CC SR 20210216 D - CAFR FY 2019-2020
CITY COUNCIL MEETING DATE: 02/16/2021
AGENDA REPORT AGENDA HEADING: Consent Calendar
AGENDA TITLE:
Consideration and possible action to receive and file the FY 2019-2020 Comprehensive
Annual Financial Report (CAFR) of the City of Rancho Palos Verdes and the City’s
financial audit letters.
RECOMMENDED COUNCIL ACTION:
(1) Receive and file the FY 2019-2020 CAFR of the City of Rancho Palos Verdes.
(2) Receive and file the FY 2019-2020 Statements on Auditing Standards (SAS) 114
Letter from Independent Auditors to Those Charged with Governance.
(3) Independent Auditors’ Report on Internal Control over Financial Reporting,
Compliance and other Matters (GAS Letter).
FISCAL IMPACT: N/A
Amount Budgeted: N/A
Additional Appropriation: N/A
Account Number(s): N/A
ORIGINATED BY: Vina Ramos, Deputy Director of Finance
REVIEWED BY: Trang Nguyen, Director of Finance
APPROVED BY: Ara Mihranian, AICP, City Manager
ATTACHED SUPPORTING DOCUMENTS:
A. FY 2019-2020 CAFR (page A-1)
B. SAS 114 Letter from Independent Auditors to Those Charged with
Governance (page B-1)
C. Government Auditing Standards (GAS) Letter from Independent Auditors
on Internal Control and Compliance (page C-1)
BACKGROUND:
The CAFR provides a narrative overview and analysis of the City’s financial activities for
the fiscal year ending on June 30, 2020. The CAFR is prepared in conformity with
Generally Accepted Accounting Principles (GAAP) and Governmental Accounting Board
(GASB) requirements. In accordance with GASB’s standards, at the end of August (60
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days after year-end), invoices for the fiscal year must be paid and revenues (taxes) for
the fiscal year must be received. Subsequently, the financials are completed by the end
of September.
Before the issuance of FY 2019-2020 CAFR, in October 2020, the CAFR was audited
by CliftonLarsonAllen LLP (CLA), a firm of licensed certified public accountants
(formerly known as WNDE - White Nelson Diehl Evans LLP). The goal of the
independent audit was to provide reasonable assurance that the City’s financial
statements for the fiscal year ended June 30, 20 20 are free of material misstatement.
On January 15, 2021, CLA issued an unmodified (clean) opinion stating that the City’s
financial statements are fairly presented in conformity with GAAP.
Pursuant to the City Council Policy No.44, Audit Committee is established as a
subcommittee of the City Council, comprised of two members of the City Council
appointed annually by the Mayor. The purpose of the Subcommittee is to review and
oversee the independent audit of the City’s financial statements. On February 5, 2021,
City Staff, including Director of Finance Trang Nguyen and audit partner Robert
Callanan, met and briefed the current subcommittee, comprised of Mayor Alegria and
Mayor Pro Tem Bradley.
DISCUSSION
Overview of the CAFR
The City’s CAFR includes the following major sections and information:
➢ Introductory Section: Letter of Transmittal prepared by the City’s management
➢ Financial Section: Independent Auditors’ Report
➢ Management’s Discussion & Analysis (MD&A): analytical overview of the
City’s financial prepared by the Finance Department
➢ Basic Financial Statements: information on City’s finances from July 1, 2019
through June 30, 2020
➢ Required Supplementary and Supplementary Information: information on
pension and the breakout of the individual funds
➢ Statistical Section: historical financial trends
Financial Highlights
The City’s government-wide financial statements are designed to provide readers with a
broad overview of the City’s finances. The financial statements combine the
Governmental activities for the purpose of presenting an overall picture of the financial
position and results of operations of the government. The Governmental activities are
the City’s General Fund, Capital Improvement Fund, and Special Revenue Funds.
The following are financial highlights of FY 2019-2020:
➢ The assets and deferred outflows of resources of the City exceeded its liabilities
and deferred inflows of resources by $219.5 million (Net Position).
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➢ The City’s total Net Position decreased by $4.0 million from the prior year primarily
due to the increase of capital assets being depreciate d and the decrease of the
unrestricted fund balance from the completed projects.
➢ The General Fund reported an increase in fund balance in the amount of $1 million.
The increase is primarily due to higher inflow of revenues over expenditures.
➢ The unassigned fund balance for the General Fund was $21.3 million or 82% of
the General Fund expenditures. Of this amount, $20.8 million constitutes the City
Council’s General Fund Reserve (rainy day fund).
➢ As a result of the City Council’s reserve policy, the unassigned fund balance has
historically been maintained at or above the policy threshold level of 50% of
annually budgeted General Fund expenditures. At the end of the current fiscal
year, the unassigned fund balance of $21.3 million is 75% of the General Fund
expenditures including transfers of $28.5 million.
Furthermore, the Statement of Net Position presents the City’s investments in capital
assets, restricted funds, and unrestricted funds. Of the $2 19.5 million of Net Position,
$156.8 million is net invested in capital assets, $22.2 million is restricted for approved
carryover projects in the Capital Improvement Fund and Special Revenue Funds, $1.9
million is restricted for the Improvement Authority, Subregion One, and Natural
Communities Conservation Plan (NCCP). The remaining $38.6 million is unrestricted,
which may be used to meet the City’s ongoing obligations to its citizens and creditors.
The summary of the City’s Net Position is illustrated below:
Additional details on the City’s Statement of Net Position is on page 19 and pages 50-
52 of the CAFR (Attachment A).
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General Fund Balance Results
The General Fund is the chief operating fund of the City of Rancho Palos Verdes. At the
end of the fiscal year, the unassigned fund balance of the General Fund is $21.3 million,
while total Fund Balance reached $21.7 million. 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 75% of total General Fund uses, while to tal Fund Balance represents 76% of
the same amount.
The fund balance of the City’s General Fund increased by $1 million from the prior year.
The increase is due to the higher inflow of revenues and the department wide personnel
and non-personnel savings. The financial year-end details were previously presented to
the City Council on December 15, 2020. The following table is a General Fund summary
of the Statement of Revenues, Expenditures, and Changes in Fund Balance from page s
25-26 of the CAFR.
General Fund Results FY 2019-2020
Other Information
GASB 68 (Pension)
In June 2015, the GASB approved Statement No.68 with the objective to improve
accounting and financial reporting by the state and local governments with respect to
pensions. State and local agencies are required to recognize applicable pension
amounts as a liability in their financial statements (Balance Sheet), and also provide
extensive footnote disclosures and additional supplementary schedules related to their
pension plan.
General Fund
Revenues 29,224,005$
Less: Operating Expenditures (25,988,091)$
Excess of Revenues Over Expenditures 3,235,914$
Transfers (2,275,752)$
Net Change in Fund Balance 960,162$
Fund Balance - Beginning of Year 20,788,547$
General Fund Balance 6/30/20 21,748,709$
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The City’s net pension liability for the Miscellaneous Plan is measured as the
proportionate share of the net pension liability of the collective cost-sharing plan. The
City’s net pension liability of the Plan is measured as of June 30, 201 9, and the total
pension liability for the Miscellaneous Plan used to calculate the net pension liability
was determined by an actuarial valuation as of June 30, 2018, rolled forward to June
30, 2019, using standard update procedures. The City’s proportion of the net pension
liability was based on a projection of the City’s long -term share of contributions to the
pension plans relative to the projected contributions of all participating employers,
actuarially determined.
As of June 30, 2020, the City reported a liability of $11.9 million for its proportionate
share of the net pension liability, an increase of $1 million from the previous year. The
increase is based on actuarial methods and assumptions including discount rate,
investment results, amortization, inflation, proportionate share of aggregate employer
contributions, mortality rate, and post-retirement benefits.
Additional detailed information on City’s Pension Liability is on pages 52-56 and pages
65-66 of the CAFR (Attachment A).
ADDITIONAL INFORMATION:
Independent’s Audit Report
On January 15, 2021, CLA issued an unmodified (clean) opinion of the City’s FY 2019-
2020 financial statements (Attachment A, pages 1-3). A clean opinion certifies that the
City’s FY 2019-2020 CAFR meets the standards and requirements established by
GASB for presentation of financial data, note disclosure, and statistical information.
Additionally, the auditors are required to issue a report on internal controls over financial
reporting and on compliance and other matters base on an audit of the financial
statements in accordance with Government Auditing Standards (GAS). This is called
the “GAS Letter” (Attachment B). This is the letter that would report any material
weaknesses or significant deficiencies identified during the course of the audit. As
stated in the report, CLA did not identify any deficiencies in internal control that they
considered to be material weaknesses during their audit.
If other matters are identified that warrant a recommendation, a separate letter is issued
referred to as a “Management Recommendation Letter”. For the FY 2019-2020 audit, no
Management Recommendation Letter was issued.
Staff submitted the CAFR to the Government Finance Officers Association (GFOA) for
the Certificate of Achievement for Excellence in Finance Reporting. In order to be
awarded a Certificate of Achievement, a government must publish an easily readable
and efficiently organized CAFR. This report must satisfy both generally accepted
accounting principles and applicable legal requirements. If awarded, it will be the City’s
27th consecutive year to receive the award.
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The CAFR book will be available at City Hall and online on the City’s Transparency
webpage at http://www.rpvca.gov/286/Comprehensive-Annual-Financial-Report-CA.
ALTERNATIVES:
In addition to the Staff recommendation, the following alternative actions are available
for the City Council’s consideration:
1. Take other action, as deemed appropriate.
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CALIFORNIA
CITY OF RANCHO PALOS
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CITY OF RANCHO PALOS VERDES, CALIFORNIA
COMPREHENSIVE ANNUAL FINANCIAL REPORT
YEAR ENDED JUNE 30, 2020
Prepared by:
Finance Department
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INTRODUCTORY SECTION
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CITY OF RANCHO PALOS VERDES, CALIFORNIA
Comprehensive Annual Financial Report
For the Fiscal Year Ended June 30, 2020
Table of Contents
INTRODUCTORY SECTION
Table of Contents
Letter ofTransmittal
Directory of Officials
Organizational Chart
GFOA Certificate of Achievement for Excellence in Financial Reporting
FINANCIAL SECTION
Independent Auditors' Report
Management's Discussion and Analysis
Government-Wide Financial Statements
Statement ofNet Position
Statement of Activities
Fund Financial Statements
Government Funds
Balance Sheet
Reconciliation of the Governmental Funds Balance Sheet to the
Statement ofNet Position
Statement of Revenues, Expenditures and Changes in Fund Balances
Reconciliation of the Statement of Revenues, Expenditures and Changes in
Fund Balances of Governmental Funds to the Statement of Activities
General Fund
Statement of Revenues, Expenditures and Changes in Fund Balance -
Budget and Actual
Proprietary Fund s
Statement of Net Position
Statement of Revenues, Expenses and Changes in Net Position
Statement of Cash Flows
Fiduciary Funds
Statement of Fiduciary Net Position
Statement of Changes in Fiduciary Net Position
Notes to the Financial Statements
Required Supplementary Information
Schedule of Proportionate Share of the Net Pension Liability
Schedule of Pension Contributions
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CITY OF RANCHO PALOS VERDES, CALIFORNIA
Comprehensive Annual Financial Report
For the Fiscal Year Ended June 30, 2020
Table of Contents
FINANCIAL SECTION (CONTINUED)
Supplementary Information
Non-Major Governmental Funds
Description of Special Revenue Funds
Combining Balance Sheet
Combining Statement of Revenues, Expenditures and Changes in
Fund Balances
Schedule of Revenues, Expenditures and Changes in Fund Balances -
Budget and Actual:
Special Revenue Funds
Gas Tax Fund
1972 Act Fund
El Prado Fund
1911 Act Fund
Waste Reduction Fund
Air Quality Management Fund
Proposition C Fund
Proposition A Fund
Public Safety Grants Fund
Measure R Fund
Measure A Fund
Measure M Fund
Abalone Cove Sewer Assessment Fund
Dr. Allen and Charlotte Ginsburg Cultural Arts Building Fund
Donor Restricted Contributions Fund
Joint Powers Improvement Authority -Portuguese Bend Fund
Community Development Block Grant Fund
Federal Grants
State Grants
Quimby Fund
Environmental Excise Tax Fund
Capital Projects Fund
Low-Moderate Income Capital Projects Fund
Affordable Housing In-Lieu Capital Projects Fund
Permanent Funds
Habitat Restoration Fund
Subregion One Permanent Fund
Joint Powers Improvement Authority -Abalone Cove Fund
Capital Improvement Major Capital Projects Fund
Schedule of Revenues, Expenditures and Changes in Fund Balances -
Budget and Actual
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CITY OF RANCHO PALOS VERDES, CALIFORNIA
Comprehensive Annual Financial Report
For the Fiscal Year Ended June 30, 2020
Table of Contents
STATISTICAL SECTION (Unaudited)
Description of Statistical Section Contents
Financial Trends
Net Position by Component
Changes in Net Position
Governmental Activities Tax Revenue by Source
Fund Balances of Governmental Funds
Changes in Fund Balances of Governmental Funds
Revenue Capacity
Assessed Value ofTaxable Property
Assessed Value and Estimated Actual Value of Taxable Property
Property Tax Rates -Direct and Overlapping Governments
Principal Property Tax Payers
Property Tax Levies and Collections
Debt Capacity
Direct and Overlapping Governmental Activities Debt
Legal Debt Margin Information
Demographic and Economic Information
Demographic and Economic Statistics
Principal Sales Tax Producers
Principal Employers
Operating Information
Full-time Equivalent City Government Employees by Function
Operating Indicators by Function
Capital Asset Statistics by Function
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CITY OF
January 15, 2021
Honorable Mayor and City Council
City of Rancho Palos Verdes
Rancho Palos Verdes, California
RANCHO PALOS VERDES
The Comprehensive Annual Financial Report (CAFR) of the City of Rancho Palos Verdes
for the fiscal year ended June 30, 2020, is hereby submitted as mandated by both local
ordinances and state statutes. These ordinances and statutes require that the City of
Rancho Palos Verdes issue annually a report on its financial position and activity, and that
an independent firm of certified public accountants audit this report. Responsibility for
both the accuracy of the data, and the completeness and fairness of the presentation,
including all disclosures, rests with the City. To the best of our knowledge and belief, the
enclosed data is accurate in all material respects and is reported in a manner that
presents fairly the financial position and results of operations of the various funds and
component unit of the City of Rancho Palos Verdes. In addition, to the best of our
knowledge, there are no untrue statements of material fact within the financial statements
or omissions of material fact to cause the financial statements to be misleading. All
disclosures necessary to enable the reader to gain an understanding of the City's financial
activities have been included.
White Nelson Diehl Evans, LLP, a firm of licensed certified public accountants, has
audited the City's financial statements. The goal of the independent audit was to provide
reasonable assurance the City's financial statements for the fiscal year ended June 30,
2020 are free of material misstatement. The independent auditor concluded it was
reasonable to render an unmodified opinion and that the City's financial statements for
the fiscal year ended June 30, 2020, are fairly presented in conformity with GAAP. Their
report is presented in the beginning of the financial section of this report.
Management's Discussion and Analysis (MD&A) immediately follows the independent
auditors' report and provides a narrative overview and analysis of the basic financial
statements. This letter of transmittal is designed to complement the MD&A and should be
read in conjunction with it.
City of Rancho Palos Verdes Profile
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
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incorporated September 7, 1973, and currently has land area of 13.6 square miles and a
population of about 42,000. The City is primarily a "bedroom" community with relatively
little commercial activity.
The City has operated under the council-manager form of government since
incorporation. Policy-making and legislative authority are vested in the governing City
Council, which consists of five Council Members, including the Mayor and Mayor Pro-
Tem. The City Council is responsible, among other things, for passing ordinances,
adopting the budget, appointing committees and hiring the City Manager and the City
Attorney. The City Manager is responsible for carrying out the policies and ordinances of
the City Council, for overseeing the day-to-day operations of the City, and for appointing
the heads of the City's departments. The City Council is elected on a non-partisan, at-
large basis. Council Members are elected to four-year staggered terms with two or three
Council Members elected every two years. The City Council designates the Mayor and
Mayor Pro-Tem for a one-year term.
The financial reporting entity (the government) includes all the funds of the primary
government (i.e., the City of Rancho Palos Verdes as legally defined), as well as its
component unit, the Rancho Palos Verdes Joint Powers Improvement Authority. A
component unit is a legally separate entity for which the primary government is financially
accountable. The City provides a broad range of services, including police protection,
solid waste collection, construction, and maintenance of streets and other infrastructure,
planning and zoning activities, recreational activities, cultural events, and general
administrative services. The City of Rancho Palos Verdes is a contract city, meaning that
some of these services are provided by contract with other agencies (both public and
private) and some services are delivered by the City's own employees.
Special districts of the County of Los Angeles provide library services, fire protection
services, and sewer services. The City has excluded the County of Los Angeles, as well
as the State of California and various school districts, from the financial reporting entity
because they do not meet the established criteria for inclusion.
FINANCIAL INFORMATION
Budgetary Controls
The City of Rancho Palos Verdes maintains budgetary controls. The objective of these
budgetary controls is to ensure compliance with legal provisions contained in the annual
appropriated budgets approved by the City Council and the Improvement Authority
Commission. Activities of the General fund, Special Revenue funds, Capital Projects funds
and Permanent funds are included in the annual appropriated budgets of the government
units. The level of budgetary control (that is, the level at which expenditures cannot legally
exceed the appropriated amount) is established at the department/function level within
each fund. Formal budgetary integration is employed as a management control device.
The City also maintains an encumbrance accounting system as one method of
maintaining budgetary control. These encumbrances lapse at year-end, and any
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unexpended balance is eligible to be carried over to the following year's budget
appropriations with City Council approval.
Adopted Budget to Actual Comparison
The City experienced an overall $2 million favorable budget variance in the General fund
for the fiscal year ended June 30, 2020. Due to the economic slowdown caused by the
COVID-19 pandemic, the City experienced an unfavorable revenue variance of $2.2 lower
than budgeted, mainly from the revenue loss of Transient Occupancy Taxes. However, in
response to the sudden loss of revenues and to mitigate the financial impact of the
pandemic, the City identified savings in various categories and ended the year $4.2
million in expenditures below budget. Much of the positive expenditure variances were
permanent savings resulting from conservative budget practices, savings from vacant
positions, and the continued careful management of resources.
Financial Policies
The City Council has established Reserve policies for the General Fund of 50 percent of
the annual operating expenditures in the General Fund. Reserve levels are reviewed
annually during the budget process. This reserve may be used at the discretion of the
City Council to provide for economic uncertainties, local disasters, contingencies for
unseen operating or capital needs, cash flow requirements and/or other financial
hardships or downturns in the local or national economy. At June 30, 2020, the reserve
balance is approximately $13 million or 50 percent of Fiscal Year 2019-2020 General
Fund operating budget.
The City also maintains a $3 million reserve in the Capital Improvement Projects (CIP)
fund as a reserve for major improvement projects related to roadways, storm drains,
parks, buildings, rights-of-way, and the sewer system.
Internal Control
The Finance Department of the City is responsible for establishing and maintaining an
appropriate internal control structure. The internal control system is designed to ensure
that the assets of the City are protected from loss, theft, or misuse and to ensure that
adequate accounting data is compiled to allow for the preparation of financial statements
in conformity with Generally Accepted Accounting Principles. The internal control
structure is designed to provide reasonable, but not absolute, assurance that these
objectives are met. The concept of reasonable assurance recognizes that: (1) the cost
of a control should not exceed the benefits likely to be derived; and (2) the valuation of
costs and benefits requires estimates and judgements by management.
Significant Financial Events
The economic slowdown caused by the COVID-19 pandemic had a broad impact across
Los Angeles County and the State of California as a whole. On March 19, 2020 the
Governor Newsom, issued a stay at home order across the state. This marked the start
of measures that were put in place in an effort to mitigate the spread of the virus. On that
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same day, Terranea (the city's largest source of TOT revenue) announced the temporary
closure of their resort and all amenities. Terranea would not resume operations until
June 12, 2020, although at reduced capacity. The Transient Occupancy Tax (TOT)
revenue generated by Terranea fell to just over $141,000 for March through
June compared to $1.7 million for the same period the prior fiscal year. Total TOT revenue
ended the year at $3.9 million, $1.6 million under the $5.5 million planned for at budget
adoption.
As the pandemic persisted through the end of the fiscal year and consumer demand
remained depressed, sales tax revenue also experienced a sizeable decline ending the
year at $2.16 million, $365,000 under the $2.53 million budgeted. As mentioned
previously, the COVID-19 health crisis caused the temporary closure of Terranea Resort,
along with a decrease in demand to retail and restaurants throughout the City. Terranea
and local restaurants comprised nearly half of all sales tax revenue prior to the start of
the pandemic and subsequently fell to just under 15%.
At the end of FY 2019-2020, the results validate the significant impact on the City's
revenues due to the pandemic and the sudden economic downturn. In response to the
financial impacts since the pandemic, the City continued to be fiscally prudent, monitored
spending, and identified savings when possible. As a result, after applying the City's
obligations and commitments, the City's funds ended the year with a surplus. For instance
the City's general operating account, the general fund, increased by $80,700, ending the
fiscal year with an unrestricted excess reserve of over $8 million.
Long-term Financial Planning
The City utilizes two long-term planning tools that serve as a guide to best allocate
resources to meet the City's needs over time. The first of which is the Five-Year Capital
Improvement Program (CIP). The CIP provides efficient and effective delivery of
resources for improvement and maintaining public infrastructure and facilities. The Five-
Year Capital Improvement Plan is updated annually during the budget process.
The second long-term planning tool is the City's Five-Year Financial Model (Model). The
Model establishes the foundation for guiding policy and making financial decisions, taking
into account any forecasted challenges and opportunities before they arise. This Model
allows for creation of baseline and alternative revenue and spending forecasts, including
historic and projected annual periods for the next five years. The Model also allows for
testing the impact of assumptions and proposed initiatives on projected budget gaps and
fund balances.
In response of the financial impacts of the pandemic, the City continues to closely monitor
the assumptions that were previously used in the long-term planning tools. In order to
have a more accurate forecast, the Finance Department will actively update the planning
tools with the most current information available. Accordingly, any substantial changes of
the assumptions will be presented to the City Council.
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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. Here are some projects to
highlight the City's commitment to ensuring that its citizens are able to live and work in a
thriving environment.
• Advocated for the League of California Cities and California Public Utilities
Commission to revise the Rule 20 program to make it possible for more
communities to put power lines underground for wildfire prevention.
• Launched the Alert SouthBay emergency notification system with other South Bay
cities.
• Implemented a COVID-19 public information campaign, including a daily
community newsletter, social media updates, and a comprehensive webpage.
• Launched the Ready RPV wildfire preparedness social media challenge.
• Implemented the Everbridge Emergency Notification System, Alert SouthBay.
• Created a School Resource Officer program with the other three Peninsula cities
for PVPUSD.
• Created a Seniors Resource Guide and other Community resources information
during COVID-19.
• The City of Rancho Palos Verdes named the 7th Safest City in California by
California Safewise.
• The City of Rancho Palos Verdes and City of Rolling Hills Estates joint Hazard
Mitigation Plan was submitted to the California Governor's Office of Emergency
Services (Cal OES) on June 18, 2020.
• The Palos Verdes Peninsula cities and other community partners compiled a
Senior Resource Guide a list of local resources supporting seniors and individuals
with disabilities during the COVID-19 crisis.
• The Emergency Preparedness Committee presented a Wildfire Mitigation
presentation to the City Council on May 5, 2020.
• The Information Technology (IT) Department proactively planned and prepared the
City IT infrastructure for the increased remote access demand during the "Safer at
Home" shutdown, which allowed the City to continue its core business operations
uninterrupted.
• Successfully implemented technical solutions enabling remote online meetings
(including City Council, Planning Commission, and various advisory board).
Provided training to staff and board members on how to run and participate in
online virtual meetings.
• Completed the ADA Access Improvements in Area 9.
• Completed Landslide GPS Survey.
• Constructed the Residential Street Rehabilitation Program Area 3 and 4.
• Completed the biennial update to the City's Pavement Management Program.
• Completed Phase 1 of the Traffic Sign Replacement program.
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• Completed the certification of the Zone 2 Environmental Impact Report for the
development of 32 vacant lots in the City's Landslide Moratorium Area.
• Adopted the City's Natural Communities Conservation Plan/ Habitat Conservation
Plan.
• Adopted Code Amendments related to the City's Accessory Dwelling Unit
Ordinance.
• Awarded a $165,000 Senate Bill (SB) 2 for the development of a mixed-use overlay
zone along Western Avenue.
• Adopted the City 2019 California Building Code.
• Implemented the City's Emissions Reduction Action Plan.
• Completed the City Specific Vulnerability Assessment as part of the South Bay
Cities Climate Adaptation Plan.
• Implemented Short-Term Rental platform, Host Compliance, for third party
monitoring service for non-complaint properties City wide.
• Adopted the Natural Communities Conservation Plan/Habitat Conservation Plan
(NCCP/HCP).
• Launched the City-operated Park Ranger Program.
• Approved the Conceptual Master Plan for Ladera Linda.
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 $750,000 is
expended on Federal financial assistance programs, the City is required to undergo an
annual single audit in conformity with the provisions of the Single Audit Act of 1984 and
U.S. Office of Management and the Uniform Guidance. For the year ended June 30, 2019,
the City did not expend over $750,000 on Federal financial assistance programs; and
therefore a Single Audit is not required.
GFOA Certificate of Achievement Award
The Government Finance Officers Association of the United States and Canada (GFOA)
awarded a Certificate of Achievement for Excellence in Finance Reporting to the City of
Rancho Palos Verdes for its CAFR for the fiscal year ended June 30, 2019. This was the
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261h consecutive year that the City has achieved this prestigious award . In order to be
awarded a Certificate of Achievement, a government must publish an easily readable and
efficiently organized CAFR. This report must satisfy both generally accepted accounting
principles and applicable legal requirements.
A Certificate of Achievement is valid for a period of one year only. We believe that our
current CAFR continues to meet the Certificate of Achievement Program's requirements
and we are submitting it to the GFOA to determine its eligibility for another certificate.
Acknowledgments
The preparation of this report would have not been possible without the dedication of the
entire staff of the Finance Department. I would also like to acknowledge the assistance
of the City's auditors, CliftonlarsonAIIen LLP, and the contributions of all the departments
by providing data necessary to prepare the City's FY 2019-2020 CAFR.
In closing, I want to thank the City Council for their continued leadership directing the City
to achieve a sound fiscal position over the last several years . We look forward to
maintaining this success in the future under the leadership of the City Council.
Respectfully submitted,
~Wj$\---
Trang Nguyen
Director of Finance
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CITY OF RANCHO PALOS VERDES
Comprehensive Annual Financial Report
FY 2019 -2020
FY 2019 -2020 CITY OFFICIALS
Da,id Bradle'l·
c ouncilrn<mber
John Cruiksh.,nk
l\1ayor
Eric . .Uegtin
Mayor Pro Tern
K•nDvda
Counc ilmember
CITY STAFF
City Manager
Ara Mihranian, AICP
B arbara FeiTiU'O
C ouncilrn<mber
Deputy City Manager ............................................................. Karina Banales
Director of Finance ................................................................... Trang Nguyen
Director of Recreation and Parks .................................................. Cory Linder
Director of Community Development.. ................................. Ken Rukavina
Director of Public Works ........................................................ Vacant
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A-19I RESIDENTS OF RANCHO PALOS VERDES I I CITY COUNCIL I I I I I I PLANNING STORM DRAIN TRAFFIC SAFETY EMERGENCY FINANCE ADVISORY INFRASTRUCTURE COMMISSION OVERSIGHT COMMITIEE PREPAREDNESS COMMITIEE MANAGEMENT COMMITIEE (WQFPP) COMMITIEE ADVISORY COMMITIEE I CITY ATIORNEY I I CITY MANAGER I I DEPUTY CITY I I MANAGER I l I COMMUNITY I FINANCE II PUBLIC WORKS II CITY CLERK II RECREATION & I I INFORMATION I I HUMAN I I PUBLIC SAFETY I DEVELOPMENT PARKS TECHNOLOGY RESOURCES XIV
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®
Government Finance Officers Association
Certificate of
Achievement
for Excellence
in Financial
Reporting
Presented to
City of Rancho Palos Verdes
California
For its Comprehensive Annual
Financial Report
For the Fiscal Year Ended
June 30, 2019
Executive Director/CEO
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FINANCIAL SECTION
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City Council Members
City of Rancho Palos Verdes
Rancho Palos Verdes, California
INDEPENDENT AUDITORS' REPORT
Report on the Financial Statements
Clift onlarso nAIIe n LLP
CLAcon nect.com
We have audited the accompanying financial statements ofthe governmental activities, each major fund, and the
aggregate remaining fund information of the City of Rancho Palos Verdes (the City), as of and for the year ended
June 30, 2020, and the related notes to the financial statements, which collectively comprise the City's financial
statements as listed in the table of contents .
Management's Responsibility for the Financial Statements
Management is responsible for the preparation and fair presentation of these financial statements in accordance
with accounting principles generally accepted in the United States of America; this includes the design,
implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial
statements that are free from material misstatement, whether due to fraud or error.
Auditors' Responsibility
Our responsibility is to express opinions on these financial statements based on our audit. We conducted our audit
in accordance with auditing standards generally accepted in the United States of America, and the standards
applicable to financial audits contained in Government Auditing Standards , issued by the Comptroller General of
the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about
whether the financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the
financial statements. The procedures selected depend on the auditors ' judgment, including the assessment of the
risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk
assessments, the auditors consider internal control relevant to the City 's preparation and fair presentation of the
financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the
purpose of expressing an opinion on the effectiveness of the City 's internal control. Accordingly, we express no
such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the
reasonableness of significant accounting estimates made by management, as well as evaluating the overall
presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit
opinions.
