CAFR FY 2004-05 CITY OF PALOS
COMPREHENSIVE
ANNUAL FINANCIAL REPORT
FISCALYEARENDED
JUNE30, 2005
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CITY OF RANCHO PALOS VERDES,
CALIFORNIA
COMPREHENSIVE
ANNUAL FINANCIAL REPORT
For the Year Ended June 30, 2005
Prepared By:
Finance Department
Dennis McLean, Director of Finance & Information Technology
Kathryn Downs, Deputy Director of Finance & Information Technology
Cover photo of Founders Park courtesy of Ms. Karen Peterson
INTRODUCTORY SECTION
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photoPoint Vicente courtesy of D. . Stem
CITY OF RANCHO PALOS VERDES
COMPREHENSIVE ANNUAL FINANCIAL REPORT
FOR THE YEAR ENDED JUNE 30, 2005
TABLE OF CONTENTS
INTRODUCTORY SECTION:
Table of Contents i-iii
Letter of Transmittal iv-xi
Directory of City Officials xii
Organization Chart xiii
GFOA Certificate of Achievement for Excellence in Financial Reporting xiv
FINANCIAL SECTION:
Independent Auditor's Report 1
Management Discussion and Analysis 3
Government-Wide Financial Statements
Statement of Net Assets 11
Statement of Activities 12
Fund Financial Statements
Governmental Funds
Balance Sheet 14
Reconciliation of the Balance Sheet of Governmental Funds
to the Statement of Net Assets 16
Statement of Revenues, Expenditures, and Changes in Fund Balances 17
Reconciliation of the Statement of Revenues, Expenditures, and Changes
in Fund Balances to the Statement of Activities 19
General Fund
Statement of Revenues, Expenditures, and Changes in Fund Balance
- Budget and Actual 20
Street Maintenance Special Revenue Fund
Statement of Revenues, Expenditures, and Change in Fund Balance
- Budget and Actual 21
Proprietary Funds
Statement of Net Assets 22
Statement of Revenues, Expenses, and Changes in Fund Net Assets 23
Statement of Cash Flows 24
Notes to the Financial Statements 25
i
CITY OF RANCHO PALOS VERDES
COMPREHENSIVE ANNUAL FINANCIAL REPORT
FOR THE YEAR ENDED JUNE 30, 2005
TABLE OF CONTENTS
Supplementary Information
Major Fund Budgetary Comparison Schedules
Schedule of Revenues, Expenditures, and Changes in Fund Balances
- Budget and Actual
Capital Improvement Projects Capital Projects Fund 48
RDA Debt Service Fund 49
Non-Major Governmental Funds
Combining Balance Sheet 53
Combining Statement of Revenues, Expenditures, and Changes
in Fund Balances 59
Schedule of Revenues, Expenditures, and Changes in Fund Balances
- Budget and Actual — Special Revenue Funds
Air Quality Management Fund 65
Community Development Block Grant Fund 66
EI Prado Fund 67
RDA Housing Set-Aside Fund 68
Proposition A Fund 69
Proposition C Fund 70
Beautification Fund 71
Waste Reduction Fund 72
Public Safety Grants Fund 73
1972 Act Fund 74
1911 Act Fund 75
JPIA— Portuguese Bend Fund 76
Habitat Restoration Fund 77
Subregion One Maintenance Fund 78
Measure A Fund 79
Abalone Cove Sewer Assessment District 80
Schedule of Revenues, Expenditures, and Changes in Fund Balances
- Budget and Actual — Capital Projects Funds
Bikeways Fund 81
RDA Abalone Cove Fund 82
Environmental Excise Tax Fund 83
Quimby Fund 84
Affordable Housing Fund 85
RDA Portuguese Bend Fund 86
Utility Undergrounding Fund 87
Roadway Beautification Fund 88
Schedule of Revenues, Expenditures, and Changes in Fund Balance
- Budget and Actual — Permanent Fund
JPIA—Abalone Cove Fund 89
ii
CITY OF RANCHO PALOS VERDES
COMPREHENSIVE ANNUAL FINANCIAL REPORT
FOR THE YEAR ENDED JUNE 30, 2005
TABLE OF CONTENTS
Internal Service Funds
Combining Statement of Net Assets 91
Combining Statement of Revenues, Expenses, and Changes
in Fund Net Assets 92
Combining Statement of Cash Flows 93
STATISTICAL SECTION (Unaudited)
General Governmental Expenditures by Function — Last Ten Fiscal Years 94
General Governmental Revenues by Source— Last Ten Fiscal Years 95
Property Tax Levies and Collections — Last Ten Fiscal Years 96
Assessed Value of Taxable Property— Last Ten Fiscal Years 97
Property Tax Rates —All Overlapping Governments — Last Ten Fiscal Years 98
Principal Property Taxpayers 99
Special Assessment Billings and Collections— Last Ten Fiscal Years 100
Computation of Legal Debt Margin 101
Statement of Direct and Overlapping Debt 102
Demographic Statistics — Last Ten Fiscal Years 103
Demographic Statistics —2000 Census Data 104
Building Permits and Property Value— Last Ten Fiscal Years 105
Miscellaneous Statistics 106
iii
4 ,
16II&S,
1
A4
City Hall elevator photo courtesy of Ron Dragoo
has a land area of 13.6 square miles and a population of 43,525. 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.
Though the General fund reserves of the City increased during the fiscal year ended June 30,2005, it is important to
continue to measure the City's financial strength over time, notjust on the basis of the most recent three or four years
experience. The budget adopted by the City Council for the fiscal year ending June 30, 2006 presents the
expectation of a decrease of General fund reserves. Potential economic downturn and the need to fund additional
infrastructure renewal and maintenance will require continued conservative fiscal policies.
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.
Planning, Building, and Code Enforcement
➢ The Forrestal Steering Committee completed its review of the Forrestal Management Plan. The City Council
subsequently reviewed and approved the revised Forrestal Management Plan. The City continued its
partnership with the Palos Verdes Peninsula Land Conservancy for managing the Forrestal Nature Preserve.
➢ The City continued to implement the new neighborhood compatibility requirements. As a follow-up to the
new neighborhood compatibility requirements, the Residential Development Standards Committee continued
to review the existing residential development standards and determine if any modifications are necessary.
➢ The Equestrian Committee and City Council reviewed and approved the continued operation of a Conditional
Large Domestic Animal Permit to allow a non-profit organization to conduct equestrian activities in the
Portuguese Bend Equestrian Overlay District.
➢ The General Plan Update Steering Committee presented its recommendations to the City Council on all of
the existing goals and policies of the General Plan. The General Plan Update effort was initiated.
➢ The City continued to implement its State approved Housing Element and efforts to work with the Southern
California Association of Governments in preparing the Regional Transportation Plan.
➢ The City approved its Natural Communities Conservation Plan (NCCP)and continued its effort for acquiring
open space to create the habitat preserve.
➢ The City oversaw the completion of the repair and rehabilitation of the Trump National golf course, which
was damaged by a landslide in 1999. The City continued to work with the developer on its plans to open the
18-hole golf course to the public and expand the existing Clubhouse.
➢ The City publicly circulated the Draft Environmental Impact Report(EIR)for the proposed Point View project,
a proposed new residential tract partially located in the City's landslide moratorium area.
➢ The City 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.
➢ The City oversaw the completion of the Golden Cove Shopping Center renovation and continued its efforts to
bring new businesses to the center.
V
➢ The City continued to oversee the development of a 13-lot subdivision on property located at 3200 Palos
Verdes Drive West.
➢ The City oversaw the completion and opening of Belmont Village, a 122-unit assisted living facility on
Crestridge Road.
➢ The City continued to approve the installation of various commercial antenna facilities for cellular telephones
and personal communication systems on private property throughout the City.
Public Works
➢ The annual sidewalk program, pavement management overlays and slurry seal projects were successfully
completed.
➢ The City continued to evaluate the condition of storm drains and develop a program for renewal and
maintenance. In March 2005, the City Council established the Water Quality and Flood Protection program
and provided initial funding with $2 million of General fund reserves.
➢ Emergency repairs were completed to repair a sinkhole and storm drain on Western Avenue at Delasonde
Avenue.
➢ Various storm drains were lined and repaired throughout the City.
➢ Roadways were maintained, cleaned and open to the public during the record setting storms of 2004 and
2005.
➢ Construction on the Point Vicente Interpretive Center(PVIC)expansion project began in September 2004.
➢ The traffic-calming project to install speed humps in Mira Vista neighborhood was approved.
➢ The roof at City Hall was replaced; plans and specifications to repair/replace roofs at other City facilities were
developed.
➢ The City conducted two Household Hazardous Waste roundup events, diverted 57% of trash from landfills,
and recycled 14 tons of Christmas trees along with regular green waste recycling.
➢ The City approved and began a pilot automated waste recycling program in April 2005.
Recreation and Parks
➢ The City continued to offer the use of park facilities to the Peninsula Seniors, a local non-profit organization.
➢ Recreation and Parks Staff and the Los Serenos de Point Vicente docents hosted the annual Whale of a Day
event on the Point Vicente Interpretive Center grounds.
➢ The Los Serenos de Pointe Vicente docents continued their successful docent-led hike programs at several sites
throughout the City.
➢ Recreation and Parks Staff coordinated the City's annual July 4th Independence Day celebration.
➢ The City hosted two Shakespeare By the Sea drama productions at Hesse Park.
➢ Recreation and Parks Staff continued to coordinate several annual community events including the Abalone Cove
Beach Clean-Up Day and Breakfast with Santa.
➢ Once again, the City has qualified for the use of Community Development Block grant funds for the REACH
program for the developmentally challenged.
➢ Recreation and Parks Staff hosted the grand opening and dedication ceremony for Founders Park.
VI
➢ Recreation and Parks Staff coordinated with Public Works Staff to prepare for fabrication and installation of the
Point Vicente Interpretive Center exhibits.
Administration
➢ On August 31, 2004 the City Council sold its residential property at 30678 Palos Verdes Drive East for
approximately$900,000. The City had purchased the property to stage construction equipment during the
San Ramon Canyon improvement project.
➢ The City continued to publish a quarterly newsletter that was distributed to all residents. In FY 04-05 the
newsletter featured articles on City Council Goals, the General Plan Update, Record Winter Storms and
Peninsula Wildfire Hazards.
➢ The City Council continued to provide financial assistance to a variety of non-profit organizations that provide
service to the community.
➢ The City co-sponsored a public forum at Hesse Park on September 11, 2004 with a topic of"Citizen Corps:
Protecting the Homeland, How You Can Protect Your Family, Your Community and Your Nation." The
program was co-sponsored by Congressman Dana Rohrabacher, the Governor's Office of Services and
Volunteers, Los Angeles County Sheriff Baca, Los Angeles County Fire Chief P. Michael Freeman, Los
Angeles Councilwoman Janice Hahn, the City of Rolling Hills Estates and the City of Avalon.
➢ Councilman Jim Madaffer, from the City of San Diego, was the guest speaker at the October 16, 2004
Community Leaders Breakfast. Councilman Madaffer discussed his city's experiences and response to the
catastrophic fires that swept through Southern California last year and how his community is preparing itself
against similar disasters in the future.
➢ At their December 7, 2004 meeting the City Council adopted a resolution de-establishing the Traffic
Committee and creating a new"Traffic Safety Commission." The Charter for the new Commission
emphasizes the need for the members to be "proactive, originating and innovative"
➢ In December 2004, City Administrative Services Director Jo Purcell announced her retirement effective at the
end of the year. In January, the position of Administrative Services Director was eliminated and the
Assistant City Manager assumed the City Clerk's duties.
➢ In January 2005, the Supreme Court heard the City's appeal involving an amateur radio operator who said
the City of Rancho Palos Verdes unjustly denied him a permit to use a radio antenna for commercial
purposes and he was due monetary damages for attorneys and loss of income. The Court ruled in the City's
favor that the Federal Telecommunications Act of 1996 did not allow for monetary damages against a public
agency for an adverse ruling on an antenna permit.
➢ Mayor Clark and Councilwoman Hahn hosted a press conference on February 3, 2005 to call attention to the
problems on Western Avenue and to promote cooperation between the cities of Rancho Palos. As a result
of that meeting a Joint Task Force, made up of representatives of both cities, was formed to focus on
Western Avenue traffic issues.
➢ Mayor Pro Tem Stefan Wolowicz was elected President of the City's non-profit foundation on March 1, 2005.
The other officers elected at the meeting were, Les Evans (Vice President)and Dennis McLean
(Secretary/Treasurer). The name selected by the Board is the Rancho Palos Verdes Community
Foundation. The purpose of the foundation will be to raise funds for City needs for which there seems to be
no other funding source.
➢ On March 10, 2005 the Hatano family re-opened the flower and produce stand at Abalone Cove Shoreline
Park that was previously operated by the Ishibashi family for many years. The Hatanos decided to retain the
original name, Annie's Stand, in honor of Annie and James Ishibashi.
➢ At their meeting of March 29, 2005 the City Council heard a proposal from Palos Verdes Peninsula Art
Center representatives describing a concept under which the Art Center would construct a $15 million facility
on City land, deed it to the City and lease it back through a long term lease arrangement. The City Council
approved the plan in concept and encouraged the Art Center to continue its study of the site.
VII
➢ On April 5, 2005 the City Council instituted a new risk management policy to screen employees, independent
recreation contractors and selected volunteer groups by obtaining the State summary of criminal history
information to ensure the best interests of the City, employees and the public are protected.
➢ A "Blue Star" Program was approved by the City Council to recognize and show appreciation to Peninsula
residents with family members serving in any branch of the military here and abroad is taking shape. The first
RPV family was honored at the City Council meeting on April 19, 2005.
➢ During the week of May 2, 2005, the City received notification from FEMA that its Joint Natural Hazards
Mitigation Plan was approved. Having an approved Hazard Mitigation Plan makes the City eligible to receive
FEMA grant funding following a natural disaster.
➢ On May 19, 2005 the City's Emergency Preparedness Committee hosted a Peninsula-wide meeting at the
Peninsula Center Library to discuss the needs, services and resources pertaining to emergency
preparedness. Attendees included the school district, other Peninsula cities, volunteer/community service
organizations, the library district, churches, and other local agencies.
➢ Saturday, June 18, 2005 was the kick-off event for the City Council-initiated RPV Summer Operation
Switchback(SOS)traffic enforcement project. The Saturday checkpoint was in operation from 10:30 AM
until just before 4:00 PM. During that time, the Lomita Sheriff's Station screened a total of 552 vehicles, 23
of which were motorcycles and 40 were bicycles. The Sheriff's deputies issued a total of 27 citations.
➢ At a Public Hearing on June 21, 2005, on a 4-1 vote, the City Council decided to authorize a mail ballot
election for a proposed Storm Drain User Fee with a 30-year"sunset" provision to fund the Water Quality and
Flood Protection program. The property owners voted to establish the Fee during the mail ballot election that
concluded on August 30, 2005. The Fee will end on June 30, 2037, if not terminated earlier by the City
Council. The Fee will be collected on the tax rolls commencing in 2006.
FINANCIAL INFORMATION
The Finance 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 conformitywith 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.
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,
2005, approximately$1.8 million was expended on Federal financial assistance programs; and therefore, a single
audit is required. The compliance component of the single audit is scheduled for completion in January 2006.
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 fund 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. Encumbrances lapse at year-end,
and any unexpended balance is eligible to be carried over to the following year's budget appropriations with Council
approval.
Viii
General Government Functions. The following schedule presents a summary of all Governmental fund revenues for
the fiscal year ended June 30, 2005 with the amount and percentage of increases or decreases in relation to prior
year revenue:
Increase/ Percent of
(Decrease) Increase/
Amount From FY03-04 (Decrease)
Taxes $ 13,573,066 $ 1,491,824 12.3%
Licenses and permits 1,325,579 15,847 1.2%
Fines and forfeitures 107,951 6,163 6.1%
Use of money and property 1,306,189 573,218 78.2%
Charges for services 151,907 (227,088) -59.9%
Revenues from other agencies 7,847,818 4,394,748 127.3%
Other revenues 1,038,222 (1,325,211) -56.1%
TOTAL REVENUES $ 25,350,732 $ 4,929,501 24.1%
With overall revenues increasing by over$4.9 million for the year,the City recognized large fluctuations in several of
the different revenue categories. These increases and decreases are discussed below.
Taxes increased by almost $1.5 million when compared to FY03-04. As part of the State shared revenue
restructuring of 2004, the State backfilled portion of vehicle license fees was replaced with property tax in lieu of
vehicle license fees.
Interest revenue increased by about$200,000 due to rising interest rates. The average interest rate earned during
FY03-04 was 1.535%, and the average rate earned during FY04-05 was 2.233%. Recycling fees of close to
$300,000 were reclassified from the Charges for services category to the Use of money and property category.
The increase of Revenues from other agencies was primarily due to grant revenue. The City received about
$450,000 of Community Development Block Grant (CDBG) monies for the City Hall elevator project, about $2.7
million of Measure A monies for the PVIC expansion project,more than$500,000 of Federal transportation monies for
the Crest Road overlay project,and more than$600,000 from the Federal Emergency Management Agency(FEMA)
for the Western Avenue sinkhole repair project.
From FY03-04 to FY04-05, Otherrevenues decreased by more than$1.3 million. During FY03-04,The City received
$1.8 million of insurance proceeds for the emergency San Ramon drainage project and about$300,000 for the sale
of excess CDBG monies. During FY04-05, the City received approximately $800,000 for sale of a residential
property purchased to facilitate the San Ramon drainage project.
The following schedule presents a summary of all Governmental fund expenditures for the fiscal year ended June 30,
2005, and the amount and percentage of increases and decreases in relation to prior year amounts:
Increase/ Percent of
(Decrease) Increase/
Amount From FY03-04 (Decrease)
Administration $ 3,851,435 $ 523,163 15.7%
Public safety 3,091,794 53,144 1.7%
Public works 6,301,955 1,501,246 31.3%
Parks and recreation 964,870 19,323 2.0%
Planning, building and code enforcement 2,302,063 (60,440) -2.6%
Pass through to other agencies 188,359 32,295 20.7%
Capital outlay 4,912,192 4,544,174 1234.8%
Debt service 1,088,875 283,840 35.3%
TOTAL EXPENDITURES $ 22,701,543 $ 6,896,745 43.6%
IX
The overall$6.9 million increase in expenditures is due to increases in several expenditure categories,as discussed
below.
Administration expenditures increased primarily due to an increased general liability insurance deposit and the use of
consultants to develop the City's new Water Quality and Flood Protection program.
