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HomeMy WebLinkAboutCAFR - FY 1989-90CITY OF DIAMOND BAR ANNUAL AUDIT REPORT Year Ended June 30, 1990 THOMAS, BYRNE & SMITH AN ACCOUNTANCY CORPORATION CERTIFIED PUBLIC ACCOUNTANTS RIVERSIDE, CALIFORNIA CITY OF DIAMOND BAR CALIFORNIA ANNUAL AIDIT-ITFORT Year Ended June 30, 1990 TABLE OF CONTENTS Page Number I. Independent Auditors' Opinion II. General Purpose Financial Statements Exhibit 1 - Combined Balance Sheet - All Fund Types and Account Groups 1 Exhibit 2 - Combined Statement of Revenues, Expenditures and Changes in Fund Balances - All Governmental Fund Types 2 Exhibit 3 - Combined Statement of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual - General, Special Revenue and Capital Project Fund Types 3 Exhibit 4 - Statement of Revenues, Expenses and Changes in Retained Earnings - All Proprietary Fund Types 4 Exhibit 5 - Statement of Cash Flocs - All Proprietary Fund Types 5 Notes to Financial Statements 6 - 13 III. Supplemental Information Schedule 1 - General Fund - Statement of Revenues - Budget and Actual 14 Schedule 2 - General Fund - Statement of Expenditures - Budget and Actual 15 Schedule 3 - Combining Balance Sheet - All Special Revenue Funds 16 Schedule 4 - Combining Statement of Revenues, Expenditures and Changes in Fund Balances - All Special Revenue Funds 17 Schedule 5 - Combining Balance Sheet - All Capital Project Funds 18 Schedule 6 - Combining Statement of Revenues, Expenditures and Changes in Fund Balances - All Capital Project Funds 19 THOMAS, BYRNE & SMITH AN ACCOUNTANCY CORPORATION CERTIFIED PUBLIC ACCOUNTANTS Donald L. Thomas, C.P.A. D. Richard Byrne, C.P.A. 4362 Orange Street Rivers V. C. Smith, Jr., C.P.A. INDEPENDENT AUDITORS' REPORT Riverside, California 1 Jerry D. Bigbie, C.P.A. (714} 682--4854851 City Council City of Diamond Bar Diamond Bar, California 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, 1990, as listed in the table of contents. These financial statements are the responsibility of the City's management. Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with generally accepted auditing standards. 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, California, as of June 30, 1990, and the results of its operations and the statement of cash flows for its proprietary fund types for the year then ended in conformity with generally accepted accounting principles. Our audit was made for the purpose of forming an opinion on the general purpose financial statements taken as a whole. The supplemental information listed in the table of contents is presented for purposes of additional analysis and is 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. 4 , �V-2e August 30, 1990 Assets and Other Debits Cash (Notes 1 and 3) Accounts Receivable Interest Receivable Accrued Revenue Receivable Due From Other Funds (Note 4) Due From Other Governments Fixed Assets (Notes 1 and 5) Other Debits Resources Available for Long -Term Obligations Total Assets and Other Debits Liabilities, Equity and Other Credits Liabilities Accounts Payable Interest Payable Accrued Liabilities Due To Other Funds (Note 4) Deposits Claims And Judgements Payable (Note 6 Tax And Revenue Anticipation Notes Payable (Note 7) Long Term Obligations (Notes 8, 9, and 10) Total Liabilities Equity and Other Credits Investment in General Fixed Assets Retained Earnin s Unreserve - Undesignated' Fund Balances Notes 11 And 12 Reserve For Encum rances Reserved For Debt Service Unreserved: Designated For Specific Projects and Programs Undesignated Total Equity and Other Credits Total Liabilities, Equity and Other Credits $ 5,783,302 $ 1,821,391 $ 638,507 S 129,812 S 16,697 $ 2,272,734 $ 527,815 1 11,190,258 $ 2,056,556 $ 633,288 $ 241,973 $ 24,523 $ $ 158,309 26,336 255,861 4,275 16,697 50,100 3,000,000 3,872,308 497,834 24,523 -0- 16,697 129,812 8,149 20,891 49,489 527,815 $ $ $ 899,784 $ 24,950 158,309 26,336 60,025 255,861 20,972 50,100 3,000,000 527,815 527,815 610,695 527,815 4,939,177 695,670 2,272,734 2,272,734 11,808 129,812 78,529 527,815 610,695 737,468 1,375,030 1,302,666 564,495 6,242,191 915 1,910,994 1,323,557 613,984 129,812 -0- 2,272,734 6,251,081 1,360,886 $ 5,783,302 S 1,821,391 S 638,507 $ 129,812 $ 16,597 $ 2,272,734 $ 527,815 $ 11,190,258 S 2,056,556 The accompanying notes are an integral part of this statement. - 1 - CITY OF DIAMOND BAR CALIFORNIA COMBINED BALANCE SHEET - ALL FUND TYPES AND ACCOUNT GROUPS EXHIBIT 1 June 30, 1990 Fiduciary Proprietary Fund Totals - Governmental Fund Tyne, Fund Types Types Account Groups (Memorandum Only) Special Capital Liability Trust And General Long -Term June 30 General Revenue Project Insurance Agency Fixed Assets Obligations 1990 1989 $4,869,993 $1,794,483 $ 312,529 $ 129,812 $ 16,697 $ $ $ 7,123,514 $ 797,602 80,972 80,972 48,363 154,342 154,342 475,510 255,861 255,861 422,134 26,908 325,978 775,020 112,578 2,272,734 2,272,734 11,808 527,815 527,815 610,695 $ 5,783,302 $ 1,821,391 $ 638,507 S 129,812 S 16,697 $ 2,272,734 $ 527,815 1 11,190,258 $ 2,056,556 $ 633,288 $ 241,973 $ 24,523 $ $ 158,309 26,336 255,861 4,275 16,697 50,100 3,000,000 3,872,308 497,834 24,523 -0- 16,697 129,812 8,149 20,891 49,489 527,815 $ $ $ 899,784 $ 24,950 158,309 26,336 60,025 255,861 20,972 50,100 3,000,000 527,815 527,815 610,695 527,815 4,939,177 695,670 2,272,734 2,272,734 11,808 129,812 78,529 527,815 610,695 737,468 1,375,030 1,302,666 564,495 6,242,191 915 1,910,994 1,323,557 613,984 129,812 -0- 2,272,734 6,251,081 1,360,886 $ 5,783,302 S 1,821,391 S 638,507 $ 129,812 $ 16,597 $ 2,272,734 $ 527,815 $ 11,190,258 S 2,056,556 The accompanying notes are an integral part of this statement. - 1 - COMBINED STATEMENT OF REVENUES EXFENUI'lURES AND Vt1ANtiEJ 1N rUNU tstutuYUao - AL GOVERN NT D TYPES Year Ended June 30, 1990 Exhibit 2 Totals - (Memorandum Only) Special Capital Year Ended June 30, General Revenue Project 1990 1989 Revenues axes $ 3,497,401 $ $ $ 3,497,401 $ 21,093 Special Assessments 409,454 409,454 Licenses and Permits 841,525 841,525 112,578 Intergovernmental 2,698,770 2,172,836 400,000 5,271,606 1,371,326 Fines And Forfeits 49,599 144,253 193,852 1,946 Use Of Money And Property 317,293 123,227 440,520 1,650 