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12-21-2010 - Comprehensive Annual Financial Report for Year Ended 06/30/1040City of West Covina MEMORANDUM' AGENDA TO: Andrew G. Pasmant, City Manager, Item: 8 ,and City Council Date: December 21, 2010 FROM: Tom Bachman, Assistant City Manager SUBJECT: COMPREHENSIVE ANNUAL FINANCIAL REPORT FOR THE YEAR ENDED JUNE 30, 2010 RECOMMENDATION: It is recommended that the City Council receive and file this report. DISCUSSION: 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 present the Comprehensive Annual Financial Report of the City of West Covina (the "CAFR") for the fiscal year ended June 30, 2010. 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. 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, 2010; 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 has concluded that, based upon the audit, there was a reasonable basis for rendering an unqualified opinion that the City's financial statements for the fiscal year ended June 30, 2010, are fairly presented in conformity with GAAP. The independent auditors' report is presented as the first component of the financial section of this 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). The City's MD&A can be found immediately following the report of the independent auditors in the financial section of the report. The letter of transmittal, located in the introductory section of the report is designed to complement the MD&A and should be read in conjunction with it. 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 decreased by $16.5 million, from $228.3 million to $211.8 million. i 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 22, and present information in a manner more consistent with how the City prepares its budget. For the General Fund, expenditures exceeded revenues, resulting in an operating deficit of $3.9 million. During the fiscal year, most of the City revenue sources continued to decline including the top four revenue sources: property tax, sales tax, franchise fees, and interest income. Property taxes decreased $724,788 (3.9%) from the 2008-09 total and sales tax decreased $1.5 million (12.2%) from the previous year. Franchise fees decreased by $419,293 (11.9%), while interest.income decreased by $215,800 (7.4%). Additional double-digit decreases were experienced in licenses and permits, down $180,666 (16.6%), and transient occupancy taxes, down $140,163 (17.8%). The lone bright spot on the revenue side was business licenses, which increased by $247,072 (13.5%). Total revenues, including transfers in, were down by $3.0 million (5.7%) , from the previous year. Expenditures, including transfers out, decreased by $3.4 million (6.0%) from the previous year. 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 at June 30, 2010 was $9.7 million, while the total fund balance of the General Fund was $31.6 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: None. Prepare y,to--m am Assistant City Manager Attachment: Comprehensive Annual Financial Report 6/30/2010 #8 ATTACHMENT CAFR 12/21/10 �JOVINfA Comprehensive Annual Financial Report 13 City of West Covina, California Fiscal Year Ended June 30, 2010 H City of West Covina, California Comprehensive Annual Financial Report Fiscal Year Ended June 30, 2010 PREPARED BY: City of West Covina Finance Department Thomas Bachman Assistant City Manager/Finance Director (This page intentionally left blank) I LI 1 11 CITY OF WEST COVINA ' Comprehensive Annual Financial Report Year ended June 30, 2010 TABLE OF CONTENTS 1 page INTRODUCTORY SECTION: Letterof Transmittal--------------------------------------------------------------------------------- v 1 City Officials----------------------------------------------------------------------------------------xiv Organizational Chart --------------------------------------------------------------------------------xv 1 Certificate of Achievement for Excellence in Financial Reporting ------------------------- xvi FINANCIAL SECTION• Independent Auditors' Report ---------------------------------------------------------------------- 1 Management's Discussion and Analysis (Required Supplementary Information)---------- 3 rBasic Financial Statements: Government -wide Financial Statements: r Statement of Net Assets ----------------------------------------------------------------------- 15 Statement of Activities------------------------------------------------------------------------16 1 Fund Financial Statements: Governmental Funds: BalanceSheet--------------------------------------------------------------------------------18 ' 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 CITY OF WEST COVINA Comprehensive Annual Financial Report Year ended June 30, 2010 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 ------------------------------------------------------------------- 74 Combining Statement of Revenues, Expenditures and Changes inFund Balances -------------------------------------------- =-------------------------------- 75 Non -Major Special Revenue Funds: Combining Balance Sheet--------------- ---------------------------------------------78 Combining Statement of Revenues, Expenditures and Changes in Fund Balances ------------------------------------------------------------- 82 Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual: Recreation Programs Fund --------------------------------------------------------------- 86 Drug Enforcement Rebate Fund --------------------------------------------------------- 87 Business Improvement Tax Fund-------------------------------------------------------88 Air Quality Improvement Fund---------------------------------------------------------89 Proposition A Fund-----------------------------------------------------------------------90 Proposition C Fund-----------------------------------------------------------------------91 Traffic Safety Fund ------------------------------------------------------------------------ 92 StateGas Tax Fund-----------------------------------------------------------------------93 Traffic Congestion Relief Fund --------------------------- ------------------------------ 94 Police Special Programs Fund ----------------------------------------------------------- 95 Transportation Development Act Fund------------------------------------------------96 AB939 Fund ------------------------------- ------------------------------------------------ 97 GrantsFund--------------------------------------------------------------------------------98 Community Development Block Grant Fund-----------------------------------------99 u 1 1 I 1 ii 1 U CITY OF WEST COVINA Comprehensive Annual Financial Report ' Year ended June 30, 2010 TABLE OF CONTENTS (CONTINUED ' .Page TreeFund ------------------------------------------------- =-------------------------------- 100 InmateWelfare Fund------------------------------------------------------------------- PublicSafety Fund---------------------------------------------------------------------- 101 102 COPSGrant Fund---------------------------------------------------------------------=- 103 Special Assessments Fund------------------------------------------------------------- 104 1 Charter Cable Fund--------------------------------------------------------------------- 105 Art in Public Places Fund--------------------------------------------------=----------- 106 North Azusa Relinquishment Fund --------------------------------------------------- 107 Fire Training Fund ------------------------ ---------------------------------------------- 108 ' Measure R Fund------------------------------------------------------------------------- 109 Integrated Waste Management Fund ------------------------------------------------- 110 WC Community Services Foundation Fund----------------------------------------- ill Major Debt Service Funds: Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual: City Debt Service Fund----------------------------------------------------------------- 113 Community Development Commission Debt Service Fund ---------------------- 114 ' Major and Non -Major Capital Projects Funds: J J P J ' Non -Major Combining Balance Sheet--------------------------------------------------- 116 Non -Major Combining Statement of Revenues, Expenditures and Changes in Fund Balances----------------------------------------------------------- 117 Schedule of Revenues, Expenditures and. Changes in Fund Balances - Budget and Actual: CityCapital Projects Fund -------------------------- =---------------------------------- 118 Community Development Commission Capital Projects Fund------------------- 119 Construction Tax Fund----------------------------------------------------------------- 120 Park Development Fund---------------------------------------------------------------- 121 Internal Service Funds: Combining Statement of Net Assets ----------------------------------------------------- 125 Combining Statement of Revenues, Expenses and Changes in Net Assets -------- 126 Combining Statement of Cash Flows---------------------------------------------------- 127 Agency Fund: Statement of Changes in Assets and Liabilities ---------------------------------------- 130 1 . I CITY OF WEST COVINA , Comprehensive AnnualFinancial Report ' Year ended June 30, 2010 TABLE OF CONTENTS, (CONTINUED) Table Pace , STATISTICAL SECTION: Net Assets by Component----------------------------=-------=-=----------------- 1------------- 133 Changes in Net Assets------------------------------------------------------------ 2------------- 135 Changes in Net Assets —Governmental Activities ----- ---------=------------ 3------------- 139 Changes in Net Assets — Business -type Activities---------------------------- 4------------- 141. Fund Balances of Governmental Funds ----------------- ----------------------- 5------------- 143 , Changes in Fund Balances of Governmental Funds-------------------------- 6------------- 145 Assessed Value and Estimated Actual Value of Taxable Property--------- 7-------------147 , Direct and Overlapping Property Tax Rates ----------- =----------------------- 8------------- 149 Principal Property Tax Payers -------------------------------------------=------- 9------------- 151 Property Tax Levies and Collections ---------- =----=---------------------------,1.0--------- =-- 152 Ratios.of Outstanding Debt by Type-------------------------------------------- 11------------154 Ratio of General Bonded Debt Outstanding----------------------------------- 127___________ 156 Direct and Overlapping Debt ---------------------------------------------------- 13----- Legal Debt Margin Information ------- 157 ------------------------ ------------------------- 14=--7-------- 158 Pledged -Revenue Coverage------------------------------------------------------ 15------------ Demographic Economic Statistics 159 and ----------------------------------------- 16------------ 161 Principal Employees-------------------------------------------------------------- 17--=--------- Full-time Part-time City 162 and Employees by Function------------------------ 18------------ 163 Operating Indicators by Function ----------------------------------------------- 19------------ 164 Capital Asset Statistics by Function -------------------------------------------- 20------------ 166 . iv 1 Finance Department IDecember 14, 2010 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-pririciples -(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, 2010. 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. 1 The City's financial statements have been audited by Mayer Hoffinan 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, 2010, 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 that, based upon the audit, there was a reasonable basis for rendering an unqualified opinion that the City's financial statements for the fiscal year ended June 30, 2010, are fairly presented in conformity with GAAP. The independent auditors' report is presented as the first component of the financial section of this report. v 1 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 to 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 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 110,000. 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 annually reviews and adopts an 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 each year. 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 vi , I �7 F1 I 1 1 �1 I 1 proposed budget and adopts a final budget in June. The budget appropriations are 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 total appropriations in individual funds, must be approved by the City Council. 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. 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 eleven new auto dealerships. Because of this makeup, the City's two largest revenue sources are property tax and sales tax that together make up almost 60 percent of the General Fund revenues. Because of this large proportion, the health of the General Fund relies heavily on the performance of these two revenue sources and unfortunately, both of these revenue sources have been impacted by the recession. Fiscal. year 2009-10 is the third consecutive year in which sales tax has declined. During that period sales tax revenues have dropped 22% and are now performing at 2001.-02 levels. The City experienced the closure of a number of medium and large stores over the last few years and in many cases those buildings are still vacant. More recently, the City has seen the closure of a numbers of restaurants throughout the City. Additionally, there has been an effort by the owners of the commercial centers to reposition those properties and attract new tenants. In some cases, this will involve reconfiguring the buildings and bringing in a completely different tenant mix that will, not generate sales taxes at the same levels as the prior uses. The owners of the regional mall have also begun redesigning this property to bring in new shops and restaurants in an effort to re -energize the mall. But as with the other centers, some of this new space will be for uses not previously seen at the property, such as a fitness gym. And though it appears that sales tax revenues in total may have bottomed out, it is projected that it will take four to five years to reach the peak levels seen in 2006-07. Property taxes on the other hand have continued to perform well through the recession and only in 2009-10 did they experience their first decline. And even still, the CDC property taxes increased slightly by 0.6% while the City property taxes declined by 3.9%. These taxes are expected to decline further in 2010-11 due to the negative CPI, wluch will cause a reduction in assessed valuations of properties that did not transact during the year. The drop in the housing market will also affect values as many homes that have transacted in recent years have had their values reduced back to levels prior to the peak of the housing market. Finally, numerous vacant vii F11 commercial properties will see their assessed valuations reduced as the county works it way through the backlog of assessment appeals on these properties. The reductions to the commercial properties will have a greater effect on the CDC since most of the commercial centers are in redevelopment project areas. While the City's main two revenue sources have either already shown a significant decline or are in the midst of a sizable decline, most of the City's other revenue sources have also experienced reductions as a result of the continuing effects of the recession. While these reductions do not have the same effect on the budget due to smaller amounts of the revenue, the percentage decline in many cases is far greater than the losses to sales tax and the projected losses to property taxes. Transient occupancy taxes have declined 39% over the last two years, building permits have declined 54% over the last three years, and the transfer tax paid when homes are sold has declined 41 % over the last three years. In the case of the transient occupancy tax, the City has begun to see a modest increase in this revenue source over the first part of the 2010-11 fiscal year. Building related revenues, however, do continue to perform at depressed levels. We are cautiously optimistic that we have bottomed out and that we now, will start to see slow growth as the economy slowly rebounds. It is important to remember, however, how far revenues have fallen in the last few years; i.e.; sales tax has decreased 22% and property taxes projected.to decrease by 10%. It is also predicted that this will be a slow climb back from these lows as high unemployment rates and continued uncertainty in the housing market will continue to be a drag on the economy. Long -team financial planning As the grips of the recession took hold, followed by the collapse of the financial and housing markets and the resulting drop off in consumer spending, it was projected that the effects on the City would take place in three major phases: (1) a decline in sales taxes which occurred immediately, (2) a drop in property taxes which would take 1 — 2 years due to the lag in when properties are assessed, and (3) significant increases in the City's pension cost due to the collapse of the stock market and the resulting assets losses within the Ca1PERS investment fund. This third phase will begin in 2011-12. While the first two are cyclical, albeit much more drastic in this cycle, they will turn around. It will just take longer. The pension cost increases, however, will have long-lasting effects on the City's ability to provide public services absent major changes to its cost structure. The effect of these events on the City's budget has been that each year the City faces a large budget deficit, makes significant reductions or the use onetime measures to.reduce that deficit to a more manageable level, and then face the same dilemma the following year. Due to the severe financial situation facing the City, 'a different approach was taken to preparing the 2010-11 Fiscal Year Budget. The Finance Department created a rollover budget that contained the same level of authorized personnel as was in the 2009-10 Budget but using 2010- I 1 costing, and the same. dollar amount for supplies and services .(non -personnel) budgets. The City has reduced service levels in the non -safety departments by 10-20 percent, and in safety departments by 5 percent over the previous two years. This rollover budget carried forward those 1 F, i� F1 1 1 C� 1 viii 1 LI fl 1 reduced service levels, which then served as the'baseline for the 2010-11 Budget. This rollover approach was used for all funds in the City and the CDC budgets. This rollover approach produced an $8.7 million deficit in the City's General Fund and was used as a starting: point for discussions on how to reduce the deficit. All departments were directed to prepare recommendations for three levels of further budget cuts, each equal to 5 percent, for a total of 15 percent in reductions. Again, this approach was used for most funds within the City and the CDC. A 15 percent cut in expenditures across all departments would eliminate the General Fund budget deficit, but would have resulted in dramatic service reductions and employee layoffs. During the budget adoption process, the City Council reduced service levels that included a 5 percent salary reduction for all non -sworn personnel, 5 percent service reductions in non -safety departments, fire department service cuts totaling almost $2 million and police department service cuts totaling $1.7 million. Prior year cuts were mainly done in non -safety departments, but with almost 80 percent of the General Fund budget being allocated to public safety, these levels of cuts to the police and fire budgets needed to occur to have any sort of impact on the deficit. Despite these cuts, front line public safety has remained a priority of the City Council. These reductions resulted in the elimination of an additional, 30 full time positions, including seven vacant sworn police positions, fifteen sworn fire positions, and eight vacant non -sworn positions. The Adopted General Fund Budget includes $48.9 million of estimated revenues and $52.7 million. of appropriations, resulting in a $3.8 million deficit. Revenues in 2010-11 are projected to decrease by 1.6 percent below the 2009-10 estimates while expenditures are projected to decrease by 4.2 percent. While the City has made substantial cuts and eliminated 60 full-time positions without layoffs over the last three years, the General Fund budget gap is projected to grow in the next couple of years. Absent a new revenue source, which is unlikely at this time given the state of the economy and the negative public sentiment towards government which has only been made worse in the wake of the City of Bell scandal, the City will need to make even deeper cuts to service in the upcoming year. These further: service reductions will be necessary due to the City's use of reserve funds in recent years, which will no longer be available in the near future to fund operations. The City's budget deficit for the 2011-12. fiscal is projected to be in the $6 - $7 million range. This increase in the deficit over the current year deficit is due to salary increases due to sworn public safety employees under existing MOUs that do not expire until June 2012, and the increases in pension costs that will occur over the next three years. In order to reduce the deficit ' to a more manageable level and preserve the City's cash reserve, deeper cuts in fiscal year 2011- 12 will need to .be made to service levels. Moving forward, the City will need to also reduce the cost structure for its services, a great deal of which is tied up for another year due to those existing public safety, MOUs. ix Relevant financial policies , As the City starts to see some positive signs in the economy slowly emerging, the City must address the cost side of its budget. With stagnant, or slow growing revenues, the City will continue to see its budget deficits grow due to increased costs of public service. This is due in large part to projected increases in retirement and health care costs. It will be incumbent on the City to develop long-term restructuring plans to mitigate these future costs increases. Ca1PERS experienced a significant loss in its investment portfolio as a result of the downturn in the stock market. The losses of 4.9� o in 2007-08 followed by a loss of approximately 23.4% in 2008-09, will cause rates to increase drastically over a three-year period beginning in 2011-12. CalPERS has projected that over that three-year period the City's rate will increase from 36% of pay for safety members to 50%, and the miscellaneous rates will increase from 17% of pay to 27%. By the end of the three-year period in 2013-14, the City will have to absorb an additional $4 million in pension costs and because of the 15-year smoothing method used by Ca1PERS, , those higher rates will remain in place for many years. To offset these cost increases, the City took the first step towards pension reform by instituting a ' two-tier pension for miscellaneous employees whereby new employees will be enrolled in the 2% @ 60 formula vs. 2.5% @ 55 formula for current employees. New hires in the miscellaneous category will also pay the employee share of pension contributions. While this will reduce i pension costs over the long term, the City.will need to consider additional steps to mitigate future cost increases such. as having all employees pay for the employee contribution. This approach, including the two-tier system and employees paying the employee contribution, will also need to be considered with the public.,safety bargaining groups when their contracts expire, as that is where the majority of the pension costs exist. Another area where the City. has seen rapid cost increases is retiree medical premiums. The City currently, provides medical premiums at the Kaiser two-party rate for all public safety retirees and , minimal coverage at the PERS minimum for all miscellaneous retirees. The City has a $45 million unfunded liability for retiree medical benefits. It would be prudent to consider pre - funding this liability, which will ultimately reduce the long-term cost of the benefit but will also result in higher expenditures in the near tern. The City `will also explore additional ways to reduce the cost by reducing level of benefits in the future and/or having the employees contribute to the pre -funding of this benefit. ' The City has been able to avoid layoffs as it has ' downsized the organization by 60 full time positions (15%) over the last three years: However, the reduction in staffing will need to continue in .the 2011-12 fiscal year. The City will evaluate different methods of reducing staff, which may include the use of retirement incentives as an alternative to layoffs. The City is projected to have approximately $6 million in available reserves'at the end