION
PROPRIETARY FUNDS
FOR THE YEAR ENDED JUNE 30,2019
Governmental
Activities
Internal
Service Funds
Operating Revenues:
Charges for services $ 266,100
Total Operating Revenues 266,100
Operating Expenses:
Contractual services 140,902
Depreciation expense 62,111
Total Operating Expenses 203,013
Operating Income 63,087
Net Position at the Beginning of the Year 736,821
Net Position at the End of the Year $ 799,908
The notes to financial statements are an integral part of this statement.
23
CITY OF ROSEMEAD,CALIFORNIA
STATEMENT OF CASH FLOWS
PROPRIETARY FUNDS
FOR THE YEAR ENDED JUNE 30,2019
Governmental
Activities
Internal
Service Funds
Cash Flows from Operating Activities:
Cash received from interfund service provided $ 266,100
Cash paid to suppliers for goods and services (140,946)
Net Cash Provided by Operating Activities 125,154
Cash Flows from Capital
and Related Financing Activities:
Acquisition and construction of capital assets (13,623)
Net Cash Used for Capital •
and Related Financing Activities (13,623)
Net Increase in Cash and Cash Equivalents 111,531
Cash and Cash Equivalents at the Beginning of the Year 621,522
Cash and Cash Equivalents at the End of the Year $ 733,053
Reconciliation of Operating Income to Net Cash
Provided by Operating Activities:
Operating income $ 63,087
Adjustments to reconcile operating income
net cash provided by operating activities:
Depreciation 62,111
Increase in accounts payable (44)
Total Adjustments 62,067
Net Cash Provided by Operating Activities $ 125,154
The notes to financial statements are an integral part of this statement.
24
CITY OF ROSEMEAD,CALIFORNIA
STATEMENT OF FIDUCIARY NET POSITION
FIDUCIARY FUNDS
JUNE 30,2019
Private-Purpose
Trust Fund
Agency Successor
Funds Agency
Assets:
Cash and investments $ 1,112,785 $ 5,568,337
Notes and loans receivable - 201,314
Prepaid costs - 150,744
Restricted cash and investments with fiscal agents - 1,125,198
Total Assets $ 1,112,785 7,045,593
Deferred Outflows of Resources:
Deferred charge on refunding 173,618
Total Deferred Outflows of Resources 173,618
Liabilities:
Accrued liabilities $ - 10
Accrued interest - 279,218
Deposits payable 1,112,785 -
Long-term liabilities:
Bonds payable,due within one year - 2,297,014
Bonds payable, due in more than one year - 26,430,290
Total Liabilities $ 1,112,785 29,006,532
Net Position:
Held in trust for the dissolution
of the former Redevelopment Agency (21,787,321)
Total Net Position $ (21,787,321)
The notes to financial statements are an integral part of this statement.
25
CITY OF ROSEMEAD,CALIFORNIA
STATEMENT OF CHANGES IN FIDUCIARY NET POSITION
FIDUCIARY FUNDS
FOR THE YEAR ENDED JUNE 30,2019
Private-Purpose
Trust Fund
Successor
Agency
Additions:
Taxes $ 3,863,435
Interest and change in fair value of investments 40,463
Total Additions 3,903,898
Deductions:
Administrative expenses 51,705
Interest expense • 1,232,568
Contributions to other governments 429,968
Total Deductions 1,714,241
Change in Net Position 2,189,657
Net Position at the Beginning of the Year
(23,976,978)
Net Position at the End of the Year $ (21,787,321)
The notes to financial statements are an integral part of this statement.
26
CITY OF ROSEMEAD, CALIFORNIA
NOTES TO FINANCIAL STATEMENTS
JUNE 30,2019
I. SIGNIFICANT ACCOUNTING POLICIES
Note 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. Separate financial statements are not prepared.
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.
27
CITY OF ROSEMEAD,CALIFORNIA
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
JUNE 30, 2019
Note 1: Summary of Significant Accounting Policies (Continued)
a. Reporting Entity (Continued)
Since the City Council and/or other City officials serve as the Governing Board for
these component units, and a financial benefit or burden relationship exists for 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 business-type activities and
no discretely presented component units. Eliminations have been made in the
Statement of Activities so that certain allocated expenses are recorded only once
(by function to which they were allocated). However, general governmental expenses
have not been allocated as indirect expenses to the various functions of the City.
Government-wide financial statements are presented using the economic resources
measurement focus and the accrual basis of accounting. Under the economic
resources measurement focus, all (both current and long-term) economic resources
and obligations of the reporting government are reported in the government-wide
financial statements. Basis of accounting refers to when revenues and expenditures
are recognized in the accounts and reported in the financial statements. Under the
accrual basis of accounting, revenues, expenses, gains, losses, assets, and liabilities
resulting from exchange and exchange-like transactions are recognized when the
exchange takes place. Revenues, expenses, gains, losses, assets, and liabilities
resulting from nonexchange transactions are recognized in accordance with generally
accepted accounting principles.
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.
28
CITY OF ROSEMEAD, CALIFORNIA
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
JUNE 30, 2019
Note 1: Summary of Significant Accounting Policies (Continued)
b. Basis of Accounting and measurement Focus (Continued)
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.
Funds
In the fund financial statements, governmental funds are presented using the
modified-accrual basis of accounting. Their revenues are recognized when they
become measurable and available as net current assets. Measurable means that the
amounts can be estimated, or otherwise determined. Available means that the
amounts were collected during the reporting period or soon enough thereafter to be
available to finance the expenditures accrued for the reporting period. The City uses a
sixty-day availability period.
Revenue recognition is subject to the measurable and available criteria for the
government funds in the fund financial statements. Exchange transactions are
recognized as revenues in the period in which they are earned (i.e., the related goods
or services are provided). Locally imposed derived tax revenues are recognized as
revenues in the period in which the underlying exchange transaction on which they are
based takes place. Imposed non-exchange transactions are recognized as revenues
in the period for which they were imposed. If the period of use is not specified,they are
recognized as revenues when an enforceable legal claim to the revenues arises or
when they are received, whichever occurs first. Government-mandated and voluntary
non-exchange transactions are recognized as revenues when all applicable eligibility
requirements have been met.
29
CITY OF ROSEMEAD,CALIFORNIA
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
JUNE 30,2019
Note 1: Summary of Significant Accounting Policies (Continued)
b. Basis of Accounting and measurement Focus (Continued)
In the fund financial statements, governmental funds are presented using the
current financial resources measurement focus. This means that only current assets
and current liabilities are generally included on their balance sheets.The reported fund
balance (net current assets) is considered to be a measure of"available spendable
resources."Governmental fund operating statements present increases(revenues and
other financing sources)and decreases(expenditures and other financing uses) in net
current assets. Accordingly, they are said to present a summary of sources and uses
of"available spendable resources"during a period.
Non-current portions of long-term receivables due to governmental funds are reported
on their balance sheets in spite of their spending measurement focus. However,
special reporting treatments are used to indicate that they should not be considered
"available spendable resources," since they do not represent net current assets.
Recognition of governmental fund type revenues represented by noncurrent
receivables are deferred until they become current receivables.
Because of their spending measurement focus, expenditure recognition for
governmental fund types excludes amounts represented by noncurrent liabilities.
Since they do not affect net current assets,such long-term amounts are not recognized
as governmental fund type expenditures or fund liabilities.
Amounts expended to acquire capital assets are recorded as expenditures in the year
that resources were expended, rather than as fund assets.The proceeds of long-term
debt are recorded as other financing sources rather than as a fund liability. Amounts
paid to reduce long-term indebtedness are reported as fund expenditures.
When both restricted and unrestricted resources are combined in a fund, expenditures
are considered to be paid first from restricted resources, and then from unrestricted
resources.
Proprietary Funds -
Proprietary fund financial statements include a Statement of Net Position, a Statement
of Revenues, Expenses and Changes in Net Position, and a Statement of Cash Flows
for all proprietary funds.
Proprietary funds are accounted for using the "economic resources" measurement
focus and the accrual basis of accounting. Accordingly, all assets and liabilities
(whether current or noncurrent) are included on the Statement of Net Position. The
Statement of Revenues, Expenses, and Changes in Net Position presents increases
(revenue) and decreases (expenses) in total net position. Under the accrual basis of
accounting, revenues are recognized in the period in which they are earned while
expenses are recognized in the period in which liability is incurred.
Operating revenues in the proprietary funds are those revenues that are generated
from the primary operations of the fund. All other revenues are reported as
nonoperating revenues. Operating expenses are those expenses that are essential to
the primary operations of the fund. All other expenses are reported as nonoperating
expenses.
30
CITY OF ROSEMEAD, CALIFORNIA
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
JUNE 30,2019
Note 1: Summary of Significant Accounting Policies (Continued)•
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. The
agency fund is custodial in nature (assets equal liabilities) and does 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.
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.
Additionally, the City reports:
• Internal Service Funds—Account for the financing df goods and services provided
by one department to other departments on a cost reimbursement basis. The
City has internal service funds for equipment replacement and technology
replacement.
• Special Revenue Funds—Account for and report the proceeds of specific revenue
sources that are restricted or committed to expenditure for specified purposes
other than debt service or capital projects. All are currently reported in nonmajor
governmental funds.
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.
31
CITY OF ROSEMEAD,CALIFORNIA
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
JUNE 30,2019
Note 1: Summary of Significant Accounting Policies (Continued)
e. Cash Equivalents
For purposes of the statement of cash flows, cash equivalents are defined as short-term,
highly liquid investments that are both readily convertible to known amounts of cash or so
near their maturity that they present insignificant risk of changes in value because of
changes in interest rates. Cash equivalents also represent the proprietary funds' share in
the cash and investment pool of the City of Rosemead. Cash equivalents have an original
maturity date of three months or less from the date of purchase. For purposes of the
statement of cash flows, the entire balance of cash and investments on the combined
balance sheet for the internal service fund is considered cash and cash equivalents.
f. Capital Assets
Capital assets (including infrastructure) are recorded at cost where historical records are
available and at an estimated historical cost where no historical records exist. Donated
capital assets, donated works of art and similar items and capital assets received in a
service concession arrangement are recorded at acquisition value at the point of
acquisition. 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:
Building improvements 50 years
Improvements other than buildings 3-15 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.
32
CITY OF ROSEMEAD,CALIFORNIA
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
JUNE 30, 2019
Note 1: Summary of Significant Accounting Policies (Continued)
The sick leave liability is estimated based on the City's past experience of making
termination payments from sick leave, adjusted for the effect of changes in its termination
payment policy and other current factors. A liability for these amounts is reported in
governmental funds only if it has matured or will be paid from available resources of the
current period. City employees accumulate vacation hours that may be paid upon
termination, death or retirement. Full-time employees can accumulate up to four weeks of
accrued vacation per year depending on the length of employment.
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 Balance
The following classifications describe the relative strength of the spending constraints
placed on the purposes for which resources can be used:
• Nonspendable—This includes amounts that cannot be spent because they are either
not in spendable form or must be maintained intact pursuant to legal or contractual
requirements, such as prepaids, inventory, or endowments.
• Restricted — This includes amounts that can be spent only for specific purposes
imposed by creditors, grantors, contributors, or laws and regulations of other
governments through enabling litigations.
• Committed —This includes amounts that can be used only for the specific purposes
pursuant to constraints imposed by formal action of the City's highest authority, the
City Council. The formal action that is required to be taken to establish, modify, or
rescind a fund balance commitment is Council resolution.
• Assigned — This includes amounts that are designated by the City Council,
City Manager, or Finance Committee for specific purposes and do not meet the criteria
to be classified as restricted or committed.
• Unassigned —This is the residual classification that includes all spendable amounts
not contained in the other classifications.The General Fund is the only fund that reports
a positive unassigned fund balance. In other governmental funds, it is not appropriate
to report a positive unassigned fund balance amount. However, in governmental funds
other than the General Fund, if expenditures incurred for specific purposes exceed
amounts that are restricted, committed, or assigned to those purposes, it may be
necessary to report a negative unassigned fund balance in that fund.
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.
33
CITY OF ROSEMEAD, CALIFORNIA
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
JUNE 30,2019
Note 1: Summary of Significant Accounting Policies (Continued)
j. Use of Estimates
The preparation of financial statements in conformity with generally accepted accounting
principles requires management to make estimates and assumptions that affect
certain reported amounts and disclosures. Accordingly, actual results could differ from
those estimates.
k. Pension Plans
For purposes of measuring the net pension liability, deferred outflows and inflows
of resources related to pensions, and pension expense, information about the fiduciary
net position and additions to/deductions from the fiduciary net position have been
determined on the same basis as they are reported by the Plan Administrators. For
this purpose, benefit payments (including refunds of employee contributions) are
recognized when currently due and payable in accordance with the benefit terms.
Investments are reported at fair value. CaIPERS audited financial statements are publicly
available reports that can be obtained at CaIPERS' website, at www.calpers.ca.gov.
Copies of the PARS annual financial report may be obtained from PARS,
4350 Von Karman Avenue, Suite 100, Newport Beach, California 92660.
GASB 68 requires that the reported results must pertain to liability and asset information
within certain defined timeframes. For this report, the following timeframes are used.
CaIPERS-Cost sharing Multiple-Employer Plan:
Valuation Date(VD) June 30, 2017
Measurement Date (MD) June 30, 2018
Measurement Period (MP) July 1, 2017 to June,30, 2018
PARS-Single Employer Agent Plan:
Valuation Date(VD) June 30, 2018
Measurement Date (MD) June 30, 2019
Measurement Period (MP) July 1, 2018 to June 30, 2019
I. Other Post Employment Benefit Plans (OPEB)
For purposes of measuring the net OPEB liability, deferred outflows of resources and
deferred inflows of resources related to OPEB, and OPEB expense, information about
the fiduciary net position of the City's plan (OPEB Plan), the assets of which are held by
Public Agency Retirement Services (PARS), and additions to/deductions from the
OPEB Plan's fiduciary net position have been determined by an independent actuary. For
this purpose, benefit payments are recognized when currently due and payable in
accordance with the benefit terms. Investments are reported at fair value.
Generally accepted accounting principles require that the reported results must pertain to
liability and asset information within certain defined timeframes. For this report, the
following timeframes are used:
Valuation Date(VD) December 31, 2016
Measurement Date (MD) June 30, 2018
Measurement Period (MP) July 1, 2017 to June 30, 2018
34
CITY OF ROSEMEAD, CALIFORNIA
NOTES TO FINANCIAL STATEMENTS(CONTINUED)
JUNE 30,2019
Note 1: Summary of Significant Accounting Policies (Continued)
Gains and losses related to changes in total OPEB liability and fiduciary net position are
recognized in OPEB expense systematically over time. Amounts are first recognized in
OPEB expense for the year the gain or loss occurs. The remaining amounts are
categorized as deferred outflows and deferred inflows of resources related to OPEB and
are to be recognized in future OPEB expense.
The recognition period differs depending on the source of the gain or loss:
Net different between projected and actual earning on
OPEB plan Investments 5 years
Expected average remaining service lifetime(EARSL)
All other amounts (4.0 Years at June 30,2018)
m. Deferred Outflows and Deferred Inflows of Resources
In addition to assets,the statement of net position will sometimes report a separate section
for deferred outflows of resources. This separate financial statement element, deferred
outflows of resources, represents a consumption of net position that applies to a future
period(s) and so will not be recognized as an outflow of resources (expense/expenditure)
until then. The City has deferred outflows of resources on pensions and OPEB (described
previously) in the statement of net position. The pension-related deferred outflows include
such items as: contributions made after the actuarial measurement date, changes in
assumptions, differences between expected and actual experiences, the net difference
between projected and actual earnings on plan investments, adjustments due to
differences in proportionate share, and differences in the proportionate share. All of the
items, with the exception of the net difference between projected and actual earnings on
plan investments which is recognized over five years, are recognized over the expected
average remaining service life of plan members.
In addition to liabilities, the statement of net position will sometimes report a separate
section for deferred inflows of resources. This separate financial statement element,
deferred inflows of resources, represents an acquisition of net position that applies to a
future period(s) and will not be recognized as an inflow of resources (revenue) until that
time. The City has deferred inflow of resources deferred revenue on the fund financial
statements — unavailable revenue. Deferred inflows related to pensions and OPEB
(described previously) are reported in the statement of net position. The deferred inflows
related to pensions include changes in assumptions,the difference in expected and actual
experiences, adjustments due to differences in proportionate share, and the difference in
proportionate share; these items are recognized over the expected average remaining
service life of plan members.
35
CITY OF ROSEMEAD, CALIFORNIA
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
JUNE 30,2019
II. STEWARDSHIP, COMPLIANCE,AND ACCOUNTABILITY
Note 2: Stewardship, Compliance, and Accountability
a. Deficit Fund Balances/Net Position
The Community Development Block Grant (CDBG) nonmajor special revenue fund
reported a deficit in fund balance in the amount of$23,792 at June 30, 2019. The CDBG
fund deficit balance is due to the timing of grant reimbursement from the grantor agency.
III. DETAILED NOTES ON ALL FUNDS
Note 3: Cash and Investments
Cash and investments as of June 30, 2019, are classified in the accompanying financial
statements as follows:
Statement of Net Position
Cash and Investments $ 32,456,810
Statement of Fiduciary Net Position
Cash and Investments 6,681,122
Restricted Cash and Investment with Fiscal Agents 1,125,198
Total Cash and Investment $ 40,263,130
Cash and Investments as of June 30, 2019, consist of the following:
Deposits with financial institutions $ 11,283,695
Investments 28,979,435
Total Cash and Investments $ 40,263,130
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.
36
CITY OF ROSEMEAD, CALIFORNIA
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
JUNE 30, 2019
Note 3: Cash and Investments (Continued)
Authorized
by Maximum Maximum
investment Maximum Percentage Investment in
Authorized Investment Type Policy Maturity of Portfolio One Issuer
U.S. Treasury Obligations Yes 5 years None None
U.S. Agency Securities Yes 5 years 70% 35%
Banker's Acceptances Yes 180 days 20% 30%
Commercial Paper Yes 180 days 15% 10%
Negotiable Certificates for Deposits 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 $65M
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:
Remaining Maturity (in Months)
12 Months 13 to 24 25 to 60
Investment Type or Less months months Total
State investment pool $ 17,908,236 $ - $ - $ 17,908,236
Certifices of Deposit 247,057 247,047 3,164,658 3,658,762
U.S. agency securities 753,285 1,001,730 2,216,484 3,971,499
Money Market Mutual Funds 286,433 - - 286,433
Medium-term notes - 499,576 1,529,731 2,029,307
Held by bond trustee
Money Market Mutual Funds 1,125,198 - - 1,125,198
Total $ 20,320,209 $ 1,748,353 $ 6,910,873 $ 28,979,435
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.
37
CITY OF ROSEMEAD,CALIFORNIA
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
JUNE 30,2019
Note 3: Cash and Investments(Continued)
Ratings at End of Year
Minimum
Legal
Investment Type Totals Rating N/A A- A A+ AA+
State Investment Pool $ 17,908,236 N/A $ 17,908,236 $ - $ - $ - $
Certificates of Deposit 3,658,762 N/A 3,658,762 - - -
U.S.Agency Securities 3,971,499 N/A - - - - 3,971,499
Medium-Term Notes 2,029,307 A - 740,417 1,034,928 253,962
Money Market Mutual Funds 286,433 Multiple 286,433 - - -
Held by Bond Trustee:
Money Market Mutual Funds 1,125,198 Multiple 1,125,198 - - -
Total $ 28,979,435 $ 22,978,629 $740,417 $ 1,034,928 $253,962 $3,971,499
• 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:
% of
Issuer Investment Type Amount Investment
Federal National Mortgage Association U.S. Agency Securities $ 1,587,900 5.48%
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, 2019, the City had deposits with financial
institutions in excess of federal depository insurance limits by$5,003,238 that were held in
collateralized accounts. As of June 30, 2019, the Successor Agency had deposits with
financial institutions in excess of federal depository insurance limits by $5,301,850 that
were held in collateralized accounts.
