CAFR FY 2001-02 (; I71 OF
ACHO PALOS VEDES
CALIF 0 \ I A
COvP - E - E \ SIVE
ALAL FIACIAL �EPO�T
FISCAL YEAR ENDED
JLL 30 ,7 2 0 0 2
A A
CITY OF RANCHO PALOS VERDES,
CALIFORNIA
COMPREHENSIVE
ANNUAL FINANCIAL REPORT
For the Year Ended June 30, 2002
Prepared By:
Finance Department
Dennis McLean, Director of Finance & Information
Technology
Kathryn Downs, Accounting Manager
INTRODUCTORY SECTION
CITY OF RANCHO PALOS VERDES
COMPREHENSIVE ANNUAL FINANCIAL REPORT
FOR THE YEAR ENDED JUNE 30, 2002
TABLE OF CONTENTS
INTRODUCTORY SECTION:
Table of Contents
Letter of Transmittal iv-x
Directory of City Officials xi
Organization Chart xii
GFOA Certificate of Achievement for Excellence in Financial Reporting xiii
CSMFO Certificate of Award for Outstanding Financial Reporting xiv
FINANCIAL SECTION:
Independent Auditor's Report 1
Management Discussion and Analysis 3
Government-Wide Financial Statements
Statement of Net Assets 12
Statement of Activities 13
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
Measure A Fund
Statement of Revenues, Expenditures,and Change in Fund Balance
-Budget and Actual 22
Proprietary Funds
Statement of Net Assets 23
Statement of Revenues, Expenses, and Changes in Fund Net Assets 24
Statement of Cash Flows 25
- i
CITY OF RANCHO PALOS VERDES
COMPREHENSIVE ANNUAL FINANCIAL REPORT
FOR THE YEAR ENDED JUNE 30, 2002
TABLE OF CONTENTS(Continued)
Notes to the Financial Statements 26
Supplementary Schedules
Major Fund Budgetary Comparison Schedules
Schedule of Revenues,Expenditures, and Changes in Fund Balances
-Budget and Actual
Capital Improvement Projects Capital Projects Fund 50
RDA Debt Service Fund 51
Non-Major Governmental Funds
Combining Balance Sheet 54
Combining Statement of Revenues, Expenditures,and Changes
in Fund Balances 60
Schedule of Revenues,Expenditures, and Changes in Fund Balances
-Budget and Actual—Special Revenue Funds
Air Quality Management Fund 66
Community Development Block Grant Fund 67
El Prado Fund 68
RDA Housing Set-Aside Fund 69
Proposition A Fund 70
Proposition C Fund 71
Recycling Fund 72
Solid Waste Fund 73
LLESS/COPS/CLEEP Fund 74
1972 Act Fund 75
1911 Act Fund 76
JPIA—Portuguese Bend Fund 77
Habitat Restoration Fund 78
Subregion One Maintenance 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
Joint Powers Improvement Authority—Abalone Cove Fund 89
ii
CITY OF RANCHO PALOS VERDES
COMPREHENSIVE ANNUAL FINANCIAL REPORT
FOR THE YEAR ENDED JUNE 30,2002
TABLE OF CONTENTS(Continued)
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 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
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All
RANCHO PALOS VERDES
September 13, 2002
Honorable Mayor and City Council
City of Rancho Palos Verdes
Rancho Palos Verdes, California
The Comprehensive Annual Financial Report(CAFR)of the City of Rancho Palos Verdes for the fiscal year ended
June 30, 2002, is hereby submitted as mandated by both local ordinances and state statutes. These ordinances and
statutes require that the City of Rancho Palos Verdes issue annually a report on its financial position and activity,and
that an independent firm of certified public accountants audit this report. Responsibility for both the accuracy of the
data,and the completeness and fairness of the presentation,including all disclosures, rests with the City. To the best
of our knowledge and belief, the enclosed data is accurate in all material respects and is reported in a manner that
presents fairly the financial position and results of operations of the various funds and component units of the City of
Rancho Palos Verdes. In addition, to the best of our knowledge, there are no untrue statements of material fact
within the financial statements or omissions of material fact to cause the financial statements to be misleading. All
disclosures necessary to enable the reader to gain an understanding of the City's financial activities have been
included.
The CAFR is presented in three sections: introductory, financial, and statistical. The introductory section, which is
unaudited, includes this Letter of Transmittal, an organizational chart and a directory of the City's principal elected
and appointed officials. The financial section includes management's discussion and analysis (MD&A) the
government-wide statements, notes to the financial statements, combining and individual fund financial statements,
as well as the independent auditor's report on these financial statements and schedules. This letter of transmittal is
designed to complement the MD&A and should be read in conjunction with it. The statistical section, which is
unaudited, includes selected financial and demographic information, generally presented on a multi-year historical
basis.
The financial reporting entity (the government) includes all the funds of the primary government (i.e., the City of
Rancho Palos Verdes as legally defined), as well as its component units,the Rancho Palos Verdes Redevelopment
Agency and the Joint Powers Improvement Authority. A component unit is a legally separate entity for which the
primary government is financially accountable. The City provides a broad range of services, including police
protection, solid waste collection, construction and maintenance of highways, streets, and infrastructure, planning
and zoning activities, recreational activities,cultural events,and general administrative services. The City of Rancho
Palos Verdes is a contract city, meaning that some of these services are provided by contract with other agencies
(both public and private) and some services are delivered by the City's own employees.
Special districts of the County of Los Angeles provide library services, fire protection services, and sewer services.
The City has excluded the County of Los Angeles, as well as the State of California and various school districts,from
the financial reporting entity because they do not meet the established criteria for inclusion.
GOVERNMENTAL STRUCTURE, ECONOMIC CONDITION AND OUTLOOK
The City of Rancho Palos Verdes is located on a coastal peninsula overlooking the Pacific Ocean in Los Angeles
County,20 miles south of the City of Los Angeles. The City was incorporated September 7, 1973. The City currently
has a land area of 13.6 square miles and a population of 42,002. The City is primarily a "bedroom" community with
relatively little commercial activity.
iv
30940 HAWTHORNE BOULEVARD/RANCHO PALOS VERDES,CA 90275-5391/(310)377-0360/FAX(310)544-5295/WWW.PALOSVERDES.COM/RPV
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-tern. 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 moderately during the fiscal year ended June 30,2002, it is
important to continue to measure the City's financial strength over time, not just 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 30,2003 presents
the expectation of a decrease of General fund reserves. The economic downturn and management's concern about
the possible decrease of state shared revenues 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 City's Planning Commission reviewed and conditionally approved the Long Point Resort Hotel project,
thereby forwarding a recommendation of approval to the City Council to allow a hotel and three of nine golf
course holes on the property located at the former Marineland site along Palos Verdes Drive South, and six
of nine golf course holes on the City owned Upper Point Vicente Park.
• The City, in cooperation with the Palos Verdes Peninsula Land Conservancy, created the Forrestal Steering
Committee to oversee the implementation of the Forrestal Management Plan.
• The City created the Neighborhood Compatibility Steering Committee, assigned with tasks to review the
current Municipal Code language regarding the neighborhood compatibility analysis, suggest modifications,
and draft a public handbook on the City's neighborhood compatibility requirements.
• The View Restoration Commission continued to resolve approximately 80% of view restoration and
preservation permit applications using the pre-application mediation process.
• The Equestrian Committee and City Council reviewed and approved the continued operation of two
Conditional Large Domestic Animal Permits to allow non-profit organizations to conduct equestrian activities
in the Portuguese Bend Equestrian Overlay District.
• The City authorized the initial stages for updating the City's General Plan by forming a General Plan Update
Steering Committee. The Committee is charged with the task of reviewing and commenting on all of the
existing goals and policies of the General Plan.
• The City began to implement its state approved Housing Element and initiated efforts to work with the
Southern California Association of Governments in preparing the Regional Transportation Plan, which is
related to the next Regional Housing Needs Assessment/Housing Element Update,
• The City continued work on Phase II of the Natural Communities Conservation Plan (NCCP) as a part of its
continuing effort to finalize the habitat preserve design.
• The City continued to provide review and inspection services for repair of the 18th hole at Ocean Trails, which
was damaged by a landslide in June 1999 prior to the opening of the golf course. The City met with Ocean
Trails' staff on a regular basis to assist them in the development of the project, as well as to point out issues
important to the community. The City issued a Lot Line Adjustment for the property, Special Use Permits to
allow the continued temporary operation of the 15-hole golf course during the landslide repair efforts, and
issued permits for the reconstruction of Palos Verdes Drive South—one of the City's major arterials.
V
• The City initiated the Environmental Impact Review(EIR) process for the proposed Marymount College
facilities expansion.
• The City initiated a program 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 issued Certificates of Occupancy for eight additional homes within the Oceanfront Estates
residential project located along Palos Verdes Drive West.
• The City issued a Certificate of Occupancy for the Peninsula Montessori School to occupy the space of a
former grocery store in the Golden Cove Shopping Center.
• The City approved Tentative Tract Map No. 52666 to allow the land division of a 392-acre lot into 13
residential lots on property located at 3200 Palos Verdes Drive West.
• The City approved applications for the Belmont Village 122-unit assisted living facility on Crestridge Road.
• The City continued to approve installation of various commercial antenna facilities for cellular telephones and
personal communication systems on private property throughout the City.
• The City adopted a Wind Energy Ordinance to allow for the future development of small wind energy
systems, as mandated by state law.
• The City implemented a permit tracking system for the Planning, Code Enforcement and Building &Safety
divisions.
• Code enforcement staff successfully led a citywide effort to ensure that private bench drains were cleared in
time for the 2001-2002 winter season.
Public Works
• The annual overlay and slurry seal projects were completed for the FY2000-2001 and FY2001-2002
programs. Each program rehabilitated approximately 75 roadways at a cost of more than $1 million.
• The arterial rehabilitation program, which placed a rubberized asphalt overlay for portions of Hawthorne and
Crenshaw Boulevards,was completed.
• A traffic signal was installed at Crest Road and Highridge.
• Modifications to traffic signals on Hawthorne Boulevard at Granvia and Altamira/Ridgegate Drive were
completed.
• Maintenance of Palos Verdes Drive South continued, including repairs to the roadway and the drainage
system at Peppertree Drive.
• Drainage improvements for the Bronco/Palos Verdes Drive East Storm drain were completed.
• Catch Basin inlet filters were installed throughout the City to prevent large debris from draining directly into
the ocean.
• Improvements were made to Hesse Park Playground facilities.
• The City awarded 12 new beautification grants to local homeowners associations.
• The City's Home Improvement Program (funded with federal CDBG monies)awarded approximately
$122,315 in grants and loans to low and moderate-income homeowners within Rancho Palos Verdes.
• The City successfully hosted the annual Hazardous Waste Roundup and Electronics Recycling Event.
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Recreation and Parks
• The City continued to offer the use of park facilities to the Peninsula Seniors, a local non-profit organization.
• The City worked cooperatively with the United States Coast Guard to host the annual Whale of a Day
Celebration on the Point Vicente Lighthouse grounds.
• The Los Serenos de Pointe Vicente docents continued their successful docent-led hike programs at several sites
throughout the City.
• Recreation& Parks Department staff coordinated the City's annual July 4th Independence Day celebration.
• The City hosted the second annual Shakespeare By the Sea drama production at Upper Point Vicente Park.
• Recreation & Parks Department 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.
Administration
• The City Council sponsored two Community Leaders' Breakfasts, which enable elected and appointed City
officials to meet with representatives from other community organizations, such as homeowners
associations, special districts, and business leaders,to share ideas and discuss topics of mutual interest.
• The City Council appointed a 16-member Emergency Preparedness Task Force to review the City's existing
resources and emergency plans;and advise and assist the City Council and staff in improving and
maintaining a high state of readiness to respond to a wide variety of emergencies and disasters.
• The City Council provided first-time financial assistance to SHAWL House and Mothers Advocating Prevention,
and increased the City grant to Shakespeare by the Sea.
• The City added several enhancements to the City's web site located at www.rpv.com/rpv on the Internet.
The City's web site now includes an improved Breaking News page and new list serve feature, by which
subscribers can receive email messages concerning breaking news. The video streaming of City Council
meetings has also been improved to allow users to select a particular agenda item and forward directly to
that section of the meeting video. The City wishes to thank Palos Verdes on the Net for contributing time
and resources to the web site project.
• The City continued to provide facilities at the Civic Center for Palos Verdes on the Net, a computer
resource center serving the Palos Verdes Peninsula. Palos Verdes on the Net provides the City's
residents with "state of the art" Internet access using T-1 connectivity, computer training and internship
programs for school children. Palos Verdes on the Net also administrators the City's computer network
and web site.
• The City Council scheduled three regular meetings at different locations throughout the City in order to
stimulate interest in attending Council meetings. The off-site meetings were held at Ladera Linda
Community Center, Miraleste Intermediate School and Cornerstone Elementary School.
• The City Council became much more active in the League of California Cities over the past year and
sponsored a Policy Resolution regarding undergrounding utilities that was approved at the League General
Assembly in October.
• ' The City Council hosted a joint meeting with the Planning Commission and the Finance Advisory Committee
to discuss potential uses of the undeveloped, institutionally zoned property along Crestridge Road.
• The City Council hosted a joint meeting with the Palos Verdes Peninsula School District to discuss issues
of mutual interest including recreational facilities, antenna permits, and recycling.
vii
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 conformity with Generally Accepted Accounting Principles. The internal control structure is designed to
provide reasonable,but not absolute,assurance that these objectives are met. The concept of reasonable assurance
recognizes that: (1)the cost of a control should not exceed the benefits likely to be derived;and(2)the valuation of
costs and benefits requires estimates and judgements by management.
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
$300,000 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,
2002,less than$300,000 was expended on Federal financial assistance programs;and therefore,a single audit was
not required.
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.
General Government Functions. The following schedule presents a summary of all Governmental fund revenues for
the fiscal year ended June 30, 2002 with the amount and percentage of increases or decreases in relation to prior
year revenue:
Percent of
Increase/(Decrease) Increase/
Amount from FY2000-2001 (Decrease)
Taxes $ 10,677,129 $ 368,404 3.6%
Licenses and permits 1,244,871 81,054 7.0%
Fines and forfeitures 116,598 (23,096) -16.5%
Use of money and property 1,152,883 (766,372) -39.9%
Charges for services 217,387 20,658 10.5%
Revenues from other agencies 8,170,514 3,354,246 69.6%
Other revenues 562,688 (28,129) -4.8%
TOTAL REVENUES $ 22,142,070 $ 3,006,765 15.7%
With overall revenues increasing by over$3,000,000 for the year,the City recognized large fluctuations in several of
the different revenue categories. These increases and decreases are discussed below.
Despite a downturn in the economy,property values remained strong and the City experienced a 6 percent increase
in property tax revenue. Franchise tax and utility users tax increased by 5 and 3 percent,respectively,due to higher
utility rates.
•
Consistent with the national trend,the City's investment rate of return decreased from an average of 6.134 percent in
FY2000-2001 to an average of 3.43 percent in FY2001-2002. Interest income decreased by over$950,000 when
compared with the prior year.
VIII
Th= .;rease of revenues from other agencies was primarily due to the $3.9 million Measure A grant for the
BG :•..tine property purchase. In the prior fiscal year,the City received one-time grants of more than$500,000 for
the scenic turnouts project and traffic congestion relief. Less than$100,000 was received in the current fiscal year for
traffic congestion relief.
The following schedule presents a summary of all Governmental fund expenditures for the fiscal year ended June 30,
2002, and the amount and percentage of increases and decreases in relation to prior year amounts:
Percent of
Increase/(Decrease) Increase/
Amount from FY2000-2001 (Decrease)
Administration $ 2,914,603 $ (137,516) -4.5%
Public safety 2,898,265 165,685 6.1%
Public works 7,449,350 2,480,377 49.9%
Parks and recreation 668,939 72,754 12.2%
Planning, building and code enforcement 1,950,504 172,185 9.7%
Pass through to other agencies 101,570 10,286 11.3%
Capital outlay 8,246,433 1,259,434 18.0%
• Debt service 929,827 (198,191) -17.6%
TOTAL EXPENDITURES $ 25,159,491 $ 3,825,014 17.9%
The overall $3.8 million increase in expenditures is due to large fluctuations in two expenditure categories. These
increases and decreases are discussed below.
