CAFR FY 2010-11141
CI 1 Y OF RANCHO PALOS VERDES
CALIF OR NIA
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COMPREHENSIVE r
ANNUAL FINANCIAL REPORT
CITY OF RANCHO PALOS VERDES,
CALIFORNIA
COMPREHENSIVE
ANNUAL FINANCIAL REPORT
For the Year Ended June 30, 2011
Prepared By:
Finance & Information Technology Department
Dennis McLean, Director
Kathryn Downs, Deputy Director
Cover photo provides an aerial view of Palos Verdes Drive South
INTRODUCTORY SECTION
Civic Leadership Academy
CITY OF RANCHO PALOS VERDES
COMPREHENSIVE ANNUAL FINANCIAL REPORT
FOR THE YEAR ENDED JUNE 30, 2011
TABLE OF CONTENTS
INTRODUCTORY SECTION:
Table of Contents i -iii
Letter of Transmittal iv -ix
Directory of City Officials x
Organization Chart xi
GFOA Certificate of Achievement for Excellence in Financial Reporting xii
FINANCIAL SECTION:
Independent Auditor's Report 3
Management Discussion and Analysis 7
Government -Wide Financial Statements
Statement of Net Assets 23
Statement of Activities 24
Fund Financial Statements
Governmental Funds
Balance Sheet 28
Reconciliation of the Balance Sheet of Governmental Funds
to the Statement of Net Assets 31
Statement of Revenues, Expenditures, and Changes in Fund Balances 32
Reconciliation of the Statement of Revenues, Expenditures, and Changes
in Fund Balances to the Statement of Activities 34
General Fund
Statement of Revenues, Expenditures, and Changes in Fund Balance
- Budget and Actual 35
Street Maintenance Special Revenue Fund
Statement of Revenues, Expenditures, and Change in Fund Balance
- Budget and Actual 37
Redevelopment Agency Housing Set -Aside Special Revenue Fund
Statement of Revenues, Expenditures, and Change in Fund Balance
- Budget and Actual 38
Proprietary Funds
Statement of Net Assets 39
Statement of Revenues, Expenses, and Changes in Fund Net Assets 40
Statement of Cash Flows 41
Notes to the Financial Statements 44
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CITY OF RANCHO PALOS VERDES
COMPREHENSIVE ANNUAL FINANCIAL REPORT
FOR THE YEAR ENDED JUNE 30, 2011
TABLE OF CONTENTS
Supplementary Information
Major Fund Budgetary Comparison Schedules
Schedule of Revenues, Expenditures, and Changes in Fund Balances
- Budget and Actual
RDA Debt Service Fund 78
Capital Improvements Capital Projects Fund 79
Non -Major Governmental Funds
Combining Balance Sheet 84
Combining Statement of Revenues, Expenditures, and Changes
in Fund Balances 90
Schedule of Revenues, Expenditures, and Changes in Fund Balances
- Budget and Actual — Special Revenue Funds
Air Quality Management Fund 96
Community Development Block Grant Fund 97
El Prado Fund 98
Proposition A Fund 99
Proposition C Fund 100
Measure R 101
Beautification Fund 102
Waste Reduction Fund 103
Public Safety Grants Fund 104
1972 Act Fund 105
1911 Act Fund 106
JPIA — Portuguese Bend Fund 107
Habitat Restoration Fund 108
Measure A Fund 109
Abalone Cove Sewer Assessment District 110
Dr. Allen and Charlotte Ginsburg Cultural Arts Building 111
Donor Restricted Contributions 112
Bikeways Fund 113
Environmental Excise Tax Fund 114
Quimby Fund 115
Affordable Housing Fund 116
Schedule of Revenues, Expenditures, and Changes in Fund Balances
- Budget and Actual — Capital Projects Funds
RDA Abalone Cove Fund 117
RDA Portuguese Bend Fund 118
Schedule of Revenues, Expenditures, and Changes in Fund Balance
- Budget and Actual — Permanent Fund
Subregion One Maintenance Fund
JPIA — Abalone Cove Fund
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119
120
CITY OF RANCHO PALOS VERDES
COMPREHENSIVE ANNUAL FINANCIAL REPORT
FOR THE YEAR ENDED JUNE 30, 2011
TABLE OF CONTENTS
Internal Service Funds
Combining Statement of Net Assets 122
Combining Statement of Revenues, Expenses, and Changes
in Fund Net Assets 123
Combining Statement of Cash Flows 124
STATISTICAL SECTION (Unaudited)
Financial Trends
Net Assets by Component 128
Changes in Net Assets 129
Governmental Activities Tax Revenue By Source 131
Fund Balances of Governmental Funds — Before GASB 54 132
Fund Balances of Governmental Funds — After GASB 54 133
Changes in Fund Balances of Governmental Funds 134
General Governmental Tax Revenues By Source 135
Revenue Capacity
Assessed Value and Estimated Actual Value of Taxable Property 136
Property Tax Rates - Direct and Overlapping Governments 137
Principal Property Tax Payers 138
Property Tax Levies and Collections 139
Debt Capacity
Ratios of Outstanding Debt by Type 140
Direct and Overlapping Governmental Activities Debt 141
Legal Debt Margin Information 142
Demographic and Economic Information
Demographic and Economic Statistics 143
Principal Sales Tax Payers 144
Principal Employers 145
Operating Information
Full-time Equivalent City Government Employees by Function 146
Operating Indicators by Function 147
Capital Asset Statistics by Function 148
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Coastal View of Point Vicente Lighthouse
CITY O RANCHO PALOS VERDES
December 21, 2011
Honorable Mayor and City Council
City of Rancho Palos Verdes
Rancho Palos Verdes, California
The Comprehensive Annual Financial Report (CAFR) of the City of Rancho Palos Verdes for the fiscal year ended
June 30, 2011, is hereby submitted as mandated by both local ordinances and state statutes. These ordinances and
statutes require that the City of Rancho Palos Verdes issue annually a report on its financial position and activity, and
that an independent firm of certified public accountants audit this report. Responsibility for both the accuracy of the
data, and the completeness and fairness of the presentation, including all disclosures, rests with the City. To the best
of our knowledge and belief, the enclosed data is accurate in all material respects and is reported in a manner that
presents fairly the financial position and results of operations of the various funds and component units of the City of
Rancho Palos Verdes. In addition, to the best of our knowledge, there are no untrue statements of material fact
within the financial statements or omissions of material fact to cause the financial statements to be misleading. All
disclosures necessary to enable the reader to gain an understanding of the City's financial activities have been
included.
The financial section of the CAFR includes management's discussion and analysis (MD&A). This letter of transmittal
is designed to complement the MD&A and should be read in conjunction with it.
The financial reporting entity (the government) includes all the funds of the primary government (i.e., the City of
Rancho Palos Verdes as legally defined), as well as its component units, the Rancho Palos Verdes Redevelopment
Agency and the Joint Powers Improvement Authority. A component unit is a legally separate entity for which the
primary government is financially accountable. The City provides a broad range of services, including police
protection, solid waste collection, construction and maintenance of streets and other infrastructure, planning and
zoning activities, recreational activities, cultural events, and general administrative services. The City of Rancho
Palos Verdes is a contract city, meaning that some of these services are provided by contract with other agencies
(both public and private) and some services are delivered by the City's own employees.
Special districts of the County of Los Angeles provide library services, fire protection services, and sewer services.
The City has excluded the County of Los Angeles, as well as the State of California and various school districts, from
the financial reporting entity because they do not meet the established criteria for inclusion.
GOVERNMENTAL STRUCTURE
The City of Rancho Palos Verdes is located on a coastal peninsula overlooking the Pacific Ocean in Los Angeles
County, 20 miles south of the City of Los Angeles. The City was incorporated September 7, 1973. The City currently
has a land area of 13.6 square miles and a population of about 43,000. The City is primarily a "bedroom" community
with relatively little commercial activity.
The City has operated under the council-manager form of government since incorporation. Policy-making and
legislative authority are vested in the governing council, which consists of five council members, including the mayor
and mayor pro -tem. The governing council is responsible, among other things, for passing ordinances, adopting the
budget, appointing committees and hiring the city manager and the city attorney. The city manager is responsible for
carrying out the policies and ordinances of the governing council, for overseeing the day-to-day operations of the
government, and for appointing the heads of the government's departments. The council is elected on a non-
partisan, at -large basis. Council members are elected to four-year staggered terms with two or three council
members elected every two years. The council designates the mayor and mayor pro -tem for a one-year term.
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MAJOR INITIATIVES
The City's staff, following specific directives of the City Council and the City Manager, has been involved in a variety
of projects throughout the year. These projects reflect the government's commitment to ensuring that its citizens are
able to live and work in an enviable environment.
Community Development
The City together with the Palos Verdes Peninsula Land Conservancy continued management of the City's
Natural Communities Conservation Plan (NCCP) Preserve, including completion of a Draft Preserve Trails
Plan for the last parcel acquired to complete the habitat preserve, the restoration of habitat in a portion of the
burn area, and several trail maintenance projects.
Continued to formally monitor development projects in surrounding jurisdictions (referred to as "border
issues") to assess their potential impacts upon the City and its residents.
Continued to approve the installation of various commercial antenna facilities for cellular telephones and
personal communication systems on private property throughout the City.
Continued to take steps in updating the City's General Plan by working with a consulting team in the
preparation of various studies to support the General Plan Update, and in obtaining Planning Commission
approval of the draft text for each of the General Plan Elements. Staff is currently presenting Draft General
Plan Land Use Map Changes to the Planning Commission for review and approval. Staff anticipates that the
Planning Commission will complete their review and recommend a draft of the General Plan Update to the
City Council in early 2012. Staff also anticipates that the City Council will adopt the Updated General Plan in
summer 2012.
Continued to implement its Housing Element by working with a developer to develop the "Mirandela" 34 unit
affordable housing project. The project is a multi -family rental housing project that has been made available
to seniors 62 years and older that qualify under extremely -low, very -low, low and moderate incomes. The
project was funded by a combination of sources, which include the City's In -lieu Affordable Housing Fund,
the Redevelopment Agency's 20% Affordable Housing Fund, and 9% Tax Credits awarded by the California
Tax Credit Allocation Committee. Construction of the project began in November 2009. The project was
completed in December 2010 and was fully occupied in January 2011.
Implemented the approved Vision Plan, a coordinated master plan consisting of program, design and linkage
concepts for land located within the coastal region of the City, by being awarded a $500,000 grant by the
California Coastal Conservancy to complete the RPV portion of the California Coastal Trail.
Public Works
➢ Completed the Project Study Report for the San Ramon Canyon Storm Drain System, which was
needed to manage runoff and mitigate erosion within San Ramon Canyon, to provide a basis for
estimating anticipated construction costs and to be used to help secure State/Federal funding.
➢ Completed the Palos Verdes Drive South Landslide Road Stability Grading Project that installed
approximately 40,000 cubic yards of soil buttressing the roadway.
➢ Completed the Early Action Stabilization Project design which may be needed to stabilize Palos Verdes
Drive East in the event that erosion originating within San Ramon Canyon progresses westward affecting
the roadway stability.
➢ Completed the Palos Verdes Drive East Implementation Plan which outlines and programs incremental
safety improvements along the corridor over time and in coordination with other planned improvements.
➢ Completed the resurfacing of Hawthorne Blvd and Palos Verdes Drive West which was funded by
American Recovery Reinvestments Act (ARRA), Proposition 1 B, Proposition C and Rubberized Asphalt
Concrete (RAC) grant funds. The project included a new driving surface, bus pads, access ramps and
roadway striping.
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➢ The City was awarded a $707,000 grant from the Federal Highway Safety Program, which will used to
synchronize traffic signals along Hawthorne Boulevard.
➢ Completed the resurfacing of various residential roadways in Zones 6 and 8 of the City. Improvements
included slurry seal and asphalt concrete overlay, access ramp improvements and roadway signing and
striping.
➢ Completed beautification to medians along Hawthorne Boulevard and Palos Verdes Drive West.
Improvements include drought -tolerant plant installation, irrigation controls and rock enhancements.
➢ Established revised fees for the Neighborhood Permit Parking program which memorialized a one-time
decal fee of $2.50 for residents participating in the program.
➢ Established a Neighborhood Permit Parking program in the Rolling Hills Riviera area surrounding
Dodson Middle School.
➢ Completed the Energy Savings Upgrades for City Facilities, including installation of energy efficient
mechanical equipment and electrical fixtures at Hesse Park and double pane windows at City Hall. The
project was funded with a federal grant.
➢ Completed the Power Generator System Installation project at Point Vicente Interpretive Center and
Hesse Park to provide emergency power to these buildings, which house critical information technology
infrastructure and are routinely booked for public or private events.
➢ Completed the Community Development Department Restrooms Americans with Disabilities Act
Compliance project to make the restrooms frequently used by the public compliant with the accessibility
requirements of the building code.
➢ Completed the City Hall Main Waterline System Replacement project to prevent further breakage of the
aged and deteriorating water lines installed in the 1960's.
➢ Completed the Hesse Park and Ryan Park Athletic Field Improvement projects to improve athletic field
quality use and create opportunities for multiple concurrent athletic uses, which included making the low
area at Ryan Park's left outfield level with the playing field.
➢ Completed the first year of transitioning to a new residential solid waste provider, EDCO. The transition
included several key changes, including:
• Frequency of collection from twice a week to once a week;
• Method of collection from manual collection to automated cart collection;
• New collection days;
• Variable automated cart sizes;
• New alternative fuel vehicles (CNG); and
• New volume based billing.
Parks and Recreation
Coordinated numerous annual special events and recreational offerings for the community. Annual events
included the Whale of a Day Celebration, July 4th Independence Day Celebration, Egg Hunt
Eggstravaganza, Shakespeare by the Sea performances, Coastal Cleanup Day, Halloween Spooktacular,
and Breakfast with Santa Fundraiser. Recreational offerings included the Junior Ranger and Junior Docent
Programs, Paddle Tennis Tournament, Pitch, Hit & Run Competition, Night at the Museum, and Junior
Ranger Summer Camp.
Continued to coordinate and provide oversight of the public and private rentals and activities at the various
City facilities. These included community and private classes and parties, youth athletic league activities, film
shoots, and non-profit events coordinated with many organizations including Peninsula Seniors, Palos
Verdes Amateur Radio Club, RPV Council of Homeowners Associations, Palos Verdes Peninsula Native
Plant Society, American Cetacean Society, California Coastal National Monument, Bureau of Land
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Management, Montrose Settlement, PV Women's Club, PV Art Center, Angeles Girl Scouts, LA County Life
Guards, Norris Foundation and others.
➢ Negotiated a new contract with Trump National Golf Course for private rentals at Founders Park, providing
renters at this park site with more services at a lower cost.
Provided direction and opportunities for the volunteers and programs of Los Serenos de Point Vicente. In
coordination with the City, Los Serenos continued to expand its public and private hikes, and through
completion of a Strategic Plan, developed new programs including a new 4th grade tour coordinated through
Palos Verdes Peninsula Unified School District, as well as several videos for the Junior Docent Nature
Series that air on RPVTV. This video series offers insight into the history of the Peninsula including its
natural resources, while providing Palos Verdes High School youth the opportunity to serve their community.
➢ Contracted with the Mountains Recreation and Conservation Authority (MRCA) Park Rangers to provide
ranger services in the Palos Verdes Nature Preserve, and to offer a Junior Ranger Program and Junior
Ranger Summer Camp.
➢ Partnered with the City of Los Angeles to offer monthly pet adoption events and the County of Los Angeles
to offer biennial Low Cost Pet Vaccination, Microchip, and Licensing Clinics.
➢ Through the City's Gifts for Parks program, Staff continued to pursue donations for the Fourth of July
Celebration and the REACH program for young adults with developmental disabilities. Department staff and
Los Serenos volunteers also continued to solicit donations for PVIC museum exhibits and programs, with
assistance from the City's docent organization.
➢ Commenced a project to evaluate sites on the Peninsula for the potential inclusion of a skate park and a dog
park.
➢ Conducted community outreach and research to determine appropriate uses, including a potential off -leash
dog beach at the City's newly acquired Rancho Palos Verdes Beach.
➢ Recreation and Parks Staff teamed with Public Works Staff on a project that improved the athletic fields at
Ryan Park and Hesse Park to increase the quality and safety of play and to expand recreational
opportunities.
Administration
➢ RPVTV continued to expand programming offered on the City's cable channel, RPVTV, including
rebroadcasts of the City Council and Planning Commission meetings, productions of a wide variety of local
interest programming and offering a Video Bulletin Board featuring local community events.
➢ Continued to work with a consultant to pursue promising grant opportunities for a variety of City projects,
including public infrastructure and parks and open space. As of June 30, 2011, the City had received a total
of $731,000 in competitive grant awards.
➢ The City Council reviewed the benefits and detriments of becoming a Charter City and agreed to place the
issue of adopting a charter on the March 8, 2011, ballot in September 2010.
➢ Conducted an Emergency Preparedness Drill in October 2010 in conjunction with the statewide "Great
California Shake Out" and adopted the Standardized Emergency Management System (SEMS)/National
Incident Management System (NIMS) Multi -Hazard Functional Emergency Operations Plan in November
2010.
➢ Hosted a Community Leaders' Breakfast in January 2011 to present information regarding the proposed
adoption of a City Charter on the March 8, 2011 ballot.
➢ Held the inaugural session of the Rancho Palos Verdes Leadership Academy in February 2011, followed by
seven (7) more monthly sessions lasting until September 2011.
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➢ For the proposed relocation of the staging of the Palos Verdes Marathon to the Terranea Resort on May 14,
2011, the City Council approved a Special Use Permit for the event in February 2011.
➢ Members of the City Council and Staff participated in the grand opening of the Mirandela senior affordable
apartment project in March 2011, which had been funded in part by the City's Redevelopment Agency.
➢ Successfully fulfilled the objectives of the City Council -initiated Performance -Based Employee Compensation
Plan by producing service enhancements, new revenue and cost savings totaling more than $550,000 by
May 2011.
➢ The City extended its contract with a federal advocacy firm to seek federal funding for the San Ramon
Canyon Stabilization Project in June 2011.
➢ Led a regional response to the FAA proposal to change the classification of airspace — with likely threats to
safety and the environment. Staff also addressed issues with Torrance Airport helicopter routes and actively
participated in the LAX Noise Roundtable to ensure protection of our residents.
➢ Studied and recommended the withdrawal from MAX Transit, which will save more than $100,000 per year of
Proposition A funding for more optimal transit programs.
➢ Initiated the re -bidding of Employee Medical Insurance, thereby securing 2-4 year rate guarantees and
reducing overall costs by $22,273 for the next two years.
FINANCIAL INFORMATION
Internal Control. The Finance and Information Technology department of the City is responsible for establishing and
maintaining an appropriate internal control structure. The internal control system is designed to ensure that the
assets of the City are protected from loss, theft, or misuse and to ensure that adequate accounting data is compiled
to allow for the preparation of financial statements in conformity with Generally Accepted Accounting Principles. The
internal control structure is designed to provide reasonable, but not absolute, assurance that these objectives are
met. The concept of reasonable assurance recognizes that: (1) the cost of a control should not exceed the benefits
likely to be derived; and (2) the valuation of costs and benefits requires estimates and judgements by management.
Budgeting Controls. The City of Rancho Palos Verdes maintains budgetary controls. The objective of these
budgetary controls is to ensure compliance with legal provisions contained in the annual appropriated budgets
approved by the City Council, Redevelopment Agency Board, and Improvement Authority Commission. Activities of
the General fund, Special Revenue funds, Capital Projects funds, Debt Service fund and Permanent funds are
included in the annual appropriated budgets of the government units. The level of budgetary control (that is, the level
at which expenditures cannot legally exceed the appropriated amount) is established at the department/function level
within each fund. Formal budgetary integration is employed as a management control device. The City also
maintains an encumbrance accounting system as one method of maintaining budgetary control. These encumbrances
lapse at year-end, and any unexpended balance is eligible to be carried over to the following year's budget
appropriations with City Council approval.
Budget to Actual Comparison. The City experienced an overall $2.3 million favorable budget variance in the General
fund for the fiscal year ended June 30, 2011. Favorable expenditure variances, including a retroactive adjustment for
general liability insurance and various maintenance savings, were the drivers of the overall favorable variance. Many
of the favorable expenditure variances were permanent savings resulting from conservative budget practices and the
continued careful management of resources during fiscal year 2010-11.
Significant Financial Events. As part of its development agreement, the Trump National Golf Course transferred
ownership of Marilyn Ryan Sunset Park and Trump Beach to the City in May 2011. These two parcels total about 26
acres, with an estimated value of more than $1.2 million. This transaction has been included in the Statement of Net
Assets and the Statement of Activities in the Financial Section of this report. In addition, the City implemented
Government Accounting Standards Board Statement No. 54, which resulted in closing 3 funds that no longer meet the
definition of a Special Revenue fund and transferring fund balances totaling about $0.3 million to the General Fund.
There were no other changes to financial policies that resulted in a significant impact on the June 30, 2011 financial
statements.
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OTHER INFORMATION
Independent Audit. The City requires an annual audit by independent certified public accountants. The accounting
firm of White Nelson Diehl Evans LLP conducted this year's audit. The auditors' report on the government -wide
financial statements and combining and individual fund statements and schedules is included in the financial section
of this report.
Single Audit. As a recipient of federal, state, and county financial assistance, the City is responsible for ensuring that
an adequate internal control structure is in place to ensure compliance with applicable laws and regulations related to
those programs. This internal control structure is subject to periodic evaluation by management. In years when over
$500,000 is expended on Federal financial assistance programs, the City is required to undergo an annual single
audit in conformity with the provisions of the Single Audit Act of 1984 and U.S. Office of Management and Budget
Circular A-133, Audits of States, Local Governments, and Non -Profit Organizations. For the year ended June 30,
2011, $302,296 was expended on Federal financial assistance programs; and therefore a Single Audit is not required.
GFOA Certificate of Achievement Award. The Government Finance Officer's Association of the United States and
Canada (GFOA) oversees a prestigious national award program to recognize conformance with the highest
standards of report preparation. In order to be awarded a Certificate of Achievement, a government unit must publish
an easily readable and efficiently organized CAFR. This report must satisfy both Generally Accepted Accounting
Principles and applicable legal requirements.
The GFOA awarded a Certificate of Achievement for Excellence in Financial Reporting to the City of Rancho Palos
Verdes for its CAFR for the fiscal year ended June 30, 2010. This was the 18th consecutive year that the City of
Rancho Palos Verdes has achieved this prestigious award. A copy of the GFOA Certificate of Achievement is
included later in the introductory section of this year's CAFR. A Certificate of Achievement is valid for a period of one
year only. We believe our current CAFR continues to meet the Certificate of Achievement Program's requirements
and we are submitting it to the GFOA to determine its eligibility for another certificate.
Acknowledgments. Completion of this report was the accomplishment by combined efforts of many individuals,
especially Linda Gan-Vanderlinde, Senior Accountant, and Kathryn Downs, Deputy Director of Finance and
Information Technology, who coordinated preparation of the report. I wish to acknowledge the assistance of our
auditors, Diehl, Evans & Company, LLP and the contributions of other Finance and Information Technology
Department staff: Jane Lin, Selena Wright, Gayle Vanoverbeck, Nancy Vitez, and Jayne Mahtani.
I would also like to recognize the City Council for their continued leadership directing the City to achieve a sound
fiscal position over the last several years. We look forward to maintaining this success in the future under the
leadership of the City Council.
Respectfully submitted,
Dennis McLean
Director of Finance & Information Technology
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CITY OF RANCHO PALOS VERDES
DIRECTORY OF CITY OFFICIALS
JUNE 30, 2011
CITY COUNCIL
Thomas D. Long, Mayor
Anthony M. Misetich, Mayor Pro -Tem
Brian Campbell, Councilman
Douglas W. Stern, Councilman
Stefan Wolowicz, Councilman
ADMINISTRATION AND DEPARTMENT HEADS
City Manager Carolyn Lehr
Deputy City Manager Carolynn Petru
City Clerk Carla Morreale
Director of Finance and Information Technology Dennis McLean
Community Development Director Joel Rojas
Interim Director of Public Works Ray Holland
Interim Director of Recreation and Parks Tom Odom
City Attorney Richards, Watson & Gershon
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CITY OF RANCHO PALOS VERDES
ORGANIZATIONAL CHART
CITIZENS OF
RANCHO PALOS VERDES
MAYOR AND CITY COUNCIL
COMMISSIONS & COMMITTEES
Planning Commission
Traffic Safety Commission
Finance Advisory Committee
CITY MANAGER
Administration
Personnel/Community Outreach
Risk Management
CITY CLERK
Records Management
Public Information
Elections
RECREATION & PARKS
Park Facilities Staffing
Point Vicente Interpretive Center
Special Events
REACH Program
PUBLIC SAFETY
L.A. County Sheriff
L.A. County Fire
Animal Control
Emergency Preparedness
FINANCE & INFORMATION
TECHNOLOGY
Financial Reporting & Budget
Accounts Payable/Receivable
Payroll
Purchasing
Information Technology
COMMUNITY DEVELOPMENT
Planning/Zoning
Building & Safety/Geology
Code Enforcement
View Restoration
PUBLIC WORKS
Street Maintenance
Refuse/City Engineering
Park/Building Maintenance
Capital Projects
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COMMISSIONS & COMMITTEES
Emergency Preparedness Committee
Oversight Committee for the Water Quality & Flood
Protection Program
CITY ATTORNEY
Richards, Watson & Gershon
Certificate of
Achievement
for Excellence
in Financial
Reporting
Presented to
City of Rancho Palos Verdes
California
For its Comprehensive Annual
Financial Report
for the Fiscal Year Ended
June 30, 2010
A Certificate of Achievement for Excellence in Financial
Reporting is presented by the Government Finance Officers
Association of the United States and Canada to
government units and public employee retirement
systems whose comprehensive annual fmancial
reports (CAFRs) achieve the highest
standards in government accounting
and financial reporting.
Executive Director
xii
FINANCIAL SECTION
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Gray Whale Skeleton Installation
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WHITE_ NELSON L IE -IL S LLP
Certified Public Accountants sulxants
INDEPENDENT AUDITORS' REPORT
The Honorable Mayor and
Members of City Council
City of Rancho Palos Verdes
Rancho Palos Verdes, California
We have audited the accompanying financial statements of the governmental activities, the
business -type activity, each major fund, and the aggregate remaining fund information of the City of
Rancho Palos Verdes, California, as of and for the year ended June 30, 2011, which collectively
comprise the City's basic financial statements as listed in the table of contents. These financial
statements are the responsibility of the City of Rancho Palos Verdes's management. Our responsibility
is to express opinions on these financial statements based on our audit.
We conducted our audit in accordance with auditing standards generally accepted in the United States
of America and the standards applicable to financial audits contained in Government Auditing
Standards issued by the Comptroller General of the United States. Those standards require that we
plan and perform the audit to obtain reasonable assurance about whether the financial statements are
free of material misstatement. An audit includes consideration of internal control over financial
reporting as a basis for designing 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 over financial
reporting. Accordingly, we express no such opinion. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that our audit provides a
reasonable basis for our opinions.
In our opinion, the financial statements referred to above present fairly, in all material respects, the
respective financial position of the governmental activities, the business -type activity, each major fund,
and the aggregate remaining fund information of the City of Rancho Palos Verdes, California, as of
June 30, 2011, and the respective changes in financial position and cash flows, where applicable,
thereof and the respective budgetary comparisons for the General, Street Maintenance Special Revenue
and Redevelopment Agency Housing Set -Aside Special Revenue major governmental funds for the
year then ended in conformity with accounting principles generally accepted in the United States of
America.
As explained in Note 6, the City has implemented the provisions of Governmental Accounting and
Standards Board Statement Number 54, "Fund Balance Reporting and Governmental Fund Type
Definitions", for the year ended June 30, 2011.
2875 Michelle Drive, Suite 300, Irvine, CA 92606 • Tel: 714.978.1300 • Fax: 714.978.7893
Offices located in Orange3and San Diego Counties
As explained further in Note 9, the California State Legislature has enacted legislation that is intended
to provide for the dissolution of redevelopment agencies in the State of California. The effects of this
legislation are uncertain pending the result of certain lawsuits that have been initiated to challenge the
constitutionality of this legislation.
In accordance with Government Auditing Standards, we have also issued our report dated
December 21, 2011, on our consideration of the City of Rancho Palos Verdes's internal control over
financial reporting and our tests of its compliance with certain provisions of laws, regulations,
contracts and grant agreements and other matters. The purpose of that report is to describe the scope of
our testing of internal control over financial reporting and compliance and the results of that testing,
and not to provide an opinion on the internal control over financial reporting or on compliance. That
report is an integral part of an audit performed in accordance with Government Auditing Standards and
should be considered in assessing the results of our audit.
