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HomeMy WebLinkAboutCAFR - FY 1997-98CITY OF DIAMOND BAR Diamond Bar, California Comprehensive Annual Financial Report Year ended June 30, 1998 Prepared by FINANCE DEPARTMENT (This page intentionally left blank) CITY OF DIAMOND BAR Comprehensive Annual Financial Report Year ended June 30, 1998 TABLE OF CONTENTS EXHIBIT Page INTRODUCTORY SECTION: Letter of Transmittal i Officials of the City of Diamond Bar xii Organization Chart xiii Certificate of Award for Outstanding Financial Reporting (CSMFO) xiv Certificate of Achievement for Excellence in Financial Reporting (GFOA) xv 1_2 _IQ 'rAIL 4[*jjrAjf&jV '41 _NVML Independent Auditors' Report 1 General Purpose Financial Statements: • Combined Balance Sheet - All Fund Types and Account Groups AA 3 • Combined Statement of Revenues, Expenditures and Changes in Fund Balances - All Governmental Fund Types- BB 5 ® Combined Statement of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual - All Governmental Fund Types cc 6 ® Combined Statement of Revenues, Expenses and Changes in Retained Earnings - Proprietary Fund Type DD 8 ® Combined Statement of Cash Flows - Proprietary Fund Type EE 9 ® Notes to the Financial Statements 10 CITY OF DIAMOND BAR Comprehensive Annual Financial Report (Continued) TABLE OF CONTENTS, (CONTINUED) EXHIBIT Page Supplemental Data: General Fund: ® Comparative Balance Sheets A-1 29 • Revenue Detail - Budget and Actual A-2 30 ® Expenditure Detail - Budget and Actual A-3 31 Special Revenue Funds: ® Combining Balance Sheet B-1 34 ® Combining Statement of Revenues, Expenditures and Changes in Fund Balances B-2 36 • State Gas Tax Fund: Statement of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual B-3 38 ® Proposition A Transit Fund: Statement of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual B-4 39 ® Proposition C Transit Fund: Statement of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual B-5 40 ® Intermodal Surface Transportation Efficiency Act (ISTEA) Fund: Statement of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual B-6 41 CITY OF DIAMOND BAR Comprehensive Annual Financial Report (Continued) TABLE OF CONTENTS. (CONTINUED) • Integrated Waste Management Fund: Statement of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual ® State -Local Transportation Partnership Project Fund: Statement of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual ® Air Quality Improvement Fund: Statement of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual ® Bicycle and Pedestrian Fund: Statement of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual ® Park Fees Fund: Statement of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual ® Proposition A Safe Parks Fund: Statement of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual ® Park and Facility Development. Fund: Statement of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual ® Community Development Block Grant Fund: Statement of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual EXHIBIT Page B-7 42 B-8 43 B-9 44 B-10 45 B-11 46 B-12 47 B-13 .48 B-14 49 CITY OF DIAMOND BAR Comprehensive Annual Financial Report (Continued) TABLE OF CONTENTS, (CONTINUED) ® Citizens Option for Public Safety (COPS) Fund: Statement of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual ® Asset Seizure Fund: Statement of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual ® Landscape Maintenance Districts Funds: Statement of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual Capital Projects Funds: ® Combining Balance Sheet ® Combining Statement of Revenues, Expenditures and Changes in Fund Balances ® Grand Avenue Construction Fund: Statement of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual ® Capital Improvement Fund: Statement of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual ® Redevelopment Agency Fund: Statement of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual EXHIBIT . Page B-15 50 B-16 51 B-17 52 C-1 54 C-2 55 C-3 56 C-4 57 C-5 58 CITY OF DIAMOND BAR Comprehensive Annual Financial Report (Continued) TABLE OF CONTENTS. (CONTINUED) EXHIBIT Page Agency Fund: Deferred Compensation Fund: . Statement of Changes in Assets and Liabilities General Fixed Assets Account Group: ® Comparative Schedule of General Fixed Assets by Source ® Schedule of General Fixed Assets by Function and Activity ® Schedule of Changes in General Fixed Assets by Function and Activity D-1 60 E-1 62 E-2 63 E-3 64 Table No. STATISTICAL SECTION: General Governmental Expenditures by Function 1 General Governmental Revenues by Source 2 Secured Property Tax Levies and Collections 3 Assessed and Estimated Actual Values of Taxable Property 4 Property Tax Rates - All Direct and Overlapping Governments 5 Principal Taxpayers 6 Computation of Legal Debt Margin 7 Computation of Direct and Overlapping Debt 8 Schedule of Insurance in Force 9 Demographic and Miscellaneous Statistical Information 10 Residential and Commercial Construction 11 Ratio - Unreserved General Fund Balance to Annual General Fund Expenditures 12 j Schedule of Credits 13 65 66 67 68 69 70 71 72 73 74 75 76 77 (This page intentionally left blank) 21660 E. Copley Drive, Suite 100 - Diamond Bar, CA 91765-4177 (909) 860-2489 • Fax (909) 861-3117 Internet: http://www.ci.diamond-bar.ca.us - City Online (BBS): (909) 860-5463 November 19, 1998 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, 1998. Responsibility for both the accuracy of the presented data and the completeness and fairness of the presentation, including all disclosures, rests with the City. We believe the data presented is accurate in all material respects; that it is presented in a manner designed to fairly set forth the financial position and results of operations of the City as measured by the financial activity of its various funds and account groups; and that all disclosures necessary to enable the reader to gain a full understanding of the City's financial affairs have been included. The Comprehensive Annual Financial Report (CAFR) is presented in three Carol Herrera sections; introductory, financial and statistical. The introductory section includes Mayor this transmittal letter, the City's organizational chart and a list of principal officials. The financial section includes general purpose financial statements and schedules, Wen Chang Mayor Pro Tem the independent auditor's report, and the notes to the financial statements. The statistical section includes selected financial and demographic information on a Eileen R. Ansari multi-year basis. Council Member In addition to the financial audit, the City is legally required to also conduct an Robert S. Huff Council Member annual single audit in conformity with the provisions of the Single Audit Act of 1984 and the US Office of Management and Budget Circular A-133, Audits of Deborah H. O'Connor States, Local Governments. and Non -Profit Organizations Information related to Council Member this single audit, including the schedule of federal financial assistance, findings and recommendations, and auditors' reports on the internal control structure and compliance with applicable laws and regulations, are not included with this report and are issued as a separate .document. _i_ Recycled paper 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, 1997. 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, whose contents 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 three consecutive years (fiscal years ended 1995, 1996, and 1997). We believe our current report continues to conform to the Certificate of Achievement program requirements, and we are submitting it to GFOA. The City of Diamond Bar has also been awarded the Certificate of Award for Outstanding Financial Reporting by the California Society of Municipal Finance Officers for its comprehensive annual financial report for the last three consecutive years. REPORTING ENTITY AND ITS SERVICES This Comprehensive Annual Financial Report includes all funds and account groups 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 City with a high degree of flexibility in responding to changing economic conditions. Contracted services include police protection, building and safety, street maintenance, recreation services, park maintenance, capital improvement projects, animal control, attorney services and engineering. Staff provided services include customer service, community development (which includes planning, building and safety management, and code enforcement), public works (which includes engineering, capital projects administration, street maintenance contract management, traffic and transportation matters, engineering contract management, and subsidized transit ticket sales), community services (which includes senior services, park maintenance, recreation contract management and landscape maintenance), economic development, redevelopment, community relations, grant administration, financial management and administrative management. All of these activities are included in this report. Fire protection is provided by the Los Angeles County Fire District which is independent of the City. Funds are collected through property tax bills and are disbursed directly to the 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. Located at the junction of the 57 and 60 freeways, 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 and an 18 hole public golf course. During the past couple of years, the City of Diamond Bar's economy has seen a slight improvement. This fiscal year was no exception as illustrated by stable sales tax revenues, new business starts and a slight reduction in office vacancy rates. In addition, this year saw the commencement of construction of two large previously approved residential projects consisting of 157 high quality upper scale homes. This, in addition to several new business commitments, is a signal that the economy in Diamond Bar is improving and will continue to grow. The -City's Community Redevelopment Agency saw the adoption of the Economic Revitalization Project Area. By investing in the community, the Redevelopment Agency is working to remove blighting conditions within the city's commercial areas and to improve traffic flow on the City's major thoroughfares. For the Year. In the FY97-98 budget, the City of Diamond Bar identified several major programs and projects necessary to meet increased service levels and to prepare the City for the future requirements of its residents. The following is a list of the significant activities which were accomplished this fiscal year. j The City Council pledged to improve communications with all citizens and seek out public input on several key projects and issues. Advisory task forces on off-site parking and trash collection were formed. These groups held several meetings throughout the year and subsequently submitted their recommendations to the City Council for review and possible action. -m- The City's Capital Improvement Program for FY 97-98 included several street rehabilitation projects. These included Diamond Bar Boulevard from Grand to the northerly City limits, Brea Canyon Road from Pathfinder to the southerly City limits, and Pathfinder Road. The Diamond Bar Community Redevelopment Agency awarded contracts for the design of five potential street improvement projects located on major thoroughfares through out the redevelopment project area. It is anticipated that these projects will be done in the near future. Transportation and traffic continue to be major sources of concern for the City. The City has continued its popular transit subsidy and Dial -a -Cab programs. The transit subsidy program offers a 20% to 50% discount to citizens on transit passes for Foothill Transit, Metrolink, and the MTA. The other extremely popular program implemented by the City is the Dial -a -Cab program which offers senior and handicapped citizens taxicab transportation at a nominal rate. To encourage citizens to commute via car pool or bus, the City also participated in the expansion of one of the City's two park and ride lots. All of these programs have been funded by Proposition A Transit Funds. The City has implemented an ongoing traffic signal program, which is designed to place signals at several warranted locations throughout the community. Traffic signals installed this year include Golden Springs Boulevard at the intersections of Calbourne, Goldrush and Palomino and Diamond Bar Boulevard at Montefino and Quail Summit. In addition, the Diamond Bar Community Redevelopment Agency funded warrant studies of fifteen additional possible signal locations within the Redevelopment project area. In its continuing effort to serve the citizens of Diamond Bar, the City has been striving to improve and enhance recreational opportunities within the City. On that note, after several years of planning and design, in FY 96-97, the City Council awarded a contract for the construction of a new park, Pantera Park. This FY 97-98 saw the completion of this wonderful new park facility. The 23.8 acre park features two softball fields, two soccer fields, three lighted basketball courts, two tennis courts, concession/meeting room facilities, a tot lot and several picnic areas. Funding for this new addition was provided through a combination of developer mitigation fees, Quimby Park Fees, funding provided through the Los Angeles County's Proposition A -Safe Neighborhood Parks Act and the General Fund. Pantera Park was officially opened to public at its Grand Opening which was held on July 25, 1998. The City continued its implementation of an aggressive economic development program. The mainstay of this program has been the marketing of Diamond Bar. The City has and will continue to participate in trade shows in an effort to draw attention to the opportunities which abound. In addition, another marketing tool being used is the City's Internet World Wide Web site. The web site has a vast amount of useful information about the City, ranging from a community calendar to a site selection area, which has pictures, maps and availability of commercial sites within the City. The City has started to see some results from these endeavors, including the reduced vacancies within the Gateway Corporate Center, and a complete refurbishment of an existing hotel. -iv- In it's continued support of the Diamond Bar branch of the Los Angeles County Public Library, last fiscal year the City's Redevelopment Agency provided funding to assist the County in the refurbishment of the facility. This included the replacement of the roof, air conditioning system, carpeting, and the installation of ceramic tile on previously carpeted areas. The City also continued to support the library computer program originally implemented by the City. This includes the provision of ongoing technical assistance, various computer programs, and internet access. This program has provided a wonderful resource to the community which can be used by. all, whether it is a student working on a research paper or someone wanting -to look at the City's web page on the internet. For the Future - The accompanying financial statements reflect an excellent financial condition. This has been accomplished through a combination of sound leadership and management and a conservative financial approach. Reserves have been built in anticipation of a funding loss which was anticipated to occur in FY97-98. The City has received State subventions based upon an incorporation population of 74,115. By law, starting in FY97-98, these subventions were to be based on the actual population which is estimated to be 56,000. Assembly Bill 1226 and Senate Bill 1584 reinstituted the City's incorporation population in January 1998. These statutes also provide for the City to continue to receive State subventions based on the incorporation population until December 31, 1999. Major changes