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CC - Item 4D - Acceptance of Annual Audit Reports for the Fiscal Year Ended June 30, 2021ROSEMEAD CITY COUNCIL STAFF REPORT TO: THE HONORABLE MAYOR AND CITY COUNCIL AND THE CITY COUNCIL SITTING AS THE BOARD OF DIRECTORS FOR THE ROSEMEAD HOUSING DEVELOPMENT CORPORATION FROM: GLORIA MOLLEDA, CITY MANAGER ,,& �•J \ . DATE: JANUARY 25, 2022 SUBJECT: ACCEPTANCE OF ANNUAL AUDIT REPORTS FOR THE FISCAL YEAR ENDED JUNE 30, 2021 SUMMARY The certified public accounting firm of Lance, Soll & Lunghard, LLP (LSL) was engaged by the City Council to perform an audit of the financial statements and perform compliance testing of the City of Rosemead of the fiscal year ended June 30, 2021. LSL conducted the audit in accordance with generally accepted auditing standards and issued an unmodified (clean) audit opinion on the financial statements. This report provides a summary of the audit report to be used as a companion to the published Annual Comprehensive Financial Report (ACFR) (formerly referred to as the Comprehensive Annual Financial Report). Also included are the Rosemead Housing Development Corporation Financial and Compliance Report, and other documents related to the financial audit. DISCUSSION Generally accepted accounting principles (GAAP) provide the criteria for judging whether a financial report is fairly presented. In defining the minimum standard of acceptable basic financial reporting for state and local governments, GAAP mandate a complete set of basic financial statements, including accompanying note disclosures, as well as the presentation of certain required supplemental information. GAAP encourages government agencies to present this information within the Annual Comprehensive Financial Report (ACFR). The ACFR is a more detailed financial report beyond just the basic financial statements and contains three basic sections: • The Introductory Section — provides general information of the City which includes the letter of transmittal, list of principal officials, and a citywide organizational chart. • The Financial Section — provides the overall financial information of the City which AGENDA ITEM 4.1) City Council Meeting — Acceptance of Annual Audit Reports January 25, 2022 Paae 2 of 6 includes the independent auditor's report, management's discussion and analysis (MD&A), the basic financial statements, notes to the basic financial statements, required supplementary information, and other supplementary schedules and statements. • The Statistical Section— provides abroad range of operation, economic, and historical data that provides a context for assessing the City's economic condition. This section provides information about the City's general financial trends, revenue capacity, debt capacity, economic and demographic trends, and operating information. The scope of the annual audit includes the basic financial statements, which includes the government -wide financial statements, fund financial statements, and the notes to the financial statements. The responsibility of the auditors is to express an opinion on the basic financial statements. The independent auditors produce four deliverables based on their audit: • Independent Auditor's Report: Defines the scope of the audit, responsibility of the auditor and management, an opinion on the fair presentation of the basic financial statements, and other matters. • Communication Letter to the City Council and City Manager (SAS 114 Letter): Discusses significant audit matters, difficulties encountered in performing the audit, disagreements with management, management representations, management consultation with other independent accounts, other audit finding or issues, and other matters. • Independent Auditor's Report on Internal Control over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements: Communicates deficiencies in internal control or compliance. • Report on Agreed -Upon Procedures Applied to Appropriation Limit Schedule: Communicates the results of the specific procedures performed on the City's calculation of the annual appropriation limit (Gann Limit). ANALYSIS Auditor Reports Independent Auditor Reports Auditors may issue three different types of opinions at the conclusion of an audit; an unqualified, qualified, or adverse opinion. An unqualified opinion assures the reader that the information presented in the ACFR fairly represents the City's financial position. A qualified opinion states that the information is fairly presented except for a particular issue. An adverse opinion indicates that the agency has major accounting and/or internal control issues and no reliance may be placed on the financial statements. The Finance Department staff is proud to report that for the fiscal year ended June 30, 2021, the City of Rosemead received an unqualified (clean) opinion as stated in the independent auditor's report and reads as follows: City Council Meeting — Acceptance of Annual Audit Reports January 25, 2022 Paize 3 of 6 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, 2021, 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. Communication Letter to the City Council and Cily Manager (SAS 114) Letter There was nothing significant reported in the communication letter. The financial statement disclosures are neutral, consistent and clear; the auditors had no significant difficulties in performing the audit; and there were no disagreements with management. Auditor's Report on Internal Controls and Compliance There was nothing significant to report. No deficiencies in internal control were noted and there were no noted instances of non-compliance. Report on A reg ed -Upon Procedures Applied to Appropriations Limit Schedule No exceptions were noted to the City's calculation of the annual appropriations limit. Financial Reports The ACFR 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 and second, at the fund level (Fund Financial Statements). The government -wide statements are designed to provide readers with a broad overview of the City of Rosemead's finances while the fund statements provide more detailed information about the City's funds. Government -Wide Statements — There are three primary citywide financial statements: The Statement of Net Position, the Statement of Activities, and the Balance Sheet. The Statement of Net Position presents the City's overall financial position at a specific point in time — in this case, June 30, 2021. The Statement of Activities presents the City's results of operations over a period of time (one year). The Balance Sheet presents the assets, liabilities, and fund balance of all governmental funds. The Basic Financial Statements also provide a reconciliation of the Balance Sheet to the Statement of Net Position. The following represents highlights of the government - wide statements: • Net Position — As of June 30, 2021, the City's net position (total assets and deferred outflows of resources less liability and less deferred inflows of resources) is $87.9 million, an increase of $7.68 million over the prior fiscal year. City Council Meeting — Acceptance of Annual Audit Reports January 25, 2022 Paae 4 of 6 • Activities —As of June 30, 2021, total revenue for all governmental funds was $34.3 million and total expenses for all functions and programs were $30.0 million. The City's net position increased by $7.68 million during the year through a combination of revenues in excess of expenses of $4.3 million and a $3.38 million restatement to the net position for a prior year correction. • Fund Balance — The City's total governmental funds reported combined ending fund balances of $47.40 million, an increase of $9.75 million over the prior year. The $9.75 million increase is comprised of an increase to the General Fund fund balance of $1.38 million and increases of $8.37 million to fund balances of restricted funds. The $8.37 million represents fund balance increases to 16 of the 20 special revenue funds reported and includes significant increases to the Gas Tax, Road Maintenance and Rehabilitation, Street Lighting, and HOME funds. Of the $47.40 million combined fund balance, $118 thousand is non -spendable, $21.9 million is restricted, $8 million is committed, $130 thousand is assigned, and $17.3 million is unassigned and available for spending at the City's discretion. • Restatement — There was a net position and fund balance restatement of $3.4 million for home improvement and first-time homebuyer program loans within the HOME fund that had been expensed in prior years rather than being established as a loan receivable. Governmental Fund Statements — The focus on fund statements is to provide information on financial activities of the year and the balances of spendable resources. The General Fund, always considered a `Major Fund' for reporting purposes, is found in the Basic Financial Statement section of the ACFR along with the American Rescue Plan Act fund, another major fund. All other governmental fund statements are in the Required Supplementary Information section of the ACFR. General Fund. The General Fund is the chief operating fund of the City. The fund is used to account for all financial resources except those required to be accounted for in another fund. The fund balance on June 30, 2021 is $25.59 million, an increase of $1.38 million over the prior fiscal year. Of the $25.59 million, $7.99 million is committed to approved capital projects and the fund balance policy reserve requirement, and $17.41 million is unassigned, with the remaining $190 thousand as either nonspendable or assigned. The unassigned fund balance represents 79% of total General Fund expenditures, while total fund balance represents 117% of that same amount. Highlights of the change in fund balance are presented below: • Total General Fund revenues of $23.3 million exceeded expenditures of $21.9 million resulting in revenues over expenditures in the amount of $1.38 million. City Council Meeting — Acceptance of Annual Audit Reports January 25, 2022 Paize 5 of 6 • Comparison to the prior year —Fund revenues increased over the prior fiscal year by $333 thousand due to growth in assessed property tax value and better than expected sales tax revenue offset by declines in transient occupancy tax and all park and recreation related revenue. • Comparison to the prior year — Fund expenditures were $132 thousand less than the prior fiscal year due to significant savings in Parks and Recreation and Public Works related to the impacts of the pandemic, offset by increases in General Government, Public Safety, and Community Development for increased costs in insurance, contract services, and general services. • Comparison to Adopted Budget — The City's General Fund collected revenues of $1.2 million more, equal to 5% higher, than the final budgeted estimates. Property taxes completed the year $553 thousand higher than expected due to the increase in assessed values. Sales tax, originally budgeted $1.0 million less than the prior fiscal year due to the anticipated impact of the pandemic, completed the year $931 thousand higher than budgeted and $100 thousand higher than the prior year's actuals. Transient occupancy tax was also budgeted less than the prior year actuals but, in this case, the impact was greater than anticipated as final receipts fell $394 thousand below the already reduced estimate. Revenues within the licenses and permits category completed the year $555 thousand over the estimate due to strong building permit revenues. The revenue source most deeply impacted by the pandemic was, as expected, related to fees for services, and more specifically, parks and recreation revenues. These fees for service revenues completed the year $448 thousand below the final estimate. The use of money and property category revenue also fell below estimates due to a decrease in recreation facility rentals and the declining interest rate environment for idle cash. Other Major and Non -Major Funds — Due to the amount to be received through the American Rescue Plan Act (ARPA) the fund has been designated as a `Major' fund for the City. The City received $8.9 million in ARPA funds with an additional $8.9 million expected in FY 2022-23; there were no expenses for the year. All other funds of the City are considered non - major. Overall, the fund balances of these Other Major and Non -Major Funds increased by $8.37 million, with cash balances for these funds increasing by $16.27 million. All funds, with the exception of the Community Block Grant Fund and the Measure H Fund, completed the fiscal year with positive cash balances. The cash deficits in the two funds, totaling $45 thousand, were due to the timing of revenue receipts and were covered by temporary loans from the General Fund. Rosemead Housing_ Development Corporation (RHDC) Also reported within the ACFR as a non -major governmental fund, a separate financial statement is also published for the Housing Development Corporation. 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 City Council Meeting — Acceptance of Annual Audit Reports January 25, 2022 Paae 6 of 6 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. For fiscal year 2020-21, revenue from rent totaled $473 thousand, and the Successor Agency subsidy for operations was $452 thousand. Certificate of Achievement (GFOA) The Government Finance Officers Association (GFOA) sponsors an award program for excellence in financial reporting. The City received the award for its June 30, 2020 report and City staff believes the June 30, 2021 ACFR continues to maintain the high standards set by the GFOA and have submitted this year's ACFR for evaluation. STAFF RECOMMENDATION It is recommended that the City Council receive and file the City of Rosemead Annual Comprehensive Financial Report (ACFR), the Rosemead Housing Development Corporation (RHDC) Annual Financial Statements, and other related audit reports for fiscal year ended June 30, 2021. FISCAL IMPACT None with this action. PUBLIC NOTICE PROCESS This item has been noticed through the regular agenda notification process. Prepared by: Paula Chamberlain, Interim Finance Director ATTACHMENTS A: City of Rosemead Annual Comprehensive Financial Report (ACFR) B: Auditors' letter to Mayor and City Council for year ended June 30, 2021 C: Independent Auditors' Report on Internal Control over Financial Reporting D: Report on Agreed -Upon Procedures Applied to Appropriations Limit E: Rosemead Housing Development Corporation Basic Financial Statements F: Auditors' letter to Board of Directors of RHDC for year ended June 30, 2021 M '-Z.�'4PORATEO '% Attachment A Annual Comprehensive Financial Report for Fiscal Year Ended June 30, 2021 Attachment A Annual Comprehensive Financial Report for Fiscal Year Ended June 30, 2021 Fl • NL CL i e Ki to' I �:q m Okfo:loj Ok tZ, ,EAD CITY 11 A VALLEY BL c- �L cam.' y l�•� � v L� �. ti i L � - •r aLA 4k ' FISCAL YEAR ENDED JUNE 30, 2021 ✓� A6" ' AA - THIS PAGE INTENTIONALLY LEFT BLANK .ro- "C(:RJt;�OkATEO � City of Rosemead Rosemead, California ANNUAL COMPREHENSIVE FINANCIAL REPORT FISCAL YEAR ENDED JUNE 30, 2021 Prepared By: Finance Department Paula Chamberlain Interim Finance Director Tess Anson Finance Manager AA - THIS PAGE INTENTIONALLY LEFT BLANK .ro- "C(:RJt;�OkATEO � CITY OF ROSEMEAD, CALIFORNIA ANNUAL COMPREHENSIVE FINANCIAL REPORT FOR THE FISCAL YEAR ENDED JUNE 30, 2021 TABLE OF CONTENTS INTRODUCTORY SECTION Letter of Transmittal...................................................................................... Directoryof Officials...................................................................................... Organizational Chart..................................................................................... Certificate of Achievement of Excellence..................................................... FINANCIAL SECTION INDEPENDENT AUDITORS' REPORT........................................................ MANAGEMENT'S DISCUSSION AND ANALYSIS ...................................... Government — Wide Financial Statements Statement of Net Position....................................................................... Statement of Activities............................................................................ Fund Financial Statements Balance Sheet — Governmental Funds ........................................ Reconciliation of the Balance Sheet of Governmental Funds to the Statement of Net Position .................................................. Statement of Revenues, Expenditures and Changes in Fund Balances—Governmental Funds ................................................. Reconciliation of the Statement of Revenues, Expenditures and Changes in Fund Balances of Governmental Funds to the Statement of Activities.................................................................. Statement of Net Position — Proprietary Funds ............................ Statement of Revenues, Expenses and Changes in Fund Net Position — Proprietary Funds ........................................................ Statement of Cash Flows — Proprietary Funds ............................ Statement of Fiduciary Net Position — Fiduciary Funds ............... Statement of Changes in Fiduciary Net Position — Fiduciary Funds........................................................... Notes to Financial Statements......................................................... REQUIRED SUPPLEMENTARY INFORMATION Notes to Required Supplementary Information ............................... Budgetary Comparison Schedules GeneralFund............................................................................ Page Number 1 5 .................................15 .................................16 .................................17 .............................................18 .............................................19 ............................................. 20 ............................................. 21 .........65 CITY OF ROSEMEAD, CALIFORNIA ANNUAL COMPREHENSIVE FINANCIAL REPORT FOR THE FISCAL YEAR ENDED JUNE 30, 2021 TABLE OF CONTENTS FINANCIAL SECTION (Continued) Page Number Schedule of Proportionate Share of Net Pension Liability..........................................................66 Schedule of Plan Contributions...................................................................................................68 Schedule of Changes in Net Pension Liability/(Asset)and Related Ratios.................................70 Schedule of Plan Contributions...................................................................................................72 Schedule of Changes in Net OPEB Liability and Related Ratios................................................74 Schedule of Plan Contributions...................................................................................................75 COMBINING AND INDIVIDUAL FUND STATEMENTS AND SCHEDULES Combining Balance Sheet — Nonmajor Governmental Funds ................... Combining Statement of Revenues, Expenditures and Changes in Fund Balances — Nonmajor Governmental Funds ................. Budgetary Comparison Schedules StateGas Tax Fund............................................................................ Local Transportation/Sidewalk Grant .................................................. PropositionA....................................................................................... PropositionC....................................................................................... MeasureR........................................................................................... MeasureM........................................................................................... Air Quality Management District.......................................................... StreetLighting..................................................................................... Development Impact Fee Traffic......................................................... Development Impact Fee Public Safety .............................................. Development Impact Fee General Government ................................. Development Impact Fee Parks.......................................................... Community Development Block Grant (CDBG).................................. HomeProgram.................................................................................... Rosemead Housing Development Corporation .................................. Road Maintenance and Rehabilitation Account S131 ......................... CityGrants Fund................................................................................. CleanWater Fund............................................................................... MeasureH Grant................................................................................. Combining Statement of Net Position — Internal Service Funds.... Combining Statement of Revenues, Expenses and Changes in Fund Net Position — Internal Service Funds .................................. Combining Statement of Cash Flows— Internal Service Funds.... ................................. 78 ................................. 84 ...........................................108 ...........................................109 ...........................................110 CITY OF ROSEMEAD, CALIFORNIA ANNUAL COMPREHENSIVE FINANCIAL REPORT FOR THE FISCAL YEAR ENDED JUNE 30, 2021 TABLE OF CONTENTS 14k_lt0Ftiley-Al R&Ix9b0N701 Page Number NetPosition by Component..........................................................................................................112 Changesin Net Position...............................................................................................................114 Fund Balances of Governmental Funds.......................................................................................116 Changes in Fund Balances of Governmental Funds....................................................................118 Assessed Value and Estimated Actual Value of Taxable Property..............................................120 Direct and Overlapping Property Tax Rates.................................................................................121 Principal Property Taxpayers.......................................................................................................122 Property Tax Levies and Collections............................................................................................123 Direct and Overlapping General Bonded Debt Outstanding ........................................................124 LegalDebt Margin........................................................................................................................126 Pledged -Revenue Coverage........................................................................................................128 Demographic and Economic Statistics.........................................................................................129 PrincipalEmployers......................................................................................................................130 Top 25 Sales Tax Producers........................................................................................................131 Full-time City Employees by Function..........................................................................................132 Operating Indicators by Function..................................................................................................133 Capital Assets Statistics by Function............................................................................................134 r THIS PAGE INTENTIONALLY LEFT BLANK T' 'CCF�[ )A Introductory Section THIS PAGE INTENTIONALLY LEFT BLANK MAYOR: POLLY LOW MAYOR PRO TEM: SEAN DANG COUNCIL MEMBERS: SANDRA ARMENTA MARGARET CLARK JOHN TANG December 17, 2021 City of Wpsemead 8838 E. VALLEY BOULEVARD ROSEMEAD, CALIFORNIA 91770 TELEPHONE (626) 569-2100 FAX (626) 307-9218 To the Honorable Mayor, City Council, City Manager, and Residents of the City of Rosemead We proudly present to you the Annual Comprehensive Financial Report (ACFR) of the City of Rosemead for the fiscal year ended June 30, 2021. It was prepared by the Finance Department in accordance with Generally Accepted Accounting Principles (GAAP) as promulgated by the Government Accounting Standards Board (GASB). Responsibility for the accuracy of the data, completeness, and fairness of the presentation, including all disclosures, rests with the City. We believe that the information, as presented, is accurate in all material respects; that it is presented in a manner designed to fairly set forth the financial position of the City and the results of its operations; and that all disclosures necessary to enable the reader to gain the maximum understanding of the City's financial affairs have been included. Management of the City is also responsible for establishing and maintaining internal control designed to ensure that the assets of the government are protected from loss, theft, or misuse, and to ensure that adequate accounting data are compiled to allow for the preparation of financial statements in conformity with U.S. generally accepted accounting principles. Internal control is designed to provide reasonable, but not absolute, assurance that these objectives are met. The concept of reasonable assurance recognizes the cost of a control should not exceed the benefits likely to be derived. The City of Rosemead's financial statements have been audited by Lance, Soll, & Lunghard, LLP, a firm of licensed certified public accountants. The goal of the independent audit is to provide reasonable assurance that the financial statements of the City of Rosemead for the fiscal year ended June 30, 2021, 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 reasonable basis for rendering an unmodified opinion that the City of Rosemead's financial statements for the fiscal year ended June 30, 2021, are fairly presented in conformity with GAAP. The independent auditor's report is present as the first component of the financial section of this report. The independent audit of the financial statements was part of a broader, federally mandated "Single Audit" designed to meet the special needs of federal grantor agencies. The standard 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. Managements' discussion and analysis (MD&A) immediately follows the independent auditors' report and provides a narrative introduction, overview, and analysis of the City's basic financial statements. This letter of transmittal complements the MD&A and the financial statements, and it should be read from that perspective and in conjunction with all sections of the ACFR. The Statistical section, which is unaudited, includes selected financial and demographic information generally presented on a multi-year basis. 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 54,229. As a general law city, Rosemead operates under the Council -Manager form of government. 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, is responsible for, among other things, establishing policy, passing ordinances and resolutions, adopting the annual budget, appointing members to various City Commissions, and appointing the City Manager, City Attorney, and City Clerk. The Council conducts City Council meetings and study sessions as required. The City Manager is responsible for carrying out the policies and ordinances for the City Council, for overseeing the day-to-day operations of the government, and for appointing department directors. The City has two blended component units: (1) the Rosemead Financing Authority (the Authority); and (2) the Rosemead Housing Development Corporation (RHDC). Additional information on all three of these legally separate entities can be found in Note 1(a) in the notes to the financial statements. Municipal services are provided to Rosemead residents in a variety of methods including a city workforce, contract services, and special districts. Administration, Finance, Public Works, Parks and Recreation, and Planning services are provided by City Staff while Building and Safety, Information Technology, City Attorney, Engineering, capital improvement projects, and some street maintenance efforts are provided through contracts with private firms funded by the City. The City's largest public agency contract is for law enforcement and traffic control services provided by the Los Angeles County Sheriff's Department. Fire Protection, Library and Flood Control are provided by special districts within Los Angeles County which are primarily funded through a portion of the ad valorem property taxes. 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 continue to be curtailed, and normal municipal processes and activities continue to be affected. Public schools serving residents of Rosemead are under the authority of independent school districts, but the City works closely with the districts to provide quality educational opportunities for grades K-12. Garvey School District, Rosemead School District, and EI Monte Union High School District serve residents of Rosemead. There are 9 elementary schools, 3 middle schools, and 1 high school. Budgetary Controls The annual budget serves as the foundation for the City of Rosemead and its component units for financial planning and control. The development of the Fiscal Year Annual Operating Budget begins in January with the dissemination of the budget preparation guidelines. All departments and component units of the City are required to submit requests for appropriation to the City Manager in March of each year. The Finance Department, under the direction of the City Manager, uses these requests as the starting point for developing a proposed budget. The City Manager presents the proposed budget to the City Council for review prior to June 30. The City Council holds public meetings on the proposed budget and adopts the 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). The City's budget policy is that all appropriations for operating accounts lapse at fiscal year-end. Outstanding operating account encumbrance balances at fiscal year-end are paid from the appropriations in which the invoice is paid. City Council may amend the budget at any time during the fiscal year. The City Manager may authorize budget transfers between line items and programs within the same fund while budgetary changes between funds require City Council approval. 