CC - Item 4C - Transmittal of Fiscal Year 2019-20 City of Rosemead and Rosemead Housing Corporation Annual Financial Reports 5
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{ ROSEMEAD CITY COUNCIL
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/NCORPORATED A°9STAFF REPORT
TO: THE HONORABLE MAYOR AND CITY COUNCIL
FROM: GLORIA MOLLEDA, CITY MANAGER .i l
DATE: JANUARY 26, 2021
SUBJECT: TRANSMITTAL OF FISCAL YEAR 2019-20 CITY OF ROSEMEAD
AND ROSEMEAD HOUSING CORPORATION ANNUAL FINANCIAL
REPORTS
SUMMARY
This report provides the Fiscal Year (FY) 2019-20 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 4.0
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January 26,2021
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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 2019/20, the accounting firm of Lance, So11 & 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 2019-20:
• The City's total assets and deferred outflows of resources as of June 30, 2020, were
about $94.7 million. Total liabilities and deferred inflow of resources were $14.4
million, while the total net position was $80.3 million. The net pension liability of
$8.8 million was reported as part of total liability in the balance sheet due to the reporting
requirements of the Governmental Accounting Standards Board (GASB) Statement
No. 68. GASB Statement No. 68 also established reporting of deferred outflows and
inflows of resources related to pension. Deferred outflows and inflows of resources
related to pensions reported at June 30, 2020 of $3.4 million and $1.6 million,
respectively, represented pension contributions subsequent to measurement date, the net
difference between projected and actual earnings on plan investments, changes of
assumptions, the difference in proportion, expected and actual experience, and
differences in actual and proportionate share in contribution.
• As of June 30, 2020, the City-wide total revenues from all sources were $31.9 million
and total expenses for all functions and programs were $27.3 million. The City's net
position increased by $4.6 million during the year.
• The City's General Fund revenues exceeded expenditures by $914 thousand.
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January 26,2021
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• At the end of the current fiscal year, the unassigned fund balance for the General Fund
was $14.7 million or 67% of total General Fund expenditures. $7.1 million or 31% is set
aside to meet the City's reserve policy.
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, 2020 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.
City of Rosemead's Net Position
As of June 30, 2020 and 2019
(thousands)
Governmental ActivitiGg
2020
Current and other assets 42,489 37,251
Capital assets 48,826 50,883
Total assets 91,315 88,134
Deferred outflows of resources 3,403 3,583
Long-term liabilities outstanding 9,515 9,680
Other liabilities 3,295 2,952
Total liabilities 12,810 12,632
Deferred inflows of resources 1,647 989
Net assets:
Net Investment in Capital Assets 48,826 50,883
Restricted 13,681 9,730
Unrestricted 17,754 17,483
Total net position $ 80,261 $ 78,096
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January 26,2021
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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 $80.2 million as of June 30, 2020. It increased by $2.1 million during the fiscal year. Assets
increase by $3.2 million due to an increase in cash, investments, and fixed assets.
Liabilities slightly increased by $177 thousand. Assets and deferred outflows of resources
exceeded liabilities and deferred inflows of resources by $80.3 million as of June 30, 2020.
A significant portion of the City of Rosemead's net position at June 30, 2020, $48.8 million
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 ($13.68 million) represents
resources that are subject to external restrictions on how they may be used. The remaining
balance of unrestricted net position ($17.7 million) may be used to meet the government's
ongoing obligations to citizens and creditors.
At the end of the current fiscal year, the City of Rosemead is able to report positive net position
balances. The situation also held true for the prior fiscal year.
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January 26,2021
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City of Rosemead's Changes in Net Position
Years Ended June 30, 2020 and 2019
(thousands)
'Governi-nead
Activities
r ::20200 ,;` x;;2019
Program revenues:
Charges for services $ 6,792 $ 7,897
Operating grants and contributions 4,536 4,122
Capital grants and contributions 1,218 1,218
General revenues:
Property taxes 9,942 9,567
Other taxes 8,602 9,380
Investment income 905 1,158
Other 257 124
Total revenues 32,252 33,466
Expenses:
General government 4,004 4,205
Public safety 9,744 9,126
Public works 9,947 7,662
Community development 3,472 6,353
Parks and recreation 2,920 2,377
Total expenses 30,087 29,723
Change in net position 2,165 3,743
Net position -June 30, 2019 78,096 74,353
Net position -June 30, 2020 $ 80,261 $ 78,096
Governmental activities increased the City of Rosemead's net position by approximately $2.2
million over the previous fiscal year. General Revenue and program revenue exceeded expenses
by this same amount. Expenses increased in Public Safety due to an increase in the Los Angeles
County's Sheriff Law Enforcement contract and movement of Code Enforcement staff from the
Community Development Department to the Public Safety Department.
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January 26,2021
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Public Works expenses increased due to a reclassification of governmental depreciation from the
Community Development Department to the Public Works Department correcting a previous
fiscal year entry. General Government remained fairly stable with Parks and Recreation expenses
increasing due to an increase in programs, certain facility maintenance expenses, and the
increase in minimum wage benefits for part-time staff members.
Community Development Department expenses decreased due to the reclassification issue as
mentioned earlier, changes in staffing levels outlined earlier, and decrease in programmatic
activities due to the COVID-19 pandemic. As noted earlier, the City uses fund accounting to
ensure and demonstrate compliance with finance-related legal requirements.
Financial Analysis of the Government's Funds
Governmental 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.
The City implemented GASB Statement No. 54 in FY 2010-11. It substantially altered the
categories and terminology used to describe "fund balance." The new categories are as follows:
• Non-spendable fund balance (inherently non-spendable)
• Restricted fund balance (externally enforceable limitations on use)
• Committed fund balance (self-imposed limitations on use)
• Assigned fund balance (limitation resulting from intended use)
• Unassigned fund balance (residual net resources)
As of the end of the current fiscal year, the City of Rosemead's governmental funds reported
combined fund balances of$37.6 million. Approximately $14.7 million constitutes unassigned,
undesignated fund balance, which is available for spending at the government's discretion. The
remainder of the fund balance is segregated into non-spendable 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 $14.7 million,
while the total fund balance reached $24.2 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 67% of total General Fund
expenditures,while total fund balance represents 110% of that same amount.
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January 26,2021
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The fund balance of the City of Rosemead's General Fund increased by $913 thousand during
the current year. Highlights of the change in fund balance are presented below:
• Total General Fund (GF) revenues of approximately $22.95 million exceeded
expenditures of approximately $22.04 million even with the negative impact of the
COVID-19 pandemic due to limiting expenditures over the last 4 months of the fiscal
year causing the fund balance to increase $913 thousand as of June 30, 2020. GF
revenues had decreased compared to the prior year's actual and compared to the
approved amounts in the FY 2019-20 Budget. Property tax revenues increased slightly as
did miscellaneous revenues with Sales Tax, Transient Occupancy Tax, Fees and Permits,
and interest revenues not meeting budgeted amounts for FY 2019/20.
• As mentioned earlier, total General Fund revenues decreased by $1.78 million in FY
2019/20 over the prior fiscal year mainly due to the COVID-19 pandemic widespread
economic shutdown that occurred in March 2020. The pandemic required closure of all
Parks and Recreation programs per Los Angeles County Health Officials, causing
revenue decreases in spring and summer; the closing of City Hall combined with the
general COVID-19 pandemic shut-down caused a decrease in building activities;
transient occupancy tax, sales tax and the discontinuation of certain grants.
• General Fund expenditures increased by $119 thousand over the prior year due to
preparations for the COVID-19 Emergency and inflationary increases in salary, benefit,
and administration costs.
• Public safety expenditures are one of the City's largest areas of expenditures. Los
Angeles County's Sheriff's Department contract increased by 5% over the previous year
and the Liability Trust Fund increased by .5% as well. The City also continued 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. This program was
discontinued after March when schools were ordered to close after the COVID-19
Emergency Declaration. General Costs continued to decrease as well in the Public Safety
Admin division because the City had a continuous turnover of part-time Community
Services Officers during the year.
• Parks and Recreation expenditures increased by $329 thousand primarily due to increased
Community Events during the first 6 months of the year, certain maintenance efforts
within facilities, and the wage increases of full-time and part-time employees for the
Aquatics and General Recreation divisions. Also, the City continued to pay for part-time
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January 26,2021
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employees for their regular compensation from March 23 to May 18, 2020, without any
impact on the employees' leave balances during the COVID-19 Emergency.
• Offset by lower expenditures in General Government and Capital outlay expenditures.
Most Capital projects were anticipated to be completed in FY 2020/21. In addition,
several amended and new capital projects were approved during the budget process for
FY 2020/21 budget.
• 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 CalPERS board; this has
impacted the actuarial valuation performed and caused an increase to participants'
retirement contributions. However, the City anticipates a material reduction in Ca1PERS
for FY 2020/21 due to actuarial assumption rates for this year and the retirements of
some senior staff who will be replaced by Second Tier or PEPRA employees.
Revenues by Source
Governmental Activities
Investment income
5% Other revenue
2%
Franchise taxes
7%
Transient occupancy
taxes
9% Property taxes
50%
Sales and use taxes
27%
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January 26,2021
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Expenses and Program Revenues
Governmental Activities
12,000,000
10,000,000
8,000,000 _____ —
6,000,000 --
4,000,000 — —
2,000,000 I I ■ Expenses
Revenues
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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 $9.9 million, sales tax as the
second largest revenue source at $5.4 million, and TOT at $1.8 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 2019/20 with a healthy General Fund
Balance of$24.2 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
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January 26,2021
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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, 2020.
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.
Prepared by: Submitted by:
Maria er ita Anson Ben Kim
Finance Manager Acting ' ance Director/Assistant City Manager
Attachment A: City of Rosemead Comprehensive Annual Financial Report
Attachment B: Rosemead Housing Development Corporation Financial Statement
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City of Rosemead
Comprehensive Annual Finance Report
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COMPREHENSIVE ANNUAL
FINANCIAL REPOR
Fiscal Year Ended June 30, 2020
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CITY OF ROSEMEAD, CALIFORNIA
COMPREHENSIVE ANNUAL FINANCIAL REPORT
FISCAL YEAR ENDED JUNE 30, 2020
Prepared by:
Finance Department
THIS PAGE INTENTIONALLY LEFT BLANK
CITY OF ROSEMEAD, CALIFORNIA
COMPREHENSIVE ANNUAL FINANCIAL REPORT
FOR THE FISCAL YEAR ENDED JUNE 30, 2020
TABLE OF CONTENTS
Page
Number
INTRODUCTORY SECTION
Letter of Transmittal
Directory of Officials ix
Organizational Chart x
Certificate of Achievement of Excellence xi
FINANCIAL SECTION
INDEPENDENT AUDITORS' REPORT 1
MANAGEMENT'S DISCUSSION AND ANALYSIS 5
Government—Wide Financial Statements
Statement of Net Position 19
Statement of Activities 20
Fund Financial Statements
Balance Sheet—Governmental Funds 21
Reconciliation of the Balance Sheet of Governmental Funds
to the Statement of Net Position 22
Statement of Revenues, Expenditures and Changes in Fund
Balances—Governmental Funds 23
Reconciliation of the Statement of Revenues, Expenditures and
Changes in Fund Balances of Governmental Funds to the
Statement of Activities 24
Statement of Net Position—Proprietary Funds 25
Statement of Revenues, Expenses and Changes in Fund Net
Position—Proprietary Funds 26
Statement of Cash Flows—Proprietary Funds 27
Statement of Fiduciary Net Position—Fiduciary Funds 28
Statement of Changes in Fiduciary Net
Position—Fiduciary Funds 29
Notes to Financial Statements 31
REQUIRED SUPPLEMENTARY INFORMATION
Notes to Required Supplementary Information 69
Budgetary Comparison Schedules
General Fund 70
Community Development Block Grant(CDBG) 71
CITY OF ROSEMEAD, CALIFORNIA
COMPREHENSIVE ANNUAL FINANCIAL REPORT
FOR THE FISCAL YEAR ENDED JUNE 30, 2020
TABLE OF CONTENTS
Page
Number
FINANCIAL SECTION (Continued)
Pension Plan
Schedule of Proportionate Share of Net Pension Liability 72
Schedule of Plan Contributions 73
Schedule of Changes in Net Pension Liability/(Asset)and Related Ratios 74
Schedule of Plan Contributions 75
Schedule of Changes in Net OPEB Liability and Related Ratios 76
Schedule of Plan Contributions 77
COMBINING AND INDIVIDUAL FUND STATEMENTS AND SCHEDULES
Combining Balance Sheet—Nonmajor Governmental Funds 78
Combining Statement of Revenues, Expenditures and
Changes in Fund Balances—Nonmajor Governmental Funds 82
Budgetary Comparison Schedules
State Gas Tax Fund 86
Proposition A 87
Proposition C 88
Measure R 89
Measure M 90
Air Quality Management District 91
Street Lighting 92
Development Impact Fee Traffic 93
Development Impact Fee Public Safety 94
Development Impact Fee General Government 95
Development Impact Fee Parks 96
Home Program 97
Rosemead Housing Development Corporation 98
Road Maintenance and Rehabilitation Account SB1 99
Combining Statement of Net Position— Internal Service Funds 100
Combining Statement of Revenues, Expenses and Changes in
Fund Net Position—Internal Service Funds 101
Combining Statement of Cash Flows—Internal Service Funds 102
Combining Statement of Assets and Liabilities—Agency Fund 103
CITY OF ROSEMEAD, CALIFORNIA
COMPREHENSIVE ANNUAL FINANCIAL REPORT
FOR THE FISCAL YEAR ENDED JUNE 30, 2020
TABLE OF CONTENTS
Page
Number
STATISTICAL SECTION
Net Position by Component 106
Changes in Net Position 108
Fund Balances of Governmental Funds 110
Changes in Fund Balances of Governmental Funds 112
Assessed Value and Estimated Actual Value of Taxable Property 114
Direct and Overlapping Property Tax Rates 115
Principal Property Taxpayers 116
Property Tax Levies and Collections 117
Ratios of Outstanding Debt by Type 118
Ratio of General Bonded Debt Outstanding 119
Direct and Overlapping General Bonded Debt Outstanding 120
Legal Debt Margin 122
Pledged-Revenue Coverage 124
Demographic and Economic Statistics 125
Principal Employers 126
Full-time and Part-time City Employees by Function 127
Operating Indicators by Function 128
Capital Assets Statistics by Function 129
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December 10, 2020
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 FY 19-20 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, 2020, 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
unmodified opinion that the City of Rosemead's financial statements for the fiscal year ended
June 30, 2020, are fairly presented in conformity with GAAP. LSL'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 are 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 Tem 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 Sheriffs 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. One of the largest is a contract for law
enforcement and traffic control provided by the Los Angeles County Sheriff's Department. Some
of the contracts in effect during the fiscal year were for capital improvement projects and street
maintenance. The City also has three blended component units: 1) the Rosemead Financing
Authority (the Authority); 2) the Rosemead Housing Development Corporation (RHDC) and,
3)the Rosemead Successor Agency. Additional information on all three of these legally separate
entities can be found in Note 1(a) in the notes to the financial statements. Beyond the City's
contractual arrangements for services, the City of Rosemead provides a full range of municipal
services, including recreational activities, financial activities, planning activities, and cultural
events.
ii
The annual budget serves as the foundation for the City of Rosemead and its component unit's
for 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).
Due to the COVID-19 Emergency enacted by the Governor of the State of California in March of
2020 and the President of the United States in March 2020, many public functions have been
curtailed, and normal municipal processes and activities have been significantly affected. These
changes are reflected in the CAFR as best as can be anticipated in the middle of a world-wide
pandemic.
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. However, due to the Emergency Decree approved by the City Council in March
of 2020, the City Manager was given emergency powers to allow for certain transfers and
purchase of emergency items without prior authorization by 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.
COVID-19 Worldwide Pandemic and Emergency Declarations
As mentioned earlier, both the President of the United States and the Governor of the
State of California authorized Emergency Declarations in March 2020 to deal with the COVID-19
Worldwide Pandemic. These orders included shutting down non-essential businesses, significant
stay at home orders,closing of most public facilities and the curtailment of non-essential activities.
As expected, this significantly affected the 4th quarter financial condition of all local governments
in California, including the City of Rosemead.
iii
Generally, while the City of Rosemead was able to keep all fulltime employees within FY 19-20
employed- many parttime employees were not used, since all public recreation and programs
were cancelled. The City of Rosemead did experience revenue reductions (including sales tax
and transient occupancy tax) which decreased by 8-20% within the total fiscal year revenues.
However, anticipating these reductions, the City also limited discretionary expenses during that
time. These reductions and unanticipated revenues from pooled sales tax funds from the
State of California combined to provide a net surplus of revenues over expenses as of
June 20, 2020.
Local Economy
Even with the effects of the COVID-19 Emergency, the City of Rosemead continues to remain in
satisfactory financial condition thanks to a relatively diverse and small business-oriented revenue
base including an unanticipated increase in pooled State sales tax funds, stable property tax,
decreased transient occupancy tax, and various licenses and permits. Before the COVID-19
emergency, the region had a varied retail and industrial base including two national general
merchandise stores that continued to perform well along with some new restaurants and retail
businesses. Even after the COVID-19 Emergency, many of the restaurants, certain retailers and
food suppliers were allowed to remain open as essential service industries, but many others were
forced to temporarily close.
Property tax is the City's largest tax source at $9.9 million and makes up approximately 43% of
the General Fund revenues. Total gross assessed value from the 2019/20 tax roll is $4.9 billion,
up $220 million from last year. Assessed value, to date, don't seemed to have been affected by
the COVID-19 Emergency. This is primarily due to an increase in residential properties and an
increase in median sales price for single family homes from $593,000 to $630,000. The
residential category assessed value increased approximately $158 million, which represents a
4.4% increase. The peak median price before recession in 2006 was $495,000 and the current
median price is $630,000, an increase of 6.15%. Data also show that Rosemead retains
$0.0668 for every dollar of property tax collected within the City.
Sales tax is traditionally the second largest revenue source for the General Fund, at$5.4 million
and makes up approximately 24% 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 was continuously adding new businesses
before the COVID-19 Emergency started and has plans to continue that practice once the
Emergency is over.
Hotel transient occupancy tax (TOT) revenues are the third largest source of income to the
General Fund at $1.8 million and makes up approximately 8% of the General Fund revenues.
These revenues were the hardest hit of the top revenues within the City due to the COVID-19
Emergency and are still struggling going into FY 20-21. The City anticipates these revenues to
significantly rebound once the COVID-19 Emergency is over and the local economy returns to
normalcy.
iv
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.
New management policies and practices
A compressive depreciation and Fixed Asset Policy and Procedure was approved and
implemented in FY 19-20 along with an Inventory Tag System and Process to be implemented
by the Public Works Department.
In conjunction, a significant effort was made to update the City's Fixed Asset System deleting
disposed of property and revising depreciated assets to better reflect the assets of the City.
Several other management policies were developed in FY 19-20 to be implemented in FY 20-21
including online payments for City fees and programs, implementation of a position control module
in the City's Financial System, greater use of ACH payments for City vendors and a paperless
Account Payable process for the City.
Finally, revised City Financial Policies and Procedures were approved in June of 2020 to help the
City become more efficient and effective in their financial affairs and processes.