The management's discussion and analysis, as listed in the table of contents as required supplementary
information, is not a required part of the basic financial statements but is supplementary information
required by the accounting principles generally accepted in the United States of America. This
information is 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 management's discussion and analysis 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 the
audit of the basic financial statements. We do not express an opinion or provide any assurance on the
management's discussion and analysis because the limited procedures do not provide us with sufficient
evidence to express an opinion or provide any assurance.
Our audit was made for the purpose of forming opinions on the financial statements that collectively
comprise the City's basic financial statements as a whole. The combining statements and individual
fund schedules are presented for purposes of additional analysis and are not a required part of the basic
financial statements of the City. 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 financial statements themselves, and other additional procedures
in accordance with auditing standards generally accepted in the United States of America. In our
opinion, the information is fairly stated in all material respects in relation to the basic financial
statements taken as a whole.
Our audit was conducted for the purpose of forming opinions on the basic financial statements of the
City of Rancho Palos Verdes, California as a whole. The introductory section and statistical section
are presented for purposes of additional analysis and are not a required part of the basic financial
statements. 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 them.
Y7.- , ne.e4e4, A�CF,JLr gvtuu,, of p
December 21, 2011
Irvine, California
4
MANAGEMENT'S DISCUSSION & ANALYSIS
5
City Hall Tour
CITY OF RANCHO PALOS VERDES
MANAGEMENT'S DISCUSSION AND ANALYSIS
JUNE 30, 2011
The Management of the City of Rancho Palos Verdes offers readers of the City
of Rancho Palos Verdes' Financial Statements this narrative overview and
analysis of the City's financial activities for the Fiscal Year ended June 30, 2011.
We encourage readers to consider the information presented here in conjunction
with additional information that we have furnished in our Letter of Transmittal,
which can be found on pages iv -ix of this report.
Financial Highlights
➢ The assets of the City of Rancho Palos Verdes exceed its liabilities at the
close of the Fiscal Year ended June 30, 2011, by $168,389,428 (Net
Assets). Of this amount, $38,741,678 (Unrestricted Net Assets) may be
used to meet the City's ongoing obligations to its citizens and creditors.
The remaining amount is invested in capital assets or is otherwise
nonexpendable, and is therefore not available to meet the City's
obligations.
➢ The City's Total Net Assets increased by $4,920,576. There is no trend
for annual increases or decreases of Total Net Assets. Each year's
change is generally related to significant one-time events such as a major
capital acquisition using outside funding. The majority of the FY10-11
increase is attributable to two factors: 1) transient occupancy tax of $2.8
million collected from Terranea Resort was added to the Reserve for
Future Capital Projects instead of being spent during FY10-11; and 2) the
Net Assets included amounts encumbered for capital projects (street and
park improvements) that were not spent during FY10-11, but carried
forward to FY11-12.
➢ As of June 30, 2011, the City's Governmental Funds reported combined
ending Fund Balances of $26,462,324, an increase of $3.3 million. Once
again, there is no trend for annual increases and decreases of
governmental fund balances, and changes are generally attributable to
significant one-time events. As a comparison, the FY09-10 change in
ending fund balance was a small decrease of only about 1%. The FY10-
11 increase is primarily attributable to the $2.8 million of General Fund
revenue (noted above) that was added to the Reserve for Future Capital
Projects.
➢ As of June 30, 2011, unassigned fund balance for the General Fund was
$11,385,761 or 67% of General Fund expenditures. About $9.4 million of
this amount constitutes the City Council's General Fund Reserve (rainy
day fund). Due to the City Council's reserve policy, the unassigned fund
balance has historically been maintained at or above the policy threshold
level of 50% of budgeted General Fund expenditures.
See independent auditors' report.
7
CITY OF RANCHO PALOS VERDES
MANAGEMENT'S DISCUSSION AND ANALYSIS
JUNE 30, 2011
➢ The City's total debt decreased by $1,105,125 (6.9%) during the current
fiscal year. This includes both short-term payables and long-term
liabilities. The decrease was primarily attributable to a $422,701 principal
payment of the Redevelopment Agency's debt to the County and payment
of a $310,000 retention payable held at June 30, 2010 for completion of
the Mirandela senior housing project.
Overview of the Financial Statements
This discussion and analysis is intended to serve as an introduction to the City's
basic financial statements, which are comprised of three components: 1)
Government -Wide Financial Statements; 2) Fund Financial Statements; and 3)
Notes to the Financial Statements. This report also contains other
supplementary information in addition to the basic financial statements
themselves.
Government -Wide Financial Statements. The Government -Wide Financial
Statements are designed to provide readers with a broad overview of the City's
finances, in a manner similar to a private -sector business.
The Statement of Net Assets presents information on all of the City's assets and
liabilities, with the difference between the two reported as Net Assets. Over time,
increases or decreases in net assets may serve as a useful indicator of whether
the financial position of the City of Rancho Palos Verdes is improving or
deteriorating.
The Statement of Activities presents information showing how the government's
net assets changed during the most recent Fiscal Year. All changes in net
assets are reported as soon as the underlying event giving rise to the change
occurs, regardless of the timing of related cash flows. Thus, revenues and
expenses are reported in this statement for some items that will only result in
cash flows in future fiscal periods (e.g. uncollected taxes and earned but unused
vacation leave).
Both the Government -Wide Financial Statements distinguish functions of the City
that are principally supported by taxes and intergovernmental revenues
(governmental activities) from other functions that are intended to recover all or a
significant portion of their costs through user fees and charges (business -type
activities). The governmental activities of the City include general government,
public safety, public works, planning, building and safety, and recreation. The
City's business -type activities include only the Water Quality and Flood
Protection program for renewal and maintenance of the City's storm drain
facilities.
See independent auditors' report.
8
CITY OF RANCHO PALOS VERDES
MANAGEMENT'S DISCUSSION AND ANALYSIS
JUNE 30, 2011
The Government -Wide Financial Statements include not only the City of Rancho
Palos Verdes itself (known as the Primary Government), but also a legally
separate Redevelopment Agency and a legally separate Improvement Authority
for which the City of Rancho Palos Verdes is financially accountable. Financial
information for these Component Units has been included as an integral part of
the primary government.
The Government -Wide Financial Statements can be found on pages 23-25 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 Rancho Palos Verdes, like other State and
local governments, uses fund accounting to ensure and demonstrate compliance
with finance -related legal requirements. All of the Funds of the City can be
divided into three categories: Governmental Funds, Proprietary Funds, and
Fiduciary Funds.
Governmental Funds. Governmental Funds are used to account for essentially
the same functions reported as governmental activities in the Government -Wide
Financial Statements. However, unlike the Government -Wide Financial
Statements, Governmental Fund Financial Statements focus on near-term
inflows and outflows of spendable resources, as well as on balances of
spendable resources available at the end of the Fiscal Year. Such information
may be useful in evaluating a government's near-term financing requirements.
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. The Governmental Balance Sheet and
Governmental Fund Statement of Revenues, Expenditures, and Changes in
Fund Balances provide a reconciliation to facilitate this comparison between
Governmental Funds and governmental activities.
The City of Rancho Palos Verdes maintained 33 individual Governmental Funds
during the Fiscal Year ended June 30, 2011. Information is presented separately
in the Governmental Fund Balance Sheet and in the Governmental Fund
Statement of Revenues, Expenditures, and Changes in Fund Balances for the
General Fund, the Street Maintenance Fund, the RDA Housing Set -Aside Fund,
the Capital Improvements Fund and the RDA Debt -Service Fund, all of which are
considered to be major funds. Data from the other 28 Governmental Funds are
combined into a single, aggregated presentation. Individual fund data for each of
See independent auditors' report.
9
CITY OF RANCHO PALOS VERDES
MANAGEMENT'S DISCUSSION AND ANALYSIS
JUNE 30, 2011
these Other Governmental Funds is provided in the form of combining
statements elsewhere in this report.
The City of Rancho Palos Verdes adopts an annual appropriated budget for each
of its Governmental Funds. A budgetary comparison statement has been
provided for each Governmental Fund to demonstrate compliance with this
budget.
The basic Governmental Fund Financial Statements can be found on pages 28-
38 of this report.
Proprietary Funds. The City of Rancho Palos Verdes maintains two types of
Proprietary Funds. Enterprise Funds are used to report the same functions
presented as business -type activities in the Government -Wide Financial
Statements. The City uses an Enterprise Fund to account for its Water Quality
and Flood Protection Program. 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 its fleet of
vehicles, computer systems, furniture and equipment, Employee Benefits, and
Civic Center building replacement/improvements. Because these services
predominantly benefit the governmental function, they have been included within
governmental activities in the Government -Wide Financial Statements.
Proprietary Fund Financial Statements provide the same type of information as
the Government -Wide Financial Statements, only in more detail. These
statements can be found on pages 39-41 of this report. The Proprietary Fund
Financial Statements provide separate information for the Enterprise Fund and
the Internal Service Funds. The Enterprise Fund is presented as a single major
fund of the City, while the Internal Service Funds are combined and presented as
a single, aggregated presentation in the Statement. Individual fund data for the
Internal Service Funds is provided in the form of combining statements
elsewhere in this report.
Notes to the Financial Statements. The notes provide additional information
that is essential to a full understanding of the data provided in the Government -
Wide and Fund Financial Statements. The notes to the financial statements can
be found on pages 44-75 of this report.
Other information. The combining statements referred to earlier in connection
with Other Governmental Funds and Internal Service Funds are presented
immediately following the Notes to the Financial Statements. Combining and
individual fund statements and schedules can be found on pages 78-124 of this
report.
See independent auditors' report.
10
CITY OF RANCHO PALOS VERDES
MANAGEMENT'S DISCUSSION AND ANALYSIS
JUNE 30, 2011
Government -wide Financial Analysis
As noted earlier, net assets may serve over time as a useful indicator of a
government's financial position. In the case of the City of Rancho Palos Verdes,
assets exceeded liabilities by $168,389,428 at June 30, 2011. By far, the largest
portion of the City's Net Assets (76%) reflects its investment in Capital Assets
(e.g. Land, Infrastructure, Buildings, and Equipment). The City uses these
Capital Assets to provide services to its citizens; consequently, these assets are
not available for future spending.
City of Rancho Palos Verdes Net Assets
An additional portion of the City's Net Assets ($1,750,000 or about 1%)
represents a nonexpendable resource that is subject to external restrictions. The
remaining balance of Unrestricted Net Assets ($35,376,062 or about 23%) may
be used to meet the government's ongoing obligations to its citizens and
creditors.
Governmental Activities. Governmental Activities increased the City's Net
Assets by $4,085,215.
See independent auditors' report.
11
Governmental
Activities
Business -type
Activities
Total
June 30, 2011
June 30, 2010
June 30, 2011
June 30, 2010
June 30, 2011
June 30, 2010
Current and other assets
$ 51,956,043
$ 48,704,202
$ 3,497,659
$ 2,942,185
$ 55,453,702
$ 51,646,387
Capital assets
115,145,081
115,331,309
12,752,669
12,458,305
127,897,750
127,789,614
Total assets
167,101,124
164,035,511
16,250,328
15,400,490
183,351,452
179,436,001
Long-term liabilities outstanding
6,296,201
6,680,786
-
-
6,296,201
6,680,786
Other liabilities
8,533,780
9,168,799
132,043
117,564
8,665,823
9,286,363
Total liabilities
14,829,981
15,849,585
132,043
117,564
14,962,024
15,967,149
Invested in capital assets
115,145,081
115,331,309
12,752,669
12,458,305
127,897,751
127,789,614
Restricted
1,750,000
1,000,000
-
-
1,750,000
1,000,000
Unrestricted
35,376,062
31,854,617
3,365,616
2,824,621
38,741,677
34,679,238
Total net assets
$ 152,271,143
$ 148,185,926
$ 16,118,285
$ 15,282,926
$ 168,389,428
$ 163,468,852
An additional portion of the City's Net Assets ($1,750,000 or about 1%)
represents a nonexpendable resource that is subject to external restrictions. The
remaining balance of Unrestricted Net Assets ($35,376,062 or about 23%) may
be used to meet the government's ongoing obligations to its citizens and
creditors.
Governmental Activities. Governmental Activities increased the City's Net
Assets by $4,085,215.
See independent auditors' report.
11
Governmental Business -type
Activities Activities Total
June 30, 2011 June 30, 2010 June 30, 2011 June 30, 201( June 30, 2011 June 30, 2010
4,085,215 8,042,141 835,359 697,898 4,920,571 8,740,039
148,185, 926 140,143, 785 15, 282, 926 14, 585, 028 163, 468, 85 154, 728, 812
$ 152,271,141 $ 148,185,926, $ 16,118,285 $ 15,282,926 $ 168,389,42611 $ 163,468,8521
CITY OF RANCHO PALOS VERDES
MANAGEMENT'S DISCUSSION AND ANALYSIS
JUNE 30, 2011
City of Rancho Palos Verdes Changes in Net Assets
Program revenues:
Charges for services $ 3,707,267 $ 4,925,684 $ - $ - $ 3,707,26 $ 4,925,684
Operating contributions and grants 3,688,739 6,633,280 - - 3,688,73 6,633,280
Capital contributions and grants 5,675 7,178,874 - - 5,675 7,178,874
General revenues:
Property taxes 11,854,171 11,431,192 - - 11,854,171 11,431,192
Other taxes 9,234,107 8,019,118 - - 9,234,10 8,019,118
Other 588,959 513,698 1,324,883 1,277,747 1,913,84 1,791,445
Total revenues 29,078,916 38,701,846 1,324,883 1,277,747 30,403,801 39,979,593
Expenses:
Administration 5,996,735 7,823,738 - - 5,996,734 7,823,738
Public safety 4,334,961 4,242,085 - - 4,334,961 4,242,085
Public works 10,389,064 13,633,475 - - 10,389,064 13,633,475
Parks and recreation 1,390,604 1,826,200 - - 1,390,604 1,826,200
Community development 2,622,293 2,549,490 - - 2,622,293 2,549,490
Non -departmental - 320,000 - 320,000
Interest on long-term debt 260,045 264,717 - - 260,045 264,717
Water Quality Flood Protection - - 489,524 579,849 489,524 579,849
Total expenses 24,993,703 30,659,705 489,524 579,849 25,483,22' 31,239,554
Increase in net assets before transfers 4,085,215 8,042,141 835,359 697,898 4,920,57 8,740,039
Transfers
Increase in net assets
Net assets - beginning of fiscal year
Net assets - end of fiscal year
A key element of this increase included $2.8 million of revenue from the
operating budget that was not spent for FY10-11 programs, but set aside for
future capital projects. The remainder of the increase was primarily attributable
to amounts encumbered for capital projects (street improvements and park
improvements) that were not spent during FY10-11, but were carried forward to
FY11-12.
Revenues by Source — Governmental Activities
charges for
other services operating
2% 13% contributions
otheraxes
32% I i. and grants
13%
See independent auditors' report.
12
property taxes
40%
capital
contributions
and grants
0%
CITY OF RANCHO PALOS VERDES
MANAGEMENT'S DISCUSSION AND ANALYSIS
JUNE 30, 2011
Business -Type Activities. Business -type activities increased the City's net
assets by $835,359 primarily due to collection of storm drain user fees that will
be utilized during FY11-12 for projects continued from FY10-11.
Financial Analysis of Governmental Funds
As of the end of the current Fiscal Year, the City's Governmental Funds reported
combined ending Fund Balances of $26,462,324, an increase of $3.3 million in
comparison with the prior year. Approximately 56% of the combined ending
Fund Balances (about $14.8 million) constitutes spendable fund balance. The
combined spendable fund balance includes the RDA Debt Service negative
unassigned fund deficit of $17,950,999. The remainder of the combined ending
Fund Balances is either nonspendable due to outside legal restrictions ($1.75
million), or nonspendable in form (primarily for long-term principal advances to
other funds of $8.4 million, and prepaid items of $1.4 million).
The General Fund is the chief operating fund of the City of Rancho Palos Verdes.
At the end of the current fiscal year, the unassigned fund balance of the General
Fund was $11,385,761, while total Fund Balance reached $18,900,262. 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 uses
(expenditures and transfers out). Unassigned Fund Balance represents 49% of
total General Fund uses, while total Fund Balance represents 81% of that same
amount.
During Fiscal Year 10-11, the fund balance of the City's General Fund decreased
by $472,779. Although there were favorable budget variances totaling $2.2
million, there were also budgeted one-time uses of the General Fund balance for
improvements to Lower Hesse and Grandview Parks ($2 million) and the ball
fields at Ryan and Hesse Parks ($0.5 million). The most notable General Fund
favorable variances included: a retrospective general liability insurance
adjustment in the City Manager's program; park and building maintenance
program savings due to conservative budget practices; and transfers of cash to
the General Fund from closing the Utility Undergrounding and Roadway
Beautification Funds. The funds no longer meet the definition of a special
revenue fund per Government Accounting Standards Board Statement No. 54.
The remaining expenditure savings was comprised of insignificant amounts
(0.5% or less) spread among a large number of the General Fund's 30 budget
programs.
The Street Maintenance Fund Balance increased by $139,127, primarily due to
permanent expenditure savings. However, the Street Maintenance fund balance
continues to hold about $53,000 that will likely be transferred to the Capital
Improvement Projects fund during FY11-12 for the City's contribution to the
See independent auditors' report.
13
CITY OF RANCHO PALOS VERDES
MANAGEMENT'S DISCUSSION AND ANALYSIS
JUNE 30, 2011
Hawthorne Boulevard pedestrian improvements project primarily funded with a
grant.
The Redevelopment Agency's Housing Set -Aside Fund Balance increased by
$402,707. The majority of the increase was directly related to the sale of a
condominium in March 2011 that was previously held for affordable housing
purposes.
The Debt Service Fund has a net negative fund balance of $17,950,999. The
Redevelopment Agency's debt to the City is recorded in the Debt Service Fund.
However, because there are currently no assets to extinguish that debt, the fund
carries a negative fund balance. The net decrease in the Debt Service Fund
Balance during the current year was $694,785, which primarily represents
interest accrued during FY10-11 on the advance from the City to the
Redevelopment Agency.
The Capital Improvement Projects (CIP) Fund had an ending fund balance of
$11,649,780. Of this amount, $3.9 million is held for street improvement projects
continued from FY10-11 to FY11-12, $2.4 million is held for park improvement
projects continued from FY10-11 to FY11-12, and the remaining $5.3 million is
held in reserve for emergency projects and future projects as directed by City
Council policy.
Financial Analysis of Proprietary Funds
The City's Proprietary Funds provide the same type of information found in the
Government -Wide Financial Statements, but in more detail. Unrestricted Net
Assets of the Enterprise Fund at the end of the year amounted to $3,365,616.
Unrestricted Net Assets of the Internal Service Funds at the end of the year
amounted to $4,042,702. The total growth in Proprietary Fund type net assets
was $363,986 or 5% of unrestricted Net Assets.
General Fund Budgetary Highlights
The difference between original budgeted expenditures and the final amended
budget was an increase of $881,149; and is briefly summarized as follows:
➢ A decrease of $629,431 was attributable to appropriations continued to
FY11-12.
➢ An increase of $1,462,450 was attributable to appropriations continued
from FY09-10.
➢ Other immaterial adjustments resulted in net increases of approximately
$48,000.
See independent auditors' report.
14
CITY OF RANCHO PALOS VERDES
MANAGEMENT'S DISCUSSION AND ANALYSIS
JUNE 30, 2011
Capital Asset and Debt Administration
Capital Assets. The City's investment in Capital Assets for its governmental
activities as of June 30, 2011, amounts to $115,145,081 (net of accumulated
depreciation). This investment in capital assets includes land, buildings, park
improvements, roadways, sewer, storm drains, vehicles, computer equipment,
furniture, other equipment, and construction in progress. During the current fiscal
year, the City's investment in governmental capital assets decreased by about
$186,000 or about 0.16%.
Major capital asset events during the current Fiscal Year included the following:
➢ Depreciation of $3.5 million was recorded for the City's Capital Assets.
➢ A residential street repaving project was completed with a total cost of
about $1.5 million.
➢ Parkland adjacent to Trump National Golf Course was dedicated to the
City with an estimated value of about $1.2 million.
The Capital Assets (net of accumulated depreciation) for Business -type activities
as of June 30, 2011 was $12,752,669.
City of Rancho Palos Verdes Capital Assets
(net of depreciation)
Capital assets not being depreciated
Land
Construction in progress
Total capital assets not being depreciated
Gove nmental
Activities
Business -type
Activities
Total
June 30, 2011 June 30, 201C
June 30, 201 June 30, 201
0 June 30, 2011 June 30, 201C
$ 40,048,28E
628,308
40,676,59E
$ 38,808,55 $ 1,408,49 $ 1,408,49 $ 41,456,781 $ 40,217,04E
66,290 678,980 149,081 1,307,28 215,371
38,874,84 2,087,47 1,557,57 42,764,06 40,432,41
Capital assets being depreciated, net
Buildings
Vehicles
Computer equipment
Furniture, fixtures and equipment
Infrastructure
7,156,29E' 7,756,992
94,656 92,942
35,181 62,538
123,861 107,867
1,181
7,156,29E 7,756,992
94,656 92,942
35,182 62,538
3,543 125,042 111,410
Sewer system 8,447,475
8,902,584
- - 8,447,475
8,902,584
Storm drain system 10,180,94
10,431,42C
10,664,01; 10,897,181' 20,844,95E
21,328,60E
Park system 2,125,87E
2,038,78E
- - 2,125,87E
2,038,788
Total capital assets being depreciated, net
74,468,485
76,456,46E
10,665,19E
10,900,73'
85,133,682
87,357,197
Capital Assets, net
$ 115,145,08'
$ 115,331,309
$ 12,752,66£
$ 12,458,305
$ 127,897,75'
$ 127,789,612
Additional information on the City's Capital Assets can be found in Note # 4 on
pages 56-58 of this report.
See independent auditors' report.
15
CITY OF RANCHO PALOS VERDES
MANAGEMENT'S DISCUSSION AND ANALYSIS
JUNE 30, 2011
Long-term debt. At the end of the current Fiscal Year, the City of Rancho Palos
Verdes had total debt outstanding of $6,296,201. Of this amount, $5,963,601 is
a liability of the Redevelopment Agency.
City of Rancho Palos Verdes Outstanding Debt
Governmental
Activitie s
June 30, 2011 1 June 30, 2010
RDA Tax Increment Bond $ 5,165,000 $ 5,250,000
RDA Deferred Interest Payable 798,601 1,136,303
Employee compensated absences 332,600 294,483
Total 1 $ 6,296,201 1 $ 6,680,786
The City's total debt decreased by $384,585 (5.8%) during the current Fiscal
Year, primarily due to partial payment of the RDA deferred interest payable.
State statutes limit the amount of general obligation debt a governmental entity
may issue to 15 percent of its total assessed valuation. The current debt
limitation for the City of Rancho Palos Verdes is $1,382,850,000. Additional
information on the City's long-term debt can be found in Note # 5 on pages 58-61
of this report.
Economic Factors and Next Year's Budgets and Rates
➢ Local property values remain strong; therefore, Property Tax Revenue
(approximately 43 percent of City -Wide Revenues) remains largely
unaffected by the downturn in the economy. Looking forward to FY11-12,
Los Angeles County saw an overall increase in property assessments of
about 1.3%, while the City of Rancho Palos Verdes experienced an overall
increase in property assessments of 2.7%.
➢ At the time of this report, there is no significant impact to the City's FY11-
12 revenue as a result of the State's ongoing budget crisis. Staff
continues to monitor state impacts closely, and will report to City Council if
the state takes any actions that necessitate City adjustment.
➢ The Consumer Price Index for Los Angeles County increased by 2.9% for
the 12 months ended June 2011; however, the City's FY11-12 expenditure
budget was limited to an increase of about $96,000 (or 0.5%) when
compared to FY10-11. Revenue in excess of budgeted expenditures
(about $3.7 million) has been programmed for maintenance and
improvement of infrastructure (primarily street improvement projects).
See independent auditors' report.
16
CITY OF RANCHO PALOS VERDES
MANAGEMENT'S DISCUSSION AND ANALYSIS
JUNE 30, 2011
Requests for Information
This Financial Report is designed to provide a general overview of the financial
position of the City of Rancho Palos Verdes for all those with an interest in the
government's finances. Questions concerning any of the information provided in
this report, or requests for additional financial information, should be addressed
to the Finance and Information Technology Department at 30940 Hawthorne
Boulevard, Rancho Palos Verdes, CA 90275 or finance ac rbv.com.
See independent auditors' report.
17
Palos Verdes Marathon
18
BASIC FINANCIAL STATEMENTS
19
Fourth of July Puppet Show
GOVERNMENT -WIDE STATEMENTS
21
Rancho Palos Verdes Coastline
22
CITY OF RANCHO PALOS VERDES
STATEMENT OF NET ASSETS
June 30, 2011
Governmental Business -type
Activities Activity Total
ASSETS:
Cash and investments $ 40,633,615 $ 3,432,022 $ 44,065,637
Receivables:
Taxes 1,180,020 1,180,020
hnterest 38,059 3,378 41,437
Notes 7,599,483 - 7,599,483
Other 789,947 62,259 852,206
Inventory 41,168 41,168
Prepaid costs 1,673,750 1,673,750
Capital assets, not being depreciated:
Land 40,048,288 1,408,493 41,456,781
Construction in progress 628,308 678,980 1,307,288
Capital assets, being depreciated, net:
Property and equipment 253,699 1,181 254,880
Buildings and improvements 7,156,296 - 7,156,296
hifrastructure 67,058,491 10,664,015 77,722,506
TOTAL ASSETS 167,101,124 16,250,328 183,351,452
LIABILITIES:
Accounts payable and accrued liabilities 3,385,699 131,233 3,516,932
Interest payable 20,086 - 20,086
Retentions payable 194,335 810 195,145
Unearned revenue 4,047,642 4,047,642
Deposits payable 886,017 886,017
Long-term liabilities:
Due within one year 341,878 341,878
Due beyond one year 5,954,324 5,954,324
TOTAL LIABILITIES 14,829,981 132,043 14,962,024
NET ASSETS:
Invested in capital assets, net of related debt 115,145,082 12,752,669 127,897,751
Restricted for:
Community development:
Nonexpendable 1,750,000 1,750,000
Unrestricted 35,376,061 3,365,616 38,741,677
TOTAL NET ASSETS $ 152,271,143 $ 16,118,285 $ 168,389,428
See independent auditors' report and notes to financial statements.
CITY OF RANCHO PALOS VERDES
STATEMENT OF ACTIVITIES
For the year ended June 30, 2011
Program Revenues
Operating Capital
Charges for Grants and Grants and
Functions/programs Expenses Services Contributions Contributions
Governmental Activities:
Administration
Public safety
Public works
Parks and recreation
Conununity development
Non -departmental
Interest on long-term debt
$ 5,996,734 $ 654,051 $ 84,220 $
4,334,961 260,543 110,202
10,389,064 621,607 3,325,193 5,675
1,390,604 456,940 28,597
2,622,293 1,714,126 140,527
260,045 - -
Total govemmental activities 24,993,701 3,707,267 3,688,739 5,675
Business -type Activity:
489,524 - -
Water Protection Flood Control
Total Primary Government $ 25,483,225 $ 3,707,267 $ 3,688,739 $ 5,675
General revenues:
Taxes:
Property tax, levied for general purpose
Property tax, Redevelopment Agency
tax increment
Storm Drain user fees levied for water quality
and flood protection
Transient occupancy tax
Sales tax
Franchise tax
Motor vehicle in lieu tax (unrestricted)
Utility user tax
Other taxes
Investment income
Unrestricted grants, contributions and other revenues
Total general revenues and transfers
Change in net assets
Net assets - beginning of year
Net assets - end of year
See independent auditors' report and notes to financial statements.