The net increase in Public Works expenditures is almost entirely comprised of a$2.3 million increase in expenditures
for engineering activities related to the San Ramon drainage project.
Total capital outlay expenditures increased by a net amount of more than$1.2 million for several reasons. Capital
project budgets vary each year,due to unique needs and funding availability. In addition, many capital projects are
constructed over multiple fiscal years. For example,the Abalone Cove Sewer System was completed in FY 2001-
2002 for a total cost of$5.9 million. Only$2 million of the total project cost was spent in FY 2001-2002,whereas
approximately$3.7 million was spent during the prior fiscal year. Therefore,for this particular project, there was a
decrease of spending in the amount of$1.7 million from one fiscal year to the other. The Barkentine property was
purchased in FY2001-2002 for approximately $3.9 million, causing an increase of spending for FY 2001-2002.
Finally,the City decreased spending for roadway improvement activities by approximately$1 million when compared
to the prior fiscal year.
Budget to Actual Comparison. Once again,the City experienced a favorable budget variance in the General fund for
the fiscal year ended June 30,2002. Actual General fund revenues were approximately$167,000 greater than the
amount budgeted,while expenditures were$672,000 less than the amount budgeted. The positive variance resulted
from the continued careful management of resources, as well as the continued strength of property values during
FY2001-2002.
Governmental Fund Balances. The combined fund balances of all Governmental Funds decreased by$3,600,000
from the prior year. The net decrease is primarily attributable to completion of the Abalone Cove Sewer project and
continued progress on the San Ramon drainage project.
Debt Administration. At June 30,2002,the City had no general obligation debt and one tax increment bond issued
during FY1997-1998. 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 under state law. LAIF provides high safety and liquidity and is operated specifically for
local governments. The City's invested balance with LAIF as of June 30,2002 was$27,418,957. The average return
on invested funds ranged between 2.69%and 4.64%. Earnings are allocated to the various funds based on average
cash balances.
ix
Risk Management. The City of Rancho Palos Verdes is a member of the California Joint Powers Insurance Authority
(CJPIA). With over 80 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, 2002, 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's Safety Committee 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.
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, 2001. This was the ninth 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.
CSMFO Certificate of Award for Outstanding Financial Reporting. The California Society of Municipal Finance
Officers(CSMFO)awarded a Certificate of Award for Outstanding Financial Reporting to the City of Rancho Palos
Verdes for its CAFR for the fiscal year ended June 30, 2001. A copy of this Certificate of Award has also been
included later in the CAFR's introductory section. The certificate is issued in recognition of meeting professional
standards and criteria in reporting which reflect a high level of quality in the annual financial statements. We will
again submit the City's annual report to the CSMFO for award consideration.
Acknowledgments. Preparation of this report was the accomplishment by combined efforts of many individuals. I
wish to acknowledge the assistance of our auditors,Vavrinek,Trine,Day&Company,LLP,our consultants for GASB
34 infrastructure valuation, Harris &Associates, the Deputy Director of Public Works for GASB 34 infrastructure
valuation, Don Noble and the contributions of the Finance Department staff: Kathryn Downs, Jane Lin, Gayle
Vanoverbeck,Selena Wright,Teresa Takaoka,and Nancy Vitez.I would especially like to single out special thanks to
Kathryn Downs, the City's Accounting Manager, who led the implementation of GASB 34 and preparation of this
report.
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
Finance Director
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CITY OF RANCHO PALOS VERDES
DIRECTORY OF CITY OFFICIALS
JUNE 30, 2002
CITY COUNCIL
John C. McTaggart, Mayor
Douglas Stern, Mayor Pro-Tern
Larry Clark, Councilmember
Barbara Ferraro, Councilmember
Peter Gardiner, Councilmember
ADMINISTRATION AND DEPARTMENT HEADS
City Manager Les Evans
Assistant City Manager Carolynn Petru
Director of Administrative Services/City Clerk Jo Purcell
Director of Public Works Dean Allison
Director of Finance& Information Technology Dennis McLean
Director of Planning, Building and Code Enforcement Joel Rojas
Director of Recreation and Parks Ron Rosenfeld
City Attorney Richards, Watson & Gershon
xi
CITY OF RANCHO PALOS VERDES
ORGANIZATIONAL CHART
CITIZENS OF
RANCHO PALOS VERDES
MAYOR AND CITY COUNCIL
COMMISSIONS&COMMITTEES COMMISSIONS&COMMITTEES
Planning Commission Open Space Planning Parks&Recreation Task Force
Traffic Committee Emergency Preparedness Task Force
Finance Advisory Committee View Restoration Mediators
Equestrian Committee
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 Facility Use PLANNING& BUILDING
Point Vicente Interpretive Center Planning/Zoning
Abalone Cove Shoreline Park Building&Safety
Special Events
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
Xii
Certificate of
Achievement
for Excellence
in Financial
Reporting
Presented to
City of Rancho Palos
Verdes, California
For its Comprehensive Annual
Financial Report
for the Fiscal Year Ended
June 30, 2001
A Certificate of Achievement for Excellence in Financial
Reporting is presented by the Government Finance Officers
Association of the United States and Canada to
government units and public employee retirement
systems whose comprehensive annual financial
reports (CAFRs) achieve the highest
standards in government accounting
and financial reporting.
rAE orp%
(UNITED STAa. AND TA
Z � s Pr sident
CORPORAvoo SEAL
cmcost YOP 419S&
Executive Director
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California
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Certificate of Award
Outstanding
to the
City of Rancho Palos Verdes
This certificate is issued in recognition of meeting professional standards and criteria in reporting
<< �'- • which reflect a high level of quality in the annual financial statements
•. r? and in the underlying accounting system from which the reports were prepared
7
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February 20, 2002
"..
',/\/\r,r` Chair, rofessional&Technical Standards Committee
Dedicated to Excellence in Municipal Financial Management
FINANCIAL SECTION
Vavrinek,Trine, Day & Co., LLP VALUE THE DIFFERENCE
1rLr,,4.1 Certified Public Accountants&Consultants
INDEPENDENT AUDITOR'S 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, 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,
2002, which collectively comprise the City of Rancho Palos Verdes's basic financial statements as listed in the
table of contents. These financial statements are the responsibility of the City of Rancho Palos Verdes's
management. Our responsibility is to express opinions on these financial statements based on our audit.
We conducted our audit in accordance with auditing standards generally accepted in the United States of America,
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 opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial
position of the governmental activities, each major fund, and the aggregate remaining fund information of the
City of Rancho Palos Verdes, California, as of June 30, 2002, and the respective changes in financial positions
and cash flows, where applicable, thereof for the year then ended in conformity with accounting principles
generally accepted in the United States of America.
In accordance with Government Auditing Standards, we have also issued our report dated September 13, 2002, 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 grants. That report is an integral part of an audit performed
in accordance with Government Auditing Standards and should be read in conjunction with this report in
considering the results of our audit.
As discussed in the Notes to the basic financial statements, the accompanying financial statements reflect certain
changes required as a result of the implementation of Governmental Accounting Standards Board (GASB)
Statements No. 34 and 38 for the year ended June 30, 2002. This results in a change to the format and content of
the basic financial statements.
1
8270 Aspen Street Rancho Cucamonga,CA 91730 TeL 909.466.4410 Fax:909.466.4431 www.vtdcpa.com
FRESNO • LAGUNA HILLS • PLEASANTON • RANCHO CUCAMONGA • SACRAMENTO • SAN JOSE
The required supplementary information, such as management's discussion is not a required part of the basic
financial statements, but is supplementary information required by the 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 combining schedules and additional budgetary comparison schedules, are presented for
purposes of additional analysis and are not a required part of the basic financial statements. These 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.
va,v�ITS, ba 7 41 a LL10
Rancho Cucamonga, California
September 13, 2002
2
MANAGEMENT'S DISCUSSION & ANALYSIS
CITY OF RANCHO PALOS VERDES
MANAGEMENT'S DISCUSSION AND ANALYSIS
JUNE 30, 2002
As management of the City of Rancho Palos Verdes, we offer readers of the City of Rancho Palos Verde's
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, 2002. 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-x of this report. Because this is the first year of implementation of GASB Statement No. 34,
comparative information is not presented in this discussion and analysis.
Financial Highlights
➢ The assets of the City of Rancho Palos Verdes exceed its liabilities, at the close of the fiscal year ended
June 30, 2002, by $117,628,598 (net assets). Of this amount, $13,666,005 (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 $5,902,250. This increase is attributable to several factors
including the difference in accounting for capital assets within governmental funds versus the statement
of activities, and the need for additional capital improvements.
➢ As of June 30, 2002, the City's governmental funds reported combined ending fund balances of
$20,112,257, a decrease of $3,600,021 in comparison with the prior year. The decrease in combined
ending fund balances is primarily attributable to continued spending on capital projects, including San
Ramon drainage improvements and the Abalone Cove Sewer System. Approximately $1,592,001
(unreserved fund balance)is available for spending at the government's discretion.
➢ As of June 30, 2002, unreserved fund balance for the General fund was $7,233,654 or 76 percent of total
General fund expenditures.
➢ The City's total debt increased by $28,385 (0.5 percent) during the current fiscal year. The total increase
was entirely attributable to an increase in the accumulation of employee compensated absences.
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.
3
CITY OF RANCHO PALOS VERDES
MANAGEMENT'S DISCUSSION AND ANALYSIS
JUNE 30, 2002
The statement of activities presents information showing how the government's net assets changed during the
most recent fiscal year. All changes in net assets are reported as soon as the underlying event giving rise to the
change occurs, regardless of the timing of related cash flows. Thus, revenues and expenses are reported in this
statement for some items that will only result in cash flows in future fiscal periods (e.g. uncollected taxes and
earned but unused vacation leave).
Both the government-wide financial statements distinguish functions of the City, that are principally supported by
taxes and intergovernmental revenues (governmental activities) from other functions that are intended to recover
all or a significant portion of their costs through user fees and charges (business-type activities). The
governmental activities of the City include general government, public safety, public works, planning, building
and safety, and recreation. The City does not have business-type activities.
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 12-13 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 three categories: governmental funds,
proprietary funds, and fiduciary funds.
Governmental funds. Governmental funds are used to account for essentially the same functions reported as
governmental activities in the government-wide financial statements. However, unlike the government-wide
financial statements, governmental fund financial statements focus on near-term inflows and outflows of
spendable resources, as well as on balances of spendable resources available at the end of the fiscal year. Such
information may be useful in evaluating a government's near-term financing requirements.
Because the focus of governmental funds is narrower than that of the government-wide financial statements, it is
useful to compare the information presented for governmental funds with similar information presented for
governmental activities in the government-wide financial statements. By doing so,readers may better understand
the long-term impact of the government's near-term financing decisions. Both the governmental fund 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
resentedseparately 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 Measure A
fund, the Capital Improvements fund and the RDA Debt-Service fund, all of which are considered to be major
funds. Data from the other 24 governmental funds are combined into a single, aggregated presentation.
4
CITY OF RANCHO PALOS VERDES
MANAGEMENT'S DISCUSSION AND ANALYSIS
JUNE 30,2002
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 14-25 of this report.
Proprietary funds. The City of Rancho Palos Verdes maintains one type of proprietary fund. 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, other
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. 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 26-48 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 49-93 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$117,628,598 at June 30, 2002. By far the
largest portion of the City's net assets (79 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.
5
CITY OF RANCHO PALOS VERDES
MANAGEMENT'S DISCUSSION AND ANALYSIS
JUNE 30, 2002
City of Rancho Palos Verdes Net Assets
Governmental
Activities
June 30;2002
Current and other assets $ 32,700,457
Capital assets 93,636,014
Total Assets 126;336;471
Long-term liabilities outstanding 5,617,750
Other liabilities 3,090,123
Total Liabilities 18,707,873
Invested in capital assets 93,636,014
Restricted 10,326,579
Unrestricted 13,666,005
Total Net Assets $117,628,598
An additional portion of the City's net assets ($10,326,579 or 9 percent) represents resources that are subject to
external restrictions on how they may be used. The remaining balance of unrestricted net assets ($13,666,005 or
12 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 $5,902,250, thereby
accounting for 100 percent of the total growth in the net assets of the City.
City of Rancho Palos Verdes Changes in Net Assets
Governmental
Activities
June 30,2002
Program Revenues:
Charges for services $ 1,657,580
Operating contributions and grants 6,876,566
Capital contributions and grants 705,945
General Revenues:
Property taxes 5,252,509
Other taxes 6,786,581
Other 748,788
Total Revenues 22;027;96
6
CITY OF RANCHO PALOS VERDES
MANAGEMENT'S DISCUSSION AND ANALYSIS
JUNE 30,2002
City of Rancho Palos Verdes Changes in Net Assets,Continued
Governmental.
"Activities
June 30,2002
Expenses:
General government $ 3,068,413
Public safety 2,898,265
Public works 7,283,411
Parks and recreation 686,583
Planning,building and code enforcement 1,916,297
Interest on long-term debt 272,750
Total EX'enses" 16,125;7.19
Increase in Net Assets 5,902,250
Net Assets-July 1,2001 111,726,348
Net Assets June 3,0,2002 $117,628;598
Key elements of this increase are as follows:
➢ The difference in the method of accounting for capital assets in the governmental funds versus the
statement of activities accounts for an increase in excess of $8.2 million in net assets. Governmental
funds fully expend capital asset costs in the period they are acquired. However, in the statement of
activities,the cost of those assets is allocated over their estimated useful lives.
➢ General and Capital Improvements fund balances were depleted for additional necessary capital
improvements, including additional San Ramon drainage improvements ($1.4 million) and other
miscellaneous improvement projects($0.5 million).
➢ General fund balance was depleted for additional necessary legal expenses due to increased litigation
($0.5 million).
7
CITY OF RANCHO PALOS VERDES
MANAGEMENT'S DISCUSSION AND ANALYSIS
JUNE 30, 2002
Revenues by Source—Governmental Activities
other charges for services
3% 8%
other taxes
20%
operating contributions
and grants
31%
motor vehicle in lieu tax
11%
capital contributions and
property taxes grants
24% 3%
As of the end of the current fiscal year,the City's governmental funds reported combined ending fund balances of
$20,112,257, a decrease of $3,600,021 in comparison with the prior year. Approximately 8 percent of the
combined ending fund balances ($1,592,001) constitutes unreserved fund balance, which is available for spending
at the City's discretion. 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 liquidate contracts and purchase orders of
the prior period ($9,325,753), 2) to reserve the principal balance of loans made to the City's Redevelopment
Agency($5,865,552), and 3) for a variety of other restricted purposes($3,328,951).
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 $7,233,654, while total fund balance reached$13,805,478.
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. Unreserved fund balance represents 76 percent of total General fund
expenditures,while total fund balance represents 145 percent of that same amount.
During the current fiscal year, the fund balance of the City's General fund increased by $445,366. The key factor
in this growth follows:
➢ Revenues exceeded expenses by approximately $3.38 million; however, $2.93 million was transferred to
other funds primarily for capital projects.
8
CITY OF RANCHO PALOS VERDES
MANAGEMENT'S DISCUSSION AND ANALYSIS
JUNE 30, 2002
The debt service fund has a negative fund balance of$10,477,530, all of which is reserved for the payment of debt
service. 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 $558,745, which 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 Internal Service funds at the end of
the year amounted to$3,809,538. The total growth in net assets was $635,632.
General Fund Budgetary Highlights
The difference between the original budget and the final amended budget was an increase of$483,879; and can be
briefly summarized as follows:
➢ Additional litigation services were required at an estimated additional cost of$460,000.
➢ A decrease of approximately$410,000 was attributable to appropriations continued to FY 2002-2003.
