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CC SR 20160216 07 - FY14-15 CAFRRANCHO PALOS VERDES CITY COUNCIL AGENDA REPORT AGENDA DESCRIPTION: MEETING DATE: 02/16/2016 AGENDA HEADING: Regular Business Consideration and possible action to review and discuss the FY14-15 Comprehensive Annual Financial Report (CAFR) of the City of Rancho Palos Verdes. RECOMMENDED COUNCIL ACTION: (1) Receive and file: A. FY14-15 Comprehensive Annual Financial Report (CAFR) of the City of Rancho Palos Verdes; and, B. Statements on Auditing Standards (SAS) 114 Letter from Independent Auditors to Those Charged With Governance. FISCAL IMPACT: None Amount Budgeted: $0 Additional Appropriation: N/A Account Number(s): N/A ORIGINATED BY: Allan Kaufman, Senior Administrative Analyst REVIEWED BY: Deborah Cullen, Director of Finance APPROVED BY: Doug Willmore, City Manager..,''` ATTACHED SUPPORTING DOCUMENTS: A. FY14-15 Comprehensive Annual Financial Report (CAFR) (page A-1) B. SAS 114 Letter from Independent Auditors to Those Charged With Governance (page B-1) BACKGROUND AND DISCUSSION: Based upon their independent audit, Vavrinek, Trine, Day & Co., LLP (VTD) have issued an unqualified (clean) opinion of the City's FY14-15 financial statements. The City's General Fund Reserve at June 30, 2015 was $15,133,238 (referred to as the Rainy Day Fund on page 56 of the Comprehensive Annual Financial Report (CAFR), in the Notes to Financial Statements). Per the City Council's Reserve Policy, the favorable General Fund expenditure variance to budget shall be transferred to the Capital Improvement Projects (CIP) Reserve. For FY14-15, that amount is $2,214,942. Based on the audit opinion, the FY14-15 CAFR meets the standards and requirements established by the Governmental Accounting Standards Board (GASB) for presentation 1 of financial data, note disclosure and statistical information. The CAFR includes the audited financial statements and accompanying notes for the fiscal year ended June 30, 2015. The scope of the audit examination is limited to Management's Discussion & Analysis, the financial statements and the accompanying notes, beginning on page 7 of the CAFR. Based upon their independent audit, VTD has issued an unqualified (clean) opinion. The opinion letter is presented on page 2 of the CAFR. In addition, Audit partner, Phil White, conducted an exit interview with the City Council's 2016 Ad -Hoc Audit Subcommittee (Duhovic and Dyda) on January 21, 2016 and is available to answer questions during this Council meeting. The auditors have not issued a Management Letter for FY14-15. A management letter is intended to call attention to matters involving internal controls of the City's accounting system, including suggestions for improving the internal controls and efficiency of the City's financial systems. The Auditing Standards Board of the American Institute of Certified Public Accountants (AICPA) requires the independent auditor to communicate significant audit findings to those charged with governance, if any are noted during the audit. The independent auditors have issued a letter to the City Council dated December 21, 2015 to comply with these requirements (see Attachment A). The letter includes the following: • All significant transactions have been recognized in the financial statements in the proper period; • Management's estimates related to the City's receivable from the Successor Agency to the Redevelopment Agency, fair value of investments, depreciation and valuation of capital assets, and pension liabilities disclosure were reasonable; • The financial statement disclosures are neutral, consistent and clear; • There were no significant difficulties dealing with management during the audit; • A schedule of corrected misstatements of the draft financial statements, which primarily relate to the timing of one-time revenue receipts; and, • There were no disagreements with management. General Fund Variance at June 30, 2015 The $2.8 million General Fund variance at June 30, 2015 is calculated below. Per the City Council's Reserve Policy, the $2,214,942 expenditure variance to budget will be transferred to the CIP Reserve during FY15-16. FY14-15 Revenue Budget $ 27,487,128 Expenditures 21,055,150 Net Transfers 8,179,129 Subtotal General Fund Reserve Variance Actual Variance $ 28,084,853 $ 597,725 18,840,208 2,214,942 8,210,565 (31,436) $ 2,781,231 2 Significant FY14-15 General Fund Revenue Variances A summary of significant revenue variances to budget follows: Transient Occupancy Tax $ 142,630 Sales Tax 86,389 Planning Permits 69,759 Building & Safety Plan Checks & Permits 281,173 Other Immaterial Revenue Variances 17,774 Total Revenue Variance $ 597,725 Taxes Once again, Transient Occupancy Tax (TOT) exceeded expectations. The City received $4,812,130 compared to the budget amount of $4,669,500. Per City Council policy, the full amount of TOT was transferred to the CIP Reserve for infrastructure funding. The increase in Sales Tax is in line with state-wide forecasts. Staff did not see any new significant businesses open in RPV during 2014-15. Licenses & Permits Planning and building permits are difficult to predict and can vary widely from year to year. Permits are driven by the weather, economy, trends in home improvement, lending rates, the turnover rate of housing stock, and the availability of contractors. Significant FY14-15 General Fund Expenditure Variances A summary of significant expenditure variances to budget follows. City Attorney Personnel Traffic Management Storm Water Quality Planning Parks, Trails & Open Space Maintenance Recreational Facilities Other Immaterial Expenditure Variances (from 28 programs) Total Expenditure Variance City Attorney $ 133,810 94,187 305,153 328,163 128,189 813,064 87,125 325,251 $ 2,214,942 Use of the City Attorney's office decreased during FY14-15 for day-to-day matters based on direction from the City Manager. The City pursued a competitive procurement for City Attorney services, and in September 2015, awarded a new contract to Aleshire & Wynder, LLP. 3 Personnel The savings in this program were all related to an under run of professional and technical services. This was primarily due to an increase in the budget at mid -year based on estimated cost increases related to labor negotiations and recruitments. Traffic Management The under run to budget in this program was primarily due to projects that were delayed or postponed. There was $100,000 budgeted for a traffic sign compliance survey that was postponed. Pavement striping costs were less than expected as the contract specifications had to be revised and the bid re -advertised. The contract will be taken to the City Council for consideration in March 2016. Storm Water Quality The savings in this program were related to the timing of when MS4 permit implementation work could be performed. As a result, only a portion of the funds were spent. Planning The savings in this program were due to an Associate Planner position and a Deputy Director position remaining vacant for portions of the year. Parks, Trails & Open Space Maintenance Due to dry weather and lack of plant growth, there was a favorable expenditure variance from open space fuel modification and weed abatement. Water consumption costs were also down as a result of mandated water restrictions. There were also three small projects that were not completed during FY14-15 or carried over to FY15-16: Abalone Cove Beach Building Improvements of $50,000, Abalone Cove Shoreline Park Northwest Corner Improvements (landscape and fence) for $30,000, and other Fence Replacements for $40,000. Recreational Facilities There were some part-time positions at the City's parks that were unfilled during the year. The Recreation and Parks Department is actively recruiting and expects these part-time positions to be filled in FY15-16. 11 Other Relevant Detail The Governmental Accounting Standards Board (GASB) approved a new standard that took effect in FY14-15. The objective of GASB 68 is to improve accounting and financial reporting by state and local governments for pensions. State and local agencies are now required to recognize applicable pension amounts as a liability in their financial statements (Balance Sheet) and also provide extensive footnote disclosures and additional supplementary schedules related to their pension plan. Detailed information is available in the Comprehensive Annual Financial Report on pages 58-62. As of June 30, 2015, the City reported a liability of $5,714,320 for its proportionate share of the collective net pension liability. The net pension liability was measured as of June 30, 2014, and the total pension liability used to calculate the net pension liability was determined by an actuarial valuation as of June 30, 2013, rolled forward to June 30, 2014, using standard actuarial procedures. The City's proportion of the net pension liability was based on a projection of the City's long-term share of contributions to the pension plan relative to the projected contributions of all participating employers, actuarially determined. The City made contributions of $725,496 and the employees contributed $419,435 to the pension plan for the year ended June 30, 2015. CONCLUSION Staff recommends that the City Council receive and file the FY14-15 CAFR and SAS 114 letter. ALTERNATIVES: In addition to the Staff recommendation, the following alternative actions are available for the City Council's consideration: 1. Discuss and take other action related to this item. 5 ATTACHMENT A CITY OF RANCHO PALOS VERDES C A L I F O R N I A COMPREHENSIVE ANNUAL FINANCIAL REPORT FISCAL YEAR ENDED JUNE30J 2015 ATTACHMENT A CITY OF RANCHO PALOS VERDES, CALIFORNIA COMPREHENSIVE ANNUAL FINANCIAL REPORT For the Year Ended June 30, 2015 Prepared By: Finance Department Deborah Cullen, Director Kathryn Downs, Deputy Director Allan Kaufman, Senior Administrative Analyst A-2 ATTACHMENT A INTRODUCTORY SECTION A-3 ATTACHMENT A CITY OF RANCHO PALOS VERDES COMPREHENSIVE ANNUAL FINANCIAL REPORT FOR THE YEAR ENDED JUNE 30, 2015 TABLE OF CONTENTS INTRODUCTORY SECTION Table of Contents Letter of Transmittal iv-xii Directory of City Officials xiv Organization Chart xv GFOA Certificate of Achievement for Excellence in Financial Reporting xvi FINANCIAL SECTION Independent Auditor's Report 2 Management Discussion and Analysis 7 Government -Wide Financial Statements Statement of Net Position 19 Statement of Activities 20 Fund Financial Statements Governmental Funds Balance Sheet 22 Reconciliation of the Balance Sheet of Governmental Funds to the Statement of Net Position 24 Statement of Revenues, Expenditures, and Changes in Fund Balances 26 Reconciliation of the Statement of Revenues, Expenditures, and Changes in Fund Balances to the Statement of Activities 28 General Fund Statement of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual 29 Street Maintenance Special Revenue Fund Statement of Revenues, Expenditures, and Change in Fund Balance - Budget and Actual 31 Proprietary Funds Statement of Net Position 32 Statement of Revenues, Expenses, and Changes in Fund Net Position 33 Statement of Cash Flows 34 i ATTACHMENT A Statement of Cash Flows 34 Fiduciary Funds Statement of Fiduciary Net Position 35 Statement of Changes in Fiduciary Net Position 36 Notes to the Financial Statements 38 Required Supplementary Information Schedule of Proportionate Share of the Net Pension Liability 76 Schedule of Contributions 77 Supplementary Information Major Capital Projects Fund Schedule of Revenues, Expenditures, and Change in Fund Balances - Budget and Actual Capital Improvements Capital Projects Fund 80 Non -Major Governmental Funds Combining Balance Sheet 84 Combining Statement of Revenues, Expenditures, and Changes in Fund Balances 92 Schedule of Revenues, Expenditures, and Changes in Fund Balances - Budget and Actual Special Revenue Funds 1972 Act Fund 100 EI Prado Fund 101 1911 Act Fund 102 Beautification Fund 103 Waste Reduction Fund 104 Air Quality Management Fund 105 Proposition C Fund 106 Proposition A Fund 107 Public Safety Grants Fund 108 Measure R 109 Measure A Fund 110 Abalone Cove Sewer Assessment District 111 Dr. Allen and Charlotte Ginsburg Cultural Arts Building 112 Donor Restricted Contributions 113 JPIA — Portuguese Bend Fund 114 Community Development Block Grant 115 Quimby Fund 116 Environmental Excise Tax Fund 117 Bikeways Fund 118 A-5 ATTACHMENT A Capital Projects Funds 131 Low -Moderate Income Housing Capital Projects Fund 119 City Affordable Housing In -Lieu Capital Projects Fund 120 Permanent Funds 135 Habitat Restoration Fund 121 Subregion One Maintenance Fund 122 JPIA — Abalone Cove Fund 123 Internal Service Funds Combining Statement of Net Position 126 Combining Statement of Revenues, Expenses, and Changes in 140 Fund Net Position 127 Combining Statement of Cash Flows 128 STATISTICAL SECTION (Unaudited) Financial Trends Net Position by Component 131 Changes in Net Position 132 Governmental Activities Tax Revenue By Source 133 Fund Balances of Governmental Funds — Before GASB 54 135 Fund Balances of Governmental Funds — After GASB 54 136 Changes in Fund Balances of Governmental Funds 137 General Governmental Tax Revenues By Source 138 Revenue Capacity Assessed Value and Estimated Actual Value of Taxable Property 139 Property Tax Rates - Direct and Overlapping Governments 140 Principal Property Tax Payers 141 Property Tax Levies and Collections 142 Debt Capacity Direct and Overlapping Governmental Activities Debt 143 Legal Debt Margin Information 144 Demographic and Economic Information Demographic and Economic Statistics 145 Principal Sales Tax Producers 146 Principal Employers 147 Operating Information Full-time Equivalent City Government Employees by Function 148 Operating Indicators by Function 149 Capital Asset Statistics by Function 150 Wo ATTACHMENT A RANan'ro' PALOS VERDES December 15, 2015 Honorable Mayor and City Council City of Rancho Palos Verdes Rancho Palos Verdes, California The Comprehensive Annual Financial Report (CAFR) of the City of Rancho Palos Verdes for the fiscal year ended June 30, 2015, is hereby submitted as mandated by both local ordinances and state statutes. These ordinances and statutes require that the City of Rancho Palos Verdes issue annually a report on its financial position and activity, and that an independent firm of certified public accountants audit this report. Responsibility for both the accuracy of the data, and the completeness and fairness of the presentation, including all disclosures, rests with the City. To the best of our knowledge and belief, the enclosed data is accurate in all material respects and is reported in a manner that presents fairly the financial position and results of operations of the various funds and component unit of the City of Rancho Palos Verdes. In addition, to the best of our knowledge, there are no untrue statements of material fact within the financial statements or omissions of material fact to cause the financial statements to be misleading. All disclosures necessary to enable the reader to gain an understanding of the City's financial activities have been included. The financial section of the CAFR includes management's discussion and analysis (MD&A) of the financial activity. This letter of transmittal is designed to complement the MD&A and should be read in conjunction with it. The financial reporting entity (the government) includes all the funds of the primary government (i.e., the City of Rancho Palos Verdes as legally defined), as well as its component unit, the Rancho Palos Verdes Joint Powers Improvement Authority. A component unit is a legally separate entity for which the primary government is financially accountable. The City provides a broad range of services, including police protection, solid waste collection, construction and maintenance of streets and other infrastructure, planning and zoning activities, recreational activities, cultural events, and general administrative services. The City of Rancho Palos Verdes is a contract city, meaning that some of these services are provided by contract with other agencies (both public and private) and some services are delivered by the City's own employees. iu A-7 ATTACHMENT A Special districts of the County of Los Angeles provide library services, fire protection services, and sewer services. The City has excluded the County of Los Angeles, as well as the State of California and various school districts, from the financial reporting entity because they do not meet the established criteria for inclusion. GOVERNMENTAL STRUCTURE The City of Rancho Palos Verdes is located on a coastal peninsula overlooking the Pacific Ocean in Los Angeles County, 20 miles south of the City of Los Angeles. The City was incorporated September 7, 1973, and currently has land area of 13.6 square miles and a population of about 42,000. The City is primarily a "bedroom" community with relatively little commercial activity. The City has operated under the council-manager form of government since incorporation. Policy-making and legislative authority are vested in the governing City Council, which consists of five Council Members, including the Mayor and Mayor Pro - Tem. The City 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 City Council, for overseeing the day-to-day operations of the City, and for appointing the heads of the City's departments. The City 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 City Council designates the Mayor and Mayor Pro -Tem for a one-year term. 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 City's commitment to ensuring that its citizens are able to live and work in an enviable environment. Community Development • The City together with the Palos Verdes Peninsula Land Conservancy continued management of the City's Natural Communities Conservation Plan (NCCP) Preserve through implementation of the City Council approved Public Use Master Plan (PUMP) for the entire Preserve, and continued several on-going habitat restoration and trail improvement projects. • Continued to take steps to update the City's General Plan by updating the text for the entirety of the Plan as well as all the proposed General Plan Land Use Map changes. The CEQA analysis for the updated Plan is pending completion for review by the Planning Commission. Staff anticipates that the Planning Commission will complete their review and forward the Draft Updated General Plan to the City Council sometime in 2016. • Continued to implement the Council -approved Coast Vision Plan, a coordinated master plan consisting of program, design and linkage concepts for land located within v 1 • • ATTACHMENT A the coastal region of the City, by maintaining the City's portion of the California Coastal Trail and amending the Vision Plan to update the conceptual plans for park improvements to Lower Point Vicente. Assisted the Recreation and Parks Department in obtaining Council approval to improve the lower portion of Hesse Park with passive recreational amenities, drought tolerate landscaping, and improvements to the existing site drainage Implemented the City's Trails Network Plan by improving and maintaining trails within the Palos Verdes Nature Preserve pursuant to the City Council adopted Preserve Trails Plan, and assisting with the pending construction of the Sunnyside Ridge Trail as identified in the City's Conceptual Trails Plan. In addition, Staff is in the process of an extensive overhaul of the Trails Network Plan for trails outside of the Preserve. Puhlic Wnrks Completed the Citywide Street Lighting Audit which summarized and catalogued all street lights within the City which achieved citywide energy savings in the amount of $44,667. • Completed construction of the Abalone Cove Shoreline Park Improvement Project which, in compliance with the Coast Vision Plan, added new park amenities including picnic tables, shade structures, landscaping, trees, benches, trash receptacles and trail improvements. The project was partially paid for by a $332,588 grant from the Land and Water Conservation Fund Program. • Completed design and construction of the Abalone Cove Parking Lot and Building Project. This project includes ancillary improvements to the parks parking lot, staff building and restrooms that will complement the grant -funded improvements associated with the Abalone Cove Shoreline Park Improvement Project. • Completed construction of the Palos Verdes Drive East Roadway Rehabilitation and Safety Improvement Project which resurfaced the entire roadway and improved safety conditions along Palos Verdes Drive East from Ganado Drive to the northerly City limits. • Completed construction of the Blackhorse Road CDBG ADA Compliant project which improved public transit accessibility for the elderly and severely disabled • Initiated and completed parking restrictions on Crenshaw Blvd near Del Cerro Park resulting in Neighborhood Permit Parking programs for the Del Cerro and Countryside Has and Recreational Permit Parking on Crenshaw Blvd for RPV residents only. • Completed construction of the Ryan Park Southern Entrance Realignment and Parking Lot Expansion Project, which improved safety of the park's southern entrance and added 32 spaces on-site. • Initiated the first monthly Infrastructure Management Advisory Committee (IMAC) u two ATTACHMENT A meeting and held regular monthly meetings including a field trip to public works facilities. • Planned and conducted two free document/paper shredding events for Rancho Palos Verdes residents. A total of 990 vehicles were served and 20 tons of paper was shredded. Additionally, 42 tons of mulch was distributed free of charge to residents, and approximately 3.6 tons of obsolete electronic waste was collected. Initiated project to migrate work control and asset management tracking to an automated Computerized Maintenance Management System (CMMS). The initial phase of selecting a platform (Cityworks) and sourcing an implementation consultant was completed in FY14-15. Implementation and transition to the new platform will be completed in FY15-16. Initiated and completed most of the construction of the FY12-13 & FY13-14 Residential Street Rehabilitation projects, which resurfaced local roadways in Area 1 (neighborhoods bordered by Hawthorne Boulevard and Silver Spur Road), Area 5B (neighborhoods bordered by Hawthorne Boulevard, Crest Road, and Palos Verdes Drive West) and Area 9 (neighborhoods bordered by Western Avenue). The project improvements included upgraded access ramps, slurry seal, asphalt concrete, tree root pruning, sidewalk repair, and updated roadway signing and striping. • Initiated and completed construction of the FY13-14 Sidewalk Repair Program, which replaced approximately 17,000 square feet of sidewalk, curb and gutter that was uplifted and damaged primarily by the roots of overgrown street trees. • Completed the San Ramon Flood Reduction Project under budget, allowing drainage and pavement improvements to be made to Palos Verdes Drive East along the Switchbacks. • Completed the McCarrell Canyon Pipeline Relining Project using remaining available funds from the Prop 1 E grant awarded for the San Ramon Project. City funds made up about half the total cost. • Completed CCTV inspection and cleaning of about 110,000 LF of storm drain to develop a condition assessment of the drainage system. • Developed Enhanced Watershed Management Program in cooperation with other peninsula agencies responsible for storm water quality and submitted to Regional Board for review in response to requirements of the new MS4 Permit administered by the Los Angeles Regional Water Quality Board. • Completed the Master Plan of Drainage that inventoried the City's storm drain infrastructure network, evaluated the system for capacity deficiencies, incorporated the conditions assessment made during the CCTV project and developed a 10 -year schedule and cost estimate for likely improvement projects to correct the deficiencies. M A-10 ATTACHMENT A Completed a joint project with other South Bay jurisdictions to install catch basin screens in Machado Lake drainage area. Parks and Recreation Began a comprehensive update of the Parks Master Plan, which involved an extensive public outreach plan including twelve public workshops, direct mailings, digital and print media advertising, banners, flyers and an online survey. This resulted in the final plan being adopted by City Council in early FY15-16. Organized 35 Volunteer Program events, providing volunteer opportunities such as park and beach cleanup, park and trial maintenance, litter and graffiti removal, park bench and picnic table painting projects, garden projects, dog park maintenance, weed eradication and native plant maintenance in City parks. Volunteers also assisted with several City -run special events. These volunteer activities totaled 2,855 hours, saving the City a total of $70,780. Coordinated approximately 70 onsite and offsite recreation activities for REACH, the City's therapeutic program serving adults with developmental disabilities living on the Peninsula and in the south bay. Provided oversight, support, and coordination of opportunities and programs with members of the Los Serenos de Point Vicente docent organization, including public and private hikes and speaking engagements. Also provided fourth and sixth grade tour programs that were coordinated with the Palos Verdes Peninsula Unified School District, the Whale of a World (WOW) Program serving Title I elementary schools, the Junior Docent Program, and the educational Junior Docent Nature Series airing on RPVty Channel 33. Continued to pursue donations through the City's Gifts for Parks Program to assist with Recreation and Parks facilities, operations, and special events; including: the Fourth of July Celebration, REACH Program for adults with developmental disabilities, and Point Vicente Interpretive Center exhibits and programs. The Los Serenos de Point Vicente docents assisted with fundraising for youth programs and scholarships, teaching aides, and exhibits for the Point Vicente Interpretive Center. Administration • Assisted with the compilation of updated and streamlined City Council Goals for 2015. Progress on completing the Goals was reported to the City Council on a monthly basis through the Weekly Administrative Report and Council Study Sessions. Supported City Council development of positions and consensus on the annual League of California Cities' conference resolutions, which were voted on by the City Council's voting delegate at the conference held in Los Angeles in September 2014. Improved the City's readiness and promoted community awareness of emergency preparedness through the following activities and programs, including: M A-11 ATTACHMENT A o Conducted the annual Emergency Operation Center Staff Training and Emergency Preparedness Drill at the City's Emergency Operations Center; o Completed the "point to point" connection for the San Pedro Hill ham radio repeater; o Completed the City's Multi -jurisdictional Hazard Mitigation Plan; o Moved forward with the City's Continuity of Operations Plan (COOP) project; o Rebuilt the Emergency Preparedness Committee's "Are You Ready?" web page to assimilate better with the City's new Civic Plus IT system; o Produced two Public Service Announcements on emergency preparedness topics for broadcast on RPVty; o The Emergency Preparedness Committee made four "Beauty and the Beast" presentations to local homeowners associations, o Staffed a booth at the City's 4th of July celebration, responding to hundreds of questions asked by inquisitive attendees; o Supplied all City owned vehicles with three day emergency go bags; o Removed and replaced expired food and water in City emergency caches; o Revitalized the City's emergency cache inventory and restock project; o Coordinated the Upper Point Vicente/City Hall defunct missile silos to be inspected by the Los Angeles County Hazardous Materials staff for safety and multi -use civic oriented possibilities; and o Coordinated public emergency preparedness presentations from major utility companies servicing the Palos Verdes Peninsula such as: Cal Water; COX Communications; Edison; and, the Gas Company. • Continued to pursue the acquisition of tax -defaulted properties for parkland and open space purposes from Los Angeles County. • Completed the conversion of more than 2,800 Planning Commission documents to the City's Electronic Document Management System (Laserfiche) making the documents easily accessible for both the public and staff. • Completed a Request for Proposal process to ensure City receives necessary IT services by a reputable provider at a competitive price. Completed the documentation, conversion and implementation processes required to switch all IT support services to a new outsourced provider. • Upgraded the City website to a commercial website hosting solution and added a Transparency portal and a Council, Commission and Advisory Group meeting portal in order to bring all transparency and governmental body meeting information into one convenient location. • Migrated from a hosted GIS solutions provider to a fully functional ESRI ArcGIS server system. This system provides the City with a single authoritative store for land management data, allows for customized data mapping and for integrations with other ix A-12 ATTACHMENT A City systems thereby improving efficiency and access to data for better decision making. • Completed an upgrade of our City network, router and firewall equipment followed by a third party parameter penetration security audit. This process upgraded the City network for future capabilities and insures the City does not have any security vulnerabilities going forward. • Supported City Council development of the Anonymous Fraud, Waste & Abuse Hotline. The hotline accepts anonymous and confidential reports via an online and toll-free number 24/7. Human Resources/Risk Management followed through in ensuring a resolution and/or response to reports from concerned citizens. • Conducted the search and successful hiring of the new City Manager. • Established an Employee Safety Committee to engage and educate staff, and to promote workplace safety, thereby minimizing risk for both employees and the public at -large using public facilities and parks. • Coordinated a Classification and Compensation Study with collaboration with an outside consultant to assist the City Council in the negotiation of the next Memorandum of Understanding (MOU) with the Rancho Palos Verdes Employees' Association. • Continued to negotiate in good faith with RPVEA. In addition in accordance with RPV Open Ordinance, we increased transparency in labor negotiations through constant updates online under the "Labor Negotiations" Link. The open forum included informing the public of the annual cost of the current and any proposed changes to the labor contract, and providing an independent fiscal impact/financial analysis of each new proposal. • Completed a total of 14 personnel recruitments during the fiscal year. FINANCIAL INFORMATION Internal Control. 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. 