24
Net (Expense) Revenue and
Changes in Net Assets
Govermnental Business -type
Activities Activity
Total
$ (5,258,463) $ - $ (5,258,463)
(3,964,216) - (3,964,216)
(6,436,589) - (6,436,589)
(905,067) - (905,067)
(767,640) - (767,640)
(260,045) - (260,045)
(17,592,020) - (17,592,020)
- (489,524) (489,524)
(17,592,020) (489,524) (18,081,544)
10,732,334 - 10,732,334
1,121,837 - 1,121,837
- 1,312,230 1,312,230
2,640,369 - 2,640,369
1,548,007 - 1,548,007
1,824,892 - 1,824,892
220,790 - 220,790
2,406,831 - 2,406,831
593,218 - 593,218
317,693 12,653 330,346
271,266 - 271,266
21,677,237 1,324,883 23,002,120
4,085,217 835,359 4,920,576
148,185,926 15,282,926 163,468,852
$ 152,271,143 $ 16,118,285 $ 168,389,428
25
Halloween Pumpkin Race
26
FUND FINANCIAL STATEMENTS
27
CITY OF RANCHO PALOS VERDES
BALANCE SHEET - GOVERNMENTAL FUNDS
June 30, 2011
ASSETS
Cash and investments
Receivables:
Taxes
Interest
Notes
Other
Due from other funds
Inventory
Prepaid items
Advances to other funds
TOTAL ASSETS
LIABILITIES AND FUND BALANCES
LIABILITIES:
Accounts payable and accrued liabilities
Due to other funds
Retentions payable
Deferred revenue
Advances from other funds
Deposits payable
TOTAL LIABILITIES
FUND BALANCES (DEFICIT):
Non -Spendable
Endowment principal
Reimbursement settlement agreemen
Prepaid items
Advances to other funds
Long term receivables
Habitat restoration
Inventory
Restricted
Committed
Assigned
Unassigned
TOTAL FUND BALANCES (DEFICIT)
TOTAL LIABILITIES AND FUND BALANCES
See independent auditors' report and notes to financial statements
28
General
Special
Revenue
Street
Maintenance
$ 13,010,103 $ 1,057,031
1,000,398
15,168
479,207
138,658
41,168
820,474
18,568,186
$ 34,073,362
$ 2,067,207
6,064
12,213,812
886,017
15,173,100
820,474
6,652,859
41,168
11,385,761
18,900,262
129,668
198
2,981
$ 1,189,878
$ 273,140
1,593
274,733
915,145
915,145
$ 34,073,362 $ 1,189,878
Special
Revenue
RDA Housing
Set -Aside
$ 589,736
14,659
6,640,825
$ 7,245,222
$ 611
3,593,773
1,823,420
5,417,804
2,990,000
(1,162,582)
1,827,418
Debt
Service
Redevelopment
Agency
$ 44,646
573,216
$ 617,862
$ 675
18,568,186
18,568,861
573,216
(18,524,215)
(17,950,999)
$ 7,245,222 $ 617,862
Capital
Projects
Capital
Improvements
Other Total
Governmental Governmental
Funds Funds
$ 12,390,613 $ 9,494,691 $ 36,586,820
9,552
3,281
$ 12,403,446
$ 565,963
186,678
1,025
753,666
11,649,780
11,649,780
$ 12,403,446 $ 12,388,190 $ 67,917,960
35,295 1,180,020
8,626 33,546
703,704 7,344,529
304,478 789,947
138,658
41,168
17,976 1,411,666
1,823,420 20,391,606
$ 12,388,190 $ 67,917,960
207,416 $ 3,115,012
138,658 138,658
194,335
921,398 16,730,008
20,391,606
886,017
1,267,472 41,455,636
750,000 750,000
1,000,000 1,000,000
17,976 1,411,666
1,766,367 8,419,226
2,990,000
43,741 y 43,741
41,168
7,669,030 8,584,175
11,649,780
(126,396) (8,427,432)
11,120,718 26,462,324
Volunteer Docent Appreciation Lunch
30
CITY OF RANCHO PALOS VERDES
RECONCILIATION OF THE GOVERNMENTAL FUNDS
BALANCE SHEET TO THE STATEMENT OF NET ASSETS
June 30, 2011
Fund balances - total governmental funds $ 26,462,324
Amounts reported for governmental activities in the Statement of Net Assets are different because:
Capital assets used in governmental activities are not current financial resources and, therefore,
are not reported in the governmental funds balance sheet. 114,891,385
Interest accrued on the advance receivable in the General Fund is not available as current resouce
and, therefore, is recorded as deferred revenue and added to the balance of the advance. The
Statement of Net Assets reports on the full accrual basis and does not defer currently unavailable
revenues. 11,915,327
Intergovernmental revenues earned, but not available, are deferred in the fund financial statements.
The revenue is not deferred on the Statement of Activities. 191,969
Interest expenditures are recognized when due, and therefore, interest payable is not recorded in
the governmental funds. (20,086)
Long-term notes receivable are not current available resources and, therefore, do not affect the
governmental fund balance. 830,024
Long-term liabilities are not due and payable in the current period and, therefore, are not reported
in the governmental funds. (6,296,201)
Internal service funds are used by management to charge the costs of certain activities, including
equipment and building replacement and employee benefits, to individual funds. The assets
and liabilities of the internal service funds are included in the Statement of Net Assets.
4,296,401
Net assets of governmental activities $ 152,271,143
See independent auditors' report and notes to financial statements.
31
CITY OF RANCHO PALOS VERDES
STATEMENT OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCES - GOVERNMENTAL FUNDS
For the year ended June 30, 2011
Special
Revenue
Street
General Maintenance
REVENUES:
Taxes $ 19,487,539 $
Licenses and permits 1,932,844 -
Fines and forfeitures 209,778
Use of money and property 840,535 19,456
Charges for services 73,119 -
Revenue from other agencies 226,803 1,141,891
Other revenues 151,200
TOTAL REVENUES 22,921,818 1,161,347
EXPENDITURES:
Current:
Administration
Public safety
Public works
Parks and recreation
Conmmnity development
Non -departmental
Capital outlay
Debt service:
Principal
Interest and fiscal charges
5,220,551
4,309,456
3,705,579
1,237,396
2,608,288
1,954,934
TOTAL EXPENDITURES 17,081,270 1,954,934
EXCESS (DEFICIENCY) OF REVENUES
OVER (UNDER) EXPENDITURES 5,840,548 (793,587)
OTHER FINANCING SOURCES (USES):
Sale of capital assets -
Transfers in 651,020 937,133
Transfers out (6,964,348) (4,419)
TOTAL OTHER FINANCING SOURCES (USES) (6,313,328) 932,714
NET CHANGE IN FUND BALANCES (472,779) 139,127
FUND BALANCES (DEFICIT) - BEGINNING OF YEAR 19,373,042 776,018
FUND BALANCES (DEFICIT) - END OF YEAR $ 18,900,263 $ 915,145
See independent auditors' report and notes to financial statements.
32
Special
Revenue
RDA Housing
Set -Aside
$ 224,367
1,151
225,518
172,811
172,811
52,707
350,000
350,000
402,707
1,424,711
$ 1,827,418
Debt
Service
Redevelopment
Agency
$ 897,470
897,470
282,150
422,701
887,404
1,592,255
(694,785)
(694,785)
(17,256,214)
$ (17,950,999)
Capital
Projects
Capital
Improvements
32,483
5,675
38,158
2,385,306
2,385,306
(2,347,148)
6,915,331
6,915,331
4,568,183
7,081,597
$ 11,649,780
Other
Governmental
Funds
$ 809,535
666,449
1,787,703
78,569
3,342,256
25,505
2,215,012
20,000
2,889
171,483
2,434,889
907,367
350,570
(1,885,288)
(1,534,718)
(627,351)
11,748,068
$ 11,120,717
Total
Governmental
Funds
$ 21,418,911
1,932,844
209,778
1,560,074
73,119
3,162,072
229,769
28,586,567
5,502,701
4,334,961
7,875,525
1,257,396
2,783,988
2,556,789
422,701
887,404
25,621,465
2,965,102
350,000
8,854,054
(8,854,055)
349,999
3,315,101
23,147,222
$ 26,462,323
CITY OF RANCHO PALOS VERDES
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, 2011
Net change in fund balances - total governmental hinds
Amounts reported for governmental activities in the Statement of Activities are different because
Governmental funds report capital outlays as expenditures. However, in the Statement of Activities
the cost of those assets is allocated over their estimated useful lives as depreciation expense, o
are allocated to the appropriate functional expense when the cost is below the capitalization threshold
Asset disposals are also not recognized in the governmental funds. This activity reconciled as follows
Cost of assets capitalized
Depreciation expense
$ 3,315,101
3,214,840
(3,391,417)
Unpaid accrued interest income is deferred in the governmental funds since it is not available. Thi
income is accrued in the Statement of Activities. 627,028
hntergovernmental revenues earned, but not available are deferred in the fund financial statements 29,716
hnterest expenditures are recognized when due, and therefore, interest payable is not recorded in th
governmental funds. This amount represents the net change in interest payable 331
hncreases in long-term notes receivable use current financial resources and are included in the expenditure:
of governmental funds. Repayments of long-term notes receivables provide current financial resource
and are included in the revenues of governmental funds. These changes in notes receivable are no
reflected in the revenues or expenses of the Statement of Activities. This amount represents the ne
change in the long-term notes receivable
91,691
Compensated absences expenses reported in the Statement of Activities do not require the use of curren
financial resources and therefore are not reported as expenditures in governmental funds (38,117)
Principal payments on debt are recorded as expenditures in the funds. The expenditure is not recognize(
in the Statement of Activities since it reduces the liability reported on the Statement of Net Assets
Principal payments consisted of the following:
Redevelopment Agency tax increment bone
Redevelopment Agency deferred interest payabh
hnternal service funds are used by management to charge the costs of certain activities, including equipmen
and building replacement and employee benefits, to individual funds. The net revenues/(expenses) of th,
internal service funds (excluding transfers and interest income) are reported with governmental activities
Change in net assets of governmental activities
See independent auditors' report and notes to financial statements
34
85,000
337,701
(186,658)
$ 4,085,216
CITY OF RANCHO PALOS VERDES
STATEMENT OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCE - BUDGET AND ACTUAL
GENERAL FUND
For the year ended June 30, 2011
Budgeted Amounts
Original Final
Actual
Variance with
Final Budget
Positive
(Negative)
REVENUES:
Taxes $ 18,481,517 $ 19,609,517 $ 19,487,539 $ (121,978)
Licenses and permits 2,014,500 2,014,500 1,932,844 (81,656)
Fines and forfeitures 217,000 154,000 209,778 55,778
Use of money and property 611,320 611,320 840,535 229,215
Charges for services 59,100 59,100 73,119 14,019
Revenue from other agencies 215,000 155,000 226,803 71,803
Other revenues 152,200 152,200 151,200 (1,000)
TOTAL REVENUES 21,750,637 22,755,637 22,921,818 166,181
EXPENDITURES:
Administration
City council 95,935 106,135 100,548 5,587
City manager 1,530,867 1,688,767 1,446,586 242,181
City attorney 1,065,000 1,036,685 948,605 88,080
Cormnunity outreach 169,832 180,832 180,358 474
City clerk 279,549 470,549 468,323 2,226
Personnel 207,469 275,784 270,852 4,932
Finance 1,283,570 1,310,882 1,245,015 65,867
Information technology - Data 628,067 508,747 488,257 20,490
Information technology - Voice 92,970 92,970 72,007 20,963
Total Administration 5,353,259 5,671,351 5,220,551 450,800
Public safety
Sheriff 3,994,087 3,994,087 3,989,703 4,384
Special programs 212,545 222,545 139,867 82,678
Animal control 125,250 130,250 64,753 65,497
Emergency preparedness 99,645 134,595 115,133 19,462
Total Public Safety 4,431,527 4,481,477 4,309,456 172,021
Public Works
Public works administration
Traffic management
Storm water quality
Building maintenance
Park/Trail/Open Space maintenance
Sewer maintenance
Total Public Works
1,896,910 1,890,152 1,865,667
277,400 238,400 167,316
149,600 174,600 115,661
599,000 630,000 453,168
1,316,249 1,640,229 1,066,587
61,300 64,925 37,180
4,300,459 4,638,306 3,705,579
35
24,485
71,084
58,939
176,832
573,642
27,745
932,727
CITY OF RANCHO PALOS VERDES
STATEMENT OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCE - BUDGET AND ACTUAL (continued)
GENERAL FUND
For the year ended June 30, 2011
Variance with
Final Budget
Budgeted Amounts Positive
Original Final Actual (Negative)
Parks and Recreation
Recreation administration 371,220 403,220 400,375 2,845
Recreation facilities 441,538 461,538 449,066 12,472
Special events 40,980 40,980 27,776 13,204
PVIC 328,291 328,291 322,890 5,401
REACH 73,790 53,790 37,289 16,501
Total Parks and Recreation 1,255,819 1,287,819 1,237,396 50,423
Community Development
Planning services 1,275,844 1,412,127 1,409,575 2,552
Building & safety 591,509 596,509 569,318 27,191
Code enforcement 191,594 191,594 178,005 13,589
View restoration/preservation 319,276 331,276 329,553 1,723
NCCP - 1,477 1,477 -
Geology 200,000 200,000 120,360 79,640
Total Community Developmeni 2,578,223 2,732,983 2,608,288 124,695
Non -Departmental - - -
TOTAL EXPENDITURES 17,919,287 18,811,936 17,081,270 1,730,666
EXCESS (DEFICIENCY) OF REVENUES
OVER (UNDER) EXPENDITURES 3,831,350 3,943,701 5,840,548 1,896,847
OTHER FINANCING SOURCES (USES):
Transfers in
Transfers out
TOTAL OTHER FINANCING
SOURCES (USES)
289,848 272,641 651,020 378,379
(4,208,947) (7,029,099) (6,964,348) 64,751
(3,919,099) (6,756,458) (6,313,328) 443,130
NET CHANGE IN FUND BALANCE (87,749) (2,812,757) (472,780) 2,339,977
FUND BALANCE - BEGINNING OF YEAR 19,373,042 19,373,042 19,373,042 -
FUND BALANCE - END OF YEAR $ 19,285,293 $ 16,560,285 $ 18,900,262 $ 2,339,977
See independent auditors' report and notes to financial statements
36
CITY OF RANCHO PALOS VERDES
STATEMENT OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCE - BUDGET AND ACTUAL
STREET MAINTENANCE SPECIAL REVENUE FUND
For the year ended June 30, 2011
Variance with
Final Budget
Budgeted Amounts Positive
Original Final Actual (Negative)
REVENUES:
Use of money and property $ 7,420 $ 7,420 $ 19,456 $ 12,036
Charges for services 14,000 14,000 - (14,000)
Revenue from other agencies 1,117,550 1,117,550 1,141,891 24,341
TOTAL REVENUES
1,138,970 1,138,970
1,161,347 22,377
EXPENDITURES:
Public Works
Street landscape maintenance 1,554,274 1,458,614 1,370,724 87,890
Traffic signal maintenance 104,100 104,100 65,596 38,504
Portuguese Bend road maintenance 500,300 520,300 518,614 1,686
TOTAL EXPENDITURES 2,158,674 2,083,014 1,954,934 128,079
EXCESS (DEFICIENCY) OF REVENUES
OVER (UNDER) EXPENDITURES (1,019,704) (944,044) (793,587) 150,456
OTHER FINANCING SOURCES:
Transfers in 973,600 973,600 937,133 (36,467)
Transfers out - (57,080) (4,419) 52,661
TOTAL OTHER FINANCING
SOURCES (USES) 973,600 916,520 932,714 16,194
NET CHANGE IN FUND BALANCE (46,104) (27,524) 139,127 166,650
FUND BALANCE - BEGINNING OF YEAR 776,018 776,018 776,018 -
FUND BALANCE - END OF YEAR $ 729,914 $ 748,494 $ 915,145 $ 166,650
See independent auditors' report and notes to financial statements.
37
CITY OF RANCHO PALOS VERDES
STATEMENT OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCE - BUDGET AND ACTUAL
REDEVELOPMENT AGENCY HOUSING SET-ASIDE SPECIAL REVENUE FUND
For the year ended June 30, 2011
Budgeted Amounts
Original Final
REVENUES:
Taxes $ 222,300
Use of money and property 3,600
TOTAL REVENUES 225,900
EXPENDITURES:
Community Development
Redevelopment 12,500
Capital outlay 266,457
TOTAL EXPENDITURES 278,957
EXCESS (DEFICIENCY) OF REVENUES
OVER (UNDER) EXPENDITURES
OTHER FINANCING SOURCES:
Sale of capital assets
NET CHANGE IN FUND BALANCE
FUND BALANCE - BEGINNING OF YEAR
FUND BALANCE - END OF YEAR
(53,057)
(53,057)
1,424,711
$ 1,371,654
See independent auditors' report and notes to financial statements.
38
$ 222,300
3,600
225,900
12,500
714,896
727,396
(501,496)
(501,496)
1,424, 711
$ 923,215
Variance with
Final Budget
Positive
Actual (Negative)
$ 224,367 $ 2,067
1,151 (2,449)
225,518 (381)
172,811
172,811
52,707
350,000
402,707
1,424, 711
$ 1,827,418
(160,311)
714,896
554,585
554,204
350,000
904,204
$ 904,204
CITY OF RANCHO PALOS VERDES
STATEMENT OF NET ASSETS
PROPRIETARY FUNDS
June 30, 2011
ASSETS
CURRENT ASSETS:
Cash and investments
Receivables:
Interest
Other
Prepaid items
TOTAL CURRENT ASSETS
Business -type Governmental
Activity- Activities -
Water Quality Internal
Flood Protection Service
Enterprise Fund Funds
$ 3,432,022 $ 4,046,795
3,378 4,511
62,259 -
- 262,084
3,497,659 4,313,390
NONCURRENT ASSETS:
Capital assets, not being depreciated:
Land 1,408,493
Construction in progress 678,980 -
Capital assets, being depreciated:
Property and equipment 11,813 1,468,875
Infrastructure 11,338,573 -
Accumulated depreciation (685,190) (1,215,176)
TOTAL NONCURRENT ASSETS 12,752,669 253,699
TOTAL ASSETS 16,250,328 4,567,089
LIABILITIES
CURRENT LIABILITIES:
Accounts payable and accrued liabilities 131,233 270,688
Retentions payable 810 -
TOTAL CURRENT LIABILITIES 132,043 270,688
NET ASSETS
Invested in capital assets 12,752,669 253,699
Unrestricted 3,365,616 4,042,702
TOTAL NET ASSETS $ 16,118,285 $ 4,296,401
See independent auditors' report and notes to financial statements.
CITY OF RANCHO PALOS VERDES
STATEMENT OF REVENUES, EXPENSES AND
CHANGES IN NET ASSETS - PROPRIETARY FUNDS
For the year ended June 30, 2011
Business -type Governmental
Activity- Activities -
Water Quality Internal
Flood Protection Service
Enterprise Fund Funds
OPERATING REVENUES:
Charges for services - $ 1,854,448
OPERATING EXPENSES:
Personnel services 139,557 1,704,755
Materials and supplies 72,964 128,908
Maintenance 41,468 268,191
Depreciation 235,535 121,887
TOTAL OPERATING EXPENSES 489,524 2,223,741
OPERATING LOSS (489,524) (369,293)
NONOPERATING REVENUES:
Other revenues - 166,194
Interest income 12,653 16441
Storm drain user fees 1,312230 -
TOTAL NONOPERATING REVENUES 1,324,883 182,635
CHANGE IN NET ASSETS 835,359 (186,658)
TOTAL NET ASSETS - BEGINNING OF YEAR 15,282,926 4,483,059
TOTAL NET ASSETS - END OF YEAR $ 16,118,285 $ 4,296401
See independent auditors' report and notes to financial statements.
CITY OF RANCHO PALOS VERDES
STATEMENT OF CASH FLOWS
PROPRIETARY FUNDS
For the year ended June 30, 2011
Business -type Governmental
Activity- Activities -
Water Quality Internal
Flood Protection Service
Enterprise Fund Funds
CASH FLOWS FROM OPERATING ACTIVITIES:
Receipts from interfund services provided $ $ 1,854,448
Payments to suppliers (114,432) (485,508)
Payments to employees (139,557) (1,656,215)
NET CASH USED BY OPERATING ACTIVITIES (253,989) (287,275)
CASH FLOWS FROM CAPITAL AND
RELATED FINANCING ACTIVITIES:
Acquisition and construction of capital assets (515,419) (112,239)
CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES:
Receipts from storm drain user fees 1,280,284
Grant received 156,094
NET CASH PROVIDED FROM NON -CAPITAL
FINANCING ACTIVITIES 1,280,284 156,094
CASH FLOWS FROM INVESTING ACTIVITIES:
Interest received on investments 12,480 26,637
NET INCREASE (DECREASE)
IN CASH AND CASH EQUIVALENTS 523,356 (216,784)
CASH AND CASH EQUIVALENTS - BEGINNING OF YEAR 2,908,666 4,263,578
CASH AND CASH EQUIVALENTS - END OF YEAR $ 3,432,022 $ 4,046,794
RECONCILIATION OF OPERATING LOSS TO
NET CASH USED BY OPERATING ACTIVITIES:
Operating loss $ (489,524) $ (369,293)
Adjustments to reconcile operating loss
to net cash used by operating activities:
Depreciation 235,535 121,887
Changes in operating assets and liabilities:
Decrease in prepaid items (140,217)
Increase in accrued liabilities 100,348
NET CASH USED BY OPERATING ACTIVITIES $ (253,989) $ (287,275)
See independent auditors' report and notes to financial statements.
Emergency Preparedness Great Shakeout Drill
42
NOTES TO FINANCIAL STATEMENTS
43
CITY OF RANCHO PALOS VERDES
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2011
NOTE #1- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The accounting policies of the City of Rancho Palos Verdes (the City) conform to
accounting principles generally accepted in the United States of America as
applicable to governments. The Governmental Accounting Standards Board
(GASB) is the accepted standard setting body for governmental accounting and
financial reporting principles. The following is a summary of the significant policies.
A. Reporting Entity
The reporting entity, "City of Rancho Palos Verdes", includes the accounts of the
City, the Rancho Palos Verdes Redevelopment Agency (the RDA), and the Joint
Powers Improvement Authority (the Authority).
The City was incorporated on September 7, 1973, as a General Law City and
operates under a Council/Manager form of government.
The RDA was formed in 1984 pursuant to the State of California Health and Safety
Code Section 33000 entitled "Community Redevelopment Law". Its purpose is to
finance long-term capital improvements designed to eliminate physical and
economic blight in a project area through stabilization of hazardous landslides.
The Authority was formed on September 4, 1990, in accordance with the
provisions of the Reimbursement and Settlement Agreement, dated October 27,
1987, entered into by the City, the RDA, and the County of Los Angeles (the
County) in connection with the Horan Lawsuit. The Agreement requires funds to be
set aside and expended by the Authority to maintain landslide abatement
improvements installed and constructed by the RDA.
The criteria used in determining the scope of the reporting entity are based on the
provisions of GASB Statement 14. The City of Rancho Palos Verdes is the primary
government unit. Component units are those entities which are financially
accountable to the primary government, either because the City appoints a voting
majority of the component unit's Board, or because the component unit will provide
a financial benefit or impose a financial burden on the City. The City has accounted
for both the RDA and the Authority as "blended" component units. Despite being
legally separate entities, the RDA and the Authority are so intertwined with the
City, they are, in substance, part of the City's operations.
Accordingly, the balances and transactions of the RDA are reported as separate
Special Revenue, Debt Service, and Capital Projects Funds. The balances and
transactions of the Authority are reported as separate Permanent and Special
Revenue Funds. The following specific criteria were used in determining that the
RDA and the Authority are "blended" component units:
See independent auditors' report.
44
CITY OF RANCHO PALOS VERDES
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2011
1) The members of the City Council also act as the governing body of both the
RDA and the Authority.
2) The City, the RDA and the Authority are financially interdependent. The City
subsidizes maintenance operations performed by the Authority. The City makes
loans to the RDA for use on redevelopment projects. Available property tax
revenues of the RDA will be used to repay the loans from the City. It is not
anticipated that tax increment revenues may become available to begin repayment
of the loans as early as December 2013.
3) Employees of the City manage both the RDA and the Authority.
Separately issued financial statements for both the RDA and the Authority may be
obtained at the City's administrative offices.
Participation in Public Entity Joint Powers Authority
The City is a member of the Palos Verdes Peninsula Transit Joint Powers Authority
(the Transit Authority). The Transit Authority is comprised of three member cities
and is organized under a Joint Powers Agreement pursuant to the California
Government Code. The purpose of the Authority is to study, implement, and
provide a public transit system within and around the Palos Verdes Peninsula.
These transit services include Palos Verdes Transit, Dial -A -Ride, and a fixed route
shuttle service. Periodic deposits are paid by member Cities and are adjusted
retrospectively to cover costs. Costs are prorated among all participating Cities
based on population.
The City does not have an equity interest in the Transit Authority; therefore, no
amount has been reported in the Statement of Net Assets. However, the City does
have an ongoing financial interest, because the City is able to influence the
operations of the Authority so that the Authority uses its resources on behalf of the
City. Also, an ongoing financial responsibility exists because the Authority is
dependent on continued funding from the City. The condensed financial
information of the Authority has not been reproduced in this report, but is available
upon request from the Authority by emailing pvtransitnpalosverdes.com or mailing
a request to P.O. Box 2656, Palos Verdes Peninsula, CA 90274.
B. Accounting and Reporting Policies
The City has conformed to the pronouncements of the Governmental Accounting
Standards Board (GASB), which are the primary authoritative statements of
accounting principles generally accepted in the United States of America
applicable to State and Local governments.
See independent auditors' report.
45
CITY OF RANCHO PALOS VERDES
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2011
C. Description of Funds
The accounts of the City are organized on the basis of funds, each of which is
considered 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. The following are types
of funds used:
Governmental Fund Types
• General Fund — Used to account for all financial resources except those that are
required to be accounted for in another fund.
• Special Revenue Funds — Used to account for the proceeds of specific revenue
sources that are restricted by law or administrative action for specified purposes.
• Debt Service Fund — The debt service fund of the RDA is used to account for
property tax increment revenue and related interest income. Disbursements from
this fund consist mainly of principal and interest on RDA indebtedness.
• Capital Projects Funds — Used to account for financial resources used for the
construction of specific capital projects.
• Permanent Funds — Used to account for resources legally restricted to the extent
that only earnings, and not principal, may be used for purposes that support the
reporting government's programs.
Proprietary Fund Types
• Enterprise Fund — Used to finance and account for the acquisition, operation, and
maintenance of the City's facilities and services; which are supported primarily by
user charges.
• Internal Service Funds — Used to account for employee benefits costs and
purchases and maintenance of equipment on behalf of all City departments, as
well as the accumulation of funds for replacement of certain buildings on behalf of
the City.
D. Basis of Accounting/Measurement Focus
Government — Wide Financial Statements
The City's Government -Wide Financial Statements include a "Statement of Net
Assets" and a "Statement of Activities". These two statements present summaries
of Governmental Activities for the City.
See independent auditors' report.
46
CITY OF RANCHO PALOS VERDES
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2011
These statements are presented on an "economic resources" measurement focus
and the accrual basis of accounting. Accordingly, all of the City's assets and
liabilities, including capital assets, infrastructure, and long-term debt, are included
in the accompanying Statement of Net Assets. The Statement of Activities
presents changes in net assets. 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 the liability is incurred. The Statement of
Activities demonstrates the degree to which the direct expenses of a given function
are offset by program revenues. Direct expenses are those that are clearly
identifiable with a specific function. Program revenue transactions for the City are
reported in three categories: 1) Charges for Services, 2) Operating Grants and
Contributions, and 3) Capital Grants and Contributions. Charges for Services
include revenues from customers or applicants who purchase, use, or directly
benefit from goods, services, or privileges provided by a given function. Operating
Grants and Contributions include revenues restricted to meeting the requirements
of a particular operating function and may include state shared revenues and
grants. Capital Grants and Contributions include revenues restricted to meeting the
requirements of a particular capital function and may include grants and developer
fees. Taxes and other items not properly included among program revenues are
reported instead as general revenues. As a general rule, the effect of interfund
activity has been eliminated from the Government -Wide Financial Statements.
Governmental Fund Financial Statements
Governmental fund financial statements include a "Balance Sheet — Governmental
Funds" and "Statement of Revenues, Expenditures, and Changes in Fund
Balances — Governmental Funds" for all major and other governmental funds. An
accompanying schedule is presented to reconcile and explain the differences in
fund balances as presented in these statements to the Net Assets presented in the
Government -Wide Financial Statements. The City has presented all major funds
that met qualifications of GASB Statement No. 34. In addition, the City has
presented the Street Maintenance Special Revenue Fund as a major fund because
the City believes the financial position and activities of this fund are significant to
the City as a whole.
All governmental funds are accounted for on a spending or "current financial
resources" measurement focus and the modified accrual basis of accounting. The
Statement of Revenues, Expenditures and Changes in Fund Balances present
increases (revenues and other financing sources) and decreases (expenditures
and other financing uses) in fund balances. Revenues are recognized in the
accounting period in which they become susceptible to accrual, that is, when they
become both measurable and available to finance expenditures of the current
period. "Measurable" means that the amount of the transaction can be determined,
and "available" means collectible within the current period or soon enough
See independent auditors' report.
47
CITY OF RANCHO PALOS VERDES
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2011
thereafter to be used to pay liabilities of the current period. Accrued revenues
include property taxes received within 60 days after year-end, taxpayer -assessed
taxes such as sales taxes, and earnings on investments. Grant funds earned but
not received are recorded as a receivable, and grant funds received before the
revenue recognition criteria have been met are reported as deferred revenues.
Expenditures are recorded when the fund liability is incurred, if measurable, except
for immature interest on general long-term debt, which is recognized when due.