of the 2010-11 fiscal year. If the City is not able to make significant progress in resolving its structural imbalance during the 2011-12 fiscal year, the City will be out of available reserves at the end of that fiscal year. This CDC would then have to issue bonds to refinance all or part of that debt in 1 I P7 I order to provide the City with available reserves. This would cause a' devastating impact to the General Fund as it would remove up to $2 million in annual income from the City's budget and accelerate the depletion of.the General Fund reserve. In past years the City's budget has been largely affected by actions taken by the state in efforts to balance their own budget. In 2009-10 the state borrowed $1.7 million in General Fund property tax revenues from the City, did an outright takeaway of $6.5 million from the redevelopment agency, and deferred monthly payments of gas tax revenues and Prop 42 transportation revenues. The City participated in the statewide Prop IA securitization program which was a pooled financing in which the City will receive bond proceeds to offset the $1.7 million of property taxes borrowed by the state, thereby making. the City whole during the fiscal year. In return for these bond proceeds, the City gave up the right to receive repayment from the state in three years. All costs and repayment obligations. of the bond issue: are bourn by the state. Although the, City and other redevelopment agencies across the state believe the redevelopment takeaway is illegal, the League of California Cities and California Redevelopment Association received an adverse decision in a lawsuit filed on behalf of California redevelopment agencies in this matter. The City made the $6.5 million payment in 2009-10 by exercising a provision in the law that allows the agency to borrow this amount from the low and moderate housing fund. That amount will have to be repaid to the housing fund by June 30, 2015.. The CDC will evaluate financing options to repay this debt. to the housing fund in order to minimize the impact on the agency's ability to do new projects over the next five years. While this case is on appeal in the courts, the CDC is also liable to make an additional $1.3 million payment to the school fiord in May 2011. The CDC will again borrow this amount from the housing fund. The state's budget situation continues to worsen and they have proven totally incapable of resolving the budget deficits without gimmicks and takeaways from local agencies. Because of the continued efforts by the state to take local revenues in order to solve their own budget problems, the League of California Cities lead an effort that resulted in the passage of Proposition 22 in November 2010 that will provide further protection against state raids by including transit, redevelopment, and other local revenues that were not previously protected by Proposition IA. Unfortunately., because the $1.3 million takeaway was included in legislation that predated the passage of Proposition 22, the CDC will still be required to make that payment this fiscal year absent a reversal on appeal of the prior court decision. ` Major Initiatives The major. initiative over the next couple of years will be a major restructuring of the City's budget, which will require a fundamental change in the way the City'manages its affairs. The City's business model for funding government services is not sustainable in the long run. West Covina. does not have the -revenue structure to continue to operate as a full service city of this size and will need to restructure its revenue stream, its cost structure, or both. Part of this restructuring will . be the result of decisions on what level of services are expected in the community,.who.will.provide those services, and what price people are willing to pay for those services. While the City has suffered significant sales tax losses in its retail base as a result of the downturn in the economy and the closure of several stores, developers are starting to invest in some of the major commercial developments in an effort to re -tenant the properties. The primary focus of staff will be to continue to. work with existing property owners to assist in filling the vacancies, as well as assisting local businesses and developers in their remodeling and expansion projects. These efforts by the City will include expediting the entitlement and inspections processes and well as assisting in the marketing of the available sites. The City was recently a finalist for the. award of Most Business Friendly City with a population over 60,000 as awarded by the Los Angeles Economic Development Corporation. Being selected as a finalist was a testament to the City's low taxes and building fees, it's aggressive redevelopment activities, and a willingness to encourage and cooperate with business development in the City.' Some of those projects currently underway include the expansion of the Westfield Mall, Eastland Shopping Center, the Country Club shopping center, and the Penske auto dealership. The success of these projects is a critical component to the City's tax base and ability to fund public services. The Interstate 10 freeway crosses through the northern section of the City and provides valuable access and exposure to the City's many commercial centers and auto dealers. This is the heart of the City's commercial sector and provides a large portion of the City's sales tax base. Cal Trans is in the process of widening the freeway for the purposes of adding HOV lanes. The first phase of this project extends from the 605 Freeway through the neighboring city of Baldwin Park to the western boundary of the City and is currently under construction. The second phase is currently in the planning stages and will continue from the westernboundary of the City to near the eastern boundary. This expansion will take place in a section of the freeway that fronts the majority of the City's commercial centers and auto dealers. This expansion will include the taking of some business properties as well as extension of.sound walls adjacent to residential areas. The City is working with Cal Trans in an effort to minimize the impact on local businesses and protect the visibility and accessibility of this vital commercial corridor. 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, 2009. 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 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. These are extremely challenging times for local government in which many difficult J F 1 1 1 I L xii decisions must be made. 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 1 manner. Respectfully submitted, ' Tom Bachman Assistant City Manager/Finance Director 11 1 I 1 1 CITY OF WEST COVINA City Officials June 30, 2010 CITY COUNCIL Steve Herfert, Mayor Mike Touhey, Mayor Pro Tern Sherri Lane Shelley Sanderson Vacant position CITY MANAGER Andrew G. Pasmant EXECUTIVE MANAGEMENT Thomas Bachman Assistant City Manager/Finance Director Chris Freeland Deputy City Manager Arnold M. Alvarez-Glasman City Attorney Sue Rush City Clerk Chris Chung Community Development Commission Director Michele McNeill Community Services Director Paul Segalla Fire Chief Frank Wills Police Chief Shannon Yauchzee Public Works Director Erin Hoppe Risk Management Director 0MA 1 1 1 1 1 1 1 t 1 1 1 1 1 1 1 1 City of West Covina Organizational Chart Xv Certificate of Achievement for Excellence in Financial Reporting Presented to City of West Covina California For its Comprehensive Annual Financial Report for the Fiscal Year Ended June 30, 2009 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 (CAFRs) achieve the highest standards in govemment accounting and financial reporting. OF TH NlTED STAIESN. v N O0.4AOA o 40000000 y CORPORATION' President Executive Director Ll Mayer Hoffman McCann P.C. An Independent CPA Firm 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, 2010 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, 2009, and in our report dated December 7, 2009, 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 financial 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, 2010 and the respective changes in financial position and cash flows, where applicable, thereof and the budgetary comparison for the general fund 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 is not a required part of the basic financial statements, but is 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, 2010 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, 2010 1 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, 2010. 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, 2010, the City's total net assets (excess of assets over liabilities) were $211.8 million. • The City's total net assets decreased $20.7 million. The decrease was the result of the deficits in certain funds, including a $3.9 million deficit in the General Fund caused by a continual decline sales tax and other revenues and a $3.5 million deficit in the CDC Debt Service Fund caused by the SERAF payment, and $10.1 million in depreciation of capital assets. • As of June 30, 2010, The City's governmental funds reported combined ending fund balances of $66.2 million, a decrease of $7.9 million from the prior year. Approximately $9.7 million of this total amount is available for spending at the City's discretion. • As of June 30, 2010, unreserved fund balance for the General Fund was $9.7 million, or 19% of total General Fund expenditures. • The City's total debt had a net increase of approximately $6.3 million during the current fiscal year. The increase is attributable to a net increase in claims payable of $2.7 million an increase in developer agreement payable of $3.3 million, an increase in the net OPEB obligation of $2.2 million, and an increase in the amount due to Los Angeles County by the CDC of $604,781. These increases were offset to a large extent by principal reductions in the City's bonded debt. There were no new debt obligations during the fiscal year. 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. • Fiduciaryfund statements provide information about the fiduciary relationships — like the agency funds of the City — in which the City acts solely as an agent or trustee for the benefit of others, to whom the resources in question belong. 3 The financial statements also include notes that explain some of the information in the financial statements and provide more detailed data. Reportingthe 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 non- financial 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, the West Covina Public Financing Authority, and the West Covina Community Services Foundation (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. Reporting the 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 0 1 J 1 1 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 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 Fiduciary Responsibilities 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. GOVERNMENT -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, 2010, net assets for the City of West Covina were $211,787,517. A summary of the government -wide statement of net assets at June 30, 2010 follows: Table 1 Net Assets Governmental Activities Business -type Activities Total 2010 2009 2010 2009 2010 2009 Current and other assets 147,044,445 162,557,256 (800,212) (485,672) 146,244,233 162,071,584 Capital assets 256,966,770 253,547,677 42,073 107,507 257,008,843 253,655,184 Total Assets 404,011,215 416,104,933 (758,139) (378,165) 403,253,076 415,726,768 Long-term debt outstanding 182,938,974 176,661,778 243,008 234,723 183,181,982 176,896,501 Other liabilities 8,198,187 10,483,158 85,390 66,156 8,283,577 10,549,314 Total Liabilities 191,137,161 187,144,936 328,398 300,879 191,465,559 187,445,815 Net Assets: Invested in capital assets, net of debt 184,338,106 180,298,472 42,073 107,507 184,380,179 180,405,979 Restricted 18,316,134 25,937,799 - - 18,316,134 25,937,799 Unrestricted 10,219,814 22,723,726 (1,128,610) (786,551) 9,091,204 21,937,175 Total net assets 212,874,054 228,959,997 (1,086,537) (679,044) 211,787,517 228,280,953 11 5 $184,380,179 (87.1%) 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 $24,845,444 (11.7%) of net assets represents resources that are subject to external restrictions on how they may be used. There is a resulting balance of $2,561,894 (1.2%) of net assets that is unrestricted and may be used to meet the City's ongoing service and credit obligations. A summary of the government -wide statement of activities for the year ended June 30, 2010 follows: Revenues Program revenues: Charges for services Operating contributions and grants Capital contributions and grants General revenues: Property taxes Sales taxes Other taxes Other general revenues Total revenues Expenses General government Public safety Public works Community services Community development Interest expense Computer service Total expenses Increase (decrease) in net assets Beginning net assets, as restated Ending net assets Table 2 Changes in Net Assets Governmental Activities Business -type Activities Total 2010 2009 2010 2009 2010 2009 13,314,578 11,612,157 2,193,037 1,885,071 15,507,615 13,497,228 , 5,157,956 11,895,355 - 5,157,956 11,895,355 ' 3,574,609 578,828 - 3,574,609 578,828 27,681,291 35,257,613 27,681,291 35,257,613 7,791,286 9,261,965 7,791,286 9,261,965 8,486,367 8,621,259 8,486,367 8,621,259 7,958,878 9,561,596 (93,032) (65,936) 7,865,846 9,495,660 73,964,965 86,788,773 2,100,005 1,819,135 76,064,970 88,607,908 3,337,547 2,849,501 - - 3,337,547 2,849,501 48,151,398 47,682,934 - 48,151,398 47,682,934 21,054,241 21,598,894 - 21,054,241 21,598,894 6,558,987 7,835,430 - - 6,558,987 7,835,430 8,619,004 12,867,904 - 8,619,004 12,867,904 6,577,544 7,962,089 - 6,577,544 7,962,089 - - 2,507,498 2,633,564 2,507,498 2,633,564 94,298,721 100,796,752 2,507,498 2,633,564 96,806,219 103,430,316 (20,333,756) (14,007,979) (407,493) (814,429) (20,741,249) (14,822,408) 233,207,810 242,967,976 (679,044) 135,385 232,528,766 243,103,361 212,874,054 228,959,997 (1,086,537) (679,044) 211,787,517 228,280,953 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 decreased by $20,741,249 during the fiscal year. Governmental activities net assets decreased by $20,333,756 (8.7%) during the fiscal year while business -type activities net assets decreased by $407,493 (60.0%). 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. H L� 5l IGovernmental 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, net of pass-throughs, declined by $6.8 million (19.1 %) during the fiscal ' year due mainly to the SERAF payment to counties mandated by the state budget. City gross property taxes decreased by 3.9%, while CDC gross property taxes increased by 0.6%. • Sales tax, the City's second largest revenue source, declined for the third straight year by $1.5 ' million (15.9%) as the effects of the recession continued to hit the new car sales and retail sectors in the City hard. • Franchise taxes were down $419,292 (11.9%) due to a spike in revenues in the prior year from the City's waste hauler franchise and a significant drop (43%) in the current year in the franchise payment from the natural gas franchise. • Interest income, also included in other revenues in the chart above, decreased by $492,945(10.3%) as interest rates continued to decline to historic low rates and fund balances ' continued to decline. The actual decline was larger but was offset by a $658,583 positive adjustment to market value of investments. • Overall Government Activities expenses decreased by $6,498,031 (6.4%). ' • Public Safety costs increased by $468,464 (1.0%). • Community Services costs decreased by $1.3 million (16.3%) as many programs were scaled back, including transit programs which were reduced by $940,046 (28.3%). • Community Development costs decreased by $4.2 million (33.0%) due in large part to a $3.5 ' million initial investment in a large senior housing project in the prior year. F Revenues by Source — Governmental Activities W Investment ' 6% Capital grants and contributions S% Expenses by Function — Governmental Activities General government Interest expense Qo/. Community develo 9% Community service 7% Public wv 22% Business -Tune Activities Public safety 51% 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 $295,260 (15.6%) from $1,897,885 in 2008/09 to $2,193,145 in 2009/10. Expenses and transfers out decreased by $111,676 (4.1%) from $2,712,314 in 2008/09 to $2,600,638 in 2009/10. The reasons for significant changes in the revenues and expenses of the City's business -type activities from the prior year are as follows: • Charges for services from clients increased by $307,966 while interest income revenue decreased by $12,706. • The City computer service enterprise operating expenses increased by $126,066. IExpenses and Program Revenues — Business -type Activities F11 11 I� �I 3,000,000 2,500,000 2,000,000 1,500,000 1,000,000 500,000 Computers ervice 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 $9,746,828, while total fund balance was $31,567,950. 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 19% of total general fund expenditures, while total fund balance represents 61 % 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 revenues, exclusive of fund transfers in, decreased by $3,770,869 while total expenditures, exclusive of fund transfers out, decreased by $700,726. • Total taxes were down $2,663,748 (7.1 %) from the prior year. Property taxes decreased by $724,788 (3.9%). This is the first time in recent'years that property taxes have decreased and reflects the deterioration of the real estate market and the start of the decline in real estate values. Sales tax revenues decreased for the third year in a row by $1,529,085 (12.2%) as the effects of the recession severely continued to impact new auto sales and retail spending. Franchise taxes decreased by $419,292 (11.9%) while business license taxes increased by $247,072 (13.5%). Transient occupancy taxes experienced a sharp decrease of $140,163 (17.8%). GI • Investment income continued its decline by $215,243 (6.6%) due to the combination of lower ' balances available for investment and sharply lower interest rates. The majority of interest earned in the General Fund comes from loans and advances to the CDC. ' • Charges for services increased by $138,876 (4.4%) • Interfund revenues decreased by $368,796 (18.6%) due to an adjustment to the City's administrative chargebacks to other funds. ' • General government expenditures decreased by 1.6%. • Public safety costs decreased by $233,911 (0.5%) as increased pension and benefits costs were offset by reductions in staffing. ' • Public Works expenditures decreased by $564,125 (10.8%). • Community Services expenditures decreased by $128,566 (14.0%) while Community ' Development expenditures decreased by $67,592 (13.5%). The City Debt Service Fund finished the fiscal year with a total fund balance of $18,777,417, ' up from $18,661,327 in the prior year due to decreased debt service payments for the City's variable rate debt due to historically low interest rates. The majority of that amount is designated for payment of debt service on the City's lease revenue bonds. ' The Community Development Commission Debt Service Fund has a deficit fund balance of $10,556,457, up from a deficit of $7,000,487 in the prior year. The increase was due to the SERAF payment to the county mandated by the state budget. This deficit is due to $17,124,571 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 $120,140 (0.6%) over ' the prior year while debt service expenditures and transfers out increased by $6,444,468 (30.9%) due to the SERAF payment. The CityCapital Projects Fund finished the year with a fund balance of 1 356 923 down from ' P J Y $ > $3,151,184 in the prior year. About one-half of the fund balance in the prior year was proceeds , of borrowing that were spent during the fiscal year to complete the public safety radio system upgrade. The Community Development Commission Capital Projects Fund finished the fiscal year ' with a total fund balance of $13,877,380, an increase from $13,089,534 in the prior year. The majority of that amount is reserved for low and moderate -income housing programs. Total , revenues, which consists mainly of interest income and repayment of loans in the housing fund, decreased by $595,247 (39.9%). Investment income decreased by $358,697 (56.4%). Revenue from loan repayments decreased by $238,375 (37.4%) from the prior year. Expenditures ' decreased by $4,438,203 (39.4%) due to a $3.5 million initial expenditure related to a senior housing project in the prior year. GENERAL FUND BUDGET ' There were only minor changes to the budget during the fiscal year. The major differences , between the original budget and the final amended budget of the General Fund are briefly summarized below. ' 10 ' �I J rl • $274,900 increase in the budget, of which $164,900 was due to carryovers of appropriations from the prior year. The remaining $110,000 was for the installation of parking machines, parking lot improvement and software related to a paid parking program at the civic center. Taxes fell short of their budget by $706,980. Sales tax revenues fell short by $856,227 and transient occupancy taxes fell short by $252,877. These shortfalls were partially offset by business licenses taxes that exceeded its budget by $435,986. Licenses and permits fell short of their budget by $221,715 as building permit activity continued to decline and animal licenses declined due to reduced canvassing by the county. Interest income fell short of its budget estimate by $159,964. Charges for services exceeded its budget by $144,323 due to increased towing fees and civic center parking fees. On the expenditure side, all categories were under budget due to vacant budgeted positions being frozen as the City continued its efforts to downsize the workforce. The largest savings were in the police department, which came in under budget by approximately $1.1 million. CAPITAL ASSETS Capital Assets (net of depreciation) Governmental Activities 2010 2009 Land 54,572,073 54,572,073 Buildings and improvements 77,745,604 74,534,390 Equipment and vehicles 5,232,310 5,808,872 Infiastructure 93,675,229 95,235,085 Rights of way 14,376,498 14,376,498 Construction in progress 11,365,056 9,020,759 Total 256.966.770 253.547.677 Business -type Activities 2010 2009 Total 2010 2009 - 54,572,073 54,572,073 - - 77,745,604 74,534,390 42,073 107,507 5,274,383 5,916,379 93,675,229 95,235,085 14,376,498 14,376,498 11,365,056 9,020,759 7-00�8.843 253.655.184 The major additions to capital assets during the year ended June 30, 2009 are as follows: • Construction in progress had a net increase of $2,344,297 with the major additions listed below: • Major Street Rehabilitation Projects ($2.7 million) • Upgrade to public safety radio system ($1.8 million) • Residential Street Rehabilitation Projects ($660,040) • Public Facility Energy Upgrades ($378,783) • Completed fixed asset additions of $6,950,943 included: • Major Street Rehabilitation Projects ($3.7 million) • Residential Street Rehabilitation Projects ($1.3 million) • Heritage House Park improvements ($748,035) Additional information on the City of West Covina's capital assets can be found in note 8 on pages 50 — 51 of this report. 11 LONGTERM DEBT At the end of the current fiscal year, the City had debt outstanding of $183,181,982. Of this amount, $121,890,000 represents outstanding bonds and $61,291,982 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, $52,975,000 comprises lease revenue bonds secured by leases from the General Fund, $31,560,000 of bonds secured by tax increment revenues of the Community Development Commission including the housing set - aside funds, and $37,355,000 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 Community Development Commission of property taxes and sales taxes generated within the district. Lease revenue bonds Special assessment bonds Tax allocation bonds Total Outstanding Bonds Governmental Activities 2010 2009 $ 57,515,000 37,355,000 27,020,000 121,890,000 58,530,000 38,745,000 28,165,000 125.440.000 The City maintains an "A+/A-1" 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 - 19 on pages 51 — 62 of this report. Contacting the City's Financial Management 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. I [I i� 1 12 1 J 1 LI 1 11 BASIC FINANCIAL STATEMENTS 11 13 11 F� 1� (This page intentionally left blank.) 