and reductions were implemented in FY97-98 to prepare for the anticipated reduction in revenues. As a result the FY 98-99 budgeted operating expenditure levels have remained virtually the same. The overall goal is to implement revenue enhancement activities and expenditure reduction decisions that will mitigate the impact of this "shortfall", beginning in FY99-00. As stated earlier, to further increase economic growth opportunities within the City, the City formed the Diamond Bar Community Redevelopment Agency in April 1996. The Diamond Bar Economic Revitalization Area includes most of the City's commercial and industrial districts. This redevelopment plan will provide a framework for future activities. Some of these activities may include a Commercial and Industrial Rehabilitation program, a Business Expansion and Retention Program, and a Parking Improvements Program. FINANCIAL. INFORMATION Internal Control Structures Management of the City is responsible for establishing and maintaining an internal control structure designed to ensure the assets of the City are protected from loss, theft, 1 or misuse and to ensure that adequate accounting data is compiled to allow for the preparation of financial statements in conformity with generally accepted accounting principles. The internal control structure is designed to provide reasonable, but not -v- absolute, assurance that these objectives are met. The concept of reasonable assurance recognizes that (1) the cost of a control should not exceed the benefits likely to be derived; (2) the valuation of costs and benefits requires estimates and judgements by management. Budgetary Controls The City adopts an annual budget prepared on the modified accrual basis for all of its governmental funds: Revisions that alter the total appropriations of any funds are approved by the City Council. Prior year appropriations lapse unless they are reappropriated through the formal budget process. Expenditures may not legally exceed j appropriations at the fund level. As demonstrated by the statements and schedules included in the Financial section of this Report, the City meets its responsibility for sound financial management. Accounting System The City's accounting records for general government operations and agency funds are maintained on a modified accrual basis. Accordingly, revenues are recognized when measurable and available, and expenditures are recognized when goods and services are received. Accounting for the City's internal service operations are maintained on the accrual basis. In addition, the City maintains a General Fixed Assets Account Group to . account for fixed assets acquired by the City which are not part of the internal service funds. The City also maintains a General Long Term Debt Account Group to record the City's long term debt obligations including accumulated employee vacation and sick time. General Government Functions The following schedule presents a summary of general, special revenue, and capital project fund revenues for the fiscal year ended June 30, 1998 and the amount and percentage of increases or decreases in relation to prior year revenues. INCREASE PERCENT PERCENT (DECREASE) INCREASE REVENUES AMOUNT OF TOTAL FROM 1996-97 (DECREASE) Taxes 5,511,755 28.05% 144,174 2.69% Special Assessments 561,772 2.86% 31,397 5.92% Licenses, Permits, and Fees 1,247,155 6.35% (169,918) -11.99% Intergovernmental 9,178,049 46.72% 2,822,034 44.40% Fines & Forfeitures 219,075 1.12% 42,808 24.29% Charges for Services 432,020 2.20% 91,572 26.90% Interest 1,166,554 5.94% 160,871 16.00% Other Revenue 1,329,957 6.77% 1,287,101 3003.32% TOTAL 19,646,337 100.00% 4,410,039 MM Revenues for the 1996-97 fiscal year were $15,236,298 as compared with $19,646,337 for the 1997-98 fiscal year, an increase of $4,410,039, or 28.9 percent. There were increases in several of the tax categories. The major increase was in the Franchise Tax Revenue. The Cable TV franchise revenue increased due to two factors.- The actors:The major factor was due to an increase in Cable TV subscription rates. The second factor is due to the City's cable TV operation changed ownership, as a result the franchise payments are now made on a quarterly basis instead of annually. This method allows the revenues to be recorded in a more timely manner. Property tax revenue increased slightly due to a slight increase in the assessed valuation of properties. Sales Tax also increased due to a continually improving economy. The Transient Occupancy Tax (TOT) revenue was somewhat less than the previous year due to a one time spike in revenues recognized in FY96-97. In addition one of the City's hotels was under rehabilitation for a good portion of the year. The Licenses, Permits and Fees category shows a somewhat significant decrease. This is due to a decrease in revenues collected which are associated the recordation of previously approved land subdivisions. These fees typically include Park in Lieu Fees, and Traffic Mitigation fees. The other revenue sources summarized within this category generally showed an increase. Building, Engineering, and Planning Fees increased by $39,037 and Recreation Fees increased by $98,494. The Recreation Program continues to grow each year due to several factors. These factors include increased marketing, better class offerings and flexibility, additional athletic activities and the addition of new programs. Interest revenues rose due to the general increase in the City's cash balances. At the end of FY96-97, the City's investable cash balances were $21,079,356 by the end of FY97- 98, the balance had increased to $23,732,074. This is an increase of $2,652,718. Fines and Forfeiture Revenue increased in several categories. General and Parking Fines grew by $29,464. The False Alarm revenues were also up this year due to increased collection efforts. The increase in the Charges for Services Category is primarily due to continued increase in transit pass sales. This is as a result of increased usage of mass transit by the citizens of Diamond Bar. The Other Revenue category increase was due to the sale of land owned by the City. This revenue from the sale of this land amounted to $1,297,575. It was the City Council's direction to create a Park and Facility Development Fund with the proceeds from this sale. -vii- The following schedule presents a summary of general, special revenue, and capital project fund expenditures for the fiscal year ended June 30, 1998 and the amount and percentage of increases and decreases in relation to prior years expenditures. INCREASE PERCENT PERCENT (DECREASE) INCREASE EXPENDITURES AMOUNT OF TOTAL FROM 1996-97 (DECREASE) General Government 2,542,140 15.38% 377,201 17.42% Public Safety 4,094,401 24.78% (1,117) -0.03% Highways and Streets 1,864,176 11.28% 893,943 108.53% Public Works 2,402,426 14.54% 122,695 5.38% Community Development 603,117 3.65% 152,784 33.93% Parks, Recreation, & Culture 1,666,198 10.08% 395,581 31.13% Capital Outlay 3,324,851 20.12% 2,753,777 582.21% Debt Service 28,064 0.17% 17,744 171.94% TOTAL 16,525,373 100.00% 4,712,608 Expenditures for the 1996-97 fiscal year were $11,812,765 as compared with $16,525,373 for the 1997-98 fiscal year, an increase of $4,712,608, or 39.8 percent. The increases in the General Government category were spread across all divisions. within this category. There were increases in costs associated with the City Council's and City Manager's divisions due to increased lobbying activities associated with the passage of state laws protecting the City's revenue sources. The City was a party to lawsuits during the fiscal year causing the City Attorney expenditures to rise by approximately $73,600. This fiscal year saw the implementation of a new financial management system. As a result there were increases in personnel, training, and data processing costs. Election costs.for this fiscal year were $14,025 when there were no election costs last fiscal year. During FY97-98, the City's street and public works expenditures were increased due to the timing of several construction projects. In many cases the design was completed during FY 96-97; however, the actual construction did not commence until the current i fiscal year. Therefore expenditures were higher this year than last year. The expenditure increase in the Community Development area was also due to several factors. Building and Safety costs increased by $119,800 which is offset by a corresponding increase in related revenues received. There were also continuing costs incurred as a result of the formation of the Diamond Bar Economic Revitalization Area by the City's redevelopment agency. It is anticipated that these costs will be easily recovered via future tax increment revenues. -viii- The increase in the Parks, Recreation, and Culture section was largely due to the sale of Proposition A -Transit funds in the amount of $385,000. The proceeds from the sale of these funds were used for various parks, recreation and cultural activities. Capital Outlay category was significantly higher this fiscal year due to the construction and completion of Pantera Park. The cost incurred this fiscal year for this project, was $2,072,679. The City also completed various ADA retrofitting projects. Retrofitted improvements include various sidewalk, curb, public counter, and park projects. Other major capital outlay items included the upgrade of the City's financial management system, the furnishing and equipping of the new City Hall office facilities. Debt Service requirements were increased as a result of the City redevelopment agency's increased indebtedness. Fund Balances The General Fund ended the 1997-98 fiscal year with a fund balance of $13,242,7.26. This an increase of $1,665,315 or approximately an 14.4% increase from the balance at June 30, 1997. Of this, $850,367 is reserved for encumbrances, debt service and special programs. In addition, there is $115,239 designated for specific projects and programs, including $109,957 for library service enhancement. This leaves an undesignated fund balance of $12,277,120. Agency Fund The agency fund accounts for assets held by the City in a trustee or agent capacity. The City presently has a deferred compensation fund which is set up to account for contributions for employee participation in an income deferral program. Cash Management The City invests temporarily idle funds in accordance with the Government Code and the investment policy approved by the City Council. During FY97-98, funds were invested in the Local Agency Investment Fund (LAIF), which is administered by the State Treasurer's Office and a Money Market Mutual Fund account with Well's Fargo Bank, The City invested in LAIF to the maximum balance of $20,000,000, any available cash over and above the LAIF account is invested in the Money Market Mutual Fund. The City manages. all of its cash and investments on a pooled basis with the exception of the Deferred Compensation Funds which are managed by the appointed fiscal agents. Interest earnings are allocated to the various funds based on their share of cash and investment balances. The average yield on investments managed by the City was 5.25%. Defined Benefit Pension Plan The City has contracted with the California Public Employees Retirement System (PERS) to provide retirement, disability, death and survivor benefits for all eligible full and part-time City employees. The pension benefit obligation was computed as part of an actuarial valuation performed as of June 30, 1995. Neither an actuarial nor an annual update as of June 30, 1998 is available at this time. The total over -funded pension obligation applicable to the'City employees was $212,408 at June 30, 1995. The City's contribution to the system based on actuarially determined requirements was $169,458 for FY95-96. For the three years ended June 30, 1996, 1997 and 1998 the total contribution to PERS was 13.31%, 13.27%, and 13.65% respectively, of the annual covered payroll. The total contribution paid by the City included employer contributions as well as member contribution for which the City is contractually obligated to pay on behalf of its employees. Debt Administration As of June 30, 1998, the City of Diamond Bar had no outstanding general obligation bonds. In fiscal year 1994-95, the City entered into a lease agreement for financing the acquisition of a telephone system in the amount of $22,356 to be paid in sixty monthly installments ending in March 2000. The balance to be paid is $10,271 including $1,247 in interest. Risk Management The City of Diamond Bar is a member of the California Joint Powers Insurance Authority (CJPIA) for the purpose of pooling its general liability losses and claims with the approximately 84 other member cities. Each member city retains the first $20,000 of each claim. Claims above $20,000 are shared by all the member cities up to a maximum of $50,000,000 per occurrence. The City has also established a self insurance internal service fund to cover the City's share of any potential losses not covered by the CJPIA. The City Council established a policy of annually transferring $100,000 to the fund to create a self-insurance reserve. When the reserve reaches $1,000,000, the reserves will be deemed to be sufficient. The self insurance reserve at June 30, 1998 was. $1,175,851. Acknowledgements The preparation of this Comprehensive Annual Financial Report on a timely basis was made possible by the dedicated service of the City's Finance Department staff, and through the cooperation of the entire City staff. Each staff member has my sincere appreciation for the contributions made in the preparation of this Report. -x- I would also like to thank our independent auditor, Conrad& Associates 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, Terrence L*Belanger City Manager OFFICIALS OF THE CITY OF DIAMOND BAR June 30, 1998 CITY COUNCIL Carol Herrera, Mayor Wen Chang, Mayor Pro Tern Eileen R. Ansari, Councilmember Robert S. Huff, Councilmember Deborah H. O'Connor, Councilmember CITY OFFICIALS Terrence L. Belanger, City Manager James DeStefano, Deputy City Manager Michael Je"s, City Attorney Lynda Burgess, City Clerk Bob Rose, Community Services Director David G. Liu, Deputy Public Works Director Linda G. Magnuson, Assistant Finance Director xii 2 Z @ 'n o cu cu E u >1 U (D mo r- -a cu 00 CL. V) E E 0 IA w LL < UC! u m L--J-j C 1. U0 u CL CL C > Opp cu a) < 0 N> o a 0 V) m E o w U u 0 = 'o cu E S (z o u a E :5 = =u E E tO w -0 CL 0- CL CL 0 CA cz cz u a) a u 0 (U n. (U u U tv cu CL E 00 > to 0 E CL u CU cu U I= u 14— Lan) to ai� 0 'cu -M N. 0• cu U u -u to n C: Ln .0 Ear 0 Ln Zi 0 0- C-1 V) E > V> u f u cu1 w u CU ui CL < u u u KJ C u 0 a) W u W co m xiv Presented to City of Diamond Bar, California For its Comprehensive Annual Financial Report for the Fiscal Year Ended June 30, 1997 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. NgE OfFjC � OF 4�� u}I O AIIOATES v %% N c N President 72P SF AL Q,l CRICA64 0,0 Executive Director xv HAI. � .JO��.