Debt Administration
The City has no outstanding general obligation bonds as of June 30, 2020. The Successor
Agency to the Rosemead Community Development Commission includes the 2016 Tax Allocation
Bonds for$20,805,000 and 2010A Tax Allocation Bonds for$4,285,000. Additional information
on the Successor Agency's debt can be found in Note 15 in the notes to the Basic Financial
Statements. There were sufficient Property Tax Increment dollars to pay the outstanding debt
principal and interested generated by these debts.
v
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.
• Projects that are currently in progress and will be complete in FY 2020/21 include the Rosemead
Park Walking Trail, Walnut Grove Ave. Resurfacing and Colored Crosswalk Installation,
SR25 Sidewalk Gas Closure Project, Garvey Park Gym HVAC System Replacement, Crosswalk
Installation&Sidewalk Replacement Project and various Residential Street Resurfacing Projects.
Major Accomplishments
The Public Works Department completed six projects that were previously approved under the
CIP Program Budget including the High Intensity Activated Crosswalk (Mission and Ivar), Garvey
Park Restroom Renovation, Traffic Signal Improvements(Valley and Ivar), Crosswalk Installation
Phase I at Jay Imperial Park, Rosemead Park Basketball Courts, and Annual Residential
Resurfacing.The City was reimbursed for the cost of construction for the High Intensity Crosswalk
Project as it was a Federally funded grant project.
At the beginning of 2020, Garvey Earle Plaza broke ground and began construction.
Garvey Earle Plaza is a vertical mixed-use project consisting of 35 residential apartment units
and 7,520 square feet of commercial floor area. The City also approved and processed several
large projects, such as the Garvey Del Mar Plaza and Willard & Garvey Residential
Project. Garvey Del Mar Plaza is an approved mixed-use project located within the Garvey
Avenue Specific Plan Corridor. It consists of 60 residential apartments and 15,903 of commercial
floor area. During fiscal year 19-20, the City processed a development application for
Willard & Garvey Residential Project, consisting of a 31 residential townhome unit community.
The project is expected to be entitled by December 2020.
In addition to these projects, the City also amended the Accessory Dwelling Unit Ordinance to
comply with State Law and received the 2020 Local Early Action Planning(LEAP)Grants Program
Award from California Department of Housing and Community Development(HCD)for$150,000
(small localities with a population of 20,000-59,999 people). The funds from the LEAP Grant will
be utilized for the preparation of the 2021-2029 Housing Element, an update to the City's Public
Safety Element, and the incorporation of environmental justice policies throughout the General
Plan.
Future Initiatives
The City was awarded $27 million in reimbursable grants from Los Angeles County Metropolitan
Transportation Authority for four separate mobility improvement projects (710 Projects)to relieve
congestion on local streets along the SR-710 alignment between Interstate 10 and 210. Funding
Agreements for two projects were executed in July 2020. The City expects to receive the last two
Funding Agreements in FY 20-21. Funding for the 710 Projects will roll out in phases from the
Los Angeles County Metropolitan Transportation Authority for the projects.
vi
Future development includes the completion of the Garvey Garden Plaza project, which is a
mixed-use project that is currently under construction and consists of 46 residential apartment
units and 11,860 square feet of commercial floor area. The project is expected to be completed
early 2021. The construction of Garvey Earle Plaza is expected to be completed by winter
2022. The City also anticipates that Garvey Del Mar Plaza and Willard & Garvey Residential
Project will begin construction in 2021. The Planning Division also approved the Rosemead
Garden Villa, a mixed-use project located within the Garvey Avenue Specific Plan Corridor. The
project includes 144 residential units and 56,258 square feet of commercial floor area and is
expected to break ground in fiscal year 2021/2022.
In addition to these projects, the City is updating the Housing Element as mandated by State law
for the 2021-2029 planning cycle with completed certification by October 2021. Furthermore, the
City is currently working on the adoption of a Freeway Corridor Mixed Use Overlay zone. The
development of the Freeway Corridor Mixed-Use Overlay Zone will streamline both the
development approval process and California Environmental Quality Act environmental review
process by pre-entitling and analyzing environmental factors in advance based on the estimated
development potential within the planning area. Both projects area anticipated to be approved in
2021.
The City is also concentrating on its Financial Processes and Capabilities. A Financial System
Strategic Plan was developed and began implementation in FY 19-20. The plan included
expanding the capabilities of the current City Financial Accounting System, creating a"paperless"
purchase order and AP process, beginning the digital imaging of all financial documents;
developing a position control capability, implementing an on-line fee payment system and
exploration of digital cash receipts and a city-wide program card system.
GFOA Certificate of Achievement Award
The Government Finance Officers Association of the United States and Canada(GFOA)awarded
a Certificate of Achievement for Excellence in Financial Reporting to the City of Rosemead for its
CAFR for the fiscal year ended June 30, 2019.The Certificate of Achievement is a national award
recognizing conformance with the highest standards for preparation of State and Local
Government financial reports.
To be awarded a Certificate of Achievement a government must publish an easily readable and
efficiently organized CAFR. This report must satisfy GAAP, GASB and all other applicable legal
requirements. We believe the attached document ending June 30, 2020 continues to meet the
Certificate Program's requirements and we are submitting it to GFOA to determine its eligibility
for another award.
vii
Acknowledgements
The preparation and publication of this report is made possible through the dedication of
Tess Anson, Finance Manager and 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, Soil, & Lunghard, LLP for their
contributions towards improving our financial reporting.
Respectfully submitted,
Scott G Miller, PhD
Interim Finance Director/Treasurer
viii
CITY OF ROSEMEAD
CITY OFFICIALS AS OF JUNE 30, 2020
CITY COUNCIL
SANDRA ARMENTA
Mayor
POLLY LOW
Mayor Pro Tern
MARGARET CLARK SEAN DANG STEVEN LY
Council Member Council Member Council Member
ADMINISTRATION
ERICKA HERNANDEZ RACHEL H. RICHMAN
City Clerk City Attorney
EXECUTIVE TEAM
GLORIA MOLLEDA
City Manager
BENJAMIN KIM
Assistant City Manager
LT. TONY DUONG DR. SCOTT MILLER
Chief of Police Interim Finance Director
CHRISTOPHER DASTE THOMAS BOECKING
Director of Public works Director of Parks & Recreation
ANGELICA FRAUSTO-LUPO ELIZABETH POPESCU
Director of Community Development Human Resources Manager
ix
City of Rosemead, California
Function Based Organizational Chart
r City Clerk Commissions
i
_j City'Council
City
Attorney
Assistant City Manager
r City Manager
Technology�f Finance
Business Support
Human Resourc e5 Conununity
Development
___ Public Safety Public Works
Risk Management Parks R Recreation
x
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 Ended
June 30, 2019
Clued 13- 2*mi-a
Executive Director/CEO
xi
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•••••
••
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, 2020, 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
Lance,Soil&Lunghard,LLP 203 N.Brea Blvd.,Suite 203 I Brea,CA92821I Phone:714.672.0022
••••
LSL ::
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, 2020, 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 schedules for the general fund and community
development block grant 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, the
schedule of changes in net OPEB liability and related ratio 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
nonmajor 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 nonmajor 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. Such information has been subjected to the auditing
procedures applied in the audit of the basic financial statements and certain additional procedures,
including comparing and reconciling such information directly to the underlying accounting and other
records used to prepare the basic financial statements or to the basic financial statements themselves,
and other additional procedures in accordance with auditing standards generally accepted in the
United States of America. In our opinion,the combining and individual nonmajor fund financial statements
and 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
LSLU::UU
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
December 9, 2020 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.
eleeed, ..11( 5v--eVt42e, ge,/)
Brea, California
December 9, 2020
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, 2020. We encourage readers to consider the information
presented herein in conjunction with additional information that we have furnished in our letter of
transmittal and the City's financial statements.
We also want to acknowledge, the fiscal and management impact the COVID-19 Worldwide
Pandemic and the subsequent Presidential and Gubernatorial Emergency Declarations have had
on the City of Rosemead and all local governments in the State of California. Our readers should
understand that the pandemic has affected all governments differently, but all, including the
City of Rosemead, operated at the end of FY 2019/20 much differently than it did when the fiscal
year first began. The emergency's impacts continue into FY 2020/21 and quite possibly will
continue well beyond that date.
Financial Highlights
• The City's total assets and deferred outflows of resources as of June 30, 2020,were about
$94.7 million. Total liabilities and deferred inflow of resources were $14.4 million, while
the total net position was $80.3 million. The net pension liability of $8.9 million was
reported as part of total liability in the balance sheet due to the reporting requirements of
the Governmental Accounting Standards Board (GASB) Statement No. 68.
GASB Statement No. 68 also established reporting of deferred outflows and inflows of
resources related to pension. Deferred outflows and inflows of resources related to
pensions reported at June 30, 2020 of $3.4 million and $1.1 million, respectively,
represented pension contributions subsequent to measurement date, the net difference
between projected and actual earnings on plan investments, changes of assumptions, the
difference in proportion, expected and actual experience, and differences in actual and
proportionate share in contribution.
• As of June 30, 2020, all governmental funds total revenues from all sources were
$31.9 million and total expenses for all functions and programs were $27.3 million. The
City's net position increased by $4.6 million during the year.
• The City's General Fund revenues exceeded expenditures by$914 thousand.
• At the end of the current fiscal year, the unassigned fund balance for the General Fund
was $14.7 million or 67% of total General Fund expenditures. $7.1 million or 32% is set
aside to meet the City's reserve policy.
Overview of the Financial Statements
This discussion and analysis are 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.
5
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
deferred outflows of resources and liabilities and deferred inflows of resources,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 even in light of the COVID-19 Pandemic.
The statement of activities presents information showing how the City's net position changed
during the most recent fiscal year. All changes in net position are reported as soon as the
underlying event giving rise to the change occurs, regardless of the timing of related cash flows.
Thus, revenues and expenses are reported in this statement for some items that will only result
in cash flows in future fiscal periods (e.g., uncollected taxes and earned but unused vacation
leave).
Both of the government-wide financial statements distinguish functions of the City of Rosemead
that are principally supported by taxes and intergovernmental revenues (governmental activities)
from other functions that are intended to recover all or a significant portion of their costs through
user fees and charges (business-type activities). The City of Rosemead does not have any
business-type activities. The governmental activities of the City of Rosemead include general
government, public safety, public works, community development, and parks and recreation.
The government-wide financial statements include not only the City of Rosemead itself
(known as the primary government) but also two blended component units- the Rosemead
Financing Authority and the Rosemead Housing Development Corporation and one fiduciary
component unit-the Rosemead Successor Agency. The City is financially accountable for these
entities and financial information for these blended and fiduciary units are reported within the
financial information presented for the primary government itself.
The government-wide financial statements can be found on pages 19-20 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, proprietary 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.
6
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 15 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, 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.
The basic governmental fund financial statements can be found on pages 21-24 of this report.
Proprietary Funds. The City uses internal service funds to account for vehicle operation and
maintenance, information services, and capital equipment. Proprietary funds provide the same
type of information as the government-wide financial statements, only in more detail. The internal
service funds are combined into a single, aggregated presentation in the proprietary fund financial
statements. Individual fund data for the internal service funds is provided in the form of combining
statements in the supplementary information section of this report.
The basic proprietary fund financial statements can be found on pages 25-27 of this report.
Fiduciary funds. Fiduciary funds are used to account for resources held for the benefit of parties
outside the government. Fiduciary funds are not reflected in the government-wide financial
statement because the resources of those funds are not available to support the
City of Rosemead's own programs. The accounting used for fiduciary funds is much like that
used for proprietary funds.
The basic fiduciary fund financial statements can be found on pages 28-29 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 31-65 of this report.
7
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 69-77 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 78-103 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
$80.3 million as of June 30, 2020. It increased by $2.2 million during the fiscal year. Assets
increase by $3.2 million due to an increase in cash, investments, and fixed assets. Liabilities
slightly increased by $177 thousand. Assets and deferred outflows of resources exceeded
liabilities and deferred inflows of resources by$80.3 million as of June 30, 2020.
A significant portion of the City of Rosemead's net position at June 30, 2020, $48.8 million 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.
8
City of Rosemead's Net Position
As of June 30, 2020 and 2019
(thousands)
Govern menta 1, Activities
2020 2019; r
Current and other assets 42,489 37,251
Capital assets 48,826 50,883
Total assets 91,315 88,134
Deferred outflows of resources 3,403 3,583
Long-term liabilities outstanding 9,515 9,680
Other liabilities 3,295 2,952
Total liabilities 12,810 12,632
Deferred inflows of resources 1,647 989
Net position:
Net Investment in Capital Assets 48,826 50,883
Restricted 13,681 9,730
Unrestricted 17,754 17,483
Total net position $ 80,261 $ 78,096
An additional portion of the City of Rosemead's net position ($13.68 million) represents resources
that are subject to external restrictions on how they may be used. The remaining balance of
unrestricted net position ($17.7 million) may be used to meet the government's ongoing
obligations to citizens and creditors.
At the end of the current fiscal year, the City of Rosemead is able to report positive net position
balances. The situation also held true for the prior fiscal year.
9
City of Rosemead's Changes in Net Position
Years Ended June 30, 2020 and 2019
(thousands)
Governmental`
Activities
2020 2019
Program revenues:
Charges for services $ 6,792 $ 7,897
Operating grants and contributions 4,536 4,122
Capital grants and contributions 1,218 1,218
General revenues:
Property taxes 9,942 9,567
Other taxes 8,602 9,380
Investment income 905 1,158
Other 257 124
Total revenues 32,252 33,466
Expenses:
General government 4,004 4,205
Public safety 9,744 9,126
Public works 9,947 7,662
Community development 3,472 6,353
Parks and recreation 2,920 2,377
Total expenses 30,087 29,723
Change in net position 2,165 3,743
Net position-June 30, 2019 78,096 74,353
Net position-June 30, 2020 $ 80,261 $ 78,096
Governmental activities. The City of Rosemead's net position increased by approximately
$2.2 million over the previous fiscal year. General Revenue and program revenue exceeded
expenses by this same amount. Expenses increased in Public Safety due to an increase in the
Los Angeles County's Sheriff Law Enforcement contract and movement of Code Enforcement
Staff from the Community Development Department to the Public Safety Department. Public
Works expenses increased due to a reclassification of governmental depreciation from the
Community Development Department to the Public Works Department correcting a previous fiscal
year entry. General Government remained fairly stable with Parks and Recreation expenses
increasing due to an increase in programs, certain facility maintenance expenses, and the
increase in minimum wage benefits for part-time staff members.
10
Community Development Dept expenses decreased due to the reclassification issue as
mentioned earlier, changes in staffing levels outlined earlier, and decrease in programmatic
activities due to the COVID-19 pandemic. As noted earlier, the City uses fund accounting to
ensure and demonstrate compliance with finance-related legal requirements.
Revenues by Source
Governmental Activities
investment income
5% Other revenue
2%
Franchise taxes
7%
Transient occupancy
taxes
9% Property taxes
50%
Sales and use taxes
27%
Expenses and Program Revenues
Governmental Activities
12,000,000
10,000,000
8,000,000
6,000,000
4,000,000
2,000,000 —I —IVat Expenses
Revenues
51) 44
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11
Financial Analysis of the Government's Funds
Governmental 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.
The City implemented GASB Statement No. 54 in FY 2010/11. It substantially altered the
categories and terminology used to describe "fund balance." The new categories are as follows:
• Non-spendable fund balance (inherently non-spendable)
• Restricted fund balance (externally enforceable limitations on use)
• Committed fund balance (self-imposed limitations on use)
• Assigned fund balance (limitation resulting from intended use)
• Unassigned fund balance (residual net resources)
As of the end of the current fiscal year, the City of Rosemead's governmental funds reported
combined fund balances of $37.6 million. Approximately $14.4 million constitutes unassigned,
undesignated fund balance, which is available for spending at the government's discretion. The
remainder of the fund balance is segregated into nonspendable fund balance, restricted fund
balance, committed fund balance or assigned fund balance to indicate that it is not available for
new spending because it has already been committed for other purposes.
General Fund. The General Fund is the chief operating fund of the City of Rosemead. At the end
of the current fiscal year,the unassigned fund balance of the general fund was$14.7 million,while
the total fund balance reached $24.2 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 67% of total General Fund expenditures,
while total fund balance represents 110% of that same amount.
The fund balance of the City of Rosemead's General Fund increased by $914 thousand during
the current year. Highlights of the change in fund balance are presented below:
• Total General Fund (GF) revenues of approximately $22.96 million exceeded
expenditures of approximately $22.04 million even with the negative impact of the
COVID-19 pandemic due to limiting expenditures over the last 4 months of the fiscal year
causing the fund balance to increase $914 thousand as of June 30, 2020. GF revenues
had decreased compared to the prior year's actual and compared to the approved
amounts in the FY 2019-20 Budget. Property tax revenues increased slightly as did
miscellaneous revenues with Sales Tax, Transient Occupancy Tax, Fees and Permits,
and interest revenues not meeting budgeted amounts for FY 2019/20.
12
• As mentioned earlier, total General Fund revenues decreased by $1.78 million in
FY 2019/20 over the prior fiscal year mainly due to the COVID-19 pandemic widespread
economic shutdown that occurred in March 2020. The pandemic required closure of all
Parks and Recreation programs per Los Angeles County Health Officials, causing revenue
decreases in spring and summer; the closing of City Hall combined with the general
COVID-19 pandemic shut-down caused a decrease in building activities; transient
occupancy tax, sales tax and the discontinuation of certain grants.
• General Fund expenditures increased by $119 thousand over the prior year due to
preparations for the COVID-19 Emergency and inflationary increases in salary, benefit,
and administration costs.
• Public safety expenditures are one of the City's largest areas of expenditures. Los Angeles
County's Sheriffs Department contract increased by 5% over the previous year and the
Liability Trust Fund increased by .5% as well. The City also continued 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. This program was discontinued after
March when schools were ordered to close after the COVID-19 Emergency Declaration.
General Costs continued to decrease as well in the Public Safety Admin division because
the City had a continuous turnover of part-time Community Services Officers during the
year.
• Parks and Recreation expenditures increased by $329 thousand primarily due to
increased Community Events during the first 6 months of the year, certain maintenance
efforts within facilities, and the wage increases of full-time and part-time employees for the
Aquatics and General Recreation divisions. Also, the City continued to pay for part-time
employees for their regular compensation from March 23 to May 18, 2020, without any
impact on the employees' leave balances during the COVID-19 Emergency.
• Offset by lower expenditures in General Government and Capital outlay expenditures.
Most Capital projects were anticipated to be completed in FY 2020/21. In addition, several
amended and new capital projects were approved during the budget process for
FY 2020/21 budget.
• 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. However, the City anticipates a material reduction in CaIPERS
for FY 2020/21 due to actuarial assumption rates for this year and the retirements of some
senior staff who will be replaced by Second Tier or PEPRA employees.
13
General Fund Budget Analysis. The City's General Fund collected revenues of $2.09 million in
comparison to the budgeted estimates or 4.3% less than the previously approved budgeted
amounts. Property taxes increased$342 thousand due to an increase in tax assessment values.
Licenses and permits decreased by$449 thousand due to the COVID-19 shutdown and building
environment. Interest revenues increased by $358 thousand due to a change in investment
strategies and upgrades in certain investment instruments. Intergovernmental revenues
decreased by $974 thousand due to certain capital projects that 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 had an actual variance of$2.32 million which was due to
the City completing less overall CIP projects than budgeted, efforts on behalf of City staff to limit
expenditures due to the COVID-19 Emergency and as a result of the Parks and Recreation
Department's cancellation of Spring and Summer programs and activities.
