Loading...
RPVCCA_CC_SR_2013_03_05_03_FY11-12_CAFRCITY OF RANCHO PALOS VERDES MEMORANDUM TO: FROM: DATE: SUBJECT: REVIEWED: HONORABLE MAYOR &CITY COUNCIL MEMB~S DENNIS McLEAN,DIRECTOR OF FINANCE & INFORMATION TECHNOLOGY MARCH 5,2013 FY11·12 COMPREHENSIVE ANNUAL FINANCIAL REPORT /":\n CAROLYN LEHR,CITY MANAGER c!..y-- Project Manager:Kathryn Downs,Deputy Director of Finance &Information Technology RECOMMENDATION Receive and file the FY11-12 Comprehensive Annual Financial Report (CAFR)of the City of Rancho Palos Verdes,and the Independent Auditors'Report on Internal Control. EXECUTIVE SUMMARY The City's FY11-12 CAFR is available to view on the City's website and at City Hall.Based upon their independent audit,White Nelson Diehl Evans,LLP have issued an unqualified (clean)opinion of the City's FY11-12 financial statements. The Unassigned General Fund Balance (internally referred to as General Fund Reserves) at June 30,2012 was $12,464,439;which is $1,089,098 more than expected,primarily due to expenditure savings.The overall General Fund Reserves variance is summarized as follows. 48,557 E:~p~n.ditures 18,645,794 17,460,898 1,184,896 Net transfers out 5,020,241 5,152,972 (132,731) Changes in Non-Spendable Fund Balance (Le.prepaid .and An""n("\/aavance) 3-1 FY11-12 Comprehensive Annual Financial Report March 5,2013 Page 2 of5 DISCUSSION Comprehensive Annual Financial Report (CAFR) A copy of the FY11-12 CAFR for the City of Rancho Palos Verdes has been attached to this staff report.Staff has compiled the information contained within the CAFR,including a Letter of Transmittal or written summary of the City's accomplishments during the past year,Management's Discussion and Analysis,the financial statements and statistical information of the City and its component unit (Joint Powers Improvement Authority)as of June 30,2012.A separate set of financial statements for the Improvement Authority has been provided with the March 5,2013 Improvement Authority agenda.A copy of the CAFR is currently available for review by the public in the reception area at City Hall and has been posted or)the Finance &Information Technology page on the City's website. Staff believes that the FY11-12 CAFR meets the standards and requirements established by the Governmental Accounting Standards Board (GAS B)for presentation of financial data,note disclosure and statistical information.The CAFR includes the audited financial statements and accompanying notes for the fiscal year ended June 30,2012.The scope of the audit examination is limited to Management's Discussion &Analysis,the financial statements and the accompanying notes,beginning on page 7 of the CAFR.Based upon their independent audit,White Nelson Diehl Evans,LLP have issued an unqualified (clean) opinion.The opinion letter is presented on page 3 of the CAFR. Management Letter &Audit Adjustments The auditors have not issued a Management Letter for FY11-12.A management letter is intended to call attention to matters involving internal controls of the City's accounting system,including suggestions for improving the internal controls and efficiency of the of the City's financial systems.Test procedures include discussions with Staff about the internal control system and the general operating affairs of the City for the past fiscal year,tests of the internal control system,and other audit procedures deemed necessary to render an opinion on the City's financial statements. In May 2006,the Auditing Standards Board of the American Institute of Certified Public Accountants (AICPA)issued Statement on Accounting Standards Number 112 (SAS No. 112),Communicating Internal Control Related Matters Identified inan Audit.SAS No.112 clarifies that it is not sufficient that the independent auditor determine that the financial statements under audit are,in fact,fairly presented in accordance with Generally Accepted Accounting Principles (GAAP).The financial statements are required to be the product of a financial reporting system that offers reasonable assurance that management is able to produce financial statements that comply with GAAP.SAS No.112 also makes it clear that material auditor-identified audit adjustments typically will require that a significant deficiency or material weakness be reported. Independent Auditors'Report on Internal Control The auditors expressed an opinion that the results of their tests identified no deficiencies in internal control over financial reporting considered to be material weaknesses.A copy of3-2 FY11-12 Comprehensive Annual Financial Report March 5,2013 Page 3 of5 this internal control opinion is attached (Attachment B). Report to Audit Committee The audit partner,Bob Callanan,conducted an exit interview with the City Council's 2012 Ad-Hoc Audit Subcommittee (Duhovic and Misetich)on February 22,2013.In accordance with generally accepted auditing standards,White Nelson Diehl Evans,LLP has issued a written report addressed to the Audit Committee. Single Audit A Single Audit of federal financial assistance is required when local governments spend more tha~$500,000 for projects funded with federal monies.The City received $318,798 of federal assistance during FY11-12,which was primarily a combination of Community Development Block Grant money for the Home Improvement grant and loan program and a Highway Safety Improvements Program grant for the Crestridge/Crenshaw Traffic Signal project.A Single Audit is not required to be performed for FY11-12. Actual General Fund Reserves as of June 30,2012 In conjunction with the adoption of the FY12-13 budget on June 19,2012,Staff estimated that ending General fund reserves would be $10,686,839 as of June 30,2012.Upon the conclusion of the fiscal year ended June 30,2012,the actual balance of General fund reserves was $12,464,439.A comparison of estimated vs.actual General fund reserves follows. l'i'f'f'~i¥g"'~"i':;j~'>*'~~i%%q;:;;?Jrff:~~~l')j'%f'@~;~~W'i'-il-::~~;rlW"~~,*,~fl:iw~~·l1t"'!>'iX'.·".i'lif.";B!&!i!11;J!'ak~~&~Pr~lii~~~!4M~~~4jj~r~k~~~~;~~~M~~:~~~'~!:l iOriginal Estimate of Reserves ;10,686,839 i I,-~.,....,,_.~._._,__,.•,.__.,_.~._.__._..~..."_'._••"•.•.••"._,"-.,-,',_,.....~."_,_.<.•._,.,~_._.._••_.'_•.,.~,,._,._,'.~_,.__.•.".•.''''-,'0,'"'".n','""..,....•_.,....,_,',".,.••..•..',_.,,",_,,_,_'_,'-.,',,.\ !Appropriations Continued from FY11-12 688,502 i i'TotafVarfance~'~~..1,689;0981 Revenue Discussion A comparison of actual and budgeted revenue in the General fund for FY11-12 is provided below. 3-3 FY11-12 Comprehensive Annual Financial Report March 5,2013 Page 4 of 5 I Property tax in lieu of vehicle license fees IProperty taxes .Property transfer tax I Property tax in lieu of sales tax Sales and use tax"."---_.....__..._-_. Transient occuE?ancy tax Franchise taxes Utility user taxes Business license tax I Golf tax $6,172,700 $6,075,623 $ 209,100 .272,802 3,599,400 .3,605,510 542,000 I 541,717 ,1..:-,6_2§,3..QQ.__1.ctj8,508 ' 3,226,000 .3,349,015 1,811,700 1,881,163 2,432,700 2,333,440 593,300 700,156 338,600 I 398,226 (97,07?} 63,702 6,110 (283): J1Z_6,792) 123,015 69,463 {99,260} 106,856 59,626 .'Planning,building &safety,and other permits i Fines and,forfeitures i Interest revenue i Other use of money and property {rents &leases}. I Charges for services Intergovernmental {grants &vehicle license fees) Other revenue 2,043,600 '1,806,147 223,900 159,488 50,800 i 46,421 : 517,100 I 708,052 i 66,800 I 145,924 . 15,000 6,365 {237,453} {64,412} (4,379}. 190,952 : 79,124 ! (8,635}. 38,000 Total actual revenues exceeded the budget by $48,557.A brief explanation of the reasons for significant variances of actual vs.estimated revenue during FY11-12 in the General fund follows: >-From FY10-11 to FY11-12 there was a substantial decrease in sales of wholesale bUilding materials,business to business heavy industry supplies,and used auto sales.Although these sectors only comprised about 13%of the City's sales tax revenue,the impact was the main contributor to an overall 5%decrease from FY10- 11 to FY11-12.However,the FY11-12 sales tax revenue budget was based on outside information that Los Angeles County sales tax was expected to grow by 7% in FY11-12. >-The growth of transient occupancy tax exceeded expectations and increased by 27%from FY10-11. >-The City's Senior Accountant generated additional business license tax revenue by requesting financial statements from major taxpayers and comparing them to the business license tax returns.The City's business license taD<is non-regulatory and self-reported.One of the benefits of adding the Senior Accountant to Staff was the capacity to perform additional procedures that had not been performed previously. >-Planning permit revenue decreased by about 5%from FY1 0-11,and plan checks decreased by about 13%from FY10-11.The FY11-12 budget was based on FY10- 11 activity.However,FY10-11 activity included some unusually large permit revenue receipts (e.g.St.John Fisher). >-Other use of money and property revenue exceeded the budget primarily due to the transfer of aged trust deposits to the General Fund after the original depositors could not be located and the City published deposit lists in the newspaper. 3-4 FY11-12 Comprehensive Annual Financial Report March 5,2013 Page 5 of 5 Expenditure Discussion Consistent with prior years'variances,actual expenditures were $1,184,896 less than budgeted appropriations.City Staff continued to conservatively manage expenditures, resulting in favorable variances in most every one of the 30 General fund budget programs. The most notable expenditure savings follow. ~The City received a General Liability insurance credit in the amount of $89,207 based upon prior actual claims. ~The Public Works budget programs were conservatively budgeted and actual costs resulted in permanent savings.The most notable savings came from Public Works Administration,Building Maintenance,and ParkslTrails/Open Space Maintenance. Co,nsidering the historical favorable trend in these programs,Staff will continue to analyze the expenditures during the 2013 budget process,and determine whether program budgets can be reduced to mitigate future variances. FY12-13 Budget Impact Staff continues to analyze FY11-12 variances and recent trends,and estimate the impact on FY12-13 results.As part of the Midyear Financial Report on this same agenda,Staff has proposed both revenue and expenditure adjustments that will result in a net increase to estimated General Fund Reserves. FISCAL IMPACT Estimated June 30,2013 General fund reserves have been revised to include the overall favorable FY11-12 variance of $1 ,089,098 (see Attachment A). Attachments: A -FY12-13 Statement of Estimated General Fund Reserves B -Independent Auditors'Report On Internal Control Over Financial Reporting And On Compliance And Other Matters Based On An Audit Of Financial Statements Performed In Accordance With Government Auditing Standards Comprehensive Annual Financial Report Fiscal Year Ended June,30,2012 3-5 FY12-13 Statement of Estimated General Fund Reserves Attachment A Ad'ustments: Open S ace Acquisition Costs Proposition A Exchange Continuing A propriations General Plan Housing Element U date Residential Street Project FY11-12 Final Results 9/4/2012 9/4/2012 9/18/2012 11/20/2012 11/20/2012 3/5/2013 688,502 1,089,098 Ending Reserves ::::};:::::JQi::l:a~;~k~.; (77,697 Net Transfers include both operating transfers from and to the General fund,Originally budgeted Net Transfers are adjusted when staff becomes aware that an additional 0 erating transfer is needed to satis an unantici ated shortfall within another fund;and that shortfall must be funded with General fund monies, Ending Reserves are the estimated 6/30/13 General fund reserves at the time of budget adoption,Adjusted Ending Reserves is a calculation based on -- subse uent ad'ustments to Be innin Reserves Revenues,Ex enditures and Net Transfers, 3-6 Attachment B INDEPENDENT AUDITORS'REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS To the Honorable Mayor And Members of City Council City of Rancho Palos Verdes Rancho Palos Verdes,California We have audited the financial statements of the governmental activities,the business-type activity, each major fund and the aggregate remaining fund information of the City of Rancho Palos Verdes, California as of and for the year ended June 30,2012 which collectively comprise the City's basic financial statements and have issued our report thereon dated February 7,2013.We conducted our audit in accordance with auditing standards generally accepted in the United States ofAmerica and the standards applicable to financial audits contained in Government Auditing Standards,issued by the Comptroller General of the United States. Internal Control Over Financial Reporting Management of the City is responsible for establishing and maintaining effective internal control over financial reporting.In planning and performing our audit,we considered the City's internal control over financial reporting as a basis for designing our auditing procedures for the purpose of expressing our opinions on the financial statements,but not for the purpose of expressing an opinion on the effectiveness of the City's internal control over financial reporting.Accordingly,we do not express an opinion on the effectiveness of the City's internal control over financial reporting. A deficiency in internal control exists when the design or operation of a control does not allow management or employees,in the normal course of performing their assigne,d functions,to prevent,or detect and correct misstatements on a timely basis.A material weakIiess is a deficiency,or a combination of deficiencies,in internal control such that there is a reasonable possibility that a material misstatement of the entity's financial statements will not be prevented,or detected and corrected on a timely basis. - 1- 2875 I\1ichelle Drive,Suite 300,hvine,CA 92606 -Tel:714.978.1300 -Fax:714.978.7893 OiJiceJ located in Orange and Jan Diego COtlfltie.r 3-7 Attachment B Internal Control Over Financial Reporting (Continued) Our consideration of internal control over financial reporting was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control over financial reporting that might be deficiencies,significant deficiencies or material weaknesses.We did not identify any deficiencies in internal control over financial reporting that we consider to be material weaknesses,as defined above. Compliance and Other Matters As part of obtaining reasonable assurance about whether the City of Rancho Palos Verdes,California's financial statements are free of material misstatement,we performed tests of its compliance with certain provisions of laws,regulations,contracts and grant agreements,noncompliance with which could have a direct and material effect on the determination of financial statement amounts.However, providing an opinion on compliance with those provisions was not an objective of our audit and, accordingly,we do not express such an opinion.The results of our tests disclosed no instances of noncompliance and other matters that are required to be reported under Government Auditing Standards. This report is intended solely for the information and use of City Council,management,and others within the City of Rancho Palos Verdes,California,and federal awarding agencies and pass-through entities and is not intended to be and should not be used by anyone other than these specified parties. February 7,2013 Irvine,California -2- 3-8 CITY OF RANCHO PALOS VERDES, CALIFORNIA COMPREHENSIVE ANNUAL FINANCIAL REPORT For the Year Ended June 30, 2012 Prepared By: Finance & Information Technology Department Dennis McLean, Director Kathryn Downs, Deputy Director INTRODUCTORY SECTION Breakfast with Santa CITY OF RANCHO PALOS VERDES COMPREHENSIVE ANNUAL FINANCIAL REPORT FOR THE YEAR ENDED JUNE 30, 2012 TABLE OF CONTENTS i INTRODUCTORY SECTION: Table of Contents i-iii Letter of Transmittal iv-ix Directory of City Officials x Organization Chart xi GFOA Certificate of Achievement for Excellence in Financial Reporting xii FINANCIAL SECTION: Independent Auditor’s Report 3 Management Discussion and Analysis 7 Government-Wide Financial Statements Statement of Net Assets 21 Statement of Activities 22 Fund Financial Statements Governmental Funds Balance Sheet 26 Reconciliation of the Balance Sheet of Governmental Funds to the Statement of Net Assets 29 Statement of Revenues, Expenditures, and Changes in Fund Balances 30 Reconciliation of the Statement of Revenues, Expenditures, and Changes in Fund Balances to the Statement of Activities 32 General Fund Statement of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual 33 Street Maintenance Special Revenue Fund Statement of Revenues, Expenditures, and Change in Fund Balance - Budget and Actual 35 Affordable Housing Special Revenue Fund Statement of Revenues, Expenditures, and Change in Fund Balance - Budget and Actual 36 Proprietary Funds Statement of Net Assets 37 Statement of Revenues, Expenses, and Changes in Fund Net Assets 38 Statement of Cash Flows 39 Fiduciary Funds Statement of Fiduciary Net Assets Statement of Changes in Fiduciary Net Assets 40 41 CITY OF RANCHO PALOS VERDES COMPREHENSIVE ANNUAL FINANCIAL REPORT FOR THE YEAR ENDED JUNE 30, 2012 TABLE OF CONTENTS ii Notes to the Financial Statements Supplementary Information 44 Major Fund Budgetary Comparison Schedules Schedule of Revenues, Expenditures, and Changes in Fund Balances - Budget and Actual Capital Improvements Capital Projects Fund 80 Non-Major Governmental Funds Combining Balance Sheet 84 Combining Statement of Revenues, Expenditures, and Changes in Fund Balances 90 Schedule of Revenues, Expenditures, and Changes in Fund Balances - Budget and Actual – Special Revenue Funds Air Quality Management Fund 96 Community Development Block Grant Fund 97 El Prado Fund 98 RDA Housing Set-Aside Proposition A Fund 99 100 Proposition C Fund 101 Measure R 102 Beautification Fund 103 Waste Reduction Fund 104 Public Safety Grants Fund 105 1972 Act Fund 106 1911 Act Fund 107 JPIA – Portuguese Bend Fund 108 Habitat Restoration Fund 109 Measure A Fund 110 Abalone Cove Sewer Assessment District 111 Dr. Allen and Charlotte Ginsburg Cultural Arts Building 112 Donor Restricted Contributions 113 Bikeways Fund 114 Environmental Excise Tax Fund 115 Quimby Fund 116 Schedule of Revenues, Expenditures, and Changes in Fund Balances - Budget and Actual – Debt Service Funds RDA Debt Service Fund 117 Schedule of Revenues, Expenditures, and Changes in Fund Balances - Budget and Actual – Capital Projects Funds RDA Abalone Cove Fund 118 CITY OF RANCHO PALOS VERDES COMPREHENSIVE ANNUAL FINANCIAL REPORT FOR THE YEAR ENDED JUNE 30, 2012 TABLE OF CONTENTS iii RDA Portuguese Bend Fund 119 Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual – Permanent Fund Subregion One Maintenance Fund 120 JPIA – Abalone Cove Fund 121 Internal Service Funds Combining Statement of Net Assets 124 Combining Statement of Revenues, Expenses, and Changes in Fund Net Assets 125 Combining Statement of Cash Flows 126 STATISTICAL SECTION (Unaudited) Financial Trends Net Assets by Component 130 Changes in Net Assets 131 Governmental Activities Tax Revenue By Source 133 Fund Balances of Governmental Funds – Before GASB 54 134 Fund Balances of Governmental Funds – After GASB 54 135 Changes in Fund Balances of Governmental Funds 136 General Governmental Tax Revenues By Source 137 Revenue Capacity Assessed Value and Estimated Actual Value of Taxable Property 138 Property Tax Rates - Direct and Overlapping Governments 139 Principal Property Tax Payers 140 Property Tax Levies and Collections 141 Debt Capacity Ratios of Outstanding Debt by Type 142 Direct and Overlapping Governmental Activities Debt 143 Legal Debt Margin Information 144 Demographic and Economic Information Demographic and Economic Statistics 145 Principal Sales Tax Payers 146 Principal Employers 147 Operating Information Full-time Equivalent City Government Employees by Function 148 Operating Indicators by Function 149 Capital Asset Statistics by Function 150 Cub Scout City Hall Tour CITY OF iv RANCHO PALOS VERDES February 7, 2013 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, 2012, is hereby submitted as mandated by both local ordinances and state statutes. These ordinances and statutes require that the City of Rancho Palos Verdes issue annually a report on its financial position and activity, and that an independent firm of certified public accountants audit this report. Responsibility for both the accuracy of the data, and the completeness and fairness of the presentation, including all disclosures, rests with the City. To the best of our knowledge and belief, the enclosed data is accurate in all material respects and is reported in a manner that presents fairly the financial position and results of operations of the various funds and component unit of the City of Rancho Palos Verdes. In addition, to the best of our knowledge, there are no untrue statements of material fact within the financial statements or omissions of material fact to cause the financial statements to be misleading. All disclosures necessary to enable the reader to gain an understanding of the City's financial activities have been included. The financial section of the CAFR includes management’s discussion and analysis (MD&A) of the financial activity. This letter of transmittal is designed to complement the MD&A and should be read in conjunction with it. The financial reporting entity (the government) includes all the funds of the primary government (i.e., the City of Rancho Palos Verdes as legally defined), as well as its component unit, the Rancho Palos Verdes Joint Powers Improvement Authority. A component unit is a legally separate entity for which the primary government is financially accountable. The City provides a broad range of services, including police protection, solid waste collection, construction and maintenance of streets and other infrastructure, planning and zoning activities, recreational activities, cultural events, and general administrative services. The City of Rancho Palos Verdes is a contract city, meaning that some of these services are provided by contract with other agencies (both public and private) and some services are delivered by the City's own employees. 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. The City currently has a 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 council, which consists of five council members, including the mayor and mayor pro-tem. The governing council is responsible, among other things, for passing ordinances, adopting the budget, appointing committees and hiring the city manager and the city attorney. The city manager is responsible for carrying out the policies and ordinances of the governing council, for overseeing the day-to-day operations of the government, and for appointing the heads of the government's departments. The council is elected on a non- partisan, at-large basis. Council members are elected to four-year staggered terms with two or three council members elected every two years. The council designates the mayor and mayor pro-tem for a one-year term. v MAJOR INITIATIVES The City's staff, following specific directives of the City Council and the City Manager, has been involved in a variety of projects throughout the year. These projects reflect the government's commitment to ensuring that its citizens are able to live and work in an enviable environment. Community Development ¾ The City together with the Palos Verdes Peninsula Land Conservancy continued management of the City's Natural Communities Conservation Plan (NCCP) Preserve, including obtaining City Council approval of Final Preserve Trails Plan for the entire Preserve, continuing several on-going habitat restoration projects, and several trail maintenance and improvement projects. ¾ Continued to approve the installation of various commercial antenna facilities for cellular telephones and personal communication systems on private property throughout the City. ¾ Continued to take steps to update the City’s General Plan by obtaining Planning Commission approval of the draft text for each of the General Plan Elements. Staff is currently presenting Draft General Plan Land Use Map Changes to the Planning Commission for review and approval. Staff anticipates that the Planning Commission will complete their review and recommend a draft of the General Plan Update to the City Council in early 2013. Staff also anticipates that the City Council will adopt the Updated General Plan in summer 2013. ¾ Continued to ensure that the various housing programs within the Housing Element are being implemented. Additionally, staff has released an RFP with the intent to secure a Housing Consultant to assist Staff in preparing the next mandatory Housing Element Update, which is due to the State Department of Housing and Community Development in October 2013. ¾ Implemented the approved Vision Plan, a coordinated master plan consisting of program, design and linkage concepts for land located within the coastal region of the City, with a) a $500,000 grant from the California Coastal Conservancy to complete the RPV portion of the California Coastal Trail; and b) with a $332,588 matching grant by the State Recreation and Parks Land and Water Conservation Fund for the Abalone Cove Shoreline Park Improvement project. ¾ Implemented the City’s Trails Network Plan by improving and maintaining trails within the Palos Verdes Nature Preserve pursuant to the Council adopted Preserve Trails Plan, and obtained access easements as part of private development projects for the construction of the Bronco Trail and the Salvation Army Trail as identified in the City’s Conceptual Trails Plan. Pursuant to a grant from the California Coastal Conservancy, the City has prepared plans and will begin construction on the City’s segment of the California Coastal Trail. Lastly, the City will begin an extensive overhaul of the Trails Network Plan for trails outside of the Preserve in fall 2012. Public outreach will be included. ¾ Prepared a Draft EIR for the Zone 2 Landslide Moratorium Ordinance Revisions. The Landslide Moratorium Ordinance currently includes an exception category for the 16 Monks plaintiffs’ lots, which grants them the ability to apply for Landslide Moratorium Exceptions (LMEs) to develop new homes on their lots. The Zone 2 Landslide Moratorium Ordinance Revisions will expand the exception category to allow the remaining 31 vacant, non- Monks lots in Zone 2 to also apply for LMEs. ¾ Took initial steps towards the creation of a Western Avenue Vision Plan by selecting a consultant, and identifying a work product that will serve as a visionary framework plan for a 2-mile stretch of Western Avenue. The Vision Plan is a multi-faceted project that will develop a corridor strategy that will help revitalize and redefine the identity of the Western Avenue corridor through aesthetic improvements, transit improvements and business incentives. Public Works ¾ Awarded $9.4M grant from California Department of Water Resources to construct the San Ramon Canyon project; which is necessary to reduce erosion in the Canyon, control the undermining of the Palos Verdes Drive East switchbacks, reduce flooding at Palos Verdes Drive South / 25th Street and protect a 200 home mobile home community against flooding. ¾ Completed emergency relocation of sanitary sewer collection system adjacent to San Ramon Canyon, which was necessary to alleviate risk of system failure due to the steady erosion of canyon walls in the direction of a buried vi pipeline. ¾ Awarded $130K grant for retrofitting storm drain catch basins to comply with water quality regulations mandating the elimination of trash deposits into Machado Lake. ¾ Completed construction of Via Canada Storm Drain Improvements Project which was necessary to eliminate flooding of homes on the Via Canada cul-de-sac due to undersized inlets. ¾ Completed design of Miraleste Plaza Storm Drain Improvements Project which is necessary to replace some of the oldest storm drains in the City with pipes designed and installed to City standards. ¾ Completed design of 2012 Storm Drain Lining and Rehabilitation Project which will mitigate the risk of failure of corrugated metal pipes on the city’s east side due to corrosion, soil piping and subsurface erosion. This trenchless technology will extend the life of existing pipes another 25 to 30 years without expensive and disruptive street trenching. ¾ Completed construction of the Palos Verdes Drive South Landslide Drainage Grading Project which rehabilitated an existing storm drain line that transports drainage runoff from a section of Palos Verdes Drive South in the Portuguese Bend Landslide area to the ocean. ¾ Completed resurfacing of various residential roadways in Zones 4 & 8 of the City. Improvements included cape seal, slurry seal, asphalt concrete, new and modified access ramps, and roadway signing and striping. ¾ Established a Neighborhood Permit Parking program in the Peninsula Verde Neighborhood. ¾ Initiated the FY 11-12 Annual Sidewalk Repair Program. ¾ Initiated and completed the Crenshaw at Crestridge Traffic Signal Upgrade Project. ¾ Completed design and construction of ADA improvements in the Vista Grande area. ¾ Completed 75% design for Ryan Park Southern Entrance Improvements and Parking Lot Expansion project to comply with the American with Disabilities Act, which will increase parking on site and improve safety for park users. ¾ Completed design for Ryan Park Restrooms Improvements & Accessibility Compliance Project. ¾ RPV California Coastal Trail (CCT) project is ready for award for construction. This project is mostly funded by a Prop 84 grant. ¾ Completed Construction for Eastview Park Playground and Accessibility Improvements project. ¾ Completed Hesse Park and City Hall Community Room drop ceiling retrofit projects for earthquake safety. ¾ Held the City’s first free document shredding events offered to RPV residents. A total of 760 vehicles brought 16.88 tons of material for shredding. Parks and Recreation ¾ Coordinated numerous annual special events and recreational opportunities for the community. Annual events included the Whale of a Day Celebration, Egg Hunt Eggstravaganza, July 4th Independence Day Celebration, Shakespeare by the Sea performance, International Coastal Cleanup Day, and Breakfast with Santa fundraiser. Recreational opportunities included the Paddle Tennis Tournament, Night at the Museum, and a new co-ed Adult Softball League. ¾ Partnered with various organizations and agencies to offer services and programs to the community. The City partnered with: • Palos Verdes Peninsula Unified School District to offer a week-long Writing by the Sea program for local students; vii • Palos Verdes Library District to offer monthly Little Critter Afternoon Tales story time fun for youngsters at Hesse Park; • City of Los Angeles to offer monthly pet adoption events; • County of Los Angeles and Society of California Veterinary Vaccine Care to offer low-cost pet vaccination and microchip services; and • Los Angeles Girl Scouts to create a new Night at the Museum Program centering on satisfying badge requirements. ¾ Coordinated approximately 70 onsite and offsite recreation activities for REACH, the City’s therapeutic program serving young adults with developmental disabilities. ¾ Coordinated public and private rentals and activities at various City facilities. These included community and private classes and parties, youth athletic league activities, film shoots, and non-profit events. ¾ Extended a contract with Trump National Golf Club for private rentals at Founders Park. ¾ Continued to provide oversight, support, and coordination of opportunities and programs with the Los Serenos de Point Vicente docent organization, including expanded public and private hikes and speaking engagements, and a new Fourth Grade Tour Program coordinated with the Palos Verdes Peninsula Unified School District. ¾ Completed a new exhibit at the Point Vicente Interpretive Center: Serena the Gray Whale, a 22-foot articulated skeleton of a juvenile Pacific gray whale. ¾ Provided enforcement and public education in the Palos Verdes Nature Preserve through a contract with the Mountains Recreation & Conservation Authority for ranger services, and provided interpretive activities including a Junior Ranger Program, Junior Ranger Summer Camp, ranger-led night hikes, and public appearances and talks. ¾ Implemented a 24/7 Ranger Hotline for public reporting of misuse of the Palos Verdes Nature Preserve. ¾ Pursued donations through the City’s Gifts for Parks program to assist with Recreation and Parks facilities, operations, and special events; including the Fourth of July Celebration, REACH program for young adults with developmental disabilities, and Point Vicente Interpretive Center exhibits and programs. ¾ Implemented a policy for the display of temporary banners promoting City-sponsored and co-sponsored events and recreational opportunities. The policy improves the uniformity and appearance of the banners displayed at City park sites. ¾ Following the acquisition of the approximately five-acre Rancho Palos Verdes Beach, coordinated a program of public education, signage, and enforcement of City ordinances for appropriate use of the beach. Administration ¾ RPVTV continued to expand programming offered on the City’s cable channel, RPVTV, including rebroadcasts of the City Council and Planning Commission meetings, productions of a wide variety of local interest programming and offering a Video Bulletin Board featuring local community events. ¾ Continued to work with a consultant to pursue promising grant opportunities for a variety of City projects, including public infrastructure and parks and open space. As of June 30, 2012, the City had received a total of $9,899,558 in competitive grant awards. ¾ Conducted an Emergency Preparedness Drill in October 2011 in conjunction with the statewide “Great California Shake Out” and was successful in obtaining a $24,000 grant to update the City’s 2004 Joint Hazard Mitigation Plan. ¾ Supported City Council development of positions and consensus on the annual League of California Cities Conference resolutions, which were voted on by the City Council’s voting delegate at the 2011 Conference in San Francisco in September 2011. ¾ Supported City Council development and review of City Council Rules of Procedure and City Council, Commission and Committee Protocol, which were adopted in May 2012. viii ¾ Continued to prepare and distribute the City’s quarterly newsletter—mailed to individual households and posted on the City’s website—to keep residents apprised of important City news, information and events. ¾ Continued to lead a regional response to an FAA proposal to change an airspace classification which would likely have had a negative impact on safety and the environment. Staff also continued to address issues with Torrance Airport helicopter routes, worked closely with the FAA to reduce the impact of Peninsula over-flights, and actively participated in the LAX Community Noise Roundtable to ensure protection of our residents. ¾ Assumed responsibility for the bi-monthly Border Issues Status Report from the Community Development Department, and continued to monitor a wide range of development proposals in surrounding cities to assess their potential effects upon Rancho Palos Verdes residents. ¾ Worked to quickly fill an unexpected vacancy in the City’s Human Resources Manager position with an experienced contract employee in order to maintain a high level of customer service to the City’s employees. ¾ Began negotiations leading to the development of a Memorandum of Understanding (MOU) with the Rancho Palos Verdes Employees’ Association. ¾ The Finance and Information Technology Department completed a Request for Proposal (RFP) process for the procurement of a Citywide Enterprise Resource Planning (ERP) system. The City is currently in contract negotiations and anticipates proposing a contract to the City Council by the end of 2012. ¾ A reorganization of the City’s website was completed during 2012 to improve accessibility and organization for both residents and businesses. ¾ City Staff developed analysis and design of pension reform enacted by the City Council effective September 23, 2011, which maximized employee contributions to pension costs and added a second tier of reduced benefits for new employees. ¾ Finance and Information Technology Staff successfully managed dissolution of the Redevelopment Agency, transition to the Successor Agency, and support of the new Oversight Board for the Successor Agency. The winding down of the former Redevelopment Agency consumes about 1/3 of a full-time employee and is expected to have a 2-3 year duration. ¾ Developed and substantially completed a major information technology upgrade that includes a new virtualized server and file storage network, implementation of a Microsoft enterprise-wise licensing arrangement for servers and desktops, and replacement of about 60 desktop computers. FINANCIAL INFORMATION Internal Control. The Finance and Information Technology 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, Redevelopment Agency Board, and Improvement Authority Commission. Activities of the General fund, Special Revenue funds, Capital Projects funds, Debt Service fund 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. ix Budget to Actual Comparison. The City experienced an overall $1.1 million favorable budget variance in the General fund for the fiscal year ended June 30, 2012. Favorable expenditure variances across most all 30 programs of the General Fund were the drivers of the overall favorable variance. Many of the favorable expenditure variances were permanent savings resulting from conservative budget practices and the continued careful management of resources during fiscal year 2011-12. Significant Financial Events. The former Redevelopment Agency was dissolved as of February 1, 2012, and the assets and liabilities were transferred to the Successor Agency. There were no other changes to financial policies that resulted in a significant impact on the June 30, 2012 financial statements. OTHER INFORMATION Independent Audit. The City requires an annual audit by independent certified public accountants. The accounting firm of White Nelson Diehl Evans LLP conducted this year's audit. The auditors' report on the government-wide financial statements and combining and individual fund statements and schedules is included in the financial section of this report. Single Audit. As a recipient of federal, state, and county financial assistance, the City is responsible for ensuring that an adequate internal control structure is in place to ensure compliance with applicable laws and regulations related to those programs. This internal control structure is subject to periodic evaluation by management. In years when over $500,000 is expended on Federal financial assistance programs, the City is required to undergo an annual single audit in conformity with the provisions of the Single Audit Act of 1984 and U.S. Office of Management and Budget Circular A-133, Audits of States, Local Governments, and Non-Profit Organizations. For the year ended June 30, 2012, $318,798 was expended on Federal financial assistance programs; and therefore a Single Audit is not required. GFOA Certificate of Achievement Award. The Government Finance Officer's Association of the United States and Canada (GFOA) oversees a prestigious national award program to recognize conformance with the highest standards of report preparation. In order to be awarded a Certificate of Achievement, a government unit must publish an easily readable and efficiently organized CAFR. This report must satisfy both Generally Accepted Accounting Principles and applicable legal requirements. The GFOA awarded a Certificate of Achievement for Excellence in Financial Reporting to the City of Rancho Palos Verdes for its CAFR for the fiscal year ended June 30, 2011. This was the 19th consecutive year that the City of Rancho Palos Verdes has achieved this prestigious award. A copy of the GFOA Certificate of Achievement is included later in the introductory section of this year's CAFR. A Certificate of Achievement is valid for a period of one year only. We believe our current CAFR continues to meet the Certificate of Achievement Program’s requirements and we are submitting it to the GFOA to determine its eligibility for another certificate. Acknowledgments. Completion of this report was the accomplishment by combined efforts of many individuals, especially Linda Gan-Vanderlinde, Senior Accountant, and Kathryn Downs, Deputy Director of Finance and Information Technology, who coordinated preparation of the report. I wish to acknowledge the assistance of our auditors, White Nelson Diehl Evans LLP and the contributions of other Finance and Information Technology Department staff: Ryan Mills, Matt Waters, Jane Lin, Selena Wright, Gayle Vanoverbeck, and Jayne Mahtani. I would also like to recognize the City Council for their continued leadership directing the City to achieve a sound fiscal position over the last several years. We look forward to maintaining this success in the future under the leadership of the City Council. Respectfully submitted, Dennis McLean Director of Finance & Information Technology x CITY OF RANCHO PALOS VERDES DIRECTORY OF CITY OFFICIALS JUNE 30, 2012 CITY COUNCIL Anthony M. Misetich, Mayor Brian Campbell, Mayor Pro-Tem Susan Brooks, Councilman Jerry V. Duhovic, Councilman James E. Knight, Councilman ADMINISTRATION AND DEPARTMENT HEADS City Manager ....................................................................................................................................... Carolyn Lehr Deputy City Manager ........................................................................................................................ Carolynn Petru City Clerk .......................................................................................................................................... Carla Morreale Director of Finance and Information Technology .............................................................................. Dennis McLean Community Development Director ............................................................................................................ Joel Rojas Director of Public Works .......................................................................................................................... Tom Odom Interim Director of Recreation and Parks .......................................................................................... Carolynn Petru City Attorney ................................................................................................................ Richards, Watson & Gershon CITY OF RANCHO PALOS VERDES ORGANIZATIONAL CHART CITIZENS OF RANCHO PALOS VERDES MAYOR AND CITY COUNCIL COMMISSIONS & COMMITTEES Planning Commission Traffic Safety Commission Finance Advisory Committee COMMISSIONS & COMMITTEES Emergency Preparedness Committee Oversight Committee for the Water Quality & Flood Protection Program CITY MANAGER Administration Personnel/Community Outreach Risk Management CITY ATTORNEY Richards, Watson & Gershon CITY CLERK Records Management Public Information Elections PUBLIC SAFETY L.A. County Sheriff L.A. County Fire Animal Control Emergency Preparedness PUBLIC WORKS Street Maintenance Refuse/City Engineering Park/Building Maintenance Capital Projects COMMUNITY DEVELOPMENT Planning/Zoning Building & Safety/Geology Code Enforcement View Restoration RECREATION & PARKS Park Facilities Staffing Point Vicente Interpretive Center Special Events REACH Program FINANCE & INFORMATION TECHNOLOGY Financial Reporting & Budget Accounts Payable/Receivable Payroll Purchasing Information Technology xi x i i Early Settlers FINANCIAL SECTION 1 View of Coastline 2 2875 Michelle Drive, Suite 300, Irvine, CA 92606 • Tel: 714.978.1300 • Fax: 714.978.7893 Offices located in Orange and San Diego Counties INDEPENDENT AUDITORS’ REPORT The Honorable Mayor and Members of the City Council of the City of Rancho Palos Verdes Rancho Palos Verdes, California We have audited the accompanying financial statements of the governmental activities, the business-type activity, each major fund, and the aggregate remaining fund information of the City of Rancho Palos Verdes, California, (the City) as of and for the year ended June 30, 2012, which collectively comprise the City’s basic financial statements as listed in the table of contents. These financial statements are the responsibility of the City of Rancho Palos Verdes’ management. Our responsibility is to express opinions on these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the City’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinions. In our opinion, the financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities, the business-type activity, each major fund, and the aggregate remaining fund information of the City of Rancho Palos Verdes, California, as of June 30, 2012, and the respective changes in financial position and cash flows, where applicable, thereof and the respective budgetary comparisons for the General, Street Maintenance Special Revenue and Affordable Housing Special Revenue major governmental funds for the year then ended in conformity with accounting principles generally accepted in the United States of America. As discussed in Note 14 to the basic financial statements, the Rancho Palos Verdes Redevelopment Agency, a blended component unit of the City, was dissolved effective February 1, 2012 as a result of legislation enacted by the State of California. 3 In accordance with Government Auditing Standards, we have also issued our report dated February 7, 2013, on our consideration of the City of Rancho Palos Verdes’ internal control over financial reporting and our tests of its compliance with certain provisions of laws, regulations, contracts and grant agreements and other matters. The purpose of that report is to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on the internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards and should be considered in assessing the results of our audit. The management’s discussion and analysis, identified as required supplementary information in the table of contents, is not a required part of the basic financial statements but is supplementary information required by the accounting principles generally accepted in the United States of America. This information is 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 management’s discussion and analysis 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 the audit of the basic financial statements. We do not express an opinion or provide any assurance on the management’s discussion and analysis because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance. Our audit was made for the purpose of forming opinions on the financial statements that collectively comprise the City’s basic financial statements as a whole. The combining statements and individual fund schedules are presented for purposes of additional analysis and are not a required part of the basic financial statements of the City. Such information is the responsibility of management and was derived from and relates directly to the underlying accounting and other records used to prepare the financial statements. The 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 financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the information is fairly stated in all material respects in relation to the basic financial statements taken as a whole. Our audit was conducted for the purpose of forming opinions on the basic financial statements of the City of Rancho Palos Verdes, California as a whole. The introductory section and statistical section are presented for purposes of additional analysis and are not a required part of the basic financial statements. Such information has 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. Irvine, California February 7, 2013 4 MANAGEMENT’S DISCUSSION & ANALYSIS 5 Junior Ranger Graduation 6 CITY OF RANCHO PALOS VERDES MANAGEMENT’S DISCUSSION AND ANALYSIS JUNE 30, 2012 See independent auditors’ report. 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, 2012. We encourage readers to consider the information presented here in conjunction with additional information that we have furnished in our Letter of Transmittal, which can be found on pages iv-ix of this report. Financial Highlights ¾ The assets of the City of Rancho Palos Verdes exceed its liabilities at the close of the Fiscal Year ended June 30, 2012, by $200,238,415 (Net Assets). Of this amount, $70,643,725 (Unrestricted Net Assets) may be used to meet the City’s ongoing obligations to its citizens and creditors. The remaining amount is invested in capital assets or is otherwise nonexpendable, and is therefore not available to meet the City’s obligations. ¾ The City’s Total Net Assets increased by $28,159,346. There is no trend for annual increases or decreases of Total Net Assets. Each year’s change is generally related to significant one-time events. The same is true for FY11-12. The State of California enacted law to dissolve redevelopment agencies effective January 31, 2012. As a result of the Rancho Palos Verdes Redevelopment Agency (RDA) dissolution, the former RDA is no longer a component unit of the City. Therefore, the City’s consolidated loan receivable of $19.3 million from the former RDA is now reported on the Statement of Net Assets, and the former RDA debt to the County of $5.5 million is no longer reported on the Statement of Net Assets for a combined impact of about $24.8 million. Additional information on the City’s dissolution of Redevelopment Agency can be found in Note # 14 on pages 70-77 of this report. In addition, transient occupancy tax of about $3.2 million was added to the Reserve for Future Capital Projects instead of being spent during FY11-12. ¾ As of June 30, 2012, the City’s Governmental Funds reported combined ending Fund Balances of $48,485,062, an increase of $22 million. Once again there is no trend for annual increases and decreases of governmental fund balances, and changes are generally attributable to significant one-time events. As of June 30, 2011, the Balance Sheet – Governmental Funds included funds of the former RDA and the consolidated loan payable to the City. The funds of the former RDA have been closed and that debt is no longer reflected on the Balance Sheet – Governmental Funds. And as mentioned above, the Reserve for Future Capital Projects increased by about $3.2 million. 7 CITY OF RANCHO PALOS VERDES MANAGEMENT’S DISCUSSION AND ANALYSIS JUNE 30, 2012 See independent auditors’ report. ¾ As of June 30, 2012, unassigned fund balance for the General Fund was $12,464,439 or 71% of General Fund expenditures. About $11.8 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 budgeted General Fund expenditures. ¾ As noted above, due to redevelopment dissolution, the former RDA is no longer a component unit of the City; and therefore, the City’s total debt decreased by nearly $6 million. Overview of the Financial Statements This discussion and analysis is intended to serve as an introduction to the City’s basic financial statements, which are comprised of three components: 1) Government-Wide Financial Statements; 2) Fund Financial Statements; and 3) Notes to the Financial Statements. This report also contains other supplementary information in addition to the basic financial statements themselves. Government-Wide Financial Statements. The Government-Wide Financial Statements are designed to provide readers with a broad overview of the City’s finances, in a manner similar to a private-sector business. The Statement of Net Assets presents information on all of the City’s assets and liabilities, with the difference between the two reported as Net Assets. Over time, increases or decreases in net assets may serve as a useful indicator of whether the financial position of the City of Rancho Palos Verdes is improving or deteriorating. The Statement of Activities presents information showing how the government’s net assets changed during the most recent Fiscal Year. All changes in net assets are reported as soon as the underlying event giving rise to the change occurs, regardless of the timing of related cash flows. Thus, revenues and expenses are reported in this statement for some items that will only result in cash flows in future fiscal periods (e.g. uncollected taxes and earned but unused vacation leave). Both the Government-Wide Financial Statements distinguish functions of the City that are principally supported by taxes and intergovernmental revenues (governmental activities) from other functions that are intended to recover all or a significant portion of their costs through user fees and charges (business-type activities). The governmental activities of the City include general government, public safety, public works, planning, building and safety, and recreation. The City’s business-type activities include only the Water Quality and Flood 8 CITY OF RANCHO PALOS VERDES MANAGEMENT’S DISCUSSION AND ANALYSIS JUNE 30, 2012 See independent auditors’ report. 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 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 30 individual Governmental Funds during the Fiscal Year ended June 30, 2012. Information is presented separately in the Governmental Fund Balance Sheet and in the Governmental Fund Statement of Revenues, Expenditures, and Changes in Fund Balances for the General Fund, the Street Maintenance Fund, the Affordable Housing Fund and the Capital Improvements Fund, all of which are considered to be major funds. Data from the other 26 Governmental Funds are combined into a single, 9 CITY OF RANCHO PALOS VERDES MANAGEMENT’S DISCUSSION AND ANALYSIS JUNE 30, 2012 See independent auditors’ report. 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 26- 36 of this report. Proprietary Funds. The City of Rancho Palos Verdes maintains two types of Proprietary Funds. Enterprise Funds are used to report the same functions presented as business-type activities in the Government-Wide Financial Statements. The City uses an Enterprise Fund to account for its Water Quality and Flood Protection Program. Internal Service Funds are an accounting device used to accumulate and allocate costs internally among the City’s various functions. The City uses Internal Service Funds to account for its fleet of vehicles, computer systems, furniture and equipment, Employee Benefits, and Civic Center building replacement/improvements. Because these services predominantly benefit the governmental function, they have been included within governmental activities in the Government-Wide Financial Statements. Proprietary Fund Financial Statements provide the same type of information as the Government-Wide Financial Statements, only in more detail. These statements can be found on pages 37-39 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 Assets and Statement of Changes in Fiduciary Net Assets. We exclude these activities from the City’s Government-Wide Financial Statement because the City cannot use these assets to finance its operations. 10 CITY OF RANCHO PALOS VERDES MANAGEMENT’S DISCUSSION AND ANALYSIS JUNE 30, 2012 See independent auditors’ 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 44-78 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 80-126 of this report. Government-wide Financial Analysis As noted earlier, net assets may serve over time as a useful indicator of a government’s financial position. In the case of the City of Rancho Palos Verdes, assets exceeded liabilities by $200,238,415 at June 30, 2012. By far, the largest portion of the City’s Net Assets (64%) reflects its investment in Capital Assets (e.g. Land, Infrastructure, Buildings, and Equipment). The City uses these Capital Assets to provide services to its citizens; consequently, these assets are not available for future spending. City of Rancho Palos Verdes Net Assets June 30, 2012 June 30, 2011 June 30, 2012 June 30, 2011 June 30, 2012 June 30, 2011 Current and other assets 73,574,121$ 51,956,043$ 3,714,840$ 3,497,659$ 77,288,961$ 55,453,702$ Capital assets 114,488,431 115,145,081 13,356,259 12,752,669 127,844,690 127,897,750 Total assets 188,062,552 167,101,124 17,071,099 16,250,328 205,133,651 183,351,452 Long-term liabilities outstanding 370,799 6,296,201 - - 370,799 6,296,201 Other liabilities 4,341,212 4,844,139 183,225 132,043 4,524,437 4,976,182 Total liabilities 4,712,011 11,140,340 183,225 132,043 4,895,236 11,272,383 Invested in capital assets 114,488,431 115,145,081 13,356,259 12,752,669 127,844,690 127,897,750 Restricted 1,750,000 1,750,000 - - 1,750,000 1,750,000 Unrestricted 67,112,110 39,065,703 3,531,615 3,365,616 70,643,725 42,431,319 Total net assets 183,350,541$ 155,960,784$ 16,887,874$ 16,118,285$ 200,238,415$ 172,079,069$ Governmental Business-type TotalActivitiesActivities An additional portion of the City’s Net Assets ($1,750,000 or about 1%) represents a nonexpendable resource that is subject to external restrictions. The remaining balance of Unrestricted Net Assets ($70,643,725 or about 35%) may be used to meet the government’s ongoing obligations to its citizens and creditors. Governmental Activities. Governmental Activities increased the City’s Net Assets by $4,041,815. 11 CITY OF RANCHO PALOS VERDES MANAGEMENT’S DISCUSSION AND ANALYSIS JUNE 30, 2012 See independent auditors’ report. City of Rancho Palos Verdes Changes in Net Assets June 30, 2012 June 30, 2011 June 30, 2012 June 30, 2011 June 30, 2012 June 30, 2011 Program revenues: Charges for services 3,770,567$ 3,707,267$ 1,330,074$ 1,324,883$ 5,100,641$ 5,032,150$ Operating contributions and grants 3,627,662 3,719,283 - - 3,627,662 3,719,283 Capital contributions and grants 139,339 5,675 - - 139,339 5,675 General revenues: Property taxes 11,480,461 11,854,171 - - 11,480,461 11,854,171 Other taxes 9,686,419 9,234,107 - - 9,686,419 9,234,107 Other 655,329 588,959 - - 655,329 588,959 Total revenues 29,359,777 29,109,462 1,330,074 1,324,883 30,689,851 30,434,345 Expenses: Administration 5,906,436 5,996,735 - - 5,906,436 5,996,735 Public safety 4,177,926 4,334,961 - - 4,177,926 4,334,961 Public works 11,202,446 10,389,064 - - 11,202,446 10,389,064 Parks and recreation 1,489,940 1,390,604 - - 1,489,940 1,390,604 Community development 2,432,175 2,622,293 - - 2,432,175 2,622,293 Non-departmental - - - - - - Interest on long-term debt 109,039 260,045 - - 109,039 260,045 Water Quality Flood Protection - - 560,485 489,524 560,485 489,524 Total expenses 25,317,962 24,993,702 560,485 489,524 25,878,447 25,483,226 Increase in net assets 4,041,815 4,115,760 769,589 835,359 4,811,404 4,951,119 Extraordinary gain 23,347,942 - - - 23,347,942 - Increase in net assets 27,389,757 4,115,760 769,589 835,359 28,159,345 4,951,119 Net assets - beginning of fiscal year 155,960,784 151,845,024 16,118,285 15,282,926 172,079,069 167,127,950 Net assets - end of fiscal year 183,350,541$ 155,960,784$ 16,887,874$ 16,118,285$ 200,238,414$ 172,079,069$ Total Governmental Activities Business-type Activities As noted previously, the primary driver behind the increase was dissolution of the former RDA. As the former RDA is no longer a component unit of the City, its debt to the City of $19.3 million and its debt to the County of $5.5 million were removed from the City’s Government-Wide Financial Statements. In addition, about $3.2 million of FY11-12 transient occupancy tax revenue was not spent, but added to a Reserve for Future Capital Projects. Revenues by Source – Governmental Activities 12 CITY OF RANCHO PALOS VERDES MANAGEMENT’S DISCUSSION AND ANALYSIS JUNE 30, 2012 See independent auditors’ report. Business-Type Activities. Business-type activities increased the City’s net assets by $769,589 primarily due to collection of storm drain user fees that will be utilized during FY12-13 for projects continued from FY11-12. Financial Analysis of Governmental Funds As of the end of the current Fiscal Year, the City’s Governmental Funds reported combined ending Fund Balances of $48,485,062, an increase of $22 million in comparison with the prior year. Approximately 75% of the combined ending Fund Balances (about $36.2 million) constitutes spendable fund balance. The combined spendable fund balance includes the CDBG and Measure A special revenue negative unassigned fund deficit of $108,132. The remainder of the combined ending Fund Balances is either nonspendable due to outside legal restrictions ($1.82 million), or nonspendable in form (primarily for long-term principal advances to other funds of $9.7 million, and prepaid items of $0.7 million). The General Fund is the chief operating fund of the City of Rancho Palos Verdes. At the end of the current fiscal year, the unassigned fund balance of the General Fund was $12,464,439, while total Fund Balance reached $19,957,249. As a measure of the General Fund’s liquidity, it may be useful to compare both Unassigned Fund Balance and Total Fund Balance to total fund uses (expenditures and transfers out). Unassigned Fund Balance represents 55% of total General Fund uses, while total Fund Balance represents 88% of that same amount. During Fiscal Year 11-12, the fund balance of the City’s General Fund increased by $1,056,987. This was primarily related to the favorable expenditure variances totaling $1.2 million. The most notable of these favorable variances was attributable to park and building maintenance savings of $0.2 million. The remaining expenditure savings included about $60,000 for general liability insurance in the City Manager’s budget program, about $54,000 for miscellaneous inspection services in the Public Works Administration program, and other insignificant amounts (less than $75,000 or 0.4% of the General Fund expenditure budget) spread among a large number of the General Fund’s 30 budget programs. The Street Maintenance Fund Balance increased by $141,751, primarily due to permanent expenditure savings. The Affordable Housing Fund Balance increased by $1,720,670, primarily due to the transfer of housing assets from the former RDA as part of redevelopment dissolution. 