( 11 Ea_i, L.L.P. A PARTNERSHIP INCLUDING PROFESSIONAL CORPORATIONS Honorable Mayor and City Council City of Diamond Bar Diamond Bar, California Independent Auditors' Report CERTIFIED PUBLIC ACCOUNTANTS 1100 MAIN STREET, SUITE C IRVINE, CALIFORNIA 92614 (949) 474-2020 Fax (949) 263-5520 We have audited the accompanying general purpose financial statements of the City of Diamond Bar, California as of and for the year ended June 30, 1998, as listed in the table of contents. These general purpose financial statements are the responsibility of the management of the City of Diamond Bar, California. Our responsibility is to express an opinion on these general purpose financial statements based on our audit. We conducted our audit in accordance with generally accepted auditing standards and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes 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 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 general purpose financial statements referred to above present fairly, in all material respects, the financial position of the City of Diamond Bar as of June 30, 1998, and the results of its operations and the cash flows of its proprietary fund type for the year then ended in conformity with generally accepted accounting principles. During the year ended June 30, 1998, the City implemented GASB Statement No. 31 which changed the manner in which the City accounts for investments, as discussed further in note 16 to the financial statements. Our audit was performed for the purpose of forming an opinion on the general purpose financial statements taken as a whole. The combining and individual fund financial statements listed in the table of contents are presented for purposes of additional analysis and are not a required part of the general purpose financial statements of the City of Diamond Bar, California. Such information has been subjected to the auditing procedures applied in the audit of the general purpose financial statements, and in our opinion, is fairly stated in all material respects in relation to the general purpose financial statements taken as a whole. The scope of our audit did not include the supplemental statistical schedules listed in the table of contents and we do not express an opinion on them. MEMBERS OF AICPA AND CALIFORNIA SOCIETY OF CERTIFIED PUBLIC ACCOUNTANTS MEMBER OF AMERICAN INSTITUTE OF CERTIFIED PUBLIC ACCOUNTANTS PRIVATE COMPANIES PRACTICE SECTION Honorable Mayor and City Council City of Diamond Bar Page Two In accordance with Government Auditing Standards, we have also issued our report dated October 23, 1998 on our consideration of the City of Diamond Bar's internal control over financial reporting and our tests of its compliance with certain provision of laws, regulations, contracts and grants. 4M4-1� As&-ee4k; / October 23, 1998 (This page intentionally left blank) CITY OF DIAMOND BAR Combined Balance Sheet - All Fund Types and Account Groups June 30, 1998 See accompanying notes to the financial statements. 3 Proprietary Governmental Fund T es Fund Type General SpecialCapital-n Revenue ern Projects Service Assets and other debits Assets: Cash and investments (note 2) $12,727,816 9,786,255 201,584 1,070,496 Accounts receivable 194,671 23,766 - - Interest receivable 296,678 - - _ Due from other funds (note 11) 443,209 - 884,761 - Due from other governments 1,007,208 1,217,566 - - Prepaid expenses - - - 107,096 Advances fo other funds (note 6) 741,526 - - _ Fixed assets (note 3) - Other debits: Amount to be provided for retirement of general long-term debt _ _ _ _ Total assets $15,411,108 11,027,587 1,086,345 1,177,592 Liabilities, equity and other credits Liabilities: Accounts payable $ 1,266,109 178,953 674,101 1,741 Accrued payroll 115,455 2,926 699 - Retentions payable - 68,079 - - Deferred revenue 38,384 - Due to other funds (note 11) 254,620 1,073,350 - - Deposits 493,814 - Due to other governments Compensatecrabsences - 16,308 - - payable (note 4) - Obligations - under capital lease (notes 4 and 5) - Advances from other funds notes 4 and 6) Deferred - compensation payable (note 9) - _ _ _ Total liabilities 2,168,382 1,339,616 674,800 1,741 Equity and other credits: investment in general fixed assets - - _ _ Retained earnings: Unreserved - - - 1,175,851 Fund balances (note 8): Reserved 850,367 689,751 - - Unreserved - designated 115,239 8,998,220 411,545 - Unreserved - undesignated 12,277,120 - - _ Total equity and other credits 13,242,726 9,687,971 411,545 1,175,851 Total liabilities, equity and other credits $15,411,108 11,027,587 1,086,345 1,177,592 See accompanying notes to the financial statements. 3 Fiduciary Fund Type Account Groups Totals Ueneral Ueneral(Memorandum Only) Agency Fixed Assets Long-Term Debt 1998 1997 743,199 - - 24,529,350 21,617,956 - - - 218,437 127,475 - - - 296,678 280,792 - - - 1,327,970 547,309 - - - 2,224,774 1,469,216 - - - 107,096 - - 741,526 379,419 - 6,768,037 - 6,768,037 4,323,878 - - 875,940 875,940 495,786 743,199 6,768,037 875,940 37,089,808 29,241,831 - - - 2,120,904 1,753,966 - - - 119,080 92,204 - - - 68,079 58,375 - - - 38,384 10,320 - - - 1,327,970 547,309 - - - 493,814 308,672 - - 16,308 16,308 - - 125,390 125,390 102,808 - - 9,024 9,024 13,559 - - 741,526 741,526 379,419 743,199 - - 743,199 538,325 743,199 - 875,940 5,803,678 3,821,265 - 6,768,037 - 6,768,037 4,323,878 - - - 1,175,851 888,649 - - - 1,540,118 2,055,528 - - - 9,525,004 7,511,116 - - - 12,277,120 10,641,395 - 6,768,037 - 31,286,130 25,420,566 743,199 6,768,037 875,940 37,089,808 29,241,831 M (This page intentionally left blank) Combined Statement of Revenues, Expenditures and Changes in Fund Balances - All Governmental Fund Types Year ended June 30, 1998 Revenues: Taxes Special Assessments Licenses, permits and fees Intergovernmental Fines and forfeits Charges for services Investment income Other revenues Total revenues Expenditures: Current: Generalovernment Public safety Highway and streets Public works Community development Parks, recreation and culture Capital outlay Debt service: Interest Total expenditures Excess (deficiency) of revenues over (under) expenditures Other financing sources (uses) Operating transfers in Operating transfers out Proceeds of advances General $ 5,511,755 1,247,155 3,341,094 219,075 633,803 32,382 10,985,264 Special Revenue 561,772 5,836,955 432,020 523,387 1,297,575 8,651,709 2,542,140 4,088,861 5,540 11,468 1,265,894 1,115,302 - 139,848 1,256,426 409,772 247,987 20,410 9,401,308 1,702,340 Capital Projects 9,364 9,364 1,852,708 21,230 463,269 3,056,454 28,064 5,421,725 Totals Memorandum Onl 5,511,755 5,367,581 561,772 530,375 1,247,155. 1,417,073 9,178,049 6,356,015 219,075 176,267 432,020 340,448 1,166,554 1,005,683 1.329.957 42.856 19,646,337 15,236,298 2,542,140 4,094,401 1,864,176 2,402,426 603,117 1,666,198 3,324,851 EWA J1. 1:%, 16,525,373 2,164,939 4,095,518 970,233 2,279,731 450,333 1,270,617 571,074 10,320 11,812,765 1,583,956 6,949,369 (5,412,361 3,120,964 3,423,533 563,324 - 5,077,282 5,640,606 2,075,488 (481,965) (5,431,887) - (5,913,852) (2,345,381) 362,107 362,107 331,392 Total other financing sources (uses) 81,359 Excess of revenues and other financing sources over expenditures and other financing uses 1,665,315 Fund balances at be innin of year, as restated note 6) 11,577,411 Fund balances at end of year $13,242,726 (5,431,887) 5,439,389 88,861 61,499 1,517,482 27,028 3,209,825 3,485,032 8,170,489 384,517 20,132,417 16,723,007 9,687,971 411,545 23,342,242 20,208,039 See accompanying notes to the financial statements. U Combined Statement of Revenues, Expenditures and Changes in Fund Balances - Budgef and Actual Revenues: Taxes Special Assessments Licenses, permits and fees Intergovernmental Fines and forfeits Charges for services Investment income Other revenues Total revenues Expenditures: Current: General government Public saTety Highways and streets Public works Community development Parks, recreation and culture Capital outlay Debt service: Interest Total expenditures Excess (deficiency) of revenues over (under) expenditures Other financing sources (uses): Operating transfers in Operating transfers out Proceeds of advances All Governmental Fund Types Year ended June 30, 1998 General 10.217.150 2,770,784 4,152,630 1,563,399 1,519,257 285,900 10,291,970 (74,820) 770,569 (676,219) Total other financing sources (uses) 94,350 Excess (deficiency) of revenues and other financing sources over (under) expenditures and other financing uses 19,530 Fund balances at be inning of year, as restated (note 17j 11,577,411 Fund balances (deficit) at end of year $11,596,941 10,985,264 2,542,140 4,088,861 1,265,894 1,256,426 247,987 9.401.308 1,583,956 563,324 (481,965) 81,359 1,665,315 11,577,411 13,242,726 See accompanying notes to the financial statements. R 768.114 228,644 63,769 297,505 262,831 37,913 890,662 1,658,776 (207,245) 194,254 —(219-91) 1,645,785 1,645,785 v ariance Favorable Budget Actual (Unfavorable) $ 5,250,000 5,511,755 261,755 1,171,450 1,247,155 75,705 2,931,700 3,341,094 409,394 231,000 219,075 (11,925) 606,000 633,803 27,803 27,000 32,382 5,382 10.217.150 2,770,784 4,152,630 1,563,399 1,519,257 285,900 10,291,970 (74,820) 770,569 (676,219) Total other financing sources (uses) 94,350 Excess (deficiency) of revenues and other financing sources over (under) expenditures and other financing uses 19,530 Fund balances at be inning of year, as restated (note 17j 11,577,411 Fund balances (deficit) at end of year $11,596,941 10,985,264 2,542,140 4,088,861 1,265,894 1,256,426 247,987 9.401.308 1,583,956 563,324 (481,965) 81,359 1,665,315 11,577,411 13,242,726 See accompanying notes to the financial statements. R 768.114 228,644 63,769 297,505 262,831 37,913 890,662 1,658,776 (207,245) 194,254 —(219-91) 1,645,785 1,645,785 Special Revenue EXHIBIT CC Capital Proiects v ariance Favorable Budget Actual (Unfavorable) 35,000 - (35,000) 9,364 9,364 35,000 9,3642� 5,636) 115,000 5,540 v ariance Favorable Budget Actual (Unfavorable) 549,616. 561,772 12,156 5,178,070 5,836,955 658,885 443,500 432,020 (11,480) 355,100 523,387 168,287 1,300,000 1,297,575 _((2,425) 7,826,286 8,651,709 825,423 EXHIBIT CC Capital Proiects v ariance Favorable Budget Actual (Unfavorable) 35,000 - (35,000) 9,364 9,364 35,000 9,3642� 5,636) 115,000 5,540 109,460 - 27,028 1,948,581 8,246,111 25,520 11,468 14,052 4,181,391 1,852708 , 2,328,683 1,287,050 1,115,302 171,748 - 21,230 21,230 193, 000 848 54,123 452,480 463,269 10,789 422, 409;772 12,228 - - - 127,045 20,410 106,635 4,507,456 3,056,454 1,451,002 - - - - 28,064 (28,064) 2,170,586 1,702,340 468,246 9,141,327 5,421,725 3,719,602 5,655,700 6,949,369 1,293,6699 1(, 06,327) (5A!2,361) 3,693,966 7,034,524 5,077,282 (1,957,242) (7,463,694) (5,431,887) 2,031,807 - - 150,250 362,107 211,857 7,463,694 63,694) (5,431,887) 2,031,807 7,184,774 5,439.389 (1,745,385) (1,807,994) 1,517,482 3,325,476 (1,921,553) 27,028 1,948,581 8,246,111 8,170,489 (75,622) 384,517 384,517 - 6,438,117 9,687,971 3,249,854 (1,537,036) 411,545 1,948,581 6 fflyffirt CITY OF DIAMOND BAR Combined Statement of Revenues, Expenses, and Changes in Retained Earnings - Proprietary Fund Type Year ended June 30, 1998 See accompanying notes to the financial statements. 8 Internal Service 1998 1997 Operating expenses: Insurance premiums $ 28,143 163,577 Total operating expenses 28,143 163,577 Operating income (loss)(28,1,41� r-11 163.577 Non-operating revenues: Investment income 42,099 32,723 Total non-operating revenues 42.099 32,723 Income (loss) before operating transfers 13,956 (139,854 Transfer from other funds: Operating transfer in 273,246 269,893 Total operating transfers 273,246 269,893 Net income 287,202 139,039 Retained earnings at beginning of year 888,649 749,610 Retained earnings at end of year $1,175,851 888.649 See accompanying notes to the financial statements. 8 Combined Statement of Cash Flows - Proprietary Fund Type Year ended June 30, 1998 Cash flows from operating activities: Insurance rebates Insurance payments Net cash provided by (used for) operating activities Cash flows from noncapital financing activities: Transfer from other fund Net cash provided by noncapital financing activities Cash flows from investing activities: Investment income Net cash provided by investing activities Net increase in cash and cash equivalents Cash and cash equivalents at beginning of year Cash and cash equivalents at end of year Reconciliation of net operating income to net cash provided by (used for) operating activities: Operating income (loss) Adjustments to reconcile operating income to net cash provided by (used for) operating activities: (Increase) decrease in prepaid insurance (Decrease) increase in accounts payable Net cash provided by (used for) operating activities Internal Service 1998 1997 $ - 7,870 135,052) - _ (135,052 7,870 273,246 273,246 42,099 42,099 180,293 890,203 $1,070,496 $ (28,143) (107,096) 187 !(115,052) See accompanying notes to the financial statements. 269,893 269,893 32,723 32,723 310,486 579,717 890,203 (163,577) 169,893 1,554 7,870 (This page intentionally left blank) CITY OF DIAMOND BAR Notes to the Financial Statements Year ended June 30, 1998 (1) Summary of Significant Accounting Policies (a) Description of the Reporting Entily The City of Diamond Bar was incorporated April 18, 1989 under the general laws of the State of California. The City operates under the Council - Manager form of government and provides the following services as authorized by its general laws: Public Safety (police), Highways and Streets, Park Facilities, Public Improvements, Community Development (planning, building, zoning) and General Administrative Services. The accounting policies of the City conform to generally accepted accounting principles as applicable to governments. As required by generally accepted accounting principles, these financial statements present the government and its component units, entities for which the government is considered to be financially accountable. The City is considered to be financially accountable for an organization if the City appoints a voting majority of that organization's governing body and the City is able to impose its will on that organization or there is a potential for that organization to provide specific financial benefits to or impose specific financial burdens on the City. The City is also considered to be financially accountable if an organization is fiscally dependent (i.e., it is unable to adopt its budget, levy taxes, set rates or charges, or issue bonded debt without approval from the City). In certain cases, other organizations are included as component units if the nature and significance of their relationship with the City are such that their exclusion would cause the City's financial statements to be misleading or incomplete. All of the City's component units are considered to be blended component units. Blended component units, although legally separate entities, are, in substance, part of the government's operations and so data from these units are reported with the interfund data of the primary government. The following organization is considered to be a component unit of the City: Diamond Bar Redevelopment Agency The Diamond Bar Redevelopment Agency was established on February 6, 1996 pursuant to the State of California Health and Safety Code Section 33000 entitled "Community Redevelopment Law". Its purpose is to prepare and carry out plans for improvements, rehabilitation and redevelopment of blighted areas within the territorial limits of the City of Diamond Bar. Even though it is legally separate, it is reported as if it were part of the City because the City Council also serves as the governing board of the Agency. Upon completion, separate financial statements of the Agency can be obtained at City Hall. 10 CITY OF DIAMOND BAR Notes to the Financial Statements (Continued) (1) Summary of Significant Accounting Policies (Continued) (b) Fund Accounting The . basic accounting and reporting entity is a "fund." A fund is defined as an independent fiscal and accounting entity with a self -balancing set of accounts, recording resources, related liabilities, obligations, reserves and equities segregated for the purpose of carrying out specific activities or attaining certain objectives in accordance with special regulations, restrictions or limitations. The accounting records of the City are organized on the basis of funds and account groups classified for reporting purposes as follows: GOVERNMENTAL FUNDS General Fund The General Fund is the general operating fund of the City. All general tax revenues and other receipts that are not allocated by law or contractual agreement to some other fund are accounted for in this fund. Expenditures of this fund