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.
14
Capital Asset and Debt Administration
Capital assets. The City of Rosemead's investment in capital assets for its governmental
activities as of June 30, 2020, amounts to $48.8 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.
The Public Works Department major capital asset events completed six projects that were
previously approved under the CIP Program Budget including the High-Intensity Activated
Crosswalk (Mission and Ivar), Garvey Park Restroom Renovation, Traffic Signal Improvements
(Valley and Ivar), Crosswalk Installation Phase I at Jay Imperial Park, Rosemead Park Basketball
Courts, City Hall Basement Remodel Project, and Annual Residential Resurfacing. The City was
reimbursed for the cost of construction for the High-Intensity Crosswalk Project as it was a
Federally funded grant project.
At the beginning of 2020, Garvey Earle Plaza broke ground and began construction. Garvey
Earle Plaza is a vertical mixed-use project consisting of 35 residential apartment units and 7,520
square feet of commercial floor area. The City also approved and processed several large
projects, such as the Garvey Del Mar Plaza and Willard & Garvey Residential Project. Garvey
Del Mar Plaza is an approved mixed-use project located within the Garvey Avenue Specific Plan
Corridor. It consists of 60 residential apartments and 15,903 of commercial floor area. During
fiscal year 2019-20, the City processed a development application for the Willard & Garvey
Residential Project, consisting of a 31 residential townhome unit community. The project is
expected to be entitled by December 2020.
City of Rosemead's Capital Assets
(net of depreciation)
(thousands)
-,Governmental;Activities
2020 2019
Land $ 4,417 $ 4,417
Buildings 13,542 14,003
Improvements other than
Buildings 3,464 3,673
Machinery and equipment 108 129
Autos and trucks 51 186
Furniture and office equipment 46 101
Infrastructure 26,441 28,096
Construction in progress 757 278
Total $ 48,826 r$ 50,883
Additional information on the City of Rosemead's capital assets can be found in note No. 7, found
on pages 44-45 of the Basic Financial Statements.
15
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$25,090,000. 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
2020 2019 1
Tax Allocation Bonds $ 25,090 $ 27,295
• 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. 15 on pages 63-65 of
the Basic Financial Statements.
Economic Factors and Next Year's Budgets and Rates
• As discussed throughout this Management's Discussion and Analysis report, the
COVID-19 Emergency has had a material effect on General Fund revenue in FY 2019/20
compared to what was budgeted for the fiscal year. Property tax revenues have shown
modest increases and were stable in the fiscal year and are projected to continue with a
steady growth pattern in FY 2020/21. Sales taxes are expected to continue to be
depressed due to the COVID-19 pandemic but will be off-set by the larger than expected
states' sales tax pool funds received by the City due to internet sales.
While an increase due to new restaurants and stores addition to the community was
anticipated, it largely depends on how the COVID-19 restrictions affect the local
government economy and business environment. License and permit revenues are
expected to remain stable. Additionally, TOT revenues are expected to continue to be
depressed, again until the COVID-19 pandemic's effects on the lodging industry are better
defined. The City still sees a near-future increase in future projects with the Hampton Inn
& Suites and Marriot hotel.
• The local economy is projected to be relatively flat as the COVID-19 Pandemic continues
to affect the economy and City revenues. Expense increases were kept to a minimum with
slight increases in mandatory expenses due to required minimum wage increases, third
party contract increases and capital project expenses. All of these changes are reflected
in the City's FY 2020/21 budget. At the time of budget preparation and its adoption in
June 2020, General Fund Revenues are projected to stay stagnant and may need a
transfer of fund balance to end the fiscal year with a balanced budget. A more accurate
analysis and projection will occur at the Mid-Year Budget Council Meeting in
February 2021.
16
• The City adopted the General Fund FY 2020/21 budget with a projected$19.5 million fund
balance reserve. With the FY 2019/20 actual revenue surplus, the total projected fund
balance for the General Fund was revised to approximately$24.2 million. The Operating
Budget for FY 2020/21 is a balanced budget with estimated reductions of $414,000
ordered by the City Council. 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:
Interim Finance Director
8838 East Valley Boulevard
Rosemead, CA 91770.
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18
CITY OF ROSEMEAD,CALIFORNIA
STATEMENT OF NET POSITION
JUNE 30,2020
Governmental
Activities
Assets:
Cash and investments $ 38,405,520
Receivables:
Accounts 2,483,195
Notes and loans 320,360
Accrued interest 115,115
Prepaid costs 415,063
Due from other governments 226,012
Inventories 2,034
Capital assets,not being depreciated 5,174,346
Capital assets,net of depreciation 43,651,517
Net pension asset 521,964
Total Assets 91,315,126
Deferred Outflows of Resources:
Deferred outflows related to pensions 3,357,344
Deferred outflows related to other post employment benefits 45,227
Total Deferred Outflows of Resources 3,402,571
Liabilities:
Accounts payable 2,582,196
Accrued liabilities 353,771
Retentions payable 21,400
Deposits payable 42,915
Compensated absences,due within one year 295,043
Noncurrent liabilities:
Compensated absences,due in more than one year 355,523
Net pension liability,due in more than one year 8,856,781
Net other post employment benefits liability,due in more than one year 301,500
Total Liabilities 12,809,129
Deferred Inflows of Resources:
Deferred inflows related to pensions 1,106,823
Deferred inflows related to other post employment benefits 540,271
Total Deferred Inflows of Resources 1,647,094
Net Position:
Investment in capital assets 48,825,863
Restricted:
Community services 401,851
Low and moderate income housing 354,871
Public works 12,924,360
Unrestricted 17,754,529
Total Net Position $ 80,261,474
The notes to financial statements are an integral part of this statement.
19
CITY OF ROSEMEAD,CALIFORNIA
STATEMENT OF ACTIVITIES
FOR THE YEAR ENDED JUNE 30,2020
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 $ 4,003,674 $ 274,450 $ 189,980 $ - $ (3,539,244)
Public safety 9,744,134 686,871 - 1,147,846 (7,909,417)
Community development 3,472,477 2,459,528 1,030,947 - 17,998
Parks and recreation 2,920,016 624,313 - - (2,295,703)
Public works 9,946,662 2,746,472 3,315,532 69,738 (3,814,920)
Total Governmental Activities $ 30,086,963 $ 6,791,634 $ 4,536,459 $ 1,217,584 (17,541,286)
General Revenues:
Taxes:
Property taxes,levied for general purpose 9,942,183
Sales taxes 5,430,222
Transient occupancy taxes 1,785,219
Franchise taxes 1,312,547
Other taxes 74,060
Use of money and property 905,039
Other 257,314
Total General Revenues 19,706,584
Change in Net Position 2,165,298
Net Position at the Beginning of the Year, 78,096,176
Net Position at the End of the Year $ 80,261,474
The notes to financial statements are an integral part of this statement.
20
CITY OF ROSEMEAD,CALIFORNIA
BALANCE SHEET
GOVERNMENTAL FUNDS
JUNE 30,2020
Special
Revenue
Funds
Community Other Total
Development Governmental Governmental
General Block Grant Funds Funds
Assets:
Cash and investments $ 24,029,462 $ - $ 13,704,036 $ 37,733,498
Receivables:
Accounts 1,627,024 359,202 496,969 2,483,195
Notes and loans 320,360 - - 320,360
Accrued interest 115,115 - - 115,115
Prepaid costs 415,063 - - 415,063
Due from other governments 226,012 - - 226,012
Due from other funds 301,943 - - 301,943
Inventories 2,034 - - 2,034
Total Assets $ 27,037,013 $ 359,202 $ 14,201,005 $ 41,597,220
Liabilities,Deferred Inflows of Resources,
and Fund Balances:
Liabilities:
Accounts payable $ 2,222,769 $ 87,323 $ 266,063 $ 2,576,155
Accrued liabilities 312,634 6,097 35,040 353,771
Deposits payable 484 - 42,431 . 42,915
Due to other funds - 259,488 42,455 301,943
Retentions payable 525 18,190 2,685 21,400
Total Liabilities 2,536,412 371,098 388,674 3,296,184
Deferred Inflows of Resources:
Unavailable revenues 292,120 194,915 193,998 681,033
Total Deferred Inflows of Resources 292,120 194,915 193,998 681,033
Fund Balances:
Nonspendable:
Notes and loans 93,274 - 93,274
Prepaid costs 415,063 - - 415,063
Inventories 2,034 - - 2,034
Restricted:
Community services - - 401,851 401,851
Low and moderate income housing - - 354,871 354,871
Public works - - 12,924,360 12,924,360
Committed:
Capital projects 1,780,033 - - 1,780,033
Reserve contingency 7,116,284 - - 7,116,284
Assigned:
Building maintenance 71,617 - - 71,617
Tree in lieu 50,250 - - 50,250
Unassigned 14,679,926 (206,811) (62,749) 14,410,366
Total Fund Balances 24,208,481 (206,811) 13,618,333 37,620,003
Total Liabilities,Deferred Inflows of
Resources,and Fund Balances $ 27,037,013 $ 359,202. $ 14,201,005 $ 41,597,220
The notes to financial statements are an integral part of this statement.
21
CITY OF ROSEMEAD,CALIFORNIA
RECONCILIATION OF THE BALANCE SHEET OF GOVERNMENTAL FUNDS
TO THE STATEMENT OF NET POSITION
JUNE 30,2020
Amounts reported for governmental activities in the statement of net position are different because:
Total fund balances-governmental funds $ 37,620,003
Capital assets used in governmental activities are not financial resources and,
therefore,are not reported in the funds. 48,805,119
Compensated absences are not due and payable in the current period,and
therefore,are not reported in the funds. (650,566)
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 $ (8,856,781)
PARS Retirement Enhancement Plan net pension asset 521,964 (8,334,817)
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 1,446,875
Changes in assumptions 441,761
Difference between expected and actual experiences 625,538
Net difference between projected and actual earnings on plan investments 87,805
Adjustments due to differences in proportions 75,237
Difference in proportionate share 680,128 3,357,344
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 45,227 45,227
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 (149,713)
Difference between expected and actual experiences (187,669)
Net difference between projected and actual earnings on plan investments (154,844)
Adjustments due to differences in proportions (614,597) (1,106,823)
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. (301,500)
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 (540,271)
Revenues reported as unavailable revenue in the governmental funds are recognized
in the statement of activities. 681,033
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. 686,725
Net Position of Governmental Activities $ 80,261,474
The notes to financial statements are an integral part of this statement.
22
CITY OF ROSEMEAD,CALIFORNIA
STATEMENT OF REVENUES,
EXPENDITURES AND CHANGES IN FUND BALANCES
GOVERNMENTAL FUNDS
FOR THE YEAR ENDED JUNE 30,2020
Special
Revenue
Funds
Community Other Total
Development Governmental Governmental
General Block Grant Funds Funds
Revenues:
Taxes $ 18,503,951 $ - $ - $ 18,503,951
Licenses and permits 2,115,419 - - 2,115,419
Intergovernmental 165,754 561,239 7,452,062 8,179,055
Charges for services 695,486 8,392 500,760 1,204,638
Use of money and property 657,382 - 247,657 905,039
Fines and forfeitures 612,080 - - 612,080
Contributions 2,733 - - 2,733
Developer participation - - 150,728 150,728
Miscellaneous 202,683 - 66,099 268,782
Total Revenues 22,955,488 569,631 8,417,306 31,942,425
Expenditures:
Current:
General government 3,531,048 44,548 192,966 3,768,562
Public safety 9,539,004 - 38,863 9,577,867
Community development 2,054,123 269,777 1,028,432 3,352,332
Parks and recreation 2,609,393 20,284 74,180 2,703,857
Public works 4,227,984 25,636 2,778,989 7,032,609
Capital outlay 80,409 392,405 415,745 888,559
Total Expenditures 22,041,961 752,650 4,529,175 27,323,786
Net Change in Fund Balances 913,527 (183,019) 3,888,131 4,618,639
Fund Balances at the Beginning of the Year 23,294,954 (23,792) 9,730,202 33,001,364
Fund Balances at the End of the Year $ 24,208,481 $ (206,811) $ 13,618,333 $ 37,620,003
The notes to financial statements are an integral part of this statement.
23
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 30,2020
Amounts reported for governmental activities in the statement of activities are different because:
Net change in fund balances-total governmental funds $ 4,618,639
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 bywhich
capital outlays exceeded depreciation expense in the current period.
Capital outlay $ 865,741
Depreciation (2,876,319) (2,010,578)
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. (69,924)
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. (497,976)
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. (71,516)
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. 309,836
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. (113,183)
Change in Net Position of Governmental Activities $ 2,165,298
The notes to financial statements are an integral part of this statement.
24
CITY OF ROSEMEAD,CALIFORNIA
STATEMENT OF NET POSITION
PROPRIETARY FUNDS
JUNE 30,2020
Governmental
Activities
Internal
Service Funds
Assets:
Current Assets:
Cash and investments $ 672,022
Total Current Assets 672,022
Noncurrent Assets:
Capital assets, net of accumulated depreciation 20,744
Total Noncurrent Assets 20,744
Total Assets 692,766
Liabilities:
Current Assets:
Accounts payable 6,041
Total Current Liabilities 6,041
Total Liabilities 6,041
Net Position:
Investment in capital assets 20,744
Unrestricted 665,981
Total Net Position $ 686,725
The notes to financial statements are an integral part of this statement.
25
CITY OF ROSEMEAD,CALIFORNIA
STATEMENT OF REVENUES, EXPENSES
AND CHANGES IN FUND NET POSITION
PROPRIETARY FUNDS
FOR THE YEAR ENDED JUNE 30,2020
Governmental
Activities
Internal
Service Funds
Operating Revenues:
Charges for services $ 164,500
Total Operating Revenues 164,500
Operating Expenses:
Contractual services 225,825
Depreciation expense 51,858
Total Operating Expenses 277,683
Operating Income (113,183)
Net Position at the Beginning of the Year 799,908
Net Position at the End of the Year $ 686,725
The notes to financial statements are an integral part of this statement.
26
CITY OF ROSEMEAD,CALIFORNIA
STATEMENT OF CASH FLOWS
PROPRIETARY FUNDS
FOR THE YEAR ENDED JUNE 30,2020
Governmental
Activities
Internal
Service Funds
Cash Flows from Operating Activities:
Cash received from interfund service provided $ 164,500
Cash paid to suppliers for goods and services (219,784)
Net Cash Provided by Operating Activities (55,284)
Cash Flows from Capital
and Related Financing Activities:
Acquisition and construction of capital assets (5,747)
Net Cash Used for Capital
and Related Financing Activities (5,747)
Net Increase in Cash and Cash Equivalents (61,031)
Cash and Cash Equivalents at the Beginning of the Year 733,053
Cash and Cash Equivalents at the End of the Year $ 672,022
Reconciliation of Operating Income to Net Cash
Provided by Operating Activities:
Operating income $ (113,183)
Adjustments to reconcile operating income
net cash provided by operating activities:
Depreciation 51,858
Increase in accounts payable 6,041
Total Adjustments 57,899
Net Cash Provided by Operating Activities $ (55,284)
The notes to financial statements are an integral part of this statement.
27
CITY OF ROSEMEAD,CALIFORNIA
STATEMENT OF FIDUCIARY NET POSITION
FIDUCIARY FUNDS
JUNE 30,2020
Private-Purpose
Trust Fund
Agency Successor
Funds Agency
Assets:
Cash and investments $ 1,231,249 $ 5,236,373
Notes and loans receivable - 201,314
Prepaid costs - 139,976
Restricted cash and investments with fiscal agents - 1,134,248
Total Assets $ 1,231,249 6,711,911
Deferred Outflows of Resources:
Deferred charge on refunding 161,217
Total Deferred Outflows of Resources 161,217
Liabilities:
Accrued liabilities $ - 394
Accrued interest - 263,030
Deposits payable 1,231,249 -
Long-term liabilities:
Bonds payable,due within one year - 2,387,014
Bonds payable,due in more than one year - 24,043,276
Total Liabilities $ 1,231,249 26,693,714
Net Position:
Held in trust for the dissolution
of the former Redevelopment Agency (19,820,586)
Total Net Position $ (19,820,586)
The notes to financial statements are an integral part of this statement.
28
CITY OF ROSEMEAD,CALIFORNIA
STATEMENT OF CHANGES IN FIDUCIARY NET POSITION
FIDUCIARY FUNDS
FOR THE YEAR ENDED JUNE 30,2020
Private-Purpose
Trust Fund
Successor
Agency
Additions:
Taxes $ 3,634,143
Interest and change in fair value of investments 29,858
Total Additions 3,664,001
Deductions:
Administrative expenses 100,062
Interest expense 1,143,966
Contributions to other governments 453,238
Total Deductions 1,697,266
Change in Net Position 1,966,735
Net Position at the Beginning of the Year
(21,787,321)
Net Position at the End of the Year $ (19,820,586)
The notes to financial statements are an integral part of this statement.
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30
CITY OF ROSEMEAD, CALIFORNIA
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2020
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.
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CITY OF ROSEMEAD, CALIFORNIA
NOTES TO FINANCIAL STATEMENTS(CONTINUED)
JUNE 30,2020
Note 1: Summary of Significant Accounting Policies(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.
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CITY OF ROSEMEAD, CALIFORNIA
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
JUNE 30,2020
Note 1: Summary of Significant Accounting Policies (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 governments 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.
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CITY OF ROSEMEAD, CALIFORNIA
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
JUNE 30,2020
Note 1: Summary of Significant Accounting Policies (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.
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CITY OF ROSEMEAD, CALIFORNIA
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
JUNE 30,2020
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.
• CBBG Fund — The fund is used to account for monies received from the
U.S. Department of Housing and Urban Development(HUD)for administering the
CDBG Program.
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 of 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.
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CITY OF ROSEMEAD, CALIFORNIA
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
JUNE 30,2020
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 15-50 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.
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CITY OF ROSEMEAD, CALIFORNIA
NOTES TO FINANCIAL STATEMENTS(CONTINUED)
JUNE 30,2020
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 60 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.
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CITY OF ROSEMEAD, CALIFORNIA
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
JUNE 30,2020
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 30,2018
Measurement Date(MD) June 30,2019
Measurement Period(MP) July 1,2018 to June 30,2019
PARS-Single Employer Agent Plan:
Valuation Date(VD) June 30,2018
Measurement Date(MD) June 30,2020
Measurement Period(MP) July 1,2019 to June 30,2020
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) June 30,2019
Measurement Date(MD) June 30,2019
Measurement Period (MP) July 1,2018 to June 30,2019
38
CITY OF ROSEMEAD, CALIFORNIA
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
JUNE 30,2020
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 30,2019)
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.
39
CITY OF ROSEMEAD, CALIFORNIA
NOTES TO FINANCIAL STATEMENTS(CONTINUED)
JUNE 30,2020
II. STEWARDSHIP, COMPLIANCE,AND ACCOUNTABILITY
Note 2: Stewardship, Compliance,and Accountability
a. Deficit Fund Balances/Net Position
The Community Development Block Grant(CDBG)major special revenue fund reported a
deficit in fund balance in the amount of$206,811 as of June 30, 2020. The fund deficit
balance is due to the timing of grant reimbursement from the grantor agency.
b. Budgetary
Budgets were legally adopted for all governmental funds with the exception of the City
Grants Special Revenue Fund.