13 CITY OF RANCHO PALOS VERDES MANAGEMENT’S DISCUSSION AND ANALYSIS JUNE 30, 2012 See independent auditors’ report. The Capital Improvement Projects (CIP) Fund had an ending fund balance of $15,406,941. Of this amount, $4.0 million is held for street improvement projects continued from FY11-12 to FY12-13, $1.2 million is held for park improvement projects continued from FY11-12 to FY12-13, and the remaining $10.2 million is held in reserve for emergency projects and future projects as directed by City Council policy. 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 Assets of the Enterprise Fund at the end of the year amounted to $3,531,615. Unrestricted Net Assets of the Internal Service Funds at the end of the year amounted to $3,617,838. The total growth in Proprietary Fund type net assets was $345,877 or about 5% of unrestricted Net Assets. General Fund Budgetary Highlights The General Fund revenue budget was increased about $424,000 with the Midyear Financial review primarily due to a revised estimate of transient occupancy tax. The difference between original budgeted expenditures and the final amended budget was a decrease of $164,271; and is briefly summarized as follows: ¾ A decrease of $688,502 was attributable to appropriations continued to FY12-13. ¾ An increase of $623,096 was attributable to appropriations continued from FY10-11. ¾ Other immaterial adjustments resulted in net decreases of approximately $99,000. The City Council authorized additional General Fund transfers of $312,588 to fund improvements to Abalone Cove Shoreline Park and $396,000 to fund the Reserve for Future Capital Projects resulting from the revised estimate of transient occupancy tax revenue. Capital Asset and Debt Administration Capital Assets. The City’s investment in Capital Assets for its governmental activities as of June 30, 2012, amounts to $114,488,431 (net of accumulated depreciation). This investment in capital assets includes land, buildings, park improvements, roadways, sewer, storm drains, vehicles, computer equipment, 14 CITY OF RANCHO PALOS VERDES MANAGEMENT’S DISCUSSION AND ANALYSIS JUNE 30, 2012 See independent auditors’ report. furniture, other equipment, and construction in progress. During the current fiscal year, the City’s investment in governmental capital assets decreased by about $656,650 or about 0.57%. Major capital asset events during the current Fiscal Year included the following: ¾ Depreciation of $3.5 million was recorded for the City’s Capital Assets. ¾ An arterial street repaving project was completed with a total cost of about $2.4 million. ¾ The Ryan Park Ball Field improvements of about $275,000 were completed. ¾ Sewer line relocation adjacent to the Palos Verdes Drive East switchbacks was completed for a cost of about $210,000. The Capital Assets (net of accumulated depreciation) for Business-type activities as of June 30, 2012 was $13,356,259. City of Rancho Palos Verdes Capital Assets (net of depreciation) June 30, 2012 June 30, 2011 June 30, 2012 June 30, 2011 June 30, 2012 June 30, 2011 Capital assets not being depreciated Land 39,881,986$ 40,048,288$ 1,408,493$ 1,408,493$ 41,290,479$ 41,456,781$ Construction in progress 430,058 628,308 1,516,924 678,980 1,946,982 1,307,288 Total capital assets not being depreciated 40,312,044 40,676,596 2,925,417 2,087,473 43,237,461 42,764,069 Capital assets being depreciated, net Buildings 6,953,126 7,156,296 - - 6,953,126 7,156,296 Vehicles 58,405 94,656 - - 58,405 94,656 Computer equipment 117,773 35,181 - - 117,773 35,181 Furniture, fixtures and equipment 78,677 123,861 - 1,181 78,677 125,042 Infrastructure Roadway system 46,448,299 46,304,199 - - 46,448,299 46,304,199 Sewer system 8,198,687 8,447,475 - - 8,198,687 8,447,475 Storm drain system 9,930,462 10,180,941 10,430,842 10,664,015 20,361,304 20,844,956 Park system 2,390,958 2,125,876 - - 2,390,958 2,125,876 Total capital assets being depreciated, net 74,176,387 74,468,485 10,430,842 10,665,196 84,607,229 85,133,681 Capital Assets, net 114,488,431$ 115,145,081$ 13,356,259$ 12,752,669$ 127,844,690$ 127,897,750$ Total Governmental Activities Business-type Activities Additional information on the City’s Capital Assets can be found in Note # 4 on pages 56-57 of this report. Long-term debt. At the end of the current Fiscal Year, the City of Rancho Palos Verdes had total debt outstanding of $370,798 for Employee Compensated Absences. 15 CITY OF RANCHO PALOS VERDES MANAGEMENT’S DISCUSSION AND ANALYSIS JUNE 30, 2012 See independent auditors’ report. City of Rancho Palos Verdes Outstanding Debt June 30, 2012 June 30, 2011 Employee compensated absences 370,798 332,600 Total 370,798$ 332,600$ Governmental Activities The City’s total debt increased by $38,198 (11.5%) during the current Fiscal Year, due to additional accrued time off not 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 $1,420,256,000. Additional information on the City’s long-term debt can be found in Note # 6 on pages 58-59 of this report. Economic Factors and Next Year’s Budgets and Rates ¾ Property tax revenue accounts for about 38 percent of Government-Wide revenues. Local property values remain strong, and the City’s property assessments grew by 2.3% for FY12-13. ¾ The Consumer Price Index for Los Angeles County increased by 1.6% for the 12 months ended June 2012. The City’s FY12-13 expenditure budget increased by 2.0% when compared to FY11-12. Revenue in excess of budgeted expenditures (about $4.9 million) has been programmed for capital improvement projects. Requests for Information This Financial Report is designed to provide a general overview of the financial position of the City of Rancho Palos Verdes for all those with an interest in the government’s finances. Questions concerning any of the information provided in this report, or requests for additional financial information, should be addressed to the Finance and Information Technology Department at 30940 Hawthorne Boulevard, Rancho Palos Verdes, CA 90275 or finance@rpv.com. 16 BASIC FINANCIAL STATEMENTS 17 Marilyn Ryan Sunset Park Dedication 18 GOVERNMENT-WIDE STATEMENTS 19 Story Time with Santa 20 CITY OF RANCHO PALOS VERDES STATEMENT OF NET ASSETS June 30, 2012 Governmental Business-type Activities Activity Total ASSETS: Cash and investments 43,767,067$ 3,640,715$ 47,407,782$ Receivables: Taxes 1,391,347 - 1,391,347 Interest 30,933 2,663 33,596 Notes 7,308,481 - 7,308,481 Other 745,230 71,462 816,692 Inventory 34,058 - 34,058 Prepaid costs 1,007,946 - 1,007,946 Receivable from Successor Agency 19,289,059 - 19,289,059 Capital assets, not being depreciated: Land 39,881,992 1,408,493 41,290,485 Construction in progress 430,056 1,516,924 1,946,980 Capital assets, being depreciated, net: Property and equipment 254,851 - 254,851 Buildings and improvements 6,953,126 - 6,953,126 Infrastructure 66,968,406 10,430,842 77,399,248 TOTAL ASSETS 188,062,552 17,071,099 205,133,651 LIABILITIES: Accounts payable and accrued liabilities 3,279,855 176,451 3,456,306 Retentions payable 212,362 6,774 219,136 Unearned revenue 100,830 - 100,830 Deposits payable 748,166 - 748,166 Long-term liabilities: Due within one year 260,434 - 260,434 Due beyond one year 110,365 - 110,365 TOTAL LIABILITIES 4,712,011 183,225 4,895,237 NET ASSETS: Invested in capital assets 114,488,431 13,356,259 127,844,690 Restricted for: Community development: Nonexpendable 1,750,000 - 1,750,000 Unrestricted 67,112,110 3,531,615 70,643,725 TOTAL NET ASSETS 183,350,541$ 16,887,874$ 200,238,415$ See independent auditors' report and notes to financial statements. 21 CITY OF RANCHO PALOS VERDES STATEMENT OF ACTIVITIES For the year ended June 30, 2012 Operating Capital Charges for Grants and Grants and Expenses Services Contributions Contributions Governmental Activities: Administration 5,906,436$ 746,672$ 48,135$ -$ Public safety 4,177,926 193,568 100,000 - Public works 11,202,446 683,643 3,272,927 139,339 Parks and recreation 1,489,940 502,586 32,316 - Community development 2,432,175 1,644,098 174,284 - Interest on long-term debt 109,039 - - - Total governmental activities 25,317,962 3,770,567 3,627,662 139,339 Business-type Activity: Water Protection Flood Control (758,624) 1,319,109 - - Total Primary Government 24,559,338$ 5,089,676$ 3,627,662$ 139,339$ 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 Extraordinary item: Gain on dissolution of Redevelopment Agency (Note 14) Change in net assets Net assets - beginning of year, as restated Net assets - end of year See independent auditors' report and notes to financial statements. Program Revenues Functions/programs 22 Net (Expense) Revenue and Changes in Net Assets Governmental Business-type Activities Activity Total (5,111,629)$ -$ (5,111,629)$ (3,884,358) - (3,884,358) (7,106,537) - (7,106,537) (955,038) - (955,038) (613,793) - (613,793) (109,039) - (109,039) (17,780,394) - (17,780,394) - 758,624 758,624 (17,780,394) 758,624 (17,021,770) 11,480,461 - 11,480,461 3,349,015 - 3,349,015 1,448,508 - 1,448,508 1,881,163 - 1,881,163 2,333,440 - 2,333,440 674,293 - 674,293 603,776 10,965 614,741 51,553 - 51,553 21,822,209 10,965 21,833,174 23,347,942 - 23,347,942 27,389,757 769,589 28,159,346 155,960,784 16,118,285 172,079,069 183,350,541$ 16,887,874$ 200,238,415$ 23 City Hall 24 FUND FINANCIAL STATEMENTS 25 CITY OF RANCHO PALOS VERDES BALANCE SHEET - GOVERNMENTAL FUNDS June 30, 2012 Special Revenue Street General Maintenance Cash and investments 13,548,910$ 1,487,816$ Receivables: Taxes 1,214,207 122,665 Interest 12,141 573 Notes - - Other 429,147 3,590 Due from other funds 270,179 - Inventory 34,058 - Prepaid items 715,974 - Receivable from Successor Agency 19,289,059 - TOTAL ASSETS 35,513,676$ 1,614,644$ LIABILITIES: Accounts payable and accrued liabilities 2,066,837$ 551,475$ Due to other funds - - Retentions payable 13,272 5,622 Deferred revenue 12,728,151 651 Deposits payable 748,166 - TOTAL LIABILITIES 15,556,426 557,748 FUND BALANCES (DEFICIT): Non-Spendable Endowment principal - - Reimbursement settlement agreemen - - Prepaid items 715,974 - Receivable from Successor Agency 6,742,778 - Long term receivables - - Habitat restoration - - Inventory 34,058 - Restricted - 1,056,896 Assigned - - Unassigned 12,464,439 - TOTAL FUND BALANCES (DEFICIT)19,957,249 1,056,896 TOTAL LIABILITIES AND FUND BALANCES 35,513,675$ 1,614,644$ See independent auditors' report and notes to financial statements ASSETS LIABILITIES AND FUND BALANCES 26 Special Capital Revenue Projects Other Total Affordable Capital Governmental Governmental Housing Improvements Funds Funds 500,826$ 15,950,665$ 8,750,890$ 40,239,107$ - - 54,475 1,391,347 365 8,726 6,560 28,365 6,829,457 - 479,024 7,308,481 - 29,204 282,208 744,149 - - - 270,179 - - - 34,058 899 - - 716,873 - - - 19,289,059 7,331,547$ 15,988,595$ 9,573,157$ 70,021,618$ 901$ 357,957$ 216,355 3,193,525$ - - 151,665 151,665 193,468 - 212,362 3,839,457 30,229 632,350 17,230,838 - - - 748,166 3,840,358 581,654 1,000,370 21,536,556 - - 750,000 750,000 - - 1,000,000 1,000,000 899 - - 716,873 - - - 6,742,778 2,990,000 - - 2,990,000 - - 74,696 74,696 - - - 34,058 500,290 - 6,856,223 8,413,409 - 15,406,941 - 15,406,941 - - (108,132) 12,356,307 3,491,189 15,406,941 8,572,787 48,485,062 7,331,547$ 15,988,595$ 9,573,157$ 70,021,618$ 27 Egg Hunt 28 CITY OF RANCHO PALOS VERDES RECONCILIATION OF THE GOVERNMENTAL FUNDS BALANCE SHEET TO THE STATEMENT OF NET ASSETS June 30, 2012 Fund balances - total governmental funds 48,485,062$ Amounts reported for governmental activities in the Statement of Net Assets 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.114,233,580 Interest accrued on the receivable from Successor Agency in the General Fund is not available as current resource and, therefore, is recorded as deferred revenue and added to the balance of the advance. The Statement of Net Assets reports on the full accrual basis and does not defer currently unavailable revenues.12,546,284 Intergovernmental revenues earned, but not available, are deferred in the fund financial statements. The revenue is not deferred on the Statement of Activities.265,244 Long-term notes receivable are not current available resources and, therefore, do not affect the governmental fund balance.4,318,481 Long-term liabilities are not due and payable in the current period and, therefore, are not reported in the governmental funds.(370,799) Internal service funds are used by management to charge the costs of certain activities, including equipment and building replacement and employee benefits, to individual funds. The assets and liabilities of the internal service funds are included in the Statement of Net Assets.3,872,689 Net assets of governmental activities 183,350,541$ See independent auditors' report and notes to financial statements. 29 CITY OF RANCHO PALOS VERDES STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES - GOVERNMENTAL FUNDS For the year ended June 30, 2012 Special Revenue Street General Maintenance REVENUES: Taxes 20,606,160$ -$ Licenses and permits 1,806,147 - Fines and forfeitures 159,488 - Use of money and property 754,473 15,862 Charges for services 145,924 2,900 Revenue from other agencies 6,365 1,206,626 Other revenues 192,300 - TOTAL REVENUES 23,670,857 1,225,388 EXPENDITURES: Current: Administration 5,624,776 - Public safety 4,177,926 - Public works 3,723,884 1,976,064 Parks and recreation 1,454,414 - Community development 2,479,898 - Capital outlay - - Debt service: Principal - - Interest and fiscal charges - - TOTAL EXPENDITURES 17,460,898 1,976,064 EXCESS (DEFICIENCY) OF REVENUES OVER (UNDER) EXPENDITURES 6,209,959 (750,676) OTHER FINANCING SOURCES (USES): Transfers in 540,000 945,088 Transfers out (5,692,972) (52,661) TOTAL OTHER FINANCING SOURCES (USES)(5,152,972) 892,427 EXTRAORDINARY ITEM: Gain on dissolution of Redevelopment Agency (Note 14)- - NET CHANGE IN FUND BALANCES 1,056,987 141,751 FUND BALANCES (DEFICIT) - BEGINNING OF YEAR 18,900,262 915,145 FUND BALANCES (DEFICIT) - END OF YEAR 19,957,249$ 1,056,896$ See independent auditors' report and notes to financial statements 30 Special Capital Revenue Projects Other Total Affordable Capital Governmental Governmental Housing Improvements Funds Funds -$ -$ 1,260,876$ 21,867,036$ - - - 1,806,147 - - - 159,488 697 36,780 542,083 1,349,895 - - - 148,824 - 139,340 2,069,026 3,421,357 - - 66,341 258,641 697 176,120 3,938,326 29,011,389 - - 100,940 5,725,716 - - - 4,177,926 - - 1,915,836 7,615,784 - - 25,000 1,479,414 3,659 - 288 2,483,845 - 2,939,431 215,539 3,154,970 - - 463,698 463,698 - - 497,934 497,934 3,659 2,939,431 3,219,235 25,599,287 (2,962) (2,763,311) 719,092 3,412,103 - 6,520,472 220,700 8,226,260 - - (2,110,110) (7,855,743) - 6,520,472 (1,889,410) 370,517 1,723,632 - 16,516,488 18,240,119 1,720,670 3,757,161 15,346,170 22,022,739 1,770,519 11,649,780 (6,773,383) 26,462,323 3,491,189$ 15,406,941$ 8,572,787$ 48,485,062$ 31 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, 2012 Net change in fund balances - total governmental funds 22,022,739$ 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 reconciled as follows: Cost of assets capitalized 2,864,926 Depreciation expense (3,356,433) Unpaid accrued interest income is deferred in the governmental funds since it is not available. This income is accrued in the Statement of Activities.819,586 Intergovernmental revenues earned, but not available are deferred in the fund financial statements.(91,861) Interest expenditures are recognized when due, and therefore, interest payable is not recorded in the governmental funds. This amount represents the net change in interest payable.20,086 Increases in long-term notes receivable use current financial resources and are included in the expenditures of governmental funds. Repayments of long-term notes receivables 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.1,104 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.(38,199) Principal payments on debt are recorded as expenditures in the funds. The expenditure is not recognized in the Statement of Activities since it reduces the liability reported on the Statement of Net Assets. Principal payments consisted of the following: Redevelopment Agency tax increment bond 100,000 Redevelopment Agency deferred interest payable 363,698 Internal service funds are used by management to charge the costs of certain activities, including equipment and building replacement and employee benefits, to individual funds. The net revenues/(expenses) of the internal service funds (excluding transfers and interest income) are reported with governmental activities. (423,712) The Rancho Palos Verdes Redevelopment Agency was dissolved as of February 1, 2012 pursuant to Assembly Bills 1x 26 and 1484. Capital assets and long-term liabilities of the dissolved Agency were transferred to the Successor Agency Private-Purpose Trust Fund: Transfer of land (166,296) Transfer of note receivable (225,785) Transfer of tax increment bonds 5,065,000 Transfer of deferred interest payable 434,904 Change in net assets of governmental activities 27,389,757$ See independent auditors' report and notes to financial statements. 32 CITY OF RANCHO PALOS VERDES STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL GENERAL FUND For the year ended June 30, 2012 Variance with Final Budget Positive Original Final Actual (Negative) REVENUES: Taxes 20,058,800$ 20,550,800$ 20,606,160$ 55,360$ Licenses and permits 2,043,600 2,043,600 1,806,147 (237,453) Fines and forfeitures 154,900 223,900 159,488 (64,412) Use of money and property 567,900 567,900 754,473 186,573 Charges for services 66,800 66,800 145,924 79,124 Revenue from other agencies 151,900 15,000 6,365 (8,635) Other revenues 154,300 154,300 192,300 38,000 TOTAL REVENUES 23,198,200 23,622,300 23,670,857 48,557 EXPENDITURES: Administration City council 136,500 136,500 133,698 2,802 City manager 1,671,300 1,767,195 1,656,174 111,021 City attorney 1,065,000 1,065,000 1,057,102 7,898 Community outreach 208,800 217,300 212,156 5,144 City clerk 492,550 524,750 503,877 20,873 Personnel 251,350 293,450 294,298 (848) Finance 1,375,300 1,351,388 1,341,972 9,416 Information technology - Data 599,200 411,500 356,281 55,219 Information technology - Voice 93,800 93,800 69,218 24,582 Total Administration 5,893,800 5,860,883 5,624,776 236,107 Public safety Sheriff 4,015,000 4,015,000 3,957,051 57,949 Special programs 71,500 89,500 24,513 64,987 Animal control 120,250 130,250 55,862 74,388 Emergency preparedness 148,300 141,948 140,500 1,448 Total Public Safety 4,355,050 4,376,698 4,177,926 198,772 Public Works Public works administration 2,055,000 2,095,408 1,974,634 120,774 Traffic management 154,000 169,700 139,712 29,988 Storm water quality 180,300 180,300 92,945 87,355 Building maintenance 620,800 608,800 491,226 117,574 Park/Trail/Open Space maintenance 1,130,250 1,167,270 1,012,060 155,210 Sewer maintenance 63,000 63,375 13,307 50,068 Total Public Works 4,203,350 4,284,853 3,723,884 560,969 Budgeted Amounts 33 CITY OF RANCHO PALOS VERDES STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL (continued) GENERAL FUND For the year ended June 30, 2012 Variance with Final Budget Positive Original Final Actual (Negative) Parks and Recreation Recreation administration 779,300 593,700 555,664 38,036 Recreation facilities 441,190 454,490 448,980 5,510 Special events 52,200 52,539 45,025 7,514 PVIC 383,375 382,275 356,709 25,566 REACH 53,800 53,700 48,036 5,664 Total Parks and Recreation 1,709,865 1,536,704 1,454,414 82,290 Community Development Planning services 1,296,800 1,303,070 1,302,440 630 Building & safety 653,200 586,806 574,613 12,193 Code enforcement 208,500 207,000 187,237 19,763 View restoration/preservation 339,500 337,400 324,520 12,880 NCCP - 2,380 2,380 - Geology 150,000 150,000 88,708 61,292 Total Community Development 2,648,000 2,586,656 2,479,898 106,758 TOTAL EXPENDITURES 18,810,065 18,645,794 17,460,898 1,184,897 EXCESS (DEFICIENCY) OF REVENUES OVER (UNDER) EXPENDITURES 4,388,135 4,976,506 6,209,959 1,233,453 OTHER FINANCING SOURCES (USES): Transfers in 452,000 552,000 540,000 (12,000) Transfers out (4,839,253) (5,572,241) (5,692,972) (120,731) TOTAL OTHER FINANCING SOURCES (USES)(4,387,253) (5,020,241) (5,152,972) (132,731) NET CHANGE IN FUND BALANCE 882 (43,735) 1,056,987 1,100,722 FUND BALANCE - BEGINNING OF YEAR 18,900,262 18,900,262 18,900,262 - FUND BALANCE - END OF YEAR 18,901,144$ 18,856,527$ 19,957,249$ 1,100,722$ See independent auditors' report and notes to financial statements. Budgeted Amounts 34 CITY OF RANCHO PALOS VERDES STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL STREET MAINTENANCE SPECIAL REVENUE FUND For the year ended June 30, 2012 Variance with Final Budget Positive Original Final Actual (Negative) REVENUES: Use of money and property 17,010$ 17,010$ 15,862$ (1,148)$ Charges for services 14,000 14,000 2,900 (11,100) Revenue from other agencies 1,129,800 1,129,800 1,206,626 76,826 TOTAL REVENUES 1,160,810 1,160,810 1,225,388 64,578 EXPENDITURES: Public Works Street landscape maintenance 1,602,279 1,675,299 1,376,572 298,727 Traffic signal maintenance 202,000 112,000 73,767 38,233 Portuguese Bend road maintenance 516,400 566,400 525,725 40,675 TOTAL EXPENDITURES 2,320,679 2,353,699 1,976,064 377,635 EXCESS (DEFICIENCY) OF REVENUES OVER (UNDER) EXPENDITURES (1,159,869) (1,192,889) (750,676) 442,213 OTHER FINANCING SOURCES: Transfers in 1,074,400 1,074,400 945,088 (129,312) Transfers out - (52,661) (52,661) - TOTAL OTHER FINANCING SOURCES (USES)1,074,400 1,021,739 892,427 (129,312) NET CHANGE IN FUND BALANCE (85,469) (171,150) 141,751 312,901 FUND BALANCE - BEGINNING OF YEAR 915,145 915,145 915,145 - FUND BALANCE - END OF YEAR 829,676$ 743,995$ 1,056,896$ 312,901$ See independent auditors' report and notes to financial statements. Budgeted Amounts 35 CITY OF RANCHO PALOS VERDES STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL AFFORDABLE HOUSING SPECIAL REVENUE FUND For the year ended June 30, 2012 Variance with Final Budget Positive Original Final Actual (Negative) REVENUES: Other revenues 330,000$ 330,000$ -$ (330,000)$ Use of money and property 10 10 697 687 TOTAL REVENUES 330,010 330,010 697 (329,313) EXPENDITURES: Community development 2,000 4,000 3,659 341 EXCESS (DEFICIENCY) OF REVENUES OVER (UNDER) EXPENDITURES 328,010 326,010 (2,962) (328,972) EXTRAORDINARY GAIN (LOSS)- - 1,723,632 1,723,632 NET CHANGE IN FUND BALANCE 328,010 326,010 1,720,670 1,394,660 FUND BALANCE - BEGINNING OF YEAR 1,770,519 1,770,519 1,770,519 - FUND BALANCE - END OF YEAR 2,098,529$ 2,096,529$ 3,491,189$ 1,394,660$ See independent auditors' report and notes to financial statements Budgeted Amounts 36 CITY OF RANCHO PALOS VERDES STATEMENT OF NET ASSETS PROPRIETARY FUNDS June 30, 2012 Business-type Governmental Activity-Activities- Water Quality Internal Flood Protection Service Enterprise Fund Funds CURRENT ASSETS: Cash and investments 3,640,715$ 3,527,960$ Receivables: Interest 2,663 2,568 Other 71,462 1,081 Prepaid items - 291,073 TOTAL CURRENT ASSETS 3,714,840 3,822,682 NONCURRENT ASSETS: Capital assets, not being depreciated: Land 1,408,493 - Construction in progress 1,516,924 - Capital assets, being depreciated: Property and equipment 11,813 1,603,512 Infrastructure 11,338,573 - Accumulated depreciation (919,544) (1,348,661) TOTAL NONCURRENT ASSETS 13,356,259 254,851 TOTAL ASSETS 17,071,099 4,077,533 CURRENT LIABILITIES: Accounts payable and accrued liabilities 176,451 86,330 Retentions payable 6,774 - Due to other fund - 118,514 TOTAL CURRENT LIABILITIES 183,225 204,844 Invested in capital assets 13,356,259 254,851 Unrestricted 3,531,615 3,617,838 TOTAL NET ASSETS 16,887,874$ 3,872,689$ See independent auditors' report and notes to financial statements. ASSETS LIABILITIES NET ASSETS 37 CITY OF RANCHO PALOS VERDES STATEMENT OF REVENUES, EXPENSES AND CHANGES IN NET ASSETS - PROPRIETARY FUNDS For the year ended June 30, 2012 Business-type Governmental Activity-Activities- Water Quality Internal Flood Protection Service Enterprise Fund Funds OPERATING REVENUES: Charges for services 1,319,109 2,301,500$ OPERATING EXPENSES: Personnel services 141,320 1,869,945 Materials and supplies 98,452 154,354 Maintenance 86,359 236,948 Depreciation 234,354 133,485 TOTAL OPERATING EXPENSES 560,485 2,394,732 OPERATING LOSS 758,624 (93,232) NONOPERATING REVENUES: Other revenues - 28,618 Interest income 10,965 11,419 TOTAL NONOPERATING REVENUES 10,965 40,037 INCOME (LOSS) BEFORE TRANSFERS 769,589 (53,195) TRANSFER OUT - (370,517) CHANGE IN NET ASSETS 769,589 (423,712) TOTAL NET ASSETS - BEGINNING OF YEAR 16,118,285 4,296,401 TOTAL NET ASSETS - END OF YEAR 16,887,874$ 3,872,689$ See independent auditors' report and notes to financial statements. 38 CITY OF RANCHO PALOS VERDES STATEMENT OF CASH FLOWS PROPRIETARY FUNDS For the year ended June 30, 2012 Business-type Governmental Activity-Activities- Water Quality Internal Flood Protection Service Enterprise Fund Funds CASH FLOWS FROM OPERATING ACTIVITIES: Receipts from interfund services provided -$ 2,420,014$ Receipts from storm drain user fees 1,309,906 - Payments to suppliers (184,811) (434,978) Payments to employees (141,320) (2,039,616) NET CASH USED BY OPERATING ACTIVITIES 983,775 (54,580) CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES: Acquisition and construction of capital assets (786,761) (134,637) CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES: Receipts from other revenues - 27,537 Transfer to other funds - (370,517) NET CASH PROVIDED FROM NON-CAPITAL FINANCING ACTIVITIES - (342,980) CASH FLOWS FROM INVESTING ACTIVITIES: Interest received on investments 11,680 13,362 NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 208,694 (518,835) CASH AND CASH EQUIVALENTS - BEGINNING OF YEAR 3,432,022 4,046,795 CASH AND CASH EQUIVALENTS - END OF YEAR 3,640,715$ 3,527,960$ RECONCILIATION OF OPERATING LOSS TO NET CASH USED BY OPERATING ACTIVITIES: Operating income (loss) 758,624$ (93,232)$ Adjustments to reconcile operating loss to net cash used by operating activities: Depreciation 234,354 133,485 Changes in operating assets and liabilities: Increase in other receivable (9,203) - Increase in prepaid items - (28,989) Decrease in accrued liabilities - (184,358) Increase in due to other fund - 118,514 NET CASH USED BY OPERATING ACTIVITIES 983,775$ (54,580)$ See independent auditors' report and notes to financial statements. 39 CITY OF RANCHO PALOS VERDES STATEMENT OF FIDUCIARY NET ASSETS FIDUCIARY FUNDS June 30, 2012 Successor Agency to the Rancho Palos Verdes Redevelopment Agency Private-Purpose Trust Fund Cash and investments 625,260$ Receivables: Interest 10 Notes 204,950 Prepaid items 182,195 Land 166,296 TOTAL ASSETS 1,178,711$ LIABILITIES: Accounts payable and accrued liabilities 57,772$ Long-term liabilities: Due within one year 120,000 Due beyond one year 24,668,963 TOTAL LIABILITIES 24,846,735 NET DEFICIT HELD IN TRUST (23,668,024)$ See independent auditors' report and notes to financial statements ASSETS LIABILITIES AND FUND BALANCES 40 CITY OF RANCHO PALOS VERDES STATEMENT OF CHANGES IN FIDUCIARY NET ASSETS FIDUCIARY FUNDS For the Five Months Ended June 30, 2012 Successor Agency to the Rancho Palos Verdes Redevelopment Agency Private-Purpose Trust Fund ADDITIONS: Taxes 118,818$ Use of money and property 10 TOTAL ADDITIONS 118,828 DEDUCTIONS: Administration 50,139 Interest and fiscal charges 388,771 TOTAL DEDUCTIONS 438,910 EXTRAORDINARY LOSS ON DISSOLUTION OF REDEVELOPMENT AGENCY (23,347,942) CHANGE IN NET ASSETS (23,668,024) NET ASSETS - FEBRUARY 1, 2012 - NET ASSETS - END OF YEAR (23,668,024)$ See independent auditors' report and notes to financial statements 41 42 NOTES TO FINANCIAL STATEMENTS 43 CITY OF RANCHO PALOS VERDES NOTES TO FINANCIAL STATEMENTS JUNE 30, 2012 See independent auditors’ report. NOTE #1- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The accounting policies of the City of Rancho Palos Verdes (the City) conform to accounting principles generally accepted in the United States of America as applicable to governments. The Governmental Accounting Standards Board (GASB) is the accepted standard setting body for governmental accounting and financial reporting principles. The following is a summary of the significant policies. A. Reporting Entity The reporting entity, “City of Rancho Palos Verdes”, includes the accounts of the City, the Rancho Palos Verdes Redevelopment Agency (the Agency), 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 Redevelopment Agency was formed 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 the Successor Agency for the purpose of winding down the business of the former Redevelopment Agency (see Note # 13). 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 (the County) in connection with the Horan Lawsuit. The Agreement requires funds to be set aside and expended by the Authority to maintain landslide abatement improvements installed and constructed by the former Redevelopment Agency. The criteria used in determining the scope of the reporting entity are based on the provisions of GASB Statement 14. The City of Rancho Palos Verdes is the primary government unit. Component units are those entities which are financially accountable to the primary government, either because the City appoints a voting majority of the component unit’s Board, or because the component unit will provide a financial benefit or impose a financial burden on the City. The City has accounted for the former Redevelopment Agency and the Authority as “blended” component units. Despite being legally separate entities, the former Redevelopment Agency and the Authority are so intertwined with the City, they are, in substance, part of the City’s operations. 