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RPVCCA_CC_SR_2012_01_17_03_FY10-11_CAFRCrrvOF MEMORANDUM TO: FROM: DATE: SUBJECT: REVIEWED: Project Manager: HONORABLE MAYOR &CITY COUNCIL MEMiiRS DENNIS McLEAN,DIRECTOR OF FINANCE &' INFORMATION TECHNOLOGY JANUARY 17,2012 FY10-11 COMPREHENSIVE ANNUAL FINANCIAL REPORT CAROLYN LEHR,CITY MANAGER 09--- Kathryn Downs,Deputy Director of Finance &Information Technology RECOMMENDATION Receive and file the FY1 0-11 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 FY1 0-11 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 FY1 0-11 financial statements. The Unreserved General Fund Balance available for spending (referred to as General Fund Reserves)at June 30,2011 was $11,385,761,which is $1,586,854 more than expected.The overall General Fund Reserves Variance is summarized as follows: .ImF@,';EW'G..f'~.w'1ii1!f'Zj.··,,·~w§.~~~i 22,755,637 22,921,818 166,181 17,978,917 17,081,270 897,647 6,756,458 6,313,328 443,130 ~~E~::f••~:i'a.f?-lW~F~&fJmwf~%!f~}!j'~~i"Changes in Non-8pendable Fund Balanre (i.e.prepaid amounts,inventory and Agency advance)79,896 ~~r~fifj7A'41i~~:?_~.m~.·.....'~·,·,.'.~~....,,~~~$£~8~~f&;~r~ .~~mm' Revenue Expenditures (excluding effect of contuing appropriations) Net transfers out 3-1 FY10-11 Comprehensive Annual Financial Report January 17,2012 Page 2 of6 ·DISCUSSION Comprehensive Annual Financial Report (CAFR) A copy of the FY10-11 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 units as of June 30,2011 (Redevelopment Agency and Joint Powers Improvement Authority).A separate set of financial statements for both of the City's component units (inclusive of a separate audit opinion for each)is expected to be presented on February 7,2012.A copy of the CAFR is currently available for review by the public in the reception area at City Hall and has been posted on the Finance &Information Technology page on the City's website. Staff believes that the FY1 0-11 CAFR meets the standards and requirements established by the Governmental Accounting Standards Board (GASB)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 30,2011.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 FY1 0-11.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 in an 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 principals (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 indentified no deficiencies 3-2 FY10-11 Comprehensive Annual Financial Report January 17,2012 Page 3 of6 .in internal control over financial reporting considered to be material weaknesses.A copy of this internal control opinion is attached (Attachment B). Report to Audit Committee The audit partner,Bob Callanan,conducted an exit interview with Mayor Misetich on January 9tti •The 2011 Audit Sub-Committee of the City Council included former Mayor Tom Long and Mayor Misetich.We expect that Mayor Misetich will appoint another City Council Member to the Audit Committee on January 17,2012 to serve in 2012.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 than $500,000 for projects funded with federal monies.The City received $302,296 of federal assistance during FY1 0-11,which was primarily a combination of Community Development Block Grant money for the Home Improvement grant and loan program and an Energy Efficiency Block Grant for replacement of City Hall windows.A Single Audit is not required to be performed for FY10-11. Actual General Fund Reserves as of June 30,2011 In conjunction with the adoption of the FY11-12 budget on June 21,2011,Staff estimated that ending General fund reserves would be $9,159,835 as of June 30,2011.Upon the conclusion of the fiscal year ended June 30,2011,the actual balance of General fund reserves was $11,385,761.A comparison of estimated vs.actual General fund reserves follows. Revenue Discussion A comparison of actual and budgeted revenue in the General fund for FY1 0-11 is provided below. 3-3 FY10-11 Comprehensive Annual Financial Report January 17,2012 Page 4 of6 ;(,;;! Property taxes $6,239,417 $5,979,684 $(259,733) Property transfer tax 180,000 229,816 49,816 Property tax in lieu of vehide license fees 3,490,200 3,511,629 21,429 Property tax in lieu of sales tax 430,500 431,487 987 Sales and use tax 1,510,400 1,518,291 7,891 Transient occupancy tax 2,626,100 2,640,368 14,268 Franchise taxes 1,726,000 1,824,891 98,891 Utility user taxes 2,461,800 2,406,833 (54,967) Business liCEnse tax 608,800 581,141 (27,659) Golf tax 336,300 363,402 27,1 02 Planning,-building &safety,and other permits 2,014,500 1,932,844 (81,656) Fines and forfeitures 154,000 209,778 55,778 Interest revenue 65,000 60,077 (4,923) Other use of money and property (rents &leases)412,300 530,705 118,405 Charges for services 210,300 224,319 14,019 Intergovernmental (grants &vehide license fees)155,000 226,803 71,803 Other revenue 135,020 249,750 114,730 1m Total actual revenues exceeded the budget by $166,181.A brief explanation of the reasons for significant variances of actual vs.estimated revenue during FY10-11 in the General fund follows: >-Based on information received from the County in December 2010,property tax revenue was estimated to increase 2.3%in FY10-11.In addition to the estimated increase,the budget included a catch-up payment for FY09-1 0 property tax revenue related to the improvements at Terranea that was not paid to the City in FY09-10. The County's 2.3%estimate had already included this catch-up payment,instead of accounting for it separately as a prior-year payment.Upon analyzing revenues during FY1 0-11 ,Staff did not request a budget adjustment for the difference in the property tax estimate,as it was clear that other favorable General Fund revenue variances would offset the variance. >-Franchise tax increased about $40,000 due to the new contract with Edco,which requires fixed payments vs.a payment based on a percentage of the waste hauler revenue.Verizon franchise tax increased from $49,678 in FY09-10 to $83,947 in FY1 0-11 due to an increase of activity in the City. >-There was about a 1%FY1 0-11 increase in cost-based fees charged to the public, as unanimously approved by the City Council on September 7,2010.Permit activity decreased by about 2%from FY09-10 to FY10-11.The FY10-11 budget was prepared before the FY09-10 actual numbers were available,and was based on a modest 1%increase from the FY09-10 budgeted amount. >-The City received an additional one-time payment of $91,777 from the state for Vehicle License Fees "excess collections"for FY05-06 through FY09-10. >-The City received a one-time reimbursement of $71,015 for the special election related to Marymount,which was recorded in "Other revenue". 3-4 FY10-11 Comprehensive Annual Financial Report January 17,2012 Page 5 of6 Expenditure Discussion Consistent with prior years'variances,actual expenditures were $897,647 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. >General Liability insurance retroactive credit -this is a one-time credit for about $235,000 that the City received as a result of the California Joint Powers Insurance Authority changing its methodology for adjusting member contributions. >Legal Services,Animal Control,Building Maintenance,and Park Maintenance - these programs were conservatively budgeted and actual costs resulted in permanent savings.Based upon observing the historical favorable trend,the Park Maintenance program was analyzed by Staff during preparation of the FY11-12 budget and reduced by about $186,000,which should help to mitigate future variances.Each General Fund program with consistent significant favorable variances will be analyzed during the 2012 budget process to help determine whether future program budgets should be reduced. >Park Rangers -the FY 10-11 budget for the Park Rangers was prepared before the contract was finalized.Initial service levels were less than originally anticipated and did not begin until September 2010,resulting in more than $66,000 of one-time FY10-11 budgetary savings. Transfers Discussion As of June 30,2011,the City implemented Governmental Accounting Standards Board Statement No.54,which modified the definition of a Special Revenue Fund.As a result, the Utility Undergrounding Fund and Roadway Beautification Fund no longer met the definition,and were closed with City Council approval on April 19,2011.The cash was transferred from those funds to the General Fund,increasing the General Fund balance by $288,332. FY11-12 Budget Impact Staff continues to analyze FY1 0-11 variances and recent trends,and estimate the impact on FY11-12 results.As part of the Midyear Financial Review currently scheduled for the February 21,2012 agenda,Staff will have more information and expects to propose both revenue and expenditure adjustments. FISCAL IMPACT Estimated June 30,2012 General fund reserves have been revised to include the overall favorable FY10-11 variance of $1 ,586,854 (see Attachment A). Attachments: A -FY11-12 Statement of Estimated General Fund Reserves B -Independent Auditors'Report On Internal Control Over Financial Reporting And On 3-5 FY10-11 Comprehensive Annual Financial Report January 17,2012 Page 6 of6 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 30,2011 3-6 FY11-12 Statement of Estimated General Fund Reserves Attachment A Action Date 33,317 (24,400) Revenues Expenditures .",<,..,.)Ai®:,:i=':"1,:,~:·.'.·.5hW.tm Beginning Reserves 8/2/2011 9/20/2011 ". Unclaimed Deposits Adjustments: .Skate &Dog Park Analysis Year-End Adjustments Continuing Appropriations 9/20/2011 9/20/2011 9,641 629,431 629,431) FY10-11 Final Results N/A 1,586,854 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 eratin 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 6/30/12 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. 3-7 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 activities, 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 30,2011 which collectively comprise the City's basic financial statements and have issued our report thereon dated December 21,2011.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 assigned functions,to prevent,or detect and correct misstatements on a timely basis.A material weakness 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 Michelle Drive,Suite 300,Irvine,CA 92606 •Tel:714.978.1300·Fax:714.978.7893 Offices located in Orange and San Diego Counties 3-8 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 identitY all deficiencies in internal control over financial reporting that might be deficiencies,significant deficiencies or material weaknesses.We did not identitY 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. December 21,2011 Irvine,California -2- 3-9 COMPREHENSIVE ANNUAL FINANCIAL REPORT FISCAL YEAR ENDED JUNE 3 O, 2 O11 Rancho Palos VerdesCity of C A L I F O R N I A 3-10 CITY OF RANCHO PALOS VERDES, CALIFORNIA COMPREHENSIVE ANNUAL FINANCIAL REPORT For the Year Ended June 30, 2011 Prepared By: Finance & Information Technology Department Dennis McLean, Director Kathryn Downs, Deputy Director Cover photo provides an aerial view of Palos Verdes Drive South 3-11 INTRODUCTORY SECTION 3-12 Civic Leadership Academy 3-13 CITY OF RANCHO PALOS VERDES COMPREHENSIVE ANNUAL FINANCIAL REPORT FOR THE YEAR ENDED JUNE 30, 2011 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 23 Statement of Activities 24 Fund Financial Statements Governmental Funds Balance Sheet 28 Reconciliation of the Balance Sheet of Governmental Funds to the Statement of Net Assets 31 Statement of Revenues, Expenditures, and Changes in Fund Balances 32 Reconciliation of the Statement of Revenues, Expenditures, and Changes in Fund Balances to the Statement of Activities 34 General Fund Statement of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual 35 Street Maintenance Special Revenue Fund Statement of Revenues, Expenditures, and Change in Fund Balance - Budget and Actual 37 Redevelopment Agency Housing Set-Aside Special Revenue Fund Statement of Revenues, Expenditures, and Change in Fund Balance - Budget and Actual 38 Proprietary Funds Statement of Net Assets 39 Statement of Revenues, Expenses, and Changes in Fund Net Assets 40 Statement of Cash Flows 41 Notes to the Financial Statements 44 3-14 CITY OF RANCHO PALOS VERDES COMPREHENSIVE ANNUAL FINANCIAL REPORT FOR THE YEAR ENDED JUNE 30, 2011 TABLE OF CONTENTS ii Supplementary Information Major Fund Budgetary Comparison Schedules Schedule of Revenues, Expenditures, and Changes in Fund Balances - Budget and Actual RDA Debt Service Fund 78 Capital Improvements Capital Projects Fund 79 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 Proposition A Fund 99 Proposition C Fund 100 Measure R 101 Beautification Fund 102 Waste Reduction Fund 103 Public Safety Grants Fund 104 1972 Act Fund 105 1911 Act Fund 106 JPIA – Portuguese Bend Fund 107 Habitat Restoration Fund 108 Measure A Fund 109 Abalone Cove Sewer Assessment District 110 Dr. Allen and Charlotte Ginsburg Cultural Arts Building 111 Donor Restricted Contributions 112 Bikeways Fund 113 Environmental Excise Tax Fund 114 Quimby Fund 115 Affordable Housing Fund 116 Schedule of Revenues, Expenditures, and Changes in Fund Balances - Budget and Actual – Capital Projects Funds RDA Abalone Cove Fund 117 RDA Portuguese Bend Fund 118 Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual – Permanent Fund Subregion One Maintenance Fund 119 JPIA – Abalone Cove Fund 120 3-15 CITY OF RANCHO PALOS VERDES COMPREHENSIVE ANNUAL FINANCIAL REPORT FOR THE YEAR ENDED JUNE 30, 2011 TABLE OF CONTENTS iii Internal Service Funds Combining Statement of Net Assets 122 Combining Statement of Revenues, Expenses, and Changes in Fund Net Assets 123 Combining Statement of Cash Flows 124 STATISTICAL SECTION (Unaudited) Financial Trends Net Assets by Component 128 Changes in Net Assets 129 Governmental Activities Tax Revenue By Source 131 Fund Balances of Governmental Funds – Before GASB 54 132 Fund Balances of Governmental Funds – After GASB 54 133 Changes in Fund Balances of Governmental Funds 134 General Governmental Tax Revenues By Source 135 Revenue Capacity Assessed Value and Estimated Actual Value of Taxable Property 136 Property Tax Rates - Direct and Overlapping Governments 137 Principal Property Tax Payers 138 Property Tax Levies and Collections 139 Debt Capacity Ratios of Outstanding Debt by Type 140 Direct and Overlapping Governmental Activities Debt 141 Legal Debt Margin Information 142 Demographic and Economic Information Demographic and Economic Statistics 143 Principal Sales Tax Payers 144 Principal Employers 145 Operating Information Full-time Equivalent City Government Employees by Function 146 Operating Indicators by Function 147 Capital Asset Statistics by Function 148 3-16 Coastal View of Point Vicente Lighthouse 3-17 CITY OF iv RANCHO PALOS VERDES December 21, 2011 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, 2011, is hereby submitted as mandated by both local ordinances and state statutes. These ordinances and statutes require that the City of Rancho Palos Verdes issue annually a report on its financial position and activity, and that an independent firm of certified public accountants audit this report. Responsibility for both the accuracy of the data, and the completeness and fairness of the presentation, including all disclosures, rests with the City. To the best of our knowledge and belief, the enclosed data is accurate in all material respects and is reported in a manner that presents fairly the financial position and results of operations of the various funds and component units of the City of Rancho Palos Verdes. In addition, to the best of our knowledge, there are no untrue statements of material fact within the financial statements or omissions of material fact to cause the financial statements to be misleading. All disclosures necessary to enable the reader to gain an understanding of the City's financial activities have been included. The financial section of the CAFR includes management’s discussion and analysis (MD&A). 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 units, the Rancho Palos Verdes Redevelopment Agency and the Joint Powers Improvement Authority. A component unit is a legally separate entity for which the primary government is financially accountable. The City provides a broad range of services, including police protection, solid waste collection, construction and maintenance of 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 43,000. 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. 3-18 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 completion of a Draft Preserve Trails Plan for the last parcel acquired to complete the habitat preserve, the restoration of habitat in a portion of the burn area, and several trail maintenance projects. ¾ Continued to formally monitor development projects in surrounding jurisdictions (referred to as "border issues") to assess their potential impacts upon the City and its residents. 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 in updating the City’s General Plan by working with a consulting team in the preparation of various studies to support the General Plan Update, and in 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 2012. Staff also anticipates that the City Council will adopt the Updated General Plan in summer 2012. ¾ Continued to implement its Housing Element by working with a developer to develop the "Mirandela" 34 unit affordable housing project. The project is a multi-family rental housing project that has been made available to seniors 62 years and older that qualify under extremely-low, very-low, low and moderate incomes. The project was funded by a combination of sources, which include the City's In-lieu Affordable Housing Fund, the Redevelopment Agency's 20% Affordable Housing Fund, and 9% Tax Credits awarded by the California Tax Credit Allocation Committee. Construction of the project began in November 2009. The project was completed in December 2010 and was fully occupied in January 2011. 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, by being awarded a $500,000 grant by the California Coastal Conservancy to complete the RPV portion of the California Coastal Trail. Public Works ¾ Completed the Project Study Report for the San Ramon Canyon Storm Drain System, which was needed to manage runoff and mitigate erosion within San Ramon Canyon, to provide a basis for estimating anticipated construction costs and to be used to help secure State/Federal funding. ¾ Completed the Palos Verdes Drive South Landslide Road Stability Grading Project that installed approximately 40,000 cubic yards of soil buttressing the roadway. ¾ Completed the Early Action Stabilization Project design which may be needed to stabilize Palos Verdes Drive East in the event that erosion originating within San Ramon Canyon progresses westward affecting the roadway stability. ¾ Completed the Palos Verdes Drive East Implementation Plan which outlines and programs incremental safety improvements along the corridor over time and in coordination with other planned improvements. ¾ Completed the resurfacing of Hawthorne Blvd and Palos Verdes Drive West which was funded by American Recovery Reinvestments Act (ARRA), Proposition 1B, Proposition C and Rubberized Asphalt Concrete (RAC) grant funds. The project included a new driving surface, bus pads, access ramps and roadway striping. 