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CAFR FY 2016-17CITY OF I RANCHO PALOS VERDES C A L I F 0 R N I A s .1, ll� -700-L 17 COMPREHENSIVE ANNUAL FINANCIAL REPORT FISCAL YEAR ENDED `-'s JUNE 303 2016 CITY OF RANCHO PALOS VERDES, CALIFORNIA COMPREHENSIVE ANNUAL FINANCIAL REPORT For the Year Ended June 30, 2016 Prepared By: Finance Department This page is intentionally blank. INTRODUCTORY SECTION This page is intentionally blank. CITY OF RANCHO PALOS VERDES COMPREHENSIVE ANNUAL FINANCIAL REPORT FOR THE YEAR ENDED JUNE 30, 2016 TABLE OF CONTENTS INTRODUCTORY SECTION Tableof Contents....................................................................... i -iii Letter of Transmittal.................................................................... v-xiv Directory of City Officials.............................................................. xv OrganizationChart..................................................................... xvi GFOA Certificate of Achievement for Excellence in Financial Reporting................................................................................. xvii FINANCIAL SECTION Independent Auditors' Report........................................................ 3 Management Discussion and Analysis ............................................ 9 Government -Wide Financial Statements Statement of Net Position........................................................... 21 Statement of Activities............................................................... 22 Fund Financial Statements Governmental Funds BalanceSheet........................................................................ 24 Reconciliation of the Balance Sheet of Governmental Funds to the Statement of Net Position ..................................................... 26 Statement of Revenues, Expenditures, and Changes in Fund Balances.......................................................................... 28 Reconciliation of the Statement of Revenues, Expenditures, and Changes in Fund Balances to the Statement of Activities........... 30 General Fund Statement of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual ................................................. 31 Gas Tax Special Revenue Fund Statement of Revenues, Expenditures, and Change in Fund Balance Budget and Actual ................................................. 33 Proprietary Funds Statement of Net Position.......................................................... 35 Statement of Revenues, Expenses, and Changes in Fund Net Position........................................................................... 36 Statement of Cash Flows........................................................... 37 Fiduciary Funds Statement of Fiduciary Net Position ............................................. 38 Statement of Changes in Fiduciary Net Position ............................. 39 Notes to the Financial Statements ................................................. 43 CITY OF RANCHO PALOS VERDES COMPREHENSIVE ANNUAL FINANCIAL REPORT FOR THE YEAR ENDED JUNE 30, 2016 TABLE OF CONTENTS Required Supplementary Information Schedule of Proportionate Share of the Net Pension Liability ............. 83 Schedule of Contributions..................................................... 84 Supplementary Information..................................................... 87 Non -Major Governmental Funds Combining Balance Sheet ....................................................... 90 Combining Statement of Revenues, Expenditures, and Changes in Fund Balances..................................................................... 98 Schedule of Revenues, Expenditures, and Changes in Fund Balances - Budget and Actual Special Revenue Funds 1972 Act Fund................................................................... 106 EI Prado Fund................................................................... 107 1911 Act Fund................................................................... 108 Beautification Fund............................................................. 109 Waste Reduction Fund ......................................................... 110 Air Quality Management Fund ................................................ 111 Proposition C Fund............................................................. 112 Proposition A Fund............................................................. 113 Public Safety Grants Fund .................................................... 114 MeasureR........................................................................ 115 Measure A Fund................................................................. 116 Abalone Cove Sewer Assessment District ................................ 117 Dr. Allen and Charlotte Ginsburg Cultural Arts Building ................. 118 Donor Restricted Contributions ............................................... 119 JPIA — Portuguese Bend Fund ................................................. 120 Community Development Block Grant .......................................... 121 QuimbyFund.......................................................................... 122 Environmental Excise Tax Fund ................................................. 123 BikewaysFund........................................................................ 124 Capital Projects Funds Low -Moderate Income Housing Capital Projects Fund ..................... 125 City Affordable Housing In -Lieu Capital Projects Fund ..................... 126 Permanent Funds Habitat Restoration Fund........................................................... 127 Subregion One Maintenance Fund .............................................. 128 JPIA —Abalone Cove Fund ........................................................ 129 Capital Improvements Capital Projects Fund .......................... 130 Internal Service Funds Combining Statement of Net Position 132 CITY OF RANCHO PALOS VERDES COMPREHENSIVE ANNUAL FINANCIAL REPORT FOR THE YEAR ENDED JUNE 30, 2016 TABLE OF CONTENTS Combining Statement of Revenues, Expenses, and Changes in Fund NetPosition......................................................................... 133 Combining Statement of Cash Flows ............................................... 134 STATISTICAL SECTION (Unaudited) Financial Trends Net Position by Component........................................................ 138 Changes in Net Position.............................................................. 140 Governmental Activities Tax Revenue By Source ............................. 142 Fund Balances of Governmental Funds — Before GASB 54 ................ 144 Fund Balances of Governmental Funds — After GASB 54 ................... 145 Changes in Fund Balances of Governmental Funds .......................... 146 General Governmental Tax Revenues By Source ............................. 148 Revenue Capacity Assessed Value and Estimated Actual Value of Taxable Property..... 149 Property Tax Rates - Direct and Overlapping Governments ............. 151 Principal Property Tax Payers .................................................... 153 Property Tax Levies and Collections ............................................. 154 Debt Capacity Direct and Overlapping Governmental Activities Debt ........................ 155 Legal Debt Margin Information..................................................... 156 Demographic and Economic Information Demographic and Economic Statistics .......................................... 158 Principal Sales Tax Producers .................................................... 160 Principal Employers.................................................................. 161 Operating Information Full-time Equivalent City Government Employees by Function.............162 Operating Indicators by Function ................................................... 163 Capital Asset Statistics by Function ............................................... 165 This page is intentionally blank. iv U HO PALOS VERDES December 22, 2016 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, 2016, 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 the Independent Auditor's Report and 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. In 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. Administration • Public Safety Action Plan adopted to aggressively reduce burglary crime in RPV. Included RPV leading the peninsula cities to implement expanded Automated License Plate Recognition (ALPR) program. In addition, a joint Surveillance and Apprehension Team (SAT) detective began April 2016. Improved the City's readiness and promoted community awareness of emergency preparedness through the following activities and programs, including: o Conducted the annual Emergency Operation Center Staff Training and Emergency Preparedness Drill at the City's Emergency Operations Center; o Moved forward with the City's Continuity of Operations Plan (COOP) project; and w o Produced Public Service Announcements (PSA) on emergency preparedness topics for broadcast on RPVty o Completed Federal and State mandated Basic Incident Command/Standardized Emergency Management/National Incident Management Systems regional training for Staff in Area G cities. • Continued to pursue the acquisition of tax -defaulted properties for parkland and open space purposes from Los Angeles County. • Produced multiple public safety outreach newsletters, articles, and RPVty pieces to inform residents, including a PSA titled "See Something, Say Something" that won a Telly award. • "Zero Tolerance" campaign for motorcycles and speeders in the Switchback area. • Memorandum of Understanding (MOU) adopted between the City and the Rancho Palos Verdes Employee Association that was budget neutral. • Completed a total of 9.0 full-time and 10.0 part-time personnel recruitments during the fiscal year. • Recruited accomplished executive staff including Deputy City Manager and Community Development Director. • Laserfiche Document Portal installed with virtually all City documents and contracts available and searchable online. • City Council Agenda published on Tuesdays —two days earlier than previous practice. • City Attorney RFP issued and new City Attorney appointed by Council. • IT Service Provider RFP resulting in Prosum providing expertise, capacity, and systems to support City services to residents • GIS System implemented as a repository for land-based City asset information, including a portal with information of interest to the public. • Cityworks Computerized Maintenance Management System was deployed allowing Public Works to better track and report on work orders and maintenance activities. • Broadcast equipment upgrades to modern digital recording and broadcast equipment at Hesse Park and RPVty station. • Created a new performance evaluation program raising the standards for employees and improving the organizational culture. Im • Managed 129 Public Records Act requests, up 90 percent from the previous fiscal year's 68 requests. • Worked with the City Attorney and the Joint Powers Insurance Authority to respond to 54 claims against the city and 15 subpoenas or summons for staff appearance or for the production of records. Community Development • 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. Staff anticipates that the Planning Commission will complete their review and forward the Draft Updated General Plan to the City Council in summer 2017. • The City of Rancho Palos Verdes (RPV), in partnership with the City of Los Angeles, developed a uniform strategy for the Western Avenue corridor between Summerland Ave. and Palos Verdes Drive North. The Western Avenue Corridor Street Enhancement Strategy (the Strategy) was adopted by the City Council on December 15, 2015. The Strategy is intended to harmonize approaches to multi -modal mobility, streetscape design, landscaping, and signage to foster the development of a common set of functional concepts between the City of RPV and LA. The Strategy supplements the City's Western Avenue Traffic Improvement Plan (approved by the City Council in 2007) and provides City Staff and future decision makers across three jurisdictions (RPV, LA and CalTrans) a roadmap for improving the functionality, aesthetics and experience of Western Avenue by bridging the gap between a major thoroughfare and a commercial corridor. • The City of RPV, working with the South Bay Cities Council of Governments (SBCCOG), approved the Energy Efficiency Chapters of the City's Emissions Reduction Action Plan (ERAP), which was adopted by the City Council on November 4, 2015. Approval of these Chapters means that the City voluntarily agrees to reduce communitywide and municipal energy usage to help the State of California meet its goal to reduce GHG emissions by 15% below 2005 levels, as stated in Assembly Bill 32. • On May 17, 2016, the City Council initiated a Code Amendment addressing the operation of short-term rentals, which are typically considered rentals (home -sharing or vacation rental) of a residential property for a period of time less than 30 consecutive days, in the City's residential zoning districts. The City Council and Planning Commission are currently reviewing code language affirming the City's Development Code that prohibits short-term rentals within the City's Single -Family Residential Zoning Districts. • 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 M • 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 Public Works with the construction of the Sunnyside Ridge Trail as identified in the City's Conceptual Trails Plan. Public Works • Completed Phase 1A of the Accessibility Transition Plan Implementation Project which completed ADA improvements at the Ladera Linda Community Center, Ryan Park and PVIC for a total of $97,200. • Completed and submitted, on behalf of the Peninsula Water Management Group, the Draft Enhanced Watershed Management Program to the Los Angeles Regional Water Quality Control Board in accordance with Municipal Separate Storm Sewer System (MS4) permit requirements. • Initiated and completed a 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 FY15-16. Implementation and transition to the new platform was completed and system testing will continue through FY16-17. • Initiated a citywide proactive full-time graffiti abatement program, complete with daily service, a real-time, web -based application for smart phones and tablets and a hotline. • Initiated final design and construction of the Sunnyside Ridge Trail Segment Project which will construct an equestrian and pedestrian trail connection between Sunnyside Ridge Road and Palos Verdes Drive East. The budget for the project is $465,000 of which $300,000 is granted to the City from the County of Los Angeles. • Initiated and completed the Mira Catalina CDBG ADA Access Ramps and Sidewalk Improvement Project which constructed ADA compliant ramps and sidewalks adjacent to Mira Catalina Elementary School, Lucania Drive, Starline Drive and Crest Road. The project was wholly funded by CDBG grants funds in the amount of $91,918. • Initiated and completed construction of the Palos Verdes Drive West CDBG ADA Access and Sidewalk Improvement project which constructed sidewalk to connect the Point Vicente neighborhood to the Golden Cove commercial and retail area. The project also constructed two ADA access ramps and a new bus stop and shelter. The project was wholly funded by CDBG grant funds in the amount of $196,838. • Initiated and completed the Roan Road Storm Drain Rehabilitation project which constructed 140 linear feet of new pipe from a previously rehabilitated section to the outlet into Dodson Canyon. This storm dram rehabilitation project was completed for $94,006. ix • Implemented crossing guard services at Ridgecrest Intermediate School, Silver Spur Elementary School and Dodson Middle School to assist with the safe passage of students during the drop-off and pick-up periods. The costs for crossing guards are shared with the Palos Verdes Peninsula Unified School District. • Initiated construction of the Hawthorne Blvd Beautification Project which replaced the existing juniper -filled median planters with 80 36" -box trees to beautify the arterial corridor. This is the first phase of a multi -phased beautification project. • Initiated construction of the Hawthorne Blvd Traffic Signal Synchronization Project which will synchronize and coordinate 7 signalized intersections along Hawthorne Blvd and connect Hesse Park and Ryan Park to the Civic Center Campus via fiber optic cabling. • Initiated and completed construction of the Grayslake Road Drainage Improvement project which rehabilitated an existing storm drain line located within a City easement adjacent to private property. • Created and adopted a Wireless Telecommunications Ordinance which regulates and standardizes the permit requirements for the installation of wireless facilities placed in the public rights-of-way. • Create and adopted a Special Events Ordinance which regulates and establishes a permit process for managing community events which could compromise public health and safety. • Initiated construction of the Portuguese Bend Landslide Dewatering Wells Installation project which will install 9 dewatering wells at strategic locations that have the highest probability of intercepting ground water flows before they enter the active landslide. • Initiated and completed construction of the 2015 Storm Drain Lining project which lined 5,250 linear feet of existing storm drain pipes at various locations throughout the City. • Completed 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 construction of the FY 14-15 Residential Street Rehabilitation Project, Phase 1 (concrete repairs) which will repair broken asphalt and concrete on the local roadways in Area 2. x • Initiated construction of the FY15-16 Sidewalk Repair Program, which will replace approximately 20,000 square feet of sidewalk, curb and gutter that was uplifted and damaged primarily by the roots of overgrown street trees. Recreation and Recreation • Entered into an arrangement with the LA County Sheriff's Department to double the enforcement presence in the Palos Verdes Nature Preserve. • Increased staff presence and park hours at a number of facilities including Ladera Linda Park, Robert Ryan Park, and Abalone Cove Shoreline Park in order to both improve services to park visitors and improve the care and maintenance of City facilities. • Lower Hesse Park Improvement project approved and funded by City Council. $300,000 in grant funds received from Los Angeles County to partially fund project. • Implemented an Open Space Management (OSM) Division to better manage the City's 1,400 -acre Palos Verdes Nature Preserve. OSM Staff patrol the Preserve approximately 80 hours each week and perform maintenance. To date, staff has made 15,751 public contacts, completed numerous maintenance activities, and collected valuable statistic to assist the Department with open space management activities. • 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. • 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 that saw a 48% increase in donations over 2015, 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. • Partnered with the Palos Verdes Library District's Young Readers Department to offer a total of 28 Story Time programs at three City park sites. • Participated in annual RHE/PVP Chamber Earth Day Fair, promoting environmental education, healthy planet activities, and providing outreach for Department programs. Participated in annual RHE/PVP Chamber Street Fair and Music Festival, promoting local businesses and providing outreach for Department programs. X1 • Initiated Healthy RPV program to improve the health and well-being of residents through the promotion of healthy eating, education, physical activity. Created webpage with healthy recipes and exercise/sport classes and programs offered at City parks. Coordinated free weekly Yoga in the Park classes for the public, provided six months of free Open Gym opportunities for the public, and partnered with PVPUSD and YMCA to provide summer swim program. 