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CC - Item 4G - Annual Report Of The Rosemead Community Development Commission For Fiscal Year 01-02qD TO: HONORABLE MAYOR AND MEMBERS ROSEMEAD CITY COUNCIL FROM: BILL CROWE, CITY MANAG R~ DATE: December 10, 2002 RE: ANNUAL REPORT OF THE ROSEMEAD COMMUNITY DEVELOPMENT COMMISSION FOR FISCAL YEAR 2001-2002 Pursuant to California Redevelopment Law, the Rosemead Community Development Commission is required to submit an Annual Report of its activities each year to the City Council. The attached Annual Report for fiscal year 2001-02 has been prepared by staff and meets all of the requirements of law. RECOMMENDATION It is recommended that the Council accept the Annual Report. COUKIL KGE~yDA DEC 10 2002 ITEM RIO. .LAG 7'j ANNUAL REPORT FOR FISCAL YEAR 2001 - 2002 ROSEMEAD COMMUNITY DEVELOPMENT COMMISSION Introduction Every redevelopment agency is required to submit to the legislative body and the State Controller an annual report for its approval. Generally, the annual report must contain the following information. A. Audit An independent financial audit, including an opinion as to the agency's compliance with applicable laws, regulations and administrative requirements. The audit must also report on the agency's financial activities with respect to money required to be held in a separate low- and moderate-income housing fund pursuant to California Redevelopment Law (the "CRL" B. Fiscal Statement A fiscal statement containing information on the amount of indebtedness, the amount of tax increment revenues received by the Agency, the amount of tax increment revenue paid to any taxing entities and other information required by the CRL. C. Actions and Expenditures in Alleviating Blight A description of the agency's progress, including specific actions and expenditures, in alleviating blight in the fiscal year must be reported. D. Housing Activities The CRL specifies the reporting requirements for an agency's housing activities, including displacement. The housing report must contain information for all housing activities within the project area, whether or not they are funded exclusively by other public agencies. The Annual Report The Rosemead Community Development Commission (the "Commission") has prepared its Annual Report for the 2001-2002 Fiscal Year. This Report must be submitted to the City Council of the City of Rosemead for its review and approval. A. Independent Financial Audit McGladrey & Pullen, LLP, Certified Public Accountants performed an audit of the general-purpose financial statements of the Rosemead Community Development Commission for the fiscal year ending June 30, 2002. In their opinion, the general purpose financial statements present fairly, in all material respects, the financial position of the Commission as of June 30, 2002, and the results of its operations for the year then ended, in conformity with generally accepted accounting principles. Rosemead Redevelopment Agency ♦ 1 McGladrey & Pullen performed tests of the Commission's compliance with certain provisions of laws, regulations, contracts and grants, noncompliance with which could have a direct and material effect on the determination of financial statement amounts. The results of their tests disclosed no instances of noncompliance that are required to be reported under Government Auditing Standards. In planning and performing their audit, McGladrey & Pullen considered the Commission's internal control over financial reporting. This consideration would not necessarily disclose all matters in internal control over financial reporting that might be material weaknesses. A material weakness is a condition in which the design or operation of one or more internal control components does not reduce to a relatively low level the risk that misstatements in amounts that would be material in relation to the financial statements being audited may occur and not be detected within a timely period by employees in the normal course of performing their assigned functions. McGladrey & Pullen noted no matters involving internal control and its operations that they consider to be material weaknesses as defined above. A copy of the Annual Financial Report for Fiscal Year ended June 30, 2002 is attached to this Report as Exhibit A. B. Redevelopment Agencies Financial Transactions Report The Commission's Financial Transactions Report has been prepared by the Commission's Fiscal Officer, Karen Ogawa, and submitted to the State Controller's office pursuant to CRL. This report provides all of the financial information required for the Annual Report. A copy of the Report is attached as Exhibit B. C. Actions and Expenditures in Alleviating Blight Pursuant to the Commission's approved Implementation Plan for Project Area No. 1 for Fiscal Years 1999-00 through 2003-04, the Commission's progress in alleviating blight is described by the following actions and expenditures of the Commission. 1. The Rosemead Community Development Commission, through the Rosemead Housing Development Corporation (the "RHDC"), continued construction of the 72-unit Garvey Senior Citizens Residential Complex. The four (4)-story housing project is being developed in conjunction with a community center occupying a portion of the site. The community center will provide recreation and meeting facilities for the occupants of the senior housing project and the overall community. The total square footage of the complex is approximately 67,500 square feet for the housing portion and 25,000 for the community center. The project is expected to be completed by the end of the 2002 calendar year. 2. A First-Time Homeowner Purchase Program is operated by the RHDC using Housing Set-Aside funds. Financial assistance is made available in the form of deferred payment and low-interest loans for the purchase of single-family homes or condominium units. The loan Rosemead Community Development Commission ♦ 2 funds are used to lover the difference between the purchase price of a home (market value) and the sales price that would be affordable to the purchaser. The loans are used to provide down payment assistance for households qualifying under guidelines that have been established by the RHDC. During this reporting period, four loans totaling $67,705 were made to low- and moderate-income households. 