The City reports the following major governmental funds
The General Fund is the City's primary operating fund. It accounts for all financial
resources of the City, except those that are required to be accounted for in another
fund.
The Street Maintenance Special Revenue Fund is used to account for state -shared
highway users tax used for street maintenance, right-of-way acquisition and street
construction.
The Redevelopment Agency Housing Set -Aside Special Revenue Fund is used to
account for the portion of Redevelopment tax increment monies which is a
requirement under California Redevelopment Law, Section 33334, to be set-aside
for the development of low and moderate income housing.
The RDA Debt Service Fund is used to account for the accumulation of resources
and for the payment of principal and interest on the Redevelopment Agency's debt.
The Capital Improvement Capital Projects Fund is used to account for funds used
for the City's capital improvement projects.
Proprietary Fund Financial Statements
Proprietary fund types are accounted for using the "economic resources"
measurement focus and accrual basis of accounting. This means that all assets
and liabilities (whether current or non-current) associated with the activity are
included on the balance sheet. Fund equity is presented as total net assets. The
operating statement of proprietary funds presents increases (revenues) and
decreases (expenses) in total net assets. Revenues are recognized when they are
earned and expenses are recognized when the liability is incurred.
Proprietary funds distinguish operating revenues and expenses from non-operating
items. Operating revenues and expenses generally result from providing services
and producing and delivering goods in connection with a proprietary fund's
principal ongoing operations. The principal operating revenues of the City's
enterprise and internal service funds are charges for services. Operating expenses
See independent auditors' report.
48
CITY OF RANCHO PALOS VERDES
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2011
for the enterprise and internal service funds include the costs of services,
employee benefits, maintenance of capital assets, and depreciation on capital
assets. All revenues and expenses not meeting this definition are reported as non-
operating revenues and expenses.
The City uses the internal service funds to finance and account for goods and
services provided by one City department to other City departments, including the
purchase and maintenance of equipment, replacement of buildings and payment of
employee benefits. The City's internal service funds are presented in the
proprietary funds financial statements. Because the principal users of the internal
services are the City's governmental activities, the financial statements of the
internal service funds are consolidated into the governmental column when
presented in the government -wide financial statements. To the extent possible,
the cost of these services is reported in the appropriate functional activity
(administration, public safety, public works, etc.).
The City reports the following major enterprise fund
The Water Quality Flood Protection Fund is used to account for voter approved
storm drain user fees used to repair and replace the City's storm drain facilities.
E. Budaetary Accounting
Annual budgets are 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. Budget control is maintained over
all accounts, and expenditures are not allowed to exceed appropriations at the
program level. Throughout the year, the City Council made several supplementing
budgetary adjustments to the General fund, Special Revenue funds, Capital
Projects funds, Proprietary funds and Permanent funds. These adjustments
resulted in a net appropriation decrease in the amount of $864,127. This decrease
was primarily a result of appropriations continued to FY11-12 with City Council
approval.
Under Article XIIIB of the California Constitution (the Gann Spending Limitation
Initiative), the City is restricted as to the amount of annual appropriations from the
proceeds of taxes, and if proceeds of taxes exceed allowed appropriations, the
excess must either be refunded to the State Controller, returned to the taxpayers
through revised tax rates or revised fee schedules, or an excess in one year may
be offset against a deficit in the following year. For the fiscal year ended June 30,
2011, based on calculations by City Management, proceeds of taxes did not
exceed related appropriations.
See independent auditors' report.
49
CITY OF RANCHO PALOS VERDES
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2011
F. Advances to Other Funds
Long-term inter -fund advances are recorded as a receivable in the advancing
governmental fund and as a liability in the fund receiving the advance. Accrued
unpaid interest, for which there is no immediately available resources to pay, is
deferred in the advancing governmental fund and the principal portion of the
advance is reported as a reservation of fund balance.
G. Capital Assets
Capital assets include land, machinery and equipment (vehicles, computers, etc.),
buildings and improvements, and infrastructure assets (street systems, storm
drains, sewer systems, etc.); and are reported in Governmental Activities column
of the Government -Wide Financial Statements. Capital assets are defined by the
City as all land and buildings, vehicles, computers and equipment with an initial
individual cost of more than $5,000; and improvements and infrastructure assets
with costs of more than $100,000. Such assets are recorded at historical cost or
estimated historical cost if purchased or constructed. Donated or annexed capital
assets are recorded at estimated market value at the date of donation or
annexation.
The costs of normal maintenance and repairs that do not add to the value of the
asset or materially extend assets lives are not capitalized. Depreciation is recorded
in the Government -Wide Financial Statements on a straight-line basis over the
useful life of the assets as follows:
Buildings and Improvements
Vehicles, Computers, and Equipment
Infrastructure Assets
Roadway Network
Sewer Network
Storm Drain Network
Parks and Recreation Network
H. Employee Compensated Absences
25 to 50 years
3 to 10 years
10 to 100 years
25 to 50 years
30 to 100 years
25 years
City employees may receive from 10 to 20 days vacation time each year,
depending upon length of service. An employee may accumulate earned vacation
time up to a maximum of two years' worth of accrued vacation leave. Upon
termination, employees are paid the full value of their unused vacation time at their
existing salary. The General Fund will primarily be used to liquidate the liability for
compensated absences in future years. Any liability for compensated absences is
See independent auditors' report.
50
CITY OF RANCHO PALOS VERDES
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2011
only carried in the General Fund if there is unused/unpaid leave outstanding
following an employee's separation.
I. Investments
Investments are stated at fair value (quoted market price of the best available
estimate, thereof), except for the City's investments in U.S. Treasury Securities
which are reported at cost since they have short-term maturities and the City
intends to hold them to maturity.
J. Cash and Cash Eauivalents
The Water Quality Flood Protection Enterprise Fund and the Internal Service
Funds participate in the pooling of City-wide cash and investments. Amounts from
the pool are available to these funds on demand. Therefore the cash and
investments reported in these funds are considered to be cash and cash
equivalents for purpose of the statement of cash flows. The City has no non-cash
investing, capital, or financing activities to be reported on the statement of cash
flows.
K. Claims and Judgments
When it is probable that a claim liability has been incurred, and the amount of the
loss can be reasonably estimated, the City records the estimated loss, net of any
insurance coverage under its self-insurance program. Small claims and judgments
are recorded as expenditures when paid.
The City's self-insurance program is administered through the California Joint
Powers Authority (the CJPIA), which is described at Note #8. The CJPIA is a public
entity risk pool, which is accounted for under the provisions of GASB Statement
10. Claim losses recorded in the CJPIA include both current claims and "Incurred
but Not Reported" (IBNR) claims. The City records amounts deposited with CJPIA
as insurance expenditures in the General Fund when paid. These deposits are
subject to retrospective adjustment. Favorable claims experience result in a refund
of deposits from the CJPIA and such refunds, if any, are recorded as a reduction of
insurance expenditures in the year received. Adverse claims experience result in
the payment of additional deposits and such deposits, if any, are recorded as
insurance expenditures when paid.
L. Prepaid Items
Certain payments to vendors reflect costs applicable to future accounting periods
and are recorded as prepaid items using the consumption method. In
governmental funds, the prepaid assets recorded do not reflect current
See independent auditors' report.
51
CITY OF RANCHO PALOS VERDES
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2011
appropriable resources and thus, an equivalent portion of fund balance is reported
as nonspendable. The City had a total of $1,673,750 ($1,411,666 in governmental
funds and $262,084 in internal service funds) of prepaid items as of June 30, 2011.
M. Estimates
The preparation of financial statements in conformity with accounting principles
generally accepted in the United States of America requires management to make
estimates and assumptions that effect certain reported amounts and disclosures.
Accordingly, actual results could differ from those estimates.
N. Use of Restricted Resources
When both restricted and unrestricted resources are available for use, it is the
City's policy to use restricted resources first. When unrestricted resources
(committed, assigned or unassigned) are available for use, it is the City's policy to
use committed resources first, assigned resources second and finally unassigned
resources.
NOTE #2 — CASH AND INVESTMENTS
Cash and investments as of June 30, 2011, are classified in the accompanying
financial statements as follows:
Government -
Wide
Statement of
Net Assets
Total cash and investments $ 44,065,637
Cash and investments as of June 30, 2011 consist of the following:
Petty Cash $ 2,500
Deposits with Financial Institutions 2,978,122
Investments 41,088,015
Total cash and investments $ 44.065.637
See independent auditors' report.
52
CITY OF RANCHO PALOS VERDES
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2011
Investments Authorized by the California Government Code and the City of
Rancho Palos Verdes' Investment Policy
The table below identifies the investment types that are authorized for the City of
Rancho Palos Verdes by the California Government Code (or the City's investment
policy, where more restrictive). The table also identifies certain provisions of the
California Government Code (or the City's investment policy, where more
restrictive) that address interest rate risk, credit risk, and concentration of credit
risk
Maximum
Amount or Maximum
Maximum Percent of in One
Authorized Investment Type Maturity Portfolio Issuer
U.S. Treasury Obligations 3 years None None
Negotiable Certificates of Deposit 5 years 30% None
Repurchase Agreements 7 days 15% None
Money Market Mutual Funds N/A 15% 15%
Local Agency Investment Fund (LAIF) N/A None None
Money Market Savings/Demand Deposits N/A $5 million 15%
Disclosures Relating to Interest Rate Risk
Interest rate risk is the risk that changes in market interest rates will adversely
affect the fair value of an investment. Generally, the longer the maturity of an
investment, there is a greater sensitivity of its fair value to changes in market
interest rates. The City manages its exposure to interest rate risk by purchasing a
combination of U.S. Treasury securities and investing with the Local Agency
Investment Fund (LAIF) such that the portfolio provides cash flows and liquidity
need for operations. The City's investment is represented by shares in the pool,
which can be withdrawn in one business day. The average maturity of the pool is
less than one year.
Investment Type
Local Agency Investment Fund (LAIF)
U.S. Treasury Securities
Disclosures Relating to Credit Risk
Remaining
Maturity
12 Months
or Less
$ 36,412,335
4,675,680
$ 41,088,015
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
See independent auditors' report.
53
CITY OF RANCHO PALOS VERDES
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2011
rating by a nationally recognized statistical rating organization. The City's LAIF
investment is not rated; and U.S. Treasury Securities are exempt from disclosure.
Concentration of Credit Risk
The investment policy of the City of Rancho Palos Verdes contains no limitations
on the amount that can be invested in any one issuer beyond that stipulated by the
California Government Code. As of June 30, 2011, the City's investments in LAIF
and U.S. Treasury Securities were exempt from concentration of credit risk
disclosure.
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 of Rancho Palos Verdes' 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 market value of the pledged securities in the collateral
pool must equal at least 110 percent 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 percent of the
secured public deposits.
The City's deposits with financial institutions are non-interest bearing bank
accounts that are fully insured by the Federal Deposit Insurance Corporation
(FDIC).
Investment in Local Agency Investment Fund
The City of Rancho Palos Verdes is a voluntary participant in LAIF that is regulated
by California Government Code Section 16429 under the oversight of the
Treasurer of the State of California. The fair value of the City of Rancho Palos
Verdes' investment in this pool is based upon the City of Rancho Palos Verdes'
pro -rata share of the fair value provided by LAIF for the entire pool portfolio (in
relation to the amortized cost of that portfolio). The balance available for
See independent auditors' report.
54
CITY OF RANCHO PALOS VERDES
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2011
withdrawal is based on the accounting records maintained by LAIF, which are
recorded on an amortized cost basis.
LAIF is a governmental investment pool managed and directed by the Treasurer of
the State of California and is not registered with the Securities and Exchange
Commission. An oversight committee comprised of California State officials and
various other participants provides oversight to the management of the fund. The
daily operations and responsibilities of LAIF fall under the auspices of the State
Treasurer's office. The City is a voluntary participant in the investment pool.
NOTE #3 — INTERFUND TRANSACTIONS
Inter -fund balances consisted of the following at June 30, 2011:
0
0
I Due To
General
Fund
Other Governmental Funds $ 138,658
Total: $ 138,658
General fund cash was used to cover grant expenditures in the other
Governmental Funds until reimbursement is received from the grant agencies.
Inter -fund Advances
The General Fund and Affordable Housing Capital Projects Fund have advanced
the Redevelopment Agency amounts as described below:
Balance Balance
July 1, 2010 Additions Deletions June 30, 2011
Advances to the Redevelopment Agency $ 19,368,878 $ 1,022,728 $ - $ 20,391,606
The City has entered into an agreement to provide the RDA operating funds and
staff assistance, supplies, technical and other services and facilities of the City as
the RDA requires in carrying out its function under the community redevelopment
law. The RDA will repay the resulting indebtedness, plus interest, from incremental
property tax revenues arising from the project area, as such revenue becomes
available. As of June 30, 2011, no revenue was available to the RDA to repay the
advances due to the City, nor is sufficient revenue expected to be available to
See independent auditors' report.
55
CITY OF RANCHO PALOS VERDES
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2011
repay advances in the immediate future. Variable interest was accrued at a rate of
3.495 percent during the fiscal year ended June 30, 2011. Of the $18,568,186
advance, $14,035,489 relates to the Portuguese Bend portion of the RDA, while
$4,532,697 relates to the Abalone Cove portion. During the year ended June 30,
2011, accrued interest of $473,964 was added to the balance of the advance to the
Portuguese Bend Fund, while principal of $346,483 and accrued interest of
$153,064 was advanced to the Abalone Cove Fund. No interest has ever been
paid by the RDA on these advances; therefore, the interest component of the
advance has been recorded as deferred revenue in the General Fund of the City.
In connection with the development of the senior affordable housing project, the
City agreed to advance funds to the Redevelopment Agency for use in providing
financial assistance to the developer in the form of a construction loan. The
balance of these advances at June 30, 2011 was $1,823,420, which includes
$57,035 of interest accrued at a rate of 3 percent.
Inter -fund Transfers
Inter -fund transfers for the year ended June 30, 2011, consisted of the following:
Transfer To
Transfer From
Street Other
General Maintenance Governmental
Fund Fund Funds Totals
General Fund $ - $ $ 651,020 $ 651,020
Street Maintenance - 937,133 937,133
Capital Improvement Projects 6,613,778 4,419 297,134 6,915,331
Other Governmental Funds 350,570 - 350,570
Totals: $ 6,964,348 $ 4,419 $ 1,885,287 $ 8,854,054
Transfers are used to: 1) move revenues from the fund that statute or budget
requires for collection to the fund that statute or budget requires for expenditure;
and 2) use unrestricted revenues collected in the General Fund to finance various
programs accounted for in other funds in accordance with budgetary authorizations
or grant matching requirements.
NOTE #4 — CAPITAL ASSETS AND DEPRECIATION
In accordance with GASB Statement No. 34, the City has reported all capital
assets including infrastructure in the Government -Wide Statement of Net Assets.
The City elected to use the basic reporting approach as defined by GASB
Statement No. 34 for all infrastructures, whereby depreciation expense and
accumulated depreciation has been recorded. The following tables present the
capital assets activity for the year ended June 30, 2011.
See independent auditors' report.
56
CITY OF RANCHO PALOS VERDES
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2011
Governmental Activities
Capital assets not being depredated:
Land
Construction in progress
Total capital assets not being depreciated
Capital assets being depreciated:
Building and improvements
Vehicles
Computer equipment
Furniture, fixtures and equipment
Infrastructure
Roadway system
Sewer system
Storm drain system
Parks system
Total capital assets being depreciated
Less accumulated depreciation for:
Buildings and improvements
Vehicles
Computer equipment
Furniture, fixtures and equipment
Infrastructure
Roadway system
Sewer system
Storm drain system
Parks system
Total accumulated depreciation
Total capital assets being depreciated, net
Governmental activities capital assets, net
Beginning
Balance
$38, 808,553
66290
38, 874,843
9,811,633
289,454
599,397
512,517
0
86, 550,235
25, 755,463
13,148,416
6,482,028
143,149,143
(2,054,641)
(196,512)
(536,859)
(404,650)
0
(39,486,900)
(16, 852,879)
(2,716,996)
(4,443,240)
(66, 692,677)
76, 456,466
$115,331,309
Increases Decreases
Ending
Balance
$1239,735 0 $40,048,288
2,042,136 ($1,480,118) 628,308
3,281,871 (1,480,118) 40,676,596
0 (432,094) 9,379,539
50,896 (44,732) 295,618
0 0 599,397
61,343 0 573,860
0
1,590,315 0 88,140,550
0 0 25,755,463
0 0 13,148,416
220296 0 6,702,324
1,922,850 (476,826) 144,595,167
(203,170) 34,568 (2,223,243)
(49,182) 44,732 (200,962)
(27,356) 0 (564,215)
(45,349) 0 (449,999)
0
(2,349,451) 0 (41,836,351)
(455,109) 0 (17,307,988)
(250,479) 0 (2,967,475)
(133,208) 0 (4,576,448)
(3,513,304) 79,300 (70,126,681)
(1,590,454) (397,526) 74,468,486
$1,691,417 ($1477,644) $115,145,082
Depreciation expense was charged to functions/programs of the primary
government as follows:
Administration (depreciation of buildings)
Public Works (depreciation of roadways, sewers, and storm drains)
Recreation Services (depreciation of parks system)
Capital assets held by the City's internal service funds are charged
to the various functions based on their usage of the assets
Total Depreciation Expense — Governmental Activities
See independent auditors' report.
57
$ 203,170
3,055,039
133,208
121.887
$3.513.304
CITY OF RANCHO PALOS VERDES
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2011
Business -type Activities
Capital assets not being depreciated:
Land
Construction in progress
Total capital assets not being depredated
Capital assets being depreciated:
Equipment
Storm drain system
Total capital assets being depreciated
Less accumulated depreciation for:
Equipment
Storm drain system
Total accumulated depreciation
Total capital assets being depreciated, net
Business -type activities capital assets, net
Beginning
Balance
$1,408,493
149,081
1,557,574
11,813
11,338,573
11,350,386
(8,270)
(441,385)
(449,655)
10,900,731
$12,458,305
Increases
0
$529,899
529,899
0
0
0
(2,362)
(233, 173)
(235,535)
(235,535)
$294,364
Ending
Decreases Balance
0 $1,408,493
0 67 8, 98 0
0 2,087,473
0 11,813
0 11,338,573
0 11,350,386
0 (10,632)
0 (674,558)
0 (685,190)
0 10, 66 5,196
0 $12,752,669
Depreciation expense of $235,535 is included in the Water Quality Flood
Protection enterprise fund.
NOTE #5 — LONG-TERM DEBT
RDA Tax Increment Bond
RDA Deferred Interest Payable
Employee Compensated Absences
Totals
Balance
July 1, 2010 Additions
$ 5,250,000
1,136, 303
294,483 252,275
$ 6,680,786 $ 252,275
Balance Amount Due
Deletions June 30, 2011 in One Year
$ (85,000) $ 5,165,000 $ 100,000
(337,701) 798,601
(214,158) 332,600 241,878
$(636,859) $ 6,296,201 $ 341,878
A. RDA Tax Increment Bond and Deferred Interest Payable
In July 1991, the RDA received $10,000,000 in loan proceeds (the Loan) from the
County of Los Angeles (the County) upon the County's issue of Abalone Cove
Improvement Bonds 2651-M pursuant to a Reimbursement and Settlement
Agreement (the Agreement), dated October 27, 1987 in connection with the Horan
Lawsuit. The Loan was made for the purpose of abating the Abalone Cove
landslide. The settlement Loan was secured by property assessment liens in the
Abalone Cove project area.
As stipulated by the parties to the Agreement, a portion of the Loan proceeds was
used to repay a tax allocation and revenue anticipation promissory note issued to
the County in the principal amount of $1,450,000, plus accrued interest equal to
$179,244. A second portion of the proceeds was used to repay expenses
See independent auditors' report.
58
CITY OF RANCHO PALOS VERDES
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2011
advanced by the County in the amount of $135,614. A third portion was used to
repay certain loans from the City to the RDA in the amount of $787,340.
Per the terms of the Agreement, $1,000,000 of the proceeds was deposited in the
Abalone Cove Permanent Fund of the Joint Powers Improvement Authority. The
remainder of the proceeds was accounted for in the RDA's Abalone Cove Fund.
Concurrent with the execution of the Agreement, the County deeded its title in the
Abalone Cove Beach Park to the RDA.
As part of the Agreement, the RDA is required to transfer 17 percent of tax
increment revenue to the Consolidated Fire Protection District of the County and
50.9 percent of tax increment revenue for debt repayment to the County. In
accordance with the Agreement, the RDA was to pay the Loan principal plus
interest at 7.7654 percent over a 30 -year period that began in 1992. However,
these debt payments were to be deferred 10 years until the fiscal year ended June
30, 2002.
As part of the deferral arrangement, the accrued interest from the inception of the
Loan through June 30, 2002, in the amount of $7,314,944, was scheduled for
payment over a 20 -year period beginning in the fiscal year ended June 30, 2002
with no additional interest. The remaining balance of $10,274,119 was scheduled
for payment to the County over a 20 -year period beginning in the fiscal year ended
June 30, 2002, with interest at 7.7654 percent.
On November 1, 1997, the City, the RDA and the County of Los Angeles entered
into a Memorandum of Understanding (MOU) agreeing to restructure the
repayment schedule of the debt owed to the County by the RDA. In accordance
with the terms of the MOU, the $10,000,000 loan principal owed to the County was
cancelled. As consideration for the loan cancellation, the RDA made a lump sum
payment to the County in the amount of $4,545,000 and issued a $5,455,000 tax
increment bond to the County (the RDA bond). Of the $4,545,000 lump sum
payment, $2,000,000 was paid from tax increment revenue and interest earnings
accumulated in the Debt Service Fund. The remaining $2,545,000 was funded by a
combination of a loan from the General Fund of the City to the Agency for
$1,545,000 and a net operating transfer from the Agency's Abalone Cove Capital
Projects Fund to the Debt Service Fund of $1,000,000. The private property liens
resulting from the formation of the bond assessment district in connection with the
Reimbursement and Settlement Agreement in 1987 were discharged in
accordance with the terms of the MOU.
The RDA bond was issued as a conduit through the Improvement Authority to the
County. No issuance costs were incurred. One hundred percent of net future tax
increment revenue will fund the payment of the RDA bond debt and the deferred
interest from the original Loan until paid in full. In December 1997, the County
See independent auditors' report.
59
CITY OF RANCHO PALOS VERDES
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2011
began withholding payment of the Agency's net tax increment revenue (net of the
17 percent payment to the County Fire Protection District and the 20 percent
housing set-aside amount) to offset the annual principal and interest charges. The
principal of the RDA bond began maturing in installments each December 2nd,
commencing December 2, 2004. Interest accrues at a rate of 5 percent per annum
and is payable in arrears each June 2nd and December 2nd.
Additionally, both the accrued interest and deferred interest on the $10,000,000
Loan previously owed the County was retroactively recalculated from the Loan
origination date at a rate of approximately 5 percent compared to 7.7654 percent
per the original Agreement. The recalculated deferred interest was $3,111,400. In
accordance with the MOU, the recalculated deferred interest does not accrue
additional interest. As of June 30, 2011, a total of $2,312,798 in accumulated tax
increment has been applied against this balance, including $337,701 applied
during fiscal year 2010-11. The remaining balance at June 30, 2011, was
$798,602. The accumulated amount of tax increment withheld over the scheduled
principal and interest payment made during the life of the RDA bond is recorded in
the Debt Service Fund as a prepaid item at June 30, 2011.
After payment of the deferred interest, the RDA may elect to further defer payment
to the County of the 50.9 percent of tax increment revenue in order to extinguish
any other indebtedness of the RDA. This deferral would allow the tax increment to
be available for the repayment of loans made to the RDA by the City (Note #3). In
the event the deferral is elected, and the debt owed the City is fully extinguished
and no other RDA indebtedness exists, the RDA will transfer all subsequent tax
increment revenue to the County to fund prior deferrals of, and current payments
of, the 50.9 percent of tax increment revenue required to be paid per the
Settlement Agreement.
The debt service schedule below summarizes all fixed principal and interest
payments for the term of the RDA bond. Because the payback period for the
deferred interest amount will fluctuate depending on the availability of excess tax
increment revenue, no amounts have been included in the following schedule for
repayment of the deferred interest.
See independent auditors' report.
60
CITY OF RANCHO PALOS VERDES
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2011
Year Ending
June 30, Principal Interest Total
2012 1 00,00 0 255,750 35 5,75 0
2013 1 20,00 0 250,250 370,250
2014 1 35,00 0 243,875 378,875
2015 1 55,00 0 236,625 391,625
2016 1 80,00 0 228,250 408,250
201 7-2021 1,2 75,00 0 972,875 2,24 7,87 5
202 2-202 6 2,085,000 557,875 2,642,875
202 7-202 8 1,115,000 56,875 1,171,875
Totals $ 5,165,000 $ 2,802,375 $ 7,967,375
B. Employee Compensated Absences
There is no fixed payment schedule for employee compensated absences. Based
on historical trends, $241,878 estimated to be the amount that will be used and/or
paid out during fiscal year 2011-12.
NOTE #6 — CLASSIFICATIONS OF NET ASSETS AND FUND BALANCE
Government -Wide Financial Statements
In the Government -Wide financial statements net assets are classified in the
following categories:
Invested in Capital Assets, Net of Related Debt
This category groups all capital assets, including infrastructure, into one
component of net assets. Accumulated depreciation on these assets reduces this
category as does any outstanding balance on debt incurred in acquiring or
constructing the capital assets.
Restricted Net Assets
This category presents external restrictions imposed by creditors, grantors,
contributions or laws or regulations of other governments and restrictions imposed
by law through constitutional provisions or enabling legislation.
Unrestricted Net Assets
This category represents the net assets of the City that are not externally restricted
for any project or other purpose.
See independent auditors' report.
61
CITY OF RANCHO PALOS VERDES
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2011
Fund Financial Statements
The City has implemented Governmental Accounting Standards Board Statement
No. 54 "Fund Balance Reporting and Governmental Fund Type Definitions" for the
year ended June 30, 2011. As part of implementation, three funds no longer met
the more narrow definition of a Special Revenue fund type. The Utility
Undergrounding Fund, Roadway Beautification Fund, and RPV TV Fund were
closed and all remaining cash was transferred to the General Fund. In addition,
the Bikeways Fund, Environmental Excise Tax Fund, Quimby Fund, and the City's
Affordable Housing Fund were re-classified from Capital Projects fund types to
Special Revenue fund types.
The fund balances reported on the fund statements now consist of the following
categories:
Nonspendable — Amounts that are not in a spendable form (such as inventory and
prepaid expenditures) or are legally required to be maintained intact (such as the
corpus of an endowment fund).
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 the City Council via a
City Council resolution. To be reported as Committed, amounts cannot be used for
any other purpose unless the City Council adopts another resolution to remove or
change the constraint. The City Council has not committed fund balances as of
June 30, 2011.
Assigned — Amounts the City Council intends to use for a specific purpose, which
is expressed by the City Council via minute order. The City Council has assigned
the entire fund balance of the Capital Improvement Projects fund for the future
design and construction of infrastructure improvement projects.
Unassigned — Amounts that are available for any purpose; these amounts are
reported only in the General Fund. However, if there is a deficit fund balance to be
reported in any fund, it is classified as Unassigned.
The City's governmental fund balances were classified as follows at June 30,
2011:
See independent auditors' report.
62
CITY OF RANCHO PALOS VERDES
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2011
General
Fund
Street RDA Housing
Maintenance Set -Aside
Fund Fund
Nonspendable:
In Form (e.g. inventory, prepaid amounts) $ 7,514,501 $
Legally (e.g. endowments) -
Restricted -
Committed -
Assigned -
Unassigned:
Rainy Day Fund 10,762,665
Continued Appropriations 623,096
Deficit Fund Balance
Governmental Fund Balance Totals
$ 2,990,000
915,145
RDA Debt Capital Other
Service Improvement Governmental
Fund Fund Funds
$ 573,216
11, 649, 780
$ 1,784,343
1,793,741
7,669,030
(1.162.5821 (18.524.2151 - (126.3961
$18.900,262 $ 915,145 $ 1,827.418 $(17,950.999) $ 11,649,780 $ 11,120,718
Minimum Fund Balance Policies
The City Council has adopted a policy, via resolution, to maintain the following
minimum fund balances:
➢ Rainy Day Fund — At least fifty percent of annual operating expenditures in
the General Fund;
➢ Capital Improvement Fund — A minimum of $3 million for infrastructure
improvement projects;
➢ Street Maintenance Fund — A minimum of one year's appropriations for road
maintenance on Palos Verdes Drive South in the landslide area; and
➢ Habitat Restoration Fund — A minimum of $50,000 for emergency use for
habitat restoration purposes.
