CAFR FY 2005-06CI I Y OF RANCHO PALOS VERDES
CALIF OR NIA
COMPREHENSIVE
ANNUAL FINANCIAL REPORT
H5LALYAR LI`IULU
JUNE 30, 2006
CITY OF RANCHO PALOS VERDES,
CALIFORNIA
COMPREHENSIVE
ANNUAL FINANCIAL REPORT
For the Year Ended June 30, 2006
Prepared By:
Finance Department
Dennis McLean, Director of Finance & Information Technology
Kathryn Downs, Deputy Director of Finance & Information Technology
Cover photo of Portuguese Bend courtesy of Ms. Karen Peterson
INTRODUCTORY SECTION
California Poppies at Lower Hesse Park
Photos by Karen Peterson
CITY OF RANCHO PALOS VERDES
COMPREHENSIVE ANNUAL FINANCIAL REPORT
FOR THE YEAR ENDED JUNE 30, 2006
TABLE OF CONTENTS
INTRODUCTORY SECTION:
Table of Contents i -iii
Letter of Transmittal iv -x
Directory of City Officials xi
Organization Chart xii
GFOA Certificate of Achievement for Excellence in Financial Reporting xiii
FINANCIAL SECTION:
Independent Auditor's Report 1
Management Discussion and Analysis 3
Government -Wide Financial Statements
Statement of Net Assets 11
Statement of Activities 12
Fund Financial Statements
Governmental Funds
Balance Sheet 14
Reconciliation of the Balance Sheet of Governmental Funds
to the Statement of Net Assets 16
Statement of Revenues, Expenditures, and Changes in Fund Balances 17
Reconciliation of the Statement of Revenues, Expenditures, and Changes
in Fund Balances to the Statement of Activities 19
General Fund
Statement of Revenues, Expenditures, and Changes in Fund Balance
- Budget and Actual 20
Street Maintenance Special Revenue Fund
Statement of Revenues, Expenditures, and Change in Fund Balance
- Budget and Actual 21
Proprietary Funds
Statement of Net Assets 22
Statement of Revenues, Expenses, and Changes in Fund Net Assets 23
Statement of Cash Flows 24
Notes to the Financial Statements 25
i
CITY OF RANCHO PALOS VERDES
COMPREHENSIVE ANNUAL FINANCIAL REPORT
FOR THE YEAR ENDED JUNE 30, 2006
TABLE OF CONTENTS
Supplementary Information
Major Fund Budgetary Comparison Schedules
Schedule of Revenues, Expenditures, and Changes in Fund Balances
- Budget and Actual
Capital Improvement Projects Capital Projects Fund 44
RDA Debt Service Fund 50
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
Beautification Fund 72
Waste Reduction Fund 73
Public Safety Grants Fund 74
1972 Act Fund 75
1911 Act Fund 76
JPIA — Portuguese Bend Fund 77
Habitat Restoration Fund 78
Subregion One Maintenance Fund 79
Parks/Measure A Fund 80
Abalone Cove Sewer Assessment District 81
RPV TV Channel 33 82
Schedule of Revenues, Expenditures, and Changes in Fund Balances
- Budget and Actual — Capital Projects Funds
Bikeways Fund 83
RDA Abalone Cove Fund 84
Environmental Excise Tax Fund 85
Quimby Fund 86
Affordable Housing Fund 87
RDA Portuguese Bend Fund 88
Utility Undergrounding Fund 89
Roadway Beautification Fund 90
Schedule of Revenues, Expenditures, and Changes in Fund Balance
- Budget and Actual — Permanent Fund
JPIA — Abalone Cove Fund 91
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CITY OF RANCHO PALOS VERDES
COMPREHENSIVE ANNUAL FINANCIAL REPORT
FOR THE YEAR ENDED JUNE 30, 2006
TABLE OF CONTENTS
Internal Service Funds
Combining Statement of Net Assets 93
Combining Statement of Revenues, Expenses, and Changes
in Fund Net Assets 94
Combining Statement of Cash Flows 95
STATISTICAL SECTION (Unaudited)
Financial Trends 97
Revenue Capacity 104
Debt Capacity 108
Demographic and Economic Information 111
Operating Information 113
iii
A view of Agua Armaga canyon
Photo by Karen Peterson
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 42,991. The City is primarily a "bedroom" community with
relatively little commercial activity.
The City has operated under the council-manager form of government since incorporation. Policy-making and
legislative authority are vested in the governing council, which consists of five council members, including the mayor
and mayor pro -tem. The governing council is responsible, among other things, for passing ordinances, adopting the
budget, appointing committees and hiring the city manager and the city attorney. The city manager is responsible for
carrying out the policies and ordinances of the governing council, for overseeing the day-to-day operations of the
government, and for appointing the heads of the government's departments. The council is elected on a non-
partisan, at -large basis. Council members are elected to four-year staggered terms with two or three council
members elected every two years. The council designates the mayor and mayor pro -tem for a one-year term.
Though the General fund reserves of the City increased during the fiscal year ended June 30, 2006, 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, 2007 presents the
expectation of a decrease of General fund reserves. Potential economic downturn and the need to fund additional
infrastructure renewal and maintenance will require continued conservative fiscal policies.
MAJOR INITIATIVES
The City's staff, following specific directives of the City Council and the City Manager, has been involved in a variety
of projects throughout the year. These projects reflect the government's commitment to ensuring that its citizens are
able to live and work in an enviable environment.
Planning. Building. and Code Enforcement
The City authorized the Palos Verdes Peninsula Land Conservancy to begin management of the City's
Natural Communities Conservation Plan (NCCP) Preserve and continued its effort for acquiring open space
for inclusion into the habitat preserve.
The City continued to formally monitor development projects in surrounding jurisdictions (referred to as
"border issues") to assess their potential impacts upon the City and its residents.
The City continued to approve the installation of various commercial antenna facilities for cellular telephones
and personal communication systems on private property throughout the City.
The General Plan Update Steering Committee presented its recommendations to the City Council on all of
the existing goals and policies of the General Plan. The General Plan Update effort was then initiated by the
City Council. Staff is currently negotiating a contract with a consultant to assist Staff with the preparation of
the Update.
The City continued to implement its State approved Housing Element and efforts to work with the Southern
California Association of Governments in preparing the Regional Transportation Plan and the Regional
Housing Needs Assessment.
The City oversaw the completion of the repair and rehabilitation of the Trump National golf course, which
was damaged by a landslide in 1999. The City continued to work with the developer on its plans to
permanently open the 18 -hole golf course to the public and expand the existing Clubhouse.
Public Works
The Point Vicente Interpretive Center expansion project was completed. The grand opening of the center
was on July 15, 2006.
The interim Barkentine & Seacove drainage project was completed, as well as numerous other citywide
storm drain improvement projects.
v
Phase I of storm drain lining was completed, as well as numerous other lining projects throughout the City.
The Pontevedre storm drain lining and pipe replacement project was completed.
Recreation and Parks
Recreation and Parks Staff coordinated the fabrication and installation of the Point Vicente Interpretive
Center exhibits.
Recreation and Parks Staff hosted the grand opening and dedication ceremony for the expanded Point
Vicente Interpretive Center.
Recreation and Parks Staff and the Los Serenos de Point Vicente docents hosted the annual Whale of a Day
event on the Point Vicente Interpretive Center grounds.
The Los Serenos de Pointe Vicente docents continued their successful docent -led hike programs at several
sites throughout the City.
The City arranged for the Peninsula Seniors, a local non-profit organization, to operate temporary offices and
a classroom using modular trailers at Upper Point Vicente Park. The City also continued to offer the
Peninsula Seniors the use of other park facilities for various events.
Recreation and Parks Staff coordinated the City's annual July 4th Independence Day celebration.
The City hosted two Shakespeare By The Sea drama productions at Hesse Park.
Recreation and Parks Staff continued to coordinate several annual community events including the Abalone
Cove Beach Clean -Up Day and Breakfast with Santa.
Once again, the City has qualified for the use of Community Development Block grant funds for the REACH
program for youth and young adults with developmental disabilities.
Administration
The City Council conducted a Tactical Planning Workshop on February 2, 2006 to review and update the
City Council's goals, which were initially created in 2004. The Council refined its previous goals to include:
1) Implementing the Storm Drain Master Plan; 2) Acquiring Upper Filiorum and completing the NCCP; 3)
Reducing speeding and controlling parking in residential neighborhoods; 4) Preparing an Active Recreation
Plan and a Civic Center Master Plan; 5) Improving emergency services and preparedness; and 6) Bringing
the Eastview area into the Palos Verdes Unified School District.
On March 7th, Council adopted an ordinance regulating peddling in the City, thereby addressing safety
problems associated with mobile food vendors congregating in a single area for long periods of time.
In the Spring of 2006, the City's website was revamped and given a fresh new look with drop down menus to
improve navigation of the site, adding the Google search engine throughout the site and a dedicated search
engine for the City's Municipal Code, adding a News Watch Scroll to highlight up-to-the-minute topics of
interest, and creating a Non -Emergency Service Request link.
In May 2005, City Manager Les Evans announced his retirement, effective December 21, 2006, after 10
years of exemplary service to the City.
On May 16th, Council appointed three Rancho Palos Verdes residents to serve Councilwoman Janice Hahn's
Community Advisory board for the Ponte Vista development, a proposed 2,300 -unit condominium project on
a 62 -acre site located on Western Avenue.
On June 6th, the Council received a presentation from Los Angeles County Fire Chief P. Michael Freeman
regarding the current level of fire service in the City. During his presentation, Chief Freeman announced the
addition of paramedic services and a new pumper truck at Fire Station No. 83 located in Miraleste Plaza.
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On June 20th, Council approved a Lease Agreement with the Southern California Regional Occupational
Center (SCROC) to use the City's Multimedia Cable Television Studio for video production classes. The first
class was held at the studio during the 2006 fall semester.
The City approved a new facility and radio antenna on the Civic Center site for the Sheriff's Disaster
Communications Service (DCS) and the Palos Verdes Volunteer Alert Network (PVAN), which provides
critical ham radio communications during natural disasters and other emergencies.
The Council hosted two Community Leaders' Breakfast meetings in FY05-06. The fall 2005 session
concerned lessons to be learned from Hurricane Katrina and the spring 2006 session highlighted the South
Bay Energy Savings Center.
The City continued to publish a quarterly newsletter that was distributed to all residents. In FY05-06 the
newsletter featured articles on preparing for wildfire hazards, the dedication of Founders Park and the City's
Multimedia Studio, the City's new traffic deputy and the grand opening of the Point Vicente Interpretive
Center.
The City Council continued to provide financial assistance to a variety of non-profit organizations that provide
service to the community.
The City Council recognized five local military personnel serving the Country through the Salute to Service
program and expressed their appreciation by presenting their families with a City care package and Blue Star
poster.
In December 2005, the City Council approved the Emergency Preparedness Committee's recommendation
to establish pre -positioned caches of critical emergency and disaster supplies in storage containers
strategically placed around the City. The pre -positioned supplies will strengthen the City's ability to respond
effectively within the first 72 hours following a natural or man-made disaster under extreme conditions.
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
$500,000 is expended on Federal financial assistance programs, the City is required to undergo an annual single
audit in conformity with the provisions of the Single Audit Act of 1984 and U.S. Office of Management and Budget
Circular A-133, Audits of States, Local Governments, and Non -Profit Organizations. For the year ended June 30,
2006, approximately $380,000 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.
vii
General Government Functions. The following schedule presents a summary of all Governmental fund revenues for
the fiscal year ended June 30, 2006 with the amount and percentage of increases or decreases in relation to prior
year revenue:
Increase/ Percent of
(Decrease) Increase/
Amount from FY04-05 (Decrease)
Taxes $ 15,320,688 $ 1,747,622 12.9%
Licenses and permits 1,439,758 114,179 8.6%
Fines and forfeitures 170,640 62,689 58.1%
Use of money and property 7,038,201 5,732,012 438.8%
Charges for services 49,389 (102,518) -67.5%
Revenues from other agencies 15,510,848 7,663,030 97.6%
Other revenues 155,204 (883,018) -85.1%
TOTAL REVENUES
$ 39,684,728 $ 14,333,996 56.5%
With overall revenues increasing by over $14.3 million for the year, the City recognized large fluctuations in several of
the different revenue categories. These increases and decreases are discussed below.
Taxes increased by over $1.7 million when compared to FY04-05. As part of the State shared revenue restructuring,
most of motor vehicle license fees (VLF) are being received as property tax in -lieu of VLF.
Use of money and property increased by about $5.7 million. This category of revenue includes donations. The City
received a $4.9 million donation from the Palos Verdes Peninsula Land Conservancy as part of the Portuguese Bend
Open Space purchase. The remaining $0.8 million increase is primarily due to rising investment interest rates. The
average interest rate earned during FY04-05 was 2.233%, and the average rate earned during FY05-06 was 3.85%.
The increase of Revenues from other agencies was primarily due to grant revenue associated with the Portuguese
Bend Open Space purchase.
From FY04-05 to FY05-06, Other revenues decreased by almost $0.9 million. During FY04-05, the City received
approximately $800,000 for sale of a residential property purchased to facilitate the San Ramon drainage project.
The following schedule presents a summary of all Governmental fund expenditures for the fiscal year ended June 30,
2006, and the amount and percentage of increases and decreases in relation to prior year amounts:
Increase/ Percent of
(Decrease) Increase/
Amount from FY04-05 (Decrease)
Administration $ 4,041,081 $ 189,646 4.9%
Public safety 3,437,933 346,139 11.2%
Public works 5,276,949 (1,025,006) -16.3%
Parks and recreation 1,593,104 628,234 65.1%
Planning, building and code enforcement 2,361,465 59,402 2.6%
Pass through to other agencies 199,829 11,470 6.1%
Capital outlay 20,202,412 15,290,220 311.3%
Debt service 1,349,329 260,454 23.9%
TOTAL EXPENDITURES
$ 38,462,102 $ 15,760,559 69.4%
The overall $15.8 million increase in expenditures is due to increases in several expenditure categories, as discussed
below.
The net decrease in Public works expenditures is primarily due to the number of engineering projects and studies
performed during FY04-05 when compared to FY05-06. The FY04-05 activity in the Capital Improvement Projects
fund included engineering and project management for the Point Vicente Interpretive Center, engineering for the
arterial overlay project, and a number of drainage studies.
VIII
The increase of Parks and recreation expenditures was almost entirely due to the fabrication and installation of
exhibits at Point Vicente Interpretive Center.
Capital outlay expenditures increased with the purchase of the Portuguese Bend Open Space.
Budget to Actual Comparison. Once again, the City experienced a favorable budget variance in the General fund for
the fiscal year ended June 30, 2006. Actual General fund revenues were approximately $1.5 million greater than the
amount budgeted, while expenditures and transfers out were approximately $1.9 million less than the amount
budgeted. The positive variance resulted from receipt of property and utility users taxes in excess of estimates and
the continued careful management of resources during FY05-06.
Governmental Fund Balances. The combined fund balances of all Governmental Funds decreased by approximately
$1.0 million from the prior year. The net decrease is primarily attributable to additional interest that accrued on the
Redevelopment Agency advance from the General fund.
Debt Administration. At June 30, 2006, the City had no general obligation debt and one tax increment bond issued
during FY97-98. The schedule for repayment of this bond is included in the notes to the financial statements.
Cash Management. To obtain increased flexibility in cash management, the City employs a pooled cash system. The
goals of the City's investment policy are safety, liquidity, and yield, in that order. Investments are currently maintained
with the State Treasurer's Local Agency Investment Fund (LAIF); however, the City's investment policy permits
investments legally allowable 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, 2006 was $38,340,407. As mentioned
above, the average return on invested funds was 3.85%. Earnings are allocated to the various funds based on
average cash balances.
Risk Management. The City of Rancho Palos Verdes is a member of the California Joint Powers Insurance Authority
(CJPIA). With 106 members, it is the largest joint powers insurance authority in California. Through the CJPIA, the
City is self-insured against liability and workers' compensation claims. As protection against catastrophic loss,
members fund a pool to finance large settlements. During the fiscal year ended June 30, 2006, Rancho Palos
Verdes continued its proactive liability risk management role through careful monitoring of losses, working closely
with the CJPIA's third -party claims adjuster, and designing and implementing programs to minimize risks and reduce
losses. In addition, the City Manager's staff analyzes workers compensation issues by monitoring work conditions,
and organizing and implementing safety -training programs to reduce employee exposure to hazards.
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, 2005. This was the thirteenth 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.
ix
Acknowledgments. Completion of this report was the accomplishment by combined efforts of many individuals,
especially Kathryn Downs, Deputy Director of Finance and Information Technology, who coordinated preparation of
the report. I wish to acknowledge the assistance of our auditors, Vavrinek, Trine, Day & Company, LLP and the
contributions of other Finance Department staff: Gary Gyves, Jane Lin, Teresa Takaoka, Gayle Vanoverbeck, Selena
Wright, and Nancy Vitez.
I would also like to recognize the City Council for their continued leadership directing the City to achieve a sound
fiscal position over the last several years. We look forward to maintaining this success in the future under the
leadership of the City Council.
Respectfully submitted,
Dennis McLean
Director of Finance & Information Technology
x
The tide pools near Sacred Cove
Photo by Holly Starr
CITY OF RANCHO PALOS VERDES
DIRECTORY OF CITY OFFICIALS
JUNE 30, 2006
CITY COUNCIL
Steve Wolowicz, Mayor
Tom Long, Mayor Pro -Tem
Larry Clark, Councilman
Peter Gardiner, Councilman
Douglas Stern, Councilman
ADMINISTRATION AND DEPARTMENT HEADS
City Manager Les Evans
Assistant City Manager/City Clerk Carolynn Petru
Director of Finance & Information Technology Dennis McLean
Director of Planning, Building and Code Enforcement Joel Rojas
Interim Director of Public Works Ray Holland
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
Planning Commission
Traffic Safety Commission
Finance Advisory Committee
CITY MANAGER
Administration/Budget
Personnel/Community Outreach
Risk Management
CITY CLERK
Records Management
Public Information
Elections
RECREATION & PARKS
Park Facilities
Point Vicente Interpretive Center
Special Events
REACH Program
PUBLIC SAFETY
L.A. County Sheriff
L.A. County Fire
Animal Control
Emergency Preparedness
FINANCE & INFORMATION
TECHNOLOGY
Financial Reporting
Accounts Payable/Receivable
Payroll
Purchasing
Information Technology
PLANNING & BUILDING
Planning/Zoning
Building & Safety/Geology
Code Enforcement
View Restoration
PUBLIC WORKS
Street Maintenance
Refuse/City Engineering
Park/Building Maintenance
Capital Projects
XII
COMMISSIONS & COMMITTEES
Emergency Preparedness Committee
Equestrian Committee
Open Space Planning Parks & Recreation Task Force
CITY ATTORNEY
Richards, Watson & Gershon
Certificate of
Achievement
for Excellence
in Financial.
Reporting
Presented to
City of Rancho Palos Verdes
California
For its Comprehensive Annual
Financial Report
for the Fiscal Year Ended
June 30, 2005
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.
President
4.eA0,7
Executive Director
An indoor Sea Cliff exhibit at Point Vicente Interpretive Center
Photo by Holly Starr
FINANCIAL SECTION
The trail at Lower Hesse Park
Photo by Karen Peterson
Our audit was conducted for the purpose of forming opinions on the financial statements that collectively
comprise the City's basic financial statements. The other supplementary information listed in the table of
contents, including the introductory section, combining schedules and additional budgetary comparison schedules,
and statistical sections are presented for purposes of additional analysis and are not a required part of the basic
financial statements. The combining schedules and additional budgetary comparison schedules have been
subjected to the auditing procedures applied in the audit of the basic financial statements and, in our opinion, are
fairly stated in all material respects in relation to the basic financial statements taken as a whole. The introductory
section and the statistical section have not been subjected to the auditing procedures applied in the audit of the
basic financial statements and, accordingly, we express no opinion on them.
VOVV1AAtel
Rancho Cucamonga, California
October 6, 2006
2
MANAGEMENT'S DISCUSSION & ANALYSIS
CITY OF RANCHO PALOS VERDES
Management's Discussion and Analysis
June 30, 2006
As management of the City of Rancho Palos Verdes, we offer readers of the City of Rancho
Palos Verdes' financial statements this narrative overview and analysis of the financial activities
of the City of Rancho Palos Verdes for the fiscal year ended June 30, 2006. 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.
Financial Highlights
The assets of the City of Rancho Palos Verdes exceed its liabilities, at the close of the
fiscal year ended June 30, 2006, by $142,681,935 (net assets). Of this amount,
$18,962,628 (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 $18,924,733. This increase is primarily
attributable to the acquisition of the Portuguese Bend Open Space.
As of June 30, 2006, the City's governmental funds reported combined ending fund
balances of $22,902,484, a decrease of $1,035,381 in comparison with the prior year.
