01-17-2012 - Comprehensive Annual Financial Report for Year Ended June 30, 20119
City of West Covina
MEMORANDUM
AGENDA
TO: Andrew G. Pasmant, City Manager Item: 9
and City Council Date: January 17, M12 .
FROM: Tom Bachman, Assistant City Manager
SUBJECT: COMPREHENSIVE ANNUAL FINANCIAL REPORT FOR THE YEAR
ENDED JUNE 30, 2011
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 attached Comprehensive Annual
Financial Report of the City of West Covina (the "CAFR") for the fiscal year ended June 30,
2011.
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 White Nelson Diehl Evans, LLP, 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, 2011, 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, 2011, 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 $8.4 million, from $211.8 million to $203.4 million.
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 $1.9
million. - Property taxes decreased $35,761 (0.2%) from the fiscal year 2009-10 total. Sales tax
revenues increased by $931,068 (8.4%) for the first time after declining in the three previous
years. Franchise fees increased by $65,542 (2.1%) while business license taxes increased by
$106,998 (5.1%). Investment income decreased by $388,207 (12.7%) due to a further reduction
of fund balances and historically low interest rates. Virtually all of the City's interest income
now comes from the loans and advances to the CDC. Transient Occupancy Taxes (TOT) posted
an increase of $169,450 (16.9%). Total revenues, exclusive of fund transfers in, increased by
$2.7 million while total expenditures, exclusive of fund transfers out, decreased by $1.5 million.
An income statement for the General Fund comparing budget to actual can be found on page 25
of the report.
Government Accounting Standards Board (GASB) Statement No. 54, Fund Balance Reporting
and Governmental Fund Type Definitions, was implemented in the June 30, 2011 CAFR. The
objective of this Statement is to enhance the usefulness of fund balance information by providing
clearer fund balance classifications that can be more consistently applied and by clarifying the
existing governmental fund type definitions. ' This Statement establishes fund balance
classifications that comprise a hierarchy based primarily on the extent to which a government is
bound to observe constraints imposed upon the use of the resources reported in governmental
funds. The restricted and unrestricted components of fund balance seen in our CAFRs since
2003 have been replaced with the categories of unspendable, restricted, assigned and unassigned.
Total fund balance of the General Fund was $29.6 million, of which $8.8 was unassigned or
available for spending at the City's discretion. GASB Statement No. 54 also clarified the
definitions of the general, special revenue, capital projects, and debt service governmental fund
types. As a result, the Recreation Programs special revenue fund and the Fire Training special
revenue fund are now combined with the General Fund for financial reporting in the CAFR.
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, the West Covina Public Financing Authority and the West Covina Community
Services Foundation.
FIS IMPA T: n
Prepared by: Tom Bachman
Assistant City Manager
Attachment: June 30, 2011 Comprehensive Annual Financial Report
Comprehensive Annual Financial Report
City of West Covina, California
Fiscal Year Ended June 30, 2011
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OTY Of
WES'7
CITY OF WEST COVINA
COMPREHENSIVE ANNUAL FINANCIAL REPORT
WITH REPORT ON AUDIT
BYINDEPENDENT
CERTIFIED PUBLIC ACCOUNTANTS
FOR THE YEAR ENDED JUNE 30, 2011
Prepared By:
City of West Covina Finance Department
Thomas Bachman
Assistant City Manager/Finance Director
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• CITY OF WEST COVINA •
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TABLE OF CONTENTS
For the year ended June 30, 2011
INTRODUCTORY SECTION:
Letter of Transmittal
City Officials
Organization Chart
Certificate of Achievement for Excellence in Financial Reporting
FINANCIAL SECTION:
Independent Auditors' Report
Managements' Discussion and Analysis
(Required Supplementary Information)
Basic Financial Statements:
Government -Wide Financial Statements:
Statement of Net Assets
Statement of Activities
Fund Financial Statements:
Governmental Funds:
Balance Sheet
Reconciliation of the Governmental Funds Balance Sheet
to the Statement of Net Assets
Statement of Revenues, Expenditures and Changes in Fund Balances
Reconciliation of the Governmental Funds Statement of Revenues,
Expenditures and Changes in Fund Balances to the Statement of Activities
Statement of Revenues, Expenditures and Changes in Fund Balances -
Budget and Actual - General Fund
Proprietary Funds:
Statement of Net Assets
Statement of Revenues, Expenses and Changes in Fund Net Assets
Statement of Cash Flows
Fiduciary Funds:
Statement of Fiduciary Assets and Liabilities
Notes to Basic Financial Statements
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Page
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xvi
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• CITY OF WEST COVINA •
TABLE OF CONTENTS
(CONTINUED)
For the year ended June 30, 2011
Page
Number
REQUIRED SUPPLEMENTARY INFORMATION:
87
Schedules of Funding Progress:
Ca1PERS Safety Pension Plan
89
CalPERS Miscellaneous Pension Plan
89
EPMC Replacement Supplemental Retirement Plan
89
Supplemental Retirement Plan for Executive Staff
90
Other Post -Employment Benefit Plan
90
SUPPLEMENTARY INFORMATION:
Supplementary Schedules: 91
Other Governmental Funds: 93
Combining Balance Sheet 94
Combining Statement of Revenues, Expenditures and
Changes in Fund Balances 95
Other Special Revenue Funds:
96
Combining Balance Sheet
98
Combining Statement of Revenues, Expenditures and
Changes in Fund Balances
104
Schedules of Revenues, Expenditures and Changes in
Fund Balance - Budget and Actual:
Recreation Programs Fund
110
Drug Rebate Enforcement Fund
III
Business Improvement Tax Fund
112
Air Quality Improvement Fund
113
Proposition A Fund
114
Proposition C Fund
115
Traffic Safety Fund
116
Sate Gas Tax Fund
117
Traffic Congestion Relief Fund
118
Police Special Programs Fund
119
Transportation Development Act Fund
120
AB939 Fund
121
Grants Fund
122
Community Development Block Grant Fund
123
Tree Fund
124
Inmate Welfare Fund
125
Public Safety Fund
126
COPS Grant Fund
127
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CITY OF WEST COVINA
•
TABLE OF CONTENTS
(CONTINUED)
For the year ended June 30, 2011
' Page
Number
' SUPPLEMENTARY INFORMATION (CONTINUED):
Supplementary Schedules (Continued):
' Other Special Revenue Funds (Continued):
Schedules of Revenues, Expenditures and Changes in
Fund Balance - Budget and Actual (Continued):
' Special Assessments Fund 128
Charter Cable Fund 129
Arts in Public Places Fund 130
' North Azusa Relinquishment Fund 131
Fire Training Fund 132
Measure R Fund 133
' Integrated Waste Management Fund 134
West Covina Community Services Foundation Fund 135
Major Debt Service Funds: 137
Schedules of Revenues, Expenditures and Changes in
Fund Balance - Budget and Actual:
City Fund 138
Community Development Commission Fund 139
Other and Major Capital Projects Funds: 141
Combining Balance Sheet 142
Combining Statement of Revenues, Expenditures and
Changes in Fund Balances 143
Schedules of Revenues, Expenditures and Changes in
' Fund Balance - Budget and Actual:
City Fund - Major Fund 144
Community Development Commission Fund - Major Fund 145
' Construction Tax Fund 146
Park Development Fund 147
Internal Service Funds: 149
Combining Statement of Net Assets 150
Combining Statement of Revenues, Expenses and Changes
in Fund Net Assets 152
Combining Statement of Cash Flows 154
1 Agency Fund: 157
Statement of Changes in Assets and Liabilities 158
• CITY OF WEST COVINA •
TABLE OF CONTENTS
(CONTINUED)
For the year ended June 30, 2011
Page
Table Number
STATISTICAL SECTION:
Description of Statistical Section Contents 159
Financial Trends:
Net Assets by Component 1 160
Changes in Net Assets 2 162
Changes in Net Assets - Governmental Activities 3 166
Changes in Net Assets - Business -type Activities 4 168
Fund Balances of Governmental Funds 5 170
Changes in Fund Balances of Governmental Funds 6 172
Revenue Capacity:
Assessed Value and Estimated Actual Value of Taxable Property
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Direct and Overlapping Property Tax Rates
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Principal Property Taxpayers
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Property Tax Levies and Collections
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180
Debt Capacity:
Ratios of Outstanding Debt by Type
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182
Ratio of General Bonded Debt Outstanding
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Direct and Overlapping Debt
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185
Legal Debt Margin Information
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Pledged Revenue Coverage
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188
Demographic and Economic Information:
Demographic and Economic Statistics
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Principal Employers
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Operating Information:
Full -Time and Part -Time City Employees by Function
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Operating Indicators by Function
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Capital Asset Statistics by Function
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•
— Finance Department
January 11, 2012
' To the Members of the City Council, the City Manager, and the Citizens of the City of West
Covina:
It is the policy of the City of West Covina to annually publish a complete set of financial
statements presented in conformity with generally accepted accounting principles (GAAP) and
audited in accordance with generally accepted auditing standards by a firm of certified public
accountants. Pursuant to that policy, we hereby issue the comprehensive annual financial
statements of the City of West Covina ("the City") for the fiscal year ended June 30, 2011.
' This report consists of management's representations concerning the finances of the City.
Management assumes full responsibility for the completeness and reliability of all the
information presented in this report. To provide a reasonable basis for making these
' representations, management of the City has established a comprehensive internal control
framework that is designed both to protect the City's assets from loss, theft, or misuse and to
' compile sufficient reliable information for the preparation of the City's financial statements in
conformity with GAAP. Because the cost of internal controls should not outweigh their benefits,
the City's comprehensive framework of internal controls has been designed to provide
reasonable rather than absolute assurance that the financial statements will be free from material
misstatement. As management, we assert that, to the best of our knowledge and belief, this
financial report is complete and reliable in all material respects.
The City's financial statements have been audited by White Nelson Diehl Evans, LLP, a firm of
certified public accountants. The goal of the independent audit was to provide reasonable
1 assurance that the financial statements of the City for the fiscal year ended June 30, 2011, 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, 2011, are fairly presented in conformity with
GAAP. The independent auditors' report is presented as the first component of the financial
section of this report.
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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 106,000. 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 November 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
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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 Cityof West Covina is a largely residential city that has a large commercial section along
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' 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 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. While both of these revenue sources have been
impacted by the recession, the timing of those impacts have been different and they performed in
' opposite directions during the fiscal year.
After three years of declining revenues in which total sales tax revenues were down 24%, sales
tax revenues showed an 8.4% increase in 2010-1.1. While this was a positive sign that this
revenue source has turned around, sales tax revenue is still 16% below its peak level reached in
2006-07. Property taxes on the other hand, started its decline later than sales tax and declined
' for the second straight year in 2010-11, dropping 1.4%. The drop in property taxes has not been
as severe as sales tax, declining 5.3% over the two-year period. It appears that property taxes
have bottomed out as well, although there is still a large backlog of commercial property tax
appeals pending with the county that could further effect property tax revenues. Both revenues
are projected grow to slowly over the next couple of years.
' Like many of cities throughout the state and the nation, the City was hit hard with store closures
in its commercial areas. More recently however, the City has seen a steady flow of construction
and new commercial stores and restaurants opening in the City. While some of these
' developments include new construction, many of these openings are the result of re -tenanting of
the previously vacant buildings. One of the construction projects was a new hotel that opened
during the fiscal year. This hotel contributed to a 17% increase in transient occupancy taxes
' during the 2010-11 year, after two years of sharp declines in which TOT revenues were down
39%.
' Other major revenue source trends include a decline in interest income from $4.1 million in
2007-08 to $2.3 million in 2010-11 due to the reduction of available fund balance and
historically low interest rates. Virtually all of the City's interest income now comes from the
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loans to the redevelopment agency. Administrative and overhead charges to other funds have
declined from $2.1 million in 2008-09 to $1.4 million in 2010-11. These downward trends for
interest income and A & O charges are expected to be permanent. Other revenues, including
building permits, showed double-digit gains during the fiscal year, but much like sales tax,
remain far below their pre -recession levels. In all, total revenues were down by $466,875 (0.9%)
from the previous year. That total revenue decline was due to the loss of $1.75 million dollars in
onetime revenue in 2009-10 that was offset to a large extent by increases in revenues mentioned
above.
While many of the City's revenue sources have begun to turn around, it has been a long time
coming and will still take several more years to reach pre -recession levels. The City's efforts to
assist businesses in growing jobs, revitalizing the economy, and increasing the tax base have
been severely hampered in recent years as the state has taken $8 million from the redevelopment
agency in the last two years in an effort to address its own fiscal woes. This outlook gets even
more bleak with the likelihood of a severe contraction, or worse, total elimination of
redevelopment activities due to actions taken by the state.
Long-term 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 projection has played out pretty much as expected and the 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 mentioned above, staff took a similar approach in preparing
the 2011-12 Fiscal Year Budget by having the Finance Department create a rollover budget that
contained the same level of authorized personnel as was in the 2010-11 Budget but using 2011-
12 costing, and the same dollar amount for supplies and services (non -personnel) budgets. The
2011-12 personnel costs included contractually obligated salary increases for both the police
(6% and additional special pays) and fire (5%) departments' sworn personnel. The City had
previously reduced service levels over the three prior years, while reducing staffing from a high
of 445 full time employees in 2007-08 down to 388 in 2010-11. This reduction in service and
staffing levels continued in 2011-12 and impacted most funds in the City and the CDC budgets
This rollover approach produced an initial $7.3 million deficit in the City's General Fund. The
large deficit in the rollover budget was mainly due to increases in pension costs ($1.6 million),
public safety salary increases ($1.3 million), the end of miscellaneous employee furloughs
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($404,000), reinstating the budget for one ALS ambulance ($315,000), and medical premium
increases ($313,000). The increase in pension is the first of three increases that will take place
through 2013-14 as a result of the stock market losses in the Ca1PERS system.
In order to reduce the $7.3 million deficit, $5.5 million in deficit reducing measures were
' implemented. These cuts further reduced service levels and included concessions from the
miscellaneous employees to pay the entire employee contribution to CalPERS. The proposed
cuts also included reductions in all non -safety departments, fire department cuts totaling
$284,000 along with a grant to provide additional firefighter staffing and the return of Engine 4
while saving the City an additional $825,000, and police department cuts totaling $2.8 million.
The reductions will continue the downsizing of the City's workforce and will result in the
elimination of 23 full time and 5 part-time positions, including fourteen sworn police positions
and nine non -sworn positions. The City was awarded a FEMA hiring grant that provided for an
' increase of 6 firefighter positions and the return of Engine 4 back into service. The grant is for a
two-year period and those firefighter positions are only guaranteed employment for the period of
the grant. It was the continued intent of these proposals to avoid layoffs and that all eliminated
' positions will be absorbed through currently funded vacant positions and future retirements.
Authorized full time employee staffing in now down to 371.
' The 2011-12 Adopted General Fund Budget includes $51.6 million of estimated revenues and
$53.5 million of appropriations, resulting in a revised $1.9 million deficit. Revenues in 2011-12
are projected to increase by 4.8 percent over the 2010-11 estimates while expenditures are
projected to increase by 1.3 percent over the 2010-11 budget.
While the City has made substantial cuts to all departments including public safety, and has now
' eliminated a total of 80 full-time positions without layoffs over the last four years, the General
Fund budget gap is projected to grow in the next couple of years. While the recession has ended,
the economy is still very sluggish with a still high unemployment rate and weaknesses in both
' the housing and consumer spending markets. Revenue growth is expected to be slow and the
City will face growing costs of our basic services due to increases in pension costs. Absent a
new revenue source, which is unlikely at this time given the state of the economy and the
negative public sentiment towards government, it is anticipated that the City will need to make
significant reductions to the costs of services in the upcoming years. These reductions are
necessary due to the City's use of reserve funds in recent years, which have reduced the cash
reserves to precariously low levels given the City's negative cash flow during the first half of
each fiscal year.
Relevant financial policies
Pension Costs
' Due to the significant losses experienced in the Ca1PERS investment portfolio as a result of the
downturn in the stock market, pension contribution rates will increase drastically over a three-
year period beginning in 2011-12. Ca1PERS has projected that over that three-year period the
City's rate will approach 45% of pay for safety members and approximately 23% for
miscellaneous employees, and continue at this elevated level into the foreseeable future. To
offset the increased cost due to these higher rates, the City has taken the first step towards
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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. In addition, all miscellaneous employees now pay the entire 8% employee
contribution, which had been previously been paid by the City. This second tier will provide
long-term savings for pension costs, while having the employees pay their own share of pension
provides immediate savings and offsets the increased costs of the higher contribution rates. 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 the majority of the pension costs exists within the public safety units.
Retiree Medical Costs
West Covina, as well as other cities throughout California, also faces an additional issue in
funding retirement benefits. The City had a biennial actuarial valuation performed as of June 30,
2009, in compliance with GASB 45 that determined the City has a $45 million unfunded liability
for retiree medical benefits. Due to the fact that medical costs consistently rise faster than
normal CPI, keeping up with these cost increases in the future will be increasingly challenging
and if limits are not put in place on this benefit, this will start to consume an increasingly larger
portion of the budget. Although these benefits are currently funded on a pay-as-you-go basis,
the City will explore pre -funding this liability, which will ultimately reduce the long-term cost of
the benefit, as well as cost sharing with the employees of the bargaining units that receive this
benefit.
Cash Flow
The City's cash position at the end of the 2011-12 fiscal year is projected to be $6 million. The
City annually runs a negative cash flow for the first five months of each fiscal year to the tune of
approximately $12 million. This is due to the fact that the City's largest revenue source,
property tax, does not start flowing into the City until December. Additionally, due to actions by
the state such as the Triple Flip and the exchange of VLF for property taxes, these two large
revenue sources do not start flowing into the City until January of each fiscal year.
In the past the City has been able to rely on internal borrowing from the Liability and Workers'
Comp internal service funds to cover the negative cash flow, but due to lower reserves in those
funds, they can no longer cover the negative cash flow. Additionally, the City must provide cash
flow financing for some of its maintenance districts such as the Citywide Maintenance District
and the Sewer Maintenance District because those districts do not have sufficient reserve funds
to cover their negative cash flow. The City issued $9 million in short-term revenue anticipation
notes (TRANS) during the current year in order to meet its cash flow needs. As short-term
borrowing may become much more difficult and more expensive in the future as investors
become wary of cities with a history of deficit spending and dwindling reserves, the City will
move toward balanced budgets as part of its restructuring plans.
Capital Requirements
As the City has struggled to produce balanced budgets in recent years, many of the City's capital
needs have been deferred. General Fund spending on capital items has not occurred for several
years and reserves that otherwise could have been used for onetime capital needs, have instead
been used for operating purposes. While much of the focus has been on balancing the budget,
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' provisions for funding capital needs will also be considered when developing a plan for the
future.
Major Initiatives
' Structural Imbalance
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. It is
' projected that it will be a number of years before cities will have the level of resources that
existed before the recession. Therefore, the City's current business model for funding
government services is not sustainable in the foreseeable future. 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.
' Redevelopment Agency Funding
With the very real possibility of the elimination of redevelopment agencies, the City will not
only lose its only economic development tool, it stands to lose a number of resources that
support the City's General Fund. $21.5 million, or 75% of the City's General Fund reserve, is
currently loaned to the redevelopment agency. If this debt is eliminated as part of the
elimination of redevelopment agencies, this would reduce annual General Fund revenues by $2
' million and leave the General Fund with only $6 million in reserves. There are also a number of
other cost sharing and revenue generating agreements between the City and the redevelopment
agency that would be impacted by the elimination of redevelopment. For these reasons, the City
' will participate in legislation to save redevelopment in some form as well as protect the City's
various agreements with the redevelopment agency.
Tax initiative
West Covina is the only City in Los Angeles County with a population between 80,000 and
140,000 that provides both police and fire protection services, yet has no utility users tax or other
' locally dedicated tax. While this structure has been able to work in the past, the City's per capita
spending has always been among the lowest in the state for cities of this size and this structure
will be hard to maintain in the future as the City's cost structure has changed in recent years,
particularly in the area of pension costs. If it is the desire to retain both local public safety
departments, it will be necessary to consider some form of a locally dedicated tax
Fire Department
The City has made substantial reductions to the Fire Department budget over the last couple of
years, reducing the number of sworn personnel from 80 members down to 62. The City was able
' to receive grant funding to increase staffing and put an engine company back in service that was
previously eliminated in the 2010-11 budget. This grant, however, only provides funding for two
years. It will only become more difficult in the future for the City to retain its own fire
department due to increasing costs of public safety personnel and equipment and the City's lack
of funding resources and the City will need to consider all options for providing these services.
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Economic Development
While the City has suffered significant reduction of redevelopment resources with which to
assist economic development, developers are starting to invest in some of the major commercial
developments in an effort to re -tenant vacant 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 awarded the Most
Business Friendly City with a population over 60,000 as awarded by the Los Angeles Economic
Development Corporation. This award was a testament to the City's low taxes and building fees,
it's aggressive past redevelopment activities, and a willingness to encourage and cooperate with
business development in the City. Some of those projects currently underway include the
continued expansion of the Westfield Mall, repositioning of the Eastland Shopping Center, and
the redevelopment of the Country Club shopping center. The success of these projects is a
critical component to the City's tax base and ability to fund public services, as they are located
in the heart of the City's commercial center.
Interstate 10 Freeway Widening
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 nearing completion. The second phase is currently
in the planning stages and will continue from the western boundary of the City to near the
eastern boundary. This expansion, which is slated to begin in late 2012, 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 a requirement for
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, 2010. 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
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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
' manner.
Respectfully submitted,
Thomas Bachman
Assistant City Manager
CITY OF WEST COVINA
City Officials
June 30, 2011
CITY COUNCIL
Mayor Michael Touhey
Mayor Pro Tem Sherri Lane
Councilmember Steve Herfert
Councilmember Shelley Sanderson
Councilmember Fredrick Sykes
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
Vacant
Community Services Director
Paul Segalla
Fire Chief
Frank Wills
Police Chief
Shannon Yauchzee
Public Works Director
Erin Hoppe
Risk Management Director
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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, 2010
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 government accounting
and financial reporting.
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AM
MMN s President
Executive Director
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INDEPENDENT AUDITORS' REPORT
Honorable Mayor and City Council
City of West Covina
West Covina, California
We have audited the accompanying financial statements of the governmental activities, the
business -type activity, each major fund, and the aggregate remaining fund information of the City of
' West Covina, as of and for the year ended June 30, 2011, which collectively comprise the City's basic
financial statements as listed in the table of contents. These financial statements are the responsibility
of the City of West Covina's management. Our responsibility is to express opinions on these financial
' statements based on our audit.
We conducted our audit in accordance with auditing standards generally accepted in the United States
of America and the standards applicable to financial audits contained in Government Auditing
Standards issued by the Comptroller General of the United States. Those standards require that we
plan and perform the audit to obtain reasonable assurance about whether the financial statements are
free of material misstatement. An audit includes consideration of internal control over financial
reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for
the purpose of expressing an opinion on the effectiveness of the City's internal control over financial
reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test
basis, evidence supporting the amounts and disclosures in the financial statements, assessing the
accounting principles used and significant estimates made by management, as well as evaluating the
toverall financial statement presentation. We believe that our audit provides a reasonable basis for our
opinions.
' In our opinion, the financial statements referred to above present fairly, in all material respects, the
respective financial position of the governmental activities, the business -type activity, each major fund,
' and the aggregate remaining fund information of the City of West Covina, as of June 30, 2011, and the
respective changes in financial position, and cash flows, where applicable, and the budgetary
comparison for the General Fund of the City of West Covina, for the year then ended in conformity
with accounting principles generally accepted in the United States of America.
As described in Note 21, the City has implemented the provisions of Governmental Accounting
Standards Board Statement Number 54, "Fund Balance Reporting and Governmental Fund Type
Definitions", for the year ended June 30, 2011
-1-
2875 Michelle Drive, Suite 300, Irvine, CA 92606 • Tel: 714.978.1300 • Fax: 714.978.7893
1 Offices located in Orange and San Diego Counties
As explained further in Note 28, the California State Legislature has enacted legislation that is intended
to provide for the dissolution of redevelopment agencies in the State of California.
In accordance with Government Auditing Standards, we have also issued our report dated
January 11, 2012 on our consideration of the City of West Covina's internal control over financial
reporting and our tests of its compliance with certain provisions of laws, regulations, contracts and
grant agreements and other matters. The purpose of that report is to describe the scope of our testing
of internal control over financial reporting and compliance and the results of that testing, and not to
provide an opinion on the internal control over financial reporting or on compliance. That report is an
integral part of an audit performed in accordance with Government Auditing Standards and should be
considered in assessing the results of our audit.
The management's discussion and analysis, and the schedules of funding progress, listed in the table of
contents as required supplementary information, are not a required part of the basic financial
statements but are supplementary information required by the accounting principles generally accepted
in the United States of America. This information is an essential part of financial reporting for placing
the basic financial statements in an appropriate operational, economic or historical context. We have
applied certain limited procedures to the management's discussion and analysis and the schedules of
funding progress in accordance with auditing standards generally accepted in the United States of
America, which consisted of inquiries of management about the methods of preparing the information
and comparing the information for consistency with management's responses to our inquiries, the basic
financial statements, and other knowledge we obtained during the audit of the basic financial
statements. We do not express an opinion or provide any assurance on the management's discussion
and analysis because the limited procedures do not provide us with sufficient evidence to express an
opinion or provide any assurance.
Our audit was conducted for the purpose of forming opinions on the financial statements that
collectively comprise the City of West Covina's basic financial statements as a whole. The
introductory section, supplementary information and statistical section, as listed in the table of
contents, are presented for purposes of additional analysis and are not a required part of the basic
financial statements. The supplementary information is the responsibility of management and was
derived from and relate directly to the underlying accounting and other records used to prepare the
basic financial statements. The supplementary information has been subjected to the auditing
procedures applied in the audit of the basic financial statements and certain additional procedures,
including comparing and reconciling such information directly to the underlying accounting and other
records used to prepare the basic financial statements or to the basic financial statements themselves,
and other additional procedures in accordance with auditing standards generally accepted in the United
States of America. In our opinion, the supplementary information is fairly stated in all material
respects in relation to the basic financial statements taken as a whole. The introductory section and
statistical section have not been subjected to the auditing procedures applied in the audit of the basic
financial statements and, accordingly, we express no opinion or provide any assurance on them.
January 11, 2012
Irvine, California
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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, 2011.
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, 2011, the City's total net assets (excess of assets over liabilities) were
$203 million.
• The City's total net assets decreased $8.4 million. The decrease was the result of the
deficits in certain funds, including a $1.9 million deficit in the General Fund caused by
the loss of a one-time transfer in of $1.5 million that offset increases in other revenue
sources and a continuing structural deficit due to rising labor costs, and depreciation of
the City's capital assets including buildings, equipment and vehicles, and infrastructure.
• As of June 30, 2011, The City's governmental funds reported combined ending fund
balances of $65.1 million, a decrease of $1.1 million from the prior year. Approximately
$8.8 million of this total amount is available for spending at the City's discretion.
• As of June 30, 2011, unassigned fund balance for the General Fund was $8.8 million, or
17% of total General Fund expenditures.
• The City's total debt had a net decrease of approximately $.7 million during the current
fiscal year. The net decrease is attributable to an increase in developer agreement
payable of $3.1 million, an increase in the net OPEB obligation of $2.0 million, and an
increase in the amount due to Los Angeles County by the CDC of $673,863, that were
offset 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 he 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
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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
1 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.
Reportingthe he 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
1 for their intended purposes.
GOVERNMENT -WIDE FINANCIAL STATEMENTS
rAs noted earlier, net assets may serve over time as a useful indicator of a government's financial
position. At June 30, 2011, net assets for the City of West Covina were $203,425,964.
IA summary of the government -wide statement of net assets at June 30, 2011 follows:
Table 1
Net Assets
Governmental Activities Business -type Activities Total
2011 2010 2011 2010 2011 2010
Current and other assets
145,131,301
147,044,445
(736,316)
(800,212)
144,394,985
146,244,233
Capital assets
249,273,406
256,966,770
-
42,073
_ 249,273,406
257,008,843
Total Assets
394,404,707
404,011,215
(736,316)
(758,139)
393,668,391
403,253,076
Long-term debt outstanding
183,696,889
182,938,974
212,284
243,008
183,909,173
183,181,982
Other liabilities
6,282,230
8,198,187
51,024
85,390
6,333,254
8,283,577
Total Liabilities
189,979,119
191,137,161
263,308
328,398
190,242,427
191,465,559
Net Assets:
Invested in capital assets,
'
net of debt
Restricted
179,236,866
25,286,909
184,338,106
18,316,134
-
42,073
179,236,866
25,286,909
184,380,179
18,316,134
Unrestricted
(98,187)
10,219,814
99( 9,624)
(1,128,610)
(1,097,811)
9,091,204
Total net assets
204,425,589
212.874.054
999 24
(1.086.537)
203.425,964
211.787. 111
$179,236,866 (88.1%) 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
$25,286,909 (12.4%) of net assets represents resources that are subject to external restrictions on
how they may be used. There is a resulting deficit balance of-$1,097,811 (45%) 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, 2011
follows:
Table 2
Changes
in Net Assets
Governmental Activities
Business -type Activities
Total
2011
2010
2011 2010
2011
2010
Revenues
Program revenues:
Charges for services
13,704,866
13,314,578
2,268,982 2,193,037
15,973,848
15,507,615
Operating contributions and
grants
10,189,050
5,157,956
- -
10,189,050
5,157,956
Capital contributions and
grants
678,827
3,574,609
- -
678,827
3,574,609
General revenues:
Property taxes
30,888,074
27,681,291
- -
30,888,074
27,681,291
Sales taxes
12,550,157
7,791,286
- -
12,550,157
7,791,286
,
Other taxes
8,608,403
8,486,367
- -
8,608,403
8,486,367
Other general revenues
7,306,262
7,958,878
(95,934) (93,032)
7,210,328
7,865.846
Total revenues
83,925,639
73,964,965
2,173,048 2,100,005
86,098,687
76,064,970
Expenses
General government
2,922,898
3,337,547
- -
2,922,898
3,337,547
Public safety
45,253,725
48,151,398
- -
45,253,725
48,151,398
Public works
21,052,423
21,054,241
- -
21,052,423
21,054,241
Community services
6,629,292
6,558,987
- -
6,629,292
6,558,987
Community development
9,414,730
8,619,004
- -
9,414,730
8,619,004
Interest expense
7,101,037
6,577,544
- -
7,101,037
6,577,544
Computer service
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-
2,086,135 2,507,498
2,086,135
2,507,498
Total expenses
92,374,105
94,298,721
2,086,135 2,507,498
94,460,240
96.806.219
Increase (decrease) in net assets
(8,448,466)
(20,333,756)
86,913 (407,493)
(8,361,553)
(20,741,249)
Beginning net assets, as restated
212,874,054
233,207,810
(1,086,537) (679,044)
211,787,517
232,528,766
Ending net assets (deficit)
204.425.588
212,874,054
9( 99.6241 (1.086.5371 203,425,964 211,787.517
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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 $8,361,553 during the fiscal year. Governmental activities net assets
decreased by $8,448,466 (3.0%) during the fiscal year while business -type activities net assets
increased by $86,913 (3.0%). 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.