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 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 $0.8 million favorable budget variance in the General fund for the fiscal year ended June 30, 2016. Favorable revenue variances of $1.0 million for taxes were added to a $1.7 million favorable expenditure variance minus $1.9 million of transfers out that spread across 30 different programs. Many of the favorable expenditure variances were permanent savings resulting from conservative budget practices, savings from the vacant positions, and the continued careful management of resources during FY 2015-16. xii Significant Financial Events There were no changes to financial policies that resulted in a significant impact on the June 30, 2016 financial statements. 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 $750,000 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 the Uniform Guidance. For the year ended June 30, 2016, $348,636 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, 2015. This was the 23rd 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 The preparation of this report would have not been possible without the dedication of the entire staff of the Finance Department. I would also like to acknowledge the assistance of the City's auditors, Vavrinek, Trine, Day & Co., LLP and the contributions of all the departments by providing data necessary to prepare the City's FY 2015-16 CAFR. In closing, I want to thank the City Council for their continued leadership directing the City to achieve a sound fiscal position over the last several years. We look forward to maintaining this success in the future under the leadership of the City Council. Respectfully submitted, Deborah Cullen Director of Finance xiv 12!RANCHO PALOS VERDES COMPREHENSIVE ANNUAL FINANCIAL REPORT FY 2015-2016 CITY OFFICIALS Ken Dyda Mayor Brian Campbell Mayor Pro Tem Susan Brooks Councilwoman Jerry Duhovic Councilman Anthony M. Misetich Councilman CITY STAFF Doug Willmore City Manager Gabriella Yap Deputy City Manager Deborah Cullen Director of Finance Cory Linder Director of Recreation & Parks Ara Mihranian Director of Community Development Michael Throne Director of Public Works xv PLANNING COMMISSION COMMUNITY DEVELOPMENT STORM DRAIN OVERSIGHT COMMITTEE (WQFPP) FINANCE I I PUBLIC WORKS RESIDENTS OF RANCHO PALOS VERDES I CITY COUNCIL I TRAFFIC SAFETY COMMITTEE me] ki7_74it6] 71'!1zm Is] kiL4mX73 EMERGENCY FINANCE ADVISORY PREPAREDNESS COMMITTEE COMMITTEE I CITY MANAGER I RECREATION & PARKS XVI INFORMATION TECHNOLOGY DEPUTY CITY MANAGER INFRASTRUCTURE MANAGEMENT ADVISORY COMMITTEE HUMAN PUBLIC SAFETY RESOURCES 1,0 Government Finance Officers Association Certificate of Achievement for Excellence in Financial Reporting Presented to City of Rancho Palos Verdes California For its Comprehensive Annual Financial Report for the Fiscal Year Ended June 30, 2015 Executive Director/CEO xvii This page is intentionally blank. FINANCIAL SECTION This page is intentionally blank. Ur,r,,4.1 Vaurinek, Trine, Day & Co., LLP Certified Public Accountants M11 1104 ' X17 DION I[IJ -111 Ice] 7 04 03 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, 2016, 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. 10681 Foothill Blvd., Suite 300 Rancho Cucamonga, CA 91730 Tel: 909.466.4410 www,vtdcpa.com Fax: 909.466.4431 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, 2016, 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 gas tax 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. 72, Fair Value Measurement and Application, effective July 1, 2015. 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 9 through 18, the schedule of the proportionate share of the net pension liability, and the schedule of contributions on pages 83 and 84 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 relates 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. 4 Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated December 19, 2016 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. Rancho Cucamonga, California December 19, 2016 This page is intentionally blank. MANAGEMENT'S DISCUSSION & ANALYSIS This page is intentionally blank. CITY OF RANCHO PALOS VERDES MANAGEMENT'S DISCUSSION AND ANALYSIS YEAR ENDED JUNE 30, 2016 MANAGEMENT'S DISCUSSION AND ANALYSIS 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, 2016. 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 v-xiv 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, 2016, by $219.0 million (Net Position). Of this amount, $47.8 million (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 restricted, and is therefore not available to meet the City's obligations. At the fiscal year ended June 30, 2016, the City's Total Net Position increased by $8.6 million. The primary factors for the increase are discussed below. As of June 30, 2016, the City's Governmental Funds reported combined ending Fund Balances of $59.2 million an increase of $9.2 million in comparison with the prior year. The majority of the increase is attributable to the reduction of capital outlay and additional transient occupancy tax transfers accumulated for future capital improvement projects. As of June 30, 2016, unassigned fund balance for the General Fund was $13.7 million or 68% of General Fund expenditures. The $13.3 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 BASIC 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. M CITY OF RANCHO PALOS VERDES MANAGEMENT'S DISCUSSION AND ANALYSIS YEAR ENDED JUNE 30, 2016 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 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 21-23 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 10 CITY OF RANCHO PALOS VERDES MANAGEMENT'S DISCUSSION AND ANALYSIS YEAR ENDED JUNE 30, 2016 the Government -Wide Financial Statements, Governmental Fund Financial Statements focus on near-term inflows and outflows of spendable resources, as well as on balances of spendable resources available at the end of the Fiscal Year. Such information may be useful in evaluating a government's near-term financing requirements. Because the focus of Governmental Funds is narrower than that of the Government -Wide Financial Statements, it is useful to compare the information presented for Governmental Funds with similar information presented for governmental activities in the Government - Wide Financial Statements. By doing so, readers may better understand the long-term impact of the government's near-term financing decisions. The Governmental Balance Sheet and Governmental Fund Statement of Revenues, Expenditures, and Changes in Fund Balances provide a reconciliation to facilitate this comparison between Governmental Funds and governmental activities. The City of Rancho Palos Verdes maintained 27 individual Governmental Funds during the Fiscal Year ended June 30, 2016. 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 Gas Tax 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 24-33 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. 11 CITY OF RANCHO PALOS VERDES MANAGEMENT'S DISCUSSION AND ANALYSIS YEAR ENDED JUNE 30, 2016 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 35-37 of this report. The Proprietary Fund Financial Statements provide separate information for the Enterprise Fund and the Internal Service Funds. The Enterprise Fund is presented as a single major fund of the City, while the Internal Service Funds are combined and presented as a single, aggregated presentation in the Statement. Individual fund data for the Internal Service Funds is provided in the form of combining statements elsewhere in this report. 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 38-39 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 43-79 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 83-134 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 $219.0 million at June 30, 2016. By far, the largest portion of the City's Net Position of $150 million or 69% 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. 12 CITY OF RANCHO PALOS VERDES MANAGEMENT'S DISCUSSION AND ANALYSIS YEAR ENDED JUNE 30, 2016 City of Rancho Palos Verdes Net Position Current and other assets Capital assets Total assets Deferred outflows of resources Long-term liabilities outstanding Other liabilities Total liabilities Deferred inflows of resources Net Investment in capital assets Restricted Unrestricted Total net position Governmental Business -type Activities Activities Total 2016 2015 2016 2015 2016 $ 74,857,766 $ 67,162,047 $ 6,210,234 $ 5,847,529 $ 81,068,000 $ 73,009,576 118,398,503 119,450,510 31,662,640 31,167,848 150,061,143 150,618,358 193,256,269 186,612,557 37,872,874 37,015,377 231,129,143 223,627,934 1,550,506 793,750 1,550,506 793,750 7,678,051 6,067,063 - 7,678,051 6,067,063 - 6,069,199 513,700 6,582,899 7,678,051 12,136,262 513,700 7,678,051 12,649,962 655,926 1,964,715 - 655,926 1,964,715 118,398,503 119,450,510 31,662,640 31,167,848 150,061,143 150,618,358 21,120,703 11,646,676 - - 21,120,703 11,646,676 42,210,124 42,208,144 5,598,163 5,333,829 47,808,287 47,541,973 $ 181,729,330 $ 173,305,330 $ 37,260,803 $ 36,501,677 $ 218,990,133 $ 209,807,007 A portion of the City's Net Position of $21.1 million or 10%, represents resources subject to external restrictions. The remaining balance of Unrestricted Net Position of $47.8 million or 22 % may be used to meet the government's ongoing obligations to its citizens and creditors. Total current and other assets increased by $8.1 million in comparison to the previous year. This is due to the completion of street rehabilitation projects in FY 2014-15 and the continuation of accumulating additional transient occupancy tax to fund future capital improvement projects. Capital assets decreased by $0.5 million from the current year's depreciation expense and other liabilities decreased by $1.5 million due to the decreased activity of capital projects in progress that will continue in FY 2016-17. Governmental Activities Governmental Activities increased the City's Net Position by $7.8 million primarily due to increase of revenues and decreased expenses. 13 CITY OF RANCHO PALOS VERDES MANAGEMENT'S DISCUSSION AND ANALYSIS YEAR ENDED JUNE 30, 2016 City of Rancho Palos Verdes Changes in Net Position Expenses: Governmental Business -type Activities Administration Activities Total 2016 2015 2016 2015 2016 2015 Program revenues: 5,214,553 4,670,441 Public works 9,610,047 Charges for services $ 2,490,951 $ 2,785,005 $ 1,384,897 $ 1,368,570 $ 3,875,848 $ 4,153,575 Operating contributions and grants 2,332,320 2,274,130 - - 2,332,320 2,274,130 Capital contributions and grants 1,110,646 1,230,131 1,212,995 1,110,646 2,443,126 General revenues: Non -departmental 133,783 190,468 - - Property taxes 13,763,845 12,451,632 - 13,763,845 12,451,632 Othertaxes 12,390,945 12,151,475 - 12,390,945 12,151,475 Other 2,821,865 2,895,591 20,662 467,900 2,842,527 3,363,491 Total revenues 34,910,572 33,787,964 1,405,559 3,049,465 36,316,131 36,837,429 Expenses: Administration $ 8,061,904 7,127,433 8,061,904 7,127,433 Public safety 5,214,553 4,670,441 5,214,553 4,670,441 Public works 9,610,047 10,691,559 9,610,047 10,691,559 Community development 1,971,262 2,071,920 1,971,262 2,071,920 Parks and recreation 2,051,976 1,669,434 2,051,976 1,669,434 Non -departmental 133,783 190,468 - - 133,783 190,468 Water Quality Flood Protection 646,433 1,422,428 646,433 1,422,428 Total expenses 27,043,525 26,421,255 646,433 1,422,428 27,689,958 27,843,683 (Decrease) / Increase in net position 7,867,047 7,366,709 759,126 1,627,037 8,626,173 8,993,746 (Decrease) / Increase in net position 7,867,047 7,366,709 759,126 1,627,037 8,626,173 8,993,746 Net position - beginning of fiscal year 173,862,283 165,938,621 36,501,677 34,874,640 210,363,960 200,813,261 Net position - end of fiscal year $181,729,330 $173,305,330 $ 37,260,803 $ 36,501,677 $ 218,990,133 $ 209,807,007 LA Property Taxes 39% Sources of Revenue - Governmental Activities u Other Taxes 14 w Other 8% w Charges for Services 7% W Operating Contributions and Grants 7% capital k.+;-.. —A and Grants 3% CITY OF RANCHO PALOS VERDES MANAGEMENT'S DISCUSSION AND ANALYSIS YEAR ENDED JUNE 30, 2016 Expenses by Function — Governmental Activities Community u Public Works Development 36% 7% Parks and Recreation 8% w Public Safety 19% Administration 30% Business -Type Activities Business -type activities increased the City's net position by $759,126 due to the reduced operating and depreciation expenses in the Water Quality Flood Protection. In comparison to the previous year, the increase in net position was lowered by $867,910 as a result of the sunset of revenues from the Storm Drain User Fee. FINANCIAL ANALYSIS OF THE GOVERNMENTAL FUNDS As of the end of the current fiscal year, the City's Governmental Funds reported combined ending Fund Balances of $59.2 million, an increase of $9.2 million in comparison to the prior year. Approximately $56.8 million or 96% of the combined ending Fund Balances constitutes spendable fund balance. The combined spendable fund balance includes negative unassigned fund deficits of $40,163 for the Employee Benefits and $26,426 for the Community Development Block Grant. The remainder of the combined ending Fund Balances are either non -spendable due to legal restrictions or non -spendable in the form of prepaid items and inventory. Additional information on the non -spendable items can be found in Note # 7 on pages 61-64 of this report. 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 is $13.7 million, while total Fund Balance reached to $15.1 million. As a measure of the General Fund's liquidity, it may be useful to compare both Unassigned Fund Balance and Total 15 CITY OF RANCHO PALOS VERDES MANAGEMENT'S DISCUSSION AND ANALYSIS YEAR ENDED JUNE 30, 2016 Fund Balance to total fund uses (expenditures and transfers out). Unassigned Fund Balance represents 44% of total General Fund uses, while total Fund Balance represents 49% of the same amount. The fund balance of the City's General Fund decreased by $1.6 million. The decreased amount is primarily attributable to transfers out increasing by $1.8 million from the prior year. The Gas Tax Fund Balance ended the year at $1.3 million. The increase of $36 thousand is from the reduced street landscape maintenance expenditures. The CIP Fund Balance ended the year at $29.7 million, an increase of $9.3 million in comparison to the previous year. As mentioned earlier, the majority of the increase is attributable to the reduction of capital outlay and additional transient occupancy tax transfers accumulated for future capital improvement projects. 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 fiscal year amounted to $5.6 million. Unrestricted Net Position of the Internal Service Funds at the end of the fiscal year amounted to $3.1 million. The total growth in Enterprise Fund net position was $759 thousand or about 9% of unrestricted Net Position. General Fund Budgetary Highlights The difference between original budgeted operating expenditures and the final amended budget was an increase of $954 thousand; and is briefly summarized as follows: An increase of $532 thousand was attributable to appropriations continued from FY 2014-15. ➢ An increase of $261 thousand from Recreation and Parks mainly from additional part-time staff for the Preserve and additional operating park hours. ➢ A decrease of $236 thousand from midyear adjustments. An increase of $276 thousand for Automated License Plate Recognition (ALPR). ➢ Other combined adjustments resulted in net increase of $121 thousand. 16 CITY OF RANCHO PALOS VERDES MANAGEMENT'S DISCUSSION AND ANALYSIS YEAR ENDED JUNE 30, 2016 CAPITAL ASSET AND DEBT ADMINISTRATION Capital Assets. The City's investment in Capital Assets for its Governmental activities as of June 30, 2016, amounts to $118.4 million (net of accumulated depreciation). This investment in capital assets includes land, buildings, park improvements, roadways, sewer, storm drains, vehicles, computer equipment, furniture, other equipment, and construction in progress. During the current fiscal year, the City's investment in governmental capital assets decreased by $1.1 million or 1 %. Major capital asset events during the current fiscal year included the following: ➢ Depreciation of $4 million was recorded for the City's Capital Assets. ➢ A total of $2.4 million of construction in progress was added for various projects. The Capital Assets (net of accumulated depreciation) for Business -type activities as of June 30, 2016 is $150.1 million City of Rancho Palos Verdes Capital Assets (Net of Depreciation) Capital assets being depreciated, net Buildings Governmental Business•type 6,395,430 6,353,169 Activities Activities Total 72,318 2016 2015 2016 2015 2016 2015 Capital assets not being depreciated 374,524 176,558 Furniture, fixtures and equipment Land $ 42,087,575 $ 42,087,575 $ 1,428,243 $ 1,428,243 $ 43,515,818 $ 43,515,818 Construction in progress 1,536,580 4,010,354 482,090 86,486 2,018,670 4,096,840 Total capital assets not being depreciated 43,624,155 46,097,929 1,910,333 1,514,729 45,534,488 47,612,658 Capital assets being depreciated, net Buildings 6,395,430 6,353,169 6,395,430 6,353,169 Vehicles 72,318 87,937 72,318 87,937 Computer equipment 374,524 176,558 374,524 176,558 Furniture, fixtures and equipment 352,975 222,709 352,975 222,709 Infrastructure Roadway system 47,598,976 45,700,251 47,598,976 45,700,251 Sewer system 6,299,321 6,834,470 - - 6,299,321 6,834,470 Storm drain system 8,944,000 9,179,025 29,752,307 29,653,119 38,696,307 38,832,144 Park system 4,736,804 4,798,462 4,736,804 4,798,462 Total capital assets being depreciated, net 74,774,348 73,352,581 29,752,307 29,653,119 104,526,655 103,005,700 Capital Assets, net $118,398,503 $119,450,510 $31,662,640 $31,167,848 $150,061,143 $ Additional information on the City's Capital Assets can be found in Note #4 on pages 58- 59 of this report. 17 CITY OF RANCHO PALOS VERDES MANAGEMENT'S DISCUSSION AND ANALYSIS YEAR ENDED JUNE 30, 2016 Long-term debt. At the end of the current Fiscal Year, the City of Rancho Palos Verdes had total debt outstanding of $357,504 for Employee Compensated Absences. City of Rancho Palos Verdes Outstanding Debt Governmental Activities 2016 1 2015 Employee compensated absences 1 $ 357,504 1 $ 352,743 At the fiscal year ended June 30, 2016, the City's total debt increased by $4,761 or 1 %, due to the new employee salary rates and 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 $1,688,650,000. ECONOMIC FACTORS AND NEXT YEAR BUDGETS AND RATES ➢ Property tax revenue accounts for about 39 percent of Government -Wide revenues. Local property values remain strong, and the City's property assessments grew by 6.65 % for FY 2015-16. ➢ The Consumer Price Index for Los Angeles County increased by 1.8% for the 12 months ended June 2016. The City's original FY 2016-17 General Fund expenditure budget increased by 9.8% when compared to the original FY 2015-16 budget. Revenue in excess of budgeted expenditures (about $5.2 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 rpvca.gov. 18 BASIC FINANCIAL STATEMENTS 19 This page is intentionally blank. 