The decrease in combined ending fund balances is primarily attributable to an additional
funding transfer to the Water Quality Flood Protection enterprise fund. Approximately
$8,928,973 (unreserved fund balance) is available for spending at the government's
discretion. The combined unreserved fund balance includes the RDA Debt Service
negative fund balance of $13,741,108.
As of June 30, 2006, unreserved undesignated fund balance for the General fund was
$13,649,076 or 77% of total General fund expenditures and transfers out.
The City's total debt decreased by $189,465 (2.33%) during the current fiscal year. The
decrease was primarily attributable to partial payment of the RDA deferred interest
payable.
Overview of the Financial Statements
This discussion and analysis is intended to serve as an introduction to the City's basic financial
statements, which are comprised of three components: 1) government -wide financial statements;
2) fund financial statements; and 3) notes to the financial statements. This report also contains
other supplementary information in addition to the basic financial statements themselves.
Government -wide financial statements. The government -wide financial statements are
designed to provide readers with a broad overview of the City's finances, in a manner similar to a
private -sector business.
The statement of net assets presents information on all of the City's assets and liabilities, with the
difference between the two reported as net assets. Over time, increases or decreases in net
assets may serve as a useful indicator of whether the financial position of the City of Rancho
Palos Verdes is improving or deteriorating.
The statement of activities presents information showing how the government's net assets
changed during the most recent fiscal year. All changes in net assets are reported as soon as
the underlying event giving rise to the change occurs, regardless of the timing of related cash
flows. Thus, revenues and expenses are reported in this statement for some items that will only
result in cash flows in future fiscal periods (e.g. uncollected taxes and earned but unused
vacation leave).
3
CITY OF RANCHO PALOS VERDES
Management's Discussion and Analysis
June 30, 2006
Both the government -wide financial statements distinguish functions of the City that are
principally supported by taxes and intergovernmental revenues (governmental activities) from
other functions that are intended to recover all or a significant portion of their costs through user
fees and charges (business -type activities). The governmental activities of the City include
general government, public safety, public works, planning, building and safety, and recreation.
The City's business -type activities include only the newly established Water Quality and Flood
Protection program for renewal and maintenance of the City's storm drain facilities.
The government -wide financial statements include not only the City of Rancho Palos Verdes itself
(known as the primary government), but also a legally separate Redevelopment Agency and a
legally separate Improvement Authority for which the City of Rancho Palos Verdes is financially
accountable. Financial information for these component units has been included as an integral
part of the primary government.
The government -wide financial statements can be found on pages 11-13 of this report.
Fund financial statements. A fund is a grouping of related accounts that is used to maintain
control over resources that have been segregated for specific activities or objectives. The City of
Rancho Palos Verdes, like other state and local governments, uses fund accounting to ensure
and demonstrate compliance with finance -related legal requirements. All of the funds of the City
can be divided into four categories: governmental funds, enterprise funds, proprietary funds, and
fiduciary funds.
Governmental funds. Governmental funds are used to account for essentially the same
functions reported as governmental activities in the government -wide financial statements.
However, unlike the government -wide financial statements, governmental fund financial
statements focus on near-term inflows and outflows of spendable resources, as well as on
balances of spendable resources available at the end of the fiscal year. Such information may be
useful in evaluating a government's near-term financing requirements.
Because the focus of governmental funds is narrower than that of the government -wide financial
statements, it is useful to compare the information presented for governmental funds with similar
information presented for governmental activities in the government -wide financial statements.
By doing so, readers may better understand the long-term impact of the government's near-term
financing decisions. Both the governmental balance sheet and governmental fund statement of
revenues, expenditures, and changes in fund balances provide a reconciliation to facilitate this
comparison between governmental funds and governmental activities.
The City of Rancho Palos Verdes maintains 30 individual governmental funds. Information is
presented separately in the governmental fund balance sheet and in the governmental fund
statement of revenues, expenditures, and changes in fund balances for the General fund, the
Street Maintenance fund, the Capital Improvements fund and the RDA Debt -Service fund, all of
which are considered to be major funds. Data from the other 26 governmental funds are
combined into a single, aggregated presentation. Individual fund data for each of these non -
major governmental funds is provided in the form of combining statements elsewhere in this
report.
The City of Rancho Palos Verdes adopts an annual appropriated budget for each of its
governmental funds. A budgetary comparison statement has been provided for each
governmental fund to demonstrate compliance with this budget.
The basic governmental fund financial statements can be found on pages 14-19 of this report.
4
CITY OF RANCHO PALOS VERDES
Management's Discussion and Analysis
June 30, 2006
Proprietary funds. The City of Rancho Palos Verdes maintains two types of proprietary funds.
Enterprise funds are used to report the same functions presented as business -type activities in
the government -wide financial statements. The City of Rancho Palos Verdes uses an enterprise
fund to account for its Water Quality and Flood Protection program. Internal service funds are an
accounting device used to accumulate and allocate costs internally among the City's various
functions. The City uses internal service funds to account for its fleet of vehicles, computer
systems, furniture and equipment, employee benefits, and Civic Center building improvements.
Because these services predominantly benefit the governmental function, they have been
included within governmental activities in the government -wide financial statements.
Proprietary fund financial statements provide the same type of information as the government -
wide financial statements, only in more detail. The proprietary fund financial statements provide
separate information for the enterprise fund, which is considered a major fund of the City of
Rancho Palos Verdes. Conversely, all three internal service funds are combined into a single,
aggregated presentation in the proprietary fund financial statements. Individual fund data for the
internal service funds is provided in the form of combining statements elsewhere in this report.
Notes to the financial statements. The notes provide additional information that is essential to
a full understanding of the data provided in the government -wide and fund financial statements.
The notes to the financial statements can be found on pages 25-47 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. Combining and individual fund statements and schedules can be found
on pages 54-95 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
$142,681,935 at June 30, 2006. By far the largest portion of the City's net assets (78 percent)
reflects its investment in capital assets (e.g. land, infrastructure, buildings, and equipment). The
City uses these capital assets to provide services to citizens; consequently, these assets are not
available for future spending.
City of Rancho Palos Verdes Net Assets
5
Governmental
Activities
Business -type
Activities
Total
June 30, 2006
June 30, 2005
June 30, 2006
June 30, 2005
June 30, 2006
June 30, 2005
Current and other assets
$ 40,591,912
$ 40,568,511
$ 3,086,278
$ 2,000,086
$ 43,678,190
$ 42,568,597
Capital assets
109,990,753
94,023,353
1,311,395
-
111,302,148
94,023,353
Total assets
150,582,665
134,591,864
4,397,673
2,000,086
154,980,338
136,591,950
Long-term liabilities outstanding
7,950,314
8,139,779
-
-
7,950,314
8,139,779
Other liabilities
4,060,625
4,694,969
287,464
-
4,348,089
4,694,969
Total liabilities
12,010,939
12,834,748
287,464
-
12,298,403
12,834,748
Invested in capital assets
109,990,753
94,023,353
1,311,395
-
111,302,148
94,023,353
Restricted
12,417,159
12,074,484
-
-
12,417,159
12,074,484
Unrestricted
16,163,814
15,659,279
2,798,814
2,000,086
18,962,628
17,659,365
Total net assets
$ 138,571,726
$ 121,757,116
$ 4,110,209
$ 2,000,086
$ 142,681,935
$ 123,757,202
5
CITY OF RANCHO PALOS VERDES
Management's Discussion and Analysis
June 30, 2006
An additional portion of the City's net assets ($12,417,159 or 8.7 percent) represents resources
that are subject to external restrictions on how they may be used. The remaining balance of
unrestricted net assets ($18,962,628 or 13.2 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
$16,814,610, thereby accounting for 89 percent of the total growth in the net assets of the City.
City of Rancho Palos Verdes Changes in Net Assets
Program revenues:
Charges for services
Operating contributions and grants
Capital contributions and grants
General revenues:
Property taxes
Other taxes
Other
Transfers
Governmental
Activities
June 30, 2006
Business -type
Activities
Total
1 June 30, 2005
June 30, 20061June 30, 2005
June 30, 2006 1 June 30, 2005
$ 1,659,787
3,893,921
17,299,613
(
9,621,452
5,725,737
1,790,166
2,109,492
$ 1,585,438 $
2,728,278
4,524,094
(
5,840,302
9,028,554
1,876,802
2,000,000
47,255
86
2,109,492 2,000,000
$ 1,659,787 $ 1,585,438
3,893,921 2,728,278
17,299,613 4,524,094
9,621,452
5,725,737
1,837,421
5,840,302
9,028,554
1,876, 888
Total revenues
37, 881,184
23,583,468
2,156,747
2,000,086
40,037,931
25,583,554
Expenses:
Administration
Public safety
Public works
Parks and recreation
Planning, building and code
enforcement
Interest on long-term debt
Water Quality Flood Protection
4,350,356
3,436,993
9,289,599
1,659,262
4,054,729
3,078,631
9,488,478
1,064,699
2,060,148 2,223,025
270,216 272,603
46,624
4,350,356
3,436,993
9,289,599
1,659,262
4,054,729
3,078,631
9,488,478
1,064, 699
2,060,148 2,223,025
270,216 272,603
46,624
Total expenses
21,066,574
20,182,165
46,624
-
21,113,198
20,182,165
Increase in net assets
16,814,610
3,401,303
2,110,123
2,000,086
18,924,733
5,401,389
Net assets - beginning of fiscal year
(as restated)
121,757,116
118,355,813
2,000,086
-
123,757,202
118,355,813
Net assets - end of fiscal year
(as restated)
$ 138,571,726
$ 121,757,116
$ 4,110,209
$ 2,000,086
$ 142,681,935
$ 123,757,202
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 of $15,960,000 in net assets.
The increase in capital assets is primarily attributable to the Portuguese Bend Open
Space purchase.
➢ The difference in the method of accounting for interest income in the governmental funds
versus the Statement of Activities accounts for an increase in excess of approximately
$877,509 in net assets. Unpaid accrued interest income is deferred in the governmental
funds since it is not available.
➢ The excess of Internal Service fund revenues over expenses of $421,563. The net
revenues and expenses of Internal Service funds are reported with governmental
activities in the Statement of Activities.
6
CITY OF RANCHO PALOS VERDES
Management's Discussion and Analysis
June 30, 2006
Revenues by Source — Governmental Activities
other taxes
14%
other
4%
charges for
services
4%
operating contributions
and grants
10%
property taxes
24%
capital contributions
and grants
44%
As of the end of the current fiscal year, the City's governmental funds reported combined ending
fund balances of $22,902,484, a decrease of $1,035,381 in comparison with the prior year.
Approximately 39 percent of the combined ending fund balances ($8,928,973) constitute
unreserved fund balance, which is available for spending at the City's discretion. An additional
portion of unreserved fund balance in the amount of $4,494,526 has been designated for
continuing appropriations. The combined unreserved fund balance includes the RDA Debt
Service negative fund balance of $13,369,973. The remainder of the combined ending fund
balances is reserved to indicate that it is not available for new spending because it has already
been committed 1) to reserve the principal balance of loans made to the City's Redevelopment
Agency ($6,072,354), and 2) for a variety of other restricted purposes ($3,406,631) includes
unreserved designation.
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 $13,649,076, while total
fund balance reached $20,689,971. As a measure of the General fund's liquidity, it may be useful
to compare both unreserved fund balance and total fund balance to total fund expenditures and
transfers out. Unreserved fund balance represents 77 percent of total General fund expenditures,
while total fund balance represents 117 percent of that same amount.
During the current fiscal year, the fund balance of the City's General fund decreased by
$214,707. The key factor in this decline is attributable an additional funding transfer to the Water
Quality Flood Protection enterprise fund and the continued careful management of resources
during FY05-06.
The debt service fund has a negative fund balance of $13,369,973. 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 $891,880, which primarily
represents accumulated interest on the advance from the City to the Redevelopment Agency.
7
CITY OF RANCHO PALOS VERDES
Management's Discussion and Analysis
June 30, 2006
Proprietary funds. The City's proprietary funds provide the same type of information found in
the government -wide financial statements, but in more detail. Unrestricted net assets of the
Enterprise fund at the end of the year amounted to $2,798,814. The fund was established during
FY04-05 with an initial General fund equity transfer of $2,000,000. Unrestricted net assets of the
Internal Service funds at the end of the year amounted to $4,885,750. The total growth in net
assets was $421,563.
General Fund Budgetary Highlights
The difference between the original budget and the final amended budget was an increase of
$1,361,515; and can be briefly summarized as follows:
A decrease of $876,105 was attributable to appropriations continued to FY06-07.
An increase of approximately $675,270 was attributable to appropriations continued from
FY04-05.
Additional funds of $644,279 were approved for exhibits at Point Vicente Interpretive
Center.
Additional funds of $220,000 were approved for consultant engineering for a variety of
city projects.
Additional funds of $200,103 were required for general liability insurance.
Additional funds of $112,520 were approved for additional litigation services.
Additional funds of $81,748 were required for increased traffic enforcement.
Additional funds of $60,380 were required for the Mira Vista speed humps.
Additional funds of $52,338 were approved for the disaster communications facility.
Additional funds of $50,000 were approved for the landslide moratorium geologic study.
Other immaterial increases totaled approximately $140,982.
Capital Asset and Debt Administration
Capital assets. The City's investment in capital assets for its governmental activities and
business -type activities as of June 30, 2006, amounts to $109,990,753 and $1,311,395,
respectively (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 18 percent.
Major capital asset events during the current fiscal year included the following:
➢ Depreciation of $3.15 million was recorded for the City's capital assets.
➢ The Portuguese Bend Open Space was acquired at a cost of $17.1 million.
➢ Construction of the Point Vicente Interpretive Center was completed at a cost of $2.1
million.
8
CITY OF RANCHO PALOS VERDES
Management's Discussion and Analysis
June 30, 2006
City of Rancho Palos Verdes Capital Assets
(net of depreciation)
Governmental
Activities
June 30, 2006
Business -type
Activities
Total
I June 30, 2005
June 30, 2006 ! June 30, 2005
June 30, 2006 !June 30, 2005
Land $ 32,132,781 $ 15,058,724
Buildings 7,336,611 2,051,039
Park improvements 1,735,870 1,826,444
Roadways 46,273,578 48,269,545
Sewer system 10,723,020 11,178,129 $ 1,302,902
Storm drain system 10,919,853 10,975,375
Vehicles 48,137 15,574
Computer equipment 186,881 153,575
Furniture and other equipment 113,883 172,352
Construction in Progress 520,139 4,322,596 8,493
$ 32,132,781 $ 15,058,724
7,336,611 2,051,039
1,735,870 1,826,444
46,273,578 48,269,545
12, 025, 922 11,178,129
10, 919, 853 10, 975, 375
48,137 15,574
186,881 153,575
113,883 172,352
528,632 4,322,596
Total
$ 109,990,753
$ 94,023,353
$ 1,311,395
$ 111,302,148
$ 94,023,353
Additional information on the City's capital assets can be found in note 4 on pages 36-38 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 $7,950,314. Of this amount, $7,719,211 is a liability of the Redevelopment
Agency.
City of Rancho Palos Verdes Outstanding Debt
RDA Tax Increment Bond
RDA Deferred Interest Payable
Employee compensated absences
Governmental
Activities
June 30, 2006 1 June 30, 2005
$ 5,435,000 $
2,284,211
231,103
5,450,000
2,468,906
220,873
Total
$ 7,950,314
$ 8,139,779
The City's total debt decreased by $189,465 (2.3 percent) during the current fiscal year, due to
partial payment of the RDA deferred interest payable.
State statutes limit the amount of general obligation debt a governmental entity may issue to 15
percent of its total assessed valuation. The current debt limitation for the City of Rancho Palos
Verdes is $962,539,428. Additional information on the City's long-term debt can be found in note
5 on pages 38-40 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. This
factor was considered in preparing the City's budget for FY06-07.
9
CITY OF RANCHO PALOS VERDES
Management's Discussion and Analysis
June 30, 2006
Requests for Information
This financial report is designed to provide a general overview of the financial position of the City
of Rancho Palos Verdes for all those with an interest in the government's finances. Questions
concerning any of the information provided in this report or requests for additional financial
information should be addressed to the Finance Department, 30940 Hawthorne Boulevard,
Rancho Palos Verdes, CA 90275.
10
L
BASIC FINANCIAL STATEMENTS
Shoreline trail at Ocean Front Estates
Photo by Karen Peterson
GOVERNMENT -WIDE STATEMENTS
A shoreline trail at Fisherman's Access Scenic Turnout
Photo by Karen Paterson
CITY OF RANCHO PALOS VERDES
STATEMENT OF NET ASSETS
JUNE 30, 2006
Governmental Business -type
Activities Activities
ASSETS
Cash and cash equivalents $ 36,081,094
Receivables:
Taxes 969,913
Interest 412,958
Notes 768,658
Other 1,179,239
Prepaid costs 477,658
Land held for development 702,392
Capital assets
Non -depreciable:
Land 32,132,781
Construction in progress 520,139
Depreciable, net of accumulated depreciation:
Property and equipment 348,901
Buildings and improvements 7,336,611
Infrastructure 69,652,321
Total Assets 150,582,665
LIABILITIES
Accounts payable and accrued liabilities
Interest payable
Retentions payable
Unearned revenue
Deposits
Noncurrent liabilities:
Due within one year
Due in more than one year
Total Liabilities
NET ASSETS
Invested in capital assets
Restricted for:
Community development:
Expendable
Non -expendable
Public safety
Public works
Recreation services
Unrestricted
Total Net Assets
See accompanying notes to financial statements.
2,725,718
20,799
19,350
112,593
1,182,165
$ 3,070,981 $
15,297
8,493
1,302,902
4,397,673
287,464
187,027
7,763,287
12,010,939 287,464
109,990,753 1,311,395
7,894,673
1,000,000
68,534
3,436,111
17,841
16,163,814 2,798,814
$ 138,571,726 $ 4,110,209
11
Total
39,152,075
969,913
428,255
768,658
1,179,239
477,658
702,392
32,132,781
528,632
348,901
7,336,611
70,955,223
154,980,338
3,013,182
20,799
19,350
112,593
1,182,165
187,027
7,763,287
12,298,403
111,302,148
7,894,673
1,000,000
68,534
3,436,111
17,841
18,962,628
$ 142,681,935
CITY OF RANCHO PALOS VERDES
STATEMENT OF ACTIVITIES
YEAR ENDED JUNE 30, 2006
Governmental Activities:
Administration
Public safety
Public works
Parks and recreation
Planning, building and
code enforcement
Interest on long-term debt
Total Governmental Activities
Business -type Activities:
Water Protection Flood Control
Total Primary Government
Charges for
Expenses Services
$ 4,350,356 $
3,436,993
9,289,599
1,659,262
2,060,148
270,216
Program Revenues
Operating Capital
Contributions Contributions
and Grants and Grants
34,914
223,838
37,274
45,221
1,318,540
21,066,574 1,659,787
46,624
$ 5,476
123,442
3,756,697
8,306
$ 17,299,613
3,893,921 $ 17,299,613
$ 21,113,198 $ 1,659,787 $ 3,893,921 $ 17,299,613
General Revenues:
Taxes:
Property tax, levied for general purpose
Property tax, Redevelopment Agency tax increment
Transient occupancy tax
Franchise tax
Sales tax
In lieu sales tax (unrestricted)
Motor vehicle in lieu tax (unrestricted)
Utility user tax
Other taxes
Investment income
Other
Transfers
Total General Revenues and Transfers
Change in Net Assets
Net Assets at Beginning of Year
Net Assets at End of Year
See accompanying notes to financial statements.
12
Net Revenue (Expense) and Change in Net Assets
Governmental Business -type
Activities Activities
$ (4,309,966)
(3,089,713)
11,803,985
(1,614,041)
(733,302)
(270,216)
Total
$ (4,309,966)
(3,089,713)
11,803,985
(1,614,041)
(733,302)
(270,216)
1,786,747 1,786,747
$ (46,624) (46,624)
1,786,747
8,784,142
837,310
31,463
1,454,356
1,111,013
242,936
329,518
2,190,514
365,937
997,383
792,783
(2,109,492)
15,027,863
16,814,610
121,757,116
$ 138,571,726 $
(46,624)
1,740,123
8,784,142
837,310
31,463
1,454,356
1,111,013
242,936
329,518
2,190,514
365,937
47,255 1,044,638
792,783
2,109,492
2,156,747 17,184,610
2,110,123 18,924,733
2,000,086 123,757,202
4,110,209 $ 142,681,935
13
Wildflowers in the Agua Armaga Canyon
Photo by Karen Peterson
FUND FINANCIAL STATEMENTS
CITY OF RANCHO PALOS VERDES
GOVERNMENTAL FUNDS
BALANCE SHEET
JUNE 30, 2006
ASSETS
Cash and cash equivalents
Receivable
Taxes
Interest
Other
Due from other funds
Prepaid items
Advances to other funds
Land held for development
Total Assets
LIABILITIES AND FUND BALANCES
LIABILITIES
Accounts payable and accrued liabilities
Due to other funds
Retentions payable
Deferred revenue
Advances to Redevelopment Agency
Deposits
Total Liabilities
FUND BALANCES
Reserved for:
Reimbursement settlement agreement
Prepaid costs
Advances to other funds
Land development
Housing set-aside
Unreserved:
Designated for continuing appropriations
Unreserved, undesignated and reported in:
General fund
Special revenue funds
Capital projects funds
Permanent funds
Debt service fund
Total Fund Balances
Total Liabilities and
Fund Balances
See accompanying notes to financial statements.