3. The Commission provided numerous capital improvements for the community including, improvements to the Walnut Grove bridge over Alhambra Wash, Garvey Ave bridge over Rio Hondo flood channel, Hellman Avenue bridge over Alhambra Wash, and a traffic signal at the Garvey Avenue Senior Housing Project. D. Redevelopment Agency Loans The Commission has no loans that are fifty thousand dollars ($50,000) or more, that are in default or not in compliance with the terms of the loan approved by the Commission. E. Agency Owned Property The Commission owned two properties at the beginning of the fiscal year. One of these properties, located at 9100 Garvey Avenue, is currently being developed as the Garvey Avenue Senior Citizens Residential Complex. The Commission has since relinquished title to this property to the City of Rosemead. The second property is located at 9734 Abilene Street. Improvements on the property include a blighted single family home. This property was purchased in December 2000, for a purchase price of $283,200. The Commission is currently considering various redevelopment options for this property. The Commission purchased one property during the 2001-2002 fiscal year for a purchase price of $65,043.26. This property is located at 4623 Earle Avenue and was vacant when purchased. The Agency has invited interested developers, including one nonprofit housing developer that indicated interest in the property, to submit purchase offers. Displacement The total number of non elderly and elderly households, including separate subtotals of very low income households, other lower income households, and persons and families of moderate income, that were displaced or moved from their dwelling units as a part of a redevelopment project of the Commission during Fiscal Year 2001-02. Income Number Very Low 0 Other Low 0 Moderate 0 Rosemead Community Development Commission ♦ 3 The total number of non elderly and elderly households, including separate subtotals of very low income households, other lower income households, and persons and families of moderate income, that the Commission estimates will be displaced or will move from their dwelling units as a part of a redevelopment project during Fiscal Year 2002-03. Income Number Very Low Other Low Moderate 2. Demolition and Removal The total number of dwelling units housing very low income households, other lower income households, and persons and families of moderate income, respectively, which have been destroyed or removed from the low or moderate income housing market during reporting year as part of a redevelopment project of the Commission. Income Number Very Low 0 Other Low 0 Moderate 0 3. Construction and Rehabilitation The total number of Commission-assisted dwelling units which were constructed, rehabilitated, acquired or subsidized during the Fiscal Year 2001-02 for occupancy at an affordable housing cost by elderly persons and families, but only if the units are restricted by agreements or ordinance for occupancy by the elderly, and very low income households, other lower income households, and persons and families of moderate income, respectively, specifying those units which are not currently so occupied, those units which have replaced,-destroyed or removed units pursuant to the CRL, and the length of time any Commission assisted units are required to remain available at an affordable cost. Income Number Very Low Other Low Moderate The total number of new or rehabilitated units subject to Health & Safety Code Section 33413(b) (2) (regarding the production of affordable units Rosemead Community Development Commission ♦ 4 resulting from public or private construction), including separate subtotals of the number originally affordable to and currently occupied by, elderly persons and families, but only if the units are restricted by agreement or ordinance for occupancy by the elderly, and by very low income households, other lower incomes, and persons and families of moderate income, respectively, and the length of time these units are required to remain available at an affordable cost. Income Number Very Low 0 Other Low 0 Moderate 0 Rosemead Community Development Commission ♦ 5 Exhibit A Annual Financial Report ROSEMEAD COMMUNITY DEVELOPMENT COMMISSION FINANCIAL AND COMPLIANCE REPORT JUNE 30, 2002 CONTENTS INDEPENDENT AUDITOR'S REPORT ON THE FINANCIAL STATEMENTS AND SUPPLEMENTARY INFORMATION I FINANCIAL STATEMENTS Combined balance sheet-all fund types and account groups 2 and 3 Combined statement of revenues, expenditures and changes in fund balances- all governmental fund types 4tand 5 . Combined statement of revenues, expenditures and changes in fund balances= budget and actual-all governmental fund types 6-8 Notes to financial statements 9-19 SUPPLEMENTARY INFORMATION Combining balance sheet-special revenue funds 20 Combining statement of revenues, expenditures and changes in fund balances- zI special revenue funds Computation of low-moderate income housing excess/surplus funds -22 and 23 INDEPENDENT AUDITOR'S REPORT ON COMPLIANCE AND ON INTERNAL CONTROL OVER FINANCIAL REPORTING BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS 24 and 25 McGLADREY& PULLEN, LLP ® Certified Public Accountants INDEPENDENT AUDITOR'S REPORT ON THE FINANCIAL STATEMENTS AND SUPPLEMENTARY INFORMATION To. the Governing Board Rosemead Community Development Commission Rosemead, California international We have audited the accompanying general-purpose financial statements of the Rosemead Community Development Commission (the Commission), a component unit of the City of Rosemead, California, as of and for the year ended June 30, 2002, as listed in the table of contents. These general-purpose financial statements are the responsibility of the Commission's management. Our responsibility is