Miscellaneous 8,313 8,313 46,625 Total Revenues 7,412,901 2,849,770 400,000 10,662,671 1,555,218 Expenditures General Government - Departmental 1,412,617 1,412,617 249,482 General Government - Nondepartmental 547,126 549,797 1,096,923 Public Safety 3,235,362 3,235,362 438,805 Public Works 756,771 299,814 87,210 1,143,795 90,927 -- Parks, Recreation and Culture 357,604 357,604 31,296 Capital Outlay 200,237 802,028 24,784 1,027,049 Debt Service: -- Principal Retirement 90,842 90,842 Interest and Fiscal Charges 6,325 Total Expenditures 6,600,559 1,651,639 111,994 8,364,192 816,835 Excess Of Revenues Over (Under) Expenditures 812,342 1,198,131 288,006 2,298,479 738,383 Other Financing Sources (Uses) Operating Transfers In (Out) 437,042 (562,042) (125,000) Proceeds From Long-Term Debt 610,695 Excess of Revenues and Other Sources Over (Under) Expenditures And Other Uses 1,249,384 636,089 288,006 2,173,479 1,349,078 Fund Balances - Beginning of Year 661,610 687,468 -0- 1,349,078 -0- Prior Period Adjustment (Note 1M) 325,978 325,978 Fund Balances - Beginning of Year as Restated 661,610 687,468 325,978 1,675,056 -0- Fund Balances - End of Year S 1 S 1,323,557 yS 613,984 $ 3,848,535 $1,349,078 The accompanying notes are an integral part of this statement. - 2 - EXHIBIT 3 ear rnaea June JU, The accompanying notes are an integral part of this statement. - 3 - General Fund Special Revenue Funds Capital Project Funds Variances - Variances - Variances - Favorable Favorable Favorable Budget Actual (Unfavorable) Budget Actual (Unfavorable) Budget Actual (Unfavorable) Revenues -axes $ 3,497,300 $ 3,497,401 $ 101 $ $ $ $ $ $ Special Assessments Levied 409,250 409,454 204 Licenses and Permits Intergovernmental 840,900 2,698,550 841,525 2,698,770 625 220 2,172,600 2,172,836 236 400,000 400,000 Fines and Forfeits 49,600 49,599 (1) 144,200 144,253 53 Use of Money and Property 317,300 317,293 (7) 122,900 123,227 327 Miscellaneous 8,300 8,313 13 Total Revenue 7,411,950 7,412,901 951 2,848,950 2,849,770 820 400,000 400,000 -0- Expenditures General Government - Departmental 1,416,962 1,412,617 4,345 General Government - Nondepartmental 546,150 547,126 (976) 549,797 549,797 Public Safety 3,243,436 3,235,362 8,074 40 Public Works 757,425 756,771 654 299,914 299,814 100 87,250 87,210 Parks, Recreation and Culture Capital Outlay 358,155 200,600 357,604 200,237 551 363 802,044 802,028 16 24,800 24,784 16 Debt Service: Principal Retirement 92,628 90,842 1,786 Total Expenditures 6,615,356 6,600,559 14,797 1,651,755 1,651,639 116 112,050 111,994 56 Excess of Revenues Over (Under) Expenditures 796,594 812,342 15,748 1,197,195 1,198,131 936 287,950 288,006 56 Other Financing Sources Uses Operating Tran ein Out 437,045 437,042 (3) (562,045) (562,042) 3 Excess of Revenues and Other Sources Over (Under) xpen itures an $ 1,233,639 �� 1,249,384 $ 15,745 $ 635,150 636,089 $ 939 $ 287,950 288,006 S� 56 mer ses Fund Balance - Beginning of Year 661,610 687,468 -0- Prior Period Adjustments 325,978 Fund Balances - Beginning o£ Year 661,610 687,468 325,978 As estate Fund Balances - End of Year $ 1,910,994 $ 1,323,557 $ 613,984 The accompanying notes are an integral part of this statement. - 3 - CITY OF DIAMOND "CALIFORNIA STATEMENT OF REVENUES E S S AN GES IN RETAINED EARNINGS PROPRIETARY Exhibit 4 Year Ended Tu -n -e--5-0,--1-990 Operating Revenues Charges for Services Total Operating Revenues Operating Expenses COntractua ervices Total Operating Expenses Operating Income Non Operating Revenues (Expenses) nterest evenue Income Before Operating Transfers Operating Transfers in (Out) Net Income Retained Earnings - Beginning of Yeaz Retained Earnings - End of Year The accompanying notes are in an integral part of this statement. -4- Totals - (Memorandum Only) Internal Year Ended June 30 Service 1990 1989 � S S -0- -0- -0- -0- -0- -0- -0- -0- -0- 4,812 4,812 -0- 4,812 4,812 -0- 125,000 125,000 -0- 129,812 129,812 -0- -0- -0- -0- 1112."812 0- 129812 -0- Cash Flows From Operating Activities elft Cash Providedy Operating Activities Cash Flows From Noncapital Financing Activities Operating Transfers In Net Cash Provided By Noncapital Financing Activities Cash Flows from Investing Activities Interest On Investments Net Cash Provided By Investing Activities Net Increase In Cash and Cash Equivalents Cash and Cash Equivalents - Beginning of Year Cash and Cash Equivalents - End of Year Reconciliation of Net Qperating Income to Net Cas Provided by Qperating Activities Net Operating Income Net Cash Provided by Operating Activities The accompanying notes are an integral part of this statement. CITY OF DIAMOND BAR CALIFORNIA A EME O CAS POWS OPR D YP S Year Ended June 30, 1990 -5- Fo►7i Internal Service $ -0- 125,000 125,000 4,812 4,812 129,812 $ 129,812 CITY OF DIAMOND BAR CALIFORNIA NOTES TO FINANCIAL STATEMENTS IN ORDER OF PRESENTATION Year Ended June 30, 1990 Note Description Page Number 1 Summary of Significant Accounting Policies 7 - 9 2 Property Tax Calendar 9 3 Composition of Cash 9 - 10 4 Interfund Receivables and Payables 10 5 General Fixed Assets 10 6 Claims and Judgements Payable 11 7 Tax and Revenue Anticipation Notes Payable 11 8 Long Term Obligations 11 9 Compensated Absences 11 10 Advances - County of Los Angeles 11 11 Fund Balance(Retained Earnings Reserves 11 12 Fund Balance Deficit 12 13 Deferred Compensation Plan 12 14 City Employees Retirement Plan 12 - 13 15 Contingencies 13 -6- CITY OF DIAMOND BAR CALIFORNIA NOTES TO FINANCIAL STATEMENTS Year Ended June 30, 1990 1) Summary of Significant Accounting Policies The City of Diamond Bar, California was incorporated April 18, 1989 as a General Law City. The City operates under a Council -Manager form of government and provides the following services: public safety (police), highways and street, parks, public improvements, community development (planning, building, zoning) and general administrative services. The financial statements of the City of Diamond Bar, California have been prepared in conformity with generally accepted accounting principles as applied to government units. The Governmental Accounting Standards Board is the accepted standard setting body for establishing governmental accounting and