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Home My WebLink AboutCAFR - FY 2011-12CITY OF DIAMOND BAR COMPREHENSIVE ANNUAL FINANCIAL REPORT FOR THE YEAR ENDED JUNE 30, 2012 Prepared by: Finance Department Dianna Honeywell Director of Finance CITY OF DIAMOND BAR COMPREHENSIVE ANNUAL FINANCIAL REPORT FOR THE YEAR ENDED JUNE 30, 2012 Prepared by: Finance Department Dianna Honeywell Director of Finance CITY OF DIAMOND BAR COMPREHENSIVE ANNUAL FINANCIAL REPORT FOR THE YEAR ENDED JUNE 30, 2012 TABLE OF CONTENTS Page(s) INTRODUCTORY SECTION Letter of Transmittal ............. GFOA Certificate of Achievement for Excellence in Financial Reporting .............................................. vi OrganizationChart................................................................................................................................ vii List of Elected and Administrative Officials.......................................................................................... viii FINANCIAL SECTION Independent Auditors' Report.................................................................................................................1 Management's Discussion and Analysis (Required Supplementary Information)..................................3 BASIC FINANCIAL STATEMENTS Government -wide Financial Statements Statementof Net Assets..........................................................................................................15 Statementof Activities..............................................................................................................16 Fund Financial Statements Balance Sheet — Governmental Funds....................................................................................18 Reconciliation of the Balance Sheet of Governmental Funds to the Statement of Net Assets................................................................................................19 Statement of Revenues, Expenditures, and Changes in Fund Balances................................20 Reconciliation of Statement of Revenues, Expenditures and Changes in Fund Balances of the Governmental Funds to the Statement of Activities .............................21 Budgetary Comparison Statement - General Fund................................................................22 Statement of Net Assets — Proprietary Funds..........................................................................23 Statement of Revenues, Expenses, and Changes in Fund Net Assets — Proprietary Funds......................................................................................................24 Statement of Cash Flows — Proprietary Funds........................................................................25 Notes to Basic Financial Statements..........................................................................................27 CITY OF DIAMOND BAR COMPREHENSIVE ANNUAL FINANCIAL REPORT FOR THE YEAR ENDED JUNE 30, 2012 TABLE OF CONTENTS COMBINING AND INDIVIDUAL FUND STATEMENTS AND SCHEDULES Combining Balance Sheet - Nonmajor Governmental Funds Combining Statement of Revenues, Expenditures, and Changes in Fund Balances - Nonmajor Governmental Funds ............................. Budgetary Comparison Schedules - Special Revenue Funds: State Gas Tax Fund..................................................................... Proposition A Transit Fund.......................................................... Proposition C Transit Fund ......................................................... Integrated Waste Management Fund .......................................... Traffic Improvement Fund............................................................ Air Quality Improvement Fund ..................................................... Trails & Bikeways Fund................................................................ Proposition1 B Fund..................................................................... Park and Facility Development Fund ........................................... Community Development Block Grant (CDBG) Fund ................. Citizens Option for Public Safety (COPS) Fund .......................... Asset Seizure Fund...................................................................... California Law Enforcement Equipment Program (CLEEP) Fund Edward Byrne Justice Assistance Grant Fund ............................ Landscape Maintenance District Fund ......................................... Measure R Local Return Fund ..................................................... EECBGFund............................................................................... Budgetary Comparison Schedule - Capital Projects Funds: Capital Improvement Fund ......................................................... Budgetary Comparison Schedule - Debt Service Funds: Public Financing Authority.......................................................... Combining Statement of Net Assets — Internal Service Funds..... Combining Statement of Revenues, Expenses, and Changes in Fund Net Assets — Internal Service Funds .................................... Combining Statement of Cash Flows — Internal Service Funds Page(s) 0 .61 .62 .63 .64 .65 .66 .67 .68 .69 .70 .71 .72 .73 .74 .75 .76 .77 .78 .79 .80 .81 .82 CITY OF DIAMOND BAR COMPREHENSIVE ANNUAL FINANCIAL REPORT FOR THE YEAR ENDED JUNE 30, 2012 TABLE OF CONTENTS STATISTICAL SECTION Financial Trends: Page(s) Net Assets by Component - Last Nine Fiscal Years...................................................................84 Changes in Net Assets - Last Nine Fiscal Years........................................................................86 Fund Balances of Governmental Funds - Last Nine Fiscal Years..............................................88 Changes in Fund Balances of Governmental Funds - Last Nine Fiscal Years ...........................90 Revenue Capacity: Assessed and Estimated Actual Value of Taxable Property - Last Ten Fiscal Years .................93 Direct and Overlapping Property Tax Rates - Last Ten Fiscal Years.........................................94 Top 10 Property Taxpayers - Current Fiscal Year and Ten Fiscal Years Ago ............................ 96 Secured Property Tax Levies and Collections — Last Ten Fiscal Years.....................................97 Debt Capacity: Ratios of Outstanding Debt by Type - Last Ten Fiscal Years.....................................................98 Directand Overlapping Debt.......................................................................................................99 Computation of Legal Debt Margin - Last Ten Fiscal Years .....................................................100 Demographic and Economic Information: Demographic and Economic Statistics - Last Ten Calendar Years ..........................................101 Principal Employers - Current Fiscal Year and Nine Fiscal Years Ago ....................................102 Operating Information: Full -Time Equivalent City Employees by Function - Last Ten Fiscal Years .............................103 Operating Indicators by Function - Last Ten Fiscal Years ........................................................104 Capital Asset Statistics by Function - Last Eight Fiscal Years..................................................105 THIS PAGE INTENTIONALLY LEFT BLANK December 27, 2012 City of Diamond Bar 21825 Copley Drive • Diamond Bar, CA 91765-4178 (909) 839-7000 • Fax (909) 861-3117 www.Cityof Diamond Bar.com Honorable Mayor and Members of the City Council City of Diamond Bar Diamond Bar, California It is a pleasure to submit the Comprehensive Annual Financial Report of the City of Diamond Bar for the fiscal year ended June 30, 2012. This report consists of management's representations concerning the finances of the City. Consequently, responsibility for both the accuracy of the presented data and the completeness and fairness of the presentation, including all disclosures, rests with the City's management. 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 conformance with generally accepted accounting principles (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 assurance that the financial statements will be free from misstatement. As management, we assert that, to the best of our knowledge and belief, this financial report is complete and reliable in all material aspects. The City's financial statements have been audited by Lance, Soll, & Lunghard, 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 fiscal year ended June 30, 2012, are free of material misstatement. The independent audit involved examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements; assessing the accounting principles used and significant estimates made by management; and evaluating the overall financial statement presentation. The independent auditor concluded based upon the audit that there was a reasonable basis for rendering an unqualified opinion that the City's financial statements for the fiscal year ended June 30, 2012, were fairly presented RMded paper in conformity with GAAP. The independent auditor's report is presented as the first component of the financial section of this report. The independent audit of the financial statements of the City of Diamond Bar 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 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 CITY OF DIAMOND BAR The City, incorporated in 1989, is located at the junction of the 57 and 60 freeways. As a result, the City of Diamond Bar is at the hub of the Los Angeles basin transportation network. A twenty-five mile radius encompasses Pasadena, downtown Los Angeles, Long Beach, Irvine and Riverside. Diamond Bar is a relatively young residential community of about 56,000, situated among the meandering hills and valleys of Brea Canyon. Many desired services can be found in Diamond Bar's shopping and business centers. Recreational opportunities within the City include more than 70 acres of developed park facilities, hiking trails, a community center, an 18 -hole public golf course and 370 acres of undeveloped publicly owned open space. The City has operated under the council-manager form of government since incorporation. Policy making and legislative authority are vested in a five member City Council. The City Council is responsible, among other things, for passing ordinances, adopting the budget, appointing committees and task forces, and hiring both the City Manager and contracting for City Attorney services. The City Manager is responsible for overseeing the day -to day operations of the City, and for appointing the heads of the various departments. The Council is elected on a non-partisan basis. Council members serve four-year staggered terms, with elections held every other year. Each December, the City Council selects a Mayor and Mayor Pro Tem from its membership. The City of Diamond Bar is a contract city and as such contracts for many of its services. This includes police services, building and safety services, engineering, road maintenance and landscape maintenance. The Los Angeles County Fire District provides fire protection, which is independent of the City. Funds are collected through property tax bills and are disbursed directly to the 11 Los Angeles County Fire District by the Los Angeles County Tax Collector's Office. Water services for the City are provided by the Walnut Valley Water District. Refuse collection is provided by private waste collection companies. Additionally, schools are provided by both the Walnut Valley Unified School District and the Pomona Unified School District. Accordingly, none of these activities are included in this report. ECONOMIC CONDITION AND OUTLOOK The continuing recession has had a significant impact on the national, state and local economies. During the last few years, retail sales declined significantly and unemployment numbers reached new heights. This along with the major budget shortfalls experienced by the State, impacted all cities in the State including the City of Diamond Bar. Despite some signs the economy is improving and despite the passage of Proposition 30 which increases revenue to the State it is anticipated that much of the financial burden will continue to fall upon municipal agencies. This is evidenced by the State's continuing shifting of funds. The City's FY2012-2013 budget has been developed keeping this in mind. The operating budget was kept at or below the prior year's levels, and reflects the loss of all Vehicle License Fees revenues taken by the State to balance their own budget. The City's sales tax base has stopped declining, but the growth in sales tax is modest at best, with an increase of just over 2% in the FY 12/13 budget. The City's interest in promoting economic development has become increasingly more difficult with the tightening of credit and poor retail sales outlook. Since the City is located at a major freeway interchange several of the City's major sales tax producers are service stations, so the price of gasoline greatly influences the sales tax revenue received. It has been the City's economic development goal to diversify its sales tax base. Despite the slow- down in the economy, the City continues to explore economic development opportunities for the City. In October 2007, Majestic Realty announced its plans to develop a professional football stadium based entertainment, retail and office development in the neighboring city, City of Industry. The City is mindful of the potential impacts a development of this nature would bring. The City would be seriously impacted by increased traffic since the primary access to the venue will be at the Orange (SR57) and Pomona (SR -60) interchange located within the City of Diamond Bar. To mitigate these concerns, the City has a settlement agreement with the City of Industry addressing environmental and operational concerns. This agreement provides much needed funding for traffic improvements, noise mitigation, and future funding for City facilities, if and when the Stadium project moves forward. There are also benefits to the City of Diamond Bar if the stadium is built in nearby City of Industry. It is anticipated that there would be increases in retail activity, transient occupancy tax revenue and gas tax revenue. iii Part of the fallout from the economic decline is the decline in property values. This provided the City with an opportunity to purchase a 57,000 square foot building at a great savings. The building provides a permanent home for the City of Diamond Bar's City Hall which occupies a little over half of the building. The balance of the space houses the Diamond Bar Branch of the County Library. Escrow closed on the purchase in September, 2010. The City used available General Fund reserves to pay cash for the building. City Staff moved into the new City Hall facility in January 2012. The County Library staff moved into the new Library facility in July 2012. On December 1, 2011, the city defeased $12.2 million of variable rate bonds and issued $11.8 million of fixed rate bonds in order to take advantage of historically low interest rates for tax exempt bonds. In addition to eliminating interest rate risk, the City also eliminated the risk of not being able to issue a new letter of credit and saved the cost of an interest rate cap and remarketing fees that existed on the variable rate bonds. The City's future economic health is being secured by building healthy reserves through fiscally conservative budgets and policies in addition to aggressively pursuing economic development opportunities. AWARDS 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 Diamond Bar for its comprehensive annual financial report for the fiscal year ended June 30, 2011. The Certificate of Achievement is a prestigious national award recognizing conformance with the highest standards for preparation of state and local financial reports. In order to be awarded a Certificate of Achievement, a government unit must publish an easily readable and efficiently organized comprehensive annual financial report, with contents that conform to program standards. The CAFR must satisfy both generally accepted accounting principles and applicable legal requirements. A Certificate of Achievement is valid for a period of one year only. The City of Diamond Bar has received the Certificate of Achievement for the last seventeen consecutive years (fiscal years ended 1995 through 2011 ). We believe our current report continues to meet the Certificate of Achievement Program's requirements and we are submitting it to GFOA to determine its eligibility for another certificate. REPORTING ENTITY AND ITS SERVICES This Comprehensive Annual Financial Report includes all funds of the City. The City directly provides a limited range of services and contracts for several other services. The City's significant reliance on contracted services has the benefit of reducing expenses to the citizens of the City of Diamond Bar while simultaneously providing the iv City with a high degree of flexibility in responding to changing economic conditions. Contracted services include police protection, building and safety, street maintenance, park maintenance, capital improvement projects, animal control, attorney services and engineering. Staff provided services include: community development (which includes planning, economic development, building and safety management, and neighborhood improvement), public works (which includes engineering, capital projects administration, street maintenance contract management, traffic and transportation matters, engineering contract management, and solid waste contract management), community services (which includes senior services, park maintenance, recreation services, community center operation, and landscape maintenance), public information, subsidized transit ticket sales, grant administration, financial management, and administrative management. All of these activities are included in this report. INTERNAL CONTROLS The City of Diamond Bar's accounting system has been developed by giving consideration to the adequacy of internal accounting controls. Internal accounting controls are implemented by the City to provide reasonable assurance that assets are safeguarded against loss from unauthorized use or disposition; and that the City's financial records used for preparing financial statements are maintained in a reliable fashion. The concept of reasonable assurance recognizes that the cost of these controls should not exceed the benefits derived from them. The City's internal controls accomplish these objectives. ACKNOWLEDGEMENTS The preparation of this Comprehensive Annual Financial Report was made possible by the dedicated service and excellence found within the City's Finance Department staff, and through the cooperation of the entire City staff. Each City staff member has my sincere appreciation for their cooperation and contributions in the preparation of this Report. I would also like to thank our independent auditor, Lance, Soll, and Lunghard, L.L.P., for its expertise and advice in the preparation of the City's Comprehensive Annual Financial Report. In closing, without the leadership and support of the City Council of the City of Diamond Bar, the preparation of this Report would not have been possible. Sincerely, James DeStefano City Manager v Presented to City of Diamond Bar For its Comprehensive Animal Financial Report for the Fiscal Year Ended June 30, 2011 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. Uw411E0 STATES" AND , :ItP �''� President ' C1�O�lTI01i � Executive Director Vi CL �i Qn r f 5 v f� T- em r Ljh r ad r r � 2 ao L r r � V fu Rei Vii 55 bf) r X IZ F, i Un _ `• { Rei 1e� i bf) r X IZ F, i Un CITY OF DIAMOND BAR ELECTED AND ADMINISTRATIVE OFFICIALS Mayor Mayor Pro Tern Councilmember Councilmember Councilmember City Manager Assistant City Manager City Clerk Director of: Community Services Community Development Finance Information Systems Public Works FISCAL YEAR 11-12 viii Ling -Ling Chang Jack Tanaka Ron Everett Carol Herrera Steve Tye James DeStefano David Doyle Tommye Cribbins Bob Rose Greg Gubman Dianna Honeywell Ken Desforges David Liu •00• LS CERTIFIED PUBLIC ACCOUNTANTS Brandon W. Burrows, CPA David E. Hale, CPA, CFP A Professional Corporation Donald G. Slater, CPA Richard K. Kikuchi, CPA Susan F. Matz, CPA Shelly K. Jackley, CPA Bryan S. Gruber, CPA Deborah A. Harper, CPA INDEPENDENT AUDITORS' REPORT To the Honorable Mayor and Members of City Council City of Diamond Bar, California We have audited the accompanying financial statements of the governmental activities, each major fund, and the aggregate remaining fund information of the City of Diamond Bar, California, as of and for the year ended June 30, 2012, which collectively comprise the City's basic financial statements as listed in the table of contents. These financial statements are the responsibility of City of Diamond Bar, California'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 Controller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and the significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities, each major fund, and the aggregate remaining fund information of the City of Diamond Bar, California, as of June 30, 2012, and the respective changes in financial position, and cash flows, where applicable, thereof and the respective budgetary comparison for the General Fund for the year then ended in conformity with accounting principles generally accepted in the United States of America. In accordance with Government Auditing Standards, we have also issued our report dated December 18, 2012, on our consideration of the City of Diamond Bar, California's internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is 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 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. Accounting principles generally accepted in the United States of America require that the management's discussion and analysis as listed in the table of contents be presented to supplement the basic financial statements. Such information, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board, who considers it to be 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 required supplementary information 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 Lance, Soil & Lunghard, LLP 203 North Brea Boulevard • Suite 203 • Brea, CA 92821 TEL: 714.672.0022 • Fax: 714.672.0331 www.lslcpas.com Orange County • Temecula Valley Silicon Valley LSL + CFNTIF IFC PURI IC ACCOUNTANTS To the Honorable Mayor and Members of City Council City of Diamond Bar, California knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance. Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the City of Diamond Bar, California's financial statements as a whole. The introductory section, combining and individual nonmajor fund financial statements and supplementary schedules, and statistical section, are presented for purposes of additional analysis and are not a required part of the financial statements. The combining and individual nonmajor fund financial statements and supplementary schedules are the responsibility of management and were derived from and relate directly to the underlying accounting and other records used to prepare the financial statements. The information has been subjected to the auditing procedures applied in the audit of the financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the financial statements or to the financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the information is fairly stated in all material respects in relation to the financial statements as a whole. The introductory and statistical sections have not been subjected to the auditing procedures applied in the audit of the basic financial statements and, accordingly, we do not express an opinion or provide any assurance on them. Brea, California December 18, 2012 2 Management's Discussion and Analysis As management of the City of Diamond Bar, we offer readers of the City of Diamond Bar's financial statements this narrative overview and analysis of the financial activities of the City of Diamond Bar for the fiscal year ended June 30, 2012. We encourage readers to consider the information presented here in conjunction with additional information that we have furnished in our letter of transmittal. Financial Highlights • The total revenues from all sources equaled $26,789,780. • The total cost of all City programs equaled $32,272,500. • The assets of the City of Diamond Bar exceeded its liabilities at the close of the fiscal year by $405,860,546 (net assets). Of this amount, $18,288,491 represents unrestricted net assets may be used to meet the City's ongoing obligations to citizens and creditors. • As of the close of the current fiscal year, the City of Diamond Bar's governmental funds reported combined ending fund balances of $21,723,391, a decrease of $5,395,471 (after a restatement of prior years in the amount of $290,281) in comparison with the prior year. This decrease is due primarily to the building improvements completed during the year for the new City Hall and the Diamond Bar branch of the Los Angeles County Library. Approximately $12.3 million of the $21.7 million is available for spending at the City's discretion. • At the end of the current fiscal year, unrestricted fund balance for the general fund was $12,616,200, or over 67% of the amount of general fund expenditures (net of the expenditures for building improvements for City Hall and the Library). The General Fund balance unrestricted balance of $12.6 million is in addition to a $4.5 million committed for emergencies as established by City Council resolution. Overview of the Financial Statements This discussion and analysis is intended to serve as an introduction to the City of Diamond Bar's basic financial statements. The City of Diamond Bar's basic financial statements comprise three components: 1) government -wide financial statements, 2) fund financial statements, and 3) notes to the financial statements. This report also contains other supplementary information in addition to the basic financial statements themselves. 3 Government -wide financial statements — The government —wide financial statements are designed to provide readers with a broad overview of the City of Diamond Bar's finances, in a manner similar to a private -sector business. The statement of net assets presents information on all of the City of Diamond Bar's assets, liabilities and deferred inflows/outflows of resources with the difference reported as net assets. Over time, increases or decreases in net assets may serve as a useful indicator of whether the financial assets of the City of Diamond Bar is improving or deteriorating. The statement of activities presents information showing how the City's net assets changed during the most recent fiscal year. All changes in net assets are reported as soon as the underlying event giving rise to the change occurs, regardless of the timing of related cash flows. Thus, revenues and expenses are reported in this statement for some items that will only result in cash flows in future fiscal periods (e.g., uncollected taxes and earned but unused vacation leave). Both of the government -wide financial statements distinguish functions of the City of Diamond Bar that are principally supported by taxes and intergovernmental revenues (governmental activities) from other functions that are intended to recover all or a significant portion of their costs through user fees and charges (business -type activities). The governmental activities of the City of Diamond Bar include general government, public safety, highways and streets, community development, and parks and recreation. The City of Diamond Bar currently has no business -type activities or enterprise funds. The government -wide financial statements include not only the City of Diamond Bar itself, but also a legally separate financing authority. Although legally separate, the Diamond Bar Financing Authority is included because the City is financially accountable for it. Fund financial statements — A fund is a grouping of related accounts that is used to maintain control over resources that have been segregated for specific activities or objectives. The City of Diamond Bar, like other state and local governments, uses fund accounting to ensure and demonstrate compliance with finance -related legal requirements. All of the funds of the City can be divided into two categories: governmental funds, and proprietary funds. Governmental Funds — Governmental funds are used to account for essentially the same functions reported as governmental activities in the government -wide financial statements. However, unlike the government -wide financial statements, governmental fund financial statements focus on near- term inflows and outflows of spendable resources, available at the end of the 0 fiscal year. Such information may be useful in assessing the near-term financing requirements necessary to finance City programs. Because the focus of governmental funds is narrower than that of the government -wide financial statements, it is useful to compare the information presented for governmental funds with similar information presented for governmental activities in the government -wide financial statements. By doing so, readers may better understand the long-term impacts of the City's near-term financing decisions. Both the governmental fund balance sheet and the governmental fund statement of revenues, expenditures, and changes in fund balances provide a reconciliation to facilitate this comparison between governmental funds and governmental activities. The City of Diamond Bar adopts an annual appropriated budget for its general fund. A budgetary comparison statement has been provided for the general fund to demonstrate compliance with this budget. Proprietary Funds — The type of proprietary funds that the City maintains are internal service funds that are used to allocate costs internally among the various functions of the City. The City of Diamond Bar uses these funds to account for its liability insurance costs and vehicle and computer replacement costs. Because these services predominantly benefit governmental rather than business -type functions, they have been included within governmental activities within the government -wide financial statements. Notes to the Financial Statements — The notes provide additional information that is essential to a full understanding of the data provided in the government -wide and fund financial statements. Other Information — In addition to the basic financial statements and accompanying notes, this report also presents certain required supplementary information concerning the City's budgetary control and accounting and expenditures in excess of appropriations. Government -wide Financial Analysis As mentioned earlier, net assets may serve over time as a useful indicator of the City's financial position. The City of Diamond Bar's assets exceeded liabilities by $405,860,546 at the close of 2012. (see Table 1) By far the largest portion of the City's net assets (94 percent) is its investment in capital assets (e.g., land, buildings, infrastructure, machinery, equipment, and construction in progress), less the related outstanding debt used to acquire those assets. The City of Diamond Bar uses these capital assets to provide services to its citizens; consequently, these assets are not available for future spending. Although the City's investment in its capital assets is 5 reported net of related debt, it should be noted that the resources needed to repay this debt must be provided from other sources, since the capital assets themselves cannot be used to liquidate these liabilities. Table 1 CITY OF DIAMOND BAR'S Statement of Net Assets Current and other assets Capital assets Total Assets Long-term debt outstanding Other Liabilities Total Liabilities Net assets: Invested in capital assets, net of debt Restricted Unrestricted Total Net Assets Governmental Activities 2012 2011 $28,061,069 $33,980,249 394,374,163 393,974,202 422,435,232 427,954,451 12,000,543 12,069,674 4,574,143 5,101,180 16,574,686 17,170,854 382,660,310 381,985,940 4,911,745 6,215,339 18,288,491 22,582,318 $405,860,546 $410,783,597 The City's net assets decreased by $4,923,051 which includes the restatement of net assets of $559,669. This decrease is due primarily to the use of General Fund reserves for building improvements made to the new City Hall/County Library facilities. At the end of fiscal year 2012 the City reports a decrease of $4,293,827 in the unrestricted net assets from the prior fiscal year. The City has continually expended its resources conservatively in anticipation of economic downturns and future capital needs which has resulted in being able to end the year with $18,288,491 in Unrestricted Net Assets. This year by using some of its resources the City was able to preserve service levels and continue to maintain its assets at the level the citizens of Diamond Bar have enjoyed since incorporation 23 years ago. This conservation of funds has afforded the City the enviable opportunity to purchase a building for City Hall and to provide the necessary building improvements from its reserves. 0 Table 2 City of Diamond Bar's Changes in Net Assets 2012 Revenues: Program revenues: Charges for services Operating grants and contributions Capital grants and contributions General Revenues Property taxes Transient occupancy taxes Sales Taxes Franchise Taxes Othertaxes Motor vehicle in lieu Use of money & property Other Total revenues Expenses: General Government Public Safety Highways and Streets Community Development Parks, Recreation and Culture Interest and Fiscal Charges Total expenses Increase (Decrease) in net assets Net assets - beginning Restatement of net assets Net assets - ending Revenues 012111 $6,055,535 $5,861,621 4,992,856 3,685,378 1,242,636 40,779 3,951,722 4,187,896 692,162 642,509 3,397,259 3,355,127 1,415,924 1,259,471 202,951 172,687 4,646,985 4,766,225 145,408 474,598 46,342 91,975 26,789,780 24,538,266 6,384,072 6,370,986 6,104,982 5,591,049 11,248,137 10,619,860 2,126,906 1,969,540 5,559,427 5,153,264 848,976 72,592 32,272,500 29,777,291 (5,482,720) (5,239,025) 410,783,597 416,022,622 559,669 - $405,860,546 $410,783,597 In the Statement of Activities, the City's total revenues were $26.8 million, while the total cost of all programs and services was $32.3 million. Revenues this fiscal year were 9.2% higher than those of the prior year. There were increases and decreases across the revenue categories which resulted in the overall change in revenue. The following are highlights of some of the major differences: • As anticipated, Property Tax revenues were up slightly from FY10-11. This was due to an increase in the consumer price index which allowed the County to increase overall assessed valuations by 0.99%. • Transient Occupancy Taxes grew by 7.7% in FY 11/12 as the local economy stabilized and business and vacation travel increased. 7 • Sales tax revenues were up about 3.6% due to higher gasoline prices and a slight improvement in the local economy. • Investment Income increased by 16.1% due to greater diversification of the City's portfolio. In FY10-11the City's average investment yield was down to 0.56%. By the end of FY 11-12 the City's investment yield increased to 0.82%. This increase in investment yield allowed the City to earn $25,447 more in investment income despite the City's portfolio being $7.6 million lower than at June 30 of the previous fiscal year. Expenses Due to the stagnant economy it was anticipated that the City's revenues would continue to grow, albeit at a very slow pace. As a result, the City has continued to be very diligent in controlling growth in expenditures. This year expenditures for the City totaled $32.3 million which is approximately $2.5 million, or 8.4% greater than the previous fiscal year. This increase was due primarily to one time expenditures reflected as follows: • There was an increase in Public Safety expenditures of approximately 9.2% this year. Contract rates with the L.A. County Sheriff's Department rose 3% this fiscal year. There were additional increases due to the accrual of a liability for JPIA insurance premiums that are currently payable. • Streets and Highways category was higher this year by a little over $629,000. This is due to an increase in the number of Capital Improvement projects completed during the fiscal year. • Community Development expenditures were higher in 2011-12 by $157,000. The increase reflects a slight upturn in the local economy, which resulted in a greater amount of building activity than in the prior fiscal year. • The City continued to enjoy the benefits of low interest rates on the outstanding variable rate lease revenue bonds. However, costs continued to increase for letter of credit fees, and the interest rate cap purchased in 2002 was set to expire at the end of calendar 2012. Due to record low interest rates in 2011, the City refinanced the variable rate debt into a fixed rate on December 1, 2011. Reflected in this year's statements is the increased interest expense on the long term debt coupled with one time bond issuance costs. This category is up approximately $776,000. 0 Financial Analysis of the City's Funds As noted earlier the City of Diamond Bar uses fund accounting to ensure and demonstrate compliance with finance -related legal requirements. Governmental funds - The focus of the City of Diamond Bar's governmental funds is to provide information on near-term inflows, outflows, and balances of spendable resources. Such information is useful in assessing the City's financing requirements. In particular, unreserved fund balance may serve as a useful measure of a City's net resources available for spending at the end of the fiscal year. At June 30, 2012, the City of Diamond Bar's governmental funds reported combined ending fund balances of $21,723,391, a decrease of $5,395,471 in comparison with the prior year. Approximately 56.5% of this amount ($12,282,268) constitutes unassigned fund balance, which is available for spending at the government's discretion. The remainder of the fund balance is either nonspendable, restricted or committed to indicate that it is 1) not in spendable form ($28,114), 2) restricted for particular purposes ($4,913,009) or 3) committed for particular purposes ($4,500,000). The general fund is the chief operating fund of the City. At the end of the current fiscal year, the unassigned fund balance of the general fund was $12,616,200, while the total fund balance was $17,144,314. As a measure of the general fund's liquidity, it may be useful to compare both unassigned fund balance and total fund balance to total fund expenditures. Unassigned fund balance represents 67.5% of total general fund expenditures (net of the building improvements to City Hall), while total fund balance represents 91.7% of the same amount. Since the City's incorporation in 1989, the City has been fiscally conservative contributing to healthy fund balance reserves. Several years ago the City chose to fund major maintenance projects from General Fund unrestricted fund balance when other funds were not available for this purpose. This fiscal year General Fund fund balance dropped $4,124,101, but after netting out the building improvements to City Hall and the payoff of an unfunded liability to CaIPERS, were unchanged from the prior fiscal year. Factors contributing to the change in General Fund balance reserves are as follows: • General Fund revenues were up slightly ($45,000) from FY10-11. The largest increase was in the Licenses & Permits category, primarily due to an increase in permit fees as well as increased volume in building activity. 9 • For the past few years the City has been struggling with three landscape and lighting assessment districts which are in financial straits. The assessments for these districts have not been adjusted to keep up with the cost of maintaining these districts. The general fund has continued to subsidize these districts while the City Council considers various options to make these districts self sustaining. • The City used General Fund unrestricted fund balance for building improvements and furniture & fixtures for the new City Hall facility. • The City used General Fund unrestricted fund balance to pay off the sidefund liability to the California Public Employees Retirement System (CaIPERS), an unfunded liability that was incurred at the time the City was required to join a risk pool in 2002-03. The total payoff was $588,000. • Conservative expenditure budgets over the years have contributed to the City's general fund healthy fund balance. This includes a contract city business model which aides the City in containing costs. The Capital Projects Fund ended the year with a negative fund balance of $332,407 as opposed to a negative of $37,071 in the previous year. Ideally this fund should carry a zero fund balance. Capital project expenditures are accounted for in this fund along with their offsetting revenues and transfers. Due to revenue and expenditure accruals, it is not unusual for the fund to carry a negative balance since many of the capital improvement projects are funded with reimbursable grants. General Fund Budgetary Highlights Original revenue budget projections were increased during the year by 1.0% to reflect the stabilization of the local economy, and an increase in tax revenues due to an increase in prices for gasoline. The actual revenue came in slightly higher than anticipated by an additional $25,694. The General Fund taxes category include property taxes, sales tax, franchise tax and property transfer tax. These revenues came in $259,861 more than anticipated. The variance between the amount budgeted and the amount received is due to growth in all components of this category. The revenue anticipated for Licenses, Permits and Fees was increased during the year. The actual revenue received was even higher than the amended budget projection by $63,425. General Fund appropriations were increased during the year by $1,553,722 or 6.8% from the original budget to the amended budget. The final expenditures actually came in $784,350 less than the amended budget due to 10 savings realized from the building improvements made to City Hall and incomplete construction that will be reflected in FY 12-13. Additional explanations for the difference between budget and actual expenditures include salary savings from staff vacancies, various studies and projects which were either postponed or cancelled and overall cost saving measures implemented by all departments. Capital Asset and Debt Administration Capital assets - The City of Diamond Bar's investment in capital assets for its governmental activities as of June 30, 2012 amounts to $394,374,163 (net of accumulated depreciation). This investment in capital assets includes land, buildings and improvements, furniture and fixtures, vehicles and equipment, infrastructure and construction in progress. Table 3 Capital Assets (net of depreciation) Land Right of Way Buildings and Improvements Furniture and Fixtures Vehicles & Equipment Infrastructure Construction in Progress 2012 2011 $6,587,349 265,614,104 24,763,259 1,229,664 1,152,575 93,693,637 1,333,575 $394,374,163 $6,587,349 265,614,104 21,473,338 6,604 952,368 97,367,982 1,972,457 $393,974,202 The City's capital assets increased in value $399,961 during FY11-12. Significant additions to capital assets include: The only significant addition to fixed assets in 2011-12 was the building improvements made to the new City Hall along with the furniture and fixtures purchased for City Hall. Construction in progress at the end of the year included eight projects in various stages of design or construction. There were two park improvement projects in progress totaling $399,784. There were six traffic related projects in progress at the end of the year. The six projects equaling $933,792 include a traffic management system, three median projects, closed circuit televisions, and a traffic signal battery system. Additional information on the City's capital assets can be found in note 6. 