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 and A-13 ATTACHMENT A Improvement Authority Commission. Activities of the General fund, Special Revenue funds, Capital Projects funds and Permanent funds are included in the annual appropriated budgets of the government units. The level of budgetary control (that is, the level at which expenditures cannot legally exceed the appropriated amount) is established at the department/function level within each fund. Formal budgetary integration is employed as a management control device. The City also maintains an encumbrance accounting system as one method of maintaining budgetary control. These encumbrances lapse at year-end, and any unexpended balance is eligible to be carried over to the following year's budget appropriations with City Council approval. Budget to Actual Comparison. The City experienced an overall $2.8 million favorable budget variance in the General fund for the fiscal year ended June 30, 2015. Favorable revenue variances of $0.6 million for taxes were added to a $2.2 million favorable expenditure variance spread across 30 different programs. Many of the favorable expenditure variances were permanent savings resulting from conservative budget practices and the continued careful management of resources during FY14-15. Significant Financial Events. The City implemented Government Accounting Standards Board Statement No. 68, which requires the Net Pension Liability be moved from the footnote to the Balance Sheet. The City's Net Pension Liability at June 30, 2014 is $5,714,320. There were no other changes to financial policies that resulted in a significant impact on the June 30, 2015 financial statements. Unfunded Pension Liability. As described more fully in the Note #8 to the Financial Statements, the City contracts with the California Public Employees Retirement System (CaIPERS) for its employee pension plan. The City participates in a CaIPERS risk pool for small employers with the same benefit formula. CaIPERS calculated the City's unfunded pension liability at June 30, 2014 (the most recent data available) as follows. Plan's Accrued Liability $33,670,585 Less: Plan's Share of Pool's Market Value of Assets (27,956,265) Plan's Unfunded Accrued Liability $ 5,714,320 OTHER INFORMATION Independent Audit. The City requires an annual audit by independent certified public accountants. The accounting firm of Vavrinek, Trine, Day & Co., LLP conducted this year's audit. The auditors' report on the government -wide financial statements and combining and individual fund statements and schedules is included in the financial section of this report. Single Audit. As a recipient of federal, state, and county financial assistance, the City is responsible for ensuring that an adequate internal control structure is in place to ensure compliance with applicable laws and regulations related to those programs. This internal control structure is subject to periodic evaluation by management. In years when over $500,000 is expended on Federal financial assistance programs, the City is required to undergo an annual single audit in conformity with the provisions of the Single Audit Act of 1984 and U.S. Office of Management and Budget Circular A-133, Audits of States, Local Governments, and Non -Profit Organizations. For the year ended June 30, 2015, X1 A-14 ATTACHMENT A $413,864 was expended on Federal financial assistance programs; and therefore a Single Audit was not required. GFOA Certificate of Achievement Award. The Government Finance Officers Association of the United States and Canada (GFOA) awarded a Certificate of Achievement for Excellence in Finance Reporting to the City of Rancho Palos Verdes for its CAFR for the fiscal year ended June 30, 2014. This was the 22nd consecutive year that the City has achieved this prestigious award. In order to be awarded a Certificate of Achievement, a government must publish an easily readable and efficiently organized CAFR. This report must satisfy both generally accepted accounting principles and applicable legal requirements. A Certificate of Achievement is valid for a period of one year only. We believe that our current CAFR continues to meet the Certificate of Achievement Program's requirements and we are submitting it to the GFOA to determine its eligibility for another certificate. Acknowledgments. Completion of this report was the accomplishment by combined efforts of many individuals, especially Kathryn Downs, Deputy Director of Finance, and Allan Kaufman, Senior Administrative Analyst. I wish to acknowledge the assistance of our auditors, Vavrinek, Trine, Day & Co., LLP and the contributions of other Finance Department staff: Vina Ramos, Jane Lin, Selena Wright, Diane Amundson, and Jayne Mahtani. I would also like to recognize the City Council for their continued leadership directing the City to achieve a sound fiscal position over the last several years. We look forward to maintaining this success in the future under the leadership of the City Council. Respectfully su itted, Deborah Cullen(�� Director of Finance xii A-15 �•� A .:.K ,fir"' �n r.T }. ? •.� �: y �w. •4-14• t ;I 14_1 Y �+•.. •. it �"� • Al' . �` r f ♦ 7,�~ {IIx FY -Ir` •'� /r.A� Vii• y. �:,¢ J• �..� :�. - r�� • `tip• r ri krf • - _ . _. i} w' ., _ d.:.,,'Y. rf,_4..:il•I -.. • el!r'�...w. .tiler ATTACHMENT A CITY OF RANCHO PALOS VERDES DIRECTORY OF CITY OFFICIALS JUNE 30, 2015 CITY COUNCIL James E. Knight, Mayor Susan Brooks, Mayor Pro -Tem Brian Campbell, Councilman Jerry V. Duhovic, Councilman Anthony M. Misetich, Councilman ADMINISTRATION AND DEPARTMENT HEADS City Manager............ Deputy City Manager City Clerk ................. Director of Finance Community Development Director Director of Public Works ................ Director of Recreation and Parks City Attorney xiv ...................... Doug Willmore ...................... Carolynn Petru ...................... Carla Morreale ..................... Deborah Cullen ............................. Joel Rojas ..................... Michael Throne ........................... Cory Linder Richards, Watson & Gershon A-17 ATTACHMENT A CITY OF RANCHO PALOS VERDES ORGANIZATIONAL CHART CITIZENS OF RANCHO PALOS VERDES I MAYOR AND CITY COUNCIL I COMMISSIONS & COMMITTEES Planning Commission Traffic Safety Committee Finance Advisory Cornrnittee Emergency Preparedness Committee CITY MANAGER Administration Personnel/Community Outreach Risk Management Information Technology CITY CLERK Records Management Public Information Elections RECREATION & PARKS Park Facilities Staffing Point Vicente Interpretive Center Special Events REACH Program PUBLIC SAFETY L.A. County Sheriff L.A. County Fire Animal Control Emergency Preparedness FINANCE Financial Reporting & Budget Accounts Payable/Receivable Payroll Purchasing COMMUNITY DEVELOPMENT Planning/Zoning Building & Safety/Geology Code Enforcement View Restoration PUBLIC WORKS Street Maintenance Refuse/City Engineering Park/Building Maintenance Capital Projects XV COMMISSIONS & COMMITTEES Infrastructure Management Advisory Committee Oversight Committee for the Water Quality & Flood Protection Program CITY ATTORNEY Richards, Watson & Gershon 1 • • ATTACHMENT A Govemrnent Finance Officers Association Certificate of Achievement for Excellence in Financial Reporting Presented to City of Rancho Pains Verdes California For its Comprehensive Annual Financial Report for the Fiscal Year Ended June 30, 2014 Executive Director/CEO xvi A-19 ATTACHMENT A xvii A-20 ATTACHMENT A FINANCIAL SECTION A-21 ATTACHMENT A Vavrinek, Trine, Day & Co., LLP ur,r.4.1 Certified Public Accountants ,11104 9 04017 NO W.11111 711 Ice] 7 04 03 114y The Honorable City Council of the City of Rancho Palos Verdes Rancho Palos Verdes, California Report on the Financial Statements We have audited the accompanying financial statements of the governmental activities, the business -type activities, each major fund, and the aggregate remaining fund information of the City of Rancho Palos Verdes, California (City), as of and for the year ended June 30, 2015, and the related notes to the financial statements, which collectively comprise the City's basic financial statements as listed in the table of contents. Management's Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error. Auditors' Responsibility Our responsibility is to express opinions on these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity's preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity's internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions. 2 10681 Foothill Blvd., Suite 300 Rancho Cucamonga, CA 91730 Tel: 909.466.4410 www.vtdcpa.com Fax: 909.466.4431A-22 ATTACHMENT A Opinions In our opinion, the financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities, the business -type activities, each major fund, and the aggregate remaining fund information of the City, as of June 30, 2015, and the respective changes in financial position, and where applicable, cash flows thereof, and the respective statements of revenues, expenditures, and changes in fund balance — budget and actual for the general fund and street maintenance fund for the year then ended, in accordance with accounting principles generally accepted in the United States of America. Emphasis of Matter As described in Note 1 to the financial statements, the City adopted Governmental Accounting Standards Board (GASB) Statements No. 68, Financial Reporting for Pensions - an amendment of GASB Statements No. 27, and No. 71, Pension Transition for Contributions Made Subsequent to the Measurement Date - an amendment of GASB Statement No. 68, effective July 1, 2014. This resulted in a restatement of beginning net position as disclosed in Note 15 to the financial statements. Our opinion is not modified with respect to this matter. Other Matters Required Supplementary Information Accounting principles generally accepted in the United States of America require that the management's discussion and analysis on pages 7 through 16, the schedule of the proportionate share of the net pension liability, and the schedule of contributions on pages 76 and 77 be presented to supplement the basic financial statements. Such information, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management's responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance. Other Information Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the City's basic financial statements. The introductory section, combining and individual non -major fund financial statements and budgetary comparison schedules, and statistical section are presented for purposes of additional analysis and are not a required part of the basic financial statements. The combining and individual non -major fund financial statements and budgetary comparison schedules are the responsibility of management and were derived from and relate directly to the underlying accounting and other records used to prepare the basic financial statements. Such information has been subjected to the auditing procedures applied in the audit of the basic financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the basic financial statements or to the basic financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the combining and individual non -major fund statements and budgetary comparison schedules are fairly stated, in all material respects, in relation to the basic financial statements as a whole. The introductory and statistical sections have not been subjected to the auditing procedures applied in the audit of the basic financial statements, and accordingly, we do not express an opinion or provide any assurance on them. A-23 ATTACHMENT A Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated December 21, 2015, on our consideration of the City's internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the City's internal control over financial reporting and compliance. Cala� Rancho Cucamonga, California December 21, 2015 4 A-24 ATTACHMENT A MANAGEMENT'S DISCUSSION & ANALYSIS A-25 Men ATTACHMENT A CITY OF RANCHO PALOS VERDES MANAGEMENT'S DISCUSSION AND ANALYSIS YEAR ENDED JUNE 30, 2015 The Management of the City of Rancho Palos Verdes offers readers of the City of Rancho Palos Verdes' Financial Statements this narrative overview and analysis of the City's financial activities for the Fiscal Year ended June 30, 2015. 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-xii of this report. Financial Highlights The assets and deferred outflows of resources of the City of Rancho Palos Verdes exceed its liabilities and deferred inflows of resources at the close of the Fiscal Year ended June 30, 2015, by $209,807,007 (Net Position). Of this amount, $47,541,973 (Unrestricted Net Position) may be used to meet the City's ongoing obligations to its citizens and creditors. The remaining amount is invested in capital assets or is otherwise nonexpendable, and is therefore not available to meet the City's obligations. The City's Total Net Position increased by $2,034,543. The primary factors for the increase are discussed below. As of June 30, 2015, the City's Governmental Funds reported combined ending Fund Balances of $50,008,195, an increase of $3.3 million. Additional transient occupancy tax was accumulated for future capital improvement projects. As of June 30, 2015, unassigned fund balance for the General Fund was $16,054,880 or 85% of General Fund expenditures. About $15.1 million of this amount constitutes the City Council's General Fund Reserve (rainy day fund). Due to the City Council's reserve policy, the unassigned fund balance has historically been maintained at or above the policy threshold level of 50% of annually budgeted General Fund expenditures. 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 Position presents information on all of the City's assets, deferred outflows of resources, liabilities, and deferred inflows of resources, with 7 A-27 ATTACHMENT A CITY OF RANCHO PALOS VERDES MANAGEMENT'S DISCUSSION AND ANALYSIS YEAR ENDED JUNE 30, 2015 the difference between the two reported as Net Position. Over time, increases or decreases in net position 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 position changed during the most recent Fiscal Year. All changes in net position are reported as soon as the underlying event giving rise to the change occurs, regardless of the timing of related cash flows. Thus, revenues and expenses are reported in this statement for some items that will only result in cash flows in future fiscal periods (e.g. uncollected taxes and earned but unused vacation leave). Both the Government -Wide Financial Statements distinguish functions of the City that are principally supported by taxes and intergovernmental revenues (governmental activities) from other functions that are intended to recover all or a significant portion of their costs through user fees and charges (business -type activities). The governmental activities of the City include general government, public safety, public works, community development and parks and recreation. The City's business -type activities include only the Water Quality and Flood Protection program for renewal and maintenance of the City's storm drain facilities. 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 Improvement Authority for which the City of Rancho Palos Verdes is financially accountable. Financial information for this Component Unit has been included as an integral part of the primary government. The Government -Wide Financial Statements can be found on pages 19-21 of this report. Fund Financial Statements. A Fund is a grouping of related accounts that is used to maintain control over resources that have been segregated for specific activities or objectives. The City of Rancho Palos Verdes, like other State and local governments, uses fund accounting to ensure and demonstrate compliance with finance -related legal requirements. All of the Funds of the City can be divided into three categories: Governmental Funds, Proprietary Funds, and Fiduciary Funds. Governmental Funds. Governmental Funds are used to account for essentially the same functions reported as governmental activities in the Government -Wide Financial Statements. However, unlike the Government -Wide Financial Statements, Governmental Fund Financial Statements focus on near-term inflows and outflows of spendable resources, as well as on balances of spendable resources available at the end of the Fiscal Year. Such information may be useful in evaluating a government's near-term financing requirements. 8 A-28 ATTACHMENT A CITY OF RANCHO PALOS VERDES MANAGEMENT'S DISCUSSION AND ANALYSIS YEAR ENDED JUNE 30, 2015 Because the focus of Governmental Funds is narrower than that of the Government -Wide Financial Statements, it is useful to compare the information presented for Governmental Funds with similar information presented for governmental activities in the Government -Wide Financial Statements. By doing so, readers may better understand the long-term impact of the government's near- term financing decisions. The Governmental Balance Sheet and Governmental Fund Statement of Revenues, Expenditures, and Changes in Fund Balances provide a reconciliation to facilitate this comparison between Governmental Funds and governmental activities. The City of Rancho Palos Verdes maintained 27 individual Governmental Funds during the Fiscal Year ended June 30, 2015. 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, and the Capital Improvements Fund, all of which are considered to be major funds. Data from the other 24 Governmental Funds are combined into a single, aggregated presentation. Individual fund data for each of these Other Governmental Funds is provided in the form of combining statements elsewhere in this report. The City of Rancho Palos Verdes adopts an annual appropriated budget for each of its Governmental Funds. A budgetary comparison statement has been provided for each Governmental Fund to demonstrate compliance with this budget. The basic Governmental Fund Financial Statements can be found on pages 22-30 of this report. Proprietary Funds. The City of Rancho Palos Verdes maintains two types of Proprietary Funds. Enterprise Funds are used to report the same functions presented as business -type activities in the Government -Wide Financial Statements. The City uses an Enterprise Fund to account for its Water Quality and Flood Protection Program. Internal Service Funds are an accounting device used to accumulate and allocate costs internally among the City's various functions. The City uses Internal Service Funds to account for its fleet of vehicles, computer systems, furniture and equipment, Employee Benefits, and Civic Center building replacement/improvements. Because these services predominantly benefit the governmental function, they have been included within governmental activities in the Government -Wide Financial Statements. Proprietary Fund Financial Statements provide the same type of information as the Government -Wide Financial Statements, only in more detail. These statements can be found on pages 31-33 of this report. The Proprietary Fund Financial Statements provide separate information for the Enterprise Fund and the Internal Service Funds. The Enterprise Fund is presented as a single major fund of the City, while the Internal Service Funds are combined and presented as a single, 9 A-29 ATTACHMENT A CITY OF RANCHO PALOS VERDES MANAGEMENT'S DISCUSSION AND ANALYSIS YEAR ENDED JUNE 30, 2015 aggregated presentation in the Statement. Individual fund data for the Internal Service Funds is provided in the form of combining statements elsewhere in this report. Fiduciary Fund. The City is a fiduciary for the Successor Agency to the Rancho Palos Verdes Redevelopment Agency (the "Successor Agency"). The City is responsible for ensuring that the assets reported in the Successor Agency's private -purpose trust fund are only: 1) used to extinguish the obligations of the former RDA; or 2) transferred to another agency pursuant to state redevelopment dissolution law. All of the fiduciary activities are reported in a separate Statement of Fiduciary Net Position and Statement of Changes in Fiduciary Net Position. We exclude these activities from the City's Government -Wide Financial Statement because the City cannot use these assets to finance its operations. Individual Fiduciary Fund statements can be found on pages 34-35 of this report. Notes to the Financial Statements. The notes provide additional information that is essential to a full understanding of the data provided in the Government -Wide and Fund Financial Statements. The notes to the financial statements can be found on pages 38-73 of this report. Other information. The combining statements referred to earlier in connection with Other Governmental Funds and Internal Service Funds are presented immediately following the Notes to the Financial Statements. Combining and individual fund statements and schedules can be found on pages 76-119 of this report. Government -wide Financial Analysis As noted earlier, net position 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 and deferred outflows of resources exceeded liabilities and deferred inflows of resources by $209,807,006 at June 30, 2015. By far, the largest portion of the City's Net Position (72%) reflects its net investment in Capital Assets (e.g. Land, Infrastructure, Buildings, and Equipment). The City uses these Capital Assets to provide services to its citizens; consequently, these assets are not available for future spending. 10 A-30 ATTACHMENT A CITY OF RANCHO PALOS VERDES MANAGEMENT'S DISCUSSION AND ANALYSIS YEAR ENDED JUNE 30, 2015 City of Rancho Palos Verdes Net Position An additional portion of the City's Net Position ($11,646,676 or about 6%) represents nonexpendable resources subject to external restrictions. The remaining balance of Unrestricted Net Position ($47,541,973 or about 23%) may be used to meet the government's ongoing obligations to its citizens and creditors. Total current and other assets increased by $4.2 million. This was primarily due to the accumulation of additional transient occupancy tax to fund future capital improvement projects. Capital assets increased by $6.6 million primarily due to grant -funded construction of projects and acquisition of land. Other liabilities increased by $1.9 million. At June 30, 2014, the City's Business -type Activity had a significant payable due to the contractor for the San Ramon Canyon stabilization project. Governmental Activities. Governmental Activities increased the City's Net Position by $407,506. 11 A-31 Governmental Activities Business -type Activities Total June 30, 2015 June 30, 2014 June 30, 2015 June 30, 2014 June 30, 2015 June 30, 2014 Current and other assets Capital assets $ 67,162,047 119,450,510 $ 62,769,636 114,426,541 $ 5,847,529 31,167,848 $ 6,085,923 29,557,317 $ 73,009,576 150,618,358 $ 68,855,559 143,983,858 Total assets 186, 612, 557 177,196,177 37, 015, 377 35, 643, 240 223, 627, 934 212, 839, 417 Deferred outflows of resources 793,750 - 793,750 - Long-term liabilities outstanding Other liabilities 6,067,063 6,069,199 350,474 3,947,879 513,700 768,600 6,067,063 6,582,899 350,474 4,716,479 Total liabilities 12,136,262 4,298,353 513,700 768,600 12,649,962 5,066,953 Deferred inflows of resources 1,964,715 - - - 1,964,715 - Net Investment in capital assets Restricted Unrestricted 119,450,510 11,646,676 42,208,144 114,426,541 11,792,009 46,679,274 31,167,848 - 5,333,829 29,557,317 - 5,317,323 150,618,358 11,646,676 47,541,973 143,983,858 11,792,009 51,996,597 Total net position $ 173,305,330 $ 172,897,824 $ 36,501,677 $ 34,874,640 $ 209,807,007 $ 207,772,464 An additional portion of the City's Net Position ($11,646,676 or about 6%) represents nonexpendable resources subject to external restrictions. The remaining balance of Unrestricted Net Position ($47,541,973 or about 23%) may be used to meet the government's ongoing obligations to its citizens and creditors. Total current and other assets increased by $4.2 million. This was primarily due to the accumulation of additional transient occupancy tax to fund future capital improvement projects. Capital assets increased by $6.6 million primarily due to grant -funded construction of projects and acquisition of land. Other liabilities increased by $1.9 million. At June 30, 2014, the City's Business -type Activity had a significant payable due to the contractor for the San Ramon Canyon stabilization project. Governmental Activities. Governmental Activities increased the City's Net Position by $407,506. 11 A-31 ATTACHMENT A CITY OF RANCHO PALOS VERDES MANAGEMENT'S DISCUSSION AND ANALYSIS YEAR ENDED JUNE 30, 2015 City of Rancho Palos Verdes Changes in Net Position Restatement of Net Position Governmental Business -type Activities (1) Activity Total Changes in net position 7,366,709 1,627,035 8,993,744 Net position - beginning of year, as restated 165,938,621 34,874,640 200,813,261 Net position - end of year $173,305,330 $36,501,675 $209,807,005 (1) Governmental Activities Only - restated due to GASB 68 Governmental Activities Net Position only increased $0.4 million primarily due to the Pension Liability being added to the balance sheet as required by GASB 68. 12 A-32 Governmental Business -type Activities Activities Total June 30, 2015 June 30, 2014 June 30, 2015 June 30, 2014 June 30, 2015 June 30, 2014 Program revenues: Charges for services $ 2,785,003 $ 2,120,791 $ 1,368,568 $ 1,360,907 $ 4,153,571 $ 3,481,698 Operating contributions and grant 2,274,130 2,506,016 - - 2,274,130 2,506,016 Capital contributions and grants 1,230,131 2,911,817 1,212,995 6,114,956 2,443,126 9,026,773 General revenues: Property taxes 12,451,633 11,991,144 - - 12,451,633 11,991,144 Othertaxes 12,151,475 11,989,460 - - 12,151,475 11,989,460 Other 2,895,591 4,239,613 467,900 10,982 3,363,491 4,250,595 Total revenues 33,787,963 35,758,841 3,049,463 7,486,845 36,837,426 43,245,686 Expenses: Administration 7,048,493 7,530,278 - - 7,048,493 7,530,278 Public safety 4,670,441 4,429,312 4,670,441 4,429,312 Public works 10,770,499 9,376,755 10,770,499 9,376,755 Community development 2,071,920 1,927,027 2,071,920 1,927,027 Parks and recreation 1,669,434 1,368,648 1,669,434 1,368,648 Non -departmental 190,467 35,000 - - 190,467 35,000 Water Quality Flood Protection - - 1,422,428 658,431 1,422,428 658,431 Total expenses 26,421,254 24,667,020 1,422,428 658,431 27,843,682 25,325,451 Net of transfer in / out - - - - - - Decrease / Increase in net position 7,366,709 11,091,821 1,627,035 6,828,414 8,993,744 17,920,235 Extraordinary gain/(loss) - - - - - - Decrease / Increase in net position 7,366,709 11,091,821 1,627,035 6,828,414 8,993,744 17,920,235 Net position - beginning of fiscal year 165,938,621 161,806,003 34,874,640 28,046,226 200,813,261 189,852,229 Net position - end of fiscal year $ 173,305,330 $ 172,897,824 $ 36,501,675 $ 34,874,640 $ 209,807,005 $ 207,772,464 Restatement of Net Position Governmental Business -type Activities (1) Activity Total Changes in net position 7,366,709 1,627,035 8,993,744 Net position - beginning of year, as restated 165,938,621 34,874,640 200,813,261 Net position - end of year $173,305,330 $36,501,675 $209,807,005 (1) Governmental Activities Only - restated due to GASB 68 Governmental Activities Net Position only increased $0.4 million primarily due to the Pension Liability being added to the balance sheet as required by GASB 68. 12 A-32 ATTACHMENT A CITY OF RANCHO PALOS VERDES MANAGEMENT'S DISCUSSION AND ANALYSIS YEAR ENDED JUNE 30, 2015 Revenues by Source — Governmental Activities property 37% othertaxes 36% her ;off charges for services 8% operating ontributions and grants 7% wi iu iumions and grants 4% Business -Type Activities. Business -type activities increased the City's net position by about $1.6 million. Financial Analysis of Governmental Funds As of the end of the current Fiscal Year, the City's Governmental Funds reported combined ending Fund Balances of $50,008,194, an increase of $3.3 million in comparison with the prior year. Approximately 95% of the combined ending Fund Balances (about $47.6 million) constitutes spendable fund balance. The combined spendable fund balance includes negative unassigned fund deficits of $47,302 for the Measure A special revenue fund and $11,624 for the Community Development Block Grant. The remainder of the combined ending Fund Balances is either non - spendable due to outside legal restrictions ($2.35 million), or non -spendable in the form of prepaid items and inventory. The General Fund is the chief operating fund of the City of Rancho Palos Verdes. At the end of the current fiscal year, the unassigned fund balance of the General Fund was $16,054,880, while total Fund Balance reached $16,652,565. As a measure of the General Fund's liquidity, it may be useful to compare both Unassigned Fund Balance and Total Fund Balance to total fund uses (expenditures and transfers out). Unassigned Fund Balance represents 59% of total General Fund uses, while total Fund Balance represents 61% of that same amount. During Fiscal Year 14-15, the fund balance of the City's General Fund increased by $1,034,080. This was primarily due to permanent expenditure savings. The Street Maintenance Fund Balance increased by $40,820, primarily due to permanent expenditure savings. 