➢ An increase of approximately$230,000 was attributable to appropriations continued from FY 2000-2001.
➢ Additional funds of$59,000 were required to support the View Restoration program.
➢ Additional funds of $35,000 were required for general engineering services within the Public Works
department.
➢ An increase of$35,000 was requested for implementation of Governmental Accounting Standards Board
Statement No. 34.
➢ An additional $20,000 was requested for temporary services in the Recreation department.
➢ Other immaterial increases totaled approximately$55,000.
The $483,879 increase was to be budgeted from available fund balance. During the year, however, expenditures
were $697,792 less than budgetary estimates,thus eliminating the need to draw upon existing fund balance.
Capital Asset and Debt Administration
Capital assets. The City's investment in capital assets for its governmental activities as of June 30, 2002,
amounts to $93,636,014 (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 9.4 percent.
9
CITY OF RANCHO PALOS VERDES
MANAGEMENT'S DISCUSSION AND ANALYSIS
JUNE 30, 2002
Major capital asset events during the current fiscal year included the following:
➢ The Barkentine Nature Preserve was acquired in August 2001 at a cost of$3,887,154.
➢ The Abalone Cove Sewer System was completed in June 2002 with a total project cost of$5,910,928.
➢ The Hawthorne/Crenshaw Road Rehabilitation project was completed in June 2002 with a total project
cost of$1,357,532.
➢ The San Ramon Drainage project is 79 percent complete with FY 2001-2002 expenses of$2,678,935.
City of Rancho Palos Verdes Capital Assets
(Net of Depreciation)
Governmental
Activities
June30,2002
Land 15,058,724
Buildings 2,242,919
Park improvements 659,527
Roadways 51,441,584
Sewer system 12,771,670
Storm drain system 5,815,947
Vehicles 55,336
Computer equipment 47,913
Furniture and other equipment 71,474
Construction in Progress 5,470,920
Total 93;636;01
Additional information on the City's capital assets can be found in note 4 on page 38 and 39 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$5,617,750. Of this amount, $5,455,000 is a liability of the Redevelopment Agency.
City of Rancho Palos Verdes Outstanding Debt
Governmental
Activities:
June 30,2002
A Tax Increment Bond 5,455,000
Employee compensated absences 162,750
Total 5,617,75
10
CITY OF RANCHO PALOS VERDES
MANAGEMENT'S DISCUSSION AND ANALYSIS
JUNE 30, 2002
The City's total debt increased by $23,385 (0.5 percent) during the current fiscal year, due to the accumulation of
additional employee compensated absences.
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 $855,290,626. Additional
information on the City's long-term debt can be found in note 5 on pages 39-41 of this report.
Economic Factors and Next Year's Budgets and Rates
➢ Local property values remain strong; therefore, property tax revenue (approximately 24 percent of City-
wide revenues)remains unaffected by the downturn in the economy.
➢ State shared revenues (i.e. Motor Vehicle In Lieu Tax) have substantially remained intact for FY 2002-
2003.
Both of these factors were considered in preparing the City's budget for FY 2002-2003.
During the current fiscal year, unreserved fund balance in the General fund increased to $7,233,654. The City of
Rancho Palos Verdes has appropriated $1,325,770 of this amount for spending in the FY 2002-2003 budget. It is
intended that this use of available fund balance will avoid the need to raise taxes or charges during FY 2002-2003.
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.
11
BASIC FINANCIAL STATEMENTS
GOVERNMENT-WIDE STATEMENTS
CITY OF RANCHO PALOS VERDES
STATEMENT OF NET ASSETS
JUNE 30,2002
Governmental
Activities
ASSETS
Cash and investments $ 29,344,896
Receivables:
Taxes 508,811
Interest 200,150
Notes 700,823
Other 475,070
Prepaid costs 768,315
Land held for development 702,392
Capital assets
Non-depreciable:
Land 15,058,724
Construction in progress 5,470,920
Depreciable,net of accumulated depreciation:
Property and equipment 174,723
Buildings and improvements 2,242,919
Infrastructure 70,688,728
Total Assets 126,336,471
LIABILITIES
Accounts payable and accrued liabilities 2,236,640
Interest payable 22,729
Retentions Payable 175,263
Deferred revenue 177,707
Deposits 477,784
Noncurrent liabilities:
Due within one year 108,451
Due in more than one year 5,509,299
Total Liabilities 8,707,873
NET ASSETS
Invested in capital assets 93,636,014
Restricted
Community development
Expendable 6,732,077
Non-expendable 1,000,000
Public safety 160,299
Public works 1,904,889
Recreation services 529,314
Unrestricted 13,666,005
Total Net Assets $ 117,628,598
See accompanying notes to financial statements.
12
CITY OF RANCHO PALOS VERDES
STATEMENT OF ACTIVITIES
YEAR ENDED JUNE 30, 2002
Program Revenues
Operating Capital Net
Charges for Contributions Contributions Governmental
Expenses Services and Grants and Grants Activities
Governmental Activities:
Administration $ 3,068,413 $ 156,736 $ 57,204 $ (2,854,473)
Public safety 2,898,265 432,924 173,902 (2,291,439)
Public works 7,283,411 78,245 6,645,460 $ 705,945 146,239
Parks and recreation 686,583 10,660 (675,923)
Planning,building and
code enforcement 1,916,297 979,015 (937,282)
Interest on long-term debt 272,750 (272,750)
Total Governmental Activities $16,125,719 $1,657,580 $ 6,876,566 $ 705,945 $ (6,885,628)
General Revenues:
Taxes:
Property tax,levied for general purpose 5,252,509
Transient occupancy tax 9,627
Franchise tax 1,138,539
Sales tax 1,092,745
Motor vehicle in lieu tax 2,389,257
Utility user tax 1,811,583
Other taxes 344,830
Investment income 814,220
Loss on asset disposal (187,886)
Other 122,454
Total General Revenues 12,787,878
Change in Net Assets 5,902,250
Net Assets at Beginning of Year 111,726,348
Net Assets at End of Year $ 117,628,598
See accompanying notes to financial statements.
13
FUND FINANCIAL STATEMENTS
CITY OF RANCHO PALOS VERDES
GOVERNMENTAL FUNDS
BALANCESHEET
JUNE 30, 2002
Special Revenue
Street
ASSETS General Maintenance Measure A
Cash and investments $ 7,537,084 $ 905,288 $ 62,771
Receivable
Taxes 488,494
Interest 57,347 4,001 458
Other 203,420 11,535 8,866
Due from other funds 946,737
Prepaid items 246,176
Advances to other funds 10,875,997
Land held for development
Total Assets $ 20,355,255 $ 920,824 $ 72,095
LIABILITIES AND FUND BALANCES
LIABILITIES
Accounts payable and accrued liabilities $ 893,841 $ 125,159 $ 8,494
Due to other funds 18,080
Retention payable 2,849
Deferred revenue 5,175,303
Deposits 477,784
Advances to Redevelopment Agency
Total Liabilities 6,549,777 125,159 26,574
FUND BALANCES
Reserved for:
Continuing appropriations 460,096 481,101
Reimbursement settlement agreement
Prepaid costs 246,176
Advances to other funds 5,865,552
Land development
Housing set-aside
Unreserved,reported in:
General fund 7,233,654
Special revenue funds 314,564 45,521
Capital projects funds
Permanent funds
Debt service
Total Fund Balances 13,805,478 795,665 45,521
Total Liabilities and
Fund Balances $ 20,355,255 $ 920,824 $ 72,095
See accompanying notes to financial statements.
14
Capital Debt
Projects Service Other
Capital Governmental
Improvements RDA Funds Totals
$ 6,237,102 $ 10,819,360 $ 25,561,605
20,317 508,811
37,183 $ 20 75,935 174,944
23,567 226,217 473,605
187,268 1,134,005
407,184 65,917 719,277
10,875,997
702,392 702,392
$ 6,485,120 $ 407,204 $ 11,910,138 $ 40,150,636
$ 1,016,017 $ 143,667 $ 2,187,178
$ 8,737 1,107,188 1,134,005
169,856 2,558 175,263
12,849 5,188,152
477,784
10,875,997 10,875,997
1,185,873 10,884,734 1,266,262 20,038,379
8,016,972 425,353 9,383,522
1,000,000 1,000,000
246,176
5,865,552
702,392 702,392
630,383 630,383
7,233,654
4,392,691 4,752,776
(2,717,725) 3,050,109 332,384
442,948 442,948
(10,477,530) (10,477,530)
5,299,247 (10,477,530) 10,643,876 20,112,257
$ 6,485,120 $ 407,204 $ 11,910,138 $ 40,150,636
15
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CITY OF RANCHO PALOS VERDES
GOVERNMENTAL FUNDS
RECONCILIATION OF THE BALANCE SHEET OF GOVERNMENTAL FUNDS
TO THE STATEMENT OF NET ASSETS
JUNE 30, 2002
Fund Balances of Governmental Funds $ 20,112,257
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. 93,461,291
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. 5,010,445
Interest expenditures are recognized when due, and therefore, interest payable
is not recorded in the governmental funds. (22,729)
Long-term notes receivable are not current available resources and,therefore,
are not reported in the governmental funds. 700,823
Long-term liabilities are not due and payable in the current period and, therefore,
are not reported in the governmental funds. (5,617,750)
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. 3,984,261
Net Assets of Governmental Activities $ 117,628,598
See accompanying notes to financial statements.
16
CITY OF RANCHO PALOS VERDES
GOVERNMENTAL FUNDS
STATEMENT OF REVENUES,EXPENDITURES AND
CHANGES IN FUND BALANCES
YEAR ENDED JUNE 30, 2002
Special Revenue
Street Parks/
General Maintenance Measure A
REVENUES
Taxes $ 8,372,642
Licenses and permits 1,244,871
Fines and forfeitures 116,598
Use of money and property 518,531 $ 27,137 $ 1,211
Charges for services 110,110 22,045
Revenue from other agencies 2,446,461 878,300 3,946,278
Otherrevenues 122,454 23,148
Total Revenues 12,931,667 950,630 3,947,489
EXPENDITURES
Current:
Administration 2,914,603
Public safety 2,650,322
Public works 1,343,768 1,417,472 4,900
Parks and recreation 668,939
Planning,building and
code enforcement 1,950,504
Pass through to other agencies
Capital outlay 24,494 3,887,154
Debt service:
Principal and interest
Total Expenditures 9,552,630 1,417,472 3,892,054
Excess(Deficiency)of Revenues
Over Expenditures 3,379,037 (466,842) 55,435
OTHER FINANCING SOURCES
Transfers in 107,441 530,500 60,512
Transfers out (3,041,112) (153,570) (71,572)
Total Other Financing Sources(Uses) (2,933,671) 376,930 (11,060)
Net Change in Fund Balances 445,366 (89,912) 44,375
Fund Balances,Beginning of Year 13,360,112 885,577 1,146
Prior Period Adjustment(Note#14)
Fund Balances,End of Year $ 13,805,478 $ 795,665 $ 45,521
See accompanying notes to financial statements.
17
Capital Debt
Projects Service Other
Capital Governmental
Improvements RDA Funds Total
$ 483,912 $ 1,820,575 $ 10,677,129
1,244,871
116,598
$ 220,851 97 385,056 1,152,883
85,232 217,387
392,876 506,599 8,170,514
92,218 324,868 562,688
705,945 484,009 3,122,330 22,142,070
2,914,603
247,943 2,898,265
2,818,438 11,357 1,853,415 7,449,350
668,939
1,950,504
101,570 101,570
2,487,280 1,847,505 8,246,433
929,827 929,827
5,305,718 1,042,754 3,948,863 25,159,491
(4,599,773) (558,745) (826,533) (3,017,421)
2,924,196 671,443 4,294,092
(1,610,438) (4,876,692)
2,924,196 (938,995) (582,600)
(1,675,577) (558,745) (1,765,528) (3,600,021)
6,974,824 300,135 13,047,099 34,568,893
(10,218,920) (637,695) (10,856,615)
$ 5,299,247 $ (10,477,530) $ 10,643,876 $ 20,112,257
18
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CITY OF RANCHO PALOS VERDES
RECONCILIATION OF THE STATEMENT OF REVENUES,EXPENDITURES AND
CHANGES IN FUND BALANCES OF GOVERNMENTAL FUNDS
TO THE STATEMENT OF ACTIVITIES
YEAR ENDED JUNE 30,2002
Net Change in Fund Balances-Total Governmental Funds $ (3,600,021)
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. This activity is reconciled as follows:
Cost of assets capitalized less disposals 11,047,454
Depreciation expense (2,872,635)
Unpaid accrued interest income is deferred in the governmental funds since it is
not available. This income is accrued in the Statement of Activities. 657,077
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. 63,128
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. (28,385)
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. 635,632
Change in Net Assets of Governmental Activities $ 5,902,250
See accompanying notes to financial statements.
19
CITY OF RANCHO PALOS VERDES
STATEMENT OF REVENUES,EXPENDITURES
AND CHANGES IN FUND BALANCE-BUDGET AND ACTUAL
GENERAL FUND
FOR THE YEAR ENDED JUNE 30,2002
Variance with
Final Budget-
Budgeted Amounts Actual Positive
Original Final Amounts (Negative)
REVENUES
Taxes $ 8,244,430 $ 8,244,430 $ 8,372,642 $ 128,212
Licenses and permits 1,080,300 1,080,300 1,244,871 164,571
Fines and forfeitures 135,000 135,000 116,598 (18,402)
Use of money and property 598,000 598,000 518,531 (79,469)
Charges for services 109,500 109,500 110,110 610
Revenue from other agencies 2,496,800 2,496,800 2,446,461 (50,339)
Other revenues 100,950 100,950 122,454 21,504
Total Revenues 12,764,980 12,764,980 12,931,667 166,687
EXPENDITURES
Current:
Administration 2,534,195 3,039,354 2,914,603 124,751
Public safety 2,693,190 2,717,199 2,650,322 66,877
Public works 1,681,610 1,606,002 1,343,768 262,234
Parks and recreation 732,760 765,560 668,939 96,621
Planning,building and
code enforcement 2,016,610 2,071,151 1,950,504 120,647
Capital outlay 82,600 25,578 24,494 1,084
Total Expenditures 9,740,965 10,224,844 9,552,630 672,214
Excess(Deficiency)of Revenues
Over Expenditures 3,024,015 2,540,136 3,379,037 838,901
OTHER FINANCING SOURCES(USES)
Transfers in 96,555 106,020 107,441 1,421
Transfers out (2,971,600) (4,581,112) (3,041,112) 1,540,000
Total Other Financing Sources(Uses) (2,875,045) (4,475,092) (2,933,671) 1,541,421
EXCESS(DEFICIENCY)OF REVENUES AND
OTHER FINANCING SOURCES OVER(UNDER)
EXPENDITURES AND OTHER FINANCING USES 148,970 (1,934,956) 445,366 2,380,322
Fund Balance,Beginning of Year 13,360,112 13,360,112 13,360,112
Fund Balance,End of Year $ 13,509,082 $ 11,425,156 $ 13,805,478 $ 2,380,322
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 30,2002
Variance with
Final Budget-
Budgeted Amounts Actual Positive
Original Final Amounts (Negative)
REVENUES
Use of money and property $ 50,000 $ 50,000 $ 27,137 $ (22,863)
Charges for services 21,600 21,600 22,045 445
Revenue from other agencies 889,500 939,500 878,300 (61,200)
Other revenues 5,000 5,000 23,148 18,148
Total Revenues 966,100 1,016,100 950,630 (65,470)
EXPENDITURES
Current:
Public works 1,934,800 1,678,802 1,417,472 261,330
Excess(Deficiency)of Revenues
Over Expenditures (968,700) (662,702) (466,842) 195,860
OTHER FINANCING SOURCES(USES)
Transfers in 521,500 530,500 530,500
Transfers out (278,000) (318,000) (153,570) 164,430
Total Other Financing Sources(Uses) 243,500 212,500 376,930 164,430
EXCESS(DEFICIENCY)OF REVENUES AND
OTHER FINANCING SOURCES OVER(UNDER)
EXPENDITURES AND OTHER FINANCING USES (725,200) (450,202) (89,912) 360,290
Fund Balance,Beginning of Year 885,577 885,577 885,577
Fund Balance,End of Year $ 160,377 $ 435,375 $ 795,665 $ 360,290
See accompanying notes to financial statements.