Governmental Activities
Some of the more significant changes in the revenues and expenses of the City's governmental
activities presented above are as follows:
• Property tax revenue, net of pass-throughs, increased by $3.2 million (11.6%) during the
fiscal year due to a much smaller SERAF payment to counties mandated by the state budget
this year, compared to the prior year. City gross property taxes decreased by 0.2%, while
CDC gross property taxes were essentially flat.
• Sales tax, the City's second largest revenue source, finally started to rebound after three
straight years of decreases in which this revenue source declined by 24%. Government wide
sales tax, net of offsets, increased by approximately 8%.
• Franchise taxes increased by $65,542 (2.1%).
• Interest Income continued its decline, decreasing by $95,256 (29.7%) due to a further
reduction of fund balances and historically low interest rates.
• Overall Government Activities expenses decreased by $1,924,616 (2.0%).
• General Government costs decreased by $414,649 (12.4%).
• Public Safety costs decreased by $2,897,673 (6.0%).
• Community Development costs increased by $789,960 (9.2%) due to increased costs for a
senior housing project.
• Net Interest expense increased by $523,493 (8.0%).
Revenues by Source — Governmental Activities
Capital grants and contributions
Investment inc
5%
Motorvel
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Expenses by Function — Governmental Activities
Community develop
10%
Community services
7%
Put
Business-TVne Activities
Interest expense General government
10% 3%
Public safety
47%
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 $75,945 (3.5%) from $2,193,037 in 2009/10 to $2,268,982
in 2010/11. Expenses and transfers out decreased by $418,569 (16.1%) from $2,600,638 in
2009/10 to $2,182,069 in 2010/11.
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 $75,945.
• The City computer service enterprise operating expenses decreased by $421,363, while
transfers out increased by $2,794.
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Expenses and Program Revenues — Business -type Activities
2,500,000
2,000,000
1,500,000
1,000,000
500,000
Computer service
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, unassigned fund balance of the General Fund was $8,786,221,
while total fund balance was $29,613,277. 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. Unassigned fund balance represents 17% of total general fund expenditures, while
total fund balance represents 57% 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, increased by $2,495,043 while total expenditures,
exclusive of fund transfers out, decreased by $1,676,329.
• Total taxes were up $1,114,914 (3.2%) from the prior year. Property taxes decreased by $35,761
(0.2%). There are still a large number of commercial appeals pending with the county that may
in the future affect the VLF in lieu portion of property taxes, which is adjusted based on changes
in total assessed valuation within the City. Sales tax revenues increased by $931,068 (8.4%) for
the first time after declining in the three previous years. Sales tax, at $11,974,841 in 2010/11, is
still 16% below its high of $14.2 million in 2006/07. Franchise taxes increased by $65,543
(2.1 %) while business license taxes increased by $106,998 (5.1 %). Transient occupancy taxes
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(TOT) finally turned around and posted an increase of $109,450 (16.9%). TOT revenues, like
sales tax, experienced a large increase during the year, but at $756,573, still remain way below
(28.5%) their previous high of $1,057,734 in 2007/08.
• Investment income continued its decline by $388,207 (12.7%) 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.
• Interfund revenues decreased by $227,280 (14.1%) due to an adjustment to the City's
administrative chargebacks to other funds.
• Transfers in decreased by $1,451,517 (46.5%) due to onetime transfers totaling $1.75 million in
the prior year.
• General government expenditures decreased by $407,072 (8.9%).
• Public safety costs decreased by $2,146,815 (5.0%) as increased pension and benefits costs were
offset by significant reductions in staffing.
• Public Works expenditures decreased by $266,932 (5.7%).
• Transfers out increased by $775,155 due to an increase in the amount transferred to the City
Debt Service Fund.
The City Debt Service Fund finished the fiscal year with a total fund balance of $18,353,658,
down from $18,777,417 in the prior year due to increased principal payments the various bond
issues. 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
$11,062,107, up from a deficit of $10,556,457 in the prior year. The increase was due to the end
of Los Angeles County's deferral of 50% of their property tax share in the Eastland Amendment
1 Project Area. The end of the deferral resulted an increase in pass -through payments to the
county of $1.3 million. The deficit is due to $16,521,409 of advances from the General Fund.
These advances will be repaid to the General Fund from future property tax increment revenues.
Property tax revenue decreased by $22,115 (0.1 %) from the prior year while debt service
expenditures and transfers out decreased by $3,953,118 (19.9%) due to the much smaller SERAF
payment in 2010-11.
The City Capital Projects Fund finished the year with a fund balance of $1,300,258, down
slightly from $1,356,923 in the prior year. The majority of the fund balance in this fund has
been previously appropriated for future capital projects.
The Community Development Commission Capital Projects Fund finished the fiscal year
with a total fund balance of $13,978,623, down $101,243 from $13,877,380 in the prior year.
The majority of that amount is reserved for low and moderate -income housing programs. Total
revenues, which consist mainly of interest income and repayment of loans in the housing fund,
increased by $1,138,282 (126.8%) due to a large settlement payment of $1 million to the CDC
related to ongoing litigation. Investment income decreased by $87,033 (48.3%), due to a large
amount of the housing fund reserve being spent down on a senior housing project. Revenue
from loan repayments increased by $117,270 (29.3%) from the prior year. Expenditures
increased by $2,120,463 (31.1 %) due to expenditures related to that senior housing project.
1
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10
GENERAL FUND BUDGET
There were only minor changes to the budget during the fiscal year. Those differences relate to
$118,021 of carryover of appropriations from the prior year. .
Taxes in total exceeded their budget by $ 1,038,934. Property taxes exceeded their budget by
$946,376, mainly in the areas of secured taxes and the Supplemental in Lieu of VLF taxes. Sales
tax revenues exceeded their budget by $496,459 and business license taxes exceeded their
budget by $232,985. These increases were partially offset by shortfall in franchise, documentary
transfer, and contractors' license taxes. The City's administrative charges to non -General Fund.
budget was short $616,638 of budget as the City has downsized its operations in recent years and
has substantially less overhear to be recovered. On the expenditure side, many departments were
under budget due to vacant positions being frozen in anticipation of further staffing reductions,
twith the police department coming in $1.3 million (5.1%) under budget. The City Clerk budget
was over by $48,424 due to increased animal control housing costs and the Fire Department was
over budget $743,324 (5.1 %) due to the City's inability to implement budget reducing measures
' additional overtime costs.
I CAPITAL ASSETS
Capital Assets
(net of depreciation)
' Governmental Activities Business -type Activities Total
2011 2010 2011 2010 2011 2010
Land 54,572,073 54,572,073 - - 54,572,073 54,572,073
1 Buildings and improvements 75,866,991 77,745,604 - - 75,866,991 77,745,604
Equipment and vehicles 7,875,963 5,232,310 - 42,073 7,875,963 5,274,383
Infrastructure 91,398,136 93,675,229 - - 91,398,136 93,675,229
Rights of way 14,376,498 14,376,498 - - 14,376,498 14,376,498
Construction in progress 5,183,745 11,365,056 - 5,183,745 11,365,056
Total 249,273,406 256,966,770 - 42,073 249.273.406 257.008.843
1 The major additions to capital assets during the year ended June 30, 2011 are as follows:
• Construction in progress had a net decrease of $6,181,311. The $5.2 million currently in
progress includes the following:
• Major Street Rehabilitation Projects ($1.5 million)
• Energy Efficiency Upgrade Projects ($662,326)
• Street Median/Landscaping Projects (709,983)
• Park Improvements ($1.7 million)
0 0
• Completed fixed asset additions of $6,950,943 included:
• Major Street Rehabilitation Projects ($4.2 million)
• Public Safety Radio System ($3.7 million)
Additional information on the City of West Covina's capital assets can be found in note 8 on
pages 52 — 53 of this report.
LONG-TERM DEBT
At the end of the current fiscal year, the City had debt outstanding of $183,696,889. Of this
amount, $117,800,000 represents outstanding bonds and $65,896,889 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, $51,940,000 comprises
lease revenue bonds secured by leases from the General Fund, $29,990,000 of bonds secured by
tax increment revenues of the Community Development Commission including the housing set -
aside funds, and $35,870,000 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
2011 2010
$ 56,115,000
35,870,000
25,815,000
117,800. 000
57,515,000
37,355,000
27,020,000
121.890.000
The City maintains an "A+/A-1" rating from Standard & Poor's for its lease revenue bonds.
Additional information on the City of West Covina's long-term debt can be found in notes 9 - 19
on pages 53 — 71 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.
12
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1
BASIC FINANCIAL STATEMENTS
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11
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-14- 1
CITY OF WEST COVINA •
STATEMENT OF NET ASSETS
June 30, 2011
ASSETS:
Cash and investments
Cash and investments with fiscal agent
Receivables, net:
Accounts
Taxes
Interest
Assessments
Notes and loans
Internal balances
Due from other agencies
Inventory
Prepaids and other assets
Land held for resale
Capital assets:
Nondepreciable
Depreciable, net of accumulated depreciation
TOTAL ASSETS
LIABILITIES:
Accounts payable
Other accrued liabilities
Due to other governments
Interest payable
Deposits
Long-term liabilities:
Due within one year
Due in more than one year
TOTAL LIABILITIES
NET ASSETS (DEFICIT):
Invested in capital assets, net of related debt
Restricted for:
Public safety
Public works
Community services
Community development
Unrestricted
TOTAL NET ASSETS (DEFICIT)
Governmental
Business -type
Activities
Activity
Total
$ 60,690,913
$ -
$ 60,690,913
9,685,407
-
9,685,407
498,210
30,000
528,210
5,105,904
-
5,105,904
64,482
-
64,482
35,870,000
-
35,870,000
31,192,174
-
31,192,174
766,316
(766,316)
-
856,422
-
856,422
3,969
-
3,969
330,464
-
330,464
67,040
-
67,040
74,132,316
-
74,132,316
175,141,090
-
175,141,090
394,404,707
(736,316)
393,668,391
1,247,544
37,473
1,285,017
1,797,248
13,551
1,810,799
1,272,662
-
1,272,662
1,205,425
-
1,205,425
759,351
-
759,351
11,029,061
32,414
11,061,475
172, 667, 82 8
179,870
172, 847, 69 8
189,979,119
263,308
190,242,427
179,236,866
-
179,236,866
1,012,095
-
1,012,095
8,327,376
-
8,327,376
3,074,279
-
3,074,279
12,873,159
-
12,873,159
(98,187)
(999,624)
(1,097,811)
$ 204,425,588
$ (999,624)
$ 203,425,964
See independent auditors' report and notes to basic financial statements.
-15-
0
CITY OF WEST COVINA
STATEMENT OF ACTIVITIES
For the year ended June 30, 2011
Functions/programs
Expenses
Governmental activities:
General government
$ 2,922,898
Public safety
45,253,725
Public works
21,052,423
Community services
6,629,292
Community development
9,414,730
Interest expense
7,101,037
Total governmental activities
92,374,105
Business -type activity:
Computer service
2,086,135
Total business -type activity
2,086,135
Total
$ 94,460,240
0
Program Revenues
Charges Operating Capital
for Grants and Grants and
$ 681,877 $ - $ -
3,571,864 1,584,275 232,520
8,043,988 4,728,598 446,307
1,166,675 3,876,177 -
240,462 - -
13,704,866 10,189,050 678,827
2,268,982 - -
2,268,982 - -
$ 15,973,848 $ 10,189,050 $ 678,827
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 - Beginning of Year
Net assets (deficit) - End of Year
See independent auditors' report and notes to basic financial statements.
-16-
•
Is
1
1
1
1
1
1
Net (Expense) Revenue and
Changes in Net Assets
Governmental Business -type
Activities Activity
Total
$ (2,241,021) $ -
$ (2,241,021)
(39,865,066) -
(39,865,066)
(7,833,530) -
(7,833,530)
(1,586,440) -
(1,586,440)
(9,174,268) -
(9,174,268)
(7,101,037) -
(7,101,037)
(67,801,362) - (67,801,362)
182,847 182,847
182,847 182,847
$ (67,801,362) $ 182,847 $ (67,618,515)
30,888,074
-
30,888,074
12,550,157
-
12,550,157
3,159,080
-
3,159,080
756,573
-
756,573
4,692,750
-
4,692,750
517,098
-
517,098
2,281,105
-
2,281,105
4,412,125
-
4,412,125
95,934
(95,934)
-
59,352,896
(95,934)
59,256,962
(8,448,466)
86,913
(8,361,553)
212,874,054
(1,086,537)
211,787,517
$ 204,425,588
$ (999,624)
$ 203,425,964
M&M
CITY OF WEST COVINA •
BALANCESHEET
GOVERNMENTAL FUNDS
June 30, 2011
ASSETS
Cash and investments
Cash and investments with fiscal agent
Receivables:
Accounts
Taxes
Interest
Assessments
Notes and loans
Due from other funds
Due from other agencies
Prepaids and other assets
Advances to other funds
Land held for resale
TOTAL ASSETS
LIABILITIES AND FUND BALANCES
LIABILITIES:
Accounts payable
Other accrued liabilities
Pass -through payable
Due to other funds
Deposits
Deferred revenue
Advances from other funds
TOTAL LIABILITIES
FUND BALANCES (DEFICIT):
Nonspendable
Restricted
Assigned
Unassigned
TOTAL FUND BALANCES (DEFICIT)
TOTAL LIABILITIES AND FUND BALANCES
Debt Service Funds
Community
Development
General
City
Commission
$ 5,460,500
$ 15,874,108
$ 9,445,086
-
2,305,167
6,012,989
278,800
126,567
-
3,120,140
-
1,531,222
20,872
-
16,704
1,892,989
-
-
43,867
-
-
60,988
64,479
2,118
21,521,409
-
-
32,399,565
S 18,370,3 11
17,008,119
$ 397,420 $
1,258,719
30,088
344,720
755,341
2,786,288
16,502 $ 103,163
161 399,904
- 1,272,662
1,899,511
- 24,394,986
16,6 33 28,070,226
20,827,056 64,479 2,118
- 18,289,179 6,012,989
8,786,221 - (17,077,214)
29,613,277 18,353,658 (11,062,107)
$ 32,399,565 $ 18,370,321 $ 17,008,119
See independent auditors' report and notes to basic financial statements.
-18-
0
U
1
1
1
1
1
Capital Projects Funds
Community
Other
Total
Development
Governmental
Governmental
City
Commission
Funds
Funds
$ 1,308,404
$ 10,006,140
$ 13,163,428
$ 55,257,666
1,367,251
-
9,685,407
380
72,719
11,062
489,528
-
-
454,542
5,105,904
1,859
5,742
18,118
63,295
-
35,870,000
-
35,870,000
-
27,008,123
4,184,051
31,192,174
-
-
6,522
1,899,511
-
360
812,195
856,422
-
197,041
5,838
330,464
-
7,873,577
-
29,394,986
-
67,040
-
67,040
1,310,643
2, 67,993
18,655,756
170,212,397
$ -
180,748
$ 451,343
$ 1,149,176
10,385
15,868
105,552
1,790,589
-
-
-
1,272,662.
-
-
664,746
2,594,345
-
414,631
-
759,351
-
62,878,123
4,451,040
68,084,504
-
5,000,000
-
29,394,986
10,385
68,489,370
5,672,681
105,045,613
-
8,137,658
5,838
29,037,149
1,367,251
12,469,037
38,138,456
1,300,258
-
664,688
1,964,946
-
4,473,714
(156,488)
(3,973,767)
1,300,258
13,978,623
12,983,075
65,166,784
$ 1,310,643
$ 82,467,993
$ 18,655,756
$ 170,212,397
-19-
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IJ
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1
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1
1
1
1
1
• CITY OF WEST COVINA •
RECONCILIATION OF THE GOVERNMENTAL FUNDS BALANCE SHEET
TO THE STATEMENT OF NET ASSETS
June 30, 2011
Fund balances for governmental funds
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
Long-term debt and compensated absences that have not been included in the
governmental fund activity:
Bonds payable
Compensated absences
Other long-term liabilities
Accrued interest payable for the current portion of interest due on bonds payable
has not been reported in the governmental funds.
Revenues that are measurable but not available are recorded as deferred revenue
under the modified accrual basis of accounting.
Net pension obligations are not due and payable at year end; they are therefore
not reported in the governmental fund financial statements.
Internal service funds were used by management to charge the costs of certain
activities, such as vehicle and equipment maintenance and replacement, the
City's self-insurance programs and for retirement health benefits to individual
funds. The assets and liabilities of the internal service funds must be added
to the Statement of Net Assets.
Net assets of governmental activities
See independent auditors' report and notes to basic financial statements.
-21 -
$ 396,047,590
(147,545,136)
$ (117,800,000)
(4,698,320)
(44,229,212)
$ 65,166,784
248,502,454
(166,727,532)
(1,205,425)
68,084,504
(5,575,491)
(3,819,706)
$ 204,425,588
CITY OF WEST COVINA •
STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES
GOVERNMENTAL FUNDS
For the year ended June 30, 2011
Debt Service Funds
Community
Development
General
City
Commission
REVENUES:
Taxes
$36,232,934
$ -
$ 22,244,078
Special assessments
-
-
-
Licenses and permits
1,099,083
-
-
Fines and forfeitures
157,041
-
-
Investment income
2,674,829
890,069
376,102
Rental income
380,882
-
-
Revenue from other agencies
1,763,196
-
-
Charges for services
5,718,422
894,572
-
Repayment of notes and loans
-
-
-
Gain on sale of property
-
-
-
Other revenues
1,029,135
-
889,462
TOTAL REVENUES
49,055,522
1,784,641
23,509,642
EXPENDITURES:
Current:
General government
4,165,095
-
-
Public safety
40,833,468
-
-
Public works
4,398,243
-
-
Community services
1,962,481
-
-
Community development
401,262
-
-
Pass -through payments
-
-
5,863,850
Debt service:
Principal
-
1,959,975
2,130,000
Interest and fiscal charges
-
2,123,877
5,670,441
Other contractual payments
-
85,548
2,231,566
TOTAL EXPENDITURES
51,760,549
4,169,400
15,895,857
EXCESS OF REVENUES OVER (UNDER) EXPENDITURES
(2,705,027)
(2,384,759)
7,613,785
OTHER FINANCING SOURCES (USES):
Transfers in
Transfers out
TOTAL OTHER FINANCING SOURCES (USES)
NET CHANGE IN FUND BALANCES
FUND BALANCES (DEFICIT) - BEGINNING OF YEAR
FUND BALANCES (DEFICIT) - END OF YEAR
See independent auditors' report and notes to basic financial statements.
-22-
1,666,623 1,961,000 -
(916,269) - (8,119,435)
750,354 1,961,000 (8,119,435)
(1,954,673) (423,759) (505,650)
31,567,950 18,777,417 (10,556,457)
$29,613,277 $ 18,353,658 $ (11,062,107)
1
1
1
1
1
1
1
1
1
1
1
1
1
1
•
Capital Projects Funds
Community
Other
Total
Development
Governmental
Governmental
City
Commission
Funds
Funds
5,186,690
$ 63,663,702
-
-
5,210,062
5,210,062
-
-
-
1,099,083
-
-
899,882
1,056,923
9,429
93,258
81,273
4,124,960
24,341
62,900
-
468,123
-
-
6,600,264
8,363,460
-
-
166,673
6,779,667
-
516,991
204,357
721,348
-
250,199
-
250,199
5,187
1,112,976
494,137
3,530,897
38,957
2,036,324
18,843,338
95,268,424
5,187
-
10,596
4,180,878
10,058
-
1,094,895
41,938,421
32,357
-
10,894,661
15,325,261
48,020
-
3,401,508
5,412,009
-
7,656,944
170,447
8,228,653
-
-
-
5,863,850
-
560,000
-
4,649,975
-
726,572
-
8,520,890
-
-
-
2,317,114
95,622
8,943,516
15,572,107
96,437,051
(56,665)
(6,907,192)
3,271,231
(1,168,627)
-
7,008,435
535,402
11,171,460
-
(2,039,822)
(11,075,526)
-
7,008,435
(1,504,420)
95,934
(56,665)
101,243
1,766,811
(1,072,693)
1,356,923
13,877,380
11,216,264
66,239,477
$ 1,300,258
$ 13,978,623
$ 12,983,075
$ 65,166,784
-23-
•
• CITY OF WEST COVINA •
RECONCILIATION OF THE GOVERNMENTAL FUNDS STATEMENT OF
REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES
TO THE STATEMENT OF ACTIVITIES
For the year ended June 30, 2011
Net change in fund balances - total governmental funds
Amounts reported for governmental activities in the Statement of Activities are
different because:
Governmental funds report capital 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.
Increase in developer agreement payable and amounts payable to the County
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 the governmental funds:
Increase in net other post employment benefits obligation
Internal service funds are used by management to charge the costs of certain
activities, such as vehicle and equipment maintenance and replacement, the
City's self-insurance programs and for retirement health benefits to individual
funds. The net revenues (expenses) of the internal service funds is reported
with governmental activities.
Change in net assets of governmental activities
See independent auditors' report and notes to basic financial statements.
$ (1,072,693)
$ 3,073,876
(10,618,148)
(7,544,272)
3,946,241
(3,120,399)
77,816
88,371
2,130,763
(1,983,014)
(971,279)
$ (8,448,466)
-24-
1 • CITY OF WEST COVINA •
1 STATEMENT OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCE - BUDGET AND ACTUAL
1 GENERAL FUND
For the year ended June 30, 2011
1 Variance with
Final Budget
Budgeted Amounts
Positive
'
Original
Final
Actual
(Negative)
REVENUES:
Taxes
$ 35,194,000
$ 35,194,000
$ 36,232,934
$ 1,038,934
Licenses and permits
1,064,900
1,064,900
1,099,083
34,183
Fines and forfeitures
156,000
156,000
157,041
1,041
Investment income
2,740,000
2,740,000
2,674,829
(65,171)
Rental income
275,000
275,000
380,882
105,882
Revenue from other agencies
1,308,000
1,593,000
1,763,196
170,196
Charges for services
6,867,821
6,852,821
5,718,422
(1,134,399)
Other revenues
1,116,599
1,116,599
1,029,135
(87,464)
TOTAL REVENUES
48,722,320
48,992,320
49,055,522
63,202
EXPENDITURES:
Current:
'
General government
4,508,369
4,548,651
4,165,095
383,556
Public safety
41,367,521
41,406,092
40,833,468
572,624
Public works
4,674,410
4,682,220
4,398,243
283,977
'
Community services
2,238,361
2,254,336
1,962,481
291,855
Community development
449,534
449,917
401,262
48,655
TOTAL EXPENDITURES
53,238,195
53,341,216
51,760,549
1,580,667
'
EXCESS OF REVENUES OVER
(UNDER) EXPENDITURES
(4,515,875)
(4,348,896)
(2,705,027)
1,643,869
'
OTHER FINANCING SOURCES (USES):
Transfers in
1,604,650
1,620,580
1,666,623
46,043
Transfers out
(904,216)
(904,216)
(916,269)
(12,053)
TOTAL OTHER FINANCING
'
SOURCES (USES)
700,434
716,364
750,354
33,990
n
L7
NET CHANGE IN FUND BALANCE (3,815,441) (3,632,532) (1,954,673) 1,677,859
FUND BALANCE - BEGINNING OF YEAR 31,567,950 31,567,950 31,567,950 -
FUND BALANCE - END OF YEAR $ 27,752,509 $ 27,935,418 $ 29,613,277 $ 1,677,859
See independent auditors' report and notes to basic financial statements.
-25-
CITY OF WEST COVINA
STATEMENT OF NET ASSETS
PROPRIETARY FUNDS
June 30, 2011
ASSETS
CURRENT ASSETS:
Cash and investments
Receivables:
Account
Interest
Due from other funds
Inventories
TOTAL CURRENT ASSETS
NONCURRENT ASSETS:
Capital assets:
Other capital assets
Less accumulated depreciation
Total capital assets (net of accumulated depreciation)
TOTAL NONCURRENT ASSETS
TOTAL ASSETS
LN/:11:l14111M1
CURRENT LIABILITIES:
Accounts payable
Other accrued liabilities
Due to other funds
Claims and judgments - current portion
Compensated absences - current portion
TOTAL CURRENT LIABILITIES
NONCURRENT LIABILITIES:
Claims and judgments
Compensated absences
TOTAL NONCURRENT LIABILITIES
TOTAL LIABILITIES
NET ASSETS
Invested in capital assets
Unrestricted
TOTAL NET ASSETS (DEFICITS)
See independent auditors' report and notes to basic financial statements.
-26-
•
Computer Service Internal Service
Enterprise Fund Funds
$ - $ 5,433,247
30,000 8,682
- 1,187
1,461,150
- 3,969
30,000 6,908,235
1,059,120 3,543,401
(1,059,120) (2,772,448)
- 770,953
- 770,953
30,000 7,679,188
37,473
98,368
13,551
6,659
766,316
-
-
3,771,370
32,414
17,010
849,754
3,893,407
-
7,498,737
179,870
106,750
179,870
7,605,487
1,029,624
11,498,894
- 770,953
(999,624) (4,590,659)
$ (999,624) $ (3,819,706)
t
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
• CITY OF WEST COVINA •
STATEMENT OF REVENUES, EXPENSES AND CHANGES IN NET ASSETS
PROPRIETARY FUNDS
For the year ended June 30, 2011
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:
Investment income
TOTAL NONOPERATING REVENUES
INCOME (LOSS) BEFORE TRANSFERS
TRANSFERS IN
TRANSFERS OUT
CHANGE IN NET ASSETS
TOTAL NET ASSETS (DEFICITS) - BEGINNING OF YEAR
TOTAL NET ASSETS (DEFICITS) - END OF YEAR
See independent auditors' report and notes to basic financial statements.
-27-
Computer Service Internal Service
Enterprise Fund
Funds
$ 2,268,982
$ 3,771,642
-
.27,834
2,268,982
3,799,476
1,496,189
894,584
547,873
2,300,548
42,073
149,091
-
1,432,731
2,086,135
4,776,954
182,847
(977,478)
-
6,199
-
6,199
182,847
(971,279)
-
204,417
(95,934)
(204,417)
86,913
(971,279)
(1,086,537)
(2,848,427)
$ (999,624) $
(3,819,706)
•
CITY OF WEST COVINA
STATEMENT OF CASH FLOWS
PROPRIETARY FUNDS
For the year ended June 30, 2011
CASH FLOWS FROM OPERATING ACTIVITIES:
Received from customers
Received from user departments
Payments to suppliers for goods and services
Payments to employees for services
NET CASH PROVIDED (USED)
BY OPERATING ACTIVITIES
CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES:
Received from other funds
Paid to other funds
NET CASH PROVIDED (USED) BY
NONCAPITAL FINANCING ACTIVITIES
CASH FLOWS FROM INVESTING ACTIVITIES:
Interest received on investments
NET INCREASE (DECREASE) IN
CASH AND CASH EQUIVALENTS
CASH AND CASH EQUIVALENTS - BEGINNING OF YEAR
CASH AND CASH EQUIVALENTS - END OF YEAR
See independent auditors' report and notes to basic financial statements.
-28-
C� J
Computer Service Internal Service
Enterprise Fund
Funds
$ 2,245,782 $
-
-
3,803,136
(551,972)
(4,058,270)
(1,557,180)
(905,652)
136,630
(1,160,786)
-
1,533,481
(181,851)
(207,417)
(181,851)
1,326,064
-
6,028
(45,221)
171,306
45,221
5,261,941
$ - $
5,433,247
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
0
CITY OF WEST COVINA
STATEMENT OF CASH FLOWS
PROPRIETARY FUNDS
(CONTINUED)
For the year ended June 30, 2011
RECONCILIATION OF OPERATING INCOME (LOSS) TO NET
CASH PROVIDED (USED) BY OPERATING ACTIVITIES:
Operating income (loss)
Adjustments to reconcile operating income (loss)
to net cash provided (used) by operating activities:
Depreciation
Changes in operating assets and liabilities:
(Increase) decrease in accounts receivables
(Increase) decrease in inventories
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 (USED)
is
Computer Service Internal Service
Enterprise Fund Funds
$ 182,847 $
(977,478)
42,073
149,091
(23,200)
3,660
-
(1,200)
(5,577)
(7,892)
(28,789)
(16,082)
(30,724)
5,014
-
(315,899)
(46,217) (183,308)
BY OPERATING ACTIVITIES $ 136,630 $ (1,160,786)
There were no significant noncash financing or investing activities for the year ended June 30, 2011.
See independent auditors' report and notes to basic financial statements.
-29-
• CITY OF WEST COVINA
STATEMENT OF ASSETS AND LIABILITIES
FIDUCIARY FUNDS
June 30, 2011
ASSETS:
Cash and investments
TOTAL ASSETS
LIABILITIES:
Accounts payable
Deposits
TOTAL LIABILITIES
See independent auditors' report and notes to basic financial statements.