financial reporting principles. The more significant of the government's accounting policies reflected in these financial statements are summarized as follows: A) Description of Entity Included within the financial reporting entity City of Diamond Bar, is solely the City of Diamond Bar. Other governmental agencies providing services either to the City in its entirety, or to a portion thereof are: State of California County of Los Angeles Tri- Valley Water District Walnut Valley Water District Pomona Unified School District Walnut Valley Unified School District Mount San Antonio Community College District California Polytechnic University Consolidated Fire Protection District The City of Diamond Bar does not exercise oversight responsibility over any of the above entities. Each of these agencies is governed by an independently -elected governing board other than the City Council of the City of Diamond Bar. These agencies are not financially dependent on the City, and the City does not have the ability to significantly influence their management or operations. Consequently, financial information for these agencies is not included within the scope of this financial report. As recommended by GASB Code Section J50.103, financial data for joint ventures which do not meet the criteria for inclusion within the reporting entity have been reported in the footnotes. B) _Basis of Presentation - Fund Accountin The accounts of the City are organized on the basis of funds and account groups each of which is considered a separate accounting entity. The operations of each fund are accounted for with a separate set of self -balancing accounts that comprise its assets, liabilities, fund equity, revenues, and expenditures, or expenses, as appropriate. Government resources are allocated to and accounted for in individual funds based upon the purposes for which they are to be spent and the means by which spending activities are controlled. The various funds are grouped, in the financial statements in this report, into five generic fund types and three broad fund categories as follows: Governmental Funds General Fund - The General Fund is the general operating fund of the City. It is used to account for all financial resources except those required to be accounted for in another fund. Special Revenue Funds - Special Revenue Funds are used to account for the proceeds of specific revenue resources (other than major projects) that are legally restricted to expenditures for specific purposes. Capital Project Funds - Capital Project Funds are used to account for financial resources to be used for the acquisition or construction of major capital facilities (other than those financed by Proprietary and Trust Funds). Proprietary Funds Internal Service Funds - Internal Service Funds are used to account for goods or services provided by one department to other departments on a cost reimbursement basis. The Internal Service Fund of the City of Diamond Bar consists solely of the Self Insurance Fund. Fiduciary Funds Trust and Agency Funds - Trust and Agency Funds are used to account for assets held by the City in a trustee capacity or as an agent for individuals, private organizations, other governments, and/or other funds. Agency Funds are custodial in nature (assets equal liabilities) and do not involve measurement of results of operations. C) Fixed Assets and Long -Term Liabilities The accounting and reporting treatment applied to the fixed assets and long-term liabilities associated with a fund are determined by its measurement focus. All governmental funds are accounted for on a spending or "financial flow" measurement focus. This means that only current assets and current liabilities are generally included on their balance sheets. Their reported fund balance (net current assets) is considered a measurement of "Available Spendable Resources". Governmental fund operating statements present increases (revenues and other financing sources) and decreases (expenditures and other financing uses) in net current assets. Accordingly, they are said to present a summary of sources of "available spendable resources" during a period. -7- CITY OF DIAMOND BAR CALIFORNIA NOTES TO FINANCIAL STATEMENTS Year Ended June 30, 1990 1) Summary Significant Account C iisPolitcies (Continued) FixedAssets anLong Term (Continued) Fixed assets used in governmental fund type operations (general fixed assets) are accounted for in the General Fixed Assets Account Group, rather than in governmental funds. Public domain ("infrastructure") general fixed assets consisting of certain improvements other than buildings, including roads, bridges, curbs and, gutters, streets and sidewalks, drainage systems, and lighting systems, are not capitalized as general fixed assets. No depreciation has been provided on general fixed assets. All fixed assets are valued at historical cost or estimated historical cost if actual historical cost is not available. Donated fixed assets are valued at their estimated fair value on the date donated. Long-term liabilities expected to be financed from governmental funds are accounted for in the General Long -Term Obligation Account Group, not in the governmental funds. The two account groups are not "funds". They are concerned only with the measurement of financial position. They are not involved with measurement of results of operations. Noncurrent portions of long-term receivables due to governmental funds are reported on their balance sheets, in spite of their spending measurement focus. Special reporting treatments are used to indicate, however, that they should not be considered "available spendable resources", since they do not represent net current assets. Recognition of governmental fund type revenues represented by noncurrent receivables is deferred until they become current receivables. Noncurrent portions of long-term loans receivable are offset by fund balance reserve accounts. Because of their spending measurement focus, expenditure recognition for governmental fund types is limited -to exclude amounts represented by non-current liabilities. Since they do not affect net current assets, such long-term amounts are not recognized as governmental