11 Long-term debt — At the end of the current fiscal year, the City of Diamond Bar's total long-term debt equaled $12,742,831. Of this amount $242,233 is the City's Net OPEB obligation. At this time the City is using a pay as you go methodology for funding its OPEB. The City's long-term debt includes the net OPEB obligation which is the difference between the amounts paid on the pay as you go basis versus the actuarially computed Annual Required Contribution. The following table shows the breakdown of the long-term debt outstanding: Variable Rate Lease Revenue Bonds (backed by the Public Financing Authority) $ 11,470,000 Unamortized Bond Premium 243,853 CJIPA General Liability Deposit 235,647 Compensated Absences 551,098 Net OPEB Obligation 242,233 $ 12,742,831 See footnote 7 for additional information on the City's long-term liabilities as of June 30, 2012. Economic Factors and Next Year's Budgets and Rates While the City maintains a diverse and upscale housing stock, the City's economy is equally dependent on commercial and retail revenues. The City's concentration on maintaining and attracting new business clientele is of utmost importance. The City's 2012-2013 budget is a fiscally conservative budget. The stagnant economy and unstable condition of the State's budget continue to be of some concern. As a result anticipated revenues in the General Fund reflect only modest growth. The ongoing operations budget has been maintained at the status quo as much as possible. This budget presents an operating plan that permits the City to live within a reasonable estimate of revenues while continuing to provide community programs and services to the residents of the City of Diamond Bar. The City has made a conscientious decision to use some general fund balance reserves for economic development purposes. As a result, the FY 12-13 budget includes an appropriation for economic development. It is anticipated that these efforts will continue to be rewarded in the near future with the development of several new retail spaces. 12 Contacting the City's Financial Management This financial report is designed to provide our citizens, taxpayers, customers, and creditors with a general overview of the City of Diamond Bar'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 City's Finance Department, at the City of Diamond Bar, 21810 Copley Drive, Diamond Bar, California 91765. 13 THIS PAGE INTENTIONALLY LEFT BLANK 14 CITY OF DIAMOND BAR STATEMENT OF NET ASSETS JUNE 30, 2012 Assets: Cash and investments Receivables: Accounts Notes and loans Accrued interest Prepaid costs Due from other governments Deferred charges Restricted assets: Cash with fiscal agent Due from employees Capital assets not being depreciated Capital assets, net of depreciation Total Assets Liabilities: Accounts payable Accrued liabilities Accrued interest Unearned revenue Deposits payable Due to other governments Retentions payable Noncurrent liabilities: Due within one year Due in more than one year Total Liabilities Net Assets: Invested in capital assets, net of related debt Restricted for: Community development projects Public safety Public works Capital projects Debt service Unrestricted Total Net Assets See Notes to Financial Statements 15 Governmental Activities 23,254,654 457,541 334,190 35,635 28,114 3,792,114 139,773 15,002 4,046 273,535,028 120.839.135 422,435,232 2,078,650 307,499 39,542 100,967 939,378 334,190 31,629 742,288 12,000,543 16,574,686 382,660,310 958,293 285,508 3,504,339 163,603 2 18.288.491 $ 405,860,546 CITY OF DIAMOND BAR STATEMENT OF ACTIVITIES YEAR ENDED JUNE 30, 2012 Net (Expenses) Revenues and Changes in Net Program Revenues Assets See Notes to Financial Statements 16 Operating Capital Charges for Contributions Contributions Governmental Expenses Services and Grants and Grants Activities Functions/Programs Primary Government: Governmental Activities: General government $ 6,384,072 $ 247,248 $ 1,847 $ - $ (6,134,977) Public safety 6,104,982 1,050,851 217,432 - (4,836,699) Community development 2,126,906 447,951 860,784 - (818,171) Parks, recreation and culture 5,559,427 1,753,585 303,720 71,228 (3,430,894) Highways and Streets 11,248,137 2,555,900 3,609,073 1,171,408 (3,911,756) Interest on long-term debt 848,976 - - - (848,976) Total Governmental Activities 32,272,500 6,055,535 4,992,856 1,242,636 (19,981,473) Total Primary Government $32,272,500 $ 6,055,535 $ 4,992,856 $ 1,242,636 (19,981,473) General Revenues: Taxes: Property taxes, levied for general purpose 3,951,722 Transient occupancy taxes 692,162 Sales taxes 3,397,259 Franchise taxes 1,415,924 Other taxes 202,951 Motor vehicle in lieu - unrestricted 4,646,985 Use of money and property 145,408 Other 46,342 Total General Revenues 14,498,753 Change in Net Assets (5,482,720) Net Assets at Beginning of Year 410,783,597 Restatement of Net Assets 559,669 Net Assets at End of Year $ 405,860,546 See Notes to Financial Statements 16 GOVERNMENTALFUNDS GENERALFUND The General Fund has been classified as a major fund and is used to account for resources traditionally associated with government, which are not legally or by sound financial management to be accounted for in another fund. CAPITAL PROJECT FUND The Capital Improvement Fund has been classified as a major fund and is used to account for receipts and expenditures of money for construction of various projects. DEBT SERVICE FUND The Public Financing Authority has been classified as a major fund and is used to account for debt issued to finance public improvements and other capital purchases for the City. 17 CITY OF DIAMOND BAR BALANCE SHEET GOVERNMENTAL FUNDS JUNE 30, 2012 Capital Debt Service Notes and loans - - Projects Fund Fund Prepaid costs 28,114 - Capital Public Other Total Improvement Financing Governmental Governmental General Fund Authority Funds Funds Assets: - - 334,190 334,190 Pooled cash and investments $ 16,416,479 $ - $ - $ 5,203,024 $ 21,619,503 Receivables Accounts 388,816 - Notes and loans - - Accrued interest 35,635 - Prepaid costs 28,114 - Due from other governments 2,975,272 357,197 Due from other funds 264,230 - Due from employees 4,046 - Restricted assets: 100,967 Cash and investments with fiscal agents 15,000 - Total Assets $ 20,127,592 $ 357,197 $ Liabilities and Fund Balances: Liabilities: Accounts payable Accrued liabilities Deferred revenues Unearned revenues Deposits payable Due to other governments Due to other funds Retentions payable Total Liabilities Fund Balances: Nonspendable: Prepaid costs Restricted for: Community development projects Public safety Highways and streets Capital Projects Debt service Committed to: - 50,748 439,564 334,190 334,190 - - 35,635 - 28,114 - 459,645 3,792,114 - 264,230 - - 4,046 2 - 15,002 2 $ 6,047,607 $ 26,532,398 $ 1,378,679 $ 128,615 $ - $ 461,824 $ 1,969,118 293,132 - - 14,367 307,499 354,799 357,197 - 150,000 861,996 - - - 100,967 100,967 939,378 - - - 939,378 - - - 334,190 334,190 - 194,070 - 70,160 264,230 17,290 9,722 - 4,617 31,629 2,983,278 689,604 - 1,136,125 4,809,007 28,114 - - - 28,114 - - - 958,293 958,293 - - - 285,508 285,508 - - - 3,504,339 3,504,339 - - - 164,867 164,867 - - 2 - 2 Emergency contingencies 4,500,000 - - - 4,500,000 Unassigned 12,616,200 (332,407) - (1,525) 12,282,268 Total Fund Balances 17,144,314 (332,407) 2 4,911,482 21,723,391 Total Liabilities and Fund Balances $ 20,127,592 $ 357,197 $ 2 $ 6,047,607 $ 26,532,398 See Notes to Financial Statements 18 CITY OF DIAMOND BAR RECONCILIATION OF THE BALANCE SHEET OF GOVERNMENTAL FUNDS TO THE STATEMENT OF NET ASSETS JUNE 30, 2012 Fund balances of governmental funds $ 21,723,391 Amounts reported for governmental activities in the statement of net assets are different because: Capital assets net of depreciation have not been included as financial resources in governmental fund activity 393,977,743 Bond issuance cost is an expenditure in the governmental funds, but it is a deferred charge in the statement of net assets 139,773 Long-term debt and compensated absences that have not been included in the governmental fund activity: Bonds payable $ (11,470,000) Bond premium (243,853) CJPIA General Liability Cumulative Deposit Payable (235,647) Compensated absences (551,098) Other post employment benefit obligation (242,233) (12,742,831) Accrued interest payable for the current portion of interest due on Bonds has not been reported in the governmental funds (39,542) Revenues reported as deferred revenue in the governmental funds and recognized in the Statement of Activities. These are included in the intergovernmental revenues in the governmental fund activity. 861,996 Internal service funds are used by management to charge the costs of certain activities, such as equipment management and self-insurance, 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 Notes to Financial Statements 19 1,940,016 $ 405,860,546 CITY OF DIAMOND BAR STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES GOVERNMENTAL FUNDS YEAR ENDED JUNE 30, 2012 Revenues: Taxes Licenses and permits Intergovernmental Charges for services Use of money and property Fines and forfeitures Miscellaneous Total Revenues Expenditures: Current: General government Public safety Community development Parks, recreation, and culture Highways and streets Capital outlay Debt service: Principal retirement Interest and fiscal charges Total Expenditures Excess (Deficiency) of Revenues Over (Under) Expenditures Other Financing Sources (Uses): Transfers in Transfers out Refinancing bonds issued Bond premium Total Other Financing Sources (Uses) Net Change in Fund Balances Fund Balances, Beginning of Year, as previously reported - - 12,510,000 - 12,510,000 406,626 - 406,626 22,239,717 4,163,704 12,916,626 4,329,861 43,649,908 (4,311,858) (4,076,704) (12,916,606) 3,986,147 (17,319,021) 1,508,188 3,781,358 540,533 255,258 6,085,337 (1,320,431) - - (5,174,018) (6,494,449) - - 11,790,000 - 11,790,000 - 252,381 - 252,381 187,757 3,781,358 12,582,914 (4,918,760) 11,633,269 (4,124,101) (295,346) (333,692) (932,613) (5,685,752) 21,268,415 (37,061) 333,694 5,553,814 27,118,862 Restatements - - - 290,281 290,281 Fund Balances, Beginning of Year, as restated 21,268,415 (37,061) 333,694 5,844,095 27,409,143 Fund Balances, End of Year $17,144,314 $ (332,407) $ 2 $ 4,911,482 $ 21,723,391 See Notes to Financial Statements 20 Capital Debt Service Projects Fund Fund Capital Public Other Total Improvement Financing Governmental Governmental General Fund Authority Funds Funds $ 9,664,801 $ - $ - $ 547,209 $ 10,212,010 1,045,474 - - 82,095 1,127,569 4,770,165 87,000 - 6,196,161 11,053,326 1,753,585 - - 1,437,090 3,190,675 130,034 - 20 53,453 183,507 509,166 - - - 509,166 54,634 - - - 54,634 17,927,859 87,000 20 8,316,008 26,330,887 5,076,001 - - 409,000 5,485,001 5,651,511 - - 80,084 5,731,595 1,551,038 - - 563,395 2,114,433 4,013,381 - - 77,170 4,090,551 2,411,682 1,350,088 - 2,847,317 6,609,087 3,536,104 2,813,616 - 352,895 6,702,615 - - 12,510,000 - 12,510,000 406,626 - 406,626 22,239,717 4,163,704 12,916,626 4,329,861 43,649,908 (4,311,858) (4,076,704) (12,916,606) 3,986,147 (17,319,021) 1,508,188 3,781,358 540,533 255,258 6,085,337 (1,320,431) - - (5,174,018) (6,494,449) - - 11,790,000 - 11,790,000 - 252,381 - 252,381 187,757 3,781,358 12,582,914 (4,918,760) 11,633,269 (4,124,101) (295,346) (333,692) (932,613) (5,685,752) 21,268,415 (37,061) 333,694 5,553,814 27,118,862 Restatements - - - 290,281 290,281 Fund Balances, Beginning of Year, as restated 21,268,415 (37,061) 333,694 5,844,095 27,409,143 Fund Balances, End of Year $17,144,314 $ (332,407) $ 2 $ 4,911,482 $ 21,723,391 See Notes to Financial Statements 20 CITY OF DIAMOND BAR RECONCILIATION OF THE STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES OF GOVERNMENTAL FUNDS TO THE STATEMENT OF ACTIVITIES YEAR ENDED JUNE 30, 2012 Net change in fund balances - total governmental funds $ (5,685,752) Amounts reported for governmental activities in the statement of activities are different because: Governmental funds report capital outlays as expenditures. However, in the statement of activities, the costs 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 expenditures $ 6,746,007 Depreciation expense (6,629,639) 116,368 Repayment of bond principal is an expenditure in the governmental funds, but the repayment reduces long-term liabilities in the statement of net assets Principal payment 320,000 Refinancing bonds issued (11,790,000) Bonds refinanced 12,190,000 Premium on bonds issued (252,381) Refinanced bond discount removal (100,869) Amortization of bond premium 8,528 CJPIA General Liability Cumulative Deposit Payable (235,647) Other post employment benefit obligation (67,262) Compensated absences (27,038) 45,331 Debt issuance costs are expenditures in governmental funds, but these costs are capitalized on the statement of net assets Debt issuance costs on bonds issued 143,828 Debt issuance costs on refinanced bonds (463,282) Amortization on debt issuance costs (4,055) (323,509) Accrued interest for long-term liabilities. This is the net change in accrued interest for the current period. (26,500) Revenues reported as deferred revenue in the governmental funds and recognized in the Statement of Activities. These are included in the intergovernmental revenues in the governmental fund activity. 447,150 Internal service funds are used by management to charge the costs of certain activities, such as equipment management and self-insurance, to individual funds. The net revenues (expenses) of the internal service funds is reported with governmental activities (55,808 Change in net assets of governmental activities See Notes to Financial Statements 21 $ (5,482,720) CITY OF DIAMOND BAR BUDGETARY COMPARISON STATEMENT GENERALFUND YEAR ENDED JUNE 30, 2012 Budgetary Fund Balance, July 1 Resources (Inflows): Taxes Licenses and permits Intergovernmental Charges for services Use of money and property Fines and forfeitures Miscellaneous Transfers in Amounts Available for Appropriation Charges to Appropriation (Outflow): General government City Council City Attorney City Manager/Clerk Finance Human resources Information systems General government Public information Civic Center Subtotal general government Public safety Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) $ 21,268,415 $ 21,268,415 $ 21,268,415 $ - 9,348,820 873,700 4,745,280 1,756,007 290,000 495,800 18,000 1,485,275 40,281,297 176,962 265,000 1,112,675 413,097 189,346 740,208 1,160,066 516,514 304,831 4,878,699 9,404,940 982,049 5,008,775 1,756,007 182,000 504,000 90,205 1,482,377 40,678,768 181,950 335,000 1,211,569 363,036 221,491 781,351 618,001 545,048 944,873 5,202,319 9,664,801 1,045,474 4,770,165 1,753,585 130,034 509,166 54,634 1,508,188 40,704,462 163,118 268,344 1,247,755 429,876 191,360 767,405 660,595 549,807 797,741 5,076,001 259,861 63,425 (238,610) (2,422) (51,966) 5,166 (35,571) 25,811 25,694 18,832 66,656 (36,186) (66,840) 30,131 13,946 (42,594) (4,759) 147,132 126,318 Law Enforcement 5,713,189 5,448,216 5,445,071 3,145 Fire Protection 7,500 7,500 14,718 (7,218) Animal Control 134,645 141,645 136,995 4,650 Emergency preparedness 64,040 64,040 54,727 9,313 Subtotal public safety 5,919,374 5,661,401 5,651,511 9,890 Community development 1,505,008 1,708,470 1,551,038 157,432 Parks, recreation, and culture 3,805,428 4,017,446 4,013,381 4,065 Highways and streets 2,448,626 2,636,491 2,411,682 224,809 Capital outlay 3,734,912 4,067,316 3,536,104 531,212 Transfers out 498,729 1,051,055 1,320,431 (269,376) Total Charges to Appropriations 22,790,776 24,344,498 23,560,148 784,350 Budgetary Fund Balance, June 30 $ 17,490,521 $16,334,270 $ 17,144,314 $ 810,044 See Notes to Financial Statements 22 CITY OF DIAMOND BAR STATEMENT OF NET ASSETS PROPRIETARY FUNDS JUNE 30, 2012 Assets: Current: Cash and investments Receivables: Accounts Total Current Assets Noncurrent: Capital assets - net of accumulated depreciation Total Noncurrent Assets Total Assets Liabilities and Net Assets: Liabilities: Current: Accounts payable Total Current Liabilities Total Liabilities Net Assets: Invested in capital assets, net of related debt Unrestricted Total Net Assets Total Liabilities and Net Assets See Notes to Financial Statements 23 Governmental Activities - Internal Service Funds $ 1,635,151 17.977 1.653.128 396,420 396,420 $ 2,049,548 $ 109,532 109,532 109,532 396,420 1,543,596 1,940,016 $ 2,049,548 AN Was] a I_1 �Td*7► I1Ol:%1 N STATEMENT OF REVENUES, EXPENSES AND CHANGES IN FUND NET ASSETS PROPRIETARY FUNDS YEAR ENDED JUNE 30, 2012 Operating Revenues: Miscellaneous Total Operating Revenues Operating Expenses: Insurance premiums Depreciation expense Total Operating Expenses Operating Income (Loss) Nonoperating Revenues (Expenses): Interest revenue Total Nonoperating Revenues(Expenses) Income (Loss) Before Transfers Transfers in Changes in Net Assets Net Assets: Beginning of Year, as previously reported Restatements Beginning of Fiscal Year, as restated End of Fiscal Year See Notes to Financial Statements 24 Governmental Activities - Internal Service Funds $ 17,977 17,977 444,517 50,123 494,640 (476,663) 11,743 11,743 (464,920) 409,112 (55,808) 1,726,436 269,388 1,995,824 $ 1,940,016 CITY OF DIAMOND BAR STATEMENT OF CASH FLOWS PROPRIETARY FUNDS YEAR ENDED JUNE 30, 2012 Net Cash Provided (Used) by Operating Activities (333,612) Cash Flows from Non -Capital Financing Activities: Cash transfers in 409,112 Net Cash Provided (Used) by Non -Capital Financing Activities 409,112 Cash Flows from Investing Activities: Interest received 11,743 Net Cash Provided (Used) by Investing Activities 11,743 Net Increase (Decrease) in Cash and Cash Equivalents (246,473) Cash and Cash Equivalents at Beginning of Year 1,881,624 Cash and Cash Equivalents at End of Year Reconciliation of Operating Income to Net Cash Provided (Used) by Operating Activities: Operating income (loss) Adjustments to reconcile operating income (loss) net cash provided (used) by operating activities: Depreciation (Increase) decrease in accounts receivable (Increase) decrease in prepaid expense Increase (decrease) in accounts payable Total Adjustments Net Cash Provided (Used) by Operating Activities See Notes to Financial Statements 25 $ 1,635,151 $ (476,663) 50,123 (17,977) 1,373 109,532 143,051 $ (333,612) Governmental Activities - Internal Service Funds Cash Flows from Operating Activities: Cash received from customers and users $ (443,144) Cash paid to suppliers for goods and services 109,532 Net Cash Provided (Used) by Operating Activities (333,612) Cash Flows from Non -Capital Financing Activities: Cash transfers in 409,112 Net Cash Provided (Used) by Non -Capital Financing Activities 409,112 Cash Flows from Investing Activities: Interest received 11,743 Net Cash Provided (Used) by Investing Activities 11,743 Net Increase (Decrease) in Cash and Cash Equivalents (246,473) Cash and Cash Equivalents at Beginning of Year 1,881,624 Cash and Cash Equivalents at End of Year Reconciliation of Operating Income to Net Cash Provided (Used) by Operating Activities: Operating income (loss) Adjustments to reconcile operating income (loss) net cash provided (used) by operating activities: Depreciation (Increase) decrease in accounts receivable (Increase) decrease in prepaid expense Increase (decrease) in accounts payable Total Adjustments Net Cash Provided (Used) by Operating Activities See Notes to Financial Statements 25 $ 1,635,151 $ (476,663) 50,123 (17,977) 1,373 109,532 143,051 $ (333,612) THIS PAGE INTENTIONALLY LEFT BLANK 26 CITY OF DIAMOND BAR NOTES TO BASIC FINANCIAL STATEMENTS JUNE 30, 2012 Note 1: Reporting Entity and Significant Accounting Policies a. Description of Reporting Entity The City of Diamond Bar (the City) was incorporated April 18, 1989, as a "General Law' City governed by an elected five -member city council. As required by accounting principles generally accepted in the United States of America, these financial statements present the City of Diamond Bar (the primary government) and its component units. The component units discussed below are included in the City's reporting entity because of the significance of their operational or financial relationship with the City. These entities are legally separate from each other. However, the City of Diamond Bar's elected officials have a continuing full or partial accountability for fiscal matters of the other entities. The financial reporting entity consists of: (1) the City (2) organizations for which the City is financially accountable; and, (3) organizations for which the nature and significance of their relationship with the City are such that exclusion would cause the City's financial statements to be misleading or incomplete. An organization is fiscally dependent on the primary government if it is unable to adopt its budget, levy taxes or set rates or charges, or issue bonded debt without approval by the primary government. In a blended presentation, a component unit's balances and transactions are reported in a manner similar to the balances and transactions of the City. Component units are presented on a blended basis when the component unit's governing body is substantially the same as the City's or the component unit provides services almost entirely to the City. Blended Component Units The Diamond Bar Community Redevelopment Agency (the Agency) was established February 6, 1996, pursuant to the State of California Health and Safety Code, Section 33000, entitled "Community Redevelopment Law". Although it is a legally separate entity from the City, the Agency is reported as if it were part of the City because of its purpose to prepare and execute plans for improvement, rehabilitation and redevelopment of blighted areas within the territorial limits of the City. According to the California Supreme Court's decision on August 9, 2000, the Agency's Redevelopment Plan was deemed invalid. No activities occurred during the year ended June 30, 2012. Accordingly, no financial statements of the Agency were issued. On July 18, 2011, the California Redevelopment Association ("CRA") and the League of California Cities ("League") filed a petition for writ of mandate with the California Supreme Court, requesting the Court to declare unconstitutional two bills that were passed as part of the 2011-12 State Budget, AB 1X 26 and 27 (California Redevelopment Association v. Matosantos). AB 1X 26 dissolves redevelopment agencies effective October 1, 2011. AB 1X 27 gave redevelopment agencies an option to avoid dissolution if it commits to making defined payments for the benefit of the State, school districts and certain special districts. In 2011-12, these payments amounted to a state-wide total of $1.7 billion. In 2012-13 and subsequent years, the payments totaled $400 million, annually. Each city or county's share of these payments was determined based on its proportionate share of state-wide tax increment. On August 17, 2011 the Supreme Court issued a stay of the implementation of AB 1X 26 and 27 which allowed a redevelopment agency to continue if it adopted an AB 1X 27 ordinance. However, because of the effect of the stay order, the authority for the Redevelopment Agency to engage in most activities was suspended. 