13 A-33 ATTACHMENT A CITY OF RANCHO PALOS VERDES MANAGEMENT'S DISCUSSION AND ANALYSIS YEAR ENDED JUNE 30, 2015 The Capital Improvement Projects (CIP) Fund had an ending fund balance of $20,447,428. Of this amount, $15.9 million is held for projects continued from FY14-15 to FY15-16. Financial Analysis of Proprietary Funds The City's Proprietary Funds provide the same type of information found in the Government -Wide Financial Statements, but in more detail. Unrestricted Net Position of the Enterprise Fund at the end of the year amounted to $5,333,829. Unrestricted Net Position of the Internal Service Funds at the end of the year amounted to $3,125,532. The total growth in Proprietary Fund type net position was $1,019,733 or about 12% of unrestricted Net Position. General Fund Budgetary Highlights The General Fund revenue budget was increased by a net amount of $938,567, primarily due to updating estimates for tax revenue and permit revenue. The difference between original budgeted expenditures and the final amended budget was an increase of $567,711; and is briefly summarized as follows: v An increase of $1,042,056 was attributable to appropriations continued from FY13-14. ➢ A decrease of $531,765 was attributable to appropriations continued to FY15-16. ➢ Other immaterial adjustments resulted in net increases of $57,420. The City Council authorized additional General Fund transfers of about $1.0 million for the prior year's favorable expenditure variance, as required by the City Council's Reserve Policy. Capital Asset and Debt Administration Capital Assets. The City's investment in Capital Assets for its Governmental activities as of June 30, 2015, amounts to $119,450,510 (net of accumulated depreciation). This investment in capital assets includes land, buildings, park improvements, roadways, sewer, storm drains, vehicles, computer equipment, furniture, other equipment, and construction in progress. During the current fiscal year, the City's investment in governmental capital assets increased by about $5,023,969 or about 4%. Major capital asset events during the current Fiscal Year included the following: 14 A-34 ATTACHMENT A CITY OF RANCHO PALOS VERDES MANAGEMENT'S DISCUSSION AND ANALYSIS YEAR ENDED JUNE 30, 2015 ➢ Depreciation of $4.0 million was recorded for the City's Capital Assets. ➢ A total of $8.7 million of construction in process was added for various projects. ➢ Land was purchased with grant funding. The Capital Assets (net of accumulated depreciation) for Business -type activities as of June 30, 2015 was $31,167,848. City of Rancho Palos Verdes Capital Assets (net of depreciation) Additional information on the City's Capital Assets can be found in Note #4 on pages 51-52 of this report. Long-term debt. Verdes had total Absences. At the end of the current Fiscal Year, the City of Rancho Palos debt outstanding of $352,743 for Employee Compensated City of Rancho Palos Verdes Outstanding Debt Governmental Activities June 30, 2015 June 30, 2014 Employee compensated absences 352,743 350,474 Total $ 352,743 $ 350,474 15 A-35 Go\emmental Business -type Actihities Acti\ ties Total June 30, 2015 June 30, 2014 June 30, 2015 June 30, 2014 June 30, 2015 June 30, 2014 Capital assets not being depreciated Land $ 42,087,575 $ 41,932,775 $ 1,428,243 $ 1,428,243 $ 43,515,818 $ 43,361,018 Construction in progress 4,010,354 1,366,748 86,486 17,249,957 4,096,840 18,616,705 Total capital assets not being depreciated 46,097,929 43,299,523 1,514,729 18,678,200 47,612,658 61,977,723 Capital assets being depreciated, net Buildings 6,353,169 6,803,871 - - 6,353,169 6,803,871 Vehicles 87,937 67,838 87,937 67,838 Computer equipment 176,558 85,322 176,558 85,322 Furniture, fixtures and equipment 222,709 59,027 222,709 59,027 Infrastructure Roadway system 45,700,251 44,555,641 45,700,251 44,555,641 Sewer system 6,834,470 7,288,292 6,834,470 7,288,292 Storm drain system 9,179,025 9,429,504 29,653,119 10,879,117 38,832,144 20,308,621 Parks stem 4,798,462 2,837,523 - 4,798,462 2,837,523 Total capital assets being depreciated, net 73,352,581 71,127,018 29,653,119 10,879,117 103,005,700 82,006,135 Capital Assets, net $ 119,450,510 $ 114,426,541 $ 31,167,848 $ 29,557,317 $ 150,618,358 $ 143,983,858 Additional information on the City's Capital Assets can be found in Note #4 on pages 51-52 of this report. Long-term debt. Verdes had total Absences. At the end of the current Fiscal Year, the City of Rancho Palos debt outstanding of $352,743 for Employee Compensated City of Rancho Palos Verdes Outstanding Debt Governmental Activities June 30, 2015 June 30, 2014 Employee compensated absences 352,743 350,474 Total $ 352,743 $ 350,474 15 A-35 ATTACHMENT A CITY OF RANCHO PALOS VERDES MANAGEMENT'S DISCUSSION AND ANALYSIS YEAR ENDED JUNE 30, 2015 The City's total debt increased by $2,269 (1 %) during the current Fiscal Year, due to additional accrued leave taken by employees. State statutes limit the amount of general obligation debt a governmental entity may issue to 15 percent of its total assessed valuation. The current debt limitation for the City of Rancho Palos Verdes is $1,583,404,000. Additional information on the City's long-term debt can be found in Note #6 on page 54 of this report. Economic Factors and Next Year's Budgets and Rates ➢ Property tax revenue accounts for about 37 percent of Government -Wide revenues. Local property values remain strong, and the City's property assessments grew by 3.25% for FY14-15. ➢ The Consumer Price Index for Los Angeles County increased by 0.8% for the 12 months ended June 2015. The City's original FY15-16 General Fund expenditure budget increased by 2.2% when compared to the original FY14-15 budget. Revenue in excess of budgeted expenditures (about $4.5 million) has been programmed for capital improvement projects. 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 at 30940 Hawthorne Boulevard, Rancho Palos Verdes, CA 90275 or finance(a_rpvca.gov. 16 A-36 ATTACHMENT A BASIC FINANCIAL STATEMENTS 17 A-37 ATTACHMENT A FTS 18 A-38 ATTACHMENT A CITY OF RANCHO PALOS VERDES STATEMENT OF NET POSITION June 30, 2015 ASSETS CURRENT ASSETS: Cash and investments Receivables: Taxes Interest Notes Due from other government agencies Other Inventory Prepaid items TOTAL CURRENT ASSETS NONCURRENT ASSETS: Receivable from Successor Agency Allowance for Successor Agency receivable Capital assets Land Construction in process Capital assets, net accumulated depreciation Property and equipment Building and improvements Infrastructure TOTAL NONCURRENT ASSETS TOTAL ASSETS DEFFERED OUTFLOWS OF RESOURCES LIABILITIES CURRENT LIABILITIES: Accounts payable and accrued liabilities Retentions payable Unearned revenue Deposits payable TOTAL CURRENT LIABILITIES LONG-TERM LIABILITIES: Due within one year Due beyond one year Net Pension Liability TOTAL LONG-TERM LIABILITIES TOTAL LIABILITIES DEFFERED INFLOWS OF RESOURCES NET POSITION Net investment in capital assets Restricted Expendable Nonexpendable Unrestricted TOTAL NET POSITION See accompanying notes to financial statements. Governmental Business -type 43,515,818 Activities Activities Total 487,205 - $ 56,530,940 $ 5,096,785 $ 61,627,725 1,073,692 - 1,073,692 32,153 3,246 35,399 7,823,879 - 7,823,879 162,226 747,498 909,724 766,569 - 766,569 38,034 - 38,034 734,554 - 734,554 67,162,047 5,847,529 73,009,576 10,457,065 10,457,065 (10,457,065) (10,457,065) 42,087,575 1,428,243 43,515,818 4,010,354 86,486 4,096,840 487,205 - 487,205 6,353,169 - 6,353,169 66,512,207 29,653,119 96,165,326 119,450,510 31,167,848 150,618,358 186,612,557 37,015,377 223,627,934 793,750 - 793,750 5,307,619 472,549 5,780,168 284,629 41,151 325,780 88,560 - 88,560 388,391 - 388,391 6,069,199 513,700 6,582,899 289,476 - 289,476 63,267 - 63,267 5,714,320 - 5,714,320 6,067,063 - 6,067,063 12,136,262 513,700 12,649,962 1,964,715 - 1,964,715 119,450,510 31,167,848 150,618,358 1,855,476 1,855,476 9,791,200 9,791,200 42,208,144 5,333,829 47,541,973 $ 173,305,330 $ 36,501,677 $ 209,807,007 19 A-39 ATTACHMENT A CITY OF RANCHO PALOS VERDES STATEMENT OF ACTIVITIES For the year ended June 30, 2015 Functions/programs Expenses Governmental Activities: Administration $ 7,127,433 Public safety 4,670,441 Public works 10,691,559 Community development 2,071,920 Parks and recreation 1,669,434 Non -departmental 190,467 Total governmental activities 26,421,254 Business -type Activity: Program Revenues Operating Capital Charges for Grants and Grants and Services Contributions Contributions $ 107,969 $ 15,057 42,898 123,255 431,500 2,135,818 2,058,262 - 144,376 2,785,005 Water Quality Flood Protection 1,422,428 1,368,570 Total primary government $ 27,843,682 $ 4,153,575 $ 2,274,130 1,230,131 1,230,131 - 1,212,995 2,274,130 $ 2,443,126 General revenues: Taxes Property taxes Transient occupancy tax Sales tax Franchise tax Utility user tax Other taxes Investment income Unrestricted grants, contributions and other revenues Transfers Total general revenues and transfers Change in net position Net position - beginning of year, as restated Net position - end of year 20 A-40 ATTACHMENT A Net Revenue (Expense) and Changes in Net Position Governmental Business -type Activities Activity Total $ (7,004,407) $ - $ (7,004,407) (4,504,288) - (4,504,288) (6,894,110) - (6,894,110) (13,658) - (13,658) (1,525,058) - (1,525,058) (190,467) - (190,467) (20,131,988) - (20,131,988) (20,131,988) 1,159,137 1,159,137 1,159,137 (18,972,851) 12,451,632 - 12,451,632 4,812,130 - 4,812,130 1,757,889 - 1,757,889 2,044,398 - 2,044,398 1,972,671 - 1,972,671 1,564,387 - 1,564,387 121,974 10,260 132,234 3,231,256 - 3,231,256 (457,640) 457,640 - 27,498,697 467,900 27,966,597 7,366,709 1,627,037 8,993,746 165,938,621 34,874,640 200,813,261 $ 173,305,330 $ 36,501,677 $ 209,807,007 21 A-41 ATTACHMENT A CITY OF RANCHO PALOS VERDES BALANCE SHEET GOVERNMENTALFUNDS June 30, 2015 ASSETS Cash and investments Receivables: Taxes Interest Due from other government agencies Other Due from other funds Inventory Prepaid items Receivable from Successor Agency Allowance for Successor Agency receivable TOTAL ASSETS LIABILITIES Accounts payable and accrued liabilities Due to other funds Retentions payable Unearned revenue Deposits payable TOTAL LIABILITIES DEFERRED INFLOWS OF RESOURCES Unavailable revenue TOTAL DEFERRED INFLOWS OF RESOURCES FUND BALANCES Non -Spendable Endowment principal Reimbursement settlement agreement Prepaid items Inventory Habitat restoration Restricted Committed Assigned Unassigned TOTAL FUND BALANCES TOTAL LIABILITIES, DEFERRED INFLOWS AND FUND BALANCES See accompanying notes to financial statements. General Special Revenue Capital Projects Street Capital Maintenance Improvements $ 16,844,314 $ 1,998,447 $ 22,884,884 1,050,160 12,046 510 8,434 905 3,601 748,365 - 66,938 38,034 559,651 10,457,065 (10,457,065) $ 19,320,413 $ 2,002,558 $ 22,893,318 $ 2,179,312 $ 682,228 $ 2,180,362 11,585 7,517 265,527 88,560 388,391 2,667,848 689,745 2,445,889 559,651 38,034 97 - 1,312,716 20,447,429 16,054,880 16,652,565 1,312,716 20,447,429 $ 19,320,413 $ 2,002,558 $ 22,893,318 22 A-42 Other Total Governmental Governmental Funds Funds $ 11,714,307 $ 53,441,952 23,532 1,073,692 8,518 29,508 157,720 162,226 16,195 764,560 8,541,964 66,938 54,552 38,034 1,202,419 559,651 (58,926) 10,457,065 11,595,485 (10,457,065) $ 11,920,272 $ 56,136,561 $ 132,845 $ 5,174,747 56,797 56,797 284,629 88,560 388,391 189,642 5,993,124 135,145 135,242 135,145 135,242 750,000 750,000 1,000,000 1,000,000 559,651 38,034 105,476 105,476 8,541,964 9,854,680 54,552 54,552 1,202,419 21,649,848 (58,926) 15,995,954 11,595,485 50,008,195 $ 11,920,272 $ 56,136,561 ATTACHMENT A 23 A-43 ATTACHMENT A CITY OF RANCHO PALOS VERDES RECONCILIATION OF THE GOVERNMENTAL FUNDS BALANCE SHEET TO THE STATEMENT OF NET POSITION June 30, 2015 Fund balances - total governmental funds $ 50,008,195 Amounts reported for governmental activities in the Statement of Net Position are different because: Capital assets used in governmental activities are not current financial resources and, therefore, are not reported in the governmental funds balance sheet. 118,963,305 Receivables not available to pay for current period expenditures are reported as unavailable revenue in the funds. 135,242 Long-term notes receivable are not current available resources and, therefore, do not affect the governmental fund balance. 7,823,879 Long-term liabilities are not due and payable in the current period and, therefore, are not reported in the governmental funds. (352,743) The employee pension liability and related amounts are not due and payable in the current period and, therefore, are not reported in the governmental funds. (6,885,285) 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 Position. 3,612,737 Net position of governmental activities $ 173,305,330 See accompanying notes to financial statements. 24 A-44 ATTACHMENT A CITY OF RANCHO PALOS VERDES STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES GOVERNMENTALFUNDS For the year ended June 30, 2015 See accompanying notes to financial statements. 26 A-46 Special Revenue Capital Projects Street Capital General Maintenance Improvements REVENUES: Taxes $ 23,760,687 $ - $ - Licenses and permits 2,514,572 Revenue from other agencies 36,212 1,090,211 312,272 Charges for services 369,608 250 Fines and forfeitures 135,056 Use of money and property 585,126 2,472 36,014 Other revenues 683,592 25,649 TOTAL REVENUES 28,084,853 1,118,582 348,286 EXPENDITURES: Current Administration 5,135,472 Public safety 4,761,241 Public works 4,063,755 2,156,510 Community development 2,870,427 Parks and recreation 1,818,846 Non -departmental 190,467 Capital Outlay 8,696,608 TOTAL EXPENDITURES 18,840,208 2,156,510 8,696,608 EXCESS (DEFICIENCY) OF REVENUES OVER (UNDER) EXPENDITURES 9,244,645 (1,037,928) (8,348,322) OTHER FINANCING SOURCES (USES): Transfers in 364,049 1,078,749 11,753,919 Transfers out (8,574,614) (969,422) TOTAL OTHER FINANCING SOURCES (USES) (8,210,565) 1,078,749 10,784,497 NET CHANGE IN FUND BALANCE 1,034,080 40,821 2,436,175 FUND BALANCE - BEGINNING OF YEAR 15,618,485 1,271,895 18,011,254 FUND BALANCE - END OF YEAR $ 16,652,565 $ 1,312,716 $ 20,447,429 See accompanying notes to financial statements. 26 A-46 ATTACHMENT A Other Total Governmental Governmental Funds Funds $ 842,421 $ 24,603,108 2,514,572 2,355,315 3,794,010 57,643 427,501 135,056 29,374 652,986 1,667,691 2,376,932 4,952,444 34,504,165 1,821,471 5,135,472 4,761,241 8,041,736 2,870,427 1,818,846 190,467 8,696,608 1,821,471 31,514,797 3,130,973 2,989,368 328,700 13,525,417 (3,643,602) (13,187,638) (3,314,902) 337,779 (183,929) 3,327,147 11,779,414 46,681,048 $ 11,595,485 $ 50,008,195 27 A-47 ATTACHMENT A CITY OF RANCHO PALOS VERDES FUND BALANCES OF GOVERNMENTAL FUNDS TO THE STATEMENT OF ACTIVITIES For the year ended June 30, 2015 Net change in fund balances - total governmental funds $ 3,327,147 Amounts reported for governmental activities in the Statement of Activities are different because: Governmental funds report capital outlays as expenditures. However, in the Statement of Activities, the cost of those assets is allocated over their estimated useful lives as depreciation expense, or are allocated to the appropriate functional expense when the cost is below the capitalization threshold. Asset disposals are also not recognized in the governmental funds. This activity is reconciled as follows: Cost of assets capitalized 8,818,606 Depreciation expense (3,819,678) Loss on disposal of capital asset (249,976) Revenues in the Statement of Activities that do not provide current financial resources are not reported as revenues in the funds. (289,749) 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. 116,014 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. (2,269) Governmental funds report pension contributions as expenditures. However, in the Statement of Activities, pension expense is measured as the change in net pension liability and the amortization of deferred outflows and inflows related to pensions. This amount represents the net change in pension related amounts. 73,918 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 are reported with governmental activities. (607,304) Change in net position of governmental activities $ 7,366,709 See accompanying notes to financial statements. 28 A-48 ATTACHMENT A CITY OF RANCHO PALOS VERDES STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE BUDGET AND ACTUAL GENERALFUND For the year ended June 30, 2015 Public Safety Sheriff services 4,306,900 4,345,900 4,345,828 Variance with Special safety programs 96,700 106,700 98,528 Final Budget Animal control Budgeted Amounts 81,180 Positive - Original Final Actual (Negative) REVENUES: Total Public Safety 4,753,500 4,827,163 4,761,241 Taxes $ 23,158,300 $ 23,572,867 $ 23,760,687 $ 187,820 Licenses and permits 1,862,400 2,062,400 2,514,572 452,172 Revenue from other agencies - 18,000 36,212 18,212 Charges for services 415,500 415,500 369,608 (45,892) Fines and forfeitures 117,600 117,600 135,056 17,456 Use of money and property 650,240 650,240 585,126 (65,114) Other revenues 344,521 650,521 683,592 33,071 TOTAL REVENUES 26,548,561 27,487,128 28,084,853 597,725 EXPENDITURES: See accompanying notes to financial statements. Administration 29 City council 129,800 129,800 120,557 9,243 City manager 1,098,000 762,123 731,613 30,510 Legal services 990,000 990,000 856,190 133,810 City clerk 485,750 486,750 486,496 254 Community outreach 128,099 131,849 121,021 10,828 RPV TV 168,600 180,600 175,200 5,400 Risk management 400,000 400,000 396,292 3,708 Personnel 438,250 494,167 399,980 94,187 Finance 1,417,000 1,209,150 1,208,680 470 Information technology - data 594,800 577,800 551,771 26,029 Information technology - voice 96,000 86,000 87,672 (1,672) Total Administration 5,946,299 5,448,239 5,135,472 312,767 Public Safety Sheriff services 4,306,900 4,345,900 4,345,828 72 Special safety programs 96,700 106,700 98,528 8,172 Animal control 80,000 81,180 81,180 - Emergency preparedness 269,900 293,383 235,705 57,678 Total Public Safety 4,753,500 4,827,163 4,761,241 65,922 Public Works Public works administration 2,232,250 2,097,900 2,097,473 427 Traffic management 216,000 397,000 91,847 305,153 Storm water quality 496,000 606,495 278,332 328,163 Public building maintenance 612,300 632,300 576,139 56,161 Parks/trails/open space maintenance 1,331,100 1,801,248 988,184 813,064 Sewer maintenance 68,000 33,000 31,780 1,220 Total Public Works 4,955,650 5,567,943 4,063,755 1,504,188 See accompanying notes to financial statements. 29 A-49 ATTACHMENT A CITY OF RANCHO PALOS VERDES STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE BUDGET AND ACTUAL GENERALFUND For the year ended June 30, 2015 See accompanying notes to financial statements. 30 A-50 Variance with Final Budget Budgeted Amounts Positive Original Final Actual (Negative) Community Development Planning 1,505,040 1,503,311 1,375,122 128,189 Building & safety services 749,100 779,877 744,830 35,047 Code enforcement 218,700 218,700 207,064 11,636 View restoration/preservation 388,700 394,700 394,210 490 Geology 150,000 150,000 149,201 799 Total Community Development 3,011,540 3,046,588 2,870,427 176,161 Parks and Recreation Recreation administration 665,650 830,550 780,059 50,491 Recreation facilities 524,500 524,500 437,375 87,125 Special events 93,250 93,250 89,722 3,528 Point Vicente Interpretive Center 445,350 434,750 434,064 686 REACH 42,200 42,200 38,154 4,046 Support services 49,500 49,500 39,472 10,028 Total Parks and Recreation 1,820,450 1,974,750 1,818,846 155,904 Non -departmental - 190,467 190,467 - TOTAL EXPENDITURES 20,487,439 21,055,150 18,840,208 2,214,942 EXCESS (DEFICIENCY) OF REVENUES OVER (UNDER) EXPENDITURES 6,061,122 6,431,978 9,244,645 2,812,667 OTHER FINANCING SOURCES (USES): Transfers in 208,000 392,855 364,049 (28,806) Transfers out (7,584,506) (8,571,984) (8,574,614) (2,630) TOTAL OTHER FINANCING SOURCES (USES) (7,376,506) (8,179,129) (8,210,565) (31,436) NET CHANGE IN FUND BALANCE (1,315,384) (1,747,151) 1,034,080 2,781,231 FUND BALANCE - BEGINNING OF YEAR 15,618,485 15,618,485 15,618,485 - FUND BALANCE - END OF YEAR $ 14,303,101 $ 13,871,334 $ 16,652,565 $ 2,781,231 See accompanying notes to financial statements. 30 A-50 ATTACHMENT A 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, 2015 OTHER FINANCING SOURCES (USES) Transfers in 1,096,000 1,103,000 1,078,749 Variance with NET CHANGE IN FUND BALANCE (166,517) (203,517) 40,821 Final Budget FUND BALANCE - BEGINNING OF YEAR Budgeted Amounts 1,271,895 Positive FUND BALANCE - END OF YEAR Original Final Actual (Negative) REVENUES: Revenue from other agencies $ 1,094,552 $ 1,239,552 $ 1,090,211 $ (149,341) Charges for services 4,100 4,100 250 (3,850) Use of money and property 1,610 1,610 2,472 862 Other revenues 25,000 25,000 25,649 649 TOTAL REVENUES 1,125,262 1,270,262 1,118,582 (151,680) EXPENDITURES: Public Works Street landscape maintenance 1,704,279 1,851,279 1,521,068 330,211 Traffic signal maintenance 109,000 126,000 116,693 9,307 Portuguese Bend road maintenance 574,500 599,500 518,749 80,751 TOTAL EXPENDITURES 2,387,779 2,576,779 2,156,510 420,269 EXCESS (DEFICIENCY) OF REVENUES OVER (UNDER) EXPENDITURES (1,262,517) (1,306,517) (1,037,928) 268,589 OTHER FINANCING SOURCES (USES) Transfers in 1,096,000 1,103,000 1,078,749 (24,251) NET CHANGE IN FUND BALANCE (166,517) (203,517) 40,821 244,338 FUND BALANCE - BEGINNING OF YEAR 1,271,895 1,271,895 1,271,895 - FUND BALANCE - END OF YEAR $ 1,105,378 $ 1,068,378 $ 1,312,716 $ 244,338 See accompanying notes to financial statements. 31 A-51 CITY OF RANCHO PALOS VERDES STATEMENT OF NET POSITION PROPRIETARY FUNDS June 30, 2015 ASSETS CURRENT ASSETS: Cash and investments Receivables: Interest Due from other government agencies Other Prepaid items TOTAL CURRENT ASSETS NONCURRENT ASSETS: Capital assets, not being depreciated Land Construction in process Capital assets Property and equipment Infrastructure Accumulated depreciation TOTAL NONCURRENT ASSETS TOTAL ASSETS LIABILITIES CURRENT LIABILITIES: Accounts payable and accrued liabilities Retentions payable Due to other funds TOTAL LIABILITIES NET POSITION Net investment in capital assets Unrestricted TOTAL NET POSITION ATTACHMENT A Business -type Governmental Activity Activities Water Quality Internal Flood Protection Service Enterprise Fund Funds $ 5,096,785 $ 3,088,988 3,246 2,645 747,498 - - 2,009 - 174,903 5,847,529 3,268,545 1,428,243 86,486 11,813 1,600,407 31,700,469 (2,059,163) (1,113,202) 31,167,848 487,205 37,015,377 3,755,750 See accompanying notes to financial statements. 472,549 132,872 41,151 - - 10,141 513,700 143,013 31,167,848 487,205 5,333,829 3,125,532 $ 36,501,677 $ 3,612,737 32 A-52 ATTACHMENT A CITY OF RANCHO PALOS VERDES STATEMENT OF REVENUES, EXPENSES AND CHANGES IN NET POSITION PROPRIETARY FUNDS For the year ended June 30, 2015 OPERATING REVENUES: Charges for services OPERATING EXPENSES: Personnel services Materials and supplies Maintenance Depreciation TOTAL OPERATING EXPENSES OPERATING INCOME (LOSS) NON-OPERATING REVENUES: Other revenues Investment income TOTAL NON-OPERATING REVENUES INCOME (LOSS) BEFORE TRANSFERS TRANSFERS Transfers in Transfers out TOTALTRANSFERS CHANGE IN NET POSITION NET POSITION - BEGINNING OF YEAR NET POSITION - END OF YEAR Business -type Governmental Activity Activities Water Quality Internal Flood Protection Service Enterprise Fund Funds $ 1,368,570 $ 2,937,270 131,835 2,049,468 - 207,799 650,182 360,645 640,411 141,092 1,422,428 2,759,004 (53,858) 178,266 1,212,995 - 10,260 9,849 1,223,255 9,849 1,169,397 188,115 820,000 149,422 (362,360) (944,841) 457,640 (795,419) 1,627,037 (607,304) 34,874,640 4,220,041 $ 36,501,677 $ 3,612,737 See accompanying notes to financial statements. 33 A-53 ATTACHMENT A CITY OF RANCHO PALOS VERDES STATEMENT OF CASH FLOWS PROPRIETARY FUNDS For the year ended June 30, 2015 CASH FLOWS FROM OPERATING ACTIVITIES: Receipts from interfund services provided Receipts from storm drain user fees Payments to suppliers Payments to employees NET CASH PROVIDED (USED) BY OPERATING ACTIVITIES CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES: Acquisition and construction of capital assets Due to other funds Net transfers from/(to) other funds NET CASH PROVIDED (USED) BY CAPITAL AND FINANCING ACTIVITIES CASH FLOWS FROM INVESTING ACTIVITIES: Interest received on investments NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS CASH AND CASH EQUIVALENTS - BEGINNING OF YEAR CASH AND CASH EQUIVALENTS - END OF YEAR RECONCILIATION OF OPERATING LOSS TO NET CASH PROVIDED (USED) BY OPERATING ACTIVITIES Operating income (loss) Adjustments to reconcile operating income (loss) to net cash used by operating activities: Depreciation Changes in operating assets and liabilities: Decrease (increase) in other receivable Decrease (increase) in prepaid items Increase (decrease) in accrued liabilities NET CASH PROVIDED (USED) BY OPERATING ACTIVITIES See accompanying notes to financial statements. Business -type Governmental Activity Activities Water Quality Internal Flood Protection Service Enterprise Fund Funds $ - $ 2,937,270 1,368,568 - (887,601) (523,056) (131,835) (2,094,481) 349,132 319,733 (811,472) (416,110) - 10,141 457,640 (795,419) (353,832) (1,201,388) 9,342 8,994 4,642 (872,661) 5,092,143 3,961,649 $ 5,096,785 $ 3,088,988 $ (53,858) $ 178,266 640,411 141,092 17,481 1,478 - (58,793) (254,900) 57,690 $ 349,134 $ 319,733 34 A-54 ATTACHMENT A CITY OF RANCHO PALOS VERDES STATEMENT OF FIDUCIARY NET POSITION FIDUCIARY FUND June 30, 2015 TOTAL ASSETS 1,155,782 LIABILITIES Successor Agency to the 863 Rancho Palos Verdes Redevelopment Agency Due within one year - Private -Purpose Trust Fund ASSETS Due within one year - Cash and investments $ 462,425 Receivables: bond payable Interest 281 Notes 54,932 Prepaid items 638,144 TOTAL ASSETS 1,155,782 LIABILITIES Accounts payable and accrued liabilities 863 Short-term liability Due within one year - Portuguese Bend 32,237 Due within one year - Abalone Cove 15,648 Due within one year - bond payable 180,000 Long-term liabilities Due beyond one year - Portuguese Bend 7,007,639 Due beyond one year - Abalone Cove 3,401,541 Due beyond one year - bond payable 4,475,000 TOTAL LIABILITIES 15,112,928 NET POSITION (DEFICIT) HELD IN TRUST $ (13,957,146) See accompanying notes to financial statements. 35 A-55 ATTACHMENT A CITY OF RANCHO PALOS VERDES STATEMENT OF CHANGES IN FIDUCIARY NET POSITION FIDUCIARY FUND For the year ended June 30, 2015 ADDITIONS Taxes Use of money and property TOTAL ADDITIONS DEDUCTIONS Administration Debt interest and fiscal charges TOTAL DEDUCTIONS EXTRAORDINARY GAIN CHANGE IN NET POSITION NET POSITION (DEFICIT) - BEGINNING OF YEAR NET POSITION (DEFICIT) - END OF YEAR See accompanying notes to financial statements. Successor Agency to the Rancho Palos Verdes Redevelopment Agency Private -Purpose Trust Fund $ 609,806 1,216 611,022 217,331 268,827 486,158 1,590,826 1,715,690 (15,672,836) $ (13,957,146) 36 A-56 ATTACHMENT A NOTES TO FINANCIAL STATEMENTS 37 A-57 ATTACHMENT A CITY OF RANCHO PALOS VERDES NOTES TO FINANCIAL STATEMENTS JUNE 30, 2015 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 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 City sponsored the formation of a Redevelopment Agency in 1984 pursuant to the State of California Health and Safety Code Section 33000 entitled "Community Redevelopment Law" with a purpose to finance long-term capital improvements designed to eliminate physical and economic blight in a project area through stabilization of hazardous landslides. Effective February 1, 2012, pursuant to state law, the Redevelopment Agency was dissolved and its assets were transferred to a Successor Agency for the purpose of winding down the business of the former Redevelopment Agency (see Note #14). The Successor Agency is a separate legal entity that is a related organization to the City; but is not a component unit, as described more fully below. 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 former Redevelopment Agency, and the County of Los Angeles (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 former Redevelopment Agency. The criteria used in determining the scope of the reporting entity are based on the provisions of GASB Statement 61. The City of Rancho Palos Verdes is the primary government unit. Component units are legally separate organizations for which the elected officials of the primary government are financially accountable. In addition, component units can be other organizations for which the nature and significance of their relationship with the primary government are such that exclusion would cause the reporting entity's financial statements to be misleading. The City has accounted for the Authority as a "blended" component unit. The balances and transactions of the Authority are reported in separate Permanent and Special Revenue Funds; and are included in the government -wide statements. 38 A-58 ATTACHMENT A CITY OF RANCHO PALOS VERDES NOTES TO FINANCIAL STATEMENTS JUNE 30, 2015 The following specific criteria were used in determining that the Authority is a "blended" component unit. 1. The members of the City Council also act as members of the Authority Board. 2. The Authority is fiscally dependent on the City, and there is potential for the Authority to impose specific financial burdens on the City; as the City subsidizes maintenance operations performed by the Authority and the City is legally liable for facilities maintained by the Authority. Separately issued financial statements for the Authority may be obtained at the City's administrative offices. The Successor Agency does not meet the criteria for reporting as a component unit, as it is not fiscally dependent on the City. In addition, the business of the Successor Agency must be approved by an independently appointed Oversight Board and the California Department of Finance. Therefore, the balances and transactions of the Successor Agency are reported as a separate Fiduciary Fund (private purpose trust fund), and are not included in the government -wide statements. Participation in Public Entity Jointly Controlled Government The City is a member of the Palos Verdes Peninsula Transit Joint Powers Authority (the Transit Authority). The Transit Authority is comprised of three member cities and is organized under a Joint Powers Agreement pursuant to the California Government Code. The purpose of the Authority is to study, implement, and provide a public transit system within and around the Palos Verdes Peninsula. These transit services include Palos Verdes Transit, Dial -A -Ride, and a fixed route shuttle service. Periodic deposits are paid by member Cities and are adjusted retrospectively to cover costs. Costs are prorated among all participating Cities based on population. The City does not have an equity interest in the Transit Authority; therefore, no amount has been reported in the Statement of Net Position. However, the City does have an ongoing financial interest, because the City is able to influence the operations of the Authority so that the Authority uses its resources on behalf of the City. Also, an ongoing financial responsibility exists because the Authority is dependent on continued funding from the City. The condensed financial information of the Authority has not been reproduced in this report, but is available upon request from the Authority by emailing pvtransit(apalosverdes.com or mailing a request to P.O. Box 2656, Palos Verdes Peninsula, CA 90274. B. 