The net increase in Public works expenditures and Capital outlay is almost entirely due to the increased number of
capital improvement projects during FY04-05. Only about$700,000 was expended on capital improvement projects
during FY03-04; yet over$6.5 million was expended during FY04-05. Notable FY04-05 projects include:
➢ Street overlay and slurry seal activities $1.6 million;
➢ PVIC expansion $3 million;
➢ Storm drain projects $0.9 million;
➢ City Hall elevator$0.5 million; and
➢ Winter 2005 storm related clean-up activities $0.3 million.
Budget to Actual Comparison. Once again,the City experienced a favorable budget variance in the General fund for
the fiscal year ended June 30,2005. Actual General fund revenues were approximately$1.4 million greater than the
amount budgeted, while expenditures and transfers out were approximately $1.25 million less than the amount
budgeted. The positive variance resulted from receipt of Property Tax In Lieu Of Vehicle License Fee in excess of
estimates, the continued strength of property values and the continued careful management of resources during
FY04-05.
Governmental Fund Balances. The combined fund balances of all Governmental Funds increased by approximately
$650,000 from the prior year. The net increase is primarily attributable to favorable expenditure variances and
interest earnings.
Debt Administration. At June 30, 2005, the City had no general obligation debt and one tax increment bond issued
during FY97-98. The schedule for repayment of this bond is included in the notes to the financial statements.
Cash Management. To obtain increased flexibility in cash management,the City employs a pooled cash system.The
goals of the City's investment policy are safety,liquidity,and yield, in that order. Investments are currently maintained
with the State Treasurer's Local Agency Investment Fund (LAIF); however, the City's investment policy permits
investments legally allowable understate law. LAIF provides high safety and liquidity and is operated specifically for
local governments. The City's invested balance with LAI F as of June 30, 2004 was $33,551,150. As mentioned
above, the average return on invested funds was 2.233%. Earnings are allocated to the various funds based on
average cash balances.
Risk Management. The City of Rancho Palos Verdes is a member of the California Joint Powers Insurance Authority
(CJPIA). With 106 members, it is the largest joint powers insurance authority in California. Through the CJPIA,the
City is self-insured against liability and workers' compensation claims. As protection against catastrophic loss,
members fund a pool to finance large settlements. During the fiscal year ended June 30, 2005, Rancho Palos
Verdes continued its proactive liability risk management role through careful monitoring of losses, working closely
with the CJPIA's third-party claims adjuster, and designing and implementing programs to minimize risks and reduce
losses. In addition,the City Manager's staff analyzes workers compensation issues by monitoring work conditions,
and organizing and implementing safety-training programs to reduce employee exposure to hazards.
Fiduciary Operations. The City of Rancho Palos Verdes has a fiduciary fund that is used to account for assets(cash)
held by the City in a trustee capacity or as an agent for other governmental units, private organizations or individuals.
The trust and agency fund is restricted as to its use and is not available to fund the operating activities of the City
and, as such, are offset by a liability equal to the carrying amount of the asset.
OTHER INFORMATION
Independent Audit. The City requires an annual audit by independent certified public accountants. The accounting
firm of Vavrinek, Trine, Day&Company, 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.
X
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, 2004. This was the twelfth 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 Kathryn Downs, Deputy Director of Finance and Information Technology,who coordinated preparation of
the report. I wish to acknowledge the assistance of our auditors, Vavrinek, Trine, Day & Company, LLP and the
contributions of other Finance Department staff: Gary Gyves,Jane Lin,Teresa Takaoka,Gayle Vanoverbeck,Selena
Wright, and Nancy Vitez.
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 and our City Manager, Les Evans.
Respectfully submitted,
Dennis McLean
Director of Finance& Information Technology
XI
CITY OF RANCHO PALOS VERDES
DIRECTORY OF CITY OFFICIALS
JUNE 30, 2005
CITY COUNCIL
Larry Clark, Mayor
Steve Wolowicz, Mayor Pro-Tem
Peter Gardiner, Councilman
Tom Long, Councilman
Douglas Stern, Councilman
ADMINISTRATION AND DEPARTMENT HEADS
CityManager ........................................................................................................................................... Les Evans
Assistant City Manager/City Clerk.....................................................................................................Carolynn Petru
Director of Finance& Information Technology.................................................................................. Dennis McLean
Director of Planning, Building and Code Enforcement.............................................................................Joel Rojas
Director of Public Works........................................................................................................................Dean Allison
Director of Recreation and Parks ...................................................................................................... Ron Rosenfeld
City Attorney................................................................................................................Richards, Watson &Gershon
xii
CITY OF RANCHO PALOS VERDES
ORGANIZATIONAL CHART
CITIZENS OF
RANCHO PALOS VERDES
MAYOR AND CITY COUNCIL
COMMISSIONS &COMMITTEES COMMISSIONS & COMMITTEES
Planning Commission Emergency Preparedness Committee
Traffic Safety Commission Equestrian Committee
Finance Advisory Committee Open Space Planning Parks&Recreation Task Force
CITY MANAGER CITY ATTORNEY
Administration/Budget Richards,Watson&Gershon
Personnel/Community Outreach
Risk Management
CITY CLERK FINANCE & INFORMATION
Records Management TECHNOLOGY
Public Information Financial Reporting
Elections Accounts Payable/Receivable
Payroll
Purchasing
Information Technology
RECREATION & PARKS
Park Facilities PLANNING & BUILDING
Point Vicente Interpretive Center Planning/Zoning
Special Events Building&Safety/Geology
REACH Program Code Enforcement
View Restoration
PUBLIC SAFETY PUBLIC WORKS
L.A.County Sheriff Street Maintenance
L.A.County Fire Refuse/City Engineering
Animal Control Park/Building Maintenance
Emergency Preparedness
Capital Projects
XIII
(-Iertificate of
Achievement
for Excellence
in Financial
Reporting
Presented to
RanchoCity of s Verdes,
California
For its Comprehensive Annual
Financial Report
for the Fiscal Year Ended
June 30, 200
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 c=hose eompfehensive annual financial
reports(CAFRs)achieve the highest
standards in government accounting
and financial reporting.
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January 2005 waterspout courtesy of Dave Blumenthal
FINANCIAL SECTION
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Shakespeare By The Sea photo courtesy of Matt Waters
Vavrinek,Tdne, Day & Co.,LLP VALUE THE DIFFERENCE
Certified Public Accountants&ConsunaMs
INDEPENDENT AUDITORS' REPORT
The Honorable Mayor and Members of City Council
The City of Rancho Palos Verdes,California
We have audited the accompanying financial statements of the governmental activities, business-type activities,
each major fund, and the aggregate remaining fund information of the City of Rancho Palos Verdes, as of and for
the year ended June 30, 2005, which collectively comprise the City of Rancho Palos Verdes' basic financial
statements as listed in the table of contents. These financial statements are the responsibility of the City of
Rancho Palos Verdes' 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
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 financial
position of the governmental activities, business-type activities, each major fund, and the aggregate remaining
fund information of the City of Rancho Palos Verdes, California, as of June 30, 2005, and the respective changes
in financial positions and cash flows, where applicable, thereof of the respective budgetary comparisons for the
General Fund and Street Maintenance Special Revenue Fund for the year then ended in conformity with
accounting principles generally accepted in the United States of America.
As discussed in Note 1 to the financial statements, the City of Rancho Palos Verdes adopted Governmental
Accounting Standards Board (GASB) Statement No. 40, Deposit and Investment Risk Disclosures an
amendment of GASB Statement No. 3,effective July 1, 2004.
As described in Note 15 to the financial statements, the fund balance at June 30, 2004, for the Redevelopment
Agency Debt Service Fund has been restated to recognize the application of excess tax increment to the
outstanding deferred interest liability.
1
8270 Aspen Street Rancho Cucamonga,CA 91730 Tel: 909.466.4410 Fax:909.466.4431 www.vtdcpa.com
FRESNO • LAGUNA HILLS • PALO ALTO • PLEASANTON • RANCHO CUCAMONGA
In accordance with Government Auditing Standards, we have also issued our report dated September 23, 2005 on
our consideration of the City's internal control over financial reporting and on our tests of its compliance with
certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that
report is 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 required supplementary information, such as management's discussion and analysis is not a required part of
the basic financial statements, but is supplementary information required by the Governmental Accounting
Standards Board(GASB). We have applied certain limited procedures,which consisted principally of inquiries of
management regarding the methods of measurement and presentation of the required supplementary information.
However,we did not audit the information and express no opinion on it.
Our audit was conducted for the purpose of forming opinions on the financial statements that collectively
comprise the City's basic financial statements. The other supplementary information listed in the table of
contents, including the introductory section, combining schedules and additional budgetary comparison schedules,
and statistical sections are presented for purposes of additional analysis and are not a required part of the basic
financial statements. The combining schedules and additional budgetary comparison schedules have been
subjected to the auditing procedures applied in the audit of the basic financial statements and, in our opinion, are
fairly stated in all material respects in relation to the basic financial statements taken as a whole. The introductory
section and the statistical section have not been subjected to the auditing procedures applied in the audit of the
basic financial statements and, accordingly,we express no opinion on them.
Rancho Cucamonga, California
September 23, 2005
2
MANAGEMENT'S DISCUSSION & ANALYSIS
i k■ - �- I
r �r
City Hall photo courtesy of Dave Blumenthal
CITY OF RANCHO PALOS VERDES
Management's Discussion and Analysis
June 30, 2005
As management of the City of Rancho Palos Verdes, we offer readers of the City of Rancho
Palos Verdes'financial statements this narrative overview and analysis of the financial activities
of the City of Rancho Palos Verdes for the fiscal year ended June 30, 2005. 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-xi 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, 2005, by$123,757,202 (net assets). Of this amount,
$17,659,365(unrestricted net assets) may be used to meet the government's ongoing
obligations to citizens and creditors.
➢ The City's total net assets increased by$5,401,389. This increase is primarily
attributable to the excess of General fund revenues over General fund expenditures.
➢ As of June 30, 2005, the City's governmental funds reported combined ending fund
balances of$23,937,865, an increase of$649,189 in comparison with the prior year. The
increase in combined ending fund balances is primarily attributable to the careful
management of resources during FY04-05. Approximately$14,770,636 (unreserved
fund balance) is available for spending at the government's discretion. The combined
unreserved fund balance includes the RDA Debt Service negative fund balance of
$12,793,030.
➢ As of June 30, 2005, unreserved undesignated fund balance for the General fund was
$14,209,435 or 87% of total General fund expenditures and transfers out.
➢ The City's total debt decreased by$156,915 (1.89%)during the current fiscal year. The
decrease was primarily attributable to partial payment of the RDA deferred interest
payable.
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).
3
CITY OF RANCHO PALOS VERDES
Management's Discussion and Analysis
June 30, 2005
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 newly established Water Quality and Flood
Protection program for renewal and maintenance of the City's storm drain facilities.
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 11-13 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 four categories: governmental funds, enterprise 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. Both 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 maintains 29 individual governmental funds. Information is
presented separately in the governmental fund balance sheet and in the governmental fund
statement of revenues, expenditures, and changes in fund balances for the General fund, the
Street Maintenance fund, the Capital Improvements fund and the RDA Debt-Service fund, all of
which are considered to be major funds. Data from the other 25 governmental funds are
combined into a single, aggregated presentation. Individual fund data for each of these non-
major governmental funds is provided in the form of combining statements elsewhere in this
report.
The City of 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 14-19 of this report.
4
CITY OF RANCHO PALOS VERDES
Management's Discussion and Analysis
June 30, 2005
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 of Rancho Palos Verdes 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 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. The proprietary fund financial statements provide
separate information for the enterprise fund, which is considered a major fund of the City of
Rancho Palos Verdes. Conversely, all three internal service funds are combined into a single,
aggregated presentation in the proprietary fund financial statements. Individual fund data for the
internal service funds is provided in the form of combining statements 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 25-46 of this report.
Other information. The combining statements referred to earlier in connection with non-major
governmental funds and internal service funds are presented immediately following the notes to
the financial statements. Combing and individual fund statements and schedules can be found
on pages 47-93 of this report.
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
$123,757,202 at June 30, 2005. By far the largest portion of the City's net assets (76 percent)
reflects its investment in capital assets (e.g. land, infrastructure, buildings, equipment). The City
uses these capital assets to provide services to citizens; consequently, these assets are not
available for future spending.
City of Rancho Palos Verdes Net Assets
Governmental Business-type
Activities Activities Total
June 30,2005 June 30,2004 June 30,20051 June 30,2004 June 30,2005 June 30,2004
Current and other assets $ 40,568,511 $ 37,360,800 $ 2,000,086 $ - $ 42,568,597 $ 37,360,800
Capital assets 94,023,353 92,499,373 - 94,023,353 92,499,373
Total assets 134,591,864 129,860,173 2,000,086 136,591,950 129,860,173
Long-term liabilities outstanding 8,139,779 8,613,681 - 8,139,779 8,613,681
Other liabilities 4,694,969 2,890,679 4,694,969 2,890,679
Total liabilities 12,834,748 11,504,360 12,834,748 11,504,360
Invested in capital assets 94,023,353 92,499,373 94,023,353 92,499,373
Restricted 10,074,398 11,584,984 - 10,074,398 11,584,984
Unrestricted 17,659,365 14,271,456 2,000,086 19,659,451 14,271,456
Total net assets $121,757,116 $118,355,813 $ 2,000,086 $ $123,757,202 $118,355,813
5
CITY OF RANCHO PALOS VERDES
Management's Discussion and Analysis
June 30, 2005
An additional portion of the City's net assets ($12,074,484 or 10 percent) represents resources
that are subject to external restrictions on how they may be used. The remaining balance of
unrestricted net assets ($17,659,365 or 14 percent) may be used to meet the government's
ongoing obligations to citizens and creditors.
Governmental activities. Governmental activities increased the City's net assets by
$3,401,303, thereby accounting for 63 percent of the total growth in the net assets of the City.
City of Rancho Palos Verdes Changes in Net Assets
Governmental Business-type
Activities Activities Total
June 30,2005 June 30,2004 June 30,2005 June 30,2004 June 30,2005 June 30,2004
Program revenues:
Charges for services $ 1,585,438 $ 1,819,832 $ - $ - $ 1,585,438 $ 1,819,832
Operating contributions and grants 2,728,278 2,836,293 2,728,278 2,836,293
Capital contributions and grants 4,524,094 36,878 4,524,094 36,878
General revenues:
Property taxes 5,840,302 5,706,042 5,840,302 5,706,042
Othertaxes 9,028,554 7,198,548 9,028,554 7,198,548
Other 1,876,802 2,810,966 86 1,876,888 2,810,966
Transfers 2,000,000 2,000,000 - -
Total revenues 23,583,468 20,408,559 2,000,086 25,583,554 20,408,559
Expenses:
Administration 4,054,729 3,499,385 - 4,054,729 3,499,385
Public safety 3,078,631 3,024,081 3,078,631 3,024,081
Public works 9,488,478 7,461,918 9,488,478 7,461,918
Parks and recreation 1,064,699 947,485 1,064,699 947,485
Planning,building and code
enforcement 2,223,025 2,295,903 2,223,025 2,295,903
Interest on long-term debt 272,603 272,750 272,603 272,750
Total expenses 20,182,165 17,501,522 - 20,182,165 17,501,522
Increase in net assets 3,401,303 2,907,037 2,000,086 5,401,389 2,907,037
Net assets-beginning of fiscal year
(as restated) 118,355,813 115,448,776 - 118,355,813 115,448,776
Net assets-end of fiscal year
(as restated) $121,757,116 $118,355,813 $ 2,000,086 $ $123,757,202 $118,355,813
Key elements of this increase are as follows:
➢ Other Governmental funds' revenues exceeded expenses and net transfers by $715,352
in aggregate. There were no notable increases to any individual Other Governmental
fund.
➢ The difference in the method of accounting for capital assets in the governmental funds
versus the statement of activities accounts for an increase of$1,566,327 in net assets.
Governmental funds do not depreciate infrastructure assets. However, in the statement
of activities, the cost of infrastructure assets is allocated over their estimated useful lives.
➢ The difference in the method of accounting for interest income in the governmental funds
versus the Statement of Activities accounts for an increase in excess of approximately
$632,401 in net assets. Unpaid accrued interest income is deferred in the governmental
funds since it is not available.
➢ The excess of Internal Service fund revenues over expenses of$253,250. The net
revenues and expenses of Internal Service funds are reported with governmental
activities in the Statement of Activities.
6
CITY OF RANCHO PALOS VERDES
Management's Discussion and Analysis
June 30, 2005
Revenues by Source—Governmental Activities
capital contributions charges for operating
and grants services contributions and
19% 7% grants
11%
77!!!
property taxes
25%
other taxes &other
revenues
38%
As of the end of the current fiscal year, the City's governmental funds reported combined ending
fund balances of$23,937,865, an increase of$649,189 in comparison with the prior year.
Approximately 62 percent of the combined ending fund balances ($14,770,636) constitutes
unreserved fund balance, which is available for spending at the City's discretion. The combined
unreserved fund balance includes the RDA Debt Service negative fund balance of$12,478,093.
The remainder of the combined ending fund balances is reserved to indicate that it is not
available for new spending because it has already been committed 1) to reserve the principal
balance of loans made to the City's Redevelopment Agency ($5,978,814), and 2) for a variety of
other restricted purposes ($3,188,415).
The General fund is the chief operating fund of the City of Rancho Palos Verdes. At the end of
the current fiscal year, unreserved fund balance of the General fund was $14,209,435, while total
fund balance reached $20,904,678. As a measure of the General fund's liquidity, it may be useful
to compare both unreserved fund balance and total fund balance to total fund expenditures and
transfers out. Unreserved fund balance represents 119 percent of total General fund
expenditures, while total fund balance represents 176 percent of that same amount.
During the current fiscal year, the fund balance of the City's General fund increased by$199,767.
The key factor in this growth is the continued careful management of resources during FY04-05.
The debt service fund has a negative fund balance of$12,478,093. 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 $709,444, which primarily
represents accumulated interest on the advance from the City to the Redevelopment Agency.
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 $2,000,086. The fund was established during
FY04-05 with an initial General fund equity transfer of$2,000,000. Unrestricted net assets of the
Internal Service funds at the end of the year amounted to $4,471,587. The total growth in net
assets was $253,250.
7
CITY OF RANCHO PALOS VERDES
Management's Discussion and Analysis
June 30, 2005
General Fund Budgetary Highlights
The difference between the original budget and the final amended budget was an increase of
$1,316,052; and can be briefly summarized as follows:
y A decrease of$675,270 was attributable to appropriations continued to FY05-06.
y An increase of approximately $685,600 was attributable to appropriations continued from
FY03-04.
r Additional funds of$634,000 for legal fees were required to support the Indian Ridgecrest
Gardens litigation, Abrams supreme court litigation, proposed cable franchise
modifications, and other additional litigation services.
r Additional funds of$220,000 were approved for consultants to assist in the development
of the Water Quality and Flood Protection program.
r Additional funds of$92,500 were required to fund special safety programs.
r Additional funds of$47,430 were approved for RPV TV Channel 33 studio equipment.
r Additional funds of$40,000 were approved for traffic engineering.
y Other immaterial increases totaled approximately $271,792.