Special Revenue Funds
Fund balances are restricted in the special revenue funds for the following
purposes:
Fund Purpose
Street Maintenance
Air Quality Management
Community
Development Block
Grant
El Prado
Proposition A
Proposition C
Maintain the City's right of way,
which includes both pavement and
roadside maintenance
vehicles
Provide home improvement loans
to low and moderate income
property owners, and construct City
owned facilities compliant with the
Maintain the common area of the El
Prado neighborhood
Public transportation
Public transit and related services
See independent auditors' report.
63
Revenue Source
Highway Users' Tax and
other transfers of other
restricted funding (e.g.
Landscaping & Lighting
District Assessments)
AB2766 fees
Federal grant
Property assessments
Special sales tax
Special sales tax
Amount
$ 915,145
$ 48,607
$ 14,781
$ 125,603
$ 1,570,675
CITY OF RANCHO PALOS VERDES
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2011
Continued:
Fund
Measure R
Beautification
Waste Reduction
Purpose Revenue Source Amount
Transportation needs, including
maintenance of arterial streets,
traffic control, bikeway and
pedestrian improvements, and
public transit Special sales tax $
Right of way beautification,
neighborhood beautification grantf ecycling fees and
and promote recycling grants $
State mandated waste reduction AB939 fees from waste
and recycling plans and programs haulers $
Law enforcement and public safet7Federal and state grant:
Public Safety Grants equipment and shared revenues $
1972 Act Landscaping 8 Maintain right of way landscaping
Lighting District and lighting Property assessments $
Maintain right of way lighting and
1911 Act Lighting Distridtraffic signals
Improvement Authority
Portuguese Bend
Habitat Restoration
Measure A
Abalone Cove Sewer
District
Dr. Allen and Charlotte
Ginsburg Cultural Arts
Building
Donor Restricted
Contributions
Bikeways
Maintain landslide abatement
improvements in the Portuguese
Bend project area
Restore habitat on City owned
property
Acquire, improve and maintain
open space and park facilities
Maintain and operate the Abalone
Cove sewer system
Property assessments $
General fund transfers
pursuant to the
provisions of a
reimbursement and
settlement agreement
with the County of Los
Angeles $ 302,330
Non -Spendable $43,741
Restricted $219,317
630.132
916,782
308,433
19.932
94,037
1,652,646
Developer fees
Voter -approved county
bond proceeds
Property assessments $
Construction of a building to be
used for dancing or other cultural
activities, or for the purchase of
open space for habitat conservation
and passive recreational purposes Private donation $
Acquire or construct recreational
facilities Private donations $
Design and construction of bicycle
and pedestrian facilities on Transportation
roadways, including disable accesDevelopment Act Article
ramps 3 $
See independent auditors' report.
64
96.678
182,947
405.519
51
CITY OF RANCHO PALOS VERDES
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2011
Continued:
Fund
Environmental Excise
Tax
Quimby
Affordable Housing
Purpose
Purchase land, construct facilities,
or purchase equipment to develop,
improve and expand parks,
services, utilities and public safety
Develop or rehabilitate park and
recreational facilities
Implement goals, policies and
programs outlined in the Housing
Element of the City's General Plan
Revenue Source
Local tax on new
construction
Developer fees
Developer fees
Amount
$ 415,398
$ 29,328
$ 4,152
The RPV TV Special Revenue Fund does not receive restricted revenues and was
closed during FY10-11.
Capital Proiect Funds
Fund balances are restricted or assigned for the following:
Fund
Capital Improvement
Projects
Redevelopment Agency
Abalone Cove
Redevelopment Agency
Portuguese Bend
Pu rpose
Assigned for design, construction & inspection of
City infrastructure projects, including roadways,
storm drains, and park facilities
Restricted for landslide mitigation projects in the
Abalone Cove area of the Redevelopment
Agency's Project Area
Restricted for landslide mitigation projects in the
Portuguese Bend area of the Redevelopment
Agency's Project Area
Amount
$ 11,649,780
$ 6,216
$ 306,682
The Utility Undergrounding Fund and Roadway Beautification Fund were closed
during FY10-11. The remaining fund balances were transferred to the General
Fund.
Permanent Funds
Fund balances are considered non -spendable or restricted for the following:
Fund
Subregion One
Maintenance
Purpose Amount
The interest earned on this fund balance is used
to maintain trails and open space dedicated to the
City by the developer of the Oceanfront Estates
tract of homes. The Non -Spendable portion of
this fund balance must be maintained per the
development agreement with the City.
See independent auditors' report.
65
Non -Spendable $750,000
Restricted $26,007
CITY OF RANCHO PALOS VERDES
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2011
Continued
1Fund Purpose Amount
The interest earned on this fund balance is used
to maintain infrastructure constructed by the
Redevelopment Agency in the Abalone Cove area
of the Redevelopment Agency's Project Area.
The Non -Spendable portion of the fund balance
Improvement Authority must be maintained pursuant to a Reimbrusement Non -Spendable $1,000,000
Abalone Cove & Settlement Agreement. Restricted $292,777
NOTE #7 — PENSION AND RETIREMENT HEALTH SAVINGS PLANS
Pension Plan Description
The City provides a defined benefit pension plan that includes retirement and
disability benefits, annual cost -of -living adjustments, and death benefits to plan
members and beneficiaries. The City participates in the Miscellaneous 2.5% at 55
Risk Pool of the California Public Employee's Retirement System (CaIPERS), a
cost-sharing, multi-employer public employee defined benefit pension plan
administered by CaIPERS. CaIPERS provides retirement and disability benefits,
annual cost -of -living adjustments, and death benefits to plan members and
beneficiaries. State statutes, within the Public Employees' Retirement Law,
establish benefit provisions and other requirements. The City selects optional
benefit provisions from the benefit menu by contract with CaIPERS and adopts
those benefits through local ordinance. Copies of the CaIPERS annual financial
report may be obtained from the CaIPERS Executive Office at 400 P Street,
Sacramento, California 95814 or downloaded from their website at
www.calpers.gov.
Pension Plan Funding Policy
The contribution requirements of plan members are established by State statute
and the employer contribution rate is established and amended by CaIPERS.
Active City employees are required to contribute 8% of their annual covered salary.
For fiscal year 2010-11, the City paid 6.5% of the contribution for all the full-time
positions, and 1c/0 of the contribution for part-time employees. However, beginning
in September 2011, City employees will pay the entire 8% contribution. The City is
required to contribute the actuarially determined remaining amounts necessary to
fund the benefits for its members. The fiscal year 2010-11 rate was 10.263% of
covered payroll.
As a result of having less than 100 active members as of June 30, 2003, the City
was required to participate in a risk pool. The City's pooled employer contribution
rate is the same as the stand-alone employer contribution rate. At the time of
See independent auditors' report.
66
CITY OF RANCHO PALOS VERDES
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2011
joining the mandatory pooled plan, CaIPERS established an employer side fund to
account for the difference between the funded status of the pooled plan and the
funded status of the City's plan. The City paid off its side fund liability in fiscal year
2009-2010. The funded status of the risk pool at June 30, 2010 was 63.9%. The
risk pool's unfunded actuarial accrued liability at June 30, 2010 was $238,141,415.
The City's share of the risk pool's liability is estimated to be $3,118,353. The
estimate is based on the City's 1.3% proportionate share of the risk pool's total
projected payroll for fiscal year 2011-12. However, the risk pool's liability is not a
reportable liability of the City.
The City's contributions to CaIPERS for the most recent three years follow.
City Pay-off Total
Year Ended Contribution Side Fund Liability City Cost
June 30, 2011 $ 770,540 $ - $ 770,540
June 30, 2010 814,205 1,661,376 2,475,581
June 30, 2009 808,304 700,000 1,508,304
Retirement Health Savings Plan
On November 17, 2009, the City approved the establishment of a defined
contribution Retirement Health Savings Plan (the "Plan") for its full-time
employees. The Plan is a Health Reimbursement Arrangement ("HRA") within
Sections 105 and 106 of the Internal Revenue Code. The Plan assets are
managed in a non-taxable trust as described in Section 501(c)(9) of the Internal
Revenue Code. The City is the Plan Administrator, and utilizes the services of a
contracted financial services provider for day-to-day administration of contributions
and disbursements. The City has the authority to amend the Plan's provisions and
contribution requirements.
The City has no obligation to make contributions to the Plan, but as part of the
annual budget process the City may elect to make contributions to the Plan.
Employees are required to contribute 1% of their gross wages to their account,
which is owned by the employee. During fiscal year 2010-11, the City contributed
a total of $73,465 to employee accounts. During the same time, employees
contributed a total of $45,503 to their own accounts.
The Plan assets are not an asset of the City. Therefore, only the City's expense to
make contributions to the Plan has been recorded in the Employee Benefits
internal service fund in the City's financial statements.
See independent auditors' report.
67
CITY OF RANCHO PALOS VERDES
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2011
NOTE #8 — LIABILITY, INSURED PROGRAMS AND WORKERS'
COMPENSATION PROTECTION
Description of Self -Insurance Pool Pursuant to Joint Powers Agreement
The City is a member of the California Joint Powers Insurance Authority
(Authority). The Authority is composed of 121 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.
Self -Insurance Programs of the CJPIA
A revised cost allocation methodology was introduced in 2010-11, however it
retains many elements of the previous cost allocation methodology. Each member
pays an annual contribution (formerly called the primary deposit) to cover
estimated losses for the coverage period. This initial funding is paid at the
beginning of the coverage period. After the close of the coverage period,
outstanding claims are valued. A retrospective deposit computation is then
conducted annually thereafter until all claims incurred during the coverage period
are closed on a pool -wide basis. This subsequent cost re -allocation among
members based on actual claim development can result in adjustments of either
refunds or additional deposits required.
The total funding requirement for self-insurance programs is estimated using
actuarial models and pre -funded through the annual contribution. Costs are
allocated to individual agencies based on exposure (payroll) and experience
(claims) relative to other members of the risk -sharing pool. Additional information
regarding the cost allocation methodology is provided below.
General Liability
In the liability program claims are pooled separately between police and non -police
exposures. (1) The payroll of each member is evaluated relative to the payroll of
other members. A variable credibility factor is determined for each member, which
establishes the weight applied to payroll and the weight applied to losses within the
formula. (2) The first layer of losses includes incurred costs up to $30,000 for each
occurrence and is evaluated as a percentage of the pool's total incurred costs
within the first layer. (3) The second layer of losses includes incurred costs from
See independent auditors' report.
68
CITY OF RANCHO PALOS VERDES
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2011
$30,000 to $750,000 for each occurrence and is evaluated as a percentage of the
pool's total incurred costs within the second layer. (4) Incurred costs in excess of
$750,000 up to the reinsurance attachment point of $5 million are distributed based
on the outcome of cost allocation within the first and second loss layers. (5) Costs
of covered claims from $5 million to $10 million are paid under a reinsurance
contract subject to a $2.5 million annual aggregate deductible. Costs of covered
claims from $10 million to $15 million are paid under two reinsurance contracts
subject to a combined $3 million annual aggregate deductible. On a cumulative
basis for all 2010-11 reinsurance contracts the annual aggregate deductible is $5.5
million. (6) Costs of covered claims from $15 million up to $50 million are covered
through excess insurance policies.
The overall coverage limit for each member including all layers of coverage is $50
million per occurrence.
Costs of covered claims for subsidence losses are paid by reinsurance and excess
insurance with a pooled sub -limit of $35 million per occurrence. This $35 million
subsidence sub -limit is composed of (a) $5 million retained within the pool's SIR,
(b) $10 million in reinsurance and (c) $20 million in excess insurance. The excess
insurance layer has a $20 million annual aggregate.
Workers' Compensation
In the workers' compensation program claims are pooled separately between
public safety (police and fire) and non-public safety exposures. (1) The payroll of
each member is evaluated relative to the payroll of other members. A variable
credibility factor is determined for each member, which establishes the weight
applied to payroll and the weight applied to losses within the formula. (2) The first
layer of losses includes incurred costs up to $50,000 for each occurrence and is
evaluated as a percentage of the pool's total incurred costs within the first layer.
(3) The second layer of losses includes incurred costs from $50,000 to $100,000
for each occurrence and is evaluated as a percentage of the pool's total incurred
costs within the second layer. (4) Incurred costs in excess of $100,000 up to the
reinsurance attachment point of $2 million are distributed based on the outcome of
cost allocation within the first and second loss layers. (5) Costs of covered claims
from $2 million up to statutory limits are paid under a reinsurance policy.
Protection is provided per statutory liability under California Workers'
Compensation Law.
Employer's Liability losses are pooled among members to $2 million. Coverage
from $2 million to $4 million is purchased as part of a reinsurance policy, and
Employer's Liability losses from $4 million to $10 million are pooled among
members.
See independent auditors' report.
69
CITY OF RANCHO PALOS VERDES
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2011
Purchased Insurance
Pollution Legal Liability Insurance
The City participates in the pollution legal liability insurance program (formerly
called environmental insurance) which is available through the Authority. The
policy covers sudden and gradual pollution of scheduled property, streets, and
storm drains owned by the City. Coverage is on a claims -made basis. There is a
$50,000 deductible. The Authority has a limit of $50 million for the 3 -year period
from July 1, 2008 through July 1, 2011. Each member of the Authority has a $10
million sub -limit during the 3 -year term of the policy.
Property Insurance
The City participates in the all-risk property protection program of the Authority.
This insurance protection is underwritten by several insurance companies. City
property is currently insured according to a schedule of covered property submitted
by the City to the Authority. City property currently has all-risk property insurance
protection in the amount of $14,481,933. There is a $5,000 deductible per
occurrence except for non -emergency vehicle insurance which has a $1,000
deductible. Premiums for the coverage are paid annually and are not subject to
retrospective adjustments.
Earthquake and Flood Insurance
The City purchases earthquake and flood insurance on a portion of its property.
The earthquake insurance is part of the property protection insurance program of
the Authority. City property currently has earthquake protection in the amount of
$14,386,720. There is a deductible of 5% per unit of value with a minimum
deductible of $100,000. Premiums for the coverage are paid annually and are not
subject to retrospective adjustments.
Crime Insurance
The City purchases crime insurance coverage in the amount of $1,000,000 with a
$2,500 deductible. The fidelity coverage is provided through the Authority.
Premiums are paid annually and are not subject to retrospective adjustments.
Special Event Tenant User Liability Insurance
The City further protects against liability damages by requiring tenant users of
certain property to purchase low-cost tenant user liability insurance for certain
activities on agency property. The insurance premium is paid by the tenant user
See independent auditors' report.
70
CITY OF RANCHO PALOS VERDES
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2011
and is paid to the City according to a schedule. The City then pays for the
insurance. The insurance is arranged by the Authority.
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
2010-11.
NOTE #9 — CONTINGENCIES AND COMMITMENTS
Litigation
In the normal course of operations, the City has been named as a defendant in
various claims and legal actions. Generally, unfavorable results of these claims
and legal actions are funded through the City's participation in California Joint
Powers Insurance Authority (CJPIA, see Note #8) and, as such, the City believes
that the ultimate liability for these legal actions and claims will not have a material
adverse effect on the City's financial statements. The City is also a defendant in
legal actions for which the potential losses would not be covered through
participation in CJPIA. The likelihood of an unfavorable outcome or the amount of
potential losses cannot be reasonably estimated by the City for these claims at this
time. In the event of an unfavorable outcome the losses would likely be material to
the City's financial statements.
Storm Drain Failures
During the winter storms of fiscal year 2004-05 citywide emergency repairs were
required, including those to repair sinkholes along Western Avenue. The City
received reimbursement from the Federal Emergency Management Agency in the
amount of approximately $1.2 million. Of that amount, $274,430 is included in the
fund balance of the Capital Improvement Projects Fund.
Based on an audit by the Department of Homeland Security's Office of Inspector
General, the City may be liable to return over $900,000 to FEMA. The City
strongly disagrees with the auditor's conclusions and intends to file all appropriate
appeals in support of its claim that it should be allowed to retain the FEMA funds.
Building Moratorium
There is longstanding building moratorium in the landslide area of the City.
Several landowners with parcels in this area filed a lawsuit claiming an
unconstitutional taking of their property due to the building moratorium and the
See independent auditors' report.
71
CITY OF RANCHO PALOS VERDES
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2011
City's adoption in 2002 of a safety standard that must be satisfied before
development could occur in this area. The landowners claim that the City has
made it impossible for them to satisfy the exception to the moratorium that would
allow development of the parcels.
Judgment was entered for the City after a three-month trial in the Superior Court.
However, the California Court of Appeal reversed the trial court's decision. The
landowners were seeking a trial on the issue of damages, which they assert
exceed $32 million. The parties negotiated a settlement, but the plaintiffs refused
to sign it, and subsequently rescinded their approval of the settlement. On October
21, 2011, the Superior Court entered judgment in favor of the City on all causes of
action. The plaintiffs filed an appeal from the judgment on November 4, 2011. As
of June 30, 2010, the City had accrued a liability for the potential settlement. The
City will continue its vigorous defense of this case.
AT&T Utility Users' Tax
AT&T and a group of plaintiffs from a national class action lawsuit against AT&T
have sued the City and 150 other California local government entities for a refund
of utility users' tax (UUT) alleged to have been erroneously paid to the City. The
City executed a settlement agreement on November 15, 2011. AT&T will deduct a
total of $38,980 from future UUT payments owed to the City.
Recent Changes in Legislation Affecting California Redevelopment Agencies
AB X1 26, which was signed by the Governor of California on June, 29, 2011,
added Parts 1.8 and 1.85 to the Community Redevelopment Law. Part 1.8
immediately suspended most redevelopment agency activities and, among other
things, prohibited redevelopment agencies from incurring indebtedness or entering
into or modifying contracts. Part 1.85 provided that on October 1, 2011, all existing
redevelopment agencies and redevelopment agency components of community
development agencies were dissolved, and successor agencies are designated as
successor entities to the former redevelopment agencies. Part 1.85 imposed
numerous requirements on the successor agencies and subjected successor
agency actions to the review of oversight boards established under Part 1.85.
AB X1 27 was signed by the Governor concurrently with AB X1 26 and added Part
1.9 to the Community Redevelopment Law. Part 1.9 established a Voluntary
Alternative Redevelopment Program (VARP) whereby a redevelopment agency
will, notwithstanding Parts 1.8 and 1.85, be authorized to continue to exist and
carry out the provisions of the Community Redevelopment Law. Failure to make
these payments would require the redevelopment agency to be terminated under
AB X1 26.
See independent auditors' report.
72
CITY OF RANCHO PALOS VERDES
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2011
On July 18, 2011, the League of California Cities and the California
Redevelopment Association filed a lawsuit on behalf of cities, counties and
redevelopment agencies petitioning the California Supreme Court to overturn AB
X1 26 and AB X1 27. On August 11, 2011, the Supreme Court of California
decided to hear the case and set a briefing schedule designed to allow the Court to
decide the case before January 15, 2012, which is the date the first half of the
FY11-12 VARP payment is due (the second half is due May 15, 2012). On August
11, 2011, the Court also issued a stay order, which was subsequently modified on
August 17, 2011. Pursuant to the modified stay order, the Supreme Court granted
a stay of all of AB X1 27 (Part 1.9), except for Health and Safety Code Section
34194(b)(2) (relating to the determination of cities' FY11-12 remittance amounts),
and a partial stay of AB X1 26. With respect to AB X1 26, Part 1.85 was stayed in
its entirety, but Part 1.8 was not stayed.
The granting of the stay means that all agencies are subject to the prohibitions in
Part 1.8, including the prohibition against entering into new contracts, during the
time the stay is in effect. The Supreme Court will consider adjusting the dates and
deadlines in AB X1 26 and AB X1 27 if the Supreme Court ultimately upholds
those statutes to take into account the period of time the stay was in effect, but the
Supreme Court's decision is not likely to occur until January of 2012.
On August 16, 2011, the City adopted Ordinance No. 524 to participate in the
VARP, thereby agreeing to make specified annual payments to the County Auditor -
Controller for allocation to special districts and educational entities and authorizing
its redevelopment agency (Agency) to continue to exist pursuant to Part 1.9.
The remittance amount to be paid by the City in FY11-12 is the Agency's
proportionate share of $1.7 billion, as determined by the State Department of
Finance pursuant to a formula specified in AB X1 27. The Department of Finance
notified the City that its FY11-12 remittance amount is $91,320. The City appealed
its FY11-12 amount on August 10, 2011 on the basis that AB X1 26 and AB X1 27
are unconstitutional.
This payment obligation under AB X1 27 is an ongoing obligation of the City in
subsequent years. Commencing in FY12-13, the City's remittance amount is
expected to be based on the Agency's proportionate share of $400 million (with
adjustments based on growth or decline in tax increment revenues); however, the
amount has not yet been determined by the state legislature.
In addition, AB X1 27 provided that agencies will pay additional pass through
payments to school entities ("Additional Pass -Through") on account of any "new
debt." New debt is indebtedness that is listed on a statement of indebtedness
("SOI") filed after the 301 that was required to be filed on October 1, 2011, and that
was not displayed on that SOI.
See independent auditors' report.
73
CITY OF RANCHO PALOS VERDES
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2011
On August 24, 2011, the Agency adopted an Enforceable Obligations Payment
Schedule (EOPS) as required by AB X1 26. Enforceable obligations include
bonds, loans and payments required by the federal or state government; as well as
legally binding and enforceable agreements or contracts. The Agency prepared
the initial Recognized Obligation Payment Schedule (ROPS) that was presented to
City Council on September 6, 2011, when the City adopted Resolution 2011-66
making an election to serve as the successor agency pursuant to Part 1.85.
Pursuant to AB X1 27 (specifically, Health and Safety Code Section 34194.2) a city
and agency can enter into a transfer agreement to provide for the agency to
transfer to the city each year a portion of the agency's tax increment. Amounts
transferred must be used for the purpose of financing activities in the
redevelopment area that are related to accomplishing the redevelopment agency
project goals. For FY11-12 only, the tax increment may be transferred from the
Agency's 20% tax increment set aside for affordable housing. The amount of the
annual transfer under this type of agreement cannot exceed the amounts of a city's
annual remittances under the VARP. On September 20, 2011, the City and the
Agency entered into such a transfer agreement. The transfer agreement presented
to the Agency Board and City Council provides that it will only become effective on
the date that the Supreme Court lifts or modifies the stay in connection with AB X1
26 and AB X1 27 in a manner such that the prohibitions in Part 1.8 do not apply to
the Agency.
In the event that AB X1 26 is upheld and becomes applicable to the City, the
interagency receivables recognized by the General Fund and the Affordable
Housing Fund of the City that had previously advanced money to the Agency may
become uncollectable resulting in a loss recognized by the City funds.
NOTE #10 — PROPERTY TAXES
Under California law, property taxes are assessed and collected by the counties up
to one percent of assessed value, plus other increases approved by the voters.
The property taxes go into a pool, and are then allocated to the cities based on
complex formulas. Accordingly, the City accrues only those taxes, which are
received from the county within sixty days after year-end.
Lien date
Levy date
Due date
Collection dates
See independent auditors' report.
74
January 1
June 30
November 1 and February 1
December 10 and April 10
CITY OF RANCHO PALOS VERDES
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2011
NOTE #11 — DEFERRED REVENUES
The deferred revenues in the fund financial statements of the City of Rancho Palos
Verdes as of June 30, 2011 consisted of the following:
General Fund:
Accrued interest from long-term advance to the RDA
Advance on federal grant
Revenue earned but not available
Other Governmental Funds:
Long-term note receivable from AMCAL
Other long-term note receivable
Accrued interest from long-term advance to RDA
Long-term notes receivable offset (loans expended when made)
Revenue received, but not yet earned
Revenue earned, but not yet received
Total Deferred Revenues
$ 11,915,329
102,021
196,462
NOTE #12 — OTHER REQUIRED FUND DISCLOSURES
The following fund had deficit fund balance as of June 30, 2011:
Major Fund:
RDA Debt Service Fund
Other Governmental Funds:
Measure A Special Revenue Fund
$
3,467,453
126,320
57,053
703,704
1,025
160,641
16.730.008
$17,950,999
$126,396
The City plans to finance the fund deficits through future revenues and transfers
from other funds.
See independent auditors' report.
75
Whale of a Day Annual Event
76
SUPPLEMENTARY INFORMATION
77
CITY OF RANCHO PALOS VERDES
SCHEDULE OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCE - BUDGET AND ACTUAL
REDEVELOPMENT AGENCY DEBT SERVICE FUND
For the year ended June 30, 2011
REVENUES:
Taxes
EXPENDITURES:
Current:
Administration
Pass through to other agencies
Debt service:
Principal
Interest and fiscal charges
TOTAL EXPENDITURES
EXCESS (DEFICIENCY) OF REVENUES
OVER (UNDER) EXPENDITURES
FUND DEFICIT - BEGINNING OF YEAR
FUND DEFICIT - END OF YEAR
See independent auditors' report
Variance with
Final Budget
Budgeted Amounts Positive
Original Final Actual (Negative)
$ 889,200 $ 889,200 $ 897,470 $ 8,270
17,000 84,967 89,918 (4,951)
189,000 189,000 192,232 (3,232)
456,560 456,560 422,701 33,859
881,055 881,055 887,404 (6,349)
1,543,615 1,611,582 1,592,255 19,327
(654,415) (722,382) (694,785) (11,058)
(17,256,214) (17,256,214) (17,256,214)
$ (17,910,629) $ (17,978,596) $ (17,950,999) $ (11,058)
78
CITY OF RANCHO PALOS VERDES
SCHEDULE OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCE - BUDGET AND ACTUAL
CAPITAL IMPROVEMENTS CAPITAL PROJECTS FUND
For the year ended June 30, 2011
Variance with
Final Budget
Budgeted Amounts Positive
Original Final Actual (Negative)
REVENUES:
Revenue from other agencies $ 913,280 $ 2,236,000 $ 5,675 $ (2,230,325)
Use of money and property 17,400 17,400 32,483 15,083
TOTAL REVENUES 930,680 2,253,400 38,158 (2,215,243)
EXPENDITURES:
Capital Outlay
Infrastructure administration 17,600 107,821 66,546 41,275
Street improvements 2,961,600 1,946,741 1,669,283 277,458
Parks/Trails/Open Space improvements 2,524,095 555,782 552,927 2,855
Sewer improvements 96,550 96,550
TOTAL EXPENDITURES 5,503,295 2,706,894 2,385,306 321,589
EXCESS (DEFICIENCY) OF REVENUES
OVER (UNDER) EXPENDITURES (4,572,615) (453,494) (2,347,146) (1,893,654)
OTHER FINANCING SOURCES:
Transfers in 4,117,370 8,030,152 6,915,331 (1,114,821)
NET CHANGE IN FUND BALANCE (455,245) 7,576,658 4,568,183 (3,008,475)
FUND BALANCE - BEGINNING OF YEAR 7,081,597 7,081,597 7,081,597
FUND BALANCE - END OF YEAR $ 6,626,352 $ 14,658,255 $ 11,649,780 $ (3,008,475)
See independent auditors' report.
79
Beach Clean Up Day
CITY OF RANCHO PALOS VERDES
JUNE 30, 2011
NONMAJOR GOVERNMENTAL FUNDS
Special Revenues Fund Descriptions
Special Revenue Funds are used to account for taxes and other revenues set
aside in accordance with law or administrative regulation for a specific purpose.
Air Quality Management — to account for AB2766 fees received to fund programs
to reduce air pollution from motor vehicles.
Community Development Block Grant (CDBG) — to account for Federal Grants
received from the Department of Housing and Urban Development (HUD).
El Prado — to account for taxes collected to maintain and service existing and
proposed improvements to the common area of the El Prado neighborhood.
Proposition A — to account for the City share of an additional one-half percent
sales tax designated to fund certain public transportation orientated projects.
Proposition C — to account for sales taxes received from the County and used to
support public transit and related services.
Measure R — to account for the half -cent sales tax approved by the Los Angeles
County voters in November 2008 to meet transportation needs, including
maintenance and improvement of arterial streets, traffic control, bikeway and
pedestrian improvements, and public transit.
Beautification — to account for monies received for the City's recycling program
used for community improvement, grants and promotion of recycling.
Waste Reduction — to account for AB939 fees received for state mandated waste
reduction and recycling plans and programs.
Public Safety Grants — to account for federal grant funds for local law
enforcement supplemental services, AB3229 funds used for additional law
enforcement services and public safety technology equipment.
1972 Act Landscaping and Lighting District (1972 Act) — to account for revenues
and costs associated with the City's landscaping and lighting district.
1911 Act Lighting District (1911 Act) — to account for revenue and costs
associated with a lighting district transferred to the "city -side" landscape and
lighting district from the County in 1995.
81
CITY OF RANCHO PALOS VERDES
JUNE 30, 2011
NONMAJOR GOVERNMENTAL FUNDS
Special Revenues Fund Descriptions (continued)
Joint Powers Improvement Authority - Portuguese Bend — to account for
maintenance and repairs of landslide abatement improvements in the
Portuguese Bend Project area.