27 CITY OF DIAMOND BAR NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2012 Note 1: Reporting Entity and Significant Accounting Policies (Continued) The Supreme Court heard oral arguments on November 10, 2011 and on December 29, 2011 announced its decision in California Redevelopment Association v. Matosantos. The court upheld AB 1X 26 which dissolves redevelopment agencies, but invalidated in its entirety AB 1X 27 which allowed redevelopment agencies to continue as long as they made the required payments. AB X1 26 established deadlines for the process of Redevelopment Agency dissolution and the handling of existing obligations. The full text of AB 1X 26 may be obtained from the California legislative information website maintained by the legislative Counsel of the State of California at: http://www.leginfo.ca.gov/bilinfo.htm1. As of January 31, 2012 the Redevelopment Agency has been dissolved. Certain of the Redevelopment Agency's rights and obligations were transferred to the City acting as the successor agency to the Redevelopment Agency on that date. The Diamond Bar Public Financing Authority (the Authority) was formed on November 19, 2002. The purpose of the Authority is to issue debt to finance public improvements and other capital purchases for the City and Agency. The activity of the Authority is reported in debt service and capital projects funds. b. Government -Wide and Fund Financial Statements The government -wide financial statements (i.e., the statement of net assets and the statement of changes in net assets) report information on all of the nonfiduciary activities of the City. For the most part, the effect of interfund activity has been removed from these statements. Governmental activities, which normally are supported by taxes and intergovernmental revenues, are reported separately from business -type activities, which rely to a significant extent on fees and charges for support. The City has no business - type activities. The statement of activities demonstrates the degree to which the direct expenses of a given function or segment are offset by program revenues. Direct expenses are those that are clearly identifiable with a specific function or segment. 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 or segment and 2) grants and contributions that are restricted to meeting the operational or capital requirements of a particular function or segment. Taxes and other items not properly included among program revenues are reported instead as general revenues. Separate financial statements are provided for governmental funds and proprietary funds. Major individual governmental funds are reported as separate columns in the, fund financial statements. c. Measurement Focus, Basis of Accounting, and Financial Statement Presentation The basic financial statements of the City are composed of the following: • Government -wide financial statements • Fund financial statements • Notes to basic financial statements 28 CITY OF DIAMOND BAR NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2012 Note 1: Reporting Entity and Significant Accounting Policies (Continued) The government -wide financial statements and proprietary fund financial statements are reported using the economic resources measurement focus and the accrual basis of accounting. Under the economic resources measurement focus, all assets and liabilities (current and long-term) are reported. Under the accrual basis of accounting, revenues are recorded when earned and expenses are recorded when a liability is incurred, regardless of the timing of related cash flows. Property taxes are recognized as revenues in the fiscal year, which the taxes are levied. Revenue from grants, entitlements, and donations is recognized in the fiscal year in which all the eligibility requirements imposed by the provider have been met. Proprietary funds distinguish operating revenues and expenses from nonoperating items. Operating revenues and expenses generally result from providing services and producing and delivering goods in connection with a proprietary fund's principal ongoing operations. The principal operating revenues of the City's internal service funds are charges to departments for services. Operating expenses for the proprietary funds include the cost of services, administrative expenses, and depreciation on capital assets. All revenues and expenses not meeting this definition are reported as nonoperating revenues and expenses. Governmental fund financial statements are reported using the current financial resources measurement focus and the modified accrual basis of accounting. Under the current financial resources measurement focus, generally only current assets and liabilities are reported in the governmental funds. Governmental fund operating statements present increases (revenues and other financing sources) and decreases (expenditures and other financing uses) in net current assets. Under the modified accrual basis of accounting, revenues are recognized as soon as they are both measurable and available. Revenues are considered to be available when they are collectible within the current period or soon enough thereafter to pay liabilities of the current period. For this purpose, the government considers revenues to be available if they are collected within 60 days of the end of the current fiscal. Expenditures generally are recorded when a liability is incurred, except for principal and interest on long-term liabilities, claims and judgments, and compensated absences which are recognized as expenditures only when payment is due. Property taxes, taxpayer -assessed taxes, such as sales taxes, gas taxes, and transient occupancy taxes, and interest associated with the current fiscal period are all considered to be susceptible to accrual and have been recognized as revenues of the current fiscal period. Only the portion of special assessments receivable due within the current fiscal period is considered to be susceptible to accrual as revenue of the current period to the extent normally collected within the availability period. All other revenue items are considered to be measurable and available only when cash is received by the City. The accounts of the City are organized and operated on the basis of funds, each of which is considered a separate accounting entity with a self -balancing set of accounts, established for the purpose of carrying on specific activities or attaining certain objectives in accordance with special regulations, restrictions or limitations. 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. 29 CITY OF DIAMOND BAR NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2012 Note 1: Reporting Entity and Significant Accounting Policies (Continued) d. Fund Classifications The City reports the following major governmental funds The General Fund is the primary operating fund of the City and is used to account for all revenues and expenditures of the City not legally restricted as to use. A broad range of municipal activities are provided through this fund including City Manager, City Attorney, Finance, City Clerk, Public Works, Building and Safety, and Parks and Recreation. The Capital Improvement Fund has been classified as a major fund and is used to account for receipts and expenditures of money for construction of various projects. The Public Financing Authority has been classified as a major fund and is used to account for debt issued to finance public improvements and other capital purchases for the City. The City's fund structure also includes the following fund types Proprietary Funds Internal Service Funds have been established to finance and account for goods and services provided by one City department to other City departments or agencies. These activities include self-insurance, equipment and computer maintenance. e. Investments For financial reporting purposes, investments are stated at fair value. 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 balances. f. Cash and Cash Equivalents For purposes of the statement of cash flows, cash and 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 (an original maturity date of three months or less from the date of purchase) that they present insignificant risk of changes in value because of changes in interest rates. Cash and cash equivalents also represent the proprietary funds' share in the cash and investment pool of the City. All cash and investments of the proprietary (internal service) funds are pooled with the City's pooled cash and investments and are therefore considered cash equivalents for purposes of the statement of cash flows. 30 CITY OF DIAMOND BAR NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2012 Note 1: Reporting Entity and Significant Accounting Policies (Continued) g. Capital Assets Capital assets (including infrastructure) are recorded at cost where historical records are available and at an estimated original cost where no historical records exist. Contributed capital assets are valued at their estimated fair market value at the date of contribution. Capital asset purchases (other than infrastructure) in excess of $5,000 are capitalized if they have an expected useful life of three years or more. Capital assets include additions to public domain (infrastructure), certain improvements including roads, streets, sidewalks, medians and storm drains within the City. In the fiscal year ended June 30, 2012, the City, with the assistance of an outside consultant, valued and recorded its public domain assets acquired prior to July 1, 2002. The City now has all of its infrastructure asset data valued and recorded in its entirety as of June 30, 2012. Capital assets used in operations are depreciated over their estimated useful lives using the straight-line method in the Government -wide and Proprietary Fund Financial Statements. Depreciation is charged as an expense against operations and accumulated depreciation is reported on the respective balance sheet. The lives used for depreciation purposes of each capital asset class are: Buildings and improvements 10 - 20 years Furniture and fixtures 3 - 5 years Vehicles and equipment 5 years Infrastructure 10 - 50 years h. Compensated Absences Vacation and sick leave time begin to accumulate as of the first day of employment to a maximum of 360 hours and 280 hours, respectively. Employees who accumulate sick leave in excess of 200 hours are paid for the excess annually at one half the employees current wage rate. 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. A liability is recorded for unused sick leave balances only to the extent that it's 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 payments, as well as those who are expected to become eligible to receive termination benefits as a result of continuing their employment with the City. If an employee retires, resigns, or terminates in good standing with a minimum of five years of service, the employee is entitled to receive 100% of unused sick leave at one half the employees current wage rate. Deferred Charges Deferred charges represent capitalized costs incurred in connection with the issuance of long-term debt. These costs are amortized over the life of the debt on a straight-line basis. 31 CITY OF DIAMOND BAR NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2012 Note 1: Reporting Entity and Significant Accounting Policies (Continued) 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 accrues only those taxes which are received from the County within 60 days after year end. Property taxes are assessed and collected each fiscal year according to the following property tax calendar: Lien date Levy date Due dates Collection dates Delinquent dates k. Use of Estimates January 1 July 1 November 1 - 1st installment February 1 - 2nd installment December 10 - 1st installment April 10 - 2nd installment December 11 - 1st installment April 11 - 2nd installment 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 during the reporting period. Actual results could differ from those estimates. I. Fund Equity In the fund financial statements, government funds report the following fund balance classification: • Nonspendable include 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 include amounts that are constrained on the use of resources by either (a) external creditors, grantors, contributors, or laws of regulations of other governments or (b) by law through constitutional provisions or enabling legislation. • Committed include amounts that can only be used for specific purposes pursuant to constraints imposed by formal action of the government's highest authority, City Council. The formal action that is required to be taken to establish, modify, or rescind a fund balance commitment is a resolution. • Assigned include amounts that are constrained by the government's intent to be used for specific purposes, but are neither restricted nor committed. The Director of Finance is authorized to assign amounts to a specific purpose, which was established by the governing body in resolution. 32 CITY OF DIAMOND BAR NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2012 Note 1: Reporting Entity and Significant Accounting Policies (Continued) • Unassigned include the residual amounts that have not been restricted, committed, or assigned to specific purposes. An individual governmental fund could include nonspendable resources and amounts that are restricted or unrestricted (committed, assigned, or unassigned) or any combination of those classifications. Restricted amounts are to be considered spent when an expenditure is incurred for purposes for which both restricted and unrestricted fund balance is available and committed, assigned, then unassigned amounts are considered to have been spent when an expenditure is incurred for purposes for which amounts in any of those unrestricted fund balance classifications can be used. Note 2: Stewardship, Compliance and Accountability a. Budgetary Data General Budget Policies The City adopts an annual budget prepared on the modified accrual basis of accounting for its governmental funds and on the accrual basis of accounting for its proprietary funds. The City manager or his designee is authorized to transfer budgeted amounts between the accounts of any department or funds that are approved by City Council. Prior year appropriations lapse unless they are approved for carryover into the following fiscal year. Expenditures may not legally exceed appropriations at the department level. Transportation Grant Fund is not presented in the budgetary comparison schedule. Budget Basis of Accounting Budgets for governmental funds are adopted on a basis consistent with generally accepted accounting principles (GAAP). b. At June 30, 2012, the following funds had deficit fund balances: Other Governmental Funds: Capital Improvement Fund $ 332,407 Justice Assistance Grant 1,264 EECBG Grant Fund 261 c. Excess of expenditures over appropriations are as follows: Expenditures for the year ended June 30, 2012, exceeded the appropriations of the General Fund as follows: 33 Budget Actual Variance General Fund: General Government City Manager $ 1,211,569 $ 1,247,755 $ (36,186) Finance 363,036 429,876 (66,840) General government 618,001 660,595 (42,594) Public information 545,048 549,807 (4,759) Public Safety Fire Protection 7,500 14,718 (7,218) Transfers Out 1,051,055 1,320,431 (269,376) 33 CITY OF DIAMOND BAR NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2012 Note 3: Cash and Investments Cash and Investments Cash and investments at June 30, 2012, consisted of the following: Statement of Net Assets: Cash and investments $ 23,254,654 Cash and investments with fiscal agents 15,002 $ 23,269,656 Cash and investments held by the City at June 30, 2012, consisted of the following: Imprest cash on hand $ 1,500 Demand deposits 1,376,079 Escrow deposits 15,000 Investments: United States Government Sponsored Enterprise Securities 11,953,736 Local Agency Investment Fund 9,923,339 Held by Bond Trustee: Money Market Mutual Funds 2 $ 23,269,656 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 (or the City's investment policy, where more restrictive). The table also identifies certain provisions of the California Government Code (or the City's investment policy, where more restrictive) that address' interest rate risk, credit risk, and concentration of credit risk. This table does not address investments of debt proceeds held by bond trustee 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. 34 CITY OF DIAMOND BAR NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2012 Note 3: Cash and Investments (Continued) Maximum Maximum Percentage of Investment in Portfolio One Issuer None None 40% Maximum Authorized Investment Type Maturity United States Treasury Obligations 5 years United States Government Sponsored Enterprise 10% Securities 5 years Banker's Acceptance 180 days Time Certificates of Deposits 5 years Commercial Paper 270 days Negotiable Certificates of Deposit 5 years Money Market Mutual Funds 5 years Repurchase Agreements 1 year Medium -Term Corporate Notes (1) 5 year Local Agency Investment Fund (LAIF) N/A Maximum Maximum Percentage of Investment in Portfolio One Issuer None None 40% None 40% 30% None None 25% 10% 30% None 15% None None None 30% None None $ 40,000,000 *-Excluding amounts held in bond trustees that are not subject to California Government Code Restrictions (1) Notes must be rated "A" or better N/A - Not Applicable Investments Authorized by Debt Agreements Investments of debt proceeds held by bond trustee 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 trustee. The table also identifies certain provisions of these debt agreements that address interest rate risk, credit risk, and concentration of credit risk. Authorized Investment Tvge United States Treasury Obligations United States Government Sponsored Enterprise Securities Banker's Acceptance Time Certificate of Deposits Local Agency Investment Fund Money Market Funds Repurchase Obligations Tax Exempt Taxable Government Money Market Portfolios 35 Maximum Maximum Percentage Maturity of Portfolio None None None 1 year None None None 30 days None 10% None None None None None Equal to six months of principal and interest in the bonds Maximum Investment in n-- 1 -- None None None None None None None None CITY OF DIAMOND BAR NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2012 Note 3: Cash and Investments (Continued) Disclosures Relating to Interest Rate Risk Interest rate risk is the risk that changes in market interest rates will adversely affect the fair value of an investment. Generally, the longer the maturity of an investment, the greater the sensitivity of its fair value to changes in market interest rates. One of the ways that the City manages its exposure to interest rate risk is by purchasing a combination of shorter term and longer term investments and by timing cash flows from maturities so that a portion of the portfolio is maturing or coming close to maturity evenly over time as necessary to provide the cash flow and liquidity needed for operations. Information about the sensitivity of the fair values of the City's investments (including investments held by bond trustee) to market interest rate fluctuations is provided by the following table that shows the distribution of the City's investments by maturity: Remaining Maturity (in Months) 12 Months or Investment Type Less 1 - 3 years 3 - 5 years Total US Government Sponsored Securities $ Certificate of Deposits General Electric Cap Corp Bond GE Capital Senior Note Local Agency Investment Fund (LAIF) Held by Bond Trustees: Money Market Mutual Funds Disclosures Relating to Credit Risk - $ - $ 5,007,091 $ 5,007,091 248,802 2,243,696 2,478,008 4,970,506 983,146 - 983,146 992,993 992,993 9,923,339 - 9,923,339 9 - 2 S 10.172.143 R 3226 842 S 8.478.092 � 21.877.077 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 reported by Moody's, as of year end for each investment type: Total as of June Investment Type 30,2012 Al Aaa Unrated US Government Sponsored Securities $ 5,007,091 $ - $ 5,007,091 $ - Certificate of Deposits 4,970,506 - 11,953,736 - General Electric Cap Corp Bond 983146 983,146 GE Capital Senior Note 992,993 992,993 Local Agency Investment Fund (LAIF) 9,923,339 - - 9,923,339 Held by Bond Trustees: Money Market Mutual Funds 2 - 2 - Total $ 21,877,077 $ 1,976,139 $ 16,960,829 $ 9,923,339 36 CITY OF DIAMOND BAR NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2012 Note 3: Cash and Investments (Continued) Disclosures Relatina to 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 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. The City does not accept 150% of the secured public totals. At June 30, 2012, the City deposits (bank balances) were insured by the Federal Depository Insurance Corporation up to $250,000 and the remaining balances were collateralized under California Law. The cash and investments held by Bond Trustee are uninsured and uncollateralized. A provision of the Dodd -Frank Wall Street Reform and Consumer Protection Act provides temporary unlimited deposit insurance coverage for noninterest -bearing transaction account at all FDIC -insured institutions. This provision was effective from December 31, 2010 and will remain effective until December 31, 2012. Noninterest -bearing transaction accounts is defined as an account (1) with respect to which interest is neither accrued nor paid; (2) on which the depositor or account holder is permitted to make withdrawals by negotiable or transferable instrument, payment orders of withdrawal, telephone or other electronic media transfers, or other similar items for the purpose of making payments or transfers to third parties or others; and (3) on which the FDIC -insured depository institutions does not reserve the right to require advance notice of an intended withdrawal. As of June 30, 2012, the City maintains cash deposits that are temporarily covered by this provision. Investment in State Investment Pool The City is a voluntary participant in the Local Agency Investment Fund (LAIF) that is regulated by California Government Code Section 16429 under the oversight of the Treasurer of the State of California. The fair value of the City'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. 