14 CITY OF WEST COWNA Statement of Net Assets June 30, 2010 ' Governmental Business -Type Totals ' Assets: Activities Activities 2010 2009 Cash and investments (note 2) $ 63,152,970 45,221 63,198,191 75,720,906 Cash and investments with ' with fiscal agent (note 2) 9,673,925 - 9,673,925 10,027,286 Receivables, net: Accounts 408,322 6,800 415,122 629,888 Taxes 4,848,459 - 4,848,459 4,970,825 ' Interest 63,727 63,727 188,481 Assessments (note 5) 37,355,000 - 37,355,000 38,745,752 Notes and loans (note 6) 27,506,174 - 27,506,174 30,245,742 Internal balances 852,233 (852,233) Due from other agencies 2,658,097 - 2,658,097 990,330 Inventory 2,769 - 2,769 2,120 ' Prepaids and other assets 310,909 310,909 338,394 Land held for resale (note 7) 211,860 _ 211,860 211,860 Capital assets (note 8): Land and rights of way 68,948,571 - 68,948,571 68,948.571 Construction in progress 11,365,056 11,365,056 9,020,759 Other capital assets, net 176,653,143 42,073 176,695,216 175,685,854 Total assets 404,011,215 (758,139) 403,253,076 415,726,768 Liabilities: Accounts payable 2,238,332 43,050 2,281,382 3,110,763 ' Other accrued liabilities 2,942,577 42,340 2,984,917 2,855,815 Due to other governments 1,017,606 1,01.7,606 984,304 Interest payable 1,283,241 - 1,283,241 1,426,666 Deposits 716;431 - 716,431 781,766 ' Long-term liabilities (notes 9 to 19): Due within one year 9,294,484 44,683 9,339,167 7,339,675 ' Due in more than one year Total liabilities 173,644,490 191,137,161 198,325 173,842,815 170,946,826 328,398 191,465,559 187,445,815 Net assets: Invested in capital assets, net of related debt 184,338)106 42,073 184,380,179 180,405,979 Restricted for: ' Public safety, 946,741 - 946,741 645.084 Public works 6,038,721 - 6,038,721 6,150,495 Community services 3,316,185 - 3,316,185 3,285,555 Community development 8,014,487 - 8,014,487 15,856,665 Unrestricted 10.219,814 1,128,6� 9,091,204 21,937,175 Total net assets $ 212,874,054 (1,086,537) 211,787,517 228,280,953 _ See accompanying notes to the basic financial statements. 15 CITY OF WEST COVINA Statement of Activities For the year ended June 30, 2010 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 $ 3,337,547 1,019,690 48,151,398 3,850,741 1,598,046 221,232 21,048,475 7,041,281 2,808,986 3,203,377 6,558,987 1,089,227 750,924 150,000 8,624,770 313,639 - - 6,577,544 - - - 94,298,721 13,314,578 5,157.956 3,574,609 2,507,498 2,193,037 - - 25507,498 2,193,037 - - $ 96,806,219 15,507,615 5,1575956 3,5745609 General revenues: Taxes: Property taxes Sales tax Franchise taxes Transient.occupancy tax Other taxes Motor vehicle in lieu, unrestricted Investment income Other revenues Transfers Total general revenues and transfers Change in net assets Net assets at beginning of year, as restated (note 27) Net assets at end of year See accompanying notes to the basic financial statements. 16 ' Net (Expense) Revenue and Changes in Net Assets Governmental Business -type Totals Activities Activities 2010 2009 (2,317,857) - (2,317,857) (2,091,823) (42,481,379) - (42,481,379) (41,959,574) (7,994,831) - (7,994,831.) (10,383,108) (4,568,836) - (8,311,131) - (4,568,836) (8,311,131) (977,614) (12,601,618) (6,577,544) - (6,577,544) (7,962,089) ' (72,251,578) - (72,251,578) (75,975 8?j6 ' - (314,461) (314,461) (748,493) - (314,461) (314,461) (748,493) ' (72,251,578) (314,461) (72,566,039) (76,724,319) 27,681,291 - 27,681,291 34,541,045 ' 7,791,286 7,791,286 9,261,965 3,093,538 = 3,093,538 3,512,830 647,123 - 647,123 787,286 4,745,706. - 4,745,706 4,321,143 331,289 - 331,289 383,831 ' 4,288,088 3,246,361 108 4,288,196 3,246,361 4,781,141 4,212,670 93,140 (93,140) - - 51,917,822 (93,032) -51,824,790 61,801,911 (20,333,756) (407,493) (20,741,249) (14,922,408) 233,207,810 (679,044) 232,528,766. 243,103,361 $ 212,874,054 (1,086,537) 211,787,517 228,180,953 1 17 CITY OF WEST COVINA Balance Sheet - Governmental Funds June 30, 2010 City CDC General Debt Service Debt Service Assets Cash and investments $ 6,799,084 16,298,486 7,796,802 Cash and investments with fiscal agent - 2,303,321 6,006,115 Receivables, net: Accounts 216,610 136,513 - Taxes 206,505 - 1,133,638 Interest 14,346 - 17,095 Assessments - - - Notes and loans - - - Due from other funds (note 3) 826,181 - 77,050 Due from other governments 34,849 - - Prepaids and other assets 60,765 40,597 2,080 Advances to other funds (note 4) 25,224,571 - - Land held for resale - - - Total assets $ 35,872,911 18,778,917 15,032,780 Liabilities and Fund Balance Liabilities: Accounts payable 576,981 1,500 59,706 Other accrued liabilities 2,379,916 - - Pass -through payable - - 1,017,606 Due to other funds (note 3) 77,050 - 858,046 Deposits 306,800 - - Deferred revenue 964,214 - - Advances from other funds (note 4) - - 23,653,879 Total liabilities 4,304,961 1,500 25,589,237 Fund balance: Reserved for: Encumbrances 36,142 - - Notes and loans - - Prepaids and other assets 60,765 40,597 2,080 Advances to other funds 21,76.0,357 - - Land held for resale - - - Low and moderate income housing - - - Debt service requirements - 2,303,321 6,006,115 Unreserved, reported in General fund 9,710,686 - - Special revenue funds -, - - Debt service funds - 16,433,499 (16,564,652) Capital projects funds - - - Total fund balance (deficit) 31,567,950 18,777,417 (10,556,457) Total liabilities and fund balance (deficit) $ 35,872,911 18,778,917 15,032,780 See accompanying notes to the basic financial statements. 18 City Capital Projects 13366,487 1,607 1,617 9,554 12,831 1,344,092 _1,356,923 1,368,094 CDC Capital Projects 14,303,338 1,364,489 8,645 17,071 37,355,000 23,093,486 25,000 207,467 6,529,308 211,860 83,115,664 245,691 48,158 409,631 60,434,804 8,100,000 69,238,284 Non -Major Governmental 11,326,832 34,212 1,018,316 12,592 4,412,688 6,865 2,623,248 19,434,753 1,246,577 482,208 1,934,981 4,554,723 8,218,489 67,925 174,691 13,682 - 207,467 - 6,529,308 - 211,860 - 7,992,773 - 1,364,489 - (2,510,124) 13,877,380 83,115,664 10,318,958 722,615 11,216,264 19,434,753 19 Total Governmental Funds 2010 2009 57,891,029 9,673,925 395,980 4,848,459 62,711 31,355,000 27,506,174 935,096 2,658,097 310,909 31,753,879 211,860 173,603,119 2,132,072 2,919,836 1,017,606 2,870,077 716,431 65,953,741 31,753,879 107,363,642 291,589 13,682 310,909 28,289,665 211,860 7,992,773 9,673,925 9,710,686 10,318,958 (131,153) (443,417) 66,239,477 173,603,119 65,760,909 10,027,286 618,585 4,970,825 185,915 38,745,752 30,245,742 2,851,580 990,330 338,394 27,242,040 211,860 182,189,218 2,971,426 2,783,599 984,304 2,116,489 781,766 71,163,125 27,242,040 108,042,749 2,259,674 26,617 338,394 22,576,490 211,860 15,856,665 10,027,286 12,846,323 9,297,969 3,085,503 (2,380,312 74,146,469 182,189,218 [a t (This page intentionally left blank.) ' 20 ' CITY OF WEST COVINA Governmental Funds ' Reconciliation of the Balance Sheet of Governmental Funds to the Statement of Net Assets ' June 30, 2010 Fund balances of governmental funds $ 66,239,477 I Amounts reported for governmental activities in the statement of net assets are different because: ' Capital assets and accumulated depreciation, have not been included as financial resources in governmental fund activity. Capital assets Accumulated depreciation 393,258,199 (137,211,473) Long term debt and compensated absences that have not been included ' in the governmental fund activity: Bonds payable (121,990,000) Compensated absences (4,756,821) ' Other long term liabilities (40,994,924) ' Accrued interest payable for the current portion of interest due on bonds payable has not been reported in the governmental funds. (1,283,241) I Revenues that are measurable but not available are recorded as deferred revenue under the modified accrual basis of accounting. 65,953,741 Net pension obligations are not due and payable at year end;. they are therefore not reported in the governmental fund financial (3,592,477) statements. 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 (2,848,427) Net assets of governmental activities $ 212,874,054 See accompanying notes to the basic financial statements. 21 CITY OF WEST COVINA ' Statement of Revenues, Expenditures and Changes in Fund Balances - Governmental Funds For the year ended June 30, 2010 ' City CDC ' General Debt Service Debt Service Revenues: Taxes $ 35,118;020 - - 22,223,568 Special assessments - - - Licenses and permits Fines and forfeitures 904,985. 201,339 - - Investment income 3,063,036 l,', 87,388 369,430 Rental income Revenue from other agencies 288,319 1,349,097 - - - Charges for services 3,285,523 523,955 - Repayment of notes and loans. - - - Other revenues 739,518 - 1,168,524 ' Total revenues 44,949,837 2,311,343 23,761,522 Expenditures: ' Current: General government 4,572,167 - - Less interfund revenues (1,610,642) Public safety 42,980,283 - - Public works Community services . 4,665,175 787,274 - - Community development 431,979 - - Debt service: ' Principal - 1,238,592 2,340,000 Interest and fiscal charges - 1,887,321 5,782,901 Pass -through payments - - 9,.724,035 Other contractual payments - - 2,002,039 ' Total expenditures 51,826,236 3,125,913 19,848,975 Excess (deficiency) of revenues , over (under) expenditures (6,876,399 (814,570) 3,912,547 Other financing sources (uses): , Transfers in (note 25) 31.118,140 930,660 - Transfers out (note 25) (141,114) - (7,468,517 Total other financing sources (uses) 2,977,026 930,660 (7,468,517) Net change in fund balances (3,899,373) 116,090 (3,555,970) Fund balances (deficits) at beginning of year 35,467,323 18,661,327 (7,000,487) ' Fund balances (deficits) at end of year $ 31,567,950 18,777,417 (10,556,457) See accompanying notes to the basic financial statements 22 City Capital Projects 12,432 12,432 1,837,733 791 36,550 CDC Capital Projects 180,291 97,545 399,721 220,485 898,042 5,552,472 530,000 740,581 1,875,074 6,823,053 (1,862,642) (5,925,011) 68,381 6,712,857 68,381 (1,794,261) 3,151,184 1,356,923 6,712,857 787,846 13,089,534 13,81-7,380 Non -Major Governmental 4,760,054 4,871,575 1,123,359 79,617 22,500 9,972,883 1,425,391 49,324 152,550 22,457,253 74,454 821,241 15,014,855 4,566,540 164,220 Total Governmental Funds 62,101, 642 4,871,575 904,985 1,324,698 5,492,194 408,364 11,321,980 5,234,869 449,045 2,281,077 94,390,429 4,646,621 (1,610,642) 45,639,257 19,680,821 5,390,364 6,148,671 4,108,592 8,410,803 95724,035 2,002,039 104,140,561 1,815,943 (9,750,132) 193,114 11,023,152 (1,570,381) (9,180,012) (1,377,267) 1,843,140 438,676 (7,906,992) 10,177,588 74,146,469 11,216,264 66,239,477 23 64,056,919 4,18.0,404 1,085,650 1,229,852 5,601,091 311,997 8,848,048 5,041,759 794,365 2,953,985 94,104,070 4,687,485 (1,979,438) 45,554,204 17,923,628 7,189,514 10,739,465 3,828,282 9,055,221 3,468,902 2,181,599 102,648,862 (8,544,792) 12,048,364 (11,969,614) 78,750 (8,466,042) 82,612,511 74,146,469 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, 2010 Net changes in fund balances - total governmental funds 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 'Depreciation expense Repayment of bond and note principal is an expenditure in the governmental funds, but the repayment reduces long-term liabilities in the statement of net assets. Increases in developer agreement payable and amounts payable to the County of of Los Angeles are not recorded in the governmental funds, but increases long-term liabilities in the statement of net assets. The statement of net assets includes accrued interest on long term debt. This is the net change in the current year. To record as an expense the net change in compensated absences in the statement of activities. Revenues that are measurable but not available are recorded as deferred revenue under the modified accrual basis of accounting. Expenses reported in the statement of activities which do not require the use of current financial resources are not reported as expenditures in governmental funds: Increase in net other post employment benefits obligation $ (7,906,992) 9,295,240 (9,948,561) 4,108,592 (3,901,686) 143,425 (191,363) (5,209,384) (2,202,477) Internal service fiends 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. (4,520,550) Change in net. assets of governmental activities $ (20,333,756) See accompanying notes to the basic financial statements. 24 CITY OF WEST COVINA ' General Fund Statement of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual ' For the year ended June 30, 2010 Variance Prior ' Budget Actual Positive (Negative) Year Actual Original Final Revenues: ' Taxes $ 35,825,000 35,825,000 35,118,020 (706,980) 37,781,768 Licenses and permits 1,126,700 1,126,700 904,985 (221,715) 1,085,650 Fines and forfeitures 171,000 171,000 201,339 30,339 195,325 Investment income 3,223,000 3,223,000 3,063,036 (159,964) 3,278,279 Rental income 220,000 220,000 288,319 68,319 302,658 Revenue from other agencies 1,283,000 1,283,000 1,349,097 66,097 1,507,997 ' Charges for services 3,144,200 3,141,200 3,285,523 144,323 3,146,647 Other revenues 1,079,500 1,079,500 739,518 (339,982) 1,422,382 Total revenues 46,072,400 46,069,400 44,949,837 48,720,706 (1,119,563) ' Expenditures: Current: General government 4,860,375 4,925,102 4,572,167 352,935. 4,647,495 ' Less interfund revenues (2,000,000) (2,000,000) (1,610,642) (389,358) (1,979,438) Public safety 43,893,880 44,0 78,908 42,980,283 1,098,625 43,214,194 Public works 4,983,664 4,992,312 4,665,175 327,137 5,229,300 ' Community services 817,445 833,945 787,274 46,671 915,840 Community development 473,507 473,504 431,979 41,525 4.99,571 _ Total expenditures, 53,028,871 53,303,771 51,826,236 1,477,535 52,526,962 Excess (deficiency) of ' revenues over (under) expenditures (6,956,471) (7,234,371) (6,876,390) 357,972 (3,806,256) _ ' Other financing sources (uses): Transfers in (note 25) 3,100,000 3,118,140 3,118,140 - 1,957,412 Transfers out (note 25) (789,216) (816,114) (141,114) 675,000 (2,510,863) ' Total other financing sources (uses) 2,310,784 2,302,026 2,977,026 675,000 (553,451) ' Net change in fund balances(4,645,687) g (3,899,373) 1 032 2 ,97 4 (,359,707) ' Fund balances at beginning of year 35,467,323 35,467,323 35,467,323 - 39,827,030 Fund balances at end of year $ 30,821,636, 30,534,978 31,567,950 1,632,972 35,467,323 See accompanying notes to the basic financial statements. t 25 CITY OF WEST COVINA Statement of Net Assets - Proprietary Funds . June 30, 2010 Assets Current assets: Cash and investments Receivables, net: Accounts Interest Due from other funds (note 3) Inventory Total current assets Capital assets: 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 (note 3) Current portion of: Claims and judgments payable Compensated absences payable Total current liabilities Non -current liabilities: Claims and judgments payable Compensated absences payable Total non -current liabilities Total liabilities Net assets (deficits): Computer Governmental Services Activities Enterprise Internal Totals Fund Service Funds 2010 2009 $ 45,221 5,261,941 5,307,162 9,959,997 6,800 12,342 19,142 11,303 - 1,016 1,016 2,566 - 2,883,652 2,883,652 - - 2,769 _ 2,769 2,120 52,021 8,161,720 8,213,741 9,075,986 1,059,120 3,906,085 4,965,205 5,007,705 (1,017,047) (2,986,041) (4,003,088) (3,804,755) 42,073 920,044 962,117 1,202,950 94,094 9,081,764 .9,175,858 11,178,936 43,050 106,260 149,310 139,337 42,340 22,741 65,081 72,216 852,233 96,438 948,671 735,091 - 3,771,370 3,771,370 2,226,476 44,683 22,181 66,864 68,798 982,306 4,018,990 5,001,296 3,241,918 - 7,814,636 7,814,636 6,679,426 198,325 96,565 294,890 264,513 198,325 7,911,201 8,109,526 6,943,939 1,180,631 11,930,191 13,110,822 10,185,857 Invested -in capital assets 1 42,073 920,044 962,117 1,202,950 Unrestricted (1,128,610) (3,768,471) (4,897,081) (209,871) Total net assets (deficits) $ (1,086,537 (2,848,427) 3,934,964 993,079 See accompanying notes to the basic financial statements. 26 CITY OF WEST COVINA Statement of Revenues, Expenses and Changes in Fund Net Assets - Proprietary Funds For the year ended June 30, 2010 Operating revenues: Charges for services Otherrevenues Total operating revenues Operating expenses Computer Governmental Services Activities - Enterprise Internal Totals Fund Service Funds 2010 2009 $ 2,193,037 4,264,125 6,457,162 6,073,100 - 185,467 185,467 19,044 2,193,037 4,449,592 6,642,629 6,092,144 Personnel services 1,585,569 Cost of sales, services and operations 856,495 Depreciation 65,434 Insurance and claims - Total operating expenses Operating income (loss) Nonoperating revenues (expenses): Investment income Total nonoperating revenues (expenses) Income (loss) before transfers Interfund transfers: 2,507,498 (314,461) 915,301 2,500,870 2,697,258 1,191,064 2,047,559 1,898,333 172,999 238,433 276,861 4,947,113 4,947,113 4,029,206 7,226,477 9,733,975 8,901,658 (2,776,885) (3,091,346) (2,809,514) 108 6,335 6,443 33,431 108 6,335 6,443 33,431 (314,353) (2,770,550) (3,084,903) (2,776,083) Transfers out (note 25) (93,140) Change in net assets (407,493) Net assets (deficits) at beginning of year (679,044) Net assets (deficits) at end of year $ (1,086,537) (1,750,000) i,843,140) (78,750) (4,520,550) (4,928,043) (2,854.833) .1,672,123 993,079 3,847,912 (2,848,427) (3,934,964) 993,079 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, 2010 Computer Governmental Services Activities - Enterprise Internal Totals Fund Service Funds 2010 2009 Cash flows from operating activities: Cash received from customers $ 2,194,766 - 2,194,766 2,012,890 Cash received from user departments - 4,440,024 4,440,024 4,350,081 Cash payments to suppliers for goods and services (831,813) (3,471,031) (4,302,844) (4,449,568) Cash payments to employees for services (1,582,732) (896,830) (2,479,562) (2,696,788) Net cash provided by (used for) operating activities (219,779) 72,163 (147,616) (783,385) Cash flows from noncapital financing activities: Cash received from other funds 358,032 - 358-032 549,699 Cash paid to other funds (93,140) (4,778,104) ( 871:244) (153,389) Net cash provided by (used for) noncapital financing activities 264,892 (4,778,104) (4,513,212) 396,310 Cash flows from capital and related financing activities: Cash paid for acquisition and construction of capital assets - - - (32,812) Net cash proved by (used for) capital and related financing activities - - - (32,812) Cash flows from investing activities: Interest received on investments 108 7,885 7,993 34,974 Net cash provided by (used for) investing activities 108 7,885 7,993 34,974 Net increase (decrease) in cash and cash equivalents 45,221 (4,698,056) (4,652,835) (384,913) Cash and cash equivalents at beginning of year - 9,959,997 9,959,997 10,344,910 Cash and cash equivalents at end of year $ 45,221 5,261,941 5,307,162 9,959,997 See accompanying notes to the basic financial statements. 28 1 1 1 1 1 1 1 1 1 CITY OF WEST COVINA Statement of Cash Flows -Proprietary Funds (Continued) 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 Gain on disposition of capital assets (Increase) decrease in accounts receivable (Increase) decrease in due from other agencies (Increase) decrease in prepaids and other assets Increase (decrease) in accounts payable Increase (decrease) in other accrued liabilities Increase (decrease) in compensated absences payable Increase (decrease) in claims and judgments payable Total adjustments Net cash provided by (used for) operating activities Computer Governmental Services Activities - Enterprise Internal Totals 2010 2009 $ (314,461) (2,776,885) (3,091,346) (2,809,514) 65,434 172,999 238,433 276,861 - 2,400 2,400 - 1,729 (9,568) (7,839) . 270,827 - (649) (649) 25685 - - - 450 24,682 (14,709) 9,973 (63,862) (5,448) (1,687) (7,135) (7,387) 8,285 20,158 28,443 7,857 - 2,680,104 2,680,104 1,538,698 94,682 2,849,048 2,943,730 2,026,129 $ (219,779) 72,163 (1— 47,616) (783,385) There were no significant noncash financing or investing activities for the year ended June 30, 2010. ►PM CITY OF WEST COVINA Statement of Fiduciary Assets and Liabilities June 30, 2010 Assets Cash and investments (note 2) Accounts receivable Total assets Liabilities and Net Assets Liabilities: Accounts payable Deposits Total liabilities Special Deposits Fund 2010 2009 $ 876,135 792,285 - 100 $ 876,135 792,385 $ - 3,846 876,135 788,539 $ 876,135 792,385 See accompanying notes to the basic financial statements. 30 CITY OF WEST COVINA ' Notes to the Basic Financial Statements ' Year Ended June 30, 2010 (1) Summary of Significant Accounting 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 City of West Covina Community Development Commission, the West Covina Public ' Financing Authority, the West Covina Parking Authority and the West Covina Community Services Foundation. A brief description of each component unit follows: The City of West Covina Communi Development Commission 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. By ordinance, the members of the City Council sit as the governing body of the Commission and appoint the Commission Director who 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 consistprimarily of property tax allocations on the incremental increase of property values in the redevelopment area and interest income. ' 31 CITY OF WEST COVINA Notes to the Basic Financial Statements , (Continued) 1 Summm of Si ificant 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 City of West Covina .Community Development Commission 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 91793. ' 32 CITY OF WEST COVINA D I J I 1 Notes to the Basic Financial Statements (Continued) O 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 (Continued) (1) Summary 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 long-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 nonmajor 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 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 nonexchange transactions are recognized as revenues when all applicable eligibility requirements have been met. 0 0 I L 34 F CITY OF WEST COVINA ' Notes to the Basic Financial Statements (Continued) ' 1 Summa of Significant Accounting Policies Continued � 1 ry � � (Continued) 1 In 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. n 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. Prior to the issuance of GASB 33, 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. 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. 35 CITY OF WEST COVINA Notes to the Basic Financial Statements , (Continued) C (11 Summary of Significant Accounting Policies (Continued)- 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. CDC 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. Capital Projects Fund This fund accounts for all capital expenditures not being accounted for in other capital projects funds or other fund types. CDC 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 in the Community Development Commission. 36 :' ' CITY OF WEST COVINA Notes to the Basic Financial Statements (Continued) ' 1 SummM of Significant Accounting Policies Continued Additionally, the City reports the following fund types: Computer Service Entep2rise 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, for the City's self-insurance programs, and for retirement health savings plans for qualified City employees. 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 by the City Council in June of each year for the General, special revenue, debt service funds 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 funds and capital projects funds. 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. ' 37 CITY OF WEST COVINA Notes to the Basic Financial Statements ' (Continued) 1 SummM of Significant Accounting Policies Continued ' (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 fund'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 ' funds' share in the cash and investment pool of the City of West Covina. (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 38 I CITY OF WEST COVINA ' Notes to the Basic Financial Statements (Continued) (1) SuminM of Significant Accounting Policies (Continued) ' (i) Land Held for Resale 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) 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. (k) ProppIly 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 1 ' Levy Date: July 1 Due Date: First Installment - November 1 Second Installment - February 1 Delinquent Date: First Installment - December 11 Second Installment - April 1-1 ' 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 1 39 CITY OF WEST COVINA ' Notes to the Basic Financial Statements , (Continued) 1 SummM of Significant Accounting Policies Continued (1) 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. 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 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 (m) 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. 