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 39 A-59 ATTACHMENT A CITY OF RANCHO PALOS VERDES NOTES TO FINANCIAL STATEMENTS JUNE 30, 2015 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. The financial resources accounted for in the General Fund may be used to fund any City program. • Special Revenue Funds — Used to account for the proceeds of specific revenue sources that are restricted by law or administrative action for specified purposes. • Capital Projects Funds — Used to account for financial resources used for the construction of specific capital projects. • Permanent Funds — Used to account for resources legally restricted to the extent that only earnings, and not principal, may be used for purposes that support the reporting government's programs. Proprietary Fund Types • Enterprise Fund — Used to finance and account for the acquisition, operation, and maintenance of the City's facilities and services; which are supported primarily by user charges. • Internal Service Funds — Used to centralize the accounting for employee benefits costs, purchases and maintenance of equipment on behalf of all City departments, and the accumulation of funds for replacement of certain buildings on behalf of the City. Fiduciary Fund Type • Private -Purpose Trust Fund — Used to account for property tax revenue allocated to the Successor Agency and payments of the obligations of the former Redevelopment Agency. C. Basis of Accounting/Measurement Focus Government — Wide Financial Statements The City's Government -Wide Financial Statements include a "Statement of Net Position" and a "Statement of Activities". These two statements present summaries of Governmental and Business -type Activities for the City; and do not include fiduciary activities. These statements are presented on an "economic resources" 40 A-60 ATTACHMENT A CITY OF RANCHO PALOS VERDES NOTES TO FINANCIAL STATEMENTS JUNE 30, 2015 measurement focus and the accrual basis of accounting. Accordingly, all of the City's assets, deferred outflows of resources, liabilities, and deferred inflows of resources; including capital assets, infrastructure, and long-term debt, are included in the accompanying Statement of Net Position. The Statement of Activities presents changes in net position. Under the accrual basis of accounting, revenues are recognized in the period in which they are earned, while expenses are recognized in the period in which the liability is incurred. The Statement of Activities demonstrates the degree to which the direct expenses of a given function are offset by program revenues. Direct expenses are those that are clearly identifiable with a specific function. Program revenue transactions for the City are reported in three categories: 1) Charges for Services, 2) Operating Grants and Contributions, and 3) Capital Grants and Contributions. Charges for Services include revenues from customers or applicants who purchase, use, or directly benefit from goods, services, or privileges provided by a given function. Operating Grants and Contributions include revenues restricted to meeting the requirements of a particular operating function and may include state shared revenues and grants. Capital Grants and Contributions include revenues restricted to meeting the requirements of a particular capital function and may include grants and developer fees. Taxes and other items not properly included among program revenues are reported instead as general revenues. As a general rule, the effect of inter -fund activity has been eliminated from the Government -Wide Financial Statements. Governmental Fund Financial Statements Governmental fund financial statements include a "Balance Sheet — Governmental Funds" and "Statement of Revenues, Expenditures, and Changes in Fund Balances — Governmental Funds" for all major and other governmental funds. An accompanying schedule is presented to reconcile and explain the differences in fund balances as presented in these statements to the Net Position presented in the Government -Wide Financial Statements. The City has presented all major funds that met qualifications of GASB Statement No. 34. All governmental funds are accounted for on a spending or "current financial resources" measurement focus and the modified accrual basis of accounting. Under the "current financial resources" measurement focus, generally only current assets and current liabilities are reported 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 41 A-61 ATTACHMENT A CITY OF RANCHO PALOS VERDES NOTES TO FINANCIAL STATEMENTS JUNE 30, 2015 taxes received within 60 days after year-end, taxpayer -assessed taxes such as sales taxes, and earnings on investments. Grant funds earned but not received are recorded as a receivable, and grant funds received before the revenue recognition criteria have been met are reported as unearned revenues. Expenditures are recorded when the fund liability is incurred, if measurable, except for interest on general long-term debt that has not yet matured, which is recognized when due. The City reports the following major governmental funds The General Fund is the City's primary operating fund. It accounts for all financial resources of the City, except those that are required to be accounted for in another fund. The Street Maintenance Special Revenue Fund is used to account for state -shared highway users' tax that is restricted to use for street maintenance, right-of-way acquisition and street construction. The Capital Improvement Capital Projects Fund is used to account for funds used for the City's capital improvement projects. Proprietary Fund Financial Statements Proprietary fund types are accounted for using the "economic resources" measurement focus and accrual basis of accounting. This means that all assets and liabilities (whether current or non-current) associated with the activity are included on the balance sheet. Fund equity is presented as total net position. The operating statement of proprietary funds presents increases (revenues) and decreases (expenses) in total net position. Revenues are recognized when they are earned and expenses are recognized when the liability is incurred. Proprietary funds distinguish operating revenues and expenses from non-operating items. Operating revenues and expenses generally result from providing services and producing and delivering goods in connection with a proprietary fund's principal ongoing operations. The principal operating revenues of the City's enterprise and internal service funds are charges for services. Operating expenses for the enterprise and internal service funds include the costs of services, employee benefits, maintenance of capital assets, and depreciation on capital assets. All revenues and expenses not meeting this definition are reported as non-operating revenues and expenses. The City uses the internal service funds to finance and account for goods and services provided by one City department to other City departments, including the purchase and maintenance of equipment, replacement of buildings and payment of employee benefits. The City's internal service funds are presented in the proprietary 42 A-62 ATTACHMENT A CITY OF RANCHO PALOS VERDES NOTES TO FINANCIAL STATEMENTS JUNE 30, 2015 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 activities 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. Fiduciary Fund Financial Statements The fiduciary private -purpose trust fund type is accounted for using the economic resources measurement focus and accrual basis of accounting similar to the proprietary funds. The City reports the following fiduciary fund The assets and liabilities of the former Redevelopment Agency were transferred to the Successor Agency as part of the business of redevelopment dissolution. The Successor Agency private -purpose trust fund accounts for the changes in the former Redevelopment Agency's assets and liabilities until they are disposed of through dissolution. This fund also accounts for the administrative costs associated with dissolution. D. Budgetary Accounting Annual budgets are adopted on a basis consistent with accounting principles generally accepted in the United States of America for all governmental funds. All annual appropriations lapse at fiscal year-end. Budget control is maintained over all accounts, and expenditures are not allowed to exceed appropriations at the program level. Throughout the year, the City Council made several supplementing budgetary adjustments to the General fund, Special Revenue funds, Capital Projects funds, Proprietary funds and Permanent funds. These adjustments resulted in a net appropriation increase in the amount of $9,240,861. This increase was primarily a result of appropriations continued from FY13-14 in the amount of $23.6 million and appropriations continued to FY15-16 in the amount of $17.4 million. 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 43 A-63 ATTACHMENT A CITY OF RANCHO PALOS VERDES NOTES TO FINANCIAL STATEMENTS JUNE 30, 2015 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, 2014, based on calculations by City Management, proceeds of taxes did not exceed related appropriations. E. Capital Assets Capital assets include land, construction in progress, building and improvements, vehicles, computer equipment, furniture, fixtures and equipment, and infrastructure assets (street systems, storm drains, sewer systems, etc.). Capital assets are defined by the City as all land and buildings, vehicles, computers and equipment with an initial individual cost of more than $5,000; and improvements and infrastructure assets with costs of more than $100,000. Such assets are recorded at historical cost or estimated historical cost if purchased or constructed. Donated or annexed capital assets are recorded at estimated market value at the date of donation or annexation. The costs of normal maintenance and repairs that do not add to the value of the asset or materially extend assets lives are not capitalized. Depreciation is recorded in the Government -Wide Financial Statements on a straight-line basis over the useful life of the assets as follows: Buildings and Improvements 25 to 50 years Vehicles, Computers, and Equipment 3 to 10 years Infrastructure Assets Roadway Network 10 to 100 years Sewer Network 25 to 50 years Storm Drain Network 30 to 100 years Parks and Recreation Network 25 years F. Employee Compensated Absences City employees may receive from 10 to 20 days of 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. City employees accrue 96 hours of sick leave each year with a maximum accrual of 720 hours. However, unused sick leave is never paid out to the employee upon separation; and therefore, the City does not accrue a liability. The General Fund will primarily be used to liquidate the liability for compensated absences in future years. Any liability for compensated absences is only carried in 44 A-64 ATTACHMENT A CITY OF RANCHO PALOS VERDES NOTES TO FINANCIAL STATEMENTS JUNE 30, 2015 the General Fund if there is unused/unpaid leave outstanding following an employee's separation. G. Investments Investments are stated at fair value (quoted market price or the best available estimate, thereof). H. Cash and Cash Equivalents The Water Quality Flood Protection Enterprise Fund and the Internal Service Funds participate in the pooling of City-wide cash and investments. Amounts from the pool are available to these funds on demand. Therefore the cash and investments reported in these funds are considered to be cash and cash equivalents for purpose of the statement of cash flows. I. Claims and Judgments When it is probable that a claim liability has been incurred, and the amount of the loss can be reasonably estimated, the City records the estimated loss, net of any insurance coverage under its self-insurance program. Small claims and judgments are recorded as expenditures when paid. The City's self-insurance program is administered through the California Joint Powers Authority (the CJPIA), which is described at Note #9. The CJPIA is a public entity risk pool. The City records amounts deposited with CJPIA as insurance expenditures in the General Fund and the Employee Benefits Fund. J. Prepaid Items Certain payments to vendors reflect costs applicable to future accounting periods and are recorded as prepaid items using the consumption method. In governmental funds, the prepaid assets recorded do not reflect current appropriable resources and thus, an equivalent portion of fund balance is reported as non -spendable. The City had a total of $734,554 ($559,651 in governmental funds and $174,903 in internal service funds) of prepaid items as of June 30, 2015. K. 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 affect certain reported amounts and disclosures. Accordingly, actual results could differ from those estimates. 45 A-65 ATTACHMENT A CITY OF RANCHO PALOS VERDES NOTES TO FINANCIAL STATEMENTS JUNE 30, 2015 L. Use of Restricted Resources When both restricted and unrestricted resources are available for use, it is the City's policy to use restricted resources first. When unrestricted resources (committed, assigned or unassigned) are available for use, it is the City's policy to use committed resources first, assigned resources second and finally unassigned resources. M. Deferred Inflows and Outflows When net position is decreased by a transaction that is applicable to a future reporting period, it is the City's policy to report a deferred inflow of resources. Conversely, when net position is increased by a transaction that is applicable to a future reporting period, it is the City's policy to report a deferred outflow of resources. N. New Pronouncements GASB Statement No. 68 — Accounting and Financial Reporting for Pension — an amendment of GASB Statement No. 27. In June 2012, the GASB improved accounting and financial reporting by state and local governments for pensions. It also improves information provided by state and local governmental employers about financial support for pensions that is provided by other entities. This Statement results from a comprehensive review of the effectiveness of existing standards of accounting and financial reporting for pensions with regard to providing decision -useful information, supporting assessments of accountability and inter - period equity, and creating additional transparency. The statement has been implemented with the June 30, 2015 financial statements. GASB Statement No. 71 — Pension Transition for Contributions Made Subsequent to the Measurement Date — An Amendment of GASB Statement No. 68. In November 2013, the GASB addressed an issue relating to amounts associated with contributions made by a government employer to a defined benefit pension plan after the measurement date of the government's beginning net pension liability. The statement has been implemented with the June 30, 2015 financial statements. GASB Statement No. 72 - Fair Value Measurement and Application. On February 27, 2015, GASB established how state and local governments should define and measure fair value. GASB also describes which assets and liabilities should be measured at fair value, and expands disclosures related to fair value measurements. This statement is not effective until June 30, 2016. The City has not determined its effect on the financial statements. GASB Statement No. 73 - Accounting and Financial Reporting for Pensions and Related Assets That Are Not within the Scope of GASB Statement 68, and Amendments to Certain Provisions of GASB Statements 67 and 68. GASB 46 A-66 ATTACHMENT A CITY OF RANCHO PALOS VERDES NOTES TO FINANCIAL STATEMENTS JUNE 30, 2015 established requirements for those pensions and pension plans that are not administered through a trust. Reporting is generally the same as in GASB 68. This statement is not effective until June 30, 2016. The City has not determined its effect on the financial statements. GASB Statement No. 74 - Financial Reporting for Postemployment Benefit Plans Other Than Pension Plans. GASB addresses reporting by OPEB plans that administer benefits on behalf of governments and replaces GASB 43. The City does not offer OPEB. This statement is not effective until June 30, 2017. The City has not determined its effect on the financial statements. GASB Statement No. 75 - Accounting and Financial Reporting for Postemployment Benefits Other Than Pensions. GASB addresses reporting by governments that provide OPEB to their employees and for governments that finance OPEB for employees of other governments, and replaces GASB 45. The City does not offer OPEB. This statement is not effective until June 30, 2018. The City has not determined its effect on the financial statements. GASB Statement No. 76 - The Hierarchy of Generally Accepted Accounting Principles for State and Local Governments. GASB compresses the current 4 -level hierarchy of generally accepted accounting principles (GAAP) into just two levels. In doing so, it elevates the GASB's Implementation Guides to authoritative status, meaning that any future implementation guidance will be subject to full due -process prior to release. This statement is not effective until June 30, 2016. The City has not determined its effect on the financial statements. GASB Statement No. 77 - Tax Abatement Disclosures. GASB established disclosure guidance for governments that have granted tax abatements. This statement is not effective until June 30, 2017. The City has not determined its effect on the financial statements. NOTE #2 — CASH AND INVESTMENTS Cash and investments as of June 30, 2015, are classified in the accompanying financial statements as follows: Government -Wide Fiduciary Fund Statement of Statement of Fiduciary Net Position Net Position Total Total cash and investments $ 61,627,725 $ 462,425 $ 62,090,150 47 A-67 ATTACHMENT A CITY OF RANCHO PALOS VERDES NOTES TO FINANCIAL STATEMENTS JUNE 30, 2015 Cash and investments as of June 30, 2015 consist of the following: Petty Cash $ 3,000 Deposits with Financial Institution 10,870,469 Local Agency Investment Fund (LAIF) 51,216,681 $ 62,090,150 Investments Authorized by the California Government Code and the City of Rancho Palos Verdes' Investment Policy The table below identifies the investment types that are authorized for the City of Rancho Palos Verdes by the California Government Code (or the City's investment policy, where more restrictive). The table also identifies certain provisions of the California Government Code (or the City's investment policy, where more restrictive) that address interest rate risk, and concentration of credit risk On June 30, 2015, the City held demand deposits of $8,670,466. Per the investment policy, amounts may exceed $5 million or 15% for no more than thirty days if the accounts are to hold monies being transitioned. The City was in the process of transitioning bank services as directed by the City Council. The balance was reduced to below the $5 million amount by August 2015. Disclosures Relating to Interest Rate Risk Interest rate risk is the risk that changes in market interest rates will adversely affect fair value of an investment. Generally, the longer the maturity of an investment, there is a greater sensitivity of its fair value to changes in market interest rates. The City manages its exposure to interest rate risk by investing with the Local Agency Investment Fund (LAIF) such that the portfolio provides cash flows and liquidity need for operations. The City's investment is represented by shares in the pool, which can be withdrawn in one business day. The average maturity of the pool is less than one year. 48 A-68 Maximum Amount or Maximum Maximum Percent of in One Authorized Investment Type Maturity Portfolio Issuer U.S. Treasury Obligations 3 years None None Negotiable Certificates of Deposit 5 years 30% None Repurchase Agreements 7 days 15% None Money Market Mutual Funds N/A 15% 15% Local Agency Investment Fund (LAIF) N/A None None Money Market Savings/Demand Deposits N/A $5 million 15% On June 30, 2015, the City held demand deposits of $8,670,466. Per the investment policy, amounts may exceed $5 million or 15% for no more than thirty days if the accounts are to hold monies being transitioned. The City was in the process of transitioning bank services as directed by the City Council. The balance was reduced to below the $5 million amount by August 2015. Disclosures Relating to Interest Rate Risk Interest rate risk is the risk that changes in market interest rates will adversely affect fair value of an investment. Generally, the longer the maturity of an investment, there is a greater sensitivity of its fair value to changes in market interest rates. The City manages its exposure to interest rate risk by investing with the Local Agency Investment Fund (LAIF) such that the portfolio provides cash flows and liquidity need for operations. The City's investment is represented by shares in the pool, which can be withdrawn in one business day. The average maturity of the pool is less than one year. 48 A-68 ATTACHMENT A CITY OF RANCHO PALOS VERDES NOTES TO FINANCIAL STATEMENTS JUNE 30, 2015 Remaining Maturity 12 Months Investment Type or Less Local Agency Investment Fund (LAIF) $ 51,216,681 Disclosures Relating to Credit Risk Generally, credit risk is the risk that an obligation to the holder of the investment. rating by a nationally recognized statist investment is not rated. Concentration of Credit Risk issuer of an investment will not fulfill its This is measured by the assignment of a cal rating organization. The City's LAIF The investment policy of the City of Rancho Palos Verdes contains no limitations on the amount that can be invested in any one issuer beyond that stipulated by the California Government Code. As of June 30, 2015, the City's investments in LAIF were exempt from concentration of credit risk disclosure. Custodial Credit Risk Custodial credit risk for deposits is the risk that, in the event of the failure of a depository financial institution, a government will not be able to recover its deposits or will not be able to recover collateral securities that are in the possession of an outside party. The custodial credit risk for investments is the risk that, in the event of the failure of the counterparty (e.g., broker-dealer) to a transaction, a government will not be able to recover the value of its investment or collateral securities that are in the possession of another party. The California Government Code and the City of Rancho Palos Verdes' investment policy do not contain legal or policy requirements that would limit the exposure to custodial credit risk for deposits or investments, other than the following provision for deposits: The California Government Code requires that a financial institution secure deposits made by state or local governmental units by pledging securities in an undivided collateral pool held by a depository regulated under state law (unless so waived by the governmental unit). The market value of the pledged securities in the collateral pool must equal at least 110 percent of the total amount deposited by the public agencies. California law also allows financial institutions to secure City deposits by pledging first trust deed mortgage notes having a value of 150 percent of the secured public deposits. Of the City's deposits with financial institutions, $8,170,466 was in excess of federal depository insurance limits. The uninsured deposits were held by financial institutions, which are legally required by the California Government Code to collateralize the City's deposits as noted above. 49 A-69 ATTACHMENT A CITY OF RANCHO PALOS VERDES NOTES TO FINANCIAL STATEMENTS JUNE 30, 2015 Investment in Local Agency Investment Fund (LAIF) The City of Rancho Palos Verdes is a voluntary participant in LAIF that is regulated by California Government Code Section 16429 under the oversight of the Treasurer of the State of California. The fair value of the City of Rancho Palos Verdes' investment in this pool is based upon the City of Rancho Palos Verdes' pro -rata share of the fair value provided by LAIF for the entire pool portfolio (in relation to the amortized cost of that portfolio). The balance available for withdrawal is based on the accounting records maintained by LAIF, which are recorded on an amortized cost basis. LAIF is a governmental investment pool managed and directed by the Treasurer of the State of California and is not registered with the Securities and Exchange Commission. An oversight committee comprised of California State officials and various other participants provides oversight to the management of the fund. The daily operations and responsibilities of LAIF fall under the auspices of the State Treasurer's office. NOTE #3 — INTERFUND TRANSACTIONS Interfund balances consisted of the following at June 30, 2015: Due To General Fund Measure A Fund $ 47,453 E CDBG Fund 9,344 "- Employee Benefits Fund 9,576 W o Building Replacement Fund 565 Total: $ 66,938 General fund cash was used to cover grant expenditures in the Measure A Fund and the Community Development Block Grant (CDBG) Fund, until reimbursement is received from the granting agencies. 50 A-70 ATTACHMENT A CITY OF RANCHO PALOS VERDES NOTES TO FINANCIAL STATEMENTS JUNE 30, 2015 Inter -fund Transfers Inter -fund transfers for the year ended June 30, 2015, consisted of the following: Transfers are used to: 1) move revenues from the fund that statute or budget requires for collection to the fund that statute or budget requires for expenditure; 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; and 3) return money that was originally transferred from the General Fund to another fund, yet not used. The General Fund transferred $8,245,914 to the Capital Improvement Projects (CIP) Fund. The transfer included $5,785,208 of funding for the CIP Reserve for future infrastructure projects, as required by the City Council's Reserve Policy; an additional $231,306 for future projects as directed by City Council; and $2,229,400 of funding for the annual residential street rehabilitation program. The Street Maintenance Fund received $1,078,749, which includes transfers of: $200,000 from the 1972 Act Fund for street landscape maintenance; $224,000 from the Beautification Fund for median maintenance; $37,000 from the Waste Reduction Fund, of which $30,000 is for mulch from tree trimming and $7,000 is for litter abatement from medians; $99,000 from the 1911 Act Fund for traffic signal maintenance; and $518,749 of Proposition C money for roadway maintenance within the landslide area. The CIP Fund received $2,200,804 from Other Governmental Funds; including $1,228,719 from the Proposition C Fund, $310,886 from the Proposition A Fund, and $564,000 from the Measure R Fund, all for the Palos Verdes Drive East rehabilitation project; as well as $97,199 from the Environmental Excise Tax Fund for projects to comply with the Americans with Disabilities Act (ADA). 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 Position. The City elected to use the basic reporting approach as defined by GASB Statement No. 34 51 A-71 Transfer From Capital Other Internal General Improvement Governmental Enterprise Service Fund Projects Funds Fund Funds Totals General Fund $ - $ - $ 364,049 $ - $ - $ 364,049 o Street Maintenance 1,078,749 1,078,749 Capital Improvement Projects 8,245,914 2,200,804 362,360 944,841 11,753,919 Other Governmental Funds 328,700 328,700 c Enterprise Fund 820,000 820,000 ~ Internal Service Funds - 149,422 149,422 Totals: $8,574,614 $ 969,422 $ 3,643,602 $ 362,360 $944,841 $14,494,839 Transfers are used to: 1) move revenues from the fund that statute or budget requires for collection to the fund that statute or budget requires for expenditure; 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; and 3) return money that was originally transferred from the General Fund to another fund, yet not used. The General Fund transferred $8,245,914 to the Capital Improvement Projects (CIP) Fund. The transfer included $5,785,208 of funding for the CIP Reserve for future infrastructure projects, as required by the City Council's Reserve Policy; an additional $231,306 for future projects as directed by City Council; and $2,229,400 of funding for the annual residential street rehabilitation program. The Street Maintenance Fund received $1,078,749, which includes transfers of: $200,000 from the 1972 Act Fund for street landscape maintenance; $224,000 from the Beautification Fund for median maintenance; $37,000 from the Waste Reduction Fund, of which $30,000 is for mulch from tree trimming and $7,000 is for litter abatement from medians; $99,000 from the 1911 Act Fund for traffic signal maintenance; and $518,749 of Proposition C money for roadway maintenance within the landslide area. The CIP Fund received $2,200,804 from Other Governmental Funds; including $1,228,719 from the Proposition C Fund, $310,886 from the Proposition A Fund, and $564,000 from the Measure R Fund, all for the Palos Verdes Drive East rehabilitation project; as well as $97,199 from the Environmental Excise Tax Fund for projects to comply with the Americans with Disabilities Act (ADA). 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 Position. The City elected to use the basic reporting approach as defined by GASB Statement No. 34 51 A-71 ATTACHMENT A CITY OF RANCHO PALOS VERDES NOTES TO FINANCIAL STATEMENTS JUNE 30, 2015 for all infrastructures, whereby depreciation expense and accumulated depreciation has been recorded. The following tables present the capital assets activity for the year ended June 30, 2015. Governmental Activities Capital assets not being depreciated: Land Construction in progress Total capital assets not being depreciated Capital assets being depreciated: Building and improvements Vehicles Computer equipment Furniture, fixtures and equipment Infrastructure Roadwaysystem 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 Beginning Ending Balance Increases Decreases Balance $ 41,932,775 154,800 $ 42,087,575 1,366,748 8,663,805 (6,020,199) 4,010,354 43,299,523 8,818,605 (6,020,199) 46,097,929 12,955,553 (328,916) 12,626,637 309,120 47,245 356,365 696,073 164,644 (157,633) 703,084 370,963 204,220 (34,225) 540,958 93,793,331 3,806,972 97,600,303 25,965,995 25,965,995 13,148,416 13,148,416 4,157,868 2,213,227 6,371,095 151,397,319 6,436,308 (520,774) 157,312,853 (6,151,682) (200,726) (241,282) (27,146) (610,751) (73,407) (311,936) (40,538) 78,940 (6,273,468) (268,428) 157,633 (526,525) 34,225 (318,249) (49,237,690) (2,662,363) (51,900,053) (18,677,703) (453,822) (19,131,525) (3,718,912) (250,479) (3,969,391) (1,320,345) (252,288) (1,572,633) (80,270,301) (3,960,769) 270,798 (83,960,272) Total capital assets being depreciated, net 71,127,018 2,475,539 (249,976) 73,352,581 Governmental activities capital assets, net $ 114,426,541 11,294,144 (6,270,175) $ 119,450,510 Depreciation expense was charged to functions/programs government as follows: Administration (depreciation of buildings) Public Works (depreciation of roadways, sewers, and storm drains; Recreation Services (depreciation of parks system) Capital assets held by the City's internal service funds are charged to the various functions based on their usage of the assets Total Depreciation Expense — Governmental Activities 52 of the primary $ 200,726 3,366,664 252,288 141,091 $3.960.769 A-72 ATTACHMENT A CITY OF RANCHO PALOS VERDES NOTES TO FINANCIAL STATEMENTS JUNE 30, 2015 Business -type Activities Capital assets not being depreciated: Land Construction in progress Total capital assets not being depreciated Capital assets being depreciated: Equipment Storm drain system Total capital assets being depreciated Less accumulated depreciation for: Beginning Ending Balance Increases Decreases Balance $ 1,428,243 $ 1,428,243 17,249,957 1,717,547 (18,881,018) 86,486 18,678,200 1,717,547 (18,881,018) 1,514,729 11,813 11,813 12, 286, 056 19, 414, 413 31, 700, 469 12,297,869 19,414,413 - 31,712,282 Equipment (11,813) (11,813) Storm drain system (1,406,939) (640,411) (2,047,350) Total accumulated depreciation (1,418,752) (640,411) - (2,059,163) Total capital assets being depreciated, net 10,879,117 18,774,002 - 29,653,119 Business -type activities capital assets, net $29,557,317 20,491,549 (18,881,018) $31,167,848 Depreciation expense of $640,411 is included in the Water Quality Flood Protection enterprise fund. NOTE #5 — LONG-TERM NOTES RECEIVABLE Governmental Activities Long -Term Notes Receivable $ 7,823,879 Long -Term Notes Receivable City Affordable Housing In -Lieu City Low -Moderate Income Housing Community Development Block Grant $ 1,456,431 5,898,287 469,161 Subtotal: 7,823,879 Receivable from Successor Agency 10,457,064 Allowance from Successor Agency receivable (10,457,064) Total Long -Term Notes Receivable: $ 7,823,879 The Receivable from Successor Agency is discussed further in Note #14. Affordable Housing In March 2009, the former Redevelopment Agency (RDA) entered into a Disposition and Development Agreement (DDA) with AMCAL Mirandela Fund LP (AMCAL). 53 A_73 ATTACHMENT A CITY OF RANCHO PALOS VERDES NOTES TO FINANCIAL STATEMENTS JUNE 30, 2015 Under the DDA, the former RDA provided financial assistance to AMCAL in an amount up to $6,790,000 to develop a thirty-four unit senior housing project. The loan accrues simple interest at a rate of 3% per annum on the amounts disbursed. The balance of notes receivable from AMCAL including accrued unpaid interest of $957,854 at June 30, 2015 was $7,228,398. In March 2011, the former RDA sold an affordable housing condominium to an individual for $350,000. In connection with the sale, the buyer issued a secured promissory note in the amount of $126,320. The note bears no interest and principal is payable upon default by the owner (or any successors' owner) under a regulatory agreement that requires the condominium to be occupied by person or families of moderate income. If no such default has occurred by February 22, 2056, the principal will be forgiven. As part of redevelopment dissolution, these two long-term notes receivable were transferred to the housing successor (the City), which elected to retain the housing assets and function of the former Redevelopment Agency. Communitv Develoament Block Grant (CDBG As part of the City's CDBG program, the City extends loans to property owners meeting low and moderate income requirements to make repairs and improvements to their homes. These notes receivable bear no interest, and repayment is required when the title to the property is transferred or the property is re -financed. The maximum loan amount per property is $13,000. Amounts repaid are returned to the CDBG program. The total of these loans outstanding at June 30, 2015 is $469,161. NOTE #6 — LONG-TERM DEBT Balance Balance Amount Due July 1, 2014 Additions Deletions June 30, 2015 in One Year Employee Compensated Absences $ 350,474 $289,883 $(287,614) $ 352,743 $ 289,476 Employee Compensated Absences There is no fixed payment schedule for employee compensated absences. Based on historical trends, $289,476 estimated to be the amount that will be used and/or paid out during the fiscal year ended June 30, 2016. 