Capital Asset and Debt Administration
Capital assets. The City's investment in capital assets for its governmental activities as of June
30, 2005, amounts to $94,023,353 (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 capital assets increased by 1.65 percent.
Major capital asset events during the current fiscal year included the following:
v Depreciation of$3.2 million was recorded for the City's capital assets.
➢ Construction of the Point Vicente Interpretive Center(PVIC) expansion began at a cost of
$3 million.
➢ The Western Avenue sinkhole was repaired at a cost of$634,526.
v Street overlay was completed at a cost of$1,130,785.
8
CITY OF RANCHO PALOS VERDES
Management's Discussion and Analysis
June 30, 2005
City of Rancho Palos Verdes Capital Assets
(net of depreciation)
Governmental
Activities
June 30, 2005 June 30, 2004
Land $ 15,058,724 $ 15,058,724
Buildings 2,051,039 2,114,999
Park improvements 1,826,444 1,972,353
Roadways 48,269,545 49,201,523
Sewer system 11,178,129 11,635,062
Storm drain system 10,975,375 10,667,702
Vehicles 15,574 28,828
Computer equipment 153,575 136,964
Furniture and other equipment 172,352 218,056
Construction in Progress 4,322,596 1,465,162
Total $ 94,023,353 1 $ 92,499,373
Additional information on the City's capital assets can be found in note 4 on pages 36-37 of this
report.
Long-term debt. At the end of the current fiscal year, the City of Rancho Palos Verdes had total
debt outstanding of$8,139,779. Of this amount, $7,918,906 is a liability of the Redevelopment
Agency.
City of Rancho Palos Verdes Outstanding Debt
Governmental
Activities
June 30, 2005 June 30, 2004
RDA Tax Increment Bond $ 5,450,000 $ 5,455,000
RDA Deferred Interest Payable 2,468,906 2,647,756
Employee compensated absences 220,873 193,938
Total $ 8,139,779 1 $ 8,296,694
The City's total debt decreased by$156,915 (1.89 percent) during the current fiscal year, 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 $1,024,577,537. Additional information on the City's long-term debt can be found in
note 5 on pages 38-39 of this report.
9
CITY OF RANCHO PALOS VERDES
Management's Discussion and Analysis
June 30, 2005
Economic Factors and Next Year's Budgets and Rates
➢ Local property values remain strong; therefore, property tax revenue (approximately 25
percent of City-wide revenues) remains unaffected by the downturn in the economy.
This factor was considered in preparing the City's budget for FY05-06.
During the current fiscal year, unreserved fund balance in the General fund increased to
$14,209,435.
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 Department, 30940 Hawthorne Boulevard,
Rancho Palos Verdes, CA 90275.
10
BASIC FINANCIAL STATEMENTS
GOVERNMENT-WIDE STATEMENTS
CITY OF RANCHO PALOS VERDES
STATEMENT OF NET ASSETS
JUNE 30, 2005
Governmental Business-type
Activities Activities Total
ASSETS
Cash and cash equivalents $ 35,415,460 $ 2,000,086 $ 37,415,546
Receivables:
Taxes 498,707 498,707
Interest 242,397 242,397
Notes 554,978 554,978
Other 2,780,479 2,780,479
Prepaid costs 374,098 374,098
Land held for development 702,392 702,392
Capital assets
Non-depreciable:
Land 15,058,724 15,058,724
Construction in progress 4,322,596 4,322,596
Depreciable, net of accumulated depreciation:
Property and equipment 341,501 341,501
Buildings and improvements 2,051,039 2,051,039
Infrastructure 72,249,493 72,249,493
Total Assets 134,591,864 2,000,086 136,591,950
LIABILITIES
Accounts payable and accrued liabilities 3,622,117 3,622,117
Interest payable 22,708 22,708
Retentions payable 285,309 285,309
Deferred revenue 19,942 19,942
Deposits 744,893 744,893
Noncurrent liabilities:
Due within one year 164,081 164,081
Due in more than one year 7,975,698 7,975,698
Total Liabilities 12,834,748 - 12,834,748
NET ASSETS
Invested in capital assets 94,023,353 94,023,353
Restricted for:
Community development:
Expendable 7,493,500 7,493,500
Non-expendable 1,000,000 1,000,000
Public safety 62,700 62,700
Public works 2,940,921 2,940,921
Recreation services 577,363 577,363
Unrestricted 15,659,279 2,000,086 17,659,365
Total Net Assets $ 121,757,116 $ 2,000,086 $ 123,757,202
See accompanying notes to financial statements.
11
CITY OF RANCHO PALOS VERDES
STATEMENT OF ACTIVITIES
YEAR ENDED JUNE 30, 2005
Program Revenues
Operating Capital
Charges for Contributions Contributions
Expenses Services and Grants and Grants
Governmental Activities:
Administration $ 4,054,729 $ 61,620 $ 20,769
Public safety 3,078,631 163,249 102,953
Public works 9,488,478 131,543 2,588,488 $4,524,094
Parks and recreation 1,064,699 40,687
Planning, building and
code enforcement 2,223,025 1,188,339 16,068
Interest on long-term debt 272,603
Total Governmental Activities 20,182,165 1,585,438 2,728,278 $4,524,094
Business-type Activities:
Water Protection Flood Control - - - -
Total Primary Government $ 20,182,165 $ 1,585,438 $ 2,728,278 $4,524,094
General Revenues:
Taxes:
Property tax, levied for general purpose
Property tax, Redevelopment Agency tax increment
Transient occupancy tax
Franchise tax
Sales tax
In lieu sales tax(unrestricted)
Motor vehicle in lieu tax (unrestricted)
Utility user tax
Other taxes
Investment income
Other
Transfers
Total General Revenues and Transfers
Change in Net Assets
Net Assets at Beginning of Year
Net Assets at End of Year
See accompanying notes to financial statements.
12
Net Revenue(Expense)and Change in Net Assets
Governmental Business-type
Activities Activities Total
$ (3,972,340) $ (3,972,340)
(2,812,429) (2,812,429)
(2,244,353) (2,244,353)
(1,024,012) (1,024,012)
(1,018,618) (1,018,618)
(272,603) (272,603)
(11,344,355) (11,344,355)
(11,344,355) (11,344,355)
5,098,702 5,098,702
741,600 741,600
27,595 27,595
1,306,758 1,306,758
1,008,618 1,008,618
267,085 267,085
3,708,769 3,708,769
1,901,383 1,901,383
808,346 808,346
593,983 593,983
1,282,819 $ 86 1,282,905
(2,000,000) 2,000,000 -
14,745,658 2,000,086 16,745,744
3,401,303 2,000,086 5,401,389
118,355,813 - 118,355,813
$ 121,757,116 $ 2,000,086 $ 123,757,202
13
FUND FINANCIAL STATEMENTS
CITY OF RANCHO PALOS VERDES
GOVERNMENTAL FUNDS
BALANCE SHEET
JUNE 30, 2005
Special Capital
Revenue Projects
Street Capital
ASSETS General Maintenance Improvements
Cash and cash equivalents $ 14,879,635 $ 876,088 $ 3,370,563
Receivable
Taxes 463,969
Interest 136,441 1,631 209
Other 491,464 5,279 634,194
Due from other funds 1,579,801
Prepaid items 41,159
Advances to other funds 12,717,430
Land held for development
Total Assets $ 30,309,899 $ 882,998 $ 4,004,966
LIABILITIES AND FUND BALANCES
LIABILITIES
Accounts payable and accrued liabilities $ 1,689,216 $ 267,477 $ 1,323,408
Due to other funds
Retentions payable 19,350 265,959
Deferred revenue 6,951,762
Advances to Redevelopment Agency
Deposits 744,893
Total Liabilities 9,405,221 267,477 1,589,367
FUND BALANCES
Reserved for:
Reimbursement settlement agreement
Prepaid costs 41,159
Advances to other funds 5,978,814
Land development
Housing set-aside
Unreserved:
Designated for continuing appropriations 675,270 320,000 2,415,599
Unreserved, undesignated and reported in:
General fund 14,209,435
Special revenue funds 295,521
Capital projects funds
Permanent funds
Debt service fund
Total Fund Balances 20,904,678 615,521 2,415,599
Total Liabilities and
Fund Balances $ 30,309,899 $ 882,998 $ 4,004,966
See accompanying notes to financial statements.
14
Debt
Service Other
Governmental
RDA Funds Totals
$ 11,711,063 $ 30,837,349
34,738 498,707
72,930 211,211
1,648,258 2,779,195
1,579,801
$ 314,937 16,959 373,055
12,717,430
702,392 702,392
$ 314,937 $ 14,186,340 $ 49,699,140
$ 201,979 $ 3,482,080
$ 75,600 1,504,201 1,579,801
285,309
6,951,762
12,717,430 12,717,430
744,893
12,793,030 1,706,180 25,761,275
1,000,000 1,000,000
314,937 16,959 373,055
5,978,814
702,392 702,392
1,112,968 1,112,968
295,374 3,706,243
14,209,435
5,606,741 5,902,262
3,319,439 3,319,439
426,287 426,287
(12,793,030) (12,793,030)
(12,478,093) 12,480,160 23,937,865
$ 314,937 $ 14,186,340 $ 49,699,140
15
CITY OF RANCHO PALOS VERDES
GOVERNMENTAL FUNDS
RECONCILIATION OF THE BALANCE SHEET OF GOVERNMENTAL FUNDIE
TO THE STATEMENT OF NET ASSETS
JUNE 30, 2005
Fund Balances of Governmental Funds $ 23,937,865
Amounts reported for governmental activities in the statement of net assets are
different because:
Capital assets of governmental activities are not financial resources and, therefore,
are not reported in the governmental funds. 93,681,852
Interest accrued on the advance receivable in the General Fund is not paid by the
owing funds 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. 6,738,616
Intergovernmental revenues earned, but not available are deferred in the
fund financial statements. The revenue is not deferred on the Statement
of Activities. 193,204
Interest expenditures are recognized when due, and therefore, interest payable
is not recorded in the governmental funds. (22,708)
Long-term notes receivable are not current available resources and, therefore,
are not reported in the governmental funds. 554,978
Long-term liabilities are not due and payable in the current period and, therefore,
are not reported in the governmental funds. (8,139,779)
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. 4,813,088
Net Assets of Governmental Activities $ 121,757,116
See accompanying notes to financial statements.
16
CITY OF RANCHO PALOS VERDES
GOVERNMENTAL FUNDS
STATEMENT OF REVENUES, EXPENDITURES ANC
CHANGES IN FUND BALANCES
YEAR ENDED JUNE 30, 2005
Special Capital
Revenue Projects
Street Capital
General Maintenance Improvements
REVENUES
Taxes $ 12,060,912
Licenses and permits 1,325,579
Fines and forfeitures 107,951
Use of money and property 649,262 $ 37,974 $ 26,023
Charges for services 146,762 5,145
Revenue from other agencies 1,165,539 796,284 1,163,794
Other revenues 988,218
Total Revenues 16,444,223 839,403 1,189,817
EXPENDITURES
Current:
Administration 3,838,505
Public safety 3,088,910
Public works 1,697,548 1,825,078 1,231,952
Parks and recreation 964,870
Planning, building and
code enforcement 2,302,063
Pass through to other agencies
Capital outlay 4,358,419
Debt service:
Principal
Interest and fiscal charges
Total Expenditures 11,891,896 1,825,078 5,590,371
Excess (Deficiency)of Revenues
Over Expenditures 4,552,327 (985,675) (4,400,554)
OTHER FINANCING SOURCES (USES)
Transfers in 168,951 682,460 5,147,283
Transfers out (4,521,511)
Total Other Financing Sources (Uses) (4,352,560) 682,460 5,147,283
Net Change in Fund Balances 199,767 (303,215) 746,729
Fund Balances, Beginning of Year, as restated 20,704,911 918,736 1,668,870
Fund Balances, End of Year $ 20,904,678 $ 615,521 $ 2,415,599
See accompanying notes to financial statements.
17
Debt
Service Other
Governmental
RDA Funds Totals
$ 595,600 $ 916,554 $ 13,573,066
1,325,579
107,951
592,930 1,306,189
151,907
4,722,201 7,847,818
50,004 1,038,222
595,600 6,281,689 25,350,732
12,930 3,851,435
2,884 3,091,794
1,547,377 6,301,955
964,870
2,302,063
188,359 188,359
553,773 4,912,192
183,850 183,850
905,025 905,025
1,290,164 2,104,034 22,701,543
(694,564) 4,177,655 2,649,189
181,013 6,179,707
(14,880) (3,643,316) (8,179,707)
(14,880) (3,462,303) (2,000,000)
(709,444) 715,352 649,189
(11,768,649) 11,764,808 23,288,676
$ (12,478,093) $ 12,480,160 $ 23,937,865
18
CITY OF RANCHO PALOS VERDES
RECONCILIATION OF THE STATEMENT OF REVENUES, EXPENDITURES ANC
CHANGES IN FUND BALANCES OF GOVERNMENTAL FUNDIC
TO THE STATEMENT OF ACTIVITIES
YEAR ENDED JUNE 30, 2005
Net Change in Fund Balances-Total Governmental Funds $ 649,189
Amounts reported for governmental activities in the Statement of Activities differs
from the amounts reported in the Statement of Revenues, Expenditures, and Changes
in Fund Balances 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, or are allocated to the appropriate functional expense when
the cost is below the capitalization threshold. Gains and losses on asset disposals
are also not recgonized in the governmental funds. This activity is reconciled as follows:
Cost of assets capitalized 4,622,745
Depreciation expense (3,056,418)
Unpaid accrued interest income is deferred in the governmental funds since it is
not available. This income is accrued in the Statement of Activities. 632,401
Intergovernmental revenues earned, but not available are deferred in the
fund financial statements. The revenue is not deferred on the Statement
of Activities. 193,204
Interest expenditures are recognized when due, and therefore, interest payable
is not recorded in the governmental funds. This amount represents the net
change in interest payable. 21
Increases in long-term notes receivable use current financial resources and are
included in the expenditures, of governmental funds. Repayments of long-term notes
receivable provide current financial resources and are included in the revenues of
governmental funds. These changes in notes receivable are not reflected in the
revenues or expenses of the Statement of Activities. This amount represents
the net change in the long-term notes receivable. (50,004)
Compensated absences expenses reported in the statement of activities do not
require the use of current financial resources and therefore are not reported as
expenditures in governmental funds. (26,935)
Principal payments on debt are recorded as expenditures in the funds. The expenditure
is not recognized in the Statement of Activites since it reduces the liability reported
on the Statement of Net Assets. Principal payments consisted of the following:
RDA Tax Increment Bond 5,000
RDA Deferred Interest Payable 178,850
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 net revenues/(expenses)of the internal service funds (excluding
transfers and interest income)are reported with governmental activities. 253,250
Change in Net Assets of Governmental Activities $ 3,401,303
See accompanying notes to financial statements.
19
CITY OF RANCHO PALOS VERDES
STATEMENT OF REVENUES, EXPENDITURES
AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL
GENERALFUND
FOR THE YEAR ENDED JUNE 30, 2005
Variance with
Final Budget-
Budgeted Amounts Actual Positive
Original Final Amounts (Negative)
REVENUES
Taxes $ 9,231,661 $ 10,605,818 $ 12,060,912 $ 1,455,094
Licenses and permits 1,146,287 1,146,287 1,325,579 179,292
Fines and forfeitures 80,100 80,100 107,951 27,851
Use of money and property 516,605 516,605 649,262 132,657
Charges for services 164,000 164,000 146,762 (17,238)
Revenue from other agencies 854,248 1,545,117 1,165,539 (379,578)
Other revenues 88,400 928,920 988,218 59,298
Total Revenues 12,081,301 14,986,847 16,444,223 1,457,376
EXPENDITURES
Current:
Administration 3,305,815 4,248,468 3,838,505 409,963
Public safety 3,095,874 3,219,074 3,088,910 130,164
Public works 1,817,697 1,878,046 1,697,548 180,498
Parks and recreation 1,074,167 1,087,117 964,870 122,247
Planning, building and
code enforcement 2,260,903 2,437,803 2,302,063 135,740
Total Expenditures 11,554,456 12,870,508 11,891,896 978,612
Excess of Revenues
Over Expenditures 526,845 2,116,339 4,552,327 2,435,988
OTHER FINANCING SOURCES(USES)
Transfers in 227,910 227,910 168,951 (58,959)
Transfers out (2,357,423) (4,793,184) (4,521,511) 271,673
Total Other Financing Sources(Uses) (2,129,513) (4,565,274) (4,352,560) 212,714
Net Change in Fund Balance (1,602,668) (2,448,935) 199,767 2,648,702
Fund Balance, Beginning of Year 20,704,911 20,704,911 20,704,911
Fund Balance, End of Year $19,102,243 $ 18,255,976 $ 20,904,678 $ 2,648,702
See accompanying notes to financial statements.
20
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, 2005
Variance with
Final Budget-
Budgeted Amounts Actual Positive
Original Final Amounts (Negative)
REVENUES
Use of money and property $ 23,000 $ 23,000 $ 37,974 $ 14,974
Charges for services 20,000 20,000 5,145 (14,855)
Revenue from other agencies 799,000 799,000 796,284 (2,716)
Total Revenues 842,000 842,000 839,403 (2,597)
EXPENDITURES
Current:
Public works 1,604,903 2,054,803 1,825,078 229,725
Excess (Deficiency)of Revenues
Over Expenditures (762,903) (1,212,803) (985,675) 227,128
OTHER FINANCING SOURCES (USES)
Transfers in 745,300 789,300 682,460 (106,840)
Net Change in Fund Balance (17,603) (423,503) (303,215) 120,288
Fund Balance, Beginning of Year 918,736 918,736 918,736
Fund Balance, End of Year $ 901,133 $ 495,233 $ 615,521 $ 120,288
See accompanying notes to financial statements.
21
CITY OF RANCHO PALOS VERDES
STATEMENT OF NET ASSETS
PROPRIETARY FUNDS
JUNE 30, 2005
Water Quality Governmental
Flood Protection Activities-
Enterprise Internal Service
Fund Funds
ASSETS
Current Assets
Cash and cash equivalents $ 2,000,086 $ 4,578,111
Receivables
Interest 31,186
Other 1,284
Prepaid items 1,043
Total Current Assets 2,000,086 4,611,624
Noncurrent Assets
Capital assets
Property and equipment 947,785
Accumulated depreciation (606,284)
Total Noncurrent Assets - 341,501
Total Assets 2,000,086 4,953,125
LIABILITIES
Current Liabilities
Accounts payable and accrued liabilities 140,037
Total Liabilities - 140,037
NET ASSETS
Invested in capital assets 341,501
Unrestricted 2,000,086 4,471,587
Total Net Assets $ 2,000,086 $ 4,813,088
See accompanying notes to financial statements.