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, the comparison schedules are presented in the other supplementary section of the accompanying financial statements. Current Financial Condition At the time of this writing, it appears that the economic recovery may be strengthening despite concerns surrounding the resurgence of COVID-19 cases. The spread of the virus is not anticipated to have the same impact on the economy as it did in 2020, primarily due to vaccinations. In California, 69% of the population has been fully vaccinated compared to 61% nationally. Although the City of Rosemead has a strong financial foundation, thanks to a stable property tax base and a relatively diverse sales tax base, the long-term fiscal impact of the COVID-19 pandemic is unknown. The City's future economic health will be dependent on maintaining healthy reserves through fiscally conservative budgets and policies, in addition to aggressively pursuing economic development opportunities. Property tax, including Property Tax In -Lieu of VLF, is the City's largest tax source at $10.6 million and makes up approximately 45% of the General Fund revenues. Total assessed value from the 2020-21 tax roll is $5.1 billion, up $229 million from the prior year. Residential property represents 84% of this growth as housing values rise and property sales are beginning to increase. The median sales price for a single-family home increased from $649,500 to $677,000 over the past year. The residential category assessed value increased approximately $182 million, which represents a 5.2% increase. Because the City of Rosemead is classified as a 'no -low property tax city', the General Fund retains just $0.0668 for every dollar of property tax collected within the City. Sales and use tax revenue is the second largest revenue source for the General Fund, at $5.5 million and represents approximately 24% of the General Fund revenues. Consumer goods continue to be the top category of sales tax generating businesses in Rosemead, generating 35% of sales tax revenues followed by 20%from pools and 19% from restaurants. While receipts have increased over the prior year, sales tax revenue remains below pre -pandemic levels. Transient occupancy tax (TOT) and recreation program revenues were most negatively impacted by the pandemic. Typically the third largest source of income to the General Fund, TOT receipts fell to the fourth position, behind increased building permit revenue. Recreation program revenue fell from $867,400 in the pre -pandemic FY 2019 to just $144,200 in FY 2021, however, the reduction was partially offset by reduced costs of providing those services. The City anticipates utilizing a portion of the funds provided through American Rescue Plan Act of 2021, signed by President Biden on March 11, 2021, to offset losses due to the pandemic as allowed by the Act. The City also anticipates that these revenues will rebound once the COVID-19 Emergency is over and the local economy returns to normalcy. Long -Term Financial Planning In addition to managing the City's money in a manner that ensures Rosemead is financially stable, the long-term Strategic Plan reflects the City Council's continued commitment to support high quality municipal services, provide for the maintenance and expansion needs of the City's infrastructure and facilities, and profile the City's economic development strategy. The City's first Strategic Plan was adopted by the City Council in 2009 and was to guide the organizational efforts of the Council, Commissions, and staff to meet its 'Vision 2020' goal. The strategic planning process, and subsequent updates, included an extensive public outreach process and a series of public meetings. Updated every two years, the 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 succeeding 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. V Due to the pandemic, the planned update for 2020 was delayed and therefore, the 2018-2020 Plan was extended until it could be replaced. As pandemic restrictions lessened, the process to update the Strategic Plan began in mid -2021 with the new 'Vision 2030' plan adopted on October 26, 2021. Major Accomplishments The Public Works Department completed four major projects during the year including replacement of the HVAC system at the Garvey Park Gymnasium, the Jay Imperial Crosswalk Installation and Sidewalk Replacement Project, a community garden on Del Mar Avenue, and the Rosemead Park walking trail. The projects were funded from a variety of sources including General Fund, Community Development Block Grant, Measure M, Measure R, and Transportation Development Act funds. Throughout 2021, the City actively worked on the 6th Cycle Housing Element for the 2021-2029 planning cycle. The process involves the evaluation of current and future needs, analysis of local housing production constraints, identification of adequate housing sites, establishing new policies and programs, drafting the updated Housing Element document, and preparing an Addendum to the General Plan Environmental Impact Report. The City also adopted the Freeway Corridor Mixed -Use Overlay which streamlines 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. Due to the workforce changes that resulted from the COVID-19 pandemic, the City approved an interpretation to define live/work units in the Garvey Avenue Specific Plan and expanded the live/work concept to all residential/commercial mixed-use developments citywide. The City also adopted a Residential Small Lot Ordinance which created incentives for infill residential development in areas zoned for multi -family to spur more fee -simple housing production. The goal of the Residential Small Lot Ordinance is to create new homeownership opportunities compared to that of traditional single-family homes or condominiums. The City also approved the Taiwan Center Mixed -Use Project, which consists of 42 residential units and 17,394 square feet of commercial floor area. Lumina Walk, a residential planned development consisting of 31 residential units began construction in 2021. The permits have been issued for all residential units. In addition, Garvey Garden Plaza and Garvey Earle Plaza are close to completion. Garvey Garden Plaza consists of 46 residential units and 11,860 square feet of commercial floor area. Garvey Earle Plaza consists of 35 residential units and 7,520 square feet of commercial floor area. Future Initiatives The City was awarded $27 million in a reimbursable grant 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. The improvements include traffic signal system upgrades, geometric realignment, and additional lanes to increase capacity and improve traffic flow. The multi-year projects are currently in the MA planning phase and funding will roll out in phases from the Los Angeles County Metropolitan Transportation Authority for the projects. The 6th Cycle Housing Element forthe 2021-2029 planning cycle will be adopted and certified by the California Housing and Community Development HCD Department in 2022. As a result, the City will begin implementing the policies and programs listed in the 6th Cycle Housing Element. In addition, both the Garvey Garden Plaza and Garvey Earle Plaza mixed-use projects are expected to be completed by the fi rst q ua rter of 2022. The City also anticipates that Lumina Walk will be completed by winter 2022. It is expected that Prospect Villa, a mixed-use project located within the Garvey Avenue Specific Plan Corridor and the Borstein Enterprises residential planned development will be processed. Prospect Villa consists of 75 residential units (includes some live/work units) and 6,346 square feet of commercial floorarea. The Borstein Enterprises residential planned development consists of 35 residential units. In addition to these projects, the City is amending some areas in the Zoning Code to assist the business community on recovering economically from the impacts of the COVID-19 pandemic. Awards and Acknowledgements The Government Finance Officers Association (GFOA) awarded a Certificate of Achievement for Excellence in Financial Reporting to the City of Rosemead for its Annual Comprehensive Financial Reportforthe fiscal year ended lune 30, 2020. This was the 3rd consecutive yearthatthe City has received this prestigious award. The Certificate of Achievement is the highest form of recognition in governmental management. To be awarded this certificate, a government must publish an easily readable and efficiently organized ACFR, with contents that conform to program standards. The report must satisfy both generally accepted accounting principles and all applicable legal requirements. We believe the current Annual Comprehensive Financial Report conforms to the Certificate of Achievement program requirements and are submitting it to GFOA to determine its eligibilityfor a certificate forthe fiscal year ended June 30, 2021. The preparation of this report is made possible by the talent and dedicated services of the Finance Department staff with special recognition to Tess Anson, Finance Manager. In addition, appreciation is extended to our independent auditors, Lance, Soil & Lunghard, LLP, for its expertise and advice in preparing this year's financial report. We also thank the Mayor and members of the City Council in their interest and support in planning and conductingthe financial operations and corresponding financial disclosures of the City in an open, public, and transparent manner. Respectively submitted, Paula Chamberlain Interim Finance Director/City Treasurer City of Kosemead City Officials as of June 30, 2021 CITY COUNCIL Polly Low Mayor Sandra Armenta Council Member Sean Dang Mayor Pro Tem Margaret Clark Council Member EXECUTIVE STAFF Council Member City Manager—Gloria Molleda City Clerk........................................................................... Ericka Hernandez City Attorney................................................................... Rachel H. Richman Assistant City Manager...................................................................... Vacant Chief of Police (LA County Sheriffs Dept) .......................................... Vacant Director of Community Development ............................................... Vacant Director of Finance (Interim) .......................................... Paula Chamberlain Director of Parks & Recreation .........................................Thomas Boecking Director of Public Works ....................................................... Michael Chung Vii City of Kosemead Organzational Chart Qty If K"C me'd Government Finance Officers Association Award The Government Finance officers Association of the unrcea sates and (GFOA)Achie event a G Certificate Certificatete of Achievement for In Financial Reporting locellto me City of for Its A Comprehensive Flnen ial Annual oa the Thal year ed Report the fiscal y June30,, 2 ate of Govv®mtF eOBieac As�ix9atwu ent s aWrtITa[eus Achievement n[ a national ecoglgmus recognizing Certificate eaward with conformance wre tae highest of standards for preparation of a y] Achievement nate and local government financial reports. for Excellence To be awarded a Certificate of in Financial Achievement, a government unit Reporting must publish an easily readable and efficiently organized comprehensive annual financialreport, whose contents conform to program standards. The ACFR must satisfy both generally accepted accounting principles City or Rosemead tl andableleal requirements. California The award Isvalltl for a period of one year only. We believe our Fmi[s Co ehmvveA vll current report continues to Fina WReplan conform to the program Fcir eFuld Year Faded requirements and will therefore, be submitting it to GPoA for Iuve 30.2020 consideration. //JJ�� y � �� P The City of Rosemead Fasrecelved v-'�' ^�a'�"r the WrtlTateof Achlevementfor Fnea0WDvmlm/CFA the last 3 consecutive years. THIS PAGE INTENTIONALLY LEFT BLANK Financial Section _m THIS PAGE INTENTIONALLY LEFT BLANK LSL•�� INDEPENDENT AUDITORS' REPORT To the Honorable Mayor and Members of the City Council City of Rosemead, California Report on the Financial Statements Opinions 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, 2021, and the related notes to the financial statements, which collectively comprise the City's basic financial statements as listed in the table of contents. 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, 2021, 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. Basis for Opinions We conducted our audit in accordance with auditing standards generally accepted in the United States of America (GAAS) and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Our responsibilities under those standards are further described in the Auditor's Responsibilities for the Audit of the Financial Statements section of our report. We are required to be independent of the City and to meet our other ethical responsibilities, in accordance with the relevant ethical requirements relating to our audits. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. Responsibilities of Management 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; and for 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. In preparing the financial statements, management is required to evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the City's ability to continue as a going concern for twelve months beyond the date of the financial statements. G PrimeGlobal iwnv LS L*::: To the Honorable Mayor and Members of the City Council City of Rosemead, California Auditor's Responsibilities for the Audit of the Financial Statements Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance but is not absolute assurance and therefore is not a guarantee that an audit conducted in accordance with the GAAS and Government Auditing Standards will always detect a material misstatement when it exists. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Misstatements are considered material if, there is a substantial likelihood that, individually or in the aggregate, they would influence the judgment made by a reasonable user based on the financial statements. In performing an audit in accordance with GAAS and Government Auditing Standards, we Exercise professional judgment and maintain professional skepticism throughout the audit. Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, and design and perform audit procedures responsive to those risks. Such procedures include examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. • Obtain an understanding of internal control relevant to the audit 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 City's internal control. Accordingly, no such opinion is expressed. • Evaluate the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluate the overall presentation of the financial statements. • Conclude whether, in our judgment, there are conditions or events, considered in the aggregate, that raise substantial doubt about the City's ability to continue as a going concern for a reasonable period of time. We are required to communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit, significant audit findings, and certain internal control -related matters that we identified during the audit. Other Reporting Responsibilities 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, the schedule of changes in net pension liability (asset) and related ratios, 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 ratios, and the schedule of plan contributions be presented to supplement the basic financial statements. Such information is the responsibility of management and, 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. LSL!�:: To the Honorable Mayor and Members of the City Council City of Rosemead, California Supplementary 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 combining and individual nonmajor fund financial statements and schedules are presented for purposes of additional analysis and are not a required part of the basic financial statements. Such information is the responsibility of management and was derived from and relates directly to the underlying accounting and other records used to prepare the financial statements. The information has been subjected to the auditing procedures applied in the audit of the 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. Other Information Management is responsible for the other information included in the annual report. The other information comprises the introductory section and statistical section but does not include the basic financial statements and our auditor's report thereon. Our opinions on the financial statements does not cover the other information, and we do not express an opinion or any form of assurance thereon. In connection with our audit of the financial statements, our responsibility is to read the other information and consider whether a material inconsistency exists between the other information and the financial statements, or the other information otherwise appears to be materially misstated. If, based on the work performed, we conclude that an uncorrected material misstatement of the other information exists, we are required to describe it in our report. Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated December 17, 2021 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. "7 N , 16 14'-44 dC, c oC!%' Brea, California December 17. 2021 THIS PAGE INTENTIONALLY LEFT BLANK 0 Management's Discussion & Analysis / OSE,...��E.,.. A D THIS PAGE INTENTIONALLY LEFT BLANK City of Rosemead MANAGEMENT'S DISCUSSION AND ANALYSIS Year Ended June 30, 2021 The following Management's Discussion and Analysis (MD&A) of the City of Rosemead's financial performance provides an introduction and overview to the financial activities of the City of Rosemead for the fiscal year ended June 30, 2021. This narrative discussion and analysis focuses on the current year's activities, resulting changes and currently known facts; therefore, the information presented herein should be considered in conjunction with additional information furnished in the letter of transmittal and the accompanying basic financial statements. I9ILI/e1L114F-114: 110: 1110:IfI • As of June 30, 2021, the City's net position (total assets and deferred outflows of resources less liability and less deferred inflows of resources) is $87.9 million, an increase of $7.7 million over the prior fiscal year. • As of June 30, 2021, all governmental activities total revenue was $34.3 million and total expenses for all functions and programs were $30.0 million. The City's net position increased by $7.7 million during the year including a $3.4 million restatement to the net position. • The City's total governmental funds reported combined ending fund balances of $47.4 million, an increase of $9.8 million over the prior year. Of this $47.4 million, $134 thousand was non - spendable, $21.9 million was restricted, $8 million was committed, $130 thousand was assigned, and $17.3 million was unassigned. • General Fund revenues were $1.2 million more than the final budget, and expenditures were $2.7 million less than the final budget, thereby General Fund revenues exceeded expenditures by $1.4 million. • The General Fund's fund balance at the close of the fiscal year was $25.6 million, an increase of $1.4 million over the prior year. Of this $25.6 million, $17.4 million, representing 79% of expenditures, was unassigned and $7.2 million was committed to meet the City's fund balance policy requirement of 31% of revenue. • There was a net and fund balance restatement of $3.4 million for home improvement and first- time homebuyer program loans within the HOME fund. See Note 14 for more details. OVERVIEW OF THE FINANCIAL STATEMENTS This discussion and analysis portion of the annual report is intended to serve as an introduction to, and provide the reader with a fundamental understanding of, the Annual Comprehensive Annual Report (ACFR) for the City of Rosemead. The ACFR is divided into multiple sections. First is the Introductory Section which provides the letter of transmittal, an organizational chart, and a list of principal officials. The Introductory Section is followed by the Financial Section, which contains the independent auditor's report, the management's discussion and analysis, and finally the basic financial statements. These statements contain the "core' financial information for the City of Rosemead. The basic financial statements include the government -wide financial statements, followed by the fund financial statements, and finally, the notes to the financial statements. The Financial Section is followed by the Supplemental Data portion of the report, which provides individual fund and combining information that rolls up into the amounts shown in the basic financial statements. The final portion of the ACFR is the Statistical City of Rosemead Management's Discussion and Analysis, Continued Year Ended June 30, 2021 Section. This section presents selected financial and demographic information, generally presented on a multi-year basis. 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 a private -sector business. Information contained within the government -wide statements includes the entire City government (except fiduciary funds). These statements use the accrual basis of accounting with the measurement focus on that of economic resources. 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. 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 over time. 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. This means revenues and expenses in this statement are recorded when earned or a liability is incurred. Thus, items such as the value of earned but unused vacation leave will be recorded as an expense of the current period, even though the actual use of the vacation time may not be until subsequent periods. Typically, government -wide financial statements are distinguished between governmental activities which are principally supported by taxes or intergovernmental revenues and business -type activities which are intended to recover all or a significant portion of their costs through user fees and charges. The governmental activities of the City of Rosemead include general government, public safety, community development, parks and recreation, and public works. The City of Rosemead does not have any business -type activities. 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 15-16 of this report. Fund financial statements. A fund is a grouping of related accounts that is used to maintain control over resources that have been segregated for specific activities or objectives. The City of Rosemead, like other state and local governments, uses fund accounting to ensure and demonstrate compliance with finance -related legal requirements. The fund financial statements provide more detailed information about the City's most significant funds, not the City as a whole. 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 use the modified accrual basis of accounting and 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. Only assets expected to be used and liabilities that come due during the year or soon thereafter are reported on the Balance Sheet. No capital assets are included. Revenues for which cash is received during or soon after the end of the year, City of Rosemead Management's Discussion and Analysis, Continued Year Ended June 30, 2021 and expenditures for goods and services that have actually been received during the year, are included within the Statement of Revenues, Expenditures, and Changes in Fund Balance. 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 Statement of Revenues, Expenditures, and Changes In Fund Balance provide a reconciliation to facilitate this comparison. The City of Rosemead and its component units maintain 21 individual governmental funds. Individual fund information is presented for the "major" funds in the governmental fund balance sheet and in the governmental fund statement of revenues, expenditures, and changes in fund balances. The "major" funds presented include the General Fund and the American Rescue Plan Act Fund. Information for the remaining governmental funds is combined into a single, "other governmental funds" column on the face of the financial statements. Individual fund data for each of these non -major governmental funds is provided in the form of "combining statements" presented in the Supplemental Data portion of the report. The basic governmental fund financial statements can be found on pages 17-20 of this report. Proprietary Funds are used to report two types of funds: enterprise funds and internal service funds. Enterprise funds report the same functions presented as "business -type" activities in the government -side financial statement. These include activities that the City operates similar to a private business. The City of Rosemead does not have any enterprise funds. Internal service funds are an accounting device used to accumulate and allocate costs internally among the City's various functions. The City uses internal service funds to account for vehicle and equipment operations and replacement, and information services operations and equipment replacement. Because these two services benefit governmental type functions, the activity has been included within "governmental activities" in the government -side financial statements. 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 21-23 of this report. Fiduciaryfunds 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 funds are custodial in nature, and therefore, are not available to support City of Rosemead programs. The basic fiduciary fund financial statements can be found on pages 24-25 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 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 78-110 of this report. Other information. In addition to the basic financial statements and accompanying notes, this report also presents certain required supplementary information concerning the City of Rosemead's progress in funding its obligation to provide pension benefits to its employees. Required supplementary information and notes can be found on pages 64-75 of this report. 7 City of Rosemead Management's Discussion and Analysis, Continued Year Ended June 30. 2021 GOVERNMENT -WIDE FINANCIAL ANALYSIS Net Position. As noted earlier, net position may serve over time as a useful indicator of a government's financial position. At June 30, 2021, the City's net position totaled $87.9 million. Total net position increased by $7.7 million or 9.6% when compared to the prior year mainly due to an increase in cash and a restatement of loans receivable offset by an increase in unearned revenue. Cash increased by $16.4 million which was partially offset by the unearned revenue of $9.8 million in American Rescue Plan Act (ARPA) funding. The chart below reflects the City's net position for the fiscal year ended June 30, 2021 with comparative data for the fiscal year ended June 20, 2020. Net Position As of June 30, 2021 and 2020 Governmental Activities 2021 2020 Change Current and other assets 62,367,412 42,489,263 19,878,149 Capital assets 47,444,803 48,825,863 (1,381,060) Total assets 109,812,215 91,315,126 18,497,089 Deferred outflows of resources 2,566,490 3,402,571 (836,081) Long-term liabilities outstanding 9,851,185 9,513,804 337,381 Other liabilities 13,191,250 3,295,325 9,895,925 Total liabilities 23,042,435 12,809,129 10, 233, 306 Deferred inflows of resources 1,392,220 1,647,094 (254,874) Net position: Net Investment in Capital Assets 47,444,803 48,825,863 (1,381,060) Restricted 21,856,184 13,681,082 8,175,102 Unrestricted 18,643,063 17,754,529 888,534 Total net position $ 87,944,050 $ 80,261,474 $ 7,682,576 The City's net position of $87.9 million is made up of three components: Net Investment in Capital Assets, Restricted Net Position, and Unrestricted Net Position. The largest portion, $47.4 million or 54%, of the City's net position reflects the net investment in capital assets such as land, buildings, machinery, and equipment, less any related debt used to acquire those assets that were still outstanding. The City of Rosemead uses these capital assets to provide services to the residents of the City, consequently, these assets are not available for meeting current financial obligations. An additional portion of $21.9 million or 25% of the City's net position represents various resources subject to external restrictions on how they may be used. These fund balance amounts are said to be restricted. The remaining balance of unrestricted net position of $18.6 million, or 21%, may be used to meet the City's ongoing obligations. This is the only "discretionary" portion of the City's total net position amount. e City of Rosemead Management's Discussion and Analysis, Continued Year Ended June 30, 2021 Unrestricted Restrictec 25% Net Position June 30, 2021 Net Investment in Capital Assets 54% Changes in Net Position. The statement of net position provides a snapshot at a given point in time of the assets and liabilities of the City. The other citywide statement provided is the Statement of Activities. This statement provides the reader with information regarding the revenues, expenses, and changes in net position over the fiscal year. Generally, all changes to the City's net position from one fiscal year to the next flow through the statement of activities. The City's programs for governmental activities include general government, public safety, community development, parks and recreation, and public works. The following is a summary schedule showing the components that make up the City's changes in net position for the years ended June 30, 2021 and 2020. Changes in Net Position Years Ended June 30, 2021 and 2020 REVENUES Program revenues: Charges for services Operating grants and contributions Capital grants and contributions General revenues: Propertytaxes Othertaxes Use of money and property Other Total revenues Governmental Activities 2021 2020 Chanee $ 6,579,445 $ 6,791,634 (212,189) 6,590,283 4,536,459 2,053,824 1,780,851 1,217,584 563,267 10,740,563 9,942,183 798,380 8,318,191 8,602,048 (283,857) 287,628 905,039 (617,411) 40,151 257,314 (217,163) 34,337,112 32,252,261 2,084,851 EXPENSES General government 4,659,583 4,003,674 655,909 Publicsafety 10,679,425 9,744,134 935,291 Community development 3,411,076 3,472,477 (61,401) Parks and recreation 1,916,949 2,920,016 (1,003,067) Publicworks 9,372,263 9,946,662 (574,399) Total expenses 30,039,296 30,086,963 (47,667) Change in net position 4,297,816 2,165,298 2,132,518 Net position - June 30, 2020 80,261,474 78,096,176 2,165,298 Restatement 3,384,760 - 3,384,760 Net position -June 30, 2021 $ 87,944,050 $ 80,261,474 $ 7,682,576 City of Rosemead Management's Discussion and Analysis, Continued Year Ended June 30, 2021 Governmental activities. The City's program revenues totaled $14.9 million with a cost of all governmental activities for the current year being $30.0 million. The City paid for the remaining "public benefit" portion of governmental activities with tax and other general revenue sources. The following chart compares expenses to program revenues for all governmental activities. Expenses and Program Revenues Governmental Activities 6 4 2 General Public Safety Community Parks and Public Works Government Development Recreation Total revenues increased by$2.1 million overthe prioryear. Operatinggrants and contributions increased by $1.6 million due to federal CARES Act funding in response to the coronavirus pandemic, increased recognition of CDBG and HOME revenues, and other grants. Capital grants and contributions increased by $563 thousand in Safe Clean Water Program funding which is based on a parcel tax for all properties within Los Angeles County. Expenses in General Government increased overthe prior year due to increases in legal services, liability and workers' compensation insurance premiums, personnel, and contract services. Public Safety increased over the prior year due to an increase in the Los Angeles County's Sheriff Law Enforcement contract, movement of Code Enforcement operations from the Community Development Department to the Public Safety Department, and an increase to emergency services for expenses related to the pandemic including the Great Plate grant funded program. Community Development expenses were below last year's actuals due to the movement of Code Enforcement to Public Safety, and the delay of special projects offset by an increase in contract services for the Housing Element an increase in building and safety contract services which is based on a percent of revenue received. Parks and Recreation expenses decreased by $1.0 million over the prior year due to reduced or eliminated services and programs during the continued pandemic. Expenses within Public Works were also below last year's level by $574 thousand due to staff vacancies, contract services, engineering services, and property maintenance expenses. Property tax 55% Revenues Sources Functional Expenses Governmental Activities Governmental Activities of money and property 2% General use taxes 3% -taxes cupanry s Franchise taxes 0% ]% 10 Public safer, 36% City of Rosemead Management's Discussion and Analysis, Continued Year Ended June 30, 2021 Sources of Revenue -Two-year Comparison Functional Expenses -Two-year Comparison iJ 2021 X2010 M2021 M2020 _ 3 I ii LbE L—M E 10 g B 6 6 9 9 J _ ■ Charges fo Operating Capital grants Property Other taxes Use of m ey Other Ge ral Public safety Com nity Parks nd Public works SC -i— grant—d and t.XCS and pfopef[y government development recreation contributions contributions FINANCIAL ANALYSIS OF THE CITY'S FUNDS The City uses governmental fund accounting to ensure compliance with budgetary allocations and to maintain control over resources that are legally, or otherwise, restricted for specific purposes. Following is a discussion of the individual "major" funds as shown on the Balance Sheet for Governmental Funds in the basic financial statements. Genera/ Fund. The General Fund is the chief operating fund of the City of Rosemead. It is used to account for all financial resources, except those required to be accounted for in another fund. The General Fund is always reported as a "major fund". The General Fund reported $23.3 million in revenues and $21.9 million in expenditures resulting in revenues over expenditures in the amount $1.4 million. Total fund balance at June 30, 2021 is $25.6 million, composed of $28.9 million in assets combined with $3.1 million in liabilities and $316 thousand in deferred inflows of resources. Total $25.6 million fund balance is classified as $118 thousand nonspendable, $8.0 million committed, $130 thousand assigned, and $17.4 million unassigned. 