14
General
$ 15,977,009
919,041
189,130
526,527
387,365
92,436
13,688,479
Special
Revenue
Street
Maintenance
$ 878,600
2,373
57,710
Capital
Projects
Capital
Improvements
$ 2,857,663
$ 31,779,987 $ 938,683 $
$ 2,102,565 $
19,350
7,785,936
1,182,165
11, 090, 016
92,436
6,072,354
876,105
13, 649, 076
20, 689, 971
140,057 $
140,057
89,056
709,570
798,626
$ 31,779,987 $ 938,683 $
22,586
70,176
2,950,425
151,232
151,232
2,799,193
2,799,193
2,950,425
Debt
Service Other
Governmental
RDA Funds Totals
$ 11,388,318 $ 31,101,590
50,872 969,913
146,884 360,973
524,826 1,179,239
387,365
$ 371,135 14,087 477,658
13,688,479
702,392 702,392
$ 371,135 $ 12,827,379 $ 48,867,609
$ 186,125 $ 2,579,979
$ 52,629 334,736 387,365
19,350
321,851 8,107,787
13,688,479 13,688,479
1,182,165
13,741,108 842,712 25,965,125
1,000,000 1,000,000
371,135 14,087 477,658
6,072,354
702,392 702,392
1,226,581 1,226,581
730,172 4,494,526
13,649,076
5,905,041 6,614,611
2,077,413 2,077,413
328,981 328,981
(13,741,108) (13,741,108)
(13,369,973) 11,984,667 22,902,484
$ 371,135 $ 12,827,379 $ 48,867,609
15
The Whale Mural at Point Vicente Interpretive Center
Photo by Holly Starr
CITY OF RANCHO PALOS VERDES
GOVERNMENTAL FUNDS
RECONCILIATION OF THE BALANCE SHEET OF GOVERNMENTAL FUNDS
TO THE STATEMENT OF NET ASSETS
JUNE 30, 2006
Fund Balances of Governmental Funds $ 22,902,484
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. 109,641,852
Interest accrued on the advance receivable in the General Fund is not paid by the
owing funds and, therefore, is recorded as deferred revenue and added to the
balance of the advance. The statement of net assets reports on the full accrual
basis and does not defer currently unavailable revenues.
7,616,125
Intergovernmental revenues earned, but not available are deferred in the
fund financial statements. The revenue is not deferred on the Statement
of Activities. 379,069
Interest expenditures are recognized when due, and therefore, interest payable
is not recorded in the governmental funds. (20,799)
Long-term notes receivable are not current available resources and, therefore,
are not reported in the governmental funds. 768,658
Long-term liabilities are not due and payable in the current period and, therefore,
are not reported in the governmental funds. (7,950,314)
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.
5,234,651
Net Assets of Governmental Activities $ 138,571,726
See accompanying notes to financial statements.
16
CITY OF RANCHO PALOS VERDES
GOVERNMENTAL FUNDS
STATEMENT OF REVENUES, EXPENDITURES ANC
CHANGES IN FUND BALANCES
YEAR ENDED JUNE 30, 2006
General
REVENUES
Taxes $ 13,753,348
Licenses and permits 1,439,758
Fines and forfeitures 170,640
Use of money and property 1,121,940
Charges for services 48,109
Revenue from other agencies 540,143
Other revenues 105,200
Total Revenues 17,179,138
EXPENDITURES
Current:
Administration
Public safety
Public works
Parks and recreation
Planning, building and
code enforcement
Pass through to other agencies
Capital outlay
Debt service:
Principal
Interest and fiscal charges
Total Expenditures
Excess (Deficiency) of Revenues
Over Expenditures
Other Financing Sources (Uses):
Transfers in
Transfers out
Total Other Financing Sources (Uses)
Net Change in Fund Balances
Fund Balances, Beginning of Year
Fund Balances, End of Year
See accompanying notes to financial statements.
4,025,930
3,437,933
1,982,555
1,593,104
2,360,986
Special
Revenue
Street
Maintenance
$ 25,434 $
1,280
1,045,269
1,071,983
1,617,751
13,400,508 1,617,751
3,778,630 (545,768)
190,158 728,873
(4,183,495)
(3,993,337) 728,873
(214,707) 183,105
20,904,678 615,521
$ 20,689,971 $ 798,626
17
Capital
Projects
Capital
Improvements
4,966,704
12,165, 867
17,132, 571
20,067,138
20,067,138
(2,934,567)
3,790,161
(472,000)
3,318,161
383,594
2,415,599
$ 2,799,193
Debt
Service Other
Governmental
RDA Funds Totals
$ 669,404 $ 897,936 $ 15,320,688
1,439, 758
170,640
924,123 7,038,201
49,389
1,759,569 15,510,848
50,004 155,204
669,404 3,631,632 39,684,728
12,126 3,025 4,041,081
3,437,933
1,676,643 5,276,949
1,593,104
479 2,361,465
199,829 199,829
135,274 20,202,412
199,695 199,695
1,149,634 1,149,634
1,561,284 1,815,421 38,462,102
(891,880) 1,816,211 1,222,626
279,931 4,989,123
(2,591,635) (7,247,130)
(2,311,704) (2,258,007)
(891,880) (495,493) (1,035,381)
(12,478,093) 12,480,160 23,937,865
$ (13,369,973) $ 11,984,667 $ 22,902,484
18
CITY OF RANCHO PALOS VERDES
RECONCILIATION OF THE STATEMENT OF REVENUES, EXPENDITURES ANC
CHANGES IN FUND BALANCES OF GOVERNMENTAL FUNDS
TO THE STATEMENT OF ACTIVITIES
YEAR ENDED JUNE 30, 2006
Net Change in Fund Balances - Total Governmental Funds $ (1,035,381)
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. Asset disposals are also not
recgonized in the governmental funds. This activity is reconciled as follows:
Cost of assets capitalized 19,464,895
Depreciation expense (2,948,718)
Asset disposals (less accumulated depreciation) (556,177)
Unpaid accrued interest income is deferred in the governmental funds since it is
not available. This income is accrued in the Statement of Activities. 877,509
Intergovernmental revenues earned, but not available are deferred in the
fund financial statements. The revenue is not deferred on the Statement
of Activities. 185,865
Interest expenditures are recognized when due, and therefore, interest payable
is not recorded in the governmental funds. This amount represents the net
change in interest payable. 1,909
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. 213,680
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. (10,230)
Principal payments on debt are recorded as expenditures in the funds. The expenditure
is not recognized in the Statement of Activites since it reduces the liability reported
on the Statement of Net Assets. Principal payments consisted of the following:
RDA Tax Increment Bond 15,000
RDA Deferred Interest Payable 184,695
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. 421,563
Change in Net Assets of Governmental Activities $16,814,610
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, 2006
REVENUES
Taxes
Licenses and permits
Fines and forfeitures
Use of money and property
Charges for services
Revenue from other agencies
Other revenues
Total Revenues
EXPENDITURES
Current:
Administration
Public safety
Public works
Parks and recreation
Planning, building and
code enforcement
Total Expenditures
Excess of Revenues
Over Expenditures
OTHER FINANCING SOURCES (USES)
Transfers in
Transfers out
Total Other Financing Sources (Uses)
Net Change in Fund Balance
Fund Balance, Beginning of Year
Fund Balance, End of Year
Budgeted Amounts
Original Final
$11,957,700
1,491,300
100,000
652,650
54,800
359,100
105,200
Actual
Amounts
Variance with
Final Budget -
Positive
(Negative)
$ 12,775,544 $ 13,753,348 $ 977,804
1,331,300 1,439,758 108,458
100,000 170,640 70,640
957,650 1,121,940 164,290
54,800 48,109 (6,691)
359,100 540,143 181,043
105,200 105,200
14,720,750 15,683,594 17,179,138 1,495,544
3,717,400 4,151,365 4,025,930 125,435
3,363,400 3,499,935 3,437,933 62,002
2,206,000 2,403,521 1,982,555 420,966
1,173,000 1,740,220 1,593,104 147,116
2,627,880 2,654,154 2,360,986 293,168
13,087,680 14,449,195 13,400,508 1,048,687
1,633,070 1,234,399 3,778,630 2,544,231
201,800 216,800 190,158 (26,642)
(2,643,201) (5,022,967) (4,183,495) 839,472
(2,441,401) (4,806,167) (3,993,337) 812,830
(808,331)
(3,571,768) (214,707) 3,357,061
20,904,678 20,904,678 20,904,678
$20,096,347 $ 17,332,910 $ 20,689,971 $ 3,357,061
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, 2006
REVENUES
Use of money and property
Charges for services
Revenue from other agencies
Total Revenues
Variance with
Final Budget -
Budgeted Amounts Actual Positive
Original Final Amounts (Negative)
$ 9,900 $ 9,900 $ 25,434 $ 15,534
15,000 15,000 1,280 (13,720)
796,000 906,000 1,045,269 139,269
820,900 930,900 1,071,983 141,083
EXPENDITURES
Current:
Public works 1,798,000 2,133,944 1,617,751 516,193
Excess (Deficiency) of Revenues
Over Expenditures (977,100) (1,203,044) (545,768) 657,276
OTHER FINANCING SOURCES (USES)
Transfers in 898,500 1,003,500 728,873 (274,627)
Net Change in Fund Balance (78,600) (199,544) 183,105 382,649
Fund Balance, Beginning of Year 615,521 615,521 615,521
Fund Balance, End of Year $ 536,921 $ 415,977 $ 798,626 $ 382,649
See accompanying notes to financial statements.
21
CITY OF RANCHO PALOS VERDES
STATEMENT OF NET ASSETS
PROPRIETARY FUNDS
JUNE 30, 2006
ASSETS
Current Assets
Cash and cash equivalents
Receivables:
Interest
Total Current Assets
Noncurrent Assets
Capital assets:
Construction in progress
Property and equipment
Infrastructure
Accumulated depreciation
Total Noncurrent Assets
Total Assets
LIABILITIES
Current Liabilities
Accounts payable and accrued liabilities
Total Liabilities
NET ASSETS
Invested in capital assets
Unrestricted
Total Net Assets
See accompanying notes to financial statements.
22
Water Quality
Flood Protection
Enterprise
Fund
Governmental
Activities -
Internal Service
Funds
$ 3,070,981 $ 4,979,504
15,297 51,985
3,086,278 5,031,489
8,493
1,161,074
1,329,492
(26,590) (812,173)
1,311,395 348,901
4,397,673 5,380,390
287,464 145,739
287,464 145,739
1,311,395 348,901
2,798,814 4,885,750
$ 4,110,209 $ 5,234,651
CITY OF RANCHO PALOS VERDES
STATEMENT OF REVENUE, EXPENSES, AND CHANGES
IN FUND NET ASSETS
PROPRIETARY FUNDS
FOR THE YEAR ENDED JUNE 30, 2006
OPERATING REVENUES
Charges for services
Total Operating Revenues
OPERATING EXPENSES
Personnel services
Professional services
Material and supplies
Maintenance
Depreciation
Total Operating Expenses
Operating Income (Loss)
NONOPERATING REVENUES
Interest income
Total Non Operating Revenues
Income Before Transfers
TRANSFERS IN
Change in Net Assets
Net Assets, Beginning of Year
Net Assets, End of Year
See accompanying notes to financial statements.
23
Water Quality
Flood Protection
Enterprise
Fund
$ 20,034
26,590
46,624
(46,624)
47,255
47,255
631
2,109,492
2,110,123
2,000,086
$ 4,110,209
Governmental
Activities -
Internal Service
Funds
$ 1,799,966
1,799,966
1,172,979
66,164
251,973
205,889
1,697,005
102,961
170,087
170,087
273,048
148,515
421,563
4,813,088
$ 5,234,651
CITY OF RANCHO PALOS VERDES
STATEMENT OF CASH FLOWS
PROPRIETARY FUNDS
FOR THE YEAR ENDED JUNE 30, 2006
CASH FLOWS FROM OPERATING ACTIVITIES
Internal activity - payments from other funds
Payments to suppliers
NET CASH PROVIDED (USED) BY OPERATING ACTIVITIES
CASH FLOWS FROM CAPITAL AND
RELATED FINANCING ACTIVITIES
Acquisition of capital assets
CASH FLOWS FROM NONCAPITAL
FINANCING ACTIVITIES
Transfers in
CASH FLOWS FROM INVESTING ACTIVITIES
Interest received on investments
NET INCREASE IN CASH AND CASH EQUIVALENTS
CASH AND CASH EQUIVALENTS, Beginning of Year
CASH AND CASH EQUIVALENTS, End of Year
RECONCILIATION OF OPERATING INCOME (LOSS)
TO NET CASH PROVIDED (USED) BY OPERATING ACTIVITIES
Operating income
Adjustments to reconcile operating income to
net cash provided by operating activities:
Depreciation
Decrease in other receivables
Decrease in prepaid items
Decrease in accounts payable
NET CASH PROVIDED (USED) BY OPERATING ACTIVITIES
See accompanying notes to financial statements.
24
Water Quality
Flood Protection
Enterprise
Fund
Governmental
Activities -
Internal Service
Funds
$ 1,801,250
$ (20,034) (1,484,371)
(20,034)
(1,050,521)
2,109,492
31,958
1,070,895
2,000,086
316,879
(213,289)
148,515
149,288
401,393
4,578,111
$ 3,070,981 $ 4,979,504
$ (46,624) $ 102,961
26,590
205,889
1,284
1,043
5,702
$ (20,034) $ 316,879
L
NOTES TO FINANCIAL STATEMENTS
The trail at Lower Hesse Park
Photo by Karen Peterson
CITY OF RANCHO PALOS VERDES
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2006
NOTE #1 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The accounting policies of the City of Rancho Palos Verdes (the City) conform to accounting principles
generally accepted in the United States of America as applicable to governments. The Governmental
Accounting Standards Board (GASB) is the accepted standard setting body for governmental accounting
and financial reporting principles. The following is a summary of the significant policies.
A. Reporting Entity
The reporting entity "City of Rancho Palos Verdes" includes the accounts of the City, the Rancho
Palos Verdes Redevelopment Agency (the RDA) and the Joint Powers Improvement Authority (the
Authority).
The City was incorporated on September 7, 1973 as a general law city and operates under a
Council/Manager form of government.
The RDA was formed in 1984 pursuant to the State of California Health and Safety Code, Section
33000 entitled "Community Redevelopment Law". Its purpose is to finance long-term capital
improvements designed to eliminate physical and economic blight in a project area through
stabilization of hazardous landslides.
The Authority was formed on September 4, 1990, in accordance with the provisions of the
Reimbursement and Settlement Agreement, dated October 27, 1987, entered into by the City, the
RDA and the County of Los Angeles (the County) in connection with the Horan lawsuit. The
Agreement requires funds to be set aside and expended by the Authority to maintain landslide
abatement improvements installed and constructed by the RDA.
The criteria used in determining the scope of the reporting entity are based on the provisions of
GASB Statement 14. The City of Rancho Palos Verdes is the primary government unit. Component
units are those entities which are financially accountable to the primary government, either because
the City appoints a voting majority of the component unit's Board, or because the component unit will
provide a financial benefit or impose a financial burden on the City. The City has accounted for both
the RDA and the Authority as "blended" component units. Despite being legally separate, the RDA
and the Authority are so intertwined with the City, it is in substance, part of the City's operations.
Accordingly, the balances and transactions of the RDA are reported as separate funds in the Special
Revenue, Debt Service, and Capital Projects Funds. The balances and transactions of the Authority
are reported as separate funds in a Permanent Fund and a Special Revenue Fund. The following
specific criteria were used in determining that the RDA and the Authority are "blended" component
units:
1) The members of the City Council also act as the governing body of both the RDA and the
Authority.
2) The City, the RDA and the Authority are financially interdependent. The City makes loans to the
RDA for use on redevelopment projects. Available property tax revenues of the RDA will be used
to repay the loans from the City. It is not anticipated that tax increment revenues will be available
to repay the loans any time in the immediate future.
3) Employees of the City manage both the RDA and the Authority.
25
CITY OF RANCHO PALOS VERDES
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2006
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.
C. Description of Funds
The accounts of the City are organized on the basis of funds, each of which is considered a separate
accounting entity. The operations of each fund are accounted for with a separate set of self -balancing
accounts that comprise its assets, liabilities, fund equity, revenues, and expenditures. The following
are types of funds used:
Governmental Fund Types
• General Fund — Used to account for all financial resources except those that are required to be
accounted for in another fund.
• Special Revenue Funds — Used to account for the proceeds of specific revenue sources that are
restricted by law or administrative action for specified purposes.
• Debt Service Fund — The debt service fund of the RDA is used to account for property tax
increment revenue and related interest income. Disbursements from this fund consist mainly of
principal and interest on RDA indebtedness.
26
CITY OF RANCHO PALOS VERDES
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2006
NOTE #1 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, Continued
• Capital Projects Funds — Used to account for financial resources used for the construction of
specific capital projects.
• Permanent Fund — Used to account for resources legally restricted to the extent that only
earnings, and not principal, may be used for purposes that support the reporting government's
programs.
Proprietary Fund Type
• Enterprise Funds — Used to finance and account for the acquisition, operation, and maintenance
of the City's facilities and services, which are supported primarily by user charges.
• Internal Service Funds — Used to account for the financing of goods or services provided by one
department of the City to other departments on a cost -reimbursement basis.
D. Basis of Accounting/Measurement Focus
Government — Wide Financial Statements
The City's Government -Wide Financial Statements include a Statement of Net Assets and a
Statement of Activities and Changes in Net Assets. These statements present summaries of
Governmental Activities for the City.
These statements are presented on an "economic resources" measurement focus and the accrual
basis of accounting. Accordingly, all of the City's assets and liabilities, including capital assets and
infrastructure as well as long-term debt, are included in the accompanying Statement of Net Assets.
The Statement of Activities presents changes in net assets. Under the accrual basis of accounting,
revenues are recognized in the period in which they are earned while expenses are recognized in the
period in which the liability is incurred. The Statement of Activities demonstrates the degree to which
the direct expenses of a given function are offset by program revenues. Direct expenses are those
that are clearly identifiable with a specific function. The types of transactions reported as program
revenues for the City are reported in three categories: 1) charges for services, 2) operating grants
and contributions, and 3) capital grants and contributions. Charges for services include revenues
from customers or applicants who purchase, use, or directly benefit from goods, services, or
privileges provided by a given function. Operating grants and contributions include revenues
restricted to meeting the requirements of a particular operating function and may include state shared
revenues and grants. Capital grants and contributions include revenues restricted to meeting the
requirements of a particular capital function and may include grants and developer fees. Taxes and
other items not properly included among program revenues are reported instead as general
revenues.
Internal balances in the Governmental -wide statements have been eliminated as prescribed by GASB
Statement No. 34.
27
CITY OF RANCHO PALOS VERDES
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2006
NOTE #1 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, Continued
Governmental Fund Financial Statements
Governmental fund financial statements include a Balance Sheet and Statement of Revenue,
Expenditures, and Changes in Fund Balances for all major governmental funds and aggregated non -
major funds. An accompanying schedule is presented to reconcile and explain the differences in fund
balances as presented in these statements to the net assets presented in the Government -Wide
Financial Statements. The City has presented all major funds that met qualifications of GASB
Statement No. 34. In addition, the City has presented the Street Maintenance Special Revenue Fund
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 #10), taxpayer -assessed
taxes such as sales taxes, and earnings on investments. Grant funds earned but not received are
recorded as a receivable, and grant funds received before the revenue recognition criteria have been
met are reported as deferred revenues. Expenditures are recorded when the fund liability is incurred,
if measurable, except for immature interest on general long-term debt, which is recognized when due.
The City reports the following major governmental funds
The General Fund is the government's primary operating fund. It accounts for all financial resources
of the City, except those that are required to be accounted for in another fund.
The Street Maintenance Special Revenue Fund is used to account for State highway users tax used
for street maintenance, right-of-way acquisition and street construction.
The Capital Improvement Capital Projects Fund is used to account for the funds used for the City's
capital improvement projects.
The RDA Debt Service Fund is used to account for the accumulation of resources and for the
payment of principal and interest on the RDA's debt and other long-term obligations.
