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01-15-2008 - Comprehensive Annual Financial Report for Year Ended 06/30/07City of West Covina MEMORANDUM TO: Andrew G. Pasmant, City Manager, and City Council FROM: Tom Bachman, Director Finance Department AGENDA Item: D7d Date: January 15, 2008 SUBJECT: COMPREHENSIVE ANNUAL FINANCIAL REPORT FOR THE YEAR ENDED JUNE 30, 2007 RECOMMENDATION: It is recommended that the City Council receive and file the City's Comprehensive Annual Financial Report for the fiscal year ended June 30, 2007. DISCUSSION: Each year, independent auditors perform an examination of the financial records of the City and prepare an audit report on the City's financial statements. The Independent Auditor's Report issued by Mayer Hoffman McCann, P.C., the certified public accounting firm retained by the City, is included in the City's June 30, 2007 Comprehensive Annual Financial Report (CAFR). The CAFR includes Management's Discussion and Analysis in the Financial Section, which provides a simple narrative introduction, overview.and analysis of the basic financial statements. The first two statements in the Financial Section, the Statement of Net Assets and the Statement of Activities, provide information about the activities of the City as a whole. These statements include all assets and liabilities using the accrual basis of accounting, which is similar to the accounting used by most private sector companies. All current year's revenues and expenses are taken into account regardless of when cash is received or paid. Capital assets, including infrastructure and long-term liabilities, are included on a city wide Statement of Net Assets. Overall, the City's net assets increased from $242.0 million by $7.7 million to $249.7 million. The major item contributing to this increase in net assets was an increase in capital assets that more than offset the increase in capital debt and, which was due to the construction of the West Covina Sports Park Project. The Balance Sheet and Statement of Revenues, Expenditures and Changes in Fund Balance for the Governmental Funds (including the General Fund) are found on pages 18 and 23, and present information in a manner more consistent with how the City prepares its budget. For the General Fund, expenditures exceeded revenues by $4.8 million. This deficit was the result of $4.9 million in transfers to the Capital Projects Fund to, fund both the West Covina Sports Park Project and improvements at Shadow Oak Park. An income statement for the General Fund comparing budget to actual can be found on page 25 of the report. The unreserved fund balance of the General Fund was $19.3 million, while the total fund balance was $44.1 million. Following the basic financial statements is the Notes section beginning on page 31. The Notes provide a description of the accounting policies used by the City and further information regarding the basic financial statements. The Supplementary Schedules Section of the report includes individual fund statements for the special revenue, debt service, capital projects, proprietary and agency funds. The Statistical Section contains financial and demographic data pertaining to the City. This report also incorporates the activities of the City, the Community Development Commission of the City of West Covina and the West Covina Public Financing Authority. A copy of the Comprehensive Annual Report is included in the agenda packet. FISCAL IMPACT: No Prepared by: 'T6m*f3achman - Finance Director Attachment: Comprehensive Annual Financial Report 063007 Z:\Agenda 1[erns\CAFR\CAFR - 063007 01-15-08.doc } .vF pia i 4 ik Y. l Y IF t" KI f l Comprehensive Annual Financial Report ►� City of West Covina, California Fiscal Year Ended June 30, 2007 s V hwi k ky 1 1 1 1 1 1 1 1 1 City of West Covina, California Comprehensive Annual . Financial Report Fiscal Year Ended June 30, 2007 PREPARED BY: City of West Covina Finance Department Thomas Bachman Director. of Finance 1 CITY OF WEST COVINA Comprehensive Annual Financial Report Year ended June 30, 2007 TABLE OF CONTENTS INTRODUCTORY SECTION: Page Letterof Transmittal--------------------------------------------------------------------------------- v CityOfficials----------------------------------------------------------------------------------------- xi Organizational Chart ------------------------------------------------------------------------------- xii Certificate of Achievement for Excellence in Financial Reporting ii FINANCIAL SECTION: Independent Auditors' Report ---------------------------------------------------------------------- 1 Management's Discussion and Analysis (Required Supplementary Information) ---------- 3 Basic Financial Statements: Government -wide Financial Statements: Statement of Net Assets ----------------------------------------------------------------------- 15 Statement of Activities----------------------------------------------------- -------------------- 16 Fund Financial Statements: 1 Governmental Funds: BalanceSheet ----------------------------------------------------- --------------------------- 1 8 Reconciliation of the Balance Sheet of Governmental Funds to the Statement of Net Assets------- ----------------------------------------------------- 21 Statement of Revenues, Expenditures and Changes in FundBalances-----------------------------------------------------------------------------22 Reconciliation of the Statement of Revenues, Expenditures and Changes in Fund Balances of Governmental Funds to the Statement of Activities --------- 24 Statement of Revenues, Expenditures, and Changes in Fund Balances — Budget and Actual General Fund-------------------------------------------------------25 ' Proprietary Funds: Statement of Net Assets--------------------------------------------------------------------26 Statement of Revenues, Expenses and Changes in ' Fund Net Assets ------------------------------------------------------------------------ --- 27 Statement of Cash Flows-------------------------------------------------------------------28 1 I] CITY OF WEST COVINA Comprehensive Annual Financial Report Year ended June 30, 2007 TABLE OF CONTENTS (CONTINUED) Page Fiduciary Funds: Statement of Fiduciary Assets and Liabilities-------------------------=-----------------30 Notes to the Basic Financial Statements------------------------------------------------------31 SUPPLEMENTARY INFORMATION: Supplementary Schedules: Non -Major Governmental Funds: Combining Balance Sheet-------------------------------------------------------------------72 Combining Statement of Revenues, Expenditures and Changes in Fund Balances-----------------------------------------------------------------------------73 Non -Major Special Revenue Funds: Combining Balance Sheet-------------------------------------------------------------------76 Combining Statement of Revenues, Expenditures and Changes in Fund Balances ------------------------------------------------------------- 80 Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual: Recreation Programs Fund --------------------------------------------------------------- 84 Drug Enforcement Rebate Fund ------------------------------------------------------ ---85 Business Improvement Tax Fund-------------------------------------------------------86 Air Quality Improvement Fund ----------------------------- =--------------------------- 87 PropositionA Fund ---------------------------- ---------------------------------- ------ --- 88 PropositionC Fund ------------------------------ ----- ------------------------------------ 89 TrafficSafety Fund --------- ---------------------------------------------------------------90 State Gas Tax Fund ---------- ----------------------------------------- --_-----_-------91 Traffic Congestion Relief Fund--------------------------------------------------------- 92 Police Special Programs Fund--------------------------------------------------------93 Transportation Development Act Fund -- ---------------------------------------- ------ 94 Waste Management Fund --------- ------------ ----------------------------------------95 GrantsFund ------------------------------------- ----- -------- ----- ----- Community Development Block Grant Fund-----------------------------------------97 i1 Ll 1 1 1 11 1 i u ' CITY OF WEST COVINA Comprehensive Annual Financial Report ' Year ended June 30, 2007 tTABLE OF CONTENTS (CONTINUED) Page TreeFund ------------------------------- ----------------------------------- -----------------98 Inmate Welfare Fund---------------------------------------------------------------------99 BKK Community Fund --------------------- -------------------------------------------- 100 ' Public Safety Fund---------------------------------------------------------------------- 101 COPSGrant Fund----------------------------------------------------------------------- 102 Special Assessments Fund------------------------------------------------------------- 103 ' Charter Cable Fund---------------------------------------------------------------------104 Arts in Public Places Fund-------------------------------------------------------------105 North Azusa Relinquishment Fund --------------------------------------------------- 106 Fire Training Fund---------------------------------------------------------------------- 107 WC Community Services Foundation Fund----------------------------------------- 108 Major Debt Service Funds: Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual: City Debt Service Fund----------------------------------------------------------------- 110 Community Development Commission Debt Service Fund----------------------111 Major and Non -Major Capital Projects Funds: Combining Balance Sheet-----------------------------------------------------------------114 Combining Statement of Revenues, Expenditures 1 and Changes in Fund Balances----------------------------------------------------------- 115 Schedule of Revenues, Expenditures and ' Changes in Fund Balances - Budget and Actual: City Capital Projects Fund------------------------------------------------------------- 116 Community Development Commission Capital Projects Fund------------------- 117 Construction Tax Fund----------------------------------------------------------------- 118 Park Development Fund ----------------------------------- =---------------------------- 119 Internal Service Funds: Combining Statement of Net Assets-----------------------------------------------------122 Combining Statement of Revenues, Expenses and Changes in Net Assets--------123 Combining Statement of Cash Flows----------------------------------------------------124 Agency Fund: Statement of Changes, in Assets and Liabilities ---------------------------------------- 128 iii CITY OF WEST COVINA Comprehensive Annual Financial Report Year ended June 30, 2007 TABLE OF CONTENTS, (CONTINUED) Table Pace STATISTICAL SECTION: Net Assets by Component------------------------------------------------------- 1-------------131 Changes in Net Assets------------------------------------------------------------ 2-------------132 Changes in Net Assets — Governmental Activities --------------------------- 3-------------134 Changes in Net Assets — Business -type Activities---------------------------- 4-------------135 Fund Balances of Governmental Funds ---------------------------------------- 5-------------136 Changes in Fund Balances of Governmental Funds -------------------------- 6------------- 137 Assessed Value and Estimated Actual Value of Taxable Property--------- 7------------- 138 Direct and Overlapping Property Tax Rates ----------------------------------- 8------------- 140 Principal Property Tax Payers --------------------------------------- =----------- 9 -- -- -- -143 Property Tax Levies and Collections ------------------------------------------- 10----- -- - 144 Ratios of Outstanding Debt by Type-------------------------------------------- 11------------ 146 Ratio of General Bonded Debt Outstanding ----------------------------------- 12------- --148 Direct and Overlapping Debt -------------------=-------------------------------- 13------------149 Legal Debt Margin Information ------------------------------------------------- 14--------- 151 Pledged -Revenue Coverage------------------------------------------------------ 15 --------- 152 Demographic and Economic Statistics ----------------------------------------- 16-------- - 154 Principal Employees-------------------------------------------------------------- 17----------- 155 Full-time and Part-time City Employees by Function--- -------- --------- 18- --- ---- 157 Operating Indicators by Function ----------------------------------------------- 19------------ 158 Capital Asset Statistics by Function -------------------------------------------- 20------------ 160 Fiv G December 14, 2007 To the Members of the City Council, the City Manager, and the Citizens of the City of West Covina: It is the policy of the City of West Covina to annually publish a complete set of financial statements presented in conformity with generally accepted accounting principles (GAAP) and audited in accordance with generally accepted auditing standards by a firm of certified public accountants. Pursuant to that policy, we hereby issue the comprehensive annual financial statements of the City of West Covina ("the City") for the fiscal year ended June 30, 2007. This report consists of management's representations concerning the finances of the City. Management assumes full responsibility for the completeness and reliability of all the information presented in this report. To provide a reasonable basis for making these representations, management of the City has established a comprehensive internal control framework that is designed both to protect the City's assets from loss, theft, or misuse and to compile sufficient reliable information for the preparation of the City's financial statements in conformity with GAAP. Because the cost of internal controls should not outweigh their benefits, the City's comprehensive framework of internal controls has been designed to provide reasonable rather than absolute assurance that the financial statements will be free from material misstatement. As management, we assert that, to the best of our knowledge and belief, this financial report is complete and reliable in all material respects. The City's financial statements have been audited by Mayer Hoffman McCann P.C., a firm of ' certified public accountants. The goal of the independent audit was to provide reasonable assurance that the financial statements of the City for the fiscal year ended June 30, 2007, are free of material misstatement. The independent audit involved examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements; assessing the accounting principles used and significant estimates made by management; and evaluating the overall financial statement presentation. The independent auditor concluded, based upon the audit, that there was a reasonable basis for rendering an unqualified opinion that the City's financial statements for the fiscal year ended June 30, 2007, are fairly presented in conformity with GAAP. The independent auditors' report is presented as the first component of the financial section of this report. The independent audit of the financial statements of the City was part of a broader, federally mandated "Single Audit" designed to meet the special needs of federal grantor agencies. The standards governing Single Audit engagements require the independent auditor fo report not only ' on the fair presentation of the financial statements, but also on the audited City's internal controls and legal requirements involving the administration of federal awards. These reports are available in the City's separately issued Single Audit Report. ' GAAP requires that management provide a narrative introduction, overview, and analysis to accompany the basic financial statements in the form of Management's Discussion and Analysis (MD&A). This letter of transmittal is designed to complement the MD&A and should be read in v I�— I�i conjunction with it. The City's MD&A can be found immediately following the report of the independent auditors. Profile of the Government The City of West Covina is located in the San Gabriel Valley, 20 miles east of downtown Los Angeles and 15 miles north of Orange County. Incorporated in 1923, the City covers 17 square miles and has a population of approximately I10,000. The City's location and access to major freeways makes West Covina close to many visitor attractions and an ideal business and commercial center. The City has over 32,000 housing units and offers the amenities of a big city location with a high standard of living for its community. West Covina is a general law city and operates under the council-manager form of government. Policy -making and legislative authority are vested in the City Council, consisting of five council members elected at -large to overlapping four-year terms. The City Council selects a Mayor from one of its members each March to serve a one-year term. The City Council is responsible for, among other things, passing ordinances, adopting the budget, appointing committees, and hiring both the City Manager and 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 various departments. The City provides a full range of services to its citizens; including police, fire and emergency medical; construction and maintenance of streets, traffic signalization and other infrastructure; planning and building safety; and social, recreational and cultural activities and events. The City offers fifteen parks, four community centers and a county operated library. The City is financially accountable for a redevelopment agency and financing authority, both of which financial statements are combined within the City's financial statements. Additional information regarding all three of these legally separate entities can be found in the notes to the financial statements. The City Council reviews and adopts a two-year operating budget to provide for effective management and budgetary control of City assets and to assist in achieving the objectives set by the City Council. All departments of the City are required to submit requests for appropriation to the City Manager during March of every other year in which the two-year budget is prepared. The City Manager uses these requests as the starting. point for developing a proposed budget. The City Manager then presents this proposed budget to the City Council for review prior to May 31. The council holds public hearings on the proposed budget and adopts a final two-year budget in June every other year. The appropriated budget is prepared by fund, function (e.g., public safety), and department (e.g., police). The City Manager is authorized to transfer budgeted amounts between departments to assure adequate and proper standards of service. Budgetary revisions, including supplemental appropriations which increase appropriations in individual funds, must be approved by the City Council. At the end of the first year of the two-year budget, a review is held with City Council to make any necessary adjustments to the upcoming second year budget. Budget -to -actual comparisons are provided in this report for each individual governmental fund for which an appropriated annual budget has been adopted. For the general fund, this comparison is presented as part of the required supplementary information in the accompanying financial statements. For governmental funds that have appropriated annual budgets, other than the general fund, this comparison is presented in the supplementary section of the accompanying financial statements. I L7 1 I 1 kV 1 Local economy ' The City of West Covina is a largely residential city that has a large commercial section along the Interstate 10 corridor. That commercial section includes two regional shopping centers and a number of auto dealerships. Because of this makeup, as well as changes at the state level that ' replaced the majority of vehicle license fees with a like amount of property taxes, the City relies heavily on sales tax and property tax revenues as its two major sources of revenues. 92% of City General Fund property taxes are generated by residential properties and over 60% of sales tax revenues are generated from the two shopping centers and the auto dealerships. Property taxes increased by 17.6% during the year due to a strong residential real estate market and the end of ' the ERAF shift, while sales tax revenues grew by only 0.6%. Property tax growth is expected to slow down in coming years as the housing market cools off and sales taxes are predicted to be sluggish through calendar 2008 as the effects of the housing market makes it way through the overall economy. The City, because of its location and demographics, continues to be an attractive location for commercial and office tenants. Retailers, restaurants and auto dealerships all have strong interest in locating in the City and several projects are currently underway or in discussion featuring these types of businesses. A new commercial center on a former landfill site and two new auto dealerships are currently under construction. The office market is generally underserved in the eastern San Gabriel Valley and the City has entertained several proposals for construction of new office space. Property taxes are expected to continue to increase in the near future. Despite the slowdown in the residential real estate market, many of the homes in the City still carry relatively low assessed valuations and when ' they are sold, they result in a substantial increase in assessed valuation. In the last three years the sales of homes has resulted, on average, in an increase in assessed valuation exceeding 100%. ' Long-term financial plannin g The City adopted a General Fund budget for 2006-07 as the first year of the City's two-year budget. The budget was balanced for both years and contained a surplus of $52,028 in 2006-07 and a surplus of $149,370 in 2007-08. This two-year budget reflected a reversal of the trend of gap budgets that existed in prior years. This balanced budget was the result of new revenue sources, an improving economy notably in the area of property related revenue and new commercial developments, and responsible controlled expenditure growth. The City has worked hard over the last few years to find and implement solutions to the City's ongoing budget structural imbalance and to ensure that the economic well being of the City is maintained. The reversal of gap budgets is the result of strong revenue growth due to an improving economy, the implementation of new revenue sources such as the ambulance service and the sales tax reimbursement agreement with the Community Development Commission, and controlling the growth of expenditures. ' The City's two largest revenue sources are sales tax and property taxes, which each generate approximately 30% of General Fund revenues. These top two revenues performed in opposite directions during the 2006-07 fiscal year. Due mainly to a strong housing market, property taxes vii F� exceeded their budget estimate by almost $1.4 million. This excess was the result of almost $900,000 in supplemental property taxes and $300,000 in redemption of previously delinquent property taxes. These two numbers are significantly higher than normal levels. Supplemental property taxes are paid when a property is sold and is the difference between the taxes based on the old assessed valuation and taxes on the new valuation. On average, residential properties that sold during the fiscal year resulted in a 100% increase in the assessed valuation. This is due to the large number of properties that still carry relatively low assessed valuations that are protected by Prop 13. The increase in property taxes more than offset the shortfall of over $800,000 in sales tax revenues. The shortfall in sales taxes was due to the BKK commercial site not coming online as expected, and decreases in sales tax from new auto sales and the mall. While the BKK commercial site will come online later in the current fiscal year, economic reports suggest that the sluggish sales in the new auto and commercial sectors is expected to continue into the near future. Growth in property taxes is expected to slow down significantly. While the property tax slowdown is not expected to be as drastic as sales tax, the downturn in the residential real estate market is expected to have a spillover effect into the general economy as job losses in the real estate and construction industries, loss of equity among homeowners, and the tightening of credit take its effect on consumer spending. While the City's financial position has improved dramatically in the last two years, the challenge for the City in future years will be to continue to control the growth of expenditures at a reasonable rate as revenue growth begins to level off from its rapid increases. The City must also identify and implement revenue sources that can produce sustained growth to keep up with the growth in expenditures. The City also has a number of large capital items that have been deferred in recent years but must now be addressed. These items include the replacement of the City's 911 emergency radio system, aging public safety facilities and the replacement. of many City vehicles. The City is addressing alternatives to funding these and other capital needs. During the 2005-06 fiscal year, the City was able to set aside $1 million to be placed in a vehicle replacement fund to assist in meeting the funding needs to replace vehicles. At June 30, 2007, the City had a General Fund unreserved fund balance that is equal to 40% of its 2006-07 expenditures. This large fund balance allows the City to weather financial difficulties and also provide funding for capital needs. Despite the challenges ahead, the above - mentioned factors have placed the City in a good position to continue to provide a high level of service to the community. Relevant financial policies In past years the City's budget has been largely affected by actions taken by the state in efforts to balance their own budget. This has included shifting property taxes away from cities and borrowing other types of monies normally earmarked for, cities. In more recent years this trend has been stopped as the state's budget condition improved and cities were able to have favorable legislation passed to limit the state's ability to impact local government revenues. The state eliminated a portion of the vehicle license fee (VLF) revenues and replaced them with a like amount of property tax revenues. This is a permanent shift. The increase in the Property Tax in Lieu of VLF is tied to increases in assessed valuation in the City, which will benefit the I� 1 F�l viii 1 1 1 11 City in the near term as property taxes are expected to continue their strong growth in the next couple of years. The state also previously adopted the so-called "triple flip" as part of the state fiscal recovery bonds approved by California voters in March 2004. Under the triple flip, one quarter of the City's sales tax revenue will be swapped for a like amount of property tax. This swap will remain in place as long as the fiscal recovery bonds are outstanding. Increases in this new revenue source will be tied to increases in the City's remaining portion of sales tax. Proposition IA, which was approved by 80% of California voters in November 2004 should provide the City with protection for local government revenues and help provide a level of stability for revenues which hasn't existed in the past. With large budget deficits once again being predicted at the state level, cities are again susceptible to having money taken away from them. Under Prop IA however, this money can only be taken in cases of extreme financial hardship and whatever funds taken must be repaid to local agencies. The City has produced balanced budgets for the last three years; however, balancing budgets in the upcoming years will prove more challenging than in the past. With the economy slowing down and pressure from the rising cost of providing services, the ,City will need to look for sustainable revenues that will provide sufficient consistent growth to provide these services. The City will also need to review its capital funding policies in anticipation of major capital needs in the future and also the fund balance reserve policy as this balance has been reduced in recent years. The City will also need to address the unfunded liability for its retiree health plans and ways to fund it in the future. These issues will all be addressed as part of the upcoming budget cycle. Major Initiatives A major initiative of the City over the last couple of years has been to bring the General Fund budget into balance. Now that that has occurred, the goal is to continue that trend in the wake of a slowing economy as some revenue sources that have grown stagnant. The City will also need to focus on a number of capital items that have been deferred in recent years due to insufficient funding. The City is evaluating a number of its facilities for needed improvements, including police and fire department facilities and certain park facilities. While the City's large fund balance has provided the opportunity to fund many of these projects, the City will need to aggressively pursue external funding sources where possible for these projects. The Community Development Commission is the economic engine of the City as it serves a vital role of stimulating local businesses, generating employment opportunities and enhancing the City's economic stability by generating a larger tax base. The major project continues to be the efforts to redevelop the former BKK landfill site located in the southern portion of the City. The City started construction during the fiscal year on a, sports park. It is the first phase of this redevelopment project. This was followed by the start of construction on a commercial development that is located on the site adjacent to the sports park. Both projects are estimated to be completed within one year. The City also sold a portion of its property on the site to a developer who has plans to build two office buildings and is exploring opportunities for the remaining property owned by the City at the site. The City is largely built out and the challenge is to maximize the commercial areas that have the most potential for rehabilitation and redevelopment. The Community Development Commission ix is currently in discussions with local -auto dealers, a commercial center developer and the owner of the regional mall in efforts to assist in their development and expansion plans. Awards and Acknowledgements The Government Finance Officers' Association of the United States and Canada (GFOA) awarded a Certificate of Achievement for Excellence in Financial Reporting to the City of West Covina for its comprehensive annual financial report for the fiscal year ended June 30, 2006. In order to be awarded a Certificate of Achievement, a government must publish an easily readable and efficiently organized comprehensive annual financial report that satisfied both generally accepted accounting principles and applicable legal requirements. We believe the current comprehensive annual financial report continues to meet GFOA standards. The City has received GFOA's Distinguished Budget Presentation Award for its two-year budget document for fiscal years 2006-08. In order to qualify for the Distinguished Budget Presentation Award, the City's budget document was judged to be proficient in several categories, including as a policy document, a financial plan, an operations guide, and a communications device. The preparation of this report could not have been accomplished without the efficient and dedicated services of the entire staff of the finance department. We would like to express our appreciation to all members of the department who assisted and contributed to the preparation of this report. Credit 'also must be given to City Council for their interest and support in planning and conducting the financial operations of the City in a responsible and progressive manner. Respectfully submitted, Tom Bachman Director of Finance 1 1 H 1 1 1 I KII 1 1 1 1 1 1 1 i 1 1 1 1 1 1 CITY OF WEST COVINA City Officials June 30, 2007 CITY COUNCIL Mike Touhey, Mayor Sherri Lane, Mayor Pro Tern Steve Herfert Roger Hernandez Shelly Sanderson CITY MANAGER Andrew G. Pasmant EXECUTIVE MANAGEMENT Artie Fields Assistant City Manager Arnold M. Alvarez-Glasman City Attorney Sue Rush City Clerk Clay Durbin Communications Director Chris Chung Community Development Commission Director Michelle McNeill Community Services Director Steve Samaniego Environmental Management Director Thomas Bachman Finance Director Richard Elliott Fire Chief Artie Fields Interim Human Resources Director Doug McIsaac Planning Director Frank Wills Police Chief Shannon Yauchzee Public Works Director Erin Hoppe Risk Management Director xi City Clerk (Elected) City of West Covina Organizational Chart Citizens of West Covina City Council (Elected) Community Services Commission Ij Planning Commission Waste Management & Environmental Quality Commission City Treasurer (F7ected) I Human Resources Commission Senior Citizens' Commission City Attorney City Manager City Communications Community Development Community Clerk Commis! I I Services Environmental I I Finance I Fire Human Management Resources Planning Police Public Risk Works Manager Xii Certificate of Achievement for Excellence in Financial 1 Reporting Presented to City of West Covina California For its Comprehensive Annual Financial Report ' for the Fiscal Year Ended June 30, 2006 ' A Certificate of Achievement for Excellence in Financial Reporting is presented by the Government Finance Officers Association of the United. States and Canada to government units and public employee retirement ' systems whose comprehensive annual financial reports (CAF'Rs) achieve the highest standards in government accounting and financial reporting -I. sr fi SMt F9 =l61Y$C SfAPrS � ff ays M. �wn . FN President x�ex. xop Executive Director xiii E t Mayer P-offman FlAcCann P.C. An Independent CPA Firm Conrad Government Services Division 2301 Dupont Drive, Suite 200 Irvine, California 92612 949-474-2020 ph 949-263-5520 fx www.mhm-pc.com Honorable Mayor and City Council City of West Covina West Covina, California INDEPENDENT AUDITORS' REPORT We have audited the accompanying financial statements of the governmental activities, the business -type activities, each major fund, and the aggregate remaining fund information of the City of West Covina, California, as of and for the year ended June 30, 2007 which collectively comprise the City's basic financial statements, as listed in the table of contents. These financial statements are the responsibility of the management of the City of West Covina. Our responsibility is to express an opinion on these financial statements based on our audit. The prior, year partial comparative information has been derived from the financial statements of the City of West Covina for the year ended June 30, 2006, in our report dated October 19, 2006, we expressed an unqualified opinion on those financial statements. 