-30-
Special
Deposits
$ 821,609
$ 821,609
$ 4,707
816,902
$ 821,609
' • CITY OF WEST COVINA •
INOTES TO BASIC FINANCIAL STATEMENTS
June 30, 2011
' 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
1 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 Community Development Commission of the City of West Covina (the Commissio ,
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 consist primarily of property tax allocations on the incremental increase of
property values in the redevelopment area and interest income.
See independent auditors' report.
' -31-
• CITY OF WEST COVINA 0
1
NOTES TO BASIC FINANCIAL STATEMENTS
(CONTINUED)
June 30, 2011
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED):
a. Reporting Entity (Continued):
The West Covina Public Financing Authority (the 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.
The Parking Authority of the City of West Covina (the 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.
The West Covina Community Services Foundation, Inc. (the 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
Public Financing Authority, Parking Authority and the Foundation do not issue separate
component unit financial statements. The City of West Covina Community Development
Commission issues separate component unit financial statements. Upon their completion,
financial statements of the Commission can be obtained at City Hall, 1444 W. Garvey Avenue,
West Covina, California 91793.
See independent auditors' report.
-32-
• CITY OF WEST COVINA •
NOTES TO BASIC FINANCIAL STATEMENTS
(CONTINUED)
IJune 30, 2011
' 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED):
Ib. Basis of Accounting and Measurement Focus:
The basic financial statements of the Commission are composed of the following:
• Government -wide financial statements
I• Fund financial statements
• Notes to the basic financial statements
IGovernment -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.
See independent auditors' report.
1
-33-
• CITY OF WEST COVINA • 1
NOTES TO BASIC FINANCIAL STATEMENTS 1
(CONTINUED)
June 30, 2011
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED): I
b. Basis of Accounting and Measurement Focus (Continued):
Government -wide Financial Statements
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. I
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 other governmental 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.
See independent auditors' report.
-34- ,
0 CITY OF WEST COVINA •
F,
�I
NOTES TO BASIC FINANCIAL STATEMENTS
(CONTINUED)
June 30, 2011
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED):
b. Basis of Accounting and Measurement Focus (Continued):
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 non
exchange 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.
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.
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.
See independent auditors' report.
1
-35-
• CITY OF WEST COVINA 0
1
NOTES TO BASIC FINANCIAL STATEMENTS
(CONTINUED)
June 30, 2011
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED):
b. Basis of Accounting and Measurement Focus (Continued):
Governmental Funds (Continued)
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 does not meet the "available" criteria of revenue
recognition. Therefore recognition of governmental fund type revenue represented by non-
current receivables are deferred until they meet the "availability" criteria.
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.
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
and fiduciary 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.
See independent auditors' report.
1
-36-
0 CITY OF WEST COVINA •
11
NOTES TO BASIC FINANCIAL STATEMENTS
(CONTINUED)
June 30, 2011
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED):
b. Basis of Accounting and Measurement Focus (Continued):
Proprietary and Fiduciary Funds (Continued)
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.
City Debt Service Fund - This fund is used to account for the payment of principal, interest and
related costs on the City's long-term debt issues.
Community Development Commission Debt Service Fund - This fund is used to account for
the accumulation of resources for, and the payment of, Community Development Commission
long-term debt principal, interest and related costs.
City Cgpital Projects Fund - This fund accounts for all capital expenditures not being accounted
for in other capital projects funds or other fund types.
Community Development Commission Capital Projects Fund - This capital projects fund is
used to account for the financial resources to be used for property acquisition, improvement
' and rehabilitation within the project areas authorized under provisions of the California
Redevelopment Law in the Community Development Commission.
See independent auditors' report.
1
-37-
• CITY OF WEST COVINA 0
NOTES TO BASIC FINANCIAL STATEMENTS
(CONTINUED)
June 30, 2011
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED):
c. Fund Classifications (Continued):
The City reports the following major proprietary fund:
Computer Service Enterprise Fund - This fund is used to account for operations that are
financed and operated in a manner similar to private business enterprises. The City's enterprise
fund is used to account for computer services provided by the Police Department to other
public agencies.
Additionally, the City reports the following fund types:
Special Revenue Funds - are used to account for specific revenues that are legally restricted to
expenditure for particular purposes.
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.
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.
See independent auditors' report.
n
1
0 CITY OF WEST COVINA •
' NOTES TO BASIC FINANCIAL STATEMENTS
(CONTINUED)
June 30, 2011
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED):
' d. Budgets and Budgetary Data (Continued):
The budget is formally integrated into the accounting system and employed as a management
1 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.
e. Encumbrances:
tEncumbrance 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 totaled $435,376 as of June 30, 2011.
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.
1 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.
See independent auditors' report.
1 -39-
• CITY OF WEST COVINA •
NOTES TO BASIC FINANCIAL STATEMENTS
(CONTINUED)
June 30, 2011
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED):
h. Inventory:
Inventory is stated at average cost. Physical counts of inventory are taken on a cyclical basis
during each fiscal year with perpetual records adjusted to actual at that time. The City uses the
consumption method of accounting for inventory.
i. 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.
j. Property Taxes:
Under California law, property taxes are assessed and collected by the counties up to 1 % of
assessed value, plus other increases approved by the voters. The property taxes go into a pool,
and are then allocated to the cities based on complex formulas. Accordingly, the City of West
Covina accrues only those taxes which are received within 60 days after year end.
The property tax calendar is as follows:
Lien Date:
Levy Date:
Due Dates:
Delinquent Dates:
January 1
July 1
First Installment - November 1
Second Installment - February 1
First Installment - December 1 I
Second Installment - April 11
I
11
1
Taxes are collected by Los Angeles County and are remitted to the City periodically. Dates and
percentages are as follows: I
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
See independent auditors' report.
-40- 1
0 CITY OF WEST COVINA •
' NOTES TO BASIC FINANCIAL STATEMENTS
(CONTINUED)
' June 30, 2011
' 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED):
I
k. Capital Assets:
Capital assets greater than $5,000 and infrastructure greater than $100,000 are capitalized and
I 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.
u
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. There was no interest capitalized during the year ended June 30, 2011.
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 Activity:
Equipment and vehicles 5 - 25 years
in. 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.
See independent auditors' report.
SM
• CITY OF WEST COVINA •
NOTES TO BASIC FINANCIAL STATEMENTS
(CONTINUED)
June 30, 2011
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED):
n. Compensated Absences:
GASB Codification C60.110, 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 Codification C60.110, 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 sincetheir 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. Use of Estimates:
The preparation of financial statements in conformity with accounting principles generally
accepted in the United States of America requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and the reported amounts
of revenues and expenditures/expenses during the reporting period. Actual results could differ
from those estimates.
2. CASH AND INVESTMENTS:
Cash and Investments
Cash and investments held by the City at June 30, 2011 are reported in the accompanying financial
statements as follows:
Statement of Net Assets:
Cash and investments $ 60,690,913
Cash and investments with fiscal agents 9,685,407
Fiduciary Funds Statement of Assets and Liabilities:
Cash and investments 821,609
Total cash and investments $ 71,197,929
See independent auditors' report.
1
-42-
' 0 CITY OF WEST COVINA 9
NOTES TO BASIC.FINANCIAL STATEMENTS
(CONTINUED)
June 30, 2011
2. CASH AND INVESTMENTS (CONTINUED):
Cash and Investments (Continued)
Cash and investments as of June 30, 2011 consist of the following:
Cash on hand $ 3,136,449
Deposits with financial institutions 8,950
Investments 68,052,530
Total cash and investments 71,197, 229
Investments Authorized by the California Government Code and the City'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.
I
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
Policv
No
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
No
Yes
Yes
Yes
Yes
Yes
No
Maximum
Maturity
N/A
5 years
5 years
180 days
270 days
5 years
100 days
92 days
5 years
N/A
5 years
N/A
5 years
N/A
N/A
N/A
Maximum
Percentage
of Portfolio*
None
None
None
40%
40%
30%
20%
20%
30%
N/A
25%
20%
20%
None
None
None
Maximum
Investment
in One Issuer*
None
None
None
30%
10%
None
None
None
None
N/A
None
10%
None
None
None
None
* Based on state law requirements or investment policy requirements, whichever is more
restrictive.
See independent auditors' report.
• CITY OF WEST COVINA 0
NOTES TO BASIC FINANCIAL STATEMENTS
(CONTINUED)
June 30, 2011
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 Investment Type
U.S. Treasury Obligations
U.S. Agency Securities
Certificates of Deposit
Banker's Acceptances
Commercial Paper
Repurchase Agreements
Local Agency Investment Fund
Investment Agreements
N/A - Not Applicable
Disclosures Relating to Interest Rate Risk
Maximum
Maximum
Maximum
Percentage
Investment
Maturity
Allowed
in One Issuer
None
None
None
None
None
None
None
None
None
360 to 365 days
None
None
365 days
None
None
30 days to 6 months
None
None
None
None
None
None
None
None
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.
See independent auditors' report.
J
5
1
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11
• CITY OF WEST COVINA 9
NOTES TO BASIC FINANCIAL STATEMENTS
(CONTINUED)
June 30, 2011
2. CASH AND INVESTMENTS (CONTINUED):
Disclosures Relating to Interest Rate Risk (Continued)
Information about the sensitivity of the fair values of the City's investments (including investments
held by bond trustees) to market interest rate fluctuations is provided by the following table that
shows the distribution of the City's investments by maturity:
Investment Type
Local Agency Investment Fund
Los Angeles County Investment Pool
U.S. Government Sponsored
Agency Securities
Held by fiscal agent:
Money market funds
Federal Agency securities
Investment agreements
Total
Remaining Maturity (in Months)
12 Months 13 to 24 25 to 36 More Than
or Less Months Months 36 Months Total
$ 22,581,714 $ - $ - $ - $ 22,581,714
20,069,371 - - - 20,069,371
Disclosures Relating to Credit Risk
15,716,038 15,716,038
611,358 - - - 611,358
799,960 - 3,271,419 - 4,071,379
5,002,670 5,002,670
44.062.403 - 3.271.419 20.718.708 S 68,052,530
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
Total
Legal
as of
Not
Investment Type
Rating
June 30, 2011
AAA
Rated
Local Agency Investment Fund
N/A
$ 22,581,714
$ -
$ 22,581,714
Los Angeles County Investment Pool
N/A
20,069,371
-
20,069,371
U.S. Government Sponsored Agency Securities
N/A
15,716,038
15,716,038
-
Held by fiscal agent:
Money market funds
A
611,358
611,358
-
Federal Agency securities
N/A
4,071,379
4,071,379
-
Investment agreements
N/A
5,002,670
-
5,002,670
Total
68,052,530
20,398,775
47,653,755
N/A - Not Applicable
Subsequent to June 30, 2011, Standards and Poor's reduced the rating of the United States
Government Sponsored Agency Securities from AAA to AA+.
See independent auditors' report.
1 - 45 -
0 CITY OF WEST COVINA 0
NOTES TO BASIC FINANCIAL STATEMENTS
(CONTINUED)
June 30, 2011
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
anyone 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:
Reported
Issuer Investment Type Amount
FNMA Federal agency securities $ 4,077,570
FHLMC Federal agency securities 14,909,887
Westdeutsche Landesbank Investment agreement 5,002,670
Investments in anyone issuer that represent 5% or more of total investments by the reporting unit
(primary government, governmental activities, major fund, other governmental funds in the
aggregate, etc.) are as follows.
Issuer
Reported
Investment Type Amount
City Debt Service Fund:
FNMA Federal agency securities
FHLMC Federal agency securities
CDC Debt Service Fund:
FHLMC Federal agency securities
Westdeutsche Landesbank Investment agreement
See independent auditors' report.
-46-
$ 4,077,570
11,638,469
3,271,418
5,002,670
' 0 CITY OF WEST COVINA 0
' NOTES TO BASIC FINANCIAL STATEMENTS
(CONTINUED)
' June 30, 2011
2. CASH AND INVESTMENTS (CONTINUED):
I
Custodial Credit Risk
Custodial credit risk for deposits is the risk that, in the event of the failure of a depository financial
' institution, a government will not be able to recover its deposits or will not be able to recover
collateral securities that are in the possession of an outside party. The custodial credit risk for
investments is the risk that, in the event of the failure of the counterparty (e.g., broker -dealer) to a
' transaction, a government will not be able to recover the value of its investment or collateral
securities that are in the possession of another party. The California Government Code and the
City'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
1
H
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value of the pledged securities in the collateral pool must equal at least 110% of the total amount
deposited by the public agencies. California law also allows financial institutions to secure City
deposits by pledging first trust deed mortgage notes having a value of 150% of the secured public
deposits. As of June 30, 2011, all the City's deposits are federally insured. 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.
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.
See independent auditors' report.
11
-47-
0 CITY OF WEST COVINA •
NOTES TO BASIC FINANCIAL STATEMENTS
(CONTINUED)
June 30, 2011
3. DUE TO AND FROM OTHER FUNDS:
Interfund receivable and payable balances at June 30, 2011 are as follows:
Payable
CDC Debt Service Fund
General Fund
Other Governmental Funds
Receivable
General Fund
Other Governmental Funds
Internal Service Funds
Internal Service Funds
Amount
$ 1,892,989 (a)
6,522
1,899,511
30,088
664,746 (b)
Computer Services
Enterprise Fund Internal Service Funds 766,316 (b)
1,461,150
Total interfund receivable and payable balances S 3,360,661
(a) The largest component of these interfund balances is 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
Transportation Development Act Fund, Integrated Waste Management Fund, Grants Fund (on
an individual grant basis), CDBG Fund, Inmate Welfare, and Public Safety Fund.
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, 2011 the outstanding advances are:
Advances To Advances From Amount
General Fund CDC Debt Service Fund $ 16,521,409 (a)
CDC Capital Projects Fund 5,000,000 (b)
21,521,409
CDC Capital Projects Fund
Total
CDC Debt Service Fund
See independent auditors' report.
- 48 -
7,973,577 (c)
29,394,986
' • CITY OF WEST COVINA 0
' NOTES TO BASIC FINANCIAL STATEMENTS
(CONTINUED)
June 30, 2011
' 4. INTERFUND ADVANCES (CONTINUED):
(a) The General Fund has made the following advances to the Community Development
Commission Debt Service Fund:
Administrative and construction costs $ 10,169,801
Capital project costs 1,893,279
Revolving credit 4,458,329
' Total 16,521.409
The outstanding advances are comprised of principal of $15,766,068 and accumulated interest
' of $755,341 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.
CI'
I
1
(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.
Outstanding balance at June 30, 2011 was $5,000,000.
(c) In May 2010, the Low and Moderate Income Housing Capital Projects Fund made an advance
of $6,529,308 to the Citywide Project Area 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.
In May 2011, the Low and Moderate Income Housing Capital Projects Fund made an advance
of $1,344,269 to the Citywide Project Area 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, 2016..
5. ASSESSMENTS RECEIVABLE:
As of June 30, 2011, the following assessments receivable were outstanding:
CDC Capital Projects Fund - 1996 Special Tax Bonds 35,870,000
In connection with the Commission's issuance of its $51,220,000 1996 Special Tax Bonds, the
Commission has recorded $35,870,000 in assessments receivable and deferred revenue. The
assessment is an annual special tax levied on the community facilities district in amount sufficient
to ensure payment of the debt service on the bonds. This special tax supplements sales and property
tax increment revenues that also support the debt service on the bonds. These assessment and
corresponding deferred revenue will be reduced as the principal on the bonds mature.
See independent auditors' report.
0 CITY OF WEST COVINA •
NOTES TO BASIC FINANCIAL STATEMENTS
(CONTINUED)
June 30, 2011
6. NOTES AND LOANS RECEIVABLE:
As of June 30, 2011, the following notes and loans receivable were outstanding:
Housing rehabilitation
First time home buyers
Housing preservation program
Lake Ellen Towers
Executive Lodge Apartments
West Covina Senior Villas, L.L.C.
West Covina Senior Villas II, L.P.
Clippinger note
Hassan Imports Partnerships
Other Community Development Commission loans
Allowance for doubtful accounts
Total
$ 4,858,788
661,613
1,197,269
5,660,679
6,234,404
3,116,666
7,730,819
557,846
7,586,603
2,233,567
(8,646,080)
31,192.174
The City has made several housing rehabilitation loans totaling $4,858,788 to qualified applicants
using Community Development Block Grants and housing set -aside funds. These loans bear
interest up to 5% and are repaid when title to the property changes.
The Commission has made loans to first-time home buyers totaling $661,613. 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 34 individual loans outstanding at June 30, 2011
ranging from $5,000 to $25,000.
The Commission has also made housing preservation loans totaling $1,197,269 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 42 individual loans outstanding at June 30, 2011 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, 2011 is $5,660,679.
See independent auditors' report.
�I
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11
1
-50-
1
' • CITY OF WEST COVINA •
NOTES TO BASIC FINANCIAL STATEMENTS
(CONTINUED)
' June 30, 2011
6. NOTES AND LOANS RECEIVABLE (CONTINUED):
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, 2011 is $6,234,404.
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, 2011 is $3,116,666.
I
1
1
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, 2011 the
Commission had provided $8,600,000. The outstanding principal at June 30, 2011 is $7,730,819.
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, 2011 is $557,846.
During the fiscal year the Commission received an award for damages, attorneys' fees and cost
under a foreclosure judgment in superior court in the amount of $7,586,603. This amount is the
result of a positive verdict in litigation against Hassan Imports Partnerships and various related
entities, stemming from breach of contract of various agreements and covenants with the
Community Development Commission. The Commission is pursuing collection of these amounts
in federal bankruptcy court. The developer has also filed an appeal of the judgment. The
outstanding principal at June 30, 2011 is $7,586,603.
7. LAND HELD FOR RESALE:
Land held for resale is comprised of the following at June 30, 2011:
BKK Project $ 67 440
See independent auditors' report.
1
-51-
• CITY OF WEST COVINA •
NOTES TO BASIC FINANCIAL STATEMENTS
(CONTINUED)
June 30, 2011
8. CAPITAL ASSETS:
Capital asset activity for the year ended June 30, 2011 was as follows:
Governmental Activities
Capital assets, not being depreciated:
Land
Rights of way
Construction in progress
Total capital assets, not
being depreciated
Capital assets, being depreciated:
Buildings and improvements
Equipment and vehicles
Infrastructure - pavement
Infrastructure - other
Total capital assets,
being depreciated
Less accumulated depreciation for:
Buildings and improvements
Equipment and vehicles
Infrastructure - pavement
Infrastructure - other
Total accumulated depreciation
Total capital assets,
being depreciated
Capital assets, net
Balance at
Balance at
July 1, 2010
Additions
Deletions
June 30, 2011
$ 54,572,073
$ -
$ -
$ 54,572,073
14,376,498
-
-
14,376,498
11,365,056
2,679,186
(8,860,497)
5,183,745
80,313,627
2,679,186
(8,860,497)
74,132,316
104,373,202
246,337
-
104,619,539
18,710,015
4,196,061
(593,184)
22,312,892
173,749,146
4,338,679
-
178,087,825
19,964,309
474,109
-
20,438,418
316,796,672 9,255,186 (593,184) 325,458,674
(26,627,598) (2,124,950)
- (28,752,548)
(13,477,705) (1,552,408)
593,184 (14,436,929)
(85,290,776) (6,736,426)
- (92,027,202)
(14,747,450) (353,455)
- (15,100,905)
(140,143,529) (10,767,239)
593,184 (150,317,584)
176,653,143 (1,512,053) - 175,141,090
$ 256,966,770 S 1,167. 333 (8.860. 997) 249,273,406
Depreciation expense was charged in the following functions in the Statement of Activities for the
year ended June 30, 2011 as follows:
General government $ 78,772
Public safety 1,153,420
Public works 7,762,131
Community services 1,393,808
Community development 379,108
10,767,239
See independent auditors' report.
-52-
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• CITY OF WEST COVINA •
NOTES TO BASIC FINANCIAL STATEMENTS
(CONTINUED)
June 30, 2011
8. CAPITAL ASSETS (CONTINUED):
Capital asset activity for the year ended June 30, 2011 was as follows:
Business -type Activity
Balance at Balance at
July 1, 2010 Additions, Deletions June 30, 2011
Capital assets, being depreciated:
Equipment and machinery $ 1,059,120 $ - $ - $ 1,059,020
Less accumulated depreciation for:
Equipment and machinery (1,017,047) (42,073) - (1,059,020)
Capital assets, net 42,073 (42$073) $ - $ -
Depreciation expense was charged in the following programs of the primary government for the
year ended June 30, 2011 as follows:
Computer service 42,073
9. LONG-TERM LIABILITIES:
Changes in long-term liabilities for the governmental activities for the year ended June 30, 3011
are as follows:
Governmental Activities
Due Due in
Balance Balance Within More Than
June 30, 2010 Additions Deletions June 30, 2011 One Year One Year
Lease
Revenue Bonds:
1988
Lease Revenue Bonds $
4,540,000 $
2002
Lease Revenue Bonds
17,515,000
2003
Lease Revenue Bonds
2,825,000
2004
Lease Revenue Bonds
12,090,000
2005
Lease Revenue Bonds
2,540,000
2006
Lease Revenue Bonds
18,005,000
Total Lease Revenue Bonds
57,515,000 _
1996 Special Tax Bonds 37,355,000
See independent auditors' report.
$ (365,000) $
4,175,000 $
390,000 $
3,785,000
(455,000)
17,060,000
470,000
16,590,000
(150,000)
2,675,000
155,000
2,520,000
(290,000)
11,800,000
300,000
11,500,000
(60,000)
2,480,000
65,000
2,415,000
_ (80,000)
17,925,000
125,000
17,800,000
_ (1,400,000)
56,115,000 _
1,505,000
54,610,000
_ (1,485,000)
35,870,000
1,580,000
34,290,000
-53-
• CITY OF WEST COVINA •
NOTES TO BASIC FINANCIAL STATEMENTS
(CONTINUED)
June 30, 2011
9. LONG-TERM LIABILITIES (CONTINUED):
Governmental Activities (Continued)
Due Due in
Balance Balance Within More Than
June 30 2010 Additions Deletions June 30, 2011 One Year One Year
Tax Allocation Bonds:
1999 Tax Allocation Bonds $ 3,800,000 $
2002 Tax Allocation Bonds 10,030,000 _
Total Tax Allocation Bonds 13,830,000 _
Housing Set -Aside Bonds:
1998 Housing Set -Aside Bonds 4,585,000
2001 Housing Set -Aside Bonds 8,605,000
Total Housing
Set -Aside Bonds 13,190,000
$ (125,000) $
3,675,000 $
130,000 $
3,545,000
_ (520,000)
9,510,000
540,000
8,970,000
_ (645,000
13,185,000
670,000
12,515,000
(190,000)
4,395,000
195,000
4,200,000
_ (370,000)
8,235,000
385,000
7,950,000
_ (560,000)
12,630,000
580,000
12,050,000
Compensated absences
4,875,567
469,065
Claims and judgments payable
11,586,006
19,156
Capital lease obligations
2,261,401
-
Notes payable
2,328,034
-
Developer agreement payable
26,778,869
4,502,504
Net OPEB obligation
3,592,477
3,317,000
Due to County of Los Angeles
9,626,620
673,863
(522,552)
4,822,080
788,257
4,033,823
(335,055)
11,270,107
3,771,370
7,498,737
(417,863)
1,843,538
434,404
1,409,134
(142,112)
2,185,922
385,703
1,800,219
(1,382,105)
29,899,268
-
29,899,268
(1,333,986)
5,575,491
-
5,575,491
10,300,483
1,314,327
8,986,156
Total long-term liabilities
Governmental activities S 182,938,974 $ 8,98],588 (8,223,673) $ 183,696,889 $ 11.029.061.$ 172,667.828
Changes in long-term liabilities for the business -type activity for the year ended June 30, 2011 are
as follows:
Business -type Activity
Due Due in
Balance Balance Within More Than
June 30, 2010 Additions Deletions June 30, 2011 One Year One Year
Compensated absences $ 243,008 $ 6,381 S (37,105) $ 212,284 $ 32,414 S 179,E
See independent auditors' report.
-54-
• CITY OF WEST COVINA •
1
1
u
NOTES TO BASIC FINANCIAL STATEMENTS
(CONTINUED)
June 30, 2011
10. LEASE REVENUE BONDS:
1988 Lease Revenue Refunding Bonds (The Lakes 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 $671,139 was fully
funded at June 30, 2011. At June 30, 2011, the outstanding balance is $4,175,000.
The annual debt service requirements on the 1988 Lease Revenue Refunding Bonds as of
June 30, 2011 are as follows:
Year Ending
June 30,
2012
2013
2014
2015
2016
2017 - 2020
Totals
See independent auditors' report.
Principal
$ 390,000
425,000
460,000
495,000
535,000
1,870,000
Interest
$ 7,098
6,435
5,712
4,930
4,089
6,520
Total
$ 397,098
431,435
465,712
499,930
539,089
1,876,520
4,175,000 $ 34,784 $ 4.209.784
-55-
• CITY OF WEST COVINA •
NOTES TO BASIC FINANCIAL STATEMENTS
(CONTINUED)
June 30, 2011
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 $470,000 to $950,000. The Series B bonds
mature on September 1, 2035.
The Series B bonds are payable from lease payments to be made by the City to the Authority as
rental for certain public facilities consisting of a portion of the City's Civic Center Complex. At
June 30, 2011, the outstanding balance is $17,060,000.
The annual debt service requirements on the 2002 Lease Revenue Refunding Bonds as of
June 30, 2011 are as follows:
Year Ending
June 30,
2012
2013
2014
2015
2016
2017 - 2021
2022 - 2026
2027 - 2031
2032 - 2036
Totals
See independent auditors' report.
1
J
I
F1
Principal Interest Total I
$ 470,000
480,000
495,000
510,000
525,000
2,885,000
3,340,000
3,870,000
4,485,000
17,060,000
$ 32,414
31,521
30,609
29,669
28,700
127,861
98,781
65,094
26,068
$ 470,717
$ 502,414
511,521
525,609
539,669
553,700
3,012,861
3,438,781
3,935,094
4,511,068
17,30.717
-56-
J
' • CITY OF WEST COVINA •
1 NOTES TO BASIC FINANCIAL STATEMENTS
(CONTINUED)
June 30, 2011
10. LEASE REVENUE BONDS (CONTINUED):
2003 Lease Revenue Bonds, Series A (Community Center Project)
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 $155,000 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, 2011
of $285,685 was
fully funded. At June 30, 2011, the outstanding
balance is $2,675,000.
The annual debt service requirements
on the 2003 Lease Revenue Bonds as of June 30, 2011 are as
follows:
Year Ending
June 30,
Principal
Interest
Total
'
2012
$ 155,000
$ 130,128
$ 285,128
2013
160,000
1239195
283,195
2014
2015
170,000
175,000
115,685
107,663
285,685
282,663
2016
185,000
99,110
284,110
2017 - 2021
2022 - 2025
1,055,000
775,000
346,658
63,383
1,401,658
838,383
Totals
2,675,000
$ 985,822
S 3,660,822
i
See independent auditors, report.
-57-
• CITY OF WEST COVINA •
NOTES TO BASIC FINANCIAL STATEMENTS
(CONTINUED)
June 30, 2011
10. LEASE REVENUE BONDS (CONTINUED):
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 $170,000 to $460,000. The Series B bonds
mature annually through May 1, 2034 in amounts ranging from $130,000 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, 2011,
the outstanding balance is $11,800,000.
The annual debt service requirements on the 2004 Lease Revenue Bonds as of June 30, 2011 are as
follows:
Year Ending
June 30,
2012
2013
2014
2015
2016
2017 - 2021
2022 - 2026
2027 - 2031
2032 - 2036
Totals
See independent auditors' report.
Principal
$ 300,000
310,000
325,000.
345,000
355,000
2,060,000
2,565,000
3,220,000
2,320,000
Interest
$ 30,680
29,900
29,094
28,249
27,352
121,914
92,664
56,043
12,246
Total
$ 330,680
339,900
354,094
373,249
382,352
2,181,914
2,657,664
3,276,043
2,332,246
11,800,000 s 428,142 S 12,228,142
I
1
1
• CITY OF WEST COVINA 0
I
I
IJ
NOTES TO BASIC FINANCIAL STATEMENTS
(CONTINUED)
June 30, 2011
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 $65,000 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, 2011, the outstanding balance is $2,480,000.
The annual debt service requirements on the 2005 Lease Revenue Bonds as of June 30, 2011 are as
follows:
Year Ending
June 30,
2012
2013
2014
2015
2016
2017 - 2021
2022 - 2026
2027 - 2031
2032 - 2035
Totals
See independent auditors' report.
Principal Interest Total
$ 65,000
65,000
70,000
70,000
75,000
425,000
510,000
615,000
585,000
2,480,000
$ 4,712
4,589
4,465
4,332
4,199
18,725
14,374
9,187
2,831
$ 77,414
$ 69,712
69,589
74,465
74,332
79,199
443,725
524,374
624,187
587,831
$ 2,547,414
-59-
• CITY OF WEST COVINA •
NOTES TO BASIC FINANCIAL STATEMENTS
(CONTINUED)
June 30, 2011
10. LEASE REVENUE BONDS (CONTINUED):
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 $45,000 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 $80,000 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 $1,526,516 was fully
funded at June 30, 2011. At June 30, 2011, the outstanding balance is $17,925,000.
The annual debt service requirements on the 2006 Lease Revenue Bonds as of June 30, 2011 are as
follows:
Year Ending
June 30,
2012
2013
2014
2015
2016
2017 - 2021
2022 - 2026
2027 - 2031
2032 - 2036
Totals
See independent auditors' report.