22
CITY OF RANCHO PALOS VERDES
STATEMENT OF REVENUE, EXPENSES, AND CHANGES
IN FUND NET ASSETS
PROPRIETARY FUNDS
FOR THE YEAR ENDED JUNE 30, 2005
Water Quality Governmental
Flood Protection Activities -
Enterprise Internal Service
Fund Funds
OPERATING REVENUES
Charges for services $ 1,471,338
Total Operating Revenues - 1,471,338
OPERATING EXPENSES
Personnel services 907,861
Material and supplies 107,703
Maintenance 145,835
Depreciation 146,225
Total Operating Expenses - 1,307,624
Operating Income - 163,714
NONOPERATING REVENUES
Interest income 89,536
Donations $ 86
Total Non Operating Revenues 86 89,536
Income Before Transfers 86 253,250
TRANSFERS IN 2,000,000 -
Change in Net Assets 2,000,086 253,250
Net Assets, Beginning of Year - 4,559,838
Net Assets, End of Year $ 2,000,086 $ 4,813,088
See accompanying notes to financial statements.
23
CITY OF RANCHO PALOS VERDES
STATEMENT OF CASH FLOWS
PROPRIETARY FUNDS
FOR THE YEAR ENDED JUNE 30, 2005
Water Quality Governmental
Flood Protection Activities -
Enterprise Internal Service
Fund Funds
CASH FLOWS FROM OPERATING ACTIVITIES
Receipts from customers $ 1,471,338
Payments to suppliers (1,111,965)
NET CASH PROVIDED BY OPERATING ACTIVITIES - 359,373
CASH FLOWS FROM CAPITAL AND
RELATED FINANCING ACTIVITIES
Acquisition of capital assets (103,878)
CASH FLOWS FROM NONCAPITAL
FINANCING ACTIVITIES
Transfers in $ 2,000,000
Donations 86
NET CASH PROVIDED BY NONCAPITAL
FINANCING ACTIVITIES 2,000,086 -
CASH FLOWS FROM INVESTING ACTIVITIES
Interest received on investments 72,952
NET INCREASE IN CASH AND CASH EQUIVALENTS 2,000,086 328,447
CASH AND CASH EQUIVALENTS, Beginning of Year - 4,249,664
CASH AND CASH EQUIVALENTS, End of Year $ 2,000,086 $ 4,578,111
RECONCILIATION OF OPERATING INCOME
TO NET CASH PROVIDED BY OPERATING ACTIVITIES
Operating income $ 163,714
Adjustments to reconcile operating income to
net cash provided by operating activities:
Depreciation 146,225
Decrease in other receivables (467)
Decrease in prepaid items 25,392
Decrease in accounts payable 24,509
NET CASH PROVIDED BY OPERATING ACTIVITIES $ - $ 359,373
See accompanying notes to financial statements.
24
NOTES TO FINANCIAL STATEMENTS
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July 004 City Councilphoto • of Boyle
CITY OF RANCHO PALOS VERDES
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2005
NOTE#1— SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The accounting policies of the City of Rancho Palos Verdes 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, the RDA
and the Authority are so intertwined with the City, it is in substance, part of the City's operations.
Accordingly, the balances and transactions of the RDA are reported as separate funds in the Special
Revenue, Debt Service, and Capital Projects Funds. The balances and transactions of the Authority
are reported as separate funds in a Permanent Fund and a Special Revenue Fund. The following
specific criteria were used in determining that the RDA and the Authority are "blended" component
units:
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 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 will be available
to repay the loans any time in the immediate future.
3) Employees of the City manage both the RDA and the Authority.
25
CITY OF RANCHO PALOS VERDES
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2005
NOTE#1— SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, Continued
The 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 is comprised of four 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 from the Authority.
B. Accounting and Reporting Policies:
The City has conformed to the pronouncements of the GASB, which are the primary authoritative
statements of accounting principles generally accepted in the United States of America applicable to
state and local governments. In accordance with GASB Statement No. 20, the City applies all
applicable Financial Accounting Standards Board (FASB) pronouncements, as well as those of its
predecessors, issued on or before November 30, 1989, unless any such pronouncements contradict
GASB pronouncements. The City also applies all FASB Statements and Interpretations issued after
November 30, 1989, except those that conflict with or contradict GASB pronouncements.
On July 1, 2004, the City adopted, GASB Statement No. 40, Deposit and Investment Risk
Disclosures. This Statement amends GASB Statement No.3, Deposits with Financial Institutions,
Investments (including Repurchase Agreements), and Reverse Repurchase Agreements to address
common deposit and investment risks related to credit risk, concentration of credit risk, interest rate
risk and foreign currency risk. As an element of interest rate risk, this Statement requires certain
disclosures of investments that have fair values, which are highly sensitive to changes in interest
rates. Deposit and investment policies related to the risks identified in this Statement also should be
disclosed. See Note#2.
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.
26
CITY OF RANCHO PALOS VERDES
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2005
NOTE#1— SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, Continued
• 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 Fund — 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 Type:
• Enterprise Funds— Used to finance and account for the acquisition, operation, and maintenance
of the City's facilities and services which are supported primarily by user changes.
• Internal Service Funds— Used to account for the financing of goods or services provided by one
department of the City to other departments on a cost-reimbursement basis.
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 and Changes in Net Assets. These statements present summaries of
Governmental Activities for the City.
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 and
infrastructure as well as 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. The types of transactions reported as program
revenues 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.
Internal balances in the Governmental-wide statements have been eliminated as prescribed by GASB
Statement No. 34.
27
CITY OF RANCHO PALOS VERDES
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2005
NOTE#1— SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, Continued
Governmental Fund Financial Statements
Governmental fund financial statements include a Balance Sheet and Statement of Revenue,
Expenditures, and Changes in Fund Balances for all major governmental funds and aggregated non-
major 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
and the Capital Improvements Capital Projects Fund, as major funds because the City believes the
financial position and activities of these funds 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. Accordingly, only current assets
and current liabilities are included on the Balance Sheets. 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 thereafter to be used to pay liabilities of the current period. Accrued revenues
include property taxes received within 60 days after year-end (see Note #11), 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 government'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 highway users tax used
for street maintenance, right-of-way acquisition and street construction.
The Capital Improvement Capital Projects Fund is used to account for the funds used for the City's
capital improvement projects.
The RDA Debt Service Fund is used to account for the accumulation of resources for, and the
payment of principal and interest on the RDA's debt and other long-term obligations.
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. Their reported fund equity presents
total net assets. The operating statement of the proprietary funds present 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.
28
CITY OF RANCHO PALOS VERDES
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2005
NOTE#1— SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, Continued
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 to customers for sales and services.
Operating expenses for the enterprise and internal service funds include the costs of sales and
services, the costs of 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'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.
The City uses the internal service funds to finance and account for goods and services provided by
one City department to other City department including the purchase and maintenance of equipment,
replacement of buildings and employee benefits.
E. Budgetary Accounting
Annual budgets are adopted on a basis consistent with GAAP for all governmental funds. All annual
appropriations lapse at fiscal year-end. Throughout the year, the City Council made several
supplementing budgetary adjustments to the General fund, Special Revenue funds, Capital Projects
funds, Proprietary funds and the Permanent fund. These adjustments resulted in a net appropriation
increase in the amount of $6,306,543. This increase resulted primarily from amounts carried over
from FY03-04 as continuing appropriations.
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, 2005, based
on calculations by City Management, proceeds of taxes did not exceed related appropriations.
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 is deferred in the advancing
governmental fund and the principal portion of the advance is reported as a reservation of fund
balance.
29
CITY OF RANCHO PALOS VERDES
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2005
NOTE#1— SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, Continued
G. Capital Assets
Capital assets, which include land, machinery and equipment (vehicles, computers, etc.), buildings
and improvements, and infrastructure assets (street systems, storm drains, sewer systems, etc.), 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 25 to 50 years
Vehicles, computers, and equipment 3 to 10 years
Infrastructure Assets
Roadway Network 10 to 100 years
Sewer Network 25 to 50 years
Storm Drain Network 30 to 100 years
Parks and Recreation Network 25 years
H. Employee Compensated Absences
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. There is no fixed payment schedule for employee compensated
absences.
At June 30, 2005, vested accrued vacation and compensatory time amounted to $220,873.
I. Investments
The City has adopted the provisions of Governmental Accounting Standards Board (GASB)
Statement No 31, "Accounting and Financial Reporting for Certain Investments and External Pools",
which require governmental entities to report certain investments at fair value in the balance sheet
and recognize the corresponding change in the fair value of investments in the year in which the
change occurred. In accordance with GASB Statement No. 31, the City has adjusted certain
investments to fair value (when material).
Investments are included within the Financial Statement classifications of "Cash and Cash
Equivalents" and are stated at fair value, (see Note#2).
30
CITY OF RANCHO PALOS VERDES
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2005
NOTE#1— SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, Continued
J. Cash and Cash Equivalents
For purposes of the statement of cash flows of the proprietary funds, all cash and investments with an
original maturity of 90 days or less are considered to be cash and cash equivalents. As explained in
Note #2, the City pools investment funds for maximum return. A substantial portion of these
investments is held in the State Treasurer's Local Agency Investment Pool, which is highly liquid.
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. At June 30, 2005, in the opinion of the City Attorney, the City had no
material claims, which require loss provisions in the financial statements. 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 claims (IBNR). 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. 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.
M. 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, and then unrestricted resources as they are needed.
N. New Pronouncements
GASB Statement No. 42 - In November 2003, the GASB issued Statement No. 42, Accounting and
Financial Reporting for Impairment of Capital Assets and for Insurance Recoveries. This statement
requires governments to measure, recognize, and disclose the effects of capital asset impairments in
their financial statements when it occurs. This statement also clarifies and establishes accounting
requirements for insurance recoveries, including those associated with capital asset impairment. This
statement is not effective until June 30, 2006. The City has not determined its effect on the financial
statements.
31
CITY OF RANCHO PALOS VERDES
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2005
NOTE#1— SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, Continued
GASB Statement No. 43 - In April 2004, the GASB issued Statement No. 43, Financial Reporting for
Postemployment Benefit Plans Other Than Pension Plans. This statement establishes accounting
and financial reporting standards for plans that provide postemployment benefits other than pension
benefits (known as other postemployment benefits or OPEB). This statement is not effective until
June 30, 2007. This statement does is not expected to have a significant impact on the financial
statements of the City.
GASB Statement No. 44 - In May 2004, the GASB issued Statement No. 44, Economic Condition
Reporting: The Statistical Section-an amendment of NCGA Statement No. 1. This Statement
amends the portions of NCGA Statement 1, Governmental Accounting and Financial Reporting
Principles, that guide the preparation of the statistical section. The statistical section presents
detailed information, typically in ten-year trends, that assists users in utilizing the basic financial
statements, notes to basic financial statements, and required supplementary information to assess
the economic condition of a government. This statement is not effective until June 30, 2006. The
City has not determined its effect on the financial statements.
GASB Statement No. 45 - In June 2004, the GASB issued Statement No. 45, Accounting and
Financial Reporting by Employers for Postemployment Benefits Other Than Pensions. This
Statement establishes standards for the measurement, recognition, and display of OPEB
expense/expenditures and related liabilities (assets), note disclosures, and, if applicable, required
supplementary information (RSI) in the financial reports of state and local governmental employers.
This statement is not effective until June 30, 2008. The City has not determined its effect on the
financial statements.
GASB Statement No. 46 — In December 2004, the GASB issued Statement No. 46, Net assets
Restricted by Enabling Legislation, an amendment of GASB No. 34. This statement clarifies that a
legally enforceable enabling legislation restriction is one that a party external to a government can
compel a government to honor. Accordingly, it clarifies the determination of restricted net assets
within the statement of net assets. This statement is not effective until June 30, 2006. The City has
not determined its effect on the financial statements.
GASB Statement No. 47 — In June 2005, the GASB issued Statement No. 47, Accounting for
Termination Benefits. This statement establishes accounting standards for termination benefits. This
statement is not effective until June 30, 2006. The City has not determined its effect on the financial
statements.
NOTE#2— CASH AND INVESTMENTS
Cash and investments as of June 30, 2005, are classified in the accompanying financial statements as
follows:
Governmental Funds $ 30,837,349
Proprietary Funds:
Enterprise Fund 2,000,086
Internal Service Funds 4,578,111
$ 37,415,546
32
CITY OF RANCHO PALOS VERDES
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2005
NOTE#2— CASH AND INVESTMENTS, Continued
Cash and investments as of June 30, 2005 consist of the following:
Cash $ 627,157
Investments 36,788,389
$ 37,415,546
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. The table also identifies certain provisions of the California
Government Code that address interest rate risk, credit risk, and concentration of credit risk.
Maximum Maximum
Authorized Maximum Amount or Percent Investment
Investment Type Maturity of Portfolio in One Issuer
Local Agency Bonds 5 years None None
U.S. Treasury Obligations 5 years None None
U.S. Agency Securities 5 years None None
Banker's Acceptances 180 days 40% 30%
Commercial Paper 270 days 25% 10%
Negotiable Certificates of Deposit 5 years 30% None
Repurchase Agreements 7 days 15% None
Reverse Repurchase Agreements 92 days 20%of base value None
Medium-Term Notes 5 years 30% None
Mutual Funds N/A 20% 10%
Money Market Mutual Funds N/A 15% 5%
Mortgage Pass-Through Securities 5 years 20% None
County Pooled Investment Funds N/A None None
Local Agency Investment Fund (LAIF) N/A None None
JPA Pools (other investment pools) N/A None None
Money Market Savings/Demand Deposits N/A $1 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, the greater the sensitivity of its fair value
to changes in market interest rates. The City's only investment is with the Local Agency Investment Fund
(LAIF) managed by the California State Treasurer. The City's investment is represented by shares in the
pool, which can be withdrawn in one business day. The City's LAIF investment is not subject to rating.
33
CITY OF RANCHO PALOS VERDES
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2005
NOTE#2— CASH AND INVESTMENTS, Continued
Disclosures Relating to Credit Risk
Generally, credit risk is the risk that an issuer of an investment will not fulfill its obligation to the holder of
the investment. This is measured by the assignment of a rating by a nationally recognized statistical
rating organization. The City's LAIF investment is not subject to credit rating.
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, except for
money market funds, which may not exceed five percent per issuer. The City's LAIF investment
represents 100 percent of the City's portfolio.
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 amount of the City of Rancho Palos Verdes' deposits with financial institutions in excess of federal
depository insurance limits that was held in collateralized accounts where the collateral is not held
specifically in the name of the City, as described above, was $594,376 at June 30, 2005.
Investment in State Investment Pool
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 reported in the accompanying
financial statements at amounts based upon the City of Rancho Palos Verdes' pro-rata share of the fair
value provided by LAIF for the entire LAIF portfolio (in relation to the amortized cost of that portfolio). The
balance available for withdrawal is based on the accounting records maintained by LAIF, which are
recorded on an amortized cost basis.
34
CITY OF RANCHO PALOS VERDES
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2005
NOTE#3—INTERFUND TRANSACTIONS
Inter-fund Balances
Inter-fund balances consisted of the following at June 30, 2005:
Due to the General Fund from:
RDA Debt Service Fund $ 75,600
Nonmajor Governmental Funds:
CDBG Special Revenue Fund 122,039
Measure A Special Revenue Fund 1,382,162
Total Non-major Governmental Funds 1,504,201
Total Due to the General Fund $ 1,579,801
General fund monies were used to cover an RDA Debt Service fund negative cash balance for the ERAF
shift and property tax administrative fee. Funds were also advanced to non-major funds to cover grant
expenditures until reimbursement is received from the grant agency.
Inter-fund Advances
The General Fund has advanced the RDA Debt Service Fund amounts as described below:
Balance Balance
July 1, 2004 Additions Deletions June 30, 2005
Advances to the Redevelopment Agency $ 12,024,123 $693,307 $ 12,717,430
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, 2005, no revenue was available to the RDA to repay the advances due to the
City, nor are sufficient revenues expected to be available to repay advances in the immediate future.
Variable interest was accrued at a rate of 5.233 percent during the fiscal year ended June 30, 2005. Of
the $12,717,430 remaining indebtedness, $10,026,476 relates to the Portuguese Bend portion of the
RDA, while $2,690,954 relates to the Abalone Cove portion. During the year ended June 30, 2005,
accrued interest of $498,587 was added to the balance of the advance to the Portuguese Bend Fund,
while principal of $60,907 and accrued interest of $133,813 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.
35
CITY OF RANCHO PALOS VERDES
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2005
NOTE#3—INTERFUND TRANSACTIONS, Continued
Inter-fund Transfers
Inter-fund transfers for the year ended June 30, 2005 consisted of the following:
Transfer From
Nonmajor
General RDA Governmental
Fund Debt Service Funds Total
General Fund $ 14,880 $ 154,071 $ 168,951
O Street Maintenance Fund $ 100,000 582,460 682,460
Capital Improvement Project Fund 2,240,498 2,906,785 5,147,283
C
C Nonmajor Governmental Funds 181,013 181,013
WQ Flood Enterprise 2,000,000 2,000,000
Total $ 4,521,511 $ 14,880 $ 3,643,316 $ 8,179,707
Transfers are used to (1) move revenues from the fund that statute or budget requires to collect them to
the fund that statute or budget requires to expend them 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.
The General Fund also transferred $2,000,000 to provide the initial funding for the Water Quality and
Flood Control Enterprise Fund.
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 infrastructure, whereby depreciation
expense and accumulated depreciation has been recorded. The following table presents the capital
assets activity for the year ended June 30, 2005.