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 the Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principals used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the respective fmancial position of the governmental activities, the business -type activities, each major fund, and the aggregate remaining fund information of the City of West Covina, California, as of June 30, 2007 and the respective changes in finan.ci.alposition and cash flows, where applicable, of the City of West Covina, California for the year then ended in conformity with accounting principles generally accepted in the United States of America. The information identified -in the accompanying table of contents as management's discussion and analysis and required supplementary information are not a required part of the basic financial statements, but are supplementary information required by . the Governmental Accounting Standards Board. We have applied certain limited procedures, which consisted principally of inquiries of management regarding the methods of measurement and presentation of the required supplementary information. However, we did not audit the information and express no opinion on it. Honorable Mayor and City Council City of West Covina West Covina, California Our audit was conducted for the purpose of forming an opinion on the financial statements that collectively comprise the City of West Covina's basic financial statements. The introductory section, combining and individual fund financial statements and schedules and statistical tables are presented for purposes of additional analysis and are not a required part of the basic financial statements. The combining and individual fund financial statements and schedules have been subjected to the auditing procedures applied in the audit of the basic financial statements and, in our opinion, are fairly stated in all material respects in relation to the basic financial statements taken as a whole. The introductory section and statistical tables have not been subjected to the auditing procedures applied in the audit of the basic financial statements and, accordingly, we express no opinion on them. In accordance with Government Auditing Standards, we have also issued our report dated December 14, 2007 on our consideration of the City's internal control over financial reporting and our tests of its compliance with certain provisions of laws, regulations, contracts, grant agreements, and other matters. The purpose of that report is to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on the internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards and should be considered in assessing the results of our audit. Irvine, California December 14, 2007 I I F' L 11 MANAGEMENT'S DISCUSSION AND ANALYSIS The following discussion and analysis of the financial performance of the City of West Covina provides an overview of the City's financial activities for the fiscal year ended June 30, 2007. The information presented herein should be considered in conjunction with the transmittal letter and financial statements identified in the accompanying table of contents. FINANCIAL HIGHLIGHTS • As of June 30, 2007, the City's total net assets (excess of assets over liabilities) were $249.7million. • The City's total net assets increased $7.7 million. The increase was the result of the increases in capital assets that more than offset the increase in capital debt, and which was due to the construction of the West Covina Sports Park Project. • As of June 30, 2007, The City's governmental funds reported combined ending fund balances of $97.2 million, an increase of $3.7 million from the prior year. Approximately $19.3 million of this total amount is available for spending at the City's discretion. • As of June 30, 2007, unreserved fund balance for the General Fund was $19.3 million, or 40% of total General Fund expenditures. • The City's total debt had a net increase of approximately $17.6 million during the current fiscal year. The City issued $18 million in new debt during the fiscal year to provide partial funding for the West Covina Sports Park Project. OVERVIEW OF THE FINANCIAL STATEMENTS The annual report consists of four parts — management's discussion and analysis (this section), the basic financial statements, required supplementary information, and an optional section that presents combining statements for non -major governmental funds and internal service funds. The basic financial statements include two kinds of statements that present different views of the City: The first two statements are government -wide financial statements that provide both long- term and short-term information about the City's overall financial status. The remaining statements are fund financial statements that focus on individual parts of the City government, reporting the City's operations in more detail than the government -wide statements. • The governmental funds statements tell how general government services like public safety were financed in the short term as well as what remains for future spending. • Proprietary funds statements offer short- and long-term financial information about the activities the government operates like businesses, such as the West Covina Service Group, the City's computer enterprise. • Fiduciary fund statements provide information about the fiduciary relationships — like the agency funds of the City — in which the City acts solely as agent or trustee for the benefit of others, to whom the resources in question belong. The financial statements also include notes that explain some of the information in the financial statements and provide more detailed data. The statements are followed by a section of required supplementary information that provides additional financial and budgetary information. Reporting the City as a Whole. The accompanying government -wide financial statements include two statements that present financial data for the City as a whole. The Statement of Net Assets and the Statement. of Activities report information about the City as a whole and about 'its activities. These statements include all assets and liabilities using the accrual basis of accounting, which is similar to the accounting used by most private -sector companies. All of the current year's revenues and expenses are taken into account regardless of when cash is received or paid. These two statements report the City's net assets and changes in them. The. City's net. assets — the difference between assets and liabilities — is one way to measure the City's financial health, or financial position. Over time, increases and decreases in the City's net assets. are one indicator of whether its financial health is improving or deteriorating. You will need to consider other nonfinancial factors, however, such as changes in the City's property tax or sales tax base and the condition of the City's roads, to assess the overall health of the City. The Statement of Net Assets and the Statement of Activities are .divided into two kinds of activities: • Governmental activities Most of the City's basic services such as public safety, streets and roads, economic development and parks and recreation, are reported here. Sales taxes, property taxes, state subventions, and other revenues finance most of these activities. • Business -type activities — The City charges a fee to customers to help it cover all or most of the cost of the services accounted for in these funds. These activities include the City's computer enterprise operation. The government -wide financial statements include the City of West Covina Community Development Commission and the West Covina Public Financing Authority (component units), along with the City of West Covina (the primary government). Although legally separate, these component units are important because the City is financially accountable for them. Reportingthe he City's Most Significant Funds The fund financial statements provide detailed information about the City's most significant funds — not the. City as a whole. Some funds are required to be established by State law or by bond covenants. However, City Council establishes many other funds to help it control and manage money for particular purposes or to show that it is meeting administrative responsibilities for using certain taxes, grants, or other money (like grants received). The City's two kinds of funds — governmental and proprietary.-- use different accounting approaches. Governmental funds — Most of the City's basic . services are reported in governmental funds, which focus on how money flows into and out of those funds and the balances left at year end that are available for spending. These funds are reported using. the modified accrual accounting method, which measures cash and all other current financial assets that can readily be converted to cash. The governmental fund statements provide a detailed short-term view of, the City's general government operations and the basic services it provides. Governmental fund information helps you determine whether there are more or fewer financial resources that can be spent in the near future to finance the City's programs. We describe the relationship or differences between governmental activities (reported in the Statement of Net Assets and .the Statement of Activities) and governmental funds in reconciliations on the pages following the fund financial statements in this report. Proprietary funds — When the City charges customers for the services it provides these I� 11 al ' services are generally reported in proprietary funds. Proprietary funds are reported in the same way that all activities are reported in the Statement of Net Assets and the Statement of Activities. In fact, the City's enterprise funds are the same as the business -type activities we ' report in the government -wide statements but provide more detail and additional information, such as cash flows, for proprietary funds. We use internal service funds (the other component of proprietary funds) to report activities that provide supplies and services for the City's other programs and activities. Reporting the City's FiduciaiResponsibilities I The City is an agent for certain assets held for, and under the control of, other organizations and individuals. All of the City's fiduciary activities are reported in a separate Agency Fund Combining Statement of Changes in Assets and Liabilities. We exclude these activities from the ' City's other financial statements because the City cannot use these assets to finance its operations. The City is responsible for ensuring that the assets reported in these funds are used for their intended purposes. tGOVERNMENT -WIDE FINANCIAL STATEMENTS As noted earlier, net assets may serve over time as a useful indicator of a government's financial position. At June 30, 2007, net assets for the City of West Covina were $249,719,341. A summary of the government -wide statement of net assets at June 30, 2007 follows: ' Table 1 Net Assets Governmental Activities Business -type Activities Total 2007 2006 2007 2006 2007 2006 Current and other assets $ 197,309,095 188,816,281 1,049,226 1,809,032 198,358,321 190,625,313 Capital assets 241,344,610 216,748,972 303,147 193,706 241,647,757 216.942,678 Total Assets Long-term debt 438,653,705 164,080,476 405,565,253 146,960,042 1,352,373 149,594 2,002,738 133,571 440,006,078 164,230,070 407,567,991 147,093,613 outstanding Other liabilities 25,878,874 18,295,186 177,793 205,467 26,056,667 18,500,653 Total Liabilities 189,959,350 165,255,228 327,387 339,038 190,286,737 165,594,266 Net Assets: Invested in capital assets, net of debt 139,413,253 144,030,127 303,147 193,706 139,716,400 144,223,833 Restricted 88,484,572 99,990,727 - - 88,484,572 99,990,727 1 Unrestricted 20.796,530 (3,710,829) 721,839 1,469,994 21,518,369 (2,240,835) Total net assets $ 248.694,355 240,310,025 1.024.986 1.663.700 249.719.341 241,973,725 $139,716,400 (55.9%) of the net assets reflects the City's investment in capital assets, less any related debt used to acquire those assets that is still outstanding. Since these assets are used to provide services to the citizens they are not available for future spending. An additional 5 $88,484,572 (35.4%) of net assets represents resources that are subject to external restrictions on , how they may be used. There is a resulting balance of $21,518,369 of net 'assets that is unrestricted and may be used to meet the City's ongoing service and credit obligations. , - ement of activities for the year A summary of the government wide stat y ended June 30 2007 follows: Table 2 , Changes in Net Assets Governmental Activities Business -type Total Activities 2007 2006 2007 2006 2007 2006 Revenues Program revenues: Charges for services $.12,406,538 13,068,142 1,765,224 1,721,715 14,171,762 14,789,857 Operating contributions. and 8,607,221 11,614,595 - - 8,607,221 11,614,595 grants Capital contributions and grants 2,714,668 : 285,078 - - 2,714,668 285,078 General revenues: Property taxes 32,458,314 27,614,922 - - 32,458,314 27,614,922 Sales taxes 14,056,880 14,216,986 - - 141056,880 14,216,986 Other taxes 7,328,382 6,279,487 - - 77328,382 6,279,487 Other general revenues 15,465,587 4,599,181 66,873 71,120 15,532,460 4,670,301 Total revenues 93,037,590 77,678,391 1,832,097 1,792,835 94,869,687 79,471,226 ' Expenses General government46,328 1,594,760 - - 46,328 1,594,760 Public safety 42,186,533 38,433,238 - _ - 42,186,533 38,433,238 Public works 19,322,212 20,696,562 - - Community services 5,167,297 6,482,112 - - 19,322,212 20,696,562 5,167,297 6,482,112 Community development 9,610,651 11,245,539 - - 9,610,651 11,245,539 Interest expense 8,320,239 7,714,047 - - 8,320,239 7,714,047 Computer service - - 2,470,811 2,098,690 2,470,811 1 2,098,690 Total expenses 84,653,260 86,166,258 2,470,811 2,098,690 87,124,071 88,264,948 Increase (decrease) in net assets 8,384,330 (8,487,867) (638,714) (305,855) 7,745,616 (8,193,722) Beginning net assets 240.310,025 248,797,892 1,663,700 1,969,555 241,973,725 250,767,447 Ending net assets 248,694, 555 24 1 24 8 1 f� 63,70Q 249.719.341 241,973,725 The increase or decrease in net assets can provide an indication as to whether the overall financial position of the City improved or deteriorated during the year. Total net assets for the City increased by $7,745,616 during the fiscal year. Governmental activities net assets increased ' by $8,384,330 (3.5%) during the fiscal year while business -type activities net assets decreased by $638,714 (38.4%). The net assets (financial position) of the City changed as a result of the revenue and expense fluctuations described below for the governmental and business -type activities of the City. 6 Governmental Activities Some of the more significant changes in the revenues and expenses of the City's governmental activities presented above are as follows: • Property tax revenue is the City's largest revenue source. This revenue source grew by $4,843,392 (17.5%) due 10% growth citywide in assessed valuation and the end of the ERAF shift in which the City lost $1.1 million in the two prior years as a result of state budget actions. • Vehicle in lieu revenue decreased by $1,955,775 (75.0%) due to a one-time repayment of the VLF gap loan in the previous year. • Interest income, included in other revenues in the chart above, increased by $4.9 million due to a large negative fair market value adjustment that occurred in the prior year and much larger earnings in the capital projects funds as a result of large balances on hand for ongoing construction projects. • The City had an increase of $6,611,788 in gain on sale of assets due to the sale of a portion of the former landfill site to a commercial developer. • Public Safety costs increased.by $3,753,295 (9.8%) • Overall Government Activities expenses decreased by $1,512,998 (1.8%). Revenues by Source — Governmental Activities Operating grants and cl Charges for service 13% Other revenu( 8% Investment ii 7% Motor 8% Capital grants and contributions 3% )perry taxes 36% Expenses by Function — Governmental Activities , General government Interest expense 0% 10% Community development I l% Community services ty Public safety 6% . 50% Public works 23% ' • l Business -Type Activities 1 The business -type activity is the Computer Services Group, which provides dispatch and records management software and services to other ,police departments. The business -type activities revenues (see Table 2) increased by $39,262 (2.2%) from $1,79.2,835 in 2005/06 to $1,832,097 in 2006/07. Expenses increased by $372,121 (17.7%) from $2,098,690 in 2005/06 to $2,470,811 in 2006/07. The reasons for significant changes in the revenues and expenses of the City's business -type activities from the prior year are as follows: The City computer service enterprise operating expenses increased by $372,121 due to increased software development costs. • 8 11 1 Expenses and Program Revenues — Business -type Activities 3,000,000 2,500,000 2,000,000 1 1,500,000 Ll r I 1,000,000 500,000 Computerservice MAJOR FUNDS As noted earlier, the City uses fund accounting to provide proper financial management of the City's resources and to demonstrate compliance with finance -related legal requirements. Major Governmental Funds. The General Fund is the chief operating fund of the City. At the end of the current fiscal year, unreserved fund balance of the General Fund was $19,315,808, while total fund balance was $44,109,483. As a measure of the General Fund's liquidity, it may be useful to compare both unreserved fund balance and total fund balance to total fund expenditures. Unreserved fund balance represents 40% of total general fund expenditures, while total fund balance represents 91 % of that same amount. The reasons for significant changes in the revenues and expenditures of the City's General Fund from the prior year are as follows: • Total taxes were up $2,639,272 (7.7%) from the prior year. Property taxes increased by 2,483,121 (17.6%) due to a continued strong residential real estate market and the end of the ERAF shift. Sales tax revenues, including the triple flip amount, increased by $79,259 (0.6%). Declines in the new auto sales and retail sectors were somewhat offset by the addition of two new auto dealerships. Transient occupancy taxes increased $88,881 (9.5%). • Licenses and permits increased by $501,876 (37.8%) due to increases in building permits. • Investment income increased by $320,898 (7.4%) due to slightly higher balances and higher interest rates. • Revenues from other agencies decreased by $1,813,565 (63.5%) due to the previously mentioned one time repayment of the VLF gap loan in the prior year. • Charges for services decreased by $358,406 (11.2%) due in part to the ambulance service revenues which were down $164,436 (9.4%). Various other planning and reimbursement revenues were also down in this category. • Total General Fund expenditures, offset by interfund revenues and excluding fund transfers, increased by $1,246,236 (2.7%). �. • Public safety costs increased by $1,238,651 (3.2%). • Public Works increased by $533,597 (12.8%) due to increased costs for plan check and ,building inspections and a general increase in all maintenance categories. The increase in 1 plan check and building inspections was offset by the increase in building permits. • Community Services costs increased by $320,491 (33.3%) due to increase programming and park capital projects completed during the year. The Debt Service Fund finished the fiscal year with a total fund balance of $19,178,397, up from $17,244,570 in the prior year. The majority of that amount is designated for payment of debt service on the City's lease revenue bonds., The increase in fund balance was due to bond proceeds in the amount of $3.1 million being transferred into the fund from the 2006 BLD bonds for capitalized interest and expenses. The Community Development ment Commission Debt Service Fund has a deficit fund balance of $11,682,268, down from a deficit of $12,831,390 in the prior year. This deficit is due to $20,836,659 of advances from the General Fund. These advances will be repaid to the General Fund from future property tax increment revenues. Property tax revenue increased by $1,698,418 (8.9%) over the prior year while debt service expenditures and transfers out increased by $1,027,904 (5.2%). , The Capital Projects Fund finished the year with a $17,975,361' fund balance.. The majority of the fund balance is funds that have .been set aside in this fund for the West Covina Sports Park project. The Community Development Commission Capital Projects Fund finished the fiscal year with a total fund balance of $15,869,912, down from $18,878,685 in the prior year. The majority of that amount is reserved for low and moderate -income housing programs. Total revenues for the year increased by $5,574,290 (77.3%) due in large part to the sale of a portion of the former landfill site for commercial development. Investment income increased by $436,646 (58.7%). ' Loan repayments decreased by $284,250 (32.3%) from the prior year due to a continued decrease in repayments of low and moderate -income housing loans. Other revenues decreased by $1,069,806 (77.7%) due to the sale of CDC equity interests in an office complex that occurred in the prior year. Expenditures were down $3,318,399 (31.6%) due grading costs in the prior year , at the former landfill site. Fund transfers out of $11,295,688 were transferred to the City Capital Projects Fund. for the West Covina Sports Park. GENERAL FUND BUDGET There was $2;183,625 in additional appropriations made during the fiscal year. The major differences between the original budget and the final amended budget of the General Fund are briefly summarized below. • $1.5 million increase in the budget for the Shadow Oaks Park Improvements capital , project • $179,700 increase in the budget miscellaneous capital projects • $343,925 increase in the budget for general government activities • $1.60,000 increase in the budget for the police department for added patrol and hiring incentives 10 Taxes exceeded their budget by $715,580 primarily due to property tax exceeding its budget by $1,382,732 and sales tax falling short of its budget by $855,106. The excess in property taxes was due largely higher than expected increase in assessed valuation which led to secured taxes exceeding it budget by $359,304, Supplemental in lieu of VLF taxes exceeding it budget by $241,123 and a large increase in supplemental taxes that exceeded the budget by $699,607. ' Licenses and permits exceeded their budget by $751,851 due to increased building permits activity. Interest income fell short of its budget estimate by $51,733 (1.1%). Other revenues exceeded the budget by $111,880 due to unbudgeted auction proceeds from sales of City assets and reimbursement of previous expenditures. On the expenditure side, public safety was under r budget by $274,389 due in large part to savings in the communications and fire departments. Additionally, the City held off on buying four police vehicles that were included in the budget. Public works exceeded it budget by $106,396 due to increased maintenance and utility costs and increased contract building inspection and plan checking costs. The building and plan checking costs were offset by additional permit fees collected for those services. 1 CAPITAL ASSETS Capital Assets (net of depreciation) Governmental Activities Business -type Activities Total 2007 2006 2007 2006 2007 2006 ' Land 54,572,073 54,572,073 - - Buildings and system 8,372,879 8,372,879 - - 54,572,073 8,372,879 54,572,073 8;372,879 Other improvements 18,613,426 18,006,574 - - 18,613,426 18,006,574 Equipment and vehicles 6,478,150 6,746,421 303,147 193,706 6,781,297 6,940,127 Infrastructure 102,258,500 105,869,842 - - 102,258,500 105,869,842 Rights of way 14,376,498 14,376,498 - - 14,376,498 14,376,498 Construction in progress 36,673,084 8,804,685 - - 36,673,084 8,804,685 Total 241,344,610 216,748,972 303,147 l 241,64? 757 216,942,678 The mayor additions to capitalassets duringthe year ended June 30, 2007 are as follows: • Construction in progress increased by a net $27,868,399 with the major additions listed below: • Construction of the West Covina Sports Park ($24,085,019) 1 • Replacement of the City Hall HVAC system ($656,472) North Azusa Avenue Improvements ($487,829) • Bus Route Rehabilitation project ($1,079,329) • Completed fixed asset additions included: • Vehicles and equipment ($1,243,263), including: • Public safety emergency response and communications equipment ($381,156) • Police patrol vehicles ($397,878) • Various street construction and rehabilitation projects ($2,338,135) • Various other infrastructure projects ($723,080) 11 11 Additional information on the City of West Covina's capital assets can be found in note 8 on pages 48 - 49 of this report. LONG-TERM DEBT At the end of the current fiscal year, the City had debt outstanding of $170,734,437. Of this amount, $131,950,000 represents outstanding bonds and $38,784,437 represents other debt such as developer agreements payable, amounts due to other agencies, compensated absences payable, notes payable and capital lease obligations. Of the outstanding bonds, $55,095,000 comprises lease revenue bonds secured by leases from the General Fund, $35,615,000 of bonds secured by tax increment revenues of the Redevelopment Agency including the housing set -aside funds, and $41,240,000 of special assessment debt. The special assessment bonds are secured by a special tax levied annually on the property within the community facilities district; in addition to a pledge by the City and Redevelopment Agency of property taxes and sales taxes generated within the district. Lease revenue bonds Special assessment bonds Tax allocation bonds Total Outstanding Bonds Governmental Activities 2007 2006 $60,570,000 41,240,000 30,140,000 131,950,000 44,550,000 42,345,000 30,830,000 117,725,000 In September 2006, the City of West Covina Public Financing Authority issued $18,005,000 of lease revenue bonds to provide funding for the West Covina Sports Park project. The bonds consisted of $10,710,000 of fixed rate tax-exempt bonds and $7,295,000 of fixed rate taxable bonds. The City maintains an "A" rating from Standard & Poor's for its lease revenue bonds. Additional information on the City's long-term debt can be found in the notes to the accompanying financial statements. Additional information on the City of West Covina's long-term debt can be found,in notes 9 - 18 on pages 49 — 59 of this report. Contacting the City's Financial Mana ement This financial report is designed to provide our citizens, taxpayers, customers, investors and creditors with a general overview of the City's finances and to show the City's accountability for the money it receives. If you have questions about this report or need additional financial information, contact the Finance Director's Office, at City of West Covina, 1444 West Garvey Ave., West Covina, California 91793. 12 1 1 ii (This page intentionally left blank.) 1 13 1 BASIC FINANCIAL STATEMENTS 14 CITY OF WEST COVINA Statement of Net Assets June 30, 2007 rGovernmental Business -Type Totals Activities Activities 2007 2006 Assets: Cash and investments (note 2) $ 99,073,467 966,627 100,040,094 85,887,426 Cash and investments with with fiscal agent (note 2) 18,416,362 - 18,416,362 18,536,609 Receivables: Accounts 458,090 75,238 533,328 365,972 Taxes 5,103,728 - 5,103,728 7,089,894 Interest 709,339 7,361 716,700 595,769 Assessments (note 6) 41,271,090 41,271,090 42,391,447 Notes and loans (note 5) 26,450,450 - 26,450,450 26,858,017 Due from other agencies 5,408,697 5,408,697 5,717,593 Inventory 6,740 _ 6,740 39,147 Prepaids and other assets 344,092 - 344,092 429,864 Land held for resale (note 7) Capital assets (note 8): 67,040 - 67,040 2,713,575 Land and rights of way 68,948,571 68,948,571 68,948,571 Construction in progress 36,673,084 - 36,673,084 8,804,685 Other capital assets, net 135,722,955 303,147 136,026,102 139,189,422 Total assets 438,653,705 1,352,373 440,006,078 407,567,991 Liabilities: ' Accounts payable 8,133,894 109,752 8,243,646 4,492,739 Other accrued liabilities 5,081,847 34,374 5,116,221 2,592,693 Due to other governments Interest payable 837,123 1,507,499 - - 837,123 1,507,499 704,629 1,474,713 Deposits 1,341,416 - 1,341,416 798,939 Unearned revenue 2,506,395 - 2,506,395 2,424,618 Long-term liabilities (notes 9 to 18): Due within one year 6,470,700 33,667 6,504,367 6,012,322 Due in more than one year 164,080,476 149,594 164,230,070 147,093,613 Total liabilities 189,959,350 327,387 190,286,737 165,594,266 Net assets: Invested in capital assets, net of related debt 139,413,253 303;147 139,716,400 144,223,833 Restricted for: Public safety 52,479 - 52,479 408,012 Public works 1,028,860 - 1,028,860 403,377 Community services 5,210,140 - 5,210,140 5,731,588 Community development 40,922,003 - 40,922,003 45,177,966 Debt service 41,271,090 - 41,271,090 48,269,784 Unrestricted 20,796,530 721,839 21,518,369 (2,240,835) rSee Total net assets $ 248,694,355 1,024,986 249,719,341 241,973,725 accompanying notes to the basic financial statements. r 15 r CITY OF WEST COVINA Statement of Activities For the year ended June 30, 2007 Governmental activities: General government Public safety Public works Community services Community development Interest expense Total governmental activities Business -type activities: Computer service Total business -type activities - Program Revenues Operating Capital Charges for Contributions Contributions Expenses Services and Grants and Grants $ ' 46,328 861,565 - - 42,186,533 3,141,098 2,133,762 - 19,322,212 6,339,196 2,953,703 ' 1,172,909 5,167,297 1,526,866 3,519,756 1,541,759 9,610,651 537,813 - - 8,320,239 - - - 84,653,260 12,406,538 8,607,221 2,714,668 2,470,811 1,765,224 - - 2,470,811 1,765,224 - - $ 87,124,071 14,171,762 8,607,221 2,714,668 General revenues: Taxes: Property taxes Sales tax Other taxes Motor vehicle in lieu, unrestricted Investment income Gain on sale of assets Other revenues Total general revenues Change in net assets Net assets at beginning of year Net assets at end of year See accompanying notes to the basic financial statements. 