.1
ri
Principal Interest Total I
$ 125,000
165,000
195,000
235,000
270,000
2,050,000
3,440,000
4,540,000
6,905,000
$ 17,925,000
$ 958,886
952,757
944,707
935,216
923,804
4,366,534
3,672,859
3,622,580
1,223,909
17,601,252
$ 1,083,996
1,117,757
1,139,707
1,170,216
1,193,804
6,416,534
7,112,859
8,162,580
8,128,909
35,526.252
1
-60- 1
0 CITY OF WEST COVINA •
li
1
I
11
11
NOTES TO BASIC FINANCIAL STATEMENTS
(CONTINUED)
June 30, 2011
11. 1996 SPECIAL TAX BONDS:
1996 Special Tax Bonds (The Fashion Plaza Project)
In 1996, the Community Development Commission issued $51,220,000 of Special Tax Refunding
Bonds comprised of $9,980,000 of serial bonds and $41,240,000 of term bonds 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, 2011 totaled $5,002,670. The required reserve at June 30, 2011 was $5,122,000 resulting
in a deficit of $119,330. The outstanding principal balance of the bonds at June 30, 2011 is
$35,870,000.
The annual debt service requirements on the 1996 Special Tax Bonds as of June 30, 2011 are as
follows:
Year Ending
June 30,
Princi a� 1
Interest
Total
2012
$ 1,580,000 $
2,104,800 $
3,684,800
2013
1,770,000
2,004,300
3,774,300
2014
2,055,000
1,889,550
3,944,550
2015
2,340,000
1,757,700
4,097,700
2016
2,515,000
1,612,050
4,127,050
2017 - 2021
16,495,000
5,359,650
21,854,650
2022 - 2026
9,115,000
572,850
9,687.850
Totals S 35,870,000 S 15,300,900 51,170,900
See independent auditors' report.
11
-61-
• CITY OF WEST COVINA
L
NOTES TO BASIC FINANCIAL STATEMENTS
(CONTINUED)
June 30, 2011
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 $130,000 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. The outstanding principal balance of the bonds at
June 30, 2011 is $3,675,000.
The annual debt service requirements on the 1999 Tax Allocation Bonds as of June 30, 2011 are as
follows:
Year Ending
June 30,
2012
2013
2014
2015
2016
2017 - 2021
2022 -2026
2027 - 2030
Totals
See independent auditors' report.
Principal Interest Total
$ 130,000
135,000
140,000
150,000
155,000
860,000
1,075,000
1,030,000
$ 3,675,000
$ 8,820
8,508
8,184
7,848
7,488
31,572
20,316
6,276
$ 99,012
$ 138,820
143,508
148,184
157,848
162,488
891,572
1,095,316
1,036,276
3.774.012
I
0
11
-62- 1
9 CITY OF WEST COVINA 0
rNOTES TO BASIC FINANCIAL STATEMENTS
(CONTINUED)
June 30, 2011
12. TAX ALLOCATION BONDS (CONTINUED):
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. 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 through
September 1, 2025, in amounts ranging from $540,000 to $800,000. At June 30, 2011 the required
reserve of $986,003 was fully funded. The principal balance of outstanding bonds at June 30, 2011
is $9,510,000.
The annual debt service requirements on the 2002 Tax Allocation Refunding Bonds as of
June 30, 2011 are follows:
Year Ending
June 30,
Principal
Interest
Total
2012
$ 540,000 $
446,003 $
986,003
2013
560,000
424,273
984,273
2014
580,000
401,110
981,110
2015
605,000
376,292
981,292
2016
630,000
349,891
979,891
2017 - 2021
3,640,000
1,235,731
4,875,731
2022 - 2026
2,955,000
362,992
3,317,992
Totals
S 9,510,000
3.596292
13,106,292
See independent auditors' report.
-63-
0 CITY OF WEST COVINA
NOTES TO BASIC FINANCIAL STATEMENTS
(CONTINUED)
June 30, 2011
12. TAX ALLOCATION BONDS (CONTINUED):
1998 Housing Set -Aside Tax Allocation Bonds
In 1998, the Community Development Commission issued $4,945,000 of Series A Tax Allocation
Bonds and $1,200,000 of Taxable Series B 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 $195,000 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, 2011 the required reserve of $445,958 was fully funded. The principal
balance of outstanding bonds at June 30, 2011 is $4,395,000.
The annual debt service requirements on the 1998 Housing Set -Aside Tax Allocation Bonds as of
June 30, 2011 are as follows:
Year Ending
June 30,
2012
2013
2014
2015
2016
2017 - 2021
2022 -2026
Totals
Principal Interest Total
$ 195,000
210,000
215,000
230,000
240,000
1,425,000
1,880,000
$ 239;516
228:908
217,683
205,715
192,875
741,183
278,465
$ 434,516
438,908
432,683
435,715
432,875
2,166,183
2,158,465
4,395,000 S 2.104,345 S6.499.345
See independent auditors' report.
-64-
11
I
'I
I
II
• CITY OF WEST COVINA •
L
11
.I
NOTES TO BASIC FINANCIAL STATEMENTS
(CONTINUED)
June 30, 2011
12. TAX ALLOCATION BONDS (CONTINUED):
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
$385,000 to $600,000. The bonds are subject to optional and mandatory redemption provisions. At
June 30, 2011 the required reserve of $722,437 was fully funded. The principal balance of
outstanding bonds at June 30, 2011 is $8,235,000.
The annual debt service requirements on the 2001 Housing Set -Aside Tax Allocation Bonds as of
June 30, 2011 are as follows:
Year Ending
June 30,
2012
2013
2014
2015
2016
2017 - 2021
2022 -2026
2027 - 2031
2032
Totals
Principal
$ 385,000
400,000
420,000
. 435,000
455,000
2,625,000
1,555,000
1,765,000
195,000
8,235,000
Interest
$ 384,376
367,935
350,195
331,167
310,915
1,202,775
634,325
315,375
4,875
3.901.93 8
Total
$ 769,376
767,935
770,195
766,167
765,915
3,827,775
2,189,325
2,080,375
199,875
12.136.938
Compensated Absences
This liability represents the governmental activities portion of total unpaid vacation and
1 compensation time earned by employees of the City. There is no fixed payment schedule for
earned but unpaid compensated absences.
This liability represents the business -type activity portion of total unpaid vacation and
compensation time earned by employees, of the City. There is no fixed payment schedule for
earned but unpaid compensated absences.
See independent auditors report.
-65-
• CITY OF WEST COVINA • 1
NOTES TO BASIC FINANCIAL STATEMENTS ,
(CONTINUED)
June 30, 2011 ,
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
Wells Fargo Bank:
1988 Lease Revenue Bonds
Bank of New York
$ 4,236,765
December 3, 2013
1999 Tax Allocation Bonds
US Bank
3,863,716
October 13, 2013
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
_
14. PLEDGED REVENUE:
The City and its component units have debt issuances outstanding that are collateralized by the 1
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
Annual
Service Payments
Debt Service as a
Amount
(of all debt secured
Percentage of
Description of Pledged Revenue
of Revenue
by this revenue)
Pledged Revenue
Special tax - Special Assessment District
$ 3,591,366
$ 4,152,034
115.6 %
Tax increment - Merged Project Area
13,876,202
3,992,659
28.8 %
Tax increment - Low and Moderate
Income Housing
3,908,435
1,286,572
32.9 %
See independent auditors report.
-66-
11
• CITY OF WEST COVINA •
h
NOTES TO BASIC FINANCIAL STATEMENTS
(CONTINUED)
June 30, 2011
15. CLAIMS AND JUDGMENTS:
The City is exposed to various risks of loss related to its operation, including losses associated with
errors and omissions, injuries to employees and members of the public. The City's Internal Service
Self -Insurance Fund is used to account for and finance its uninsured risks of loss.
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.
Settlements for general liability and worker's compensation claims did not exceed the insurance
coverage 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, 2011,
claims and judgments payable, including estimated claims for incurred but not reported claims,
amounted to $11,270,107.
Changes in the claims and judgments payable ! amounts in fiscal years 2010 and 2011 for the
Self -Insurance Fund are as follows:
Fiscal Year
2009 - 2010
2010 - 2011
Beginning of
Fiscal Year
Liability
$ 8,905,902
11,586,006
See independent auditors' report.
Claims and
Changes in
Estimates
$ 3,408,727
19,156
Claim
Payments
$ (728,623)
(335,055)
End of
Fiscal Year
Liability
$ 11,586,006
11,270,107
-67-
• CITY OF WEST COVINA • 11
NOTES TO BASIC FINANCIAL STATEMENTS '
(CONTINUED)
June 30, 2011
16. CAPITAL LEASE OBLIGATIONS: 1
The following represents governmental activity obligation under capital leases: I
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. As of June 30, 2011
accumulated depreciation on this asset was $2,741,856.
The City obtained financing in the amount of $3,050,000 with an interest rate of 3.92% and
semiannual payments of $251,227 through the end of the lease (June 2015). The outstanding
balance at June 30, 2011 is $1,843,538.
The calculation of the present value of the future lease payments for obligations under capital
leases as of June 30, 2011 is as follows:
Year Ending
June 30.
2012
$ 502,454
2013
502,455
2014
502,454
2015
502,455
Subtotal
2,009,818
Less: amount representing interest
(166,280)
Present value of future lease payments 1,843,538
See independent auditors' report.
-68-
I
• CITY OF WEST COVINA 0
I
I
NOTES TO BASIC.FINANCIAL STATEMENTS
(CONTINUED)
June 30, 2011
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 semiannually through June 1, 2011. The note is payable from the
revenues of the General Fund. During the year ended June 30, 2011, the note was paid in full.
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, 2011, the outstanding balance is $248,000.
The annual debt service requirements on the Butler note as of June 30, 2011 are as follows:
Year Ending
June 30,
2012
Valencia Note
Principal Interest Total
248,000 4,179 $ 252,179
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, 2011 is $829,424.
See independent auditors' report.
• CITY OF WEST COVINA •
NOTES TO BASIC FINANCIAL STATEMENTS
(CONTINUED)
June 30, 2011
17. NOTES PAYABLE (CONTINUED):
Valencia Note (Continued)
The annual debt service requirements on the Valencia note as of June 30, 2011 are as follows:
Year Ending
June 30,
2012
2013
2014
2015
2016
2017 - 2021
2022 - 2023
Totals
Principal
$ 66,336
66,917
67,512
68,109
68,705
352,656
139,189
Interest
$ 6,972
6,392
5,806
5,215
4,618
13,955
1,219
Total
$ 73,308
73,309
73,318
73,324
73,323
366,611
140,408
$ 829,424 $ 44,177 $ 873,601
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 semiannually through June 22, 2023.
The note is payable from the revenues of the General Fund. At June 30, 2011, the outstanding
balance is $1,108,498.
The annual debt service requirements on the California Energy Commission loan as of
June 30, 2011 are as follows:
Year Ending
June 30.
2012
2013
2014
2015
2016
2017 - 2021
2022 - 2023
Totals
See independent auditors' report.
Principal
$ 71,367
74,747
78,148
81,705
85,329
489,010
228,192
Interest
$ 49,223
45,843
42,442
38,885
35,261
113,940
12.986
Total
$ 120,590
120,590
120,590
120,590
120,590
602,950
241.178
$ 1 1,108,498 338,580 S 1.447.078
-70-
1 • CITY OF WEST COVINA •
NOTES TO BASIC FINANCIAL STATEMENTS
(CONTINUED)
June 30, 2011
■ 18. DEVELOPER AGREEMENT PAYABLE:
Outstanding
' Balance at
June 30, 2011
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
$46,115,348. The Commission has made payments to the developer totaling
$16,216,080. 29,899,268
19. DUE TO THE COUNTY OF LOS ANGELES:
1 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. The repayment is made annually from tax increment
revenues and is based on a calculation of excess tax increment revenues from the sub -project area.
The amount of repayment due for the 2011 fiscal year is $1,314,327. As the repayment period has
begun, the outstanding balance now accrues interest at 7%. The balance at June 30, 2011 is
$10,300,483.
' 20. SHORT-TERM DEBT:
' 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 was paid off on May 31, 2011.
21. FUND BALANCE CLASSIFICATION:
The City has implemented Governmental Accounting Standards Board Statement No. 54, "Fund
Balance Reporting and Governmental Fund Type Definitions", for the year ended June 30, 2011.
The fund balances reported on the fund statements now consist of the following categories:
' Nonspendable Fund Balance - This includes amounts that cannot be spent because they are either
(a) not in spendable form or (b) legally or contractually required to be maintained intact.
Restricted Fund Balance - This includes amounts that can be spent only for the specific purposes
stipulated by constitution, external resource providers, or through enabling legislation.
Committed Fund Balance - This includes amounts that can be used only for the specific purposes
determined by a formal action of the city council.
See independent auditors' report.
' -71-
• CITY OF WEST COVINA •
NOTES TO BASIC FINANCIAL STATEMENTS
(CONTINUED)
June 30, 2011
21. FUND BALANCE CLASSIFICATION (CONTINUED):
Assigned Fund Balance - This includes amounts that are designated by the city council for specific
purposes.
Unassigned Fund Balance - This is the residual classification that includes all spendable amounts
not contained in the other classifications
When an expenditure is incurred for purposes for which both restricted and unrestricted fund
balances are available, the City's policy is to apply restricted fund balance first.
When an expenditure is incurred for purposes for which committed, assigned or unassigned fund
balances are available, the City's policy is to apply committed fund balance first, then assigned
fund balance, and finally unassigned fund balance.
Debt Service Funds Capital Projects Funds
Community Community Other Total
Development Development Governmental Governmental
General City Commission City Commission Funds Funds
Nonspendable:
Prepaids and
other assets $ 60,988 $ 64,479 $ 2,118 $ - $ 197,041 $ 5,838 $ 330,464
Land held
for resale - - - - 67,040 - 67,040
Advances to
other funds 20,766,068 - - - 7,873,577 - 28,639,645
Restricted:
Debt service - 18,289,179 6,012,989 - 1,367,251 - 25,669,419
Low and Moderate
income housing - - - - 6,169,792 - 6,169,792
Special revnue
fund purposes - - - - - 12,469,037 12,469,037
Assigned:
Debt service - - - - - - -
Capital projects - - - 1,300,258 - 664,688 1,964,946
Unassigned 8,786,221 - (17.077.214) - (1.696.078). (156,488) (10.143.559)
Total 29,6-Li 277 $ 1R,i5i,fi5R S (11062,107) R 1,300,258 S 13,978,673 $ 12993075 $ 65,1667.94
See independent auditors' report.
-72-
0 CITY OF WEST COVINA •
NOTES TO BASIC FINANCIAL STATEMENTS
(CONTINUED)
jJune 30, 2011
22. ACCUMULATED FUND DEFICITS:
' The following funds reported deficits in fund balances as of June 30, 2011:
Deficit
Balance
Major Fund:
CDC Debt Service Fund $ 11,062,107
tOther Governmental Funds - Special Revenue Funds:
Transportation Development Act $ 32,093
Grants 34,726
Community Development Block Grants 79,078
Inmate Welfare 6,009
' Enterprise Fund:
Computer Services 999,624
Internal Service Funds:
Self -Insurance 5,240,988
Management's explanations for, the resolution of significant accumulated fund deficits are
summarized as follows:
CDC Debt Service Fund
The deficit fund balance of $11,062,107 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. The
advances are scheduled to be repaid to the General Fund through 2025 from the future tax
increment revenues.
Computer Services Enterprise Fund
The deficit in fund balance of $999,624 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.
1
See independent auditors' report.
1 -73-
• CITY OF WEST COVINA 0
I
NOTES TO BASIC FINANCIAL STATEMENTS
(CONTINUED)
June 30, 2011
22. ACCUMULATED FUND DEFICITS (CONTINUED):
Self -Insurance Internal Service Fund
The deficit in fund balance of $5,240,988 is the result of payment of damages in various claims and
litigation matters against the City and the increased legal costs in defending those matters. It is
anticipated that this deficit fund balance will be funded with increased charges to the operating
funds of the City in future years.
23. 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, 2010 to June 30, 2011 has
been determined by an actuarial valuation of the plan as of June 30, 2008. The contribution
rate indicated for the period is 27.535% of payroll for the safety plan and 9.660% 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, 2011, the contribution rate is multiplied by the
payroll of covered employees that were paid during the period from July 1, 2010 to
June 30, 2011.
See independent auditors' report.
-74-
• CITY OF WEST COVINA •
NOTES TO BASIC FINANCIAL STATEMENTS
(CONTINUED)
June 30, 2011
23. DEFINED BENEFIT PENSION PLANS (CONTINUED):
a. California Public Employee Retirement System (PERS) (Continued):
A summary of principle assumptions and methods used to determine the ARC is shown below.
Safety
Miscellaneous
Valuation Date
June 30, 2008
June 30, 2008
Actuarial Cost Method
Entry Age Actuarial Cost Method
Entry Age Actuarial Cost Method
Amortization Method
Level Percent of Payroll
Level Percent of Payroll
'
Average Remaining
Period
30 years as of the valuation date
30 years as of the valuation date
Asset Valuation Method
15 year smoothed market
15 year smoothed market
Actuarial Assumptions:
Investment Rate
7.75% (net of administrative
7.75% (net of administrative
of Return
expenses)
expenses)
Projected Salary,
3.25% to 13.15% depending
3.25% to 14.45% depending
Increases
on age, service and type of
on age, service and type of
employment
employment
tInflation
3.00%
3.00%
1
Payroll Growth
3.25%
3.25%
Individual Salary
A merit scale varying by
A merit scale varying by
Growth
duration of employment
duration of employment
1
coupled with an assumed
coupled with and assumed
annual inflation component
annual inflation component
of 3.0% and an annual
of 3.0% and an annual
production growth of 0.25%
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.
The unfunded actuarial liabilities for both the safety and miscellaneous plans are amortized
Iover a period ending June 30, 2038.
See independent auditors' report.
I -75-
• CITY OF WEST COVINA •
NOTES TO BASIC FINANCIAL STATEMENTS
(CONTINUED)
June 30, 2011
23. DEFINED BENEFIT PENSION PLANS (CONTINUED):
a. California Public Employee Retirement System (PERS) (Continued):
The Schedule of Funding Progress, presented as required supplementary information, 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 as required supplementary information presents multi -year trend
information about whether the 'actuarial value of plan assets is increasing or decreasing over
time relative to the actuarial accrued liability for benefits.
Three -Year Trend Information - Safety Annual Pension Cost
(Employer Contribution)
Fiscal Annual Pension Percentage Net Pension
Year Cost (APC) APC Contributed Obligation
6/30/09 $ 4,182,392 100% $ -
6/30/10 5,253,816 100% -
6/30/11 4,872,146 100% -
Three -Fear Trend Information - Miscellaneous Annual Pension Cost
(Employer Contribution)
Fiscal Annual Pension Percentage Net Pension
Year Cost (APC) APC Contributed Obligation
6/30/09 $ 1,083,821 100% $ -
6/30/10 1,219,614 100% -
6/30/11 1,177,367 100% -
b. Public Agency Retirement System (PARS):
Effective November 1, 2007, the City established two retirement plans with the Public Agency
Retirement System (PARS) to supplement the current CalPERS retirement benefits. PARS is a
single -employer defined benefit plan. It meets the requirements of a pension trust under
California Government Code. Phase II Systems is the PARS Trust Administrator.
See independent auditors' report.
-76-
[I
I
1
h
I
' • CITY OF WEST COVINA 0
' NOTES TO BASIC FINANCIAL STATEMENTS
(CONTINUED)
June 30, 2011
' 23. DEFINED BENEFIT PENSION PLANS (CONTINUED):
I
11
b. Public Agency Retirement System (PARS) (Continued):
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 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, 2011, the City's required contributions were $112,714 and actual
contributions were $174,492. The required contribution was based on the June 30, 2009
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% (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.
Three -Year Trend Information - EPMC Annual Pension Cost
(Employer Contribution)
Fiscal Annual Pension Percentage Net Pension
Year Cost (APQ APC Contributed Obligation
6/30/09 $ 95,989 100% $ -
6/30/10 187,218 100% -
6/30/11 174,492 100% -
See independent auditors report.
1 -77-
9 CITY OF WEST COVINA •
NOTES TO BASIC FINANCIAL STATEMENTS
(CONTINUED)
June 30, 2011
23. DEFINED BENEFIT PENSION PLANS (CONTINUED):
b. Public Agency Retirement System (PARS) (Continued):
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 Ca1PERS 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, 2011, the City's required and actual contributions were $52,718. The required
contribution was based on the June 30, 2009 actuarial valuation using the entry age normal
actuarial cost method. The unfunded actuarial liability is based on a 20-year open amortization
(10-years for 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, presented as required supplementary information, 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 as required supplementary information, 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.
Three -Year Trend Information — Executive Annual Pension Cost
(Employer Contribution)
Fiscal Annual Pension Percentage
Year Cost (APCI APC Contributed
6/30/09 $ 168,074 100%
6/30/10 167,382 100%
6/30/11 52,718 100%
See independent auditors' report.
-78-
Net Pension
Obligation
r�
i-1
• CITY OF WEST COVINA
NOTES TO BASIC FINANCIAL STATEMENTS
(CONTINUED)
June 30, 2011
I24. DEFINED CONTRIBUTION PENSION PLAN:
Plan Description
During the 1991-1992 fiscal year, the City established the West Covina Part -Time Retirement Plan,
a defined contribution retirement plan, for all nonbenefited, part-time employees in accordance
with Internal Revenue Code Section 457, to conform to Section 3121(b)(7)(F) of the Internal
Revenue Code added by the Omnibus Budget Reconciliation Act of 1990. The plan is
administered by Nationwide Retirement Solutions. The plan was established by the authority of
the City Council who retains the authority to amend the plan.
A defined contribution pension plan provides pension benefits in return for services rendered,
provides an individual account for each participant, and specifies how contributions to the
individual's account are to be determined instead of specifying the amount of benefits the
individual is to receive. Under a defined contribution pension plan, the benefits a participant will
receive depend solely on the amount contributed to the participant's account and the returns earned
on investments of the contributions.
' Part-time, nonbenefited, non ersable employees of the City must participate in the plan.
During 2010-11, 193 part-time employees participated in the plan. All contributions to the plan
vest immediately. An employee who leaves the City is entitled to all contributions and earnings
applied -to the individual's account through the date of separation, less legally required income tax
withholding. Contribution levels into the deferred compensation plan were established by City
' Council resolution at 0% for the City and 7.5% for nonbenefited, nonpersable part-time employees.
1 During the year, total required and actual contributions amounted to $103,485 and covered payroll
for the year ended June 30, 2011 totaled 1,451,584. No contributions were made by the City and
employees contributed $103,485 (7.5% of current covered payroll). Total plan assets at June 30,
' 2011 were $752,656. Plan assets are held in trust for the exclusive benefit of participants and their
beneficiaries and, therefore, are not included in the financial statements.
I
1
See independent auditors' report.
-79-
CITY OF WEST COVINA 0
NOTES TO BASIC FINANCIAL STATEMENTS
(CONTINUED)
June 30, 2011
25. OTHER POST -EMPLOYMENT BENEFITS OTHER THAN PENSIONS:
a. 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 ($910 and $966 per month in2010 and 2011
respectively).
• Fire - Effective January 1, 2010, the Kaiser Employee + 1 Los Angeles
Area Region Rate ($826 and $868 per month in 2010 and 2011
respectively).
• Miscellaneous - At the PEMHCA minimum amount ($105.00 and $108
per month in 2010 and 2011 respectively).
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 September 1, 2005), Fire Management and Fire bargaining
units
• $10,500 Police bargaining unit
b. 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 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, 2011, the City contributed $1,333,986
to the plan, including $1,330,816 for current premiums (100% of total premiums).
See independent auditors' report.
I
1
LlI
' • CITY OF WEST COVINA •
NOTES TO BASIC FINANCIAL STATEMENTS
(CONTINUED)
' June 30, 2011
1 25. OTHER POST -EMPLOYMENT BENEFITS OTHER THAN PENSIONS:
I
c. 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
I
Interest on net OPEB obligation
-
Adjustment to annual required contribution
-
Annual OPEB cost (expense)
Actual contributions made (including premiums paid)
3,317,000
(1,333,986)
Increase in net OPEB obligation
1,983,014
Net OPEB Obligation - beginning of year
3,592,477
Net OPEB Obligation - end of year
5.575.491
1
The City's annual OPEB cost, the percentage of annual OPEB cost contributed to the plan, and
the net OPEB obligation for 2011 and the two preceding years were as follows:
Annual
Fiscal
Annual
Year
OPEB Cost
6/30/09
$ 2,437,000
6/30/10
3,317,000
6/30/11
3,317,000
See independent auditors' report.
Percentage of
OPEB Cost
Contributed
43.0%
33.6%
40.2%
Net
OPEB
Obligation
$ 1,390,000
3,592,477
5,575,491
' -81-
• CITY OF WEST COVINA • 1
NOTES TO BASIC FINANCIAL STATEMENTS ,
(CONTINUED)
June 30, 2011 ,
25. OTHER POST -EMPLOYMENT BENEFITS OTHER THAN PENSIONS: I
d. 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.
e. 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. I
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 I % 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.
26. 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 transferred the sales tax increment due to the Fashion Plaza expansion project from the ,
City to the Agency.
See independent auditors' report.
-82- '
' • CITY OF WEST COVINA •
' NOTES TO BASIC FINANCIAL STATEMENTS
(CONTINUED)
June 30, 2011
' 26. OTHER COMMITMENTS (CONTINUED):
1 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
1
1
U
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.
27. TRANSFERS IN/TRANSFERS OUT:
The following schedule summarizes the City's transfer activity:
Transfers In Transfers Out
General Fund Other Governmental Funds
Computer Services
Enterprise Fund
City Debt Service Fund
CDC Capital Projects Fund
Other Governmental Funds
Internal Service Funds
Total
See independent auditors' report.
General Fund
CDC Debt Service Fund
CDC Debt Service Fund
General Fund
Other Governmental Funds
Internal Service Funds
Amount
$ 1,570,689 (a)
95,934
850,000
1,111,000
7,008,435 (b)
66,269
469,133
204,417
11,375,877
1 -83-
• CITY OF WEST COVINA • ,
NOTES TO BASIC FINANCIAL STATEMENTS
(CONTINUED)
June 30, 2011 '.
27. TRANSFERS IN/TRANSFERS OUT (CONTINUED): I
(a) The Traffic Safety Special Revenue Fund and the Public Safety Augmentation Special Revenue
Fund transferred $950,000 and $525,000, respectively, to the General Fund to reimburse the
General Fund for traffic and public safety related activities.
(b) The CDC Debt Service Fund transferred $3,908,435 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 $3,000,000 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.
28. RECENT CHANGES IN LEGISLATION AFFECTING CALIFORNIA REDEVELOPMENT
AGENCIES:
On June 29, 2011, the Governor of the State of California signed Assembly Bills XI 26 and 27 as ,
part of the State's budget package. Assembly Bill X1 26 requires each California redevelopment
agency to suspend (effective July 1, 2011) nearly all activities except to implement existing
contracts, meet already -incurred obligations, preserve its assets and prepare for the impending '
dissolution of the agency. Assembly Bill X1 27 provides a means for redevelopment agencies to
continue to exist and operate by means of a Voluntary Alternative Redevelopment Program. Under
this program, each city would adopt an ordinance agreeing to make certain payments to the County 1
Auditor Controller in fiscal year 2011-12 and annual payments . each fiscal year thereafter.
Assembly Bill X1 26 indicates that the city "may use any available funds not otherwise obligated
for other uses" to make this payment. The City of West Covina intends to use tax increment
allocable to its redevelopment agency for this purpose. The amounts to be paid after fiscal
year 2011-12 and 2012-13 have yet to be determined by the state legislature. ,
Assembly Bill X1 26 directs the State Controller of the State of California to review the propriety
of any transfers of assets between redevelopment agencies and other public bodies that occurred '
after January 1, 2011. If the public body that received such transfers is not contractually committed
to a third party for the expenditure or encumbrance of those assets, the State Controller is required
to order the available assets to be transferred to the public body designated as the successor agency '
by Assembly Bill XI 26.
See independent auditors report.
-84- '
0 CITY OF WEST COVINA
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NOTES TO BASIC FINANCIAL STATEMENTS
(CONTINUED)
June 30, 2011
28. RECENT CHANGES IN LEGISLATION AFFECTING CALIFORNIA REDEVELOPMENT
AGENCIES (CONTINUED):
In the event that Assembly Bill X1 26 is upheld, the receivable recognized by funds of the City that
had previously loaned or advanced funds to the redevelopment agency may become uncollectible
with a loss recognized by the advancing funds. Funds of the City may also be impacted by the
elimination of reimbursements previously paid to the City by the redevelopment agency for shared
administrative services.
The League of California Cities and the California Redevelopment Association (CRA) filed a
lawsuit on July 18, 2011 on behalf of cities, counties and redevelopment agencies petitioning the
California Supreme Court to overturn Assembly Bills XI 26 and 27 on the grounds that they
violate the California Constitution. On August 11, 2011, the California Supreme Court issued a
stay of all of Assembly Bill X1 27 and most of Assembly Bill X1 26. The California Supreme
Court stated in its order that "the briefing schedule is designed to facilitate oral argument as early
as possible in 2011, and a decision before January 15, 2012." A second order issued by the
California Supreme Court on August 17, 2011 indicated that certain provisions of Assembly
Bills XI 26 and 27 were still in effect and not affected by its previous stay, including requirements
to file an appeal of the determination of the community remittance payment by August 15, the
requirement to adopt an Enforceable Obligations Payment Schedule ("EOPS") by August 29, 2011,
and the requirement to prepare a preliminary draft of the initial Recognized Obligation Payment
Schedule ("ROPS") by September 30, 2011.
Because the stay provided by Assembly Bill X1 26 only affects enforcement, each agency must
adopt an Enforceable Obligation Payment Schedule prior to September 30, as required by the
statute. Enforceable obligations include bonds, loans and payments required by the federal or State
government; legally enforceable payments required in connection with agency employees such as
pension payments and unemployment payments, judgments or settlements; legally binding and
enforceable agreements or contracts; and contracts or agreements necessary for the continued
administration or operation of the agency that are permitted for purposes set forth in AB I 26.
See independent auditors' report.