Habitat Restoration — to account for fees paid by developers for conservation
easements to be used exclusively for habitat restoration efforts on City owned
property.
Measure A — to account for the voter approved 1992 and 1996 Measure A funds
and other state and county grants used for the acquisition of open space and
park improvements.
Abalone Cove Sewer Assessment District — to account for property assessments
used to partially pay for operation and maintenance of the Abalone Cove sewer
system.
Dr. Allen and Charlotte Ginsburg Cultural Arts Building (Ginsburg Cultural Art
Bldg) — to account for a private donation to be used for either construction of a
building at the Upper Point Vicente Civic Center to be used for dancing and other
cultural activities, or for the purchase of open space within the City for habitat
conservation and passive recreational purposes.
Donor Restricted Contributions — to account for donations received to construct
or acquire recreational facilities within the City.
Bikeways — to account for state funds that are used for the construction of
bikeways and pedestrian facilities.
Environmental Excise Tax — to account for taxes received in connection with new
construction within the City.
Quimby — to account for developer paid fees or the dedication of land for park
and recreation purposes.
Affordable Housing — to account for developer paid in -lieu fees for the City to
construct low and moderate income housing.
82
CITY OF RANCHO PALOS VERDES
JUNE 30, 2011
NONMAJOR GOVERNMENTAL FUNDS
Capital Proiects Fund Descriptions
Capital Projects Funds are used to account for financial resources used for the
acquisition or construction of major capital facilities.
Redevelopment Aaencv - Abalone Cove — to account for monies used for
landslide abatement in the Abalone Cove area of the Redevelopment Agency
Project Area.
Redevelopment Aaencv - Portuguese Bend — to account for monies used for
landslide abatement in the Portuguese Bend area of the Redevelopment Agency
Project Area.
Permanent Fund Descriptions
Permanent Funds are used to account for resources legally restricted to the
extent that only earnings, and not principal, may be used for purposes that
support the City's programs.
Subregion One Maintenance — to account for monies used to maintain public
improvements and habitat areas dedicated to the City upon completion of the
Subregion One residential development project also known as Oceanfront
Estates. As part of the development agreement, the City received a $750,000
non -expendable deposit. The interest earnings contribute to the maintenance of
the public open space.
Joint Powers Improvement Authority - Abalone Cove — to account for monies
received as part of a July 1991 Reimbursement and Settlement Agreement with
the County of Los Angeles. As a part of this Agreement, the Authority received a
$1,000,000 non -expendable deposit. The interest earnings are used to pay for
maintenance and repair of Abalone Cove landslide abatement improvements.
83
CITY OF RANCHO PALOS VERDES
COMBINING BALANCE SHEET
OTHER GOVERNMENTAL FUNDS
June 30, 2011
Special Revenue Funds
Air
Quality
Management CDBG El Prado Proposition A Proposition C
ASSETS
Cash and investments $ 38,319 $ - $ 14,680 $ 138,676 $ 1,568,545
Receivables:
Taxes - 87
Interest 26 14 53 2,130
Notes - 448,750 -
Other 10,262 73,688 -
Prepaid items - -
Advance to other funds - -
TOTAL ASSETS S 48,607 $ 522,438 $ 14,781 $ 138,729 $ 1,570,675
LIABILITIES AND
FUND BALANCES
LIABILITIES:
Accounts payable and
accrued liabilities
Due to other funds
Deferred revenue
TOTAL LIABILITIES
FUND BALANCES:
Non -Spendable
Endowment pricipa]
Reimbursement settlement
agreement
Prepaid items
Long term advances
- $ 73,360 $ - $ 13,126
- 328 -
- 448,750 -
- 522,438 - 13,126
Habitat restoration -
Restricted 48,607 14,781 125,603 1,570,675
Committed - -
Assigned
Unassigned
TOTAL FUND
BALANCES 48,607 14,781 125,603 1,570,675
TOTAL LIABILITIES
AND FUND BALANCES $ 48,607 $ 522,438 $ 14,781 $ 138,729 $ 1,570,675
See independent auditors' report
84
Special Revenue Funds (Continued)
Public
Waste Safety
Measure R Beautification Reduction Grants 1972 Act 1911 Act
$ 629,548 $ 911,769 $ 291,220 $ $ 82,334 $ 1,685,239
- - 12,270 22,390
584 1,013 247 85 261 1,812
4,000 31,544 22,908
$ 630,132 $ 916,782 $ 323,011 $ 77,993 $ 94,865 $ 1,709,441
$ $ - $ 14,578 $
630,132
$ 828 $ 56,795
3,061
14,578 3,061 828 56,795
916,782 308,433
19,932
94,037 1,652,646
630,132 916,782 308,433 19,932 94,037 1,652,646
$ 630,132 $ 916,782 $ 323,011 $ 77,993 $ 94,865 $ 1,709,441
(Continued)
CITY OF RANCHO PALOS VERDES
COMBINING BALANCE SHEET
OTHER GOVERNMENTAL FUNDS
(CONTINUED)
June 30, 2011
Special Revenue Funds (Continued)
Joint Powers Abalone Cove Rancho
Improvement Sewer Palos
Authority Habitat Assessment Verdes
Portuguese Bend Restoration Measure A District TV Channel
ASSETS
Cash and investments $ 308,524 $ 262,770 $ 7,440 $ 100,793 $
Receivables:
Taxes - - 548
Interest - 288 26 77
Notes - - -
Other - 160,641 -
Prepaid items - - -
Advance to other funds - - -
TOTAL ASSETS $ 308,524 $ 263,058 $ 168,107 $ 101,418 $
LIABILITIES AND
FUND BALANCES
LIABILITIES:
Accounts payable and
accrued liabilities
Due to other funds
Deferred revenue
TOTAL LIABILITIES
6,194 $ $ - $ 4,740 $
- 133,862 -
- 160,641 -
6,194 294,503 4,740
FUND BALANCES:
Non -Spendable
Endowment pricipa] - - -
Reimbursement settlement
agreement - - -
Prepaid items - - -
Long term advances - - -
Habitat restoration - 43,741 - -
Restricted 302,330 219,317 - 96,678
Committed - - -
Assigned - - -
Unassigned - (126,396) -
TOTAL FUND
BALANCES 302,330 263,058 (126,396) 96,678
TOTAL LIABILITIES
AND FUND BALANCES $ 308,524 $ 263,058 $ 168,107 $ 101,418 $
See independent auditors' report
86
Special Revenue Funds (Continued;
Dr. Allen and
Charlotte Total
Ginsburg Donor Special
Cultural Restricted Environmental Affordable Revenue
Arts Building Contributions Bikeways Excise Tax Quimby Housing Funds
$ 182,764 $ 405,113 $ - $ 442,062 $ 29,298 $ 4,147 $ 7,103,241
- - - - 35,295
183 406 23 573 30 5 7,836
- - - 448,750
- 1,435 - 304,478
- - - 1,823,420 1,823,420
$ 182,947 $ 405,519 $ 1,458 $ 442,635 $ 29,328 $ 1,827,572 $ 9,723,020
$ - $ - $ 27,237 $
1,407 -
57,053
1,407 27,237
57,053
$ 196,858
138,658
666,444
1,001,960
- - - 1,766,367 1,766,367
- - - - 43,741
182,947 405,519 51 415,398 29,328 4,152 7,037,348
- - - - (126,396)
182,947 405,519 51 415,398 29,328 1,770,519 8,721,060
$ 182,947 $ 405,519 $ 1,458 $ 442,635 $ 29,328 $ 1,827,572 $ 9,723,020
(Continued)
87
CITY OF RANCHO PALOS VERDES
COMBINING BALANCE SHEET
OTHER GOVERNMENTAL FUNDS
(CONTINUED)
June 30, 2011
Capital Projects Funds
Redevelopment Redevelopment Total
Agency Agency Capital
Abalone Portuguese Utility Roadway Projects
Cove Bend Undergrounding Beautification Funds
ASSETS
Cash and investments $ 6,216 $ 309,127 $ - $ - $ 315,343
Receivables:
Taxes
Interest - - - -
Notes - 254,954 - 254,954
Other - - - -
Prepaid items - 17,976 - 17,976
Advance to other funds - - - -
TOTAL ASSETS
$ 6,216 $ 582,057 $ $ - $ 588,273
LIABILITIES AND
FUND BALANCES
LIABILITIES:
Accounts payable and
accrued liabilities $ - $ 2,445 $ $ - $ 2,445
Due to other funds - - - -
Deferred revenue - 254,954 - 254,954
TOTAL LIABILITIES - 257,399 - 257,399
FUND BALANCES:
Non -Spendable
Endowment pricipa] - - - -
Reimbursement settlement
agreement - - - -
Prepaid items - 17,976 - 17,976
Long term advances - - - -
Habitat restoration - - - -
Restricted 6,216 306,682 - 312,898
Committed - - - -
Assigned - - - -
Unassigned - - - -
TOTAL FUND
BALANCES 6,216 324,658 - 330,874
TOTAL LIABILITIES
AND FUND BALANCES $ 6,216 $ 582,057 $ S - $ 588,273
See independent auditors' report
88
Permanent Funds
Joint Powers Total
Subregion Improvement Total Other
One Authority Permanent Governmental
Maintenance Abalone Cove Funds Funds
$ 779,895 $ 1,296,212 $ 2,076,107 $ 9,494,691
- - - 35,295
790 - 790 8,626
- - - 703,704
- - - 304,478
- - - 17,976
- - - 1,823,420
$ 780,685 $ 1,296,212 $ 2,076,897 $ 12,388,190
$ 4,678 $ 3,435 $ 8,112 $ 207,416
- - - 138,658
- - - 921,398
4,678 3,435 8,112 1,267,472
750,000 - 750,000 750,000
- 1,000,000 1,000,000 1,000,000
- - - 17,976
- - - 1,766,367
- - - 43,741
26,007 292,777 318,784 7,669,030
- - - (126,396)
776,007 1,292,777 2,068,784 11,120,718
$ 780,685 $ 1,296,212 $ 2,076,897 $ 12,388,190
89
CITY OF RANCHO PALOS VERDES
COMBINING STATEMENT OF REVENUES, EXPENDITURES
AND CHANGES IN FUND BALANCES - OTHER GOVERNMENTAL FUNDS
For the year ended June 30, 2011
REVENUES:
Taxes
Revenue from other agencies
Use of money and property
Other revenues
Special Revenue Funds
Air
Quality
Management CDBG El Prado Proposition A Proposition C
$ - $ $ 1,906 $ - $ -
47,067 134,513 - 578,859 481,539
131 55 65,340 26,871
TOTAL REVENUES 47,198
134,513 1,961
644,199 508,410
EXPENDITURES:
Current:
Administration - - -
Public safety - - -
Public works 50,000 30 618,860
Community development - - -
Parks and recreation - - -
Capital outlay - 171,483 - -
TOTAL EXPENDITURES 50,000 171,483 30 618,860
EXCESS (DEFICIENCY)
OF REVENUES OVER
(UNDER) EXPENDITURES (2,802) (36,970) 1,931 25,339 508,410
OTHER FINANCING SOURCES (USES):
Transfers in - 36,970 - -
Transfers out - - (633,293)
TOTAL OTHER FINANCING
SOURCES (USES) - 36,970 - (633,293)
NET CHANGE IN
FUND BALANCES (2,802) 1,931 25,339 (124,883)
FUND BALANCES (DEFICIT) -
BEGINNING OF YEAR 51,409 12,850 100,264 1,695,558
FUND BALANCES (DEFICIT) -
END OF YEAR $ 48,607 $ $ 14,781 $ 125,603 $ 1,570,675
See independent auditors' report.
90
Special Revenue Funds (Continued)
Public
Waste Safety
Measure R Beautification Reduction Grants 1972 Act 1911 Act
$ - $ - $ - $ - $ 260,454 $ 497,743
358,897 - 69,605 100,000 - -
7,887 300,256 770,937 10,517 698 7,113
366,784 300,256 290,537 110,517 261,152 504,856
- - 25,505
76,376 159,599 - 13,860 423,695
76,376
159,599 25,505
13,860 423,695
366,784 223,880 130,938 85,012 247,292 81,161
(9,868) (165,200) (53,000) (100,000) (204,000) (67,633)
(9,868) (165,200) (53,000) (100,000) (204,000) (67,633)
356,916 58,680 77,938 (14,988) 43,292 13,528
273,216 858,102 230,495 34,920 50,745 1,639,118
$ 630,132 $ 916,782 $ 308,433 $ 19,932 $ 94,037 $ 1,652,646
(Continued)
CITY OF RANCHO PALOS VERDES
COMBINING STATEMENT OF REVENUES, EXPENDITURES
AND CHANGES IN FUND BALANCES - OTHER GOVERNMENTAL FUNDS
For the year ended June 30, 2011
REVENUES:
Taxes
Revenue from other agencies
Use of money and property
Other revenues
TOTAL REVENUES
EXPENDITURES:
Current:
Administration
Public safety
Public works
Community development
Parks and recreation
Capital outlay
Special Revenue Funds
Joint Powers
Improvement
Authority Habitat
Portuguese Bend Restoration Measure A
- $ - $
473 3,991
473 3,991
Abalone Cove Rancho
Sewer Palos
Assessment Verdes
District TV Channel
$ 49,432 $
83 262
1,181
83 50,875
82,464 126,026 - 45,240
TOTAL EXPENDITURES 82,464 126,026 - 45,240
EXCESS OF REVENUES OVER
(UNDER) EXPENDITURES (81,991) (122,035) 83 5,635
OTHER FINANCING SOURCES (USES):
Transfers in 101,000 109,900 - 32,700
Transfers out - (160,641) - (1,152)
TOTAL OTHER FINANCING
SOURCES (USES) 101,000 109,900 (160,641) 32,700 (1,152)
NET CHANGE IN
FUND BALANCES 19,009 (12,135) (160,558) 38,335 (1,152)
FUND BALANCE (DEFICIT) -
BEGINNING OFYEAR 283,321 275,193 34,162 58,343 1,152
FUND BALANCES (DEFICIT) -
END OF YEAR $ 302,330 $ 263,058 $ (126,396) $ 96,678 $
See independent auditors' report.
92
Special Revenue Funds (Continued)
Dr. Allen and
Charlotte Total
Ginsburg Donor Special
Cultural Restricted Environmental Affordable Revenue
Arts Building Contributions Bikeways Excise Tax Quimby Housing Funds
$ - $ $ $ - $ - $ - $ 809,535
17,223 - - 1,787,703
791 1,681 9,801 2,745 123 15 659,765
27,384 - 28,565
791 1,681 27,024 30,129 123 15 3,285,568
- - 25,505
212,682 - 1,808,832
- 2,889 2,889
20,000 - - 20,000
- - 171,483
20,000 212,682 2,889 2,028,709
(19,209) 1,681 27,024 (182,553) 123 (2,874) 1,256,859
- - 280,570
(26,973) (86,300) - (1,508,060)
(26,973) (86,300) - (1,227,490)
(19,209) 1,681 51 (268,853) 123 (2,874) 29,369
202,156 403,838 684,251 29,205 1,773,393 8,691,691
$ 182,947 $ 405,519 $ 51 $ 415,398 $ 29,328 $ 1,770,519 $ 8,721,060
(Continued)
93
CITY OF RANCHO PALOS VERDES
COMBINING STATEMENT OF REVENUES, EXPENDITURES
AND CHANGES IN FUND BALANCES - OTHER GOVERNMENTAL FUNDS
(CONTINUED)
For the year ended June 30, 2011
Redevelopment
Agency
Abalone
Cove
REVENUES:
Taxes
Revenue from other agencies
Use of money and property
Other revenues
TOTAL REVENUES
EXPENDITURES:
Current:
Administration
Public safety
Public works
Community development
Parks and recreation
Capital outlay
TOTAL EXPENDITURES
EXCESS OF REVENUES OVER
(UNDER) EXPENDITURES
OTHER FINANCING SOURCES (USES):
Transfers in
Transfers out
TOTAL OTHER FINANCING
SOURCES (USES)
NET CHANGE IN
FUND BALANCES
FUND BALANCES (DEFICIT) -
BEGINNING OF YEAR
FUND BALANCES (DEFICIT) -
END OF YEAR $
See independent auditors' report.
13
13
13
13
6,203
6,216 $
94
Capital Projects Funds
Redevelopment
Agency
Portuguese
Bend
Total
Capital
Utility Roadway Projects
Undergrounding Beautification Funds
- $ - $
896
50,004
50,900
292,046
292,046
(241,146)
(241,146)
565,804
324,658 $
909
50,004
50,913
292,046
292,046
(241,133)
(275,159) (102,068) (377,227)
(275,159) (102,068) (377,227)
(275,159) (102,068) (618,360)
275,159 102,068 949,234
- $ $ 330,874
Pennanent Funds
Joint Powers Total
Subregion Improvement Total Other
One Authority Permanent Governmental
Maintenance Abalone Cove Funds Funds
$ - $ - $ - $ 809,535
- - 1,787,703
3,197 2,578 5,775 666,447
- - 78,569
3,197 2,578 5,775 3,342,256
43,024
71,110 43,024
- 25,505
114,134 2,2 15,012
- 2,889
- 20,000
- 171,483
114,134 2,434,889
(67,913) (40,446) (108,359) 907,367
70,000 70,000 350,570
- - (1,885,287)
70,000 70,000 (1,534,717)
2,087 (40,446) (38,359) (627,350)
773,920 1,333,223 2,107,143 11,748,068
$ 776,007 $ 1,292,777 $ 2,068,784 $ 11,120,718
95
CITY OF RANCHO PALOS VERDES
SCHEDULE OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCE - BUDGET AND ACTUAL
AIR QUALITY MANAGEMENT SPECIAL REVENUE FUND
For the year ended June 30, 2011
Budgeted Amounts
Original Final
Actual
Variance with
Final Budget
Positive
(Negative)
REVENUES:
Revenue from other agencies $ 49,800 $ 49,800 $ 47,067 $ (2,733)
Use of money and property 270 270 131 (139)
TOTAL REVENUES 50,070 50,070 47,198 (2,872)
EXPENDITURES:
Public works 50,000 50,000 50,000
EXCESS (DEFICIENCY) OF REVENUES
OVER (UNDER) EXPENDITURES 70 70 (2,802) (2,872)
FUND BALANCE - BEGINNING OF YEAF 51,409 51,409 51,409 -
FUND BALANCE - END OF YEAR $ 51,479 $ 51,479 $ 48,607 $ (2,872)
See independent auditors' report.
96
CITY OF RANCHO PALOS VERDES
SCHEDULE OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCE - BUDGET AND ACTUAL
COMMUNITY DEVELOPMENT BLOCK GRANT SPECIAL REVENUE FUND
For the year ended June 30, 2011
REVENUES:
Revenue from other agencies
EXPENDITURES:
Capital outlay
EXCESS (DEFICIENCY) OF REVENUES
OVER (UNDER) EXPENDITURES
OTHER FINANCING USES,
Transfers in
Transfers out
NET CHANGE IN FUND BALANCE
FUND BALANCE - BEGINNING OF YEAF
FUND BALANCE - END OF YEAR
See independent auditors' report.
Variance with
Final Budget
Budgeted Amounts Positive
Original Final Actual (Negative)
$ 244,994 $ 244,994 $ 134,513 $ (110,481)
262,146 262,146 171,483 90,663
(17,152) (17,152) (36,970) (19,818)
44,000 36,970 (7,030)
(26,848) - -
(44,000) 26,848 (26,848)
$ (44,000) $ 26,848 $ $ (26,848)
97
CITY OF RANCHO PALOS VERDES
SCHEDULE OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCE - BUDGET AND ACTUAL
EL PRADO SPECIAL REVENUE FUND
For the year ended June 30, 2011
Variance with
Final Budget
Budgeted Amounts Positive
Original Final Actual (Negative)
REVENUES:
Taxes $ 1,910 $ 1,910 $ 1,906 $ (4)
Use of money and property 10 10 55 45
TOTAL REVENUES 1,920 1,920 1,961 42
EXPENDITURES:
Public works 1,000 1,000 30 970
EXCESS (DEFICIENCY) OF REVENUES
OVER (UNDER) EXPENDITURES 920 920 1,931 1,012
FUND BALANCE - BEGINNING OF YEAR 12,850 12,850 12,850 -
FUND BALANCE - END OF YEAR $ 13,770 $ 13,770 $ 14,781 $ 1,012
See independent auditors' report
98
CITY OF RANCHO PALOS VERDES
SCHEDULE OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCE - BUDGET AND ACTUAL
PROPOSITION A SPECIAL REVENUE FUND
For the year ended June 30, 2011
Budgeted Amounts
Original Final
Actual
Variance with
Final Budget
Positive
(Negative)
REVENUES:
Revenue from other agencies $ 576,854 $ 576,854 $ 578,859 $ 2,005
Use of money and property 360 65,360 65,340 (20)
TOTAL REVENUES 577,214 642,214 644,199 1,985
EXPENDITURES:
Public works 706,000 686,508 618,860 67,648
EXCESS (DEFICIENCY) OF REVENUES
OVER (UNDER) EXPENDITURES (128,786) (44,294) 25,339 69,633
OTHER FINANCING USES:
Transfers in 60,000 60,000 - (60,000)
NET CHANGE IN FUND BALANCE (68,786) 15,706 25,339 9,633
FUND BALANCE - BEGINNING OF YEAR 100,264 100,264 100,264 -
FUND BALANCE - END OF YEAR $ 31,478 $ 115,970 $ 125,603 $ 9,633
See independent auditors' report
99
CITY OF RANCHO PALOS VERDES
SCHEDULE OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCE - BUDGET AND ACTUAL
PROPOSITION C SPECIAL REVENUE FUND
For the year ended June 30, 2011
REVENUES:
Revenue from other agencies
Use of money and property
TOTAL REVENUES
Budgeted Amounts
Original Final
Actual
Variance with
Final Budget
Positive
(Negative)
$ 478,485 $ 478,485 $ 481,539 $ 3,054
6,520 24,520 26,871 2,351
485,005 503,005 508,410 5,405
OTHER FINANCING USES:
Transfers out (500,300) (633,293) (633,293)
NET CHANGE IN FUND BALANCE (15,295) (130,288) (124,883) 5,405
FUND BALANCE - BEGINNING OF YEAR 1,695,558 1,695,558 1,695,558 -
FUND BALANCE - END OF YEAR $ 1,680,263 $ 1,565,270 $ 1,570,675 $ 5,405
See independent auditors' report
100
CITY OF RANCHO PALOS VERDES
SCHEDULE OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCE - BUDGET AND ACTUAL
MEASURE R SPECIAL REVENUE FUND
For the year ended June 30, 2011
Variance with
Final Budget
Budgeted Amounts Positive
Original Final Actual (Negative)
REVENUES:
Revenue from other agencies $ 358,865 $ 358,865 $ 358,897 $ 32
Use of money and property - 6,000 7,887 1,887
TOTAL REVENUES 358,865 364,865 366,784 1,920
OTHER FINANCING USES:
Transfers out - (638,080) (9,868) 628,212
NET CHANGE IN FUND BALANCE 358,865 (273,215) 356,916 630,132
FUND BALANCE - BEGINNING OF YEAR 273,216 273,216 273,216 -
FUND BALANCE - END OF YEAR $ 632,081 $ 1 $ 630,132 $ 630,132
See independent auditors' report
101
CITY OF RANCHO PALOS VERDES
SCHEDULE OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCE - BUDGET AND ACTUAL
BEAUTIFICATION SPECIAL REVENUE FUND
For the year ended June 30, 2011
Budgeted Amounts
Original Final
Actual
Variance with
Final Budget
Positive
(Negative)
REVENUES:
Other revenues $ - $ - $ - $ -
Use of money and property 299,110 299,110 300,256 1,146
TOTAL REVENUES 299,110 299,110 300,256 1,146
EXPENDITURES:
Public works
EXCESS (DEFICIENCY) OF REVENUES
OVER (UNDER) EXPENDITURES
96,814 96,814 76,376 20,438
202,296 202,296 223,880 21,584
OTHER FINANCING USES:
Transfers out (415,200) (665,700) (165,200) 500,500
NET CHANGE IN FUND BALANCE (212,904) (463,404) 58,680 522,084
FUND BALANCE - BEGINNING OF YEAR 858,102 858,102 858,102 -
FUND BALANCE - END OF YEAR $ 645,198 $ 394,698 $ 916,782 $ 522,084
See independent auditors' report
102
CITY OF RANCHO PALOS VERDES
SCHEDULE OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCE - BUDGET AND ACTUAL
WASTE REDUCTION SPECIAL REVENUE FUND
For the year ended June 30, 2011
Variance with
Final Budget
Budgeted Amounts Positive
Original Final Actual (Negative)
REVENUES:
Revenue from other agencie $ 25,000 $ 47,500 $ 69,605 $ 22,105
Use of money and property 155,620 155,620 220,932 65,312
TOTAL REVENUES 180,620 203,120 290,537 87,417
EXPENDITURES:
Public works
EXCESS (DEFICIENCY) OF REVENUES
OVER (UNDER) EXPENDITURES
163,939 186,439 159,599 26,840
16,681 16,681 130,938 114,257
OTHER FINANCING USES:
Transfers out (12,000) (53,000) (53,000) -
NET CHANGE IN FUND BALANCE 4,681 (36,319) 77,938 114,257
FUND BALANCE - BEGINNING OF YEAR 230,495 230,495 230,495 -
FUND BALANCE - END OF YEAR $ 235,176 $ 194,176 $ 308,433 $ 114,257
See independent auditors' report
103
CITY OF RANCHO PALOS VERDES
SCHEDULE OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCE - BUDGET AND ACTUAL
PUBLIC SAFETY GRANTS SPECIAL REVENUE FUND
For the year ended June 30, 2011
REVENUES:
Revenue from other agencies
Use of money and property
TOTAL REVENUES
EXPENDITURES:
Public safety
EXCESS (DEFICIENCY) OF REVENUES
OVER (UNDER) EXPENDITURES
Budgeted Amounts
Original Final
Actual
Variance with
Final Budget
Positive
(Negative)
$ 100,000 $ 100,000 $ 100,000 $
10,517
100,000 100,000 110,517
- 25,505 25,505
100,000 74,495 85,012
10,517
10,517
0
10,518
OTHER FINANCING USES:
Transfers out (100,000) (100,000) (100,000) -
NET CHANGE IN FUND BALANCE - (25,505) (14,988) 10,518
FUND BALANCE - BEGINNING OF YEAR 34,920 34,920 34,920 -
FUND BALANCE - END OF YEAR $ 34,920 $ 9,415 $ 19,932 $ 10,518
See independent auditors' report
104
CITY OF RANCHO PALOS VERDES
SCHEDULE OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCE - BUDGET AND ACTUAL
1972 ACT SPECIAL REVENUE FUND
For the year ended June 30, 2011
Budgeted Amounts
Original Final
Actual
Variance with
Final Budget
Positive
(Negative)
REVENUES:
Taxes $ 258,687 $ 258,687 $ 260,454 $ 1,767
Use of money and property 240 240 698 458
TOTAL REVENUES 258,927 258,927 261,152 2,224
EXPENDITURES:
Public works
EXCESS (DEFICIENCY) OF REVENUES
OVER (UNDER) EXPENDITURES
70,300 70,300 13,860 56,440
188,627 188,627 247,292 58,665
OTHER FINANCING USES:
Transfers out (204,000) (204,000) (204,000) -
NET CHANGE IN FUND BALANCE (15,373) (15,373) 43,292 58,665
FUND BALANCE - BEGINNING OF YEAR 50,745 50,745 50,745 -
FUND BALANCE - END OF YEAR $ 35,372 $ 35,372 $ 94,037 $ 58,665
See independent auditors' report
105
CITY OF RANCHO PALOS VERDES
SCHEDULE OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCE - BUDGET AND ACTUAL
1911 ACT SPECIAL REVENUE FUND
For the year ended June 30, 2011
Budgeted Amounts
Original Final
Actual
Variance with
Final Budget
Positive
(Negative)
REVENUES:
Taxes $ 492,800 $ 492,800 $ 497,743 $ 4,943
Use of money and property 7,800 7,800 7,113 (687)
TOTAL REVENUES 500,600 500,600 504,856 4,256
EXPENDITURES:
Public works
EXCESS (DEFICIENCY) OF REVENUES
OVER (UNDER) EXPENDITURES
506,900 506,900 423,695 83,205
(6,300) (6,300) 81,161 87,462
OTHER FINANCING USES:
Transfers out (104,100) (104,100) (67,633) 36,467
NET CHANGE IN FUND BALANCE (110,400) (110,400) 13,528 123,929
FUND BALANCE - BEGINNING OF YEAR 1,639,118 1,639,118 1,639,118 -
FUND BALANCE - END OF YEAR $ 1,528,718 $ 1,528,718 $ 1,652,646 $ 123,929
See independent auditors' report
106
CITY OF RANCHO PALOS VERDES
SCHEDULE OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCE - BUDGET AND ACTUAL
JOINT POWERS IMPROVEMENT AUTHORITY PORTUGUSE BEND SPECIAL REVENUE FUND
For the year ended June 30, 2011
Variance with
Final Budget
Budgeted Amounts Positive
Original Final Actual (Negative)
REVENUES:
Use of money and property $ 1,030 $ 1,030 $ 473 $ (557)
EXPENDITURES:
Public works 141,700 141,700 82,464 59,236
EXCESS (DEFICIENCY) OF REVENUES
OVER(UNDER)EXPENDITURES (140,670) (140,670) (81,991) 58,679
OTHER FINANCING SOURCES:
Transfers in 101,000 101,000 101,000 -
NET CHANGE IN FUND BALANCE (39,670) (39,670) 19,009 58,679
FUND BALANCE - BEGINNING OF YEAR 283,321 283,321 283,321 -
FUND BALANCE - END OF YEAR $ 243,651 $ 243,651 $ 302,330 $ 58,679
See independent auditors' report
107
CITY OF RANCHO PALOS VERDES
SCHEDULE OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCE - BUDGET AND ACTUAL
HABITAT RESTORATION SPECIAL REVENUE FUND
For the year ended June 30, 2011
Variance with
Final Budget
Budgeted Amounts Positive
Original Final Actual (Negative)
REVENUES:
Use of money and property $ 1,010 $ 1,010 $ 3,991 $ 2,981
EXPENDITURES:
Public works 126,411 126,411 126,026 385
EXCESS (DEFICIENCY) OF REVENUES
OVER (UNDER) EXPENDITURES (125,401) (125,401) (122,035) 2,596
OTHER FINANCING SOURCES:
Transfers in 109,900 109,900 109,900 -
NET CHANGE IN FUND BALANCE (15,501) (15,501) (12,135) 2,596
FUND BALANCE - BEGINNING OF YEAR 275,193 275,193 275,193 -
FUND BALANCE - END OF YEAR $ 259,692 $ 259,692 $ 263,058 $ 2,596
See independent auditors' report
108
CITY OF RANCHO PALOS VERDES
SCHEDULE OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCE - BUDGET AND ACTUAL
MEASURE A SPECIAL REVENUE FUND
For the year ended June 30, 2011
Variance with
Final Budget
Budgeted Amounts Positive
Original Final Actual (Negative)
REVENUES:
Revenue from other agencies $ 151,000 $ 160,641 $ - $ (160,641)
Use of money and property 170 170 83 (87)
TOTAL REVENUES 151,170 160,811 83 (160,728)
OTHER FINANCING USES:
Transfers out (151,000) (160,641) (160,641) -
NET CHANGE IN FUND BALANCE 170 170 (160,558) (160,728)
FUND BALANCE - BEGINNING OF YEAR 34,162 34,162 34,162 -
FUND BALANCE (DEFICIT) - END OF YEAR $ 34,332 $ 34,332 $ (126,396) $ (160,728)
See independent auditors' report
109
CITY OF RANCHO PALOS VERDES
SCHEDULE OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCE - BUDGET AND ACTUAL
ABALONE COVE SEWER ASSESSMENT DISTRICT SPECIAL REVENUE FUND
For the year ended June 30, 2011
Budgeted Amounts
Original Final
Actual
Variance with
Final Budget
Positive
(Negative)
REVENUES:
Taxes $ 46,560 $ 46,560 $ 49,432 $ 2,872
Other revenues - - 1,181 1,181
Use of money and property 280 280 262 (18)
TOTAL REVENUES 46,840 46,840 50,875 4,035
EXPENDITURES:
Public works
EXCESS (DEFICIENCY) OF REVENUES
OVER (UNDER) EXPENDITURES
63,206 63,206 45,240 17,966
(16,366) (16,366) 5,635 (13,931)
OTHER FINANCING SOURCES:
Transfers in 10,700 32,700 32,700 -
NET CHANGE IN FUND BALANCE (5,666) 16,334 38,335 (13,931)
FUND BALANCE - BEGINNING OF YEAR 58,343 58,343 58,343 -
FUND BALANCE - END OF YEAR $ 52,677 $ 74,677 $ 96,678 $ (13,931)
See independent auditors' report
110
CITY OF RANCHO PALOS VERDES
SCHEDULE OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCE - BUDGET AND ACTUAL
DR. ALLEN AND CHARLOTTE GINSBURG CULTURAL ARTS BUILDING SPECIAL REVENUE FUND
For the year ended June 30, 2011
REVENUES:
Use of money and property
TOTAL REVENUES
EXPENDITURES:
Park and recreation
EXCESS (DEFICIENCY) OF REVENUES
OVER (UNDER) EXPENDITURES
FUND BALANCE - BEGINNING OF YEAR
FUND BALANCE - END OF YEAR
See independent auditors' report
Budgeted Amounts
Original Final
Actual
Variance with
Final Budget
Positive
(Negative)
$ 1,040 $ 1,040 $ 791 $ (249)
1,040 1,040 791 (249)
20,000 20,000 -
1,040 (18,960) (19,209) (249)
202,156 202,156 202,156 -
$ 203,196 $ 183,196 $ 182,947 $ (249)
111
CITY OF RANCHO PALOS VERDES
SCHEDULE OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCE - BUDGET AND ACTUAL
DONOR RESTRICTED CONTRIBUTIONS SPECIAL REVENUE FUND
For the year ended June 30, 2011
REVENUES:
Use of money and property
FUND BALANCE - BEGINNING OF YEAR
FUND BALANCE - END OF YEAR
See independent auditors' report.