16 1 Net (Expense) Revenue and Changes in Net Assets Governmental Business -type Totals ' Activities Activities 2007 2006 815,237 - 815,237 1,107,194 (36,911,673) - (36,911,673) (33,550,689) (8,856,404) - (8,856,404) (9,965,123) 1,421,084 - 1,421,084 (132,916) (9,072,838) - (9,072,838) (10,942,862) (8,320,239) - (8,320,239) (7,714,047) (60,924,833) - (60,924,833) (61,198,443) - (705,587) (705,587) (376,975) (705,587) (705,587) (376,975) ' (60,924,833) (705,587) (61,630,420) (61,575,418) 32,458,314 14,056,880 - - 32,458,314 14,056,880 27,614,922 14,216,986 7,328,382 - 7,328,382 6,279,487 650,304 - 650,304 2,606,079 6,919,306 66,873 6,986,179 2,064,222 6,611,788 - 6,611,788 - 1,284,189 - 1,284,189 - 69,309,163 66,873 69,376,036 52,781,696 I8,384,330 (638,714) 7,745,616 (8,793,722) 240,310,025 1,663,700 241,913,725 250,767,447 $ 248,694,355 1,024,986 249,719,341 241,973,725 17 1 CITY OF WEST COVINA Balance Sheet - Governmental Funds June 30, 2007 City CDC General Debt Service Debt Service Assets Cash and investments $ 12,693,469 15,973,292 4,441,203 Cash and investments with fiscal agent - . 3,298,077 6,003,166 Receivables: Accounts, 218,014 16,845 - Taxes 2,933,315 - 1,528,853 Interest 154,459 - 116,735 Assessments . _ _ _ Notes and loans - Due from other funds (note 3) 4,745,023 - - Due from other governments 2,043,620 - - Inventory Prepaids and other assets 47,594 21,027 - Advances to other'funds (note 4) 29,136,659 - - Land held for resale - _ _ Total assets $ 51,972,153 19,309,241 12,089,957 Liabilities and Fund Balance Liabilities: Accounts payable $ 752,959 1,500 39,570 Other accrued liabilities 2,043,353 128,804 40,092 Pass -through payable - - 837,123 Due to other funds (note 3) - - 2,018,781 . Deposits 222,508 - - Deferred revenue 4,843,850 - - Advances from other funds (note 4) - - 20,836,659 Total liabilities 7,862,670 130,304 23,772,225 Fund balance: Reserved for: Encumbrances 453,272 - - Notes and loans - - - Inventory - _ _ Prepaids and other assets 47,594 21,027 - Advances to other funds 24,292,809 - - Land held for resale - Low and moderate income housing Debt service requirements - 3,298,077 6,003,166 Unreserved, reported in General fund 19,315,808 - - Special revenue funds - - - Debt service funds - 15,859,833 (17,685,434) Capital projects funds - - _ Total fund balance 44,109,483 19,178,937 (11,682,268) Total liabilities and fund balance $ 51,972,153 19,309,241 12,089,957 See accompanying notes to the basic financial statements. ' City CDC Non -Major Total Governmental Funds Capital Projects Capital Projects Governmental 2007 2006 17,343,688 23,754,651 15,286,334 89,492,637 74,623,064 7,720,719 1,394,400 - 18,416,362 18,536,609 1 - 13,440 30,709 279,008 291,881 115,645 525,915 5,103,728 7,089,894 - .212,064 146,734 629,992 534,340 41,240,000 31,090 41,271,090 42,391,447 21,835,799 4,614,651 26,450,450 26,858,017 100,000 56,090 - 4,901,113 6,623,437 - - 3,365,077 5,408,697 5,717,593 - - - - 11,471 - 273,583 1,888 344,092 397,907 - - - 29,136,659 30,738,988 - 67,040 - 67,040 2,713,575 25,280,052 88,847,067 24,002,398 221,500,868 216,528,223 1 4,818,892 2,485,799 440,403 46,004 1,976,625 319,437 8,029,949 5,063,489 4,217,139 2,546,833 - - - 837,123 704,629 - - 2,762,284 4,781,065 6,310,415 1,118,908 - 1,341,416 798,939 63,071,840 7,156,201 75,071,891 77,650,545 - 8,300,000 - 29,136,659 30,738,988 7,304,691 72,977,155 12,214,547 124,261,592 122,967,488 15,674,377 303,629 1,471,126 17,902,404 5,061,447 - 3,959 - 3,959 63,571 - - - - 11,471 273,583 1,888 344,092 397,907 = 24,292,809 24,611,809 - 67,040 - 67,040 2,713,575 14,015,398 - 14,015,398 8,880,250 1,394,400 10,695,643 8,403,097 - - - - - 8,293,679 19,315,808 8,293,679 23,982,187 9,981,374 - - - (1,825,601) (2,685,881) 2,300,984 (188,097) ! 2,021,158 4,134,045 12,139,928 1 17,975,361 15,869,912 11,787,851 97,239,276 93,560,735 25,280,052 88,847,067 24,002,398 221,500,868 216,528,223 19 Page Intentionally Left Blank 20 1 1 1 1 1 CITY OF WEST COVINA Governmental Funds Reconciliation of the Balance Sheet of Governmental Funds to the Statement of Net Assets June 30, 2007 Fund balances of governmental funds $ 97,239,276 Amounts reported for governmental activities in the statement of net assets are different because: Capital assets, net of depreciation, have not been included as financial resources in governmental fund activity. Capital assets 344,826,487 Accumulated depreciation (104,623,718) Long term debt and compensated absences that have not been included in the governmental fund activity: Bonds payable (117,725,000) Compensated absences (3,852,457) Other long term liabilities (42,387,835) Accrued interest payable for the current portion of interest due on bonds payable has not been reported in the governmental funds. (1,507,499) Revenues that are measurable but not available are recorded as deferred revenue under the modified accrual basis of accounting. 72,565,496 Internal service funds are used by management to charge the costs of certain activities, such as equipment management, to individual funds. The assets and liabilities of the internal service funds must be added to the statement of net assets 4,159,605 Net assets of governmental activities See accompanying notes to the basic financial statements. $ 248,694,355 21 CITY OF WEST COVINA Statement of Revenues, Expenditures and Changes in Fund Balances - Governmental Funds For the year ended June 30, 2007 Revenues: Taxes Special assessments Licenses and permits Fines and forfeitures Investment income Rental income Revenue from other agencies Charges for services Repayment of notes and .loans Developer fees Gain on sale of.assets Other revenues Total revenues Expenditures: Current: General government Less interfund revenues Public safety Public works Community services Community development Debt service: Principal Interest and fiscal charges Costs of issuance Pass -through payments Developer agreement payments Total expenditures Excess (deficiency) of revenues over (under) expenditures Other financing sources (uses): Transfers in (note 22) Transfers out (note 22) Issuance of long-term debt Payment to refunded bond escrow agent City CDC General Debt Service Debt Service $ 37,020,080 - 20,750,602 1,831,001 154,215 - - 4,679,267 1,092,359 568,013 178,695 - - 1,041,918 - - 2,836,597 497,027 - 221,880 - - 47,963,653 1,589,386 21,318,615 4,614,107 - - (3,069,508) - - 40,049,486 - 4,713,285 - - 1,283,609 - - 590,983 - - 1,954,507 1,590,000 - 2,706,637 6,613,786 - 2,568,343 - 2,783,820 48,181,962 4,661,144 13,555,949 (218,309) (3,071,758) 1,180,000 (5,788,979) 5,465,643 (459,518) Total other financing sources (uses) (4,608,979) 5,006,125 Net change in fund balances (4,827,288) 1,934,367 Fund balances (deficit) at beginning of year 48,936,771 17,244,570 Fund balances (deficit) at end of year $ 44,109,483 19,178,937 See accompanying notes to the basic financial statements. 22 7,762,666 459,518 (7,073,062) (6,613,544) 1,149,122 (12,831,390) (11,682,268) i . Non -Major City CDC Governmental Total Governmental Funds Capital Projects Capital Projects Funds 2007 2006 - 5,030,582 62,801,264 58,464,794 ' - - 3,711,712 3,711,712 3,582,066 - 2,238 1,833,239 1,336,564 - 952,056 1,106,271 1,168,842 1,411,259 1,180,019 613,630 9,544,547 5,807,699 12,600 32,373 223,668 266,516 - 6,449,147 7,491,065 12,301,929 522,611 - 1,589,858 5,446,093 4,764,618 594,633 393,587 988,220 1,355,096 - 1,462,535 1,462,535 7,884 - 00 6,611,788 - 6,611,788 - 800,0319,108 950,372 2,291,360 2,566,819 2,733,870 8,718,148 21,188,090 103,511,762 91,622,827 656,472 - 207,955 5,478,534 4,912,513 ' - - - (3,069,508) (3,054,021) 157 18 1,553,041,602,661 39,996,407 372,275 - 10,537,568 15,623,128 14,269,148 23,270,484 - 6,808,160 31,362,253 11,857,937 . - 5,976,279 553,018 7,120,280 10,385,511 470,000 - 4,014,507 2,050,000 i - 739,016 - 10,059,439 8,766,422 294,764 294,764 - - - 2,568,343 3,199,441 - - - 2,783,820 3,030,517 24,594,152 7,185,295 19,659,719 117,838,221 95,413,875 (21,860,282) 1,532,853 1,528,371 (14,326,459) (3,791,048) 19,134,788 6,754,062 30,053 33,024,064 8,170,365 (4,257,717) (11,295,688) (4,149,100) (33,024,064) (9,170,365) 18,005,000 18,005,000 2,735,000 - - - - (2,727,525) 32,882,071 (4,541,626) (4,119,047) 18,005,000 (992,525) 11,021,789 (3,008,773) (2,590,676) 3,678,541 (4,783,573) I6,953,572 18,878,685 14,378,527 93,560,735 98,344,308 17,975,361 15,869,912 11,787,851 97,239,276 93,560,735 i 23 I CITY OF WEST COVINA Governmental Funds 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, 2007 Net changes in fund balances - total governmental funds $ 3,678,541 Amounts reported for governmental activities in the statement of activities is different because: -Governmental funds report capital outlay as expenditures. However, in the statement of activities, the cost of those assets is allocated over their estimated useful lives as depreciation expense. This is the amount by which capital outlays exceeded depreciation in the current period. Capital outlay 33,322;307. Depreciation expense (8,735,864) Proceeds from the issuance of debt is reported as other financing sources in governmental funds. The issuance of bonds increases liabilities in the statement of net assets, but does not result in an increase in net assets in the statement of activities. (18,00.5,000) Repayment of bond principal is an expenditure in the governmental funds, but the repayment reduces long-term liabilities in the statement of net assets. 4,014,507 Changes in pass -through obligations payable is an expenditure in the governmental funds, but reduces or increases long-term liabilities in the statement of net assets. (2,884,179) The statement of net assets includes accrued interest on long term debt. (32,786) To record as an expense the net change in compensated absences in the .statement of activities. 110,194 Revenues that are measurable but not available are recorded as deferred revenue under the modified accrual basis of accounting. (2,182,731) Internal service funds are used by management to charge the costs of certain activities, such as equipment management, to individual funds. The net revenues (expenses) of the internal service funds is reported with governmental activities. (300,659) Change in net assets of governmental activities $ 8,384,330 See accompanying notes to the basic financial statements.. 24 r CITY OF WEST COVINA General Fund Statement of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual ' For the year ended June 30, 2007 Variance .Prior Budget Positive Year ' Original Final Actual (Negative) Actual Revenues: Taxes $ 36,304,500 36,304,500 37,020,080 715,580 34,380,808 Licenses and permits 1,079,150 1,079,150 1,831,001 751,851 1,329,125 Fines and forfeitures 115,000 115,000 154,215 39,215 108,320 . Investment income 4,350,500 4,731,000 4,679,267 (51,733) 4,358,369 Rental income 157,332 157,332 178,695 21,363 96,888 Revenue from other agencies 935,550 1,077,516 1,041,918 (35,598) 2,855,483 ' Charges for services 2,859,195 2,850,444 2,836,597 (13,847) 3,195,003 Other revenues 110,000 110,000 221,880 111,880 241,268 iTotal 45,911,227 46,424,942 47,963,653 1,538,711 46,565,264 revenues Expenditures: Current: General government 4,506,001 4,690,795 4,614,107 76,688 4,302,189 Less interfund revenues (1,950,000) (3,090,000) (3,069,508) (20,492) (1,881,624) Public safety 39,905,080 40,323,875 40,049,486 274,389 38,810,835 Public works 4,368,682 4,606,889 4,713,285 (106,396) 4,179,688 Community services 1,085,775 1,532,789 1,283,609 249,180 963,118 Community development 605,234 616,271 590,983 25,288 561,520 Total expenditures 48,520,772 48,680,619 48,181,962 498,657 46,935,726 Excess (deficiency) of revenues over (under) expenditures (2,609,545) (2,255,677) (218,309) 2,037,368 (370,462) iOther financing sources (uses): Transfers in 3,550,500 2,100,000 1,180,000 (920,000) 3,021,877 ' Transfers out (888,926) (5,958,926) (5,788,979) 169,947 (1,430,000) Total other financing sources (uses) 2,661,574 (3,858,926) (4,608,979) (750,053) 1,591,877 Net change in fund balances 52,029 (6,114,603) (4,827,288) 1,287,315 1,221,415 Fund balances at beginning of year 48,936,771 48,936,771 48,936,771 - 47,715,356 Fund balances at end of year $ 48,988,800 42,822,168 44,109,483 1,287,315 48,936,771 25 CITY OF WEST COVINA Statement of Net Assets - Proprietary Funds June 30, 2007 Business- Governmental Type Activities Activities Enterprise Internal Totals Assets Fund Service Funds 2007 2006 Current assets: Cash and investments $ 966,627 9,580,830 10,547,457 11,264,362 Receivables:. Accounts 75,238 179,082 254,320 74,091 Interest 7,361 79,347 86,708 61,429 Inventory - 6,740 6,740 27,676 Prepaids and other assets - - - 31,957 Total current assets 1,049,226 9,845,999 10,895,225 11,459,515 Capital assets: Construction in progress - 195,328 195,328 36,275 Other capital assets 1,059,120 3,794,740 4,853,860 4,743,695 Less accumulated depreciation (755,973) (2,848,227) (3,604,200) (3,453,618) Capital assets, net 303,147 1,141,841 1,444,988 1,326,352 Total assets 1352,373 10,987,840 12,340,213 12,785,867 Liabilities and Net Assets Liabilities: Current liabilities: Accounts payable 109,752 103,945 213,697 275,600 Other accrued liabilities 347374 18,358 52,732 45,860 Due to other funds (note 3) - 120,048 120,048 313,022 Unearned revenue - - - 122,300 Current portion of: Claims payable - 2,265,524 2,265,524 1,302,649 Compensated absences payable 33,667 19,404 53,071 41,813 Total current liabilities 177,793 2,527,279 2,705,072 2,101,244 Non -current liabilities: Claims and judgments payable - 4,210,285 4,210,285 4,343,969 Compensated absences payable 149,594 90,671 240,265 216,690 Total non -current liabilities 149,594 4,300,956 4,450,550 4,560,659 Total liabilities 327,387 6,829,235 7,155,622 6,661,903 Net assets: . Invested in capital assets 303,147 1,141,841 1,444,988 1,326,352 Unrestricted 721,839 3,017,764 3,739,603 4,797,612 Total net assets $ 1,024,986 4,159,605 5,184,591 6,123,964 See accompanying notes to the basic financial statements. 26 i 1 1 1 1 1 i 1 1 1 1 1 1 1 1 1 1 1 CITY OF WEST COVINA Statement of Revenues, Expenses and Changes in Fund Net Assets - Proprietary Funds For the year ended June 30, 2007 Business- Governmental Type Activities .Activities - Enterprise Internal Totals Fund Service Funds 2007 2006 Operating revenues: Charges for services $ 1,765,224 4,663,236 6,428,460 7,104,369 Other revenues - 1,689 1,689 6,061 Total operating revenues 1,765,224 4,664,925 6,430,149 7,110,430 Operating expenses: Personnel services 1,442,620 843,790 2,286,410 2,125,579 Cost of sales, services and operations 927,271 1,269,479 2,196,750 1,849,793 Depreciation 100,920 149,858 250,778 293,012 Insurance and claims - 3,089,565 3,089,565 1,837,075 Total operating expenses 2,470,811 5,352,692 7,823,503 6,105,459 Operating income (loss) (705,587) (687,767) (1,393,354) 1,004,971 Nonoperating revenues (expenses): Investment income 66,873 387,108 453,981 289,857 Total nonoperating revenues (expenses) 66,873 387,108. 453,981 289,857 Income (loss) before transfers (638,714) (300,659) (939,373) 1,294,828 Transfers in (note 22) - - - 1,000,000 Change in net assets (638,714) (300,659) (939,373) 2,294,828 Net assets at beginning of year 1,663,700 4,460,264 6,123,964 3,829,136 Net assets at end of year $ 11024,986 4,159,605 5,184,591 6,123,964 See accompanying notes to the basic financial statements. 27 CITY. OF WEST COVINA Statement of Cash Flows -Proprietary Funds For the year ended June 30, 2007 Business- Governmental Type Activities Activities - Enterprise .Internal Totals Fund Service Funds 2007 2006 Cash flows from operating activities: Cash received from customers $ 1,575,186 - 1,575,186 1,868,540 Cash received from user departments - 4,552,434 4,552,434 5,392,463 Cash payments to suppliers for goods and services (848,707) (3,617,427) (4,466,134) (4,253,267) Cash payments to employees for services (1,410,535) (834,170) (2,244,765) (1,488,067) Net cash provided by (used for) operating activities (684,056) 100,837 (583,219) 1,519,669 Cash flows from noncapital financing activities: Cash received from other funds - - - 1,259,230 Cash paid to other funds - (192,974) (192,974) - Net cash provided by (used for) noncapital financing activities - (192,974) (192,074) 1,259,230 Cash flows from capital and related financing activities: Cash paid for acquisition and construction of capital assets (210,361) (159,053) (369,414) - (148,732) Net cash proved by (used for) capital and related financing activities (210,361) (159,053) (369,414) (148,732) Cash flows from investing activities: Interest received on investments 69,656 359,046 428,702 252,484 Net cash provided by (used for) investing activities 69,656 359,046 428,702 252,484 Net increase (decrease) in cash and cash equivalents (824,761) 107,856. (716,905) 2,882,651 Cash and cash equivalents at beginning of year 1,791,388 9,472,974 11,264,362 8,381,711 Cash and cash equivalents at end of year $ 966,627 9,580,830 10,547,457 11,264,362 See accompanying notes to the basic financial statements. 28 CITY OF WEST COVINA Statement of Cash Flows -Proprietary Funds Business- Governmental ' Type Activities Activities - Enterprise Internal Totals Fund Service Funds 2007 2006 Reconciliation of operating income (loss) to net cash provided by (used for) operating activities: Operating income (loss) $ (705,587) (687,767) (1,393,354) 1,004,971 Adjustments to reconcile operating income (loss) to net cash provided by (used for) operating activities: Depreciation 100,920 149,858 250,778 293,012 (Increase) decrease in accounts receivable (67,738) (112,491) (180,229) (3,752) (Increase) decrease in due from other agencies - 20,936 20,936 87,914 (Increase) decrease in prepaids and other assets 31,957 31,957 (9,987) Increase (decrease)in accounts payable 78,564 (140,467) (61,903) (14,752) Increase (decrease) in other accrued liabilities 6,320 552 6,872 (19,835) Increase (decrease) in compensated absences payable 25,765 9,068 34,833 29,493 Increase (decrease) in deferred revenue (122,300) (122,300) 122,300 Increase (decrease) in claims and judgments payable - 829,191 829,191 30,305 Total adjustments 21,531 788,604 810,135 514,698 Net cash provided by (used for) operating activities $ (684,056) 100,837 (583,219) 1,519,669 i p There were no noncash financing or investing activities for the year ended June 30, 2007. O 29 0 CITY OF WEST COVINA Statement of Fiduciary Assets and Liabilities June 30, 2007 Assets Cash and investments (note 2) Accounts receivable Total assets Liabilities and Net Assets Liabilities: Accounts payable Deposits Total liabilities Special Deposits Fund 2007 2006 $ 1,027,198 199,046 918 928,692 $ 1,028,116 1,127,738 $ 68,100 325,087 960,016 802,651 1,028,116 1,127,738, See accompanying notes to the basic financial statements. 30 CITY OF WEST COVINA Notes to the Basic Financial Statements Year ended June 30, 2007 (1) Significant Accounting Summary of Sig, ;; Policies The basic financial statements of the City of West Covina, California (City) have been prepared in conformity with generally accepted accounting principles (GAAP) as applied to government units. The Governmental Accounting Standards Board (GASB) is the accepted standard -setting body for establishing governmental accounting and financial reporting principles. The more significant of the City's accounting policies are described below. (a) Reporting Entity The City of West Covina was incorporated on February 23, 1923 under the general laws of the State of California. The accompanying financial statements present the City of West Covina and its component units, entities for which the City is considered to be financially accountable. The City is considered to be financially accountable for an organization if the City appoints a voting majority of that organization's governing body and the City is able to impose its will on. that organization or there is a potential for that organization to provide specific financial benefits to or impose specific financial burdens on the City. The City is also considered to be financially accountable for an organization if that organization is fiscally dependent .(i.e., it is unable to adopt its budget, levy taxes, set rates or charges, or issue bonded debt without approval from the City). In certain cases, other organizations are included as component units if the nature and significance of their relationship with the City are such that their exclusion would cause the City's financial statements to be misleading or incomplete. Because each component unit meets the above -mentioned criteria, included within the financial reporting entity of the City of West Covina are the Community Development Commission of the City of West Covina, the West Covina Public Financing Authority, the Parking Authority of the City of West Covina and the West Covina Community Services Foundation, Inc. .A brief description of each component unit follows: Community Development Commission of the City of West Covina The Community Development Commission ("Commission"), formerly the Redevelopment Agency of the City of West Covina, was established on August 9, 1971. The primary purpose of the Commission is to eliminate blighted areas by encouraging development of residential, commercial, industrial, recreational and public facilities. The City Council appoints the Commission director and has full accountability for the Commission's fiscal matters. The Commission's financial data and transactions are included within, the debt service fund type and the capital projects fund type. Revenues of :the Commission consist primarily of property tax allocations on the incremental increase of property values in the redevelopment area and interest income. 31 CITY OF WEST COVINA I Notes to the Basic Financial Statements Year ended June 30, 2007 (Continued) , (1) Summary of Significant Accounting Policies (Continued) West Covina Public Financing Authority The West Covina Public Financing Authority ("Authority") was created by a joint exercise of joint powers agreement between the City of West Covina and the Community Development Commission of the City of West Covina on June 1, 1990. The purpose of the Authority is to provide, through the issuance of debt, financing necessary for various capital improvements. The Authority is administered by the Board who are the members of the City Council. The Authority's sole source of income is installment sale, loan and lease payments received from the City and Community Development Commission which are used to meet the debt service requirements on debt issues. The Authority is blended into the debt service funds of the City. Parking Authority of the City of West Covina The Parking Authority of the City of West Covina (Parking Authority) was formed under the provision of the government code of the State of California for the purpose of financing and constructing parking facilities for lease to the ,City of West Covina. The City Council acts as the governing body of the Parking Authority and is able to impose its will on the Parking Authority. It is a component unit of the City, and the financial statements of the Parking Authority .are included within the financial statements of the City, using the blended method. The Parking Authority has been inactive since 1999. West Covina Community Services Foundation, Inc. The West Covina Community Services Foundation, Inc. (Foundation) was established on July 26, 2005 as a nonprofit public benefit corporation. It was organized and operates exclusively for charitable purposes within the meaning of Section 501(c )(3) of the Internal Revenue Code. The Foundation is administered by the Board of Directors who are the members of the City Council. The Foundation is blended into the special revenue funds of the City. Since'the City Council serves as the governing board for these component units, all -of the City's component units are considered to be blended component units. Blended component units, although legally separate entities, are in substance, part of the City's operations - and so data from these units are reported with the interfund data' of the primary, government. The Community Development Commission of the City of West Covina issues separate component unit financial statements. Upon their completion-, financial statements of the component unit can be obtained at City Hall, 1444 W. Garvey Avenue, West Covina, California 91790. 32 CITY OF WEST COVINA Notes to the Basic Financial Statements Year ended June, 30, 2007 ' (Continued) (1) Summary of Significant Accounting Policies (Continued) (b) Basis of Accounting and Measurement Focus The basic financial statements of the City are composed of the following: ' • Government -wide financial statements • Fund financial statements Notes to the basic financial statements Financial reporting is based upon all GASB pronouncements, as well as the FASB Statements and Interpretations, APB Opinions, and Accounting Research Bulletins that were issued on or before November 30, 1989 that do not conflict with or contradict GASB pronouncements. FASB pronouncements issued after November 30, 1989 are not followed in the preparation of the accompanying financial statements. Government -wide Financial Statements Government -wide financial statements display information about the reporting government as a whole, except for its fiduciary activities. These statements include separate columns for the governmental and business -type activities of the primary government (including its blended component units). Eliminations have been made in the Statement of Activities so that certain allocated expenses are recorded only once (by the function to which they were allocated). However, general government expenses have not been allocated as indirect expenses to the various functions of the City. Interfund services provided and used are not eliminated in the process of consolidation. ' Government -wide financial statements are presented using the economic resources measurement focus and the accrual basis of accounting. Under the economic resources measurement focus, all (both current and long-term) ' economic resources and obligations of the reporting government are reported in the government -wide financial statements. Basis of accounting refers to when revenues and expenses are recognized in the accounts and reported in the financial statements. Under the accrual basis of accounting, revenues, expenses, gains, losses, assets, and liabilities resulting from exchange and exchange -like transactions are recognized when the exchange takes place. Revenues, expenses, gains, losses, assets and liabilities resulting from nonexchange transaction are recognized in accordance with the requirements of GASB Statement No. 33. Program revenues include 1) charges to customers or applicants who purchase, use, or directly benefit from goods, services, or privileges provided by a given function and 2) grants and contributions that are restricted to meeting the operational or capital requirements of a particular function. Program revenues are netted with program expenses in the statement of activities to present the net cost of each program. Taxes and other items not included among program revenues are reported instead as general revenues. 33 CITY OF WEST COVINA ' Notes to the Basic Financial Statements Year ended June 30, 2007 (Continued) (1) SummM of Significant Accounting Policies (Continued) Amounts paid to acquire capital assets are capitalized as assets in the government - wide financial statements, rather than reported as an expenditure. Proceeds of Jong -term debt are recorded as a liability . in the government -wide financial statements, rather than as an other financing source. Amounts paid to reduce long- term indebtedness of the reporting government are reported as a reduction of the related liability, rather than as an expenditure. Fund Financial Statements The underlying accounting system of the City is organized and operated on the basis of separate funds, each of which is considered to be a separate accounting entity. The operations of each fund are accounted for with a separate set of self - balancing accounts that, comprise its assets, liabilities, fund equity, revenues and expenditures or expenses, as appropriate. Governmental resources are allocated to and accounted for in individual funds based upon the purposes for which they are to be spent and the means by which spending activities are controlled. Fund financial statements for the primary government's governmental, proprietary, and fiduciary funds are presented after the government -wide financial statements. These statements display information about the major funds individually and norimajor funds in the aggregate for governmental and enterprise funds. Fiduciary statements include financial information for fiduciary funds and similar component units. Fiduciary -funds of the City primarily represent assets held by the City in a custodial capacity for other individuals or organizations. Governmental Funds In the fund financial statements, governmental funds are presented using the ' modified -accrual basis of accounting. Their revenues are recognized when they become measurable and available as net current assets. Measurable means that ' the amounts can be estimated, or otherwise determined. Available means that the amounts were collected during the reporting period or soon enough thereafter to be available to finance the expenditures accrued for the reporting period. Revenue recognition is subject .to the measurable and available criteria for the governmental funds in the fund financial statements. Significant revenues subject to the criteria include taxes, licenses and permits, and intergovernmental revenues. Exchange transactions are recognized as revenues in the period in j which they are earned (i.e., the related goods or services are provided). Locally imposed derived tax revenues are recognized as revenues in the period in which the underlying exchange transaction upon which they. are based takes place. Imposed nonexchange transactions are recognized as revenues in the period for which they were imposed. If the period of use is not specified, they are recognized as revenues when an enforceable legal claim to the revenues arises or when they are received, whichever occurs first. Government -mandated and voluntary 34 CITY OF WEST COVINA Notes to the Basic Financial Statements Year ended June 30, 2007 (Continued) (1) Summary of Significant Accounting Policies (Continued) ' nonexchange transactions are recognized as revenues when all applicable eligibility requirements have been met. rIn the fund financial statements, governmental funds are presented using the current financial resources measurement focus. This means that only current assets and current .liabilities are generally included on their balance sheets. The reported fund balance (net current assets) is considered to be a measure of "available spendable resources." Governmental fund operating statements present increases (revenues and other financing sources) and decreases (expenditures and other financing uses) in net current assets. Accordingly, they are said to present a summary of sources and uses of "available spendable resources" during a period.. Non -current portions of long-term receivables due to governmental funds are ' reported on their balance sheets in spite of their spending measurement focus. Special reporting treatments are used to indicate, however, that they should not be considered "available spendable resources," since they do not represent net current assets. Revenues, expenses, assets, and liabilities resulting from nonexchange ' transactions' are recognized in accordance with the requirements of GASB Statement No. 33 which requires that local governments defer grant revenue that is not received within 60 days after the fiscal year ends to meet the "available" criteria of revenue recognition. In the past, the industry practice for grants was to recognize revenue in the fiscal year in which the related expense was incurred. Therefore recognition of governmental fund type revenue represented by non- current receivables are deferred until they become current receivables. Non- current portions of other long-term receivables are offset by fund balance reserve accounts. ' Sales taxes, property taxes, franchise taxes, revenue from other agencies, rental income, occupancy taxes and interest associated with the current fiscal period are all considered to be susceptible to accrual and so have been recognized as revenues of the current fiscal period to the extent normally collected within the availability period. Other revenue items are considered to be measurable and available where cash is received by the government. The availability period for these revenues is 60 days, with the exception of a seven month availability period for sales tax and motor vehicle in -lieu revenues. Amounts expended to acquire capital assets are recorded as expenditures in the year that resources were expended, rather than as fund assets. The proceeds of long-term debt are recorded as other financing sources rather than as a fund liability. Amounts paid to reduce long-term indebtedness are reported as fund expenditures. 