1
9 CITY OF WEST COVINA 0
NOTES TO BASIC FINANCIAL STATEMENTS
(CONTINUED)
June 30, 2011
28. RECENT CHANGES IN LEGISLATION AFFECTING CALIFORNIA REDEVELOPMENT
AGENCIES (CONTINUED):
On August 23, 2011, The City Council Adopted Resolution Number 2011-49 and the Commission
Board adopted Resolution Number 613 declaring their intention to enact an ordinance whereby the
City and the Commission elect to participate in the Voluntary Alternative Redevelopment Program
in order to permit the continued existence and operation of the Commission, in the event Assembly
Bills X1 26 and/or 27 are upheld as constitutional. The ordinance has not been adopted because
the California State Supreme Court's September 13, 2011 stay prohibited such actions until they
render judgment on the issues under their review. Should the voluntary program be found valid,
the initial payment by the Commission is estimated to be $5.85 million with one half due on
January 15, 2012 and the other half due May 15, 2012. Thereafter, an estimated $1.4 million will
be due annually. The amounts to be paid after fiscal year 2011-12 and 2012-13 have yet to be
determined by the state legislature. The semi-annual payments will be due on January 15 and
May 15 of each year and would increase or decrease with changes in tax increment. Additionally,
an increased amount would be due to schools if any new debt is incurred. Assembly Bill X1 27
allows a one-year reprieve on the Commission's obligation to contribute 20% of tax increment to
the low -and -moderate -income housing fund so as to permit the Commission to assemble sufficient
funds to make its initial payments.
On December 29, 2011, the California Supreme Court rendered an opinion upholding Assembly
Bill Ix 26 and invalidating Assembly Bill Ix 27. The impact of this decision is not reflected in the
accompanying financial statements.
29. SUBSEQUENT EVENT
On July 1, 2011, the City issued $9,490,000 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, 2012.
See independent auditors' report.
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CITY OF WEST COVINA
'
SCHEDULES OF FUNDING PROGRESS
'
For the year ended June 30, 2011
Ca1PERS SAFETY PENSION PLAN
'
(dollar amounts in thousands)
Unfunded
'
Actuarial
Actuarial
Accrued
Actuarial Value Accrued Funded
Annual
UAAL as a
Actuarial
Liability
of Assets - Liability Ratio
Covered
% of
Valuation
(AAL)
(AVA) (UAAL) AVA
Payroll
Payroll
Date
(a)
(b) (a) - (b) (b)/(a)
(c)
[(a)-(b)]/c]
06/30/08
$ 233,093
$ 197,914 $ 35,179 84.91%
$ 19,632
179.19%
06/30/09
255,522
204,352 51,170 79.97%
20,372
251.18%
06/30/10
265,268
211,332 53,936 79.67%
19,282
279,72%
CalPERS MISCELLANEOUS PENSION PLAN
(dollar amounts in thousands)
Unfunded
Actuarial
Actuarial
Accrued
Actuarial Value Accrued Funded
Annual
UAAL as a
Actuarial
Liability
of Assets Liability Ratio
Covered
% of
Valuation
(AAL)
(AVA) (UAAL) AVA
Payroll
Payroll
Date
(a)
(b) (a) - (b) (b)/(a)
(c)
[(a)-(b)]/c]
06/30/08
$ 99,307
$ 96,052 $ 3,255 96.72%
$ 13,833
23.53%
06/30/09
111,022
99,657 11,365 89.76%
13,834
82.15%
'
06/30/10
114,029
103,556 10,473 90.82%
13,494
77.61%
'
EPMC REPLACEMENT SUPPLEMENTAL RETIREMENT
PLAN
Unfunded
'
Actuarial
Accrued
Actuarial
Actuarial Value Accrued Funded
Annual
UAAL as a
Actuarial
Liability
of Assets Liability Ratio
Covered
% of
Valuation
(AAL)
(AVA) (UAAL) AVA
Payroll
Payroll
Date
(a)
(b) (a) - (b) (b)/(a)
(c)
[(a)-(b)]/c]
10/01/07
$ 1,359,333
$ - $ 1,359,333 0.00%
$ 31,852,549
4.27%
'
06/30/09
1,028,173
27,130 1,001,043 2.64%
23,766,042
4.21%
ISee independent auditors' report.
1
-89-
CITY OF WEST COVINA 0
SCHEDULES OF FUNDING PROGRESS
(CONTINUED)
For the year ended June 30, 2011
SUPPLEMENTAL RETIREMENT PLAN FOR EXECUTIVE STAFF
Unfunded
Actuarial
Actuarial
Accrued
Actuarial Value
Accrued
Funded
Annual
UAAL as a
Actuarial
Liability
of Assets
Liability
Ratio
Covered
% of
Valuation
(AAL)
(AVA)
(UAAL)
AVA
Payroll
Payroll
Date
(a)
(b)
(a) - (b)
(b)/(a)
(c)
[(a)-(b)]/c]
11/01/07
$ 852,615
$ -
$ 852,615
0.00%
$ 1,972,119
43.23%
06/30/09
3,083,890
279,847
2,804,043
9.07%
1,665,591
168.35%
OTHER POST -EMPLOYMENT BENEFIT PLAN
(dollar amounts in thousands)
Actuarial
Actuarial
Value
Accrued
Unfunded
UAAL as a
Actuarial
of Assets
Liability
AAL
Funded
Covered
% of
Valuation
(AVA)
(AAL)
(UAAL)
Ratio
Payroll
Payroll
Date
(a)
(b)
(b) - (a)
(a)/(b)
(c)
[(b)-(a)]/c]
07/01/09
$ -
$ 45,391
$ 45,391
0.00%
$ 30,254
150.03%
See independent auditors' report.
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SUPPLEMENTARY SCHEDULES
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CITY OF WEST COVINA
OTHER GOVERNMENTAL FUNDS
June 30, 2011
SPECIAL REVENUE FUNDS are used to account for specific revenues that are legally restricted to
expenditure for particular purposes.
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.
ILME
CITY OF WEST COVINA •
COMBINING BALANCE SHEET
OTHER GOVERNMENTAL FUNDS
June 30, 2011
ASSETS
Cash and investments
Receivables, net:
Accounts
Taxes
Interest
Notes and loans
Due from other funds
Due from other agencies
Prepaids and other assets
TOTAL ASSETS
LIABILITIES AND FUND BALANCES
LIABILITIES:
Accounts payable
Other accrued liabilities
Due to other funds
Deferred revenue
TOTAL LIABILITIES
FUND BALANCES:
Nonspendable
Restricted
Assigned
Unassigned
TOTAL FUND BALANCES
TOTAL LIABILITIES AND FUND BALANCES
See independent auditors' report.
Total
Special
Capital
Other
Revenue
Projects
Governmental
Funds
Funds
Funds
$ 12,494,249
$ 669,179
$ 13,163,428
11,062
-
11,062
454,542
-
454,542
17,332
786
18,118
4,184,051
-
4,184,051
6,522
-
6,522
812,195
-
812,195
5,838
-
5,838
$ 17,985,791
$ 669,965
$ 18,655,756
$ 446,066 $
5,277
$ 451,343
105,552
-
105,552
664,746
-
664,746
4,451,040
-
4,451,040
5,667,404
5,277
5,672,681
5,838
-
5,838
12,469,037
-
12,469,037
-
664,688
664,688
(156,488)
-
(156,488)
12,318,387
664,688
12,983,075
$ 17,985,791 $
669,965
$ 18,655,756
-94-
9 CITY OF WEST COVINA 0
COMBINING STATEMENT OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCES - OTHER GOVERNMENTAL FUNDS
For the year ended June 30, 2011
REVENUES:
Taxes
Special assessments
Fines and forfeitures
Investment 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 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 - BEGINNING OF YEAR
FUND BALANCES - END OF YEAR
See independent auditors' report.
Total
Special
Capital
Other
Revenue
Projects
Governmental
Funds
Funds
Funds
$ 5,129,967
$ 56,723
$ 5,186,690
5,210,062
-
5,210,062
899,882
-
899,892
77,095
4,178
81,273
6,600,264
-
6,600,264
166,673
-
166,673
204,357
-
204,357
494,137
-
494,137
18,782,437
60,901
18,843,338
8,271
2,325
10,596
1,090,665
4,230
1,094,895
10,816,392
78,269
10,894,661
3,314,044
87,464
3,401,508
170,447
-
170,447
15,399,819
172,299
15,572,107
3,382,618
(111,387)
3,271,231
535,402
-
535,402
(2,039,822)
-
(2,039,822)
(1,504,420)
-
(1,504,420)
1,878,198
(111,387)
1,766,811
10,440,189
776,075
11,216,264
$ 12,318,387
$ 664,688
$ 12,983,075
-95-
0 CITY OF WEST COVINA 0
OTHER SPECIAL REVENUE FUNDS
June 30, 2011
SPECIAL REVENUE FUNDS are used to account for specific revenues that are legally restricted to
expenditure for particular purposes.
Recreation Programs - This fund accounts for fees charged to participants for recreation programs
Drug Rebate Enforcement - The 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 - This fund accounts for business improvement taxes which are restricted
to economic development activities.
Air Quality Improvement - 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 - This fund accounts for the 0.5% sales tax collected in Los Angeles County which is
used for transportation programs and projects.
Proposition C - This fund accounts for gasoline taxes which are restricted for transportation programs
and projects.
Traffic Safety - This fund accounts for the vehicle code fines expended for traffic safety enforcement.
State Gas Tax - This fund accounts for the City's proportionate share of gas tax monies collected by
the State of California and Proposition 113 monies which are used for street construction and
maintenance.
Traffic Congestion Relief - This fund accounts for revenues and expenditures related to the City's
allocation of AB2898 monies received from the State.
Police Special Programs - This fund accounts for donations received and expenditures related to
various police programs.
Transportation Development Act - This fund accounts for regional Transportation Development Act
funds received from Los Angeles County which are used for local streets and roads.
AB939 - This fund accounts for programs to reduce solid waste deposits in local landfills, pursuant to
AB939.
0 CITY OF WEST COVINA 0
n
OTHER SPECIAL REVENUE FUNDS
(CONTINUED)
June 30, 2011
Grants - This fund accounts for various Federal, State of California, and local grants that are restricted
to expenditures for specific programs and projects.
Community Development Block Grant (CDBG) - This fund accounts for activities of the Community
Development Block Grant received from the U.S. Department of Housing and Urban Development.
Tree - This fund accounts for developer contributions restricted for the replacement of trees and new
urban forestation projects.
Inmate Welfare - This fund accounts for revenues from items sold to inmates. The revenues are used
to enhance inmate welfare.
Public Safety - This fund accounts for sales tax revenue legally restricted for public safety. Revenue is
used to augment police operations.
COPS Grant - This fund accounts for revenue from the State restricted for supplementing police
operations.
Special Assessments - 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 - 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 - 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 - This fund accounts for monies received from the. State as a result of the
relinquishment of the City of a certain portion of North Azusa Avenue.
Fire Training - This fund accounts for fire training programs.
Measure R - This fund accounts for sales tax revenues collected in Los Angeles County to provide
' transportation related projects and programs.
Integrated Waste Management - This fund accounts for landfill local enforcement agency activities and
' waste management programs, other than A13939.
West Covina (WC) Community Services Foundation - This fund accounts for activity of the West
Covina Community Services Foundation, a 501(c)(3) nonprofit organization.
1 -97-
CITY OF WEST COVINA •
COMBINING BALANCE SHEET
OTHER SPECIAL REVENUE FUNDS
June 30, 2011
ASSETS
Cash and investments
Receivables, net
Accounts
Taxes
Interest
Notes and loans
Due from other funds
Due from other agencies
Prepaids and other assets
TOTAL ASSETS
LIABILITIES AND FUND BALANCES
LIABILITIES:
Accounts payable
Other accrued liabilities
Due to other funds
Deferred revenue
TOTAL LIABILITIES
FUND BALANCES (DEFICITS):
Nonspendable
Restricted
Unassigned
TOTAL FUND BALANCES (DEFICITS)
TOTAL LIABILITIES AND FUND BALANCES
See independent auditors' report.
Drug Business
Recreation Rebate Improvement
Programs Enforcement Tax
$ - $ 687,394 $ 31,744
- 1,057 46
- 11,064
$ - $ 699,515 $ 31,790
$ - $ 1,345 $ -
- 1,345 -
698,170 31,790
698,170 31,790
$ - $ 699,515 $ 31,790
-98-
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
Air State Traffic Police Transportation
Quality Proposition Proposition Traffic Gas Congestion Special Development
Improvement A C Safety Tax Relief Programs Act
$ 69,681 $ 208,345 $ 2,364,048 $ 255,173 $ 1,609,103 $ - $ 39,377 $ -
- - - 45,024 - - - -
116 19 3,222 394 1,736 - 47 -
27,379 - - - 330,297 - - 86,726
$ 97,176 $ 208,364 $ 2,367,270 $ 300,591 $ 1,941,136 $ - $ 39,424 $ 86,726
$ 457 $ - $ 34,302 $ 8,690 $ 18,286 $ - $ 60 $ 2,880
252 603 5,261 1,393 7,566 - - -
- - - - - - - 115,939
709 603 39,563 10,093 25,852 - 60 118,819
96,467 207,761 2,327,707 290,508 1,915,284 - 39,364 -
- - - - - - - (32,093)
96,467 207,761 2,327,707 290,508 1,915,284 - 39,364 (32,093)
$ 97,176 $ 208,364 $ 2,367,270 $ 300,591 $ 1,941,136 $ - $ 39,424 $ 86,726
-99-
(Continued)
• CITY OF WEST COVINA
COMBINING BALANCE SHEET
OTHER SPECIAL REVENUE FUNDS
(CONTINUED)
June 30, 2011
ASSETS
Cash and investments
Receivables, net
Accounts
Taxes
Interest
Notes and loans
Due from other funds
Due from other agencies
Prepaids and other assets
TOTAL ASSETS
LIABILITIES AND FUND BALANCES
LIABILITIES:
Accounts payable
Other accrued liabilities
Due to other funds
Deferred revenue
TOTAL LIABILITIES
FUND BALANCES (DEFICITS):
Nonspendable
Restricted
Unassigned
TOTAL FUND BALANCES (DEFICITS)
TOTAL LIABILITIES AND FUND BALANCES
See independent auditors' repot.
AB939 Grants
Community
Development
Block
Grant (CDBG)
$ 317,247 $ 468,017 $ -
3,937 - -
41,560 - -
447 737 -
- - 4,184,051
- 338,909 17,820
- - 4,582
$ 363,191 $ 807,663 $ 4,206,453
$ 2,378 $ 56,962 $ 23,999
732 68,620 1,802
- 467,638 57,859
- 249,169 4,201,871
3,110 842,389 4,285,531
- - 4,582
360,081 - -
- (34,726) (83,660)
360,081 (34,726) (79,078)
$ 363,191 $ 807,663 $ 4,206,453
M(IIIZ
0 •
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1
1
1
Art in North
Inmate Public COPS Special Charter Public Azusa
Tree Welfare Safety Grant Assessments Cable Places Relinquishment
$ 1,099 $ - $ - $ 154,400 $ 4,354,057 $ 411,041 $ 79,985 $ 407,806
- - 98,302 51,568 200,546 - - -
2 - - 251 6,622 584 110 580
- - - 6,522 - - -
- - - 1,124 132 - - -
$ 1,101 $ - $ 98,302 $ 207,343 $ 4,567,879 $ 411,625 $ 80,095 $ 408,386
$ - $ 1,042 $ - $ 15,477 $ 228,396 $ - $ - $ -
965 17,135 - 92. -
- 4,967 14,642 - - - - -
- 6,009 14,642 16,442 245,531 - 92 -
- - - 1,124 132 - - -
1,101 - 83,660 189,777 4,322,216 411,625 80,003 408,386
- (6,009) - - - - - -
1,101 (6,009) 83,660 190,901 4,322,348 411,625 80,003 408,386
$ 1,101 $ - $ 98,302 $ 207,343 $ 4,567,879 $ 411,625 $ 80,095 $ 408,386
-101-
(Continued)
• CITY OF WEST COVINA
COMBINING BALANCE SHEET
OTHER SPECIAL REVENUE FUNDS
(CONTINUED)
June 30, 2011
ASSETS
Cash and investments
Receivables, net
Accounts
Taxes
Interest
Notes and loans
Due from other funds
Due from other agencies
Prepaids and other assets
TOTAL ASSETS
LIABILITIES AND FUND BALANCES
LIABILITIES:
Accounts payable
Other accrued liabilities
Due to other funds
Deferred revenue
TOTAL LIABILITIES
FUND BALANCES (DEFICITS):
Nonspendable
Restricted
Unassigned
TOTAL FUND BALANCES (DEFICITS)
TOTAL LIABILITIES AND FUND BALANCES
See independent auditors' report.
Integrated
Fire Waste
Training Measure R Management
$ - $ 970,917 $ -
- - 17,542
- 1,268 -
$ - $ 972,185 $ 17,542
$ - $ 51,411 $ 283
792 339
- 3,701
52,203 4,323
919,982 13,219
- 919,982 13,219
$ - $ 972,185 $ 17,542
- 102 -
West Covina
Total
Community
Other
Services
Special
Foundation
Revenue Funds
$ 64,815
$
12,494,249
'
7,125
11,062
454,542
94
17,332
4,184,051
=
6,522
-
812,195
-
5,838
'
$ 72,034
$
17,985,791
$ 98
$
446,066
'
105,552
=
664,746
-
4,451,040
'
98
5,667,404
-
5,838
71,936
12,469,037
-
(156,488)
71,936
12,318,397
$ 72,034
$
17,985,791
-103-
7j
0 CITY OF WEST COVINA
COMBINING STATEMENT OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCES - OTHER SPECIAL REVENUE FUNDS
For the year ended June 30, 2011
REVENUES:
Taxes
Special assessments
Fines and forfeitures
Investment 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 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) - BEGINNING OF YEAR
FUND BALANCES (DEFICITS) - END OF YEAR
See independent auditors' report.
Drug Business
Recreation Rebate Improvement
Programs Enforcement Tax
- 4,579 234
625,295 -
629,874 234
- 510,993 -
- - 1,367
510,993 1,367
- 118,881 (1,133)
66,269 - -
66,269 - -
66,269 118,881 (1,133)
(66,269) 579,289 32,923
$ - $ 698,170 $ 31,790
- 104 -
1
1
1
1
1
1
1
1
1
1
1
1
Air State Traffic Police Transportation
Quality Proposition Proposition Traffic Gas Congestion Special Development
Improvement A C Safety Tax Relief Programs Act
$ - $ 1,523,535 $ 1,265,690 $ - $ - $
- - - 899,882 -
687 34 16,144 2,499 5,488
124,248 150,699 - - 2,776,970
- 2,112 - - 4,642
124,935 1,676,380 1,281,834 902,381 2,787,100
132,604 - 322,268
- 1,601,474 751,921
- - 128,828
132,604 1,601,474 1,203,017
193,435 1,610,747
193,435 1,610,747
(7,669) 74,906 78,817 708,946 1,176,353
- 238 -
- - 86,726
17,138 -
17,376 86,726
- 8,717 -
- 93,609
8,717 93,609
8,659 (6,883)
- - 447,018 - - -
- - (950,000) - (397,018) - -
- - (950,000) 447,018 (397,018) - -
(7,669) 74,906 78,817 (241,054) 1,623,371 (397,018) 8,659 (6,883)
104,136 132,855 2,248,890 531,562 291,913 397,018 30,705 (25,210)
$ 96,467 $ 207,761 $ 2,327,707 $ 290,508 $ 1,915,284 $ - $ 39,364 $ (32,093)
-105-
(Continued)
• CITY OF WEST COVINA •
COMBINING STATEMENT OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCES - OTHER SPECIAL REVENUE FUNDS
(CONTINUED)
For the year ended June 30, 2011
REVENUES:
Taxes
Special assessments
Fines and forfeitures
Investment 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 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) - BEGINNING OF YEAR
FUND BALANCES (DEFICITS) - END OF YEAR
See independent auditors' report
Community
Development
Block
AB939
Grants
Grant (CDBG)
2,184
2,788
-
-
1,989,883
707,583
6,430
72,695
-
-
-
204,357
166,490
207,129
-
175,104
2,272,495
911,940
- 379,789
21,953
123,932 1,894,548
358,384
- 372,120
553,135
123,932 2,646,457
933,472
51,172 (373,962)
(21,532)
51,172 (373,962) (21,532)
308,909 339,236 (57,546)
$ 360,081 $ (34,726) $ (79,078)
- 106 -
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
0
Art in
North
Inmate
Public
COPS
Special
Charter
Public
Azusa
Tree
Welfare
Safety
Grant
Assessments
Cable
Places
Relinquishment
$ -
$ -
$ 552,716
$ -
$ 843,422
$ -
$ -
$ -
-
-
-
-
5,210,062
-
-
-
7
-
-
1,327
28,555
2,973
513
2,928
-
-
-
138,860
-
-
-
-
-
-
-
-
9,182
-
-
-
1,067
7,200
-
-
6,794
-
29,292
-
1,074
7,200
552,716
140,187
6,098,015
2,973
29,805
2,928
-
-
-
-
-
8,271
-
-
-
13,102
-
156,111
-
-
-
-
-
-
-
-
5,438,804
-
-
5,841
-
-
-
-
34,457
-
7,162
-
-
13,102
-
156,111
5,473,261
8,271
7,162
5,841
1,074
(5,902)
552,716
(15,924)
624,754
(5,298)
22,643
(2,913)
-
-
-
-
22,115
-
-
-
-
-
(525,000)
-
(72,115)
(21,711)
-
-
-
-
(525,000)
-
(50,000)
(21,711)
-
-
1,074
(5,902)
27,716
(15,924)
574,754
(27,009)
22,643
(2,913)
27
(107)
55,944
206,825
3,747,594
438,634
57,360
411,299
$ 1,101
$ (6,009)
$ 83,660
$ 190,901
$ 4,322,348
$ 411,625
$ 80,003
$ 408,386
- 107 -
(Continued)
CITY OF WEST COVINA Is
COMBINING STATEMENT OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCES - OTHER SPECIAL REVENUE FUNDS
(CONTINUED)
For the year ended June 30, 2011
REVENUES:
Taxes
Special assessments
Fines and forfeitures
Investment 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 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) - BEGINNING OF YEAR
FUND BALANCES (DEFICITS) - END OF YEAR
See independent auditors' report.
Integrated
Fire Waste
Training Measure R Management
$ - $ 944,604 $ -
5,483 -
70,162
- 950,087 70,162
- 584,514 57,706
584,514 57,706
- 365,573 12,456
(73,978) - -
(73,978) - -
(73,978) 365,573 12,456
73,978 554,409 763
$ - $ 919,982 $ 13,219
- 108 -
i
1
1
1
1
West Covina
Total
Community
Other
Services
Special
Foundation
Revenue Funds
$ -
$ 5,129,967
-
5,210,062
-
899,882
434
77,095
-
6,600,264
1,450
166,673
204,357
60,911 18,782,437
8,271
1,090,665
- 10,816,392
34,027 3,314,044
34,027 15,399,819
26,884 3,382,618
535,402
(2,039,822)
- (1,504,420)
26,884 1,878,198
45,052 10,440,189
$ 71,936 $ 12,318,387
- 109 -
CITY OF WEST COVINA •
SCHEDULE OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCE - BUDGET AND ACTUAL
RECREATION PROGRAMS SPECIAL REVENUE FUND
For the year ended June 30, 2011
Variance with
Final Budget
Budgeted Amounts Positive
Original Final Actual (Negative)
OTHER FINANCING SOURCES:
Transfers in $ - $ - $ 66,269 $ 66,269
FUND BALANCE (DEFICIT) -
BEGINNING OF YEAR (66,269) (66,269) (66,269) -
FUND BALANCE (DEFICIT) - END OF YEAR $ (66,269) $ (66,269) $ - $ 66,269
See independent auditors' report.
affill
0
0
CITY OF WEST COVINA
SCHEDULE
OF REVENUES, EXPENDITURES AND
CHANGES IN
FUND BALANCE - BUDGET AND ACTUAL
1
DRUG REBATE ENFORCEMENT SPECIAL REVENUE FUND
For the year ended June 30, 2011
Variance with
Final Budget
Budgeted Amounts
Positive
Original Final
Actual
(Negative)
REVENUES:
Investment income
$ - $ - $
4,579
$ 4,579
Revenue from other agencies
14,000 14,000
625,295
611,295
TOTAL REVENUES
14,000 14,000
629,874
615,874
EXPENDITURES:
'
Current:
Public safety
- 682,228
510,993
171,235
EXCESS OF REVENUES OVER
(UNDER) EXPENDITURES
14,000 (668,228)
118,881
787,109
FUND BALANCE - BEGINNING OF YEAR
579,289 579,289
579,289
-
FUND BALANCE - END OF YEAR
$ 593,289 $ (88,939) $
698,170
$ 787,109
l
t
' See independent auditors' report.
CITY OF WEST COVINA
SCHEDULE OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCE - BUDGET AND ACTUAL
BUSINESS IMPROVEMENT TAX SPECIAL REVENUE FUND
For the year ended June 30, 2011
REVENUES:
Investment income
EXPENDITURES:
Current:
Community services
EXCESS OF REVENUES OVER
(UNDER) EXPENDITURES
FUND BALANCE - BEGINNING OF YEAR
FUND BALANCE - END OF YEAR
See independent auditors' report.
Budgeted Amounts
Original Final
Variance with
Final Budget
Positive
Actual (Negative)
234 $ 234
4,500 4,500 1,367 3,133
(4,500) (4,500) (1,133) 3,367
32,923 32,923 32,923 -
$ 28,423 $ 28,423 $ 31,790 $ 3,367
Bova
•
CITY OF WEST COVINA
SCHEDULE OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCE - BUDGET AND ACTUAL
AIR QUALITY IMPROVEMENT SPECIAL REVENUE FUND
For the year ended June 30, 2011
Variance with
Final Budget
Budgeted Amounts
Positive
Original Final
Actual
(Negative)
REVENUES:
t
Investment income $ -
687
687
Revenue from other agencies 122,000 122,000
124,248
2,248
TOTAL REVENUES 122,000 122,000
124,935
2,935
EXPENDITURES:
Current:
Public works 155,673 155,673
132,604
23,069
EXCESS OF REVENUES OVER
(UNDER) EXPENDITURES (33,673) (33,673)
(7,669)
26,004
FUND BALANCE - BEGINNING OF YEAR 104,136 104,136
104,136
-
FUND BALANCE - END OF YEAR $ 70,463 $ 70,463 $
96,467
$ 26,004
See independent auditors report.
• CITY OF WEST COVINA •
SCHEDULE OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCE - BUDGET AND ACTUAL
PROPOSITION A SPECIAL REVENUE FUND
For the year ended June 30, 2011
Variance with
Final Budget
Budgeted
Amounts
Positive
Original
Final
Actual
(Negative)
REVENUES:
Taxes
$ 1,430,000
$ 1,430,000
$ 1,523,535
$ 93,535
Investment income
-
-
34
34
Revenue from other agencies
159,000
159,000
150,699
(8,301)
Charges for services
-
-
2,112
2,112
TOTAL REVENUES
1,589,000
1,589,000
1,676,380
87,380
EXPENDITURES:
Current:
Community services
1,389,359
1,764,359
1,601,474
162,885
EXCESS OF REVENUES OVER
(UNDER) EXPENDITURES
199,641
(175,359)
74,906
250,265
FUND BALANCE - BEGINNING OF YEAR
132,855
132,855
132,855
-
FUND BALANCE - END OF YEAR
$ 332,496
$ (42,504)
$ 207,761
$ 250,265
See independent auditors' report.
- 114 -
•
•
CITY OF WEST COVINA
SCHEDULE OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCE - BUDGET AND ACTUAL
PROPOSITION C SPECIAL REVENUE FUND
For the year ended June 30, 2011
Variance with
Final Budget
Budgeted Amounts
Positive
Original Final
Actual
(Negative)
REVENUES:
Taxes
$ 1,195,000 $ 1,195,000 $
1,265,690
$ 70,690
Investment income
16,144
16,144
TOTAL REVENUES
1,195,000 1,195,000
1,281,834
86,834
EXPENDITURES:
Current:
Public works
353,635 2,291,837
322,268
1,969,569
Community services
924,520 924,520
751,921
172,599
Community development
- 129,936
128,828
1,108
'
TOTAL EXPENDITURES
1,278,155 3,346,293
1,203,017
2,143,276
EXCESS OF REVENUES OVER
1
(UNDER) EXPENDITURES
(83,155) (2,151,293)
78,817
2,230,110
FUND BALANCE - BEGINNING OF YEAR
2,248,890 2,248,190
2,248,890
-
FUND BALANCE - END OF YEAR
$ 2,165,735 $ 97,597 $
2,327,707
$ 2,230,110
I
See independent auditors' report.
P p
• CITY OF WEST COVINA •
SCHEDULE OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCE - BUDGET AND ACTUAL
TRAFFIC SAFETY SPECIAL REVENUE FUND
For the year ended June 30, 2011
Variance with
Final Budget
Budgeted Amounts
Positive
Original
Final
Actual
(Negative)
REVENUES:
Fines and forfeitures
$ 1,175,000
$ 1,175,000
$ 899,882
$ (275,118)
Investment income
-
-
2,499
2,499
TOTAL REVENUES
1,175,000
1,175,000
902,381
(272,619)
EXPENDITURES:
Current:
Public works
241,647
254,955
193,435
61,520
EXCESS OF REVENUES OVER
(UNDER) EXPENDITURES
933,353
920,045
708,946
(211,099)
OTHER FINANCING USES:
Transfers out
(950,000)
(950,000)
(950,000)
-
NET CHANGE IN FUND BALANCE
(16,647)
(29,955)
(241,054)
(211,099)
FUND BALANCE - BEGINNING OF YEAR
531,562
531,562
531,562
-
FUND BALANCE - END OF YEAR
$ 514,915
$ 501,607
$ 290,508
$ (211,099)
See independent auditors' report.