include the general operating expenses and capital improvement costs which are not paid through other funds. Special Revenue Funds The Special Revenue Funds are used to account for proceeds of specific revenue sources that are restricted by law or administrative action for specific purposes. Capital Project Funds Capital Project Funds are used to account for financial resources to be used for the acquisition, construction or improvements of major capital facilities and infrastructure. The City applies all applicable GASB pronouncements in accounting and reporting for its proprietary operations as well as the following pronouncements issued on or before November 30, 1989, unless these pronouncements conflict with or contradict GASB pronouncements: Financial Accounting Standards Board (FASB) Statements and Interpretations, Accounting Principles Board (APB) Opinions, and Accounting Research Bulletins (ARBs) of the Committee on Accounting Procedures. Proprietary funds include the following fund type: Notes to the Financial Statements (Continued) (1) Summm of Significant Accounting Policies, (Continued) Internal Service Fund The Internal Service Fund is used to account for goods and services provided by one department to other departments on a cost reimbursement basis. FIDUCIARY FUNDS Agency Funds Agency Funds are custodial in nature and account for assets that the City holds for others in an agency capacity. ACCOUNT GROUPS General Fixed Assets Account Grou The General Fixed Assets Account Group is used to account for the costs of fixed assets acquired to perform general government functions. Assets purchased are recorded as expenditures in the governmental Rinds and capitalized at cost in the general fixed assets account group. Contributed fixed assets are recorded in the general fixed assets account group at their estimated fair market value when received. Fixed assets acquired under a capital lease are recorded at the net present value of the future minimum lease payments. Fixed assets consisting of certain improvements other than buildings, including roads, bridges, curbs and gutters, streets and sidewalks, drainage systems and lighting systems, have not been capitalized. Such assets normally are immovable and of value only to the City. Therefore, the purpose of stewardship for capital expenditures is satisfied without recording these assets. No depreciation has been provided on general fixed assets. General Long -Term Debt Account Group The General Long -Term Debt Account Group is used to account for all long-term debt of the City, except that accounted for in the proprietary funds. 12 Notes to the Financial Statements (Continued) (1) Summary of Significant Accounting Policies (Continued) (c) Measurement Focus and Basis of Accounting Governmental (general, special revenue, and capital projects) fund types are accounted for on a "spending" measurement focus. Accordingly, only current assets and current liabilities are included on their balance sheets. The reported fund balance provides an indication of available, spendable resources. Operating statements for governmental fund types report increases (revenues) and decreases (expenditures) in available spendable resources. The proprietary (internal service) fund types are accounted for on an "income determination" or "cost of services" measurement focus. Accordingly, all assets and liabilities are included on the balance sheet, and the reported fund equity provides an indication of the economic net worth of the fund. Operating statements for proprietary fund types report increases (revenues) and decreases (expenses) in total economic net worth. Agency funds are custodial in nature (assets equal liabilities) and do not involve measurement of results of operations. The modified accrual basis of accounting is followed by the governmental and agency funds. Under the modified accrual basis of accounting, revenues are susceptible to accrual when they become both measurable and available. Available means collectible within the current period or soon enough thereafter to be used to pay liabilities of the current period. Expenditures, other than interest on long-term debt, are recorded when a current liability is incurred. Liabilities are considered current when they are normally expected to be liquidated with expendable available financial resources. Taxes, subventions, entitlements, and taxpayer -assessed tax revenues held at year- end by an intermediary collecting government are recognized as revenue under the modified accrual basis of accounting. Reimbursement grant revenues are recognized when the related expenditures are incurred. Revenues from the use of money and property are recorded when earned. Licenses, permits, fines, forfeitures, charges for services, and miscellaneous revenues are recorded as governmental fund revenues when received in cash because they are generally not measurable until actually received. The accrual basis of accounting is utilized by the proprietary funds. Revenues are recognized when they are earned and expenses are recorded when the related liability is incurred. Unbilled service receivables, if material, have been reflected in the financial statements. 13 Notes to the Financial Statements (Continued) 1) SuinmM of Significant Accounting Policies, (Continued (d) Budgetary Data The City adopts an annual budget prepared on the modified accrual basis for all of its governmental funds. Revisions that alter the total appropriations of any funds ( are approved by City Council. Prior year appropriations lapse unless they are reappropriated through the formal budget process. Expenditures may not legally exceed appropriations at the fund level. During the year, there were supplemental budgetary appropriations amounting to $2,814,454. (e) Interfund Transfers Nonrecurring transfers of equity between funds are reported as an adjustment to beginning fund balance. Operating transfers are reported as other sources and uses of funds in the statement of revenues, expenditures, and changes in fund balances for governmental fund types. (f) Encumbrances Encumbrance accounting, under which purchase orders, contracts and other commitments for the expenditure of monies are recorded in order to reserve that portion of the applicable appropriation, is employed as an extension of formal budgetary control in the governmental funds. Encumbrances outstanding at year- end do not constitute expenditures or liabilities, but are reported as reservations of fund balance. (g) Cash and Investments Investments are reported in the accompanying balance sheet 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. 14 CITY OF DIAMOND BAR Notes to the Financial Statements (Continued) (1) Summary of Significant Accounting Policies (Continued) (g) Cash and Investments, (Continued) The City pools cash and investments of all funds, except for deferred compensation assets and assets held by fiscal agents. Each fund's share in this pool is displayed in the accompanying financial statements as cash and investments. Investment income earned by the pooled investments is allocated to the various funds based on each fund's average cash and investment balance, except for $633,803 of investment income (associated with funds not legally required to receive pooled investment income) that has been assigned to and recorded as revenue of the general fund, as provided by California Government Code Section 53647. (h) Cash Equivalents For purposes of the statement of cash flows, cash equivalents are defined as short- term, highly liquid investments that are both readily convertible to known amounts of cash or so near their maturity that they present insignificant risk of changes in value because of changes in interest rates. Cash equivalents also represent the proprietary funds' share in the cash and investment pool of the City of Diamond Bar. (i) Due from Other Governments The amounts recorded as a receivable due from other governments include sales taxes, property taxes, and grant revenues, collected or provided by Federal, State, County, and City Governments and unremitted to the City as of June 30, 1998. The County of Los Angeles assesses, bills, and collects property taxes for the City. 0) Employee Leave Benefits Vacation and sick leave time begin to accumulate as of the first day of employment to a maximum of 160 hours. Employees who accumulate sick leave in excess of 160 hours are paid for the excess annually at one half the employee's current wage rate. In governmental fund types, the cost of vacation and sick leave benefits is recognized when payments are made to employees. A long-term liability of $125,390 of accrued benefits has been recorded by using the vesting method in the long-term debt account group representing the City's commitment to fund such costs from future operations. 15 CITY OF DIAMOND BAR Notes to the Financial Statements (Continued) (1) Suminary of Significant Accounting Policies, (Continued) (k) Claims and Judgments The City records a liability for material litigation, judgments, and claims (including incurred but not reported losses) when it is probable that an asset has been impaired or a material liability has been incurred prior to year end and the probable amount of loss (net of any insurance coverage) can be reasonably estimated. (1) Capital Projects Capital projects expenditures include public domain or infrastructure projects which are not capitalized as additions to general fixed assets. (m) Postem_ployment Benefits The City does not provide postemployment benefits (other than pension benefits) for its employees. (n) Pro -Pe Taxes Under California law, property taxes are assessed and collected by the counties up to 1% of assessed value, plus other increases approved by the voters. The property taxes go into a pool, and are then allocated to the cities based on complex formulas. Accordingly, the City of Diamond Bar accrues only those taxes which are received within 60 days after year end. The property tax calendar is as follows: Lien Date: March 1 Levy Date: July 1 Due Date: First Installment - November 1 May 15 Second Installment - February 1 Delinquent Date: First Installment - December 11 Second Installment - April 11 Taxes are collected by Los Angeles County and are remitted to the City periodically. Dates and percentages are as follows: December 10 30% Advance January 16 Collection No. 1 April 10 10% Advance May 15 Collection No. 2 July 31 Collection No. 3 16 CITY OF DIAMOND BAR Notes to the Financial Statements (Continued) (1) Summary of Significant Accounting Policies (Continued) (o) Fixed Assets Fixed assets are not capitalized in the funds used to acquire or construct them. Instead, capital acquisition and construction are reflected as expenditures in governmental funds, and the related assets are reported in the general fixed assets account group. All purchased fixed assets ate valued at cost where historical records are available and at an estimated historical cost where no historical records exist. Donated fixed assets are valued at their estimated fair market value on the date received. The costs of normal maintenance and repairs that do not add to the value of the asset or materially extend asset lives are not capitalized. Improvements are capitalized and depreciated over the remaining useful lives of the related fixed assets, as applicable. Public domain ("infrastructure") general fixed assets consisting of roads, bridges, curbs and gutters, streets and sidewalks, drainage systems and lighting systems are not capitalized, as these assets are immovable and of value only to the government. Assets in the general fixed assets account group are not depreciated. (p) Comparative Data Comparative total data for the prior year have been presented in the accompanying financial statements in order to provide an understanding of changes in the City's financial position and operations. However, comparative (i.e., presentation of prior year totals by fund type) data have not been presented in each of the statements since their inclusion would make the statements unduly complex and difficult to read. Certain minor reclassifications of prior year data have been made in order to enhance their comparability with current year figures. (q) Memorandum Only Totals Columns in the accompanying financial statements captioned "Totals (Memorandum Only)" are not necessary for a fair presentation of the financial statements in accordance with generally accepted accounting principles, but are presented as additional analytical data. Interfund balances and transactions have not been eliminated and the columns do not present consolidated financial information. 17 • �� • �C�• Notes to the Financial Statements (Continued) (2) Cash and Investments Cash and investments held by the City at June 30, 1998 consisted of the following:. Carrng Amount Imprest cash on hand $ 300 Demand deposits 46,116 State Treasurer's investment pool 20,007,661 Deferred compensation mutual funds 743,199 Money market mutual fund 3,732,074 Total $24,529,350 The City is generally authorized under Section 53601 of the California Government Code and the City's investment policy to invest in the following types of investments: Medium term corporate notes Demand deposits with financial institutions Passbook savings accounts Certificates of deposit U.S. Treasury bills and notes Bankers' acceptances Commercial paper California Local Agency Investment Fund Repurchase Agreements Negotiable certificates of deposit Money market funds Federal Agency Securities Deferred compensation investments held in a fiduciary capacity for City employees include investments legally authorized for the City as well as investments in mutual funds. Under the California Government Code, a financial institution is required to secure deposits made by state or local governmental units by pledging securities held in the form of an undivided collateral pool. 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. 