54 A-74 ATTACHMENT A CITY OF RANCHO PALOS VERDES NOTES TO FINANCIAL STATEMENTS JUNE 30, 2015 NOTE #7 — CLASSIFICATIONS OF NET POSITION AND FUND BALANCE Government -Wide Financial Statements In the Government -Wide financial statements net position is classified in the following categories: Net Investment in Capital Assets This category groups all capital assets, including infrastructure, into one component of net position. Accumulated depreciation on these assets reduces this category as does any outstanding balance on debt incurred in acquiring or constructing the capital assets. Restricted Net position 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 position This category represents the difference between total net position and the two categories noted above: Net Investment in Capital Assets and Restricted Net position. Fund Financial Statements The fund balances reported on the fund statements consist of the following categories: Non -spendable — Amounts that are not in a spendable form (such as inventory and prepaid expenditures) or are legally required to be maintained intact (such as the corpus of an endowment fund). Restricted — Amounts constrained to specific purposes by their providers (such as grantors, bondholders, and higher levels of government), through constitutional provisions, or by enabling legislation. Committed — Amounts constrained to specific purposes by the City Council via a City Council resolution or ordinance, which are considered to be equally binding. To be reported as committed, amounts cannot be used for any other purpose unless the City Council adopts another resolution to remove or change the constraint. 55 A-75 ATTACHMENT A CITY OF RANCHO PALOS VERDES NOTES TO FINANCIAL STATEMENTS JUNE 30, 2015 Assigned — Amounts the City Council intends to use for a specific purpose, which is expressed by the City Council via minute order. Unassigned — Amounts that are available for any purpose; these amounts are reported only in the General Fund. However, if there is a deficit fund balance to be reported in any fund, it is classified as unassigned. The City's governmental fund balances were classified as follows at June 30, 2015: Nonspendable: In Form (inventory and prepaid) Legally Habitat Restoration Restricted Public Works Committed Public Works Assigned Unassigned: Rainy Day Fund Continued Appropriations Utility User Tax Claim Account Deficit Fund Balance Governmental Fund Balance Totals Street General Maintenance Fund Fund $ 597,685 $ Capital Other Improvement Governmental Fund Funds - 1,750,000 - - - 105,476 1,312,716 - 8,541,964 - - - 54,552 20,447,429 1,202,419 15,133,238 - - - 531,765 - - - 389,877 - - - - - (58,926) $16,652,565 $ 1,312,716 $20,447,429 $ 11,595,485 Non -spendable Fund Balance • General Fund assets include $38,034 of inventory held for resale at the Point Vicente Interpretive Center gift shop, and $559,651 of prepayments for expenditures related to the fiscal year ended June 30, 2016. • The fund balance of the Improvement Authority's Abalone Cove Fund includes a $1,000,000 non -spendable fund balance, as required by a Reimbursement and Settlement Agreement dated October 27,1987 in connection with the Horan Lawsuit (discussed further in Note #14). • The fund balance of the Subregion One Maintenance Fund includes a $750,000 non -spendable endowment, as required by the developer agreement for the Subregion One tract. • Beginning with the fiscal year ended June 30, 2006, the City's Natural Communities Conservation Plan requires an endowment in the Habitat Restoration Fund to be funded at the rate of $10,000 annually (plus interest) for fifty (50) years, to provide for maintainance of habitat in the future. The balance of $105,476 represents 10 years of annual $10,000 contributions plus interest earnings. 56 A-76 ATTACHMENT A CITY OF RANCHO PALOS VERDES NOTES TO FINANCIAL STATEMENTS JUNE 30, 2015 Restricted Fund Balance The balances of the City's Special Revenue Funds, including California Highway User Tax apportionments in the Street Maintenance Fund, are constrained to use for specific purposes by other governmental agencies. Committed Fund Balance • The balance of the Abalone Cove Sewer District Fund is committed, via ordinance, for maintenance of the sewer system. Assigned Fund Balance • The $20,838,067 balance of the Capital Improvement Projects Fund has been assigned for the planning, design and construction of infrastructure projects. • The $571,856 balance of the Beautification Fund has been assigned for beautification projects within the City's right-of-way, as well as the promotion of recycling and beautification programs. • Balances totaling $630,563 within the Low -Moderate Income Housing Fund and the Affordable Housing In -Lieu Fund have been assigned for the provision of affordable housing within the City. Unassigned Fund Balance • City Council Policy No. 41 — Reserve Policies, adopted via resolution, requires the City to maintain a minimum General Fund balance of at least fifty percent of annual operating expenditures. This reserve serves as a Rainy Day Fund with a balance of $15,133,238 at June 30, 2015. • On September 15, 2015, the City Council adopted a resolution to carry forward $531,765 of fiscal year 2015-16 General Fund appropriations to fiscal year 2015-16. • On August 19, 2014, the City Council adopted a resolution to create a Utility User Tax (UUT) Claim Account, funded with telecommunications revenue received since August 13, 2013 (see further discussion in Note #10). The calculated estimate of Telecommunications UUT received from August 13, 2013 through June 30, 2015 is $713,469. Of this amount, $323,592 has been distributed for refunds, legal fees, and refund administration. The remaining UUT Claim Account balance at June 30, 2015 is $389,877. • Deficit fund balances of $47,302 in the Measure A Fund and $11,624 in the Community Development Block Grant Fund have been reported as unassigned. Statement of Net Position The City's Net Position at June 30, 2015 includes restricted amounts totaling $11,710,156. The restrictions are itemized in the following table, and are noted above, in the discussion of governmental fund balances. 57 A-77 ATTACHMENT A CITY OF RANCHO PALOS VERDES NOTES TO FINANCIAL STATEMENTS JUNE 30, 2015 Improvement Authority non -spendable balance Subregion One maintenance non -spendable endowment Natural Communities Conservation Plan non -spendable endowment Street Maintenance restricted balance Other Governmental Funds restricted balances Total Restricted portion of Net Position $ 1,000,000 750,000 105,476 1,312,563 8,478,637 $ 11, 646, 676 NOTE #8 — PENSION AND RETIREMENT HEALTH SAVINGS PLANS Pension Plan Description All qualified employees are eligible to participate in the City's Miscellaneous Employee Pension Plan (Plan), a cost-sharing multiple employer defined benefit pension plan administered by the California Public Employees Retirement System (CalPERS). The CalPERS Plan consists of a miscellaneous pool and a safety pool (referred to as "risk pools"), which are comprised of individual employer miscellaneous and safety rate plans, respectively. The risk pools are included within the Public Employees' Retirement Fund C (PERF C). Benefit provisions under the Plan are established by State statute and may be amended by City resolution. CalPERS issues publicly available reports that include a full description of the pension plans regarding benefit provisions, assumptions and membership information can be found on the CalPERS website. Benefits Provided CalPERS provides retirement and disability benefits, annual cost of living adjustments and death benefits to plan members, who must be public employees, and beneficiaries. Benefits are based on years of credited service, equal to one year of full time employment. All members are eligible for non -duty disability benefits after 10 years of service. The death benefit is one of the following: the Basic Death Benefit, the 1957 Survivor Benefit, or the Optional Settlement 2W Death Benefit. The cost of living adjustments for the plan are applied as specified by the Public Employees' Retirement Law. The Plan's provisions and benefits in effect at June 30, 2015, are summarized in the following table. 58 A-78 ATTACHMENT A CITY OF RANCHO PALOS VERDES NOTES TO FINANCIAL STATEMENTS JUNE 30, 2015 Hire Date Formula Benefit vesting schedule Benefit payments Retirement age Monthly benefits, as a % of annual salary Required employee contribution rates Required employer contribution rates Contributions Miscellaneous Classic Tier 1 Classic Tier 2 New Members Prior to January Prior to October 2, 1, 2013 2.5% at 55 5 years of service monthly for life 55 2.50% 8% 15.701% 2012 On or after January 1, 2013 2.0% at 60 2.0% at 62 5 years of service 5 years of service monthly for life monthly for life 60 62 2.00% 2.00% 7% 6.25% 8.005% 6.25% Section 20814(c) of the California Public Employees' Retirement law requires that the employer contribution rates for all public employers are determined on an annual basis by the actuary and shall be effective on the July 1 following notice of a change in rate. Funding contributions for the Plan are determined annually on an actuarial basis as of June 30 by CalPERS. The actuarially determined rate is the estimated amount necessary to finance the costs of benefits earned by employees during the year, with an additional amount to finance any unfunded accrued liability. The City is required to contribute the difference between the actuarially determined rate and the contribution rates of employees. Contributions to the pension plan from the City were $725,496 for the year ended June 30, 2015. Pension Liabilities, Pension Expenses and Deferred Outflows/Inflows of Resources Related to Pensions As of June 30, 2015, the City reported a liability of $5,714,320 for its proportionate share of the collective net pension liability. The net pension liability was measured as of June 30, 2014, and the total pension liability used to calculate the net pension liability was determined by an actuarial valuation as of June 30, 2013 rolled forward to June 30, 2014 using standard actuarial procedures. The City's proportion of the net pension liability was based on a projection of the City's long-term share of contributions to the pension plan relative to the projected contributions of all participating employers, actuarially determined. The City's proportion of the collective net pension liability as of June 30, 2013 and 2014 is as follows: Proportion - June 30, 2013 0.09686% Proportion - June 30, 2014 0.09183% Change - Increase (Decrease) (0.00503)% 59 A-79 ATTACHMENT A CITY OF RANCHO PALOS VERDES NOTES TO FINANCIAL STATEMENTS JUNE 30, 2015 For the year ended June 30, 2015, the City recognized pension expense of $627,202. At June 30, 2015, the City reported deferred outflows of resources and deferred inflows of resources related to pensions from the following sources: City contributions subsequent to the measurement date Difference between actual contributions and proportionate share of contributions Changes in proportion Net difference between projected and actual earnings on pension plan investments Totals Deferred Outflows Deferred Inflows of Resources of Resources $ 725,496 68,254 $ 44,438 1,920,277 $ 793,750 $ 1,964,715 The amount of $725,496 reported as deferred outflows of resources resulting from City contributions subsequent to the measurement date will be recognized as a reduction of the net pension liability in the year ended June 30, 2016. Other amounts reported as deferred outflows of resources and deferred inflows of resources related to pensions will be recognized as pension expense as follows: Year Ended June 30, 2016 $ (471,564) 2017 (471,564) 2018 (473,263) 2019 (480,070) 2020 - Thereafter - $ (1,896,461) Actuarial Assumptions The total pension liabilities in the June 30, 2013 actuarial valuations were determined using the following actuarial assumptions: Valuation Date Measurement Date Actuarial Cost Method Actuarial Assumptions: Discount Rate Inflation Projected Salary Increase Investment Rate of Return Mortality June 30, 2013 June 30, 2014 Entry -Age Normal Cost Method 7.5% 2.75% Varies by Entry Age and Service 7.5%(1) Derived using CaIPERS' Membership Data (1) Net of pension plan investment and administrative expenses, including inflation 60 A-80 ATTACHMENT A CITY OF RANCHO PALOS VERDES NOTES TO FINANCIAL STATEMENTS JUNE 30, 2015 The underlying mortality assumptions and all other actuarial assumptions used in the June 30, 2013 valuation were based on the results of a January 2014 actuarial experience study for the period of 1997 to 2011. Further details of the experience study can be found on the CaIPERS website. Discount Rate The discount rate used to measure the total pension liability was 7.50%. The projection of cash flows used to determine the discount rate assumed that employee contributions will be made at the current contribution rate and the City's contributions will be made at rates equal to the difference between actuarially determined contributions rates and the employee rate. Based on those assumptions, the pension plan's fiduciary net position was projected to be available to make all projected future benefit payments of current active and inactive employees. Therefore, the long-term expected rate of return on pension plan investments was applied to all periods of projected benefit payments to determine the total pension liability. In determining the long-term expected 7.50% rate of return on pension plan investments, CaIPERS took into account both short and long-term market return expectations as well as the expected pension fund cash flows. Based on the expected benefit payments of the Public Employees' Retirement Fund, CaIPERS indicated that a 19 year horizon was ideal in determining the level equivalent discount rate assumption. Using historical returns of all the funds' asset classes, expected compound (geometric) returns were calculated over the short-term (first 10 years) and the long-term (11-60 years) using a building-block approach. Using the expected nominal returns for both short-term and long term, the present value of benefits was calculated for each fund. The expected rate for return was set by calculating the single equivalent expected return of return that arrived at the same present value of benefits for cash flows as the one calculated using both short-term and long term returns. The expected rate of return was then set equivalent to the single equivalent rate calculated above and rounded down to the nearest one quarter of one percent. The target allocation and best estimates of arithmetic real rates of return for each major asset class are the same for the Plan. These geometric rates of return are net of administrative expenses and are summarized in the following table. 61 A-81 ATTACHMENT A CITY OF RANCHO PALOS VERDES NOTES TO FINANCIAL STATEMENTS JUNE 30, 2015 Sensitivitv of the Net Pension Liabilitv to Chanaes in the Discount Rate The following presents the City's proportionate share of the collective net pension liability calculated using the discount rate of 7.50%, as well as what the City's proportionate share of the collective net pension liability would be if it were calculated using a discount rate that is 1 -percentage point lower or 1 -percentage point higher than the current rate: 1% Decrease 6.50% Net Pension Liability $ 10,181,152 Current Discount Rate 7.50% Net Pension Liability $ 5,714,320 1% Increase 8.50% Net Pension Liability $ 2,007,275 Pension Plan Fiduciary Net Position — Detailed information about the pension plan's fiduciary net position is available in the separately issued CalPERS financial reports. Retirement Health Savinas Plan On November 17, 2009, the City approved the establishment of a defined contribution Retirement Health Savings Plan (the "Plan") for its full-time employees. The Plan is a Health Reimbursement Arrangement ("HRA") within Sections 105 and 106 of the Internal Revenue Code. The Plan assets are managed in a non-taxable trust as described in Section 501(c)(9) of the Internal Revenue Code. The City is the Plan Administrator, and utilizes the services of a contracted financial services provider for day-to-day administration of contributions and disbursements. The City has the authority to amend the Plan's provisions and contribution requirements. 62 A-82 Long -Term Long -Term Expected Expected Real Rate Real Rate Target of Return of Return Asset Class Allocation Years 1-10 Years 11+ Global Equity 47% 5.25% 5.71% Global Fixed Income 19% 0.99 2.43 Inflation Sensitive 6% 0.45 3.36 Private Equity 12% 6.83 6.95 Real Estate 11% 4.50 5.13 Infrastructure and Forestland 3% 4.50 5.09 Liquidity 2% (0.55) (1.05) Total 100% Sensitivitv of the Net Pension Liabilitv to Chanaes in the Discount Rate The following presents the City's proportionate share of the collective net pension liability calculated using the discount rate of 7.50%, as well as what the City's proportionate share of the collective net pension liability would be if it were calculated using a discount rate that is 1 -percentage point lower or 1 -percentage point higher than the current rate: 1% Decrease 6.50% Net Pension Liability $ 10,181,152 Current Discount Rate 7.50% Net Pension Liability $ 5,714,320 1% Increase 8.50% Net Pension Liability $ 2,007,275 Pension Plan Fiduciary Net Position — Detailed information about the pension plan's fiduciary net position is available in the separately issued CalPERS financial reports. Retirement Health Savinas Plan On November 17, 2009, the City approved the establishment of a defined contribution Retirement Health Savings Plan (the "Plan") for its full-time employees. The Plan is a Health Reimbursement Arrangement ("HRA") within Sections 105 and 106 of the Internal Revenue Code. The Plan assets are managed in a non-taxable trust as described in Section 501(c)(9) of the Internal Revenue Code. The City is the Plan Administrator, and utilizes the services of a contracted financial services provider for day-to-day administration of contributions and disbursements. The City has the authority to amend the Plan's provisions and contribution requirements. 62 A-82 ATTACHMENT A CITY OF RANCHO PALOS VERDES NOTES TO FINANCIAL STATEMENTS JUNE 30, 2015 The City has no obligation to make contributions to the Plan, but as part of the annual budget process the City may elect to make contributions to the Plan. Employees are required to contribute 1 % of their gross wages to their account, which is owned by the employee. During the fiscal year ended June 30, 2015, the City contributed a total of $74,348 to employee accounts. The Plan assets are not an asset of the City. Therefore, only the City's expense to make contributions to the Plan has been recorded in the Employee Benefits internal service fund in the City's financial statements. NOTE #9 — LIABILITY, WORKERS' COMPENSATION, AND PURCHASED INSURANCE Description of Self -Insurance Pool Pursuant to Joint Powers Agreement The City of Rancho Palos Verdes is a member of the CALIFORNIA JOINT POWERS INSURANCE AUTHORITY (Authority). The Authority is composed of 118 California public entities and is organized under a joint powers agreement pursuant to California Government Code §6500 et seq. The purpose of the Authority is to arrange and administer programs for the pooling of self-insured losses, to purchase excess insurance or reinsurance, and to arrange for group purchased insurance for property and other lines of coverage. The California JPIA began covering claims of its members in 1978. Each member government has an elected official as its representative on the Board of Directors. The Board operates through a nine - member Executive Committee. Self -Insurance Programs of the CJPIA Each member pays an annual contribution at the beginning of the coverage period. A retrospective adjustment is then conducted annually thereafter, for coverage years 2012-13 and prior. Retrospective adjustments are scheduled to continue indefinitely on coverage years 2012-13 and prior, until all claims incurred during those coverage years are closed, on a pool -wide basis. This subsequent cost re -allocation among members, based on actual claim development, can result in adjustments of either refunds or additional deposits required. Coverage years 2013-14 and forward are not subject to routine annual retrospective adjustment. The total funding requirement for self-insurance programs is estimated using actuarial models and pre -funded through the annual contribution. Costs are allocated to individual agencies based on exposure (payroll) and experience (claims) relative to other members of the risk -sharing pool. Additional information regarding the cost allocation methodology is provided below. 63 A-83 ATTACHMENT A CITY OF RANCHO PALOS VERDES NOTES TO FINANCIAL STATEMENTS JUNE 30, 2015 General Liability In the liability program claims are pooled separately between police and general government exposures. (1) The payroll of each member is evaluated relative to the payroll of other members. A variable credibility factor is determined for each member, which establishes the weight applied to payroll and the weight applied to losses within the formula. (2) The first layer of losses includes incurred costs up to $30,000 for each occurrence and is evaluated as a percentage of the pool's total incurred costs within the first layer. (3) The second layer of losses includes incurred costs from $30,000 to $750,000 for each occurrence and is evaluated as a percentage of the pool's total incurred costs within the second layer. (4) Incurred costs from $750,000 to $50 million, are distributed based on the outcome of cost allocation within the first and second loss layers. For 2014-15 the Authority's pooled retention is $2 million per occurrence, with reinsurance to $20 million, and excess insurance to $50 million. The Authority's reinsurance contracts are subject to the following additional pooled retentions: (a) 50% of the $2.5 million annual aggregate deductible in the $3 million x/s $2 million layer, (b) 50% quota share of the $3 million x/s $2 million layer, and (c) $3 million annual aggregate deductible in the $5 million x/s $10 million layer. The overall coverage limit for each member, including all layers of coverage, is $50 million per occurrence. Costs of covered claims for subsidence losses have a sub - limit of $30 million per occurrence. Workers' Compensation In the workers' compensation program claims are pooled separately between public safety (police and fire) and general government exposures. (1) The payroll of each member is evaluated relative to the payroll of other members. A variable credibility factor is determined for each member, which establishes the weight applied to payroll and the weight applied to losses within the formula. (2) The first layer of losses includes incurred costs up to $50,000 for each occurrence and is evaluated as a percentage of the pool's total incurred costs within the first layer. (3) The second layer of losses includes incurred costs from $50,000 to $100,000 for each occurrence and is evaluated as a percentage of the pool's total incurred costs within the second layer. (4) Incurred costs from $100,000 to statutory limits are distributed based on the outcome of cost allocation within the first and second loss layers. For 2014-15, the Authority's pooled retention is $2 million per occurrence, with reinsurance to statutory limits under California Workers' Compensation Law. 64 A-84 ATTACHMENT A CITY OF RANCHO PALOS VERDES NOTES TO FINANCIAL STATEMENTS JUNE 30, 2015 Employer's Liability losses are pooled among members to $2 million. Coverage from $2 million to $5 million is purchased as part of a reinsurance policy, and Employer's Liability losses from $5 million to $10 million are pooled among members. Purchased Insurance Pollution Legal Liability Insurance The City of Rancho Palos Verdes participates in the pollution legal liability insurance program which is available through the Authority. The policy covers sudden and gradual pollution of scheduled property, streets, and storm drains owned by the City of Rancho Palos Verdes. Coverage is on a claims -made basis. There is a $50,000 deductible. The Authority has a limit of $50 million for the 3 -year period from July 1, 2014 through July 1, 2017. Each member of the Authority has a $10 million sub - limit during the 3 -year term of the policy. Property Insurance The City of Rancho Palos Verdes participates in the all-risk property protection program of the Authority. This insurance protection is underwritten by several insurance companies. City of Rancho Palos Verdes property is currently insured according to a schedule of covered property submitted by the City of Rancho Palos Verdes to the Authority. City of Rancho Palos Verdes property currently has all-risk property insurance protection in the amount of $15,360,815. There is a $5,000 deductible per occurrence except for non -emergency vehicle insurance which has a $1,000 deductible. Premiums for the coverage are paid annually and are not subject to retrospective adjustments. Earthauake and Flood Insurance The City of Rancho Palos Verdes purchases earthquake and flood insurance on a portion of its property. The earthquake insurance is part of the property protection insurance program of the Authority. City of Rancho Palos Verdes property currently has earthquake protection in the amount of $15,093,253. There is a deductible of 5% per unit of value with a minimum deductible of $100,000. Premiums for the coverage are paid annually and are not subject to retrospective adjustments. Crime Insurance The City of Rancho Palos Verdes purchases crime insurance coverage in the amount of $1,000,000 with a $2,500 deductible. The fidelity coverage is provided through the Authority. Premiums are paid annually and are not subject to retrospective adjustments. 65 A-85 ATTACHMENT A CITY OF RANCHO PALOS VERDES NOTES TO FINANCIAL STATEMENTS JUNE 30, 2015 Special Event Tenant User Liability Insurance The City of Rancho Palos Verdes further protects against liability damages by requiring tenant users of certain property to purchase low-cost tenant user liability insurance for certain activities on agency property. The insurance premium is paid by the tenant user and is paid to the City of Rancho Palos Verdes according to a schedule. The City of Rancho Palos Verdes then pays for the insurance. The insurance is arranged by the Authority. Adequacy of Protection During the past three fiscal years, none of the above programs of protection experienced settlements or judgments that exceeded pooled or insured coverage. There were also no significant reductions in pooled or insured liability coverage in 2014-15. NOTE #10 — CONTINGENCIES AND COMMITMENTS Litigation In the normal course of operations, the City has been named as a defendant in various claims and legal actions. 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 #9) 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. Legal actions that could result in an unfavorable outcome material to the City's financial statements are discussed below. Claim for Utility User Tax Refund On August 13, 2014, a City resident taxpayer filed a class action lawsuit pertaining to the collection of the City's 3% Utility User Tax (UUT) on telecommunications services. The complaint seeks refund of telecommunications UUT back to August 1, 2006, plus interest, estimated at more than $5 million. However, the City's Municipal Code limits claims for tax refunds to one year. On August 19, 2014, the City Council took action to immediately suspend collection of telecommunications UUT, and transfer all such revenue received since August 13, 2013 (the beginning of the one year claim period) to a UUT Claim Account to be used for refunds to taxpayers (discussed further in Note #7). At June 30, 2015, the balance of the Claim Account is $389,877 ($713,469 revenue received since August 13, 2013, less $323,592 of claims and related administration paid). No liability has been recorded 66 A_86 ATTACHMENT A CITY OF RANCHO PALOS VERDES NOTES TO FINANCIAL STATEMENTS JUNE 30, 2015 for telecommunications UUT collected prior to the beginning of the one-year claim period allowed by the City's Municipal Code. Green Hills Memorial Park In 2007, the City's Planning Commission approved revisions to a master development plan for Green Hills Memorial Park; which included construction of a mausoleum along the Park's northern property line, including a reduction of the setback from the property line from eighty (80) feet to eight (8) feet. The adjacent property to the north is the Vista Verde condominium project in the City of Lomita. The Park constructed the mausoleum. The Planning Commission completed its review of the issue; and imposed additional operational conditions, and determined that no further interments should occur on the roof of the mausoleum until the City Council hears the appeal from the Commission's decision. Green Hills Memorial Park appealed the decision to the City Council and on November 17, 2015, the City Council adopted an agreement where Green Hills would indemnify the City from any claims and actions relating to the validity of the approvals and operation of the Green Hills cemetery complex. NOTE #11— 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 January 1 Levy date June 30 Due date November 1 and February 1 Collection dates December 10 and April 10 NOTE #12 — UNAVAILABLE AND UNEARNED REVENUES The unavailable and unearned revenues in the fund financial statements of the City of Rancho Palos Verdes as of June 30, 2015 are presented in the following table. 67 A-87 ATTACHMENT A CITY OF RANCHO PALOS VERDES NOTES TO FINANCIAL STATEMENTS JUNE 30, 2015 Revenue Measurable but Not Available (beyond 60 days): Street Maintenance Fund $ 97 Other Governmental Funds 135,145 Total Unavaible Revenues $ 135,242 Advance balance on federal grant - NCCP General Fund Total Unearned Revenue $ 88,560 NOTE #13 — OTHER REQUIRED FUND DISCLOSURES The following funds had deficit fund balances as of June 30, 2015: Other Governmental Funds: Measure A Special Revenue Fund $47,302 Community Development Block Grant Special Revenue Fund $11,624 The City plans to finance the fund deficits through future revenues. The following budget program had expenditures in excess of the budget for the year ended June 30, 2015, as follows: Budget Expenditures Excess General Fund Information Technology — Voice $86,000 $87,672 $1,672 Transfers out $8,571,984 $8,574,614 $2,630 NOTE #14 — SUCCESSOR AGENCY Under the Dissolution Act, each California redevelopment agency (each a "Dissolved RDA") was dissolved as of February 1, 2012. A Successor Agency was created for each Dissolved RDA which is the sponsoring community of the Dissolved RDA unless it elected not to serve as the Successor Agency. On September 6, 2011, the City elected to serve as the Successor Agency of the Rancho Palos Verdes Redevelopment Agency. The Dissolution Act allowed the sponsoring community that formed the Dissolved RDA to elect to assume the housing functions and take over the certain housing assets of the Dissolved RDA. The City elected on February 21, 2012 to serve as the Housing Successor Agency. After the date of dissolution, the housing assets, obligations, and activities of the Dissolved RDA have been transferred and are reported in a special revenue fund in the financial statements of the City (City Low - Moderate Income Housing Fund). 