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Opinions
In our opinion, the financial statements referred to above present fairly, in all material respects, the respective
financial position ofthe governmental activities, each major fund, and the aggregate remaining fund information
of the City of Rancho Palos Verdes, as of June 30, 2020, and the respective changes in financial position and,
where applicable, cash flows thereof and the respective budgetary comparison for the general fund for the year
then ended in accordance with accounting principles generally accepted in the United States of America.
Other Matters
Required Supplementary Information
Accounting principles generally accepted in the United States of America require that the management's
discussion and analysis, the schedule of proportionate share of the net pension liability, and the schedule of pension
contributions, identified as Required Supplementary Information (RSI) in the accompanying table of contents, be
presented to supplement the financial statements. Such information, although not a part of the financial statements,
is required by the Governmental Accounting Standards Board, who considers it to be an essential part of financial
reporting for placing the financial statements in an appropriate operational, economic, or historical context. We
have applied certain limited procedures to the RSI 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
financial statements, and other knowledge we obtained during our audit of the financial statements. We do not
express an opinion or provide any assurance on the information because the limited procedures do not provide us
with sufficient evidence to express an opinion or provide any assurance.
Other Information
Our audit was conducted for the purpose offorming opinions on the financial statements that collectively comprise
the City's financial statements. The introductory section, combining statements and individual fund schedules,
and statistical section are presented for purposes of additional analysis and are not a required part of the financial
statements.
The combining statements and individual fund schedules, as listed in the table of contents, are the responsibility
of management and were derived from and relate directly to the underlying accounting and other records used to
prepare the financial statements. Such information has been subjected to the auditing procedures applied in the
audit of the financial statements and certain additional procedures, including comparing and reconciling such
information directly to the underlying accounting and other records used to prepare the 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 combining statements and individual fund
schedules are fairly stated in all material respects in relation to the financial statements as a whole.
The introductory section and statistical section have not been subjected to the auditing procedures applied in the
audit of the financial statements and, accordingly, we do not express an opinion or provide any assurance on them.
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Other Reporting Required by Government Auditing Standards
In accordance with Government Auditing Standards, we have also issued our report dated January 15, 2021, on
our consideration of the City's internal control over financial reporting and on our tests of its compliance with
certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that
report is solely 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 effectiveness of the City's internal control over
financial reporting or on compliance. That report is an integral part of an audit performed in accordance with
Government Auditing Standards in considering City's internal control over financial reporting and compliance.
CliftonLarsonAllen LLP
Irvine, California
January 15, 2021
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MANAGEMENT'S DISCUSSION & ANALYSIS
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CITY OF RANCHO PALOS VERDES
MANAGEMENT'S DISCUSSION AND ANALYSIS
FISCAL YEAR ENDED JUNE 30, 2020
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, 2020. We encourage readers to
consider the information presented here in conjunction with additional information that we
have furnished in our Letter of Transmittal, which can be found on pages v-xi of this report.
FINANCIAL HIGHLIGHTS
• The assets and deferred outflows of resources of the City of Rancho Palos Verdes
exceeded its liabilities and deferred inflows of resources at the close of the Fiscal
Year ended June 30, 2020, by $219.5 million (Net Position). Of this amount,
$38.6million (Unrestricted Net Position) may be used to meet the City's ongoing
obligations to its citizens and creditors. The remaining amount is invested in capital
assets or is otherwise restricted, and therefore not available to meet the City's
obligations.
• The City's total Net Position decreased by $4.0 million from the prior year from the
Governmental activities primarily due to the increase of capital assets being
depreciated and the decrease of the unrestricted fund balance from completed
projects.
• As of June 30, 2020, the City's Governmental Funds reported combined ending
Fund Balances of $61.1 million, a decrease of $0.4 million in comparison with the
prior year due to lower amount of prepaid items.
• At the end of the current fiscal year, the General Fund reported an increase in fund
balance in the amount of $1 million. The increase is due primarily to higher inflow
of revenues over expenditures.
• As of June 30, 2020 , unassigned fund balance for the General Fund was
$21.3 million or 82% of the General Fund expenditures. Of this amount, $20.8
million constitutes the City Council's General Fund Reserve (rainy day fund).
• As a result of the City Council's reserve policy, the unassigned fund balance has
historically been maintained at or above the policy threshold level of 50% of
annually budgeted General Fund expenditures. At the end of the current fiscal
year, the General Fund expenditures including transfers was $28.5 million .
General Fund unassigned fund balance represents 75% of this amount.
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CITY OF RANCHO PALOS VERDES
MANAGEMENT'S DISCUSSION AND ANALYSIS
FISCAL YEAR ENDED JUNE 30, 2020
OVERVIEW OF THE BASIC FINANCIAL STATEMENTS
This discussion and analysis is intended to serve as an introduction to the City's basic
financial statements, which are comprised of three components: 1) Government-Wide
Financial Statements; 2) Fund Financial Statements; and 3) Notes to the Financial
Statements. This report also contains other supplementary information in addition to the
basic financial statements themselves.
Government-Wide Financial Statements
The Government-Wide Financial Statements are designed to provide readers with a
broad overview of the City's finances, in a manner similar to a private-sector business.
The Statement of Net Position presents information on all of the City's assets, deferred
outflows of resources, liabilities, and deferred inflows of resources, with the difference
between the two reported as Net Position. Over time, increases or decreases in net
position may serve as a useful indicator of whether the financial position of the City of
Rancho Palos Verdes is improving or deteriorating.
The Statement of Activities presents information showing how the government's net
position changed during the most recent Fiscal Year. All changes in net position are
reported as soon as the underlying event giving rise to the change occurs, regardless of
the timing of related cash flows. Thus, revenues and expenses are reported in this
statement for some items that will only result in cash flows in future fiscal periods
(e.g., uncollected taxes and earned but unused vacation leave).
Both the Government-Wide Financial Statements distinguish functions of the City that are
principally supported by taxes and intergovernmental revenues (governmental activities)
from other functions that are intended to recover all or a significant portion of their costs
through user fees and charges (business-type activities). The governmental activities of
the City include general government, public safety, public works, community development
and parks and recreation. The City no longer has business-type activities.
The Government-Wide Financial Statements include not only the City of Rancho Palos
Verdes itself (known as the Primary Government), but also a legally separate
Improvement Authority for which the City of Rancho Palos Verdes is financially
accountable. Financial information for this Component Unit has been included as an
integral part of the primary government.
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CITY OF RANCHO PALOS VERDES
MANAGEMENT'S DISCUSSION AND ANALYSIS
FISCAL YEAR ENDED JUNE 30, 2020
The Government-Wide Financial Statements can be found on pages 19-20 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. The Governmental
Fund Financial Statements can be found on pages 21-24.
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 28 individual Governmental Funds during
the Fiscal Year ended June 30, 2020. 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 and the
Capital Improvements Fund are considered to be major funds. Data from the other 26
Governmental Funds are combined into a single, aggregated presentation. Individual
fund data for each of these Other Governmental Funds is provided in the form of
combining statements elsewhere in this report.
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CITY OF RANCHO PALOS VERDES
MANAGEMENT'S DISCUSSION AND ANALYSIS
FISCAL YEAR ENDED JUNE 30, 2020
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.
Proprietary Funds
The City of Rancho Palos Verdes maintains one type of Proprietary Fund. Internal Service
Funds are an accounting device used to accumulate and allocate costs internally among
the City's various functions . The City uses an Internal Service Fund to account for its fleet
of vehicles, computer systems, furniture and equipment , 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.
The Proprietary Fund Financial Statements can be found on pages 27-29 of this report.
The Proprietary Fund Financial Statements provide separate information for the City's
Internal Service Fund. The Internal Service Fund is combined and presented with the
City's governmental activities in the government-wide financial statements.
Fiduciary Fund
The City is a fiduciary for the Successor Agency to the Rancho Palos Verdes
Redevelopment Agency (the "Successor Agency"). The City is responsible for ensuring
that the assets reported in the Successor Agency's private-purpose trust fund are only:
1) used to extinguish the obligations of the former RDA; or 2) transferred to another
agency pursuant to state redevelopment dissolution law. All of the fiduciary activities are
reported in a separate Statement of Fiduciary Net Position and Statement of Changes in
Fiduciary Net Position. We exclude these activities from the City's Government-Wide
Financial Statement because the City cannot use these assets to finance its operations.
Individual Fiduciary Fund statements can be found on pages 30-31 of this report.
Notes to the Financial Statements
The notes provide additional information that is essential to a full understanding of the
data provided in the Government-Wide and Fund Financial Statements. The notes to the
financial statements can be found on pages 33-64 of this report.
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CITY OF RANCHO PALOS VERDES
MANAGEMENT'S DISCUSSION AND ANALYSIS
FISCAL YEAR ENDED JUNE 30, 2020
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 70-108 of this report.
GOVERNMENT -WIDE FINANCIAL ANALYSIS
As noted earlier, net position may serve over time as a useful indicator of a government's
financial position. In the case of the City of Rancho Palos Verdes, assets and deferred
outflows of resources exceeded liabilities and deferred inflows of resources by $219.5
million at June 30, 2020. By far, the largest portion of the City's Net Position of $156.8
million or 71% reflects its net investment in Capital Assets (e.g. Land, Infrastructure,
Buildings, and Equipment). The City uses these Capital Assets to provide services to its
citizens; consequently, these assets are not available for future spending.
Summary of Net Position
Current and other assets
Capital assets
Total assets
Deferred outflows of resources
Long-term liabilities outstanding
Other liabilities
Total liabilities
Deferred inflows of resources
Net Investment in capital assets
Restricted
Unrestricted
Total net position
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Governmental
Activities
2020 2019
$ 77,628,528 $ 77,547,330
157,569,827 159,556,834
235,198,355 237,104,164
2,661,430 2,871,414
12,008,364 10,995,129
5,714,365 4,780,662
17,722,729 15,775,791
676,537 734,107
156,763,391 159,556,834
24,115,702 16,170,342
38,581,426 47,738,504
$ 219,460,519 $ 223,465,680
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CITY OF RANCHO PALOS VERDES
MANAGEMENT'S DISCUSSION AND ANALYSIS
FISCAL YEAR ENDED JUNE 30, 2020
A portion of the City's Net Position of $24.1 million or 11 %, represents resources subject
to external restrictions. The remaining balance of Unrestricted Net Position of
$38.6 million or 18 % may be used to meet the government's ongoing obligations to its
citizens and creditors.
Compared to the prior year, the total current and other assets increased by $0.08 million
mainly due to the lower amount paid in prepaid items. Moreover, the total capital assets
decreased by $2.5 million over the prior year.
As a result of the net pension liability increase, the long-term liabilities outstanding
increased by $1 million over the prior year. Additionally, other liabilities increased by
$0.9 million over prior year.
Statement of Activities
Governmental
Activities
2020 2019
Program revenues:
Charges for services $ 3,855,702 $ 4,292,011
Operating contributions and grants 4,604,829 4,608,132
Capital contributions and grants 625,618 1,136,762
General revenues:
Property taxes 14,993,467 14,349,681
Other taxes 10,526,313 12,802,577
Other 1,850,900 2,222,040
Total revenues 36,456,829 39,411,203
Administration 8,013,351 6,562,703
Public safety 7 ,360,045 7,214,441
Public works 18,182,315 16,064,163
Parks and recreation 2,857,317 3,064,444
Community development 2,857,235 3,051,881
Non-departmental 1,191 ,727 1,133,906
Total expenses 40,461,990 37,091,538
Transfers 34,257,672
(Decrease) /Increase in net position (4,005, 161) 36,577,337
Net position -beginning of fiscal year 223,465,680 186,888,343
Net position -end of fiscal year $ 219,460,519 $ 223,465,680
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CITY OF RANCHO PALOS VERDES
MANAGEMENT'S DISCUSSION AND ANALYSIS
FISCAL YEAR ENDED JUNE 30, 2020
Governmental Activities
As illustrated in the chart above, the City's Net Position in Governmental Activities
decreased by $4 million when compared to the prior year mainly due to the economic
impact of the COVID-19 pandemic.
Overall, government-wide revenues for the fiscal year ended June 30, 2020, decreased
by $3 million. Of the decreased amount, $1 million was from the program revenues and
$2 million was from general revenues . The decrease in revenues was due to the economic
impact of the COVID-19 pandemic; mainly impacting the City's transient occupancy tax
and sales tax.
The percentages of each category for the sources of revenues are illustrated in the
following chart.
Sources of Revenue -Governmental Activities
Property Taxes
41%
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Charges for Services
10%
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CITY OF RANCHO PALOS VERDES
MANAGEMENT'S DISCUSSION AND ANALYSIS
FISCAL YEAR ENDED JUNE 30, 2020
The government-wide expenses for the fiscal year ended June 30, 2020 increased by
$3.4 million from the prior year. The majority of the increased amount was from the
completion of the ongoing capital and maintenance projects, and unforeseen emergency
operations center expenses. The percentages of each function for the expenses are
illustrated in the following chart.
Expenses by Function -Governmental Activities
•
Public Works
45%
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CITY OF RANCHO PALOS VERDES
MANAGEMENT'S DISCUSSION AND ANALYSIS
FISCAL YEAR ENDED JUNE 30, 2020
FINANCIAL ANALYSIS OF THE GOVERNMENTAL FUNDS
As of the end of the current fiscal year, the City's Governmental Funds reported combined
ending Fund Balances of $61.1 million, a decrease of $0.4 million in comparison to the
prior year. Approximately $58.9 million or 96% of the combined ending Fund Balances
constitutes spendable fund balance . The remainder of the combined ending Fund
Balances are non -spendable either due to legal restrictions or non-spendable in the form
of prepaid items and inventory. Additional information on the non-spendable items can be
found in Note# 7 on pages 49-51 of this report.
The General Fund is the chief operating fund of the City of Rancho Palos Verdes. At the
end of the current fiscal year, the unassigned fund balance of the General Fund is $21 .3
million, while total Fund Balance reached to $21.7 million. 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 75% of total General Fund uses, while total Fund Balance represents
76% of the same amount.
The fund balance of the City's General Fund increased by $1 million from the prior year.
The increase is due to the higher inflow of revenues and the department wide personnel
and non-personnel savings. Additional details on General Fund are provided in the
General Fund Highlights.
The Capital Improvements Fund Balance ended the year with a decrease of $1.7 million
from the prior year. The majority of the decrease is largely from the budgeted capital
outlay projects that were completed by year-end. These projects are primarily from the
residential street rehabilitation program and the City's Portuguese Bend Landslide
project.
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.
The Net Position of the Internal Service Funds at the end of the fiscal year amounted to
$2.8 million, a decrease to the Net Position by $0.2 million. The decreased amount is due
the replacement of computers and hardware, and the purchase of a vehicle for the new
park ranger program.
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CITY OF RANCHO PALOS VERDES
MANAGEMENT'S DISCUSSION AND ANALYSIS
FISCAL YEAR ENDED JUNE 30, 2020
General Fund Budgetary Highlights
The City of Rancho Palos Verdes' budget is prepared over the course of several months,
beginning with a thorough review and analysis of the prior fiscal year between September
and December. The General Fund actual year-end results show operations ending the
year with total revenues of almost $29 .2 million and $26 million of expenditures. When
including net transfers of $2.3 million, there is a positive variance of just over $1 million
(revenues to expenditures).
The decrease in revenues during FY 2019-2020 was due to the economic slowdown
caused by the COVID-19 pandemic. Revenue from transient occupancy tax and sales tax
experienced the largest impact. To mitigate the revenue loss, staff across all departments
worked together to identify savings and reduce costs. As a result, the General Fund ended
the year with a positive variance.
Revenue Highlights
Taxes
• The City's tax revenue is its largest revenue sources. Taxes include property tax,
transient occupancy tax (TOT), and sales tax. Tax revenues came in at $25.6
million, $1.7 million, or 6% under final budget of $27 .3 million. This
underperformance of revenue was due primarily to the impact the COVID-19
pandemic had on travel, leisure activities, and dining which lead to drops in TOT
and sales tax revenue.
Use of Money and Property
• Consists of interest earnings and rental & lease revenue, these revenue sources
ended the year at $706,236, which is $132,264 or 16% under than the final budget
of $838,500. The majority of this decrease of $112,000, is the result of lost rental
& lease revenue as facilities were closed due to the pandemic.
Licenses and Permits
• This category ended the year lower than estimated by $250,977 or 12% due to the
expected decrease in demand from the stay home orders.
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CITY OF RANCHO PALOS VERDES
MANAGEMENT'S DISCUSSION AND ANALYSIS
FISCAL YEAR ENDED JUNE 30, 2020
Expenditure Highlights
Salaries & Benefits
• This category ended the year just over $1 million or 9 .6% under the final budget
of $10.6 million. This is due to several delayed and unfilled positions and the
reduction in staffing needs due to the closure of parks and facilities.
Professional & Technical Services
• This category came in approximately $955,000 or 24.6% under the final budget
of $3.9 million. This underrun is due to delayed services and planned services
that were not utilized during the fiscal year and reduced activities in the fourth
quarter from augmenting services.
CAPITAL ASSET AND DEBT ADMINISTRATION
The City's investment in Capital Assets for its Governmental activities as of June 30,
2020, amounts to $156.8 million (net of accumulated depreciation). This investment in
capital assets includes land, buildings, park improvements, roadways, sewer, storm
drains, vehicles, computer equipment, furniture, other equipment, and construction in
progress.
Major capital asset events during the current fiscal year included the following:
• Depreciation of $6.6 million was recorded for the City's Capital Assets.
• A total of $4.7 million of construction in progress was added primarily from the
residential and street improvements and beautification projects.
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CITY OF RANCHO PALOS VERDES
MANAGEMENT'S DISCUSSION AND ANALYSIS
FISCAL YEAR ENDED JUNE 30, 2020
City of Rancho Palos Verdes Capital Assets (Net of Depreciation)
Capital assets not being depreciated
Land
Construction in progress
Total capital assets not being depreciated
Capital assets being depreciated, net
Buildings
Vehicles
Computer equipment
Equipment -water quality
Furniture, fixtures and equipment
lnfras tructure
Roadway system
Sewer system
Storm drain system
Storm drain system -water quality
Park system
Total capital assets being depreciated, net
Capital Assets, net
Governmental
Activities
2020
$ 43,528,625
4,635,208
48,163,833
6,927,004
103,678
24,580
151,276
52,132,630
4,484,110
8,425,905
31,953,125
5,203,686
109,405,994
$157,569,827
2019
$ 42,087,575
3,130,630
45,218,205
7,193,177
104,423
91 '141
188,377
56,131,059
4,937,865
8,671,515
30,422,761
5,170,068
112,910,386
$ 158,128,591
Additional information on the City's Capital Assets can be found in Note #4 on pages 4 7-
48 of this report.
Long-term debt. At the end of the current Fiscal Year, the City of Rancho Palos Verdes
had total debt outstanding of $403,201 for Employee Compensated Absences.
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CITY OF RL\NCHO PALOS VERDES
MANAGEMENT'S DISCUSSION AND ANALYSIS
FISCAL YEAR ENDED JUNE 30, 2020
City of Rancho Palos Verdes Outstanding Debt
Governmental
Activities
2020 2019
Employee compensated absences 403,201 400,505
Total $ 403,201 $ 400,505
At the fiscal year ended June 30, 2020, the City's total debt decreased by $0.003 million
or 1%.
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 $2,021,758,000.
ECONOMIC FACTORS AND NEXT YEAR BUDGETS AND RATES
The City historically follows a very fiscally conservative budgeting and forecasting model
and the impacts of this practice were seen this fiscal year as the pandemic caused and
economic slowdown that touched nearly all areas of the economy across the country.
Despite decreases to revenue from transient occupancy tax and sales tax, the City
maintains a healthy financial outlook and supports the General Fund operations with only
recurring tax revenue. Roughly 41% of the City's revenue came from property tax during
FY 2019-2020. Property tax is expected to make up 46% of general fund revenue during
FY 2020-2021. This stable revenue base provides the City with a steady and predictable
revenue inflow year over year.
During 2019, total property values within the city grew by 4.4%, or $596 million, bringing
the total net taxable property value for the City to $14.14 billion. This increase is slightly
less than the 6.1% increase seen across Los Angeles County as a whole. Of the
$596 million increase, $566 million was from growth in residential properties which makes
up 92% of the total property value, followed by an $18 million increase in commercial
property (5.5% of total property value). Despite the lasting impacts the pandemic has had
on the economy, the demand for real estate has remain high.
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CITY OF Rt\NCHO PALOS VERDES
MANAGEMENT'S DISCUSSION AND ANALYSIS
FISCAL YEAR ENDED JUNE 30, 2020
The median sale price of a detached single family residential home in Rancho Palos
Verdes from January through August 2020 was $1,350,000. This represents a $25,000
(1.9%) increase in median sale price from 2019.
The economic slowdown and stay at home orders across the state had the largest impact
to Transient Occupancy Tax (TOT). The City's prudent practice of limiting the majority of
TOT revenue to supporting the City's capital program and not operating expenses greatly
reduced the impact of the lost revenue to the City's operations. Despite the impact to
revenue, the City-wide annual budget continues to showcase the City's commitment to
fiscal prudence, predicated on maintaining a structurally sound operating budget, lean
staffing, healthy cash reserves and absence of debt.
REQUESTS FOR INFORMATION
This Financial Report is designed to provide a general overview of the financial position
of the City of Rancho Palos Verdes for all those with an interest in the government's
finances. Questions concerning any of the information provided in this report, or requests
for additional financial information, should be addressed to the Finance Department at
30940 Hawthorne Boulevard, Rancho Palos Verdes, CA 90275 or finance@rpvca .gov.
18
A-44
BASIC FINANCIAL STATEMENTS
A-45
A-46
ASSETS
CURRENT ASSETS:
Cash and investments
Receivables:
Taxes
Interest
Other
Inventory
Prepaid costs
TOTAL CURRENT ASSETS
NONCURRENT ASSETS:
Notes receivable
Receivable from Successor Agency
Allowance for Successor Agency receivable
Capital assets:
Non-depreciable
Depreciable, net
TOTAL NONCURRENT ASSETS
TOTAL ASSETS
DEFERRED OUTFLOWS OF RESOURCES
Deferred outflows related to pensions
LIABILITIES
CURRENT LIABILITIES:
Accounts payable and accrued liabilities
Retentions payable
Unearned revenue
Deposits payable
Current portion of noncurrent liabilities
TOTAL CURRENT LIABILITIES
NONCURRENT LIABILITIES:
Due beyond one year
Net pension liability
TOTAL NONCURRENT LIABILITIES
TOTAL LIABILITIES
DEFERRED INFLOWS OF RESOURCES
Deferred inflows related to pensions
NET POSITION
Net invested in capital assets
Restricted for:
Housing and community development
Transportation
Public works
Parks and recreation
Public safety
Nonexpendable endowment principal
Unrestricted
TOTAL NET POSITION
CITY OF RANCHO PALOS VERDES
STATEMENT OF NET POSITION
June 30, 2020
See accompanying notes to financial statements.
19
Governmental
Activities
$ 66,869,944
1,328,201
123,328
588,153
36,113
212,648
69,158,387
8,470,141
10,656,709
(1 0,656, 709)
48,163,833
109,405,994
166,039,968
235,198,355
2,661,430
4,082,525
240,511
208,667
869,752
312,910
5,714,365
90,291
11,918,073
12,008,364
17,722,729
676,537
156,763,391
9,574,507
5,486,428
5,001,927
2,074,240
76,420
1,915,317
38,568,289
$ 219,460,519
A-47
Functions/programs
Governmental Activities:
Administration
Public safety
Public works
Parks and recreation
Community development
Non-departmental
Total primary government
$
$
CITY OF RANCHO PALOS VERDES
STATEMENT OF ACTIVITIES
For the year ended June 30, 2020
ExEenses
8,013,351
7,360,045
18,182,315
2,857,317
2,857,235
1,191,727
40,461,990
Program Revenues
Operating
Charges for Grants and
Services Contributions
$ 1,063,790 $
110,639 158,079
309,326 4,446,750
579,382
1,792,565
$ 3,855,702 $ 4,604,829
General revenues:
Taxes:
Property taxes
Transient occupancy tax
Franchise tax
Utility user tax
Other taxes
Capital
Grants and
Contributions
$
625,618
$ 625 618
Unrestricted intergovernmental revenue -shared sales tax
Investment income
Unrestricted grants, contributions and other revenues
Total general revenues
Change in net position
Net position-beginning of year
Net position-end of year
See accompanying notes to financial statements.
20
Net Revenue
(Expense) and
Changes in
Net Position
Governmental
Activities
$ (6,949,561)
(7 ,091 ,327)
(12,800,621)
(2,277,935)
(1,064,670)
(1,191,727)
(31,375,841)
14,993,467
3,909,799
2,146,037
1,912,370
394,765
2,163,342
1,225,042
625,858
27,370,680
(4,005,161)
223,465,680
$ 219,460,519
A-48
CITY OF RANCHO PALOS VERDES
BALANCESHEET-GOVERNMENTALFUNDS
June 30, 2020
Capital
Projects Other Total
Capital Governmental Governmental
General ImErovements Funds Funds
ASSETS
Cash and investments $ 23,734,081 $ 25,758,040 $ 14,759,140 $ 64,251,261
Receivables:
Taxes 1,005,521 322,680 1,328,201
Interest 42,387 46,425 29,806 118,618
Other 120,774 4,426 462,953 588,153
Due from other funds 451,708 451,708
Inventory 36,113 36,113
Prepaid items 212,648 212,648
Receivable from Successor Agency 10,656,709 10,656,709
Allowance for Successor Agency Receivable (10,656,709) (10,656,709}
TOTAL ASSETS $ 25,603,232 $ 25,808,891 $ 15,574,579 $ 66,986,702
LIABILITIES AND FUND BALANCES
LIABILITIES:
Accounts payable and accrued liabilities $ 2,766,942 $ 285,102 $ 1,019,577 $ 4,071,621
Due to other funds 451,708 451,708
Retentions payable 9,162 178,981 52,368 240,511
Unearned revenue 208,667 208,667
Deposits payable 869,752 869,752
TOTAL LIABILITIES 3,854,523 464,083 1,523,653 5,842,259
DEFERRED INFLOWS OF RESOURCES
Unavailable revenue 52,632 52,632
FUND BALANCES (DEFICITS):
Non-Spendable
Endowment principal 1,915,317 1,915,317
Prepaid items 212,648 212,648
Inventory 36,113 36,113
Restricted 1,379,700 12,297,912 13,677,612
Committed 167,174 167,174
Assigned 23,965,108 23,965,108
Unassigned 21,332,774 (214,935) 21,117,839
TOTAL FUND BALANCES (DEFICITS) 21,748,709 25,344,808 13,998,294 61,091,811
TOTAL LIABILITIES, DEFERRED
INFLOWS, AND FUND BALANCES $ 25,603,232 $ 25,808,891 $ 15,574,579 $ 66,986,702
See accompanying notes to financial statements.
21
A-49
CITY OF RANCHO PALOS VERDES
RECONCILIATION OF THE GOVERNMENTAL FUNDS
BALANCE SHEET TO THE STATEMENT OF NET POSITION
June 30,2020
Fund balances -total governmental funds
Amounts reported for governmental activities in the Statement of Net Position are different because:
Capital assets used in governmental activities are not current financial resources and, therefore,
are not reported in the governmental funds balance sheet.
Receivables not available to pay for current period expenditures are reported as unavailable
revenue in the financial statements.
Long-term notes receivable are not current available resources and, therefore, do not affect the
governmental fund balance.
Long-term liabilities are not due and payable in the current period and, therefore, are not reported
in the governmental funds.
The pension liability and related amounts are not due and payable in the current period and,
therefore, are not reported in the governmental funds. Deferred outflows of resources and deferred inflows
of resources related pensions are only reported in the Statement of Net Position as the changes in these
amounts affect only the government-wide statements for governmental activities:
Net pension liability
Deferred outflows of resources related to pensions
Deferred inflows of resources related to pensions
Internal service funds are used by management to charge the costs of certain activities, including
equipment and building replacement to individual funds. The assets and liabilities of the
internal service funds are included in the Statement of Net Position.
Net position of governmental activities
See accompanying notes to financial statements.
22
$ 61,091,811
157,339,564
52,632
8,470,141
(403,201)
(11,918,073)
2,661,430
(676,537)
2,842,752
$ 219,460,519
A-50
CITY OF RANCHO PALOS VERDES
STATEMENT OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCES-GOVERNMENTAL FUNDS
For the year ended June 30, 2020
Capital
Projects Other Total
Capital Governmental Governmental
General lmErovements Funds Funds
REVENUES:
Taxes $ 25,606,371 $ $ 809,575 $ 26,415,946
Licenses and permits 1,916,823 1,916,823
Revenue from other agencies 5,441,869 5,441,869
Charges for services 8,407 194,632 203,039
Fines and forfeitures 365,074 365,074
Use of money and property 706,236 471,473 268,769 1,446,478
Other revenues 621,094 387,920 1,009,014
TOTAL REVENUES 29,224,005 471,473 7,102,765 36,798,243
EXPENDITURES:
Current:
Administration 6,319,098 6,319,098
Public safety 7,360,045 7,360,045
Public works 5,714,008 6,546,264 12,260,272
Parks and recreation 2,533,171 14,408 2,547,579
Community development 2,857,235 2,857,235
Non-departmental 1,204,534 1,204,534
Capital outlay 4,652,908 4,652,908
TOTAL EXPENDITURES 25,988,091 4,652,908 6,560,672 37,201,671
EXCESS (DEFICIENCY) OF REVENUES
OVER (UNDER) EXPENDITURES 3,235,914 (4,181,435) 542,093 (403,428)
OTHER FINANCING SOURCES (USES):
Transfers in 275,000 2,509,052 140,000 2,924,052
Transfers out (2,550, 752) (373,300) (2,924,052)
TOTAL OTHER FINANCING SOURCES
(USES) (2,275,752) 2,509,052 (233,300)
NET CHANGE IN FUND BALANCES 960,162 (1,672,383) 308,793 (403,428)
FUND BALANCES -BEGINNING OF YEAR 20,788,547 27,017,191 13,689,501 61,495,239
FUND BALANCES -END OF YEAR $ 21,748,709 $ 25,344,808 $ 13,998,294 $ 61,091,811
See accompanying notes to financial statements.