38
•
CITY OF ROSEMEAD, CALIFORNIA
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
JUNE 30, 2019
Note 3: Cash and Investments (Continued)
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. LAIF is not registered
with the Securities and Exchange Commission and is not rated. Deposits and withdrawals
in LAIF are made on the basis of$1 and not fair value. Accordingly, the City's investment
in this pool is measured on uncategorized inputs not defined as Level 1, 2, or 3.
Fair Value Measurements
Generally accepted accounting principles establishes a fair value hierarchy that prioritizes
the inputs to valuation techniques used to measure fair value. This hierarchy consists of
three broad levels: Level 1 inputs consist of quoted prices (unadjusted)for identical assets
and liabilities in active markets that a government can access at the measurement
date, Level 2 inputs that are observable for an asset or liability, either directly or indirectly,
and Level 3 inputs have the lowest priority and consist of unobservable inputs for an asset
or liability. The City's custodian National Financial Services uses Intercontinental
Exchange (ICE), Bloomberg, and Thompson Reuters to obtain pricing information. As of
June 30, 2019, with the exception of LAIF, which is considered uncategorized, all of the
City's investments are valued using Level 1 inputs.
Note 4: Loans receivable
Loans receivable consisted of the following at June 30, 2019:
Balance Balance
Govemmental Activities: June 30,2018 Additions Deletions June 30, 2019
Computer Loans $ 9,721 $ 4,000 $ 8,696 $ 5,025
San Gabriel Valley Water Co. Loan Phase I 74,070 - 8,230 65,840
San Gabriel Valley Water Co. Loan Phase II 37,036 - 4,115 32,921
Rio Hondo Community Development Co. Loan 227,086 - - 227,086
El Monte Cemetary Association Loan 7,200 - 1,200 6,000
Total $ 355,113 $ 4,000 $ 22,241 $ 336,872
Note 5: Property Taxes
Property tax revenue is recognized 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.
39
CITY OF ROSEMEAD,CALIFORNIA .
NOTES TO FINANCIAL STATEMENTS(CONTINUED)
JUNE 30, 2019
Note 5: Property Taxes(Continued)
Under California law, property taxes are assessed and collected by the counties up to 1% of
assessed value, plus other increases approved by the voters.The property taxes are recorded
initially in a pool and are then allocated to the cities based on complex formulas. Accordingly,
the City of Rosemead accrues only those taxes that are received from the County within
sixty days after year-end.
Lien date January 1
Levy date July 1
Due dates November 1 and February 1
Collection dates December 10 and April 10
Note 6: Interfund Balances
Due to/due from other funds for the year ending June 30, 2019, consisted of$182,165 due to
the General Fund from Nonmajor Governmental Funds for short-term loans made to those
funds from the General Fund resulting from deficit cash balances in those funds.
Note 7: Capital Assets
Capital asset activity was as follows for the year ended June 30, 2019:
Balance CIP Balance
Governmental Activities: June 30,2018 Transfers Additions Deletions June 30,2019
Capital assets not being depreciated:
Land $ 4,417,104 $ - $ - $ - $ 4,417,104
Construction in progress 1,599,310 (1,338,439) 16,683 - 277,554
Total capital assets not
being depreciated 6,016,414 (1,338,439) 16,683 - 4,694,658
Depreciable capital assets:
Buildings 24,011,561 - 74,710 - 24,086,271
Improvements other than buildings 5,358,411 - 13,623 - 5,372,034
Machinery and equipment 678,562 30,430 - - 708,992
Autos and trucks 1,763,173 - 1,763,173
Furniture and office equipment 1,485,125 - 19,704 - 1,504,829
Infrastructure 67,155,739 1,308,009 150,844 - 68,614,592
Total capital assets
being depreciated 100,452,571 1,338,439 258,881 - 102,049,891
Less:accumulated depreciation for:
Buildings (9,601,203) - (482,244) - (10,083,447)
Improvements other than buildings (1,402,918) - (295,671) - ' (1,698,589)
Machinery and equipment (547,352) - (32,963) - (580,315)
Autos and trucks (1,412,709) - (164,444) - (1,577,153)
Furniture and office equipment (1,351,743) - (52,340) - (1,404,083)
Infrastructure (38,565,817) - (1,952,593) - (40,518,410)
Total accumulated depreciation (52,881,742) - (2,980,255) - (55,861,997)
Total capital assets,
being depreciated,net 47,570,829 1,338,439 (2,721,374) - 46,187,894
Government activities
capital assets,net $ 53,587,243 $ $ (2,704,691) $ - -$ 50,882,552
40
CITY OF ROSEMEAD, CALIFORNIA
•
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
JUNE 30, 2019
Note 7: Capital Assets(Continued)
Depreciation expense was charged to functions/programs of the primary government as
follows:
Governmental Activities Total
General Government $ 25,035
Public Safety 48,685
Public Works 2,676,131
Community development 14,353
Parks and recreation 153,940
Internal Service Funds 62,111
Totals $ 2,980,255
Note 8: Compensated Absences
Compensated absences activities for the year ended June 30, 2019, is as follows:
Beginning Due in
Balance Additions Deletions Ending Balance One Year
$
672,985 $ 276,318 $ 368,661 $ 580,642 $ 318,076
Compensated absences have no repayment schedule and become payable as used by
employees. Compensated absences are liquidated through the City's General Fund.
Note 9: Risk Management
a. Description ofSelf-Insurance Pool Pursuant to Joint Powers Agreement
The City of Rosemead is a member of the California Joint Powers Insurance Authority
(Authority). The Authority is composed of 116 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.
b. Primary Self-Insurance Programs of the Authority
Each member pays an annual contribution at the beginning of the coverage period.
A retrospective adjustment is then conducted annually thereafter, for coverage years
2012-13 and prior. Coverage years 2013-14 and forward are not subject to routine annual
retrospective adjustment. The total funding requirement for primary self-insurance
programs is based on an actuarial analysis. Costs are allocated to individual agencies
based on payroll and claims history, relative to other members of the risk-sharing pool.
41
CITY OF ROSEMEAD,CALIFORNIA
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
JUNE 30, 2019
Note 9: Risk Management(Continued)
Primary Liability Program
In the liability program claims are pooled separately between police and general
government 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 from$750,000 to$50 million,
are distributed based on the outcome of cost allocation within the first and second loss
layers.
The overall coverage limit for each member, including all layers of coverage, is
$50 million per occurrence. Subsidence losses have a sub-limit of $40 million per
occurrence. The coverage,structure includes retained risk hat is pooled among
members, reinsurance, and excess insurance. More detailed information about the
various layers of coverage is available on the following website:
https://cipia.orq/protection/coverage-programs.
Workers' Compensation
In the workers' compensation program claims are pooled separately between public
safety (police and fire) and general government exposures. (1) The payroll of each
member is evaluated relative to the payroll of other members. A variable credibility
factor is determined foreachmember,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 from $100,000 to statutory limits are distributed based on the outcome of cost
allocation within the first and second loss layers.
For 2018-19 the Authority's pooled retention is $2 million per occurrence, with
reinsurance to statutory limits 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.
c. Purchased Insurance
Pollution Legal Liability Insurance
The City of Rosemead participates in the pollution legal liability insurance program
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 an aggregate limit of$50 million for the 3-year period from July 1, 2017
through July 1, 2020. Each member of the Authority has a$10 million sub-limit during
the 3-year policy term.
42
CITY OF ROSEMEAD, CALIFORNIA
NOTES TO FINANCIAL STATEMENTS(CONTINUED)
JUNE 30,2019
Note 9: Risk Management(Continued)
Property Insurance
The City of Rosemead participates in the all-risk property protection program of the
Authority. This insurance protection is underwritten by several insurance companies.
City of Rosemead property is currently insured according to a schedule of covered
property submitted by the City of Rosemead to the Authority. City of Rosemead
property currently has all-risk property insurance protection in the amount of
$71,467,764.There is a$10,000 deductible per occurrence except for non-emergency
vehicle insurance which has a$2,500 deductible.
Crime Insurance
The City of Rosemead purchases crime insurance coverage in the amount of
$1,000,000 with a $2,500 deductible. The fidelity coverage is provided through
the Authority.
d. 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 2018-19.
Note 10: Defined Benefit Pension Plans
a. Aggregate Information on all Defined Benefit Pension Plans
The City participates in two defined benefit pension plans,the Miscellaneous Cost-sharing
multiple-employer defined benefit pension plan administered by the California Public
Employees' Retirement System (CaIPERS), and the Public Agency Retirement System
(PARS) retirement enhancement plan, a single-employer defined benefit pension plan.
These two plans are presented in aggregate on the government-wide financial statement
of net position. The schedule below summarizes the components of the information
presented on the government-wide statement broken out by each plan and in aggregate:
PARS
CaIPERS Retirement
Miscellaneous Enhancement
Plan Plan Total
Net Pension Liability $ 8,688,626 $ - $ 8,688,626
Net Pension Asset - 512,555 512,555
Deferred Outflows of Resources 3,420,308 65,214 3,485,522
Deferred Inflows of Resources 701,915 193,856 895,771
Pension Expense 1,677,156 1,173 1,678,329
43
CITY OF ROSEMEAD,CALIFORNIA
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
JUNE 30, 2019
Note 10: Defined Benefit Pension Plans (Continued)
b. Defined Benefit Pension Plan -CaIPERS
Plan Description
All qualified permanent and probationary employees are eligible to participate in the
Public Agency Cost-Sharing Multiple-Employer Defined Benefit Pension Plan (Plan)
administered by the California Public Employees'Retirement System(CaIPERS.)The Plan
consists of individual rate plans (benefit tiers)within a safety risk pool (police and fire)and
a miscellaneous risk'pool (all other). Plan assets may be used to pay benefits for any
employer rate plan of the safety and miscellaneous pools. Accordingly, rate plans within
the safety or miscellaneous pools are not separate plans under GASB Statement No. 68.
Individual employers may sponsor more than one rate plan in the miscellaneous or safety
risk pools. The City sponsors three miscellaneous rate plans. Benefit provisions under the
Plan are established by State statute and City resolution. CaIPERS issues publicly
available reports that include a full description of the pension plan regarding benefit
provisions, assumptions and membership information that can be found on the CaIPERS'
website, at www.calpers.ca.gov.
Benefits Provided
CaIPERS provides service retirement and disability benefits, annual cost of living
adjustments and death benefits to plan members, who must be public employees and
beneficiaries. Benefits are based on years of credited service,equal to one year of full-time
employment. Members with five years of total service are eligible to retire at age 50 with
statutorily reduced benefits. All members are eligible for non-duty disability benefits after
5 years of service. The death benefit is one of the following: the Basic Death Benefit,
the 1957 Survivor Benefit, or the Optional Settlement 2W Death Benefit. The cost of
living adjustments for each plan are applied as specified by the Public Employees'
Retirement Law.
The Plan's provisions and benefits in effect at June 30, 2019, are summarized as follows:
Tier 1 * Tier 2* PEPRA
Hire date Prior to From July 1, 2010 to January 1, 2013
July 1, 2010 December 31, 2012 and after
Benefit formula 2.7% @ 55 2% @ 55 2% @ 62
Benefit vesting schedule 5 years service 5 years service 5 years service
Benefit payments monthly for life monthly for life monthly for life
Retirement age 50 to 55&up 50 to 63&up 52 to 67&up
Monthly benefits, as a% of 2.0% to 2.7% 1.426 to 2.418 1.0%to 2.5%
eligible compensation
Required employee 8.00% 7.00% 6.75%
contribution rates
Required employer 48.02% 9.43% 7.24%
contribution rates
44
CITY OF ROSEMEAD, CALIFORNIA
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
JUNE 30,2019
Note 10: Defined Benefit Pension Plans (Continued)
Contributions
Section 20814(c)of the California Public Employees' Retirement Law(PERL) requires that
the employer contribution rates for all public employers be determined on an annual basis
by the actuary and shall be effective on the July 1 following notice of a change in the rate.
The total plan contributions are determined through CaIPERS' annual actuarial valuation
process. For public agency cost-sharing plans covered by either the Miscellaneous or
Safety risk pools, the Plan's actuarially determined rate is based on the estimated amount
necessary to pay the Plan's allocated share of the risk pool's costs of benefits earned by
employees during the year, and any unfunded accrued liability. The employer is required
to contribute the difference between the actuarially determined rate and the contribution
rate of employees.
For the year ended June 30, 2019 the contributions recognized as a reduction to the net
pension liability was$1,487,464.
Pension Liability, Pension Expense and Deferred Outflows/Inflows of Resources
At June 30,2019,the City of Rosemead reported a net pension liability for its proportionate
share of the net pension liability in the amount of$8,688,626.
The City's pension liability is measured as the proportionate share of the net pension
liability. The net pensions liability is measured as of June 30, 2018 and the total pension
liability for each Plan used to calculate the net pension liability was determined by an
actuarial valuation as of June 30, 2017 rolled forward to June 30, 2018 using standard
procedures. The City's proportion of the net pension liability was based on a projection of
the City's long-term share of contributions to the pension plans relative to the projected
contributions of all participating employers,actuarially determined.The City's proportionate
share of the net pension liability for each Plan as of June 30,2017 and 2018 was as follows:
Miscellaneous
Proportion-June 30, 2017 0.09661%
Proportion-June 30, 2018 0.09186%
Change-Increase (Decrease) -0.00475%
For the year ended June 30, 2019, the City of Rosemead recognized pension expense of
$1,799,857. At June 30, 2019, the City reported deferred outflows of resources and
deferred inflows of resources related to pensions from the following sources:
Deferred Outflows Deferred Inflows
of Resources of Resources
Pension contributions subsequent to measurement date $ 1,389,145 $ -
Changes in assumptions 776,153 190,220
Difference between expected and actual experiences 261,218 • 88,891
Net differences between projected and actual earnings
on plan investments 33,658 -
Change in employer's proportion and differences between
the employer's contributions and the employer's
proportionate share of contributions 790,851 79,240
Adjustment due to differences in proportions 169,283 343,564
Total $ 3,420,308 $ 701,915
45
CITY OF ROSEMEAD, CALIFORNIA
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
JUNE 30, 2019
Note 10: Defined Benefit Pension Plans (Continued)
The $1,389,145 reported as deferred outflows of resources related to contributions
subsequent to the measurement date will be recognized as a reduction of the net pension
liability in the year ended June 30, 2020. Other amounts reported as deferred outflows of
resources and deferred inflows of resources related to pensions will be recognized as
pension expense as follows:
Measurement
Period Ended Deferred Outflow/
June 30 (Inflows) of Resources
2019 $ 941,502
2020 612,080
2021 (163,098)
2022 (61,236)
Total $ 1,329,248
Actuarial Assumptions and Methods
For the measurement period ended June 30, 2018 (the measurement date), the total
pension liability was determined by rolling forward the June 30,2017,total pension liability.
The June 30, 2017 and the June 30, 2018, total pension liabilities were based on the
following actuarial methods and assumptions:
Actuarial Cost Method Entry Age Normal Cost Method
Actuarial Assumptions
Discount Rate 7.15%
Inflation 2.50%
Salary Increases Varies by Entry Age and Service
Mortality Rate Table (1) Derived using CaIPERS' Membership Data for all
Funds
Post Retirement Benefit Contract COLA up to 2.50% until Purchasing
Increase Power Protection Allowance Floor on Purchasing
Power applies, 2.50% thereafter
(1)The mortality table used was de.eloped based on CaIPERS' specific data. The table includes 15
years of mortality impro\ements using Society of Actuaries Scale 90% of scale MP 2016. For more
details on this table, please refer to the December 2017 experience study report (based on the CaIPERS
demographic data from 1997 to 2015)that can be found on the CaIPERS website.
46
CITY OF ROSEMEAD, CALIFORNIA
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
JUNE 30, 2019
Note 10: Defined Benefit Pension Plans (Continued)
Change of Assumptions
For the measurement date June 30, 2018, demographic assumptions and inflation rate
were changed in accordance to the CaIPERS Experience Study and Review of Actuarial
Assumptions December 2017. There were no changes in the discount rate.
Discount Rate
The discount rate used to measure the total pension Jiability was 7.15 percent. The
projection of cash flows used to determine the discount rate assumed that contributions
from plan members will be made at current member contribution rates and that
contributions from employers will be made at statutorily required rates, actuarially
determined. Based on those assumptions, the Plan's fiduciary net position was project to
be available to make all projected future benefit payments of current plan members.
Therefore, the long-term expected rate of return on plan investments was applied to all
periods of projected benefit payments to determine the total pension liability.
The long-term expected rate of return on pension plan investments was determined using
a building-block method in which expected future real rates of return(expected returns, net
of pension plan investment expense and inflation) are developed for each major asset
class.
In determining the long-term expected rate of return, CaIPERS took into account both
short-term and long-term market return expectations as well as the expected pension fund
cash flows. Using historical returns of all the funds' asset classes, expected compound
(geometric) returns were calculated over the short-term (first 10 years) and the long-term
(11+years) using a building-block approach. Using the expected nominal returns for both
short-term and long-term, the present value of benefits was calculated for each fund. The
expected rate of return was set by calculating the rounded single equivalent expected
return that arrived at the same present value of benefits for cash flows as the one calculated
using both short-term and long-term returns. The expected rate of return was then set
equivalent to the single equivalent rate calculated above and adjusted to account for
assumed administrative expenses.
47
CITY OF ROSEMEAD, CALIFORNIA
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
JUNE 30,2019
Note 10: Defined Benefit Pension Plans(Continued)
The expected real rates of return by asset class are as follows:
• New Strategic Real Return Real Return
Asset Class Allocation Years 1 -10(1) Years 11+ (2)
Global Equity 50.0% 4.80% 5.98%
Fixed Income 28.0 1.00 2.62
Inflation Assets 0.0 0.77 1.81
Private Equity 8.0 6.30 7.23
Real Estate 13.0 3.75 4.93
Liquidity 1.0 0.00 (0.92)
(1) An expected inflation of 2.0%used for this period.
(2) An expected inflation of 0.92%used for this period.
Sensitivity of Net Pension Liability to Changes in Discount Rate
The following presents the City's proportionate share of the net pension liability/(asset) of
the Plan, calculated using the discount rate for each Plan, as well as what the City's
proportionate share of the net pension liability would be if it were calculated using a
discount rate that is 1% point lower(6.15 percent) or 1% point higher(8.15 percent)than
the current rate:
Plan's Net Pension Discount Rate-1% Current Discount Rate Discount Rate+1%
Liability/(Assets) (6.15%) (7.15%) (8.15%)
Miscellaneous $ 12,816,273 $ 8,688,626 $ 5,281,321
Pension Plan Fiduciary Net Position
Detailed information about the pension plan's fiduciary net position is available in the
separately issued CaIPERS financial reports. See CaIPERS' website for additional
information.
c. PARS Retirement Enhancement Plan
Plan Description
The Plan is an agent, multiple-employer supplemental employee defined benefit pension
plan (the Plan II)administered by the Public Agency Retirement Services(PARS) Phase II
Systems. A full description of the pension plan regarding number of employees covered,
benefit provisions, assumptions (for funding, but not account purposes), and membership
informationare listed in the June 30, 2018 Annual Actuarial Valuation Report. Details of
the benefits provided can be obtained from the actuarial valuation reports. PARS issues a
publicly available financial report that includes financial statement and required
supplementary information for the Plan II. That report may be obtained writing to PARS,
3961 MacArthur Boulevard, Suite 200, Newport Beach, California, 92660.
48
CITY OF ROSEMEAD,CALIFORNIA
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
JUNE 30, 2019
Note 10: Defined Benefit Pension Plans(Continued)
Benefits Provided
The Retirement Enhancement Plan provides a benefit equal to the PARS"3.0%at 55"plan
factor(formula is a static 3.0% at age 55 and older), less the CaIPERS "2.7% at 55" plan
factors(a static 2.7%at age 55 and older)for all years of full-time continuous City service.