18 Notes to the Financial Statements (Continued) (2) Cash and Investments, (Continued) Deposits of cities and other state or local governments are classified in three categories to give an indication of the level of credit risk assumed by the City. Category 1 - includes deposits that are insured or collateralized with securities held by the City or its agent in the City's name. Category 2 - includes deposits collateralized with securities held by the pledging financial institution's trust department or agent in the City's name. Category 2 also includes deposits collateralized by an interest in an undivided collateral pool held by an authorized Agent or Depository and subject to certain regulatory requirements under State law. Category 3 - includes deposits collateralized with securities held by the pledging financial institution, or by its trust department or agent but not in the City's name. Category 3 also includes any uncollateralized deposits. Deposits held by the City as of June 30, 1998 are classified in risk categories as follows: Form of Deposit Demand deposits Total deposits Category Bank 1 2 3 Balance $52,412 - - 52,412 $52,412 - - 52,412 Carrying Amount 46,116 46,116 Investments held by the City as of June 30, 1998 are not classified by custodial risk because they do not represent a direct investment in securities. Carrying Market Amount Value Investments held by City not subject to categorization: Investment in State Treasurer's Investment Pool $20,000,000 20,007,661 Investment in deferred compensation mutual funds 743,199 743,199 Money market mutual fund 3,732,074 3,732,074 Total investments 19 $24,475,273 24,482,934 CITY OF DIAMOND BAR Notes to the Financial Statements (Continued) (2) Cash and Investments, (Continued) 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 of 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. Included in LAIF's investment portfolio are collateralized mortgage obligations, mortgage-backed securities, other asset-backed securities, loans to certain state funds, and floating rate securities issued by federal agencies, government-sponsored enterprises, and corporations. (3) Fixed Assets A summary of changes in general fixed assets follows: Balance at Balance at July 1, 1997 Additions Retirements June 30, 1998 Land $1,969,899 - 400,001 1,569,898 Buildings 859,345 300,000 - 1,159,345 Improvements other than buildings 579,301 2,336,050 - 2,915,351 d Vehicles anequipment q p 726,673 235,064 - 961,737 Furniture and fixtures 188,660 13,840 40,794 161,706 Total $4,323,878 2,884,954 440,795 6,768,037 (4) General Long; -Term Debt Changes in general long-term debt for the year ended June 30, 1998 were as follows: Balance at Balance at July 1, 1997 Additions Retirements June 30, 1998 City: ompensated absences payable $102,808 22,582 - 125,390 Obligations under capital lease 13,559 - 4,535 9,024 Redevelopment Agency: Advances from other funds 379,419 362,107 - 741,526 Total $495,786 384,689 4,535 875,940 20 CITY OF DIAMOND BAR Notes to the Financial Statements (Continued) Q Obligations UnderCapitalLease Telephone System The City has entered into a lease agreement as lessee for financing the acquisition of a telephone system in the amount of $22,356 to be paid in sixty monthly installments ending in March 2000. The balance to be paid is $10,271 including $1,247 in interest. This lease agreement qualifies as a capital lease for accounting purposes and, therefore, has been recorded at the present value of the future minimum lease payments as of the inception date in the general fixed assets account group. Payments of principal and interest are made from the General Fund. The future minimum lease obligations and the net present value of the minimum lease payments as of June 30, 1998 were as follows: Year Ending June 30 1999 $ 5,601 2000 4,670 Total minimum lease payments 10,271 Less amount representing interest 1 247) Present value of minimum lease payments $9024 (6) Advances From/to Other Funds During the fiscal year ended June 30, 1998, the General Fund advanced $362,107 to the Redevelopment Agency Capital Projects Fund for various start up costs. The following represents a summary of these transactions: Balances at Balances at July 1, 1997 Proceeds Repayments June 30, 1998 Agency expenditures incurred by the City $379,419 362,107 741,526 Repayment of advances is not required until funds become available to the Agency. Interest accrues on advances at the average daily rate earned on investments in the Local Agency Investment Fund. 21 CITY OF DIAMOND BAR Notes to the Financial Statements (Continued) (7) Obligations Under Operating Leases The City leases building and office facilities under noncancelable operating leases. The total costs for such leases were $154,629 for the year ended June 30, 1998. The lease for Parks and Recreation expired on June 30, 1998. The future minimum lease payments for the lease of building and office facilities are as follows: Year ending June 30 1999 $208,336 2000 233,588 2001 233,588 2002 246,215 Total $921,727 (8) Reserves and Designations of Fund Balance The City established "reserves" of fund equity to segregate fund balances which are not appropriable for expenditure in future periods, or which are legally set aside for specific future use. Fund "designations" also may be established to indicate tentative plans for financial resource utilization in future periods. Fund balances at June 30, 1998 consisted of the following reserves and designations: Special Capital Total General Fund Revenue Projects (Memorandum Only) Reserved for: Debt service $ 9,024 - - 9,024 Encumbrances 99,817 689,751 - 789,568 Advances to the Diamond Bar Redevelopment Agency 741,526 - - 741,526 850,367 689,751 - 1,540,118 Unreserved: Designated for: Specific projects and programs 115,239 8,998,220 411,545 9,525,004 Undesignated 12,277,120 - 12,277,120 12,392,359 8,998,220 411,545 21,802,124 fll Total fund balance $13,242,726 9,687,971 411,545 23,342,242 22 Notes to the Financial Statements (Continued) (9) Deferred Compensation The City has made available to its employees a deferred compensation plan, created in accordance with Internal Revenue Code Section 457, whereby employees authorize the City to defer a portion of their salary to be deposited in individual investment accounts. Funds may be withdrawn by participants upon termination of employment or retirement. The City makes no contribution under the plan. As of June 30, 1998, the deferred compensation liability included in an Agency Fund was $743,199 carried at market value. All amounts of compensation deferred under the plan, all property and rights purchased with those amounts, and all income attributable to those amounts, property, or rights, are solely the property and rights of the City, subject only to the claims of the City's general creditors. Because the City handles these funds in a fiduciary capacity, the Deferred Compensation Fund is reported as an Agency Fund in the accompanying financial statements. Recently approved Federal legislation will require that Section 457 plan assets be held in trust for employees. This change, expected to be implemented by 1998, will mean that employee assets held in Section 457 plans will no longer legally remain the property of the City. At that time, they will no longer be subject to claims of the City's general creditors. f10) City Employees Retirement Plan Plan Description The City of Diamond Bar contributes to the California Public Employees Retirement System (PERS), an agent multiple -employer public employee defined benefit pension plan. PERS provides retirement, disability benefits, and death benefits to plan members and beneficiaries. PERS acts as a common investment and administrative agent for participating public entities within the State of California. Copies of PERS' annual financial report may be obtained from its executive office: 400 "P" Street, Sacramento, California 95814. Funding Policy Participants are required to contribute 7% of their annual covered salary. The City makes the contributions required of City employees on their behalf and for their account. For the year ended June 30, 1998, the amount contributed by the City on behalf of the employees was $106,842. The City is required to contribute at an actuarially determined rate calculated as a percentage of covered payroll. The employer contribution rate for the year ended June 30, 1998 was 6.646% for non -safety employees. Police and fire protection services are contracted services from outside agencies. Accordingly, no contribution is required for police and fire protection services. Benefit provisions and all other requirements are established by state statute and city contract with employee bargaining groups. 23 Notes to the Financial Statements (Continued) (10) City Employees Retirement Plan, (Continued) Annual Pension Cost (APC) For the year ended June 30, 1998, the City's annual pension cost (employer contribution) of $95,149 for miscellaneous employees was equal to the City's required and actual contributions. The required contribution was determined as part of the June 30, 1995, actuarial valuation using the entry age normal actuarial cost method. The actuarial assumptions included (a) 8.5% investment rate of return (net of administrative expenses), (b) projected annual salary increases that vary by duration of service, and (c) 2% per year cost -of -living adjustments. Both (a) and (b) included an inflation component of 4.5%. The actuarial value of PERS assets was determined using techniques that smooth the effects of short-term volatility in the market value of investments over a four-year period (smoothed market value). PERS' unfunded actuarial accrued liability is being amortized as a level percentage of projected payroll on a closed basis. PERS has combined the prior service unfunded liability and the current service unfunded liability into a single initial unfunded liability. The single funding horizon for this initial unfunded liability is June 30, 2019. Miscellaneous Employees Three -Year Trend Information Annual Pension Cost Percentage of Net Pension (' I - Fiscal Year (Employer Contribution) APC Contributed Obli ag tion 6/30/96 $91,831 100% $0 6/30/97 95,274 100% 0 6/30/98 95,149 100% 0 Required Supplementary Information Entry Age Normal Actuarial Unfunded Annual UAAL as Actuarial Accrued Value Liability/ Funded Covered a % of Valuation Date Liability of Assets (Excess Assets) Status Payroll Payroll 6/30/94 $ 693,577 $ 713,228 $ (19,651) 102.8% $1,410,051 (1.394%) _.f 6/30/95 897,229 944,519 (47,290) 105.3% 1,370,916 (3.450%) 6/30/96 1,149,112 1,260,660 (111,548) 109.7% 1,306,702 (8.537%) 24 CITY OF DIAMOND BAR Notes to the Financial Statements (Continued) (11) Due From and To Other Funds Current interfund receivables and payables balances at June 30, 1998 are as follows: General fund Special revenue funds: State gas tax Proposition A transit Proposition C transit State -local transportation partnership project Safe parks Intermodal surface transportation efficiency act Community development block grant Capital projects funds: Capital improvement Redevelopment agency Total (12) Expenditures in Excess of Appropriations Current Current Interfund Interfund Receivables Payables $ 443,209 254,620 - 30,869 - 57,400 - 127,333 - 150,178 - 598,534 - 40,304 - 68,732 630,141 - 254,620 - $1,327,970 1,327,970 Expenditures for the year ended June 30, 1998 exceeded the appropriations of the following funds: Budget Actual Variance Special revenue funds: Asset seizure $ - 1,800 (1,800) (13) Risk Management - Coverage The City participates in the California Joint Powers Insurance Authority (CJPIA). The purpose of this organization is to reduce the cost of liability insurance coverage by having the member cities act as self insurers among themselves. The City's self-insurance retention level for Comprehensive General Liability claims is $20,000 with a pro rata sharing of all member incurred losses up to $50,000,000 per occurrence. W CITY OF DIAMOND BAR Notes to the Financial Statements (Continued) 13) Risk Manaaement - Coveraae. (Continued The membership of CJPIA consists of 84 cities with similar interests and needs regarding general liability insurance. Premiums are based upon the losses incurred by the insured and rebates are possible if the losses are minimal. The Board of Directors sets the premiums, and each member city is represented on the Board. For the past three years, the City's liability for claims payable, if any, did not significantly exceed its deposit with i CJPIA and therefore no liability for claims payable has been recorded in the general long- term debt account group. In addition, for the past three years, claim payments have not exceeded the amount of applicable insurance coverage. Risk of liability is maintained with CJPIA. The City also has a policy for worker's compensation insurance with the State Compensation Insurance Fund, which insures the City for a maximum of $1,000,000 per occurrence. Any amounts exceeding $1,000,000 per occurrence are to be funded by the City's self-insurance fund. The City is required to pay insurance premiums each year based on gross payroll and past claims experience. (14) Contingent Liabilities The City is a defendant in various litigation arising in the normal course of operations. In the opinion of management and counsel, the outcome is not expected to materially adversely affect the financial position of the City. It is not certain what impact any "Year 2000" software/hardware deficiencies might have on the operations or systems of the City, or upon the operations or systems of the various vendors and government agencies that provide services or funds to the City. The scope of an audit does not include an evaluation of the adequacy of management's plans to detect or correct any "Year 2000" software/hardware deficiencies. (15) Proposition 218 Proposition 218, which was approved by the voters in November 1996, provides certain limitations over the ability of local governments within the State of California to impose, increase and extend taxes, assessments and fees. Any new, increased, or extended taxes, assessments, and fees subject to the provisions of Proposition 218, require voter approval before they can be implemented. Additionally, Proposition 218 provides that these taxes, assessments, and fees are subject to the voter initiative process and may, in some circumstances, be rescinded in the future by the voters. As a result, the government's ability to finance the services for which the taxes, assessments and fees were imposed could be significantly impaired. Significant taxes, fees, and assessments that may be 26 CITY OF DIAMOND BAR Notes to the Financial Statements (Continued) (15) Proposition 218, (Continued) subject to the provisions of Proposition 218 which the government currently imposes for its own benefit or as an agent for a special district, or receives from other governmental agencies, potentially include lighting and landscape district assessments. The City's management believes that language in the initiative is unclear as to the scope and impact of the proposition. Future court rulings or state legislation may clarify these issues. At this time management is uncertain as to the effect that Proposition 218 will have on the government's ability to maintain or increase the revenue it receives from taxes, assessments and fees, or its effect on interfimd payments in lieu of taxes. Also unclear is the extent to which Proposition 218 is impacted by a 1995 California Supreme Court ruling (the Guardino case) that upheld the voter approval requirements of a previously enacted state initiative (Proposition 62), particularly with regard to taxes imposed or increased between November 5, 1986 and December 11, 1995. (16) Change in Accounting Principle During the year ended June 30, 1998, the City implemented GASB Statement No. 31 which requires that the City use fair values (instead of amortized cost) for financial reporting purposes, as described more fully in note 1 to the financial statements. The cumulative effect of applying this statement upon the beginning fund balances (or retained earnings) of each fund was not material, and accordingly, those balances have not been restated. (17) Restatement of Beginning Fund Balances The accompanying financial statements reflect an adjustment which resulted in a restatement of beginning fund balance of the Park Fees Fund in the Special Revenue Fund. (a) The City has decreased its beginning park fees fund balance for the over -accrual of revenue for the Peterson Park lighting project. Park Fees Fund Fund balance as previously reported, June 30, 1997 $558,929 (a) Adjustment to the over -accrual of revenue _25,622) Fund balance as restated, July 1, 1997 $483,307 27 To account for all of the general revenue of the City not specifically levied or collected for other City funds and for expenditures related to rendering the general services provided by the City. 28 CITY OF DIAMOND BAR General Fund Comparative Balance Sheets Assets Cash and investments Accounts receivable Interest receivable Due from other funds Due from other governments Advances to other funds Total assets Liabilities and fund eaui Liabilities: Accounts payable Accrued payroll Deferred revenue Due to other funds Deposits Total liabilities Fund equity: Reserved for: Debt service Encumbrances Advances to the Diamond Bar Redevelopment Agency Unreserved: Designated for: Specific projects and programs Undesignated Total fimd. equity Total liabilities and Rind equity June 30, 1998 29 1998 $12,727,816 194,671 296,678 443,209 1,007,207 741.527 $15,411,108 $ 1,266,109 115,455 38,384 254,620 493.814 2,168.382 9,024 99,817 741,526 115,239 12,277,120 13,242,726 $15,411,108 1997 11,303,329 114,327 280,792 441,420 