Proprietary Fund Financial Statements
Proprietary fund types are accounted for using the "economic resources" measurement focus and
accrual basis of accounting. This means that all assets and liabilities (whether current or non-current)
associated with the activity are included on the balance sheet. Their reported fund equity presents
total net assets. The operating statement of the proprietary funds present increases (revenues) and
decreases (expenses) in total net assets. Revenues are recognized when they are earned and
expenses are recognized when the liability is incurred.
28
CITY OF RANCHO PALOS VERDES
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2006
NOTE #1 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, Continued
Proprietary funds distinguish operating revenues and expenses from non-operating items. Operating
revenues and expenses generally result from providing services and producing and delivering goods
in connection with a proprietary fund's principal ongoing operations. The principal operating revenues
of the City's enterprise and internal service funds are charges to customers for sales and services.
Operating expenses for the enterprise and internal service funds include the costs of sales and
services, the costs of employee benefits, maintenance of capital assets, and depreciation on capital
assets. All revenues and expenses not meeting this definition are reported as non-operating
revenues and expenses.
The City's internal service funds are presented in the proprietary funds financial statements. Because
the principal users of the internal services are the City's governmental activities, the financial
statements of the internal service funds are consolidated into the governmental column when
presented in the government -wide financial statements. To the extent possible, the cost of these
services is reported in the appropriate functional activity (administration, public safety, public works,
etc.).
The City reports the following major enterprise fund
The Water Quality Flood Protection Fund is used to account for voter approved storm drain user fees
used to repair and replace the City's storm drain facilities.
The City uses the internal service funds to finance and account for goods and services provided by
one City department to other City department including the purchase and maintenance of equipment,
replacement of buildings and employee benefits.
E. Budgetary Accounting
Annual budgets are adopted on a basis consistent with GAAP for all governmental funds. All annual
appropriations lapse at fiscal year-end. Throughout the year, the City Council made several
supplementing budgetary adjustments to the General fund, Special Revenue funds, Capital Projects
funds, Proprietary funds and the Permanent fund. These adjustments resulted in a net appropriation
increase in the amount of $25,176,847. This increase resulted primarily from amounts carried over
from FY04-05 as continuing appropriations and the Portuguese Bend open space purchase.
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, 2006, based
on calculations by City Management, proceeds of taxes did not exceed related appropriations.
F. Advances to Other Funds
Long-term inter -fund advances are recorded as a receivable in the advancing governmental fund and
as a liability in the fund receiving the advance. Accrued unpaid interest is deferred in the advancing
governmental fund and the principal portion of the advance is reported as a reservation of fund
balance.
29
CITY OF RANCHO PALOS VERDES
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2006
NOTE #1 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, Continued
G. Capital Assets
Capital assets, which include land, machinery and equipment (vehicles, computers, etc.), buildings
and improvements, and infrastructure assets (street systems, storm drains, sewer systems, etc.), are
reported in Governmental Activities column of the Government -Wide Financial Statements. Capital
assets are defined by the City as all land and buildings, vehicles, computers and equipment with an
initial individual cost of more than $5,000; and improvements and infrastructure assets with costs of
more than $100,000. Such assets are recorded at historical cost or estimated historical cost if
purchased or constructed. Donated or annexed capital assets are recorded at estimated market
value at the date of donation or annexation.
The costs of normal maintenance and repairs that do not add to the value of the asset or materially
extend assets lives are not capitalized. Depreciation is recorded in the Government -Wide Financial
Statements on a straight-line basis over the useful life of the assets as follows:
Buildings and improvements
Vehicles, computers, and equipment
Infrastructure Assets
Roadway Network
Sewer Network
Storm Drain Network
Parks and Recreation Network
H. Employee Compensated Absences
25 to 50 years
3 to 10 years
10 to 100 years
25 to 50 years
30 to 100 years
25 years
City employees may receive from 10 to 20 days vacation time each year, depending upon length of
service. An employee may accumulate earned vacation time up to a maximum of two years' worth of
accrued vacation leave. Upon termination, employees are paid the full value of their unused vacation
time at their existing salary. There is no fixed payment schedule for employee compensated
absences.
At June 30, 2006, vested accrued vacation and compensatory time amounted to $231,103.
I. Investments
The City has adopted the provisions of Governmental Accounting Standards Board (GASB)
Statement No 31, "Accounting and Financial Reporting for Certain Investments and External Pools",
which require governmental entities to report certain investments at fair value in the balance sheet
and recognize the corresponding change in the fair value of investments in the year in which the
change occurred. In accordance with GASB Statement No. 31, the City has adjusted certain
investments to fair value (when material).
Investments are included within the Financial Statement classifications of "Cash and Cash
Equivalents" and are stated at fair value, (see Note #2).
30
CITY OF RANCHO PALOS VERDES
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2006
NOTE #1 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, Continued
J. Cash and Cash Eauivalents
For purposes of the statement of cash flows of the proprietary funds, all cash and investments with an
original maturity of 90 days or less are considered to be cash and cash equivalents. As explained in
Note #2, the City pools investment funds for maximum return. A substantial portion of these
investments is held in the State Treasurer's Local Agency Investment Pool, which is highly liquid.
The City has no non-cash investing, capital, or financing activities to be reported on the statement of
cash flows.
K. Claims and Judgments
When it is probable that a claim liability has been incurred, and the amount of the loss can be
reasonably estimated, the City records the estimated loss, net of any insurance coverage under its
self-insurance program. At June 30, 2006, in the opinion of the City Attorney, the City had no
material claims, which require loss provisions in the financial statements. Small claims and
judgments are recorded as expenditures when paid.
The City's self-insurance program is administered through the California Joint Powers Authority (the
CJPIA), which is described at Note #8. The CJPIA is a public entity risk pool, which is accounted for
under the provisions of GASB Statement 10. Claim losses recorded in the CJPIA include both
current claims and Incurred But Not Reported claims (IBNR). The City records amounts deposited
with CJPIA as insurance expenditures in the General Fund when paid. These deposits are subject to
retrospective adjustment. Favorable claims experience result in a refund of deposits from the CJPIA
and such refunds, if any, are recorded as a reduction of insurance expenditures in the year received.
Adverse claims experience result in the payment of additional deposits and such deposits, if any, are
recorded as insurance expenditures when paid.
L. Estimates
The preparation of financial statements in conformity with accounting principles generally accepted in
the United States of America requires management to make estimates and assumptions that effect
certain reported amounts and disclosures. Accordingly, actual results could differ from those
estimates.
M. Use of Restricted Resources
When both restricted and unrestricted resources are available for use, it is the City's policy to use
restricted resources first, and then unrestricted resources as they are needed.
N. New Pronouncements
GASB Statement No. 42 - In November 2003, the GASB issued Statement No. 42, Accounting and
Financial Reporting for Impairment of Capital Assets and for Insurance Recoveries. This statement
requires governments to measure, recognize, and disclose the effects of capital asset impairments in
their financial statements when it occurs. This statement also clarifies and establishes accounting
requirements for insurance recoveries, including those associated with capital asset impairment. This
statement became effective for 2005-06 and did not have a significant impact on the financial
statements.
31
CITY OF RANCHO PALOS VERDES
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2006
NOTE #1 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, Continued
GASB Statement No. 43 - In April 2004, the GASB issued Statement No. 43, Financial Reporting for
Postemployment Benefit Plans Other Than Pension Plans. This statement establishes accounting
and financial reporting standards for plans that provide postemployment benefits other than pension
benefits (known as other postemployment benefits or OPEB). This statement is not effective until
June 30, 2007. This statement does is not expected to have a significant impact on the financial
statements of the City.
GASB Statement No. 44 - In May 2004, the GASB issued Statement No. 44, Economic Condition
Reporting: The Statistical Section -an amendment of NCGA Statement No. 1. This Statement
amends the portions of NCGA Statement 1, Governmental Accounting and Financial Reporting
Principles, that guide the preparation of the statistical section. The statistical section presents
detailed information, typically in ten-year trends, that assists users in utilizing the basic financial
statements, notes to basic financial statements, and required supplementary information to assess
the economic condition of a government. This statement became effective for 2005-06 and has
resulted in changes to the content and presentation of the statistical section.
GASB Statement No. 45 - In June 2004, the GASB issued Statement No. 45, Accounting and
Financial Reporting by Employers for Postemployment Benefits Other Than Pensions. This
Statement establishes standards for the measurement, recognition, and display of OPEB
expense/expenditures and related liabilities (assets), note disclosures, and, if applicable, required
supplementary information (RSI) in the financial reports of state and local governmental employers.
This statement is not effective until June 30, 2008. The City has not determined its effect on the
financial statements.
GASB Statement No. 46 — In December 2004, the GASB issued Statement No. 46, Net assets
Restricted by Enabling Legislation, an amendment of GASB No. 34. This statement clarifies that a
legally enforceable enabling legislation restriction is one that a party external to a government can
compel a government to honor. Accordingly, it clarifies the determination of restricted net assets
within the statement of net assets. This statement became effective for 2005-06 and did not have a
significant impact on the financial statements.
GASB Statement No. 47 — In June 2005, the GASB issued Statement No. 47, Accounting for
Termination Benefits. This statement establishes accounting standards for termination benefits. This
statement became effective for 2005-06 and did not have a significant impact on the financial
statements.
NOTE #2 — CASH AND INVESTMENTS
Cash and investments as of June 30, 2006, are classified in the accompanying financial statements as
follows:
Governmental Funds
Proprietary Funds:
Enterprise Fund
Internal Service Funds
32
$ 31,101,590
3,070,981
4,979,504
$ 39,152,075
CITY OF RANCHO PALOS VERDES
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2006
NOTE #2 — CASH AND INVESTMENTS, Continued
Cash and investments as of June 30, 2006 consist of the following:
Cash $ 811,668
Investments 38,340,407
$ 39,152,075
Investments Authorized by the California Government Code and the City of Rancho Palos Verdes'
Investment Policy
The table below identifies the investment types that are authorized for the City of Rancho Palos Verdes
by the California Government Code. The table also identifies certain provisions of the California
Government Code that address interest rate risk, credit risk, and concentration of credit risk.
Maximum Maximum
Authorized Maximum Amount or Percent Investment
Investment Type Maturity of Portfolio in One Issuer
Local Agency Bonds 5 years None None
U.S. Treasury Obligations 5 years None None
U.S. Agency Securities 5 years None None
Banker's Acceptances 180 days 40% 30%
Commercial Paper 270 days 25% 10%
Negotiable Certificates of Deposit 5 years 30% None
Repurchase Agreements 7 days 15% None
Reverse Repurchase Agreements 92 days 20% of base value None
Medium -Term Notes 5 years 30% None
Mutual Funds N/A 20% 10%
Money Market Mutual Funds N/A 15% 5%
Mortgage Pass -Through Securities 5 years 20% None
County Pooled Investment Funds N/A None None
Local Agency Investment Fund (LAIF) N/A None None
JPA Pools (other investment pools) N/A None None
Money Market Savings/Demand Deposits N/A $1 Million 15%
Disclosures Relating to Interest Rate Risk
Interest rate risk is the risk that changes in market interest rates will adversely affect the fair value of an
investment. Generally, the longer the maturity of an investment, the greater the sensitivity of its fair value
to changes in market interest rates. The City's only investment is with the Local Agency Investment Fund
(LAIF) managed by the California State Treasurer. The City's investment is represented by shares in the
pool, which can be withdrawn in one business day. The average maturity of the pool is less than one
year.
33
CITY OF RANCHO PALOS VERDES
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2006
NOTE #2 — CASH AND INVESTMENTS, Continued
Disclosures Relating to Credit Risk
Generally, credit risk is the risk that an issuer of an investment will not fulfill its obligation to the holder of
the investment. This is measured by the assignment of a rating by a nationally recognized statistical
rating organization. The City's LAIF investment is not rated.
Concentration of Credit Risk
The investment policy of the City of Rancho Palos Verdes contains no limitations on the amount that can
be invested in any one issuer beyond that stipulated by the California Government Code, except for
money market funds, which may not exceed five percent per issuer. The City's LAIF investment
represents 100 percent of the City's portfolio.
Custodial Credit Risk
Custodial credit risk for deposits is the risk that, in the event of the failure of a depository financial
institution, a government will not be able to recover its deposits or will not be able to recover collateral
securities that are in the possession of an outside party. The custodial credit risk for investments is the
risk that, in the event of the failure of the counterparty (e.g., broker-dealer) to a transaction, a government
will not be able to recover the value of its investment or collateral securities that are in the possession of
another party. The California Government Code and the City of Rancho Palos Verdes' investment policy
do not contain legal or policy requirements that would limit the exposure to custodial credit risk for
deposits or investments, other than the following provision for deposits: The California Government Code
requires that a financial institution secure deposits made by state or local governmental units by pledging
securities in an undivided collateral pool held by a depository regulated under state law (unless so waived
by the governmental unit). The market value of the pledged securities in the collateral pool must equal at
least 110 percent of the total amount deposited by the public agencies. California law also allows financial
institutions to secure City deposits by pledging first trust deed mortgage notes having a value of
150 percent of the secured public deposits.
The amount of the City of Rancho Palos Verdes' deposits with financial institutions in excess of federal
depository insurance limits that was held in collateralized accounts where the collateral is not held
specifically in the name of the City, as described above, was $535,444 at June 30, 2006.
Investment in State Investment Pool
The City of Rancho Palos Verdes is a voluntary participant in LAIF that is regulated by California
Government Code Section 16429 under the oversight of the Treasurer of the State of California. The fair
value of the City of Rancho Palos Verdes' investment in this pool is reported in the accompanying
financial statements at amounts based upon the City of Rancho Palos Verdes' pro -rata share of the fair
value provided by LAIF for the entire LAIF portfolio (in relation to the amortized cost of that portfolio). The
balance available for withdrawal is based on the accounting records maintained by LAIF, which are
recorded on an amortized cost basis.
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 oversight to the management of the fund. The
daily operations and responsibilities of LAIF fall under the auspices of the State Treasurer's office. The
City is a voluntary participant in the investment pool.
34
CITY OF RANCHO PALOS VERDES
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2006
NOTE #3 — INTERFUND TRANSACTIONS
Inter -fund Balances
Inter -fund balances consisted of the following at June 30, 2006:
Due to the General Fund from:
RDA Debt Service Fund $ 52,629
Nonmajor Governmental Funds:
CDBG Special Revenue Fund 41,136
Measure A Special Revenue Fund 293,600
Total Non -major Governmental Funds 334,736
Total Due to the General Fund $ 387,365
General fund monies were used to cover an RDA Debt Service fund negative cash balance for
expenditures incurred. Funds were also advanced to non -major funds to cover grant expenditures until
reimbursement is received from the grant agency.
Inter -fund Advances
The General Fund has advanced the RDA Debt Service Fund amounts as described below:
Advances to the Redevelopment Agency
Balance Balance
July 1, 2005 Additions Deletions June 30, 2006
$ 12,717,430 $ 971,049 $ 13,688,479
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, 2006, 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 6.85 percent during the fiscal year ended June 30, 2006. Of the
$13,688,479 remaining indebtedness, $10,713,255 relates to the Portuguese Bend portion of the RDA,
while $2,975,224 relates to the Abalone Cove portion. During the year ended June 30, 2006, accrued
interest of $686,779 was added to the balance of the advance to the Portuguese Bend Fund, while
principal of $93,540 and accrued interest of $190,730 was advanced to the Abalone Cove Fund. No
interest has ever been paid by the RDA on these advances; therefore, the interest component of the
advance has been recorded as deferred revenue in the General Fund of the City.
35
CITY OF RANCHO PALOS VERDES
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2006
NOTE #3 — INTERFUND TRANSACTIONS, Continued
Inter -fund Transfers
Inter -fund transfers for the year ended June 30, 2006 consisted of the following:
Transfer To
Transfer From
Capital Nonmajor
General Improvement Governmental
Fund Projects Funds Total
General Fund $ 190,158 $ 190,158
Street Maintenance $ 225,050 503,823 728,873
Capital Improvement Projects 1,941,022 1,849,139 3,790,161
Nonmajor Governmental Funds 279,931 279,931
WQ Flood Enterprise 1,637,492 $ 472,000 2,109,492
Internal Service Funds 100,000 48,515 148,515
Total $ 4,183,495 $ 472,000 $ 2,591,635 $ 7,247,130
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.
NOTE #4 — CAPITAL ASSETS AND DEPRECIATION
In accordance with GASB Statement No. 34, the City has reported all capital assets including
infrastructure in the Government -Wide Statement of Net Assets. The City elected to use the basic
reporting approach as defined by GASB Statement No. 34 for all infrastructure, whereby depreciation
expense and accumulated depreciation has been recorded. The following tables present the capital
assets activity for the year ended June 30, 2006.
36
CITY OF RANCHO PALOS VERDES
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2006
NOTE #4 — CAPITAL ASSETS AND DEPRECIATION, Continued
Depreciation expense was charged to functions/programs of the primary government as follows:
Governmental Activities
Capital assets not being depreciated:
Land
Construction in progress
Total capital assets not being depreciated
Capital assets being depreciated:
Buildings and improvements
Vehicles
Computer equipment
Furniture, fixtures and equipment
Infrastructure
Roadway system
Sewer system
Storm drain system
Parks system
Total capital assets being depreciated
Less accumulated depreciation for:
Buildings and improvements
Vehicles
Computer equipment
Furniture, fixtures and equipment
Infrastructure
Roadway system
Sewer system
Storm drain system
Parks system
Total accumulated depreciation
Total capital assets being depreciated, net
Governmental activities capital assets, net
Beginning
Balance
$ 15,058,724
4,322,596
19,381,320
3,197,989
177,069
387,255
383,461
77, 079, 026
25,755,463
12,455,398
5,575,075
125,010,736
(1,146,950)
(161,495)
(233,680)
(211,109)
(28,809,481)
(14, 577, 334 )
(1,480,023)
(3,748,631)
(50,368,703)
74,642,033
$ 94,023,353
Increases Decreases
Ending
Balance
$17,074,057 $ 32,132,781
2,284,096 $ (6,086,553) 520,139
19,358,153 (6,086,553) 32,652,920
6,013,760
48,515
141,550
23,224
179,535
6,406,584
(172,011)
(15,952)
(108,244)
(81,693)
(1,995,967)
(455,109)
(235,057)
(90,574)
(3,154,607)
3,251,977
$ 22,610,130
(611,185) 8,600,564
225,584
528,805
406,685
77,079,026
25,755,463
12,634,933
5,575,075
(611,185) 130,806,135
55,008 (1,263,953)
(177,447)
(341,924)
(292,802)
(30,805,448)
(15,032,443)
(1,715,080)
(3,839,205)
55,008 (53,468,302)
(556,177) 77,337,833
$ (6,642,730) $109,990,753
Depreciation expense was charged to functions/programs of the primary government as follows:
Administration
Public works, including depreciation of general infrastructure assets
Recreation services
Capital assets held by the City's internal service funds are charged to the various
functions based on their usage of the assets
Total Depreciation Expense - Governmental Activities
37
$ 172,011
2,686,133
90,574
205,889
$ 3,154,607
CITY OF RANCHO PALOS VERDES
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2006
NOTE #4 — CAPITAL ASSETS AND DEPRECIATION, Continued
Beginning
Business -type Activities Balance Increases
Capital assets not being depreciated:
Construction in progress $ 8,493
Total capital assets not being depreciated - 8,493
Capital assets being depreciated:
Infrastructure
Storm drain system
Total capital assets being depreciated
Less accumulated depreciation for:
Infrastructure
Storm drain system
Total accumulated depreciation
1,329,492
1,329,492
Ending
Decreases Balance
$ 8,493
8,493
1,329,492
1,329,492
(26,590) (26,590)
(26,590) - (26,590)
Total capital assets being depreciated, net - 1,302,902
Governmental activities capital assets, net $ - $ 1,311,395 $
- 1,302,902
- $ 1,311,395
Depreciation expense of $26,590 is included in the Water Quality Flood Protection enterprise fund.
NOTE #5 — LONG-TERM DEBT
RDA Tax Increment Bond
RDA Deferred Interest Payable
Employee compensated absences
Totals
A.
Balance
July 1, 2005
$ 5,450,000
2,468,906
220,873
$ 8,139,779
Balance Amount Due
Additions Deletions June 30, 2006 in 2007
$ 15,000 $ 5,435,000 $ 25,000
184,695 2,284,211
$ 165,085 154,855 231,103 162,027
$ 165,085 $ 354,550 $ 7,950,314 $ 187,027
RDA Tax Increment Bond and Deferred interest Payable
In July 1991, the RDA received $10,000,000 in loan proceeds (the Loan) from the County of Los
Angeles (the County) upon the County's issue of Abalone Cove Improvement Bonds 2651-M
pursuant to a Reimbursement and Settlement Agreement (the Agreement), dated October 27, 1987 in
connection with the Horan Lawsuit. The Loan was made for the purpose of abating the Abalone
Cove landslide. The settlement Loan was secured by property assessment liens in the Abalone Cove
project area.