The benefit from this plan when added to the CaIPERS benefit may not exceed 90% of
final compensation.
The Plan II includes a pre-retirement death benefit for those eligible employees who die
while actively employed with the City and meet the age and service eligibility requirements
for a supplemental retirement benefit. The benefit will be paid to a surviving spouse
or domestic partner as a life annuity equal to the employee's supplemental retirement
benefit actuarially reduced as if the employee had elected a 100% joint-and-survivor
annuity. The Plan is closed to all employees in the eligible classes hired on or after
July 1, 2010 ("soft-freeze").
The Plan II's provisions and benefits in effect at June 30, 2019, (measurement date) are
summarized as follows:
Supplemental
On or after September 25, 2007
Hire Date On or before June 30, 2010
Benefit Formula 3% @ 55 less Cal PERS 2.7% @ 55
Benefit vesting schedule from date of hire
Benefit payments life only annuity
Retirement age 55
Monthly benefits, as a % of eligible compensation 0.576%
Required employee contribution rates none
Required employer contribution rates 3.390%
Employees Covered
At June 30, 2019,the following employees were covered by the benefit terms:
Description Number of Members
Inactive employees or beneficiaries
currently receiving benefits 14
Active employees 37
Total 51
49
CITY OF ROSEMEAD, CALIFORNIA
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
JUNE 30,2019
Note 10: Defined Benefit Pension Plans(Continued)
Contributions
Section 20814(c)of the California Public Employees' Retirement Law(PERL) requires that
the employer contribution rates for all public employers be determined on an annual basis
by the actuary and shall be effective on the July 1 following notice of a change in the rate.
The total plan contributions are determined through PARS' annual actuarial valuation
process.The actuarially determined rate is the estimated amount necessary to finance the
costs of benefits earned by employees during the year,with an additional amount to finance
any unfunded accrued liability. For the measurement period ended June 30, 2019
(the measurement date),the employer's contribution rate is 8.41 percent of annual payroll.
Employer contribution rates may change if plan contracts are amended. Employer
Contributions for the measurement period ended June 30, 2019 are$131,770.
Net Pension Liability
The City's net pension liability for the Retirement Enhancement Plan is measured as the
total pension liability, less the pension plan's fiduciary net position.The net pension liability
of the Plan II is measured as of June 30, 2019, using an annual actuarial valuation as of
June 30, 2018.
Total pension liability $ 2,742,513
Plan fiduciary net position (3,255,068)
Net pension (asset) $ (512,555)
Plan fiduciary net position as a % of total pension liability 118.7%
Actuarial Assumptions and Methods
The following actuarial methods and assumptions were used in the June 30, 2018 funding
valuation:
Actuarial Cost Method Entry Age Normal
Amortization Method
Level percent or level dollar Level dollar
Closed, open, or layered periods Closed
Amortization period at 06/30/2018 4 years
Amortization growth rate 0.00%
Asset Valuation Method
Smoothing period None
Recognition method None
Corridor None
Inflation 2.50%
Salary Increases Graded rates based on years of service.
Investment Rate of Return 6.50%
Cost of Living Adjustments 2.00%
Mortality Consistent with Non-Industrial rates used to
value the Miscellaneous Public Agency CaIPERS
Pension Plans.
50
CITY OF ROSEMEAD,CALIFORNIA
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
JUNE 30, 2019
Note 10: Defined Benefit Pension Plans (Continued)
Discount Rate
GASB 68 generally requirse that a blended discount rate be used to measure the Total
Pension Liability (the Actuarial Accrued Liability calculated using the Individual Entry Age
Normal Cost Method).The long-term expected return on plan investments may be used to
discount liabilities to the extent that the plan's Fiduciary Net Position
(fair market value of assets) is projected to cover benefit payments and administrative
expenses. A 20-year high quality(AA/Aa or higher) municipal bond rate must be used for
periods where the Fiduciary Net Position is not projected to cover benefit payments and
administrative expenses. Determining the discount rate under GASB 68 will
often require that the actuary perform complex projections of future benefit payments and
asset values.
GASB 68 (paragraph 29)do allow for alternative evaluations of projected solvency, if such
evaluation can reliably be made.GASB does not contemplate a specific method for making
an alternative evaluation of sufficiency; it is left to professional judgment.
The following circumstances justify an alternative evaluation of sufficiency for the
City of Rosemead:
• The City of Rosemead has at least a 5-year history of generally paying at least 100%
of the Actuarially Determined Contribution (previously termed the Annual Required
Contribution).
• The Actuarially Determined Contribution is based on a closed amortization period,
which means that payment of the Actuarially Determined Contribution each year will
bring the plan to a 100%funded position by the end of the amortization period.
• GASB 68 specifies that the projections regarding future solvency assume that plan
assets earn the assumed rate of return and there are no future changes in the plan \
provisions or actuarial methods and assumptions, which means that the projections
would not reflect any adverse future experience which might impact the plan's funded
position.
Based on these circumstances, the City believes that the detailed depletion date
projections outlined in GASB 68 will show that the fiduciary net position is always projected
to be sufficient to cover benefit payments and administrative expenses.
June 30, 2018 June 30, 2019
Discount rate 6.50% 6.50%
Long-term expected rate of return, 6.50% 6.50%
net of investment expense
Municipal bond rate N/A N/A
The Plan II's fiduciary net position was projected to be available to make all projected future
benefit payments of current active and inactive employees.Therefore,the discount rate for
calculating the total pension liability is equal to the long-term expected rate of return.
51
CITY OF ROSEMEAD, CALIFORNIA
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
JUNE 30, 2019
Note 10: Defined Benefit Pension Plans (Continued)
The best-estimate range for the long-term expected rate of return is determined by adding
expected inflation to expected long-term real returns and reflecting expected volatility and
correlation. The capital market assumptions are per Milliman's investment consulting
practice as of June 30, 2019.
Long-Term Long-Term
Expected Expected
Arithmetic Geometric
Current Real Rate Real Rate
Asset Class Index Allocation of Return of Return
US Cash BAML 3-Mon Tbill 7.89% 0.71% 0.71%
US Core Fixed Income Barclays Aggregate 43.65% 1.83% 1.73%
US Equity Market Russell 3000 36.66% 4.71% 3.52%
Foreign Developed Equity MSCI EAFE NR 5.49% 6.06% 4.55%
Emerging Markets Equity MSCI EM NR 4.08% 8.23% 5.43%
US REITs FTSE NAREIT Equity REIT 2.23% 5.05% 3.42%
Changes in Net Pension Liability
Total Pension Plan Fiduciary Net Pension
Changes in Net Pension Liability Liability(a) Net Position(b) Liability(a)-(b)
Balances as of June 30,2018 $ 2,702,951 $ 3,143,491 $ (440,540)
Changes for the year.
Service cost 25,190 - 25,190
Interest on total pension liability 170,716 - 170,716
Effect of plan changes - - -
Effect of economic/demographic gains or losses 17,567 - 17,567
Effect of assumptions changes or inputs 32,827 - 32,827
Benefit payments (206,738) (206,738) -
Employer contributions - 131,770 (131,770)
Member contributions - -Net investment income - 187,985 (187,985)
Administrative expenses - (1,440) 1,440
Balances as of June 30,2019 $ 2,742,513 $ 3,255,068 $ (512,555)
•
52
CITY OF ROSEMEAD, CALIFORNIA
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
JUNE 30,2019
Note 10: Defined Benefit Pension Plans (Continued)
Sensitivity of Net Pension Liability to Changes in the Discount Rate
The following presents the net pension liability,calculated using the discount rate of 6.50%,
as well as what the net pension liability would be if it were calculated using a discount rate
that is one percentage point lower (5.50%) or one percentage point higher (7.50%) than
the current rate:
1.00% Current 1.00%
Decrease Discount Rate Increase
(5.50%) (6.50%) (7.50%)
$ (210,857) $ (512,555) $ (769,207)
Pension Plan Fiduciary Net Position
The Plan II fiduciary net position at June 30, 2019,was as follows:
Assets:
Cash and cash equivalents $ 256,817
Investments:
Fixed income 1,420,947
Stocks 1,504,776
Real estate 72,528
Total Investments 2,998,251
Total Assets 3,255,068
Net Position Restricted for Pensions $ 3,255,068
Pension Expense and Deferred Outflows/Inflows of Resources Related to Pensions
For the year ended June 30,2019,the City recognized pension expense of$1,173.At June
30, 2019, the City reported deferred outflows of resources and deferred inflows of
resources related to pensions from the following sources:
Deferred Outflows Deferred Inflows
of Resources of Resources
Difference between expected and actual experience $ 13,982 $ 193,856
Change of assumptions 26,128
Net difference between projected and actual earnings
on pension plan investments 25,104
Total $ 65,214, $ 193,856
Amounts currently reported as deferred outflows of resources and deferred inflows of
resources related to pensions will be recognized in pension expense as follows:
Deferred Outflows
(Inflows)of
Year ended June 30: Resources
2020 $ (17,379)
2021 (54,076)
2022 (36,911)
2023 (20,276)
$ (128,642)
53
CITY OF ROSEMEAD, CALIFORNIA
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
JUNE 30,2019
Note 11: Employees Retirement Plan
PARS Alternate Retirement System (ARS) Plan
The City currently offers an alternative plan for employees classified as part-time, seasonal or
temporary (PST). The plan is administered by the Public Agency Retirement Services (PARS)
and is a qualified deferred compensation plan created in accordance with Internal Revenue
Code Section 457(b). All amounts of compensation deferred under the plan, all property, or
rights are solely the property and rights of the employee and beneficiaries of the plan. Deferred
compensation funds are not subject to claims of the City's general creditor; consequently, the
assets and related liabilities of the plan are not included within the City's financial statements.
The City contributes 3.75% percent of the employee's compensation. In addition, each
participant is required to contribute 3.75%of their salary. During the current fiscal year,the City
contributed $62,113 to the plan.
Note 12: Post-Employment Benefit Plan
Plan Description
The City administers an agent-multiple employer defined benefit plan which provides medical
benefits to eligible retirees and their spouses in accordance with various labor agreements.
Employees Covered
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 December 31, 2016, the date
of the latest actuarial valuation:
Active ( 59
Inacthe employees or beneficiaries currently receiving benefits 28
Total 87
Contributions
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, California 92660.
For the measurement date ended June 30, 2018, the City recognized a total of $22,063 in
contributions, including an implied subsidy of$19,925, as a reduction to the net OPEB liability.
54
CITY OF ROSEMEAD,CALIFORNIA •
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
JUNE 30, 2019
Note 12: Post-Employment Benefit Plan (Continued)
Net OPEB Liability
The City's net OPEB liability was measured as of June 30, 2018 and the total OPEB liability
used to calculate the net OPEB liability was determined by an actuarial valuation
dated December 31, 2016 that was rolled forward to determine the June 30, 2018 total OPEB
liability, based on the following actuarial methods and assumptions:
Valuation Date December 31, 2016
Actuarial Cost Method Entry Age Normal, Lekel Percentage of Payroll
Amortization Method Level percent of pay
Amortization Period 21-year fixed period for 2017/18
Asset Valuation Method Investment gains and losses spread over 5-year
rolling period
Discount Rate 6.00%
General Inflation 2.75%
Medical Trend Non-Medicare-7.5% for 2019, decreasing to an
ultimate rate of 4.0% in 2076
Medicare -6.5% for 2019, decreasing to an
ultimate rate of 4.0% in 2076
Mortality CalPERS 1997-2015 experience study
Mortality Improvement Mortality Improvement Scale 2017 for post-
retirement mortality
All Other Assumptions Same as those used to determine the total OPEB
liability
Expected Long-Term Rate of Return
Target Allocation Expected Real
Asset Class Component PARS-Moderate Rate of Return
Global Equity 48.25% 4.82%
Fixed Income 45.00% 1.47%
REITs 1.75% 3.76%
Cash 5.00% 0.06%
(1)Assumed Long-Term Rate of Inflation 2.75%
(2) Expected Long-Term Net Rate of Return,
rounded to the nearest quarter percent 6.00%
The long-term expected real rates of return are presented
as geometric means.
55
CITY OF ROSEMEAD, CALIFORNIA
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
JUNE 30, 2019
Note 12: Post-Employment Benefit Plan (Continued)
Discount Rate
The discount rate used to measure the total OPEB liability was 6.00 percent. The projection of
cash flows used to determine the discount rate assumed that City contributions will be made
at rates equal to the actuarially determined contribution rates. Based on those assumptions,
the OPEB plan's fiduciary net position was projected to be available to make all projected
OPEB payments for current active and inactive employees and beneficiaries. Therefore, the
long-term expected rate of return on OPEB plan investments was applied to all periods of
projected benefit payments to determine the total OPEB liability.
Changes in the OPEB Liability
The changes in the net OPEB liability for the Plan are as follows:
Total OPEB Plan Fiduciary Net OPEB
Liability Net Position Liability
(a) (b) (c)= (a)-(b)
Balance at June 30, 2018(valuation date 12/31/2016) $ 4,143,397 $ 3,583,258 $ 560,139
Changes recognized for the measurement period:
Service cost 151,419 - 151,419
Interest 253,402 - 253,402
Contributions-employer - 22,063 (22,063)
Net investment income - 223,704 (223,704)
Benefit payments (142,897) (142,897) -
Administratiw expenses - (9,889) 9,889
Net changes 261,924 92,981 168,943
Balance at June 30, 2019(measurement date 6/30/2018) $ 4,405,321 $ 3,676,239 $ 729,082
Sensitivity of the Net OPEB Liability to Changes in the Discount Rate
The following presents the net OPEB liability of the City if it were calculated using a discount
rate that is one percentage point lower or one percentage point higher than the current rate,
for measurement period ended June 30, 2018:
Current
1% Decrease Discount Rate 1% Increase
(5.00%) (6.00%) (7.00%)
Net OPEB Liability $ 1,296,456 $ 729,082 $ 255,340
Sensitivity of the Net OPEB Liability to Changes in the Health Care Cost Trend Rates
The following presents the net OPEB liability of the City if it were calculated using health care
cost trend rates that are one percentage point lower or one percentage point higher than the
current rate, for measurement period ended June 30, 2018:
Current Healthcare Cost
1% Decrease Trent Rates 1% Increase
Net OPEB Liability $ 410,469 $ 729,082 $ 1,100,668
56
CITY OF ROSEMEAD,CALIFORNIA
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
JUNE 30,2019
Note 12: Post-Employment Benefit Plan (Continued)
OPEB Plan Fiduciary Net Position
PARS issues a publicly available financial report that includes financial statements and
required supplementary information. That report may be obtained from the Public Agency
Retirement Services, 4350 Von Karman Ave, Newport Beach, California 92660.
OPEB Expense and Deferred Outflows/Inflows of Resources Related to OPEB
For the fiscal year ended June 30, 2019, the City recognized OPEB expense of$148,127. As
of fiscal year ended June 30, 2019, the City reported deferred outflows of resources related to
OPEB from the following sources:
Deferred Outflows of Deferred Inflows of
Resources Resources
OPEB contributions subsequent to measurement date $ 97,132 $
Net difference between projected and actual earnings on
OPEB plan investments - 93,078
Total $ 97,132 $ 93,078
The$97,132 reported as deferred outflows of resources related to contributions subsequent to
the measurement date will be recognized as a reduction of the net OPEB liability in the year
ended June 30,2020.The amounts reported as deferred inflows of resources related to OPEB
will be recognized as expense as follows:
Year Ended Deferred Outflow/
June 30 (Inflows) of Resources
2020 $ (30,388)
2021 (30,388)
2022 (30,386)
2023 (1,916)
$ (93,078)
Note 13: 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.
57
CITY OF ROSEMEAD, CALIFORNIA
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
JUNE 30, 2019
Note 14: Successor Agency
On December 29, 2011, the California Supreme Court upheld AB lx 26 that provides for the
dissolution of all redevelopment agencies in the State of California. This action impacted the
reporting entity of the City that previously had reported the former Agency within the reporting
entity of the City as a blended component unit. In June 2012,the Legislature adopted AR 1484,
which amended portions of AB lx 26 and added certain new provisions.AB lx 26 and AB 1484
are collectively referred to herein as the"Bill."
The Bill provides that upon dissolution of a redevelopment agency, either city or another unit
local government will agree to serve as the "successor agency" to hold the assets until
they are distributed to other units of state and local government. The successor agency
is defined as being a separate legal entity from the City. On January 10, 2012,the City Council
elected to become the Successor Agency for the former Redevelopment Agency in accordance
with the Bill as part of City resolution number 28029.The assets and activities of the Successor
Agency for the former Agency are reported in a fiduciary fund (private-purpose trust fund) in
the financial statements of the City.
Subject to the approval of the oversight board and the State of California Department
of Finance (DOE), remaining assets can only be used to pay enforceable obligations in
existence at the date of dissolution (including the completion of any unfinished projects that
were subject to legally enforceable contractual commitments).
Successor agencies are allocated property tax revenue in the amount that is necessary to pay
the estimated installment payments on enforceable obligations of the former redevelopment
agencies until all enforceable obligations of the prior redevelopment agencies have been paid
in full and all assets have been liquidated.
a. Cash and Investments
Cash and investments of the Successor Agency consist of demand deposit held with
financial institutions and restricted cash held with fiscal agents for the purpose of debt
service payments and bond covenants. The cash and investments reported in the
accompanying financial statements consisted of the following:
Cash and Investments $5,568,337
Restricted:
Cash with Fiscal Agents 1,125,198
Total Cash and Investments: $6.693.535
58
CITY OF ROSEMEAD, CALIFORNIA
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
JUNE 30,2019
Note 14: Successor Agency (Continued)
b. Long-Term Debt
The debt of the Successor Agency as of June 30, 2019 is as follows:
Balance Balance Due Within
July 1, 2018 _ Additions Deletions June 30, 2019 One Year
Bonds Payable:
Tax Allocation Bonds
Series 2010A $ 6,160,000 $ - $ 915,000 $ 5,245,000 $ 960,000
Tax Allocation Bonds
Series 2016 23,295,000 - 1,245,000 22,050,000 1,245,000
Subtotal Bonds 29,455,000 - 2,160,000 27,295,000 2,205,000
Deferred amounts:
Unamortized bond premium 1,601,914 - 106,794 1,495,120 106,793
Discount on Issuance (77,594) - (14,778) (62,816) (14,779)
Total Bonds 1,524,320 - 92,016 1,432,304 92,014
Total Long-term Debt $ 30,979,320 $ - $ 2,252,016 $ 28,727,304 $ 2,297,014
Future debt service requirements are as follows:
Year Ending
June 30 Principal Interest
2020 $ 2,205,000 $ 1,275,500
2021 2,295,000 1,182,500
2022 2,405,000 1,070,250
2023 2,530,000 950,000
2024 2,320,000 823,500
2025-2029 6,880,000 2,883,750
2030-2034 8,660,000 1,118,650
Total $ 27,295,000 $ 9,304,150
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. In the event of default, all money in the funds and accounts provided for
in the bond indenture and all tax revenues thereafter received by the Successor Agency
are to be transmitted to the trustee and applied in the following order: first to pay the costs
and expenses of the trustee for legal counsel, and second, to pay the unpaid principal and
interest accrued on the bonds. At June 30, 2019, the balance held in the reserve account
was$1,119,273.As of June 30, 2019, the outstanding balance was$5,245,000.