730,103 379.419 13,249,.390 1,197,373 87,554 10,320 68,060 308.672 1,671,979 13,559 429,322 379,419 113,716 10,641,395 11,577,411 13,249,390 EXHIBIT A-2 CITY OF DIAMOND BAR General Fund Revenue Detail - Budget and Actual Year ended June 30, 1998 Variance - 1998 Favorable 1997 Bum Actual (Unfavorable) Actual Real estate transfer tax $ 120,000 176,520 56,520 155,620 Sales and use tax 2,200,000 2,417,361 217,361 2,337,941 Franchise fees 650,000 725,397 75,397 638,541 Transient occupancy tax 235,000 228,720 (6,280) 311,280 Property tax allocation 2,045,000 1,963,757 81 243) 1,924,199 Total taxes 5,250,000 5,511,755 261,755 5,367,581 Licenses, permits and fees 1,171,450 1,247,155 75,705 1,024,511 Intergovernmental: Motor vehicle in lieu tax 2,450,000 2,820,469 370,469 2,848,769 Homeowners exemption 30,000 35,229 5,229 36,382 Off highway tax 1,700 881 (819) 1,164 Grants 450,000 484,515 34,515 9,294 Total intergovernmental 2,931,700 3,341,094 409,394 2,895,609 Fines and forfeits 231,000 219,075-(U.,925) 176,267 Investment income 606,000 633,803 27,803 600,844 Other revenues: Rental income 15,000 21,469 6,469 17,453 Donations - 2,156 2,156 1,590 Miscellaneous 12,000 8,757 (3,243 23,813 Total other revenues 27,000 32,382 5,382 42,856 Total revenues $10,217,150 10.985,264 768,114 10,107,668 30 CITY OF DIAMOND BAR General Fund Expenditure Detail - Budget and Actual Year ended June 30, 1998 e 31 Variance - 1998 Favorable 1997 Budget Actual Unfavorable) Actual General government: City Council $ 149,194 137,263 11,931 105,335 City Manager 476,879 490,814 (13,935) 474,458 City Clerk 263,060 236,728 26,332 218,162 Finance 259,850 253,993 5,857 225,304 City Attorney 250,000 184,495 65,505 110,861 Planning 539,606 499,766 39,840 451,789 Economic development 101,015 78,797 22,218 57,763 General government 535,140 490,296 44,844 376,616 Communication and marketing 166,240 144,280 21,960 116,566 Community Service Center 29,800 25,708 4,092 28,085 Total general government 2,770,784 2,542,140 228,644 2,164,939 Public safety: Law enforcement 3,712,050 3,667,380 44,670 3,749,325 Fire 7,530 7,359 171 7,359 Building and safety 341,000 336,800 4,200 261,451 Animal control 65,000 59,510 5,490 66,610 Emergency preparation 27,050 17,812 9,238 8,404 Total public safety 4,152,630 4,088,861 63,769 4,093,149 Public works 1,563,399 1,265,894 297,505 1,192,350 Parks, recreation, and culture 1,519,257 1,256,426 262,831 1,249,826 Capital outlay 285,900 247,987 37,913 77,146 Total expenditures $10,291,970 9,401,308 890,662 8,777,410 e 31 SPECIAL REVENUE FUNDS Special Revenue Funds are used to account for specific revenues that are legally restricted to expenditure for particular purposes. The City of Diamond Bar has fifteen Special Revenue Funds: State Gas Tax Fund - To account for state gasoline taxes received under Sections 2105, 2106, 2107 and 2107.5 of the Streets and Highways Code. State law requires that these revenues be utilized solely for street related purposes. Proposition A Transit Fund - To account for the receipt and expenditure of the City's share of the ( %2 cent sales tax levied in Los Angeles County for local transit purposes. Proposition C Transit Fund - To account for the receipt and expenditure of Proposition C funds from the Los Angeles County Metropolitan Transportation Authority for the City's transit and transit -related improvement projects. Intermodal Surface Transportation Efficiency Act (ISTEA) Fund - To account for the receipt and disbursement of funds received under the Federal Intermodal Surface Transportation Efficiency Act (ISTEA) of 1991 program. This program restructured the Federal -Aid Highway Program and revenues are awarded to local agencies by the Orange County Transportation Authority and/or the State of California Department of Transportation. Integrated Waste Management Fund - To account for revenues and expenditures related to the City's waste reduction efforts as related to AB939. State -Local Transportation Partnership Project (SLTPP) Fund - To account for the receipt and disbursement of funds under the State -Local Transportation Partnership Program Guidelines dated June 8, 1994. The fundings are awarded for the street rehabilitation projects of local agencies by the State of California Department of Transportation. Air Quality Improvement Fund - To account for motor vehicle registration fees received from the South Coast Air Quality Management District to reduce air pollution from motor vehicles pursuant to the California Clean Air Act of 1988. Bicycle and Pedestrian Fund - To account for revenues and expenditures related to the receipt of state funds allocated for the purpose of the construction of bike and pedestrian paths. i Park Fees Fund - To account for revenues received and expenditures made for park development and improvement. The primary source of revenue is park development fees collected from developers under the State of California's Quimby Act. Proposition A Safe Parks Fund - To account for funds received and expended as a result of the approval of the Los Angeles County Safe Neighborhood Parks Act passed in 1992. This Act provides funds to cities to improve, preserve, and restore parks. Park and Facility Development Fund - To account for the development and enhancement of the City's parks. 32 SPECIAL REVENUE FUNDS, (CONTINUED) Community Development Block Grant Fund - To account for the City's allotment of CDBG funds from the federal government via the County of Los Angeles Community Development Commission. These funds are used to fund community development programs and projects benefiting low and moderate income citizens. Citizens Option for Public Safety Fund (COPS) - To account for COPS grants received from both the state and federal government. The purpose of these funds are to enhance the City's public safety budget and to fund special public safety related projects. Asset Seizure Fund - To account for Narcotics Asset Forfeiture funds received from the federal government. It is required that these funds be used to enhance drug and law enforcement activities. Landscape Maintenance Districts Funds - To account for revenues and expenditures related to the special property tax assessments which were set up in accordance with the Landscape and Lighting Act of 1972. The purpose of these districts is to improve the landscaping of City owned medians and hillsides. 33 (This page intentionally left blank) CITY OF DIAMOND BAR Special Revenue Funds Combining Balance Sheet June 30, 1998 Liabilities and fund balances Liabilities: Accounts payable $ - 70,866 - Integrated 1,274 Bicycle Accrued payroll State Prop. A Prop. C Waste Air Quality and Retentions payable Gas Tax Transit Transit ISTEA Management SLTPP Improvement Pedestrian Assets 30,869 57,400 127,333 40,304 - 150,178 - - Cash and investments $2,624,444 1,707,011 2,076,845 - 177,543 - 135,692 29,259 Accounts receivable - - - - 23,766 - - - Due from other 30.869 128,759 195.412 40,304 29.154 150,178 1,617 16,308 governments 107.725 56,010 75.422 40.304 16,179 150,178 16,008 Total assets $2,732,169 1,763,021 2,152,267 40.304 217,488 150,178 151,700 29,259 Liabilities and fund balances Liabilities: Accounts payable $ - 70,866 - 28,067 - 1,274 - Accrued payroll - 493 - - 1,087 - 343 - Retentions payable - - 68,079 - - _ - _ Due to other funds 30,869 57,400 127,333 40,304 - 150,178 - - Due to other governments - 16.308 Total liabilities 30.869 128,759 195.412 40,304 29.154 150,178 1,617 16,308 Fund balances: Reserved for: Encumbrances 31,040 12,600 622,651 Contingencies - - _ Unreserved: Designated for: Specific projects and programs 2,670,260 1,621,662 1.334,204 188,334 150.083 12,951 Total fund balances 2,701,300 1,634,262 1.956,855 188.334 150,083 12,951 Total liabilities and fund balances $2,732.169 1,763,021 2.152.267 40.304 217,488 150,178 151,700 29.259 34 Park and Community Landscape Park Prop. A Facility Development Asset Maintenance Fees Safe Parks Development Block Grant COPS Seizure Districts 205,431 - 1,356,441 598,534 205.431 598,534 1,356,441 EXHIBIT B -i Totals 1998 1997 - 269,009 319,508 885,072 9,786,255 8,123,195 - - - - 23,766 13,148 78,664 61.629 16,913 1,217,566 739.113 78.664 330.638 319.508 901,985 11.027.587 8,875.456 9,845 14,611 54,290 178,953 129,759 - - - 1,003 2,926 4,029 - - - - - - 68,079 - 598,534 - 68,732 - - - 1,073,350 479,249 16,308 16.308 598.534 78,577 14,611 55.293 1.339,616 629.345 23,373 - - 87 - - - 689,751 .1,134,228 - - - - - - - - 99,000 182,058 - 1,356,441 - 316.027 319.508 846,692 8,998,220 7,012,883 205,431 1.356,441 87 316,027 319.508 846.692 9.687.971 8.246.111 205,431 598,534 1.356,441 78,664 330.638 319.508 901,985 11,027,587 8.875,456 35 CITY OF DIAMOND BAR Special Revenue Funds Combining Statement of Revenues, Expenditures and Changes in Fund Balances Year ended June 30, 1998 wi Integrated Bicycle State Prop. A Prop. C Waste Air Quality and Gas Tax Transit Transit ISTEA Management SLTPP Improvement Pedestrian Revenues: Special Assessments $ Licenses, permits and fees Intergovernmental 1,198,242 621,821 543,733 591,351 16,179 150,178 61,465 - Charges for services - 328,370 - - 103,650 - - _ Investment income 146,951 90,319 114,706 - 8,163 - 6,193 1,577 Other revenues Total revenues 1,345,193 1,040,510 658,439 591,351 127,992 150,178 67,658 1,577 Expenditures: Current: Public safety - - - _ _ _ _ _ Highways and streets - 11,468 - - - _ Public works - 682,893 - - 80,932 - Community development - - - - - - 32,756 - Parks, recreation and culture - 409,772 - - - _ _ _ Capital outlay 823 Total expenditures - 1,104,133 80,932 33.579 Excess (deficiency) of revenues over (under) expenditures 1,345.193 (63,623 658,439 591,351 47,060 150,178 34,079 1,577 Other financing sources (uses): Operating transfers out _ (1,230,534) (57,400 744.083 (591,351 - 150,178 - - Total other financing sources (uses) (1,230,534) 57 40074( 4,083) (591,351 - 150,178 - - Excess (deficiency) of revenues and other financing sources over (under) expenditures and other financing uses 114,659 (121,023) (85,644) - 47,060 - 34,079 1,577 Fund balances at beginning of year, as restated 2,586,641 1,755,285 2,042,499 - 141,274 116,004 11.374 Fund balances at end of year $2.701,300 1,634,262 1,956,855 188,334 150,083 12,951 wi EXHIBIT B-2 - - - - 3,740 1,800 - 5,540 2,369 Park and Community - - - - - - 351,477 1,115,302 972,655 Landscape 128,508 - - - - - - - 409,772 Park Prop. A Facility Development 1,243.375 Asset Maintenance Totals Fees, Safe Parks Development Block Grant COPS Seizure Districts 1998 1997 - - - - - - 561,772 561,772 530,375 - - - - - - - - 271,562 - 2,072,679 - 385,774 192,038 3,495 - 5,836,955 3,438,347 - - - - - - - 432,020 340,448 29,191 - 58,866 - 12,726 17,242 37,453 523,387 397,252 1.297,575 1,297,575 29.191 2,072,679 1,356,441 385,774 204,764 20,737 599,225 8,651,709 4,977.984 - - - - 3,740 1,800 - 5,540 2,369 - - - - - - - 11,468 13,791 - - - - - - 351,477 1,115,302 972,655 - - - 107,092 - - - 139,848 128,508 - - - - - - - 409,772 20,791 - - 19.587 - 20,410 105.261 _ - - 107,092 23.327 1,800 351,477 1,702.340 1,243.375 29.191 2.072.679 1.356.441 307.067 2.072 679 307.067 2.072 679 (277,876) - 1,356,441 483.307 205.431 1.356,441 278,682 181,437 18,937 247,748 6,949,369 3,734,609 27( 8,595) 5.431,887 (2,005.347 278,595 5,431,887 2,005 347 87 181,437 18,937 247,748 1,517,482 1,729,262 134,590 300,571 598,944 8,170,489 6.516,849 87 316.027 319.508 846.692 9.687.971 8,246,111 37 CITY OF DIAMOND BAR State Gas Tax Fund Statement of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual Year ended June 30, 1998 - 38 Variance Favorable Budget Actual (Unfavorable) Revenues: Intergovernmental $ 978,500 1,198,242 219,742 Investment income 140,000 146,951 6,951 Total revenues _ 1,118,500 1,345,193 226,693 Excess of revenues over expenditures 1,118,500 1,345,193 226,693 Other financing sources (uses): Operating transfers out (2,554,874) (L230 534) 1,324,340 Total other financing sources (uses) _(2,554,874) (L2L0.,534) 534) 1,324,340 Excess (deficiency) of revenues and other financing sources over (under) expenditures and other financing uses (1,436,374) 114,659 1,551,033 Fund balances at beginning of year 2,586,641 2,586,641 - Fund balances at end of year $1,150,267 2,701 300 1,551,033 38 CITY OF DIAMOND BAR Proposition A Transit Fund Statement of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual Year ended June 30, 1998 Variance Favorable Budget Actual (Unfavorable) Revenues: Intergovernmental $ 630,150 621,821 (8,329) Charges for services 378,000 328,370 (49,630) Investment income 80,000 90,319 10,319 Total revenues 1,088,150 1,040,510 (4Z&40) Expenditures: Current: Highways and streets 25,520 11,468 14,052 Public works 725,220 682,893 42,327 Parks, recreation and culture 422,000 409,772 12,228 Total expenditures 1,172,740 1,104,133 68,607 Excess (deficiency) of revenues over (under) expenditures 84 590) 63,623) 20,967 Other financing sources (uses) Operating transfers out 100 000) 57 400) 42,600 Total other financing sources (uses) (100,000) 57 400 42,600 Excess (deficiency) of revenues and other financing sources over (under) expenditures and other financing uses (184,590) (121,023) 63,567 Fund balances at beginning of year 1,755,285 1,755,285 - Fund balances at end of year $1,570,695 1,634,262 63,567 39 CITY OF DIAMOND BAR Proposition C Transit Fund Statement of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual Year ended June 30, 1998 Variance Favorable Budget Actual (Unfavorable) Revenues: Intergovernmental $ 526,600 543,733 17,133 Investment income 80,000 114,706 34,706 Total revenues 606,600 658,439 51,839 Excess of revenues over expenditures 606,600 658,439 51,839 Other financing sources (uses) Operating transfers out (1,540,800) (744,083) 796,717 Total other financing sources (uses) (1,540,800) 744 083 796,717 Excess (deficiency) of revenues and other financing sources over (under) expenditures and other financing uses (934,200) (85,644) 848,556 Fund balances at beginning of year 2,042,499 2,042,499 - Fund balances at end of year $1,108,299 1,956,855 848,556 40 EXHIBIT B-6 ' CITY OF DIAMOND BAR ISTEA Fund Statement of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual Year ended June 30, 1998 I Variance i Favorable Budget Actual (Unfavorable) Revenues: Intergovernmental $ - 591,351 591,351 Total revenues - 591,351 591,351 Excess of revenues over expenditures - 591,351 591,351 („ Other financing sources (uses): I Operating transfers out - (591,351) (591,351) Total other financing sources (uses) - (591 351 (52L3 Excess (deficiency) of revenues and other financing sources over (under) expenditures and other financing uses - - - 1 Fund balances at beginning of year - - - Fund balances (deficit) at end of year 1'. CITY OF DIAMOND BAR EXHIBIT B-7 Integrated Waste Management Fund Statement of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual Year ended June 30 1998 42 Variance Favorable Budget Actual ([Jnfavorable) Revenues: Intergovernmental $ 17,360 16,179 (1,181) Charges for services 65,500 103,650 38,150 Investment income 5,000 8,163 3,163 Total revenues 87,860 127,992 40,132 Expenditures: Current: Public works 102,553 80,932 21,621 Total expenditures 102,553 80,932 21,621 Excess (deficiency) of revenues over (under) expenditures (14,693) 47,060 61,753 Fund balances at beginning of year 141,274 141,274 - Fund balances at end of year $126,581 188,334 61,753 42 CITY OF DIAMOND BAR SLTPP Fund Statement of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual Year ended June 30, 1998 43 Variance Favorable Budget Actual (Unfavorable) Revenues: Intergovernmental $42,500 150,178 107,678 Total revenues 42,500 150,178 107,678 Excess of revenues over expenditures 42,500 150,178 107,678 Other financing sources (uses): Operating transfers out -a2-,500)— (j50 178) (107,678) Total other financing sources (uses) 142,500) (159,178) (107 678 Excess of revenues over