23
A-51
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, 2020
Net change in fund balances-total governmental funds
Amounts reported for governmental activities in the Statement of Activities are different because:
Governmental funds report capital outlays as expenditures. However, in the Statement of Activities, the
cost of those assets is allocated over their estimated useful lives as depreciation expense, or are allocated
to the appropriate functional expense when the cost is below the capitalization threshold. Asset disposals
are also not recognized in the governmental funds. This activity is reconciled as follows:
Cost of assets capitalized
Depreciation expense
Revenues in the Statement of Activities that do not provide current financial resources are not reported
as revenues in the funds.
Increases in long-term notes receivable use current financial resources and are included in the expenditures
of governmental funds. Repayments of long-term notes receivable provide current financial resources and
are included in the revenues of governmental funds. These changes in notes receivable are not reflected in
the revenues or expenses of the Statement of Activities. This amount represents the net change in the
long-term notes receivable.
Compensated absences expenses reported in the Statement of Activities do not require the use of current
financial resources and therefore are not reported as expenditures in governmental funds.
Governmental funds report pension contributions as expenditures. However, in the Statement of Activities,
pension expense is measured as the change in net pension liability and the amortization of deferred
outflows and inflows relate to pensions. This amount represents the net change in pension related amounts.
Internal service funds are used by management to charge the costs of certain activities, including
equipment and building replacement and employee benefits, to individual funds. The net revenues/
(expenses) of the internal service funds are reported with governmental activities.
Change in net position of governmental activities
See accompanying notes to financial statements.
24
$ (403,428)
4,528,913
(6,362,242)
(544,737)
156,187
(2,697)
(1,148,647)
(228,510)
$ (4,005,161)
A-52
CITY OF RANCHO PALOS VERDES
STATEMENT OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCE-BUDGET AND ACTUAL
REVENUES:
Taxes
Licenses and permits
Charges for services
Fines and forfeitures
Use of money and property
Other revenues
TOTAL REVENUES
EXPENDITURES:
Administration
City council
City manager
Legal services
Community outreach
City clerk
RPVTV
Personnel
Finance
Information technology -Data
Information technology-Voice
Emergency operations
Total Administration
Public safety
Sheriff
Special programs
Emergency preparedness
Total Public Safety
Public Works
Public works administration
Traffic management
Storm water quality
Building maintenance
Park/Trail/Open Space maintenance
Street landscape Maintenance
Sewer maintenance
Total Public Works
GENERAL FUND
For the year ended June 30, 2020
Budgeted Amounts
Original Final
$ 27,331,900 $ 27,331,900
2,167,800 2,167,800
15,100 15,100
327,000 327,000
838,500 838,500
743,100 743,100
31,423,400 31,423,400
123,200 123,200
778,000 639,800
925,000 925,000
75,100 75,100
711,100 656,900
252,500 252,500
391,900 429,926
1,641,300 1,661,551
1,003,900 1,062,979
115,000 109,000
6,017,000 5,935,956
6,540,000 6,690,000
760,200 714,700
165,700 165,700
7,465,900 7,570,400
2,090,400 2,063,224
403,500 1,606,488
489,000 522,369
643,400 466,900
1,403,800 1,192,607
181,000 181,000
46,000 36,000
5,257,100 6,068,588
See accompanying notes to financial statements.
25
$
Variance with
Final Budget
Positive
Actual (Negative)
25,606,371 $ (1 ,725,529)
1,916,823 (250,977)
8,407 (6,693)
365,074 38,074
706,236 (132,264)
621,094 (122,006)
29,224,005 (2,199,395)
89,739 33,461
645,233 (5,433)
1,133,168 (208,168)
63,415 11,685
722,449 (65,549)
182,625 69,875
364,038 65,888
1,634,788 26,763
975,570 87,409
103,792 5,208
404,281 (404,281)
6,319,098 (383,142)
6,683,678 6,322
651,804 62,896
24,563 141,137
7,360,045 210,355
2,092,585 (29,361)
1,355,298 251,190
479,833 42,536
448,644 18,256
1,147,988 44,619
147,382 33,618
42,278 (6,278)
5,714,008 354,580
(Continued)
A-53
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, 2020
Variance with
Final Budget
Budgeted Amounts Positive
Oris;inal Final Actual (Nes;ative)
EXPENDITURES (CONTINUED):
Parks and Recreation
Recreation administration $ 1,042,600 $ 935,642 $ 964,028 $ (28,386)
Recreation facilities 914,200 937,882 900,585 37,297
Special events 262,100 172,383 169,037 3,346
PVIC 540,900 452,626 457,537 (4,911)
REACH 78,000 24,000 20,789 3,211
Support services 24,400 24,400 21,195 3,205
Total Parks and Recreation 2,862,200 2,546,933 2,533,171 13,762
Community Development
Planning services 1,622,200 1,431,254 1,358,503 72,751
Building & safety 1,074,300 658,800 678,640 (19,840)
Code enforcement 267,200 227,000 222,319 4,681
View restoration/preservation 389,200 387,000 384,590 2,410
NCCP 50,000 15,000 15,000
Geology 150,000 118,000 111,100 6,900
Animal Control 140,000 120,000 102,083 17,917
Total Community Development 3,692,900 2,957,054 2,857,235 99,819
Non-departmental 1,297,800 1,387,410 1,204,534 182,876
TOTAL EXPENDITURES 26,592,900 26,466,341 25,988,091 478,250
EXCESS (DEFICIENCY) OF REVENUES
OVER (UNDER) EXPENDITURES 4,830,500 4,957,059 3,235,914 (1,721, 145)
OTHER FINANCING SOURCES (USES):
Transfers in 275,000 275,000 275,000
Transfers out (4,116,900) (2,757,300) (2,550, 752) 206,548
TOTAL OTHER FINANCING
SOURCES (USES) (3,841 ,900) (2,482,300) (2,275,752) 206,548
NET CHANGE IN FUND BALANCE 988,600 2,474,759 960,162 (1 ,514,597)
FUND BALANCE -BEGINNING OF YEAR 20,788,547 20,788,547 20,788,547
FUND BALANCE -END OF YEAR $ 21,777,147 $ 23,263,306 $ 21,748,709 $ {1,514,597)
See accompanying notes to financial statements.
26
A-54
CITY OF RANCHO PALOS VERDES
STATEMENT OF NET POSITION
PROPRIETARY FUNDS
CURRENT ASSETS:
Cash and investments
Receivables:
Interest
ASSETS
TOTAL CURRENT ASSETS
NONCURRENT ASSETS:
Capital assets, being depreciated:
Property and equipment
Accumulated depreciation
TOTAL NONCURRENT ASSETS
TOTAL ASSETS
LIABILITIES
LIABILITIES:
Accounts payable and accrued liabilities
Invested in capital assets
Unrestricted
TOTAL NET POSITION
NET POSITION
See accompanying notes to financial statements.
June 30,2020
27
Equipment
Replacement
Internal
Service
Fund
$ 2,618,683
4,710
2,623,393
2,466,342
(2,236,079)
230,263
2,853,656
10,904
230,263
2,612,489
$ 2,842,752
A-55
CITY OF RANCHO PALOS VERDES
STATEMENT OF REVENUES, EXPENSES AND
CHANGES IN NET POSITION-PROPRIETARY FUNDS
For the year ended June 30, 2020
OPERATING REVENUES:
Charges for services
Miscellaneous
TOTAL OPERATING REVENUES
OPERATING EXPENSES:
Materials and supplies
Depreciation
TOTAL OPERATING EXPENSES
OPERATING LOSS
NONOPERATING REVENUES:
Investment income
CHANGE IN NET POSITION
TOTAL NET POSITION-BEGINNING OF YEAR
TOTAL NET POSITION-END OF YEAR
See accompanying notes to financial statements.
28
Equipment
Replacement
Internal
Service
Fund
$ 84,600
450
85,050
154,572
205,674
360,246
(275,196)
46,686
(228,510)
3,071,262
$ 2,842,752
A-56
CITY OF RANCHO PALOS VERDES
STATEMENT OF CASH FLOWS
PROPRIETARY FUNDS
For the year ended June 30, 2020
CASH FLOWS FROM OPERATING ACTIVITIES:
Receipts from interfund services provided
Payments to suppliers
NET CASH USED BY
OPERATING ACTIVITIES
CASH FLOWS FROM CAPITAL AND
RELATED FINANCING ACTIVITIES:
Acquisition and construction of capital assets
CASH FLOWS FROM INVESTING ACTIVITIES:
Interest received on investments
NETINCREASE(DECREASE)
IN CASH AND CASH EQUIVALENTS
CASH AND CASH EQUIVALENTS -BEGINNING OF YEAR
CASH AND CASH EQUIVALENTS -END OF YEAR
RECONCILIATION OF OPERATING LOSS TO
NET CASH USED BY OPERATING ACTIVITIES:
Operating loss
Adjustments to reconcile operating loss to net cash
used by operating activities:
Depreciation
Changes in operating assets and liabilities:
Decrease in accounts payable and accrued liabilities
NET CASH USED BY OPERATING
ACTIVITIES
See accompanying notes to financial statements.
29
$
Equipment
Replacement
Internal
Service
Fund
85,050
(155,686)
(70,636)
(51 ,996)
49,901
(72,731)
2,691,414
$ 2,618,683
$ (275,196)
205,674
(1,114)
$ (70,636)
A-57
CITY OF RANCHO PALOS VERDES
STATEMENT OF FIDUCIARY NET POSITION
FIDUCIARY FUND
ASSETS
Cash and investments
Interest receivable
Prepaid costs
TOTAL ASSETS
LIABILITIES
CURRENT LIABILITIES:
Current portion of noncurrent liabilities
TOTAL CURRENT LIABILITIES
NONCURRENT LIABILITIES:
Due beyond one year
TOTAL NONCURRENT LIABILITIES
TOTAL LIABILITIES
NET POSITION (DEFICIT) HELD IN TRUST
See accompanying notes to financial statements.
June 30,2020
30
Successor Agency
Private-Purpose
Trust Fund
$
$
309,666
353
356,125
666,144
489,551
489,551
13,677,158
13,677,158
14,166,709
{1325002565)
A-58
CITY OF RANCHO PALOS VERDES
STATEMENT OF CHANGES IN FIDUCIARY NET POSITION
FIDUCIARY FUNDS
For the year ended June 30, 2020
ADDITIONS:
Taxes
Use of money and property
Miscellaneous
TOTAL ADDITIONS
DEDUCTIONS:
Administration
Debt interest and fiscal charges
TOTAL DEDUCTIONS
CHANGE IN NET POSITION
NET POSITION (DEFICIT) -BEGINNING OF YEAR
NET POSITION (DEFICIT) -END OF YEAR
See accompanying notes to financial statements.
31
Successor Agency
Private-Purpose
Trust Fund
$ 769,327
3,408
1,548
774,283
51,727
362,050
413,777
360,506
(13,861,071)
$ {13,500,565}
A-59
(THIS PAGE INTENTIONALLY LEFT BLANK)
32
A-60
NOTES TO FINANCIAL STATEMENTS
A-61
A-62
CITY OF RANCHO PALOS VERDES, CALIFORNIA
Notes to Financial Statements
June 30, 2020
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The accounting policies of the City of Rancho Palos Verdes (the "City") conform to accounting principles
generally accepted in the United States of America as applicable to governments. The Governmental
Accounting Standards Board ("GASB") is the accepted standard setting body for governmental accounting
and financial reporting principles. The following is a summary of the significant policies.
A. Reporting Entity
The reporting entity, "City of Rancho Palos Verdes", includes the accounts of the City and the Joint Powers
Improvement Authority (the Authority). The City was incorporated on September 7, 1973, as a General
Law City and operates under a Council/Manager form of government.
The City sponsored the formation of a Redevelopment Agency in 1984 pursuant to the State of California
Health and Safety Code Section 33000 entitled "Community Redevelopment Law" with a purpose to
finance long-term capital improvements designed to eliminate physical and economic blight in a project
area through stabilization of hazardous landslides. Effective February 1, 2012, pursuant to state law, the
Redevelopment Agency was dissolved and its assets were transferred to a Successor Agency for the
purpose of winding down the business of the former Redevelopment Agency (see Note 14 ). The Successor
Agency is a separate legal entity that is a related organization to the City; but is not a component unit, as
described more fully below.
The Authority was formed on September 4, 1990, in accordance with the provisions of the Reimbursement
and Settlement Agreement, dated October 27, 1987, entered into by the City, the former Redevelopment
Agency, and the County of Los Angeles (County) in connection with the Horan Lawsuit. The Agreement
requires funds to be set aside and expended by the Authority to maintain landslide abatement
improvements installed and constructed by the former Redevelopment Agency.
The City of Rancho Palos Verdes is the primary government unit. Component units are legally separate
organizations for which the elected officials of the primary government are financially accountable. In
addition, component units can be other organizations for which the nature and significance of their
relationship with the primary government are such that exclusion would cause the reporting entity's
financial statements to be misleading. The City has accounted for the Authority as a "blended" component
unit. The balances and transactions of the Authority are reported in separate Permanent and Special
Revenue Funds; and are included in the government-wide statements.
The following specific criteria were used in determining that the Authority is a "blended" component unit.
• The members of the City Council also act as members ofthe Authority Board.
• The Authority is fiscally dependent on the City, and there is potential for the Authority to impose
specific financial burdens on the City; as the City subsidizes maintenance operations performed by
the Authority and the City is legally liable for facilities maintained by the Authority.
Separately issued financial statements for the Authority may be obtained at the City's administrative
offices.
The Successor Agency does not meet the criteria for reporting as a component unit, as it is not fiscally
dependent on the City. In addition, the business of the Successor Agency must be approved by an
independently appointed Oversight Board and the California Department of Finance. Therefore, the
balances and transactions of the Successor Agency are reported as a separate Fiduciary Fund (private
purpose trust fund), and are not included in the government-wide statements.
33
A-63
CITY OF RANCHO PALOS VERDES, CALIFORNIA
Notes to Financial Statements
June 30, 2020
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
A. Reporting Entity (Continued)
Participation in Public Entity Jointly Controlled Government
The City is a member of the Palos Verdes Peninsula Transit Joint Powers Authority (the Transit Authority).
The Transit Authority is comprised of three member cities and is organized under a Joint Powers
Agreement pursuant to the California Government Code. The purpose of the Authority is to study,
implement, and provide a public transit system within and around the Palos Verdes Peninsula. These
transit services include Palos Verdes Transit, Dial-A-Ride, and a fixed route shuttle service. Periodic
deposits are paid by member Cities and are adjusted retrospectively to cover costs. Costs are prorated
among all participating Cities based on population.
The City does not have an equity interest in the Transit Authority; therefore, no amount has been reported
in the Statement of Net Position. However, the City does have an ongoing financial interest because the
City is able to influence the operations of the Authority so that the Authority uses its resources on behalf
of the City. Also, an ongoing financial responsibility exists because the Authority is dependent on
continued funding from the City. The condensed financial information of the Authority has not been
reproduced in this report, but is available upon request from the Authority by emailing
pvtransit@palosverdes.com or mailing a request to P.O. Box 2656, Palos Verdes Peninsula, CA 90274.
B. Description of Funds
The accounts of the City are organized on the basis of funds, each of which is considered a separate
accounting entity. The operations of each fund are accounted for with a separate set of self-balancing
accounts that comprise its assets, liabilities, deferred outflows/inflows, fund equity, revenues, and
expenditures. The following are types of funds used.
Governmental Fund Types
General Fund-Used to account for all financial resources except those that are required to be accounted
for in another fund. The financial resources accounted for in the General Fund may be used to fund any
City program.
Special Revenue Funds-Used to account for the proceeds of specific revenue sources that are restricted
by law or administrative action for specified purposes.
Capital Projects Funds -Used to account for financial resources used for the construction of specific
capital projects.
Permanent Funds -Used to account for resources legally restricted to the extent that only earnings, and
not principal, may be used for purposes that support the reporting government's programs.
Proprietary Fund Types
Internal Service Funds -Used to centralize the accounting for purchases of equipment, furniture and
vehicles on behalf of all City departments, and the accumulation of funds for replacement of certain
buildings on behalf of the City.
34
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CITY OF RANCHO PALOS VERDES, CALIFORNIA
Notes to Financial Statements
June 30, 2020
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
B. Description of Funds (Continued)
Fiduciary Fund Type
Private-Purpose Trust Fund-Used to account for property tax revenue allocated to the Successor Agency
and payments of the obligations of the former Redevelopment Agency.
C. Basis of Accounting/Measurement Focus
Government-Wide Financial Statements
The City's Government-Wide Financial Statements include a "Statement of Net Position" and a
"Statement of Activities." These two statements present a summary of Governmental Activities for the
City; and do not include fiduciary activities. These statements are presented on an "economic resources"
measurement focus and the accrual basis of accounting. Accordingly, all of the City's assets, deferred
outflows of resources, liabilities, and deferred inflows of resources; including capital assets,
infrastructure, and long-term debt, are included in the accompanying Statement of Net Position. The
Statement of Activities presents changes in net position. Under the accrual basis of accounting, revenues
are recognized in the period in which they are earned, while expenses are recognized in the period in
which the liability is incurred. The Statement of Activities demonstrates the degree to which the direct
expenses of a given function are offset by program revenues. Direct expenses are those that are clearly
identifiable with a specific function. Program revenue transactions for the City are reported in three
categories: 1) Charges for Services, 2) Operating Grants and Contributions, and 3) Capital Grants and
Contributions. Charges for Services include revenues from customers or applicants who purchase, use, or
directly benefit from goods, services, or privileges provided by a given function. Operating Grants and
Contributions include revenues restricted to meeting the requirements of a particular operating function
and may include state shared revenues and grants. Capital Grants and Contributions include revenues
restricted to meeting the requirements of a particular capital function and may include grants and
developer fees. Taxes and other items not properly included among program revenues are reported instead
as general revenues. As a general rule, the effect of inter-fund activity has been eliminated from the
Government-Wide Financial Statements.
Governmental Fund Financial Statements
Governmental fund financial statements include a "Balance Sheet-Governmental Funds" and "Statement
of Revenues, Expenditures, and Changes in Fund Balances-Governmental Funds" for all major and other
governmental funds. An accompanying schedule is presented to reconcile and explain the differences in
fund balances as presented in these statements to the Net Position presented in the Government-Wide
Financial Statements.
The City 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 Capital Improvement Capital Projects Fund is used to account for funds used for the City's capital
improvement projects.
35
A-65
CITY OF RANCHO PALOS VERDES, CALIFORNIA
Notes to Financial Statements
June 30,2020
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
C. Basis of Accounting/Measurement Focus (Continued)
Governmental Fund Financial Statements (Continued)
All governmental funds are accounted for on a spending or "current financial resources" measurement
focus and the modified accrual basis of accounting. Under the "current financial resources" measurement
focus, generally only current assets, current liabilities and deferred inflows are reported on the balance
sheets. The Statement of Revenues, Expenditures and Changes in Fund Balances present increases
(revenues and other financing sources) and decreases (expenditures and other financing uses) in fund
balances. Revenues are recognized in the accounting period in which they become susceptible to accrual,
that is, when they become both measurable and available to finance expenditures of the current period.
"Measurable" means that the amount of the transaction can be determined, and "available" means
collectible within the current period or soon enough thereafter to be used to pay liabilities of the current
period. Accrued revenues include property taxes received within 60 days after year-end, taxpayer-assessed
taxes such as sales taxes, and earnings on investments. Grant funds earned but not received are recorded
as a receivable, and grant funds received before the revenue recognition criteria have been met are
reported as unearned revenues. Expenditures are recorded when the fund liability is incurred, if
measurable, except for interest on general long-term debt that has not yet matured, which is recognized
when due.
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 noncurrent) associated
with the activity are included on the balance sheet. Fund equity is presented as total net position. The
operating statement of proprietary funds presents increases (revenues) and decreases (expenses) in total
net position. Revenues are recognized when they are earned and expenses are recognized when the
liability is incurred.
Proprietary funds distinguish operating revenues and expenses from non-operating items. Operating
revenues and expenses generally result from providing services and producing and delivering goods in
connection with a proprietary fund's principal ongoing operations. The principal operating revenues of
the City's internal service fund are charges for services. Operating expenses for the internal service fund
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 an internal service fund to finance and account for goods and services provided by one City
department to other City departments, including the purchase and maintenance of equipment. The City's
internal service fund is 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 fund are consolidated into the governmental activities column when presented in the government-
wide financial statements. To the extent possible, the cost of these services is reported in the appropriate
functional activity (administration, public safety, public works, etc.).
36
A-66
CITY OF RANCHO PALOS VERDES, CALIFORNIA
Notes to Financial Statements
June 30,2020
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
C. Basis of Accounting/Measurement Focus (Continued)
Fiduciary Fund Financial Statements
The fiduciary private-purpose trust fund type is accounted for using the economic resources measurement
focus and accrual basis of accounting similar to the proprietary funds.
The City reports the following fiduciary fund.
The assets and liabilities of the former Redevelopment Agency were transferred to the Successor Agency
as part of the business of redevelopment dissolution. The Successor Agency private-purpose trust fund
accounts for the changes in the former Redevelopment Agency's assets and liabilities until they are
disposed of through dissolution. This fund also accounts for the administrative costs associated with
dissolution.
D. Budgetary Accounting
Annual budgets are adopted on a basis consistent with accounting principles generally accepted in the
United States of America for all governmental funds. All annual appropriations lapse at fiscal year-end.
Budget control is maintained over all accounts, and expenditures are not allowed to exceed appropriations
at the department level. Throughout the year, the City Council made several budgetary adjustments to the
General fund, Special Revenue funds, Capital Projects funds, and Permanent funds.
Under Article XIIIB of the California Constitution (the Gann Spending Limitation Initiative), the City is
restricted as to the amount of annual appropriations from the proceeds of taxes, and if proceeds of taxes
exceed allowed appropriations, the 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, 2020, based on calculations by
City Management, the proceeds of taxes in the amount of$25.5 million did not exceed appropriation limit
of $31.3 million.
E. Capital Assets
Capital assets include land, construction in progress, building and improvements, vehicles, computer
equipment, furniture, fixtures and equipment, and infrastructure assets (street systems, storm drains, sewer
systems, etc.). Capital assets are defined by the City as all land and buildings, vehicles, computers and
equipment with an initial individual cost of more than $5,000; and improvements and infrastructure assets
with construction 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 acquisition
value at the date of donation or annexation.
37
A-67
CITY OF RANCHO PALOS VERDES, CALIFORNIA
Notes to Financial Statements
June 30, 2020
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
E. Capital Assets (Continued)
The costs of normal maintenance and repairs that do not add to the value of the asset or materially extend
assets lives are not capitalized. Depreciation is recorded in the Government-Wide Financial Statements
on a straight-line basis over the useful life of the assets as follows:
Buildings and Improvements
Vehicles, Computers, and Equipment
Infrastructure Assets
Roadway Network
Sewer Network
Storm Drain Network
Parks and Recreation Network
F. Employee Compensated Absences
25 to 50 years
3 to 10 years
1 0 to 100 years
25 to 50 years
30 to 100 years
25 years
City employees may receive from 10 to 20 days of vacation time each year, depending upon length of
service. An employee may accumulate earned vacation time up to a maximum of two years' worth of
accrued vacation leave. Upon termination, employees are paid the full value of their unused vacation time
at their existing salary.
City employees accrue 96 hours of sick leave each year with a maximum accrual of 720 hours. However,
unused sick leave is never paid out to the employee upon separation; and therefore, the City does not
accrue a liability.
The General Fund will primarily be used to liquidate the liability for compensated absences in future
years. Any liability for compensated absences is only carried in the General Fund if there is unused/unpaid
leave outstanding following an employee's separation.
G. Investments
Investments are reported at fair value which is the amount at which financial instruments could be
exchanged in a current transaction between willing parties. All fair values are determined by external
consultants. Investments are measured at fair value on a recurring basis. Recurring fair value
measurements are those that Governmental Accounting Standards Board (GASB) Statements require or
permit in the statement of net position at the end of each reporting period.
H. Cash and Investments
The Equipment Replacement Internal Service Fund participates in the pooling of City-wide cash and
investments. Amounts from the pool are available to this fund on demand. Therefore, the cash and
investments reported in this fund is considered to be cash and cash equivalents for purpose of the statement
of cash flows.
38
A-68
CITY OF RANCHO PALOS VERDES, CALIFORNIA
Notes to Financial Statements
June 30,2020
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
I. Claims and Judgments
When it is probable that a claim liability has been incurred, and the amount of the loss can be reasonably
estimated, the City records the estimated loss, net of any insurance coverage under its self-insurance
program. Small claims and judgments are recorded as expenditures when paid.
The City's self-insurance program is administered through the California Joint Powers Authority
(the CJPIA), which is described at Note 9. The CJPIA is a public entity risk pool. The City records
amounts deposited with CJPIA as insurance expenditures in the General Fund.
J. Prepaid Items
Certain payments to vendors reflect costs applicable to future accounting periods and are recorded as
prepaid items using the consumption method. In governmental funds, the prepaid assets recorded do not
reflect current appropriable resources and thus, an equivalent portion of fund balance is reported as
non-spendable. The City had a total of$212,648 of prepaid items as of June 30, 2020.
K. Estimates
The preparation of financial statements in conformity with accounting principles generally accepted in
the United States of America requires management to make estimates and assumptions that affect certain
reported amounts and disclosures. Accordingly, actual results could differ from those estimates.
L. Net Position and Fund Balance Flow Assumptions
When both restricted and unrestricted resources are available for use, it is the City's policy to use restricted
resources first. When unrestricted resources (committed, assigned or unassigned) are available for use, it
is the City's policy to use committed resources first, assigned resources second and finally unassigned
resources.
M. Deferred Inflows and Outflows
In addition to assets, the statement of net position will sometimes report a separate section for deferred
outflows of resources. This separate financial statement element, deferred outflows of resources,
represents a consumption of net position that applies to a future period and will not be recognized as an
outflow of resources (expense/expenditure) until that time. The City has the following items that qualifY
for reporting in this category:
• Deferred outflows related to pensions equal to employer contributions made after the measurement
date of the net pension liability.
• Deferred outflows related to pensions for differences between expected and actual experiences, and
for changes of assumptions. These amounts are amortized over a closed period equal to the average
of the expected remaining service lives of all employees that are provided with pensions through the
plans.
39
A-69
CITY OF RANCHO PALOS VERDES, CALIFORNIA
Notes to Financial Statements
June 30,2020
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
M. Deferred Inflows and Outflows (Continued)
In addition to liabilities, the statement of net position and the governmental funds balance sheet will
sometimes report a separate section for deferred inflows of resources. This separate financial statement
element, deferred inflows of resources, represents an acquisition of net position that applies to a future
period and will not be recognized as an inflow of resources (revenue) until that time. The City has the
following items that qualify for reporting in this category:
• Deferred inflows from unavailable revenues, which are reported only in the governmental funds
balance sheet. The governmental funds report unavailable revenues from one source: grants. These
amounts are deferred and recognized as an inflow of resources in the period that the amounts become
available.
• Deferred inflows related to pensions for differences between expected and actual experience, for
changes of assumptions, and for changes in employer's proportion and differences between
employer's contributions and the employer's proportionate share of contributions. These amounts are
amortized over a closed period equal to the average of the expected remaining service lives of all
employees that are provided with pensions through the plans.
• Deferred inflows related to pensions for the net differences between projected and actual earnings on
plan investments. These amounts are amortized over five years.
N. New Accounting Pronouncements
Current Year Standards
In May 2020, GASB issued Statement No. 95, Postponement of the Effective Dates of Certain Authority
Guidance, which was effective immediately. This Statement provided temporary relief to governments
and other stakeholders in light of the COVID-19 pandemic and postponed the effective dates of certain
provisions in Statements and Implementation Guides that first became effective or are scheduled to
become effective for periods beginning after June 15, 2018, and later.
In June 2020, GASB issued Statement No. 97 -Certain Component Unit Criteria, and Accounting and
Financial Reporting for Internal Revenue Code Section 457 Deferred Compensation Plans-an
amendment of GASB Statements No. 14 and No. 84, and a supersession of GASB Statement No. 32.
Paragraph 4 of this Statement requires that for purposes of determining whether a primary government is
financially accountable for a potential component unit, except for a potential component unit that is a
defined contribution pension plan, a defined contribution OPEB plan, or an other employee benefit plan
(for example, certain Section 457 plans), the absence of a governing board should be treated the same as
the appointment of a voting majority of a governing board if the primary government performs the duties
that a governing board typically would perform. Paragraph 5 of this Statement also requires that the
financial burden criterion in paragraph 7 of Statement No. 84, Fiduciary Activities, be applicable to only
defined benefit pension plans and defined benefit OPEB plans that are administered through trusts that
meet the criteria in paragraph 3 of Statement No. 67, Financial Reporting/or Pension Plans, or paragraph
3 of Statement No. 74, Financial Reporting for Postemployment Benefit Plans Other Than Pension Plans,
respectively.
The requirements of these statements did not impact the City.
40
A-70
CITY OF RANCHO PALOS VERDES, CALIFORNIA
Notes to Financial Statements
June 30,2020
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
N. New Accounting Pronouncements (Continued)
Pending Accounting Standards
GASB has issued the following statements, which may impact the City's financial reporting requirements
in the future:
In January 2017, GASB issued Statement No. 84 -Fiduciary Activities. This Statement establishes
criteria for identifying fiduciary activities of all state and local governments. The focus of the criteria
generally is on (1) whether a government is controlling the assets of the fiduciary activity and (2) the
beneficiaries with whom a fiduciary relationship exists. Separate criteria are included to identify fiduciary
component units and postemployment benefit arrangements that are fiduciary activities. An activity
meeting the criteria should be reported in a fiduciary fund in the financial statements. This Statement also
provides for recognition of a liability to the beneficiaries in a fiduciary fund when an event has occurred
that compels the government to disburse fiduciary resources. Events that compel a government to disburse
fiduciary resources occur when a demand for the resources has been made or when no further action,
approval, or condition is required to be taken or met by the beneficiary to release the assets. The
requirements of this Statement are effective for reporting periods beginning after December 15, 2019.