36
CITY OF RANCHO PALOS VERDES
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2005
NOTE#4— CAPITAL ASSETS AND DEPRECIATION, Continued
Depreciation expense was charged to functions/programs of the primary government as follows:
Beginning Ending
Governmental Activities Balance Increases Decreases Balance
Capital assets not being depreciated:
Land $ 15,058,724 $15,058,724
Construction in progress 1,465,162 $ 4,309,074 $(1,451,640) 4,322,596
Total capital assets not being depreciated 16,523,886 4,309,074 (1,451,640) 19,381,320
Capital assets being depreciated:
Buildings and improvements 3,197,989 3,197,989
Vehicles 177,069 177,069
Computer equipment 283,377 103,878 387,255
Furniture, fixtures and equipment 397,176 (13,715) 383,461
Infrastructure
Roadway system 76,602,509 1,130,785 (654,268) 77,079,026
Sewer system 25,755,463 25,755,463
Storm drain system 11,820,872 634,526 12,455,398
Parks system 5,575,075 5,575,075
Total capital assets being depreciated 123,809,530 1,869,189 (667,983) 125,010,736
Less accumulated depreciation for:
Buildings and improvements (1,082,990) (63,960) (1,146,950)
Vehicles (148,241) (13,254) (161,495)
Computer equipment (146,413) (87,267) (233,680)
Furniture,fixtures and equipment (179,120) (45,704) 13,715 (211,109)
Infrastructure
Roadway system (27,400,986) (2,062,763) 654,268 (28,809,481)
Sewer system (14,120,401) (456,933) (14,577,334)
Storm drain system (1,153,170) (326,853) (1,480,023)
Parks system (3,602,722) (145,909) (3,748,631)
Total accumulated depreciation (47,834,043) (3,202,643) 667,983 (50,368,703)
Total capital assets being depreciated, net 75,975,487 (1,333,454) - 74,642,033
Governmental activities capital assets, net $92,499,373 $ 2,975,620 $(1,451,640) $94,023,353
Depreciation expense was charged to functions/programs of the primary government as follows:
Administration $ 63,960
Public works, including depreciation of general infrastructure assets 2,846,549
Recreation services 145,909
Capital assets held by the City's internal service funds are charged to the various
functions based on their usage of the assets 146,225
Total Depreciation Expense- Governmental Activities $ 3,202,643
37
CITY OF RANCHO PALOS VERDES
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2005
NOTE#5—LONG-TERM DEBT
Balance
July 1, 2004 Balance Amount Due
(Restated) Additions Deletions June 30, 2005 in 2005
RDA Tax Increment Bond $ 5,455,000 $ 5,000 $ 5,450,000 $ 15,000
RDA Deferred Interest Payable 2,647,756 178,850 2,468,906
Employee compensated absences 193,938 $ 157,836 130,901 220,873 149,081
Totals $ 8,296,694 $ 157,836 $ 314,751 $ 8,139,779 $ 164,081
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 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
Maintenance Permanent Trust 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 ending 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 ending June 30, 2002, with interest at 7.7654 percent.
On November 1, 1997, the City, RDA and County of Los Angeles entered into a Memorandum of
Understanding (MOU) agreeing to restructure the repayment schedule of the debt owed the County
by the RDA. In accordance with the terms of the MOU, the $10,000,000 loan principal owed 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.
38
CITY OF RANCHO PALOS VERDES
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2005
NOTE#5—LONG-TERM DEBT, Continued
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 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 will
mature 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 is $3,111,400. In accordance with the MOU, the recalculated deferred interest does
not accrue additional interest. As of June 30, 2005, a total of$642,494 in accumulated tax increment
has been applied against this balance, including $178,850 applied during fiscal year 2004-05. The
remaining balance at June 30, 2005, was $2,468,906. 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, 2005.
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, 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 revenues, no amounts have been included in the following
schedule for repayment of the deferred interest.
Year Ended Tax Allocation Bond
June 30 Principal Interest Total
2006 $ 15,000 272,125 287,125
2007 25,000 271,125 296,125
2008 40,000 269,500 309,500
2009 55,000 268,125 323,125
2010 65,000 265,125 330,125
2011-2015 595,000 1,246,875 1,841,875
2016-2020 1,145,000 1,033,375 2,178,375
2021-2025 1,900,000 657,500 2,557,500
2026-2029 1,610,000 125,000 1,735,000
$ 5,450,000 $ 4,408,750 $ 9,858,750
B. Employee Compensated Absences
There is no fixed payment schedule for employee compensated absences. Based on historical
trends, $149,081 is estimated to be the amount that will be used and/or paid out during FY 04-05.
39
CITY OF RANCHO PALOS VERDES
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2005
NOTE#6— CLASSIFICATIONS OF NET ASSETS AND FUND BALANCE
In the Government-Wide financial statements net assets are classified in the following categories:
Invested in Capital Assets
This category groups all capital assets, including infrastructure, into one component of net assets.
Accumulated depreciation on these assets reduces this category.
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.
In the Fund Financial Statements the City has established "reserves" to segregate portions of fund
balance which are not appropriable for expenditure in future periods, or which are legally set aside for a
specific future use. In addition, fund balance may be designated to indicate tentative plans for financial
resource utilization of unreserved fund balance in a future period.
The City's governmental funds reserves and designations at June 30, 2005 are presented below, followed
by explanations of the nature and purpose of each reserve and designation.
Steet Capital RDA Debt Other
General Maintenance Improvement Service Governmental
Fund Fund Fund Fund Funds
Reserved:
Reimbursement
settlement agreement $ 1,000,000
Advances to other funds $ 5,978,814
Prepaid costs 41,159 $314,937 16,959
Land held for development 702,392
Housing set-aside 1,112,968
Total Reserved $ 6,019,973 $ - $ - $314,937 $ 2,832,319
Designated:
Continuing appropriations $ 657,270 $ 320,000 $ 2,415,599 $ - $ 295,374
A. Designated for Encumbrances and Continuing Appropriations
These designations are maintained for current year budget appropriations that are formally carried
over into the subsequent fiscal year.
B. Reserved for Reimbursement Settlement Agreement
This reserve has been established under the legal requirements of the Reimbursement Settlement
Agreement(see Note#5).
40
CITY OF RANCHO PALOS VERDES
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2005
NOTE#6— CLASSIFICATIONS OF NET ASSETS AND FUND BALANCE, Continued
C. Reserved for Advances to Other Funds
This reserve represents the long-term portion of loans from the City's General Fund to the RDA less
$6,738,616 recorded as deferred revenue(see Note#12).
D. Reserved for Prepaid Items
This reserve is provided to indicate that the asset carrying value is not available to spend to meet
expenditures of the current year.
E. Reserved for Land Held for Development
These funds are reserved for land purchased by the City to be sold or otherwise used for the
development of low and moderate-income housing.
F. Reserved for Housing Set-Aside
These funds are reserved for low and moderate-income housing as restricted by law or administrative
action.
NOTE#7—PENSION PLAN
Plan Description
The City's defined benefit pension plan provides retirement and disability benefits, annual cost-of-living
adjustments, and death benefits to plan members and beneficiaries. The Plan is part of the Public
Agency portion of the California Public Employees Retirement System (CalPERS), an agent multiple-
employer plan administrated by CalPERS, which acts as a common investment and administrative agent
for participating public employers within the State of California. 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 CalPERS and adopts those benefits
through local ordinance. The CalPERS issues a separate comprehensive annual financial report. Copies
of the CalPERS annual financial report may be obtained from the CalPERS Executive Office — 400 P
Street, Sacramento, California, 95814.
Funding Policy
A contribution of 7 percent of annual covered salary is required for each active plan member. For local
miscellaneous members, the City pays the full 7 percent contribution for all the full-time positions, while
part-time employees must contribute the 7 percent from earnings. Additionally, the City is required to
contribute the actuarially determined remaining amounts necessary to fund the benefits for its members.
The actuarial methods and assumptions used are those adopted by the CalPERS Board of
Administration. The required employer contribution rate for FY 04-05 was 8.537 percent for local
miscellaneous members. The contribution requirements of the plan members are established by State
statute and the employer contribution rate is established and may be amended by CalPERS.
41
CITY OF RANCHO PALOS VERDES
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2005
NOTE#7—PENSION PLAN, Continued
Annual Pension Cost
For FY04-05, the City's actual and contributed pension cost was $411,412. The required contribution for
FY03-04 was determined as part of the June 30, 2002 actuarial valuation using the entry age normal
actuarial cost method with the contributions determined as a percent of pay. The actuarial assumptions
included (a) 8.25 percent investment rate of return (net of administrative expenses); (b) projected salary
increases that vary by duration of service ranging from 3.75 percent to 14.20 percent; and (c) payroll
growth of 3.75 percent. Both (a) and (b) include an inflation component of 3.5 percent. The actuarial
value of the Plan's assets was determined using a technique that smoothes the effect of short-term
volatility in the market value of investments over a two to five year period depending on the size of
investment gains and/or losses. The Plan's un-funded actuarial accrued liability (or excess assets) is
being amortized as a level percentage of projected payroll expenditures on a closed basis.
Three-Year Trend Information for Plan (Unaudited):
Annual Percentage
Fiscal Year Pension Cost of APC Net Pension
Ending (APC) Contributed Obligation
6/30/2003 $ 167,423 100% $ 0
6/30/2004 267,684 100% $ 0
6/30/2005 411,412 100% $ 0
Schedule of Funding Status of Plan:
Actuarial Entry Age Unfunded Annual
Valuation Value of Normal Accrued (Overfunded) Funded Covered UAAL as a
Date Assets Liability Liability Ratio Payroll % of Payroll
6/30/2001 $7,445,220 $ 6,515,182 $ (930,038) 114.3% $2,086,935 -44.6%
6/30/2002 7,178,677 7,477,012 298,335 96.0% 2,455,956 12.1%
6/30/2003 7,413,891 8,964,495 1,550,604 82.7% 2,904,427 53.4%
NOTE#8—INSURANCE
Description of Self-Insurance Pool Pursuant to Joint Powers Agreement
The City is a member of the California Joint Powers Insurance Authority (CJPIA). The CJPIA is
comprised of 106 California public entities and is organized under a joint powers agreement pursuant to
California Government Code section 6500 et seq. The purpose of the CJPIA is to arrange and administer
programs for the pooling of self-insured losses and to purchase excess insurance or reinsurance, and to
arrange for group-purchased insurance for property and other coverage. The CJPIA pool 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 9-member Executive Committee. The accounting
methods used by the CJPIA are more fully described at Note#1-K.
42
CITY OF RANCHO PALOS VERDES
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2005
NOTE#8—INSURANCE, Continued
Self-Insurance Programs of the CJPIA
• General Liability
Each member government pays a primary deposit to cover estimated losses for a fiscal year
(claims year). Six months after the close of a fiscal year, outstanding claims are valued. A
retrospective deposit computation is then made for each open claims year. Costs are spread to
members as follows: the first $30,000 of each occurrence is charged directly to the member;
costs from $30,001 to $750,000 are pooled based on a member's share of costs under $30,000;
costs from $750,001 to $15,000,000 are pooled based on payroll. Costs of covered claims above
$15,000,000 are currently paid by reinsurance. The protection for each member is $50,000,000
per occurrence and $50,000,000 annual aggregate.
• Workers' Compensation
Workers' Compensation. The City also participates in the workers' compensation pool
administered by the Authority. Members retain the first $50,000 of each claim. Claims are
pooled separately between public safety and non-public safety. Loss development reserves are
allocated by pool and by loss layer($0 to$100,000 allocated by retained amount and $100,000 to
$2,000,000 by payroll). Losses from $50,000 to $100,000 and the loss development reserve
associated with losses up to $100,000 are pooled based on the member's share of losses under
$50,000. Losses from $100,000 to $2,000,000 and loss development reserves associated with
losses from $100,000 to $2,000,000 are pooled based on payroll. Costs from $2,000,000 to
$50,000,000 are transferred to an excess insurance policy. Costs in excess of $50,000,000 are
pooled among the Members based on payroll. Administrative expenses are paid from the
Authority's investment earnings.
Purchased Insurance
• Environmental Insurance
The City participates in the pollution legal liability and remediation legal liability insurance, which
is available through the CJPIA. 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 CJPIA has a limit of$120,000,000 for the 3-year period from
July 1, 2002 through June 30, 2005. Each member of the CJPIA has a $10,000,000 limit during
the 3-year term of the policy.
• Property Insurance
The City participates in the all-risk property protection program of the CJPIA. Several insurance
companies underwrite this insurance protection. The City's property is currently insured
according to a schedule of covered property submitted by the City to the CJPIA. Total all-risk
property insurance coverage is $9,998,902. There is a $5,000 per loss deductible. Premiums for
the coverage are paid annually and are not subject to retroactive adjustments.
43
CITY OF RANCHO PALOS VERDES
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2005
NOTE#8—INSURANCE, Continued
• 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 CJPIA. The City's property
currently has earthquake protection in the amount of$9,304,688. There is a deductible of 5% of
value with a minimum deductible of$100,000. Premiums for the coverage are paid annually and
are not subject to retroactive adjustments.
Adequacy of Protection
During the past three fiscal (claims) years none of the above programs of protection have had
settlements or judgments that exceeded pooled or insured coverage. There have been no significant
reductions in pooled or insured liability coverage in the year ended June 30, 2005. As previously
described in Note #1-K, the City has no material claims, which would require loss provisions in the
financial statements.
NOTE#9—ASSESSMENT DISTRICTS BOND ISSUES
Assessment District No. 9 issued special assessment bonds for the purpose of public improvements
under the Municipal Improvement acts of 1911 and 1913. Neither the faith, credit, not taxing power of the
City is pledged to the repayment of the bonds. The City is only acting as an agent for the property
owners and bondholders in collecting and forwarding the special assessment. The final principal
payment was made during FY 04-05.
NOTE#10— CONTINGENCIES AND COMMITMENTS
Litigation
In the normal course of operations, the City has been named as a defendant in various claims and legal
actions. In the opinion of management and legal counsel, the ultimate liability for these legal actions and
claims will not have a material adverse effect on the City's general-purpose financial statements.
Storm Drain Failures
During the winter storms of fiscal year 2004-05 emergency repairs were required to fix sinkholes along its
border with the City of Los Angeles. The sink holes were created as a result of failures in the storm drain
system. One sinkhole was repaired by the City at a cost of approximately$650,000. The City received
reimbursement from the Federal Emergency Management Agency in the amount of approximately
$634,000 related to the repairs; however, it is unclear whether the final costs will be allowable under
FEMA guidelines. If the costs are not allowed, the funding would have to be returned.
Other sinkholes were repaired by Caltrans at a cost estimated to be as high as $10 million. It is unclear
whether Caltrans will seek reimbursement from the City, or in what amount, in connection with these
repairs.
The City is working with FEMA, the Federal Highway Administration (FHWA), Caltrans, and the City and
County of Los Angeles to resolve the issues of responsibility for repair and funding sources.
The repairs of the sinkholes also brought to light issues with other storm drains in the area. The City's
share of costs for preventative and/or emergency repairs, if required, is unknown.
44
CITY OF RANCHO PALOS VERDES
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2005
NOTE#11—PROPERTY TAXES
Under California law, property taxes are assessed and collected by the counties up to 1 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 March 1
Levy date June 30
Due date November 1 and February 1
Collection dates December 10 and April 10
NOTE#12—DEFERRED REVENUES
The deferred revenues in the fund financial statements of the City of Rancho Palos Verdes as of June 30,
2005 consisted of the following:
Source General Fund
Accrued Interest from Long-Term Advances
to the Redevelopment Agency $ 6,738,616
Advance on Federal Grant 19,942
Revenue earned but not available 193,204
Total Deferred Revenues $ 6,951,762
NOTE#13—LAND HELD FOR DEVELOPMENT AND EXCESS HOUSING FUNDS
On March 21, 2000, the City purchased approximately 20 acres of land to be used for an affordable
housing project. The total cost of the land was $702,392. The City has recorded the cost of the land as
an asset in the special revenue fund that purchased the property(Housing Set-Aside fund).
A developer has submitted an application for a senior condominium housing project, with an affordable
housing component, which includes the City owned parcel and a neighboring private parcel. If approved,
the City anticipates transferring the City's land to the developer for construction of the housing project.
The City will recognize a gain or loss on the disposal of the land at the time a disposition and
development agreement is finalized. The fund balance in the Housing Set-Aside fund has been reserved
for an amount equal to the purchase price of the land.
In the event the Crestridge property is not used for low or moderate income housing, or in the event the
property is used for a purpose that may not be charged against the Housing Set-Aside fund in the full
amount of $702,392, then all, or a portion of the $702,392 purchase price must be reimbursed to the
Housing Set-Aside fund.
The fund balance exceeds $1 million at June 30, 2005. The amount exceeding $1 million is defined as
"excess surplus." In the event of the occurrence of excess surplus, the RDA may be required to either
transfer the excess surplus to the County Housing Authority within one year, or establish a program to
expend the excess surplus within one year and spend such excess within an additional two years. The
Community Redevelopment Law sets forth substantial penalties if the RDA fails to properly dispose of
excess surplus funds.
45
CITY OF RANCHO PALOS VERDES
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2005
NOTE#14— OTHER REQUIRED FUND DISCLOSURES
The following funds had deficit fund balance as of June 30, 2005:
RDA Debt Service Fund $ 12,478,093
CDBG Fund $ 65,979
The City plans to finance this deficit through future revenues to the funds.
The following funds had expenditure in excess of the budget for the year ended June 30, 2005, as
follows:
Budget Expenditures Excess
RDA Debt Service Fund $ 1,111,625 $ 1,290,164 $ 178,539
RDA Portugues Bend Capital Projects Fund $ 23,810 $ 29,629 $ 5,819
NOTE#15—RESTATEMENT OF NET ASSETS
During the 2004-05 fiscal year the City reevaluated the accounting treatment of the excess tax increment
in connection with the City's Memorandum of Understanding (MOU)with the County of Los Angeles (see
Note 5A). As a result, the City restated beginning fund balance in the RDA Debt Service Fund to reduce
the prepaid asset by the amount that Los Angeles County has applied to the deferred interest liability.
The following is a summary of the effect of the restatement:
RDA Debt Service Fund fund balance, as previously reported $ (11,305,005)
Effect of change in accounting for excess tax increment (463,644)
RDA Debt Service Fund fund balance, as restated $ (11,768,649)
46
SUPPLEMENTARY INFORMATION
CITY OF RANCHO PALOS VERDES
JUNE 30, 2005
MAJOR FUND BUDGETARY COMPARISON SCHEDULES
Budgetary comparison statements are presented as part of the basic financial
statements for the General fund and the major Special Revenue fund as provided
for by GASB Statement No. 34. The budgetary comparison schedules for the
remaining major funds are presented to aid in additional analysis and are not a
required part of the basic financial statements.