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 79% of total General Fund expenditures, while total fund balance represents 117% of that same amount. The fund balance of the City's General Fund increased by $1.4 million during the current year. Highlights of the change in fund balance are presented below: • Total General Fund revenues of $23.3 million exceeded expenditures of $21.9 million. • Fund revenues increased over the prior fiscal year by $333 thousand due to growth in assessed property tax value and better than expected sales tax revenue offset by reductions in transient occupancy tax and all park and recreation related revenue. • Fund expenditures were $132 thousand less than the prior fiscal year due to significant savings in Parks and Recreation and Public Works related to the impacts of the pandemic, offset by increases in General Government, Public Safety, and Community Development for increased costs in contract services, insurance, and general services. 11 City of Rosemead Management's Discussion and Analysis, Continued Year Ended June 30, 2021 General Fund BudaetAnalysis. The budget, as adopted for 2020-21 contained $21.9 in estimated revenue and $24.7 million in appropriations. This projected a nearly $2.9 million deficit for the fiscal year. The final budget estimates reduced this expected deficit to $2.6 million with additional staff reports indicating this gap would be narrowed or eliminated by year-end. The final actuals were $23.3 million in revenue against $21.9 million in expenditures, providing an addition of $1.4 million to the General Fund's fund balance. 2020-21 2020-2021 2020-21 Variance with % Actuals to Adopted Budget Final Actual Final Budget Amended Budget Total revenue 21,866,200 22,040,400 23,288,934 1,248,534 6% Total expenditures 24,743,150 24,618,550 21,909,803 2,708,747 -11% Net (2,876,950) (2,578,150) 1,379,131 3,957,281 The City's General Fund collected revenues of $1.2 million more, equal to 6% higher, in comparison to the final budgeted estimates. Property taxes completed the year $553 thousand higher than expected due to the increase in tax assessment values. Sales taxes, originally budgeted $1.0 million less than the prior fiscal year due to the anticipated impact of the pandemic, completed the year $931 thousand higher than budgeted and $100 thousand over the prior year's actuals. Transient occupancy tax was also budgeted less than the prior year but, in this case, the impact was greater than anticipated as final receipts fell $394 thousand below the already reduced estimate. Revenues within the licenses and permits category completed the year $555 thousand over the estimate due to strong building permit revenues. The revenue source most deeply impacted by the pandemic was, as expected, related to fees for services, and more specifically, parks and recreation revenues. These fees for service revenues completed the year $448 thousand below the final estimate. The use of money and property category revenue also fell below estimates due to a decrease in recreation facility rentals and the declining interest rate environment for idle cash. The General Fund expenditure budget had an actual variance of $2.7 million over the prior year due to savings in all governmental activities. General government departments completed the year $650 thousand below budget due to savings in contingency expenses, personnel due to vacancies, and contract services. Public Safety was $275 thousand below budget due to the reduction of crossing guard expenses when schools were teaching virtually, reduction in animal control services, and the transference of certain public safety costs to the grants fund. Public Works was $102 thousand below budget due to reduced facility maintenance and contract management services. Parks and recreation was $1.7 million below budget due entirely to the pandemic. Community development fell $143 thousand below budget due to the budgeting for special projects which did not occur offset by an increase in building contract services which are set as a percent of building and plan check revenue. American Rescue Plan Act. This fund was established to account for the $19.6 million in federal monies the City anticipates receiving to help mitigate the economic challenges due to the Coronavirus pandemic. In Fiscal Year 2020-21, the City received $9.8 million but is still working on a spending plan. Non -Major Funds. The Non -Major Governmental Funds show a combined fund balance total of $21.8 million, an increase of $8.4 million. These are the traditional Prop A, Prop C, CDBG, State Gas Tax, ACMD, Measure R, Measure M, Impact Fee, Housing, etc., funds that are very highly restricted. CASH MANAGEMENT To obtain flexibility in cash management, the City employs a pooled cash system. Under the pooled cash concept, the City invests the cash of all funds with maturity planned to coincide with cash needs. Idle cash 12 City of Rosemead Management's Discussion and Analysis, Continued Year Ended June 30, 2021 is invested in certain eligible securities as constrained by law and further limited by the City's Investment Policy. The goals of the City's Investment Policy are safety, liquidity, and yield. CAPITAL ASSETS The City of Rosemead's investment in capital assets for its governmental activities as of June 30, 2021, amounts to $47.4 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 completed four major projects during the year including replacement of the HVAC system at the Garvey Park Gymnasium, the Jay Imperial Crosswalk Installation and Sidewalk Replacement Project, a community garden on Del Mar Avenue, and the Rosemead Park walking trail. The projects were funded from a variety of sources including General Fund, Community Development Block Grant, Measure M, Measure R, and Transportation Development Act funds. Additional information on the City of Rosemead's capital assets can be found in Note No. 6, found on pages 43 of the Basic Financial Statements. Capital Assets (net of depreciation) Governmental Activities 2021 2020 Land $ 4,417,104 $ 4,417,104 Buildings 13,877,201 13,541,563 Improvements other than buildings 3,237,898 3,463,788 Machinery and equipment 83,288 107,670 Autos and trucks 230,855 50,849 Furniture and office equipment 13,605 46,450 Infrastructure 25,279,676 26,441,197 Construction in progress 305,176 757,242 Total $ 47,444,803 $ 48,825,863 DEBT ADMINISTRATION At the end of the current fiscal year, the Successor Agency for the Rosemead Community Development Commission had total bonded debt outstanding of $22.8 million, a decrease of $2.3 million from the prior year. The debt it is backed by future property tax increment revenue. For more detailed information about the Successor's Agency Long Term Debt, please refer to Note No. 13 on pages 60-63 of the Basic Financial Statements. ECONOMIC FACTORS AND NEXT YEAR'S BUDGET Although the focus of this Annual Report is the economic condition of the City in the fiscal year ended June 30, 2021, in preparing the budget for Fiscal Year 2021-22, management continued to give special consideration of the ongoing effects of the COVID-19 pandemic on the local and national economies. Like all U.S. metropolitan areas, the San Gabriel Valley was impacted by the COVID-19 pandemic. While the 13 City of Rosemead Management's Discussion and Analysis, Continued Year Ended June 30, 2021 "Blueprint for a Safer Economy," announced by Governor Newsome, was lifted in June 2021, the City's Transient Occupancy Tax (TOT) revenue and other community services related revenues had significant shortfalls due to reduced services and activities, which translated to reduced revenues. Despite these setbacks, with the loosening of the COVID-19 restrictions, we are cautiously optimistic that these revenue sources will be back to their pre -pandemic levels in the near future. In addition to the federal funds already received from the American Rescue Plan Act, the City will continue to pursue federal and state assistance to mitigate the direct costs and loss of revenue attributable to the impacts of the COVID-19 pandemic. Staff remains ready to recommend adjustments to revenues and expenditures as events unfold and is committed to providing the highest quality of services given the resources available. The City has maintained its strong financial position through prudent and sound fiscal management and will continue to monitor key economic indicators, sources of revenues, and spending levels as part of its sound conservative fiscal approach. 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. 14 Basic Financial Statements ,, ' to -• • CITY OF ROSEMEAD, CALIFORNIA STATEMENT OF NET POSITION JUNE 30, 2021 Assets: Cash and investments Receivables: Accounts Notes and loans Accrued interest Prepaid costs Due from other governments Capital assets, not being depreciated Capital assets, net of depreciation Net pension asset Total Assets Deferred Outflows of Resources: Deferred outflows related to pensions Deferred outflows related to other post employment benefits Total Deferred Outflows of Resources Liabilities: Accounts payable Accrued liabilities Unearned revenue Deposits payable Due to other governments Compensated absences, due within one year Noncurrent liabilities: Compensated absences, due in more than one year Net pension liability, due in more than one year Net other post employment benefits liability, due in more than one year Total Liabilities Deferred Inflows of Resources: Deferred inflows related to pensions Deferred inflows related to other post employment benefits Total Deferred Inflows of Resources Net Position: Investment in capital assets Restricted: Community services Low and moderate income housing Public works Unrestricted Total Net Position The notes to financial statements are an integral part of this statement. 15 Governmental Activities $ 54,801,041 790,714 3,689,517 71,773 56,687 2,006,654 4,722,280 42, 722, 523 951,026 109,812,215 2,358,523 207,967 2,566,490 2,008,569 435,961 9,239,327 1,188,173 3,463 315,757 348,546 9,007,798 494.841 23,042,435 995,818 396,402 1,392,220 47, 444, 803 4,380,756 417,303 17, 058,125 18, 643, 063 $ 87,944,050 CITY OF ROSEMEAD, CALIFORNIA STATEMENT OF ACTIVITIES FOR THE YEAR ENDED JUNE 30, 2021 General Revenues: Taxes: Property taxes, levied for general purpose Sales taxes Transient occupancy taxes Franchise taxes Othertaxes Use of money and property Other Total General Revenues Change in Net Position Net Position at the Beginning of the Year, as Originally Reported Restatement Net Position at the Beginning of the Year, as restated Net Position at the End of the Year The notes to financial statements are an integral part of this statement. 16 10,740,563 5,534,244 1,405,397 1,292,066 86,484 287,628 40.151 19,386,533 4,297,816 80,261,474 3,384,760 83,646,234 $ 87,944,050 Net(Expenses) Revenues and Changesin Program Revenues Net Position Operating Capital Charges for Contributions Contributions Governmental Expenses Services and Grants and Grants Activities Functions/Programs Governmental Activities: General government $ 4,659,583 $ 357,513 $ 1,158,763 $ - $ (3,143,307) Public safety 10,679,425 643,020 156,727 1,145,154 (8,734,524) Community development 3,411,076 2,634,298 1,976,439 - 1,199,661 Parks and recreation 1,916,949 163,168 - - (1,753,781) Public works 9,372,263 2,781,446 3,298,354 635,697 (2,656,766) Total Governmental Activities $ 30,039,296 $ 6,579,445 $ 6,590,283 $ 1,780,851 (15,088,717) General Revenues: Taxes: Property taxes, levied for general purpose Sales taxes Transient occupancy taxes Franchise taxes Othertaxes Use of money and property Other Total General Revenues Change in Net Position Net Position at the Beginning of the Year, as Originally Reported Restatement Net Position at the Beginning of the Year, as restated Net Position at the End of the Year The notes to financial statements are an integral part of this statement. 16 10,740,563 5,534,244 1,405,397 1,292,066 86,484 287,628 40.151 19,386,533 4,297,816 80,261,474 3,384,760 83,646,234 $ 87,944,050 CITY OF ROSEMEAD, CALIFORNIA BALANCE SHEET GOVERNMENTALFUNDS JUNE 30, 2021 Assets: Cash and investments Receivables: Accounts Notes and loans Accrued interest Prepaid costs Due from other governments Due from other funds Total Assets Liabilities, Deferred Inflows of Resources, and Fund Balances: Liabilities: Accounts payable Accrued liabilities Unearned revenues Deposits payable Due to other governments Due to other funds Total Liabilities Deferred Inflows of Resources: Unavailable revenues Total Deferred Inflows of Resources Fund Balances: Nonspendable: Notes and loans Prepaid costs Restricted: Community services Low and moderate income housing Public works Committed: Capital projects Reserve contingency Assigned: Building maintenance Tree in lieu Unassigned Total Fund Balances Total Liabilities, Deferred Inflows of Resources, and Fund Balances Special Other Total American Governmental Governmental General Rescue Plan Funds Funds $ 26,280,578 $ 8,939,327 $ 18,780,563 $ 54,000,468 774,860 - 15,854 790,714 304,757 - 3,384,760 3,689,517 44,486 - 26,092 70,578 40,687 - 16,000 56,687 1,465,885 - 540,769 2,006,654 44,891 - - 44,891 $ 28,956,144 $ 8,939,327 $ 22,764,038 $ 60,659,509 $ 1,505,533 $ - $ 478,404 $ 1,983,937 400,447 - 35,514 435,961 - 8,939,327 300,000 9,239,327 1,143,234 - 44,939 1,188,173 3,463 - - 3,463 - - 44,891 44,891 3,052,677 8,939,327 903,748 12,895,752 315,855 - 77,679 393,534 315,855 - 77,679 393,534 77,671 - - 77,671 40,687 - 16,000 56,687 - - 4,380,756 4,380,756 - - 417,303 417,303 - - 17,058,125 17,058,125 765,760 - - 765,760 7,219,572 - - 7,219,572 71,617 - - 71,617 58,650 - - 58,650 17,353,655 - (89,573) 17,264,082 25,587,612 - 21,782,611 47,370,223 $ 28,956,144 $ 8,939,327 $ 22,764,038 $ 60,659,509 The notes to financial statements are an integral part of this statement. 17 CITY OF ROSEMEAD, CALIFORNIA RECONCILIATION OF THE BALANCE SHEET OF GOVERNMENTAL FUNDS TO THE STATEMENT OF NET POSITION JUNE 30, 2021 Amounts reported for governmental activities in the statement of net position are different because: Total fund balances - governmental funds Capital assets used in governmental activities are not financial resources and, therefore, are not reported in the funds. Compensated absences are not due and payable in the current period, and therefore, are not reported in the funds. 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. CalPERS Miscellaneous Plan net pension liability PARS Retirement Enhancement Plan net pension asset 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 Changes in assumptions Difference between expected and actual experiences Net difference between projected and actual earnings on plan investments Difference in proportionate share 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 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 Difference between expected and actual experiences Net difference between projected and actual earnings on plan investments Adjustments due to differences in proportions 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. 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 Revenues reported as unavailable revenue in the governmental funds are recognized in the statement of activities. 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. Net Position of Governmental Activities The notes to financial statements are an integral part of this statement. 18 (64,247) (86,160) (287,929) (557,482) (995,818) (494, 841) (396,402) 393,534 783,107 $ 87,944,050 $ 47,370,223 47,438,832 (664,303) $ (9,007,798) 951,026 (8,056,772) 1,013,310 12,730 558,937 267,592 505,954 2,358,523 207,967 207,967 (64,247) (86,160) (287,929) (557,482) (995,818) (494, 841) (396,402) 393,534 783,107 $ 87,944,050 CITY OF ROSEMEAD, CALIFORNIA STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES GOVERNMENTALFUNDS FOR THE YEAR ENDED JUNE 30, 2021 Revenues: Taxes Licenses and permits Intergovernmental Charges for services Use of money and property Fines and forfeitures Contributions Developer participation Miscellaneous Total Revenues Expenditures: Current: General government Public safety Community development Parks and recreation Public works Capital outlay Total Expenditures Net Change in Fund Balances Fund Balances, Beginning of Year Restatements Fund Balances, Beginning of Year, as restated Fund Balances at the End of the Year General Special Revenue Fund American Rescue Plan Other Governmental Funds Total Governmental Funds $ 18,935,758 $ - $ 146,311 $ 19,082,069 2,492,893 - - 2,492,893 443,580 - 10,597,464 11,041,044 491,257 - 489,446 980,703 267,980 - 18,881 286,861 598,032 - - 598,032 - - 78,558 78,558 59,434 - 4,250 63,684 23,288,934 - 11,334,910 34,623,844 4,041,073 - 546,085 4,587,158 10,265,963 - 308,657 10,574,620 1,768,206 - 1,581,003 3,349,209 1,685,870 - 21,127 1,706,997 3,966,923 - 3,131,900 7,098,823 181,768 - 759,809 941,577 21,909,803 - 6,348,581 28,258,384 1,379,131 - 4,986,329 6,365,460 24,208,481 - 13,411,522 37,620,003 3,384,760 3,384,760 24,208,481 - 16,796,282 41,004,763 $ 25,587,612 $ - $ 21,782,611 $ 47,370,223 The notes to financial statements are an integral part of this statement. 19 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, 2021 Amounts reported for governmental activities in the statement of activities are different because: Net change in fund balances -total governmental funds Governmental funds report capital outlays as expenditures. However, in the statement of activities, the cost of these assets is allocated over their estimated useful lives and reported as depreciation expense. This is the amount by which capital outlays exceeded depreciation expense in the current period. Capital outlay Depreciation 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. 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. 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. 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. 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. Change in Net Position of Governmental Activities The notes to financial statements are an integral part of this statement. 20 $ 1,261,785 (2,628,072) 6,365,460 (1,366,287) (13,737) (609,771) 113,268 (287,499) 96,382 $ 4,297,816 CITY OF ROSEMEAD, CALIFORNIA STATEMENT OF NET POSITION PROPRIETARY FUNDS JUNE 30, 2021 Assets: Current Assets: Cash and investments Receivables: Accrued interest Total Current Assets Noncurrent Assets: Capital assets, net of accumulated depreciation Total Noncurrent Assets Total Assets Liabilities: Current Assets: Accounts payable Total Current Liabilities Total Liabilities Net Position: Investment in capital assets Unrestricted Total Net Position The notes to financial statements are an integral part of this statement. 21 Governmental Activities Internal Service Funds $ 800,573 1,195 801,768 5,971 5,971 807,739 24,632 24,632 24,632 5,971 777,136 $ 783,107 CITY OF ROSEMEAD, CALIFORNIA STATEMENT OF REVENUES, EXPENSES AND CHANGES IN FUND NET POSITION PROPRIETARY FUNDS FOR THE YEAR ENDED JUNE 30, 2021 Net Position: Net Position at the Beginning of the Year 686,725 Net Position at the End of the Year $ 783,107 The notes to financial statements are an integral part of this statement. 22 Governmental Activities Internal Service Funds Operating Revenues: Charges for services $ 309,500 Miscellaneous 41,920 Total Operating Revenues 351,420 Operating Expenses: Contractual services 241,032 Depreciation expense 14,773 Total Operating Expenses 255,805 Operating Income 95,615 Nonoperating Revenues (Expenses): Interest revenue 767 Total Nonoperating Revenues(Expenses) 767 Changes in Net Position 96,382 Net Position: Net Position at the Beginning of the Year 686,725 Net Position at the End of the Year $ 783,107 The notes to financial statements are an integral part of this statement. 22 CITY OF ROSEMEAD, CALIFORNIA STATEMENT OF CASH FLOWS PROPRIETARY FUNDS FOR THE YEAR ENDED JUNE 30, 2021 Cash Flows from Operating Activities: Cash received from customers and users Cash received from interfund service provided Cash paid to suppliers for goods and services Net Cash Provided by Operating Activities Net Increase in Cash and Cash Equivalents Cash and Cash Equivalents at the Beginning of the Year Cash and Cash Equivalents at the End of the Year Reconciliation of Operating Income to Net Cash Provided by Operating Activities: Operating income Adjustments to reconcile operating income net cash provided by operating activities: Depreciation Increase in accounts payable Total Adjustments Net Cash Provided by Operating Activities Governmental Activities Internal Service Funds $ 41,920 309,500 (222,441) 128,979 128,551 672,022 $ 800,573 $ 95,615 14,773 18,591 33,364 $ 128,979 The notes to financial statements are an integral part of this statement. 23 CITY OF ROSEMEAD, CALIFORNIA STATEMENT OF FIDUCIARY NET POSITION FIDUCIARY FUNDS JUNE 30, 2021 Private -Purpose Liabilities: Accrued interest Long-term liabilities: Bonds payable, due within one year Bonds payable, due in more than one year Total Liabilities Net Position: Held in trust for the dissolution of the former Redevelopment Agency Total Net Position The notes to financial statements are an integral part of this statement. 24 242,704 2,497,014 21,546,262 24,285,980 (17,188, 609) $ (17,188,609) Trust Fund Successor Agency Assets: Cash and investments $ 5,495,021 Notes and loans receivable 201,314 Prepaid costs 129,209 Restricted cash and investments with fiscal agents 1,123,012 Total Assets 6,948,556 Deferred Outflows of Resources: Deferred charge on refunding 148,815 Total Deferred Outflows of Resources 148,815 Liabilities: Accrued interest Long-term liabilities: Bonds payable, due within one year Bonds payable, due in more than one year Total Liabilities Net Position: Held in trust for the dissolution of the former Redevelopment Agency Total Net Position The notes to financial statements are an integral part of this statement. 24 242,704 2,497,014 21,546,262 24,285,980 (17,188, 609) $ (17,188,609) CITY OF ROSEMEAD, CALIFORNIA STATEMENT OF CHANGES IN FIDUCIARY NET POSITION FIDUCIARY FUNDS FOR THE YEAR ENDED JUNE 30, 2021 Additions: Taxes Interest and change in fair value of investments Total Additions Deductions: Administrative expenses Interest expense Contributions to other governments Total Deductions Change in Net Position Net Position at the Beginning of the Year Net Position at the End of the Year The notes to financial statements are an integral part of this statement. 25 Private -Purpose Trust Fund Successor Agency $ 4,204,501 1,595 4,206,096 84,442 1,037,204 452,473 1,574,119 2,631,977 (19,820,586) $ (17,188,609) Notes to the Financial Statements THIS PAGE INTENTIONALLY LEFT BLANK CITY OF ROSEMEAD, CALIFORNIA NOTES TO FINANCIAL STATEMENTS JUNE 30, 2021 Note 1: Summary of Significant Accounting Policies........................................................................28 a. Reporting Entity b. Basis of Accounting and Measurement Focus c. Major and Fiduciary Fund Types d. Investments e. Cash Equivalents f. Capital Assets g. Compensated Absences h. Prepaid Items i. Fund Balance j. Use of Estimates k. Pension Plans I. Other Post -Employment Benefit Plans (OPEB) m. Property Taxes n. Deferred Outflows and Deferred Inflows of Resources o. Changes in Accounting Principles and New GASB Pronouncements Note 2: Stewardship, Compliance, and Accountability.....................................................................37 a. Deficit Fund Balances/Net Position b. Budgetary Note 3: Cash and Investments..........................................................................................................38 Note 4: Loans Receivable.................................................................................................................41 Note 5: Interfund Balances................................................................................................................42 Note6: Capital Assets.......................................................................................................................43 Note 7: Compensated Absences......................................................................................................44 Note8: Risk Management.................................................................................................................44 a. Description of Self -Insurance Pool Pursuant to Joint Powers Agreement b. Primary Self -Insurance Programs of the Authority c. Purchased Insurance d. Adequacy of Protection Note 9: Defined Benefit Pension Plans.............................................................................................46 a. Aggregate Information on all Defined Benefit Pension Plans b. Defined Benefit Pension Plan — CaIPERS c. PARS Retirement Enhancement Plan Note 10: Employees Retirement Plan.................................................................................................56 Note 11: Post -Employment Benefit Plan.............................................................................................56 Note 12: Commitments and Contingencies........................................................................................60 Note 13: Successor Agency................................................................................................................60 a. Cash and Investments b. Long -Term Debt c. Pledged Revenue Note 14: Net Position and Fund Balance Restatement......................................................................63 0 THIS PAGE INTENTIONALLY LEFT BLANK 27 CITY OF ROSEMEAD, CALIFORNIA NOTES TO FINANCIAL STATEMENTS JUNE 30, 2021 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 residents, 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, information technology, 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 orthere 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 Authori 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. O CITY OF ROSEMEAD, CALIFORNIA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2021 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. CITY OF ROSEMEAD, CALIFORNIA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2021 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 government's governmental, proprietary, and fiduciary funds are presented after the government -wide financial statements. These statements display information about major funds individually and non -major funds in the aggregate for governmental and enterprise funds. Fiduciary statements include financial information for fiduciary funds and similar component units. Fiduciary funds of the City primarily represent assets held by the City in custodial capacity for other individuals or organizations. Funds In the fund financial statements, governmental funds are presented using the modified -accrual basis of accounting. Their revenues are recognized when they become measurable and available as net current assets. Measurable means that the amounts can be estimated, or otherwise determined. Available means that the amounts were collected during the reporting period or soon enough thereafter to be available to finance the expenditures accrued for the reporting period. The City uses a sixty-day availability period except for grants which is 120 days. 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. i CITY OF ROSEMEAD, CALIFORNIA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2021 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. Fiduciary Funds The City maintains one fiduciary fund type, a private -purpose trust fund which uses the economic resources measurement focus and the accrual basis of accounting. 31 CITY OF ROSEMEAD, CALIFORNIA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2021 Note 1: Summary of Significant Accounting Policies (Continued) 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 residents. • American Rescue Plan Fund—Accounts forthe City's portion of the funds received through the American Rescue Plan Act of 2021. The Act provides a total of $250 billion in assistance to states, counties, municipalities, territories, and tribal governments to cover expenses, make up for lost revenue and east the overall economic impact from the COVID-19 pandemic. 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. 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. 9 CITY OF ROSEMEAD, CALIFORNIA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2021 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 Full time employees earn from 10 to 16 days per year, depending upon their length of employment. Accruals are capped at two years the employee's annual accrual rate. Management employees also earn either 60 or 80 hours of administrative leave based on level of management. Vacation and administrative leave hours are payable to employees at the time used or upon termination of employment. These hours are accrued when incurred in the government -wide level financial statements. 33 CITY OF ROSEMEAD, CALIFORNIA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2021 Note 1: Summary of Significant Accounting Policies (Continued) In accordance with generally accepted accounting principles, a liability is recorded for unused vacation and similar compensatory leave balances since the employees' entitlement to these balances is attributable to services already rendered and it is probable that virtually all of these balances will be liquidated by either paid time off or payments upon termination or retirement. All vacation is accrued when incurred in the government -wide level financial statements. All unused vacation and administrative leave hours are accrued when incurred in the government -wide level financial statements. A current liability is accrued in the governmental funds for employee leave benefits expected to be paid from expendable, available financial resources as of the balance sheet date. Compensated absences are primarily liquidated by the General Fund. 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. 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 Director 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. 34 CITY OF ROSEMEAD, CALIFORNIA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2021 Note 1: Summary of Significant Accounting Policies (Continued) Use of Estimates The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect certain reported amounts and disclosures. Accordingly, actual results could differ from those estimates. 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. CalPERS 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. CalPERS-Cost sharing Multiple -Employer Plan: Valuation Date (VD) Measurement Date (MD) Measurement Period (MP) PARS -Single Employer Agent Plan: Valuation Date (VD) Measurement Date (MD) Measurement Period (MP) June 30, 2019 June 30, 2020 July 1, 2019 to June 30, 2020 June 30, 2020 June 30, 2021 July 1, 2020 to June 30, 2021 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, 2020 Measurement Period (MP) July 1, 2019 to June 30, 2020 35 CITY OF ROSEMEAD, CALIFORNIA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2021 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 All other amounts m. Property Taxes Expected average remaining service lifetime (EARSL) (8.4 Years at June 30, 2019) The County of Los Angeles is responsible for the assessment, levy, and collection of property taxes for all properties within Los Angeles County and subsequently remits the amount due to the City in installments during the year. The County is permitted by State Law (Article XIII A of the California Constitution) to levy taxes at one percent (1%) of full market value at the time of purchase and can increase the property's value by no more than two percent (2%) per year. The property taxes are recorded initially in a County pool and are then allocated to cities. Prior to the passage of Proposition 13, which established the one percent (1 %) limit, Rosemead was one of numerous cities in California that either levied no general property taxes or which levied very low rates. Because the property tax allocation after Proposition 13 was based on the allocation prior to the proposition passage, these "no -low cities" would not have received a portion of the 1 % levy. In response, the California Legislature adopted AB 1197 which provided these cites with a portion of the County's share of the tax levy. The City records property taxes as revenue when received from the County, except at year- end, when property taxes received within 60 days are accrued as revenue. Property taxes are assessed and collected each fiscal year according to the following property tax calendar: Lien date January 1 Levy date July 1 Due dates November 1 and February 1 Collection dates December 10 and April 10 n. 