- 116 -
•
•
CITY OF WEST COVINA
1
SCHEDULE
OF REVENUES, EXPENDITURES AND
CHANGES IN
FUND BALANCE - BUDGET AND ACTUAL
STATE
GAS TAX SPECIAL REVENUE FUND
For the year ended June 30, 2011
Variance with
Final Budget
Budgeted Amounts
Positive
Original Final
Actual
(Negative)
REVENUES:
Investment income
$ - $ - $
5,488
$ 5,488
Revenue from other agencies
2,886,926 2,886,926
2,776,970
(109,956)
Charges for services
- -
4,642
4,642
TOTAL REVENUES
2,886,926 2,886,926
2,787,100
(99,826)
EXPENDITURES:
Current:
Public works
3,227,789 3,271,276
1,610,747
1,660,529
EXCESS OF REVENUES OVER
(UNDER) EXPENDITURES
(340,863) (384,350)
1,176,353
1,560,703
OTHER FINANCING SOURCES:
Transfers in
50,000 50,000
447,018
397,018
NET CHANGE IN FUND BALANCE
(290,863) (334,350)
1,623,371
1,957,721
FUND BALANCE - BEGINNING OF YEAR
291,913 291,913
291,913
-
FUND BALANCE - END OF YEAR
$ 1,050 $ (42,437) $
1,915,284
$ 1,957,721
1
See independent auditors' report.
- 117 -
• CITY OF WEST COVINA 0
SCHEDULE OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCE - BUDGET AND ACTUAL
TRAFFIC CONGESTION RELIEF SPECIAL REVENUE FUND
For the year ended June 30, 2011
Variance with
Final Budget
Budgeted Amounts Positive
Original Final Actual (Negative)
OTHER FINANCING USES:
Transfers out $ - $ - $ (397,018) $ (397,018)
FUND BALANCE - BEGINNING OF YEAR 397,018 397,019 397,018 -
FUND BALANCE - END OF YEAR $ 397,018 $ 397,018 $ - $ (397,018)
See independent auditors' report.
- 118 -
0 •
CITY OF WEST COVINA
1
SCHEDULE OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCE - BUDGET AND ACTUAL
1
POLICE SPECIAL PROGRAMS SPECIAL REVENUE FUND
For the year ended June 30, 2011
Variance with
Final Budget
Budgeted Amounts
Positive
Original Final
Actual
(Negative)
REVENUES:
Investment income $ $ - $
238
$ 238
1
_
Otherrevenues 15,138
17,138
2,000
TOTAL REVENUES - 15,138
17,376
2,238
EXPENDITURES:
Current:
Public safety 31,352
8,717
22,635
EXCESS OF REVENUES OVER
(UNDER) EXPENDITURES - (16,214)
8,659
24,873
FUND BALANCE - BEGINNING OF YEAR 30,705 30,705
30,705
-
FUND BALANCE - END OF YEAR $ 30,705 $ 14,491 $
39,364
$ 24,873
See independent auditors' report.
0 CITY OF WEST COVINA 0
SCHEDULE OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCE - BUDGET AND ACTUAL
TRANSPORTATION DEVELOPMENT ACT SPECIAL REVENUE FUND
For the year ended June 30, 2011
REVENUES:
Revenue from other agencies
EXPENDITURES:
Current:
Public works
EXCESS OF REVENUES OVER
(UNDER) EXPENDITURES
FUND BALANCE (DEFICIT) -
BEGINNING OF YEAR
FUND BALANCE (DEFICIT) - END OF YEAR
See independent auditors' report.
Budgeted Amounts
Original Final
$ 53,247 $ 53,247
Actual
$ 86,726
Variance with
Final Budget
Positive
(Negative)
$ 33,479
65,000 113,562 93,609 19,953
(11,753) (60,315) (6,883) 53,432
(25,210) (25,210) (25,210) -
$ (36,963) $ (85,525) $ (32,093) $ 53,432
WIM11e
CITY OF WEST COVINA
'
SCHEDULE
OF REVENUES, EXPENDITURES AND
CHANGES IN
FUND BALANCE - BUDGET AND ACTUAL
AB939
SPECIAL REVENUE FUND
For the year ended June 30, 2011
Variance with
Budgeted Amounts
Final Budget
Positive
Original Final
Actual
(Negative)
REVENUES:
Investment income
$ - $ - $
2,184
$ 2,184
Charges for services
5,000 5,000
6,430
1,430
Other revenues
174,000 174,000
166,490
(7,510)
TOTAL REVENUES
179,000 179,000
175,104
(3,896)
EXPENDITURES:
Current:
Public works
145,349 145,349
123,932
21,417
1
EXCESS OF REVENUES OVER
(UNDER) EXPENDITURES
33,651 33,651
51,172
17,521
FUND BALANCE - BEGINNING OF YEAR
308,909 308,909
308,909
-
FUND BALANCE - END OF YEAR
$ 342,560 $ 342,560 $
360,081
$ 17,521
1
See independent auditors report.
-121-
0 CITY OF WEST COVINA 0
SCHEDULE OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCE - BUDGET AND ACTUAL
GRANTS SPECIAL REVENUE FUND
For the year ended June 30, 2011
Variance with
Final Budget
Budgeted
Amounts
Positive
Original
Final
Actual
(Negative)
REVENUES:
Investment income
$ -
$ -
$ 2,788
$ 2,788
Revenue from other agencies
84,831
1,467,256
1,989,883
522,627
Charges for services
89,199
89,199
72,695
(16,504)
Other revenues
164,000
218,216
207,129
(11,087)
TOTAL REVENUES
338,030
1,774,671
2,272,495
497,824
EXPENDITURES:
Current:
Public safety
-
389,445
379,789
9,656
Public works
72,137
3,274,575
1,894,548
1,380,027
Community services
238,494
390,822
372,120
18,702
TOTAL EXPENDITURES
310,631
4,054,842
2,646,457
1,408,385
EXCESS OF REVENUES OVER
(UNDER) EXPENDITURES
27,399
(2,280,171)
(373,962)
1,906,209
FUND BALANCE - BEGINNING OF YEAR
339,236
339,236
339,236
-
FUND BALANCE (DEFICIT) - END OF YEAR
$ 366,635
$ (1,940,935)
$ (34,726)
$ 1,906,209
See independent auditors' report.
- 122 -
CITY OF WEST COVINA
I
SCHEDULE OF REVENUES, EXPENDITURES AND
CHANGES
IN FUND BALANCE - BUDGET
AND ACTUAL
COMMUNITY DEVELOPMENT BLOCK GRANT SPECIAL
REVENUE FUND
For the year ended June 30, 2011
Variance with
Budgeted Amounts
Final Budget
Positive
Original
Final
Actual
(Negative)
REVENUES:
Revenue from other agencies
$ 1,291,603 $
1,291,603 $
707,583
$ (584,020)
Repayment of notes and loans
30,000
1 30,000
204,357
174,357
TOTAL REVENUES
1,321,603
1,321,603
911,940
(409,663)
EXPENDITURES:
Current:
Public safety
20,140
382,478
21,953
360,525
Public works
829,940
864,871
358,384
506,487
Community services
458,006
733,386
553,135
180,251
'
TOTAL EXPENDITURES
1,308,086
1,980,735
933,472
1,047,263
EXCESS OF REVENUES OVER
(UNDER) EXPENDITURES
13,517
(659,132)
(21,532)
637,600
FUND BALANCE (DEFICIT) -
BEGINNING OF YEAR
(57,546)
(57,546)
(57,546)
FUND BALANCE (DEFICIT) - END OF YEAR
$ (44,029) $
(716,678) $
(79,078)
$ 637,600
t
See independent auditors' report.
-123-
0 CITY OF WEST COVINA 0
SCHEDULE OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCE - BUDGET AND ACTUAL
TREE SPECIAL REVENUE FUND
For the year ended June 30, 2011
Variance with
Final Budget
Budgeted Amounts
Positive
Original Final
Actual
(Negative)
REVENUES:
Investment income
$ - $ -
$ 7
$ 7
Other revenues
- -
1,067
1,067
TOTAL REVENUES
- -
1,074
1,074
FUND BALANCE - BEGINNING OF YEAR
27 27
27
-
FUND BALANCE - END OF YEAR
$ 27 $ 27
$ 1,101
$ 1,074
See independent auditors' report.
- 124 -
1
1
1
1
1
1
1
1
1
1
1
1
1
0 CITY OF WEST COVINA Is
SCHEDULE OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCE -BUDGET AND ACTUAL
INMATE WELFARE SPECIAL REVENUE FUND
For the year ended June 30, 2011
REVENUES:
Other revenues
EXPENDITURES:
Current:
Public safety
EXCESS OF REVENUES OVER
(UNDER) EXPENDITURES
FUND BALANCE (DEFICIT) -
BEGINNING OF YEAR
FUND BALANCE (DEFICIT) - END OF YEAR
See independent auditors' report.
Variance with
Final Budget
Budgeted Amounts Positive
Original Final Actual (Negative)
$ 15,000 $ 15,000 $ 7,200 $ (7,800)
13,356 13,356 13,102 254
1,644 1,644 (5,902) (7,546)
(107) (107) (107) -
$ 1,537 $ 1,537 $ (6,009) $ (7,546)
- 125 -
CITY OF WEST COVINA 0
SCHEDULE OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCE - BUDGET AND ACTUAL
PUBLIC SAFETY SPECIAL REVENUE FUND
For the year ended June 30, 2011
REVENUES:
Taxes
OTHER FINANCING USES:
Transfers out
NET CHANGE IN FUND BALANCE
FUND BALANCE - BEGINNING OF YEAR
FUND BALANCE - END OF YEAR
See independent auditors' report.
Budgeted Amounts
Original Final
$ 525,000 $ 525,000
Variance with
Final Budget
Positive
Actual (Negative)
$ 552,716 $ 27,716
(525,000) (525,000) (525,000) -
- - 27,716 27,716
55,944 55,944 55,944 -
$ 55,944 $ 55,944 $ 83,660 $ 27,716
- 126 -
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0 CITY OF WEST COVINA •
SCHEDULE OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCE - BUDGET AND ACTUAL
COPS GRANT SPECIAL REVENUE FUND
For the year ended June 30, 2011
REVENUES:
Investment income
Revenue from other agencies
TOTAL REVENUES
EXPENDITURES:
Current:
Public safety
EXCESS OF REVENUES OVER
(UNDER) EXPENDITURES
FUND BALANCE - BEGINNING OF YEAR
FUND BALANCE - END OF YEAR
See independent auditors' report.
Budgeted Amounts
Original Final Actual
$ - $ - $ 1,327
100,000 135,755 138,860
100,000 135,755 140,187
Variance with
Final Budget
Positive
(Negative)
$ 1,327
4,432
313,881 156,111 157,770
100,000 (178,126) (15,924) 162,202
206,825 206,825 206,825 -
$ 306,825 $ 28,699 $ 190,901 $ 162,202
- 127 -
• CITY OF WEST COVINA •
SCHEDULE OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCE - BUDGET AND ACTUAL
SPECIAL ASSESSMENTS SPECIAL REVENUE FUND
For the year ended June 30, 2011
Variance with
Final Budget
Budgeted Amounts
Positive
Original
Final
Actual
(Negative)
REVENUES:
Taxes
$ 809,000
$ 809,000
$ 843,422
$ 34,422
Special assessments
5,112,907
5,112,907
5,210,062
97,155
Investment income
-
-
28,555
28,555
Charges for services
25,500
25,500
9,182
(16,318)
Other revenues
5,800
5,800
6,794
994
TOTAL REVENUES
5,953,207
5,953,207
6,098,015
144,808
EXPENDITURES:
Current:
Public works
5,691,602
5,978,263
5,438,804
539,459
Community development
64,794
64,794
34,457
30,337
TOTAL EXPENDITURES
5,756,396
6,043,057
5,473,261
569,796
EXCESS OF REVENUES OVER
(UNDER) EXPENDITURES
196,811
(89,850)
624,754
714,604
OTHER FINANCING SOURCES (USES):
Transfers in
22,115
22,115
22,115
-
Transfers out
(72,115)
(72,115)
(72,115)
-
TOTAL OTHER FINANCING
SOURCES (USES)
(50,000)
(50,000)
(50,000)
-
NET CHANGE IN FUND BALANCE
146,811
(139,850)
574,754
714,604
FUND BALANCE - BEGINNING OF YEAR
3,747,594
3,747,594
3,747,594
-
FUND BALANCE - END OF YEAR
$ 3,894,405
$ 3,607,744
$ 4,322,348
$ 714,604
See independent auditors' report.
- 128 -
CITY OF WEST COVINA •
SCHEDULE OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCE - BUDGET AND ACTUAL
CHARTER CABLE SPECIAL REVENUE FUND
For the year ended June 30, 2011
REVENUES:
Investment income
EXPENDITURES:
Current:
General government
EXCESS OF REVENUES OVER
(UNDER) EXPENDITURES
OTHER FINANCING USES:
Transfers out
NET CHANGE IN FUND BALANCE
FUND BALANCE - BEGINNING OF YEAR
FUND BALANCE - END OF YEAR
See independent auditors' report.
Budgeted Amounts
Original Final
Variance with
Final Budget
Positive
Actual (Negative)
2,973 $ 2,973
30,148 8,271 21,877
- (30,148) (5,298) 24,850
(49,650) (49,650) (21,711) 27,939
(49,650) (79,798) (27,009) 52,789
438,634 438,634 438,634 -
$ 388,984 $ 358,836 $ 411,625 $ 52,789
- 129 -
• CITY OF WEST COVINA Is
SCHEDULE OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCE - BUDGET AND ACTUAL
ART IN PUBLIC PLACES SPECIAL REVENUE FUND
For the year ended June 30, 2011
REVENUES:
Investment income
Other revenues
TOTAL REVENUES
EXPENDITURES:
Current:
Community development
EXCESS OF REVENUES OVER
(UNDER) EXPENDITURES
FUND BALANCE - BEGINNING OF YEAR
FUND BALANCE - END OF YEAR
See independent auditors' report.
Variance with
Final Budget
Budgeted Amounts Positive
Original Final Actual (Negative)
$ - $ - $ 513 $ 513
- - 29,292 29,292
- 29,805 29,805
16,099 16,099 7,162 8,937
(16,099) (16,099) 22,643 38,742
57,360 57,360 57,360 -
$ 41,261 $ 41,261 $ 80,003 $ 38,742
MRZII0
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• CITY OF WEST COVINA •
SCHEDULE OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCE - BUDGET AND ACTUAL
NORTH AZUSA RELINQUISHMENT SPECIAL REVENUE FUND
For the year ended June 30, 2011
REVENUES:
Investment income
EXPENDITURES:
Current:
Public works
EXCESS OF REVENUES OVER
(UNDER) EXPENDITURES
FUND BALANCE - BEGINNING OF YEAR
FUND BALANCE -END OF YEAR
See independent auditors' report.
Budgeted Amounts
Original Final
Actual
$ 2,928
Variance with
Final Budget
Positive
(Negative)
$ 2,928
381,241 5,841 375,400
- (381,241) (2,913) 378,328
411,299 411,299 411,299 -
$ 411,299 $ .30,058 $ 408,386 $ 378,328
- 131 -
• CITY OF WEST COVINA •
SCHEDULE OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCE - BUDGET AND ACTUAL
FIRE TRAINING SPECIAL REVENUE FUND
For the year ended June 30, 2011
Variance with
Final Budget
Budgeted Amounts Positive
Original Final Actual (Negative)
OTHER FINANCING USES:
Transfers out $ - $ - $ (73,978) $ (73,978)
FUND BALANCE - BEGINNING OF YEAR 73,978 73,978 73,978 -
FUND BALANCE - END OF YEAR $ 73,978 $ 73,978 $ - $ (73,978)
See independent auditors' report.
- 132 -
• •
CITY OF WEST COVINA
SCHEDULE OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCE - BUDGET AND ACTUAL
MEASURE R SPECIAL REVENUE FUND
For the year ended June 30, 2011
Variance with
Final Budget
'
Budgeted Amounts
Positive
Original Final
Actual
(Negative)
REVENUES:
Taxes $ 900,000 $ 900,000 $
944,604
$ 44,604
Investment income
5,483
5,483
TOTAL REVENUES 900,000 900,000
950,087
50,087
EXPENDITURES:
Current:
'
Public works 703,489 799,689
584,514
215,175
EXCESS OF REVENUES OVER
(UNDER) EXPENDITURES 196,511 100,311
365,573
265,262
FUND BALANCE - BEGINNING OF YEAR 554,409 554,409
554,409
-
'
FUND BALANCE - END OF YEAR $ 750,920 $ 654,720 $
919,982
$ 265,262
1
See independent auditors' report.
-133-
• CITY OF WEST COVINA 0
SCHEDULE OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCE - BUDGET AND ACTUAL
INTEGRATED WASTE MANAGEMENT SPECIAL REVENUE FUND
For the year ended June 30, 2011
Variance with
Final Budget
Budgeted Amounts
Positive
Original
Final
Actual
(Negative)
REVENUES:
Charges for services
$ 70,000
$ 70,000
$ 70,162
$ 162
EXPENDITURES:
Current:
Public works
66,840
66,840
57,706
9,134
EXCESS OF REVENUES OVER
(UNDER) EXPENDITURES
3,160
3,160
12,456
9,296
FUND BALANCE - BEGINNING OF YEAR
763
763
763
-
FUND BALANCE - END OF YEAR
$ 3,923
$ 3,923
$ 13,219
$ 9,296
See independent auditors' report.
- 134 -
0
•
CITY OF WEST COVINA
SCHEDULE
OF REVENUES, EXPENDITURES AND
CHANGES IN
FUND BALANCE - BUDGET AND ACTUAL
'
WEST COVINA COMMUNITY SERVICES FOUNDATION SPECIAL REVENUE FUND
For the year ended June 30, 2011
Variance with
Final Budget
'
Budgeted Amounts
Positive
Original Final
Actual
(Negative)
REVENUES:
Investment income
$ $ - $
434
$ 434
'
Charges for services
_
1,000
1,450
450
Other revenues
- 44,878
59,027
14,149
TOTAL REVENUES
- 45,878
60,911
15,033
EXPENDITURES:
'
Current:
Community services
100,710
34,027
66,683
EXCESS OF REVENUES OVER
(UNDER) EXPENDITURES
(54,832)
26,884
81,716
FUND BALANCE - BEGINNING OF YEAR
45,052 45,052
45,052
-
FUND BALANCE - END OF YEAR
$ 45,052 $ (9,780) $
71,936
$ 81,716
'
See independent auditors' report.
'
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' • CITY OF WEST COVINA •
MAJOR DEBT SERVICE FUNDS
' June 30, 2011
DEBT SERVICE FUNDS are used to account for the accumulation of resources for, and the payment
of, governmental long-term debt principal and interest.
' City Debt Service - This fund accounts for the payment of principal and interest on the City's
long-term debt issues.
' Community Development Commission (CDC) Debt Service - This fund accounts for the payment of
principal and interest on long-term debt of the Community Development Commission.
1
- 137 -
• CITY OF WEST COVINA 0
SCHEDULE OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCE - BUDGET AND ACTUAL
CITY DEBT SERVICE FUND - MAJOR FUND
For the year ended June 30, 2011
Variance with
Final Budget
Budgeted
Amounts
Positive
Original
Final
Actual
(Negative)
REVENUES:
Investment income
$ 1,160,788
$ 1,160,788
$ 890,069
$ (270,719)
Charges for services
935,000
935,000
894,572
(40,428)
TOTAL REVENUES
2,095,788
2,095,788
1,784,641
(311,147)
EXPENDITURES:
Debt service:
Principal
1,981,576
11,981,576
1,959,975
10,021,601
Interest and fiscal charges
2,454,720
2,672,847
2,123,877
548,970
Other contractual payments
-
-
85,548
(85,548)
TOTAL EXPENDITURES
4,436,296
14,654,423
4,169,400
10,485,023
EXCESS OF REVENUES OVER
(UNDER) EXPENDITURES
(2,340,508)
(12,558,635)
(2,384,759)
10,173,876
OTHER FINANCING SOURCES:
Transfers in
1,961,000
1,961,000
1,961,000
--
NET CHANGE IN FUND BALANCE
(379,508)
(10,597,635)
(423,759)
10,173,876
FUND BALANCE -
BEGINNING OF YEAR
18,777,417
18,777,417
18,777,417
--
FUND BALANCE - END OF YEAR
$ 18,397,909
$ 8,179,782
$ 18,353,658
$ 10,173,876
See independent auditors' report.
M91.12
'
0
•
CITY OF WEST COVINA
'
SCHEDULE
OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCE - BUDGET AND ACTUAL
COMMUNITY DEVELOPMENT
COMMISSION DEBT SERVICE FUND
- MAJOR FUND
For the year ended June 30,
2011
Variance with
Final Budget
'
Budgeted
Amounts
Positive
Original
Final
Actual
(Negative)
REVENUES:
'
Taxes
$ 23,400,000
$ 22,380,000
$ 22,244,078
$ (135,922)
Investment income
343,000
343,000
376,102
33J02
Other revenues
-
1,020,000
889,462
(130,538)
'
TOTAL REVENUES
23,743,000
23,743,000
23,509,642
(233,358)
EXPENDITURES:
'
Current:
Pass -through payments
3,252,000
4,596,269
5,863,850
(1,267,581)
Debt service:
'
Principal
3,264,503
3,264,503
2,130,000
1,134,503
Interest and fiscal charges
5,813,661
5,813,661
5,670,441
143,220
Other contractual payments
2,490,000
2,490,000
2,231,566
258,434
TOTAL EXPENDITURES
14,820,164
16,164,433
15,895,857
268,576
EXCESS OF REVENUES OVER
(UNDER) EXPENDITURES
8,922,836
7,578,567
7,613,785
35,218
OTHER FINANCING USES:
Transfers out
(7,161,000)
(7,161,000)
(8,119,435)
(958,435)
NET CHANGE IN FUND BALANCE
1,761,836
417,567
(505,650)
(923,217)
'
FUND BALANCE (DEFICIT) -
BEGINNING OF YEAR
(10,556,457)
(10,556,457)
(10,556,457)
-
FUND BALANCE (DEFICIT) - END OF YEAR $ (8,794,621)
$(10,138,890)
$(11,062,107)
$ (923,217)
See independent auditors report.'
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•
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- 140 -
• CITY OF WEST COVINA •
11
MAJOR AND OTHER CAPITAL PROJECTS FUNDS
June 30, 2011
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.
Major Funds:
Cily Capital Projects - This fund accounts for all capital expenditures not being accounted for in the
capital projects described below, or in other fund types.
Community Development Commission (CDC) Capital Projects - 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.
IOther Funds:
Construction Tax - 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 - This fund accounts for park fees received from residential developers to be used
for new park construction.
1
• CITY OF WEST COVINA •
COMBINING BALANCE SHEET
OTHER CAPITAL PROJECTS FUNDS
June 30, 2011
ASSETS
Cash and investments
Receivables, net
Interest
TOTAL ASSETS
LIABILITIES AND FUND BALANCES
LIABILITIES:
Accounts payable
FUND BALANCES:
Assigned
TOTAL LIABILITIES AND FUND BALANCES
See independent auditors' report.
Total
Other
Construction Park Capital Projects
Tax Development Funds
$ 201,121 $ 468,058 $ 669,179
308 478 786
$ 201,429 $ 468,536 $ 669,965
$ 3,616 $ 1,661 $ 5,277
197,813 466,875 664,688
$ 201,429 $ 468,536 $ 669,965
- 142 -
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• CITY OF WEST COVINA •
COMBINING STATEMENT OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCES - OTHER CAPITAL PROJECTS FUNDS
For the year ended June 30, 2011
REVENUES:
Taxes
Investment income
TOTAL REVENUES
EXPENDITURES:
Current:
General government
Public safety
Public works
Community services
TOTAL EXPENDITURES
EXCESS OF REVENUES OVER
(UNDER) EXPENDITURES
FUND BALANCES - BEGINNING OF YEAR
FUND BALANCES - END OF YEAR
See independent auditors' report.
-143-
Total
Other
Construction Park Capital Projects
Tax Development Funds
$ 56,723 $ - $ 56,723
1,653 2,525 4,178
58,376 2,525 60,901
2,325
-
2,325
4,230
-
4,230
78,269
-
78,269
1,662
85,802
87,464
86,486
85,802
172,288
(28,110)
(83,277)
(111,387)
225,923
550,152
776,075
$ 197,813
$ 466,875 $
664,688
• CITY OF WEST COVINA •
SCHEDULE OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCE - BUDGET AND ACTUAL
CITY CAPITAL PROJECTS FUND - MAJOR FUND
For the year ended June 30, 2011
Variance with
Final Budget
Budgeted Amounts
. Positive
Original Final
Actual
(Negative)
REVENUES:
Investment income
$ - $ -
$ 9,429
$ 9,429
Rental income
- -
24,341
24,341
Other revenues
- -
5,187
5,187
TOTAL REVENUES
- -
38,957
38,957
EXPENDITURES:
Current:
General government
- -
5,187
(5,187)
Public safety
- -
10,058
(10,058)
Public works
- -
32,357
(32,357)
Community services
- -
48,020
(48,020)
TOTAL EXPENDITURES
- -
95,622
(95,622)
NET CHANGE IN FUND BALANCE
- -
(56,665)
(56,665)
FUND BALANCE - BEGINNING OF YEAR
1,356,923 1,356,923
1,356,923
-
FUND BALANCE - END OF YEAR
$ 1,356,923 $ 1,356,923
$ 1,300,258
$ (56,665)
See independent auditors' report.
M[l:!
'
•
CITY OF WEST COVINA
'
SCHEDULE
OF REVENUES, EXPENDITURES AND
CHANGES IN
FUND BALANCE - BUDGET
AND ACTUAL
'
COMMUNITY DEVELOPMENT
COMMISSION CAPITAL PROJECTS FUND - MAJOR FUND
For the year ended June 30,
2011
Variance with
Final Budget
Budgeted
Amounts
Positive
Original
Final
Actual
(Negative)
REVENUES:
'
Investment income
$ 220,000
$ 220,000
$ 93,258
$ (126,742)
Rental income
75,000
75,000
62,900
(12,100)
Repayment of netes and loans
180,000
180,000
516,991
336,991
Gain on sale of property
-
-
250,199
250,199
'
Other revenues
1,112,976
1,112,976
'
TOTAL REVENUES
475,000
475,000
2,036,324
1,561,324
EXPENDITURES:
Current:
Community development
4,625,233
9,684,411
7,656,944
2,027,467
Debt service:
Principal
560,000
560,000
560,000
-
Interest and fiscal charges
2,024,046
718,146
726,572
(8,426)
TOTAL EXPENDITURES
7,209,279
10,962,557
8,943,516
2,019,041
EXCESS OF REVENUES OVER
(UNDER) EXPENDITURES
(6,734,279)
(10,487,557)
(6,907,192)
3,580,365
'
OTHER FINANCING SOURCES:
Transfers in
6,050,000
6,050,000
7,008,435
958,435
'
NET CHANGE IN FUND BALANCE
(684,279)
(4,437,557)
101,243
4,538,800
FUND BALANCE - BEGINNING OF YEAR
13,877,380
13,877,380
13,877,380
-
'
FUND BALANCE - END OF YEAR
$ 13,193,101
$ 9,439,823
$ 13,978,623
$ 4,538,800
See independent auditors' report. P P
'
-145-
CITY OF WEST COVINA •
SCHEDULE OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCE - BUDGET AND ACTUAL
CONSTRUCTION TAX CAPITAL PROJECTS FUND
For the year ended June 30, 2011
Variance with
Final Budget
Budgeted Amounts
Positive
Original
Final
Actual
(Negative)
REVENUES:
Taxes
$ -
$ -
$ 56,723
$ 56,723
Investment income
40,000
40,000
1,653
(38,347)
TOTAL REVENUES
40,000
40,000
58,376
18,376
EXPENDITURES:
Current:
General government
-
6,839
2,325
4,514
Public safety
-
8,418
4,230
4,188
Public works
20,000
207,395
78,269
129,126
Community services
-
18,042
1,662
16,380
TOTAL EXPENDITURES
20,000
240,694
86,486
154,208
EXCESS OF REVENUES OVER
(UNDER) EXPENDITURES
20,000
(200,694) -
(28,110)
172,584
FUND BALANCE - BEGINNING OF YEAR
225,923
225,923
225,923
-
FUND BALANCE - END OF YEAR
$ 245,923
$ 25,229
$ 197,813
$ 172,584
See independent auditors' report.
- 146 -
0
•
CITY OF WEST COVINA
SCHEDULE
OF REVENUES, EXPENDITURES AND
CHANGES IN
FUND BALANCE - BUDGET AND ACTUAL
'
PARK DEVELOPMENT CAPITAL PROJECTS FUND
For the year ended June 30, 2011
Variance with
Final Budget
Budgeted Amounts
Positive
Original Final
Actual
(Negative)
REVENUES:
Investment income
$ - $ $
2,525
$ 2,525
Rental income
_
22,500
TOTAL REVENUES
22,500 -
. 2,525
2,525
EXPENDITURES:
Current:
Community services
84,000 242,165
85,802
156,363
EXCESS OF REVENUES OVER
(UNDER) EXPENDITURES
(61,500) (242,165)
(83,277)
158,888
FUND BALANCE - BEGINNING OF YEAR
550,152 550,152
550,152
-
'
FUND BALANCE - END OF YEAR
$ 488,652 $ 307,987 $
466,875
$ 158,888
See independent auditors report.
'
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1 • CITY OF WEST COVINA •
INTERNAL SERVICE FUNDS
June 30, 2011
' INTERNAL SERVICE FUNDS are used to account for the financing of goods or service provided by
one department to other departments of the City on a cost reimbursement basis.
' Fleet Management - This fund provides maintenance on materials and supplies for City vehicles, and
other gasoline or diesel powered equipment.
Self -Insurance - 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 - This fund accounts for the set aside lump sum benefits for retiring
employees.
Vehicle Replacement - This fund provides for replacement of City vehicles.