47
CITY OF RANCHO PALOS VERDES
SCHEDULE OF REVENUES, EXPENDITURES
AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL
CAPITAL IMPROVEMENTS CAPITAL PROJECTS FUNC
FOR THE YEAR ENDED JUNE 30, 2005
Variance with
Final Budget-
Budgeted Amounts Actual Positive
Original Final Amounts (Negative)
REVENUES
Use of money and property $ 6,600 $ 6,600 $ 26,023 $ 19,423
Revenue from other agencies 27,291 1,163,794 1,136,503
Total Revenues 6,600 33,891 1,189,817 1,155,926
EXPENDITURES
Current:
Public works 352,921 916,203 1,231,952 (315,749)
Capital outlay 1,969,250 4,951,406 4,358,419 592,987
Total Expenditures 2,322,171 5,867,609 5,590,371 277,238
Excess (Deficiency)of Revenues
Over Expenditures (2,315,571) (5,833,718) (4,400,554) 1,433,164
OTHER FINANCING SOURCES (USES)
Transfers in 2,322,171 8,410,907 5,147,283 (3,263,624)
Net Change in Fund Balance 6,600 2,577,189 746,729 (1,830,460)
Fund Balance, Beginning of Year 1,668,870 1,668,870 1,668,870
Fund Balance, End of Year $ 1,675,470 $ 4,246,059 $ 2,415,599 $ (1,830,460)
48
CITY OF RANCHO PALOS VERDES
SCHEDULE OF REVENUES, EXPENDITURES
AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL
RDA DEBT SERVICE FUND
FOR THE YEAR ENDED JUNE 30, 2005
Variance with
Final Budget-
Budgeted Amounts Actual Positive
Original Final Amounts (Negative)
REVENUES
Taxes $ 478,600 $ 478,600 $ 595,600 $ 117,000
EXPENDITURES
Current:
Administration 13,300 13,300 12,930 370
Pass through to other agencies 100,750 188,750 188,359 391
Debt Service
Principal 5,000 5,000 183,850 (178,850)
Interest and fiscal charges 904,575 904,575 905,025 (450)
Total Expenditures 1,023,625 1,111,625 1,290,164 (178,539)
Excess (Deficiency)of Revenues
Over Expenditures (545,025) (633,025) (694,564) (61,539)
OTHER FINANCING SOURCES (USES)
Transfers out (14,880) (14,880)
Total Other Financing Sources (Uses) - - (14,880) (14,880)
Net Change in Fund Balance (545,025) (633,025) (709,444) (76,419)
Fund Balance, Beginning of Year, as restated (11,768,649) (11,768,649) (11,768,649)
Fund Balance, End of Year $(12,313,674) $(12,401,674) $(12,478,093) $ (76,419)
49
CITY OF RANCHO PALOS VERDES
JUNE 30, 2005
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).
EI Prado —to account for taxes collected to maintain and service existing and proposed improvements.
Redevelopment Agency (RDA) — Housing Set-Aside — 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.
Proposition A—to account for the City's 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.
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 — to account for revenues and costs associated with the
City's landscaping and lighting district.
1911 Act Lighting District — to account for revenue and costs associated with a lighting district
transferred to the "city-wide" landscape and lighting district from the County in 1995.
Joint Powers Improvement Authority OPIA) — 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 future habitat restoration efforts on City owned property.
50
CITY OF RANCHO PALOS VERDES
JUNE 30, 2005
NONMAJOR GOVERNMENTAL FUNDS
Special Revenues Fund Descriptions, Continued
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.
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.
Capital Projects Funds Descriptions
Capital Projects Funds are used to account for financial resources used for the acquisition or
construction of major capital facilities.
Bikeways —to account for State funds used for the construction of bikeways and/or pedestrian facilities.
Redevelopment Agency (RDA) — Abalone Cove — to account for landslide abatement in the Abalone
Cove Project Area.
Environmental Excise Tax — to account for taxes received in connection with new construction within
the City.
Quimby — to account for funds from the payment of fees or the dedication of land for park and
recreation purposes.
Affordable Housing — to account for in-lieu fees by developers for the City to construct low and
moderate income housing.
Redevelopment Agency (RDA) — Portuguese Bend — to account for monies used for landslide
abatement in the Portuguese Bend Project Area.
Utility Undergrounding — to account for the accumulation of monies transferred from the General fund,
to be used for relocating utility poles and lines on arterial roadways underground, and provide residents
assistance with utility undergrounding in residential areas of the City.
Roadway Beautification — to account for the accumulation of monies transferred from the General and
Recycling funds to be used for landscape improvements along the City's roadways.
51
CITY OF RANCHO PALOS VERDES
JUNE 30, 2005
NONMAJOR GOVERNMENTAL FUNDS
Permanent Fund Description
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.
Joint Powers Improvement Authority (JPIA) —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 deposit of nonexpendable principal. The interest
earnings are used to pay for maintenance and repair of Abalone Cove landslide abatement
improvements.
52
CITY OF RANCHO PALOS VERDES
NON-MAJOR GOVERNMENTAL FUNDS
COMBINING BALANCE SHEET
JUNE 30, 2005
Special Revenue Funds
Air Quality
ASSETS Management CDBG EI Prado
Cash and cash equivalents $ 34,162 $ 4,491
Receivable
Taxes 56
Interest 190 40
Other $ 117,861
Prepaid items 1,462
Land held for development
Total Assets $ 34,352 $ 119,323 $ 4,587
LIABILITIES AND FUND BALANCES
LIABILITIES
Accounts payable and accrued liabilities $ 63,263 $ 41
Due to other funds 122,039
Total Liabilities - 185,302 41
FUND BALANCES
Reserved for:
Reimbursement settlement agreement
Prepaid items 1,462
Land development
Housing set-aside
Unreserved:
Designated for continuing appropriations
Unreserved, undesignated and reported in:
Special revenue funds $ 34,352 (67,441) 4,546
Capital projects funds
Permanent funds
Total Fund Balances 34,352 (65,979) 4,546
Total Liabilities and
Fund Balances $ 34,352 $ 119,323 $ 4,587
53
CONTINUED ON NEXT PAGE
Special Revenue Funds
Redevelopment
Agency-
Housing Proposition Proposition Waste
Set-Aside A C Beautification Reduction
$ 1,103,423 $ 730,518 $ 890,102 $ 784,056 $ 511,211
1,505 4,586 8,319
8,040 5,553 3,666
78,247 13,604
702,392
$ 1,815,360 $ 735,104 $ 898,421 $ 867,856 $ 528,481
$ 718 $ 15,298 $ 9,469
- 718 - 15,298 9,469
$ 702,392
1,112,968
734,386 $ 898,421 852,558 519,012
1,815,360 734,386 898,421 852,558 519,012
$ 1,815,360 $ 735,104 $ 898,421 $ 867,856 $ 528,481
54
CITY OF RANCHO PALOS VERDES
NON-MAJOR GOVERNMENTAL FUNDS
COMBINING BALANCE SHEET (CONTINUED)
JUNE 30, 2005
Special Revenue Funds
Public
Safety
ASSETS Grants 1972 Act 1911 Act
Cash and cash equivalents $ 61,574 $ 134,827 $ 1,273,805
Receivable
Taxes 5,114 15,158
Interest 1,126 2,721 8,675
Other
Prepaid items
Land held for development
Total Assets $ 62,700 $ 142,662 $ 1,297,638
LIABILITIES AND FUND BALANCES
LIABILITIES
Accounts payable and accrued liabilities $ 1,437 $ 38,147
Due to other funds
Total Liabilities - 1,437 38,147
FUND BALANCES
Reserved for:
Reimbursement settlement agreement
Prepaid items
Land development
Housing set-aside
Unreserved:
Designated for continuing appropriations $ 45,816
Unreserved, undesignated and reported in:
Special revenue funds 16,884 141,225 1,259,491
Capital projects funds
Permanent funds
Total Fund Balances 62,700 141,225 1,259,491
Total Liabilities and
Fund Balances $ 62,700 $ 142,662 $ 1,297,638
55
CONTINUED ON NEXT PAGE
Special Revenue Funds
Joint Powers
Improvement Abalone Cove
Authority- Sewer
Portuguese Habitat Subregion One Assessment
Bend Restoration Maintenance Measure A District
$ 310,957 $ 309,651 $ 795,353 $ 51,933
1,615 1,618 5,488 $ 512 272
1,437,642 904
$ 312,572 $ 311,269 $ 800,841 $ 1,438,154 $ 53,109
$ 51,331 $ 10,684 $ 2,236 $ 6,667
$ 1,382,162
51,331 10,684 2,236 1,382,162 6,667
220,500 29,058
261,241 80,085 798,605 55,992 17,384
261,241 300,585 798,605 55,992 46,442
$ 312,572 $ 311,269 $ 800,841 $ 1,438,154 $ 53,109
56
CITY OF RANCHO PALOS VERDES
NON-MAJOR GOVERNMENTAL FUNDS
COMBINING BALANCE SHEET (CONTINUED)
JUNE 30, 2005
Capital Projects Funds
Redevelopment
Agency-
Abalone Environmental
ASSETS Bikeways Cove Excise Tax Quimby
Cash and cash equivalents $ 25,087 $ 5,112 $ 731,843 $ 517,816
Receivable
Taxes
Interest 173 98 5,010 3,555
Other
Prepaid items
Land held for development
Total Assets $ 25,260 $ 5,210 $ 736,853 $ 521,371
LIABILITIES AND FUND BALANCES
LIABILITIES
Accounts payable and accrued liabilities
Due to other funds
Total Liabilities - - - -
FUND BALANCES
Reserved for:
Reimbursement settlement agreement
Prepaid items
Land development
Housing set-aside
Unreserved:
Designated for continuing appropriations
Unreserved, undesignated and reported in:
Special revenue funds
Capital projects funds $ 25,260 $ 5,210 $ 736,853 $ 521,371
Permanent funds
Total Fund Balances 25,260 5,210 736,853 521,371
Total Liabilities and
Fund Balances $ 25,260 $ 5,210 $ 736,853 $ 521,371
57
Permanent
Capital Projects Funds Fund
Joint Powers
Redevelopment Improvement Total
Agency- Authority- Non-major
Affordable Portuguese Utility Roadway Abalone Governmental
Housing Bend Undergrounding Beautification Cove Funds
$ 1,031,261 $ 327,359 $ 240,099 $ 418,169 $ 1,418,254 $ 11,711,063
34,738
7,081 2,449 1,648 2,871 10,529 72,930
1,648,258
15,497 16,959
702,392
$ 1,038,342 $ 345,305 $ 241,747 $ 421,040 $ 1,428,783 $ 14,186,340
$ 192 $ 2,496 $ 201,979
1,504,201
- 192 - - 2,496 1,706,180
1,000,000 1,000,000
15,497 16,959
702,392
1,112,968
295,374
5,606,741
$ 1,038,342 329,616 $ 241,747 $ 421,040 3,319,439
426,287 426,287
1,038,342 345,113 241,747 421,040 1,426,287 12,480,160
$ 1,038,342 $ 345,305 $ 241,747 $ 421,040 $ 1,428,783 $ 14,186,340
58
CITY OF RANCHO PALOS VERDES
NON-MAJOR GOVERNMENTAL FUNDS
COMBINING STATEMENT OF REVENUES, EXPENDITURES
AND CHANGES IN FUND BALANCES
YEAR ENDED JUNE 30, 2005
Special Revenue Funds
Air Quality
Management CDBG EI Prado
REVENUES
Taxes $ 1,472
Use of money and property $ 386 224
Revenue from other agencies 38,094 $ 601,055
Other revenues
Total Revenues 38,480 601,055 1,696
EXPENDITURES
Current:
Administration
Public safety
Public works 49,818 129,351 9,381
Capital outlay 504,686
Total Expenditures 49,818 634,037 9,381
Excess (Deficiency)of Revenues Over
Over Expenditures (11,338) (32,982) (7,685)
Other Financing Sources (Uses):
Transfers in
Transfers out (33,534)
Total Other Financing Sources (Uses) - (33,534) -
Net Change in Fund Balances (11,338) (66,516) (7,685)
FUND BALANCES, Beginning of Year 45,690 537 12,231
FUND BALANCES, End of Year $ 34,352 $ (65,979) $ 4,546
59
CONTINUED ON NEXT PAGE
Special Revenue Funds
Redevelopment
Agency-
Housing Proposition Proposition Waste
Set-Aside A C Beautification Reduction
$ 146,000
23,131 $ 11,910 $ 22,652 $ 271,901 $ 33,025
623,682 517,456 55,866
169,131 635,592 540,108 271,901 88,891
436,808 174,417 67,853
- 436,808 - 174,417 67,853
169,131 198,784 540,108 97,484 21,038
(11,680) (389,167) (50,000)
- (11,680) (389,167) - (50,000)
169,131 187,104 150,941 97,484 (28,962)
1,646,229 547,282 747,480 755,074 547,974
$ 1,815,360 $ 734,386 $ 898,421 $ 852,558 $ 519,012
60
CITY OF RANCHO PALOS VERDES
NON-MAJOR GOVERNMENTAL FUNDS
COMBINING STATEMENT OF REVENUES, EXPENDITURES
AND CHANGES IN FUND BALANCES (CONTINUED;
YEAR ENDED JUNE 30, 2005
Special Revenue Funds
Public
Safety
Grants 1972 Act 1911 Act
REVENUES
Taxes $ 324,738 $ 401,577
Use of money and property $ 2,953 5,989 25,849
Revenue from other agencies 100,000
Other revenues
Total Revenues 102,953 330,727 427,426
EXPENDITURES
Current:
Administration
Public safety 2,884
Public works 55,412 321,047
Capital outlay
Total Expenditures 2,884 55,412 321,047
Excess (Deficiency)of Revenues Over
Over Expenditures 100,069 275,315 106,379
Other Financing Sources (Uses):
Transfers in
Transfers out (100,000) (285,000)
Total Other Financing Sources (Uses) (100,000) (285,000) -
Net Change in Fund Balances 69 (9,685) 106,379
FUND BALANCES, Beginning of Year 62,631 150,910 1,153,112
FUND BALANCES, End of Year $ 62,700 $ 141,225 $ 1,259,491
61
CONTINUED ON NEXT PAGE
Special Revenue Funds
Joint Powers
Improvement Abalone Cove
Authority- Sewer
Portuguese Habitat Subregion One Parks/ Assessment
Bend Restoration Maintenance Measure A District
$ 42,767
$ 5,118 $ 5,371 $ 17,216 $ 1,315 745
2,761,161
5,118 5,371 17,216 2,762,476 43,512
67,718 50,197 33,629 39,942
67,718 50,197 33,629 - 39,942
(62,600) (44,826) (16,413) 2,762,476 3,570
91,500 76,752 12,761
(2,773,935)
91,500 76,752 - (2,773,935) 12,761
28,900 31,926 (16,413) (11,459) 16,331
232,341 268,659 815,018 67,451 30,111
$ 261,241 $ 300,585 $ 798,605 $ 55,992 $ 46,442
62
CITY OF RANCHO PALOS VERDES
NON-MAJOR GOVERNMENTAL FUNDS
COMBINING STATEMENT OF REVENUES, EXPENDITURES
AND CHANGES IN FUND BALANCES (CONTINUED;
YEAR ENDED JUNE 30, 2005
Capital Projects
Redevelopment
Agency-
Abalone Environmental
Bikeways Cove Excise Tax Quimby
REVENUES
Taxes
Use of money and property $ 373 $ 932 $ 66,864 $ 21,277
Revenue from other agencies 24,887
Other revenues
Total Revenues 25,260 932 66,864 21,277
EXPENDITURES
Current:
Administration
Public safety
Public works 650 57,209
Capital outlay 49,087
Total Expenditures - 49,737 57,209 -
Excess (Deficiency)of Revenues Over
Over Expenditures 25,260 (48,805) 9,655 21,277
Other Financing Sources (Uses):
Transfers in
Transfers out
Total Other Financing Sources (Uses) - - - -
Net Change in Fund Balances 25,260 (48,805) 9,655 21,277
FUND BALANCES, Beginning of Year 54,015 727,198 500,094
FUND BALANCES, End of Year $ 25,260 $ 5,210 $ 736,853 $ 521,371
63
Permanent
Capital Projects Fund
Joint Powers
Redevelopment Improvement Total
Agency- Authority- Non-major
Affordable Portuguese Utility Roadway Abalone Governmental
Housing Bend Undergrounding Beautification Cove Funds
$ 916,554
$ 21,960 $ 7,391 $ 5,112 $ 8,904 $ 32,332 592,930
4,722,201
50,004 50,004
21,960 57,395 5,112 8,904 32,332 6,281,689
2,884
29,629 24,316 1,547,377
553,773
- 29,629 - - 24,316 2,104,034
21,960 27,766 5,112 8,904 8,016 4,177,655
181,013
(3,643,316)
- - - - - (3,462,303)
21,960 27,766 5,112 8,904 8,016 715,352
1,016,382 317,347 236,635 412,136 1,418,271 11,764,808
$ 1,038,342 $ 345,113 $ 241,747 $ 421,040 $ 1,426,287 $ 12,480,160
64
CITY OF RANCHO PALOS VERDES
SCHEDULE OF REVENUES, EXPENDITURES
AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL
AIR QUALITY MANAGEMENT SPECIAL REVENUE FUNC
FOR THE YEAR ENDED JUNE 30, 2005
Variance with
Final Budget-
Budgeted Amounts Actual Positive
Original Final Amounts (Negative)
REVENUES
Use of money and property $ 1,100 $ 1,100 $ 386 $ (714)
Charges for services 48,000 48,000 38,094 (9,906)
Total Revenues 49,100 49,100 38,480 (10,620)
EXPENDITURES
Current:
Public works 49,913 49,913 49,818 95
Net Change in Fund Balance (813) (813) (11,338) (10,525)
Fund Balance, Beginning of Year 45,690 45,690 45,690
Fund Balance, End of Year $ 44,877 $ 44,877 $ 34,352 $ (10,525)
65
CITY OF RANCHO PALOS VERDES
SCHEDULE OF REVENUES, EXPENDITURES
AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL
COMMUNITY DEVELOPMENT BLOCK GRANT SPECIAL REVENUE FUNS
FOR THE YEAR ENDED JUNE 30, 2005
Variance with
Final Budget-
Budgeted Amounts Actual Positive
Original Final Amounts (Negative)
REVENUES
Revenue from other agencies $ 229,404 $ 229,404 $ 601,055 $ 371,651
EXPENDITURES
Current:
Public works 137,840 169,240 129,351 39,889
Capital outlay 57,154 579,654 504,686 74,968
Total Expenditures 194,994 748,894 634,037 114,857