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 CT -0 CITY OF ROSEMEAD, CALIFORNIA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2021 Note 1: Summary of Significant Accounting Policies (Continued) 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. o. Changes in Accounting Principles and New GASB Pronouncements The City implemented Government Accounting Standards Board (GASB) Statement No. 84, Fiduciary Activities during fiscal year 2020-21. The requirements of this Statement will enhance consistency and comparability by (1) establishing specific criteria for identifying activities that should be reported as fiduciary activities and (2) clarifying whether and how business -type activities should report their fiduciary activities. Greater consistency and comparability enhance the value provided by the information reported in financial statements for assessing government accountability and stewardship. The City's former agency funds did not qualify as custodial funds under the new standard. These were deposit accounts and no restatement of fund balance was necessary. The City early adopted GASB Statement No. 98, the Annual Comprehensive Financial Report, which establishes the term annual comprehensive financial report and its acronym ACFR. The new term and acronym replace instances of comprehensive annual financial report and its acronym in generally accepted accounting principles for state and local governments. This statement was developed in response to concerns raised by stakeholders that the common pronunciation of the acronym for comprehensive annual financial report sounds like a profoundly objectionable racial slur. This Statement's introduction of the new term is founded on a commitment to promoting inclusiveness. II. STEWARDSHIP, COMPLIANCE, AND ACCOUNTABILITY Note 2: Stewardship, Compliance, and Accountability a. Deficit Fund Balances/Net Position The Community Development Block Grant (CDBG) and City Grants nonmajor special revenue funds reported deficit fund balances in the amounts of $11,894 and $77,679, respectively, as of June 30, 2021. The fund deficit balances are due to the timing of grant reimbursements from the grantor agencies. 37 CITY OF ROSEMEAD, CALIFORNIA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2021 Note 2: Stewardship, Compliance, and Accountability (Continued) b. Budgetary A budgetary comparison schedule is not presented for the American Rescue Plan Fund as there were no budget or actual results. III. DETAILED NOTES ON ALL FUNDS Note 3: Cash and Investments Cash and investments as of June 30, 2021, are classified in the accompanying financial statements as follows: Statement of Net Position Cash and Investments $ 54,801,041 Statement of Fiduciary Net Position Cash and Investments 5,495,021 Restricted Cash and Investment with Fiscal Agents 1,123,012 Total Cash and Investment $ 61,419,074 Cash and Investments as of June 30, 2021, consist of the following: Deposits with financial institutions $ 8,330,343 Imestm ents 53, 088, 731 Total Cash and Investments $ 61,419,074 Investments Authorized by the California Government Code and the City's Investment Policy The table below identifies the investment types that are authorized for the City by the California Government Code and the City's investment policy. The table also identifies certain provisions of the California Government Code (or the City's investment policy, if more restrictive) that address interest rate risk, credit risk, and concentration of credit risk. This table does not address investments of debt proceeds held by bond trustee that are governed by the provisions of debt agreements of the City, rather than the general provisions of the California Government Code or the City's investment policy. Authorized Investment Authorized by investment Maximum Policy Maturity Maximum Maximum Percentage Investment in 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 $75M C CITY OF ROSEMEAD, CALIFORNIA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2021 Note 3: Cash and Investments (Continued) 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: Investment State investment pool Certificates of Deposit U.S. agency securities Money Market Mutual Funds Medium-term notes Held by bond trustee Money Market Mutual Funds Total Credit Risk Remaining Maturity (in Months) 12 Months 13 to 24 25 to 60 or Less months months Total $ 43,854,988 $ - $ - $ 43,854,988 755,336 2,305,484 782,759 3,843,579 - 340,948 531,711 872,659 16,490 - - 16,490 508,115 758,840 2,111,048 3,378,003 1,123,012 - - 1,123,012 $ 46,257,941 $ 3,405,272 $ 3,425,518 $ 53,088,731 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. Ratings at End of Year Total $ 53,088,731 $ 48,838,069 $ 261,115 $ 788,294 $ 493,230 $ 872,659 $ 542,490 $ 1,292,874 G Minimum Legal S&P Ratings Moody's Rating Investment Type Totals Rating NIA A- A A+ AA+ A2 A3 State Investment Pool $43,854,988 NIA $43,854,988 $ - $ - $ - $ - $ - $ - CerlificatesofDeposit 3,843,579 NIA 3,843,579 - - - - - - U.S.Agency Secunties 872,659 NIA - - - - 872,659 - - Medium -Term Notes 3,378,003 A - 261,115 788,294 493,230 - 542,490 1,292,874 Money Market Mutual Funds 16,490 Multiple 16,490 - - - - - - Held by Bond Trustee. M oney M aiket M utual Funtls 1,123,012 Multiple 1,123,012 Total $ 53,088,731 $ 48,838,069 $ 261,115 $ 788,294 $ 493,230 $ 872,659 $ 542,490 $ 1,292,874 G CITY OF ROSEMEAD, CALIFORNIA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2021 Note 3: Cash and Investments (Continued) Concentration of Credit Risk The investment policy of the City contains certain limitations on the amount that can be invested in any one issuer. Investments in any one issuer (other than U.S. Treasury securities, mutual funds, and external investment pools) that represent 5% or more of total As of June 30, 2021 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, 2021, the City had deposits with financial institutions in excess of federal depository insurance limits by $2,373,779 that were held in collateralized accounts. As of June 30, 2021, the Successor Agency had deposits with financial institutions in excess of federal depository insurance limits by $5,226,338 that were held in collateralized accounts. Investment in State Investment Pool The City is a voluntary participant in the Local Agency Investment Fund (LAIF) that is regulated by the California Government Code under the oversight of the Treasurer of the State of California. The fair value of the City's investment in this pool is reported in the accompanying financial statements at amounts based upon the City's pro -rata share of the fair value provided by LAIF for the entire LAIF portfolio (in relation to the amortized cost of that portfolio). The balance available for withdrawal is based on the accounting records maintained by LAIF, which are recorded on an amortized cost basis. 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. .11 CITY OF ROSEMEAD, CALIFORNIA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2021 Note 3: Cash and Investments (Continued) As of June 30, 2021 the City had the following fair value measurements: Note 4: Loans receivable Loans receivable consisted of the following at June 30, 2021. Governmental Activities: Balance June 30, 2020 Investments Not Level Investment Type Totals Subject to Hierachry 1 2 3 State Investment Pool $ 43,854,988 $ 43,854,988 $ - $ - $ - Certificatesofdeposit 3,843,580 - - 3,843,580 - U.S. agency securities 872,658 - - 872,658 - Medium-term notes 3,378,003 - - 3,378,003 - Money Market Mutual Funds 16,490 16,490 - - - Held by bond trustee 3,600 Home Improvements - Money Market Mutual Funds 1,123,012 1,123,012 First Time Home Buyers Program Total $ 53,088,731 $ 44,994,490 F$ r$ 8,094,241 r$ Note 4: Loans receivable Loans receivable consisted of the following at June 30, 2021. Governmental Activities: Balance June 30, 2020 Adjustments* Additions Deletions Balance June 30, 2021 Computer Loans $ 2,058 $ - $ - $ 2,058 $ - San Gabriel Valley Water Co. Loan Phase 1 57,610 - - 8,230 49,380 San Gabriel Valley Water Co. Loan Phase 11 28,806 - - 4,115 24,691 Rio Hondo Community Development Co. Loan 227,086 - - - 227,086 EI Monte Cemetary Association Loan 4,800 - - 1,200 3,600 Home Improvements - 2,799,560 - - 2,799,560 First Time Home Buyers Program 585,200 585,200 Total$ 320,360 $ 3,384,760 $ $ 15,603 $ 3,689,517 *See Note 15 for information on the adjustment. a. Computer Purchase Loans The City provides a computer purchase loan program for all full-time employees for up to $2,000 at 0% interest for a term of 24 months. Loans are repaid through payroll deductions and are due and payable in full upon termination or separation of employment. As of June 30, 2021, all computer purchase loans had been repaid. b. San Gabriel Valley Water Company Phase I The City has an outstanding loan with the San Gabriel Valley Water Company (Phase 1) covering the installation of water facilities on Garvey Avenue from Walnut Grove Avenue to Rosemead Place. The loan was initially made through the Rosemead Redevelopment Agency in the amount of $356,000. On October 26, 1987, the loan was assigned to the City of Rosemead with a balance due of $329,197. The term of the loan is 40 years at 0% interest. Annual payments are 2.5% of the assigned loan amount with final payment due in fiscal year 2026-27. The outstanding balance as of June 30, 2021 is $49,380. c. San Gabriel Valley Water Company Phase II The City has an outstanding loan with the San Gabriel Valley Water Company (Phase 11) covering the installation of water facilities on Garvey Avenue from Walnut Grove Avenue to Delta Avenue. The loan was initially made through the Rosemead Redevelopment Agency in the amount of $194,400. On October 26, 1987, the loan was assigned to the City of Rosemead with a balance due of $164,604. The term of the loan is 40 years at 0% interest. Annual payments are 2.5% of the assigned loan amount with final payment due in fiscal year 2026-27. The outstanding balance at June 30, 2021 is $24,691. 41 CITY OF ROSEMEAD, CALIFORNIA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2021 Note 4: Loans receivable (Continued) d. Rio Hondo Community Development Corporation On April 27, 2010, the City Council entered into an Agreement with Rio Hondo Community Development Corporation (RHCDC) for the production of affordable housing. The RHCDC identified a property for sale (8628 Landis View Lane) that was as suitable for affordable housing for a total purchase price of $428,400. The City Council approved a 0% deferred payment loan in the amount of $227,086 from HOME CHDO Set -Aside Funds and a 0% forgivable loan by the Rosemead Community Development Commission (CDC) from the Low- and Moderate -Income Housing Fund in the amount of $201,314. The unit was restricted as a rental property for low- to moderate -income households and be subject to a 55 -year affordability covenant. The $227,086 City loan is due at the end of the fifty -five- year term, while the loan from the CDC is due only in the event that the RHCDC breaches or defaults on the provision of the Note. e. EI Monte Cemetery The City loaned $12,000 to the EI Monte Cemetery Association in order to finance a portion of the costs for access road improvements at Savannah Memorial Park (California Historic Landmark No. 1046) via adoption of Resolution No. 2013-47. The interest-free loan is to be paid in annual installments of $1,200 over a ten (10) year period. The amount outstanding as of June 30, 2021 is $3,600. f. Home Improvement Loans The City used HOME funds to provide homeowners with funds for home improvements. The loans range from $3,500 to $179,000. The loan term is 30 years, and the loan is neither assumable nor forgivable. Interest rates range from 0% to 3%. The amount outstanding as of June 30, 2021 is $2,799,560. g. First Time Homebuyer Programs The City used HOME funds to provide funding to first time homebuyers to purchase housing within the City of Rosemead. The loans range from $20,000 to $70,000. The loan term is 30 years, and the loan is neither assumable nor forgivable. The amount outstanding as of June 30, 2021 is $585,200. Note 5: Interfund Balances Due to/due from other funds for the year ending June 30, 2021, consisted of $44,891 due to the General Fund from the Community Development Block Grant for $42,391 and Nonmajor Governmental Funds for $2,500 for short-term loans made to those funds from the General Fund resulting from deficit cash balances in those funds. ME CITY OF ROSEMEAD, CALIFORNIA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2021 Note 6: Capital Assets Capital asset activity was as follows for the year ended June 30, 2021: Governmental Activities: Balance June 30, 2020 CIP Transfers Additions Deletions Balance June 30, 2021 Capital assets not being depreciated: - 5,536,168 Machinery and equipment 477,147 - - Land $ 4,417,104 $ - $ - $ - $ 4,417,104 Construction in progress 757,242 (1,451,771) 999,705 - 305,176 Total capital assets not 69,417,163 - (11,080,189) being depreciated 5,174,346 (1,451,771) 999,705 - 4,722,280 Depreciable capital assets Buildings 24,108,914 848,476 - - 24,957,390 Improvements other than buildings 5,461,733 74,435 - - 5,536,168 Machinery and equipment 477,147 - - - 477,147 Autos and trucks 1,435,905 - 262,080 197,470 1,500,515 Furniture and office equipment 764,425 - - - 764,425 Infrastructure 68,888,303 528,860 69,417,163 Total capital assets $ 24,646 Public Safety 27,803 Public Works being depreciated 101,136,427 1,451,771 262,080 197,470 102,652,808 Less: accumulated depreciation for: 14,773 Totals $ 2,642,845 Buildings (10,567,351) - (512,838) - (11,080,189) Improvements other than buildings (1,997,945) - (300,325) - (2,298,270) Machinery and equipment (369,477) - (24,382) - (393,859) Autos and trucks (1,385,056) - (82,074) (197,470) (1,269,660) Furniture and office equipment (717,975) - (32,845) - (750,820) Infrastructure (42,447,106) (1,690,381) (44,137,487) Total accumulated depreciation (57,484,910) (2,642,845) (197,470) (59,930,285) Total capital assets, being depreciated, net 43,651,517 1,451,771 (2,380,765) 42,722,523 Government activities capital assets, net $ 48,825,863 $ - $ (1,381,060) $ - $ 47,444,803 Depreciation expense was charged to functions/programs of the primary government as follows Governmental Activities Total General Government $ 24,646 Public Safety 27,803 Public Works 2,408,570 Community development 14,353 Parks and recreation 152,700 Internal Service Funds 14,773 Totals $ 2,642,845 43 CITY OF ROSEMEAD, CALIFORNIA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2021 Note 7: Compensated Absences Compensated absences activities for the year ended June 30, 2021, is as follows: Beginning Due in Balance Additions Deletions Ending Balance One Year $ 650,566 $ 322,965 $ 309,228 $ 664,303 $ 315,757 Compensated absences have no repayment schedule and become payable as used by employees. Compensated absences are liquidated through the City's General Fund. Note 8: 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. 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 $100,000 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 $100,000 to $500,000 for each occurrence and is evaluated as a percentage of the pool's total incurred costs within the second layer. (4) Incurred costs from $500,000 to $50 million, are distributed based on the outcome of cost allocation within the first and second loss layers. CITY OF ROSEMEAD, CALIFORNIA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2021 Note 8: Risk Management (Continued) The overall coverage limit for each member, including all layers of coverage, is $50 million per occurrence. Subsidence losses also have a $50 million per occurrence limit. The coverage structure is composed of a combination of pooled self-insurance, reinsurance, and excess insurance. Additional information about the various layers of coverage is available on the following website: https://cipia.org/coverage/risk-sharing- op ols/. 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 $75,000 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 $75,000 to $200,000 for each occurrence and is evaluated as a percentage of the pool's total incurred costs within the second layer. (4) Incurred costs from $200,000 to statutory limits are distributed based on the outcome of cost allocation within the first and second loss layers. For 2020-21 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 $250,000 deductible. The Authority has an aggregate limit of $20 million. 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 $76,486,693. 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. 45 CITY OF ROSEMEAD, CALIFORNIA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2021 Note 8: Risk Management (Continued) 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 2020-21. Note 9: 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: 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 pla18n 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. CalPERS 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. .p PARS CalPERS Retirement Miscellaneous Enhancement Plan Plan Total Net Pension Liability $ 9,007,798 $ - $ 9,007,798 Net Pension Asset - 951,026 951,026 Deferred Cutflows of Resources 2,251,055 107,468 2,358,523 Deferred Inflows of Resources 621,729 374,089 995,818 Pension Expense 1,807,899 (109,653) 1,698,246 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 pla18n 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. CalPERS 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. .p CITY OF ROSEMEAD, CALIFORNIA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2021 Note 9: Defined Benefit Pension Plans (Continued) Benefits Provided CalPERS 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, 2021, are summarized as follows 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 CalPERS' 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, 2021 the contributions recognized as a reduction to the net pension liability was $1,446,875. Pension Liability, Pension Expense and Deferred Outflows/Inflows of Resources At June 30, 2021, the City of Rosemead reported a net pension liability for its proportionate share of the net pension liability in the amount of $9,007,798. 47 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 ser\ice 5 years ser\ice 5 years ser\ice 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 7.96% 6.91% 6.75% contribution rates Required employer 14.19% 11.03% 7.73% contribution rates Unfunded Accrued Liability $ 544,171 $ 3,917 $ 2,170 Contribution 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 CalPERS' 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, 2021 the contributions recognized as a reduction to the net pension liability was $1,446,875. Pension Liability, Pension Expense and Deferred Outflows/Inflows of Resources At June 30, 2021, the City of Rosemead reported a net pension liability for its proportionate share of the net pension liability in the amount of $9,007,798. 47 CITY OF ROSEMEAD, CALIFORNIA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2021 Note 9: Defined Benefit Pension Plans (Continued) 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, 2020 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, 2019 rolled forward to June 30, 2020 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, 2019 and 2020 was as follows: Miscellaneous Proportion - June 30, 2019 0.08643% Proportion - June 30, 2020 0.08279% Change - Increase(Decrease) -0.00364% For the year ended June 30, 2021, the City of Rosemead recognized pension expense of $1,807,899. At June 30, 2021, the City reported deferred outflows of resources and deferred inflows of resources related to pensions from the following sources: Deferred Outflows Deferred Inflows The $1,013,310 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, 2022. 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 of Resources of Resources Pension contributions subsequentto measurementdate $ 1,013,310 $ - Changes in assumptions - (64,247) Difference between expected and actual experiences 464,199 189,980 Net differences between projected and actual earnings 267,592 Total on plan investments - - Change in employer's proportion and differences between the employer's contributions and the employer's proportionate share of contributions 505,954 - Adjustmentdue to differences in proportions - (557,482) Total $ 2,251,055 $ (621,729) The $1,013,310 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, 2022. 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 2021 $ 94,692 2022 202,999 2023 189,980 2024 128,345 Total $ 616,016 Actuarial Assumptions and Methods For the measurement period ended June 30, 2020 (the measurement date), the total pension liability was determined by rolling forward the June 30, 2019, total pension liability. M CITY OF ROSEMEAD, CALIFORNIA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2021 Note 9: Defined Benefit Pension Plans (Continued) The June 30, 2019 and the June 30, 2020, total pension liabilities were based on the following actuarial methods and assumptions: Actuarial Cost Method Actuarial Assumptions Discount Rate Inflation Salary Increases Mortality Rate Table (1) Post Retirement Benefit Increase Entry Age Normal Cost Method 7.15% 2.50% Varies by Entry Age and Service Derived using CaIPERS' Membership Data for all Funds Contract COLA up to 2.50% until Purchasing Power Protection Allowance Floor on Purchasing Power applies. (1) The mortality table used vias 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 CalPERS demographic data from 1997 to 2015) that can be found on the CalPERS website. Change of Assumptions For the measurement date June 30, 2020, demographic assumptions and inflation rate were changed in accordance to the CalPERS 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, CalPERS 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 CITY OF ROSEMEAD, CALIFORNIA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2021 Note 9: Defined Benefit Pension Plans (Continued) 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. The expected real rates of return by asset class are as follows: Asset Class (1) Assumed Asset Allocation Real Return Years 1 - 10 (2) Real Return 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 ACFR, 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 $ 13,730,023 $ 9,007,798 $ 5,105,972 Pension Plan Fiduciary Net Position Detailed information about the pension plan's fiduciary net position is available in the separately issued CalPERS 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, 2020 Annual Actuarial Valuation Report. Details of CITY OF ROSEMEAD, CALIFORNIA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2021 Note 9: Defined Benefit Pension Plans (Continued) the benefits provided can be obtained from the actuarial valuation reports. PARS issues a publicly available financial report that includes financial statement and required supplementary information for the Plan II. That report may be obtained writing to PARS, 3961 MacArthur Boulevard, Suite 200, Newport Beach, California, 92660. 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 CalPERS " 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 CalPERS 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 classes hired on or after July 1, 2010. The Plan II's provisions and benefits in effect at June 30, 2021, (measurement date) are summarized as follows: Hire Date Benefit Formula Benefit vesting schedule Benefit payments Retirement age Monthly benefits, as a % of eligible compensation Required employee contribution rates Required employer contribution rates Employees Covered Supplemental On or before June 30, 2010 3% @ 55 less Cal PERS 2.7% @ 55 from date of hire life only annuity 55 0.576% none 1.390% At June 30, 2021, the following employees were covered by the benefit terms: Description Number of Members Inactive employees or beneficiaries currently receiving benefits Active employees Total 51 17 30 47 CITY OF ROSEMEAD, CALIFORNIA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2021 Note 9: 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, 2021 (the measurement date), the employer's contribution rate is 4.8 percent of annual payroll. Employer contribution rates may change if plan contracts are amended. Employer Contributions for the measurement period ended June 30, 2021 are $75,165. Net Pension Liability/(Asset) 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, 2021, using an annual actuarial valuation as of June 30, 2020. Total pension liability $ 2,795,850 Plan fiduciary net position (3,746,876) Net pension (asset) $ (951,026) Plan fiduciary net position as a % of total pension liability 134.0% Actuarial Assumptions and Methods The following actuarial methods and assumptions were used in the June 30, 2020 funding valuation: Actuarial Cost Method Amortization Method Level percent or level dollar Closed, open, or layered periods Amortization period at 06/30/2020 Amortization growth rate Asset Valuation Method Smoothing period Recognition method Corridor Inflation Salary Increases Investment Rate of Return Cost of Living Adjustments Mortality 1 Entry Age Normal Level dollar Closed 2 years 0.00% None None None 2.50% Varies by entry age and service 6.50% 2.00% Consistentwith Non -Industrial rates used to value the Miscellaneous Public Agency CalPERS Pension Plans. CITY OF ROSEMEAD, CALIFORNIA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2021 Note 9: 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, 2020 June 30, 2021 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 NIA The Plan I I'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. 53 CITY OF ROSEMEAD, CALIFORNIA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2021 Note 9: Defined Benefit Pension Plans (Continued) The assumption for the long-term expected rate of return was selected by the City of Rosemead. Below is a projection of the 30 year average return derived by adding expected inflation to expected long-term real returns and reflecting and expected volatility and correlation on the Plan's current asset allocation. The capital market assumptions are per Milliman's investment consulting practice as of June 30, 2021. Changes in Net Pension Liability Total Penson Plan Net Penson Liability/(Asset) Fiduciary Net Liability/(Asset) Changesin Net Pension Liability/(Asset) (a) Position (b) (a)4b) Balances as of June 30, 2020 $ 2,720,673 $ 3,242,637 $ (521,964) Changes for the year: SeMce cost Interest on total pension liability Effect of plan changes Effect of economic/demographic gains or losses Effect of assumptions changes or inputs Benefit payments Employer contributions Member contributions Net investment income Administrative expenses Balances as of June 30, 2021 24,070 - 24,070 171,039 Long -Term Long -Term - 110,471 Expected Expected Arithmetic Geometric Current Real Rate Real Rate Asset Class Index Allocation of Return of Return US Cash BAML 3 -Mon Tbill 5.51% -0.32% -0.32% US Core Fixed Income Bloomberg Barclays Aggregatf 44.37% 1.37% 1.26% US Equity Market Russell 3000 37.47% 5.33% 3.70% Foreign Developed Equity MSCI EAFE NR 6.51% 6.27% 4.52% Emerging Markets Equity MSCI EM NR 4.41% 8.64% 4.95% US REITs FTSE NAREIT Equity REIT 1.73% 5.75% 3.57% Changes in Net Pension Liability Total Penson Plan Net Penson Liability/(Asset) Fiduciary Net Liability/(Asset) Changesin Net Pension Liability/(Asset) (a) Position (b) (a)4b) Balances as of June 30, 2020 $ 2,720,673 $ 3,242,637 $ (521,964) Changes for the year: SeMce cost Interest on total pension liability Effect of plan changes Effect of economic/demographic gains or losses Effect of assumptions changes or inputs Benefit payments Employer contributions Member contributions Net investment income Administrative expenses Balances as of June 30, 2021 24,070 - 24,070 171,039 - 171,039 110,471 - 110,471 (230,403) (230,403) - - 75,165 (75,165) 660,793 (660,793) (1,316) 1,316 $ 2,795,850 $ 3,746,876 $ (951,026) Sensitivity of Net Pension Liability/(Asset) 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%) $ (649,832) $ (951,026) $ (1,207,351) 31 CITY OF ROSEMEAD, CALIFORNIA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2021 Note 9: Defined Benefit Pension Plans (Continued) Pension Plan Fiduciary Net Position The Plan II fiduciary net position at June 30, 2021, was as follows: Assets: Cash and cash equivalents $ 206,484 1 nvestrnents: Fixed income 1,662,689 Stocks 1,813,046 Real estate 64,657 Total I nvestments 3,540,392 Total Assets 3,746,876 Net Position Restricted for Pensions $ 3,746,876 Pension Expense and Deferred Outflows/Inflows of Resources Related to Pensions For the year ended June 30, 2021, the City recognized pension expense of $109,653. At June 30, 2021, 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 $ 94,738 $ 86,160 Change of assumptions 12,730 287,929 Total $ 107,468 $ 374,089 Amounts currently reported as deferred outflows of resources and deferred inflows of resources related to pensions will be recognized in pension expense as follows: Year ended June 30: 2022 2023 2024 2025 55 Deferred Outflows (Inflows) of Resources $ (83,150) (66,515) (46,241) (70,715) $ (266,621) CITY OF ROSEMEAD, CALIFORNIA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2021 Note 10: 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 $41,197 to the plan. Note 11: Post -Employment Benefit Plan Plan Description The City provides post-retirement health care benefit plan through its' contract with the California Public Employees' Retirement System (CaIPERS) pursuant to the Public Employees' Medical and Hospital Care Act (PEMHCA). Employees Covered An employee is eligible for this employer contribution provided they are vested in their CaIPERS pension benefit and commence payment of their pension benefit within 120 days of retirement with the City. Vesting requires at least 5 years of CaIPERS total service. The surviving spouse of an eligible retiree who elected spouse coverage under CaIPERS is eligible for the employee contribution upon the death of the retiree. Employees hired on or before July 1, 2007, who have 20 years or more of service with the City of Rosemead, and who retire from the City, receive an allowance of up to $1,000 per month for health care benefits for the duration of their retirement. Employees hired on or before July 1, 2007, who have 12-19 years of service with the City of Rosemead, and who retire from the City, receive an allowance up to $500 per month for health care benefits for the duration of their retirement. For these retirees, the cost of the health insurance is deducted from the retiree's monthly pension payment, and then reimbursed, up to the limits defined herein exclusive of the required PEMHCA minimum, from the City. At age 65, Medicare automatically becomes the primary provider of health coverage with the City's provided plan becoming secondary. These benefits are for the benefit of the retiree, their spouse, and/or any eligible dependent. For employees hired after July 1, 2007, the City provides the minimum required employer contribution under the CaIPERS Health Plan (HC Plan) for eligible retirees and surviving spouses in receipt of a pension benefit from CaIPERS. The minimum required employer contribution