1 -149 -
a
CITY OF WEST COVINA
COMBINING STATEMENT OF NET ASSETS
INTERNAL SERVICE FUNDS
June 30, 2011
ASSETS
CURRENT ASSETS:
Cash and investments
Receivables:
Account
Interest
Due from other funds
Inventories
TOTAL CURRENT ASSETS
NONCURRENT ASSETS:
Capital assets:
Other capital assets
Less accumulated depreciation
Total capital assets (net of accumulated depreciation)
TOTAL NONCURRENT ASSETS
TOTAL ASSETS
LIABILITIES
CURRENT LIABILITIES:
Accounts payable
Other accrued liabilities
Claims and judgments - current portion
Compensated absences - current portion
TOTAL CURRENT LIABILITIES
NONCURRENT LIABILITIES:
Claims and judgments
Compensated absences
TOTAL NONCURRENT LIABILITIES
TOTAL LIABILITIES
NET ASSETS
Invested in capital assets
Unrestricted
TOTAL NET ASSETS (DEFICIT)
See independent auditors' report.
Fleet
Management Self -Insurance
$ 77,371 $ 4,648,146
- 8,682
- 1,461,150
3,969 -
81,340 6,117,978
3,098,150 -
(2,526,129) -
572,021 -
572,021 -
653,361 6,117,978
78,302
20,066
3,770
2,889
-
3,771,370
7,644
9,366
89,716
3,803,691
-
7,498,737
50,212
56,538
50,212
7,555,275
139,928
11,358,966
572,021 -
(58,588) (5,240,988)
$ 513,433 $ (5,240,988)
- 150 -
1
1
i
1
1
11
Retiree Health Vehicle
Savings Plan Replacement Totals
$ 480,466 $ 227,264 $ 5,433,247
- - 8,682
668 519 1,187
- - 1,461,150
- - 3,969
481,134 227,783 6,908,235
- 445,251
3,543,401
- (246,319)
(2,772,448)
- 198,932
770,953
- 198,932
770,953
481,134 426,715
7,679,188
- 98,368
- - 6,659
- - 3,771,370
- - 17,010
- - 3,893,407
- - 7,498,737
- 106,750
- 7,605,487
- - 11,498,894
- 198,932 770,953
481,134 227,783 (4,590,659)
$ 481,134 $ 426,715 $ (3,819,706)
1�
- 151 -
• CITY OF WEST COVINA
COMBINING STATEMENT OF REVENUES, EXPENSES
AND CHANGES IN NET ASSETS - INTERNAL SERVICE FUNDS
For the year ended June 30, 2011
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:
Investment income
INCOME (LOSS) BEFORE TRANSFERS
TRANSFERS IN
TRANSFERS OUT
CHANGE IN NET ASSETS
TOTAL NET ASSETS (DEFICIT) - BEGINNING OF YEAR
TOTAL NET ASSETS (DEFICIT) - END OF YEAR
See independent auditors' report.
Fleet
Management Self -Insurance
$ 1,489,449 $ 2,144,598
- 27,834
1,489,449 2,172,432
473,275
332,110
1,018,766
1,281,782
85,484
-
-
1,432,731
1,577,525
3,046,623
(88,076)
(874,191) _
(88,076) (874,191)
207,417 -
119,341 (874,191)
394,092 (4,366,797)
$ 513,433 $ (5,240,988)
- 152 -
0 0
Retiree Health
Vehicle
Savings Plan
Replacement
Totals
$ 137,595
$ -
$ 3,771,642
-
-
27,834
137,595
-
3,799,476
89,199
-
894,584
-
-
2,300,548
-
63,607-
149,091
-
-
1,432,731
89,199
63,607
4,776,954
48,396
(63,607)
(977,478)
3,274
2,925
6,199
51,670
(60,682)
(971,279)
-
-
207,417
-
(207,417)
(207,417)
51,670
(268,099)
(971,279)
429,464
694,814
(2,848,427)
$ 481,134
$ 426,715
$ (3,819,706)
ENNE
0 CITY OF WEST COVINA 0
COMBINING STATEMENT OF CASH FLOWS
INTERNAL SERVICE FUNDS
For the year ended June 30, 2011
CASH FLOWS FROM OPERATING ACTIVITIES:
Received from user departments
Payments to suppliers for goods and services
Payments to employees for services
NET CASH PROVIDED (USED) BY OPERATING ACTIVITIES
CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES:
Received from other funds
Paid to other funds
NET CASH PROVIDED (USED) BY
NONCAPITAL FINANCING ACTIVITIES
CASH FLOWS FROM INVESTING ACTIVITIES:
Interest received on investments
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
CASH AND CASH EQUIVALENTS - BEGINNING OF YEAR
CASH AND CASH EQUIVALENTS - END OF YEAR
RECONCILIATION OF OPERATING INCOME (LOSS) TO NET
CASH PROVIDED (USED) BY OPERATING ACTIVITIES:
Operating income (loss)
Adjustments to reconcile operating income (loss)
to net cash provided (used) by operating activities:
Depreciation
Changes in operating assets and liabilities:
(Increase) decrease in accounts receivables
(Increase) decrease in inventories
Increase (decrease) in accounts payable
Increase (decrease) in other accrued liabilities
Increase (decrease) in claims and judgments
Increase (decrease)in compensated absences
TOTAL ADJUSTMENTS
NET CASH PROVIDED (USED) BY OPERATING ACTIVITIES
See independent auditors' report.
Fleet
Management Self -Insurance
$ 1,490,492 $ 2,175,049
(1,039,709) (3,018,561)
(484,391) (332,062)
(33,608) (1,175,574)
110,979 1,422,502
110,979 1,422,502
77,371 246,928
- 4,401,218
$ 77,371 $ 4,648,146
$ (88,076) $ (874,191)
85,484 -
1,043
2,617
(1,200)
-
(19,743)
11,851
(10,207)
(5,875)
-
(315,899)
(909)
5,923
54,468
(301,383)
$ (33,608) $ (1,175,574)
- 154 -
1
•
•
1
1
Retiree Health
Savings Plan
Vehicle
Replacement
Totals
$ 137,595
$ -
$
3,803,136
-
-
(4,058,270)
(89,199)
(905,652)
48,396
-
(1,160,786)
-
-
1,533,481
1
(207,417)
(207,417)
-
(207,417)
1,326,064
3,091
2,937
6,028
51,487
171,306
(204,480)
428,979
431,744
5,261,941
$ 480,466
$ 227,264
$
5,433,247
$ 48,396
$ (63,607)
$
(977,478)
-
63,607
149,091
-
-
3,660
-
-
(1,200)
_
_
(7,892)
(16,082)
-
-
(315,899)
-
-
5,014
1
-
63,607
(183,308)
$ 48,396
$ -
$
(1,160,786)
1
-155-
• i 1
This page intentionally left blank.)
�J
I
-156 - 1
0 CITY OF WEST COVINA •
AGENCYFUND
June 30, 2011
The AGENCY FUND is used to account for monies held by the City in a trustee capacity as an agent
for individuals, private organizations and other governmental units.
Special Deposits - This fund accounts 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.
- 157 -
• CITY OF WEST COVINA 0
STATEMENT OF CHANGES IN ASSETS AND LIABILITIES
SPECIAL DEPOSITS AGENCY FUND
For the year ended June 30, 2011
ASSETS:
Cash and investments
LIABILITIES:
Accounts payable
Deposits
TOTAL LIABILITIES
See independent auditors' report.
Balance Balance
July 1, 2010 Additions Deletions June 30, 2011
$ 876,135 $ 2,290,512 $ 2,345,038 $ 821,609
$ - $ 212,722 $ 208,015 $ 4,707
876,135 2,296,019 2,355,252 816,902
$ 876,135 $ 2,508,741 $ 2,563,267 $ 821,609
N
- 158 -
DESCR• ION OF STATISTICAL SECTION CONTENTS
' June 30, 2011
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 say about the government's overall financial
health.
' Contents: Table
Financial Trends theses schedules contain trend information to help the reader
I understand how the City's financial performance and well-being have changed over time.
Net Assets by Component 1
Changes in Net Assets 2
1 Changes in Net Assets - Governmental Activities 3
Changes in Net Assets - Business -type Activities 4
Fund Balances of Governmental Funds 5
' Changes in Fund Balances of Governmental Funds 6
Revenue Capacity these schedules contain information to help the reader assess the
' City's most significant own -source revenue.
Assessed Value and Estimated Actual Value of Taxable Property 7
Direct and Overlapping Property Tax Rates 8
Principal Property Taxpayers 9
Property Tax Levies and Collections 10
I
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.
Ratios of Outstanding Debt by Type I I
Ratio of General Bonded Debt Outstanding 12
Direct and Overlapping Debt 13
Legal Debt Margin Information 14
Pledged Revenue Coverage 15
Demographic and Economic Information these schedules offer demographic and
economic indicators to help the reader understand the environment within which the
City's financial activities take place.
Demographic and Economic Statistics 16
Principal Employers 17
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.
Full -Time and Part -Time City Employees by Function 18
Operating Indicators by Function 19
Capital Asset Statistics by Function 20
- 159 -
Cl
Governmental activities:
Invested in capital assets,
net of related debt
Restricted
Unrestricted
Total governmental activities net assets
Business -type activities:
Invested in capital assets,
net of related debt
Restricted
Unrestricted
Total business -type activities net assets
Primary government:
Invested in capital assets,
net of related debt
Restricted
Unrestricted
Total primary government net assets
CITY OF WEST COVINA •
NET ASSETS BY COMPONENT
Last Nine Fiscal Years
(accrual bases of accounting)
Fiscal Year
2003 2004 2005 2006
$ 148,947,725
$ 146,195,649
$ 143,792,663
$ 144,030,127
110,501,120
106,938,430
104,865,107
99,990,727
3,655,287
2,406,084
140,122
(3,710,829)
$ 263,104,132
$ 255,540,163
$ 248,797,892
$ 240,310,025
$ 383,176
$ 458,875
$ 136,937
$ 193,706
2,015,309
1,692,357
1,832,618
1,469,994
$ 2,398,485
$ 2,151,232
$ 1,969,555
$ 1,663,700
$ 149,330,901
$ 146,654,524
$ 143,929,600
$ 144,223,833
110,501,120
106,938,430
104,865,107
99,990,727
5,670,596
4,098,441
1,972,740
(2,240,835)
$ 265,502,617
$ 257,691,395
$ 250,767,447
$ 241,973,725
The City of West Covina implemented GASB 34 for the fiscal year ended June 30, 2003.
Information prior to implementation of GASB 34 is not available.
Source: City of West Covina Finance Department
- 160 -
1
1
1
1
1
Fiscal Year
2007 2008 2009 2010 2011
$ 139,413,253 $ 148,634,909 $ 180,298,472 $ 184,338,106 $ 179,236,866
88,484,572 30,802,069 25,937,799 18,316,134 25,286,909
20,796,530 63,530,998 22,723,726 10,219,814 1,884,827
$ 248,694,355 $ 242,967,976 $ 228,959,997 $ 212,874,054 $ 206,408,602
$ 303,147 $ 202,227 $ 107,507 $ 42,073 $ -
721,839 (66,842) (786,551) (1,128,610) (999,624)
$ 1,024,986 $ 135,385 $ (679,044) $ (1,086,537) $ (999,624)
$ 139,716,400 $ 148,837,136 $ 180,405,979 $ 184,380,179 $ 179,236,866
88,484,572 30,802,069 25,937,799 18,316,134 25,286,909
21,518,369 63,464,156 21,937,175 9,091,204 (98,187)
$ 249,719,341 $ 243,103,361 $ 228,280,953 $ 211,787,517 $ 204,425,588
TABLE 1
-161-
CITY OF WEST COVINA
CHANGES IN NET ASSETS
EXPENSES AND PROGRAM REVENUES
Expenses:
Governmental activities:
General government
Public safety
Public works
Community services
Community development
Interest on long-term debt
Total governmental activities expenses
Last Nine Fiscal Years
(accrual basis of accounting)
2003
Fiscal Year
2004 2005 2006
$ 3,578,429
$ 2,314,558
$ 2,919,887
$ 1,594,760
30,258,976
33,172,116
38,436,098
38,433,238
18,043,497
16,803,123
19,642,927
20,696,562
6,400,613
7,911,247
4,144,990
6,482,112
5,545,289
6,438,979
6,761,102
11,245,539
5,007,946
4,039,240
5,001,981
7,714,047
68,834,750
70,679,263
76,906,985
86,166,258
Business -type activities:
Simulator 254,867 241,047 - -
Computer enterprise 1,372,798 2,023,376 2,212,802 2,098,690
Total business -type activities expenses 1,627,665 2,264,423 2,212,802 2,098,690
Total primary government expenses
Program revenues:
Governmental activities:
Charges for services:
General government
Public safety
Public works
Community services
Community development
Operating grants and contributions
Capital grants and contributions
Total governmental activities
program revenues
Business -type activities:
Charges for services:
Simulator
Computer enterprise
Total business -type activities
program revenues
Total primary government
program revenues
70,462,415 72,943,686 79,119,787 88,264,948 '
22,486
1,271,852
1,377,178
2,767,383
1,754,963
1,772,859
2,562,910
3,310,988
3,810,930
3,763,540
3,610,577
5,297,840
1,277,251
1,471,603
1,546,169
1,454,683
969,865
154,837
223,938
302,677
9,850,635
9,833,967
10,802,517
11,614,595
346,125
1,064,756
378,493
285,078
18,032,155
19,333,414
20,501,782
25,033,244
90,336 79,903 - -
1,569,556 2,165,999 1,992,662 1,721,715
1,659,892 2,245,902 1,992,662 1,721,715
19,692,047 21,579,316 22,494,444 26,754,959
The City of West Covina implemented GASB 34 for the fiscal year ended June 30, 2003.
Information prior to implementation of GASB 34 is not available.
Source: City of West Covina Finance Department
1
L�
- 162 -
TABLE 2
11
Fiscal Year
2007 2008 2009 2010 2011
$ 46,328
$ 2,448,843
$ 2,849,501
$ 3,337,547
$ 2,922,898
42,186,533
45,498,406
47,682,934
48,151,398
45,253,725
19,322,212
20,246,687
21,598,894
21,054,241
21,052,423
5,167,297
5,214,550
7,835,430
6,558,987
6,629,292
9,610,651
10,000,667
12,867,904
8,619,004
9,414,730
8,320,239
8,200,588
7,962,089
6,577,544
7,101,037
84,653,260
91,609,741
100,796,752
94,298,721
92,374,105
2,470,811
2,682,467
2,633,564
2,507,498
2,086,135
2,470,811
2,682,467
2,633,564
2,507,498
2,086,135
87,124,071
94,292,208
103,430,316
96,806,219
94,460,240
861,565
1,145,943
757,678
1,019,690
681,877
1
3,141,098
3,431,488
3,611,259
3,850,741
3,571,864
6,339,196
4,251,433
5,818,290
7,041,281
8,043,988
1,526,866
1,443,945
1,158,644
1,089,227
1,166,675
537,813
275,235
266,286
313,639
240,462
1
8,607,221
10,618,414
11,895,355
5,157,956
10,189,050
2,714,668
434,630
578,828
3,574,609
678,827
1
23,728,427
21,601,088
24,086,340
22,047,143
24,572,743
1 - - - - -
1,765,224 1,755,717 1,885,071 2,193,037 2,268,982
1,765,224 1,755,717 1,885,071 2,193,037 2,268,982
' 25,493,651 23,356,805 25,971,411 24,240,180 26,841,725
1
-163-
•
CITY OF WEST COVINA 0
Net revenues (expenses):
Governmental activities
Business -type activities
Net primary government
revenues (expenses)
General revenues and other changes
in net assets:
Governmental activities:
Taxes:
Property taxes
Sales tax
Franchise tax
Other taxes
Motor vehicle in lieu, unrestricted
Investment income
Other general revenues
Transfers
Total governmental activities
Business -type activities:
Investment income
Transfers
Total business -type activities
Total primary government
Changes in net assets:
Governmental activities
Business -type activities
Total primary government
change in net assets
CHANGES IN NET ASSETS
GENERAL REVENUES
Last Nine Fiscal Years
(accrual basis of accounting)
Fiscal Year
2003 2004 2005 2006
$ (50,802,595) $ (51,345,849) $ (56,405,203) $ (61,133,014)
32,227 (18,521) (220,140) (376,975)
(50,770,368) (51,364,370) (56,625,343) (61,509,989)
13,711,795
16,107,447
17,565,368
27,614,922
13,333,877
14,355,566
14,522,220
14,216,986
2,425,160
2,617,462
2,870,211
2,845,521
3,733,940
4,028,136
2,959,329
3,433,966
6,291,597
5,054,209
7,044,997
2,606,079
5,543,268
44,464
2,858,850
1,993,102
254,980
1,324,596
2,132,720
(65,429)
-
250,000
137
-
45,294,617
43,781,880
49,953,832
52,645,147
30,545
21,268
38,600
71,120
-
(250,000)
(137)
-
30,545
(228,732)
38,463
71,120
45,325,162
43,553,148
49,992,295
52,716,267
(5,507,978)
(7,563,969)
(6,451,371)
(8,487,867)
62,772
(247,253)
(181,677)
(305,855)
$ (5,445,206) $ (7,811,222) $ (6,633,048) $ (8,793,722)
The City of West Covina implemented GASB 34 for the fiscal year ended June 30, 2003.
Information prior to implementation of GASB 34 is not available.
Source: City of West Covina Finance Department
- 164 -
TABLE 2
1
1
1
1
Fiscal Year
2007
2008
2009
2010
2011
$ (60,924,833)
$ (70,008,653)
$ (76,710,412)
$ (72,251,578)
$ (67,801,362)
(705,587)
(926,750)
(748,493)
(314,461)
182,847
(61,630,420)
(70,935,403)
(77,458,905)
(72,566,039)
(67,618,515)
32,458,314
34,760,944
36,387,548
28,849,815
30,888,074
14,056,880
11,167,748
9,261,965
7,791,286
12,550,157
2,874,165
3,367,958
3,512,830
3,093,538
31159,080
4,454,217
4,445,300
5,108,429
5,392,829
5,449,323
650,304
500,629
383,831
331,289
517,098
6,919,306
7,800,642
4,768,327
4,288,088
2,281,105
7,895,977
2,239,053
3,200,753
2,077,837
4,412,125
-
-
78,750
93,140
95,934
69,309,163
64,282,274
62,702,433
51,917,822
59,352,896
66,873
37,149
12,814
108
-
-
-
(78,750)
(93,140)
(95,934)
66,873
37,149
(65,936)
(93,032)
(95,934)
69,376,036
64,319,423
62,636,497
51,824,790
59,256,962
8,384,330
(5,726,379)
(14,007,979)
(20,333,756)
(8,448,466)
(638,714)
(889,601)
(814,429)
(407,493)
86,913
$ 7,745,616 $ (6,615,980) $ (14,822,408) $ (20,741,249) $ (8,361,553)
-165-
• CITY OF WEST COVINA 0
CHANGES IN NET ASSETS
GOVERNMENTAL ACTIVITIES
Last Nine Fiscal Years
(accrual basis of accounting)
Fiscal Year
2003
2004
2005
2006
Expenses:
General government
$ 3,578,429
$ 2,314,558
$ 2,919,887
$ 1,594,760
Public safety
30,258,976
33,172,116
38,436,098
38,433,238
Public works
18,043,497
16,803,123
19,642,927
20,696,562
Community services
6,400,613
7,911,247
4,144,990
6,482,112
Community development
5,545,299
6,438,979
6,761,102
11,245,539
Interest on long-term debt
5,007,946
4,039,240
5,001,981
7,714,047
Total expenses
68,834,750
70,679,263
76,906,985
86,166,258
Program revenues:
Charges for services:
General government
22,486
1,271,852
1,377,178
2,767,383
Public safety
1,754,963
1,772,859
2,562,910
3,310,988
Public works
3,810,930
3,763,540
3,610,577
5,297,840
Community services
1,277,251
1,471,603
1,546,169
1,454,683
Community development
969,865
154,837
223,938
302,677
Operating grants and contributions
9,850,635
9,833,967
10,802,517
11,614,595
Capital grants and contributions
346,125
1,064,756
378,493
285,078
Total program revenues
18,032,155
19,333,414
20,501,782
25,033,244
Net program revenues (expenses)
(50,802,595)
(51,345,849)
(56,405,203)
(61,133,014)
General revenues and other changes
in net assets:
Taxes:
Property taxes
13,711,795
16,107,447
17,565,368
27,614,922
Sales tax
13,333,877
14,355,566
14,522,220
14,216,986
Franchise tax
2,425,160
2,617,462
2,970,211
2,845,521
Other taxes
3,733,940
4,028,136
2,959,329
3,433,966
Motor vehicle in lieu, unrestricted
6,291,597
5,054,209
7,044,997
2,606,079
Investment income
5,543,268
44,464
2,858,850
1,993,102
Other general revenues
254,980
1,324,596
2,132,720
(65,429)
Transfers
-
250,000
137
-
Total general revenues
and other changes
45,294,617
43,781,880
49,953,832
52,645,147
Changes in net assets
$ (5,507,978)
$ (7,563,969)
$ (6,451,371)
$ (8,487,867)
The City of West Covina implemented GASB 34 for the fiscal year ended June 30, 2003.
Information prior to implementation of GASB 34 is not available.
Source: City of West Covina Finance Department
- 166 -
Fiscal Year
2007
2008
2009
2010
2011
'
$ 46,328
$ 2,448,843
$ 2,849,501
$ 3,337,547
$ 2,922,898
42,186,533
45,498,406
47,682,934
48,151,398
45,253,725
19,322,212
20,246,687
21,598,894
21,054,241
21,052,423
5,167,297
5,214,550
7,835,430
6,558,987
6,629,292
9,610,651
10,000,667
12,867,904
8,619,004
9,414,730
8,320,239
8,200,588
7,962,089
6,577,544
7,101,037
'
84,653,260
91,609,741
100,796,752
94,298,721
92,374,105
1
11
AI
861,565
1,145,943
757,678
1,019,690
681,877
3,141,098
3,431,488
3,611,259
3,850,741
3,571,864
6,339,196
4,251,433
5,818,290
7,041,281
8,043,988
1,526,866
1,443,945
1,158,644
1,089,227
1,166,675
537,813
275,235
266,286
313,639
240,462
8,607,221
10,618,414
11,895,355
5,157,956
10,189,050
2,714,668
434,630
578,828
3,574,609
678,827
23,728,427
21,601,088
24,086,340
22,047,143
24,572,743
(60,924,833) (70,008,653) (76,710,412) (72,251,578) (67,801,362)
32,458,314
34,760,944
36,387,548
28,849,815
30,888,074
14,056,880
11,167,748
9,261,965
7,791,286
12,550,157
2,874,165
3,367,958
3,512,830
3,093,538
3,159,080
4,454,217
4,445,300
5,108,429
5,392,829
5,449,323
650,304
500,629
383,831
331,289
517,098
6,919,306
7,800,642
4,768,327
4,288,088
2,281,105
7,895,977
2,239,053
3,200,753
2,077,837
4,412,125
-
-
78,750
93,140
95,934
69,309,163
64,282,274
62,702,433
51,917,822
59,352,896
$ 8,384,330 $ (5,726,379) $ (14,007,979) $ (20,333,756) $ (8,448,466)
TABLE 3
1 - 167 -
Expenses:
Simulator
Computer enterprise
Total expenses
Program revenues:
Charges for services:
Simulator
Computer enterprise
Total program revenues
Net revenues (expenses)
General revenues and other changes
in net assets:
Investment income
Transfers
Total general revenues
and other changes
Changes in net assets
CITY OF WEST COVINA
CHANGES IN NET ASSETS
BUSINESS -TYPE ACTIVITIES
Last Nine Fiscal Years
(accrual basis of accounting)
Fiscal Year
2003 2004 2005 2006
$ 254,867 $ 241,047 $ - $ -
1,372,798 2,023,376 2,212,802 2,098,690
1,627,665 2,264,423 2,212,802 2,098,690
90,336
79,903 - -
1,569,556
2,165,999 1,992,662 1,721,715
1,659,892
2,245,902 1,992,662 1,721,715
32,227
(18,521) (220,140) (376,975)
30,545 21,268 38,600 71,120
- (250,000) (137) -
30,545 (228,732) 38,463 71,120
$ 62,772 $ (247,253) $ (181,677) $ (305,855)
The City of West Covina implemented GASB 34 for the fiscal year ended June 30, 2003.
Information prior to implementation of GASB 34 is not available.
Source: City of West Covina Finance Department
- 168 -
0 0
TABLE 4
t
1
1
1
1
1
1
1
1
1
1
2007 2008
Fiscal Year
2009
2010
2011
2,470,811 2,682,467 2,633,564 2,507,498 2,086,135
2,470,811 2,682,467 2,633,564 2,507,498 2,086,135
1,765,224
1,755,717
1,885,071
2,193,037
2,268,982
1,765,224
1,755,717
1,885,071
2,193,037
2,268,982
(705,587)
(926,750)
(748,493)
(314,461)
182,847
66,873 37,149 12,814 108 -
- - (78,750) (93,140) (95,934)
66,873
37,149
(65,936)
(93,032)
(95,934)
$ (638,714)
$ (889,601) $
(814,429)
$ (407,493)
$ 86,913
- 169 -
17
CITY OF WEST COVINA
FUND BALANCES OF GOVERNMENTAL FUNDS
Last Nine Fiscal Years
(modified accrual basis of accounting)
Fiscal Year
2003
2004
2005
2006
General fund:
Reserved
$
28,565,395
$
24,398,011
$
24,201,596
$
24,954,584
Unreserved
29,486,397
24,427,158
23,513,760
23,982,187
Total general fund
$
58,051,792
$
48,825,169
$
47,715,356
$
48,936,771
All other governmental funds:
Reserved
$
21,204,178
$
34,406,256
$
44,606,915
$
25,188,543
Unreserved, reported in:
Special revenue funds
8,434,845
6,021,975
5,980,930
9,981,374
Debt service funds
5,874,255
(1,654,836)
929,735
12,139,928
Capital projects funds
(4,022,064)
(4,625,186)
(888,628)
(2,685,881)
Total all other governmental fund:
$
31,491,214
$
34,148,209
$
50,628,952
$
44,623,964
General fund:
Nonspendable $ - $ - $ - $ -
Unassigned - - - -
Total general fund $ - $ - $ - $ -
All other governmental funds:
Nonspendable $ - $-
Restricted - - - -
Assigned - - - -
Unassigned - - - -
Total all other governmental fund: $ - $
The City of West Covina has elected to show only nine years of data for this schedule.
Source: City of West Covina Finance Department
Wyllie
TABLE 5
1
1
1
1
1
1
1
1
1
1
1
1
Fiscal Year
2007
2008
2009
2010 2011
$ 24,793,675
$ 23,805,491
$ 22,621,000
$ 24,321,122 $ -
19,315,808
16,021,539
12,846,323
7,246,828 -
$ 44,109,483
$ 39,827,030
$ 35,467,323
$ 31,567,950 $ -
$
42,527,670
$
33,118,104
$
28,675,986
$
24,916,095
$ -
8,293,679
9,438,350
9,297,969
10,351,716
-
4,134,045
(631,251)
(2,380,312)
(465,131)
-
(1,825,601)
860,278
3,085,503
(131,153)
-
$
53,129,793
$
42,785,481
$
38,679,146
$
34,671,527
$ -
$
-
$
-
$
-
$
-
$ 20,827,056
-
-
-
-
8,786,221
$
-
$
-
$ 29,613,277
$ - $ - $ - $ - $ 8,210,093
- - - - 38,138,456
- - 1,964,946
- - - - (12,759,988)
$ - $ - $ - $ - $ 35,553,507
- 171 -
CITY OF WEST COVINA 0
CHANGES IN FUND BALANCES OF GOVERNMENTAL FUNDS
Last Nine Fiscal Years
(modified accrual basis of accounting)
Fiscal Year
2003
2004
2005
2006
Revenues:
Taxes
$ 43,507,485
$ 47,634,431 $
49,046,990
$ 58,464,794
Special assessments
3,532,950
3,311,896
3,448,956
3,582,066
Licenses and permits
1,101,778
1,425,077
1,046,759
1,336,564
Fines and forfeitures
1,219,531
1,410,536
1,264,600
1,168,842
Investment income
8,790,949
3,564,751
8,239,221
5,807,699
Rental income
436,755
593,486
589,564
266,516
Intergovernmental
9,607,367
8,586,703
12,052,408
12,301,929
Charges for services
3,657,809
4,221,452
5,397,270
6,646,242
Repayment of notes and loans
4,534,914
1,877,550
2,336,958
1,355,096
Developer fees
-
916,384
378,493
7,884
Other
1,259,634
1,624,656
2,517,164
2,566,819
Total revenues
77,649,172
75,166,922
86,318,383
93,504,451
Expenditures:
Current:
General government
5,327,308
4,230,885
4,790,513
4,912,513
Public safety
29,767,232
34,037,594
37,643,249
39,996,407
Public works
13,504,313
10,996,162
12,937,191
14,269,148
Community services
11,655,366
10,630,005
8,337,754
11,857,937
Community development
9,326,955
8,814,434
5,229,820
10,385,511
Pass -through payments
3,395,174
4,067,098
4,817,371
3,199,441
Debt service:
Principal retirement
2,258,871
1,807,869
2,200,464
2,050,000
Interest and fiscal charges
7,315,734
7,664,295
7,901,882
8,766,422
Cost of issuance
191,724
-
-
-
Developer agreement payments
-
-
-
1,858,120
Total expenditures
82,742,677
82,248,342
83,858,244
97,295,499
Excess (deficiency) of revenues
over (under) expenditures
(5,093,505)
(7,081,420)
2,460,139
(3,791,048)
Other financing sources (uses):
Transfers in
7,564,948
8,781,210
9,842,137
9,342,762
Transfers out
(7,564,949)
(9,531,210)
(10,140,446)
(10,342,762)
Issuance of bonds
5,444,192
261,792
13,500,000
2,735,000
Gain/(loss) on sale of property
(1,041,331)
-
-
-
Payment to refunded bond escrow agent
-
-
-
(2,727,525)
Total other financing sources (uses)
4,402,861
511,792
13,20.1,691
(992,525)
Net change in fund balances
$ (690,644)
$ (6,569,628)
$ 15,661,830
$ (4,783,573)
Debt service as a percentage of
noncapital expenditures
18.90%
18.90%
19.90%
18.00%
The City of West Covina has elected to show only nine years of data for this schedule.