In June 2017, GASB issued Statement No. 87-Leases. This statement requires recognition of certain
lease assets and liabilities for leases that previously were classified as operating leases and recognized as
inflows of resources or outflows of resources based on the payment provisions of the contract. It
establishes a single model for lease accounting based on the foundational principle that leases are
financings of the right to use an underlying asset for leases with a term of more than 12 months. Under
this Statement, a lessee is required to recognize a lease liability and an intangible right-to-use lease asset,
and a lessor is required to recognize a lease receivable and a deferred inflow of resources, thereby
enhancing the relevance and consistency of information about governments' leasing activities. For leases
with a term of 12 months or less, lessees and lessors should recognize short-term lease payments as
outflows of resources or inflows of resources, respectively, based on the payment provisions of the lease
contract. The requirements of this Statement are effective for reporting periods beginning after June 15,
2021, early application is encouraged.
In January 2020, GASB issued Statement No. 92-Omnibus 2020. This Statement addresses practice
issues that have been identified during implementation and application of certain GASB Statements. This
Statement addresses a variety of topics including issues related to leases, fiduciary activities,
measurement of liabilities (and assets, if any) related to asset retirement obligations (AROs) in a
government acquisition, reporting by public entity risk pools for amounts that are recoverable from
reinsurers or excess insurers, reference to nonrecurring fair value measurements of assets or liabilities in
authoritative literature and terminology used to refer to derivative instruments.
41
A-71
CITY OF RANCHO PALOS VERDES, CALIFORNIA
Notes to Financial Statements
June 30,2020
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
N. New Accounting Pronouncements (Continued)
Pending Accounting Standards (Continued)
The requirements of Statement No. 92 are effective as follows:
• The requirements related to the effective date of Statement 87 and Implementation Guide 2019-3,
reinsurance recoveries, and terminology used to refer to derivative instruments are effective upon
issuance.
• The requirements related to intra-entity transfers of assets and those related to the applicability of
Statements 73 and 74 are effective for fiscal years beginning after June 15,2021.
• The requirements related to application of Statement 84 to postemployment benefit arrangements and
those related to nonrecurring fair value measurements of assets or liabilities are effective for reporting
periods beginning after June 15, 2021.
• The requirements related to the measurement of liabilities (and assets, if any) associated with AROs
in a government acquisition are effective for government acquisitions occurring in reporting periods
beginning after June 15, 2021.
In June 2020, GASB issued Statement No. 97 -Certain Component Unit Criteria, and Accounting and
Financial Reporting for Internal Revenue Code Section 457 Deferred Compensation Plans-an
amendment ofGASB Statements No. 14 and No. 84, and a supersession ofGASB Statement No. 32. This
Statement requires that a Section 457 plan be classified as either a pension plan or an other employee
benefit plan depending on whether the plan meets the definition of a pension plan and clarifies that
Statement 84, as amended, should be applied to all arrangements organized under IRC Section 457 to
determine whether those arrangements should be reported as fiduciary activities. This Statement
supersedes the remaining provisions of Statement No. 32, Accounting and Financial Reporting for
Internal Revenue Code Section 457 Deferred Compensation Plans, as amended, regarding investment
valuation requirements for Section 457 plans. As a result, investments of all Section 457 plans should be
measured as of the end of the plan's reporting period in all circumstances. The requirements of this
Statement are effective for fiscal years beginning after June 15, 2021. Earlier application of those
requirements is encouraged and permitted.
0. Pensions
For purposes of measuring the net pension liability and deferred outflows/inflows of resources related to
pensions, and pension expense, information about the fiduciary net position of the City's California Public
Employees' Retirement System (CalPERS) plans (Plans) and additions to/deductions from the Plans'
fiduciary net position have been determined on the same basis as they are reported by CalPERS. For this
purpose, benefit payments (including refunds of employee contributions) are recognized when due and
payable in accordance with the benefit terms. Investments are reported at fair value.
42
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CITY OF RANCHO PALOS VERDES, CALIFORNIA
Notes to Financial Statements
June 30, 2020
2. CASH AND INVESTMENTS
Cash and investments as of June 30, 2020, are classified in the accompanying financial statements as follows:
Total cash and investments
Government-Wide
Statement of
Net Position
$ 66,869,944
Fiduciary Fund
Statement of Fiduciary
Net Position
$ 309,666
Cash and investments as of June 30, 2020 consist of the following:
Petty Cash
Deposits with Financial Institutions
Certificates of Deposit
Money Market Mutual Funds
U.S. Treasury Obligations
Local Agency Investment Fund (LAIF)
Total
$ 67,179,610
$ 5,000
3,076,975
21,724,963
1,038,546
4,000,000
37,334,126
$ 67,179,610
Investments Authorized by the California Government Code and the City of Rancho Palos Verdes' Investment
Policy.
The table below identifies the investment types that are authorized for the City of Rancho Palos Verdes by the
California Government Code (or the City's investment policy, where more restrictive). The table also
identifies certain provisions of the California Government Code (or the City's investment policy, where more
restrictive) that address interest rate risk, and concentration of credit risk.
Maximum
Amount or
Maximum Percent of Maximum
Authorized Investment T~Ee Maturity Portfolio in One Issuer
U.S. Treasury Obligations 3 years None None
Certificates of Deposit 5 years None None
Negotiable Certificates of Deposit 5 years 30% None
Repurchase Agreements 7 days 15% None
Money Market Mutual Funds N/A 15% None
Local Agency Investment Fund (LAIF) N/A None None
Money Market Savings/Demand Deposits N/A 15% $5 million
43
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CITY OF RANCHO PALOS VERDES, CALIFORNIA
Notes to Financial Statements
June 30,2020
2. CASH AND INVESTMENTS (CONTINUED)
Disclosures Relating to Interest Rate Risk
Interest rate risk is the risk that changes in market interest rates will adversely affect fair value of an
investment. Generally, the longer the maturity of an investment, there is a greater sensitivity of its fair value
to changes in market interest rates. The City manages its exposure to interest rate risk by investing with the
Local Agency Investment Fund (LAIF) such that the portfolio provides cash flows and liquidity need for
operations. The City's investment is represented by shares in the pool, which can be withdrawn in one business
day. The average maturity of the pool is less than one year.
Investment TYPe
Certificates of Deposit
Money Market Mutual Funds
U.S. Treasury Obligations
Local Agency Investment Fund (LAIF)
Total
Remaining
Maturity
0-6 months
$ 1,750,000
1,038,546
2,000,000
37,334,126
$ 42,122,672
Disclosures Relating to Credit Risk
6-12 months
$ 1,750,000
$ 1,750,000
12-36 months 36-60 months Total
$ 14,974,963 $ 3,250,000 $ 21,724,963
1,038,546
2,000,000 4,000,000
37,334,126
$ 16,974,963 $ 3,250,000 $ 64,097,635
Generally, credit risk is the risk that an issuer of an investment will not fulfill its obligation to the holder of
the investment. This is measured by the assignment of a rating by a nationally recognized statistical rating
organization. The certificates of deposit, negotiable certificates of deposit, and LAIF are not rated. The money
market funds are rated AAA.
Concentration of Credit Risk
The investment policy ofthe 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.
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.
44
A-74
CITY OF RANCHO PALOS VERDES, CALIFORNIA
Notes to Financial Statements
June 30,2020
2. CASH AND INVESTMENTS (CONTINUED)
Custodial Credit Risk (Continued)
The City's deposits with financial institutions in excess of federal depository insurance limits were held in
collateralized accounts, but not in the name of the City. The financial institutions that held the uninsured
deposits are legally required by the California Government Code to collateralize the City's deposits as noted
above.
Investment in Local Agency Investment Fund (LAIF)
The City of Rancho Palos Verdes is a voluntary participant in LAIF that is regulated by California Government
Code Section 16429 under the oversight of the Treasurer of the State of California. The fair value of the City
of Rancho Palos Verdes' investment in this pool is based upon the City of Rancho Palos Verdes' pro-rata share
of the fair value provided by LAIF for the entire pool portfolio (in relation to the amortized cost of that
portfolio). The balance available for withdrawal is based on the accounting records maintained by LAIF,
which are recorded on an amortized cost basis.
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 ofLAIF fall under the auspices of the State Treasurer's office.
Fair Value Classifications
The City categorized its fair value measurements within the fair value hierarchy established by generally
accepted accounting principles. The hierarchy is based on the valuation inputs used to measure the fair value
of the asset. Level 1 inputs are quoted prices in active markets for identical assets; Level 2 inputs are quoted
prices for similar assets in active markets, Level 3 inputs are significant unobservable inputs.
The fair value of the City's investments in U. S. Treasury Obligations is based on Level2 inputs. The City's
investments in FDIC insured certificates of deposits, money market funds and LAIF are not subject to the fair
value hierarchy.
3. INTERFUND TRANSACTIONS
Interfund Receivable/Payable
The $451,708 due to the General Fund from Other Governmental Funds ($32,679 from the Measure A Fund
and $419,029 from the State Grants Fund) is the result of loans to cover temporary deficit cash balances.
45
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CITY OF RANCHO PALOS VERDES, CALIFORNIA
Notes to Financial Statements
June 30,2020
3. INTERFUND TRANSACTIONS (CONTINUED)
Interfund Transfers
lnterfund transfers for the year ended June 30, 2020, consisted of the following:
Transfer From
Other
General Governmental
Transfer To Fund Funds Totals
General Fund $ $ 275,000 $ 275,000
Capital Improvement Projects 2,410,752 98,300 2,509,052
Other Governmental Funds 140,000 140,000
Total $ 2,550,752 $ 373 300 $ 2,924,052
Transfers are used to: (1) move revenues from the fund that statute or budget requires for collection to the
fund that statute or budget requires for expenditure; (2) use unrestricted revenues collected in the General
Fund to finance various programs accounted for in other funds in accordance with budgetary authorizations
or grant matching requirements; and, (3) return money that was originally transferred from the General Fund
to another fund, yet not used.
The General Fund transferred a total of $2,550,752 to other funds. Of this amount, $2,410,752 was transferred
to the Capital Improvement Projects (CIP) Fund as a CIP Reserve for future infrastructure projects, as required
by the City Council's Reserve Policy. The remaining $140,000 was transferred to the following Other
Governmental Funds: $50,000 to the Improvement Authority Abalone Cove to subsidize annual maintenance
of landslide mitigation facilities; $55,000 to the Improvement Authority Portuguese Bend to subsidize annual
maintenance of landslide mitigation facilities; and, $35,000 to the Subregion 1 Fund to subsidize landscape
maintenance. The General Fund received $275,000 from the following Other Governmental Funds: $175,000
from the Public Safety Grants Fund to supplement the special community resource policing team for the
deputy cost within the Sheriff program of the public safety section of the budget; and, $100,000 from the
Measure A Maintenance Fund to fund parks, trails, and open space maintenance within the General Fund for
fuel modification in the open space areas. The Capital Improvement Projects (CIP) Fund received $98,300
during the year from Other Governmental Funds (Federal Grants Fund) to reimburse for project costs.
46
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CITY OF RANCHO PALOS VERDES, CALIFORNIA
Notes to Financial Statements
June 30, 2020
4. CAPITAL ASSETS AND DEPRECIATION
The City has reported all capital assets including infrastructure in the Government-Wide Statement of Net
Position. The City elected to use the basic reporting approach as defined by GASB Statement No. 34 for all
infrastructures, whereby depreciation expense and accumulated depreciation has been recorded. The
following tables present the capital assets activity for the year ended June 30, 2020.
Beginning Ending
Balance Increases Decreases Balance
Governmental Activities
Capital assets not being depreciated:
Land $ 43,515,818 $ 12,807 $ $ 43,528,625
Construction in progress 3,130,630 4,656,077 (3,151,4992 4,635,208
Total capital assets not
being depreciated 46,646,448 4,668,884 (3,151,4992 48,163,833
Capital assets being depreciated:
Building and improvements 14,281,198 14,281,198
Vehicles 511,560 39,768 551,328
Computer equipment 989,151 989,151
Equipment -water quality 11,813 11,813
Furniture, fixtures and equipment 913,635 62,589 976,224
Infrastructure
Roadway system 121,642,288 256,027 121,898,315
Sewer system 25,965,995 25,965,995
Storm drain system 13,660,322 22,500 13,682,822
Storm drain system -water quality 34,512,356 2,339,284 36,851,640
Parks system 7,609,857 343,356 7,953d13
Total capital assets
being depreciated 220,098,175 3,063,524 223,161,699
Less accumulated depreciation for:
Buildings and improvements (7,088,021) (266,173) (7,354,194)
Vehicles (407,137) (40,513) (447,650)
Computer equipment (898,010) (66,561) (964,571)
Equipment -water quality (11,813) (11,813)
Furniture, fiXtures and equipment (725,258) (99,690) (824,948)
Infrastructure
Roadway system (65,511,229) ( 4,254,456) (69,765,685)
Sewer system (21,028,130) (453,755) (21,481,885)
Storm drain system ( 4,988,807) (268,110) (5,256,917)
Storm drain system -water quality ( 4,089,595) (808,920) (4,898,515)
Parks system (2,439,7892 (309,7382 (2,749,5272
Total accumulated depreciation (107,187,7892 (6,567,9162 (113,755,7052
Total capital assets
being depreciated, net 112 910,386 (3,504,3922 109,405,994
Governmental activities
capital assets, net $ 159,556,834 $ 1164492 $ (3,151,4992 $ 1571569,827
47
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CITY OF RANCHO PALOS VERDES, CALIFORNIA
Notes to Financial Statements
June 30,2020
4. CAPITAL ASSETS AND DEPRECIATION (CONTINUED)
5.
Depreciation expense was charged to functions/programs of the primary government as follows:
Administration (depreciation of buildings and some furniture)
Public Works (depreciation of roadways, sewers, and storm drains)
Parks and recreation (depreciation of parks system)
Capital assets held by the City's internal service funds are charged
to various functions based on their usage of the assets
Total Depreciation Expense -Governmental Activities
NOTES RECEIVABLE
Affordable Housing
Community Development Block Grant
Subtotal
Receivable from Successor Agency
Allowance from Successor Agency receivable
Total Notes Receivable
The receivable from the Successor Agency is discussed further in Note 14.
Affordable Housing
$ 267,263
5,785,241
309,738
205,674
$ 6,567,916
Notes
Receivable
$ 8,153,675
316,466
8,470,141
10,656,709
(I 0,656, 709)
$ 8,470,141
In March 2009, the former Redevelopment Agency (RDA) entered into a Disposition and Development
Agreement (DDA) with AMCAL Mirandela Fund LP (AMCAL). Under the DDA, the former RDA provided
financial assistance to AMCAL in an amount up to $6,790,000 to develop a thirty-four unit senior housing
project. The loan accrues simple interest at a rate of3% per annum on the amounts disbursed. The note is due
December 22, 2065. The balance of note receivable from AMCAL including accrued unpaid interest of
$1,883,131 at June 30, 2020 was $8,153,675.
In March 2011, the former RDA sold an affordable housing condominium to an individual for $350,000. In
connection with the sale, the buyer issued a secured promissory note in the amount of $126,320. The note
bears no interest and principal is payable upon default by the owner (or any successors' owner) under a
regulatory agreement that requires the condominium to be occupied by person or families of moderate income.
If no such default has occurred by February 22, 2056, the principal will be forgiven. Due to the nature of this
loan, the outstanding balance has been offset in full by an allowance for uncollectability.
As part of redevelopment dissolution, these two long-term notes receivable were transferred to the housing
successor (the City), which elected to retain the housing assets and function of the former Redevelopment
Agency.
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CITY OF RANCHO PALOS VERDES, CALIFORNIA
Notes to Financial Statements
June 30,2020
5. NOTES RECEIVABLE (CONTINUED)
Community Development Block Grant (CDBG)
As part ofthe City's CDBG program, the City extends loans to property owners meeting low and moderate
income requirements to make repairs and improvements to their homes. These notes receivable bear no
interest, and repayment is required when the title to the property is transferred or the property is re-financed.
The maximum loan amount per property is $13,000. Amounts repaid are returned to the CDBG program. The
total of these loans outstanding at June 30, 2020 is $316,466.
6. LONG-TERM LIABILITIES
Employee Compensated Absences
Balance
July 1, 2019
$ 400,504
Employee Compensated Absences
Additions
$ 313,514
Balance Amount Due
Deletions June 30,2020 in One Year
$ (310,817) $ 403,201 $ 312,910
There is no fixed payment schedule for employee compensated absences. Based on historical trends, $312,910
is estimated to be the amount that will be used and/or paid out during the fiscal year ended June 30, 2021.
7. CLASSIFICATIONS OF NET POSITION AND FUND BALANCE
Government-Wide Financial Statements
In the Government-Wide financial statements net position is classified in the following categories:
Net Investment in Capital Assets
This category groups all capital assets, including infrastructure, into one component of net position.
Accumulated depreciation on these assets reduces this category as does any outstanding balance on debt
incurred in acquiring or constructing the capital assets.
Restricted Net Position
This category presents external restrictions imposed by creditors, grantors, contributions or laws or regulations
of other governments and restrictions imposed by law through constitutional provisions or enabling
legislation.
Unrestricted Net Position
This category represents the difference between total net position and the two categories noted above: Net
Investment in Capital Assets and Restricted Net Position.
49
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CITY OF RANCHO PALOS VERDES, CALIFORNIA
Notes to Financial Statements
June 30,2020
7. CLASSIFICATIONS OF NET POSITION AND FUND BALANCE (CONTINUED)
Fund Financial Statements
The fund balances reported on the fund statements consist of the following categories:
Non-spendable-Amounts that are not in a spendable form (such as inventory and prepaid expenditures) or
are legally required to be maintained intact (such as the corpus of an endowment fund).
Restricted-Amounts constrained to specific purposes by their providers (such as grantors, bondholders, and
higher levels of government), through constitutional provisions, or by enabling legislation.
Committed-Amounts constrained to specific purposes by the City Council via a City Council resolution or
ordinance, which are considered to be equally binding. To be reported as committed, amounts cannot be used
for any other purpose unless the City Council adopts another resolution to remove or change the constraint.
Assigned -Amounts the City Council intends to use for a specific purpose, which is expressed by the City
Council via minute order.
Unassigned -Amounts that are available for any purpose; these amounts are reported only in the General
Fund. However, ifthere 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, 2020:
N onspendable:
In Form (inventory and prepaid)
Legally (endowment principal)
Restricted:
Public Works
Housing and Community Development
Transportation
Parks and Recreation
Public Safety
Committed:
Public Works
City Administration
Recreation and Parks
Assigned:
Public Works
Unassigned:
Unrestricted Fund Balance
Continued Appropriations
Governmental Fund Balance Totals
Capital
General Improvement
Fund Fund
$ 248,761 $
1,379,700
75,561
34,828
56,785
23,965,108
20,763,374
569,400
$ 21,748,709 $ 25,344,808
50
Other
Governmental
Funds
$
1,915,317
3,609,090
1,104,366
5,486,428
2,021,608
76,420
(214,935)
$ 13,998,294
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CITY OF RANCHO PALOS VERDES, CALIFORNIA
Notes to Financial Statements
June 30,2020
7. CLASSIFICATIONS OF NET POSITION AND FUND BALANCE (CONTINUED)
Non-Spendable Fund Balance
General Fund assets include $36,113 of inventory held for resale at the Point Vicente Interpretive Center gift
shop, and $212,648 of prepayments for expenditures related to the fiscal year ended June 30, 2021.
The fund balance of the Improvement Authority's Abalone Cove Fund includes a $1,000,000 non-spendable
endowment, as required by a Reimbursement and Settlement Agreement dated October 27, 1987 in connection
with the Horan Lawsuit (discussed further in Note 14).
The fund balance of the Subregion One Maintenance Fund includes a $750,000 non-spendable endowment,
as required by the developer agreement for the Subregion One tract.
Beginning with the fiscal year ended June 30, 2006, the City's Natural Communities Conservation Plan
requires a non-spendable endowment in the Habitat Restoration Fund to be funded at the rate of $10,000
annually (plus interest) for fifty (50) years, to provide for maintenance of habitat in the future. The balance of
$165,31 7 represents 15 years of annual $1 0,000 contributions plus interest earnings.
Restricted Fund Balance
The restricted balances of the City's Other Governmental Funds are constrained to use for specific purposes
by other governmental agencies, property owners, and grantors.
The $1,379,700 balance ofthe Capital Improvement Fund is restricted for ongoing improvements for streets,
building, parks, trails and open space, and Portuguese Bend's dewatering wells project.
Committed Fund Balance
The $167,174 balance ofthe General Fund is committed for ongoing projects approved by the City Council.
These projects can only be redesignated to other projects by City Council.
Assigned Fund Balance
The $23,965,108 balance ofthe Capital Improvement Projects Fund has been assigned for the planning, design
and construction of infrastructure projects.
Unassigned Fund Balance
City Council Policy No. 41 -Reserve Policies, adopted via resolution, requires the City to maintain a minimum
General Fund balance of at least fifty percent of annual operating expenditures. This reserve serves as a Rainy
Day Fund with a balance of$20,763,374 at June 30, 2020.
City Council approved to carry forward $569,400 ofFY 2019-20 General Fund appropriations to FY 2020-21.
51
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CITY OF RANCHO PALOS VERDES, CALIFORNIA
Notes to Financial Statements
June 30,2020
8. PENSION AND RETIREMENT HEALTH SAVINGS PLANS
Pension Plan Description
All qualified permanent and probationary employees are eligible to participate in the City of Rancho
Palos Verdes Employee Pension Plan, a cost-sharing multiple-employer defined benefit pension plan
administered by the California Public Employees Retirement System (CalPERS). The CalPERS Plan consists
of a miscellaneous pool and a safety pool (referred to as "risk pools"), which are comprised of individual
employer miscellaneous and safety rate plans, respectively. The risk pools are included within the Public
Employees' Retirement Fund C (PERF C). Benefit provisions under the Plan are established by State statute
and may be amended by City resolution. CalPERS issues publicly available reports that include a full
description of the pension plans regarding benefit provision, assumption and membership information that
can be found on the CALPERS website.
Benefits Provided
CalPERS provides service retirement and disability benefits, annual cost of living adjustments and death
benefits to plan members, who must be public employees and beneficiaries. Benefits are based on years of
credited service, equal to one year of full time employment. Members with five years of total service are
eligible to retire at age 50 with statutorily reduced benefits. All members are eligible for non-duty disability
benefits after 10 years of service. The death benefit is one ofthe following: The Basic Death Benefit, the 1957
Survivor Benefit, or the Optional Settlement 2W Death Benefit. The cost of living adjustments for each plan
are applied as specified by the Public Employees' Retirement Law.
The Public Employees' Pension Reform Act of 2013 (PEPRA) requires new benefits and member
contributions for new members as defined by PEPRA, that are hired after January 1, 2013. These PEPRA
members in pooled plans are reflected in the new Miscellaneous and Safety risk pools created by the CalPERS
Board in response to the passage ofPEPRA, beginning with the June 30, 2013, risk-pool valuations.
The Plan's provisions and benefits in effect at the June 30, 2019 measurement date, are summarized in the
following table.
Hire Date
Formula
Benefit vesting schedule
Benefit payments
Retirement age
Monthly benefits, as a % of annual compensation
Required employee contribution rates
Required employer contributions rates:
Normal cost rate
Payment of unfunded liability
Classic Tier 1
Prior to
January 1, 2013
2.5% at 55
5 years of service
monthly for life
55
2.50%
8%
10.609%
$ 613,118
52
Miscellaneous
Classic Tier 2 New Members
Prior to On or after
October 2, 2012 Janua!): 1, 2013
2.0% at 60 2.0% at 62
5 years of service 5 years of service
monthly for life monthly for life
60 62
2.00% 2.00%
7% 6.25%
7.634% 6.842%
$ 1,413 $ 1,011
A-82
CITY OF RANCHO PALOS VERDES, CALIFORNIA
Notes to Financial Statements
June 30,2020
8. PENSION AND RETIREMENT HEALTH SAVINGS PLANS (CONTINUED)
Contribution Description
Section 20814(c) of the California Public Employees' Retirement Law (PERL) requires that the employer
contribution rates for all public employers be determined on an annual basis by the actuary and shall be
effective on the July 1 following notice of a change in the rate. The total plan contributions are determined
through CALPERS' annual actuarial valuation process. The actuarially determined rate is the estimated
amount necessary to finance the costs of benefits earned by employees during the year, with an additional
amount to finance any unfunded accrued liability. The City is required to contribute the difference between
the actuarially determined rate and the contribution rate of employees. City contribution rates may change if
plan contracts are amended. Payments made by the employer to satisfy contribution requirements that are
identified by the pension plan terms as plan member contributions requirements are classified as plan member
contributions.
Pension Liabilities, Pension Expenses and Deferred Outflows/Inflows of Resources Related to Pensions
The City reported a net pension liability for its proportionate share of the net pension liability of the
Miscellaneous Plan as of June 30, 2020, in the amount of$11,918,073.
The City's net pension liability for the Miscellaneous Plan is measured as the proportionate share of the net
pension liability of the CALPERS cost sharing pool. The City's net pension liability of the Plan is measured
as of June 30, 2019, and the total pension liability for the Miscellaneous Plan used to calculate the net pension
liability was determined by an actuarial valuation as of June 30, 2018, rolled forward to June 30, 2019, using
standard update procedures. The City's proportion of the net pension liability was based on a projection of the
City's long-term share of contributions to the pension plans relative to the projected contributions of all
participating employers, actuarially determined.
The City's proportionate share of the net pension liability for the Miscellaneous Plan as of the June 30, 2018
and 2019 measurement dates was as follows:
Proportion-June 30, 2018
Proportion-June 30, 2019
Change -Increase (Decrease)
53
0.11334%
0.11631%
0.00297%
A-83
CITY OF RANCHO PALOS VERDES, CALIFORNIA
Notes to Financial Statements
June 30, 2020
8. PENSION AND RETIREMENT HEALTH SAVINGS PLANS (CONTINUED)
Pension Liabilities, Pension Expenses and Deferred Outflows/Inflows of Resources Related to Pensions
(Continued)
For the year ended June 30, 2020, the City recognized pension expense of $2,414,005. At June 30, 2020, the
City reported deferred outflows of resources and deferred inflows of resources related to pension from the
following sources:
Deferred Outflows Deferred Inflows
of Resources of Resources
Pension contributions subsequent to the measurement date $ 1,265,361 $
Differences between expected and actual experience 827,760 (64,135)
Change of assumptions 568,309 (201,461)
Change in employer's proportion and differences between
the employer's contributions and the employer's
proportionate share of contributions (202,576)
Net differences between projected and actual earnings on
plan investments (208,365)
Total $ 226612430 $ (6762537}
The amount of $1 ,265 ,3 61 reported as deferred outflows of resources related to contributions subsequent to
the measurement date will be recognized as a reduction of the net pension liability in the year ended
June 30,2021. Other amounts reported as deferred outflows of resources and deferred inflows or resources
related to pensions will be recognized as pension expense as follows:
Year Ended June 30,
2021 $ 768,469
2022 (183,211)
2023 92,169
2024 42,105
2025
Thereafter
$ 7192532
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CITY OF RANCHO PALOS VERDES, CALIFORNIA
Notes to Financial Statements
June 30,2020
8. PENSION AND RETIREMENT HEALTH SAVINGS PLANS (CONTINUED)
Pension Liabilities, Pension Expenses and Deferred Outflows/Inflows of Resources Related to Pensions
(Continued)
Actuarial Assumptions
The total pension liability for the June 30, 2019 measurement period was determined by an actuarial valuation
as ofJune 30, 2018, with update procedures used to roll forward the total pension liability to June 30, 2019.
The total pension liability was based on the following assumptions:
Valuation Date
Measurement Date
Actuarial Cost Method
Actuarial Assumptions:
Discount Rate
Inflation
Salary Increases
Mortality Rate Table
Post Retirement Beneftt Increase
( 1) Varies by entry age and service
June 30, 2018
June 30, 2019
Entry-Age Normal
Cost Method
7.15%
2.50%
(1)
(2)
(3)
(2) The mortality table used was developed based on CalPERS-specific data. The probabilities of
mortality are based on the 2017 CalPERS Experience Study for the period from 1997 to 2015.
Pre-retirement and Post-retirement mortality rates includes 15 years of projected mortality
improvement using 90% of Scale MP-2016 published by the Society of Actuaries. For more
details on this table, please refer to the CalPERS Experience Study and Review of Actuarial
Assumptions report from December 2017 that can be found on the CalPERS website.
(3) The less of contract COLA or 2.50% until Purchasing Power Protection Allowance Floor on
purchasing power applies, 2.50% thereafter.
Long-Term Expected Rate of Return
The long-term expected rate of return on pension plan investments was determined using a building-block
method in which expected future real rates of return (expected returns, net of pension plan investment expense
and inflation) are developed for each major asset class.
In determining the long-term expected rate of return, CalPERS took into account both short-term and
long-term market return expectations as well as the expected pension fund cash flows. Using historical returns
of all the funds' asset classes expected compound (geometric) returns were calculated over the short-term
(ftrst 10 years) and the long-term (11+ years) using a building-block approach. Using the expected nominal
returns for both short-term and long-term, the present value of beneftts was calculated for each fund. The
expected rate of return was set by calculating the rounded single equivalent expected return that arrived at the
same present value of beneftts for cash flows as the one calculated using both short-term and long-term
returns. The expected rate of return was then set equal to the single equivalent rate calculated above and
adjusted to account for assumed administrative expenses.