3-19 vi ¾ The City was awarded a $707,000 grant from the Federal Highway Safety Program, which will used to synchronize traffic signals along Hawthorne Boulevard. ¾ Completed the resurfacing of various residential roadways in Zones 6 and 8 of the City. Improvements included slurry seal and asphalt concrete overlay, access ramp improvements and roadway signing and striping. ¾ Completed beautification to medians along Hawthorne Boulevard and Palos Verdes Drive West. Improvements include drought-tolerant plant installation, irrigation controls and rock enhancements. ¾ Established revised fees for the Neighborhood Permit Parking program which memorialized a one-time decal fee of $2.50 for residents participating in the program. ¾ Established a Neighborhood Permit Parking program in the Rolling Hills Riviera area surrounding Dodson Middle School. ¾ Completed the Energy Savings Upgrades for City Facilities, including installation of energy efficient mechanical equipment and electrical fixtures at Hesse Park and double pane windows at City Hall. The project was funded with a federal grant. ¾ Completed the Power Generator System Installation project at Point Vicente Interpretive Center and Hesse Park to provide emergency power to these buildings, which house critical information technology infrastructure and are routinely booked for public or private events. ¾ Completed the Community Development Department Restrooms Americans with Disabilities Act Compliance project to make the restrooms frequently used by the public compliant with the accessibility requirements of the building code. ¾ Completed the City Hall Main Waterline System Replacement project to prevent further breakage of the aged and deteriorating water lines installed in the 1960's. ¾ Completed the Hesse Park and Ryan Park Athletic Field Improvement projects to improve athletic field quality use and create opportunities for multiple concurrent athletic uses, which included making the low area at Ryan Park's left outfield level with the playing field. ¾ Completed the first year of transitioning to a new residential solid waste provider, EDCO. The transition included several key changes, including: • Frequency of collection from twice a week to once a week; • Method of collection from manual collection to automated cart collection; • New collection days; • Variable automated cart sizes; • New alternative fuel vehicles (CNG); and • New volume based billing. Parks and Recreation ¾ Coordinated numerous annual special events and recreational offerings for the community. Annual events included the Whale of a Day Celebration, July 4th Independence Day Celebration, Egg Hunt Eggstravaganza, Shakespeare by the Sea performances, Coastal Cleanup Day, Halloween Spooktacular, and Breakfast with Santa Fundraiser. Recreational offerings included the Junior Ranger and Junior Docent Programs, Paddle Tennis Tournament, Pitch, Hit & Run Competition, Night at the Museum, and Junior Ranger Summer Camp. ¾ Continued to coordinate and provide oversight of the public and private rentals and activities at the various City facilities. These included community and private classes and parties, youth athletic league activities, film shoots, and non-profit events coordinated with many organizations including Peninsula Seniors, Palos Verdes Amateur Radio Club, RPV Council of Homeowners Associations, Palos Verdes Peninsula Native Plant Society, American Cetacean Society, California Coastal National Monument, Bureau of Land 3-20 vii Management, Montrose Settlement, PV Women’s Club, PV Art Center, Angeles Girl Scouts, LA County Life Guards, Norris Foundation and others. ¾ Negotiated a new contract with Trump National Golf Course for private rentals at Founders Park, providing renters at this park site with more services at a lower cost. ¾ Provided direction and opportunities for the volunteers and programs of Los Serenos de Point Vicente. In coordination with the City, Los Serenos continued to expand its public and private hikes, and through completion of a Strategic Plan, developed new programs including a new 4th grade tour coordinated through Palos Verdes Peninsula Unified School District, as well as several videos for the Junior Docent Nature Series that air on RPVTV. This video series offers insight into the history of the Peninsula including its natural resources, while providing Palos Verdes High School youth the opportunity to serve their community. ¾ Contracted with the Mountains Recreation and Conservation Authority (MRCA) Park Rangers to provide ranger services in the Palos Verdes Nature Preserve, and to offer a Junior Ranger Program and Junior Ranger Summer Camp. ¾ Partnered with the City of Los Angeles to offer monthly pet adoption events and the County of Los Angeles to offer biennial Low Cost Pet Vaccination, Microchip, and Licensing Clinics. ¾ Through the City’s Gifts for Parks program, Staff continued to pursue donations for the Fourth of July Celebration and the REACH program for young adults with developmental disabilities. Department staff and Los Serenos volunteers also continued to solicit donations for PVIC museum exhibits and programs, with assistance from the City’s docent organization. ¾ Commenced a project to evaluate sites on the Peninsula for the potential inclusion of a skate park and a dog park. ¾ Conducted community outreach and research to determine appropriate uses, including a potential off-leash dog beach at the City’s newly acquired Rancho Palos Verdes Beach. ¾ Recreation and Parks Staff teamed with Public Works Staff on a project that improved the athletic fields at Ryan Park and Hesse Park to increase the quality and safety of play and to expand recreational opportunities. 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, 2011, the City had received a total of $731,000 in competitive grant awards. ¾ The City Council reviewed the benefits and detriments of becoming a Charter City and agreed to place the issue of adopting a charter on the March 8, 2011, ballot in September 2010. ¾ Conducted an Emergency Preparedness Drill in October 2010 in conjunction with the statewide “Great California Shake Out” and adopted the Standardized Emergency Management System (SEMS)/National Incident Management System (NIMS) Multi-Hazard Functional Emergency Operations Plan in November 2010. ¾ Hosted a Community Leaders’ Breakfast in January 2011 to present information regarding the proposed adoption of a City Charter on the March 8, 2011 ballot. ¾ Held the inaugural session of the Rancho Palos Verdes Leadership Academy in February 2011, followed by seven (7) more monthly sessions lasting until September 2011. 3-21 viii ¾ For the proposed relocation of the staging of the Palos Verdes Marathon to the Terranea Resort on May 14, 2011, the City Council approved a Special Use Permit for the event in February 2011. ¾ Members of the City Council and Staff participated in the grand opening of the Mirandela senior affordable apartment project in March 2011, which had been funded in part by the City’s Redevelopment Agency. ¾ Successfully fulfilled the objectives of the City Council-initiated Performance-Based Employee Compensation Plan by producing service enhancements, new revenue and cost savings totaling more than $550,000 by May 2011. ¾ The City extended its contract with a federal advocacy firm to seek federal funding for the San Ramon Canyon Stabilization Project in June 2011. ¾ Led a regional response to the FAA proposal to change the classification of airspace – with likely threats to safety and the environment. Staff also addressed issues with Torrance Airport helicopter routes and actively participated in the LAX Noise Roundtable to ensure protection of our residents. ¾ Studied and recommended the withdrawal from MAX Transit, which will save more than $100,000 per year of Proposition A funding for more optimal transit programs. ¾ Initiated the re-bidding of Employee Medical Insurance, thereby securing 2-4 year rate guarantees and reducing overall costs by $22,273 for the next two years. 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. Budget to Actual Comparison. The City experienced an overall $2.3 million favorable budget variance in the General fund for the fiscal year ended June 30, 2011. Favorable expenditure variances, including a retroactive adjustment for general liability insurance and various maintenance savings, 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 2010-11. Significant Financial Events. As part of its development agreement, the Trump National Golf Course transferred ownership of Marilyn Ryan Sunset Park and Trump Beach to the City in May 2011. These two parcels total about 26 acres, with an estimated value of more than $1.2 million. This transaction has been included in the Statement of Net Assets and the Statement of Activities in the Financial Section of this report. In addition, the City implemented Government Accounting Standards Board Statement No. 54, which resulted in closing 3 funds that no longer meet the definition of a Special Revenue fund and transferring fund balances totaling about $0.3 million to the General Fund. There were no other changes to financial policies that resulted in a significant impact on the June 30, 2011 financial statements. 3-22 ix 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, 2011, $302,296 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, 2010. This was the 18th 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, Diehl, Evans & Company, LLP and the contributions of other Finance and Information Technology Department staff: Jane Lin, Selena Wright, Gayle Vanoverbeck, Nancy Vitez, 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 3-23 x CITY OF RANCHO PALOS VERDES DIRECTORY OF CITY OFFICIALS JUNE 30, 2011 CITY COUNCIL Thomas D. Long, Mayor Anthony M. Misetich, Mayor Pro-Tem Brian Campbell, Councilman Douglas W. Stern, Councilman Stefan Wolowicz, 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 Interim Director of Public Works............................................................................................................ Ray Holland Interim Director of Recreation and Parks ................................................................................................ Tom Odom City Attorney................................................................................................................Richards, Watson & Gershon 3-24 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 3-25 3 - 2 6 3-27 FINANCIAL SECTION 3-28 Gray Whale Skeleton Installation 3-29 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 City Council 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, as of and for the year ended June 30, 2011, 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’s management. Our responsibility is to express opinions on these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America 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 includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our 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, 2011, 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 Redevelopment Agency Housing Set-Aside Special Revenue major governmental funds for the year then ended in conformity with accounting principles generally accepted in the United States of America. As explained in Note 6, the City has implemented the provisions of Governmental Accounting and Standards Board Statement Number 54, “Fund Balance Reporting and Governmental Fund Type Definitions”, for the year ended June 30, 2011. 3-30 As explained further in Note 9, the California State Legislature has enacted legislation that is intended to provide for the dissolution of redevelopment agencies in the State of California. The effects of this legislation are uncertain pending the result of certain lawsuits that have been initiated to challenge the constitutionality of this legislation. In accordance with Government Auditing Standards, we have also issued our report dated December 21, 2011, on our consideration of the City of Rancho Palos Verdes’s 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, as listed in the table of contents as required supplementary information, 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. December 21, 2011 Irvine, California 3-31 MANAGEMENT’S DISCUSSION & ANALYSIS 3-32 City Hall Tour 3-33 CITY OF RANCHO PALOS VERDES MANAGEMENT’S DISCUSSION AND ANALYSIS JUNE 30, 2011 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, 2011. 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, 2011, by $168,389,428 (Net Assets). Of this amount, $38,741,678 (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 $4,920,576. 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 such as a major capital acquisition using outside funding. The majority of the FY10-11 increase is attributable to two factors: 1) transient occupancy tax of $2.8 million collected from Terranea Resort was added to the Reserve for Future Capital Projects instead of being spent during FY10-11; and 2) the Net Assets included amounts encumbered for capital projects (street and park improvements) that were not spent during FY10-11, but carried forward to FY11-12. ¾ As of June 30, 2011, the City’s Governmental Funds reported combined ending Fund Balances of $26,462,324, an increase of $3.3 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 a comparison, the FY09-10 change in ending fund balance was a small decrease of only about 1%. The FY10- 11 increase is primarily attributable to the $2.8 million of General Fund revenue (noted above) that was added to the Reserve for Future Capital Projects. ¾ As of June 30, 2011, unassigned fund balance for the General Fund was $11,385,761 or 67% of General Fund expenditures. About $9.4 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. 3-34 CITY OF RANCHO PALOS VERDES MANAGEMENT’S DISCUSSION AND ANALYSIS JUNE 30, 2011 See independent auditors’ report. ¾ The City’s total debt decreased by $1,105,125 (6.9%) during the current fiscal year. This includes both short-term payables and long-term liabilities. The decrease was primarily attributable to a $422,701 principal payment of the Redevelopment Agency’s debt to the County and payment of a $310,000 retention payable held at June 30, 2010 for completion of the Mirandela senior housing project. 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 Protection program for renewal and maintenance of the City’s storm drain facilities. 3-35 CITY OF RANCHO PALOS VERDES MANAGEMENT’S DISCUSSION AND ANALYSIS JUNE 30, 2011 See independent auditors’ report. The Government-Wide Financial Statements include not only the City of Rancho Palos Verdes itself (known as the Primary Government), but also a legally separate Redevelopment Agency and a legally separate Improvement Authority for which the City of Rancho Palos Verdes is financially accountable. Financial information for these Component Units has been included as an integral part of the primary government. The Government-Wide Financial Statements can be found on pages 23-25 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 33 individual Governmental Funds during the Fiscal Year ended June 30, 2011. 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 RDA Housing Set-Aside Fund, the Capital Improvements Fund and the RDA Debt-Service Fund, all of which are considered to be major funds. Data from the other 28 Governmental Funds are combined into a single, aggregated presentation. Individual fund data for each of 3-36 CITY OF RANCHO PALOS VERDES MANAGEMENT’S DISCUSSION AND ANALYSIS JUNE 30, 2011 See independent auditors’ report. 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 28- 38 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 39-41 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. 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 44-75 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 78-124 of this report. 3-37 CITY OF RANCHO PALOS VERDES MANAGEMENT’S DISCUSSION AND ANALYSIS JUNE 30, 2011 See independent auditors’ 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 $168,389,428 at June 30, 2011. By far, the largest portion of the City’s Net Assets (76%) 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 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 ($35,376,062 or about 23%) 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 $4,085,215. June 30, 2011 June 30, 2010 June 30, 2011 June 30, 2010 June 30, 2011 June 30, 2010 Current and other assets 51,956,043$ 48,704,202$ 3,497,659$ 2,942,185$ 55,453,702$ 51,646,387$ Capital assets 115,145,081 115,331,309 12,752,669 12,458,305 127,897,750 127,789,614 Total assets 167,101,124 164,035,511 16,250,328 15,400,490 183,351,452 179,436,001 Long-term liabilities outstanding 6,296,201 6,680,786 - - 6,296,201 6,680,786 Other liabilities 8,533,780 9,168,799 132,043 117,564 8,665,823 9,286,363 Total liabilities 14,829,981 15,849,585 132,043 117,564 14,962,024 15,967,149 Invested in capital assets 115,145,081 115,331,309 12,752,669 12,458,305 127,897,751 127,789,614 Restricted 1,750,000 1,000,000 - - 1,750,000 1,000,000 Unrestricted 35,376,062 31,854,617 3,365,616 2,824,621 38,741,677 34,679,238 Total net assets 152,271,143$ 148,185,926$ 16,118,285$ 15,282,926$ 168,389,428$ 163,468,852$ Total Governmental Activities Business-type Activities 3-38 CITY OF RANCHO PALOS VERDES MANAGEMENT’S DISCUSSION AND ANALYSIS JUNE 30, 2011 See independent auditors’ report. City of Rancho Palos Verdes Changes in Net Assets A key element of this increase included $2.8 million of revenue from the operating budget that was not spent for FY10-11 programs, but set aside for future capital projects. The remainder of the increase was primarily attributable to amounts encumbered for capital projects (street improvements and park improvements) that were not spent during FY10-11, but were carried forward to FY11-12. Revenues by Source – Governmental Activities June 30, 2011 June 30, 2010 June 30, 2011 June 30, 2010 June 30, 2011 June 30, 2010 Program revenues: Charges for services 3,707,267$ 4,925,684$ -$ -$ 3,707,267$ 4,925,684$ Operating contributions and grants 3,688,739 6,633,280 - - 3,688,739 6,633,280 Capital contributions and grants 5,675 7,178,874 - - 5,675 7,178,874 General revenues:- Property taxes 11,854,171 11,431,192 - - 11,854,171 11,431,192 Other taxes 9,234,107 8,019,118 - - 9,234,107 8,019,118 Other 588,959 513,698 1,324,883 1,277,747 1,913,842 1,791,445 Total revenues 29,078,918 38,701,846 1,324,883 1,277,747 30,403,801 39,979,593 Expenses: Administration 5,996,735 7,823,738 - - 5,996,734 7,823,738 Public safety 4,334,961 4,242,085 - - 4,334,961 4,242,085 Public works 10,389,064 13,633,475 - - 10,389,064 13,633,475 Parks and recreation 1,390,604 1,826,200 - - 1,390,604 1,826,200 Community development 2,622,293 2,549,490 - - 2,622,293 2,549,490 Non-departmental - 320,000 - 320,000 Interest on long-term debt 260,045 264,717 - - 260,045 264,717 Water Quality Flood Protection - - 489,524 579,849 489,524 579,849 Total expenses 24,993,703 30,659,705 489,524 579,849 25,483,225 31,239,554 Increase in net assets before transfers 4,085,215 8,042,141 835,359 697,898 4,920,576 8,740,039 Transfers - - - - - - Increase in net assets 4,085,215 8,042,141 835,359 697,898 4,920,576 8,740,039 Net assets - beginning of fiscal year 148,185,926 140,143,785 15,282,926 14,585,028 163,468,852 154,728,813 Net assets - end of fiscal year 152,271,141$ 148,185,926$ 16,118,285$ 15,282,926$ 168,389,428$ 163,468,852$ Total Governmental Activities Business-type Activities other 2%other taxes 32% capital contributions and grants 0% operating contributions and grants 13% charges for services 13% property taxes 40% 3-39 CITY OF RANCHO PALOS VERDES MANAGEMENT’S DISCUSSION AND ANALYSIS JUNE 30, 2011 See independent auditors’ report. Business-Type Activities. Business-type activities increased the City’s net assets by $835,359 primarily due to collection of storm drain user fees that will be utilized during FY11-12 for projects continued from FY10-11. 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 $26,462,324, an increase of $3.3 million in comparison with the prior year. Approximately 56% of the combined ending Fund Balances (about $14.8 million) constitutes spendable fund balance. The combined spendable fund balance includes the RDA Debt Service negative unassigned fund deficit of $17,950,999. The remainder of the combined ending Fund Balances is either nonspendable due to outside legal restrictions ($1.75 million), or nonspendable in form (primarily for long-term principal advances to other funds of $8.4 million, and prepaid items of $1.4 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 $11,385,761, while total Fund Balance reached $18,900,262. 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 49% of total General Fund uses, while total Fund Balance represents 81% of that same amount. During Fiscal Year 10-11, the fund balance of the City’s General Fund decreased by $472,779. Although there were favorable budget variances totaling $2.2 million, there were also budgeted one-time uses of the General Fund balance for improvements to Lower Hesse and Grandview Parks ($2 million) and the ball fields at Ryan and Hesse Parks ($0.5 million). The most notable General Fund favorable variances included: a retrospective general liability insurance adjustment in the City Manager’s program; park and building maintenance program savings due to conservative budget practices; and transfers of cash to the General Fund from closing the Utility Undergrounding and Roadway Beautification Funds. The funds no longer meet the definition of a special revenue fund per Government Accounting Standards Board Statement No. 54. The remaining expenditure savings was comprised of insignificant amounts (0.5% or less) spread among a large number of the General Fund’s 30 budget programs. The Street Maintenance Fund Balance increased by $139,127, primarily due to permanent expenditure savings. However, the Street Maintenance fund balance continues to hold about $53,000 that will likely be transferred to the Capital Improvement Projects fund during FY11-12 for the City’s contribution to the 3-40 CITY OF RANCHO PALOS VERDES MANAGEMENT’S DISCUSSION AND ANALYSIS JUNE 30, 2011 See independent auditors’ report. Hawthorne Boulevard pedestrian improvements project primarily funded with a grant. The Redevelopment Agency’s Housing Set-Aside Fund Balance increased by $402,707. The majority of the increase was directly related to the sale of a condominium in March 2011 that was previously held for affordable housing purposes. The Debt Service Fund has a net negative fund balance of $17,950,999. The Redevelopment Agency’s debt to the City is recorded in the Debt Service Fund. However, because there are currently no assets to extinguish that debt, the fund carries a negative fund balance. The net decrease in the Debt Service Fund Balance during the current year was $694,785, which primarily represents interest accrued during FY10-11 on the advance from the City to the Redevelopment Agency. The Capital Improvement Projects (CIP) Fund had an ending fund balance of $11,649,780. Of this amount, $3.9 million is held for street improvement projects continued from FY10-11 to FY11-12, $2.4 million is held for park improvement projects continued from FY10-11 to FY11-12, and the remaining $5.3 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 $3,365,616. Unrestricted Net Assets of the Internal Service Funds at the end of the year amounted to $4,042,702. The total growth in Proprietary Fund type net assets was $363,986 or 5% of unrestricted Net Assets. General Fund Budgetary Highlights The difference between original budgeted expenditures and the final amended budget was an increase of $881,149; and is briefly summarized as follows: ¾ A decrease of $629,431 was attributable to appropriations continued to FY11-12. ¾ An increase of $1,462,450 was attributable to appropriations continued from FY09-10. ¾ Other immaterial adjustments resulted in net increases of approximately $48,000. 3-41 CITY OF RANCHO PALOS VERDES MANAGEMENT’S DISCUSSION AND ANALYSIS JUNE 30, 2011 See independent auditors’ report. Capital Asset and Debt Administration Capital Assets. The City’s investment in Capital Assets for its governmental activities as of June 30, 2011, amounts to $115,145,081 (net of accumulated depreciation). This investment in capital assets includes land, buildings, park improvements, roadways, sewer, storm drains, vehicles, computer equipment, furniture, other equipment, and construction in progress. During the current fiscal year, the City’s investment in governmental capital assets decreased by about $186,000 or about 0.16%. 