Variance with
Final Budget
Budgeted Amounts Positive
Original Final Actual (Negative)
$ 10 $ 10 $ 1,681 $ 1,671
403,838 403,838 403,838 -
$ 403,848 $ 403,848 $ 405,519 $ 1,671
112
CITY OF RANCHO PALOS VERDES
SCHEDULE OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCE - BUDGET AND ACTUAL
BIKEWAYS SPECIAL REVENUE FUND
For the year ended June 30, 2011
Variance with
Final Budget
Budgeted Amounts Positive
Original Final Actual (Negative)
REVENUES:
Revenue from other agencies $ 17,223 $ 17,223 $ 17,223 $ -
Use of money and property - 9,750 9,801 51
TOTAL REVENUES 17,223 26,973 27,024 51
OTHER FINANCING USES:
Transfers out (17,223) (26,973) (26,973)
NET CHANGE IN FUND BALANCE - - 51 51
FUND BALANCE - BEGINNING OF YEAR - - - -
FUND BALANCE - END OF YEAR $ - $ - $ 51 $ 51
See independent auditors' report
113
CITY OF RANCHO PALOS VERDES
SCHEDULE OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCE - BUDGET AND ACTUAL
ENVIRONMENTAL EXCISE TAX SPECIAL REVENUE FUND
For the year ended June 30, 2011
Variance with
Final Budget
Budgeted Amounts Positive
Original Final Actual (Negative)
REVENUES:
Other revenues $ 38,600 $ 38,600 $ 27,384 $ (11,216)
Use of money and property 200 200 2,745 2,545
TOTAL REVENUES 38,800 38,800 30,129 (8,671)
EXPENDITURES:
Public works - 554,675 212,682 341,993
EXCESS (DEFICIENCY) OF REVENUES
OVER (UNDER) EXPENDITURES 38,800 (515,875) (182,553) 333,322
OTHER FINANCING USES:
Transfers out (40,000) (86,300) (86,300) -
NET CHANGE IN FUND BALANCE (1,200) (602,175) (268,853) 333,322
FUND BALANCE - BEGINNING OF YEAR 684,251 684,251 684,251 -
FUND BALANCE - END OF YEAR $ 683,051 $ 82,076 $ 415,398 $ 333,322
See independent auditors' report
114
CITY OF RANCHO PALOS VERDES
SCHEDULE OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCE - BUDGET AND ACTUAL
QUIMBY SPECIAL REVENUE FUND
For the year ended June 30, 2011
Variance with
Final Budget
Budgeted Amounts Positive
Original Final Actual (Negative)
REVENUES:
Other revenues $ - $ - $ - $ -
Useof money and property 130 130 123 (7)
TOTAL REVENUES 130 130 123 (7)
FUND BALANCE - BEGINNING OF YEAR 29,205 29,205 29,205 -
FUND BALANCE - END OF YEAR $ 29,335 $ 29,335 $ 29,328 $ (7)
See independent auditors' report
115
CITY OF RANCHO PALOS VERDES
SCHEDULE OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCE - BUDGET AND ACTUAL
AFFORDABLE HOUSING SPECIAL REVENUE FUND
For the year ended June 30, 2011
REVENUES:
Use of money and property
EXPENDITURES:
Community development
EXCESS (DEFICIENCY) OF REVENUES
OVER (UNDER) EXPENDITURES
FUND BALANCE - BEGINNING OF YEAR
FUND BALANCE - END OF YEAR
See independent auditors' report
Variance with
Final Budget
Budgeted Amounts Positive
Original Final Actual (Negative)
$ 40 $ 40 $ 15 $ (25)
5,000 2,889 2,111
40 (4,960) (2,874) 2,086
1,773,393 1,773,393 1,773,393 -
$ 1,773,433 $ 1,768,433 $ 1,770,519 $ 2,086
116
CITY OF RANCHO PALOS VERDES
SCHEDULE OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCE - BUDGET AND ACTUAL
REDEVELOPMENT AGENCY ABALONE COVE CAPITAL PROJECTS FUND
For the year ended June 30, 2011
REVENUES:
Use of money and property
FUND BALANCE - BEGINNING OF YEAR
FUND BALANCE - END OF YEAR
See independent auditors' report
Variance with
Final Budget
Budgeted Amounts Positive
Original Final Actual (Negative)
$ 30 $ 30 $ 13 $ (17)
6,203 6,203 6,203 -
$ 6,233 $ 6,233 $ 6,216 $ (17)
117
CITY OF RANCHO PALOS VERDES
SCHEDULE OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCE - BUDGET AND ACTUAL
REDEVELOPMENT AGENCY PORTUGUESE BEND CAPITAL PROJECTS FUND
For the year ended June 30, 2011
Budgeted Amounts
Original Final
Actual
Variance with
Final Budget
Positive
(Negative)
REVENUES:
Other revenues - - 50,004 50,004
Use of money and property $ 1,520 $ 1,520 $ 896 $ (624)
TOTAL REVENUES 1,520 1,520 50,900 49,380
EXPENDITURES:
Public works 31,366 296,213 292,046 4,167
EXCESS (DEFICIENCY) OF REVENUES
OVER (UNDER) EXPENDITURES (29,846) (294,693) (241,146) 53,547
FUND BALANCE - BEGINNING OF YEAR 565,804 565,804 565,804 -
FUND BALANCE - END OF YEAR $ 535,958 $ 271,111 $ 324,658 $ 53,547
See independent auditors' report
118
CITY OF RANCHO PALOS VERDES
SCHEDULE OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCE - BUDGET AND ACTUAL
SUBREGION ONE MAINTENANCE PERMANENT FUND
For the year ended June 30, 2011
Budgeted Amounts
Original Final
Actual
Variance with
Final Budget
Positive
(Negative)
REVENUES:
Use of money and property $ 3,800 $ 3,800 $ 3,197 $ (603)
EXPENDITURES:
Public works 79,000 79,000 71,110 7,890
EXCESS (DEFICIENCY) OF REVENUES
OVER (UNDER) EXPENDITURES (75,200) (75,200) (67,913) 7,287
OTHER FINANCING SOURCES:
Transfers in 70,000 70,000 70,000 -
NET CHANGE IN FUND BALANCE (5,200) (5,200) 2,087 7,287
FUND BALANCE - BEGINNING OF YEAR 773,920 773,920 773,920 -
FUND BALANCE - END OF YEAR $ 768,720 $ 768,720 $ 776,007 $ 7,287
See independent auditors' report
119
CITY OF RANCHO PALOS VERDES
SCHEDULE OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCE - BUDGET AND ACTUAL
JOINT POWERS IMPROVEMENT AUTHORITY ABALONE COVE PERMANENT FUND
For the year ended June 30, 2011
REVENUES:
Use of money and property
EXPENDITURES:
Public works
EXCESS (DEFICIENCY) OF REVENUES
OVER (UNDER) EXPENDITURES
FUND BALANCE - BEGINNING OF YEAR
FUND BALANCE - END OF YEAR
See independent auditors' report
Variance with
Final Budget
Budgeted Amounts Positive
Original Final Actual (Negative)
$ 6,500 $ 6,500 $ 2,578 $ (3,922)
109,490 109,490 43,024 66,466
(102,990) (102,990) (40,446) 62,544
1,333,223 1,333,223 1,333,223 -
$ 1,230,233 $ 1,230,233 $ 1,292,777 $ 62,544
120
CITY OF RANCHO PALOS VERDES
JUNE 30, 2011
INTERNAL SERVICE FUNDS DESCRIPTIONS
The Internal Service Funds are used to finance and account for goods and
services provided by one City department to other City departments on a cost -
reimbursement basis, including depreciation.
Equipment Replacement — to account for purchases, replacement and
maintenance of certain equipment items on behalf of all City departments.
Building Replacement — to account for the accumulation of funds transferred from
the General Fund for replacement of certain buildings on behalf of the City.
Employee Benefits — to account for employee benefit costs for all employees
charged to various City departments.
121
CITY OF RANCHO PALOS VERDES
COMBINING STATEMENT OF NET ASSETS
INTERNAL SERVICE FUNDS
June 30, 2011
ASSETS
Equipment Building Employee
Replacement Replacement Benefits
Totals
CURRENT ASSETS:
Cash and investments $ 2,640,080 $ 995,626 $ 411,089 $ 4,046,795
Receivables:
Interest 2,696 1,015 800 4,511
Prepaid items - 262,084 262,084
TOTAL CURRENT ASSETS 2,642,776 996,641 673,973 4,313,390
NONCURRENT ASSETS:
Capital assets:
Property and equipment 1,468,875 - - 1,468,875
Accumulated depreciation (1,215,176) - - (1,215,176)
TOTAL NONCURRENT ASSETS 253,699 - - 253,699
TOTAL ASSETS 2,896,475 996,641 673,973 4,567,089
LIABILITIES
CURRENT LIABILITIES:
Accounts payable and accrued liabilities 41,748 5,318 223,622 270,688
NET ASSETS
Invested in capital assets 253,699 - - 253,699
Unrestricted 2,601,028 991,323 450,351 4,042,702
TOTAL NET ASSETS
See independent auditors' report.
$ 2,854,727 $ 991,323 $ 450,351 $ 4,296,401
122
CITY OF RANCHO PALOS VERDES
COMBINING STATEMENT OF REVENUES, EXPENSES
AND CHANGES IN NET ASSETS - INTERNAL SERVICE FUNDS
For the year ended June 30, 2011
Equipment Building Employee
Replacement Replacement Benefits Totals
OPERATING REVENUES:
Charges for services $ 59,100 $ - $ 1,795,348 $ 1,854,448
OPERATING EXPENSES:
Personnel services - 1,704,755 1,704,755
Materials and supplies 128,908 - 128,908
Maintenance 56,876 211,315 268,191
Depreciation 121,887 - 121,887
TOTAL OPERATING EXPENSES 307,671 211,315 1,704,755 2,223,741
OPERATING INCOME / (LOSS) (248,571) (211,315) 90,593 (369,293)
NONOPERATING REVENUES:
Other revenues 10,100 156,094 166,194
Investment income 11,404 4,226 812 16,441
TOTAL NONOPERATING REVENUES 21,504 160,320 812 182,635
CHANGE IN NET ASSETS (227,067) (50,995) 91,404 (186,658)
TOTAL NET ASSETS - BEGINNING OF YEAR 3,081,794 1,042,318 358,947 4,483,059
TOTAL NET ASSETS - END OF YEAR $ 2,854,727 $ 991,323 $ 450,351 $ 4,296,401
See independent auditors' report.
123
CITY OF RANCHO PALOS VERDES
COMBINING STATEMENT OF CASH FLOWS
INTERNAL SERVICE FUNDS
For the year ended June 30, 2011
Equipment Building Employee
Replacement Replacement Benefits
Totals
CASH FLOWS FROM OPERATING ACTIVITIES:
Receipts from i nterhund services provided $ 59,100 $ - $ 1,795,348 $ 1,854,448
Payments to suppliers (186,700) (298,808) (485,508)
Payments to employees - - (1,656,215) (1,656,215)
NET CASH PROVIDED / (USED)
BY OPERATING ACTIVITIES
CASH FLOWS FROM CAPITAL AND
RELATED FINANCING ACTIVITIES:
Acquisition and construction of capital assets
(127,600) (298,808) 139,133 (287,275)
(112,239) - (112,239)
CASH FLOWS FROM NONCAPITAL
FINANCING ACTIVITIES:
Grants received - 156,094 156,094
CASH FLOWS FROM INVESTING ACTIVITIES:
Interest and dividends 21,995 4,476 166 26,637
NET INCREASE (DECREASE) IN
CASH AND CASH EQUIVALENTS (217,844) (138,238) 139,299 (216,784)
CASH AND CASH EQUIVALENTS -
BEGINNING OF YEAR 2,857,924 1,133,864 271,790 4,263,578
CASH AND CASH EQUIVALENTS -
END OF YEAR $ 2,640,080 $ 995,626 $ 411,089 $ 4,046,794
RECONCILIATION OF OPERATING LOSS
TO NET CASH USED
BY OPERATING ACTIVITIES:
Operating income / (loss) $ (248,571) $ (211,315) $ 90,593 $ (369,293)
Adjustments to reconcile operating loss to
net cash used by operating activities:
Depreciation 121,887 - 121,887
Changes in operating assets and liabilities:
decrease in prepaid items - - (140,217) (140,217)
hncrease (decrease) in accrued liabilities (916) (87,493) 188,757 100,348
NET CASH USED
BY OPERATING ACTIVITIES $ (127,600) $ (298,808) $ 139,133 $ (287,275)
See independent auditors' report.
STATISTICAL SECTION
125
Pitch Hit & Run
STATISTICAL SECTION
This part of the City of Rancho Palos Verdes' 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 city's overall financial health.
Contents Page
Financial Trends
These schedules contain trend information to help the reader understand how the City's
financial pei formance and well-being have changed over time.
Revenue Capacity
These schedules contain information to help the reader assess the City's most significant
local revenue source, property tax.
Debt Capacity
These schedules present information to help the reader assess the affordability of the
City's current levels of outstanding debt and the city's ability to issue additional debt in
the future. The City does not have general bond indebtedness or debt issued with pledged
revenue.
Demographic and Economic Information
These schedules offer demographic and economic indicators to help the reader understand
the environment within which the City's financial activities take place.
Operating Information
These schedules contain services and infrastructure data to help the reader understand
how the information in the City's financial report relates to the services the City provides
and the activities it peiforms.
128
136
140
143
146
Sources: Unless otherwise noted, the information in these schedules is derived from the comprehensive annual
financial reports for the relevant year.
127
City of Rancho Palos Verdes
Net Assets by Component
Last Ten Fiscal Years
(accrual basis of accounting)
(amounts expressed in thousands)
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
Governmental activities
Invested in capital assets, net of related debt $ 93,636 $ 94,895 $ 92,499 $ 94,023 $ 109,991 $ 109,746 $ 109,376 $ 107,867 $ 115,331 $ 115,145
Restricted 10,327 1 0,66 1 11,586 12,075 12,417 12,163 1,000 1,000 1,000 1,750
Unrestricted 13,666 13,004 14,271 15,659 16,024 17,823 30,471 31,277 31,855 35,376
Total governmental activities net assets $ 117,629 $ 118,560 $ 1 18,356 $ 121,757 $ 138,432 $ 139,732 $ 140,847 $ 140,144 $ 148,186 $ 152,271
Business -type activities
Invested in capital assets, net of related debt $ $ - $ - $ - $ 1,311 $ 2,158 $ 5,599 $ 12,477 $ 12,458 $ 12,753
Restricted - - - - - -
Unrestricted - - 2,000 2,799 5,258 7,740 2,108 2,825 3,365
Total business -type activities net assets $ $ - $ - $ 2,000 $ 4,110 $ 7,416 $ 13,339 $ 14,585 $ 15,283 $ 16,118
Primary government
Invested in capital assets, net of related debt $ 93,636 $ 94,895 $ 92,499 $ 94,023 $ 1 1 1,302 $ 111,904 $ 114,975 $ 120,344 $ 127,789 $ 127,898
Restricted 10,327 10,661 11,586 12,075 12,417 12,163 1,000 1,000 1,000 1,750
Unrestricted 13,666 13,004 14,271 17,659 18,823 23,081 38,211 33,385 34,680 38,741
Total primary government net assets $ 117,629 $ 118,560 $ 118,356 $ 123,757 $ 142,542 $ 147,148 $ 154,186 $ 154,729 $ 163,469 $ 168,389
128
City of Rancho Palos Verdes
Changes in Net Assets
Last Ten Fiscal Years
(accrual basis of accounting)
(amounts expressed in thousands)
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
Expenses
Governmental activities:
Administration $ 3,069 $ 3,294 $ 3,499 $ 4,055 $ 4,350 $ 4,953 $ 4,724 $ 6,357 $ 7,824 $ 5,997
Public safety 2,898 3,094 3,024 3,079 3,437 3,751 4,044 4,233 4,242 4,335
Public works 7,283 7,954 7,462 9,488 9,290 9,969 9,026 10,555 13,633 10,389
Parks and recreation 687 809 948 1,065 1,659 1,439 1,396 1,605 1,826 1,391
Community development 1,916 2,170 2,296 2,223 2,060 2,631 2,441 2,697 2,550 2,622
Non -departmental - - - - - - - 320 -
Interest on long-term debt 273 273 273 272 270 271 270 268 265 260
Total governmental activities expenses 16,126 17,594 17,502 20,182 21,066 23,014 21,901 25,715 30,660 24,994
Business -type activities:
Water Quality Flood Protection - - - 47 271 301 437 580 489
Total primary government expenses $ 16,126 $ 17,594 $ 17,502 $ 20,182 $ 21,113 $ 23,285 $ 22,202 $ 26,152 $ 31,240 $ 25,483
Program Revenues
Governmental activities:
Charges for services:
Administration $ 157 $ 87 $ 69 $ 62 $ 35 $ 29 $ 538 $ 555 $ 681 $ 654
Public safety 433 235 165 163 224 332 316 267 229 261
Public works 78 252 217 131 37 185 1,002 422 1,356 622
Parks and recreation 10 8 6 41 45 51 483 483 896 457
Community development 979 1,202 1,363 1,188 1,319 1,599 1,760 1,643 1,764 1,714
Operating grants and contributions 6,877 2,971 2,836 2,728 3,894 4,200 3,570 2,963 6,633 3,689
Capital grants and contributions 706 131 37 4,524 17,299 317 1,472 642 7,179 5
Total governmental activities program revenues 9,240 4,886 4,693 8,837 22,853 6,713 9,141 6,975 18,738 7,402
Business -type activities:
Charges for services:
Water Quality Flood Protection - - - - - - -
Operating grants and contributions - - - - - - -
Capital grants and contributions - - - - - - -
Total business -type activities program revenues
Total primary government program revenues $ 9,240 $ 4,886 $ 4,693 $ 8,837 $ 22,853 $ 6,713 $ 9,141 $ 6,975 $ 18,738 $ 7,402
Net (expense)/revenue
Governmental activities $ (6,886) $ (12,708) $ (12,809) $ (11,345) $ 1,787 $ (16,301) $ (12,760) $ (18,740) $ (11,922) $ (17,592)
Business -type activities - - - - (47) (271) (301) (437) (580) (489)
Total primary government net expense $ (6,886) $ (12,708) $ (12,809) $ (11,345) $ 1,740 $ (16,572) $ (13,061) $ (19,177) $ (12,502) $ (18,081)
129
City of Rancho Palos Verdes
Changes in Net Assets
Last Ten Fiscal Years
(accrual basis of accounting)
(amounts expressed in thousands)
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
General Revenues and Other Changes in Net Assets
Governmental activities:
Taxes
Property taxes $ 5,253 $ 5,335 $ 5,706 $ 5,840 $ 9,621 $ 10,235 $ 10,935 $ 11,462 $ 11,431 $ 11,854
Franchise taxes 1,139 1,087 1,275 1,307 1,454 1,512 1,599 1,709 1,711 1,825
Sales taxes 1,093 1,003 1,205 1,276 1,214 1,381 1,056 1,053 1,246 1,548
Utility user taxes 1,812 1,832 1,851 1,901 2,191 2,271 2,329 2,267 2,395 2,407
Other taxes 2,744 3,495 2,867 4,545 727 363 820 690 2,667 3,454
Investment income 814 371 331 594 997 1,615 1,555 631 207 318
Other (67) 517 2,481 1,283 793 2,101 300 225 307 271
Transfers - - - (2,000) (2,109) (2,017) (4,719) - -
Total governmental activities 12,788 13,640 15,716 14,746 14,888 17,461 13,875 18,037 19,964 21,677
Business -type activities:
Investment income - - - 48 51 283 105 14 13
User Fees - - - - 1,188 1,222 1,578 1,264 1,312
Other - - - - 320 - -
Transfers - - - 2,000 2,109 2,017 4,719 -
Total business -type activities - - - 2,000 2,157 3,576 6,224 1,683 1,278 1,325
Total primary government $ 12,788 $ 13,640 $ 15,716 $ 16,746 $ 17,045 $ 21,037 $ 20,099 $ 19,720 $ 21,242 $ 23,002
Change in Net Assets
Governmental activities $ 5,902 $ 932 $ 2,907 $ 3,401 $ 16,675 $ 1,160 $ 1,115 $ (703) $ 8,042 $ 4,085
Business -type activities - - - 2,000 2,110 3,305 5,923 1,246 698 836
Total primary government net expense $ 5,902 $ 932 $ 2,907 $ 5,401 $ 18,785 $ 4,465 $ 7,038 $ 543 $ 8,740 $ 4,921
130
Fiscal Property
Year Tax
2002 $ 5,253
2003 5,335
2004 5,706
2005 5,840
2006 9,621
2007 10,235
2008 10,935
2009 11,462
2010 11,431
2011 11,854
City of Rancho Palos Verdes
Governmental Activities Tax Revenues By Source
Last Ten Fiscal Years
(accrual basis of accounting)
(amounts expressed in thousands)
Utility
Franchise Sales Users Other
Tax Tax Tax Taxes Total
$ 1,139 $ 1,093 $ 1,812 $ 2,744 $ 12,041
1,087 1,003 1,832 3,495 12,752
1,275 1,205 1,851 2,867 12,904
1,307 1,276 1,901 4,545 14,869
1,454 1,214 2,191 727 1 15,207
1,512 1,381 2,271 363 15,762
1,599 1,056 2,329 820 16,739
1,709 1,053 2,267 690 17,181
1,711 1,246 2,395 2,667 19,450
1,825 1,548 2,407 3,454 21,088
1: Most of the Motor Vehicle In Lieu Tax is received as Property Tax beginning in 2006.