55
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CITY OF RANCHO PALOS VERDES, CALIFORNIA
Notes to Financial Statements
June 30,2020
8. PENSION AND RETIREMENT HEALTH SAVINGS PLANS (CONTINUED)
Long-Term Expected Rate ofReturn (Continued)
The expected real rates of return by asset class are as follows:
Assumed Real Return Real Return
Asset Years Years
Asset Class (a) Allocation 1-10{b} 1l+{c}
Global Equity 50.00% 4.80% 5.98%
Fixed Income 28.00% 1.00% 2.62%
Inflation Sensitive 0.00% 0.77% 1.81%
Private Equity 8.00% 6.30% 7.23%
Real Assets 13.00% 3.75% 4.93%
Liquidity 1.00% 0.00% -0.92%
Total 100.00%
(a) In the CalPERS CAFR, Fixed Income is included in Global Debt Securities; Liquidity is included in
Short-term Investments; Inflation Assets are included in both Global Equity Securities and Global
Debt Securities.
(b) An expected inflation of 2. 0% used for this period
(c) An expected inflation of 2. 92% used for this period
Discount Rate
The discount rate used to measure the total pension liability was 7 .15%. The projection of cash flows used to
determine the discount rate assumed that contributions from plan members will be made at the current
members will be made at the current member contribution rates and that contributions from employers will
be made at statutorily required rates, actuarially determined. Based on those assumptions, the Plan's fiduciary
net position was projected to be available to make all projected future benefit payments of current plan
members. Therefore, the long-term expected rate of return on plan investments was applied to all periods of
projected benefit payments to determine the total pension liability.
Sensitivity of the Proportionate Share of the Net Pension Liability to Changes in the Discount Rate
The following presents the City's proportionate share of the net pension liability for each Plan, calculated
using the discount rate for each Plan, as well as what the City's proportionate share of the net pension liability
would be if it were calculated using a discount rate that is 1-percentage point lower or 1-percentage point
higher than the current rate:
Discount Rate -1%
(6.15%)
$ 18,197,610
Current Discount Rate
(7.15%)
$ 11,918,073
56
Discount Rate + 1%
(8.15%)
$ 6,734,758
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CITY OF RANCHO PALOS VERDES, CALIFORNIA
Notes to Financial Statements
June 30,2020
8. PENSION AND RETIREMENT HEALTH SAVINGS PLANS (CONTINUED)
Pension Plan Fiduciary Net Position
Detailed information about the Plan's fiduciary net position is available in a separately issued CalPERS
financial report.
Payable to the Pension Plan
At June 30, 2020, the City had no outstanding amount of contributions to the pension plan required for the
year ended June 30, 2020.
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 1 06 of the Internal Revenue Code. The Plan assets are managed in a
non-taxable trust as described in Section 501 (c)(9) of the Internal Revenue Code. The City is the Plan
Administrator, and utilizes the services of a contracted financial services provider for day-to-day
administration of contributions and disbursements. The City has the authority to amend the Plan's provisions
and contribution requirements.
The City has no obligation to make contributions to the Plan, but as part of the annual budget process the City
may elect to make contributions to the Plan. Employees are required to contribute 1% of their gross wages to
their account, which is owned by the employee. During the fiscal year ended June 30, 2020, the City
contributed a total of $80,310 to employee accounts.
The Plan assets are not an asset of the City. Therefore, only the City's expense to make contributions to the
Plan has been recorded in the General Fund in the City's financial statements.
9. LIABILITY, WORKERS' COMPENSATION, AND PURCHASED INSURANCE
Description of Self-Insurance Pool Pursuant to Joint Powers Agreement
The City of Rancho Palos Verdes is a member of the CALIFORNIA JOINT POWERS INSURANCE
AUTHORITY (Authority). The Authority is composed of 118 California public entities and is organized under
a joint powers agreement pursuant to California Government Code §6500 et seq. The purpose of the Authority
is to arrange and administer programs for the pooling of self-insured losses, to purchase excess insurance or
reinsurance, and to arrange for group purchased insurance for property and other lines of coverage. The
California JPIA began covering claims of its members in 1978. Each member government has an elected
official as its representative on the Board of Directors. The Board operates through a nine-member Executive
Committee.
57
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CITY OF RANCHO PALOS VERDES, CALIFORNIA
Notes to Financial Statements
June 30,2020
9. LIABILITY, WORKERS' COMPENSATION, AND PURCHASED INSURANCE (CONTINUED)
Self-Insurance Programs of the CJPIA
Each member pays an annual contribution at the beginning of the coverage period. A retrospective adjustment
is then conducted annually thereafter, for coverage years 2012-13 and prior. Coverage years 2013-14 and
forward are not subject to routine annual retrospective adjustment. The total funding requirement for primary
self-insurance programs is based on an actuarial analysis. Costs are allocated to individual agencies based on
payroll and claims history, relative to other members of the risk-sharing pool.
Primary Liability Program
Claims are pooled separately between police and general government exposures. (1) The payroll of each
member is evaluated relative to the payroll of other members. A variable credibility factor is determined for
each member, which establishes the weight applied to payroll and the weight applied to losses within the
formula. (2) The first layer oflosses includes incurred costs up to $30,000 for each occurrence and is evaluated
as a percentage of the pool's total incurred costs within the first layer. (3) The second layer of losses includes
incurred costs from $30,000 to $750,000 for each occurrence and is evaluated as a percentage of the pool's
total incurred costs within the second layer. ( 4) Incurred costs from $7 50,000 to $50 million, are distributed
based on the outcome of cost allocation within the first and second loss layers.
The overall coverage limit for each member, including all layers of coverage, is $50 million per occurrence.
Subsidence losses have a sub-limit of $40 million per occurrence. The coverage structure includes retained
risk that is pooled among members, reinsurance, and excess insurance. More detailed information about the
various layers of coverage is available on the following website: https://cjpia.org/coverage/risk-sharing-
pools/.
Primary Workers' Compensation Program
Claims are pooled separately between public safety (police and fire) and general government exposures. (1)
The payroll of each member is evaluated relative to the payroll of other members. A variable credibility factor
is determined for each member, which establishes the weight applied to payroll and the weight applied to
losses within the formula. (2) The first layer of losses includes incurred costs up to $50,000 for each
occurrence and is evaluated as a percentage of the pool's total incurred costs within the first layer. (3) The
second layer oflosses includes incurred costs from $50,000 to $100,000 for each occurrence and is evaluated
as a percentage of the pool's total incurred costs within the second layer. (4) Incurred costs from $100,000 to
statutory limits are distributed based on the outcome of cost allocation within the first and second loss layers.
For 2019-20, the Authority's pooled retention is $1 million per occurrence, with reinsurance to statutory limits
under California Workers' Compensation Law. Employer's Liability losses are pooled among members to $1
million. Coverage from $1 million to $5 million is purchased as part of a reinsurance policy, and Employer's
Liability losses from $5 million to $10 million are pooled among members.
58
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CITY OF RANCHO PALOS VERDES, CALIFORNIA
Notes to Financial Statements
June 30, 2020
9. LIABILITY, WORKERS' COMPENSATION, AND PURCHASED INSURANCE (CONTINUED)
Purchased Insurance
Pollution Legal Liability Insurance
The City of Rancho Palos Verdes participates in the pollution legal liability insurance program which is
available through the Authority. The policy covers sudden and gradual pollution of scheduled property, streets,
and storm drains owned by the City of Rancho Palos Verdes. Coverage is on a claims-made basis. There is a
$50,000 deductible. The Authority has a limit of $50 million for the 3-year period from July 1, 2017 through
July 1, 2020. Each member of the Authority has a $10 million sub-limit during the 3-year policy term.
Property Insurance
The City of Rancho Palos Verdes participates in the all-risk property protection program of the Authority. This
insurance protection is underwritten by several insurance companies. City of Rancho Palos Verdes property
is currently insured according to a schedule of covered property submitted by the City of Rancho Palos Verdes
to the Authority. City of Rancho Palos Verdes property currently has all-risk property insurance protection in
the amount of $17,672,158. There is a $10,000 deductible per occurrence except for non-emergency vehicle
insurance which has a $2,500 deductible.
Earthquake and Flood Insurance
The City of Rancho Palos Verdes purchases earthquake and flood insurance on a portion of its property. The
earthquake insurance is part of the property protection insurance program of the Authority. City of Rancho
Palos Verdes property currently has earthquake protection in the amount of $16,856,71 7. There is a deductible
of 5% per unit of value with a minimum deductible of$100,000.
Crime Insurance
The City of Rancho Palos Verdes purchases crime insurance coverage in the amount of $1 ,000,000 with a
$2,500 deductible. The fidelity coverage is provided through the Authority.
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 2019-20.
10. CONTINGENCIES AND COMMITMENTS
Litigation
In the normal course of operations, the City has been named as a defendant in various claims and legal actions.
Generally, unfavorable results of these claims and legal actions are funded through the City's participation in
California Joint Powers Insurance Authority (CJPIA, see Note 9) and, as such, the City believes that the
ultimate liability for these legal actions and claims will not have a material adverse effect on the City's
financial statements. The City is also a defendant in legal actions for which the potential losses would not be
covered through participation in CJPIA.
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CITY OF RANCHO PALOS VERDES, CALIFORNIA
Notes to Financial Statements
June 30,2020
11. PROPERTY TAXES
Under California law, property taxes are assessed and collected by the counties up to one percent of assessed
value, plus other increases approved by the voters. The property taxes go into a pool, and are then allocated
to the cities based on complex formulas. Accordingly, the City accrues only those taxes, which are received
from the county within sixty days after year-end.
Lien date
Levy date
Due date
Collection dates
12. UNAVAILABLE REVENUES
January 1
June 30
November 1 and February 1
December 10 and April 10
The unavailable revenues in the fund financial statements of the City of Rancho Palos Verdes as of
June 30, 2020 are presented in the following table.
Revenue Measurable but Not Available (beyond 60 days):
Other Governmental Funds $ 52,632
Total Unavailable Revenues $ 52,632
13. OTHER REQUIRED FUND DISCLOSURES
The following department's budget had expenditures in excess of the budget for the year ended June 30, 2020,
as follows:
Program
General Fund:
Administration
Federal Grants Special Revenue Fund:
Public works
Dr. Allen and Charlotte Ginsburg Cuhural Arts
Building Special Revenue Fund:
Parks and recreation
Budget
$ 5,935,956
Expenditures Excess
$ 6,319,098 383,142
15 15
1,045 1,045
The State Grants Special Revenue Fund has a deficit fund balance of$214,935 at June 30, 2020. This deficit
will be eliminated by recognition of revenue not available as of year-end and through transfers from other
funds. The Successor Agency Private-Purpose Trust Fund has a deficit fiduciary net position at June 30, 2020
of $13,500,565 which will be reduced by collection of future tax revenues.
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CITY OF RANCHO PALOS VERDES, CALIFORNIA
Notes to Financial Statements
June 30,2020
14. SUCCESSORAGENCY
Under the Dissolution Act, each California redevelopment agency (each a "Dissolved RDA") was dissolved
as of February 1, 2012. A Successor Agency was created for each Dissolved RDA which is the sponsoring
community of the Dissolved RDA unless it elected not to serve as the Successor Agency. On September 6,
2011, the City elected to serve as the Successor Agency ofthe Rancho Palos Verdes Redevelopment Agency.
Non-Liquid Assets
Prior to redevelopment dissolution, the County of Los Angeles pursuant to a Memorandum of Understanding
dated November 1, 1997 (discussed below) impounded property tax increment allocated to the former
redevelopment agency for payment of debt owed to the County. The balance of the impounded tax increment
not yet applied to debt at June 30, 2020 is $356,125.
Debt Summary
Balance Balance Amounts Due
Jul~ 1, 2019 Additions Deletions June 30, 2020 in One Year
Due to City:
Portuguese Bend $ 7,144,619 $ 114,872 $ (93,026) $ 7,166,465 $ 114,872
Abalone Cove 3,475,656 64,679 (50,091) 3,490,244 64,679
Due to County:
Tax Increment Bond 3,790,000 (280,000) 3,510,000 310,000
Totals $ 14,410,275 $ 179,551 $ (423,117) $ 14,166,709 $ 489,551
Consolidated Loan from City
The City entered into an agreement to provide the former Redevelopment Agency (RDA) operating funds and
staff assistance, supplies, technical and other services and facilities of the City as the RDA required in carrying
out its function under the community redevelopment law. The former RDA was to repay the resulting
indebtedness, plus interest, from incremental property tax revenues arising from the project area, as such
revenue became available. Pursuant to redevelopment dissolution law, loans from cities to redevelopment
agencies made more than two years after formation of the redevelopment agency are not recognized
obligations. Therefore, the Consolidated Loan from the City has been previously disallowed on the Successor
Agency's Recognized Obligation Payment Schedule (ROPS). However, AB1484 provides a method to secure
recognition of the City's Consolidated Loan as an obligation of the Successor Agency. Upon completion of
various independent reviews and transfers of funds to Los Angeles County, the Successor Agency received a
"Finding of Completion" on April26, 2013. On December 11, 2013, the Oversight Board made a finding that
the Consolidated Loan from the City was made for legitimate redevelopment purposes. As required by
dissolution law, twenty percent of the amount available will be deposited into the City's Low-Moderate
Income Housing Fund.
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CITY OF RANCHO PALOS VERDES, CALIFORNIA
Notes to Financial Statements
June 30, 2020
14. SUCCESSOR AGENCY (CONTINUED)
Consolidated Loan from City (Continued)
On September 22, 2015, Governor Brown signed legislation that became effective immediately. The
legislation requires accrued interest on city loans to be recalculated using a simple interest rate of 3%.
Previously, accrued interest on the City's loan was calculated using historical Local Agency Investment Fund
(LAIF) rates. At June 30, 2020, using the simple interest rate of3%, the loan balance is $10,656,709.
Portuguese Bend
Abalone Cove
Allowance from Successor Agency Receivable
Totals
Principal
$ 3,829,077
2,155,967
(5,985,044)
$
Interest
$ 3,337,388
1,334,277
( 4,671,665)
$
Balance
$ 7,166,465
3,490,244
( 10,656, 709)
$
Due to the uncertainty of Redevelopment Property Tax Trust Fund revenue available for future loan
repayments, the City's loan receivable of $10,656,709 has been completely offset with an allowance for
uncollectable amounts on the City's financial statements.
Tax Increment Bond and Deferred Interest Payable
In July 1991, the former Redevelopment Agency received $10,000,000 in loan proceeds (the Loan) from the
County of Los Angeles (the County) upon the County's issue of Abalone Cove Improvement Bonds 2651-M
pursuant to a Reimbursement and Settlement Agreement (the Agreement), dated October 27, 1987 in
connection with the Horan Lawsuit. The Loan was made for the purpose of abating the Abalone Cove
landslide. The settlement Loan was secured by property assessment liens in the Abalone Cove project area.
As stipulated by the parties to the Agreement, a portion of the Loan proceeds was used to repay a tax allocation
and revenue anticipation promissory note issued to the County in the principal amount of $1,450,000, plus
accrued interest equal to $179,244. A second portion of the proceeds was used to repay expenses advanced by
the County in the amount of $135,614. A third portion was used to repay certain loans from the City to the
former Redevelopment Agency in the amount of $787,340.
Per the terms of the Agreement, $1,000,000 of the proceeds was deposited in the Abalone Cove Permanent
Fund of the Joint Powers Improvement Authority. The remainder of the proceeds was accounted for in the
former Redevelopment Agency's Abalone Cove Fund. Concurrent with the execution of the Agreement, the
County deeded its title in the Abalone Cove Beach Park to the former Redevelopment Agency.
As part of the Agreement, the former Redevelopment Agency was required to transfer 17 percent of tax
increment revenue to the Consolidated Fire Protection District of the County and 50.9 percent of tax increment
revenue for debt repayment to the County. In accordance with the Agreement, the former Redevelopment
Agency was to pay the Loan principal plus interest at 7.7654 percent over a 30-year period that began in 1992.
However, these debt payments were to be deferred 10 years until the fiscal year ended June 30, 2002.
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CITY OF RANCHO PALOS VERDES, CALIFORNIA
Notes to Financial Statements
June 30,2020
14. SUCCESSOR AGENCY (CONTINUED)
Tax Increment Bond and Deferred Interest Payable (Continued)
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. 7 654 percent.
On November 1, 1997, the City, the former Redevelopment Agency and the County of Los Angeles entered
into a Memorandum of Understanding (MOU) agreeing to restructure the repayment schedule of the debt
owed to the County by the former Redevelopment Agency. In accordance with the terms of the MOU, the
$10,000,000 loan principal owed to the County was cancelled. As consideration for the loan cancellation, the
former Redevelopment Agency made a lump sum payment to the County in the amount of $4,545,000 and
issued a $5,455,000 tax increment bond to the County (the bond). Of the $4,545,000 lump sum payment,
$2,000,000 was paid from tax increment revenue and interest earnings accumulated in the Debt Service Fund.
The remaining $2,545,000 was funded by a combination of a loan from the General Fund of the City to the
Agency for $1,545,000 and a net operating transfer from the Agency's Abalone Cove Capital Projects Fund
to the Debt Service Fund of$1,000,000. The private property liens resulting from the formation ofthe bond
assessment district in connection with the Reimbursement and Settlement Agreement in 1987 were discharged
in accordance with the terms of the MOU.
The bond was issued as a conduit through the Improvement Authority to the County. No issuance costs were
incurred. Future allocations of property tax to the Successor Agency will fund the payment of the bond debt
and the deferred interest from the original Loan until paid in full. The principal of the bond began maturing
in installments each December 2nd, commencing December 2, 2004. Interest accrues at a rate of 5 percent per
annum and is payable in arrears each June 2nd and December 2nd.
Additionally, both the accrued interest and deferred interest on the $10,000,000 Loan previously owed the
County was retroactively recalculated from the Loan origination date at a rate of approximately 5 percent
compared to 7.7654 percent per the original Agreement. The recalculated deferred interest was $3,111,400. In
accordance with the MOU, the recalculated deferred interest does not accrue additional interest. As of June 30,
2014, the balance of the deferred interest debt has been completely repaid.
The California Department of Finance has approved the Tax Increment Bond and Deferred Interest Payable
as obligations ofthe Successor Agency.
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CITY OF RANCHO PALOS VERDES, CALIFORNIA
Notes to Financial Statements
June 30, 2020
14. SUCCESSOR AGENCY (CONTINUED)
Tax Increment Bond and Deferred Interest Payable (Continued)
The debt service schedule below summarizes all fixed principal and interest payments for the term of the
bond. Because the payback period for the deferred interest amount will fluctuate depending on the availability
of excess property tax revenue, no amounts have been included in the following schedule for repayment of
the deferred interest.
Year Ending June 30, PrinciEal Interest Total
2021 310,000 167,750 $ 477,750
2022 345,000 151,375 496,375
2023 380,000 133,250 513,250
2024 415,000 113,375 528,375
2025 450,000 91,750 541,750
2026-2028 1,610,000 125,000 1,735,000
Totals $ 3,510,000 $ 782,500 $ 4,292,500
15. ECONOMIC CHALLENGES OF 2020
On January 30, 2020, the World Health Organization (WHO) announced a global health emergency because
of an outbreak of a new strain of coronavirus (COVID-19 outbreak) and the risks that is posed to the
international community as the virus spread globally beyond its point of origin. In March 2020, the WHO
classified the COVID-19 outbreak as a pandemic based on the rapid increase in exposure globally.
The COVID-19 outbreak may have a continued material adverse impact on economic and market conditions,
triggering a period of global economic slowdown. Much like other local governments across the country, the
fiscal year 2020-2021, budget process incorporated the impact of the economic downturn which began during
the third quarter ofFY 2019-20. The City's solid financial foundation, financially conservative approach, and
stable property tax revenue, has moderated the impact of the economic disruption caused by the pandemic.
The sudden and unprecedented drop in TOT (Transient Occupancy Tax) revenue has resulted in reassessment
of the Capital Improvement Program (CIP), focusing on projects that were ranked the highest. Despite this,
the FY 2020-21 General Fund is estimated to maintain a healthy fund balance, however, the City cannot
estimate the length or gravity of the impact at this time. There will be fiscal challenges in the coming years
that the City will need to prepare for and it is more crucial now for the City to continue to be fiscally prudent
and produce a structurally balanced operating budget. The City will also continue to utilize a 5-Year Model
as an additional tool to engage in discussions and provide guidance in decision making.
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REQUIRED SUPPLEMENTARY INFORMATION
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CITY OF RANCHO PALOS VERDES, CALIFORNIA
Schedule of Proportionate Share of the Net Pension Liability
Last Ten Years*
As of the Fiscal Year Ended June 30,2020
Fiscal year ended
Measurement period
Plan's proportion of the net pension liability
Plan's proportionate share of the net pension liability
Plan's covered payroll
Plan's proportionate share of the net pension liability as
a percentage of covered payroll
Plan's proportionate share of the fiduciary net position as
a percentage of the Plan's total pension liability
Plan's proportionate share of aggregate
employer contributions
Notes to Schedule:
Benefit Changes:
There were no changes in benefits.
Changes in Assumptions:
From fJScal year June 30, 2015 to June 30, 2016:
From fJScal year June 30, 2016 to June 30, 2017:
From fiScal year June 30,2017 to June 30,2018:
From fJScal year June 30,2018 to June 30,2019:
From fJScal year June 30, 2019 to June 30, 2020:
Miscellaneous
June 30,2020 June 30, 2019 June 30, 2018 June 30, 2017 June 30, 2016 June 30, 2015
June 30, 2019 June 30, 2018 June 30,2017 June 30, 2016 June 30, 2015 June 30, 2014
0.11631% 0.11334% 0.11218% 0.11120% 0.11130% 0.09183%
$ 11,918,073 $ 10,921,840 $ 11,124,689 $ 9,625,397 $ 7,637,567 $ 5,714,320
$ 6,697,322 $ 6,360,881 $ 6,124,374 $ 5,997,450 $ 5,673,471 $ 5,609,006
177.95% 171.70% 181.65% 160.49% 134.62% 101.88%
75.26% 75.26% 73.31% 74.06% 78.40% 76.48%
$ 1,440,684 $ 1,235,073 $ 1,096,042 $ 998,812 $ 919,858 nla
GASB 68, paragraph 68 states that the long-term expected rate of return should be determined
net of pension plan investment expense but without reduction for pension plan administrative
expense. The discount rate of 7.50% used for the June 30, 2014 measurement date was net of
administrative expenses. The discount rate of7.65% used for the June 30,2015 measurement
date is without reduction of pension plan administrative expense.
There were no changes in assumptions.
The discount rate was reduced from 7.65% to 7.15%.
There were no changes in assumptions.
There were no changes in assumptions.
*Fiscal year 2015 was the 1st year of implementation, therefore only six years are shown.
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CITY OF RANCHO PALOS VERDES, CALIFORNIA
Schedule of Pension Contributions
Last Ten Years*
As of the Fiscal Year Ended June 30, 2020
Fiscal year ended June 30, 2020
Contractually required contribution (actuarially detennined) $ 1,265,361
Contributions in relation to the actuarially
determined contributions (1,265,361)
Contribution deficiency (excess) $
Covered payroll $ 6,454,856
Contributions as a percentage of covered payroll 19.60%
Notes to Schedule:
Valuation Date 6/30/2018
Methods and Assumptions Used to Determine Contribution Rates:
Actuarial cost method Entry age
Amortization method (I)
Asset valuation method Market Value
Inflation 2.625%
Salary increases (2)
Investment rate ofretum 725%(3)
Retirement age (4)
Mortality (5)
(!) Level percentage of payroll, closed
(2) Depending on age, service, and type of employment
(3) Net of pension plan investment expense, including inflation
(4) 55 for Tier 1, 60 for Classic Tier 2, and 62 for PEPRA members
June 30, 2019
$ 1,153,245
(1, 153,245)
$
$ 6,697,322
17.22%
6/30/2017
Entry age
(!)
Market Value
2.75%
(2)
7.375% (3)
(4)
(5)
June 30, 2018 June 30, 2017
$ 990,670 $ 910,177
(990,670) (910,177)
$ $
$ 6,360,881 $ 6,124,374
15.57% 14.86%
6/30/2016 6/30/2015
Entry age Entry age
(!) (l)
Market Value Market Value
2.75% 2.75%
(2) (2)
7.50% (3) 7.50% (3)
(4) (4)
(5) (5)
(5) Mortality assumptions are based on mortality rates resulting from the most recent CalPERS Experience Study
adopted by the CarPERS Board.
* Fiscal year 2015 was the 1st year of implementation, therefore only six years are shown.
66
June 30, 2016 June 30, 2015
$ 830,645 $ 725,496
(830,645) (725,496)
$ $
$ 5,997,450 $ 5,673,471
13.85% 12.79%
6/30/2014 6/30/2013
Entry age Entry age
(I) (!)
Market Value 15 Year
Smoothed
Market Method
2.75% 2.75%
(2) (2)
7.50% (3) 7.50% (3)
(4) (4)
(5) (5)
A-98
SUPPLEMENTARY INFORMATION
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Special Revenue Fund Descriptions
Special Revenue Funds are used to account for taxes and other revenues set aside in accordance with law or
administrative regulation for a specific purpose.
Gas Tax Fund -to account for state-shared highway users' tax that is restricted to use for street maintenance,
right-of-way acquisition and street construction.
1972 Act Landscaping and Lighting District ( 1972 Act) -to account for revenues and costs associated with the
City's landscaping and lighting district.
El Prado -to account for taxes collected to maintain and service existing and proposed improvements to the
common area of the El Prado neighborhood.
1911 Act Lighting District (1911 Act) -to account for revenue and costs associated with a lighting district
transferred to the "city-side" landscape and lighting district from the County in 1995.
Waste Reduction -to account for AB939 fees received for state mandated waste reduction and recycling plans and
program.
Air Quality Management-to account for AB2766 fees received to fund programs to reduce air pollution from
motor vehicles.
Proposition C -to account for sales taxes received from the County and used to support public transit and related
services.
Proposition A-to account for the City share of an additional one-half percent sales tax designated to fund certain
public transportation oriented projects.
Public Safety Grants-to account for federal grant funds for local law enforcement supplemental services, AB3229
funds used for additional law enforcement services and public safety technology equipment.
MeasureR-to account for the half-cent sales tax approved by the Los Angeles County voters in November 2008
to meet transportation needs, including maintenance and improvement of arterial streets, traffic control, bikeway
and pedestrian improvements, and public transit.
Measure A-to account of 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.
Measure M -to account for the half-cent sales tax and continued half-cent relief tax partially distributed to cities
approved by the Los Angeles County voters in November 2016 to fund transportation needs.
Abalone Cove Sewer Assessment -to account for property assessments used to partially pay for operation and
maintenance of the Abalone Cove sewer system.
Dr. Allen and Charlotte Ginsburg Cultural Arts Building -to account for a private donation to be used for either
construction of a building at the Upper Point Vicente Civic Center to be used for dancing and other cultural
activities, or for the purchase of open space within the City for habitat conservation and passive recreational
purposes.
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(THIS PAGE INTENTIONALLY LEFT BLANK)
68
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Special Revenue Fund Descriptions (Continued)
Donor Restricted Contributions -to account for donations received to construct or acquire recreational facilities
within the City.
Joint Powers Improvement Authority -Portuguese Bend -to account for maintenance and repairs of landslide
abatement improvements in the Portuguese Bend Project area.
Community Development Block Grant -to account for federal grants received from the Department of Housing
and Urban Development.
Federal Grants-to account for federal financial assistance programs.
State Grants -to account for state financial assistance programs.
Quimby -to account for developer paid fees or the dedication of land for park and recreation purposes.
Environmental Excise Tax -to account for taxes received in connection with new construction within the City.
Capital Projects Fund Descriptions
Capital Projects Funds are used to account for financial resources used for the acquisition or construction of major
capital facilities.
Low-Moderate Income Housing-to account for low and moderate income housing assets that were transferred to
the City after electing to retain the housing assets and function of the former redevelopment agency, which was
dissolved on January 31, 2012.
Affordable Housing In-Lieu -to account for developer fees paid in-lieu of providing affordable housing in
conjunction with new development as required by the Affordable Housing Chapter of the City's Municipal Code
(Chapter 17.11).
Permanent Fund Descriptions
Permanent Funds are used to account for resources legally restricted to the extent that only earnings, and not
principal, may be used for purposes that support the City's programs.
Habitat Restoration -to account for fees paid by developers for conservation easements to be used exclusively for
habitat restoration efforts on City owned property. The Habitat Restoration Fund to be funded at the rate of$1 0,000
annually (plus interest) for fifty (50) years, to provide for maintenance of habitat in the future.
Sub-region One Maintenance -to account for monies used to maintain public improvements and habitat areas
dedicated to the City upon completion of the Sub-region One residential development project also known as
Oceanfront Estates. As part of the development agreement, the City received a $750,000 non-expendable deposit.
The interest earnings contribute to the maintenance of the public open space.
Joint Powers Improvement Authority -Abalone Cove -to account for monies received as part of a July 1991
Reimbursement and Settlement Agreement with the County of Los Angeles. As 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.