fund expenditures or fund liabilities. They are ,instead reported as liabilities in the General Long -Term Obligation Account Group. All proprietary fund types are accounted for on a cost of services or "capital maintenance" measurement focus. This means that all assets and all liabilities (whether current or noncurrent) associated with their activity are included on their balance sheets. Their reported fund equity (net total assets) is segregated into contributed capital and retained earnings components. Proprietary fund type operating statements present increases (revenues) and decreases (expenses) in net total assets. D) Basis of Accounting Basis of accounting refers to when revenues and expenditures or expenses are recognized in the accounts and reported in the financial statements. Basis of accounting relates to the timing of the measurements made, regardless of the measurement focus applied. All governmental funds are accounted for using the modified accrual basis of accounting. Their revenues are recognized when they become measurable and available as net current assets. The primary revenue sources susceptible to accrual are sales taxes, property taxes, special assessments, fines and forfeitures which are considered "measurable" when in the hands of intermediary collection governments and are recognized as revenue at that time. Anticipated refunds of such taxes are recorded as liabilities and reductions of revenues when they are measurable and their validity seems certain. Expenditures are generally recognized under the accrual basis of accounting. Exceptions to this general rule are (1) principal and interest on general long-term debt which is recorded as expenditure on its due date (2) disbursements for inventory type items are considered expenditures at the time of purchase and (3) expenditures are not divided between years by recording of prepaid expenses. All proprietary funds are accounted for using the accrual basis of accounting. Their revenues are recognized when they are earned, and their expenses are recognized when they are incurred. E) Budgets and Budgetary Accounting The City uses the following procedures in establishing the budgetary data reflected in the financial statements. 1) Before the beginning of the fiscal year the City Manager submits to the City Council a proposed budget for the following July 1. 2) Public hearings are conducted to obtain taxpayer comments. 3) The budget is subsequently adopted through passage of a resolution. 4) All appropriated amounts are as originally adopted or as amended by the City Council and lapse at year end. 5) Encumbrances and Continuing Appropriations are rebudgeted on July 1 by Council action 6) Original appropriations are modified by supplementary appropriation and transfers among budget categories. The City Council approves all significant changes. 7) Formal budgetary integration is employed as a management control device during the year for the General, Special Revenue and Capital Project Funds. Formal budgetary integration is nox employed for Debt Service Funds because effective budgetary control is alternatively achieved through debt indenture provisions. 8) Budgets for General, Special Revenue and Capital Project Funds are adopted on a basis consistent with generally accepted accounting principles. -8- CITY OF DIAMONDBAR CALIFORNIA NOTES TO FINANCIAL STATEMENTS Year Ended June 30, 1990 1) Summary of Significant Accounting Policies (Continued) F) Appropriations Limit Under Article XIIIB of the California Constitution (the Gann Spending Limitation Initiative), the City is restricted as to the amount of annual appropriations from the proceeds of taxes, and if proceeds of taxes exceed allowed appropriations, the excess must either be refunded to the State Controller or returned to the taxpayers through revised tax rates, revised fee schedules or other refund arrangements. For the fiscal year ended June 30, 1990, based on calculations by City Management, proceeds of taxes did not exceed appropriations. G) 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 integration in the Governmental Fund Types. Encumbrances outstanding at year-end arereportedas reservations of fund balance since they do not constitute expenditures or liabilities. H) Investments Investments are stated at cost (see Note 3), except that assets of the deferred compensation plan agency fund are reported at fair market value rather than cost, in accordance with GASB, Statement 2. If market values decline below cost, no loss is recorded if such declines are considered temporary. I) Claims and Judgments Claims and judgments are accounted for in accordance with GASB Codification Section C50.110, which requires that expenditures for claims be recognized when it is probable that the liability has been incurred at year end and the amount of the loss can be reasonably estimated. Accordingly, such claims are recorded as liabilities in the financial statements. J) 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. K) Total Columns on Combined Statements - Overview Total columns on the Combined Statements are captioned "Memorandum Only" to indicate that they are presented only to facilitate financial analysis. Data in these columns do not present financial position, results of operations, or changes in financial position in conformity with generally accepted accounting principles. Neither is such data comparable to a consolidation. Interfund eliminations have not been made in the aggregation of this data. L) Prior Period Adiustment - $325;978 A prior period adjustment of $325,978 in the Traffic Mitigation Fund represents developer fees collected by the County of Los Angeles to be used to mitigate any traffic problems that might be caused by the Gateway Corporate Center Development that were not previously recorded. 2) Property Tax Calendar Property taxes are assessed and collected each fiscal year according to the following property tax calendar: Lien date March 01 Levy date July 01 to June 30 Due date November 01 -1st installment March 01 - 2nd installment Delinquent date December 10 - 1st installment April 10 - 2nd installment 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 prescribed by the state statutes. 