Excess (Deficiency)of Revenues
Over Expenditures 34,410 (519,490) (32,982) 486,508
OTHER FINANCING SOURCES (USES)
Transfers out (34,410) (34,410) (33,534) 876
Net Change in Fund Balance (553,900) (66,516) 487,384
Fund Balance, Beginning of Year 537 537 537
Fund Balance, End of Year $ 537 $ (553,363) $ (65,979) $ 487,384
66
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, 2005
Variance with
Final Budget-
Budgeted Amounts Actual Positive
Original Final Amounts (Negative)
REVENUES
Taxes $ 1,200 $ 1,200 $ 1,472 $ 272
Use of money and property 200 200 224 24
Total Revenues 1,400 1,400 1,696 296
EXPENDITURES
Current:
Public works 900 10,100 9,381 719
Net Change in Fund Balance 500 (8,700) (7,685) 1,015
Fund Balance, Beginning of Year 12,231 12,231 12,231
Fund Balance, End of Year $ 12,731 $ 3,531 $ 4,546 $ 1,015
67
CITY OF RANCHO PALOS VERDES
SCHEDULE OF REVENUES, EXPENDITURES
AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL
RDA HOUSING SET-ASIDE SPECIAL REVENUE FUNS
FOR THE YEAR ENDED JUNE 30, 2005
Variance with
Final Budget-
Budgeted Amounts Actual Positive
Original Final Amounts (Negative)
REVENUES
Taxes $ 123,200 $ 123,200 $ 146,000 $ 22,800
Use of money and property 19,900 19,900 23,131 3,231
Total Revenues 143,100 143,100 169,131 26,031
EXPENDITURES
Current:
Administration 50,000
Net Change in Fund Balance 93,100 143,100 169,131 26,031
Fund Balance, Beginning of Year 1,646,229 1,646,229 1,646,229
Fund Balance, End of Year $ 1,739,329 $ 1,789,329 $ 1,815,360 $ 26,031
68
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, 2005
Variance with
Final Budget-
Budgeted Amounts Actual Positive
Original Final Amounts (Negative)
REVENUES
Use of money and property $ 13,200 $ 13,200 $ 11,910 $ (1,290)
Revenue from other agencies 535,000 535,000 623,682 88,682
Total Revenues 548,200 548,200 635,592 87,392
EXPENDITURES
Current:
Public works 441,792 441,792 436,808 4,984
Excess of Revenues
Over Expenditures 106,408 106,408 198,784 92,376
OTHER FINANCING SOURCES (USES)
Transfers out (15,500) (15,500) (11,680) 3,820
Net Change in Fund Balance 90,908 90,908 187,104 96,196
Fund Balance, Beginning of Year 547,282 547,282 547,282
Fund Balance, End of Year $ 638,190 $ 638,190 $ 734,386 $ 96,196
69
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, 2005
Variance with
Final Budget-
Budgeted Amounts Actual Positive
Original Final Amounts (Negative)
REVENUES
Use of money and property $ 9,300 $ 9,300 $ 22,652 $ 13,352
Revenue from other agencies 450,000 450,000 517,456 67,456
Total Revenues 459,300 459,300 540,108 80,808
OTHER FINANCING SOURCES (USES)
Transfers out (532,300) (389,167) (389,167) -
Total Other Financing Sources (Uses) (532,300) (389,167) (389,167) -
Net Change in Fund Balance (73,000) 70,133 150,941 80,808
Fund Balance, Beginning of Year 747,480 747,480 747,480
Fund Balance, End of Year $ 674,480 $ 817,613 $898,421 $ 80,808
70
CITY OF RANCHO PALOS VERDES
SCHEDULE OF REVENUES, EXPENDITURES
AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL
BEAUTIFICATION SPECIAL REVENUE FUNS
FOR THE YEAR ENDED JUNE 30, 2005
Variance with
Final Budget-
Budgeted Amounts Actual Positive
Original Final Amounts (Negative)
REVENUES
Use of money and property $ 209,200 $ 209,200 $ 271,901 $ 62,701
EXPENDITURES
Current:
Public works 241,467 457,367 174,417 282,950
Net Change in Fund Balance (32,267) (248,167) 97,484 345,651
Fund Balance, Beginning of Year 755,074 755,074 755,074
Fund Balance, End of Year $ 722,807 $ 506,907 $ 852,558 $ 345,651
71
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, 2005
Variance with
Final Budget-
Budgeted Amounts Actual Positive
Original Final Amounts (Negative)
REVENUES
Use of money and property $ 90,500 $ 90,500 $ 33,025 $ (57,475)
Revenue from other agencies 55,600 55,600 55,866 266
Total Revenues 146,100 146,100 88,891 (57,209)
EXPENDITURES
Current:
Public works 133,828 133,828 67,853 65,975
Excess (Deficiency)of Revenues
Over Expenditures 12,272 12,272 21,038 8,766
OTHER FINANCING USES
Transfers out (65,000) (65,000) (50,000) 15,000
Net Change in Fund Balance (52,728) (52,728) (28,962) 23,766
Fund Balance, Beginning of Year 547,974 547,974 547,974
Fund Balance, End of Year $ 495,246 $ 495,246 $ 519,012 $ 23,766
72
CITY OF RANCHO PALOS VERDES
SCHEDULE OF REVENUES, EXPENDITURES
AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL
PUBLIC SAFETY GRANTS SPECIAL REVENUE FUNC
FOR THE YEAR ENDED JUNE 30, 2005
Variance with
Final Budget-
Budgeted Amounts Actual Positive
Original Final Amounts (Negative)
REVENUES
Use of money and property $ 70 $ 70 $ 2,953 $ 2,883
Revenue from other agencies 115,000 115,000 100,000 (15,000)
Total Revenues 115,070 115,070 102,953 (12,117)
EXPENDITURES
Current:
Public safety 2,884 2,884
Excess (Deficiency)of Revenues
Over Expenditures 115,070 112,186 100,069 (12,117)
OTHER FINANCING SOURCES (USES)
Transfers out (115,000) (115,000) (100,000) 15,000
Net Change in Fund Balance 70 (2,814) 69 2,883
Fund Balance, Beginning of Year 62,631 62,631 62,631
Fund Balance, End of Year $ 62,701 $ 59,817 $ 62,700 $ 2,883
73
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, 2005
Variance with
Final Budget-
Budgeted Amounts Actual Positive
Original Final Amounts (Negative)
REVENUES
Taxes $ 327,860 $ 327,860 $ 324,738 $ (3,122)
Use of money and property 270 270 5,989 5,719
Total Revenues 328,130 328,130 330,727 2,597
EXPENDITURES
Current:
Public works 56,700 56,700 55,412 1,288
Excess of Revenues
Over Expenditures 271,430 271,430 275,315 3,885
OTHER FINANCING SOURCES (USES)
Transfers out (285,000) (285,000) (285,000)
Net Change in Fund Balance (13,570) (13,570) (9,685) 3,885
Fund Balance, Beginning of Year 150,910 150,910 150,910
Fund Balance, End of Year $ 137,340 $ 137,340 $ 141,225 $ 3,885
74
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, 2005
Variance with
Final Budget-
Budgeted Amounts Actual Positive
Original Final Amounts (Negative)
REVENUES
Taxes $ 321,400 $ 321,400 $ 401,577 $ 80,177
Use of money and property 20,500 20,500 25,849 5,349
Total Revenues 341,900 341,900 427,426 85,526
EXPENDITURES
Current:
Public works 367,600 367,600 321,047 46,553
Net Change in Fund Balance (25,700) (25,700) 106,379 132,079
Fund Balance, Beginning of Year 1,153,112 1,153,112 1,153,112
Fund Balance, End of Year $1,127,412 $ 1,127,412 $ 1,259,491 $ 132,079
75
CITY OF RANCHO PALOS VERDES
SCHEDULE OF REVENUES, EXPENDITURES
AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL
JPIA - PORTUGUESE BEND SPECIAL REVENUE FUND
FOR THE YEAR ENDED JUNE 30, 2005
Variance with
Final Budget-
Budgeted Amounts Actual Positive
Original Final Amounts (Negative)
REVENUES
Use of money and property $ 2,400 $ 2,400 $ 5,118 $ 2,718
EXPENDITURES
Current:
Public works 91,500 91,500 67,718 23,782
Excess (Deficiency)of Revenues
Over Expenditures (89,100) (89,100) (62,600) 26,500
OTHER FINANCING SOURCES (USES)
Transfers in 91,500 91,500 91,500
Net Change in Fund Balance 2,400 2,400 28,900 26,500
Fund Balance, Beginning of Year 232,341 232,341 232,341
Fund Balance, End of Year $ 234,741 $ 234,741 $ 261,241 $ 26,500
76
CITY OF RANCHO PALOS VERDES
SCHEDULE OF REVENUES, EXPENDITURES
AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL
HABITAT RESTORATION SPECIAL REVENUE FUNC
FOR THE YEAR ENDED JUNE 30, 2005
Variance with
Final Budget-
Budgeted Amounts Actual Positive
Original Final Amounts (Negative)
REVENUES
Use of money and property $ 1,900 $ 1,900 $ 5,371 $ 3,471
EXPENDITURES
Capital outlay 100,000 50,500 50,197 303
Excess (Deficiency)of Revenues
Over Expenditures (98,100) (48,600) (44,826) 3,774
OTHER FINANCING SOURCES
Transfers in 76,752 76,752 76,752
Net Change in Fund Balance (21,348) 28,152 31,926 3,774
Fund Balance, Beginning of Year 268,659 268,659 268,659
Fund Balance, End of Year $ 247,311 $ 296,811 $ 300,585 $ 3,774
77
CITY OF RANCHO PALOS VERDES
SCHEDULE OF REVENUES, EXPENDITURES
AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL
SUBREGION ONE MAINTENANCE SPECIAL REVENUE FUNS
FOR THE YEAR ENDED JUNE 30, 2005
Variance with
Final Budget-
Budgeted Amounts Actual Positive
Original Final Amounts (Negative)
REVENUES
Use of money and property $ 17,900 $ 17,900 $ 17,216 $ (684)
EXPENDITURES
Current:
Public works 24,000 36,000 33,629 2,371
Net Change in Fund Balance (6,100) (18,100) (16,413) 1,687
Fund Balance, Beginning of Year 815,018 815,018 815,018
Fund Balance, End of Year $ 808,918 $ 796,918 $ 798,605 $ 1,687
78
CITY OF RANCHO PALOS VERDES
STATEMENT OF REVENUES, EXPENDITURES
AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL
PARKS/MEASURE A SPECIAL REVENUE FUNC
FOR THE YEAR ENDED JUNE 30, 2005
Variance with
Final Budget-
Budgeted Amounts Actual Positive
Original Final Amounts (Negative)
REVENUES
Use of money and property $ 1,315 $ 1,315
Revenue from other agencies $ 59,000 $ 2,933,785 2,761,161 (172,624)
Total Revenues 59,000 2,933,785 2,762,476 (171,309)
OTHER FINANCING SOURCES (USES)
Transfers out (59,000) (2,817,222) (2,773,935) 43,287
Net Change in Fund Balance 116,563 (11,459) (128,022)
Fund Balance, Beginning of Year 67,451 67,451 67,451
Fund Balance, End of Year $ 67,451 $ 184,014 $ 55,992 $ (128,022)
79
CITY OF RANCHO PALOS VERDES
SCHEDULE OF REVENUES, EXPENDITURES
AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL
ABALONE COVE SEWER ASSESSMENT DISTRICT SPECIAL REVENUE FUN[
FOR THE YEAR ENDED JUNE 30, 2005
Variance with
Final Budget-
Budgeted Amounts Actual Positive
Original Final Amounts (Negative)
REVENUES
Taxes $ 50,000 $ 39,460 $ 42,767 $ 3,307
Use of money and property 745 745
Total Revenues 50,000 39,460 43,512 4,052
EXPENDITURES
Current:
Public works 50,000 41,163 39,942 1,221
Excess (Deficiency)of Revenues
Over Expenditures - (1,703) 3,570 5,273
OTHER FINANCING SOURCES (USES)
Transfers in 12,761 12,761
Net Change in Fund Balance 11,058 16,331 5,273
Fund Balance, Beginning of Year 30,111 30,111 30,111
Fund Balance, End of Year $ 30,111 $ 41,169 $ 46,442 $ 5,273
80
CITY OF RANCHO PALOS VERDES
SCHEDULE OF REVENUES, EXPENDITURES
AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL
BIKEWAYS CAPITAL PROJECTS FUNS
FOR THE YEAR ENDED JUNE 30, 2005
Variance with
Final Budget-
Budgeted Amounts Actual Positive
Original Final Amounts (Negative)
REVENUES
Use of money and property $ 373 $ 373
Revenue from other agencies 24,887 24,887
Total Revenues 25,260 25,260
Net Change in Fund Balance - - 25,260 25,260
Fund Balance, Beginning of Year
Fund Balance, End of Year $ - $ - $ 25,260 $ 25,260
81
CITY OF RANCHO PALOS VERDES
SCHEDULE OF REVENUES, EXPENDITURES
AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL
RDA ABALONE COVE CAPITAL PROJECTS FUNC
FOR THE YEAR ENDED JUNE 30, 2005
Variance with
Final Budget-
Budgeted Amounts Actual Positive
Original Final Amounts (Negative)
REVENUES
Use of money and property $ 932 $ 932
EXPENDITURES
Current:
Public works 650 (650)
Capital outlay $ 53,145 49,087 4,058
Total Expenditures - 53,145 49,737 3,408
Net Change in Fund Balance - (53,145) (48,805) 4,340
Fund Balance, Beginning of Year $ 54,015 54,015 54,015
Fund Balance, End of Year $ 54,015 $ 870 $ 5,210 $ 4,340
82
CITY OF RANCHO PALOS VERDES
SCHEDULE OF REVENUES, EXPENDITURES
AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL
ENVIRONMENTAL EXCISE TAX CAPITAL PROJECTS FUN[
FOR THE YEAR ENDED JUNE 30, 2005
Variance with
Final Budget-
Budgeted Amounts Actual Positive
Original Final Amounts (Negative)
REVENUES
Use of money and property $ 188,000 $ 188,000 $ 66,864 $ (121,136)
EXPENDITURES
Current:
Public works 60,000 57,209 2,791
Excess (Deficiency)of Revenues
Over Expenditures 188,000 128,000 9,655 (118,345)
OTHER FINANCING USES
Transfers out (60,000) 60,000
Net Change in Fund Balance 188,000 68,000 9,655 (58,345)
Fund Balance, Beginning of Year 727,198 727,198 727,198
Fund Balance, End of Year $ 915,198 $ 795,198 $ 736,853 $ (58,345)
83
CITY OF RANCHO PALOS VERDES
SCHEDULE OF REVENUES, EXPENDITURES
AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL
QUIMBY CAPITAL PROJECTS FUND
FOR THE YEAR ENDED JUNE 30, 2005
Variance with
Final Budget-
Budgeted Amounts Actual Positive
Original Final Amounts (Negative)
REVENUES
Use of money and property $ 24,830 $ 24,830 $ 21,277 $ (3,553)
Net Change in Fund Balance 24,830 24,830 21,277 (3,553)
Fund Balance, Beginning of Year 500,094 500,094 500,094
Fund Balance, End of Year $ 524,924 $ 524,924 $ 521,371 $ (3,553)
84
CITY OF RANCHO PALOS VERDES
SCHEDULE OF REVENUES, EXPENDITURES
AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL
AFFORDABLE HOUSING CAPITAL PROJECTS FUND
FOR THE YEAR ENDED JUNE 30, 2005
Variance with
Final Budget-
Budgeted Amounts Actual Positive
Original Final Amounts (Negative)
REVENUES
Use of money and property $ 965,510 $ 965,510 $ 21,960 $ (943,550)
Net Change in Fund Balance 965,510 965,510 21,960 (943,550)
Fund Balance, Beginning of Year 1,016,382 1,016,382 1,016,382
Fund Balance, End of Year $ 1,981,892 $ 1,981,892 $ 1,038,342 $ (943,550)
85
CITY OF RANCHO PALOS VERDES
SCHEDULE OF REVENUES, EXPENDITURES
AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL
RDA PORTUGUESE BEND CAPITAL PROJECTS FUND
FOR THE YEAR ENDED JUNE 30, 2005
Variance with
Final Budget-
Budgeted Amounts Actual Positive
Original Final Amounts (Negative)
REVENUES
Use of money and property $ 1,800 $ 1,800 $ 7,391 $ 5,591
Other revenues 50,004 50,004
Total Revenues 1,800 1,800 57,395 55,595
EXPENDITURES
Current:
Public works 23,810 23,810 29,629 (5,819)
Net Change in Fund Balance (22,010) (22,010) 27,766 49,776
Fund Balance, Beginning of Year 317,347 317,347 317,347
Fund Balance, End of Year $ 295,337 $ 295,337 $ 345,113 $ 49,776
86
CITY OF RANCHO PALOS VERDES
SCHEDULE OF REVENUES, EXPENDITURES
AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL
UTILITY UNDERGROUNDING CAPITAL PROJECTS FUND
FOR THE YEAR ENDED JUNE 30, 2005
Variance with
Final Budget-
Budgeted Amounts Actual Positive
Original Final Amounts (Negative)
REVENUES
Use of money and property $ 4,900 $ 4,900 $ 5,112 $ 212
Net Change in Fund Balances 4,900 4,900 5,112 212
Fund Balance, Beginning of Year 236,635 236,635 236,635
Fund Balance, End of Year $ 241,535 $ 241,535 $ 241,747 $ 212
87
CITY OF RANCHO PALOS VERDES
SCHEDULE OF REVENUES, EXPENDITURES
AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL
ROADWAY BEAUTIFICATION CAPITAL PROJECTS FUND
FOR THE YEAR ENDED JUNE 30, 2005
Variance with
Final Budget-
Budgeted Amounts Actual Positive
Original Final Amounts (Negative)
REVENUES
Use of money and property $ 9,300 $ 9,300 $ 8,904 $ (396)
Net Change in Fund Balances 9,300 9,300 8,904 (396)
Fund Balance, Beginning of Year 412,136 412,136 412,136
Fund Balance, End of Year $ 421,436 $ 421,436 $ 421,040 $ (396)
88
CITY OF RANCHO PALOS VERDES
SCHEDULE OF REVENUES, EXPENDITURES
AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL
JPIA -ABALONE COVE PERMANENT FUND
FOR THE YEAR ENDED JUNE 30, 2005
Variance with
Final Budget-
Budgeted Amounts Actual Positive
Original Final Amounts (Negative)
REVENUES
Use of money and property $ 28,000 $ 28,000 $ 32,332 $ 4,332
EXPENDITURES
Current:
Public works 101,700 47,700 24,316 23,384
Net Change in Fund Balance (73,700) (19,700) 8,016 27,716
Fund Balance, Beginning of Year 1,418,271 1,418,271 1,418,271
Fund Balance, End of Year $ 1,344,571 $ 1,398,571 $ 1,426,287 $ 27,716
89
CITY OF RANCHO PALOS VERDES
JUNE 30, 2005
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 on behalf of all City departments.