is statutorily set under PEMHCA and is scheduled to increase in the future based on the medical portion of CPI. Minimum required employer contributions for the calendar years 2020 and 2021 were $139 and $143, respectively. Active 62 Inactive employees or beneficiaries currently receiving benefits 34 Total 96 Me CITY OF ROSEMEAD, CALIFORNIA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2021 Note 11: Post -Employment Benefit Plan (Continued) 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, 2020, the City recognized a total of $45,227 it contributions, including an implied subsidy of $43,000, as a reduction to the net OPEB liability. Net OPEB Liability The City's net OPEB liability was measured as of June 30, 2020 and the total OPEB liability used to calculate the net OPEB liability was determined by an actuarial valuation dated June 30, 2020 was used to determine the total OPEB liability, based on the following actuarial methods and assumptions: Valuation Date June 30, 2020 Actuarial Cost Method Entry Age Normal, Level Percentage of Payroll Amortization Method Level percent of pay Amortization Period 18 -year fixed period for 2020/21 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 - 6.3% for 2021, decreasing to an ultimate rate of 4.0% in 2076 Mortality CalPERS 1997-2015 experience study Mortality Improvement Mortality Improvement Scale 2017 for post- retirement mortality Salary Increases Aggregate -3% annually Merit -Cal PERS 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 57 CITY OF ROSEMEAD, CALIFORNIA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2021 Note 11: Post -Employment Benefit Plan (Continued) Expected Long -Term Rate of Return Asset Class Component Global Equity Fixed Income REITs Cash Target Allocation Expected Real PARS -Moderate Rate of Return 48.25% 4.82% 45.00% 1.47% 1.75% 3.76% 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 Contributions - employer Net investment income Benefit payments Administrative expenses Net changes Balance at June 30, 2021 (measurement date 6/30/2020) - 45,227 (45,227) - 136,814 (136,814) (201,882) (201,882) - - (10,252) 10,252 163,248 (30,093) 193,341 $ 4,305,390 $ 3,810,549 $ 494,841 Total OPEB Plan Fiduciary Net OPEB Liability Net Position Liability (a) (b) (c) = (a) - (b) Balance at June 30, 2020 (measurement date 6/30/2019) $ 4,142,142 $ 3,840,642 $ 301,500 Changes recognized for the measurement period: Service cost 115,714 - 115,714 Interest 249,416 - 249,416 Actual vs. expected experience - - - Assumption changes - - - Contributions - employer Net investment income Benefit payments Administrative expenses Net changes Balance at June 30, 2021 (measurement date 6/30/2020) - 45,227 (45,227) - 136,814 (136,814) (201,882) (201,882) - - (10,252) 10,252 163,248 (30,093) 193,341 $ 4,305,390 $ 3,810,549 $ 494,841 CITY OF ROSEMEAD, CALIFORNIA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2021 Note 11: 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, 2020: Current 1 % Decrease Discount Rate 1 % Increase (5.00%) (6.00%) (7.00%) Net OPEB Liability $ 1,039,715 $ 494,841 $ 40,233 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, 2020: Current Healthcare Cost 1% Decrease Trent Rates 1% Increase Net OPEB Liability $ 188,766 $ 494,841 $ 838,396 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, 2021, the City recognized OPEB expense of $66,404. As of fiscal year ended June 30, 2021, the City reported deferred outflows of resources related to OPEB from the following sources: OPEB contributions subsequentto measurement date Differences between expected and actual experience Changes of assumptions Net difference between projected and actual earnings on OPEB investments Total We Deferred Outflows of Deferred Inflows of Resources Resources 6 179,672 $ 363,781 32,621 28,295 - $ 207,967 $ 396,402 CITY OF ROSEMEAD, CALIFORNIA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2021 Note 11: Post -Employment Benefit Plan (Continued) The $179,672 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, 2022. The amounts reported as deferred inflows of resources related to OPEB will be recognized as expense as follows: Note 12: Commitments and Contingencies The City is a member of the Los Angeles County Liability Trust Fund (the Trust Fund), which was set up to pay for litigation involving the Los Angeles County Sheriffs' Department within any of the 40 cities that are served by the Los Angeles County Sheriffs' Department. The Trust Fund was and is being funded by the 40 cities based upon each city's allocated surcharge, calculated as a percentage of each city's contribution to the total contracted amount with the County paid to Los Angeles County for the use of its deputies. Based upon the agreement signed by all of the 40 cities at the time the Trust Fund originated, the cities will be jointly liable for any and all claims filed against the Los Angeles County Sheriffs' Department, regardless of the location within the 40 cities. The City is a defendant in certain legal actions arising in the normal course of operations. In the opinion of management, any liability resulting from such actions will not have a material adverse effect on the City's financial position. Note 13: Successor Agency On December 29, 2011, the California Supreme Court upheld AB IX 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 IX 26 and added certain new provisions. AB IX 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. We Deferred Outflows (Inflows) of Year ended June 30: Resources 2022 $ (79,299) 2023 (50, 829) 2024 (48, 911) 2025 (44, 350) 2026 (62, 921) Thereafter (81, 797) $ (368,107) Note 12: Commitments and Contingencies The City is a member of the Los Angeles County Liability Trust Fund (the Trust Fund), which was set up to pay for litigation involving the Los Angeles County Sheriffs' Department within any of the 40 cities that are served by the Los Angeles County Sheriffs' Department. The Trust Fund was and is being funded by the 40 cities based upon each city's allocated surcharge, calculated as a percentage of each city's contribution to the total contracted amount with the County paid to Los Angeles County for the use of its deputies. Based upon the agreement signed by all of the 40 cities at the time the Trust Fund originated, the cities will be jointly liable for any and all claims filed against the Los Angeles County Sheriffs' Department, regardless of the location within the 40 cities. The City is a defendant in certain legal actions arising in the normal course of operations. In the opinion of management, any liability resulting from such actions will not have a material adverse effect on the City's financial position. Note 13: Successor Agency On December 29, 2011, the California Supreme Court upheld AB IX 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 IX 26 and added certain new provisions. AB IX 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. We CITY OF ROSEMEAD, CALIFORNIA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2021 Note 13: Successor Agency (Continued) 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 $ 5,495,021 Restricted: Cash with Fiscal Agents 1,123,012 Total Cash and Investments $ 6,618,033 b. Long -Term Debt The debt of the Successor Agency as of June 30, 2021 is as follows: 1,388,325 - 106,794 1,281,531 Balance Discount on Issuance Balance Due Within (33,255) July 1, 2020 Additions Deletions June 30, 2021 One Year Bonds Payable: 92,014 Total Long-term Debt $ 26,430,290 $ - $ 2,387,014 Tax Allocation Bonds $ 2,497,014 Series 2010A $ 4,285,000 $ - $ 1,000,000 $ 3,285,000 $ 1,050,000 Tax Allocation Bonds Series 2016 20,805,000 - 1,295,000 19,510,000 1,355,000 Subtotal Bonds 25,090,000 - 2,295,000 22,795,000 2,405,000 Deferred amounts Unamortized bond premium 1,388,325 - 106,794 1,281,531 106,794 Discount on Issuance (48,035) - (14,780) (33,255) (14,780) Total Bonds 1,340,290 - 92,014 1,248,276 92,014 Total Long-term Debt $ 26,430,290 $ - $ 2,387,014 $ 24,043,276 $ 2,497,014 61 CITY OF ROSEMEAD, CALIFORNIA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2021 Note 13: Successor Agency (Continued) Future debt service requirements are as follows: Year Ending June 30 2022 2023 2024 2025 2026 2026-2031 2031-2034 Total Principal $ 2,405,000 2,530,000 2,320,000 1,245,000 1,305,000 7,560,000 5,430,000 $ 22,795,000 Tax Allocation Bonds, Series 2010A Interest $ 1,010,125 886,750 765,500 676,375 612,625 2,028,250 331,400 $ 6,311,025 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, 2021, the balance held in the reserve account was $1,123,000. As of June 30, 2021, the outstanding balance was $3,285,000. 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, 2021, the outstanding balance was $19,510,000. A CITY OF ROSEMEAD, CALIFORNIA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2021 Note 13: Successor Agency (Continued) 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 provide 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 no 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, 2021 is $29,106,025 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 $4,204,501 and the debt service obligation on the bonds was $3,421,375. Note 14: Net Position and Fund Balances Restatement Beginning net position and fund balances have been restated as follows: The $2,799,560 in Home Improvement loans and $585,200 in First Time Homebuyer Program loans were not reported in prior years as the loans were expensed when funded rather than establishing a loan receivable. Upon review of loan documents, and the determination that the loans are non -forgivable, a loan receivable has been established for all loans outstanding at June 30, 2021. This action required the restatement of fund balance in the HOME Special Revenue Fund. 63 Required Supplementary Information CITY OF ROSEMEAD, CALIFORNIA NOTES TO REQUIRED SUPPLEMENTARY INFORMATION JUNE 30, 2021 Budgetary Comparison Information 1. 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. 2. 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 meetings and a final budget must be prepared and adopted no later than June 30. 3. The appropriated budget is prepared by fund and department. The City's Department Directors, 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. 4. 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. 99 CITY OF ROSEMEAD, CALIFORNIA BUDGETARY COMPARISON SCHEDULE GENERALFUND FOR THE YEAR ENDED JUNE 30, 2021 Budgetary Fund Balance, July 1 Resources (Inflows): Taxes Licenses and permits Intergovernmental Charges for services Use of money and property Fines and forfeitures Contributions Miscellaneous Amounts Available for Appropriations Charges to Appropriation (Outflows): General government Public safety Community development Parks and recreation Public works Capital outlay Total Charges to Appropriations Budgetary Fund Balance, June 30 21,000 21,000 46, 074, 681 46, 248, 881 4,688,600 4,701,000 10,821,000 Variance with 1,778,400 1,911,400 3,372,350 Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) $ 24,208,481 $ 24,208,481 $ 24,208,481 $ - 17, 742, 700 17, 742, 700 18, 935, 758 1,193, 058 1,937,500 1,937,500 2,492,893 555,393 179,500 353,700 443,580 89,880 941,200 941,200 491,257 (449,943) 421,000 421,000 267,980 (153,020) 623,300 623,300 598,032 (25,268) 21,000 21,000 46, 074, 681 46, 248, 881 4,688,600 4,701,000 10,821,000 10,551,000 1,778,400 1,911,400 3,372,350 3,372,350 4,057,800 4,057,800 25,000 25,000 24,743,150 24,618,550 $ 21,331,531 $ 21,630,331 65 59,434 38,434 47,497,415 1,248,534 4,041,073 659,927 10,265,963 285,037 1,768,206 143,194 1,685,870 1,686,480 3,966,923 90,877 181,768 (156,768) 21,909,803 2,708,747 $ 25,587,612 $ 3,957,281 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 "' Measurement Date Proportion of the Net Pension Liability Proportionate Share of the Net Pension Liability Covered Payroll Proportionate Share of the Net Pension Liability as Percentage of Covered Payroll Plan Fiduciary Net Position as a Percentage of the Total Pension Liability Notes to Schedule of Proportionate Share of the Net Pension Liability 2021 2020 2019 6/30/2020 6/30/2019 6/30/2018 0.08279% 0.08643% 0.09186% $ 9,007,798 $ 8,856,781 $ 8,688,626 $ 3,832,817 $ 3,903,914 $ 3,761,962 235% 227% 231% 75.3% 75.3% 75.3% Benefit Changes: None. Changes of Assumptions: In 2018, demographic assumptions and inflate rate were changed in accordance to the CalPERS 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 six years are shown. .: 2018 2017 2016 6/30/2017 6/30/2016 6/30/2015 0.09661% 0.09959% 0.11128% $ 9,309,566 $ 8,617,416 $ 7,638,064 $ 3,690,780 $ 3,388,767 $ 3,543,958 252% 254% 216% 73.3% 74.1% 78.4% 67 CITY OF ROSEMEAD, CALIFORNIA COST-SHARING MULTIPLE EMPLOYER MISCELLANEOUS PLANS SCHEDULE OF PLAN CONTRIBUTIONS AS OF JUNE 30, FOR THE LAST TEN FISCAL YEARS Actuarially Determined Contribution Contribution in Relation to the Actuarially Determined Contribution Contribution Deficiency (Excess) Covered Payroll Contributions as a Percentage of Covered Payroll Notes to Schedule of Plan Contributions: 2021 2020 2019 $ 1,013,310 $ 1,446,875 $ 1,389,145 (1,013,310) (1,446,875) (1,389,145) $ 3,832,817 $ 3,832,817 $ 3,903,914 26.4% 37.7% 35.6% The actuarial methods and assumptions used to set the actuarially determined contributions for Fiscal Year 2020-21 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: 2.50% Salary Increases: Varies by Entry Age and Service Payroll Growth: 2.75% Investment Rate of Return: 7.00% Net of Pension Plan Investment and Administrative Expenses, includes Inflation. Retirement Age: The probabilities of Retirement are based on the 2014 CalPERS Experience Study for the period of 1997 to 2011. Mortality: The probabilities of mortality are based on the 2014 CalPERS 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 six years are shown. 2018 2017 2016 $ 1,487,464 $ 1,113,875 $ 1,276,087 (1,487,464) (1,113,875) (1,276,087) $ 3,761,962 $ 3,690,780 $ 3,388,767 39.5% 30.2% 18.1% .• 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 ") Total Pension Liability Service Cost Interest Effect of Liability Gains or Losses Effect of Assumption Changes or Inputs Benefit Payments, Including Refunds of employee Contributions Net Change in Total Pension Liability Total Pension Liability - Beginning Total Pension Liability - Ending (a) Plan Fiduciary Net Position Contribution - Employer Net Investment Income Benefit Payments, Including Refunds of Employee Contributions Other Changes in Fiduciary Net Position Net Change in Fiduciary Net Position Plan Fiduciary Net Position - Beginning Plan Fiduciary Net Position - Ending (b) Plan Net Pension Liability/(Assets) - Ending (a) - (b) Plan Fiduciary Net Position as a Percentage of the Total Pension Liability 2021 2020 2019 $ 24,070 $ 25,883 $ 25,190 171,039 172,888 170,716 110,471 - 17,567 - 32,827 (230,403) (220,611) (206,738) 75,177 (21,840) 39,562 2,720,673 2,742,513 2,702,951 $ 2,795,850 $ 2,720,673 $ 2,742,513 $ 75,165 $ 112,649 $ 131,770 660,793 96,972 187,985 (230,403) (220,611) (206,738) (1,316) (1,441) (1,440) 504,239 (12,431) 111,577 3,242,637 3,255,068 3,143,491 $ 3,746,876 $ 3,242,637 $ 3,255,068 $ (951,026) $(521,964) $ (512,555) 134.0% 119.2% 118.7% Covered Payroll $ 1,780,371 $ 2,300,379 $ 2,238,812 Plan Net Pension Liability/(Asset) as a Percentage of Covered Payroll -53.4% -22.7% -22.9% Notes to Schedule of Changes in the Net Pension Liability (Asset) and Related Ratios: Changes of Assumptions: There were no changes in assumptions. Historical information is required only for measurement for which GASB 68 is applicable. Fiscal year 2015 was the first year of implementation, therefore only six years are shown. 70 2018 2017 2016 $ 37,502 $ 36,410 $ 45,435 171,215 192,440 191,270 - (355,400) - (201,490) (200,693) (218,411) 7,227 (327,243) 18,294 2,695,724 3,022,967 3,004,673 $ 2,702,951 $ 2,695,724 $ 3,022,967 $ 140,376 $ 164,389 $ 265,241 175,605 266,884 (2,345) (201,490) (200,693) (218,411) (1,461) (6,848) (2,624) 113,030 223,732 41,861 3,030,461 2,806,729 2,764,868 $ 3,143,491 $ 3,030,461 $ 2,806,729 $ (440,540) $ (334,737) $ 216,238 116.3% 112.4% 92.8% $ 2,178,892 $ 2,414,510 $ 2,344,184 -20.2% -13.9% 9.2% 71 CITY OF ROSEMEAD, CALIFORNIA PARS RETIREMENT ENHANCEMENT PLAN SCHEDULE OF PLAN CONTRIBUTIONS AS OF JUNE 30, FOR THE LAST TEN FISCAL YEARS Actuarially Determined Contribution Contribution in Relation to the Actuarially Determined Contribution Contribution Deficiency (Excess) Covered Payroll Contributions as a Percentage of Covered Payroll Note to Schedule of Plan Contributions: Valuation Date: 2021 2020 2019 20,100 $ 25,970 $ 73,864 (75,165) (112,649) (131,770) $ (55,065) $ (86,679) $ (57,906) $ 1,780,371 $ 2,300,379 $ 2,238,812 June 30, 2020 4.2% 4.9% 5.9% Methods and assumptions used to determine contribution rates: Actuarial cost method Entry age normal Amortization method Level dollar. closed Remaining amortization period Inflation Salary Increases Investment rate of return Payroll Growth Cost of Living Adjustments Mortality 2 years 2.50% 3.4% to 12.20%, depending on years of service 6.50% 2.75% 2.00% Consistent with the Non-Indusrial rates used to value Miscellaneous Agency CalPERS 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 six years are shown. 72 2018 2017 2016 81,888 $ 88,845 $ 116,244 (140,376) (164,389) (265,241) $ (58,488) $(75,544) $ (148,997) $ 2,178,892 $ 2,414,510 $ 2,344,184 6.4% 6.8% 11.3% 73 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 r'r Total OPEB Liability Service cost Interest on the total OPEB liability Actual and expected experience difference Changes in assumptions Benefit payments Net change in total OPEB liability Total OPEB liability- beginning Total OPEB liability -ending (a) Plan Fiduciary Net Position Contribution - employer Net investment income Benefit payments Administrative expense Net change in plan fiduciary net position Plan fiduciary net position - beginning Plan fiduciary net position - ending (b) Net OPEB Liability -ending (a) -(b) Plan fiduciary net position as a percentage of the total OPEB liability Covered -employee payroll Net OPEB liability as a percentage of covered -employee payroll 2021 2020 2019 2018 $ 115,714 $ 155,962 $ 151,419 $ 147,009 249,416 268,709 253,402 237,920 - (479,267) - - - (42,977) - - (201,882) (165,606) (142,897) (119,682) 163,248 (263,179) 261,924 265,247 4,142,142 4,405,321 4,143,397 3,878,150 4,305,390 4,142,142 4,405,321 4,143,397 45,227 97,132 22,063 158,082 136,814 242,596 223,704 336,797 (201,882) (165,606) (142,897) (119,682) (10,252) (9,719) (9,889) (8,925) (30,093) 164,403 92,981 366,272 3,840,642 3,676,239 3,583,258 3,216,986 3,810,549 3,840,642 3,676,239 3,583,258 $ 494,841 $ 301,500 $ 729,082 $ 560,139 88.5% 92.7% 83.4% 86.5% $ 3,832,817 $ 3,903,914 $ 3,761,962 $ 3,690,780 12.9% 7.7% 19.4% 15.2% Notes to Schedule: (') 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. 74 CITY OF ROSEMEAD, CALIFORNIA OTHER POST -EMPLOYMENT BENEFIT PLAN SCHEDULE OF PLAN CONTRIBUTIONS AS OF JUNE 30, FOR THE LAST TEN FISCAL YEARS Actuarially Determined Contribution Contribution in Relation to the Actuarially Determined Contributions (2) Contribution Deficiency (Excess) Covered -employee payroll Contributions as a percentage of covered -employee payroll Notes to Schedule: 2021 2020 2019 2018 $ 163,000 $ 202,000 $ 197,000 $ 192,000 (179,672) (45,227) (97,132) (22,063) $ (16,672) $ 156,773 $ 99,868 $ 169,937 $ 3,888,373 $ 3,832,817 $ 3,903,914 $ 3,761,962 4.6% 1.2% 2.5% 0.6% 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: June 30, 2019 Actuarial Cost Method: Entry Age Normal, Level Percentage of Payroll Amortization Method: Level percent of pay Amortization Period: 18 -year fixed period for 2020/21 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 -7.25% for 2021, decreasing to an ultimate rate of 4.0% in 2076 Medicare - 6.3% for 2021, decreasing to an ultimate rate of 4.0% in 2076 Mortality: CalPERS 1997-2015 experience study Mortality Improvement: Mortality projected fully generational with Scale MP -19 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. 75 City of Rosemead NONMAJOR FUNDS 201 STATE GAS TAX— Highway User Tax Act (HUTA) (Gas Tax) monies are collected by the State under the title of Motor Vehicle Fuel License Tax and distributed to the City based on population. Funds may be used to construct and maintain streets and highways. 205 TDA ART III —PEDESTRIAN/BIKEWAY GRANT—The Pedestrian and Bikeway Trail grant is distributed by the Los Angeles Metropolitan Transportation Authority for sidewalks, bike trails and similar projects that encourage transportation methods other than vehicle -related. City policy has been to use this money for construction of sidewalks, pedestrian access to schools, parks, or commercial areas. 215 PROPOSITIONA LOCAL RETURN— Proposition A funds are a result of the County one-half cent sales tax increase approved by voters in 1980 which is allocated to cities based on population. The revenue can only be used for transit or transit -related projects. The City has three years in which to use its annual allocation, or the money must be returned to the LA METRO. 220 PROPOSITION C LOCAL RETURN— 80% of the 2 cent Sales and Use Tax collected in the County of Los Angeles because of Proposition C. Monies are used by the cities for public transit, to increase safety and improve road conditions by repairing and maintaining streets heavily used by public transit. The METRO must approve all projects. 225 MEASURE R LOCAL RETURN — A county -wide one-half percent sales tax to fund transportation projects. Receipts can be used to synchronize traffic signals, repair potholes, keep senior, student, and disabled bus fares low and provide community traffic relief. The tax receipts are used primarily to improve public transit and street maintenance projects. 226 MEASURE M LOCAL RETURN — A county -wide one-half percent sales tax to fund transportation projects. Receipts may be used to fund several highways, transit, local street, walking and biking programs. Funding is to improve freeway traffic flow/safety; repair potholes/sidewalks; repave local streets; earthquake -retrofit bridges; synchronize signals; keep senior/disabled/student fares affordable; expand rail/subways/bus systems; improve job/school/airport connections; and create jobs. 230 AIR QUALITY MANAGEMENT DISTRICT FUND — This fund is used to account for revenues received from the Air Quality Management District pursuant to AB 2766. Funds from the registration of every motor vehicle registered or renewed each year in California are distributed directly to the cities in AQMD's jurisdiction for mobile source emission reduction programs. 245 STREET LIGHTING DISTRICT — Monies collected by ad valorem property tax to provide for energy cost and maintenance of the (citywide) Rosemead Lighting District. SB 1307 (Sept 2020) expanded to use of these funds to include those authorized under the Landscaping and Lighting Act of 1972. 25x DEVELOPMENT IMPACT FEE —Development Impact Fees are imposed upon development projects pursuant to Government Code 66066 for mitigating the impact of the development on the ability of ire the City to provide specified public improvements and services. The four categories of capital facilities and equipment that are funded by the development impact fees established by Ordinance 949 are: Fund 250 — Traffic Facilities; Fund 251 — Public Safety Facilities; Fund 252 — General Government Facilities; Fund 253 — Park Facilities. 260 COMMUNITY DEVELOPMENT BLOCK GRANT FUND —Designed to account for those monies received from the United States Department of Housing and Urban Development, Community Development Block Grant Programs are to be expended for economic studies and economic development of the community. 275 HDC HOME PROGRAM — Pursuant to the HOME Investment Partnerships Act, the Department of Housing and Urban Development (HUD) allocates regular HOME funds to the City for the purpose of expanding the City's supply of decent, safe, sanitary, and affordable housing for very low- and low-income families. The source of revenue is from program income offered by the Department of Housing and Urban Development (HUD). 280 HDC SENIOR HOUSING — Operating revenues and expenditures of the Rosemead Housing Development Corporation for senior housing apartments are accounted for in this fund. 202 RMRASBI —The Road and Repair and Accountability Act of 2017 was created to address deferred maintenance on the state highway system and the local street and road system. Funds maybe used for road maintenance and rehabilitation: a) Safety projects; (b) Railroad grade separations; (c) Complete street components, including active transportation purposes, pedestrian and bicycle safety projects, transit facilities, and drainage and stormwater capture projects in conjunction with any other allowable project; and (d) Traffic control devices. 232 GRANT FUND—Accounts for non -repayable funds disbursed or given by Federal, State, County, and Special District Entities. Grant funds are used to fund a specific project or program which requires some level of compliance, reporting, and auditing. 231 MEASURE W — SAFE CLEAN WATER PROGRAM — Accounts for funds collected from a parcel tax of 2.5 cents per square foot impermeable area. Tax receipts will be used to improve water quality, increase local supply, and enhance the community. 227 MEASURE H — These funds are the result of the passage of an LA county Ballot initiative raising the sales tax rate by % of a cent. The revenue is to provide services for the homeless, including funding for mental health services, substance abuse treatment, health care, job training, transportation, outreach, and homelessness prevention. 77 CITY OF ROSEMEAD, CALIFORNIA COMBINING BALANCE SHEET NONMAJOR GOVERNMENTAL FUNDS JUNE 30, 2021 Assets: Cash and investments Receivables: Accounts receivable Notes and loans Accrued interest Prepaid costs Due from other governments Total Assets Liabilities, Deferred Inflows of Resources, and Fund Balances (Deficits): Liabilities: Accounts payable Accrued liabilities Unearned revenues Deposits payable Due to other funds Total Liabilities Deferred Inflows of Resources: Unavailable revenues Total Deferred Inflows of Resources Fund Balances (Deficits): Nonspendable: Prepaid costs Restricted: Community services Low and moderate income housing Public works Unassigned Total Fund Balances (Deficits) Total Liabilities, Deferred Inflows of Resources, and Fund Balances (Deficits) Special Revenue Funds Local Transportation/ State Gas Tax Sidewalk Grant Proposition A Proposition C $ 2,142,030 $ - $ 854,418 $ 1,836,901 8,000 3,029 - 1,205 2,620 - 16,000 - $ 2,153,059 $ - $ 871,623 $ 1,839,521 $ 6,791 $ 6,958 13,749 - $ 114,363 $ 69,211 - 9,897 6,371 124,260 75,582 16,000 2,139,310 - 731,363 1,763,939 2,139,310 - 747,363 1,763,939 $ 2,153,059 $ - $ 871,623 $ 1,839,521 CITY OF ROSEMEAD, CALIFORNIA COMBINING BALANCE SHEET NONMAJOR GOVERNMENTAL FUNDS JUNE 30, 2021 (CONTINUED) Assets: Cash and investments Receivables: Accounts receivable Notes and loans Accrued interest Prepaid costs Due from other governments Total Assets Liabilities, Deferred Inflows of Resources, and Fund Balances (Deficits): Liabilities: Accounts payable Accrued liabilities Unearned revenues Deposits payable Due to other funds Total Liabilities Deferred Inflows of Resources: Unavailable revenues Total Deferred Inflows of Resources Fund Balances (Deficits): Nonspendable: Prepaid costs Restricted: Community services Low and moderate income housing Public works Unassigned Total Fund Balances (Deficits) Total Liabilities, Deferred Inflows of Resources, and Fund Balances (Deficits) Special Revenue Funds Air Quality Management Measure R Measure M District Street Lighting $ 2,435,388 $ 2,874,394 $ 419,280 $ 3,077,039 3,482 4,113 603 4,523 - - 18,050 36,100 $ 2,438,870 $ 2,878,507 $ 437,933 $ 3,117,662 $ 1,260 $ 1,682 $ - $ 80,702 932 39 - 4,360 2,192 1,721 - 85,062 2,436,678 2,876,786 437,933 3,032,600 2,436,678 2,876,786 437,933 3,032,600 $ 2,438,870 $ 2,878,507 $ 437,933 $ 3,117,662 79 CITY OF ROSEMEAD, CALIFORNIA COMBINING BALANCE SHEET NONMAJOR GOVERNMENTAL FUNDS JUNE 30, 2021 Assets: Cash and investments Receivables: Accounts receivable Notes and loans Accrued interest Prepaid costs Due from other governments Total Assets Liabilities, Deferred Inflows of Resources, and Fund Balances (Deficits): Liabilities: Accounts payable Accrued liabilities Unearned revenues Deposits payable Due to other funds Total Liabilities Deferred Inflows of Resources: Unavailable revenues Total Deferred Inflows of Resources Fund Balances (Deficits): Nonspendable: Prepaid costs Restricted: Community services Low and moderate income housing Public works Unassigned Total Fund Balances (Deficits) Total Liabilities, Deferred Inflows of Resources, and Fund Balances (Deficits) Special Revenue Funds 77 13 Development Development Development Impact Fee Impact Fee Impact Fee General Development Traffic Public Safety Government Impact Fee Parks $ 53,080 $ 9,025 $ 63,857 $ 272,126 77 13 93 390 9,038 $ 63,950 $ 272,516 $ 53,157 $ 53,157 9,038 - 272,516 63,950 53,157 9,038 63,950 272,516 $ 53,157 $ 9,038 $ 63,950 $ 272,516 We CITY OF ROSEMEAD, CALIFORNIA COMBINING BALANCE SHEET NONMAJOR GOVERNMENTAL FUNDS JUNE 30, 2021 (CONTINUED) Assets: Cash and investments Receivables: Accounts receivable Notes and loans Accrued interest Prepaid costs Due from other governments Total Assets Liabilities, Deferred Inflows of Resources, and Fund Balances (Deficits): Liabilities: Accounts payable Accrued liabilities Unearned revenues Deposits payable Due to other funds Total Liabilities Deferred Inflows of Resources: Unavailable revenues Total Deferred Inflows of Resources Fund Balances (Deficits): Nonspendable: Prepaid costs Restricted: Community services Low and moderate income housing Public works Unassigned Total Fund Balances (Deficits) Total Liabilities, Deferred Inflows of Resources, and Fund Balances (Deficits) Special Revenue Funds $ 1,090 $ 618,509 $ 462,221 $ 3,058,084 - 7,854 - 3,384,760 - - - 942 - 4,398 69,490 116,396 - 183,652 $ 70,580 $ 4,120,607 $ 470,075 $ 3,246,134 $ 37,089 $ 74,203 $ 7,833 $ 1,123 2,994 359 - 3,604 - 44,939 42,391 - - 82,474 74,562 52,772 4,727 - 4,046,045 - - - - 417,303 - - - - 3,241,407 (11,894) - - - (11,894) 4,046,045 417,303 3,241,407 $ 70,580 $ 4,120,607 $ 470,075 $ 3,246,134 F1 Road Community Rosemead Maintenance Development Housing and Block Grant Development Rehabilitation (CDBG) HOME Program Corporation Account SB1 $ 1,090 $ 618,509 $ 462,221 $ 3,058,084 - 7,854 - 3,384,760 - - - 942 - 4,398 69,490 116,396 - 183,652 $ 70,580 $ 4,120,607 $ 470,075 $ 3,246,134 $ 37,089 $ 74,203 $ 7,833 $ 1,123 2,994 359 - 3,604 - 44,939 42,391 - - 82,474 74,562 52,772 4,727 - 4,046,045 - - - - 417,303 - - - - 3,241,407 (11,894) - - - (11,894) 4,046,045 417,303 3,241,407 $ 70,580 $ 4,120,607 $ 470,075 $ 3,246,134 F1 CITY OF ROSEMEAD, CALIFORNIA COMBINING BALANCE SHEET NONMAJOR GOVERNMENTAL FUNDS JUNE 30, 2021 Assets: Cash and investments Receivables: Accounts receivable Notes and loans Accrued interest Prepaid costs Due from other governments Total Assets Liabilities, Deferred Inflows of Resources, and Fund Balances (Deficits): Liabilities: Accounts payable Accrued liabilities Unearned revenues Deposits payable Due to other funds Total Liabilities Deferred Inflows of Resources: Unavailable revenues Total Deferred Inflows of Resources Fund Balances (Deficits): Nonspendable: Prepaid costs Restricted: Community services Low and moderate income housing Public works Unassigned Total Fund Balances (Deficits) Total Liabilities, Deferred Inflows of Resources, and Fund Balances (Deficits) Special Revenue Funds Total City Grants Clean Water Measure H Governmental Fund Fund Grant Funds $ 208,641 $ 394,480 $ - $ 18,780,563 - 15,854 - - - 3,384,760 - 604 - 26,092 - - - 16,000 107,081 - 10,000 540,769 $ 315,722 $ 395,084 $ 10,000 $ 22,764,038 $ 15,722 $ 60,925 $ 7,500 $ 478,404 - - - 35,514 300,000 - - 300,000 - - 44,939 - - 2,500 44,891 315,722 60,925 10,000 903,748 77,679 - - 77,679 77,679 - - 77,679 16,000 - - - 4,380,756 - - - 417,303 - 334,159 - 17,058,125 (77,679) - - (89,573) (77,679) 334,159 - 21,782,611 $ 315,722 $ 395,084 $ 10,000 $ 22,764,038 T r THIS PAGE INTENTIONALLY LEFT BLANK T' 'CCF�[ )A Fm CITY OF ROSEMEAD, CALIFORNIA