21
CITY OF RANCHO PALOS VERDES
STATEMENT OF REVENUES,EXPENDITURES
AND CHANGES IN FUND BALANCE-BUDGET AND ACTUAL
MEASURE A SPECIAL REVENUE FUND
FOR THE YEAR ENDED JUNE 30,2002
Variance with
Final Budget-
Budgeted Amounts Actual Positive
Original Final Amounts (Negative)
REVENUES
Use of money and property $ 1,211 $ 1,211
Revenue from other agencies $ 4,512,000 $4,512,000 3,946,278 (565,722)
Total Revenues 4,512,000 4,512,000 3,947,489 (564,511)
EXPENDITURES
Current:
Public works 4,900 (4,900)
Capital outlay 4,000,000 4,000,000 3,887,154 112,846
Total Expenditures 4,000,000 4,000,000 3,892,054 107,946
Excess(Deficiency)of Revenues
Over Expenditures 512,000 512,000 55,435 (456,565)
OTHER FINANCING SOURCES(USES)
Transfers in 60,512 60,512
Transfers out (2,957,310) (2,957,310) (71,572) 2,885,738
Total Other Financing Sources(Uses) (2,957,310) (2,896,798) (11,060) 2,885,738
EXCESS(DEFICIENCY)OF REVENUES AND
OTHER FINANCING SOURCES OVER(UNDER)
EXPENDITURES AND OTHER FINANCING USES (2,445,310) (2,384,798) 44,375 2,429,173
Fund Balance,Beginning of Year 1,146 1,146 1,146
Fund Balance,End of Year $(2,444,164) $(2,383,652) $ 45,521 $ 2,429,173
See accompanying notes to financial statements.
22
CITY OF RANCHO PALOS VERDES
STATEMENT OF NET ASSETS
PROPRIETARY FUNDS
JUNE 30,2002
Governmental
Activities-
Internal Service
Funds
ASSETS
Current Assets
Cash and investments $ 3,783,291
Receivables
Interest 25,206
Other 1,465
Prepaid items 49,038
Total Current Assets 3,859,000
Noncurrent Assets
Capital assets
Property and equipment 692,011
Accumulated depreciation (517,288)
Total Assets 4,033,723
LIABILITIES
Current Liabilities
Accounts payable and accrued liabilities 49,462
Total Liabilities 49,462
NET ASSETS
Invested in capital assets 174,723
Unrestricted 3,809,538
Total Net Assets $ 3,984,261
See accompanying notes to financial statements.
23
CITY OF RANCHO PALOS VERDES
STATEMENT OF REVENUE,EXPENSES,AND CHANGES
IN FUND NET ASSETS
PROPRIETARY FUNDS
FOR THE YEAR ENDED JUNE 30,2002
Governmental
Activities-
Internal Service
Funds
OPERATING REVENUES
Charges for services $ 941,739
Total Operating Revenues 941,739
OPERATING EXPENSES
Personnel services 479,994
Material and supplies 244,692
Maintenance 40,220
Depreciation 58,877
Total Operating Expenses 823,783
Operating Income 117,956
NONOPERATING REVENUES
Interest income 122,962
Loss on asset disposal (187,886)
Total Non Operating Revenues (64,924)
Income Before Transfers 53,032
TRANSFERS IN 582,600
Change in Net Assets 635,632
Net Assets,Beginning of Year 3,348,629
Net Assets,Ending of Year $ 3,984 261
See accompanying notes to financial statements.
24
CITY OF RANCHO PALOS VERDES
STATEMENT OF CASH FLOWS
PROPRIETARY FUNDS
FOR THE YEAR ENDED JUNE 30,2002
Governmental
Activities-
Internal Service
Funds
CASH FLOWS FROM OPERATING ACTIVITIES
Receipts from customers $ 965,386
Payments to suppliers (761,154)
Internal activity-payments from other funds (13,972)
NET CASH PROVIDED BY OPERATING ACTIVITIES 190,260
CASH FLOWS FROM CAPITAL AND
RELATED FINANCING ACTIVITIES
Acquisition of capital assets (91,251)
CASH FLOWS FROM NONCAPITAL
FINANCING ACTIVITIES
Operating transfer in 582,600
CASH FLOWS FROM INVESTING ACTIVITIES
Interest received on investments 135,380
NET INCREASE IN CASH AND CASH EQUIVALENTS 816,989
CASH AND CASH EQUIVALENTS,Beginning of Year 2,966,302
CASH AND CASH EQUIVALENTS,End of Year $ 3,783,291
RECONCILIATION OF OPERATING INCOME
TO NET CASH PROVIDED(USED)BY OPERATING
ACTIVITIES
Operating income $ 117,956
Adjustments to reconcile operating income to
net cash provided(used)by operating activities:
Depreciation 58,877
Decrease in other receivables 23,647
Decrease in prepaid items 8,178
Decrease in due to other funds (13,972)
Decrease in accounts payable
and accrued liabilities (4,426)
NET CASH PROVIDED BY
OPERATING ACTIVITIES $ 190,260
See accompanying notes to financial statements.
25
NOTES TO FINANCIAL STATEMENTS
CITY OF RANCHO PALOS VERDES
NOTES TO FINANCIAL STATEMENTS
JUNE 30,2002
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 City has implemented GASB Statements No. 33 and 34 and these statements are presented according to those
requirements. 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) Both the RDA and the Authority are managed by employees of the City.
26
CITY OF RANCHO PALOS VERDES
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2002
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.
In June 1999, the GASB unanimously approved Statement No. 34, Basic Financial Statements — and
Management's Discussion and Analysis —for State and Local Governments. Certain of the significant
changes in the Statement include the following:
• A change in the fund financial statements to focus on the major funds
• For the first time the financial statements include:
• A Management Discussion and Analysis (MD&A) section providing an analysis of the City's overall
financial position and results of operations.
• Financial statements prepared using full accrual accounting for all of the City's activities, including
infrastructure(roads,traffic signals, etc.)and long-term debt.
27
CITY OF RANCHO PALOS VERDES
NOTES TO FINANCIAL STATEMENTS
JUNE 30,2002
NOTE#1 —SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, Continued
These and other changes are reflected in the accompanying financial statements (including notes to financial
statements). The City has elected to implement the Statement including retroactive reporting of infrastructure
(assets acquired prior to July 1, 2000) in the current fiscal year.
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 required to be accounted for in
another fund.
• Special Revenue Funds—Used to account for the proceeds of specific revenue sources that are restricted
by law or administrative action for specified purposes.
• Debt Service Fund — The debt service fund of the RDA is used to account for property tax increment
revenue and related interest income. Disbursements from this fund consist mainly of principal and interest
on RDA indebtedness.
• Capital Projects Funds — Used to account for financial resources used for the construction of specific
capital projects.
• Permanent 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:
• 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.
28
CITY OF RANCHO PALOS VERDES
NOTES TO FINANCIAL STATEMENTS
JUNE 30,2002
NOTE#1 —SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, Continued
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.
Certain eliminations have been made as prescribed by GASB Statement No. 34 in regards to interfund
activities, payables, and receivables. All internal balances in the government-wide statements have been
eliminated.
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 as a major fund because the City believes the
financial position and activities of this fund are significant to the City as a whole.
All governmental funds are accounted for on a spending or"current financial resources"measurement focus
and the modified accrual basis of accounting. 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 unmatured interest on general long-term debt,which is recognized when due.
29
CITY OF RANCHO PALOS VERDES
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2002
NOTE#1 —SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, Continued
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 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 Measure A Fund is used 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.
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 noncurrent) 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.
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 internal service funds are charges to other funds for services. Operating expenses for the internal
service funds include 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(general government,public safety,public works, etc.).
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.
30
CITY OF RANCHO PALOS VERDES
NOTES TO FINANCIAL STATEMENTS
JUNE 30,2002
NOTE#1 —SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, Continued
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, Debt Service Fund, Capital Projects
Funds and the permanent Fund. These adjustments resulted in a net appropriation decrease in the amount of
$3,689,334. This increase resulted primarily from rebudgeted projects and amounts carried over from FY
2000-2001 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, 2002, based on calculations by City
Management,proceeds of taxes did not exceed related appropriations.
F. Advances to Other Funds
Long-term interfund 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.
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
31
CITY OF RANCHO PALOS VERDES
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2002
NOTE #1 —SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, Continued
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, 2002, vested accrued vacation and compensatory time amounted to$162,750.
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 investments" and "Cash
and investments—restricted"and are stated at fair value, (see Note#2).
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 it investment funds for maximum return. A substantial portion of these investments are 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, 2002, 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 CJP1A),
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). Deposits to the CJPIA are recorded by the City 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.
32
CITY OF RANCHO PALOS VERDES
NOTES TO FINANCIAL STATEMENTS
JUNE 30,2002
NOTE#1 —SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, Continued
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. Used 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.
NOTE#2—CASH AND INVESTMENTS
The City maintains a cash and investments pool, which is available for use by all funds. Each fund's portion of
the pool is displayed on the Financial Statements as "Cash and Investments".
Interest income earned on pooled cash and investments is allocated quarterly to the funds based on average
monthly cash and investment balances. Interest income from restricted cash is allocated directly to the fund
earning the income.
Authorized Investments:
Under provisions of the City's Investment Policy, and in accordance with Section 53601 of the California
Government Code, the City may invest in the following types of instruments, subject to certain restrictions as to
maturity and percentage of portfolio:
Demand Deposits and Money Market Accounts
Insured Certificates of Deposit
Repurchase Agreements
Obligations of the U.S. Treasury and U.S. Agencies
Assessment Bonds of the City of Rancho Palos Verdes
California Local Agency Investment Fund(LAIF)
Shares of"Money Market Funds"
Throughout the year ended June 30, 2002, the City did not utilize overnight Repurchase Agreements.
Classification of Deposits and Investments by Credit Risk
Statement No. 3 of the Governmental Accounting Standards Board requires that deposits and investments be
classified into three categories of credit risk. These categories are as follows:
33
CITY OF RANCHO PALOS VERDES
NOTES TO FINANCIAL STATEMENTS
JUNE 30,2002
NOTE#2—CASH AND INVESTMENTS, Continued
Deposits:
Category 1: Insured or collateralized with securities held by the City or by its agent in the City's name.
Category 2: Collateralized with securities held by the pledging financial institution's trust department or agent
in the City's name.
Category 3: Uncollateralized. This includes any bank balance that is collateralized with securities held by the
pledging financial institution or by its trust department or agent, but not in the City's name.
Investments:
Category 1: Insured or registered,or securities held by the City or its agent in the City's name.
Category 2: Uninsured and unregistered, with securities held by the pledging financial institutions or
counterparty's trust department or agent in the City's name.
Category 3: Uninsured and unregistered, with securities held by the counterparty or by its trust department or
agent,but not in the City's name.
Deposits and investments were categorized as follows at June 30,2002:
BANK BALANCE-
CATEGORY BANK CARRYING FAIR
Categorized: 1 2 3 BALANCES AMOUNTS VALUE
Demand Deposits $100,000 $2,285,594 $2,385,594 $ 1,924,939
Investments at June 30,2002,by risk category are as follows:
CATEGORY
1 2 3
Investments:
Local Agency
Investment Fund $ _ $ _ $ _ 27,418,957 $ 27,495,186 (2>
Petty cash on hand at June 30, 2002 1,000
Total Cash and Investments $ 29,344,896
34
CITY OF RANCHO PALOS VERDES
NOTES TO FINANCIAL STATEMENTS
JUNE 30,2002
NOTE#2—CASH AND INVESTMENTS, Continued
Cash and investments are reported in the accompanying financial statements as follows:
Governmental Funds $ 25,561,605
Proprietary Funds 3,783,291
$ 29,344,896
Not subject to categorization.
(Z) The management of the State of California Pooled Money Investment Account(generally referred to as LAIF)
has indicated to the City that as of June 30, 2002, the carrying amount of the pool was $47,719,552,487 and
the estimated market value of the pool (including accrued interest) was $48,082,558,174. The City's
proportionate share of the value is $27,418,957. Included in LAIF's investment portfolio are certain derivated
securities or similar products in the form of structures notes, totaling $551,578,000 and asset-backed
securities totaling $921,063,000. LAIF's (and the City's) exposure to risk (credit, market, or legal) is not
currently available.
Fair Value of Investments
GASB Statement No. 31 generally applies to investments in external investment pools (State of California LAIF),
investments purchased with maturities greater than one year, mutual funds, and certain investment pools
agreements. Generally, governmental entities need to report the "fair value" changes for these investments at
year-end and record these gains or losses on their income statement.
The City holds an investment in LAIF that is subject to being adjusted to "fair value". The City is required to
disclose its methods and assumptions used to estimate the fair value of its holdings in LAIF. The City relied upon
information provided by the State Treasurer in estimating the City's fair value position of its holding in LAIF.
The City had a contractual withdrawal value of$27,418,957 whose pro-rata share of fair value was estimated by
the state Treasurer to be $27,495,186. The fair value change in this investment for the year came to an amount
that was not material for presentation in the financial statements.
LAIF is a governmental investment pool managed and directed by the California State Treasurer and is not
registered with the Securities and Exchange Commission. An oversight committee, comprised of California State
officials and various participants, provide the management of the fund. The daily operations and responsibilities
of LAIF fall under the auspices of the State Treasurer's office. The City is a voluntary participant in the
investment pool.
35
CITY OF RANCHO PALOS VERDES
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2002
NOTE#3—INTERFUND TRANSACTIONS
Interfund Balances
Interfund balances consisted of the following at June 30, 2002:
Due to the General Fund from:
Abalone Cove Capital Projects Fund $ 938,000
This balance resulted from costs paid out of the General Fund during May and
June 2002 which are not reimbursed until July 2002
Redevelopment Agency Debt Service Fund $ 8,737
This balance resulted from advance made to cover deficit cash balance at year
end. The General Fund will be repaid with property tax revenue.
Due to the Capital Improvement Projects Fund from:
Measure A Fund $ 18,080
CDBG Fund $ 169,188
These balances resulted from advances made to cover deficit cash positions at
year-end. The CDBG fund balance will be repaid by the General Fund.
The Measure A fund balance will be repaid upon receipt of reimbursements for
expenditures incurred. All amounts are expected to be repaid during the fiscal year 2002-2003.
Interfund Advances
The General Fund has advanced the RDA Debt Service Fund amounts as described below:
Balance Balance
July 1, 2001 Additions Deletions June 30, 2002
Advances to the Redevelopment Agency $10,218,920 $ 657,077 $10,875,997
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, 2002, 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 9.134 percent
and 6.43 percent respectively during the fiscal years ended June 30, 2001 and 2002. Of the $10,875,997
remaining indebtedness, $8,656,978 relates to the Portuguese Bend portion of the RDA, while $2,219,019 relates
to the Abalone Cove portion. During the year ended June 30, 2002, accrued interest of$523,014 was added to the
balance of the advance to the Portuguese Bend Fund, while accrued interest of$134,063 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.
36
CITY OF RANCHO PALOS VERDES
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2002
NOTE#3—INTERFUND TRANSACTIONS, Continued
Interfund Transfers
Interfund transfers for the year ended June 30, 2002 consisted of the following:
Transfer From
General Street Other
Fund Maintenance Measure A Governmental Total
General Fund $ 56,771 $ 50,670 $ 107,441
Street Maintenance $ 9,000 521,500 530,500
° Measure A 60,512 60,512
H
Capital Improvement Project 1,834,000 $ 153,570 14,801 921,825 2,924,196
H Other Governmental 555,000 116,443 671,443
Internal Service 582,600 582,600
Total $ 3,041,112 $ 153,570 $ 71,572 $ 1,610,438 $ 4,876,692
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.