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ASSETS
Cash and investments
Receivables:
Taxes
Interest
Notes
Other
TOTAL ASSETS
LIABILITIES
Accounts payable and accrued liabilities
Due to other funds
Retentions payable
Unearned revenue
TOTAL LIABILITIES
CITY OF RANCHO PALOS VERDES
COMBINING BALANCE SHEET
OTHER GOVERNMENTAL FUNDS
June 30, 2020
Special Revenue Funds
Gas
Tax 1972 Act El Prado
$ 1,667,169 $ 28,833 $ 36,122
68
2,956 52 65
119,360
$ 1,789,485 $ 28,885 $ 36,255
$ 251,059 $ $
12,190
263,249
DEFERRED INFLOWS OF RESOURCES
Unavailable revenue
FUND BALANCES
Non-Spendable:
Endowment principal
Restricted 1,526,236 28,885 36,255
Unassigned
TOTAL FUND BALANCES 1,526,236 28,885 36,255
TOTAL LIABILITIES, DEFERRED
INFLOWS, AND FUND BALANCES $ 1,789,485 $ 28,885 $ 36,255
70
1911 Act
$ 1,263,488
225,149
2,298
$ 1,490,935
$ 44,158
44,158
1,446,777
1,446,777
$ 1,490,935
A-104
Special Revenue Funds (Continued)
Air Public
Waste Quality Safety
Reduction Management Proposition C Proposition A Grants MeasureR Measure A
$ 457,580 $ 139,199 $ 923,458 $ 2,275,179 $ 76,230 $ 1,290,998 $
93,963
796 243 1,591 4,677 190 2,268
14,065 13,320 52,632
$ 472 441 $ 152,762 $ 925 049 $ 2,279,856 $ 76 420 $ 1,293,266 $ 146 595
$ 17,687 $ $ 343,810 $ 241,208 $ $ 29,225 $
32,679
1,528 21,217
17,687 345,338 262,425 29,225 32,679
52,632
454,754 152,762 579,711 2,017,431 76,420 1,264,041 61,284
454,754 152,762 579,711 2,017,431 76,420 1,264,041 61,284
$ 472 441 $ 152,762 $ 925 049 $ 2,279,856 =$===7=6,;,:4:=20= $ 1,293,266 =$=====14=6,;,:,5;;,;95=
(Continued)
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CITY OF RANCHO PALOS VERDES
COMBINING BALANCE SHEET
OTHER GOVERNMENTAL FUNDS
(CONTINUED)
June 30, 2020
Special Revenue Funds (Continued)
Dr. Allen and
Charlotte
Ginsburg Donor
Abalone Cove Cultural Restricted
MeasureM Sewer Arts Buildin~ Contributions
ASSETS
Cash and investments $ 101,542 $ 298,737 $ $ 782,214
Receivables:
Taxes
Interest 228 546 1,410
Notes
Other 1,092
TOTAL ASSETS $ 101 770 $ 300 375 $ $ 783,624
LIABILITIES
Accounts payable and accrued liabilities $ 2,761 $ 41,376 $ $ 1,670
Due to other funds
Retentions payable
Unearned revenue
TOTAL LIABILITIES 2,761 41,376 1,670
DEFERRED INFLOWS OF RESOURCES
Unavailable revenue
FUND BALANCES
Non-Spendable:
Endowment principal
Restricted 99,009 258,999 781,954
Unassigned
TOTAL FUND BALANCES 99,009 258,999 781,954
TOTAL LIABILITIES, DEFERRED
INFLOWS, AND FUND BALANCES $ 101 770 $ 300 375 $ $ 783 624
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Special Revenue Funds (Continued)
Joint Powers
Improvement Community Total
Authority Development Special
Portuguese Block Grant Federal State Environmental Revenue
Bend (CDBG) Grants Grants Quimby Excise Tax Funds
$ 83,862 $ 12,677 $ $ $ 1,176,249 $ 362,364 $ 10,975,901
3I9,180
330 2,12I 547 20,318
32,057 230,427 462,953
$ 84 I92 $ 44 734 $ $ 230,427 $ I, I78,370 $ 362 9II $ II,778,352
$ I24 $ I8,717 $ $ 8,900 $ $ I6,096 $ I,OI6,79I
4I9,029 451,708
I7,433 52,368
$
I24 I8,7I7 445,362 I6,096 1,520,867
52,632
84,068 26,017 I, I78,370 346,8I5 I0,4I9,788
(2I4,935) (2I4,935)
84,068 26,0I7 (214,935) I,178,370 346,8I5 10,204,853
$ 84 I92 $ 44 734 $ $ 2302427 $ I2I782370 $ 362 9II $ ll 2778 2352
(Continued)
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CITY OF RANCHO PALOS VERDES
COMBINING BALANCE SHEET
OTHER GOVERNMENTAL FUNDS
(CONTINUED)
June 30, 2020
Capital Projects Funds
Total
Low-Moderate Affordable Capital
Income Housing Projects
HousinB In-Lieu Funds
ASSETS
Cash and investments $ 221,873 $ 854,587 $ 1,076,460
Receivables:
Taxes
Interest 348 1,541 1,889
Notes
Other
TOTAL ASSETS $ 222,221 $ 856,128 $ 1,078,349
LIABILITIES
Accounts payable and accrued liabilities $ $ $
Due to other funds
Retentions payable
Unearned revenue
TOTAL LIABILITIES
DEFERRED INFLOWS OF RESOURCES
Unavailable revenue
FUND BALANCES
Non-Spendable:
Endowment principal
Restricted 222,221 856,128 1,078,349
Unassigned
TOTAL FUND BALANCES 222,221 856,128 1,078,349
TOTAL LIABILITIES, DEFERRED INFLOWS,
AND FUND BALANCES $ 222,221 $ 856,128 $ 1,078,349
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Permanent Funds
Joint Powers Total
Subregion Improvement Total Other
Habitat One Authority Permanent Governmental
Restoration Maintenance Abalone Cove Funds Funds
$ 810,537 $ 771,379 $ 1,124,863 $ 2,706,779 $ 14,759,140
3,500 3,500 322,680
1,461 1,388 4,750 7,599 29,806
462,953
$ 815 498 $ 772 767 $ 1,129,613 $ 2,717,878 $ 15,574,579
$ $ 1,535 $ 1,251 $ 2,786 $ 1,019,577
451,708
52,368
1,535 1,251 2,786 1,523,653
52,632
165,317 750,000 1,000,000 1,915,317 1,915,317
650,181 21,232 128,362 799,775 12,297,912
(214,935)
815,498 771,232 1,128,362 2,715,092 13,998,294
$ 815 498 $ 772 767 $ 1,129,613 $ 2,717,878 $ 15,574,579
75
A-109
CITY OF RANCHO PALOS VERDES
COMBINING STATEMENT OF REVENUES, EXPENDITURES
AND CHANGES IN FUND BALANCES -OTHER GOVERNMENTAL FUNDS
For the year ended June 30, 2020
Special Revenue Funds
Gas
Tax 1972 Act El Prado 1911 Act
REVENUES:
Taxes $ $ $ 2,882 $ 725,690
Revenue from other agencies 1,655,763
Charges for services
Use of money and property 21,854 501 598 24,347
Other revenues 49,279 208,102
TOTAL REVENUES 1,726,896 501 3,480 958,139
EXPENDITURES:
Current:
Public works 1,085,394 970,974
Parks and recreation
TOTAL EXPENDITURES 1,085,394 970,974
EXCESS (DEFICIENCY)
OF REVENUES OVER
(UNDER) EXPENDITURES 641,502 501 3,480 (12,835)
OTHER FINANCING SOURCES (USES):
Transfers in
Transfers out
TOTAL OTHER FINANCING
SOURCES (USES)
NET CHANGE IN FUND BALANCES 641,502 501 3,480 (12,835)
FUND BALANCES -
BEGINNING OF YEAR 884,734 28,384 32,775 1,459,612
FUND BALANCES -
END OF YEAR $ 1,526,236 $ 28 885 $ 36,255 $ 1 446 777
76
A-110
Special Revenue Funds (Continued)
Air Public
Waste Quality Safety
Reduction Management Proposition C Proposition A Grants MeasureR Measure A
$ $ $ $ $ $ $
22,269 53,834 686,691 827,835 155,948 514,282 93,963
194,632
7,563 1,916 14,727 46,964 2,131 18,778 503
224,464 55,750 701,418 874,799 158,079 533,060 94,466
223,785 698,807 1,236,692 72,168
223,785 698,807 1,236,692 72,168
679 55,750 2,611 (361,893) 158,079 460,892 94,466
(175,000) (100,000)
(175,000) (100,000)
679 55,750 2,611 (361,893) (16,921) 460,892 (5,534)
454,075 97,012 577,100 2,379,324 93,341 803,149 66,818
$ 454 754 $ 152,762 $ 579 711 $ 2,017,431 $ 76 420 $ 1,264,041 $ 61,284
(Continued)
77
A-111
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, 2020
Special Revenue Funds (Continued)
Dr. Allen and
Charlotte
Ginsburg Donor
Abalone Cove Cultural Restricted
MeasureM Sewer Arts Buildin~ Contributions
REVENUES:
Taxes $ $ 52,379 $ $
Revenue from other agencies 578,741
Charges for services
Use of money and property 1,877 7,675 13,660
Other revenues 9,900
TOTAL REVENUES 580,618 60,054 23,560
EXPENDITURES:
Current:
Public works 525,316 138,009 3,406
Parks and recreation 1,045 13,363
TOTAL EXPENDITURES 525,316 138,009 1,045 16,769
EXCESS (DEFICIENCY)
OF REVENUES OVER
(UNDER) EXPENDITURES 55,302 (77,955) (1,045) 6,791
OTHER FINANCING SOURCES (USES):
Transfers in
Transfers out
TOTAL OTHER FINANCING
SOURCES (USES)
NET CHANGE IN FUND BALANCES 55,302 (77,955) (1,045) 6,791
FUND BALANCE -
BEGINNING OF YEAR 43,707 336,954 1,045 775,163
FUND BALANCES -
END OF YEAR $ 99 009 $ 258,999 $ $ 781 954
78
A-112
Special Revenue Funds (Continued)
Joint Powers
Improvement Community
Authority Development
Portuguese Block Grant Federal State
Bend (CDBG) Grants Grants Quimby
$ $ $ $ $
226,364 626,179
2,136 23,090
2,136 226,364 626,179 23,090
54,043 211,805 15 277,373 545,812
54,043 211,805 15 277,373 545,812
(51,907) 14,559 (15) 348,806 (522,722)
55,000
(98,300)
55,000 (98,300)
3,093 14,559 (98,315) 348,806 (522,722)
80,975 11,458 98,315 (563,741) 1,701,092
$ 84 068 $ 26 017 $ $ (214,935} $ 1,178,370
79
Environmental
Excise Tax
$ $
7,439
114,694
122,133
286,881
286,881
(164,748)
(164,748)
511,563
$ 346 815 $
Total
Special
Revenue
Funds
780,951
5,441,869
194,632
195,759
381,975
6,995,186
6,330,480
14,408
6,344,888
650,298
55,000
(373,300)
(318,300)
331,998
9,872,855
10,204,853
(Continued)
A-113
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, 2020
Capital Projects Funds
Total
Low-Moderate Affordable Capital
Income Housing Projects
Housing In-Lieu Funds
REVENUES:
Taxes $ 28,624 $ $ 28,624
Revenue from other agencies
Charges for services
Use of money and property 3,237 14,846 18,083
Other revenues 2,445 2,445
TOTAL REVENUES 31,861 17,291 49,152
EXPENDITURES:
Current:
Public works
Parks and recreation
TOTAL EXPENDITURES
EXCESS (DEFICIENCY)
OF REVENUES OVER
(UNDER) EXPENDITURES 31,861 17,291 49,152
OTHER FINANCING SOURCES (USES):
Transfers in
Transfers out
TOTAL OTHER FINANCING
SOURCES (USES)
NET CHANGE IN FUND BALANCES 31,861 17,291 49,152
FUND BALANCES -
BEGINNING OF YEAR 190,360 838,837 1,029,197
FUND BALANCES -
END OF YEAR $ 222,221 $ 856,128 $ 1,078,349
80
A-114
Permanent Funds
Joint Powers
Subregion Improvement
Habitat One Authority
Restoration Maintenance Abalone Cove
$ $ $
15,225 13,442 26,260
3,500
18,725 13,442 26,260
152,745 42,530 20,509
152,745 42,530 20,509
(134,020) (29,088) 5,751
35,000 50,000
35,000 50,000
(134,020) 5,912 55,751
949,518 765,320 1,072,611
$ 815,498 $ 771,232 $ 1,128,362
Total
Permanent
Funds
$
54,927
3,500
58,427
215,784
215,784
(157,357)
85,000
85,000
(72,357)
2,787,449
$ 2,715,092
81
Total
Other
Governmental
$
$
Funds
809,575
5,441,869
194,632
268,769
387,920
7,102,765
6,546,264
14,408
6,560,672
542,093
140,000
(373,300)
(233,300)
308,793
13,689,501
13,998,294
A-115
CITY OF RANCHO PALOS VERDES
SCHEDULE OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCE-BUDGET AND ACTUAL
GAS TAX SPECIAL REVENUE FUND
For the year ended June 30, 2020
Variance with
Final Budget
Budgeted Amounts Positive
Original Final Actual (Negative)
REVENUES:
Revenue from other agencies $ 1,772,400 $ 1,772,400 $ 1,655,763 $ (116,637)
Use of money and property 6,800 6,800 21,854 15,054
Other revenues 48,200 48,200 49,279 1,079
TOTAL REVENUES 1,827,400 1,827,400 1,726,896 (100,504)
EXPENDITURES:
Public works:
Street pavement maintenance 150,000 150,000 128,230 21,770
Street landscape maintenance 2,356,800 3,071,966 919,908 2,152,058
Traffic signal maintenance 10,000 10,000 12,506 (2,506)
Portuguese Bend road maintenance 70,000 70,000 24,750 45,250
TOTAL EXPENDITURES 2,586,800 3,301,966 1,085,394 2,216,572
NET CHANGE IN FUND BALANCE (759,400) (1,474,566) 641,502 2,116,068
FUND BALANCE -BEGINNING OF YEAR 884,734 884,734 884,734
FUND BALANCE -END OF YEAR $ 125,334 $ (589,832) $ 1,526,236 $ 2,116,068
82
A-116
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, 2020
Budgeted Amounts
Original Final Actual
REVENUES:
Use of money and property $ 300 $ 300 $ 501
NET CHANGE 1N FUND BALANCE 300 300 501
FUND BALANCE-BEGINNING OF YEAR 28,384 28,384 28,384
FUND BALANCE -END OF YEAR $ 282684 $ 282684 $ 282885
83
Variance with
Final Budget
Positive
(Negative2
$ 201
201
$ 201
A-117
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, 2020
Budgeted Amounts
Original Final Actual
REVENUES:
Taxes $ 2,300 $ 2,300 $ 2,882
Use of money and property 200 200 598
TOTAL REVENUES 2,500 2,500 3,480
EXPENDITURES:
Public works 800 800
EXCESS (DEFICIENCY) OF REVENUES
OVER(UNDER)EXPENDITURES 1,700 1,700 3,480
FUND BALANCE-BEGINNING OF YEAR 32,775 32,775 32,775
FUND BALANCE-END OF YEAR $ 34 475 $ 34 475 $ 362255
84
Variance with
Final Budget
Positive
(Negative)
$ 582
398
980
800
1,780
$ 1 780
A-118
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, 2020
Budgeted Amounts
Original Final Actual
REVENUES:
Taxes $ 606,800 $ 606,800 $ 725,690
Use of money and property 21,200 21,200 24,347
Other revenues 208,102
TOTAL REVENUES 628,000 628,000 958,139
EXPENDITURES:
Public works 348,000 1,011,941 970,974
NET CHANGE IN FUND BALANCE 280,000 (383,941) (12,835)
FUND BALANCE -BEGINNING OF YEAR 1,459,612 1,459,612 1,459,612
FUND BALANCE -END OF YEAR $ 127392612 $ 1:0752671 $ 124462777
85
Variance with
Final Budget
Positive
(Negative)
$ 118,890
3,147
208,102
330,139
40,967
371,106
$ 3712106
A-119
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, 2020
Budgeted Amounts
Original Final Actual
REVENUES:
Revenue from other agencies $ 22,100 $ 22,100 $ 22,269
Charges for services 185,000 185,000 194,632
Use of money and property 4,600 4,600 7,563
TOTAL REVENUES 211,700 211,700 224,464
EXPENDITURES:
Public works 304,100 304,100 223,785
NET CHANGE lN FUND BALANCE (92,400) (92,400) 679
FUND BALANCE -BEGINNING OF YEAR 454,075 454,075 454,075
FUND BALANCE -END OF YEAR $ 361:675 $ 361 675 $ 454 754
86
Variance with
Final Budget
Positive
(Negative)
$ 169
9,632
2,963
12,764
80,315
93,079
$ 93 079
A-120
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, 2020
Budgeted Amounts
Original Final Actual
REVENUES:
Revenue from other agencies $ 50,000 $ 50,000 $ 53,834
Use of money and property 900 900 1,916
TOTAL REVENUES 50,900 50,900 55,750
EXPENDITURES:
Public works 50,000 50,000
NET CHANGE IN FUND BALANCE 900 900 55,750
FUND BALANCE-BEGINNING OF YEAR 97,012 97,012 97,012
FUND BALANCE -END OF YEAR $ 97 912 $ 97 912 $ 1522762
87
Variance with
Final Budget
Positive
(Negative)
$ 3,834
1,016
4,850
50,000
54,850
$ 542850
A-121
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, 2020
Budgeted Amounts
Original Final Actual
REVENUES:
Revenue from other agencies $ 696,200 $ 696,200 $ 686,691
Use of money and property 6,200 6,200 14,727
TOTAL REVENUES 702,400 702,400 701,418
EXPENDITURES:
Public works 640,000 1,111,401 698,807
NET CHANGE IN FUND BALANCE 62,400 (409,001) 2,611
FUND BALANCE-BEGINNING OF YEAR 577,100 577,100 577,100
FUND BALANCE -END OF YEAR $ 639 500 $ 168 099 $ 579 711
88
Variance with
Final Budget
Positive
(Negative)
$ (9,509)
8,527
(982)
412,594
411,612
$ 411l612
A-122
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, 2020
Budgeted Amounts
Original Final Actual
REVENUES:
Revenue from other agencies $ 839,400 $ 839,400 $ 827,835
Use of money and property 10,000 10,000 46,964
TOTAL REVENUES 849,400 849,400 874,799
EXPENDITURES:
Public works 1,201,100 1,971,367 1,236,692
EXCESS (DEFICIENCY) OF REVENUES
OVER (UNDER) EXPENDITURES (351,700) (1, 121,967) (361,893)
NET CHANGE IN FUND BALANCE (351,700) (1,121,967) (361 ,893)
FUND BALANCE-BEGINNING OF YEAR 2,379,324 2,379,324 2,379,324
FUND BALANCE-END OF YEAR $ 2,027,624 $ 1,257,357 $ 2,017,431
89
Variance with
Final Budget
Positive
(Negative)
$ (11,565)
36,964
25,399
734,675
760,074
760,074
$ 760,074
A-123
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, 2020
Budgeted Amounts
Original Final Actual
REVENUES:
Revenue from other agencies $ 130,000 $ 130,000 $ 155,948
Use of money and property 1,000 1,000 2,131
TOTAL REVENUES 131,000 131,000 158,079
OTHER FINANCING USES:
Transfers out (175,000) (175,000) (175,000)
NET CHANGE IN FUND BALANCE (44,000) (44,000) (16,921)
FUND BALANCE-BEGINNING OF YEAR 93,341 93,341 93,341
FUND BALANCE -END OF YEAR $ 49 341 $ 49 341 $ 76420
90
Variance with
Final Budget
Positive
(Negative2
$ 25,948
1,131
27,079
27,079
$ 27 079
A-124
CITY OF RANCHO PALOS VERDES
SCHEDULE OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCE-BUDGET AND ACTUAL
MEASURER SPECIAL REVENUE FUND
For the year ended June 30, 2020
Budgeted Amounts
Original Final Actual
REVENUES:
Revenue from other agencies $ 522,200 $ 522,200 $ 514,282
Use of money and property 23,200 23,200 18,778
TOTAL REVENUES 545,400 545,400 533,060
EXPENDITURES:
Public works 700,000 1,256,006 72,168
NET CHANGE IN FUND BALANCE (154,600) (710,606) 460,892
FUND BALANCE-BEGINNING OF YEAR 803,149 803,149 803,149
FUND BALANCE -END OF YEAR $ 648 549 $ 92 543 $ 12264,041
91
Variance with
Final Budget
Positive
(Negative~
$ (7,918)
(4,422)
(12,340)
1,183,838
(1,196,178)
$ (12196,178}
A-125
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, 2020
Budgeted Amounts
Original Final Actual
REVENUES:
Revenue from other agencies $ 90,000 $ 90,000 $ 93,963
Use of money and property 1,100 1,100 503
TOTAL REVENUES 91,100 91,100 94,466
OTHER FINANCING USES:
Transfers out (100,000) (100,000) (100,000)
NET CHANGE IN FUND BALANCE (8,900) (8,900) (5,534)
FUND BALANCE-BEGINNING OF YEAR 66,818 66,818 66,818
FUND BALANCE -END OF YEAR $ 57 918 $ 57 918 $ 61284
92
Variance with
Final Budget
Positive
(Negative2
$ 3,963
(5972
3,366
3,366
$ 3 366
A-126
CITY OF RANCHO PALOS VERDES
SCHEDULE OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCE-BUDGET AND ACTUAL
MEASURE M SPECIAL REVENUE FUND
For the year ended June 30, 2020
Budgeted Amounts
Original Final Actual
REVENUES:
Revenue from other agencies $ 591,800 $ 591,800 $ 578,741
Use of money and property 300 300 1,877
TOTAL REVENUES 592,100 592,100 580,618
EXPENDITURES:
Public works 536,000 536,000 525,316
NET CHANGE IN FUND BALANCE 56,100 56,100 55,302
FUND BALANCE -BEGINNING OF YEAR 43,707 43,707 43,707
FUND BALANCE -END OF YEAR $ 99 807 $ 99 807 $ 99 009
93
Variance with
Final Budget
Positive
(Negative)
$ (13,059)
1,577
(11,482)
10,684
(798)
$ (798}
A-127
CITY OF RANCHO PALOS VERDES
SCHEDULE OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCE-BUDGET AND ACTUAL
ABALONE COVE SEWER ASSESSMENT SPECIAL REVENUE FUND
For the year ended June 30, 2020
Variance with
Final Budget
Budgeted Amounts Positive
Original Final Actual {Negative2
REVENUES:
Taxes $ 55,100 $ 55,100 $ 52,379 $ (2,721)
Use of money and property 1,900 1,900 7,675 5,775
TOTAL REVENUES 57,000 57,000 60,054 3,054
EXPENDITURES:
Public works 648,100 648,100 138,009 510,091
EXCESS (DEFICIENCY) OF REVENUES
OVER (UNDER) EXPENDITURES (591,100) (591,100) (77,955) 513,145
OTHER FINANCING SOURCES:
Transfers in 455,000 455,000 (455,000)
NET CHANGE IN FUND BALANCE (136,100) (136,100) (77,955) 58,145
FUND BALANCE-BEGINNING OF YEAR 336,954 336,954 336,954
FUND BALANCE -END OF YEAR $ 2002854 $ 2002854 $ 2582999 $ 58 145
94
A-128
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, 2020
Budgeted Amounts
Original Final Actual
REVENUES:
Use of money and property $ 900 $ 900 $
EXPENDITURES:
Parks and recreation 1,045
NET CHANGE IN FUND BALANCE 900 900 (1,045)
FUND BALANCE -BEGINNING OF YEAR 1,045 1,045 1,045
FUND BALANCE-END OF YEAR $ 1 945 $ 1 945 $
95
Variance with
Final Budget
Positive
(Negative2
$ (900)
(1,045)
145
$ 145
A-129
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, 2020
Variance with
Final Budget
Budgeted Amounts Positive
Original Final Actual (Negative)
REVENUES:
Use of money and property $ 9,500 $ 9,500 $ 13,660 $ 4,160
Other revenue 9,900 9,900
TOTAL REVENUES 9,500 9,500 23,560 14,060
EXPENDITURES:
Public works 25,000 18,000 3,406 14,594
Parks and recreation 25,000 13,363 11,637
TOTAL EXPENDITURES 25,000 43,000 16,769 26,231
NET CHANGE IN FUND BALANCE (15,500) (33,500) 6,791 (12,171)
FUND BALANCE-BEGINNING OF YEAR 775,163 775,163 775,163
FUND BALANCE -END OF YEAR $ 759 663 $ 7412663 $ 7812954 $ {1221712
96
A-130
CITY OF RANCHO PALOS VERDES
SCHEDULE OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCE-BUDGET AND ACTUAL
JOINT POWERS IMPROVEMENT AUTHORITY PORTUGUESE BEND
SPECIAL REVENUE FUND
For the year ended June 30, 2020
Budgeted Amounts
Original Final Actual
REVENUES:
Use of money and property $ 1,100 $ 1,100 $ 2,136
EXPENDITURES:
Public works 90,000 90,000 54,043
EXCESS (DEFICIENCY) OF REVENUES
OVER (UNDER) EXPENDITURES (88,900) (88,900) (51,907)
OTHER FINANCING SOURCES:
Transfers in 55,000 55,000 55,000
NET CHANGE IN FUND BALANCE (33,900) (33,900) 3,093
FUND BALANCE -BEGINNING OF YEAR 80,975 80,975 80,975
FUND BALANCE-END OF YEAR $ 47 075 $ 47 075 $ 84l068
97
Variance with
Final Budget
Positive
(Negative~
$ 1,036
35,957
36,993
36,993
$ 36:993
A-131
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, 2020
Budgeted Amounts
Original Final Actual
REVENUES:
Revenue from other agencies $ 139,300 $ 139,300 $ 226,364
EXPENDITURES:
Public works 150,600 346,095 211,805
NET CHANGE IN FUND BALANCE (11,300) (206,795) 14,559
FUND BALANCE-BEGINNING OF YEAR 11,458 11,458 11,458
FUND BALANCE -END OF YEAR $ 158 $ {195l3372 $ 26 017
98
Variance with
Final Budget
Positive
(Negative}
$ 87,064
134,290
221,354
$ 221l354
A-132
CITY OF RANCHO PALOS VERDES
SCHEDULE OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCE-BUDGET AND ACTUAL
FEDERAL GRANTS SPECIAL REVENUE FUND
For the year ended June 30, 2020
Variance with
Final Budget
Budgeted Amounts Positive
Original Final Actual (Negative)
REVENUES:
Revenue from other agencies $ 452,800 $ 452,800 $ $ (452,800)
Use of money and property 1,000 1,000 (1,000)
TOTAL REVENUES 453,800 453,800 (453,800)
EXPENDITURES:
Public works 15 (15)
EXCESS (DEFICIENCY) OF REVENUES
OVER (UNDER) EXPENDITURES 453,800 453,800 (15) (453,815)
OTHER FINANCING SOURCES:
Transfers out (98,300) (98,300)
NET CHANGE IN FUND BALANCE 453,800 355,500 (98,315) (453,815)
FUND BALANCE -BEGINNING OF YEAR 98,315 98,315 98,315
FUND BALANCE-END OF YEAR $ 552,115 $ 453,815 $ $ (453,815}
99
A-133
CITY OF RANCHO PALOS VERDES
SCHEDULE OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCE-BUDGET AND ACTUAL
STATE GRANTS SPECIAL REVENUE FUND
For the year ended June 30, 2020
Budgeted Amounts
Original Final Actual
REVENUES:
Revenue from other agencies $ 600,000 $ 600,000 $ 626,179
EXPENDITURES:
Public works 557,206 277,373
NET CHANGE IN FUND BALANCE 600,000 42,794 348,806
FUND DEFICIT-BEGINNING OF YEAR (563,741) (563,741) (563,741)
FUND BALANCE (DEFICIT) -
END OF YEAR $ 36:259 $ (520)947) $ (214)9352
100
Variance with
Final Budget
Positive
(Negative)
$ 26,179
279,833
306,012
$ 306:012
A-134
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, 2020
Budgeted Amounts
Original Final Actual
REVENUES:
Use of money and property $ 22,000 $ 22,000 $ 23,090
TOTAL REVENUES 22,000 22,000 23,090
EXPENDITURES:
Public works 846,624 545,812
EXCESS (DEFICIENCY) OF REVENUES
OVER (UNDER) EXPENDITURES 22,000 (824,624) (522,722)
FUND BALANCE-BEGiNNING OF YEAR 1,701,092 1,701,092 1,701,092
FUND BALANCE -END OF YEAR $ 127232092 $ 876 468 $ 121782370
101
Variance with
Final Budget
Positive
(Negative2
$ 1,090
1,090
300,812
301,902
$ 3012902
A-135
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, 2020
Budgeted Amounts
Original Final Actual
REVENUES:
Use of money and property $ 3,800 $ 3,800 $ 7,439
Other revenues 114,694
TOTAL REVENUES 3,800 3,800 122,133
EXPENDITURES:
Public works 310,000 310,000 286,881
NET CHANGE IN FUND BALANCE (306,200) (306,200) (164,748)
FUND BALANCE-BEGINNING OF YEAR 511,563 511,563 511,563
FUND BALANCE-END OF YEAR $ 205,363 $ 205,363 $ 346,815
102
Variance with
Final Budget
Positive
(Negative)
$ 3,639
114,694
118,333
23,119
95,214
$ 95 214
A-136
CITY OF RANCHO PALOS VERDES
SCHEDULE OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCE-BUDGET AND ACTUAL
LOW-MODERATE INCOME CAPITAL PROJECTS FUND
For the year ended June 30, 2020
Budgeted Amounts
Original Final Actual
REVENUES:
Taxes $ 43,200 $ 43,200 $ 28,624
Use of money and property 1,500 1,500 3,237
NET CHANGE IN FUND BALANCE 44,700 44,700 31,861
FUND BALANCE -BEGINNING OF YEAR 190,360 190,360 190,360
FUND BALANCE -END OF YEAR $ 235,060 $ 235,060 $ 222,221
103
Variance with
Final Budget
Positive
(Negative)
$ (14,576)
(14,576)
$ {14,576)
A-137
CITY OF RANCHO PALOS VERDES
SCHEDULE OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCE-BUDGET AND ACTUAL
AFFORDABLE HOUSING IN-LIEU CAPITAL PROJECTS FUND
For the year ended June 30, 2020
Budgeted Amounts
Original Final Actual
REVENUES:
Use of money and property $ 6,200 $ 6,200 $ 14,846
Other revenues 2,445
NET CHANGE IN FUND BALANCE 6,200 6,200 17,291
FUND BALANCE -BEGINNING OF YEAR 838,837 838,837 838,837
FUND BALANCE -END OF YEAR $ 845l037 $ 845 037 $ 856l128
104
Variance with
Final Budget
Positive
(Ne~ative2
$ 8,646
2,445
11,091
$ 11 091
A-138
CITY OF RANCHO PALOS VERDES
SCHEDULE OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCE-BUDGET AND ACTUAL
HABIT AT RESTORATION PERMANENT FUND
For the year ended June 30, 2020
Budgeted Amounts
Original Final Actual
REVENUES:
Use of money and property $ 12,400 $ 12,400 $ 15,225
Other revenues 3,500
TOTAL REVENUES 12,400 12,400 18,725
EXPENDITURES:
Public works 179,500 179,500 152,745
NET CHANGE IN FUND BALANCE (167,100) (167,100) (134,020)
FUND BALANCE-BEGINNING OF YEAR 949,518 949,518 949,518
FUND BALANCE -END OF YEAR $ 782,418 $ 782,418 $ 815,498
105
Variance with
Final Budget
Positive
(Negative2
$ 2,825
3,500
6,325
26,755
33,080
$ 33,080
A-139
CITY OF RANCHO PALOS VERDES
SCHEDULE OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCE-BUDGET AND ACTUAL
SUBREGION ONE PERMANENT FUND
For the year ended June 30, 2020
Variance with
Final Budget
Budgeted Amounts Positive
Original Final Actual (Negative~
REVENUES:
Use of money and property $ 8,100 $ 8,100 $ 13,442 $ 5,342
EXPENDITURES:
Public works 46,800 46,800 42,530 4,270
EXCESS (DEFICIENCY) OF REVENUES
OVER (UNDER) EXPENDITURES (38,700) (38,700) (29,088) 1,072
OTHER FINANCING SOURCES:
Transfers in 35,000 35,000 35,000
NET CHANGE IN FUND BALANCE (3,700) (3,700) 5,912 1,072
FUND BALANCE-BEGINNING OF YEAR 765,320 765,320 765,320
FUND BALANCE -END OF YEAR $ 761,620 $ 761,620 $ 771,232 $ I 072
106
A-140
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, 2020
Variance with
Final Budget
Bud~eted Amounts Positive
Original Final Actual (Negative)
REVENUES:
Use of money and property $ 3,400 $ 3,400 $ 26,260 $ 22,860
EXPENDITURES:
Public works 56,000 56,000 20,509 35,491
EXCESS (DEFICIENCY) OF REVENUES
OVER (UNDER) EXPENDITURES (52,600) (52,600) 5,751 (12,631)
OTHER FINANCING SOURCES:
Transfers in 50,000 50,000 50,000
NET CHANGE IN FUND BALANCE (2,600) (2,600) 55,751 (12,631)
FUND BALANCE-BEGINNING OF YEAR 1,072,611 1,072,611 1,072,611
FUND BALANCE -END OF YEAR $ 120702011 $ 120702011 $ 1,128,362 $ (1226312
107
A-141
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, 2020
Budgeted Amounts
Original Final Actual
REVENUES:
Use of money and property $ 285,500 $ 285,500 $ 471,473
EXPENDITURES:
Capital outlay:
Street improvements 4,060,000 5,469,694 3,664,069
Parks/Trails/Open Space improvements 1,075,000 1,026,309 60,486
Sewer improvements 53,286 34,639
Building improvements 150,000 385,101 36,748
Storm water quality improvements 3,632,000 4,105,429 460,225
Landslide improvements 1,000,000 1,972,949 396,741
TOTAL EXPENDITURES 9,917,000 13,012,768 4,652,908
EXCESS (DEFICIENCY) OF REVENUES
OVER (UNDER) EXPENDITURES (9,631,500) (12,727,268) (4,181,435)
OTHER FINANCING SOURCES (USES):
Transfers in 3,976,900 2,617,300 2,509,052
Transfers out (455,000) (455,000)
TOTAL FINANCING SOURCES (USES) 3,521,900 2,162,300 2,509,052
NET CHANGE IN FUND BALANCE (6,109,600) (10,564,968) (1,672,383)
FUND BALANCE-BEGINNING OF YEAR 27,017,191 27,017,191 27,017,191
FUND BALANCE -END OF YEAR $20,907,591 $ 16,452,223 $ 25,344,808
108
Variance with
Final Budget
Positive
(Negative~
$ 185,973
1,805,625
965,823
18,647
348,353
3,645,204
1,576,208
8,359,860
8,545,833
(108,248)
455,000
346,752
8,892,585
$ 8,892,585
A-142
STATISTICAL SECTION
A-143
A-144
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
Financial Trends
These schedules contain trend information to help the reader understand how the
City's financial performance and well-being have changed over time.