44 CITY OF RANCHO PALOS VERDES NOTES TO FINANCIAL STATEMENTS JUNE 30, 2012 See independent auditors’ report. Accordingly, the balances and transactions of the former Redevelopment Agency for the seven month period from July 1, 2011 through January 31, 2012 are reported as separate Special Revenue, Debt Service and Capital Projects Funds. The balances and transactions of the Authority are reported as separate Permanent and Special Revenue Funds. The following specific criteria were used in determining that the Successor Agency and the Authority are “blended” component units: 1) The members of the City Council also act as the governing bodies of the component units. 2) The City, the former Redevelopment Agency, and the Authority are financially interdependent. The City subsidizes maintenance operations performed by the Authority. The City made loans to the former Redevelopment Agency for use on redevelopment projects. 3) Employees of the City manage both the City and the component units. Separately issued financial statements for the Authority may be obtained at the City’s administrative offices. Participation in Public Entity Joint Powers Authority The City is a member of the Palos Verdes Peninsula Transit Joint Powers Authority (the Transit Authority). 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 Assets. However, the City does have an ongoing financial interest, because the City is able to influence the operations of the Authority so that the Authority uses its resources on behalf of the City. Also, an ongoing financial responsibility exists because the Authority is dependent on continued funding from the City. The condensed financial information of the Authority has not been reproduced in this report, but is available upon request from the Authority by emailing pvtransit@palosverdes.com or mailing a request to P.O. Box 2656, Palos Verdes Peninsula, CA 90274. 45 CITY OF RANCHO PALOS VERDES NOTES TO FINANCIAL STATEMENTS JUNE 30, 2012 See independent auditors’ report. 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 for with a separate set of self-balancing accounts that comprise its assets, liabilities, fund equity, revenues, and expenditures. The following are types of funds used: Governmental Fund Types • General Fund – Used to account for all financial resources except those that are required to be accounted for in another fund. • Special Revenue Funds – Used to account for the proceeds of specific revenue sources that are restricted by law or administrative action for specified purposes. • Debt Service Fund – The debt service fund of the former Redevelopment Agency is used to account for property tax increment revenue and related interest income. Disbursements from this fund consist mainly of principal and interest on indebtedness. • 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 account for employee benefits costs and purchases and maintenance of equipment on behalf of all City departments, as well as 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. 46 CITY OF RANCHO PALOS VERDES NOTES TO FINANCIAL STATEMENTS JUNE 30, 2012 See independent auditors’ report. C. Basis of Accounting/Measurement Focus Government – Wide Financial Statements The City’s Government-Wide Financial Statements include a “Statement of Net Assets” and a “Statement of Activities”. These two statements present summaries of Governmental Activities for the City. These statements are presented on an “economic resources” measurement focus and the accrual basis of accounting. Accordingly, all of the City’s assets and liabilities, including capital assets, infrastructure, and long-term debt, are included in the accompanying Statement of Net Assets. The Statement of Activities presents changes in net assets. Under the accrual basis of accounting, revenues are recognized in the period in which they are earned, while expenses are recognized in the period in which the liability is incurred. The Statement of Activities demonstrates the degree to which the direct expenses of a given function are offset by program revenues. Direct expenses are those that are clearly identifiable with a specific function. 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 interfund 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 Assets presented in the Government-Wide Financial Statements. The City has presented all major funds that met qualifications of GASB Statement No. 34. In addition, the City has presented the Street Maintenance Special Revenue Fund as a major fund because the City believes the financial position and activities of this fund are significant to the City as a whole. 47 CITY OF RANCHO PALOS VERDES NOTES TO FINANCIAL STATEMENTS JUNE 30, 2012 See independent auditors’ report. All governmental funds are accounted for on a spending or “current financial resources” measurement focus and the modified accrual basis of accounting. Under the “current financial resources” measurement focus, generally only current assets and current liabilities are reported on the balance sheets. The Statement of Revenues, Expenditures and Changes in Fund Balances present increases (revenues and other financing sources) and decreases (expenditures and other financing uses) in fund balances. Revenues are recognized in the accounting period in which they become susceptible to accrual, that is, when they become both measurable and available to finance expenditures of the current period. “Measurable” means that the amount of the transaction can be determined, and “available” means collectible within the current period or soon enough thereafter to be used to pay liabilities of the current period. Accrued revenues include property 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 deferred revenues. Expenditures are recorded when the fund liability is incurred, if measurable, except for immature interest on general long-term debt, which is recognized when due. The City reports the following major governmental funds The General Fund is the City’s primary operating fund. It accounts for all financial resources of the City, except those that are required to be accounted for in another fund. The Street Maintenance Special Revenue Fund is used to account for state-shared highway users tax used for street maintenance, right-of-way acquisition and street construction. The City’s Affordable Housing Fund is used to account for developer fees in lieu of providing affordable housing with new development, as well as affordable housing assets that were transferred from the former Redevelopment Agency to the City as a result of the City’s election to retain the housing assets and function of the former Redevelopment Agency pursuant to state law related to redevelopment dissolution. 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 assets. The 48 CITY OF RANCHO PALOS VERDES NOTES TO FINANCIAL STATEMENTS JUNE 30, 2012 See independent auditors’ report. operating statement of proprietary funds presents increases (revenues) and decreases (expenses) in total net assets. Revenues are recognized when they are earned and expenses are recognized when the liability is incurred. Proprietary funds distinguish operating revenues and expenses from non-operating items. Operating revenues and expenses generally result from providing services and producing and delivering goods in connection with a proprietary fund’s principal ongoing operations. The principal operating revenues of the City’s enterprise and internal service funds are charges for services. Operating expenses for the enterprise and internal service funds include the costs of services, employee benefits, maintenance of capital assets, and depreciation on capital assets. All revenues and expenses not meeting this definition are reported as non- operating revenues and expenses. The City uses the internal service funds to finance and account for goods and services provided by one City department to other City departments, including the purchase and maintenance of equipment, replacement of buildings and payment of employee benefits. The City’s internal service funds are presented in the proprietary funds financial statements. Because the principal users of the internal services are the City’s governmental activities, the financial statements of the internal service funds are consolidated into the governmental column when presented in the government-wide financial statements. To the extent possible, the cost of these services is reported in the appropriate functional activity (administration, public safety, public works, etc.). The City reports the following major enterprise fund The Water Quality Flood Protection Fund is used to account for voter approved storm drain user fees used to repair and replace the City’s storm drain facilities. 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 will account 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. 49 CITY OF RANCHO PALOS VERDES NOTES TO FINANCIAL STATEMENTS JUNE 30, 2012 See independent auditors’ report. D. Budgetary Accounting Annual budgets are adopted on a basis consistent with accounting principles generally accepted in the United States of America for all governmental funds. All annual appropriations lapse at fiscal year-end. Budget control is maintained over all accounts, and expenditures are not allowed to exceed appropriations at the program level. Throughout the year, the City Council made several supplementing budgetary adjustments to the General fund, Special Revenue funds, Capital Projects funds, Proprietary funds and Permanent funds. These adjustments resulted in a net appropriation increase in the amount of $1,062,220. This increase was primarily a result of appropriations continued from FY11-12 with City Council approval. Under Article XIIIB of the California Constitution (the Gann Spending Limitation Initiative), the City is restricted as to the amount of annual appropriations from the proceeds of taxes, and if proceeds of taxes exceed allowed appropriations, the excess must either be refunded to the State Controller, returned to the taxpayers through revised tax rates or revised fee schedules, or an excess in one year may be offset against a deficit in the following year. For the fiscal year ended June 30, 2012, based on calculations by City Management, proceeds of taxes did not exceed related appropriations. E. Capital Assets Capital assets include land, machinery and equipment (vehicles, computers, etc.), buildings and improvements, 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 50 CITY OF RANCHO PALOS VERDES NOTES TO FINANCIAL STATEMENTS JUNE 30, 2012 See independent auditors’ report. Parks and Recreation Network 25 years F. Employee Compensated Absences City employees may receive from 10 to 20 days vacation time each year, depending upon length of service. An employee may accumulate earned vacation time up to a maximum of two years’ worth of accrued vacation leave. Upon termination, employees are paid the full value of their unused vacation time at their existing salary. 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; and therefore, the City does not accrue a liability. The General Fund will primarily be used to liquidate the liability for compensated absences in future years. Any liability for compensated absences is only carried in the General Fund if there is unused/unpaid leave outstanding following an employee’s separation. G. Investments Investments are stated at fair value (quoted market price of the best available estimate, thereof). H. Cash and Cash Equivalents The Water Quality Flood Protection Enterprise Fund and the Internal Service Funds participate in the pooling of City-wide cash and investments. Amounts from the pool are available to these funds on demand. Therefore the cash and investments reported in these funds are considered to be cash and cash equivalents for purpose of the statement of cash flows. The City has no non-cash investing, capital, or financing activities to be reported on the statement of cash flows. I. Claims and Judgments When it is probable that a claim liability has been incurred, and the amount of the loss can be reasonably estimated, the City records the estimated loss, net of any insurance coverage under its self-insurance program. Small claims and judgments are recorded as expenditures when paid. The City’s self-insurance program is administered through the California Joint Powers Authority (the CJPIA), which is described at Note #8. The CJPIA is a public entity risk pool, which is accounted for under the provisions of GASB Statement 51 CITY OF RANCHO PALOS VERDES NOTES TO FINANCIAL STATEMENTS JUNE 30, 2012 See independent auditors’ report. 10. Claim losses recorded in the CJPIA include both current claims and “Incurred but Not Reported” (IBNR) claims. The City records amounts deposited with CJPIA as insurance expenditures in the General Fund when paid. These deposits are subject to retrospective adjustment. Favorable claims experience result in a refund of deposits from the CJPIA and such refunds, if any, are recorded as a reduction of insurance expenditures. Adverse claims experience result in the payment of additional deposits and such deposits, if any, are recorded as insurance expenditures when paid. J. Prepaid Items Certain payments to vendors reflect costs applicable to future accounting periods and are recorded as prepaid items using the consumption method. In governmental funds, the prepaid assets recorded do not reflect current appropriable resources and thus, an equivalent portion of fund balance is reported as nonspendable. The City had a total of $1,007,946 ($716,873 in governmental funds and $291,073 in internal service funds) of prepaid items as of June 30, 2012. K. Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect certain reported amounts and disclosures. Accordingly, actual results could differ from those estimates. L. Use of Restricted Resources When both restricted and unrestricted resources are available for use, it is the City’s policy to use restricted resources first. When unrestricted resources (committed, assigned or unassigned) are available for use, it is the City’s policy to use committed resources first, assigned resources second and finally unassigned resources. NOTE #2 – CASH AND INVESTMENTS Cash and investments as of June 30, 2012, are classified in the accompanying financial statements as follows: Government-Wide Fiduciary Fund Statement of Statement of Fiduciary Net Assets Net Assets Total Total cash and investments 47,407,782$ 625,260$ 48,033,042$ 52 CITY OF RANCHO PALOS VERDES NOTES TO FINANCIAL STATEMENTS JUNE 30, 2012 See independent auditors’ report. Cash and investments as of June 30, 2012 consist of the following: Petty Cash $ 2,500 Deposits with Financial Institution 4,778,629 Local Agency Investment Fund (LAIF) 43,251,913 Total cash and investments $ 48,033,042 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, credit risk, and concentration of credit risk Authorized Investment Type Maximum Maturity Maximum Amount or Percent of Portfolio Maximum in One 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 $5 million 15% Disclosures Relating to Interest Rate Risk Interest rate risk is the risk that changes in market interest rates will adversely affect the fair value of an investment. Generally, the longer the maturity of an investment, there is a greater sensitivity of its fair value to changes in market interest rates. The City manages its exposure to interest rate risk by investing with the Local Agency Investment Fund (LAIF) such that the portfolio provides cash flows and liquidity need for operations. The City’s investment is represented by shares in the pool, which can be withdrawn in one business day. The average maturity of the pool is less than one year. Remaining Maturity 12 Months Investment Type or Less Local Agency Investment Fund (LAIF) 43,251,913$ 53 CITY OF RANCHO PALOS VERDES NOTES TO FINANCIAL STATEMENTS JUNE 30, 2012 See independent auditors’ report. Disclosures Relating to Credit Risk Generally, credit risk is the risk that an issuer of an investment will not fulfill its obligation to the holder of the investment. This is measured by the assignment of a rating by a nationally recognized statistical rating organization. The City’s LAIF investment is not rated. Concentration of Credit Risk The investment policy of the City of Rancho Palos Verdes contains no limitations on the amount that can be invested in any one issuer beyond that stipulated by the California Government Code. As of June 30, 2012, the City’s investments in LAIF were exempt from concentration of credit risk disclosure. Custodial Credit Risk Custodial credit risk for deposits is the risk that, in the event of the failure of a depository financial institution, a government will not be able to recover its deposits or will not be able to recover collateral securities that are in the possession of an outside party. The custodial credit risk for investments is the risk that, in the event of the failure of the counterparty (e.g., broker-dealer) to a transaction, a government will not be able to recover the value of its investment or collateral securities that are in the possession of another party. The California Government Code and the City of Rancho Palos Verdes’ investment policy do not contain legal or policy requirements that would limit the exposure to custodial credit risk for deposits or investments, other than the following provision for deposits: The California Government Code requires that a financial institution secure deposits made by state or local governmental units by pledging securities in an undivided collateral pool held by a depository regulated under state law (unless so waived by the governmental unit). The market value of the pledged securities in the collateral pool must equal at least 110 percent of the total amount deposited by the public agencies. California law also allows financial institutions to secure City deposits by pledging first trust deed mortgage notes having a value of 150 percent of the secured public deposits. The City’s deposits with financial institution are non-interest bearing bank accounts that are fully insured by the Federal Deposit Insurance Corporation (FDIC). 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’ 54 CITY OF RANCHO PALOS VERDES NOTES TO FINANCIAL STATEMENTS JUNE 30, 2012 See independent auditors’ report. pro-rata share of the fair value provided by LAIF for the entire pool portfolio (in relation to the amortized cost of that portfolio). The balance available for withdrawal is based on the accounting records maintained by LAIF, which are recorded on an amortized cost basis. LAIF is a governmental investment pool managed and directed by the Treasurer of the State of California and is not registered with the Securities and Exchange Commission. An oversight committee comprised of California State officials and various other participants provides oversight to the management of the fund. The daily operations and responsibilities of LAIF fall under the auspices of the State Treasurer’s office. The City is a voluntary participant in the investment pool. NOTE #3 – INTERFUND TRANSACTIONS Inter-fund balances consisted of the following at June 30, 2012: Due To General Fund Other Governmental Funds 151,665$ Internal Service Funds 118,514 Total: 270,179$ Du e F r o m General fund cash was used to cover grant expenditures in the other Governmental Funds until reimbursement is received from the grant agencies. General fund cash was also used to cover July 2012 payments for employee benefits made in June 2012. Inter-fund Transfers Inter-fund transfers for the year ended June 30, 2012, consisted of the following: Street Other Internal General Maintenance Governmental Service Fund Fund Funds Funds Totals General Fund -$ -$ 200,000$ 340,000$ 540,000$ Street Maintenance - - 945,088 - 945,088 Capital Improvement Projects 5,472,272 52,661 965,022 30,517 6,520,472 Other Governmental Funds 220,700 - - - 220,700 Totals: 5,692,972$ 52,661$ 2,110,110$ 370,517$ 8,226,260$ Transfer From Tr a n s f e r T o 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) 55 CITY OF RANCHO PALOS VERDES NOTES TO FINANCIAL STATEMENTS JUNE 30, 2012 See independent auditors’ report. 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; 3) return money that was originally transferred from the General Fund to another fund, yet not used. NOTE #4 – CAPITAL ASSETS AND DEPRECIATION In accordance with GASB Statement No. 34, the City has reported all capital assets including infrastructure in the Government-Wide Statement of Net Assets. The City elected to use the basic reporting approach as defined by GASB Statement No. 34 for all infrastructures, whereby depreciation expense and accumulated depreciation has been recorded. The following tables present the capital assets activity for the year ended June 30, 2012. Beginning Ending Governmental Activities Balance Increases Decreases Balance Capital assets not being depreciated: Land 40,048,288 - (166,296) 39,881,992 Construction in progress 628,308 2,864,926 (3,063,178) 430,056 Total capital assets not being depreciated 40,676,596 2,864,926 (3,229,474) 40,312,048 Capital assets being depreciated: Building and improvements 9,379,539 - - 9,379,539 Vehicles 295,618 6,301 - 301,919 Computer equipment 599,397 128,336 - 727,733 Furniture, fixtures and equipment 573,860 - - 573,860 Infrastructure - - Roadway system 88,140,550 2,577,038 - 90,717,588 Sewer system 25,755,463 210,532 - 25,965,995 Storm drain system 13,148,416 - - 13,148,416 Parks system 6,702,324 275,608 - 6,977,932 Total capital assets being depreciated 144,595,167 3,197,815 - 147,792,982 Less accumulated depreciation for: Buildings and improvements (2,223,243) (203,170) - (2,426,413) Vehicles (200,962) (42,552) (243,514) Computer equipment (564,215) (45,749) (609,964) Furniture, fixtures and equipment (449,999) (45,184) (495,183) Infrastructure - - Roadway system (41,836,351) (2,432,938) - (44,269,289) Sewer system (17,307,988) (459,320) - (17,767,308) Storm drain system (2,967,475) (250,479) - (3,217,954) Parks system (4,576,448) (10,526) - (4,586,974) Total accumulated depreciation (70,126,681) (3,489,918) - (73,616,599) Total capital assets being depreciated, net 74,468,486 (292,103) - 74,176,383 Governmental activities capital assets, net 115,145,082 2,572,823 (3,229,474) 114,488,431 56 CITY OF RANCHO PALOS VERDES NOTES TO FINANCIAL STATEMENTS JUNE 30, 2012 See independent auditors’ report. Land carried at $166,296 was transferred to the Successor Agency upon dissolution of the Redevelopment Agency on January 31, 2012 (see Note #14). Depreciation expense was charged to functions/programs of the primary government as follows: Administration (depreciation of buildings) $ 203,170 Public Works (depreciation of roadways, sewers, and storm drains) 3,142,737 Recreation Services (depreciation of parks system) 10,526 Capital assets held by the City’s internal service funds are charged to the various functions based on their usage of the assets 133,485 Total Depreciation Expense – Governmental Activities $3,489,918 Beginning Ending Business-type Activities Balance Increases Decreases Balance Capital assets not being depreciated: Land 1,408,493 - - 1,408,493 Construction in progress 678,980 837,944 - 1,516,924 Total capital assets not being depreciated 2,087,473 837,944 - 2,925,417 Capital assets being depreciated: Equipment 11,813 11,813 Storm drain system 11,338,573 - - 11,338,573 Total capital assets being depreciated 11,350,386 - - 11,350,386 Less accumulated depreciation for: Equipment (10,632) (1,181) (11,813) Storm drain system (674,558) (233,173) - (907,731) Total accumulated depreciation (685,190) (234,354) - (919,544) Total capital assets being depreciated, net 10,665,196 (234,354) - 10,430,842 Business-type activities capital assets, net 12,752,669 603,590 - 13,356,259 Depreciation expense of $234,354 is included in the Water Quality Flood Protection enterprise fund. NOTE #5 – LONG-TERM NOTES RECEIVABLE Total Long-Term Special Revenue Funds:Notes Receivable Affordable Housing 6,829,457$ Community Development Block Grant 479,024$ 7,308,481$ 57 CITY OF RANCHO PALOS VERDES NOTES TO FINANCIAL STATEMENTS JUNE 30, 2012 See independent auditors’ report. 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 $432,593 at June 30, 2012 was $6,703,137. In March 2011, the former RDA sold an affordable housing condominium to an individual for $350,000 in connection with the sale the former RDA took back a secured promissory note from the buyer 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 a result of the nature of these terms, the balance of this note has been offset by deferred revenue in the governmental fund financial statements. As part of redevelopment dissolution, these two long-term notes receivable were transferred to the City, which elected to retain the housing assets and function of the former Redevelopment Agency (see Note #14). 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, 2012 is $479,024. NOTE #6 – LONG-TERM DEBT Balance Balance Amount Due July 1, 2011 Additions Deletions June 30, 2012 in One Year RDA Tax Increment Bond 5,165,000$ (5,165,000)$ -$ -$ RDA Deferred Interest Payable 798,601 (798,601) - - Employee Compensated Absences 332,600 271,804 (233,605) 370,799 260,435 Totals 6,296,201$ 271,804$ (6,197,206)$ 370,799$ 260,435$ 58 CITY OF RANCHO PALOS VERDES NOTES TO FINANCIAL STATEMENTS JUNE 30, 2012 See independent auditors’ report. Employee Compensated Absences There is no fixed payment schedule for employee compensated absences. Based on historical trends, $260,434 estimated to be the amount that will be used and/or paid out during fiscal year 2012-13. RDA Tax Increment Bond and Deferred Interest Payable Upon dissolution of the Redevelopment Agency on January 31, 2012, the debt of the former RDA was transferred to the Successor Agency (see Note #14). The transferred debt included a Tax Increment Bond in the amount of $5,065,000 and Deferred Interest Payable in the amount of $434,904 at January 31, 2012. NOTE #7 – CLASSIFICATIONS OF NET ASSETS AND FUND BALANCE Government-Wide Financial Statements In the Government-Wide financial statements net assets are classified in the following categories: Invested in Capital Assets, Net of Related Debt This category groups all capital assets, including infrastructure, into one component of net assets. Accumulated depreciation on these assets reduces this category as does any outstanding balance on debt incurred in acquiring or constructing the capital assets. As of June 30, 2012, the City had no debt related to capital assets. Restricted Net Assets This category presents external restrictions imposed by creditors, grantors, contributions or laws or regulations of other governments and restrictions imposed by law through constitutional provisions or enabling legislation. Unrestricted Net Assets This category represents the net assets of the City that are not externally restricted for any project or other purpose. Fund Financial Statements The fund balances reported on the fund statements consist of the following categories: 59 CITY OF RANCHO PALOS VERDES NOTES TO FINANCIAL STATEMENTS JUNE 30, 2012 See independent auditors’ report. Nonspendable – 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. 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. The City Council has not committed fund balances as of June 30, 2012. Assigned – Amounts the City Council intends to use for a specific purpose, which is expressed by the City Council via minute order. The City Council has assigned the entire fund balance of the Capital Improvement Projects fund for the future design and construction of infrastructure improvement projects. 