3) Composition of Cash The City of Diamond Bar maintains a cash and investment pool that is available for use for all funds. Each fund type's position in the pool is reflected in the combined balance sheet as cash. Cash and investments by credit risk, carrying amount and market value of investments at June 30, 1990, consisted of the following: Carrying Market Category Amount Value 1 2 3 Fiscal Agent Investments 16,697 16,697 yam— $te— 16,697 Demand Accounts* (206,783) (206,783) (206,783) (190,086) (190,086) $ () S -0-$16 697 State of California - LAIF 7,313,000 7,313,000 Petty Cash 600 600 Total Cash and Investments 7,123,514 7,123,514 * 100 Percent Insured or Collateralized -9- CITY OF DIAMOND BAR CALIFORNIA NOTES TO FINANCIAL.STATEMENTS Year Ended June 30, 1990 3) Composition of Cash (Continued) The amounts of cash and investments are classified in these three categories of credit risk: Category 1 - Includes investments that are insured or registered or for which the securities are held by the City or its agent in the City's name. Category 2 - Includes uninsured and unregistered investments for which the securities are held by the broker's or dealer's trust department or agent in the City's name. Category 3 -'Includes uninsured and unregistered investments for which the securities are held by the broker or dealer or by its trust department or agent -but not in the City's name. The following disclosures are made in accordance with Statement Number 3 of the Governmental Accounting Standards Board: Authorized Investments Under provisions of the City's Investment Policy, the City Charter, and in accordance with Section 53601 of the California Government Code, the City Treasurer may deposit funds in the following investment media to the extent permitted by applicable law: (1) Securities of the U.S. Government or by its agencies; (2) certificates of deposit or time deposits placed with commercial banks or savings and loan companies; (3) bankers acceptances, (4) negotiable certificates of deposit; (5) commercial paper; (6) Local Agency Investment Fund; (7) repurchase agreements; (8) passbook savings deposits; (9) money market funds; (10) investment agreements or contracts representingunconditional obligations; (11) Tax-exempt obligations. The City selects its investments based on safety, liquidity and yield. Local Agency Investment Fund (LAIF) The LAIF is a special fund of the California State Treasury through which local governments may pool investments. Each city may invest up to $10,000,000 in the fund. Investments in LAIF are highly liquid, as deposits can be converted to cash within twenty-four hours without loss of interest. Investments with LAIF are secured by the full faith and credit of the State'of California. Collateral for Deposits Under the provisions of the California Government Code, California banks and savings and loan associations are required to secure a city's deposits by pledging government securities as collateral. The market value of the pledged securities must equal at least 110% of the city's deposits. California law also allows financial institutions to secure city deposits by pledging first trust deed mortgage notes having a value of 150% of a city's total deposits. The collateral for certificates of deposit is generally held in safekeeping by the Federal Home Loan Bank in San Francisco as the third -party trustee. The securities are physically held in an undivided pool for all California public agency depositors. The State Public Administrative Office for public agencies and the Federal Home Loan Bank maintain detailed records of the security pool which are coordinated and updated weekly. The City Treasurer, at his discretion, may waive the 110% collateral requirement for deposits which are insured up to $100,000 by the FDIC or FSLIC. 4) Interfund Receivables and Payables The balances due from and due to other funds as of June 30, 1990 are as follows: Due From: Due To: Traffic Safety Fund $ 11,429 General Fund $ 11,429 State Park Grant Fund 244,432 General Fund 244,432 255 861 255 861 5) General Fixed Assets $2,272,734 Activities relating to the general fixed assets are presented as follows: Beginning Balance Additions General Government Furniture and Fixtures Machinery and Equipment Total General Government Community Services Land Improvements Total Community Services Total General Fixed Assets "Contributed parks valued using the latest assessed valuations $ 11,808 $ 52,061 131,830 11,808 183,891 S 11,808 -10- 1,560,000* 517,035 2,077,035 $2,260,926 Deletions -0- -0- Ending Balance $ 63,869 131.830 195,699 1,560,000 517,035 2,077,035 S 2,272,734 CITY OF DIAMOND BARCALIFORNIA NOTES TO FINANCIAL STATEMENTS Year Ended June 30, 1990 6) Claims and Judgements Payable - $50,100 These amounts represent estimates for liability claims from Colen and Lee, the City's Claim Administrator, for which the liability is probable. City staff concurred with Colen and Lee that these are the City's best estimates. The estimated liability at June 30, 1990 as determined by Colen and Lee is $50,100. 7) Tax and Revenue Anticipation Notes Payable - $3,000,000 The 1989 Tax and Revenue Anticipation Notes payable dated August 10, 1989 are due September 4, 1990 with interest at 6.35%.. 8) Long Term Obligations - $527,815 Activities relating to long term obligations are presented as follows: * - Los Angeles County Treasury Pool Rate ** - As Monies Become available 9) Compensated Absences - $7,962 After twelve months continuous service with the City, full time employees receive from ten (10) to twenty (20) days vacation each year depending upon length of service. Vacation can be accumulated up to a maximum of 20 days. Unused vacation may be cashed in upon leaving employment with the City. City employees receive 3.08 hours of sick leave per pay period and can be accumulated up to a maximum of 144 hours. Unused sick leave may be cashed in upon leaving employment at the rate of 1/2 the employee's current rate of pay. The liability for compensated absences will be funded, when required, from future City operations. 