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 A residential street repaving project was completed with a total cost of about $1.5 million. ¾ Parkland adjacent to Trump National Golf Course was dedicated to the City with an estimated value of about $1.2 million. The Capital Assets (net of accumulated depreciation) for Business-type activities as of June 30, 2011 was $12,752,669. City of Rancho Palos Verdes Capital Assets (net of depreciation) Additional information on the City’s Capital Assets can be found in Note # 4 on pages 56-58 of this report. June 30, 2011 June 30, 2010 June 30, 2011 June 30, 2010 June 30, 2011 June 30, 2010 Capital assets not being depreciated Land 40,048,288$ 38,808,553$ 1,408,493$ 1,408,493$ 41,456,781$ 40,217,046$ Construction in progress 628,308 66,290 678,980 149,081 1,307,288 215,371 Total capital assets not being depreciated 40,676,596 38,874,843 2,087,473 1,557,574 42,764,069 40,432,417 Capital assets being depreciated, net Buildings 7,156,296 7,756,992 - - 7,156,296 7,756,992 Vehicles 94,656 92,942 - - 94,656 92,942 Computer equipment 35,181 62,538 - - 35,182 62,538 Furniture, fixtures and equipment 123,861 107,867 1,181 3,543 125,042 111,410 Infrastructure Roadway system 46,304,199 47,063,335 - - 46,304,199 47,063,335 Sewer system 8,447,475 8,902,584 - - 8,447,475 8,902,584 Storm drain system 10,180,941 10,431,420 10,664,015 10,897,188 20,844,956 21,328,608 Park system 2,125,876 2,038,788 - - 2,125,876 2,038,788 Total capital assets being depreciated, net 74,468,485 76,456,466 10,665,196 10,900,731 85,133,682 87,357,197 Capital Assets, net 115,145,081$ 115,331,309$ 12,752,669$ 12,458,305$ 127,897,751$ 127,789,614$ Total Governmental Activities Business-type Activities 3-42 CITY OF RANCHO PALOS VERDES MANAGEMENT’S DISCUSSION AND ANALYSIS JUNE 30, 2011 See independent auditors’ report. Long-term debt. At the end of the current Fiscal Year, the City of Rancho Palos Verdes had total debt outstanding of $6,296,201. Of this amount, $5,963,601 is a liability of the Redevelopment Agency. City of Rancho Palos Verdes Outstanding Debt June 30, 2011 June 30, 2010 RDA Tax Increment Bond 5,165,000$ 5,250,000$ RDA Deferred Interest Payable 798,601 1,136,303 Employee compensated absences 332,600 294,483 Total 6,296,201$ 6,680,786$ Activities Governmental The City’s total debt decreased by $384,585 (5.8%) during the current Fiscal Year, primarily due to partial payment of the RDA deferred interest payable. State statutes limit the amount of general obligation debt a governmental entity may issue to 15 percent of its total assessed valuation. The current debt limitation for the City of Rancho Palos Verdes is $1,382,850,000. Additional information on the City’s long-term debt can be found in Note # 5 on pages 58-61 of this report. Economic Factors and Next Year’s Budgets and Rates ¾ Local property values remain strong; therefore, Property Tax Revenue (approximately 43 percent of City-Wide Revenues) remains largely unaffected by the downturn in the economy. Looking forward to FY11-12, Los Angeles County saw an overall increase in property assessments of about 1.3%, while the City of Rancho Palos Verdes experienced an overall increase in property assessments of 2.7%. ¾ At the time of this report, there is no significant impact to the City’s FY11- 12 revenue as a result of the State’s ongoing budget crisis. Staff continues to monitor state impacts closely, and will report to City Council if the state takes any actions that necessitate City adjustment. ¾ The Consumer Price Index for Los Angeles County increased by 2.9% for the 12 months ended June 2011; however, the City’s FY11-12 expenditure budget was limited to an increase of about $96,000 (or 0.5%) when compared to FY10-11. Revenue in excess of budgeted expenditures (about $3.7 million) has been programmed for maintenance and improvement of infrastructure (primarily street improvement projects). 3-43 CITY OF RANCHO PALOS VERDES MANAGEMENT’S DISCUSSION AND ANALYSIS JUNE 30, 2011 See independent auditors’ report. Requests for Information This Financial Report is designed to provide a general overview of the financial position of the City of Rancho Palos Verdes for all those with an interest in the government’s finances. Questions concerning any of the information provided in this report, or requests for additional financial information, should be addressed to the Finance and Information Technology Department at 30940 Hawthorne Boulevard, Rancho Palos Verdes, CA 90275 or finance@rpv.com. 3-44 Palos Verdes Marathon 3-45 BASIC FINANCIAL STATEMENTS 3-46 Fourth of July Puppet Show 3-47 GOVERNMENT-WIDE STATEMENTS 3-48 Rancho Palos Verdes Coastline 3-49 CITY OF RANCHO PALOS VERDES STATEMENT OF NET ASSETS June 30, 2011 Governmental Business-type Activities Activity Total ASSETS: Cash and investments 40,633,615$ 3,432,022$ 44,065,637$ Receivables: Taxes 1,180,020 - 1,180,020 Interest 38,059 3,378 41,437 Notes 7,599,483 - 7,599,483 Other 789,947 62,259 852,206 Inventory 41,168 - 41,168 Prepaid costs 1,673,750 - 1,673,750 Capital assets, not being depreciated: Land 40,048,288 1,408,493 41,456,781 Construction in progress 628,308 678,980 1,307,288 Capital assets, being depreciated, net: Property and equipment 253,699 1,181 254,880 Buildings and improvements 7,156,296 - 7,156,296 Infrastructure 67,058,491 10,664,015 77,722,506 TOTAL ASSETS 167,101,124 16,250,328 183,351,452 LIABILITIES: Accounts payable and accrued liabilities 3,385,699 131,233 3,516,932 Interest payable 20,086 - 20,086 Retentions payable 194,335 810 195,145 Unearned revenue 4,047,642 - 4,047,642 Deposits payable 886,017 - 886,017 Long-term liabilities: Due within one year 341,878 - 341,878 Due beyond one year 5,954,324 - 5,954,324 TOTAL LIABILITIES 14,829,981 132,043 14,962,024 NET ASSETS: Invested in capital assets, net of related debt 115,145,082 12,752,669 127,897,751 Restricted for: Community development: Nonexpendable 1,750,000 - 1,750,000 Unrestricted 35,376,061 3,365,616 38,741,677 TOTAL NET ASSETS 152,271,143$ 16,118,285$ 168,389,428$ See independent auditors' report and notes to financial statements. 3-50 CITY OF RANCHO PALOS VERDES STATEMENT OF ACTIVITIES For the year ended June 30, 2011 Operating Capital Charges for Grants and Grants and Expenses Services Contributions Contributions Governmental Activities: Administration 5,996,734$ 654,051$ 84,220$ -$ Public safety 4,334,961 260,543 110,202 - Public works 10,389,064 621,607 3,325,193 5,675 Parks and recreation 1,390,604 456,940 28,597 - Community development 2,622,293 1,714,126 140,527 - Non-departmental - - - - Interest on long-term debt 260,045 - - - Total governmental activities 24,993,701 3,707,267 3,688,739 5,675 Business-type Activity: Water Protection Flood Control 489,524 - - - Total Primary Government 25,483,225$ 3,707,267$ 3,688,739$ 5,675$ General revenues: Taxes: Property tax, levied for general purpose Property tax, Redevelopment Agency tax increment Storm Drain user fees levied for water quality and flood protection Transient occupancy tax Sales tax Franchise tax Motor vehicle in lieu tax (unrestricted) Utility user tax Other taxes Investment income Unrestricted grants, contributions and other revenues Total general revenues and transfers Change in net assets Net assets - beginning of year Net assets - end of year See independent auditors' report and notes to financial statements. Program Revenues Functions/programs 3-51 Net (Expense) Revenue and Changes in Net Assets Governmental Business-type Activities Activity Total (5,258,463)$ -$ (5,258,463)$ (3,964,216) - (3,964,216) (6,436,589) - (6,436,589) (905,067) - (905,067) (767,640) - (767,640) - - - (260,045) - (260,045) (17,592,020) - (17,592,020) - (489,524) (489,524) (17,592,020) (489,524) (18,081,544) 10,732,334 - 10,732,334 1,121,837 - 1,121,837 - 1,312,230 1,312,230 2,640,369 - 2,640,369 1,548,007 - 1,548,007 1,824,892 - 1,824,892 220,790 - 220,790 2,406,831 - 2,406,831 593,218 - 593,218 317,693 12,653 330,346 271,266 - 271,266 21,677,237 1,324,883 23,002,120 4,085,217 835,359 4,920,576 148,185,926 15,282,926 163,468,852 152,271,143$ 16,118,285$ 168,389,428$ 3-52 Halloween Pumpkin Race 3-53 FUND FINANCIAL STATEMENTS 3-54 CITY OF RANCHO PALOS VERDES BALANCE SHEET - GOVERNMENTAL FUNDS June 30, 2011 Special Revenue Street General Maintenance Cash and investments 13,010,103$ 1,057,031$ Receivables: Taxes 1,000,398 129,668 Interest 15,168 198 Notes - - Other 479,207 2,981 Due from other funds 138,658 - Inventory 41,168 - Prepaid items 820,474 - Advances to other funds 18,568,186 - TOTAL ASSETS 34,073,362$ 1,189,878$ LIABILITIES: Accounts payable and accrued liabilities 2,067,207$ 273,140$ Due to other funds - - Retentions payable 6,064 1,593 Deferred revenue 12,213,812 - Advances from other funds - - Deposits payable 886,017 - TOTAL LIABILITIES 15,173,100 274,733 FUND BALANCES (DEFICIT): Non-Spendable Endowment principal - - Reimbursement settlement agreemen - - Prepaid items 820,474 - Advances to other funds 6,652,859 - Long term receivables - - Habitat restoration - - Inventory 41,168 - Restricted - 915,145 Committed - - Assigned - - Unassigned 11,385,761 - TOTAL FUND BALANCES (DEFICIT)18,900,262 915,145 TOTAL LIABILITIES AND FUND BALANCES 34,073,362$ 1,189,878$ See independent auditors' report and notes to financial statements ASSETS LIABILITIES AND FUND BALANCES 3-55 Special Debt Capital Revenue Service Projects Other Total RDA Housing Redevelopment Capital Governmental Governmental Set-Aside Agency Improvements Funds Funds 589,736$ 44,646$ 12,390,613$ 9,494,691$ 36,586,820$ 14,659 - - 35,295 1,180,020 2 - 9,552 8,626 33,546 6,640,825 - - 703,704 7,344,529 - - 3,281 304,478 789,947 - - - - 138,658 - - - - 41,168 - 573,216 - 17,976 1,411,666 - - - 1,823,420 20,391,606 7,245,222$ 617,862$ 12,403,446$ 12,388,190$ 67,917,960$ 611$ 675$ 565,963$ 207,416 3,115,012$ - - - 138,658 138,658 - - 186,678 - 194,335 3,593,773 - 1,025 921,398 16,730,008 1,823,420 18,568,186 - - 20,391,606 - - - - 886,017 5,417,804 18,568,861 753,666 1,267,472 41,455,636 - - - 750,000 750,000 - - - 1,000,000 1,000,000 - 573,216 - 17,976 1,411,666 - - - 1,766,367 8,419,226 2,990,000 - - - 2,990,000 - - - 43,741 43,741 - - - - 41,168 - - - 7,669,030 8,584,175 - - - - - - - 11,649,780 - 11,649,780 (1,162,582) (18,524,215) - (126,396) (8,427,432) 1,827,418 (17,950,999) 11,649,780 11,120,718 26,462,324 7,245,222$ 617,862$ 12,403,446$ 12,388,190$ 67,917,960$ 3-56 Volunteer Docent Appreciation Lunch 3-57 CITY OF RANCHO PALOS VERDES RECONCILIATION OF THE GOVERNMENTAL FUNDS BALANCE SHEET TO THE STATEMENT OF NET ASSETS June 30, 2011 Fund balances - total governmental funds 26,462,324$ 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.114,891,385 Interest accrued on the advance receivable in the General Fund is not available as current resouce 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.11,915,327 Intergovernmental revenues earned, but not available, are deferred in the fund financial statements. The revenue is not deferred on the Statement of Activities.191,969 Interest expenditures are recognized when due, and therefore, interest payable is not recorded in the governmental funds.(20,086) Long-term notes receivable are not current available resources and, therefore, do not affect the governmental fund balance.830,024 Long-term liabilities are not due and payable in the current period and, therefore, are not reported in the governmental funds.(6,296,201) 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.4,296,401 Net assets of governmental activities 152,271,143$ See independent auditors' report and notes to financial statements. 3-58 CITY OF RANCHO PALOS VERDES STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES - GOVERNMENTAL FUNDS For the year ended June 30, 2011 Special Revenue Street General Maintenance REVENUES: Taxes 19,487,539$ -$ Licenses and permits 1,932,844 - Fines and forfeitures 209,778 - Use of money and property 840,535 19,456 Charges for services 73,119 - Revenue from other agencies 226,803 1,141,891 Other revenues 151,200 - TOTAL REVENUES 22,921,818 1,161,347 EXPENDITURES: Current: Administration 5,220,551 - Public safety 4,309,456 - Public works 3,705,579 1,954,934 Parks and recreation 1,237,396 - Community development 2,608,288 - Non-departmental - - Capital outlay - - Debt service: Principal - - Interest and fiscal charges - - TOTAL EXPENDITURES 17,081,270 1,954,934 EXCESS (DEFICIENCY) OF REVENUES OVER (UNDER) EXPENDITURES 5,840,548 (793,587) OTHER FINANCING SOURCES (USES): Sale of capital assets - - Transfers in 651,020 937,133 Transfers out (6,964,348) (4,419) TOTAL OTHER FINANCING SOURCES (USES)(6,313,328) 932,714 NET CHANGE IN FUND BALANCES (472,779) 139,127 FUND BALANCES (DEFICIT) - BEGINNING OF YEAR 19,373,042 776,018 FUND BALANCES (DEFICIT) - END OF YEAR 18,900,263$ 915,145$ See independent auditors' report and notes to financial statements. 3-59 Special Debt Capital Revenue Service Projects Other Total RDA Housing Redevelopment Capital Governmental Governmental Set-Aside Agency Improvements Funds Funds 224,367$ 897,470$ -$ 809,535$ 21,418,911$ - - - - 1,932,844 - - - - 209,778 1,151 - 32,483 666,449 1,560,074 - - - - 73,119 - - 5,675 1,787,703 3,162,072 - - - 78,569 229,769 225,518 897,470 38,158 3,342,256 28,586,567 - 282,150 - - 5,502,701 - - - 25,505 4,334,961 - - - 2,215,012 7,875,525 - - - 20,000 1,257,396 172,811 - - 2,889 2,783,988 - - - - - - - 2,385,306 171,483 2,556,789 - 422,701 - - 422,701 - 887,404 - - 887,404 172,811 1,592,255 2,385,306 2,434,889 25,621,465 52,707 (694,785) (2,347,148) 907,367 2,965,102 350,000 - - - 350,000 - - 6,915,331 350,570 8,854,054 - - - (1,885,288) (8,854,055) 350,000 - 6,915,331 (1,534,718) 349,999 402,707 (694,785) 4,568,183 (627,351) 3,315,101 1,424,711 (17,256,214) 7,081,597 11,748,068 23,147,222 1,827,418$ (17,950,999)$ 11,649,780$ 11,120,717$ 26,462,323$ 3-60 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, 2011 Net change in fund balances - total governmental funds 3,315,101$ 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, o 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 3,214,840 Depreciation expense (3,391,417) Unpaid accrued interest income is deferred in the governmental funds since it is not available. This income is accrued in the Statement of Activities.627,028 Intergovernmental revenues earned, but not available are deferred in the fund financial statements 29,716 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 331 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 resource and are included in the revenues of governmental funds. These changes in notes receivable are no reflected in the revenues or expenses of the Statement of Activities. This amount represents the ne change in the long-term notes receivable.91,691 Compensated absences expenses reported in the Statement of Activities do not require the use of curren financial resources and therefore are not reported as expenditures in governmental funds (38,117) 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 85,000 Redevelopment Agency deferred interest payable 337,701 Internal service funds are used by management to charge the costs of certain activities, including equipmen 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 (186,658) Change in net assets of governmental activities 4,085,216$ See independent auditors' report and notes to financial statements 3-61 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, 2011 Variance with Final Budget Positive Original Final Actual (Negative) REVENUES: Taxes 18,481,517$ 19,609,517$ 19,487,539$ (121,978)$ Licenses and permits 2,014,500 2,014,500 1,932,844 (81,656) Fines and forfeitures 217,000 154,000 209,778 55,778 Use of money and property 611,320 611,320 840,535 229,215 Charges for services 59,100 59,100 73,119 14,019 Revenue from other agencies 215,000 155,000 226,803 71,803 Other revenues 152,200 152,200 151,200 (1,000) TOTAL REVENUES 21,750,637 22,755,637 22,921,818 166,181 EXPENDITURES: Administration City council 95,935 106,135 100,548 5,587 City manager 1,530,867 1,688,767 1,446,586 242,181 City attorney 1,065,000 1,036,685 948,605 88,080 Community outreach 169,832 180,832 180,358 474 City clerk 279,549 470,549 468,323 2,226 Personnel 207,469 275,784 270,852 4,932 Finance 1,283,570 1,310,882 1,245,015 65,867 Information technology - Data 628,067 508,747 488,257 20,490 Information technology - Voice 92,970 92,970 72,007 20,963 Total Administration 5,353,259 5,671,351 5,220,551 450,800 Public safety Sheriff 3,994,087 3,994,087 3,989,703 4,384 Special programs 212,545 222,545 139,867 82,678 Animal control 125,250 130,250 64,753 65,497 Emergency preparedness 99,645 134,595 115,133 19,462 Total Public Safety 4,431,527 4,481,477 4,309,456 172,021 Public Works Public works administration 1,896,910 1,890,152 1,865,667 24,485 Traffic management 277,400 238,400 167,316 71,084 Storm water quality 149,600 174,600 115,661 58,939 Building maintenance 599,000 630,000 453,168 176,832 Park/Trail/Open Space maintenance 1,316,249 1,640,229 1,066,587 573,642 Sewer maintenance 61,300 64,925 37,180 27,745 Total Public Works 4,300,459 4,638,306 3,705,579 932,727 Budgeted Amounts 3-62 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, 2011 Variance with Final Budget Positive Original Final Actual (Negative) Parks and Recreation Recreation administration 371,220 403,220 400,375 2,845 Recreation facilities 441,538 461,538 449,066 12,472 Special events 40,980 40,980 27,776 13,204 PVIC 328,291 328,291 322,890 5,401 REACH 73,790 53,790 37,289 16,501 Total Parks and Recreation 1,255,819 1,287,819 1,237,396 50,423 Community Development Planning services 1,275,844 1,412,127 1,409,575 2,552 Building & safety 591,509 596,509 569,318 27,191 Code enforcement 191,594 191,594 178,005 13,589 View restoration/preservation 319,276 331,276 329,553 1,723 NCCP - 1,477 1,477 - Geology 200,000 200,000 120,360 79,640 Total Community Development 2,578,223 2,732,983 2,608,288 124,695 Non-Departmental - - - - TOTAL EXPENDITURES 17,919,287 18,811,936 17,081,270 1,730,666 EXCESS (DEFICIENCY) OF REVENUES OVER (UNDER) EXPENDITURES 3,831,350 3,943,701 5,840,548 1,896,847 OTHER FINANCING SOURCES (USES): Transfers in 289,848 272,641 651,020 378,379 Transfers out (4,208,947) (7,029,099) (6,964,348) 64,751 TOTAL OTHER FINANCING SOURCES (USES)(3,919,099) (6,756,458) (6,313,328) 443,130 NET CHANGE IN FUND BALANCE (87,749) (2,812,757) (472,780) 2,339,977 FUND BALANCE - BEGINNING OF YEAR 19,373,042 19,373,042 19,373,042 - FUND BALANCE - END OF YEAR 19,285,293$ 16,560,285$ 18,900,262$ 2,339,977$ See independent auditors' report and notes to financial statements Budgeted Amounts 3-63 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, 2011 Variance with Final Budget Positive Original Final Actual (Negative) REVENUES: Use of money and property 7,420$ 7,420$ 19,456$ 12,036$ Charges for services 14,000 14,000 - (14,000) Revenue from other agencies 1,117,550 1,117,550 1,141,891 24,341 TOTAL REVENUES 1,138,970 1,138,970 1,161,347 22,377 EXPENDITURES: Public Works Street landscape maintenance 1,554,274 1,458,614 1,370,724 87,890 Traffic signal maintenance 104,100 104,100 65,596 38,504 Portuguese Bend road maintenance 500,300 520,300 518,614 1,686 TOTAL EXPENDITURES 2,158,674 2,083,014 1,954,934 128,079 EXCESS (DEFICIENCY) OF REVENUES OVER (UNDER) EXPENDITURES (1,019,704) (944,044) (793,587) 150,456 OTHER FINANCING SOURCES: Transfers in 973,600 973,600 937,133 (36,467) Transfers out - (57,080) (4,419) 52,661 TOTAL OTHER FINANCING SOURCES (USES)973,600 916,520 932,714 16,194 NET CHANGE IN FUND BALANCE (46,104) (27,524) 139,127 166,650 FUND BALANCE - BEGINNING OF YEAR 776,018 776,018 776,018 - FUND BALANCE - END OF YEAR 729,914$ 748,494$ 915,145$ 166,650$ See independent auditors' report and notes to financial statements. Budgeted Amounts 3-64 CITY OF RANCHO PALOS VERDES STATEMENT 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, 2011 Variance with Final Budget Positive Original Final Actual (Negative) REVENUES: Taxes 222,300$ 222,300$ 224,367$ 2,067$ Use of money and property 3,600 3,600 1,151 (2,449) TOTAL REVENUES 225,900 225,900 225,518 (381) EXPENDITURES: Community Development Redevelopment 12,500 12,500 172,811 (160,311) Capital outlay 266,457 714,896 - 714,896 TOTAL EXPENDITURES 278,957 727,396 172,811 554,585 EXCESS (DEFICIENCY) OF REVENUES OVER (UNDER) EXPENDITURES (53,057) (501,496) 52,707 554,204 OTHER FINANCING SOURCES: Sale of capital assets - - 350,000 350,000 NET CHANGE IN FUND BALANCE (53,057) (501,496) 402,707 904,204 FUND BALANCE - BEGINNING OF YEAR 1,424,711 1,424,711 1,424,711 - FUND BALANCE - END OF YEAR 1,371,654$ 923,215$ 1,827,418$ 904,204$ See independent auditors' report and notes to financial statements. Budgeted Amounts 3-65 CITY OF RANCHO PALOS VERDES STATEMENT OF NET ASSETS PROPRIETARY FUNDS June 30, 2011 Business-type Governmental Activity-Activities- Water Quality Internal Flood Protection Service Enterprise Fund Funds CURRENT ASSETS: Cash and investments 3,432,022$ 4,046,795$ Receivables: Interest 3,378 4,511 Other 62,259 - Prepaid items - 262,084 TOTAL CURRENT ASSETS 3,497,659 4,313,390 NONCURRENT ASSETS: Capital assets, not being depreciated: Land 1,408,493 - Construction in progress 678,980 - Capital assets, being depreciated: Property and equipment 11,813 1,468,875 Infrastructure 11,338,573 - Accumulated depreciation (685,190) (1,215,176) TOTAL NONCURRENT ASSETS 12,752,669 253,699 TOTAL ASSETS 16,250,328 4,567,089 CURRENT LIABILITIES: Accounts payable and accrued liabilities 131,233 270,688 Retentions payable 810 - TOTAL CURRENT LIABILITIES 132,043 270,688 Invested in capital assets 12,752,669 253,699 Unrestricted 3,365,616 4,042,702 TOTAL NET ASSETS 16,118,285$ 4,296,401$ See independent auditors' report and notes to financial statements. ASSETS LIABILITIES NET ASSETS 3-66 CITY OF RANCHO PALOS VERDES STATEMENT OF REVENUES, EXPENSES AND CHANGES IN NET ASSETS - PROPRIETARY FUNDS For the year ended June 30, 2011 Business-type Governmental Activity-Activities- Water Quality Internal Flood Protection Service Enterprise Fund Funds OPERATING REVENUES: Charges for services - 1,854,448$ OPERATING EXPENSES: Personnel services 139,557 1,704,755 Materials and supplies 72,964 128,908 Maintenance 41,468 268,191 Depreciation 235,535 121,887 TOTAL OPERATING EXPENSES 489,524 2,223,741 OPERATING LOSS (489,524) (369,293) NONOPERATING REVENUES: Other revenues - 166,194 Interest income 12,653 16,441 Storm drain user fees 1,312,230 - TOTAL NONOPERATING REVENUES 1,324,883 182,635 CHANGE IN NET ASSETS 835,359 (186,658) TOTAL NET ASSETS - BEGINNING OF YEAR 15,282,926 4,483,059 TOTAL NET ASSETS - END OF YEAR 16,118,285$ 4,296,401$ See independent auditors' report and notes to financial statements. 