20 CITY OF RANCHO PALOS VERDES STATEMENT OF NET POSITION June 30, 2016 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 Compensated absences due within one year TOTAL CURRENT LIABILITIES LONG-TERM LIABILITIES: Compensated absences 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 $ 63,730,964 $ 6,180,584 $ 69,911,548 1,449,099 - 1,449,099 67,129 6,589 73,718 7,832,800 - 7,832,800 56,257 - 56,257 987,453 23,061 1,010,514 32,994 - 32,994 701,070 - 701,070 74,857,766 6,210,234 81,068,000 10,497,099 10,497,099 (10,497,099) (10,497,099) 42,087,575 1,428,243 43,515,818 1,536,580 482,090 2,018,670 799,817 - 799,817 6,395,430 - 6,395,430 67,579,101 29,752,307 97,331,408 118,398,503 31,662,640 150,061,143 193,256,269 37,872,874 231,129,143 1,550,506 - 1,550,506 3,931,472 574,342 4,505,814 44,833 37,729 82,562 4,406 - 4,406 445,737 - 445,737 317,020 - 317,020 4,743,468 612,071 5,355,539 40,484 - 40,484 7,637,567 - 7,637,567 7,678,051 - 7,678,051 12,421,519 612,071 13,033,590 655,926 - 655,926 118,398,503 31,662,640 150,061,143 18,691,181 18,691,181 2,429,522 2,429,522 42,210,124 5,598,163 47,808,287 $ 181,729,330 $ 37,260,803 $ 218,990,133 21 CITY OF RANCHO PALOS VERDES STATEMENT OF ACTIVITIES For the year ended June 30, 2016 Functions/programs Expenses Governmental Activities: Program Revenues Operating Capital Charges for Grants and Grants and Services Contributions Contributions Administration $ 8,061,904 $ 317,559 Public safety 5,214,553 179,658 Public works 9,610,047 159,216 Community development 1,971,262 957,982 Parks and recreation 2,051,976 780,701 Non -departmental 133,783 95,835 Total governmental activities Business -type Activity: Water Quality Flood Protection Total primary government 27,043,525 2,490,951 $ 22,352 $ - 114,628 - 2,195,340 1,110,646 2,332,320 1,110,646 646,433 1,384,897 - - $ 27,689,958 $ 3,875,848 $ 2,332,320 $ 1,110,646 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 Total general revenues and transfers Change in net position Net position - beginning of year, as restated Net position - end of year See accompanying notes to financial statements. 22 Net Revenue (Expense) and Changes in Net Position Governmental Business -type Activities Activity Total $ (7,721,993) $ - $ (7,721,993) (4,920,267) - (4,920,267) (6,144,845) - (6,144,845) (1,013,280) - (1,013,280) (1,271,275) - (1,271,275) (37,948) - (37,948) 214,428 (21,109,608) - (21,109,608) 738,464 738,464 (21,109,608) 738,464 (20,371,144) 13,763,845 - 13,763,845 5,196,987 - 5,196,987 2,104,328 - 2,104,328 2,044,650 - 2,044,650 1,865,682 - 1,865,682 1,179,298 - 1,179,298 214,428 20,662 235,090 2,607,437 - 2,607,437 28,976,655 20,662 28,997,317 7,867,047 759,126 8,626,173 173,862,283 36,501,677 210,363,960 $ 181,729,330 $ 37,260,803 $ 218,990,133 23 CITY OF RANCHO PALOS VERDES BALANCE SHEET GOVERNMENTAL FUNDS June 30, 2016 General Capital Projects Special Revenue Capital Gas Tax Improvements ASSETS Cash and investments $ 15,220,695 $ 2,087,591 $ 30,239,296 Receivables: Taxes 1,431,187 - - Interest 17,233 2,041 29,706 Due from other government agencies 638 10,415 - Other 768,255 - 154,491 Due from other funds 66,589 - - Inventory 32,994 - - Prepaid items 530,552 - - Receivable from Successor Agency 10,497,099 - - Allowance for Successor Agency receivable (10,497,099) - - TOTAL ASSETS $ 18,068,143 $ 2,100,047 $ 30,423,493 LIABILITIES Accounts payable and accrued liabilities Due to other funds Retentions payable Advanced from other funds Unearned revenue Deposits payable TOTAL LIABILITIES DEFERRED INFLOWS OF RESOURCES Unavailable revenue 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. 24 $ 2,413,963 $ 751,326 $ 536,116 9,162 - 35,671 445,737 - - 2,868,862 751,326 571,787 131,182 - 143,064 530,552 - - 32,994 - - 801,907 1,348,721 6,466,632 - - 23,242,010 13,702,646 - - 15,068,099 1,348,721 29,708,642 $ 18,068,143 $ 2,100,047 $ 30,423,493 Other Total Governmental Governmental Funds Funds $ 13,165,367 $ 60,712,949 17,912 1,449,099 14,497 63,477 45,204 56,257 62,616 985,362 - 66,589 - 32,994 - 530,552 - 10,497,099 - (10,497,099) $ 13,305,596 $ 63,897,279 $ 129,628 $ 3,831,033 26,426 26,426 - 44,833 4,406 4,406 - 445,737 160,460 4,352,435 47,158 321,404 750,000 750,000 1,000,000 1,000,000 - 530,552 - 32,994 115,976 115,976 10,073,921 18,691,181 1,158,081 24,400,091 - 13,702,646 13,097,978 59,223,440 $ 13,305,596 $ 63,897,279 25 CITY OF RANCHO PALOS VERDES RECONCILIATION OF THE GOVERNMENTAL FUNDS BALANCE SHEET TO THE STATEMENT OF NET POSITION June 30, 2016 Fund balances - total governmental funds $ 59,223,440 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. 117,598,686 Receivables not available to pay for current period expenditures are reported as unavailable revenue in the funds. 321,404 Long-term notes receivable are not current available resources and, therefore, do not affect the governmental fund balance. 7,832,800 Long-term liabilities are not due and payable in the current period and, therefore, are not reported in the governmental funds. (357,504) 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. (6,742,987) 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. 3,853,491 Net position of governmental activities $ 181,729,330 See accompanying notes to financial statements. 26 This page is intentionally blank. 27 CITY OF RANCHO PALOS VERDES STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES GOVERNMENTAL FUNDS For the year ended June 30, 2016 REVENUES: Taxes Licenses and permits Revenue from other agencies Charges for services Fines and forfeitures Use of money and property Other revenues TOTALREVENUES EXPENDITURES: Current Administration Public safety Public works Community development Parks and recreation Non -departmental Capital Outlay 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 See accompanying notes to financial statements. Special Revenue General Gas Tax Capital Projects Capital Improvements $ 24,857,475 $ - $ - 2,382,743 22,352 919,750 45,866 500,925 1,495 179,658 605,790 5,783 87,808 354,338 27,460 28,903,281 954,488 133,674 6,183,010 5,214,553 3,984,821 1,954,274 2,619,150 2,042,418 237,778 1,344,355 20,281,730 1,954,274 1,344,355 8,621,551 (999,786) 146,257 1,035,791 10,352,274) 1,210,681 10,471,894 (10,206,017) 1,035,791 10,471,894 (1,584,466) 36,005 9,261,213 16,652,565 1,312,716 20,447,429 $ 15,068,099 $ 1,348,721 $ 29,708,642 28 Other Total Governmental Governmental Funds Funds $ 867,820 $ 25,725,295 2,382,743 2,454,989 3,442,957 55,670 558,090 130,380 179,658 50,232 749,613 1,397,336 1,779,134 (1,301,334) 334 4,826,047 34,817,490 2,022,220 6,183,010 5,214,553 7,961,315 2,619,150 2,042,418 237,778 1,344,355 2,022,220 25,602,579 2,803,827 9,214,911 130,380 11,784,322 (1,431,714) (11,783,988) (1,301,334) 334 1,502,493 9,215,245 11,595,485 50,008,195 $ 13,097,978 $ 59,223,440 29 CITY OF RANCHO PALOS VERDES RECONCILIATION OF THE STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES OF GOVERNMENTAL FUNDS TO THE STATEMENT OF ACTIVITIES For the year ended June 30, 2016 Net change in fund balances - total governmental funds $ 9,215,245 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 2,398,307 Depreciation expense (3,762,926) Revenues in the Statement of Activities that do not provide current financial resources are not reported as revenues in the funds. 186,161 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. 8,921 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. (4,761) 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 difference in pension expenditures recorded in the governmental funds and pension expense. 142,299 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. (316,199 Change in net position of governmental activities $ 7,867,047 See accompanying notes to financial statements. 30 CITY OF RANCHO PALOS VERDES STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE BUDGET AND ACTUAL GENERALFUND For the year ended June 30, 2016 REVENUES: Taxes Licenses and permits Revenue from other agencies Charges for services Fines and forfeitures Use of money and property Other revenues TOTALREVENUES EXPENDITURES: Administration City council City manager Legal services City clerk Community outreach RPV TV Risk management Personnel Finance Information technology - data Information technology - voice Total Administration Public Safety Sheriff services Special safety programs Animal control Emergency preparedness Total Public Safety Public Works Public works administration Traffic management Storm water quality Public building maintenance Parks/trails/open space maintenance Sewer maintenance Total Public Works See accompanying notes to financial statements. Budgeted Amounts Original Final $ 24,434,281 $ 24,434,281 2,160,100 2,160,100 378,800 120,000 713,720 7S.m7 97 RR9 9nR 378,800 120,000 713,720 7.ri Rn7 97 RR9 9nR Variance with Final Budget Positive Actual (Negative) $ 24,857,475 2,382,743 22,352 500,925 179,658 605,790 R.r�4 RRR 9R an -q 9R1 $ 423,194 222,643 22,352 122,125 59,658 (107,930) 97q mi 1 n91 n7R 129,590 129,590 119,331 10,259 894,417 928,994 885,212 43,782 1,030,000 1,010,000 1,049,278 (39,278) 734,176 728,876 637,521 91,355 79,640 79,640 75,344 4,296 144,320 213,700 221,837 (8,137) 475,000 475,000 589,889 (114,889) 434,579 431,579 388,905 42,674 1,271,426 1,271,426 1,243,420 28,006 962,413 972,913 876,156 96,757 80,000 100,000 96,117 3,883 6,235,561 6,341,718 6,183,010 158,708 5,046,200 5,006,200 4,792,928 213,272 145,300 703,200 110,754 592,446 88,000 110,035 115,235 (5,200) 186,814 221,414 195,636 25,778 5,466,314 6,040,849 5,214,553 826,296 2,236,463 311,000 487,000 511,200 995,300 13,100 4,554,063 31 2,356,163 126,600 307,700 592,800 913,232 41,900 4,338,395 2,234,405 113,729 299,740 501,709 818,498 16,740 3,984,821 121,758 12,871 7,960 91,091 94,734 25,160 353,574 CITY OF RANCHO PALOS VERDES STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE BUDGET AND ACTUAL GENERALFUND For the year ended June 30, 2016 Community Development Planning Building & safety services Code enforcement NCCP View restoration/preservation Geology Total Community Development Parks and Recreation Recreation administration Recreation facilities Special events Point Vicente Interpretive Center REACH Support services Total Parks and Recreation Budgeted Amounts Original Final Variance with Final Budget Positive Actual (Negative) 1,256,515 1,409,515 1,269,390 140,125 773,471 776,771 762,358 14,413 211,151 211,151 160,856 50,295 - 75,053 - 75,053 294,642 275,642 289,446 (13,804) 150,000 125,000 137,100 (12,100) 2,685,779 2,873,132 2,619,150 253,982 938,325 938,622 906,415 32,207 440,676 700,676 523,080 177,596 136,193 136,193 127,484 8,709 370,805 370,805 386,052 (15,247) 40,190 40,190 41,946 (1,756) 68,845 68,845 57,441 11,404 1,995,034 2,255,331 2,042,418 212,913 Non -departmental TOTAL EXPENDITURES EXCESS (DEFICIENCY) OF REVENUES OVER (UNDER) EXPENDITURES OTHER FINANCING SOURCES (USES) 107,700 149,000 1)4 nnn ncn 1)4 nno nnc 237,778 (88,778) ')n non -70n 11 -7-10 cnc 6,837,757 5,883,783 8,621,551 2,737,768 Transfers in 208,000 208,000 146,257 (61,743) Transfers out (8,417,303) (8,417,303) (10,352,274) (1,934,971) TOTAL OTHER FINANCING SOURCES (USES) (8,209,303) (8,209,303) (10,206,017) (1,996,714) NET CHANGE IN FUND BALANCE (1,371,546) (2,325,520) (1,584,466) 741,054 FUND BALANCE - BEGINNING OF YEAR 16,652,565 16,652,565 16,652,565 - FUND BALANCE - END OF YEAR $ 15,281,019 $ 14,327,045 $ 15,068,099 $ 741,054 See accompanying notes to financial statements. 32 CITY OF RANCHO PALOS VERDES STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE BUDGET AND ACTUAL GAS TAX SPECIAL REVENUE FUND For the year ended June 30, 2016 See accompanying notes to financial statements. 33 Variance with Final Budget Budgeted Amounts Positive Original Final Actual (Negative) REVENUES: Revenue from other agencies $ 1,094,552 $ 1,239,552 $ 919,750 $ (319,802) Charges for services 3,000 3,000 1,495 (1,505) Use of money and property 8,810 8,810 5,783 (3,027) Other revenues 25,000 25,000 27,460 2,460 TOTAL REVENUES 1,131,362 1,276,362 954,488 (321,874) EXPENDITURES: Public Works Street landscape maintenance 1,656,279 1,753,119 1,347,990 405,129 Traffic signal maintenance 127,000 217,000 80,857 136,143 Portuguese Bend road maintenance 574,500 574,500 525,426 49,074 TOTAL EXPENDITURES 2,357,779 2,544,619 1,954,274 590,345 EXCESS (DEFICIENCY) OF REVENUES OVER (UNDER) EXPENDITURES (1,226,417) (1,268,257) (999,786) 268,471 OTHER FINANCING SOURCES (USES): Transfers in 1,035,791 1,035,791 1,035,791 - NET CHANGE IN FUND BALANCE (190,626) (232,466) 36,005 268,471 FUND BALANCE - BEGINNING OF YEAR 1,312,716 1,312,716 1,312,716 - FUND BALANCE - END OF YEAR $ 1,122,090 $ 1,080,250 $ 1,348,721 $ 268,471 See accompanying notes to financial statements. 33 This page is intentionally blank. 34 CITY OF RANCHO PALOS VERDES STATEMENT OF NET POSITION PROPRIETARY FUNDS June 30, 2016 ASSETS CURRENT ASSETS: Cash and investments Receivables: Interest 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 Business -type Governmental Activity Activities Water Quality Internal Flood Protection Service Enterprise Fund Funds $ 6,180,584 $ 3,018,015 6,589 3,652 23,061 2,091 - 170,518 6,210,234 3,194,276 1,428,243 482,090 11,813 2,129,095 31,800,576 (2,060,082) (1,329,278) 31,662,640 799,817 37,872,874 3,994,093 574,342 100,439 37,729 - - 40,163 612,071 140,602 31,662,640 799,817 5,598,163 3,053,674 $ 37,260,803 $ 3,853,491 See accompanying notes to financial statements. 35 CITY OF RANCHO PALOS VERDES STATEMENT OF REVENUES, EXPENSES AND CHANGES IN NET POSITION PROPRIETARY FUNDS For the year ended June 30, 2016 OPERATING REVENUES: Charges for services OPERATING EXPENSES: Personnel services Materials and supplies Maintenance Depreciation TOTAL OPERATING EXPENSES OPERATING INCOME (LOSS) NON-OPERATING REVENUES: Investment income TOTAL NON-OPERATING REVENUES INCOME (LOSS) BEFORE TRANSFERS TRANSFERS Transfers out TOTALTRANSFERS CHANGE IN NET POSITION NET POSITION - BEGINNING OF YEAR AS RESTATED NET POSITION - END OF YEAR See accompanying notes to financial statements. Business -type Governmental Activity Activities Water Quality Internal Flood Protection Service Enterprise Fund Funds $ 1,384,898 $ 2,499,624 72,232 2,247,354 - 279,499 573,282 36,209 919 266,725 646,433 2,829,787 738,464 (330,163) 20,662 14,298 20,662 14,298 759,126 (315,865) - (334) - (334) 759,126 (316,199) 36,501,677 4,169,690 $ 37,260,803 $ 3,853,491 36 CITY OF RANCHO PALOS VERDES STATEMENT OF CASH FLOWS PROPRIETARY FUNDS For the year ended June 30, 2016 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 Amounts borrowed from other funds Transfers 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 Business -type Activity Water Quality Flood Protection Enterprise Fund Governmental Activities Internal Service Funds $ - $ 2,499,624 1,384,898 - (497,973) (391,483) (72,232) (2,209,850) 814,693 (101,709) 251,787 251,787 17,319 1,083,799 (22,384) 40,163 (334) 17,445 13,291 (70,973) 5,096,785 3,088,988 $ 6,180,584 $ 3,018,015 $ 738,464 $ (330,163) 919 266,725 (23,061) (82) - 4,385 98,370 (42,574) $ 814,693 $ (101,709) See accompanying notes to financial statements. 37 CITY OF RANCHO PALOS VERDES STATEMENT OF FIDUCIARY NET POSITION FIDUCIARY FUND June 30, 2016 TOTAL ASSETS 760,814 LIABILITIES Successor Agency Accounts payable and accrued liabilities to the Short-term liability Rancho Palos Verdes Due within one year - Portuguese Bend Redevelopment Agency Due within one year - Abalone Cove Private -Purpose Trust Fund ASSETS 200,000 Cash and investments $ 443,516 Receivables: 6,966,986 Interest 495 Notes 4,928 Prepaid items 311,875 TOTAL ASSETS 760,814 LIABILITIES Accounts payable and accrued liabilities 2,450 Short-term liability Due within one year - Portuguese Bend 96,384 Due within one year - Abalone Cove 85,234 Due within one year - bond payable 200,000 Long-term liabilities Due beyond one year - Portuguese Bend 6,966,986 Due beyond one year - Abalone Cove 3,344,729 Due beyond one year - bond payable 4,275,000 TOTAL LIABILITIES 14,970,783 NET POSITION (DEFICIT) HELD IN TRUST $ (14,209,969) See accompanying notes to financial statements. 38 CITY OF RANCHO PALOS VERDES STATEMENT OF CHANGES IN FIDUCIARY NET POSITION FIDUCIARY FUND For the year ended June 30, 2016 See accompanying notes to financial statements. 39 Successor Agency to the Rancho Palos Verdes Redevelopment Agency Private -Purpose Trust Fund ADDITIONS Taxes $ 534,491 Use of money and property 1,705 TOTAL ADDITIONS 536,196 DEDUCTIONS Administration 24,106 Debt interest and fiscal charges 764,913 TOTAL DEDUCTIONS 789,019 CHANGE IN NET POSITION (252,823) NET POSITION (DEFICIT) - BEGINNING OF YEAR (13,957,146) NET POSITION (DEFICIT) - END OF YEAR $ (14,209,969) See accompanying notes to financial statements. 39 This page is intentionally blank. 40 NOTES TO THE FINANCIAL STATEMENTS 41 This page is intentionally blank. 42 CITY OF RANCHO PALOS VERDES NOTES TO FINANCIAL STATEMENTS JUNE 30, 2016 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. 43 CITY OF RANCHO PALOS VERDES NOTES TO FINANCIAL STATEMENTS JUNE 30, 2016 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 palosverdes.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 CITY OF RANCHO PALOS VERDES NOTES TO FINANCIAL STATEMENTS JUNE 30, 2016 for with a separate set of self -balancing accounts that comprise its assets, liabilities, deferred outflows/inflows, 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 of equipment, furniture and vehicles 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 45 CITY OF RANCHO PALOS VERDES NOTES TO FINANCIAL STATEMENTS JUNE 30, 2016 fiduciary activities. These statements are presented on an "economic resources" 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 .n CITY OF RANCHO PALOS VERDES NOTES TO FINANCIAL STATEMENTS JUNE 30, 2016 be used to pay liabilities of the current period. Accrued revenues include property taxes received within 60 days after year-end, taxpayer -assessed taxes such as sales taxes, and earnings on investments. Grant funds earned but not received are recorded as a receivable, and grant funds received before the revenue recognition criteria have been met are reported as 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 Gas Tax 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 47 CITY OF RANCHO PALOS VERDES NOTES TO FINANCIAL STATEMENTS JUNE 30, 2016 employee benefits. The City's internal service funds are presented in the proprietary funds financial statements. Because the principal users of the internal services are the City's governmental activities, the financial statements of the internal service funds are consolidated into the governmental 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 an additional appropriation of $1.9 million including transfers out. The increase includes $954 thousand in General fund, $187 thousand in Special Revenue fund, and $820 thousand in Capital Projects funds. 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 W. CITY OF RANCHO PALOS VERDES NOTES TO FINANCIAL STATEMENTS JUNE 30, 2016 excess must either be refunded to the State Controller, returned to the taxpayers through revised tax rates or revised fee schedules, or an excess in one year may be offset against a deficit in the following year. For the fiscal year ended June 30, 2016, based on calculations by City Management, the proceeds of taxes in the amount of $22.9 million did not exceed appropriation limit of $26.1 million. 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. 