37 CITY OF DIAMOND BAR NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2012 Note 4: Interfund Transfers and Due To/From Other Funds Transfers In General Fund Capital Improvement Fund Public Financing Authority Fund Other Governmental Funds Internal Service Funds Transfer Out Amount Other Governmental Funds $ 1,508,188 General Fund 135,528 Other Governmental Funds 3,645,830 General Fund 540,533 General Fund 235,258 Other Governmental Funds 20,000 General Fund 409,112 $ 6,494,449 Transfers to the General Fund from the Other Governmental Funds were made to reimburse the General Fund for various capital projects and administrative expenditures. Transfers from the General Fund to the Other Governmental Funds and Capital Improvement Fund were made to provide for debt service payments capital project and the transfer to the Internal Service funds were made to provide for the annual contribution of the Liability Program of the fiscal year 2011-12. Due from other funds Due to other funds Amount General Fund Capital Improvement Fund $ 194,070 Other Governmental Funds 70,160 $ 264,230 Short-term borrowings were made from the General Fund to the Capital Improvement Fund and Other Governmental Funds due to negative cash. This is expected to be repaid in the immediate future with reimbursements. Note 5: Long -Term Receivable CJPIA Refund Balances Long-term Receivable Retrospective deposits and refunds are cost allocation adjustments to prior coverage periods. Some claims take many years to resolve and over time their estimated value changes. The retrospective adjustments are calculated annually and take into consideration all the changes in claim values that occurred during the most recent year. The formula is designed to adequately cover the cost of claims brought against members and to ensure the overall financial strength and security of the Authority. The formula was developed to be as equitable as possible by taking into consideration both risk exposure and claims experience of individual members. CJPIA has temporarily deferred the payment on retrospective deposits owed to the Authority by members. The payment deferral period extends until July 1, 2013 for the Liability program and July 1, 2015 for the Workers' Compensation program. Retrospective deposit payments are scheduled to resume on these dates. The October 2011 annual retrospective adjustment is included in these balances. The City at June 30, 2012 had a retrospective refund due to the City in the amount of 17,977 which is recorded in the Self - Insurance Internal Service Fund. During the payment deferral period, members with a retrospective refund balance will receive a portion of the balance as a credit against other charges on the annual contribution invoice. For the 2011-12 coverage year, the refund amount will be 25%. The percentage to be refunded in future years will be set on an annual basis by the Executive Committee of CJPIA. Once the payment deferral period has concluded in each program, subsequent retrospective 38 CITY OF DIAMOND BAR NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2012 Note 5: Long -Term Receivable (Continued) refund adjustments will be applied in full (100%) as a credit on the annual contribution invoice. More information on the CJPIA retrospective balances can be found on the CJPIA website at CJPIA.org. Note 6: Capital Assets A summary of changes in the Governmental Activities capital assets at June 30, 2012, is as follows: Capital assets not being depreciated: Land Right of way Construction in progress Total Capital Assets Not being Depreciated Capital assets being depreciated: Buildings and improvements Furniture and fixtures Vehicles and equipment Infrastructure Total Capital Assets being Depreciated Less accumulated depreciation for: Buildings and improvements Furniture and fixtures Vehicles and equipment Infrastructure Total Accumulated Depreciation Total Capital Assets Being Depreciated, Net Governmental Activities Capital Assets, Net Balance at July 1, 2011 Transfers Additions $ 6,587,349 $ - $ - 265,614,104 - - 1,972,457 (1,210,848) 571,966 Balance at Deletions June 30, 2012 $ - $ 6,587,349 265, 614,104 1,333,575 274,173,910 (1,210,848) 571,966 273,535,028 34,999,996 330,728 4,784,537 40,115,261 84,372 - 1,343,739 - 1,428,111 2,422,454 - 379,481 - 2,801,935 187,510,964 880,120 - 188,391,084 225,017,786 1,210,848 6,507,757 - 232,736,391 13,526,658 - 1,825,344 - 15,352,002 77,768 120,679 - 198,447 1,470,086 179,274 - 1,649,360 90,142,982 4,554,465 - 94,697,447 105,217,494 6,679,762 - 111,897,256 119,800,292 1,210,848 (172,005) - 120,839,135 $ 393,974,202 $ - $ 399,961 $ $ 394,374,163 Depreciation expense was charged to functions in the Statement of Activities as follows: General government $ 621,646 Public safety 9,041 Highways and streets 4,617,383 Community development 1,381,569 Internal Service Funds depreciation charges to program 50,123 $ 6,679,762 39 CITY OF DIAMOND BAR NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2012 Note 7: Long -Term Liabilities Long-term liability activity for the year ended June 30, 2012, was as follows: Balance Balance at Due Within July 1, 2011 Additions Deletions June 30, 2012 One Year Bonds payable Revenue Bonds $ 12,190,000 $ 11,790,000 $ 12,510,000 $ 11,470,000 $ 335,000 CJPIA General Liability Cumulative Deposit Payable - 235,647 - 235,647 - Compensated absences 524,060 414,344 387,306 551,098 407,288 Net OPEB obligation (Note 10) 174,971 74,774 7,512 242,233 - Total $ 12,889,031 $ 12,514,765 $ 12,904,818 12,498,978 $ 742,288 Net unamortized bond premium 243,853 Net Long -Term Debt $ 12,742,831 Bonds Payable In December 2002, the Diamond Bar Public Financing Authority issued $13,755,000 of 2002 Series A Variable Rate Lease Revenue Bonds to finance the construction of a community/senior center project and other public improvements within the City. The bonds are special limited obligations of the Authority payable solely from revenues, consisting primarily of base rental payments paid by the City. The variable interest rate on the bonds is reset on a bi-weekly basis. As of June 30, 2012, $12,190,000 in outstanding bonds was refinanced. In conjunction with the Bonds, the Authority executed a rate cap agreement on December 2, 2002, (the Agreement) with JPMorgan Chase (Counterparty) to minimize debt service cost on the 2002 Lease Revenue Bonds (the Bonds) by setting a cap on the interest rate on the Bonds. Under the Agreement, the Counterparty will pay the Authority an amount equal to the product of: (i) the amount by which the floating rate exceeds 4.5%, (ii) the notional principal amount and (iii) the actual number of days in the calculation period divided by 365 days. The Agreement is for a notional amount equal to the outstanding principal amount of the Bonds and will decline as the principal amount declines. The Agreement terminates on January 1, 2013. Credit Risk The Counterparty, JPMorgan Chase, has the following credit ratings of: (i) Standard & Poor's, AA- and (ii) Moody's, Aa2. Refinancing of the 2002 Series A Lease Revenue Bonds (Community/Senior Center Project) The 2002 Series A Lease Revenue Bonds were originally issued on December 19, 2002 in the aggregate principal amount of $13,755,000. Since the date of their initial issuance, the Bonds have borne interest at a Weekly Rate and the regularly scheduled payments of principal of and interest on the Bonds have been payable from the proceeds of draws upon an irrevocable direct -pay letter of credit issued by Union Bank, N.A., formerly known as Union Bank of California, N.A. On December 1, 2011, these Bonds were refinanced and $12,190,000 was defeased. Subsequently, $11,790,000 in Bonds were issued with the interest rate converted from a Weekly Rate to a Fixed Rate. The fixed rates range from 3.00% to 5.00% throughout the life of the bond. 40 CITY OF DIAMOND BAR NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2012 Note 7: Long -Term Liabilities (Continued) Payments and Associated Debt As of June 30, 2012, debt service requirements of the Bonds and the Counterparty's payments, assuming current interest rates remain the same for remainder of the term of the Agreement, are as follows. CJPIA Retrospective Deposit Liabilit Retrospective deposits and refunds are cost allocation adjustments to prior coverage periods. Some claims take many years to resolve and over time their estimated value changes. The retrospective adjustments are calculated annually and take into consideration all the changes in claim values that occurred during the most recent year. The formula is designed to adequately cover the cost of claims brought against members and to ensure the overall financial strength and security of the Authority. The formula was developed to be as equitable as possible by taking into consideration both risk exposure and claims experience of individual members. CJPIA has temporarily deferred the payment on retrospective deposits owed to the Authority by members. The payment deferral period extends until July 1, 2013 for the Liability program and July 1, 2015 for the Workers' Compensation program. Retrospective deposit payments are scheduled to resume on these dates. The October 2011 annual retrospective adjustment is included in these balances. The City at June 30, 2012 had a retrospective deposit due of $235,647. Optional Payment Plans When retrospective deposit payments resume as indicated above, members will have the opportunity to select from a variety of optional payment plans. Discounts under the incentive plan are available to members choosing to voluntarily accelerate payment during the deferral period. The City has chosen not to voluntarily accelerate payment at this time. After the deferral period, members choosing from among the optional payment plans will be subject to a moderate annual fee. The fee is intended to provide a means for the Authority to recover otherwise foregone investment earnings and to serve as a minor disincentive for the selection of longer financing terms. 41 Fixed Rate Debt Year Ending June 30 Principal Interest Total 2013 $ 335,000 $ 498,956 $ 833,956 2014 350,000 488,906 838,906 2015 365,000 478,406 843,406 2016 385,000 467,456 852,456 2017 400,000 455,906 855,906 2018-2022 2,310,000 1,981,681 4,291,681 2023-2027 2,910,000 1,404,950 4,314,950 2028-2032 3,670,000 705,175 4,375,175 2033-2037 745,000 35,388 780,388 Totals $ 11,470,000 $ 6,516,824 $ 17,986,824 CJPIA Retrospective Deposit Liabilit Retrospective deposits and refunds are cost allocation adjustments to prior coverage periods. Some claims take many years to resolve and over time their estimated value changes. The retrospective adjustments are calculated annually and take into consideration all the changes in claim values that occurred during the most recent year. The formula is designed to adequately cover the cost of claims brought against members and to ensure the overall financial strength and security of the Authority. The formula was developed to be as equitable as possible by taking into consideration both risk exposure and claims experience of individual members. CJPIA has temporarily deferred the payment on retrospective deposits owed to the Authority by members. The payment deferral period extends until July 1, 2013 for the Liability program and July 1, 2015 for the Workers' Compensation program. Retrospective deposit payments are scheduled to resume on these dates. The October 2011 annual retrospective adjustment is included in these balances. The City at June 30, 2012 had a retrospective deposit due of $235,647. Optional Payment Plans When retrospective deposit payments resume as indicated above, members will have the opportunity to select from a variety of optional payment plans. Discounts under the incentive plan are available to members choosing to voluntarily accelerate payment during the deferral period. The City has chosen not to voluntarily accelerate payment at this time. After the deferral period, members choosing from among the optional payment plans will be subject to a moderate annual fee. The fee is intended to provide a means for the Authority to recover otherwise foregone investment earnings and to serve as a minor disincentive for the selection of longer financing terms. 41 CITY OF DIAMOND BAR NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2012 Note 7: Long -Term Liabilities (Continued) Retrospective Balances will Change Annually Retrospective balances will change with each annual computation during the payment deferral period. Member balances may increase or decrease as a result of the most recent year's claim development. Accordingly, some members who chose to pay off their balance in full may be required to pay additional retrospective deposits in the future based on the outcome of actual claim development reflected in subsequent retrospective deposit computations. Conversely, if claim development is favorable then subsequent retrospective adjustments could potentially result in refunds to the member. More information on the CJPIA retrospective balances can be found on the CJPIA website at CJPIA.org. Compensated Absences The City's policies relating to compensated absences are described in Note 1. This liability, amounting to $551,098 at June 30, 2012, is expected to be paid in future years from future resources, typically liquidated from the General Fund. Note 8: Liability, Property and Workers' Compensation Protection The City of Diamond Bar is a member of the California Joint Powers Insurance Authority (Authority). The Authority is composed of 121 California public entities and is organized under a joint powers agreement pursuant to California Government Code §6500 et seq. The purpose of the Authority is to arrange and administer programs for the pooling of self-insured losses, to purchase excess insurance or reinsurance, and to arrange for group purchased insurance for property and other lines of coverage. The California JPIA began covering claims of its members in 1978. Each member government has an elected official as its representative on the Board of Directors. The Board operates through a nine -member Executive Committee. a. Self -Insurance Programs of the Authority Each member pays an annual contribution (formerly called the primary deposit) to cover estimated losses for the coverage period. This initial funding is paid at the beginning of the coverage period. After the close of the coverage period, outstanding claims are valued. A retrospective deposit computation is then conducted annually thereafter until all claims incurred during the coverage period are closed on a pool -wide basis. This subsequent cost re -allocation among members based on actual claim development can result in adjustments of either refunds or additional deposits required. The total funding requirement for self-insurance programs is estimated using actuarial models and pre -funded through the annual contribution. Costs are allocated to individual agencies based on exposure (payroll) and experience (claims) relative to other members of the risk -sharing pool. Additional information regarding the cost allocation methodology is provided below. Liability In the liability program claims are pooled separately between police and non -police exposures. (1) The payroll of each member is evaluated relative to the payroll of other members. A variable credibility factor is determined for each member, which establishes the weight applied to payroll and the weight applied to losses within the formula. (2) The first layer of losses includes incurred costs up to $30,000 for each occurrence and is 42 CITY OF DIAMOND BAR NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2012 Note 8: Liability, Property and Workers' Compensation Protection (Continued) evaluated as a percentage of the pool's total incurred costs within the first layer. (3) The second layer of losses includes incurred costs from $30,000 to $750,000 for each occurrence and is evaluated as a percentage of the pool's total incurred costs within the second layer. (4) Incurred costs in excess of $750,000 up to the reinsurance attachment point of $5 million are distributed based on the outcome of cost allocation within the first and second loss layers. (5) Costs of covered claims from $5 million to $10 million are paid under a reinsurance contract subject to a $2.5 million annual aggregate deductible. Costs of covered claims from $10 million to $15 million are paid under two reinsurance contracts subject to a combined $3 million annual aggregate deductible. On a cumulative basis for all 2011-12 reinsurance contracts the annual aggregate deductible is $5.5 million. (6) Costs of covered claims from $15 million up to $50 million are covered through excess insurance policies. The overall coverage limit for each member including all layers of coverage is $50 million per occurrence. Costs of covered claims for subsidence losses are paid by reinsurance and excess insurance with a pooled sub -limit of $35 million per occurrence. This $35 million subsidence sub -limit is composed of (a) $5 million retained within the pool's SIR, (b) $10 million in reinsurance and (c) $20 million in excess insurance. The excess insurance layer has a $20 million annual aggregate. Workers' Compensation In the workers' compensation program claims are pooled separately between public safety (police and fire) and non-public safety exposures. (1) The payroll of each member is evaluated relative to the payroll of other members. A variable credibility factor is determined for each member, which establishes the weight applied to payroll and the weight applied to losses within the formula. (2) The first layer of losses includes incurred costs up to $50,000 for each occurrence and is evaluated as a percentage of the pool's total incurred costs within the first layer. (3) The second layer of losses includes incurred costs from $50,000 to $100,000 for each occurrence and is evaluated as a percentage of the pool's total incurred costs within the second layer. (4) Incurred costs in excess of $100,000 up to the reinsurance attachment point of $2 million are distributed based on the outcome of cost allocation within the first and second loss layers. (5) Costs of covered claims from $2 million up to statutory limits are paid under a reinsurance policy. Protection is provided per statutory liability under California Workers' Compensation Law. Employer's Liability losses are pooled among members to $2 million. Coverage from $2 million to $5 million is purchased as part of a reinsurance policy, and Employer's Liability losses from $5 million to $10 million are pooled among members. b. Purchased Insurance Pollution Leaal Liabilitv Insurance The City of Diamond Bar participates in the pollution legal liability insurance program (formerly called environmental insurance) which is available through the Authority. The policy covers sudden and gradual pollution of scheduled property, streets, and storm drains owned by the City of Diamond Bar. Coverage is on a claims -made basis. There is a $50,000 deductible. The Authority has a limit of $50 million for the 3 -year period from July 1, 2011 through July 1, 2014. Each member of the Authority has a $10 million sub -limit during the 3 -year term of the policy. 43 CITY OF DIAMOND BAR NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2012 Note 8: Liability, Property and Workers' Compensation Protection (Continued) Property Insurance The City of Diamond Bar participates in the all-risk property protection program of the Authority. This insurance protection is underwritten by several insurance companies. City of Diamond Bar property is currently insured according to a schedule of covered property submitted by the City of Diamond Bar to the Authority. City of Diamond Bar property currently has all-risk property insurance protection in the amount of $29,645,856. There is a $5,000 deductible per occurrence except for non -emergency vehicle insurance which has a $1,000 deductible. Premiums for the coverage are paid annually and are not subject to retrospective adjustments. Crime Insurance The City of Diamond Bar purchases crime insurance coverage in the amount of $1,000,000 with a $2,500 deductible. The fidelity coverage is provided through the Authority. Premiums are paid annually and are not subject to retrospective adjustments. c. Adequacy of Protection During the past three fiscal years, none of the above programs of protection experienced settlements or judgments that exceeded pooled or insured coverage. There were also no significant reductions in pooled or insured liability coverage in 2011-12. The aforementioned information is not included in the accompanying financial statements. Complete financial statements for the Authority may be obtained at their administrative office located at 8081 Moody Street, La Palma, California 90623. Note 9: Pension Plan Plan Description The City of Diamond Bar participates in the Miscellaneous 2% at 55 Risk Pool of the California Public Employee's Retirement System (PERS), a cost-sharing, multiple -employer defined benefit pension plan administered by PERS. PERS provides retirement and disability benefits, annual cost -of -living adjustments, and death benefits to plan members and beneficiaries. Benefit provisions and all other requirements are established by State statue and District ordinance. Copies of the PERS' annual financial report may be obtained from the PERS Executive Office 400 P Street, Sacramento, California 95814. Funding Policy The contribution requirements of the plan members are established by State statute and the employer contribution rate is established and may be amended by PERS. Active City employees are required to contribute 7% of their annual covered salary to PERS. The city makes the contributions required of City employees on their behalf and for their account usually using available resources in the general fund. The City is required to contribute the actuarially determined remaining amounts necessary to fund the benefits for its members. The current rate is 11.46% of covered payroll. The City's contributions to CalPERS for the years ending June 30, 2012, 2011 and 2010, were $309,329, $410,342 and $396,087, respectively and were equal to the required contribution for each year. 44 CITY OF DIAMOND BAR NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2012 Note 9: Pension Plan (Continued) Plan Description In connection with the retirement benefits for employees described in Note 10, the City provides post-retirement health care benefits to retirees through the California Public Employees' Retirement System Health Benefits program (the PERS Health program). The program is an agent multiple -employer defined benefit health care plan that provides healthcare insurance for eligible retirees, through the City's group plans, which cover both active and retired employees. Employees become eligible to retire and receive City -paid healthcare benefits upon attainment of age 50 and 5 years of covered PERS service, or by qualifying disability retirement status. Retired employees over the age of 65 must join one of the supplemental (Medicare -coordinated) options under the PERS Health Program. Benefits are paid for the lifetime of the retiree. Benefit provisions are established by city ordinance which references state statutes (the Public Employee Medical and Hospital Care Act). The PERS Health Program does not issue a publicly available financial report. Note 10: Postemployment Benefits Other than Pensions Annual OPEB Cost and Net OPEB Obliaation The City's annual OPEB cost (expense) is calculated based on the annual required contribution of the employer (ARC), an amount actuarially determined in accordance with parameters of GASB Statement 45. The ARC represents a level of funding that, if paid on an ongoing basis, is projected to cover normal cost each year and to amortize any unfunded liabilities of the plan over a period not to exceed thirty years. Funding Policy The City sets its monthly contribution rates for health insurance on behalf of all eligible retirees according to the PERS Health Program's statutory minimum ($108/month for calendar 2011 and $112/month for calendar 2012, increased in all future years according to the rate of medical inflation). The City pays a 0.36% of premium administrative charge on behalf of all retirees. The City is currently funding this OPEB obligation on a pay-as-you-go basis usually using available resources in the general fund. For the year ended June 30, 2012, the City paid $7,512 in health care costs for its retirees and their covered dependents. 