40 ' CITY OF WEST COVINA 71 LJ Notes to the Basic Financial Statements (Continued) (1) Summary of Significant Accounting Policies (Continued) (n) 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. (o) Prior Year Data Selected information regarding the prior year has been included in the accompanying financial statements. This information has been included for comparison purposes only and does not represent a complete presentation in accordance with generally accepted accounting principles. Accordingly, such ' information should be read in conjunction with the government's prior year financial statements, from which this selected financial data was derived. (2) Cash and Investments Cash and investments held by the City at June 30, 2010 are reported in the accompanying financial statements as follows: Statement of Net Assets: Cash and investments Cash and investments with fiscal agent Fiduciary Funds: Statement of Assets and Liabilities: Cash and investments Total cash and investments $ 63,198,191 9,673,925 876,135 73,748,251 ' 41 CITY OF WEST COVINA Notes to the Basic Financial Statements (Continued) (2) Cash and Investments (Continued) Cash and investments as of June 30, 2010 consists of the following: Cash on hand Deposits with financial institutions Investments $ 8,650 2,858,465 70,881,136 Total cash and investments 73,748.251 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. Investment Types Authorized by State Law Local Agency Bonds U.S. Treasury Obligations U.S. Agency Securities Banker's Acceptances Commercial Paper Negotiable Certificates of Deposit Repurchase Agreements Reverse Repurchase Agreements Medium=Term Notes Mutual Funds Time Certificates of Deposit Money Market Mutual Funds Mortgage Pass -Through Securities County Pooled Investment Funds Local Agency Investment Fund JPA Pools (other investment pools) Authorized By Investment *Maximum Policy Maturity L 17 F� 11 *Maximum *Maximum ' Percentage Investment Of Portfolio In One Issuer No N/A None None Yes 5 years None None Yes 5 years None None Yes 180 days 40% 30% Yes 270 days 40% 10% Yes 5 years 30% None Yes 100 days 20% None Yes 92 days 20% None Yes 5 years 30% None No N/A None None Yes 5 years 25% None Yes N/A 20% 10% 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. 11 1 42 ' CITY OF WEST COVINA Notes to the Basic Financial Statements (Continued) '(2) Cash and Investments Continued ' 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 Type Maturity 1 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 Investment 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 its. fair value . will. be 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. 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: n . 43 CITY OF WEST COVINA Notes to the Basic Financial Statements (Continued) (2) Cash and Investments (Continued) Remaining Maturity Fair Less Than Investment Type Value 1 year 1 to 2 years" 2 to 3 years . Over 3 years Local Agency, Investment Fund $ 37,836,672 37,836,672 - - - Los Angeles County Investment Pool 7,391,781 � 7,391,781 - - Federal Agency Securities 15,978,758 - - - 15,978,758 Held by fiscal agent: Money'Market . Mutual funds 589,947 589,947 - - Federal Agency. Securities 4,081,308 799,840 - 2,320,070 961,398 Investment Agreements 5,002,670 - - - 5,002,670 Total 70.881.136 46,618,240 - 2.320.070 21,942,826 Disclosures Relating to Credit Risk Generally, credit risk is the risk that an issuer of an investment will not fulfill its obligation to the holder of the investment. This is measured by the assignment of a rating by a nationally recognized statistical rating organization. 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. Minimum Legal Fair Investment Type Rating Value' Rating as of Year End AAA AA Not Rated Local Agency Investment Fund N/A $37,836,672 - - 37,836,672 Los Angeles County Investment Pool N/A . 7,391,781 - 7,391,781 Federal Agency Securities N/A 15,978;758 15,978,758 - - Held by fiscal agent: Money Market Mutual Funds A 589,947 589,947 - - Federal Agency Securities A 4,081,308 4,081,308 - Investment Agreements N/A 5,002,670 - - 5,002,670 $70,88lJ36 20,650,013 50.2 11.123 44 ' CITY OF WEST COVINA ' Notes to the Basic Financial Statements (Continued) (1 2 Cash and Investments Continued ' 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 Reported Amount FNMA Federal agency securities $ 6,549,140 FHLMC Federal agency securities 12,549,528 Westdeutsche Landesbank Investment agreement 5,002,670 Investments in any one issuer that represent 5% or more of total investments by the reporting unit (primary government, governmental activities, major fund, nonmajor funds in the aggregate, etc.) are as follows. Issuer Investment Type Reported Amount 1 11 i� City Debt Service Fund: FNMA FHLMC FFCB Federal agency securities Federal agency securities Federal agency securities CDC Debt Service Fund: FNMA Federal agency securities FHLMC Federal agency securities Westdeutsche Landesbank Investment agreement Custodial Credit Risk $ 5,104,984 11,749,688 961,398 1,444,156 799,840 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 1 45 CITY OF WEST COVINA ' Notes to the Basic Financial Statements , (Continued) (2) Cash and Investments (Continued) financial institutions to secure City deposits by pledging first trust deed mortgage notes , having a value of 150% of the secured.public deposits. 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. I Investment in County Investment Pool The City is a voluntary participant in the Los Angeles County Investment Pool (LACIP) that is regulated by the California Government Code and the Los Angeles County Board of Supervisors under the oversight of the Los Angeles County Treasurer -Tax Collector. 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 LACIP for the entire LACIP portfolio. The balance available for withdrawal is based on the accounting records maintained by LACIP, which are recorded on an amortized cost basis. (3) Due From and To Other Funds , Interfund receivable and payable balances at June 30, 2010 are as follows: Due from Other Funds Due to Other Funds Amount , General Fund CDC Debt Service Fund $ 826,181 (a) CDC Capital Projects Fund 25,000 , Non -Major Governmental Funds 6,865 858,046 CDC Debt Service Fund General Fund 77,050 Internal Service Funds Non -Major Governmental Funds 1,934,981 (b) ' Computer Services Enterprise Fund 852,233 (b) Internal Service Funds 96,438 (b) 2,883,652 Total interfund receivable and payable balances 3.818.748 46 1 CITY OF WEST COVINA d I 11 11 11 1 Notes to the Basic Financial Statements (Continued) (3) Due From and To Other Funds, (Continued) (a) The largest component of these interfund balances is to accrue sales tax reimbursements owed to the General Fund. (b) These interfund balances are a result of short-term borrowings to cover deficit cash in the Recreation Program Fund, Transportation Development Act Fund, Grants Fund, `CDBG Fund, Public Safety Fund, Special Assessments Fund, Integrated Waste Management Fund, Park Development Capital Projects Fund, Computer Service Enterprise Fund, and Fleet Management Internal Service Fund of the City at June 30, 2010. (4) Interfund Advances The City has authorized several interfund advances to be used for the operations of the funds receiving the advances. At June 30, 2010 the outstanding advances are: Advances to Other Funds Advances from Other Funds Amount General Fund CDC Debt Service Fund $ 17,124,571 (a) CDC Capital Projects Fund 8,100,000 (b) 25,224,571 CDC Capital Projects Fund CDC Debt Service Fund _ 6,529,308,(c) 31,753,879 (a) The General Fund has made the following advances to the Community Development Commission Debt Service Fund: Administrative and construction costs $ 10,564,091 Capital project costs 1,959,743 Revolving credit _ 4,600,737 Total $ 17,124,571 The outstanding advances are comprised of principal of $16,160,358 and accumulated interest of $964,213 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 2025. (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 2010, the General Fund advanced $2,000,000 to the CDC Capital Projects Fund. The advance accrues interest at 6,25% per annum and, is due in June 2011. In June 2010, the City advanced $500,000 to the CDC Capital Projects Fund. The advance accrues interest at 6.25% and is due June 2011. 47 CITY OF WEST COVINA Notes to the Basic Financial Statements ' (Continued) (4) Interfund Advances, (Continued) (c) In February 2010 the CDC Capital Projects Fund made an advance of $6,529,308 to the CDC Debt Service Fund to satisfy. the Commission's Supplemental Educational Revenue Augmentation Fund (SERAF) obligation as required by Assembly Bill ABX4-26. The advance bears no interest and must be -repaid by June 30, 2015. (5) Assessments Receivable As of June 30, 2010, the following assessments receivable were outstanding: CDC Capital Projects Fund: 1996 Special Tax Bonds $ 37,355,000 In connection with the Commission's issuance of its $51,220,000 1996 Special Tax ' Bonds, the Commission has recorded $37,355,0.00 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. These assessment and corresponding deferred revenue will be reduced as the principal on the bonds mature. , (6) Notes and Loans Receivable As of June 30, 2010, the following notes and loans receivable were outstanding: Housing rehabilitation $ 6,551;533 First time home buyers 753,762 Housing preservation program 1,328,199 Lark Ellen Towers 5,742,029 Executive Lodge Apartments 6,137,391 West Covina Senior Villas, L.L.0 3,116,666 West Covina Senior Villas II,.L.P. 31,964,952 Clippinger note . 675,269 Other Community Development Commission loans 3,340,870 ' Allowance for doubtful accounts (4,104,497) Total 27,506,174 The City has made several housing rehabilitation loans totaling $6,551,533 to qualified applicants using Community Development Block Grants and housing set -aside funds. These loans bear interest up to 5% and ate repaid when title to the property changes. The Commission has made loans to first-time home buyers totaling $753,762. 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 38 individual loans outstanding at June 30, 2010 ranging from $5,000 to $25,000. 48 fl CITY OF WEST COVINA u 1 11 11 1 Notes to the Basic Financial Statements (Continued) (6) Notes and Loans Receivable, (Continued) The Commission has also made housing preservation loans totaling $1;328,199 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 126 individual loans outstanding at June 30, 2010 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, 2010 is $5,742,029. 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 requires annual payments equal to 80% of net profits earned by the project. The outstanding principal and accrued interest at June 30, 2010 is $6,137,391. 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, 2010 is $3,116,666. In May 2009, the Commission entered into an agreement with West Covina Senior Villas II, L.P. to provide $8,600,000 for the acquisition of real property in the City of West Covina and construction and maintenance of an approximately 65-unit apartment complex to be rented to low income and very low income senior citizens. The loan is secured by a deed of trust. The loan does not accrue interest so long as the borrower does not default on the loan. The note requires annual payments of $86,869 through ninety- nine years of the note's commencement date. As of June 30, 2010 the Commission had provided $3,964,952. 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, 2010 is $675,269. (7) Land Held for Resale Land held for resale is comprised of the following at June 30, 2010: ROP Site $ 144,820 BKK Project 67,040 Total land held for resale $211,860 1 49 , CITY OF WEST COVINA Notes to the Basic Financial Statements , (Continued) (8) Capital Assets Capital asset activity for the year ended June 30, 2010 is as follows: Balance at Balance at June 30, 2009* Additions Deletions June 30, 2010 Governmental activities: Buildings and improvements $ 103,301,074 1,072,128 - 104,373,202 Equipment and vehicles 18,282,069 524,431 (96,485) 18,710,015 , Infrastructure — Pavement 168,674,976 5,074,170 - 173,749,146 Infrastructure - Other 19,684,095 280,214 - 19,964,309 ' Total cost of depreciable assets 309,942,214 6,950,943 (96,485) 316,796,672 Less accumulated depreciation: , Buildings and improvements (24,518,871) (2,108,727) - (26,627,598) Equipment and vehicles (12,473,197) (1,098,593) 94,085 (13,477,705) Infrastructure — Pavement (78,727,897) (6,562,879) - (85,290,776) Infrastructure — Other (14,396,089) (351,361) - (14,747,450) , Total accumulated depreciation (130,116,054) (10,121,560) 94,085 (140,143,529) Net depreciable assets 179 826 1 p ,160 (3,170,6 7) (2,400) 176,653;143 Capital assets not depreciated: Land 54,572,073 - - 54,572,073 Rights of way. 14,376,498 - - 14,376,498 Construction in progress 9,020,759 9,187,362 (6,843,065) 11,365,056 Capital assets, net S 257,795.490 6. 116.745 —(6.845.465) 256,966.770 * Adjustments were made to the beginning balance of certain capital asset categories to , reflect the prior period. adjustment to record the value of the Lakes Parking structure. Depreciation expense was charged in the following functions in the Statement of , Activities for the year ended June 30, 2010 as follows: General government $ 73,158 Public safety 776,566 Public works 7,480,044 Community services 1,413,199 Community development 378,593 $ 10,121,560 ' 50 ' CITY OF WEST COVINA 1 i Notes to the Basic Financial Statements (Continued) (8) Capital Assets, (Continued) Balance at Balance at June 30, 2009 Additions Deletions June 30, 2010 Business -type activities: Equipment and. machinery $ 1,059,120 - - 1,059,120 Less accumulated depreciation (951,613) (65,434) - (1,017,047) Capital assets, net $ 107.507 (65,434) - _ 42.073 Depreciation expense was charged in the following programs of the primary government for the year ended June 30, 2010 as follows: Computer service $65,434 (9) Long, -Term Liabilities Changes in long-term liabilities for the year ended June 30, 2010 are as follows: Balance at Balance at Due within Due in more Governmental activities June 30, 2009 Additions Deletions June 30, 2010 one year than one year Lease Revenue Bonds: 1988 Lease Revenue Bonds $ 4,875,000 - 2002 Lease Revenue Bonds 17,810,000 - 200 3 Lease Revenue Bonds 2,965,000 - 2004 Lease Revenue Bonds 12,275,000 - 2005 Lease Revenue Bonds 2,600,000 - 2006 Lease Revenue Bonds 18.005.000 - Total Lease Revenue Bonds 58,530,000 1996 Special Tax Bonds 38,745,000 (335,000) 4,540,000 365,000 4,175,000 (295,000) 17,515,000 455,000 17,060,000 (140,000) -2,825,000 150,000 2,675,000 (185,000) 12,090,000 , 290,000 11,800,000 (60,000) 2,540,000 60,000 2,480,000 - 18,005,000 80,000 17,925,000 (1,015,000) 57,515,000 1,400,000 56.115,000 (1,390.000) 37,355,000 1,485,000 35,870,000 Tax Allocation Bonds: 1999 Tax Allocation Bonds 3,915,000 _ (115,000) 3,800,000 125,000 . 3,675,000 2002 Tax Allocation Bonds 10,530.000 (500,000) 10,030,000 520,000 9,510,000 Total Tax Allocation Bonds 14,445,000 - (615,000) 13,830,000 645,000 13,185,000 Housing Set -Aside Bonds: 1998 Housing Set -Aside Bonds 4,760,000 - (175,000) 4,585,000 190,000 4,395,000 2001 Housing Set -Aside Bonds 8,960,000 - (355,000) 8,605,000 370,000 8,235,000 Total Housing Bonds 13,720.000 - (530,000) 13,190,000 560,000 12.630,000 1 51 ' CITY OF WEST COVINA Notes to the Basic Financial Statements ' (Continued) 9 Lon -Term Liabilities Continued Balance at Balance at Due within Due in more ' Governmental activities June 30, 2009 Additions Deletions Jurie 30.2010 one year than one year Compensated absences payable 4,664,046 779,908 (568,387) 4,875,567 882,813 3,992,754 Claims and judgments payable 8,905,902 3,408,727 (728,623) 11,586,006 3,771,370 7,814,636 Capital lease obligations 2,691,276 - (429,875) 2,261,401 417,863 1,843,538 , Notes payable 2,456,751 - (128,717) 2,328,034 132,438 2,195,596 23,481,964 Developer agreement payable 3,296,905 - 26,778,869 - 26,778,869 Net OPEB Obligation 1,390,000 3,317,000 (1,114,523) 3,592,477 - 3,592,477 Due to the County of Los Angeles 9,021,839 1,077,146 (472.365) 9,626,620 - 9,626,620 I Total long-term liabilities $ 178.051.778 11.879,686 (6,992,490) 182.938.974 294 4 4 173.644.490 Changes in long-term liabilities for business -type activities for the year ended June 30, 2010 follows: ' are as Balance at Balance at, Due within Due in more Business -type activities June 30, 2009 Additions Deletions June 30, 2010 one year than one year Compensated absences payable $ 234.723 51,445 43 1 0 243-008 44 6 3 1 8 325 (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. The reserve requirement of $688,492 was fully funded at June 30, 2010. At June 30, 2010, the outstanding balance is $4,540,000. i 52 CITY OF WEST COVINA 1 1 Notes to the Basic Financial Statements (Continued) (10) Lease Revenue Bonds (Continued) 2002 Lease Revenue Refunding_ Bonds, Series A and B (Public Facilities Project) On June 25, 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 entire principal amount of $2,690,000 was paid in full in September 2005. 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 on September 1, in amounts ranging from $455,000 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 iAuthority as rental for certain public facilities consisting of a portion of the City's Civic Center Complex. At June 30, 2010, the outstanding balance is $17,515,000. ' 2003 Lease Revenue Bonds, Series A (Community Center Project) P On February 19, 2003, the City issued $3,625,000 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 $150,000 to $270,000, with interest rates ranging from 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, 2010 of $286,535 was fully funded. At June 30, 2010, the outstanding balance is $2,825,000. 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 $120,000 to $535,000. The Series B bonds mature annually through May 1, 2034 in amounts ranging from $80,000 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, 2010, the outstanding balance is $12,090,000. 53 CITY OF WEST COVINA Notes to the Basic Financial Statements (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 and finance the construction of various public facility projects. The bonds mature annually on September 1 in amounts ranging from $60,000 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, 2010, the outstanding balance is $2,540,000. 2006 Lease Revenue Bonds, Series A and B (Big League Dreams Project) 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 through.June 1, 2036 in amounts ranging from $20,000 to $1,270,000, with interest rates that range from 4.0% to a maximum of 5.0% over the term of the bonds. The Series B bonds mature annually through June 1, 2036 in amounts ranging from $60,000 to $550,000, with interest rates that range from 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. The reserve requirement of $1,516,496 was fully funded at June 30, 2010. At June 30, 2010, the outstanding balance is $18,005,000. The annual debt service requirements on the Lease Revenue Bonds are as ,follows for the year ended June 30, 2010: Year Ending June 30 2011 2012 2013 2014 2015 2016-2020 2021-2025 2026-2030 2031-2035 2036-2038 1988 Lease 2002 Lease 2003 Lease Revenue Bonds Revenue Bonds Revenue Bonds Principal Interest Principal Interest- Principal Interest $ 365,000 -125,304 455,000 56,048 150,000 136,535 390,000 115,230 470,000 54,592 155,000 130,128 425,000 104,466 480,000 53,088 160:000 123,195 460,000 92,736 495,000 51,552 170,000 115,685 495,000 80,040 510,000 49,968 175,000 107,663 2,405,000 172,224 2,800,000 224,304 1,005,000 398,503 - - 3,240,000 176,736 1,010,000 110,648 - 3,760,000 121,664 - - - - 4,355,000 57,840 - - - - 950,000 3,040 - - $ 4,540,000 690. 000 17.515.000 848,832 2,825.000 1,122,357 54 1 1 1 1 1 1 1 1 1 1 1 i i 1 1 1 1 CITY OF WEST COVINA 1 I Notes to the Basic Financial Statements 0) Lease Revenue Bonds (Continued) Year Ending June 30 2011 2012 2013 2014 2015 2016-2020 2021-2025 2026-2030 2031-2035 2036-2038 2004 Lease Revenue Bonds Principal Interest $ 290,000 59,241 300,000 57,820 310,000 56,350 325,000 54,831 345,000 531239 1,965,000 239,390 2,450,000 186,641 3,080,000 120,712 3,025,000 37,902 12.090.000 866.126 (Continued) 2005 Lease Revenue Bonds Principal Interest 60,000 8,128 65,000 7,936 65',000 7,728 70,000 7,520 70,000 7,296 410,000 32,848 490,000 25,776 590,000 17,360 720,000 7,072 2,540.000 1 11.664 01) 1996 Special Tax Bonds (The Fashion Plaza Project) 2006 Lease Revenue Bonds Principal Interest 80,000 962,920 125,000 958,886 165,000 952,757 195,000 944,707 235,000 935,216 1,805,000 4,459,349 3,185,000 3,844,046 4,305,000 2,856,227 6,090,000 1,553J79 1,820,000 96,885 18,005,000 17,564.172 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 to finance public parking facilities, street and other improvements located in or adjacent to the Community Development Commission Community Facilities District. The serial bonds matured during the fiscal year ended June 30, 2007. 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. 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. Cash and investments held by the fiscal agent, including the guaranteed investment contract at June 30, 2010 totaled $5,003,665. The'required reserve at June 30, 2010 was $5,122,000 resulting in a deficit of $118,335. The outstanding principal balance of the bonds at June 30, 2010 is $37,355,000. Debt service requirements on these bonds at June 30, 2010 are as follows: Year Ending June 30 Principal Interest 2011 $ 1,485,000 2,196,750 2012 1,580,000 2,104,800 2013 1,770,000 2,004,300 2014 2,055,000 1,889,550 2015 2,340,000 1,757,700 2016-2020 15,215,000 6,310,950 2021-2023 12,910,000 1,233.600 S 37 355.000 17 497. 550 1 55 CITY OF WEST COVINA Notes to the Basic Financial Statements :(Continued) (12) Tax Allocation Bonds 1999 Tax'Allocation Bonds. 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 capital 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 through November 1, 2029, in amounts ranging from $5,000 to $165,000. . 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. In May 2010, as the result of a failed remarketing, the trustee made a tender draw against the letter of credit in the amount of $3,802,967 at an interest rate of 3.25% per annum. The outstanding principal balance of the bonds at June 30, 2010 is $3,800,000. Subsequent to year end, a replacement letter of credit was issued and the bonds were successfully remarketed. 2002 Tax Allocation Refunding Bonds On June 4, 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 and finance certain improvements to the civic center parking structure. 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 at interest rates.ranging from 1.75% to 5.10%. The principal of the bonds is due annually beginning on September 1, 2003, in amounts ranging .from $520,000 to $800,000. At June 30, 2010 the required reserve of $986,413 was fully funded. The principal balance of outstanding bonds at June 30, 2010 is $10,030,000. The annual debt service requirements on the tax allocation bonds as of June 30, 2010 are as follows: 1999 Tax Allocation. 2002 Tax Allocation Year Ending Bonds Bonds June 30 . Principal Interest Principal Interest 2011 $ 125,000 123,500 520,000 460,413 2012 130,000 119,438 540,000 446,003 2013 135,000 115,213 560,000 424,273 2014 140,000 110,825 580,000 401,110 2015 T50,000 106,275 605,000 376,291 2016-2020 830,000 454,513 3,470,000 1,414,516 2021-2025 1,025,000'. 308,425 35105,000 546,083 2026-2030 1,265,0.00 126,100 65U00 16.575 $3.800,000 1. 4 4 289 10 030,000 4 09 264 1 1 1 1 W CITY OF WEST COVINA 11 1 hI Notes to the Basic Financial Statements (Continued) (12) Tax Allocation Bonds (Continued) 1998 Housing Set -Aside Tax Allocation Bonds In 1998, the Community Development. Commission issued $6,145,000 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 $190,000 to $325,000, with interest rates varying from 4.5% to 7.0%. Interest is 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. At June 30, 2010.the required reserve of $439,430 was fully funded. The principal balance of outstanding bonds at June 30, 2010 is $4,585,000. 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 with interest rates ranging from 2.25% to 5.00%. The principal of the bonds is due annually through September 1, 2031 in amounts ranging from $355,000 to $600,000. The bonds are subject to optional and mandatory redemption provisions. At June 30, 2010 the required reserve of $733,333 was fully funded. The principal balance of outstanding bonds at June 30, 2010 is $8,605,000. The annual requirements to amortize housing tax allocation bonds as of. June 30, 2010 are as follows: Year Ending June 30 2011 2012 2013 2014 2015 2016-2020 2021-2025 2026-2030 2031-2033 1998 HousingBonds onds Principal Interest 190,000 249,430 195,000 239,516 210,000 228,908 215,000 217,683 230,000 205,715 1,350,000 818,632 1,775,000 381,951 420,000 11,938 1,500,000 660,000 $ 4,585,000 2.353.773 8,605,000 2001 Housing Bonds Principal Interest 370,000 399,716 385,000 384,376 400,000 367,935 420,000 350,195 435,000 331,167 2,505,000 1,324,595 1,930,000 720,419 397,000 26,250 4.301.653 57 CITY OF WEST COVINA , Notes to the Basic Financial Statements , (Continued) 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. , The terms of the letters of credit are summarized as follows: Letter. of Credit Trustee Amount Expiration Date ' Allied Irish Bank: 1988 Lease Revenue Bonds Bank of New York $ 6,934,137 August 16, 2010. 