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, 2012: Street Affordable Capital Other General Maintenance Housing Improvement Governmental Fund Fund Fund Fund Funds Nonspendable: In Form (e.g. inventory, prepaid amounts) 7,492,810$ -$ 2,990,899$ -$ -$ Legally (e.g. endowments)- - - - 1,824,696 Restricted - 1,056,896 500,290 - 6,856,223 Committed - - - - - Assigned - - - 15,406,941 - Unassigned: Rainy Day Fund 11,775,937 - - - - Continued Appropriations 688,502 - - - - Deficit Fund Balance - - - - (108,132) Governmental Fund Balance Totals 19,957,249$ 1,056,896$ 3,491,189$ 15,406,941$ 8,572,787$ Minimum Fund Balance Policies The City Council has adopted a policy, via resolution, to maintain the following minimum fund balances: 60 CITY OF RANCHO PALOS VERDES NOTES TO FINANCIAL STATEMENTS JUNE 30, 2012 See independent auditors’ report. ¾ Rainy Day Fund – At least fifty percent of annual operating expenditures in the General Fund; ¾ Capital Improvement Fund – A minimum of $3 million for infrastructure improvement projects; ¾ Street Maintenance Fund – A minimum of one year’s appropriations for road maintenance on Palos Verdes Drive South in the landslide area; and ¾ Habitat Restoration Fund – A minimum of $50,000 for emergency use for habitat restoration purposes. Special Revenue Funds Fund balances are non-spendable or restricted in the special revenue funds for the following purposes: Fund Purpose Revenue Source Amount Street Maintenance Maintain the City's right of way, which includes both pavement and roadside maintenance Highway Users' Tax and other transfers of other restricted funding (e.g. Landscaping & Lighting District Assessments)1,056,896$ Affordable Housing Implement goals, policies and programs outlined in the Housing Element of the City's General Plan Developer fees Non-Spendable $2,990,899 Restricted $500,290 Air Quality Management p vehicles AB2766 fees 101,187$ El Prado Maintain the common area of the El Prado neighborhood Property assessments 16,774$ Proposition A Public transportation Special sales tax 170,421$ Proposition C Public transit and related services Special sales tax 1,341,811$ Measure R Transportation needs, including maintenance of arterial streets, traffic control, bikeway and pedestrian improvements, and public transit Special sales tax 391,926$ Beautification Right of way beautification, neighborhood beautification grants, and promote recycling Recycling fees and grants 1,065,483$ Waste Reduction State mandated waste reduction and recycling plans and programs AB939 fees from waste haulers 268,961$ Public Safety Grants Law enforcement and public safety equipment Federal and state grants and shared 20,188$ 1972 Act Landscaping & Lighting District Maintain right of way landscaping and lighting Property assessments 78,079$ 1911 Act Lighting District Maintain right of way lighting and traffic signals Property assessments 1,670,384$ 61 CITY OF RANCHO PALOS VERDES NOTES TO FINANCIAL STATEMENTS JUNE 30, 2012 See independent auditors’ report. Continued: Fund Purpose Revenue Source Amount Improvement Authority Portuguese Bend Maintain landslide abatement improvements in the Portuguese Bend project area General fund transfers pursuant to the provisions of a reimbursement and settlement agreement with the County of Los Angeles 309,724$ Habitat Restoration Restore habitat on City owned property Developer fees Non-Spendable $74,696 Restricted $146,345 Abalone Cove Sewer District Maintain and operate the Abalone Cove sewer system Property assessments 39,271$ Dr. Allen and Charlotte Ginsburg Cultural Arts Building Construction of a building to be used for dancing or other cultural activities, or for the purchase of open space for habitat conservation and passive recreational purposes Private donation 158,480$ Donor Restricted Contributions Acquire or construct recreational facilities Private donations 406,809$ Bikeways Design and construction of bicycle and pedestrian facilities on roadways, including disable access ramps Transportation Development Act Article 361$ Environmental Excise Tax Purchase land, construct facilities, or purchase equipment to develop, improve and expand parks, services, utilities and public safety Local tax on new construction 414,525$ Quimby Develop or rehabilitate park and recreational facilities Developer fees 29,421$ Capital Project Funds Fund balances are restricted or assigned for the following: Fund Purpose Amount Capital Improvement Projects Assigned for design, construction & inspection of City infrastructure projects, including roadways, storm drains, and park facilities 15,406,941$ Permanent Funds Fund balances are considered non-spendable or restricted for the following: 62 CITY OF RANCHO PALOS VERDES NOTES TO FINANCIAL STATEMENTS JUNE 30, 2012 See independent auditors’ report. Fund Purpose Amount Subregion One Maintenance The interest earned on this fund balance is used to maintain trails and open space dedicated to the City by the developer of the Oceanfront Estates tract of homes. The Non-Spendable portion of this fund balance must be maintained per the development agreement with the City. Non-Spendable $750,000 Restricted $23,559 Improvement Authority Abalone Cove The interest earned on this fund balance is used to maintain infrastructure constructed by the Redevelopment Agency in the Abalone Cove area of the Redevelopment Agency's Project Area. The Non-Spendable portion of the fund balance must be maintained pursuant to a Reimbrusement & Settlement Agreement. Non-Spendable $1,000,000 Restricted $202,814 NOTE #8 – PENSION AND RETIREMENT HEALTH SAVINGS PLANS Pension Plan Description The City provides a defined benefit pension plan that includes retirement and disability benefits, annual cost-of-living adjustments, and death benefits to plan members and beneficiaries. The City contracts with the California Public Employee’s Retirement System (CalPERS), a cost-sharing, multi-employer public employee defined benefit pension plan administered by CalPERS. CalPERS provides retirement and disability benefits, annual cost-of-living adjustments, and death benefits to plan members and beneficiaries. State statutes, within the Public Employees’ Retirement Law, establish benefit provisions and other requirements. The City selects optional benefit provisions from the benefit menu by contract with CalPERS and adopts those benefits through local ordinance. Copies of the CalPERS annual financial report may be obtained from the CalPERS Executive Office at 400 P Street, Sacramento, California 95814 or downloaded from their website at www.calpers.gov. Pursuant to City Council action on October 2, 2012 to reduce pension benefits for future employees and the California Public Employees’ Pension Reform Act of 2012, the City will have 3 tiers of defined pension benefits. For employees hired prior to October 2, 2012, the City participates in a Miscellaneous 2.5% at 55 Risk Pool (1st Tier). For employees hired after October 2, 2012 but before January 1, 2013 and employees hired after January 1, 2013 that have participated in a reciprocating California public employee pension plan within six months of being hired by the City, the City participates in a Miscellaneous 2% at 60 Risk Pool (2nd Tier). For all other employees hired after January 1, 2013, the City will participate in a Miscellaneous 2% at 62 Risk Pool (3rd Tier). 63 CITY OF RANCHO PALOS VERDES NOTES TO FINANCIAL STATEMENTS JUNE 30, 2012 See independent auditors’ report. Pension Plan Funding Policy The contribution requirements of plan members are established by State statute and the employer contribution rate is established and amended by CalPERS. During fiscal year 2011-12, the City’s employees participated in only the 1st Tier of benefits as described above. Active City employees were required to contribute 8% of their annual covered salary beginning in September 2011. The City is required to contribute the actuarially determined remaining amounts necessary to fund the benefits for its members. The fiscal year 2011-12 rate for the City’s contribution was 13.353% of covered payroll. As a result of having less than 100 active members as of June 30, 2003, the City was required to participate in a risk pool. The City’s pooled employer contribution rate is the same as the stand-alone employer contribution rate. At the time of joining the mandatory pooled plan, CalPERS established an employer side fund to account for the difference between the funded status of the pooled plan and the funded status of the City’s plan. The City paid off its side fund liability in fiscal year 2009-10. The funded status of the 1st Tier Risk Pool at June 30, 2011 was 72.3%. The risk pool’s unfunded actuarial accrued liability at June 30, 2011 was $293,320,030. The City’s share of the risk pool’s unfunded actuarial accrued liability, as reported by CalPERS, is $3,714,970. Currently, the City’s share of the Risk Pool’s liability is not a reportable liability of the City. However, with implementation of GASB Statement No. 68 expected with the June 30, 2015 financial statements, the City’s share of the Risk Pool’s liability will be a reportable liability of the City. The City’s contributions to CalPERS for the most recent three years follow. City Pay-off Total Year Ended Contribution Side Fund Liability City Cost June 30, 2012 658,481$ -$ 658,481$ June 30, 2011 461,416$ -$ 461,416$ June 30, 2010 521,408$ 1,661,376$ 2,182,784$ 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 64 CITY OF RANCHO PALOS VERDES NOTES TO FINANCIAL STATEMENTS JUNE 30, 2012 See independent auditors’ report. 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 fiscal year 2011-12, the City contributed a total of $72,052 to employee accounts. During the same time, employees contributed a total of $48,769 to their own accounts. The Plan assets are not an asset of the City. Therefore, only the City’s expense to make contributions to the Plan has been recorded in the Employee Benefits internal service fund in the City’s financial statements. NOTE #9 – LIABILITY, INSURED PROGRAMS AND WORKERS’ COMPENSATION PROTECTION Description of Self-Insurance Pool Pursuant to Joint Powers Agreement The City is a member of the California Joint Powers Insurance Authority (Authority). The Authority is composed of 123 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 (formerly called the primary deposit) to cover estimated losses for the coverage period. This initial funding is paid at the beginning of the coverage period. After the close of the coverage period, outstanding claims are valued. A retrospective deposit computation is then conducted annually thereafter until all claims incurred during the coverage period 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. 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 65 CITY OF RANCHO PALOS VERDES NOTES TO FINANCIAL STATEMENTS JUNE 30, 2012 See independent auditors’ report. (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 non-police exposures. (1) The payroll of each member is evaluated relative to the payroll of other members. A variable credibility factor is determined for each member, which establishes the weight applied to payroll and the weight applied to losses within the formula. (2) The first layer of losses includes incurred costs up to $30,000 for each occurrence and is evaluated as a percentage of the pool’s total incurred costs within the first layer. (3) The second layer of losses includes incurred costs from $30,000 to $750,000 for each occurrence and is evaluated as a percentage of the pool’s total incurred costs within the second layer. (4) Incurred costs in excess of $750,000 up to the reinsurance attachment point of $5 million are distributed based on the outcome of cost allocation within the first and second loss layers. (5) Costs of covered claims from $5 million to $10 million are paid under a reinsurance contract subject to a $2.5 million annual aggregate deductible. Costs of covered claims from $10 million to $15 million are paid under two reinsurance contracts subject to a combined $3 million annual aggregate deductible. On a cumulative basis for all 2011-12 reinsurance contracts the annual aggregate deductible is $5.5 million. (6) Costs of covered claims from $15 million up to $50 million are covered through excess insurance policies. The overall coverage limit for each member including all layers of coverage is $50 million per occurrence. Costs of covered claims for subsidence losses are paid by reinsurance and excess insurance with a pooled sub-limit of $35 million per occurrence. This $35 million subsidence sub-limit is composed of (a) $5 million retained within the pool’s SIR, (b) $10 million in reinsurance and (c) $20 million in excess insurance. The excess insurance layer has a $20 million annual aggregate. Workers’ Compensation In the workers’ compensation program claims are pooled separately between public safety (police and fire) and non-public safety 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 66 CITY OF RANCHO PALOS VERDES NOTES TO FINANCIAL STATEMENTS JUNE 30, 2012 See independent auditors’ report. costs within the second layer. (4) Incurred costs in excess of $100,000 up to the reinsurance attachment point of $2 million are distributed based on the outcome of cost allocation within the first and second loss layers. (5) Costs of covered claims from $2 million up to statutory limits are paid under a reinsurance policy. Protection is provided per statutory liability 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 participates in the pollution legal liability insurance program (formerly called environmental insurance) which is available through the Authority. The policy covers sudden and gradual pollution of scheduled property, streets, and storm drains owned by the City. Coverage is on a claims-made basis. There is a $50,000 deductible. The Authority has a limit of $50 million for the 3-year period from July 1, 2011 through July 1, 2014. Each member of the Authority has a $10 million sub-limit during the 3-year term of the policy. Property Insurance The City participates in the all-risk property protection program of the Authority. This insurance protection is underwritten by several insurance companies. City property is currently insured according to a schedule of covered property submitted by the City to the Authority. City property currently has all-risk property insurance protection in the amount of $14,505,855. 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. Earthquake and Flood Insurance The City purchases earthquake and flood insurance on a portion of its property. The earthquake insurance is part of the property protection insurance program of the Authority. City property currently has earthquake protection in the amount of $14,406,823. 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. 67 CITY OF RANCHO PALOS VERDES NOTES TO FINANCIAL STATEMENTS JUNE 30, 2012 See independent auditors’ report. Crime Insurance The City 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 Liability Insurance The City 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 according to a schedule. The City then pays for the insurance. The insurance is arranged by the Authority. Adequacy of Protection During the past three fiscal years, none of the above programs of protection experienced settlements or judgments that exceeded pooled or insured coverage. There were also no significant reductions in pooled or insured liability coverage in 2011-12. 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 #8) and, as such, the City believes that the ultimate liability for these legal actions and claims will not have a material adverse effect on the City’s financial statements. The City is also a defendant in legal actions for which the potential losses would not be covered through participation in CJPIA. The likelihood of an unfavorable outcome or the amount of potential losses cannot be reasonably estimated by the City for these claims at this time. In the event of an unfavorable outcome the losses would likely be material to the City’s financial statements. Storm Drain Failures During the winter storms of fiscal year 2004-05 citywide emergency repairs were required, including those to repair sinkholes along Western Avenue. The City received reimbursement from the Federal Emergency Management Agency (FEMA) in the amount of approximately $1.2 million. 68 CITY OF RANCHO PALOS VERDES NOTES TO FINANCIAL STATEMENTS JUNE 30, 2012 See independent auditors’ report. An audit by the Department of Homeland Security’s Office of Inspector General (OIG) indicated that the City may be compelled to return over $900,000 to FEMA. However, in April 2012, FEMA rejected the OIG audit recommendations on the grounds that the storm drains had functioned properly until the disastrous rain events of 2004-05. The OIG has until June 22, 2015 to challenge FEMA’s rejection of the audit. The City’s FEMA consultant has advised City Staff that the OIG has never before challenged a FEMA rejection. Therefore, no liability to return the FEMA funds has been accrued. Building Moratorium There is longstanding building moratorium in the landslide area of the City. Several landowners with parcels in this area filed a lawsuit claiming an unconstitutional taking of their property due to the building moratorium and the City’s adoption in 2002 of a safety standard that must be satisfied before development could occur in this area. The landowners claim that the City has made it impossible for them to satisfy the exception to the moratorium that would allow development of the parcels. Judgment was entered for the City after a three-month trial in the Superior Court. However, the California Court of Appeal reversed the trial court’s decision. The landowners were seeking a trial on the issue of damages, which they assert exceed $32 million. The parties negotiated a settlement, but the plaintiffs refused to sign it, and subsequently rescinded their approval of the settlement. On October 21, 2011, the Superior Court entered judgment in favor of the City on all causes of action. The plaintiffs filed an appeal from the judgment on November 4, 2011 and the City awaits a hearing date from the Court of Appeal; however, as the City has been processing development applications for the plaintiffs’ lots as ordered by the trial court, there is no expectation that the plaintiffs’ appeal will be successful. Therefore, no liability has been accrued. NOTE #11 – PROPERTY TAXES Under California law, property taxes are assessed and collected by the counties up to one percent of assessed value, plus other increases approved by the voters. The property taxes go into a pool, and are then allocated to the cities based on complex formulas. Accordingly, the City accrues only those taxes, which are received from the county within sixty days after year-end. Lien date January 1 Levy date June 30 Due date November 1 and February 1 Collection dates December 10 and April 10 69 CITY OF RANCHO PALOS VERDES NOTES TO FINANCIAL STATEMENTS JUNE 30, 2012 See independent auditors’ report. NOTE #12 – DEFERRED REVENUES The deferred revenues in the fund financial statements of the City of Rancho Palos Verdes as of June 30, 2012 consisted of the following: General Fund: Accrued Interest from Long-Term Advance to the former Redevelopment Agency 12,546,283 Advance on Federal Grant 100,830 Revenue Earned but Not Available (beyond 60 days) 81,038 Other Governmental Funds: Long-Term Note Receivable from AMCAL 3,633,706 Other Long-Term Note Receivable 126,320 Accrued Interest from AMCAL Loan 79,431 Long-Term Note Receivable Offset (loans expended when made) 479,024 Revenue Earned but Not Available (beyond 60 days) 184,206 Total Deferred Revenues: 17,230,838 NOTE #13 – OTHER REQUIRED FUND DISCLOSURES The following funds had deficit fund balances as of June 30, 2012: Other Governmental Funds: Community Development Block Grant Fund $ 42,447 Measure A Special Revenue Fund $ 65,685 The City plans to finance the fund deficits through future revenues and transfers from other funds. NOTE #14 – SUCCESSOR AGENCY On June 29, 2011, Assembly Bills 1x 26 (the “Dissolution Act”) and 1x 27 were enacted as part of the FY 2011-12 state budget package. The Dissolution Act required each California redevelopment agency to suspend nearly all activities except to implement existing contracts, meet already-incurred obligations, preserve its assets and prepare for impending dissolution. Assembly Bill 1x 27 provided a means for redevelopment agencies to continue to exist and operate by means of a Voluntary Alternative Redevelopment Program. The League of California Cities and the California Redevelopment Association (CRA) filed a lawsuit on July 18, 2011 on behalf of cities, counties and redevelopment agencies petitioning the California Supreme Court to overturn the Dissolution Act and Assembly Bill 1x 27 on the grounds that these bills violate the California Constitution. 70 CITY OF RANCHO PALOS VERDES NOTES TO FINANCIAL STATEMENTS JUNE 30, 2012 See independent auditors’ report. On December 29, 2011, the California Supreme Court upheld the Dissolution Act and struck down Assembly Bill 1x 27. On June 27, 2012, as part of the FY 2012-13 state budget package, the Legislature passed and the Governor signed AB 1484, which made technical and substantive amendments to the Dissolution Act based on experience to-date at the state and local level in implementing the Dissolution Act. Under the Dissolution Act, each California redevelopment agency (each a “Dissolved RDA”) was dissolved as of February 1, 2012, and the sponsoring community that formed the Dissolved RDA, together with other designated entities, have initiated the process under the Dissolution Act to unwind the affairs of the Dissolved RDA. A Successor Agency was created for each Dissolved RDA which is the sponsoring community of the Dissolved RDA unless it elected not to serve as the Successor Agency. On September 6, 2011, the City elected to serve as the Successor Agency of the Rancho Palos Verdes Redevelopment Agency. The Dissolution Act also created oversight boards which monitor the activities of the successor agencies. The roles of the successor agencies and oversight boards is to administer the wind down of each Dissolved RDA which includes making payments due on enforceable obligations, disposing of the assets (other than housing assets) and remitting the unencumbered balances of the Dissolved RDAs to the County Auditor-Controller for distribution to the affected taxing entities. 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. If the sponsoring community does not elect to become the Successor Housing Agency and assume the Dissolved RDA’s housing functions, such housing functions and all related housing assets will be transferred to the local housing authority in the jurisdiction. AB 1484 modified and provided some clarifications on the treatment of housing assets under the Dissolution Act. The City elected on February 21, 2012 to serve as the Housing Successor Agency. Prior to February 1, 2012, the final seven months of activity of the Dissolved RDA are reported in the governmental funds of the City. 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. All other assets, obligations, and activities of the Dissolved RDA have been transferred and are reported in a fiduciary fund (private-purpose trust fund) in the financial statements of the City. The transfer of the assets and liabilities of the Dissolved RDA as of February 1, 2012 (except for certain assets of the former Low and Moderate Income Housing Fund, which were transferred to the Affordable Housing Special Revenue 71 CITY OF RANCHO PALOS VERDES NOTES TO FINANCIAL STATEMENTS JUNE 30, 2012 See independent auditors’ report. Fund (effectively the same date as January 31, 2012) from the governmental funds of the City to the fiduciary fund was reported in the governmental funds as an extraordinary gain in the governmental fund financial statements. The receipt of these assets and liabilities as of February 1, 2012 was also reported in the fiduciary fund as an extraordinary loss. Because of the different measurement focus of the governmental funds (current financial resources measurement focus) and the measurement focus of the fiduciary private-purpose trust fund (economic resources measurement focus), the extraordinary gain recognized in the governmental funds was not the same amount as the extraordinary loss that was recognized in the fiduciary fund financial statements. The difference between the extraordinary gain recognized in the fund financial statements and the extraordinary loss recognized in the fiduciary fund financial statements is reconciled as follows: Total extraordinary gain reported in governmental funds - increase to net assets of the Successor Agency Trust Fund (18,240,119)$ Capital assets recorded in the government-wide financial statements - increase to net assets of the Successor Agency Trust Fund 166,296 Notes receivable reported in the government-wide financial statements - increase to net assets of the Successor Agency Trust Fund 225,785 Long term debt reported in the government-wide financial statement - decrease to net assets of the Successor Agency Trust Fund (5,499,904) Net decrease to net assets of the Successor Agency Trust Fund as a result of initial transfers (equal to amount of extraordinary gain reported in the government-wide financial statements of the City)(23,347,942)$ The Dissolution Act and AB 1484 also establish roles for the County Auditor- Controller, the California Department of Finance (the “DOF”) and the California State Controller’s office in the dissolution process and the satisfaction of enforceable obligations of the Dissolved RDAs. 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 72 CITY OF RANCHO PALOS VERDES NOTES TO FINANCIAL STATEMENTS JUNE 30, 2012 See independent auditors’ report. have been redevelopment property tax increment had the Dissolved RDA not been dissolved. The deposit in the RPTTF fund is to be used to pay to the Successor Agency the amounts due on the Successor Agency’s enforceable obligations for the upcoming six-month period. The Successor Agency is required to prepare a recognized obligation payment schedule (the “ROPS”) approved by the oversight board setting forth the amounts due for each enforceable obligation during each six month period. The ROPS is submitted to the DOF for approval. The County Auditor-Controller will make payments to the Successor Agency from the RPTTF fund based on the ROPS amount approved by the DOF. The ROPS is prepared in advance for the enforceable obligations due over the next six months. The Successor Agency received $118,818 from the County Auditor-Controller on June 1, 2012 for the ROPS for the period July 1, 2012 to December 31, 2012. 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. The State Controller of the State of California has been directed to review the propriety of any transfers of assets between Dissolved RDA and other public bodies that occurred after January 1, 2011. If the public body that received such transfers is not contractually committed to a third party for the expenditure or encumbrance of those assets, the State Controller is required to order the available assets to be transferred to the public body designated as the successor agency. The Dissolved RDA made only two transfers after January 1, 2011. One transfer was the return of $500,000 in excess loan proceeds to the City that was not needed to fund an affordable housing project. The other transfer involved notes receivable totaling $6,751,633 that was given to the City in its capacity as the successor housing agency to the Dissolved RDA. Management believes, in consultation with legal counsel, that the obligations of the Dissolved RDA due to the City are valid enforceable obligations payable by the Successor Agency under the requirements of the Dissolution Act and AB 1484. The City’s position on this issue is not a position of settled law and there is considerable legal uncertainty regarding this issue. It is reasonably possible that a legal determination may be made at a later date by an appropriate judicial authority that would resolve this issue unfavorably to the City. Non-Liquid Assets The following non-liquid assets are included in the records of the Successor Agency: 73 CITY OF RANCHO PALOS VERDES NOTES TO FINANCIAL STATEMENTS JUNE 30, 2012 See independent auditors’ report. Note receivable from Portuguese Bend Club Homeowners Association $204,950 Prepaid item 182,195 Land 166,296 Total Non-Liquid Assets $553,441 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, 2012 is $204,950. 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 which had not yet been applied to debt at June 30, 2012 is $182,195. The former Redevelopment Agency owned a number of parcels in the landslide area of the City. Parcels totaling approximately 177 acres which are identified as Abalone Cove Shoreline Park and adjacent open space were transferred from the County of Los Angeles at no cost. The remaining parcels which provide right-of- way access into the landslide area were originally purchased at a total cost of $166,296. Debt Summary Balance Transfers Balance Amounts Due February 1, 2012 from RDA Additions June 30, 2012 in One Year Due to City: Consolidated Loan -$ 19,026,913$ 262,146$ 19,289,059$ -$ Due to County: Tax Increment Bond - 5,065,000 - 5,065,000 120,000 Deferred Interest Payable - 434,904 - 434,904 - Totals -$ 24,526,817$ 262,146$ 24,788,963$ 120,000$ Consolidated Loan from City The City entered into an agreement to provide the former Redevelopment Agency (RDA) operating funds and staff assistance, supplies, technical and other services and facilities of the City as the RDA requires in carrying out its function under the community redevelopment law. The 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 74 CITY OF RANCHO PALOS VERDES NOTES TO FINANCIAL STATEMENTS JUNE 30, 2012 See independent auditors’ report. formation of the redevelopment agency are not recognized obligations. Therefore, the Consolidated Loan from the City has been disallowed on the Successor Agency’s Recognized Obligation Payment Schedule. However, an amendment to the redevelopment dissolution law provides a method to obtain a Finding of Completion from the California Department of Finance, which will lead to recognition of the City’s Consolidated Loan as an obligation of the Successor Agency. The Successor Agency has met the requirements to date, and it is anticipated that the Successor Agency will meet the remaining requirements to obtain the Finding of Completion during 2013. Variable interest accrued at a rate of 3.389 percent during the fiscal year ended June 30, 2012. Of the $19,289,059 advance, $14,510,123 relates to the Portuguese Bend portion of the former Redevelopment Agency, while $4,778,936 relates to the Abalone Cove portion. During the year ended June 30, 2012, accrued interest of $474,634 was added to the balance of the advance to the Portuguese Bend Fund, while principal of $89,918 and accrued interest of $156,321 was advanced to the Abalone Cove Fund. Tax Increment Bond and Deferred Interest Payable In July 1991, the former Redevelopment Agency received $10,000,000 in loan proceeds (the Loan) from the County of Los Angeles (the County) upon the County’s issue of Abalone Cove Improvement Bonds 2651-M pursuant to a Reimbursement and Settlement Agreement (the Agreement), dated October 27, 1987 in connection with the Horan Lawsuit. The Loan was made for the purpose of abating the Abalone Cove landslide. The settlement Loan was secured by property assessment liens in the Abalone Cove project area. As stipulated by the parties to the Agreement, a portion of the Loan proceeds was used to repay a tax allocation and revenue anticipation promissory note issued to the County in the principal amount of $1,450,000, plus accrued interest equal to $179,244. A second portion of the proceeds was used to repay expenses advanced by the County in the amount of $135,614. A third portion was used to repay certain loans from the City to the former Redevelopment Agency in the amount of $787,340. Per the terms of the Agreement, $1,000,000 of the proceeds was deposited in the Abalone Cove Permanent Fund of the Joint Powers Improvement Authority. The remainder of the proceeds was accounted for in the former Redevelopment Agency’s Abalone Cove Fund. Concurrent with the execution of the Agreement, the County deeded its title in the Abalone Cove Beach Park to the former Redevelopment Agency. 