37
CITY OF RANCHO PALOS VERDES
NOTES TO FINANCIAL STATEMENTS
JUNE 30,2002
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 approach as defined by GASB
Statement No. 34 for all infrastructure reporting, whereby depreciation expense and accumulated depreciation has
been recorded. The following table presents the capital assets activity for the year ended June 30, 2002.
Beginning Ending
Balance Increases Decreases Balance
Governmental Activities
Capital assets not being depreciated:
Land $ 11,168,592 $ 3,890,132 $ 15,058,724
Construction in progress 5,861,369 3,497,414 $(3,887,863) 5,470,920
Total capital asset not being depreciated 17,029,961 7,387,546 (3,887,863) 20,529,644
Capital assets,being depreciated:
Buildings and improvements 3,197,989 3,197,989
Vehicles 170,296 44,738 (37,965) 177,069
Computer equipment 562,740 36,997 (376,286) 223,451
Furniture, fixtures and equipment 747,207 12,269 (467,985) 291,491
Infrastructure
Roadway system 73,688,651 1,502,554 75,191,205
Sewer system 19,844,535 5,910,928 25,755,463
Storm drain system 6,583,525 134,289 6,717,814
Parks system 4,191,673 4,191,673
Total capital asset being depreciated 108,986,616 7,641,775 (882,236) 115,746,155
Less accumulated depreciation for:
Buildings and improvements (891,110) (63,960) (955,070)
Vehicles (149,916) (8,780) 36,963 (121,733)
Computer equipment (415,705) (28,758) 268,925 (175,538)
Furniture, fixtures and equipment (584,387) (21,339) 385,709 (220,017)
Infrastructure
Roadway system (21,634,990) (2,114,631) (23,749,621)
Sewer system (12,447,939) (535,854) (12,983,793)
Storm drain system (779,015) (122,852) (901,867)
Parks system (3,496,808) (35,338) (3,532,146)
Total accumulated depreciation (40,399,870) (2,931,512) 691,597 (42,639,785)
Total capital assets,being depreciated,net 68,586,746 4,710,263 (190,639) 73,106,370
Governmental activities capital assets,net $ 85,616,707 $12,097,809 $(4,078,502) $ 93,636,014
38
CITY OF RANCHO PALOS VERDES
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2002
NOTE #4—CAPITAL ASSETS AND DEPRECIATION, Continued
Depreciation expense was charged to functions/programs of the primary government as follows:
Administration $ 63,960
Public works, including depreciation of general infrastructure assets 2,773,337
Recreation services 35,338
Capital assets held by the City's internal service funds are charged to the various
functions based on their usage of the assets 58,877
Total Depreciation Expense-Governmental Activities $ 2,931,512
NOTE#5—LONG-TERM DEBT
Balance Balance Amount Due
July 1, 2001 Additions Deletions June 30, 2002 in 2003
RDA Tax Increment Bond $ 5,455,000 $ 5,455,000
Employee compensated absences 134,365 $ 28,385 162,750 $ 108,451
Totals $ 5,589,365 $ 28,385 $ - $ 5,617,750 $ 108,451
A. RDA Tax Increment Bond
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
Nonexpendable Trust Fund of the Joint Powers Improvement Authority. The remainder of the proceeds were
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.
39
CITY OF RANCHO PALOS VERDES
NOTES TO FINANCIAL STATEMENTS
JUNE 30,2002
NOTE#5—LONG-TERM DEBT,Continued
A. RDA Tax Increment Bond,Continued
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 to be paid 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 to be paid 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.
The RDA bond was issued as a conduit through the Improvement Authority to the County. No issuance costs
were incurred. One hundred (100 percent)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, commending December 2, 2004. Interest accrues at a rate of 5 percent per annum and is
payable in arrears each June 2nd and December 2"d. 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. 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, 2002.
40
CITY OF RANCHO PALOS VERDES
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2002
NOTE#S—LONG-TERM DEBT, Continued
A. RDA Tax Increment Bond,Continued
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
2003 $ - $ 272,750 $ 272,750
2004 - 272,750 272,750
2005 5,000 272,625 277,625
2006 15,000 272,125 287,125
2007-2011 270,000 1,334,250 1,604,250
2012-2016 690,000 1,214,750 1,904,750
2017-2021 1,275,000 972,875 2,247,875
2022-2026 2,085,000 557,875 2,642,875
2027-2028 1,115,000 56,875 1,171,875
$ 5,455,000 $ 5,226,875 $ 10,681,875
B. Employee Compensated Absences
There is no fixed payment schedule for employee compensated absences. Based on historical trends,
$108,451 is estimated to be the amount that will be used and/or paid out during fiscal year 2002-2003.
41
CITY OF RANCHO PALOS VERDES
NOTES TO FINANCIAL STATEMENTS
JUNE 30,2002
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.
Fund "designations" also are established 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, 2002 are presented below, followed by
explanations of the nature and purpose of each reserve and designation.
Steet Capital Other
General Maintenance Improvement Governmental
Fund Fund Fund Funds
Reserved:
Continuing appropriations $ 460,096 $ 481,101 $ 8,016,972 $ 425,353
Reimbursement
settlement agreement - - - 1,000,000
Advances to other funds 5,865,552 - - -
Prepaid costs 246,176 - - -
Land held for development - - - 702,392
Housing set-aside - - - 630,383
Total Reserved $6,571,824 $ 481,101 $ 8,016,972 $ 2,758,128
42
CITY OF RANCHO PALOS VERDES
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2002
NOTE#6—CLASSIFICATIONS OF NET ASSETS AND FUND BALANCE, Continued
A. Reserves for Encumbrances and Continuing Appropriations
These reserves are maintained for purchase orders and other commitments outstanding at year-end.
B. Reserved for Reimbursement Settlement Agreement
This reserve has been established under the legal requirements of the Reimbursement Settlement Agreement
(see Note#5).
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
$5,010,445 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 an "available" spendable resource to
meet expenditures of the current year.
E. Reserved for Land 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.
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. A menu of benefit provisions as well as other requirements are
established by State statutes within the Public Employees' Retirement Law. The City selects optional benefit
provisions from the benefit menu by contract with CalPERS and adopts those benefits through local ordinance.
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.
43
CITY OF RANCHO PALOS VERDES
NOTES TO FINANCIAL STATEMENTS
JUNE 30,2002
NOTE#7—PENSION PLAN, Continued
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 fiscal year 2000-2001 was zero 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 Ca1PERS.
Annual Pension Cost
For Fiscal Year 2001-2002, the City's actual and contributed pension cost was $144,783. The required
contribution for fiscal year 2001-2002 was determined as part of the June 30, 2000, 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 unfunded actuarial accrued liability(or excess assets) is being amortized as a level percentage of projected
payroll on a closed basis. The remaining amortization period at June 30, 2002, was one year.
Three-Year Trend Information for Plan
Annual Percentage
Fiscal Year Pension Cost of APC Net Pension
Ending (APC) Contributed Obligation
6/30/2000 $ 135,001 100% $ 0
6/30/2001 133,460 100% $ 0
6/30/2002 144,783 100% $ 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
6/30/1999 $6,503,040 $ 4,468,478 $ (2,034,562) 145.5% $2,064,127 (98.568)%
6/30/2000 7,227,658 5,690,826 (1,536,832) 127.0% 2,102,848 (73.083)%
6/30/2001 7,445,220 6,515,182 (930,038) 114.3% 2,086,935 (44.6)%
44
CITY OF RANCHO PALOS VERDES
NOTES TO FINANCIAL STATEMENTS
JUNE 30,2002
NOTE#8—INSURANCE
A. Description of Participation in the California Joint Powers Insurance Authority
The City is a member of the California Joint Powers Insurance Authority (CJPIA). The CJPIA is comprised
of over 80 California member cities and is organized under a Joint Powers Agreement pursuant to the
California Government Code. The purpose of the CJP1A is to arrange and administer programs of insurance
for the pooling of self-insured losses and to purchase excess insurance coverage. Each member city has a
representative on the Board of Directors. The accounting methods used by the CJP1A are more fully
described at Note#I-K.
Self-insurance Proexams of the CJP1A
• General Liability Insurance
Annual deposits are paid by member cities and are adjusted retrospectively to cover costs. Each member
city, including Rancho Palos Verdes, has a retention level of$20,000 and pays 100 percent of each loss
up to $20,000. The City does not share or pay for losses of other member cities under $20,000.
Participating cities then share in the next $20,000 to $500,000 per loss occurrence. Losses between
$500,000 and $5,000,000 are prorated on a payroll basis between member cities. Losses between
$5,000,000 and $50,000,000 are covered by the pool's purchased re-insurance. Specific coverage
includes automotive liability, personal injury, contractual liability, errors and omissions and certain other
coverage. Beginning with fiscal year 1987,the CJPIA became fully self-insured.
• Workers' Compensation
Periodic deposits are paid by member cities and are adjusted retrospectively to cover costs. Each member
city has a specific retention level. The City of Rancho Palos Verdes has a retention level of$50,000 and
pays 100 percent of all losses incurred up to $50,000. The City does not share or pay for losses of other
cities under $50,000. Losses of$50,000 to $100,000 are prorated among all participating cities on the
basis of each city's total losses under its retention level. Losses between $100,000 and $500,000 are
prorated on a payroll basis. Losses in excess of$500,000 and up to a limit of$5 million are covered by
excess insurance purchased by the member cities.
• Property Protection
The City of Rancho Palos Verdes participates in the All Risk Property Protection Program, which is
primarily underwritten by a casualty insurance company. The annual deposits paid by participating
member cities are based upon deductibility levels and are not subject to retroactive adjustments. The City
also has insurance coverage for boiler and machinery.
45
CITY OF RANCHO PALOS VERDES
NOTES TO FINANCIAL STATEMENTS
JUNE 30,2002
NOTE#8—INSURANCE, Continued
B. Summary Disclosure of Self-Insurance Losses
The City is exposed to various risks of losses related to torts; theft of, damage to, and destruction of assets;
errors and omissions; injuries to employees; and natural disasters. The City currently reports all of its risk
management activities in its General Fund.
Settled claims have not exceeded any of the coverage amounts in any of the last three fiscal years. No
reductions in coverage occurred in the year ended June 30, 2002. As previously described in Note #1-M, 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. Accordingly, the unretired principal at June 30, 2002 of
$33,661 has not been recorded as a long-term liability in the Statement of Net Assets.
NOTE#10—CONTINGENCIES AND COMMITMENTS
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.
The United States Army Corps of Engineers has agreed to perform the remaining cleanup operations, which has
been memorialized in a written agreement. As a result, no amount has been recorded as a long-term liability in
the Statement of Net Assets at June 30,2002.
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
46
CITY OF RANCHO PALOS VERDES
NOTES TO FINANCIAL STATEMENTS
JUNE 30,2002
NOTE#12—DEFERRED REVENUES
The deferred revenues in the fund financial statements of the City of Rancho Palos Verdes as of June 30, 2002
consisted of the following:
Source General Fund
Accrued Interest from Long-Term Advances
to the Redevelopment Agency $ 5,010,445
Advance on Federal Grant 164,858
Advance on Local Grants 12,849
Total Deferred Revenues $ 5,188,152
NOTE#13—LAND HELD FOR DEVELOPMENT
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).
The City expects one or more developers to file an application for a multiple unit housing project, with an
affordable housing element, during the fiscal year ending June 30, 2003. Upon approval, the City anticipates
transferring the land to a 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.
Following such reimbursement, the fund balance will likely exceed $1 million. 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 spend such excess within
an additional two years after such occurrence. The Community Redevelopment Law sets forth substantial
penalties if the RDA fails to properly dispose of excess surplus funds.
47
CITY OF RANCHO PALOS VERDES
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2002
NOTE#14—PRIOR PERIOD ADJUSTMENT
The City recorded two prior period adjustments in the year ended June 30, 2002. A long-term receivable was
previously recorded in the RDA Portuguese Bend Fund. Because only current financial resources should be
recorded in governmental funds, the beginning balance of this receivable, $637,695, has been removed from the
RDA Portuguese Bend Fund.
As is common with many California cities, the City has advanced resources to the Redevelopment Agency.
Previously, the receivable was recorded in the General Fund and the liability was recorded in the General Long-
Term Debt Account Group. The advance is an interfund balance that should be reported as an asset of the
advancing fund and a liability of the fund receiving the advance. A second prior period adjustment was recorded
in the RDA Debt Service Fund to record the beginning advance liability of$10,218,920.
NOTE#15—SUBSEQUENT EVENTS
The City leases land from the County of Los Angeles, which was previously owned by the federal government.
The property houses an educational museum called the Point Vicente Interpretive Center (PVIC). While
performing grading at the site in August 1999, soil with a high concentration of lead was discovered and the park
facility was immediately closed.
The contaminated soil is a result of a gunnery range operated on the site by the County and United States Army.
Through June 30, 2002, the City has paid $726,683 for soil remediation efforts. The City has budgeted an
additional $553,259 for FY 2002-2003 for soil remediation activities. The City paid $385,000 on
August 31, 2002 from the FY 2002-2003 budget, for final settlement with the owner of a landfill, regarding
disposal of the contaminated soil.
NOTE#16—OTHER REQUIRED FUND DISCLOSURES
The following funds had deficit fund balances as of June 30, 2002:
RDA Debt Services Fund $10,477,530
CDBG Special Revenue Fund $ 436
The City plans to finance these deficits through future revenues to the funds.
48
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SUPPLEMENTARY SCHEDULES
CITY OF RANCHO PALOS VERDES
JUNE 30,2002
MAJOR FUND BUDGETARY COMPARISON SCHEDULES
Budgetary comparison statements are presented as part of the basic financial statements for the General Fund and
all Major Special Revenue Funds 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.
49
CITY OF RANCHO PALOS VERDES
SCHEDULE OF REVENUES,EXPENDITURES
AND CHANGES IN FUND BALANCE-BUDGET AND ACTUAL
CAPITAL IMPROVEMENT PROJECT CAPITAL PROJECTS FUND
FOR THE YEAR ENDED JUNE 30,2002
Variance with
Final Budget-
Budgeted Amounts Actual Positive
Original Final Amounts (Negative)
REVENUES
Use of money and property $ 186,700 $ 186,700 $ 220,851 $ 34,151
Revenue from other agencies 376,000 376,000 392,876 16,876
Other revenues 92,218 92,218
Total Revenues 562,700 562,700 705,945 143,245
EXPENDITURES
Current:
Public works 1,139,560 1,304,020 2,818,438 (1,514,418)
Capital outlay 11,154,760 6,030,258 2,487,280 3,542,978
Total Expenditures 12,294,320 7,334,278 5,305,718 2,028,560
Excess(Deficiency)of Revenues
Over Expenditures (11,731,620) (6,771,578) (4,599,773) 2,171,805
OTHER FINANCING SOURCES(USES)
Operating transfer in 7,060,560 9,168,225 2,924,196 (6,244,029)
EXCESS(DEFICIENCY)OF REVENUES AND
OTHER FINANCING SOURCES OVER(UNDER)
EXPENDITURES AND OTHER FINANCING USES (4,671,060) 2,396,647 (1,675,577) (4,072,224)
Fund Balance,Beginning of Year 6,974,824 6,974,824 6,974,824
Fund Balance,End of Year $2,303,764 $ 9,371,471 $ 5,299,247 $ (4,072,224)
50
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 30,2002
Variance with
Final Budget-
Budgeted Amounts Actual Positive
Original Final Amounts (Negative)
REVENUES
Taxes $ 451,000 $ 451,000 $ 483,912 $ 32,912
Use of money and property 600 600 97 (503)
Total Revenues 451,600 451,600 484,009 32,409
EXPENDITURES
Current:
Public works 11,500 11,500 11,357 143
Pass through to other agencies 96,000 104,500 101,570 2,930
Debt Service-interest 1,272,230 1,272,230 929,827 342,403
Total Expenditures 1,379,730 1,388,230 1,042,754 345,476
Excess(Deficiency)of Revenues
Over Expenditures (928,130) (936,630) (558,745) 377,885
OTHER FINANCING SOURCES(USES)
Advances to Redevelopment Agency 999,480 999,480 (999,480)
EXCESS(DEFICIENCY)OF REVENUES AND
OTHER FINANCING SOURCES OVER(UNDER)
EXPENDITURES AND OTHER FINANCING USES 71,350 62,850 (558,745) (621,595)
Fund Balance,Beginning of Year 300,135 300,135 300,135
Prior Period Adjustment (10,218,920) (10,218,920)
Fund Balance,End of Year $ 371,485 $ 362,985 $(10,477,530) $ (10,840,515)
51
CITY OF RANCHO PALOS VERDES
JUNE 30, 2002
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 Qualily Mana e� — to account for AB2766 fees received to fund programs to reduce air pollution from
motor vehicles.