35 CITY OF WEST COVINA Notes to the Basic Financial Statements Year ended June 30, 2007 (Continued) (1) Summary of Significant Accounting Policies (Continued) When both restricted and unrestricted resources are. combined in a fund, expenses are considered to be paid first from * restricted . resources, and then from unrestricted resources. Proprietary and Fiduciary Funds The City's enterprise and internal service funds are proprietary funds. In the fund financial statements, the proprietary funds and fiduciary funds are presented using the accrual basis of accounting. Revenues are recognized when they are earned and expenses are recognized when the related goods or services are delivered. In the fund financial statements, proprietary funds are,presented using the economic resources measurement focus. This means that all assets ' and all liabilities (whether current or noncurrent) .associated with their activity are included on their balance sheets. Proprietary fund type operating statements present increases (revenues) and decreases (expenses) in total net assets. Proprietary fund operating revenues, such as charges for services, result from exchange transactions associated with the principal activity of the fund. Exchange transactions are those in which each party receives and gives up essentially equal values. Non -operating revenues, such as subsidies, taxes, and investment earnings result from nonexchange transactions or ancillary activities. Amounts paid to acquire capital assets are capitalized as assets in the enterprise fund financial statements, rather than reported as an expenditure. Proceeds of long-term debt are recorded as a liability in the enterprise fund financial statements, rather than as an other financing source. Amounts paid to reduce long-term indebtedness of the enterprise fund are reported as a reduction of the related liability, rather than as an expenditure. Agency funds are custodial in nature (assets equal liabilities) and do not involve the recording of City revenues and expenses. (c) Fund Classifications The City reports the following major governmental funds: General Fund This is the primary operating fund of the City. It accounts for all activities of the general government, except those required to be accounted for in another fund. Debt Service Fund This fund is used to account for the payment of principal, interest and related costs on the City's long-term debt issues. Community Development Commission Debt Service Fund This fund is used to account for the accumulation of resources for, and the payment of, Community Development Commission long-term debt principal, interest and related costs. H I 1 L I 36 11 CITY OF WEST COVINA Notes to the Basic Financial Statements Year ended June 30, 2007 (Continued) �1) Summary_of Significant Accounting Policies (Continued) 1 Capital Protects Fund This fund accounts for all capital expenditures not being accounted for in other capital projects funds or other fund types. rCommunity Development Commission Capital Projects Fund This capital projects fund is used to account for the financial resources to be used for property acquisition, improvement and rehabilitation within the project areas authorized under provisions of the California Redevelopment Law. Additionally, the City reports the following fund types: Enterprise Fund This fund is used to account for operations that are financed and operated in a manner similar to private business enterprises. The City's enterprise fund is used to account for computer services provided by the Police Department to other public agencies. Internal Service Funds These funds are used to account for vehicle and equipment maintenance and replacement and for the City's self-insurance programs. Departments of the City are charged for the services provided or benefits received from these funds. Agency Fund This fund is used to account for special deposits received by the City. (d) Budgets and Budgetary_Data The annual budget adopted by the City Council provides for the general operation of the City. The annual budget is adopted in summary form by the City Council in June of each year for the General, special revenue, debt service and capital projects funds. The resolution sets a combined appropriation of the funds for the operation of the City. The City Manager is authorized to transfer budgeted amounts between departments to assure adequate and proper standards of service. Budgetary ' revisions, including supplemental appropriations which increase appropriations in individual funds, must be approved by the City Council. The budgetary level of control is at the fund level. The budgeted figures used in the financial statements are the final amended amounts, which do not vary significantly from the original adopted budget. The budget is formally integrated into the accounting system and employed as a management control device during the year for the General Fund, special revenue funds, debt service and capital projects funds. 37 1 CITY OF WEST COVINA Notes to the Basic Financial Statements Year ended June 30, 2007 (Continued) (1) Summary of Significant Accounting Policies (Continued) Budgets for governmental fund types are adopted on a basis consistent with generally accepted accounting principles.- Operating appropriations lapse at the end of the fiscal year. Capital projects funds are appropriated on a project basis and appropriations are funded by the council to continue until the specific projects are completed. (e) Encumbrances Encumbrance accounting, under which purchase orders, contracts and other commitments for the expenditure of funds are recorded in order to reserve that portion of the fund balance, is employed in the governmental funds. Encumbrances are reported as reservations of fund balances in the fund financial statements since they do not constitute expenditures or liabilities. Encumbrances outstanding at year-end are re -appropriated in the following year. (f) Cash and Investments Investments are reported in the accompanying balance sheet at fair value; except for certain certificates of deposit and investment contracts that are reported at cost because they are not transferable and they have terms that are not affected by changes in market interest rates. Changes in fair value that occur during a fiscal year are recognized as investment income reported for that fiscal year. Investment income includes interest earnings, changes in fair value, and any gains or losses realized upon the liquidation or sale of investments. The City pools cash and investments of all funds, except for assets held by fiscal agents. Each fund's share in this pool is displayed in the accompanying financial statements as cash and investments. Investment income earned by the pooled investments is allocated to the various funds based on each Rind's average cash and investment balance. (g) Cash Equivalents For purposes of the statement of cash flows, cash equivalents are defined as short- term, highly liquid investments that are both readily convertible to known amounts of cash or so near. their maturity that they present .insignificant risk of changes in value because of changes in interest rates, and have an original maturity date of 3 months or less. Cash equivalents represent the proprietary Rinds' share in the cash and investment pool of the City of West Covina. 38 ICITY OF WEST COVINA Notes to the Basic Financial Statements ' Year ended June 30, 2007 I (Continued) (1) Summary of Significant Accounting Policies (Continued) (h) Inventory Inventory is stated at average cost. Physical counts of inventory are taken on a cyclical basis during each fiscal year with perpetual records adjusted to actual at that time. The City uses the consumption method of accounting for inventory. I(i) Land Held for Resale 1 1 Land held for resale represents land,. structures, and their related improvements that were acquired for resale in accordance with the objective of the Redevelopment Project. Land held for resale is valued at the lower of cost or the sales price per contract with the developer. A portion of fund balance is reserved for land held for resale in the fund financial statements to indicate that a portion of fund balance is not available for future expenditures. (j) Property Taxes Under California law, property taxes are assessed and collected by the counties up to 1 % 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 of West Covina accrues only those taxes which are received within 60 days after year end. The property tax calendar is as follows: Lien Date: January I Levy Date: July 1 Due Date: First Installment - November 1 Second Installment - February 1 Delinquent Date: First Installment - December 11 Second Installment - April 11 Taxes are collected by, Los Angeles County and are remitted to the City periodically. Dates and percentages are as follows: December 20 40% Advance January 20 10% Advance February 20 Collection No. 1 April 20 35% Advance May 20 Collection No. 2 July 20 Collection No. 3 39 CITY OF WEST COVINA 11 Notes to the Basic Financial Statements. Year ended June 30, 2007 (Continued) . (1) Summary of Significant Accounting Policies (Continued) (k) Claims and Judgments The City records a liability for litigation, judgments, and claims when it is probable that an asset has been impaired or a liability (including claims incurred but not reported) has been incurred prior to year end and the probable amount, of loss (net of any insurance coverage) can be reasonably estimated. This liability is recorded in the internal service fund that accounts for the City's self insurance activities. (1) Advances to Other Funds Noncurrent portions of long-term interfund loan receivables are reported as advances and are offset equally by a fund balance reserve account in fund financial statements which indicates that they do not constitute expendable available financial resources and therefore are not available for appropriation. (m) Compensated Absences In accordance with GASB Statement. No. 16, a liability is recorded for unused vacation and similar compensatory leave . balances since the. employees' " entitlement to these balances are attributable to services already rendered and it is probable -that virtually all of these balances will be liquidated by either paid time off or payments upon termination or retirement. Under GASB Statement No. 16, a liability is recorded for unused sick leave balances only to the extent that it is probable that the unused balances will result in termination payments. This is estimated by including in the liability the unused balances of employees currently entitled to receive termination payment, as well as those who are expected to become eligible to receive termination benefits as a result of continuing their employment with the City. Other amounts of unused sick leave are excluded from the liability since their payment is contingent solely upon the occurrence of a future event (illness) which is outside the control of the City and the employee. The General Fund typically has been used to liquidate the liability for compensated absences. (n) Capital Assets Capital assets greater than $5,000 and infrastructure greater than $100,000 are capitalized and recorded at cost or at an estimated fair .value of the assets at the time of acquisition where complete historical records do not exist. Contributed capital assets are valued at their estimated fair market value at the date of the contribution. The costs of normal maintenance and repairs that do not add to the value of the asset or materially extend asset lives are not capitalized. I 40 CITY OF WEST COVINA Notes to the Basic Financial Statements ' Year ended June 30, 2007 ' (Continued) �1) Summary of Significant Accounting Policies (Continued) Capital assets are public domain (infrastructure) consisting of certain improvements including roads,, bridges, curbs and gutters, streets and sidewalks, medians, sewer and storm drains. ' Depreciation has been provided using the straight-line method over the estimated Depreci p g g useful life of the asset in the government -wide financial statements and in the fund financial statements of the proprietary funds. Interest is capitalized on proprietary fund assets acquired with tax-exempt debt. The amount of interest to be capitalized is calculated by offsetting interest expense incurred from the date of the borrowing until completion of the project with interest earned on invested proceeds over the same period. The following schedule summarizes capital asset useful lives: Governmental Activities: Infrastructure — pavement 25 years Infrastructure — other 20-75 years Buildings 20-50 years ' Improvements other than buildings 20-50 years Equipment and vehicles 5-25 years Business -type Activities: Equipment and vehicles 5-25 years (o) Prior Year Data Selected information included in the accompanying financial statements regarding the prior year has been presented for comparison purposes only and does not . represent a complete presentation in accordance with generally accepted accounting principles. Certain minor reclassifications of prior year data have been made in order to enhance their comparability with current year figures. ' (2) Cash and Investments Cash and investments held by the City at June 30, 2007 are reported in the accompanying financial statements as follows: Statement of Net Assets: Cash and investments $100,040,094 tCash and investments with fiscal agent 18,416,362 41 CITY OF WEST COVINA Notes to the Basic Financial Statements Year ended June 30, 2007 (Continued) (2) Cash and Investments (Continued) Fiduciary Funds: Statement of Assets and Liabilities: Cash and investments Total cash and investments Cash and investments as of June 30, 2007 consists of.the following: Cash on hand Deposits with financial institutions Investments Total cash and investments 1,027,198 119,483,654 $ 7,050 2,903,887 116,572,727 $119,483,654 Investments Authorized by the California Government Code and the Entity's Investment Policy The table below identifies the investment types that are authorized for the City by the California Government Code and the City's investment policy. The table also identifies certain provisions of the California Government Code (or the City's investment policy, if more restrictive). that addresses interest rate risk and concentration of credit risk. This table does not address investments of debt proceeds held by bond trustees that are governed by the provisions of debt agreements of the City, rather than the general provisions of the California Government Code or the City's investment policy. A I . I Investment Types Authorized By Investment *Maximum *Maximum Percentage *Maximum Investment , Authorized by State Law Policy Maturi Of Portfolio In One Issuer Local Agency Bonds No N/A None None ' U.S. Treasury Obligations Yes 5 years None None U.S. Agency Securities Yes 5 years None None Banker's Acceptances Yes 180 days 40% 30% Commercial Paper Yes 270 days 40% 10% Negotiable Certificates of Deposit Yes 5 years 30% None Repurchase Agreements Yes 100 days 20% None , Reverse Repurchase Agreements Yes 92 days 20% None Medium -Term Notes Yes 5 years 30% None Mutual Funds No N/A None None Time Certificates of Deposit Yes 5 years 25% None Money Market Mutual Funds Yes N/A 20% 10% 42 i CITY OF WEST COVINA 1 iJ 1 it Notes to the Basic Financial Statements Year ended June 30, 2007 (2) Cash and Investments (Continued) Investment Types Authorized by State Law Mortgage Pass -Through Securities County Pooled Investment Funds Local Agency Investment Fund (LAIF) JPA Pools (other investment pools) (Continued) Authorized *Maximum *Maximum By Investment *Maximum Percentage Investment Polic Maturity Of Portfolio In One Issuer Yes 5 years 20% None Yes N/A None None Yes N/A None None No N/A None None * Based on state law requirements or investment policy requirements, whichever is more restrictive. Investments Authorized by Debt Agreements Investment of debt proceeds held by bond trustees are governed by provisions of the debt agreements, rather than the general provisions of the California Government Code or the City's investment policy. The table below identifies the investment types that are authorized for investments held by bond trustees. The table also identifies certain provisions of these debt agreements that address interest rate risk and concentration of credit risk. Authorized Maximum Investment Tvne Maturi U.S. Treasury Obligations None U.S. Agency Securities None Certificates of Deposit None Banker's Acceptances 360-365 days Commercial Paper 365 days Money Market Mutual Funds N/A Repurchase Agreements 30 days- 6 months Local Agency Investmeni Fund None Investment Agreements None Disclosures Relating to Interest Rate Risk Interest rate risk is the risk that changes in market interest rates will adversely affect the fair value of an investment. Generally, the longer the maturity of an investment, the greater the sensitivity of its fair value to changes in market interest rates. In accordance with the City's Investment Policy, the City manages its exposure to interest rate risks by purchasing a combination of shorter term and longer term investments and by timing cash flows from maturities so that a portion of the portfolio is maturing or coming close to maturity evenly over time as necessary to provide the cash flow and liquidity needed for operations. 43 CITY OF WEST COVINA Notes to the Basic Financial Statements Year ended June 30, 2007 (Continued) (2) Cash and Investments (Continued) Information about the sensitivity of the fair values of the City's investments (including investments held by bond trustees) to market interest rate fluctuations is provided by the following table that shows the distribution of the City's investments by maturity: Remaining Maturity Carrying Less Than 1 Investment Type Amount mar 1 to 2 years 2 to 3 years Over 3 years Local Agency Investment Fund $59,872,894 59,872,894 - - - Los Angeles County Investment Pool 8,180,498 8,180,498 - - - Federal Agency Securities 30,102,972 4,975,310 9,905,950 - 15,221,712 Held by fiscal agent: Local Agency Investment Fund 141,363 141,363 - - - Money market funds 9,810,058 9,810,058 - - - Federal Agency securities 1,512,815 1,512,815 - - - Investment agreements 6,952,127 - - - 6,952,127 116.572,727 4� 9,905.950 - 22 173 83 Disclosures Relatine to Credit Risk Generally, credit risk is the risk that an issuer of an investment will not fulfill its obligation to the holder of the investment. This is measured by the assignment of a rating by a nationally recognized statistical rating organization. Presented below is the minimum rating required by (where applicable) the California Government Code, the City's investment policy, or debt agreements, and the actual rating as of year end for each investment type. 44 1 1 1 1 1 1 t 1 1 1 1 1 1 1 1 CITY OF WEST COVINA Notes to the Basic Financial Statements Year ended June 30, 2007 (Continued) (2) Cash and Investments (Continued) Investment Type: Local Agency Investment Fund Los Angeles County Investment Pool Federal Agency Securities Held by fiscal agent: Local Agency Investment Fund Money Market .Federal Agency Securities Investment agreement Minimum Legal Carrying Rating as of Year End Rating Amount AAA Not Rated N/A 59,872,894 - 59,872,894 N/A 8,180,498 - N/A 30,102,972 30,102,972 8,180,498 N/A 141,363 - 141,363 A 9,810,058 9,810,058 - A 1,512,815 1,512,815 A 6,952,127 6,952,127 - 116.572.72 48.377,972 68.194,755 Concentration of Credit Risk The investment policy of the City contains no limitations on the amount that can be invested in any one issuer beyond that stipulated by the California Government Code. Investments in any one issuer (other than U.S. Treasury securities, mutual funds, and external investment pools) that represent 5% or more of total City investments are as follows: Issuer Investment Type FNMA Federal agency securities FHLB Federal agency securities FHLMC Federal agency securities 45 Reported Amount $6,894,680 9,961,570 13,246,722 CITY OF WEST COVINA Notes to the Basic Financial Statements , Year ended June 30, 2007 (Continued) (2) Cash and Investments (Continued) Investments in any one issuer that represent 5% or more of total investments by the reporting unit (primary government, discretely presented component unit, governmental activities, major fund, nonmajor funds in the aggregate, etc.) are as follows. Issuer City Debt Service Fund: FNMA FHLMC Investment Type Federal agency securities Federal agency securities CDC Debt Service Fund: AIG Investment agreement Westdeutsche Landesbank Investment agreement Custodial Credit Risk Reported Amount $ 3,964,680 11,257,032 996,534 5,002,670 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's 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% 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% of the secured public deposits. �I I 1 46 rCITY OF WEST COVINA Notes to the Basic Financial Statements Year ended June 30, 2007 ' (Continued) (2) Cash and Investments (Continued) 1 Investments held by bond trustee are selected under the terms of the applicable trust agreement. The trustee acquires the investment and holds the investment on behalf of the ' reporting government. Investment in State Investment Pool The City is a voluntary participant in the Local Agency Investment Fund (LAIF) that is regulated by the California Government Code under the oversight of the Treasurer of the State of California. ' The fair value of the City's investment in this pool is reported in the accompanying financial statements at amounts based upon the City's pro-rata share of the fair value provided by LAIF for the entire LAIF 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. (3) Due From and To Other Funds ' Interfund receivable and payable balances at June 30, 2007 are as follows: Due from Other Funds Due to Other Funds Amount General Fund CDC Debt Service Fund $ 1,993,781 (a) Internal Service Funds 120,048 1 Non -Major Governmental Funds 2,631,194 (b) Total General Fund 4,745,023 CDC Capital Projects Fund CDC Debt Service Fund 25,000 Non -Major Governmental Funds 31,090 Total CDC 56,090 1 city Capital Projects Fund Non -Major Governmental Funds 100,000 (c) ' 4.90L113 (a) The largest component of these interfund balances is to accrue sales tax reimbursement owed to the General Fund. (b) The majority of these interfund balances is as a result of short-term borrowings to ' cover deficit cash in the Gas Tax Fund, the Traffic Safety Fund, the Transportation Development Fund, the Grants Fund, the Park Fund, the Internal Service Funds and the CDC at June 30, 2007. (c) This interfund balance is attributable to costs of a bronze sculpture at the sportsplex project. 47 i CITY OF WEST COVINA Notes to the Basic Financial Statements Year ended June 30, 2007 (Continued) (4) Interfund Advances The City has authorized several interfund advances to be used for the operations of the funds receiving the advances. At June 3012007 the outstanding advances are: Advances to Other Funds Advances from Other Funds Amount General Fund CDC Debt Service Fund $20,836,659 (a) CDC Capital Projects Fund 8,300,000 (b) $29,136,659 (a) The' General Fund has made the following advances to the Community Development Commission: Administrative and construction costs $13,105,508 Capital project costs 2,332,258 Revolving credit 5,398,893 Total $20.836.659 The outstanding advances are comprised of original principal of $18,890,497 and accumulated interest of $1,946,162 that has been included in deferred revenue in the fund financial statements. The advances accrue interest at 10.5% per annum and will be paid off in 2018. (b) In July 2000, the General Fund extended a $5,600,000 line of credit to the Community Development Commission. The Commission withdrew $600,000 in fiscal year ended June 30, 2003 and the remaining $5,000,000 in fiscal year ended June 30, 2004. The line of credit accrues interest at the LAIF interest rate plus 2% and has no stipulated repayment date. In June 2007, the General Fund advanced $2,000,000 to the Community Development Commission Capital Projects Fund. The advance accrues interest at 6.25% per annum and is due in June 2008. In June 2007, the City advanced $700,000 to the CDC Capital Projects Fund. The advance accrues interest at 6.25% and is due June 2008. (5) Notes and Loans Receivable As of June 30, 2007, the following notes and loans receivable were outstanding: Housing rehabilitation $ 5,605,134 First time home buyers 1,117,981 .Housing preservation program 1,449,087 Lark Ellen Towers 5,677,349 Executive Lodge Apartments 6,432,385 West Covina Senior Villas 3,541,667 Clippinger note 983,424 Other Community Development Commission loans 1,643,423 Total 26,450,450 48 ' CITY OF WEST COVINA Notes to the Basic Financial Statements Year ended June 30, 2007 (Continued) ' (5) Notes and Loans Receivable (Continued) The City has made several housing rehabilitation loans totaling $5,605,134 to qualified applicants using Community Development Block Grants and housing set -aside funds. ' These loans bear interest up to 5% and are repaid when title to the property changes. The Commission has made loans to first-time home buyers totaling $1,117,981. Loans are secured by second trust deeds and bear interest at 5%. Principal and interest are deferred for five years and are due monthly in years 6 through 30. There were 52 individual loans outstanding at June 30, 2007 ranging from $5,000 to $25,000. The Commission has also made housing preservation loans totaling $1,449,087 to qualified applicants using housing set -aside funds. Principal and interest are deferred for ten years; after the tenth year loans bear interest at 5%. Loans are repaid after the tenth ' year or when title to the property changes. There were 170 individual loans outstanding at June 30, 2007 ranging from $5,000 to $10,050. In May 1997, the Commission loaned $4,270,000 to Lark Ellen Towers. The loan is secured by a deed of trust. The loan accrues interest at 3% per annum and requires annual payments equal to the maximum of $35,000 or 50% of net profits earned by the project. The outstanding principal and accrued interest at June 30, 2007 is $5,677,349. In April 1998, the Commission loaned $5,622,300 to Executive Lodge Apartments Limited Partnership (Promenade Apartments project). The loan is secured by a deed of trust. The loan accrues interest at 3% per annum. The outstanding principal and accrued interest at June 30, 2007 is $6,432,385. In May 2002, the Commission loaned $4,250,000 to West Covina Senior Villas, LLC. The loan is secured by a deed of trust. The loan does not accrue interest. The note requires annual payments of $141,667 through May 2032 that are forgiven by the City unless the borrower defaults on the agreement. The outstanding principal at June 30, 2007 is $3,541,667. The Commission provided a loan to Clippinger that bears interest of 7% and is ' collateralized by a promissory note and sales tax guarantees. The outstanding principal and accrued interest at June 30, 2007 is $983,424. (6) Assessments Receivable As of June 30, 2007, the following assessments receivable were outstanding: CDC Capital Projects Fund: 1996 Special Tax Bonds $41,240,000 Non -Major Governmental Fund: Special Assessments Fund 31,090 Total $41,271,090 49 CITY OF WEST COVINA Notes to the Basic Financial Statements Year ended June 30, 2007. (Continued) 6) Assessments Receivable (Continued In connection with the Commission's issuance -of its $51,220,000 1996 Special Tax Bonds, the Commission has recorded $41,240,000 in assessments receivable and deferred revenue. The assessment is an annual special tax levied on the community facilities district in amount sufficient to ensure payment of the debt service on the bonds. This special tax supplements sales and property tax increment revenues that also support the debt service on the bonds. Theseassessment and corresponding deferred revenue will be reduced as the principal on the bonds mature. During fiscal year ended June 30, 1994, the City established the West Covina Auto Plaza Business Improvement District in order to levy assessments within the Auto Plaza area for the purpose of constructing and maintaining an electronic reader board. The City annually assesses the dealerships within the district for the annual maintenance and capital costs. The $31,090 in assessments receivable and deferred revenue is the amount of the annual assessment due at June 30, 2007. (7) Land Held for Resale Land held for resale is comprised of the following at June 30, 2007: BKK Project 67,040 Total land held for resale $67,040 (8) Capital Assets Capital asset activity for the year ended June 30, 2007 is as follows: Balance at Balance at June 30, 2006 Additions Deletions June 30, 2007 Governmental activities: Buildings $12,250,161 - - 12,250,161 Improvements other than buildings 32,074,081 1,427,489 - 33,501,570 Equipment and vehicles 16,077,203 4,928,474 (3,904,413) 17,101,264 Infrastructure — Pavement 160,184,756 2,338,135 - 162,522,891 Infrastructure - Other 17,095,934 723,080 - 11,819,014 Total cost of depreciable assets 237,682,135 9,417,178 (3,904,413) 243,194,900 Less accumulated depreciation: ` Buildings (3,877,282) - - (3,877,282) Improvements other than buildings (14,067,507) (820,637) - (14,888,144) Equipment and vehicles (9,330,782) (1,392,528) 100,196 (10,623,114) Infrastructure — Pavement (57,954,685) (6,475,691) - (64,350,332) 50 1 1 1 i 1 1 1 1 1 1 1 1 1 1 1 1 CITY OF WEST COVINA Notes to the Basic Financial Statements Year ended June 30, 2007 (8) Capital Assets (Continued) Infrastructure — Other Total accumulated depreciation Net depreciable assets Capital assets not depreciated: Land Rights of way Construction in progress Capital assets, net (Continued) Balance at Balance at June 30, 2006 Additions Deletions June 30, 2007 (13,456,163) (309,829) - (13,733,073) (98,686,412) (8,998,685) 100,196 (107,471,945) 138,995,716 531,456 (3,804,217) 135,722,955 54,572,073 - - 54,572,073 14,376,498 - - 14,376,498 8,804,685 32,877,982 (5,009,583) 36,673,084 216.748,972 13,409,418 (8.813.8001 241.344,610 Depreciation expense was charged in the following functions in the Statement of Activities: General government Public safety Public works Community services Community development Balance at June 30, 2006 Business -type activities: Equipment and machinery 848,759 $ (59,978) (1,029,381) (7,421,630) (255,458) (232,238) (8.998.6851 Balance at Additions Deletions June 30, 2007 210,361 - 1,059,120 Less accumulated depreciation: (655,053) (100,920) - (755,973) Capital assets, net 193,706 109,441 - 303,147 Depreciation expense was charged in the following programs of the primary government: Computer service 2 920 j 51 CITY OF WEST COVINA Notes to the Basic Financial Statements Year ended June 30, 2007 (Continued) (9) Long -Term Liabilities Changes in long-term liabilities for the year ended June 30, 2007 are as follows: Balance at Balance at Due within Due in more Governmental activities June 30, 2006 Additions Deletions June 30, 2007 one y . than one year Lease Revenue Bonds: 1988 Lease Revenue Bonds $ 5,740,000 - 2002 Lease Revenue Bonds 19,205,000 - 2003 Lease Revenue Bonds 3,370,000 - 2004 Lease Revenue Bonds 13,500,000 - 2005 Lease Revenue Bonds 21735,000 - 2006 Lease Revenue Bonds 18,005,000 Total Lease Revenue Bonds 44,550,000 18, 005.000 1996 Special'Tax Bonds 42,345,000 Tax Allocation Bonds (265,000) 5,475,000 290,000 5,185,000 (405,000) 18,800,000 415,000 . " 18,385,000 (130,000) 3,240,000 135,000 3,105,000 (1,145,000) 12,355,000 - 12,355,000 (40,000) 2,695,000 45,000 2,650,000 18,005,000 18,005,000 (1,985.000) 60,570,000 885,000 59,685,000 (1.105,000) 41,240,000 _1,200.000 40.040.000 1999 Tax Allocation Bonds 3,930,000 - (5,000) 3,925,000 5,000 3,920,000 2002 Tax Allocation Bonds 11,700,000 - [215.000) 11,485,000 . 470,000 11,015.000 Total Tax Allocation Bonds 15,630,000 (220,000) 15,410,000 475,000 14,935.000 Housing Set -Aside Bonds: 1998 Housing Set -Aside Bonds 5,245,000 - (150,000) 5,095,000 165,000 4,930,000 2001 Housing Set -Aside Bonds 9,955,000 - (320,000) 9,635,000 330,000 9.305,000 Total Housing Bonds . 15,200,000 - (470,000) 14,730.000 495,000 14,235,000 Compensated absences payable 4,063,658 636,515 (737,642) 3,962,531. 