Source: City of West Covina Finance Department
- 172 -
1
1
1
1
1
1
1
1
1
Fiscal Year
2007
2008
2009
2010
2011
$ 62,801,264
$ 65,069,488
$ 65,186,854
$ 63,270,166
$ 63,663,702
3,711,712
3,913,965
4,180,404
4,871,575
5,210,062
1,833,239
1,196,670
1,085,650
904,985
1,099,083
1,106,271
1,216,628
1,229,852
1,324,698
1,056,923
9,544,547
8,778,813
5,601,091
5,589,739
4,124,960
223,668
270,058
311,997
310,819
468,123
7,491,065
8,113,584
8,848,048
11,321,980
8,363,460
8,515,601
8,178,880
7,021,197
6,845,511
6,779,667
988,220
1,048,727
794,365
449,045
721,348
1,462,535
10,950
-
-
-
8,903,148
662,988
1,824,050
1,112,553
3,781,096
106,581,270
98,460,751
96,083,508
96,001,071
95,268,424
5,478,534
5,787,654
4,687,485
4,646,621
4,180,878
41,602,661
44,138,678
45,554,204
45,639,257
41,938,421
15,623,128
16,308,548
17,923,628
19,686,587
15,325,261
31,362,253
24,580,791
7,189,514
5,390,364
5,412,009
7,120,280
7,632,478
10,739,465
6,142,905
8,228,653
2,568,343
2,825,925
3,468,902
9,724,035
5,863,850
4,014,507
3,441,290
3,828,282
4,108,592
4,649,975
10,059,439
9,827,109
9,055,221
8,410,803
8,520,890
294,764
-
-
-
-
2,783,820
2,939,322
2,181,599
2,002,039
2,317,114
120,907,729
117,481,795
104,628,300
105,751,203
96,437,051
(14,326,459)
(19,021,044)
(8,544,792)
(9,750,132)
(1,168,627)
33,024,064
9,976,252
12,048,364
11,023,152
11,171,460
(33,024,064)
(9,901,252)
(11,969,614)
(9,180,012)
(11,075,526)
18,005,000
4,319,279
-
-
-
18,005,000
4,394,279
78,750
1,843,140
95,934
$ 3,678,541 $ (14,626,765) $ (8,466,042) $ (7,906,992) $ (1,072,693)
23.60% 21.10% 19.30% 25.60% 19.89%
-173-
TABLE 6
CITY OF WEST COVINA •
ASSESSED VALUE AND ESTIMATED ACTUAL VALUE
OF TAXABLE PROPERTY
Last Ten Fiscal Years
(in thousands of dollars)
City
Fiscal Year
Taxable
Ended
Less:
Assessed
June 30
Secured
Non -Unitary
Unsecured
Exemptions
Value
2002
$ 3,872,519
$ 371
$ 14,273
$ (30,889)
$ 3,856,274
2003
4,121,487
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
13,711
(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
2011
6,276,734
-
11,705
(86,340)
6,202,099
Note:
In 1978 the voters of the State of California passed Proposition 13 which limited property taxes to a total maximum rate of I %
based upon the assessed value of the property being taxed. Each year, the assessed value of property may be increased by
an "inflation factor" (limited to a maximum increase of 2%). With few exceptions, property is only reassessed at the time that
it is sold to a new owner. At that point, the new assessed value is reassessed at the purchase price of the property sold.
The assessed valuation data shown above represents the only data currently available with respect to the actual market
value of taxable property and is subject to the limitations described above.
Source: HdL Coren & Cone, Los Angeles Assessor 2001/2002 - 2010/2011 Combined Tax Rolls
-174-
•
to
TABLE 7
1
1
1
1
i
Community Development. Commission (CDC)
Taxable
Less:
Assessed
Secured
Unsecured
Exemptions
Value
$ 1,303,935 $
136,767
$ (97,811)
$ 1,342,891
1,388,741
133,358
(83,020)
1,439,079
1,459,309
132,127
(103,577)
1,487,859
1,547,925
132,801
(111,853)
1,568,873
1,723,957
137,934
(118,531)
1,743,360
1,895,168
146,336
(123,048)
1,918,456
2,038,968
144,533
(138,919)
2,044,582
2,283,051
150,880
(143,108)
2,290,823
2,339,976
163,198
(152,699)
2,350,475
2,336,269
157,035
(142,764)
2,350,540
City and CDC
Total
Taxable
Assessed
$ 5,199,165
5,524,621
5,955,830
6,344,377
7,022,838
7,715,914
8,245,403
8,778,018
8,569,919
8,552,639
Total
Direct Tax
Rate
13.985%
13.985%
13.985%
13.985%
13.985%
13.985%
13.985%
13.820%
13.820%
13.820%
11
-175-
0 CITY OF WEST COVINA •
DIRECT AND OVERLAPPING PROPERTY TAX RATES
Last Ten Fiscal Years
(rate per $100 of taxable value)
(Tax Rate Area 9495)
City Prop 13 Rate:
City of West Covina Sewer Maintenance District
City of West Covina Tax District I
Sub -Total City Direct Rate
Children's Institutional Tuition Fund (400.21)
County Sanitation District No. 22 Operating (066.85)
County School Services (400.15)
County School Services Fund West Covina (985.06)
Development Center Handicapped Minors West Covina (98)
Educational Revenue Augmentation Fund (400.00)
Educational Revenue Augmentation Fund (400.01)
Los Angeles County Accumulative Capital Outlay (001.20)
Los Angeles County Flood Control Imp. Dist. Main. (030.10
Los Angeles County Library (003.01)
Los Angeles County Fire - Ffw (007.31)
Los Angeles County Flood Control Maintenance (030.70)
Los Angeles County General (001.05)
Mount San Antonio Children's Center Fund (809.20)
Mount San Antonio Community College (809.04)
Upper San Gabriel Valley Muni Water - Covina (368.10)
West Covina Unified School District (985.03)
Sub -Total
Total Prop 13 Rate
Voter Approved Rates:
Metro Water District
Flood Control
Community College
Unified Schools
County
Total Voter Approved Rates
Total Tax Rate
Fiscal Year
2002
2003
2004
2005
0.003130
0.003130
0.003130
0.003130
0.136710
0.136710
0.136710
0.136710
0.139840
0.139840
0.139840
0.139840
0.002880
0.002880
0.002880
0.002880
0.014140
0.014140
0.014140
0.014140
0.001450
0.001450
0.001450
0.001450
0.007850
0.007850
0.007850
0.007850
0.000870
0.000870
0.000870
0.000870
0.072470
0.072470
0.072470
0.072470
0.169290
0.169290
0.169290
0.169290
0.000120
0.000120
0.000120
0.000120
0.001800
0.001800
0.001800
0.001800
0.024080
0.024080
0.024080
0.024080
0.007560
0.007560
0.007560
0.007560
0.010190
0.010190
0.010190
0.010190
0.329550
0.329550
0.329550
0.329550
0.000300
0.000300
0.000300
0.000300
0.031040
0.031040
0.031040
0.031040
0.000580
0.000580
0.000580
0.000580
0.185970
0.185970
0.185970
0.185970
0.860140
0.860140
0.860140
0.860140
1.000000
1.000000
1.000000
1.000000
0.007700
0.006700
0.006100
0.005800
0.001073
0.000881
0.000462
0.000245
-
0.019460
0.015246
0.014731
0.052398
0.079847
0.050839
0.082226
0.001128
0.001033
0.000992
0.000923
0.062299
0.107921
0.073639
0.103925
1.062299
1.107921
1.073639
1.103925
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 assess property values for the payment of any voter approved bonds.
Source: Los Angeles County Assessor 2001/2002 - 2010/2011 Tax Rate Table
- 176 -
!
!
Fiscal Year
2006
2007
2008
2009
2010
2011
!
0.003130
0.003130
0.003130
0.003130
0.003130
0.003130
0.136710
0.136710
0.136710
0.136710
0.136710
0.135100
0.139840
0.139840
0.139840
0.139840
0.139840
0.138230
0.002880
0.002880
0.002880
0.002880
0.002880
0.002880
!
0,014140
0.001450
0,014141
0.001450
0.014140
0.001450
0.014140
0.001450
0.014140
0.001450
0,014140
0.001450
0.007850
0.007850
0.007850
0.007850
0.007850
0.007850
0,000870
0,000870
0,000170
0,000170
0.000170
0,000170
!
0.072470
0.072470
0.072470
0.072470
0.072470
0.074500
0.169290
0.169290
0.169290
0.169290
0.169290
0.169300
0.000120
0.000120
0.000120
0.000120
0.000120
0.000120
0.001800
0.001800
0.001800
0.001800
0.001800
0.001800
0.024080
0.024080
0.024080
0.024080
0.024080
0.024100
0.007560
0.007560
0.007560
0.007560
0.007560
0.007560
!
0.010190
0.329550
1
0.01090
0.329550
0.010190
0.329550
0,010190
0.329550
0,010190
0.329550
0.010190
0.329200
0.000300
0.000300
0.000300
0.000300
0.000300
0.000300
0.031040
0.031040
0.031040
0.031040
0.031040
0.031000
!
0.000580
0.000580
0.000580
0.000580
0.000580
0.000580
0.185970
0.185970
0.185970
0.185970
0.185970
0.186000
0.860140
0.960140
0.860140
0.860140
0.860140
0.861840
1.000000
1.000000
1.000000
1.000000
1.000000
1.000000
0.005200
0.004700
0.004500
0.004300
0.004300
0.003700
0.000050
0.000050
-
-
-
-
!
0.021220
0.025300
0.017500
0.023326
0.025710
0.026363
0.061470
0.065120
0.051440
0.060406
0.052576
0.059198
0.000800
0.000660
-
-
-
-
!
0.088740
0.095830
0.073440
0.088032
0.082586
0.089261
1,088740
1.095830
1,073440
1,088032
1,082586
1,089261
!
!
'
- 177 -
0
TABLE 8
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1
0
- 178 -
ICITY
OF WEST COVINA
TABLE 9
PRINCIPAL PROPERTY TAXPAYERS
Current Year and Nine Years Ago
2011
2002
Percent of
Total City
Percent of
Total City
Taxable
Taxable
Taxable
Taxable
Assessed
Assessed
Assessed
Assessed
Taxpayer
Value
Value
Value
Value
California Newspapers Partnership
$ 22,395,174
0.43%
$ -
0.00%
Citrus Valley Medical Center
75,917,643
1.46%
-
0.00%
Cole Me West Covina California DST
-
0.00%
27,688,421
0.32%
Eastland Shopping Center
81,286,616
1.56%
102,072,600
1.19%
Eastland Tower Partnership
27,069,000
0.52%
51,003,611
0.60%
Gateway Crescent LLC
-
0.00%
56,730,228
0.66%
Glendora Avenue Apartments LLC
22,833,720
0.44%
-
0.00%
Hassen Real Estate Partnership
30,539,691
0.59%
34,951,715
0.41%
Home Depot USA, Inc.
-
0.00%
24,360,926
0.28%
Lend Lease AR Timberwood LP
22,910,580
0.44%
-
0.00%
Plaza West Covina LLC
128,260,101
2.47%
183,924,412
2.15%
'
Pried Holding Company, LLC/Pried XIV Trust 23,771,056
0.46%
28,955,055
0.34%
Sears Development Company
-
0.00%
26,422,159
0.31 %
SP Torrey Pines LLC
-
0.00%
40,107,000
0.47%
'
Westfield Corporation
33,342,791
0.64%
-
0.00%
$ 468,326,372
9.01%
$ 576,216,127
6.73%
The amounts shown above include assessed value data for both the Cityand the CommunityDevelopment
Commission.
'
The top ten property tax payers are shown
for each year.
Source: Los Angeles County Assessor 2010/11
Combined Tax Rolls and the SBE Unitary Tax Roll
- 179 -
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
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%
2011
8,782,946
8,287,440
94.36%
201,261
8,488,701
96.65%
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
- 180 -
1 • •
TABLE 10
1
Community Development Commission
Fiscal
Taxes Levied
Collected within the
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
2002
$
9,918,959
$ 9,580,979
96.59%
$ 771,567
$ 10,352,546
104.37%
1
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%
1
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%
1
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%
1
2010
20,058,658
19,121,096
95.33%
349,563
19,470,659
97.07%
2011
20,132,138
19,147,814
95.11 %
394,313
19,542,127
97.07%
1
1
1
1
1
Fiscal
Year
Ended
June 30
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
CITY OF WEST COVINA
RATIOS OF OUTSTANDING DEBT BY TYPE
Last Ten Fiscal Years
Governmental Activities
Lease
Special
Tax
Capital
Revenue
Assessment
Allocation
Lease
Bonds
Bonds
Bonds (1)
Loans
Obligations
$ 28,515,000
$ 45,915,000
$ 33,205,000
$ 955,643
$ 476,544
31,945,000
45,110,000
32,670,000
19,116,045
979,560
31,735,000
44,255,000
32,155,000
21,014,344
1,058,092
44,880,000
43,350,000
31,500,000
22,754,013
817,731
44,550,000
42,345,000
30,830,000
24,940,779
572,389
60,570,000
41,240,000
30,140,000
27,764,353
398,483
59,395,000
40,040,000
29,170,000
31,584,157
3,267,104
58,530,000
38,745,000
28,165,000
34,960,554
2,691,276
57,515,000
37,355,000
27,020,000
38,733,523
2,261,401
56,115,000
35,870,000
25,815,000
42,385,673
1,843,538
Notes:
Details regarding the City's outstanding debt can be found in the notes to the financial statements.
(1) The 1994 West Covina Public Financing Authority Water Revenue Bonds were defeased as of
June 30, 2000 due to the sale of the City's water system.
(2) These ratios are calculated using personal income and population for the prior calendar year.
Source: City of West Covina Finance Department
Total
Governmental
Activities
$ 109,067,187
129,820,605
130,217,436
143,301,744
143,238,167
160,112,836
163,456,261
163,091,830
162,884,924
162,029,211
- 182 -
Business -type
Activities
Certificates
of
Total
Business -type
Total
Primary
Percentage
of Personal
Debt
per
Participation
Activities
Government
Income (2)
Capita (2)
'
$ -
$ - $
109,067,187
3.15%
$ 1,015
-
-
129,820,605
3.65%
1,191
-
-
130,217,436
3.52%
1,180
-
-
143,301,744
3.65%
1,290
-
-
143,238,167
3.42%
1,283
-
-
160,112,836
3.52%
1,428
-
-
163,456,261
3.45%
1,459
-
-
163,091,830
3.39%
1,456
'
-
-
162,884,924
3.37%
1,443
-
-
162,029,211
3.47%
1,527
1
'
- 183 -
TABLE 11
CITY OF WEST COVINA
TABLE 12
RATIO OF GENERAL BONDED DEBT OUTSTANDING
Last Ten Fiscal Years
(in thousands of dollars, except Per Capita)
Fiscal Year
Lease
Special
Tax
Percent of
Ended
Revenue
Assessment
Allocation
Assessed
Per
June 30
Bonds
Bonds
Bonds
Total
Value (1)
Capita
2002
$ 28,515
$ 45,915
$ 33,205
$ 107,635
2.07%
$ 265
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%
530
2009
58,530
39,745
28,165
125,440
1.43%
522
2010
57,515
37,355
27,020
121,890
1.42%
510
2011
56,115
35,870
25,815
117,800
1.38%
529
General bonded debt is debt payable with governmental fund resources and general obligation bonds recorded in
enterprise funds (of which, the City has none).
(1) Assessed value has been used because the actual value of taxable property is not readily available in the State
of California.
Sources: City of West Covina Finance Department
Los Angeles County Assessor's Office
- 184 -
CITY OF WEST COVINA
I
k
J
I
I
d
DIRECT AND OVERLAPPING DEBT
June 30, 2011
City Assessed Valuatior
Redevelopment Agency Incremental Valuatio
Total Assessed Valuatior
Overlapping Debi
*330.10 Metropolitan Water District
809.50 Mt San Antonio CCD DS 2001 S-A
809.51 Mt San Antonio CCD DS 2004E
809.52 Mt San Antonio CCD DS 2005 Refunding Bon
809.53 Mt San Antono CD DS 01, 2006 Series C
809.54 Mt San Antonio DS 2001, 2008 Series L
820.50 Baldwin Park Unified DS 96 Ser A
920.51 Baldwin Park USD DS 2001 Refunding Bond
820.52 Baldwin Park USD DS 2002 Series 2003
820.53 Baldiwn Park USD DS 2002 Series 2004
820.54 Baldwin Park Unif DS 2005 Refunding Bond
820.55 Baldwin Park Unif DS 2002 Series 200_
820.56 Baldwin Park USD DS 2002 Series 200E
820.57 Baldwin Park Unif DS 2006 Ser 200,
820.58 Baldwin Park Unif DS 2006 Ser 200E
821.51 Bassett Unified DS 2004 Series 2005 A
821.52 Bassett Unified DS 2004 Series 2005 E
821.54 Bassett Unified DS 2006 Ser 2007
821.55 Bassett Unified DS 2006 Ser B
847.51 Covina Valley USD DS 2001 Series A
847.52 Covina Vy USD DS 2001 Series E
847.53 Covina Vy USD DS 2006 Ser 200E
847.54 Covina Vy USD DS 2006, 2007 Ser E
870.50 Hacienda -La Puente USD DS 2000 Series A
870.51 Hacienda -La Puente USD DS 2000 S-03E
870.52 Hacienda -La Puente Unified DS 2005 Ref Bd
870.53 Hacienda -La Puente Unified DS 2007 Refm,
918.50 Rowland Hghts USD DS 2000 Series A
918.51 Rowland Hghts USD DS 2000 Series B
918.52 Rowland Hghts Unif DS 2005 Ref Bd,,
918.53 Rowland USD DS 2006 Series A
918.54 Rowland Hghts USD DS 2006 Series B
918.55 Rowland Hghts USD DS 2006 Series B-Baby
980.50 Walnut Valley Unified DS 201
980.51 Walnut Valley Unified 2011 Refunding Boric
980.55 Walnut Valley Unif DS Ser 1997 7
980.58 Walnut Valley USD DS 2000 Ser C
980.59 Walnut Valley USD DS 2000 Ser E
980.60 Walnut Valley USD DS 2000 Ser E
980.61 Walnut Valley Unif DS 2005 Ref Bd
980.62 Walnut Val Unif DS 2007 Ser A ( Measure S
980.63 Walnut Val Unif DS 2007 Ser A ( Measure Y
985.53 West Covina USD DS 2000 Ser C
985.54 W Covina USD DS 2002 Ref Bd S-A
985.55 West Covina Unif DS 2000 Ser E
Total overlapping deb
City direct debt
Total direct and overlapping deb
$ 6,202,099
2,350,540
$ 8.552,639
Gross Bonded
Debt Balance
Percentage
Applicable
$ 107,259,876
0.773
1,130,000
12.849
8,080,000
12.849
55,835,843
12.849
79,461,712
12.849
24,602,430
12.849
2,713,733
0.292
5,890,000
0.292
375,000
0.292
6,356,248
0.292
9,936,887
0.292
4,813,699
0.292
17,473,384
0.292
23,600,000
0.292
14,001,457
0.292
11,203,352
0.069
10,616,192
0.069
14,139,566
0.069
4,999,970
0.069
14,775,000
31.997
21,135,713
31.997
45,010,000
31.997
17,359,117
31.997
2,724,899
1.402
8,290,987
1.399
29,790,000
1.399
55,280,000
1.399
2,514,562
15.152
39,899,075
15.152
15,400,173
15.152
42,400,000
15.152
32,422,549
15.152
12,000,000
15.152
27,987,385
0.747
13,465,000
0.747
23,247,718
0.747
255,000
0.747
13,715,243
0.747
6,001,837
0.747
11,420,000
0.747
25,580,000
0.747
6,950,887
0.747
8,030,000
95.170
15,340,000
95.170
8,465,000
95.170
* This fund is a portion of a larger agency, and is responsible for debt in areas outside the Cit
TABLE 13
Net
Bonded Debt
$ 829,425
145,196
1,038,215
7,174,458
10,210,193
3,161,215
7,915
17,179
1,094
18,539
28,983
14,040
50,965
68,834
40,838
7,780
7,372
9,819
3,472
4,727,554
6,762,791
14,401,843
5,554,394
38,194
115,955
416,635
773,131
381,018
6,045,684
2,333,502
6,424,635
4,912,808
1,818,293
209,151
100,625
173,732
1,906
102,495
44,852
85,342
191,161
51,944
7,642,139
14,599,054
8,056,128
108,800,498
162,884,924
This report reflects debt which is being repaid through voter -approved property tax indebtedness. It excludes mortgage revenue, t
allocation bonds, interim financing obligations, non -bonded capital lease obligations, and certificates of participation, unless prov.
by the City.
Source: HdL, Coren & Cone, L.A. County Assessor and Auditor Combined 2010/11 Lien Date Tax Rolls.
11
-185-
Assessed valuation
Conversion percentage
Adjusted assessed valuation
Debt limit percentage
Debt limit
Total net debt applicable to limitation
Legal debt margin
Total debt applicable to the limit
as a percentage of debt limit
CITY OF WEST COVINA •
LEGAL DEBT MARGIN INFORMATION
Last Ten Fiscal Years
(in thousands of dollars)
Fiscal Year
2002
2003
2004
2005
$ 3,856,274 $
4,085,542 $
4,467,971 $
4,775,504
25%
25%
25%
25%
964,069
1,021,396
1,116,993
1,193,876
15%
15%
15%
15%
144,610
153,208
167,549
179,081
$ 144,610 $
153,208 $
167,549 $
179,081
0.0% 0.0% 0.0% 0.0%
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 proportionately modified to 3.75%
(25% of the 15%) for the purpose of this calculation in order to be consistent with the computational effect of
the debt limit at the time of the State's establishment of the limit.
Sources: City of West Covina Finance Department
Los Angeles County Assessor's Office
- 186 -
TABLE 14
Fiscal Year
2006
2007
2008
2009
2010
2011
$ 5,279,478 $
5,797,458 $
6,200,821 $
6,487,195 $
6,219,444 $
6,202,099
25%
25%
25%
25%
25%
25%
1,319,870
1,449,365
1,550,205
1,621,799
1,554,861
1,550,525
15%
15%
15%
15%
15%
15%
197,980
217,405
232,531
243,270
233,229
232,579
$ 197,980 $ 217,405 $ 232,531 $ 243,270 $ 233,229 $ 232,579
0.0% 0.0% 0.0%
0.0% 0.0% 0.0%
- 187 -
CITY OF WEST COVINA
PLEDGED -REVENUE COVERAGE
Last Ten Fiscal Years
(In thousands of dollars)
Fiscal Year
Lease Revenue Bonds and Certificates of Participation
Ended
Debt Service
June 30
Revenue
Principal Interest
Coverage
2002
$ 36,237
$ 1,110 $ 1,156
15.99
2003
36,408
195 361
65.48
2004
36,793
210 597
45.59
2005
41,865
355 1,037
30.08
2006
46,565
375 1,296
27.87
2007
47,964
2,130 2,411
10.56
2009
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
2011
47,672
1,855 1,268
15.26
Fiscal Year
Tax Allocation Bonds
Ended
Debt Service
June 30 Revenue
Principal
Interest Coverage
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
2011 19,542
1,205
1,127
8.38
Notes: Details regarding the City's outstanding debt
can be found in the notes to the basic financial statements.
Operating expenses do not include interest or depreciation expenses.
Source: City of West Covina Finance Department
- 188 -
11
•
TABLE 15
Fiscal Year
Ended
June 30
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
Less
Operating
Revenue
Expenses
$ 5,214
_
$ 1,210 $
3,388
1,367
4,643
1,017
4,005
1,128
3,831
739
3,995
593
3,765
811
3,375
333
3,828
72
3,591
470
Assessment District Bond
Net
Available Debt Service
nue
Principal
4,004
_
$ 755 $
2,021
805
3,626
855
2,877
905
3,092
1,005
3,402
1,105
2,954
1,200
3,042
1,295
3,756
1,390
3,121
1,485
- 189 -
'est
Coverage
2,722
1.15
2,683
0.58
2,642
1.04
2,597
0.82
2,548
0.87
2,494
0.95
2,430
0.81
2,358
0.83
2,281
1.02
2,197
0.85
CITY OF WEST COVINA
TABLE 16
DEMOGRAPHIC AND ECONOMIC STATISTICS
Last Ten Calendar Years
Personal
Per Capita
Annual
Income
Personal
Unemployment
Calendar
Population
(in thousands)
Income
Rate
Year
(1)
(2)
(3)
(4)
2001
107,404
$ 3,457,013 $
32,187
5.00%
2002
108,994
3,554,839,
32,615
5.90%
2003
110,315
3,699,634
33,537
6.10%
2004
111,098
3,922,759
35,309
5.70%
2005
111,675
4,192,615
37,543
4.70%
2006
112,113
4,544,837
40,538
4.20%
2007
112,009
4,735,517
42,278
4.40%
2008
112,022
4,807,536
42,916
6.60%
2009
112,880
4,833,296
42,818
10.20%
2010
106,098
4,668,206
43,999
11.20%
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 unemployment rate.
- 190 -
iCITY
OF WEST COVINA
TABLE 17
'
PRINCIPAL EMPLOYERS
Current Year and Nine Years Ago
2011
2002
Percent of
Number of Total
Percent of
Number of Total
Employer
Employees Employment
Employees Employment
'
Queen of the Valley Campus
1,781 3.66%
West Covina Unified School District
1,354 2.79%
'
Target Stores #T1028 and T2147
482 0.99%
City of West Covina
459 0.94%
Macy's
273 0.56%
Data was not available
at time of printing
'
S G V Newspaper Group
264 0.54%
J C Penney Corp., Inc. #1505-7
256 0.53%
Interspace/Concorde Battery
213 0.44%
'
B.J.'s Restaurant
181 0.37%
Sears Roebuck & Company
149 0.31%
1
Note: "Total Employment"
the located
as used above represents total employment of all employers
within the City limits.
1
1
1
1
1
Sources: Labor Market Info, EDD, State of California
City of West Covina Business License section
-191-
(This page intentionally left blank.)
11
17
1
1
- 192 -
I
1
1
1
1
1
1
Function
General government
Public safety
Public works
Community services
Community development
Total
CITY OF WEST COVINA
TABLE 18
FULL-TIME AND PART-TIME CITY EMPLOYEES
BY FUNCTION
Last Ten Fiscal Years
Fiscal Year
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
39
47
44
43
44
43
43
42
40
39
291
295
297
297
296
307
307
306
295
281
82
81
81
79
79
79
79
83
78
76
70
71
65
66
63
63
63
55
47
44
21
23
23
22
22
24
24
24
23
19
503
517
510
507
504
516
516
510
483
459
Source: City of West Covina Finance Department
-193-
Function
Police:
CITY OF WEST COVINA
OPERATING INDICATORS
BY FUNCTION
Last Ten Fiscal Years
2002
Fiscal Year
2003 2004 2005
Total arrests
4,183
3,701
3,837
3,852
Calls for police service (1)
95,546
93,822
95,654
89,340
Graffiti sites cleaned (2)
N/A
N/A
N/A N/A
Fire:
Emergency responses
6,717
7,179
7,080
7,122
Fire inspections
2,391
3,350
3,350
3,819
Public Works:
Building permits issued
3,079
3,510
3,830
3,798
Community Services:
Recreation class registrations
2,500
2,400
3,617
3,950
Environmental Management:
Graffiti sites cleaned (2)
7,077
7,767
8,055
8,055
Note:
(1) Calls received that generated an incident number, not necessarily a
police response.
(2) Due to departmenr restructuring, the responsibility for graffiti abatement was absorbed
by the Police Department
starting in fiscal year 2008-2009
Source: City of West Covina Finance Department
- 194 -
TABLE 19
2006
2007
Fiscal Year
2008
2009
2010
2011
'
3,491
3,449
3,726
3,651
3,397
3,210
80,048
79,753
82,588
82,682
75,752
71,254
N/A
N/A
15,736
8,009
16,077
15,781
7,057
7,064
7,167
7,194
6,949
7,454
3,122
3,711
3,748
3,751
3,603
430
4,250
3,854
3,189
2,891
2,334
2,477
4,342
4,820
5,097
6,564
7,916
7,041
9,600
17,903
N/A
N/A
N/A
N/A
1
-195-
Function
Police:
Stations
Fire:
Stations
Public Works:
Streets (miles)
Streetlight poles
Streetlight fixtures
Traffic signals
Parks and Recreation:
Sports complex
Parks
Community centers
Wastewater:
Sanitary sewers (miles)
Storm sewers (miles)
Source: City of West Covina
CITY OF WEST COVINA
CAPITAL ASSET STATISTICS
BY FUNCTION
Last Ten Fiscal Years
Fiscal Year
2002
2003
1
5
1
5
230.0
230.0
826
826
1,109
1,109
113
113
15
15
4
4
233.0
233.0
42.0
42.0
2004 2005
1 1
5 5
230.0
230.0
826
826
1,109
1,109
113
113
15 15
4 4
233.0 233.0
42.0 42.0
- 196 -
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
•
2006
2007
1
1
5
5
230.0
230.0
826
826
1,109
1,109
114
114
16
16
4
4
233.0
238.9
42.0
42.0
Fiscal Year
2008 2009
of
TABLE 20
2010 2011
1 I 1
5
5
5
5
230.0
230.0
230.0
231.0
826
826
826
826
1,109
1,109
1,109
11,019
114
116
116
116
1
1
1
1
16
16
16
16
4
4
4
4
238.9
238.9
238.9
238.9
42.0
42.0
42.0
42.0
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