III. DETAILED NOTES ON ALL FUNDS
Note 3: Cash and Investments
Cash and investments as of June 30, 2020, are classified in the accompanying financial
statements as follows:
Statement of Net Position
Cash and Investments $ 38,405,520
Statement of Fiduciary Net Position
Cash and Investments 6,467,622
Restricted Cash and Investment with Fiscal Agents 1,134,248
Total Cash and Investment $ 46,007,390
Cash and Investments as of June 30, 2020, consist of the following:
Deposits with financial institutions $ 15,656,856
Investments 30,350,534
Total Cash and Investments $ 46,007,390
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.
40
CITY OF ROSEMEAD, CALIFORNIA
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
JUNE 30,2020
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 $ 18,789,868 $ - $ - $ 18,789,868
Certifices of Deposit 1,488,591 769,852 3,363,212 5,621,655
U.S. agency securities 1,007,005 - 1,247,696 2,254,701
Money Market Mutual Funds 528,286 - - 528,286
Medium-term notes 449,104 258,423 1,314,249 2,021,776
Held by bond trustee
Money Market Mutual Funds 1,134,248 - - 1,134,248
Total $ 23,397,102 $ 1,028,275 $ 5,925,157 $ 30,350,534
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.
41
CITY OF ROSEMEAD, CALIFORNIA
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
JUNE 30,2020
Note 3: Cash and Investments(Continued)
Ratings at End of Year
Minimum
Legal
Investment Type Totals Rating N/A A- A A+ AA+
State In estment Pool $ 18,789,868 N/A $ 18,789,868 $ - $ - $ - $
Certificates of Deposit 5,621,655 N/A 5,621,655 - - -
U.S.Agency Securities 2,254,701 N/A - - - - 2,254,701
Medium-Term Notes 2,021,776 A - 1,060,531 702,822 258,423
Money Market Mutual Funds 528,286 Multiple 528,286 - - -
Held by Bond Trustee:
Money Market Mutual Funds 1,134,248 Multiple 1,134,248 - - -
Total $ 30,350,534 $26,074,057 $1,060,531 $ 702,822 $258,423 $2,254,701
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
As of June 30,2020 the City did not have any investments in one issuer greater than 5%.
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, 2020, the City had deposits with financial
institutions in excess of federal depository insurance limits by$9,715,064 that were held in
collateralized accounts. As of June 30, 2020, the Successor Agency had deposits with
financial institutions in excess of federal depository insurance limits by $4,745,549 that
were held in collateralized accounts.
42
CITY OF ROSEMEAD, CALIFORNIA
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
JUNE 30,2020
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 30,2020,with the exception of LAIF and Money Market Funds,which are considered
uncategorized, all of the City's investments are valued using Level 2 inputs.
Note 4: Loans receivable
Loans receivable consisted of the following at June 30, 2020:
Balance Balance
Govemmental Activities: June 30, 2019 Additions Deletions June 30, 2020
Computer Loans $ 5,025 $ - $ 2,967 $ 2,058
San Gabriel Valley Water Co. Loan Phase I 65,840 - 8,230 57,610
San Gabriel Valley Water Co. Loan Phase II 32,921 - 4,115 28,806
Rio Hondo Community Dewlopment Co. Loan 227,086 - - 227,086
El Monte Cemetary Association Loan 6,000 - 1,200 4,800
Total $ 336,872 $ - $ 16,512 $ 320,360
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.
43
CITY OF ROSEMEAD, CALIFORNIA
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
JUNE 30,2020
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, 2020, consisted of$301,943 due to
the General Fund from the Community Development Block Grant for$259,488 and Nonmajor
Governmental Funds for$42,455 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, 2020:
Balance CIP Balance
Governmental Activities: June 30,2019 Transfers Additions Deletions June 30,2020
Capital assets not being depreciated:
Land $ 4,417,104 $ - $ - $ - $ 4,417,104
Construction in progress 277,554 (273,711) 753,399 - 757,242
Total capital assets not
being depreciated 4,694,658 (273,711) 753,399 - 5,174,346
Depreciable capital assets:
Buildings 24,086,271 - 22,643 - 24,108,914
Improvements other than buildings 5,372,034 - 89,699 - 5,461,733
Machinery and equipment 708,992 - 5,747 237,592 477,147
Autos and trucks 1,763,173 - - 327,268 1,435,905
Fumiture and office equipment 1,504,829 - - 740,404 764,425
Infrastructure 68,614,592 273,711 - - 68,888,303
Total capital assets
being depreciated 102,049,891 273,711 118,089 1,305,264 101,136,427
Less:accumulated depreciation for.
Buildings (10,083,447) - (483,904) - (10,567,351)
Improvements other than buildings (1,698,589) - (299,356) - (1,997,945)
Machinery and equipment (580,315) - (26,754) (237,592) (369,477)
Autos and trucks (1,577,153) - (135,171) (327,268) (1,385,056)
Fumiture and office equipment (1,404,083) - (54,296) (740,404) (717,975)
Infrastructure (40,518,410) - (1,928,696) - (42,447,106)
Total accumulated depreciation (55,861,997) - (2,928,177) (1,305,264) (57,484,910)
Total capital assets,
being depreciated,net 46,187,894 273,711 (2,810,088) - 43,651,517
Govemment activities
capital assets, net $ 50,882,552 $ - $ (2,056,689) $ - $ 48,825,863
44
CITY OF ROSEMEAD, CALIFORNIA
NOTES TO FINANCIAL STATEMENTS(CONTINUED)
JUNE 30,2020
Note 7: Capital Assets (Continued)
Depreciation expense was charged to functions/programs of the primary government as
follows:
Govemmental Activities Total
General Government $ 16,585
Public Safety 14,686
Public Works 2,677,995
Community development 14,353
Parks and recreation 152,700
Internal Service Funds 51,858
Totals $ 2,928,177
Note 8: Compensated Absences
Compensated absences activities for the year ended June 30, 2020, is as follows:
Beginning Due in
Balance Additions Deletions Ending Balance One Year
$
580,642 $ 333,255 $ 263,331 $ 650,566 $ 295,043
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 of Self-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 118 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.
45
CITY OF ROSEMEAD, CALIFORNIA
NOTES TO FINANCIAL STATEMENTS(CONTINUED)
JUNE 30,2020
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 alllayers 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://ci pia.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 for each member,which establishes the weight applied to payroll
and the weight applied to losses within the formula.(2)The first layer of losses includes
incurred costs up to$50,000 for each occurrence and is evaluated as a percentage of
the pool's total incurred costs within the first layer. (3) The second layer of losses
includes incurred costs from$50,000 to$100,000 for each occurrence and is evaluated
as a percentage of the pool's total incurred costs within the second layer. (4) Incurred
costs from $100,000 to statutory limits are distributed based on the outcome of cost
allocation within the first and second loss layers.
For 2019-20 the Authority's pooled retention is $1 million per occurrence, with
reinsurance to statutory limits under California Workers' Compensation Law.
Employer's Liability losses are pooled among members to$1 million. Coverage from
$1 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.
46
CITY OF ROSEMEAD, CALIFORNIA
NOTES TO FINANCIAL STATEMENTS(CONTINUED)
JUNE 30,2020
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
$76,032,770.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 2019-20.
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 $ 8,856,781 $ - $ 8,856,781
Net Pension Asset - 521,964 521,964
Deferred Outflows of Resources 3,239,713 117,631 3,357,344
Deferred Inflows of Resources 966,815 140,008 1,106,823
Pension Expense 2,060,525 (3,025) 2,057,500
47
CITY OF ROSEMEAD, CALIFORNIA
NOTES TO FINANCIAL STATEMENTS(CONTINUED)
JUNE 30,2020
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 plal8n 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, 2020, 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% 6.25%
contribution rates
Required employer 54.07% 10.27% 7.43%
contribution rates
48
CITY OF ROSEMEAD, CALIFORNIA
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
JUNE 30,2020
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, 2020 the contributions recognized as a reduction to the net
pension liability was$1,389,145.
Pension Liability, Pension Expense and Deferred Outflows/Inflows of Resources
At June 30,2020,the City of Rosemead reported a net pension liability for its proportionate
share of the net pension liability in the amount of$8,856,781.
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, 2019 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, 2018 rolled forward to June 30, 2019 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 30,2018 and 2019 was as follows:
Miscellaneous
Proportion -June 30, 2018 0.09186%
Proportion -June 30, 2019 0.08643%
Change- Increase(Decrease) -0.00542%
For the year ended June 30, 2020, the City of Rosemead recognized pension expense of
$2,060,525. At June 30, 2020, 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 $ 1,446,875 $ -
Changes in assumptions 422,332 149,713
Difference between expected and actual experiences 615,141 47,661
Net differences between projected and actual earnings
on plan investments - 154,844
Change in employer's proportion and differences between
the employer's contributions and the employer's
proportionate share of contributions 680,128 -
Adjustment due to differences in proportions 75,237 614,597
Total $ 3,239,713 $ 966,815
49
CITY OF ROSEMEAD, CALIFORNIA
NOTES TO FINANCIAL STATEMENTS(CONTINUED)
JUNE 30, 2020
Note 10: Defined Benefit Pension Plans(Continued)
The $1,446,875 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
2020 $ 832,213
2021 (75,380)
2022 37,900
2023 31,290
Total $ 826,023
Actuarial Assumptions and Methods
For the measurement period ended June 30, 2019 (the measurement date), the total
pension liability was determined by rolling forward the June 30,2018,total pension liability.
The June 30, 2018 and the June 30, 2019, 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.
(1) The mortality table used was developed based on CaIPERS' specific data. The table includes
15 years of mortality improvements 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.
50
CITY OF ROSEMEAD, CALIFORNIA
NOTES TO FINANCIAL STATEMENTS(CONTINUED)
JUNE 30,2020
Note 10: Defined Benefit Pension Plans(Continued)
Change of Assumptions
For the measurement date June 30, 2019, 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 liability 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 equal
to the single equivalent rate calculated above and .adjusted to account for assumed
administrative expenses.
51
CITY OF ROSEMEAD,CALIFORNIA
NOTES TO FINANCIAL STATEMENTS(CONTINUED)
JUNE 30,2020
Note 10: Defined Benefit Pension Plans(Continued)
The expected real rates of return by asset class are as follows:
Assumed Asset Real Return Real Return
Asset Class(1) Allocation Years 1 -10(2) Years 11+ (3)
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) In the System's CAFR, Fixed Income is included in Global Debt Securities; Liquidity is
included in Short-Term Investments; Inflation Assets are included in both Global Equity
Securities and Global Debt Securities.
(2) An expected inflation of 2.0%used for this period.
(3) An expected inflation of 2.92%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 $ 13,369,050 $ 8,856,781 $ 5,132,222
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
information are listed in the June 30, 2019 Annual Actuarial Valuation Report. Details of
the benefits provided can be obtained from the actuarial valuation reports. PARS issues a
publicly availablefinancial 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.
52
CITY OF ROSEMEAD, CALIFORNIA
NOTES TO FINANCIAL STATEMENTS(CONTINUED)
JUNE 30,2020
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 Il's provisions and benefits in effect at June 30, 2020, (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, 2020,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
53
CITY OF ROSEMEAD, CALIFORNIA
NOTES TO FINANCIAL STATEMENTS(CONTINUED)
JUNE 30,2020
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, 2020
(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, 2020 are$112,649.
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, 2020, using an annual actuarial valuation as of
June 30,2019.
Total pension liability $ 2,720,673
Plan fiduciary net position (3,242,637)
Net pension (asset) $ (521,964)
Plan fiduciary net position as a % of total pension liability 119.2%
Actuarial Assumptions and Methods
The following actuarial methods and assumptions were used in the June 30, 2019 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 Varies by entry age and service
Investment Rate of Return 7.15%
Cost of Living Adjustments 2.00%
Mortality Consistent with Non-Industrial rates used to
value the Miscellaneous Public Agency CaIPERS
Pension Plans.
54
CITY OF ROSEMEAD, CALIFORNIA
NOTES TO FINANCIAL STATEMENTS(CONTINUED)
JUNE 30,2020
Note 10: Defined Benefit Pension Plans(Continued)
Discount Rate
GASB 68 generally require 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, 2019 June 30, 2020
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.
55
CITY OF ROSEMEAD, CALIFORNIA
NOTES TO FINANCIAL STATEMENTS(CONTINUED)
JUNE 30,2020
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, 2020.
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"bill 9.92% -0.22% -0.20%
US Core Fixed Income Barclays Aggregate 44.73% 0.92% 0.84%
US Equity Market Russell 3000 35.57% 4.82% 3.52%
Foreign Developed Equity MSCI EAFE NR 5.65% 6.32% 4.75%
Emerging Markets Equity MSCI EM NR 3.28% 8.35% 5.53%
US REITs FTSE NAREIT Equity REIT 0.85% 5.32% 3.62%
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 30,2019 $ 2,742,513 $ 3,255,068 $ (512,555)
Changes for the year.
Service cost 25,883 - 25,883
Interest on total pension liability 172,888 - 172,888
Effect of plan changes - - -
Effect of economic/demographic gains or losses - - -
Effect of assumptions changes or inputs - - -
Benefit payments (220,611) (220,611) -
Employer contributions - 112,649 (112,649)
Member contributions - -Net investment income - 96,972 (96,972)
Administrative expenses - (1,441) 1,441
Balances as of June 30,2020 $ 2,720,673 $ 3,242,637 $ (521,964)
56
CITY OF ROSEMEAD, CALIFORNIA
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
JUNE 30,2020
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%)
$ (222,585) $ (521,964) $ (777,250)
Pension Plan Fiduciary Net Position
The Plan II fiduciary net position at June 30, 2020,was as follows:
Assets:
Cash and cash equivalents $ 321,591
Investments:
Fixed income 1,450,528
Stocks 1,442,843
Real estate 27,675
Total Investments 2,921,046
Total Assets 3,242,637
Net Position Restricted for Pensions $ 3,242,637
Pension Expense and Deferred Outflows/Inflows of Resources Related to Pensions
For the year ended June 30, 2020, the City recognized pension expense of $3,025. At
June 30, 2020, 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 $ 10,397 $ 140,008
Change of assumptions 19,429
Net difference between projected and actual earnings
on pension plan investments 87,805
Total $ 117,631 $ 140,008
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
2021 $ (31,854)
2022 (14,689)
2023 1,946
2024 22,220
$ (22,377)
57
CITY OF ROSEMEAD, CALIFORNIA
NOTES TO FINANCIAL STATEMENTS(CONTINUED)
JUNE 30, 2020
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 $44,899 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 June 30, 2019, the date of the
latest actuarial valuation:
Active 61
Inactive employees or beneficiaries currently receiving benefits 34
Total 95
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, 2019, the City recognized a total of$97,132 in
contributions, including an implied subsidy of$31,026, as a reduction to the net OPEB liability.
58
CITY OF ROSEMEAD, CALIFORNIA
NOTES TO FINANCIAL STATEMENTS(CONTINUED)
JUNE 30,2020
Note 12: Post-Employment Benefit Plan (Continued)
Net OPEB Liability
The City's net OPEB liability was measured as of June 30, 2019 and the total OPEB liability
used to calculate the net OPEB liability was determined by an actuarial valuation
dated June 30, 2019 was used to determine the total OPEB liability, based on the following
actuarial methods and assumptions:
Valuation Date June 30, 2019
Actuarial Cost Method Entry Age Normal, Level Percentage of Payroll
Amortization Method Level percent of pay
Amortization Period 21-year fixed period for 2019/20
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 2021, decreasing to an
ultimate rate of 4.0% in 2076
Medicare-6.5% for 2021, 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
Salary Increases Aggregate-3% annually
Merit-CaIPERS 1997-2015 experience study.
PEMHCA Minimum Increases 4.25% annually
Cap Increases No future increases
Healthcare Participation for Actives & Surviving Spouses Hired <7/1/07:
Future Retirees Covered:
<12 yrs of service-70%
12-19 yrs of service-80%
>= 20 yrs of service- 100%
Waived:
<12 yrs of service-50%
12-19 yrs of service-65%
>= 20 yrs of service-80%
Actives & Surviving Spouses Hired >= 7/1/07:
Covered-70%, Waived -50%
Retirees & Surviving Spouses: Covered- 100%
Waived < 65-20% at 65, Wavied >= 65-0%
Mortality improvement scale was updated to Scale
MP-2019
Change of assumptions Participation at retirement for hires after 7/1/07
Changes of benefit terms None
59
CITY OF ROSEMEAD, CALIFORNIA
NOTES TO FINANCIAL STATEMENTS(CONTINUED)
JUNE 30,2020
Note 12: Post-Employment Benefit Plan (Continued)
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.
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 30,2019(measurement date 6/30/2018) $ 4,405,321 $ 3,676,239 $ 729,082
Changes recognized for the measurement period:
Service cost 155,962 - 155,962
Interest 268,709 268,709
Actual vs.expected experience (479,267) - (479,267)
Assumption changes (42,977) - (42,977)
Contributions-employer 97,132 (97,132)
Net investment income - 242,596 (242,596)
Benefit payments (165,606) (165,606) -
Administrative expenses - (9,719) 9,719
Net changes (263,179) 164,403 (427,582)
Balance at June 30,2020(measurement date 6/30/2019) $ 4,142,142 $ 3,840,642 $ 301,500
60
CITY OF ROSEMEAD, CALIFORNIA
NOTES TO FINANCIAL STATEMENTS(CONTINUED)
JUNE 30,2020
Note 12: Post-Employment Benefit Plan (Continued)
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 30,2019:
Current
1% Decrease Discount Rate 1% Increase
(5.00%) (6.00%) (7.00%)
Net OPEB Liability $ 830,910 $ 301,500 $ (139,743)
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, 2019:
Current Healthcare Cost -
1% Decrease Trent Rates 1% Increase
Net OPEB Liability $ 26,602 $ 301,500 $ 607,120
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, 2020, the City recognized OPEB expense of$116,743. As
of fiscal year ended June 30,2020,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 $ 45,227 $
Differences between expected and actual experience - 421,524
Changes of assumptions - 37,799
Net difference between projected and actual earnings
on OPEB in estments - 80,948
Total $ 45,227 $ 540,271
61
CITY OF ROSEMEAD, CALIFORNIA
NOTES TO FINANCIAL STATEMENTS(CONTINUED)
JUNE 30,2020
Note 12: Post-Employment Benefit Plan (Continued)
The$45,227 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
2021 $ (97,874)
2022 (97,872)
2023 (69,402)
2024 (67,484)
2025 (62,921)
Thereafter (144,718)
$ (540,271)
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.
Note 14: Subsequent Events
In December 2019, an outbreak of a novel strain of coronavirus (COVID-19) originated in
China, and has since spread to a number of other countries, including the U.S. On
March 11, 2020, the World Health Organization characterized COVID-19 as a pandemic. In
addition, several states in the U.S., including California, have declared a state of emergency.
Potential impacts to our future tax revenues include disruptions or restrictions on our current
employees' ability to work. Any of the foregoing could negatively impact our revenues and we
currently can't anticipate all of the ways in which this health epidemics, COVID-19 could
adversely impact our government agency. Although we are continuing to monitor and assess
the effects of the COVID-19 pandemic on our government agency, the ultimate impact of the
COVID-19 outbreak or a similar health epidemic is highly uncertain and subject to change.