75 CITY OF RANCHO PALOS VERDES NOTES TO FINANCIAL STATEMENTS JUNE 30, 2012 See independent auditors’ report. As part of the Agreement, the former Redevelopment Agency was required to transfer 17 percent of tax increment revenue to the Consolidated Fire Protection District of the County and 50.9 percent of tax increment revenue for debt repayment to the County. In accordance with the Agreement, the former Redevelopment Agency was to pay the Loan principal plus interest at 7.7654 percent over a 30-year period that began in 1992. However, these debt payments were to be deferred 10 years until the fiscal year ended June 30, 2002. As part of the deferral arrangement, the accrued interest from the inception of the Loan through June 30, 2002, in the amount of $7,314,944, was scheduled for payment over a 20-year period beginning in the fiscal year ended June 30, 2002 with no additional interest. The remaining balance of $10,274,119 was scheduled for payment to the County over a 20-year period beginning in the fiscal year ended June 30, 2002, with interest at 7.7654 percent. On November 1, 1997, the City, the former Redevelopment Agency and the County of Los Angeles entered into a Memorandum of Understanding (MOU) agreeing to restructure the repayment schedule of the debt owed to the County by the former Redevelopment Agency. In accordance with the terms of the MOU, the $10,000,000 loan principal owed to the County was cancelled. As consideration for the loan 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. Prior to Redevelopment Agency dissolution, the County withheld payment of the Agency’s net tax increment revenue (net of the 17 percent payment to the County Fire Protection District and the 20 percent housing set-aside amount) to offset the annual principal and interest charges. The principal of the 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. 76 CITY OF RANCHO PALOS VERDES NOTES TO FINANCIAL STATEMENTS JUNE 30, 2012 See independent auditors’ report. 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, 2012, a total of $2,676,496 in accumulated tax increment has been applied against this balance, including $363,697 applied during fiscal year 2011-12. The remaining balance at June 30, 2012, was $434,904. The accumulated amount of property tax increment withheld by the County prior to dissolution, in excess of amounts applied to principal and interest payments is recorded in the Successor Agency Fund as a prepaid item at June 30, 2012. The debt service schedule below summarizes all fixed principal and interest payments for the term of the bond. Because the payback period for the deferred interest amount will fluctuate depending on the availability of excess property tax revenue, no amounts have been included in the following schedule for repayment of the deferred interest. Year Ending June 30, Principal Interest Total 2013 120,000 250,250 370,250 2014 135,000 243,875 378,875 2015 155,000 236,625 391,625 2016 180,000 228,250 408,250 2017 200,000 218,750 418,750 2018-2022 1,420,000 905,500 2,325,500 2023-2027 2,275,000 448,875 2,723,875 2028 580,000 14,500 594,500 Totals 5,065,000$ 2,546,625$ 7,611,625$ NOTE #15 – RESTATEMENT OF BEGINNING NET ASSETS: The net assets of the governmental activities at July 1, 2011 were restated as follows: Net assets as previously reported – July 1, 2011 $152,271,142 To adjust for: Revenues related to long-term notes receivable, accrued unpaid interest and other amounts earned but not available were properly reported as deferred in the fund 77 CITY OF RANCHO PALOS VERDES NOTES TO FINANCIAL STATEMENTS JUNE 30, 2012 See independent auditors’ report. financial statements (modified accrual basis of accounting), however, they were not recognized as earned in the government-wide financial statements (accrual basis of accounting). 3,689,642 Net assets as restated – July 1, 2011 $ 155,960,784 78 SUPPLEMENTARY INFORMATION 79 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, 2012 Variance with Final Budget Positive Original Final Actual (Negative) REVENUES: Revenue from other agencies 1,558,979$ 4,047,567$ 139,340$ (3,908,227)$ Use of money and property 28,600 28,600 36,780 8,180 TOTAL REVENUES 1,587,579 4,076,167 176,120 (3,900,047) EXPENDITURES: Capital Outlay Infrastructure administration 70,000 25,500 25,437 63 Street improvements 4,885,532 2,772,335 2,531,917 240,418 Parks/Trails/Open Space improvements 1,102,000 2,256,268 229,547 2,026,721 Sewer improvements - 114,450 113,982 468 Building improvements 167,500 167,500 38,548 128,952 TOTAL EXPENDITURES 6,225,032 5,336,053 2,939,431 2,396,622 EXCESS (DEFICIENCY) OF REVENUES OVER (UNDER) EXPENDITURES (4,637,453) (1,259,886) (2,763,311) (1,503,425) OTHER FINANCING SOURCES: Transfers in 6,609,480 8,833,841 6,520,472 (2,313,369) NET CHANGE IN FUND BALANCE 1,972,027 7,573,955 3,757,161 (3,816,794) FUND BALANCE - BEGINNING OF YEAR 11,649,780 11,649,780 11,649,780 - FUND BALANCE - END OF YEAR 13,621,807$ 19,223,735$ 15,406,941$ (3,816,794)$ See independent auditors' report. Budgeted Amounts 80 CITY OF RANCHO PALOS VERDES JUNE 30, 2012 NONMAJOR GOVERNMENTAL FUNDS Special Revenues Fund Descriptions Special Revenue Funds are used to account for taxes and other revenues set aside in accordance with law or administrative regulation for a specific purpose. Air Quality Management – to account for AB2766 fees received to fund programs to reduce air pollution from motor vehicles. Community Development Block Grant (CDBG) – to account for Federal Grants received from the Department of Housing and Urban Development (HUD). El Prado – to account for taxes collected to maintain and service existing and proposed improvements to the common area of the El Prado neighborhood. Redevelopment Agency Housing Set-Aside – to account for the portion of redevelopment tax increment revenue set-aside for the development of affordable housing. Proposition A – to account for the City share of an additional one-half percent sales tax designated to fund certain public transportation orientated projects. Proposition C – to account for sales taxes received from the County and used to support public transit and related services. 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. Beautification – to account for monies received for the City’s recycling program used for community improvement, grants and promotion of recycling. Waste Reduction – to account for AB939 fees received for state mandated waste reduction and recycling plans and programs. Public Safety Grants – to account for federal grant funds for local law enforcement supplemental services, AB3229 funds used for additional law enforcement services and public safety technology equipment. 1972 Act Landscaping and Lighting District (1972 Act) – to account for revenues and costs associated with the City’s landscaping and lighting district. 81 CITY OF RANCHO PALOS VERDES JUNE 30, 2012 NONMAJOR GOVERNMENTAL FUNDS 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. Joint Powers Improvement Authority - Portuguese Bend – to account for maintenance and repairs of landslide abatement improvements in the Portuguese Bend Project area. Habitat Restoration – to account for fees paid by developers for conservation easements to be used exclusively for habitat restoration efforts on City owned property. Measure A – to account for the voter approved 1992 and 1996 Measure A funds and other state and county grants used for the acquisition of open space and park improvements. Abalone Cove Sewer Assessment District – to account for property assessments used to partially pay for operation and maintenance of the Abalone Cove sewer system. Dr. Allen and Charlotte Ginsburg Cultural Arts Building (Ginsburg Cultural Art Bldg) – 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. Bikeways – to account for state funds that are used for the construction of bikeways and pedestrian facilities. Environmental Excise Tax – to account for taxes received in connection with new construction within the City. Quimby – to account for developer paid fees or the dedication of land for park and recreation purposes. Debt Service Fund Descriptions Redevelopment Agency Debt Service – to account for the accumulation of resources and for the payment of principal and interest on the former redevelopment agency debt. 82 CITY OF RANCHO PALOS VERDES JUNE 30, 2012 NONMAJOR GOVERNMENTAL FUNDS Capital Projects Fund Descriptions Capital Projects Funds are used to account for financial resources used for the acquisition or construction of major capital facilities. Redevelopment Agency - Abalone Cove – to account for monies used for landslide abatement in the Abalone Cove area of the Redevelopment Agency Project Area. Redevelopment Agency - Portuguese Bend – to account for monies used for landslide abatement in the Portuguese Bend area of the Redevelopment Agency Project Area. 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. Subregion One Maintenance – to account for monies used to maintain public improvements and habitat areas dedicated to the City upon completion of the Subregion One residential development project also known as Oceanfront Estates. As part of the development agreement, the City received a $750,000 non-expendable deposit. The interest earnings contribute to the maintenance of the public open space. Joint Powers Improvement Authority - Abalone Cove – to account for monies received as part of a July 1991 Reimbursement and Settlement Agreement with the County of Los Angeles. As a part of this Agreement, the Authority received a $1,000,000 non-expendable deposit. The interest earnings are used to pay for maintenance and repair of Abalone Cove landslide abatement improvements. 83 CITY OF RANCHO PALOS VERDES COMBINING BALANCE SHEET OTHER GOVERNMENTAL FUNDS June 30, 2012 Special Revenue Funds Redevelopment Air Agency Quality Housing Management CDBG El Prado Set-Aside Proposition A Cash and investments 88,198$ -$ 16,620$ -$ 170,857$ Receivables: Taxes - - 142 - - Interest 57 - 12 - 65 Notes - 479,024 - - - Other 12,932 129,855 - - - Prepaid items - - - - - Advance to other funds - - - - - TOTAL ASSETS 101,187$ 608,879$ 16,774$ -$ 170,922$ LIABILITIES: Accounts payable and accrued liabilities -$ 51,371$ -$ -$ 501$ Due to other funds - 78,521 - - - Deferred revenue - 521,434 - - - TOTAL LIABILITIES - 651,326 - - 501 FUND BALANCES: Non-Spendable Endowment principal - - - - Reimbursement settlement - agreement - - - - - Prepaid items - - - - - Long term advances - - - - - Habitat restoration - - - - - Restricted 101,187 - 16,774 170,421 Committed - - - - Assigned - - - - Unassigned - (42,447) - - - TOTAL FUND BALANCES 101,187 (42,447) 16,774 - 170,421 - TOTAL LIABILITIES - AND FUND BALANCES 101,187$ 608,879$ 16,774$ -$ 170,922$ See independent auditors' report. FUND BALANCES ASSETS LIABILITIES AND 84 Special Revenue Funds (Continued) Public Waste Safety Proposition C Measure R Beautification Reduction Grants 1972 Act 1911 Act 1,340,334$ 391,221$ 1,061,087$ 279,997$ 20,102$ 66,549$ 1,660,622$ - - - - - 15,550 36,313 1,477 705 835 264 86 180 1,280 - - - - - - - - - 4,000 11,738 - - - - - - - - - - - - - - - - - 1,341,811$ 391,926$ 1,065,922$ 291,999$ 20,188$ 82,279$ 1,698,215$ -$ -$ 439$ 12,122$ -$ 4,200$ 27,831$ - - - - - - - - - - 10,916$ - - - - - 439 23,038 - 4,200 27,831 - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 1,341,811 391,926 1,065,483 268,961 20,188 78,079 1,670,384 - - - - - - - - - - - - - - - - - - - - - 1,341,811 391,926 1,065,483 268,961 20,188 78,079 1,670,384 1,341,811$ 391,926$ 1,065,922$ 291,999$ 20,188$ 82,279$ 1,698,215$ (Continued) 85 CITY OF RANCHO PALOS VERDES COMBINING BALANCE SHEET OTHER GOVERNMENTAL FUNDS (CONTINUED) June 30, 2012 Special Revenue Funds Dr. Allen and Joint Powers Abalone Cove Charlotte Improvement Sewer Ginsburg Authority Habitat Assessment Cultural Portuguese Bend Restoration Measure A District Arts Building Cash and investments 327,665$ 229,069$ 7,440$ 63,869$ 158,365$ Receivables: Taxes - - - 2,470 - Interest - 179 19 73 115 Notes - - - - - Other - 23,683 100,000 - - Prepaid items - - - - - Advance to other funds - - - - - TOTAL ASSETS 327,665$ 252,931$ 107,459$ 66,412$ 158,480$ LIABILITIES: Accounts payable and accrued liabilities 17,941$ 31,890$ -$ 27,141$ -$ Due to other funds - - 73,144 - - Deferred revenue - - 100,000 - - TOTAL LIABILITIES 17,941 31,890 173,144 27,141 - FUND BALANCES: Non-Spendable Endowment principal - - - - - Reimbursement settlement agreement - - - - - Prepaid items - - - - - Long term advances - - - - - Habitat restoration - 74,696 - - - Restricted 309,724 146,345 - 39,271 158,480 Committed - - - - - Assigned - - - - - Unassigned - - (65,685) - - TOTAL FUND BALANCES 309,724 221,041 (65,685) 39,271 158,480 TOTAL LIABILITIES AND FUND BALANCES 327,665$ 252,931$ 107,459$ 66,412$ 158,480$ See independent auditors' report. ASSETS FUND BALANCES LIABILITIES AND 86 Total Redevelopment Donor Special Agency Restricted Environmental Revenue Debt Contributions Bikeways Excise Tax Quimby Funds Service 406,513$ 61$ 447,706$ 29,400$ 6,765,675$ -$ - - - - 54,475 - 296 - 321 21 5,985 - - - - - 479,024 - - - - - 282,208 - - - - - - - - - - - - - 406,809$ 61$ 448,027$ 29,421$ 7,587,367$ -$ -$ -$ 33,502$ -$ 206,938$ -$ - - - - 151,665 - - - - - 632,350 - - - 33,502 - 990,953 - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 74,696 - 406,809 61 414,525 29,421 6,629,850 - - - - - - - - - - - - - - - - - (108,132) - 406,809 61 414,525 29,421 6,596,414 - 406,809$ 61$ 448,027$ 29,421$ 7,587,367$ -$ (Continued) Special Revenue Funds (Continued) 87 CITY OF RANCHO PALOS VERDES COMBINING BALANCE SHEET OTHER GOVERNMENTAL FUNDS (CONTINUED) June 30, 2012 Capital Projects Funds Redevelopment Redevelopment Total Agency Agency Capital Abalone Portuguese Projects Cove Bend Funds ASSETS Cash and investments -$ -$ -$ Receivables: Taxes - - - Interest - - - Notes - - - Other - - - Prepaid items - - - Advance to other funds - - - TOTAL ASSETS -$ -$ -$ LIABILITIES: Accounts payable and accrued liabilities -$ -$ -$ Due to other funds - - - Deferred revenue - - - TOTAL LIABILITIES - - - FUND BALANCES: Non-Spendable Endowment principal - - - Reimbursement settlement agreement - - - Prepaid items - - - Long term advances - - - Habitat restoration - - - Restricted - - - Committed - - - Assigned - - - Unassigned - - - TOTAL FUND BALANCES - - - TOTAL LIABILITIES AND FUND BALANCES -$ -$ -$ See independent auditors' report. FUND BALANCES LIABILITIES AND 88 Permanent Funds Joint Powers Total Subregion Improvement Total Other One Authority Permanent Governmental Maintenance Abalone Cove Funds Funds 779,889$ 1,205,326$ 1,985,215$ 8,750,890$ - - - 54,475 573 2 575 6,560 - - - 479,024 - - - 282,208 - - - - - - - - 780,462$ 1,205,328$ 1,985,790$ 9,573,157$ 6,903$ 2,514$ 9,417$ 216,355$ - - - 151,665 - - - 632,350 6,903 2,514 9,417 1,000,370 750,000 - 750,000 750,000 - 1,000,000 1,000,000 1,000,000 - - - - - - - - - - - 74,696 23,559 202,814 226,373 6,856,223 - - - - - - - - - - - (108,132) 773,559 1,202,814 1,976,373 8,572,787 780,462$ 1,205,328$ 1,985,790$ 9,573,157$ (Continued) 89 CITY OF RANCHO PALOS VERDES COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES - OTHER GOVERNMENTAL FUNDS For the year ended June 30, 2012 Redevelopment Air Agency Quality Housing Management CDBG El Prado Set-Aside Proposition A REVENUES: Taxes -$ -$ 1,973$ -$ -$ Revenue from other agencies 52,390 173,092 - - 626,793 Use of money and property 190 - 49 2 242 Other revenues - - - - - TOTAL REVENUES 52,580 173,092 2,022 2 627,035 EXPENDITURES: Current: Administration - - - - - Public safety - - - - - Public works - - 29 - 582,217 Community development - - - 288 - Parks and recreation - - - - - Capital outlay - 215,539 - - - Debt service - principal - - - - - Debt service - interest - - - - - TOTAL EXPENDITURES - 215,539 29 288 582,217 EXCESS (DEFICIENCY) OF REVENUES OVER (UNDER) EXPENDITURES 52,580 (42,447) 1,993 (286) 44,818 OTHER FINANCING SOURCES (USES): Transfers in - - - - - Transfers out - - - - - TOTAL OTHER FINANCING SOURCES (USES)- - - - - EXTRAORDINARY GAIN (LOSS)- - - (1,827,132) - NET CHANGE IN FUND BALANCES 52,580 (42,447) 1,993 (1,827,418) 44,818 FUND BALANCES (DEFICIT) - BEGINNING OF YEAR 48,607 - 14,781 1,827,418 125,603 FUND BALANCES (DEFICIT) - END OF YEAR 101,187$ (42,447)$ 16,774$ -$ 170,421$ See independent auditors' report. Special Revenue Funds 90 Public Waste Safety Proposition C Measure R Beautification Reduction Grants 1972 Act 1911 Act -$ -$ -$ -$ -$ 258,814$ 504,991$ 521,486 387,409 - 23,533 100,000 - - 6,050 2,597 311,734 208,076 256 570 5,419 - - - - - - - 527,536 390,006 311,734 231,609 100,256 259,384 510,410 - - - - - - - - - - - - - - - - 20,223 161,081 - 75,342 419,984 - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 20,223 161,081 - 75,342 419,984 527,536 390,006 291,511 70,528 100,256 184,042 90,426 - - - - - - - (756,400) (628,212) (142,810) (110,000) (100,000) (200,000) (72,688) (756,400) (628,212) (142,810) (110,000) (100,000) (200,000) (72,688) - - - - - - - (228,864) (238,206) 148,701 (39,472) 256 (15,958) 17,738 1,570,675 630,132 916,782 308,433 19,932 94,037 1,652,646 1,341,811$ 391,926$ 1,065,483$ 268,961$ 20,188$ 78,079$ 1,670,384$ (Continued) Special Revenue Funds (Continued) 91 CITY OF RANCHO PALOS VERDES COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES - OTHER GOVERNMENTAL FUNDS For the year ended June 30, 2012 Dr. Allen and Joint Powers Abalone Cove Charlotte Improvement Sewer Ginsburg Authority Habitat Assessment Cultural Portuguese Bend Restoration Measure A District Arts Building REVENUES: Taxes -$ -$ -$ 52,948$ -$ Revenue from other agencies - 23,682 160,641 - - Use of money and property - 753 70 289 533 Other revenues - - - 1,217 - TOTAL REVENUES - 24,435 160,711 54,454 533 EXPENDITURES: Current: Administration - - - - - Public safety - - - - - Public works 52,606 156,452 - 122,561 - Community development - - - - - Parks and recreation - - - - 25,000 Capital outlay - - - - - Debt service - principal - - - - - Debt service - interest - - - - - TOTAL EXPENDITURES 52,606 156,452 - 122,561 25,000 EXCESS OF REVENUES OVER (UNDER) EXPENDITURES (52,606) (132,017) 160,711 (68,107) (24,467) OTHER FINANCING SOURCES (USES): Transfers in 60,000 90,000 - 10,700 - Transfers out - - (100,000) - - TOTAL OTHER FINANCING SOURCES (USES)60,000 90,000 (100,000) 10,700 - EXTRAORDINARY GAIN (LOSS)- - - - - NET CHANGE IN FUND BALANCES 7,394 (42,017) 60,711 (57,407) (24,467) FUND BALANCE (DEFICIT) - BEGINNING OF YEAR 302,330 263,058 (126,396) 96,678 182,947 FUND BALANCES (DEFICIT) - END OF YEAR 309,724$ 221,041$ (65,685)$ 39,271$ 158,480$ See independent auditors' report. Special Revenue Funds 92 Total Redevelopment Donor Special Agency Restricted Environmental Revenue Debt Contributions Bikeways Excise Tax Quimby Funds Service -$ -$ -$ -$ 818,726$ 442,150$ - - - - 2,069,026 - 1,290 10 1,417 93 539,640 - .- 35,955 - 37,172 - 1,290 10 37,372 93 3,464,564 442,150 - - - - - 100,940 - - - - - - - - 38,245 - 1,628,740 - - - - - 288 - - - - - 25,000 - - - - - 215,539 - - - - - - 463,698 - - - - - 497,934 - - 38,245 - 1,869,567 1,062,572 1,290 10 (873) 93 1,594,997 (620,422) - - - - 160,700 - - - - - (2,110,110) - - - - - (1,949,410) - - - - - (1,827,132) 18,571,421 1,290 10 (873) 93 (2,181,545) 17,950,999 405,519 51 415,398 29,328 8,777,959 (17,950,999) 406,809$ 61$ 414,525$ 29,421$ 6,596,414$ -$ (Continued) Special Revenue Funds (Continued) 93 CITY OF RANCHO PALOS VERDES COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES - OTHER GOVERNMENTAL FUNDS (CONTINUED) For the year ended June 30, 2012 Capital Projects Funds Redevelopment Redevelopment Total Agency Agency Capital Abalone Portuguese Projects Cove Bend Funds REVENUES: Taxes -$ -$ -$ Revenue from other agencies - - - Use of money and property - - - Other revenues - 29,169 29,169 TOTAL REVENUES - 29,169 29,169 EXPENDITURES: Current: Administration - - - Public safety - - - Public works - 132,242 132,242 Community development - - - Parks and recreation - - - Capital outlay - - - Debt service - principal - - - Debt service - interest - - - TOTAL EXPENDITURES - 132,242 132,242 EXCESS OF REVENUES OVER (UNDER) EXPENDITURES - (103,073) (103,073) OTHER FINANCING SOURCES (USES): Transfers in - - - Transfers out - - - TOTAL OTHER FINANCING SOURCES (USES)- - - EXTRAORDINARY GAIN (LOSS)(6,216) (221,585) (227,801) NET CHANGE IN FUND BALANCES (6,216) (324,658) (330,874) FUND BALANCES (DEFICIT) - BEGINNING OF YEAR 6,216 324,658 330,874 FUND BALANCES (DEFICIT) - END OF YEAR -$ -$ -$ See independent auditors' report. 94 Permanent Funds Joint Powers Total Subregion Improvement Total Other One Authority Permanent Governmental Maintenance Abalone Cove Funds Funds -$ -$ -$ 1,260,876$ - - - 2,069,026 2,438 5 2,443 542,083 - - - 66,341 2,438 5 2,443 3,938,326 - - - 100,940 - - - - 64,886 89,968 154,854 1,915,836 - - - 288 - - - 25,000 - - - 215,539 - - - 463,698 - - - 497,934 64,886 89,968 154,854 3,219,235 (62,448) (89,963) (152,411) 719,092 60,000 - 60,000 220,700 - - - (2,110,110) 60,000 - 60,000 (1,889,410) - - - 16,516,488 (2,448) (89,963) (92,411) 15,346,170 776,007 1,292,777 2,068,784 (6,773,383) 773,559$ 1,202,814$ 1,976,373$ 8,572,787$ (Continued) 95 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, 2012 Variance with Final Budget Positive Original Final Actual (Negative) REVENUES: Revenue from other agencies 50,000$ 50,000$ 52,390$ 2,390$ Use of money and property 260 260 190 (70) TOTAL REVENUES 50,260 50,260 52,580 2,320 EXPENDITURES: Public works - - - - EXCESS (DEFICIENCY) OF REVENUES OVER (UNDER) EXPENDITURES 50,260 50,260 52,580 2,320 FUND BALANCE - BEGINNING OF YEAR 48,607 48,607 48,607 - FUND BALANCE - END OF YEAR 98,867$ 98,867$ 101,187$ 2,320$ See independent auditors' report. Budgeted Amounts 96 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, 2012 Variance with Final Budget Positive Original Final Actual (Negative) REVENUES: Revenue from other agencies 201,673$ 324,364$ 173,092$ (151,272)$ EXPENDITURES: Capital outlay 201,673 254,364 215,539 38,825 EXCESS (DEFICIENCY) OF REVENUES OVER (UNDER) EXPENDITURES - 70,000 (42,447) (112,447) OTHER FINANCING USES: Transfers in - - - - Transfers out - - - - NET CHANGE IN FUND BALANCE - 70,000 (42,447) (112,447) FUND BALANCE - BEGINNING OF YEAR - - - - FUND BALANCE - END OF YEAR -$ 70,000$ (42,447)$ (112,447)$ See independent auditors' report. Budgeted Amounts 97 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, 2012 Variance with Final Budget Positive Original Final Actual (Negative) REVENUES: Taxes 1,900$ 1,900$ 1,973$ 73$ Use of money and property 70 70 49 (21) TOTAL REVENUES 1,970 1,970 2,022 52 EXPENDITURES: Public works 1,000 1,000 29 971 EXCESS (DEFICIENCY) OF REVENUES OVER (UNDER) EXPENDITURES 970 970 1,993 1,023 FUND BALANCE - BEGINNING OF YEAR 14,781 14,781 14,781 - FUND BALANCE - END OF YEAR 15,751$ 15,751$ 16,774$ 1,023$ See independent auditors' report. Budgeted Amounts 98 CITY OF RANCHO PALOS VERDES SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL REDEVELOPMENT AGENCY HOUSING SET-ASIDE SPECIAL REVENUE FUND For the year ended June 30, 2012 Variance with Final Budget Positive Original Final Actual (Negative) REVENUES: Taxes 234,500$ 234,500$ -$ (234,500)$ Use of money and property 100 100 2 (98) TOTAL REVENUES 234,600 234,600 2 (234,598) EXPENDITURES: Community Development Redevelopment 12,500 12,500 288 12,212 EXCESS (DEFICIENCY) OF REVENUES OVER (UNDER) EXPENDITURES 222,100 222,100 (286) (222,386) EXTRAORDINARY LOSS ON DISSOLUTION OF REDEVELOPMENT AGENCY - - (1,827,132) (1,827,132) NET CHANGE IN FUND BALANCE 222,100 222,100 (1,827,418) (2,049,518) FUND BALANCE - BEGINNING OF YEAR 1,827,418 1,827,418 1,827,418 - FUND BALANCE - END OF YEAR 2,049,518$ 2,049,518$ -$ (2,049,518)$ See independent auditors' report and notes to financial statements. Budgeted Amounts 99 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, 2012 Variance with Final Budget Positive Original Final Actual (Negative) REVENUES: Revenue from other agencies 586,200$ 586,200$ 626,793$ 40,593$ Use of money and property 180 180 242 62 TOTAL REVENUES 586,380 586,380 627,035 40,655 EXPENDITURES: Public works 595,100 597,592 582,217 15,375 EXCESS (DEFICIENCY) OF REVENUES OVER (UNDER) EXPENDITURES (8,720) (11,212) 44,818 56,030 OTHER FINANCING USES: Transfers in - - - - NET CHANGE IN FUND BALANCE (8,720) (11,212) 44,818 56,030 FUND BALANCE - BEGINNING OF YEAR 125,603 125,603 125,603 - FUND BALANCE - END OF YEAR 116,883$ 114,391$ 170,421$ 56,030$ See independent auditors' report. Budgeted Amounts 100 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, 2012 Variance with Final Budget Positive Original Final Actual (Negative) REVENUES: Revenue from other agencies 488,400$ 488,400$ 521,486$ 33,086$ Use of money and property 6,830 6,830 6,050 (780) TOTAL REVENUES 495,230 495,230 527,536 32,306 OTHER FINANCING USES: Transfers out (1,823,327) (2,063,327) (756,400) 1,306,927 NET CHANGE IN FUND BALANCE (1,328,097) (1,568,097) (228,864) 1,339,233 FUND BALANCE - BEGINNING OF YEAR 1,570,675 1,570,675 1,570,675 - FUND BALANCE - END OF YEAR 242,578$ 2,578$ 1,341,811$ 1,339,233$ See independent auditors' report. Budgeted Amounts 101 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, 2012 Variance with Final Budget Positive Original Final Actual (Negative) REVENUES: Revenue from other agencies 364,600$ 364,600$ 387,409$ 22,809$ Use of money and property - - 2,597 2,597 TOTAL REVENUES 364,600 364,600 390,006 25,406 OTHER FINANCING USES: Transfers out (364,000) (992,212) (628,212) 364,000 NET CHANGE IN FUND BALANCE 600 (627,612) (238,206) 389,406 FUND BALANCE - BEGINNING OF YEAR 630,132 630,132 630,132 - FUND BALANCE - END OF YEAR 630,732$ 2,520$ 391,926$ 389,406$ See independent auditors' report. Budgeted Amounts 102 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, 2012 Variance with Final Budget Positive Original Final Actual (Negative) REVENUES: Other revenues -$ -$ -$ -$ Use of money and property 281,600 281,600 311,734 30,134 TOTAL REVENUES 281,600 281,600 311,734 30,134 EXPENDITURES: Public works 95,400 170,300 20,223 150,077 EXCESS (DEFICIENCY) OF REVENUES OVER (UNDER) EXPENDITURES 186,200 111,300 291,511 180,211 OTHER FINANCING USES: Transfers out (116,000) (616,500) (142,810) 473,690 NET CHANGE IN FUND BALANCE 70,200 (505,200) 148,701 653,901 FUND BALANCE - BEGINNING OF YEAR 916,782 916,782 916,782 - FUND BALANCE - END OF YEAR 986,982$ 411,582$ 1,065,483$ 653,901$ See independent auditors' report. Budgeted Amounts 103 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, 2012 Variance with Final Budget Positive Original Final Actual (Negative) REVENUES: Revenue from other agencies 47,500$ 47,500$ 23,533$ (23,967)$ Use of money and property 156,675 156,675 208,076 51,401 TOTAL REVENUES 204,175 204,175 231,609 27,434 EXPENDITURES: Public works 182,650 182,150 161,081 21,069 EXCESS (DEFICIENCY) OF REVENUES OVER (UNDER) EXPENDITURES 21,525 22,025 70,528 48,503 OTHER FINANCING USES: Transfers out (52,000) (122,000) (110,000) 12,000 NET CHANGE IN FUND BALANCE (30,475) (99,975) (39,472) 60,503 FUND BALANCE - BEGINNING OF YEAR 308,433 308,433 308,433 - FUND BALANCE - END OF YEAR 277,958$ 208,458$ 268,961$ 60,503$ See independent auditors' report. Budgeted Amounts 104 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, 2012 Variance with Final Budget Positive Original Final Actual (Negative) REVENUES: Revenue from other agencies -$ 100,000$ 100,000$ -$ Use of money and property 170 170 256 86 TOTAL REVENUES 170 100,170 100,256 86 EXPENDITURES: Public safety 19,600 - - - EXCESS (DEFICIENCY) OF REVENUES OVER (UNDER) EXPENDITURES (19,430) 100,170 100,256 86 OTHER FINANCING USES: Transfers out - (100,000) (100,000) - NET CHANGE IN FUND BALANCE (19,430) 170 256 86 FUND BALANCE - BEGINNING OF YEAR 19,932 19,932 19,932 - FUND BALANCE - END OF YEAR 502$ 20,102$ 20,188$ 86$ See independent auditors' report. Budgeted Amounts 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, 2012 Variance with Final Budget Positive Original Final Actual (Negative) REVENUES: Taxes 258,000$ 258,000$ 258,814$ 814$ Use of money and property 180 180 570 390 TOTAL REVENUES 258,180 258,180 259,385 1,204 EXPENDITURES: Public works 71,800 73,800 75,342 (1,542) EXCESS (DEFICIENCY) OF REVENUES OVER (UNDER) EXPENDITURES 186,380 184,380 184,042 (338) OTHER FINANCING USES: Transfers out (200,000) (200,000) (200,000) - NET CHANGE IN FUND BALANCE (13,620) (15,620) (15,958) (338) FUND BALANCE - BEGINNING OF YEAR 94,037 94,037 94,037 - FUND BALANCE - END OF YEAR 80,417$ 78,417$ 78,079$ (338)$ See independent auditors' report. Budgeted Amounts 106 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, 2012 Variance with Final Budget Positive Original Final Actual (Negative) REVENUES: Taxes 440,000$ 440,000$ 504,991$ 64,991$ Use of money and property 7,600 7,600 5,419 (2,181) TOTAL REVENUES 447,600 447,600 510,410 62,810 EXPENDITURES: Public works 444,400 444,400 419,984 24,416 EXCESS (DEFICIENCY) OF REVENUES OVER (UNDER) EXPENDITURES 3,200 3,200 90,426 87,226 OTHER FINANCING USES: Transfers out (202,000) (202,000) (72,688) 129,312 NET CHANGE IN FUND BALANCE (198,800) (198,800) 17,738 216,538 FUND BALANCE - BEGINNING OF YEAR 1,652,646 1,652,646 1,652,646 - FUND BALANCE - END OF YEAR 1,453,846$ 1,453,846$ 1,670,384$ 216,538$ See independent auditors' report. Budgeted Amounts 107 CITY OF RANCHO PALOS VERDES SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL JOINT POWERS IMPROVEMENT AUTHORITY PORTUGUSE BEND SPECIAL REVENUE FUND For the year ended June 30, 2012 Variance with Final Budget Positive Original Final Actual (Negative) REVENUES: Use of money and property 1,220$ 1,220$ -$ (1,220)$ EXPENDITURES: Public works 143,350 143,350 52,606 90,744 EXCESS (DEFICIENCY) OF REVENUES OVER (UNDER) EXPENDITURES (142,130) (142,130) (52,606) 89,524 OTHER FINANCING SOURCES: Transfers in 60,000 60,000 60,000 - NET CHANGE IN FUND BALANCE (82,130) (82,130) 7,394 89,524 FUND BALANCE - BEGINNING OF YEAR 302,330 302,330 302,330 - FUND BALANCE - END OF YEAR 220,200$ 220,200$ 309,724$ 89,524$ See independent auditors' report. Budgeted Amounts 108 CITY OF RANCHO PALOS VERDES SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL HABITAT RESTORATION SPECIAL REVENUE FUND For the year ended June 30, 2012 Variance with Final Budget Positive Original Final Actual (Negative) REVENUES: Revenue from other agencies -$ -$ 23,682$ 23,682$ Use of money and property 1,300 1,300 753 (547) TOTAL REVENUES 1,300 1,300 24,435 23,135 EXPENDITURES: Public works 129,000 133,000 156,452 (23,452) EXCESS (DEFICIENCY) OF REVENUES OVER (UNDER) EXPENDITURES (127,700) (131,700) (132,017) (317) OTHER FINANCING SOURCES: Transfers in 90,000 90,000 90,000 - NET CHANGE IN FUND BALANCE (37,700) (41,700) (42,017) (317) FUND BALANCE - BEGINNING OF YEAR 263,058 263,058 263,058 - FUND BALANCE - END OF YEAR 225,358$ 221,358$ 221,041$ (317)$ See independent auditors' report. Budgeted Amounts 109 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, 2012 Variance with Final Budget Positive Original Final Actual (Negative) REVENUES: Revenue from other agencies 250,000$ 250,000$ 160,641$ (89,359)$ Use of money and property 170 170 70 (100) TOTAL REVENUES 250,170 250,170 160,711 (89,459) OTHER FINANCING USES: Transfers out (250,000) (250,000) (100,000) 150,000 NET CHANGE IN FUND BALANCE 170 170 60,711 60,541 FUND BALANCE - BEGINNING OF YEAR (126,396) (126,396) (126,396) - FUND BALANCE (DEFICIT) - END OF YEAR (126,226)$ (126,226)$ (65,685)$ 60,541$ See independent auditors' report. Budgeted Amounts 110 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, 2012 Variance with Final Budget Positive Original Final Actual (Negative) REVENUES: Taxes 46,600$ 46,600$ 52,948$ 6,348$ Other revenues - - 1,217 1,217 Use of money and property 260 260 289 29 TOTAL REVENUES 46,860 46,860 54,454 7,594 EXPENDITURES: Public works 63,900 133,800 122,561 11,239 EXCESS (DEFICIENCY) OF REVENUES OVER (UNDER) EXPENDITURES (17,040) (86,940) (68,107) 18,833 OTHER FINANCING SOURCES: Transfers in 10,700 10,700 10,700 - NET CHANGE IN FUND BALANCE (6,340) (76,240) (57,407) 18,833 FUND BALANCE - BEGINNING OF YEAR 96,678 96,678 96,678 - FUND BALANCE - END OF YEAR 90,338$ 20,438$ 39,271$ 18,833$ See independent auditors' report. Budgeted Amounts 111 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, 2012 Variance with Final Budget Positive Original Final Actual (Negative) REVENUES: Use of money and property 920$ 920$ 533$ (387)$ TOTAL REVENUES 920 920 533 (387) EXPENDITURES: Park and recreation - 25,000 25,000 - EXCESS (DEFICIENCY) OF REVENUES OVER (UNDER) EXPENDITURES 920 (24,080) (24,467) (387) FUND BALANCE - BEGINNING OF YEAR 182,947 182,947 182,947 - FUND BALANCE - END OF YEAR 183,867$ 158,867$ 158,480$ (387)$ See independent auditors' report. Budgeted Amounts 112 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, 2012 Variance with Final Budget Positive Original Final Actual (Negative) REVENUES: Use of money and property 2,020$ 2,020$ 1,290$ (730)$ FUND BALANCE - BEGINNING OF YEAR 405,519 405,519 405,519 - FUND BALANCE - END OF YEAR 407,539$ 407,539$ 406,809$ (730)$ See independent auditors' report. Budgeted Amounts 113 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, 2012 Variance with Final Budget Positive Original Final Actual (Negative) REVENUES: Revenue from other agencies 25,000$ 25,000$ -$ (25,000)$ Use of money and property - - 10 10 TOTAL REVENUES 25,000 25,000 10 (24,990) OTHER FINANCING USES: Transfers out (25,000) (25,000) - 25,000 NET CHANGE IN FUND BALANCE - - 10 10 FUND BALANCE - BEGINNING OF YEAR 51 51 51 - FUND BALANCE - END OF YEAR 51$ 51$ 61$ 10$ See independent auditors' report. Budgeted Amounts 114 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, 2012 Variance with Final Budget Positive Original Final Actual (Negative) REVENUES: Other revenues -$ -$ 35,955$ 35,955$ Use of money and property 410 410 1,417 1,007 TOTAL REVENUES 410 410 37,372 36,962 EXPENDITURES: Public works 51,000 38,245 38,245 - EXCESS (DEFICIENCY) OF REVENUES OVER (UNDER) EXPENDITURES (50,590) (37,835) (873) 36,962 OTHER FINANCING USES: Transfers out - - - - NET CHANGE IN FUND BALANCE (50,590) (37,835) (873) 36,962 FUND BALANCE - BEGINNING OF YEAR 415,398 415,398 415,398 - FUND BALANCE - END OF YEAR 364,808$ 377,563$ 414,525$ 36,962$ See independent auditors' report. Budgeted Amounts 115 CITY OF RANCHO PALOS VERDES SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL QUIMBY SPECIAL REVENUE FUND For the year ended June 30, 2012 Variance with Final Budget Positive Original Final Actual (Negative) REVENUES: Other revenues -$ -$ -$ -$ Use of money and property 150 150 93 (57) TOTAL REVENUES 150 150 93 (57) EXPENDITURES: Park and recreation 29,000 - - - EXCESS (DEFICIENCY) OF REVENUES OVER (UNDER) EXPENDITURES (28,850) 150 93 (57) FUND BALANCE - BEGINNING OF YEAR 29,328 29,328 29,328 - FUND BALANCE - END OF YEAR 478$ 29,478$ 29,421$ (57)$ See independent auditors' report. Budgeted Amounts 116 CITY OF RANCHO PALOS VERDES STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL REDEVELOPMENT AGENCY DEBT SERVICE FUND For the year ended June 30, 2012 Variance with Final Budget Positive Original Final Actual (Negative) REVENUES: Taxes 938,000$ 938,000$ 442,150$ (495,850)$ EXPENDITURES: Current: Administration 21,000 21,000 17,373 3,627 Pass through to other agencies 199,300 199,300 83,567 115,733 Debt service: Principal 428,700 428,700 463,698 (34,998) Interest and fiscal charges 905,250 905,250 497,934 407,316 TOTAL EXPENDITURES 1,554,250 1,554,250 1,062,572 491,678 EXCESS (DEFICIENCY) OF REVENUES OVER (UNDER) EXPENDITURES (616,250) (616,250) (620,422) (4,172) EXTRAORDINARY LOSS ON DISSOLUTION OF REDEVELOPMENT AGENCY - - 18,571,421 18,571,421 NET CHANGE IN FUND BALANCE (616,250) (616,250) 17,950,999 18,567,249 FUND DEFICIT - BEGINNING OF YEAR (17,950,999) (17,950,999) (17,950,999) - FUND DEFICIT - END OF YEAR (18,567,249)$ (18,567,249)$ -$ 18,567,249$ See independent auditors' report. Budgeted Amounts 117 CITY OF RANCHO PALOS VERDES SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL REDEVELOPMENT AGENCY ABALONE COVE CAPITAL PROJECTS FUND For the year ended June 30, 2012 Variance with Final Budget Positive Original Final Actual (Negative) REVENUES: Use of money and property -$ -$ -$ -$ EXTRAORDINARY LOSS ON DISSOLUTION OF REDEVELOPMENT AGENCY - - (6,216) (6,216) NET CHANGE IN FUND BALANCE - - (6,216) (6,216) FUND BALANCE - BEGINNING OF YEAR 6,216 6,216 6,216 - FUND BALANCE - END OF YEAR 6,216$ 6,216$ -$ (6,216)$ See independent auditors' report. Budgeted Amounts 118 CITY OF RANCHO PALOS VERDES SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL REDEVELOPMENT AGENCY PORTUGUESE BEND CAPITAL PROJECTS FUND For the year ended June 30, 2012 Variance with Final Budget Positive Original Final Actual (Negative) REVENUES: Other revenues - - 29,169 29,169 Use of money and property 1,370$ 1,370$ -$ (1,370)$ TOTAL REVENUES 1,370 1,370 29,169 27,799 EXPENDITURES: Public works 36,800 156,781 132,242 24,540 EXCESS (DEFICIENCY) OF REVENUES OVER (UNDER) EXPENDITURES (35,430) (155,411) (103,073) 52,339 EXTRAORDINARY LOSS ON DISSOLUTION OF REDEVELOPMENT AGENCY - - (221,585) (221,585) NET CHANGE IN FUND BALANCE (35,430) (155,411) (324,658) (169,247) FUND BALANCE - BEGINNING OF YEAR 324,658 324,658 324,658 - FUND BALANCE - END OF YEAR 289,228$ 169,247$ -$ (169,247)$ See independent auditors' report. Budgeted Amounts 119 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, 2012 Variance with Final Budget Positive Original Final Actual (Negative) REVENUES: Use of money and property 3,800$ 3,800$ 2,438$ (1,362)$ EXPENDITURES: Public works 70,000 80,000 64,886 15,114 EXCESS (DEFICIENCY) OF REVENUES OVER (UNDER) EXPENDITURES (66,200) (76,200) (62,448) 13,752 OTHER FINANCING SOURCES: Transfers in 60,000 60,000 60,000 - NET CHANGE IN FUND BALANCE (6,200) (16,200) (2,448) 13,752 FUND BALANCE - BEGINNING OF YEAR 776,007 776,007 776,007 - FUND BALANCE - END OF YEAR 769,807$ 759,807$ 773,559$ 13,752$ See independent auditors' report. Budgeted Amounts 120 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, 2012 Variance with Final Budget Positive Original Final Actual (Negative) REVENUES: Use of money and property 6,200$ 6,200$ 5$ (6,195)$ EXPENDITURES: Public works 49,750 49,750 89,968 (40,218) EXCESS (DEFICIENCY) OF REVENUES OVER (UNDER) EXPENDITURES (43,550) (43,550) (89,963) (46,413) FUND BALANCE - BEGINNING OF YEAR 1,292,777 1,292,777 1,292,777 - FUND BALANCE - END OF YEAR 1,249,227$ 1,249,227$ 1,202,814$ (46,413)$ See independent auditors' report. Budgeted Amounts 121 Whale of a Day 122 CITY OF RANCHO PALOS VERDES JUNE 30, 2012 INTERNAL SERVICE FUNDS DESCRIPTIONS The Internal Service Funds are used to finance and account for goods and services provided by one City department to other City departments on a cost- reimbursement basis, including depreciation. Equipment Replacement – to account for purchases, replacement and maintenance of certain equipment items on behalf of all City departments. Building Replacement – to account for the accumulation of funds transferred from the General Fund for replacement of certain buildings on behalf of the City. Employee Benefits – to account for employee benefit costs for all employees charged to various City departments. 123 CITY OF RANCHO PALOS VERDES COMBINING STATEMENT OF NET ASSETS INTERNAL SERVICE FUNDS June 30, 2012 Equipment Building Employee Replacement Replacement Benefits Totals CURRENT ASSETS: Cash and investments 2,585,556$ 942,404$ -$ 3,527,960$ Receivables: Interest 1,922 603 43 2,568 Other - - 1,081 1,081 Prepaid items 31,342 - 259,731 291,073 TOTAL CURRENT ASSETS 2,618,820 943,007 260,855 3,822,682 NONCURRENT ASSETS: Capital assets: Property and equipment 1,603,512 - - 1,603,512 Accumulated depreciation (1,348,661) - - (1,348,661) TOTAL NONCURRENT ASSETS 254,851 - - 254,851 TOTAL ASSETS 2,873,671 943,007 260,855 4,077,533 CURRENT LIABILITIES: Accounts payable and accrued liabilities 34,732 - 51,598 86,330 Due to other fund - - 118,514 118,514 TOTAL NONCURRENT ASSETS 34,732 - 170,112 204,844 Invested in capital assets 254,851 - - 254,851 Unrestricted 2,584,088 943,007 90,743 3,617,838 TOTAL NET ASSETS 2,838,939$ 943,007$ 90,743$ 3,872,689$ See independent auditors' report. ASSETS LIABILITIES NET ASSETS 124 CITY OF RANCHO PALOS VERDES COMBINING STATEMENT OF REVENUES, EXPENSES AND CHANGES IN NET ASSETS - INTERNAL SERVICE FUNDS For the year ended June 30, 2012 Equipment Building Employee Replacement Replacement Benefits Totals OPERATING REVENUES: Charges for services 480,000$ -$ 1,821,500$ 2,301,500$ OPERATING EXPENSES: Personnel services - - 1,869,945 1,869,945 Materials and supplies 133,599 20,755 - 154,354 Maintenance 236,948 - - 236,948 Depreciation 133,485 - - 133,485 TOTAL OPERATING EXPENSES 504,032 20,755 1,869,945 2,394,732 OPERATING INCOME / (LOSS)(24,032) (20,755) (48,445) (93,232) NONOPERATING REVENUES: Other revenues - - 28,618 28,618 Investment income 8,244 2,956 219 11,419 TOTAL NONOPERATING REVENUES 8,244 2,956 28,837 40,037 INCOME LOSS BEFORE TRANSFERS (15,788) (17,799) (19,608) (53,195) TRANSFER OUT - (30,517) (340,000) (370,517) CHANGE IN NET ASSETS (15,788) (48,316) (359,608) (423,712) TOTAL NET ASSETS - BEGINNING OF YEAR 2,854,727 991,323 450,351 4,296,401 TOTAL NET ASSETS - END OF YEAR 2,838,939$ 943,007$ 90,743$ 3,872,689$ See independent auditors' report. 125 CITY OF RANCHO PALOS VERDES COMBINING STATEMENT OF CASH FLOWS INTERNAL SERVICE FUNDS For the year ended June 30, 2012 Equipment Building Employee Replacement Replacement Benefits Totals CASH FLOWS FROM OPERATING ACTIVITIES: Receipts from interfund services provided 480,000$ -$ 1,940,014$ 2,420,014$ Payments to suppliers (408,905) (26,073) - (434,978) Payments to employees - - (2,039,616) (2,039,616) NET CASH PROVIDED / (USED) BY OPERATING ACTIVITIES 71,095 (26,073) (99,602) (54,580) CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES Acquisition and construction of capital assets (134,637) - - (134,637) CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES: Receipts from other revenues - - 27,537 27,537 Transfer to other funds - (30,517) (340,000) (370,517) NET CASH USED BY NONCAPITAL FINANCING ACTIVITIES - (30,517) (312,463) (342,980) CASH FLOWS FROM INVESTING ACTIVITIES Interest received on investments 9,018 3,368 976 13,362 NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS (54,524) (53,222) (411,089) (518,835) CASH AND CASH EQUIVALENTS - BEGINNING OF YEAR 2,640,080 995,626 411,089 4,046,795 CASH AND CASH EQUIVALENTS - END OF YEAR 2,585,556$ 942,404$ -$ 3,527,960$ RECONCILIATION OF OPERATING LOSS TO NET CASH USED BY OPERATING ACTIVITIES: Operating income / (loss)(24,032)$ (20,755)$ (48,445)$ (93,232)$ Adjustments to reconcile operating loss to net cash used by operating activities: Depreciation 133,485 - - 133,485 Changes in operating assets and liabilities:- Increase (decrease) in prepaid items (31,342) - 2,353 (28,989) Increase (decrease) in accrued liabilities (7,016) (5,318) (172,024) (184,358) Increase in due to other fund - 118,514 118,514 NET CASH USED BY OPERATING ACTIVITIES 71,095$ (26,073)$ (99,602)$ (54,580)$ See independent auditors' report. 126 STATISTICAL SECTION 127 The Whale Sighting Count 128 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 130 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 138 These schedules contain information to help the reader assess the City’s most significant local revenue source, property tax. Debt Capacity 142 These schedules present information to help the reader assess the affordability of the City’s current levels of outstanding debt and the city’s ability to issue additional debt in the future. The City does not have general bond indebtedness or debt issued with pledged revenue. Demographic and Economic Information 145 These schedules offer demographic and economic indicators to help the reader understand the environment within which the City’s financial activities take place. Operating Information 148 These schedules contain services and infrastructure data to help the reader understand how the information in the City’s financial report relates to the services the City provides and the activities it performs. Sources: Unless otherwise noted, the information in these schedules is derived from the comprehensive annual financial reports for the relevant year. 129 20 0 3 2 0 0 4 2 0 0 5 2 0 0 6 2 0 0 7 2 0 0 8 2 0 0 9 2 0 1 0 2 0 1 1 2 0 1 2 Go v e r n m e n t a l a c t i v i t i e s In v e s t e d i n c a p i t a l a s s e t s 94 , 8 9 5 $ 92 , 4 9 9 $ 94 , 0 2 3 $ 10 9 , 9 9 1 $ 10 9 , 7 4 6 $ 10 9 , 3 7 6 $ 10 7 , 8 6 7 $ 11 5 , 3 3 1 $ 11 5 , 1 4 5 $ 11 4 , 4 8 8 $ Re s t r i c t e d 10 , 6 6 1 11 , 5 8 6 12 , 0 7 5 12 , 4 1 7 12 , 1 6 3 1, 0 0 0 1, 0 0 0 1, 0 0 0 1, 7 5 0 1, 7 5 0 Un r e s t r i c t e d 13 , 0 0 4 14 , 2 7 1 15 , 6 5 9 16 , 0 2 4 17 , 8 2 3 30 , 4 7 1 31 , 2 7 7 31 , 8 5 5 39 , 0 6 6 67 , 1 1 2 To t a l g o v e r n m e n t a l a c t i v it i e s n e t a s s e t s 11 8 , 5 6 0 $ 11 8 , 3 5 6 $ 12 1 , 7 5 7 $ 13 8 , 4 3 2 $ 13 9 , 7 3 2 $ 14 0 , 8 4 7 $ 14 0 , 1 4 4 $ 14 8 , 1 8 6 $ 15 5 , 9 6 1 $ 18 3 , 3 5 1 $ Bu s i n e s s - t y p e a c t i v i t i e s In v e s t e d i n c a p i t a l a s s e t s - $ - $ - $ 1 , 3 1 1 $ 2, 1 5 8 $ 5, 5 9 9 $ 12 , 4 7 7 $ 12 , 4 5 8 $ 12 , 7 5 3 $ 13 , 3 5 6 $ Re s t r i c t e d - - - - - - - - - - Un r e s t r i c t e d - - 2 , 0 0 0 2, 7 9 9 5, 2 5 8 7, 7 4 0 2, 1 0 8 2, 8 2 5 3, 3 6 5 3, 5 3 2 To t a l b u s i n e s s - t y p e a c t i v i t i e s n e t a s s e t s - $ - $ 2 , 0 0 0 $ 4, 1 1 0 $ 7, 4 1 6 $ 13 , 3 3 9 $ 14 , 5 8 5 $ 15 , 2 8 3 $ 16 , 1 1 8 $ 16 , 8 8 8 $ Pr i m a r y g o v e r n m e n t In v e s t e d i n c a p i t a l a s s e t s , n e t o f r e l a t e d d e b t 9 4 , 8 9 5 $ 92 , 4 9 9 $ 94 , 0 2 3 $ 11 1 , 3 0 2 $ 11 1 , 9 0 4 $ 11 4 , 9 7 5 $ 12 0 , 3 4 4 $ 12 7 , 7 8 9 $ 12 7 , 8 9 8 $ 12 7 , 84 5 $ Re s t r i c t e d 10 , 6 6 1 11 , 5 8 6 12 , 0 7 5 12 , 4 1 7 12 , 1 6 3 1, 0 0 0 1, 0 0 0 1, 0 0 0 1, 7 5 0 1, 7 5 0 Un r e s t r i c t e d 13 , 0 0 4 14 , 2 7 1 17 , 6 5 9 18 , 8 2 3 23 , 0 8 1 38 , 2 1 1 33 , 3 8 5 34 , 6 8 0 42 , 4 3 1 70 , 6 4 4 To t a l p r i m a r y g o v e r n m e n t n e t a s s e t s 11 8 , 5 6 0 $ 11 8 , 3 5 6 $ 12 3 , 7 5 7 $ 14 2 , 5 4 2 $ 14 7 , 1 4 8 $ 15 4 , 1 8 6 $ 15 4 , 7 2 9 $ 16 3 , 4 6 9 $ 17 2 , 0 7 9 $ 20 0 , 2 3 8 $ ( a m o u n t s e x p r e s s e d i n t h o u s a n d s ) C i t y o f R a n c h o P a l o s V e r d e s N e t A s s e t s b y C o m p o n e n t L a s t T e n F i s c a l Y e a r s ( a c c r u a l b a s i s o f a c c o u n t i n g ) 13 0 20 0 3 2 0 0 4 2 0 0 5 2 0 0 6 2 0 0 7 2 0 0 8 2 0 0 9 2 0 1 0 2 0 1 1 2 0 1 2 Ex p e n s e s Go v e r n m e n t a l a c t i v i t i e s : Ad m i n i s t r a t i o n 3, 2 9 4 $ 3, 4 9 9 $ 4, 0 5 5 $ 4, 3 5 0 $ 4, 9 5 3 $ 4, 7 2 4 $ 6, 3 5 7 $ 7, 8 2 4 $ 5, 9 9 7 $ 5, 9 0 6 $ Pu b l i c s a f e t y 3, 0 9 4 3, 0 2 4 3, 0 7 9 3, 4 3 7 3, 7 5 1 4, 0 4 4 4, 2 3 3 4, 2 4 2 4, 3 3 5 4, 1 7 8 Pu b l i c w o r k s 7, 9 5 4 7, 4 6 2 9, 4 8 8 9, 2 9 0 9, 9 6 9 9, 0 2 6 10 , 5 5 5 13 , 6 3 3 10 , 3 8 9 11 , 2 0 2 Pa r k s a n d r e c r e a t i o n 80 9 94 8 1, 0 6 5 1, 6 5 9 1, 4 3 9 1, 3 9 6 1, 6 0 5 1, 8 2 6 1, 3 9 1 1, 4 9 0 Co m m u n i t y d e v e l o p m e n t 2, 1 7 0 2, 2 9 6 2, 2 2 3 2, 0 6 0 2, 6 3 1 2, 4 4 1 2, 6 9 7 2, 5 5 0 2, 6 2 2 2, 4 3 2 No n - d e p a r t m e n t a l - - - - - - - 32 0 - - In t e r e s t o n l o n g - t e r m d e b t 27 3 27 3 27 2 27 0 27 1 27 0 26 8 26 5 26 0 10 9 To t a l g o v e r n m e n t a l a c t i v i t i e s e x p e n s e s 17 , 5 9 4 17 , 5 0 2 20 , 1 8 2 21 , 0 6 6 23 , 0 1 4 21 , 9 0 1 25 , 7 1 5 30 , 6 6 0 24 , 9 9 4 25 , 3 1 8 Bu s i n e s s - t y p e a c t i v i t i e s : Wa t e r Q u a l i t y F l oo d P r o t e c t i o n - - - 4 7 27 1 30 1 43 7 58 0 48 9 56 0 T o ta l p r i m a r y g o v e r n m e n t e x p e n s e s 17 , 5 9 4 $ 17 , 5 0 2 $ 20 , 1 8 2 $ 21 , 1 1 3 $ 2 3 , 2 8 5 $ 22 , 2 0 2 $ 26 , 1 5 2 $ 31 , 2 4 0 $ 25 , 4 8 3 $ 25 , 8 7 8 $ Pr o g r a m R e v e n u e s Go v e r n m e n t a l a c t i v i t i e s : Ch a r g e s f o r s e r v i c e s : Ad m i n i s t r a t i o n 87 $ 69 $ 62 $ 35 $ 29 $ 53 8 $ 55 5 $ 68 1 $ 65 4 $ 74 7 $ Pu b l i c s a f e t y 23 5 16 5 16 3 22 4 33 2 31 6 26 7 22 9 26 1 19 4 Pu b l i c w o r k s 25 2 21 7 13 1 37 18 5 1, 0 0 2 42 2 1, 3 5 6 62 2 68 4 Pa r k s a n d r e c r e a t i o n 8 6 41 45 51 48 3 48 3 89 6 45 7 50 3 Co m m u n i t y d e v e l o p m e n t 1, 2 0 2 1, 3 6 3 1, 1 8 8 1, 3 1 9 1, 5 9 9 1, 7 6 0 1, 6 4 3 1, 7 6 4 1, 7 1 4 1, 6 4 4 Op e r a t i n g g r a n t s a n d c o n t r i b u t i o n s 2, 9 7 1 2, 8 3 6 2, 7 2 8 3, 8 9 4 4, 2 0 0 3, 5 7 0 2, 9 6 3 6, 6 3 3 3, 6 8 9 3, 6 2 8 Ca p i t a l g r a n t s a n d c o n t r i b u t i o n s 13 1 37 4 , 5 2 4 1 7 , 2 9 9 31 7 1, 4 7 2 64 2 7, 1 7 9 5 1 3 9 To t a l g o v e r n m e n t a l a c t i v i t i e s p r o g r a m r e v e n u e s 4, 8 8 6 4, 6 9 3 8, 8 3 7 2 2 , 8 5 3 6, 7 1 3 9, 1 4 1 6, 9 7 5 18 , 7 3 8 7, 4 0 2 7, 5 3 8 B us i n e s s - t y p e a c t i v i t i e s : Ch a r g e s f o r s e r v i c e s : Wa t e r Q u a l i t y F l oo d P r o t e c t i o n - - - - - - - - - - Op e r a t i n g g r a n t s a n d c o n t r i b u t i o n s - - - - - - - - - - Ca p i t a l g r a n t s a n d c o n t r i b u t i o n s - - - - - - - - - - To t a l b u s i n e s s - t y p e a c t i v i t i e s p r o g r a m r e v e n u e s - - - - - - - - - - To t a l p r i m a r y g o v e r n m e n t p r o g r a m r e v e n u e s 4, 8 8 6 $ 4, 6 9 3 $ 8, 8 3 7 $ 2 2 , 8 5 3 $ 6 , 7 1 3 $ 9, 1 4 1 $ 6, 9 7 5 $ 18 , 7 3 8 $ 7, 4 0 2 $ 7, 5 3 8 $ Ne t ( e x p e n s e ) / r e v e n u e Go v e r n m e n t a l a c t i v i t i e s (1 2 , 7 0 8 ) $ (1 2 , 8 0 9 ) $ (1 1 , 3 4 5 ) $ 1, 7 8 7 $ (1 6 , 3 0 1 ) $ (1 2 , 7 6 0 ) $ (1 8 , 7 4 0 ) $ (1 1 , 9 2 2 ) $ (1 7 , 5 9 2 ) $ (1 7 , 7 8 0 ) $ Bu s i n e s s - t y p e a c t i v i t i e s - - - ( 4 7 ) (2 7 1 ) (3 0 1 ) (4 3 7 ) (5 8 0 ) (4 8 9 ) (5 6 0 ) To t a l p r i m a r y g o v e r n m e n t n e t e x p e n s e (1 2 , 7 0 8 ) $ (1 2 , 8 0 9 ) $ (1 1 , 3 4 5 ) $ 1, 7 4 0 $ (1 6 , 5 7 2 ) $ (1 3 , 0 6 1 ) $ (1 9 , 1 7 7 ) $ (1 2 , 5 0 2 ) $ (1 8 , 0 8 1 ) $ (1 8 , 3 4 1 ) $ ( a m o u n t s e x p r e s s e d i n t h o u s a n d s ) C i t y o f R a n c h o P a l o s V e r d e s C h a n g e s i n N e t A s s e t s L a s t T e n F i s c a l Y e a r s ( a c c r u a l b a s i s o f a c c o u n t i n g ) 13 1 20 0 3 2 0 0 4 2 0 0 5 2 0 0 6 2 0 0 7 2 0 0 8 2 0 0 9 2 0 1 0 2 0 1 1 2 0 1 2 ( a m o u n t s e x p r e s s e d i n t h o u s a n d s ) C i t y o f R a n c h o P a l o s V e r d e s C h a n g e s i n N e t A s s e t s L a s t T e n F i s c a l Y e a r s ( a c c r u a l b a s i s o f a c c o u n t i n g ) Ge n e r a l R e v e n u e s a n d O t h e r C h a n g e s i n N e t A s s e t s Go v e r n m e n t a l a c t i v i t i e s : Ta x e s Pr o p e r t y t a x e s 5, 3 3 5 $ 5, 7 0 6 $ 5, 8 4 0 $ 9, 6 2 1 $ 10 , 2 3 5 $ 10 , 9 3 5 $ 11 , 4 6 2 $ 11 , 4 3 1 $ 11 , 8 5 4 $ 11 , 4 8 0 $ Sa l e s t a x e s 1, 0 0 3 1, 2 0 5 1, 2 7 6 1, 2 1 4 1, 3 8 1 1, 0 5 6 1, 0 5 3 1, 2 4 6 1, 5 4 8 1, 4 4 9 Fr a n c h i s e t a x e s 1, 0 8 7 1, 2 7 5 1, 3 0 7 1, 4 5 4 1, 5 1 2 1, 5 9 9 1, 7 0 9 1, 7 1 1 1, 8 2 5 1, 8 8 1 Ut i l i t y u s e r t a x e s 1, 8 3 2 1, 8 5 1 1, 9 0 1 2, 1 9 1 2, 2 7 1 2, 3 2 9 2, 2 6 7 2, 3 9 5 2, 4 0 7 2, 3 3 3 Ot h e r t a x e s 3, 4 9 5 2, 8 6 7 4, 5 4 5 72 7 36 3 82 0 69 0 2, 6 6 7 3, 4 5 4 4, 0 2 3 In v e s t m e n t i n c o m e 37 1 33 1 59 4 99 7 1, 6 1 5 1, 5 5 5 63 1 20 7 31 8 60 4 Ot h e r 51 7 2, 4 8 1 1, 2 8 3 79 3 2, 1 0 1 30 0 22 5 30 7 27 1 52 Tr a n s f e r s - - ( 2 , 0 0 0 ) (2 , 1 0 9 ) (2 , 0 1 7 ) (4 , 7 1 9 ) - - - - Ex t r a o r d i n a r y i t e m - - - - - - - - - 2 3 , 3 4 8 To t a l g o v e r n m e n t a l a c t i v i t i e s 13 , 6 4 0 15 , 7 1 6 14 , 7 4 6 14 , 8 8 8 17 , 4 6 1 13 , 8 7 5 18 , 0 3 7 19 , 9 6 4 21 , 6 7 7 45 , 1 7 0 Bu s i n e s s - t y p e a c t i v i t i e s : In v e s t m e n t i n c o m e - - - 4 8 51 28 3 10 5 14 13 11 Us e r F e e s - - - - 1 , 1 8 8 1, 2 2 2 1, 5 7 8 1, 2 6 4 1, 3 1 2 1, 3 1 9 Ot h e r - - - - 3 2 0 - - - - - Tr a n s f e r s - - 2 , 0 0 0 2, 1 0 9 2, 0 1 7 4, 7 1 9 - - - - To t a l b u s i n e s s - t y p e a c t i v i t i e s - - 2 , 0 0 0 2, 1 5 7 3, 5 7 6 6, 2 2 4 1, 6 8 3 1, 2 7 8 1, 3 2 5 1, 3 3 0 To t a l p r i m a r y g o v e r n m e n t 13 , 6 4 0 $ 15 , 7 1 6 $ 16 , 7 4 6 $ 17 , 0 4 5 $ 2 1 , 0 3 7 $ 20 , 0 9 9 $ 19 , 7 2 0 $ 21 , 2 4 2 $ 23 , 0 0 2 $ 46 , 5 0 0 $ Ch a n g e i n N e t A s s e t s Go v e r n m e n t a l a c t i v i t i e s 93 2 $ 2, 9 0 7 $ 3, 4 0 1 $ 1 6 , 6 7 5 $ 1, 1 6 0 $ 1, 1 1 5 $ (7 0 3 ) $ 8, 0 4 2 $ 4, 0 8 5 $ 27 , 3 9 0 $ Bu s i n e s s - t y p e a c t i v i t i e s - - 2 , 0 0 0 2, 1 1 0 3, 3 0 5 5, 9 2 3 1, 2 4 6 69 8 83 6 77 0 To t a l p r i m a r y g o v e r n m e n t n e t e x p e n s e 93 2 $ 2, 9 0 7 $ 5, 4 0 1 $ 18 , 7 8 5 $ 4 , 4 6 5 $ 7, 0 3 8 $ 54 3 $ 8, 7 4 0 $ 4, 9 2 1 $ 28 , 1 5 9 $ 13 2 Utility Fiscal Property Franchise Sales Users Other Year Tax Tax Tax Tax Taxes Total 2003 5,335$ 1,087$ 1,003$ 1,832$ 3,495$ 12,752$ 2004 5,706 1,275 1,205 1,851 2,867 12,904 2005 5,840 1,307 1,276 1,901 4,545 14,869 2006 9,621 1 1,454 1,214 2,191 727 1 15,207 2007 10,235 1,512 1,381 2,271 363 15,762 2008 10,935 1,599 1,056 2,329 820 16,739 2009 11,462 1,709 1,053 2,267 690 17,181 2010 11,431 1,711 1,246 2,395 2,667 19,450 2011 11,854 1,825 1,548 2,407 3,454 21,088 2012 11,480 1,881 1,449 2,333 4,023 21,167 1: Most of the Motor Vehicle In Lieu Tax is received as Property Tax beginning in 2006. (accrual basis of accounting) (amounts expressed in thousands) City of Rancho Palos Verdes Governmental Activities Tax Revenues By Source Last Ten Fiscal Years 133 20 0 3 2 0 0 4 2 0 0 5 2 0 0 6 2 0 0 7 2 0 0 8 2 0 0 9 2 0 1 0 Ge n e r a l F u n d Re s e r v e d 6, 8 5 4 $ 6 , 6 3 9 $ 6 , 0 2 1 $ 6 , 1 6 5 $ 6, 5 8 6 $ 6, 6 4 5 $ 6, 3 1 4 $ 7, 1 6 6 $ De s i g n a t e d - - 6 7 5 8 7 6 78 6 1, 2 7 8 1, 3 3 3 1, 4 6 2 Un r e s e r v e d , U n d e s i g n a t e d 9, 6 0 7 1 4 , 0 6 6 1 4 , 2 0 9 1 3 , 6 4 9 14 , 3 7 6 12 , 1 7 1 10 , 4 4 0 10 , 7 4 5 To t a l G e n e r a l F u n d 16 , 4 6 1 $ 20 , 7 0 5 $ 20 , 9 0 5 $ 20 , 6 9 0 $ 21 , 7 4 8 $ 20 , 0 9 4 $ 18 , 0 8 7 $ 19 , 3 7 3 $ Al l o t h e r G o v e r n m e n t a l F u n d s Re s e r v e d 7, 5 8 4 $ 7 , 2 2 9 $ 3 , 1 4 7 $ 3 , 3 1 5 $ 2, 3 9 6 $ 2, 7 2 4 $ 3, 6 7 2 $ 6, 3 6 1 $ De s i g n a t e d Sp e c i a l R e v e n u e F u n d s - - 6 1 5 7 4 4 1 , 8 4 9 1, 8 9 6 41 1 85 Ca p i t a l P r o j e c t s F u n d s - - 2 , 4 1 6 2 , 7 9 9 3, 1 5 8 4, 3 4 7 6, 4 4 2 7, 4 9 4 Pe r m a n e n t F u n d - - - 7 5 65 - - - De b t S e r v i c e F u n d - - - - - - - - Un r e s e r v e d , U n d e s i g n a t e d , r e p o r t e d i n : Sp e c i a l R e v e n u e F u n d s 5, 0 1 2 5 , 0 4 0 5 , 9 0 2 6 , 6 1 5 6, 4 2 6 7, 4 9 4 7, 9 1 0 6, 0 5 8 Ca p i t a l P r o j e c t s F u n d s 53 4 2 , 4 3 0 3 , 3 2 0 2 , 0 7 7 1, 8 6 9 1, 9 0 8 3, 3 7 3 1, 2 4 0 Pe r m a n e n t F u n d 46 0 4 1 8 4 2 6 3 2 9 32 5 37 1 36 2 33 3 De b t S e r v i c e F u n d (1 0 , 9 1 5 ) (1 2 , 0 7 0 ) (1 2 , 7 9 3 ) (1 3 , 7 4 1 ) (1 4 , 8 7 3 ) (1 5 , 9 9 0 ) (1 6 , 8 2 3 ) (1 7 , 7 9 7 ) To t a l a l l o t h e r G o v e r n m e n t a l F u n d s 2, 6 7 5 $ 3, 0 4 7 $ 3, 0 3 3 $ 2, 2 1 3 $ 1, 2 1 5 $ 2, 7 5 0 $ 5, 3 4 7 $ 3, 7 7 4 $ ( a m o u n t s e x p r e s s e d i n t h o u s a n d s ) C i t y o f R a n c h o P a l o s V e r d e s F u n d B a l a n c e s o f G o v e r n m e n t a l F u n d s L a s t E i g h t F i s c a l Y e a r s - B e f o r e G A S B 5 4 ( m o d i f i e d a c c r u a l b a s i s o f a c c o u n t i n g ) 13 4 20 1 1 2 0 1 2 Ge n e r a l F u n d No n - S p e n d a b l e 7, 5 1 5 $ 7, 4 9 3 $ Re s t r i c t e d - - Co m m i t t e d - - As s i g n e d - - Un a s s i g h e d 11 , 3 8 5 12 , 4 6 4 To t a l G e n e r a l F u n d 18 , 9 0 0 $ 19 , 9 5 7 $ Al l o t h e r G o v e r n m e n t a l F u n d s No n - S p e n d a b l e Sp e c i a l R e v e n u e F u n d s 4, 8 1 8 $ 3, 0 6 6 $ De b t S e r v i c e F u n d 57 3 - Ca p i t a l P r o j e c t s F u n d s - - Pe r m a n e n t F u n d 1, 7 5 0 1, 7 5 0 Re s t r i c t e d Sp e c i a l R e v e n u e F u n d s 7, 9 5 2 8, 1 8 7 De b t S e r v i c e F u n d - - Ca p i t a l P r o j e c t s F u n d s 31 3 - Pe r m a n e n t F u n d 31 9 22 6 Co m m i t t e d Sp e c i a l R e v e n u e F u n d s - - De b t S e r v i c e F u n d - - Ca p i t a l P r o j e c t s F u n d s - - Pe r m a n e n t F u n d - - As s i g n e d Sp e c i a l R e v e n u e F u n d s - - De b t S e r v i c e F u n d - - Ca p i t a l P r o j e c t s F u n d s 11 , 6 5 0 15 , 4 0 7 Pe r m a n e n t F u n d - - Un a s s i g n e d Sp e c i a l R e v e n u e F u n d s (1 2 6 ) (1 0 8 ) De b t S e r v i c e F u n d (1 9 , 6 8 7 ) - Ca p i t a l P r o j e c t s F u n d s - - Pe r m a n e n t F u n d - - To t a l a l l o t h e r G o v e r n m e n t a l F u n d s 7, 5 6 2 $ 2 8 , 5 2 8 $ ( a m o u n t s e x p r e s s e d i n t h o u s a n d s ) C i t y o f R a n c h o P a l o s V e r d e s F u n d B a l a nc e s o f G o v e r n m e n t a l F u n d s L a s t T w o F i s c a l Y e a r s - A f t e r G A S B 5 4 ( m o d i f i e d a c c r u a l b a s i s o f a c c o u n t i n g ) 13 5 20 0 3 2 0 0 4 2 0 0 5 2 0 0 6 2 0 0 7 2 0 0 8 2 0 0 9 2 0 1 0 2 0 1 1 2 0 1 2 Re v e n u e s Ta x e s 1 1 , 0 4 6 $ 12 , 0 8 1 $ 13 , 5 7 3 $ 15 , 2 3 8 $ 16 , 4 5 3 $ 17 , 0 6 2 $ 17 , 5 7 3 $ 19 , 8 4 4 $ 21 , 4 1 9 $ 21 , 8 6 7 $ Li c e n s e s a n d p e r m i t s 1, 4 6 3 1, 3 1 0 1, 3 2 6 1, 4 4 0 1, 7 6 3 1, 9 1 4 1, 7 5 5 1, 9 5 4 1, 9 3 3 1, 8 0 6 Fi n e s a n d f o r f e i t u r e s 11 5 10 2 10 8 17 1 23 7 26 0 21 4 17 9 21 0 15 9 Us e o f m o n e y a n d p r o p e r t y 80 4 73 3 1 , 3 0 6 7, 0 3 8 3, 4 8 0 2, 1 0 8 1, 2 4 0 1, 6 0 1 1, 5 6 0 1, 3 5 0 Ch a r g e s f o r s e r v i c e s 20 5 37 9 15 2 49 61 60 1 6 3 81 73 14 9 Re v e n u e s f r o m o t h e r a g e n c i e s 4, 3 1 8 3, 4 5 3 7, 8 4 8 1 5 , 5 1 1 4, 1 1 8 4, 6 4 7 3, 5 7 5 10 , 1 8 0 3, 1 6 2 3, 4 2 1 Ot h e r R e v e n u e s 55 4 2 , 3 6 3 1, 0 3 8 15 5 20 1 1 , 5 6 3 46 7 4, 8 0 6 22 9 25 9 To t a l R e v e n u e s 18 , 5 0 5 20 , 4 2 1 25 , 3 5 1 39 , 6 0 2 26 , 3 1 3 27 , 6 1 4 24 , 9 8 7 38 , 6 4 5 28 , 5 8 6 29 , 0 1 1 Ex p e n d i t u r e s Ad m i n i s t r a t i o n 3, 0 9 2 3, 3 2 8 3, 8 5 2 4, 0 4 1 4, 6 0 7 4, 4 1 1 4, 9 1 5 5, 7 2 0 5, 5 0 3 5, 7 2 6 Pu b l i c S a f e t y 3, 0 9 4 3, 0 3 9 3, 0 9 2 3, 4 3 8 3, 7 5 1 4, 0 4 4 4, 2 3 3 4, 2 4 2 4, 3 3 5 4, 1 7 8 Pu b l i c W o r k s 5, 2 9 2 4, 8 0 1 6, 3 0 2 5, 2 7 7 6, 8 6 4 5, 7 6 8 7, 0 7 5 6, 8 9 6 7, 8 7 5 7, 6 1 6 Pa r k s a n d R e c r e a t i o n 78 6 94 6 96 5 1 , 5 9 3 1, 3 1 9 1, 2 8 1 1, 3 5 4 1, 7 0 2 1, 2 5 7 1, 4 7 9 Co m m u n i t y D e v e l o p m e n t 2, 1 9 4 2, 3 6 2 2, 3 0 2 2, 3 6 1 2, 6 8 1 2, 4 9 6 2, 7 2 3 2, 6 0 4 2, 7 8 4 2, 4 8 4 No n - D e p a r t m e n t a l - - - - - - - 3 2 0 - - Pa s s T h r o u g h t o o t h e r a g e n c i e s 13 7 15 6 18 8 20 0 15 2 16 9 18 7 - - - Ca p i t a l O u t l a y 3, 8 9 3 36 8 4 , 9 1 2 2 0 , 2 0 2 3, 1 2 4 3, 1 1 2 2, 4 5 9 14 , 5 6 7 2, 5 5 7 3, 1 5 5 De b t S e r v i c e Pr i n c i p a l - - 1 8 4 20 0 24 8 31 6 35 0 41 9 42 3 46 4 In t e r e s t 83 6 80 5 90 5 1 , 1 5 0 1, 3 9 0 1, 3 7 0 1, 1 0 1 88 6 88 7 49 8 To t a l E x p e n d i t u r e s 19 , 3 2 4 15 , 8 0 5 22 , 7 0 2 38 , 4 6 2 24 , 1 3 6 22 , 9 6 7 24 , 3 9 7 37 , 3 5 6 25 , 6 2 1 25 , 5 9 9 Ex c e s s o f R e v e n u e s o v e r ( u n d e r ) E x p e n d i t u r e s (8 1 9 ) 4 , 6 1 6 2, 6 4 9 1, 1 4 0 2, 1 7 7 4, 6 4 7 59 0 1, 2 8 9 2, 9 6 5 3, 4 1 2 Ot h e r F i n a n c i n g S o u r c e s ( u s e s ) Sa l e s o f c a p i t a l a s s e t s - - - - - - - - 3 5 0 - Tr a n s f e r s i n 1, 6 7 6 1, 8 4 4 6, 1 8 0 4, 9 8 9 4, 4 8 9 3, 1 5 8 5, 8 1 5 4, 6 1 6 8, 9 4 4 8, 2 2 6 Tr a n s f e r s o u t (1 , 8 3 3 ) (1 , 8 4 4 ) (8 , 1 8 0 ) (7 , 2 4 7 ) (6 , 6 0 6 ) (7 , 9 2 4 ) (5 , 8 1 5 ) (6 , 1 9 2 ) (8 , 9 4 4 ) (7 , 8 5 6 ) Bo n d P r o c e e d s - - - - - - - - - - Ad v a n c e s t o t h e R e d e v e l o p m e n t A g e n c y - - - - - - - - - - To t a l O t h e r F i n a n c i n g S o u r c e s ( u s e s ) (1 5 7 ) - ( 2 , 0 0 0 ) (2 , 2 5 8 ) (2 , 1 1 7 ) (4 , 7 6 6 ) - ( 1 , 5 7 6 ) 35 0 37 1 Ex t r a o r d i n a r y G a i n ( L o s s ) - - - - - - - - - 1 8 , 2 4 0 Ne t c h a n g e i n F u n d B a l a n c e s (9 7 6 ) $ 4 , 6 1 6 $ 64 9 $ (1, 1 1 8 ) $ 60 $ ( 1 1 9 ) $ 59 0 $ (2 8 7 ) $ 3, 3 1 5 $ 22 , 0 2 3 $ Co s t o f A s s e t s C a p i t a l i z e d 4, 1 8 4 37 9 4 , 6 2 3 1 9 , 4 6 5 2, 8 0 0 2, 7 6 4 1, 8 9 5 10 , 8 6 6 3, 1 8 0 2, 8 6 5 De b t S e r v i c e s a s a p e r c e n t a g e o f N o n - C a p i t a l E x p e n d i t u r e s 5 . 5 % 5 . 2 % 6 . 0 % 7 . 1 % 7 . 7 % 8 . 3 % 6 . 4 % 4 . 9 % 5 . 8 % 4 . 