3-67 CITY OF RANCHO PALOS VERDES STATEMENT OF CASH FLOWS PROPRIETARY FUNDS For the year ended June 30, 2011 Business-type Governmental Activity-Activities- Water Quality Internal Flood Protection Service Enterprise Fund Funds CASH FLOWS FROM OPERATING ACTIVITIES: Receipts from interfund services provided -$ 1,854,448$ Payments to suppliers (114,432) (485,508) Payments to employees (139,557) (1,656,215) NET CASH USED BY OPERATING ACTIVITIES (253,989) (287,275) CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES: Acquisition and construction of capital assets (515,419) (112,239) CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES: Receipts from storm drain user fees 1,280,284 - Grant received - 156,094 NET CASH PROVIDED FROM NON-CAPITAL FINANCING ACTIVITIES 1,280,284 156,094 CASH FLOWS FROM INVESTING ACTIVITIES: Interest received on investments 12,480 26,637 NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 523,356 (216,784) CASH AND CASH EQUIVALENTS - BEGINNING OF YEAR 2,908,666 4,263,578 CASH AND CASH EQUIVALENTS - END OF YEAR 3,432,022$ 4,046,794$ RECONCILIATION OF OPERATING LOSS TO NET CASH USED BY OPERATING ACTIVITIES: Operating loss (489,524)$ (369,293)$ Adjustments to reconcile operating loss to net cash used by operating activities: Depreciation 235,535 121,887 Changes in operating assets and liabilities: Decrease in prepaid items - (140,217) Increase in accrued liabilities - 100,348 NET CASH USED BY OPERATING ACTIVITIES (253,989)$ (287,275)$ See independent auditors' report and notes to financial statements. 3-68 Emergency Preparedness – Great Shakeout Drill 3-69 NOTES TO FINANCIAL STATEMENTS 3-70 CITY OF RANCHO PALOS VERDES NOTES TO FINANCIAL STATEMENTS JUNE 30, 2011 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 RDA), and the Joint Powers Improvement Authority (the Authority). The City was incorporated on September 7, 1973, as a General Law City and operates under a Council/Manager form of government. The RDA was formed in 1984 pursuant to the State of California Health and Safety Code Section 33000 entitled “Community Redevelopment Law”. Its purpose is to finance long-term capital improvements designed to eliminate physical and economic blight in a project area through stabilization of hazardous landslides. The Authority was formed on September 4, 1990, in accordance with the provisions of the Reimbursement and Settlement Agreement, dated October 27, 1987, entered into by the City, the RDA, and the County of Los Angeles (the County) in connection with the Horan Lawsuit. The Agreement requires funds to be set aside and expended by the Authority to maintain landslide abatement improvements installed and constructed by the RDA. The criteria used in determining the scope of the reporting entity are based on the provisions of GASB Statement 14. The City of Rancho Palos Verdes is the primary government unit. Component units are those entities which are financially accountable to the primary government, either because the City appoints a voting majority of the component unit’s Board, or because the component unit will provide a financial benefit or impose a financial burden on the City. The City has accounted for both the RDA and the Authority as “blended” component units. Despite being legally separate entities, the RDA and the Authority are so intertwined with the City, they are, in substance, part of the City’s operations. Accordingly, the balances and transactions of the RDA 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 RDA and the Authority are “blended” component units: 3-71 CITY OF RANCHO PALOS VERDES NOTES TO FINANCIAL STATEMENTS JUNE 30, 2011 See independent auditors’ report. 1) The members of the City Council also act as the governing body of both the RDA and the Authority. 2) The City, the RDA and the Authority are financially interdependent. The City subsidizes maintenance operations performed by the Authority. The City makes loans to the RDA for use on redevelopment projects. Available property tax revenues of the RDA will be used to repay the loans from the City. It is not anticipated that tax increment revenues may become available to begin repayment of the loans as early as December 2013. 3) Employees of the City manage both the RDA and the Authority. Separately issued financial statements for both the RDA and the Authority may be obtained at the City’s administrative offices. Participation in Public Entity Joint Powers Authority The City is a member of the Palos Verdes Peninsula Transit Joint Powers Authority (the Transit Authority). 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. B. Accounting and Reporting Policies The City has conformed to the pronouncements of the Governmental Accounting Standards Board (GASB), which are the primary authoritative statements of accounting principles generally accepted in the United States of America applicable to State and Local governments. 3-72 CITY OF RANCHO PALOS VERDES NOTES TO FINANCIAL STATEMENTS JUNE 30, 2011 See independent auditors’ report. C. Description of Funds The accounts of the City are organized on the basis of funds, each of which is considered a separate accounting entity. The operations of each fund are accounted for with a separate set of self-balancing accounts that comprise its assets, liabilities, fund equity, revenues, and expenditures. The following are types of funds used: Governmental Fund Types • General Fund – Used to account for all financial resources except those that are required to be accounted for in another fund. • Special Revenue Funds – Used to account for the proceeds of specific revenue sources that are restricted by law or administrative action for specified purposes. • Debt Service Fund – The debt service fund of the RDA is used to account for property tax increment revenue and related interest income. Disbursements from this fund consist mainly of principal and interest on RDA indebtedness. • 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. D. Basis of Accounting/Measurement Focus Government – Wide Financial Statements The City’s Government-Wide Financial Statements include a “Statement of Net Assets” and a “Statement of Activities”. These two statements present summaries of Governmental Activities for the City. 3-73 CITY OF RANCHO PALOS VERDES NOTES TO FINANCIAL STATEMENTS JUNE 30, 2011 See independent auditors’ report. 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. All governmental funds are accounted for on a spending or “current financial resources” measurement focus and the modified accrual basis of accounting. 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 3-74 CITY OF RANCHO PALOS VERDES NOTES TO FINANCIAL STATEMENTS JUNE 30, 2011 See independent auditors’ report. 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 Redevelopment Agency Housing Set-Aside Special Revenue Fund is used to account for the portion of Redevelopment tax increment monies which is a requirement under California Redevelopment Law, Section 33334, to be set-aside for the development of low and moderate income housing. The RDA Debt Service Fund is used to account for the accumulation of resources and for the payment of principal and interest on the Redevelopment Agency’s debt. 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 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 3-75 CITY OF RANCHO PALOS VERDES NOTES TO FINANCIAL STATEMENTS JUNE 30, 2011 See independent auditors’ report. 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. E. 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 decrease in the amount of $864,127. This decrease was primarily a result of appropriations continued to 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, 2011, based on calculations by City Management, proceeds of taxes did not exceed related appropriations. 3-76 CITY OF RANCHO PALOS VERDES NOTES TO FINANCIAL STATEMENTS JUNE 30, 2011 See independent auditors’ report. F. Advances to Other Funds Long-term inter-fund advances are recorded as a receivable in the advancing governmental fund and as a liability in the fund receiving the advance. Accrued unpaid interest, for which there is no immediately available resources to pay, is deferred in the advancing governmental fund and the principal portion of the advance is reported as a reservation of fund balance. G. Capital Assets Capital assets include land, machinery and equipment (vehicles, computers, etc.), buildings and improvements, and infrastructure assets (street systems, storm drains, sewer systems, etc.); and are reported in Governmental Activities column of the Government-Wide Financial Statements. Capital assets are defined by the City as all land and buildings, vehicles, computers and equipment with an initial individual cost of more than $5,000; and improvements and infrastructure assets with costs of more than $100,000. Such assets are recorded at historical cost or estimated historical cost if purchased or constructed. Donated or annexed capital assets are recorded at estimated market value at the date of donation or annexation. The costs of normal maintenance and repairs that do not add to the value of the asset or materially extend assets lives are not capitalized. Depreciation is recorded in the Government-Wide Financial Statements on a straight-line basis over the useful life of the assets as follows: Buildings and Improvements 25 to 50 years Vehicles, Computers, and Equipment 3 to 10 years Infrastructure Assets Roadway Network 10 to 100 years Sewer Network 25 to 50 years Storm Drain Network 30 to 100 years Parks and Recreation Network 25 years H. Employee Compensated Absences City employees may receive from 10 to 20 days vacation time each year, depending upon length of service. An employee may accumulate earned vacation time up to a maximum of two years’ worth of accrued vacation leave. Upon termination, employees are paid the full value of their unused vacation time at their existing salary. The General Fund will primarily be used to liquidate the liability for compensated absences in future years. Any liability for compensated absences is 3-77 CITY OF RANCHO PALOS VERDES NOTES TO FINANCIAL STATEMENTS JUNE 30, 2011 See independent auditors’ report. only carried in the General Fund if there is unused/unpaid leave outstanding following an employee’s separation. I. Investments Investments are stated at fair value (quoted market price of the best available estimate, thereof), except for the City’s investments in U.S. Treasury Securities which are reported at cost since they have short-term maturities and the City intends to hold them to maturity. J. 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. K. Claims and Judgments When it is probable that a claim liability has been incurred, and the amount of the loss can be reasonably estimated, the City records the estimated loss, net of any insurance coverage under its self-insurance program. Small claims and judgments are recorded as expenditures when paid. The City’s self-insurance program is administered through the California Joint Powers Authority (the CJPIA), which is described at Note #8. The CJPIA is a public entity risk pool, which is accounted for under the provisions of GASB Statement 10. Claim losses recorded in the CJPIA include both current claims and “Incurred but Not Reported” (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 in the year received. Adverse claims experience result in the payment of additional deposits and such deposits, if any, are recorded as insurance expenditures when paid. L. 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 3-78 CITY OF RANCHO PALOS VERDES NOTES TO FINANCIAL STATEMENTS JUNE 30, 2011 See independent auditors’ report. appropriable resources and thus, an equivalent portion of fund balance is reported as nonspendable. The City had a total of $1,673,750 ($1,411,666 in governmental funds and $262,084 in internal service funds) of prepaid items as of June 30, 2011. M. Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that effect certain reported amounts and disclosures. Accordingly, actual results could differ from those estimates. N. 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, 2011, are classified in the accompanying financial statements as follows: Government- Wide Statement of Net Assets Total cash and investments $ 44,065,637 Cash and investments as of June 30, 2011 consist of the following: Petty Cash $ 2,500 Deposits with Financial Institutions 2,978,122 Investments 41,088,015 Total cash and investments $ 44,065,637 3-79 CITY OF RANCHO PALOS VERDES NOTES TO FINANCIAL STATEMENTS JUNE 30, 2011 See independent auditors’ report. 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 $5 million 15% Disclosures Relating to Interest Rate Risk Interest rate risk is the risk that changes in market interest rates will adversely affect the fair value of an investment. Generally, the longer the maturity of an investment, there is a greater sensitivity of its fair value to changes in market interest rates. The City manages its exposure to interest rate risk by purchasing a combination of U.S. Treasury securities and investing with the Local Agency Investment Fund (LAIF) such that the portfolio provides cash flows and liquidity need for operations. The City’s investment is represented by shares in the pool, which can be withdrawn in one business day. The average maturity of the pool is less than one year. Remaining Maturity 12 Months Investment Type or Less Local Agency Investment Fund (LAIF) 36,412,335$ U.S. Treasury Securities 4,675,680 41,088,015$ 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 3-80 CITY OF RANCHO PALOS VERDES NOTES TO FINANCIAL STATEMENTS JUNE 30, 2011 See independent auditors’ report. rating by a nationally recognized statistical rating organization. The City’s LAIF investment is not rated; and U.S. Treasury Securities are exempt from disclosure. 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, 2011, the City’s investments in LAIF and U.S. Treasury Securities 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 institutions are non-interest bearing bank accounts that are fully insured by the Federal Deposit Insurance Corporation (FDIC). Investment in Local Agency Investment Fund The City of Rancho Palos Verdes is a voluntary participant in LAIF that is regulated by California Government Code Section 16429 under the oversight of the Treasurer of the State of California. The fair value of the City of Rancho Palos Verdes’ investment in this pool is based upon the City of Rancho Palos Verdes’ pro-rata share of the fair value provided by LAIF for the entire pool portfolio (in relation to the amortized cost of that portfolio). The balance available for 3-81 CITY OF RANCHO PALOS VERDES NOTES TO FINANCIAL STATEMENTS JUNE 30, 2011 See independent auditors’ report. 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, 2011: Due To General Fund Other Governmental Funds 138,658$ Total: 138,658$ 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. Inter-fund Advances The General Fund and Affordable Housing Capital Projects Fund have advanced the Redevelopment Agency amounts as described below: Balance Balance July 1, 2010 Additions Deletions June 30, 2011 Advances to the Redevelopment Agency 19,368,878$ 1,022,728$ -$ 20,391,606$ The City has entered into an agreement to provide the RDA operating funds and staff assistance, supplies, technical and other services and facilities of the City as the RDA requires in carrying out its function under the community redevelopment law. The RDA will repay the resulting indebtedness, plus interest, from incremental property tax revenues arising from the project area, as such revenue becomes available. As of June 30, 2011, no revenue was available to the RDA to repay the advances due to the City, nor is sufficient revenue expected to be available to 3-82 CITY OF RANCHO PALOS VERDES NOTES TO FINANCIAL STATEMENTS JUNE 30, 2011 See independent auditors’ report. repay advances in the immediate future. Variable interest was accrued at a rate of 3.495 percent during the fiscal year ended June 30, 2011. Of the $18,568,186 advance, $14,035,489 relates to the Portuguese Bend portion of the RDA, while $4,532,697 relates to the Abalone Cove portion. During the year ended June 30, 2011, accrued interest of $473,964 was added to the balance of the advance to the Portuguese Bend Fund, while principal of $346,483 and accrued interest of $153,064 was advanced to the Abalone Cove Fund. No interest has ever been paid by the RDA on these advances; therefore, the interest component of the advance has been recorded as deferred revenue in the General Fund of the City. In connection with the development of the senior affordable housing project, the City agreed to advance funds to the Redevelopment Agency for use in providing financial assistance to the developer in the form of a construction loan. The balance of these advances at June 30, 2011 was $1,823,420, which includes $57,035 of interest accrued at a rate of 3 percent. Inter-fund Transfers Inter-fund transfers for the year ended June 30, 2011, consisted of the following: Street Other General Maintenance Governmental Fund Fund Funds Totals General Fund -$ -$ 651,020$ 651,020$ Street Maintenance - - 937,133 937,133 Capital Improvement Projects 6,613,778 4,419 297,134 6,915,331 Other Governmental Funds 350,570 - - 350,570 Totals: 6,964,348$ 4,419$ 1,885,287$ 8,854,054$ 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; and 2) use unrestricted revenues collected in the General Fund to finance various programs accounted for in other funds in accordance with budgetary authorizations or grant matching requirements. NOTE #4 – CAPITAL ASSETS AND DEPRECIATION In accordance with GASB Statement No. 34, the City has reported all capital assets including infrastructure in the Government-Wide Statement of Net Assets. The City elected to use the basic reporting approach as defined by GASB Statement No. 34 for all infrastructures, whereby depreciation expense and accumulated depreciation has been recorded. The following tables present the capital assets activity for the year ended June 30, 2011. 