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 to the PERS Health Program (in thousands): Annual required contribution $ 79,497 Interest on net OPEB obligation 3,499 Adjustment to annual required contribution (8,222) Annual OPEB cost (expense) 74,774 Contributions made 7,512 Increase in net OPEB obligation 67,262 Net OPEB obligation - beginning of year 174,971 Net OPEB obligation - end of year $ 242,233 45 CITY OF DIAMOND BAR NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2012 Note 10: Postemployment Benefits Other than Pensions (Continued) Three -Year Trend Information For fiscal year 2012, the City's annual OPEB cost (expense) $74,774 was equal to the ARC. Information on the annual OPEB costs, the percentage of annual OPEB cost contributed to the plan, and the net OPEB obligation is only available for two fiscal years, as presented below: 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 City 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 below presents multiyear trend information about whether the actuarial value of plan assets is increasing or decreasing over time relative to the Percentage of Actuarial Fiscal Year Annual OPEB Actual Annual OPEB Costs Net OPEB Ended Costs Contributions Contributed Obligation 6/30/10 $ 62,517 $ 5,594 8.95% $ 121,710 6/30/11 59,033 5,772 9.78% 174,971 6/30/12 74,774 7,512 10.05% 242,233 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 City 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 below presents multiyear trend information about whether the actuarial value of plan assets is increasing or decreasing over time relative to the actuarial accrued liabilities for benefits. The information is as of the latest actuarial valuation. Actuarial Actuarial Actuarial Percent of Type of Valuation Value of Accrued Funded Covered Covered Interest Valuation Date Assets Liability Ratio Payroll Payroll Rate Actual 7/1/2008 $ - $ 402,007 0.0% $ 3,936,516 10.99% 5.00% Actual 7/1/2011 - 502,013 0.0% 3,959,573 12.68% 5.00% 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 the employer and the plan members at 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 value of assets consistent with the long-term perspective of the calculations. In the July 1, 2011, actuarial valuation, the projected unit credit method was used. The actuarial assumptions included a discount rate of 5.0% per annum, inflation rate of 3.0%, a rate of return on assets of 5.0% per annum and a healthcare cost trend rate of 8.0% initially, reduced by annual decrements of 1.0% to an ultimate rate of 5.0% after three years. The City's unfunded actuarial accrued liability will be amortized as a level dollar over an open period of 30 years. 46 CITY OF DIAMOND BAR NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2012 Note 11: Contingencies The City is presently involved in other matters of litigation that have arisen in the normal course of the City's business. City management believes, based upon consultation with the City Attorney, that these cases, in the aggregate, are not expected to have a material adverse financial impact on the City. Note 12: Construction Commitments The following material construction commitments existed at June 30, 2012: Expenditures as of Remaining Project Name June 30, 2012 Commitments Park Improvements $ 1,021,172 $ 328,083 Street Improvements Transportation Infrastructure Traffic Control Improvements Misc. Improvements Note 13: Operating Leases 429,660 1,632,112 - 1,120,000 6,048 108,952 98,546 426,454 $ 1,555,426 $ 3,615,601 The City leases building and office facilities under non -cancelable operating leases. In January 2012, the City relocated to its new City Hall. However, the City will continue to lease meeting room space for the City Council to conduct its meetings. The total costs for such leases were $164,093 for the year ended June 30, 2012. The future minimum lease payments for the lease of building and office facilities are as follows: Year Ending June 30, 2013 2014 2015 2016 2017 Total 47 $ 24,240 24,725 25,219 25,724 12,989 $ 112,897 CITY OF DIAMOND BAR NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2012 Note 14: Fund Balance/Net Asset Restatements Fund Balance/Net Asset Restatements: Nonmajor governmental funds: Traffic Congestion Relief Fund To change the funding source of CIP project 01410 as all Traffic Congestion Relief Funds need to be expended by June 30, 2011 Air Quality Improvement Fund To properly state prior year AB2766 revenue received in the current year. Proposition 1B Fund To record unearned revenue realized in the prior years To change the funding source of CIP project 01410 as all Traffic Congestion Relief Funds need to be expended by June 30, 2011 Total Fund Balance Restatements Internal Service Funds Self Insurance Fund To reverse retrospective insurance balance recorded in accounts payable from the fiscal year 2008-09. Total Net Asset restatements 48 $ (35,443) 14,473 275,808 35,443 290,281 269,388 $ 559,669 THIS PAGE INTENTIONALLY LEFT BLANK 49 CITY OF DIAMOND BAR COMBINING BALANCE SHEET NONMAJOR GOVERNMENTAL FUNDS JUNE 30, 2012 Assets: Pooled cash and investments Receivables: Accounts Notes and loans Due from other governments Restricted assets: Cash and investments with fiscal agents Total Assets Liabilities and Fund Balances: Liabilities: Special Revenue Funds Integrated Waste State Gas Tax Proposition A Proposition C Management Fund Transit Fund Transit Fund Fund $ 553,009 $ 272,296 $ 1,707,372 $ 852,060 - - - 50,748 170,895 - - - $ 723,904 $ 272,296 $ 1,707,372 $ 902,808 Accounts payable $ - $ 37,475 $ 42,112 $ 230 Accrued liabilities - 3,790 5,152 5,041 Deferred revenues - - - - Unearned revenues - - - - Due to other governments - - - - Due to other funds - - - - Retentions payable - - 4,617 - Total Liabilities - 41,265 51,881 5,271 Restricted for: Community development projects - - - 897,537 Public safety - - - - Highways and streets 723,904 231,031 1,655,491 - Capital Projects - - - - Unassigned - - - - Total Fund Balances 723,904 231,031 1,655,491 897,537 Total Liabilities and Fund Balances $ 723,904 $ 272,296 $ 1,707,372 $ 902,808 50 CITY OF DIAMOND BAR COMBINING BALANCE SHEET NONMAJOR GOVERNMENTAL FUNDS JUNE 30, 2012 (Continued) Assets: Pooled cash and investments Receivables: Accounts Notes and loans Due from other governments Restricted assets: Cash and investments with fiscal agents Total Assets Liabilities and Fund Balances: Liabilities: Special Revenue Funds Traffic Traffic Air Quality Improvement Congestion Improvement Justice Fund Relief Fund Fund Assistance Grant $ 564,474 $ - $ 154,993 $ - - - 17,269 11,800 $ 564,474 $ - $ 172,262 $ 11,800 Accounts payable $ - $ - $ 7,395 $ - Accrued liabilities - - - - Deferred revenues - - - - Unearned revenues 100,967 - - - Due to other governments - - - - Due to other funds - - - 13,064 Retentions payable - - - - Total Liabilities 100,967 - 7,395 13,064 Restricted for: Community development projects - - - - Public safety - - - - Highways and streets 463,507 - - - Capital Projects - - 164,867 - Unassigned - - - (1,264) Total Fund Balances 463,507 - 164,867 (1,264) Total Liabilities and Fund Balances $ 564,474 $ - $ 172,262 $ 11,800 51 CITY OF DIAMOND BAR COMBINING BALANCE SHEET NONMAJOR GOVERNMENTAL FUNDS JUNE 30, 2012 Assets: Pooled cash and investments Receivables: Accounts Notes and loans Due from other governments Restricted assets: Cash and investments with fiscal agents Total Assets Liabilities and Fund Balances: Liabilities: Special Revenue Funds Park and Facility Trails & Proposition 1B Development Bikeways Fund Bond Fund Fund CDBG Fund $ 50,030 $ - $ 10,726 $ - - - - 334,190 - - 150,000 95,969 $ 50,030 $ - $ 160,726 $ 430,159 Accounts payable $ - $ - $ - $ 38,489 Accrued liabilities - - - 384 Deferred revenues - - 150,000 - Unearned revenues - - - - Due to other governments - - - 334,190 Due to other funds - - - 57,096 Retentions payable - - - - Total Liabilities - - 150,000 430,159 Restricted for: Community development projects 50,030 - 10,726 - Public safety - - - - Highways and streets - - - - Capital Projects - - - - Unassigned - - - - Total Fund Balances 50,030 - 10,726 - Total Liabilities and Fund Balances $ 50,030 $ - $ 160,726 $ 430,159 52 CITY OF DIAMOND BAR COMBINING BALANCE SHEET NONMAJOR GOVERNMENTAL FUNDS JUNE 30, 2012 (Continued) Assets: Pooled cash and investments Receivables: Accounts Notes and loans Due from other governments Restricted assets: Cash and investments with fiscal agents Total Assets Special Revenue Funds Edward Byrne Justice Asset Seizure Assistance Grant COPS Fund Fund CLEEP Fund (JAG) Fund $ 82,586 $ 162,364 $ 40,970 $ - $ 82,586 $ 162,364 $ 40,970 $ - Liabilities and Fund Balances: Liabilities: Accounts payable $ 412 $- Accrued liabilities - - - - Deferred revenues - - - - Unearned revenues - - - - Due to other governments - - - - Due to other funds - - - - Retentions payable - - - - Total Liabilities 412 - - - Restricted for: Community development projects - - - - Public safety 82,174 162,364 40,970 - Highways and streets - - - - Capital Projects - - - - Unassigned - - - - Total Fund Balances 82,174 162,364 40,970 - Total Liabilities and Fund Balances $ 82,586 $ 162,364 $ 40,970 $ - 53 CITY OF DIAMOND BAR COMBINING BALANCE SHEET NONMAJOR GOVERNMENTAL FUNDS JUNE 30, 2012 Assets: Pooled cash and investments Receivables: Accounts Notes and loans Due from other governments Restricted assets: Cash and investments with fiscal agents Total Assets Liabilities and Fund Balances: Liabilities: Accounts payable $ Special Revenue Funds - $ 260,979 $ Landscape Accrued liabilities Total Maintenance Measure R Local EECBG Grant Governmental District Fund Return Fund Fund Funds $ 76,361 $ 415,065 $ 260,718 $ 5,203,024 - - - 50,748 - - - 334,190 13,712 - - 459,645 $ 90,073 $ 415,065 $ 260,718 $ 6,047,607 Accounts payable $ 74,732 $ - $ 260,979 $ 461,824 Accrued liabilities - - - 14,367 Deferred revenues - - - 150,000 Unearned revenues - - - 100,967 Due to other governments - - - 334,190 Due to other funds - - - 70,160 Retentions payable - - - 4,617 Total Liabilities 74,732 - 260,979 1,136,125 Restricted for: Community development projects - - - 958,293 Public safety - - - 285,508 Highways and streets 15,341 415,065 - 3,504,339 Capital Projects - - - 164,867 Unassigned - - (261) (1,525) Total Fund Balances 15,341 415,065 (261) 4,911,482 Total Liabilities and Fund Balances $ 90,073 $ 415,065 $ 260,718 $ 6,047,607 54 THIS PAGE INTENTIONALLY LEFT BLANK 55 CITY OF DIAMOND BAR COMBINING STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES NONMAJOR GOVERNMENTAL FUNDS YEAR ENDED JUNE 30, 2012 Revenues: Taxes Licenses and permits Intergovernmental Charges for services Use of money and property Total Revenues Expenditures: Current: General government Public safety Community development Parks, recreation, and culture Highways and streets Capital outlay Total Expenditures Excess (Deficiency) of Revenues Over (Under) Expenditures Other Financing Sources (Uses): Transfers in Transfers out Total Other Financing Sources (Uses) Net Change in Fund Balances al Revenue Funds Integrated Waste State Gas Tax Proposition A Proposition C Management Fund Transit Fund Transit Fund Fund 1,688,763 891,668 740,278 39,283 - 1,007,237 - 429,853 4,133 2,545 14,948 6,479 1,692,896 1,901,450 755,226 475,615 409,000 - 77,170 - 1,432,283 712,931 - 64,221 1,918,453 777,152 306,517 306.517 1,692,896 (17,003) (21,926) 169,098 101,102 - - - (1,628,666) - (290,107) (62,450) (1,527,564) - (290,107) (62,450) 165,332 (17,003) (312,033) 106,648 Fund Balances, Beginning of Year 558,572 248,034 1,967,524 790,889 Restatements - - - - Fund Balances, Beginning of Year, as Restated 558,572 248,034 1,967,524 790,889 Fund Balances, End of Year $ 723,904 $ 231,031 $ 1,655,491 $ 897,537 56 CITY OF DIAMOND BAR COMBINING STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES NONMAJOR GOVERNMENTAL FUNDS YEAR ENDED JUNE 30, 2012 (Continued) Revenues: Taxes Licenses and permits Intergovernmental Charges for services Use of money and property Total Revenues Expenditures: Current: General government Public safety Community development Parks, recreation, and culture Highways and streets Capital outlay Total Expenditures Excess (Deficiency) of Revenues Over (Under) Expenditures Other Financing Sources (Uses): Transfers in Transfers out Total Other Financing Sources (Uses) Net Change in Fund Balances al Revenue Funds Traffic Traffic Air Quality Justice Improvement Congestion Improvement Assistance Fund Relief Fund Fund Grant 82,095 - - - 832,219 - 69,956 23,177 4,660 - 1,187 - 918,974 - 71,143 23,177 67,316 - 27,854 - - - 27,854 - 67,316 - 891,120 (661,463) (661,463) 229,657 3,827 23.177 (24,441) - (24,441) 3,827 (1,264) Fund Balances, Beginning of Year 233,850 35,443 146,567 - Restatements - (35,443) 14,473 - Fund Balances, Beginning of Year, as Restated 233,850 - 161,040 - Fund Balances, End of Year $ 463,507 $ - $ 164,867 $ (1,264) 57 CITY OF DIAMOND BAR COMBINING STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES NONMAJOR GOVERNMENTAL FUNDS YEAR ENDED JUNE 30, 2012 Revenues: Taxes Licenses and permits Intergovernmental Charges for services Use of money and property Total Revenues Expenditures: Current: General government Public safety Community development Parks, recreation, and culture Highways and streets Capital outlay Total Expenditures Excess (Deficiency) of Revenues Over (Under) Expenditures Other Financing Sources (Uses): Transfers in Transfers out Total Other Financing Sources (Uses) Net Change in Fund Balances Fund Balances, Beginning of Year Restatements Fund Balances, Beginning of Year, as Restated Fund Balances, End of Year Special Revenue Funds Park and Facility Trails & Proposition Development Bikeways Fund 1B Bond Fund Fund CDBG Fund 50,000 211,179 149,108 506,290 30 7,647 4,612 - 50,030 218,826 153,720 506,290 - - - 185,692 - 185,692 - - 50,030 218,826 153,720 320,598 - - 20,000 - - (218,826) (1,016,966) (320,598) - (218,826) (996,966) (320,598) 50,030 - (843,246) - - (311,251) 853,972 - - 311,251 - - - - 853,972 - $ 50,030 $ - $ 10,726 $ - 58 CITY OF DIAMOND BAR COMBINING STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES NONMAJOR GOVERNMENTAL FUNDS YEAR ENDED JUNE 30, 2012 (Continued) Revenues: Taxes Licenses and permits Intergovernmental Charges for services Use of money and property Total Revenues Expenditures: Current: General government Public safety Community development Parks, recreation, and culture Highways and streets Capital outlay Total Expenditures Excess (Deficiency) of Revenues Over (Under) Expenditures Other Financing Sources (Uses): Transfers in Transfers out Total Other Financing Sources (Uses) Net Change in Fund Balances Special Revenue Funds Edward Byrne Justice Assistance Asset Seizure Grant (JAG) COPS Fund Fund CLEEP Fund Fund 100,000 - - 34,385 1,060 2,011 338 (279) 101,060 2,011 338 34,106 73,729 - 6,355 - 73,729 6,355 27,331 2,011 (6,017) 34,106 (87,772) (103,586) - (34,295) (87,772) (103,586) - (34,295) (60,441) (101,575) (6,017) (189) Fund Balances, Beginning of Year 142,615 263,939 46,987 189 Restatements - - - - Fund Balances, Beginning of Year, as Restated 142,615 263,939 46,987 189 Fund Balances, End of Year $ 82,174 $ 162,364 $ 40,970 $ - 59 CITY OF DIAMOND BAR COMBINING STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES NONMAJOR GOVERNMENTAL FUNDS YEAR ENDED JUNE 30, 2012 Revenues: Taxes Licenses and permits Intergovernmental Charges for services Use of money and property Total Revenues Expenditures: Current: General government Public safety Community development Parks, recreation, and culture Highways and streets Capital outlay Total Expenditures Excess (Deficiency) of Revenues Over (Under) Expenditures Other Financing Sources (Uses): Transfers in Transfers out Total Other Financing Sources (Uses) Net Change in Fund Balances Fund Balances, Beginning of Year al Revenue Funds Landscape Measure R Total Maintenance Local Return EECBG Grant Governmental District Fund Fund Fund Funds $ 547,209 $ - $ - $ 547,209 - - - 82,095 - 551,123 308,732 6,196,161 - - - 1,437,090 501 3,450 131 53,453 547,710 554,573 308,863 8,316,008 - - - 409,000 - - - 80,084 - - 3,870 563,395 - - - 77,170 674,249 - - 2,847,317 - - 288,674 352,895 674,249 - 292,544 4,329,861 (126,539) 554,573 16,319 3,986,147 134,156 - - 255,258 (20,541) (704,307) - (5,174,018) 113,615 (704,307) - (4,918,760) (12,924) (149,734) 16,319 (932,613) 28,265 564,799 (16,580) 5,553,814 Restatements - - - 290,281 Fund Balances, Beginning of Year, as Restated 28,265 564,799 (16,580) 5,844,095 Fund Balances, End of Year $ 15,341 $ 415,065 $ (261) $ 4,911,482 CITY OF DIAMOND BAR BUDGETARY COMPARISON SCHEDULE STATE GAS TAX FUND YEAR ENDED JUNE 30, 2012 61 Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) Budgetary Fund Balance, July 1 $ 558,572 $ 558,572 $ 558,572 $ - Resources (Inflows): Intergovernmental 1,627,418 1,647,902 1,688,763 40,861 Use of money and property - - 4,133 4,133 Transfers in - 101,102 101,102 - Amounts Available for Appropriation 2,185,990 2,307,576 2,352,570 44,994 Charges to Appropriation (Outflow): Transfers out 1,627,418 1,728,520 1,628,666 99,854 Total Charges to Appropriations 1,627,418 1,728,520 1,628,666 99,854 Budgetary Fund Balance, June 30 $ 558,572 $ 579,056 $ 723,904 $ 144,848 61 CITY OF DIAMOND BAR BUDGETARY COMPARISON SCHEDULE PROPOSITION A TRANSIT FUND YEAR ENDED JUNE 30, 2012 62 Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) Budgetary Fund Balance, July 1 $ 248,034 $ 248,034 $ 248,034 $ - Resources (Inflows): Intergovernmental 839,867 839,867 891,668 51,801 Charges for services 1,200,000 1,200,000 1,007,237 (192,763) Use of money and property - - 2,545 2,545 Amounts Available for Appropriation 2,287,901 2,287,901 2,149,484 (138,417) Charges to Appropriation (Outflow): General government 56,430 56,430 409,000 (352,570) Parks, recreation and culture 74,100 74,100 77,170 (3,070) Highways and Streets 1,668,768 1,668,943 1,432,283 236,660 Transfers out 152,570 152,570 - 152,570 Total Charges to Appropriations 1,951,868 1,952,043 1,918,453 33,590 Budgetary Fund Balance, June 30 $ 336,033 $ 335,858 $ 231,031 $ (104,827) 62 CITY OF DIAMOND BAR BUDGETARY COMPARISON SCHEDULE PROPOSITION C TRANSIT FUND YEAR ENDED JUNE 30, 2012 Budgetary Fund Balance, July 1 Resources (Inflows): Intergovernmental Use of money and property Amounts Available for Appropriation Charges to Appropriation (Outflow): Highways and Streets Capital outlay Transfers out Total Charges to Appropriations Budgetary Fund Balance, June 30 Variance with 63 Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) $ 1,967,524 $ 1,967,524 $ 1,967,524 $ - 696,647 696,647 740,278 43,631 10,000 10,000 14,948 4,948 2,674,171 2,674,171 2,722,750 48,579 727,562 665,373 712,931 (47,558) - 125,000 64,221 60,779 865,000 1,008,203 290,107 718,096 1,592,562 1,798,576 1,067,259 731,317 $ 1,081,609 $ 875,595 $ 1,655,491 $ 779,896 63 CITY OF DIAMOND BAR BUDGETARY COMPARISON SCHEDULE INTEGRATED WASTE MANAGEMENT FUND YEAR ENDED JUNE 30, 2012 Budgetary Fund Balance, July 1 Resources (Inflows): Intergovernmental Charges for services Use of money and property Amounts Available for Appropriation Charges to Appropriation (Outflow): Community development Transfers out Total Charges to Appropriations Budgetary Fund Balance, June 30 Variance with 64 Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) $ 790,889 $ 790,889 $ 790,889 $ - 23,000 23,000 39,283 16,283 531,000 531,000 429,853 (101,147) 3,000 3,000 6,479 3,479 1,347,889 1,347,889 1,266,504 (81,385) 421,869 431,169 306,517 124,652 62,450 62,450 62,450 - 484,319 493,619 368,967 124,652 $ 863,570 $ 854,270 $ 897,537 $ 43,267 64 CITY OF DIAMOND BAR BUDGETARY COMPARISON SCHEDULE TRAFFIC IMPROVEMENT FUND YEAR ENDED JUNE 30, 2012 Variance with 65 Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) Budgetary Fund Balance, July 1 $ 233,850 $ 233,850 $ 233,850 $ - Resources (Inflows): Licenses and permits - 82,000 82,095 95 Intergovernmental 31,570 31,570 832,219 800,649 Use of money and property - - 4,660 4,660 Amounts Available for Appropriation 265,420 347,420 1,152,824 805,404 Charges to Appropriation (Outflow): Highways and streets - 140,003 27,854 112,149 Transfers out - - 661,463 (661,463) Total Charges to Appropriations - 140,003 689,317 (549,314) Budgetary Fund Balance, June 