68 A-88 ATTACHMENT A CITY OF RANCHO PALOS VERDES NOTES TO FINANCIAL STATEMENTS JUNE 30, 2015 All other assets, obligations, and activities of the Successor Agency are reported in a fiduciary fund (private -purpose trust fund) in the financial statements of the City. The County Auditor -Controller is charged with establishing a Redevelopment Property Tax Trust Fund (the "RPTTF") for each Successor Agency and depositing into the RPTTF for each six-month period the amount of property taxes that would have been redevelopment property tax increment had the redevelopment agency not been dissolved. The deposit in the RPTTF fund is to be used to pay to the Successor Agency's enforceable obligations for the upcoming six-month period. The process of making RPTTF deposits to be used to pay enforceable obligations of the Dissolved RDA will continue until all enforceable obligations have been paid in full and all non -housing assets of the Dissolved RDA have been liquidated. Non -Liquid Assets The following non -liquid assets are included in the records of the Successor Agency. Note receivable from: Portuguese Bend Club Homeowners Association $ 54,932 Prepaid item 638,144 Total Non -Liquid Assets JaR1076 In 1999, the former Redevelopment Agency extended a $750,000 construction loan to the Portuguese Bend Club Homeowners Association. The note is non-interest bearing, and is to be repaid in 180 equal installments beginning in July 2001. The Association is scheduled to continue making monthly payments of $4,167 through August 2016, and the balance of the note receivable at June 30, 2015 is $54,932. Prior to redevelopment dissolution, the County of Los Angeles pursuant to a Memorandum of Understanding dated November 1, 1997 (discussed below) impounded property tax increment allocated to the former redevelopment agency for payment of debt owed to the County. The balance of the impounded tax increment not yet been applied to debt at June 30, 2015 is $638,144. Debt Summary 69 A_89 Balance Balance Amounts Due July 1, 2014 Additions Deletions June 30, 2015 in One Year Due to City: Portuguese Bend $ 8,627,610 $ 128,056 $ (1,715,790) $ 7,039,876 $ 32,237 Abalone Cove 3,460,994 72,040 $ (115,845) 3,417,189 15,648 Due to County: Tax Increment Bond 4,810,000 (155,000) 4,655,000 180,000 Totals $ 16, 898, 604 $ 200,096 $ (1,986,63L $ 15,112, 065 $ 227,885 69 A_89 ATTACHMENT A CITY OF RANCHO PALOS VERDES NOTES TO FINANCIAL STATEMENTS JUNE 30, 2015 Consolidated Loan from City The City entered into an agreement to provide the former Redevelopment Agency (RDA) operating funds and staff assistance, supplies, technical and other services and facilities of the City as the RDA required in carrying out its function under the community redevelopment law. The former RDA was to repay the resulting indebtedness, plus interest, from incremental property tax revenues arising from the project area, as such revenue became available. Pursuant to redevelopment dissolution law, loans from cities to redevelopment agencies made more than two years after formation of the redevelopment agency are not recognized obligations. Therefore, the Consolidated Loan from the City has been previously disallowed on the Successor Agency's Recognized Obligation Payment Schedule (ROPS). However, AB1484 provides a method to secure recognition of the City's Consolidated Loan as an obligation of the Successor Agency. Upon completion of various independent reviews and transfers of funds to Los Angeles County, the Successor Agency received a "Finding of Completion" on April 26, 2013. On December 11, 2013, the Oversight Board made a finding that the Consolidated Loan from the City was made for legitimate redevelopment purposes. City Management expects that $47,885 of RPTTF revenue will be available for repayment of the City's Consolidated Loan during the fiscal year ended June 30, 2016. As required by dissolution law, twenty percent of the amount available will be deposited into the City's Low -Moderate Income Housing Fund. On September 22, 2015, Governor Brown signed new legislation that became effective immediately. The new legislation requires accrued interest on city loans to be recalculated using a simple interest rate of 3%. Previously, accrued interest on the City's loan was calculated using historical Local Agency Investment Fund (LAIF) rates. At June 30, 2015, using historical LAIF rates, the loan balance was $12,047,891. Based on the new law, the financial statements for the fiscal year ended June 30, 2015 include a net loss of $1,590,826 to reduce the loan balance to the recalculated amount of $10,457,065. This amount is reflected as an extraordinary item in the Statement of Changes in Fiduciary Net Position. June 30, 2015 Principal Interest Balance Portuguese Bend $ 4,268,513 $2,771,363 $ 7,039,876 Abalone Cove 2,401,348 1,015,841 3,417,189 Allowance from Successor Agency Receivable (6,669,861) (3,787,204) (10,457,065) Totals: $ - $ - $ - Due to the uncertainty of Redevelopment Property Tax Trust Fund revenue available for future loan repayments, the City's loan receivable of $10,457,065 has been completely offset with an allowance for uncollectable amounts on the City's financial statements. 70 A-90 ATTACHMENT A CITY OF RANCHO PALOS VERDES NOTES TO FINANCIAL STATEMENTS JUNE 30, 2015 Tax Increment Bond and Deferred Interest Payable In July 1991, the former Redevelopment Agency 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 former Redevelopment Agency in the amount of $787,340. Per the terms of the Agreement, $1,000,000 of the proceeds was deposited in the Abalone Cove Permanent Fund of the Joint Powers Improvement Authority. The remainder of the proceeds was accounted for in the former Redevelopment Agency's Abalone Cove Fund. Concurrent with the execution of the Agreement, the County deeded its title in the Abalone Cove Beach Park to the former Redevelopment Agency. As part of the Agreement, the former Redevelopment Agency was 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 former Redevelopment Agency was to pay the Loan principal plus interest at 7.7654 percent over a 30 -year period that began in 1992. However, these debt payments were to be deferred 10 years until the fiscal year ended June 30, 2002. As part of the deferral arrangement, the accrued interest from the inception of the Loan through June 30, 2002, in the amount of $7,314,944, was scheduled for payment over a 20 -year period beginning in the fiscal year ended June 30, 2002 with no additional interest. The remaining balance of $10,274,119 was scheduled for payment to the County over a 20 -year period beginning in the fiscal year ended June 30, 2002, with interest at 7.7654 percent. On November 1, 1997, the City, the former Redevelopment Agency and the County of Los Angeles entered into a Memorandum of Understanding (MOU) agreeing to restructure the repayment schedule of the debt owed to the County by the former Redevelopment Agency. In accordance with the terms of the MOU, the $10,000,000 loan principal owed to the County was cancelled. As consideration for the loan 71 A-91 ATTACHMENT A CITY OF RANCHO PALOS VERDES NOTES TO FINANCIAL STATEMENTS JUNE 30, 2015 cancellation, the former Redevelopment Agency 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 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 bond was issued as a conduit through the Improvement Authority to the County. No issuance costs were incurred. Future allocations of property tax to the Successor Agency will fund the payment of the bond debt and the deferred interest from the original Loan until paid in full. The principal of the bond began maturing in installments each December 2nd, commencing December 2, 2004. Interest accrues at a rate of 5 percent per annum and is payable in arrears each June 2nd and December 2nd. Additionally, both the accrued interest and deferred interest on the $10,000,000 Loan previously owed the County was retroactively recalculated from the Loan origination date at a rate of approximately 5 percent compared to 7.7654 percent per the original Agreement. The recalculated deferred interest was $3,111,400. In accordance with the MOU, the recalculated deferred interest does not accrue additional interest. As of June 30, 2014, the balance of the deferred interest debt has been completely repaid. The California Department of Finance has approved the Tax Increment Bond and Deferred Interest Payable as obligations of the Successor Agency. The debt service schedule below summarizes all fixed principal and interest payments for the term of the bond. Because the payback period for the deferred interest amount will fluctuate depending on the availability of excess property tax revenue, no amounts have been included in the following schedule for repayment of the deferred interest. 72 A-92 ATTACHMENT A CITY OF RANCHO PALOS VERDES NOTES TO FINANCIAL STATEMENTS JUNE 30, 2015 Year Ending June 30, Principal Interest Total 2016 180,000 228,250 408,250 2017 200,000 218,750 418,750 2018 230,000 208,000 438,000 2019 255,000 195,875 450,875 2020 280,000 182,500 462,500 2021-2025 1,900,000 657,500 2,557,500 2026-2028 1,610,000 125,000 1, 735, 000 Totals $4,655,000 $ 1,815,875 $ 6,470,875 NOTE 15 — PRIOR PERIOD ADJUSTMENTS As discussed under Note 1, the City implemented GASB Statement No. 68 and GASB Statement No. 71 effective July 1, 2014. Refer to Note 8 for further disclosures related to the plan and related balances. As a result of the implementation, the City restated beginning net position for governmental activities as noted in the following table. Governmental Activities Beginning of year, as previously reported Net Position $ 172,897,824 Contributions after the measurement date - deferred outflows of resources 848,613 Net Pension Liability as of the measurement date of June 30, 2013 (7,807,816) Beginning of year, as restated Net Position $ 165,938,621 Following is the pro forma effect of the retroactive application: Governmental Activities Deferred outflows of resources Net pension liability June 30, 2014 Previously June 30, 2014 Presented Restatement Restated 848,613 848,613 7,807,816 7,807,816 In accordance with GASB 68 and 71, the restatement of all deferred outflows and inflows was not practical and therefore not included in the statement of beginning balances. 73 A-93 ATTACHMENT A 74 A-94 ATTACHMENT A REQUIRED SUPPLEMENTARY INFORMATION 75 A-95 ATTACHMENT A City of Rancho Palos Verdes Schedule of Proportionate Share of the Net Pension Liability Last Ten Years' Fiscal Year Ended June 30 2015 Proportion of the net pension liability 0.09183% Proportionate share of the net pension liability 2 $ 5,714,320 Covered - employee payroll $ 5,839,326 Proportionate share of the net pension liability as a percentage of covered -employee payroll 97.86% Plan fiduciary net position as a percentage of the total pension liability 79.82% ' Fiscal year 2015 was the first year of implementation, therefore, only one year is shown. 2 The measurement date for net pension liability is one year prior to the financial statement date. For example, the measurement date for net pension liability reported at June 30, 2015 is one year prior, or June 30, 2014. 76 A-96 ATTACHMENT A City of Rancho Palos Verdes Schedule of Contributions Last Ten Years* Fiscal Year Ended June 30 Actuarially determined contribution Contributions in relation to the actuarially determined contribution Contribution deficiency (excess) Covered -employee payroll Contributions as a percentage of covered -employee payroll * - Fiscal year 2015 was the first year of implementation, therefore, only one year is shown. 2015 $ 725,496 725,496 5,926,209 12.24% 77 A-97 ATTACHMENT A 78 A-98 ATTACHMENT A SUPPLEMENTARY INFORMATION 79 A-99 ATTACHMENT A CITY OF RANCHO PALOS VERDES SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE BUDGET AND ACTUAL CAPITAL IMPROVEMENTS CAPITAL PROJECTS FUND For the year ended June 30, 2015 OTHER FINANCING SOURCES (USES) Transfers in 9,403,806 14,007,053 11,753,919 Variance with Transfers out - (820,000) (969,422) Final Budget TOTAL OTHER FINANCING SOURCES Budgeted Amounts Positive Original Final Actual (Negative) REVENUES: NET CHANGE IN FUND BALANCE 1,126,689 6,040,239 2,436,175 Revenue from other agencies $ 541,183 $ 3,238,785 $ 312,272 $ (2,926,513) Use of money and property 16,700 16,700 36,014 19,314 TOTAL REVENUES 557,883 3,255,485 348,286 (2,907,199) EXPENDITURES: Capital Outlay Infrastructure administration 150,000 65,000 25,277 39,723 Street improvements 5,500,000 6,375,179 6,419,873 (44,694) Parks/trails/open space improvements 1,535,000 2,532,043 1,952,382 579,661 Sewer improvements - 64,943 25,738 39,205 Building improvements 890,000 445,134 273,338 171,796 Storm water quality improvements 400,000 750,000 - 750,000 Landslide improvements 360,000 170,000 - 170,000 TOTAL EXPENDITURES 8,835,000 10,402,299 8,696,608 1,705,691 EXCESS (DEFICIENCY) OF REVENUES OVER (UNDER) EXPENDITURES (8,277,117) (7,146,814) (8,348,322) (1,201,508) OTHER FINANCING SOURCES (USES) Transfers in 9,403,806 14,007,053 11,753,919 (2,253,134) Transfers out - (820,000) (969,422) (149,422) TOTAL OTHER FINANCING SOURCES (USES) 9,403,806 13,187,053 10,784,497 (2,402,556) NET CHANGE IN FUND BALANCE 1,126,689 6,040,239 2,436,175 (3,604,064) FUND BALANCE - BEGINNING OF YEAR 18,011,254 18,011,254 18,011,254 - FUND BALANCE - END OF YEAR $ 19,137,943 $ 24,051,493 $ 20,447,429 $ (3,604,064) 80 A-100 ATTACHMENT A CITY OF RANCHO PALOS VERDES JUNE 30, 2015 NONMAJOR GOVERNMENTAL FUNDS Special Revenue 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. 1972 Act Landscaping and Lighting District (1972 Act) — to account for revenues and costs associated with the City's landscaping and lighting district. EI Prado — to account for taxes collected to maintain and service existing and proposed improvements to the common area of the EI Prado neighborhood. 1911 Act Lighting District (1911 Act) — to account for revenue and costs associated with a lighting district transferred to the "city -side" landscape and lighting district from the County in 1995. 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. Air Quality Management — to account for AB2766 fees received to fund programs to reduce air pollution from motor vehicles. Proposition C — to account for sales taxes received from the County and used to support public transit and related services. Proposition A — to account for the City share of an additional one-half percent sales tax designated to fund certain public transportation orientated projects. 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. Measure R — to account for the half -cent sales tax approved by the Los Angeles County voters in November 2008 to meet transportation needs, including maintenance and improvement of arterial streets, traffic control, bikeway and pedestrian improvements, and public transit. 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. 81 A-101 ATTACHMENT A CITY OF RANCHO PALOS VERDES JUNE 30, 2015 NONMAJOR GOVERNMENTAL FUNDS Abalone Cove Sewer Assessment District — to account for property assessments used to partially pay for operation and maintenance of the Abalone Cove sewer system. Dr. Allen and Charlotte Ginsburg Cultural Arts Building — to account for a private donation to be used for either construction of a building at the Upper Point Vicente Civic Center to be used for dancing and other cultural activities, or for the purchase of open space within the City for habitat conservation and passive recreational purposes. Donor Restricted Contributions — to account for donations received to construct or acquire recreational facilities within the City. Joint Powers Improvement Authority - Portuguese Bend — to account for maintenance and repairs of landslide abatement improvements in the Portuguese Bend Project area. Community Development Block Grant — to account forfederal grants received from the Department of Housing and Urban Development. Quimby — to account for developer paid fees or the dedication of land for park and recreation purposes. Environmental Excise Tax — to account for taxes received in connection with new construction within the City. Bikeways — to account for state funds that are used for the construction of bikeways and pedestrian facilities. Capital Proiects Fund Descriptions Capital Projects Funds are used to account for financial resources used for the acquisition or construction of major capital facilities. Low -Moderate Income Housing — to account for low & moderate income housing assets that were transferred to the City after electing to retain the housing assets and function of the former redevelopment agency, which was dissolved on January 31, 2012. Affordable Housing In -Lieu — to account for developer fees paid in -lieu of providing affordable housing in conjunction with new development as required by the Affordable Housing Chapter of the City's Municipal Code (Chapter 17.11). 82 A-102 ATTACHMENT A CITY OF RANCHO PALOS VERDES JUNE 30, 2015 NONMAJOR GOVERNMENTAL FUNDS Permanent Fund Descriptions Permanent Funds are used to account for resources legally restricted to the extent that only earnings, and not principal, may be used for purposes that support the City's programs. Habitat Restoration — to account for fees paid by developers for conservation easements to be used exclusively for habitat restoration efforts on City owned property. Subregion One Maintenance — to account for monies used to maintain public improvements and habitat areas dedicated to the City upon completion of the Subregion One residential development project also known as Oceanfront Estates. As part of the development agreement, the City received a $750,000 non - expendable deposit. The interest earnings contribute to the maintenance of the public open space. Joint Powers Improvement Authority - Abalone Cove — to account for monies received as part of a July 1991 Reimbursement and Settlement Agreement with the County of Los Angeles. As a part of this Agreement, the Authority received a $1,000,000 non -expendable deposit. The interest earnings are used to pay for maintenance and repair of Abalone Cove landslide abatement improvements. 83 A-103 ATTACHMENT A CITY OF RANCHO PALOS VERDES COMBINING BALANCE SHEET OTHER GOVERNMENTAL FUNDS June 30, 2015 ASSETS Cash and investments Receivables: Taxes Interest Notes Due from other government agencies Other Prepaid items TOTAL ASSETS LIABILITIES Accounts payable Due to other funds TOTAL LIABILITIES DEFERRED INFLOWS OF RESOURCES Unavailable revenue TOTAL DEFERRED INFLOWS OF RESOURCES FUND BALANCES Non -Spendable: Endowment principal Reimbursement settlement agreement Habitat restoration Restricted Committed Assigned Unassigned TOTAL FUND BALANCES TOTAL LIABILITIES, DEFERRED INFLOWS AND FUND BALANCES 1972 Act EI Prado 1911 Act $ 44,756 $ 22,749 $ 1,808,309 4,065 48 12,418 132 13 1,130 45 $ 48,953 $ 22,810 $ 1,821,902 $ 1,750 $ - $ 27,052 1,750 - 27,052 47,203 22,810 1,794,850 47,203 22,810 1,794,850 $ 48,953 $ 22,810 $ 1,821,902 :E A-104 ATTACHMENT A Continued $ - $ 15,781 $ 15,781 - - 11,401 - - 11,401 - - 492,920 102,602 192,990 571,856 - - - 571,856 492,920 102,602 192,990 $ 571,856 $ 520,102 $ 102,602 $ 192,990 85 A-105 Waste Air Quality Beautification Reduction Management Proposition C $ 571,380 $ 492,253 $ 88,761 $ 191,879 476 298 51 1,111 - 11,401 13,790 - - 16,150 - - $ 571,856 $ 520,102 $ 102,602 $ 192,990 $ - $ 15,781 $ 15,781 - - 11,401 - - 11,401 - - 492,920 102,602 192,990 571,856 - - - 571,856 492,920 102,602 192,990 $ 571,856 $ 520,102 $ 102,602 $ 192,990 85 A-105 ATTACHMENT A CITY OF RANCHO PALOS VERDES COMBINING BALANCE SHEET OTHER GOVERNMENTAL FUNDS June 30, 2015 ASSETS Cash and investments Receivables: Taxes Interest Notes Due from other government agencies Other Prepaid items TOTAL ASSETS LIABILITIES Accounts payable Due to other funds TOTAL LIABILITIES DEFERRED INFLOWS OF RESOURCES Unavailable revenue TOTAL DEFERRED INFLOWS OF RESOURCES FUND BALANCES Non -Spendable: Endowment principal Reimbursement settlement agreement Habitat restoration Restricted Committed Assigned Unassigned TOTAL FUND BALANCES TOTAL LIABILITIES, DEFERRED INFLOWS AND FUND BALANCES Public Safety Proposition A Grants Measure R $ 236,177 $ 26,936 $ 1,152,233 298 76 990 $ 236,475 $ 27,012 $ 1,153,223 $ 402 $ 402 - - 236,073 27,012 1,153,223 236,073 27,012 1,153,223 $ 236,475 $ 27,012 $ 1,153,223 :• A-106 ATTACHMENT A Continued $ - $ 4,521 $ - $ 10,426 47,453 - - - 47,453 4,521 - 10,426 111,419 - - - 111,419 - - - - 101,419 870,740 54,552 - - (47,302) - - - (47,302) 54,552 101,419 870,740 $ 111,570 $ 59,073 $ 101,419 $ 881,166 87 A-107 Dr. Allen and Abalone Charlotte Cove Ginsburg Donor Sewer Cultural Arts Restricted Measure A District Building Contributions $ - $ 52,037 $ 101,358 $ 880,636 - 7,001 - - 151 35 61 530 111,419 - - - $ 111,570 $ 59,073 $ 101,419 $ 881,166 $ - $ 4,521 $ - $ 10,426 47,453 - - - 47,453 4,521 - 10,426 111,419 - - - 111,419 - - - - 101,419 870,740 54,552 - - (47,302) - - - (47,302) 54,552 101,419 870,740 $ 111,570 $ 59,073 $ 101,419 $ 881,166 87 A-107 ATTACHMENT A CITY OF RANCHO PALOS VERDES COMBINING BALANCE SHEET OTHER GOVERNMENTAL FUNDS June 30, 2015 ASSETS Cash and investments Receivables: Taxes Interest Notes Due from other government agencies Other Prepaid items TOTAL ASSETS LIABILITIES Accounts payable Due to other funds TOTAL LIABILITIES DEFERRED INFLOWS OF RESOURCES Unavailable revenue TOTAL DEFERRED INFLOWS OF RESOURCES FUND BALANCES Non -Spendable: Endowment principal Reimbursement settlement agreement Habitat restoration Restricted Committed Assigned Unassigned TOTAL FUND BALANCES TOTAL LIABILITIES, DEFERRED INFLOWS AND FUND BALANCES Joint Powers Improvement Authority Portuguese Bend Community Development Block Grant Quimby $ 344,866 $ - $ 1,336,710 84 800 21,110 - $ 344,950 $ 21,110 $ 1,337,510 $ 11,761 $ 11,065 $ - - 9,344 - 11,761 20,409 - 12,325 - 12,325 - 333,189 - 1,337,510 - (11,624) - 333,189 (11,624) 1,337,510 $ 344,950 $ 21,110 $ 1,337,510 � �i ATTACHMENT A Continued Total Special Low -Moderate Environmental Revenue Income Excise Tax Bikeways Funds Housing $ 336,739 $ 97 $ 7,687,876 $ 45,917 - - 23,532 - 259 6,495 24 157,720 - 16,195 - $ 336,998 $ 97 $ 7,891,818 $ 45,941 82,758 $ - 56,797 - 139,555 - 135,145 135,145 - 336,998 97 7,049,636 - - - 54,552 - 571,856 45,941 - - (58,926) - 336,998 97 7,617,118 45,941 $ 336,998 $ 97 $ 7,891,818 $ 45,941 89 A-109 ATTACHMENT A CITY OF RANCHO PALOS VERDES COMBINING BALANCE SHEET OTHER GOVERNMENTAL FUNDS June 30, 2015 ASSETS Cash and investments Receivables: Taxes Interest Notes Due from other government agencies Other Prepaid items TOTAL ASSETS LIABILITIES Accounts payable Due to other funds TOTAL LIABILITIES DEFERRED INFLOWS OF RESOURCES Unavailable revenue TOTAL DEFERRED INFLOWS OF RESOURCES FUND BALANCES Non -Spendable: Endowment principal Reimbursement settlement agreement Habitat restoration Restricted Committed Assigned Unassigned TOTAL FUND BALANCES TOTAL LIABILITIES, DEFERRED INFLOWS AND FUND BALANCES Total Affordable Capital Housing Projects Habitat In -Lieu Funds Restoration $ 584,273 $ 630,190 $ 1,506,908 349 373 894 $ 584,622 $ 630,563 $ 1,507,802 38,100 38,100 105,476 1,364,226 584,622 630,563 - 584,622 630,563 1,469,702 $ 584,622 $ 630,563 $ 1,507,802 A-110 Subregion One Maintenance Joint Powers Improvement Authority Abalone Cove ATTACHMENT A Total Permanent Funds Total Other Governmental Funds $ 823,182 $ 1,066,151 $ 3,396,241 $ 11,714,307 - - - 23,532 495 261 1,650 8,518 157,720 16,195 $ 823,677 7--1,066,412 $ 3,397,891 $ 11,920,272 $ 5,081 $ 6,906 $ 50,087 $ 132,845 - - - 56,797 5,081 6,906 50,087 189,642 - - - 135,145 135,145 750,000 - 750,000 750,000 - 1,000,000 1,000,000 1,000,000 - - 105,476 105,476 68,596 59,506 1,492,328 8,541,964 - - - 54,552 - - - 1,202,419 - - - (58,926) 1,059,506 11,595,485 818,596 3,347,804 $ 823,677 $ 1,066,412 $ 3,397,891 $ 11,920,272 ATTACHMENT A CITY OF RANCHO PALOS VERDES COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES OTHER GOVERNMENTAL FUNDS For the year ended June 30, 2015 92 A-112 1972 Act EI Prado 1911 Act REVENUES: Taxes $ 259,520 $ 2,270 $ 580,631 Revenue from other agencies Charges for services Use of money and property 357 49 4,248 Other revenues TOTAL REVENUES 259,877 2,319 584,879 EXPENDITURES: Public Works 75,337 689 447,688 Community Development TOTAL EXPENDITURES 75,337 689 447,688 EXCESS (DEFICIENCY) OF REVENUES OVER (UNDER) EXPENDITURES 184,540 1,630 137,191 OTHER FINANCING SOURCES (USES): Transfers in Transfers out (200,000) (99,000) TOTAL OTHER FINANCING SOURCES USES (200,000) - (99,000) NET CHANGE IN FUND BALANCE (15,460) 1,630 38,191 FUND BALANCE - BEGINNING OF YEAR 62,663 21,180 1,756,659 FUND BALANCE - END OF YEAR $ 47,203 $ 22,810 $ 1,794,850 92 A-112 ATTACHMENT A Continued 93 A-113 Waste Air Quality Beautification Reduction Management Proposition C 11,879 66,122 618,572 1,935 1,077 203 4,093 236,486 1,935 249,442 66,325 622,665 114,320 50,000 - 114,320 50,000 - 1,935 135,122 16,325 622,665 (224,000) (40,000) - (1,747,468) (224,000) (40,000) - (1,747,468) (222,065) 95,122 16,325 (1,124,803) 793,921 397,798 86,277 1,317,793 $ 571,856 $ 492,920 $ 102,602 $ 192,990 93 A-113 ATTACHMENT A CITY OF RANCHO PALOS VERDES COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES OTHER GOVERNMENTAL FUNDS For the year ended June 30, 2015 REVENUES: Taxes Revenue from other agencies Charges for services Use of money and property Other revenues TOTALREVENUES EXPENDITURES: Public Works Community Development TOTAL EXPENDITURES EXCESS (DEFICIENCY) OF REVENUES OVER (UNDER) 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 Public Safety Proposition A Grants Measure R 744,798 106,230 463,448 1,203 212 3,518 746,001 106,442 466,966 640,567 640,567 - - 105,434 106,442 466,966 (310,886) (100,000) (564,000) (310,886) (100,000) (564,000) (205,452) 6,442 (97,034) 441,525 20,570 1,250,257 $ 236,073 $ 27,012 $ 1,153,223 94 A-114 ATTACHMENT A 95 A-115 Continued Dr. Allen and Abalone Charlotte Cove Ginsburg Donor Sewer Cultural Arts Restricted Measure A District Building Contributions 261,049 57,643 331 119 258 2,079 25,500 261,380 57,762 258 27,579 112,145 18,000 22,520 - 112,145 18,000 22,520 261,380 (54,383) (17,742) 5,059 50,700 (261,049) (261,049) 50,700 - - 331 (3,683) (17,742) 5,059 (47,633) 58,235 119,161 865,681 $ (47,302) $ 54,552 $ 101,419 $ 870,740 95 A-115 ATTACHMENT A CITY OF RANCHO PALOS VERDES COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES OTHER GOVERNMENTAL FUNDS For the year ended June 30, 2015 REVENUES: Taxes Revenue from other agencies Charges for services Use of money and property Other revenues TOTALREVENUES EXPENDITURES: Public Works Community Development TOTAL EXPENDITURES EXCESS (DEFICIENCY) OF REVENUES OVER (UNDER) 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 Joint Powers Improvement Authority Community Portuguese Development Bend Block Grant Quimby 83,217 84 1,327 1,278,322 84 83,217 1,279,649 69,351 26,170 - 69,351 26,170 - (69,267) 57,047 1,279,649 40,000 40,000 - - (29,267) 57,047 1,279,649 362,456 (68,671) 57,861 $ 333,189 $ (11,624) $ 1,337,510 96 A-116 ATTACHMENT A Continued 97 A-117 Total Special Low -Moderate Environmental Revenue Income Excise Tax Bikeways Funds Housing $ - $ - $ 842,421 $ - - 2,355,315 57,643 1,001 25 22,119 71 20,012 1,560,320 22,350 21,013 25 4,837,818 22,421 - 1,576,787 - - 1,576,787 - 21,013 25 3,261,031 22,421 90,700 (97,199) - (3,643,602) (97,199) - (3,552,902) - (76,186) 25 (291,871) 22,421 413,184 72 7,908,989 23,520 $ 336,998 $ 97 $ 7,617,118 $ 45,941 97 A-117 ATTACHMENT A CITY OF RANCHO PALOS VERDES COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES OTHER GOVERNMENTAL FUNDS For the year ended June 30, 2015 REVENUES: Taxes Revenue from other agencies Charges for services Use of money and property Other revenues TOTALREVENUES EXPENDITURES: Public Works Community Development TOTAL EXPENDITURES EXCESS (DEFICIENCY) OF REVENUES OVER (UNDER) 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 98 A-118 Total Affordable Capital Housing Projects Habitat In -Lieu Funds Restoration 1,339 1,410 3,634 83,355 105,705 1,666 84,694 107,115 5,300 - 136,059 - - 136,059 84,694 107,115 (130,759) - 157,000 - - 157,000 84,694 107,115 26,241 499,928 523,448 1,443,461 $ 584,622 $ 630,563 $ 1,469,702 98 A-118 ATTACHMENT A 99 A-119 Joint Powers Improvement Total Subregion Authority Total Other One Abalone Permanent Governmental Maintenance Cove Funds Funds $ - $ - $ - $ 842,421 - 2,355,315 - 57,643 1,947 264 5,845 29,374 1,666 1,667,691 1,947 264 7,511 4,952,444 51,319 57,306 244,684 1,821,471 51,319 57,306 244,684 1,821,471 (49,372) (57,042) (237,173) 3,130,973 46,000 35,000 238,000 328,700 - (3,643,602) 46,000 35,000 238,000 (3,314,902) (3,372) (22,042) 827 (183,929) 821,968 1,081,548 3,346,977 11,779,414 $ 818,596 $ 1,059,506 $ 3,347,804 $ 11,595,485 99 A-119 ATTACHMENT A 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, 2015 REVENUES: Taxes Use of money and property TOTALREVENUES EXPENDITURES: Public Works EXCESS (DEFICIENCY) OF REVENUES OVER (UNDER) 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 $ 258,000 $ 258,000 258,140 258,140 Actual $ 259,520 357 259,877 Variance with Final Budget Positive (Negative) $ 1,520 217 1,737 78,300 78,300 75,337 2,963 179,840 179,840 184,540 (200,000) (200,000) (200,000) (20,160) (20,160) (15,460) 62,663 62,663 62,663 $ 42,503 $ 42,503 $ 47,203 $ 4,700 4,700 4,700 100 A-120 ATTACHMENT A 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, 2015 REVENUES: Taxes Use of money and property TOTALREVENUES EXPENDITURES: Public Works EXCESS (DEFICIENCY) OF REVENUES OVER (UNDER) EXPENDITURES FUND BALANCE - BEGINNING OF YEAR FUND BALANCE - END OF YEAR Budgeted Amounts Original Final $ 1,900 $ 1,900 $ Variance with Final Budget Positive Actual (Negative) 2,270 $ 370 49 9 1,940 1,940 2,319 379 1,000 1,000 689 311 940 940 1,630 690 21,180 21,180 21,180 - $ 22,120 $ 22,120 $ 22,810 $ 690 101 A-121 ATTACHMENT A 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, 2015 102 A-122 Variance with Final Budget Budgeted Amounts Positive Original Final Actual (Negative) REVENUES: Taxes $ 525,000 $ 525,000 $ 580,631 $ 55,631 Use of money and property 3,500 3,500 4,248 748 TOTAL REVENUES 528,500 528,500 584,879 56,379 EXPENDITURES: Public Works 449,100 464,100 447,688 16,412 EXCESS (DEFICIENCY) OF REVENUES OVER (UNDER) EXPENDITURES 79,400 64,400 137,191 72,791 OTHER FINANCING SOURCES (USES): Transfers out (99,000) (99,000) (99,000) - NET CHANGE IN FUND BALANCE (19,600) (34,600) 38,191 72,791 FUND BALANCE - BEGINNING OF YEAR 1,756,659 1,756,659 1,756,659 - FUND BALANCE - END OF YEAR $ 1,737,059 $ 1,722,059 $ 1,794,850 $ 72,791 102 A-122 ATTACHMENT A 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, 2015 REVENUES: Use of money and property TOTALREVENUES 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 690 690 Variance with Final Budget Positive Actual (Negative) $ 1,935 $ 1,245 1,935 1,245 (224,000) (697,690) (224,000) 