COMBINING STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES NONMAJOR GOVERNMENTAL FUNDS FOR THE YEAR ENDED JUNE 30, 2021 Expenditures: Special Revenue Funds Current: Local General government 2,700 Transportation/ 27,999 Public safety State Gas Tax Sidewalk Grant Proposition A Proposition C Revenues: - - - - Taxes $ - $ - $ - $ - Intergovernmental 1,288,759 87,242 1,178,118 919,509 Charges for services 8,000 - 6,730 2,163 Use of money and property 2,138 - 833 1,828 Developer participation - - - - Miscellaneous 1,370,343 - 742,565 1,353,013 Total Revenues 1,298,897 87,242 1,185,681 923,500 Expenditures: Current: General government 2,700 - 129,245 27,999 Public safety 8,919 - - 29,738 Community development - - - - Parks and recreation - - - 2,298 Public works 518,311 - 1,051,638 452,539 Capital outlay - 87,242 - - Total Expenditures 529,930 87,242 1,180,883 512,574 Net Change in Fund Balances 768,967 - 4,798 410,926 Fund Balance (Deficit) at the Beginning of the Year 1,370,343 - 742,565 1,353,013 Restatements - - - - Fund Balances, Beginning of Year, as Restated 1,370,343 742,565 1,353,013 Fund Balance (Deficit) at the End of the Year $ 2,139,310 $ $ 747,363 $ 1,763,939 EM CITY OF ROSEMEAD, CALIFORNIA COMBINING STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES NONMAJOR GOVERNMENTAL FUNDS FOR THE YEAR ENDED JUNE 30, 2021 (CONTINUED) Revenues: Taxes Intergovernmental Charges for services Use of money and property Developer participation Miscellaneous Total Revenues Expenditures: Current: General government Public safety Community development Parks and recreation Public works Capital outlay Total Expenditures Net Change in Fund Balances Fund Balance (Deficit) at the Beginning of the Year Restatements Fund Balances, Beginning of Year, as Restated Fund Balance (Deficit) at the End of the Year Revenue Funds Air Quality Management Measure R Measure M District Street Lighting $ - $ - $ - $ 146,311 690,587 782,461 70,986 1,145,154 2,292 2,939 427 3,366 692,879 785,400 71,413 1,294,831 14,534 239 55,840 20,874 45,536 639,904 297,000 46,402 - - 367,374 67,276 45,536 640,143 325,505 718,124 25,877 654,688 2,111,173 2,158,662 412,056 2,377,912 2,111,173 2,158,662 412,056 2,377,912 $ 2,436,678 $ 2,876,786 $ 437,933 $ 3,032,600 FR CITY OF ROSEMEAD, CALIFORNIA COMBINING STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES NONMAJOR GOVERNMENTAL FUNDS FOR THE YEAR ENDED JUNE 30, 2021 Special Revenue Funds Development Development Impact Fee Development Impact Fee Public General Development Impact Fee Traffic Safety Government Impact Fee Parks Revenues: Taxes $ - $ - $ - $ - Intergovernmental - - - - Charges for services - - - - Use of money and property 57 9 68 285 Developer participation 11,809 1,672 11,682 53,395 Miscellaneous Total Revenues 11,866 1,681 11,750 53,680 Expenditures: Current: General government - - - - Public safety - - - - Community development - - - - Parks and recreation - - - - Public works - - - - Capital outlay - - - - Total Expenditures Net Change in Fund Balances 11,866 1,681 11,750 53,680 Fund Balance (Deficit) at the Beginning of the Year 41,291 7,357 52,200 218,836 Restatements - - - - Fund Balances, Beginning of Year, as Restated 41,291 7,357 52,200 218,836 Fund Balance (Deficit) at the End of the Year $ 53,157 $ 9,038 $ 63,950 $ 272,516 We CITY OF ROSEMEAD, CALIFORNIA COMBINING STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES NONMAJOR GOVERNMENTAL FUNDS FOR THE YEAR ENDED JUNE 30, 2021 (CONTINUED) Revenues: Taxes Intergovernmental Charges for services Use of money and property Developer participation Miscellaneous Total Revenues Expenditures: Current: General government Public safety Community development Parks and recreation Public works Capital outlay Total Expenditures Net Change in Fund Balances Fund Balance (Deficit) at the Beginning of the Year Restatements Fund Balances, Beginning of Year, as Restated Fund Balance (Deficit) at the End of the Year Revenue Funds Community Rosemead Development Housing Block Grant Development (CDBG) HOME Program Corporation 980,668 718,357 760 Road Maintenance and Rehabilitation Account SB1 452,473 1,007,811 472,553 13 3,171 4,250 980,668 719,117 929,289 1,010,982 8,307 14,584 - - 429,450 177,615 866,857 - 18,829 - - - - - - 116,011 329,165 - - - 785,751 192,199 866,857 116,011 194,917 526,918 62,432 894,971 (206,811) 134,367 354,871 2,346,436 - 3,384,760 - - (206,811) 3,519,127 354,871 2,346,436 $ (11,894) $ 4,046,045 $ 417,303 $ 3,241,407 T CITY OF ROSEMEAD, CALIFORNIA COMBINING STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES NONMAJOR GOVERNMENTAL FUNDS FOR THE YEAR ENDED JUNE 30, 2021 Expenditures: Special Revenue Funds Current: Total General government 338,477 - Governmental Public safety City Grants Fund Clean Water Fund Measure H Grant Funds Revenues: 107,081 - - 1,581,003 Taxes $ - $ - $ - $ 146,311 Intergovernmental 700,628 564,711 10,000 10,597,464 Charges for services - - - 489,446 Use of money and property - 695 - 18,881 Developer participation - - - 78,558 Miscellaneous (62,749) - 4,250 Total Revenues 700,628 565,406 10,000 11,334,910 Expenditures: Current: General government 338,477 - 10,000 546,085 Public safety 270,000 - - 308,657 Community development 107,081 - - 1,581,003 Parks and recreation - - - 21,127 Public works - 231,247 - 3,131,900 Capital outlay - - - 759,809 Total Expenditures 715,558 231,247 10,000 6,348,581 Net Change in Fund Balances (14,930) 334,159 - 4,986,329 Fund Balance (Deficit) at the Beginning of the Year (62,749) - - 13,411,522 Restatements - - - 3,384,760 Fund Balances, Beginning of Year, as Restated (62,749) 16,796,282 Fund Balance (Deficit) at the End of the Year $ (77,679) $ 334,159 $ $ 21,782,611 W CITY OF ROSEMEAD, CALIFORNIA BUDGETARY COMPARISON SCHEDULE STATE GAS TAX FOR THE YEAR ENDED JUNE 30, 2021 Charges to Appropriation (Outflows): General government Public safety Public works Capital outlay Total Charges to Appropriations Budgetary Fund Balance, June 30 2,700 2,700 2,700 - Variance with 18,000 8,919 9,081 730,600 Final Budget 518,311 Budget Amounts Actual Positive - Original Final Amounts (Negative) Budgetary Fund Balance, July 1 $ 1,370,343 $ 1,370,343 $ 1,370,343 $ - Resources (Inflows): $ 1,869,743 $ 2,139,310 $ 269,567 Intergovernmental 1,409,700 1,409,700 1,288,759 (120,941) Charges for services 8,000 8,000 8,000 - Use of money and property - - 2,138 2,138 Amounts Available for Appropriations 2,788,043 2,788,043 2,669,240 (118,803) Charges to Appropriation (Outflows): General government Public safety Public works Capital outlay Total Charges to Appropriations Budgetary Fund Balance, June 30 2,700 2,700 2,700 - 18,000 18,000 8,919 9,081 730,600 650,600 518,311 132,289 247,000 247,000 - 247,000 998,300 918,300 529,930 388,370 $ 1,789,743 $ 1,869,743 $ 2,139,310 $ 269,567 FK CITY OF ROSEMEAD, CALIFORNIA BUDGETARY COMPARISON SCHEDULE LOCAL TRANSPORTATION/SIDEWALK GRANT FOR THE YEAR ENDED JUNE 30, 2021 C-8 Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) Budgetary Fund Balance, July 1 $ - $ - $ - $ - Resources (Inflows): Intergovernmental 41,700 41,700 87,242 45,542 Amounts Available for Appropriations 41,700 41,700 87,242 45,542 Charges to Appropriation (Outflows): Capital outlay 41,700 41,700 87,242 (45,542) Total Charges to Appropriations 41,700 41,700 87,242 (45,542) Budgetary Fund Balance, June 30 $ - $ - $ - $ - C-8 CITY OF ROSEMEAD, CALIFORNIA BUDGETARY COMPARISON SCHEDULE PROPOSITION A FOR THE YEAR ENDED JUNE 30, 2021 75 Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) Budgetary Fund Balance, July 1 $ 742,565 $ 742,565 $ 742,565 $ - Resources (Inflows): Intergovernmental 1,237,300 1,237,300 1,178,118 (59,182) Charges for services 20,000 20,000 6,730 (13,270) Use of money and property - - 833 833 Amounts Available for Appropriations 1,999,865 1,999,865 1,928,246 (71,619) Charges to Appropriation (Outflows): General government 163,600 163,600 129,245 34,355 Parks and recreation 38,000 38,000 - 38,000 Public works 958,900 1,190, 991 1,051,638 139,353 Total Charges to Appropriations 1,160,500 1,392,591 1,180,883 211,708 Budgetary Fund Balance, June 30 $ 839,365 $ 607,274 $ 747,363 $ 140,089 75 CITY OF ROSEMEAD, CALIFORNIA BUDGETARY COMPARISON SCHEDULE PROPOSITION C FOR THE YEAR ENDED JUNE 30, 2021 Budgetary Fund Balance, July 1 Resources (Inflows): Intergovernmental Charges for services Use of money and property Amounts Available for Appropriations Charges to Appropriation (Outflows): General government Public safety Parks and recreation Public works Total Charges to Appropriations Budgetary Fund Balance, June 30 $ 1,791,713 $ 1,791,713 3 $ 1,763,939 $ (27,774) Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) $ 1,353,013 $ 1,353,013 $ 1,353,013 $ - 963,200 963,200 919,509 (43,691) 36,000 36,000 2,163 (33,837) - - 1,828 1,828 2,352,213 2,352,213 2,276,513 (75,700) 42,300 42,300 27,999 14,301 20,100 20,100 29,738 (9,638) 80,000 80,000 2,298 77,702 418,100 418,100 452,539 (34,439) 560,500 560,500 512,574 47,926 $ 1,791,713 $ 1,791,713 3 $ 1,763,939 $ (27,774) CITY OF ROSEMEAD, CALIFORNIA BUDGETARY COMPARISON SCHEDULE MEASURE R FOR THE YEAR ENDED JUNE 30, 2021 W Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) Budgetary Fund Balance, July 1 $ 2,111,173 $ 2,111,173 $ 2,111,173 $ - Resources (Inflows): Intergovernmental 772,500 772,500 690,587 (81,913) Use of money and property - - 2,292 2,292 Amounts Available for Appropriations 2,883,673 2,883,673 2,804,052 (79,621) Charges to Appropriation (Outflows): General government 28,000 28,000 14,534 13,466 Public works 256,700 256,700 55,840 200,860 Capital outlay 150,000 150,000 297,000 (147,000) Total Charges to Appropriations 434,700 434,700 367,374 67,326 Budgetary Fund Balance, June 30 $ 2,448,973 $ 2,448,973 $ 2,436,678 $ (12,295) W CITY OF ROSEMEAD, CALIFORNIA BUDGETARY COMPARISON SCHEDULE MEASURE M FOR THE YEAR ENDED JUNE 30, 2021 Budgetary Fund Balance, July 1 Resources (Inflows): Intergovernmental Use of money and property Amounts Available for Appropriations Charges to Appropriation (Outflows): General government Public works Capital outlay Total Charges to Appropriations Budgetary Fund Balance, June 30 09 Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) $ 2,158,662 $ 2,158,662 $ 2,158,662 $ - 818,700 818,700 782,461 (36,239) - - 2,939 2,939 2,977,362 2,977,362 2,944,062 (33,300) 2,600 2,600 - 2,600 46,500 46,500 20,874 25,626 234,000 234,000 46,402 187,598 283,100 283,100 67,276 215,824 $ 2,694,262 $ 2,694,262 $ 2,876,786 $ 182,524 09 CITY OF ROSEMEAD, CALIFORNIA BUDGETARY COMPARISON SCHEDULE AIR QUALITY MANAGEMENT DISTRICT FOR THE YEAR ENDED JUNE 30, 2021 Budgetary Fund Balance, July 1 Resources (Inflows): Intergovernmental Use of money and property Amounts Available for Appropriations Charges to Appropriation (Outflows): Public works Total Charges to Appropriations Budgetary Fund Balance, June 30 Budget Amounts Actual Original Final Amounts $ 412,056 $ 412,056 $ 412,056 71,000 71,000 70,986 - - 427 483,056 483,056 483,469 Variance with Final Budget Positive (Negative) (14) 427 413 30,000 30,000 45,536 (15,536) 30,000 30,000 45,536 (15,536) $ 453,056 $ 453,056 $ 437,933 $ (15,123) U CITY OF ROSEMEAD, CALIFORNIA BUDGETARY COMPARISON SCHEDULE STREET LIGHTING FOR THE YEAR ENDED JUNE 30, 2021 Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) Budgetary Fund Balance, July 1 $ 2,377,912 $ 2,377,912 $ 2,377,912 $ - Resources (Inflows) Taxes - - 146,311 146,311 Intergovernmental 1,000,000 1,000,000 1,145,154 145,154 Use of money and property - - 3,366 3,366 Amounts Available for Appropriations 3,377,912 3,377,912 3,672,743 294,831 Charges to Appropriation (Outflows): General government 11,500 11,500 239 11,261 Public works 727,800 727,800 639,904 87,896 Total Charges to Appropriations 739,300 739,300 640,143 99,157 Budgetary Fund Balance, June 30 $ 2,638,612 $ 2,638,612 $ 3,032,600 $ 393,988 r: CITY OF ROSEMEAD, CALIFORNIA BUDGETARY COMPARISON SCHEDULE DEVELOPMENT IMPACT FEE TRAFFIC FOR THE YEAR ENDED JUNE 30, 2021 Budgetary Fund Balance, July 1 Resources (Inflows): Use of money and property Developer participation Amounts Available for Appropriations Budgetary Fund Balance, June 30 Budget Amounts Original Final $ 41,291 $ 41,291 8,000 8,000 49,291 49,291 Variance with Final Budget Actual Positive Amounts (Negative) $ 41,291 $ 57 57 11,809 3,809 53,157 3,866 $ 49,291 $ 49,291 $ 53,157 $ 3,866 ED CITY OF ROSEMEAD, CALIFORNIA BUDGETARY COMPARISON SCHEDULE DEVELOPMENT IMPACT FEE PUBLIC SAFETY FOR THE YEAR ENDED JUNE 30, 2021 Budgetary Fund Balance, July 1 Resources (Inflows): Use of money and property Developer participation Amounts Available for Appropriations Budgetary Fund Balance, June 30 Budget Amounts Actual Original Final Amounts $ 7,357 $ 7,357 $ 7,357 9 1,200 1,200 1,672 8,557 8,557 9,038 Variance with Final Budget Positive (Negative) 9 472 481 $ 8,557 $ 8,557 $ 9,038 $ 481 U. CITY OF ROSEMEAD, CALIFORNIA BUDGETARY COMPARISON SCHEDULE DEVELOPMENT IMPACT FEE GENERAL GOVERNMENT FOR THE YEAR ENDED JUNE 30, 2021 C• Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) Budgetary Fund Balance, July 1 $ 52,200 $ 52,200 $ 52,200 $ - Resources (Inflows): Use of money and property - - 68 68 Developer participation 6,500 6,500 11,682 5,182 Amounts Available for Appropriations 58,700 58,700 63,950 5,250 Budgetary Fund Balance, June 30 $ 58,700 $ 58,700 $ 63,950 $ 5,250 C• CITY OF ROSEMEAD, CALIFORNIA BUDGETARY COMPARISON SCHEDULE DEVELOPMENT IMPACT FEE PARKS FOR THE YEAR ENDED JUNE 30, 2021 Budgetary Fund Balance, July 1 Resources (Inflows): Use of money and property Developer participation Amounts Available for Appropriations Budgetary Fund Balance, June 30 100 Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) $ 218,836 $ 218,836 $ 218,836 $ - - - 285 285 30,000 30,000 53,395 23,395 248,836 248,836 272,516 23,680 $ 248,836 $ 248,836 $ 272,516 $ 23,680 100 CITY OF ROSEMEAD, CALIFORNIA BUDGETARY COMPARISON SCHEDULE COMMUNITY DEVELOPMENT BLOCK GRANT (CDBG) FOR THE YEAR ENDED JUNE 30, 2021 Budgetary Fund Deficit, July 1 Resources (Inflows): Intergovernmental Charges for services Amounts Available for Appropriations Charges to Appropriation (Outflows): General government Community development Parks and recreation Public works Capital outlay Total Charges to Appropriations Budgetary Fund Deficit, June 30 Budget Amounts Original Final $ (206,811) $ (206,811) 1,663,200 1,936,390 60,000 - 1,516,389 1,729,579 30,200 30,200 1,487,400 1,709,590 37,100 37,100 31,500 31,500 128,000 128,000 1,714,200 1,936,390 $ (197,811) $ (206,811) 101 980,668 (955,722) 773,857 Variance with Final Budget Actual Positive Amounts (Negative) $ (206,811) $ - 980,668 (955,722) 773,857 (955,722) 8,307 21,893 429,450 1,280,140 18,829 18,271 - 31,500 329,165 (201,165) 785,751 1,150,639 $ (11,894) $ 194,917 CITY OF ROSEMEAD, CALIFORNIA BUDGETARY COMPARISON SCHEDULE HOME PROGRAM FOR THE YEAR ENDED JUNE 30, 2021 Budgetary Fund Balance, July 1, as restated Resources (Inflows): Intergovernmental Use of money and property Amounts Available for Appropriations Unarges TO v,ppropriavon tUuzriowsf: General government Community development Total Charges to Appropriations Budgetary Fund Balance, June 30 102 Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) $ 3,519,127 $ 3,519,127 $ 3,519,127 $ - 1,801,900 2,146,960 718,357 (1,428,603) - - 760 760 5,321,027 5,666,087 4,238,244 (1,427,843) - - 14,584 (14,584) 1,497,400 2,148,160 177,615 1,970,545 1,497,400 2,148,160 192,199 1,955,961 $ 3,823,627 $ 3,517,927 $ 4,046,045 $ 528,118 102 CITY OF ROSEMEAD, CALIFORNIA BUDGETARY COMPARISON SCHEDULE ROSEMEAD HOUSING DEVELOPMENT CORPORATION FOR THE YEAR ENDED JUNE 30, 2021 Budgetary Fund Balance, July 1 Resources (Inflows): Intergovernmental Charges for services Use of money and property Miscellaneous Amounts Available for Appropriations Charges to Appropriation (Outflows): Community development Total Charges to Appropriations Budgetary Fund Balance, June 30 Budget Amounts Actual Original Final Amounts $ 354,871 $ 354,871 $ 354,871 Variance with Final Budget Positive (Negative) 665,700 665,700 452,473 (213,227) 460,600 460,600 472,553 11,953 - - 13 13 3,500 3,500 4,250 750 1,484,671 1,484,671 1,284,160 (200,511) 1,129,800 1,129,800 866,857 262,943 1,129,800 1,129,800 866,857 262,943 $ 354,871 $ 354,871 $ 417,303 $ 62,432 103 CITY OF ROSEMEAD, CALIFORNIA BUDGETARY COMPARISON SCHEDULE ROAD MAINTENANCE AND REHABILITATION ACCOUNT SB1 FOR THE YEAR ENDED JUNE 30, 2021 Budgetary Fund Balance, July 1 Resources (Inflows): Intergovernmental Use of money and property Amounts Available for Appropriations Charges to Appropriation (Outflows): Public works Capital outlay Total Charges to Appropriations Budgetary Fund Balance, June 30 Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) $ 2,346,436 $ 2,346,436 $ 2,346,436 $ - 936,500 936,500 1,007,811 71,311 - - 3,171 3,171 3,282,936 3,282,936 3,357,418 74,482 192,100 192,100 116,011 76,089 332,000 332,000 - 332,000 524,100 524,100 116,011 408,089 $ 2,758,836 $ 2,758,836 $ 3,241,407 $ 482,571 104 CITY OF ROSEMEAD, CALIFORNIA BUDGETARY COMPARISON SCHEDULE CITY GRANTS FUND FOR THE YEAR ENDED JUNE 30, 2021 Budgetary Fund Balance (Deficit), July 1 Resources (Inflows): Intergovernmental Amounts Available for Appropriations Charges to Appropriation (Outflows): General government Public safety Community development Capital outlay Total Charges to Appropriations Budgetary Fund Balance (Deficit), June 30 105 Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) $ (62,749) $ (62,749) $ (62,749) $ - 1,470,500 2,357,200 700,628 (1,656,572) 1,407,751 2,294,451 637,879 (1,656,572) - 338,500 338,477 23 - 335,400 270,000 65,400 - 150,000 107,081 42,919 1,235,500 1,235,500 - 1,235,500 1,235,500 2,059,400 715,558 1,343,842 $ 172,251 $ 235,051 $ (77,679) $ (312,730) 105 CITY OF ROSEMEAD, CALIFORNIA BUDGETARY COMPARISON SCHEDULE CLEAN WATER FUND FOR THE YEAR ENDED JUNE 30, 2021 We Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) Budgetary Fund Balance, July 1 $ - $ - $ - $ - Resources (Inflows): Intergovernmental 580,000 580,000 564,711 (15,289) Amounts Available for Appropriations 580,000 580,000 565,406 (14,594) Charges to Appropriation (Outflows): Public works 300,000 380,000 231,247 148,753 Capital outlay 200,000 200,000 - 200,000 Total Charges to Appropriations 500,000 580,000 231,247 348,753 Budgetary Fund Balance, June 30 $ 80,000 $ - $ 334,159 $ 334,159 We CITY OF ROSEMEAD, CALIFORNIA BUDGETARY COMPARISON SCHEDULE MEASURE H GRANT FOR THE YEAR ENDED JUNE 30, 2021 107 Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) Budgetary Fund Balance, July 1 $ - $ - $ - $ - Resources (Inflows): Intergovernmental - 15,000 10,000 (5,000) Amounts Available for Appropriations - 15,000 10,000 (5,000) Charges to Appropriation (Outflows): General government - 15,000 10,000 5,000 Total Charges to Appropriations - 15,000 10,000 5,000 Budgetary Fund Balance, June 30 $ - $ - $ - $ - 107 CITY OF ROSEMEAD, CALIFORNIA COMBINING STATEMENT OF NET POSITION INTERNAL SERVICE FUNDS JUNE 30, 2021 Assets: Current Assets: Cash and investments Receivables: Accrued interest Total Current Assets Noncurrent Assets: Capital assets, net of accumulated depreciation Total Noncurrent Assets Total Assets Liabilities: Current Liabilities: Accounts payable Total Current Liabilities Total Liabilities Net Position: Investment in capital assets Unrestricted Total Net Position Governmental Activities - Internal Service Funds Equipment Technology - 24,632 Replacement Replacement Totals 1,045 4,926 5,971 631,554 145,582 $ 630,611 $ 169,962 $ 800,573 943 252 1,195 631,554 170,214 801,768 1,045 4,926 5,971 1,045 4,926 5,971 632,599 175,140 807,739 - 24,632 24,632 - 24,632 24,632 - 24,632 24,632 1,045 4,926 5,971 631,554 145,582 777,136 $ 632,599 $ 150,508 $ 783,107 The notes to financial statements are an integral part of this statement. 108 CITY OF ROSEMEAD, CALIFORNIA COMBINING STATEMENT OF REVENUES, EXPENSES AND CHANGES IN FUND NET POSITION INTERNAL SERVICE FUNDS FOR THE YEAR ENDED JUNE 30, 2021 Operating Revenues: Charges for services Miscellaneous Total Operating Revenues Operating Expenses: Contractual services Depreciation expense Total Operating Expenses Operating Income Nonoperating Revenues (Expenses): Interest revenue Total Nonoperating Revenues(Expenses) Changes in Net Position Net Position: Net Position at the Beginning of the Year Net Position at the End of the Year Governmental Activities - Internal Service Funds Equipment Technology Replacement Replacement Totals $ 100,900 $ 208,600 $ 309,500 41,920 - 41,920 142,820 208,600 351,420 83,702 157,330 241,032 5,890 8,883 14,773 89,592 166,213 255,805 53,228 42,387 95,615 722 45 767 722 45 767 53,950 42,432 96,382 578,649 108,076 686,725 $ 632,599 $ 150,508 $ 783,107 The notes to financial statements are an integral part of this statement. 109 CITY OF ROSEMEAD, CALIFORNIA COMBINING STATEMENT OF CASH FLOWS INTERNAL SERVICE FUNDS FOR THE YEAR ENDED JUNE 30, 2021 Cash Flows from Operating Activities: Cash received from customers and users Cash received from interfund service provided Cash paid to suppliers for goods and services Net Cash Provided by Operating Activities Cash Flows from Investing Activities: Interest received Net Cash Provided (Used) by Investing Activities Net Increase in Cash and Cash Equivalents Cash and Cash Equivalents at the Beginning of the Year Cash and Cash Equivalents at the End of the Year Reconciliation of Operating Income to Net Cash Provided by Operating Activities: Operating income Adjustments to reconcile operating income net cash provided by operating activities: Depreciation Increase in accounts payable Total Adjustments Net Cash Provided by Operating Activities Governmental Activities - Internal Service Funds Equipment Technology Replacement Replacement $ 41,920 100,900 (85, 850) 56,970 208,600 (136, 591) 72,009 Totals $ 41,920 309,500 (222,441) 128,979 (221) (207) (428) (221) (207) (428) 56,749 71,802 128,551 573,862 98,160 672,022 $ 630,611 $ 169,962 $ 800,573 $ 53,228 $ 42,387 $ 95,615 5,890 (2,148) 3,742 $ 56,970 The notes to financial statements are an integral part of this statement. 110 8,883 20,739 29,622 $ 72,009 14,773 18,591 33,364 $ 128,979 Statistical Section THIS PAGE INTENTIONALLY LEFT BLANK 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. Page Financial Trends These schedules contain trend information to help the reader understand how the government's financial performance and wellbeing have changed over time. 112-119 1 Net Position by Component 2 Changes in Net Position 3 Fund Balances of Governmental Funds 4 Changes in Fund Balances of Governmental Funds Revenue Capacity These schedules contain trend information to help the reader assess the government's most significant revenue source, property tax. 120-123 5 Assessed Value and Estimated Actual Value of Taxable Property 6 Direct and Overlapping Property Tax Rates 7 Principal Property Taxpayers 8 Property Tax Levies and Collections Debt Capacity These schedules contain trend 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. 124-128 9 Direct and Overlapping Governmental Activities Debt 10 Legal Debt Margin 11 Pledged Revenue Coverage Demographic and Economic Information These schedules offer demographic and economic indicators to help the reader understand the environment within which the government's financial activities take place. 129-132 12 Demographic and Economic Statistics 13 Principal Employers 14 Top 25 Sales Tax Producers 15 Full -Time and Part -Time Positions by Function Operating Information 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. 133-134 16 Operating Indicators by Function 17 Capital Asset Statistics Sources: Unless otherwise noted, the information in these schedules is derived from the Comprehensive Annual Financial Reports for the relevant year. 111 CITY OF ROSEMEAD Net Position by Component Last Ten Fiscal Years (accrual basis of accounting) 2012 2013 2014 2015 2016 Governmental activities: Net investment in capital assets 54,010,031 51,132,854 50,042,631 52,038,429 51,542,030 Restricted 10,870,747 2,829,147 3,110,688 3,419,068 4,005,847 Unrestricted 13,688,078 17,724,709 17,367,841 11,018,153 13,108,874 Total governmental activities net position 78,568,856 71,686,710 70,521,160 66,475,650 68,656,751 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 112 Schedule 1 2017 2018 2019 2020 2021 Governmental activities: Net investment in capital assets 52,806,193 53,587,243 50,882,552 48,825,863 47,444,803 Restricted 4,387,055 3,554,634 9,730,202 13,681,082 21,856,184 Unrestricted 15,690,721 17,211,587 17,483,422 17,754,529 18,643,063 Total governmental activities net position 72,883,969 74,353,464 78,096,176 80,261,474 87,944,050 113 CITY OF ROSEMEAD Changes in Net Position Last Ten Fiscal Years (accrual basis of accounting) Expenses: Governmental activities: General government Public safety Public works Community development Parks and recreation Interest and other charges Total governmental activities expenses Program revenues: Governmental activities: Charges for services: General government Public safety Public works Community development Parks and recreation Total governmental activities program revenues Net revenues (expenses): Governmental activities Total net revenues (expenses) 2012 2013 2014 2015 2016 3,989,359 3,381,686 4,271,354 2,739,281 3,218,363 7,517,101 7,791,073 7,923,316 7,747,949 8,381,588 11,588,278 11,717,276 10,072,081 8,703,817 8,738,495 4,080,294 2,616,531 2,853,472 2,879,028 3,246,081 2,532,665 2,594,863 2,274,920 2,049,540 2,073,145 569,045 7,827 5,561 3,198 787 30,276,742 28,109,256 27,400,704 24,122,813 25,658,459 130,450 2,408,362 2,030,063 2,725,291 2,203,233 1,454,759 1,622,911 1,586,557 1,573,532 1,563,652 4,033,874 3,869,285 4,356,486 4,627,331 4,360,908 3,501,082 1,896,876 1,632,508 1,915,557 2,352,137 704,029 785,611 724,197 713,484 741,171 General revenues and other changes in net assets: Governmental activities: Taxes: Property taxes Sales and use taxes Transient occupancy taxes Othertaxes Investment income Other general revenues Loss on sale of capital assets Transfer to Successor Agency Extraordinary item: 9,824,194 10,583,045 10,329,811 11,555,195 11,221,101 (20,452,548) (17,526,211) (17,070,893) (12,567,618) (14,437,358) 10,567,509 8,900,228 8,667,709 9,034,141 9,158,499 3,200,911 3,215,897 3,504,285 3,452,605 4,124,745 1,323,886 1,447,820 1,593,640 1,575,401 1,998,954 633,393 2,275,986 1,307,280 1,247,941 1,209,249 195,165 28,202 216,499 97,589 348,651 853,956 1,180,688 604,053 793,680 945,372 (2,340,090) - - - - - (6,392,878) - - - Gain on dissolution of redevelopment agency �v,ci l,uoc - - - - Totalgovernmentalactivities 48,705,812 10,655,943 15,893,466 16,201,357 17,785,470 Changes in net position Governmental activities Total primary government $ 28,253,264 $ (6,870,268) $ (1,177,427) $ 3,633,739 $ 3,348,112 Source: City of Rosemead, Department of Finance 114 Expenses: Governmental activities: General government Public safety Public works Community development Parks and recreation Interest and other charges Total governmental activities expenses Program revenues: Governmental activities: Charges for services: General government Public safety Public works Community development Parks and recreation Total governmental activities program revenues Net revenues (expenses): Governmental activities Total net revenues (expenses) Schedule 2 2017 2018 2019 2020 2021 3,705,685 4,554,063 4,205,482 4,003,674 4,659,583 8,935,164 9,499,683 9,125,853 9,744,134 10,679,425 7,323,865 9,554,073 6,353,025 9,946,662 9,372,263 3,161,310 3,409,699 2,376,713 3,472,477 3,411,076 2,153,986 2,746,482 7,662,344 2,920,016 1,916,949 25,280,010 29,764,000 29,723,417 30,086,963 30,039,296 2,191,604 1,769,171 819,371 658,428 1,516, 276 1,565, 275 1,787,151 1,847,594 1,834,717 1,944,901 4,232,311 5,208,427 6,238,575 6,024,968 6,715,497 2,523,350 4,265,255 3,373,246 3,403,251 4,610,737 788,931 828,038 958,176 624,313 163,168 General revenues and other changes in net assets: Governmental activities: Taxes: Property taxes Sales and use taxes Transient occupancy taxes Othertaxes Investment income Other general revenues Loss on sale of capital assets Transfer to Successor Agency Extraordinary item: Gain on dissolution of redevelopment agency_ Total governmental activities 18,205,757 19,557,164 20,229,167 19,706,584 19,386,533 11,301,471 13,858,042 13, 236,962 12,545,677 14,950,579 (13,978,539) (15,905,958) (16,486,455) (17,541,286) (15,088,717) 8,643,019 9,128,934 9,566,800 9,942,183 10,740,563 5,366,975 5,929,492 5,735,491 5,430,222 5,534,244 2,213,286 2,326,863 2,314,723 1,785,219 1,405,397 1,224,230 1,313,699 1,329,822 1,346,327 1,378,550 20,526 210,288 1,158,407 945,319 287,628 737,721 647,888 123,924 257,314 40,151 Changes in net position Governmental activities Total primary government $ 4,227,218 $ 3,651,206 $ 3,742,712 $ 2,165,298 $ 4,297,816 Source: City of Rosemead, Department of Finance 115 CITY OF ROSEMEAD Fund Balances of Governmental Funds Last Ten Fiscal Years (modified accrual basis of accounting) General fund: Nonspendable Restricted Committed Assigned Unassigned Total general fund All other governmental funds: Nonspendable Restricted Committed Assigned Unassigned Total all other governmental funds Total governmental funds 2012 2013 2014 2015 2016 2,034 2,034 140,893 143,560 187,247 5,294,253 6,415,416 5,883,235 6,120,361 6,682,495 5,712 5,712 65,343 78,280 83,513 9,519,173 11,194,278 11,607,595 10,128,160 11, 514,894 14,821,172 17,617,440 17, 697,066 16,470, 361 18,468,149 10,870,747 2,829,147 3,110,688 3,419,068 4,005,847 (1,292,405) (788,224) (1,192,926) (1,643,527) (832,005) 9,578,342 2,040,923 1,917,762 1,775,541 3,173,842 24,399,514 19,658,363 19,614,828 18,245,902 21,641,991 Source: City of Rosemead, Department of Finance. 116 General fund: Nonspendable Restricted Committed Assigned Unassigned Total general fund All other governmental funds: Nonspendable Restricted Committed Assigned Unassigned Total all other governmental funds Schedule 3 2017 2018 2019 2020 2021 765,218 853,920 870,619 510,371 118,358 6,935,525 8,760,289 7,667,401 8,896,317 7,985,332 63,298 79,798 121,867 121,867 130,267 11, 270,958 10, 790, 274 14,635,070 14, 679,926 17,353, 655 19,034,999 20,484,281 23,294,957 24,208,481 25,587,612 - - - - 16,000 4,376,257 3,554,634 8,797,389 13,681,082 21,856,184 - 1,912,732 932,813 - - (639,510) (31,024) (23,792) (269,560) (89,573) 3,736,747 5,436,342 9,706,410 13,411,522 21,782,611 Total governmental funds 22,771,746 25,920,623 33,001,367 37,620,003 47,370,223 Source: City of Rosemead, Department of Finance. 117 CITY OF ROSEMEAD Changes in Fund Balances of Governmental Funds Last Ten Fiscal Years (modified accrual basis of accounting) Revenues: Taxes Intergovernmental Licenses and permits Charges for services Fines, forfeitures and penalties Development participation Investment income Other Total revenues Expenditures Current: General government Public safety Public works Community development Parks and recreation Capital outlay Debt service: Principal Interest and fiscal charges Total expenditures Excess (deficiency) of revenues over (under) expenditures 2012 2013 2014 15,960,662 16,602,329 15,320,806 10,330,915 7,372,878 6,948,479 1,156,719 1,156,968 1,308,482 1,055,391 1,036,563 1,087, 091 619,397 691,548 700,126 2015 2016 15,537, 262 16,491,447 7,092,141 7,734,995 1,846,997 2,520,937 1,138,731 1,191, 275 676,830 597,373 582,176 474,970 873,631 754,865 1,002,835 658,670 928,596 61,690 114,074 71,152 30,363,930 28,263,852 26,300,305 27,160,900 29,610,014 4,203,302 3,988,156 3,973,364 3,879,122 3,664,633 7,517,101 7,773,611 7,913,659 8,156,485 8,452,932 6,417,803 6,909,471 6,184,890 6,348,101 6,346,179 3,681,903 2,605,654 2,846,112 3,150,240 3,323,933 2,532,665 2,208,564 2,157,424 2,071,443 2,123,274 9,090,076 3,126,669 3,268,391 4,924,435 2,302,974 1,210,000 - - - - 961,506 - - - - 35,614,356 26,612,125 26,343,840 28,529,826 26,213,925 (5,250,426) 1,651,727 (43,535) (1,368,926) 3,396,089 Other financing sources (uses): Transfers in 6,431,374 2,772,415 3,053,605 2,433,974 1,386,471 Transfers out (6,554,374) (2,772,415) (3,053,605) (2,433,974) (1,386,471) Transfer to Successor Agency - (6,392,878) - - - Totalotherfinancing sources (uses) (123,000) (6,392,878) - - - Extraordinary item: Gain (loss) on dissolution of redevelopment agency (8,619,249) - - - - Netchangeinfund balances (13,992,675) (4,741,151) (43,535) (1,368,926) 3,396,089 noncapital expenditures 6.8% 0.0% 0.0% 0.0% 0.0% Note: The information on this page has not been adjusted for any restatements of prior year financial statements. Source: City of Rosemead, Department of Finance. 