to express an opinion on these general-purpose financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material' misstatement. An audit includes examining, on a test basis, evidence-:supporting thh~amounts. and disclosures in the financial statements. An audit also includes assessing the, accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. In our opinion, the general-purpose financial statements referred to above present fairly, in all material respects, the financial position of the Commission as of June 30, 2002, and the results of its operations for the year then ended, in conformity with accounting principles generally aocepted in the United States of America. In accordance with Government Auditing Standards, we have also issued a report dated October 3, 2002 on our consideration of the Commission's internal control over financial reporting and our tests of its compliance with certain provisions of laws, regulations, contracts and grants. That report is an integral part of an audit performed in accordance with Government Auditing Standards and should be read in conjunction with this report in considering the results of our audit. . Our audit was made for the purpose of forming an opinion on the general-purpose financial statements taken as a whole. The combining fund statements and the computation of low-moderate housing excess/surplus funds listed in the table of contents as supplementary information are presented for purposes of additional analysis and are not a required part of the general-purpose financial statements of the Commission. Such information has been subjected to the auditing procedures applied in the audit of the general-purpose financial statements and, in our opinion, is fairly presented in all material respects in relation to the general-purpose financial statements taken as a whole. Pasadena, California October 3; 2002 McGladrey & Pullen. LLP is an independent member firm of RSM International, an affiliation of independent accounting and consulting firms. THIS PAGE IS INTENTIONALLY LEFT BLANK ~e4't9-~~~rL1r •T. f. f Account Groups Totals (Memorandum Only) General General Fixed Assets Long-term Debt 2002 . 2001 $ $ $ 12,262,667 ' $ 20.232,690 177,473 281,669 2,322,025 2,323,333 4,000 - 307,334 5 20,113,289 - 20,113,289 10,940,994 2,354,858 2,354,858 2,356,167 31,900,142 31,900,142 32,268,833 T In 1 1a 980 ¢ 44 955 n00 R 69.441.789 $ 68.403.691 $ $ $ 34,255,000 1,945,636 307.334 34,255;000 36,507,970 35,093,157 20,113,289 20,113,289 10,940,994 2,354,858 ' '#`"""'2,,56;167- 696,354 6,136,067. 3 Totals (Memorandum Only) 2002 2001 $ 3,197,754 $ 2,945,877 55,795 859,373 1,731.581 58,346 7,232 4,115,473 4,740,485 3,102,198 875,320 246,123 677,773 88,000 73,341 1,113,695 1,126,458 60,000 60,000 6,782,411 502,979 370,000 345,000 . 1,902,057 1,922, 847 13,664,484 5,583,718 (9,549,011) (843,233) 9,942,837 3,170,951 (9,942,837) (3.170,951) (9,549,011) (843,233) 22,369,540 23,212,774 $ 12,820,529 $ 22,369,541 z. 5 Debt Service Funds Capital Project Funds Variance Variance _ Favorable Favorable Budget Actual (Unfavorable) Budget Actual (Unfavorable) $ $ $ $ 2,900,000 $ 3,197,754 $ 297,754 2,716,250 .(2,716,250) 135,000 135,101 101 250,000 496,307 246,307 135,000 135,101 101 5,866,250 3,694,061 (2,172,189) 6,568,083 3,102,198 3,465,885 135,500 73,308 62,192 957,000 1,023,695 (66,695) 370,000 370,000 2,135,647 2,135,647 6,869,550 (6,869,550) (2,282,840) - 2,282,840 (7,462,532) (3,285,503) 4,177,029 0 I)xI) R11M 1 T5 647 4'41 R_487 (592.982) (3285.503) (2,692,521) $ (4,430,680) (1,309) $ 4,429,371 $ (2,387,315) (3,790,643) $ (1,403,328) 2,356,167 13,546,692 $ 2,354,858 $ 9,756,049 7 ROSEMEAD COMMUNITY DEVELOPMENT COMMISSION NOTES TO FINANCIAL STATEMENTS Note 1. Nature of Operations, Reporting Entity, Fund Accounting and Significant Accounting and Reporting Policies Nature of operations: The Rosemead Redevelopment Agency was established in June 1972 pursuant to State of California Health and Safety Code Section 33000 entitled Community Redevelopment Law. The Agency's name was changed to the Rosemead Community Development Commission (the Commission) in January 2002. Its purpose is to finance street, park and utility improvements. It also acquires and constructs major capital facilities all within the Rosemead Project Area No. 1. The Commission is a component unit of the City of Rosemead (the City), California, and is included in the general-purpose financial statements of the City. The Commission has the same fiscal year as the City. The financial statements contain' information for the Commission only. The City financial statements can be, obtained from the Finance Department of the City. Reporting entity: As required by accounting principles generally accepted in the United States-of America (GAAP), these financial statements present the government and its component unit, an entity for which the government is considered to be financially accountable. A blended component unit, although a legally separate entity, is in substance, part of the government's operations and, therefore, data from this unit is combined with data of the primary government. The blended component unit included ,in.tthe, Commission's reporting entity is the Rosemead Housing Development Corporation (the Corporation). The Corporation is'a California nonprofit public. benefit corporation organized under Section 501(c)(3) of the Internal Revenue Code. The Corporation accounts for the construction, financing and operations of low-moderate income housing. The Corporation's financial statements can be obtained from the Finance Department of the City. Fund accounting: The accounts of the Commission are organized on the basis of funds or account groups, each of which is considered to be a separate accounting entity. The operations of each fund are accounted for by providing a separate-setof-self-balancing accounts that comprise its assets, liabilities, equity, revenues and expenditure's:. The financial statements of the Commission have been prepared in conformity with GAAP as applied to government units. The