1999 Tax Allocation Bonds US Bank 4,022,820 November 17, 2010 , Union Bank 2002 Lease Revenue Bonds US Bank 22,836,765 June 26, 2012 2004 Lease Revenue Bonds US Bank 3,761,864 November 18, 2011 2005 Lease Revenue Bonds Bank of New York 2,735,000 June 26, 2012 ' Subsequent to year end, the Letters of Credit with Allied Irish Bank were replaced with the following: ' Wells Fargo Bank: 1988 Lease Revenue Bonds Bank of New York $ 4,236,768 December 3, 2013 , 1999 Tax Allocation Bonds US Bank 3,863,716 October 13, 2013 (14) Pledged Revenue The City and its component units have debt issuances outstanding that are collateralized by the pledging of certain revenues. The amount and term of the remainder of these commitments are indicated in the debt service to maturity tables presented in the accompanying notes. The purposes for which the proceeds of the related debt issuances were utilized are disclosed in the debt descriptions in the accompanying notes. For the current year, debt service payments as a percentage of the pledged gross revenue (or net of certain expenses where so required by the debt agreement) are indicated in the table below. These percentages also approximate the relationship of debt service to pledged revenue for the remainder of the term of the commitment: Annual Debt Service Payments Debt Service as a Description of Annual Amount (of all debt secured Percentage of Pledged Revenue of Revenue by this revenue) Pledged Revenue Special tax Special assessment district $ 3,827,593 3,704,231 96.8% Tax increment — Merged Project Area 13,484,562 4,315,340 32.0% . Tax increment - Low and Moderate Income Housing 3,912,858 1,270,581 32.5% ' 58 CITY OF WEST COVINA u r �I F I 1 1 Notes to the Basic Financial Statements (Continued) (15) Claims and Jud ents 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. 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 $27 million, per occurrence. The City of West Covina purchases statutory limits through 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. ' Claims for general liability and worker's compensation did not exceed the self insurance retention level during the last three 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, 2010, claims and judgments payable, including estimated claims for incurred but not reported claims, amounted to $11,586,006. Changes in the claims and judgments payable amounts in fiscal years 2009 and 2010 for the Self Insurance Fund are as follows: Current Year Beginning of Claims and Fiscal Year Changes in Claim Balance at Liability Estimates Payments Fiscal Year End 2008-09 $7,367,204 2,751,581 (1,212,883) 8,905,902 2009-10 8,905,902 3,408,727 (728,623) 11,586,006 59 CITY OF WEST COVINA Notes to the Basic Financial Statements (Continued) (16) Cgpital Leases Obligations The following represents governmental activity obligation under capital leases: Public Safety Emergency Radio System In June 2008, the City entered into a lease agreement for the acquisition of a public safety emergency radio system. 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 .police radio acquired under this lease agreement is. recorded at their acquisition cost of $3,050,000. The City obtained financing in the amount of $3,050,000 with an interest rate of 3.92% and semi-annual payments of $251,227 through the end of the lease (June 2015). The outstanding balance at June 30, 2010 is $2,261,401. The calculation of the present value of the future lease payments for obligations under capital leases as of June 30, 2010 is as follows: Year Ending 2008 June 30 Police Radio 2011 $ 502,455 2012 502,454 2013 502,455 2014 502,454 2015 502,455 Subtotal 2,512,273 Less amount representing interest (250,872) Present value of future lease payments 2,261.401 (17) 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, 2010, the outstanding balance is $13,682. J F G I 1 fl J M ' CITY OF WEST COVINA Notes to the Basic Financial Statements (Continued) (17) Notes Payable, (Continued) 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, 2010, the outstanding balance is $248,000. 1 1 i 1 1 1 1 1 1 1 1 1 1 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, 2010 is $889,466. California Energy Commission Loan On September 5, 2006, the City entered into a note agreement for $1,278,000 to finance for energy efficient purposes the acquisition of equipment and other capital projects. The note accrues interest at 4.5%. Principal and interest payments of $60,295 are due semi- annually through June 22, 2023. The note is payable from the revenues of the General Fund. At June 30, 2010, the outstanding balance is $1,176,886. The annual debt service requirements on all notes as of June 30, 2010 are as follows: Year Ending June 30 2011 2012 2013 2014 2015 2016-2020 2021-2023 Chamber of Commerce Principal Interest $ 13,682 588 Butler Note Principal Interest - 8,358 248,000 4,179 13 682 588 248.000 12.537 61 Valencia Note Principal Interest 52,588 37,374 54,904 35,058 57,322 32,640 59;847 30,115 62,483 27,479 356,200 935610 246,122 16,266 8 466 272,542 California Energy Commission Loan Principal Interest 68,388 52,203 71,367 49,223 74,747 .45,843 78,148 42,442 81,705 38,885 467,635 135,314 334,896 26,873 11 17� 0 7 3 CITY OF WEST COVINA Notes to the Basic Financial Statements (Continued) ' (18) Developer Agreement Payable u Outstanding at June 30, 2010 ' On June 26, 1989 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 $41,612,844. The City has made payments to the developer totaling $14,833,975. 26,778,869 , (19) 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, 2010 is $9,626,620. (20) Accumulated Fund Deficits The following funds reported deficits in fund balances/net assets as of June 30, 2010: Deficit Balance Debt Service Funds: CDC Debt Service Fund $ 10,556,457 Special Revenue Funds: Recreation Programs 66,269 Transportation Development Act 25,210 , CDBG 57,546 Inmate Welfare 107 i Enterprise -Funds: Computer Services 1,086;537 , Internal Service Funds: Self -Insurance 4,366,797 Management's explanations for the resolution of significant accumulated fund deficits are summarized as follows: CDC Debt Service Fund:. , The deficit fund balance of $10,556,457 is a result of recording $23,653,879 of advances from the General Fund and CDC Capital Projects 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 2025 from the future tax increment revenues. 62 ' ' CITY OF WEST COVINA ' Notes to the Basic Financial Statements (Continued) ' 20 Accumulated Fund Deficits Continued ' Computer Services Enterprise Fund: The deficit in fund balance of $1,086,537 is a result of increased costs related to the development of new software for client cities. It is anticipated that the deficit fund balance will be eliminated in future years through a combination of increases in license fees and reductions in operating expenses. fSelf Insurance Internal Service Fund: The deficit in fund balance of $4,366,797 is the result of a $2.7 million actuarial ' adjustment to future claims and judgments payable and a $1.5 million transfer to the General Fund for operating purposes. It is anticipated that this deficit fund balance will be funded with increased charges to the operating funds of the City in future years. ' (21) Expenditures in Excess of Appropriations Expenditures for the year ended June 30, , 2010 exceeded the appropriations of the following funds: Budget Actual Variance Special Revenue Funds Inmate Welfare Fund $ 13,356 15,238 (1,882) Measure R Fund 162,537 (162,537) Integrated Waste Management Fund 67,873 68,403 (530) ,(22) Defined Benefit Pension Plans (A) California Public Employee Retirement System (PERS) 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, 2009 to June 30, 2010 has been determined by an actuarial valuation of the plan as of ' 63 CITY OF WEST COVINA . [I Notes to the Basic Financial Statements (Continued) (22) Defined Benefit Pension Plan, (Continued) June 30, 2007. The contribution rate indicated for the period is 27.246% of payroll for the safety plan and 9.131 % of payroll for the miscellaneous plan. In order to calculate the dollar value of the ARC for inclusion in financial statements prepared as of June 30, 2010, the contribution rate is multiplied by the payroll of covered employees that were paid during the period from July 1, 2009 to June 30, 2010. 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 Safety June 30, 2007 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, 2007 Entry Age Actuarial Cost Method Level Percent of Payroll 31 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, 2039. For the miscellaneous plan, over a period ending June 30, 2038. f 1 �l f 1 1 liability is amortized over a period ending the unfunded actuarial liability is amortized ' 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. The schedule of funding progress, presented below presents multiyear trend information about whether the actuarial value of plan assets is increasing or decreasing over time relative to the actuarial accrued liability for benefits. J 64 CITY OF WEST COVINA ' Notes to the Basic Financial Statements (Continued) (22) Defined Benefit Pension Plan, (Continued) Required Supplementary Information — Safety (dollar amount in thousands) Entry Age Unfunded Normal Actuarial Liability/ Annual UAAL Valuation Accrued Value (Excess Funded Covered As a % of Date Liability of Assets Assets) Status Pam Payroll 6/30/07 $ 218,973 186,780 32,193 85.3% 18,185 177.0% 6/30/08 233,093 197,914 35,179 84.9% 19,632 179.2% 6/30/09 255,522 204,352 51,170 80.0% 20,372 251.2% ' Required Supplementary Information — Miscellaneous (dollar amount in thousands) Entry Age Unfunded Normal Actuarial Liability/ Annual UAAL Valuation Accrued Value (Excess Funded Covered As a % of Date Liability of Assets Assets) Status Payroll Payroll 6/30/07 $ 92,669 90,614 2,055 97.8% 13,696 15.0% 6/30/08 99,307 96,052 3,255 96.7% 13,833 23.5% ' 6/30/09 111,022 99,657 11,365 89.8% 13,834 82.2% Three -Year Trend Information Annual Pension Cost (Employer Contribution) Fiscal Percentage of Net Pension Year Safety Miscellaneous APC Contributed Obligation 6/30/08 $ 5,087,870 1,399,867 100% - 6/30/09 4,182,392 1,083,821 100% ' 6/30/10 5,253,816 1,219,614 100% ' (B) Public Agency Retirement System (PARS) Effective November 1, 2007, the Cityestablished two retirement plans with the Public Agency Retirement System (PARS) to supplement the current Ca1PERS retirement benefits. PARS is a single -employer defined benefit plan.' It meets the requirements of a pension trust under the California Government Code. Phase II Systems is the PARS Trust Administrator. ' EPMC Replacement Supplemental Retirement Plan Participants in this plan include all full-time employees and council members, except members of the Police Officers Association. The EPMC Replacement Plan was established to replace a long-standing benefit for city employees no longer allowed by Ca1PERS. The plan provides for a benefit in an amount equal to the member's years of service, times the member's final pay, times the Ca1PERS age factor, times .70% for 65 CITY OF WEST COVINA Notes to the Basic Financial Statements , (Continued) 22 Defined Benefit Pension Plan Continued miscellaneous employees (times .89% for safety employees). At the time of retirement, employees will make an election to receive either a lump sum payment or receive ongoing stipends over their lifetime. The City makes all contributions to these plans. Participants do not make any contributions. For the fiscal year ended June 30, 2010, the City's required contributions were $108,21.8 and,actual contributions were $187,218. The required contribution was ' based on the October 1, 2007 actuarial valuation using the entry age normal actuarial cost method. The unfunded actuarial liability is based on a 20-year open amortization with amortization payments increasing 3.25% annually. The actuarial assumptions include: investment rate of return of 7%, projected salary increases of 3.25% to 12.65% 1 (depending on years of service), and assumed inflation rate of 3%. The ongoing stipends will contain a 2% annual cost of living adjustment consistent with Ca1PERS pensions. Supplemental Retirement Plan for Executive Staff and City Council This plan is separated into three tiers. Tier 1 (full-time non -safety Department Head, excluding the City Manager) and Tier 2 (City Council) provides an additional retirement amount to miscellaneous department heads and City'Council in an amount equal to the amount of the Retiree Medical Benefit received by the Police and Fire Chiefs. In order to be eligible for this benefit, participants must have five years of service with the City and must retire into PERS from the City. Tier 3 (City Manager) provides an increased retirement benefit to the City Manager ' consistent with the terms of his contract. It will convert the retirement formula for all years of prior Ca1PERS service.at non -West Covina agencies to the CalPERS 2.5% @ 55 formula currently in place with the City of West Covina. All three tiers are combined for funding purposes in this plan. The City makes all contributions to these plans. Participants do not make any contributions. For the fiscal , year ended June 30, 2010, the City's required and actual contributions were $167,382. The required contribution was based on the November 1, 2007 actuarial valuation using the entry age normal actuarial cost method. The unfunded actuarial liability is based on a , 20-year open amortization (I0-yearsfor Tier 3) with amortization payments remaining level. The actuarial assumptions include: investment rate of return of 7%, assumed inflation rate of 3%, projected salary increases of 3.25% to 12.65% (depending on years ' of service and 2% annual cost of living adjustments for Tier 3. 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. The schedule of funding progress, presented below presents multiyear, trend information about whether the actuarial value of plan assets is increasing or decreasing over time relative to the actuarial accrued liability for benefits. 66 ' CITY OF WEST COVINA Notes to the Basic Financial Statements (Continued) (22) Defined Benefit Pension Plan, (Continued) ' Required Supplementary Information — EPMC Entry Age Unfunded ' Normal Actuarial Liability/ Annual UAAL Valuation Accrued Value (Excess Funded Covered As a % of Date Liability of Assets Assets) Status PaAoll Payroll 10/1/07 $ 1,359,333 - 1,359,333 0.00% 31,852,549 4.27% ' 6/30/09 1,028,173 27,130 1,001,043 2.64% 23,766,042 4.21% t Required Supplementary Information — Executive Entry Age e Unfunded Normal Actuarial Liability/ Annual UAAL Valuation . Accrued Value (Excess Funded Covered As a % of Date Liability of Assets Assets) Status Pay oll Payroll ll/l/07 $ 852,615 - 852,615 0.00% 1,972,119 43.23% ' 6/30/09 3,083,890 279,847 2,804,043 9.07% 1,665,591 168.35% Three -Year Trend Information — EPMC Annual Pension Cost (Employer Contribution) Fiscal Percentage of Net Pension tYear EPMC Executive APC Contributed Obligation 6/30/08 $ 148,659 146,569 100% - 6/30/09 95,989 168,074 100% 6/30/10 187,218 167,382 100% (23) Other Post -Employment Benefits Other than Pensions Plan Descriptions: ' Medical The City administers a single -employer defined benefit plan which provides healthcare benefits to eligible retirees and their dependents in accordance with various labor ' agreements. City paid amounts are capped at varying amounts depending on employee's bargaining unit, as follows: ' • Police — Effective July 1, 2008, the Kaiser Employee + 1 Other Southern California Counties Rate ($909.98 per month in 2010). • Fire — Effective January 1, 2010, the Kaiser Employee + I Los Angeles Area t Region Rate ($826.34 per month in 2010). • Miscellaneous — At the PEMHCA minimum amount ($101.00 and $105.00 ' per month in 2009 and 2010 respectively). ' 67 �J CITY OF WEST COVINA _ Notes to the Basic Financial Statements ' (Continued) (23) Other Post -Employment Benefits Other than Pensions, (Continued) Life Insurance ' Eligible retirees,. in accordance with various labor agreements, receive life insurance benefits. from the City as follows:.. ' $500 Confidential/Exempt, General, Maintenance- and Non -Sworn Safety, ' bargaining units $10,000 Executive Management, Mid -Management, Police Management (retired after 9/1'/2005), Fire Management and Fire bargaining units $10,500 Police bargaining unit City's Funding Policy: The contribution requirements of plan members and the City are established and may be amended by City Council. The contribution required to be made r under City Council and bargaining unit requirements is based on a pay-as-you-go basis (i.e., as medical insurance premiums become due). For fiscal year ended June 30, 2010, the City contributed $1,114,523 to the plan, including $1;111,467 for current premiums (100% of total premiums). Annual OPEB Cost and Net OPEB Obligation: The City's annual other postemployment ' benefit (OPEB) cost, (expense) is calculated' based on the annual required contribution of the employer (ARC), an amount actuarially determined in accordance with the parameters of GASB Statement No. 45. The ARC represents a level of funding that, if paid on an ongoing basis, is projected to cover normal cost each year and amortize, any unfunded actuarial , liabilities (or funding excess) over a period not to exceed thirty years. The following table shows the components .of the City's annual OPEB cost for the year, the amount actually contributed to the plan, and changes in the City's net OPEB obligation for these benefits: Annual required contribution $ 3,317,000 Interest on net OPEB obligation - Adjustment to annual required contribution - .Annual OPEB cost (expense) 3,317,000 Contributions made (including premiums paid) (1,114,523) t Increase in net OPEB obligation 2,202,477 Net OPEB obligation —beginning of year 1,390,000 Net OPEB obligation —end of year 3.592.477 The City's annual OPEB cost, the percentage of annual OPEB cost contributed to the plan, and the net OPEB obligation for 2010 and the two preceding years were as follows: Percentage of Fiscal Annual OPEB Cost Net OPEB Year OPEB Cost Contributed Obli ag tion ' 6/30/08 N/A N/A, N/A 6/30/09 $ 2,437,000 43.0% $ 1,390,000 6/30/10 3,317,0.00 33.66/, 3,592,477 , 68 CITY OF WEST COVINA 0 I Notes to the Basic Financial Statements (Continued) (23) Other Post -Employment Benefits Other than Pensions, (Continued) Funded Status and Funding Progress: Actuarial valuations of an ongoing plan involve estimates of the value of reported amounts and assumptions about the probability of occurrence of events far into the future. Examples include assumptions about future employment; mortality, and the healthcare cost trend. Amounts determined regarding the funded status of the plan and the annual required contributions of the employer are subject to continual revision as actual results are compared with past expectations and new estimates are made about the future. The schedule of funding progress presents multi -year trend information about whether the actuarial value of plan assets is increasing or decreasing over time relative to the actuarial accrued liabilities for the benefits. Schedule of Funding Progress (dollar amounts in thousands) Actuarial Accrued UAAL as a Actuarial Liability Unfunded Percentage Actuarial Value of (AAL) — AAL Funded of covered Valuation Assets Entry Age (UAAL) ration Covered payroll Date Lal b� b-a Cq Lbj P_ ayroll -a /c 7/l/09 $0 $45,391 $45,391 0% $30,254 150.0% Actuarial Methods and Assumptions Projections of benefits for financial reporting purposes are based on the substantive plan (the plan as understood by the employer and the plan members) and include the types of benefits provided at the time of each valuation and the historical pattern of sharing of benefit costs between employer and plan members to that point. The actuarial methods and assumptions used include techniques that are designed to reduce the effects of short-term volatility in actuarial accrued liabilities and the actuarial assets, consistent with the long-term perspective of the calculations. The actuarial cost method used for determining the benefit obligations is the Entry Age Normal Cost Method. The actuarial assumptions included a 5.0 percent investment rate of return, which is the assumed rate of the expected long-term investment returns on plan assets calculated based on the funded level of the plan at the valuation date, and an annual healthcare cost trend rate of 10 percent initially, reduced by decrements of 1 % per year to an ultimate rate of 5 percent after the sixth year. Both rates included an inflation assumption. The UAAL is being amortized as a level percentage of projected payroll on an open basis over 30 years. It is assumed the City's payroll will increase 3% per year. (24) 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 West Covina Community Development Commission) 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 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 mes CITY OF WEST COVINA Notes to the Basic Financial Statements (Continued) (24) Other Commitments, (Continued) 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 West Covina Community Development Commission (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 Agency. 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. 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. (25) Transfers In/Transfers Out The following schedule summarizes the City's transfer activity: Transfers In Transfers Out Amount General Fund Non -Major Governmental Funds $ 1,275,000 (a) Internal Service Funds 1,750,000 (b) Computer Services Enterprise Fund 93,140 City Debt Service Fund CDC Debt Service Fund 755,660 Non -Major Governmental Funds 175,000 City Capital Projects Fund CDC Capital Projects Fund Non -Major Governmental Funds Total Transfers Non -Major Governmental Funds CDC Debt Service Fund General Fund Non -Major Governmental Funds 68,381 6,712,857 -(c) 141,114 52,000 11,023,152 (a) The Traffic Safety Fund and the Public Safety Augmentation Fund transferred $800,000 and $475,000 respectively, to the General Fund to reimburse the General Fund for traffic and public safety related activities. (b) The Self -Insurance Internal Service Fund and Vehicle Replacement Internal Service Fund transferred $1,500,000 and $250,000 respectively, to the General Fund to return capital contributed in prior years. I I 70 ' CITY OF WEST COVINA Notes to the Basic Financial Statements (Continued) (25) Transfers In/Transfers Out, (Continued) (c) The CDC Debt Service Fund transferred $3,912,857 to the CDC Capital Projects Fund. This transfer represents 20% of property tax increment received by the Community Development Commission during the year that is restricted for low and moderate income housing projects. ' The CDC Debt Service Fund also transferred $2,800,000 to the CDC Capital Projects Fund. The transfer was made to provide funding for repayment of advances made by the General Fund to the CDC Capital Projects Fund. (26,) Subsequent Events Tax Revenue Anticipation Notes On July 1, 2010, the City issued $10,000,000 of Tax and Revenue Anticipation Notes (TRAN) at an interest rate of 2.0% for the purpose of funding interim cash flow ' requirements in the General Fund. The TRAN plus accrued interest is due May 31, 2011. West Covina Senior Villas II. L.P. In concurrence with the Community Development Commission's May 2009 agreement with West Covina Senior Villas, II L.P., for the construction and maintenance of a 65- unit apartment complex to be rented to low income and very low income senior citizens, the City provided the remaining $4,635,048 of the $8,600,000 loan subsequent to June 30, 2010. (27) Prior Period Adjustment The accompanying financial statements reflect an adjustment to value the capitalization and related accumulated depreciation of the Lake Public Parking structure that was ' constructed with funds issued as part of the 1988 Lease Revenue Refunding Bonds. The following schedule summarizes the effect of the prior period adjustment on beginning net assets as of July 1, 2009: Governmental Activities Net assets at the beginning of the year, as previously reported $ 228,959,997 To record the addition of the Lake Public Parking structure and related accumulated depreciation 4,247,813 Net assets at the beginning of the year, as restated S233,207,810 (This page intentionally left blank) 72 SUPPLEMENTARY SCHEDULES 73 U— _'a CITY OF WEST COVINA Combining Balance Sheet - Non -Major Govermnental Funds June 30, 2010 Special Capital Revenue Projects Totals Assets Cash and investments $ 10,664,700 662,132 11,326,832 12,071,528 Receivables, net: Accounts 34,212 - 34,212 269,811 Taxes 1,018,316 - 1,018,316 769,346 Interest 11,803 789 12,592 34,482 Assessments - - - 376 Notes and loans 4,412,688 - 4,412,688 4,694,490 Due from other funds 6,865 - 6,865 - Due from other agencies 2,473,248 150,000 2,623,248 930,376 Prepaid items - - - 1,145 Total assets $ 18,621,832 812,921 19,434,753 18,771,554 Liabilities and Fund Balance Liabilities: Accounts payable $ 1,211,780 34,797 1,246,577 1,212,467 Other accrued liabilities 480,589 1,619 482,208 428,302 Due to other funds 1,934,551 430 1,934,981 825,633 Deferred revenue 4,554,723 - 4,554,723 5,527,564 Total liabilities 8,181,643 36,846 8,218,489 7,993,966 Fund balance: Reserved for: Encumbrances 121,231 53,460 174,691 489,065 Prepaid items - - - 1,145 Unreserved -designated 10,520,807 722,615 ll,243,512 11,089,807 Unreserved-undesignated (201,939) - (201,939) 802,429 Total fund balance 10,440,189 776,075 11,216,264 10,777,588 Total liabilities and fund balance $ 18,621,832 812,921 19,434,753 18,771,554 74 L l� 11 u �I CITY OF WEST COVINA Combining Statement of Revenues, Expenditures and Changes in Fund Balances - Non -Major Governmental Funds For the year ended June 30, 2010 Revenues: Taxes Special assessments 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 fiend balances Fund balances at beginning of year Fund balances at end of year Special Capital Revenue Projects Funds Funds $ 4,709,105 50,949 4,871,575 - 1,123,359 - 73, 511 6,106 - 22,500 9,822,883 150,000 1,425,391 - 49,324 142,570 9,980 22,217,718 239,535 Totals 2010 2009 4,760,054 4,586,410 4,871,575 4,180,404 1,123,359 1,034,527 79,617 328,711 22,500 9,339 9,972,883 7,340,051 1,425,391 1,486,116 49,324 156,269 152,550 .183,008 22,457,253 19,304,835 5,971 68,483 74,454 797,489 23,752 821,241 14,952,257 62,598 15,014,855 4,358,850 207,690 4,566,540 164,220 - 164,220 20,278,787 362,523 20,641,310 39,990 1,021,698 12,650,595 5,814,982 264,863 19,792,128 1,038,931 (122,988) 1,815,943 (487,293) 193,114 - 193,114 1,851,902 (1,395,381) (175,000) (1,570,381) 2,215,761 (1,202,267) (175,000) (1,377,267) (363,859) 736,664 (297,988) 438,676 (851,152) 9,703,525 1,074,063 10,777,588 11,628,740 $ 10,440,189 776,075 11,2165'264 10,777,588 7S NON -MAJOR SPECIAL REVENUE FUNDS Special Revenue Funds are used to account for specific revenues that are legally restricted to ' 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. , 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 and Proposition 1 B monies which are used for street ' construction and maintenance. I 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. , AB939 Fund — This fund accounts for programs to reduce solid waste deposits in local landfills, pursuant to AB939. Grants Fund — This fund accounts for various Federal, 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. 