30 $ 265,420 $ 207,417 $ 463,507 $ 256,090 65 CITY OF DIAMOND BAR BUDGETARY COMPARISON SCHEDULE AIR QUALITY IMPROVEMENT FUND YEAR ENDED JUNE 30, 2012 Budgetary Fund Balance, July 1, as restated Resources (Inflows): Intergovernmental Use of money and property Amounts Available for Appropriation Charges to Appropriation (Outflow): Community development Total Charges to Appropriations Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) $ 161,040 $ 161,040 $ 161,040 $ - 70,000 70,000 500 500 231,540 231,540 69,956 (44) 1,187 687 232,183 643 176,350 191,350 67,316 124,034 176,350 191,350 67,316 124,034 Budgetary Fund Balance, June 30 $ 55,190 $ 40,190 $ 164,867 $ 124,677 CITY OF DIAMOND BAR BUDGETARY COMPARISON SCHEDULE TRAILS & BIKEWAYS FUND YEAR ENDED JUNE 30, 2012 Budgetary Fund Balance, July 1 Resources (Inflows): Intergovernmental Use of money and property Amounts Available for Appropriation Charges to Appropriation (Outflow): Transfers out Total Charges to Appropriations Budgetary Fund Balance, June 30 67 Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) 50,000 50,000 50,000 - - - 30 30 50,000 50,000 50,030 30 50,000 50,000 - 50,000 50,000 50,000 - 50,000 $ - $ - $ 50,030 $ 50,030 67 CITY OF DIAMOND BAR BUDGETARY COMPARISON SCHEDULE PROPOSITION 1B BOND FUND YEAR ENDED JUNE 30, 2012 Budgetary Fund Balance, July 1, as restated Resources (Inflows): Intergovernmental Use of money and property Amounts Available for Appropriation Charges to Appropriation (Outflow): Transfers out Total Charges to Appropriations Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) 210,000 210,000 211,179 1,179 1,300 1,300 7,647 6,347 211,300 211,300 218,826 7,526 _ 16,070 218,826 (202,756) 16,070 218,826 (202,756) Budgetary Fund Balance, June 30 $ 211,300 $ 195,230 $ - $ (195,230) CITY OF DIAMOND BAR BUDGETARY COMPARISON SCHEDULE PARK AND FACILITY DEVELOPMENT FUND YEAR ENDED JUNE 30, 2012 Budgetary Fund Balance, July 1 Resources (Inflows): Intergovernmental Use of money and property Transfers in Amounts Available for Appropriation Charges to Appropriation (Outflow): Transfers out Total Charges to Appropriations Budgetary Fund Balance, June 30$ (57,721) $ (36,900) $ 10,726 $ 47,626 Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) $ 853,972 $ 853,972 $ 853,972 $ - 141,484 291,484 149,108 (142,376) 3,500 3,500 4,612 1,112 - - 20,000 20,000 998,956 1,148,956 1,027,692 (121,264) 1,056,677 1,185,856 1,016,966 168,890 1,056,677 1,185,856 1,016,966 168,890 Budgetary Fund Balance, June 30$ (57,721) $ (36,900) $ 10,726 $ 47,626 CITY OF DIAMOND BAR BUDGETARY COMPARISON SCHEDULE COMMUNITY DEVELOPMENT BLOCK GRANT (CDBG FUND) YEAR ENDED JUNE 30, 2012 Budgetary Fund Balance, July 1 Resources (Inflows): Intergovernmental Amounts Available for Appropriation Charges to Appropriation (Outflow): Community development Transfers out Total Charges to Appropriations Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) 352,010 526,136 506,290 (19,846) 352,010 526,136 506,290 (19,846) 238,010 212,006 185,692 26,314 269,979 155,979 320,598 (164,619) 507,989 367,985 506,290 (138,305) Budgetary Fund Balance, June 30$ (155,979) $ 158,151 $ - $ (158,151) 70 CITY OF DIAMOND BAR BUDGETARY COMPARISON SCHEDULE CITIZENS OPTION FOR PUBLIC SAFETY (COPS) FUND YEAR ENDED JUNE 30, 2012 71 Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) Budgetary Fund Balance, July 1 $ 142,615 $ 142,615 $ 142,615 $ - Resources (Inflows): Intergovernmental - 100,000 100,000 - Use of money and property 500 500 1,060 560 Amounts Available for Appropriation 143,115 243,115 243,675 560 Charges to Appropriation (Outflow): Public safety 13,000 103,000 73,729 29,271 Transfers out 105,685 105,685 87,772 17,913 Total Charges to Appropriations 118,685 208,685 161,501 47,184 Budgetary Fund Balance, June 30 $ 24,430 $ 34,430 $ 82,174 $ 47,744 71 CITY OF DIAMOND BAR BUDGETARY COMPARISON SCHEDULE ASSET SEIZURE FUND YEAR ENDED JUNE 30, 2012 Budgetary Fund Balance, July 1 Resources (Inflows): Use of money and property Amounts Available for Appropriation Charges to Appropriation (Outflow): Transfers out Total Charges to Appropriations Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) $ 263,939 $ 263,939 $ 263,939 $ - - - 2,011 2,011 263,939 263,939 265,950 2,011 115,337 115,337 103,586 11,751 115,337 115,337 103,586 11,751 Budgetary Fund Balance, June 30 $ 148,602 $ 148,602 $ 162,364 $ 13,762 72 CITY OF DIAMOND BAR BUDGETARY COMPARISON SCHEDULE CALIFORNIA LAW ENFORCEMENT EQUIPMENT PROGRAM (CLEEP) FUND YEAR ENDED JUNE 30, 2012 Budgetary Fund Balance, July 1 Resources (Inflows): Use of money and property Amounts Available for Appropriation Charges to Appropriation (Outflow): Public safety Total Charges to Appropriations Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) $ 46,987 $ 46,987 $ 46,987 $ - 200 200 338 138 47,187 47,187 47,325 138 10,000 10,000 6,355 3,645 10,000 10,000 6,355 3,645 Budgetary Fund Balance, June 30 $ 37,187 $ 37,187 $ 40,970 $ 3,783 73 CITY OF DIAMOND BAR BUDGETARY COMPARISON SCHEDULE EDWARD BYRNE JUSTICE ASSISTANCE GRANT FUND YEAR ENDED JUNE 30, 2012 Budgetary Fund Balance, July 1 Resources (Inflows): Intergovernmental Use of money and property Amounts Available for Appropriation Charges to Appropriation (Outflow): Transfers out Total Charges to Appropriations Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) $ 189 $ 189 $ 189 $ - - - 34,385 34,385 - - (279) (279) 189 189 34,295 34,106 61,183 61,183 34,295 26,888 61,183 61,183 34,295 26,888 Budgetary Fund Balance, June 30 $ (60,994) $ (60,994) $ - $ 60,994 74 CITY OF DIAMOND BAR BUDGETARY COMPARISON SCHEDULE LANDSCAPE MAINTENANCE DISTRICT FUND YEAR ENDED JUNE 30, 2012 Budgetary Fund Balance, July 1 Resources (Inflows): Taxes Use of money and property Transfers in Amounts Available for Appropriation Charges to Appropriation (Outflow): Highways and Streets Transfers out Total Charges to Appropriations Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) $ 28,265 $ 28,265 $ 28,265 $ - 552,492 552,492 547,209 (5,283) - - 501 501 94,617 134,182 134,156 (26) 675,374 714,939 710,131 (4,808) 647,109 686,674 674,249 12,425 - - 20,541 (20,541) 647,109 686,674 694,790 (8,116) Budgetary Fund Balance, June 30 $ 28,265 $ 28,265 $ 15,341 $ (12,924) 75 CITY OF DIAMOND BAR BUDGETARY COMPARISON SCHEDULE MEASURE R LOCAL RETURN FUND YEAR ENDED JUNE 30, 2012 Budgetary Fund Balance, July 1 Resources (Inflows): Intergovernmental Use of money and property Amounts Available for Appropriation Charges to Appropriation (Outflow): Transfers out Total Charges to Appropriations Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) $ 564,799 $ 564,799 $ 564,799 $ - 522,490 522,490 1,087,289 1,087,289 551,123 28,633 3,450 3,450 1,119,372 32,083 521,915 521,915 704,307 (182,392) 521,915 521,915 704,307 (182,392) Budgetary Fund Balance, June 30 $ 565,374 $ 565,374 $ 415,065 $ (150,309) 76 CITY OF DIAMOND BAR BUDGETARY COMPARISON SCHEDULE EECBG GRANT FUND YEAR ENDED JUNE 30, 2012 Budgetary Fund Balance, July 1 Resources (Inflows): Intergovernmental Use of money and property Amounts Available for Appropriation Charges to Appropriation (Outflow): Community development Capital outlay Total Charges to Appropriations Budgetary Fund Balance, June 30 $ (16,580) $ (16,580) $ (261) $ 16,319 77 Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) $ (16,580) $ (16,580) $ (16,580) $ - 330,979 330,979 308,732 (22,247) - - 131 131 314,399 314,399 292,283 (22,116) - - 3,870 (3,870) 330,979 330,979 288,674 42,305 330,979 330,979 292,544 38,435 Budgetary Fund Balance, June 30 $ (16,580) $ (16,580) $ (261) $ 16,319 77 CITY OF DIAMOND BAR BUDGETARY COMPARISON SCHEDULE CAPITAL IMPROVEMENT FUND YEAR ENDED JUNE 30, 2012 Budgetary Fund Balance, July 1 Resources (Inflows): Licenses and permits Intergovernmental Transfers in Amounts Available for Appropriation Charges to Appropriation (Outflow): Public works Capital outlay Total Charges to Appropriations Budgetary Fund Balance, June 30 78 Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) $ (37,061) $ (37,061) $ (37,061) $ - 118,450 118,450 - (118,450) 595,999 595,999 87,000 (508,999) 3,827,186 5,225,638 3,781,358 (1,444,280) 4,504,574 5,903,026 3,831,297 (2,071,729) - - 1,350,088 (1,350,088) 4,541,635 6,017,707 2,813,616 3,204,091 4,541,635 6,017,707 4,163,704 1,854,003 $__(3 7,061) $ (114,681) $ (332,407) $ (217,726) 78 CITY OF DIAMOND BAR BUDGETARY COMPARISON SCHEDULE PUBLIC FINANCING AUTHORITY YEAR ENDED JUNE 30, 2012 79 Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) Budgetary Fund Balance, July 1 $ 333,694 $ 333,694 $ 333,694 $ - Resources (Inflows): Use of money and property - - 20 20 Transfers in - 574,278 540,533 (33,745) Refinancing bonds issued - 11,790,000 11,790,000 - Bond premium - 252,381 252,381 - Amounts Available for Appropriation 333,694 12,950,353 12,916,628 (33,725) Charges to Appropriation (Outflow): Debt service: Principal retirement - 12,205,000 320,000 11,885,000 Interest and fiscal charges - 411,659 12,596,626 (12,184,967) Total Charges to Appropriations - 12,616,659 12,916,626 (299,967) Budgetary Fund Balance, June 30 $ 333,694 $ 333,694 $ 2 $ (333,692) 79 CITY OF DIAMOND BAR COMBINING STATEMENT OF NET ASSETS INTERNAL SERVICE FUNDS JUNE 30, 2012 0 Governmental Activities - Internal Service Funds Computer Equipment Equipment Self Insurance Replacement Replacement Fund Fund Fund Totals Assets: Current: Cash and investments $ 1,235,597 $ 216,840 $ 182,714 $ 1,635,151 Receivables: Accounts 17,977 - - 17,977 Total Current Assets 1,253,574 216,840 182,714 1,653,128 Noncurrent: Capital assets - net of accumulated depreciation - 21,022 375,398 396,420 Total Noncurrent Assets - 21,022 375,398 396,420 Total Assets $ 1,253,574 $ 237,862 $ 558,112 $ 2,049,548 Liabilities and Net Assets: Liabilities: Current: Accounts payable $ - $ - $ 109,532 $ 109,532 Total Current Liabilities - - 109,532 109,532 Total Liabilities - - 109,532 109,532 Net Assets: Invested in capital assets, net of related debt - 21,022 375,398 396,420 Unrestricted 1,253,574 216,840 73,182 1,543,596 Total Net Assets 1,253,574 237,862 448,580 1,940,016 Total Liabilities and Net Assets $ 1,253,574 $ 237,862 $ 558,112 $ 2,049,548 0 CITY OF DIAMOND BAR COMBINING STATEMENT OF REVENUES, EXPENSES AND CHANGES IN FUND NET ASSETS INTERNAL SERVICE FUNDS YEAR ENDED JUNE 30, 2012 81 Governmental Activities - Internal Service Funds Computer Equipment Equipment Self Insurance Replacement Replacement Fund Fund Fund Totals Operating Revenues: Miscellaneous $ 17,977 $ - $ - $ 17,977 Total Operating Revenues 17,977 - - 17,977 Operating Expenses: Insurance premiums 444,517 - - 444,517 Depreciation expense - 6,153 43,970 50,123 Total Operating Expenses 444,517 6,153 43,970 494,640 Operating Income (Loss) (426,540) (6,153) (43,970) (476,663) Nonoperating Revenues (Expenses): Interest revenue 7,767 1,689 2,287 11,743 Total Nonoperating Revenues (Expenses) 7,767 1,689 2,287 11,743 Income (Loss) Before Transfers (418,773) (4,464) (41,683) (464,920) Transfers in 409,112 - - 409,112 Changes in Net Assets (9,661) (4,464) (41,683) (55,808) Net Assets: Beginning of Year, as originally reported 993,847 242,326 490,263 1,726,436 Restatements 269,388 - - 269,388 Beginning of Fiscal Year, as restated 1,263,235 242,326 490,263 1,995,824 End of Fiscal Year $ 1,253,574 $ 237,862 $ 448,580 $ 1,940,016 81 CITY OF DIAMOND BAR COMBINING STATEMENT OF CASH FLOWS INTERNAL SERVICE FUNDS YEAR ENDED JUNE 30, 2012 Cash Flows from Operating Activities: Insurance premiums Payments to suppliers Governmental Activities - Internal Service Funds Computer Self Equipment Equipment Insurance Replacement Replacement Fund Fund Fund Totals $ (443,144) $ - $ - $ (443,144) 109,532 109,532 Net Cash Provided (Used) by Operating Activities (443,144) - 109,532 (333,612) Cash Flows from Non -Capital Financing Activities: Cash transfers in 409,112 Net Cash Provided (Used) by Non -Capital Financing Activities Cash Flows from Capital and Related Financing Activities: Acquisition and construction of capital assets Net Cash Provided (Used) by Capital and Related Financing Activities Cash Flows from Investing Activities: Interest received Net Cash Provided (Used) by Investing Activities Net Increase (Decrease) in Cash and Cash Equivalents Cash and Cash Equivalents at Beginning of Year Cash and Cash Equivalents at End of Year Reconciliation of Operating Income to Net Cash Provided (Used) by Operating Activities: Operating income (loss) Adjustments to reconcile operating income (loss) net cash provided (used) by operating activities: Depreciation (Increase) decrease in accounts receivable (Increase) decrease in prepaid expense Increase (decrease) in accounts payable Total Adjustments Net Cash Provided (Used) by Operating Activities 409,112 409,112 - - 409,112 (333,716) (333,716) (333,716) (333,716) 7,767 1,689 2,287 11,743 7,767 1,689 2,287 11,743 (26,265) 1,689 (221,897) (246,473) 1,261,862 215,151 404,611 1,881,624 $ 1,235,597 $ 216,840 $ 182,714 $ 1,635,151 $ (426,540) $ (6,153) $ (43,970) $ (476,663) 6,153 43,970 50,123 (17,977) - - (17,977) 1,373 - - 1,373 - - 109,532 109,532 (16,604) 6,153 153,502 143,051 $ (443,144) $ - $ 109,532 $ (333,612) 82 DESCRIPTION OF STATISTICAL SECTION CONTENTS June 30, 2012 This part of the City of Diamond Bar'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: Schedules Financial Trends — These schedules contain trend information to help the reader understand how the city's financial performance and well-being have changed over time. 1 - 4 Revenue Capacity — These schedules contain information to help the reader assess the city's most significant local revenue source, the property tax. 5 - 8 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 9-11 issue additional debt in the future. 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. 12-14 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. 15-16 83 Governmental activities: Invested in capital assets, net of related debt(1) Restricted for: Capital projects Community development Public safety Public works Debt service Unrestricted Total governmental activities net assets City of Diamond Bar Net Assets by Component Last Ten Fiscal Years (accrual basis of accounting) Fiscal Year Ended June 30, 2003 2004 2005 2006 2007 $ 8,237,553 $ 10,844,807 $ 10,692,694 $ 14,593,935 $ 375,216,400 5,988,178 241,767 3,775,552 3,323,474 3,446,872 1,398,057 1,296,806 1,013,495 245,763 243,697 321,747 26,205,849 31,231,827 29,775,169 29,461,178 34,072,884 $40,431,580 $ 42,318,401 $ 45,887,235 $ 48,919,090 $ 414,071,398 Note: The City implemented GASB 34 for the fiscal year ended June 30, 2003. Information prior to the implementation of GASB 34 is not available. As allowed by GASB 34, the value of infrastructure placed in service prior to July 1, 2002 was not included in the net assets until the fiscal year ended June 30, 2007. 84 Schedule 1 2008 2009 2010 2011 2012 $ 370,949,296 $ 367,529,907 $ 377,940,738 $ 381,985,940 $ 382,347,901 2,912,276 3,526,991 2,260,872 146,567 163,603 889,176 568,280 725,667 1,644,861 958,293 541,482 559,920 453,730 285,508 3,636,487 3,504,339 309,533 305,915 319,815 333,694 2 36,236,504 34,554,084 34,215,610 22,582,318 18,600,900 $ 411,296,785 $ 407,026,659 $ 416,022,622 $ 410,783,597 $ 405,860,546 85 Expenses: Governmental activities: General government Public safety Highways and streets Community development Parks, recreation and culture Interest on long-term debt Total general revenues Program revenues: Governmental activities: Charges for services General Government Public safety Highways and streets Community development Parks, recreation and culture Operating grants and contributions Capital grants and contributions Total governmental activities program revenues General revenues: Taxes Property taxes Transient occupancy taxes Sales taxes Franchise taxes Other taxes Unrestricted Motor vehicle in lieu Use of money and property Other revenues Total general revenues Change in net assets Prior year restatement of net assets Net assets at end of year City of Diamond Bar Changes in Net Assets Last Ten Fiscal Years (accrual basis of accounting) Fiscal Year Ended June 30, 2003 2004 2005 2006 2007 $ 3,315,082 $ 3,713,530 $ 3,997,319 $ 4,203,123 $ 4,784,314 4,988,449 4,875,823 4,969,183 5,418,005 4,876,435 1,006,768 1,365,737 4,622,014 5,240,568 14,019,550 3,370,116 5,724,606 1,050,025 2,759,718 2,292,757 2,309,150 2,580,454 3,814,887 3,737,071 4,779,588 535,752 171,223 270,735 423,320 498,042 15,525,317 18,431,373 18,724,163 21,781,805 31,250,686 74,805 225,656 486,925 707,272 262,541 813,617 733,902 1,159,264 1,277,170 1,512,195 517,930 529,330 1,328,637 1,555,993 3,493,798 908,330 933,985 7,888 16,841 21,297 558,227 610,772 1,147,088 1,260,849 1,385,788 4,390,722 4,068,446 4,040,785 5,281,308 6,968,824 1,779,510 261,994 1,150 1,254,314 9,043,141 7,364,085 8,170,587 10,100,583 14,898,757 2,727,712 2,717,949 3,191,006 3,555,244 3,754,955 578,680 628,564 717,879 718,889 774,757 2,965,292 3,167,901 3,508,341 3,949,349 3,943,345 828,242 912,531 941,319 996,567 1,064,621 367,638 367,464 413,247 416,423 331,096 3,370,387 2,716,134 4,386,800 3,663,061 4,356,641 439,455 182,069 532,091 1,051,922 1,476,010 84,795 250,250 676,292 361,622 41,362 11,362,201 10,942,862 14,366,975 14,713,077 15,742,787 4,880,025 (124,426) 3,813,399 3,031,855 (609,142) $ 4,880,025 $ (124,426) $ 3,813,399 $3,031,855 $ (609,142) Note: The City implemented GASB 34 for the fiscal year ended June 30, 2003. Information prior to the implementation of GASB 34 is not available. Source: City Finance Department 0 Schedule 2 2008 2009 2010 2011 2012 $ 4,473,666 $ 5,159,300 $ 4,973,685 $ 6,370,986 $ 6,384,072 4,944,729 5,396,083 5,526,099 5,591,049 6,104,982 12,034,669 13,931,211 12,287,325 10,619,860 11,248,137 2,251,196 1,959,303 1,624,547 1,969,540 2,126,906 5,188,977 4,950,687 5,091,215 5,153,264 5,559,427 392,548 177,633 57,948 72,592 848,976 29,285,785 31,574,217 29,560,819 29,777,291 32,272,500 225,553 132,262 131,633 118,016 247,248 1,176,931 1,017,336 1,014,237 996,409 1,050,851 2,851,187 1,732,985 2,070,167 2,400,272 2,555,900 23,351 17,602 21,106 517,515 447,951 1,581,597 1,705,282 1,754,789 1,829,409 1,753,585 4,307,074 5,588,818 4,358,895 3,685,378 4,992,856 219,193 2,272,580 15,960,279 40,779 1,242,636 10,384,886 12,466,865 25,311,106 9,587,778 12,291,027 3,927,073 4,001,276 3,837,288 4,187,896 3,951,722 800,390 633,075 569,916 642,509 692,162 4,102,177 3,085,223 3,122,229 3,355,127 3,397,259 1,024,710 1,093,039 1,115,980 1,259,471 1,415,924 283,433 199,365 259,384 172,687 202,951 4,563,127 4,687,515 4,599,922 4,766,225 4,646,985 1,420,988 833,270 618,963 474,598 145,408 4,388 304,463 7,090 91,975 46,342 16,126,286 14,837,226 14,130,772 14,950,488 14,498,753 (2,774,613) (4,270,126) 9,881,059 (5,239,025) (5,482,720) 559,669 $ (2,774,613) $ (4,270,126) $ 9,881,059 $ (5,239,025) $(4,923,051) 87 City of Diamond Bar Fund Balances of Governmental Funds Last Ten Fiscal Years (modified accrual basis of accounting) Total all other governmental funds 14,018,456 6,896,895 6,498,307 5,148,389 4,366,089 Total fund balances $ 36,372,082 $ 29,560,397 $ 32,433,946 $ 31,562,005 $ 34,827,639 2011 2012 Fiscal Year Ended June 30, 2003 2004 2005 2006 2007 General fund: $ 28,114 Committed to: Emergency contingencies Reserved $ 440,407 $ 866,843 $ 1,125,918 $ 1,310,172 $ 1,893,287 Unreserved 21,913,219 21,796,659 24,809,721 25,103,444 28,568,263 Total general fund 22,353,626 22,663,502 25,935,639 26,413,616 30,461,550 All other governmental funds: Public safety 453,730 285,508 Highways and streets 3,271,595 Reserved 5,719,861 105,861 5,555,988 2,274,829 3,311,451 Unreserved, reported in: Unassigned - (333,932) Total all other governmental funds Special revenue funds 8,030,278 6,043,352 6,111,202 5,485,933 5,736,366 Debt Service Fund 505,915 274,426 Capital projects funds 268,317 241,767 (5,443,309) (2,612,373) (4,681,728) Total all other governmental funds 14,018,456 6,896,895 6,498,307 5,148,389 4,366,089 Total fund balances $ 36,372,082 $ 29,560,397 $ 32,433,946 $ 31,562,005 $ 34,827,639 Note: The City implemented GASB 54, titled "Fund Balance Reporting and Governmental Fund Type Definitions" as of the fiscal year ended June 30, 2011. Source: City Finance Department 0 2011 2012 General fund: Nonspendable: Prepaid costs $ 41,451 $ 28,114 Committed to: Emergency contingencies 4,500,000 4,500,000 Unassigned 16,726,964 12,616,200 Total general fund 21,268,415 17,144,314 All other governmental funds: Restricted for: Comm development projects 1,644,861 958,293 Public safety 453,730 285,508 Highways and streets 3,271,595 3,504,339 Capital Projects 146,567 164,867 Debt service 333,694 2 Unassigned - (333,932) Total all other governmental funds 5,850,447 4,579,077 Total fund balances $ 27,118,862 $ 21,723,391 Note: The City implemented GASB 54, titled "Fund Balance Reporting and Governmental Fund Type Definitions" as of the fiscal year ended June 30, 2011. Source: City Finance Department 0 Schedule 3 2008 2009 2010 $ 1,864,387 $ 1,612,181 $ 1,955,477 31,065,127 30,041,357 28,841,621 32,929,514 31,653,538 30,797,098 5,810,250 2,754,526 1,735,077 4,955,552 5,423,979 5,218,642 (5,703,854) (2,701,642) (2,020,782) 5,061,948 5,476,863 4,932,937 $ 37,991,462 $ 37,130,401 $ 35,730,035 : City of Statistical Changes in Fund Balances, Governmental Funds Last Ten Fiscal Years (modified accrual basis of accounting) Revenues: Taxes Special assessments Intergovernmental Charges for services Fines and forfeitures Licenses and permits Investment income Other Total revenues Expenditures: Current: General government Public safety Highway and streets Parks, recreation and culture Community development Capital outlay Debt service: Principal retirement Interest and fiscal charges Total expenditures Excess (deficiency) of revenues over (under) expenditures Other financing sources (uses): Bond issued or refinancing Bonds discount or premium Transfers in Transfers out Total other financing sources (uses) Net changes in fund balances Debt service as a percentage of noncapital expenditures Fiscal Year Ended June 30, 2003 2004 2005 2006 2007 $ 7,432,575 $ 7,759,331 $ 8,632,837 $ 9,508,757 $ 9,876,760 557,601 555,232 593,778 504,908 541,382 8,602,856 6,353,152 8,306,557 8,821,141 11,169,052 706,137 709,011 761,040 870,314 1,002,210 813,617 733,903 713,201 589,922 546,902 1,467,127 1,457,345 1,732,555 2,389,149 4,247,626 658,922 395,929 654,066 1,250,570 1,716,194 74,818 234,951 480,740 792,216 767,457 20,313,653 18,198,854 21,874,774 24,726,977 29,867,583 3,163,516 3,663,055 3,787,005 3,551,659 4,402,235 4,973,248 4,857,179 4,954,630 5,404,259 4,880,290 1,006,768 1,365,737 4,301,146 4,769,497 5,114,274 1,946,025 2,114,090 2,750,815 2,613,834 3,475,549 2,808,613 3,419,856 1,050,025 2,748,539 2,292,757 8,057,482 9,261,289 1,682,830 5,320,597 5,344,935 235,000 240,000 1,167,502 145,580 237,487 404,075 493,840 23,123,154 24,826,786 18,763,938 25,047,460 26,243,880 (2,809,501) (6,627,932) 3,110,836 (320,483) 3,623,703 13,755,000 (769,300) 10,259,848 9,906,970 2,363,367 6,469,523 6,030,764 (10,453,243) (10,090,723) (2,600,654) (6,733,961) (6,354,106) 12,792,305 (183,753) (237,287) (264,438) (323,342) $ 9,982,804 $ (6,811,685) $ 2,873,549 $ (584,921) $ 3,300,361 7.29% 0.82% 1.38% 3.18% 2.91% The City has elected to show only nine years of data for this schedule. Source: City Finance Department a Schedule 4 2008 2009 2010 2011 2012 $ 10,165,881 $ 9,119,375 $ 8,591,893 $ 9,646,883 $ 9,664,801 543,561 550,822 556,989 556,562 547,209 9,896,948 12,081,466 11,478,456 9,441,959 11,053,326 1,111,655 1,460,828 3,191,416 3,390,367 3,190,675 637,484 601,533 607,936 567,575 509,166 3,121,476 1,445,324 640,287 818,913 1,127,569 1,629,257 938,053 648,503 499,377 183,507 826,177 1,018,956 30,766 113,578 54,634 27,932,439 27,216,357 25,746,246 25,035,214 26,330,887 3,987,656 5,071,860 4,435,858 4,977,021 5,485,001 4,933,958 5,407,476 5,524,279 5,580,507 5,731,595 4,926,418 5,607,870 5,183,964 5,002,456 6,609,087 3,714,762 3,673,282 3,655,029 3,712,194 4,090,551 2,246,496 1,945,951 1,604,220 1,960,125 2,114,433 4,271,890 5,508,167 5,161,924 11,480,595 6,702,615 255,000 265,000 280,000 290,000 320,000 411,583 187,212 33,904 37,461 12,596,626 24,747,763 27,666,818 25,879,178 33,040,359 43,649,908 3,184,676 (450,461) (132,932) (8,005,145) (17,319,021) 11,790,000 252,381 7,266,149 6,629,225 4,379,718 2,929,528 6,085,337 (7,608,749) (7,039,825) (4,795,374) (3,535,556) (6,494,449) (342,600) (410,600) (415,656) (606,028) 11,633,269 $ 2,842,076 $ (861,061) $ (548,588) $ (8,611,173) $ (5,685,752) 2.89% 1.77% 1.35% 1.45% 2.80% 91 THIS PAGE INTENTIONALLY LEFT BLANK W" Net Assessed Value 8,000,000,000 7,000,000,000 6,000,000,000 5,000,000,000 0 4,000,000,000 3,000,000,000 2,000,000,000 1,000,000,000 0 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12 Fiscal Year Exempt values are not included in Total Net Taxable Values. 