726,606 3,235,925 Claims and judgments payable 5,646,618 2,131,840 (1,302,649) 6,475,809 2,444,895 4,030,914 Capital lease obligations 572,385 - (173,902) 398,483 181,380 217,103 Notes payable 1,395,441 - (60,604) 1,334,837 62,819 . 1,272,018 Developer agreement payable 17,536,437 2,315,643 (307,707) 19,544,373 - 19,544,373 Due to the County of Los Angeles 6,008,900 876,243 - 6,885.143 6.885,143 Total long-term liabilities 152.948.439 3.9 2 4 170.551 176 4 700 ]64.080.476 52 CITY OF WEST COVINA Notes to the Basic Financial Statements Year ended June 30, 2007 (Continued) (9) Long -Term Liabilities (Continued) ( Changes in long-term liabilities for business -type activities for the year ended June 30, 2007 are as follows: Balance at Balance at Due within Due in more Business -type activities: June 30, 2006 Additions Deletions June 30, 2007 one year than one year Compensated absences payable 1 4 5A.699 (28.934) 13.6jU (10) Lease Revenue Bonds 1988 Lease Revenue Refunding Bonds (The Lake Public Parking Project) In 1988, the Community Development Commission issued $7,750,000 of Variable Rate Lease Revenue Bonds for the purpose of constructing two multi -story parking structures. The bonds consist of $7,350,000 of current interest bonds and $400,000 of compound interest bonds. The bonds carried interest rates of 6.625% and 7.50%, respectively, until January 31, 1994. On February 1, 1994, the bonds were converted to variable rate bonds. The interest rates vary based on the prevailing financial market conditions beginning on February 1, 1994, to a maximum of 12% over the term of the bonds and are payable monthly. The bonds are subject to mandatory redemption beginning August 1, 1994, and annually thereafter through August 1, 2018. The bonds are secured by the facilities and lease rentals to be received pursuant to a lease agreement between the Commission and the City. At June 30, 2007, the outstanding balance is $5,475,000. 2002 Lease Revenue Refunding Bonds Series A and B (Public Facilities Project) On June 27, 2002, the City issued $2,690,000 of Taxable Variable Rate Lease Revenue Refunding Bonds, 2002 Series A and $19,205,000 Variable Rate Lease Revenue Refunding Bonds, 2002 Series B to provide financing for the advance refunding of the City's 1997 Refunding Certificates of Participation. The interest of the Series A bonds is payable August 1, 2002. The Series A bonds bear ' interest at a variable interest rate determined weekly and after the fixed rate conversion date, at fixed interest rates. The principal of the Series A bonds is due annually beginning on September 1, 2006, in amounts ranging from $40,000 to $165,000. The Series A bonds mature on September 1, 2035. The entire principal amount of $2,690,000 was paid in full in September 2005. 53 CITY OF WEST COVINA Notes to the Basic. Financial Statements Year ended June 30, 2007 (Continued) (10) Lease Revenue Bonds (Continued) The Series B, bonds initially bear interest at 2.5% per annum and, during the initial rate period, interest on the Series B bonds is payable on March 1, 2003 and semiannually -thereafter on September 1 and March 1 of each year until September 1, 2006. Thereafter, interest with respect to the Series B bonds is payable on October 1, 2006 and each month thereafter at a variable rate, and after the fixed rate conversion date at the fixed rates. Principal on the Series B bonds is due annually beginning on September 1, 2006, in amounts ranging from $405,000 to $950,000. The Series B bonds mature on September 1; 2035. The Series B bonds are payable from lease payments to be made by the City to the Authority as rental for certain public facilities consisting of a portion of the City's Civic Center Complex. At June 30, 2007, the outstanding balance is- $1,8,800,000.. 2003 Lease Revenue Bonds Series A (Community Center Project) On February 27, 2003, the City issued $3,725,000 of Lease Revenue Bonds to provide financing for the construction of a community center. The bonds mature annually through August 1, 2023 in amounts ranging from $125,000 to $270,000, with interest -rates that vary beginning on August 1, 2004 at 1.60% to a maximum of 5.375% over the term of the bonds. Interest is payable semiannually. on February 1 and August 1 of each year. The bonds are payable from lease payments as rental for certain public facilities. The reserve requirement at June 30, 2007 of $287,100 was fully funded. At June 30, 2007, the outstanding balance is $3,240,000. 2004 Lease Revenue Bonds Series A and B (Golf Course Project) In August 2004, the City issued $8,165,000 of Variable Rate Lease Revenue Bonds, Series A and $5,335,000 of Variable Rate Lease Revenue Bonds, Series B to provide financing for grading and infrastructure relating to the City's proposed municipal golf course. The Series A bonds mature annually through May 1, 2034 in amounts ranging from $45,000 to $535,000. The Series B bonds mature annually through May 1, 2034 in amounts ranging from $45,000 and $350,000. The Series A and B bonds bear interest at a variable rate reset weekly and at a fixed rate after the fixed rate conversion date. Prior to the fixed rate conversion date, interest is payable on the first business day of each month. Following the fixed rate conversion date, interest is payable on May 1 and November 1 of each year. The bonds are payable from lease payments as rental for certain public facilities. At June 30, 2007, the outstanding balance is $12,355,000. 54 CITY OF WEST COVINA Notes to the Basic Financial Statements Year ended June 30, 2007 (Continued) (10) Lease Revenue Bonds (Continued) ' 2005 Lease Revenue Bonds, Series C (Public Facilities Project) ' In September 2005, the City issued $2,735,000 of Variable Rate Lease Refunding Bonds, Series C to provide funds to refinance the City's 2002 Series A Taxable Variable Rate Lease Revenue Refunding Bonds. The reacquisition price exceeded the net carrying ' amount of the old debt by $45,000. The refunding was undertaken to reduce total debt service payments over the next 30 years by $479,618 and resulted in an economic gain of $331,860. The bonds mature annually on September 1 in amounts ranging from $40,000 to $155,000 through September 1, 2034. The bonds bear interest at a variable rate reset weekly and at a fixed rate after the fixed rate conversion date. Prior to the fixed rate conversion date, interest is payable on the first business day of each month. Following ' the fixed rate conversion date, interest is payable on March 1 and September 1 of each year. The � bonds are payable from lease payments as rental for certain public facilities. At June 30, 2007, the outstanding balance is $2,695,000. 2006 Lease Revenue Bonds, Series A and B (Big League Dreams Project) 1 1 In September 2006, the City issued $10,710,000 of Lease Revenue Bonds, Series A and $7,295,000 of taxable Lease Revenue Bonds, Series B to provide financing for facilities and infrastructure related to the Big League Dreams sports park. The Series A bonds mature annually on June 1 through September 1, 2036 in amounts ranging from $20,000 to $1,270,000, with interest rates that vary beginning on December 1, 2006 at 4.0% to a maximum of 5.0% over the term of the bonds. The Series B bonds mature annually on June 1 through September 1, 2036 in amounts ranging from $60,000 to $550,000, with interest rates that vary beginning on December 1, 2006 at 5.39% to a maximum of 6.07% over the term of the bonds. The bonds are payable from lease payments as rental for certain public facilities. At June 30, 2007, the outstanding balance is $18,005,000. 55 CITY OF WEST COVINA Notes to the Basic Financial Statements Year ended June 30, 2007 (Continued) (10) Lease Revenue Bonds (Continued) The annual debt service requirements on the Lease Revenue Bonds as of June 30, 2007 are as follows: Year Ending June 30 2008 2009 2010 2011 2012 2013-2017 2018-2022 2023-2027 2028-2032 2033-2036 Year Ending June 30 2008 2009 2010 2011 2012 2013-2017 2018-2022 2023-2027 2028-2032 2033-2036 1988 Lease Revenue Bonds Principal Interest $ 290,000 198,743 310,000 188,216 335,000 176,963 365,000 164,802 390,000 151,553 2,490,000 519,816 1,295,000 71,330 2002 Lease Revenue Bonds Principal Interest 415,000 697,480 430,000 682,084 440,000 666,131 455,000 649,807 470,000 6327926 2,555,000 2,893,800 2,970,000 2,389,611 3,440,000 1,804,915 3,985,000 1,127,469 3,640,000 342,619 2003 Lease Revenue Bonds Principal Interest 135,000 151,230 140,000 147,100 140,000 142,235 150,000 136,535 155,000 130,128 880,000 535,668 1,110,000 291,367 530,000 28,659 $ 1$ 4 �44 1,562.922 2004 Lease Revenue Bonds Principal Interest - 510,300 $ 90,000 506,898 200,000 499,338 315,000 487,431 330,000 474,957 1,870,000 2,169,342 2,345,000 1,763,181 2,940,000 1,255,149 3,685,000 617,841 1.725.000 33.453 2005 Lease Revenue Bonds Principal Interest 45,000 99,985 50,000 98,315 60,000 96,460 60,000 94,234 65,000 92,008 360,000 422,569 440,000 349,853 525,000 261,741 645,000 156,562 445.000 33,576 2006 Lease Revenue Bonds Principal Interest - 962,920 - 962,920 - 962,920 80,000 962,920 125,000 958,886 1,175,000 4,667,148 2,325,000 4,260,197 3,675,000 3,486,631 4,780,000 2,375,999 5.845.000 852.391 O5 0.000 $�3 L�Z $2Q_ 6t 9 �94 2 O�Z Z 1 (11) 1996 Special Tax Bonds (The Fashion Plaza Project) In 1996, the Community Development Commission issued $51,220,000 of Special Tax Refunding Bonds comprised of $9,980,000 of serial bonds and $41,240,000 of term bonds. The serial bonds mature annually through September 1, 2006, in amounts ranging from $635,000 to $1,785,000, with interest rates that vary beginning on August 1, 1997.at 4.0% to a maximum of 2.5% over the term of the bonds. The term bonds bear interest at a rate from 5.75% to 6.0% payable semiannually and are due September 1, 2002. The term bonds are not subject to optional redemption; mandatory redemption begins September 1, 2007, then annually thereafter through September 1, 2022. Interest is payable semiannually on March 1 and September 1 of each year. 56 CITY OF WEST COVINA I� 1 E Notes to the Basic Financial Statements Year ended June 30, 2007 (Continued) 0 1) 1996 Special Tax Bonds (The Fashion Plaza Project) (Continued) The bonds are secured by and payable from a portion of the revenues derived from an annual special tax to be levied against all taxable real property within the Special Assessment District. In addition, the Commission has pledged certain other incremental revenues generated within the District consisting of property taxes and sales taxes. The required reserve at June 30, 2007 of $5,103,401 was fully funded. The outstanding principal balance of the bonds at June 30, 2007 is $41,240,000. Debt service requirements on these bonds at June 30, 2007 is as follows: Year Ending June 30 2008 2009 2010. 2011 2012 2013-2017 2018-2022 2023-2026 (12) Tax Allocation Bonds 1999 Tax Allocation Bonds Principal Interest $ 1,200,000 2,430,188 1,295,000 2,358,456 1,390,000 2,281,262 1,485,000 2,196,750 1,580,000 2,104,800 11,470,000 8,716,500 17,830,000 4,329,900 4.990.000 _149,700 $41.240.000 24,567,556 On November 1, 1999, the Community Development Commission issued $3,945,000 of Taxable Variable Rate Tax Allocation bonds. The proceeds of the bonds were used to fund a loan to the Commission, which was used by the Commission to finance certain redevelopment projects within the West Covina Merged Project Area. The bonds are payable from and secured by certain tax revenues payable to the Commission. The interest on the 1999 Bonds is payable monthly at an adjustable interest rate with a maximum of 12%. Principal is due annually beginning on November 1, 2003, in amounts ranging from $5,000 to $165,000 through November 1, 2029. The Commission has a letter of credit to pay the principal and interest due on the bonds to the extent that other funds are not available. The letter of credit expires on November 17, 2008. The outstanding principal balance of the bonds at June 30, 2007 is $3,925,000. 57 CITY OF WEST COVINA Notes to the Basic Financial Statements Year ended June 30, 2007 (Continued) (12) Tax Allocation Bonds (Continued) 2002 Tax Allocation Refundin Bonds onds On June 13, 2002 the Community Development Commission issued $12,200,000 of Tax Allocation Refunding Bonds. The proceeds of the Bonds were used to prepay the outstanding 1993 Tax Allocation Bonds. The 2002 Bonds are payable from tax revenues of the Commission. The interest on the bonds is payable semiannually on September 1 and March 1 of each year, commencing March 1, 2003. The interest rate of the bonds ranges from 1.75% to 5.10%. The principal of the bonds is due annually beginning on September 1, 2003, in amounts ranging from $85,000 to $800,000 and maturing on September 1, 2025. At June 30, 2007 the required reserve of $987,833 was fully funded. The principal balance of outstanding bonds at June 30, 2007 is $11,485,000. The annual debt service requirements on the tax allocation bonds as June30, 2007 are as follows: 1999 Tax Allocation Bonds 2002 Tax Allocation Bonds Year Ending June 30 Principal Interest Principal Interest 2008 $ 5,000 211,950 470,000 517,833 2009 5,000 211,410 485,000 502,538 2010 115,000 205,200 500,000 485,293 2011 125,000 198,450 520,000 466,413 2012 130,000 191,430 540,000 446,003 2013-2017 745,000 840,510 3,035,000 1,871,079 2018-2022 895,000 615,600 3,515,000 1,053,279 2023-2027 1,120,000 338,580 2,420,000 254,490 2028-2031 785,000 43.200 - 11225 000 2.856.330 11.485.000 5-596.92g 1998 Housing Set -Aside Tax Allocation Bonds In 1998, the Community Development Commission issued $7,345,000 of Tax Allocation Bonds to provide funds for the acquisition and rehabilitation of a multi -family housing project. The bonds mature annually through September 1, 2025 in amounts ranging from $20,000 to $325,000, with interest rates varying from 4.5% to 7.0%. Interest 1s payable semiannually on March 1, and September 1, of each year. The bonds are payable solely from and secured by a pledge of that portion of the tax increment revenues receivable by the Commission with respect to the merged redevelopment project area and are required to be deposited into the Commission's Low and Moderate Income Housing Fund. 58 CITY OF WEST COVINA .1 C 11, 1 C u 1 C Notes to the Basic Financial Statements Year ended June 30, 2007 (Continued) (12) Tax Allocation Bonds (Continued) At June 30, 2007 the required reserve of $440,455 was fully funded. The principal balance of outstanding bonds at June 30, 2007 is $5,095,000. 2001 Housing Set -Aside Tax Allocation Bonds On December 1, 2001 the Community Development Commission issued $11,275,000 of Housing Set -Aside Tax Allocation Bonds. The proceeds of the bonds were used to fund a grant for the acquisition and development of a senior housing apartment complex and finance the implementation of the Commission's low and moderate income housing programs. The bonds are payable from and secured by certain tax increment revenues. The interest on the bonds is payable on March 1 and September 1 of each year, commencing March 1, 2002. The interest rate of the bonds ranges from 2.25% to 5.00%. The principal of the bonds is due annually beginning on September 1, 2002, in amounts ranging from $20,000 to $600,000. The bonds mature on September 1, 2031. The bonds are subject to optional and mandatory redemption provision. At June 30, 2007 the required reserve of $763,211 was fully funded. The principal balance of outstanding bonds at June 30, 2007 is $9,635,000. The annual requirements to amortize housing tax allocation bonds as of June 30, 2007 are as follows: 1998 Housing_Bonds 2001 Housing Bonds Year Ending June 30 Principal Interest Principal Interest 2008 $ 165,000 275,455 330,000 439,634 2009 170,000 267,247 345,000 427,430 2010 175,000 258,670 355,000 414,039 2011 190,000 249,430 370,000 399,716 2012 195,000 239,516 385,000 384,376 2013-2017 1,150,000 1,024,429 2,185,000 1,649,499 2018-2022 1,505,000 658,987 2,850,000 973,937 2023-2027 1,545,000 181,411 980,000 580,250 2028-2032 - - 1,835,000 200,250 2033-2036 - - - S 5 095.000 i55.145 9,635,000 5.469.131 (13) Letters of Credit The City and CDC have letters of credit securing the payment of principal and interest on its variable rate bonded debt. The letters of credit are issued in favor of the bond trustees and enable the trustees to make drawings against the letters of credit for payment of principal and interest amounts, if necessary. 1 59 CITY OF WEST COVINA ' Notes to the Basic Financial Statements Year ended June 30, 2007 (Continued) ' (13) Letters of Credit (Continued) The terms of the letters of credit as of June 30, 2007are summarized as follows: ' Letter of Credit Trustee Amount Expiration Date ' Allied Irish -Bank: 1988 Lease Revenue Bonds Bank of New York 5,287,280 August 16, 2008 1999 Tax Allocation Bonds US Bank 4,002,425 November 17, 2008 ' California STRS 2002 Lease Revenue Bonds US Bank 22,836,765 June 26, 2012 Union Bank 2004 Lease Revenue Bonds US Bank 13,761,864 August 18, 2009 ' 2005 Lease Revenue Bonds US Bank 2,735,000 June 26, 2012 1 ,(14) Claims and Judgments The City is exposed to various risks of loss related to its operation, including losses , associated with errors and omissions, injuries to, employees and members of the public. The City's Internal Service Self Insurance Fund is used to account for and finance its uninsured risks of loss. ' l The City of West Covina participates in a joint powers insurance authority insurance pooling arrangement with other public agencies for general liability coverage in excess of the City's self -insured retention of $1,000,000 per occurrence. The pool shares losses from $1 million to $2 million among its members and purchases commercial insurance/reinsurance for losses from $2 million to $25 million, per occurrence. The City of West Covina participates in a joint powers authority insurance pooling ' arrangement with other public agencies for worker's compensation coverage in excess of the City's self -insured retention of $1 million per occurrence. The pool shares losses from $1 million to $5 million among its members for both employer liability and workers' compensation. coverage and purchases excess insurance coverage for losses from $5 million to $150 million. _ Claims for general liability and worker's compensation did not exceed the self insurance ■ retention level during the last five years. The claims and judgments liability reported in the Internal Service Self Insurance Fund is ' based on the requirements of Governmental Accounting Standards Board Statement No. 10, which requires that a liability for claims and judgments be reported if information prior to the issuance of the financial statements indicates that it is probable that a liability ' has been incurred at the date of the financial statements and the amount. of loss can be reasonably estimated. As of June 30, 2007, claims and judgments payable, including estimated claims for incurred but not reported claims, amounted to $6,475,809. ' 60 CITY OF WEST COVINA 1 1 1 Notes to the Basic Financial Statements Year ended June 30, 2007 (Continued) (14) Claims and Judgments (Continued) Changes in the claims and judgments payable amounts in fiscal years 2006 and 2007 for the Self Insurance Fund are as follows: Beginning of Fiscal Year Liabili 2005-06 $5,616,313 2006-07 5,646,618 (15) Capital Leases Obligations Current Year Claims and Changes in Claim Balance at Estimates Payments Fiscal Year End 918,778 (888,473) 5,646,618 2,131,840 (1,302,649) 6,475,809 The following represents governmental activity obligation under capital leases: Fire Trucks In February 1999, the City entered into a lease agreement for the acquisition of a fire truck. This lease agreement qualifies as a capital lease for accounting purposes (title transfers at end of the lease) and, therefore, has been recorded at the present value of the future minimum lease payments as of the date of inception. The fire truck acquired during the fiscal year under this lease agreement is recorded at its acquisition cost of $636,483. The City obtained financing in the amount of $636,483 with an interest rate of 8.61 % and annual payments of $82,148 through the end of the lease (June 2009). The outstanding balance at June 30, 2007 is $152,898. In October 2002, the City entered into a lease agreement for the acquisition of a fire truck. This lease agreement qualifies as a capital lease for accounting purposes (title transfer at end of lease) and, therefore, has been recorded at the present value of the future minimum lease payments as of the date of inception. The fire truck acquired during the fiscal year under this lease agreement is recorded at its acquisition cost of $348,192. The City obtained financing in the amount of $348,192 with an interest rate of 3.66% and quarterly payments of $14,153 through the end of the lease (October 2009). The outstanding balance at June 30, 2007 is $134,659. 1 Ambulance In June 2004, the City entered into a lease agreement for the acquisition of four ' ambulances. This lease agreement qualifies as a capital lease for accounting purposes (title transfers at the end of the lease) and, therefore, has been recorded at the present value of the future minimum lease payments as of the date of inception. The ambulance ' acquired during the fiscal year under this lease agreement is recorded at their acquisition cost of $261,792. 61 CITY OF WEST COVINA Notes to the Basic Financial Statements Year ended June 30, 2007 (Continued) (15) Capital Leases Obligations (Continued) The City obtained financing in the amount of $261,792 with an interest rate of 3.76% and quarterly payments of $14,489 through the end of the lease (June 2009). The outstanding balance at June 30, 2007 is $110,926. The calculation of the present value of the future lease payments for obligations under capital leases as of June 2007 is as follows: 9 2002 2004 Year EndingI99 June 30 Fire Truck Fire Truck Ambulances Total 2008 $ 82,148 56,612 57,956 196,716 2009 82,148 56,610 57,956 196,714 2010 28.305 28.305 Subtotal 164,296 141,527 115,912" 421,735 Less amount representing interest (11.398) (6,868) (4.986) (23.252) Present value of future lease payments $ 152,898 (16) Notes Payable Chamber of Commerce Note In June 1996, the City entered into a note agreement for $135,670 to provide funding for the purchase of certain real property. The note accrues interest at 5.78%. Principal and interest payments of $7,135 are due semi-annually through June 1, 2011. The note is payable from the revenues of the general fund. At June 30, 2007, the outstanding balance is $50,406. Butler Note On January 24, 2002, the West Covina Public Financing Authority entered into a note for $248,000 to finance the purchase of certain real property. The interest rate is adjusted on each thirty-six month anniversary of the effective date, and shall be that rate which is 0.5% in excess of the one year United States Treasury Note in existence on the date of such adjustment. The principal is due on December 24, 2011. The note is payable from the revenues of the general fund. At June 30, 2007, the outstanding balance is $248,000. Valencia Note On May 1, 2003, the City entered into a note agreement for $1,215,000 to finance the purchase of certain real property. The initial interest rate of 5.31% is adjusted on the eighteenth month anniversary of the effective date, and shall be at that rate which is 0.5% in excess of the two year United States Treasury Bill in existence on the date of such adjustment. Principal and interest payments are due monthly through 2023. The note is payable from the revenues of the general fund. The outstanding balance at June 30, 2007 is $1,036,431. 7 C 7 62 7 CITY OF WEST COVINA Notes to the Basic Financial Statements ' Year ended June 30, 2007 ' (Continued) (16) Notes Payable (Continued) ' The annual debt service requirements on all notes. are as follows: Chamber of Butler Note Valencia Note ' Year Ending Commerce June 30 Princi al Interest Principal Interest Principal Interest 2008 $11,560 2,711 - 8,333 51,259 31,264 2009 12,228 2,042 8,333 52,943 29,658 ' 2010 12,936 1,336 _ 8,333 54,602 28,001 2011 13,682 588 - 8,333 56,311 26,292 2012 - - 248,000 4,166 58,073 24,529 ' 2013-2017 - - 318,796 94,215 2018-2022 371,911 41,100 2023-2026 - - 72.536 1.097 248,000 9 LW 431 76.156 L E 11 �I F (17) Developer Ayreement Payable Outstanding at June 30, 2007 The Commission entered into an agreement with a developer to share certain future tax revenues generated by the Community Facilities District. Since 1992, the developer's share of revenues totaled $33,350,970. The City has made payments to the developer totaling $13,806,597. 19.544,373 (18) Due to the County of Los Angeles Based on an agreement dated June 19, 1990 between the Commission and the County, during the first twenty years beginning in 1990, the Commission will retain from the County 50% of the County portion of tax increment. Per the agreement, the Commission must repay all amounts withheld from the County beginning in 2011. Repayment terms have not yet been established. Interest does not accrue on this obligation for the first twenty years and is 7% thereafter. The balance at June 30, 2007 is $6,885,143. (19) Accumulated Fund Deficits The following funds reported deficits in ftmd,balances/net assets as of June 30, 2007: Deficit Balance Debt Service Funds: Community Development Commission $11,682,268 Special Revenue Funds: Art in Public Places 58,464 Grants 1,934,512 63 ' CITY OF WEST COVINA Notes to the Basic Financial Statements Year ended June 30, 2007 (Continued) (19) Accumulated Fund Deficits (Continued) Management's explanation for the resolution of significant accumulated fund deficits are summarized as follows: Community Development Commission Debt Service Fund: The deficit fund balance of $11,682,268 is a result of recording $30,719,988 of advances from the General Fund in accordance with GASB Statement No. 34. Prior to implementation of the statement, advances payable were recorded in the General Long - Term Debt Account Group. The advances are scheduled to be repaid to the General Fund through 2018 from the future tax increment revenues. Grants Fund: The deficit in fund balance of $1,934,512 is a result of $2,506,395 of deferred revenue that has been recorded for receivables that are earned but not available within the availability period of 60 days. Art in Public Places Fund: The deficit fund balance in the amount of $58,464 has resulted from costs associated with a bronze sculpture at the newly constructed sportsplex facility. (20) Defined Benefit Pension Plan The City of West Covina contributes to the California Public Employees Retirement System (PERS), an agent multiple -employer public employee defined benefit pension plan. PERS provides retirement, disability benefits, and death benefits to plan members and beneficiaries. PERS acts as a common investment, and administrative agent for participating public entities within the State of California. Copies of PERS' annual financial report may be obtained from its executive office at 400 "P" Street, Sacramento, California 95814. Participants are' required . to contribute 8% of their annual covered salary for miscellaneous employees and 9% for safety employees.. The City makes the contributions required of City employees on their behalf and for their account. Benefit provisions and all other requirements are established by state statute and City contracts with employee bargaining groups. Under GASB 27, an employer reports an annual pension cost (APC) equal to the annual required contribution (ARC) plus an adjustment for the cumulative difference between the APC and the employer's actual plan contributions for the year. The cumulative difference is called the net pension obligation (NPO). The ARC for the period July 1, 2006 to June 30, 2007 has been determined by an actuarial valuation of the plan as of June 30, 2006. The contribution rate indicated for the period is 26.728% of payroll for the safety plan and 7.635% of payroll for the miscellaneous plan. Subsequent to that actuarial valuation, the City initiated a contract amendment that implemented the 2.5% @ 64 0 CITY OF WEST COVINA H 11 C 11 n �1 Notes to the Basic Financial Statements Year ended June 30, 2007 (Continued) (20) Defined Benefit Pension Plan (Continued) 55 retirement formula for miscellaneous employees which resulted in an increase of the contribution rate for the 2006-07 fiscal year to 10.017% of payroll. In order to calculate the dollar value of the ARC for inclusion in financial statements prepared as of June 30, 2007, this contribution rate would be multiplied by the payroll of covered employees that was actually paid during the period July 1, 2006 to June 30, 2007. A summary of principle assumptions and methods used to determine the ARC is shown below. Valuation Date Actuarial Cost Method Amortization Method Average. Remaining Period Asset Valuation Method Actuarial Assumptions: Investment Rate of Return Projected Salary Increases Inflation Payroll Growth Individual Salary Growth &Lety June 30, 2006 Entry Age Actuarial Cost Method Level Percent of Payroll 32 Years as of the Valuation Date 15 Year Smoothed Market 7.75% (net of administrative expenses) 3.25% to 13.15% depending on Age, Service, and type of employment 3.00% 3.25% A merit scale varying by duration of employment coupled with an assumed annual inflation component of 3.0% and an annual production growth of 0.25%. Miscellaneous June 30, 2006 Entry Age Actuarial Cost Method Level Percent of Payroll 2 Years as of the Valuation Date 15 Year Smoothed Market 7.75% (net of administrative expenses) 3.25% to 14.45% depending on Age, Service, and type of employment 3.00% 3.25% A merit scale varying by duration of employment coupled with an assumed annual inflation component of 3.0% and an annual production growth of 0.25%. The excess of total . actuarial accrued liability over the actuarial value of plan assets is called the unfunded actuarial accrued liability. Changes in the liability due to subsequent plan amendments are amortized as a level percent of pay over a closed 20-year period. Gains and losses that occur in the operation of the plan are amortized over a rolling 30- year period. If the plan's accrued liability exceeds the actuarial value of plan assets, then the amortization period may not be lower than the payment calculated over a 30 year amortization period. For the safety plan, the unfunded actuarial June 30, 2036. For the miscellaneous plan, over a period ending June 30, 2024. liability is amortized over a period ending the unfunded actuarial liability is amortized 65 CITY OF WEST COVINA Notes to the Basic Financial Statements Year ended June 30, 2007 (Continued) (20) Defined Benefit Pension Plan (Continued) The Schedule of Funding Progress below shows the recent history of the actuarial value of assets, actuarial accrued liability, their relationship, and the relationship of the unfunded accrued liability to payroll. Required Supplementary Information —Safety (in thousands) Entry Age Unfunded Normal Actuarial Liability/ Annual Valuation Accrued Value (Excess Funded Covered Date Liability of Assets Assets Status Payroll 6/30/04 - $181,590 150,395 31,195 82.8% 16,893 6/30/05 186,863 161,520 25,342 86.4% 16,226 6/30/06 197,044 173,895 23,148 88.3% 15,653 Required'Supplementary Information — Miscellaneous (in thousands) Entry Age Unfunded Normal Actuarial Liability/ Annual Valuation Accrued Value (Excess . Funded Covered Date Liability of Assets Assets) Status Payroll 6/30/04 $74,196 75,121 (925) 101.2% 11,63C 6/30/05 79,750 78,907 843 98.9% 11,32C 6/30/06 84,461 84,170 291 99.7% 11,891 Three -Year Trend Information Annual Pension Cost (Employer Contribution) Fiscal Percentage of UAAL Asa%of Payroll 184.7% 156.2% 147.9% UAAL Asa%of Payroll (8.0)% 7.4% 2.4% Net Pension Year Safety Miscellaneous APC Contributed Obligation 6/30/05 $4,285,798 - 100% - 6/30/06 4,842,219 808,262 100% - 6/30/07 4,811,295 1,302,293 100% - 21) Post -Retirement Health Care Benefits Post -Retirement Benefits Employees who retire from the City are eligible to receive health care benefits covering themselves and any qualified family members. The City pays varying amounts per month for each retiree: $81 for general employees, and up to $550 for sworn police and fire personnel towards the premiums charged under a health benefit plan administered by the Public Employees' Retirement System (PERS) in which the individual is.able to select, 66 CITY OF WEST COVINA 1 1 �J Notes to the Basic Financial Statements Year ended June 30, 2007 (Continued) (21) Post -Retirement Health Care Benefits (Continued) on an annual basis, insurance from a number of insurance carriers. Contributions are financed on a pay-as-you-go basis. Expenditures for post -retirement health care benefits for fiscal year ended June 30, 2007 were $662,814 in premiums with 155 participants receiving benefits. (22) Transfers In/Transfers Out The following schedule summarizes the City's transfer activity: Transfers In Transfers Outs General Fund Non -Major Governmental Funds City Debt Service Fund City Capital Projects Fund CDC Capital Projects Fund CDC Debt Service Fund General Fund City Capital Projects Fund CDC Debt Service Fund General Fund Non -Major Governmental Funds CDC Capital Projects Fund CDC Debt Service Fund City Debt Service Fund Non -Major Governmental Funds General Fund Non -Major Governmental Funds Total Transfers Amount $ 1,180,000 (a) 888,926 4,257,717 (b) 319,000 4,900,000 (c) 2,939,100 (c) 11,295,688 (c) 6,754,062 (d) " 459,518 53 30,000 $33,024,064 (a) The Traffic Safety Fund and the Public Safety Augmentation Fund transferred $580,000 and $600,000, respectively, to the General Fund to reimburse the General Fund for traffic and public safety related activities. (b) Transfers were made relative to the call of a portion of the 2004 Lease Revenue Bonds and the issuance of the 2006 Lease Revenue Bonds. (c) Transfers from the General Funds, BKK Community Fund, Park Development Fund, Art in Public Places Fund and CDC Capital Projects Fund were primarily made to fund the sportsplex project. 