76 11 1 NON -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. Public Safe � Fund — This fund accounts for sales tax revenue legally restricted for public safety. Revenue is used to augment police operations. COPS 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 F� — This fund accounts for fire training programs. Measure R Fund — This fund accounts for sales tax revenues collected in Los Angeles County to provide transportation related projects and programs: Integrated Waste Management Fund — This fund accounts for landfill local enforcement agency activities and waste management programs, other than AB939. WC Community Services Foundation Fund — This fund account for activity of the West Covina Community Services Foundation, a 501(c)(3) non-profit organization. 77 Assets Cash and investments Receivables, net - Accounts Taxes Interest. Assessments Notes and loans Due from other funds Due from other agencies 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 Prepaid items Unreserved: Designated for: Special purposes Undesignated Total fund balances (deficits) Total liabilities and ' fund balances CITY OF WEST COVINA Non -Major Special Revenue Funds ' Combining Balance Sheet , June 30, 2010. Drug Business Recreation Rebate Improvement Air Quality Proposition Proposition Programs Enforcement Tax Improvement A C $ 24,710 5841925 32,884 70,924 164,182 2,299,594 26,890 - - - - - 678 39 62 - 4 2,642 ' 34,254 - - - $ - 51,600 585;603 32,923 105,240 164,186 2,302,236 $ 35,282 3,424 - 75 28,897 40,793 43,731 2,890 - 1,029 2,434 12,553 38,856 - - - - - 111,869. 6,314 1,104 31,331 53,346 , _ - 1,575 10,155 - 569,134 32,923 104,136 132,855 2,248,890 _ 67,844 (66,269) 579,289 32,923 104,136 132,855 2,248,890 $ 51,600 585,603 32,923 105,240 164,186 2,302,236 78 ' State Traffic Police Transportation Traffic Gas Congestion Special Development ' Safety _ Tax Relief Programs Act AB939 Grants CDBG Tree 509,470 176,855 424,720. 31,703 - 279,614 510,203 - .27 1 - 594 - - - - - - - 43,270 166,944 282,712 - - 41,461 - - - 578 259 358 37 = 329 145 = = - - - - - - - 4,412,688 - ' - - - 26,998 1,735,864 - - 676,132 - _553,318 344,652 707,790 31,740 26,998 321,404 _ 2,246,212 5,088,820 27 16,956 27,146 222,170 1,035 25,209 9,532 194,344 304,971 - ' 4,800 25,593 88,602 - - 2,963 235,439 9,557 - 26,999 1,335,159 419,149 - - - - - 142,034 4,412,689 - ' 21,756 52,739 310,772 1,035 52,208 12,495 1,906,976 5,146,366 - 1 12,997 3 605 12,468 - 37,527 - _ 1�,705 _ 518,565 288,308 384,550 30,705 - 308,909 339,236 - 27 ' - - - -(62,737 - - (71,251) - 531,562 291,913 397,018 30,705 (25,210) 308,909 339,236 (57,546) 27 _ 553,318 _ 344,652 707,790 31,740 26,998 321,404 2,246,212 5,088,820 27 r(Continued) 79. I CITY OF WEST COVINA Non -Major Special Revenue Funds Combining Balance Sheet" (Continued) Art in Inmate Public COPS Special Charter Public Welfare Safety Grant Assessments Cable Places Assets Cash and investments $ 2,882 - 162,386 3,872,158 443,782" 57,562 Receivables, net: Accounts Taxes - 93,154 48,272 239,351 - - Interest 2 - 223 4,729 521 45 Assessments - - - _ _ _ Notes and loans - - _ _ Due from other funds - - - 6,865 - - Due from other agencies Prepaid items Total assets $ 2,884 93,154 210,881 4,123,103 444,303 57,607 Liabilities and Fund Balances Liabilities: Accounts payable. $ - - 4,056 267J66 5,603 - Other accrued liabilities: 2,991 - - 47,220 66 247 Due to other funds - -37,210 - 61,123 - - Deferred revenue Total liabilities 2,991. 37,210 4,056 375,509 5,669. 247 Fund balances (deficit): Reserved for: Encumbrances - - 14,200 9,851 5,148 - Prepaid items - - _ _ _ _ Unreserved: Designated for: Special purposes - 55,944 192,625 3,737,743 433,486 57,360 Undesignated (107) Total fund balances (deficits) (107) 55,94.4 206,825 3,747,594 438,634 57,360 Total liabilities and fund balances $ 2,884 93,154 210,881 4,123,103 444,303 57,607 80 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 North Integrated WC Community Azusa Fire Waste Services Totals Relinquishment Training Measure R Management Foundation 2010 2009 410,817 75,478 490,822 - 39,002 10,664,700 10,950,210 - - - - 6,728 34,212 269,811 - - 85,860 17,292 - 1,018,316 769,346 482 - 623 - 47 11,803 31,331 - - - - - - 376 - - - - - 4,412,688 4,694,490 - - - - - 6,865 - - - - - - 2,473,248 930,376 - - - - - - 1,145 411,299 75,478 577,305 17,292 45,777 _ 18,621,832 17,647,085 411,299 1,500 22,896 - - 474 16,055 1,500 22,896 16,529 73,978 725 1,211,780 1,181,683 - 480,589 408,680 - 1,934,551 825,633 - 4,554,723 5,527,564 725 8,181,643 7,943,560 121,231 404,411 - 1,145 554,409 763 45,052 10,520,897 10,100,398 - - _ - 201,939 (802,429) 411,299 73,978 554,409 763 45,052 10,440,189 9,703,525 411,299 75,478 577,305 17,292 45,777 18,621,832 17,647,085 81 CITY OF WEST COVINA Non -Major Special Revenue Funds Combining Statement of Revenues, Expenditures and Changes in Fund Balances Revenues: Taxes Special assessments Fines and forfeitures Investment income Rental income Revenue from other agencies Charges for services Repayment of notes and loans Otherrevenues 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 (deficits) at beginning of year Fund balances (deficits) at end of year For the year ended June 30, 2010 Drug Business Recreation Rebate Improvement Air Quality Proposition Proposition Programs Enforcement Tax Improvement A C 12 3,370 336,314 1,076,694 - 163 - 1,076,869 339,684 1,433,415 1,189,080 237 365 6 18,573 162,771 158,885 - - 42 - 237 163,136 1,592,348 1,207,653 168,101 - - - _ - - - 196,750 - 727,225 1,183,567 - 1,133 - 1,461,136 923,872 116,604' 1,183,567 168.101 1,133 196,750 1,461,136 1,767,701 (106,698) 171,583 (896) (33,614) 131,212 (560,048) 60,000 60,000 - - _ _ (46,698) 171,583 (896) (33,614) 131,212 (560,048) (19,571) 407,706 33,819 137,750 1,643 2,808,938 $ 66,269 579,289 32,923 _ 104,136 132,855 2,248,890 82 1 State Traffic Police Transportation Traffic Gas Congestion Special Development Safety Tax _ Relief Programs Act AB939 Grants CDBG i1,123,359 3,050 7,959 876 195 77 1,781 3,421 - ' - 1,811,430 1,019,293 - 26,998 - 4,396,202 1,718,856 - 17,130 - - - 180,493 50,588 - - - - - 49,324 ' - -- - 9,800 1,126,409 1,836,519 1,020,169 9,995 27,075 182,274 4,450,211 1,768,180 - - - - - - - 369 - - - 7,570 - - 423,808 34,070 204,760 3,156,450 852,882 91,848 118,110 3,075,393 972,372 - - - - - - 245,542 508,688 6,616 - 204,760 3,156,450 852,882 7,570 91,848 118,110 3,751,359 1,515,499 921,649 1,319,931 167,287 2,425 (64,773) 64,164 698,852 252,681 ' - 50,000 2,000 - 54,216 (800,000 ) - - - ' 800,000 _ 50,000 - 2,000 - - 54,216 - 121,649 (1,269,931) 167,287 4,425 (64,773) 64,164 753,068 252,681 t409,913 1,561,844 229,731 26,280 39,563 244,745 (413,832 (310,227 ' 531,562 291,913 397,018 30,705 (25,210) 308,909 339,236 57,546 (Continued) , 83 CITY OF WEST COVINA Non -Major Special Revenue Funds Combining Statement of Revenues, Expenditures and Changes in Fund Balances (Continued) Revenues: Taxes Special assessments 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 Inmate Public COPS Special Charter Tree Welfare Safety Grant Assessments Cable - - 530,944 - 840,224 - - - - 4,871,575 - 6 - 1,320 24,074 3,206 - - - 140,724 - - - - 29,778 - 15,220 - - - - 15,226 530,944 142,044 5,765,651 3,206 5,602 15,238 - 120,480 - 24,858 - - - 5,322,027 - - 3,158 32,676 - 15,238 - 120,480 5,354,703 ' 33,618 (12) 530,944 21,564 410,948 30,412 - - - 26,898 - - 475,000 - (50,000) - - (475,000) - (23,102) - (12) 55,944 21,564 387,846 (30,412) 27 (95) - 185,261 3,359,748 469,046 27 107 55,944 206,825 3,747,594 438,634 r 84 1 Art in North Integrated WC Community Public Azusa Fire Waste Services Totals Places Relinquishment Training Measure R Management _Foundation 2010 2009 - - - 715,442 - 4,709,105 4,435,117 - - - - - - 4,871,575 4,180,404 ' 1,123,359 1,034,527 242 2,880 - 1,504 - 357 73,511 292,549 - - . 9,339 ' - 51,410 - - - 9,822,883 7,340,051 - - - - 69,166 1,500 1,425,391 1,486,116 - - - - - - 49,324 156,269 1 28,292 - - - - 89,095 142,570 147,058 28,534 2,880 51,410 716,946 69,166 90,952 22,217,718 19,081,430 i - - - - - - 5,971 27,463 - 3,364 - - - 797,489 1,019,296 3,500 162,537 68,403 - 14,952,257 12,539,677 - - - - 31,754 4,358,850 5,475,176 -8,324 - - - - - 164,220 264,863 8,324 3,500 3,364 162,537 68,403 31,754 20,278,787 19,326,475 ' 20,210 (620) 48,046 554,409 763 59,198 1,938,931 _ (245,045) 193,114 1,675,672 (70,381) (1,395,381) (1,928,661) ___ _ -- - - - (70,381) (1,202,267) (252,989) 2.0,210 (620) 48,046 554,409 763 (11,183) 736,664 (498,034) 37,150 411,919 25,932 - - 56,235 9,703,525 10,201,559 57,360 411,299 73,978 554,409 763 45,052 10.4,10,189 9,703,525 85 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, 2010 Variance Prior Final Positive Year Budget Actual (Negative) Actual Revenues: Investment income $ - 12 12 1,347 Rental income - - - 9,339 Charges for services 1,260,030 1,076,694 (183,336) 1,136,139 Other revenues - 163 163 220 Total revenues '1,260,030 1,076,869 (183,161) 1,147,045 Expenditures: Current: Community services 1,364,695 1,183,567 181,128 1,282,654 Total expenditures 1,364,695 1,183,567 181,128 1,282,654 Excess (deficiency) of revenues over (under) expenditures 104,665) (106,698) (2,033) (135,609) Other financing sources (uses): Transfers in 60,000 60,000 - 60,000 Total other financing sources (uses) 60,000 60,000 - 60,000 _ Net change'in fund balances (44,665) (46,698) (2,033) (75,609) Fund balances (deficits) at beginning of year (19,571) (19,571 - 56,038 Fund balances (deficits) at end of year $ (64,236) (66,269) (2,033) (19,571) 1 1 1 1 1 1 1 1 1 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, 2010 Variance Prior Final Positive Year Budget Actual egative Actual Revenues: Investment income $ - 3,370 3,370 7,019 Revenue from other agencies 14,000 336,314 322,314 _ 498,579 Total revenues _ 14,000 339,684 325,684 505,598 Expenditures: Current: Public safety 667,682 168,101 499,581 140,641 Total expenditures 667,682 168,101 499,581 140,641 Net change in fund balances (653,682) 171,583 825,265 364,957 Fund balances at beginning of year 407,706 407,706 - 42,749 Fund balances (deficits) at end of year $ (245,976) 579,289 825,265 407,706 87 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, 2010 Revenues: Investment income 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 $ - 237 237 981 237 237 981 13,000 1,133 11,867 7,175 13,000 1,133 11,867 7,175 (13,000) (896) 12,104 (6,194) 33,819 33,819 - 40,013 $ 20,819 32,923 12,104 33,819 88 1 1 1 1 1 1 i 1 1 1 1 1 1 1 1 i 1 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, 2010 Revenues: Investment income Revenue from other agencies Total revenues Expenditures: Current: Public works 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 $ - 365 365 2,396 130,000 162,771 32,771 131,696 130,000 163,136 33,136 134,092 213,368 196,750 16,618 104,788 4 213,368 196,750 16,618 .104,792 (83,368) (33,614) 49,754 .29,300 137,750' 137,750 - 108,450 $ 54,382 104,136 49,754 137,750 89 CITY OF WEST COVINA Proposition A Fund Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual Revenues: Taxes Investment income Revenue from other agencies Charges for services Total revenues Expenditures: Current: Public works Community services Total expenditures Net change in. fund balances Fund balances at beginning of year Fund balances at end of year For the year ended June 30, 2010 Variance Prior Final Positive Year Budget _ Actual (Negative) Actual $ . 1,592,308 1,433,415 . (158,893) 1,629,259 6 6 25,024 175,000 158,885 (16,115) 157,802 3,500 42 (3,45$) 3,851 1,770,808 1,592,348 (178,460) 1,815,936 15,512 - 15,512 356,395 1,721,061 1,461,136 259,925 2,755,788 1,736,573 1,461,136 275,437 3,112,183 34,235 131,212 96,977 (1,296,247) " 1,643 1,643 - 1,297;890 $ 35,878 132,855 96,977 1,643 90 1 1 1 i 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 Revenues: Taxes Investment income Total revenues Expenditures: Current: Public works Community services Community development Total expenditures Net change in fund balances Fund balances at begiinning of year Fund balances at end of year For the year ended June 30, 2010 Variance Prior Final Positive Year Budget. _ Actual (Negative) _Actual $ 1,321,122 1,189,080 (132,042) 1,356,369 - 18,573 18,573 1 72,391 1,321,122 1,207,653 (113,469) 1,428,760 2,856,729 727,225 2,129,504 462,513 1,100,483. 923,872 176,611 569,266 137,107 116,604 20,503 145,570 4,094,319 1,767,701 2,326,618 1,177,349 (2,773,197) (560,048) 2,213,149 251,411 2,808,938 2,808,938 - 2,557,527 $ 35,741 2,248,890 2,213,149 2,808,938 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, 2010 Revenues: Fines and forfeitures Investment income Total revenues Variance Prior Final Positive Year Budget Actual (Negative) Actual $ 1,050,000 1,123,359. 73,359 1,034.527 - 3,050 3,050. 6,813 1,050,000 1,126,409 76,409 1;041,340 Expenditures: Current: Public works 297,332 204,760. 92,572 210,366 Total expenditures 297,332 204;-760 92,572 210,366 Excess (deficiency) of revenues over (under) expenditures. 752,668 921,649 168,981 830,974 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 (700,000) (800,000) (100,000) (700,000) (700,000) (800,000) (100,000) (700,000) 52,668 121,649 68,981 1.30,974 409,913 409,913 - 278,939 $ 462,581 531,562 68,981 409,913 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 Revenues: Investment income Revenue from other agencies Charges for services Otherrevenues 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 For the year ended June 30, 2010 Variance Prior Final Positive Year Budget Actual (Negative) Actual $ - 7,959 7,959 19,783 1,750,000 1,811,430 61,430 3,458,250 - 17,130 17,130 11,064 - - 2,699 1,750,000 1,836,519 86,519 3,491,796 3,299,213 3,156,450 142,763 3,436,807 3,299,213 3,156,450 142,763 3,436,807 (1,549,21.3) (1,319,931) 229,282 54,989 50,000 50,000 - 104,135 50,000 50,000 - 104,135 (1,499,213) (1,269,931) 229,282 159,124 1,561,844 1,561,844 - 1,402,720 $ 62,631 291,913 229,282 1,561,844 ON 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, 2010 Revenues: Investment income Revenue from other agencies 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 Variance Prior Final Positive Year Budget Actual (Negative) Actual $ - 876 876 5,640 850,000 1,019,293 169,293 953,255 850.000 1,020,169 170,169 958;895 881,589 852,882 28,707 745,176 881,589 852,882 28,707 745,176 (31,589) 167,287 198,876 213,719 229,731 229,731 - 16,012 $ 198,142 397,018 198,876 229,731 94 CITY OF WEST COVINA Police Special Programs Fund Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual Revenues: Investment income Other revenues Total revenues Expenditures: Current: Public safety 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 For the year ended June 30, 2010 Variance Prior Final Positive Year Budget Actual (Negative) Actual $ - 195 195 743 6,300 9,800 3,500 17,257 6,300 9,995 3,695 18,000 21,783 7,570 14,213 13,871 21,783 7,570 14,213 13,871 (15,483) 2,425 17,908 4,129 2,000 2,000 - - 2,000 2,000 - - (13,483) 4,425 17,908 4,129 26,280 26,280 - 22,151 $ 12,797 30,705 17,908 26,280 ME 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, 2010 Revenues: Investment income Revenue from other agencies Total revenues. Expenditures: Current: Public works Total expenditures Net change in fund balances Fund balances at beginning of year Fund balances (deficits) at end of year Variance Prior Final Positive Year Budget Actual (Negative) Actual $ - 77 77 1,784 53,247 26,998 (6,249) - 53,247 27,075 26,172 1,784 140,410 91,848 48,562 48,965 140,410 91,848 48,562 48,965 (87,163) (64,773) 22,390 (47,181) 39,563 39,563 - 86,744 $ (47,600) (25,210) 22,390 39,563 CITY OF WEST COVINA ' AB939 Fund ' Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual ' For the year ended June 30, 2010 Final Variance Positive Prior Year Budget Actual_ (Negative) Actual Revenues: Investment income $ - 1,781 1,781 4,611 Charges for services 174,000 180,493 6,493 176,909 Other revenues - - - 441 ' Total revenues 174,000 182,274 8,274 181,961 Expenditures: Current: Public works 139,328 118,110 21,218 118,630 Community services - . - - 74 Total expenditures 139,328 118,110 21,218 118,704 ' Net change in fund balances 34,672 64,164 29,492 63,257 Fund balances at beginning of year 244,745 24.4,745 _ - 181,488 Fund balances at end of year $ 279,417 308,909 29,492 244,745 97 CITY OF WEST COVINA Grants Fund Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual For the year ended June 30, 2010 Variance Prior Final Positive Year Budget Actual (Negative) Actual Revenues: Investment income $ - 3,421 3,421 33,935 Revenue from other agencies 5,699,750 . 4,396,202 (1,303,548) 1,050,565 Charges for services 59,500 50,588 (8,912) 53,022 Other .revenues - - - 752 Total revenues 5,759,250 4,450,211 (1,309,039) 1,138,274 Expenditures: Current: Public safety 905,736 423,808 481,928 719,191 Public works 4,905,579 3,075,393 1,830,186 73,131 Community services 414,596 245,542 169,054 294,388 Community development 13,258 6,616 6,642 59,462 Total expenditures 6,239,169 3,751,359 2,487,810 1,146,172 Excess (deficiency) of revenues over (under) expenditures (479,919) 698,852 1,178,771 (7,898) Other financing sources (uses): Transfers in 54,216 54,216 - .1,437,477 Transfers out _ - - - (557,909) Total other financing sources (uses) 54,216 54,216 - 879,568 Net change in fund balances (425,703) 753,068 1,178,771 871,670 Fund balances (deficits) at beginningof year (413,832) (413,832) - (1,285,502) Fund balances (deficits) at end of year $ (839,535) 339,236 1,178,771 (413,832) 98 CITY OF WEST COVINA Community Development Block Grant Fund Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual Revenues: Revenue from other agencies Repayment of notes and loans Other revenues Total revenues Expenditures: Current: General government Public safety Public works Community services Community development Total expenditures For the year ended June 30, 2010 Variance Prior Final Positive Year Budget Actual (Negative)- Actual $ 1,218,314 1,718,856 500,542 967,229 150,000 49,324 (100,676) 156,269 - - - 531 1,368,314 . 1,768,180 399,866 1,124,029 - 369 (369) 845 396,648 34,070 362,578 14,514 1,004,778 972,372 32,406 925,137 799,268 508,688 290,580 481,924 - - - 703 2,200,694 1,515,499 685,195 1,423,123 Net change in fund balances (832,380) 252,681 1,085,061 (299,094) Fund balances (deficits) at beginning of year 310,227 (310,227) - (11,133) Fund balances (deficits) at end of year $ (1,142,607) (57,549 1,085,061 (310,227) 99 CITY OF WEST COVINA Tree Fund Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual For the year ended June 30, 2010 Revenues: Investment income 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 Variance Prior Final Positive Year Budget Actual (Negative) Actual $ - - - 16 - - 16 558 558 - (542) 27 27 - 569 $ 27 27 27 100 1 1 1 1 1 1 1 1 1 1 1 t 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, 2010 Revenues: Investment income Other revenues Total revenues Expenditures: Current: Public safety Total expenditures , Net change in fund balances Fund balances (deficits) at beginning of year Fund balances (deficits) at end of year Variance Prior Final Positive Year Budget _ Actual (Negative) Actual $ - 6 6 70 15,000 15,2.20 220 8,040 15,000 15,226 226 8,11.0 13,356 15,238 (1,882) 12,980 13,356 15,238 1,882) 12,980 1,644 (12) (1,656) (4,870) (95) (95) - 4,775 $ 1,549 (107) (1,656) (95) CITY OF WEST COVINA Public Safety Fund Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual Revenues: 'Taxes Total revenues Expenditures: Current: Public safety Total expenditures Excess (deficiency) of revenues over (under) expenditures For the year ended June 30, 2010 Variance Prior Final Positive Year Budget Actual (Negative) Actual $ 575,000 530,944 (44,056) 558,724 575,000 530,944 (44,056) 558,724 - 6,131 6,131 575,000 530,944 (44,056) 552.593 Other financing sources (uses): Transfers out (575,000) 475,000 100,000 (620,752 Total other financing sources (uses) (575,000) 475,000 100,000 (620,752 Net change in fund balances - 55,944 55,944 (68,159) Fund balances at beginning of year - - - 68,159 Fund balances at end of year $ - 55,944 55,944 - 102 CITY OF WEST COVINA COPS Grant Fund Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and 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 at end of year For the year ended June 30, 2010 Variance Prior Final Positive Year Budget Actual (Negative) Actual $ - 1,320 1,320 4,472 200,000 140,724 59,276 100,000 .200,000 142,044 (57,956) 104,472 257,882 120,480 _ 137,402 94,777 257,882 120,480 137,402 94,777 (57,882) 21,564 79,446 9,695 185,261 185,261 - 175,566 $ 127,379 206,825 79,446 185,261 103 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, 2010 Variance Prior Final Positive Year Budget Actual (Negative) Actual Revenues:. Taxes $-810,222 840,224 30,002 890,765 Special assessments 4,657,639 4,871,575 213,936 4,180,404 Investment income 2,100 24,074 21,974 85,451_ Charges for services 25,500 29,778 4,278 35,965 Other revenues - - - 18,018 . Total revenues 5,495,461 5,765,651 270,190 5,210,603 Expenditures: Current: Public works 6,027,206 5,322,027 705,179 5,741,736 Community development 65,047 32,676 32,371 56,152 Total expenditures 6,092,253 5,354,703 73.7,550 5,797,888 Excess (deficiency) of revenues over (under), expenditures (596,792) 410,948 1,007,740 (587,285) Other financing sources (uses): Transfers in 26,898 26,898 - - Transfers out (50,000) (50,000) - (50,000)- Total other financing sources (uses) (23,102) (23,102) - (50,000) Net change in fund balances . (619,894) 387,846 1,007,740 (637,285) Fund balances at beginning of year 3,359,748 3,359,748 - 3,997,033 Fund balances at end of year $ 2,739,854 3,747,594 1,007,740 3,359,748 104 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, 2010 Variance Prior Final Positive Year Budget Actual(Negative) Actual Revenues: Investment income $ - 3,206 3,206 4,029 Total revenues - 3,206 3,206 4,029 Expenditures: Current: General government - 5,602 (5,602) 26,618 Public safety 25,000 24,858 142 8,500 Community services _ 9,162 3,158 6,004 34,586 Total expenditures 34,162 33,618 544 69,704 Net change in fund balances (34,162) (30,412) 3,750 (65,675) Fund balances at beginning of year 469,046 469,046 - 534,721 Fund balances at end of year $ 434,884 438,634 3,750 469,046 105 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, 2010 Variance Prior Final Positive Year Budget Actual (Negative) Actual Revenues: Investment income $ - 242 242 705 Other revenues - 28,292 28,292 53,096 Total revenues - 28,534 28,534 53,801 Expenditures: Current: Community services - - - 462 Community development 31,612 8,324 23;288 2,976 Total expenditures 31,612 8,324 23,288 3,438 Net change in fund balances (31,612) 20,210 51,822 50,363 Fund balances (deficits) at beginning of year 37,150 37,150 - 13,213 Fund balances at end of year $ 5,538 57,360 51,822 37,150 106 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, 2010 Revenues: Investment income 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 Variance Prior Final Positive Year Budget .t Actual (Negative) Actual $ 2,880 2,880 14,357 - 2,880 2,880 14,357 386,752 3,500 383,252 213,759 386,752 3,500 383,252 213,759 (386,752) (620) 386,132 (199,402) 411,919 411,919 - 611,321 $ 25,167 411,299 386,1-32 411,919 107 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, 2010 Variance Prior Final Positive Year Budget Actual(Negative) Actual Revenues: Revenue from other agencies $. 