Community Development Block Grant (CDBG)—to account for Federal Grants received from the Department of
Housing and Urban Development(HUD).
El Prado—to account for taxes collected to maintain and service existing and proposed improvements.
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.
Recycling — to account for monies received for the City's recycling program used for community improvement,
grants and promotion of recycling.
Solid Waste — to account for AB939 fees received for state mandated waste reduction and recycling plans and
programs.
LLESS/COPS/CLEEP — 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 (7PIA) — Portuguese Bend — to account for maintenance and repairs of
landslide abatement improvements in the Portuguese Bond 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.
52
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CITY OF RANCHO PALOS VERDES
JUNE 30, 2002
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.
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, as well as 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.
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.
53
CITY OF RANCHO PALOS VERDES
NON-MAJOR GOVERNMENTAL FUNDS
COMBINING BALANCE SHEET
JUNE 30,2002
Special Revenue Funds
Air Quality
ASSETS Management CDBG El Prado
Cash and investments $ 19,181 $ 9,489
Receivable
Taxes 39
Interest 65 62
Notes
Other 12,862 $ 132,008
Prepaid items 50,420
Land held for development
Total Assets $ 32,108 $ 182,428 $ 9,590
LIABILITIES AND FUND BALANCES
LIABILITIES
Accounts payable and accrued liabilities 56 13,676 14
Due to other funds 169,188
Retention payable
Deferred revenue
Total Liabilities 56 182,864 14
FUND BALANCES
Reserved for:
Continuing appropriations
Reimbursement settlement agreement
Land development
Housing set-aside
Unreserved,reported in:
Special revenue funds 32,052 (436) 9,576
Capital projects funds
Permanent funds
Total Fund Balances 32,052 (436) 9,576
Total Liabilities and
Fund Balances $ 32,108 $ 182,428 $ 9,590
54
Special Revenue Funds
Redevelopment
Agency-
Housing Proposition Proposition Solid
Set-Aside A C Recycling Waste
$ 621,716 $ 288,568 $ 287,803 $ 610,459 $ 735,473
4,071
4,517 2,166 7,699 4,615 4,871
79 53,670 23,117
702,392
$ 1,332,775 $ 290,734 $ 295,502 $ 668,744 $ 763,461
14,196 5 2,101 5,858
- 14,196 5 2,101 5,858
104,153 2,000
702,392
630,383
276,538 295,497 562,490 755,603
1,332,775 276,538 295,497 666,643 757,603
$ 1,332,775 $ 290,734 $ 295,502 $ 668,744 $ 763,461
55
CITY OF RANCHO PALOS VERDES
NON-MAJOR GOVERNMENTAL FUNDS
COMBINING BALANCE SHEET (CONTINUED)
JUNE 30,2002
Special Revenue Funds
LLESS/
ASSETS COPS/CLEEP 1972 Act 1911 Act
Cash and investments $ 187,153 $ 225,327 $ 996,242
Receivable
Taxes 5,603 10,604
Interest 1,293 3,706 6,562
Notes
Other
Prepaid items
Land held for development
Total Assets $ 188,446 $ 234,636 $ 1,013,408
LIABILITIES AND FUND BALANCES
LIABILITIES
Accounts payable and accrued liabilities 28,147 22,517
Due to other funds
Retention payable
Deferred revenue
Total Liabilities 28,147 - 22,517
FUND BALANCES
Reserved for:
Continuing appropriations 57,769
Reimbursement settlement agreement
Land development
Housing set-aside
Unreserved,reported in:
Special revenue funds 102,530 234,636 990,891
Capital projects funds
Permanent funds
Total Fund Balances 160,299 234,636 990,891
Total Liabilities and
Fund Balances $ 188,446 $ 234,636 $ 1,013,408
56
Special Revenue Funds
Joint Powers
Improvement Abalone Cove
Authority- Sewer
Portuguese Habitat Subregion One Assessment
Bend Restoration Maintenance District
$ 179,552 $ 237,575 $ 825,835 $ 46,305
1,295 1,566 5,458 295
404
$ 180,847 $ 239,141 $ 831,293 $ 47,004
2,884 1,250 231
2,884 1,250 231
120,000 40,606
177,963 119,141 830,043 6,167
177,963 239,141 830,043 46,773
$ 180,847 $ 239,141 $ 831,293 $ 47,004
57
CITY OF RANCHO PALOS VERDES
NON-MAJOR GOVERNMENTAL FUNDS
COMBINING BALANCE SHEET(CONTINUED)
JUNE 30, 2002
Capital Projects Funds
Redevelopment
Agency-
Abalone Environmental
ASSETS Bikeways Cove Excise Tax Quimby
Cash and investments $ 12,509 $ 1,053,541 $ 654,675 $ 480,686
Receivable
Taxes
Interest 340 1,018 4,328 3,107
Notes
Other 4,077
Prepaid items
Land held for development
Total Assets $ 12,849 $ 1,054,559 $ 663,080 $ 483,793
LIABILITIES AND FUND BALANCES
LIABILITIES
Accounts payable and accrued liabilities 48,423
Due to other funds 938,000
Retention payable 2,558
Deferred revenue 12,849
Total Liabilities 12,849 988,981
FUND BALANCES
Reserved for:
Continuing appropriations 100,825
Reimbursement settlement agreement
Land development
Housing set-aside
Unreserved,reported in:
Special revenue funds
Capital projects funds 65,578 663,080 382,968
Permanent funds
Total Fund Balances 65,578 663,080 483,793
Total Liabilities and
Fund Balances $ 12,849 $ 1,054,559 $ 663,080 $ 483,793
58
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
$ 974,619 $ 414,513 $ 227,099 $ 298,057 $ 1,432,983 $ 10,819,360
20,317
6,426 3,161 1,310 1,147 10,928 75,935
226,217
15,497 65,917
702,392
$ 981,045 $ 433,171 $ 228,409 299,204 $ 1,443,911 $ 11,910,138
3,346 963 143,667
1,107,188
2,558
12,849
3,346 963 1,266,262
425,353
1,000,000 1,000,000
702,392
630,383
4,392,691
981,045 429,825 228,409 299,204 3,050,109
442,948 442,948
981,045 429,825 228,409 299,204 1,442,948 10,643,876
$ 981,045 $ 433,171 $ 228,409 $ 299,204 $ 1,443,911 $ 11,910,138
59
CITY OF RANCHO PALOS VERDES
NON-MAJOR GOVERNMENTAL FUNDS
COMBINING STATEMENT OF REVENUES,EXPENDITURES
AND CHANGES IN FUND BALANCES
YEAR ENDED JUNE 30,2002
Special Revenue Funds
Air Quality
Management CDBG El Prado
REVENUES
Taxes $ 47,649 $ 1,161
Use of money and property 203 292
Charges for services
Revenue from other agencies $ 277,360
Other revenues
Total Revenues 47,852 277,360 1,453
EXPENDITURES
Current:
Public safety
Public works 43,748 238,591 158
Capital outlay
Total Expenditures 43,748 238,591 158
Excess(Deficiency)of Revenues Over
Over Expenditures 4,104 38,769 1,295
Other Financing Sources(Uses):
OTHER FINANCING SOURCES
Transfers in
Transfers out (39,205)
Total Other Financing Sources(Uses) (39,205)
Net Change in Fund Balances 4,104 (436) 1,295
FUND BALANCES,Beginning of Year 27,948 8,281
Prior Period Adjustment
FUND BALANCES,End of Year $ 32,052 $ (436) $ 9,576
60
Special Revenue Funds
Redevelopment
Agency-
Housing Proposition Proposition Solid
Set-Aside A C Recycling Waste
$ 125,127 $ 535,494 $ 444,153
19,422 8,340 33,347 $ 22,027 $ 24,872
85,232
11,915 14,326
224,061
144,549 543,834 477,500 258,003 124,430
1,379 443,440 1,413 129,858 108,594
13,480
1,379 456,920 1,413 129,858 108,594
143,170 86,914 476,087 128,145 15,836
(90,000) (938,475) (112,000) (16,443)
(90,000) (938,475) (112,000) (16,443)
143,170 (3,086) (462,388) 16,145 (607)
1,189,605 279,624 757,885 650,498 758,210
$ 1,332,775 $ 276,538 $ 295,497 $ 666,643 $ 757,603
61
CITY OF RANCHO PALOS VERDES
NON-MAJOR GOVERNMENTAL FUNDS
COMBINING STATEMENT OF REVENUES,EXPENDITURES
AND CHANGES IN FUND BALANCES(CONTINUED)
YEAR ENDED JUNE 30,2002
Special Revenue Funds
LLESS/
COPS/CLEEP 1972 Act 1911 Act
REVENUES
Taxes $ 324,015 $ 322,509
Use of money and property $ 8,176 13,686 31,592
Charges for services
Revenue from other agencies 165,726
Other revenues
Total Revenues 173,902 337,701 354,101
EXPENDITURES
Current:
Public safety 247,943
Public works 52,819 291,603
Capital outlay
Total Expenditures 247,943 52,819 291,603
Excess(Deficiency)of Revenues Over
Over Expenditures (74,041) 284,882 62,498
Other Financing Sources(Uses):
OTHER FINANCING SOURCES
Transfers in
Transfers out (361,000)
Total Other Financing Sources(Uses) (361,000)
Net Change in Fund Balances (74,041) (76,118) 62,498
FUND BALANCES,Beginning of Year 234,340 310,754 928,393
Prior Period Adjustment
FUND BALANCES,End of Year $ 160,299 $ 234,636 $ 990,891
62
Special Revenue Funds
Joint Powers
Improvement Abalone Cove
Authority- Sewer
Portuguese Habitat Subregion One Assessment
Bend Restoration Maintenance District
$ 20,467
$ 5,586 $ 7,851 $ 27,371 700
5,586 7,851 27,371 21,167
48,724 3,750 9,394
48,724 3,750 9,394
(43,138) 7,851 23,621 11,773
95,000 35,000
95,000 35,000
51,862 7,851 23,621 46,773
126,101 231,290 806,422
$ 177,963 $ 239,141 $ 830,043 $ 46,773
63
CITY OF RANCHO PALOS VERDES
NON-MAJOR GOVERNMENTAL FUNDS
COMBINING STATEMENT OF REVENUES,EXPENDITURES
AND CHANGES IN FUND BALANCES (CONTINUED)
YEAR ENDED JUNE 30,2002
Capital Projects
Redevelopment
Agency-
Abalone Environmental
Bikeways Cove Excise Tax Quimby
REVENUES
Taxes
Use of money and property $ 1,594 $ 33,844 $ 21,400 $ 15,225
Charges for services
Revenue from other agencies 37,272
Other revenues 28,400 23,230
Total Revenues 38,866 33,844 49,800 38,455
EXPENDITURES
Current:
Public safety
Public works 242,659 1,118
Capital outlay 1,834,025
Total Expenditures 2,076,684 1,118
Excess(Deficiency)of Revenues Over
Over Expenditures 38,866 (2,042,840) 49,800 37,337
Other Financing Sources(Uses):
OTHER FINANCING SOURCES
Transfers in 16,443
Transfers out (38,874) (4,976) (9,465)
Total Other Financing Sources(Uses) (38,874) (4,976) 6,978
Net Change in Fund Balances (8) (2,042,840) 44,824 44,315
FUND BALANCES,Beginning of Year 8 2,108,418 618,256 439,478
Prior Period Adjustment
FUND BALANCES,End of Year $ - $ 65,578 $ 663,080 $ 483,793
64
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
$ 1,820,575
$ 32,207 $ 17,355 $ 3,409 $ 2,994 $ 53,563 385,056
85,232
506,599
49,177 324,868
32,207 66,532 3,409 2,994 53,563 3,122,330
247,943
151,710 3,790 80,667 1,853,415
1,847,505
151,710 3,790 80,667 3,948,863
32,207 (85,178) 3,409 (796) (27,104) (826,533)
225,000 300,000 671,443
(1,610,438)
225,000 300,000 (938,995)
32,207 (85,178) 228,409 299,204 (27,104) (1,765,528)
948,838 1,152,698 1,470,052 13,047,099
(637,695) (637,695)
$ 981,045 $ 429,825 $ 228,409 $ 299,204 $ 1,442,948 $ 10,643,876
65
CITY OF RANCHO PALOS VERDES
SCHEDULE OF REVENUES,EXPENDITURES
AND CHANGES IN FUND BALANCE-BUDGET AND ACTUAL
AIR QUALITY MANAGEMENT SPECIAL REVENUE FUND
FOR THE YEAR ENDED JUNE 30,2002
Variance with
Final Budget-
Budgeted Amounts Actual Positive
Original Final Amounts (Negative)
REVENUES
Taxes $ 48,000 $ 48,000 $ 47,649 $ (351)
Use of money and property 1,300 1,300 203 (1,097)
Total Revenues 49,300 49,300 47,852 (1,448)
EXPENDITURES
Current:
Public works 43,850 43,850 43,748 102
Excess(Deficiency)of Revenues
Over Expenditures 5,450 5,450 4,104 (1,346)
Fund Balance,Beginning of Year 27,948 27,948 27,948
Fund Balance,End of Year $ 33,398 $ 33,398 $ 32,052 $ (1,346)
66
CITY OF RANCHO PALOS VERDES
SCHEDULE OF REVENUES,EXPENDITURES
AND CHANGES IN FUND BALANCE-BUDGET AND ACTUAL
COMMUNITY DEVELOPMENT BLOCK GRANT SPECIAL REVENUE FUND
FOR THE YEAR ENDED JUNE 30,2002
Variance with
Final Budget-
Budgeted Amounts Actual Positive
Original Final Amounts (Negative)
REVENUES
Revenue from other agencies $ 966,481 $ 966,481 $ 277,360 $ (689,121)
EXPENDITURES
Current:
Public works 153,000 258,060 238,591 19,469
Capital outlay 774,276
Total Expenditures 927,276 258,060 238,591 19,469
Excess(Deficiency)of Revenues
Over Expenditures 39,205 708,421 38,769 (669,652)
OTHER FINANCING SOURCES(USES)
Transfers out (39,205) (39,205) (39,205)
EXCESS(DEFICIENCY)OF REVENUES AND
OTHER FINANCING SOURCES OVER(UNDER)
EXPENDITURES AND OTHER FINANCING USES 669,216 (436) (669,652)
Fund Balance,Beginning of Year
Fund Balance,End of Year $ - $ 669,216 __L___L4361 $ (669,652)
67
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 30,2002
Variance with
Final Budget-
Budgeted Amounts Actual Positive
Original Final Amounts (Negative)
REVENUES
Taxes $ 1,000 $ 1,000 $ 1,161 $ 161
Use of money and property 370 370 292 (78)
Total Revenues 1,370 1,370 1,453 83
EXPENDITURES
Current:
Public works 900 900 158 742
Excess(Deficiency)of Revenues
Over Expenditures 470 470 1,295 825
Fund Balance,Beginning of Year 8,281 8,281 8,281
Fund Balance,End of Year $ 8,751 $ 8,751 $ 9,576 $ 825
68
CITY OF RANCHO PALOS VERDES
SCHEDULE OF REVENUES,EXPENDITURES
AND CHANGES IN FUND BALANCE-BUDGET AND ACTUAL
RDA HOUSING SET-ASIDE SPECIAL REVENUE FUND
FOR THE YEAR ENDED JUNE 30, 2002
Variance with
Final Budget-
Budgeted Amounts Actual Positive
Original Final Amounts (Negative)
REVENUES
Taxes $ 113,000 $ 113,000 $ 125,127 $ 12,127
Use of money and property 28,000 28,000 19,422 (8,578)
Total Revenues 141,000 141,000 144,549 3,549
EXPENDITURES
Current:
Public works 50,000 50,000 1,379 48,621
Excess(Deficiency)of Revenues
Over Expenditures 91,000 91,000 143,170 52,170
Fund Balance,Beginning of Year 1,189,605 1,189,605 1,189,605
Fund Balance,End of Year $ 1,280,605 $1,280,605 $ 1,332,775 $ 52,170