Governmental Accounting Standards Board (GASB) is the accepted standard-setting body for establishing governmental accounting and financial reporting principles. The various funds and account groups are presented as follows: Governmental fund types: . The Special Revenue Funds account for the proceeds of specific revenue resources (other than major capital projects) that are legally restricted to expenditures for specified purposes. The Special Revenue Funds and their purposes are as follows: Low-Moderate Income Housing Set-Aside Fund-Accounts for the 20% of gross property tax increment revenue received by the Commission to fund future projects involving the replacing or rehabilitation of low-moderate income housing within City limits. Rosemead Housing Development Corporation-Accounts for the construction and financing of low-moderate income housing. ROSEMEAD COMMUNITY DEVELOPMENT COMMISSION NOTES TO FINANCIAL STATEMENTS Note 1. Nature of Operations, Reporting Entity, Fund Accounting and Significant Accounting and Reporting Policies, Continued Property and equipment: All property and equipment of the Commission are accounted for in the General Fixed Assets Account Group. Property and equipment items acquired or constructed for general governmental operations are recorded as expenditures in the fund making the expenditure and capitalized in the General Fixed Assets Account Group. All general fixed assets that were purchased or constructed are stated at cost. Assets acquired by gift or bequest are recorded at their fair market value at the date of transfer. No depreciation is recorded on general fixed assets. Fund balances: The reserved portion of the fund balances represents that amount which has been legally identified for the specific purposeor it represents that amount which is not available to liquidate current liabilities. The unreserved portion represents the amount available for future appropriations. Designated fund balances represent tentative plans for future use of financial resources. Budget matters: Budgets presented. in this report for comparison to actual amounts are presented in accordance with GAAPJ'he modified accrual basis of accounting is employed in the preparation of the budget. Reported budget,amounts,represent thetoriginal adopted budget as amended. The legal level of budgetary control is at the' department level. Expenditures did not exceed appropriations for any department for the fiscal year ended June 30, 2002. The governing council made two significant budgetary appropriations throughout the year totaling approximately $227,000. Unexpended budgeted amounts lapse at the end of the budget year. "Memorandum Only'.' total columns: Included on the combined financial statements are total columns captioned "Memorandum--Only"-to-indicate that they are presented only for informational purposes. Adjustments to eliminate, interfund transactions have not been recorded in arriving at such amounts and the memorandum totals are not intended to fairly present the financial position or results of operations of the reporting entity taken as a whole. Additionally, the 2001 totals presented in the "Memorandum Only" columns are included to provide a summarized comparison with comparable 2002 amounts and are not intended to present all information necessary for a fair presentation of financial position and results of operations in. accordance with accounting principles generally accepted in the United States of America. I1 ROSEMEAD COMMUNITY DEVELOPMENT COMMISSION NOTES TO FINANCIAL STATEMENTS Note 2. Cash and investments, Continued Investments: State statutes authorize the Commission to invest any available funds in securities issued or guaranteed by the United States Treasury or agencies of the United States, bank certificates of deposit, bankers acceptances, negotiable certificates of deposit, the State- Treasurer's Investment Pool (LAIF), repurchase agreements, commercial paper and bonds, and registered warrants or treasury notes of the State of California and its local agencies. An advisory board has been established to' monitor LAIF's compliance with regulations and investment alternatives established by the State. The Commission participates in a voluntary external investment pool, LAIF, which is managed by the State Treasurer. LAIF has oversight provided by the Local Agency Investment Advisory Board. The Board consists of five members as designated by State statute. The Chairman of the Board is the State Treasurer or his designated representative. The fair value. of the Commission's shares in the pool approximates the fair value of the position in the pool. At June 30, 2002, the Commission's pooled investments in LAIF in the amount of $9,260,756 are not subject to custodial credit risk categorization. The total estimated fair value invested by all public agencies in LAIF. is $48,082,558,174. Of that amount, 100% is invested in nonderivative financial products. Restricted. cash'and investments: All restricted cash and investments of the Commission are held by trustees or an escrow agent. The California Government Code provides that these funds, in the absence of specific governing provisions to the contrary, may be invested in accordance with the resolutions or indentures that specify the allowable investment of bond proceeds and funds earmarked for bond repayment. The Commission's: investments, including restricted cash and investments, as of June 30, 2002, are categorized:imthe,following- schedule to give an indication of the level of risk assumed by the entity at year end:. + Category 1 2 3 Uncategorized Balance Investment Investment in State Treasurer's Investment Pool $ $ . $ - $ 9,260,756 $ 9,260,756 Restricted cash and investments, guaranteed investment contract - 2,322,025 2,322,025 Total investments $ $ $ - $11,582,781 $ 11,582,781 13 ROSEMEAD COMMUNITY DEVELOPMENT COMMISSION NOTES TO FINANCIAL STATEMENTS Note 4. Property and Equipment, Continued The Senior Citizen Housing project construction was started during the fiscal year ended June 30, 2001, whereby