On March 27, 2020, in response to the economic fallout of the Coronavirus pandemic in the
United States, Congress passed the Coronavirus Aid, Relief, and Economic Security Act, also
known as the CARES Act,which provided$2.2 trillion in economic stimulus funding through a
variety of channels. The State of California received a$500 million allocation to provide cities
which did not receive a direct federal allocation through the CARES Act.The City entered into
an agreement with the State of California in July 2020 to receive their allocation of the
CARES Act funding. The total amount of CARES Act funding to be received by the City is
$111,871. This funding was for the reimbursement of costs incurred by the City since the start
of the pandemic.
62
CITY OF ROSEMEAD, CALIFORNIA
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
JUNE 30,2020
Note 15: 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 (DOF), 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 $ 5,236,373
Restricted:
Cash with Fiscal Agents 1,134,248
Total Cash and Investments $ 6,370,621
63
CITY OF ROSEMEAD, CALIFORNIA
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
JUNE 30,2020
Note 15: Successor Agency(Continued)
b. Long-Term Debt
The debt of the Successor Agency as of June 30, 2020 is as follows:
Balance Balance Due Within
July 1,2019 Additions Deletions June 30, 2020 One Year
Bonds Payable:
Tax Allocation Bonds
Series 2010A $ 5,245,000 $ - $ 960,000 $ 4,285,000 $ 1,000,000
Tax Allocation Bonds
Series 2016 22,050,000 - 1,245,000 20,805,000 1,295,000
Subtotal Bonds 27,295,000 - 2,205,000 25,090,000 2,295,000
Deferred amounts:
Unamortized bond premium 1,495,120 - 106,795 1,388,325 106,795
Discount on Issuance (62,816) - (14,781) (48,035) (14,781)
Total Bonds 1,432,304 - 92,014 1,340,290 92,014
Total Long-term Debt $ 28,727,304 $ - $ 2,297,014 $ 26,430,290 $ 2,387,014
Future debt service requirements are as follows:
Year Ending
June 30 Principal Interest
2021 $ 2,295,000 $ 1,126,375
2022 2,405,000 1,010,125
2023 2,530,000 886,750
2024 2,320,000 765,500
2025 1,245,000 676,375
2026-2030 7,210,000 2,382,300
2031-2035 7,085,000 589,975
Total $ 25,090,000 $ 7,437,400
64
CITY OF ROSEMEAD, CALIFORNIA
NOTES TO FINANCIAL STATEMENTS(CONTINUED)
JUNE 30,2020
Note 15: Successor Agency(Continued)
Tax Allocation Bonds, Series 2010A
In July 2010, the Commission issued $11,230,000 in Merged Project Area Tax Allocation
Bonds. The bonds mature in amounts ranging from $200,000 to $1,135,000 with interest
rates ranging from 3.00%to 5.00%through December 1,2023.The bonds were issued to
provide funds to finance the costs of certain redevelopment projects within the Merged
Project Area including infrastructure improvements and the acquisition of land. Principal is
payable annually on December 1, beginning on December 1, 2011. Interest is payable
semi-annually on June 1 and December 1. Per the bond indenture, a reserve is required
to be maintained. 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, 2020,the balance held in the reserve account
was$1,123,000.As of June 30,2020, the outstanding balance was$4,285,000.
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 30,2020,the outstanding balance was$20,805,000.
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, 2020 is $32,527,400 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
$3,634,143 and the debt service obligation on the bonds was$3,480,500.
65
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66
REQUIRED SUPPLEMENTARY INFORMATION
67
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68
CITY OF ROSEMEAD, CALIFORNIA
NOTES TO REQUIRED SUPPLEMENTARY INFORMATION
JUNE 30,2020
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 with the exception of the City Grants Special Revenue Fund.
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.
69
CITY OF ROSEMEAD,CALIFORNIA
BUDGETARY COMPARISON SCHEDULE
GENERAL FUND
FOR THE YEAR ENDED JUNE 30,2020
Variance with
Final Budget
Budget Amounts Actual Positive
Original Final Amounts (Negative)
Budgetary Fund Balance,July 1 $ 23,294,954 $ 23,294,954 $ 23,294,954 $ -
Resources(Inflows):
Taxes 18,910,000 18,910,000 18,503,951 (406,049)
Licenses and permits 2,567,000 2,567,000 2,115,419 (451,581)
Intergovernmental 1,111,000 1,139,421 165,754 (973,667)
Charges for services 1,080,000 1,240,000 695,486 (544,514)
Use of money and property 299,400 299,400 657,382 357,982
Fines and forfeitures 703,000 703,000 612,080 (90,920)
Contributions 2,000 2,000 2,733 733
Miscellaneous 190,500 190,500 202,683 12,183
Amounts Available for Appropriations 48,157,854 48,346,275 46,250,442 (2,095,833)
Charges to Appropriation(Outflows):
General government 3,974,000 3,975,386 3,531,048 444,338
Public safety 9,815,300 9,930,300 9,539,004 391,296
Community development 2,379,600 2,511,383 2,054,123 457,260
Parks and recreation 2,848,900 2,929,480 2,609,393 320,087
Public works 4,394,000 4,517,309 4,227,984 289,325
Capital outlay 479,900 494,900 80,409 414,491
Total Charges to Appropriations 23,891,700 24,358,758 22,041,961 2,316,797
Budgetary Fund Balance,June 30 $ 24,266,154 $ 23,987,517 $ 24,208,481 $ 220,964
70
CITY OF ROSEMEAD,CALIFORNIA
BUDGETARY COMPARISON SCHEDULE
COMMUNITY DEVELOPMENT BLOCK GRANT(CDBG)
FOR THE YEAR ENDED JUNE 30,2020
Variance with
Final Budget
Budget Amounts Actual Positive
Original Final Amounts (Negative)
Budgetary Fund Deficit,July 1 $ (23,792) $ (23,792) $ (23,792) $ -
Resources(Inflows):
Intergovernmental 1,005,700 1,005,700 561,239 (444,461)
Charges for services - - 8,392 8,392
Amounts Available for Appropriations 981,908 981,908 545,839 (436,069)
Charges to Appropriation(Outflows):
General government 21,800 40,386 44,548 (4,162)
Community development 584,100 518,377 269,777 248,600
Parks and recreation 24,400 44,900 20,284 24,616
Public works 59,400 59,400 25,636 33,764
Capital outlay 316,000 316,000 392,405 (76,405)
Total Charges to Appropriations 1,005,700 979,063 752,650 226,413
Budgetary Fund Deficit,June 30 $ (23,792) $ 2,845 $ (206,811) $ (209,656)
71
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(11
2020 2019 2018 2017 2016
Measurement Date 6/30/2019 6/30/2018 6/30/2017 6/30/2016 6/30/2015
Proportion of the Net Pension Liability 0.08643% 0.09186% 0.09661% 0.09959% 0.11128%
Proportionate Share of the Net Pension Liability $ 8,856,781 $ 8,688,626 $ 9,309,566 $ 8,617,416 $ 7,638,064
Covered Payroll $ 3,903,914 $ 3,761,962 $ 3,690,780 $ 3,388,767 $ 3,543,958
Proportionate Share of the Net Pension Liability as
Percentage of Covered Payroll 227% 231% 252% 254% 216%
Plan Fiduciary Net Position as a Percentage of the
Total Pension Liability 75.3% 75.3% 73.3% 74.1% 78.4%
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.
•
72
CITY OF ROSEMEAD,CALIFORNIA
COST-SHARING MULTIPLE EMPLOYER MISCELLANEOUS PLANS
SCHEDULE OF PLAN CONTRIBUTIONS
AS OF JUNE 30,FOR THE LAST TEN FISCAL YEARS")
2020 2019 2018 2017 2016
Actuarially Determined Contribution $ 1,446,875 $ 1,389,145 $ 1,487,464 $ 1,113,875 $ 1,276,087
Contribution in Relation to the Actuarially Determined Contribution (1,446,875) (1,389,145) (1,487,464) (1,113,875) (1,276,087)
Contribution Deficiency(Excess) $ - $ - $ - $ - $ -
Covered Payroll $ 3,832,817 $ 3,903,914 $ 3,761,962 $ 3,690,780 $ 3,388,767
Contributions as a Percentage of Covered Payroll 37.7% 35.6% 39.5% 30.2% 18.1%
Notes to Schedule of Plan Contributions:
The actuarial methods and assumptions used to set the actuarially determined contributions for Fiscal Year 2019-20 were derived from the June 30,2017
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: 2.63%
Salary Increases: Varies by Entry Age and Service
Payroll Growth: 2.88%
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.
73
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)
2020 2019 2018 2017 2016
Total Pension Liability
Service Cost $ 25,883 $ 25,190 $ 37,502 $ 36,410 $ 45,435
Interest 172,888 170,716 171,215 192,440 191,270
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 (220,611) (206,738) (201,490) (200,693) (218,411)
Net Change in Total Pension Liability (21,840) 39,562 7,227 (327,243) 18,294
Total Pension Liability-Beginning 2,742,513 2,702,951 2,695,724 3,022,967 3,004,673
Total Pension Liability-Ending(a) $ 2,720,673 $ 2,742,513 $ 2,702,951 $ 2,695,724 $ 3,022,967
Plan Fiduciary Net Position
Contribution-Employer $ 112,649 $ 131,770 $ 140,376 $ 164,389 $ 265,241
Net Investment Income 96,972 187,985 175,605 266,884 (2,345)
Benefit Payments,Including Refunds of Employee Contributions (220,611) (206,738) (201,490) (200,693) (218,411)
Other Changes in Fiduciary Net Position (1,441) (1,440) (1,461) (6,848) (2,624)
Net Change in Fiduciary Net Position (12,431) 111,577 113,030 223,732 41,861
Plan Fiduciary Net Position-Beginning 3,255,068 3,143,491 3,030,461 2,806,729 2,764,868
Plan Fiduciary Net Position-Ending(b) $ 3,242,637 $ 3,255,068 $ 3,143,491 $ 3,030,461 $ 2,806,729
Plan Net Pension Liability/(Assets)-Ending(a)-(b) $ (521,964) $ (512,555) $ (440,540) $ (334,737) $ 216,238
Plan Fiduciary Net Position as a Percentage of the Total Pension
Liability 119.2% 118.7% 116.3% 112.4% 92.8%
Covered Payroll $ 2,300,379 $ 2,238,812 $ 2,178,892 $ 2,414,510 $ 2,344,184
Plan Net Pension Liability/(Asset)as a Percentage of Covered Payroll -22.7% -22.9% -20.2% -13.9% 9.2%
Notes to Schedule of Changes in the Net Pension Liability(Asset)and Related Ratios:
Changes of Assumptions:There were no changes in assumptions
11I 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.
74
CITY OF ROSEMEAD,CALIFORNIA
PARS RETIREMENT ENHANCEMENT PLAN
SCHEDULE OF PLAN CONTRIBUTIONS
AS OF JUNE 30,FOR THE LAST TEN FISCAL YEARS(11
2020 2019 2018 2017 2016
Actuarially Determined Contribution $ 25,970 $ 73,864 $ 81,888 $ 88,845 $ 116,244
Contribution in Relation to the Actuarially Determined Contribution (112,649) (131,770) (140,376) (164,389) (265,241)
Contribution Deficiency(Excess) $ (86,679) $ (57,906) $ (58,488) $ (75,544) $ (148,997)
Covered Payroll $ 2,300,379 $ 2,238,812 $ 2,178,892 $ 2,414,510 $ 2,344,184
Contributions as a Percentage of Covered Payroll 4.9% 5.9% 6.4% 6.8% 11.3%
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 years
Inflation 2.50%
Salary Increases 3.4%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.
75
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)
2020 2019 2018
Total OPEB Liability
Service cost $ 155,962 $ 151,419 $ 147,009
Interest on the total OPEB liability 268,709 253,402 237,920
Actual and expected experience difference (479,267) - -
Changes in assumptions (42,977) - -
Benefit payments (165,606) (142,897) (119,682)
Net change in total OPEB liability (263,179) 261,924 265,247
Total OPEB liability-beginning 4,405,321 4,143,397 3,878,150
Total OPEB liability-ending(a) 4,142,142 4,405,321 4,143,397
Plan Fiduciary Net Position
Contribution-employer 97,132 22,063 158,082
Net investment income 242,596 223,704 336,797
Benefit payments (165,606) (142,897) (119,682)
Administrative expense (9,719) (9,889) (8,925)
Net change in plan fiduciary net position 164,403 92,981 366,272
Plan fiduciary net position-beginning 3,676,239 3,583,258 3,216,986
Plan fiduciary net position-ending(b) 3,840,642 3,676,239 3,583,258
Net OPEB Liability-ending(a)-(b) $ 301,500 $ 729,082 $ 560,139
Plan fiduciary net position as a percentage of the total OPEB liability 92.7% 83.4% 86.5%
Covered-employee payroll $ 3,903,914 $ 3,761,962 $ 3,690,780
Net OPEB liability as a percentage of covered-employee payroll 7.7% 19.4% 15.2%
Notes to Schedule:
W 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.
76
CITY OF ROSEMEAD,CALIFORNIA
OTHER POST-EMPLOYMENT BENEFIT PLAN
SCHEDULE OF PLAN CONTRIBUTIONS
AS OF JUNE 30,FOR THE LAST TEN FISCAL YEARS")
2020 2019 2018
Actuarially Determined Contribution $ 202,000 $ 197,000 . $ 192,000
Contribution in Relation to the Actuarially Determined Contributions(2) (45,227) (97,132) (22,063)
Contribution Deficiency(Excess) $ 156,773 $ 99,868 $ 169,937
Covered-employee payroll $ 3,832,817 $ 3,903,914 $ 3,761,962
Contributions as a percentage of covered-employee payroll 1.2% 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: 19-year fixed period for 2019/20
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
(') 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.
(2)Contributions include implied subsidies.
77
CITY OF ROSEMEAD,CALIFORNIA
COMBINING BALANCE SHEET
NONMAJOR GOVERNMENTAL FUNDS
JUNE 30,2020
Special Revenue Funds
State Gas Tax Proposition A Proposition C Measure R
Assets:
Cash and investments $ 1,431,482 $ 698,723 $ 1,453,959 $ 2,119,691
Receivables:
Accounts receivable 114,774 66,087 - -
Total Assets $ 1,546,256 $ 764,810 $ 1,453,959 $ 2,119,691
Liabilities,Deferred Inflows of Resources,
and Fund Balances(Deficits):
Liabilities:
Accounts payable $ 63,609 $ 9,374 $ 93,679 $ 3,299
Accrued liabilities 5,530 12,871 7,267 2,864
Deposits payable - - - -
Due to other funds - - - -
Retentions payable - - - 2,355
Total Liabilities 69,139 22,245 100,946 8,518
Deferred Inflows of Resources:
Unavailable revenues 106,774 - - -
Total Deferred Inflows of Resources 106,774 - - -
Fund Balances(Deficits):
Restricted:
Community services - - - -
Public works 1,370,343 742,565 1,353,013 2,111,173
Unassigned - - - -
Total Fund Balances(Deficits) 1,370,343 742,565 1,353,013 2,111,173
Total Liabilities,Deferred Inflows of
Resources,and Fund Balances(Deficits) $ 1,546,256 $ 764,810 $ 1,453,959 $ 2,119,691
78
CITY OF ROSEMEAD,CALIFORNIA
COMBINING BALANCE SHEET
NONMAJOR GOVERNMENTAL FUNDS
JUNE 30,2020. (CONTINUED)
Special Revenue Funds
Air Quality Development
Management Impact Fee
Measure M District Street Lighting Traffic
Assets:
Cash and investments $ 2,159,914 $ 394,812 $ 2,407,505 $ 41,291
Receivables:
Accounts receivable - 17,244 24,557 -
Total Assets $ 2,159,914 $ 412,056 $ 2,432,062 $ 41,291
Liabilities,Deferred Inflows of Resources,
and Fund Balances(Deficits):
Liabilities:
Accounts payable $ - $ - $ 50,685 $ -
Accrued liabilities 922 - 3,465
Deposits payable - - -
Due to other funds - - - -
Retentions payable 330 - -
Total Liabilities 1,252 - 54,150 -
Deferred Inflows of Resources:
Unavailable revenues - - - -
Total Deferred Inflows of Resources - - - -
Fund Balances(Deficits):
Restricted:
Community services - - - 41,291
Public works 2,158,662 412,056 2,377,912 -
Unassigned - - - -
Total Fund Balances(Deficits) 2,158,662 412,056 2,377,912 41,291
Total Liabilities,Deferred Inflows of
Resources,and Fund Balances(Deficits) $ 2,159,914 $ 412,056 $ 2,432,062 $ 41,291
79
CITY OF ROSEMEAD,CALIFORNIA
COMBINING BALANCE SHEET
NONMAJOR GOVERNMENTAL FUNDS
JUNE 30,2020
Special Revenue Funds
Development
Development Impact Fee Development
Impact Fee General Impact Fee HOME
Public Safety Government Parks Program
Assets:
Cash and investments $ 7,357 $ 52,200 $ 218,836 $ 94,729
Receivables:
Accounts receivable - - - 128,413
Total Assets $ 7,357 $ 52,200 $ 218,836 $ 223,142
Liabilities,Deferred Inflows of Resources,
and Fund Balances(Deficits):
Liabilities:
Accounts payable $ - $ - $ - $ -
Accrued liabilities - - - 1,551
Deposits payable - - - -
Due to other funds - - - -
Retentions payable - - -
Total Liabilities - - - 1,551
Deferred Inflows of Resources:
Unavailable revenues .. - - 87,224
Total Deferred Inflows of Resources - - - 87,224
Fund Balances(Deficits):
Restricted:
Community services 7,357 - 218,836 134,367
Public works - 52,200 - -
Unassigned - - - -
Total Fund Balances(Deficits) 7,357 52,200 218,836 134,367
Total Liabilities,Deferred Inflows of
Resources,and Fund Balances(Deficits) $ 7,357 $ 52,200 $ 218,836 $ 223,142
80
CITY OF ROSEMEAD,CALIFORNIA
COMBINING BALANCE SHEET
NONMAJOR GOVERNMENTAL FUNDS
JUNE 30,2020
Special Revenue Funds
Road
Rosemead Maintenance
Housing and Total
Development Rehabilitation City Grants Governmental
Corporation Account SB1 Fund Funds
Assets:
Cash and investments $ 422,254 $ 2,201,283 $ - $ 13,704,036
Receivables:
Accounts receivable 171 145,723 - 496,969
Total Assets $ 422,425. $ 2,347,006 $ - $ 14,201,005
Liabilities,Deferred Inflows of Resources,
and Fund Balances(Deficits):
Liabilities:
Accounts payable $ 25,123 $ - $ 20,294 $ 266,063
Accrued liabilities - 570 - 35,040
Deposits payable 42,431 - - 42,431
Due to other funds - - 42,455 42,455
Retentions payable - - - 2,685
Total Liabilities 67,554 570 62,749 388,674
Deferred Inflows of Resources:
Unavailable revenues - - - 193,998
Total Deferred Inflows of Resources - - - 193,998
Fund Balances(Deficits):
Restricted:
Community services - - - 401,851
Public works - 2,346,436 - 12,924,360
Unassigned - - (62,749) (62,749)
Total Fund Balances(Deficits) 354,871 2,346,436 (62,749) 13,618,333.