As stipulated by the parties to the Agreement, a portion of the Loan proceeds was used to repay a tax
allocation and revenue anticipation promissory note issued to the County in the principal amount of
$1,450,000, plus accrued interest equal to $179,244. A second portion of the proceeds was used to
repay expenses advanced by the County in the amount of $135,614. A third portion was used to
repay certain loans from the City to the RDA in the amount of $787,340.
38
CITY OF RANCHO PALOS VERDES
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2006
NOTE #5 — LONG-TERM DEBT, Continued
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 was accounted for in the RDA's Abalone Cove Fund. Concurrent with the execution
of the Agreement, the County deeded its title in the Abalone Cove Beach Park to the RDA.
As part of the Agreement, the RDA is required to transfer 17 percent of tax increment revenue to the
Consolidated Fire Protection District of the County and 50.9 percent of tax increment revenue for debt
repayment to the County. In accordance with the Agreement, the RDA was to pay the Loan principal
plus interest at 7.7654 percent over a 30 -year period that began in 1992. However, these debt
payments were to be deferred 10 years until the fiscal year ended June 30, 2002.
As part of the deferral arrangement, the accrued interest from the inception of the Loan through
June 30, 2002, in the amount of $7,314,944, was scheduled for payment over a 20 -year period
beginning in the fiscal year ending June 30, 2002, with no additional interest. The remaining balance
of $10,274,119 was scheduled for payment to the County over a 20 -year period beginning in the
fiscal year ending June 30, 2002, with interest at 7.7654 percent.
On November 1, 1997, the City, RDA and County of Los Angeles entered into a Memorandum of
Understanding (MOU) agreeing to restructure the repayment schedule of the debt owed the County
by the RDA. In accordance with the terms of the MOU, the $10,000,000 loan principal owed the
County was cancelled. As consideration for the loan cancellation, the RDA made a lump sum
payment to the County in the amount of $4,545,000 and issued a $5,455,000 tax increment bond to
the County (the RDA bond). Of the $4,545,000 lump sum payment, $2,000,000 was paid from tax
increment revenue and interest earnings accumulated in the Debt Service Fund. The remaining
$2,545,000 was funded by a combination of a loan from the General Fund of the City to the Agency
for $1,545,000 and a net operating transfer from the Agency's Abalone Cove Capital Projects Fund to
the Debt Service Fund of $1,000,000. The private property liens resulting from the formation of the
bond assessment district in connection with the Reimbursement and Settlement Agreement in 1987
were discharged in accordance with the terms of the MOU.
The RDA bond was issued as a conduit through the Improvement Authority to the County. No
issuance costs were incurred. One hundred percent of net future tax increment revenue will fund the
payment of the RDA bond debt and the deferred interest from the original Loan until paid in full. In
December 1997, the County began withholding payment of the Agency's net tax increment revenue
(net of the 17 percent payment to the County Fire Protection District and the 20 percent housing set-
aside amount) to offset the annual principal and interest charges. The principal of the RDA bond will
mature in installments each December 2nd, commencing December 2, 2004. Interest accrues at a
rate of 5 percent per annum and is payable in arrears each June 2nd and December 2nd
Additionally, both the accrued interest and deferred interest on the $10,000,000 Loan previously
owed the County was retroactively recalculated from the Loan origination date at a rate of
approximately 5 percent compared to 7.7654 percent per the original Agreement. The recalculated
deferred interest is $3,111,400. In accordance with the MOU, the recalculated deferred interest does
not accrue additional interest. As of June 30, 2006, a total of $827,189 in accumulated tax increment
has been applied against this balance, including $184,695 applied during fiscal year 2005-06. The
remaining balance at June 30, 2006, was $2,284,211. 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, 2006.
39
CITY OF RANCHO PALOS VERDES
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2006
NOTE #5 — LONG-TERM DEBT, 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
2007 $ 25,000 $ 271,125 $ 296,125
2008 40,000 269,500 309,500
2009 55,000 268,125 323,125
2010 65,000 265,125 330,125
2011 85,000 260,375 345,375
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
$ 5,435,000 $ 4,136,625 $ 9,571,625
B. Employee Compensated Absences
There is no fixed payment schedule for employee compensated absences. Based on historical
trends, $162,027 is estimated to be the amount that will be used and/or paid out during FY 05-06.
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.
40
CITY OF RANCHO PALOS VERDES
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2006
NOTE #6 — CLASSIFICATIONS OF NET ASSETS AND FUND BALANCE, Continued
In the Fund Financial Statements the City has established "reserves" to segregate portions of fund
balance which are not appropriable for expenditure in future periods, or which are legally set aside for a
specific future use. In addition, fund balance may be designated to indicate tentative plans for financial
resource utilization of unreserved fund balance in a future period.
The City's governmental funds reserves and designations at June 30, 2006 are presented below, followed
by explanations of the nature and purpose of each reserve and designation.
Reserved:
Reimbursement
settlement agreement
Advances to other funds
Prepaid costs
Land held for development
Housing set-aside
Steet Capital RDA Debt Other
General Maintenance Improvement Service Governmental
Fund Fund Fund Fund Funds
$ 6,072,354
92,346
$ 371,135
$ 1,000,000
14,087
702,392
1,226,581
Total Reserved $ 6,164,700 $ - $ - $ 371,135 $ 2,943,060
Designated:
Continuing appropriations $ 876,105 $ 89,056 $ 2,799,193 $ $ 730,172
A. Designated for Encumbrances and Continuing Appropriations
These designations are maintained for current year budget appropriations that are formally carried
over into the subsequent fiscal year.
B. Reserved for Reimbursement Settlement Agreement
This reserve has been established under the legal requirements of the Reimbursement Settlement
Agreement (see Note #5).
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
$7,616,125 recorded as deferred revenue (see Note #11).
D. Reserved for Prepaid Items
This reserve is provided to indicate that the asset carrying value is not available to spend to meet
expenditures of the current year.
E. Reserved for Land Held for Development
These funds are reserved for land purchased by the City to be sold or otherwise used for the
development of low and moderate -income housing.
41
CITY OF RANCHO PALOS VERDES
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2006
NOTE #6 — CLASSIFICATIONS OF NET ASSETS AND FUND BALANCE, Continued
F. Reserved for Housing Set -Aside
These funds are reserved for low and moderate -income housing as restricted by law or administrative
action.
The City has also designated $38,848 of net assets of the Water Quality Flood Protection Enterprise
Fund for future projects.
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 (CaIPERS), an agent multiple -
employer plan administrated by CaIPERS, which acts as a common investment and administrative agent
for participating public employers within the State of California. State statutes, within the Public
Employees' Retirement Law, establish benefit provisions and other requirements. The City selects
optional benefit provisions from the benefit menu by contract with CaIPERS and adopts those benefits
through local ordinance. The CaIPERS issues a separate comprehensive annual financial report. Copies
of the CaIPERS annual financial report may be obtained from the CaIPERS Executive Office — 400 P
Street, Sacramento, California, 95814.
Funding Policy
A contribution of 7 percent of annual covered salary is required for each active plan member. For local
miscellaneous members, the City pays the full 7 percent contribution for all the full-time positions, while
part-time employees must contribute the 7 percent from earnings. Additionally, the City is required to
contribute the actuarially determined remaining amounts necessary to fund the benefits for its members.
The actuarial methods and assumptions used are those adopted by the CaIPERS Board of
Administration. The required employer contribution rate for FY 05-06 was 12.452 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 CaIPERS.
Annual Pension Cost
For FY05-06, the City's actual and contributed pension cost was $590,591. The required contribution for
FY05-06 was determined as part of the June 30, 2003 actuarial valuation using the entry age normal
actuarial cost method with the contributions determined as a percent of pay. The actuarial assumptions
included (a) 7.75 percent investment rate of return (net of administrative expenses); (b) projected salary
increases that vary by duration of service ranging from 3.25 percent to 14.45 percent; and (c) payroll
growth of 3.25 percent. Both (a) and (b) include an inflation component of 3.0 percent. The actuarial
value of the Plan's assets was determined using a technique that smoothes the effect of short-term
volatility in the market value of investments over a two to five year period depending on the size of
investment gains and/or losses. The Plan's un -funded actuarial accrued liability (or excess assets) is
being amortized as a level percentage of projected payroll expenditures on a closed basis.
42
CITY OF RANCHO PALOS VERDES
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2006
NOTE #7 — PENSION PLAN, Continued
Three -Year Trend Information for Plan:
Annual
Pension Cost
(APC)
$ 267,684
411,412
590,591
Fiscal Year
Ending
6/30/2004
6/30/2005
6/30/2006
Percentage
of APC
Contributed
100%
100%
100%
Schedule of Funding Status of Plan (Required Supplementary Information):
Valuation
Date
Actuarial
Value of
Assets
6/30/2003 $ 2,372,879,034
6/30/2004 2,460,944,656
6/30/2005 2,588,713,000
Entry Age
Normal Accrued
Liability
$ 2,596,966,545
2,746,095,668
2,891,460,651
Unfunded
(Overfunded)
Liability
$ 224,087,511
285,151,012
302,747,651
Funded
Ratio
Annual
Covered
Payroll
91.4% $ 725,020,458
89.6% 743,691,970
89.5% 755,046,679
Net Pension
Obligation
$ 0
$ 0
$ 0
UAAL as a
% of Payroll
30.9%
38.3%
40.1%
As a result of having less than 100 active members as of June 30, 2003, the City was required to
participate in a risk pool. Mandated pooling is effective with the June 30, 2003 valuation which
determines the contribution rate for 2005-2006. The 2005-2006 is the first year under pooling, and
therefore, the City's pooled employer contribution rate is the same as the stand-alone employer
contribution rate. This is because the difference between the pool's normal cost and the stand-alone
normal cost will be phased out over five years, beginning with 2006-2007. For 2005-2006, 100 percent of
the difference between the pool's normal costs and the stand-alone normal cost is reflected in the
development of the City's pooled employer contribution rate. For 2006-2007, only 80 percent of the
difference will be reflected; for 2007-2008, 60 percent will be reflected, and so on, until it is fully subject to
the pool's normal costs for 2010-2011 and beyond.
NOTE #8 — INSURANCE
Description of Self -Insurance Pool Pursuant to Joint Powers Agreement
The City is a member of the California Joint Powers Insurance Authority (CJPIA). The CJPIA is
comprised of 112 California public entities and is organized under a joint powers agreement pursuant to
California Government Code section 6500 et seq. The purpose of the CJPIA is to arrange and administer
programs for the pooling of self-insured losses and to purchase excess insurance or reinsurance, and to
arrange for group -purchased insurance for property and other coverage. The CJPIA pool began covering
claims of its members in 1978. Each member government has an elected official as its representative on
the Board of Directors. The Board operates through a 9 -member Executive Committee. The accounting
methods used by the CJPIA are more fully described at Note #1-K.
43
CITY OF RANCHO PALOS VERDES
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2006
NOTE #8 — INSURANCE, Continued
Self -Insurance Programs of the CJPIA
• General Liability
Each member government pays a primary deposit to cover estimated losses for a fiscal year
(claims year). Six months after the close of a fiscal year, outstanding claims are valued. A
retrospective deposit computation is then made for each open claims year. Costs are spread to
members as follows: the first $30,000 of each occurrence is charged directly to the member;
costs from $30,001 to $750,000 are pooled based on a member's share of costs under $30,000;
costs from $750,001 to $15,000,000 are pooled based on payroll. Costs of covered claims above
$15,000,000 are currently transferred to an excess insurance policy. The protection for each
member is $50,000,000 per occurrence and $50,000,000 annual aggregate.
• Workers' Compensation
Workers' Compensation. The City also participates in the workers' compensation pool
administered by the Authority. Members retain the first $50,000 of each claim. Claims are
pooled separately between public safety and non-public safety. Loss development reserves are
allocated by pool and by loss layer ($0 to $100,000 allocated by retained amount and $100,000 to
$2,000,000 by payroll). Losses from $50,000 to $100,000 and the loss development reserve
associated with losses up to $100,000 are pooled based on the member's share of losses under
$50,000. Losses from $100,000 to $2,000,000 and loss development reserves associated with
losses from $100,000 to $2,000,000 are pooled based on payroll. Costs from $2,000,000 to
$150,000,000 are transferred to an excess insurance policy. Costs in excess of $150,000,000
are pooled among the Members based on payroll. Administrative expenses are paid from the
Authority's investment earnings.
Purchased Insurance
• Environmental Insurance
The City participates in the pollution legal liability and remediation legal liability insurance, which
is available through the CJPIA. The policy covers sudden and gradual pollution of scheduled
property, streets, and storm drains owned by the City. Coverage is on a claims -made basis.
There is a $50,000 deductible. The CJPIA has a limit of $50,000,000 for the 3 -year period from
July 1, 2005 through June 30, 2008. Each member of the CJPIA has a $10,000,000 limit during
the 3 -year term of the policy.
• Property Insurance
The City participates in the all-risk property protection program of the CJPIA. Several insurance
companies underwrite this insurance protection. The City's property is currently insured
according to a schedule of covered property submitted by the City to the CJPIA. Total all-risk
property insurance coverage is $9,998,902. There is a $5,000 per loss deductible. Premiums for
the coverage are paid annually and are not subject to retroactive adjustments.
44
CITY OF RANCHO PALOS VERDES
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2006
NOTE #8 — INSURANCE, Continued
• Earthquake and Flood Insurance
The City purchases earthquake and flood insurance on a portion of its property. The earthquake
insurance is part of the property protection insurance program of the CJPIA. The City's property
currently has earthquake protection in the amount of $9,304,688. There is a deductible of 5
percent of value with a minimum deductible of $100,000. Premiums for the coverage are paid
annually and are not subject to retroactive adjustments.
Adequacy of Protection
During the past three fiscal (claims) years none of the above programs of protection have had
settlements or judgments that exceeded pooled or insured coverage. There have been no significant
reductions in pooled or insured liability coverage in the year ended June 30, 2006. As previously
described in Note #1-K, the City has no material claims, which would require loss provisions in the
financial statements.
NOTE #9 — CONTINGENCIES AND COMMITMENTS
Litigation
In the normal course of operations, the City has been named as a defendant in various claims and legal
actions. Generally, unfavorable results of these claims and legal actions are funded through the City's
participation in California Joint Powers Insurance Authority (CJPIA, see Note #8) and, as such, the City
believes that the ultimate liability for these legal actions and claims will not have a material adverse effect
on the City's financial statements. The City is also a defendant in legal actions for which the potential
losses would not be covered through participation in CJPIA. The likelihood of an unfavorable outcome or
the amount of potential losses cannot be reasonably estimated by the City for these claims at this time.
In the event of an unfavorable outcome the losses would likely be material to the City's financial
statements.
Storm Drain Failures
During the winter storms of fiscal year 2004-05 emergency repairs were required to fix sinkholes along
the City's border with the City of Los Angeles. The sink holes were created as a result of failures in the
storm drain system. One sinkhole was repaired by the City at a cost of approximately $650,000. The City
received reimbursement from the Federal Emergency Management Agency in the amount of
approximately $634,000 related to the repairs; however, it is unclear whether the final costs will be
allowable under FEMA guidelines. If the costs are not allowed, the funding would have to be returned.
Other sinkholes were repaired by Caltrans at a cost estimated to be as high as $10 million. It is unclear
whether Caltrans will seek reimbursement from the City, or in what amount, in connection with these
repairs.
The City is working with FEMA, the Federal Highway Administration (FHWA), Caltrans, and the City and
County of Los Angeles to resolve the issues of responsibility for repair and funding sources.
The repairs of the sinkholes also brought to light issues with other storm drains in the area. The City's
share of costs for preventative and/or emergency repairs, if required, is unknown.
45
CITY OF RANCHO PALOS VERDES
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2006
NOTE #9 — CONTINGENCIES AND COMMITMENTS, Continued
Excess Surplus
The Redevelopment Agency's Low/Moderate Income Housing Fund has accumulated excess surplus
fund balance as defined by the California Health and Safety Code. The Agency is required to develop a
plan to eliminate the excess surplus within the time frame allowed by the Health and Safety Code. If the
Agency does not eliminate the excess surplus in the required time frame significant penalties could be
assessed, including transferring such excess surplus to the County Housing Authority and/or the
California Department of Housing and Community Development.
NOTE #10 — PROPERTY TAXES
Under California law, property taxes are assessed and collected by the counties up to one percent of
assessed value, plus other increases approved by the voters. The property taxes go into a pool, and are
then allocated to the cities based on complex formulas. Accordingly, the City accrues only those taxes,
which are received from the county within sixty days after year-end.
Lien date
Levy date
Due date
Collection dates
NOTE #11 — DEFERRED REVENUES
March 1
June 30
November 1 and February 1
December 10 and April 10
The deferred revenues in the fund financial statements of the City of Rancho Palos Verdes as of June 30,
2006 consisted of the following:
Source
Accrued Interest from Long -Term Advances
to the Redevelopment Agency
Advance on Federal Grant
Revenue earned but not available
Total Deferred Revenues
46
General Fund
Non -major
Governmental
Funds
$ 7,616,125
112,593
57,218 $ 321,851
$ 7,785,936 $ 321,851
CITY OF RANCHO PALOS VERDES
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2006
NOTE #12 — 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).
A developer has submitted an application for a senior condominium housing project, with an affordable
housing component, which includes the City owned parcel and a neighboring private parcel. If approved,
the City anticipates transferring the City's land to the developer for construction of the housing project.
The City will recognize a gain or loss on the disposal of the land at the time a disposition and
development agreement is finalized. The fund balance in the Housing Set -Aside fund has been reserved
for an amount equal to the purchase price of the land.
NOTE #13 — OTHER REQUIRED FUND DISCLOSURES
The following fund had deficit fund balance as of June 30, 2006:
RDA Debt Service Fund $ 13,369,973
Parks/Measure A Fund $ 255,638
The City plans to finance this deficit through future revenues to the funds.
The following fund had expenditure in excess of the budget for the year ended June 30, 2006, as follows:
Budget Expenditures Excess
RDA Debt Service Fund $ 1,378,963 $ 1,561,284 $ 182,321
47
L
SUPPLEMENTARY INFORMATION
CITY OF RANCHO PALOS VERDES
JUNE 30, 2006
MAJOR FUND BUDGETARY COMPARISON SCHEDULES
Budgetary comparison statements are presented as part of the basic financial
statements for the General fund and the major Special Revenue fund as provided
for by GASB Statement No. 34. The budgetary comparison schedules for the
remaining major funds are presented to aid in additional analysis and are not a
required part of the basic financial statements.
48
CITY OF RANCHO PALOS VERDES
SCHEDULE OF REVENUES, EXPENDITURES
AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL
CAPITAL IMPROVEMENTS CAPITAL PROJECTS FUNE
FOR THE YEAR ENDED JUNE 30, 2006
REVENUES
Use of money and property
Revenue from other agencies
Total Revenues
EXPENDITURES
Capital outlay
Excess (Deficiency) of Revenues
Over Expenditures
OTHER FINANCING SOURCES (USES)
Transfers in
Transfers out
Total Other Financing Sources (Uses)
Net Change in Fund Balance
Fund Balance, Beginning of Year
Fund Balance, End of Year
Budgeted Amounts
Original Final
$ 9,600 $ 4,904,401
12,049,677
Actual
Amounts
$ 4,966,704
12,165, 867
9,600 16,954,078 17,132,571
2,221,676 20,427,399 20,067,138
(2,212,076) (3,473,321) (2,934,567)
2,185,049 2,706,323
(472,000)
2,185,049 2,234,323 3,318,161
(27,027) (1,238,998) 383,594
2,415,599 2,415,599 2,415,599
3,790,161
(472,000)
Variance with
Final Budget -
Positive
(Negative)
$ 62,303
116,190
178,493
360,261
538,754
1,083,838
1,083,838
1,622,592
$ 2,388,572 $ 1,176,601 $ 2,799,193 $ 1,622,592
49
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, 2006
REVENUES
Taxes
EXPENDITURES
Current:
Administration
Pass through to other agencies
Debt Service
Principal
Interest and fiscal charges
Total Expenditures
Net Change in Fund Balance
Fund Balance, Beginning of Year, as restated
Fund Balance, End of Year
Budgeted Amounts
Original Final
$ 615,800
14,500
130,900
15,000
980,000
1,140,400
(524,600)
(12,478,093)
$(13,002,693)
50
Variance with
Final Budget -
Actual Positive
Amounts (Negative)
$ 615,800 $ 669,404 $ 53,604
14,500 12,126 2,374
199,829
199,695 (184,695)
1,149, 634
1,561,284 (182,321)
199,829
15,000
1,149, 634
1,378,963
(763,163) (891,880) (128,717)
(12,478,093) (12,478,093)
$(13,241,256) $(13,369,973) $ (128,717)
CITY OF RANCHO PALOS VERDES
JUNE 30, 2006
NONMAJOR GOVERNMENTAL FUNDS
Special Revenues Fund Descriptions
Special Revenue Funds are used to account for taxes and other revenues set aside in accordance with
law or administrative regulation for a specific purpose.