10) Advances - County of Los Angeles - $519,853 The City incorporated on April 18,'1989. All services within the City continued to be provided by the County of Los Angeles. The cost of those services are to be reimbursed by the City over a period not to exceed five years. The County is required to give the City credit for any revenue which the County retained that was generated within the City limits during the period of time the services were provided. The cost of reimbursement shall bear interest at a rate equivalent to the Los Angeles County treasury pool earnings rate. The outstanding balance of $519,853 at June 30, 1990 is currently in dispute. The ultimate disposition of the advance is not known at this time. However, pursuant to GASB statement 1 it is reflected as a liability inasmuch as it is both estimatable and probable. 11) Fund Balance/Retained Earnings Reserves Reserves and designations segregate portions of fund balance and retained earnings that are not available spendable resources. The various reserves and designations established as of June 30, 1990 are described below and tabulated as follows: Reserved For: Encumbrances Debt Service General Special Revenue Capital Project Fund Funds Funds $ 8,149 $ 20,891 $ 49,489 527,815 Total $ 535,964 S 20,891 $ 49,489 Reserve for Encumbrances - These reserves represent the portion of purchase orders awarded for which the goods or services had not yet been received at June 30, 1990. AlthougT a appropriations lapse at year-end even if encumbered, the City intends either to honor the contracts in progress or to cancel them. Reserve for encumbrances are rebudgeted on July 1, by Council action. Reserve for Debt Service - These reserves for Debt Service represent reserves accumulated by the City of Diamond Bar that are legally restricted to the payment of long-term debt principal and interest amounts that mature in future years. Disc Date of Years of Amount Beginning New Matured Description Issue Maturity Rates of Interest Authorized Balance Indebtedness During Year Ending Balance Compensated Absences Payable (Note 9) N/A N/A N/A N/A $ $ 7,962 $ $ 7,962 Advances - County of L. A. (Note 10) 4-18-89 ** * N/A 610,695 90,842 519,853 Totals $ 610,695 $ 7,962 SY 90,842 $ 527,815 * - Los Angeles County Treasury Pool Rate ** - As Monies Become available 9) Compensated Absences - $7,962 After twelve months continuous service with the City, full time employees receive from ten (10) to twenty (20) days vacation each year depending upon length of service. Vacation can be accumulated up to a maximum of 20 days. Unused vacation may be cashed in upon leaving employment with the City. City employees receive 3.08 hours of sick leave per pay period and can be accumulated up to a maximum of 144 hours. Unused sick leave may be cashed in upon leaving employment at the rate of 1/2 the employee's current rate of pay. The liability for compensated absences will be funded, when required, from future City operations. 10) Advances - County of Los Angeles - $519,853 The City incorporated on April 18,'1989. All services within the City continued to be provided by the County of Los Angeles. The cost of those services are to be reimbursed by the City over a period not to exceed five years. The County is required to give the City credit for any revenue which the County retained that was generated within the City limits during the period of time the services were provided. The cost of reimbursement shall bear interest at a rate equivalent to the Los Angeles County treasury pool earnings rate. The outstanding balance of $519,853 at June 30, 1990 is currently in dispute. The ultimate disposition of the advance is not known at this time. However, pursuant to GASB statement 1 it is reflected as a liability inasmuch as it is both estimatable and probable. 11) Fund Balance/Retained Earnings Reserves Reserves and designations segregate portions of fund balance and retained earnings that are not available spendable resources. The various reserves and designations established as of June 30, 1990 are described below and tabulated as follows: Reserved For: Encumbrances Debt Service General Special Revenue Capital Project Fund Funds Funds $ 8,149 $ 20,891 $ 49,489 527,815 Total $ 535,964 S 20,891 $ 49,489 Reserve for Encumbrances - These reserves represent the portion of purchase orders awarded for which the goods or services had not yet been received at June 30, 1990. AlthougT a appropriations lapse at year-end even if encumbered, the City intends either to honor the contracts in progress or to cancel them. Reserve for encumbrances are rebudgeted on July 1, by Council action. Reserve for Debt Service - These reserves for Debt Service represent reserves accumulated by the City of Diamond Bar that are legally restricted to the payment of long-term debt principal and interest amounts that mature in future years. Disc CITY OF DIAMOND BAR CALIFORNIA NOTES O F NANCIAL STATEMENTS Year Enaed June 3T,71990 12) Fund Balance Deficit - $244,432 The deficit fund balance in the State Park Grant Fund is anticipated to be eliminated with future intergovernmental revenues. 13) Deferred Compensation Plan The City offers its employees a deferred compensation plan created in accordance with Internal Revenue Code Section 457. The plan, available to all City employees, permits them to defer a portion of their salary until future years. The deferred compensation is not available to employees until termination, retirement, death or unforeseeable emergency. All amounts of compensation deferred under this plan, all property and rights purchased with these amounts and all income attributable to those amounts, property or rights are (until made available to the employee or other beneficiary) solely the property and rights of the City (without being restricted to the provisions of benefits under the Plan), subject only to the claims of the City's general creditors. Participants' rights under the plan are equal to those of general creditors of the City in the amount equal to the fair market value of the deferred account for each participant. The City believes that it is unlikely that it will use the assets to satisfy the claims of general creditors in the future. The following is a summary of the increases