473,690 (223,310) (697,000) (222,065) 474,935 793,921 793,921 793,921 - $ 570,611 $ 96,921 $ 571,856 $ 474,935 103 A-123 ATTACHMENT A 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, 2015 104 A-124 Variance with Final Budget Budgeted Amounts Positive Original Final Actual (Negative) REVENUES: Revenue from other agencies $ 12,000 $ 19,000 $ 11,879 $ (7,121) Use of money and property 800 800 1,077 277 Other revenues 210,000 210,000 236,486 26,486 TOTAL REVENUES 222,800 229,800 249,442 19,642 EXPENDITURES: Public Works 177,650 200,162 114,320 85,842 EXCESS (DEFICIENCY) OF REVENUES OVER (UNDER) EXPENDITURES 45,150 29,638 135,122 105,484 OTHER FINANCING SOURCES (USES): Transfers out (50,000) (57,000) (40,000) 17,000 NET CHANGE IN FUND BALANCE (4,850) (27,362) 95,122 122,484 FUND BALANCE - BEGINNING OF YEAR 397,798 397,798 397,798 - FUND BALANCE - END OF YEAR $ 392,948 $ 370,436 $ 492,920 $ 122,484 104 A-124 ATTACHMENT A CITY OF RANCHO PALOS VERDES SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE BUDGET AND ACTUAL AIR QUALITY MANAGEMENT SPECIAL REVENUE FUND For the year ended June 30, 2015 REVENUES: Revenue from other agencies Use of money and property TOTALREVENUES EXPENDITURES: Public Works EXCESS (DEFICIENCY) OF REVENUES OVER (UNDER) 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 $ 50,000 $ 50,000 50,210 50,210 Actual $ 66,122 203 66,325 50,000 50,000 50,000 Variance with Final Budget Positive (Negative) $ 16,122 (7) 16,115 210 210 16,325 16,115 210 210 16,325 16,115 86,277 86,277 86,277 - $ 86,487 $ 86,487 $ 102,602 $ 16,115 105 A-125 ATTACHMENT A 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, 2015 REVENUES: Revenue from other agencies Use of money and property TOTALREVENUES OTHER FINANCING SOURCES (USES): Transfers out NET CHANGE IN FUND BALANCE FUND BALANCE - BEGINNING OF YEAR FUND BALANCE - END OF YEAR 106 A-126 Variance with Final Budget Budgeted Amounts Positive Original Final Actual (Negative) $ 611,689 $ 611,689 $ 618,572 $ 6,883 790 790 4,093 3,303 612,479 612,479 622,665 10,186 (691,000) (1,989,719) (1,747,468) 242,251 (78,521) (1,377,240) (1,124,803) 252,437 1,317,793 1,317,793 1,317,793 - $ 1,239,272 $ (59,447) $ 192,990 $ 252,437 106 A-126 ATTACHMENT A 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, 2015 REVENUES: Revenue from other agencies Use of money and property TOTALREVENUES EXPENDITURES: Public Works EXCESS (DEFICIENCY) OF REVENUES OVER (UNDER) EXPENDITURES OTHER FINANCING SOURCES (USES): Transfers out NET CHANGE IN FUND BALANCE FUND BALANCE - BEGINNING OF YEAR FUND BALANCE - END OF YEAR 107 A-127 Variance with Final Budget Budgeted Amounts Positive Original Final Actual (Negative) $ 737,443 $ 737,443 $ 744,798 $ 7,355 - - 1,203 1,203 737,443 737,443 746,001 8,558 596,823 687,539 640,567 46,972 140,620 49,904 105,434 55,530 (48,000) (460,000) (310,886) 149,114 92,620 (410,096) (205,452) 204,644 441,525 441,525 441,525 - $ 534,145 $ 31,429 $ 236,073 $ 204,644 107 A-127 ATTACHMENT A CITY OF RANCHO PALOS VERDES SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE BUDGET AND ACTUAL PUBLIC SAFETY GRANTS SPECIAL REVENUE FUND For the year ended June 30, 2015 108 A-128 Variance with Final Budget Budgeted Amounts Positive Original Final Actual (Negative) REVENUES: Revenue from other agencies $ 100,000 $ 100,000 $ 106,230 $ 6,230 Use of money and property 40 40 212 172 TOTAL REVENUES 100,040 100,040 106,442 6,402 OTHER FINANCING SOURCES (USES): Transfers out (100,000) (100,000) (100,000) - NET CHANGE IN FUND BALANCE 40 40 6,442 6,402 FUND BALANCE - BEGINNING OF YEAR 20,570 20,570 20,570 - FUND BALANCE - END OF YEAR $ 20,610 $ 20,610 $ 27,012 $ 6,402 108 A-128 ATTACHMENT A CITY OF RANCHO PALOS VERDES SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE BUDGET AND ACTUAL MEASURE R SPECIAL REVENUE FUND For the year ended June 30, 2015 OTHER FINANCING SOURCES (USES) Transfers out (1,000,000) (1,564,000) Variance with NET CHANGE IN FUND BALANCE (539,727) (1,103,727) Final Budget FUND BALANCE - BEGINNING OF YEAR Budgeted Amounts 1,250,257 Positive FUND BALANCE - END OF YEAR Original Final Actual (Negative) REVENUES: Revenue from other agencies $ 458,773 $ 458,773 $ 463,448 $ 4,675 Use of money and property 1,500 1,500 3,518 2,018 TOTAL REVENUES 460,273 460,273 466,966 6,693 OTHER FINANCING SOURCES (USES) Transfers out (1,000,000) (1,564,000) (564,000) 1,000,000 NET CHANGE IN FUND BALANCE (539,727) (1,103,727) (97,034) 1,006,693 FUND BALANCE - BEGINNING OF YEAR 1,250,257 1,250,257 1,250,257 - FUND BALANCE - END OF YEAR $ 710,530 $ 146,530 $ 1,153,223 $ 1,006,693 109 A-129 ATTACHMENT A CITY OF RANCHO PALOS VERDES SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE BUDGET AND ACTUAL MEASURE A SPECIAL REVENUE FUND For the year ended June 30, 2015 REVENUES: Revenue from other agencies Use of money and property TOTALREVENUES 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 $ 105,000 $ 289,855 105,100 289,955 Actual $ 261,049 331 261,380 Variance with Final Budget Positive (Negative) $ (28,806) 231 (28,575) (105,000) (289,855) (261,049) 28,806 100 100 331 231 (47,633) (47,633) (47,633) - $ (47,533) $ (47,533) $ (47,302) $ 231 110 A-130 ATTACHMENT A CITY OF RANCHO PALOS VERDES SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE BUDGET AND ACTUAL ABALONE COVE SEWER ASSESSMENT DISTRICT SPECIAL REVENUE FUND For the year ended June 30, 2015 REVENUES: Charges for services Use of money and property TOTALREVENUES EXPENDITURES: Public Works EXCESS (DEFICIENCY) OF REVENUES OVER (UNDER) EXPENDITURES OTHER FINANCING SOURCES (USES): Transfers in NET CHANGE IN FUND BALANCE FUND BALANCE - BEGINNING OF YEAR FUND BALANCE - END OF YEAR 111 A-131 Variance with Final Budget Budgeted Amounts Positive Original Final Actual (Negative) $ 55,080 $ 55,080 $ 57,643 $ 2,563 80 80 119 39 55,160 55,160 57,762 2,602 105,700 112,683 112,145 538 (50,540) (57,523) (54,383) 3,140 50,700 50,700 50,700 - 160 (6,823) (3,683) 3,140 58,235 58,235 58,235 - $ 58,395 $ 51,412 $ 54,552 $ 3,140 111 A-131 ATTACHMENT A CITY OF RANCHO PALOS VERDES SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE BUDGET AND ACTUAL DR. ALLEN AND CHARLOTTE GINSBURG CULTURAL ARTS BUILDING SPECIAL REVENUE FUND For the year ended June 30, 2015 REVENUES: Use of money and property TOTALREVENUES EXPENDITURES: Public Works EXCESS (DEFICIENCY) OF REVENUES OVER (UNDER) EXPENDITURES FUND BALANCE - BEGINNING OF YEAR FUND BALANCE - END OF YEAR Variance with Final Budget Budgeted Amounts Positive Original Final Actual (Negative) $ 260 $ 260 $ 258 $ (2) 260 260 258 (2) - 18,000 18,000 - 260 (17,740) (17,742) (2) 119,161 119,161 119,161 - $ 119,421 $ 101,421 $ 101,419 $ (2) 112 A-132 ATTACHMENT A CITY OF RANCHO PALOS VERDES SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE BUDGET AND ACTUAL DONOR RESTRICTED CONTRIBUTIONS SPECIAL REVENUE FUND For the year ended June 30, 2015 REVENUES: Use of money and property Other revenue TOTALREVENUES EXPENDITURES: Public Works Budgeted Amounts Original Final 1,850 1,850 1,850 1,850 32,500 22,520 9,980 EXCESS (DEFICIENCY) OF REVENUES OVER (UNDER) EXPENDITURES 1,850 (30,650) 5,059 35,709 FUND BALANCE - BEGINNING OF YEAR 865,681 865,681 865,681 - FUND BALANCE - END OF YEAR $ 867,531 $ 835,031 $ 870,740 $ 35,709 113 A-133 Variance with Final Budget Positive Actual (Negative) 2,079 229 25,500 25,500 27,579 25,729 32,500 22,520 9,980 EXCESS (DEFICIENCY) OF REVENUES OVER (UNDER) EXPENDITURES 1,850 (30,650) 5,059 35,709 FUND BALANCE - BEGINNING OF YEAR 865,681 865,681 865,681 - FUND BALANCE - END OF YEAR $ 867,531 $ 835,031 $ 870,740 $ 35,709 113 A-133 ATTACHMENT A CITY OF RANCHO PALOS VERDES SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE BUDGET AND ACTUAL JOINT POWERS IMPROVEMENT AUTHORITY PORTUGUESE BEND SPECIAL REVENUE FUND For the year ended June 30, 2015 REVENUES: Use of money and property EXPENDITURES: Public Works EXCESS (DEFICIENCY) OF REVENUES OVER (UNDER) EXPENDITURES OTHER FINANCING SOURCES (USES): Transfers in NET CHANGE IN FUND BALANCE FUND BALANCE - BEGINNING OF YEAR FUND BALANCE - END OF YEAR Variance with Final Budget Budgeted Amounts Positive Original Final Actual (Negative) $ 640 $ 640 $ 84 $ (556) 97,600 102,600 69,351 33,249 (96,960) (101,960) (69,267) 32,693 40,000 40,000 40,000 - (56,960) (61,960) (29,267) 32,693 362,456 362,456 362,456 - $ 305,496 $ 300,496 $ 333,189 $ 32,693 114 A-134 ATTACHMENT A 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, 2015 REVENUES: Revenue from other agencies EXPENDITURES: Public Works EXCESS (DEFICIENCY) OF REVENUES OVER (UNDER) EXPENDITURES FUND BALANCE - BEGINNING OF YEAR FUND BALANCE - END OF YEAR Variance with Final Budget Budgeted Amounts Positive Original Final Actual (Negative) $ 197,687 $ 265,877 $ 83,217 $ (182,660) 197,687 26,170 26,170 239,707 57,047 (182,660) (68,671) (68,671) (68,671) - $ (68,671) $ 171,036 $ (11,624) $ (182,660) 115 A-135 ATTACHMENT A CITY OF RANCHO PALOS VERDES SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE BUDGET AND ACTUAL QUIMBY ACT SPECIAL REVENUE FUND For the year ended June 30, 2015 REVENUES: Use of money and property Other revenues TOTALREVENUES EXPENDITURES: Public Works EXCESS (DEFICIENCY) OF REVENUES OVER (UNDER) 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 Positive Original Final Actual (Negative) 20 20 1,327 1,307 827,904 827,904 1,278,322 450,418 827,924 827,924 1,279,649 451,725 827,924 827,924 1,279,649 (835,000) (50,000) - (7,076) 777,924 1,279,649 57,861 57,861 57,861 $ 50,785 $ 835,785 $ 1,337,510 451,725 50,000 501,725 $ 501,725 116 A-136 ATTACHMENT A CITY OF RANCHO PALOS VERDES SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE BUDGET AND ACTUAL ENVIRONMENTAL EXCISE TAX SPECIAL REVENUE FUND For the year ended June 30, 2015 117 A-137 Variance with Final Budget Budgeted Amounts Positive Original Final Actual (Negative) REVENUES: Use of money and property 140 140 1,001 861 Other revenues 297,439 297,439 20,012 (277,427) TOTAL REVENUES 297,579 297,579 21,013 (276,566) EXPENDITURES: Public Works - - - - EXCESS (DEFICIENCY) OF REVENUES OVER (UNDER) EXPENDITURES 297,579 297,579 21,013 (276,566) OTHER FINANCING SOURCES (USES): Transfers out (100,000) (450,000) (97,199) 352,801 NET CHANGE IN FUND BALANCE 197,579 (152,421) (76,186) 76,235 FUND BALANCE - BEGINNING OF YEAR 413,184 413,184 413,184 - FUND BALANCE - END OF YEAR $ 610,763 $ 260,763 $ 336,998 $ 76,235 117 A-137 ATTACHMENT A CITY OF RANCHO PALOS VERDES SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE BUDGET AND ACTUAL BIKEWAYS SPECIAL REVENUE FUND For the year ended June 30, 2015 REVENUES: Revenue from other agencies Use of money and property TOTALREVENUES 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 Positive Original Final Actual (Negative) - 25 25 - 25 25 25 25 72 72 72 - $ 72 $ 72 $ 97 $ 25 118 A-138 ATTACHMENT A CITY OF RANCHO PALOS VERDES SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE BUDGET AND ACTUAL LOW -MODERATE INCOME HOUSING CAPITAL PROJECTS FUND For the year ended June 30, 2015 REVENUES: Use of money and property Other revenues TOTALREVENUES EXCESS (DEFICIENCY) OF REVENUES OVER (UNDER) EXPENDITURES FUND BALANCE - BEGINNING OF YEAR FUND BALANCE - END OF YEAR Budgeted Amounts Original Final Variance with Final Budget Positive Actual (Negative) 71 71 22,350 22,350 22,421 22,421 - - 22,421 22,421 23,520 23,520 23,520 - $ 23,520 $ 23,520 $ 45,941 $ 22,421 119 A-139 ATTACHMENT A CITY OF RANCHO PALOS VERDES SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE BUDGET AND ACTUAL AFFORDABLE HOUSING IN -LIEU CAPITAL PROJECTS FUND For the year ended June 30, 2015 REVENUES: Use of money and property Other revenues TOTALREVENUES EXPENDITURES: Community development EXCESS (DEFICIENCY) OF REVENUES OVER (UNDER) EXPENDITURES FUND BALANCE - BEGINNING OF YEAR FUND BALANCE - END OF YEAR 120 A-140 Variance with Final Budget Budgeted Amounts Positive Original Final Actual (Negative) 1,090 1,090 1,339 249 - - 83,355 83,355 1,090 1,090 84,694 83,604 1,090 1,090 84,694 83,604 499,928 499,928 499,928 - $ 501,018 $ 501,018 $ 584,622 $ 83,604 120 A-140 ATTACHMENT A CITY OF RANCHO PALOS VERDES SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE BUDGET AND ACTUAL HABITAT RESTORATION PERMANENT FUND For the year ended June 30, 2015 REVENUES: Revenue from other agencies Use of money and property Other revenues TOTALREVENUES EXPENDITURES: Public Works EXCESS (DEFICIENCY) OF REVENUES OVER (UNDER) EXPENDITURES OTHER FINANCING SOURCES (USES): Transfers in NET CHANGE IN FUND BALANCE FUND BALANCE - BEGINNING OF YEAR FUND BALANCE - END OF YEAR 121 A-141 Variance with Final Budget Budgeted Amounts Positive Original Final Actual (Negative) 4,690 4,690 3,634 (1,056) - - 1,666 1,666 4,690 4,690 5,300 610 159,689 159,689 136,059 23,630 (154,999) (154,999) (130,759) 24,240 157,000 157,000 157,000 - 2,001 2,001 26,241 24,240 1,443,461 1,443,461 1,443,461 - $ 1,445,462 $ 1,445,462 $ 1,469,702 $ 24,240 121 A-141 ATTACHMENT A CITY OF RANCHO PALOS VERDES SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE BUDGET AND ACTUAL SUBREGION ONE MAINTENANCE PERMANENT FUND For the year ended June 30, 2015 REVENUES: Use of money and property EXPENDITURES: Public Works EXCESS (DEFICIENCY) OF REVENUES OVER (UNDER) EXPENDITURES OTHER FINANCING SOURCES (USES): Transfers in NET CHANGE IN FUND BALANCE FUND BALANCE - BEGINNING OF YEAR FUND BALANCE - END OF YEAR Budgeted Amounts Original Final Actual $ 1,700 $ 1,700 $ 1,947 Variance with Final Budget Positive (Negative) $ 247 67,500 67,500 51,319 16,181 (65,800) (65,800) (49,372) 16,428 46,000 46,000 46,000 - (19,800) (19,800) (3,372) 16,428 821,968 821,968 821,968 - $ 802,168 $ 802,168 $ 818,596 $ 16,428 122 A-142 ATTACHMENT A CITY OF RANCHO PALOS VERDES SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE BUDGET AND ACTUAL JOINT POWERS IMPROVEMENT AUTHORITY ABALONE COVE PERMANENT FUND For the year ended June 30, 2015 REVENUES: Use of money and property EXPENDITURES: Public Works EXCESS (DEFICIENCY) OF REVENUES OVER (UNDER) EXPENDITURES OTHER FINANCING SOURCES (USES): Transfers in NET CHANGE IN FUND BALANCE FUND BALANCE - BEGINNING OF YEAR FUND BALANCE - END OF YEAR Variance with Final Budget Budgeted Amounts Positive Original Final Actual (Negative) $ 2,300 $ 2,300 $ 264 $ (2,036) 70,300 70,300 57,306 12,994 (68,000) (68,000) (57,042) 10,958 35,000 35,000 35,000 - (33,000) (33,000) (22,042) 10,958 1,081,548 1,081,548 1,081,548 - $ 1,048,548 $ 1,048,548 $ 1,059,506 $ 10,958 123 A-143 ATTACHMENT A 124 A-144 ATTACHMENT A CITY OF RANCHO PALOS VERDES JUNE 30, 2015 INTERNAL SERVICE FUND DESCRIPTIONS The Internal Service Funds are used to finance and account for goods and services provided by one City department to other City departments on a cost - reimbursement basis, including depreciation. Equipment Replacement — to account for purchases, replacement and maintenance of certain equipment items on behalf of all City departments. Building Replacement — to account for the accumulation of funds transferred from the General Fund for replacement of certain buildings on behalf of the City. Employee Benefits — to account for employee benefit costs for all employees charged to various City departments. 125 A-145 ATTACHMENT A CITY OF RANCHO PALOS VERDES COMBINING STATEMENT OF NET POSITION INTERNAL SERVICE FUNDS June 30, 2015 ASSETS CURRENT ASSETS: Cash and investments Receivables: Interest Other Prepaid items TOTAL CURRENT ASSETS NONCURRENT ASSETS: Capital assets Property and equipment Accumulated depreciation TOTAL NONCURRENT ASSETS TOTAL ASSETS LIABILITIES CURRENT LIABILITIES: Accounts payable and accrued liabilities Due to other funds TOTAL LIABILITIES NET POSITION Net investment in capital assets Unrestricted TOTAL NET POSITION Equipment Employee Building Replacement Benefits Replacement Totals $ 3,088,988 $ - $ - $ 3,088,988 1,886 194 565 2,645 795 1,214 - 2,009 - 174,903 - 174,903 3,091,669 176,311 565 3,268,545 1,600,407 - - 1,600,407 (1,113,202) - - (1,113,202) 487,205 - - 487,205 176,311 $ $ 3,578,874 $ 565 $ 3,755,750 97,565 35,307 - 132,872 - 9,576 565 10,141 97,565 44,883 565 143,013 487,205 - - 487,205 2,994,104 131,428 - 3,125,532 $ 3,481,309 $ 131,428 $ - $ 3,612,737 126 A-146 ATTACHMENT A CITY OF RANCHO PALOS VERDES COMBINING STATEMENT OF REVENUES, EXPENSES AND CHANGES IN NET POSITION INTERNAL SERVICE FUNDS For the year ended June 30, 2015 OPERATING REVENUES: Charges for services OPERATING EXPENSES: Personnel services Materials and supplies Maintenance Depreciation TOTAL OPERATING EXPENSES OPERATING INCOME (LOSS) NON-OPERATING REVENUES: Other revenues Investment income TOTAL NON-OPERATING REVENUES INCOME (LOSS) BEFORE TRANSFERS TRANSFERS Transfers in Transfers out TOTALTRANSFERS CHANGE IN NET POSITION NET POSITION - BEGINNING OF YEAR NET POSITION - END OF YEAR Equipment Employee Building Replacement Benefits Replacement Totals $ 906,301 $ 2,030,969 $ - $ 2,937,270 - 2,049,468 - 2,049,468 207,799 - - 207,799 360,645 - - 360,645 141,092 - - 141,092 709,536 2,049,468 - 2,759,004 196,765 (18,499) - 178,266 7,037 580 2,232 9,849 7,037 580 2,232 9,849 203,802 (17,919) 2,232 188,115 149,422 - - 149,422 - - (944,841) (944,841) 149,422 - (944,841) (795,419) 353,224 (17,919) (942,609) (607,304) 3,128,085 149,347 942,609 4,220,041 $ 3,481,309 $ 131,428 $ - $ 3,612,737 127 A-147 ATTACHMENT A CITY OF RANCHO PALOS VERDES COMBINING STATEMENT OF CASH FLOWS INTERNAL SERVICE FUNDS For the year ended June 30, 2015 CASH FLOWS FROM OPERATING ACTIVITIES: Receipts four interfund services provided Payments to suppliers Payments to employees NET CASH PROVIDED (USED) BY OPERATING ACTIVITIES CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES: Acquisition and construction of capital assets Due (from)/to other funds Transfer from/(to) other funds NET CASH FROM CAPITAL AND RELATED FINANCING ACTIVITIES: CASH FLOWS FROM INVESTING ACTIVITIES: Interest received on investments NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS CASH AND CASH EQUIVALENTS - BEGINNING OF YEAR CASH AND CASH EQUIVALENTS - END OF YEAR RECONCILIATION OF OPERATING LOSS TO NET CASH PROVIDED (USED) BY OPERATING ACTIVITIES Operating income (loss) Adjustments to reconcile operating income (loss) to net cash used by operating activities: Depreciation Changes in operating assets and liabilities: Decrease (increase) in other receivables Decrease (increase) in prepaid items Increase (decrease) in accrued liabilities NET CASH PROVIDED (USED) BY OPERATING ACTIVITIES Equipment Employee Building Replacement Benefits Replacement Totals $ 906,301 $ 2,030,969 $ - $ 2,937,270 (523,056) - - (523,056) (2,094,481) - (2,094,481) 383,245 (63,512) - 319,733 (416,110) - - (416,110) - 9,576 565 10,141 149,422 - (944,841) (795,419) (266,688) 9,576 (944,276) (1,201,388) 6,516 386 2,092 8,994 123,073 (53,550) (942,184) (872,661) 2,965,915 53,550 942,184 3,961,649 $ 3,088,988 $ - $ - $ 3,088,988 $ 196,765 $ (18,499) $ 141,092 - $ 178,266 141,092 6 1,472 - 1,478 15,767 (74,560) - (58,793) 29,615 28,075 - 57,690 $ 383,245 $ (63,512) $ - $ 319,733 128 A-148 ATTACHMENT A STATISTICAL SECTION 129 A-149 ATTACHMENT A 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 131 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 139 These schedules contain information to help the reader assess the City's most significant local revenue source, property tax. Debt Capacity 143 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 145 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 148 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. 130 A-150 ATTACHMENT A City of Rancho Palos Verdes Net Position by Component Last Ten Fiscal Years (accrual basis of accounting) (amounts expressed in thousands) 131 A-151 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Governmental activities Net investment in capital assets $ 109,991 $ 109,746 $ 109,376 $ 107,867 $ 115,331 $ 115,145 $ 114,488 $ 113,284 $ 114,427 $ 119,450 Restricted 12,417 12,163 1,000 1,000 1,000 1,750 1,750 1,835 11,792 - Unrestricted 16,024 17,823 30,471 31,277 31,855 39,066 67,112 46,687 46,679 53,855 Total governmental activities net position $ 138,432 $ 139,732 $ 140,847 $ 140,144 $ 148,186 $ 155,961 $ 183,351 $ 161,806 $ 172,898 $ 173,305 Business -type activities Net investment in capital assets $ 1,311 $ 2,158 $ 5,599 $ 12,477 $ 12,458 $ 12,753 $ 13,356 $ 18,319 $ 29,557 $ 31,168 Restricted - - - - - - - - - - Unrestricted 2,799 5,258 7,740 2,108 2,825 3,365 3,532 9,727 5,317 5,334 Total business -type activities net position $ 4,110 $ 7,416 $ 13,339 $ 14,585 $ 15,283 $ 16,118 $ 16,888 $ 28,046 $ 34,874 $ 36,502 Primary government Net investment in capital assets $ 111,302 $ 111,904 $ 114,975 $ 120,344 $ 127,789 $ 127,898 $ 127,845 $ 131,603 $ 143,984 $ 150,618 Restricted 12,417 12,163 1,000 1,000 1,000 1,750 1,750 1,835 11,792 - Unrestricted 18,823 23,081 38,211 33,385 34,680 42,431 70,644 56,414 51,996 59,189 Total primary government net position $ 142,542 $ 147,148 $ 154,186 $ 154,729 $ 163,469 $ 172,079 $ 200,238 $ 189,852 $ 207,772 $ 209,807 131 A-151 ATTACHMENT A City of Rancho Palos Verdes Changes in Net Position Last Ten Fiscal Years (accrual basis of accounting) (amounts expressed in thousands) General Revenues and Other Changes in Net Position 132 A-152 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Expenses Governmental activities: Administration $ 4,350 $ 4,953 $ 4,724 $ 6,357 $ 7,824 $ 5,997 $ 5,906 $ 5,534 $ 7,530 $ 7,048 Public safety 3,437 3,751 4,044 4,233 4,242 4,335 4,178 4,348 4,429 4,670 Public works 9,290 9,969 9,026 10,555 13,633 10,389 11,202 10,874 9,377 10,771 Community development 2,060 2,631 2,441 2,697 2,550 2,622 2,432 2,526 1,927 2,072 Parks and recreation 1,659 1,439 1,396 1,605 1,826 1,391 1,490 1,696 1,369 1,669 Non -departmental - - - - 320 - - - 35 191 Interest on long-term debt 270 271 270 268 265 260 109 - - - Total governmental activities expenses 21,066 23,014 21,901 25,715 30,660 24,994 25,318 24,978 24,667 26,421 Business -type activities: Water Quality Flood Protection 47 271 301 437 580 489 560 594 659 1,422 Total primary government expenses $ 21,113 $ 23,285 $ 22,202 $ 26,152 $ 31,240 $ 25,483 $ 25,878 $ 25,572 $ 25,326 $ 27,843 Program Revenues Governmental activities: Charges for services: Administration $ 35 $ 29 $ 538 $ 555 $ 681 $ 654 $ 747 $ 779 $ 120 $ 108 Public safety 224 332 316 267 229 261 194 150 42 43 Public works 37 185 1,002 422 1,356 622 684 543 169 432 Community development 1,319 1,599 1,760 1,643 1,764 1,714 1,644 1,854 1,772 2,058 Parks and recreation 45 51 483 483 896 457 503 476 18 144 Operating grants and contributions 3,894 4,200 3,570 2,963 6,633 3,689 3,628 4,133 2,506 2,274 Capital grants and contributions 17,299 317 1,472 642 7,179 5 139 139 2,912 1,230 Total governmental activities program revenues 22,853 6,713 9,141 6,975 18,738 7,402 7,538 8,074 7,539 6,289 Business -type activities: Charges for services: Water Quality Flood Protection - 1,188 1,222 1,578 1,264 1,312 1,319 1,313 1,361 1,369 Operating grants and contributions - - - - - - 2,137 - - Capital grants and contributions - - - - - - - 6,115 1,213 Total business -type activities program revenues 1,188 1,222 1,578 1,264 1,312 1,319 3,450 7,476 2,582 Total primary government program revenues $ 22,853 $ 7,901 $ 10,363 $ 8,553 $ 20,002 $ 8,714 $ 8,857 $ 11,524 $ 15,015 $ 8,871 Net (expense)/revenue Governmental activities $ 1,787 $ (16,301) $ (12,760) $ (18,740) $ (11,922) $ (17,592) $ (17,780) $ (16,904) $ (17,128) $ (20,132) Business -type activities (47) 917 921 1,141 684 823 759 2,856 6,817 1,159 Total primary government net expense $ 1,740 $ (15,384) $ (11,839) $ (17,599) $ (11,238) $ (16,769) $ (17,022) $ (14,048) $ (10,311) $ (18,973) General Revenues and Other Changes in Net Position 132 A-152 Governmental activities: Taxes Property taxes Transient occupancy tax Sales taxes Franchise taxes Utility user taxes Othertaxes Investment income Other Transfers Extraordinary item Total governmental activities Business -type activities: Investment income User Fees Other Transfers Total business -type activities Total primary government Change in Net Position Governmental activities Business -type activities Total primary government net expense 133 A-153 ATTACHMENT A City of Rancho Palos Verdes Changes in Net Position Last Ten Fiscal Years (accrual basis of accounting) (amounts expressed in thousands) 2009 2010 2011 2007 2013 2014 2015 2006 2008 2012 $ 9,621 $ 10,235 $ 10,935 $ 11,462 $ 11,431 $ 11,854 $ 11,480 $ 11,284 $ 11,991 $ 12,452 31 32 26 85 1,955 2,640 3,349 3,790 4,250 4,812 1,214 1,381 1,056 1,053 1,246 1,548 1,449 1,588 1,642 1,758 1,454 1,512 1,599 1,709 1,711 1,825 1,881 1,907 1,998 2,045 2,191 2,271 2,329 2,267 2,395 2,407 2,333 2,481 2,510 1,973 727 331 794 605 712 814 674 778 1,589 1,564 997 1,615 1,555 631 207 318 604 184 94 122 762 2,101 300 225 307 271 52 929 4,146 3,231 (2,109) (2,017) (4,719) - - - - (8,293) - (458) - - - - 23,348 (19,289) - 14,888 17,461 13,875 18,037 19,964 21,677 45,170 (4,641) 28,220 27,499 48 51 283 105 14 13 11 10 11 10 - 320 - - 2,109 2,017 4,719 - - 8,293 - 458 2,157 2,388 5,002 105 14 13 11 8,303 11 468 $ 17,045 $ 19,849 $ 18,877 $ 18,142 $ 19,978 $ 21,690 $ 45,181 $ 3,662 $ 28,231 $ 27,967 $ 16,675 $ 1,160 $ 1,115 $ (703) $ 8,042 $ 4,085 $ 27,390 $ (21,545) $ 11,092 $ 7,367 2,110 3,305 5,923 1,246 698 836 770 11,159 6,828 1,627 $ 18,785 $ 4,465 $ 7,038 $ 543 $ 8,740 $ 4,921 $ 28,159 $ (10,386) $ 17,920 $ 8,994 133 A-153 ATTACHMENT A City of Rancho Palos Verdes Governmental Activities Tax Revenues By Source Last Ten Fiscal Years (accrual basis of accounting) (amounts expressed in thousands) 1: Most of the Motor Vehicle In Lieu Tax is received as Property Tax beginning in 2006. 134 A-154 Transient Utility Fiscal Property Occupancy Sales Franchise Users Other Year Tax Tax Tax Tax Tax Taxes Total 2006 9,621 31 1,214 1,454 2,191 727 15,238 2007 10,235 32 1,381 1,512 2,271 331 15,762 2008 10,935 26 1,056 1,599 2,329 794 16,739 2009 11,462 85 1,053 1,709 2,267 605 17,181 2010 11,431 1,955 1,246 1,711 2,395 712 19,450 2011 11,854 2,640 1,548 1,825 2,407 814 21,088 2012 11,480 3,349 1,449 1,881 2,333 674 21,166 2013 11,284 3,790 1,588 1,907 2,481 778 21,828 2014 11,991 4,250 1,642 1,998 2,510 1,589 23,980 2015 12,452 4,812 1,758 2,044 1,973 1,564 24,603 1: Most of the Motor Vehicle In Lieu Tax is received as Property Tax beginning in 2006. 134 A-154 ATTACHMENT A City of Rancho Palos Verdes Fund Balances of Governmental Funds Last Five Fiscal Years - Before GASB 54 (modified accrual basis of accounting) (amounts expressed in thousands) 135 A-155 2006 2007 2008 2009 2010 General Fund Reserved $ 6,165 $ 6,586 $ 6,645 $ 6,314 $ 7,166 Designated 876 786 1,278 1,333 1,462 Unreserved, Undesignated 13,649 14,376 12,171 10,440 10,745 Total General Fund $ 20,690 $ 21,748 $ 20,094 $ 18,087 $ 19,373 All other Governmental Funds Reserved $ 3,315 $ 2,396 $ 2,724 $ 3,672 $ 6,361 Designated Special Revenue Funds 744 1,849 1,896 411 85 Capital Projects Funds 2,799 3,158 4,347 6,442 7,494 Permanent Fund 75 65 - - - Debt Service Fund - - - - - Unreserved, Undesignated, reported in: Special Revenue Funds 6,615 6,426 7,494 7,910 6,058 Capital Projects Funds 2,077 1,869 1,908 3,373 1,240 Permanent Fund 329 325 371 362 333 Debt Service Fund (13,741) (14,873) (15,990) (16,823) (17,797) Total all other Governmental Funds $ 2,213 $ 1,215 $ 2,750 $ 5,347 $ 3,774 135 A-155 ATTACHMENT A City of Rancho Palos Verdes Fund Balances of Governmental Funds Last Five Fiscal Years - After GASB 54 (modified accrual basis of accounting) (amounts expressed in thousands) 136 A-156 2011 2012 2013 2014 2015 General Fund Non -Spendable $ 7,515 $ 7,493 $ 138 $ 144 $ 598 Restricted - - - - - Committed - - - - Assigned - - - - - Unassigned 11,385 12,464 14,370 15,474 16,055 Total General Fund $ 18,900 $ 19,957 $ 14,508 $ 15,618 $ 16,653 All other Governmental Funds Non -Spendable Special Revenue Funds $ 4,818 $ 3,066 $ - $ - $ - Debt Service Fund 573 - - - - Capital Projects Funds - - - - - Permanent Fund 1,750 1,750 1,835 1,845 1,855 Restricted Special Revenue Funds 7,952 8,187 7,849 8,445 8,362 Capital Projects Funds 313 - - - - Permanent Fund 319 226 280 1,502 1,492 Committed Special Revenue Funds - - 36 58 55 Capital Projects Funds - - - - - Permanent Fund - - - - - Assigned Special Revenue Funds - - - 794 572 Capital Projects Funds 11,650 15,407 13,084 18,535 21,078 Permanent Fund - - - - - Unassigned Special Revenue Funds (126) (108) (198) (116) (59) Debt Service Fund (19,687) - - - - Capital Projects Funds - - - - - Permanent Fund - - - - - Total all other Governmental Funds $ 7,562 $ 28,528 $ 22,885 $ 31,063 $ 33,355 136 A-156 ATTACHMENT A 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) Expenditures Administration 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Revenues 3,438 3,751 4,044 4,233 4,242 4,335 4,178 4,348 4,492 4,761 Taxes $ 15,238 $ 16,453 $ 17,062 $ 17,573 $ 19,844 $ 21,419 $ 21,867 $ 22,543 $ 23,981 $ 24,603 Licenses and permits 1,440 1,763 1,914 1,755 1,954 1,933 1,806 2,027 1,951 2,515 Fines and forfeitures 171 237 260 214 179 210 159 117 128 135 Use of money and property 7,038 3,480 2,108 1,240 1,601 1,560 1,350 1,383 846 653 Charges for services 49 61 60 163 81 73 149 141 323 427 Donation - - - - - - - 445 - - Revenues from other agencies 15,511 4,118 4,647 3,575 10,180 3,162 3,421 3,395 5,301 3,794 Other Revenues 155 201 1,563 467 4,806 229 259 741 3,068 2,377 Total Revenues 39,602 26,313 27,614 24,987 38,645 28,586 29,011 30,791 35,598 34,504 Expenditures Administration 4,041 4,607 4,411 4,915 5,720 5,503 5,726 5,401 5,792 5,135 Public Safety 3,438 3,751 4,044 4,233 4,242 4,335 4,178 4,348 4,492 4,761 Public Works 5,277 6,864 5,768 7,075 6,896 7,875 7,616 7,240 7,611 8,042 Parks and Recreation 1,593 1,319 1,281 1,354 1,702 1,257 1,479 1,557 1,573 1,819 Community Development 2,361 2,681 2,496 2,723 2,604 2,784 2,484 2,591 2,640 2,870 Non -Departmental - - - - 320 - - - 35 190 Pass Through to other agencies 200 152 169 187 - - - - - - CapitalOutlay 20,202 3,124 3,112 2,459 14,567 2,557 3,155 2,721 4,113 8,697 Debt Service 19,465 2,800 2,764 1,895 10,866 3,180 2,865 2,022 4,820 8,490 Principal 200 248 316 350 419 423 464 - - - Interest 1,150 1,390 1,370 1,101 886 887 498 - - Total Expenditures 38,462 24,136 22,967 24,397 37,356 25,621 25,599 23,857 26,256 31,514 Excess of Revenues over (under) Expenditures 1,140 2,177 4,647 590 1,289 2,965 3,412 6,934 9,342 2,990 Other Financing Sources (uses) Sales of capital assets - - - - - 350 - - - - Transfers in 4,989 4,489 3,158 5,815 4,616 8,944 8,226 7,954 10,424 13,525 Transfers out (7,247) (6,606) (7,924) (5,815) (6,192) (8,944) (7,856) (16,247) (10,479) (13,188) Bond Proceeds Advances to the Redevelopment Agency - Total Other Financing Sources (uses) (2,258) (2,117) (4,766) (1,576) 350 371 (8,293) (55) 337 Extraordinary Gain (Loss) - - - 18,240 (6,743) - Net change in Fund Balances $ (1,118) $ 60 $ (119) $ 590 $ (287) $ 3,315 $ 22,023 $ (8,102) $ 9,287 $ 3,327 Cost of Assets Capitalized 19,465 2,800 2,764 1,895 10,866 3,180 2,865 2,022 4,820 8,490 Debt Services as a percentage of Non -Capital Expenditures 7.1% 7.7% 8.3% 6.4% 4.9% 5.8% 4.2% 0.0% 0.0% 0.0% 137 A-157 ATTACHMENT A City of Rancho Palos Verdes General Governmental Tax Revenues By Source Last Ten Fiscal Years (Modified Accrual Basis of Accounting) (Amounts expressed in thousands) Source: City General Ledger 1: Most of the Motor Vehicle In Lieu Fees are received as property tax beginning in 2006. 