Air Quality Management — to account for AB2766 fees received to fund programs to reduce air pollution
from motor vehicles.
Community Development Block Grant (CDBG) — to account for Federal Grants received from the
Department of Housing and Urban Development (HUD).
El Prado — to account for taxes collected to maintain and service existing and proposed improvements.
Redevelopment Aaencv (RDA) — Housing Set -Aside — to account for the portion of Redevelopment tax
increment monies which is a requirement under California Redevelopment Law, Section 33334, to be
set-aside for the development of low and moderate income housing.
Proposition A — to account for the City's share of an additional one-half percent sales tax designated to
fund certain public transportation orientated projects.
Proposition C — to account for sales taxes received from the County and used to support public transit
and related services.
Beautification — to account for monies received for the City's recycling program used for community
improvement, grants and promotion of recycling.
Waste Reduction — to account for AB939 fees received for state mandated waste reduction and
recycling plans and programs.
Public Safety Grants — to account for federal grant funds for local law enforcement supplemental
services, AB3229 funds used for additional law enforcement services and public safety technology
equipment.
1972 Act Landscaping and Liahtina District — to account for revenues and costs associated with the
City's landscaping and lighting district.
1911 Act Liahtina 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 (JPIA) — Portuguese Bend — to account for maintenance and
repairs of landslide abatement improvements in the Portuguese Bend Project area.
Habitat Restoration — to account for fees paid by developers for conservation easements to be used
exclusively for future habitat restoration efforts on City owned property.
51
CITY OF RANCHO PALOS VERDES
JUNE 30, 2006
NONMAJOR GOVERNMENTAL FUNDS
Special Revenues Fund Descriptions. Continued
Subregion One Maintenance — to account for monies used to maintain public improvements and habitat
areas dedicated to the City upon completion of the Subregion One residential development project.
Measure A — to account for the voter approved 1992 and 1996 Measure A funds and other state and
county grants used for the acquisition of open space and park improvements.
Abalone Cove Sewer Assessment District — to account for property assessments used to partially pay
for operation and maintenance of the Abalone Cove sewer system.
Capital Proiects 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 Aaencv (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 Aaencv (RDA) — Portuguese Bend — to account for monies used for landslide
abatement in the Portuguese Bend Project Area.
Utility Underaroundina — to account for the accumulation of monies transferred from the General fund,
to be used for relocating utility poles and lines on arterial roadways underground, and provide residents
assistance with utility undergrounding in residential areas of the City.
Roadway Beautification — to account for the accumulation of monies transferred from the General and
Recycling funds to be used for landscape improvements along the City's roadways.
52
CITY OF RANCHO PALOS VERDES
JUNE 30, 2006
NONMAJOR GOVERNMENTAL FUNDS
Permanent Fund Description
Permanent Funds are used to account for resources legally restricted to the extent that only earnings,
and not principal, may be used for purposes that support the City's programs.
Joint Powers Improvement Authority (JPIA) — Abalone Cove — to account for monies received as part of
a July 1991 Reimbursement and Settlement Agreement with the County of Los Angeles. As a part of
this agreement the Authority received a $1,000,000 deposit of nonexpendable principal. The interest
earnings are used to pay for maintenance and repair of Abalone Cove landslide abatement
improvements.
53
CITY OF RANCHO PALOS VERDES
NON -MAJOR GOVERNMENTAL FUNDS
COMBINING BALANCE SHEET
JUNE 30, 2006
ASSETS
Cash and cash equivalents
Receivable
Taxes
Interest
Other
Prepaid items
Land held for development
Total Assets
LIABILITIES AND FUND BALANCES
Special Revenue Funds
Air Quality
Management CDBG El Prado
$ 31,732
799
13,611 $
41,099
8,192
$ 5,979
136
62
$ 46,142 $ 49,291 $ 6,177
LIABILITIES
Accounts payable and accrued liabilities $ 8,150 $ 49
Due to other funds 41,136
Deferred revenue
Total Liabilities - 49,286 49
FUND BALANCES
Reserved for:
Reimbursement settlement agreement
Prepaid items
Land development
Housing set-aside
Unreserved:
Designated for continuing appropriations
Unreserved, undesignated and reported in:
Special revenue funds
Capital projects funds
Permanent funds
$ 46,142
8,192
(8,187) 6,128
Total Fund Balances 46,142 5 6,128
Total Liabilities and
Fund Balances $ 46,142 $ 49,291 $ 6,177
54
CONTINUED ON NEXT PAGE
Special Revenue Funds
Redevelopment
Agency -
Housing Proposition Proposition Waste
Set -Aside A C Beautification Reduction
$ 1,310,505 $ 925,562 $ 1,315,351 $ 951,457 $ 475,024
2,043
14,033 9,263 15,599 10,162 5,794
70,823 23,416
702,392
$ 2,028,973 $ 934,825 $ 1,330,950 $ 1,032,442 $ 504,234
$
479 $ 665 $
65 $ 5,829 $ 57,235
479 665 65 5,829 57,235
$ 702,392
1,226,581
99,521 97,621 45,252
934,160 $ 1,330,885 928,992 401,747
2,028,494 934,160 1,330,885 1,026,613 446,999
$ 2,028,973 $ 934,825 $ 1,330,950 $ 1,032,442 $ 504,234
55
CITY OF RANCHO PALOS VERDES
NON -MAJOR GOVERNMENTAL FUNDS
COMBINING BALANCE SHEET (CONTINUED)
JUNE 30, 2006
ASSETS
Special Revenue Funds
Public
Safety
Grants 1972 Act 1911 Act
Cash and cash equivalents $ 66,725 $ 59,595 $ 1,449,623
Receivable
Taxes 12,700 35,270
Interest 1,809 3,511 15,758
Other
Prepaid items
Land held for development
Total Assets $ 68,534 $ 75,806 $ 1,500,651
LIABILITIES AND FUND BALANCES
LIABILITIES
Accounts payable and accrued liabilities $ 3,056 $ 40,953
Due to other funds
Deferred revenue
Total Liabilities
3,056 40,953
FUND BALANCES
Reserved for:
Reimbursement settlement agreement
Prepaid items
Land development
Housing set-aside
Unreserved:
Designated for continuing appropriations $ 45,816
Unreserved, undesignated and reported in:
Special revenue funds 22,718 72,750 1,459,698
Capital projects funds
Permanent funds
Total Fund Balances 68,534 72,750 1,459,698
Total Liabilities and
Fund Balances $ 68,534 $ 75,806 $ 1,500,651
56
CONTINUED ON NEXT PAGE
Special Revenue Funds
Joint Powers
Improvement Abalone Cove
Authority - Sewer
Portuguese Habitat Subregion One Assessment RPV TV
Bend Restoration Maintenance Measure A District Channel 33
$ 262,932 $ 305,298 $ 728,382 $ 62,168 $ 2,397
723
3,249 3,720 8,074 $ 774 652 54
16,838 359,039
$ 266,181 $ 325,856 $ 736,456 $ 359,813 $ 63,543 $ 2,451
$ 10,353 $ 27,494 $ 9,277 $ 14,724
$ 293,600
321,851
10,353 27,494 9,277 615,451 14,724
53,200 285,914 27,879
202,628 12,448 727,179 (255,638) 20,940 2,451
255,828 298,362 727,179 (255,638) 48,819 2,451
$ 266,181 $ 325,856 $ 736,456 $ 359,813 $ 63,543 $ 2,451
57
CITY OF RANCHO PALOS VERDES
NON -MAJOR GOVERNMENTAL FUNDS
COMBINING BALANCE SHEET (CONTINUED)
JUNE 30, 2006
Capital Projects Funds
Redevelopment
Agency -
Abalone Environmental
ASSETS Bikeways Cove Excise Tax Quimby
Cash and cash equivalents $ 25,554 $ 5,351 $ 216,099 $ 11,929
Receivable
Taxes
Interest 279 58 9,090 5,912
Other
Prepaid items
Land held for development
Total Assets
LIABILITIES AND FUND BALANCES
LIABILITIES
Accounts payable and accrued liabilities
Due to other funds
Deferred revenue
Total Liabilities
FUND BALANCES
Reserved for:
Reimbursement settlement agreement
Prepaid items
Land development
Housing set-aside
Unreserved:
Designated for continuing appropriations
Unreserved, undesignated and reported in:
Special revenue funds
Capital projects funds
Permanent funds
Total Fund Balances
Total Liabilities and
Fund Balances
$ 25,833 $ 5,409 $ 225,189 $ 17,841
$ 25,833 $ 5,409 $ 225,189 $ 17,841
25,833 5,409 225,189 17,841
$ 25,833 $ 5,409 $ 225,189 $ 17,841
58
Capital Projects Funds
Redevelopment
Agency -
Affordable Portuguese
Housing Bend
$ 1,065,810 $ 381,731
11,573
4,109
5,895
Utility Roadway
Undergrounding Beautification
Permanent
Fund
Joint Powers
Improvement
Authority -
Abalone
Cove
$ 248,143 $ 84,950 $ 1,396,021 $
2,693
4,693
15,164
$ 1,077,383 $ 391,735 $ 250,836 $ 89,643 $ 1,411,185 $
$ 1,077,383
1,077,383
$ 1,077,383 $
561
561
5,895
385,279 $
391,174
391,735 $
$ 7,235 $
- 7,235
1,000,000
74,969
250,836 $ 89,643
250,836 89,643 1,403,950
250,836 $ 89,643 $ 1,411,185 $
59
328,981
Total
Non -major
Governmental
Funds
11, 388, 318
50,872
146,884
524,826
14,087
702,392
12,827,379
186,125
334,736
321,851
842,712
1,000,000
14,087
702,392
1,226,581
730,172
5,905,041
2,077,413
328,981
11,984,667
12,827,379
CITY OF RANCHO PALOS VERDES
NON -MAJOR GOVERNMENTAL FUNDS
COMBINING STATEMENT OF REVENUES, EXPENDITURES
AND CHANGES IN FUND BALANCES
YEAR ENDED JUNE 30, 2006
Special Revenue Funds
Air Quality
Management CDBG El Prado
REVENUES
Taxes $ 1,659
Use of money and property $ 2,001 191
Revenue from other agencies 66,123 $ 167,042
Other revenues
Total Revenues 68,124 167,042 1,850
EXPENDITURES
Current:
Administration
Public works 7,819 268
Planning, building and
code enforcement
Capital outlay 135,274
Total Expenditures
Excess (Deficiency) of Revenues Over
(Under) Expenditures
Other Financing Sources (Uses):
7,819 135,274 268
60,305 31,768 1,582
Transfers in 65,979
Transfers out (48,515) (31,763)
Total Other Financing Sources (Uses) (48,515) 34,216
Net Change in Fund Balances 11,790 65,984 1,582
FUND BALANCES, Beginning of Year 34,352 (65,979) 4,546
FUND BALANCES, End of Year $ 46,142 $ 5 $ 6,128
60
CONTINUED ON NEXT PAGE
Special Revenue Funds
Redevelopment
Agency -
Housing Proposition Proposition Waste
Set -Aside A C Beautification Reduction
$ 167,906
45,707 $ 28,223 $ 47,548 $ 305,835 $ 51,089
689,198 606,462 68,568
213,613 717,421 654,010 305,835 119,657
501,949 2,944 131,780 153,670
479
479 501,949 2,944 131,780 153,670
213,134 215,472 651,066 174,055 (34,013)
(15,698) (218,602) (38,000)
- (15,698) (218,602) - (38,000)
213,134 199,774 432,464 174,055 (72,013)
1,815,360 734,386 898,421 852,558 519,012
$ 2,028,494 $ 934,160 $ 1,330,885 $ 1,026,613 $ 446,999
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, 2006
Special Revenue Funds
Public
Safety
Grants 1972 Act 1911 Act
REVENUES
Taxes $ 253,950 $ 432,812
Use of money and property $ 5,834 10,044 49,807
Revenue from other agencies 100,000
Other revenues
Total Revenues 105,834
263,994 482,619
EXPENDITURES
Current:
Administration
Public works 56,664 282,412
Planning, building and
code enforcement
Capital outlay
Total Expenditures - 56,664 282,412
Excess (Deficiency) of Revenues Over
(Under) Expenditures 105,834 207,330 200,207
Other Financing Sources (Uses):
Transfers in
Transfers out (100,000) (275,805)
Total Other Financing Sources (Uses) (100,000) (275,805)
Net Change in Fund Balances 5,834 (68,475) 200,207
FUND BALANCES, Beginning of Year 62,700 141,225 1,259,491
FUND BALANCES, End of Year $ 68,534 $ 72,750 $ 1,459,698
62
CONTINUED ON NEXT PAGE
Special Revenue Funds
Joint Powers
Improvement Abalone Cove
Authority - Sewer
Portuguese Habitat Subregion One Parks/ Assessment RPV TV
Bend Restoration Maintenance Measure A District Channel 33
$ 41,609
$ 11,992 $ 53,959 $ 28,521 $ 2,093 1,885 $ 5,476
16,838 45,338
11,992 70,797 28,521 47,431 43,494 5,476
3,025
133,405 149,772 99,947 51,817
133,405 149,772 99,947 - 51,817 3,025
(121,413) (78,975) (71,426) 47,431 (8,323) 2,451
116,000 76,752 10,700
(359,061)
116,000 76,752 - (359,061) 10,700
(5,413) (2,223) (71,426) (311,630) 2,377 2,451
261,241 300,585 798,605 55,992 46,442
$ 255,828 $ 298,362 $ 727,179 $ (255,638) $ 48,819 $ 2,451
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, 2006
Capital Projects
Redevelopment
Agency -
Abalone Environmental
Bikeways Cove Excise Tax Quimby
REVENUES
Taxes
Use of money and property $ 946 $ 199 $ 112,788 $ 28,981
Revenue from other agencies
Other revenues
Total Revenues 946 199 112,788 28,981
EXPENDITURES
Current:
Administration
Public works
Planning, building and
code enforcement
Capital outlay
373
Total Expenditures 373
Excess (Deficiency) of Revenues Over
(Under) Expenditures 573 199 112,788 28,981
Other Financing Sources (Uses):
Transfers in
Transfers out (624,452) (532,511)
Total Other Financing Sources (Uses) - (624,452) (532,511)
Net Change in Fund Balances 573 199 (511,664) (503,530)
FUND BALANCES, Beginning of Year 25,260 5,210 736,853 521,371
FUND BALANCES, End of Year $ 25,833 $ 5,409 $ 225,189 $ 17,841
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
$ 897,936
$ 39,041 $ 13,728 $ 9,089 $ 15,831 $ 53,315 924,123
1,759,569
50,004 50,004
39,041 63,732 9,089 15,831 53,315 3,631,632
3,025
17,671 86,152 1,676,643
479
135,274
- 17,671 - - 86,152 1,815,421
39,041 46,061 9,089 15,831 (32,837) 1,816,211
10,500 279,931
(347,228) (2,591,635)
- - - (347,228) 10,500 (2,311,704)
39,041 46,061 9,089 (331,397) (22,337) (495,493)
1,038,342 345,113 241,747 421,040 1,426,287 12,480,160
$ 1,077,383 $ 391,174 $ 250,836 $ 89,643 $ 1,403,950 $ 11,984,667
65
CITY OF RANCHO PALOS VERDES
SCHEDULE OF REVENUES, EXPENDITURES
AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL
AIR QUALITY MANAGEMENT SPECIAL REVENUE FUNE
FOR THE YEAR ENDED JUNE 30, 2006
Variance with
Final Budget -
Budgeted Amounts Actual Positive
Original Final Amounts (Negative)
REVENUES
Use of money and property $ 1,100 $ 1,100 $ 2,001 $ 901
Revenue from other agencies 52,000 52,000 66,123 14,123
Total Revenues 53,100 53,100 68,124 15,024
EXPENDITURES
Current:
Public works 8,000 8,000 7,819 181
Excess (Deficiency) of Revenues
Over Expenditures 45,100 45,100 60,305 15,205
OTHER FINANCING SOURCES (USES)
Transfers out (34,000) (54,000) (48,515) 5,485
Net Change in Fund Balance 11,100 (8,900) 11,790 20,690
Fund Balance, Beginning of Year 34,352 34,352 34,352
Fund Balance, End of Year $ 45,452 $ 25,452 $ 46,142 $ 20,690
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, 2006
REVENUES
Revenue from other agencies
EXPENDITURES
Capital outlay
Total Expenditures
Excess (Deficiency) of Revenues
Over Expenditures
OTHER FINANCING SOURCES (USES)
Transfers in
Transfers out
Net Change in Fund Balance
Fund Balance, Beginning of Year
Fund Balance, End of Year
Budgeted Amounts Actual
Original Final Amounts
Variance with
Final Budget -
Positive
(Negative)
$ 221,800 $ 221,800 $ 167,042 $ (54,758)
190,000 269,000 135,274
190,000 269,000 135,274
31,800 (47,200) 31,768
(31,800) (31,800)
(79,000)
(65,979) (65,979)
$ (65,979) $ (144,979)
67
65,979
(31,763)
133,726
133,726
78,968
65,979
37
65,984 144,984
(65,979)
$ 5 $ 144,984
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, 2006
Variance with
Final Budget -
Budgeted Amounts Actual Positive
Original Final Amounts (Negative)
REVENUES
Taxes $ 1,200 $ 1,200 $ 1,659 $ 459
Use of money and property 100 100 191 91
Total Revenues 1,300 1,300 1,850 550
EXPENDITURES
Current:
Public works 900 900 268 632
Net Change in Fund Balance 400 400 1,582 1,182
Fund Balance, Beginning of Year 4,546 4,546 4,546
Fund Balance, End of Year $ 4,946 $ 4,946 $ 6,128 $ 1,182
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, 2006
Variance with
Final Budget -
Budgeted Amounts Actual Positive
Original Final Amounts (Negative)
REVENUES
Taxes $ 153,900 $ 153,900 $ 167,906 $ 14,006
Use of money and property 25,900 25,900 45,707 19,807
Total Revenues 179,800 179,800 213,613 33,813
EXPENDITURES
Current:
Planning, building and
code enforcement 50,000 479 479
Total Expenditures 50,000 479 479
Net Change in Fund Balance 129,800 179,321 213,134 33,813
Fund Balance, Beginning of Year 1,815,360 1,815,360 1,815,360
Fund Balance, End of Year $ 1,945,160 $ 1,994,681 $ 2,028,494 $ 33,813
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, 2006
REVENUES
Use of money and property
Revenue from other agencies
Total Revenues
EXPENDITURES
Current:
Public works
Excess of Revenues
Over Expenditures
OTHER FINANCING SOURCES (USES)
Transfers out
Net Change in Fund Balance
Fund Balance, Beginning of Year
Fund Balance, End of Year
Variance with
Final Budget -
Budgeted Amounts Actual Positive
Original Final Amounts (Negative)
$ 16,000 $ 16,000 $ 28,223 $ 12,223
600,000 600,000 689,198 89,198
616,000 616,000 717,421 101,421
507,200 510,222 501,949 8,273
108,800 105,778 215,472 109,694
(16,000) (16,000) (15,698) 302
92,800 89,778 199,774 109,996
734,386 734,386 734,386
$ 827,186 $ 824,164 $ 934,160 $ 109,996
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, 2006
REVENUES
Use of money and property
Revenue from other agencies
Total Revenues
EXPENDITURES
Current:
Public works
Excess (Deficiency) of Revenues
Over Expenditures
OTHER FINANCING SOURCES (USES)
Transfers out
Net Change in Fund Balance
Fund Balance, Beginning of Year
Fund Balance, End of Year
Budgeted Amounts
Original Final
$ 12,900 $ 12,900
500,000 500,000
512,900
3,000
509,900
(460,500)
49,400
898,421
$ 947,821
71
512,900
3,000
Actual
Amounts
$ 47,548
606,462
654,010
2,944
509,900 651,066
Variance with
Final Budget -
Positive
(Negative)
$ 34,648
106,462
141,110
56
141,166
(218,602) (218,602)
291,298 432,464 141,166
898,421 898,421
$ 1,189,719 $1,330,885 $ 141,166
CITY OF RANCHO PALOS VERDES
SCHEDULE OF REVENUES, EXPENDITURES
AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL
BEAUTIFICATION SPECIAL REVENUE FUND
FOR THE YEAR ENDED JUNE 30, 2006
Budgeted Amounts
Original Final
REVENUES
Use of money and property $ 242,450 $ 242,450
EXPENDITURES
Current:
Public works
Net Change in Fund Balance
Fund Balance, Beginning of Year
Fund Balance, End of Year
231,300 133,679
11,150 108,771
852,558 852,558
Actual
Amounts
Variance with
Final Budget -
Positive
(Negative)
$ 305,835 $ 63,385
131,780
174,055
852,558
1,899
65,284
$ 863,708 $ 961,329 $ 1,026,613 $ 65,284
72
CITY OF RANCHO PALOS VERDES
SCHEDULE OF REVENUES, EXPENDITURES
AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL
WASTE REDUCTION SPECIAL REVENUE FUND
FOR THE YEAR ENDED JUNE 30, 2006
REVENUES
Use of money and property
Revenue from other agencies
Total Revenues
EXPENDITURES
Current:
Public works
Excess (Deficiency) of Revenues
Over Expenditures
OTHER FINANCING USES
Transfers out
Net Change in Fund Balance
Fund Balance, Beginning of Year
Fund Balance, End of Year
Budgeted Amounts
Original Final
$ 36,100
60,000
96,100
$ 36,100
60,000
Actual
Amounts
$ 51,089
68,568
96,100 119,657
150,400 185,148 153,670
(54,300) (89,048) (34,013)
Variance with
Final Budget -
Positive
(Negative)
$ 14,989
8,568
23,557
31,478
55,035
(50,000) (100,000) (38,000) 62,000
(104,300) (189,048) (72,013) 117,035
519,012 519,012 519,012
$ 414,712 $ 329,964 $ 446,999 $ 117,035
73
CITY OF RANCHO PALOS VERDES
SCHEDULE OF REVENUES, EXPENDITURES
AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL
PUBLIC SAFETY GRANTS SPECIAL REVENUE FUNE
FOR THE YEAR ENDED JUNE 30, 2006
Variance with
Final Budget -
Budgeted Amounts Actual Positive
Original Final Amounts (Negative)
REVENUES
Use of money and property $ 400 $ 400 $ 5,834 $ 5,434
Revenue from other agencies 100,000 100,000 100,000
Total Revenues 100,400 100,400 105,834 5,434
OTHER FINANCING SOURCES (USES)
Transfers out (100,000) (100,000) (100,000)
Net Change in Fund Balance 400 400 5,834 5,434
Fund Balance, Beginning of Year 62,700 62,700 62,700
Fund Balance, End of Year $ 63,100 $ 63,100 $ 68,534 $ 5,434
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, 2006
Variance with
Final Budget -
Budgeted Amounts Actual Positive
Original Final Amounts (Negative)
REVENUES
Taxes $ 325,000 $ 325,000 $ 253,950 $ (71,050)
Use of money and property 3,400 3,400 10,044 6,644
Total Revenues 328,400 328,400 263,994 (64,406)
EXPENDITURES
Current:
Public works 58,200 58,200 56,664 1,536
Excess of Revenues
Over Expenditures 270,200 270,200 207,330 (62,870)
OTHER FINANCING SOURCES (USES)
Transfers out (285,000) (285,000) (275,805) 9,195
Net Change in Fund Balance (14,800) (14,800) (68,475) (53,675)
Fund Balance, Beginning of Year 141,225 141,225 141,225
Fund Balance, End of Year $ 126,425 $ 126,425 $ 72,750 $ (53,675)
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, 2006
Variance with
Final Budget -
Budgeted Amounts Actual Positive
Original Final Amounts (Negative)
REVENUES
Taxes $ 375,000 $ 375,000 $ 432,812 $ 57,812
Use of money and property 28,200 28,200 49,807 21,607
Total Revenues 403,200 403,200 482,619 79,419
EXPENDITURES
Current:
Public works 369,400 369,400 282,412 86,988
Net Change in Fund Balance 33,800 33,800 200,207 166,407
Fund Balance, Beginning of Year 1,259,491 1,259,491 1,259,491
Fund Balance, End of Year $1,293,291 $ 1,293,291 $ 1,459,698 $ 166,407
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, 2006
REVENUES
Use of money and property
EXPENDITURES
Current:
Public works
Excess (Deficiency) of Revenues
Over Expenditures
Variance with
Final Budget -
Budgeted Amounts Actual Positive
Original Final Amounts (Negative)
$ 5,900 $ 5,900 $ 11,992 $ 6,092
92,400 208,500 133,405 75,095
(86,500) (202,600) (121,413) 81,187
OTHER FINANCING SOURCES (USES)
Transfers in 91,500 91,500 116,000 24,500
Net Change in Fund Balance 5,000 (111,100) (5,413) 105,687
Fund Balance, Beginning of Year 261,241 261,241 261,241
Fund Balance, End of Year $ 266,241 $ 150,141 $ 255,828 $ 105,687
77
CITY OF RANCHO PALOS VERDES
SCHEDULE OF REVENUES, EXPENDITURES
AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL
HABITAT RESTORATION SPECIAL REVENUE FUNE
FOR THE YEAR ENDED JUNE 30, 2006
REVENUES
Use of money and property
Revenue from other agencies
Total Revenues
EXPENDITURES
Capital outlay
Excess (Deficiency) of Revenues
Over Expenditures
OTHER FINANCING SOURCES
Transfers in
Variance with
Final Budget -
Budgeted Amounts Actual Positive
Original Final Amounts (Negative)
$ 1,900 $ 1,900 $ 53,959 $ 52,059
100,000 16,838 (83,162)
1,900 101,900 70,797 (31,103)
100,000 149,772 14 9, 772
(98,100) (47,872) (78,975) (31,103)
76,752 76,752 76,752
Net Change in Fund Balance (21,348) 28,880 (2,223) (31,103)
Fund Balance, Beginning of Year 300,585 300,585 300,585
Fund Balance, End of Year $ 279,237 $ 329,465 $ 298,362 $ (31,103)
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, 2006
Variance with
Final Budget -
Budgeted Amounts Actual Positive
Original Final Amounts (Negative)
REVENUES
Use of money and property $ 20,200 $ 20,200 $ 28,521 $ 8,321
EXPENDITURES
Current:
Public works 50,000 102,000 99,947 2,053
Net Change in Fund Balance (29,800) (81,800) (71,426) 10,374
Fund Balance, Beginning of Year 798,605 798,605 798,605
Fund Balance, End of Year $ 768,805 $ 716,805 $ 727,179 $ 10,374
79
CITY OF RANCHO PALOS VERDES
SCHEDULE OF REVENUES, EXPENDITURES
AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL
PARKS/MEASURE A SPECIAL REVENUE FUNE
FOR THE YEAR ENDED JUNE 30, 2006
Variance with
Final Budget -
Budgeted Amounts Actual Positive
Original Final Amounts (Negative)
REVENUES
Use of money and property $ 1,500 $ 1,500 $ 2,093 $ 593
Revenue from other agencies 41,000 181,000 45,338 (135,662)
Total Revenues
42,500 182,500 47,431 (135,069)
OTHER FINANCING SOURCES (USES)
Transfers out (55,500) (359,061) (359,061)
Net Change in Fund Balance (13,000) (176,561) (311,630) (135,069)
Fund Balance, Beginning of Year 55,992 55,992 55,992
Fund Balance, End of Year $ 42,992 $ (120,569) $ (255,638) $ (135,069)
80
CITY OF RANCHO PALOS VERDES
SCHEDULE OF REVENUES, EXPENDITURES
AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL
ABALONE COVE SEWER ASSESSMENT DISTRICT SPECIAL REVENUE FUN(
FOR THE YEAR ENDED JUNE 30, 2006
Variance with
Final Budget -
Budgeted Amounts Actual Positive
Original Final Amounts (Negative)
REVENUES
Taxes $ 40,000 $ 40,000 $ 41,609 $ 1,609
Use of money and property 300 300 1,885 1,585
Total Revenues
EXPENDITURES
Current:
Public works
Excess (Deficiency) of Revenues
Over Expenditures
OTHER FINANCING SOURCES (USES)
Transfers in
Net Change in Fund Balance
Fund Balance, Beginning of Year
Fund Balance, End of Year
40,300 40,300 43,494 3,194
49,600 51,817 51,817
(9,300) (11,517) (8,323) 3,194
10,700 10,700 10,700
1,400 (817) 2,377 3,194
46,442 46,442 46,442
$ 47,842 $ 45,625 $ 48,819 $ 3,194
81
CITY OF RANCHO PALOS VERDES
SCHEDULE OF REVENUES, EXPENDITURES
AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL
RPV TV CHANNEL 33 SPECIAL REVENUE FUND
FOR THE YEAR ENDED JUNE 30, 2006
Variance with
Final Budget -
Budgeted Amounts Actual Positive
Original Final Amounts (Negative)
REVENUES
Use of money and property $ 5,476 $ 5,476
EXPENDITURES
Current:
Administration $ 3,025 3,025
Net Change in Fund Balance (3,025) 2,451 5,476
Fund Balance, Beginning of Year
Fund Balance, End of Year $ $ (3,025) $ 2,451 $ 5,476
82
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, 2006
REVENUES
Use of money and property
EXPENDITURES
Current:
Public works
Budgeted Amounts
Original Final
$ 373
Net Change in Fund Balance (373)
Fund Balance, Beginning of Year $ 25,260 $ 25,260
Fund Balance, End of Year $ 25,260 $ 24,887 $
Actual
Amounts
$ 946
83
Variance with
Final Budget -
Positive
(Negative)
$ 946
373
573 946
25,260
25,833 $ 946
CITY OF RANCHO PALOS VERDES
SCHEDULE OF REVENUES, EXPENDITURES
AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL
RDA ABALONE COVE CAPITAL PROJECTS FUNE
FOR THE YEAR ENDED JUNE 30, 2006
Variance with
Final Budget -
Budgeted Amounts Actual Positive
Original Final Amounts (Negative)
REVENUES
Use of money and property $ 199 $ 199
Net Change in Fund Balance 199 199
Fund Balance, Beginning of Year $ 5,210 $ 5,210 5,210
Fund Balance, End of Year $ 5,210 $ 5,210 $ 5,409 $ 199
84
CITY OF RANCHO PALOS VERDES
SCHEDULE OF REVENUES, EXPENDITURES
AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL
ENVIRONMENTAL EXCISE TAX CAPITAL PROJECTS FUN(
FOR THE YEAR ENDED JUNE 30, 2006
Budgeted Amounts
Original Final
REVENUES
Use of money and property $ 201,800 $ 58,800
OTHER FINANCING USES
Transfers out
Net Change in Fund Balance
Fund Balance, Beginning of Year
Fund Balance, End of Year
Actual
Amounts
Variance with
Final Budget -
Positive
(Negative)
$ 112,788 $ 53,988
(624,452) (624,452)
201,800 (565,652) (511,664) 53,988
736,853 736,853 736,853
$ 938,653 $ 171,201 $ 225,189 $ 53,988
85
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, 2006
Budgeted Amounts
Original Final
REVENUES
Use of money and property $ 12,800 $ 12,800
OTHER FINANCING SOURCES (USES)
Transfers out
Net Change in Fund Balance
Fund Balance, Beginning of Year
Fund Balance, End of Year
Actual
Amounts
$ 28,981
(532,511) (532,511)
12,800 (519,711) (503,530)
521,371 521,371
521,371
Variance with
Final Budget -
Positive
(Negative)
$ 16,181
16,181
$ 534,171 $ 1,660 $ 17,841 $ 16,181
86
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, 2006
Variance with
Final Budget -
Budgeted Amounts Actual Positive
Original Final Amounts (Negative)
REVENUES
Use of money and property $ 49,500 $ 49,500 $ 39,041 $ (10,459)
Net Change in Fund Balance 49,500 49,500 39,041 (10,459)
Fund Balance, Beginning of Year 1,038,342 1,038,342 1,038,342
Fund Balance, End of Year $ 1,087,842 $ 1,087,842 $ 1,077,383 $ (10,459)
87
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, 2006
REVENUES
Use of money and property
Other revenues
Total Revenues
EXPENDITURES
Current:
Public works
Variance with
Final Budget -
Budgeted Amounts Actual Positive
Original Final Amounts (Negative)
$ 7,400 $ 7,400 $ 13,728 $ 6,328
5,000 5,000 50,004 45,004
12,400 12,400 63,732 51,332
24,500 24,500
17,671 6,829
Net Change in Fund Balance (12,100) (12,100) 46,061 58,161
Fund Balance, Beginning of Year 345,113 345,113 345,113
Fund Balance, End of Year $ 333,013 $ 333,013 $ 391,174 $ 58,161
88
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, 2006
Variance with
Final Budget -
Budgeted Amounts Actual Positive
Original Final Amounts (Negative)
REVENUES
Use of money and property $ 6,000 $ 6,000 $ 9,089 $ 3,089
Net Change in Fund Balances 6,000 6,000 9,089 3,089
Fund Balance, Beginning of Year 241,747 241,747 241,747
Fund Balance, End of Year $ 247,747 $ 247,747 $ 250,836 $ 3,089
89
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, 2006
REVENUES
Use of money and property
Variance with
Final Budget -
Budgeted Amounts Actual Positive
Original Final Amounts (Negative)
$ 1,900 $ 1,900 $ 15,831 $ 13,931
OTHER FINANCING SOURCES (USES)
Transfers out (347,228) (347,228)
Net Change in Fund Balances 1,900 (345,328) (331,397) 13,931
Fund Balance, Beginning of Year 421,040 421,040 421,040
Fund Balance, End of Year $ 422,940 $ 75,712 $ 89,643 $ 13,931
90
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, 2006
REVENUES
Use of money and property
Variance with
Final Budget -
Budgeted Amounts Actual Positive
Original Final Amounts (Negative)
$ 33,600 $ 33,600 $ 53,315 $ 19,715
EXPENDITURES
Current:
Public works 108,400 123,131 86,152 36,979
Excess (Deficiency) of Revenues
Over Expenditures (74,800) (89,531) (32,837) 56,694
OTHER FINANCING SOURCES (USES)
Transfers in 10,500 10,500
Net Change in Fund Balance (74,800) (89,531) (22,337) 67,194
Fund Balance, Beginning of Year 1,426,287 1,426,287 1,426,287
Fund Balance, End of Year $ 1,351,487 $ 1,336,756 $ 1,403,950 $ 67,194
91
CITY OF RANCHO PALOS VERDES
JUNE 30, 2006
INTERNAL SERVICE FUNDS DESCRIPTIONS
The Internal Service Funds are used to finance and account for goods and services provided by one
City department to other City departments on a cost -reimbursement basis, including depreciation.
Equipment Replacement — to account for purchases, replacement and maintenance of certain
equipment items on behalf of all City departments.
Building Replacement — to account for the accumulation of funds transferred from the General Fund for
replacement of certain buildings on behalf of the City.
Employee Benefits — to account for employee benefit costs on behalf of all City departments.
92
CITY OF RANCHO PALOS VERDES
INTERNAL SERVICE FUNDS
COMBINING STATEMENT OF NET ASSETS
JUNE 30, 2006
Equipment Building Employee
Replacement Replacement Benefits Totals
ASSETS
Current Assets
Cash and cash equivalents $ 2,894,854 $ 1,600,733 $ 483,917 $ 4,979,504
Receivables
Interest 30,530 17,379 4,076 51,985
Total Current Assets 2,925,384 1,618,112 487,993 5,031,489
Noncurrent Assets
Capital assets
Property and equipment
Accumulated depreciation
Total Noncurrent Assets
Total Assets
LIABILITIES
Current Liabilities
Accounts payable and accrued liabilities
1,161,074 1,161,074
(812,173) (812,173)
348,901 - - 348,901
3,274,285 1,618,112 487,993 5,380,390
84,151 38,375 23,213 145,739
NET ASSETS
Invested in capital assets 348,901 348,901
Unrestricted 2,841,233 1,579,737 464,780 4,885,750
Total Net Assets $ 3,190,134 $ 1,579,737 $ 464,780 $ 5,234,651
93
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, 2006
OPERATING REVENUES
Charges for services
Equipment Building Employee
Replacement Replacement Benefits
Totals
$ 449,266 $ 1,350,700 $ 1,799,966
Total Operating Revenues 449,266 - 1,350,700 1,799,966
OPERATING EXPENSES
Personnel services 1,172,979 1,172,979
Material and supplies 66,164 66,164
Maintenance 195,088 $ 56,885 251,973
Depreciation 205,889 205,889
Total Operating Expenses 467,141 56,885 1,172,979 1,697,005
Operating Income (Loss) (17,875) (56,885) 177,721 102,961
NONOPERATING REVENUES
Interest income 103,643 59,173 7,271 170,087
Income (Loss) Before
Transfers 85,768 2,288 184,992 273,048
TRANSFERS IN 48,515 100,000 148,515
Change in Net Assets 134,283 102,288 184,992 421,563
Net Assets, Beginning of Year 3,055,851 1,477,449 279,788 4,813,088
Net Assets, Ending of Year $ 3,190,134 $ 1,579,737 $ 464,780 $ 5,234,651
94
CITY OF RANCHO PALOS VERDES
INTERNAL SERVICE FUNDS
COMBINING STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED JUNE 30, 2006
CASH FLOWS FROM OPERATING ACTIVITIES
Internal activity - payments from other funds
Payments to suppliers
NET CASH PROVIDED (USED) BY
OPERATING ACTIVITIES
CASH FLOWS FROM CAPITAL AND
RELATED FINANCING ACTIVITIES
Acquisition of capital assets
CASH FLOWS FROM NONCAPITAL
FINANCING ACTIVITIES
Transfers in
CASH FLOWS FROM INVESTING ACTIVITIES
Interest received on investments
NET INCREASE IN CASH
AND CASH EQUIVALENTS
CASH AND CASH EQUIVALENTS, Beginning of Year
Equipment Building Employee
Replacement Replacement Benefits
Totals
$ 449,266 $1,351,984 $ 1,801,250
(196,195) $ (119,760) (1,168,416) (1,484,371)
253,071 (119,760) 183,568
(213,289)
48,515 100,000
91,899
180,196
52,558
32,798
4,831
316,879
(213,289)
148,515
149,288
188,399 401,393
2,714,658 1,567,935 295,518 4,578,111
CASH AND CASH EQUIVALENTS, End of Year $ 2,894,854 $ 1,600,733 $ 483,917 $ 4,979,504
RECONCILIATION OF OPERATING INCOME (LOSS)
TO NET CASH PROVIDED (USED) BY OPERATING
ACTIVITIES
Operating income (loss)
Adjustments to reconcile operating income (loss) to
net cash provided (used) by operating activities:
Depreciation
Decrease in other receivables
Decrease in prepaid items
Increase (decrease) in accounts payable
$ (17,875) $ (56,885) $ 177,721 $ 102,961
205,889
65,057 (62,875)
1,284
1,043
3,520
205,889
1,284
1,043
5,702
NET CASH PROVIDED (USED) BY
OPERATING ACTIVITIES $ 253,071 $ (119,760) $ 183,568 $ 316,879
95
L
STATISTICAL SECTION
STATISTICAL SECTION
This part of the City of Rancho Palos Verdes' comprehensive annual financial report presents
detailed information as a context for understanding what the information in the financial
statements, note disclosures, and required supplementary information says about the city's
overall financial health.
Contents Page
Financial Trends
These schedules contain trend information to help the reader understand how the
city's financial performance and well-being have changed over time.
Revenue Capacity
These schedules contain information to help the reader assess the city's most
significant local revenue source, property tax.
Debt Capacity
These schedules present information to help the reader assess the affordability
of the city's current levels of outstanding debt and the city's ability to issue
additional debt in the future. The city does not have general bond indebtedness
or debt issued with pledged revenue.
Demographic and Economic Information
These schedules offer demographic and economic indicators to help the reader
understand the environment within which the city's financial activities take place.
Operating Information
These schedules contain services and infrastructure data to help the reader
understand how the information in the city's financial report relates to the
services the city provides and the activities it performs.
Sources: Unless otherwise noted, the information in these schedules is derived from the
comprehensive annual financial reports for the relevant year.