and decreases of the fund for the year ended June 30, 1990: Fund Assets, Beginning of Year $ -0- Deposits 16,020 Interest 772 Administrative Expenses (95) Fund Assets, End of Year L16 697 14) City Employees Retirement Plan (Defined Benefit Pension Plan) Plan DescriDtion The City of Diamond Barcontributes to the California Public Employees Retirement System (PERS), an agent multiple -employer public employee retirement system that acts as a common investment and administrative agent for participating public entities within the State of California. The total covered payroll for employees participating in the System for the year ended June 30, 1990 was $202,657. The total payroll for the year was $415,468. All full-time and part-time benefitted City employees are eligible to participate in the System. Part-time non -benefitted hourly employees do not participate in the system. Benefits vest after five years of service. City employees who retire at or after age fifty with five years of credited service are entitled to an annual' retirement benefit, payable monthly for life, in an amount that varies from 1.092 percent at age fifty to a maximum of 2.418 percent at age sixty- three of the three highest years' salary for non -safety employees for each year of credited service. The system also provides death and survivor's benefits. These benefit provisions and all other requirements are established by State statute and City ordinance. Employee and Employer Contribution Obligations The City makes the contributions required of City employees on their behalf and for their account. The rate is set by statute and therefore remains unchanged from year to, year. The present rate for local miscellaneous members is 7% of their annual wages. The City is required to contribute the remaining amounts necessary to fund the benefits for its members, using the actuarial basis recommended by the PERS actuaries and actuarial consultants and adopted by the Board of Administration. Funding Status and Progress The amount shown below as the "pension benefit obligation" is a standardized measure of the present value of pension benefits, adjusted for the effects of step - rate benefits, estimated to be payable in the future as a result of employee service to date. The measure is intended to help assess the funding status of the system on a going -concern basis, assess progress made in accumulating sufficient assets to pay benefits when due, and make comparisons among employers. The measure is the actuarial present value of credited projected benefits and is independent of the funding method used to determine contributions to the System. The pension benefit obligation was computed as part of an actuarial valuation performed as of August 30, 1989. Significant actuarial assumptions used in the valuation include (a) a,rate of return on the investment of present and future assets of 8.5 percent a year compounded annually,. (b) projected salary increases of 5.50 percent a year compounded annually, attributable to inflation, and across the board real salary increases, (c) additional projected salary increases of 1.50 percent a year, attributable to seniority/merit, and (d) no postretirement benefit increases. The total unfunded pension benefit obligation applicable to the City employees was $19,207 at August 30, 1989. Actuarially Determined Contribution Requirements and Contribution Made PERS uses the Entry Age Normal Actuarial Cost Method which is a projected benefit cost method. That is, it takes into account those benefits that are expected to be earned in the future as well as those already accrued. According to this cost method, the normal cost for an employee is the level amount which would fund the projected benefit if it were paid annually from date -12- CITY OFDIAMOND BAR CALIFORNIA NOTES TO FINANCIAL STATEMENTS Year Ended June 30, 1990 14) City Employees Retirement Plan (Defined Benefit Pension Plan) (Continued) Actuarial v Determined Contra ution Requirements and Contribution Made (Continued) of employment until retirement. PERS uses a modification of the Entry Age Cost method in which the employer's total normal cost is expressed as a level percent of payroll. PERS also uses the level percentage of payroll method to amortize any unfunded actuarial liabilities. The amortization period of the unfunded actuarial Liability ends in the year 2008 for prior service benefits; in the year 2019 for current service benefits. The significant actuarial assumptions used to compute the actuarially determined contribution requirement are the same as those used to compute the pension benefit obligation, as previously described. The contribution to the system for 1990 of $28,080 was made in accordance with actuarially determined requirements computed through an actuarial valuation performed as of August 30, 1990. The contribution consisted of (a) $27,823 normal cost (13.729 percent of current covered payroll) and (b) $257 amortization of the unfunded actuarial accrued liability (0.127 percent of current covered payroll). The contributions were paid entirely by the City. Trend Information Trend information gives an indication of the progress made in accumulating sufficient assets to pay benefits when due. Ten year trend information may be found in the California Public Employees Retirement System Annual Report. Until ten years of data are available, as many years as are available will be presented. Within the City's financial statement, three years of historical trend information are required. Until three years of data are available, as many years as are available should be presented. Since this is the first year the City participated in PERS, only 1989-90 is required. However, actuarial information for 1989-90 is unavailable. Therefore, the trend information for 1989-90 is summarized as follows: 1989 - 90 Net assets available for benefits expressed as a percentage of the pension benefit obligation Unfunded (assets in excess of) pension benefit obligation, expressed as a percentage of annual covered payroll Employer contributions expresged as a percentage of annual covered payroll. These contributions were made in accordance with 13.856% actuarially determined