67 CITY OF WEST COVINA Notes to the Basic Financial Statements Year ended June 30, 2007 (Continued) (22) Transfers In/Transfers Out (Continued) (d) The Community Development Commission Debt Service Fund transferred $3,351,062 to the Community Development Commission Capital Projects Fund. This transfer represents 20% of property tax increment received by the Community Development Commisiion during the year that is restricted for low and moderate income housing projects. The Community Development Commission Debt Service Fund also transferred $3,403,000 to the Community Development Commission Capital Projects Fund. The transfer was made to provide funding for repayment of advances made by the General Fund to the Community Development Commission Capital Projects Fund. (23) Expenditures in Excess of Appropriations Expenditures for the year ended June 30, 2007 exceeded the appropriations of the following funds: Budget Actual Variance Special Revenue Funds Drug Enforcement 78,615 79,565 (950) Business Improvement Tax - 3,700 (3,700) Inmate Welfare 19,500 25,033 (5,533) Special Assessments 45457,372 45461,879 (4,507) Fire Training - 2,146 (2,146) Debt Service Funds CitytDebt Service Fund 4,051,713 4,661,144 (24) Subsequent Events 1 1 I� (609,431) , During the fiscal year the City entered into a loan agreement with the California Energy Commission in the amount of $1,278,000 to finance the purchase on an HVAC system for the city hall and the police station. The terms of the loan call for a repayment in semi- annual payments of $64,102 beginning December 22, 2008 and ending December 22, 2022. The project was begun during the fiscal year, however, no drawdowns on the loan amount occurred until the 2007-08 fiscal year. (25) Other Commitments In 1989, in order to assist in the expansion of the Fashion Plaza shopping center, the City enacted an ordinance to allow the Redevelopment Agency of the City of West Covina (the predecessor to the Community Development Commission of the City of West Covina) to receive the sales tax generated as a result of the expansion project. At the same time, the City enacted an ordinance providing a credit for sales tax payable by the 68 CITY OF WEST COVINA L 1 1 1 1 Notes to the Basic Financial Statements Year ended June 30, 2007 (Continued) (25) Other Commitments (Continued) developer in the amount equal to the sales tax due to the redevelopment agency. These sales tax ordinances and related agreements between the City and the Agency essentially transferred the sales tax increment due to the Fashion Plaza expansion project from the City to the Agency. On July 25, 2005, the Board of Directors of the Community Development Commission of the City of West Covina (a blended component unit of the City of West Covina) adopted Resolution No. 2005-50. By this resolution, the Board of Directors authorized the Commission to reimburse the City of West Covina over a period of 17 years for the sales tax revenue that had essentially been shifted from the City to the Commission. These budgeted interfund transfers between the primary government of the City of West Covina and its blended component unit will be recorded in the fiscal year that they result in a flow of current financial resources, as required by the measurement focus prescribed for governmental funds. 11� 69 (This page intentionally left blank) 70 rl I 11 SUPPLEMENTARY SCHEDULES 71 CITY OF WEST COVINA Combining Balance Sheet - Non -Major Governmental Funds June 30, 2007 Special Capital Revenue Projects Totals Funds Funds 2007 2006 Assets Cash and investments $ 12,966,401 2,319,933 15,286,334 16,359,326 Cash and investments with fiscal agent - - - - Receivables: Accounts 30,709 - 30,709 50,998 Taxes 525,915 - 525,915 949,664 Interest 106,128 40,606 146,734 101,562 Assessments 31,090 - 31,090 46,447 Notes and loans 4,614,651 - 4,614,651 4,644,036 Due from other agencies 3,365,077 - 3,365,077 3,267,741 Inventory - - - 11,471 Prepaid items 1,888 - 1,888 2,970 Total assets $ 21,641,859 2,360,539 24,002,398 25,434,215 Liabilities and Fund Balance Liabilities: Accounts payable $ 1,882,961 93,664 1,976,625 1,192,051 Other accrued liabilities 309,999 9,438 319,437 393,773 Due to other funds 2,677,765 84,519 2,762,284 2,422,908 Deferred revenue 7,156,201 - 7,156,201 7,027,956 Advances from other funds - - - 19,000 Total liabilities 12,026,926 187,621 12,214,547 11,055,688 Fund balance: Reserved for: Encumbrances 1,319,366 151,760 1,471,126 2,112,061 Inventory - - - 11,471 Prepaid items 1,888 - 1,888 2,970 Unreserved -designated 10,495,938 2,021,158 12,517,096 15,258,238 Unreserved-undesignated (2,202,259) - (2,202,259) (3,006,213) Total fund balance 9,614,933 2,172,918 11,787,851 14,378,527 Total liabilities and fund balance $ 21,641,859 2,360,539 24,002,398 25,434,215 72 u CITY OF WEST COVINA tCombining Statement of Revenues, Expenditures and Changes in Fund Balances - Non -Major Governmental Funds ' For the year ended June 30, 2007 Revenues: Taxes Special assessments Licenses and permits Fines and forfeitures ' Investment income Rental income Revenue from other agencies Charges for services Repayment of notes and loans Developer fees Other revenues Total revenues Expenditures: Current: General government Public safety Public works Community services Community development Total expenditures Excess (deficiency) of revenues over (under) expenditures Other financing sources (uses): Transfers in Transfers out Total other financing sources (uses) Net change in fund balances Fund balances at beginning of year Fund balances at end of year Special Capital Revenue Projects Fiinrlc 'iiinrlc $ 4,657,673 372,909 3,711,712 - 2,238 - 952,056 - 503,967 109,663 5,510 26,863 6,449,147 - 1,564,858 25,000 393,587- - - 1,462,535 950,372 - 19,191,120 1,996,970 Totals 2007 2006 5,030,582 5,031,802 3,711,712 3,582,066 2,238 7,439 952,056 1,060,522 613,630 468,831 32,373 36,940 6,449,147 9,197,118 1,589,858 1,569,615 393,587 476,213 1,462,535 7,884 950,372 453,485 21,188,090 21,891,915 192,177 15,778 207,955 123,296 1,474,666 78,352 1,553,018 1,184,812 10,377,386 160,182 10,537,568 10,067,548 5,873,924 934,236 6,808,160 5,460,197 553,018 - 553,018 571,866 18,471,171 1,188,548 19,659,719 17,407,719 719,949 808,422 1,528,371 4,484,196 30,053 - 30,053 30,000 (2,849,100) (1,300,000) (4,149,100) (1,495,000) (2,819,047) (1,300,000) (4,119,047) (1,465,000) (2,099,098) (491,578) (2,590,676) 3,019,196 11,714,031 2,664,496 14,378,527 11,359,331 $ 9,614,933 2,172,918 11,787,851 14,378,527 73 I NON -MAJOR SPECIAL REVENUE FUNDS Special Revenue Funds are used to account for specific revenues that are legally restricted to r expenditure for particular purposes. The City of West Covina has the following Non -Major Special Revenue Funds: Recreation Programs Fund — This fund accounts for fees charged to participants for recreation programs. t: Drug Enforcement Rebate Fund — This fund accounts for the City's portion of revenue received from drug asset seizures. The revenue is used to enhance the police programs.. Business Improvement Tax Fund — This fund accounts for business improvement taxes which are restricted to economic development activities. Air Quality Improvement Fund - This fund accounts for the City's portion of motor vehicle registration fees collected under AB 2766. This fee was levied to fund programs to reduce air pollution from mobile sources such as cars, trucks and buses. Money is distributed to the cities based on population, and additional discretionary grants are made based on specific requests. Proposition A Fund — This fund accounts for the 0.5% sales tax collected in Los Angeles County which is used for transportation programs and projects. Proposition C Fund — This fund accounts. for gasoline taxes which are restricted. for transportation programs and projects. Traffic Safety Fund - This fund accounts for the vehicle code fines expended for traffic safety enforcement. State Gas Tax Fund — This fund accounts for the City's proportionate share of gas tax monies collected by the State of California which are used for street construction and maintenance. Traffic Congestion Relief Fund — This fund accounts for revenues and expenditures related to the City's allocation of AB2898 monies received from the State. Police Special Programs Fund — This fund accounts for donations received and expenditures related to various police programs. Transportation Development Act Fund — This fund accounts for regional Transportation Development Act funds received from Los Angeles County which are used for local streets and roads. Waste Management Fund — This fund accounts for the money received from the State of California and user fees to develop and implement a plan to reduce solid waste deposits in local landfills. Grants Fund — This fund accounts for the various Federal and State of California and local grants that are restricted to expenditures for specific programs and projects. CDBG Fund — This fund accounts for activities of the Community Development Block Grant received from the U.S. Department of Housing and Urban Development. 74 INON -MAJOR SPECIAL REVENUE FUNDS (CONTINUED ' Tree Fund — This fund accounts for developer contributions restricted for the replacement of trees and new urban forestation projects. Inmate Welfare Fund — This fund accounts for revenues from items sold to inmates. The revenues are used to enhance inmate welfare. BKK Community Fund — This fund accounts for revenue received which is restricted for ' community enhancement in the neighborhood surrounding the BKK landfill site. Public Safety Fund — This fund accounts for sales tax revenue legally restricted for public safety. Revenue is used to augment police operations. COPS Grant Fund — This fund accounts for revenue from the State restricted for supplementing police operations. Special Assessments Fund — This fund accounts for monies received from services deemed to benefit the properties and businesses against which the special benefit assessments are levied. ' The assessments are levied once a year and sent to the Los Angeles County Tax Collector for collection, or billed directly to business owners. The City presently provides sewer, open space, landscape maintenance, park maintenance, street lighting and business improvement services. Charter Cable Fund — This fund accounts. for monies received from the City's cable television franchisee for a one-time litigation settlement and for cable -related capital expenditures. Art in Public Places Fund — This fund accounts for development fees paid in lieu of acquisition and installation of approved artwork in a development with expenditures restricted to acquisition, installation, maintenance and repair of artworks at approved sites. North Azusa Relinquishment Fund — This fund accounts for monies received from the State as a result of the relinquishment to the City of a certain portion of North Azusa Avenue. Fire Training Fund — This fund accounts for fire training programs. WC Community Services Foundation — This fund account for activity of the West Covina 1 Community Services Foundation, a 501(c)(3) non-profit organization. n 1 75 Assets Cash and investments Receivables: Accounts Taxes Interest Assessments Notes and loans Due from other agencies Inventory Prepaid items Total assets Liabilities and Fund Balances Liabilities: Accounts payable Other accrued liabilities Due to other funds Deferred revenue Total liabilities, Fund balances (deficit): Reserved for. Encumbrances Inventory Prepaid items Unreserved: Designated for. Special purposes Undesignated Total fund balances (deficit) Total liabilities and fund balances CITY OF WEST COVINA Non -Major Special Revenue Funds Combining Balance Sheet June 30, 2007 Drug Business Recreation Rebate Improvement Air Quality Proposition Proposition Programs Enforcement Tax Improvement A C $ 234,154 26,237 41,628 105,341 1,823,049 2,144,918 24,012 - - 30 - 1,710 192 346 682 14,320 16,647 - - - 35,109 - - $ 259,876 26,429 41,974 .141,132 1,837,399 2,161,565 $ 41,423 - - 2,648 280,006 142,142 28,943. - - 1,396 6,746 76,150 - - - 35,155 - - 70,366 - - 39,199 286,752 218,292 4,988 - - - 85,516 159,761 184,522 26,429 41,974 101,933 1,465,131 1,783,512 189,510 26,429 41,974 101,933 1,550,647 1,943,273 $ 259,876 26,429 41,974 141,132 1'1837,399 2,161,565 76 State Traffic Police Transportation Traffic Gas Congestion Special Development Safety Tax Relief Programs Act 125,876 - 816,449 28,205 17,680 39,763 186,567 - - - 687 - 6,771 233 344 = 5,350 179 - - - - 166,505 186,567 823,220 28,438 23,374 Waste Management Grants CDBG Tree 161,138 552,791 1,269 543 - 4,989 - - 57,611 - - - 1,436 4,284 - 3 - - 4,614,651 - 2,299,342 1,025,276 - 90 19 - 220,185 2,861,496 5,641,215 546 3,823 71,944 77,724 2,388 7,630 4,500 34,533 221,616 - 4,977 27,692 438 - - 4,145 7,232 31,466 - - 78,511 - - - - 2,247,848 220,316 - - - - - - - 2,506,395 4,614,651 - 8,800 178,147 78,162 2,388 7,630 8,645 4,796,008 5,088,049 - 112,799 8,220 10,754 193 270 - 267,657 48,245 - 179 - - - - - 90 19 - 44,727 200 734,304 25,857 15,474 211,540 - 504,902 546 - - - - - - (2,202,259) - - 157,705 8,420 745,058 26,050 15,744 211,540 (1,934,512) 553,166 546 166,505 186,567 823,220 28,438 23,374 220,185 2,861,496 5,641,215 546 (Continued) 77 CITY OF WEST COVINA Non -Major Special Revenue Funds Combining Balance Sheet (Continued) Inmate BKK Public COPS Special Welfare Community Safety Grant Assessments Assets Cash and investments 7,533 13,816 116,885 190,706 4,190,406 Receivables: Accounts 1,678 - - _ _ Taxes - - 111,451 - 130,523 Interest 90 130 927 1,713 36,039 Assessments - - _ _ 31,090 Notes and loans Due from other agencies Inventory _ _ _ _ - Prepaid items _ _ _ _ 100 Total assets'. 9,301 13,946 229,263 192,419 4,388,158 Liabilities and Fund Balances Liabilities: Accounts payable 1,789 - - 93,046 246,430 Other accrued liabilities - 592 - - 24,156 Due to other funds - - - - 31,090 Deferred revenue Total liabilities 1,789 592 - 93,046 301,676 Fund balances (deficit): Reserved for: Encumbrances 146 - - 6,314 63,852 Inventory _ _ _ _ _ Prepaid items - - - - ! 100 Unreserved: Designated for: Special purposes 7,366 13,354 229,263 93,059 4,022,530 Undesignated Total fund balances (deficit) 7,512 13,354 229,263 99,373 j 4,086,482 Total liabilities and fund balances 9,301 13,946 229,263 192,419 ! 4,388,158 78 1 1 1 1 1 1 1 1 1 1 1 Art in North WC Conununity Charter Public Azusa Fire Services Totals Cable Places Relinquishment Training Foundation 2007 2006 580,577 41,279 1,742,747 3,124 50 12,966,401 13,439,570 - - - - - 30,709 48,798 525,915 949,664 4,395 257 14,922 - - 106,128 83,739 - - - - - 31,090 46,447 - - - - - 4,614,651 4,644,036 - - - - - 3,365,077 3,267,741 - - - - - - 11,471 1,500 - - - - 1,888 2,970 586,472 41,536 1,757,669 3,124 50 21,641,859 22,494,436 37,307 - 614,012 - - 1,882,961 1,088,821 - - 96,066. - - 309,999 240,720 - 100,000 - - - 2,677,765 2,422,908 - - - - - 7,156,201 7,027,956 37,307 100,000 710,078 - - 12,026,926 10,780,405 12,454 - 538,197 - - 1,319,366 1,718,216 11,471 1,500 - - - - 1,888 2,970 535,211 (58,464) 509,394 3,124 50 10,495,938 12,987,587 - - - - - (2,202,259) (3,006,213) 549,165 (58,464) 1,047,591 3,124 50 9,614,933 11,714,031 586,472 41,536 1,757,669 3,124 50 21,641,859 22,494,436 79 { CITY OF WEST COVINA j Non -Major Special Revenue Funds j Combining Statement of Revenues, Expenditures and Changes in Fund Balances For 2007 the year ended June 30, Drug Business Recreation Rebate Improvement Air Quality Proposition Proposition Programs Enforcement . Tax Improvement Ai C Revenues: J Taxes $ - - - 1,799,474 1,495,704 Special assessments - - - Licenses and permits - �- - Fines and forfeitures Investment income 8,023 2,394 1,753 4,583 59;500 95,350 Rental income 5,510 - '- - Revenue from other agencies - 26,450 - 135,513 102,402 - Charges for services. 1,264,039- Repayment of notes and loans - - - - �- - Other revenues - - 550,000 Total revenues 1,277,572 28,844 1,753 140,096 2,517,055 1,591,054 Expenditures: I Current: General government - - 3,700 20,000 I- - Public safety - 79,565 - 26,046 j- - Public works - - - 35,664 199236 1,763,454 Community services 1,232,813 - - 87,356 1,683 157 279,673 Community development - - - - - 124,875 Total expenditures 1,232,813 79,565 3,700 169,066 1,882,393 2,168,002 Excess (deficiency) of revenues over(under)expenditures 44,759 (50,721) (1,947) (28,970) 634,662 (576,948) Other financing sources (uses): I Transfers in Transfers out- Total other financing, j sources (uses) - - ;- - Net change in fund balances 44,759 (50,721) (1,947) (28,970) 634,662 (576,948) Fund balances (deficit) at i i beginning of year 144,751 77,150 43,921 130,903 915,985 2,520,221 " Fund balances (deficit) at end of year $ 189,510 26,429 41,974 101,933 1,550,647 1,943,273 4 80 I i 1 1 1 1 1 1 State Traffic Police Transportation Traffic Gas Congestion Special Development Waste Safety Tax Relief Programs Act Management Grants CDBG - 861 - - - - - - 952,056 - - - - - - - 840 1,646 36,800 993 1,249 7,661 24,061 - - 2,008,399 821,551 - 64,203 - 2,296,113 775,629 - 1,104 - - - 189,296 69,581 - - - - - - - 393,587 - 1,101 - 10,570- - - 984 - 952,896 2,013,111 858,351 11,563 65,452 196,957 2,390,739 1,169,216 - - - 5,426 - - 1,038,544 36,266 327,991 2,077,159 231,442 - 48,765 13,854 19,031 317,306 254,481 1,241,775 789,655 - - - 365,657 327,991 2,077,159 231,442 5,426 48,765 268,335 2,299,350 1,508,884 624,905 (64,048) 626,909 6,137 16,687 (71,378). . 91,389 (339,668) 30,000 - - - - 53 - (580,000) - - - - - - - (580,000) 30,000 - - - - 53 - 44,905 (34,048) 626,909 6,137 16,687 (71,378) 91,442 (339,668) 112,800 42,468 118,149 19,913 (943) 282,918 (2,025,954) 892,834 157,705 8,420 745,058 26,050 15,744 211,540 (1,934,512) 553,166 (Continued) 81 Revenues: Taxes Special assessments Licenses and permits Fines and forfeitures Investment income Rental income Revenue from other agencies Charges for services Repayment of notes and loans Other revenues Total revenues Expenditures: Current: General government Public safety Public works Community services Community development Total expenditures Excess (deficiency) of revenues over (under) expenditures Other financing sources (uses): Transfers in Transfers out Total other financing sources (uses) ,Net change in fund balances Fund balances (deficit) at beginning of year Fund balances (deficit) at end of year CITY OF WEST COVINA Non -Major Special Revenue Funds . Combining Statement of Revenues, Expenditures and Changes in Fund Balances (Continued) Inmate BKK Public COPS Tree Welfare . Community Safety Grant 633,560 2 624 3,065 6,843 7,971 218,887 320 16,163 - - 322 16,787 3,065 640,403 226,858 25,033 - 96,000 .152,594 - - - 980 - 23,916 - 25,033 23,916 96,980 152,594 322 (8,246) (20,851) 543,423 74,264 - - (1,500,000) (600,000) - - - (1,500,000) (600,000) - 322 .(8,246) (1,520,851) (56,577) 74,264 224 15,758 1,534,205 285,840 25,109 546 7,512 13,354 229,263 99,373 82 Art in North WC Community Special Charter Public Azusa Fire Services Totals Assessments Cable Places Relinquishment Training Foundation 2007 2006 728,935 - - - - - 4,657,673 4,754,608 3,711,712 - - - - - 3,711,712 3,582,066 1,377 - - - - - 2,238 7,439 - - - - - - 952,056 1,060,522 143,672 20,265 1,096 75,576 - - 503,967 373,937 - - - - - - 5,510 4,077 - - - - - - 6,449,147 9,197,118 29,047 842 - - 5,270 - 1,564,858 1,569,615 - - - 393,587 476,213 - 300,000 71,184 - - 50 950,372 428,485 4,614,743 321,107 72,280 75,576 5,270 50 19,191,120 21,454,080 - 168,477 13,046 4,399,393 407 281,098 62,486 - 4,461,879 463,028 - 2,146 - 942,704 - - 942,704 2,146 152,864 (141,921) 72,280 (867,128) 3,124 (30,000) - (139,100) - - 192,177 110,475 1,474,666 1,184,812 10,377,386 9,820,590 5,873,924 5,083,591 553,018 571,866 18,471,171 16,771,334 50 719,949 4,682,746 30,053 30,000 (2,849,100) (1,495,000) (30,000) - (139,100) - - - (2,819,047) (1,465,000) 122,864 (141,921) (66,820) (867,128) 3,124 50 (2,099,098) 3,217,746 3,963,618 691,086 8,356 1,914,719 - - 11,714,031 8,496,285 4,086,482 549,165 (58,464) 1,047,591 3,124 50 9,614,933 11,714,031 83 CITY OF WEST COVINA Recreation Programs Fund Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual For the year ended June 30, 2007 Revenues: Investment income Rental income Charges for services Total revenues Expenditures: Current: Community services Total expenditures Net change in fund balances Fund balances at beginning of year Fund balances at end of year Variance Prior Final Positive Year Budget Actual (Negative) Actual $ 3,000 8,023 5,023 4,796 3,900 5,510 1,610, 4,077 1,360,551 1,264,039 (96,512) 1,209,155 1,367,451 1,277,572 (89,879) 1,218,028 1,530,750 1,232,813 297,937 1,174,358 1,530,750 1,232,813 297,937 1,174,358 (163,299) 44,759 208,058 43,670 144,751 144,751 - 101,081 $ (18,548) 189,510 208,058 144,751 84 CITY OF WEST COVINA Drug Enforcement Rebate Fund Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual For the year ended June. 30, 2007 Revenues: Investment income Revenue from other agencies Total revenues Expenditures: Current: Public safety Total expenditures Net change in fund balances Fund balances at beginning of year Fund balances at end of year Variance Prior Final Positive Year Budget Actual (Negative) Actual $ 1,000 2,394 1,394 2,185 14,000 26,450 12,450 70,276 15,000 28,844 13,844 72,461 78,615 79,565 (950) 31,810 78,615 79,565 (950) 31,810 (63,615) (50,721) 12,894 40,651 77,150 77,150 - 1 36,499 $ 13,535 26,429 12,894 77,150 No CITY OF WEST COVINA Business Improvement Tax Fund Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual For the year ended June 30, 2007 Variance Prior Final Positive Year Budget Actual (Negative Actual Revenues: Investment income $ - 1,753 1,753 1,409 Total revenues - 1,753 1,753 1,409 Expenditures: Current: General government - 3,700 (3,700) - Total expenditures - 3,700 (3,700) - Net change in fund balances - (1,947) (1,947) 1,409 Fund balances at beginning of year 43,921 43,921 - 42,512 Fund balances at end of year $ 43,921 41,974 (1,947) 43,921 86 1 1 1 t 1 1 1 1 1 1 1 1 F] CITY OF WEST COVINA Air Quality Improvement Fund Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual For the year ended June 30, 2007 Revenues: Investment income Revenue from other agencies Total revenues Expenditures: Current: General government Public Safety Public works Community services Total expenditures Excess (deficiency) of revenues over (under) expenditures Net change in fund balances Fund balances at beginning of year Fund balances at end of year M Variance Prior Final Positive Year Budget Actual (Negative Actual $ - 4,583 4,583 4,379 136,600 135,513 (1,087) 148,247 136,600 140,096 3,496 152,626 20,000 20,000 - - 64,000 26,046 37,954 52,804 49,936 35,664 14,272 26,402 84,664 87,356 (2,692) 38,735 218,600 169,066 - 49,534 117,941 (82,000) (28,970) 53,030 34,685 (82,000) (28,970) 53,030 34,685 130,903 130,903 - 96,218 $ 48,903 101,933 53,030 1307903 CITY OF WEST COVINA Proposition A Fund Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual For the year ended June 30, 2007 Revenues: Taxes Investment income. Revenue from other agencies Charges for services Other revenues Total revenues Expenditures: Current: General government Public works Community services - Total expenditures Excess (deficiency) of revenues over (under) expenditures - Net change in fund balances Fund balances at beginning of year Fund balances at end of year Variance Prior Final Positive Year Budget . Actual (Negative) Actual $ 1,780,432 1,799,474 19,042 1,796,475 - 59,500 59,500 29,795 102,408 102,402 (6) 120,881 6,000 5,679 (321) 6,906 - 550,000 550,000 - 1,888,840 2,517,055 628,215 1,954,057 494,782 199,236 29.5,546 - 1,927,429 1,683,157 244,272 1,547,252 2,422,211 1,882,393 539,818 1,547,252 (533,371) 634,662 1,168,033 406,805 (533,371) . 634,662 1,168,033 406,805 915,985 915,985 - 509,180 $ 382,614 1,550,647 1,168,033 915,985 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 CITY OF WEST COVINA Proposition C Fund Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual For the year ended June 30, 2007 Variance Prior Final Positive Year Budget Actual (Negative) Actual Revenues: Taxes $ 1,499,075 1,495,704 (3,371) 1,545,101 Investment income - 95,350 95,350 76,469 Total revenues 1,499,075 1,591,054 91,979 1,621,570 Expenditures: Current: General government - - - 42,995 Public works 2,541,518 1,763,454 778,064 539,318 Community services 347,570 279,673 67,897 356,686 Community development 327,707 124,875 202,832 - Total expenditures 3,216,795 2,168,002 1,048,793 938,999 Excess (deficiency) of revenues over (under) expenditures (1,717,720) (576,948) 1,140,772 682,571 Net change in fund balances (1,717,720) (576,948) 1,140,772 682,571 Fund balances at beginning of year 2,520,221 2,520,221 - 1,837,650 Fund balances at end of year $ 802,501 1,943,273 1,140,772 2,520,221 CITY OF WEST COVINA Traffic Safety Fund Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual For the year ended June 30, 2007 Revenues: Fines and forfeitures Investment income Total revenues Expenditures: Current: Public works Total expenditures Excess (deficiency) of revenues over (under) expenditures Other financing sources (uses): Transfers out Total other financing sources (uses) Net change in fund balances Fund balances at beginning of year Fund balances at end of year Variance Prior Final Positive Year Budget Actual (Negative) Actual $ 1,500,000 952,056 (547,944) 1,060,522 840 840 1,158 1,500,000 952,896 (547,104) 1,061,680 407,030 327,991 79,039 281,766 407,030 327,991 79,039 281,766 1,092,970 624,905 (468,065) 779,914 (1,180,000) (580,000) 600,000 (865,000) -(1,180,000) (580,000) 600,000 (865,000) (87,030) 44,905 131,935 (85,086) 112,800 112,800 - 197,886 $ 25,770 157,705 131,935 112,800 all 1 1 1 1 1 1 1 1 1 1 1 1 1 1 CITY OF WEST COVINA State Gas Tax Fund Schedule of Revenues, Expenditures and Changes in Fund Balances:- Budget and Actual For the year ended June 30, 2007 Revenues: Licenses and permits Investment income Revenue from other agencies Charges for services Other revenues Total revenues Expenditures: Current: Public works Total expenditures Excess (deficiency) of revenues over (under) expenditures Other financing sources (uses): Transfers in Total other financing sources (uses) Net change in fund balances Fund balances at beginning of year Fund balances at end of year Variance Prior Final Positive Year Budget Actual (Negative) Actual $ - 861 861 1,215 - 1,646 1,646 5,596 2,075,000 2,008,399 (66,601) 2,013,805 - 1,104 1,104 10,170 = 1,101 1,101 12,675 2,075,000 2,013,111 (61,889) 2,043,461 2,182,657 2,077,159 105,498 2,355,249 2,182,657 2,077,159 105,498 2,355,249 (107,657) (64,048) 43,609 (311,788) 30,000 30,000 - 30,000 30,000 30,000 - 30,000 (77,657) (34,048) 43,609 (281,788) 42,468 42,468 - 324,256 $ (35,189) 8,420 43,609 42,468 91 CITY OF WEST COVINA Traffic Congestion Relief Fund Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual For the year ended June 30, 2007 Revenues: Investment income Revenue from other agencies Other revenues Total revenues Expenditures: Current: Public works Total expenditures Net change in fund balances Fund balances (deficit) at beginning of year Fund balances (deficit) at end of year Variance Prior Final Positive Year Budget Actual (Negative) Actual $ - 36,800 36,800 2,193 470,000 821,551 351,551 501,249 - 6,965 470,000 858,351 388,351 510,407 946,653 231,442 715,211 376,547 946,653 231,442 715,211 376,547 (476,653) 626,909 1,103,562 133,860 118,149 118,149 - (15,711) $ (358,504) 745,058 1,103,562 118,149 92 1 1 1 1 1 1 1 1 1 CITY OF WEST COVINA Police Special Programs Fund Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual For the year ended June 30, 2007 Revenues: Investment income Other revenues Total revenues Expenditures: Current: Public safety Total expenditures Net change in fund balances ,Fund balances at beginning of year Fund balances at end of year 93 Variance Prior Final Positive Year Budget Actual (Negative) Actual $ - 993 993 633 13,070 10,570 (2,500) 7,123 13,070 11,563 (1,507) 7,756 16,975 5,426 11,549 4,269 16,975 5,426 11,549 4,269 (3,905) 6,137 10,042 3,487 19,913 19,913 - 16,426 $ 16,008 26,050 10,042 19,913 CITY OF WEST COVINA Transportation Development Act Fund Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual For the year ended June 30, 2007 Variance Prior Final Positive Year Budget Actual (Negative Actual Revenues: Investment income Revenue from other agencies Total revenues Expenditures: Current: Public works Total expenditures $ - 1,249 1,249 234 56,000 64,203 8,203 58,446 56,000 65,452 9,452 58,680 110,676 48,765 61,911 110,410 110,676 48,765 61,911 110,410 Excess (deficiency) of revenues over (under) expenditures Net change in fund balances Fund balances (deficit) at beginning of year Fund balances (deficit) at end of year (54,676) 16,687 71,363 (51,730) (54,676) 16,687 71,363 (51,730) (943) (943) - 50,787 $ (55,619) 15,744 71,363 (943) 1 1 1 1 1 CITY OF WEST COVINA Waste Management Fund Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual For the year ended June 30, 2007 Revenues: Investment income Revenues from other agencies Charges for services Other revenues Total revenues Expenditures: Current: Public works Community services Total expenditures Excess (deficiency) of revenues over (under) expenditures Net change in fund balances Fund balances at beginning of year Fund balances at end of year Variance Prior Final Positive Year Budget Actual (Negative) Actual $ - 7,661 7,661 6,074 - - - 55,030 223,570 189,296 (34,274) 221,083 441 - (441) - 224,011 196,957 (27,054) 282,187 16,750 13,854 2,896 2769736 254,481 22,255 233,625 2939486 268,335 25,151 233,625 (69,475) (71,378) (1,903) 48,562 (69,475) (71,378) (1,903) 48,562 282,918 282,918 - 234,356 $ 213,443 211,540 (1,903) 282,918 95 CITY OF WEST COVINA Grants Fund Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual For the year ended June 30, 2007 Variance Prior Final Positive Year Budget Actual (Negative) Actual Revenues: Investment income $ - 24,061 24,061 18,350 Revenue from other agencies 905,422 2,296,113 1,390,691 752,233 Charges for services 75,000 69,581 (5,419) 87,529 Other revenues - 984 984 - Total revenues 980,422 2,390,739 1,410,317 858,112 Expenditures: Current: Public safety 649,686 1,038,544 (388,858) 399,335 Public works 1,545,196 19,031 1,526,165 529,555 Community services 1,410,636 1,241,775 168,861 858,151 Total expenditures 3,605,518 2,299,350 1,306,168 1,787,041 Excess (deficiency) of revenues over (under) expenditures (2,625,096) 91,389 2,716,485 (928,929) Other financing sources (uses): Transfers in - 53 53 - Total other financing sources ,(uses) - 53 53 - Net change in fund balances (2,625,096) 91,442 2,716,538 (928,929) Fund balances (deficit) at beginning of year (2,025,954) (2,025,954) - (1,097,025) Fund balances (deficit) at end of year $ (4,651,050) (1,934,512) 2,716,538 (2,025,954) 96 CITY OF WEST COVINA Community Development Block Grant Fund Schedule of, Revenues, Expenditures and Changes in Fund Balances - Budget and Actual For the year ended June 30, 2007 Revenues: Investment income Revenue from other agencies Repayment of notes and loans Total revenues Expenditures: Current: General government Public safety Public works Community services Community development Total expenditures Net change in fund balances Fund balances (deficit) at beginning of year Fund balances (deficit) at end of year Variance Prior Final Positive Year Budget Actual (Negative) Actual $ - - - 1,132 1,243,154 775,629 (467,525) 3,114,746 500,000 393,587 (106,413) 476,213 1,743,154 1,169,216 (573,938) 3,592,091 29,124 261,260 36,266 224,994 458,743 684,251 317,306 366,945 1,334,736 1,014,742 789,655 225,087 626,505 500,000 ' 365,657 134,343 502,669 2,460,253 1,508,884 951,369 2,951,777 (717,099) (339,668) 377,431 640,314 892,834 892,834 - 252,520 $ 175,735 553,166 377,431 892,834 97 CITY OF WEST COVINA Tree Fund Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual For the year ended June 30, 2007 Variance Prior Final Positive Year Budget Actual (Negative Actual Revenues: Investment income Other revenues Total revenues Expenditures: Current: Public works Total expenditures Net change in fund balances Fund balances at beginning of year Fund balances at end of year $ - 2 2 320 320 322 322 61 61 2,000 - - - 2,000 322 322 (1,039) 224 224 - 2,163 $ 224 546 322 224 98 1 1 1 1 1 1 1 i 1 1 1 1 1 1 1 1 1 1 1 CITY OF WEST COVINA Inmate Welfare Fund Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual For the year ended June 30, 2007 Revenues: Investment income Other revenues Total revenues Expenditures: Current: Public safety Total expenditures Net change in fund balances Fund balances at beginning of year Fund balances at end of year Variance Prior Final Positive Year Budget Actual (Negative Actual $ - 624 624 517 15,000 16,163 1,163 27,375 15,000 16,787 1,787 27,892 19,500 25,033 (5,533) 19,137 19,500 25,033 (5,533) 19,137 (4,500) (8,246) (3,746) 8,755 15,758 15,758 - 7,003 $ 11,258 7,512 (3,746) 15,758 CITY OF WEST COVINA BKK Community Fund Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual For the year ended Jule 30, 2007 Revenues: Investment income Other revenues Total revenues Expenditures: Current: Public works Community services Total expenditures Excess .