Page
110
Revenue Capacity 120
These schedules contain information to help the reader assess the City's most
significant local revenue source, property tax.
Debt Capacity 127
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 130
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 13 5
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.
109
A-145
City of Rancho Palos Verdes
Net Position by Component
Last Ten Fiscal Years
(accrual basis of accounting)
(amounts expressed in thousands)
2011 2012 2013 2014 2015
Governmental activities
Net investment in capital assets $ 115,145 $ 114,488 $ 113,284 $ 114,427 $ 119,450
Restricted 1,750 1,750 1,835 11,792 11,647
Unrestricted 39,066 67,112 46,687 46,679 42,208
Total governmental activities net position $ 155,961 $ 183,351 $ 161,806 $ 172,898 $ 173,305
Business-type activities
Net investment in capital assets $ 12,753 $ 13,356 $ 18,319 $ 29,557 $ 31,168
Restricted
Unrestricted 3,365 3,532 9,727 5,317 5,334
Total business-type activities net position $ 16,118 $ 16,888 $ 28,046 $ 34,874 $ 36,502
Primary government
Net investment in capital assets $ 127,898 $ 127,845 $ 131,603 $ 143,984 $ 150,618
Restricted 1,750 1,750 1,835 11,792 11,647
Unrestricted 42,431 70,644 56,414 51,996 47,542
Total primary government net position $ 172,079 $ 200,238 $ 189,852 $ 207,772 $ 209,807
110
A-146
City of Rancho Palos Verdes
Net Position by Component
Last Ten Fiscal Years
(accrual basis of accounting)
(amounts expressed in thousands)
2016 2017 2018 2019 2020
Governmental activities
Net investment in capital assets $ 118,399 $ 123,437 $ 125,420 $ 159,557 $ 156,763
Restricted 21,120 19,387 17,300 16,170 24,129
Unrestricted 42,210 43,618 44,168 47,739 38,568
Total governmental activities net position $ 181,729 $ 186,442 $ 186,888 $ 223,466 $ 219,460
Business-type activities
Net investment in capital assets $ 31,663 $ 31,311 $ 34,996 $ $
Restricted
Unrestricted 5,598 4,600 (1282
Total business-type activities net position $ 37,261 $ 35,911 $ 34,868 $ $
Primary government
Net investment in capital assets $ 150,062 $ 154,748 $ 160,416 $ 159,557 $ 156,763
Restricted 21,120 19,387 17,300 16,170 24,129
Unrestricted 47,808 48,218 44,040 47,739 38,568
Total primary government net position $ 218,990 $ 222,353 $ 221,756 $ 223,466 $ 219,460
111
A-147
City of Rancho Palos Verdes
Changes in Net Position
Last Ten Fiscal Years
(accrual basis of accounting)
(amounts expressed in thousands)
2011 2012 2013 2014 2015
Expenses
Governmental activities:
Administration $ 5,997 $ 5,906 $ 5,534 $ 7,530 $ 7,048
Public safety 4,335 4,178 4,348 4,429 4,670
Public works 10,389 11,202 10,874 9,377 10,771
Community development 2,622 2,432 2,526 1,927 2,072
Parks and recreation 1,391 1,490 1,696 1,369 1,669
Non-departmental 35 191
Interest on long-term debt 260 109
Total governmental activities expenses 24,994 25,318 24,978 24,667 26,421
Business-type activities:
Water Quality Flood Protection 489 560 594 659 1,422
Total primary government expenses $ 25,483 $ 25,878 $ 25,572 $ 25,326 $ 27,843
Program Revenues
Governmental activities:
Charges for services:
Administration $ 654 $ 747 $ 779 $ 120 $ 108
Public safety 261 194 150 42 43
Public works 622 684 543 169 432
Community development 1,714 1,644 1,854 1,772 2,058
Parks and recreation 457 503 476 18 144
Non-departmental
Operating grants and contributions 3,689 3,628 4,133 2,506 2,274
Capital grants and contributions 5 139 139 2,912 1,230
Total governmental activities program revenues 7,402 7,538 8,074 7,539 6,289
Business-type activities:
Charges for services:
Water Quality Flood Protection 1,312 1,319 1,313 1,361 1,369
Operating grants and contributions 2,137
Capital grants and contributions 6,115 1,213
Total business-type activities program revenues 1,312 1,319 3,450 7,476 2,582
Total primary government program revenues $ 8,714 $ 8,857 $ 11,524 $ 15,015 $ 8,871
Net (expense)/revenue
Governmental activities $ (17,592) $ (17,780) $ (16,904) $ (17,128) $ (20,132)
Business-type activities 823 759 2,856 6,817 1,159
Total primary government net expense $ (16,769) $ (17,022) $ (14,048) $ ~10,311) $ (18,973)
General Revenues and Other Changes in Net Position
Governmental activities:
Taxes
Property taxes $ 11,854 $ 11,480 $ 11,284 $ 11,991 $ 12,452
Transient occupancy tax 2,640 3,349 3,790 4,250 4,812
Sales taxes 1,548 1,449 1,588 1,642 1,758
Franchise taxes 1,825 1,881 1,907 1,998 2,045
Utility user taxes 2,407 2,333 2,481 2,510 1,973
Other taxes 814 674 778 1,589 1,564
Investment income 318 604 184 94 122
Other 271 52 929 4,146 3,231
Transfers (8,293) (458)
Extraordinary item 23,348 (19,289)
Total governmental activities 21,677 45,170 (4,641) 28,220 27,499
Business-type activities:
Investment income 13 11 10 11 10
Other
Transfers 8,293 458
Total business-type activities 13 11 8,303 11 468
Total primary government $ 21,690 $ 45,181 $ 3,662 $ 28,231 $ 27,967
Change in Net Position
Governmental activities $ 4,085 $ 27,390 $ (21,545) $ 11,092 $ 7,367
Business-type activities 836 770 11,159 6,828 1,627
Total primary government net expense $ 4,921 $ 28,159 $ (10,386) $ 17,920 $ 8,994
112
A-148
City of Rancho Palos Verdes
Changes in Net Position
Last Ten Fiscal Years
(accrual basis of accounting)
(amounts expressed in thousands)
2016 2017 2018 2019 2020
Expenses
Governmental activities:
Administration $ 8,062 $ 6,746 $ 7,258 $ 6,563 $ 8,013
Public safety 5,215 6,534 7,339 7,214 7,360
Public works 9,610 10,638 16,073 16,064 18,182
Community development 1,971 2,664 2,726 3,052 2,857
Parks and recreation 2,052 2,434 2,736 3,064 2,857
Non-departmental 134 2,400 1,166 1,134 1,192
Interest on long-term debt
Total governmental activities expenses 27,044 31,416 37,298 37,091 40,461
Business-type activities:
Water Quality Flood Protection 646 1,400 1,071 811
Total primary government expenses $ 27,690 $ 32,816 $ 38,369 $ 37,902 $ 40,461
Program Revenues
Governmental activities:
Charges for services:
Administration $ 318 $ 1,081 $ 1,032 $ 1,065 $ 1,064
Public safety 179 140 124 104 111
Public works 159 274 659 227 309
Community development 958 2,066 729 2,130 1,793
Parks and recreation 781 708 2,083 766 579
Non-departmental 96
Operating grants and contributions 2,332 4,196 4,481 4,608 4,605
Capital grants and contributions 1,111 818 769 1,137 625
Total governmental activities program revenues 5,934 9,283 9,877 10,037 9,086
Business-type activities:
Charges for services:
Water Quality Flood Protection 1,385 11
Operating grants and contributions
Capital grants and contributions
Total business-type activities program revenues 1,385 11
Total primary government program revenues $ 7,319 $ 9,294 $ 9,877 $ 10,037 $ 9,086
Net (expense )/revenue
Governmental activities $ (21,110) $ (22,133) $ (27,421) $ (27,054) $ (31,375)
Business-type activities 738 (1,389) (1,071) (811)
Total primary government net expense $ (20,372) $ (23,522) $ (28,492) $ (27,865) $ (31,375)
General Revenues and Other Changes in Net Position
Governmental activities:
Taxes
Property taxes $ 13,764 $ 13,302 $ 13,762 $ 14,350 $ 14,994
Transient occupancy tax 5,197 5,601 5,615 5,645 3,910
Sales taxes 2,104 2,463 2,129 2,661 2,163
Franchise taxes 2,045 1,985 1,838 2,150 2,146
Utility user taxes 1,866 1,775 403 1,917 1,912
Other taxes 1,179 365 2,520 429 395
Investment income 214 434 838 1,313 1,225
Other 2,608 920 763 909 626
Transfers 34,258
Extraordinary item
Total governmental activities 28,977 26,845 27,868 63,632 27,371
Business-type activities:
Investment income 21 35 29
Other 200
Transfers (34,258)
Total business-type activities 21 38 29 (34,058)
Total primary government $ 28,998 $ 26,883 $ 27,897 $ 29,574 $ 27,371
Change in Net Position
Governmental activities $ 7,868 $ 4,713 $ 447 $ 36,578 $ (4,004)
Business-type activities 759 (1,351) (1,042) (34,869)
Total primary government net expense $ 8,627 $ 3,362 $ (595) $ 1,709 $ (4,004)
113
A-149
(THIS PAGE INTENTIONALLY LEFT BLANK)
114
A-150
Fiscal Property
Year Tax
2011 11,854
2012 11,480
2013 11,284
2014 11,991
2015 12,452
2016 13,764
2017 13,302
2018 13,028
2019 13,567
2020 14,184
Source
City General Ledger
City of Rancho Palos Verdes
General Governmental Tax Revenues By Source
Last Ten Fiscal Years
(Modified Accrual Basis of Accounting)
(Amounts expressed in thousands)
Transient Utility
Occupancy Sales Franchise Users
Tax Tax Tax Tax
2,640 1,518 1,825 2,407
3,349 1,452 1,881 2,333
3,790 1,589 1,907 2,481
4,250 1,642 1,998 2,510
4,812 1,758 2,044 1,973
5,197 2,104 2,045 1,866
5,601 2,463 1,985 1,775
5,615 2,520 2,129 1,838
5,645 2,661 2,150 1,917
3,910 2,163 2,146 1,912
115
Other
Taxes
1,175
1,372
1,492
1,590
1,564
1,179
365
1,290
1,376
1,291
Total
21,419
21,867
22,543
23,981
24,603
26,155
25,491
26,420
27,316
25,606
A-151
City of Rancho Palos Verdes
Fund Balances of Governmental Funds
Last Ten Fiscal Years
(modified accrual basis of accounting)
(amounts expressed in thousands)
2011 2012 2013 2014 2015
General Fund
Non-Spendable $ 7,515 $ 7,493 $ 138 $ 144 $ 598
Restricted
Committed
Assigned
Unassigned 11,385 12,464 14,370 15,474 16,055
Total General Fund $ 18,900 $ 19,957 $ 14,508 $ 15,618 $ 16,653
All other Govermnental Funds
Non-Spendable
Special Revenue Funds $ 4,818 $ 3,066 $ $ $
Debt Service Fund 573
Capital Projects Funds
Permanent Fund 1,750 1,750 1,835 1,845 1,855
Restricted
Special Revenue Funds 7,952 8,187 7,849 8,445 8,362
Capital Projects Funds 313
Permanent Fund 319 226 280 1,502 1,492
Committed
Special Revenue Funds 36 58 55
Capital Projects Funds
Permanent Fund
Assigned
Special Revenue Funds 794 572
Capital Projects Funds 11,650 15,407 13,084 18,535 21,078
Permanent Fund
Unassigned
Special Revenue Funds (126) (108) (198) (116) (59)
Debt Service Fund (19,687)
Capital Projects Funds
Permanent Fund
Total all other Govermnental Funds $ 7,562 $ 28,528 $ 22,885 $ 31,063 $ 33,355
116
A-152
City of Rancho Palos Verdes
Fund Balances of Governmental Funds
Last Ten Fiscal Years
(modified accrual basis of accounting)
(amounts expressed in thousands)
2016 2017 2018 2019 2020
General Fund
Non-Spendable $ 564 $ 190 $ 913 $ 1,016 $ 249
Restricted
Committed 802 964 715 341 167
Assigned
Unassigned 13,702 15,671 16,450 19,431 21,333
Total General Fund $ 15,068 $ 16,825 $ 18,078 $ 20,788 $ 21,749
All other Governmental Funds
Non-Spendable
Special Revenue Funds $ $ $ $ $
Debt Service Fund
Capital Projects Funds
Permanent Fund 1,866 1,877 1,889 1,902 1,915
Restricted
Special Revenue Funds 9,757 11,702 12,825 10,437 10,420
Capital Projects Funds 3,000 4,660 1,438 2,946 2,458
Permanent Fund 1,312 1,148 1,148 885 800
Committed
Special Revenue Funds 353
Capital Projects Funds 3,467
Permanent Fund
Assigned
Special Revenue Funds 476 479
Capital Projects Funds 23,902 23,149 23,942 25,100 23,965
Permanent Fund
Unassigned
Special Revenue Funds (564) (215)
Debt Service Fund
Capital Projects Funds
Permanent Fund
Total all other Governmental Funds $ 44,133 $ 43,015 $ 41,242 $ 40,706 $ 39,343
117
A-153
City of Rancho Palos Verdes
Changes in Fund Balances of Governmental Funds
Last Ten Fiscal Years
(Modified Accrual basis of Accounting)
(Amounts expressed in thousands)
2011 2012 2013 2014 2015
Revenues
Taxes $ 21,419 $ 21,867 $ 22,543 $ 23,981 $ 24,603
Licenses and permits 1,933 1,806 2,027 1,951 2,515
Fines and forfeitures 210 159 117 128 135
Use of money and property 1,560 1,350 1,383 846 653
Charges for services 73 149 141 323 427
Donation 445
Revenues from other agencies 3,162 3,421 3,395 5,301 3,794
Other Revenues 229 259 741 3,068 2,377
Total Revenues 28,586 29,011 30,791 35,598 34,504
Expenditures
Administration 5,503 5,726 5,401 5,792 5,135
Public Safety 4,335 4,178 4,348 4,492 4,761
Public Works 7,875 7,616 7,240 7,611 8,042
Parks and Recreation 1,257 1,479 1,557 1,573 1,819
Community Development 2,784 2,484 2,591 2,640 2,870
Non-Departmental 35 190
Pass Through to other agencies
Capital Outlay 2,557 3,155 2,721 4,113 8,697
Debt Service
Principal 423 464
Interest 887 498
Total Expenditures 25,621 25,599 23,857 26,256 31,514
Excess of Revenues over (under) Expenditures 2,965 3,412 6,934 9,342 2,990
Other Financing Sources (uses)
Sales of capital assets 350
Transfers in 8,944 8,226 7,954 10,424 13,525
Transfers out (8,944) (7,856) (16,247) (10,479) (13,188)
Bond Proceeds
Advances to the Redevelopment Agency
Total Other Financing Sources (uses) 350 371 (8,293) (55) 337
Extraordinary Gain (Loss) 18,240 (6,743)
Net change in Fund Balances $ 3,315 $ 22,023 $ (8,102) $ 9,287 $ 3,327
Cost of Assets Capitalized 3,180 2,865 2,022 4,820 8,490
Debt Services as a percentage of Non-Capital
Expenditures 5.8% 4.2% 0.0% 0.0% 0.0%
118
A-154
City of Rancho Palos Verdes
Changes in Fund Balances of Governmental Funds
Last Ten Fiscal Years
(Modified Accrual basis of Accounting)
(Amounts expressed in thousands)
2016 2017 2018 2019 2020
Revenues
Taxes $ 25,725 $ 25,491 $ 26,266 $ 28,098 $ 26,416
Licenses and permits 2,383 3,044 3,095 2,205 1,917
Fines and forfeitures 180 153 144 331 365
Use of money and property 750 415 714 1,656 1,446
Charges for services 558 1,072 1,113 215 203
Revenues from other agencies 3,443 5,117 5,345 5,158 5,442
Other revenues 1,668 732 1,038 1,026 1,009
Total Revenues 34,707 36,024 37,715 38,689 36,798
Expenditures
Administration 6,183 5,445 5,867 5,581 6,319
Public Safety 5,215 6,534 7,399 7,214 7,360
Public Works 7,961 9,084 11,068 13,546 12,260
Parks and Recreation 2,042 2,175 2,493 2,769 2,548
Community Development 2,619 2,664 2,736 3,052 2,857
Non-Departmental 238 2,400 1,167 1,134 1,204
Pass Through to other agencies
Capital Outlay 1,344 7,106 7,504 3,291 4,653
Debt Service
Principal
Interest
Total Expenditures 25,602 35,408 38,234 36,587 37,201
Excess of Revenues over (under) Expenditures 9,105 616 (519) 2,102 (403)
Other Financing Sources (uses)
Sales of capital assets
Transfers in 11,784 4,577 5,044 6,027 2,924
Transfers out (11,784) (4,577) (5,044) (5,954) (2,924)
Bond Proceeds
Advances to the Redevelopment Agency
Total Other Financing Sources (uses) 73
Extraordinary Gain (Loss)
Net change in Fund Balances $ 9,105 $ 616 $ (5192 $ 2,175 $ ~403)
Cost of Assets Capitalized 2,398 8,228 8,228 5,496 4,058
Debt Services as a percentage of Non-Capital Expenditur 0.0% 0.0% 0.0% 0.0% 0.0%
119
A-155
Fiscal
Year Residential
End Property
2011 8,362,052
2012 8,596,777
2013 8,843,139
2014 9,190,789
2015 9,492,704
2016 10,094,704
2017 10,770,321
2018 11,302,341
2019 11,924,464
2020 12,466,277
Source
City of Rancho Palos Verdes
Assessed Value of Taxable Property
Last Ten Fiscal Years
(In thousands of dollars)
Commercial Industrial
Property Property
396,195 3,333
390,497 3,358
402,533 3,425
475,510 3,493
486,378 3,509
501,636 3,580
531,536 3,634
541,829 3,707
580,286 3,781
597,016 3,857
2010-2013 & 2006-07 County Assessor data, Avenu Insights & Analytics
2008-2009 data is provided from previously published CAFR's
Unitary value of $840,000 is excluded.
120
Other Unsecured
Property Property
570,551 45,258
564,763 70,284
581,160 48,147
660,569 46,962
679,241 45,906
695,738 44,300
506,899 24,986
521,883 26,829
551,820 25,824
556,186 26,416
A-156
City of Rancho Palos Verdes
Assessed Value and Estimated Actual Value of Taxable Property
Last Ten Fiscal Years
(In thousands of dollars)
City
Fiscal Less Taxable Direct
Year Tax-Exempt Assessed Tax
End Pro2er~ Value Rate (1)
2011 158,388 9,219,001 0.063728
2012 157,307 9,468,372 0.063728
2013 174,167 9,704,237 0.063728
2014 153,434 10,223,889 0.063728
2015 151,709 10,556,029 0.063728
2016 155,138 11,184,820 0.063728
2017 174,779 11,662,598 0.063728
2018 180,953 12,215,635 0.063728
2019 184,447 12,901,730 0.063728
2020 171,367 13,478,385 0.063728
Source
2010-2013 & 2006-07 County Assessor data, Avenu Insights & Analytics
2008-2009 data is provided from previously published CAFR's
Unitary value of$840,000 is excluded.
(I) City Direct Tax Rate is represented by TRA 001-224.
Estimated
Actual
Taxable
Value (2)
$ 9,067,313
$ 10,683,820
$ 11,390,239
$ 13,967,877
$ 13,571,675
$ 15,366,477
$ 17,011,415
$ 15,669,728
$ 17,984,167
$ 17,927,678
Factor of
Taxable
Assessed Value (3)
0.98355
1.12837
1.17374
1.36620
1.28568
1.37387
1.45863
1.28276
1.39393
1.33011
Assessed
Value as a
Percentage of
Actual Value
101.67%
88.62%
85.20%
73.20%
77.78%
72.79%
68.56%
77.96%
71.74%
75.18%
(2) Estimated Actual Value is derived from a series of calculations comparing median assessed values from 1940 to current median sale prices. Based
on these calculations a factor was extrapolated and applied to current assessed values.
121
A-157
City of Rancho Palos Verdes
Property Tax Rates -Direct and Overlapping Governments
Last Ten Fiscal Years
2010-11 2011-12 2012-13
CITY DIRECT RATE 0.063728 0.063728 0.063728
All other direct rates:
LA COUNTY GENERAL 0.441223 0.441223 0.441223
LA COUNTY ACCUM CAP OUTLAY 0.000110 0.000110 0.000110
CON SOL. FIRE PRO.DIST OF LA CO. 0.169715 0.169715 0.169715
LA CO. FIRE-FFW 0.006910 0.006910 0.006910
LA CO.FL.CON.DR.IMP.DIST.MAINT. 0.002597 0.002597 0.002597
LA CO FLOOD CONTROL MAINT 0.014699 0.014699 0.014699
PALOS VERDES LIBRARY DIST MAINT 0.043470 0.043470 0.043470
LA CO WEST VECTOR CONTROL DIST. 0.000319 0.000319 0.000319
CO SANITATION DISTNO 5 OPERAT 0.017499 0.017499 0.017499
WTR REPLENISHMENT DIST OF SO CAL 0.000181 0.000181 0.000181
ERAF 0.000000 0.000000 0.000000
EDUCATIONAL AUG FD IMPOUND 0.000000 0.000000 0.000000
COUNTY SCHOOL SERVICES 0.001369 0.001369 0.001369
CHILDREN'S INSTIL TUITION FUND 0.002717 0.002717 0.002717
LA CITY COMM COLLEGE DIST 0.029214 0.029214 0.029214
LA COMM COLL CHILDREN'S CTR FD 0.000302 0.000302 0.000302
PALOS VERDES PENINSULA USD 0.196986 0.196986 0.196986
CO.SCH.SERV.FD-LOS ANGELES 0.008085 0.008085 0.008085
DEV.CTR.HDCPD MINOR-LA UNIF. 0.000876 0.000876 0.000876
TOTAL 1.000000 1.000000 1.000000
Debt Service Rates
COUNTY 0.000000 0.000000 0.000000
PALOS VERDES PEN USD 0.022493 0.022511 0.024102
COMMNTY COLLEGE 0.040310 0.035296 0.048750
PALOS VERDES LIB 0.006719 0.006359 0.006441
FLOOD CONTROL 0.000000 0.000000 0.000000
METRO WATER DIST 0.003700 0.003700 0.003500
TOTAL 0.073222 0.067866 0.082793
TOTAL TAX RATE 1.073222 1.067866 1.082793
Source
2010-2015 County Assessor data, Avenu Insights & Analytics
2007-2009 data is provided from previously published CAFR's
City has no separate debt service rate, direct rate is 100% operating.
TRA 149 is represented for this report.
122
2013-14 2014-15
0.063728 0.063728
0.441223 0.441223
0.000110 0.000110
0.169715 0.169715
0.006910 0.006910
0.002597 0.002597
0.014699 0.014699
0.043470 0.043470
0.000319 0.000319
0.017499 0.017499
0.000181 0.000181
0.000000 0.000000
0.000000 0.000000
0.001369 0.001369
0.002717 0.002717
0.029214 0.029214
0.000302 0.000302
0.196986 0.196986
0.008085 0.008085
0.000876 0.000876
1.000000 1.000000
0.000000 0.000000
0.023109 0.023289
0.044541 0.040174
0.006118 0.005854
0.000000 0.000000
0.003500 0.003500
0.077268 0.072817
1.077268 1.072817
A-158
City of Rancho Palos Verdes
Property Tax Rates-Direct and Overlapping Governments
Last Ten Fiscal Years
2015-16 2016-17 2017-18
CITY DIRECT RATE 0.063728 0.063728 0.063728
All other direct rates:
LA COUNTY GENERAL 0.441223 0.441223 0.441223
LA COUNTY ACCUM CAP OUTLAY 0.000110 0.000110 0.000110
CONSOL. FIRE PRO.DIST OF LA CO. 0.169715 0.169715 0.169715
LA CO. FIRE-FFW 0.006910 0.006910 0.006910
LA CO.FL.CON.DR.IMP.DIST.MAINT. 0.002597 0.002597 0.002597
LA CO FLOOD CONTROL MAINT 0.014699 0.014699 0.014699
PALOS VERDES LIBRARY DIST MAINT 0.043470 0.043470 0.043470
LA CO WEST VECTOR CONTROL DIST. 0.000319 0.000319 0.000319
CO SANITATION DIST NO 5 OPERA T 0.017499 0.017499 0.017499
WTR REPLENISHMENT DIST OF SO CAL 0.000181 0.000181 0.000181
ERAF 0.000000 0.000000 0.000000
EDUCATIONAL AUG FD IMPOUND 0.000000 0.000000 0.000000
COUNTY SCHOOL SERVICES 0.001369 0.001369 0.001369
CHILDREN'S INSTIL TUITION FUND 0.002717 0.002717 0.002717
LA CITY COMM COLLEGE DIST 0.029214 0.029214 0.029214
LA COMM COLL CHILDREN'S CTR FD 0.000302 0.000302 0.000302
PALOS VERDES PENINSULA USD 0.196986 0.196986 0.196986
CO.SCH.SERV.FD-LOS ANGELES 0.008085 0.008085 0.008085
DEV.CTR.HDCPD MINOR-LA UNIF. 0.000876 0.000876 0.000876
TOTAL 1.000000 1.000000 1.000000
Debt Service Rates
COUNTY 0.000000 0.000000 0.000000
PALOS VERDES PEN USD 0.023433 0.023197 0.023093
COMMNTY COLLEGE 0.035755 0.035956 0.045990
PALOS VERDES LIB 0.005630 0.000000 0.000000
FLOOD CONTROL 0.000000 0.000000 0.000000
METRO WATER DIST 0.003500 0.003500 0.003500
TOTAL 0.068318 0.062653 0.072583
TOTAL TAX RATE 1.068318 1.062653 1.072583
Source
2010-2015 County Assessor data, Avenu Insights & Analytics
2007-2009 data is provided from previously published CAFR's
City has no separate debt service rate, direct rate is I 00% operating.