2 % C i t y o f R a n c h o P a l o s V e r d e s ( A m o u n t s e x p r e s s e d i n t h o u s a n d s ) ( M o d i f i e d A c c r u a l b a s i s o f A c c o u n t i n g ) L a s t T e n F i s c a l Y e a r s C h a n g e s i n F u n d B a l a n c e s o f G o v e r n m e n t a l F u n d s 13 6 Utility Fiscal Property Franchise Sales Users Other Year Tax Tax Tax Tax Taxes Total 2003 5,335 1,087 1,003 1,832 1,789 11,046 2004 5,706 1,275 1,205 1,851 2,044 12,081 2005 8,494 1 1,307 1,009 1,901 862 13,573 2006 9,576 1,299 995 2,191 1,177 15,238 2007 10,385 1,511 1,020 2,272 1,265 16,453 2008 10,898 1,599 1,077 2,329 1,159 17,062 2009 11,462 1,709 1,060 2,267 1,075 17,573 2010 11,431 1,711 1,158 2,395 3,149 19,844 2011 11,854 1,825 1,518 2,407 3,815 21,419 2012 11,480 1,881 1,452 2,333 4,720 21,867 Source: City General Ledger 1: Most of the Motor Vehicle In Lieu Fees are received as property tax beginning in 2006. (Modified Accrual Basis of Accounting) (Amounts expressed in thousands) City of Rancho Palos Verdes General Governmental Tax Revenues By Source Last Ten Fiscal Years 137 To t a l E s t i m a t e d As s e s s e d Fi s c a l Le s s Ta x a b l e D i r e c t Ac t u a l Fa c t o r o f Va l u e a s a Ye a r R e s i d e n t i a l C o m m e r c i a l I nd u s t r i a l O t h e r U n s e c u r e d T a x - E x e m p t A s s e s s e d Ta x Ta x a b l e T a x a b l e P er c e n t a g e o f En d P r o p e r t y P r o p e r t y P r o p e r t y P r o p e r t y P r o p e r t y P r o p e r t y Va l u e R a t e ( 1 ) V a l u e ( 2 ) A s s e s s e d V a l u e ( 3 ) A c t u a l V a l u e 20 0 3 5 , 7 3 0 , 4 6 4 $ 70 , 4 7 5 $ - $ 1 9 1 , 5 4 1 $ 21 , 7 4 1 $ 73 , 7 6 8 $ 6, 0 1 4 , 2 2 1 $ 0. 0 7 3 1 7 8, 0 0 4 , 0 2 6 $ 1. 3 3 0 8 5 7 5 . 1 4 % 20 0 4 6 , 1 3 7 , 7 6 0 7 4 , 7 5 3 1 , 6 6 0 1 7 9 , 8 6 7 2 2 , 8 8 9 7 3 , 7 0 1 6, 4 1 6 , 9 3 0 0. 0 7 8 9 7 8, 5 3 9 , 9 7 1 1. 3 3 0 8 5 7 5 . 1 4 % 20 0 5 * 6 , 5 3 0 , 4 4 8 7 6 , 4 4 5 1 , 6 9 1 3 1 7 , 4 6 3 2 2 , 2 2 2 2 1 8 , 1 9 3 6, 7 3 0 , 0 7 6 0. 0 6 4 0 0 8, 9 5 6 , 7 2 2 1. 3 3 0 8 5 7 5 . 1 4 % 20 0 6 * 7 , 0 3 4 , 4 0 6 88 , 6 9 1 3, 0 8 6 36 5 , 1 7 5 21 , 5 6 1 21 8 , 9 1 6 7, 2 9 4 , 0 0 3 0. 0 6 4 0 0 9, 7 0 7 , 2 2 4 1. 3 3 0 8 5 7 5 . 1 4 % 20 0 7 7 , 5 4 8 , 9 5 6 11 1 , 3 3 8 3, 1 4 8 51 3 , 8 7 6 20 , 3 7 8 22 6 , 5 9 8 7, 9 7 1 , 0 9 8 0. 0 6 3 7 0 10 , 6 0 8 , 3 3 6 1. 3 3 0 8 5 7 5 . 1 4 % 20 0 8 7 , 9 1 9 , 9 5 3 17 0 , 1 4 9 3, 2 1 1 45 3 , 4 4 6 26 , 5 4 6 15 1 , 2 2 5 8, 4 2 2 , 0 8 0 0. 0 7 9 3 0 11 , 2 0 8 , 5 2 5 1. 3 3 0 8 5 7 5 . 1 4 % 20 0 9 8 , 2 3 5 , 7 8 0 27 0 , 9 5 6 3, 2 7 5 49 1 , 2 3 5 46 , 8 5 8 15 4 , 9 6 9 8, 8 9 3 , 1 3 5 0. 0 7 9 6 0 11 , 8 3 5 , 4 2 9 1. 3 3 0 8 5 7 5 . 1 4 % 20 1 0 8 , 3 3 3 , 0 4 2 26 3 , 1 5 7 3, 3 4 1 59 8 , 5 3 9 49 , 6 2 8 23 6 , 9 2 5 9, 0 1 0 , 7 8 2 0. 0 6 3 7 0 9, 5 1 5 , 5 9 3 1. 0 5 6 0 2 9 4 . 6 9 % 20 1 1 8 , 3 6 2 , 0 5 2 39 6 , 1 9 5 3, 3 3 3 57 0 , 5 5 1 45 , 2 5 8 15 8 , 3 8 8 9, 2 1 9 , 0 0 1 0. 0 6 3 7 0 9, 0 6 7 , 3 1 3 0. 9 8 3 5 5 1 0 1 . 6 7 % 20 1 2 8 , 5 9 6 , 7 7 7 39 0 , 4 9 7 3, 3 5 8 56 4 , 7 6 3 70 , 2 8 4 15 7 , 3 0 7 9, 4 6 8 , 3 7 2 0. 0 6 3 7 0 10 , 6 8 3 , 8 2 0 1. 1 2 8 3 7 8 8 . 6 2 % So u r c e : 2 0 1 0 - 1 2 & 2 0 0 6 - 0 7 C ou n t y A s s e s s o r d a t a , M u n i S e r v i c e s , L L C *A s s e s s e d v a l u e s h a v e b e e n r e v i s e d f r o m p r i o r C A F R p u b l i c a t i o n s t o c o m p l y w i t h G A S B N o . 4 4 s t a n d a r d s a n d o n - g o i n g c o n s i s t e n c y i n r e p o r t i n g m e t h o d o l o g i e s . (1 ) T o t a l D i r e c t T a x R a t e i s r e p r e s e n t e d b y T R A 0 0 1 - 2 2 4 . T h i s p e r c e n t a g e i s C i t y ' s s h a r e d p o r t i o n w i t h i n 1 % o f C ou n t y ' s g e n e r a l l e v y . (2 ) E s t i m a t e d A c t u a l V a l u e i s d e r i v e d f r o m a s e r i e s o f c a l c u l a t i o n s c o m p a r i n g m e d i a n a s s e s s e d v a l u e s f r o m 1 9 4 0 t o c u r r e n t m e d i a n s a l e p r i c e s . B a s e d o n t h e s e c a l c u l a t i o n s a f a c t o r w a s e x t r a p o l a t e d a n d a p p l i e d t o c u r r e n t a s s e s s e d v a l u e s . (3 ) T h e F a c t o r u s e d t o c a l c u l a t e E s t i m a t e d A c t u a l V a l u e w a s c a l c u l a t e d f o r 2 0 0 6 - 0 7 a n d a p p l i e d t o p r i o r y e a r s f o r h i s t o r i c a l p u rp o s e s . Ci t y o f R a n c h o P a l o s V e r d e s As s e s s e d V a l u e a n d E s t i m a t e d A c t u a l V a l u e o f T a x a b l e P r o p e r t y La s t T e n F i s c a l Y e a r s (I n t h o u s a n d s o f d o l l a r s ) 13 8 20 0 2 - 0 3 2 0 0 3 - 0 4 2 0 0 4 - 0 5 2 0 0 5 - 0 6 2 0 0 6 - 0 7 2 0 0 7 - 0 8 2 0 0 8 - 0 9 2 0 0 9 - 1 0 2 0 1 0 - 1 1 2 0 1 1 - 1 2 C I T Y D I R E C T R A T E 0 . 0 6 3 7 2 8 0 . 0 6 3 7 2 8 0 . 0 6 3 7 2 8 0 . 0 6 3 7 2 8 0 . 0 6 3 7 2 8 0 . 0 6 3 7 2 8 0 . 0 6 3 7 2 8 0 . 0 6 3 7 2 8 0 . 0 6 3 7 2 8 0 . 0 6 3 7 2 8 Al l o t h e r d i r e c t r a t e s : L A C O U N T Y G E N E R A L 0 . 2 3 0 9 2 6 0 . 2 3 0 9 2 6 0 . 2 3 0 9 2 6 0 . 2 3 0 9 2 6 0 . 2 3 0 9 2 6 0 . 2 3 0 9 2 6 0 . 2 3 0 9 2 6 0 . 2 3 0 9 2 6 0 . 2 3 0 9 2 6 0 . 2 3 0 9 2 6 L A C O U N T Y A C C U M C A P O U T L A Y 0 . 0 0 0 1 1 2 0 . 0 0 0 1 1 2 0 . 0 0 0 1 1 2 0 . 0 0 0 1 1 2 0 . 0 0 0 1 1 2 0 . 0 0 0 1 1 2 0 . 0 0 0 1 1 2 0 . 0 0 0 1 1 2 0 . 0 0 0 1 1 2 0 . 0 0 0 1 1 2 C O N S O L . F I R E P R O . D I S T O F L A C O . 0 . 1 7 2 5 9 2 0 . 1 7 2 5 9 2 0 . 1 7 2 5 9 2 0 . 1 7 2 5 9 2 0 . 1 7 2 5 9 2 0 . 1 7 2 5 9 2 0 . 1 7 2 5 9 2 0 . 1 7 2 5 9 2 0 . 1 7 2 5 9 2 0 . 1 7 2 5 9 2 L A C O . F I R E - F F W 0 . 0 0 6 8 1 4 0 . 0 0 6 8 1 4 0 . 0 0 6 8 1 4 0 . 0 0 6 8 1 4 0 . 0 0 6 8 1 4 0 . 0 0 6 8 1 4 0 . 0 0 6 8 1 4 0 . 0 0 6 8 1 4 0 . 0 0 6 8 1 4 0 . 0 0 6 8 1 4 L A C O . F L . C O N . D R . I M P . D I S T . M A I N T . 0 . 0 0 1 6 9 3 0 . 0 0 1 6 9 3 0 . 0 0 1 6 9 3 0 . 0 0 1 6 9 3 0 . 0 0 1 6 9 3 0 . 0 0 1 6 9 3 0 . 0 0 1 6 9 3 0 . 0 0 1 6 9 3 0 . 0 0 1 6 9 3 0 . 0 0 1 6 9 3 L A C O F L O O D C O N T R O L M A I N T 0 . 0 0 9 5 8 0 0 . 0 0 9 5 8 0 0 . 0 0 9 5 8 0 0 . 0 0 9 5 8 0 0 . 0 0 9 5 8 0 0 . 0 0 9 5 8 0 0 . 0 0 9 5 8 0 0 . 0 0 9 5 8 0 0 . 0 0 9 5 8 0 0 . 0 0 9 5 8 0 P A L O S V E R D E S L I B R A R Y D I S T M A I N T 0 . 0 1 8 0 1 0 0 . 0 1 8 0 1 0 0 . 0 1 8 0 1 0 0 . 0 1 8 0 1 0 0 . 0 1 8 0 1 0 0 . 0 1 8 0 1 0 0 . 0 1 8 0 1 0 0 . 0 1 8 0 1 0 0 . 0 1 8 0 1 0 0 . 0 1 8 0 1 0 L A C O W E S T V E C T O R C O N T R O L D I S T . 0 . 0 0 0 1 9 0 0 . 0 0 0 1 9 0 0 . 0 0 0 1 9 0 0 . 0 0 0 1 9 0 0 . 0 0 0 1 9 0 0 . 0 0 0 1 9 0 0 . 0 0 0 1 9 0 0 . 0 0 0 1 9 0 0 . 0 0 0 1 9 0 0 . 0 0 0 1 9 0 C O S A N I T A T I O N D I S T N O 5 O P E R A T 0 . 0 1 1 9 7 5 0 . 0 1 1 9 7 5 0 . 0 1 1 9 7 5 0 . 0 1 1 9 7 5 0 . 0 1 1 9 7 5 0 . 0 1 1 9 7 5 0 . 0 1 1 9 7 5 0 . 0 1 1 9 7 5 0 . 0 1 1 9 7 5 0 . 0 1 1 9 7 5 R A N C H O P V L I G H T I N G M A I N T D I S T 0 . 0 0 5 1 8 7 0 . 0 0 5 1 8 7 0 . 0 0 5 1 8 7 0 . 0 0 5 1 8 7 0 . 0 0 5 1 8 7 0 . 0 0 5 1 8 7 0 . 0 0 5 1 8 7 0 . 0 0 5 1 8 7 0 . 0 0 5 1 8 7 0 . 0 0 5 1 8 7 W T R R E P L E N I S H M E N T D I S T O F S O C A L 0 . 0 0 0 1 7 1 0 . 0 0 0 1 7 1 0 . 0 0 0 1 7 1 0 . 0 0 0 1 7 1 0 . 0 0 0 1 7 1 0 . 0 0 0 1 7 1 0 . 0 0 0 1 7 1 0 . 0 0 0 1 7 1 0 . 0 0 0 1 7 1 0 . 0 0 0 1 7 1 E R A F 0 . 0 7 5 9 5 6 0 . 0 7 5 9 5 6 0 . 0 7 5 9 5 6 0 . 0 7 5 9 5 6 0 . 0 7 5 9 5 6 0 . 0 7 5 9 5 6 0 . 0 7 5 9 5 6 0 . 0 7 5 9 5 6 0 . 0 7 5 9 5 6 0 . 0 7 5 9 5 6 E D U C A T I O N A L A U G F D I M P O U N D 0 . 1 4 5 3 2 8 0 . 1 4 5 3 2 8 0 . 1 4 5 3 2 8 0 . 1 4 5 3 2 8 0 . 1 4 5 3 2 8 0 . 1 4 5 3 2 8 0 . 1 4 5 3 2 8 0 . 1 4 5 3 2 8 0 . 1 4 5 3 2 8 0 . 1 4 5 3 2 8 C O U N T Y S C H O O L S E R V I C E S 0 . 0 0 1 3 9 2 0 . 0 0 1 3 9 2 0 . 0 0 1 3 9 2 0 . 0 0 1 3 9 2 0 . 0 0 1 3 9 2 0 . 0 0 1 3 9 2 0 . 0 0 1 3 9 2 0 . 0 0 1 3 9 2 0 . 0 0 1 3 9 2 0 . 0 0 1 3 9 2 C H I L D R E N ' S I N S T I L T U I T I O N F U N D 0 . 0 0 2 7 6 3 0 . 0 0 2 7 6 3 0 . 0 0 2 7 6 3 0 . 0 0 2 7 6 3 0 . 0 0 2 7 6 3 0 . 0 0 2 7 6 3 0 . 0 0 2 7 6 3 0 . 0 0 2 7 6 3 0 . 0 0 2 7 6 3 0 . 0 0 2 7 6 3 L A C I T Y C O M M C O L L E G E D I S T 0 . 0 2 9 7 0 9 0 . 0 2 9 7 0 9 0 . 0 2 9 7 0 9 0 . 0 2 9 7 0 9 0 . 0 2 9 7 0 9 0 . 0 2 9 7 0 9 0 . 0 2 9 7 0 9 0 . 0 2 9 7 0 9 0 . 0 2 9 7 0 9 0 . 0 2 9 7 0 9 L A C O M M C O L L C H I L D R E N ' S C T R F D 0 . 0 0 0 3 0 7 0 . 0 0 0 3 0 7 0 . 0 0 0 3 0 7 0 . 0 0 0 3 0 7 0 . 0 0 0 3 0 7 0 . 0 0 0 3 0 7 0 . 0 0 0 3 0 7 0 . 0 0 0 3 0 7 0 . 0 0 0 3 0 7 0 . 0 0 0 3 0 7 L A U N I F I E D S C H O O L D I S T 0 . 2 1 8 7 3 0 0 . 2 1 8 7 3 0 0 . 2 1 8 7 3 0 0 . 2 1 8 7 3 0 0 . 2 1 8 7 3 0 0 . 2 1 8 7 3 0 0 . 2 1 8 7 3 0 0 . 2 1 8 7 3 0 0 . 2 1 8 7 3 0 0 . 2 1 8 7 3 0 C O . S C H . S E R V . F D - L O S A N G E L E S 0 . 0 0 0 0 1 2 0 . 0 0 0 0 1 2 0 . 0 0 0 0 1 2 0 . 0 0 0 0 1 2 0 . 0 0 0 0 1 2 0 . 0 0 0 0 1 2 0 . 0 0 0 0 1 2 0 . 0 0 0 0 1 2 0 . 0 0 0 0 1 2 0 . 0 0 0 0 1 2 D E V . C T R . H D C P D M I N O R - L A U N I F . 0 . 0 0 1 2 3 4 0 . 0 0 1 2 3 4 0 . 0 0 1 2 3 4 0 . 0 0 1 2 3 4 0 . 0 0 1 2 3 4 0 . 0 0 1 2 3 4 0 . 0 0 1 2 3 4 0 . 0 0 1 2 3 4 0 . 0 0 1 2 3 4 0 . 0 0 1 2 3 4 L A C H I L D R E N S C E N T E R F D 0 . 0 0 3 5 8 9 0 . 0 0 3 5 8 9 0 . 0 0 3 5 8 9 0 . 0 0 3 5 8 9 0 . 0 0 3 5 8 9 0 . 0 0 3 5 8 9 0 . 0 0 3 5 8 9 0 . 0 0 3 5 8 9 0 . 0 0 3 5 8 9 0 . 0 0 3 5 8 9 TO T A L 1. 0 0 0 0 0 0 1 . 0 0 0 0 0 0 1 . 0 0 0 0 0 0 1 . 0 0 0 0 0 0 1 . 0 0 0 0 0 0 1 . 0 0 0 0 0 0 1 . 0 0 0 0 0 0 1 . 0 0 0 0 0 0 1 . 0 0 0 0 0 0 1 . 0 0 0 0 0 0 De b t S e r v i c e R a t e s C O U N T Y 0. 0 0 1 0 3 0 0 . 0 0 0 9 9 0 0 . 0 0 0 9 2 0 0 . 0 0 0 8 0 0 0 . 0 0 0 6 0 0 0 . 0 0 0 0 0 0 0 . 0 0 0 0 0 0 0 . 0 0 0 0 0 0 0 . 0 0 0 0 0 0 0 . 0 0 0 0 0 0 U N I F I E D S C H O O L S 0. 0 5 2 0 6 0 0 . 0 9 1 9 1 0 0 . 1 0 3 8 2 0 0 . 1 0 3 8 4 0 0 . 1 0 6 8 0 0 0 . 1 4 3 1 0 0 0 . 1 4 5 0 0 0 0 . 1 5 1 8 0 9 0 . 1 8 6 9 5 4 0 . 1 6 8 1 8 7 C O M M N T Y C O L L E G E 0. 0 1 4 6 0 0 0 . 0 1 9 8 6 0 0 . 0 1 8 1 0 0 0 . 0 1 4 3 0 0 0 . 0 2 1 4 0 0 0 . 0 0 8 7 8 0 0 . 0 2 2 1 2 0 0 . 0 2 3 1 1 2 0 . 0 4 0 3 1 0 0 . 0 3 5 2 9 6 P A L O S V E R D E S L I B 0. 0 0 9 7 0 0 0 . 0 0 8 9 6 0 0 . 0 0 8 5 2 0 0 . 0 0 7 8 1 0 0 . 0 0 7 3 0 0 0 . 0 1 3 7 0 0 0 . 0 0 6 8 0 0 0 . 0 0 6 6 1 8 0 . 0 0 6 7 1 9 0 . 0 0 6 3 5 9 F L O O D C O N T R O L 0. 0 0 0 8 8 0 0 . 0 0 0 4 7 0 0 . 0 0 0 2 4 0 0 . 0 0 0 0 5 0 0 . 0 0 0 0 0 0 0 . 0 0 0 0 0 0 0 . 0 0 0 0 0 0 0 . 0 0 0 0 0 0 0 . 0 0 0 0 0 0 0 . 0 0 0 0 0 0 M E T R O W A T E R D I S T 0. 0 0 6 7 0 0 0 . 0 0 6 1 0 0 0 . 0 0 5 8 0 0 0 . 0 0 5 2 0 0 0 . 0 0 4 7 0 0 0 . 0 0 4 5 0 0 0 . 0 0 4 3 0 0 0 . 0 0 4 3 0 0 0 . 0 0 3 7 0 0 0 . 0 0 3 7 0 0 TO T A L 0. 0 8 4 9 7 0 0 . 1 2 8 2 9 0 0 . 1 3 7 4 0 0 0 . 1 3 2 0 0 0 0 . 1 4 0 8 0 0 0 . 1 7 0 0 8 0 0 . 1 7 8 2 2 0 0 . 1 8 5 8 3 9 0 . 2 3 7 6 8 3 0 . 2 1 3 5 4 2 TO T A L T A X R A T E 1. 0 8 4 9 7 0 1 . 1 2 8 2 9 0 1 . 1 3 7 4 0 0 1 . 1 3 2 0 0 0 1 . 1 4 0 8 0 0 1 . 1 7 0 0 8 0 1 . 1 7 8 2 2 0 1 . 1 8 5 8 3 9 1 . 2 3 7 6 8 3 1 . 2 1 3 5 4 2 Ci t y o f R a n c h o P a l o s V e r d e s Pr o p e r t y T a x R a t e s - D i r e c t a n d O v e r l a p p i n g G o v e r n m e n t s La s t T e n F i s c a l Y e a r s So u r c e : 2 0 1 0 - 2 0 1 2 & 2 0 0 6 - 0 7 C o u n t y A s s e s s o r d a t a , M u n i S e r v i c e s , L L C So u r c e : 2 0 0 8 - 2 0 0 9 & 2 0 0 6 a n d p r i o r : d a t a i s p r o v i d e d f r o m p r e v i o u s l y p u b l i s h e d C A F R ' s . Lo s A n g e l e s C o u n t y A u d i t o r / C o n t r o l l e r T R A 0 0 1 - 2 2 4 Ci t y h a s n o s e p ar a t e d e b t s e r v i c e r a t e , d i r e c t r a t e i s 1 0 0 % o p er a t i n g . 13 9 Percentage of Percentage of Taxable Total City Taxable Taxable Total City Taxable Taxpayer Value ($) Rank Value (%)Value ($) Rank Value (%) Long Point Development LLC 331,377,907 1 3.50% PPC Villas RPV LLC 64,189,287 2 0.68% VH Property Corp 54,605,177 3 0.58% P V Victoria Apts LLC 47,055,126 4 0.50% Terraces Rancho Palos Verdes 35,413,270 5 0.37% Western Riviera Investors 28,966,800 6 0.31% Golden Cove LLC 26,607,901 7 0.28% Terranea Resort 24,459,679 8 0.26% BVF II Madison LLC 23,069,957 9 0.24% Cox Communications Inc.22,735,148 10 0.24% Belmont Village RPV LP 22,399,961 11 0.24% Johnson Eric C 15,951,715 12 0.17% Tridiamond LLC 13,411,749 13 0.14% California Water Service Co 10,246,488 14 0.11% Kariger Brian P 8,392,935 15 0.09% Victoria Apartments 7,821,788 16 0.08% Palos Verdes Terrace LTD 7,662,361 17 0.08% Saitta Christopher L 6,599,181 18 0.07% Amdan Investment LLC Lessee 6,550,000 19 0.07% Gerts Igor Anna 6,463,000 20 0.07% Labarba James G 6,133,098 21 0.06% Imbach Scott A & Diane Y 6,022,988 22 0.06% Clow Leland E Ilene F 5,880,699 23 0.06% HSU Tong H 5,866,730 24 0.06% Kip Holding Inc.5,602,022 25 0.06% Ocean Trails L P 58,479,923 1 0.99% P V Victoria Apts LLC 40,814,540 2 0.69% RPV Associates LLC 36,749,705 3 0.62% Connecticut General Life 28,085,261 4 0.48% Western Riviera Investors 24,853,212 5 0.42% York Long Point Assoc 22,010,505 6 0.37% Gardner Theodore R 13,528,404 7 0.23% Salvation Army 13,456,653 8 0.23% Top Terraces Inc.12,444,000 9 0.21% Victoria Apartments 6,785,826 10 0.11% Braun William 6,720,000 11 0.11% Donahue Schriber Reality Group 5,942,764 12 0.10% MVI Corp 5,505,795 13 0.09% Labarba James G 5,318,862 14 0.09% Chung David W 4,991,000 15 0.08% Foster Robert D & Gina D 4,820,760 16 0.08% Briles Richard & Keanna 4,681,800 17 0.08% Bradford Edward T & Paullee G 4,536,524 18 0.08% Hoffman John C & Paula J 4,467,440 19 0.08% Moshfeghi Mehran 4,251,500 20 0.07% Yeong Yae Kim 4,192,000 21 0.07% Levine Irving 4,155,004 22 0.07% Marino Joseph C & Kimberly 3,937,200 23 0.07% Hill John W Elizabeth d TRS 3,834,208 24 0.06% Pemba Properties Inc.3,826,430 25 0.06% Total Top 25 Taxpayers 793,484,967$ 8.38%328,389,316$ 5.56% Total Taxable Value 9,468,372,445$ 100.00% 5,908,898,049$ 100.00% Source: Los Angeles County Assessor data, MuniServices, LLC 2011-12 2002-03 City of Rancho Palos Verdes Principal Property Tax Payers Last Fiscal Year and Nine Years Ago 140 To t a l T a x Fi s c a l Le v y f o r Pe r c e n t a g e Co l l e c t i o n s i n Pe r c e n t a g e Ye a r F i s c a l Y e a r Am o u n t of L e v y Su b s e q u e n t Y e a r s A m o u n t of L e v y 20 0 5 4, 2 8 4 $ 4, 0 0 1 $ 93 . 4 0 % 14 4 $ 4, 1 4 5 $ 96 . 7 6 % 20 0 6 4, 6 4 3 4, 5 0 6 97 . 0 6 % 36 4, 5 4 2 97 . 8 3 % 20 0 7 5, 0 7 8 4, 7 9 9 94 . 5 1 % 10 4, 8 0 9 94 . 7 0 % 20 0 8 5, 3 5 1 5, 3 1 6 99 . 3 5 % 10 5, 3 2 6 99 . 5 3 % 20 0 9 6, 1 1 6 5, 7 3 4 93 . 7 6 % 8 5, 7 4 2 93 . 8 8 % 20 1 0 * 5, 4 4 7 4, 9 1 7 90 . 2 7 % 8 4, 9 2 5 90 . 4 2 % 20 1 1 * 5, 5 9 7 5, 4 6 2 97 . 5 9 % 8 5, 4 7 0 97 . 7 3 % 20 1 2 5, 7 7 7 5, 6 5 6 97 . 9 1 % 8 5, 6 6 4 98 . 0 4 % So u r c e : C o u n t y A s s e s s o r D a t a a n d C i t y G e n e r a l L e d g e r * I n c l u d e s 1 % s e c u r e d a p p o r t i o n m e n t o n l y Th e d e t a i l e d i n f o r m a t i o n p r e s e n t e d i n t h i s t a b l e w a s n o t o b t a i n e d b y t h e C i t y f o r f i s c a l y e a r s p r i o r t o 2 0 0 5 , a n d is t h e r e f o r e u n a v a i l a b l e . Co l l e c t e d w i t h i n t h e Fi s c a l Y e a r o f t h e L e v y To t a l C o l l e c t i o n s t o D a t e Ci t y o f R a n c h o P a l o s V e r d e s Pr o p e r t y T a x L e v i e s a n d C o l l e c t i o n s La s t E i g h t F i s c a l Y e a r s (a m o u n t s e x p r e s s e d i n t h o u s a n d s ) 14 1 RD A RD A To t a l De b t R a t i o o f D e b t R a t i o o f D e b t Fi s c a l T a x I n c r e m e n t D e f e r r e d I n t e r e s t P ri m a r y P e r t o P r o p e r t y t o P e r s o n a l Ye a r B o n d Pa y a b l e G o v e r n m e n t C a p i t a Va l u e T o t a l I n c o m e 20 0 3 5, 4 5 5 3, 1 1 1 8, 5 6 6 20 2 . 4 0 0. 1 1 % 0 . 0 0 0 4 3 7 2 % 20 0 4 5, 4 5 5 3, 1 1 1 8, 5 6 6 20 0 . 0 9 0. 1 0 % 0 . 0 0 0 4 3 2 2 % 20 0 5 5, 4 5 0 2, 4 6 9 7, 9 1 9 18 1 . 9 4 0. 0 9 % 0 . 0 0 0 3 5 6 7 % 20 0 6 5, 4 3 5 2, 2 8 4 7, 7 1 9 17 9 . 5 5 0. 0 8 % 0 . 0 0 0 3 5 2 0 % 20 0 7 5, 4 1 0 2, 0 6 1 7, 4 7 1 17 3 . 3 7 0. 0 7 % 0 . 0 0 0 3 3 9 9 % 20 0 8 5, 3 7 0 1, 7 8 6 7, 1 5 6 16 6 . 5 6 0. 0 6 % - 20 0 9 5, 3 1 5 1, 4 9 1 6, 8 0 6 15 9 . 3 2 0. 0 6 % 0 . 0 0 0 3 0 0 8 % 20 1 0 5, 2 5 0 1, 1 3 6 6, 3 8 6 14 9 . 7 6 0. 0 7 % 0 . 0 0 0 2 8 3 8 % 20 1 1 5, 1 6 5 79 8 5, 9 6 3 14 2 . 7 7 0. 0 7 % 0 . 0 0 0 2 4 5 8 % 20 1 2 ( 1 ) 5, 0 6 5 43 5 5, 5 0 0 13 1 . 2 7 0. 0 5 % 0 . 0 0 0 2 1 4 8 % So u r c e : C i t y F i n a n c i a l R e c o r d s (1 ) E f f e c t i v e F e b r u a r y 1 , 2 0 1 2 , t h e R e d e v e l o p m e n t A g e n c y w a s d i s s o l v e d a s a r e s u l t o f l e g i s l a t i o n e n a c t e d b y t h e S t a t e o f C a l i f o r n i a . A l l d e b t w a s t r a n s f e r r e d t o a s u c c e s s o r a g e n c y t h a t i s w i n d i n g u p t h e a f f a i r s o f t h e R e v e l o p m e n t A g e n c y . T h i s d e b t i s n o l o n g e r o n o b l i g a t i o n o f t h e p r i m a r y g o v e r n m e n t . Go v e r n m e n t a l A c t i v i t i e s Ci t y o f R a n c h o P a l o s V e r d e s Ra t i o s o f O u t s t a n d i n g D e b t b y T y p e La s t T e n F i s c a l Y e a r s (A m o u n t s e x p r e s s e d i n t h o u s a n d s , e x c e p t p e r c a p i t a a m o u n t ) 14 2 Total Debt City’s Share of DIRECT DEBT:6/30/2012 % Applicable (1)Debt 6/30/12 City of Rancho Palos Verdes 0 100.000%0 Total Debt City’s Share of DIRECT AND OVERLAPPING TAX AND ASSESSMENT DEBT:6/30/2012 % Applicable (1)Debt 6/30/12 Los Angeles County Flood Control District $37,195,000 1.038% $386,084 Metropolitan Water District 196,545,000 0.523% 1,027,930 Los Angeles Community College District 3,504,910,000 1.798% 63,018,282 Los Angeles Unified School District 11,279,905,000 0.216% 24,364,595 Palos Verdes Unified School District 79,376,639 47.515% 37,715,810 Palos Verdes Library District 5,575,000 50.082% 2,792,072 Los Angeles County Regional Park and Open Space Assessment District 170,725,000 1.016% 1,734,566 SUBTOTAL OVERLAPPING TAX AND ASSESSMENT DEBT 131,039,339 OVERLAPPING GENERAL FUND DEBT: Los Angeles County General Fund Obligations $1,474,122,758 1.016% $14,977,087 Los Angeles County Superintendent of Schools Certificates of Participation 11,269,678 1.016% 114,500 Los Angeles County Sanitation District No. 5 Authority 49,899,761 11.177% 5,577,296 Los Angeles County South Bay Cities Sanitation District Authority 8,501,885 4.514% 383,775 Los Angeles Unified School District Certificates of Participation 419,851,037 0.216% 906,878 SUBTOTAL GROSS OVERLAPPING GENERAL FUND DEBT $21,959,536 Less: Los Angeles County General Fund Obligations supported by landfill revenues 169,653 Los Angeles Unified School District QZABs supported by investment fund 9,523 SUBTOTAL NET OVERLAPPING GENERAL FUND DEBT 21,780,360 TOTAL DIRECT DEBT $0 GROSS COMBINED SUBTOTAL OVERLAPPING DEBT $152,998,875 (2) NET COMBINED SUBTOTAL OVERLAPPING DEBT $152,819,699 GROSS COMBINED TOTAL DEBT $152,998,875 NET COMBINED TOTAL DEBT $152,819,699 (1) The percentage of overlapping debt applicable is estimated using taxable assessed property values. Applicable percentages were estimated by determining the portion of the overlapping government's taxable assessed value that is within the City's boundaries and dividing it by the overlapping government's total taxable assesed value. (2) Excludes tax and revenue anticipation notes, revenue, mortgage revenue and tax allocation bonds and non-bonded capital lease obligations. 2011-12 Assessed Valuation: 9,545,121,701 Redevelopment Incremental Valuation: 114,494,354 Adjusted Assessed Valuation:$9,430,627,347 Ratios to 2011-12 Assessed Valuation: Direct Debt 0.00% Total Direct and Overlapping Tax and Assessment Debt 1.37% Ratios to Adjusted Assessed Valuation: Gross Combined Total Debt 1.62% Net Combined Total Debt 1.62% STATE SCHOOL BUILDING AID REPAYABLE AS OF 6/30/12:$0 Source: 2011-12 California Municipal Statistical Co. City of Rancho Palos Verdes Direct and Overlapping Governmental Activities Debt Current Year 143 20 0 3 2 0 0 4 2 0 0 5 20 0 6 20 0 7 20 0 8 20 0 9 20 1 0 20 1 1 20 1 2 D e b t L i m i t 90 2 , 1 3 3 $ 96 2 , 5 3 9 $ 1, 0 2 1 , 1 7 7 $ 1, 1 0 5 , 6 4 7 $ 1, 1 9 5 , 6 6 5 $ 1, 2 7 4 , 9 1 6 $ 1, 3 4 5 , 5 9 4 $ 1, 3 5 1 , 6 1 7 $ 1, 3 8 2 , 8 5 0 $ 1, 4 2 0 , 2 5 6 $ T o t a l N e t D e b t a p p l i c a b l e t o l i m i t - - - - - - - - - - L e g a l D e b t M a r g i n 90 2 , 1 3 3 $ 96 2 , 5 3 9 $ 1, 0 2 1 , 1 7 7 $ 1, 1 0 5 , 6 4 7 $ 1, 1 9 5 , 6 6 5 $ 1, 2 7 4 , 9 1 6 $ 1, 3 4 5 , 5 9 4 $ 1, 3 5 1 , 6 1 7 $ 1, 3 8 2 , 8 5 0 $ 1, 4 2 0 , 2 5 6 $ To t a l N e t D e b t a p p l i c a b l e t o t h e l i m i t as a p e r c e n t a g e o f D e b t L i m i t 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% To t a l T a x a b l e V a l u e ( s e e p a g e 1 3 3 ) 9 , 4 6 8 , 3 7 2 $ De b t L i m i t ( 1 5 % o f t o t a l t a x a b l e v a l u e ) 1 , 4 2 0 , 2 5 6 De b t a p p l i c a b l e t o l i m i t - Le g a l D e b t M a r g i n 1, 4 2 0 , 2 5 6 $ F i s c a l Y ea r C i t y o f R a n c h o P a l o s V e r d e s L e ga l D e b t M a r g i n I n f o r m a t i o n L a st T e n F i s c a l Y e a r s ( A m ou n t s e x p r e s s e d i n t h o u s a n d s ) 14 4 Pe r C a p i t a ** P u b l i c Co u n t y Ci t y Ci t y Fi s c a l Pe r s o n a l Pe r s o n a l M e d i a n S c h o o l U n e m p l o y m e n t U n e m p l o y m e n t C o u n t y P o p u l a t i o n Ye a r P o p u l a t i o n ( 1 ) I n c o m e ( 2 ) I n c o m e ( 2 ) A g e ( 4 ) E n r o l l m e n t R a t e ( % ) ( 3 ) R a t e ( % ) ( 3 ) P o p u l a t i o n ( 1 ) ( % o f C o u n t y ) 20 0 2 - 0 3 42 , 3 2 2 1, 9 5 9 , 2 5 4 , 6 6 8 46 . 2 9 4 44 . 7 - - - - - 20 0 3 - 0 4 42 , 8 1 0 1, 9 8 1 , 8 4 6 , 1 4 0 46 . 2 9 4 44 . 7 - - - - - 20 0 4 - 0 5 43 , 5 2 5 2, 2 1 9 , 9 0 5 , 5 7 5 51 . 0 0 3 43 . 4 - - 1. 5 0 % - - 20 0 5 - 0 6 42 , 9 9 1 2, 1 9 2 , 6 6 9 , 9 7 3 51 . 0 0 3 43 . 4 - - 1. 5 0 % - - 20 0 6 - 0 7 43 , 0 9 2 2, 1 9 7 , 8 2 1 , 2 7 6 51 . 0 0 3 43 . 4 - - 1. 5 0 % - - 20 0 7 - 0 8 42 , 9 6 4 - - - - - - - - 20 0 8 - 0 9 42 , 7 2 0 2, 2 6 2 , 4 9 3 , 9 2 0 52 . 9 6 1 43 . 4 12 , 0 3 3 7. 5 % 2. 5 % 1 0 , 3 0 1 , 6 5 8 0. 4 1 % 20 0 9 - 1 0 42 , 6 4 2 2, 2 5 0 , 3 4 6 , 2 6 6 52 . 7 7 3 44 . 9 11 , 9 0 0 11 . 6 % 4. 0 % 1 0 , 3 5 5 , 0 5 3 0. 4 1 % 20 1 0 - 1 1 41 , 7 6 6 2, 4 2 5 , 9 3 6 , 3 4 4 58 . 0 8 4 44 . 3 11 , 9 2 8 11 . 9 % 4. 1 % 9, 8 5 8 , 9 8 9 0. 4 2 % 20 1 1 - 1 2 41 , 8 9 7 2, 5 6 1 , 0 1 6 , 9 7 1 61 . 1 2 7 47 . 6 11 , 8 4 0 11 . 1 % 3. 8 % 9, 8 8 4 , 6 3 2 0. 4 2 % C i t y o f R a n c h o P a l o s V e r d e s D e m o g r a p h i c a n d E c o n o m i c S t a t i s t i c s L a s t T e n F i s c a l Y e a r s So u r c e : 2 0 1 1 - 1 2 M u n i S e r v i c e s , L L C 1. ) P o p u l a t i o n P r o j e c t i o n s a r e p r o v i d e d b y t h e C a l i f o r n i a D e p a r t m e n t o f F i n a n c e P r o j e c t i o n s . 2. ) I n c o m e D a t a i s p r o v i d e d b y t h e U S C e n s u s B u r e a u , 2 0 1 0 A m e r i c a n C o m m u n i t y S u r v e y . 3. ) U n e m p l o y m e n t D a t a i s p r o v i d e d b y t h e E D D ' s B u r e a u o f L a b o r S t a t i s t i c s D e p a r t m e n t . ** S t u d e n t E n r o l l m e n t r e f l e c t s t h e t o t a l n u m b e r o f s t u d e n t s e n r o l l e d i n t h e P a l o s V e r d e s U n i f i e d Sc h o o l D i s t r i c t . O t h e r s c h o o l d i s t r i c t s w i t h i n t h e C i t y a r e n o t i n c l u d e d . Th e C a l i f o r n i a D e p a r t m e n t o f F i n a n c e d e m o g r a p h i c s e s t i m a t e s n o w i n c o r p o r a t e 2 0 1 0 C e n s u s co u n t s a s t h e b e n c h m a r k . T h e r e f o r e , t h e e s t i m a t e s f o r 2 0 1 0 - 2 0 1 2 p u b l i s h e d i n t h i s r e p o r t m i g h t b e no t i c e a b l y d i f f e r e n t f r o m t h e p re v i o u s y ea r e s t i m a t e s 14 5 Taxpayer Business Type Taxpayer Business Type 7-Eleven Food Stores Food Markets Admiral Risty Restaurant Restaurants Admiral Risty Restaurant Restaurants Albertson's Food Centers Food Markets America's Tire Auto Parts/Repair America's Tire Auto Parts/Repair Carl's Jr. Restaurant Restaurants Bay Cities Vacuum Sew & Carpet Furniture/Appliance Centinela Feed & Pet Supplies Inc Miscellaneous Retail California Do It Center Bldg.Matls-Retail Chevron Service Stations Service Stations Carl's Jr. Restaurant Restaurants Coco's Restaurants Inc. Restaurants Chevron Service Stations Service Stations Denny's Restaurant Restaurants Coco's Restaurants Inc Restaurants El Pollo Loco Inc. Restaurants Discount Tire Auto Parts/Repair Good Night Mattress Furniture/Appliance El Pollo Loco Inc Restaurants Green Hills Memorial Park Inc. Miscellaneous Other Fedex Office Miscellaneous Retail Green Hills Mortuary Miscellaneous Other Green Hills Memorial Park Inc. Miscellaneous Other Hughes Markets Food Markets Green Hills Mortuary Miscellaneous Other IHOP Restaurants Restaurants Hughes Markets Food Markets Jack In The Box Restaurants Restaurants Jack In The Box Restaurants Restaurants Los Verdes Country Club Restaurants Los Verdes Country Club Restaurants Marie Callender Restaurant Restaurants Marie Callender Restaurant Restaurants Marshalls Apparel Stores Mobil Service Stations Service Stations Mobil Service Stations Service Stations New York Food & Catering Restaurants O'Reilly Auto Parts Auto Parts/Repair Ocean Trails Golf Club Restaurants Smart & Final Food Markets O'Reilly Auto Parts Auto Parts/Repair Swank Audio Visuals Electronic Equipment Pacific Crown Service Station Service Stations Terranea Resort Restaurants Salvation Army Furniture/Appliance Trader Joe's Food Markets Trader Joe's Food Markets VH Property Corp. Miscellaneous Retail VH Property Corp. Miscellaneous Retail Source: SBOE data, MuniServices, LLC Top Sales Tax Producers listed in alphabetical order. 2011-12 2002-03 City of Rancho Palos Verdes Principal Sales Tax Producers Last Fiscal Year and Nine Years Ago 146 2012 2009 Percentage Percentage of Total City of Total City Employer Employees Rank Employment Employees Rank Employment Palos Verdes Peninsula Unified School District 1,970 1 9.43% Terranea Resort Hotel 730 2 3.49% Trump National (1)260 3 1.24% Marymount College 220 4 1.05% Keller Williams Realty 163 5 0.78% Canterbury 115 6 0.55% Belmontcorp LTD 111 7 0.53% Trader Joe's 88 8 0.42% Ralphs 83 9 0.40% Green Hills Memorial Park 80 10 0.38% Palos Verdes Peninsula Unified School District 1970 1 9.56% Terranea Resort Hotel 730 2 3.54% Trump National 300 3 1.46% Marymount College 195 4 0.95% Ralphs 115 5 0.56% Keller Williams Realty 112 6 0.54% Belmontcorp Ltd 94 7 0.46% Green Hills Memorial Park 85 8 0.41% American Golf Corp 70 9 0.34% St. John Fishers 50 10 0.24% Subtotal of Principal Employers 3,820 18.28% 3,721 18.06% Total City Employment (2)20,900 20,600 Source: MuniServices, LLC (1) Includes full time and part time employees. (2) Total City Employment provided by EDD Labor Force Data. City of Rancho Palos Verdes Principal Employers Current Year and Three Years Ago Results based on direct correspondence with city's local businesses. 147 20 0 3 2 0 0 4 2 0 0 5 2 0 0 6 2 0 0 7 2 0 0 8 2 0 0 9 2 0 1 0 2 0 1 1 2 0 1 2 Fu n c t i o n Ge n e r a l G o v e r n m e n t 4 5 4 5 4 5 4 7 5 0 5 5 5 8 5 3 5 4 5 2 Re c r e a t i o n P a r t - T i m e 1 0 1 0 1 0 1 0 1 0 1 0 1 1 1 7 1 8 1 7 To t a l 55 5 5 5 5 5 7 6 0 6 5 6 9 7 0 7 2 6 9 So u r c e : C i t y B u d g e t d o c u m e n t s a n d P a y r o l l r e c o r d s C i t y o f R a n c h o P a l o s V e r d e s F u l l - t i m e E q u i v a l e n t C i t y G o v e r n m e n t E m p l o y e e s b y F u n c t i o n L a s t T e n F i s c a l Y e a r s 14 8 20 0 3 2 0 0 4 2 0 0 5 2 0 0 6 2 0 0 7 2 0 0 8 20 0 9 20 1 0 20 1 1 20 1 2 Fu n c t i o n Ad m i n i s t r a t i o n Em p l o y e e R e s i g n a t i o n s - 5 4 4 4 8 4 9 5 8 Wo r k e r s C o m p e n s a t i o n C l a i m s 2 2 3 4 2 4 2 5 3 3 Li a b i l i t y C l a i m s 14 14 18 3 1 1 4 16 13 13 14 11 Bu d g e t A d j u s t m e n t s 30 27 36 4 8 3 2 26 18 21 17 11 Bu s i n e s s L i c e n s e s I s s u e d 1, 9 6 1 2, 1 0 2 1, 9 0 9 1 , 8 0 1 1 , 8 3 7 1, 7 0 9 1, 8 1 9 1, 6 2 9 1, 8 9 1 1, 2 9 4 We b S i t e P a g e V i e w s 11 9 , 1 0 4 13 3 , 4 8 1 2 2 4 , 7 7 7 1. 3 m i l 1 . 6 m i l 70 1 , 0 0 4 3. 8 m i l 2. 9 m i l 2. 8 m i l 3. 0 m i l Pu b l i c S a f e t y Pa r t I C r i m e R a t e s ( p e r 1 0 , 0 0 0 p o p u l a t i o n ) 1 2 2 12 2 10 1 1 2 0 1 3 9 12 3 10 2 11 0 13 7 . 8 5 13 9 . 5 2 Pu b l i c W o r k s So l i d W a s t e D i v e r s i o n R a t e s ( 1 ) 57 % 6 1 % 5 9 % 5 5 % 5 6 % 4 . 7 l b s / p e r s o n / d a y 4 . 1 l b s / p e r s o n / d a y 4 . 2 l b s / p e r s o n / d a y 4 . 2 l b s / p e r s o n / d a y 4 . 2 l b s / p e r s o n /d a y Pa v e m e n t R a t i n g 80 89 89 8 2 8 2 DN A 84 . 5 84 . 5 84 . 5 Pa r k s a n d R e c r e a t i o n Pa r k E v e n t s 91 5 82 5 78 0 9 3 7 7 7 0 69 2 82 5 69 0 58 0 58 2 Cl a s s M e e t i n g s a t P a r k s 2, 1 3 4 2, 9 3 5 2, 8 9 3 2 , 8 5 6 2 , 6 4 7 2, 7 7 2 2, 7 0 8 2, 3 9 8 2, 3 1 3 1, 5 8 7 Do c en t L e d N a t u r e H i k e s 45 80 65 6 2 9 8 91 10 5 10 3 10 5 10 4 Co m m u n i t y D e v e l o p m e n t Bu i l d i n g P e r m i t s P r o c e s s e d 1, 3 2 7 1, 3 9 9 1, 2 3 3 1 , 3 8 2 1 , 2 4 4 1, 6 9 2 1, 4 0 4 1, 2 4 3 1, 4 3 2 1, 2 2 1 Pl a n C h e c k s 15 0 18 6 20 8 1 6 3 1 6 4 24 7 22 6 15 4 16 1 16 1 Mu n i c i p a l C o d e V i o l a t i o n s C l o s e d 20 3 21 4 18 0 1 5 9 1 6 2 21 6 33 9 13 8 37 1 32 1 So u r c e : C i t y D e p a r t m e n t s DN A : D a t a N o t A v a i l a b l e (1 ) : A n e w s y s t e m o f m e a s u r i n g A B 9 3 9 c o m p l i a n c e w a s i m p l e m e n t e d i n 2 0 0 8 w i t h t h e p a s s a g e o f S B 1 0 1 6 . T h i s c h a n g e d t h e p r e v i o u s d iv e r s i o n c a l c u l a t i o n m e t h o d t o t h e n e w d i s p o s a l - b a s e d i n d i c a t o r - t h e pe r c a p i t a d i s p o s a l r a t e . T h e p e r c a p i t a d i s p o s a l t a r g e t i s b a s e d o n t h e a v e r a g e o f 5 0 p e r c e n t o f g e n e r a t i o n i n 2 0 0 3 t h r o u g h 2 0 06 , e x p r e s s e d i n t e r m s o f p e r c a p i t a l d i s p o s a l . C i t y o f R a n c h o P a l o s V e r d e s O p e r a t i n g I n d i c a t o r s b y F u n c t i o n L a s t T e n F i s c a l Y e a r s 14 9 20 0 3 2 0 0 4 2 0 0 5 2 0 0 6 2 0 0 7 2 0 0 8 2 0 0 9 2 0 1 0 2 0 1 1 2 0 1 2 Fu n c t i o n Ad m i n i s t r a t i o n Co m p u t e r W o r k s t a t i o n s DN A D N A 8 1 8 1 8 5 9 1 9 2 1 0 1 9 2 8 8 Pu b l i c S a f e t y ( 1 ) Pu b l i c W o r k s St r e e t M i l e s 14 3 14 3 14 3 14 3 14 3 1 4 3 1 4 3 1 4 3 1 4 3 1 4 4 Tr a f f i c S i g n a l s 15 15 15 15 15 1 6 1 6 1 6 1 6 1 8 Pa r k s a n d R e c r e a t i o n Pa r k s 15 15 15 16 16 1 6 1 6 1 5 1 5 1 5 Co m m u n i t y D e v e l o p m e n t Ve h i c l e s U s e d f o r I n s p e c t i o n s 3 3 3 3 3 5 5 5 5 5 So u r c e : C i t y C a p i t a l A s s e t R e c o r d s DN A : D a t a N o t A v a i l a b l e (1 ) : P u b l i c s a f e t y s e r v i c e s a r e c o n t r a c t e d w i t h o t h e r a g e n ci e s . T h e C i t y d o e s n o t o w n a n y p u b l i c s a f e t y c a p i t a l a s s e t s . C i t y o f R a n c h o P a l o s V e r d e s C a p i t a l A s s e t S t a t i s t i c s b y F u n c t i o n L a s t T e n F i s c a l Y e a r s 15 0