(deficiency) of revenues over _(under) expenditures Other financing sources (uses): Transfers out Total other financing sources (uses) Net change in fund balances Fund balances at beginning of year Fund balances at end of year Variance Prior Final Positive Year Budget Actual (Negative) Actual $ - 3,065 3,065 18,190 - - 373,159 3,065 3,065 391,349 1,142 - 1,142 90,874 26,818 23,916 2,902 15,607 27,960 23,916 4,044 106,481 (27,960) (20,851) 7,109 284,868 (1,500,000) (1,500,000) - - (1,500,000) (1,500,000) - - (1,527,960) (1,520,851) 7,109 284,868 11534,205 1,534,205 - 1,249,337 $ 6,245 13,354 7,109 1,534,205 100 1 1 1 1 1 1 i 1 1 1 1 1 1 1 1 1 1 1 CITY OF WEST COVINA Public Safety Fund Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual Revenues: Taxes Investment income Total revenues Expenditures: Current: General government Public safety Public works Total expenditures Excess (deficiency) of revenues over (under) expenditures For the year ended June 30, 2007 Variance Prior Final Positive Year Budget Actual (Negative) Actual $ 600,000 633,560 33,560 689,498 - 6,843 6,843 5,693 600,000 640,403 40,403 695,191 132,263 - 132,263 38,356 119,900 96,000 23,900 - 2,744 980 1,764 - 254,907 96,980 157,927 38,356 345,093 543,423 198,330 656,835 Other financing sources (uses): Transfers out (600,000) (600,000) - (600,000) Total other financing sources (uses) (600,000) (600,000) - (600,000) Net change in fund balances Fund balances at beginning of year Fund balances at end of year (254,907) (56,577) 198,330 56,835 285,840 285,840 - 229,005 $ 30,933 229,263 198,330 285,840 101 CITY OF WEST COVINA COPS Grant Fund Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual For the year ended June 30, 2007 Variance Prior Final Positive Year Budget Actual (Negative) Actual Revenues: Investment income Revenue from other agencies Total revenues Expenditures: Current: Public safety Total expenditures Net change in fund balances " Fund balances at beginning of year Fund balances (deficit) at end of year $' - 7,971 7,971 .1,792 160,000 218,887 58,887 162,205 160,000 226,858 66,858 163,997 237,653 152,594 85,059 203,018 237,653 152,594 85,059 203,018 (77,653) 74,264 151,917 (39,021) 25,109 25,109 - 64,130 $ (52,544) 99,373 151,917 25,109 102 1 i 1 i 1 1 1 1 1 1 1 1 1 1 1 i 1 1 CITY OF WEST COVINA Special Assessments .Fund Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual For the year ended June 30, 2007 Variance Prior Final Positive Year Budget Actual (Negative) Actual Revenues: Taxes $ 426,100 728,935 302,835 723,534 Special assessments 3,766,711 3,711,712 (54,999) 3,582,066 Licenses and permits - 1,377 1,377 6,224 Investment income - 143,672 143,672 113,918 Charges for services 10,000 29,047 19,047 34,772 Other revenues - - - 1,188 Total revenues 4,202,811 4,614,743 411,932 4,461,702 Expenditures: Current: General government - - - - Public works 4,457,372 4,399,393 57,979 3,825,689 Community development - 62,486 (62,486) 69,197 Total expenditures 4,457,372 4,461,879 (4,507) 3,894,886 Excess (deficiency) of revenues over (under) expenditures (254,561) 152,864 407,425 566,816 Other financing sources (uses): Transfers out (30,000) (30,000) - (30,000) Total other financing sources (uses) (30,000) (30,000) - (30,000) Net change in fund balances (284,561) 122,864 407,425 536,816 Fund balances at beginning of year 3,963,618 3,963,618 - 3,426,802 Fund balances at end of year $ 3,679,057 4,086,482 407,425 3,963,618 103 CITY OF WEST COVINA Charter Cable Fund Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual For the year ended June 30, 2007 Variance Prior Final Positive Year Budget Actual (Negative) Actual Revenues: Investment income $ - 20,265 20,265 25,952 Charges for services - 842 842 - Other revenues 150,000 300,000 150,000 - Total revenues 150,000 321,107 171,107 25,952 Expenditures: Current: General government 205,388 168,477 36,911 - Public safety 47,000 13,046 33,954 15,696 Public works 11,730 407 11,323 9,620 Community services 348,060 281,098 66,962 232,672 Total expenditures 612,178 463,028 149,150 257,988 Net change in fund balances (462,178) (141,921) 320,257 (232,036) Fund balances at beginning of year 691,086 691,086 - 923,122 Fund balances at end of year $ 228,908 549,165 320,257 691;086 Mid 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 CITY OF WEST COVINA Art in Public Places Fund Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual For the year ended June 30, 2007 Revenues: Investment income Other revenues Total revenues Expenditures: Current: Community development Total expenditures Excess (deficiency) of revenues over (under) expenditures Other financing sources (uses): Transfers out Total other financing sources (uses) Net change in fund balances Fund balances at beginning of year Fund balances (deficit) at end of year Variance Prior Final Positive Year Budget Actual (Negative) Actual $ - 1,096 1,096 268 - 71,184 71,184 - - 72,280 72,280 268 12,000 - 12,000 - 12,000 - 12,000 - (12,000) 72,280 84,280 268 (139,100) (139,100) - - (139,100) (139,100) - - (151,100) (66,820) 84,280 268 8,356 8,356 - 8,088 $ (142,744) (58,464) 84,280 8,356 105 CITY OF WEST COVINA North Azusa Relinquishment Fund Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual For the year ended June 30, 2007 Variance Prior Final Positive Year Budget Actual (Negative) Actual Revenues: Investment income $ - 75,576 75,576 53,143 Revenue from other agencies - - - 2,200,000 Total revenues - 75,576 75,576 2,253,143 Expenditures: Current: Public works 1,924,176 942,704 981,472 338,424 Total expenditures 1,924,176 942,704 981,472 338,424 Net change in fund balances (1,924,176) (867,128) 1,057,048 1,914,719 Fund balances at beginning of year 1,914,719 1,914,719 - - Fund balances (deficit) at end of year $ (9,457) 1,047,591 1,057,048 1,914,719 106 1 1 1 1 1 1 1 1 1 1 1 CITY OF WEST COVINA Fire Training Fund Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual For the year ended June 30, 2007 Variance Prior Final Positive Year Budget Actual (Negative) Actual Revenues: Revenue from other agencies - 5,270 5,270 - Total revenues - 5,270 5,270 - Expenditures: Current: Public safety - 2,146 (2,146) - Total expenditures - 2,146 (2,146) - Net change in fund balances - 3,124 3,124 - Fund balances at beginning of year - - - - Fund balances (deficit) at end of year $ - 3,124 3,124 - 107 CITY OF WEST COVINA West Covina Community Services Foundation Fund Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual For the year ended June 30, 2007 Variance Prior Final. Positive Year Budget Actual (Negative) Actual Revenues: Other revenues 50 50 - Total revenues 50 50 - - Expenditures: Current: Community services 50 - 50 - Total expenditures 50 - 50 - Net change in fund balances 50 50 - Fund balances at beginning of year - - - - Fund balances at end of year $ - 50 50 - r 108 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 MAJOR DEBT SERVICE FUNDS Debt Service Funds are used to account for the accumulation of resources for, and the payment of, governmental long-term debt principal and interest. The City of West Covina has the following Major Debt Service Funds: City Debt Service Fund - To account for the payment of principal and interest on the City's long- term debt issues. Commumty Development Commission Debt Service Fund - To account for the payment of principal and interest on long-term debt of the Community Development Commission. 109 CITY OF WEST COVINA City Debt Service Fund Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual For the year ended June 30, 2007 Revenues: Investment income Charges for services Other revenue Total revenues Expenditures: Current: General government Debt service: Principal Interest and fiscal charges Total expenditures Excess (deficiency) of revenues over (under) expenditures Other financing sources (uses): Transfers in Transfers out Issuance of long-term debt Payment to refunded bond escrow agent Total other financing sources (uses), Net change in fund balances Fund balances at beginning of year Fund balances at end of year Variance Prior Final Positive Year Budget Actual (Negative) Actual $ 1,098,787 1,092,359 (6,428) (727,157) 1,041,250 497,027 (544,223) - - - - 483,152 2,140,037 1,589,386 (550,651) (244,005) 312,258 1,0741508 1,954,507 (879,999) 130,000 2,977,205 2,706,637 270,568 1,892,472 4,051,713 4,661,144 (609,431) 2,334,730 (1,911,676) (3,071,758) (1,160,082) (2,578,735) 4,753,020 5,465,643 712,623 430,000 - (459,518) (459,518) (416,597) - - - 2,735,000 (2,727,525) 4,753,020 5,006,125 253,105 20,878 2,841,344 1,934,367 (906,977) (2,557,857) 17,244,570 17,244,570 - 19,802,427 $ 20,085,914 19,178,937 (906,977) 17,244,570 110 11 CITY OF WEST COVINA Community Development Commission Debt Service Fund Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual For the year ended June 30, 2007 Final. Budget Actual Revenues: Variance Prior Positive Year (Negative) Actual Taxes $ 17,042,500 20,750,602 3,708,102 19,052,184 Investment income 477,000 568,013 91,013 597,618 Other revenue - - - - Total revenues 17,519,500 21,318,615 3,799,115 19,649,802 Expenditures: Debt service: Principal 2,324,050 1,590,000 734,050 1,465,000 Interest and fiscal charges 7,556,730 6,613,786 942,944 6,077,381 Pass -through payments 2,476,900 2,568,343 (91,443) 3,199,441 Payment to refunded bond escrow agent 1,878,000 2,783,820 (905,820) 1,858,120 Total expenditures 14,235,680 13,555,949 679,731 12,599,942 Excess (deficiency) of revenues over (under) expenditures 3,283,820 7,762,666 4,478,846 7,049,860 Other financing sources (uses): Transfers in 1,484,480 459,518 (1,024,962) 416,597 Transfers out (5,011,500) (7,073,062) (2,061,562) (7,001,165) Total other financing sources (uses) (3,527,020) (6,613,544) (3,086,524) (6,584,568) Net change in fund balances (243,200) 1,149,122 1,392,322 465,292 Fund balances (deficit) at beginning of year (12,831,390) (12,831,390) - (13,296,682) Fund balances (deficit) at end of year $ (13,074,590) (11,682,268) 1,392,322 (12,831,390) 111 This page intentionally left blank ' � Pg Y ) 112 , 1 MAJOR AND NON -MAJOR CAPITAL PROJECTS FUNDS Capital Projects Funds are used to account for the purchase or construction of major capital facilities which are not financed by Proprietary Funds. Capital Projects Funds are ordinarily not used to account for the acquisition of furniture, fixtures, machinery, equipment and other relatively minor or comparatively short-lived capital assets. ' The City of West Covina has the following Major Capital Projects Fund: Cit�Capital Projects Fund — This fund accounts for all capital expenditures not being accounted for in the capital projects described below, or in other fund types. Community Development Commission Capital Projects Fund — This fund accounts for the ' financial resources to be used for property acquisition, improvement and rehabilitation within project areas authorized under provisions of the California Community Redevelopment Law. The City of West Covina has the following Non. -Major Capital Projects Funds: Construction Tax Fund — This fund accounts for monies received from developers. based on the construction of dwelling units and used primarily to construct public domain assets. Park Development Fund — This fund accounts for park fees received from residential developers to be used for new park construction. 1 113 Assets Cash and investments Receivables: Accounts Interest Total assets Liabilities and Fund Balances Liabilities: Accounts payable Other accrued liabilities Due to other funds Advances from other funds Total liabilities r CITY OF WEST COVINA Non -Major Capital Projects Funds Combining Balance Sheet June 30, 2007 Construction - Park Tax Development Totals 2007 2006 $ 510,785 1,809,148 2,319,933 2,919,756 - - - 2,200 25,873 14,733 40,606 17,823 $ 536,658 1,823;881 2,360,539 2,939,779 $ 71,397 22,267 93,664 103,230 8,563 875 9,438 153,053 84,519 84,519 - - - 19,000 79,960 107,661 187,621 275,283 Fund balances: Reserved for: Encumbrances 34,747 117,013 151,760 393,845 Unreserved: Designated for capital projects 421,951 1,599,207 2,021,158 2,270,651 Total fund balances 456,698 1,716,220 2,172,918 2,664,496 Total liabilities and fund balances $ 536,658 1,823,881 2,360,539 2,939,779 114 CITY OF WEST COVINA Non -Major Capital Projects Funds Combining Statement of Revenues, Expenditures and Changes in Fund Balances For the year ended June 30, 2007 Revenues: Taxes Investment income Rental income Charges for services Developer fees Other revenues Total revenues Expenditures: Current: General government Public safety Public works Community services Total expenditures Excess (deficiency) of revenues over (under) expenditures Other financing sources (uses): Transfers out Total other financing sources (uses) Construction . Park Totals Tax Development 2007 2006 $ 372,909 - 372,909 277,194 53,044 56,619 109,663 94,894 - 26,863 26,863 32,863 - 25,000 25,000 - - 1,462,535 1,462,535 7,884 - - - 25,000 425,953 1,571,017 1,996,970 437,835 15,218 560 15,778 12,821 78,352 - 78,352 - 160,182 - 160,182 246,958 92,973 841,263 934,236 376,606 346,725 841,823 1,188,548 636,385 79,228 729,194 808,422 (198,550) (1,300,000) (1,300,000) - (1,300,000) (1,300,000) - Net change in fund balances 79,228 (570,806) (491,578) (198,550) Fund balances at beginning of year 377,470 2,287,026 2,664,496 2,863,046 Fund balances at end of year $ 456,698 1,716,220 2,172,918 2,664,496 115 CITY OF WEST COVINA City Capital Projects Fund Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual For the year ended June 30, 2007 Revenues: Investment income Revenue from other agencies Charges for services Other revenues Total revenues Expenditures: Current: General government Public safety Public works Community services Debt service: Costs of issuance Total expenditures Excess (deficiency) of revenues over (under) expenditures Other financing sources (uses): Transfers in Transfers out Issuance of long -tern debt Total other financing sources (uses) Net change in fund balances Fund balances at beginning of year Fund balances at end of year Final Budget Actual $ 864,960 1,411,259 - 522,611 800,000 800,000 1,664,960 2,733,870 Variance Prior Positive Year (Negative) Actual 546,299 366,665 - 249,328 522,611 - 1,068,910 615,993 1,155,000 656,472 498,528 174,770 7,262 157 7,105 760 1,247,611 372,275 875,336 21,912 47,236,990 23,270,484 23,966,506 5,434,622 757,906 294,764 463,142 - 50,404,769 24,594,152 25,810,617 5,632,064 (48,739,809) (21,860,282) 26,879,527 (5,016,071) 19,434,788 19,134,788 (300,000) - (3,545,094) (4,257,717) (712,623) - 18,875,000 18,005,000 (870,000) - 34,764,694 32,882,071 (1,882,623) - (13,975,115) 11,021,789 24,996,904 (5,016,071) 6,953,572 6,953,572 - 11,969,643 $ (7,021,543) 17,975,361 24,996,904 6,953,572 116 CITY OF WEST COVINA ' Community Development Commission Capital Projects Fund Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual For the year ended June 30, 2007 Variance Prior ' Final Budget Actual Positive (Negative) Year Actual Revenues: Investment income $ 454,000 1,180,019 726,019 743,373 Rental income - 12,600 12,600 132,688 Repayment of notes and loans 250,000 594,633 344,633 878,883 Gain on sale of asset 6,700,000 6,611,788 (88,212) - ' Other revenues 53,200 319,108 265,908 1,388,914 Total revenues 7,457,200 8,718,148 1,260,948 3,143,858 ' Expenditures: Current: Community development 5,979,704 5,976,279 3,425 9,252,125 Debt service: 1 Principal Interest and fiscal charges 455,000 800,750 470,000 739,016 (15,000) 61,734 455,000 796,569 Total expenditures 7,235,454 7,185,295 50,159 10,503,694 Excess (deficiency) of ' revenues over (under) expenditures 221,746 1,532,853 1,311,107 (7,359,836) ' Other financing sources (uses): Transfers in 2,400,000 6,754,062 4,354,062 5,444,288 ' Transfers out (11,280,168) (11,295,688) (15,520) - Total other financing sources (uses) (8,880,168) (4,541,626) 4,338,542 5,444,288 Net change in fund balances (8,658,422) (3,008,773) 5,649,649 (1,915,548) ' Fund balances at beginning of year g g Y 18,878,685 18,878 685 - 20 794,233 , Fund balances at end of year $ 10,220,263 15,869,912 5,649,649 18,878,685 117 CITY OF WEST COVINA Construction Tax Fund Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual For the year ended June 30, 2007 Revenues: Taxes Investment income Total revenues Expenditures: Current: General government Public Safety Public works Community services Total. expenditures Excess (deficiency) of revenues over .(under) expenditures Net change in fund balances Fund balances at beginning of year Fund balances at end of year Variance Prior Final Positive Year Budget Actual (Negative Actual $ 125,000 372,909 247,909 277,194 - 53,044 53,044 12,794 125,000 425,953 300,953 289,988 146,000 15,218 130,782 12,821 169,988 78,352 91,636 - 227,510 160,182 67,328 246,958 132,068 92,973 39,095 7,554 675,566 346,725 328,841 267,333 (550,566) 79,228 629,794 22,655 (550,566) 79,228 629,794 22,655 377,470 377,470 - 354,815 $ (173,096) 456,698 629,794 377,470 118 1 1 1 1 CITY OF WEST COVINA Park Development Fund Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual For the year ended June 30, 2007 Revenues: Investment income Rental income Charges for services Developer fees Other income Total revenues Expenditures: Current: General Government Community services Total expenditures Excess (deficiency) of revenues over (under) expenditures Other financing sources (uses): Transfers out Total other financing sources (uses) Net change in fund balances Fund balances at beginning of year Fund'balances at end of year Variance Prior Final Positive Year Budget Actual (Negative) Actual $ - 56,619 56,619 82,100 22,500 26,863 4,363 32,863 - 25,000 25,000 - 264,158 1,462,535 1,198,377 7,884 200,000 - (200,000) 25,000 486,658 1,571,017 1,084,359 147,847 659 560 99 1,594,766 841,263 753,503 369,052 1,595,425 841,823 753,602 369,052 (1,108,767) 729,194 1,837,961 (221,205) (1,500,000) (1,300,000) 200,000 - (1,500,000) (1,300,000) 200,000 (2,608,767) (570,806) 2,037,961 (221,205) 2,287,026 2,287,026 - 2,508,231 $ (321,741) 1,716,220 2,037,961 2,287,026 119 (This page intentionally left blank) r� 120 L IPROPRIETARY FUND TYPES Enterprise Funds account for operations that are financed and.operated in a manner similar to ' private business enterprises. The City of West Covina has the following Non -Major Enterprise Fund: ' Computer Service Fund — This fund accounts for sales and expenses related to the computer services provided by the Police Department to other public safety agencies. 1 Internal Service Funds are used to account for the financing of goods or services provided by one department to other departments of the City on a cost reimbursement basis. The City of West Covina has the following Non -Major Internal Service Funds: Fleet Management Fund — This fund provides maintenance on materials and supplies for City ' vehicles, and other gasoline or diesel powered equipment. Self -Insurance Fund — This fund accounts for the use of funds that are charged to departments for the administration and payment of claims under the City's self -insured general liability and workers' compensation programs. Vehicle Replacement Fund — This fund provides for replacement of City Vehicles. 1 1 I 1 1 1 121 Assets Current assets Cash and investments Receivables: Accounts Interest Inventory Prepaid items Total current assets Capital assets: Construction in progress Other capital assets Less accumulated depreciation Capital assets, net Total assets Liabilities and Net Assets Liabilities: Current liabilities: Accounts payable Other accrued liabilities Due to other funds Current portion of: Claims payable Compensated absences Total current liabilities Non -current liabilities: Claims and judgments Compensated absences payable Total long-term liabilities Total liabilities Net assets: Invested in capital assets Unrestricted Total net assets CITY OF WEST COVINA Internal Service Funds Combining Statement of Net Assets June 30, 2007 Fleet Self- Vehicle Management Insurance Replacement Totals 2007 2006 $ - 8,697,634 883,196 9,580,830 9,472,974 179,082 - 71,950 6,740 - 6,740 8,948,666 - 179,082 66,591 7,397 79,347 51,285 6,740 27,676 - - 31,957 890,593 9,845,999 9,650,483 38,977 - 156,351 195,328 36,275 3,794,740 - - 3,794,740 3,894,936 (2,848,227) - - (2,848,227) (2,798,565) 985,490 - 156,351 1,141,841 1,132,646 992,230 8,948,666 1,046,944 10,987,840 10,783,129 94,657 7,859 1,429 103,945 244,412 11,283 7,075 - 18,358 17,806 58,959 61,089 - 120,048 313,022 - 2,265,524 - 2,265,524 1,302,649 12,358 7,046 - 19,404 17,888 177,257 2,348,593 1,429 2,527,279 1,895,777 - 4,210,285 - 4,210,285 4,343,969 49,169 41,502 - 90,671 83,119 49,169 4,251,787 - 4,300,956 4,427,088 226,426 6,600,380 1,429 6,828,235 6,322,865 985,490 - 156,351 1,141,841 1,132,646 (219,686) 2,348,286 889,164 3,017,764 3,327,618 $ 765,804 2,348,286 1,045,515 4,159,605 4,460,264 122 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 CITY OF WEST COVINA Internal Service Funds Combining Statement of Revenues, Expenses and Changes in Net Assets For the year ended June 30, 2007 Operating revenues: Charges for services Other revenues Total operating revenues Operating expenses: Personnel services Cost of sales, services and operations Depreciation Insurance and claims paid Total operating expenses Operating income (loss) Nonoperating revenues (expenses): Investment income Total nonoperating revenues (expenses) Income (loss) before transfers Transfers in Change in net assets Net assets at beginning of year Net assets at end of year Fleet Self- Vehicle Management Insurance Replacement $ 1,471,481 3,191,755 - 1,689 - - 1,473,170 3,191,755 - 543,739 300,051 940,917 328,562 149,858 - - 3,089,565 1,634,514 3.718,178 (161,344) (526,423) (161,344) Totals 2007 2006 4,663,236 5,382,654 1,689 6,061 4,664,925 5,388,715 843,790 799,391 - 1,269,479 1,137,332 - 149,858 232,971 3,089,565 1,837,075 5,352,692 4,006,769 - (687,767) 1,381,946 341,593 45,515 387,108 218,737 341,593 (184,830) 45,515 387,108 218,737 45,515 (300,659) 1,600,683 1'11 1'1 1 (161,344) (184,830) 45,515 (300,659) 2,600,683 927,148 2,533,116 1,000,000 4,460,264 1,859,581 $ 765,804 2,348,286 1,045,515 4,159,605 4,460,264 123 CITY OF WEST COVINA Internal Service Funds Combining Statement of Cash Flows For the year ended June 30, 2007 Cash flows from operating activities: Cash received from user departments Cash payments to suppliers for goods and services Cash payments to employees for services Net cash provided by (used for) operating activities Cash flows from noncapital financing activities: Cash received from other funds Cash paid to other funds Net cash provided by (used for) noncapital financing activities Cash flows from capital and related financing activities: Cash paid for acquisition of capital assets Net cash proved by (used for) capital and related financing activities Cash flows from investing activities: Interest received on investments Net cash provided by (used for) investing activities Net increase (decrease) in cash and cash equivalents Cash and cash equivalents at beginning of year Cash and cash equivalents at end of year Fleet Self- Vehicle Management Insurance Replacement Totals 2007 2006 $ 1,473,170 3,079,264 - 4,552,434 5,392,463 (924,848) (2,694,008) 1,429 (3,617,427) (2,914,791) (536,114) (298,056) - (834,170) (777,445) 12,208 87,200 1,429 100,837 1,700,227 - - - - 1,259,230 (9,506) (183,468) - (192,974) - (9,506) (183,468) - (192,974) 1,259,230 (2,702) - (156,351) (159,053) (31,922) (2,702) - (156,351) (159,053) (31,922) - 320,928 38,118 359,046 185,513 - 320,928 38,118 359,046 185,513 - 224,660 (116,804) 107,856 3,113,048 - 8,472,974 11000,000 9,472,974 6,359,926 $ - 8,697,634 883,196 9,580,830 9,472,974 124 1 1 1 1 1 i 1 1 1 i Reconciliation of operating income (loss) to net cash provided by (used for) operating activities: Operating income (loss) Adjustments to reconcile operating income (loss) to net cash provided by (used for) operating activities: Depreciation (Increase) decrease in accounts receivable (Increase) decrease in inventory (Increase) decrease in prepaids and other assets Increase (decrease)in accounts payable Increase (decrease)in other accrued liabilities Increase (decrease) in compensated absences Increase (decrease) in claims and judgements payable Total adjustments Net cash provided by (used for) operating activities CITY OF WEST COVINA Internal Service Funds Combining Statement of Cash Flows Fleet Self- Vehicle Management Insurance Replacement Totals 2007 2006 $ (161,344) (526,423) - (687,767) 1,381,946 149,858 - - 149,858 232,971 - (112,491) - (112,491) 3,748 20,936 - - 20,936 55,889 - 31,957 - 31,957 (10,707) (4,867) (137,029) 1,429 (140,467) (15,871) 291 261 - 552 6,450 7,334 1,734 - 9,068 15,496 - 829,191 - 829,191 30,305 173,552 613,623 1,429 788,604 318,281 $ 12,208 87,200 1,429 100,837 1,700,227 125 (This page intentionally left blank) 126 AGENCY FUND Agency Funds account for monies held by the City in a trustee capacity as an agent for individuals, private organizations and other governmental units. The City's Agency Funds are as follows: Special Deposits Agency's Fund — This fund is used to account for developer funds placed on deposit with the City pending either a return to the depositor or disbursement by the City on behalf of the depositor to pay for studies and other developer expenses. 1 1 r I r 1 127 Assets Cash and investments Accounts receivable Total assets Liabilities Accounts payable Deposits Total liabilities CITY OF WEST COVINA Agency Fund , Statement of Changes in Assets and Liabilities For the year ended June 30, 2007 Balance at Balance at July 1, 2006 Additions Deletions June 30, 2007 SPECIAL DEPOSITS AGENCY FUND $ 199,046 3,381,369 (2,553,217) 1,027,198 928,692 15,500 (943,274) 918 $ 1,127,738 3,396,869 (3,496,491) 1,028,116 $ 325,087 306,188 (563,175) 68,100 802,651 3,681,071 (3,523,706) 960,016- $ 1,127,738 3,987,259 (4,086,881) 1,028,116 128. It] Statistical Section (Unaudited) This part of the City of West Covina's 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. Financial Trends — These schedules contain information to help the reader to understand how the City's financial performance and well-being have changed over time. 1. Net Assets by Component 2. Changes in Net Assets 3. Changes in Net Assets — Governmental Activities 4. Changes in Net Assets — Business Type Activities 5. Fund Balances of Governmental Funds 6. Changes in Fund Balances — Governmental Funds Revenue Capacity — These schedules contain information to help the reader assess the City's most significant own -source revenue. 7. Assess Value and Estimated Actual Value of Taxable Property ' 8. Direct and Overlapping Property Tax Rates 9. Principal Property Tax Payers 10. Property Tax Levies and Collections Debt Capacity — 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. 11. Ratios of Outstanding Debt by Type 12. Ratio of General Bonded Debt Outstanding 13. Direct and Overlapping Debt 14. Legal Debt Margin Information 15. Pledged — Revenue Coverage Demographic and Economic Information — These schedules offer demographic and economic indicators to help the reader understand the environment within the City's financial activities take place. 16. Demographic and Economic Statistics 17. Principal Employers Operating Information — These schedules contain service 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. 