15,000 51,410 36,410 22,675 Total revenues 15,000 51,410 36,410 22,675 Expenditures: Current: Public safety 18,258 3,364 14,894 8,691 Total expenditures 18,258 3,364 14,894 801 Net change in fund balances (3,258) 48,046 51,304 13,984 Fund balances at beginning of year 25,932 25,932 - 11,948 Fund balances at end of year. $ 22,674 73,978 51,304 25;932 108 CITY OF WEST COVINA Measure R Fund Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual For the year ended June 30, 2010 Variance Prior Final Positive Year Budget Actual (Negative) Actual Revenues: Taxes $ 580,237 715,442 135,205 - Investment income - 1,504 1,504 - Total revenues 580,237 716,946 136,709 - Expenditures: Current: Public works - 162,537 (162,537) - Total expenditures - 162,537 (162,537) - Net change in fund balances 580,237 554,409 (25,828) - Fund balances at beginning of year - - Fund balances at end of year $ 580,237 554,409 (25,828) - 109 CITY OF WEST COVINA Integrated Waste Management Fund Schedule of Revenues, Expenditures and Changes. in Fund Balances - Budget and Actual For the year ended June 30, 2010 Revenues: Charges for service Total revenues Expenditures: Current: Public works Community services Total expenditures Excess (deficiency) of revenues over (under) expenditures Other financing sources (uses): Transfers in Total other financing sources (uses) Variance Prior Final Positive Year Budget Actual (Negative) Actual $ 65,000 69,166 4,166 69,166 65,000 69,166 4,166 69,166 67,873 68,403 (530) 101,716 - - -. 41,510 67,873 68,403 (530) 143,226 (2,873) 763 3,636 74,060) 74,060 74,060 Net change in fund balances (2,873) 763. 3,636. - Fund balances at beginning of year - - - - Fund balances (deficits) at end of year $ (2,873) 763 3,636 - 110 1 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, 2010 Variance Prior Final Positive Year Budget Actual (Negative) Actual Revenues: Investment income $ - 357 357 982 Charges for service 1,500 1,500 Other revenues 75,056 89,095 14,039 46,004 Total 76,556 revenues 90,952 14,396 46,986 Expenditures: Current: 1 Community services 86,531 31,754 54,777 7,345 Total expenditures 86,531 31,754 54,777 7,345 Excess (deficiency) of revenues over (under) ' expenditures (9,975) 59,198 69,173 39,641 Other financing sources (uses): Transfers out (70,2� ji (70,381) - - Total other financing ' sources (uses) (70,381) (70,381) - - Net change in fund balances (80,356) (11,183) 69,173 39,641 Fund balances at beginning of year 56,235 56,235 - 16,594 Fund balances (deficits) at end of year $ (24,121) 45,052 69,173 56,235 111 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. CDC Debt Service Fund - To account for the payment of principal and interest on long-term debt of the Community Development Commission. 112 1 1 1 1 1 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, 2010 Revenues: Investment income Charges for services Total revenues Expenditures: Debt service: Principal Interest and fiscal charges 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 $ 1,193,788 1,787,388 593,600 842,951 420,000 523,955 103,955 408,996 1,613,788 2,311,343 697,555 1,251,947 1,282,708 1,238,592 44,116 1,218,282 2,708,133 1,887,321 820,812 2,269,880 3,990,841 3,125,913 864,928 3,488,162 (2,377,053) 814,570 1,562,483 (2,236,215) 1,605,660 930,660 (675,0O 1,850,220 1,605,660 930,660 675,000) 1,850,220 (771,393) 116,090 887,483 (385,995) 18,661,327 18,661,327 - 19,047,322 $ 17,889,934 18,777,417 887,483 18,661,327 113 CITY OF WEST COVINA CDC Debt Service Fund Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual For the year ended June 30, 2010 Revenues: Taxes Investment income Other revenue Total revenues Expenditures: Debt service: Principal Interest and fiscal charges Pass -through payments Developer agreement payments 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 (deficits) at beginning of year Fund balances (deficits) at end of year Variance Prior Final Positive Year Budget Actual (Negative) Actual $ 20,700,000 22,223,568 1,523,568 22,818,676 315,000 369,430 54,430 466,441 1,000,000 1,168,524 169,524 - 22,015,000 23,761,522 1,746,522 23,285,117 3,340,483 2,340,000 1,000,483 2,095,000 6,523,247 5,782,901 740,346 6,021,673 9,781,308 9,724,035 57,273 3,468,902 2,440,000 2,002,039 437,961 2,181,599 22,085,038 19,848,975 2,236,063 13,767,174 (70,038) 3,912,547 3,982,585 9,517,943 (6,805,660) (7,468,517) (662,857) (7,105,850) (6,805,660) (7,468,517) (662,857) (7,105,850) (6,875,698) (3,555,970) 3,319,728 2,412,093 (7,000,487) (7,000,487) - (9,412,580) $ (13,876,185) (10,556,457) 3,319,728 (7,000,487) 114 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 Funds: City 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. CDC 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 in the Community Development Commission. 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. d 1 I 115 Assets Cash and investments Receivables: Interest Due from other governments Total assets Liabilities and Fund Balances Liabilities: Accounts payable Other accrued liabilities Due to other funds .Total liabilities CITY OF WEST COVINA Non -Major Capital Projects Funds - Combining Balance Sheet For the year ended June 30, 2010 Construction Tax Park Development Totals 2010 2009 $ 258,514 403,618 662,132 1,121,318 289 500 789 3,151 150,000 150,000 - $ 258,803 554,118 812,921 1,124,469 $ 31,793 3,004 34,797 30,784 1,087 532 1,619 19,622 - 1111n 11,10 - 32,880 3,966 36,846 50,406 Fund balances: Reserved for: Encumbrances 960 52,500 53,460 84,654 Unreserved: Designated for capital projects 224,963 497,652 722,615 989,409 Total fund balances 225,923 550,152 776,075 1,074,063 Total liabilities and fund balances $ 258,803 554,118 812,921 1,124,469 l 116 1 1 i 1 1 1 1 1 1 1 1 1 1 1 1 1 CITY OF NVEST COVINA Non -Major Capital Projects Funds Combining Statement of Revenues, Expenditures and Changes in Fund Balances For the year ended June 30, 2010 Construction IPark Totals Tax Development 2010 2009 Revenues: Taxes $ 50,949 - 50,949 151,293 Investment income 2,014 4,092 6,106 36,162 Rental income - 22,500 22,500 Revenue from other agencies - 150,000 150,000 - Other revenues - 9,980 9,980 35,950 Total revenues 52,963 186,572 239,535 223,405 Expenditures: Current: General government 68,483 - 68,483 12,527 Public safety 23,752 - 23,752 2,402 Public works 62,598 - 62,598 110,918 Community services 17,304 190,386 207,690 339,806 Total expenditures 172,137 190,386 362,523 465,653 Excess (deficiency) of revenues over (under) expenditures (119,174) (3,814.) (122,988) 242,248) Other financing sources (uses): Transfers in - - - 176,230 Transfers out - (175,000) (175,000) (287,100 Total other financing sources (uses) - (175,000) (175,000) (110,870) Net change in fund balances (119,1.74) (178,814) (297,988) (353,118) Fund balances at beginning of year 345,097 728,966 1,074,063 1,427,181 Fund balances at end of year $ 225,923 550,152 776,075 1,074,063 117 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, 2010 Variance Prior Final Positive Year Budget Actual (Negative) Actual Revenues: Investment income $ - 12,432 12,432 48,176 Revenue from other agencies 26,438 - (26,438) - Total revenues 26,438 12,432 (14,006) 48,176 Expenditures: Current: General government 68,381 - 68,381 - Public safety 1,849,145 1,837,733 -11,412 1,318,312 Public works 749,635 791 748,844 36,176 Community services 159,485 36,550 122,935 458,692 Total expenditures 2,826,646 1,875,074 _ 951,572 -1,813,180 Excess (deficiency) of revenues over (under) expenditures _ 2,800,208) (1,862,642) 937,566 (1,765,004) Other financing sources (uses): Transfers in 68,381 68,381 - - Transfers out - - - (137,140) Total other financing sources (uses) 68,381 68,381 - (137,140) Net change in fund balances (2,731,827) (1,794,261) 937,566 (1,902,144) Fund balances at beginning of year 3,151,184 _ 3,151,184 - 5,053,328 Fund balances at end of year $ 419,357 1,356,923 937,566 3,151,184 118 CITY OF WEST COVINA CDC Capital Projects Fund Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual For the year ended June 30, 2010 i Variance Prior Final Positive Year Budget Actual (Negative) Actual ' Revenues: Investment income $ 330,000 180,291 (149,709) 636,533 ' Rental income 50,000 97,545 47,545 - Repayment of notes and loans 180,000 399,721 219,721 638,096 Other revenues - 220,485 220,485 218,660 _ Total revenues 560,000 898,042 338,042 1,493,289 Expenditures: Current: Public works - - - 7,557 Community development 11,073,309 5,552,472 5,520,837 9,975,031 Debt service: ' Principal 530,000 530,000 - 515,000 Interest and fiscal charges 740,152 740,581 (429) 763,668 Total expenditures 12,343,461 6,823,053 5,520,408 11,261,256 Excess (deficiency) of revenues over (under) expenditures (11,781461) (5,925,011) 5,858,450 (9,767,967) Other financing sources (uses): Transfers in 6,050,000 6,712,857 662,857 6,388,830 Total other financing sources (uses) 6,050,000 6,712,857 662,857 6,388,830 ' Net change in fund balances (5,733,461) 787,846 6,521,307 (3,379,137) Fund balances at beginning of year g g y 13,0 13 08 89,534 13,089,534 - 16,468,67.1 ' Fund balances at end of year $ 7,356,073 13,877,380 6,521,307 13,089,534 ' 119 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, 2010 Revenues: Taxes Investment income Total revenues Expenditures: Current: General government Public safety Public works 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 $ 100,000 50,949 (49,051) 151,293 - 2,014 2,014 9,396 100,000 52,963 (47,037) 160,689 83,899 68,483 15,416 12,527 29,594 23,752 5,842 2,402 237,894 62,598 175,296 106,019 47,662 17,304 30,358. 31,794 399,049 172,137 226,912 152,742 (299,049) (119,174) 179,875 7,947 345,097 345,097 - 337,150 $ 46,048 225,923 179,875 345,097 120 1 1 1 1 1 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, 2010 Revenues: Investment income Rental income Revenue from other agencies Other income Total revenues Expenditures: Current: Public works Community services 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 Variance Prior Final Positive Year Budget Actual (Negative) Actual $ - 4,092 4,092 26,766 22,500 22,500 - - 150,000 150,000 - 150,000 9,980 140,020 35,950 150,000 186,572 36,572 62,716 - - - 4,899 564,712 190,386 374,326 308,012 564,712) 190,386 374,326 312,911 414,712) (3,814) 410,898 250,195 - - 176,230 (175,000) (175,000) - 287,100 (175,000) (175,000) - 110,870 (589,712) (178,814) 410,898 (361,065) 728,966 728,966 - 1,090,031 $ 139,254 550,152 410,898 728,966 121 (This page intentionally left blank) 122 1 1 1 1 1 1 1 1 1 1 1 i 1 PROPRIETARY FUND TYPES 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 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. Retirement Health Savings Plan Fund — This fund accounts for the set aside lump sum benefits for retiring employees. Vehicle Replacement Fund — This fund provides for replacement of City Vehicles 123 11 (This page intentionally left blank.) 1 11 i 124 ' S Assets Current assets Cash and investments Receivables: Accounts Interest Due from other funds Inventory Total current assets Capital assets: 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 o£ CITY OF WEST COVINA Internal Service Funds Combining Statement of Net Assets, June 30, 2010 Retiree Fleet Self- Health Vehicle Management Insurance Savings Plan Replacement Totals 2010 2009 $ - 4,401,218 428,979 431,744 5,261,941 9,959,997 1,043 11,299 - - 12,342 2,774 - - 485 531 1,016 2,566 - 2,883,652 - - 2,883,652 - 2,769. - - - 2,769 2,120 3,812 7,296,169 429,464 432,275 8,161,720 9,967,457 3,460,834 - - 445,251 3,906,085 3,948,585 (2,803,329) - - .(182,712) (2,986,041) (2,853,142) 657,505 - - 262,539 920,044 1,095,443 661,317 7,296,169 429,464 694,814 9,081,764 11,062,900 98,045 8,215 13,977 8,764 - 96,438 Claims and judgments payable - 3,771,370 - Compensated absences 13,355 8,826 - Total current liabilities 221,815 3,797,175 - ' 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 r 106,260 120,969 - 22,741 24,428 - 96,438 240,890 - 3,171,370 2,226,476 - 22,181 19,950 4,018,990 2,632,713 - 7,814,636 - - 7,814,636 6,679,426 45,410 51,155 - - 96,565 78,638 45,410 7,865,791 - - 7,911,201 6,758,064 267,225 11,662,966 - - 11,930,191 9,390,777 657,505 - - 262,539 920,044 1,095,443 (263,413) (4,366,797) 429,464 432,275 (3,768,471) 576,680 $ 394,092 (4,366,797) 429,464 694,814 (2,848,427) %672,123 125 CITY OF WEST COVINA Internal Service Funds ' Combining Statement of Revenues, Expenses and Changes in Net Assets For the year ended June 30, 2010 ' 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 Interfund transfers Transfers out Change in net assets f Net assets (deficits) at beginning of year Net assets (deficits) at -end of year Retiree ' Fleet Self- Health , Vehicle Totals Management Insurance Savings Plan Replacement 2010 2009 $ 1,617,800 2,457,992 188,333 - 4,264,125 4,188,029 4,463 181,004 - - 185,467 19,044 , 1,622,263 2,638,996 188,333 - 4,449,592 4,207,073 539,135 340,967 35,199 - 915,301 874;217 973,736 217,328 - - 1,191,064 1,182,530 ' 109,392 - - 63,607 172,999 182,141 - 4,947,113 - - 4,947,113 4,029,206 1,622,263 5,505,408 •35,199 63,607 7,226,477 6,268,094 - (2,866,412) 153,134 (63,607) (2,776,885) (2,061,021) - - 2,-488 3,847 6,335 20,617 - - 2,488 3,847 6,335 20,617 ' - (2,866,412) 155,622 (59,760) (2,770,550) (2,040,404) - (1,500;000) - (250,000) (1,750,000) - - (4,366,412) 155,622 (309,760) (4,520,550) (2,040,404) ' 394,092 (385) 273,842 1,004,574 1,672,123 3,712,527 ' $ 394,092 (4,366,797) 429,464 694,814 (2,848,427) 1,6721123 126 ' CITY OF WEST COVINA Internal Service Funds Combining Statement of Cash Flows ' For the year ended June 30, 2010 Retiree Fleet Self- Health Vehicle Totals Management Insurance Savings Plan Replacement 2010 2009 Cash flows from operating activities: Cash received from user departments $ 1,621,393 2,630,298 188,333 - 4,440,024 4,350,081 Cash payments to suppliers for goods and services (948,679) (2,522,352) - (3,471,031) (3,709,919) Cash payments to employees ' for services (528,262) (333,369) (35,199) - (896,830) (860,240) Net cash provided b used for P Y( ) operating activities 144,452 (225,423) 153,134 - 72,163 (220,078) Cash flows from noncapital financing activities: ' Cash received from other funds - - - - - 55,498 Cash paid to other funds (144,452) (4,383,652) - (250,000) (4,778,104) (74,639) Net cash provided by (used for) noncapital financing activities (144,452) (4,383,652) - (250,000) (4,778,104) (19,141) Cash flows from capital and related financing activities: Cash paid for acquisition of capital assets - - - - - (32,812) • Net cash proved by (used for) capital and related financing activities - - - - - (32,812) Cash flows from investing activities: Interest received on investments - - 2,705 5,180 7,885 21,102 Net cash provided by (used for) investing activities - - 2,705 5,180 7,885 21,102 Net increase (decrease) in cash ' and cash equivalents - (4,609,075) 155,839 (244,820) (4,698,056) (250,929) Cash and cash equivalents at ' beginning of year - 9,010,293 273,140 676,564 9,959,997 10,210,926 Cash and cash equivalents at end of year - 4,401,218 428,979 431,744 5,261,941 9,959,997 127 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 Gain on disposition of capital assets (Increase) decrease in accounts receivable (Increase) decrease in inventory Increase (decrease) in accounts payable Increase (decrease) in other accrued liabilities Increase (decrease) in compensated absences Increase (decrease) in claims and judgments payable Total adjustments Net cash provided by (used for) operating activities CITY OF WEST COVINA Internal Service Funds Combining Statement of Cash Flows (Continued) ' Fleet Retiree Self- Health Vehicle Totals - ' Managernent Insurance Savings Plan Replacement 2010 2009 $ - (2,866,412) 153,134 (63,607) (2,776,885) (2,061,021) ' 109,392 - - 63,607 172,999 182,141 2,400 - - - 2,400 - (870) (8,698) - - (9,568) 143,008 (649) - - - (649) 21685 23,306 (38,015) - - (14,709) (39,566) 189 (1,876) - - (1,687) 6,470 ' 10,684 9,474 - - 20,158 7,507 - 2,680,104 - - 2,680,104 1,538,698 144,452 2,640,989 - 63,607 2,849,048 1,840,943 , $ 144,452 225,423) 153,134 - 72,163 (220,078) 128 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 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. 129 CITY OF WEST COVINA Special Deposits Agency Fund Statement of Changes in Assets and Liabilities For the year ended June 30, 2010 Balance at Balance at July 1, 2009 Additions Deletions June 30, 2010 Assets Cash and investments $ 792,285 2,476,123 (2,392,273) 876,135 Accounts receivable 100 - (100) - Total assets $ 792,385 2,476,123 (2,392,373). 876,135 Liabilities Accounts payable $ 3,846 106,780 (110,626) - Deposits 788,539 2,481,000 (2,393,404) 876,135 Total liabilities $ 792,385 2,587,780 (2,504,030) 876,135 130 11 11 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. 131 CITY OF WEST COVINA Net Assets by Component Last Eight Fiscal Years (accrual basis of accounting) Fiscal Year 2003 2004 2005 Governmental activities: Invested in capital assets, " net of related debt $ 148,947,725 146,195,649 143,792,663 Restricted 110,501,120 106,938,430 104,865,107 Unrestricted 3,655,287 2,406,084 140,122 Total governmental activities net assets 263,104,132 255,540,163 248,797,892 Business -type activities: Invested in capital assets, net of related debt 383,176 458,875 136,937 Restricted - - - Unrestricted 2,015,309 1,692,357 1,832,618 Total business -type activities net assets 2,398,485 2,151,232 1,969,555 Primary government: Invested in capital assets, net of related debt Restricted Unrestricted Total primary government net assets I , 149,330,901 146,654,524 143,929,600 110,501,120 106,938,430 104,865,107 5,670,596 4,098,441 1,972,740 , $ 265,502,617 257,691,395 - 250,767,447 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 I 132 Table 1 Fiscal Year 2006 2007 2008 2009 2010 144,030,127 139,413,253 148,634,909 180,298,472 184,338,106 99,990,727 88,484,572 30,802,069 25,937,799 18,316,134 (3,710,829) 20,796,530 63,530,998 22,723,726 10,219,814 240,310,025 248,694,355 242,967,976 228,959,997 212,874,054 193,706 303,147 202,227 107,507 42,073 1,469,994 721,839 (66,842) (786,551) (1,128,610) 1,663,700 1,024,986 135,385 (679,044) (1,086,537) 144,223,833 139,716,400 148,837,136 180,405,979 184,380,179 99,9901,727 88,484,572 30,802,069 25,937,799 1 18,316,134 (2,240,835) 21,518,369 63,464,156 21,937,175 9,091,204 241,973,725 249,719,341 243,103,361 228,280,953 211,787,517 133 CITY. OF WEST COVINA ' Changes in Net Assets Last Eight Fiscal Years (accrual basis of accounting) , Fiscal Year 2003 2004 2005 Expenses: Governmental activities: 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 Business -type activities: Simulator. - 254,867 Computer enterpise 1,372,798 Total business -type activities expenses 1,627,665 Total primary government expenses 70,462,415 Program revenues: Governmental activities: 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 Business -type activities: Charges for services: Simulator 90,336 Computer enterprise 1,569,556 Operating grants and contributions - Capital grants and contributions - Total business -type activities program revenues 1,659,892-- Total primary government program revenues 19,692,047 2,314,558 33,1725116 16,803,123 7,911,247 6,438,979 45039,240 70,679,263 241,047 2,023,376 2,264,423 72,943,686 1,271,852 1,772,859 3,763,540 1,471,603 154,837 9,833,967 1,064,756 2,919,887 38,436,098 19,642,927 4,144,990 6,761,102 5,001,981 76,906,985 2,212,802 2,212,802 79,119,787 1,377,178 2,562,910 3,610,577 1,546,169 223,938 10,802,517 378,493 19,333,414 20,501,782 79,903 2,165,999 2,245,902 21,579,316 1,992,662 11992,662 22,494,444 134 Table 2 Fiscal Year 2006 2007 2008 2009 2010 1,594,760 46,328 2,448,843 2,849,501 3,337,547 ' 38,433,238 42,186,533 45,498,406 47,682,934 48,151,398 20,696,562 19,322,212 20,246,687 21,598,894 21,0549241 6,4829112 5,167,297 5,214,550 7,835,430 6,558,987 ' 11,245,539 9,610,651 10,000,667 12,867,904 8,619,004 _7,714,047 8,320,239 8,200,588 7,962,089 6,577,544 86,166,258 84,653,260 91,6099741 100,796,752 94,298,721 2,0989690 2,470,811 2,682,467 2,633,564 2,507,498 2,098,690 2'5470,811 2,682,467 2,633,564 2,507,498 88,264,948 87,124,071 94,292,208 103,430,316 96,806,219 2,767,383 861,565 1,145,943 757,678 1,019,690 3.310,988 55297,840 3,141,098 6,339,196 3,431,488 4,251,433 3,611,259 5,818,290 3,850,741 7,041,281 19454,683 1,526,866 19443,945 1,158,644 1,089,227 302,677 537,813 275,235 266,286 313,639 11,614,595 8,607221 10,618,414 11,895,355 5,157,956 285,078 2,714:668 4349630 578,828 3,574,609 ' 25 033 244 _ 23 728 427 21 60 1,088 24,086,340 229047,143 ' 1,721,715 1,765,224 1,755,717 1,885,071 2,1939037 1,721,715 1,765 224 1,755,717 1,885,071 2,193,037 ' 26,754,959 25,493,651 23,356,805 25,971,411 24,240,180 ' 135 CITY OF WEST COVINA Changes in Net Assets Last Eight Fiscal Years (accrual basis of accounting) Fiscal Year 2003 2004 2005 Net revenues (expenses): Governmental activities (50,802,595) (51,345,849) (56,405,203) Business -type activities 32,227 . (18,521 (220,140) Total net revenues (expenses) (50,770,368) 51,364,370) (56,625,343) General revenues and other changes in net assets: Governmental activities: Taxes: Property taxes 13,711,795 16,107,447 17,565,368 . Sales tax 13,333,877 14,355,566 14,522,220 Franchise tax 2,425,160 2,617,462 2,870,211 Other taxes 3,733,940 4,028,136 2,959,329 Motor vehicle in lieu, unrestricted 6,291,597 5,054,269 7,044,997 Investment income 5,543,268 44,464 2858,850 Other general revenues 254,980 1,324,596 2:132,720 Transfers - 250,000 137 Total governmental activities 45,294,617 43,781,880 49,953,832 Business -type activities: Investment income 30,545 21,268 38,600 Transfers - (250,000) (137) Total business -type activities 30,545 (228,732) 38,463 Total primary government 45,325,162 43,553,148 49,992,295 Changes in net assets ' Governmental activities (5,507,978) (7,563,969) (6,451,371) Business -type activities 62,772 (247,253) (181,677) Total primary government $ (5,445,206) (7,811,222) (6,633,048) 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 mill 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 Table 2 2006 2007 2008 2009 2010 _ (61,133,014) (60,924,833) (70,008,653) (76,710,412) (72,251,578) (376,975) (705,587) 926,750) (748,493) (314,461) (61,509,989) (61,630,420) (76,935,403) (77,458,905) (72,566,039) 27,614,922 32,458,314 34,760,944 36,3817 548 28,849,815 14,216,986 14,056,880 11,167,748 9,261,965 7,791,286 2,845,521 2,874,165 3,367,958 3,512,830 3,093,538 3,433,966 4,454,217 4,445,300 5,108,429 5,392,829 2,606,079 650,304 500,629 383,831 331,289 1,99.3,102 6,919,306 7,800,642 4,768 327 4,288,088 (65,429) 7,895,977 2,239,053 3,200,753 2,077,837 - - - 78,750 93,140 52,645,147 69,309,163 64,282,274 62,702,433 51,917,822 71,120 66,873 37,149 12,814 108 - - - (78,750) (93,140) 71,120 .66,873 37,149 (65,936) (93,032) 52,716,267 69,376,036 64,319,423 62,636,497 51,824,790 (8,487,867) 8,384,330 (5,726,379) (14,007,979) (20,333,756) (305,855) (638,114) (889,601) (814,429) (407,493) (8,793,722) 7,745,616 (6,615,980) (14,822,408) (20,741,249) 137 CITY OF WEST COVINA Changes in Net Assets - Governmental Activities Last Eight Fiscal `fears (accrual basis of accounting) Fiscal Year 2003 2004 2005 Expenses: General government $ 3,578,429 2,314,558 2,919,887 Public safety 30,258,976 33,172,116 38,436,098 Public works 18,043,497 16,803,123 19,642,927 Community services 6,400,613 7,911,247 4,144,990 Community development 5,545,289 .6,438,979 6,761,102 Interest on long-term debt 5,007,946 4,039,240 5,001,981 Total governmental activities expenses 68,834,750 70,679,263 76,906,985 Program revenues: Charges for services: General government 22,486 1,271,852 1,377,178 Public safety 1,754,863 1,772,859 2,562,910 Public works. 3,810,930 3,763,540 3,610,571 Community services 1,277,251 1,471,603 1,546,169 Community development 969,865 154,837 223,938 Operating grants and contributions 9,850,635 9,833,967 10,802,517 Capital grants and contributions 346,125 1,064,756 378,493 Total governmental activities program revenues 18,032,155 19,333,414 20,501,782 Net program revenues (expenses) (50,802,595 51,345,849 (56,405,203) General revenues.and other changes in net assets: Taxes: Property taxes 13,711,795 16,107,447 17,565,368 Sales tax 13,333,877 14,355,566 14,522,220 Franchise tax 2,425,160 2,617,462 2,870,211 Other taxes 3,733,940 4,028,136 2,959,329 Motor vehicle in Iieu, unrestricted 6,291,597 5,054,209 7,044,997 Investment income . 5,543,268 44,464 2,858,850 Other general revenues,. 