Total Liabilities,Deferred Inflows of
Resources,and Fund Balances(Deficits) $ 422,425 $ 2,347,006 $ $ 14,201,005
81
CITY OF ROSEMEAD,CALIFORNIA
COMBINING STATEMENT OF REVENUES,
EXPENDITURES,AND CHANGES IN FUND BALANCES
NONMAJOR GOVERNMENTAL FUNDS
FOR THE YEAR ENDED JUNE 30,2020
Special Revenue Funds
State Gas Tax Proposition A Proposition C Measure R
Revenues:
Intergovernmental $ 1,205,431 $ 1,133,021 $ 885,024 $ 662,819
Charges for services 12,111 25,518
Use of money and property 27,259 16,499 28,238 39,461
Developer participation - - - -
Miscellaneous 61,941 - -
Total Revenues 1,294,631 1,161,631 938,780 702,280
Expenditures:
Current:
General government 2,625 133,614 17,946 10,353
Public safety 4,453 - 34,410
Community development - - - -
Parks and recreation - 26,109
Public works 664,794 947,104 466,224 87,421
Capital outlay 236,826 - - 127,817
Total Expenditures 908,698 1,106,827 518,580 225,591
Net Change in Fund Balances 385,933 54,804 420,200 476,689
Fund Balance(Deficit)at the Beginning of the Year 984,410 687,761 932,813 1,634,484
Fund Balance(Deficit)at the End of the Year $ 1,370,343 $ 742,565 $ 1,353,013 $ 2,111,173
82
CITY OF ROSEMEAD,CALIFORNIA
COMBINING STATEMENT OF REVENUES,
EXPENDITURES,AND CHANGES IN FUND BALANCES
NONMAJOR GOVERNMENTAL FUNDS
FOR THE YEAR ENDED JUNE 30,2020 (CONTINUED)
Special Revenue Funds
Air Quality Development
Management Impact Fee
Measure M District Street Lighting Traffic
Revenues:
Intergovernmental $ 745,836 $ 69,738 $ 1,145,113 $ -
Charges for services - - - -
Use of money and property 37,441 7,354 41,901 757
Developer participation - - - . 19,312
Miscellaneous - - - -
Total Revenues 783,277 77,092 1,187,014 20,069
Expenditures:
Current:
General government - . - 3,010 -
Public safety - - - -
Community development - - - -
Parks and recreation - - - -
Public works 1,643 - 607,147 -
Capital outlay 6,598 - 44,504 -
Total Expenditures 8,241 - 654,661 -
Net Change inFundBalances 775,036 77,092 532,353 20,069
Fund Balance(Deficit)at the Beginning of the Year 1,383,626 334,964 1,845,559 21,222
Fund Balance(Deficit)at the End of the Year $ 2,158,662 $ 412,056 $ 2,377,912 $ 41,291
83
CITY OF ROSEMEAD,CALIFORNIA
COMBINING STATEMENT OF REVENUES,
EXPENDITURES,AND CHANGES IN FUND BALANCES
NONMAJOR GOVERNMENTAL FUNDS
FOR THE YEAR ENDED JUNE 30,2020
Special Revenue Funds
Development
Development Impact Fee Development
Impact Fee General Impact Fee
Public Safety Government Parks HOME Program
Revenues:
Intergovernmental $ - $ - $ - $ 197,569
Charges for services - - - -
Use of money and property 135 958 4,010 7,272
Developer participation 3,484 24,308 103,624 -
Miscellaneous - - - -
Total Revenues 3,619 25,266 107,634 204,841
Expenditures:
Current:
General government - - - 14,826
Public safety - - - -
Communitydevelopment - - - 121,718
Parks and recreation - - - -
Public works - - - -
Capital outlay - - - -
Total Expenditures - - - 136,544
Net Change in Fund Balances 3,619 25,266 107,634 68,297
Fund Balance(Deficit)at the Beginning of the Year 3,738 26,934 111,202 66,070
Fund Balance(Deficit)at the End of the Year $ 7,357 $ 52,200 $ 218,836 $ 134,367
84
CITY OF ROSEMEAD,CALIFORNIA
COMBINING STATEMENT OF REVENUES,
EXPENDITURES,AND CHANGES IN FUND BALANCES
NONMAJOR GOVERNMENTAL FUNDS
FOR THE YEAR ENDED JUNE 30,2020
Special Revenue Funds
Rosemead Road
Housing Maintenance and Total
Development Rehabilitation City Grants Governmental
Corporation . Account SB1 Fund Funds
Revenues:
Intergovernmental $ 453,238 $ 954,273 $ - $ 7,452,062
Charges for services 463,131 - - 500,760
Use of money and property 76 36,296 - 247,657
Developer participation - - - 150,728
Miscellaneous 4,158 - - 66,099
Total Revenues 920,603 990,569 - 8,417,306
Expenditures:
Current:
General government - - 10,592 192,966
Public safety - - - 38,863
Community development 906,714 - - 1,028,432
Parks and recreation - - 48,071 74,180
Public works - 570 4,086 2,778,989
Capital outlay - - - 415,745
Total Expenditures 906,714 570 62,749 4,529,175
Net Change in Fund Balances 13,889 989,999 (62,749) 3,888,131
Fund Balance(Deficit)at the Beginning of the Year 340,982 1,356,437 - 9,730,202
Fund Balance(Deficit)at the End of the Year $ 354,871 $ 2,346,436 $ (62,749) $ 13,618,333
85
CITY OF ROSEMEAD,CALIFORNIA
BUDGETARY COMPARISON SCHEDULE
STATE GAS TAX
FOR THE YEAR ENDED JUNE 30,2020
Variance with
Final Budget
Budget Amounts Actual Positive
Original Final _ Amounts (Negative)
Budgetary Fund Balance,July 1 $ 984,410 $ 984,410 $ 984,410 $ -
Resources(Inflows):
Intergovernmental 1,910,700 1,910,700 1,205,431 (705,269)
Use of money and property - - 27,259 27,259
Miscellaneous 62,300 62,300 61,941 (359)
Amounts Available for Appropriations 2,957,410 2,957,410 2,279,041 (678,369)
Charges to Appropriation(Outflows):
General government 2,500 2,500 2,625 (125)
Public safety 18,000 18,000 4,453 13,547
Public works 692,000 705,229 664,794 40,435
Capital outlay 800,000 800,000 236,826 563,174
Total Charges to Appropriations 1,512,500 1,525,729 908,698 617,031
Budgetary Fund Balance,June 30 $ 1,444,910 $ 1,431,681 $ 1,370,343 $ (61,338)
86
CITY OF ROSEMEAD,CALIFORNIA
BUDGETARY COMPARISON SCHEDULE
PROPOSITION A
FOR THE YEAR ENDED JUNE 30,2020
Variance with
Final Budget
Budget Amounts Actual Positive
Original Final Amounts (Negative)
Budgetary Fund Balance,July 1 $ 687,761 $ 687,761 $ 687,761 $ -
Resources(Inflows):
Intergovernmental 1,216,700 1,216,700 1,133,021 (83,679)
Charges for services 20,000 20,000 12,111 (7,889)
Use of money and property - - 16,499 16,499
Amounts Available for Appropriations 1,924,461 1,924,461 1,849,392 (75,069)
Charges to Appropriation(Outflows):
General government 142,300 142,300 133,614 8,686
Parks and recreation 30,000 30,000 26,109 3,891
Public works 928,700 1,163,491 947,104 216,387
Total Charges to Appropriations 1,101,000 1,335,791 1,106,827 228,964
Budgetary Fund Balance,June 30 $ 823,461 $ 588,670 $ 742,565 $ 153,895
87
CITY OF ROSEMEAD,CALIFORNIA
BUDGETARY COMPARISON SCHEDULE
PROPOSITION C
FOR THE YEAR ENDED JUNE 30,2020
Variance with
Final Budget
Budget Amounts Actual Positive
Original Final Amounts (Negative)
Budgetary Fund Balance,July 1 $ 932,813 $ 932,813 $ 932,813 $ -
Resources(Inflows):
Intergovernmental 946,200 946,200 885,024 (61,176)
Charges for services 41,000 41,000 25,518 (15,482)
Use of money and property - - 28,238 28,238
Amounts Available for Appropriations 1,920,013 1,920,013 1,871,593 (48,420)
Charges to Appropriation(Outflows):
General government 29,800 29,800 17,946 11,854
Public safety 48,200 48,200 34,410 13,790
Public works 472,900 475,400 466,224 9,176
Capital outlay 500,000 500,000 - 500,000
Total Charges to Appropriations 1,050,900 1,053,400 518,580 534,820
Budgetary Fund Balance,June 30 $ 869,113 $ 866,613 $ 1,353,013 . $ 486,400
88
CITY OF ROSEMEAD,CALIFORNIA
BUDGETARY COMPARISON SCHEDULE
MEASURE R
FOR THE YEAR ENDED JUNE 30,2020
Variance with
Final Budget
Budget Amounts Actual Positive
Original Final Amounts (Negative)
Budgetary Fund Balance,July 1 $ 1,634,484 $ 1,634,484 $ 1,634,484 $ -
Resources(Inflows):
Intergovernmental 709,600 709,600 662,819 (46,781)
Use of money and property - - 39,461 39,461
Amounts Available for Appropriations 2,344,084 2,344,084 2,336,764 (7,320)
Charges to Appropriation(Outflows):
General government 16,200 41,200 10,353 30,847
Public works 276,400 276,800 87,421 189,379
Capital outlay 692,000 692,000 127,817 564,183
Total Charges to Appropriations 984,600 1,010,000 225,591 784,409
Budgetary Fund Balance,June 30 $ 1,359,484 $ 1,334,084 $ 2,111,173 $ 777,089
89
CITY OF ROSEMEAD,CALIFORNIA
BUDGETARY COMPARISON SCHEDULE
MEASURE M
FOR THE YEAR ENDED JUNE 30,2020
Variance with
Final Budget
Budget Amounts Actual Positive
Original Final Amounts (Negative)
Budgetary Fund Balance,July 1 $ 1,383,626 $ 1,383,626 $ 1,383,626 $ -
Resources(Inflows):
Intergovernmental 804,300 804,300 745,836 (58,464)
Use of money and property - _- 37,441 37,441
Amounts Available for Appropriations 2,187,926 2,187,926 2,166,903 (21,023)
Charges to Appropriation(Outflows):
Public works 43,200 43,200 1,643 41,557
Capital outlay 700,000 700,000 6,598 693,402
Total Charges to Appropriations 743,200 743,200 8,241 734,959
Budgetary Fund Balance,June 30 $ 1,444,726 $ 1,444,726 $ 2,158,662 $ 713,936
90
CITY OF ROSEMEAD,CALIFORNIA
BUDGETARY COMPARISON SCHEDULE
AIR QUALITY MANAGEMENT DISTRICT
FOR THE YEAR ENDED JUNE 30,2020
Variance with
Final Budget
Budget Amounts Actual Positive
Original Final Amounts (Negative)
Budgetary Fund Balance,July 1 $ 334,964 $ 334,964 $ 334,964 $ -
Resources(Inflows):
Intergovernmental 72,000 72,000 69,738 (2,262)
Use of money and property - - 7,354 7,354
Amounts Available for Appropriations 406,964 406,964 412,056 5,092
Charges to Appropriation(Outflows):
Public works 30,000 30,000 - 30,000
Total Charges to Appropriations 30,000 30,000 - 30,000
Budgetary Fund Balance,June 30 $ 376,964 $ 376,964 $ 412,056 $ 35,092
91
CITY OF ROSEMEAD,CALIFORNIA
BUDGETARY COMPARISON SCHEDULE
STREET LIGHTING
FOR THE YEAR ENDED JUNE 30,2020
Variance with
Final Budget
Budget Amounts Actual Positive
Original Final Amounts (Negative)
Budgetary Fund Balance,July 1 $ 1,845,559 $ 1,845,559 $ 1,845,559 $ -
Resources(Inflows):
Intergovernmental 1,000,000 1,000,000 1,145,113 145,113
Use of money and property - - 41,901 41,901
Amounts Available for Appropriations 2,845,559 2,845,559 3,032,573 187,014
Charges to Appropriation(Outflows):
General government 11,300 11,300 3,010 8,290
Public works 729,800 729,800 607,147 122,653
Capital outlay - - 44,504 (44,504)
Total Charges to Appropriations 741,100 741,100 654,661 86,439
Budgetary Fund Balance,June 30 $ 2,104,459 $ 2,104,459 $ 2,377,912 $ 273,453
92
CITY OF ROSEMEAD,CALIFORNIA
BUDGETARY COMPARISON SCHEDULE
DEVELOPMENT IMPACT FEE TRAFFIC
FOR THE YEAR ENDED JUNE 30,2020
Variance with
Final Budget
Budget Amounts Actual Positive
Original Final Amounts (Negative)
Budgetary Fund Balance,July 1 $ 21,222 $ 21,222 $ 21,222 $ -
Resources(Inflows):
Use of money and property - - 757 757
Developer participation 8,000 8,000 19,312 11,312
Amounts Available for Appropriations 29,222 -_ 29,222 41,291 12,069
Budgetary Fund Balance,June 30 $ 29,222 $ 29,222 $ 41,291 $ 12,069
93
CITY OF ROSEMEAD,CALIFORNIA
BUDGETARY COMPARISON SCHEDULE
DEVELOPMENT IMPACT FEE PUBLIC SAFETY
FOR THE YEAR ENDED JUNE 30,2020
Variance with
Final Budget
Budget Amounts Actual Positive
Original Final Amounts (Negative)
Budgetary Fund Balance,July 1 $ 3,738 $ 3,738 $ 3,738 $ -
Resources(Inflows):
Use of money and property - - 135 135
Developer participation 1,200 1,200 3,484 2,284
Amounts Available for Appropriations 4,938 4,938 7,357 2,419
Budgetary Fund Balance,June 30 $ 4,938 $ 4,938 $ 7,357 $ 2,419
94
CITY OF ROSEMEAD,CALIFORNIA
BUDGETARY COMPARISON SCHEDULE
DEVELOPMENT IMPACT FEE GENERAL GOVERNMENT
FOR THE YEAR ENDED JUNE 30,2020
Variance with
Final Budget
Budget Amounts Actual Positive
Original Final Amounts (Negative)
Budgetary Fund Balance,July 1 $ 26,934 $ 26,934 $ 26,934 $ -
Resources(Inflows):
Use of money and property - - 958 958
Developer participation 9,500 9,500 24,308 14,808
Amounts Available for Appropriations 36,434 36,434 52,200 15,766
Budgetary Fund Balance,June 30 $ 36,434 $ 36,434 $ 52,200 $ 15,766
95
CITY OF ROSEMEAD,CALIFORNIA
BUDGETARY COMPARISON SCHEDULE
DEVELOPMENT IMPACT FEE PARKS
FOR THE YEAR ENDED JUNE 30,2020
Variance with
Final Budget
Budget Amounts Actual Positive
Original Final Amounts (Negative)
Budgetary Fund Balance,July 1 $ 111,202 $ 111,202 $ 111,202 $ -
Resources(Inflows):
Use of money and property - - 4,010 4,010
Developer participation 40,000 40,000 103,624 63,624
Amounts Available for Appropriations 151,202 151,202 218,836 67,634
Budgetary Fund Balance,June 30 $ 151,202 $ 151,202 $ 218,836 $ 67,634
96
CITY OF ROSEMEAD,CALIFORNIA
BUDGETARY COMPARISON SCHEDULE
HOME PROGRAM
FOR THE YEAR ENDED JUNE 30,2020
Variance with
Final Budget
Budget Amounts Actual Positive
Original Final Amounts (Negative)
Budgetary Fund Balance,July 1 $ 66,070 $ 66,070 $ 66,070 $ -
Resources(Inflows):
Intergovernmental 1,490,200 1,490,200 197,569 (1,292,631)
Use of money and property - - 7,272 7,272
Amounts Available for Appropriations 1,556,270 1,556,270 270,911 (1,285,359)
unarges to Appropriation tuuTTiows):
General government - 14,716 14,826 (110)
Community development 1,490,200 1,475,484 121,718 1,353,766
Total Charges to Appropriations 1,490,200 1,490,200 136,544 1,353,656
Budgetary Fund Balance,June 30 $ 66,070 $ 66,070 $ 134,367 $ 68,297
97
CITY OF ROSEMEAD,CALIFORNIA
BUDGETARY COMPARISON SCHEDULE
ROSEMEAD HOUSING DEVELOPMENT CORPORATION
FOR THE YEAR ENDED JUNE 30,2020
Variance with
Final Budget
Budget Amounts Actual Positive
Original Final Amounts (Negative)
Budgetary Fund Balance,July 1 $ 340,982 $ 340,982 $ 340,982 $ -
Resources(Inflows):
Intergovernmental 451,600 451,600 453,238 1,638
Charges for services 454,600 454,600 463,131 8,531
Use of money and property - - 76 76
Miscellaneous 4,200 4,200 4,158 (42)
Amounts Available for Appropriations 1,251,382 1,251,382 1,261,585 10,203
Charges to Appropriation(Outflows):
Community development 910,400 910,400 906,714 3,686
Total Charges to Appropriations 910,400 910,400 906,714 3,686
Budgetary Fund Balance,June 30 $ 340,982 $ 340,982 $ 354,871 $ 13,889
98
CITY OF ROSEMEAD,CALIFORNIA
BUDGETARY COMPARISON SCHEDULE
ROAD MAINTENANCE AND REHABILITATION ACCOUNT SB1
FOR THE YEAR ENDED JUNE 30,2020
Variance with
Final Budget
Budget Amounts Actual Positive
Original Final Amounts (Negative)
Budgetary Fund Balance,July 1 $ 1,356,437 $ 1,356,437 $ 1,356,437 $ -
Resources(Inflows):
Intergovernmental 914,800 914,800 954,273 39,473
Use of money and property - - 36,296 36,296
Amounts Available for Appropriations 2,271,237 2,271,237 2,347,006 75,769
Charges to Appropriation(Outflows):
Public works - - 570 (570)
Capital outlay 914,800 914,800 - 914,800
Total Charges to Appropriations 914,800 914,800 570 914,230
Budgetary Fund Balance,June 30 $ 1,356,437 $ 1,356,437 $ 2,346,436 $ 989,999
99
CITY OF ROSEMEAD,CALIFORNIA
COMBINING STATEMENT OF NET POSITION
INTERNAL SERVICE FUNDS
JUNE 30,2020
Governmental Activities-Internal Service Funds
Equipment Technology
Replacement Replacement Totals
Assets:
Current Assets:
Cash and investments $ 573,862 $ 98,160 $ 672,022
Total Current Assets 573,862 98,160 672,022
Noncurrent Assets:
Capital assets,net of accumulated depreciation 6,935 13,809 20,744
Total Noncurrent Assets 6,935 13,809 20,744
Total Assets 580,797 111,969 692,766
Liabilities:
Current Liabilities:
Accounts payable 2,148 3,893 6,041
Total Current Liabilities 2,148 3,893 6,041
Total Liabilities 2,148 3,893 6,041
Net Position:
Investment in capital assets 6,935 13,809 20,744
Unrestricted 571,714 94,267 665,981
Total Net Position $ 578,649 $ 108,076 $ 686,725
100
CITY OF ROSEMEAD,CALIFORNIA
COMBINING STATEMENT OF REVENUES,EXPENSES
AND CHANGES IN FUND NET POSITION
INTERNAL SERVICE FUNDS
FOR THE YEAR ENDED JUNE 30,2020
Governmental Activities-Internal Service Funds
Equipment Technology
Replacement Replacement Totals
Operating Revenues:
Charges for services $ - $ 164,500 $ 164,500
Total Operating Revenues - 164,500 164,500
Operating Expenses:
Contractual services 79,287 146,538 225,825
Depreciation expense 38,867 12,991 51,858
Total Operating Expenses 118,154 159,529 277,683
Operating Income (118,154) 4,971 (113,183)
Net Position at the Beginning of the Year 696,803 103,105 799,908
Net Position at the End of the Year $ 578,649 $ 108,076 $ 686,725
101
CITY OF ROSEMEAD,CALIFORNIA
COMBINING STATEMENT OF CASH FLOWS
INTERNAL SERVICE FUNDS
FOR THE YEAR ENDED JUNE 30,2020
Governmental Activities-Internal Service Funds
Equipment Technology
_
Replacement Replacement Totals
Cash Flows from Operating Activities:
Cash received from interfund service provided $ - $ 164,500 $ 164,500
Cash paid to suppliers for goods and services (77,139) (142,645) (219,784)
Net Cash Provided by Operating Activities (77,139) 21,855 (55,284)
Cash Flows from Capital
and Related Financing Activities:
Acquisition and construction of capital assets - (5,747) (5,747)
Net Cash Used for Capital
and Related Financing Activities - (5,747) (5,747)
Net Increase in Cash and Cash Equivalents (77,139) 16,108 (61,031)
Cash and Cash Equivalents at the Beginning of the Year 651,001 82,052 733,053
Cash and Cash Equivalents at the End of the Year $ 573,862 $ 98,160 -$ 672,022
Reconciliation of Operating Income to Net Cash
Provided by Operating Activities:
Operating income $ (118,154) $ 4,971 $ (113,183)
Adjustments to reconcile operating income
net cash provided by operating activities:
Depreciation 38,867 12,991 51,858
Increase in accounts payable 2,148 3,893 6,041
Total Adjustments 41,015 16,884 _ 57,899
Net Cash Provided by Operating Activities $ (77,139) $ 21,855 $ (55,284)
102
CITY OF ROSEMEAD,CALIFORNIA
COMBINING STATEMENT OF CHANGES IN ASSETS AND LIABILITIES
AGENCY FUND
FOR THE YEAR ENDED JUNE 30,2020
Balance Balance
July 1,2019 Additions Deductions June 30,2020
Assets:
Cash and investments $ 1,112,785 $ 256,195 $ 137,731 $ 1,231,249
Total Assets $ 1,112,785 $ 256,195 $ 137,731 $ 1,231,249
Liabilities:
Deposits payable $ 1,112,785 $ 382,307 $ 263,843 $ 1,231,249
Total Liabilities $ 1,112,785 $ 382,307 $ 263,843 $ 1,231,249
103
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104
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 106
These schedules contain trend information to help the reader
understand how the government's financial performance and
wellbeing have changed over time.