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. * Prior to 2007, all SBE Nonunitary Railroad Properties were taxed at the tax rate area level. As of 2007, there was legislation passed that requires Counties to track this value for the each county in a specific tax rate area and it's distributed differently. Therefore from this year forward, Cities can no longer keep tracking how much value there is on railroad properties within each City. Source: HDL Coren & Cone and Los Angeles County Auditor/Controller-Property Tax Division. 93 Schedule 5 City of Diamond Bar Assessed and Estimated Actual Values of Taxable Property 2002/03 - 2011/12 Taxable Property Values (unaudited) Fiscal Year Real Property Less Total Taxable Total Ended Secured Unsecured Other Tax Assessed Direct June 30, Property Property Property Exemptions Value Tax Rate % Change 2002-03 4,662,888,926 69,981,865 122,697 44,188,829 4,688,804,659 0.05122 7.60% 2003-04 5,051,058,871 77,407,924 140,122 47,621,182 5,080,985,735 0.05134 8.36% 2004-05 5,410,300,487 76,173,121 174,846 39,831,091 5,446,817,363 0.05313 7.20% 2005-06 5,842,972,449 83,223,023 163,090 51,408,286 5,874,950,276 0.05288 7.86% 2006-07 6,359,723,846 90,751,985 134,088 28,682,577 6,421,927,342 0.05280 9.31% 2007-08 6,824,177,817 109,704,881 0 39,859,238 6,894,023,460 0.05485 7.35% 2008-09 7,151,359,322 99,170,064 0 48,909,164 7,201,620,222 0.05270 4.46% 2009-10 7,071,193,381 90,528,493 0 66,422,679 7,095,299,195 0.05274 -1.48% 2010-11 7,183,008,793 81,410,401 0 70,706,628 7,193,712,566 0.05270 1.39% 2011-12 7,347,032,537 77,283,606 0 74,296,191 7,350,019,952 0.05268 2.17% Net Assessed Value 8,000,000,000 7,000,000,000 6,000,000,000 5,000,000,000 0 4,000,000,000 3,000,000,000 2,000,000,000 1,000,000,000 0 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12 Fiscal Year Exempt values are not included in Total Net Taxable Values. 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. * Prior to 2007, all SBE Nonunitary Railroad Properties were taxed at the tax rate area level. As of 2007, there was legislation passed that requires Counties to track this value for the each county in a specific tax rate area and it's distributed differently. Therefore from this year forward, Cities can no longer keep tracking how much value there is on railroad properties within each City. Source: HDL Coren & Cone and Los Angeles County Auditor/Controller-Property Tax Division. 93 City of Diamond Bar Direct and Overlapping Property Tax Rates (Rate per $100 of Assessed Value) Agency 2002/03 2003/04 2004/05 2005/06 2006/07 2007/08 2008/09 Basic Levy* 1.00000 1.00000 1.00000 1.00000 1.00000 1.00000 1.00000 County Detention Facilities 1987 Debt 0.00103 0.00099 0.00092 0.00080 0.00066 0.00000 0.00000 LA County Flood Control 0.00088 0.00046 0.00025 0.00005 0.00005 0.00000 0.00000 Metropolitan Water District 0.00670 0.00610 0.00580 0.00520 0.00470 0.00450 0.00430 Mt. San Antonio College 0.01946 0.01525 0.01473 0.02122 0.02530 0.01750 0.02333 Pomona Unified School Dist 0.12342 0.12633 0.12910 0.12488 0.12401 0.11379 0.11577 Pomona Unified School Dist 2008 Series C 0.00000 0.00000 0.00000 0.00000 0.00000 0.00000 0.00000 Rowland Heights Unified 0.03618 0.03780 0.03885 0.03633 0.07429 0.06944 0.07029 Walnut Valley Unified School Dist 0.10086 0.09660 0.09515 0.09140 0.08749 0.08462 0.11297 Total Direct & Overlapping Tax Rates 1.2885 1.2835 1.2848 1.2799 1.3165 1.2899 1.3267 City's Share of 1% Levy Per Prop 13* 0.05192 0.05192 0.05192 0.05192 0.05192 0.05192 0.05192 General Obligation Debt Rate Redevelopment Rate* Total Direct Rate* 0.05122 0.05134 0.05313 0.05288 0.05280 0.05485 0.05270 * In 1978, California voters passed Proposition 13 which sets the property tax rate at a 1.00% fixed amount. This 1.00% is shared by all taxing agencies for which the subject property resides within. In addition to the 1.00% fixed amount, property owners are charged taxes as a percentage of assessed property values for the payment of any voter approved bonds for the Pomona Unified School District or Walnut Valley Unified School Districts in Diamond Bar depending on which school district the property is located in. Overlapping rates are those of local and county governments that apply to property owners within the City. Not all overlapping rates apply to all city property owners. RDA rate is based on the largest RDA tax rate area(TRA) and includes only rate(s) from indebtedness adopted prior to 1989 per California State statute. RDA direct and overlapping rates are applied only to the incredmental property values. Total Direct Rate is the weighted average of all individual direct rates applied by the government preparing the statistical section information. Source: Hdl Coren & Cone 94 Schedule 6 2009/10 2010/11 2011112 1.00000 1.00000 1.00000 0.00000 0.00000 0.00000 0.00000 0.00000 0.00000 0.00430 0.00370 0.00370 0.02571 0.02636 0.02642 0.14546 0.17721 0.14943 0.00000 0.00000 0.02421 0.06769 0.07538 0.09195 0.11674 0.11839 0.11735 1.3599 1.4010 1.4131 0.05192 0.05192 0.05192 0.05274 0.05270 0.05268 95 Source: Hdl Coren & Cone. Schedule 7 City of Diamond Bar Top 10 Property Taxpayers Current Year and Nine Years Ago 2011-12 Percentage of Total Current Taxpayers Assessed Valuation Net Assessed Valuation Diamond Bar Gateway Corp Inc 43,000,000 0.59% Country Hills Holding LLc 42,924,926 0.58% VIF II Hampton At Diamond Bar LLC 38,117,493 0.52% CRP 2 Holdings CC LP 32,100,000 0.44% Target Corporation 28,496,911 0.39% Muller Rock 2 Gateway 25,121,402 0.34% Diamond Bar Income PTRS Holding 23,200,000 0.32% Hua Qing Enterprises LLC 18,135,540 0.25% Gateway Corporate Center LP 17,600,000 0.24% Margaret M. Tam Trust 17,322,689 0.24% Top Ten Total 286,018,961 3.89% City Total 7,350,019,952 2002-03 Percentage of Total Taxpayers Nine Years Ago Assessed Valuation Net Assessed Valuation Opus Real Estate California IV LP $29,026,987 0.62% Gem Gateway Limited 22,961,205 0.49% IRP Muller Associates LLC 22,497,606 0.49% 1022 South Grand Avenue Apartments 22,204,350 0.47% M & H Realty Partners II 20,704,210 0.44% Bridge Gate Partners LP 17,255,488 0.37% Martin Brattrud Properties 15,912,261 0.34% H R Barros Family LP 14,220,178 0.30% Shea Homes LP 12,476,192 0.27% Lakeview Village Corporation 12,369,028 0.26% Top Ten Total 189,627,505 4.04% City Total 4,688,804,659 Source: Hdl Coren & Cone. City of Diamond Bar Property Tax Levies and Collections Last Ten Fiscal Years (unaudited) Fiscal Year Taxes Levied Collected within the Collections in Ended for the Fiscal Year of Levy Subsequent June 30 Fiscal Year Amount % to Levy Years % to Levy 2003 2,474,222 2,376,390 96.05% 97,831 3.95% 2004 2,699,991 2,584,106 95.71% 115,884 4.29% 2005 2,870,810 2,739,911 95.44% 130,899 4.56% 2006 3,107,457 2,800,968 90.14% 306,489 9.86% 2007 3,378,087 3,116,729 92.26% 261,359 7.74% 2008 3,582,055 3,260,073 91.01% 321,981 8.99% 2009 3,781,997 3,458,210 91.44% 323,786 8.56% 2010 3,715,310 3,424,173 92.16% 291,137 7.84% 2011 3,753,506 3,508,491 93.47% 245,015 6.53% 2012 3,864,514 3,527,109 91.27% 337,405 8.73% Source: Los Angeles County Auditor/Controller. City Finance Department 97 Schedule 8 City of Diamond Bar Schedule 9 Ratios of Outstanding Debt by Type Last Ten Fiscal Years Note: (a) Details regarding the City's outstanding lease revenue bonds can be found in the notes to the financial stateme (b) Details regarding the City's population and personal income can be found in the Demographic and Economic Statistics Table. Source: City Finance Department Governmental Activities Fiscal Year Lease Other Total Total % of Debt Ended Revenue Bond & Governmental Primary Personal Per June 30 Bonds (a) Loans Activities Government Income (b) Capita (b) 2003 13,755,000 0 13,755,000 13,755,000 0.88% 234 2004 13,755,000 0 13,755,000 13,755,000 0.84% 232 2005 13,655,000 0 13,655,000 13,655,000 0.79% 229 2006 13,520,000 0 13,520,000 13,520,000 0.74% 227 2007 13,280,000 0 13,280,000 13,280,000 0.70% 223 2008 13,025,000 0 13,025,000 13,025,000 0.68% 217 2009 12,760,000 0 12,760,000 12,760,000 0.68% 212 2010 12,480,000 0 12,480,000 12,480,000 0.64% 225 2011 12,190,000 0 12,190,000 12,190,000 0.66% 218 2012 11,470,000 0 11,470,000 11,470,000 Unavailable 205 Note: (a) Details regarding the City's outstanding lease revenue bonds can be found in the notes to the financial stateme (b) Details regarding the City's population and personal income can be found in the Demographic and Economic Statistics Table. Source: City Finance Department City of Diamond Bar Direct and Overlapping Debt June 30, 2012 (unaudited) Gross Bonded Debt Balance % Applicable To City (1) Schedule 10 Net Bonded Debt Direct Debt as of June 30, 2012 Diamond Bar Lease Revenue Bond $ 11,470,000 $ 100 $ 11,470,000 Overlapping Debts as of June 30, 2012 (2) 330.10 Metropolitan Water District 94,031,705 1 800,605 809.51 Mt San Antonio CCD 2001 Series 2004B 6,200,000 11 674,013 809.52 Mt San Antonio CCD 2005 & 2012 Refunding Bond 48,600,843 11 5,283,484 809.53 Mt San Antonio CCD 2001 Series C 2006 79,212,694 11 8,611,352 809.54 Mt San CD DS 2001, 2008 Series D 23,827,409 11 2,590,320 915.62 Pomona Unified School District 2000 Ser A 16,585,000 20 3,343,418 915.64 Pomona Unified SD Refunding 2001 Ser A 16,905,000 20 3,407,927 915.65 Pomona Unified SD 2002 Series A 350,000 20 70,557 915.66 Pomona Unified School District 2002 Ser B 505,000 20 101,804 915.67 Pomona Unified School District 2002 Ser C 490,000 20 98,780 915.68 Pomona Unified School District 2002 Ser D 12,620,000 20 2,544,102 915.69 Pomona Unified School District 2002 Ser E 11,800,000 20 2,378,796 915.70 Pomona Unified School DS 2007 & 2012 Ref Bds 65,573,334 20 13,219,116 915.71 Pomona Unified School District 2008 Series A 33,900,000 20 6,833,998 915.72 Pomona USD DS 2008 Series B 4,030,000 20 812,419 915.73 Pomona USD 2008 Series C 44,060,000 20 8,882,181 980.55 Walnut Valley Unified SD Refund Series 1997 A 19,707,718 59 11,722,402 980.59 Walnut Valley Unified SD 2000 Series D 13,195,243 59 7,848,699 980.60 Walnut Valley Unified USD DS 2000 Series E 6,001,837 59 3,569,969 980.61 Walnut Valley Unified SD 2005 Ref Bond 10,885,000 59 6,474,537 980.62 Walnut Valley Unified SD 2007 Series A (Measure S) 27,915,000 59 16,604,198 980.63 Walnut Valley Unified SD 2007 Series A (Measure Y) 6,715,887 59 3,994,695 980.64 Walnut Valley Unified SD 2011 Refunding 13,190,000 59 7,845,566 980.65 Walnut Valley USD 2007 Series B (Measure S) 19,996,838 59 11,894,353 980.66 Walnut Valley USD 2007 Series B (Measure Y) 7,990,547 59 4,752,871 Total Overlapping Debts: 584,289,055 134,360,162 Grand Total Direct and Overlapping Debt: $ 595,759,055 $ 145,830,162 Debt to Assessed Valuation Ratios as of June 30, 2012: 2011/12 Net Assessed Valuation: $ 7,350,019,952 Direct Debt 0.16% $205 2011 Total City Population: 55,819 Overlapping Debt 1.83% $2,407 Total Debt 1.98% $2,613 Note: (1) Percentage of direct and overlapping agency's assessed valuation located within boundaries of the city. (2) The overlapping debt is the portion of a larger agency, and is responsible for debt in areas outside the city. Source: Hdl Coren & Cone U.S. Census Bureau City Finance Department Fiscal Year Net assessed value Add back: Exemptions Gross assessed value Conversion percentage Adjusted assessed valuation Debt limit percentage Debt limit City Debts: Revenue bonds Legal debt margin Fiscal Year Net assessed value Add back: Exemptions Gross assessed value Conversion percentage Adjusted assessed valuation Debt limit percentage Debt limit City Debts: Revenue bonds Legal debt margin Schedule 11 City of Diamond Bar Computation of Legal Debt Margin Last Ten Fiscal Years (unaudited) 2003 2004 2005 2006 2007 $ 4,688,804,659 $ 5,080,985,735 $ 5,446,817,363 $ 5,874,950,276 $ 6,421,927,342 44,188,829 47,621,182 39,831,091 51,408,286 28,682,577 4,732,993,488 5,128,606,917 5,486,648,454 5,926,358,562 6,450,609,919 25% 25% 25% 25% 25% 1,183,248,372 1,282,151,729 1,371,662,114 1,481,589,641 1,612,652,480 15% 15% 15% 15% 15% 177,487,256 192,322,759 205,749,317 222,238,446 241,897,872 13, 755, 000 13, 755, 000 13, 755, 000 13, 520, 000 13, 280, 000 $ 163,732,256 $ 178,567,759 $ 191,994,317 $ 208,718,446 $ 228,617,872 2008 2009 2010 2011 2012 $ 6,894,023,460 $ 7,201,620,222 $ 7,095,299,195 $ 7,193,712,566 $ 7,350,019,952 39,859,238 48,909,164 66,422,679 70,706,628 74,296,191 6,933,882,698 7,250,529,386 7,161,721,874 7,264,419,194 7,424,316,143 25% 25% 25% 25% 25% 1,733,470,675 1,812,632,347 1,790,430,469 1,816,104,799 1,856,079,036 15% 15% 15% 15% 15% 260,020,601 271,894,852 268,564,570 272,415,720 278,411,855 13,025,000 12,760,000 12,480,000 12,190,000 11,470,000 $ 246,995,601 $ 259,134,852 $ 256,084,570 $ 260,225,720 $ 266,941,855 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). The computations shown above reflect a conversion of assessed valuation data for each fiscal year from the current full valuation the 25% level that was in effect at the time that the legal debt margin was enacted by the State of California for local govern- ment located within the state. Source: Section 43605 of the California Government Code Hdl Coren & Cone City Finance Department 100 Schedule 12 City of Diamond Bar Demographic and Economic Statistics General Information Date of Incorporation April 18, 1989 Form of Government Council -Manager Area 14.76 Square Miles Miles of Streets 128 Public Safety Police Protection Los Angeles County Sheriff Department Fire Protection Los Angeles County Fire Department Water Services Service Provider Walnut Valley Water District Education School District Pomona Unified School District Schools 1 High School, 1 Middle School, & 4 Elementary Schools School District Walnut Valley Unified School District Schools 1 High School, 2 Middle Schools, & 4 Elementary Schools Demographic and Statistical Information (Last Ten Calendar Years) Sources: U.S. Census Bureau HdL Cornen & Cone City Finance Department 101 Personal Per Capita Pop 25+ Pop 25+ Calendar Income Personal Unemployment Median High School Bachelor Year Population (In Thousands) Income Rate Age Degree Degree 2001 57,032 1,468,388 25,747 4.00% 2002 58,035 1,499,464 25,837 4.80% 2003 58,843 1,555,942 26,442 4.90% 2004 59,304 1,642,869 27,702 4.60% 2005 59,528 1,721,421 28,918 3.80% 2006 59,497 1,827,966 30,724 3.40% 2007 59,629 1,903,585 31,924 3.60% 2008 59,920 1,929,498 32,201 5.30% 2009 60,184 1,885,698 31,332 8.30% 39.2 93.1% 46.7% 2010 55,766 1,960,418 35,154 9.10% 39.8 92.0% 47.6% 2011 55,819 1,846,158 33,074 8.80% 40.5 92.5% 47.8% Sources: U.S. Census Bureau HdL Cornen & Cone City Finance Department 101 Schedule 13 City of Diamond Bar Principal Employers (unaudited) Current Fiscal Year and Nine Fiscal Years Ago Total 2,995 n/a Note: Total city employment 29,600 in 2012, provided by California Labor Market. Data Source: Info USA HdL, 102 2012 Number of Percent of Company Name Employees Rank Employment South Coast Air Quality Management 786 1 2.66% Walnut Valley Unified School District 520 2 1.76% Transcription Services 500 3 1.69% Travelers 401 4 1.35% Magan Medical Inc 300 5 1.01% Pomona Unified School District 210 6 0.71% Carrescia James -First Team Sns 200 7 0.68% Diamond Bar High School 200 8 0.68% First Team Real Estate 150 9 0.51% Baybrook Services Inc 120 10 0.41% Total 3,387 11.44% 2003 Number of % of City Company Name Employees Rank Employment South Coast Air Quality Management 725 1 n/a Avnet 600 2 n/a Acosta Sales & Marketing Group 450 3 n/a Automatic Data Processing 280 4 n/a Allstate Insurance Cc 200 5 n/a Diamond Bar High School 200 6 n/a Century 21 Diamond Realty 150 7 n/a Rosa Gastelum Century 21 150 8 n/a Goodrich Corp 120 9 n/a Starside Security & Investigation 120 10 n/a Total 2,995 n/a Note: Total city employment 29,600 in 2012, provided by California Labor Market. Data Source: Info USA HdL, 102 Schedule 14 City of Diamond Bar Full-time and Part-time City Government Employees by Function/Program Note: The City is a contract city and as such contracts for many of its services. This includes police services, fire services, building and safety services, engineering, road maintenance and landscape maintenance A full-time employee is scheduled to work 2,080 hours per year (including vacation and sick leave). Source: City Finance Department 103 Fiscal Year Ended June 30, Function 2003 2004 2005 2006 2007 General government 24 25 25 22 21 Community development 4 5 7 8 8 Community services 38 45 74 77 74 Public works 5 6 7 7 8 Total 71 81 113 114 111 Fiscal Year Ended June 30, Function 2008 2009 2010 2011 2012 General government 24 25 21 24 23 Community development 6 7 8 8 8 Community services 69 71 75 75 75 Public works 10 10 9 9 9 Total 109 113 113 116 115 Note: The City is a contract city and as such contracts for many of its services. This includes police services, fire services, building and safety services, engineering, road maintenance and landscape maintenance A full-time employee is scheduled to work 2,080 hours per year (including vacation and sick leave). Source: City Finance Department 103 Function Police: (1) Physical arrests Street Sweeping Parking Citation Fire: (2) Number of emergency calls Inspections Public works: (3) Street resurfacing (miles) Parks and recreation:(4) Number of recreation classes Number of facility rentals Function Police:(in fiscal year) (1) Physical arrests Street Sweeping Parking Citation Fire: (in fiscal year) (2) Number of emergency calls Inspections Public works: (in fiscal year) (3) Street resurfacing (miles) Parks and recreation:(in fiscal year)(4) Number of recreation classes(5) Number of facility rentals Schedule 15 City of Diamond Bar Operating Indicators by Function Last Ten Fiscal Years _ Fiscal Year Ended June 30, 2003 2004 2005 2006 2007 552 481 520 558 582 6,662 6,710 6,250 5,790 5,684 2,741 2,755 2,615 2,592 2,612 (a) 1,206 1,159 837 1,114 18.5 5.0 18.6 16.8 19.6 915 1,022 1,102 1,376 1,558 1,021 1,736 4,123 4,305 4,555 Fiscal Year Ended June 30, 2008 2009 2010 2011 2012 543 591 700 647 737 5,200 5,103 5,110 4,137 3,766 2,595 2,561 2,654 2,594 2,516 1,085 1,100 979 1,202 1,287 18.5 13.8 23.3 12.0 9.2 1,569 1,315 2,456 2,115 2,096 4,103 4,299 4,111 4,147 4,270 (a) Unavailable Sources: (1) Police WalnuVDiamond Bar Station (2) LA County Fire Dep East Regional Operation Bureau (3) City Public Works Department (4) City Community Services Department (5) Includes online classes Note: Indicators are not available for the general government function. 104 Schedule 16 City of Diamond Bar Capital Asset Statistics by Function Last Ten Fiscal Years Fiscal Year Ended June 30, Function 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 Public safety (1) Police: Station 1 1 1 1 1 1 1 1 1 1 Patrol units (all shifts combined) 20 20 20 19 19 18 18 18 18 18 Fire stations (2) 3 3 3 3 3 3 3 3 3 3 Highways and streets (3) Streets (miles) 128 128 128 128 128 128 128 129.4 129.4 129.4 Streetlights (a) (a) (a) (a) 233 233 233 294 294 294 Traffic signals (a) (a) (a) (a) 74 74 74 76 76 76 Culture and recreation:(4) Parks acreage (developed) 62.7 62.7 62.7 62.7 62.7 62.7 62.7 62.7 63.6 67.9 Parks acreage (undeveloped) 439.0 439.0 439.0 439.0 439.0 439.0 439.4 439.4 440.3 440.3 Parks 11 11 11 11 11 11 12 12 13 14 Public Tennis courts 8 8 8 8 8 8 8 8 8 8 Community centers 3 3 3 3 3 3 3 3 3 3 Golf Course:(5) County golf courses 1 Sewer (3) Sanitary sewers (miles) (a) 1 1 1 1 1 1 1 1 1 (a) (a) (a) 157 157 157 158.4 158.4 158.4 (a) The City fully implemented the new reporting model of the Infrastructure Valuation and Asset Management System i GASB 34 in FY2007. Sources: (1) Police Walnut/Diamond Bar Station (2) LA County Fire Department, Division VIII Office (3) City Public Works Department (4) City Community Services Department (5)LA County Golf Course Note: The City is a contract city and as such contracts for many of its services. This includes police services, fire services, building and safety services, engineering, road maintenance and landscape maintenance. No capital asset indicators are available for the general government function. 105 THIS PAGE INTENTIONALLY LEFT BLANK 110