131
City of Rancho Palos Verdes
Fund Balances of Governmental Funds
Last Nine Fiscal Years - Before GASB 54
(modified accrual basis of accounting)
(amounts expressed in thousands)
2002 2003 2004 2005 2006 2007 2008 2009 2010
General Fund
Reserved $ 6,571 $ 6,854 $ 6,639 $ 6,021 $ 6,165 $ 6,586 $ 6,645 $ 6,314 $ 7,166
Designated - - 675 876 786 1,278 1,333 1,462
Unreserved, Undesignated 7,234 9,607 14,066 14,209 13,649 14,376 12,171 10,440 10,745
Total General Fund $ 13,805 $ 16,461 $ 20,705 $ 20,905 $ 20,690 $ 21,748 $ 20,094 $ 18,087 $ 19,373
All other Governmental Funds
Reserved $ 11,256 $ 7,584 $ 7,229 $ 3,147 $ 3,315 $ 2,396 $ 2,724 $ 3,672 $ 6,361
Designated
Special Revenue Funds - - 615 744 1,849 1,896 411 85
Capital Projects Funds - - 2,416 2,799 3,158 4,347 6,442 7,494
Permanent Fund - - 75 65 - - -
Debt Service Fund - - - - - - -
Unreserved, Undesignated, reported in:
Special Revenue Funds 4,753 5,012 5,040 5,902 6,615 6,426 7,494 7,910 6,058
Capital Projects Funds 332 534 2,430 3,320 2,077 1,869 1,908 3,373 1,240
Permanent Fund 443 460 418 426 329 325 371 362 333
Debt Service Fund (10,477) (10,915) (12,070) (12,793) (13,741) (14,873) (15,990) (16,823) (17,797)
Total all other Governmental Funds $ 6,307 $ 2,675 $ 3,047 $ 3,033 $ 2,213 $ 1,215 $ 2,750 $ 5,347 $ 3,774
2011
General Fund
Non -Spendable $ 7,515
Restricted -
Committed -
Assigned -
U nassighed 11,385
Total General Fund 8 18,900
All other Governmental Funds
Non -Spendable
Special Revenue Funds $ 4,818
Debt Service Fund 573
Capital Projects Funds -
Pennanent Fund 1,750
Restricted
Special Revenue Funds 7,952
Debt Service Fund -
Capital Projects Funds 313
Pennanent Fund 319
Committed
Special Revenue Funds -
Debt Service Fund -
Capital Projects Funds -
Permanent Fund -
Assigned
Special Revenue Funds -
Debt Service Fund -
Capital Projects Funds 11,650
Permanent Fund -
Unassighed
Special Revenue Funds (126)
Debt Service Fund (19,687)
Capital Projects Funds -
Permanent Fund -
Total all other Governmental Funds 8 7,562
City of Rancho Palos Verdes
Fund Balances of Governmental Funds
Current One Fiscal Years - After GASB 54
(modified accrual basis of accounting)
(amounts expressed in thousands)
133
City of Rancho Palos Verdes
Changes in Fund Balances of Governmental Funds
Last Ten Fiscal Years
(Modified Accrual basis of Accounting)
(Amounts expressed in thousands)
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
Revenues
Taxes S 10,677 S 11,046 S 12,081 S 13,573 S 15,238 S 16,453 S 17,062 S 17,573 S 19,844 S 21,419
Licenses and permits 1,245 1,463 1,310 1,326 1,440 1,763 1,914 1,755 1,954 1,933
Fines and forfeitures 117 115 102 108 171 237 260 214 179 210
Use of money and property 1,153 804 733 1,306 7,038 3,480 2,108 1,240 1,601 1,560
Charges for services 217 205 379 152 49 61 60 163 81 73
Revenues from other agencies 8,170 4,318 3,453 7,848 15,511 4,118 4,647 3,575 10,180 3,162
Other Revenues 563 554 2,363 1,038 155 201 1,563 467 4,806 229
Total Revenues 22,142 18,505 20,421 25,351 39,602 26,313 27,614 24,987 38,645 28,586
Expenditures
Administration 2,915 3,092 3,328 3,852 4,041 4,607 4,411 4,915 5,720 5,503
Public Safety 2,898 3,094 3,039 3,092 3,438 3,751 4,044 4,233 4,242 4,335
Public Works 7,449 5,292 4,801 6,302 5,277 6,864 5,768 7,075 6,896 7,875
Parks and Recreation 669 786 946 965 1,593 1,319 1,281 1,354 1,702 1,257
Community Development 1,950 2,194 2,362 2,302 2,361 2,681 2,496 2,723 2,604 2,784
Non -Departmental - - - - - - - - 320 -
Pass Through to other agencies 102 137 156 188 200 152 169 187 -
Capital Outlay 8,246 3,893 368 4,912 20,202 3,124 3,112 2,459 14,567 2,557
Debt Service
Principal - 184 200 248 316 350 419 423
Interest 930 836 805 905 1,150 1,390 1,370 1,101 886 887
Total Expenditures 25,159 19,324 15,805 22,702 38,462 24,136 22,967 24,397 37,356 25,621
Excess of Revenues over (under) Expenditures (3,017) (819) 4,616 2,649 1,140 2,177 4,647 590 1,289 2,965
Other Financing Sources (uses)
Sales of capital assets - - - - 350
Transfers in 4,294 1,676 1,844 6,180 4,989 4,489 3,158 5,815 4,616 8,944
Transfers out (4,877) (1,833) (1,844) (8,180) (7,247) (6,606) (7,924) (5,815) (6,192) (8,944)
Bond Proceeds - - - - -
Advances to the Redevelopment Agency - - - - - - -
Total Other Financing Sources (uses) (583) (157) - (2,000) (2,258) (2,117) (4,766) - (1,576) 350
Net change in Fund Balances $ (3,600) $ (976) $ 4,616 $ 649 $ (1,118) $ 60 $ (119) $ 590 $ (287) $ 3,315
Cost of Assets Capitalized
Debt Services as a percentage of Non -Capital Expenditures
11,047 4,184 379 4,623 19,465 2,800 2,764 1,895 10,866 3,180
6.6% 5.5% 5.2% 6.0% 7.1% 7.7% 8.3% 6.4% 4.9% 5.8%
134
Fiscal Property
Year Tax
2002 4,972
2003 5,335
2004 5,706
2005 8,494
2006 9,576
2007 10,385
2008 10,898
2009 11,462
2010 11,431
2011 11,854
City of Rancho Palos Verdes
General Governmental Tax Revenues By Source
Last Ten Fiscal Years
(Modified Accrual Basis of Accounting)
(Amounts expressed in thousands)
Utility
Franchise Sales Users Other
Tax Tax Tax Taxes Total
1,139 1,093 1,812 1,661 10,677
1,087 1,003 1,832 1,789 11,046
1,275 1,205 1,851 2,044 12,081
1,307 1,009 1,901 862 13,573
1,299 995 2,191 1,177 15,238
1,511 1,020 2,272 1,265 16,453
1,599 1,077 2,329 1,159 17,062
1,709 1,060 2,267 1,075 17,573
1,711 1,158 2,395 3,149 19,844
1,825 1,518 2,407 3,815 21,419
Source: City General Ledger
1: Most of the Motor Vehicle In Lieu Fees are received as property tax beginning in 2006.
135
City of Rancho Palos Verdes
Assessed Value and Estimated Actual Value of Taxable Property
Last Ten Fiscal Years
(In thousands of dollars)
Total Estimated Assessed
Fiscal Less Taxable Direct Actual Factor of Value as a
Year Residential Commercial Industrial Other Unsecured Tax -Exempt Assessed Tax Taxable Taxable Percentage of
End Property Property Property Property Property Property Value Rate (1) Value (2) Assessed Value (3) Actual Value
2002 $ 5,410,470 $ 73,923 $ - $ 197,904 $ 19,641 $ 71,660 $ 5,701,938 0.07869 $ 7,588,424 1.33085 75.14%
2003 5,730,464 70,475 - 191,541 21,741 73,768 6,014,221 0.07317 8,004,026 1.33085 75.14%
2004 6,137,760 74,753 1,660 179,867 22,889 73,701 6,416,930 0.07897 8,539,971 1.33085 75.14%
2005 * 6,530,448 76,445 1,691 317,463 22,222 218,193 6,730,076 0.06400 8,956,722 1.33085 75.14%
2006 * 7,034,406 88,691 3,086 365,175 21,561 218,916 7,294,003 0.06400 9,707,224 1.33085 75.14%
2007 7,548,956 111,338 3,148 513,876 20,378 226,598 7,971,098 0.06370 10,608,336 1.33085 75.14%
2008 7,919,953 170,149 3,211 453,446 26,546 151,225 8,422,080 0.07930 11,208,525 1.33085 75.14%
2009 8,235,780 270,956 3,275 491,235 46,858 154,969 8,893,135 0.07960 11,835,429 1.33085 75.14%
2010 8,333,042 263,157 3,341 598,539 49,628 236,925 9,010,782 0.06370 9,515,593 1.05602 94.69%
2011 8,362,052 396,195 3,333 570,551 45,258 158,388 9,219,001 0.06370 9,067,313 0.98355 101.67%
Source: 2010-11 County Assessor data, MuniServices, LLC
*Assessed values have been revised from prior CAFR publications to comply with GASB No. 44 standards and on-going consistency in reporting methodologies.
(1) Total Direct Tax Rate is represented by TRA 001-224. This percentage is City's shared portion within 1% of County's general levy.
(2) Estimated Actual Value is derived from a series of calculations comparing median assessed values from 1940 to current median sale prices.
Based on these calculations a factor was extrapolated and applied to current assessed values.
(3) The Factor used to calculate Estimated Actual Value was calculated for 2006-07 and applied to prior years for historical purposes.
136
Basic City and County Levy
CITY DIRECT RATE
COUNTY DIRECT RATE
TOTAL
Override Assessments
COUNTY
UNIFIED SCHOOLS
COMMNTY COLLEGE
PALOS VERDES LIB
FLOOD CONTROL
METRO WATER DIST
TOTAL
TOTAL TAX RATE
City of Rancho Palos Verdes
Direct and Overlapping Property Tax Rates
Last Ten Fiscal Years
2001-02 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08
0.07869 0.07317 0.07897 0.06400 0.06400 0.06370 0.07930
0.92131 0.92683 0.92103 0.93600 0.93600 0.93630 0.92070
2008-09 2009-10 2010-11
0.07960 0.06370 0.06370
0.92040 0.93630 0.93630
1.000000 1.000000 1.000000 1.000000 1.000000 1.000000 1.000000 1.000000 1.000000 1.000000
0.001130
0.063610
0.016000
0.009590
0.001070
0.007700
0.001030
0.052060
0.014600
0.009700
0.000880
0.006700
0.000990
0.091910
0.019860
0.008960
0.000470
0.006100
0.000920
0.103820
0.018100
0.008520
0.000240
0.005800
0.000800
0.103840
0.014300
0.007810
0.000050
0.005200
0.000600
0.106800
0.021400
0.007300
0.000000
0.004700
0.000000
0.143100
0.008780
0.013 700
0.000000
0.004500
0.000000
0.145000
0.022120
0.006800
0.000000
0.004300
0.000000
0.151809
0.023112
0.006618
0.000000
0.004300
0.000000
0.186954
0.040310
0.006719
0.000000
0.003 700
0.099100 0.084970 0.128290 0.137400 0.132000 0.140800 0.170080 0.178220 0.185839 0.237683
1.099100 1.084970 1.128290 1.13 7400 1.132000 1.140800 1.170080 1.178220 1.185839 1.23 7683
Source: 2009-10 & 2006-07 County Auditor/Controller data, MuniServices, LLC
Los Angeles County Auditor/Controller TRA 001-224
1. City has no separate debt service rate, direct rate is 100% operating.
2. In 1978, California voters passed Proposition 13 which set the property tax at a 1.00% fixed amount. This 1.00% is shared
by all the taxing agencies for which the subject property resides within. In addition to 1.00% fixed amount, property owners
are charged taxes as a percentage of assessed property values for the payment of any voter approved bonds.
137
City of Rancho Palos Verdes
Principal Property Tax Pavers
Last Fiscal Year and Nine Years Ago
2010-11 2001-02
Percentage of Percentage of
Taxable Total City Taxable Taxable Total City Taxable
Taxpayer Value ($) Rank Value (%) Value ($) Rank Value (%)
Long Point Development LLC $ 329,854,761 1 3.58%
VHPS LLC $ 65,196,557 3 0.71%
PPC Villas RPV LLC 63,710,973 3 0.69%
PV Victoria Apartments LLC 46,703,821 4 0.51%
Terraces Rancho Palos Verdes LLC 35,148,602 5 0.38%
Western Riviera Investors 28,468,344 6 0.31%
PPC Palos Verdes LLC 25,972,775 7 0.28%
Golden Cove LLC 25,948,345 8 0.28%
COX Communication Inc. Orange 23,912,452 9 0.26%
Belmont Village PRV LP 22,232,551 10 0.24%
Johnson Eric C 18,233,759 11 0.20%
Tridiamond LLC 13,311,514 12 0.14%
York Point View Properties LLC 9,577,246 13 0.10%
Kariger Brian P 8,330,210 14 0.09%
Victoria Apartments 7,763,471 15 0.08%
Palos Verdes Terrace Ltd 7,605,139 16 0.08%
Ruffin Phillip G 7,575,000 17 0.08%
Saitta Christopher L 6,557,865 18 0.07%
Amdan Investment LLC Lessee 6,550,000 19 0.07%
Gerts Igor & Anna 6,458,000 20 0.07%
Labarba James G 6,087,262 21 0.07%
Imbach Scott A & Diane Y 5,977,923 23 0.06%
Clow Leland E Ilene F 5,836,697 23 0.06%
HSU Tong H 5,822,885 24 0.06%
500 Silver Spur Rd LLC 5,590,000 25 0.06%
Ocean Trails LP 57,333,287 1 1.02%
P V Victoria Apartments LLC 40,015,225 2 0.71%
Connecticut General Life 27,538,295 3 0.49%
RPV Associates LLC 25,690,073 4 0.46%
Western Riviera Investors 24,367,914 5 0.44%
York Long Point Associates 21,578,933 6 0.39%
o
P V Terraces Inc. 16,595,400 7 0.30%
Gardner Theodore II 13,438,441 8 0.24%
o
Salvation Army 11,314,664 9 0.20%
MVI Corp 8,070,240 10 0.14%
o
Braun William 6,720,000 11 0.12%
Victoria Apartments 6,653,137 12 0.12%
o
Donahue Schriber Realty Group 5,826,240 13 0.10%
o
LA Barba James G Co TR 5,214,572 14 0.09%
o
Foster Robert D & Gina D 4,723,236 15 0.08°,1,
Briles Richard & Keanna 4,590,000 16 0.08°0
Bradford Edward T & Paullee G 4,447,436 17 0.08%
Moshfeghi Mehran 4,268,000 18 0.08%
Levine Irving 4,073,397 19 0.07%
Archdiocese of L A EDUC 3,998,204 20 0.07%
Marino Joseph C & Kimberly 3,860,000 21 0.07%
Hill John W Elizabeth d TRS 3,758,891 32 0.07%
Pemba Properties INC 3,751,407 23 0.07%
Michigami Michael M & Sharon W 3,665,000 24 0.07%
Palos Verdes Office Partners L 3,621,000 25 0.06%
Totals $ 788,426,152 8.55% $ 315,112,992 5.63%
Total Taxable Value $ 9,219,001,000
Source: Los Angeles County Assessor data, Muni Services, LLC
138
100.00% $ 5,596,637,882 100.00%
City of Rancho Palos Verdes
Property Tax Levies and Collections
Last Six Fiscal Years
(amounts expressed in thousands)
Collected within the
Total Tax Fiscal Year of the Levy Total Collections to Date
Fiscal Levy for Percentage Collections in Percentage
Year Fiscal Year Amount of Levy Subsequent Years Amount of Levy
2005 $ 4,284 $ 4,001 93.40% $ 144 $ 4,145 96.76%
2006 4,643 4,506 97.06% 36 4,542 97.83%
2007 5,078 4,799 94.51% 10 4,809 94.70%
2008 5,351 5,316 99.35% 10 5,327 99.55%
2009 6,116 5,734 93.76% 8 5,742 93.88%
2010* 5,447 4,917 90.27% 8 4,925 90.42%
2011* 5,597 5,462 97.59% 8 5,470 97.73%
Source: County Assessor Data and City General Ledger
* Includes 1% secured apportionment only
The detailed information presented in this table was not obtained by the City for fiscal years prior to 2005, and
is therefore unavailable.
139
Fiscal
Year
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
City of Rancho Palos Verdes
Ratios of Outstanding Debt by Type
Last Ten Fiscal Years
(Amounts expressed in thousands, except per capita amount)
Governmental Activities
RDA
Tax Increment
Bond
5,455
5,455
5,455
5,450
5,435
5,410
5,370
5,315
5,250
5,165
Source: City Financial Records
RDA
Deferred Interest
Payable
3,111
3,111
3,111
2,469
2,284
2,061
1,786
1,491
1,136
798
Total
Primary
Government
8,566
8,566
8,566
7,919
7,719
7,471
7,156
6,806
6,386
5,963
140
Debt
Per
Capita
203.94
202.40
200.09
181.94
179.55
173.37
166.56
159.32
149.76
142.77
Ratio of Debt
to Property
Value
0.11%
0.11%
0.10%
0.09%
0.08%
0.07%
0.06%
0.06%
0.07%
0.07%
Ratio of Debt
to Personal
Total Income
0.0004405%
0.0004372%
0.0004322%
0.0003567%
0.0003520%
0.0003399%
0.0003008%
0.0002838%
0.0002458%
City of Rancho Palos Verdes
Direct and Overlapping Governmental Activities Debt
Current Year
DIRECT AND OVERLAPPING TAX AND ASSESSMENT DEBT:
Los Angeles County Flood Control District
Metropolitan Water District
Los Angeles Community College District
Los Angeles Unified School District
Palos Verdes Unified School District
City of Rancho Palos Verdes
Palos Verdes Library District
Los Angeles County Regional Park and Open Space Assessment District
TOTAL DIRECT AND OVERLAPPING TAX AND ASSESSMENT DEBT
OVERLAPPING GENERAL FUND DEBT:
Los Angeles County General Fund Obligations
Los Angeles County Superintendent of Schools Certificates of Participation
Los Angeles County Sanitation District No. 5 Authority
Los Angeles County South Bay Cities Sanitation District Authority
Los Angeles Unified School District Certificates of Participation
TOTAL GROSS OVERLAPPING GENERAL FUND DEBT
Less: Los Angeles County General Fund Obligations supported by landfill revenues
Los Angeles Unified School District QZABs supported by investment fund
TOTAL NET OVERLAPPING GENERAL FUND DEBT
Total Debt City's Share of
6/30/2011 % Applicable (1) Debt 6/30/11
$53,795,000 1.030% $554,089
227,670,000 0.515% 1,172,501
3,536,745,000 1.775% 62,777,224
11,596,250,000 0.213% 24,700,013
80,877,350 47.510% 38,424,829
0.000%
6,520,000 50.084%
197,285,000 1.005%
$1,496,977,755
12,204,890
54,005,754
9,201,462
492,042,567
1.005%
1.005%
11.038%
4.486%
0.213%
GROSS COMBINED TOTAL DEBT
NET COMBINED TOTAL DEBT
3,265,477
1,982,714
132,876,847
$15,044,626
122,659
5,961,155
412,778
1.048.051
$22,589,269
178,944
70,192
22,340,133
$155,466,116 (2)
$155,216,980
(1) Percentage of overlapping agency's assessed valuation located within boundaries of the city.
(2) Excludes tax and revenue anticipation notes, revenue, mortgage revenue and tax allocation bonds and non -bonded capital lease obligations.
2010-11 Assessed Valuation:
Redevelopment Incremental Valuation:
Adjusted Assessed Valuation:
Ratios to 2010-11 Assessed Valuation:
Direct Debt
Total Direct and Overlapping Tax and Assessment Debt
Ratios to Adiusted Assessed Valuation:
Gross Combined Total Debt
Net Combined Total Debt
STATE SCHOOL BUILDING AID REPAYABLE AS OF 6/30/11:
Source: 2010-11 California Municipal Statistical Co.
141
9,296,593,686
114.791.856
$9,181,801,830
0.00%
1.43%
1.69%
1.69%
$0
City of Rancho Palos Verdes
Legal Debt Margin Information
Last Ten Fiscal Years
(Amounts expressed in thousands)
Fiscal Year
2002 2003 2004 2005 2006
2007 2008 2009 2010 2011
Debt Limit $ 855,291 $ 902,133 $ 962,539 $ 1,021,177 $ 1,105,647 $ 1,195,665 $ 1,274,916 $ 1,345,594 $ 1,351,617 $1,382,850
Total Net Debt applicable to limit - - - - - - - - - -
Legal Debt Margin $ 855,291 $ 902,133 $ 962,539 $ 1,021,177 $ 1,105,647 $ 1,195,665 $ 1,274,916 $ 1,345,594 $ 1,351,617 $1,382,850
Total Net Debt applicable to the limit
as a percentage of Debt Limit 0% 0% 0% 0% 0% 0% 0% 0% 0% 0%
Total Taxable Value (see page 133) $9,219,001
Debt Limit (15% of total taxable value)
Debt applicable to limit
Legal Debt Margin
142
1,382,850
$1,382,850
City of Rancho Palos Verdes
Demographic and Economic Statistics
Last Ten Fiscal Years
Per Capita **Public County City City
Fiscal Personal Personal Median School Unemployment Unemployment County Population
Year Population (1) Income (2) Income (2) Age (4) Enrollment Rate ("/%) (3) Rate ("/%) (3) Population (1) ("/% of County)
2001-02 42,002 1,944,440,588 46.294 44.7 - - - -
2002-03 42,322 1,959,254,668 46.294 44.7 - - - - -
2003-04 42,810 1,981,846,140 46.294 44.7 - - - -
2004-05 43,525 2,219,905,575 51.003 43.4 - - 1.50% - -
2005-06 42,991 2,192,669,973 51.003 43.4 - - 1.50% -
2006-07 43,092 2,197,821,276 51.003 43.4 - - 1.50% - -
2007-08 42,964 - - - - - - -
2008-09 42,720 2,262,493,920 52.961 43.4 12,033 7.50% 2.50% 10,301,658 0.41%
2009-10 42,642 2,250,346,266 52.773 44.9 11,900 11.60% 4.00% 10,355,053 0.41%
2010-11 41,766 2,425,936,344 58.084 44.3 11,928 11.90% 4.10% 9,858,989 0.42%
Source: 2010-11 MuniServices, LLC
1.) Population Projections are provided by the California Department of Finance Projections.
2.) Income Data is provided by the US Census Bureau.
3.) Unemployment Data is provided by the EDD's Bureau of Labor Statistics Department.
**Student Enrollment reflects the total number of students enrolled in the Palos Verdes Unified
School District. Other school districts within the City are not included.
The California Department of Finance demographics estimates now incorporate 2010 Census
counts as the benchmark. Therefore, the estimates for 2010 and 2011 published in this report
mizht be noticeably different from the previous year estimates
143
2010-11
Taxpayer
7 -Eleven Food Stores
Admiral Risty Restaurant
Ainerica's Tire
Asaka Japanese Cuisine
Carl's Jr. Restaurant
Centinela Feed & Pet Supplies Inc
Chevron Service Stations
Coco's Restaurants, Inc.
Daniel J Jeldum
Denny's Restaurant
El Pollo Loco Inc.
Good Night Mattress
Green Hills Memorial Park,Inc.
Green Hills Mrtury-Melnrl.Chapel
Hughes Markets
Kragen Auto Parts# 1649
Los Verdes Country Club
Marshalls #1026
Mobil Service Stations
Rolling Hills Plastics, Inc
Smart & Final # 306
Swank Audio Visuals
Terranea Resort
Trader Joe's
VH Property Corp.
City of Rancho Palos Verdes
Principal Sales Tax Payers
Last Fiscal Year and Nine Years Ago
Business Type
Food Markets
Restaurants
Auto Parts/Repair
Restaurants
Restaurants
Miscellaneous Retail
Service Stations
Restaurants
Miscellaneous Retail
Restaurants
Restaurants
Furniture/Appliance
Miscellaneous Other
Miscellaneous Other
Food Markets
Auto Parts/Repair
Restaurants
Apparel Stores
Service Stations
Light Industry
Food Markets
Office Equipment
Restaurants
Food Markets
Miscellaneous Retail
Source: SBOE data, MuniServices, LLC
Top Sales Tax Producers listed in alphabetical order.
144
2001-02
Taxpayer
Admiral Risty Restaurant
Albertson's Food Centers
America's Tire
California Do It Center
Carls Jr Restaurant
Chevron Service Stations
Cocos Restaurants Inc
Discount Tire
El Pollo Loco Inc
Fedex Office
Golden Cove Unocal 76 Svc Stn
Golden Lotus Restaurant
Green Hills Memorial Park Inc
Green Hills Mrtury-Memrl.Chapel
Hughes Markets
Jack In The Box
Kragen Auto Parts
Los Verdes Country Club
Marie Callender Restaurant
Mobil Service Stations
New York Food & Catering
Ocean Trails Golf Club
Salvation Anny
The Brixey Corporation
Trader Joe's
Business Type
Restaurants
Food Markets
Auto Parts/Repair
Bldg.Matls-Retail
Restaurant
Service Stations
Restaurants
Auto Parts/Repair
Restaurant
Miscellaneous Retail
Service Stations
Restaurants
Miscellaneous Other
Miscellaneous Other
Food Markets
Restaurant
Auto Parts/Repair
Restaurants
Restaurants
Service Stations
Restaurants
Restaurants
Furniture/Appliance
Office Equipment
Food Markets
City of Rancho Palos Verdes
Principal Employers
Current Year and Three Years Ago
2011 2008
Percentage Percentage
of Total City of Total City
Employer Employees Rank Employment Employees Rank Employment
Palos Verdes Peninsula Unified School District (I) 1,970 1 9.75%
Terranea Resort Hotel 730 2 3.61%
Trump National 300 3 1.49%
Marymount College 195 4 0.97%
Ralphs 115 5 0.57%
Keller Williams Realty 112 6 0.55%
Belmontcorp Ltd 94 7 0.47%
Green Hills Memorial Park 85 8 0.42%
American Golf Corp 70 9 0.35%
Trader Joe's 54 10 0.27%
Palos Verdes Peninsula Unified School District (I) 1970 1 9.00%
Trump National 300 2 1.37%
Marymount College 195 3 0.89%
Ralphs 115 4 0.53%
Keller Williams Realty 112 5 0.51%
Belmontcorp Ltd 94 6 0.43%
Green Hills Memorial Park 85 7 0.39%
American Golf Corp 70 8 0.32%
St. John Fishers 50 9 0.23%
Bally Total Fitness Corp 50 10 0.23%
Subtotal of Principal Employers 3,725 18.44% 3,041 13.89%
Total City Employment (2) 20,200 21,900
Source: Direct Contact with Local Businesses.
1: The number shown represents the total employee count for the entire District. The District does not
track employees by location.
2: Total City Employment provided by EDD Labor Force Data.
Note: There is currently no agency or service that monitors employees by business located
within City limits. All available information is for the greater Los Angeles area. The City is
primarily a bedroom community with very little commercial activity. Data was obtained by
making inquiries with the Community Development Department and the City Manager's office
to determine the entities that are likely the largest employers. Then those likely employers
were contacted directly to determine the number of employees. This data is not available prior
to 2007.
145
City of Rancho Palos Verdes
Full-time Equivalent City Government Employees by Function
Last Ten Fiscal Years
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
Function
General Government 42 45 45 45 47 50 55 58 53 54
Recreation Part -Time 10 10 10 10 10 10 10 11 19 18
Total 52 55 55 55 57 60 65 69 72 72
Source: City Budget documents and Payroll records
146
City of Rancho Palos Verdes
Operating Indicators by Function
Last Ten Fiscal Years
Fiscal Year
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
Function
Administration
Employee Resignations 4 5 4 4 4 8 4 9 5
Workers Compensation Claims 3 2 2 3 4 2 4 2 5 3
Liability Claims 14 14 14 18 31 14 16 13 13 14
Budget Adjustments 35 30 27 36 48 32 26 18 21 17
Business Licenses issued 1,600 1,961 2,102 1,909 1,801 1,837 1,709 1,819 1,629 1,891
Web Site Page Views 88,888 119,104 133,481 224,777 1.3 niil 1.6 niil 701,004 3.8 niil 2.9 niil 2.8mil
Public Safety
Part 1 Crime Rates (per 10,000 population) 138 122 122 101 120 139 123 102 110 110
Public Works
Solid Waste Diversion Rates (1) 51% 57% 61% 59% 55% 56% 4.7lbs/person/day 4.1 lbs/person/day 4.2lbs/person/day 4.2lbs/person/day
Pavement Rating 80 80 89 89 82 82 DNA 84.5 84.5 84.5
Parks and Recreation
Park Events 1,022 915 825 780 937 770 692 825 690 580
Class Meetings at Parks 1,774 2,134 2,935 2,893 2,856 2,647 2,772 2,708 2,398 2,313
Docent Led Nature Hikes 54 45 80 65 62 98 91 105 103 105
Community Development
Building Permits Processed 1,264 1,327 1,399 1,233 1,382 1,244 1,692 1,404 1,243 1,432
Plan Checks 121 150 186 208 163 164 247 226 154 161
Municipal Code Violations Closed 138 203 214 180 159 162 216 339 138 371
Source: City Departments
DNA: Data Not Available
(1): A new system of measuring AB939 compliance was implemented in 2008 with the passage of SB 1016. This changed the previous diversion calculation method to the new disposal -based indicator - the
per capita disposal rate. The per capita disposal target is based on the average of 50 percent of generation in 2003 through 2006, expressed in terms of per capital disposal.
147
City of Rancho Palos Verdes
Capital Asset Statistics by Function
Last Ten Fiscal Years
Fiscal Year
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
Function
Administration
Computer Workstations DNA DNA DNA 81 81 85 91 92 101 92
Public Safety (1)
Public Works
Street Miles 143 143 143 143 143 143 143 143 143 143
Traffic Signals 14 15 15 15 15 15 16 16 16 16
Parks and Recreation
Parks 15 15 15 15 16 16 16 16 15 15
Community Development
Vehicles Used for Inspections
3 3 3 3 3 3 5 5 5 5
Source: City Capital Asset Records
DNA: Data Not Available
(1): Public safety services are contracted with other agencies. The City does not own any public safety capital assets.
148