69
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 30,2002
Variance with
Final Budget-
Budgeted Amounts Actual Positive
Original Final Amounts (Negative)
REVENUES
Taxes $ 566,500 $ 566,500 $ 535,494 $ (31,006)
Use of money and property 14,000 14,000 8,340 (5,660)
Total Revenues 580,500 580,500 543,834 (36,666)
EXPENDITURES
Current:
Public works 486,443 486,443 443,440 43,003
Capital outlay 12,000 24,000 13,480 10,520
Total Expenditures 498,443 510,443 456,920 53,523
Excess(Deficiency)of Revenues
Over Expenditures 82,057 70,057 86,914 16,857
OTHER FINANCING SOURCES(USES)
Transfers out (90,000) (90,000)
EXCESS(DEFICIENCY)OF REVENUES AND
OTHER FINANCING SOURCES OVER(UNDER)
EXPENDITURES AND OTHER FINANCING USES 82,057 (19,943) (3,086) 16,857
Fund Balance,Beginning of Year 279,624 279,624 279,624
Fund Balance,End of Year $ 361,681 $ 259,681 $ 276,538 $ 16,857
70
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 30,2002
Variance with
Final Budget-
Budgeted Amounts Actual Positive
Original Final Amounts (Negative)
REVENUES
Taxes $ 472,500 $ 472,500 $ 444,153 $ (28,347)
Use of money and property 12,000 12,000 33,347 21,347
Total Revenues 484,500 484,500 477,500 (7,000)
EXPENDITURES
Current:
Public works 3,170 3,170 1,413 1,757
Excess(Deficiency)of Revenues
Over Expenditures 481,330 481,330 476,087 (5,243)
OTHER FINANCING SOURCES(USES)
Transfers out (872,000) (1,274,665) (938,475) 336,190
EXCESS(DEFICIENCY)OF REVENUES AND
OTHER FINANCING SOURCES OVER(UNDER)
EXPENDITURES AND OTHER FINANCING USES (390,670) (793,335) (462,388) 330,947
Fund Balance,Beginning of Year 757,885 757,885 757,885
Fund Balance,End of Year $ 367,215 $ (35,450) $ 295,497 $ 330,947
71
CITY OF RANCHO PALOS VERDES
SCHEDULE OF REVENUES,EXPENDITURES
AND CHANGES IN FUND BALANCE-BUDGET AND ACTUAL
RECYCLING SPECIAL REVENUE FUND
FOR THE YEAR ENDED JUNE 30,2002
Variance with
Final Budget-
Budgeted Amounts Actual Positive
Original Final Amounts (Negative)
REVENUES
Use of money and property $ 22,700 $ 22,700 $ 22,027 $ (673)
Revenue from other agencies 43,900 43,900 11,915 (31,985)
Other revenues 80,000 80,000 224,061 144,061
Total Revenues 146,600 146,600 258,003 111,403
EXPENDITURES
Current:
Public works 102,980 129,858 129,858
Excess(Deficiency)of Revenues
Over Expenditures 43,620 16,742 128,145 111,403
OTHER FINANCING SOURCES(USES)
Transfers out (112,000) (112,000) (112,000)
EXCESS(DEFICIENCY)OF REVENUES AND
OTHER FINANCING SOURCES OVER(UNDER)
EXPENDITURES AND OTHER FINANCING USES (68,380) (95,258) 16,145 111,403
Fund Balance,Beginning of Year 650,498 650,498 650,498
Fund Balance,End of Year $ 582,118 $ 555,240 $ 666,643 $ 111,403
72
CITY OF RANCHO PALOS VERDES
SCHEDULE OF REVENUES,EXPENDITURES
AND CHANGES IN FUND BALANCE-BUDGET AND ACTUAL
SOLID WASTE SPECIAL REVENUE FUND
FOR THE YEAR ENDED JUNE 30, 2002
Variance with
Final Budget-
Budgeted Amounts Actual Positive
Original Final Amounts (Negative)
REVENUES
Use of money and property $ 36,000 $ 36,000 $ 24,872 $ (11,128)
Charges for services 72,600 72,600 85,232 12,632
Revenue from other agencies 14,210 14,210 14,326 116
Total Revenues 122,810 122,810 124,430 1,620
EXPENDITURES
Current:
Public works 103,490 117,890 108,594 9,296
Excess(Deficiency)of Revenues
Over Expenditures 19,320 4,920 15,836 10,916
OTHER FINANCING SOURCES(USES)
Transfers out (16,443) (16,443) -
EXCESS(DEFICIENCY)OF REVENUES AND
OTHER FINANCING SOURCES OVER(UNDER)
EXPENDITURES AND OTHER FINANCING USES 19,320 (11,523) (607) 10,916
Fund Balance,Beginning of Year 758,210 758,210 758,210
Fund Balance,End of Year $ 777,530 $ 746,687 $ 757,603 $ 10,916
73
CITY OF RANCHO PALOS VERDES
SCHEDULE OF REVENUES,EXPENDITURES
AND CHANGES IN FUND BALANCE -BUDGET AND ACTUAL
LLESS/COPS/CLEEP SPECIAL REVENUE FUND
FOR THE YEAR ENDED JUNE 30, 2002
Variance with
Final Budget-
Budgeted Amounts Actual Positive
Original Final Amounts (Negative)
REVENUES
Use of money and property $ 9,100 $ 9,100 $ 8,176 $ (924)
Revenue from other agencies 119,500 119,500 165,726 46,226
Total Revenues 128,600 128,600 173,902 45,302
EXPENDITURES
Current:
Public safety 229,013 248,269 247,943 326
Excess(Deficiency)of Revenues
Over Expenditures (100,413) (119,669) (74,041) 45,628
Fund Balance,Beginning of Year 234,340 234,340 234,340
Fund Balance,End of Year $ 133,927 $ 114,671 $ 160,299 $ 45,628
74
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 30,2002
Variance with
Final Budget-
Budgeted Amounts Actual Positive
Original Final Amounts (Negative)
REVENUES
Taxes $ 315,500 $ 315,500 $ 324,015 $ 8,515
Use of money and property 15,000 15,000 13,686 (1,314)
Total Revenues 330,500 330,500 337,701 7,201
EXPENDITURES
Current:
Public works 59,100 59,100 52,819 6,281
Excess(Deficiency)of Revenues
Over Expenditures 271,400 271,400 284,882 13,482
OTHER FINANCING SOURCES(USES)
Transfers out (361,000) (361,000) (361,000)
EXCESS(DEFICIENCY)OF REVENUES AND
OTHER FINANCING SOURCES OVER(UNDER)
EXPENDITURES AND OTHER FINANCING USES (89,600) (89,600) (76,118) 13,482
Fund Balance,Beginning of Year 310,754 310,754 310,754
Fund Balance,End of Year $ 221,154 $ 221,154 $ 234,636 $ 13,482
75
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 30,2002
Variance with
Final Budget-
Budgeted Amounts Actual Positive
Original Final Amounts (Negative)
REVENUES
Taxes $ 292,500 $ 292,500 $ 322,509 $ 30,009
Use of money and property 45,000 45,000 31,592 (13,408)
Total Revenues 337,500 337,500 354,101 16,601
EXPENDITURES
Current:
Public works 340,000 340,000 291,603 48,397
Excess(Deficiency)of Revenues
Over Expenditures (2,500) (2,500) 62,498 64,998
Fund Balance,Beginning of Year 928,393 928,393 928,393
Fund Balance,End of Year $ 925,893 $ 925,893 $ 990,891 $ 64,998
76
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, 2002
Variance with
Final Budget-
Budgeted Amounts Actual Positive
Original Final Amounts (Negative)
REVENUES
Use of money and property $ 6,000 $ 6,000 $ 5,586 $ (414)
EXPENDITURES
Current:
Maintenance 99,100 99,100 48,724 50,376
Excess(Deficiency)of Revenues
Over Expenditures (93,100) (93,100) (43,138) 49,962
OTHER FINANCING SOURCES(USES)
Transfers in 95,000 95,000 95,000
EXCESS(DEFICIENCY)OF REVENUES AND
OTHER FINANCING SOURCES OVER(UNDER)
EXPENDITURES AND OTHER FINANCING USES 1,900 1,900 51,862 49,962
Fund Balance,Beginning of Year 126,101 126,101 126,101
Fund Balance,End of Year $ 128,001 $ 128,001 $ 177,963 $ 49,962
77
CITY OF RANCHO PALOS VERDES
SCHEDULE OF REVENUES,EXPENDITURES
AND CHANGES IN FUND BALANCE-BUDGET AND ACTUAL
HABITAT RESTORATION SPECIAL REVENUE FUND
FOR THE YEAR ENDED JUNE 30,2002
Variance with
Final Budget-
Budgeted Amounts Actual Positive
Original Final Amounts (Negative)
REVENUES
Use of money and property $ 10,800 $ 10,800 $ 7,851 $ (2,949)
Other revenues 41,260 41,260 (41,260)
Total Revenues 52,060 52,060 7,851 (44,209)
EXPENDITURES
Capital outlay 120,000
Excess(Deficiency)of Revenues
Over Expenditures (67,940) 52,060 7,851 (44,209)
Fund Balance,Beginning of Year 231,290 231,290 231,290
Fund Balance,End of Year $ 163,350 $ 283,350 $ 239,141 $ (44,209)
78
CITY OF RANCHO PALOS VERDES
SCHEDULE OF REVENUES,EXPENDITURES
AND CHANGES IN FUND BALANCE-BUDGET AND ACTUAL
SUBREGION ONE MAINTENANCE SPECIAL REVENUE FUND
FOR THE YEAR ENDED JUNE 30,2002
Variance with
Final Budget-
Budgeted Amounts Actual Positive
Original Final Amounts (Negative)
REVENUES
Use of money and property $ 39,200 $ 39,200 $ 27,371 $ (11,829)
EXPENDITURES
Current:
Public works 39,500 39,500 3,750 35,750
Excess(Deficiency)of Revenues
Over Expenditures (300) (300) 23,621 23,921
Fund Balance,Beginning of Year 806,422 806,422 806,422
Fund Balance,End of Year $ 806,122 $ 806,122 $ 830,043 $ 23,921
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 FUND
FOR THE YEAR ENDED JUNE 30,2002
Variance with
Final Budget-
Budgeted Amounts Actual Positive
Original Final Amounts (Negative)
REVENUES
Taxes $ 20,000 $ 20,000 $ 20,467 $ 467
Use of money and property 250 250 700 450
Total Revenues 20,250 20,250 21,167 917
EXPENDITURES
Current:
Public works 50,000 9,394 9,394
Excess(Deficiency)of Revenues
Over Expenditures (29,750) 10,856 11,773 917
OTHER FINANCING SOURCES(USES)
Transfers in 35,000 35,000 35,000
EXCESS(DEFICIENCY)OF REVENUES AND
OTHER FINANCING SOURCES OVER(UNDER)
EXPENDITURES AND OTHER FINANCING USES 5,250 45,856 46,773 917
Fund Balance,Beginning of Year
Fund Balance,End of Year $ 5,250 $ 45,856 $ 46,773 $ 917
80
CITY OF RANCHO PALOS VERDES
SCHEDULE OF REVENUES,EXPENDITURES
AND CHANGES IN FUND BALANCE-BUDGET AND ACTUAL
BIKEWAYS CAPITAL PROJECTS FUND
FOR THE YEAR ENDED JUNE 30,2002
Variance with
Final Budget-
Budgeted Amounts Actual Positive
Original Final Amounts (Negative)
REVENUES
Use of money and property $ 1,594 $ 1,594
Revenue from other agencies $ 16,000 $ 16,000 37,272 21,272
Total Revenues 16,000 16,000 38,866 22,866
Excess(Deficiency)of Revenues
Over Expenditures 16,000 16,000 38,866 22,866
OTHER FINANCING SOURCES(USES)
Transfers out (16,000) (51,000) (38,874) 12,126
EXCESS(DEFICIENCY)OF REVENUES AND
OTHER FINANCING SOURCES OVER(UNDER)
EXPENDITURES AND OTHER FINANCING USES (35,000) (8) 34,992
Fund Balance,Beginning of Year 8 8 8
Fund Balance,End of Year $ 8 $(34,992) $ - $ 34,992
81
CITY OF RANCHO PALOS VERDES
SCHEDULE OF REVENUES,EXPENDITURES
AND CHANGES IN FUND BALANCE-BUDGET AND ACTUAL
RDA ABALONE COVE CAPITAL PROJECTS FUND
FOR THE YEAR ENDED JUNE 30,2002
Variance with
Final Budget-
Budgeted Amounts Actual Positive
Original Final Amounts (Negative)
REVENUES
Use of money and property $ 10,000 $ 10,000 $ 33,844 $ 23,844
EXPENDITURES
Current:
Public works 232,250 166,672 242,659 (75,987)
Capital outlay 1,918,075 1,834,025 84,050
Total Expenditures 232,250 2,084,747 2,076,684 8,063
Excess(Deficiency)of Revenues
Over Expenditures (222,250) (2,074,747) (2,042,840) 31,907
Fund Balance,Beginning of Year 2,108,418 2,108,418 2,108,418
Fund Balance,End of Year $1,886,168 $ 33,671 $ 65,578 $ 31,907
82
CITY OF RANCHO PALOS VERDES
SCHEDULE OF REVENUES,EXPENDITURES
AND CHANGES IN FUND BALANCE-BUDGET AND ACTUAL
ENVIRONMENTAL EXCISE TAX CAPITAL PROJECTS FUND
FOR THE YEAR ENDED JUNE 30,2002
Variance with
Final Budget-
Budgeted Amounts Actual Positive
Original Final Amounts (Negative)
REVENUES
Use of money and property $ 22,300 $ 22,300 $ 21,400 $ (900)
Other revenues 133,000 133,000 28,400 (104,600)
Total Revenues 155,300 155,300 49,800 (105,500)
OTHER FINANCING SOURCES(USES)
Transfers out (1,026,200) (1,026,200) (4,976) 1,021,224
EXCESS(DEFICIENCY)OF REVENUES AND
OTHER FINANCING SOURCES OVER(UNDER)
EXPENDITURES AND OTHER FINANCING USES (870,900) (870,900) 44,824 915,724
Fund Balance,Beginning of Year 618,256 618,256 618,256
Fund Balance,End of Year $ (252,644) $ (252,644) $ 663,080 $ 915,724
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 30,2002
Variance with
Final Budget-
Budgeted Amounts Actual Positive
Original Final Amounts (Negative)
REVENUES
Use of money and property $ 12,900 $ 12,900 $ 15,225 $ 2,325
Other revenues 25,000 25,000 23,230 (1,770)
Total Revenues 37,900 37,900 38,455 555
EXPENDITURES
Current:
Public works 6,000 1,000 1,118 (118)
Capital outlay 50,000 118 118
Total Expenditures 56,000 1,118 1,118
Excess(Deficiency)of Revenues
Over Expenditures (18,100) 36,782 37,337 555
OTHER FINANCING SOURCES(USES)
Transfers in 16,443 16,443
Transfers out (282,900) (292,365) (9,465) 282,900
Total Other Financing Sources(Uses) (282,900) (275,922) 6,978 282,900
EXCESS(DEFICIENCY)OF REVENUES AND
OTHER FINANCING SOURCES OVER(UNDER)
EXPENDITURES AND OTHER FINANCING USES (301,000) (239,140) 44,315 283,455
Fund Balance,Beginning of Year 439,478 439,478 439,478
Fund Balance,End of Year $ 138,478 $ 200,338 $ 483,793 $ 283,455
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, 2002
Variance with
Final Budget-
Budgeted Amounts Actual Positive
Original Final Amounts (Negative)
REVENUES
Use of money and property $ 48,700 $ 48,700 $ 32,207 $ (16,493)
Other revenues 50,000 50,000 (50,000)
Total Revenues 98,700 98,700 32,207 (66,493)
Excess(Deficiency)of Revenues
Over Expenditures 98,700 98,700 32,207 (66,493)
Fund Balance,Beginning of Year 948,838 948,838 948,838
Fund Balance,End of Year $ 1,047,538 $ 1,047,538 $ 981,045 $ (66,493)
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 30,2002
Variance with
Final Budget-
Budgeted Amounts Actual Positive
Original Final Amounts (Negative)
REVENUES
Use of money and property $ 20,000 $ 20,000 $ 17,355 $ (2,645)
Other revenues 10,300 10,300 49,177 38,877
Total Revenues 30,300 30,300 66,532 36,232
EXPENDITURES
Current:
Public works 115,010 115,010 151,710 (36,700)