Revenue Capacity 114
These schedules contain trend information to help the reader
assess the government's most significant revenue source,
property tax.
Debt Capacity 118
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 125
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 128
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.
105
CITY OF ROSEMEAD
Net Position by Component
Last Ten Fiscal Years
(accrual basis of accounting)
2011 2012 2013 2014 2015
Governmental activities:
Net investment in capital assets 14,760,940 54,010,031 51,132,854 50,042,631 52,038,429
Restricted 24,806,402 10,870,747 2,829,147 3,110,688 3,419,068
Unrestricted 10,748,249 13,688,078 17,724,709 17,367,841 11,018,153
Total governmental activities net positil 50,315,591 78,568,856 71,686,710 70,521,160 66,475,650
Note: The City implemented GASB 75 in the FY 2018. Prior Year information was not restated to reflect the impact of the
implementation.
Source: City of Rosemead,Department of Finance
106
2016 2017 2018 2019 2020
51,542,030 52,806,193 53,587,243 50,882,552 48,825,863
4,005,847 4,387,055 3,554,634 9,730,202 13,681,082
13,108,874 15,690,721 17,211,587 17,483,422 17,754,529
68,656,751 72,883,969 74,353,464 78,096,176 80,261,474
107
CITY OF ROSEMEAD
Changes in Net Position
Last Ten Fiscal Years
(accrual basis of accounting)
2011 2012 2013 2014 2015
Expenses:
Governmental activities:
General government 3,160,306 3,989,359 3,381,686 4,271,354 2,739,281
Public safety 8,881,926 7,517,101 7,791,073 7,923,316 7,747,949
Public works 11,907,245 11,588,278 11,717,276 10,072,081 8,703,817
Community services 595,904 - - - -
Community development 3,969,502 4,080,294 2,616,531 2,853,472 2,879,028
Parks and recreation 2,362,860 2,532,665 2,594,863 2,274,920 2,049,540
Interest and other charges 1,681,875 569,045 7,827 5,561 3,198
Total governmental activities expenses 32,559,618 30,276,742 28,109,256 27,400,704 24,122,813
Program revenues:
Governmental activities:
Charges for services:
General government 1,048,727 130,450 2,408,362 2,030,063 2,725,291
Public safety 1,293,524 1,454,759 1,622,911 1,586,557 1,573,532
Public works 9,143,311 4,033,874 3,869,285 4,356,486 4,627,331
Community services 450,004 - - - -
Community development 3,753,612 3,501,082 1,896,876 1,632,508 1,915,557
Parks and recreation 654,437 704,029 785,611 724,197 713,484
Total governmental activities
program revenues 16,343,615 9,824,194 10,583,045 10,329,811 11,555,195
Net revenues(expenses):
Governmental activities
Total net revenues(expenses) (16,216,003) (20,452,548) (17,526,211) (17,070,893) (12,567,618)
General revenues and other changes in net assets:
Governmental activities:
Taxes:
Property taxes 13,656,347 10,567,509 8,900,228 8,667,709 9,034,141
Sales and use taxes 3,737,363 3,200,911 3,215,897 3,504,285 3,452,605
Transient occupancy taxes 1,219,977 1,323,886 1,447,820 1,593,640 1,575,401
Other taxes 576,904 633,393 2,275,986 1,307,280 1,247,941
Investment income 367,961 195,165 28,202 216,499 97,589
Motor vehicle in-lieu,unrestricted 263,983 - - - -
Other general revenues 307,658 853,956 1,180,688 604,053 793,680
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 20,130,193 48,705,812 10,655,943 15,893,466 16,201,357
Changes in net position
Governmental activities
Total primary government $ 3,914,190 $ 28,253,264 $ (6,870,268) $ (1,177,427) $ 3,633,739
Source: City of Rosemead,Department of Finance
108
2016 2017 2018 2019 2020
3,218,363 3,705,685 4,554,063 4,205,482 4,003,674
8,381,588 8,935,164 9,499,683 9,125,853 9,744,134
8,738,495 7,323,865 9,554,073 6,353,025 9,946,662
3,246,081 3,161,310 3,409,699 2,376,713 3,472,477
2,073,145 2,153,986 2,746,482 7,662,344 2,920,016
787 - - - -
25,658,459 25,280,010 29,764,000 29,723,417 30,086,963
2,203,233 2,191,604 1,769,171 819,371 464,430
1,563,652 1,565,275 1,787,151 1,847,594 1,834,717
4,360,908 4,232,311 5,208,427 6,238,575 6,131,742
2,352,137 2,523,350 4,265,255 3,373,246 3,490,475
741,171 788,931 828,038 958,176 624,313
11,221,101 11,3 01,471 13,858,042 13,236,962 12,545,677
(14,437,358) (13,978,539) (15,905,958) (16,486,455) (17,541,286)
9,158,499 8,643,019 9,128,934 9,566,800 9,942,183
4,124,745 5,366,975 5,929,492 5,735,491 5,430,222
1,998,954 2,213,286 2,326,863 2,314,723 1,785,219
1,209,249 1,224,230 1,313,699 1,329,822 1,386,607
348,651 20,526 210,288 1,158,407 905,039
945,372 737,721 647,888 123,924 257,314
17,785,470 18,205,757 19,557,164 20,229,167 19,706,584
$ 3,348,112 $ 4,227,218 $ 3,651,206 $ 3,742,712 $ 2,165,298
109
CITY OF ROSEMEAD
Fund Balances of Governmental Funds
Last Ten Fiscal Years
(modified accrual basis of accounting)
2011 2012 2013 2014
General fund:
Reserved - - - -
Unreserved - - - -
Nonspendable 2,034 2,034 2,034 140,893
Restricted - - - -
Committed 5,107,963 5,294,253 6,415,416 5,883,235
Assigned - 5,712 5,712 65,343
Unassigned 10,209,075 9,519,173 11,194,278 11,607,595
Total general fund 15,319,072 14,821,172 17,617,440 17,697,066
All other governmental funds:
Reserved - - - -
Unreserved,reported in:
Special revenue funds - - - -
Debt service funds - - - -
Capital projects funds - - - -
Nonspendable - - - -
Restricted 27,476,081 10,870,747 2,829,147 3,110,688
Committed - - - -
Assigned - - - -
Unassigned (4,402,964) (1,292,405) (788,224) (1,192,926)
Total all other governmental funds 23,073,117 9,578,342 2,040,923 1,917,762
Note: The City implemented GASB 54 for the fiscal year ended June 30, 2011. 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 preapred.
Source: City of Rosemead,Department of Finance.
110
2015 2016 2017 2018 2019 2020
143,560 187,247 765,218 853,920 870,619 510,371
6,120,361 6,682,495 6,935,525 8,760,289 7,667,401 8,896,317
78,280 83,513 63,298 79,798 121,867 121,867
10,128,160 11,514,894 11,270,958 10,790,274 14,635,070 14,679,926
16,470,361 18,468,149 19,034,999 20,484,281 23,294,957 24,208,481
3,419,068 4,005,847 4,376,257 3,554,634 8,797,389 13,681,082
- - - 1,912,732 932,813 -
(1,643,527) (832,005) (639,510) (31,024) (23,792) (269,560)
1,775,541 3,173,842 3,736,747 5,436,342 9,706,410 13,411,522
111
CITY OF ROSEMEAD
Changes in Fund Balances of Governmental Funds
Last Nine Fiscal Years
(modified accrual basis of accounting)
2011 2012 2013 2014 2015
Revenues:
Taxes $ 19,313,094 $ 15,960,662 $ 16,602,329 $ 15,320,806 $ 15,537,262
Intergovernmental 10,124,638 10,330,915 7,372,878 6,948,479 7,092,141
Licenses and permits 1,764,162 1,156,719 1,156,968 1,308,482 1,846,997
Charges for services 677,861 1,055,391 1,036,563 1,087,091 1,138,731
Fines,forfeitures and penalties 462,389 619,397 691,548 700,126 676,830
Development participation - - - - -
Investment income 367,956 582,176 474,970 873,631 754,865
Other 253,379 658,670 928,596 61,690 114,074
Total revenues 32,963,479 30,363,930 28,263,852 26,300,305 27,160,900
Expenditures
Current:
General government 3,801,486 4,203,302 3,988,156 3,973,364 3,879,122
Public safety 8,882,915 7,517,101 7,773,611 7,913,659 8,156,485
Public works 19,402,924 6,417,803 6,909,471 6,184,890 6,348,101
Community services 595,904 - - - -
Community development 3,397,072 3,681,903 2,605,654 2,846,112 3,150,240
Parks and recreation 2,362,860 2,532,665 2,208,564 2,157,424 2,071,443
Capital outlay 93,121 9,090,076 3,126,669 3,268,391 4,924,435
Debt service:
Principal 975,000 1,210,000 - - -
Interest and fiscal charges 1,882,092 961,506 - - -
Bond issuance costs. 275,344 - - - -
Total expenditures 41,668,718 35,614,356 26,612,125 26,343,840 28,529,826
Excess(deficiency)of
revenues over(under)
expenditures (8,705,239) (5,250,426) 1,651,727 (43,535) (1,368,926)
Other financing sources(uses):
Transfers in 4,824,919 6,431,374 2,772,415 3,053,605 2,433,974
Transfers out (4,824,919) (6,554,374) (2,772,415) (3,053,605) (2,433,974)
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 - - - - -
Total other financing
sources(uses) 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 2,332,622 (13,992,675) (4,741,151) (43,535) (1,368,926)
Debt service as a percentage of
noncapital expenditures 8.8% 6.8% 0.0% 0.0% 0.0%
Source: City of Rosemead,Department of Finance.
112
2016 2017 2018 2019 2020
$ 16,491,447 $ 17,447,510 $ 18,698,988 $ 18,946,836 $ 18,503,951
7,734,995 6,726,279 8,002,636 8,588,211 8,179,055
2,520,937 2,754,881 3,128,000 2,636,026 2,115,419
1,191,275 1,012,557 1,572,266 1,653,095 1,204,638
597,373 607,754 633,711 622,221 612,080
- - 28,591 117,115 150,728
1,002,835 666,968 210,288 1,158,407 905,039
71,152 231,545 566,338 250,364 271,515
29,610,014 29,447,494 32,840,818 33,972,275 31,942,425
3,664,633 4,280,825 4,546,789 4,077,516 3,768,562
8,452,932 9,060,840 9,318,858 9,089,645 9,577,867
6,346,179 6,499,220 6,554,648 7,247,391 7,032,609
3,323,933 3,385,455 3,279,088 3,637,692 3,352,332
2,123,274 2,300,906 2,386,463 2,343,452 2,703,857
2,302,974 2,790,493 3,606,095 495,838 888,559
26,213,925 28,317,739 29,691,941 26,891,534 27,323,786
3,396,089 1,129,755 3,148,877 7,080,741 4,618,639
1,386,471 2,442,441 121,361 - -
(1,386,471) (2,442,441) (121,361) - -
3,396,089 1,129,755 3,148,877 7,080,741 4,618,639
0.0% 0.0% 0.0% 0.0% 0.0%
113
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
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%
2020 4,809,362,427 71,764,032 2,347,932 4,883,474,391 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 2010/11 -2019/20 Combined Tax Rolls and HDL Coren&Cone
114
CITY OF ROSEMEAD
Direct and Overlapping Property Tax Rat(
(Rate per$100 of Taxable Value)
Last Ten Fiscal Years
Agency 2010/11 2011/12 2012/13 2013/14 2014/15 2015/16 2016/17 2017/18 2018/19 2019/20
Basic Levyl 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 0.11822 0.14642 0.14682 0.14616 0.14580 0.10803
El Monte Union High School 0.08475 0.09591 0.08992 0.09799 0.08418 0.09155 0.08469 0.08243 0.08793 0.10969
Garvey School District 0.05733 0.05686 0.06037 0.05978 0.05947 0.05874 0.06067 0.08332 0.08705 0.08623
Garvey-Alhambra 0.02770 0.02718 0.02795 0.03154 0.02912 0.02906 0.02806 0.04805 0.04539 0.03660
Los Angeles Community College District 0.04031 0.03530 0.04875 0.04454 0.04017 0.03575 0.03596 0.04599 0.04621 0.02717
Metropolitan Water District 0.01800 0.01800 0.01800 0.01800 0.01800 0.01800 0.02300 0.03000 0.03000 0.03000
Montebello Unified School District 0.09792 0.10001 0.09630 0.09457 0.08750 0.08715 0.14705 0.13514 0.13921 0.09306
Pasadena Community College District 0.01986 0.01956 0.02056 0.01899 0.01032 0.00872 0.00885 0.00819 0.00767 0.00721
Rio Hondo Community College District 0.00000 0.00000 0.00000 0.00000 0.02821 0.02712 0.02808 0.02748 0.02554 0.02571
Rosemead School District 0.10743 0.10507 0.10240 0.10314 0.09886 0.09997 0.08533 0.11979 0.09260 0.08682
San Gabriel Unified School District 0.10190 0.08454 0.10523 0.10082 0.11444 0.10684 0.10534 0.10078 0.10563 0.09682
Total Direct&Overlapping'Tax Rates 1.55520 1.54243 1.56948 1.56937 1.68849 1.70932 1.75385 1.82733 1.81303 1.70734
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 4 1.00370 1.00370
Total Direct Rate 5 0.22407 0.22351 0.22113 0.09271 0.09271 0.09273 0.09274 0.09274 0.09279 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 properly 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.
City's share of I%Levy is based on the City's share of the general fund tax rate area with the largest net taxable value within the city. ERAF general fund tax shifts may not be included in
tax ratio figures.
4 RDA rate is based on the largest RDA tax rate area(TRA)and includes only rate(s)from indebtedness adopted prior to 1989 per California State statute. RDA direct and overlapping
rates are applied only to the incremental property values. The approval of ABX 1 26 eliminated Redevelopment from the State of California for the fiscal year 2012-13 and years thereafter.
5 Total Direct Rate is the weighted average of all individual direct rates applied by the government prepaing the 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 2010/11-2019/20 Tax Rate Table and HDL Coren&Cone
•
115
CITY OF ROSEMEAD
Principal Property Tax Payers
Current Year and Nine Years Ago
2019/20 2010/11
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 $ 51,973,771 1 1.08%
Walmart Stores,Inc 37,787,379 2 0.79%
Rosemead Hwang,LLC 37,174,724 3 0.77%
AFG Investment Fund 5 LLC 27,624,074 4 0.57%
MHI Rosemead LP 24,324,552 5 0.51%
Sunshine Inn 21,385,016 6 0.44%
Metodo Investments LLC 20,770,800 7 0.43%
420 Boyd Street LLC 19,524,568 8 0.41%
Panda Express 10,466,166 9 0.22%
Macy's California Inc 15,699,225 10 0.33%
Rosemead Place,LLC $ 45,003,310 1 1.34%
Walmart Real Estate Business Trust 32,655,486 2 0.97%
Rosemead Hwang LLC 32,126,034 3 0.95%
AFG Investment Fund 5 LLC 23,872,481 4 0.71%
Metodo Investments LLC 19,136,512 5 0.57%
420 Boyd Street LLC 18,417,245 6 0.55%
Macy's California Inc 13,567,141 7 0.40%
California Federal Savings and Loan Association 13,385,792 8 0.40%
Sunshine Inn 10,557,466 9 0.31%
Panda Restaurant Group Inc 9,044,766 10 0.27%
Source: Hdl Coren&Cone,Los Angeles County Assessor 2019/20 Combined Tax Rolls.
116
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
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%
2020 3,675,962 3,064,430 83.36% - 3,064,430 83.36%
* 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
117
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
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
2019/20 25,090,000 2.31% 462
Notes:Details regarding the City's outstanding debt can be found in the notes to the
financial statements.
These ratios are calculated using personal income and population for the prior
calendar year.
'The Rosemead Community Development Commission was dissolved
on February 1,2012. As a result,the tax allocation bonds are not debt of
the primary government.
Source: Los Angeles County Auditor-Controller,Tax Division
City of Rosemeadm Department of Finance
118
CITY OF ROSEMEAD
Ratio of General Bonded Debt Outstanding
Last Ten Fiscal Years
(In Thousands, except Per Capita)
Tax Percent of
Allocation Assessed Per
Fiscal Year Bonds Value ' Capita
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
2019/20 25,090 0.51% 462
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
California.