approximately $7,316,000 of costs was incurred through June 30, 2002. The total estimated costs to complete the Senior Citizen Housing project as of June 30, 2002 is approximately $121,000. The Community Center project construction began during the fiscal year ended June 30, 2001. Of the $5,369,000 in costs incurred through June 30, 2002, the Commission and the City paid for approximately $2,987,000 and $2,382,000, respectively. The total estimated cost to complete the Community Center project as of June 30, 2002 is approximately $394,000. Note 5. Long-term Debt The following is a summary of general long-term debt transactions for the year ended June 30, 2002: Tax Allocation Tax Allocation _Balance,'July`I; 2001 Payments of principal Balance, June 30, 2002 Bonds Bonds Series 1993A Series 1993B Total $ 34,275,000 $ 350,000 . $ 34,625,000 . (20,000) (350,000) (370,000) $ 34,255,000 $ - $ 34,255,000 In November 1993, the Commission issued tax allocation bonds amounting to $34,275,000 (Series ;,1993A) and taxable tax allocation refunding bonds amounting to $2,435,000 (Series 1993B) to finance a portion. of the cost of.the redevelopment area known as Project Area No. 1. The bonds bear interest ranging from 4.6% to 5.6% and 5.2% to 5.9% for Series 1993A and B, respectively. Series 1993A bonds mature after October 1, 2001 and before October 1, 2033, and Series 1993B bonds matured on October 1, In addition, the 1993 Series A bond issue reallocated $6,813,850 of proceeds from the 1991 bond issue deposited in the Low-Moderate Income Housing Set-Aside Fund. in October 1991. The reallocation had the effect of satisfying the present value effect of the $423,574 borrowed from the Educational Revenue Augmentation Fund (ERAF) in fiscal year ended June 30, 1993 and satisfying the present value effect of the set-aside requirements as follows: $812,342 for fiscal year ended June 30, 1992, $847,147 for fiscal year ended June 30, 1993 and $469,142 for each of the fiscal years ended June 30, 1997 through June 30, 2022. Additional low-moderate income housing set-aside commitments are addressed in Note 7. 15 ROSEMEAD COMMUNITY DEVELOPMENT COMMISSION NOTES TO FINANCIAL STATEMENTS Note 7. Commitments and Contingent Liabilities, Continued To help fund the completion of the Senior Citizen Housing project construction (see Note 4), the Capital Projects Fund transferred an additional $849,863 to the Low-Moderate Income Housing Set-Aside Fund during the fiscal year ended June 30, 2002, over and above the 20% requirement of $299,993. This additional amount, which is considered an advance on future set-aside requirements, will be deducted from future transfers for the set-aside over the next three years. Advance agreement: In February 1995, the Commission approved an agreement with a local utility company to advance the utility company $117,600 required to install water distribution mains within the Commission redevelopment area. The agreement remains on hold by the Commission as of October 3, 2002. Note 8. Property Management and Operations The Commission, through the Corporation, has an agreement with a management company, dated July 1994, to operate the development housing. This agreement is 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 patd to the management company were $18,600 during fiscal year ended June 30, 2002. Note 9. Commitment to Purchase Furniture In June 2002, the Commission and Corporation entered into a contract to purchase furniture, fixtures and equipment for the Senior Citizen Housing and Community Center projects. As of June 30, 2002, no costs .._..~„=,.__--were-incurred on the-contract. The total estimated cost of purchase is approximately $243,000. Of this amount, the Commission and the Corporation will pay for $117,000 and $126,000, respectively. Note 10. Subsequent Event In August 2002, the Corporation entered into a 55-year lease agreement with the City for the land on which the Garvey Senior Citizen Housing facility is located, expiring August 2056. The Corporation will pay $72,000 annually for the lease. Total lease commitments as of August 2002 are $3,960,000. Note 11. Pronouncements Issued but Not Yet Adopted Governmental Accounting Standards Board Statement No. 34: Beginning with the fiscal year ending June 30, 2003, the Commission will adopt the provisions of GASB Statement No. 34, Basic Financial Statements-and Management's Discussion and Analysis for State and Local Governments. This Statement affects the manner in which the Commission records transactions and presents financial information. State and local governments have traditionally used a financial reporting model substantially different from the one used to prepare private-sector financial reports. 17 ROSEMEAD COMMUNITY DEVELOPMENT COMMISSION NOTES TO FINANCIAL STATEMENTS Note 11. Pronouncements Issued but Not Yet Adopted, Continued Governmental Accounting Standards Board Interpretation No. 6: Beginning with the fiscal year ending June 30, 2003, the Commission will also be adopting the provisions of GASB Interpretation No. 6, Recognition and Measurement of Certain Liabilities and Expenditures in Governmental Fund Financial Statements. This Interpretation clarifies the application of standards for modified accrual recognition of certain liabilities and expenditures in areas where differences have arisen, or could arise, in interpretation and practice. This Interpretation impacts the fund level financial statements (governmental funds only, not proprietary or fiduciary funds) required by GASB Statement No. 34 but has no direct impact on the government-wide financial statements. Accordingly, the Commission has not recognized the current portion of certain long-term liabilities and related expenditures in the Governmental Fund financial statements for amounts not considered to be due and payable as of June 30, 2002. 