59
CITY OF ROSEMEAD,CALIFORNIA
NOTES TO FINANCIAL STATEMENTS(CONTINUED)
JUNE 30, 2019
Note 14: Successor Agency(Continued)
2016 Subordinate Tax Allocation Refunding Bonds
In October 2016, the Successor Agency to the Rosemead Redevelopment Agency
(Successor Agency) issued the 2016 Subordinate Tax Allocation Refunding Bonds in the
amount of $24,230,000 for the purpose of refunding, on a current basis, all of the
outstanding Rosemead Community Development Commission Redevelopment Project
Area No. 1 Tax Allocation Bonds, Series 2006A, initially issued in the principal amount of
$14,005,000, and the Rosemead Community Development Commission Redevelopment
Project Area No. 1 Tax Allocation Refunding Bonds, Series 2006B, initially issued in
the principal amount of $24,230,000. Interest is payable semi-annually on April 1 and
October 1. The bonds are subject to acceleration upon on event of default. If an event of
default has occurred,the principal of the bonds,together with the interest thereon, are due
and payable immediately. As of June 30,2019,the outstanding balance was$22,050,000.
c. Pledged Revenue
The City pledged, as security for the bonds issued, a portion of tax increment revenue
(including Low and Moderate Income Housing set-aside and pass through allocations)that
it received. The bonds were issued to providing financing for various capital projects,
accomplish Low and Moderate Income Housing projects, and to defease previously issued
bonds. Assembly Bill 1X 26 provided that upon dissolution of the redevelopment activities
of the redevelopment agency,,property taxes allocated to redevelopment activities are not
longer deemed tax increment, but rather property tax revenues and will be allocated first
to successor agencies to make payments on the indebtedness incurred by the dissolved
redevelopment agency. .Total principal and interest remaining on the debt as of
June 30, 2019 is $36,599,150 with annual debt service requirements as indicated above.
For the current year, the total property tax revenue recognized by the successor agency
for the payment of indebtedness incurred by the dissolved redevelopment agency was
$3,863,435 and the debt service obligation on the bonds was$3,512,881.
60
CITY OF ROSEMEAD, CALIFORNIA
NOTES TO REQUIRED SUPPLEMENTARY INFORMATION
JUNE 30,2019
Note 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. Budgets were legally adopted for all
governmental funds.
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 appropriated and honored during the subsequent year.
61
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62
CITY OF ROSEMEAD,CALIFORNIA
BUDGETARY COMPARISON SCHEDULE
GENERAL FUND
FOR THE YEAR ENDED JUNE 30,2019
Variance with
Final Budget
Budget Amounts Actual Positive
Original Final Amounts (Negative)
Budgetary Fund Balance,July 1 $ 20,484,281 $ 20,484,281 $ 20,484,281 $ -
Resources (Inflows):
Taxes 18,270,000 18,470,000 18,946,836 476,836
Licenses and permits 2,468,200 2,468,200 2,636,026 167,826
Intergovernmental 951,033 1,051,033 274,414 (776,619)
Charges for services 967,700 1,054,700 1,135,748 81,048
Use of money and property 263,300 263,300 935,375 672,075
Fines and forfeitures 589,000 589,000 622,221 33,221
Contributions 2,000 2,000 2,721 721
Miscellaneous 166,300 166,300 180,201 13,901
Amounts Available for Appropriations 44,161,814 44,548,814 45,217,823 669,009
Charges to Appropriation(Outflows):
General government 3,720,900 3,765,700 3,896,082 (130,382)
Public safety 9,255,700 9,371,132 9,062,545 308,587
Community development 1,921,500 1,921,500 2,137,789 (216,289)
Parks and recreation 2,572,200 2,642,200 2,280,559 361,641
Public works 4,881,700 4,881,700 4,277,070 604,630
Capital outlay 257,000 337,207 268,824 68,383
Total Charges to Appropriations 22,609,000 22,919,438 21,922,869 996,569
Budgetary Fund Balance,June 30 $ 21,552,814 $ 21,629,376 $ 23,294,954 $ 1,665,578
63
CITY OF ROSEMEAD,CALIFORNIA
COST-SHARING MULTIPLE EMPLOYER MISCELLANEOUS PLANS
SCHEDULE OF PROPORTIONATE SHARE OF THE NET PENSION LIABILITY
AS OF JUNE 30,FOR THE LAST TEN FISCAL YEARS(1)
2019 2018 2017 2016 2015
Measurement Date 6/30/2018 6/30/2017 6/30/2016 6/30/2015 6/30/2014
Proportion of the Net Pension Liability 0.09186% 0.09661% 0.09959% 0.11128% 0.10996%
Proportionate Share of the Net Pension Liability $ 8,688,626 $ 9,309,566 $ 8,617,416 $ 7,638,064 $ 6,842,230
Covered Payroll $ 3,761,962 $ 3,690,780 $ 3,388,767 $ 3,543,958 $ 3,386,963
Proportionate Share of the Net Pension Liability as
Percentage of Covered Payroll 231% 252% 254% 216% 202%
Plan Fiduciary Net Position as a Percentage of the
Total Pension Liability 75.3% 73.3% 74.1% 78.4% 79.8%
Notes to Schedule of Proportionate Share of the Net Pension Liability
Benefit Changes:None.
Changes of Assumptions: In 2018, demographic assumptions and inflate rate were changed in accordance to the CaIPERS Experience
Study and Review of Actuarial Assumptions December 2017.There were no chnages in the discount rate.
(1)Historical information is required only for measurement for which GASB 68 is applicable.Fiscal Year 2015 was the first year of
implementation,therefore only five years are shown.
64
CITY OF ROSEMEAD,CALIFORNIA
COST-SHARING MULTIPLE EMPLOYER MISCELLANEOUS PLANS
SCHEDULE OF PLAN CONTRIBUTIONS
AS OF JUNE 30,FOR THE LAST TEN FISCAL YEARS I"
2019 2018 2017 2016 2015
Actuarially Determined Contribution $ 1,389,145 $ 1,487,464 $ 1,113,875 $ 1,276,087 $ 1,183,855
Contribution in Relation to the Actuarially Determined Contribution (1,389,145) (1,487,464) (1,113,875) (1,276,087) (1,183,855)
Contribution Deficiency(Excess) $ - $ - $ - $ - $ -
Covered Payroll $ 3,903,914 $ 3,761,962 $ 3,690,780 $ 3,388,767 $ 3,543,958
Contributions as a Percentage of Covered Payroll 35.6% 39.5% 30.2% 18.1% 33.4%
Notes to Schedule of Plan Contributions:
The actuarial methods and assumptions used to set the actuarially determined contributions for Fiscal Year 2018-19 were derived from the June 30,2016 funding
valuation report.
Actuarial Cost Method: Entry Age Normal
Amortization Method/Period: For details,see June 30,2016 Funding Valuation Report.
Asset Valuation Method: Market Value of Assets. For details,see June 30,2016 Funding Valuation Report.
Inflation: 2.75%
Salary Increases: Varies by Entry Age and Service
Payroll Growth: 3.00%
Investment Rate of Return: 7.50% Net of Pension Plan Investment and Administrative Expenses; includes
Inflation.
Retirement Age: The probabilities of Retirement are based on the 2014 CaIPERS Experience Study
for the period of 1997 to 2011.
Mortality: The probabilities of mortality are based on the 2014 CaIPERS Experience Study for
the period from 1997 to 2011. Pre-retirement and Post-retirement mortality rates
include 20 years of projected mortality improvement using Scale BB published by
the Society of Actuaries.
(1)Historical information is required only for measurement for which GASB 68 is applicable.Fiscal Year 2015 was the first year of implementation,therefore only five
years are shown.
65
CITY OF ROSEMEAD,CALIFORNIA
PARS RETIREMENT ENHANCEMENT PLAN
SCHEDULE OF CHANGES IN NET PENSION LIABILITY(ASSET)AND RELATED RATIOS
AS OF JUNE 30,FOR THE LAST TEN FISCAL YEARS(1)
2019 2018 2017 2016 2015
Total Pension Liability
Service Cost $ 25,190 $ 37,502 $ 36,410 $ 45,435 $ 44,112
Interest 170,716 171,215 192,440 191,270 190,667
Effect of Liability Gains or Losses 17,567 - (355,400) - -
Effect of Assumption Changes or Inputs 32,827 - - - -
Benefit Payments,Including Refunds of employee Contributions (206,738) (201,490) (200,693) (218,411) (234,960)
Net Change in Total Pension Liability 39,562 7,227 (327,243) 18,294 (181)
Total Pension Liability-Beginning 2,702,951 2,695,724 3,022,967 3,004,673 3,004,854
Total Pension Liability-Ending(a) $ 2,742,513 $ 2,702,951 $ 2,695,724 $ 3,022,967 $ 3,004,673
Plan Fiduciary Net Position
Contribution-Employer $ 131,770 $ 140,376 $ 164,389 $ 265,241 $ 273,711
Net Investment Income 187,985 175,605 266,884 (2,345) 59,329
Benefit Payments,Including Refunds of Employee Contributions (206,738) (201,490) (200,693) (218,411) (234,960)
Other Changes in Fiduciary Net Position (1,440) (1,461) (6,848) (2,624) (5,864)
Net Change in Fiduciary Net Position 111,577 113,030 223,732 41,861 92,216
Plan Fiduciary Net Position-Beginning 3,143,491 3,030,461 2,806,729 2,764,868 2,672,652
Plan Fiduciary Net Position-Ending(b) $ 3,255,068 $ 3,143,491 $ 3,030,461 $ 2,806,729 $ 2,764,868
Plan Net Pension Liability/(Assets)-Ending(a)-(b) $ (512,555) $ (440,540) $ (334,737) $ 216,238 $ 239,805
Plan Fiduciary Net Position as a Percentage of the Total Pension
Liability 118.7% 116.3% 112.4% 92.8% 92.0%
Covered Payroll $ 2,238,812 $ 2,178,892 $ 2,414,510 $ 2,344,184 $ 3,060,587
Plan Net Pension Liability/(Asset)as a Percentage of Covered Payroll -22.9% -20.2% -13.9% 9.2% 7.8%
Notes to Schedule of Changes in the Net Pension Liability(Asset)and Related Ratios:
Changes of Assumptions:There were no changes in assumptions
I'I Historical information is required only for measurement for which GASB 68 is applicable.Fiscal year 2015 was the first year of implementation,therefore only
five years are shown.
66
CITY OF ROSEMEAD,CALIFORNIA
PARS RETIREMENT ENHANCEMENT PLAN
SCHEDULE OF PLAN CONTRIBUTIONS
AS OF JUNE 30,FOR THE LAST TEN FISCAL YEARS r11
2019 2018 2017 2016 2015
Actuarially Determined Contribution $ 73,864 $ 81,888 $ 88,845 $ 116,244 $ 133,267
Contribution in Relation to the Actuarially Determined Contribution (131,770) (140,376) (164,389) (265,241) (273,711)
Contribution Deficiency(Excess) $ (57,906) $ (58,488) $ (75,544) $ (148,997) $ (140,444)
Covered Payroll $ 2,238,812 $ 2,178,892 $ 2,414,510 $ 2,344,184 $ 3,060,587
Contributions as a Percentage of Covered Payroll 5.9% 6.4% 6.8% 11.3% 8.9%
Note to Schedule of Plan Contributions:
Valuation Date: June 30,2018
Methods and assumptions used to determine contribution rates:
Actuarial cost method Entry age normal
Amortization method Level dollar,closed
Remaining amortization period 4
Inflation 2.50%
Salary Increases 3.5%to 12.20%,depending on years of service
Investment rate of return 6.50%
Payroll Growth 2.75%
Cost of Living Adjustments 2.00%
Mortality Consistent with the Non-Indusrial rates used to value
Miscellaneous Agency CaIPERS Pension Plans.
(1>Historical information is required only for measurement for which GASB 68 is applicable. Fiscal year 2015 was the first year of implementation,
therefore only five years are shown.
•
67
CITY OF ROSEMEAD,CALIFORNIA
SCHEDULE OF CHANGES IN THE NET OPEB LIABILITY AND RELATED RATIOS
AS OF JUNE 30, FOR THE LAST TEN FISCAL YEARS(1)
2019 2018
Total OPEB Liability
Service cost $ 151,419 $ 147,009
Interest on the total OPEB liability 253,402 237,920
Benefit payments (142,897) (119,682)
Net change in total OPEB liability 261,924 265,247
Total OPEB liability-beginning 4,143,397 3,878,150
Total OPEB liability-ending(a) 4,405,321 4,143,397
Plan Fiduciary Net Position
Contribution-employer 22,063 158,082
Net investment income 223,704 336,797
Benefit payments (142,897) (119,682)
Administrative expense (9,889) (8,925)
Net change in plan fiduciary net position 92,981 366,272
Plan fiduciary net position-beginning 3,583,258 3,216,986
Plan fiduciary net position-ending(b) 3,676,239 3,583,258
Net OPEB Liability-ending(a)-(b) $ 729,082 $ 560,139
Plan fiduciary net position as a percentage of the total OPEB liability 83.4% 86.5%
Covered-employee payroll $ 3,761,962 $ 3,690,780
Net OPEB liability as a percentage of covered-employee payroll 19.4% 15.2%
Notes to Schedule:
(1)Historical information is required only for the measurement periods for which GASB 75 is applicable. Fiscal Year 2018 was the
first year of implementation. Future years' information will be displayed up to 10 years as information becomes available.
68 •
CITY OF ROSEMEAD,CALIFORNIA
OTHER POST-EMPLOYMENT BENEFIT PLAN
SCHEDULE OF PLAN CONTRIBUTIONS
AS OF JUNE 30,FOR THE LAST TEN FISCAL YEARS(1)
2019 2018
Actuarially Determined Contribution $ 197,000 $ 192,000
Contribution in Relation to the Actuarially Determined Contributions(2) (97,132) (22,063)
Contribution Deficiency(Excess) $ 99,868 $ 169,937
Covered-employee payroll $ 3,903,914 $ 3,761,962
Contributions as a percentage of covered-employee payroll 2.5% 0.6%
Notes to Schedule:
Actuarial methods and assumptions used to set the actuarially determined contribution for Fiscal Year 2018 were from the December 31,2016
actuarial valuation.
Valuation Date: December 31,2016
Actuarial Cost Method: Entry Age Normal,Level Percentage of Payroll
Amortization Method: Level percent of pay
Amortization Period: 20-year fixed period for 2018/19
Asset Valuation Method: Investment gains and losses spread over 5-year
rolling period
Discount Rate: 6.00%
General Inflation: 2.75%
Medical Trend: Non-Medicare-7.5%for 2019,decreasing to an
ultimate rate of 4.0%in 2076
Medicare-6.5%for 2019,decreasing to an
ultimate rate of 4.0%in 2076
Mortality: CaIPERS 1997-2015 experience study
Mortality Improvement: Mortality Improvement Scale 2017 for post-
retirement mortality
All Other Assumptions: Same as those used to determine the total OPEB
liability
(1)Historical information is required only for the measurement periods for which GASB 75 is applicable. Fiscal Year 2018 was the first year of
implementation. Future years'information will be displayed up to 10 years as information becomes available.