2 The Rosemead Community Development Commission was
dissolved on February 1,2012. As a result,the tax allocation
bonds are not debt of the primary government.
Source: Los Angeles County Auditor-Controller,Tax Division
City of Rosemeadm Department of Finance
119
CITY OF ROSEMEAD
Direct and Overlapping Governmental Activities Debt
June 30,2020
Percentage
Gross Bonded Applicable Net Bonded
Debt Balance To City Debt
Overlapping Debt
*Metropolitan Water District $ 18,151,752 0.313% 56,749
Garvey SD DS 2004 Series 2006 12,339,236 50.822% 6,270,989
Garvey SD DS 2004 Series C 8,221,018 50.822% 4,178,048
Garvey SD DS 2011 Refund Bonds 2,755,000 50.822% 1,400,133
Garvey SD DS 2013 Ref Bonds 495,000 50.822% 251,567
Garvey SD DS 2014 Ref Bonds 2,845,000 50.822% 1,445,873
Garvey SD DS 2016 Series A 8,700,000 50.822% 4,421,474
Garvey SD DS 2016 Series B 10,000,000 50.822% 5,082,154
Rosemead SD DS 2011 Ref Bond 625,000 67.319% 420,742
Rosemead SD DS 2012 Ref Bonds 5,110,000 67.319% 3,439,987
Rosemead SD DS 2008 Series B 273,740 67.319% 184,278
Rosemead SD DS 2014 Ref Bonds 5,340,000 67.319% 3,594,820
Rosemead SD DS 2016 Ref Bonds 12,075,000 67.319% 8,128,736
Rosemead SD DS 2008 Series C 1,800,000 67.319% 1,211,737
Rosemead SD DS 2014 Series A 25,575,000 67.319% 17,216,764
El Monte Union HSD DS 2008 Series B 29,820,673 14.139% 4,216,411
El Monte Union HSD DS 2015 Ref Bonds 25,460,000 14.139% 3,599,845
El Monte Union HSD DS 2016 Ref DLYD DLVR 3,880,000 14.139% 548,602
El Monte Union HSD DS 2008 Series C 2,550,000 14.139% 360,550
El Monte Union HSD DS 2016 Ref Bonds 48,425,000 14.139% 6,846,917
El Monte Union HSD DS 2008 Series D 10,500,098 14.139% 1,484,632
El Monte Union HSD DS 2018 Series A 52,245,000 14.139% 7,387,036
LA CCD DS 2003,Taxable Series 2004B 2,115,000 0.291% 6,161
LA CCD DS 2001,Taxable Series 2004A 31,555,000 0.291% 91,923
LA CCD DS 2008,2009 Taxable Ser B 75,000,000 0.291% 218,482
LA CCD DS 2008,2010 Tax Ser D 125,000,000 0.291% 364,137
LA CCD Debt 2008,2010. Tax Ser E(BABS) 900,000,000 0.291% 2,621,790
LA CCD Debt 2008,2012 Series F 199,000,000 0.291% 579,707
LA CCD DS 2013 Ref Bonds 35,410,000 0.291% 103,153
LA CCD DS 2008 Series G 205,725,000 0.291% 599,297
LA CCD DS 2015 Ref Series A 1,395,190,000 0.291% 4,064,327
LA CCD DS 2015 Ref Series B 24,305,000 0.291% 70,803
LA CCD DS 2015 Ref Series C 230,015,000 0.291% 670,057
LA CCD DS 2008 Series I 197,360,000 0.291% 574,929
LA CCD DS 2016 Ref Bonds 813,785,000 0.291% 2,370,637
Pasadena CCD DS 2014 Ref Series A 12,405,000 2.390% 296,488
Pasadena CCD DS 2016 Ref Series A 54,045,000 2.390% 1,291,714
Montebello USD DS 1998 Series 1998 2,797,152 1.558% 43,591
Montebello USD DS 1998 Series 1999 5,484,723 1.558% 85,474
Montebello USD DS 1998 Series 2004 5,562,649 1.558% 86,688
Montebello USD DS 1998 Series 2002 4,860,085 1.558% 75,739
Montebello USD DS 2004 Series 2009A-2 BABS 12,640,000 1.558% 196,981
Montebello USD DS 2010 Refunding Bonds 1,200,000 1.558% 18,701
Montebello USD DS 2004 Series 2013A 16,150,000 1.558% 251,681
Montebello USD DS Ref Bond Series 2015 27,250,000 1.558% 424,662
Montebello USD DS Ref Bonds 2016 Series A 14,585,000 1.558% 227,292
Montebello USD DS 2016 Series A 79,345,000 1.558% 1,236,508
120
San Gabriel USD DS 2010 Ref Bonds 8,407,370 1.189% 99,926
San Gabriel USD DS 2008 Series B 5,705,000 1.189% 67,807
San Gabriel USD DS 2012 Ref Bond Series B 13,235,940 1.189% 157,317
San Gabriel USD DS 2008 Series C 22,851,249 1.189% 271,600
San Gabriel USD DS 2015 Ref Bond Series A 29,830,000 1.189% 354,546
Total Overlapping Debt 99,270,162
2019/20 Assessed Valuation:$4,029,492,681 After Deducting$853,981.70 Incremental Value.
Debt to Assessed Valutation Ratios:
Direct Debt 0.00%
Overlapping Debt 2.46%
Total Debt 2.46%
*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 2019/20 Lien Date Tax Rolls.
121
CITY OF ROSEMEAD
Legal Debt Margin Information
Last Ten Fiscal Years
2010/11 2011/12 2012/13 2013/14 2014/15
Assessed valuation 3,431,820,218 3,533,192,184 3,603,395,186 3,725,310,320 3,879,248,441
Conversion percentage 25% 25% 25% 25% 25%
Adjusted assessed valuation 857,955,055 883,298,046 900,848,797 931,327,580 969,812,110
Debt limit percentage 15% 15% 15% 15% 15%
Debt limit 128,693,258 132,494,707 135,127,319 139,699,137 145,471,817
Total net debt applicable to limit:
General obligation bonds - - - - -
Legal debt margin 128,693,258 132,494,707 135,127,319 139,699,137 145,471,817
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
122
2015/16 2016/17 2017/18 2018/19 2019/20
4,077,097,445 4,337,892,775 4,525,131,407 4,745,176,577.00 4,960,200,386.00
25% 25% 25% 25% 25%
1,019,274,361 1,084,473,194 1,131,282,852 1,186,294,144 1,240,050,097
15% 15% IS°/a 15% 15%
152,891,154 162,670,979 169,692,428 177,944,122 186,007,514
152,891,154 162,670,979 169,692,428 177,944,122 186,007,514
0.0% 0.0% 0.0% 0.0% 0.0%
123
CITY OF ROSEMEAD
Pledged-Revenue Coverage
Last Ten Fiscal Years
(In Thousands)
Tax Allocation Bonds
Fiscal Year
Ended Tax Debt Service
June 30 Increment Principal Interest Coverage
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
2020 3,634,145 2,205,000 1,229,000 1.06
Note: Details regarding the city's outstanding debt can be found in the notes to the fmancial
statements. Operating expenses do not include interest or depreciation expenses.
Source: City of Rosemead,Department of Finance
124
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)
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%
2019/20 54,363 1,084,896 19,956 4.20%
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
125
CITY OF ROSEMEAD
Principal Employers
Current Year and Nine Years Ago
2020 2011*
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 2 804 3.31% - 0.00%
Panda Restaurant Group, Inc. 3 604 2.49% - 0.00%
Wal-Mart 4 534 2.20% - 0.00%
Rosemead School District 5 389 1.60% - 0.00%
Target 6 320 1.32% - 0.00%
Hemetic Seal Corporation 7 131 0.54% - 0.00%
Double Tree ** 8 130 0.53% - 0.00%
University of the West 9 98 0.40% - 0.00%
Lucille's 10 95 0.39% - 0.00%
1 Based upon Employment Development Department's estimate of 24,300 residents employed in 2019-20
*Information for 2011 is not available.
** Double Tree Hotel has 130 employees, however, currently only 40 employees are actively working and 90 are furlough
employees.
Disclaimer: The City of Rosemead makes no claims concerning the acuracy of data provided nor assumes any liability resulting
from the use of information herein..
Source: City of Rosemead business license estimated data
126
CITY OF ROSEMEAD
Full-time and Part-time City Employees
by Function
Last Ten Fiscal Years
Function 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
General government 19 15 13 12 12 11 13 18 21 17
Public safety 1 42 33 15 20 18 20 21 23 28 25
Community
development 23 7 8 8 7 8 8 9 9 9
Public Works n/a 26 22 23 23 21 24 26 28 26
Parks and recreation 99 68 81 86 80 83 109 118 114 110
Total 183 149 139 149 140 143 175 194 200 187
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 of Rosemead,Finance Department
127
CITY OF ROSEMEAD
Operating Indicators
by Function
Last Ten Fiscal Years
2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
Police:
Arrests 1,888 1,842 1,186 1,356 1,585 1,339 1,046 1,256 1,817 2,649
Parking citations issued 7,515 7,797 8,765 16,110 7,863 8,047 7,676 8,086 6,244 7,898
Fire:
Number of emergency calls 2,745 2,928 2,785 2,823 3,212 3,352 3,206 3,822 2,823 2,789
Inspections 1,845 2,066 2,012 2,026 2,793 2,564 2,311 2,430 2,288 2,267
Public works:
Street resurfacing(miles) 3.5 3.6 0.9 1.6 0.6 1.0 0.7 0.8 1.0 0.0
Parks and recreation:
Number of recreation classes 617 519 638 724 839 871 873 707 631 387
Number of facility rentals 1,786 3,261 3,124 4,005 2,607 3,070 6,226 3,679 2,508 2,387
Source:City of Rosemead
128
CITY OF ROSEMEAD
Capital Asset Statistics
by Function
Last Ten Fiscal Years
2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
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 81.90 81.90 81.80 81.80 81.80
Streetlights 2,712 2,712 2,712 2,712 2,712 2,712 2,712 2,511 2,511 2,511
Traffic signals 42 42 42 42 42 41 42 42 42 42
Parks and recreation:
Parks 10 10 10 10 10 10 10 11 12 12
Community centers 2 2 2 2 2 2 2 2 2 2
Source:City of Rosemead
129
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130
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Attachment B
Rosemead Housing Development
Corporation Financial Statement
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ROSEMEAD HOUSING DEVELOPMENT CORPORATION
FOR THE YEAR ENDED JUNE 30, 2020 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, 2020
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, 2020
TABLE OF CONTENTS
Page
Number
INDEPENDENT AUDITORS' REPORT 1
BASIC FINANCIAL STATEMENTS
Statements of Net Position 3
Statements of Activities 4
Balance Sheet 5
Reconciliation of the Balance Sheet of Governmental Fund
to the Statement of Net Position 6
Statement of Revenues, Expenditures and Changes in Fund Balance 7
Reconciliation of the Statement of Revenues, Expenditures, and
Changes in Fund Balance of Governmental Fund to the
Statement of Activities 8
Notes to Financial Statements 9
REQUIRED SUPPLEMENTARY INFORMATION
Notes to Required Supplementary Information 16
Budgetary Comparison Schedule 17
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 18
•.•.•
•
••
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, 2020, 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.
Opinions
In our opinion, the financial statements referredto above present fairly, in all material respects, the
respective financial position 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
June 30, 2020, 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. PrimeGlobal
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To the Board of Directors
Rosemead Housing Development Corporation
Rosemead, California
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, 2020, 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 schedules 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's 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.
Other Reporting Required by Government Auditing Standards
In accordance with Government Auditing Standards, we have also issued our report dated
December 9, 2020 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.
44:e.1/ 54-eVotiia tee
Brea, California
December 9, 2020
2
ROSEMEAD HOUSING DEVELOPMENT CORPORATION
A COMPONENT UNIT OF THE CITY OF ROSEMEAD,CALIFORNIA
STATEMENT OF NET POSITION
JUNE 30,2020
Governmental
Activities
Assets:
Cash and investments $ 422,254
Accounts receivable 171
Capital assets,net of depreciation 6,662,216
Total Assets 7,084,641
Liabilities:
Accounts payable 25,123
Deposits payable 42,431
Total Liabilities 67,554
Net Position:
Investment in capital assets 6,662,216
Unrestricted 354,871
Total Net Position $ 7,017,087
The notes to financial statements are an integral part of this statement.
3
ROSEMEAD HOUSING DEVELOPMENT CORPORATION
A COMPONENT UNIT OF THE CITY OF ROSEMEAD,CALIFORNIA
STATEMENT OF ACTIVITIES
FOR THE YEAR ENDED JUNE 30,2020
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 $ 1,129,487 $ 463,131 $ 453,238 $ - $ (213,118)
Total Governmental Activities $ 1,129,487 $ 463,131 $ 453,238 $ - (213,118)
General Revenues:
Investment Income 76
Other 4,158
Total General Revenues 4,234
Change in Net Position (208,884)
Net Position at the Beginning of the Year 7,225,971
Net Position at the End of the Year $ 7,017,087
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
BALANCE SHEET
GOVERNMENTAL FUND
JUNE 30,2020
General Fund
Assets:
Cash and investments $ 422,254
Accounts receivable 171
Total Assets $ 422,425
Liabilities and Fund Balance:
Liabilities:
Accounts payable $ 25,123
Deposits payable 42,431
Total Liabilities 67,554
Fund Balances:
Unassigned 354,871
Total Fund Balances 354,871
Total Liabilities and Fund Balance $ 422,425
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
RECONCILIATION OF THE BALANCE SHEET OF GOVERNMENTAL FUNDS
TO THE STATEMENT OF NET POSITION
JUNE 30,2020
Fund balances of governmental funds $ 354,871
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. 6,662,216
Net Position of Governmental Activities $ 7,017,087
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
STATEMENT OF REVENUES,
EXPENDITURES AND CHANGES IN FUND BALANCES
GOVERNMENTAL FUND
FOR THE YEAR ENDED JUNE 30,2020
General Fund
Revenues:
Intergovernmental $ 453,238
Rental Income 463,131
Investment Income 76
Other 4,158
Total Revenues 920,603
Expenditures:
Current:
Operating 497,114
Administrative services paid to City of Rosemead 226,200
Facility rent paid to City of Rosemead 183,400
Total Expenditures 906,714
Net Change in Fund Balance 13,889
Fund Balance at the Beginning of the Year 340,982
Fund Balance at the End of the Year $ 354,871
The notes to the financial statements are an integral part of this statement.
7
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 30,2020
Net change in fund balances-total governmental funds $ 13,889
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 $ (208,884)
The notes to financial statements are an integral part of this statement.
8
ROSEMEAD HOUSING DEVELOPMENT CORPORATION
A COMPONENT UNIT OF THE CITY OF ROSEMEAD, CALIFORNIA
NOTES TO FINANCIAL STATEMENTS
JUNE 30,2020
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.
9
ROSEMEAD HOUSING DEVELOPMENT CORPORATION
A COMPONENT UNIT OF THE CITY OF ROSEMEAD, CALIFORNIA
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
JUNE 30,2020
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 government's citizenry if that money is restricted to a particular program.
Program revenues are netted with program expenses in the statement of activities to
present the net cost of each program.
Amounts paid to acquire capital assets are capitalized as assets in the government-wide
financial statements, rather than reported as expenditures. Proceeds of long-term debt
are recorded as a liability in the government-wide financial statements, rather than as an
other financing source. Amounts paid to reduce long-term indebtedness of the reporting
government are reported as a reduction of the related liability, rather than as an
expenditure.
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.
10
ROSEMEAD HOUSING DEVELOPMENT CORPORATION
A COMPONENT UNIT OF THE CITY OF ROSEMEAD, CALIFORNIA
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
JUNE 30, 2020
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 and the CDBG fund as its major funds.
11
ROSEMEAD HOUSING DEVELOPMENT CORPORATION
A COMPONENT UNIT OF THE CITY OF ROSEMEAD, CALIFORNIA
NOTES TO FINANCIAL STATEMENTS(CONTINUED)
JUNE 30,2020
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.
12
ROSEMEAD HOUSING DEVELOPMENT CORPORATION
A COMPONENT UNIT OF THE CITY OF ROSEMEAD, CALIFORNIA
NOTES TO FINANCIAL STATEMENTS(CONTINUED)
JUNE 30,2020
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.
13
ROSEMEAD HOUSING DEVELOPMENT CORPORATION
A COMPONENT UNIT OF THE CITY OF ROSEMEAD, CALIFORNIA
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
JUNE 30,2020
Note 2: Cash and Investments
Cash and investments at June 30,2020 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, 2020, 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, 2020. 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 $1,339,504 for the Angelus Senior Housing facility at June 30, 2020. 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 $2,512,507 for the Garvey Senior Housing facility at
June 30,2020.The Corporation paid$91,200 and$92,200 in lease payments to the City during
the year ended June 30, 2020 for the Angelus and Garvey Senior Housing facilities,
respectively.
14
ROSEMEAD HOUSING DEVELOPMENT CORPORATION
A COMPONENT UNIT OF THE CITY OF ROSEMEAD, CALIFORNIA
NOTES TO FINANCIAL STATEMENTS(CONTINUED)
JUNE 30,2020
Note 4: Capital Assets
During the year ended June 30, 2020, the changes in capital assets were as follows:
Balance at Balance at
June 30, 2019 Additions Deletions June 30, 2020
Govemmental 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 (4,157,608) (222,773) - (4,380,381)
Furniture and equipment (128,544) - - (128,544)
Total Accumulated
Depreciation (4,286,152) (222,773) - (4,508,925)
Governmental Activities
Capital Assets, Net $ 6,884,989 $ (222,773) $ - $ 6,662,216
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, 2020.
15
ROSEMEAD HOUSING DEVELOPMENT CORPORATION
A COMPONENT UNIT OF THE CITY OF ROSEMEAD, CALIFORNIA
NOTES TO REQUIRED SUPPLEMENTARY INFORMATION
JUNE 30,2020
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.
16
ROSEMEAD HOUSING DEVELOPMENT CORPORATION
A COMPONENT UNIT OF THE CITY OF ROSEMEAD,CALIFORNIA
BUDGETARY COMPARISON SCHEDULE
FOR THE YEAR ENDED JUNE 30,2020
Variance with
Final Budget
Budget Amounts Actual Positive
Original Final Amounts (Negative)
Budgetary Fund Balance,July 1 $ 340,982 $ 340,982 $ 340,982 $ -
Resources(Inflows):
Intergovernmental 451,600 451,600 453,238 1,638
Rental income 454,600 454,600 463,131 8,531
Investment income - - 76 76
Miscellaneous 4,200 4,200 4,158 (42)
Amounts Available for Appropriations 1,251,382 1,251,382 1,261,585 10,203
Charges to Appropriations(Outflows):
Operating costs 500,800 500,800 497,114 3,686
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 910,400 910,400 906,714 3,686
Budgetary Fund Balance(Deficit),June 30 $ 340,982 $ 340,982 $ 354,871 $ 13,889
The notes to required supplementary information are an integral part of this schedule.
17
••••
:•
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 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, 2020, and the
related notes to the financial statements, which collectively comprise the Corporation's basic financial
statements, and have issued our report thereon dated December 9,2020.
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) as a basis for designing 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 entity'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 financial statements. 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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Lance,Soll&Lunghard,LLP 203 N.Brea Blvd.,Suite 203 1 Brea,CA92821 1 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 Corporation'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
December 9,2020
19