49 CITY OF RANCHO PALOS VERDES NOTES TO FINANCIAL STATEMENTS JUNE 30, 2016 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 the General Fund if there is unused/unpaid leave outstanding following an employee's separation. G. Investments Investments are reported at fair value which is the amount at which financial instruments could be exchanged in a current transaction between willing parties. All fair values are determined by external consultants. Investments are measured at fair value on a recurring basis. Recurring fair value measurements are those that Governmental Accounting Standards Board (GASB) Statements require or permit in the statement of net position at the end of each reporting period. Fair value measurements are categorized based on the valuation inputs used to measure an asset's fair value: Level 1 inputs are quoted prices in active markets for identical assets; Level 2 inputs are significant other observable inputs; Level 3 inputs are significant unobservable inputs. H. Cash and Investments 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 Judaments 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 50 CITY OF RANCHO PALOS VERDES NOTES TO FINANCIAL STATEMENTS JUNE 30, 2016 thus, an equivalent portion of fund balance is reported as non -spendable. The City had a total of $701,070 of prepaid items as of June 30, 2016. 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. 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. 72 — Fair Value Measurement and Application. GASB has amended the definitions and principles of fair value measurement to enhance comparability of governmental financial statements by requiring fair value measurement for certain assets and liabilities using accepted valuation techniques. This standard also expands fair value disclosures to provide comprehensive information in the financial statements about the impact of fair value measurements on a government's financial position. This statement was implemented effective July 1, 2015. 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 51 CITY OF RANCHO PALOS VERDES NOTES TO FINANCIAL STATEMENTS JUNE 30, 2016 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. 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. GASB Statement No. 78 - Pensions Provided through Certain Multiple -Employer Defined Benefit Pension Plans. This Statement narrows the scope and applicability of GASB Statement No. 68, to exclude pensions provided to employees of state or local governmental employers through a cost-sharing multiple employer defined benefit pension plan meeting specific criteria; establishes new guidance for these employers, including separate requirements for recognition and measurement of pension expense or expenditures and liabilities, note disclosures and required supplementary information (RSI). This statement is not effective until June 30, 2016. The City has not determined its effect on the financial statements. GASB Statement No. 79 - Certain External Investment Pools and Pool Participants. GASB has establishes new criteria to continue amortized cost accounting for certain external investment pools in light of recent SEC changes to money market fund criteria. This statement is not effective until June 30, 2016. The City has not determined its effect on the financial statements. GASB Statement No. 80 - Blending Requirements for Certain Component Units - an amendment of GASB Statement No. 14. GASB will requires state or local governments to use the blending method when presenting in their financial statements component units organized as not-for-profit (NFP) corporations in which the primary government is the sole corporate member. The primary government will present activities of an acquired or created, legally separate NFP corporation similar to a department or activity of the primary government. This statement is not effective until June 30, 2018. The City has not determined its effect on the financial statements. GASB Statement No. 81 - Irrevocable Split -Interest Agreements. This Statement enhances the comparability of financial statements by providing accounting and financial reporting guidance for irrevocable split -interest agreements in which a government is a beneficiary. This Statement also enhances the decision -usefulness of general purpose external financial reports, and their value for assessing accountability, by more clearly identifying the resources that are available. This statement is not effective until June 30, 2017. The City has not determined its effect on the financial statements. 52 CITY OF RANCHO PALOS VERDES NOTES TO FINANCIAL STATEMENTS JUNE 30, 2016 GASB Statement No. 82 – Pension Issues—an amendment of GASB Statements No. 67, No. 68, and No. 73. This statement addresses issues regarding (1) the presentation of payroll -related measures in required supplementary information, (2) the selection of assumptions and the treatment of deviations from the guidance in an Actuarial Standard of Practice for financial reporting purposes, and (3) the classification of payments made by employers to satisfy employee (plan member) contribution requirements. This statement takes effect 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, 2016, 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 $ 69,911,548 $ 443,516 $ 70,355,064 Cash and investments as of June 30, 2016 consist of the following: Petty Cash $ 3,000 Deposits with Financial Institution 6,635,273 Money Market Account 3,815,623 Certificates of Deposit 10,500,032 Local Agency Investment Fund (LAIF) 49,401,136 $ 70, 355, 064 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. 53 CITY OF RANCHO PALOS VERDES NOTES TO FINANCIAL STATEMENTS JUNE 30, 2016 On June 30, 2016, the City held demand deposits in the amount of $6.6 million. Per the investment policy, demand deposits and money market savings accounts may exceed $5 million for no more than thirty days if the accounts are to hold monies being transitioned. The balance was reduced below the $5 million amount by July 2016. 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. Remaining Maturity Investment Type 0 -12 months 12 - 24 months 24 - 36 months 36 - 48 months Total Local Agency Investment Fund (LAIF) $ 49,401,136 $ - $ - $ - $ 49,401,136 Certificates of Deposit 3,000,032 3,500,000 3,250,000 750,000 10,500,032 Money Market Account 3,815,623 - - - 3,815,623 Disclosures Relating to Credit Risk Generally, credit risk is the risk that an issuer of an investment will not fulfill its obligation to the holder of the investment. This is measured by the assignment of a rating by a nationally recognized statistical rating organization. The City's LAIF and its investments are not rated. 54 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, 2016, the City held demand deposits in the amount of $6.6 million. Per the investment policy, demand deposits and money market savings accounts may exceed $5 million for no more than thirty days if the accounts are to hold monies being transitioned. The balance was reduced below the $5 million amount by July 2016. 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. Remaining Maturity Investment Type 0 -12 months 12 - 24 months 24 - 36 months 36 - 48 months Total Local Agency Investment Fund (LAIF) $ 49,401,136 $ - $ - $ - $ 49,401,136 Certificates of Deposit 3,000,032 3,500,000 3,250,000 750,000 10,500,032 Money Market Account 3,815,623 - - - 3,815,623 Disclosures Relating to Credit Risk Generally, credit risk is the risk that an issuer of an investment will not fulfill its obligation to the holder of the investment. This is measured by the assignment of a rating by a nationally recognized statistical rating organization. The City's LAIF and its investments are not rated. 54 CITY OF RANCHO PALOS VERDES NOTES TO FINANCIAL STATEMENTS JUNE 30, 2016 Concentration of Credit Risk The investment policy of the City of Rancho Palos Verdes contains no limitations on the amount that can be invested in any one issuer beyond that stipulated by the California Government Code. As of June 30, 2016, the City's investments in LAIF and Certificate of Deposits 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, $9.9 million 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. 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. 55 CITY OF RANCHO PALOS VERDES NOTES TO FINANCIAL STATEMENTS JUNE 30, 2016 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. Fair Value Classifications Fair value measurements are categorized based on the valuation inputs used to measure fair value: Level 1 inputs are quoted prices in active markets for identical assets; Level 2 inputs are significant other observable inputs; Level 3 inputs are significant unobservable inputs. The City's investment in LAIF, the money market account, and the certificates of deposit is uncategorized with respect to the fair value hierarchy. NOTE #3 — INTERFUND TRANSACTIONS Interfund balances consisted of the following at June 30, 2016: Due To General Fund E U- CDBG Fund 26,426 Employee Benefits Fund 40,163 o Total: $ 66,589 General fund cash was used to cover grant expenditures in the Community Development Block Grant (CDBG) Fund, until reimbursement is received from the granting agency. 56 CITY OF RANCHO PALOS VERDES NOTES TO FINANCIAL STATEMENTS JUNE 30, 2016 Interfund Transfers Interfund transfers for the year ended June 30, 2016, consisted of the following: Transfer From 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 a total of $10,352,274. Of this amount, $10,221,894 was transferred to the Capital Improvement Projects (CIP) Fund. The transfer included $6,144,952 of funding for the CIP Reserve for future infrastructure projects, as required by the City Council's Reserve Policy; an additional $2,214,942 for future projects as directed by City Council; and $1,862,000 of funding for the annual residential street rehabilitation program. The remaining balance of $130,380 was transferred to Improvement Authority Abalone Cove for $37,000; Abalone Cove Sewer District for $80,700 and Community Development Block Grant for $12,680. General Fund also received $146,257 during the year. Of this amount, $100,000 was transferred from Public Safety Fund; another $42,923 was transferred from Measure A Maintenance Fund and the remaining $3,334 was transferred from Waste Reduction Fund and Building Replacement Fund. Gas Tax Fund received $1,035,791, which includes transfers of: $200,000 from the 1972 Act Fund for street landscape maintenance; $97,791 from the Beautification Fund for median maintenance; $95,000 from the Waste Reduction Fund, $117,000 from the 1911 Act Fund for traffic signal maintenance; and $526,000 of Proposition C money for roadway maintenance within the landslide area. The CIP Fund received a total of $10,471,894. The transfer included $10,221,894 from General Fund and $250,000 from Other Governmental Funds. 57 Other Internal General Governmental Service Fund Funds Funds Totals o General Fund $ - $ 145,923 $ 334 $ 146,257 Gas Tax 1,035,791 - 1,035,791 u; Capital Improvement Projects 10,221,894 250,000 - 10,471,894 o Other Governmental Funds 130,380 - - 130,380 Totals: $ 10,352,274 $ 1,431,714 $ 334 $ 11,784,322 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 a total of $10,352,274. Of this amount, $10,221,894 was transferred to the Capital Improvement Projects (CIP) Fund. The transfer included $6,144,952 of funding for the CIP Reserve for future infrastructure projects, as required by the City Council's Reserve Policy; an additional $2,214,942 for future projects as directed by City Council; and $1,862,000 of funding for the annual residential street rehabilitation program. The remaining balance of $130,380 was transferred to Improvement Authority Abalone Cove for $37,000; Abalone Cove Sewer District for $80,700 and Community Development Block Grant for $12,680. General Fund also received $146,257 during the year. Of this amount, $100,000 was transferred from Public Safety Fund; another $42,923 was transferred from Measure A Maintenance Fund and the remaining $3,334 was transferred from Waste Reduction Fund and Building Replacement Fund. Gas Tax Fund received $1,035,791, which includes transfers of: $200,000 from the 1972 Act Fund for street landscape maintenance; $97,791 from the Beautification Fund for median maintenance; $95,000 from the Waste Reduction Fund, $117,000 from the 1911 Act Fund for traffic signal maintenance; and $526,000 of Proposition C money for roadway maintenance within the landslide area. The CIP Fund received a total of $10,471,894. The transfer included $10,221,894 from General Fund and $250,000 from Other Governmental Funds. 57 CITY OF RANCHO PALOS VERDES NOTES TO FINANCIAL STATEMENTS JUNE 30, 2016 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 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, 2016. Beginning Ending Governmental Activities Balance Increases Decreases Balance As restated Capital assets not being depreciated: Land $ 42,087,575 - - $ 42,087,575 Construction in progress 4,010,354 2,398,307 (4,872,081) 1,536,580 Total capital assets not being depreciated 46,097,929 2,398,307 (4,872,081) 43,624,155 Capital assets being depreciated: Building and improvements Vehicles Computer equipment Furniture, fixtures and equipment Infrastructure Roadway system Sewer system Storm drain system Parks system Total capital assets being depreciated Less accumulated depreciation for: Buildings and improvements Vehicles Computer equipment Furniture, fixtures and equipment Infrastructure Roadway system Sewer system Storm drain system Parks system Total accumulated depreciation 12,626,637 119,723 - 12,746,360 356,365 12,804 - 369,169 1,034,356 - (39,855) 994,501 766,639 9,580 (10,794) 765,425 97,600,303 4,752,358 - 102,352,661 25,965,995 - - 25,965,995 13,148,416 - 13,148,416 6,371,095 - - 6,371,095 157,869,806 4,894,465 (50,649) 162,713,622 (6,273,468) (77,462) - (6,350,930) (268,428) (28,423) - (296,851) (526,525) (133,307) 39,855 (619,977) (318,249) (104,995) 10,794 (412,450) (51,900,053) (2,853,632) - (54,753,685) (19,131,525) (535,149) - (19,666,674) (3,969,391) (235,025) - (4,204,416) (1,572,633) (61,658) - (1,634,291) (83,960,272) (4,029,651) 50,649 (87,939,274) Total capital assets being depreciated, net 73,909,534 864,814 - 74,774,348 Governmental activities capital assets, net $ 120,007,463 3,263,121 (4,872,081) $ 118,398,503 W. CITY OF RANCHO PALOS VERDES NOTES TO FINANCIAL STATEMENTS JUNE 30, 2016 Depreciation expense was charged to functions/programs of the primary government as follows: Administration (depreciation of buildings) $ 77,462 Public Works (depreciation of roadways, sewers, and storm drains) 3,623,806 Recreation Services (depreciation of parks system) 61,658 Capital assets held by the City's internal service funds are charged to the various functions based on their usage of the assets 266,725 Total Depreciation Expense — Governmental Activities $4,029,651 Business -type Activities Capital assets not being depreciated: Land Construction in progress Total capital assets not being depreciated Capital assets being depreciated: Beginning Ending Balance Increases Decreases Balance $ 1,428,243 - - $ 1,428,243 86,486 495,711 (100,107) 482,090 1,514,729 495,711 (100,107) 1,910,333 Equipment 11,813 - - 11,813 Storm drain system 31,700,469 100,107 - 31,800,576 Total capital assets being depreciated 31,712,282 100,107 - 31,812,389 Less accumulated depreciation for: Equipment (11,813) - - (11,813) Storm drain system (2,047,350) (932) 13 (2,048,269) Total accumulated depreciation (2,059,163) (932) 13 (2,060,082) Total capital assets being depreciated, net 29,653,119 99,175 13 29,752,307 Business -type activities capital assets, net $31,167,848 594,886 (100,094) $31,662,640 Depreciation expense of $932 is included in the Water Quality Flood Protection enterprise fund. 59 CITY OF RANCHO PALOS VERDES NOTES TO FINANCIAL STATEMENTS JUNE 30, 2016 NOTE #5 — NOTES RECEIVABLE The receivable from the 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). 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 $1,185,574 at June 30, 2016 was $7,403,139. 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. 60 Governmental Activities Notes Receivable $ 7,832,800 Notes Receivable City Affordable Housing In -Lieu $ 1,491,748 City Low -Moderate Income Housing 5,911,391 Community Development Block Grant 429,661 Subtotal: 7,832,800 Receivable from Successor Agency 10,493,332 Allowance from Successor Agency receivable (10,493,332) Total Notes Receivable: $ 7,832,800 The receivable from the 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). 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 $1,185,574 at June 30, 2016 was $7,403,139. 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. 60 CITY OF RANCHO PALOS VERDES NOTES TO FINANCIAL STATEMENTS JUNE 30, 2016 Community Development 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, 2016 is $429,661. NOTE #6 — LONG-TERM DEBT Balance Balance Amount Due July 1, 2015 Additions Deletions June 30, 2016 in One Year Employee Compensated Absences $ 352,743 $317,559 $(312,798) $ 357,504 $ 317,020 Employee Compensated Absences There is no fixed payment schedule for employee compensated absences. Based on historical trends, $317,020 is estimated to be the amount that will be used and/or paid out during the fiscal year ended June 30, 2016. 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. 61 CITY OF RANCHO PALOS VERDES NOTES TO FINANCIAL STATEMENTS JUNE 30, 2016 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. 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, 2016: 62 Capital Other General Gas Tax Improvement Governmental Fund Fund Fund Funds Nonspendable: In Form (inventory and prepaid) $ 563,546 $ - $ - $ - Legally - - - 1,750,000 Habitat Restoration - - - 115,976 Restricted Public Works 22,500 1,348,721 6,466,632 10,073,921 City Administration 40,852 - - - Public Safety 679,430 - - - Community Development 8,225 - - - Recreation and Parks 50,900 - - - Committed - - - - Assigned Public Works - 23,112,010 1,158,081 Continued Appropriations - - 130,000 - Unassigned: Unrestricted Fund Balance 13,426,498 - - - Continued Appropriations 276,148 - - - Governmental Fund Balance Totals $15,068,099 $ 1,348,721 $ 29,708,642 $ 13,097,978 62 CITY OF RANCHO PALOS VERDES NOTES TO FINANCIAL STATEMENTS JUNE 30, 2016 Non -spendable Fund Balance • General Fund assets include $32,994 of inventory held for resale at the Point Vicente Interpretive Center gift shop, and $530,552 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 $115,976 represents 10 years of annual $10,000 contributions plus interest earnings. Restricted Fund Balance • The balances of the City's Special Revenue Funds, including California Highway User Tax apportionments in the Gas Tax Fund, are constrained to use for specific purposes by other governmental agencies. • The $801,907 balance of the General Fund is restricted for ongoing projects approved by the City Council. One of the projects is restricted for Automated Vehicle License Plate Reader in the amount of $667,980. • The $333,300 balance of the Gas Tax Fund is restricted for ongoing sidewalk repairs. • The $6,466,632 balance of the Capital Improvement Fund is restricted for ongoing improvements for streets, buidling, parks, trails and open space, and Portuguese Bend's dewatering wells project. Assigned Fund Balance • The $23,242,010 balance of the Capital Improvement Projects Fund has been assigned for the planning, design and construction of infrastructure projects. • The $476,117 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 $659,816 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. 