118 Revenues: Taxes Intergovernmental Licenses and permits Charges for services Fines, forfeitures and penalties Development participation Investment income Other Total revenues Expenditures Current: General government Public safety Public works Community development Parks and recreation Capital outlay Debt service: Principal Interest and fiscal charges Total expenditures Excess (deficiency) of revenues over (under) expenditures Schedule 4 2017 2018 2019 2020 2021 17,447,510 18,698,988 18,946,836 18,503,951 19,082,069 6,726,279 8,002,636 8,588,211 8,179,055 11,041,044 2,754,881 3,128,000 2,636,026 2,115,419 2,492,893 1,012,557 1,572,266 1,653,095 1,204,638 489,269 607,754 633,711 622,221 612,080 598,032 - 28,591 117,115 150,728 78,558 666,968 210,288 1,158,407 905,039 778,295 231,545 566,338 250,364 271,515 63,684 29,447,494 32,840,818 33,972,275 31,942,425 34,623,844 4,280,825 4,546,789 4,077,516 3,768,562 4,587,158 9,060,840 9,318,858 9,089,645 9,577,867 10,574,620 6,499,220 6,554,648 7,247,391 7,032,609 7,098,823 3,385,455 3,279,088 3,637,692 3,352,332 3,349,209 2,300,906 2,386,463 2,343,452 2,703,857 1,706,997 2,790,493 3,606,095 495,838 888,559 941,577 28,317,739 29,691,941 26,891,534 27,323,786 28,258,384 1,129,755 3,148,877 7,080,741 4,618,639 6,365,460 Other financing sources (uses): Transfers in 2,442,441 121,361 - - - Transfers out (2,442,441) (121,361) - - - Transfer to Successor Agency - - - - - Totalotherfinancing sources (uses) Extraordinary item: Gain (loss) on dissolution of redevelopment agency _ _ _ _ _ Net change in fund balances 1,129,755 3,148,877 7,080,741 4,618,639 6,365,460 Debt service as a percentage of noncapital expenditures 0.0% 0.0% 0.0% 0.0% 0.0% Note: The information on this page has not been adjusted for any restatements of prior year financial statements. Source: City of Rosemead, Department of Finance. 119 CITY OF ROSEMEAD Schedule Assessed Value and Estimated Actual Value of Taxable Property Last Ten Fiscal Years (in thousands of dollars) Fiscal Year Ended June 30 Secured Unsecured City SBE Non- Unitary Taxable Assessed Value Total Direct Tax Rate 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 9.28% 2020 4,809,362,427 71,764,032 2,347,932 4,883,474,391 9.28% 2021 5,038,058,045 72,031,236 2,408,307 5,112,497,588 9.28% 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: Los Angeles County Assessor 2022/12-2020/21 Combined Tax Rolls and HDL Coren & Cone 120 CITY OF ROSEMEAD Direct and Overlapping Property Tax Rates Last Ten Fiscal Years (Rate per $100 of Taxable Value) Schedule 6 Agency 2012 2013 2014 2015 2016 2017 2015 2019 2020 2021 Basic Levy' 1.0000 1.0000 1.0000 1.0000 1.0000 1.0000 1.0000 1.0000 1.0000 1.0000 EI Monte City School District 0.0000 0.0000 0.0000 0.1152 0.1464 0.1465 0.1462 0.1455 0.1050 0.0751 EI Monte Union High School 0.0959 0.0599 0.0950 0.0542 0.0916 0.0547 0.0524 0.0579 0.1097 0.0929 Garvey School District 0.0569 0.0604 0.0595 0.0595 0.0557 0.0607 0.0533 0.0571 0.0562 0.0543 Garvey -Alhambra 0.0272 0.0250 0.0315 0.0291 0.0291 0.0251 0.0451 0.0454 0.0366 0.0351 Los Angeles Community College District 0.0353 0.0488 0.0445 0.0402 0.0355 0.0360 0.0460 0.0462 0.0272 0.0402 Metropolitan Water District 0.0180 0.0180 0.0180 0.0180 0.0180 0.0230 0.0300 0.0300 0.0300 0.0300 Montebello Unified School District 0.1000 0.0963 0.0946 0.0875 0.0872 0.1471 0.1351 0.1392 0.0931 0.0971 Pasadena Community College District 0.0196 0.0206 0.0190 0.0103 0.0087 0.0089 0.0082 0.0077 0.0072 0.0055 Rio Hondo Community College District 0.0000 0.0000 0.0000 0.0282 0.0271 0.0281 0.0275 0.0255 0.0257 0.0136 Rosemead School District 0.1051 0.1024 0.1031 0.0989 0.1000 0.0853 0.1198 0.0926 0.0868 0.0746 San Gabriel Unified School District 0.0845 0.1052 0.1008 0.1144 0.1068 0.1053 0.1008 0.1056 0.0968 0.0986 Total Direct & Overlappingz Tax Rates 1.5424 1.5695 1.5694 1.6885 1.7093 1.7539 1.8273 1.8130 1.7073 1.6500 City's Share of 1% Levy Per Prop 13' 0.0939 0.0939 0.0939 0.0939 0.0939 0.0939 0.0939 0.0939 0.0939 0.0939 Voter Approved City Debt Rate Redevelopment Rate" 1.0037 Total Direct Rate' 0.2235 0.2211 0.0927 0.0927 0.0927 0.0927 0.0927 0.0928 0.0928 0.0928 Notes: 'In 1978, California voters passed Proposition 13 which set the property tax rate at a 1.00%fixed amount. This 1.00% is shared by all taxing agencies for which the subject property resides within. In addition to the 1.00%fixed amount, property owners are charged taxes as a percentage of assessed property values forthe payment of any voter approved bonds. z Overlapping rates are those of local and county governments that apply to property owners within the City. Not all overlapping rates apply to all city property owners. ' City's share of 1% Levy is based on the City's share of the general fund tax rate area with the largest net taxable value within the city. ERAF general fund tax shifts may not be included in tax ratio figures. 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 ABX126 eliminated Redevelopment from the State of California for the fiscal year 2012-13 and years thereafter. ' 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. Forthe purposes of this report, residual revenue is assumed to be distributed to the City in the same proportions as general fund revenue. Source: Los Angeles County Assessor 2022/12-2020/21 Combined Tax Rolls and HDL Coren & Cone 121 CITY OF ROSEMEAD Principal Property Tax Payers Current Year and Ten Years Ago 2021 2012 Schedule 7 Source: Los Angeles County Assessor Combined Tax Rolls and SBE Non Unitary Tax Roll for 2011/12 and 2020/21 and HdI Coren & Cone 122 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 $ 53,013,245 1 1.04% $ 41,688,891 1 1.18% Walmart Real Estate Business Trust 41,373,295 2 0.81% 36,517,540 2 1.03% Rosemead Hwang LLC 37,918,218 3 0.74% 32,367,942 3 0.92% AFG Investment Fund 5 LLC 28,176,553 4 0.55% 24,052,238 4 0.68% MHI Rosemead LP 26,217,107 5 0.51% - - - Sunshine Inn 21,641,517 6 0.42% 10,444,559 10 0.30% Metodo Investments LLC 21,186,205 7 0.41% 18,135,525 6 0.51% 420 Boyd Street LLC 19,915,058 8 0.39% 18,555,925 5 0.53% Panda Restaurant Group Inc 17,571,496 9 0.34% 13,049,543 9 0.37% Macy's California Inc 16,013,206 10 0.31% 13,669,299 7 0.39% California Federal Savings and Loan Association - - - 13,486,586 8 0.38% Source: Los Angeles County Assessor Combined Tax Rolls and SBE Non Unitary Tax Roll for 2011/12 and 2020/21 and HdI Coren & Cone 122 CITY OF ROSEMEAD Property Tax Levies and Collections Last Ten Fiscal Years Schedule 8 Collected within the Fiscal Year Taxes Levied Fiscal Year of Levy Collections in Total Collections to Date Ended for the Fiscal Percent Subsequent Percent June 30 Year Amount of Levy Yearsµ Amount of Levy 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% 2021 3,847,941 3,377,336 87.77% - 3,377,336 87.77% * Information not available. Source: Los Angeles County Auditor Controller's Office 123 CITY OF ROSEMEAD Direct and Overlapping Governmental Activities Debt June 30, 2021 Overlapping Debt * Metropolitan Water District Garvey SD DS 2004 Series 2006 Garvey SD DS 2004 Series C Garvey SD DS 2011 Refund Bonds Garvey SD DS 2013 Ref Bonds Garvey SD DS 2014 Ref Bonds Garvey SD DS 2016 Series A Garvey SD DS 2016 Series B Rosemead SD DS 2011 Ref Bond Rosemead SD DS 2012 Ref Bonds Rosemead SD DS 2008 Series B Rosemead SD DS 2014 Ref Bonds Rosemead SD DS 2016 Ref Bonds Rosemead SD DS 2008 Series C Rosemead SD DS 2014 Series A EI Monte Union HSD DS 2008 Series B EI Monte Union HSD DS 2015 Ref Bonds EI Monte Union HSD DS 2016 Ref DLYD DLVR EI Monte Union HSD DS 2008 Series C EI Monte Union HSD DS 2016 Ref Bonds EI Monte Union HSD DS 2008 Series D EI Monte Union HSD DS 2018 Series LA CCD DS 2003, Taxable Series 2004B LA CCD DS 2001, Taxable Series 2004A LA CCD DS 2008, 2009 Taxable Ser B LA CCD DS 2008, 2010 Tax Ser D LA CCD Debt 2008, 2010 Tax Ser E (BABS) LA CCD Debt 2008, 2012 Series F LA CCD DS 2013 Ref Bonds LA CCD DS 2008 Series G LA CCD DS 2015 Ref Series A LA CCD DS 2015 Ref Series B LA CCD DS 2015 Ref Series C LA CCD DS 2008 Series I LA CCD DS 2016 Ref Bonds Pasadena CCD DS 2014 Ref Series A Pasadena CCD DS 2016 Ref Series A Montebello USD DS 1998 Series 1998 Montebello USD DS 1998 Series 1999 Montebello USD DS 1998 Series 2004 Montebello USD DS 1998 Series 2002 Montebello USD DS 2004 Series 2009A-2 BABS Montebello USD DS 2010 Refunding Bonds Montebello USD DS 2004 Series 2013A Montebello USD DS Ref Bond Series 2015 Schedule 9 Gross Bonded Debt Balance Percentage Applicable To City of Rosemead Amount Applicable to City of Rosemead $ 15,151,752 0.313% 56,749 12,339,236 50.522% 6,270,959 5,221,015 50.522% 4,178,048 2,755,000 50.822% 1,400,133 495,000 50.822% 251,567 2,845,000 50.822% 1,445,873 8,700,000 50.822% 4,421,474 10,000,000 50.822% 5,082,154 625,000 67.319% 420,742 5,110,000 67.319% 3,439,987 273,740 67.319% 184,278 5,340,000 67.319% 3,594,820 12,075,000 67.319% 8,128,736 1,800,000 67.319% 1,211,737 25,575,000 67.319% 17,216,764 29,820,673 14.139% 4,216,411 25,460,000 14.139% 3,599,845 3,880,000 14.139% 548,602 2,550,000 14.139% 360,550 48,425,000 14.139% 6,846,917 10,500,098 14.139% 1,484,632 52,245,000 14.139% 7,387,036 2,115,000 0.291% 6,161 31,555,000 0.291% 91,923 75,000,000 0.291% 218,482 125,000,000 0.291% 364,137 900,000,000 0.291% 2,621,790 199,000,000 0.291% 579,707 35,410,000 0.291% 103,153 205,725,000 0.291% 599,297 1,395,190,000 0.291% 4,064,327 24,305,000 0.291% 70,803 230,015,000 0.291% 670,057 197,360,000 0.291% 574,929 813,785,000 0.291% 2,370,637 12,405,000 2.390% 296,488 54,045,000 2.390% 1,291,714 2,797,152 1.558% 43,591 5,484,723 1.558% 85,474 5,562,649 1.558% 86,688 4,860,085 1.558% 75,739 12,640,000 1.558% 196,981 1,200,000 1.558% 18,701 16,150,000 1.558% 251,681 27,250,000 1.558% 424,662 124 CITY OF ROSEMEAD Direct and Overlapping Governmental Activities Debt June 30, 2021 Schedule 9 Percentage Amount Applicable To Applicable to Gross Bonded City of City of 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 responsible for debt in areas outside the city. This report reflects debt which is being repaid through voter -approved property tax indebtedness. It excludes mortgage revenue, tax allocation bonds, interim financing obligations, non -bonded capital lease obligations, and certificates of participation, unless provided by the city. 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 assessed 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 2020-21 Lien Date Tax Rolls. 125 Debt Balance Rosemead Rosemead 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 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 responsible for debt in areas outside the city. This report reflects debt which is being repaid through voter -approved property tax indebtedness. It excludes mortgage revenue, tax allocation bonds, interim financing obligations, non -bonded capital lease obligations, and certificates of participation, unless provided by the city. 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 assessed 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 2020-21 Lien Date Tax Rolls. 125 CITY OF ROSEMEAD Legal Debt Margin Information Last Ten Fiscal Years 2011/12 2012/13 2013/14 2014/15 2015/16 Assessed valuation 3,533,192,184 3,603,395,186 3,725,310,320 3,879,248,441 4,077,097,445 Conversion percentage 25% 25% 25% 25% 25% Adjusted assessed valuation 883,298,046 900,848,797 931,327,580 969,812,110 1,019,274,361 Debt limit percentage 15% 15% 15% 15% 15% Debt limit 132,494,707 135,127,319 139,699,137 145,471,817 152,891,154 Total net debt applicable to limit: General obligation bonds - - - - - Legal debt margin 132,494,707 135,127,319 139,699,137 145,471,817 152,891,154 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 126 Assessed valuation Conversion percentage Adjusted assessed valuation Debt limit percentage Debt limit Total net debt applicable to limit: General obligation bonds Legal debt margin Total debt applicable to the limit as a percentage of debt limit Schedule 10 2016/17 2017/18 2018/19 2019/20 2020/21 4,337,892,775 25% 4,525,131,407 25% 4,745,176,577 25% 4,960,200,386 25% 5,175,006,979 25% 1,084,473,194 15% 1,131,282,852 15% 1,186,294,144 15% 1,240,050,097 15% 1,293,751,745 15% 162,670,979 169,692,428 177,944,122 186,007,514 194,062,762 162,670,979 169,692,428 177,944,122 186,007,514 194,062,762 0.0% 0.0% 0.0% 0.0% 0.0% Source: Rosemead Finance Department Los Angeles County Tax Assessor's Office 127 CITY OF ROSEMEAD Pledged -Revenue Coverage Last Ten Fiscal Years Fiscal Year Ended 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 Tax Increment 2,601,979 5,439,677 5,517,943 5,521,038 5,724,292 4,711,788 3,916,792 3,863,435 3,634,145 4,204,501 Schedule 11 Tax Allocation Bonds Debt Service Principal Interest Coverage 1,210,000 961,506 1.20 1,795,000 1,852,123 1.49 1,855,000 1,790,511 1.51 1,920,000 1,718,573 1.52 1,995,000 1,635,578 1.58 850,000 1,602,713 1.92 2,320,000 1,386,038 1.06 2,160,000 1,352,881 1.10 2,205,000 1,229,000 1.06 2,295,000 1,126, 375 1.23 Note: Details regarding the city's outstanding debt can be found in the notes to the financial statements. Operating expenses do not include interest or depreciation expenses. Source: City of Rosemead, Department of Finance 128 CITY OF ROSEMEAD Demographic and Economic Statistics Last Ten Calendar Years Schedule 12 Fiscal Year Poplulation Itl Personal Income (in thousands) (2) Per Capita Personal Income Unemployment Rate (3) Median Age (3) 2011-12 54,172 952,560 17,584 10.80% 38 2012-13 54,464 959,982 17,626 8.10% 38.8 2013-14 54,762 944,918 17,255 6.70% 38.8 2014-15 54,786 956,180 17,453 9.50% 39.7 2015-16 55,231 932,800 16,889 7.70% 40.4 2016-17 54,984 960,740 17,473 6.10% 40.5 2017-18 55,267 972,350 17,594 4.30% 40.7 2018-19 55,097 1,040,232 18,880 4.30% 41.5 2019-20 54,363 1,084,896 19,956 4.20% 41.4 2020-21 54,229 1,175,005 21,667 16.20% 41.9 Sources: ')California State Department of Finance ') US Census Data 3) California Employment Development Department Compilied by HdL, Coren & Cone 129 CITY OF ROSEMEAD Principal Employers Current Year and Nine Years Ago Schedule 13 2021 2012 Percent of Percent of Number of Total Number of Total Employer Employees Rank Employment' Employees Rank Employment' Southern California Edison 2722 1 12.04% 4100 1 18.39% Garvey School District 754 2 3.34% 804 2 3.61% Panda Restaurant Group, Inc. 699 3 3.09% 400 4 1.79% Wal-Mart 647 4 2.86% 420 3 1.88% Rosemead School District 320 5 1.42% 337 5 1.51% Target 255 6 1.13% 200 6 0.90% Hemetic Seal Corporation 121 7 0.54% 150 7 0.67% University of the West 109 8 0.48% - - - Lucille's 90 9 0.40% - - - Don Bosco Tech 85 10 0.38% 90 8 0.40% Marge Carson, Inc - - - 80 9 0.36% Double Tree 76 10 0.34% 1 Based upon Employment Development Department's estimate of 22,300 residents employed - June 2012 z Based upon Employment Development Department's estimate of 22,600 residents employed - June 2021 Disclaimer: The City of Rosemead makes no claims concerning the accuracy of data provided nor assumes any liability resulting from the use of information herein. Source: City of Rosemead 130 CITY OF ROSEMEAD Top 25 Sales Tax Producers Current Year and Ten Years Ago 2021 Sales Tax Producers Business Category Altec industries Heavy Industrial AutoZone Automotive Supply Stores Beason Roofing Supply Building Materials Boiling Crab Casual Dining Circle K Service Stations CVS Pharmacy Drug Stores In N Out Burger Quick -Service Restaurants Jack in the Box Quick -Service Restaurants LC Electrical & Lighting Corp Electrical Equipment Lucille's Smokehouse Bar -B -Qi Casual Dining Macys Department Stores McDonalds Quick -Service Restaurants McDonalds Quick -Service Restaurants Olive Garden Casual Dining Panda Express Fast -Casual Dining Petsmart Specialty Stores Rosemead Valley Mart Mobil Service Stations Ross Family Apparel Sam Woo Chinese BBQ Casual Dining Shell Service Stations Spa Nails Supply Specialty Stores T Mobile Electronics/Appliance Stores Target Discount Dept Stores Ulta Beauty Specialty Stores Wal mart Supercenter Discount Dept Stores Firms Listed Alphabetically Schedule 14 2012 Sales Tax Producers Business Category 7 Eleven Service Stations 888 Seafood Casual Dining Allied Building Products Building Materials Areco Service Stations AutoZone Automotive Supply Stores Bed Bath & Beyond Home Furnishings CH Auto Used Automotive Dealers Charley Browns Casual Dining Circle K Service Stations CVS Pharmacy Drug Stores Dunn Edwards Paint Paint/Glass/Wallpaper East Gourmet Seafood Casual Dining In N Out Burger Quick -Service Restaurants Macys Department Stores McDonalds Quick -Service Restaurants McDonalds Quick -Service Restaurants Office Depot Office Supplies/Furniture Rite Aid Drug Stores Rosemead Mobil Service Stations Rosemead Valley Mart Mobil Service Stations Sea Harbour Seafood Casual Dining Shell Service Stations Southern Cal Edison Cafe Quick -Service Restaurants Target Discount Dept Stores Walmart Supercenter Discount Dept Stores Source: State Board of Equalization, California Department of Taxes and Fees Administration, State Controller's Office, The HdL Companies 131 CITY OF ROSEMEAD Full-time City Positions by Function Last Ten Fiscal Years Schedule 15 Function 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 General government 13 10 10 11 12 12 12 13 14 14 Public safety 1 9 7 7 6 6 7 7 3 3 8 Community development 6 6 6 6 7 7 7 10 11 6 Public works 20 20 20 20 20 20 21 23 23 20 Parks and recreation 11 10 10 10 8 9 9 8 9 8 Total 59 53 53 53 53 55 56 57 60 56 The City of Rosemead contracts with the Los Angeles County Sheriff's Department for police services and is part of the Los Angeles County Fire Protection District which provides fire services; therefore, the position numbers shown above do not include staffing for those services. Public safety positions within the City include public safety administration, code enforcement, and parking control. Source: City of Rosemead, Finance Department 132 CITY OF ROSEMEAD Operating Indicators by Function Last Ten Fiscal Years Schedule 16 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 Police: Arrests 1,842 1,186 1,356 1,585 1,339 1,046 1,256 1,817 2,649 2,966 Parking citations issued 7,797 8,765 16,110 7,863 8,047 7,676 8,086 6,244 7,898 9,472 Fire: Number of emergency calls 2,928 2,785 2,823 3,212 3,352 3,206 3,822 2,823 2,789 2,803 Inspections 2,066 2,012 2,026 2,793 2,564 2,311 2,430 2,288 2,267 2,256 Public works: Street resurfacing (miles) 3.60 0.90 1.60 0.55 1.00 0.70 0.80 1.00 0 0 Parks and recreation: Number of recreation classes 519 638 724 839 871 873 707 631 387 210 Number of facility rentals 3,261 3,124 4,005 2,607 3,070 6,226 3,679 2,508 2,387 1,244 Source: City of Rosemead 133 CITY OF ROSEMEAD Capital Asset Statistics by Function Last Ten Fiscal Years Administration: City Hall Public safety: Public Safety Center Public works: Corporate Yard Streets (miles) Streetlights Traffic signals Parks and recreation: Parks Community centers Dinsmoor House Source: City of Rosemead Schedule 17 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 77.6 77.6 77.6 77.6 81.9 81.9 81.8 81.8 81.8 81.8 2,712 2,712 2,712 2,712 2,712 2,712 2,511 2,511 2,511 2,511 42 42 42 42 41 42 42 42 42 42 10 10 10 10 10 10 11 12 12 12 2 2 2 2 2 2 2 2 2 2 1 1 1 1 1 1 1 1 1 1 134 M '-Z-�fRPORATEO '% Attachment B Auditors' Letter to Mayor and City Council for Year Ended June 30, 2021 LS•*00 •60• L00 December 17, 2021 To the Honorable Mayor and Members of the City Council City of Rosemead, California We have audited the financial statements of the governmental activities, each major fund, and the aggregate remaining fund information of the City of Rosemead, California (the City) for the year ended June 30, 2021. Professional standards require that we provide you with information about our responsibilities under generally accepted auditing standards, Government Auditing Standards and the Uniform Guidance, as well as certain information related to the planned scope and timing of our audit. We have communicated such information in our letter to you dated April 27,2021. Professional standards also require that we communicate to you the following information related to our audit. Significant Audit Findings and Other Issues Qualitative Aspects of Significant Accounting Practices Management is responsible for the selection and use of appropriate accounting policies. The significant accounting policies used by the City are described in the notes to the financial statements. No new accounting policies were adopted and the application of existing policies was not changed during fiscal year 2020-2021. We noted no transactions entered into by the City during the year for which there is a lack of authoritative guidance or consensus. All significant transactions have been recognized in the financial statements in the proper period. Accounting estimates are an integral part of the financial statements prepared by management and are based on management's knowledge and experience about past and current events and assumptions about future events. Certain accounting estimates are particularly sensitive because of their significance to the financial statements and because of the possibility that future events affecting them may differ significantly from those expected. The most sensitive estimate affecting the City's financial statements is: Management's estimates of its net pension liability and other post -employment benefits liability based on actuarial valuation specialist assumptions. We evaluated the key factors and assumptions used to develop the net pension liability and other post -employment benefits liability in determining that they are reasonable in relation to the financial statements taken as a whole. The financial statement disclosures are neutral, consistent, and clear. Significant Unusual Transactions Management is responsible for the policies and practices used to account for significant unusual transactions. No significant unusual transactions have occurred during fiscal year 2020-2021. Difficulties Encountered in Performing the Audit We encountered no significant difficulties in dealing with management in performing and completing our audit. PrimeGlobal InArpsnJenf ArtounflnyrF6mi LSL•••• .. To the Honorable Mayor and Members of the City Council City of Rosemead, California Corrected and Uncorrected Misstatements Professional standards require us to accumulate all known and likely misstatements identified during the audit, other than those that are trivial, and communicate them to the appropriate level of management. No misstatements were found. Disagreements with Management For purposes of this letter, a disagreement with management is a financial accounting, reporting, or auditing matter, whether or not resolved to our satisfaction, that could be significant to the financial statements or the auditor's report. We are pleased to report that no such disagreements arose during the course of our audit. Circumstances that Affect the Form and Content of the Auditor's Report New auditing standards were implemented in fiscal year 2020-2021 related to Statement of Auditing Standards 134, Auditor Reporting and Amendments, Including Amendments Addressing Disclosures in the Audit of Financial Statements, through Statement of Auditing Standards 140, Supplementary Information in Relation to the Financial Statements as a Whole. These standards updated the form and content of the financial statement auditor's report. The purpose of the change was to present an easier format for users to understand the results of the audit and management's responsibilities. Management Representations We have requested certain representations from management that are included in the management representation letter dated December 17, 2021. Management Consultations with Other Independent Accountants In some cases, management may decide to consult with other accountants about auditing and accounting matters, similar to obtaining a "second opinion" on certain situations. If a consultation involves application of an accounting principle to the City's financial statements or a determination of the type of auditor's opinion that may be expressed on those statements, our professional standards require the consulting accountant to check with us to determine that the consultant has all the relevant facts. To our knowledge, there were no such consultations with other accountants. Other Audit Findings or Issues Discussed with Management We generally discuss a variety of matters, including the significant events or transactions that occurred during the year, business conditions affecting the City and business plans and strategies that may affect the risks of material misstatements, the application of accounting principles and auditing standards, with management each year prior to retention as the City's auditors. However, these discussions occurred in the normal course of our professional relationship and our responses were not a condition to our retention. LSL•••• .. To the Honorable Mayor and Members of the City Council City of Rosemead, California Other Matters We applied certain limited procedures to management discussion and analysis, budgetary comparison schedule for the general fund, the schedule of changes in net pension liability (asset) and related ratios, 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 ratios and schedule of plan contributions which are required supplementary information (RSI) that supplements the basic financial statements. Our procedures consisted of inquiries of management regarding 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 did not audit the RSI and do not express an opinion or provide any assurance on the RSI. We were engaged to report on the combining and individual fund financial statements and schedules, which accompany the financial statements but are not RSI. With respect to this supplementary information, we made certain inquiries of management and evaluated the form, content, and methods of preparing the information to determine that the information complies with accounting principles generally accepted in the United States of America, the method of preparing it has not changed from the prior period, and the information is appropriate and complete in relation to our audit of the financial statements. We compared and reconciled the supplementary information to the underlying accounting records used to prepare the financial statements or to the financial statements themselves. We were not engaged to report on the introductory section and statistical sections, which accompany the financial statements but are not RSI. Such information has 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 it. The following new Governmental Accounting Standards Board (GASB) pronouncements were effective for fiscal year 2020-2021 audit: GASB Statement No. 84, Fiduciary Activities. GASB Statement No. 90, Majority Equity Interests - an Amendment of GASB Statement Nos. 14 and 61. GASB Statement No. 98, Annual Comprehensive Financial Report The following GASB pronouncements are effective in the following fiscal years' audits and should be reviewed for proper implementation by management: Fiscal year 2022 GASB Statement No. 87, Leases. GASB Statement No. 89, Accounting for Interest Cost Incurred before the End of a Construction Period. GASB Statement No. 97, Certain Component Unit Criteria, and Accounting and Financial Reporting for Internal Revenue Code Section 457 Deferred Compensation Plans. LSL•••• .. To the Honorable Mayor and Members of the City Council City of Rosemead, California Fiscal year 2023 GASB Statement No. 91, Conduit Debt Obligations. GASB Statement No. 94, Public -Private and Public -Public Partnerships and Availability Payment Arrangement. GASB Statement No. 96, Subscription -Based Information Technology Arrangements. Restriction on Use This information is intended solely for the use of City Council and management of the City of Rosemead, California and is not intended to be, and should not be, used by anyone other than these specified parties. Very truly yours, -V Brea, California \TpORATEO 1 Attachment C Independent Auditors' Report on Internal Control over Financial Reporting X00• •00• S L00 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 Honorable Mayor and Members of the City Council City of 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, each major fund, and the aggregate remaining fund information of the City of Rosemead, California (the City), as of and for the year ended June 30, 2021, and the related notes to the financial statements, which collectively comprise the City's basic financial statements, and have issued our report thereon dated December 17, 2021. Internal Control over Financial Reporting In planning and performing our audit of the financial statements, we considered the City'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 City's internal control. Accordingly, we do not express an opinion on the effectiveness of the City'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 City'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. O PrimeGlobal .In A�m�nrtnn nJ InRrpenJrr�t Aru�iniG�y fumy L SLo*::: To the Honorable Mayor and Members of the City Council City of 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 City'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 City's internal control and compliance. Accordingly, this communication is not suitable for any other purpose. .4� 'Qr-4Vow Brea, California December 17, 2021 M ":�'_RpORATED '% Attachment D Report on Agreed -Upon Procedures Applied to Appropriations Limit LS1•000 •*so •• INDEPENDENT ACCOUNTANTS' REPORT ON AGREED-UPON PROCEDURES APPLIED TO APPROPRIATIONS LIMIT WORKSHEETS To the Honorable Mayor and Members of the City Council City of Rosemead, California We have performed the procedures enumerated below to the accompanying Appropriations Limit Worksheet No. 6 (or other alternative computation) of the City of Rosemead, California, for the year ended June 30, 2021. These procedures, which were agreed to by the City of Rosemead and the League of California Cities (as presented in the publication entitled Agreed -Upon Procedures Applied to the Appropriations Limitation Prescribed by Article XIII -B of the California Constitution), were performed solely to assist the City of Rosemead in meeting the requirements of Section 1.5 of Article XIII -B of the California Constitution. The City of Rosemead's management is responsible for the Appropriations Limit Worksheet No. 6 (or other alternative computation). This agreed-upon procedures engagement was conducted in accordance with attestation standards established by the American Institute of Certified Public Accountants. The sufficiency of these procedures is solely the responsibility of those parties specified in this report. Consequently, we make no representation regarding the sufficiency of the procedures described below either for the purpose for which this report has been requested or for any other purpose. The procedures performed and our findings were as follows: We obtained the completed Worksheets No. 1 through No. 7 (or other alternative computations) and compared the limit and annual adjustment factors included in those worksheets to the limit and annual adjustment factors that were adopted by resolution of the City Council. We also compared the population and inflation options included in the aforementioned worksheets to those that were selected by a recorded vote of the City Council. Finding: No exceptions were noted as a result of our procedures. 2. For the accompanying Appropriations Limit Worksheet No. 6, we multiplied line A, last year's limit, by line D, ratio of change, and agreed the resulting amount to line E, this year's limit. Finding: No exceptions were noted as a result of our procedures. 