3-83 CITY OF RANCHO PALOS VERDES NOTES TO FINANCIAL STATEMENTS JUNE 30, 2011 See independent auditors’ report. Beginning Ending Governmental Activities Balance Increases Decreases Balance Capital assets not being depreciated: Land $38,808,553 $1,239,735 0 $40,048,288 Construction in progress 66,290 2,042,136 ($1,480,118) 628,308 Total capital assets not being depreciated 38,874,843 3,281,871 (1,480,118) 40,676,596 Capital assets being depreciated: Building and improvements 9,811,633 0 (432,094) 9,379,539 Vehicles 289,454 50,896 (44,732) 295,618 Computer equipment 599,397 0 0 599,397 Furniture, fixtures and equipment 512,517 61,343 0 573,860 Infrastructure 0 0 Roadway system 86,550,235 1,590,315 0 88,140,550 Sewer system 25,755,463 0 0 25,755,463 Storm drain system 13,148,416 0 0 13,148,416 Parks system 6,482,028 220,296 0 6,702,324 Total capital assets being depreciated 143,149,143 1,922,850 (476,826) 144,595,167 Less accumulated depreciation for: Buildings and improvements (2,054,641) (203,170) 34,568 (2,223,243) Vehicles (196,512) (49,182) 44,732 (200,962) Computer equipment (536,859) (27,356)0 (564,215) Furniture, fixtures and equipment (404,650) (45,349)0 (449,999) Infrastructure 0 0 Roadway system (39,486,900) (2,349,451)0 (41,836,351) Sewer system (16,852,879) (455,109)0 (17,307,988) Storm drain system (2,716,996) (250,479)0 (2,967,475) Parks system (4,443,240) (133,208)0 (4,576,448) Total accumulated depreciation (66,692,677) (3,513,304) 79,300 (70,126,681) Total capital assets being depreciated, net 76,456,466 (1,590,454) (397,526) 74,468,486 Governmental activities capital assets, net $115,331,309 $1,691,417 ($1,877,644) $115,145,082 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) 3,055,039 Recreation Services (depreciation of parks system) 133,208 Capital assets held by the City’s internal service funds are charged to the various functions based on their usage of the assets 121,887 Total Depreciation Expense – Governmental Activities $3,513,304 3-84 CITY OF RANCHO PALOS VERDES NOTES TO FINANCIAL STATEMENTS JUNE 30, 2011 See independent auditors’ report. Beginning Ending Business-typ e Activities Balance Increases Decreases Balance Capital assets not being depreciated: Land $1,408,493 0 0 $1,408,493 Construction in progress 149,081 $529,899 0 678,980 Total capital assets not being depreciated 1,557,574 529,899 0 2,087,473 Capital assets being depreciated: Equipment 11,813 0 0 11,813 Storm drain system 11,338,573 0 0 11,338,573 Total capital assets being depreciated 11,350,386 0 0 11,350,386 Less accumulated depreciation for: Equipment (8,270) (2,362)0 (10,632) Storm drain system (441,385) (233,173)0 (674,558) Total accumulated depreciation (449,655) (235,535)0 (685,190) Total capital assets being depreciated, net 10,900,731 (235,535)0 10,665,196 Business-type activities capital assets, net $12,458,305 $294,364 0 $12,752,669 Depreciation expense of $235,535 is included in the Water Quality Flood Protection enterprise fund. NOTE #5 – LONG-TERM DEBT A. RDA Tax Increment Bond and Deferred Interest Payable In July 1991, the RDA received $10,000,000 in loan proceeds (the Loan) from the County of Los Angeles (the County) upon the County’s issue of Abalone Cove Improvement Bonds 2651-M pursuant to a Reimbursement and Settlement Agreement (the Agreement), dated October 27, 1987 in connection with the Horan Lawsuit. The Loan was made for the purpose of abating the Abalone Cove landslide. The settlement Loan was secured by property assessment liens in the Abalone Cove project area. As stipulated by the parties to the Agreement, a portion of the Loan proceeds was used to repay a tax allocation and revenue anticipation promissory note issued to the County in the principal amount of $1,450,000, plus accrued interest equal to $179,244. A second portion of the proceeds was used to repay expenses Balance Balance Amount Due July 1, 2010 Additions Deletions June 30, 2011 in One Year RDA Tax Increment Bond 5,250,000$ (85,000)$ 5,165,000 $ 100,000$ RDA Deferred Interest Payable 1,136,303 (337,701) 798,601 - Employee Compensated Absences 294,483 252,275 (214,158) 332,600 241,878 Totals 6,680,786$ 252,275$ (636,859)$ 6,296,201 $ 341,878$ 3-85 CITY OF RANCHO PALOS VERDES NOTES TO FINANCIAL STATEMENTS JUNE 30, 2011 See independent auditors’ report. advanced by the County in the amount of $135,614. A third portion was used to repay certain loans from the City to the RDA in the amount of $787,340. Per the terms of the Agreement, $1,000,000 of the proceeds was deposited in the Abalone Cove Permanent Fund of the Joint Powers Improvement Authority. The remainder of the proceeds was accounted for in the RDA’s Abalone Cove Fund. Concurrent with the execution of the Agreement, the County deeded its title in the Abalone Cove Beach Park to the RDA. As part of the Agreement, the RDA is required to transfer 17 percent of tax increment revenue to the Consolidated Fire Protection District of the County and 50.9 percent of tax increment revenue for debt repayment to the County. In accordance with the Agreement, the RDA was to pay the Loan principal plus interest at 7.7654 percent over a 30-year period that began in 1992. However, these debt payments were to be deferred 10 years until the fiscal year ended June 30, 2002. As part of the deferral arrangement, the accrued interest from the inception of the Loan through June 30, 2002, in the amount of $7,314,944, was scheduled for payment over a 20-year period beginning in the fiscal year 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 RDA 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 RDA. 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 RDA made a lump sum payment to the County in the amount of $4,545,000 and issued a $5,455,000 tax increment bond to the County (the RDA bond). Of the $4,545,000 lump sum payment, $2,000,000 was paid from tax increment revenue and interest earnings accumulated in the Debt Service Fund. The remaining $2,545,000 was funded by a combination of a loan from the General Fund of the City to the Agency for $1,545,000 and a net operating transfer from the Agency’s Abalone Cove Capital Projects Fund to the Debt Service Fund of $1,000,000. The private property liens resulting from the formation of the bond assessment district in connection with the Reimbursement and Settlement Agreement in 1987 were discharged in accordance with the terms of the MOU. The RDA bond was issued as a conduit through the Improvement Authority to the County. No issuance costs were incurred. One hundred percent of net future tax increment revenue will fund the payment of the RDA bond debt and the deferred interest from the original Loan until paid in full. In December 1997, the County 3-86 CITY OF RANCHO PALOS VERDES NOTES TO FINANCIAL STATEMENTS JUNE 30, 2011 See independent auditors’ report. began withholding payment of the Agency’s net tax increment revenue (net of the 17 percent payment to the County Fire Protection District and the 20 percent housing set-aside amount) to offset the annual principal and interest charges. The principal of the RDA bond began maturing in installments each December 2nd, commencing December 2, 2004. Interest accrues at a rate of 5 percent per annum and is payable in arrears each June 2nd and December 2nd. Additionally, both the accrued interest and deferred interest on the $10,000,000 Loan previously owed the County was retroactively recalculated from the Loan origination date at a rate of approximately 5 percent compared to 7.7654 percent per the original Agreement. The recalculated deferred interest was $3,111,400. In accordance with the MOU, the recalculated deferred interest does not accrue additional interest. As of June 30, 2011, a total of $2,312,798 in accumulated tax increment has been applied against this balance, including $337,701 applied during fiscal year 2010-11. The remaining balance at June 30, 2011, was $798,602. The accumulated amount of tax increment withheld over the scheduled principal and interest payment made during the life of the RDA bond is recorded in the Debt Service Fund as a prepaid item at June 30, 2011. After payment of the deferred interest, the RDA may elect to further defer payment to the County of the 50.9 percent of tax increment revenue in order to extinguish any other indebtedness of the RDA. This deferral would allow the tax increment to be available for the repayment of loans made to the RDA by the City (Note #3). In the event the deferral is elected, and the debt owed the City is fully extinguished and no other RDA indebtedness exists, the RDA will transfer all subsequent tax increment revenue to the County to fund prior deferrals of, and current payments of, the 50.9 percent of tax increment revenue required to be paid per the Settlement Agreement. The debt service schedule below summarizes all fixed principal and interest payments for the term of the RDA bond. Because the payback period for the deferred interest amount will fluctuate depending on the availability of excess tax increment revenue, no amounts have been included in the following schedule for repayment of the deferred interest. 3-87 CITY OF RANCHO PALOS VERDES NOTES TO FINANCIAL STATEMENTS JUNE 30, 2011 See independent auditors’ report. Year Ending June 30, Principal Interest Total 2012 100,000 255,750 355,750 2013 120,000 250,250 370,250 2014 135,000 243,875 378,875 2015 155,000 236,625 391,625 2016 180,000 228,250 408,250 2017-2021 1,275,000 972,875 2,247,875 2022-2026 2,085,000 557,875 2,642,875 2027-2028 1,115,000 56,875 1,171,875 Totals 5,165,000$ 2,802,375$ 7,967,375$ B. Employee Compensated Absences There is no fixed payment schedule for employee compensated absences. Based on historical trends, $241,878 estimated to be the amount that will be used and/or paid out during fiscal year 2011-12. NOTE #6 – 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. 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. 3-88 CITY OF RANCHO PALOS VERDES NOTES TO FINANCIAL STATEMENTS JUNE 30, 2011 See independent auditors’ report. Fund Financial Statements The City has implemented Governmental Accounting Standards Board Statement No. 54 “Fund Balance Reporting and Governmental Fund Type Definitions” for the year ended June 30, 2011. As part of implementation, three funds no longer met the more narrow definition of a Special Revenue fund type. The Utility Undergrounding Fund, Roadway Beautification Fund, and RPV TV Fund were closed and all remaining cash was transferred to the General Fund. In addition, the Bikeways Fund, Environmental Excise Tax Fund, Quimby Fund, and the City’s Affordable Housing Fund were re-classified from Capital Projects fund types to Special Revenue fund types. The fund balances reported on the fund statements now consist of the following categories: 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, 2011. 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, 2011: 3-89 CITY OF RANCHO PALOS VERDES NOTES TO FINANCIAL STATEMENTS JUNE 30, 2011 See independent auditors’ report. Minimum Fund Balance Policies The City Council has adopted a policy, via resolution, to maintain the following minimum fund balances: 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 $50,000 for emergency use for habitat restoration purposes. Special Revenue Funds Fund balances are restricted in the special revenue funds for the following purposes: Fund Purpose Revenue Source Amount Street Maintenance Maintain the City's right of way, which includes both pavement and roadside maintenance Highway Users' Tax and other transfers of other restricted funding (e.g. Landscaping & Lighting District Assessments) 915,145$ Air Quality Management p vehicles AB2766 fees 48,607$ Community Development Block Grant Provide home improvement loans to low and moderate income property owners, and construct City owned facilities compliant with the Federal grant -$ El Prado Maintain the common area of the El Prado neighborhood Property assessments 14,781$ Proposition A Public transportation Special sales tax 125,603$ Proposition C Public transit and related services Special sales tax 1,570,675$ Street RDA Housing RDA Debt Capital Other General Maintenance Set-Aside Service Improvement Governmental Fund Fund Fund Fund Fund Funds Nonspendable: In Form (e.g. inventory, prepaid amounts) 7,514,501$ -$ 2,990,000$ 573,216$ -$ 1,784,343$ Legally (e.g. endowments) - - - - - 1,793,741 Restricted - 915,145 - - - 7,669,030 Committed - - - - - - Assigned - - - - 11,649,780 - Unassigned: Rainy Day Fund 10,762,665 - - - - - Continued Appropriations 623,096 - - - - - Deficit Fund Balance - - (1,162,582) (18,524,215) - (126,396) Governmental Fund Balance Totals 18,900,262$ 915,145$ 1,827,418$ (17,950,999)$ 11,649,780$ 11,120,718$ 3-90 CITY OF RANCHO PALOS VERDES NOTES TO FINANCIAL STATEMENTS JUNE 30, 2011 See independent auditors’ report. Continued: Fund Purpose Revenue Source Amount Measure R Transportation needs, including maintenance of arterial streets, traffic control, bikeway and pedestrian improvements, and public transit Special sales tax 630,132$ Beautification Right of way beautification, neighborhood beautification grants, and promote recycling Recycling fees and grants 916,782$ Waste Reduction State mandated waste reduction and recycling plans and programs AB939 fees from waste haulers 308,433$ Public Safety Grants Law enforcement and public safety equipment Federal and state grants and shared revenues 19,932$ 1972 Act Landscaping & Lighting District Maintain right of way landscaping and lighting Property assessments 94,037$ 1911 Act Lighting District Maintain right of way lighting and traffic signals Property assessments 1,652,646$ 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 302,330$ Habitat Restoration Restore habitat on City owned property Developer fees Non-Spendable $43,741 Restricted $219,317 Measure A Acquire, improve and maintain open space and park facilities Voter-approved county bond proceeds -$ Abalone Cove Sewer District Maintain and operate the Abalone Cove sewer system Property assessments 96,678$ 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 182,947$ Donor Restricted Contributions Acquire or construct recreational facilities Private donations 405,519$ Bikeways Design and construction of bicycle and pedestrian facilities on roadways, including disable access ramps Transportation Development Act Article 3 51$ 3-91 CITY OF RANCHO PALOS VERDES NOTES TO FINANCIAL STATEMENTS JUNE 30, 2011 See independent auditors’ report. Continued: Fund Purpose Revenue Source Amount 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 415,398$ Quimby Develop or rehabilitate park and recreational facilities Developer fees 29,328$ Affordable Housing Implement goals, policies and programs outlined in the Housing Element of the City's General Plan Developer fees 4,152$ The RPV TV Special Revenue Fund does not receive restricted revenues and was closed during FY10-11. 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 11,649,780$ Redevelopment Agency Abalone Cove Restricted for landslide mitigation projects in the Abalone Cove area of the Redevelopment Agency's Project Area 6,216$ Redevelopment Agency Portuguese Bend Restricted for landslide mitigation projects in the Portuguese Bend area of the Redevelopment Agency's Project Area 306,682$ The Utility Undergrounding Fund and Roadway Beautification Fund were closed during FY10-11. The remaining fund balances were transferred to the General Fund. Permanent Funds Fund balances are considered non-spendable or restricted for the following: 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 ag reement with the City. Non-Spendable $750,000 Restricted $26,007 3-92 CITY OF RANCHO PALOS VERDES NOTES TO FINANCIAL STATEMENTS JUNE 30, 2011 See independent auditors’ report. Continued Fund Purpose Amount 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 $292,777 NOTE #7 – 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 participates in the Miscellaneous 2.5% at 55 Risk Pool of 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. 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. Active City employees are required to contribute 8% of their annual covered salary. For fiscal year 2010-11, the City paid 6.5% of the contribution for all the full-time positions, and 1% of the contribution for part-time employees. However, beginning in September 2011, City employees will pay the entire 8% contribution. The City is required to contribute the actuarially determined remaining amounts necessary to fund the benefits for its members. The fiscal year 2010-11 rate was 10.263% 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 3-93 CITY OF RANCHO PALOS VERDES NOTES TO FINANCIAL STATEMENTS JUNE 30, 2011 See independent auditors’ report. 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 2009-2010. The funded status of the risk pool at June 30, 2010 was 63.9%. The risk pool’s unfunded actuarial accrued liability at June 30, 2010 was $238,141,415. The City’s share of the risk pool’s liability is estimated to be $3,118,353. The estimate is based on the City’s 1.3% proportionate share of the risk pool’s total projected payroll for fiscal year 2011-12. However, the risk pool’s liability is not a reportable liability of the City. The City’s contributions to CalPERS for the most recent three years follow. City Pay-off Total Year Ended Contribution Side Fund Liability City Cost June 30, 2011 770,540$ -$ 770,540$ June 30, 2010 814,205 1,661,376 2,475,581 June 30, 2009 808,304 700,000 1,508,304 Retirement Health Savings Plan On November 17, 2009, the City approved the establishment of a defined contribution Retirement Health Savings Plan (the “Plan”) for its full-time employees. The Plan is a Health Reimbursement Arrangement (“HRA”) within Sections 105 and 106 of the Internal Revenue Code. The Plan assets are managed in a non-taxable trust as described in Section 501(c)(9) of the Internal Revenue Code. The City is the Plan Administrator, and utilizes the services of a contracted financial services provider for day-to-day administration of contributions and disbursements. The City has the authority to amend the Plan’s provisions and contribution requirements. The City has no obligation to make contributions to the Plan, but as part of the annual budget process the City may elect to make contributions to the Plan. Employees are required to contribute 1% of their gross wages to their account, which is owned by the employee. During fiscal year 2010-11, the City contributed a total of $73,465 to employee accounts. During the same time, employees contributed a total of $45,503 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. 3-94 CITY OF RANCHO PALOS VERDES NOTES TO FINANCIAL STATEMENTS JUNE 30, 2011 See independent auditors’ report. NOTE #8 – 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 121 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 A revised cost allocation methodology was introduced in 2010-11, however it retains many elements of the previous cost allocation methodology. 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 (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 3-95 CITY OF RANCHO PALOS VERDES NOTES TO FINANCIAL STATEMENTS JUNE 30, 2011 See independent auditors’ report. $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 2010-11 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 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 $4 million is purchased as part of a reinsurance policy, and Employer’s Liability losses from $4 million to $10 million are pooled among members. 3-96 CITY OF RANCHO PALOS VERDES NOTES TO FINANCIAL STATEMENTS JUNE 30, 2011 See independent auditors’ report. 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, 2008 through July 1, 2011. 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 $14,481,933. 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 $14,386,720. There is a deductible of 5% per unit of value with a minimum deductible of $100,000. Premiums for the coverage are paid annually and are not subject to retrospective adjustments. Crime Insurance The City 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 3-97 CITY OF RANCHO PALOS VERDES NOTES TO FINANCIAL STATEMENTS JUNE 30, 2011 See independent auditors’ report. 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 2010-11. NOTE #9 – CONTINGENCIES AND COMMITMENTS Litigation In the normal course of operations, the City has been named as a defendant in various claims and legal actions. Generally, unfavorable results of these claims and legal actions are funded through the City’s participation in California Joint Powers Insurance Authority (CJPIA, see Note #8) and, as such, the City believes that the ultimate liability for these legal actions and claims will not have a material adverse effect on the City’s financial statements. The City is also a defendant in legal actions for which the potential losses would not be covered through participation in CJPIA. The likelihood of an unfavorable outcome or the amount of potential losses cannot be reasonably estimated by the City for these claims at this time. In the event of an unfavorable outcome the losses would likely be material to the City’s financial statements. Storm Drain Failures During the winter storms of fiscal year 2004-05 citywide emergency repairs were required, including those to repair sinkholes along Western Avenue. The City received reimbursement from the Federal Emergency Management Agency in the amount of approximately $1.2 million. Of that amount, $274,430 is included in the fund balance of the Capital Improvement Projects Fund. Based on an audit by the Department of Homeland Security’s Office of Inspector General, the City may be liable to return over $900,000 to FEMA. The City strongly disagrees with the auditor’s conclusions and intends to file all appropriate appeals in support of its claim that it should be allowed to retain the FEMA funds. 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 3-98 CITY OF RANCHO PALOS VERDES NOTES TO FINANCIAL STATEMENTS JUNE 30, 2011 See independent auditors’ report. 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. As of June 30, 2010, the City had accrued a liability for the potential settlement. The City will continue its vigorous defense of this case. AT&T Utility Users’ Tax AT&T and a group of plaintiffs from a national class action lawsuit against AT&T have sued the City and 150 other California local government entities for a refund of utility users’ tax (UUT) alleged to have been erroneously paid to the City. The City executed a settlement agreement on November 15, 2011. AT&T will deduct a total of $38,980 from future UUT payments owed to the City. Recent Changes in Legislation Affecting California Redevelopment Agencies AB X1 26, which was signed by the Governor of California on June, 29, 2011, added Parts 1.8 and 1.85 to the Community Redevelopment Law. Part 1.8 immediately suspended most redevelopment agency activities and, among other things, prohibited redevelopment agencies from incurring indebtedness or entering into or modifying contracts. Part 1.85 provided that on October 1, 2011, all existing redevelopment agencies and redevelopment agency components of community development agencies were dissolved, and successor agencies are designated as successor entities to the former redevelopment agencies. Part 1.85 imposed numerous requirements on the successor agencies and subjected successor agency actions to the review of oversight boards established under Part 1.85. AB X1 27 was signed by the Governor concurrently with AB X1 26 and added Part 1.9 to the Community Redevelopment Law. Part 1.9 established a Voluntary Alternative Redevelopment Program (VARP) whereby a redevelopment agency will, notwithstanding Parts 1.8 and 1.85, be authorized to continue to exist and carry out the provisions of the Community Redevelopment Law. Failure to make these payments would require the redevelopment agency to be terminated under AB X1 26. 