Capital outlay 25,000 25,000 25,000
Total Expenditures 140,010 140,010 151,710 (11,700)
Excess(Deficiency)of Revenues
Over Expenditures (109,710) (109,710) (85,178) 24,532
Fund Balance,Beginning of Year 1,152,698 1,152,698 1,152,698
Prior Period Adjustment (637,695)
Fund Balance,End of Year $ 1,042,988 $ 1,042,988 $ 429,825 $ 24,532
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, 2002
Variance with
Final Budget-
Budgeted Amounts Actual Positive
Original Final Amounts (Negative)
REVENUES
Use of money and property $ 5,600 $ 5,600 $ 3,409 $ (2,191)
EXPENDITURES
Current:
Public works 20,000 20,000 20,000
Excess(Deficiency)of Revenues
Over Expenditures (14,400) (14,400) 3,409 17,809
OTHER FINANCING SOURCES(USES)
Transfers in 225,000 225,000 225,000
EXCESS(DEFICIENCY)OF REVENUES AND
OTHER FINANCING SOURCES OVER(UNDER)
EXPENDITURES AND OTHER FINANCING USES 210,600 210,600 228,409 17,809
Fund Balance,Beginning of Year
Fund Balance,End of Year $ 210,600 $ 210,600 $ 228,409 $ 17,809
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, 2002
Variance with
Final Budget-
Budgeted Amounts Actual Positive
Original Final Amounts (Negative)
REVENUES
Use of money and property $ 6,000 $ 6,000 $ 2,994 $ (3,006)
EXPENDITURES
Current:
Public works 15,000 15,000 3,790 11,210
Capital outlay 85,000 85,000 85,000
Total Expenditures 100,000 100,000 3,790 96,210
Excess(Deficiency)of Revenues
Over Expenditures (94,000) (94,000) (796) 93,204
OTHER FINANCING SOURCES(USES)
Transfers in 300,000 300,000 300,000
Total Other Financing Sources(Uses) 300,000 300,000 300,000
EXCESS(DEFICIENCY)OF REVENUES AND
OTHER FINANCING SOURCES OVER(UNDER)
EXPENDITURES AND OTHER FINANCING USES 206,000 206,000 299,204 93,204
Fund Balance,Beginning of Year
Fund Balance,End of Year $ 206,000 $ 206,000 $ 299,204 $ 93,204
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 30,2002
Variance with
Final Budget-
Budgeted Amounts Actual Positive
Original Final Amounts (Negative)
REVENUES
Use of money and property $ 68,000 $ 68,000 $ 53,563 $ (14,437)
EXPENDITURES
Current:
Public works 103,700 97,700 80,667 17,033
Excess(Deficiency)of Revenues
Over Expenditures (35,700) (29,700) (27,104) 2,596
Fund Balance,Beginning of Year 1,470,052 1,470,052 1,470,052
Fund Balance,End of Year $ 1,434,352 $ 1,440,352 $ 1,442,948 $ 2,596
89
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CITY OF RANCHO PALOS VERDES
JUNE 30,2002
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 the purchase and maintenance of certain equipment 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, 2002
Equipment Building Employee
Replacement Replacement Benefits Total
ASSETS
Current Assets
Cash and investments $ 2,204,921 $ 1,531,099 $ 47,271 $ 3,783,291
Receivables
Interest 14,450 10,095 661 25,206
Other 1,465 1,465
Prepaid items 194 48,844 49,038
Total Current Assets 2,219,565 1,541,194 98,241 3,859,000
Noncurrent Assets
Capital assets
Property and equipment 692,011 692,011
Accumulated depreciation (517,288) (517,288)
Total Assets 2,394,288 1,541,194 98,241 4,033,723
LIABILITIES
Current Liabilities
Accounts payable and accrued liabilities 43,107 6,355 49,462
Total Liabilities 43,107 6,355 49,462
NET ASSETS
Invested in capital assets 174,723 174,723
Unrestricted 2,176,458 1,541,194 91,886 3,809,538
Total Net Assets $ 2,351,181 $ 1,541,194 $ 91,886 $ 3,984,261
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 30,2002
Equipment Building Employee
Replacement Replacement Benefits Total
OPERATING REVENUES
Charges for services $ 414,179 $ 527,560 $ 941,739
Total Operating Revenues 414,179 527,560 941,739
OPERATING EXPENSES
Personnel services 479,994 479,994
Material and supplies 244,692 244,692
Maintenance 40,220 40,220
Depreciation 58,877 58,877
Total Operating Expenses 343,789 479,994 823,783
Operating Income(Loss) 70,390 47,566 117,956
NONOPERATING REVENUES
Interest income 71,116 $ 49,737 2,109 122,962
Gain(Loss)on Asset Disposal (187,886) (187,886)
Total Operating Expenses (116,770) 49,737 2,109 (64,924)
Income(Loss)Before
Transfers (46,380) 49,737 49,675 53,032
TRANSFERS IN 82,600 500,000 582,600
Change in Net Assets 36,220 549,737 49,675 635,632
Net Assets,Beginning of Year 2,314,961 991,457 42,211 3,348,629
Net Assets,Ending of Year $ 2,351,181 $ 1,541,194 $ 91,886 $ 3,984,261
92
CITY OF RANCHO PALOS VERDES
INTERNAL SERVICE FUNDS
COMBINING STATEMENT OF CASH FLOWS
FOR THE FISCAL YEAR ENDED JUNE 30, 2002
Equipment Building Employee
Replacement Replacement Benefits Totals
CASH FLOWS FROM OPERATING ACTIVITIES
Receipts from customers $ 439,179 $ 526,207 $ 965,386
Payments to suppliers (293,248) $ (839) (467,067) (761,154)
Internal activity-payments from other funds (13,972) (13,972)
NET CASH PROVIDED(USED)BY
OPERATING ACTIVITIES 145,931 (839) 45,168 190,260
CASH FLOWS FROM CAPITAL AND
RELATED FINANCING ACTIVITIES
Acquisition of capital assets (91,251) (91,251)
CASH FLOWS FROM NONCAPITAL
FINANCING ACTIVITIES
Operating transfer in 82,600 500,000 582,600
CASH FLOWS FROM INVESTING ACTIVITIES
Interest received on investments 81,007 52,270 2,103 135,380
NET INCREASE(DECREASE)IN
CASH AND CASH EQUIVALENTS 218,287 551,431 47,271 816,989
CASH AND CASH EQUIVALENTS,Beginning of Year 1,986,634 979,668 2,966,302
CASH AND CASH EQUIVALENTS,End of Year $ 2,204,921 $ 1,531,099 $ 47,271 $ 3,783,291
RECONCILIATION OF OPERATING INCOME(LOSS)
TO NET CASH PROVIDED(USED)BY OPERATING
ACTIVITIES
Operating income(loss) $ 70,390 $ 47,566 $ 117,956
Adjustments to reconcile operating income(loss)to
net cash provided(used)by operating activities:
Depreciation 58,877 58,877
(Increase)decrease in other receivables 25,000 (1,353) 23,647
(Increase)decrease in prepaid items (194) 8,372 8,178
Increase(decrease)in due to other funds (13,972) (13,972)
Increase(decrease)in accounts payable
and accrued liabilities (8,142) $ (839) 4,555 (4,426)
NET CASH PROVIDED(USED)BY
OPERATING ACTIVITIES $ 145,931 $ (839) $ 45,168 $ 190,260
93
STATISTICAL SECTION
CITY OF RANCHO PALOS VERDES
GENERAL GOVERNMENTAL EXPENDITURES BY FUNCTION*
LAST TEN FISCAL YEARS
Planning,
Code
Fiscal General Public Public Parks and Enforcement Capital Debt
Year Government Safety Works Recreation &Building Outlay Service Totals
1993 $ 1,209,713 $ 2,340,141 $ 2,495,831 $ 838,901 $ 904,487 $ 117,770 --- $7,906,843
1994 1,388,019 2,437,018 2,891,418 475,036 937,581 1,563,682 --- $9,692,754
1995 1,497,317 2,539,329 3,166,876 489,834 1,031,028 1,623,833 --- $10,348,217
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 --- $21,753,824
* Includes all governmental fund types, excluding activity of the Redevelopment Agency and Improvement
Authority.
Source: City Finance Department.
94
CITY OF RANCHO PALOS VERDES
GENERAL GOVERNMENTAL REVENUES BY SOURCE*
LAST TEN FISCAL YEARS
Fees Use of Charges Revenues
Fiscal and Fines and Money and for From Other Other
Year Taxes Permits Forfeitures Property Services Agencies Revenues Totals
1993 $ 5,129,043 $ 712,910 $ 108,343 $ 629,346 $ 668,190 $ 2,286,067 $ 755,684 $10,289,583
1994 6,201,116 676,872 98,067 675,856 317,668 3,299,943 151,528 $11,421,050
1995 7,310,905 825,680 89,494 819,185 285,235 2,754,149 326,863 $12,411,511
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
* Includes all governmental fund types, excluding activity of Redevelopment Agency and Improvement
Authority.
Source: City Finance Department.
95
CITY OF RANCHO PALOS VERDES
PROPERTY TAX LEVIES AND COLLECTIONS
LAST TEN FISCAL YEARS
Fiscal Current Current Percent
Year Levy Collection Collected
1992-1993 $ 1,433,448 $ 1,391,542 97.08%
1993-1994 1,730,785 1,658,420 95.82%
1994-1995 2,218,369 2,147,249 96.79%
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%
Source: City Public Works and Finance Departments.
96
CITY OF RANCHO PALOS VERDES
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
1993 $ 4,110,990,215 $ 70,000 $ 13,538,218 $4,124,598,433 $ 74,929,129 $ 4,049,669,304 8.38%
1994 4,142,760,058 210,000 12,641,931 4,155,611,989 77,423,929 4,078,188,060 0.70%
1995 4,277,717,064 210,000 12,448,590 4,290,375,654 79,193,508 4,211,182,146 3.26%
1996 4,316,092,536 210,000 15,334,559 4,331,637,095 79,614,908 4,252,022,187 0.97%
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%
Source: HdL Companies.
97
CITY OF RANCHO PALOS VERDES
PROPERTY TAX RATES-ALL OVERLAPPING GOVERNMENTS
(PER$100 OF ASSESSED VALUATION)
LAST TEN FISCAL YEARS
Basic Metropolitan
Fiscal County School Flood Water Library
Year Levy District Control District District County Totals
1993 1.0000% 0.0004% 0.0034% 0.0089% 0.0287% 0.0014% 1.0428%
1994 1.0000% 0.0004% 0.0042% 0.0089% 0.0140% 0.0017% 1.0292%
1995 1.0000% --- 0.0060% 0.0089% 0.0042% 0.0020% 1.0211%
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%
Note: The state constitutional amendment Proposition 13 provided that the tax rate be limited to 1% of market
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
PRINCIPAL TAXPAYERS
JUNE 30, 2002
2002 Percentage of
Type of Assessed Total Assessed
Taxpayer Business Valuation Valuation
Ocean Trails Limited Partnership Golf Course/Residential $ 61,098,324 1.07%
P.V. Victoria Apartments Apartment 40,015,225 0.70%
Connecticut General Life Commercial/Residential 27,538,295 0.48%
RPV Associates Residential Development 24,561,517 0.43%
Western Riviera Investors Apartment 24,367,914 0.43%
York Long Point Associates Commercial/Residential 21,578,933 0.38%
Top Teachers,Inc. Commercial Shopping Center 16,595,400 0.29%
Salvation Army Institutional/Commercial 13,670,449 0.24%
American Golf, Inc. Golf Course 13,630,592 0.24%
Theodore Gardner II Apartment 13,263,489 0.23%
TOTAL TOP TEN $ 256,320,138 4.49%
Source: HdL Companies.
99
CITY OF RANCHO PALOS VERDES
SPECIAL ASSESSMENT BILLINGS AND COLLECTIONS
LAST TEN FISCAL YEARS
Special Special Percent of
Fiscal Assessment Assessments Levy
Year Billings Collected Collected
1993 $ 840,616 $ 807,798 96.1%
1994 816,170 816,339 100.0%
1995 811,651 796,924 98.2%
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%
Source: City Public Works and Finance Departments.
100
CITY OF RANCHO PALOS VERDES
COMPUTATION OF LEGAL DEBT MARGIN
AS OF JUNE 30,2002
Net Assessed Value $ 5,701,937,507
Debt limit- 15%of assessed value $ 855,290,626
Amount of debt applicable to debt limit ---
Legal debt margin $ 855,290,626
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
STATEMENT OF DIRECT AND OVERLAPPING DEBT
AS OF JUNE 30,2002
Percent Bonded Debt
Applicable June 30,2002
DIRECT AND OVERLAPPING BONDED DEBT:
Los Angeles County Detention Facilities 1.013% $ 369,931
Los Angeles County Flood Control Storm Drain Bonds 1.029% 141,143
Flood Control Refunding Bonds 1993 1.029% 174,628
Palos Verdes Library District Refund Series 1998 49.463% 6,516,741
West Basin Metropolitan Water District * 1.087% 5,466,481
Los Angeles City Community College 2001 Series A 1.800% 9,448,149
Los Angeles Unified School District 1997 Series A 0.218% 709,448
Los Angeles Unified School District 1997 Series B 0.218% 510,975
Los Angeles Unified School District 1997 Series C 0.218% 468,856
Los Angeles Unified School District 1997 Series D 0.218% 599,952
Los Angeles Unified School District 1997 Series E 0.218% 1,092,013
Palos Verdes Peninsula USD Series 2000 A 46.854% 9,422,264
TOTAL DIRECT AND OVERLAPPING BONDED DEBT $ 34,920,581 (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 0.62%
Total Debt 0.62%
* 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
DEMOGRAPHIC STATISTICS
LAST TEN FISCAL YEARS
Fiscal Housing
Year Population Units
1993 42,050 15,586
1994 42,000 15,581
1995 42,089 15,588
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
Source: CA Department of Finance and the City Planning, Building and Code Enforcement Department.
103
CITY OF RANCHO PALOS VERDES
DEMOGRAPHIC STATISTICS
2000 CENSUS DATA
Population distribution by ethnic group: Individuals Percent
White 27,660 67.22%
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
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
1993 1,217 $ 16,380,075 4 $ 2,214,000 $ 134,150,000
1994 1,158 16,174,450 11 4,589,000 103,983,000
1995 1,269 24,004,600 25 10,805,000 113,023,000
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
** Data regarding bank deposits within the City of Rancho Palos Verdes for the fiscal year ended June 30, 2002
is not currently available.
Source: City Planning, Building and Code Enforcement Department and State Banking Department.
105
CITY OF RANCHO PALOS VERDES
MISCELLANEOUS STATISTICS
AS OF JUNE 30,2002
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) 42
Source: City Finance Department.
106