90
CITY OF RANCHO PALOS VERDES
INTERNAL SERVICE FUNDS
COMBINING STATEMENT OF NET ASSETS
JUNE 30, 2005
Equipment Building Employee
Replacement Replacement Benefits Totals
ASSETS
Current Assets
Cash and cash equivalents $ 2,714,658 $ 1,567,935 $ 295,518 $ 4,578,111
Receivables
Interest 18,786 10,764 1,636 31,186
Other 1,284 1,284
Prepaid items 1,043 1,043
Total Current Assets 2,733,444 1,578,699 299,481 4,611,624
Noncurrent Assets
Capital assets
Property and equipment 947,785 947,785
Accumulated depreciation (606,284) (606,284)
Total Noncurrent Assets 341,501 - - 341,501
Total Assets 3,074,945 1,578,699 299,481 4,953,125
LIABILITIES
Current Liabilities
Accounts payable and accrued liabilities 19,094 101,250 19,693 140,037
NET ASSETS
Invested in capital assets 341,501 341,501
Unrestricted 2,714,350 1,477,449 279,788 4,471,587
Total Net Assets $ 3,055,851 $ 1,477,449 $ 279,788 $ 4,813,088
91
CITY OF RANCHO PALOS VERDES
INTERNAL SERVICE FUNDS
COMBINING STATEMENT OF REVENUES, EXPENSES,
AND CHANGES IN FUND NET ASSETS
FOR THE YEAR ENDED JUNE 30, 2005
Equipment Building Employee
Replacement Replacement Benefits Totals
OPERATING REVENUES
Charges for services $ 476,078 $ 995,260 $ 1,471,338
OPERATING EXPENSES
Personnel services $ 1,800 906,061 907,861
Material and supplies 107,703 107,703
Maintenance 46,385 99,450 145,835
Depreciation 146,225 146,225
Total Operating Expenses 300,313 101,250 906,061 1,307,624
Operating Income (Loss) 175,765 (101,250) 89,199 163,714
NONOPERATING REVENUES
Interest income 54,094 33,388 2,054 89,536
Change in Net Assets 229,859 (67,862) 91,253 253,250
Net Assets, Beginning of Year 2,825,992 1,545,311 188,535 4,559,838
Net Assets, Ending of Year $ 3,055,851 $ 1,477,449 $ 279,788 $ 4,813,088
92
CITY OF RANCHO PALOS VERDES
INTERNAL SERVICE FUNDS
COMBINING STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED JUNE 30, 2005
Equipment Building Employee
Replacement Replacement Benefits Totals
CASH FLOWS FROM OPERATING ACTIVITIES
Receipts from customers $ 476,078 $ 995,260 $ 1,471,338
Payments to suppliers (177,930) $ (7,250) (926,785) (1,111,965)
NET CASH PROVIDED(USED) BY
OPERATING ACTIVITIES 298,148 (7,250) 68,475 359,373
CASH FLOWS FROM CAPITAL AND
RELATED FINANCING ACTIVITIES
Acquisition of capital assets (103,878) (103,878)
CASH FLOWS FROM INVESTING ACTIVITIES
Interest received on investments 43,831 27,975 1,146 72,952
NET INCREASE IN CASH
AND CASH EQUIVALENTS 238,101 20,725 69,621 328,447
CASH AND CASH EQUIVALENTS, Beginning of Year 2,476,557 1,547,210 225,897 4,249,664
CASH AND CASH EQUIVALENTS, End of Year $ 2,714,658 $ 1,567,935 $ 295,518 $ 4,578,111
RECONCILIATION OF OPERATING INCOME (LOSS)
TO NET CASH PROVIDED(USED) BY OPERATING
ACTIVITIES
Operating income(loss) $ 175,765 $ (101,250) $ 89,199 $ 163,714
Adjustments to reconcile operating income(loss)to
net cash provided (used)by operating activities:
Depreciation 146,225 146,225
Increase in other receivables (467) (467)
Decrease in prepaid items 25,392 25,392
Increase(decrease) in accounts payable (23,842) 94,000 (45,649) 24,509
NET CASH PROVIDED (USED) BY
OPERATING ACTIVITIES $ 298,148 $ (7,250) $ 68,475 $ 359,373
93
STATISTICAL SECTION
CITY OF RANCHO PALOS VERDES Table 1
GENERAL GOVERNMENTAL EXPENDITURES BY FUNCTION'
LAST TEN FISCAL YEARS
Planning,
Code
Fiscal Public Public Parks and Enforcement Capital Debt
Year Administration Safety Works Recreation &Building Outlay Service Totals
1996 $ 1,545,955 $ 2,609,804 $ 3,638,583 $ 543,602 $ 1,148,340 $ 1,129,275 --- $ 10,615,559
1997 1,588,565 2,637,280 3,856,324 550,722 1,360,468 8,885,989 --- 18,879,348
1998 1,659,753 2,533,309 4,079,842 710,477 1,558,511 3,974,928 --- 14,516,820
1999 1,679,549 2,658,145 3,942,290 633,292 1,882,051 3,116,632 --- 13,911,959
2000 1,836,468 2,662,096 5,864,072 597,045 1,646,824 2,110,309 --- 14,716,814
2001 2,388,727 2,732,579 3,616,253 596,185 1,778,319 4,227,852 --- 15,339,915
2002 2,939,097 2,898,265 3,855,747 668,938 1,950,504 9,441,273 --- 21,753,825
2003 3,084,614 3,094,005 4,306,768 785,786 2,194,265 4,767,678 --- 18,233,116
2004 3,294,392 3,038,650 4,703,005 945,547 2,362,503 368,018 --- 14,712,115
2005 3,838,505 3,091,794 4,761,129 964,870 2,302,063 6,364,307 --- 21,322,667
Includes all governmental fund types,excluding activity of the Redevelopment Agency and Improvement Authority.
Source: City Finance Department
94
CITY OF RANCHO PALOS VERDES Table 2
GENERAL GOVERNMENTAL REVENUES BY SOURCE
LAST TEN FISCAL YEARS
Licenses Use of Charges Revenues
Fiscal and Fines and Money and for From Other Other
Year Taxes Permits Forfeitures Property Services Agencies Revenues Totals
1996 $ 8,321,970 $ 689,077 $ 85,790 $ 960,071 $ 297,124 $ 2,558,842 $ 359,737 $ 13,272,611
1997 8,432,900 798,168 93,076 1,145,664 336,634 10,673,669 513,625 21,993,736
1998 8,449,951 890,269 114,409 1,239,537 175,418 4,899,646 640,609 16,409,839
1999 8,539,047 1,292,498 140,089 1,177,539 217,699 4,340,676 518,009 16,225,557
2000 9,022,637 1,089,720 156,730 1,314,901 203,691 3,654,695 1,875,671 17,318,045
2001 9,391,699 1,530,425 139,694 1,602,638 196,730 4,816,266 866,621 18,544,073
2002 9,723,259 1,589,701 116,598 987,793 217,387 8,170,513 513,512 21,318,763
2003 10,002,224 1,855,746 115,448 735,526 204,798 4,223,490 554,035 17,691,267
2004 11,352,928 1,309,732 101,788 636,491 378,995 3,453,070 2,363,433 19,596,437
2005 12,831,465 1,325,579 107,951 862,057 428,217 7,213,625 1,087,222 23,856,116
Includes all governmental fund types,excluding activity of the Redevelopment Agency and Improvement Authority.
Source: City Finance Department
95
CITY OF RANCHO PALOS VERDES Table 3
PROPERTY TAX LEVIES AND COLLECTIONS
LAST TEN FISCAL YEARS
Fiscal Current Current Percent
Year Levy Collection Collected
1995-1996 $ 2,700,133 $ 2,571,526 95.24%
1996-1997 2,708,114 2,651,513 97.91%
1997-1998 2,731,834 2,664,833 97.55%
1998-1999 2,877,987 2,770,246 96.26%
1999-2000 3,123,218 3,048,626 97.61%
2000-2001 3,352,310 3,233,833 96.47%
2001-2002 3,567,276 3,451,599 96.76%
2002-2003 3,768,471 3,688,465 97.88%
2003-2004 4,021,832 3,901,862 97.02%
2004-2005 4,283,786 4,193,382 97.89%
Source: City Public Works and Finance Departments
96
CITY OF RANCHO PALOS VERDES Table 4
ASSESSED VALUE OF TAXABLE PROPERTY
LAST TEN FISCAL YEARS
Net
Fiscal Secured Public Unsecured Homeowners Assessed Percent
Year Value Utility Value Subtotal Exemption Value Increase
1996 $ 4,316,092,536 $ 210,000 $ 15,334,559 $ 4,331,637,095 $ 79,614,908 $ 4,252,022,187 #REF!
1997 4,354,282,854 210,000 14,956,195 4,369,449,049 79,417,508 4,290,031,541 0.89%
1998 4,414,137,301 975,785 14,526,105 4,429,639,191 79,074,508 4,350,564,683 1.41%
1999 4,666,924,997 975,785 22,058,574 4,689,959,356 78,654,508 4,611,304,848 5.99%
2000 5,121,424,832 975,785 16,961,594 5,139,362,211 78,055,228 5,061,306,983 9.76%
2001 5,420,734,560 1,023,567 18,422,700 5,440,180,827 77,799,028 5,362,381,799 5.95%
2002 5,758,506,586 947,258 19,641,491 5,779,095,335 77,157,828 5,701,937,507 6.33%
2003 6,069,010,412 449,498 21,740,910 6,091,200,820 76,980,028 6,014,220,792 5.48%
2004 6,469,818,726 495,782 22,889,439 6,493,203,947 76,274,428 6,416,929,519 6.70%
2005 6,884,597,491 448,000 22,222,275 6,907,267,766 76,750,854 6,830,516,912 6.45%
Source: HdL Companies
97
CITY OF RANCHO PALOS VERDES Table 5
PROPERTY TAX RATES-ALL OVERLAPPING GOVERNMENTS
(PER$100 OF ASSESSED VALUATION)
LAST TEN FISCAL YEARS
Basic PVP School Metropolitan
Fiscal County &LA Community Flood Water Library
Year Levy College Districts Control District District County Totals
1996 1.0000% --- 0.0010% 0.0089% 0.0150% 0.0018% 1.0267%
1997 1.0000% --- 0.0020% 0.0089% 0.0150% 0.0016% 1.0275%
1998 1.0000% --- 0.0022% 0.0089% 0.0148% 0.0016% 1.0275%
1999 1.0000% --- 0.0020% 0.0089% 0.0114% 0.0015% 1.0237%
2000 1.0000% --- 0.0018% 0.0089% 0.0113% 0.0014% 1.0234%
2001 1.0000% --- 0.0016% 0.0088% 0.0114% 0.0013% 1.0230%
2002 1.0000% --- 0.0005% 0.0077% 0.0096% 0.0011% 1.0189%
2003 1.0000% 0.0294% 0.0009% 0.0067% 0.0097% 0.0010% 1.0477%
2004 1.0000% 0.0346% 0.0005% 0.0061% 0.0090% 0.0010% 1.0511%
2005 1.0000% 0.0331% 0.0002% 0.0058% 0.0085% 0.0009% 1.0485%
Note: The state constitutional amendment Proposition 13 provided that the tax rate be limited to 1%of assessed value,levied only by the County and
shared with all other jurisdictions. All other jurisdictions and the County can levy a tax rate for voter approved debt.
Source: HdL Companies
98
CITY OF RANCHO PALOS VERDES Table 6
PRINCIPAL PROPERTY TAXPAYERS
JUNE 30,2005
2004 Percentage of
Type of Assessed Total Assessed
Taxpayer Business Valuation Valuation
VH Property Corporation Golf Course/Residential $ 53,992,076 0.90%
VRPV LLC Apartments 51,123,300 0.85%
P V Victoria Apartments LLC Apartments 42,406,146 0.71%
Western Riviera Investors,Et.Al. Apartments 25,819,543 0.43%
Warmington Oceanfront Associates Residential 25,370,368 0.42%
York Long Point Associates Commercial/Residential 22,869,857 0.38%
RPV Associates LLC Residenital Development 19,097,853 0.32%
Belmont Village RPV Inc. Institutional 14,119,345 0.23%
Top Terraces Inc. Commercial/Retail 12,929,855 0.21%
Palos Verdes Land Holdings Company Inc. Open Space 3,890,787 0.06%
TOTAL TOP TEN $ 271,619,130 4.51%
Source: HdL Companies
99
CITY OF RANCHO PALOS VERDES Table 7
SPECIAL ASSESSMENT BILLINGS AND COLLECTIONS
LAST TEN FISCAL YEARS
Special Special Percent of
Fiscal Assessment Assessments Levy
Year Billings Collected Collected
1996 $ 809,208 $ 788,919 97.5%
1997 756,438 741,261 98.0%
1998 374,483 368,652 98.4%
1999 325,130 333,455 102.6%
2000 326,425 327,423 100.3%
2001 326,396 325,337 99.7%
2002 327,460 324,016 98.9%
2003 327,384 332,806 101.7%
2004 327,737 326,106 99.5%
2005 328,068 324,737 99.0%
Source: City Public Works and Finance Departments
100
CITY OF RANCHO PALOS VERDES Table 8
COMPUTATION OF LEGAL DEBT MARGIN
AS OF JUNE 30, 2005
Net Assessed Value $ 6,830,516,912
Debt limit- 15%of assessed value $ 1,024,577,537
Amount of debt applicable to debt limit ---
Legal debt margin $ 1,024,577,537
Note: Section 43605 of the Government Code of the State of California limits the amount of indebtedness for
public improvements to 15%of the assessed valuation of all real personal property in the City.
The City of Rancho Palos Verdes has no general bonded indebtedness.
Source: City Finance Department
101
CITY OF RANCHO PALOS VERDES Table 9
STATEMENT OF DIRECT AND OVERLAPPING DEBT
AS OF JUNE 30, 2005
Percent Bonded Debt
Applicable June 30,2005
DIRECT AND OVERLAPPING BONDED DEBT:
Los Angeles County Detention Facilities 1987 0.993% $ 160,936
Los Angeles County Flood Control Storm Drain Bonds No.4 1.007% 20,047
Los Angeles County Flood Control Refunding Bonds 1993 1.007% 2,770
Palos Verdes Library District Refunding Bonds 1998 48.639% 5,484,080
West Basin Metropolitan Water District * 0.972% 4,075,576
Los Angeles City Community College 2003 Series A 1.761% 1,139,121
Los Angeles City Community College 2003 Series B&C 1.766% 2,067,118
Los Angeles City Community College 2001 Series A 1.761% 2,183,043
Los Angeles Unified School District 2004 Series A 0.218% 158,520
Los Angeles Unified School District 2002 Refunding Bonds 0.204% 517,284
Los Angeles Unified School District 2002 Series A 0.218% 1,107,314
Los Angeles Unified School District 1997 Series A 0.218% 318,655
Los Angeles Unified School District 1997 Series B 0.218% 450,918
Los Angeles Unified School District 1997 Series C 0.218% 389,522
Los Angeles Unified School District 1997 Series D 0.218% 307,873
Los Angeles Unified School District 1997 Series E 0.218% 871,040
Los Angeles Unified School District 1997 Series F 0.218% 4,583,388
Palos Verdes Peninsula USD Series 2000 A 45.989% 531,173
Palos Verdes Peninsula USD Series 2000 B 45.989% 6,845,507
Palos Verdes Peninsula USD Series 2000 C 45.989% 4,795,439
TOTAL DIRECT AND OVERLAPPING BONDED DEBT $ 36,009,324 (1)
(1) Excludes revenue,mortgage revenue,tax allocation bonds, interim financing obligations, non-bonded capital lease
obligations,and certificates of participation.
Debt to Assessed Valuation Ratios:
Direct Debt 0.00%
Overlapping Debt 0.53%
Total Debt 0.53%
* This debt is a portion of a larger agency,which is responsible for debt in areas outside the City.
Source: HdL Companies
102
CITY OF RANCHO PALOS VERDES Table 10
DEMOGRAPHIC STATISTICS
LAST TEN FISCAL YEARS
Fiscal Housing
Year Population Units
1996 42,670 15,610
1997 43,155 15,623
1998 43,657 15,652
1999 44,345 15,683
2000 44,933 15,706
2001 41,145 15,753
2002 42,002 15,762
2003 42,322 15,772
2004 42,810 15,781
2005 43,525 15,799
Source: CA Department of Finance and the City Planning, Building and Code Enforcement Department
103
CITY OF RANCHO PALOS VERDES Table 11
DEMOGRAPHIC STATISTICS
2000 CENSUS DATA
Population distribution by ethnic group: Individuals Percent
White 27,660 67.23%
Asian 10,676 25.95%
Black or African American 815 1.98%
American Indian/Alaska Native 62 0.15%
Other 1,932 4.70%
Total 41,145 100.00%
Population distribution by age: Individuals Percent
0-9 years 4,732 11.50%
10-19 years 5,436 13.21%
20-34 years 4,067 9.88%
35-44 years 6,584 16.00%
45-54 years 6,789 16.50%
55-64 years 5,837 14.19%
65-74 years 4,574 11.12%
75+years 3,126 7.60%
Total 41,145 100.00%
Household by type:
Household Number of
type: households Percent
Family-Married Couple 6,423 42.10%
Family-Married Couple with children under 18 4,375 28.68%
Family-Single Parent 830 5.44%
Family-Single Parent with children under 18 595 3.90%
Non Family 464 3.04%
Householder living alone 2,569 16.84%
Total 15,256 100.00%
Housing Tenure: Units Percent
Owner-occupied 12,456 81.65%
Renter-occupied 2,800 18.35%
Total 15,256 100.00%
Source: U.S.Bureau of the Census
104
CITY OF RANCHO PALOS VERDES Table 12
BUILDING PERMITS AND PROPERTY VALUE
LAST TEN FISCAL YEARS
Total Construction New Residential Construction
Fiscal Number of Property Number of Property Bank
Year Permits Value Units Value Deposits
1996 1,356 $ 19,993,784 19 $ 8,572,000 $ 193,339,000
1997 1,389 20,897,000 23 9,766,000 139,282,000
1998 2,373 25,799,345 31 11,948,000 170,584,000
1999 3,129 65,373,000 96 43,200,000 198,802,000
2000 2,544 41,403,218 39 24,949,630 202,839,000
2001 2,468 22,685,411 9 4,677,000 207,807,000
2002 1,319 20,363,386 10 4,387,828 208,627,000
2003 1,405 37,526,472 16 9,931,300 111,787,000
2004 1,492 35,955,300 34 17,682,700 346,885,000
2005 1,331 36,758,500 22 14,561,200
— Data regarding bank deposits within the City of Rancho Palos Verdes for the fiscal year ended June 30,2005 is not currently
available.
Source: City Planning,Building and Code Enforcement Department and State Banking Department
105
CITY OF RANCHO PALOS VERDES Table 13
MISCELLANEOUS STATISTICS
AS OF JUNE 30, 2005
Date of Incorporation September 7, 1973
Form of Government Council/Manager
Area 13.6 square miles
Coastline 7.5 miles
Contract Services:
Police Protection Los Angeles County Sheriff
Fire Protection Los Angeles County Fire Protection District
Sewers Los Angeles County Sanitation District#5
Utilities:
Water California Water Service Company
Gas Southern California Gas Company
Electricity Southern California Edison
Telephone Verizon,Pacific Bell
City Facilities:
Streets 143 miles
Parks 14 with 514 acres
Employees(Full-Time) 45
Source: City Finance Department
106