TRA 149 is represented for this report.
123
2018-19 2019-20
0.063728 0.063728
0.441223 0.441223
0.000110 0.000110
0.169715 0.169715
0.006910 0.006910
0.002597 0.002597
0.014699 0.014699
0.043470 0.043470
0.000319 0.000319
0.017499 0.017499
0.000181 0.000181
0.000000 0.000000
0.000000 0.000000
0.001369 0.001369
0.002717 0.002717
0.029214 0.029214
0.000302 0.000302
0.196986 0.196986
0.008085 0.008085
0.000876 0.000876
1.000000 1.000000
0.000000 0.000000
0.023709 0.023589
0.046213 0.027175
0.000000 0.000000
0.000000 0.000000
0.003500 0.003500
0.073422 0.054264
1.073422 1.054264
A-159
City of Rancho Palos Verdes
Principal Property Tax Payers
Last Fiscal Year and Nine Years Ago
2019-20 2010-11
Percentage of Percentage of
Taxable Total City Taxable Taxable Total City Taxable
Taxpayer Value($) Rank Value(%) Value($) Rank Value(%)
Long Point Development Lie 473,436,375 I 3.51% 329,854,761 3.58%
Gs Palos Verdes Lie 112,578,123 2 0.84%
Roic California Lie 69,124,176 3 0.51%
P V Victoria Apartments Lie 54,179,298 4 0.40% 46,703,821 0.51%
6507 6510 Vista Catalina Apts 42,601,443 5 0.32%
Western Riviera Investors Et AI 33,507,168 6 0.25% 28,468,344 6 0.31%
Golden Cove Center Lie 31,404,002 7 0.23% 25,948,345 0.28%
Ocean View Drive Inc 28,066,682 8 0.21%
California Water Service Co 26,679,365 9 0.20% 8,116,888 16 0.09%
Belmont Village Rpv Lp 26,493,757 10 0.20% 22,232,551 10 0.24%
Johnson Eric C Co Tr 18,307,846 II 0.14% 18,233,759 12 0.20%
Wlp Westmont Plaza Lie 16,263,979 12 0.12%
Vh Property Corp 14,621,777 13 0.11% 45,259,624 4 0.49%
American Golf, Inc 13,530,578 14 0.10%
Vhps Lie 12,306,527 15 0.09% 21,036,463 II 0.23%
Chang Jacqueline 9,775,681 16 0.07%
Victoria Apartments 8,980,589 17 0.07% 7,763,471 17 0.08%
Thornecrest Lie 8,969,237 18 0.07%
Palos Verdes Terrace Ltd 8,798,777 19 0.07% 7,605,139 18 0.08%
Wei Lai Development Lie 8,628,320 20 0.06%
Xcx Bear Lie 8,387,488 21 0.06%
Bruning Fred W Co Tr 8,360,433 22 0.06%
AaHomes Lie 8,113,636 23 0.06%
Maleenont Voravat 8,090,130 24 0.06%
Wang Lisa 8,050,785 25 0.06%
Ppc Villas Rpv Lie 63,710,973 2 0.69%
Terraces Rancho Palos Verdes L 35,148,602 0.38%
Ppc Palos Verdes Lie 25,972,775 7 0.28%
Cox Com Inc. Orange 23,912,452 9 0.26%
Tridiamond Lie 13,311,514 13 0.14%
York Point View Properties Lie 9,577,246 14 0.10%
Kariger Brian P 8,330,210 15 0.09%
RuffinPhillipG 7,575,000 19 0.08%
Saitta Christopher L 6,557,865 20 0.07%
Amdan Investment Lie Lessee 6,550,000 21 0.07%
Gerts Igor Aona 6,458,000 22 0.07%
Labarba James G 6,087,262 23 0.07%
Imbach Scott A Diane Y 5,977,923 24 0.06%
Clow Leland E Ilene F 5,836,697 25 0.06%
Total Top 2 5 Taxpayers $ 1,059,256,172 7.86% $ 786,229,685 8.53%
Total Taxable Value $ 13,478,384,971 100.00% $ 9,219,000,927 100.00%
Source
Los Angeles County Assessor data, MuniServices, LLC I an Avenu Insights & Analytics Company
124
A-160
City of Rancho Palos Verdes
Property Tax Levies and Collections
Last Ten Fiscal Years
(amounts expressed in thousands)
Collected within the
Total Tax Fiscal Year of the Lev~ Total Collections to Date
Fiscal Levy for Percentage Collections in Percentage
Year Fiscal Year Amount of Levy Subseguent Years Amount of Levy
2011* 5,597 5,462 97.59% 0 5,462 97.59%
2012 5,777 5,656 97.91% 0 5,656 97.91%
2013 5,951 5,844 98.20% 0 5,844 98.20%
2014 6,287 6,193 98.50% 0 6,193 98.50%
2015 6,487 6,396 98.60% 0 6,396 98.60%
2016 6,813 6,716 98.58% 0 6,716 98.58%
2017 7,093 7,009 98.82% 0 7,009 98.82%
2018 7,481 7,389 98.77% 0 7,389 98.77%
2019 7,888 7,782 98.66% 0 7,782 98.66%
2020 8,290 8,017 96.71% 0 8,017 96.71%
Source
County Assessor General Ledger, MuniServices, LLC I Avenu Insights & Analytics
* Includes 1% secured apportionment only
125
A-161
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126
A-162
City of Rancho Palos Verdes
Direct and Overlapping Governmental Activities Debt
Current Year
CITY OF RANCHO PALOS VERDES
2018-19 Assessed Valuation: $13,547,204,627
DIRECT AND OVERLAPPING TAX AND ASSESSMENT DEBT:
Metropolitan Water District
Los Angeles Community College District
Los Angeles Unified School District
Palos Verdes Unified School District
City of Rancho Palos Verdes
TOTAL DIRECT AND OVERLAPPING TAX AND ASSESSMENT DEBT
Less: Los Angeles Unified School District General Obligation Bonds,
Election of2005, Series J (2010) Qualified School Construction Bonds:
Amount accumulated in Interest and Sinking Fund and Set Asides for Repayment
TOTAL NET OVERLAPPING TAN AND ASSESSMENT DEBT
OVERLAPPING GENERAL FUND DEBT:
Los Angeles County General Fund Obligations
Los Angeles County Superintendent of Schools Certificates of Participation
Los Angeles County Sanitation District No. 5 Authority
Los Angeles County South Bay Cities Sanitation District Authority
Los Angeles Unified School District Certificates of Participation
TOTAL GROSS OVERLAPPING GENERAL FUND DEBT
Less: Los Angeles Unified School District QZABs supported by investment fund
TOTAL NET OVERLAPPING GENERAL FUND DEBT
TOTAL DIRECT DEBT
TOTAL GROSS OVERLAPPING DEBT
TOTAL NET OVERLAPPING DEBT
GROSS COMBINED TOTAL DEBT
NET COMBINED TOTAL DEBT
Total Debt
6/30/2020
$37,300,000
4,234,460,000
10,624,010,000
54,613,827
0
$2,317,550,679
5,182,434
9,233,499
1,573,880
164,430,000
% Applicable (1)
0.438%
1.495%
0.177%
47.105%
100%
0.840%
0.840%
10.101%
4.068%
0.177%
City's Share of
Debt 6/30/20
$163,374
63,305,177
18,804,498
25,725,843
0
$107,998,892
48,374
$107,950,518
$19,467,426
43,532
932,676
64,025
291,041
$20,798,700
17,033
$20,781,667
$0
$128,797,592
$128,732,185
$128,797,592
$128,732,185
(I) The percentage of overlapping debt applicable to the city is estimated using taxable assessed property value. Applicable percentages were estimated by
determining the portion of the overlapping district's assessed value that is within the boundaries of the city divided by the district's total taxable assessed value.
(2) Excludes tax and revenue anticipation notes, revenue, mortgage revenue and non-bonded capital lease obligations.
Ratios to 2019-20 Assessed Valuation:
Direct Debt
Total Gross Direct and Overlapping Tax and Assessment Debt
Total Net Direct and Overlapping Tax and Assessment Debt
Gross Combined Total Debt
Net Combined Total Debt
Source
2019-20 Avenu Insights & Analytics
127
0.00%
0.80%
0.80%
0.95%
0.95%
(2)
A-163
Debt Limit
Total Net Debt applicable to limit
Legal Debt Margin
Total Net Debt applicable to the limit as
a percentage of Debt Limit
$
$
2011
City of Rancho Palos Verdes
Legal Debt Margin Information
Last Ten Fiscal Years
(Amounts expressed in thousands)
Fiscal Year
2012 2013
1,382,850 $ 1,420,256 $ 1,382,850
1,382,850 $ 1,420,256 $ 1,382,850
0% 0% 0%
128
2014 2015
$ 1,533,583 $ 1,583,404
$ 1,533,583 $ 1,583,404
0% 0%
A-164
Debt Limit
Total Net Debt applicable to limit
Legal Debt Margin
Total Net Debt applicable to the limit as
a percentage of Debt Limit
$
$
2016
City of Rancho Palos Verdes
Legal Debt Margin Information
Last Ten Fiscal Years
(Amounts expressed in thousands)
Fiscal Year
2017 2018
1,677,723 $ 1,749,390 $ 1,832,345
1,677,723 $ 1,749,390 $ 1,832,345
0% 0% 0%
2019
$ 1,935,260
$ 1,935,260
0%
Total Taxable Value
Debt Limit (15% of total taxable value)
Debt applicable to limit
Legal Debt Margin
Cities have a maximum G.O. debt limit of 15% of the assessed valuation of all property within their boundaries.
129
2020
$ 2,021,758
$ 2,021,758
0%
$ 13,478,385
2,021,758
$ 2,021,758
A-165
Fiscal
Year Poeulation (1)
2010-11 41,766
2011-12 41,897
2012-13 42,114
2013-14 42,358
2014-15 42,564
2015-16 43,041
2016-17 42,884
2017-18 42,723
2018-19 42,560
2019-20 41,731
Source
MuniServices, LLC I Avenu Insights & Ana1ytics
City of Rancho Palos Verdes
Demographic and Economic Statistics
Last Ten Fiscal Years
Per Capita
Personal Personal
Income (2l Income {2)
2,425,936,344 58,084
2,561,016,971 61,127
2,618,143,152 62,168
2,564,205,491 60,537
2,593,892,724 60,941
2,461,988,241 57,201
2,569,293,654 59,913
2, 722,513,349 63,725
2,860,710,832 67,216
2,917,361,629 69,909
Median
Age
44.3
47.6
47.8
47.6
48.9
49.6
49.5
49.3
49.4
49.7
The California Department of Finance demographics estimates now incorporate 2010 Census counts as the benchmark.
(1) Population Projections are provided by the California Department of Finance Projections.
(2) Income Data is provided by the U.S. Census Bureau, 2010 American Community Survey.
**Public
School
Enrollment
11,928
11,840
11,873
11,700
11,632
11,499
11,428
11,346
11,217
11,009
**Student Enrollment reflects the total number of students enrolled in the Palos Verdes Unified School District. Other school districts within the
City are not included.
130
A-166
Fiscal
Year
2010-11
2011-12
2012-13
2013-14
2014-15
2015-16
2016-17
2017-18
2018-19
2019-20
Source
Avenu Insights & Analytics
City of Rancho Palos Verdes
Demographic and Economic Statistics
Last Ten Fiscal Years
County City
Unemployment Unemployment
Rate(%) (3) Rate(%) (3)
11.9% 4.1%
11.1% 3.8%
11.0% 3.7%
7.6% 2.5%
7.1% 3.4%
6.7% 3.2%
5.2% 2.5%
4.1% 3.4%
3.9% 3.3%
20.6% 13.2%
County
Poj!ulation (1}
9,858,989
9,884,632
9,958,091
10,041,797
10,136,559
10,241,335
10,241,278
10,283,729
10,253,716
10,172,951
The California Department of Finance demographics estimates now incorporate 2010 Census counts as the benchmark.
(1) Population Projections are provided by the California Department of Finance Projections.
(3) Unemployment Data is provided by the EDD's Bureau of Labor Statistics Department.
131
City
Population
(% of County)
0.42%
0.42%
0.42%
0.42%
0.42%
0.42%
0.42%
0.42%
0.42%
0.41%
A-167
Taxpayer
7-Eleven Food Stores
Amsler Testing
Audio Visual Services Group
Avenue Italy
2019-20
Blue Crab Steak & Seafood Restaurant
California Chemical
Centinela Feed & Pet Supplies
El Polio Loco
G & M Service Stations
Granvia Tomatillo Service Center
Green Hills Memorial Park
Highridge Car Wash
Los Verdes Country Club
Marshall's Stores
O'Reilly Auto Parts
PGA Tournament Corporation
Ralph's Grocery Company
Smart & Final
Southern California Discount Tire
Terranea Resort
The Admiral Risty
Trader Joe's
Trump National Golf Club
Western Tobacco
Whose Investment
Source
MuniServices, LLC I Avenu Insights & Analytics
City of Rancho Palos Verdes
Principal Sales Tax Producers
Last Fiscal Year and Nine Years Ago
Business Type
Food Markets
Office Equipment
Office Equipment
Restaurants
Restaurants
Chemical Products
Florist/Nursery
Restaurants
Service Stations
Service Stations
Miscellaneous Other
Service Stations
Miscellaneous Retail
Apparel Stores
Auto Parts/Repair
Restaurants
Food Markets
Food Markets
Auto Parts/Repair
Restaurants
Restaurants
Food Markets
Miscellaneous Retail
Miscellaneous Retail
Restaurants
132
Taxpayer
7-Eleven Food Stores
Admiral Risty Restaurant
America's Tire
Asaka Japanese Cuisine
Audio Visual Services Group
Carl's Jr. Restaurants
Centinela Feed & Pet Supplies
Chevron Service Stations
Coco's Restaurants
Daniel J Jeldum
Denny's Restaurant
El Polio Loco
Good Night Mattress
Green Hills Memorial Park
Hughes Markets
!HOP Restaurants
Kragen Auto Parts
Los Verdes Country Club
Marshall's Stores
Mobil Service Stations
Rolling Hills Plastics
Smart & Final
Terranea Resort
Trader Joe's
VH Property
2010-11
Business Type
Food Markets
Restaurants
Auto Parts/Repair
Restaurants
Office Equipment
Restaurants
Miscellaneous Retail
Service Stations
Restaurants
Miscellaneous Retail
Restaurants
Restaurants
Furniture/Appliance
Miscellaneous Other
Food Markets
Restaurants
Auto Parts/Repair
Restaurants
Apparel Stores
Service Stations
Light Industry
Food Markets
Restaurants
Food Markets
Miscellaneous Retail
A-168
City of Rancho Palos Verdes
Principal Employers
Current Year and Three Years Ago
Employer
Palos Verdes Peninsula Unified School District
Terranea Resort Hotel*
Belmont Corp Ltd (Belmont Village of Rancho)
Canterbury
Marymount College
Trump National Golf Club*
City of Rancho Palos Verdes*
Ralphs Store #720
Green Hills Memorial Park
American Golf Corp (Los Verdes Golf Course)
Subtotal of Principal Employers
Total City Employment (I)
Source
Emelo;!:ees
1,071
534
168
169
139
138
122
117
72
56
2,586
16,700
MuniServices, LLC I an Avenu Insights & Analytics Company
Results based on direct correspondence with city's local businesses.
(I) Total City Labor Force is provided by EDD Labor Force Data
*Count includes both full and part time employees
Trader Joe's Store's (#57 & #233) choose to no longer participate
2019-20
Percentage
of Total City
Rank Emelo~ment
I 6.41%
2 3.20%
3 1.01%
4 1.01%
5 0.83%
6 0.83%
7 0.73%
8 0.70%
9 0.43%
10 034%
15.49%
133
2016-17
Percentage
of Total City
Emelo;!:ees Rank Emelo~ment
1,444 I 748%
1,226 2 635%
165 5 0.85%
141 6 0.73%
203 3 1.05%
186 4 0.96%
116 7 0.60%
104 8 0.54%
71 10 0.37%
72 9 0.37%
3,728 19.32%
19,300
A-169
(THIS PAGE INTENTIONALLY LEFT BLANK)
134
A-170
2011
Function
General Government 54
Part-Time Staff (I) 18
Total 72
Source
City of Rancho Palos Verdes
Full-time Equivalent City Government Employees by Function
Last Ten Fiscal Years
2012 2013 2014 2015 2016 2017
52 53 54 60 62 62
16.5 16 22 25 29 29
68.5 69 76 85 91 91
City Budget documents and Payroll records
(!)Full-Time Equivalent
135
2018 2019 2020
64 60 61
30 29 26
94 89 87
A-171
Function
Administration
Employee Resignations
Workers Compensation Claims
Liability Claims
Budget Adjustments
Business Licenses Issued
Web Site Page Views (I)
Public Safety
Part I Crime Rates (per 10,000 population)
Public Works
City of Rancho Palos Verdes
Operating Indicators by Function
Last Ten Fiscal Years
2011
14
17
1,891
2.8mil
I43
2012
8
3
II
II
1,294
3.0mil
131
2013
7
3
14
24
1,868
3.lmil
149
Solid Waste Diversion Rates (2)
Pavement Rating
4.2\bs/person/day 4. 2lbs/person/ day 2.87\bs/person/day
Parks and Recreation
Park Events
Class Meetings at Parks
Docent Led Nature Hikes
Community Development
Building Permits Processed
Plan Checks
Municipal Code Violations Closed
Source
City Departments
DNA: Data Not Available
85 85
580 582
2,313 1,587
105 104
1,432 1,221
161 161
371 321
(I): The City launched a new website and with it, the methodology used to count total page views was modified.
84
765
1,202
121
1,403
268
312
(2): A new system of measuring AB939 compliance was implemented in 2008 with the passage of SB\016. This changed the
previous diversion calculation method to the new disposal-based indicator-the per capita disposal rate. The per capita disposal
target is based on the average of 50 percent of generation in 2003 through 2006, expressed in terms of per capital disposal.
136
2014 2015
14 10
9 II
15 15
1,997 2,134
3.3mil 426,772 *
107 134
2.84\bs/person/day 3.15lbs/person/day
82 82
631 639
1,233 1,400
109 103
1,492 1,558
264 255
392 358
A-172
Function
Administration
Employee Resignations
Workers Compensation Claims
Liability Claims
Budget Adjustments
Business Licenses Issued
Web Site Page Views (I)
Public Safety
Part I Crime Rates (per I 0,000 population)
Public Works
Solid Waste Diversion Rates (2) (4)
Pavement Rating
Parks and Recreation
Park Events
Class Meetings at Parks
Docent Led Nature Hikes
Volunteer Events (3)
Volunteers (3)
Volunteer Hours (3)
Open Space Mgmt. Public Contacts (3)
Open Space Mgmt. Rules Enforced (3)
Open Space Mgmt. Maintenance I Projects (3)
Community Development
Building Permits Processed
Plan Checks
Municipal Code Violations Closed
Source
City Departments
DNA: Data Not Available
City of Rancho Palos Verdes
Operating Indicators by Function
Last Ten Fiscal Years
2016 2017
6 6
2 8
28 6
18 48
2,012 1,939
403,704 536,568
106 Not available at this time
2018
27
2
80
1,902
445,633
113
3 .08lbs/person/day 2.46lbs/person/day 2.46lbs/personlday
84 84 84
810 829 1,281
1,025 1,030 922
94 108 113
35 61
764 1,806
2,486 5,919
23,1 OJ 33,306
1,367 1,925
782 1,219
1,758 1,665 1,985
289 289 292
505 432 457
(I): The City launched a new website and with it, the methodology used to count total page views was modified.
(2): A new system of measuring AB939 compliance was implemented in 2008 with the passage of SB I 016. This changed the
previous diversion calculation method to the new disposal-based indicator-the per capita disposal rate. The per capita disposal
target is based on the average of 50 percent of generation in 2003 through 2006, expressed in terms of per capital disposal.
(3) Began tracking this indicator in 2017.
137
2019 2020
23 30
I
98
1,971 1,776
450,206 657,040
99 109
5.6lbs/personlday 5. 7lbs/personlday
89 89
1,122 807
852 520
104 37
46 37
1,095 974
3,569 2,724
29,973 29,786
1,262 1,876
546
2,186 1,933
288 256
338 275
A-173
2011 2012
Function
Administration
Computer Workstations 92 88
Public Works
Street Miles 143 144
Traffic Signals 16 18
Parks and Recreation
Parks 15 15
Community Development
Vehicles Used for
Inspections 5 5
Source
City Capital Asset Records
Public safety services are contracted with other agencies.
City of Rancho Palos Verdes
Capital Asset Statistics by Function
Last Ten Fiscal Years
2013 2014 2015
93 98 114
141 141 149
15 15 15
15 16 16
5 4 4
2016
138
149
15
16
4
The City does not own any public safety capital assets.
138
2017 2018 2019 2020
140 144 144 !55
149 149 150.1 150.1
15 15 15 15
16 17 17 17
2 2 4 4
B-1
To the Honorable Mayor
and Members of City Council
of the City of Rancho Palos Verdes
Rancho Palos Verdes, California
Clift on l arso nAII en LL P
CLAco nn ect.com
We have audited the financial statements of the governmental activities, each major fund, and the
aggregate remaining fund information of the City of Rancho Palos Verdes, California (the City), as of
and for the year ended June 30, 2020. Professional standards require that we provide you with
information about our responsibilities under generally accepted auditing standards and Government
Auditing Standards, as well as certain information related to the planned scope and timing of our audit.
We have communicated such information to you in our engagement letter dated May 4, 2020, and our
letter on planning matters dated May 15, 2020. Professional standards also require that we
communicate to you the following information related to our audit.
Significant Audit Findings
Qualitative Aspects of Accounting Practices
Management is responsible for the selection and use of appropriate accounting policies. The significant
accounting policies used by the City are described in Note 1 to the financial statements. No new
accounting policies were adopted and the application of other existing policies was not changed during
the year ended June 30, 2020. We noted no transactions entered into by the City during the year for
which there is a lack of authoritative guidance or consensus. All significant transactions have been
recognized in the financial statements in the proper period.
Accounting estimates are an integral part of the financial statements prepared by management and are
based on management's knowledge and experience about past and current events and assumptions
about future events. Certain accounting estimates are particularly sensitive because of their
significance to the financial statements and because of the possibility that future events affecting them
may differ significantly from those expected. The most sensitive estimate affecting the financial
statements was:
The annual required contributions, pension expense , net pension liability, and corresponding
deferred outflows of resources and deferred inflows of resources for the City's public defined
benefit plans with CalPERS are based on actuarial valuations provided by CalPERS.
We evaluated the key factors and assumptions used to develop these estimates in determining that they
were reasonable in relation to the financial statements taken as a whole.
~Ne;i~ ~ International 1
B-2
Significant Audit Findings (Continued)
Qualitative Aspects of Accounting Practices (Continued)
Certain financial statement disclosures are particularly sensitive because of their significance to
financial statement users. The most sensitive disclosure affecting the financial statements was reported
in Note 8 regarding the City's defined benefit pension plans.
The financial statement disclosures are neutral, consistent, and clear.
Difficulties Encountered in Performing the Audit
We encountered no significant difficulties in dealing with management in performing and completing
our audit.
Corrected and Uncorrected Misstatements
Professional standards require us to accumulate all known and likely misstatements identified during
the audit, other than those that are trivial, and communicate them to the appropriate level of
management. The attached schedule summarizes uncorrected misstatements of the financial
statements. Management has determined that their effects are immaterial, both individually and in the
aggregate, to the financial statements taken as a whole. In addition, none of the misstatements detected
as a result of audit procedures and corrected by management were material, either individually or in
the aggregate, to each opinion unit's financial statements taken as a whole.
Disagreements with Management
For purposes of this letter, a disagreement with management is a financial accounting, reporting, or
auditing matter, whether or not resolved to our satisfaction, that could be significant to the financial
statements or the auditor's report. We are pleased to report that no such disagreements arose during the
course of our audit.
Management Representations
We have requested certain representations from management that are included in the management
representation letter dated January 15, 2021.
Management Consultations with Other Independent Accountants
In some cases, management may decide to consult with other accountants about auditing and
accounting matters, similar to obtaining a "second opinion" on certain situations. If a consultation
involves application of an accounting principle to the City's financial statements or a determination of
the type of auditor's opinion that may be expressed on those statements, our professional standards
require the consulting accountant to check with us to determine that the consultant has all the relevant
facts. To our knowledge, there were no such consultations with other accountants.
2
B-3
Significant Audit Findings (Continued)
Other Audit Findings or Issues
We generally discuss a variety of matters, including the application of accounting principles and
auditing standards, with management each year prior to retention as the City's auditors. However,
these discussions occurred in the normal course of our professional relationship and our responses
were not a condition to our retention.
Other Matters
We applied certain limited procedures to management's discussion and analysis, the schedule of
proportionate share of the net pension liability, and the schedule of pension contributions, identified as
Required Supplementary Information (RSI) that supplements the basic financial statements. Our
procedures consisted of inquiries of management regarding the methods of preparing the information
and comparing the information for consistency with management's responses to our inquiries, the basic
financial statements, and other knowledge we obtained during our audit of the basic financial
statements. We did not audit the RSI and do not express an opinion or provide any assurance on the
RSI.
We were engaged to report on the combining statements and individual fund schedules (supplementary
information), which accompany the financial statements but are not RSI. With respect to this
supplementary information, we made certain inquiries of management and evaluated the form, content,
and methods of preparing the information to determine that the information complies with accounting
principles generally accepted in the United States of America, the method of preparing it has not
changed from the prior period, and the information is appropriate and complete in relation to our audit
of the financial statements. We compared and reconciled the supplementary information to the
underlying accounting records used to prepare the basic financial statements or to the basic financial
statements themselves.
We were not engaged to report on the introductory section and statistical section which accompany the
financial statements but are not RSI. 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 it.
Restriction on Use
This information is intended solely for the use of management, the City Council, and others within the
City and is not intended to be and should not be used by anyone other than these specified parties.
CliftonLarsonAllen LLP
Irvine, California
January 15, 2021
3
B-4
.Client:
Engagement:
Period En d in g :
Tri a l Balance :
Workpape r:
237-70346800 ·Rancho Palos Verdes City
2020 • Rancho Palos Verdes City
6130/2020
2999.01-Trial Balance Database
3230.01 ·Proposed Journal Entries Report
Account Description W/P Ref Debit Credit
Proposed Journal Entries
Proposed Journal Entnes JE # 301
Kn own· Fair value adjustments to investments in LAIF and US T-notes
101-100-0000-0103 LAI F CASH
101 -100-0000-0105 VINING SPARKS INVESTMENTS
101-281-0000-1000 FUND BALANCE UNRESERVED
WNDE-101-0000-0001 UNREALIZED GAIN/LOSS ON INVESTMENT
Total
Proposed Journal Entries JE # 302
To adjust gas tax reve nues to an accrual basis
202-110-0000-0114 ACCO UNTS RECE IVAB LE MISC
202-240-0000-0702 RESTR ICTED · PUB LI C WORKS
202-300-0000-3304 STATE GRANTS · SECTION 2103
Total
Total Proposed Journal Entries
Total All Journal Entries
4100.02
183 ,41 5.00
47,501 .00
33 ,573 .00
197,343.00
23 0,916.00 230 ,916 .00
7200.05
83,586 .00
68,466.00
15 ,120.00
83,586.00 83,586 .0 0
314,502.00 314,502.00
314,502 .00 314 ,502.00
C-1
Cli fto nlarso nAII en LL P
CLAco nnect.co m
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
of the City of Rancho Palos Verdes
Rancho Palos Verdes , California
We have audited, in accordance with the auditing standards generally accepted in the United States of
America and the standards applicable to the financial audits contained in Government Audit Standards ,
issued by the Comptroller General of the United States , the financial statements of the governmental
activities , each major fund, and the aggregate remaining fund information of the City of Rancho Palos
Verdes (the City) as of and for the year ended June 30, 2020, and the related notes to the financial
statements, which collectively comprise the City's basic financial statements, and have issued our
report thereon dated January 15, 2021.
Internal Control over Financial Reporting
In planning and performing our audit of the financial statements, we considered the City's internal
control over financial reporting (internal control) to determine the audit procedures that are appropriate
in the circumstances 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. Accordingly,
we do not express an opinion on the effectiveness ofthe City's internal control.
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 ofthe entity's financial statements will not be prevented, or detected and corrected, on a
timely basis. A significant deficiency is a deficiency , or a combination of deficiencies , in internal
control that is less severe than a material weakness , yet important enough to merit attention by those
charged with governance.
Our consideration of internal control was for the limited purpose described in the first paragraph and
was not designed to identify all deficiencies in internal control that might be material weaknesses or
significant deficiencies. Given these limitations, during our audit we did not identify any deficiencies
in internal control that we consider to be material weaknesses. However, material weaknesses may
exist that have not been identified.
~Ne;i~ ~ International 1
C-2
Compliance and Other Matters
As part of obtaining reasonable assurance about whether the City's financial statements are free from
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 or other matters that
are required to be reported under Government Auditing Standards.
Purpose of This Report
The purpose of this report is solely to describe the scope of our testing of internal control and
compliance and the results of that testing, and not to provide an opinion on the effectiveness of the
City's internal control or on compliance. This report is an integral part of an audit performed in
accordance with Government Auditing Standards in considering the entity's internal control and
compliance. Accordingly, this communication is not suitable for any other purpose.
CliftonLarsonAllen LLP
Irvine, California
January 15, 2021
2