19 ROSEMEAD COMMUNITY DEVELOPMENT COMMISSION COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES SPECIAL REVENUE FUNDS Year Ended June 30, 2002 - ' Revenues: Use of money and property Other Total revenues Expenditures: Current: Operating Professional fees City administrative services Facility charge paid to the City Capital outlay Total expenditures Revenues over (under) expenditures Other financing sources (uses): Operating transfers: From other funds (To) other funds Total other financing sources (uses) Revenues and other _ financing sources over (under) expenditures and other financing uses Fund balance, beginning Fund balance, ending Rosemead Low-Moderate Housing Income Housing Development Totals Set-Aside Fund Corporation 2002 2001 $ 67,765 $ 160,200 $ 227,965 $ 497,070 - 58,346 58,346 7,232 - 246,123 " 246,123 174,794 - 14,692 14,692 23,513 - 90,000 90,000. 90.000 - 60,000 60,000 60,000 6,782,411 6,782,411 502,979 67,765 (6,974,680) (6,906,915) (346,984) 1,149,856 6,657,334 7,807,190 1,040,409 (6,657,334) (6,657,334) (800.000) (5,507,478) 6,657,334 1,149,856 240,409 (5,439,713) (317,346) (5,757,059) (106,575) 6,136,067 330,614 6,466,681 6,573,256 $ 696,354 $ 13,268 $ 709,622 $ 6,466,681 21 ROSEMEAD COMMUNITY DEVELOPMENT COMMISSION COMPUTATION OF LOW-MODERATE INCOME HOUSING EXCESS/SURPLUS FUNDS, CONTINUED Year Ended June 30, 2002 Project Area 1 Reconciliation to Ending Fund Balance Ending GAAP fund balance Available fund balance-end of year above Add unavailable funds-end of year Land held for resale Rehabilitation loans ERAF loan receivable - Set-aside deferrals Other: Unspent bond proceeds Total unavailable funds $ 696,354 696,354 696,354 $ 696,354 23 11 McGLADREY& PULLEN, LLP RBIW ® Certified Public Accountants international INDEPENDENT AUDITOR'S REPORT ON COMPLIANCE AND ON INTERNAL CONTROL OVER FINANCIAL REPORTING BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENTAUDITING STANDARDS To the Governing Board Rosemead Community Development Commission Rosemead, California We have audited the general-purpose financial statements of the Rosemead Community Development Commission (the Commission), a component unit of the City of Rosemead, California, as of and for the year ended June 30, 2002, and have issued our report thereon dated October 3, 2002. 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. Compliance As part of obtaining. reasonable assurance about whether the Commission's financial statements are free of material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts and grants, noncompliance with which could have a direct and material effect on the determination of financial statement amounts. This included those provisions of laws and regulations identified in the Guidelines for Compliance Audits of California Redevelopment Agencies, issued'bythe State Controller and as interpreted in the Suggested Auditing Procedures for Accomplishing Compliance Audits of California. Redevelopment Agencies issued by the Governmental Accounting and Auditing Committee of the California Society of Certified Public Accountants. However, providing an opinion, on compliance with those provisions was not an objective of our audit and, accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance that are required to be reported under Government Auditing Standards. Internal Control over Financial Reporting In planning and performing our audit, we considered the Commission's internal control over financial reporting in order to determine our auditing procedures for the purpose of expressing our opinion on the financial statements and not to provide assurance on internal control over financial reporting. Our consideration of internal control over "financial reporting would not necessarily disclose all matters in internal control over financial reporting that might be material weaknesses. A material weakness is a condition in which the design or operation of one or more internal control components does not reduce to a relatively low level the risk that misstatements in amounts that would be material in relation to the financial statements being audited may occur and not be detected within a timely period by employees in the normal course of performing their assigned functions. We noted no matters involving internal control and its operations that we consider to be material weaknesses as defined above. - 24 t McGladrey & Pullen, LLP is an independent member Linn of RSM International, an affiliation of independent accounting and consulting firms. This report is intended for the information of the Governing Board and management of the Commission and is not intended to be and should not be used by anyone other than those specified parties. Pasadena, California October 3, 2002 25 Exhibit B Community Development Commission Financial Transactions Report REDEVELOPMENT AGENCIES FINANCIAL TRANSACTIONS REPORT COVER PAGE Rosemead Redevelopment Agency Fiscal Year 2002 ID Number: 13981974600 Sub by' Signature KAREN OGAWA Name (Please Print) FINANCE DIRECTOR Title 12-05-02 Date Per Health and Safety Code section 33080, this report is due within six months after the end of the fiscal year. The report is to include two (2) copies of the agency's component unit audited financial statements, and the report on the Status and Use of the Low and Moderate Income Housing Fund (HCD report). To meet the filing requirements, all portions must be received by the California State Controllers Office. To file electronically: 1. Complete all forms as necessary. 2. Transmit the completed output file using a File Transfer Protocol (FTP) program or via diskette. 3. Sign this cover page and mail to either address below with 2 audits and the HCD report. To file a paper report: 1. Complete all forms as necessary. ' 2. Sign this cover page, and mail complete report to either address below with 2 audits and the HCD report. Report will not be considered filed until receipt of this signed cover page. Mailing Address: State Controller's Office Division of Accounting and Reporting Local Government Reporting Section P. O. Box 942850 Sacramento, CA 94250 Express Mailing Address: State Controller's Office Division of Accounting and Reporting Local Government Reporting Section 3301 C Street, Suite 700 Sacramento, CA 95816 I ,w g,,rn:, ° iv n 3 N N N ~ ~ 1~p tm0 b s" }a;V m N m N ~o N ~ a 6'PY f1 J J J "w ~ ~ ~ S9 C ~ - O ~ a a kdTT ~ = N F,: c ~a ~d a m ~ `w ~ y T ~ ~ o (y E d N m In _ W ~ 4cri ~ N _ m ~ 3~ v ~ : ~ ¢ ¢ U zIL'Y m N Y Z N GI d t, = d m v E% Z m:s ~ ~ `w C~ d c W E o v' J~ . ~d m ` ~ m o N V O > ~ C O m Y J m K U m ~O P€ x y CCU x b m u ~a g $f'° d ~ r E io F d E N 9 ` r d kT N m G d y ` N F p £ ~ Fd N y WR xLL„ J LL y~1 N:~F1"y U N~ ¢b~ W LL m: _ _ I IV -1 o d ~ r9E:„ ~ m = t r € U 3 10.