138 A-158 Transient Utility Fiscal Property Occupancy Sales Franchise Users Other Year Tax Tax Tax Tax Tax Taxes Total 2006 9,576 31 995 1,299 2,191 1,146 15,238 2007 10,385 32 1,020 1,511 2,272 1,233 16,453 2008 10,898 26 1,077 1,599 2,329 1,133 17,062 2009 11,462 85 1,060 1,709 2,267 990 17,573 2010 11,431 1,955 1,158 1,711 2,395 1,194 19,844 2011 11,854 2,640 1,518 1,825 2,407 1,175 21,419 2012 11,480 3,349 1,452 1,881 2,333 1,372 21,867 2013 11,284 3,790 1,589 1,907 2,481 1,492 22,543 2014 11,991 4,250 1,642 1,998 2,510 1,590 23,981 2015 12,452 4,812 1,758 2,044 1,973 1,564 24,603 Source: City General Ledger 1: Most of the Motor Vehicle In Lieu Fees are received as property tax beginning in 2006. 138 A-158 ATTACHMENT A Source: 2008-2009 & 2006 and prior: data is provided from previously published CAFR's. *Assessed values have been revised from prior CAFR publications to comply with GASB No. 44 standards and on-going consistency in reporting methodologies. (1) Total Direct Tax Rate is represented by TRA 001-224. This percentage is City's shared portion within 1 % of County's general levy. (2) Estimated Actual Value is derived from a series of calculations comparing median assessed values from 1940 to current median sale prices. Based on these calculations a factor was extrapolated and applied to current assessed values. (3) The Factor used to calculate Estimated Actual Value was calculated for 2006-07 and applied to prior years for historical purposes. 139 A-159 City of Rancho Palos Verdes Assessed Value and Estimated Actual Value of Taxable Property Last Ten Fiscal Years (In thousands of dollars) City Estimated Assessed Fiscal Less Taxable Direct Actual Factor of Value as a Year Residential Commercial Industrial Other Unsecured Tax -Exempt Assessed Tax Taxable Taxable Percentage of End Property Property Property Property Property Property Value Rate (1) Value (2) Assessed Value (3) Actual Value 2006 * 7,034,406 88,691 3,086 365,175 21,561 218,916 7,294,003 0.063728 $ 9,707,224 1.33085 75.14% 2007 7,548,956 111,338 3,148 513,876 20,378 226,598 7,971,098 0.063728 $ 10,608,336 1.33085 75.14% 2008 7,919,953 170,149 3,211 453,446 26,546 151,225 8,422,080 0.063728 $ 11,208,525 1.33085 75.14% 2009 8,235,780 270,956 3,275 491,235 46,858 154,969 8,893,135 0.063728 $ 11,835,429 1.33085 75.14% 2010 8,333,042 263,157 3,341 598,539 49,628 236,925 9,010,782 0.063728 $ 9,515,593 1.05602 94.69% 2011 8,362,052 396,195 3,333 570,551 45,258 158,388 9,219,001 0.063728 $ 9,067,313 0.98355 101.67% 2012 8,596,777 390,497 3,358 564,763 70,284 157,307 9,468,372 0.063728 $ 10,683,820 1.12837 88.62% 2013 8,843,139 402,533 3,425 581,160 48,147 174,167 9,704,237 0.063728 $ 11,390,239 1.17374 85.20% 2014 9,190,789 475,510 3,493 660,569 46,962 153,434 10,223,889 0.063728 $ 13,967,877 1.36620 73.20% 2015 9,492,704 486,378 3,509 679,241 45,906 151,709 10,556,029 0.063728 $ 13,571,675 1.28568 77.78% Source: 2008-2009 & 2006 and prior: data is provided from previously published CAFR's. *Assessed values have been revised from prior CAFR publications to comply with GASB No. 44 standards and on-going consistency in reporting methodologies. (1) Total Direct Tax Rate is represented by TRA 001-224. This percentage is City's shared portion within 1 % of County's general levy. (2) Estimated Actual Value is derived from a series of calculations comparing median assessed values from 1940 to current median sale prices. Based on these calculations a factor was extrapolated and applied to current assessed values. (3) The Factor used to calculate Estimated Actual Value was calculated for 2006-07 and applied to prior years for historical purposes. 139 A-159 CITY DIRECT RATE All other direct rates: LA COUNTY GENERAL LA COUNTY ACCUM CAP OUTLAY CONSOL. FIRE PRO.DIST OF LA CO. LA CO. FIRE-FFW LA CO.FL.CON.DR.IMP. DIST. MAI NT. LA CO FLOOD CONTROL MAINT PALOS VERDES LIBRARY DIST MAINT LA CO WEST VECTOR CONTROL DIST. CO SANITATION DIST NO 5 OPERAT WTR REPLENISHMENT DIST OF SO CAL ERAF EDUCATIONAL AUG FD IMPOUND COUNTY SCHOOL SERVICES CHILDREN'S INSTIL TUITION FUND LA CITY COMM COLLEGE DIST LA COMM COLL CHILDREN'S CTR FD PALOS VERDES PENINSULA USD CO.SCH.SERV.FD-LOS ANGELES DEV.CTR.HDCPD MINOR -LA UNIF. TOTAL ATTACHMENT A Debt Service Rates City of Rancho Palos Verdes COUNTY 0.000000 Property Tax Rates - Direct and Overlapping Governments 0.000000 0.000000 0.000000 0.000000 0.000000 PALOS VERDES PEN USD 0.019760 Last Ten Fiscal Years 0.022493 0.022511 0.024102 0.023109 0.023289 COMMNTY COLLEGE 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12 2012-13 2013-14 2014-15 0.063728 0.006618 0.063728 0.063728 0.063728 0.063728 0.063728 0.063728 0.063728 0.063728 0.063728 0.441223 0.000000 0.441223 0.441223 0.441223 0.441223 0.441223 0.441223 0.441223 0.441223 0.441223 0.000110 0.003500 0.000110 0.000110 0.000110 0.000110 0.000110 0.000110 0.000110 0.000110 0.000110 0.169715 0.169715 0.169715 0.169715 0.169715 0.169715 0.169715 0.169715 0.169715 0.169715 0.006910 0.006910 0.006910 0.006910 0.006910 0.006910 0.006910 0.006910 0.006910 0.006910 0.002597 0.002597 0.002597 0.002597 0.002597 0.002597 0.002597 0.002597 0.002597 0.002597 0.014699 0.014699 0.014699 0.014699 0.014699 0.014699 0.014699 0.014699 0.014699 0.014699 0.043470 0.043470 0.043470 0.043470 0.043470 0.043470 0.043470 0.043470 0.043470 0.043470 0.000319 0.000319 0.000319 0.000319 0.000319 0.000319 0.000319 0.000319 0.000319 0.000319 0.017499 0.017499 0.017499 0.017499 0.017499 0.017499 0.017499 0.017499 0.017499 0.017499 0.000181 0.000181 0.000181 0.000181 0.000181 0.000181 0.000181 0.000181 0.000181 0.000181 0.000000 0.000000 0.000000 0.000000 0.000000 0.000000 0.000000 0.000000 0.000000 0.000000 0.000000 0.000000 0.000000 0.000000 0.000000 0.000000 0.000000 0.000000 0.000000 0.000000 0.001369 0.001369 0.001369 0.001369 0.001369 0.001369 0.001369 0.001369 0.001369 0.001369 0.002717 0.002717 0.002717 0.002717 0.002717 0.002717 0.002717 0.002717 0.002717 0.002717 0.029214 0.029214 0.029214 0.029214 0.029214 0.029214 0.029214 0.029214 0.029214 0.029214 0.000302 0.000302 0.000302 0.000302 0.000302 0.000302 0.000302 0.000302 0.000302 0.000302 0.196986 0.196986 0.196986 0.196986 0.196986 0.196986 0.196986 0.196986 0.196986 0.196986 0.008085 0.008085 0.008085 0.008085 0.008085 0.008085 0.008085 0.008085 0.008085 0.008085 0.000876 0.000876 0.000876 0.000876 0.000876 0.000876 0.000876 0.000876 0.000876 0.000876 1.000000 1.000000 1.000000 1.000000 1.000000 1.000000 1.000000 1.000000 1.000000 1.000000 Debt Service Rates COUNTY 0.000000 0.000000 0.000000 0.000000 0.000000 0.000000 0.000000 0.000000 PALOS VERDES PEN USD 0.019760 0.020177 0.021642 0.022493 0.022511 0.024102 0.023109 0.023289 COMMNTY COLLEGE 0.008794 0.022115 0.023112 0.040310 0.035296 0.048750 0.044541 0.040174 PALOS VERDES LIB 0.006854 0.006801 0.006618 0.006719 0.006359 0.006441 0.006118 0.005854 FLOOD CONTROL 0.000000 0.000000 0.000000 0.000000 0.000000 0.000000 0.000000 0.000000 METRO WATER DIST 0.004500 0.004300 0.004300 0.003700 0.003700 0.003500 0.003500 0.003500 TOTAL 0.039908 0.053393 0.055672 0.073222 0.067866 0.082793 0.077268 0.072817 TOTAL TAX RATE 1.039908 1.053393 1.055672 1.073222 1.067866 1.082793 1.077268 1.072817 140 A-160 Taxpayer Long Point Dev Llc Ppc Villas Rpv Llc P V Victoria Apts Llc Terraces Subsidiary Llc Vhps Lic Cpt Vista Catalina Llc Western Riviera Investors Golden Cove Llc Episcopal Communities Services Belmont Village Rpv Lp Terranea Resort Spa Taylor Morrison Of California Johnson Eric C Tridiamond Llc American Golf, Inc Vanderlip Investment Co California Water Service Cc Victoria Apts Thornecrest Llc Palos Verdes Terrace Ltd. Bruning Fred W Aa Homes Llc Amdan Investment Llc Lessee Wang Lisa 500 Silver Spur Rd Llc Vh Property Corp Vrpv Llc Top Terraces Inc Makallon Rpv Associates Llc California Water Service Cc Braun William Wil Gal Labarba James G Co Tr Kim Goon Gtr Foster Robert D & Gina D Chung Paul Y Briles Richard & Keanna Bradford Edward T & Paullee G Knollbrook Ltd Ganezer Max & Florence Hoffman John C & Paula J ATTACHMENT A City of Rancho Palos Verdes Principal Property Tax Payers Last Fiscal Year and Nine Years Ago Total Top 25 Taxpayers $ 947,607,163 Total Taxable Value $ 10,556,029,792 Source: Los Angeles County Assessor data, MuniServices, LLC 141 8.98% 100.00% 2004-05 Percentage of Taxable Total City Taxable Value ($) Rank Value (%) 7,048,000 13 0.10% 16,536,591 6 0.23% 26,333,873 4 0.36% 9,467,560 2013-14 0.13% 19,209,569 5 Percentage of Taxable 3 Total City Taxable Value ($) Rank Value (%) 446,873,738 1 4.23% 66,980,461 2 0.63% 49,176,179 3 0.47% 37,011,234 4 0.35% 35,924,549 5 0.34% 35,846,649 6 0.34% 30,943,269 7 0.29% 28,577,218 8 0.27% 27,693,171 9 0.26% 24,108,959 10 0.23% 21,451,877 11 0.20% 18,300,000 12 0.17% 16,659,277 13 0.16% 14,016,929 14 0.13% 12,312,646 15 0.12% 10,662,642 16 0.10% 9,965,997 17 0.09% 8,173,890 18 0.08% 8,161,887 19 0.08% 8,010,903 20 0.08% 7,607,883 21 0.07% 7,595,283 22 0.07% 7,500,548 23 0.07% 7,326,109 24 0.07% 6,725,865 25 0.06% Total Top 25 Taxpayers $ 947,607,163 Total Taxable Value $ 10,556,029,792 Source: Los Angeles County Assessor data, MuniServices, LLC 141 8.98% 100.00% 2004-05 Percentage of Taxable Total City Taxable Value ($) Rank Value (%) 7,048,000 13 0.10% 16,536,591 6 0.23% 26,333,873 4 0.36% 9,467,560 10 0.13% 19,209,569 5 0.26% 43,253,279 3 0.59% 7,043,098 14 0.10% - 0.00% 0.00% 0.00% 0.00% - 0.00% 14,246,000 7 0.19% - 0.00% - 0.00% 7,190,667 12 0.10% - 0.00% - 0.00% 59,098,339 1 0.81% 52,141,966 2 0.71% 13,188,451 8 0.18% 11,855,141 9 0.16% 7,502,539 11 0.10% 6,090,000 15 0.08% 5,914,980 16 0.08% 5,637,056 17 0.08% 5,125, 872 18 0.07% 5,109,156 19 0.07% 5,019,742 20 0.07% 4,961,882 21 0.07% 4,808,334 22 0.07% 4,764,097 23 0.07% 4,751,571 24 0.06% 4,727,698 25 0.06% $ 351,025,461 4.80% 100.00% 7,315,721,986 A-161 Fiscal Year 2007 2008 2009 2010* 2011* 2012 2013 2014 2015 Total Tax Levyfor Fiscal Year 5,078 5,351 6,116 5,447 5,597 5,777 5,951 6,287 6,487 ATTACHMENT A City of Rancho Palos Verdes Property Tax Levies and Collections Last Nine Fiscal Years (amounts expressed in thousands) Collected within the Fiscal Year of the Levy Source: County Assessor Data and City General Ledger * Includes 1 % secured apportionment only Collections in Subsequent Years 10 10 8 8 9 9 7 9 0 Total Collections to Date Amount 4,809 5,325 5,742 4,925 5,471 5,665 5,851 6,202 6,396 Percentage of Levy 94.70% 99.52% 93.88% 90.42% 97.74% 98.06% 98.32% 98.64% 98.60% 142 A-162 Percentage Amount of Levy 4,799 94.51% 5,316 99.35% 5,734 93.75% 4,917 90.27% 5,462 97.59% 5,656 97.91% 5,844 98.20% 6,193 98.50% 6,396 98.60% Source: County Assessor Data and City General Ledger * Includes 1 % secured apportionment only Collections in Subsequent Years 10 10 8 8 9 9 7 9 0 Total Collections to Date Amount 4,809 5,325 5,742 4,925 5,471 5,665 5,851 6,202 6,396 Percentage of Levy 94.70% 99.52% 93.88% 90.42% 97.74% 98.06% 98.32% 98.64% 98.60% 142 A-162 ATTACHMENT A City of Rancho Palos Verdes Direct and Overlapping Governmental Activities Debt Current Year CITY OF RANCHO PALOS VERDES 2014-15 Assessed Valuation: $10,752,173,045 TOTAL DIRECT DEBT TOTAL GROSS OVERLAPPING DEBT TOTAL NET OVERLAPPING DEBT GROSS COMBINED TOTAL DEBT NET COMBINED TOTAL DEBT $0 $141,395,347 $141,322,197 $141,395,347 (2) $141,322,197 (1) The percentage of overlapping debt applicable to the city is estimated using taxable assessed property value. Applicable percentages were estimated by determining the portion of the overlapping district's assessed value that is within the boundaries of the city divided by the district's total taxable assessed value. (2) Excludes tax and revenue anticipation notes, revenue, mortgage revenue and non -bonded capital lease obligations. Ratios to 2014-15 Assessed Valuation: Direct Debt 0.00% Total Direct and Overlapping Tax and Assessment Debt 1.12% Gross Combined Total Debt 1.32% Net Combined Total Debt 1.31% Source: 2014-15 California Municipal Statistical Co. 143 A-163 Total Debt City's Share of DIRECT AND OVERLAPPING TAX AND ASSESSMENT DEBT: 6/30/2015 % Applicable (1) Debt 6/30/15 Los Angeles County Flood Control District $15,105,000 0.92% $138,211 Metropolitan Water District 110,420,000 0.464 512,349 Los Angeles Community College District 3,882,265,000 1.629 63,242,097 Los Angeles Unified School District 10,296,665,000 0.19 19,563,664 Palos Verdes Unified School District 73,113,825 47.562 34,774,397 City of Rancho Palos Verdes 0 100 0 Palos Verdes Library District 2,420,000 50.038 1,210,920 Los Angeles County Regional Park and Open Space Assessment District 82,880,000 0.895 741,776 TOTAL DIRECT AND OVERLAPPING TAX AND ASSESSMENT DEBT $120,183,414 OVERLAPPING GENERAL FUND DEBT: Los Angeles County General Fund Obligations $1,885,330,518 0.895% $16,873,708 Los Angeles County Superintendent of Schools Certificates of Participation 8,719,113 0.895 78,036 Los Angeles County Sanitation District No. 5 Authority 31,643,711 10.881 3,443,152 Los Angeles County South Bay Cities Sanitation District Authority 5,391,433 4.329 233,395 Los Angeles Unified School District Certificates of Participation 307,180,000 0.19 583,642 TOTAL GROSS OVERLAPPING GENERAL FUND DEBT $21,211,933 Less: Los Angeles County General Fund Obligations supported by landfill revenues 40,677 Los Angeles Unified School District QZABs supported by investment fund 32,473 TOTAL NET OVERLAPPING GENERAL FUND DEBT $21,138,783 TOTAL DIRECT DEBT TOTAL GROSS OVERLAPPING DEBT TOTAL NET OVERLAPPING DEBT GROSS COMBINED TOTAL DEBT NET COMBINED TOTAL DEBT $0 $141,395,347 $141,322,197 $141,395,347 (2) $141,322,197 (1) The percentage of overlapping debt applicable to the city is estimated using taxable assessed property value. Applicable percentages were estimated by determining the portion of the overlapping district's assessed value that is within the boundaries of the city divided by the district's total taxable assessed value. (2) Excludes tax and revenue anticipation notes, revenue, mortgage revenue and non -bonded capital lease obligations. Ratios to 2014-15 Assessed Valuation: Direct Debt 0.00% Total Direct and Overlapping Tax and Assessment Debt 1.12% Gross Combined Total Debt 1.32% Net Combined Total Debt 1.31% Source: 2014-15 California Municipal Statistical Co. 143 A-163 ATTACHMENT A City of Rancho Palos Verdes Legal Debt Margin Information Last Ten Fiscal Years (Amounts expressed in thousands) Fiscal Year Total Taxable Value (see page 127) $ 10,556,029 Debt Limit (15% of total taxable value) 1,583,404 Debt applicable to limit - Legal Debt Margin $ 1,583,404 144 A-164 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Debt Limit $ 1,105,647 $ 1,195,665 $ 1,274,916 $ 1,345,594 $ 1,351,617 $ 1,382,850 $ 1,420,256 $ 1,455,636 $ 1,533,583 $ 1,583,404 Total Net Debt applicable to limit - - - - - - - - - - Legal Debt Margin $ 1,105,647 $ 1,195,665 $ 1,274,916 $ 1,345,594 $ 1,351,617 $ 1,382,850 $ 1,420,256 $ 1,455,636 $ 1,533,583 $ 1,583,404 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 127) $ 10,556,029 Debt Limit (15% of total taxable value) 1,583,404 Debt applicable to limit - Legal Debt Margin $ 1,583,404 144 A-164 Fiscal Per Capita Year Population (1) 2005-06 42,991 2006-07 43,092 2007-08 42,964 2008-09 42,720 2009-10 42,642 2010-11 41,766 2011-12 41,897 2012-13 42,114 2013-14 42,358 2014-15 42,564 ATTACHMENT A City of Rancho Palos Verdes Demographic and Economic Statistics Last Ten Fiscal Years Source: MuniServices, LLC The California Department of Finance demographics estimates now incorporate 2010 Census counts as the benchmark. 1.) Population Projections are provided by the California Department of Finance Projections. 2.) Income Data is provided by the U.S. Census Bureau, 2010 American Community Survey. 3.) Unemployment Data is provided by the EDD's Bureau of Labor Statistics Department. -Student Enrollment reflects the total number of students enrolled in the Palos Verdes Unified School District. Other school districts within the City are not included. City Unemployment Rate (%) (3) 1.6% 1.7% 2.5% 2.5% 4.0% 4.1% 3.8% 3.7% 2.5% 3.4% County Population (1) 10,163,097 10,233,263 10,275,914 10,301,658 10,355,053 9,858,989 9,884,632 9,958,091 10, 041, 797 10,136,559 City Population (% of County) 145 A-165 0.42% 0.42% 0.42% 0.41% 0.41% 0.42% 0.42% 0.42% 0.42% 0.42% Per Capita ""Public County Personal Personal Median School Unemployment Income (2) Income (2) Age Enrollment Rate (%) (3) 1,990,225,000 46,294 43.4 12,052 4.7% 2,411,687,000 55,966 43.4 12,030 4.9% 2,549,698,580 59,345 44.4 11,976 7.2% 2,262,493,920 52,961 43.4 12,033 7.5% 2,250,346,266 52,773 44.9 11,900 11.6% 2,425,936,344 58,084 44.3 11,928 11.9% 2,561,016,971 61,127 47.6 11,840 11.1% 2,618,143,152 62,168 47.8 11,873 11.0% 2,564,205,491 60,537 47.6 11,700 7.6% 2,593,892,724 60,941 48.9 11,632 7.1% Source: MuniServices, LLC The California Department of Finance demographics estimates now incorporate 2010 Census counts as the benchmark. 1.) Population Projections are provided by the California Department of Finance Projections. 2.) Income Data is provided by the U.S. Census Bureau, 2010 American Community Survey. 3.) Unemployment Data is provided by the EDD's Bureau of Labor Statistics Department. -Student Enrollment reflects the total number of students enrolled in the Palos Verdes Unified School District. Other school districts within the City are not included. City Unemployment Rate (%) (3) 1.6% 1.7% 2.5% 2.5% 4.0% 4.1% 3.8% 3.7% 2.5% 3.4% County Population (1) 10,163,097 10,233,263 10,275,914 10,301,658 10,355,053 9,858,989 9,884,632 9,958,091 10, 041, 797 10,136,559 City Population (% of County) 145 A-165 0.42% 0.42% 0.42% 0.41% 0.41% 0.42% 0.42% 0.42% 0.42% 0.42% ATTACHMENT A City of Rancho Palos Verdes Principal Sales Tax Producers Last Fiscal Year and Nine Years Ago 2014-15 2005-06 Taxpayer Business Type Taxpayer Business Type 7 -Eleven Food Stores Food Markets Admiral Risty Restaurant Restaurants Admiral Risty Restaurant Restaurants America's Tire Auto Parts/Repair America's Tire Auto Parts/Repair California Do It Center Bldg.Matls-Retail Asaka Japanese Cuisine Restaurants Carl's Jr. Restaurants Restaurants Audio Visual Services Group Light Industry Centinela Feed & Pet Supplies Miscellaneous Retail Avenue Italy Restaurants Chevron Service Stations Service Stations Carl's Jr. Restaurants Restaurants Coco's Restaurants Restaurants Centinela Feed & Pet Supplies Miscellaneous Retail EI Pollo Loco Restaurants Chevron Service Stations Service Stations Fedex Office Miscellaneous Retail Coco'S Restaurants Restaurants Good Night Mattress Furniture/Appliance EI Polio Loco Restaurants Green Hills Memorial Park Miscellaneous Other Good Night Mattress Furniture/Appliance Ihop Restaurants Restaurants Green Hills Memorial Park Miscellaneous Other Jack In The Box Restaurants Restaurants Ihop Restaurants Restaurants Los Verdes Country Club Restaurants Jack In The Box Restaurants Restaurants Marie Callender's Restaurant Restaurants Los Verdes Country Club Restaurants Mobil Service Stations Service Stations Marie Callender's Restaurant Restaurants Seaside Discount Cigarettes Miscellaneous Retail Marshall's Stores Apparel Stores O'Reilly Auto Parts Auto Parts/Repair Mobil Service Stations Service Stations Ralph's Grocery Company Food Markets O'Reilly Auto Parts Auto Parts/Repair Rolling Hills Plastics Light Industry Ralph's Grocery Company Food Markets Smart & Final Food Markets Smart & Final Food Markets The Brixey Corporation Office Equipment Terranea Resort Restaurants Trader Joe's Food Markets Trader Joe's Food Markets Trump National Golf Club Miscellaneous Retail Trump National Golf Club Miscellaneous Retail Waterfront Equipment Tech Heavy Industry Source: SBOE data, MuniServices, LLCTop Sales Tax Producers listed in alphabetical order. 146 A-166 ATTACHMENT A City of Rancho Palos Verdes Principal Employers Current Year and Three Years Ago Source: MuniServices, LLC Results based on direct correspondence with city's local businesses (1) Includes full time and part time employees. 147 A-167 2015 2012 Percentage Percentage of Total City of Total City Employer Employees Rank Employment Employees Rank Employment Palos Verdes Peninsula Unified School District 1,421 1 7.36% 1,970 1 9.43% Terranea Resort Hotel* 873 2 4.52% 730 2 3.49% Marymount College 270 3 1.40% 220 4 1.05% Trump National Golf Club* 190 4 0.98% 260 3 1.24% Belmont Corp Ltd ( Belmont Village of Rancho) 139 5 0.72% 111 7 0.53% Canterbury 115 6 0.60% 115 6 0.55% Trader Joe's 96 7 0.50% 88 8 0.42% Ralphs Store #720 95 8 0.49% 83 9 0.40% Green Hills Memorial Park 85 9 0.44% 80 10 0.38% American Golf Corp ( Los Verdes Golf Course) 70 10 0.36% Keller Williams Realty 163 5 0.78% Subtotal of Principal Employers 3,354 17.38% 3,820 18.28% Total City Employment 19,300 20,900 Source: MuniServices, LLC Results based on direct correspondence with city's local businesses (1) Includes full time and part time employees. 147 A-167 ATTACHMENT A City of Rancho Palos Verdes Full-time Equivalent City Government Employees by Function Last Ten Fiscal Years Source: City Budget documents and Payroll records 2012 2006 2007 2008 2009 2010 2011 Function 22 68.5 69 76 General Government 47 50 55 58 53 54 Recreation Part -Time 10 10 10 11 16.5 18 Total 57 60 65 69 69.5 72 Source: City Budget documents and Payroll records 2012 2013 2014 52 53 54 16.5 16 22 68.5 69 76 60 25 85 148 A-168 ATTACHMENT A City of Rancho Palos Verdes Operating Indicators by Function Last Ten Fiscal Years 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Function Administration Employee Resignations 4 4 8 4 9 5 8 7 14 10 Workers Compensation Claims 4 2 4 2 5 3 3 3 1 3 Liability Claims 31 14 16 13 13 14 11 14 9 11 Budget Adjustments 48 32 26 18 21 17 11 24 15 15 Business Licenses Issued 1,801 1,837 1,709 1,819 1,629 1,891 1,294 1,868 1,997 2,134 Web Site Page Views (1) 1.3 mil 1.6 mil 701,004 3.8 mil 2.9 mil 2.8mil 3.Omil 3.1mil 3.3mil 426,772 Public Safety Part I Crime Rates (per 10,000 population) 120 139 123 102 110 143 131 149 107 134 Public Works Solid Waste Diversion Rates (2) 55% 56% 4.71bs/person/day 4.1lbs/person/day 4.2lbs/person/day 4.2lbs/person/day 4.2lbs/person/day 2.87lbs/person/day 2.84lbs/person/day 3.151bs/person/day Pavement Rating 82 82 DNA 85 85 85 85 84 82 82 Parks and Recreation Park Events 937 770 692 825 690 580 582 765 631 639 Class Meetings at Parks 2,856 2,647 2,772 2,708 2,398 2,313 1,587 1,202 1,233 1,400 Docent Led Nature Hikes 62 98 91 105 103 105 104 121 109 103 Community Development Building Permits Processed 1,382 1,244 1,692 1,404 1,243 1,432 1,221 1,403 1,492 1,558 Plan Checks 163 164 247 226 154 161 161 268 264 255 Municipal Code Violations Closed 159 162 216 339 138 371 321 312 392 358 Source: City Departments DNA: Data Not Available (1): The City launched a new website and with it, the methodology used to count total page views was modified. (2): A new system of measuring AB939 compliance was implemented in 2008 with the passage of SB1016. This changed the previous diversion calculation method to the new disposal -based indicator - the per capita disposal rate. The per capita disposal target is based on the average of 50 percent of generation in 2003 through 2006, expressed in terms of per capital disposal. 149 A-169 ATTACHMENT A City of Rancho Palos Verdes Capital Asset Statistics by Function Last Ten Fiscal Years 150 A-170 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Function Administration Computer Workstations 81 85 91 92 101 92 88 93 98 114 Public Safety (1) Public Works Street Miles 143 143 143 143 143 143 144 141 141 149 Traffic Signals 15 15 16 16 16 16 18 15 15 15 Parks and Recreation Parks 16 16 16 16 15 15 15 15 16 16 Community Development Vehicles Used for Inspections 3 3 5 5 5 5 5 5 4 4 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. 150 A-170 ATTACHMENT B Vavrinek, Trine, Day & Co., LLP ur,r.4.1 Certified Public Accountants To Honorable City Council of the City of Rancho Palos Verdes Rancho Palos Verdes, California We have audited the financial statements of the governmental activities, the business -type activities, each major fund, and the aggregate remaining fund information of the City of Rancho Palos Verdes, California (City) for the year ended June 30, 2015 and have issued our reports dated December 21, 2015. Professional standards require that we provide you with information about our responsibilities under generally accepted auditing standards, Government Auditing Standards, as well as certain information related to the planned scope and timing of our audit. We have communicated such information in our letter to you dated June 29, 2015. Professional standards also require that we communicate to you the following information related to our audit. Significant Audit Findings Qualitative Aspects of Accounting Practices Management is responsible for the selection and use of appropriate accounting policies. The significant accounting policies used by the City are described in Note 1 to the financial statements. As described in Note and 1 to the financial statements, the City adopted Governmental Accounting Standards Board (GASB) Statements No. 68, Financial Reporting for Pensions - an amendment of GASB Statement No. 27, and No. 71, Pension Transition for Contributions Made Subsequent to the Measurement Date - an amendment of GASB Statement No. 68, effective July 1, 2014. Accordingly, the cumulative effect of the accounting change as of the beginning of the year is reported in Note 15 of the financial statements. We noted no transactions entered into by the City during the year for which there is a lack of authoritative guidance or consensus. All significant transactions have been recognized in the financial statements in the proper period. Accounting estimates are an integral part of the financial statements prepared by management and are based on management's knowledge and experience about past and current events and assumptions about future events. Certain accounting estimates are particularly sensitive because of their significance to the financial statements and because of the possibility that future events affecting them may differ significantly from those expected. The most sensitive estimates affecting the City's financial statements were: Management's estimate for the allowance related to the receivable from the Successor Agency, the net pension liability and related deferred inflows/outflows of resources. We evaluated the key factors and assumptions used to develop these estimates in determining that they appeared reasonable in relation to the financial statements taken as whole. Certain financial statement disclosures are particularly sensitive because of their significance to the financial statement users. The most sensitive disclosure affecting the financial statements were: The disclosure of the City's pension plan in Note 8 to the financial statements describes the City's retirement plan and the related deferred outflows/inflows of resources and the net pension liability required by the City's implementation of GASB Statements No. 68 and No. 71 during the period. The disclosure on the restatement of the beginning net position in Note 15 describes the impact to the beginning balances for the implementation of GASB Statements No. 68 and No. 71. 10681 Foothill Blvd., Suite 300 Rancho Cucamonga, CA 91730 Tel: 909.466.4410 www.vtdcpa.com Fax: 909.466.4431 B-1 ATTACHMENT B The financial statement disclosures are neutral, consistent, and clear. Difficulties Encountered in Performing the Audit We encountered no significant difficulties in dealing with management in performing and completing our audit. Corrected Misstatements Professional standards require us to accumulate all known and likely misstatements identified during the audit, other than those that are clearly trivial, and communicate them to the appropriate level of management. The attached schedule summarizes corrected misstatements to the financial statements. Management has corrected all such misstatements. Disagreements with Management For purposes of this letter, a disagreement with management is a financial accounting, reporting, or auditing matter, whether or not resolved to our satisfaction, that could be significant to the financial statements or the auditor's report. We are pleased to report that no such disagreements arose during the course of our audit. Management Representations We have requested certain representations from management that are included in the management representation letter dated December 21, 2015. Management Consultations with Other Independent Accountants In some cases, management may decide to consult with other accountants about auditing and accounting matters, similar to obtaining a "second opinion" on certain situations. If a consultation involves application of an accounting principle to the City's financial statements or a determination of the type of auditor's opinion that may be expressed on those statements, our professional standards require the consulting accountant to check with us to determine that the consultant has all the relevant facts. To our knowledge, there were no such consultations with other accountants. Other Audit Findings or Issues We generally discuss a variety of matters, including the application of accounting principles and auditing standards, with management each year prior to retention as the City's auditors. However, these discussions occurred in the normal course of our professional relationship and our responses were not a condition to our retention. Other Matters We applied certain limited procedures to management's discussion and analysis, the schedule of the proportionate share of the net pension liability, and the schedule of contributions, which is required supplementary information (RSI) that supplements the basic financial statements. Our procedures consisted of inquiries of management regarding the methods of preparing the information and comparing the information for consistency with management's responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We did not audit the RSI and do not express an opinion or provide any assurance on the RSI. 2 B-2 ATTACHMENT B We were engaged to report on the combing and individual fund statements and schedules, which accompany the financial statements but are not RSI. With respect to this supplementary information, we made certain inquiries of management and evaluated the form, content, and methods of preparing the information to determine that the information complies with accounting principles generally accepted in the United States of America, the method of preparing it has not changed from the prior period, and the information is appropriate and complete in relation to our audit of the financial statements. We compared and reconciled the supplementary information to the underlying accounting records used to prepare the financial statements or to the financial statements themselves. We were not engaged to report on the introductory section and statistical section, which accompany the financial statements but are not RSI. We did not audit or perform other procedures on this other information and we do not express an opinion or provide any assurance on it. Restriction on Use This information is intended solely for the use of the City Council and management of the City and is not intended to be, and should not be, used by anyone other than these specified parties. Rancho Cucamonga, California December 21, 2015 ATTACHMENT B CITY OF RANCHO PALOS VERDES Schedule of Corrected Misstatements For the Fiscal Year Ended June 30, 2015 Income Statement Balance Sheet Number Fund Account/Description I Dr. Cr. Dr. Cr. <l> Capital Improvements Dr. Capital Outlay $ 332,027 Capital Improvements Cr. Accounts Payable and $ 315,426 Accrued Liabilities Capital Improvements Cr. Retentions payable $ 16,601 To record capital outlay as of June 30, 2015. 4 B-4