96
97
104
108
111
113
City of Rancho Palos Verdes
Net Assets by Component
Last Five Fiscal Years
(accrual basis of accounting)
(amounts expressed in thousands)
Fiscal Year
2002 2003 2004 2005 2006
Governmental activities
Invested in capital assets, net of related debt $ 93,636 $ 94,895 $ 92,499 $ 94,023 $ 109,991
Restricted 10,327 10,661 11,586 12,075 12,417
Unrestricted 13,666 13,004 14,271 15,659 16,164
Total governmental activities net assets $ 117,629 $ 118,560 $ 118,356 $ 121,757 $ 138,572
Business -type activities
Invested in capital assets, net of related debt $ 1,311
Restricted
Unrestricted $ 2,000 2,799
Total business -type activities net assets $ 2,000 $ 4,110
Primary government
Invested in capital assets, net of related debt $ 93,636 $ 94,895 $ 92,499 $ 94,023 $ 111,302
Restricted 10,327 10,661 11,586 12,075 12,417
Unrestricted 13,666 13,004 14,271 17,659 18,963
Total primary government net assets $ 117,629 $ 118,560 $ 118,356 $ 123,757 $ 142,682
97
City of Rancho Palos Verdes
Changes in Net Assets
Last Five Fiscal Years
(accrual basis of accounting)
(amounts expressed in thousands)
Fiscal Year
2002 2003 2004 2005 2006
Expenses
Governmental activities:
Administration $ 3,069 $ 3,294 $ 3,499 $ 4,055 $ 4,350
Public safety 2,898 3,094 3,024 3,079 3,437
Public works 7,283 7,954 7,462 9,488 9,290
Parks and recreation 687 809 948 1,065 1,659
Planning, building and code enforcement 1,916 2,170 2,296 2,223 2,060
Interest on long-term debt 273 273 273 272 270
Total governmental activities expenses 16,126 17,594 17,502 20,182 21,066
Business -type activities:
Water Quality Flood Protection 47
Total primary government expenses $ 16,126 $ 17,594 $ 17,502 $ 20,182 $ 21,113
Program Revenues
Governmental activities:
Charges for services:
Administration $ 157 $ 87 $ 69 $ 62 $ 35
Public safety 433 235 165 163 224
Public works 78 252 217 131 37
Parks and recreation 10 8 6 41 45
Planning, building and code enforcement 979 1,202 1,363 1,188 1,319
Operating grants and contributions 6,877 2,971 2,836 2,728 3,894
Capital grants and contributions 706 131 37 4,524 17,299
Total governmental activities program revenues 9,240 4,886 4,693 8,837 22,853
Business -type activities:
Charges for services:
Water Quality Flood Protection
Operating grants and contributions
Capital grants and contributions
Total business -type activities program revenues - - - - -
Total primary government program revenues $ 9,240 $ 4,886 $ 4,693 $ 8,837 $ 22,853
Net (expense)/revenue
Governmental activities $ (6,886) $ (12,708) $ (12,809) $ (11,345) $ 1,787
Business -type activities - - - - (47)
Total primary government net expense $ (6,886) $ (12,708) $ (12,809) $ (11,345) $ 1,740
98
City of Rancho Palos Verdes
Changes in Net Assets
Last Five Fiscal Years
(accrual basis of accounting)
(amounts expressed in thousands)
Fiscal Year
2002 2003 2004 2005 2006
General Revenues and Other Changes in Net Assets
Governmental activities:
Taxes
Property taxes $ 5,253 $ 5,335 $ 5,706 $ 5,840 $ 9,621
Franchise taxes 1,139 1,087 1,275 1,307 1,454
Sales taxes 1,093 1,003 1,205 1,276 1,354
Utility user taxes 1,812 1,832 1,851 1,901 2,191
Other taxes 2,744 3,495 2,867 4,545 727
Investment income 814 371 331 594 997
Other (67) 517 2,481 1,283 793
Transfers (2,000) (2,109)
Total governmental activities 12,788 13,640 15,716 14,746 15,028
Business -type activities:
Investment income 48
Transfers 2,000 2,109
Total business -type activities - - - 2,000 2,157
Total primary government $ 12,788 $ 13,640 $ 15,716 $ 16,746 $ 17,185
Change in Net Assets
Governmental activities
Business -type activities
Total primary government net expense
$ 5,902 $ 932 $ 2,907 $ 3,401 $ 16,815
- - - 2,000 2,110
$ 5,902 $ 932 $ 2,907 $ 5,401 $ 18,925
99
City of Rancho Palos Verdes
Governmental Activities Tax Revenues By Source
Last Five Fiscal Years
(accrual basis of accounting)
(amounts expressed in thousands)
Utility
Fiscal Property Franchise Sales Users Other
Year Tax Tax Tax Tax Taxes Total
2002 $ 5,253 $ 1,139 $ 1,093 $ 1,812 $2,744 $ 12,041
2003 5,335 1,087 1,003 1,832 3,495 12,752
2004 5,706 1,275 1,205 1,851 2,867 12,904
2005 5,840 1,307 1,276 1,901 4,545 14,869
2006 9,621 1 1,454 1,354 2,191 727 ' 15,347
1: Most of the Motor Vehicle In Lieu tax is received as property tax beginning in 2006.
100
City of Rancho Palos Verdes
Fund Balances of Governmental Funds
Last Ten Fiscal Years
(modified accrual basis of accounting)
(amounts expressed in thousands)
Fiscal Year
1997 1998 1999 2000 2001 2002 2003 2004 2005 2006
General fund
Reserved or designated $ 3,560 $ 5,231 $ 6,050 $ 6,367 $ 6,317 $ 6,571 $ 6,854 $ 6,639 $ 6,696 $ 7,040
Unreserved, undesignated 3,534 3,918 5,701 6,791 7,043 7,234 9,607 14,066 14,209 13,567
Total general fund $ 7,094 $ 9,149 $11,751 $13,158 $13,360 $13,805 $16,461 $20,705 $20,905 $20,607
All other governmental funds
Reserved or designated $ 19,062 $ 15,415 $ 16,009 $ 18,291 $ 16,512 $ 11,256 $ 7,584 $ 7,229 $ 6,178 $ 6,933
Unreserved, undesignated, reported in:
Special revenue funds 3,771 4,629 4,768 4,283 4,697 4,753 5,012 5,040 5,902 6,615
Capital projects funds 332 1 534 2,430 3,320 2,077
Permanent fund 443 2 460 418 426 329
Debt service fund (10,477) 3 (10,915) (12,070) (12,793) (13,741)
Total all other governmental funds $ 22,833 $ 20,044 $ 20,777 $ 22,574 $ 21,209 $ 6,307 $ 2,675 $ 3,047 $ 3,033 $ 2,213
0 1: Prior to 2002, all Capital Projects fund balances were designated for future projects.
2: Prior to 2002, the Permanent fund was reported as a Fiduciary fund.
3: Prior to 2002, the balance of long-term debt was recorded in an account group instead of the Debt Service fund.
City of Rancho Palos Verdes
Changes in Fund Balances of Governmental Funds
Last Ten Fiscal Years
(modified accrual basis of accounting)
(amounts expressed in thousands)
Fiscal Year
1997 1998 1999 2000 2001 2002 2003 2004 2005 2006
Revenues
Taxes $ 8,832 $ 8,922 $ 9,002 $ 9,530 $10,309 $10,677 $11,046 $12,081 $13,573 $15,321
Licenses and permits 798 890 1,292 1,090 1,164 1,245 1,463 1,310 1,326 1,440
Fines and forfeitures 93 115 140 157 139 117 115 102 108 171
Use of money and property 1,664 1,701 1,555 1,704 1,971 1,153 804 733 1,306 7,038
Charges for services 337 176 218 203 197 217 205 379 152 49
Revenues from other agencies 10,674 4,900 4,341 3,655 4,816 8,170 4,318 3,453 7,848 15,511
Other revenues 546 649 687 2,137 882 563 554 2,363 1,038 155
Total Revenues 22,944 17,353 17,235 18,476 19,478 22,142 18,505 20,421 25,351 39,685
Expenditures
Administration 1,597 1,669 1,689 1,846 3,052 2,915 3,092 3,328 3,852 4,041
Public Safety 2,637 2,533 2,658 2,662 2,733 2,898 3,094 3,039 3,092 3,438
Public Works 3,970 4,143 4,156 5,552 4,972 7,449 5,292 4,801 6,302 5,277
Parks and recreation 551 711 633 597 596 669 786 946 965 1,593
Planning, building and code enforcement 1,361 1,559 1,882 1,647 1,778 1,950 2,194 2,362 2,302 2,361
Pass through to other agencies 67 79 78 85 91 102 137 156 188 200
Capital outlay 9,283 4,333 3,504 2,157 7,015 8,246 3,893 368 4,912 20,202
Debt service
Principal 10,000 184 200
Interest 367 638 893 985 1,128 930 836 805 905 1,150
Total expenditures 19,833 25,665 15,493 15,531 21,365 25,159 19,324 15,805 22,702 38,462
Excess of revenues over (under) expenditures 3,111 (8,312) 1,742 2,945 (1,887) (3,017) (819) 4,616 2,649 1,223
Other financing sources (uses)
Transfers in 4,370 10,358 2,593 3,687 5,013 4,294 1,676 1,844 6,180 4,989
Transfers out (4,426) (10,463) (2,593) (4,469) (5,165) (4,877) (1,833) (1,844) (8,180) (7,247)
Bond Proceeds 5,455
Advances to the Redevelopment Agency 617 2,246 1,301 982 855
Total other financing sources (uses) 561 7,596 1,301 200 703 (583) (157) (2,000) (2,258)
Net change in fund balances $ 3,672 $ (716) $ 3,043 $ 3,145 $ (1,184) $ (3,600) $ (976) $ 4,616 $ 649 $ (1,035)
Debt services as a percentage of noncapital expenditures 3.5% 49.9% 7.4% 7.4% 7.9% 5.5% 5.4% 5.2% 6.1% 7.4%
City of Rancho Palos Verdes
General Governmental Tax Revenues By Source
Last Seven Fiscal Years
(modified accrual basis of accounting)
(amounts expressed in thousands)
Utility
Fiscal Property Franchise Sales Users Other
Year Tax Tax Tax Tax Taxes Total
2000 $ 4,357 $ 972 $ 1, 024 $ 1, 550 $ 1, 627 $ 9,530
2001 4,629 1,087 1,101 1,764 1,728 10,309
2002 4,972 1,139 1,093 1,812 1,661 10,677
2003 5,335 1,087 1,003 1,832 1,789 11,046
2004 5,706 1,275 1,205 1,851 2,044 12,081
2005 8,494 ' 1,307 1,009 1,901 862 13,573
2006 9,576 1,299 1,078 2,191 1,177 15,321
Source: City general ledger
1: Most of the Motor Vehicle In Lieu fees are received as property tax beginning in 2006.
103
Fiscal
Year
Real Property
Residential Commercial
Property Property
City of Rancho Palos Verdes
Assessed Value and Estimated Actual Value of Taxable Property
Last Two Fiscal Years
(in thousands of dollars)
Other
Property
Personal
Property
Less Tax Exempt:
Real Other
Fixtures Property Property
2005 $ 6,439,116 $ 75,593 $ 357,347 $ 3,146 $ 388
2006 6,959,150 89,220 386,619 3,348 1,076
Source: HdL Coren & Cone, Los Angeles County Assessor Combined Tax Rolls
Note: Tax rates are per $100 of assessed value
0
.p
Total
Total Direct
Taxable Tax Assessed
Value Rate Value
$ 64,688 $ 3,054 $ 6,807,847 $ 0.064 $ 6,971,959
67,742 688 7,370,983 0.064 7,535,086
Taxable
Value as a
Percentage of
Assessed Value
97.6%
97.8%
Fiscal General
Year Levy
Los Angeles
County
2005 $ 1.00000 $ 0.00092
2006 1.00000 0.00080
City of Rancho Palos Verdes
Property Tax Rates
Direct and Overlapping Governments
Last Two Fiscal Years
Flood
Control
District
$ 0.00025
0.00005
Metropolitan
Water
District
Library
District
$ 0.00580 $ 0.00852
0.00520 0.00781
Source: HdL Coren & Cone, Los Angeles County Assessor Combined Tax Rolls
Note: Tax rates are per $100 of assessed value.
0
Ol
Community
College
District
$ 0.01810
0.01429
School
Districts
Total Direct
& Overlapping
Rates
$ 0.10366 $ 1.13724
0.10370 1.13184
City of Rancho Palos Verdes
Principal Property Taxpayers
Current Year
(amounts expressed in thousands)
Taxpayer
PPC Villas RPV LLC
VH Property Corporation
PV Victoria Apartments LLC
Riviera Investors Western, Et. Al.
Long Point Development LLC
Belmont Village RPV
Tridiamond LLC
Patricia J. Rahn
VHPS LLC
Eric C. & Susanne K. Johnson Trust
Totals
Assessed
Value Rank
$ 52,142 1
45,955 2
43,253 3
26,334 4
19,210 5
17,456 6
14,246 7
13,188 8
13,143 9
10,145 10
$ 255,071
Percentage of
Total Assessed
Value
0.69%
0.61%
0.57%
0.35%
0.25%
0.23%
0.19%
0.18%
0.17%
0.13%
3.39%
Source: HdL Goren & Cone, Los Angeles County Assessor Combined Tax Rolls
106
City of Rancho Palos Verdes
Property Tax Levies and Collections
Last Two Fiscal Years
(amounts expressed in thousands)
Collected within the
Total Tax Fiscal Year of the Levy Total Collections to Date
Fiscal Levy for Percentage Collections in Percentage
Year Fiscal Year Amount of Levy Subsequent Years Amount of Levy
2005 $ 4,284 $ 4,001 93.40% $ 139 $ 4,140 96.65%
2006 4,643 4,506 97.06% - $ 4,506 97.06%
Source: County of Los Angeles Department of Auditor -Controller and City general ledger
Fiscal
Year
2001
2002
2003
2004
2005
2006
0
co
City of Rancho Palos Verdes
Ratios of Outstanding Debt by Type
Last Six Fiscal Years
(amounts expressed in thousands, except per capita amount)
RDA
Tax Increment
Bond
$ 5,455
5,455
5,455
5,455
5,450
5,435
Governmental Activities
RDA
Deferred Interest
Payable
$ 3,111
3,111
3,111
3,111
2,469
2,284
Employee
Compensated
Absences
$ 134
163
191
194
221
231
Total
Primary
Government
$ 8,700
8,729
8,757
8,760
8,140
7,950
Percentage
of Personal
Income
0.47%
0.46%
0.46%
0.45%
0.41%
0.41%
Per
Capita
$ 211.45
207.82
206.91
204.63
187.02
184.92
City of Rancho Palos Verdes
Direct and Overlapping Governmental Activities Debt
Current Year
(amounts expressed in thousands)
Governmental Unit
Los Angeles County Detention Facilities 1987
Los Angeles County Flood Control Storm Drain Bonds No. 4
Palos Verdes Library District Refunding Bonds 1998
West Basin Metropolitan Water District 1111 *
Los Angeles City Community College 2003 Series A
Los Angeles City Community College 2003 Series B & C
Los Angeles City Community College 2001 Series A
Los Angeles City Community College 2004 Series B
Los Angeles City Community College 2005 Series A Refunding
Los Angeles Unified School District 2006
Los Angeles Unified School District 2004 Series A
Los Angeles Unified School District 2004 Series B
Los Angeles Unified School District 2004 Series C
Los Angeles Unified School District 2004 Series D
Los Angeles Unified School District 2002 Refunding
Los Angeles Unified School District 2004 Series A Refunding
Los Angeles Unified School District 2004 Series E
Los Angeles Unified School District 2005 Series A Refunding
Los Angeles Unified School District 2002 Series A
Los Angeles Unified School District 1997 Series A
Los Angeles Unified School District 1997 Series B
Los Angeles Unified School District 1997 Series C
Los Angeles Unified School District 1997 Series D
Los Angeles Unified School District 1997 Series E
Los Angeles Unified School District 1997 Series F
Palos Verdes Peninsula USD Series 2005
Palos Verdes Peninsula USD Series 2000 A
Palos Verdes Peninsula USD Series 2000 B
Palos Verdes Peninsula USD Series 2000 C
Total direct and overlapping debt
Debt
Outstanding
$ 8,395
1,080
10,575
182,369
30,935
85,370
120,290
28,500
434,110
816,710
72,630
49,015
48,370
16,895
254,085
219,125
400,000
467,675
494,125
136,080
45,320
45,745
54,945
387,680
1,968,065
20,055
945
3,560
47,276
Estimated
Percentage
Applicable
0.996%
1.012%
49.448%
1.075%
1.650%
1.650%
1.650%
1.650%
1.650%
0.205%
0.205%
0.205%
0.205%
0.205%
0.205%
0.205%
0.205%
0.205%
0.205%
0.205%
0.205%
0.205%
0.205%
0.205%
0.205%
46.809%
46.809%
46.809%
46.809%
Estimated
Share of
Overlapping
Debt
84
11
5,229
1,960
510
1,409
1,985
470
7,163
1,674
149
100
99
35
521
449
820
959
1,013
279
93
94
113
795
4,035
9,388
442
1,666
22,129
63,673
Source: HdL Coren & Cone, L.A. Acounty Assessor and Audiotr Combined 2005/06 Lien Date Tax Rolls
Note: This information reflects debt which is being repaid through voter-apporved property tax indebtedness. It
excludes mortgage revenue, tax allocation bonds, interim financing obligations, non -bonded capital leas obligations
and certificates of participation.
109
City of Rancho Palos Verdes
Legal Debt Margin Information
Last Ten Fiscal Years
(amounts expressed in thousands)
Fiscal Year
1997 1998 1999 2000 2001 2002 2003 2004 2005 2006
Debt limit $643,504 $652,585 $691,696 $759,196 $804,357 $855,291 $902,133 $962,539 $ 1,021,177 $ 1,105,647
Total net debt applicable to limit - - - - -
Legal debt margin $643,504 $652,585 $691,696 $759,196 $804,357 $855,291 $902,133 $962,539 $ 1,021,177 $ 1,105,647
Total net debt applicable to the
limit as a percentage of debt limit 0% 0% 0% 0% 0% 0% 0% 0% 0% 0%
Total taxable value (see page 103)
Debt limit (15% of total taxable value)
Debt applicable to limit
Legal debt margin
0
$ 7,370,983
1,105,647
$ 1,105,647
Fiscal
Year
2001
2002
2003
2004
2005
2006
Population
41,145
42,002
42,322
42,810
43,525
42,991
City of Rancho Palos Verdes
Demographic and Economic Statistics
Last Six Fiscal Years
Per
Personal Capita
Income Personal
(000's) Income
$ 1,904,767 $ 46,294
1,944,441 46,294
1,959,255 46,294
1,981,846 46,294
2,014,946 46,294
1,990,225 46,294
Median
Age
44.7
44.7
44.7
44.7
44.7
44.7
Education
Level in
Years of
Formal
Schooling
DNA
DNA
DNA
DNA
DNA
DNA
School
Enrollment
DNA
DNA
DNA
DNA
DNA
DNA
Source: U.S. Census Bureau, State Controller
1: This data available with the 2000 U.S. Census. The data will not be updated until 2010
2: Unemployment rate obtained from Sperling's Best Places (an Internet data service)
DNA: Data not available
Unemployment
Rate
DNA
DNA
DNA
DNA
DNA
5.7%
City of Rancho Palos Verdes
Principal Employers
Current Year
Employer
Palos Verdes Peninsula Unified School District
Marymount College
Salvation Army
Los Angeles Unified School District
Trump National Golf Course
Los Verdes Golf Course
Ralph's Grocery Store
Source: City staff
DNA: Data not available
112
Employees Rank
DNA DNA
DNA DNA
DNA DNA
DNA DNA
DNA DNA
DNA DNA
DNA DNA
Percentage
of Total City
Employment
DNA
DNA
DNA
DNA
DNA
DNA
DNA
City of Rancho Palos Verdes
Full-time Equivalent City Government Employees by Function
Last Ten Fiscal Years
Full-time Equivalent Employees as of June 30
1997 1998 1999 2000 2001 2002 2003 2004 2005 2006
Function
General government 37 39 41 41 41 42 45 45 45 47
Recreation part-time 10 10 10 10 10 10 10 10 10 10
Total 47 49 51 51 51 52 55 55 55 57
Source: City budget documents and payroll records
w
City of Rancho Palos Verdes
Operating Indicators by Function
Last Six Fiscal Years
Fiscal Year
2001 2002 2003 2004 2005 2006
Function
Administration
Employee Resignations 5 4 - 5 4 4
Workers compensation claims 3 3 2 2 3 4
Liability claims 8 14 14 14 18 31
Budget Adjustments 27 35 30 27 36 48
Business licenses issued 1,624 1,600 1,961 2,102 1,909 1,801
Web site page views 30,624 88,888 119,104 133,481 DNA DNA
Public safety
Crime rates (per 10,000 population) 123 138 122 124 DNA DNA
Public works
Solid waste diversion rates 46% 51% 57% DNA DNA DNA
Pavement rating 88 80 80 89 DNA DNA
Parks and recreation
Park events 1,030 1,022 915 825 DNA DNA
Class meetings at parks 1,601 1,774 2,134 2,935 DNA DNA
Docent led nature hikes 51 54 45 80 DNA DNA
Planning, building and code enforcement
Building permits processed DNA 1,264 1,327 1,399 1,331 1,533
Plan checks DNA 121 150 186 214 176
Municipal code violations closed DNA 138 203 214 DNA DNA
Source: City departments
DNA: Data not available
City of Rancho Palos Verdes
Capital Asset Statistics by Function
Last Six Fiscal Years
Fiscal Year
2001 2002 2003 2004 2005 2006
Function
Administration
Computer workstations DNA DNA DNA DNA 81 81
Public safety'
Public works
Street miles 143 143 143 143 143 143
Traffic signals 13 14 15 15 15 15
Parks and recreation
Parks
Planning, building and code enforcement
Vehicles used for inspections
14 15 15 15 15 16
3 3 3 3 3 3
Source: City capital asset records
DNA: Data not available
1: Public safety services are contracted with other agencies. The city does not own any public safety capital assets.
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