254,980 1,324,596 2,132,720 Transfers - 250,000 137 Total governmental activities 45,294,617 43,781,880 49,953,832 Changes in net assets - governmental activities $ (5,507;978) (7,563,969) (6,451,371) 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 138 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 Table 3 2006 2007 2008 2009 2010 1,594,760 46,328 2,448,843 2,849,501 3,337,547 38,433,238 42,186,533 45,498,406 47,682,934 48,151,398 20,696,562 19,322,212 20,246,687 21",598,894 21,054,241 6,482,112 5,167,297 5,214,550 7,835,430 6,558,987 11,245,539 9,610,651 10,000,667 12,867,904 8,619,004 7,714,047 8,320,239 _8,200,588 7,962,089 6,577,544 86,166,258 84,653,260 91,609,741 100,796,752 94,298,721 2,767,383 861,565 1,145,943 757,678 1,019,690 3,310,988 3,141,098 3,431,488 3,611,259 3,850,741 5,297,840 6,339,196 4,251,433 5,818,290 7,041,281 1,454,683 1,526,866 1,443,945 1,158,644 1,089,227 302,677 537,813 275,235 266,286 313,639 11,614,595 8,607,221 10,618,414 11,895,355 5,157,956 285,078 " 2,714,668 434.630 578,828 3,574,609 25,033,244 23,728,427 21,601,088 24,086,340 22,047,143 61,133,014) (60,924,833) (70,008,653) (76,710,412) (72,251,578) 27,614,922 32,458,314 34,760,944 36,387,548 28,849,815 14,216,986 14,056,880 11,167,748 9,261,965 7,791,286 2,845,521 2,874,165 3,367,958 3,512,830 3,093,538 3,433,966 4,454,217 4,445,300 5,108,429 5,392,829 2,606,079 650,304 500,629 383,831 331,289 1,993,102 6,919,306 7,800,642 4,768,327 4,288,088. (65,429) 7,895,977 2,239,053 3,200,753 2,077,837 - _ = 78,750 93,140 52,645,147 69,309,163 64,282,274 62,702,433 51,917,822 8,487,867 8,384,330 (5,726,379) (14,007,979) (20,333,756) 139 CITY OF INEST COVINA Changes in Net Assets - Business -type Activities Last'Eight Fiscal Years (accrual basis of accounting) Fiscal Year 2003 2004 2005 Expenses: Simulator $ 254,867 241,047. - Computer Enterprise 1,372,798 2,023,376 2,212,802 Total business -type activities expenses 1,627,665 2,264,423 2,212,802 Program revenues: Charges for services: Simulator. Computer Enterprise Operating grants and contributions Capital grants and contributions Total business -type activities 90,336 79,903 - 1,569,556 2,165,999 1,992,662 program revenues 1,659,892 2,245,902 1,992,662 Net revenues (expenses) 32,227 (18,521) 220,140 General revenues and other changes in net assets: Investment income 30,545 21,268 38,600 Transfers - 250,000 137 Total business -type activities 30,545 228,732 38,463 Changes in net assets - business -type activities $ 62,772 247,253 (1 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 140 Table 4 Fiscal Year 2006 2007 2008 2009 2010 2,098,690 2,470,811 2,682,467 2,633,564 2,507,498 2,098,690 2,470,811 2,682,467 2,633,564 2,507,498 1,721,715 1,765,224 1,755,717 1,885,071 29-193,037 1,721,715 1,765,224 1,755,717 1,885,071 2,193,037 (376,975 _ (705,587 (926,750) '(748,493) (314,461) 71,120 66,873 37,149 12,814 108 - - - 78,750 (93,140) 71,120 66,873 37,149 (65,936) (93,032) (305,85.5) (638,714) 889,601 (814,429 4�7,493 141 CITY OF WEST COVINA Fund Balances of Governmental Funds Last Eight Fiscal Years (modified accrual basis of accounting) Fiscal Year 2003 2004 2005 General fund: Reserved $ 28,565,395 24,398,011 24,201,596 Unreserved 29,486,397 24,427,158 23,513,760 Total general fund 58,051,792 48,825,169 47,715,356 All other governmental funds: Reserved 21,204,178 34,406,256 44,606,915 Unreserved, reported in: Special revenue funds 8,434,845 6,021,975 . 5,980,930 Capital projects funds 5,874,255 (1,654,836) 929,735 Debt service funds (4,022,064) (4,625,186) _ 888,628 Total all other governmental funds $ 31,491,214 34,148,209 50,628,952 The City of West Covina has elected to show only eight years of data for this schedule. Source: City of West Covina Finance Department 142 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 Table 5 Fiscal Year 2006 2007 2008 2009 2010 24,954,584 24,793,675 23,805,491 22,621,000 24,321,122 23,982,187 19,315,808 16,021,539 12,846,323 7,246,828 48,936,771 44,109,483 39,827,030 35,467,323 31,567,950 25;188,543 42,527,670 33,118,104 28,675,986 24,916,095 9,981,374 8,293,679 9,438,350 9,297,969 10,351,716 12,139,928 4,134,045 (631,251) (2,380,312) (465,131) (2,685,881) (1,825,601) 860,278 3,085,503 131,153 44,623,964 53,129,793 42.,785,481 38,679,146 34,671,527 143 CITY OF WEST COVINA Changes in Fund Balances of Governmental Funds Last Eight Fiscal Years (modified accrual basis of accounting) Fiscal Year 2003 2004 2005 Revenues: Taxes Special assessments Licenses and permits Fines and forfeitures Investment income Rental income Intergovernmental Charges for services Repayment of notes and loans Developer fees Other Total revenues Expenditures Current: General government Less interfund revenues Public safety Public works Community services Community development Debt service: Principal retirement Interest and fiscal charges Cost of issuance Pass -through payments Developer agreement payments Total expenditures Excess (deficiency) of revenues over (under) expenditures Other financing sources (uses): Transfers in Transfers out Issuance of bonds Gain/ (loss) on sale of property Payment to refunded bond escrow agent Total other financing sources (uses) Net change in fund balances Debt service as a percentage of noncapital expenditures $ 43,507,485 47,634,431 49,046,990 3,532,950 3,311,896 3,448,956 1,101,778 1,425,077 1,046,759 1,219,531 1,410,536 1,264,600 8,790,949 3,564,751 8,239,221 436,755 593,486 589,564 9,607,367 8,586,703 12,052,408 1,861,498 2,279,000 3,533,169 4,534,914 1,877,550 2,336,958 - 916,384 378,493 . 1,259,634 1,624,656 2,517,164 7.5,852,861 73,224,470 84,454,282 5,327,608 4,230,885 4,790,513 (1,796,311) (1,942,452) (1,864,101) 29,767,232 34,037,594 37,643,249 13,504,313 10,996,162 12,937,191 11,655,366 101-630,005 8,337,754 9,326,955 8,814,434 5,229,820 2,258,871 1,807,869 2,200,464 7,315,734 7,664,295 7,901,882 191,724 - - 3,395,174 4,067,093 4,817,371 80,946,666 80,305,890 81,994,143 (5,093,805) (7,081,420) 2,460,139 7,564,948 8,781,210 9,842,137 (71564,948) (8,531,210) (10,140,446) 5,444,192 261,792 13;500,000 (1,041,331) - - 4,402,861 _ 511,792 13,201,691 $ (690,944) 6,569,628) 15,661,830 18.9% 18.9% 19.9% The City of West Covina has elected to show only eight years of data for this schedule. Source: City of West Covina Finance Department 144 L ' Table 6 Fiscal Year 2006 2007 2008 2009 2010 ' 58,464,794 62,801,264 65,069,488 65,186,854. 63,270,166 3,582,066 3,711,712 3,913,965 4,180,404 4,871,575 1,336,564 1,168,842 1,833,239 1,106,271 1,196,670 1,216,628 1,085,650 1,229,852 904,985 1,324,698 5,807,699 9,544,547 8,778,81.3 5,601,091 5,589,739 266,516 223,668 270,058 311,997 310,819 12,301,929 7,491,065 8,113,584 8,848,048 11,321,980 4,764,618 5,446,093 5,360,812 5,041,759 5,234,869 1,355,096 988,220 1,048,727 794,365 449,045 7,884 2,566,819 1,462,515 8,903,148 10,950 662,988 - 1,824,050 - 1,112,553 91,622,827 103,511,762 95,642,683 94,104,070 94,390,429 4,912,513 5,478,534 5,787,654 4,687,485 4,646,621 (1,881,624) (3,069,508) (2,818,068) (1,979,438) (1,610,642) 39,996,407 41,602,661 44,138,678 45,554,204 45,639,257 14,269,148 15,623,128 16,308,548 17,923,628 19,686,587 11,857,937 31,362,253 24,580,791 7,189,514 5,390,364 ' 10,385,511 7,120,280 7,632,478 10,739,465 6,142,905 2,050,000 4,014,507 3,441,290 3,828,282 4,108,592 ' 8,766,422 - 10,059,439 294,764 9,827,109 - 9,055,221 - 8,410,803 - 3,199,441 2,568,343 2,825,925 3,468,902 9,724,035 1,858,120 2,783,820 2.,939,322 2,181,599 2,002,039 95,413,875 117,838,221 114,663,727 102,648,862 104,140,561 (3,791,048) (14,326,459) (19,021,044) (8,544,792) (9,750,132) ' 9,342,762 (10,342,762) 33,024,064 (33,024,064) 9,976;252 (9,901,252) 12,048,364 (11,969,614) 11,023,152 (9,180,012) 2,735,000 18,005,000 4,319,279 - - (2,727,525) - - (992,525) 18,005,000 4,394,279 78,750 1,843,140 (4,783,573) 3,678,541 (14,626,765) (8,466,042) (7,906,992) 18.0% 23.6% 21.1% 19.3% 25.6% 1 145 , CITY OF WEST COVINA Assessed Value and Estimated Actual Value of Taxable Property Last Ten Fiscal Years , (in thousands of dollars) city Fiscal Year Ended Less: Taxable Assessed ' June 30 Secured Non- Unitary Unsecured Exemptions Value 2001 $ 3,646,495 371 32,724 (21,475) 3,658,115 ' 2002 3,872,519 371 14,273 (30,889) 3,856,274 2003 4,1.21,487 371 13,124 (49,440) 4,085,542 2004 4,475,555 1,388 14,744 (23,716) 4,467,971 2005 4,808,086 464 15,093 (48,139) 4,775,504 2006 5,330,215 464 13,111 (64,912) 5,279,478 2007 ' 5,838,746 464 14,903 (56,655) 5,797,458 ' 2008 6,261,173 462 15,899 (76,713) 6,200,821 2009 6,549,882 462 15,315 (78,464) 6,487,195 .2010 6,281,230 15,205 (76,991). 6,219,444 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 i 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 propertysold. 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 2000/2001 - 20Q9/2010 Combined Tax Rolls ' 146 ' 1 1 1 1 1 1 1 1 1 1 1 _ Community Development Commission Less: Secured Unsecured Exemptions Taxable Assessed Value City +CDC Total Taxable Assessed Value 1,200,574 104,795 (56,215) 1,249,154 4,907,269 1,303,935 136,767 (97,811) 1,342,891 5,199,165 1,388,741 133,358 (83,020) 1,439,079 5,524,621 1,459,309 132,127 (103,577) 1,487,859 5,955,830 1,547,925 132,801 (111,853) 1,568,873 6,344,377 1,723,957 137,934 (118,531) 1,743,360 7,022,838 1,895,1.68 146,336 (123,048) 1,918,456 7,715,914 2,038,968 144,533 (138,919) 2,044,582 8,245,403 2,283,051 150,880 (143,108) 2,290,823 8,778,018 2,339,976 163,198 (152,699) 2,350,475 8,569,919 147 Table 7 Total Direct Tax Rate 13.985% 13.985% 13.985% 13.985% 13.985% 13.985% 13.985% 13.985% 13.820% 13.820% 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 2001 2002 2003 2004 2005 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 O.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 S1.00000 $1.00000 Metro Water District 0.008800 0.007700 0.006700 0.006100 0.005800 Flood Control 0.001552 0.001073 0.000881 0.000462 0.000245 Community College.- 0.000000 0.000000 0.019460 0.015246 0.014731 Unified Schools 0.027280 0.052398 0.079847 0.050839 0.082226 County 0.001314 0.001128 0.001033 0.000992 0.000923 Total Voter Approved Rates $0.038946 $0.062299 $0.107921 $0.073639 $0.103925 Total Tax Rate $1.08246 $1,062229 $1,107921 $1.073639 $1,1039-25 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 2000/2001 - 2009/2010 Tax Rate Table 148 1 1 1 1 1 1 1 1 1 1 1 i 1 Table 8 2006 2007 2008 2009 2010 $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 0.005200 0.064700 0.004500 0.004300 0.004300 0.000050 0.000050 0.000000 0.000000 0.000000 0.021220 0.025300 0.017500 0.023326 0.025710 0.061470 0.065120 0.051440 0.060406 0.052576 0.000800 0.000660 0.000000 0.000000 0_000000 $0.088740 $0.095830 $0.073440 $0.088032 $0.082586 $1.088740 `� $1.073440 $1.088032 $1.082586 149 (This page intentionally left blank.) 150 ' CITY OF WEST COVINA Table 9 Principal Property Tax Payers i Current Year and Nine Years Ago 2001 2010 Percent of Percent of Total City Total City ' Taxable Taxable Taxable Taxable Assessed Assessed Assessed Assessed Taxpayer Value Value Value Value Caliornia Newspapers Partnership $ 24,021,892 o 0.49 /o - 0.00% Citrus Valley Medical Center 88,322,887 1.80% - 0.00% CMF PWC LLC - 0.00% 34,143,103 0.40% Cole Me West Covina Calif DST - 0.00% 27,754,200 0.32% Eastland Shopping Center 85,749,693 1.75% 102,315,093 1..19% Eastland Tower Partnership 27,069,000. 0.55% 51,124,777 0.60% Gateway Crescent LLC - 0.00% 56,865,000 0.66% ' Glendora Avenue Apartments LLC 22,386,000 0.46% - 0.00% Hassen Real Estate_ Partnership 29,940,875 0.61% 35,034,749 0.41% ' Plaza West Covina LLC 125,745,201 2.56% 185,530,056 2.16% Pried YIV Trust 23,304,959 0.47% 29,023,843 0.340io ' SP Torrey Pines LLC - 0.00% 54,755,600 0.64% West Covina Lakes Associates 19,750,000 0.40% - 0.00% West Covina Group Retail - 0.00% 24,969,600 0.29% Westfield Corporation 31,810,920 0.65% - 0.00% $ 478,101,427 9.74% $ 601,516,021 7.02% The amounts shown above include assessedvalue 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 2009/10 Combined Tax Rolls and the SBE Unitary Tax Roll 151 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 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% 2008 $ 8,788,631 7,766,633 88.37% (65,994) 7,700,639 87.62% 2009 $ 9,207,210 8,509,721 92.42% 104,568 8,614,289 93.56% 2010 $ 8,913,839 8,152,304 91.46% 111,790 8,264,094 92.71% 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. 152 1 1 1 1 1 1 1 i 1 1 1 1 1 1 1 1 1 1 1 Table 10 Community Development Commission 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 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% 2008 17,595,311 17,485,161 99.37% 1,100,374 18,585,535 105.63% 2009 19,346,023 18,610,849 96.20% 833,301 19,444,150 100.51% 2010 20,058,658 19,121,096 95.33% 349,563 19,470,659 97.07% 153 CITY OF WEST COVINA Ratios of Outstanding Debt by Type Last Ten Fiscal Years Governmental Activities Fiscal Year Lease Special Tax Capital Ended Revenue Assessment Allocation Lease June 30 Bonds Bonds Bonds I Loans Obligations 2001 $ 6,800,000 46,670,000 22,055,000 707,643. 661,487 2002 $ 28,515,000 45,915,000 33,205,000 955,643 476,544 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 $ 44,980,000 43,350,000 31,500,000 22,754,013 817,731 2006 $ 44,550,000 42,345,000 30,830,000 24,940,779 572,389 2007 $ 60,570,000 41,240,000 30,140,000 27,764,353 398,483 2008 $ 59,395,000. 40,040,000 29,170,000 31,584,157 3,267,104 2009 $ 58,530,000 38,745,000 28,165,000 34,960,554 2,691,276 2010 $ 57,515,000 37,355,000 27,020,000 38,733,523 2,261,401 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 defea.sed 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 154 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 Table 11 _ Total Governmental Activities Business -Type Activities Total Certificates of Business -type Participation Activities Total Primary Government Percentage of Personal Income 2 Debt Per Capita 2 76,894,130 20,260,000 20,260,000 97,154,130 2.98% 925 1 t)9,067, 187 - - 109,067,187 3.15% 1,015 129,820,605 - - 129,820,605 3.65% 1,191 130,217,436 - - 130,217,436 3.52% 1,180 143,301,744 - - 143,301,744 3.65% 1,290 143,238,167 - - 143,238,167 3.42% 1,283 160,112,836 - 1605112,836 3.52% 1,428 163,456,261 - - 163,456,261 3.45% 1,459 163,091,830 - - 163,091,830 3.39% 1,456 162,884,924 - - 162,884,924 3.37% 1,443 155 CITY OF WEST COVINA Ratio of General Bonded Debt Outstanding Last Ten Fiscal Years (In Thousands, except Per Capita)_ Table 12 Fiscal Year Lease Special Tax Percent of Ended Revenue Assessment Allocation Assessed Per June 30 Bonds Bonds Bonds Total Value 1 Capita 2001 $ 600 46,670 22,055 75,525 1.54% 65 2002 $ 28,515 45,915 33,205 107,635 2.07% 26.5 2003 $ 31,945 45,110 32,670, 109,725 1.99% 293 2004 $ 31,735 44,255 32,155 108,145 1.82% 288 2005 $ 44;880 43,350 31,500 119,730 1.89% 404 2006 $ 44,550 42,345 30,830 117,725 1.68% 399 2007 $ 60,570 41,240 30,140 131,950 1.71% 540 2008 - $ 59,395 40,040 29,170 128,605 1.56% 5310 2009 $ 58,530 38,745 28,165 125,440 1.43% 522 2010 $ 57,515 37,355 27,020 121,890 1.42% 510 General bonded debt is debt payable with governmental fund resources and general . obligation bonds recorded in enterprise funds (of which, the City has none). 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, 156 ' CITY OF WEST COVINA Direct and Overlapping Debt Table 13, June 30, 2010 City Assessed Valuation $ 6,219,444 Redevelopment Agency Incremental Valuation 2,350,475 ' Total Assessed Valuation $ 8,569,919 Gross Bonded Percentage Net ' Debt Balance Applicable Bonded Debt Overlapping Debt: *330,10 ThreeVyMWD-1112 $ 121,475,156 0.764 $ 927,853 ' 809.50 Mt San Antonio CCD DS 2001 S-A 2,250,000 12.755 286,978 809.51 Mt San Antonio CCD DS 2004B 9,870,000 12.755 1,258,875 809.52 Mt San Antonio CCD DS 2005 Refunding Bond 61,525,843 12.755 7,847,351 809.53 Mt San Antono CD DS 01, 2006 Series C 79,695,008 12.755 10,164,749 809.54 Mt San Antonio DS 2001, 2008 Series D 25,430,293 12.755 3,243,522 ' 820.50 Baldwin Park Unified DS 96 Ser A 3,129,785 0.300 9,391 820.51 Baldwin Park USD DS 2001 Refunding Bonds 6,310,000 0.300 18,932 820.52 Baldwin Park USD DS 2002 Series 2003 510,000 0.300 1,530 820.53 Baldiwn Park USD DS 2002 Series 2004 6,802,214 0.300 20,409 ' 820.54 Baldwin Park UnifDS 2005 Refunding Bonds 10,894,403 0.300 32,687 820.55 Baldwin Park 1Jnif DS 2002 Series 2005 4,813,699 0.300 14,443 820.56 Baldwin Park USD DS 2002 Series 2006 17,618.384 0.300 52,862 820.57 Baldwin Park UnifDS 2006 Ser 2007 24,085,000 0.300 72,264 ' 820.58 Baldwin Park UnifDS 2006 Ser 2008 14,516,218 0.300 43,554 821.51 Bassett Unified DS 2004 Series 2005 A 11,353,352 0.105 11,941 821.52 Bassett Unified DS 2004 Series 2005 B 10,626,192 0.105 11,176 821.54 Bassett Unified DS 2006 Ser 2007 14,769,566 0.105 15,219 821.55 Bassett Unified DS 2006 Ser B 4,999,970 0.105 5,259 ' 847.51 Covina Valley USD DS 2001 Series A 15,055,000 31.959 4,811,405 847.52 Covina Vy USD DS 2001 Series B 22,504,403 31.959 7,192,148 847.53 Covina Vy USD DS 2006 Ser 2006 45,290,000 31.959 14,474,162 ' 847.54 870.50 Covina Vy USD DS 2006, 2007 Ser B Hacienda -La Puente USD DS 2000 Series A 18,083,829 3,474,899 31.959 1.433 5,779.383 49,789 870.51 Hacienda -La Puente USD DS 2000 S-03B 8,850,987 1.433 126,820 870.52 Hacienda -La Puente Unified DS 2005 Ref Bds 30,065,000 1.433 430,781 870.53 Hacienda -La Puente Unified DS 2007 Refund 55,330,000 1.433 792,786 918.50 Rowland Hghts USD DS 2000 Series A 3,274,562 15.086 493,985 ' 918.51 Rowland Hghts USD DS 2000 Series B 39,999,075 15.086 6,034,071 918.52 Rowland Hghts Unif DS 2005 Ref Bds 16,319,717 15.086 2,461,915 918.53 Rowland USD DS 2006 Series A 42,400,000 15.086 6,396,264 918.54 Rowland Hghts USD DS 2006 Series B 32,422,549 15.086 4,891,113 ' 918.55 Rowland Hghts USD DS 2006 Series B-Babs 12,000,000 15.086 1,810,263 980.55 Walnut Valley UnifDS Ser 1997 A 26,437,718 0.737 194,906 980.56 Walnut Valley USD DS 2000 Ser A 230,000 0.737 1,696 ' 980.58 980.59 Walnut Valley USD DS 2000 Ser C Walnut Valley USD DS 2000 Ser D 6,710,000 21,188,114 0.737 0.737 49,468 156,204 980.60 Walnut Valley USD DS 2000 Ser E 6,001,837 0.737 44,247 980.61 Walnut Valley UnifDS 2005 Ref Bds 11,705,000 0.737 86,292 980.62 Walnut Val Unif DS 2007 Ser A ( Measure S) 29,095,000 0.737 214,496 ' 980.63 Walnut ValUnif DS 2007 Ser A ( Measure Y) 7,145,887 0.737 52,681 985.53 West Covina USD DS 2000 Ser C 8,335,000 94.976 7,916,284 985.54 W Covina USD DS 2002 Ref Bd S-A 15,885,000 94.976 15,087,006 985.55 West Covina UnifDS 2000 Ser D 8,775,000 94.976 8,334,180 ' Total overlapping Debt 111,921,340 City direct debt 162,884,924 Total direct and overlapping debt $ 274,806,264 * This fund is a portion of a larger agency, and is responsible for debt in areas outside the city. Source: HdL Coren & Cone, L.A. County Assessor and Auditor Combined 2009/10 Lien Date Tax Rolls This report reflects debt which is being repaid through voter -approved property tax indebtedness. ' It excludes mortgage revenue, tar allocation bonds, interim financing obligations, non -bonded capital lease obligations, and certificates of participation, unless provided by the city. ' 157 (This page intentionally left blank) 158 CITY OF WEST COVINA Legal Debt Margin Information Last Ten Fiscal Years (in thousands of dollars) Total Net Assessed Total Net Debt Legal Fiscal Year Valuation Debt Limit Applicable to Limit Debt Margin 2001 $ 3,658,115 137,179 - 137,179 2002 $ 3,856,274 144,610 - 144,610 2003 $ 4,085,542 153,208 - 153,208 2004 $ 4,467,971 167,549 - 167,549 2005 $ 4,775,504 179,081 - 179,081 2006 $ 55279,478 197,980 - 197,980 2007 $ 5,797,458 217,405 - 217,405 2008 $ 6,200,821 232,531 - 232,531 2009 $ 6,487,195 243,270 - 243,270 2010 $ 6,219,444 233,229 - 233,229 Legal Debt Margin Calculation for Fiscal Year 2010: Assessed value $ 6,219,444 Debt limit (3.75% of assessed value) 233,229 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% Debt applicable.to limit: General obligation bonds Legal debt margin $ 233,229 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 1.5%) 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 M19 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 Julie 30 Revenue Principal Interest Coverage 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 $ 1,037 30.10 2006 $ 46,565 $ 375 $ 1,296 27.87 2007 $ 47,964 $ 2,130 $ 2,411 10.56 2008 $ 48,724 $ 1,175 $ 2,151 14.65 2009 $ 48,251 $ 865 $ 1,675 19.00 2010 $ 44,950 $ 1,310 $ 1,245 17.59 Tax Allocation Bonds Fiscal Year Ended Tax Debt Service June 30 Increment Principal Interest Coverage 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 2008 $ 18,626 970 1,406 7.84 2009 $ 19,444 1,005 1,293 8.46 2010 $ 19,564 1,207 1,207 8.10 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 160 1 1 1 1 1 1 1 1 1 1 1 1 1 1 Table 15 Assessment District Bond Fiscal Year Less Net Ended Operating Available Debt Service June 30 Revenue Expenses Revenue Principal Interest Coverage 2001 3,195 1,169 2,026 700 2,759 0.59 2002 5,214 1,21.0 4,004 755 2,722 1.15 2003 3;388 11367 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 3,995 593 3,402 1,105 2,494 0.95 2008 3,765 811 2,954 1,200 2,430 0.81 2009 3,375 333 3,042 1,295 2,358 0.83 2010 3,828 72 3,756 1,390 2,281 1.02 161 CITY 'OF WEST COVINA Table 1.6 Demographic and Economic Statistics Last Ten "Calendar Years Per Annual Personal Capita Unemployment Population Income Personal Rate Year _ (1) (in thousands) (2) Income (3) (4) 2000 105,080 $ 3,262,734 $ 31,050 4.7% 2001 107,404 $ 3,457,013 $ 32,187 5.0% 2002 108,994 $ 3,554,839 $ 32,615 5.9% 2003 110,315 $ 3,699,634 $ 33,537 6.1% 2004 111,098 $ 3,922,759 ' $ 35,309 5.7% 2005 1,11,675 $ 4,192,615 $ 37,543 4.7% 2006 11.2,113 $ 4,544;837 $ 40,538 4.2% 2007 112,009 $ .4,735,517 $ 42,278 4.4% 2008 112,022 $ 4,807,536 $ 42,916 6.6% 2009 112,880 $ 4,833,296 $ 42,818 10.2% Sources: (1) State of California, Department of Finance, E-4 Populations Estimates for Cities, Counties, and the State, 2001-2010, with 2000 Benchmark (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. 2009 data is preliminary. (4) State of California Employment Development Department Labor Market Information, Annual unemploymentrate. 162 i 1 1 1 1 1 1 1 1 1 1 1 1 1 CITY OF WEST COVINA Table 17 Principal Employers Current Year and Nine Years Ago 2001 2010 Percent of Percent of Number of " Total Number of Total Employer Employees Employment Employees Employment Queen of the Valley Campus 1,782 3.23% WC Unified School District 1,223 2.22% City of West Covina 482 0.87% Target Store #T1028 & T2147 404 0.73% Macy's Data was not available at time 271 0.49% S G V Newspaper Group of printing. 264 0.48% J C Penney Corp Inc # ' 1505-7 257 0.47% Interspace/Concorde Battery 206 0.37% B.J.'s Restaurant 201 0.36% Sears Roebuck & Company 145 0.26%. 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 163 (This page intentionally left blank) 164 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 CITY OF WEST COVINA Table 18 Full-time and Part-time City Employees by Function Last Ten Fiscal Years Full -Time and Part-time Employees as of June 30 Function 2001 2002 2003 2004 2005 2006 2061 2008 2009 2010 General govermnent 40 39 47 44 43 44 43 43 42 40 Public safety 286 291 295 297 297 296 307 307 306 295 Public works 81 82 81 81 79 79 79 79 83 78 Community services 71 70 71 65 66 63 63 63 55 47 Community development 22 21 23 23 22 22 24 24 24 23 Total 506 503 517 510 507 504 516 516 510 483 Source: City of West Covina Finance Department 165 CITY OF WEST COVINA Operating Indicators by Function Last Ten Fiscal Years Fiscal Year 2001 2002 2003 2004 2005 Police: Total arrests 4,327 4,183 3,701 3,837 3,852 Calls for Police service 1 92,200 95,546 93,822 95,654 89,340 Fire Emergency responses 6,479 6,717 7,179 7,080 7,122 Fire inspections 2,391 2,391 3,350 3,350 3,819 Public works: Building permits issued 2,800 3,079 3,510 3,830 3,798 Community Services Recreation class registrations 2,800 2,500 2,400 3,617 3,950 Environmental Management Graffiti sites cleaned 6,744 7,077 7,767 8,055 8,055 ' Calls received that generated an incident number, not necessarily a police response. Source: City of West Covina Finance Department 166 1 1 1 1 1 1 1 1 1 1 1 1 1 1 Table 19 Fiscal Year 2006 2007 2008 2009 2010 3,491 3,449 3,726 3,651 3,397 80,048 79,753 82,588 82;682 75,752 7,057 75064 7,167 7,194 6,949. 3,122 3,711 3,748 3,751 3,603 4,250 3,854 3,189 2,891 2,334 4,342 4,850 5,097 6,564 7,916 9,600 17,903 15,736 8,009 16,077 167 CITY OF WEST COVINA Capital Asset Statistics by Function Last Ten Fiscal Years Fiscal Year 2001 2002 2003 2004 2005 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: Sports Complex Parks 15 15 15 15 15 Community centers 4 4 4' 4 4 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 Source: City of West Covina 168 1 1 1 1 1 1 1 1 1 1 1 1 Table 20 Fiscal Year 2006 2007 2008 2009 2010 1 1 1 1 1 5 5 5 5 5 230.00 231.00 231.00 231.00 231.00 826 826 826 826 826 1,109 1,109 1,109 1,109 1,109 114 114 114 116 116 1 1 1 16 16 16 .16 16 4 4 4 4 4 233.00 238.90 238.90 238.90 238.90 42.00 42.00 42.00 , 42.00 42.00 169