3. We compared the current year information presented in the accompanying Appropriations Limit Worksheet No. 6 to the other worksheets described in No. 1 above. Finding: No exceptions were noted as a result of our procedures. We compared the prior year appropriations limit presented in the accompanying Appropriations Limit Worksheet No. 6 to the prior year appropriations limit adopted by the City Council for the prior year. Finding: No exceptions were noted as a result of our procedures. J PrimeGlobal Inelepen�lriifAr�euntir�y Fvmr LSL:o::: To the Honorable Mayor and Members of the City Council City of Rosemead, California We were not engaged to and did not perform an audit, the objective of which would be the expression of an opinion on the accompanying Appropriations Limit Worksheet No. 6. Accordingly, we do not express such an opinion. Had we performed additional procedures; other matters might have come to our attention that would have been reported to you. No procedures have been performed with respect to the determination of the appropriations limit for the base year, as defined by the League publication entitled Article XIIIB Appropriations Limitation Uniform Guidelines. This report is intended solely for the use of the City of Rosemead, California and should not be used by those who have not agreed to the procedures and taken responsibility for the sufficiency of the procedures for their purposes. However, this report is a matter of public record and its distribution is not limited. "O��-44Vow Brea, California July 12, 2021 A. B. C. D. E. CITY OF ROSEMEAD, CALIFORNIA FISCAL YEAR 2020-2021 APPROPRIATIONS LIMIT CALCULATION 2019-2020 APPROPRIATIONS LIMIT: $ 50,198,555 2020-2021 CHANGE IN PER CAPITA PERSONAL INCOME: 1.0373% 2020-2021 CHANGE IN POPULATION: 1.0030% RATIO OF CHANGE (1.0373 X 1.0030): X 1.040411900 2020-2021 APPROPRIATIONS LIMIT: $ 52,227,174 ($50,198,555 X 1.040411900) ur �RpORATEO '% Attachment E Rosemead Housing Development Corporation Basic Financial Statements LSUe !!! !!• !! ROSEMEAD HOUSING DEVELOPMENT CORPORATION FOR THE YEAR ENDED JUNE 30, 2021 BASIC FINANCIAL STATEMENTS Focused on YOU 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, 2021 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, 2021 TABLE OF CONTENTS Page Number INDEPENDENT AUDITORS' REPORT..................................................................................................1 BASIC FINANCIAL STATEMENTS Statementsof Net Position...............................................................................................................4 Statementsof Activities....................................................................................................................5 BalanceSheet..................................................................................................................................6 Reconciliation of the Balance Sheet of Governmental Fund to the Statement of Net Position.......................................................................................................7 Statement of Revenues, Expenditures and Changes in Fund Balance...........................................8 Reconciliation of the Statement of Revenues, Expenditures, and Changes in Fund Balance of Governmental Fund to the Statementof Activities......................................................................................................................9 Notes to Financial Statements........................................................................................................10 REQUIRED SUPPLEMENTARY INFORMATION Notes to Required Supplementary Information..............................................................................17 BudgetaryComparison Schedule...................................................................................................18 INDEPENDENT AUDITORS' REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS..................................................19 LSL•iii iiii •i INDEPENDENT AUDITORS' REPORT To the Board of Directors Rosemead Housing Development Corporation City of Rosemead, California Report on the Financial Statements Opinions 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, 2021, and the related notes to the financial statements, which collectively comprise the Corporation's basic financial statements as listed in the table of contents. In our opinion, the financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities and General Fund of the Rosemead Housing Development Corporation (the Corporation), a component unit of the City of Rosemead, California as of June 30, 2021, 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. Basis for Opinions We conducted our audit in accordance with auditing standards generally accepted in the United States of America (GAAS) and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Our responsibilities under those standards are further described in the Auditor's Responsibilities for the Audit of the Financial Statements section of our report. We are required to be independent of the City and to meet our other ethical responsibilities, in accordance with the relevant ethical requirements relating to our audits. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. Responsibilities of Management 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; and for 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. In preparing the financial statements, management is required to evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the City's ability to continue as a going concern for twelve months beyond the date of the financial statements. PrimeGlobal Iurlrpn��e�il,L ��iinli�{y Finn so L SL•°:: To the Board of Directors Rosemead Housing Development Corporation City of Rosemead, California Auditor's Responsibilities for the Audit of the Financial Statements Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance but is not absolute assurance and therefore is not a guarantee that an audit conducted in accordance with the GAAS and Government Auditing Standards will always detect a material misstatement when it exists. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Misstatements are considered material if, there is a substantial likelihood that, individually or in the aggregate, they would influence the judgment made by a reasonable user based on the financial statements. In performing an audit in accordance with GAAS and Government Auditing Standards, we: • Exercise professional judgment and maintain professional skepticism throughout the audit. • Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, and design and perform audit procedures responsive to those risks. Such procedures include examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. • Obtain an understanding of internal control relevant to the audit 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 City's internal control. Accordingly, no such opinion is expressed. • Evaluate the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluate the overall presentation of the financial statements. • Conclude whether, in our judgment, there are conditions or events, considered in the aggregate, that raise substantial doubt about the City's ability to continue as a going concern for a reasonable period of time. We are required to communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit, significant audit findings, and certain internal control -related matters that we identified during the audit. Other Reporting Responsibilities 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 is the responsibility of management and, 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. 2 LSL•••• .. To the Board of Directors Rosemead Housing Development Corporation City of Rosemead, California 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 17, 2021, 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. IVA V WN YA Brea, California December 17, 2021 3 ROSEMEAD HOUSING DEVELOPMENT CORPORATION A COMPONENT UNIT OF THE CITY OF ROSEMEAD, CALIFORNIA STATEMENT OF NET POSITION JUNE 30, 2021 Assets: Cash and investments Accounts receivable Capital assets, net of depreciation Total Assets Liabilities: Accounts payable Deposits payable Total Liabilities Net Position: Investment in capital assets Unrestricted Total Net Position Governmental Activities $ 462,221 7,854 6,439,443 6,909,518 7,833 44,939 52,772 6,439,443 417,303 $ 6,856,746 The notes to financial statements are an integral part of this statement. 4 ROSEMEAD HOUSING DEVELOPMENT CORPORATION A COMPONENT UNIT OF THE CITY OF ROSEMEAD, CALIFORNIA STATEMENT OF ACTIVITIES FOR THE YEAR ENDED JUNE 30, 2021 Functions/Programs Governmental Activities: General Government $ 1,089,630 $ 472,553 $ 452,473 $ - $ (164,604) Total Governmental Activities $ 1,089,630 $ 472,553 $ 452,473 $ - (164,604) General Revenues: Investment Income 13 Other 4,250 Total General Revenues 4,263 Change in Net Position (160,341) Net Position at the Beginning of the Year Net Position at the End of the Year The notes to financial statements are an integral part of this statement. 5 7,017,087 $ 6,856,746 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 $ 1,089,630 $ 472,553 $ 452,473 $ - $ (164,604) Total Governmental Activities $ 1,089,630 $ 472,553 $ 452,473 $ - (164,604) General Revenues: Investment Income 13 Other 4,250 Total General Revenues 4,263 Change in Net Position (160,341) Net Position at the Beginning of the Year Net Position at the End of the Year The notes to financial statements are an integral part of this statement. 5 7,017,087 $ 6,856,746 ROSEMEAD HOUSING DEVELOPMENT CORPORATION A COMPONENT UNIT OF THE CITY OF ROSEMEAD, CALIFORNIA BALANCE SHEET GOVERNMENTALFUND JUNE 30, 2021 Assets: Cash and investments Accounts receivable Total Assets Liabilities and Fund Balance: Liabilities: Accounts payable Deposits payable Total Liabilities Fund Balances: Unassigned Total Fund Balances Total Liabilities and Fund Balance The notes to financial statements are an integral part of this statement. 6 General Fund $ 462,221 7,854 $ 470,075 $ 7,833 44,939 52,772 417,303 417,303 $ 470,075 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, 2021 Fund balances of governmental funds Amounts reported for governmental activities in the statement of net position are different because: 417,303 Capital assets net of depreciation have not been included as financial resources in governmental fund activity. 6,439,443 Net Position of Governmental Activities The notes to financial statements are an integral part of this statement. 7 $ 6,856,746 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, 2021 Revenues: Intergovernmental Rental Income Investment Income Other Total Revenues Expenditures: Current: Operating Administrative services paid to City of Rosemead Facility rent paid to City of Rosemead Total Expenditures Net Change in Fund Balance Fund Balance at the Beginning of the Year Fund Balance at the End of the Year The notes to the financial statements are an integral part of this statement. 8 General Fund $ 452,473 472,553 13 4,250 929,289 451,157 232,300 183,400 866,857 62,432 354,871 $ 417,303 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, 2021 Net change in fund balances - total governmental funds Amounts reported for governmental activities in the statement of activities are different because: 62,432 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 The notes to financial statements are an integral part of this statement. 9 $ (160,341) ROSEMEAD HOUSING DEVELOPMENT CORPORATION A COMPONENT UNIT OF THE CITY OF ROSEMEAD, CALIFORNIA NOTES TO FINANCIAL STATEMENTS JUNE 30, 2021 Note 1: Summary of Significant Accounting Policies a. Reporting Entity The Rosemead Housing Development Corporation (the Corporation) is a nonprofit corporation whose purpose is to provide assistance to the Rosemead Community Development Commission (the Commission) to account for the construction, financing and operations of low- and moderate -income housing for the benefit of the City of Rosemead (the City). The Corporation currently maintains the Angelus and Garvey Senior Housing facilities. The Corporation is exempt from income taxes under Section 501 (c)(3) of the Internal Revenue Code (IRC) and applicable state statutes. Governmental Accounting Standards Board (GASB) Statement No. 14, The Financial Reporting Entity, defines the reporting entity as the primary government and those component units for which the primary government is financially accountable. Financial accountability is defined as appointment of a voting majority of the component unit's Board and either (a) the primary government has the ability to impose its will or (b) the possibility exists that the component unit will provide a financial benefit to or impose a financial burden on the primary government. Since the Board of Directors of the Commission and the Council members also serve as the Board of Directors of the Corporation, the Commission and the City, in effect, have the ability to influence and control operations. Therefore, the City has oversight responsibility for the Corporation. Accordingly, in applying the criteria of GASB Statement No. 14, the financial statements of the Corporation are included in the City's financial reports. The Corporation has the same fiscal year as the City. These financial statements contain information for the Corporation only. The City's financial report may be obtained by contacting the Financial Department of the City. As a result of the Assembly Bill X1 26 signed into law as part of the State of California's budget package on June 29, 2011, the Rosemead Community Development Commission ceased to exist as of February 1, 2012. On January 10, 2012, the City Council elected to serve as the successor agency to the Commission and retain the housing assets and functions previously held and performed by the Commission. b. Basis of Accounting and Measurement Focus The basic financial statements of the Corporation are composed of the following: • Government -wide financial statements • Fund financial statements • Notes to the basic financial statements Government -wide Financial Statements Government -wide financial statements display information about the reporting government as a whole, except for its fiduciary activities. These statements include separate columns for the governmental and business -type activities of the primary government (including its blended component units), as well as its discretely presented component units. The Corporation has no business -type activities or discretely presented component units. 10 ROSEMEAD HOUSING DEVELOPMENT CORPORATION A COMPONENT UNIT OF THE CITY OF ROSEMEAD, CALIFORNIA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2021 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. 11 ROSEMEAD HOUSING DEVELOPMENT CORPORATION A COMPONENT UNIT OF THE CITY OF ROSEMEAD, CALIFORNIA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2021 Note 1: Summary of Significant Accounting Policies (Continued) Revenue recognition is subject to the measurable and available criteria for the governmental funds in the fund financial statements. Exchange transactions are recognized as revenues in the period in which they are earned (i.e., when the related goods or services are provided). Locally imposed derived tax revenues are recognized as revenues in the period in which the underlying exchange transaction upon which they are based takes place. Imposed non-exchange transactions are recognized as revenues in the period for which they were imposed. If the period of use is not specified, they are recognized as revenues when an enforceable legal claim to the revenues arises or when they are received, whichever occurs first. Government -mandated and voluntary nonexchange transactions are recognized as revenues when all applicable eligibility requirements have been met. In the fund financial statements, governmental funds are presented using the current financial resources measurement focus. This means that only current assets and current liabilities are generally included on their balance sheets. The reported fund balance (net current assets) is considered to be a measure of "available spendable resources." Governmental fund operating statements present increases (revenues and other financing sources) and decreases (expenditures and other financing uses) in net current assets. Accordingly, they are said to present a summary of sources and uses of "available spendable resources" during a period. Non-current portions of long-term receivables due to governmental funds are reported on their balance sheets in spite of their spending measurement focus. Special reporting treatments are used to indicate, however, that they should not be considered "available spendable resources," since they do not represent net current assets. Recognition of governmental fund type revenues represented by noncurrent receivables are deferred until they become current receivables. Because of their spending measurement focus, expenditure recognition for governmental fund types excludes amounts represented by noncurrent liabilities. Since they do not affect net current assets, such long-term amounts are not recognized as governmental fund type expenditures or fund liabilities. Amounts expended to acquire capital assets are recorded as expenditures in the year that resources were expended, rather than as fund assets. The proceeds of long-term debt are recorded as an other financing source rather than as a fund liability. Amounts paid to reduce long-term indebtedness are reported as fund expenditures. When both restricted and unrestricted resources are combined in a fund, expenses are considered to be paid first from restricted resources, and then from unrestricted resources. c. Major Fund The Corporation reports the General Fund as its major fund. 12 ROSEMEAD HOUSING DEVELOPMENT CORPORATION A COMPONENT UNIT OF THE CITY OF ROSEMEAD, CALIFORNIA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2021 Note 1: Summary of Significant Accounting Policies (Continued) d. Cash and Investments Cash includes amounts in demand and time deposits. Investments, if any, are reported in the accompanying balance sheet at fair value, except for certain money market and investment contracts that are reported at cost because they are not transferable, and they have terms that are not affected by changes in market interest rates. Changes in fair value that occur during a fiscal year are recognized as income from property and investments reported for that fiscal year. Income from property and investments includes interest earnings, changes in fair value, any gains or losses realized upon the liquidation, maturity or sale of investments, property rentals, and the sale of City -owned property. e. Capital Assets Capital assets, which include buildings and improvements, and furniture and equipment, are reported as part of governmental activities in the government -wide financial statements. Capital assets are defined by the Corporation as assets with an initial, individual cost of more than $10,000 and an estimated useful life in excess of one year. Such assets are recorded at historical cost or estimated historical cost if purchased or constructed. Donated capital assets are recorded at acquisition value at the date of donation. The cost of normal maintenance and repairs that do not add to the value of an asset or materially extend an asset's useful life are not capitalized. Costs associated with construction in progress are recorded in their respective capital assets category upon approval by the Corporation's governing board, which approximates the completion date. Depreciation is charged to operations using the straight-line method based on the estimated useful life of an asset. The estimated useful lives of depreciable assets are as follows: Buildings 50 years Improvement 15 years Furniture and equipment 7 years f. Income Taxes The Corporation is exempt from federal income taxes under Section 501(c)(3) of the IRC and a similar exemption under state law. g. Fund Balance The Corporation reports fund balance in classifications that describe the relative strength of the spending constraints placed on the purposes for which resources can be used: Nonspendable — amounts that are not in a spendable form (such as inventory) or are required to be maintained, intact. 13 ROSEMEAD HOUSING DEVELOPMENT CORPORATION A COMPONENT UNIT OF THE CITY OF ROSEMEAD, CALIFORNIA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2021 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 Director and City Manager as the Corporation officials to determine, define, and make the necessary account or fund transfers for the amounts to those components of fund balance that are classified as "Assigned Fund Balance." When both restricted and unrestricted resources are available for use when an expenditure is incurred, it is the Corporation's policy to use restricted resources first, then unrestricted resources as they are needed. It is the Corporation's policy to consider committed amounts as being reduced first, followed by assigned amounts, and then unassigned amounts when expenditures are incurred for purposes for which amounts in any of those unrestricted fund balance classifications could be used. h. Rental Income A management company collects rent payments on the first day of the month and the corporation recognizes revenue in the month due. Monthly rental income per unit ranges from $250 to $450 and is approved by the annual budget. i. Use of Estimates The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect certain reported amounts and disclosures. Accordingly, actual results could differ from those estimates. 14 ROSEMEAD HOUSING DEVELOPMENT CORPORATION A COMPONENT UNIT OF THE CITY OF ROSEMEAD, CALIFORNIA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2021 Note 2: Cash and Investments Cash and investments at June 30, 2021 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 $462,221. 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, 2021, 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 $232,300 for administrative services to the City during the year ended June 30, 2021. The Corporation is funded, in part, by contributions from the Successor Agency. 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. 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. The lease amounts are to increase by 2% per year or by the percentage increase in CPI, whichever is higher. The Corporation paid $91,200 and $92,200 in lease payments to the City during the year ended June 30, 2021 for the Angelus and Garvey Senior Housing facilities, respectively. 15 ROSEMEAD HOUSING DEVELOPMENT CORPORATION A COMPONENT UNIT OF THE CITY OF ROSEMEAD, CALIFORNIA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2021 Note 4: Capital Assets During the year ended June 30, 2021, the changes in capital assets were as follows: 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, 2021. 16 Balance at Balance at June 30, 2020 Additions Deletions June 30, 2021 Governmental Activities: Capital assets being depreciated: Building and improvements $ 11,042,597 $ - $ - $ 11,042,597 Furniture and equipment 128,544 - - 128,544 Total Capital Assets, Being Depreciated 11,171,141 - - 11,171,141 Less accumulated depreciation: Building and improvements (4,380,381) (222,773) - (4,603,154) Furniture and equipment (128,544) - - (128,544) Total Accumulated Depreciation (4,508,925) (222,773) - (4,731,698) Govemmental Activities Capital Assets, Net $ 6,662,216$ (222,773) $ - $ 6,439,443 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, 2021. 16 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 directors, with approval of the Finance Director and City Manager, may make transfers of appropriations within the department and between departments within a fund. 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 subsequentyear. 17 ROSEMEAD HOUSING DEVELOPMENT CORPORATION A COMPONENT UNIT OF THE CITY OF ROSEMEAD, CALIFORNIA BUDGETARY COMPARISON SCHEDULE FOR THE YEAR ENDED JUNE 30, 2021 Budgetary Fund Balance, July 1 Resources (Inflows): Intergovernmental Rental income Investment income Miscellaneous Amounts Available for Appropriations Budget Amounts Original Final Variance with Final Budget Actual Positive Amounts (Negative) 354,871 $ 354,871 $ 354,871 $ 665,700 665,700 452,473 (213,227) 460,600 460,600 472,553 11,953 - - 13 13 3,500 3,500 4,250 750 1,484,671 1,484,671 1,284,160 (200,511) Charges to Appropriations (Outflows): Operating costs 708,800 708,800 451,157 257,643 Administrative services paid to City of Rosemead 237,600 237,600 232,300 5,300 Facility rent paid to City of Rosemead 183,400 183,400 183,400 - Total Charges to Appropriations 1,129,800 1,129,800 866,857 262,943 Budgetary Fund Balance (Deficit), June 30 $ 354,871 $ 354,871 $ 417,303 $ 62,432 The notes to required supplementary information are an integral part of this schedule. 18 LS1X00• •0!0 •0 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 City of 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 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, 2021, 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 17, 2021. 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 Fund'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 InAepn.JnnAarnnlirW FLms L Lo*••: •• To the Board of Directors Rosemead Housing Development Corporation City of 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. Or-44a,C�o,4 Brea, California December 17, 2021 20 E '<-�OPORATEO '% Attachment F Auditors' Letter to Board of Directors of the Rosemead Housing Development Corporation for Year Ended June 30, 2021 •90• LS[ •606 •0 December 17, 2021 To the Board of Directors Rosemead Housing Development Corporation City of Rosemead, California We have audited 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 for the year ended June 30, 2021. Professional standards require that we provide you with information about our responsibilities under generally accepted auditing standards, Government Auditing Standards and the Uniform Guidance, as well as certain information related to the planned scope and timing of our audit. We have communicated such information in our letter to you dated April 27,2021. Professional standards also require that we communicate to you the following information related to our audit. Significant Audit Findings and Other Issues Qualitative Aspects of Significant Accounting Practices Management is responsible for the selection and use of appropriate accounting policies. The significant accounting policies used by the Corporation are described in the notes to the financial statements. No new accounting policies were adopted and the application of existing policies was not changed during fiscal year 2020-2021. We noted no transactions entered into by the Corporation during the year for which there is a lack of authoritative guidance or consensus. All significant transactions have been recognized in the financial statements in the proper period. Accounting estimates are an integral part of the financial statements prepared by management and are based on management's knowledge and experience about past and current events and assumptions about future events. Certain accounting estimates are particularly sensitive because of their significance to the financial statements and because of the possibility that future events affecting them may differ significantly from those expected. The financial statement disclosures are neutral, consistent, and clear. Significant Unusual Transactions Management is responsible for the policies and practices used to account for significant unusual transactions. No significant unusual transactions have occurred during fiscal year 2020-2021. Difficulties Encountered in Performing the Audit We encountered no significant difficulties in dealing with management in performing and completing our audit. PrimeGlobal Inn orlon nJ InArpenJrut.trimintfriy Fvms LSUo": To the Board of Directors Rosemead Housing Development Corporation City of Rosemead, California Corrected and Uncorrected Misstatements Professional standards require us to accumulate all known and likely misstatements identified during the audit, other than those that are trivial, and communicate them to the appropriate level of management. No misstatements were found. Disagreements with Management For purposes of this letter, a disagreement with management is a financial accounting, reporting, or auditing matter, whether or not resolved to our satisfaction, that could be significant to the financial statements or the auditor's report. We are pleased to report that no such disagreements arose during the course of our audit. Circumstances that Affect the Form and Content of the Auditor's Report New auditing standards were implemented in fiscal year 2020-2021 related to Statement of Auditing Standards 134, Auditor Reporting and Amendments, Including Amendments Addressing Disclosures in the Audit of Financial Statements, through Statement of Auditing Standards 140, Supplementary Information in Relation to the Financial Statements as a Whole. These standards updated the form and content of the financial statement auditor's report. The purpose of the change was to present an easier format for users to understand the results of the audit and management's responsibilities. Management Representations We have requested certain representations from management that are included in the management representation letter dated December 17, 2021. Management Consultations with Other Independent Accountants In some cases, management may decide to consult with other accountants about auditing and accounting matters, similar to obtaining a "second opinion" on certain situations. If a consultation involves application of an accounting principle to the Corporation's financial statements or a determination of the type of auditor's opinion that may be expressed on those statements, our professional standards require the consulting accountant to check with us to determine that the consultant has all the relevant facts. To our knowledge, there were no such consultations with other accountants. Other Audit Findings or Issues Discussed with Management We generally discuss a variety of matters, including the significant events or transactions that occurred during the year, business conditions affecting the Corporation and business plans and strategies that may affect the risks of material misstatements, the application of accounting principles and auditing standards, with management each year prior to retention as the Corporation's auditors. However, these discussions occurred in the normal course of our professional relationship and our responses were not a condition to our retention. Other Matters We applied certain limited procedures to budgetary comparison schedule for the General Fund which are required supplementary information (RSI) that supplements the basic financial statements. Our procedures consisted of inquiries of management regarding 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 did not audit the RSI and do not express an opinion or provide any assurance on the RSI. LSL:*::: To the Board of Directors Rosemead Housing Development Corporation City of Rosemead, California The following new Governmental Accounting Standards Board (GASB) pronouncements were effective for fiscal year 2020-2021 audit: GASB Statement No. 84, Fiduciary Activities. GASB Statement No. 90, Majority Equity Interests - an Amendment of GASB Statement Nos. 14 and 61. The following GASB pronouncements are effective in the following fiscal years' audits and should be reviewed for proper implementation by management: Fiscal year 2022 GASB Statement No. 87, Leases. GASB Statement No. 89, Accounting for Interest Cost Incurred before the End of a Construction Period. GASB Statement No. 97, Certain Component Unit Criteria, and Accounting and Financial Reporting for Internal Revenue Code Section 457 Deferred Compensation Plans. Fiscal year 2023 GASB Statement No. 91, Conduit Debt Obligations. GASB Statement No. 94, Public -Private and Public -Public Partnerships and Availability Payment Arrangement. GASB Statement No. 96, Subscription -Based Information Technology Arrangements. Restriction on Use This information is intended solely for the use of the Board of Directors and management of Rosemead Housing Development Corporation and is not intended to be, and should not be, used by anyone other than these specified parties. Very truly yours, Brea, California