3-99 CITY OF RANCHO PALOS VERDES NOTES TO FINANCIAL STATEMENTS JUNE 30, 2011 See independent auditors’ report. On July 18, 2011, the League of California Cities and the California Redevelopment Association filed a lawsuit on behalf of cities, counties and redevelopment agencies petitioning the California Supreme Court to overturn AB X1 26 and AB X1 27. On August 11, 2011, the Supreme Court of California decided to hear the case and set a briefing schedule designed to allow the Court to decide the case before January 15, 2012, which is the date the first half of the FY11-12 VARP payment is due (the second half is due May 15, 2012). On August 11, 2011, the Court also issued a stay order, which was subsequently modified on August 17, 2011. Pursuant to the modified stay order, the Supreme Court granted a stay of all of AB X1 27 (Part 1.9), except for Health and Safety Code Section 34194(b)(2) (relating to the determination of cities’ FY11-12 remittance amounts), and a partial stay of AB X1 26. With respect to AB X1 26, Part 1.85 was stayed in its entirety, but Part 1.8 was not stayed. The granting of the stay means that all agencies are subject to the prohibitions in Part 1.8, including the prohibition against entering into new contracts, during the time the stay is in effect. The Supreme Court will consider adjusting the dates and deadlines in AB X1 26 and AB X1 27 if the Supreme Court ultimately upholds those statutes to take into account the period of time the stay was in effect, but the Supreme Court’s decision is not likely to occur until January of 2012. On August 16, 2011, the City adopted Ordinance No. 524 to participate in the VARP, thereby agreeing to make specified annual payments to the County Auditor- Controller for allocation to special districts and educational entities and authorizing its redevelopment agency (Agency) to continue to exist pursuant to Part 1.9. The remittance amount to be paid by the City in FY11-12 is the Agency’s proportionate share of $1.7 billion, as determined by the State Department of Finance pursuant to a formula specified in AB X1 27. The Department of Finance notified the City that its FY11-12 remittance amount is $91,320. The City appealed its FY11-12 amount on August 10, 2011 on the basis that AB X1 26 and AB X1 27 are unconstitutional. This payment obligation under AB X1 27 is an ongoing obligation of the City in subsequent years. Commencing in FY12-13, the City’s remittance amount is expected to be based on the Agency’s proportionate share of $400 million (with adjustments based on growth or decline in tax increment revenues); however, the amount has not yet been determined by the state legislature. In addition, AB X1 27 provided that agencies will pay additional pass through payments to school entities (“Additional Pass-Through”) on account of any “new debt.” New debt is indebtedness that is listed on a statement of indebtedness (“SOI”) filed after the SOI that was required to be filed on October 1, 2011, and that was not displayed on that SOI. 3-100 CITY OF RANCHO PALOS VERDES NOTES TO FINANCIAL STATEMENTS JUNE 30, 2011 See independent auditors’ report. On August 24, 2011, the Agency adopted an Enforceable Obligations Payment Schedule (EOPS) as required by AB X1 26. Enforceable obligations include bonds, loans and payments required by the federal or state government; as well as legally binding and enforceable agreements or contracts. The Agency prepared the initial Recognized Obligation Payment Schedule (ROPS) that was presented to City Council on September 6, 2011, when the City adopted Resolution 2011-66 making an election to serve as the successor agency pursuant to Part 1.85. Pursuant to AB X1 27 (specifically, Health and Safety Code Section 34194.2) a city and agency can enter into a transfer agreement to provide for the agency to transfer to the city each year a portion of the agency’s tax increment. Amounts transferred must be used for the purpose of financing activities in the redevelopment area that are related to accomplishing the redevelopment agency project goals. For FY11-12 only, the tax increment may be transferred from the Agency’s 20% tax increment set aside for affordable housing. The amount of the annual transfer under this type of agreement cannot exceed the amounts of a city’s annual remittances under the VARP. On September 20, 2011, the City and the Agency entered into such a transfer agreement. The transfer agreement presented to the Agency Board and City Council provides that it will only become effective on the date that the Supreme Court lifts or modifies the stay in connection with AB X1 26 and AB X1 27 in a manner such that the prohibitions in Part 1.8 do not apply to the Agency. In the event that AB X1 26 is upheld and becomes applicable to the City, the interagency receivables recognized by the General Fund and the Affordable Housing Fund of the City that had previously advanced money to the Agency may become uncollectable resulting in a loss recognized by the City funds. NOTE #10 – PROPERTY TAXES Under California law, property taxes are assessed and collected by the counties up to one percent of assessed value, plus other increases approved by the voters. The property taxes go into a pool, and are then allocated to the cities based on complex formulas. Accordingly, the City accrues only those taxes, which are received from the county within sixty days after year-end. Lien date January 1 Levy date June 30 Due date November 1 and February 1 Collection dates December 10 and April 10 3-101 CITY OF RANCHO PALOS VERDES NOTES TO FINANCIAL STATEMENTS JUNE 30, 2011 See independent auditors’ report. NOTE #11 – DEFERRED REVENUES The deferred revenues in the fund financial statements of the City of Rancho Palos Verdes as of June 30, 2011 consisted of the following: General Fund: Accrued interest from long-term advance to the RDA $ 11,915,329 Advance on federal grant 102,021 Revenue earned but not available 196,462 Other Governmental Funds: Long-term note receivable from AMCAL 3,467,453 Other long-term note receivable 126,320 Accrued interest from long-term advance to RDA 57,053 Long-term notes receivable offset (loans expended when made) 703,704 Revenue received, but not yet earned 1,025 Revenue earned, but not yet received 160,641 Total Deferred Revenues $ 16,730,008 NOTE #12 – OTHER REQUIRED FUND DISCLOSURES The following fund had deficit fund balance as of June 30, 2011: Major Fund: RDA Debt Service Fund $17,950,999 Other Governmental Funds: Measure A Special Revenue Fund $126,396 The City plans to finance the fund deficits through future revenues and transfers from other funds. 3-102 Whale of a Day Annual Event 3-103 SUPPLEMENTARY INFORMATION 3-104 CITY OF RANCHO PALOS VERDES SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL REDEVELOPMENT AGENCY DEBT SERVICE FUND For the year ended June 30, 2011 Variance with Final Budget Positive Original Final Actual (Negative) REVENUES: Taxes 889,200$ 889,200$ 897,470$ 8,270$ EXPENDITURES: Current: Administration 17,000 84,967 89,918 (4,951) Pass through to other agencies 189,000 189,000 192,232 (3,232) Debt service: Principal 456,560 456,560 422,701 33,859 Interest and fiscal charges 881,055 881,055 887,404 (6,349) TOTAL EXPENDITURES 1,543,615 1,611,582 1,592,255 19,327 EXCESS (DEFICIENCY) OF REVENUES OVER (UNDER) EXPENDITURES (654,415) (722,382) (694,785) (11,058) FUND DEFICIT - BEGINNING OF YEAR (17,256,214) (17,256,214) (17,256,214) - FUND DEFICIT - END OF YEAR (17,910,629)$ (17,978,596)$ (17,950,999)$ (11,058)$ See independent auditors' report. Budgeted Amounts 3-105 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, 2011 Variance with Final Budget Positive Original Final Actual (Negative) REVENUES: Revenue from other agencies 913,280$ 2,236,000$ 5,675$ (2,230,325)$ Use of money and property 17,400 17,400 32,483 15,083 TOTAL REVENUES 930,680 2,253,400 38,158 (2,215,243) EXPENDITURES: Capital Outlay Infrastructure administration 17,600 107,821 66,546 41,275 Street improvements 2,961,600 1,946,741 1,669,283 277,458 Parks/Trails/Open Space improvements 2,524,095 555,782 552,927 2,855 Sewer improvements - 96,550 96,550 - TOTAL EXPENDITURES 5,503,295 2,706,894 2,385,306 321,589 EXCESS (DEFICIENCY) OF REVENUES OVER (UNDER) EXPENDITURES (4,572,615) (453,494) (2,347,146) (1,893,654) OTHER FINANCING SOURCES: Transfers in 4,117,370 8,030,152 6,915,331 (1,114,821) NET CHANGE IN FUND BALANCE (455,245) 7,576,658 4,568,183 (3,008,475) FUND BALANCE - BEGINNING OF YEAR 7,081,597 7,081,597 7,081,597 - FUND BALANCE - END OF YEAR 6,626,352$ 14,658,255$ 11,649,780$ (3,008,475)$ See independent auditors' report. Budgeted Amounts 3-106 Beach Clean Up Day 3-107 CITY OF RANCHO PALOS VERDES JUNE 30, 2011 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. 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. 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. 3-108 CITY OF RANCHO PALOS VERDES JUNE 30, 2011 NONMAJOR GOVERNMENTAL FUNDS Special Revenues Fund Descriptions (continued) 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. Affordable Housing – to account for developer paid in-lieu fees for the City to construct low and moderate income housing. 3-109 CITY OF RANCHO PALOS VERDES JUNE 30, 2011 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 $1,000,000 non-expendable deposit. The interest earnings are used to pay for maintenance and repair of Abalone Cove landslide abatement improvements. 3-110 CITY OF RANCHO PALOS VERDES COMBINING BALANCE SHEET OTHER GOVERNMENTAL FUNDS June 30, 2011 Special Revenue Funds Air Quality Management CDBG El Prado Proposition A Proposition C Cash and investments 38,319$ -$ 14,680$ 138,676$ 1,568,545$ Receivables: Taxes - - 87 - - Interest 26 - 14 53 2,130 Notes - 448,750 - - - Other 10,262 73,688 - - - Prepaid items - - - - - Advance to other funds - - - - - TOTAL ASSETS 48,607$ 522,438$ 14,781$ 138,729$ 1,570,675$ LIABILITIES: Accounts payable and accrued liabilities -$ 73,360$ -$ 13,126$ -$ Due to other funds - 328 - - - Deferred revenue - 448,750 - - - TOTAL LIABILITIES - 522,438 - 13,126 - FUND BALANCES: Non-Spendable Endowment pricipal - - - - - Reimbursement settlement agreement - - - - - Prepaid items - - - - - Long term advances - - - - - Habitat restoration - - - - - Restricted 48,607 - 14,781 125,603 1,570,675 Committed - - - - - Assigned - - - - - Unassigned - - - - - TOTAL FUND BALANCES 48,607 - 14,781 125,603 1,570,675 TOTAL LIABILITIES AND FUND BALANCES 48,607$ 522,438$ 14,781$ 138,729$ 1,570,675$ See independent auditors' report. FUND BALANCES ASSETS LIABILITIES AND 3-111 Special Revenue Funds (Continued) Public Waste Safety Measure R Beautification Reduction Grants 1972 Act 1911 Act 629,548$ 911,769$ 291,220$ -$ 82,334$ 1,685,239$ - - - - 12,270 22,390 584 1,013 247 85 261 1,812 - - - - - - - 4,000 31,544 22,908 - - - - - - - - - - - - - - 630,132$ 916,782$ 323,011$ 22,993$ 94,865$ 1,709,441$ -$ -$ 14,578$ -$ 828$ 56,795$ - - - 3,061 - - - - - - - - - - 14,578 3,061 828 56,795 - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 630,132 916,782 308,433 19,932 94,037 1,652,646 - - - - - - - - - - - - - - - - - - 630,132 916,782 308,433 19,932 94,037 1,652,646 630,132$ 916,782$ 323,011$ 22,993$ 94,865$ 1,709,441$ (Continued) 3-112 CITY OF RANCHO PALOS VERDES COMBINING BALANCE SHEET OTHER GOVERNMENTAL FUNDS (CONTINUED) June 30, 2011 Joint Powers Abalone Cove Rancho Improvement Sewer Palos Authority Habitat Assessment Verdes Portuguese Bend Restoration Measure A District TV Channel Cash and investments 308,524$ 262,770$ 7,440$ 100,793$ -$ Receivables: Taxes - - - 548 - Interest - 288 26 77 - Notes - - - - - Other - - 160,641 - - Prepaid items - - - - - Advance to other funds - - - - - TOTAL ASSETS 308,524$ 263,058$ 168,107$ 101,418$ -$ LIABILITIES: Accounts payable and accrued liabilities 6,194$ -$ -$ 4,740$ -$ Due to other funds - - 133,862 - - Deferred revenue - - 160,641 - - TOTAL LIABILITIES 6,194 - 294,503 4,740 - FUND BALANCES: Non-Spendable Endowment pricipal - - - - - Reimbursement settlement agreement - - - - - Prepaid items - - - - - Long term advances - - - - - Habitat restoration - 43,741 - - - Restricted 302,330 219,317 - 96,678 - Committed - - - - - Assigned - - - - - Unassigned - - (126,396) - - TOTAL FUND BALANCES 302,330 263,058 (126,396) 96,678 - TOTAL LIABILITIES AND FUND BALANCES 308,524$ 263,058$ 168,107$ 101,418$ -$ See independent auditors' report. ASSETS FUND BALANCES Special Revenue Funds (Continued) LIABILITIES AND 3-113 Special Revenue Funds (Continued) Dr. Allen and Charlotte Total Ginsburg Donor Special Cultural Restricted Environmental Affordable Revenue Arts Building Contributions Bikeways Excise Tax Quimby Housing Funds 182,764$ 405,113$ -$ 442,062$ 29,298$ 4,147$ 7,103,241$ - - - - - - 35,295 183 406 23 573 30 5 7,836 - - - - - - 448,750 - - 1,435 - - - 304,478 - - - - - - - - - - - - 1,823,420 1,823,420 182,947$ 405,519$ 1,458$ 442,635$ 29,328$ 1,827,572$ 9,723,020$ -$ -$ -$ 27,237$ -$ -$ 196,858$ - - 1,407 - - - 138,658 - - - - - 57,053 666,444 - - 1,407 27,237 - 57,053 1,001,960 - - - - - - - - - - - - - - - - - - - - - - - - - - 1,766,367 1,766,367 - - - - - - 43,741 182,947 405,519 51 415,398 29,328 4,152 7,037,348 - - - - - - - - - - - - - - - - - - - - (126,396) 182,947 405,519 51 415,398 29,328 1,770,519 8,721,060 182,947$ 405,519$ 1,458$ 442,635$ 29,328$ 1,827,572$ 9,723,020$ (Continued) 3-114 CITY OF RANCHO PALOS VERDES COMBINING BALANCE SHEET OTHER GOVERNMENTAL FUNDS (CONTINUED) June 30, 2011 Redevelopment Redevelopment Total Agency Agency Capital Abalone Portuguese Utility Roadway Projects Cove Bend Undergrounding Beautification Funds ASSETS Cash and investments 6,216$ 309,127$ -$ -$ 315,343$ Receivables: Taxes - - - - - Interest - - - - - Notes - 254,954 - - 254,954 Other - - - - - Prepaid items - 17,976 - - 17,976 Advance to other funds - - - - - TOTAL ASSETS 6,216$ 582,057$ -$ -$ 588,273$ LIABILITIES: Accounts payable and accrued liabilities -$ 2,445$ -$ -$ 2,445$ Due to other funds - - - - - Deferred revenue - 254,954 - - 254,954 TOTAL LIABILITIES - 257,399 - - 257,399 FUND BALANCES: Non-Spendable Endowment pricipal - - - - - Reimbursement settlement agreement - - - - - Prepaid items - 17,976 - - 17,976 Long term advances - - - - - Habitat restoration - - - - - Restricted 6,216 306,682 - - 312,898 Committed - - - - - Assigned - - - - - Unassigned - - - - - TOTAL FUND BALANCES 6,216 324,658 - - 330,874 TOTAL LIABILITIES AND FUND BALANCES 6,216$ 582,057$ -$ -$ 588,273$ See independent auditors' report. Capital Projects Funds FUND BALANCES LIABILITIES AND 3-115 Permanent Funds Joint Powers Total Subregion Improvement Total Other One Authority Permanent Governmental Maintenance Abalone Cove Funds Funds 779,895$ 1,296,212$ 2,076,107$ 9,494,691$ - - - 35,295 790 - 790 8,626 - - - 703,704 - - - 304,478 - - - 17,976 - - - 1,823,420 780,685$ 1,296,212$ 2,076,897$ 12,388,190$ 4,678$ 3,435$ 8,112$ 207,416$ - - - 138,658 - - - 921,398 4,678 3,435 8,112 1,267,472 750,000 - 750,000 750,000 - 1,000,000 1,000,000 1,000,000 - - - 17,976 - - - 1,766,367 - - - 43,741 26,007 292,777 318,784 7,669,030 - - - - - - - - - - - (126,396) 776,007 1,292,777 2,068,784 11,120,718 780,685$ 1,296,212$ 2,076,897$ 12,388,190$ 3-116 CITY OF RANCHO PALOS VERDES COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES - OTHER GOVERNMENTAL FUNDS For the year ended June 30, 2011 Air Quality Management CDBG El Prado Proposition A Proposition C REVENUES: Taxes -$ -$ 1,906$ -$ -$ Revenue from other agencies 47,067 134,513 - 578,859 481,539 Use of money and property 131 - 55 65,340 26,871 Other revenues - - - - - TOTAL REVENUES 47,198 134,513 1,961 644,199 508,410 EXPENDITURES: Current: Administration - - - - - Public safety - - - - - Public works 50,000 - 30 618,860 - Community development - - - - - Parks and recreation - - - - - Capital outlay - 171,483 - - - TOTAL EXPENDITURES 50,000 171,483 30 618,860 - EXCESS (DEFICIENCY) OF REVENUES OVER (UNDER) EXPENDITURES (2,802) (36,970) 1,931 25,339 508,410 OTHER FINANCING SOURCES (USES): Transfers in - 36,970 - - - Transfers out - - - - (633,293) TOTAL OTHER FINANCING SOURCES (USES)- 36,970 - - (633,293) NET CHANGE IN FUND BALANCES (2,802) - 1,931 25,339 (124,883) FUND BALANCES (DEFICIT) - BEGINNING OF YEAR 51,409 - 12,850 100,264 1,695,558 FUND BALANCES (DEFICIT) - END OF YEAR 48,607$ -$ 14,781$ 125,603$ 1,570,675$ See independent auditors' report. Special Revenue Funds 3-117 Public Waste Safety Measure R Beautification Reduction Grants 1972 Act 1911 Act -$ -$ -$ -$ 260,454$ 497,743$ 358,897 - 69,605 100,000 - - 7,887 300,256 220,932 10,517 698 7,113 - - - - - - 366,784 300,256 290,537 110,517 261,152 504,856 - - - - - - - - - 25,505 - - - 76,376 159,599 - 13,860 423,695 - - - - - - - - - - - - - - - - - - - 76,376 159,599 25,505 13,860 423,695 366,784 223,880 130,938 85,012 247,292 81,161 - - - - - - (9,868) (165,200) (53,000) (100,000) (204,000) (67,633) (9,868) (165,200) (53,000) (100,000) (204,000) (67,633) 356,916 58,680 77,938 (14,988) 43,292 13,528 273,216 858,102 230,495 34,920 50,745 1,639,118 630,132$ 916,782$ 308,433$ 19,932$ 94,037$ 1,652,646$ (Continued) Special Revenue Funds (Continued) 3-118 CITY OF RANCHO PALOS VERDES COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES - OTHER GOVERNMENTAL FUNDS For the year ended June 30, 2011 Joint Powers Abalone Cove Rancho Improvement Sewer Palos Authority Habitat Assessment Verdes Portuguese Bend Restoration Measure A District TV Channel REVENUES: Taxes -$ -$ -$ 49,432$ -$ Revenue from other agencies - - - - - Use of money and property 473 3,991 83 262 - Other revenues - - - 1,181 - TOTAL REVENUES 473 3,991 83 50,875 - EXPENDITURES: Current: Administration - - - - - Public safety - - - - - Public works 82,464 126,026 - 45,240 - Community development - - - - - Parks and recreation - - - - - Capital outlay - - - - - TOTAL EXPENDITURES 82,464 126,026 - 45,240 - EXCESS OF REVENUES OVER (UNDER) EXPENDITURES (81,991) (122,035) 83 5,635 - OTHER FINANCING SOURCES (USES): Transfers in 101,000 109,900 - 32,700 - Transfers out - - (160,641) - (1,152) TOTAL OTHER FINANCING SOURCES (USES)101,000 109,900 (160,641) 32,700 (1,152) NET CHANGE IN FUND BALANCES 19,009 (12,135) (160,558) 38,335 (1,152) FUND BALANCE (DEFICIT) - BEGINNING OF YEAR 283,321 275,193 34,162 58,343 1,152 FUND BALANCES (DEFICIT) - END OF YEAR 302,330$ 263,058$ (126,396)$ 96,678$ -$ See independent auditors' report. Special Revenue Funds 3-119 Dr. Allen and Charlotte Total Ginsburg Donor Special Cultural Restricted Environmental Affordable Revenue Arts Building Contributions Bikeways Excise Tax Quimby Housing Funds -$ -$ -$ -$ -$ -$ 809,535$ - - 17,223 - - - 1,787,703 791 1,681 9,801 2,745 123 15 659,765 - .- 27,384 - - 28,565 791 1,681 27,024 30,129 123 15 3,285,568 - - - - - - - - - - - - - 25,505 - - - 212,682 - - 1,808,832 - - - - - 2,889 2,889 20,000 - - - - - 20,000 - - - - - - 171,483 20,000 - - 212,682 - 2,889 2,028,709 (19,209) 1,681 27,024 (182,553) 123 (2,874) 1,256,859 - - - - - - 280,570 - - (26,973) (86,300) - - (1,508,060) - - (26,973) (86,300) - - (1,227,490) (19,209) 1,681 51 (268,853) 123 (2,874) 29,369 202,156 403,838 - 684,251 29,205 1,773,393 8,691,691 182,947$ 405,519$ 51$ 415,398$ 29,328$ 1,770,519$ 8,721,060$ (Continued) Special Revenue Funds (Continued) 3-120 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, 2011 Capital Projects Funds Redevelopment Redevelopment Total Agency Agency Capital Abalone Portuguese Utility Roadway Projects Cove Bend Undergrounding Beautification Funds REVENUES: Taxes -$ -$ -$ -$ -$ Revenue from other agencies - - - - - Use of money and property 13 896 - - 909 Other revenues - 50,004 - - 50,004 TOTAL REVENUES 13 50,900 - - 50,913 EXPENDITURES: Current: Administration - - - - - Public safety - - - - - Public works - 292,046 - - 292,046 Community development - - - - - Parks and recreation - - - - - Capital outlay - - - - - TOTAL EXPENDITURES - 292,046 - - 292,046 EXCESS OF REVENUES OVER (UNDER) EXPENDITURES 13 (241,146) - - (241,133) OTHER FINANCING SOURCES (USES): Transfers in - - - - - Transfers out - - (275,159) (102,068) (377,227) TOTAL OTHER FINANCING SOURCES (USES)- - (275,159) (102,068) (377,227) NET CHANGE IN FUND BALANCES 13 (241,146) (275,159) (102,068) (618,360) FUND BALANCES (DEFICIT) - BEGINNING OF YEAR 6,203 565,804 275,159 102,068 949,234 FUND BALANCES (DEFICIT) - END OF YEAR 6,216$ 324,658$ -$ -$ 330,874$ See independent auditors' report. 