requirements *Unavailable 15) ContinKencies As of June 30, 1990, in the opinion of the City Administration, there are no outstanding matters which have a significant effect on the financial position of the funds of the City. -13- CITY OF DIAMOND BAR CALIFORNIA GEN STATEMENT OF EGET AND ACTUAL Year Ended June 30, 1990 SCHEDULE 1 -14- Budget Actual Property Taxes $ 929,600 $ 929,570 Sales Tax 1,954,400 1,954,394 Transient Occupancy Taxes 138,500 138,513 Franchises 388,000 388,060 Real Property Transfer Taxes 86,800 86,864 Licenses and Permits 840,900 841,525 Fines and Forfeits 49,600 49,599 Interest 317,300 317,293 Motor Vehicle In Lieu Fees 2,588,300 2,588,353 Homeowners' Property Tax Relief 22,100 22,185 Cigarette Taxes 87,700 87,747 Miscellaneous Revenue From Other Governments 450 485 Other Revenues 8,300 8,313 Total $7,411,950 $7,412,901 -14- City Council City Attorney City Manager City Clerk Finance Community Promotion Planning Building and Safety Engineering General Government Insurance Police Fire Public Works Community Services Parks Capital Outlay Debt Service Total CITY OF DIAMOND BAR CALIFORNIA GENERAL STATEMENT OF EXP ND URES - UDGET AND ACTUAL Year fnea June 30, 1990 Imm SCHEDULE 2 Budget Actual $ 74,550 $ 74,143 159,300 158,435 146,938 146,264 140,477 139,307 105,147 104,609 9,000 8,962 140,250 139,742 488,300 488,301 153,000 152,854 374,250 375,265 171,900 171,861 3,055,300 3,047,251 188,136 188,111 757,425 756,771 55,300 52,364 302,855 305,240 .200,600 200,237 92,628 90,842 $6,615,356 6 600 559 CITY OF DIAMOND BAR CALIFORNIA COMBINING BALANCE SHEET ALL SPECIAL REVENUE FUNDS June 30, 1990 SCHEDULE 3 Traffic Gas Prop. A Local State Park Totals - June 30 Assets Safety Tax Transit m Transportation Grant A.D. No. 38 A.D. No. 39 A.D. No. 41 1990 1989 Cash $ $ 883,642 $ 352,893 $ $ $ 236,980 $ 242,387 $ 78,581 $1,794,483 $ 455,819 Accounts Receivable 48,363 Accrued RevenueReceivable 195,134 Due From Other Governments 11.429 9,074 4_,_047 2,358 26,908 Total Assets$ 11,429 S 883,642 $ 352,893 S -0- $ -0- S$ 2® $ 246,434 S 80,939 $1,821,391 L_699&316 Liabilities and Fund Balances Accounts Payable $ $ $ $ $ $ 225,163 $ 4,455 Accrued Liabilities Due to Other Funds 11,429 244,432 Total Liabilities 11,429 -0- -0- -0- 244,432 225,163 4,455 Fund Balances Reserved for Encumbrances 20,891 Unreserved - Designated 883,642 (244,432) 241,979 Total Fund Balances -0- 883,642 352,893 -0- (244,432) 20,891 241,979 Total Liabilities and Fun Balances S 11,429 S 883,642 $ 352,893 $ -0- $ -0- $ 246,054 $ 246,434 -16- $ 12,355 $ 241,973 $ 11,848 255,861 12,355 497,834 11.848 20,891 68,584 1,302,666 687,468 68,584 1,323,557 687,468 S $1,8 S 6 [KIN S SCHEDULE 4 Expenditures General Government - Nondepartmental 549,797 Public Works Capital Outlay 517,035 Total Expenditures -0- -0- 549,797 -0- 517,035 Excess of Revenues Over (Under) Expen itures 147,352 1,052,656 159,628 125 (290,932) Other Financing Sources Uses Operating Transfers In (Out) (149,298) (410,750) (215) (1,779) Excess of Revenues and other Sources Over (Under) Expenditures and Other Uses (1,946) 641,906 159,413 (1,654) Fund Balances - Be innin 549,797 86,679 115,723 97,412 299,814 11,848 284,993 802,028 371.672 115,723 97,412 1,651,639 11,848 (41,180) 145,459 25,023 1,198,131 640,968 (290,932) (41,180) 145,459 of Year 1,946 241,736 193,480 1,654 46,500 62,071 96,520 Fund Balances - End of Year -17- (562,042) 46,500 25,023 636,089 687,468 43,561 687,468 -0- $ $1,323,557 S 687,468 Totals - Traffic Gas Prop. A Local State Park Year Ended June 30 Revenues Safety Tax Transit Transportation Grant A.D. No. 38 A.D. No. 39 A.D. No. 41 1990 1989 Special Assessments $ $ $ $ $ $ 209,322 $ 101,728 $ 98,404 $ 409,454 $ Intergovernmental Revenues 985,182 687,628 225,000 108,639 146,443 19,944 .2,172,836 650,194 Fines and Forfeits 144,253 144,253 1,946 Use of Money and Property 3,099 67,474 21,797 125 1,103 12,531 13,011 4,087 123,227 676 Total Revenues 147,352 1,052,656 709,425 125 226,103 330,492 261,182 122,435 2,849,770 652,816 Expenditures General Government - Nondepartmental 549,797 Public Works Capital Outlay 517,035 Total Expenditures -0- -0- 549,797 -0- 517,035 Excess of Revenues Over (Under) Expen itures 147,352 1,052,656 159,628 125 (290,932) Other Financing Sources Uses Operating Transfers In (Out) (149,298) (410,750) (215) (1,779) Excess of Revenues and other Sources Over (Under) Expenditures and Other Uses (1,946) 641,906 159,413 (1,654) Fund Balances - Be innin 549,797 86,679 115,723 97,412 299,814 11,848 284,993 802,028 371.672 115,723 97,412 1,651,639 11,848 (41,180) 145,459 25,023 1,198,131 640,968 (290,932) (41,180) 145,459 of Year 1,946 241,736 193,480 1,654 46,500 62,071 96,520 Fund Balances - End of Year -17- (562,042) 46,500 25,023 636,089 687,468 43,561 687,468 -0- $ $1,323,557 S 687,468 Assets Cash Due From Other Governments Total Assets Liabilities and Fund Balance Liabilities Accounts Payable Total Liabilities Fund Balance Reserved for Encumbrances Unreserved - Undesignated Total Fund Balances Total Liabilities and Fund Balances CITY OF DIAMOND BAR CALIFORNIA Ar G ANC SHEET C PROJECT S June 30, 199U Grand Chino Hills Traffic Avenue Parkway Mitigation $ 74,012 $ 238,517 $ 325.978 $ 74,012 $ 238,517 $ 325,978 $ 24,523 $ $ 24,523 -0- -0- 49,489 238,517 325,978 49,489 238,517 325,978 $ 74,012 1_238,517 $ 325,978 -18- SCHEDULE 5 Totals - June 30 990 989 $ 312,529 $ 325,978 $ 638,507 $ -0- $ 24,523 24,523 -0- 49,489 564,495 613,984 -0- $ 6381507 $ -0- Revenues Intergovernmental Revenues Total Revenues Expenditures Public Works Capital Outlay I Total Expenditures Excess of Revenues Over (Under) Expenditures i -- Fund Balance - Beginning of Year i Prior Period Adjustment Fund Balances - Beginning of Year as Restated Fund Balances - End of Year CITY OF DIAMOND ,J "L) l:tiii Ubb 1N ZULU) blU, Ur, FUNDS 1990 SCHEDULE 6 ORM Totals - Grand Chino Hills Traffic Year Ended June 30 Avenue Parkway Mitigation 1990 1989 $ 100,000 $ 300,000 $ $ 400,000 $ 100,000 300,000 -0- 400,000 -0- 25,727 61,483 87,210 24,784 24,784 50,511 61,483 -0- 111,994 -0- 49,489 238,517 -0- 288,006 -0- -0- -0- -0- -0- 325,978 325,978 325,978 325,978 $ 49,489 $ 238,517 S 325,978 $ 613,984 $ -0- ORM