63 CITY OF RANCHO PALOS VERDES NOTES TO FINANCIAL STATEMENTS JUNE 30, 2016 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 $13,426,498 at June 30, 2016. • On December 6, 2016 the City Council approved to carry forward $276,148 of FY 2015-16 General Fund appropriations to FY 2016-17. Statement of Net Position The City's Net Position at June 30, 2016 includes restricted amounts totaling $20,557,157. The restrictions are itemized in the following table, and are noted above, in the discussion of governmental fund balances. Improvement Authority non -spendable balance 1,000,000 Subregion One maintenance non -spendable endowment 750,000 Natural Communities Conser\ration Plan non -spendable endowment 115,976 General Fund restricted balance for Purchase Orders carry -forward 801,907 Street Maintenance restricted balance 1,348,721 Capital Improvement Fund 6,466,632 Other Governmental Funds restricted balances 10,073,921 Total Restricted portion of Net Position $ 20,557,157 NOTE #8 — PENSION AND RETIREMENT HEALTH SAVINGS PLANS Pension Plan Description All qualified permanent and probationary employees are eligible to participate in the City of Rancho Palos Verdes Employee Pension 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 provision, assumption and membership information. Copies of the reports can be found on the CalPERS website. .E CITY OF RANCHO PALOS VERDES NOTES TO FINANCIAL STATEMENTS JUNE 30, 2016 Benefits Provided CalPERS provides service 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. Members with five years of total service are eligible to retire at age 50 with statutorily reduced benefits. 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 each plan are applied as specified by the Public Employees' Retirement Law. The Public Employees' Pension Reform Act of 2013 (PEPRA) requires new benefits and member contributions for new members as defined by PEPRA, that are hired after January 1, 2013. These PEPRA members in pooled plans are reflected in the new Miscellaneous and Safety risk pools created by the CalPERS Board in response to the passage of PEPRA, beginning with the June 30, 2013, risk -pool valuations. The Plan's provisions and benefits in effect at June 30, 2016, are summarized in the following table. Hire Date Formula Benefit vesting schedule Benefit payments Retirement age Monthly benefits, as a % of annual salary Required employee contribution rates uired employer contribution rates Contribution Description Classic Tier 1 Miscellaneous Classic Tier 2 New Members On or after Prior to January Prior to October 2, January 1, 1, 2013 2.5% at 55 5 years of service monthly for life 55 2.50% 8% 9.671% 2012 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% 6.709% 6.237% Section 20814(c) of the California Public Employees' Retirement Law (PERL) requires that the employer contribution rates for all public employers be determined on an annual basis by the actuary and shall be effective on the July 1 following notice of a change in the rate. Funding contributions for the Miscellaneous 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 rate of 65 CITY OF RANCHO PALOS VERDES NOTES TO FINANCIAL STATEMENTS JUNE 30, 2016 employees. Contributions to the pension plan from the City were $830,645 for the year ended June 30, 2016. Pension Liabilities, Pension Expenses and Deferred Outflows/Inflows of Resources Related to Pensions The City reported a net pension liability for its proportionate share of the net pension liability of the Miscellaneous Plan as of June 30, 2016, in the amount of $7,637,567. The City's net pension liability for the Miscellaneous Plan is measured as the proportionate share of the net pension liability of the collective cost-sharing plan. The City's net pension liability of the Plan is measured as of June 30, 2014, and the total pension liability for the Miscellaneous Plan used to calculate the net pension liability was determined by an actuarial valuation as of June 30, 2014, rolled forward to June 30, 2015, using standard update 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 plans relative to the projected contributions of all participating employers, actuarially determined. The City's proportionate share of the net pension liability for the Miscellaneous Plan as of the June 30, 2014 and 2015 measurement dates was as follows: Proportion - June 30, 2014 0.09200% Proportion - June 30, 2015 0.11130% Change - Increase (Decrease) 0.01930% For the year ended June 30, 2016, the City recognized pension expense of $688,347. At June 30, 2016, the City reported deferred outflows of resources and deferred inflows of resources related to pension from the following sources: City contributions subsequent to the measurement date Difference between actual contributions and proportionate share of contributions Net difference between projected and actual earnings on pension plan investments Differences between Expected and actual experience Changes of Assumptions Total Deferred Outflows Deferred Inflows of Resources of Resources $ 830,645 $ - 673,681 - - 219,024 46,180 - $ 1,550,506 436,902 $ 655,926 The amount of $830,645 reported as deferred outflows of resources related to contributions subsequent to the measurement date will be recognized as a reduction of the net pension liability in the year ended June 30, 2017. Other amounts reported 66 CITY OF RANCHO PALOS VERDES NOTES TO FINANCIAL STATEMENTS JUNE 30, 2016 as deferred outflows of resources and deferred inflows or resources related to pensions will be recognized as pension expense as follows: Year Ended June 30, 2014 June 30, June 30, 2015 2017 $ 49,338 2018 47,637 2019 21,715 2020 54,756 Projected Salary Increase $ 63,935 Actuarial Assumptions The total pension liabilities in the June 30, 2014 actuarial valuation was determined using the following actuarial assumptions. Valuation Date June 30, 2014 Measurement Date June 30, 2015 Actuarial Cost Method Entry -Age Normal Cost Method Actuarial Assumptions: Discount Rate 7.65% Inflation 2.75% Projected Salary Increase 3.3% - 14.2% (1) Mortality Derived using CaIPERS' Membership Data (1) Depending on age, service, and type of employment. All other actuarial assumptions used in the June 30, 2014, valuation were based on the results of an actuarial experience study for the period from 1997 to 2011, including updates to salary increase, mortality and retirement rates. The Experience Study report can be obtained at CaIPERS' website. Changes of Assumptions GASB 68, paragraph 68 states that the long long-term expected rate of return should be determined net of pension plan investment expense but without reduction for pension plan administrative expense. The discount rate of 7.50 percent used for the June 30, 2014 measurement date was net of administrative expenses. The discount rate of 7.65 percent used for the June 30, 2015 measurement date is without reduction of pension plan administrative expense. 67 CITY OF RANCHO PALOS VERDES NOTES TO FINANCIAL STATEMENTS JUNE 30, 2016 Discount Rate The discount rate used to measure the total pension liability was 7.65 percent. The projection of cash flows used to determine the discount rate assumed that employee contributions will be made at the current contribution rate and that 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, each 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 7.65 percent 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 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: Real 2 Rate Target Return Return Asset Class Allocation Years 1-10 Years 11+ Global Equity 51% 5.25% 5.71% Global Fixed Income 19% 0.99 2.43 Inflation Sensitive 6% 0.45 3.36 Private Equity 10% 6.83 6.95 Real Estate 10% 4.50 5.13 Infrastructure and Forestland 2% 4.50 5.09 Liquidity 2% (0.55) (1.05) Total 100% An expected inflation of 2.5% used for this period 2 An expected inflation of 3.0% used for this period CITY OF RANCHO PALOS VERDES NOTES TO FINANCIAL STATEMENTS JUNE 30, 2016 Sensitivity of the Net Pension Liability to Changes in the Discount Rate The following presents the City's proportionate share of the net pension liability, calculated using the discount rate of 7.65 percent, as well as what the City's proportionate share of net pension liability would be if it were calculated using a discount rate that is 1 -percentage point lower (6.65 percent), or 1 -percentage point higher (8.65 percent), than the current rate: Discount Rate -1% Current Discount Rate Discount Rate +1 % (6.65%) (7.65%) (8.65%) $ 12,470,707 $ 7,637,567 $ 3,662,836 Pension Plan Fiduciary Net Position Detailed information about the Plan's fiduciary net position is available is a separately issued CalPERS financial report. Retirement Health Savings Plan On November 17, 2009, the City approved the establishment of a defined contribution Retirement Health Savings Plan (the "Plan") for its full-time employees. The Plan is a Health Reimbursement Arrangement ("HRA") within Sections 105 and 106 of the Internal Revenue Code. The Plan assets are managed in a non-taxable trust as described in Section 501(c)(9) of the Internal Revenue Code. The City is the Plan Administrator, and utilizes the services of a contracted financial services provider for day-to-day administration of contributions and disbursements. The City has the authority to amend the Plan's provisions and contribution requirements. The City has no obligation to make contributions to the Plan, but as part of the annual budget process the City may elect to make contributions to the Plan. Employees are required to contribute 1 % of their gross wages to their account, which is owned by the employee. During the fiscal year ended June 30, 2016, the City contributed a total of $83,470 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. CITY OF RANCHO PALOS VERDES NOTES TO FINANCIAL STATEMENTS JUNE 30, 2016 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. 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 70 CITY OF RANCHO PALOS VERDES NOTES TO FINANCIAL STATEMENTS JUNE 30, 2016 costs from $750,000 to $50 million, are distributed based on the outcome of cost allocation within the first and second loss layers. For 2015-16 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) $2.5 million annual aggregate deductible in the $3 million x/s $2 million layer, (b) $3 million x/s $2 million layer, and (c) $2.5 million annual aggregate deductible in the $5 million x/s $5 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 2015-16, the Authority's pooled retention is $2 million per occurrence, with reinsurance to statutory limits under California Workers' Compensation Law. 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, 71 CITY OF RANCHO PALOS VERDES NOTES TO FINANCIAL STATEMENTS JUNE 30, 2016 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 $15,702,596. 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 $15,428,773.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. Special Event Tenant User Liabilitv 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. 72 CITY OF RANCHO PALOS VERDES NOTES TO FINANCIAL STATEMENTS JUNE 30, 2016 There were also no significant reductions in pooled or insured liability coverage in 2015-16. 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. 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. A mediation was conducted between the affected condominium owners, Green Hills and the City on August 5, 2015. The City's sole contribution towards the mediation process and for any settlements reached at mediation shall be $200,000. As of June 30, 2016 there are no updates to report. 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. 73 CITY OF RANCHO PALOS VERDES NOTES TO FINANCIAL STATEMENTS JUNE 30, 2016 Lien date Levy date Due date Collection dates NOTE #12 - UNAVAILABLE REVENUES January 1 June 30 November 1 and February 1 December 10 and April 10 The unavailable revenues in the fund financial statements of the City of Rancho Palos Verdes as of June 30, 2016 are presented in the following table. Revenue Measurable but Not Available (beyond 60 days): General Fund $ 131,182 Capital Improvements 143,064 Other Governmental Funds 47,158 Total Unavaible Revenues $ 321,404 NOTE #13 - OTHER REQUIRED FUND DISCLOSURES The following budget program had expenditures in excess of the budget for the year ended June 30, 2016, as follows: 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. 74 General Fund Program Budget Expenditures Excess Legal Services $1,010,000 $1,049,278 $39,278 RPVTV 213,700 221,837 8,137 Risk Management 475,000 589,889 114,889 Animal Control 110,035 115,235 5,200 View Restoration 275,642 289,446 13,804 Geology 125,000 137,100 12,100 PVIC 370,805 386,052 15,247 REACH 40,190 41,946 1,756 Non -Departmental 149,000 237,778 88,778 Dr. Allen and Charlotte 0 16,000 16,000 Bikeways 0 97 97 Transfers Out $8,417,303 $10,352,274 $1,934,971 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. 74 CITY OF RANCHO PALOS VERDES NOTES TO FINANCIAL STATEMENTS JUNE 30, 2016 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). 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-Liauid Assets The following non -liquid assets are included in the records of the Successor Agency. Note receivable from: Portuguese Bend Club Homeowners Association $ 4,928 Prepaid item 311,875 Total Non -Liquid Assets 1310 803 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, 2016 is $4,928. 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 applied to debt at June 30, 2016 is $311,875. 75 CITY OF RANCHO PALOS VERDES NOTES TO FINANCIAL STATEMENTS JUNE 30, 2016 Debt Summary Due to City: Portuguese Bend Abalone Cove Due to County: Tax Increment Bond Totals Balance July 1, 2015 Additions Deletions 7,039,876 3,417,189 4,655,000 $ 15,112,065 Consolidated Loan from City Balance Amounts Due June 30, 2016 in One Year $ 125,010 $ (101,516) $ 7,063,370 $ 96,384 70,314 (57,541) 3,429,963 85,234 (180,000) 4,475,000 200,000 195,324 $ (339, 057) $ 14, 968, 333 $ 381,618 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 $221,483 of RPTTF revenue will be available for repayment of the City's Consolidated Loan during the fiscal year ended June 30, 2017. 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, 2016, using historical LAIF rates, the loan balance was $12,051,966. Under the new legislation, the loan balance is $10,493,332. 76 CITY OF RANCHO PALOS VERDES NOTES TO FINANCIAL STATEMENTS JUNE 30, 2016 Portuguese Bend Abalone Cove Principal $ 4,166, 997 2,343,807 June 30, 2016 Interest Balance $2,896,373 $ 7,063,370 1,086,155 Allowance from Successor Agency Receivable (6,510,804) (3,982,528) Totals: $ - $ - 3,429,962 10.493.332' Due to the uncertainty of Redevelopment Property Tax Trust Fund revenue available for future loan repayments, the City's loan receivable of $10,493,332 has been completely offset with an allowance for uncollectable amounts on the City's financial statements. Tax Increment Bond and Deferred Interest Pavable 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. 77 CITY OF RANCHO PALOS VERDES NOTES TO FINANCIAL STATEMENTS JUNE 30, 2016 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 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 78 CITY OF RANCHO PALOS VERDES NOTES TO FINANCIAL STATEMENTS JUNE 30, 2016 revenue, no amounts have been included in the following schedule for repayment of the deferred interest. Year Ending June 30, Principal Interest Total 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 310,000 167,750 477,750 2022-2026 2,085,000 530,000 2,615,000 2027-2028 1,115, 000 84,750 1,199, 750 Totals $4,475,000 $ 1,587,625 $6,062,62 NOTE 15 — RESTATEMENT OF BEGINNING NET POSITION During FY 2015-16, Staff performed inventory count to update the City's Equipment Replacement Schedule. As a result, the beginning balance has been restated as noted below to include items that were not included in the prior year's schedule. Items added include computer equipment, furniture, fixtures and equipment. Governmental Activities Beginning of year, as previously reported Net Position $ 173,305,330 Restatement of Equipment Replacement - beginning balance of computer and furniture 556,953 Beginning of year, as restated Net Position $ 173,862,283 Internal Service Funds Beginning of year, as previously reported Net Position $ 3,612,737 Restatement of Equipment Replacement - beginning balance of computer and furniture 556,953 Beginning of year, as restated Net Position $ 4,169,690 79 This page is intentionally blank. -M REQUIRED SUPPLEMENTARY INFORMATION 81 This page is intentionally blank. As of the fiscal year ending June 30, 2016 Last Ten Years* Schedule of Proportionate Share of the Net Pension Liability Proportion of the net pension liability Proportionate share of the net pension liability Covered - employee payroll Proportionate share of the net pension liability as a percentage of covered -employee payroll 0.11130% 0.09183% $ 7,637,567 $ 5,714,320 $ 6,005,784 $ 5,839,326 127.17% Plan fiduciary net position as a percentage of the total pension liability 78.40% Note to Schedule: * - Fiscal year 2015 was the first year of implementation, therefore, only two years are shown. 83 97.86% 79.82% As of the fiscal year ending June 30, 2016 Last Ten Years* Schedule of Contributions 611 [: Actuarially determined contribution $ 487,223 Contributions in relation to the actuarially determined contribution (830,645) Contribution deficiency (excess) $ (343,422) Covered -employee payroll $ 5,590,165 Contributions as a percentage of covered -employee payroll 8.72% - Fiscal year 2015 was the first year of implementation, therefore, only two years are shown. 84 $ 725,496 725,496 $ 5,926,209 12.24% SUPPLEMENTARY INFORMATION 85 This page is intentionally blank. 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. 