(21 Contributions include implied subsidies
69
CITY OF ROSEMEAD,CALIFORNIA
COMBINING BALANCE SHEET
NONMAJOR GOVERNMENTAL FUNDS
JUNE 30,2019
Special Revenue Funds
Local
Transportation/
State Gas Tax Sidewalk Grant Proposition A
Assets:
Cash and investments $ 1,094,681 $ - $ 752,427
Accounts receivable 21,643 - 74,101
Total Assets $ 1,116,324 $ - $ 826,528
Liabilities,Deferred Inflows of Resources,
and Fund Balances(Deficits):
Liabilities:
Accounts payable $ 99,149 $ - $ 132,247
Accrued liabilities 2,655 - 6,520
Deposits payable - - -
Due to other funds - - -
Retentions payable 16,467 - -
Total Liabilities 118,271 - 138,767
Deferred Inflows of Resources:
Unavailable revenues 13,643 - -
Total Deferred Inflows of Resources 13,643 •
- -
Fund Balances(Deficits):
Restricted:
Community services -
Low and moderate income housing - - -
Public works 505,481 - 687,761
Capital projects 478,929 - -
Unassigned - - -
Total Fund Balances(Deficits) 984,410 - 687,761
Total Liabilities,Deferred Inflows of
Resources,and Fund Balances(Deficits) $ 1,116,324 $ - $ 826,528
70
CITY OF ROSEMEAD,CALIFORNIA
COMBINING BALANCE SHEET
NONMAJOR GOVERNMENTAL FUNDS
JUNE 30,2019 (CONTINUED)
Special Revenue Funds
Proposition C Measure R Measure M
Assets:
Cash and investments $ 1,205,613 $ 1,656,008 $ 1,383,626
Accounts receivable - 38,098 -
Total Assets $ 1,205,613 $ 1,694,106 $ 1,383,626
Liabilities,Deferred Inflows of Resources,
and Fund Balances(Deficits):
Liabilities:
Accounts payable $ 269,510 $ 20,917 $ -
Accrued liabilities 3,290 607 -
Deposits payable - - -
Due to other funds - - -
Retentions payable - - -
Total Liabilities 272,800 21,524 -
Deferred Inflows of Resources:
Unavailable revenues - 38,098 -
Total Deferred Inflows of Resources - 38,098 -
Fund Balances(Deficits):
Restricted:
Community services - - -
Low and moderate income housing - - -
Public works 566,454 956,339 743,626
Capital projects 366,359 678,145 640,000
Unassigned - - -
Total Fund Balances(Deficits) 932,813 1,634,484 1,383,626
Total Liabilities,Deferred Inflows of
Resources,and Fund Balances(Deficits $ 1,205,613 $ 1,694,106 $ 1,383,626
71
CITY OF ROSEMEAD,CALIFORNIA
COMBINING BALANCE SHEET
NONMAJOR GOVERNMENTAL FUNDS
JUNE 30,2019
Special Revenue Funds
Air Quality Development
Management Impact Fee
District Street Lighting Traffic
Assets:
Cash and investments $ 316,380 $ 1,893,760 $ 21,222
Accounts receivable 18,584 53,859 -
Total Assets $ 334,964 $ 1,947,619 $ 21,222
Liabilities,Deferred Inflows of Resources,
and Fund Balances(Deficits):
Liabilities:
Accounts payable $ - $ 94,332 $ -
Accrued liabilities - 2,639 -
Deposits payable - - -
Due to other funds - - -
Retentions payable 5,089 -
Total Liabilities - 102,060 -
Deferred Inflows of Resources:
Unavailable revenues - - -
Total Deferred Inflows of Resources -
Fund Balances(Deficits):
Restricted:
Community services - 21,222
Low and moderate income housing - -
Public works 334,964 1,381,482 -
Capital projects - 464,077 -
Unassigned - - -
Total Fund Balances(Deficits) 334,964 1,845,559 21,222
Total Liabilities,Deferred Inflows of
Resources,and Fund Balances(Deficits $ 334,964 $ 1,947,619 $ 21,222
72
CITY OF ROSEMEAD,CALIFORNIA
COMBINING BALANCE SHEET
NONMAJOR GOVERNMENTAL FUNDS
JUNE 30,2019 (CONTINUED)
Special Revenue Funds
Development
Development Impact Fee Development
Impact Fee General Impact Fee
Public Safety Government Parks
Assets:
Cash and investments $ 3,738 $ 26,934 $ 111,202
Accounts receivable - - -
Total Assets $ 3,738 $ 26,934 $ 111,202
Liabilities,Deferred Inflows of Resources,
and Fund Balances(Deficits):
Liabilities:
Accounts payable $ - $ - $ -
Accrued liabilities - - -
Deposits payable - - -
Due to other funds - - -
Retentions payable - - -
Total Liabilities - - -
Deferred Inflows of Resources:
Unavailable revenues - - -
Total Deferred Inflows of Resources - - -
Fund Balances(Deficits):
Restricted:
Community services 3,738 - 111,202
Low and moderate income housing - - -
Public works - 26,934 -
Capital projects - - -
Unassigned - - -
Total Fund Balances(Deficits) 3,738 26,934 111,202
Total Liabilities,Deferred Inflows of
Resources,and Fund Balances(Deficits $ 3,738 $ 26,934 $ 111,202
73
CITY OF ROSEMEAD,CALIFORNIA
COMBINING BALANCE SHEET
NONMAJOR GOVERNMENTAL FUNDS
JUNE 30,2019
Special Revenue Funds
Community Rosemead
Development Housing
Block Grant HOME Development
(CDBG) Program Corporation
Assets:
Cash and investments $ - $ 63,475 $ 376,844
Accounts receivable 201,168 3,047 9,377
Total Assets $ 201,168 $ 66,522 $ 386,221
Liabilities,Deferred Inflows of Resources,
and Fund Balances(Deficits):
Liabilities:
Accounts payable $ 29,774 $ 117 $ 5,338
Accrued liabilities 3,021 335 -
Deposits payable - - 39,901
Due to other funds 182,165 - -
Retentions payable - -
Total Liabilities 214,960 452 45,239
Deferred Inflows of Resources:
Unavailable revenues 10,000 - -
Total Deferred Inflows of Resources 10,000 - -
Fund Balances(Deficits):
Restricted:
Community services - 66,070 -
Low and moderate income housing - - 340,982
Public works - - -
Capital projects - - -
Unassigned (23,792) - -
Total Fund Balances(Deficits) (23,792) 66,070 340,982
Total Liabilities,Deferred Inflows of
Resources,and Fund Balances(Deficits $ 201,168 $ 66,522 $ 386,221
74
CITY OF ROSEMEAD,CALIFORNIA
COMBINING BALANCE SHEET
NONMAJOR GOVERNMENTAL FUNDS
JUNE 30,2019
Special
Revenue Funds
Road
Maintenance
and Total
Rehabilitation Governmental
Account SB1 Funds
Assets:
Cash and investments $ 1,175,558 $ 10,081,468
Accounts receivable 180,879 600,756
Total Assets $ 1,356,437 $ 10,682,224
Liabilities,Deferred Inflows of Resources,
and Fund Balances(Deficits):
Liabilities:
Accounts payable $ - $ 651,384
Accrued liabilities - 19,067
Deposits payable - 39,901
Due to other funds - 182,165
Retentions payable - 21,556
Total Liabilities - 914,073
Deferred Inflows of Resources:
Unavailable revenues - 61,741
Total Deferred Inflows of Resources - 61,741
Fund Balances(Deficits):
Restricted:
Community services - 202,232
Low and moderate income housing - 340,982
Public works 173,728 5,376,769
Capital projects 1,182,709 3,810,219
Unassigned - (23,792)
Total Fund Balances(Deficits) 1,356,437 9,706,410
Total Liabilities,Deferred Inflows of
Resources,and Fund Balances(Deficits $ 1,356,437 $ 10,682,224
75
CITY OF ROSEMEAD,CALIFORNIA
COMBINING STATEMENT OF REVENUES,
EXPENDITURES,AND CHANGES IN FUND BALANCES
NONMAJOR GOVERNMENTAL FUNDS
FOR THE YEAR ENDED JUNE 30,2019
Special Revenue Funds
Local
Transportation/
State Gas Tax Sidewalk Grant Proposition A
Revenues:
Intergovernmental $ 1,559,778 $ - $ 1,177,965
Charges for services - - 17,789
Use of money and property 22,822 (5) 18,913
Developer participation - - -
Miscellaneous 62,325 - -
Total Revenues 1,644,925 (5) 1,214,667
Expenditures:
Current:
General government 2,386 - 123,969
Public safety 5,999 - -
Community development - - -
Parks and recreation - - 37,555
Public works 1,005,492 - 840,154
Capital outlay - - -
Total Expenditures 1,013,877 - 1,001,678
Net Change in Fund Balances 631,048 (5) 212,989
Fund Balance(Deficit)at the Beginning of the Year 353,362 5 474,772
Fund Balance(Deficit)at the End of the Year $ 984,410 $ - $ 687,761
76
CITY OF ROSEMEAD,CALIFORNIA
COMBINING STATEMENT OF REVENUES,
EXPENDITURES,AND CHANGES IN FUND BALANCES
NONMAJOR GOVERNMENTAL FUNDS
FOR THE YEAR ENDED JUNE 30,2019 (CONTINUED)
Special Revenue Funds
Proposition C Measure R Measure M
Revenues:
Intergovernmental $ 915,624 $ 686,916 $ 773,916
Charges for services 35,229 -Use of money and property 26,273 40,601 29,519
Developer participation - - -
Miscellaneous -
Total Revenues 977,126 727,517 803,435
Expenditures:
Current:
General government 28,859 12,443 -
Public safety 20,832 - -
Community development - - -
Parks and recreation - - -
Public works 400,860 97,282 -
Capital outlay 94,833 97,072 -
Total Expenditures 545,384 206,797 -
Net Change in Fund Balances 431,742 520,720 803,435
Fund Balance(Deficit)at the Beginning of the Year 501,071 1,113,764 580,191
Fund Balance(Deficit)at the End of the Year $ 932,813 $ 1,634,484 $ 1,383,626
77
CITY OF ROSEMEAD,CALIFORNIA
COMBINING STATEMENT OF REVENUES,
EXPENDITURES,AND CHANGES IN FUND BALANCES
NONMAJOR GOVERNMENTAL FUNDS
FOR THE YEAR ENDED JUNE 30,2019
Special Revenue Funds
Air Quality Development
Management Impact Fee
District Street Lighting Traffic
Revenues:
Intergovernmental $ 71,685 $ 1,143,353 $ -
Charges for services - -Use of money and property 8,016 43,538 346
Developer participation - - 14,972
Miscellaneous - - -
Total Revenues 79,701 1,186,891 15,318
Expenditures:
Current:
General government - 7,602 -
Public safety - - -
Community development - - -
Parks and recreation - - -
Public works - 626,533 -
Capital outlay - 34,214 -
Total Expenditures - 668,349 -
Net Change in Fund Balances 79,701 518,542 15,318
Fund Balance(Deficit)at the Beginning of the Year 255,263 1,327,017 5,904
Fund Balance(Deficit)at the End of the Year $ 334,964 $ 1,845,559 $ 21,222
78
CITY OF ROSEMEAD,CALIFORNIA
COMBINING STATEMENT OF REVENUES,
EXPENDITURES,AND CHANGES IN FUND BALANCES
NONMAJOR GOVERNMENTAL FUNDS
FOR THE YEAR ENDED JUNE 30,2019 (CONTINUED)
Special Revenue Funds
Development
Development Impact Fee Development
Impact Fee General Impact Fee
Public Safety Government Parks
Revenues:
Intergovernmental $ - $ - $ -
Charges for services - - -
Use of money and property 59 428 1,805
Developer participation 2,686 19,581 79,876
Miscellaneous - - -
Total Revenues 2,745 20,009 81,681
Expenditures:
Current:
General government - - -
Public safety - - -
Community development - - -
Parks and recreation - - -
Public works - - -
Capital outlay - - -
Total Expenditures - - -
Net Change in Fund Balances 2,745 20,009 81,681
Fund Balance(Deficit)at the Beginning of the Year 993 6,925 29,521
Fund Balance(Deficit)at the End of the Year $ 3,738 $ 26,934 $ 111,202
79
CITY OF ROSEMEAD,CALIFORNIA
COMBINING STATEMENT OF REVENUES,
EXPENDITURES,AND CHANGES IN FUND BALANCES
NONMAJOR GOVERNMENTAL FUNDS
FOR THE YEAR ENDED JUNE 30,2019
Special Revenue Funds
Community Rosemead
Development Housing
Block Grant Development
(CDBG) HOME Program Corporation
Revenues:
Intergovernmental $ 479,068 $ 62,027 $ 429,968
Charges for services 11,571 - 452,758
Use of money and property - 9,903 87
Developer participation - -
Miscellaneous - - 5,117
Total Revenues 490,639 71,930 887,930
Expenditures:
Current:
General government 6,175 - -
Public safety 269 - -
Community development 450,730 215,577 833,596
Parks and recreation 25,338
Public works - - -
Capital outlay 895 - -
Total Expenditures 483,407 215,577 833,596
Net Change in Fund Balances 7,232 (143,647) 54,334
Fund Balance(Deficit)at the Beginning of the Year (31,024) 209,717 286,648
Fund Balance(Deficit)at the End of the Year $ (23,792) $ 66,070 $ 340,982
80
CITY OF ROSEMEAD,CALIFORNIA
COMBINING STATEMENT OF REVENUES,
EXPENDITURES,AND CHANGES IN FUND BALANCES
NONMAJOR GOVERNMENTAL FUNDS
FOR THE YEAR ENDED JUNE 30,2019
Special Revenue Funds
Road
Maintenance and Total
Rehabilitation Governmental
Account SB1 Funds
Revenues:
Intergovernmental $ 1,013,497 $ 8,313,797
Charges for services - 517,347
Use of money and property 20,727 223,032
Developer participation - 117,115
Miscellaneous - 67,442
Total Revenues 1,034,224 9,238,733
Expenditures:
Current:
General government - 181,434
Public safety - 27,100
Community development - 1,499,903
Parks and recreation - 62,893
Public works - 2,970,321
Capital outlay - 227,014
Total Expenditures - 4,968,665
Net Change in Fund Balances 1,034,224 4,270,068
Fund Balance(Deficit)at the Beginning of the Year 322,213 5,436,342
Fund Balance(Deficit)at the End of the Year $ 1,356,437 $ 9,706,410
81
CITY OF ROSEMEAD,CALIFORNIA
BUDGETARY COMPARISON SCHEDULE
STATE GAS TAX
FOR THE YEAR ENDED JUNE 30,2019
Variance with
Final Budget
Budget Amounts Actual Positive
Original Final Amounts (Negative)
Budgetary Fund Balance,July 1 $ 353,362 $ 353,362 $ 353,362 $ -
Resources(Inflows):
Intergovernmental 2,366,850 2,366,850 1,559,778 (807,072)
Use of money and property - - 22,822 22,822
Miscellaneous 62,500 62,500 62,325 (175)
Amounts Available for Appropriations 2,782,712 2,782,712 1,998,287 (784,425)
Charges to Appropriation(Outflows):
General government 2,400 2,400 2,386 14
Public safety 6,000 6,000 5,999 1
Public works 701,900 701,900 1,005,492 (303,592)
Capital outlay 981,250 981,250 - 981,250
Total Charges to Appropriations 1,691,550 1,691,550 1,013,877 677,673
Budgetary Fund Balance,June 30 $ 1,091,162 $ 1,091,162 $ 984,410 $ (106,752)
82
CITY OF ROSEMEAD,CALIFORNIA
BUDGETARY COMPARISON SCHEDULE
LOCAL TRANSPORTATION/SIDEWALK GRANT
FOR THE YEAR ENDED JUNE 30,2019
Variance with
Final Budget
Budget Amounts Actual Positive
Original Final Amounts (Negative)
Budgetary Fund Balance, July 1 $ 5 $ 5 $ 5 $ -
Resources (Inflows):
Intergovernmental 37,000 37,000 - (37,000)
Use of money and property - - (5) (5)
Amounts Available for Appropriations 37,005 37,005 - (37,005)
Charges to Appropriation(Outflows):
Capital outlay 37,000 37,000 - 37,000
Total Charges to Appropriations 37,000 37,000 - 37,000
Budgetary Fund Balance,June 30 $ 5 $ 5 $ - $ (5)
83
CITY OF ROSEMEAD,CALIFORNIA
BUDGETARY COMPARISON SCHEDULE
PROPOSITION A
FOR THE YEAR ENDED JUNE 30,2019
Variance with
Final Budget
Budget Amounts Actual Positive
Original Final Amounts (Negative)
Budgetary Fund Balance, July 1 $ 474,772 $ 474,772 $ 474,772 $ -
Resources(Inflows):
Intergovernmental 1,152,000 1,152,000 1,177,965 25,965
Charges for services 20,000 20,000 17,789 (2,211)
Use of money and property - - 18,913 18,913
Amounts Available for Appropriations 1,646,772 1,646,772 1,689,439 42,667
Charges to Appropriation(Outflows):
General government 130,400 130,400 123,969 6,431
Parks and recreation 30,000 30,000 37,555 (7,555)
Public works 904,700 904,700 840,154 64,546
Total Charges to Appropriations 1,065,100 1,065,100 1,001,678 63,422
Budgetary Fund Balance,June 30 $ 581,672 $ 581,672 $ 687,761 $ 106,089
84
CITY OF ROSEMEAD,CALIFORNIA
BUDGETARY COMPARISON SCHEDULE
PROPOSITION C
FOR THE YEAR ENDED JUNE 30,2019
Variance with
Final Budget
Budget Amounts Actual Positive
Original Final Amounts (Negative)
Budgetary Fund Balance,July 1 $ 501,071 $ 501,071 $ 501,071 $ -
Resources(Inflows):
Intergovernmental 892,000 892,000 915,624 23,624
Charges for services 41,000 41,000 35,229 (5,771)
Use of money and property - - 26,273 26,273
Amounts Available for Appropriations 1,434,071 1,434,071 1,478,197 44,126
Charges to Appropriation(Outflows):
General government 27,200 27,200 28,859 (1,659)
Public safety 22,600 22,600 20,832 1,768
Public works 325,700 455,700 400,860 54,840
Capital outlay 325,000 325,000 94,833 230,167
Total Charges to Appropriations 700,500 830,500 545,384 285,116
Budgetary Fund Balance,June 30 $ 733,571 $. 603,571 $ 932,813 $ J 329,242
85
CITY OF ROSEMEAD,CALIFORNIA
BUDGETARY COMPARISON SCHEDULE
MEASURE R
FOR THE YEAR ENDED JUNE 30,2019
Variance with
Final Budget
Budget Amounts Actual Positive
Original Final Amounts (Negative)
Budgetary Fund Balance, July 1 $ 1,113,764 $ 1,113,764 $ 1,113,764 $ -
Resources(Inflows):
Intergovernmental 669,000 669,000 686,916 17,916
Use of money and property - - 40,601 40,601
Amounts Available for Appropriations 1,782,764 1,782,764 1,841,281 58,517
Charges to Appropriation(Outflows):
General government 16,400 16,400 12,443 3,957
Public works 134,900 134,900 97,282 37,618
Capital outlay 478,000 503,000 97,072 405,928
Total Charges to Appropriations 629,300 654,300 206,797 447,503
Budgetary Fund Balance,June 30 $ 1,153,464 $ 1,128,464 $ 1,634,484 $ 506,020
86
CITY OF ROSEMEAD,CALIFORNIA
BUDGETARY COMPARISON SCHEDULE
MEASURE M
FOR THE YEAR ENDED JUNE 30,2019
Variance with
Final Budget
Budget Amounts Actual Positive
Original Final Amounts (Negative)
Budgetary Fund Balance, July 1 $ 580,191 $ 580,191 $ 580,191 $ -
Resources(Inflows):
Intergovernmental 758,000 758,000 773,916 15,916
Use of money and property - - 29,519 29,519
Amounts Available for Appropriations 1,338,191 1,338,191 1,383,626 45,435
Charges to Appropriation(Outflows):
Capital outlay 693,000 693,000 - 693,000
Total Charges to Appropriations 693,000 693,000 - 693,000 ,
Budgetary Fund Balance,June 30 $ 645,191 $ 645,191 $ 1,383,626 $ 738,435
87
CITY OF ROSEMEAD,CALIFORNIA
BUDGETARY COMPARISON SCHEDULE
AIR QUALITY MANAGEMENT DISTRICT
FOR THE YEAR ENDED JUNE 30,2019
Variance with
Final Budget
Budget Amounts Actual Positive
Original Final Amounts (Negative)
Budgetary Fund Balance, July 1 $ 255,263 $ 255,263 $ 255,263 $ -
Resources (Inflows):
Intergovernmental 72,000 72,000 71,685 (315)
Use of money and property - - 8,016 8,016
Amounts Available for Appropriations 327,263 327,263 334,964 7,701
Charges to Appropriation(Outflows):
Public works 70,000 70,000 - 70,000
Total Charges to Appropriations 70,000 70,000 - 70,000
Budgetary Fund Balance,June 30 $ 257,263 $ 257,263 $ 334,964 $ 77,701
88
CITY OF ROSEMEAD,CALIFORNIA
BUDGETARY COMPARISON SCHEDULE ,
STREET LIGHTING
FOR THE YEAR ENDED JUNE 30,2019
Variance with
Final Budget
Budget Amounts Actual Positive
Original Final Amounts (Negative)
Budgetary Fund Balance, July 1 $ 1,327,017 $ 1,327,017 $ 1,327,017 $ -
Resources(Inflows):
Intergovernmental 950,000 950,000 1,143,353 193,353
Use of money and property - - 43,538 43,538
Amounts Available for Appropriations 2,277,017 2,277,017 2,513,908 236,891
Charges to Appropriation(Outflows):
General government 10,700 10,700 7,602 3,098
Public works 830,300 830,300 626,533 203,767
Capital outlay 100,000 100,000 34,214 65,786
Total Charges to Appropriations 941,000 941,000 668,349 272,651
Budgetary Fund Balance,June 30 $ 1,336,017 $ 1,336,017 $ 1,845,559 $ 509,542
89
CITY OF ROSEMEAD,CALIFORNIA
BUDGETARY COMPARISON SCHEDULE
DEVELOPMENT IMPACT FEE TRAFFIC
FOR THE YEAR ENDED JUNE 30,2019
Variance with
Final Budget
Budget Amounts Actual Positive
Original Final Amounts (Negative)
Budgetary Fund Balance, July 1, • $ 5,904 $ 5,904 $ 5,904 $ -
Resources(Inflows):
Use of money and property - - 346 346
Developer participation 8,000 8,000 14,972 6,972
Amounts Available for Appropriations 13,904 13,904 21,222 7,318