18. Full -Time and Part -Time 19. Operating Indicators by Functions 20. Capital Asset Statistics by Function Sources: Unless otherwise noted, the information in these schedules is derived from the comprehensive annual financial reports for the relevant year. 129 (This page intentionally left blank) 130 CITY OF WEST COVINA Table 1 Net Assets by Component Last Five Fiscal Years (accrual basis of accounting) Fiscal Year ' 2003 2004 2005 2006 2007_ Governmental activities: Invested in capital assets, net of related debt $ 148,947,725 146,195,649 143,792,663 144,030,127 139,413,253 Restricted 110,501,120 106,938,430 104,865,107 99,990,727 88,484,572 Unrestricted 3,655,287 2,406,084 140,122 (3,710,829) 20,796,530 1 Total governmental activities net assets $ 263,104,132 255,540,163 248,797,892 240,310,025 248,694,355 Business -type activities: Invested in capital assets, ' net of related debt $ 383,176 458,875 136,937 193,706 303,147 Restricted - - - - - ' Unrestricted Total business -type activities net assets 2,015,309 1,692,357 1,832,618 1,469,994 721,839 1,024,986 $ 2,398,485 2,151,232 1,969,555 1,663,700 Primary government: ' Invested in capital assets, net of related debt $ 149,330,901 $146,654,524 143,929,600 144,223,833 139,716,400 Restricted 110,501,120 106,938,430 104,865,107 99,990,727 88,484,572 ' Unrestricted 5,670,596 4,098,441 1,972,740 (2,240,835) 21,518,369 Total primary government net assets $ 265,502,617 $257,691,395 250,767,447 241,973,725 249,719,341 The City of West Covina implemented GASB 34 for the fiscal year ended June 30, 2003. Information prior to the implementation of GASB 34 is not available. ' Source: City of West Covina Finance Deparment 1 131 CITY OF WEST COVINA Table 2 Changes in Net Assets Last Five Fiscal Years (accrual basis of accounting) Fiscal Year 2003 2004 2005 2006 2007 Expenses: Governmental activities: General government $ 3,578,429 $ 2,314,558 2,919,887 1,594,760 46,328 Public safety 30,258,976 33,172,116 38,436,098 38,433,238 42,186,533 Public works 18,043,497 16,803,123 19,642,927 20,696,562 19,322,212 Community services 6,400,613 7,911,247 4,144,990 6,482,112 5,167,297 Community development 5,545,289 6,438,979 6,761,102 11,245,539 9,610,651 Interest on long-term debt 5,007,946 4,039,240 5,001,981 7,714,047 8,320,239 Total governmental activities expenses 68,834,750 70,679,263 76,906,985 86,166,258 84,653,260 Business -type activities: Simulator 254,867 241,047 - - - Computer enterpise 1,372,798 2,023,376 2,212,802 2,098,690 2,470,811 Total business -type activities expenses 1,627,665 2,264,423 2,212,802 2,098,690 2,470,811 Total primary government expenses 70,462,415 72,943,686 79,119,787 88,264,948 87,124,071 Program revenues: Governmental activities: Charges for services: General government 22,486 1,271,852 1,377,178 2,767,383 861,565 Public safety 1,754,863 1,772,859 2,562,910 3,310,988 3,141,098 Public works 3,810,930 3,763,540 3,610,577 5,297,940 6,339,196 Community services 1,277,251 1,471,603 1,546,169 1,454,683 1,526,866 Community development 969,865 154,837 223,938 302,677 537,813 Operating grants and contributions 9,850,635 9,833,967 10,802,517 11,614,595 8,607,221 Capital grants and contributions 346,125 1,064,756 378,493 285,078 2,714,668 Total governmental activities program revenues 18,032,155 19,333,414 20,501,782 25,033,244 23,728,427 Business -type activities: Charges for services: Simulator 90,336 79,903 - - - Computer enterprise 1,569,556 2,165,999 1,992,662 1,721,715 1,765,224 Operating grants and contributions - - - - - Capital grants and contributions - - - - - Total business -type activities program revenues 1,659,892 2,245,902 1,992,662 1,721,715 1,765,224 Total primary government program revenues 19,692,047 21,579,316 22,494,444 26,754,959 25,493,651 (Continued) 132 CITY OF WEST COVINA Table 2 Changes in Net Assets Last Five Fiscal Years (accrual basis of accounting) Fiscal Year 2003 2004 2005 2006 2007 Net revenues (expenses): Governmental activities (50,802,595) (51,345,849) (56,405,203) (61,133,014) (60,924,833) Business -type activities 32,227 (18,521) (220,140) (376,975) (705,587) Total net revenues (expenses) (50,770,368) (51,364,370) (56,625,343) (61,509,989) (61,630,420) General revenues and other changes in net assets: Governmental activities: Taxes: Property taxes 13,711,795 16,107,447 17,565,368 27,614,922 32,458,314 Sales tax 13,333,877 14,355,566 14,522,220 14,216,986 14,056,880 Franchise tax 2,425,160 2,617,462 2,870,211 2,845,521 2,874,165 Othertaxes 3,733,940 4,028,136 2,959,329 3,433,966 4,454,217 Motor vehicle in lieu, unrestricted 6,291,597 5,054,209 7,044,997 2,606,079 650,304 Investment income 5,543,268 44,464 2,858,850 1,993,102 6,919,306 Other general revenues 254,980 1,324,596 2,132,720 (65,429) 7,895,977 Transfers - 250,000 137 - - Total governmental activities 45,294,617 43,781,880 49,953,832 52,645,147 69,309,163 Business -type activities: Investment income 30,545 21,268 38,600 71,120 66,873 Transfers - (250,000) (137) - - Total business -type activities 30,545 (228,732) 38,463 71,120 66,873 Total primary government 45,325,162 43,553,148 49,992,295 52,716,267 69,376,036 Changes in net assets Governmental activities (5,507,978) (7,563,969) (6,451,371) (8,487,867) 8,384,330 Business -type activities 62,772 (247,253) (181,677) (305,855) (638,714) Total primary government $(5,445,206) (7,811,222) (6,633,048) (8,793,722) 7,745,616 The City of West Covina implemented GASB 34 for the fiscal year ended June 30, 2003. Information prior to the implementation of GASB 34 is not available. Source: City of West Covina Finance Department 11 133 CITY OF WEST COVINA Changes in Net Assets - Governmental Activities Last Five Fiscal Years (accrual basis of accounting) 2003 Expenses: General government $ 3,578,429 Public safety 30,258,976 Public works 18,043,497 Community services 6,400,613 Community development 5,545,289 Interest on long-term debt 5,007,946 .Total governmental activities expenses 68,834,750 Program revenues: Charges for services: General government 22,486 Public safety 1,754,863 Public works 3,810,930 Community services 1,277,251 Community development 969,865 Operating grants and contributions 9,850,635 Capital grants and contributions 346,125 Total governmental activities program revenues 18,032,155 Net program revenues (expenses) (50,802,595) General revenues and other changes in net assets: Taxes: Property taxes 13,711,795 Sales tax 13,333,877 Franchise tax 2,425,160 Other taxes 3,733,940 Motor vehicle in lieu, unrestricted 6,291,597 Investment income 5,543,268 Other general revenues 254,980 Transfers - Total governmental activities 45,294,617 Changes in net assets - governmental activities $ (5,507,978) Fiscal Year Table 3 2004 2005 2006 2007 ' 2,314,558 2,919,887 1,594,760 46,328 33,172,116 16,803,123 38,436,098 19,642,927 38,433,238 20,696,562 42,186,533 19,322,212 , 7,911,247 4,144,990 6,482,112 5,167,297 6,438,979 6,761,102 11,245,539 9,610,651 4,039,240 5,001,981 7,714,047 8,320,239 , 70,679,263 76,906,985 86,166,258 84,653,260 , 1,271,852 1,377,178 2,767,383 861,565 1,772,859 2,562,910 3,310,988 3,141,098 3,763,540 3,610,577 5,297,840 6,339,196 1,471,603 1,546,169 1,454,683 1,526,866 , 154,837 223,938 302,677 537,813 9,833,967 10,802,517 11,614,595 8,607,221 1,064,756 378,493 285,078 2,714,668 ' 19,333,414 20,501,782 25,033,244 23,728,427 (511,345,849) (56,405,203) (61,133,014) (60,924,833) , 16,107,447 17,565,368 27,614,922 32,458,314 14,355,566 14,522,220 14,216,986 14,056,880 2,617,462 2,870,211 2,845,521 2,874,165 4,028,136 2,959,329 3,433,966 4,454,217 5,054,209 7,044,997 2,606,079 650,304 44,464 2,858,850 1,993,102 6,919,306 1,324,596 2,132,720 (65,429) 7,895,977 250,000 137 - - 43,781,880 49,953,832 52,645,147 69,309,163 (7,563,969) (6,451,371) (8,487,867) 8,384,330 The City of West Covina implemented GASB 34 for the fiscal year ended June 30, 2003. Information prior to the implementation of GASB 34 is not available. Source: City of West Covina Finance Department 134 CITY OF WEST COVINA Changes in Net Assets - Business -type Activities Last Five Fiscal Years (accrual basis of accounting) Expenses: Simulator Computer Enterprise Total business -type activities expenses Program revenues: Charges for services: Simulator Computer Enterprise Operating grants and contributions Capital grants and contributions Total business -type activities program revenues Net revenues (expenses) General revenues and other changes in net assets: Investment income Transfers Total business -type activities Changes in net assets - business -type activities Fiscal Year 2003 2004 2005 2006 $ 254,867 241,047 - - 1,372,798 2,023,376 2,212,802 2,098,690 1,621,665 2,264,423 2,212,802 2,098,690 90336 79,903 1569556 2,165,999 1,992,662 1,721,715 Table 4 2007 2,470,811 2,470,811 1,765,224 1,659,892 2,245,902 1,992,662 1,721,715 1,765,224 32,227 (18,521) (220,140) (376,975) (705,587) 30,545 21,268 38,600 71,120 66,873 - (250,000) (137) - - 30,545 (228,732) 38,463 71,120 66,873 $ 62,772 (247,253) (181,677) (305,855) (638,714) The City of West Covina implemented GASB 34 for the fiscal year ended June 30, 2003. Information prior to the implementation of GASB 34 is not available. Source: City of West Covina Finance Department 135 CITY OF WEST COVINA Table 5 Fund Balances of Governmental Funds Last Five Fiscal Years (modified accrual basis of accounting) Fiscal Year 2003 2004 2005 2006 2007 General fund: Reserved $ 28;565,395 24,398,011 -24,201,596 24,954,584 24,793,675 Unreserved' 29,486,397 24,427,158 23,513,760 23,982,187 19,315,808 Total general fund 58,051,792 48,825,169 47,715,356 48,936,771 44,109,483 All other governmental funds: Reserved 21,204,178 34,406,256 44,606,915 25,188,543 42,527,670 Unreserved, reported in: Special revenue funds 8,434,845 6,021,975 5,980,930 9,981,374 8,293,679 Capital projects funds 5,874,255 (1,654,836) 929,735 12,139,928 4,134,045 Debt service funds (4,022,064) (4,625,186) (888,628) (2,685,881) (1,825,601) Total all other governmental funds $ 31,491,214 34,148,209 50,628,952 44,623,964 53,129,793 The City of West Covina has elected to show only five years of data for this schedule. Source: City of West Covina Finance Department 136 CITY OF WEST COVINA Table 6 Changes in Fund Balances of Governmental Funds Last Five Fiscal Years (modified accrual basis of accounting) Fiscal Year 2003 2004 2005 2006 2007 Revenues: ' Taxes $ 43,507,485 47,634,431 49,046,990 58,464,794 62,801,264 Special assessments 3,532,950 3,311,896 3,448,956 3,582,066 3,711,712 Licenses and permits 1,101,778 1,425,077 1,046,759 1,336,564 1,833,239 ' Fines and forfeitures Investment income 1,219,531 8,790,949 1,410,536 3,564,751 1,264,600 8,239,221 1,168,842 5,807,699 1,106,271 9,544,547 Rental income 436,755 593,486 589,564 266,516 223,668 Intergovernmental 9,607,367 8,586,703 12,052,408 12,301,929 7,491,065 Charges for services 1,861,498 2,279,000 3,533,169 4,764,618 5,446,093 ' Repayment of notes and loans 4,534,914 1,877,550 2,336,958 1,355,096 988,220 Developer fees - 916,394 378,493 7,884 1,462,535 Other Total revenues 1,259,634 75,852,861 1,624,656 2,517,164 2,566,819 91,622,827 8,903,148 73,224,470 84,454,282 103,511,762 Expenditures Current: ' General government 5,327,608 4,230,885 4,790,513 4,912,513 5,478,534 Less interfund revenues (1,796,311) (1,942,452) (1,864,101) (1,881,624) (3,069,508) ' Public safety Public works 29,767,232 13,504,313 34,037,594 10,996,162 37,643,249 12,937,191 39,996,407 14,269,148 41,602,661 15,623,128 Community services 11,655,366 10,630,005 8,337,754 11,857,937 31,362,253 Community development 9,326,955 8,814,434 5,229,820 10,385,511 7,120,280 Debt service: ' Principal retirement 2,258,871 1,807,869 2,200,464 2,050,000 4,014,507 Interest and fiscal charges 7,315,734 7,664,295 7,901,882 8,766,422 10,059,439 ' Cost of issuance Pass -through payments 191,724 3,395,174 - 4,067,098 - 4,817,371 - 3,199,441 294,764 2,568,343 Developer agreement payments - 1,858,120 2,783,820 Total expenditures 80,946,666 80,305,890 81,994,143 95,413,875 117,838,221 Excess (deficiency) of revenues over (under) expenditures (5,093,805) (7,081,420) 2,460,139 (3,791,048) (14,326,459) ' Other financing sources (uses): Transfers in 7,564,948 8,781,210 9,842,137 9,342,762 33,024,064 Transfers out (7,564,948) (8,531,210) (10,140,446) (10,342,762) (33,024,064) ' Issuance of bonds 5,444,192 261,792 13,500,000 2,735,000 18,005,000 Gain/ (loss) on sale of property (1,041,331) Payment to refunded bond escrow agent - - - (2,727,525) - Total other financing sources (uses) 4,402,861 511,792 13,201,691 (992,525) 18,005,000 Net change in fund balances $ (690,944) (6,569,628) 15,661,830 (4,783,573) 3,678,541 Debt service as a percentage of noncapital'expenditures 18.9% 18.9% 19.9% 18.0% 23.6% ' The City of West Covina has elected to show only five years of data for this schedule. Source: City of West Covina Finance Department 137 CITY OF WEST COVINA Assessed Value and Estimated Actual Value of Taxable Property Last Ten Fiscal Years (in thousands of dollars) City Fiscal Year Taxable Ended Less: Assessed June 30 Secured Non- Unitary Unsecured Exemptions Value 1998 4,044,435 371 122,442 '213,081 4,380,329 1999 4,274,386 372 136,853 97,999 4,509,610 2000 4,487,480 371 143,022 113,337 4,744,210 2001 4,683,272 371 137,519 86,107 4,907,269 2002 5,176,454 371 151,040 (128,700) 5,199,165 2003 5,510,228 371 146,482 (132,460) 5,524,621 2004 5,934,864 1,388 146,871 (127,293) 5,955,830 2005 6,356,011 464 147,894 (159,992) 6,344,377 2006 7,054,172 464 151,645 (183,443) 7,022,838 2007 7,733,914 464 161,239 (179,703) 7,715,914 NOTE: In 1978 the voters of the State of California passed Proposition 13 which limited property taxes to a total maximum rate of 1 % based upon the assessed value of the property being taxed. Each year, the assessed value of property may be increased by an "inflation factor' (limited to a maximum increase of 2%). With few exceptions, property is only re -assessed at the time that it is sold to a new owner. At that point, the new assessed value is reassessed at the purchase price of the property sold. The assessed valuation data shown above represents the only data currently available with respect to the actual market value of taxable property and is subject to the limitations described above. Source: HdL Coren & Cone, Los Angeles Assessor Combined Tax Rolls 138 s 1 1 1 1 Table 7 Community Development Commission Less: Secured Unsecured Exemptions Taxable Assessed Value City + CDC Total Taxable Assessed Value Total Direct Tax Rate 888,980 96,927 (66,131) 919,776 5,300,105 13.985% 919,202 104,642 (58,875) 964,969 5,474,579 13.985% 1,022,180 108,050 (91,813) 1,038,417 5,782,627 13.985% 1,200,574 104,795 (56,215) 1,249,154 6,156,423 13.985% 1,303,935 136,767 (97,811) 1,342,891 6,542,056 13.985% 1,388,741 133,358 , (83,020) 1,439,079 6,963,700 13.985% 1,459,309 132,127 (103,577) 1,487,859 7,443,689 13.985% 1,547,925 132,801 (111,853) 1,568,873 7,913,250 13.985% 1,723,957 137,934 (118,531) 1,743,360 8,766,198 13.985% 1,895,168 146,336 " (123,048) 1,918,456 9,634,370 13.985% 139 CITY OF WEST COVINA Direct and Overlapping Property Tax Rates (Rate per $100 of assessed value) (Tax Rate Area 9495) Last Ten Fiscal Years Roll Year 1998 1999 2000 2001 2002 City Prop 13 Rate: City of West Covina Sewer Maintenance District $0.00313 $0.00313 $0.00313 $0.00313 $0.00313 City of West Covina Tax District I 0.13671 0.13671 0.13671 0.13671 0.13671 City Direct Rate $0.13984 $0.13984 $0.13984 $0.13984 $0.13984 Children's Institutional Tuition Fund (400.21) $0.00288 $0.00288 $0.00288 $0.00288 $0.00288 County Sanitation District No. 22 Operating (066.85) 0.01414 0.01414 0.01414 0.01414 0.01414 County School Services (400.15) 0.00145 0.00145 0.00145 0.00145 0.00145 County School services Fund West Covina (985.06) 0.00785 0.00785 0.00785 0.00785 0.00785 Development Ctr Handicapped Minors West Covina (98) 0.00087 0.00087 0.00087 0.00087 0.00087 Educational Revenue Augmentation Fund (400.00) 0.07247 0.07247 0.07247 0.07247 0.07247 Educational Revenue Augmentation Fund (400.01) 0.16929 0.16929 0.16929 0.16929 0.16929 L.A. County Accumulative Capital Outlay (001.20) 0.00012 0.00012 0.00012 0.00012 0.00012 L.A. County Flood Control Imp. Dist. Main. (030.10) 0.00180 0.00180 0.00180 0.00180 0.00180 L.A. County Library (003.01) 0.02408 0.02408 0.02408 0.02408 0.02408 L.A. County Fire - Ffw (007.31) 0.00756 0.00756 0.00756 0.00756 0.00756 L.A. County Flood Control Maintenance (030.70) 0.01019 0.01019 0.01019 0.01019 0.01019 Los Angeles County General ( 001.05) 0.32955 0.32955 0.32955 0.32955 0.32955 Mount San Antonio Children s Center Fund (809.20) 0.00030 0.00030 0.00030 0.00030 0.00030 Mount San Antonio Community College (809.04) 0.03104 0.03104 0.03104 0.03104 0.03104 Upper San Gabriel Valley Muni Water -Covina (368.10) 0.00058 0.00058 0.00058 0.00058 0.00058 West Covina Unified School District (985.03) 0.18597 0.18597 0.18597 0.18597 0.18597 Sub -Total $0.86014 $0.86014 $0.86014 $0.86014 $0.86014 Total Prop 13 Rate $1.00000 $1.00000 $1.00000 $1.00000 $1.00000 Metro Water District 0.008900 0.008900 0.008900 0.008800 0.007700 Flood Control 0.002197 0.001953 0.001765 0.001552 0.001073 Community College 0.000000 0.000000 0.000000 0.000000 0.000000 Unified Schools 0.000000 0.000000 0.000000 0.027280 0.052399 County 0.001584 0.001451 0.001422 0.001314 0.001128 Total Voter Approved Rates $0.012681 $0.012304 $0.012087 $0.038946 $0.062299 Total Tax Rate $1.012681 $1.0123 $1.012087 $1.038946 $1.062299 NOTE: In 1978, California voters passed Proposition 13 which sets the property tax rate at a 1.00% fixed amount. This 1.00% is shared by all taxing agencies for which the subject property resides within. In addition to the 1.00% fixed amount, property owners are charged taxes as a percentage of assessed property values for the payment of the any voter approved bonds. Source: L.A. County Assessor 2006/07 Tax Rate Table 140 n Table 8 1 1 1 1 1 1 1 1 1 2003 2004 2005 2006 2007 $0.00313 $0.00313 $0.00313 $0.00313 $0.00313 0.13671 0.13671 0.13671 0.13671 0.13671 $0.13984 $0.13984 $0.13984 $0.13984 $0.13984 $0.00288 $0.00288 $0.00288 $0.00288 $0.00288 0.01414 0.01414 0.01414 0.01414 0.01414 0.00145 0.00145 0.00145 0.00145 0.00145 0.00785 0.00785 0.00785 0.00785 0.00785 0.00087 0.00087 0.00087 0.00087 0.00087 0.07247 0.07247 0.07247 0.07247 0.07247 0.16929 0.16929 0.16929 0.16929 0.16929 0.00012 0.00012 0.00012 0.00012 0.00012 0.00180 0.00180 0.00180 0.00180 0.00180 0.02408 0.02408 0.02408 0.02408 0.02408 0.00756 0.00756 0.00756 0.00756 0.00756 0.01019 0.01019 0.01019 0.01019 0.01019 0.32955 0.32955 0.32955 0.32955 0.32955 0.00030 0.00030 0.00030 0.00030 0.00030 0.03104 0.03104 0.03104 0.03104 0.03104 0.00058 0.00058 0.00058 0.00058 0.00058 0.18597 0.18597 0.18597 0.18597 0.18597 $0.86014 $0.86014 $0.86014 $0.86014 $0.86014 $1.00000 $1.00000 $1.00000 $1.00000 $1.00000 0.006700 0.006100 0.005800 0.005200 0.004700 0.000881 0.000462 0.000245 0.000050 0.000050 0.019460 0.015246 0.014731 0.021220 0.025300 0.079947 0.050839 0.082226 0.061470 0.065120 0.001033 0.000992 0.000923 0.000800 0.000660 $0.107921 $0.073639 $0.103925 $0.088740 $0.095830 $1.107921 $1.073639 $1.103925 $1.088740 $1.095830 141 (This page intentionally left blank.) 142 CITY OF WEST COVINA Table 9 Principal Property Tax Payers Current Year and Nine Years Ago 1998 2007 Percent of Percent of Total City Total City Taxable Assessed Taxable Assessed Taxable Assessed Taxable Assessed Taxpayer Value Value Value Value West Plaza Covina LLC 112,106,146 2.56% $ 175,557,475 2.28% ' Eastland Shopping Center LLC Hassen Imports Partnership 89,382,037 52,896,313 1.16% 0.69% Ten West Associates LLC 40,180,000 0.52% tWest Covina 8 B LLC 35,809,360 0.46% Eastland Tower Partnership 27,069,000 0.62% 31,650,000 0.41% ' Pried XIV Trust 27,349,820 0.35% Sears Development Company 27,345,173 0.35% ' PPC AVF III Pacific LLC 37,909,950 0.49% West Covina Group Retail LLC 24,083,760 0.31% ' Citrus Valley Health Partners 68,423,041 1.56% May Stores Shopping Centers Inc. 55,210,647 1.26% Westfield Corporation Inc. 30,588,896 0.70% Hassen Real Estate Partnership 28,254,681 0.65% South Hills Home Partnership 20,797,825 0.47% BKK Company 16,115,906 0.37% Joseph K & Inez Eichenbanum 14,943,818 0.34% Hua Nan Commercial Banking Ltd 14,864,635 0.34% $ 388,374,595 8.87% $ 542,163,888 7.03% The amounts shown above include assessed value data for both the City and the Community Development Commission. The top ten property tax payers are shown for each year. Source: Los Angeles County Assessor's Office 143 CITY OF WEST COVINA Property Tax Levies and Collections Last Ten Fiscal Years City Collected within the Fiscal Taxes Levied Fiscal Year of Levy Collections in Total Collections to Date Year Ended for the Percent Subsequent Percent June 30 Fiscal Year Amount of Levy Years Amount of Levy 1998 4,474,200 4,176,518 93.35% 73,842 4,250,360 95.00% 1999 4,593,230 4,299,907 93.61% (63,181) 4,236,726 92.24% 2000 4,800,590 4,507,903 93.90% (103,451) 4,404,452 91.75% 2001 5,013,366 4,784,660 95.44% (169,430) 4,615,230 92.06% 2002 5,490,462 5,168,577 94.14% (258,169) 4,910,408 89.44% 2003 5,604,199 5,307,176 94.70% 61,647 5,368,823 95.80% 2004 6,120,235 5,826,025 95.19% 76,492 5,902,517 96.44% 2005 6,228,741 5,637,051 90.50% 63,827 5,700,878 91.53% 2006 7,404,266 6,799,451 91.83% (262,305) 6,537,146 88.29% 2007 .8,255,755 7,536,422 91.29% (7,738) 7,528,684 91.19% NOTE: The amounts presented include City property taxes and Community Development Commission tax increment. This schedule also includes amounts collected by the City and the Community Development Commission that were passed -through to other agencies. Source: Los Angeles County Auditor Controller's Office N/A - Not available at time of printing. 144 Table 10 Community Development Commission Collected within the Fiscal Taxes Levied Fiscal Year of Levy Collections in Total Collections to Date Year Ended June 30 for the Fiscal Year Amount Percent of Levy Subsequent Years Amount Percent of Levy 1998 N/A N/A N/A N/A N/A N/A 1999 N/A N/A N/A N/A N/A N/A 2000 N/A N/A N/A N/A N/A N/A 2001 N/A N/A N/A N/A N/A N/A 2002 9,918,959 9,580,979 96.59% 771,567 10,352,546 104.37% ' 2003 10,668,287 10,539,591 98.79% 346,132 10,885,723 102.04% 2004 11,439,589 11,308,165 98.85% 647,807 11,955,972 104.51% 2005 12,333,003 12,130,821 98.36% 1,291,517 13,422,338 108.83% 2006 14,104,710 14,076,889 99.80% 1,144,548 15,221,437 107.92% 2007 15,942,115 15,927,954 99.91% 827,358 16,755,312 105.10% 145 CITY OF WEST COVINA Ratios of Outstanding Debt by Type Last Ten Fiscal Years Fiscal Year Ended June 30 Lease Revenue Bonds Special Assessment Bonds Governmental Activities Tax Allocation Bonds 1 Loans Capital Lease Obligations 1998 $ 7,870,000 48,800,000 22,400,000 3,191,864 630,471 1999 7,125,000 48,115,000 21,115,000 722,817 1,006,822 2000 6,970,000 47,370,000 23,595,000 715,443 819,113 2001 6,800,000 46,670,000 22,055,000 707,643 661,487 2002 28,515,000 45,915,000 331205,000 955,643 476,544 2003. 31,945,000 45,110,000 32,670,000 19,116,045 979,560 2004 31,735,000 44,255,000 32,155,000 21,014,344 1,058,092 2005 44,880,000 43,350,000 31,500,000 22,754,013 817,731 2006 44,550,000 42,345,000 30,830,000 24,940,778 572,389 2007 60,570,000 41,240,000 30,140,000 27,764,353 398,483 Notes: Details regarding the City's outstanding debt can be found in the notes to the financial statements. ' The 1994 West Covina Public Financing Authority Water Revenue Bonds were defeased as of June 30, 2000 due to the sale of the City's water system. 2 These ratios are calculated using personal income and population for the prior calendar year. Source: City of West Covina Finance Department 146 t 1 1 1 1 1 1 1 1 1 1 1 1 1 Total Governmental Activities 82,892,335 78,084,639 79,469,556 76,894,130 109,067,187 129,820,605 130,217,436 143,301,744 143,238,167 160,112,836 Table 11 Business -Type Activities Total Total Percentage Debt Certificates of Business -type Primary of Personal Per Participation Activities Government Income 2 Capita 2 22,795,000 22,795,000 105,687,335 4.05% 1,022 21,995,000 21,995,000 100,079,639 3.51% 955 21,150,000: 21,150,000 100,619,556 3.38% 945 20,260,006 20,260,000 97,154,130 3.09% 903 - - 109,067,187 3.28% 1,000 - - 129,820,605 3.86% 1,190 - - 130,217,436 3.75% 1378 - - 143,301,744 3.88% 1,286 - - 143,238,167 3.45% 1,274 - - 160,112,836 3.65% 1,424 147 CITY OF WEST COVINA . Table 12 Ratio of.General Bonded Debt Outstanding Last Ten Fiscal Years (In Thousands, except Per Capita) Fiscal Year Lease Special Tax Percent of Ended Revenue Assessment Allocation Assessed Per June 30 Bonds Bonds Bonds Total Value 1 Capita 1998 $ 7,870 48,800 22,400 79,070 1.49% 76 1999 7,125 48,115 21,115 76,355 1.39% 68 .2000 6,970 47,370 23,595 77,935 1.35% 65 2001 6,800 46,670 22,055 75,525 1.23% 63 2002 28,515 45,915 33,205 107,635 1.65% 262 2003 31,945 45,110 32,670 109,725 1.58% 293 2004 31,735 44,255 32,155 108,145 1.45% 287 2005, 44,880 43,350 31,500 119,730 1.51% 403 2006 44,550 42,345 30,830 117,725 1.34% 396 2007 60,570 41,240 30,140 131,950 1.37% 539 General bonded debt is debt payable with governmental fund resources and general obligation bonds recorded in enterprise funds (of which, the City has none). 1 Assessed value has been used because the actual value of taxable property is not readily available in the State of California. Source: City of West Covina Finance Department and Los Angeles County Assessor's Office .• iJ 0 r CITY OF WEST COVINA Table 13 Direct and Overlapping Debt June 30, 2007 City Assessed Valuation $ 7,715,914 Redevelopment Agency Incremental Valuation 1,918,456 Total Assessed Valuation $ 9,634,370 Gross Bonded Percentage Net Debt Balance Applicable Bonded Debt Overlapping Debt: 030.60 L.A. Co. Fl Con Storm Dr D.S. #4 $ 370,000 0.788 $ 2,915 *330.10 Three Vy MWD-1112 165,681,509 0.166 274,782 *337.05 Orig Area Up S G Vy MWD 1116001 165,681,509 0.146 242,547 *337.25 W Cov Upper SanGab Vy MWD-111602 165,681,509 0.524 868,592 809.50 Mt San Antonio CCD DS 2001 S-A 5,585,000 12.719 710,372 809.51 Mt San Antonio CCD DS 2004B 16,040,000 12.690 2,035,406 809.52 Mt San Antonio CCD DS 05 Ref Bd 75,295,843 12.690 9,554,712 809.53 Mt San Antono CD DS 01, 06 Ser C 79,996,203 12.707 10,164,883 820.50 Baldwin Park Unified DS 96 Ser A 4,426,417 '0.309 13,660 820.51 Baldwin Park USD DS 2001 Refdg Bds 7,485,000 0.309 23,098 820.52 Baldwin Park USD DS 2002 S-2003 1,580,000 0.309 4,876 820.53 Baldiwn Park USD DS 2002 S-2005 7,752,898 0.309 23,925 820.54 Baldwin Park Unif DS 2005 Ref Bonds 13,069,403 0.309 40,331 820.55 Baldwin Park Unif DS 2002 Series 2005 4,998,699 0.309 15,426 820.56 Baldwin Park USD DS 2002 Ser 2006 42,633,394 0.309 131,563 821.51 Bassett Unified DS 2004 Series 2005A 12,113,352 0.064 7,743 821.52 Bassett Unified DS 2004 Series 2005B 10.636,192 0.064 6,813 847.51 Covina Valley USD DS 2001 Ser A 15,660,000 31.483 4,930,265 947.52 Covina Vy USD DS 2001 Ser B 26,725,506 31.483 8,414,037 847.53 Covina Vy USD DS 2006 Ser 2006 47,000,000 31.502 14,805,894 870.50 Hac-La Puente USD DS 2000 Ser A 4,849,899 1.485 72,028 870.51 Hac-La Puente USD DS 2000 S-03B 59,818,226 1.485 888,386 870.52 Hac-La Puente Unified DS 2005 Ref Bds 30,875,000 1.485 458,538 91850 Rowland Hghts USD DS 2000 Ser A 4,964,562 14.539 721,821 918.51 Rowland fights USD DS 2000 Ser B 39,999,075 14.539 5,815,656 918.52 Rowland fights Unif DS 2005 Ref Bds 19,379,728 14.539 2,817,711 918.53 Rowland USD DS 2006 Ser A 48,000,000 14.539 6,978,949 980.55 Walnut Valley Unif DS Ser 1997 A 34,122,718 0.785 267,720 980.56 Walnut Valley USD DS 2000 Ser A 825,000 0.785 6,473 980.57 Walnut Valley USD DS 2000 Ser B 590,000 0.785 4,629 980.58 Walnut Valley USD DS 2000 Ser C 7,370,000 0.785 57,824 980.59 Walnut Valley USD DS 2000 Ser D 21,918,114 0.785 171,965 980.60 Walnut Valley USD DS 2000 Ser E 6,001,837 0.785 47,089 980.61 Walnut Valley Unif DS 2005 Ref Bds 11,895,000 0.785 93,326 985.53 West Covina USD DS 2000 Ser C 9,155,000 95.307 8,725,332 985.54 W Covina USD DS 2002 Ref Bd S-A 17,415,000 95.307 16,597,665 985.55 West Covina Unif DS 2000 Ser D 9,625,000 95.307 9,173,273 Total overlapping Debt 105,170,215 City direct debt 160,112,836 Total direct and overlapping debt $ 265,283,051 * This fund is a portion of a larger agency, and is responsible for debt in areas outside the city. ' Source: HdL Corent & Cone, L.A. County Assessor and Auditor Combined 2006/2007 Lien Date Tax Rolls This report reflects debt which is being repaid through voter -approved property tax indebtedness. It excludes mortage revenue, tax allocation bonds, interim financing obligations, non -bonded capital lease obligations, and certificates of participation, unless provided by the city. 149 (This page intentionally left blank.) 150 1 1 1 1 1 1 1 1 Total Net Assessed Fiscal Year Valuation 1998 $ 1999 2000 2001 2002 2003 2004 2005 2006 2007 4,380,329 $ 4,509,610 4,744,210 4,907,269 5,199,165 5,524,621 5,955,830 6,344,377 7,022,838 7,715,914 CITY OF WEST COVINA Legal Debt Margin Information Last Ten Fiscal Years (in thousands of dollars) Total Net Debt Legal Debt Limit Applicable to Limit Debt Margin 164,262 - $ 164,262 169,110 - 169,110 177,908 - 177,908 184,023 194,969 207,173 223,344 237,914 263,356 289,347 Legal Debt Margin Calculation for Fiscal Year 2007: Assessed value $ Debt limit (3.75% of assessed value) _ Debt applicable to limit: G 1 bl' ' b d - 184,023 - 194,969 - 207,173 - 223,344 - 237,914 7,715,914 289,347 263,356 289,347 Table 14 Total Net Debt Applicable to Limit as a Percentage of Debt Limit 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% enera o igation on s - Legal debt margin $ 289,347 The Government Code of the State of California provides for a legal debt limit of 15% of gross assessed valuation. However, this provision was enacted when assessed valuation was based upon 25% of market value. Effective with the 1981-82 fiscal year, each parcel is now assessed at 100% of market value (as of the most recent change in ownership for that parcel). Although the statutory debt limit has not been amended by the State since this change, the percentages presented in the above computations have been proprtionately modified to 3.75% (25% of 15%) for the purpose of this calculation in order to be consistent with the computational effect of the debt limit at the time of the state's establishment of the limit. Source: City of West Covina Finance Department Los Angeles County Tax Assessor's Office 151 CITY OF WEST COVINA Pledged -Revenue Coverage Last Ten Fiscal Years (In Thousands) Lease Revenue Bonds and Certificates of Participation Fiscal Year Ended Debt Service June 30 Revenue Principal Interest Coverage 1998 $ 32,188 1,740 1,561 9.75 1999 32,221 1,850 1,626 9.27 2000 34,391 1,325 1,531 12.04 2001 36,924 1,060 1,204 16.31 2002 36,237 1,110 1,156 15.99 2003 36,408 195 361 65.48 2004 36,793 210 597 45.59 2005 41,895 355 882 33.87 2006 46,565 375 1,309 27.65 2007 46,680 1,985 2,411 10.62 Tax Allocation Bonds Fiscal Year Ended Tax Debt Service June 30 Increment Principal Interest Coverage 1998 7,922 1,230 956 3.62 1999 6,951 1,285 1,197 2.80 2000 8,176 1,465 1,157 3.12 2001 8,342 1,540 1,115 3.14 2002 9,577 1,615 1,192 3.41 2003 10,886 535 1,253 6.09 2004 11,956 515 1,391 6.27 2005 13,422 655. 1,400 6.53 2006 15,221 670 1,458 7.15 2007 16,755 690 1,474 7.74 Note: Details, regarding the city's outstanding debt can be found in the notes to the financial statements. Operating expenses do not include interest or depreciation expenses. Source: City of West Covina Finance Department 152 .1 Table 15 Assessment District Bond Fiscal Year Less Net Ended Operating Available Debt Service June 30 Revenue Expenses Revenue Principal Interest Coverage 1998 $ 6,894 4,264 2,630 635 2,856 0.75 1999 3,780 1,399 2,381 685 2,827 0.68 2000 3,667 285 3,382 745 2,794 0.96 2001 3,195 1,169 2,026 700 2,759 0.59 2002 5,214 1,210 4,004 755 2,722 1.15 2003 3,388 1,367 2,021 805 2,683 0.58 2004 4,643 1,017 3,626 855 2,642 1.04 2005 4,005 1,128 2,877 905 2,597 0.82 2006 3,831 739 3,092 1,005 2,548 0.87 2007 3,995 339 3,656 1,105 2,494 1.02 153 CITY OF WEST COVINA Table 16 Demographic and Economic Statistics Last Ten Calendar Years Per Personal Capita Unemployment Calendar Population Income Personal Rate Year (1) (in thousands) (2) Income (3) (4) 1997 103,422 $ 2,610,268 $ 25,239 4.6% 1998 104,801 $ 2,852,683 $ 27,220 4.5% 1999 106,500 $ 2,979,125 $ 27,973 4.2% 2000 107,631 $ 3,146,269 $ 29,232 3.8% 2001 109,029 $ 3,325,712 $ 30,503 4.2% 2002 169,083 $ 3,362,811 $ 30,828 3.9% 2003 110,515 $ 3,475,918 $ 31,452 4.6% 2004 111,404 $ 3,696,273 $ 33,179 3.8% 2005 112,417 $ 4,150,098 $ 36,917 4.8% 2006 112,459 $ 4,387,138 $ 39,011 4.3% Sources: (1) U.S. Department of Census and State Department of Finance (2) Estimated by multiplying population by per capita income. (3) Bureau of Economic Analysis. Used per capita income of Los Angeles - Long Beach- Santa Ana, CA area. Data is preliminary. (4) State of California Employment Development Department 154 CITY OF WEST COVINA Table 17 Principal Employers Current Year and Nine Years Ago 1998 2007 Percent of Percent of Number of Total Number of Total Employer Employees Employment Employees Employment Queen of the Valley Campus 1,700 3.18% WC Unified School District 950 1.78% City of West Covina 515 0.96% Macy's 450 0.84% S G V.Newspaper Group Data was not available at time 378 0.71% Target Store #T1028 of printing. 323 0.60% Penkse Motorcars 228 0.43% Progressive Mgmt Systems 217 0.41 % . Interspace/Concorde Battery Corl 215 0.40% JC Penney/Corp Inc #1505-7 215 0.40% Note: "Total Employment" as used above represents the total employment of all employers located within City limits. Source: Labor Market Info, EDD, State of California City of West Covina Business License section 155 (This page intentionally left blank. 156 Function General government Public safety Public works Community services Community development Total CITY OF WEST COVINA Table 18 Full-time and Part-time City Employees by Function Last Eight Fiscal Years Full -Time and Part-time Employees as of June 30 2000 2001 2002 2003 2004 2005 2006 2007 37 40 39 47 44 43 44 43 282 286 291 295 297 297 296 307 94 81 82 81 81 79 79 79 75 71 70 71 65 66 63 63 21 22 21 23 23 22 22 24 509 500 503 517 510 507 504 516 Information prior to FY 2000 is not available. Source: City of West Covina Finance Department 157 CITY OF WEST COVINA Operating Indicators by Function Last Ten Fiscal Years Fiscal Year 1998 1999 2000 2001 .2002 Police: Total arrests 5,028 4,903 4,402 4,327 .4,183. Calls for Police service 1 69,843 72,311 72,450 92,200 95,546 Fire Emergency responses 6,310 6,419 6,476 6,479 6,717 Fire inspections 2,278 2,311 2,395 2,391 2,391. Public works: Building permits issued 3,240 3,240 2,680 2,800 3,079 Community. Services Recreation class registrations 2,100 1,800 2,300 2,800 2,500 Environmental Management Graffiti sites cleaned 4,208 4,208 4,500 6,744 . 7,077 i 1998 to 2000 reflect all calls that generated a police response to the scene of the call; 2001 through 2007 reflect all calls received that generated an incident number, not necessarily a police response. Source: City of West Covina Finance Department 158 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 Table 19 Fiscal Year 2003 2004 2005 2006 2007 3,701 3,837 3,852 3,491 3,449 93,822 95,654 89,340 80,048 79,753 7,179 7,080 7,122 7,057 7,064 3,350 3,350 3,819 3,122 3,711 3,510 3,830 3,798 4,250 3,854 2,400 3,617 3,950 4,342 4,850 7,767 8,055 8,055 9,600 17,903 159 CITY OF WEST COVINA Capital Asset Statistics by Function Last Ten Fiscal Years Fiscal Year 1998 1999 2000 2001 2002 Police: \ Stations 1 1 1 1 1 Fire: Fire stations 5 5 5 5 5 Public works: Streets (miles) 230.00 230.00 230.00 230.00 230.00 Streetlight poles 826 826 826 826 826 Streelight fixtures 1,109 1,109 1,109 1,109 1,109 Traffic signals 113 113 113 113 113 Parks and recreation: Parks 15 15 15 15 15 Community centers 4 4 4 4 4 City water department ' Number of consumers 7,002 7,002 - - - Average daily consumption 6,100,000 6,100,000 - - - Water mains (miles) 80.30 80.30 - - - Wastewater: Sanitary sewers (miles) 233.00 233.00 233.00 233.00 233.00 Storm sewers (miles) 42.00 42.00 42.00 42.00 42.00 The Water department was sold in FY 1999-2000 Source: City of West Covina 160 Table 20 i ' Fiscal Year 2003 2004 2005 2006 2007 1 1 1 1 1 i 5 5 5 5 5 230.00 230.00 230.00 230.00 231.00 826 826 826 826 826 1,109 1,109 1,109 1,109 1,109 ' 113 113 113 114 114 15 15 15 16 16 4 4 4 4 4 233.00 233.00 233.00 233.00 238.90 42.00 42.00 42.00 42.00 42.00 1 1 i t i 161 r (This page intentionally left blank) 162 t 1 1 1 1 1 1 1 1 1 1 1 1 i