3-121 Permanent Funds Joint Powers Total Subregion Improvement Total Other One Authority Permanent Governmental Maintenance Abalone Cove Funds Funds -$ -$ -$ 809,535$ - - - 1,787,703 3,197 2,578 5,775 666,447 - - - 78,569 3,197 2,578 5,775 3,342,256 - - - - - - - 25,505 71,110 43,024 114,134 2,215,012 - - - 2,889 - - - 20,000 - - - 171,483 71,110 43,024 114,134 2,434,889 (67,913) (40,446) (108,359) 907,367 70,000 - 70,000 350,570 - - - (1,885,287) 70,000 - 70,000 (1,534,717) 2,087 (40,446) (38,359) (627,350) 773,920 1,333,223 2,107,143 11,748,068 776,007$ 1,292,777$ 2,068,784$ 11,120,718$ 3-122 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, 2011 Variance with Final Budget Positive Original Final Actual (Negative) REVENUES: Revenue from other agencies 49,800$ 49,800$ 47,067$ (2,733)$ Use of money and property 270 270 131 (139) TOTAL REVENUES 50,070 50,070 47,198 (2,872) EXPENDITURES: Public works 50,000 50,000 50,000 - EXCESS (DEFICIENCY) OF REVENUES OVER (UNDER) EXPENDITURES 70 70 (2,802) (2,872) FUND BALANCE - BEGINNING OF YEAR 51,409 51,409 51,409 - FUND BALANCE - END OF YEAR 51,479$ 51,479$ 48,607$ (2,872)$ See independent auditors' report. Budgeted Amounts 3-123 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, 2011 Variance with Final Budget Positive Original Final Actual (Negative) REVENUES: Revenue from other agencies 244,994$ 244,994$ 134,513$ (110,481)$ EXPENDITURES: Capital outlay 262,146 262,146 171,483 90,663 EXCESS (DEFICIENCY) OF REVENUES OVER (UNDER) EXPENDITURES (17,152) (17,152) (36,970) (19,818) OTHER FINANCING USES: Transfers in - 44,000 36,970 (7,030) Transfers out (26,848) - - - NET CHANGE IN FUND BALANCE (44,000) 26,848 - (26,848) FUND BALANCE - BEGINNING OF YEAR - - - - FUND BALANCE - END OF YEAR (44,000)$ 26,848$ -$ (26,848)$ See independent auditors' report. Budgeted Amounts 3-124 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, 2011 Variance with Final Budget Positive Original Final Actual (Negative) REVENUES: Taxes 1,910$ 1,910$ 1,906$ (4)$ Use of money and property 10 10 55 45 TOTAL REVENUES 1,920 1,920 1,961 42 EXPENDITURES: Public works 1,000 1,000 30 970 EXCESS (DEFICIENCY) OF REVENUES OVER (UNDER) EXPENDITURES 920 920 1,931 1,012 FUND BALANCE - BEGINNING OF YEAR 12,850 12,850 12,850 - FUND BALANCE - END OF YEAR 13,770$ 13,770$ 14,781$ 1,012$ See independent auditors' report. Budgeted Amounts 3-125 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, 2011 Variance with Final Budget Positive Original Final Actual (Negative) REVENUES: Revenue from other agencies 576,854$ 576,854$ 578,859$ 2,005$ Use of money and property 360 65,360 65,340 (20) TOTAL REVENUES 577,214 642,214 644,199 1,985 EXPENDITURES: Public works 706,000 686,508 618,860 67,648 EXCESS (DEFICIENCY) OF REVENUES OVER (UNDER) EXPENDITURES (128,786) (44,294) 25,339 69,633 OTHER FINANCING USES: Transfers in 60,000 60,000 - (60,000) NET CHANGE IN FUND BALANCE (68,786) 15,706 25,339 9,633 FUND BALANCE - BEGINNING OF YEAR 100,264 100,264 100,264 - FUND BALANCE - END OF YEAR 31,478$ 115,970$ 125,603$ 9,633$ See independent auditors' report. Budgeted Amounts 3-126 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, 2011 Variance with Final Budget Positive Original Final Actual (Negative) REVENUES: Revenue from other agencies 478,485$ 478,485$ 481,539$ 3,054$ Use of money and property 6,520 24,520 26,871 2,351 TOTAL REVENUES 485,005 503,005 508,410 5,405 OTHER FINANCING USES: Transfers out (500,300) (633,293) (633,293) - NET CHANGE IN FUND BALANCE (15,295) (130,288) (124,883) 5,405 FUND BALANCE - BEGINNING OF YEAR 1,695,558 1,695,558 1,695,558 - FUND BALANCE - END OF YEAR 1,680,263$ 1,565,270$ 1,570,675$ 5,405$ See independent auditors' report. Budgeted Amounts 3-127 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, 2011 Variance with Final Budget Positive Original Final Actual (Negative) REVENUES: Revenue from other agencies 358,865$ 358,865$ 358,897$ 32$ Use of money and property - 6,000 7,887 1,887 TOTAL REVENUES 358,865 364,865 366,784 1,920 OTHER FINANCING USES: Transfers out - (638,080) (9,868) 628,212 NET CHANGE IN FUND BALANCE 358,865 (273,215) 356,916 630,132 FUND BALANCE - BEGINNING OF YEAR 273,216 273,216 273,216 - FUND BALANCE - END OF YEAR 632,081$ 1$ 630,132$ 630,132$ See independent auditors' report. Budgeted Amounts 3-128 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, 2011 Variance with Final Budget Positive Original Final Actual (Negative) REVENUES: Other revenues -$ -$ -$ -$ Use of money and property 299,110 299,110 300,256 1,146 TOTAL REVENUES 299,110 299,110 300,256 1,146 EXPENDITURES: Public works 96,814 96,814 76,376 20,438 EXCESS (DEFICIENCY) OF REVENUES OVER (UNDER) EXPENDITURES 202,296 202,296 223,880 21,584 OTHER FINANCING USES: Transfers out (415,200) (665,700) (165,200) 500,500 NET CHANGE IN FUND BALANCE (212,904) (463,404) 58,680 522,084 FUND BALANCE - BEGINNING OF YEAR 858,102 858,102 858,102 - FUND BALANCE - END OF YEAR 645,198$ 394,698$ 916,782$ 522,084$ See independent auditors' report. Budgeted Amounts 3-129 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, 2011 Variance with Final Budget Positive Original Final Actual (Negative) REVENUES: Revenue from other agencies 25,000$ 47,500$ 69,605$ 22,105$ Use of money and property 155,620 155,620 220,932 65,312 TOTAL REVENUES 180,620 203,120 290,537 87,417 EXPENDITURES: Public works 163,939 186,439 159,599 26,840 EXCESS (DEFICIENCY) OF REVENUES OVER (UNDER) EXPENDITURES 16,681 16,681 130,938 114,257 OTHER FINANCING USES: Transfers out (12,000) (53,000) (53,000) - NET CHANGE IN FUND BALANCE 4,681 (36,319) 77,938 114,257 FUND BALANCE - BEGINNING OF YEAR 230,495 230,495 230,495 - FUND BALANCE - END OF YEAR 235,176$ 194,176$ 308,433$ 114,257$ See independent auditors' report. Budgeted Amounts 3-130 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, 2011 Variance with Final Budget Positive Original Final Actual (Negative) REVENUES: Revenue from other agencies 100,000$ 100,000$ 100,000$ -$ Use of money and property - - 10,517 10,517 TOTAL REVENUES 100,000 100,000 110,517 10,517 EXPENDITURES: Public safety - 25,505 25,505 0 EXCESS (DEFICIENCY) OF REVENUES OVER (UNDER) EXPENDITURES 100,000 74,495 85,012 10,518 OTHER FINANCING USES: Transfers out (100,000) (100,000) (100,000) - NET CHANGE IN FUND BALANCE - (25,505) (14,988) 10,518 FUND BALANCE - BEGINNING OF YEAR 34,920 34,920 34,920 - FUND BALANCE - END OF YEAR 34,920$ 9,415$ 19,932$ 10,518$ See independent auditors' report. Budgeted Amounts 3-131 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, 2011 Variance with Final Budget Positive Original Final Actual (Negative) REVENUES: Taxes 258,687$ 258,687$ 260,454$ 1,767$ Use of money and property 240 240 698 458 TOTAL REVENUES 258,927 258,927 261,152 2,224 EXPENDITURES: Public works 70,300 70,300 13,860 56,440 EXCESS (DEFICIENCY) OF REVENUES OVER (UNDER) EXPENDITURES 188,627 188,627 247,292 58,665 OTHER FINANCING USES: Transfers out (204,000) (204,000) (204,000) - NET CHANGE IN FUND BALANCE (15,373) (15,373) 43,292 58,665 FUND BALANCE - BEGINNING OF YEAR 50,745 50,745 50,745 - FUND BALANCE - END OF YEAR 35,372$ 35,372$ 94,037$ 58,665$ See independent auditors' report. Budgeted Amounts 3-132 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, 2011 Variance with Final Budget Positive Original Final Actual (Negative) REVENUES: Taxes 492,800$ 492,800$ 497,743$ 4,943$ Use of money and property 7,800 7,800 7,113 (687) TOTAL REVENUES 500,600 500,600 504,856 4,256 EXPENDITURES: Public works 506,900 506,900 423,695 83,205 EXCESS (DEFICIENCY) OF REVENUES OVER (UNDER) EXPENDITURES (6,300) (6,300) 81,161 87,462 OTHER FINANCING USES: Transfers out (104,100) (104,100) (67,633) 36,467 NET CHANGE IN FUND BALANCE (110,400) (110,400) 13,528 123,929 FUND BALANCE - BEGINNING OF YEAR 1,639,118 1,639,118 1,639,118 - FUND BALANCE - END OF YEAR 1,528,718$ 1,528,718$ 1,652,646$ 123,929$ See independent auditors' report. Budgeted Amounts 3-133 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, 2011 Variance with Final Budget Positive Original Final Actual (Negative) REVENUES: Use of money and property 1,030$ 1,030$ 473$ (557)$ EXPENDITURES: Public works 141,700 141,700 82,464 59,236 EXCESS (DEFICIENCY) OF REVENUES OVER (UNDER) EXPENDITURES (140,670) (140,670) (81,991) 58,679 OTHER FINANCING SOURCES: Transfers in 101,000 101,000 101,000 - NET CHANGE IN FUND BALANCE (39,670) (39,670) 19,009 58,679 FUND BALANCE - BEGINNING OF YEAR 283,321 283,321 283,321 - FUND BALANCE - END OF YEAR 243,651$ 243,651$ 302,330$ 58,679$ See independent auditors' report. Budgeted Amounts 3-134 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, 2011 Variance with Final Budget Positive Original Final Actual (Negative) REVENUES: Use of money and property 1,010$ 1,010$ 3,991$ 2,981$ EXPENDITURES: Public works 126,411 126,411 126,026 385 EXCESS (DEFICIENCY) OF REVENUES OVER (UNDER) EXPENDITURES (125,401) (125,401) (122,035) 2,596 OTHER FINANCING SOURCES: Transfers in 109,900 109,900 109,900 - NET CHANGE IN FUND BALANCE (15,501) (15,501) (12,135) 2,596 FUND BALANCE - BEGINNING OF YEAR 275,193 275,193 275,193 - FUND BALANCE - END OF YEAR 259,692$ 259,692$ 263,058$ 2,596$ See independent auditors' report. Budgeted Amounts 3-135 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, 2011 Variance with Final Budget Positive Original Final Actual (Negative) REVENUES: Revenue from other agencies 151,000$ 160,641$ -$ (160,641)$ Use of money and property 170 170 83 (87) TOTAL REVENUES 151,170 160,811 83 (160,728) OTHER FINANCING USES: Transfers out (151,000) (160,641) (160,641) - NET CHANGE IN FUND BALANCE 170 170 (160,558) (160,728) FUND BALANCE - BEGINNING OF YEAR 34,162 34,162 34,162 - FUND BALANCE (DEFICIT) - END OF YEAR 34,332$ 34,332$ (126,396)$ (160,728)$ See independent auditors' report. Budgeted Amounts 3-136 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, 2011 Variance with Final Budget Positive Original Final Actual (Negative) REVENUES: Taxes 46,560$ 46,560$ 49,432$ 2,872$ Other revenues - - 1,181 1,181 Use of money and property 280 280 262 (18) TOTAL REVENUES 46,840 46,840 50,875 4,035 EXPENDITURES: Public works 63,206 63,206 45,240 17,966 EXCESS (DEFICIENCY) OF REVENUES OVER (UNDER) EXPENDITURES (16,366) (16,366) 5,635 (13,931) OTHER FINANCING SOURCES: Transfers in 10,700 32,700 32,700 - NET CHANGE IN FUND BALANCE (5,666) 16,334 38,335 (13,931) FUND BALANCE - BEGINNING OF YEAR 58,343 58,343 58,343 - FUND BALANCE - END OF YEAR 52,677$ 74,677$ 96,678$ (13,931)$ See independent auditors' report. Budgeted Amounts 3-137 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, 2011 Variance with Final Budget Positive Original Final Actual (Negative) REVENUES: Use of money and property 1,040$ 1,040$ 791$ (249)$ TOTAL REVENUES 1,040 1,040 791 (249) EXPENDITURES: Park and recreation - 20,000 20,000 - EXCESS (DEFICIENCY) OF REVENUES OVER (UNDER) EXPENDITURES 1,040 (18,960) (19,209) (249) FUND BALANCE - BEGINNING OF YEAR 202,156 202,156 202,156 - FUND BALANCE - END OF YEAR 203,196$ 183,196$ 182,947$ (249)$ See independent auditors' report. Budgeted Amounts 3-138 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, 2011 Variance with Final Budget Positive Original Final Actual (Negative) REVENUES: Use of money and property 10$ 10$ 1,681$ 1,671$ FUND BALANCE - BEGINNING OF YEAR 403,838 403,838 403,838 - FUND BALANCE - END OF YEAR 403,848$ 403,848$ 405,519$ 1,671$ See independent auditors' report. Budgeted Amounts 3-139 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, 2011 Variance with Final Budget Positive Original Final Actual (Negative) REVENUES: Revenue from other agencies 17,223$ 17,223$ 17,223$ -$ Use of money and property - 9,750 9,801 51 TOTAL REVENUES 17,223 26,973 27,024 51 OTHER FINANCING USES: Transfers out (17,223) (26,973) (26,973) - NET CHANGE IN FUND BALANCE - - 51 51 FUND BALANCE - BEGINNING OF YEAR - - - - FUND BALANCE - END OF YEAR -$ -$ 51$ 51$ See independent auditors' report. Budgeted Amounts 3-140 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, 2011 Variance with Final Budget Positive Original Final Actual (Negative) REVENUES: Other revenues 38,600$ 38,600$ 27,384$ (11,216)$ Use of money and property 200 200 2,745 2,545 TOTAL REVENUES 38,800 38,800 30,129 (8,671) EXPENDITURES: Public works - 554,675 212,682 341,993 EXCESS (DEFICIENCY) OF REVENUES OVER (UNDER) EXPENDITURES 38,800 (515,875) (182,553) 333,322 OTHER FINANCING USES: Transfers out (40,000) (86,300) (86,300) - NET CHANGE IN FUND BALANCE (1,200) (602,175) (268,853) 333,322 FUND BALANCE - BEGINNING OF YEAR 684,251 684,251 684,251 - FUND BALANCE - END OF YEAR 683,051$ 82,076$ 415,398$ 333,322$ See independent auditors' report. Budgeted Amounts 3-141 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, 2011 Variance with Final Budget Positive Original Final Actual (Negative) REVENUES: Other revenues -$ -$ -$ -$ Use of money and property 130 130 123 (7) TOTAL REVENUES 130 130 123 (7) FUND BALANCE - BEGINNING OF YEAR 29,205 29,205 29,205 - FUND BALANCE - END OF YEAR 29,335$ 29,335$ 29,328$ (7)$ See independent auditors' report. Budgeted Amounts 3-142 CITY OF RANCHO PALOS VERDES SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL AFFORDABLE HOUSING SPECIAL REVENUE FUND For the year ended June 30, 2011 Variance with Final Budget Positive Original Final Actual (Negative) REVENUES: Use of money and property 40$ 40$ 15$ (25)$ EXPENDITURES: Community development - 5,000 2,889 2,111 EXCESS (DEFICIENCY) OF REVENUES OVER (UNDER) EXPENDITURES 40 (4,960) (2,874) 2,086 FUND BALANCE - BEGINNING OF YEAR 1,773,393 1,773,393 1,773,393 - FUND BALANCE - END OF YEAR 1,773,433$ 1,768,433$ 1,770,519$ 2,086$ See independent auditors' report. Budgeted Amounts 3-143 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, 2011 Variance with Final Budget Positive Original Final Actual (Negative) REVENUES: Use of money and property 30$ 30$ 13$ (17)$ FUND BALANCE - BEGINNING OF YEAR 6,203 6,203 6,203 - FUND BALANCE - END OF YEAR 6,233$ 6,233$ 6,216$ (17)$ See independent auditors' report. Budgeted Amounts 3-144 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, 2011 Variance with Final Budget Positive Original Final Actual (Negative) REVENUES: Other revenues - - 50,004 50,004 Use of money and property 1,520$ 1,520$ 896$ (624)$ TOTAL REVENUES 1,520 1,520 50,900 49,380 EXPENDITURES: Public works 31,366 296,213 292,046 4,167 EXCESS (DEFICIENCY) OF REVENUES OVER (UNDER) EXPENDITURES (29,846) (294,693) (241,146) 53,547 FUND BALANCE - BEGINNING OF YEAR 565,804 565,804 565,804 - FUND BALANCE - END OF YEAR 535,958$ 271,111$ 324,658$ 53,547$ See independent auditors' report. Budgeted Amounts 3-145 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, 2011 Variance with Final Budget Positive Original Final Actual (Negative) REVENUES: Use of money and property 3,800$ 3,800$ 3,197$ (603)$ EXPENDITURES: Public works 79,000 79,000 71,110 7,890 EXCESS (DEFICIENCY) OF REVENUES OVER (UNDER) EXPENDITURES (75,200) (75,200) (67,913) 7,287 OTHER FINANCING SOURCES: Transfers in 70,000 70,000 70,000 - NET CHANGE IN FUND BALANCE (5,200) (5,200) 2,087 7,287 FUND BALANCE - BEGINNING OF YEAR 773,920 773,920 773,920 - FUND BALANCE - END OF YEAR 768,720$ 768,720$ 776,007$ 7,287$ See independent auditors' report. Budgeted Amounts 3-146 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, 2011 Variance with Final Budget Positive Original Final Actual (Negative) REVENUES: Use of money and property 6,500$ 6,500$ 2,578$ (3,922)$ EXPENDITURES: Public works 109,490 109,490 43,024 66,466 EXCESS (DEFICIENCY) OF REVENUES OVER (UNDER) EXPENDITURES (102,990) (102,990) (40,446) 62,544 FUND BALANCE - BEGINNING OF YEAR 1,333,223 1,333,223 1,333,223 - FUND BALANCE - END OF YEAR 1,230,233$ 1,230,233$ 1,292,777$ 62,544$ See independent auditors' report. Budgeted Amounts 3-147 CITY OF RANCHO PALOS VERDES JUNE 30, 2011 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. 3-148 CITY OF RANCHO PALOS VERDES COMBINING STATEMENT OF NET ASSETS INTERNAL SERVICE FUNDS June 30, 2011 Equipment Building Employee Replacement Replacement Benefits Totals CURRENT ASSETS: Cash and investments 2,640,080$ 995,626$ 411,089$ 4,046,795$ Receivables: Interest 2,696 1,015 800 4,511 Prepaid items - - 262,084 262,084 TOTAL CURRENT ASSETS 2,642,776 996,641 673,973 4,313,390 NONCURRENT ASSETS: Capital assets: Property and equipment 1,468,875 - - 1,468,875 Accumulated depreciation (1,215,176) - - (1,215,176) TOTAL NONCURRENT ASSETS 253,699 - - 253,699 TOTAL ASSETS 2,896,475 996,641 673,973 4,567,089 CURRENT LIABILITIES: Accounts payable and accrued liabilities 41,748 5,318 223,622 270,688 Invested in capital assets 253,699 - - 253,699 Unrestricted 2,601,028 991,323 450,351 4,042,702 TOTAL NET ASSETS 2,854,727$ 991,323$ 450,351$ 4,296,401$ See independent auditors' report. ASSETS LIABILITIES NET ASSETS 3-149 CITY OF RANCHO PALOS VERDES COMBINING STATEMENT OF REVENUES, EXPENSES AND CHANGES IN NET ASSETS - INTERNAL SERVICE FUNDS For the year ended June 30, 2011 Equipment Building Employee Replacement Replacement Benefits Totals OPERATING REVENUES: Charges for services 59,100$ -$ 1,795,348$ 1,854,448$ OPERATING EXPENSES: Personnel services - - 1,704,755 1,704,755 Materials and supplies 128,908 - - 128,908 Maintenance 56,876 211,315 - 268,191 Depreciation 121,887 - - 121,887 TOTAL OPERATING EXPENSES 307,671 211,315 1,704,755 2,223,741 OPERATING INCOME / (LOSS)(248,571) (211,315) 90,593 (369,293) NONOPERATING REVENUES: Other revenues 10,100 156,094 - 166,194 Investment income 11,404 4,226 812 16,441 TOTAL NONOPERATING REVENUES 21,504 160,320 812 182,635 CHANGE IN NET ASSETS (227,067) (50,995) 91,404 (186,658) TOTAL NET ASSETS - BEGINNING OF YEAR 3,081,794 1,042,318 358,947 4,483,059 TOTAL NET ASSETS - END OF YEAR 2,854,727$ 991,323$ 450,351$ 4,296,401$ See independent auditors' report. 3-150 CITY OF RANCHO PALOS VERDES COMBINING STATEMENT OF CASH FLOWS INTERNAL SERVICE FUNDS For the year ended June 30, 2011 Equipment Building Employee Replacement Replacement Benefits Totals CASH FLOWS FROM OPERATING ACTIVITIES: Receipts from interfund services provided 59,100$ -$ 1,795,348$ 1,854,448$ Payments to suppliers (186,700) (298,808) (485,508) Payments to employees - - (1,656,215) (1,656,215) NET CASH PROVIDED / (USED) BY OPERATING ACTIVITIES (127,600) (298,808) 139,133 (287,275) CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES: Acquisition and construction of capital assets (112,239) - - (112,239) CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES: Grants received - 156,094 - 156,094 CASH FLOWS FROM INVESTING ACTIVITIES: Interest and dividends 21,995 4,476 166 26,637 NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS (217,844) (138,238) 139,299 (216,784) CASH AND CASH EQUIVALENTS - BEGINNING OF YEAR 2,857,924 1,133,864 271,790 4,263,578 CASH AND CASH EQUIVALENTS - END OF YEAR 2,640,080$ 995,626$ 411,089$ 4,046,794$ RECONCILIATION OF OPERATING LOSS TO NET CASH USED BY OPERATING ACTIVITIES: Operating income / (loss)(248,571)$ (211,315)$ 90,593$ (369,293)$ Adjustments to reconcile operating loss to net cash used by operating activities: Depreciation 121,887 - - 121,887 Changes in operating assets and liabilities: decrease in prepaid items - - (140,217) (140,217) Increase (decrease) in accrued liabilities (916) (87,493) 188,757 100,348 NET CASH USED BY OPERATING ACTIVITIES (127,600)$ (298,808)$ 139,133$ (287,275)$ See independent auditors' report. 3-151 STATISTICAL SECTION 3-152 Pitch Hit & Run 3-153 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 128 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 136 These schedules contain information to help the reader assess the City’s most significant local revenue source, property tax. Debt Capacity 140 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 143 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 146 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. 3-154 20 0 2 2 0 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 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 , n e t o f r e l a t e d d e b t 93 , 6 3 6 $ 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 $ Re s t r i c t e d 10 , 3 2 7 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 Un r e s t r i c t e d 13 , 6 6 6 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 35 , 3 7 6 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 n e t a s s e t s 11 7 , 6 2 9 $ 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 2 , 2 7 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 , n e t o f r e l a t e d d e b t - $ - $ - $ - $ 1 , 3 1 1 $ 2, 1 5 8 $ 5, 5 9 9 $ 12 , 4 7 7 $ 12 , 4 5 8 $ 12 , 7 5 3 $ 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 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 $ 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 93 , 6 3 6 $ 94 , 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 $ Re s t r i c t e d 10 , 3 2 7 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 Un r e s t r i c t e d 13 , 6 6 6 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 38 , 7 4 1 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 7 , 6 2 9 $ 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 $ 16 8 , 3 8 9 $ ( 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 ) 3-155 20 0 2 2 0 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 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, 0 6 9 $ 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 $ Pu b l i c s a f e t y 2, 8 9 8 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 Pu b l i c w o r k s 7, 2 8 3 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 Pa r k s a n d r e c r e a t i o n 68 7 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 Co m m u n i t y d e v e l o p m e n t 1, 9 1 6 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 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 3 27 2 27 0 27 1 27 0 26 8 26 5 26 0 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 16 , 1 2 6 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 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 o o d P r o t e c t i o n - - - - 4 7 27 1 30 1 43 7 58 0 48 9 To t a 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 16 , 1 2 6 $ 17 , 5 9 4 $ 17 , 5 0 2 $ 20 , 1 8 2 $ 21 , 1 1 3 $ 23 , 2 8 5 $ 22 , 2 0 2 $ 26 , 1 5 2 $ 31 , 2 4 0 $ 25 , 4 8 3 $ 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 15 7 $ 87 $ 69 $ 62 $ 35 $ 29 $ 53 8 $ 55 5 $ 68 1 $ 65 4 $ Pu b l i c s a f e t y 43 3 23 5 16 5 16 3 22 4 33 2 31 6 26 7 22 9 26 1 Pu b l i c w o r k s 78 25 2 21 7 13 1 37 18 5 1, 0 0 2 42 2 1, 3 5 6 62 2 Pa r k s a n d r e c r e a t i o n 10 8 6 41 45 51 48 3 48 3 89 6 45 7 Co m m u n i t y d e v e l o p m e n t 97 9 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 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 6, 8 7 7 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 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 70 6 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 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 9, 2 4 0 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 Bu s 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 o o 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 9, 2 4 0 $ 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 $ 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 (6 , 8 8 6 ) $ (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 ) $ 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 ) 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 (6 , 8 8 6 ) $ (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 ) $ ( 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 ) 3-156 20 0 2 2 0 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 ( 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, 2 5 3 $ 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 $ Fr a n c h i s e t a x e s 1, 1 3 9 