Budgetary Fund Balance,June 30 $ 13,904 $ 13,904 $ 21,222 $ 7,318
90
CITY OF ROSEMEAD,CALIFORNIA
BUDGETARY COMPARISON SCHEDULE
DEVELOPMENT IMPACT FEE PUBLIC SAFETY
FOR THE YEAR ENDED JUNE 30,2019
Variance with
Final Budget
Budget Amounts Actual Positive
Original Final Amounts (Negative)
Budgetary Fund Balance,July 1 $ 993 $ 993 $ 993 $ -
Resources(Inflows):
Use of money and property - - 59 59
Developer participation 1,000 1,000 2,686 1,686
Amounts Available for Appropriations 1,993 1,993 3,738 1,745
Budgetary Fund Balance,June 30 $ 1,993 $ 1,993 $ 3,738 $ 1,745
91
CITY OF ROSEMEAD,CALIFORNIA
BUDGETARY COMPARISON SCHEDULE
DEVELOPMENT IMPACT FEE GENERAL GOVERNMENT
FOR THE YEAR ENDED JUNE 30,2019
Variance with
Final Budget
Budget Amounts Actual Positive
Original Final Amounts (Negative)
Budgetary Fund Balance, July 1 $ \ 6,925 $ 6,925 $ 6,925 $ -
Resources(Inflows):
Use of money and property - - 428 428
Developer participation 9,000 9,000 19,581 10,581
Amounts Available for Appropriations 15,925 15,925 26,934 11,009
Budgetary Fund Balance,June 30 $ 15,925 $ 15,925 $ 26,934 $ 11,009
92
CITY OF ROSEMEAD,CALIFORNIA
BUDGETARY COMPARISON SCHEDULE
DEVELOPMENT IMPACT FEE PARKS
FOR THE YEAR ENDED JUNE 30,2019
Variance with
Final Budget
Budget Amounts Actual Positive
Original Final Amounts (Negative)
Budgetary Fund Balance, July 1 $ 29,521 $ 29,521 $ 29,521 $ -
Resources(Inflows):
Use of money and property - - 1,805 1,805
Developer participation 32,000 32,000 79,876 47,876
Amounts Available for Appropriations 61,521 61,521 111,202 49,681
Budgetary Fund Balance,June 30 $ 61,521 $ 61,521 $ 111,202 $ 49,681
93
CITY OF ROSEMEAD,CALIFORNIA
BUDGETARY COMPARISON SCHEDULE
COMMUNITY DEVELOPMENT BLOCK GRANT(CDBG)
FOR THE YEAR ENDED JUNE 30,2019
Variance with
Final Budget
Budget Amounts Actual Positive
Original Final Amounts (Negative)
Budgetary Fund Deficit,July 1 $ (31,024) $ (31,024) $ (31,024) $ -
Resources(Inflows):
Intergovernmental 994,500 994,500 479,068 (515,432)
Charges for services 11,300 11,300 11,571 271
Amounts Available for Appropriations 974,776 974,776 459,615 (515,161)
Charges to Appropriation(Outflows):
General government 7,800 7,800 6,175 1,625
Public safety 28,900 28,900 269 28,631
Community development 954,100 1,026,471 450,730 575,741
Parks and recreation 36,800 36,800 25,338 11,462
Capital outlay - - 895 (895)
Total Charges to Appropriations 1,027,600 1,099,971 483,407 616,564
Budgetary Fund Deficit,June 30 $ (52,824) $ (125,195) $ (23,792) $ 101,403
� 1
94
CITY OF ROSEMEAD,CALIFORNIA
BUDGETARY COMPARISON SCHEDULE
HOME PROGRAM
FOR THE YEAR ENDED JUNE 30,2019
Variance with
Final Budget
Budget Amounts Actual Positive
Original Final Amounts (Negative)
Budgetary Fund Balance, July 1 $ 209,717 $ 209,717 $ 209,717 $ -
Resources(Inflows):
Intergovernmental 778,500 778,500 62,027 (716,473)
Use of money and property - - 9,903 9,903
Amounts Available for Appropriations 988,217 988,217 281,647 (706,570)
Charges to Appropriation(Outflows):
Community development 780,100 1,235,137 215,577 1,019,560
Total Charges to Appropriations 780,100 1,235,137 215,577 1,019,560
Budgetary Fund Balance(Deficit),June 30 $ 208,117 $ (246,920) $ 66,070 $ 312,990
95
CITY OF ROSEMEAD,CALIFORNIA
BUDGETARY COMPARISON SCHEDULE
ROSEMEAD HOUSING DEVELOPMENT CORPORATION
FOR THE YEAR ENDED JUNE 30,2019
Variance with
Final Budget
Budget Amounts Actual Positive
Original Final Amounts (Negative)
Budgetary Fund Balance, July 1 $ 286,648 $ 286,648 $ 286,648 $ -
Resources(Inflows):
Intergovernmental - - 429,968 429,968
Charges for services 448,900 448,900 452,758 3,858
Use of money and property - - 87 87
Miscellaneous 2,900 2,900 5,117 2,217
Amounts Available for Appropriations 738,448 738,448 1,174,578 436,130
Charges to Appropriation(Outflows):
Community development 877,300 877,300 833,596 43,704
Total Charges to Appropriations 877,300 877,300 833,596 43,704
Budgetary Fund Balance(Deficit),June 30 $ (138,852) $ (138,852) $ 340,982 $ 479,834
96
CITY OF ROSEMEAD,CALIFORNIA
BUDGETARY COMPARISON SCHEDULE
ROAD MAINTENANCE AND REHABILITATION ACCOUNT SB1
FOR THE YEAR ENDED JUNE 30,2019
Variance with
Final Budget
Budget Amounts Actual Positive
Original Final Amounts (Negative)
Budgetary Fund Balance, July 1 $ 322,213 $ 322,213 $ 322,213 $ -
Resources(Inflows):
Intergovernmental 920,000 920,000 1,013,497 93,497
Use of money and property - - 20,727 20,727
Amounts Available for Appropriations 1,242,213 1,242,213 1,356,437 114,224
Charges to Appropriation(Outflows):
Capital outlay 1,226,600 1,226,600 - 1,226,600
Total Charges to Appropriations 1,226,600 1,226,600 - 1,226,600
Budgetary Fund Balance,June 30 $ 15,613 $ 15,613 $ 1,356,437 $ 1,340,824
97
CITY OF ROSEMEAD,CALIFORNIA
COMBINING STATEMENT OF NET POSITION
INTERNAL SERVICE FUNDS
JUNE 30,2019
Governmental Activities-Internal Service Funds
Equipment Technology
Replacement Replacement Totals
Assets:
Current Assets:
Cash and investments $ 651,001 $ 82,052 $ 733,053
Total Current Assets 651,001 82,052 733,053
Noncurrent Assets:
Capital assets, net of accumulated depreciation 45,802 21,053 66,855
Total Noncurrent Assets 45,802 21,053 66,855
Total Assets 696,803 103,105 799,908
Net Position:
Investment in capital assets 45,802 21,053 66,855
Unrestricted 651,001 82,052 733,053
Total Net Position $ 696,803 $ 103,105 $ 799,908
98
CITY OF ROSEMEAD,CALIFORNIA
COMBINING STATEMENT OF REVENUES,EXPENSES
AND CHANGES IN FUND NET POSITION
INTERNAL SERVICE FUNDS
FOR THE YEAR ENDED JUNE 30,2019
Governmental Activities-Internal Service Funds
Equipment Technology
Replacement Replacement Totals
Operating Revenues:
Charges for services $ 106,900 $ 159,200 $ 266,100
Total Operating Revenues 106,900 159,200 266,100
Operating Expenses:
Contractual services 295 140,607 140,902
Depreciation expense 44,189 17,922 62,111
Total Operating Expenses 44,484 158,529 203,013
Operating Income 62,416 671 63,087
Net Position at the Beginning of the Year 634,387 102,434 736,821
Net Position at the End of the Year $ 696,803 $ 103,105 $ 799,908
99
CITY OF ROSEMEAD,CALIFORNIA
COMBINING STATEMENT OF CASH FLOWS
INTERNAL SERVICE FUNDS
FOR THE YEAR ENDED JUNE 30,2019
Governmental Activities-Internal Service Funds
Equipment Technology
Replacement Replacement Totals
Cash Flows from Operating Activities:
Cash received from interfund service provided $ 106,900 $ 159,200 $ 266,100
Cash paid to suppliers for goods and services (295) (140,651) (140,946)
Net Cash Provided by Operating Activities 106,605 18,549 125,154
Cash Flows from Capital
and Related Financing Activities:
' Acquisition and construction of capital assets - (13,623) (13,623)
Net Cash Used for Capital _
and Related Financing Activities - (13,623) (13,623)
Net Increase in Cash and Cash Equivalents 106,605 4,926 111,531
Cash and Cash Equivalents at the Beginning of the Year 544,396 77,126 621,522
Cash and Cash Equivalents at the End of the Year $ 651,001 $ 82,052 $ 733,053
Reconciliation of Operating Income to Net Cash
Provided by Operating Activities:
• Operating income $ 62,416 $ 671 $ 63,087
Adjustments to reconcile operating income
net cash provided by operating activities:
Depreciation 44,189 17,922 62,111
Increase in accounts payable - (44) (44)
Total Adjustments 44,189 17,878 62,067
Net Cash Provided by Operating Activities $ 106,605 $ 18,549 $ 125,154
100
CITY OF ROSEMEAD,CALIFORNIA
COMBINING STATEMENT OF CHANGES IN ASSETS AND LIABILITIES
AGENCY FUND
FOR THE YEAR ENDED JUNE 30,2019
Balance Balance
July 1,2018 Additions Deductions June 30, 2019
Assets:
Cash and investments $ 1,048,328 $ 170,380 $ 105,923 $ 1,112,785
Total Assets $ 1,048,328 $ 170,380 $ 105,923 $ 1,112,785
Liabilities:
Deposits payable $ 1,048,328 $ 275,014 $ 210,557 $ 1,112,785
Total Liabilities $ 1,048,328 $ 275,014 $ 210,557 $ 1,112,785
•
101
THIS PAGE INTENTIONALLY LEFT BLANK
102
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 104
These schedules contain trend information to help the reader
understand how the government's financial performance and
wellbeing have changed over time.
Revenue Capacity 112
These schedules contain trend information to help the reader
assess the government's most significant revenue source,
property tax.
Debt Capacity 116
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 123
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 126
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 notes, the information in these schedules is derived from the
Comprehensive Annual Financial Reports for the relevant year.
103
CITY OF ROSEMEAD
Net Position by Component
Last Ten Fiscal Years
(accrual basis of accounting)
Fiscal Year
2010 2011 2012 2013 2014
Governmental activities:
Net investment in capital assets 12,712,242 14,760,940 54,010,031 51,132,854 50,042,631
Restricted 13,199,438 24,806,402 10,870,747 2,829,147 3,110,688
Unrestricted 20,489,721 10,748,249 13,688,078 17,724,709 17,367,841
Total governmental activities net positi 46,401,401 50,315,591 78,568,856 71,686,710 70,521,160
104
Fiscal Year
2015 2016 2017 2018 2019
52,038,429 51,542,030 52,806,193 53,587,243 50,882,552
3,419,068 4,005,847 4,387,055 3,554,634 9,730,202
11,018,153 13,108,874 15,690,721 17,211,587 17,483,422
66,475,650 68,656,751 72,883,969 74,353,464 78,096,176
105
CITY OF ROSEMEAD
Changes in Net Position
Last Ten Fiscal Years
(accrual basis of accounting)
2010 2011 2012 2013
Expenses:
Governmental activities:
General government 5,991,796 3,160,306 3,989,359 3,381,686
Public safety 8,879,854 8,881,926 7,517,101 7,791,073
Public works 11,469,614 11,907,245 11,588,278 11,717,276
Community services 589,650 595,904 - -
Community development 2,141,218 3,969,502 4,080,294 2,616,531
Parks and recreation 2,733,885 2,362,860 2,532,665 2,594,863
Interest and other charges 1,491,717 1,681,875 569,045 7,827
Total governmental activities expenses 33,297,734 32,559,618 30,276,742 28,109,256
Program revenues:
Governmental activities:
Charges for services:
General government 1,573,695 1,048,727 130,450 2,408,362
Public safety 1,293,677 1,293,524 1,454,759 1,622,911
Public works 8,052,011 9,143,311 4,033,874 3,869,285
Community services 186,283 450,004 - -
Community development 597,402 3,753,612 3,501,082 1,896,876
Parks and recreation 20,800 654,437 704,029 785,611
Total governmental activities
program revenues 11,723,868 16,343,615 9,824,194 10,583,045
Net revenues(expenses):
Governmental activities
Total net revenues(expenses) (21,573,866) (16,216,003) (20,452,548) (17,526,211)
General revenues and other changes in net assets:
Governmental activities:
Taxes:
Property taxes 12,328,634 13,656,347 10,567,509 8,900,228
Sales and use taxes , 4,408,367 3,737,363 3,200,911 3,215,897
Transient occupancy taxes 1,129,146 1,219,977 1,323,886 1,447,820
Other taxes 562,317 576,904 633,393 2,275,986
Investment income 389,310 367,961 195,165 28,202
Motor vehicle in-lieu,unrestricted 169,042 263,983 - -
Other general revenues 336,668 307,658 853,956 1,180,688
Loss on sale of capital assets - - (2,340,090) -
Transfer to Successor Agency - - - (6,392,878)
Extraordinary item:
Gain on dissolution of redevelopment agency - - 34,271,082 -
Total governmental activities 19,323,484 20,130,193 48,705,812 10,655,943
Changes in net position
Govermnental activities
Total primary government $ (2,250,382) $ 3,914,190 $ 28,253,264 $ (6,870,268)
106
2014 2015 2016 2017 2018 2019
4,271,354 2,739,281 3,218,363 3,705,685 4,554,063 4,205,482
7,923,316 7,747,949 8,381,588 8,935,164 9,499,683 9,125,853
10,072,081 8,703,817 8,738,495 7,323,865 9,554,073 6,353,025
2,853,472 2,879,028 3,246,081 3,161,310 3,409,699 2,376,713
2,274,920 2,049,540 2,073,145 2,153,986 2,746,482 7,662,344
5,561 3,198 787 - - -
27,400,704 24,122,813 25,658,459 25,280,010 29,764,000 29,723,417
2,030,063 2,725,291 2,203,233 2,191,604 1,769,171 819,371
1,586,557 1,573,532 1,563,652 1,565,275 1,787,151 1,847,594
4,356,486 4,627,331 4,360,908 4,232,311 5,208,427 6,238,575
1,632,508 1,915,557 2,352,137 2,523,350 4,265,255 3,373,246
724,197 713,484 741,171 788,931 828,038 958,176
10,329,811 11,555,195 11,221,101 11,301,471 13,858,042 13,23 6,962
(17,070,893) (12,567,618) (14,437,358) (13,978,539) (15,905,958) (16,486,455)
8,667,709 9,034,141 9,158,499 8,643,019 9,128,934 9,566,800
3,504,285 3,452,605 4,124,745 5,366,975 5,929,492 5,735,491
1,593,640 1,575,401 1,998,954 2,213,286 2,326,863 2,314,723
1,307,280 1,247,941 1,209,249 1,224,230 1,313,699 1,329,822
216,499 97,589 348,651 20,526 210,288 1,158,407
604,053 793,680 945,372 737,721 647,888 123,924
15,893,466 16,201,3 57 17,785,470 18,205,757 19,557,164 20,229,167
$ (1,177,427) $ 3,633,739 $ 3,348,112 $ 4,227,218 $ 3,651,206 $ 3,742,712
107
CITY OF ROSEMEAD
Fund Balances of Governmental Funds
Last Ten Fiscal Years
(modified accrual basis of accounting)
2010 2011 2012 2013
General fund:
Reserved 3,327,182 - - -
Unreserved 13,626,774 - - -
Nonspendable - 2,034 2,034 2,034
Restricted - - - -
Committed - 5,107,963 5,294,253 6,415,416
Assigned - - 5,712 5,712
Unassigned - 10,209,075 9,519,173 11,194,278
Total general fund 16,953,956 15,319,072 14,821,172 17,617,440
All other governmental funds:
Reserved 8,944,112 - - -
Unreserved,reported in:
Special revenue funds 8,763,359 - - -
Debt service funds 2,803,910 - - -
Capital projects funds (1,405,770) - - -
Nonspendable - - - -
Restricted - 27,476,081 10,870,747 2,829,147
Committed - - - -
Assigned - - - -
Unassigned - (4,402,964) (1,292,405) (788,224)
Total all other governmental funds 19,105,611 23,073,117 9,578,342 2,040,923
The City implemented GASB 54 for the fiscal year ended June 30, 2014. 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.
108
2014 2015 2016 2017 2018 2019
140,893 143,560 187,247 765,218 853,920 870,619
5,883,235 6,120,361 6,682,495 6,935,525 8,760,289 8,492,792
65,343 78,280 83,513 63,298 79,798 121,867
11,607,595 10,128,160 11,514,894 11,270,958 10,790,274 13,809,676
17,697,066 16,470,361 , 18,468,149 19,034,999 20,484,281 23,294,954
3,110,688 3,419,068 4,005,847 4,376,257 3,554,634 9,730,202
- - - - 1,912,732 -
(1,192,926) (1,643,527) (832,005) (639,510) (31,024) (23,792)
1,917,762 1,775,541 3,173,842 3,736,747 5,436,342 9,706,410
109
CITY OF ROSEMEAD
Changes in Fund Balances of Governmental Funds
Last Ten Fiscal Years
(modified accrual basis of accounting)
2010 2011 2012 2013
Revenues:
Taxes $ 18,508,896 $ 19,313,094 $ 15,960,662 $ 16,602,329
Intergovernmental 8,537,080 10,124,638 10,330,915 7,372,878
Licenses and permits 1,079,429 1,764,162 1,156,719 1,156,968
Charges for services 708,434 677,861 1,055,391 1,036,563
Fines,forfeitures and penalties 491,574 462,389 619,397 691,548
Development participation - - - -
Investment income 389,310 367,956 582,176 474,970
Other 254,610 253,379 658,670 928,596
Total revenues 29,969,333 32,963,479 30,363,930 28,263,852
Expenditures
Current:
General government 5,903,926 3,801,486 4,203,302 3,988,156
Public safety 8,863,234 8,882,915 7,517,101 7,773,611
Public works 11,264,220 19,402,924 6,417,803 6,909,471
Community services 584,463 595,904 - -
Community development 1,940,641 3,397,072 3,681,903 2,605,654
Parks and recreation 2,733,885 2,362,860 2,532,665 2,208,564
Capital outlay 290,885 93,121 9,090,076 3,126,669
Debt service:
Principal 945,000 975,000 1,210,000 -
Interest and fiscal charges, 1,501,667 1,882,092 961,506 -
Bond issuance costs - 275,344 - -
Total expenditures 34,027,921 41,668,718 35,614,356 26,612,125
Excess(deficiency)of
revenues over(under)
expenditures (4,058,588) (8,705,239) (5,250,426) 1,651,727
Other financing sources(uses):
Transfers in 4,133,554 4,824,919 6,431,374 2,772,415
Transfers out (4,133,554) (4,824,919) (6,554,374) (2,772,415)
Transfer to Successor Agency - - - (6,392,878)
Issuance of long-term debt - 11,230,000 - -
Discount on bonds - (192,139) - -
Payment to bond escrow agent - - - -
Proceeds of capital lease 102,501 - - -
Total other financing
sources(uses) 102,501 11,037,861 (123,000) (6,392,878)
Extraordinary item:
Gain(loss)on dissolution of redevelopment
agency - (8,619,249) _ -
Net change in fund balances (3,956,087) 2,332,622 (13,992,675) (4,741,151)
Debt service as a percentage of
noncapital expenditures 7.4% 8.8% 6.8% 0.0%
110
2014 2015 2016 2017 2018 2019
$ 15,320,806 $ 15,537,262 $ 16,491,447 $ 17,447,510 $ 18,698,988 $ 18,946,836
6,948,479 7,092,141 7,734,995 6,726,279 8,002,636 8,588,211
1,308,482 1,846,997 2,520,937 2,754,881 3,128,000 2,636,026
1,087,091 1,13 8,731 1,191,275 1,012,557 1,572,266 1,653,095
700,126 676,830 597,373 607,754 633,711 622,221
- - - - 28,591 117,115
873,631 754,865 1,002,835 666,968 210,288 1,158,407
61,690 114,074 71,152 231,545 566,338 250,364
26,300,305 27,160,900 29,610,014 29,447,494 32,840,818 33,972,275
3,973,364 3,879,122 3,664,633 4,280,825 4,546,789 4,077,516
7,913,659 8,156,485 8,452,932 9,060,840 9,318,858 9,089,645
6,184,890 6,348,101 6,346,179 6,499,220 6,554,648 7,247,391
2,846,112 3,150,240 3,323,933 3,385,455 3,279,088 3,637,692
2,157,424 2,071,443 2,123,274 2,300,906 2,386,463 2,343,452
3,268,391 4,924,435 2,302,974 2,790,493 3,606,095 495,838
26,343,840 28,529,826 26,213,925 28,317,739 29,691,941 26,891,534
(43,535) (1,368,926) 3,396,089 1,129,755 3,148,877 7,080,741
3,053,605 2,433,974 1,386,471 2,442,441 121,361 -
(3,053,605) (2,433,974) (1,386,471) (2,442,441) (121,361) -
(43,535) (1,368,926) 3,396,089 1,129,755 3,148,877 7,080,741
0.0% 0.0% 0.0% 0.0% 0.0% 0.0%
111
CITY OF ROSEMEAD
Assessed Value and Estimated Actual Value of Taxable Property
Last Ten Fiscal Years
(in thousands of dollars)
City
Fiscal Year Taxable
Ended SBE Assessed Total Direct
June 30 ' Secured Unsecured Non-Unitary Value Tax Rate
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%
2014 3,654,495,783 68,912,542 1,901,995 3,725,310,320 9.27%
2015 3,806,028,086 71,498,360 1,901,995 3,879,428,441 9.27%
2016 4,012,426,717 62,768,733 1,901,995 4,077,097,445 9.27%
2017 4,202,108,491 63,820,415 2,051,995 4,267,980,901 9.27%
2018 4,375,810,412 60,507,061 2,051,995 4,438,369,468 9.27%
2019 4,591,020,006 63,704,447 2,051,995 4,656,776,448 9.27%
1 Beginning with the fiscal year ended June 30,2002,exemptions are netted directly against the
individual property categories.