87 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 for federal 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 Projects 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). :: 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. The Habitat Restoration Fund to be funded at the rate of $10,000 annually (plus interest) for fifty (50) years, to provide for maintenance of habitat in the future. Sub -region One Maintenance — to account for monies used to maintain public improvements and habitat areas dedicated to the City upon completion of the Sub- region 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. :• CITY OF RANCHO PALOS VERDES COMBINING BALANCE SHEET OTHER GOVERNMENTAL FUNDS June 30, 2016 ASSETS Cash and investments Receivables: Taxes Interest Due from other government agencies Other TOTAL ASSETS LIABILITIES Accounts payable Due to other funds Unearned Revenues TOTAL LIABILITIES DEFERRED INFLOWS OF RESOURCES Unavailable revenue FUND BALANCES Non -Spendable: Endowment principal Reimbursement settlement agreement Habitat restoration Restricted Committed Assigned TOTAL FUND BALANCES TOTAL LIABILITIES, DEFERRED INFLOWS AND FUND BALANCES 1972 Act EI Prado 1911 Act $ 29,810 $ 25,151 $ 1,876,988 5,394 47 12,212 127 27 2,106 - - 22 $ 35,331 $ 25,225 $ 1,891,328 $ 3,500 $ - $ 26,750 3,500 - 26,750 31,831 25,225 1,864,578 31,831 25,225 1,864,578 $ 35,331 $ 25,225 $ 1,891,328 .o Continued $ - $ 14,549 $ - 14,549 - - - 463,678 107,024 303,672 476,117 - - - 476,117 463,678 107,024 303,672 $ 476,117 $ 478,227 $ 107,024 $ 303,672 91 Waste Air Quality Beautification Reduction Management Proposition C $ 475,579 $ 462,273 $ 92,375 $ 303,297 538 518 86 375 - - 14,563 - - 15,436 - - $ 476,117 $ 478,227 $ 107,024 $ 303,672 $ - $ 14,549 $ - 14,549 - - - 463,678 107,024 303,672 476,117 - - - 476,117 463,678 107,024 303,672 $ 476,117 $ 478,227 $ 107,024 $ 303,672 91 CITY OF RANCHO PALOS VERDES COMBINING BALANCE SHEET OTHER GOVERNMENTAL FUNDS June 30, 2016 ASSETS Cash and investments Receivables: Taxes Interest Due from other government agencies Other TOTAL ASSETS LIABILITIES Accounts payable Due to other funds Unearned Revenues TOTAL LIABILITIES DEFERRED INFLOWS OF RESOURCES Unavailable revenue FUND BALANCES Non -Spendable: Endowment principal Reimbursement settlement agreement Habitat restoration Restricted Committed Assigned TOTAL FUND BALANCES TOTAL LIABILITIES, DEFERRED INFLOWS AND FUND BALANCES Public Safety Proposition A Grants Measure R $ 390,255 $ 41,836 $ 1,632,888 309 72 1,685 $ 390,564 $ 41,908 $ 1,634,573 $ 472 $ - 472 - 390,092 41,908 390,092 41,908 1,634,573 1,634,573 $ 390,564 $ 41,908 $ 1,634,573 W" Continued $ - $ 3,108 $ - 3,108 - - 47,158 - - - 171 80,545 Dr. Allen and 877,272 Abalone Charlotte 877,272 171 Cove Ginsburg Donor $ 47,329 $ Sewer Cultural Arts Restricted Measure A District Building Contributions $ 167 $ 83,310 $ 85,666 $ 876,396 - 259 - - 4 84 91 876 47,158 - - - $ 47,329 $ 83,653 $ 85,757 $ 877,272 $ - $ 3,108 $ - 3,108 - - 47,158 - - - 171 80,545 85,757 877,272 80,545 877,272 171 85,757 $ 47,329 $ 83,653 $ 85,757 $ 877,272 93 CITY OF RANCHO PALOS VERDES COMBINING BALANCE SHEET OTHER GOVERNMENTAL FUNDS June 30, 2016 ASSETS Cash and investments Receivables: Taxes Interest Due from other government agencies Other TOTAL ASSETS LIABILITIES Accounts payable Due to other funds Unearned Revenues TOTAL LIABILITIES DEFERRED INFLOWS OF RESOURCES Unavailable revenue FUND BALANCES Non -Spendable: Endowment principal Reimbursement settlement agreement Habitat restoration Restricted Committed Assigned TOTAL FUND BALANCES TOTAL LIABILITIES, DEFERRED INFLOWS AND FUND BALANCES Joint Powers Improvement Authority Portuguese Bend Community Development Block Grant Quimby $ 326,451 $ - $ 2,367,266 456 2,441 - 30,641 - $ 326,907 $ 30,641 $ 2,369,707 $ 45,417 $ 4,215 $ - - 26,426 - 45,417 30,641 - 281,490 - 2,369,707 281,490 - 2,369,707 $ 326,907 $ 30,641 $ 2,369,707 94 Continued Total Special Low -Moderate Environmental Revenue Income Excise Tax Bikeways Funds Housing $ 204,366 $ - $ 9,274,074 $ 96,735 - - 17,912 - 243 10,038 68 - - 45,204 - - - 62,616 - $ 204,609 $ - $ 9,409,844 $ 96,803 98,011 $ - - - 26,426 - - 4,406 - - 124,437 4,406 - - 47,158 - 204,609 - 8,762,132 - - - 476,117 92,397 204,609 - 9,238,249 92,397 $ 204,609 $ - $ 9,409,844 $ 96,803 95 CITY OF RANCHO PALOS VERDES COMBINING BALANCE SHEET OTHER GOVERNMENTAL FUNDS June 30, 2016 ASSETS Cash and investments Receivables: Taxes Interest Due from other government agencies Other TOTAL ASSETS LIABILITIES Accounts payable Due to other funds Unearned Revenues TOTAL LIABILITIES DEFERRED INFLOWS OF RESOURCES Unavailable revenue FUND BALANCES Non -Spendable: Endowment principal Reimbursement settlement agreement Habitat restoration Restricted Committed Assigned TOTAL FUND BALANCES TOTAL LIABILITIES, DEFERRED INFLOWS AND FUND BALANCES Total Affordable Capital Housing Projects Habitat In -Lieu Funds Restoration $ 588,935 $ 685,670 $ 1,334,649 632 700 1,553 $ 589,567 $ 686,370 $ 1,336,202 4,406 4,406 - 115,976 1,220,226 589,567 681,964 - 589,567 681,964 1,336,202 $ 589,567 $ 686,370 $ 1,336,202 Subregion One Maintenance Joint Powers Improvement Authority Abalone Cove Total Permanent Funds Total Other Governmental Funds $ 789,734 $ 1,081,240 $ 3,205,623 $ 13,165,367 - - - 17,912 885 1,321 3,759 14,497 - - - 45,204 - 62,616 $ 790,619 $ 1,082,561 $ 3,209,382 $ 13,305,596 $ 3,989 $ 27,628 $ 31,617 $ 129,628 - - - 26,426 - 4,406 3,989 27,628 31,617 160,460 - - - 47,158 750,000 - 750,000 750,000 - 1,000,000 1,000,000 1,000,000 - - 115,976 115,976 36,630 54,933 1,311,789 10,073,921 1,158,081 786,630 1,054,933 3,177,765 13,097,978 $ 790,619 $ 1,082,561 $ 3,209,382 $ 13,305,596 97 CITY OF RANCHO PALOS VERDES COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES OTHER GOVERNMENTAL FUNDS For the year ended June 30, 2016 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 1972 Act EI Prado 1911 Act $ 259,564 $ 2,357 $ 605,899 399 89 6,894 259,963 2,446 612,793 75,335 31 426,065 75,335 31 426,065 184,628 2,415 186,728 (200,000) (117,000) (200,000) - (117,000) (15,372) 2,415 69,728 47,203 22,810 1,794,850 $ 31,831 $ 25,225 $ 1,864,578 M. Continued Waste Air Quality Beautification Reduction Management Proposition C 23,238 54,096 634,714 2,052 1,834 326 1,968 192,169 2,052 217,241 54,422 636,682 148,483 50,000 - 148,483 50,000 - 2,052 68,758 4,422 636,682 (97,791) (98,000) - (526,000) (97,791) (98,000) - (526,000) (95,739) (29,242) 4,422 110,682 571,856 492,920 102,602 192,990 $ 476,117 $ 463,678 $ 107,024 $ 303,672 CITY OF RANCHO PALOS VERDES COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES OTHER GOVERNMENTAL FUNDS For the year ended June 30, 2016 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 764,573 114,618 475,932 1,353 278 5,418 765,926 114,896 481,350 611,907 611,907 - - 154,019 114,896 481,350 - (100,000) - - (100,000) - 154,019 14,896 481,350 236,073 27,012 1,153,223 $ 390,092 $ 41,908 $ 1,634,573 100 101 Continued Dr. Allen and Abalone Charlotte Cove Ginsburg Donor Sewer Cultural Arts Restricted Measure A District Building Contributions 90,225 55,670 171 336 338 3,106 15,168 90,396 56,006 338 18,274 110,713 16,000 11,742 - 110,713 16,000 11,742 90,396 (54,707) (15,662) 6,532 80,700 (42,923) - (42,923) 80,700 - - 47,473 25,993 (15,662) 6,532 (47,302) 54,552 101,419 870,740 $ 171 $ 80,545 $ 85,757 $ 877,272 101 CITY OF RANCHO PALOS VERDES COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES OTHER GOVERNMENTAL FUNDS For the year ended June 30, 2016 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 297,593 1,422 7,686 1,074,511 1,422 297,593 1,082,197 53,121 298,649 - 53,121 298,649 - (51,699) (1,056) 1,082,197 - 12,680 (50,000) - 12,680 (50,000) (51,699) 11,624 1,032,197 333,189 (11,624) 1,337,510 $ 281,490 $ - $ 2,369,707 102 Continued 103 Total Special Low -Moderate Environmental Revenue Income Excise Tax Bikeways Funds Housing $ - $ - $ 867,820 $ - - 2,454,989 55,670 1,161 - 34,831 196 66,450 1,348,298 46,260 67,611 - 4,761,608 46,456 - 97 1,802,143 - 97 1,802,143 - 67,611 (97) 2,959,465 46,456 93,380 (200,000) - (1,431,714) (200,000) - (1,338,334) - (132,389) (97) 1,621,131 46,456 336,998 97 7,617,118 45,941 $ 204,609 $ - $ 9,238,249 $ 92,397 103 CITY OF RANCHO PALOS VERDES COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES OTHER GOVERNMENTAL FUNDS For the year ended June 30, 2016 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 104 Total Affordable Capital Housing Projects Habitat In -Lieu Funds Restoration 2,167 2,363 5,843 2,778 49,038 - 4,945 51,401 5,843 - 139,343 - - 139,343 4,945 51,401 (133,500) 4,945 51,401 (133,500) 584,622 630,563 1,469,702 $ 589,567 $ 681,964 $ 1,336,202 104 105 Joint Powers Improvement Total Subregion Authority Total Other One Abalone Permanent Governmental Maintenance Cove Funds Funds $ - $ - $ - $ 867,820 - 2,454,989 - 55,670 3,080 4,115 13,038 50,232 - 1,397,336 3,080 4,115 13,038 4,826,047 35,046 45,688 220,077 2,022,220 35,046 45,688 220,077 2,022,220 (31,966) (41,573) (207,039) 2,803,827 - 37,000 37,000 130,380 - (1,431,714) - 37,000 37,000 (1,301,334) (31,966) (4,573) (170,039) 1,502,493 818,596 1,059,506 3,347,804 11,595,485 $ 786,630 $ 1,054,933 $ 3,177,765 $ 13,097,978 105 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, 2016 Variance with Final Budget Budgeted Amounts Positive Original Final Actual (Negative) REVENUES Taxes $ 258,515 $ 258,515 $ 259,564 $ 1,049 Use of money and property 380 380 399 19 TOTAL REVENUES 258,895 258,895 259,963 1,068 EXPENDITURES: Public Works 78,200 78,200 75,335 2,865 EXCESS (DEFICIENCY) OF REVENUES OVER (UNDER) EXPENDITURES 180,695 180,695 184,628 3,933 OTHER FINANCING SOURCES (USES): Transfers out (200,000) (200,000) (200,000) - NET CHANGE IN FUND BALANCE (19,305) (19,305) (15,372) 3,933 FUND BALANCE - BEGINNING OF YEAR 47,203 47,203 47,203 - FUND BALANCE - END OF YEAR $ 27,898 $ 27,898 $ 31,831 $ 3,933 106 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, 2016 107 Variance with Final Budget Positive Actual (Negative) $ 2,357 $ 357 89 (111) 2,446 246 2,415 1,215 22,810 - Budgeted Amounts Original Final REVENUES: Taxes $ 2,000 $ 2,000 Use of money and property 200 200 TOTAL REVENUES 2,200 2,200 EXPENDITURES: Public Works 1,000 1,000 EXCESS (DEFICIENCY) OF REVENUES OVER (UNDER) EXPENDITURES 1,200 1,200 FUND BALANCE - BEGINNING OF YEAR 22,810 22,810 FUND BALANCE - END OF YEAR $ 24,010 $ 24,010 107 Variance with Final Budget Positive Actual (Negative) $ 2,357 $ 357 89 (111) 2,446 246 2,415 1,215 22,810 - 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, 2016 EXPENDITURES Public Works 459,000 459,000 Variance with 32,935 EXCESS (DEFICIENCY) OF REVENUES Final Budget Budgeted Amounts OVER (UNDER) EXPENDITURES Positive 106,500 Original Final Actual (Negative) REVENUES: Taxes $ 550,000 $ 550,000 $ 605,899 $ 55,899 Use of money and property 15,500 15,500 6,894 (8,606) TOTAL REVENUES 565,500 565,500 612,793 47,293 EXPENDITURES Public Works 459,000 459,000 426,065 32,935 EXCESS (DEFICIENCY) OF REVENUES OVER (UNDER) EXPENDITURES 106,500 106,500 186,728 80,228 OTHER FINANCING SOURCES (USES): Transfers out (117,000) (117,000) (117,000) - NET CHANGE IN FUND BALANCE (10,500) (10,500) 69,728 80,228 FUND BALANCE - BEGINNING OF YEAR 1,794,850 1,794,850 1,794,850 - FUND BALANCE - END OF YEAR $ 1,784,350 $ 1,784,350 $ 1,864,578 $ 80,228 108 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, 2016 REVENUES: Use of money and property OTHER FINANCING SOURCES (USES): Transfers out NET CHANGE IN FUND BALANCE Budgeted Amounts Original Final Variance with Final Budget Positive Actual (Negative) $ 2,052 $ 1,182 (97,791) (97,791) (97,791) (96,921) (96,921) (95,739) 1,182 FUND BALANCE - BEGINNING OF YEAR 571,856 571,856 571,856 - FUND BALANCE - END OF YEAR $ 474,935 $ 474,935 $ 476,117 $ 1,182 109 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, 2016 110 Variance with Final Budget Budgeted Amounts Positive Original Final Actual (Negative) REVENUES: Revenue from other agencies $ 23,000 $ 23,000 $ 23,238 $ 238 Use of money and property 3,330 3,330 1,834 (1,496) Other revenues 182,500 182,500 192,169 9,669 TOTAL REVENUES 208,830 208,830 217,241 8,411 EXPENDITURES: Public Works 167,683 167,683 148,483 19,200 EXCESS (DEFICIENCY) OF REVENUES OVER (UNDER) EXPENDITURES 41,147 41,147 68,758 27,611 OTHER FINANCING SOURCES (USES): Transfers out (98,000) (98,000) (98,000) - NET CHANGE IN FUND BALANCE (56,853) (56,853) (29,242) 27,611 FUND BALANCE - BEGINNING OF YEAR 492,920 492,920 492,920 - FUND BALANCE - END OF YEAR $ 436,067 $ 436,067 $ 463,678 $ 27,611 110 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, 2016 Variance with Final Budget Budgeted Amounts Positive Original Final Actual (Negative) REVENUES Revenue from other agencies $ 50,000 $ 50,000 $ 54,096 $ 4,096 Use of money and property 780 780 326 (454) TOTAL REVENUES 50,780 50,780 54,422 3,642 EXPENDITURES: Public Works 50,000 50,000 50,000 - EXCESS (DEFICIENCY) OF REVENUES OVER (UNDER) EXPENDITURES 780 780 4,422 3,642 OTHER FINANCING SOURCES (USES): Transfers out - - - - NET CHANGE IN FUND BALANCE 780 780 4,422 3,642 FUND BALANCE - BEGINNING OF YEAR 102,602 102,602 102,602 - FUND BALANCE - END OF YEAR $ 103,382 $ 103,382 $ 107,024 $ 3,642 111 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, 2016 REVENUES: Revenue from other agencies Use of money and property TOTAL REVENUES OTHER FINANCING SOURCES (USES): Transfers out NET CHANGE IN FUND BALANCE Variance with Final Budget Budgeted Amounts Positive Original Final Actual (Negative) $ 636,098 $ 636,098 $ 634,714 $ (1,384) 1,910 1,910 1,968 58 638,008 638,008 636,682 (1,326) (526,000) (526,000) (526,000) 112,008 112,008 110,682 (1,326) FUND BALANCE - BEGINNING OF YEAR 192,990 192,990 192,990 - FUND BALANCE - END OF YEAR $ 304,998 $ 304,998 $ 303,672 $ (1,326) 112 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, 2016 REVENUES: Revenue from other agencies Use of money and property TOTAL REVENUES EXPENDITURES Budgeted Amounts Original Final $ 766,869 $ 766,869 767,149 767,149 Public Works 621,556 621,556 611,907 9,649 EXCESS (DEFICIENCY) OF REVENUES OVER (UNDER) EXPENDITURES 145,593 145,593 154,019 8,426 OTHER FINANCING SOURCES (USES): Transfers out - - - - NET CHANGE IN FUND BALANCE Variance with 145,593 Final Budget FUND BALANCE - BEGINNING OF YEAR Positive Actual (Negative) $ 764,573 $ (2,296) 1,353 1,073 765,926 (1,223) Public Works 621,556 621,556 611,907 9,649 EXCESS (DEFICIENCY) OF REVENUES OVER (UNDER) EXPENDITURES 145,593 145,593 154,019 8,426 OTHER FINANCING SOURCES (USES): Transfers out - - - - NET CHANGE IN FUND BALANCE 145,593 145,593 154,019 8,426 FUND BALANCE - BEGINNING OF YEAR 236,073 236,073 236,073 - FUND BALANCE - END OF YEAR $ 381,666 $ 381,666 $ 390,092 $ 8,426 113 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, 2016 REVENUES: Revenue from other agencies Use of money and property TOTAL REVENUES 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 $ 100,000 $ 100,000 $ 114,618 Variance with Final Budget Positive (Negative) $ 14,618 88 100,190 100,190 114,896 14,706 (100,000) (100,000) (100,000) - 190 190 14,896 14,706 27,012 27,012 27,012 - $ 27,202 $ 27,202 $ 41,908 $ 14,706 114 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, 2016 REVENUES: Revenue from other agencies Use of money and property TOTAL REVENUES 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) $ 477,079 $ 477,079 $ 475,932 $ (1,147) 1,320 1,320 5,418 4,098 478,399 478,399 481,350 2,951 478,399 478,399 481,350 2,951 1,153,223 1,153,223 1,153,223 - $ 1,631,622 $ 1,631,622 $ 1,634,573 $ 2,951 115 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, 2016 Variance with Final Budget Budgeted Amounts Positive Original Final Actual (Negative) REVENUES Revenue from other agencies $ 105,000 $ 105,000 $ 90,225 $ (14,775) Use of money and property - - 171 171 TOTAL REVENUES 105,000 105,000 90,396 (14,604) OTHER FINANCING SOURCES (USES): Transfers out (105,000) (105,000) (42,923) 62,077 NET CHANGE IN FUND BALANCE - - 47,473 47,473 FUND BALANCE - BEGINNING OF YEAR (47,302) (47,302) (47,302) - FUND BALANCE - END OF YEAR $ (47,302) $ (47,302) $ 171 $ 47,473 116 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, 2016 Variance with Final Budget Budgeted Amounts Positive Original Final Actual (Negative) REVENUES Charges for services $ 55,080 $ 55,080 $ 55,670 $ 590 Use of money and property 80 80 336 256 TOTAL REVENUES 55,160 55,160 56,006 846 EXPENDITURES: Public Works 134,483 134,483 110,713 23,770 EXCESS (DEFICIENCY) OF REVENUES OVER (UNDER) EXPENDITURES (79,323) (79,323) (54,707) 24,616 OTHER FINANCING SOURCES (USES): Transfers in 80,700 80,700 80,700 - NET CHANGE IN FUND BALANCE 1,377 1,377 25,993 24,616 FUND BALANCE - BEGINNING OF YEAR 54,552 54,552 54,552 - FUND BALANCE - END OF YEAR $ 55,929 $ 55,929 $ 80,545 $ 24,616 117 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, 2016 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 Budgeted Amounts Original Final 910 910 Variance with Final Budget Positive Actual (Negative) 338 $ (572) 338 (572) 16,000 (16,000) 910 910 (15,662) (16,572) 101,419 101,419 101,419 - $ 102,329 $ 102,329 $ 85,757 $ (16,572) 118 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, 2016 Budgeted Amounts Original Final Variance with Final Budget Positive Actual (Negative) REVENUES: Use of money and property $ 7,460 $ 7,460 $ 3,106 $ (4,354) Other revenue - - 15,168 15,168 TOTAL REVENUES 7,460 7,460 18,274 10,814 EXPENDITURES: Public Works 5,000 31,500 11,742 EXCESS (DEFICIENCY) OF REVENUES OVER (UNDER) EXPENDITURES 2,460 (24,040) 6,532 OTHER FINANCING SOURCES (USES): Transfers out (455,000) (455,000) - NET CHANGE IN FUND BALANCE (452,540) (479,040) 6,532 FUND BALANCE - BEGINNING OF YEAR 870,740 870,740 870,740 FUND BALANCE - END OF YEAR $ 418,200 $ 391,700 $ 877,272 119 19,758 30,572 455,000 485,572 $ 485,572 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, 2016 REVENUES: Use of money and property EXPENDITURES: Public Works Variance with Final Budget Budgeted Amounts Positive Original Final Actual (Negative) $ 2,520 $ 2,520 $ 1,422 $ (1,098) 113,200 133,200 EXCESS (DEFICIENCY) OF REVENUES OVER (UNDER) EXPENDITURES (110,680) (130,680) OTHER FINANCING SOURCES (USES): 53,121 (51,699) Transfers in 57,000 57,000 - NET CHANGE IN FUND BALANCE (53,680) (73,680) (51,699) FUND BALANCE - BEGINNING OF YEAR 333,189 333,189 333,189 FUND BALANCE - END OF YEAR $ 279,509 $ 259,509 $ 281,490 120 80,079 78,981 (57,000) 21,981 $ 21,981 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, 2016 Budgeted Amounts Variance with Final Budget Positive Original Final Actual (Negative) REVENUES: Revenue from other agencies $ - $ 164,408 $ 297,593 $ 133,185 EXPENDITURES: Public Works - 404,115 298,649 105,466 EXCESS (DEFICIENCY) OF REVENUES OVER (UNDER) EXPENDITURES - (239,707) (1,056) 238,651 OTHER FINANCING SOURCES (USES): Transfers in - - 12,680 12,680 NET CHANGE IN FUND BALANCE - (239,707) 11,624 251,331 FUND BALANCE - BEGINNING OF YEAR (11,624) (11,624) (11,624) - FUND BALANCE - END OF YEAR $ (11,624) $ (251,331) $ - $ 251,331 121 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, 2016 REVENUES: Use of money and property Other revenues TOTAL REVENUES Budgeted Amounts Original Final 19,030 19,030 19,030 19,030 EXPENDITURES: Public Works - - - - EXCESS (DEFICIENCY) OF REVENUES OVER (UNDER) EXPENDITURES 19,030 19,030 1,082,197 1,063,167 OTHER FINANCING SOURCES (USES): Transfers out (50,000) (50,000) (50,000) - NET CHANGE IN FUND BALANCE (30,970) (30,970) 1,032,197 1,063,167 FUND BALANCE - BEGINNING OF YEAR 1,337,510 1,337,510 1,337,510 - FUND BALANCE - END OF YEAR $ 1,306,540 $ 1,306,540 $ 2,369,707 $ 1,063,167 122 Variance with Final Budget Positive Actual (Negative) 7,686 (11,344) 1,074,511 1,074,511 1,082,197 1,063,167 EXPENDITURES: Public Works - - - - EXCESS (DEFICIENCY) OF REVENUES OVER (UNDER) EXPENDITURES 19,030 19,030 1,082,197 1,063,167 OTHER FINANCING SOURCES (USES): Transfers out (50,000) (50,000) (50,000) - NET CHANGE IN FUND BALANCE (30,970) (30,970) 1,032,197 1,063,167 FUND BALANCE - BEGINNING OF YEAR 1,337,510 1,337,510 1,337,510 - FUND BALANCE - END OF YEAR $ 1,306,540 $ 1,306,540 $ 2,369,707 $ 1,063,167 122 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, 2016 REVENUES: Use of money and property Other revenues TOTAL REVENUES Budgeted Amounts Original Final 2,350 2,350 2,350 2,350 EXPENDITURES: Public Works - - - - EXCESS (DEFICIENCY) OF REVENUES OVER (UNDER) EXPENDITURES 2,350 2,350 67,611 65,261 OTHER FINANCING SOURCES (USES): Transfers out (200,000) (200,000) (200,000) - NET CHANGE IN FUND BALANCE (197,650) (197,650) (132,389) 65,261 FUND BALANCE - BEGINNING OF YEAR 336,998 336,998 336,998 - FUND BALANCE - END OF YEAR $ 139,348 $ 139,348 $ 204,609 $ 65,261 123 Variance with Final Budget Positive Actual (Negative) 1,161 (1,189) 66,450 66,450 67,611 65,261 EXPENDITURES: Public Works - - - - EXCESS (DEFICIENCY) OF REVENUES OVER (UNDER) EXPENDITURES 2,350 2,350 67,611 65,261 OTHER FINANCING SOURCES (USES): Transfers out (200,000) (200,000) (200,000) - NET CHANGE IN FUND BALANCE (197,650) (197,650) (132,389) 65,261 FUND BALANCE - BEGINNING OF YEAR 336,998 336,998 336,998 - FUND BALANCE - END OF YEAR $ 139,348 $ 139,348 $ 204,609 $ 65,261 123 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, 2016 Variance with Final Budget Budgeted Amounts Positive Original Final Actual (Negative) REVENUES: Revenue from other agencies $ - $ - $ - $ Use of money and property - - - - TOTAL REVENUES - - - - EXPENSES: Public Works - - 97 (97) EXCESS (DEFICIENCY) OF REVENUES OVER (UNDER) EXPENDITURES - - (97) (97) FUND BALANCE - BEGINNING OF YEAR 97 97 97 - FUND BALANCE - END OF YEAR $ 97 $ 97 $ - $ (97) 124 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, 2016 FUND BALANCE - BEGINNING OF YEAR 45,941 45,941 45,941 FUND BALANCE - END OF YEAR $ 55,519 $ 55,519 $ 92,397 125 $ 36,878 Variance with Final Budget Budgeted Amounts Positive Original Final Actual (Negative) REVENUES: Use of money and property $ - $ - $ 196 $ 196 Other revenues 9,578 9,578 46,260 36,682 TOTAL REVENUES 9,578 9,578 46,456 36,878 EXCESS (DEFICIENCY) OF REVENUES OVER (UNDER) EXPENDITURES 9,578 9,578 46,456 36,878 FUND BALANCE - BEGINNING OF YEAR 45,941 45,941 45,941 FUND BALANCE - END OF YEAR $ 55,519 $ 55,519 $ 92,397 125 $ 36,878 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, 2016 REVENUES: Use of money and property Other revenues TOTAL REVENUES EXPENDITURES: EXCESS (DEFICIENCY) OF REVENUES OVER (UNDER) EXPENDITURES FUND BALANCE - BEGINNING OF YEAR FUND BALANCE - END OF YEAR Budgeted Amounts Original Final $ 4,510 $ 4,510 4,510 4,510 4,510 4,510 4,945 435 584,622 584,622 584,622 - $ 589,132 $ 589,132 $ 589,567 $ 435 126 Variance with Final Budget Positive Actual (Negative) $ 2,167 $ (2,343) 2,778 2,778 4,945 435 4,510 4,510 4,945 435 584,622 584,622 584,622 - $ 589,132 $ 589,132 $ 589,567 $ 435 126 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, 2016 Variance with Final Budget Budgeted Amounts Positive Original Final Actual (Negative) REVENUES Revenue from other agencies $ - $ - $ - $ Use of money and property 13,010 13,010 5,843 (7,167) TOTAL REVENUES 13,010 13,010 5,843 (7,167) EXPENDITURES: Public Works 163,000 163,000 139,343 23,657 EXCESS (DEFICIENCY) OF REVENUES OVER (UNDER) EXPENDITURES (149,990) (149,990) (133,500) 16,490 OTHER FINANCING SOURCES (USES): Transfers in 125,000 125,000 - (125,000) NET CHANGE IN FUND BALANCE (24,990) (24,990) (133,500) (108,510) FUND BALANCE - BEGINNING OF YEAR 1,469,702 1,469,702 1,469,702 - FUND BALANCE - END OF YEAR $ 1,444,712 $ 1,444,712 $ 1,336,202 $ (108,510) 127 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, 2016 128 Variance with Final Budget Budgeted Amounts Positive Original Final Actual (Negative) REVENUES: Use of money and property $ 7,200 $ 7,200 $ 3,080 $ (4,120) EXPENDITURES: Public Works 67,500 67,500 35,046 32,454 EXCESS (DEFICIENCY) OF REVENUES OVER (UNDER) EXPENDITURES (60,300) (60,300) (31,966) 28,334 OTHER FINANCING SOURCES (USES): Transfers in 40,000 40,000 - (40,000) NET CHANGE IN FUND BALANCE (20,300) (20,300) (31,966) (11,666) FUND BALANCE - BEGINNING OF YEAR 818,596 818,596 818,596 - FUND BALANCE - END OF YEAR $ 798,296 $ 798,296 $ 786,630 $ (11,666) 128 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, 2016 129 Variance with Final Budget Budgeted Amounts Positive Original Final Actual (Negative) REVENUES: Use of money and property $ 9,400 $ 9,400 $ 4,115 $ (5,285) EXPENDITURES: Public Works 71,900 71,900 45,688 26,212 EXCESS (DEFICIENCY) OF REVENUES OVER (UNDER) EXPENDITURES (62,500) (62,500) (41,573) 20,927 OTHER FINANCING SOURCES (USES): Transfers in 37,000 37,000 37,000 - NET CHANGE IN FUND BALANCE (25,500) (25,500) (4,573) 20,927 FUND BALANCE - BEGINNING OF YEAR 1,059,506 1,059,506 1,059,506 - FUND BALANCE - END OF YEAR $ 1,034,006 $ 1,034,006 $ 1,054,933 $ 20,927 129 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, 2016 REVENUES: Revenue from other agencies Use of money and property TOTALREVENUES EXPENDITURES: Capital Outlay Infrastructure administration Street improvements Parks/trails/open space improvements Sewer improvements Building improvements Storm water quality improvements Landslide improvements 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 Variance with Final Budget Budgeted Amounts Positive Original Final Actual (Negative) $ 541,183 $ 3,238,785 $ 45,866 $ (3,192,919) 16,700 16,700 87,808 71,108 557,883 3,255,485 133,674 (3,121,811) 297,500 297,500 75,554 221,946 10,259,119 10,259,119 823,046 9,436,073 2,077,733 2,077,733 270,977 1,806,756 1,359,174 1,359,174 112,342 1,246,832 150,000 150,000 - 150,000 955,000 955,000 62,436 892,564 15,098,526 15,098,526 1,344,355 13,754,171 (14,540,643) (11,843,041) (1,210,681) 10,632,360 9,403,806 14,007,053 10,471,894 (3,535,159) - (820,000) - 820,000 9,403,806 (5,136,837) 13,187,053 1,344,012 10,471,894 9,261,213 (2,715,159) 7,917,201 FUND BALANCE - BEGINNING OF YEAR 20,447,429 20,447,429 20,447,429 - FUND BALANCE - END OF YEAR $ 15,310,592 $ 21,791,441 $ 29,708,642 $ 7,917,201 See accompanying notes to financial statements. 130 CITY OF RANCHO PALOS VERDES JUNE 30, 2016 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 of replacement equipment, furniture and vehicles 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. 131 CITY OF RANCHO PALOS VERDES COMBINING STATEMENT OF NET POSITION INTERNAL SERVICE FUNDS June 30, 2016 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 $ 3,018,015 $ - $ - $ 3,018,015 3,326 326 - 3,652 - 2,091 - 2,091 - 170,518 - 170,518 3,021,341 172,935 - 3,194,276 2,129,095 - - 2,129,095 (1,329,278) - - (1,329,278) 799,817 - - 799,817 $ 3,821,158 $ 172,935 $ - $3,994,093 20,995 79,444 - 100,439 - 40,163 - 40,163 20,995 119,607 - 140,602 799,817 - - 799,817 3,000,346 53,328 - 3,053,674 $ 3,800,163 $ 53,328 $ - $ 3,853,491 132 CITY OF RANCHO PALOS VERDES COMBINING STATEMENT OF REVENUES, EXPENSES AND CHANGES IN NET POSITION INTERNAL SERVICE FUNDS For the year ended June 30, 2016 133 Equipment Employee Building Replacement Benefits Replacement Totals OPERATING REVENUES: Charges for services $ 332,700 $ 2,166,924 $ - $ 2,499,624 OPERATING EXPENSES: Personnel services - 2,247,354 - 2,247,354 Materials and supplies 279,499 - - 279,499 Maintenance 36,209 - - 36,209 Depreciation 266,725 - - 266,725 TOTAL OPERATING EXPENSES 582,433 2,247,354 - 2,829,787 OPERATING INCOME (LOSS) (249,733) (80,430) - (330,163) NON-OPERATING REVENUES: Other revenues - - - Investment income 11,634 2,330 334 14,298 TOTAL NON-OPERATING REVENUES 11,634 2,330 334 14,298 INCOME (LOSS) BEFORE TRANSFER (238,099) (78,100) 334 (315,865) TRANSFERS Transfers in - - - - Transfers out - - (334) (334) TOTAL TRANSFERS - - (334) (334) CHANGE IN NET POSITION (238,099) (78,100) - (316,199) NET POSITION - BEGINNING OF YEAR AS RESTATED 4,038,262 131,428 - 4,169,690 NET POSITION - END OF YEAR $ 3,800,163 $ 53,328 $ - $3,853,491 133 CITY OF RANCHO PALOS VERDES COMBINING STATEMENT OF CASH FLOWS INTERNAL SERVICE FUNDS For the year ended June 30, 2016 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 Amounts borrowed form other funds Transfer to ther 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 $ 332,700 $ 2,166,924 $ - $ 2,499,624 (391,483) - - (391,483) (2,209,285) (565) (2,209,850) (58,783) (42,361) (565) (101,709) (22,384) (22,384) 10,194 - - (22,384) 40,163 - 40,163 - (334) (334) 40,163 (334) 17,445 2,198 899 13,291 (70,973) - - (70,973) 3,088,988 - - 3,088,988 $ 3,018,015 $ - $ - $ 3,018,015 $ (249,733) $ (80,430) $ - $ (330,163) 266,725 - - 266,725 795 (877) - (82) - 4,385 - 4,385 (76,570) 34,561 (565) (42,574) $ (58,783) $ (42,361) $ (565) $ (101,709) 134 STATISTICAL SECTION 135 This page is intentionally blank. 136 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 138 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 149 These schedules contain information to help the reader assess the City's most significant local revenue source, property tax. Debt Capacity 155 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 158 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 162 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. 137 Governmental activities Net investment in capital assets Restricted Unrestricted Total governmental activities net position Business -type activities Net investment in capital assets Restricted Unrestricted Total business -type activities net position Primary government Net investment in capital assets Restricted Unrestricted Total primary government net position City of Rancho Palos Verdes Net Position by Component Last Ten Fiscal Years (accrual basis of accounting) (amounts expressed in thousands) 138 2007 2008 2009 2010 2011 $ 109,746 $ 109,376 $ 107,867 $ 115,331 $ 115,145 12,163 1,000 1,000 1,000 1,750 17,823 30,471 31,277 31,855 39,066 $ 139,732 $ 140,847 $ 140,144 $ 148,186 $ 155,961 $ 2,158 $ 5,599 $ 12,477 $ 12,458 $ 12,753 5,258 7,740 2,108 2,825 3,365 $ 7,416 $ 13,339 $ 14,585 $ 15,283 $ 16,118 $ 111,904 $ 114,975 $ 120,344 $ 127,789 $ 127,898 12,163 1,000 1,000 1,000 1,750 23,081 38,211 33,385 34,680 42,431 $ 147,148 $ 154,186 $ 154,729 $ 163,469 $ 172,079 138 City of Rancho Palos Verdes Net Position by Component Last Ten Fiscal Years (accrual basis of accounting) (amounts expressed in thousands) Business -type activities Net investment in capital assets $ 13,356 $ 18,319 $ 29,557 $ 31,168 $ 31,663 Restricted - - - - - Unrestricted 3,532 9,727 5,317 5,334 5,598 Total business -type activities net position $ 16,888 $ 28,046 $ 34,874 $ 36,502 $ 37,261 Primary government Net investment in capital assets 2012 2013 2014 2015 2016 Governmental activities 1,750 1,835 11,792 11,647 20,557 Net investment in capital assets $ 114,488 $ 113,284 $ 114,427 $ 119,450 $ 118,398 Restricted 1,750 1,835 11,792 11,647 20,557 Unrestricted 67,112 46,687 46,679 42,208 42,774 Total governmental activities net position $ 183,351 $ 161,806 $ 172,898 $ 173,305 $ 181,729 Business -type activities Net investment in capital assets $ 13,356 $ 18,319 $ 29,557 $ 31,168 $ 31,663 Restricted - - - - - Unrestricted 3,532 9,727 5,317 5,334 5,598 Total business -type activities net position $ 16,888 $ 28,046 $ 34,874 $ 36,502 $ 37,261 Primary government Net investment in capital assets $ 127,845 $ 131,603 $ 143,984 $ 150,618 $ 150,061 Restricted 1,750 1,835 11,792 11,647 20,557 Unrestricted 70,644 56,414 51,996 47,542 48,372 Total primary government net position $ 200,238 $ 189,852 $ 207,772 $ 209,807 $ 218,990 139 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 2007 2008 2009 2010 2011 Expenses Taxes Governmental activities: Property taxes $ 10,235 $ 10,935 Administration $ 4,953 $ 4,724 $ 6,357 $ 7,824 $ 5,997 Public safety 3,751 4,044 4,233 4,242 1,053 4,335 Public works 1,548 9,969 9,026 10,555 13,633 1,711 10,389 Community development Utility user taxes 2,631 2,441 2,697 2,550 2,622 Parks and recreation 331 1,439 1,396 1,605 1,826 814 1,391 Non -departmental 1,555 - - - 320 Other - Interest on long-term debt 225 271 270 268 265 (2,017) 260 Total governmental activities expenses - 23,014 21,901 25,715 30,660 24,994 Business -type activities: Total governmental activities 17,461 13,875 18,037 19,964 Water Quality Flood Protection 21,677 271 301 437 580 489 Total primary government expenses $ 23,285 $ 22,202 $ 26,152 $ 31,240 $ 25,483 Program Revenues - - - - - Other Governmental activities: - Transfers 2,017 Charges for services: - Total business -type activities 2,388 5,002 Administration $ 29 $ 538 $ 555 $ 681 $ 654 Public safety $ 332 316 267 229 261 Public works 185 1,002 422 1,356 $ 8,042 622 Community development Business -type activities 1,599 1,760 1,643 1,764 1,714 Parks and recreation $ 4,465 51 483 483 896 4,921 457 Non -departmental - - - - - Operating grants and contributions 4,200 3,570 2,963 6,633 3,689 Capital grants and contributions 317 1,472 642 7,179 5 Total governmental activities program revenues 6,713 9,141 6,975 18,738 7,402 Business -type activities: Charges for services: Water Quality Flood Protection 1,188 1,222 1,578 1,264 1,312 Operating grants and contributions - - - - - Capital grants and contributions - Total business -type activities program revenues 1,188 1,222 1,578 1,264 1,312 Total primary government program revenues $ 7,901 $ 10,363 $ 8,553 $ 20,002 $ 8,714 Net (expense)/revenue Governmental activities $ (16,301) $ (12,760) $ (18,740) $ (11,922) $ (17,592) Business -type activities 917 921 1,141 684 823 Total primary government net expense $ (15,384) $ (11,839) $ (17,599) $ (11,238) $ (16,769) General Revenues and Other Changes in Net Position Governmental activities: Taxes Property taxes $ 10,235 $ 10,935 $ 11,462 $ 11,431 $ 11,854 Transient occupancy tax 32 26 85 1,955 2,640 Sales taxes 1,381 1,056 1,053 1,246 1,548 Franchise taxes 1,512 1,599 1,709 1,711 1,825 Utility user taxes 2,271 2,329 2,267 2,395 2,407 Othertaxes 331 794 605 712 814 Investment income 1,615 1,555 631 207 318 Other 2,101 300 225 307 271 Transfers (2,017) (4,719) - - - Extraordinary item Total governmental activities 17,461 13,875 18,037 19,964 21,677 Business -type activities: Investment income 51 283 105 14 13 User Fees - - - - - Other 320 - Transfers 2,017 4,719 - Total business -type activities 2,388 5,002 105 14 13 Total primary government $ 19,849 $ 18,877 $ 18,142 $ 19,978 $ 21,690 Change in Net Position Governmental activities $ 1,160 $ 1,115 $ (703) $ 8,042 $ 4,085 Business -type activities 3,305 5,923 1,246 698 836 Total primary government net expense $ 4,465 $ 7,038 $ 543 $ 8,740 $ 4,921 140 City of Rancho Palos Verdes Changes in Net Position Last Ten Fiscal Years (accrual basis of accounting) (amounts expressed in thousands) 141 2012 2013 2014 2015 2016 Expenses Governmental activities: Administration $ 5,906 $ 5,534 $ 7,530 $ 7,127 $ 8,062 Public safety 4,178 4,348 4,429 4,670 5,215 Public works 11,202 10,874 9,377 10,692 9,610 Community development 2,432 2,526 1,927 2,072 1,971 Parks and recreation 1,490 1,696 1,369 1,669 2,052 Non -departmental - - 35 191 134 Interest on long-term debt 109 Total governmental activities expenses 25,318 24,978 24,667 26,421 27,044 Business -type activities: Water Quality Flood Protection 560 594 659 1,423 646 Total primary government expenses $ 25,878 $ 25,572 $ 25,326 $ 27,844 $ 27,690 Program Revenues Governmental activities: Charges for services: Administration $ 747 $ 779 $ 120 $ 108 $ 317 Public safety 194 150 42 43 180 Public works 684 543 169 432 159 Community development 1,644 1,854 1,772 2,058 958 Parks and recreation 503 476 18 144 781 Non -departmental - - - - 96 Operating grants and contributions 3,628 4,133 2,506 2,274 2,332 Capital grants and contributions 139 139 2,912 1,230 1,111 Total governmental activities program revenues 7,538 8,074 7,539 6,289 5,934 Business -type activities: Charges for services: Water Quality Flood Protection 1,319 1,313 1,361 1,369 1,385 Operating grants and contributions - 2,137 - - - Capital grants and contributions 6,115 1,213 - Total business -type activities program revenues 1,319 3,450 7,476 2,582 1,385 Total primary government program revenues $ 8,857 $ 11,524 $ 15,015 $ 8,871 $ 7,319 Net (expense)/revenue Governmental activities $ (17,780) $ (16,904) $ (17,128) $ (20,132) $ (21,110) Business -type activities 759 2,856 6,817 1,159 738 Total primary government net expense $ (17,022) $ (14,048) $ (10,311) $ (18,973) $ (20,372) General Revenues and Other Changes in Net Position Governmental activities: Taxes Property taxes $ 11,480 $ 11,284 $ 11,991 $ 12,452 $ 13,764 Transient occupancy tax 3,349 3,790 4,250 4,812 5,197 Sales taxes 1,449 1,588 1,642 1,758 2,104 Franchise taxes 1,881 1,907 1,998 2,045 2,045 Utility user taxes 2,333 2,481 2,510 1,973 1,866 Othertaxes 674 778 1,589 1,564 1,179 Investment income 604 184 94 122 214 Other 52 929 4,146 3,231 2,607 Transfers - (8,293) - (458) - Extraordinary item 23,348 (19,289) Total governmental activities 45,170 (4,641) 28,220 27,499 28,976 Business -type activities: Investment income 11 10 11 10 21 User Fees - - - - - Other - - Transfers 8,293 - 458 Total business -type activities 11 8,303 11 468 21 Total primary government $ 45,181 $ 3,662 $ 28,231 $ 27,967 $ 28,997 Change in Net Position Governmental activities $ 27,390 $ (21,545) $ 11,092 $ 7,367 $ 7,867 Business -type activities 770 11,159 6,828 1,627 759 Total primary government net expense $ 28,159 $ (10,386) $ 17,920 $ 8,994 $ 8,626 141 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. 142 Transient Utility Fiscal Property Occupancy Sales Franchise Users Other Year Tax Tax Tax Tax Tax Taxes Total 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 2016 13,764 5,197 2,104 2,045 1,866 1,179 26,155 1: Most of the Motor Vehicle In Lieu Tax is received as Property Tax beginning in 2006. 142 This page is intentionally blank. 143 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) 144 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 $ 3,774 144 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) All other Governmental Funds 2012 2013 2014 2015 2016 General Fund Non -Spendable Non -Spendable $ 7,493 $ 138 $ 144 $ 598 $ 564 Restricted - - - - 802 Committed - - - - - Assigned - - - - - Unassigned 12,464 14,370 15,474 16,055 13,702 Total General Fund $ 19,957 $ 14,508 $ 15,618 $ 16,653 $ 15,068 All other Governmental Funds Non -Spendable Special Revenue Funds $ 3,066 $ - $ - $ - $ - Debt Service Fund - - - - - Capital Projects Funds - - - - - Permanent Fund 1,750 1,835 1,845 1,855 1,866 Restricted Special Revenue Funds 8,187 7,849 8,445 8,362 10,111 Capital Projects Funds - - - - 6,466 Permanent Fund 226 280 1,502 1,492 1,312 Committed Special Revenue Funds - 36 58 55 682 Capital Projects Funds - - - - - Permanent Fund - - - - - Assigned Special Revenue Funds - - 794 572 476 Capital Projects Funds 15,407 13,084 18,535 21,078 23,242 Permanent Fund - - - - - Unassigned Special Revenue Funds (108) (198) (116) (59) - Debt Service Fund - - - - - Capital Projects Funds - - - - - Permanent Fund - - - - - Total all other Governmental Funds $ 28,528 $ 22,885 $ 31,063 $ 33,355 $ 44,155 145 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) Revenues Taxes Licenses and permits Fines and forfeitures Use of money and property Charges for services Donation Revenues from other agencies Other Revenues Total Revenues Expenditures Administration Public Safety Public Works Parks and Recreation Community Development Non -Departmental Pass Through to other agencies Capital Outlay Debt Service Principal Interest Total Expenditures Excess of Revenues over (under) Expenditures Other Financing Sources (uses) Sales of capital assets Transfers in Transfers out Bond Proceeds Advances to the Redevelopment Agency Total Other Financing Sources (uses) Extraordinary Gain (Loss) Net change in Fund Balances Cost of Assets Capitalized Debt Services as a percentage of Non -Capital Expenditures 2007 2008 2009 2010 2011 $ 16,453 $ 17,062 $ 17,573 $ 19,844 $ 21,419 1,763 1,914 1,755 1,954 1,933 237 260 214 179 210 3,480 2,108 1,240 1,601 1,560 61 60 163 81 73 4,118 4,647 3,575 10,180 3,162 201 1,563 467 4,806 229 26,313 27,614 24,987 38,645 28,586 4,607 4,411 4,915 5,720 5,503 3,751 4,044 4,233 4,242 4,335 6,864 5,768 7,075 6,896 7,875 1,319 1,281 1,354 1,702 1,257 2,681 2,496 2,723 2,604 2,784 - - - 320 - 152 169 187 - - 3,124 3,112 2,459 14,567 2,557 248 316 350 419 423 1,390 1,370 1,101 886 887 24,136 22,967 24,397 37,356 25,621 2,177 4,647 590 1,289 2,965 - - - - 350 4,489 3,158 5,815 4,616 8,944 (6,606) (7,924) (5,815) (6,192) (8,944) (2,117) (4,766) - (1,576) 350 $ 60 $ (119) $ 590 $ (287) $ 3,315 146 2,800 2,764 1,895 10,866 3,180 7.7% 8.3% 6.4% 4.9% 5.8% 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) Revenues Taxes Licenses and permits Fines and forfeitures Use of money and property Charges for services Donation Revenues from other agencies Other Revenues Total Revenues Expenditures Administration Public Safety Public Works Parks and Recreation Community Development Non -Departmental Pass Through to other agencies Capital Outlay Debt Service Principal Interest Total Expenditures Excess of Revenues over (under) Expenditures Other Financing Sources (uses) Sales of capital assets Transfers in Transfers out Bond Proceeds Advances to the Redevelopment Agency Total Other Financing Sources (uses) Extraordinary Gain (Loss) Net change in Fund Balances Cost of Assets Capitalized Debt Services as a percentage of Non -Capital Expenditures 2012 2013 2014 2015 2016 $ 21,867 $ 22,543 $ 23,981 $ 24,603 $ 25,725 1,806 2,027 1,951 2,515 2,383 159 117 128 135 180 1,350 1,383 846 653 749 149 141 323 427 558 - 445 - - - 3,421 3,395 5,301 3,794 3,443 259 741 3,068 2,377 1,779 29,011 30,791 35,598 34,504 34,817 5,726 5,401 5,792 5,135 6,183 4,178 4,348 4,492 4,761 5,215 7,616 7,240 7,611 8,042 7,961 1,479 1,557 1,573 1,819 2,042 2,484 2,591 2,640 2,870 2,619 - - 35 190 238 3,155 2,721 4,113 8,697 1,344 464 - - - - 498 - - - - 25,599 23,857 26,256 31,514 25,602 3,412 6,934 9,342 2,990 9,215 8,226 7,954 10,424 13,525 11,784 (7,856) (16,247) (10,479) (13,188) (11,784) 371 (8,293) (55) 337 - 18,240 (6,743) - - - $ 22,023 $ (8,102) $ 9,287 $ 3,327 $ 9,215 2,865 2,022 4,820 8,490 2,398 4.2% 0.0% 0.0% 0.0% 0.0% 147 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. 