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 Sa l e s t a x e s 1, 0 9 3 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 Ut i l i t y u s e r t a x e s 1, 8 1 2 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 Ot h e r t a x e s 2, 7 4 4 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 In v e s t m e n t i n c o m e 81 4 37 1 33 1 59 4 99 7 1, 6 1 5 1, 5 5 5 63 1 20 7 31 8 Ot h e r (6 7 ) 51 7 2, 4 8 1 1, 2 8 3 79 3 2, 1 0 1 30 0 22 5 30 7 27 1 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 g o v e r n m e n t a l a c t i v i t i e s 12 , 7 8 8 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 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 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 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 To t a l p r i m a r y g o v e r n m e n t 12 , 7 8 8 $ 13 , 6 4 0 $ 15 , 7 1 6 $ 16 , 7 4 6 $ 17 , 0 4 5 $ 21 , 0 3 7 $ 20 , 0 9 9 $ 19 , 7 2 0 $ 21 , 2 4 2 $ 23 , 0 0 2 $ 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 5, 9 0 2 $ 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 $ 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 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 5, 9 0 2 $ 93 2 $ 2, 9 0 7 $ 5, 4 0 1 $ 1 8 , 7 8 5 $ 4, 4 6 5 $ 7, 0 3 8 $ 54 3 $ 8, 7 4 0 $ 4, 9 2 1 $ 3-157 Utility Fiscal Property Franchise Sales Users Other Year Tax Tax Tax Tax Taxes Total 2002 5,253$ 1,139$ 1,093$ 1,812$ 2,744$ 12,041$ 2003 5,335 1,087 1,003 1,832 3,495 12,752 2004 5,706 1,275 1,205 1,851 2,867 12,904 2005 5,840 1,307 1,276 1,901 4,545 14,869 2006 9,621 1 1,454 1,214 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 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 3-158 20 0 2 2 0 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, 5 7 1 $ 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 7, 2 3 4 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 1 0 , 4 4 0 10 , 7 4 5 To t a l G e n e r a l F u n d 13 , 8 0 5 $ 1 6 , 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 11 , 2 5 6 $ 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 4, 7 5 3 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 33 2 5 3 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 44 3 2 46 0 4 1 8 4 2 6 3 2 9 32 5 37 1 3 6 2 33 3 De b t S e r v i c e F u n d (1 0 , 4 7 7 ) 3 (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 6, 3 0 7 $ 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 N i n e 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 ) 3-159 20 1 1 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 $ 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 To t a l G e n e r a l F u n d 18 , 9 0 0 $ 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 $ 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 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 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 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 Pe r m a n e n t F u n d - Un a s s i g h e d Sp e c i a l R e v e n u e F u n d s (1 2 6 ) 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 $ ( 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 C u r r e n t O n e 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 ) 3-160 20 0 2 2 0 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 Re v e n u e s Ta x e s 10 , 6 7 7 $ 11 , 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 $ Li c e n s e s a n d p e r m i t s 1, 2 4 5 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 Fi n e s a n d f o r f e i t u r e s 11 7 11 5 10 2 10 8 17 1 23 7 26 0 21 4 17 9 21 0 Us e o f m o n e y a n d p r o p e r t y 1, 1 5 3 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 Ch a r g e s f o r s e r v i c e s 21 7 20 5 37 9 15 2 49 61 60 1 6 3 81 73 Re v e n u e s f r o m o t h e r a g e n c i e s 8, 1 7 0 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 Ot h e r R e v e n u e s 56 3 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 To t a l R e v e n u e s 22 , 1 4 2 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 Ex p e n d i t u r e s Ad m i n i s t r a t i o n 2, 9 1 5 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 Pu b l i c S a f e t y 2, 8 9 8 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 Pu b l i c W o r k s 7, 4 4 9 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 Pa r k s a n d R e c r e a t i o n 66 9 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 Co m m u n i t y D e v e l o p m e n t 1, 9 5 0 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 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 10 2 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 8, 2 4 6 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 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 In t e r e s t 93 0 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 To t a l E x p e n d i t u r e s 25 , 1 5 9 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 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 (3 , 0 1 7 ) (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 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 4, 2 9 4 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 Tr a n s f e r s o u t (4 , 8 7 7 ) (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 ) 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 ) (5 8 3 ) (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 Ne t c h a n g e i n F u n d B a l a n c e s (3 , 6 0 0 ) $ (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 $ Co s t o f A s s e t s C a p i t a l i z e d 1 11 , 0 4 7 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 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 1 6. 6 % 5 . 5 % 5 . 2 % 6 . 0 % 7 . 1 % 7 . 7 % 8 . 3 % 6 . 4 % 4 . 9 % 5 . 8 % 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 3-161 Utility Fiscal Property Franchise Sales Users Other Year Tax Tax Tax Tax Taxes Total 2002 4,972 1,139 1,093 1,812 1,661 10,677 2003 5,335 1,087 1,003 1,832 1,789 11,046 2004 5,706 1,275 1,205 1,851 2,044 12,081 2005 8,494 1 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 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 3-162 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 n d 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 e r 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 2 5 , 4 1 0 , 4 7 0 $ 73 , 9 2 3 $ - $ 1 9 7 , 9 0 4 $ 19 , 6 4 1 $ 71 , 6 6 0 $ 5, 7 0 1 , 9 3 8 $ 0. 0 7 8 6 9 7, 5 8 8 , 4 2 4 $ 1. 3 3 0 8 5 7 5 . 1 4 % 20 0 3 5 , 7 3 0 , 4 6 4 7 0 , 4 7 5 - 1 9 1 , 5 4 1 2 1 , 7 4 1 7 3 , 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 % So u r c e : 2 0 1 0 - 1 1 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 *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 o u 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 r p 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 ) 3-163 20 0 1 - 0 2 2 0 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 Ba s i c C i t y a n d C o u n t y L e v y C I T Y D I R E C T R A T E 0 . 0 7 8 6 9 0 . 0 7 3 1 7 0 . 0 7 8 9 7 0 . 0 6 4 0 0 0 . 0 6 4 0 0 0 . 0 6 3 7 0 0 . 0 7 9 3 0 0 . 0 7 9 6 0 0 . 0 6 3 7 0 0 . 0 6 3 7 0 C O U N T Y D I R E C T R A T E 0 . 9 2 1 3 1 0 . 9 2 6 8 3 0 . 9 2 1 0 3 0 . 9 3 6 0 0 0 . 9 3 6 0 0 0 . 9 3 6 3 0 0 . 9 2 0 7 0 0 . 9 2 0 4 0 0 . 9 3 6 3 0 0 . 9 3 6 3 0 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 Ov e r r i d e A s s e s s m e n t s C O U N T Y 0 . 0 0 1 1 3 0 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 U N I F I E D S C H O O L S 0 . 0 6 3 6 1 0 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 C O M M N T Y C O L L E G E 0 . 0 1 6 0 0 0 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 P A L O S V E R D E S L I B 0 . 0 0 9 5 9 0 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 F L O O D C O N T R O L 0 . 0 0 1 0 7 0 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 M E T R O W A T E R D I S T 0 . 0 0 7 7 0 0 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 TO T A L 0. 0 9 9 1 0 0 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 TO T A L T A X R A T E 1 . 0 9 9 1 0 0 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 2. I n 1 9 7 8 , C a l i f o r n i a v o t e r s p a s s e d P r o p o s i t i o n 1 3 w h i c h s e t t h e p r o p e r t y t a x a t a 1 . 0 0 % f i x e d a m o u n t . T h i s 1 . 0 0 % i s s h a r e d by a l l t h e t a x i n g a g e n c i e s f o r w h i c h t h e s u b j e c t p r o p e r t y r e s i d e s w i t h i n . I n a d d i t i o n t o 1 . 0 0 % f i x e d a m o u n t , p r o p e r t y o w n e r s ar e c h a r g e d t a x e s a s a p e r c e n t a g e o f a s s e s s e d p r o p e r t y v a l u e s f o r t h e p a y m e n t o f a n y v o t e r a p p r o v e d b o n d s . Ci t y o f R a n c h o P a l o s V e r d e s Di r e c t a n d O v e r l a p p i n g P r o p e r t y T a x R a t e 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 0 9 - 1 0 & 2 0 0 6 - 0 7 C o u n t y A u d i t o r / C o n t r o l l e r d a t a , M u n i S e r v i c e s , L L C 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 1. C i t y h a s n o s e p a r 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 e r a t i n g . 3-164 Percentage of Percentage of Taxable Total City Taxable Taxable Total City Taxable Taxpayer Value ($) Rank Value (%)Value ($) Rank Value (%) Long Point Development LLC 329,854,761$ 1 3.58% VHPS LLC 65,196,557$ 2 0.71% PPC Villas RPV LLC 63,710,973 3 0.69% PV Victoria Apartments LLC 46,703,821 4 0.51% Terraces Rancho Palos Verdes LLC 35,148,602 5 0.38% Western Riviera Investors 28,468,344 6 0.31% PPC Palos Verdes LLC 25,972,775 7 0.28% Golden Cove LLC 25,948,345 8 0.28% COX Communication Inc. Orange 23,912,452 9 0.26% Belmont Village PRV LP 22,232,551 10 0.24% Johnson Eric C 18,233,759 11 0.20% Tridiamond LLC 13,311,514 12 0.14% York Point View Properties LLC 9,577,246 13 0.10% Kariger Brian P 8,330,210 14 0.09% Victoria Apartments 7,763,471 15 0.08% Palos Verdes Terrace Ltd 7,605,139 16 0.08% Ruffin Phillip G 7,575,000 17 0.08% Saitta Christopher L 6,557,865 18 0.07% Amdan Investment LLC Lessee 6,550,000 19 0.07% Gerts Igor & Anna 6,458,000 20 0.07% Labarba James G 6,087,262 21 0.07% Imbach Scott A & Diane Y 5,977,923 22 0.06% Clow Leland E Ilene F 5,836,697 23 0.06% HSU Tong H 5,822,885 24 0.06% 500 Silver Spur Rd LLC 5,590,000 25 0.06% Ocean Trails LP 57,333,287 1 1.02% P V Victoria Apartments LLC 40,015,225 2 0.71% Connecticut General Life 27,538,295 3 0.49% RPV Associates LLC 25,690,073 4 0.46% Western Riviera Investors 24,367,914 5 0.44% York Long Point Associates 21,578,933 6 0.39% P V Terraces Inc.16,595,400 7 0.30% Gardner Theodore II 13,438,441 8 0.24% Salvation Army 11,314,664 9 0.20% MVI Corp 8,070,240 10 0.14% Braun William 6,720,000 11 0.12% Victoria Apartments 6,653,137 12 0.12% Donahue Schriber Realty Group 5,826,240 13 0.10% LA Barba James G Co TR 5,214,572 14 0.09% Foster Robert D & Gina D 4,723,236 15 0.08% Briles Richard & Keanna 4,590,000 16 0.08% Bradford Edward T & Paullee G 4,447,436 17 0.08% Moshfeghi Mehran 4,268,000 18 0.08% Levine Irving 4,073,397 19 0.07% Archdiocese of L A EDUC 3,998,204 20 0.07% Marino Joseph C & Kimberly 3,860,000 21 0.07% Hill John W Elizabeth d TRS 3,758,891 22 0.07% Pemba Properties INC 3,751,407 23 0.07% Michigami Michael M & Sharon W 3,665,000 24 0.07% Palos Verdes Office Partners L 3,621,000 25 0.06% Totals 788,426,152$ 8.55% 315,112,992$ 5.63% Total Taxable Value 9,219,001,000$ 100.00% 5,596,637,882$ 100.00% Source: Los Angeles County Assessor data, MuniServices, LLC 2010-11 2001-02 City of Rancho Palos Verdes Principal Property Tax Payers Last Fiscal Year and Nine Years Ago 3-165 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 S u 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 7 99 . 5 5 % 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 % 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 S i x 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 ) 3-166 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 r i m a r y Pe 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 2 5, 4 5 5 3, 1 1 1 8, 5 6 6 20 3 . 9 4 0. 1 1 % 0 . 0 0 0 4 4 0 5 % 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 % 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 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 ) 3-167 Total Debt City’s Share of DIRECT AND OVERLAPPING TAX AND ASSESSMENT DEBT:6/30/2011 % Applicable (1)Debt 6/30/11 Los Angeles County Flood Control District $53,795,000 1.030% $554,089 Metropolitan Water District 227,670,000 0.515% 1,172,501 Los Angeles Community College District 3,536,745,000 1.775% 62,777,224 Los Angeles Unified School District 11,596,250,000 0.213% 24,700,013 Palos Verdes Unified School District 80,877,350 47.510% 38,424,829 City of Rancho Palos Verdes - 0.000%- Palos Verdes Library District 6,520,000 50.084% 3,265,477 Los Angeles County Regional Park and Open Space Assessment District 197,285,000 1.005% 1,982,714 TOTAL DIRECT AND OVERLAPPING TAX AND ASSESSMENT DEBT 132,876,847 OVERLAPPING GENERAL FUND DEBT: Los Angeles County General Fund Obligations $1,496,977,755 1.005% $15,044,626 Los Angeles County Superintendent of Schools Certificates of Participation 12,204,890 1.005% 122,659 Los Angeles County Sanitation District No. 5 Authority 54,005,754 11.038% 5,961,155 Los Angeles County South Bay Cities Sanitation District Authority 9,201,462 4.486% 412,778 Los Angeles Unified School District Certificates of Participation 492,042,567 0.213% 1,048,051 TOTAL GROSS OVERLAPPING GENERAL FUND DEBT $22,589,269 Less: Los Angeles County General Fund Obligations supported by landfill revenues 178,944 Los Angeles Unified School District QZABs supported by investment fund 70,192 TOTAL NET OVERLAPPING GENERAL FUND DEBT 22,340,133 GROSS COMBINED TOTAL DEBT $155,466,116 (2) NET COMBINED TOTAL DEBT $155,216,980 (1) Percentage of overlapping agency's assessed valuation located within boundaries of the city. (2) Excludes tax and revenue anticipation notes, revenue, mortgage revenue and tax allocation bonds and non-bonded capital lease obligations. 2010-11 Assessed Valuation:9,296,593,686 Redevelopment Incremental Valuation:114,791,856 Adjusted Assessed Valuation:$9,181,801,830 Ratios to 2010-11 Assessed Valuation : Direct Debt 0.00% Total Direct and Overlapping Tax and Assessment Debt 1.43% Ratios to Adjusted Assessed Valuation : Gross Combined Total Debt 1.69% Net Combined Total Debt 1.69% STATE SCHOOL BUILDING AID REPAYABLE AS OF 6/30/11: $0 Source: 2010-11 California Municipal Statistical Co. City of Rancho Palos Verdes Direct and Overlapping Governmental Activities Debt Current Year 3-168 20 0 2 2 0 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 D e b t L i m i t 8 5 5 , 2 9 1 $ 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 $ 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 8 5 5 , 2 9 1 $ 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 $ 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 , 2 1 9 , 0 0 1 $ 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 , 3 8 2 , 8 5 0 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 , 3 8 2 , 8 5 0 $ 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 ) 3-169 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 1 - 0 2 42 , 0 0 2 1, 9 4 4 , 4 4 0 , 5 8 8 46 . 2 9 4 44 . 7 - - - - - 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 0 % 2. 5 0 % 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 0 % 4. 0 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 0 % 4. 1 0 % 9, 8 5 8 , 9 8 9 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 0 - 1 1 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 . 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 a n d 2 0 1 1 p u b l i s h e d i n t h i s r e p o r t mi g ht b e n o 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 3-170 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 Asaka Japanese Cuisine Restaurants California Do It Center Bldg.Matls-Retail Carl's Jr. Restaurant Restaurants Carls Jr Restaurant Restaurant Centinela Feed & Pet Supplies Inc Miscellaneous Retail Chevron Service Stations Service Stations Chevron Service Stations Service Stations Cocos Restaurants Inc Restaurants Coco's Restaurants, Inc.Restaurants Discount Tire Auto Parts/Repair Daniel J Jeldum Miscellaneous Retail El Pollo Loco Inc Restaurant Denny's Restaurant Restaurants Fedex Office Miscellaneous Retail El Pollo Loco Inc.Restaurants Golden Cove Unocal 76 Svc Stn Service Stations Good Night Mattress Furniture/Appliance Golden Lotus Restaurant Restaurants Green Hills Memorial Park,Inc. Miscellaneous Other Green Hills Memorial Park Inc Miscellaneous Other Green Hills Mrtury-Memrl.Chapel Miscellaneous Other Green Hills Mrtury-Memrl.Chapel Miscellaneous Other Hughes Markets Food Markets Hughes Markets Food Markets Kragen Auto Parts# 1649 Auto Parts/Repair Jack In The Box Restaurant Los Verdes Country Club Restaurants Kragen Auto Parts Auto Parts/Repair Marshalls #1026 Apparel Stores Los Verdes Country Club Restaurants Mobil Service Stations Service Stations Marie Callender Restaurant Restaurants Rolling Hills Plastics, Inc Light Industry Mobil Service Stations Service Stations Smart & Final # 306 Food Markets New York Food & Catering Restaurants Swank Audio Visuals Office Equipment Ocean Trails Golf Club Restaurants Terranea Resort Restaurants Salvation Army Furniture/Appliance Trader Joe's Food Markets The Brixey Corporation Office Equipment VH Property Corp.Miscellaneous Retail Trader Joe's Food Markets 2010-11 2001-02 Source: SBOE data, MuniServices, LLC Top Sales Tax Producers listed in alphabetical order. City of Rancho Palos Verdes Principal Sales Tax Payers Last Fiscal Year and Nine Years Ago 3-171 2011 2008 Percentage Percentage of Total City of Total City Employer Employees Rank Employment Employees Rank Employment Palos Verdes Peninsula Unified School District (1)1,970 1 9.75% Terranea Resort Hotel 730 2 3.61% Trump National 300 3 1.49% Marymount College 195 4 0.97% Ralphs 115 5 0.57% Keller Williams Realty 112 6 0.55% Belmontcorp Ltd 94 7 0.47% Green Hills Memorial Park 85 8 0.42% American Golf Corp 70 9 0.35% Trader Joe's 54 10 0.27% Palos Verdes Peninsula Unified School District (1)1970 1 9.00% Trump National 300 2 1.37% Marymount College 195 3 0.89% Ralphs 115 4 0.53% Keller Williams Realty 112 5 0.51% Belmontcorp Ltd 94 6 0.43% Green Hills Memorial Park 85 7 0.39% American Golf Corp 70 8 0.32% St. John Fishers 50 9 0.23% Bally Total Fitness Corp 50 10 0.23% Subtotal of Principal Employers 3,725 18.44% 3,041 13.89% Total City Employment (2)20,200 21,900 Source: Direct Contact with Local Businesses. 2: Total City Employment provided by EDD Labor Force Data. Note: There is currently no agency or service that monitors employees by business located within City limits. All available information is for the greater Los Angeles area. The City is primarily a bedroom community with very little commercial activity. Data was obtained by making inquiries with the Community Development Department and the City Manager's office to determine the entities that are likely the largest employers. Then those likely employers were contacted directly to determine the number of employees. This data is not available prior to 2007. City of Rancho Palos Verdes Principal Employers Current Year and Three Years Ago 1: The number shown represents the total employee count for the entire District. The District does not track employees by location. 3-172 20 0 2 2 0 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 Fu n c t i o n Ge n e r a l G o v e r n m e n t 4 2 4 5 4 5 4 5 4 7 5 0 5 5 5 8 5 3 5 4 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 0 1 1 1 9 1 8 To t a l 52 5 5 5 5 5 5 5 7 6 0 6 5 6 9 7 2 7 2 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 3-173 20 0 2 2 0 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 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 4 - 5 4 4 4 8 4 9 5 Wo r k e r s C o m p e n s a t i o n C l a i m s 3 2 2 3 4 2 4 2 5 3 Li a b i l i t y C l a i m s 14 14 14 18 31 14 16 13 13 14 Bu d g e t A d j u s t m e n t s 35 30 27 36 48 32 26 18 21 17 Bu s i n e s s L i c e n s e s I s s u e d 1, 6 0 0 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 We b S i t e P a g e V i e w s 88 , 8 8 8 1 1 9 , 1 0 4 13 3 , 4 8 1 22 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 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 3 8 12 2 12 2 10 1 12 0 13 9 12 3 10 2 11 0 11 0 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 ) 51 % 5 7 % 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 Pa v e m e n t R a t i n g 80 80 89 89 82 82 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 1, 0 2 2 91 5 82 5 78 0 93 7 77 0 69 2 82 5 69 0 58 0 Cl a s s M e e t i n g s a t P a r k s 1, 7 7 4 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 Do c e n t L e d N a t u r e H i k e s 54 45 80 65 62 98 91 10 5 10 3 10 5 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, 2 6 4 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 Pl a n C h e c k s 12 1 15 0 18 6 20 8 16 3 16 4 24 7 22 6 15 4 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 13 8 20 3 21 4 18 0 15 9 16 2 21 6 33 9 13 8 37 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 i v 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 0 6 , 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 Fi s c a l Y e a r 3-174 20 0 2 2 0 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 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 D N A 8 1 8 1 8 5 9 1 9 2 1 0 1 92 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 1 4 3 1 4 3 1 4 3 1 4 3 1 4 3 14 3 1 4 3 1 4 3 1 4 3 Tr a f f i c S i g n a l s 14 1 5 1 5 1 5 1 5 1 5 16 1 6 16 16 Pa r k s a n d R e c r e a t i o n Pa r k s 15 1 5 1 5 1 5 1 6 1 6 16 1 6 15 15 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 3 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 c i 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 Fi s c a l Y e a r 3-175