NOTE:
In 1978 the voters of the State of California passed Proposition 13 which limited property taxes to a total maximum
rate of 1%based upon the assessed value of the property being taxed. Each year,the assessed value of property may
be increased by an "inflation factor" (limited to a maximum increase of 2%). With few exceptions, property is only
re-assessed as a result of new construction activity or at the time it is sold to a new owner. At that point,the property
is reassessed based upon the added value of the construction or at the purchase price (market value) or economic
value 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: L.A. County Assessor 2008/09-2018/19 Combined Tax Rolls and HDL Coren&Cone
112
CITY OF ROSEMEAD
Direct and Overlapping Property Tax Rates
(Rate per$100 of Taxable Value)
Last Ten Fiscal Years
Agency 2009/10 2010/11 2011/12 2012/13 2013/14 2014/15 2015/16 2016/17 2017/18 2018/19
Basic Levy' 1.00000 1.00000 1.00000 1.00000 1.00000 1.00000 1.00000 1.00000 1.00000 1.00000
El Monte City School District 0.00000 0.00000 0.00000 0.00000 0.00000 0.11822 0.14642 0.14682 0.14616 0.14580
El Monte Union High School 0.09654 0.08475 0.09591 0.08992 0.09799 0.08418 0.09155 0.08469 0.08243 0.08793
Garvey School District 0.05378 0.05733 0.05686 0.06037 0.05978 0.05947 0.05874 0.06067 0.08332 0.08705
Garvey-Alhambra 0.02458 0.02770 0.02718 0.02795 0.03154 0.02912 0.02906 0.02806 0.04805 0.04539
Los Angeles Community College District 0.02311 0.04031 0.03530 0.04875 0.04454 0.04017 0.03575 0.03596. 0.04599 0.04621
Metropolitan Water District 0.01800 0.01800 0.01800 0.01800 0.01800 0.01800 0.01800 0.02300 0.03000 0.03000
Montebello Unified School District 0.09673 0.09792 0.10001 0.09630 0.09457 0.08750 0.08715 0.14705 0.13514 0.13921
Pasadena Community College District 0.02300 0.01986 0.01956 0.02056 0.01899 0.01032 0.00872 0.00885 0.00819 0.00767
Rio Hondo Community College District 0.00000 0.00000 0.00000 0.00000 0.00000 0.02821 0.02712 0.02808 0.02748 0.02554
Rosemead School District 0.11358 0.10743 0.10507 0.10240 0.10314 0.09886 0.09997 0.08533 0.11979 0.09260
San Gabriel Unified School District 0.10070 0.10190 0.08454 0.10523 0.10082 0.11444 0.10684 0.10534 0.10078 0.10563
Total Direct&Overlapping'Tax Rates 1.55002 1.55520 1.54243 1.56948 1.56937 1.68849 1.70932 1.75385 1.82733 1.81303
City's Share of 1%Levy Per Prop 13 3 0.09388 0.09388 0.09388 0.09388 0.09388 0.09388 0.09388 0.09388 0.09388 0.09388
Voter Approved City Debt Rate
Redevelopment Rate 1.00430 1.00370 1.00370
Total Direct Rates 0.22270 0.22407 0.22351 0.22113 0.09271 0.09271 0.09273 0.09274 0.09274 0.09279
Notes: •
'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 of any voter approved bonds.
'Overlapping rates are those of local and county governments that apply to property owners within the City.Not all overlapping rates apply to all city property owners.
3 City's share of 1%Levy is based on the City's share of the general fund tax rate area with the largest net taxable value within the city.ERAF general fund tax shifts may not be included in tax ratio figure
°RDA rate is based on the largest RDA tax rate area(TRA)and includes only rate(s)from indebtedness adopted prior to 1989 per California State statute.RDA direct and overlapping
rates are applied only to the incremental property values. The approval of ABXI 26 eliminated Redevelopment from the State of California for Use fiscal year 2012-13 and years thereafter.
3 Total Direct Rate is the weighted average of all individual direct rates applied by the government prepaing site statistical section information and excludes revenues derived from aircraft
Beginning in 2013/14 the Total Direct Rate no longer includes revenue generated from the former redevelopment tax rate areas. Challenges to recognized enforceable obligations are assumed
to have been resolved during 2012/13.For the purposes of this report,residual revenue is assumed to be distributed to the City in the same proportions as general fund revenue.
Source:L.A.County Assessor 2008/09-2018/19 Tax Rate Table and RDL Cores&Cone
•
113
CITY OF ROSEMEAD
Principal Property Tax Payers
Current Year and Nine Years Ago
2018/19 2009/10
Percent of Percent of
Total City Total City
Taxable Taxable Taxable Taxable
Assessed Assessed Assessed Assessed
Taxpayer Value Rank Value Value Rank Value
Rosemead Place,LLC $ 50,954,679 1 1.09%
Walmart Stores,Inc 39,314,711 2 0.84%
Rosemead Hwang,LLC 36,445,808 3 0.78%
AFG Investment Fund 5 LLC 27,082,430 4 0.58%
MHI Rosemead LP 25,422,039 5 0.55%
Sunshine Inn 21,143,460 6 0.45%
Metodo Investments LLC 20,363,538 7 0.44%
420 Boyd Street LLC 19,141,735 8 0.41%
Panda Express 16,232,941 9 0.35%
Macy's California Inc 15,391,401 10 0.33%
Rosemead Place,LLC $ 45,110,229 1 1.33%
Walmart Real Estate Business Trust 36,002,085 2 1.06%
Rosemead Hwang LLC 32,202,355 3 0.95%
AFG Investment Fund 5 LLC 23,929,197 4 0.70%
Metodo Investments LLC 19,438,568 5 0.57%
420 Boyd Street LLC 18,461,000 6 0.54%
Macy's California Inc 16,374,428 7 0.48%
Potters Avenue 13,417,592 8 0.39%
Panda Restaurant Group Inc 12,874,832 9 0.38%
Sunshine Inn , 10,469,716 10 0.31%
Source: Hdl Coren&Cone,Los Angeles County Assessor 2018/19 Combined Tax Rolls.
114
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
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%
2014 2,865,651 2,850,674 99.48% - 2,850,674 99.48%
2015 2,981,810 2,935,129 98.43% - 2,935,129 98.43%
2016 3,134,303 3,114,233 99.36% - 3,114,233 99.36%
2017 3,187,187 2,632,109 82.58% - 2,632,109 82.58%
2018 3,336,547 2,878,054 86.26% - 2,878,054 86.26%
2019 3,489,499 3,008,322 86.21% - 3,008,322 86.21%
* 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
115
CITY OF ROSEMEAD
Ratios of Outstanding Debt by Type
Last Ten Fiscal Years
Tax Percentage Debt
Allocation of Personal Per
Fiscal Year Bonds 2 Income Capita
2009/10 34,490,000 4.25% 601
2010/11 44,745,000 4.76% 775
2011/12 43,535,000 4.57% 804
2012/13 41,740,000 4.35% 766
2013/14 39,885,000 4.22% 728
2014/15 37,965,000 3.97% 693
2015/16 35,970,000 3.86% 651
2016/17 31,775,000 3.31% 578
2017/18 29,455,000 3.03% 533
2018/19 27,295,000 2.62% 495
Notes:Details regarding the City's outstanding debt can be found in the notes to the
financial statements.
1 These ratios are calculated using personal income and population for the prior
116
CITY OF ROSEMEAD
Ratio of General Bonded Debt Outstanding
Last Ten Fiscal Years
(In Thousands, except Per Capita)
Tax Percent of
Allocation Assessed Per
Fiscal Year Bonds Value 1 Capita
2009/10 34,490 1.01% 601
2010/11 44,745 1.30% 775
2011/12 43,535 1.23% 804
2012/13 41,740 1.16% 766
2013/14 39,885 1.07% 728
2014/15 37,965 0.98% 693
2015/16 35,970 0.88% 651
2016/17 31,775 0.74% 578
2017/18 29,455 0.66% 533
2018/19 27,295 0.59% 495
General bonded debt is debt payable with governmental fund
resources and general obligation bonds recorded in enterprise
funds (of which, City has none).
1 Assessed value has been used because the actual value of
taxable property is not readily available in the State of
117
CITY OF ROSEMEAD
Direct and Overlapping Governmental Activities Debt
June 30,2019
Percentage
Gross Bonded Applicable Net Bonded
Debt Balance To City Debt
Overlapping Debt
*Metropolitan Water District $ 23,317,224 0.317% 73,916
Garvey SD DS 2004 Series 2006 12,674,618 50.615% 6,415,258
Garvey SD DS 2004 Series C 8,317,964 50.615% 4,210,137
Garvey SD DS 2011 Refund Bonds 3,175,000 50.615% 1,607,026
Garvey SD DS 2013 Ref Bonds 950,000 50.615% 480,843
Garvey SD DS 2014 Ref Bonds 3,575,000 50.615% 1,809,486
Garvey SD DS 2016 Series A 19,500,000 50.615% 9,869,925
Rosemead SD DS 2007 Series D 120,000 67.459% 80,951
Rosemead SD DS 2008 Series A 215,000 67.459% 145,037
Rosemead SD DS 2011 Ref Bond 6,195,000 67.459% 4,179,085
Rosemead SD DS 2012 Ref Bond 5,160,000 67.459% 3,480,884
Rosemead SD DS 2008 Series B 7,566,503 67.459% 5,104,287
Rosemead SD DS 2014 Ref Bonds 5,560,000 67.459% 3,750,720
Rosemead SD DS 2016 Ref Bonds 12,235,000 67.459% 8,253,609
Rosemead SD DS 2014 Series A 9,000,000 67.459% 6,071,310
Rosemead SD DS 2014 Series T 2 175,000 67.459% 118,053
El Monte Union HSD DS 2008 Series A 30,041,132 14.458% 4,343,347
El Monte Union HSD DS 2008 Series B 25,830,000 14.458% 3,734,501
El Monte Union HSD DS 2015 Ref Bonds 10,765,000 14.458% 1,556,404
El Monte Union HSD DS 2016 Ref DLYD DLVR 4,165,000 14.458% 602,176
El Monte Union HSD DS 2008 Series C 48,525,000 14.458% 7,015,745
El Monte Union HSD DS 2016 Ref Bond 10,650,098 14.458% 1,539,791
El Monte Union HSD DS 2008 Series D 56,430,000 14.458% 8,158,649
LA CCD DS 2003,Taxable Series 2004B 2,115,000 0.294% 6,218
LA CCD DS 2001,Taxable Series 2004A 31,555,000 0.294% 92,772
LA CCD DS 2008,2009 Taxable Ser B 75,000,000 0.294% 220,500
LA CCD DS 2008,2010 Tax Ser D 125,000,000 0.294% 367,500
LA CCD Debt 2008,2010 Tax Ser E(BABS) 900,000,000 0.294% 2,646,000
LA CCD Debt 2008,2012 Series F 202,000,000 0.294% 593,880
LA CCD DS 2013 Ref Bonds 38,945,000 0.294% 114,498
LA CCD DS 2008 Series G 212,070,000 0.294% 623,486
LA CCD DS 2015 Ref Series A 1,429,435,000 0.294% 4,202,539
LA CCD DS 2015 Ref Series B 28,830,000 0.294% 84,760
LA CCD DS 2015 Ref Series C 252,150,000 0.294% 741,321
LA CCD DS 2008 Series I 210,570,000 0.294% 619,076
LA CCD DS 2008 Series J 174,965,000 0.294% 514,397
LA CCD DS 2016 Ref Bonds 247,755,000 0.294% 728,400
Pasadena CCD DS 2002,2006 Series D 1,840,000 2.421% 44,546
Pasadena CCD DS 2002,2009 Series E(BABS) 25,295,000 2.421% 612,392
Pasadena CCD DS 2014 Ref Series A 13,900,000 2.421% 336,519
Pasadena CCD DS 2016 Ref Series A 32,395,000 2.421% 784,283
Montebello USD DS 1998 Series 1998 3,556,797 1.504% 53,494
Montebello USD DS 1998 Series 1999 6,109,304 1.504% 91,884
Montebello USD DS 1998 Series 2004 6,124,071 1.504% 92,106'
Montebello USD DS 2004 Series 2002 5,489,737 1.504% 82,566
Montebello USD DS 2004 Series 2009-1 950,000 1.504% 14,288
Montebello USD DS 2004 Series 2009A-2 BABS 12,640,000 1.504% 190,106
Montebello USD DS 2010 Ref Bonds 2,320,000 1.504% 34,893
Montebello USD DS 2004 Series 2013A 17,245,000 1.504% 259,365
Montebello USD DS Ref Bond Series 2015 28,215,000 1.504% 424,354
Montebello USD DS Ref Bonds 2016 Series A 14,705,000 1.504% 221,163
Montebello USD DS 2016 Series A 84,765,000 1.504% 1,274,866
118
San Gabriel USD DS 2010 Ref Bonds 8,404,370 1.217% 102,281
San Gabriel USD DS 2008 Series B 5,900,000 1.217% 71,803
San Gabriel USD DS 2012 Ref Bond Series B 14,177,023 1.217% 172,534
San Gabriel USD DS 2008 Series C 22,918,806 1.217% 278,922
San Gabriel USD DS 2015 Ref Bond Series A 31,925,000 1.217% 388,527
Total Overlapping Debt 99,687,379
2018/19 Assessed Valuation:$3,856,102,019 After Deducting$800,674,429 Incremental Value.
Debt to Assessed Valutation Ratios:
Direct Debt 0.00%
Overlapping Debt 2.59%
Total Debt 2.59%
*This fund is a portion of a larger agency,and is repsonsible for debt in areas outside the city.
This report reflects debt which is being repaid through voter-approved property tax indebtedness. It excludes
mortgage revenue,tax allocation bonds,interim financing obligations,non-bonded capital lease obligations,and
certificates of participation,unless provided by the city.
Overlapping governments are those that coincide,at least in part,with the geographic boundaries of the city. The percentage
of overlapping debt applicable is estimated by using taxable assessed values. Applicable percentages were estimated by
determining the portion of another governmental unit's taxable assessd value that is within the city's boundaries and
dividing it by each unit's total taxable assessed value.
Source: Hdl Coren&Cone,L.A.County Assessor and Auditor Combined 2018/19 Lien Date Tax Rolls.
119
CITY OF ROSEMEAD
Legal Debt Margin Information
Last Ten Fiscal Years
2009/10 2010/11 2011/12 2012/13 2013/14
Assessed valuation 3,399,331,688 3,431,820,218 3,533,192,184 3,603,395,186 3,725,310,320
Conversion percentage 25% 25% 25% 25% 25%
Adjusted assessed valuation 849,832,922 857,955,055 883,298,046 900,848,797 931,327,580
Debt limit percentage 15% 15% 15% 15% 15%
Debt limit 127,474,938 128,693,258 132,494,707 135,127,319 139,699,137
Total net debt applicable to limit:
General obligation bonds - - - -
Legal debt margin 127,474,938 128,693,258 132,494,707 135,127,319 139,699,137
Total debt applicable to the limit
as a percentage of debt limit 0.0% 0.0% 0.0% 0.0% 0.0%
The Government Code of the State of California provides for a legal debt limit of
15%of gross assessed valuation.However,this provision was enacted when
assessed valuation was based upon 25%of market value.Effective with the 1981-82
fiscal year,each parcel is now assessed at 100%of market value(as of the most
recent change in ownership for that parcel).The computations shown above reflect
a conversion of assessed valuation data for each fiscal year from the current full
valuation perspective to the 25%level that was in effect at the time that the legal
debt margin was enacted by the State of California for local governments located
within the state.
Source: Rosemead Finance Department
Los Angeles County Tax Assessor's Office
120
2014/15 2015/16 2016/17 2017/18 2018/19
3,879,248,441 4,077,097,445 4,337,892,775 4,525,131,407 4,745,176,577.00
25% 25% 25% 25% 25%
969,812,110 1,019,274,361 1,084,473,194 1,131,282,852 1,186,294,144
15% 15% 15% 15% 15%
145,471,817 152,891,154 162,670,979 169,692,428 177,944,122
145,471,817 152,891,154 162,670,979 169,692,428 177,944,122
0.0% 0.0% 0.0% 0.0% 0.0%
121
CITY OF ROSEMVIEAD
Pledged-Revenue Coverage
Last Ten Fiscal Years
(In Thousands)
Tax Allocation Bonds
Fiscal Year
Ended Tax Debt Service
June 30 Increment Principal Interest Coverage
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
2014 5,517,943 1,855,000 1,790,511 1.51
2015 5,521,038 1,920,000 1,718,573 1.52
2016 5,724,292 1,995,000 1,635,578 1.58
2017 4,711,788 850,000 1,602,713 1.92
2018 3,916,792 2,320,000 1,386,038 1.06
2019 3,863,435 2,160,000 1,352,881 1.10
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.