expenditures - - - Fund balances at beginning of year - - - Fund balances at end of year $ - - - 43 IM121116.112J CITY OF DIAMOND BAR Air Quality Improvement Fund Statement of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual Year ended June 30, 1998 Variance Favorable Budget Actual (Unfavorable) Revenues: Intergovernmental $ 45,000 61,465 16,465 Investment income 7.500 6,193 jja0j7 Total revenues 52,500 67,658 15,158 Expenditures: Current: Community development 54,460 32,756 21,704 Capital outlay 6,045 823 5,222 Total expenditures 60,505 33,579 26,926 Excess (deficiency) of revenues over (under) expenditures (8,005) 34,079 42,084 Fund balances at beginning of year 116,004 116,004 - Fund balances at end of year $107.999 150,083 42.084 44 CITY OF DIAMOND BAR Bicycle and Pedestrian Fund Statement of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual Year ended June 30, 1998 Variance Favorable Budget Actual (Unfavorable) Revenues: Investment income 1,577 1,577 Total revenues 1,577 1,577 Excess of revenues over expenditures - 1,577 1,577 Fund balances at beginning of year 11,374 11,374 Fund balances at end of year $11,374 12,951 1,577 45 EXHIBIT B-11 CITY OF DIAMOND BAR Park Fees Fund Statement of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual Year ended June 30 1998 46 Variance Favorable Budget Actual (Unfavorable) Revenues: Investment income $ 20,000 29,191 9,191 Total revenues 20,000 29,191 9,191 Excess of revenues over expenditures 20,000 29,191 9,191 Other financing sources (uses): Operating transfers out 620 000) (307,067) 312,933 Total other financing sources (uses)620 000) (307,067) 312,933 Excess (deficiency) of revenues and other financing sources over (under) expenditures and other financing uses (600,000) (277,876) 322,124 Fund balances at beginning of year, as restated 558,929 483,307 75 622 Fund balances (deficit) at end of year $ 41 071 205,431 246,502 46 CITY OF DIAMOND BAR Proposition A Safe Parks Fund Statement of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual Year ended June 30, 1998 47 Variance Favorable Budget Actual (Unfavorable) Revenues: Intergovernmental $2,056,000 2,072,679 16,679 Total revenues 2,056,000 2,072,679 16,679 Excess of revenues over expenditures 2,056,000 2,072,679 16,679 Other financing sources (uses): Operating transfers out (2,056,000) (2,072,679) (16,679) Total other financing sources (uses) (2,056,000) Q.022 679) (!6,679) Excess of revenues and other financing sources over expenditures and other financing uses - - - Fund balances at beginning of year - - - Fund balances at end of year $ - - - 47 CITY OF DIAMOND BAR Park and Facility Development Fund Statement of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual Year ended June 30, 1998 Variance Favorable Budget Actual (Unfavorable Revenues: Investment income $ - 58,866 58,866 Other revenues 1,300,000 1,297,575 2 425 Total revenues 1,300,000 1,356,441 56,441 Excess of revenues over expenditures 1,300,000 1,356,441 56,441 Fund balances at beginning of year - - - Fund balances at end of year $1,300,000 1,356,441 56,441 48 CITY OF DIAMOND BAR Community Development Block Grant Fund Statement of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual Year ended June 30, 1998 49 Variance Favorable Budizet Actual (Unfavorable) Revenues: Intergovernmental $688.560 385,774 (302,786) Total revenues 688,560 385,774 (302,786) Expenditures: Current: Community development 139.511 107,092 32,419 Total expenditures 139.511 107,092 32,419 Excess of revenues over expenditures 549.049 278,682 (270,367) Other financing sources (uses): Operating transfers out�.520 (278.595) 270,925 Total other financing sources (uses)_k549.520) (278595) 270,925 Excess (deficiency) of revenues and other financing sources over (under) expenditures and other financing uses (471) 87 558 Fund balances at beginning of year - Fund balances (deficit) at end of year L --L471) 87 558 49 laxffjavaClt CITY OF DIAMOND BAR COPS Fund Statement of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual Year ended June 30, 1998 Variance Favorable Budget Actual (Unfavorable) Revenues: Intergovernmental $193,400 192,038 (1,362) Investment income 7,000 12,726 5,726 Total revenues 200,400 204,764 4,364 Expenditures: Current: Public safety 115,000 3,740 111,260 Capital outlay 121,000 19,587 101,413 Total expenditures 236,000 23,327 212,673 Excess (deficiency) of revenues over (under) expenditures (35,600) 181,437 217,037 Fund balances at beginning of year 134,590 134,590 - Fund balances at end of year 98,990 316,027 217,037 50 CITY OF DIAMOND BAR Asset Seizure Fund Statement of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual Year ended June 30, 1998 Variance Favorable Budget Actual CUnfavorable) Revenues: Intergovernmental 3,495 3,495 Investment income 17.242 17,242 Total revenues 20.737 20,737 Expenditures: Public safety 1,800 J1 800) Total expenditures 1,800 -(1,800) Excess of revenues over expenditures 18,937 18,937 Fund balances at beginning of year 300,571 300.571 - Fund balances at end of year $300,571 319.508 18,937 51 CITY OF DIAMOND BAR EXHIBIT B-17 Landscape Maintenance Districts Funds Statement of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual Year ended June 30, 1998 Variance Favorable Budge Actual (Unfavorable) Revenues: Special assessments $549,616 561,772 12,156 Investment income 15,600 37,453 21,853 Total revenues 565.216 599,225 34,009 Expenditures: Current: Public works 459,277 351,477 107,800 Total expenditures 459,277 351,477 107,800 Excess of revenues over expenditures 105,939 247,748 141,809 Fund balances at beginning of year 598,944 598,944 - Fund balances at end of year $704.,883 846.,692 141,809 52 CAPITAL PROJECTS FUNDS Capital Projects Funds are used to account for the purchase or construction of major capital facilities which are not financed by Proprietary Funds or Trust Funds. Capital Projects Funds are ordinarily not used to account for the acquisition of furniture, fixtures, machinery, equipment and other relatively minor or comparatively short-lived general fixed assets. The City of Diamond Bar has three Capital Projects Funds: Grand Avenue Construction Fund - To account for the expenditure of funds received from the County of San Bernardino in settlement of the Grand Avenue litigation. These funds are used for street and traffic improvements along Grand Avenue. Capital Improvement Fund - To account for the costs of constructing street improvements, park improvements, and other public improvements not normally included within the other Capital Projects funds. Financing is provided by developer fees and interfund transfers from the Special Revenue Funds and the General Fund. Redevelopment Ag�encfFund - To account for general fund monies transferred to the Redevelopment Agency for approved capital projects and administrative costs. 53 CITY OF DIAMOND BAR Capital Projects Funds Combining Balance Sheet June 30, 1998 I 54 Grand Avenue Capital Redevelopment Totals Construction Improvement Agencv 1998 1997 Assets Cash and investments $139,131 62,453 - 201,584 762,904 Due from other funds 630,141 254,620 884,761 105,889 Total assets $139,131 692,594 254,620 1,086..,345 868,793 Liabilities and fund balances Liabilities: Accounts payable $ 419,481 254,620 674,101 425,280 Accrued payroll 699 - 699 621 Retentions payable - - - 58,375 Total liabilities 420,180 254,620 674,800 484,276 Fund balances: Reserved for: Encumbrances - Unreserved: Designated for: Specific projects and programs 139,131 272,414 411,545 384,517 Total fund balances 139,131 272,414 411,545, 384,517 Total liabilities and fund balances $139,131 692,594 254..,620 1,086,345, 868,793 54 EXHIBIT C-2 CITY OF DIAMOND BAR Capital Projects Funds Combining Statement of Revenues, Expenditures and Changes in Fund Balances Year ended June 30, 1998 Grand Avenue Capital Redevelopment Totals Construction Improvement Agency 1998 1997 Revenues: Licenses, permits and fees $ - - - - 121,000 Intergovernmental - - - - 22,059 Investment income - 9,364 - 9,364 7,587 Total revenues - 9,364 - 9,364 150,646 Expenditures: Current: Highways and streets Public - 1,852,708 - 1,852,708 956,442 works - 21,230 - 21,230 114,726 Community development - 129,226 334,043 463,269 321,825 Capital outlay Debt service: - 3,056,454 - 3,056,454 388,667 Interest - - 28,064 28,064 10,320 Total expenditures - 5,059,618 362,107 5,421,725 1,791,980 Excess (deficiency) of revenues over (under) expenditures - (5,050,254) (362,107) 5 412 361) (1 64, 1,334) Other financing sources: Operating transfers in_ 5,077,282 - 5,077,282 1,395,305 Proceeds of advances 362,107 362,107 331,392 Total other financing sources - 5,077,282 362,107 5,439,389 1,726,697 Excess of revenues and other financing sources over expenditures - - 27,028 27,028 85,363 Fund balances at beginning of year 139,131 245,386 - 384,517 299,154 Fund balances at end of year $139,131 272,414 - 411,545 384,517 55 CITY OF DIAMOND BAR Grand Avenue Construction Fund Statement of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual Year ended June 30, 1998 Expenditures: Current: Highways and streets Total expenditures Excess of revenues over expenditures Other financing sources: Operating transfers in Total other financing sources Excess of revenues and other financing sources over expenditures Fund balances at beginning of year Fund balances at end of year Variance Favorable Budget Actual (LJnf4vo!ghjgj 139,131 139,131 $139,131 139,131 56 CITY OF DIAMOND BAR Capital Improvement Fund Statement of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual Year ended June 30, 1998 Variance Favorable Budget Actual (Unfavorable) Revenues: Licenses, permits and fees $ 35,000 - (35,000) Investment income - 9,364 9,364 Total revenues 35,000 9,364 25 636 Expenditures: Current: Highways and streets 4,181,391 1,852,708 2,328,683 Public works - 21,230 (21,230) Community development 39,110 129,226 (90,116) Capital outlay 4,507,456 3,056,454 1,451,002 Total expenditures 8,727,957 5,059,618 3,668,339 Excess (deficiency) of revenues over (under) expenditures (8,692,957) (5.05U54 3,642,703 Other financing sources: Operating transfers in 7,034,524 5,077,282 (1,957,242) Total other financing sources 7,034,524 5,077,282 (1 957 242 Excess (deficiency) of revenues and other financing sources over (under) expenditures (1,658,433) 27,028 1,685,461 Fund balances at beginning of year 245,386 245,386 - Fund balances (deficit) at end of year $(1,413,047) 272,414 1,685,461 57 EXHIBIT C-5 CITY OF DIAMOND BAR Redevelopment Agency Fund Statement of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual Year ended June 30, 1998 58 Variance Favorable Budget Actual (Unfavorable) Expenditures: Current: Community development $413,370 334,043 79,327 Debt service: Interest - - 28.064 (28,064) Total expenditures 413,370 362,107 51,263 Excess (deficiency) of revenues over (under) expenditures (413,370) (362.107 51,263 Other financing sources: Proceeds of advances from the City 150,250 362,107 211,857 Total other financing sources 150,250 362.107 211,857 Excess (deficiency) of revenues and other financing sources over (under) expenditures (263,120) - 263,120 Fund balances at beginning of year - Fund balances (deficit) at end of year jQal20 j 263,120 58 AGENCY FUND Agency Funds are used to account for assets held by a government as an agent for individuals, private organizations, other governments and/or other funds. The City of Diamond Bar has one Agency Fund: Deferred Compensation Agency Fund - To account for monies held in trust by the City for employees who elect to defer a portion of their salary until retirement. 59 CITY OF DIAMOND BAR Agency Fund Statement of Changes in Assets and Liabilities Year ended June 30, 1998 Deferred Compensation Fund Balance at Balance at July 1, 1997 Additions Deductions June 30, 1998 Assets Cash and investments $538,325 209.468 45 ,94 743,199 Liabilities Deferred compensation payable $538.,325 209,468 4,594 743,199 60 GENERAL FIXED ASSETS ACCOUNT GROUP 61 CITY OF DIAMOND BAR Comparative Schedule of General Fixed Assets by Source June 30, 1998 General fixed assets: Land Buildings Improvements other than buildings Furniture and equipment Total general fixed assets Investment in general fixed assets by source: General fund Donations Federal and state governments Assessment districts Total investment in general fixed assets 1998 $1,569,898 1,159,345 2,915,351 1,123.443 6,768.037 3,432,721 162,949 3,159,779 12.588 $6,768,037 1997 1,969,899 859,345 579,301 915.333 4323.878 3,144,189 97,949 1,069,152 12.588 4,323,878 1►;i. 1: CITY OF DIAMOND BAR Schedule of General Fixed Assets by Function and Activity June 30, 1998 63 Improvements Furniture Other than and Function and Activity Land Buildings Buildings Equipment Total General government: City council $ - - - 8,969 8,969 Administration - - - 652,397 652,397 City clerk - - - 27,223 27,223 Community development - - - 19,563 19,563 Finance - - - 71,911 71,911 Other 9,898 - 11,000 20,898 Total general government 9,898 791,063 800,961 Public safety: Sheriff - - - 102,077 102,077 Emergency preparedness - - 33,233 33,233 Total public safety - 135,310 135,310 Public works - - 22,463 22,463 Culture and recreation 1,560,000 1,159,345 2,915,351 142,180 5,776,876 Library - 32,427 32,427 Total general fixed assets $1,569,898 1,159,345 2,915,351 1,123,443 6,768,037 63 EXHIBIT E-3 CITY OF DIAMOND BAR Schedule of Changes in General Fixed Assets by Function and Activity Year ended June 30, 1998 Public safety: Sheriff Balance at 17,772 102,077 Balance at Function and Activity June 30, 1997 Additions Deletions June 30, 1998 General government: 135,310 Public works 22,463 City council $ 8,969 - - 8,969 Administration 482,297 210,461 40,361 652,397 City clerk 23,301 3,922 - 27,223 Community development 19,563 - 19,563 Finance 62,134 9,777 - 71,911 Other 420,899 400,001 20,898 Total general government 1,017,163 224,160 440,362 800,961 Public safety: Sheriff 84,305 17,772 102,077 Emergency preparedness 26,833 6,400 33,233 Total public safety 111,138 24,172 135,310 Public works 22,463 22,463 Culture and recreation 3,140,254 2,636,622 - 5,776,876 Library 32,860 433 32,427 Total general fixed assets $4,323,878 2,884,95.4 440,795 6,768,037 64 Table 1 City of Diamond Bar General Governmental Expenditures by Function (1) Since Incorporation in April, 1989 (unaudited) Fiscal General Public Public Culture & Capital Debt Year Government* Safe Works Recreation Outlay* Service Total 1988-89 $249,482 $438,805 $90,927 $31,296 $0 $6,325 $816,835 1989-90 $2,509,540 $3,235,362 $1,143,795 $357,604 $1,027,049 $90,842 $8,364,192 - 1990-91 $3,322,753 $3,600,879 $1,397,501 $603,997 $949,540 $0 $9,874,670 1991-92 $2,923,206 $3,794,887 $1,673,144 $740,687 $359,931 $0 $9,491,855 1992-93 $2,963,968 $3,478,006 $2,094,910 $822,559 $1,876,098 $100,000 $11,335,541 1993-94 $2,456,056 $3,819,724 $2,310,313 $976,957 $1,638,409 $564,790 $11,766,249 1994-95 $2,270,162 $4,099,515 $2,678,261 $1,072,288 $1,726,067 $108,780 $11,955,073 1995-96 $2,319,801 $4,110,104 $2,372,404 $1,127,136 $1,579,421 $104,930 $11,613,796 1996-97 $2,615,272 $4,095,518 $2,279,731 $1,270,617 $1,541,307 $10,320 $11,812,765 1997-98 $3,145,257 $4,094,401 $2,402,426 $1,666,198 $5,189,027 $28,064 $16,525,373 Total General Fund Expenditures 18 16 im 14 12 c 10 _o 8 6 4 2 0 1988-89 1989-90 1990-91 1991-92 1992-93 1993-94 1994-95 1995-96 1996-97 1997-98 Fiscal Year (1) Includes General, Special Revenue and Capital Project Funds. * Note: General Government includes Community Development Expenditures Capital Outlay includes Street & Highways Expenditures Source: City Finance Department 65 Table 2 City of Diamond Bar General Governmental Revenues by Source (1) Since Incorporation in April, 1989 (unaudited) Fiscal Special Licenses & Inter- Fines & Use of Money Other Year Taxes* Assessments Permits Governmental Forfeitures & Property Revenue Total 1988-89 $21,093 $0 $112,578 $1,371,326 $1,946 $1,650 $46,625 $1,555,218 1989-90 $3,497,401 $409,454 $841,525 $5,271,606 $193,852 $440,520 $8,313 $10,662,671 1990-91 $4,409,302 $422,038 $597,771 $5,993,281 $281,891 $506,081 $55,307 $12,265,671 1991-92 $4,593,790 $466,369 $864,260 $5,067,309 $97,730 $578,340 $273,078 $11,940,876 1992-93 $4,494,173 $469,671 $724,694 $5,910,715 $123,242 $451,077 $101,305 $12,274,877 1993-94 $5,060,850 $499,030 $965,835 $5,539,046 $187,430 $466,209 $38,372 $12,756,772 1994-95 $5,174,343 $476,148 $881,588 $5,640,400 $253,824 $732,693 $56,399 $13,215,395 1995-96 $5,538,406 $538,896 $1,066,475 $5,735,096 $261,138 $863,855 $50,787 $14,054,653 1996-97 $5,708,029 $530,375 $1,417,073 $6,354,150 $176,267 $1,005,683 $42,856 $15,234,433 1997-98 $5,943,775 $561,772 $1,247,155 $9,178,049 $219,075 $1,166,554 $1,329,957 $19,646,337 Total General Governmental Revenues 22 20 18 16 14 c 12 o_ 10 8 6 4 2 0 1988-89 1989-90 1990791 1991-92 1992-93 1993-94 1994-95 1995-96 1996-97 1997-98 Fiscal Year (1) Includes General, Special Revenue and Capital Project Funds Note: 1991-1992 "Other Revenue" includes $179,679 of developer fees collected in the Special Revenue Fund * Note: Taxes category includes Charges for Services. Source: City Finance Department Fiscal Year 1988-89 1989-90 1990-91 1991-92 1992-93 1993-94 1994-95 1995-96 1996-97 1997-98 2,000 1,500 v c 1,000 0 H 500 City of Diamond Bar Secured Property Tax Levies and Collections Since Incorporation April 1989 (unaudited) Total Current Levy Not Available $908,401 $1,089,679 $1,232,346 $1,117,482 $1,180,435 $1,804,068 $1,796,593 $1,809,197 $1,781,264 Total Current Percent of Levy Deliquent Tax Collections Collected Receivables Not Available $835,873 $1,013,572 $1,144,019 $1,025,382 $818,467 $1,625,911 $1,711,983 $1,625,252 $1,680,816 Not Available 92.02% 93.02% 92.83% 91.76% 69.34% 90.12% 95.29% 89.83% 94.36% Property Tax Collections (in thousands) Not Available $72,529 $76,107 $88,327 $92,101 $361,969 $178,157 $84,610 $183,946 $100,449 Table 3 0 1988-89 1989-90 1990-91 1991-92 1992-93 1993-94 1994-95 1995-96 1996-97 1997-98 Fiscal Year Note: The City of Diamond Bar settled a property tax lawsuit with Los Angeles County that resulted in additional property tax payments totalling $1,882,789. The funds were received in three (3) payments payments dated February 1994, August 1994 and August 1995. These amounts are not included in the above figures as they were associated with the initial property tax transfer at the date of incorporation. Source: Los Angeles County Auditor/Controller M Table 4 City of Diamond Bar Assessed and Estimated Actual Values of Taxable Property Since Incorporation inApril, 1989 (unaudited) Tam Secured Gross Unsecured Gross Percentage Year Value Value Public U0dy Ex-emptions Net Value Increase 1988-89° - $2.345.946'186 $8 $O $U $2.345.946.185 Not Applicable 1980'90° $2.663.648'618 $O $O $U $2.663.848.618 13.54% 1080'91 $2.826.388.105 $0 $827.818 G5.409.199 $2.021.786.524 9.69% 1991-93 $3.285'467.698 $40.688.263 $602.390 $10'921.887 $3.315.936.684 13.49% 1092'83 $3.493.803.851 $45.032.160 $0°° $27.932.643 $3.510.903.368 5.88!& 1993'94 $3.536.453.242 $49.700.273 $844.313 $25.110.888 $3.501.887.140 1.45% 1994'35 $3.819.436.021 $57.158.841 $820.862 $33.523.553 $3.643,892.171 2.30% 1885-96 $8.859.337.878 $60.689.091 $825.138 Q35.979.540 $3.884'872.585 1.12% 1996-97 $3.668.223.970 $64.187.086 $828.963 $27.479.616 $3.697.780.412 0.35% 1997-98 $3.645.884.575 $67.863.390 $884.347 $37.731.128 $3.677.011.183 -0.56% Net Assessed Value (in millions) 4,000 3,500 2,500 2,000 1988-89* 1989-90* 1990-91 1991-92 1992-93 1993-94 1994-95 1995-96 1996-97 1997-98 1 Fiscal Year *1988-89 and 1989-90 estimated by using the combined unincorporated areas of Pomona Unified School and Walnut Valley Unified School District ' Source: California Municipal Statistics Los Angeles County Auditor/Controller reported no Public Utility Valuations Source Los Angeles County Auditor/ContruUor,HdLComn&Cone M. Typical Property Tax Rates (Percent of Assessed Value) 2.000 City of Diamond Bar 1.750 1.500 Property Tax Rates - All Direct and Overlapping Governments 1.250 1.000 (Per $100 of Assessed Valuation) 0.750 0.500 Since Incorporation in April, 1989 0.250 i 0.000 1988-89 1989-90 1990-91 1991-92 1992-93 1993-94 1994-95 1995-96 1996-97 1997-98 Fiscal Year (unaudited) Fiscal General Los Angeles Walnut Valley Walnut Valley L.A. County L.A. County Metropolitan Year LM Coun School District Water District Flood Control Sanitation Water District 1988-89 1989-90 - - - - -- -" i 1990-91 1.0000000 0.0021040 0.1597230 0.0578770 0.0057860 0.0007470 0.0097000 1991-92 1.0000000 0.0018880 0.0404290 0.0516750 0.0053760 0.0002090 0.0089000 1992-93 1.0000000 0.0014090 0.0974170 0.0481650 0.0033970 0.0002060 0.0089000 1993-94 1.0000000. 0.0017130 0.0863570 0.0448070 0.0042120 0.0000000 0.0089000 1994-95 1.0000000 0.0019930 0.0649030 0.0000000 0.0060410 0.0000000 0.0089000 1995-96 1.0000000 0.0018140 0.0089866 0.0000000 0.0009630 0.0000000 0.0089000 1996-97 1.0000000 0.0016040 0.0850380 0.0000000 0.0019910 0.0000000 0.0089000 1997-98 1.0000000 0.0015840 0.1025300 0.0000000 0.0021970 0.0000000 0.0089000 Typical Property Tax Rates (Percent of Assessed Value) 2.000 1.750 1.500 1.250 1.000 0.750 0.500 0.250 0.000 1988-89 1989-90 1990-91 1991-92 1992-93 1993-94 1994-95 1995-96 1996-97 1997-98 Fiscal Year Note: Property tax rates based on a typical tax rate area Source: Los Angeles County Auditor/Controller, HdL Coren & Cone 69 Table 5 TooAai Not Available Not Available 1.2359370 1.1084770 1.1594940 1.1459890 1.0818370 1.0206636 1.0975330 1.1152110 Taxpayer Diamond Bar Business Associates K8&HRealty PamarsU Hidden Manna Corporation PGP Inland Communities Nikko Capital Corporation Shea Homes Limited Partnership Martin Brattrud Properties Arden Realty Limited Partnership Meyer NugitTrust, Et. Al. Corporate Fund for Housing Source: HdLComn&Cone City of Diamond Bar Principal Taxpayers June 30, 1998 In . 1987-1998 Percentage of Total Prima[y Use Assessed Valuation Net Assessed Valuation Commercial $28.948'601 8.80Y6 Connnlevcio| $20'668.119 0.55Y6 Commercial $19.377.839 0.5296 Residential $12.184.800 0.3396 Commercial $11.585'739 0.31Y6 Industrial $11'101'622 0.30Y6 Commercial 810.087'357 0.29Y6 Connnnoncia| $10.400'447 0.28Y6 Commercial $8.835.664 0.26% Residential $8,815,486 0.24% In . City of Diamond Bar Computation ofLegal Debt Margin June 30, 1 8 Assessed Valuations: Assessed Valu Add Back: Exempt Property Total Assessed Value Legal Debt Debt Limitation -1596ofTotal Assessed Value* Debt Applicable boLimit Total Bonded Debt Less: Special Assessment Bonds Revenue Bonds Available for Repayment ofGeneral Obligation Bonds Total Debt Applicable toLimitation Legal Debt Margin The City ofDiamond Bar has nobonded indebtedness. ^ Section 43G05ofthe California Governmemd'Cnde Source: City Finance Department, Hdl Coren & Cone 71 $0 $0 $0 $0 $3'677.011.183 $0 ` City of Diamond Bar Computation of Direct'and Overlapping Debt June 30, 1998 Government Los Angeles County Facilities 1S87Debt Service LACoFlood Control (Storm Drain Bond No. 4) Flood Control Ref. Bonds 19S3Debt Service *Metropolitan Water District Area 1112 Debt Service Pomona Unified School District Bond Debt Service Walnut Valley Unified School District Debt Service ism Gross Bonded Debt Balance % Applicable Debt al 6/30/98 $57'825'800 0.817Y6 $472'706 $4'000.000 0.831Y6 $38.234 $20.970.000 0.831% Q174.298 $1'248.295'000 0.411Y6 $5.134'731 $10.000'000 20.435Y6 $2.043'514 $45.587'718 57.387% $26.161.378 TOTAL GROSS DIRECT AND OVERLAPPING BONDED DEBT 1887/88Assessed Valuation: $3'877.011.183 Debt ToAssessed Va|uobonRaUoo: Direct Oetd Overlapping Debt Total Debt 0.000% 0.925% 0.925% $34,024,862 Report reflects general obligation debt which isbeing repaid through indebtedness. It excludes revenue, mortgage revenue, tax allocation bonds, interim financing obligations, non -bonded capital lease obligations and certificates of participation *This fund isoportion ofalarger agency, and ieresponsible for debt inareas outside tha.chy. Source: Hd|Coren&Cnna 72 City of Diamond Bar Schedule of Insurance In Force June 30, 1998 Type of Coverage ' Limits/Deductibles Insurer Liability: General Liability, Automobile $50,000,000 combined single limit Self Insured Program/ Liability, Bodily Injury, Property limit each occurrence, $50,000,000 California Joint Powers Damage, Personal Injury aggregate. $20,000 self-insured Insurance Authority retention Special Liability: Errors and Ommissions, Employ- $1,000,000 each occurrence, Self Insured Program/ ment Practices Injury, Contractual $2,000,000 aggregate. Retained California Joint Powers Liability Injury, Broadcast/Publication loss of $20,000 per occurrence and Insurance Authority Publication Injury, Employee Benefits, Administration Injury, Discimination Injury fProperty: ` All -Risk, including buildings, $2,572,257 limit, deductible of Zurich Insurance contents, garaged vehicles, $5,000 per occurrence !, contractor's equipment, fine arts, rental income and other mis- cellaneous extensions of coverage Automobile Physical Damage $175,275 limit, deductible of $1,000 per occurrence Crime: Public Employee Blanket Fidelity Bond - Faithful Performance Bond $'1,000,000 limit, deductible of $5,000 per occurrence Depositor's Forgery $1,000,000 limit, deductible of $5,000 per occurrence Crime - Money and Securities $1,000,000 limit, deductible of $5,000 per occurrence Workers' Compensation: Work-related injury/illness claims for temporary and permanent disability Source: City Finance Department California statutory limit; $1,000,000 employer's liability 73 Zurich Insurance Hartford Insurance Hartford Insurance Hartford Insurance State Compensation Insurance Fund Table 9 Policy Period 07/l/97-06/30/98 07/l/97-06/30/98 01/01/98 - 12/31/99 01/01/98 - 12/31/99 01/01/98 - 12/31/99 01/01/98 - 12/31/99 01/01/98 - 12/31/99 10/01/97 - 10/01/98 Table 10 CITY OF DIAMOND :: JUNE 0 , .. Date of Incorporation...............................................................................................April 18, 1989 Form of Government..........................................................................................Council-Manager Area..................................................................................................................14.9 Square Miles Milesof Streets.......................................................................................................................137 Employees(full-time)...............................................................................................................26 Fire Protection (Los Angeles County Consolidated Fire Protection District): Numberof Stations...................................................................................................................3 Number of Firemen and Officers..............................................................................................40 Police Protection (Contract with Los Angeles County): Numberof Stations...................................................................................................................1 Numberof Officers..................................................................................................................27 Sewers: SanitarySewers...............................................................................................................146.88 StormSewers....................................................................................................................31.95 Recreation and Culture: CommunityCenters..................................................................................................................1 Parks.......................................................................................................................................10 Park Acreage (developed)....................................................................................................60.9 Park Acreage (undeveloped)................................................................................................81.5 Education: ElementarySchools(K-6)..............................................................................:...........................7 MiddleSchools(6-8).................................................................................................................2 Jr.. High Schools(7-8)...............................................................................................................3 HighSchools(9-12).....................................................................................................:............2 Population:* Percentage Date Population Increase 1989 60,000-- - 1990 53,672 -10.55 1991 53,596 - 0.14 1992 53,576 - 0.04 1993 54,315 1.32 1994 54,507 0.35 1995 54,284 - 0.41 1996 56,003 3.10 1997 56,659 1.17 1998 57,271 1.01 ** Estimate Only * Source: State of California, Department of Finance 74 Table 11 City of Diamond Bar Residential and Commercial Construction Since Incorporation in April, 1989 (Unaudited) Fiscal Residential (1) New Construction Year Fiscal Residential (1) Commercial Year Units Value Units Value 1988-89 $423,640,000 Not Available 1989-90' Not Available 1989-90 39 $12,246,600 6 $269,372 1990-91 24 $6,989,816 17 $1,528,280 1991-92 26 $13,596,000 1 $500,000 1992-93 11 $6,757,000 2 $558,000 1993-94 10 $6,053,000 0 $0 1994-95 8 $4,619,400 0 $0 1995-96 26 $16,715,000 0 $0 1996-97 15 $9,516,000 1 $4,300,000 1997-98 66 $32,539,000 0 $0 Alterations and Additions Fiscal Residential (1) Commercial Year Units Value Units Value 1992-93 $371,506,000 1988-89 $379,581,000 Not Available $423,640,000 Not Available 1989-90' 437 $4,085,588 212 $4,036,302 1990-91 744 $8,868,435 83 $11,361,825 1991-92 638 $10,799,186 68 $3,585,038 1992-93 600 $6,894,000 94 $6,259,900 1993-94 570 $5,781,300 95 $4,839,400 1994-95 487 $5,649,500 81 $2,454,800 1995-96 651 $7,285,100 52 $2,460,200 1996-97 595 $12,150,400 58 $3,826,800 1997-98 639 $8,618,400 52 $2,453,000 Bank DeDOSits 1988-89 $321,853,000 1989-90 $343,605,000 1990-91 $377,224,000 1991-92 $381,710,000 1992-93 $371,506,000 1993-94 $379,581,000 1994-95 $423,640,000 1996-97 $480,610,000 1997-98 $472,071,000 (1) Includes multiple dwellings Source: City's Contract Building & Safety Provider, Findley Reports 75 City of Diamond Bar Ratio - Unreserved General Fund Balance to Annual General Fund Expenditures Since Incorporation in April, 1989 (unaudited) General Fund =gatio 1.5 1.0 0.5 0.0 1988-89 1989-90 1990-91 1991-92 1992-93 1993-94 1994-95 1995-96 1996-97 1997-98 Fiscal Year Source: City Finance Department 76 Table 12 Unreserved Annual General Fund General Fund Fiscal Year Balance Expenditures Ratio 1988-89 $50,915 $798,947 0.064 1989-90 $1,375,030 $6,600,559 0.208 1990-91 $2,200,322 $8,031,932 0.274 19911-92 $3,019,852 $8;208,271 0.368 1992-93 $3,305,067 $8,232,941 0.401 1993-94 $5,677,619 $9,329,431 0.609 1994-95 $7,711,454 $8,241,463 0.936 1995-96 $9,600,649 $8,446,432 1.137 1996-97 $10,755,111 $8,777,410 1.225 1997-98 $12,392,358 $9,401,308 1.318 General Fund =gatio 1.5 1.0 0.5 0.0 1988-89 1989-90 1990-91 1991-92 1992-93 1993-94 1994-95 1995-96 1996-97 1997-98 Fiscal Year Source: City Finance Department 76 Table 12 CITY OF DIAMOND BAR Schedule of Credits Year ended June 30, 1998 Name Terrence L. Belanger, City Manager Linda G. Magnuson, Assistant Finance Director Joann M. Gitmed, Senior Accountant Conrad and Associates, C.P.A., L.L.P. Laurie A. Kajiwara, Communications and Marketing Coordinator Source: City of Diamond Bar 77 Table 13 Area of Contribution General Overview Letter of Transmittal General Overview Letter of Transmittal Statistical Tables Statistical Tables Financial Statements Notes to Financial Statements Cover and Divider Page Design (This page intentionally left blank) City of Diamond Bar 21660 E. CopleyDrive,11 Diamond Bar, California91765-4177