•. Z ~ d a W W T ' d " 'Y'°`R 6 N N ~ v :LL:,': LL `Z O U ❑ ~ i r T ' , > y R m ? F p ms d; ~ m q.. 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N U - T U m N m d a ~ ~ d ~ ,p H o d E O N 9 N N N U O `1 V U _ a C ~ U c a N p c 'o a'u E m y U ~ O E C d J C o o V a O O1 H Q 1 Z N O E rn R Q U U N U N 0 CD ~ c~ r m n m m M o; m o n o o m r o 0 0 a n Cq n m o rn ri v N v r - nl a d Y N E z V C U O u, a J N LL ~ OI d E ~ d o d d d o ~ w = N C d C ~ d d F m N E N H C C d 9 m m K x p d O m d d J J O C A ~ c U d m a > L ~i L f co Z ~ ~ O U ~ O a jQ a O E F- O J T U C a ~ O O~1 ~ 8 a N N C r r N N ~ ~ 11 0 a O O O 1 N I(J i Pi W ` 3 A O Z Y m d ~ a N OO N N } p 41 E ~ Q d Oy d D Z T t9 Q V y d A A Y ° a` E e o 2 T F O N = a o a N t Q c o E Q n W ~ = `c o E a m n N o A N a' n Y ~ C a m m ° li~ 2 A } C c w m O T - 76 2 LL O c c m d m 9 y A C ~ E a ~ n u c > C J ° a A a E ¢ O - G a x w v E _ U C d ° a a Q ~ y m v N ii p' o' N N c O E Q m n m Y V N lL ~ C ° d j N rL c O E Q m n d m LL m C ' 7 ° N y 41 ° o E Q m n Y A u ~-y O c W w E C 7 C J E a q O. 'u c A N ° C c o E a m n m 0 C `N N C A O J W R N N 7 a v ° T _C O U _T U N a C O m T O L_ a Q. C LL v 0 Z `v C L O O C a ~ X N A C f d O E ~U na U d C w A a v N L N U p _ o A F7 V. u o a C p O A m v ,So A N A c Z O O LIT Q m o N ~ A a m a m' a ~ 20 a ¢ w o m A H J co rn °O O 0 m m 16 Lo c a a o N N j LL v 0 a` a 0 E v H rn O J T V d Q O d z } R ~ ~ Q n V N LL R } N O 0 N o d } !E V N V O G. N E to z L Q u N O y O E ° a N a - a c O O o ¢ o `m a d L ¢ C O E ¢ a 'V E W S N C > O E ¢ ma 'V d w N `o udi Q m d y C m d O .V m } C a w d O 2 'V O E c 's m m E C 7 O E a c ~ o` v } O~ C ❑ d am v E N ° p O N a W v E N ° . 'V LL p s d a ¢ `w N d ~ y 8 N a+ o W > O E Q a 'V c y y 'a N c p d ] > O E ¢ a 'V c y m m LL _ ❑ ° Yi v ❑ > O E ¢ a 'V c F V ii `D M W E C O E Q c c a` ` d o O E ¢ n 'p c _ m ❑ c `w d a 15 D J d N N N d O T C J D V _T U N a c 0 m T O L J ¢ m c LL v 0 Z `w c L 0O o c % N N C F d C O O ~U as u w t `v m a d O O . N ~ .d m U ~ O t L d ~ U N o a c a o d m d N d N a d z D CO N mo Q c' ~ O i6 6 m 0 1T 00 a ¢ d N O A w H J 00 0 b L R 0 N ~ w C N y LL d C d ~ C d N d ~ N 9 O 9 O S ~ 0 o J C a U_ N a ~ N ~ L LL d 0 Z t0 a LL ~ N Q d 9 . C U A ~ LL N ~ n O O U 0 E A Z } Q V ld d u O N ~ u. a c y O y N p N E d> N d x d u N O N N ~ v v N t q N T p OI LL N a C U Q ° E m m ° y > d a b C7 ? E w a w S L m N ~ c¢ a w O E a a w .O ~ O a~ d n N v c > E a~ N J 0 °u ° o y m a o E> C d~ f0 a. D C C d' J A G "O d U U ~ ~ N d N ~ N N Q a' R C C •U C W C a a N y C d C 'O ry O I- Ul a w ~ - o: J fn (7 LL O m O N J} OE O OE N O O O Mt O O~ O ~ ~ ViE Vi} M N Yi; W Yi! M W} t D O ` O N O `a g cl s o c w mp m m rIL U y ~ a ~ a N y N K d ~ C A N y ~ I Q = ~ d 0 ~ J U C d ~ N y 9 y C 7 d LL U O O ~ y N Cl O y~ ` N I~ O o s a o _ Z n ~ ~ m LL Q U j N d c 6 y d C OI t a E N _ U E w o m a U a C m N N . . b_ \ O L t0 ~ ~ U N C ~ c 7 u a y ~ O a C O U v v ~ ° ' ~i E U v 'w t d N m U a c o U C p o p p E W ° y c' w v u U y o O IL d E o c m o- a o o v a o w N a ¢ m n m a ¢ u ¢ a 0 m w m 0 a o o J N O O N 01 E A Z A L R Q N H u u d u Q N ` ii a N O H a _L m Q U y d ~ o. N y a K d C d ~ 0 o ox ~C d 3 c o d J C d U_ > N' d ~ N j ~ LL d U d_ ~ N o. o _ c A ~ LL o. A V d W w d E > o p C VI a y ~ ' y C > p d d p p N a L N O O y L J > W = d v C a' N Z y j ° d LL' y ~ y C O ~ J, C a A¢ L OI d a a y > ~ A O U C a A ~ C y Q d i U O J .y. C y ~ q N y .y.. C C E C = d V O O ~ V ~ U O W A a C 0 U C ~ ~ Z3 L y y m y lL Q pl C 6 C C d ¢ J U O T d O a O W j 0 o a w o c J C N N ~j y N J x C V m C w N W ¢ a C w L _ A p C ' n n N = j 1 C y U u t s a d a~ n L a x » c ~ H w d O d m d ~ x ~ o N S a ❑ L O F- d ❑ A H d A o y a m U ¢ N. D H d L_ T Q U d a~ N y d C d ~ G A N a O O 2 3 0 O U J C d u_ 7 N `a a N ~ d w d Z ~ d L ~ N Q D.9 _ C N. N.. au. o ~O n V N d d E m z R A 4 a 0 N v O N L ii a m€ OJ; w~ M OBI OI N C OI d Q N O N U V N ~ ~ a w 5 ~ d c a o c f° c Q m O ] O N j N E m m E c ,`d_ Q `w a U y C U N N r d T N C IA ~ N ~ c w w ii H H J d' m Q j A C A C a a C d LL = C m W W d C O d m C N C O O 10 a N d N d N a a a¢ N 2 0 F 0 U c LL LL o, c O 2 d O d `m a G 3 d F- h N N d N c .c N c `d O 0 H W `a ~ v L ~p n O r of u a n M~ CI c ~ w ef~ N > a s ~ F a ~ r C N y~ 7 9 0 O Z ~ a O O J C a V ~ N a ~ aLL b 0 i6 v a r rn a a rn' Q V ~ LL ~M 3. t7! N N m " w'. V N a N a 9 ~ C ~ R O~ h C a 'U ~ C W b ~ C E a„LL o: Z O~ L p N l0 r r j O V d N C a LL ~ d ~ uNO d a E `m i a Q w rn m o m C C1 t` C a 'D^ T T ~ O C O ~ Q _ U V y . . N LL V N O W a .LL d y y y m `w ~ N U L 6 T d O a W O W ~ O N L w a` ¢ O D .b a `o C W T W \V 0 a d K N LL ~ q N r N C Q b rn ca o b J ~ r E'. a d a F' U v r mOv acd, N d b d rn E A N_ d O N O = C 0 0 J C d V_ > N d a L LL d N U d O N as c A LL .n A U O N Y N LL N d a d m d 0 N L b A N b N A W c a m L C d rn a N y L 3 L A ~ U d d' N ~ v = d L A y o N ~ O > W d ~ N d a ~ b Sl m d ~ C N N VI X ~ U U Q A O Q U U F Q . ~ a c d ~ LL a O a b N ~ d V L U p U N a d aN q b d d y 0 Y > ~ J ~ y 2 rn N LL W C d A C ~ v C >i 'N V p L ~ i LL U O J p , N p . A w a 0 0 o o C O A d C d J d J d O J U d> J d U y J 7 D ~ U~ O K 9 v X N 41 d jp N r N c Q a m c a ~ b J Q E a`,r C7 `a r m O s a 'cLL N a v C' b ~ A N y ~ N O O = C y J E" 3 0 J U C b U > N va N ~ LL a Q" N V v O N 0. O C . 7 ~ LL a R U v v N ~ v o > u `o p L v a w 2 a o E O :a ° a 2 v m c N in a `a s W ] 0 ~ ~ N c a o~ 1° m e J O O J W a O N Q T E N d N v a O° 10 a m~ a~ ~ ~ m~ Y . . a N a U= N r a Q LL VO V a N p A E < E v ¢ E E c v y n a W U ° ' U 1-Q LL > L > v -°J x_ ~ Q Eb Em ~L C C K Q O LL N W Q Ifl Q 0. 