122
CITY OF ROSEMEAD
Demographic and Economic Statistics
Last Ten Calendar Years '
Per
Personal Capita Unemployment
Fiscal Population Income Personal Rate
Year (1) (in thousands)(2) Income(2) (3)
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%
2013/14 54,762 944,918 17,255 6.70%
2014/15 54,786 956,180 17,453 9.50%
2015/16 55,231 932,800 16,889 7.70%
2016/17 54,984 960,740 17,473 6.10%
2017/18 55,267 972,350 17,594 4.30%
2018/19 55,097 1,040,232 18,880 4.30%
Sources: (1) California State Department of Finance
(2) HDL Coren&Cone and based on the last available census.
(3) State of California Employment Development Department
123
CTI'Y OF ROSEMEAD
Principal Employers
Current Year and Nine Years Ago
2019 2009*
Percent of Percent of
Number of Total Number of Total
Employer Employees Employment 1 Employees Employment
Southern California Edison 1 2,722 11.20% - 0.00%
Garvey School District 2 834 3.43% - 0.00%
Panda Restaurant Group, Inc. 3 583 2.40% - 0.00%
Wal-Mart 4 429 1.77% - 0.00%
Rosemead School District 5 372 1.53% - 0.00%
Target 6 320 1.32% - 0.00%
Hemetic Seal Corporation 7 169 0.70% - 0.00%
Double Tree 8 130 0.53% - 0.00%
Lucille's 9 120 0.49% - 0.00%
Don Bosco Tech 10 82 0.34% - 0.00%
124
CITY OF ROSEMEAD
Full-time and Part-time City Employees
by Function
Last Ten Fiscal Years
Function 20102011 2012 2013 2014 2015 2016 2017 2018 2019
General government 22 19 15 13 12 12 11 13 18 21
Public safety 1 42 42 33 15 20 18 20 21 23 28
Community
development 23 23 7 8 8 7 8 8 9 9
Public Works n/a n/a 26 22 23 23 21 24 26 28
Parks and recreation 112 99 68 81 86 80 83 109 118 114
Total 199 183 149 139 149 140 143 175 194 200
1 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.
1 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
125
CITY OF ROSEMEAD
Operating Indicators
by Function
Last Ten Fiscal Years
2007 2010 2011 2012 2013 2014
Police:
Arrests 1,786 1,733 1,888 1,842 1,186 1,356
Parking citations issued 13,210 8,450 7,515 7,797 8,765 16,110
Fire:
Number of emergency calls 2,749 2,853 2,745 2,928 2,785 2,823
Inspections - 2,137 1,845 2,066 2,012 2,026
Public works:
Street resurfacing(miles) 2.5 3.5 3.5 3.6 0.9 1.6
Parks and recreation:
Number of recreation classes 775 727 617 519 638 724
Number of facility rentals n/a 236 1,786 3,261 3,124 4,005
Source:City of Rosemead
126
2015 2016 2017 2018 2019
1,585 1,339 1,046 1,256 1,817
7,863 8,047 7,676 8,086 6,244
3,212 3,352 3,206 3,822 2,823
2,793 2,564 2,311 2,430 2,288
0.6 1.0 0.7 0.8 1.0
839 871 873 707 631
2,607 3,070 6,226 3,679 2,508
127
CITY OF ROSEMEAD
Capital Asset Statistics
by Function
Last Ten Fiscal Years
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
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) 77.55 77.55 77.55 77.55 77.55 77.55 81.90 81.90 81.80 81.80
Streetlights 2,712 2,712 2,712 2,712 2,712 2,712 2,712 2,712 2,511 2,511
Traffic signals 42 42 42 42 42 42 41 42 42 42
Parks and recreation:
Parks 10 10 10 10 10 10 10 10 11 12
Community centers 2 2 2 2 2 2 2 2 2 2
128
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Attachment B
Rosemead Housing Development
Corporation Financial Statement
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CPAs AND ADVISORS
HOUSING DEVELOPMENT CORPORATION
FOR THE YEAR ENDED JUNE 30, 2019 FINANCIAL STATEMENTS
Focused
on YOU
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ROSEMEAD HOUSING
DEVELOPMENT CORPORATION
A COMPONENT UNIT OF
THE CITY OF ROSEMEAD, CALIFORNIA
BASIC FINANCIAL STATEMENTS
(WITH SUPPLEMENTARY INFORMATION)
AND
INDEPENDENT AUDITORS' REPORT
FOR THE YEAR ENDED
JUNE 30, 2019
ROSEMEAD HOUSING
DEVELOPMENT CORPORATION
A COMPONENT UNIT OF
THE CITY OF ROSEMEAD, CALIFORNIA
BASIC FINANCIAL STATEMENTS
(WITH SUPPLEMENTARY INFORMATION)
AND
INDEPENDENT AUDITORS' REPORT
FOR THE YEAR ENDED
JUNE 30, 2019
TABLE OF CONTENTS
Page
Number
INDEPENDENT AUDITORS' REPORT 1
BASIC FINANCIAL STATEMENTS
Statements of Net Position 4
Statements of Activities 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 Financial Statements 10
REQUIRED SUPPLEMENTARY INFORMATION
Notes to Required Supplementary Information 17
Budgetary Comparison Schedule 18
INDEPENDENT AUDITORS' 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 19
•
CPAs AND ADVISORS
INDEPENDENT AUDITORS' REPORT
To the Board of Directors
Rosemead Housing Development Corporation
Rosemead, California
Report on the Financial Statements
We have audited the accompanying financial statements of the governmental activities and
General Fund of the Rosemead Housing Development Corporation (the Corporation), a component unit
of the City of Rosemead, California, as of and for the year ended June 30, 2019, and the related notes to
the financial statements, which collectively comprise the Corporation's basic financial statements as listed
in the table of contents.
Management's Responsibility for the Financial Statements
Management is responsible for the preparation and fair presentation of these financial statements in
accordance with accounting principles generally accepted in the United States of America; this includes
the design, implementation, and maintenance of internal control relevant to the preparation and fair
presentation of financial statements that are free from 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 amounts and disclosures in
the financial statements. The procedures selected depend on the auditor's judgment, including the
assessment of the risks of material misstatement of the financial statements, whether due to fraud or
error. In making those risk assessments, the auditor considers internal control relevant to the entity's
preparation and fair presentation of the financial statements in order to design audit procedures that are
appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of
the entity's internal control. Accordingly, we 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.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for
our audit opinions.
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To the Board of Directors
Rosemead Housing Development Corporation
Rosemead, California
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 General Fund of the Rosemead Housing
Development Corporation, a component unit of the City of Rosemead, California, as of June 30, 2019,
and the respective changes in financial position for the year then ended in accordance with accounting
principles generally accepted in the United States of America.
Emphasis of Matter
As discussed in Note 1, the financial statements present only the Rosemead Housing
Development Corporation and do not purport to, and do not present fairly the financial position of the
City of Rosemead, California, as of June 30, 2019, the changes in its financial position, or, where
applicable, its cash flows for the year then ended in accordance with accounting principles generally
accepted in the United States of America. Our opinion is not modified with respect to this matter.
Other Matters
Required Supplementary Information
Accounting principles generally accepted in the United States of America require that the budgetary
comparison information for the General Fund be presented to supplement the basic financial statements.
Such information, although not a part of the basic financial statements, is required by the Governmental
Accounting Standards Board, who considers it to be an essential part of financial reporting for placing the
basic financial statements in an appropriate operational, economic, or historical context. We have applied
certain limited procedures to the required supplementary information in accordance with auditing
standards generally accepted in the United States of America, which consisted of inquiries of
management about the methods of preparing the information and comparing the information for
consistency with management's responses to our inquiries, the basic financial statements, and other
knowledge we obtained during our audit of the basic financial statements. We do not express an opinion
or provide any assurance on the information because the limited procedures do not provide us with
sufficient evidence to express an opinion or provide any assurance.
Management has omitted management discussion and analysis that accounting principles generally
accepted in the United States of America require 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.
2
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CP/s ADV15O195
To the Board of Directors
Rosemead Housing Development Corporation
Rosemead, California
Other Reporting Required by Government Auditing Standards
In accordance with Government Auditing Standards, we have also issued our report dated
November 25, 2019 on our consideration of the Corporation's internal control over financial reporting and
on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant
agreements and other matters. The purpose of that report is solely 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 effectiveness of the Corporation's 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.
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Brea, California
November 25, 2019
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3
ROSEMEAD HOUSING DEVELOPMENT CORPORATION
A COMPONENT UNIT OF THE CITY OF ROSEMEAD,CALIFORNIA
STATEMENT OF NET POSITION
JUNE 30, 2019
Governmental
Activities
Assets:
Cash and investments $ 376,844
Accounts receivable 9,377
Capital assets, net of depreciation 6,884,989
Total Assets 7,271,210
Liabilities:
Accounts payable 5,338
Deposits payable 39,901
Total Liabilities 45,239
Net Position:
Investment in capital assets 6,884,989
Unrestricted 340,982
Total Net Position $ 7,225,971
The notes to financial statements are an integral part of this statement.
4
ROSEMEAD HOUSING DEVELOPMENT CORPORATION
A COMPONENT UNIT OF THE CITY OF ROSEMEAD,CALIFORNIA
STATEMENT OF ACTIVITIES
FOR THE YEAR ENDED JUNE 30,2019
Net(Expenses)
Revenues and
Changes in
Program Revenues Net Position
Operating Capital
Charges for Contributions Contributions Governmental
Expenses Services and Grants and Grants Activities
Functions/Programs
Governmental Activities:
General Government $ 1,056,369 $ 452,758 $ 429,968 $ - $ (173,643)
Total Governmental Activities $ 1,056,369 $ 452,758 $ 429,968 $ - (173,643)
General Revenues:
Investment Income 87
Other 5,117
Total General Revenues 5,204
Change in Net Position (168,439)
Net Position at the Beginning of the Year 7,394,410
Net Position at the End of the Year $ 7,225,971
l._
The notes to financial statements are an integral part of this statement.
5
ROSEMEAD HOUSING DEVELOPMENT CORPORATION
A COMPONENT UNIT OF THE CITY OF ROSEMEAD,CALIFORNIA
BALANCE SHEET
GOVERNMENTAL FUND
JUNE 30,2019
General Fund
Assets:
Cash and investments $ 376,844
Accounts receivable 9,377
Total Assets $ 386,221
Liabilities and Fund Balance:
Liabilities:
Accounts payable $ 5,338
Deposits payable 39,901
Total Liabilities 45,239
Fund Balances:
Unassigned 340,982
Total Fund Balances 340,982
Total Liabilities and Fund Balance $ 386,221
The notes to financial statements are an integral part of this statement.
6
ROSEMEAD HOUSING DEVELOPMENT CORPORATION
A COMPONENT UNIT OF THE CITY OF ROSEMEAD,CALIFORNIA
RECONCILIATION OF THE BALANCE SHEET OF GOVERNMENTAL FUNDS
TO THE STATEMENT OF NET POSITION
JUNE 30,2019
Fund balances of governmental funds $ 340,982
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 governmental fund activity. 6,884,989
Net Position of Governmental Activities $ 7,225,971
The notes to financial statements are an integral part of this statement.
7
ROSEMEAD HOUSING DEVELOPMENT CORPORATION
A COMPONENT UNIT OF THE CITY OF ROSEMEAD,CALIFORNIA
STATEMENT OF REVENUES,
EXPENDITURES AND CHANGES IN FUND BALANCES
GOVERNMENTAL FUND
FOR THE YEAR ENDED JUNE 30,2019
General Fund
Revenues:
Intergovernmental $ 429,968
Rental Income 452,758
Investment Income 87
Other 5,117
Total Revenues 887,930
Expenditures:
Current:
Operating 423,996
Administrative services paid to City of Rosemead 226,200
Facility rent paid to City of Rosemead 183,400
Total Expenditures 833,596
Net Change in Fund Balance 54,334
Fund Balance at the Beginning of the Year 286,648
Fund Balance at the End of the Year $ 340,982
The notes to the financial statements are an integral part of this statement.
8
ROSEMEAD HOUSING DEVELOPMENT CORPORATION
A COMPONENT UNIT OF THE CITY OF ROSEMEAD,CALIFORNIA
RECONCILIATION OF THE STATEMENT OF REVENUES,EXPENDITURES,
AND CHANGES IN FUND BALANCES OF GOVERNMENTAL FUNDS
TO THE STATEMENT OF ACTIVITIES
FOR THE YEAR ENDED JUNE 30,2019
Net change in fund balances-total governmental funds $ 54,334
Amounts reported for governmental activities in the statement of activities are
different 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 capital outlays exceeded
depreciation in the current period. (222,773)
Change in Net Position of Governmental Activities $ (168,439)
The notes to financial statements are an integral part of this statement.
9
ROSEMEAD HOUSING DEVELOPMENT CORPORATION
A COMPONENT UNIT OF THE CITY OF ROSEMEAD, CALIFORNIA
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2019
Note 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
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.
10
ROSEMEAD HOUSING DEVELOPMENT CORPORATION
A COMPONENT UNIT OF THE CITY OF ROSEMEAD,CALIFORNIA
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
JUNE 30, 2019
Note 1: Summary of Significant Accounting Policies (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 and payments made by parties outside of
the reporting governments 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.
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 balance, 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.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.
11
ROSEMEAD HOUSING DEVELOPMENT CORPORATION
A COMPONENT UNIT OF THE CITY OF ROSEMEAD,CALIFORNIA
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
JUNE 30,2019
Note 1: Summary of Significant Accounting Policies (Continued)
Revenue recognition is subject to the measurable and available criteria for the
governmental funds in the fund financial statements. Exchange transactions are
recognized as revenues in the period in which they are earned(i.e.,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.
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
A COMPONENT UNIT OF THE CITY OF ROSEMEAD, CALIFORNIA
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
JUNE 30,2019
Note 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 acquisition 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.
g. Fund Balance
The Corporation reports fund balance in classifications that 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.
13
ROSEMEAD HOUSING DEVELOPMENT CORPORATION
A COMPONENT UNIT OF THE CITY OF ROSEMEAD, CALIFORNIA
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
JUNE 30, 2019
Note 1: Summary of Significant Accounting Policies (Continued)
• 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.
h. Rental Income
A management company collects rent payments on the first day of the month and the
corporation recognizes revenue in the month due. Monthly rental income per unit ranges
from $250 to$450 and is approved by the annual budget.
i. Use of Estimates
The preparation of financial statements in conformity with generally accepted accounting
principles requires management to make estimates and assumptions that affect
certain reported amounts and disclosures. Accordingly, actual results could differ from
those estimates.
14
ROSEMEAD HOUSING DEVELOPMENT CORPORATION
A COMPONENT UNIT OF THE CITY OF ROSEMEAD,CALIFORNIA
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
JUNE 30, 2019
Note 2: Cash and Investments
Cash and investments at June 30,2019 consisted of demand deposits with financial institutions
and the Corporation's share in the pooled cash of the City of Rosemead's investments. The
carrying amount and the bank balance of the Corporation's demand deposits was$52,538.
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, 2019, the Corporation had no deposits with financial institutions in excess of federal
depository insurance limits.
Note 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, 2019. 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 $1,430,704 for the Angelus Senior Housing facility at June 30, 2019. 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 $2,604,707 for the Garvey Senior Housing facility at
June 30,2019.The Corporation paid$91,200 and$92,200 in lease payments to the City during
the year ended June 30, 2019 for the Angelus and Garvey Senior Housing facilities,
respectively.
15
ROSEMEAD HOUSING DEVELOPMENT CORPORATION
A COMPONENT UNIT OF THE CITY OF ROSEMEAD,CALIFORNIA
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
JUNE 30, 2019
Note 4: Capital Assets
During the year ended June 30, 2019,the changes in capital assets were as follows:
Balance at Balance at
June 30,2018 Additions Deletions June 30,2019
Governmental Activities:
Capital assets being depreciated:
Building and improvements $ 11,042,597 $ - $ - $ 11,042,597
Furniture and equipment 128,544 - - 128,544
Total Capital Assets,
Being Depreciated 11,171,141 - - 11,171,141
Less accumulated depreciation:
Building and improvements (3,934,835) (222,773) - (4,157,608)
Furniture and equipment (128,544) - - (128,544)
Total Accumulated
Depreciation (4,063,379) (222,773) - (4,286,152)
Governmental Activities
Capital Assets, Net $ 7,107,762 $ (222,773) $ - $ 6,884,989
Depreciation expense is allocated to the general government function in the statement
of activities.
Note 5: Risk Management
The Corporation is exposed to various risks of loss related to torts, thefts of, damage to and
destruction of assets, errors and omissions, and natural disasters. The Corporation, through
the City,carries commercial liability insurance coverage. The Corporation carries no insurance
coverage for natural disasters. Since the Corporation does not have any employees
(it uses employees from the City),it is not liable for injury to employees,workers'compensation,
or employee health and accident insurance. The City has had no reduction in insurance
coverage, nor did the City have any settlements that were in excess of insurance coverage in
any of the three preceding years.
Note 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, 2019.
16
ROSEMEAD HOUSING DEVELOPMENT CORPORATION
A COMPONENT UNIT OF THE CITY OF ROSEMEAD,CALIFORNIA
NOTES TO REQUIRED SUPPLEMENTARY INFORMATION
JUNE 30, 2019
Note 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.
17
ROSEMEAD HOUSING DEVELOPMENT CORPORATION
A COMPONENT UNIT OF THE CITY OF ROSEMEAD,CALIFORNIA
BUDGETARY COMPARISON SCHEDULE
FOR THE YEAR ENDED JUNE 30,2019
Variance with
Final Budget
Budget Amounts Actual Positive
Original Final Amounts (Negative)
Budgetary Fund Balance, July 1 $ 286,648 $ 286,648 $ 286,648 $ -
Resources(Inflows):
Intergovernmental - - 429,968 429,968
Rental income 448,900 448,900 452,758 3,858
Investment income - - 87 87
Miscellaneous 2,900 2,900 5,117 2,217
Amounts Available for Appropriations 738,448 738,448 1,174,578 436,130
Charges to Appropriations(Outflows):
Operating costs 467,700 467,700 423,996 43,704
Administrative services paid to City of Rosemead 226,200 226,200 226,200 -
Facility rent paid to City of Rosemead 183,400 183,400 183,400 -
Total Charges to Appropriations 877,300 877,300 833,596 43,704
Budgetary Fund Balance(Deficit),June 30 $ (138,852) $ (138,852) $ 340,982 $ 479,834
•
The notes to required supplementary information are an integral part of this schedule.
18
.•••••••
CPAs AND ADVISORS
INDEPENDENT AUDITORS' 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
To the Board of Directors
Rosemead Housing Development Corporation
Rosemead, California
We have audited, in accordance with the 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, the financial statements of the governmental
activities and the General Fund the Rosemead Housing Development Corporation (the Corporation), a
component unit of the City of Rosemead, California, as of and for the year ended June 30, 2019, and the
related notes to the financial statements, which collectively comprise the Corporation's basic financial
statements, and have issued our report thereon dated November 25, 2019.
Internal Control over Financial Reporting
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 reasonable possibility that a material misstatement of the Corporation's
financial statements will not be prevented, or detected and corrected on a timely basis. A significant
deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe than a
material weakness, yet important enough to merit attention by those charged with governance.
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. PrimeGlobal
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203 N.Brea Blvd.,Suite 203 I Brea,CA 92821 I Phone:714.672.0022
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To the Board of Directors
Rosemead Housing Development Corporation
Rosemead, California
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 Corporation's internal control and compliance.
Accordingly, this communication is not suitable for any other purpose.
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Brea, California
November 25, 2019
20