148 Transient Utility Fiscal Property Occupancy Sales Franchise Users Other Year Tax Tax Tax Tax Tax Taxes Total 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 2016 13,764 5,197 2,104 2,045 1,866 1,179 26,155 Source: City General Ledger 1: Most of the Motor Vehicle In Lieu Fees are received as property tax beginning in 2006. 148 City of Rancho Palos Verdes Assessed Value of Taxable Property Last Ten Fiscal Years (In thousands of dollars) Fiscal Year Residential Commercial Industrial Other Unsecured End Property Property Property Property Property 2007 $ 7,548,956 $ 111,338 $ 3,148 $ 513,876 $ 20,378 2008 7,919,953 170,149 3,211 453,446 26,546 2009 8,235,780 270,956 3,275 491,235 46,858 2010 8,333,042 263,157 3,341 598,539 49,628 2011 8,362,052 396,195 3,333 570,551 45,258 2012 8,596,777 390,497 3,358 564,763 70,284 2013 8,843,139 402,533 3,425 581,160 48,147 2014 9,190,789 475,510 3,493 660,569 46,962 2015 9,492,704 486,378 3,509 679,241 45,906 2016 10,094,704 501,636 3,580 695,738 44,300 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. 149 Fiscal Less Year Tax -Exempt End Property City of Rancho Palos Verdes Assessed Value and Estimated Actual Value of Taxable Property Last Ten Fiscal Years (In thousands of dollars) Taxable Assessed Value City Estimated Assessed Direct Actual Factor of Value as a Tax Taxable Taxable Percentage of Rate (1) Value (2) Assessed Value (3) Actual Value 2007 $ 226,598 $ 7,971,098 0.063728 $ 10,608,336 1.33085 75.14% 2008 151,225 8,422,080 0.063728 11,208,525 1.33085 75.14% 2009 154,969 8,893,135 0.063728 11,835,429 1.33085 75.14% 2010 236,925 9,010,782 0.063728 9,515,593 1.05602 94.69% 2011 158,388 9,219,001 0.063728 9,067,313 0.98355 101.67% 2012 157,307 9,468,372 0.063728 10,683,820 1.12837 88.62% 2013 174,167 9,704,237 0.063728 11,390,239 1.17374 85.20% 2014 153,434 10,223,889 0.063728 13,967,877 1.36620 73.20% 2015 151,709 10,556,029 0.063728 13,571,675 1.28568 77.78% 2016 155,138 11,184,820 0.063728 15,366,477 1.37387 72.79% Source: 2010-2013 & 2006-07 County Assessor data, MuniServices, LLC; 2016 HdL 'Assessed values have been revised from prior CAM 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. 150 City of Rancho Palos Verdes Property Tax Rates - Direct and Overlapping Governments Last Ten Fiscal Years 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.MAINT. 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 2006-07 2007-08 2008-09 2009-10 2010-11 0.063728 - 0.000000 0.063728 0.063728 0.063728 0.063728 0.441223 0.020177 0.441223 0.441223 0.441223 0.441223 0.000110 0.023112 0.000110 0.000110 0.000110 0.000110 0.169715 0.006719 0.169715 0.169715 0.169715 0.169715 0.006910 METRO WATER DIST 0.006910 0.006910 0.006910 0.006910 0.002597 0.002597 0.002597 0.002597 0.002597 0.014699 0.014699 0.014699 0.014699 0.014699 0.043470 0.043470 0.043470 0.043470 0.043470 0.000319 0.000319 0.000319 0.000319 0.000319 0.017499 0.017499 0.017499 0.017499 0.017499 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 0.001369 0.001369 0.001369 0.001369 0.001369 0.002717 0.002717 0.002717 0.002717 0.002717 0.029214 0.029214 0.029214 0.029214 0.029214 0.000302 0.000302 0.000302 0.000302 0.000302 0.196986 0.196986 0.196986 0.196986 0.196986 0.008085 0.008085 0.008085 0.008085 0.008085 0.000876 0.000876 0.000876 0.000876 0.000876 1.000000 1.000000 1.000000 1.000000 1.000000 Debt Service Rates COUNTY - 0.000000 0.000000 0.000000 0.000000 PALOS VERDES PEN USD - 0.019760 0.020177 0.021642 0.022493 COMMNTY COLLEGE - 0.008794 0.022115 0.023112 0.040310 PALOS VERDES LIB - 0.006854 0.006801 0.006618 0.006719 FLOOD CONTROL - 0.000000 0.000000 0.000000 0.000000 METRO WATER DIST - 0.004500 0.004300 0.004300 0.003700 TOTAL - 0.039908 0.053393 0.055672 0.073222 TOTAL TAX RATE - 1.039908 1.053393 1.055672 1.073222 151 City of Rancho Palos Verdes Property Tax Rates - Direct and Overlapping Governments Last Ten Fiscal Years Debt Service Rates 2011-12 2012-13 2013-14 2014-15 2015-16 CITY DIRECT RATE 0.063728 0.063728 0.063728 0.063728 0.063728 All other direct rates: 0.022511 0.024102 0.023109 0.023289 0.023433 LA COUNTY GENERAL 0.441223 0.441223 0.441223 0.441223 0.441223 LA COUNTY ACCUM CAP OUTLAY 0.000110 0.000110 0.000110 0.000110 0.000110 CONSOL. FIRE PRO.DIST OF LA CO. 0.169715 0.169715 0.169715 0.169715 0.169715 LA CO. FIRE-FFW 0.006910 0.006910 0.006910 0.006910 0.006910 LA CO.FL.CON.DR.IMP.DIST.MAINT. 0.002597 0.002597 0.002597 0.002597 0.002597 LA CO FLOOD CONTROL MAINT 0.014699 0.014699 0.014699 0.014699 0.014699 PALOS VERDES LIBRARY DIST MAINT 0.043470 0.043470 0.043470 0.043470 0.043470 LA CO WEST VECTOR CONTROL DIST. 0.000319 0.000319 0.000319 0.000319 0.000319 CO SANITATION DIST NO 5 OPERAT 0.017499 0.017499 0.017499 0.017499 0.017499 WTR REPLENISHMENT DIST OF SO CAL 0.000181 0.000181 0.000181 0.000181 0.000181 ERAF 0.000000 0.000000 0.000000 0.000000 0.000000 EDUCATIONAL AUG FD IMPOUND 0.000000 0.000000 0.000000 0.000000 0.000000 COUNTY SCHOOL SERVICES 0.001369 0.001369 0.001369 0.001369 0.001369 CHILDREN'S INSTIL TUITION FUND 0.002717 0.002717 0.002717 0.002717 0.002717 LA CITY COMM COLLEGE DIST 0.029214 0.029214 0.029214 0.029214 0.029214 LA COMM COLL CHILDREN'S CTR FD 0.000302 0.000302 0.000302 0.000302 0.000302 PALOS VERDES PENINSULA USD 0.196986 0.196986 0.196986 0.196986 0.196986 CO.SCH.SERV.FD-LOS ANGELES 0.008085 0.008085 0.008085 0.008085 0.008085 DEV.CTR.HDCPD MINOR -LA UNIF. 0.000876 0.000876 0.000876 0.000876 0.000876 TOTAL 1.000000 1.000000 1.000000 1.000000 1.000000 Debt Service Rates COUNTY 0.000000 0.000000 0.000000 0.000000 0.000000 PALOS VERDES PEN USD 0.022511 0.024102 0.023109 0.023289 0.023433 COMMNTY COLLEGE 0.035296 0.048750 0.044541 0.040174 0.035755 PALOS VERDES LIB 0.006359 0.006441 0.006118 0.005854 0.005630 FLOOD CONTROL 0.000000 0.000000 0.000000 0.000000 0.000000 METRO WATER DIST 0.003700 0.003500 0.003500 0.003500 0.003500 TOTAL 0.067866 0.082793 0.077268 0.072817 0.068318 TOTAL TAX RATE 1.067866 1.082793 1.077268 1.072817 1.068318 Source: 2010-2015 & 2006-07 County Assessor data, MuniServices, LLC Source: 2008-2009 & 2006 and prior: data is provided from previously published CAFR's. City has no separate debt service rate, direct rate is 100% operating. Table has been updated to reflect City TRA 0-149, which includes Palos Verdes Pennisula Unified School District. Debt Service Rates updated back to 2007-08 due to data availability 152 Taxpayer Long Point Dev LLC PPC Villas Rpv LLC P V Victoria Apts LLC Terraces Subsidiary LLC CPT Vista Catalina LLC Western Riviera Investors Golden Cove LLC Episcopal Communities Services Belmont Village Rpv LP Terranea Resort Spa Taylor Morrison Of California VHPS LLC Johnson Eric C Wlp Westmont Plaza LLC American Golf, Inc California Water Service Co Ocean View Drive Inc. Vh Property Corp Mulligan Michael Gina Victoria Apts Thornecrest LLC Palos Verdes Terrace Ltd. Bruning Fred W Conkling Patricia AA Homes LLC Braun William Briles Richard & Keanna Chung Paul Y Foster Robert D & Gina D Imbach Scott A & Diane Y Trs Kim Goon Gtr Kim Song & Juhyun Trs Labarba James G Co Tr Rahn Patricia J Et Al Rpv Equities Llc Tripeak Llc Vrpv Llc Wil Gal City of Rancho Palos Verdes Principal Property Tax Payers Last Fiscal Year and Nine Years Ago Total Top 25 Taxpayers $ 943,594,621 Total Taxable Value $ 11,184,818,474 Source: Los Angeles County Assessor data, MuniServices, LLC 153 8.44% 2006-07 Percentage of Taxable Total City Taxable Value ($) Rank Value (%) 96,914,400 1 1.21% 24,534,800 7 0.31% 44,117,355 4 0.55% 26,858,489 6 21,000,000 8 15,129,651 10 17,976,909 9 6,270,000 17 7,515,951 12 51,785,206 3 7,334,107 13 7,183,843 15 6,920,000 5,061,119 5,120,275 5,211,338 5,577,500 5,228,528 4,943,000 5,749,796 33,200,000 7,308,500 12,573,540 53,181,007 6,033,279 $ 482,728,593 100.00% 7,989,006,677 16 24 23 22 20 21 25 19 5 14 11 2 18 0.34% 0.26% 0.19% 0.23% 0.08% 0.09% 0.65% 0.09% 0.09% 0.09% 0.06% 0.06% 0.07% 0.07% 0.07% 0.06% 0.07% 0.42% 0.09% 0.16% 0.67% 0.08% 6.04% 100.00% 2015-16 Percentage of Taxable Total City Taxable Value ($) Rank Value (%) 439,401,724 1 3.93% 68,329,619 2 0.61% 50,157,730 3 0.45% 41,906,576 4 0.37% 36,562,167 5 0.33% 31,440,822 6 0.28% 29,148,189 7 0.26% 28,246,480 8 0.25% 24,590,655 9 0.22% 20,761,643 10 0.19% 18,665,634 11 0.17% 18,065,127 12 0.16% 16,992,265 13 0.15% 15,095,704 14 0.13% 12,558,652 15 0.11% 12,156,616 16 0.11% 11,500, 000 17 0.10% 10,554,956 18 0.09% 9,410,437 19 0.08% 8,336,832 20 0.07% 8,324,961 21 0.07% 8,208,925 22 0.07% 7,759,887 23 0.07% 7,719,037 24 0.07% 7,699,983 25 0.07% Total Top 25 Taxpayers $ 943,594,621 Total Taxable Value $ 11,184,818,474 Source: Los Angeles County Assessor data, MuniServices, LLC 153 8.44% 2006-07 Percentage of Taxable Total City Taxable Value ($) Rank Value (%) 96,914,400 1 1.21% 24,534,800 7 0.31% 44,117,355 4 0.55% 26,858,489 6 21,000,000 8 15,129,651 10 17,976,909 9 6,270,000 17 7,515,951 12 51,785,206 3 7,334,107 13 7,183,843 15 6,920,000 5,061,119 5,120,275 5,211,338 5,577,500 5,228,528 4,943,000 5,749,796 33,200,000 7,308,500 12,573,540 53,181,007 6,033,279 $ 482,728,593 100.00% 7,989,006,677 16 24 23 22 20 21 25 19 5 14 11 2 18 0.34% 0.26% 0.19% 0.23% 0.08% 0.09% 0.65% 0.09% 0.09% 0.09% 0.06% 0.06% 0.07% 0.07% 0.07% 0.06% 0.07% 0.42% 0.09% 0.16% 0.67% 0.08% 6.04% 100.00% City of Rancho Palos Verdes Property Tax Levies and Collections Last Ten Fiscal Years (amounts expressed in thousands) Source: County Assessor Data Includes 1% secured apportionment only 154 Collected within the Total Tax Fiscal Year of the Levy Total Collections to Date Fiscal Levy for Percentage Collections in Percentage Year Fiscal Year Amount of Levy Subsequent Years Amount of Levy 2007 $5,078 $4,799 94.51% 10 $4,809 94.70% 2008 5,351 5,316 99.35% 10 5,325 99.52% 2009 6,116 5,734 93.75% 8 5,742 93.88% 2010 5,447 4,917 90.27% 8 4,925 90.42% 2011 5,597 5,462 97.59% 0 5,462 97.59% 2012 5,777 5,656 97.91% 0 5,656 97.91% 2013 5,951 5,844 98.20% 0 5,844 98.20% 2014 6,287 6,193 98.50% 0 6,193 98.50% 2015 6,487 6,396 98.60% 0 6,396 98.60% 2016 6,813 6,716 98.58% 0 6,716 98.58% Source: County Assessor Data Includes 1% secured apportionment only 154 City of Rancho Palos Verdes Direct and Overlapping Governmental Activities Debt Current Year CITY OF RANCHO PALOS VERDES 2015-16 Assessed Valuation: $11,257,666,836 DIRECT AND OVERLAPPING TAX AND ASSESSMENT DEBT: Los Angeles County Flood Control District Metropolitan Water District Los Angeles Community College District Los Angeles Unified School District Palos Verdes Unified School District City of Rancho Palos Verdes Palos Verdes Library District Los Angeles County Regional Park and Open Space Assessment District TOTAL DIRECT AND OVERLAPPING TAX AND ASSESSMENT DEBT OVERLAPPING GENERAL FUND DEBT: Los Angeles County General Fund Obligations Los Angeles County Superintendent of Schools Certificates of Participation Los Angeles County Sanitation District No. 5 Authority Los Angeles County South Bay Cities Sanitation District Authority Los Angeles Unified School District Certificates of Participation TOTAL GROSS OVERLAPPING GENERAL FUND DEBT Less: Los Angeles Unified School District QZABs supported by investment fund TOTAL NET OVERLAPPING GENERAL FUND DEBT TOTAL DIRECT DEBT TOTAL GROSS OVERLAPPING DEBT TOTAL NET OVERLAPPING DEBT GROSS COMBINED TOTAL DEBT NET COMBINED TOTAL DEBT Total Debt 6/30/2015 $12,630,000 92,865,000 3,671,000,000 10,457,615,000 69,065,015 0 1,245,000 50,610,000 $2,029,010,694 7,944,360 27,560,973 4,699,750 273,805,000 %Applicable (1) 0.901% 0.459% 1.598% 0.188% 47.323% 100.000% 49.820% 0.883% City's Share of Debt 6/30/15 $113,796 426,250 58,662,580 19,660,316 32,683,637 0 620,259 446,886 $112,613,725 0.883% $17,916,164 0.883% $70,149 10.601% $2,921,739 4.220% $198,329 0.188% $514,753 $21,621,134 25,430 $21,595,704 $0 $134,234,858 $134,209,428 $134,234,858 (2) $134,209,428 (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 2015-16 Assessed Valuation: Direct Debt 0.00% Total Direct and Overlapping Tax and Assessment Debt 1.00% Gross Combined Total Debt 1.19% Net Combined Total Debt 1.19% Source: 2015-16 California Municipal Statistical Co. 155 City of Rancho Palos Verdes Legal Debt Margin Information Last Ten Fiscal Years (Amounts expressed in thousands) Fiscal Year 156 2010 2011 1,351,617 $ 1,382,850 1,351,617 $ 1,382,850 0% 0% 2007 2008 2009 Debt Limit $ 1,195,665 $ 1,274,916 $ 1,345,594 $ Total Net Debt applicable to limit - - - Legal Debt Margin $ 1,195,665 $ 1,274,916 $ 1,345,594 $ Total Net Debt applicable to the limit as a percentage of Debt Limit 0% 0% 0% 156 2010 2011 1,351,617 $ 1,382,850 1,351,617 $ 1,382,850 0% 0% City of Rancho Palos Verdes Legal Debt Margin Information Last Ten Fiscal Years (Amounts expressed in thousands) Fiscal Year 157 2012 2013 2014 2015 2016 Debt Limit $ 1,420,256 $ 1,455,636 $ 1,533,583 $ 1,583,404 $ 1,677,723 Total Net Debt applicable to limit - - - - - Legal Debt Margin $ 1,420,256 $ 1,455,636 $ 1,533,583 $ 1,583,404 $ 1,677,723 Total Net Debt applicable to the limit as a percentage of Debt Limit 0% 0% 0% 0% 0% Total Taxable Value $ 11,184,820 Debt Limit (15% of total taxable value) 1,677,723 Debt applicable to limit - Legal Debt Margin $ 1,677,723 157 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. 158 Per Capita "Public Fiscal Personal Personal Median School Year Population (1) Income (2) Income (2) Age Enrollment 2006-07 43,092 $ 2,411,687,000 $55,966 43.4 12,030 2007-08 42,964 2,549,698,580 59,345 44.4 11,976 2008-09 42,720 2,262,493,920 52,961 43.4 12,033 2009-10 42,642 2,250,346,266 52,773 44.9 11,900 2010-11 41,766 2,425,936,344 58,084 44.3 11,928 2011-12 41,897 2,561,016,971 61,127 47.6 11,840 2012-13 42,114 2,618,143,152 62,168 47.8 11,873 2013-14 42,358 2,564,205,491 60,537 47.6 11,700 2014-15 42,564 2,593,892,724 60,941 48.9 11,632 2015-16 43,041 2,461,988,241 57,201 49.6 11,499 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. 158 Fiscal Year 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12 2012-13 2013-14 2014-15 2015-16 City of Rancho Palos Verdes Demographic and Economic Statistics Last Ten Fiscal Years County Unemployment Rate (%) (3) 4.9% 7.2% 7.5% 11.6% 11.9% 11.1% 11.0% 7.6% 7.1% 6.7% City Unemployment Rate (%) (3) 1.7% 2.5% 2.5% 4.0% 4.1% 3.8% 3.7% 2.5% 3.4% 3.2% County Population (1) 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 10,241,335 City Population (% of County) 0.42% 0.42% 0.41% 0.41% 0.42% 0.42% 0.42% 0.42% 0.42% 0.42% 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. 159 City of Rancho Palos Verdes Principal Sales Tax Producers Last Fiscal Year and Nine Years Ago 2015-16 2006-07 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 Asaka Japanese Cuisine Restaurants Audio Visual Services Group Light Industry Bay Cities Vacuum Sew & Carpet Furniture/Appliance Avenue Italy Restaurants California Do It Center Bldg.Matls-Retail Blue Crab Seafood & Steakhouse Restaurants Carl's Jr. Restaurants Restaurants Carl's Jr. Restaurants Restaurants Centinela Feed & Pet Supplies Miscellaneous Retail Centinela Feed & Pet Supplies Miscellaneous Retail Chevron Service Stations Service Stations Chevron Service Stations Service Stations Coco's Restaurants Restaurants Coco's Restaurants Restaurants EI Pollo Loco Restaurants EI Pollo Loco Restaurants Good Night Mattress Furniture/Appliance Good Night Mattress Furniture/Appliance Green Hills Mortuary & Memoria Miscellaneous Other Green Hills Mortuary & Memoria Miscellaneous Other IHOP Restaurants Restaurants IHOP Restaurants Restaurants Jack In The Box Restaurants Restaurants Jack In The Box Restaurants Restaurants Los Verdes Country Club Restaurants Los Verdes Country Club Restaurants Marie Callender's Restaurant Restaurants Marie Callender's Restaurant Restaurants Mobil Service Stations Service Stations 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 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. 160 Employer Palos Verdes Peninsula Unified School District Terranea Resort Hotel" Marymount College Trump National Golf Club' Canterbury Belmont Corp Ltd ( Belmont Village of Rancho) Trader Joe's Ralphs Store #720 Green Hills Memorial Park American Golf Corp ( Los Verdes Golf Course) Keller Williams Realty Subtotal of Principal Employers Total City Employment Source: MuniServices, LLC Results provided by EDD Labor Force Data. Includes full time and part time employees. City of Rancho Palos Verdes Principal Employers Current Year and Three Years Ago 2016 3,564 27.03% 19,100 161 2013 Percentage of Total City Employees Rank Employment 1,432 1 7.50% 1,036 2 5.42% 262 3 1.37% 190 4 0.99% 143 6 0.75% 140 5 0.73% 110 7 0.58% 106 8 0.55% 75 9 0.39% 70 10 0.37% 3,564 27.03% 19,100 161 2013 3,820 18.37% 20,800 Percentage of Total City Employees Rank Employment 1,970 1 9.47% 730 2 3.51% 220 4 1.06% 260 3 1.25% 115 6 0.55% 111 7 0.53% 88 8 0.42% 83 9 0.40% 80 10 0.38% 0.00% 163 5 0.78% 3,820 18.37% 20,800 City of Rancho Palos Verdes Full-time Equivalent City Government Employees by Function Last Ten Fiscal Years Source: City Budget documents and Payroll records 162 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Function General Government 50 55 58 53 54 52 53 54 60 62 Recreation Part -Time 10 10 11 16.5 18 16.5 16 22 25 29 Total 60 65 69 69.5 72 68.5 69 76 85 91 Source: City Budget documents and Payroll records 162 City of Rancho Palos Verdes Operating Indicators by Function Last Ten Fiscal Years 2007 2008 2009 2010 2011 Function Administration Employee Resignations 4 8 4 9 5 Workers Compensation Claims 2 4 2 5 3 Liability Claims 14 16 13 13 14 Budget Adjustments 32 26 18 21 17 Business Licenses Issued 1,837 1,709 1,819 1,629 1,891 Web Site Page Views (1) 1.6 mil 701,004 3.8 mil 2.9 mil 2.8mil Public Safety Part I Crime Rates (per 10,000 population) 139 123 102 110 143 Public Works Solid Waste Diversion Rates (2) 56% 4.7lbs/person/day 4.1lbs/person/day 4.2lbs/person/day 4.2lbs/person/day Pavement Rating 82 DNA 85 85 85 Parks and Recreation Park Events 770 692 825 690 580 Class Meetings at Parks 2,647 2,772 2,708 2,398 2,313 Docent Led Nature Hikes 98 91 105 103 105 Community Development Building Permits Processed 1,244 1,692 1,404 1,243 1,432 Plan Checks 164 247 226 154 161 Municipal Code Violations Closed 162 216 339 138 371 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. 163 City of Rancho Palos Verdes Operating Indicators by Function Last Ten Fiscal Years 2012 2013 2014 2015 2016 Function Administration Employee Resignations 8 7 14 10 6 Workers Compensation Claims 3 3 1 3 2 Liability Claims 11 14 9 11 28 Budget Adjustments 11 24 15 15 18 Business Licenses Issued 1,294 1,868 1,997 2,134 2,012 Web Site Page Views (1) 3.Omil 3.1 mil 3.3mil 426,772 ` 403,704 Public Safety Part I Crime Rates (per 10,000 population) 131 149 107 134 Not available at this time Public Works Solid Waste Diversion Rates (2) 4.2lbs/person/day 2.87lbs/person/day 2.84lbs/person/day 3.15lbs/person/day 3.08lbs/person/day Pavement Rating 85 84 82 82 84 Parks and Recreation Park Events 582 765 631 639 810 Class Meetings at Parks 1,587 1,202 1,233 1,400 1,025 Docent Led Nature Hikes 104 121 109 103 94 Community Development Building Permits Processed 1,221 1,403 1,492 1,558 1,758 Plan Checks 161 268 264 255 289 Municipal Code Violations Closed 321 312 392 358 505 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. 164 City of Rancho Palos Verdes Capital Asset Statistics by Function Last Ten Fiscal Years 165 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Function Administration Computer Workstations 85 91 92 101 92 88 93 98 114 138 Public Safety (1) Public Works Street Miles 143 143 143 143 143 144 141 141 149 149 Traffic Signals 15 16 16 16 16 18 15 15 15 15 Parks and Recreation Parks 16 16 16 15 15 15 15 16 16 16 Community Development Vehicles Used for Inspections 3 5 5 5 5 5 5 4 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. 165 This page is intentionally blank. 166