0 r d K N LL d q N N d Q C a U' m c a o y J Q d a `w L n O 9 U d C a > d C LL U1 d d d ~ C O N a = N 9 O O S c C d LL O ° J ~ a U_ ~ N `a o N ~ d LL d N U a 0 N a a c A LL n A U N N F Y N LL m N n d O U d 9 a °c d E n N c L lL U U N ~ ~ ~ ~p O. c a- O C N LL N C ' y d E q L O d O a V N O N _ O a Z a v LL O U T d r a C L a N C O d N ~ ~ O - N Q] a N N 9 OI _ N a ITO d 1) ~ LL 6 O N ~ ~ RI J J v y ~ a U a N N U a O J O)' W a O K a D y 9 N C N J O O O C O C Q d ' a O q d d V v 0 L d d d J a> _ N EE O O r U A U x N O J J J O J a X ~p d a _ J Q r J 0 0 0 OT O r J a Q Q m 0 a a K N LL W jp N r N C a d O1 c o d J ❑ A E 01 `a d ~ O `a r n0 N u v ~ 6 C ~ y N d d D: d C A 'N a N O S C rC d LL O O J C a U_ ~ N y 9 N ~ d LL a N V d N ~a o. ~ A LL n R U a "p x d ~ LL Z v d v a m d d m C `c ~ ~ A N C N OI N d v ~ a d ~ C N m w N~ W m J° d E N m m y m O1 m m ~ w v c w a w o o~ c W S Q LL LL~ LL J Oly N[' Cli Nj N~ H~ N~ ~E NT J C O N N O N N Z~ ` C N C j j 3, Yf N ~ N r W C d C d U q R C F C U W K W K i O F 0 i- Supplement to the Annual Report of Community Redevelopment Agencies For the Fiscal Year Ended June 30, 2002 Redevelopment Agency ID Number: 13981974600 - Name of Redevelopment Aencv: ROSEMEAD REDEVELOPMENT AGENCY Address: 8838 EAST VALLEY BOULEVARD Citv, State, Zi : ROSEMEAD CA 91770 The U.S. Bureau of the Census requests the following information about the fiscal activities of your government for the 2001-2002 fiscal year (defined from July 1, 2001 through June 30, 2002). Governments furnishing this information will no longer receive Census Bureau Form F-32, Survey of Local Government Finances. If you have any questions please contact U.S. Bureau of the Census Jeffrey Little 1-800-242-4523 A. Personnel Expenditures Report your government's total expenditures for salaries and wages during the year, including amounts paid on force account construction projects. Z00 S4 569 201 B. Mortgage Revenue Bond Interest Payments Report your govenunent's total amount of interest paid on mortgage revenue bonds during the year. U20 S C. Cash and Investments Held at the End of the Fiscal Year Report separately for each of the three types of funds listed below, the total cash on hand, cash on deposit, and investments in Federal government, Federal agency, State and local government and non-governmental securities. Report all investments at par value. Include in the sinking fund total any mortgages and notes receivable held as offsets to housing and industrial financing loans. Exclude accounts receivable, value of real property and non-security assets. 1. Sinking Funds - Reserves held for the redemption of long-term x701 $ 5,323,936 debt. 2. Bond Funds - Unexpended proceeds from the sale of bond issues N}731 $ ending disbursement. 3. All Other Funds - Exclude employee retirement funds. W61 $ 9,260,756 U.S. Bureau of the Census - Revised 03102 MOTION BY COUTCILMAN IMPERIAL, SECOND BY MAYOR PRO TEM VASQUEZ that the Council adopt Resolution No. 2002-36. Vote resulted: Yes: Vasquez Taylor; Bruesch; Clark, Imperial No: None Absent None Abstain: None The Mayor declared said motion duly carried and so ordered. IV. CONSENT CALENDAR (Items CC-A, CC-B and CC-D were pulled for discussion purposes) Councilmember Clark stated that she will be abstaining on Item CC-F as the project will involve the street she lives on. CC-C AUTHORIZATION TO ATTEND LEAGUE OF CALIFORNIA CITIES EMPLOYEE RELATIONS INSTITUTE, JANUARY 30-31, 2003, MONTEREY CC-E ACCEPTANCE OF WORK FOR TRAFFIC SIGNAL IMPROVEMENTS AT THE INTERSECTION OF HELLDIAN AND JACKSON AVENUES AND AT THE ENTRANCE TO THE GARVEY COD'11\TGNITY CENTER CC-F APPROVAL OF PLANS AND SPECIFICATIONS AND AUTHORIZATION TO SEER BIDS FOR STREET LIGHTING IMPROVEMENTS ON VARIOUS STREETS C-G ANNUAL REPORT OF THE ROSEMEAD COJ 1DIUNITYDEVELOPMENT COIlDIISSION FOR FISCAL YEAR 2001-2002 MOTION BY COUNCILMAN IMPERIAL, SECOND BY MAYOR PRO TEM VASQUEZ that the Council approve the. aforementioned items on the Consent Calendar. Vote resulted: Yes: Imperial, Taylor; Bruesch, Vasquez No: None .Absent: None Abstain: Clark Councilmember Clark abstained on Item CC-F. The Mayor declared said motion duly carried and so ordered. CC-A LEGAL SERVICES AGREEMENT BETWEEN THE CITY AND THE LAS' FIRM OF GOLDSTEIN, KENNEDY AND PETITO FOR REPRESENTATION IN FARINELLA V. CITY OF ROSEMEAD CCMIN 12-1002 °aae "J r - Councilman Taylor asked if there was a dollar amount on this case. Bill Crowe, City Manager, responded that there was not. However, there was an opened-ended amount that refers to "other things". Robert Kress; Citv Attorney, stated that there was a public record claim made prior to initiation of this lawsuit in the amount of 515,000 MOTION BY COUNCILMAN IMPERIAL, SECOND BY MAYOR PRO TEM VASQUEZ that the Council approve the a_reement between the City of Rosemead and the law firm of Goldstein, Kennedy & Petito. Vote resulted: , Yes: Imperial, Bruesch, Clark, Vasquez No: None - Absent None Abstain: Taylor Councilman Taylor stated that he abstained because the information received is not clear on what the count the claimant is asking for. CC-B LEGAL SERVICES AGREEMENT BETW'EE'N THE CITY AND THE LAW FIRA4 OF GOLDSTEIN. KENNEDY & PETITO FOR RETAINER SERVICES RELATING TO PERSONNEL AND EMPLOYEE RELATIONS LAW MATTERS- Councilman Taylor asked what is the-City's contract liability with CJPIA regarding lawsuits such as the Farinella type lawsuit? Do they have,an obligation to defend these lawsuits? - Robert Kress, City Attorney, replied that the Farinella lawsuit was referred to the CJPIA and they declined coverage. Mr. Kress continued that a representative from CIPIA indicated that this type of case was not within the scope of the Authority's protection. Mr. Kress continued that typically, employee relations matters are not covered. MOTION BY COUNCILMAN IIvIPERIAL, SECOND BY MAYOR PRO TEM VASQUEZ that the Council approve the agreement between the City and the law firm of Goldstein, Kennedy & Petito. Vote resulted: Yes: Imperial, Taylor, Bruesch, Clark, Vasquez No None Absent: None .Abstain: None The Mayor declared said motion duly carried and so ordered. 0-01 CCM W a I: -10-01 ➢Ln 7Y