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COMPREHENSIVE
ANNUAL FINANCIAL REPORT
FISCALYEAR ENDED
JUNE 3O, 2OO3
Rancho Palos VerdesCity of
CALIFORNIA
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CITY OF RANCHO PALOS VERDES,
CALIFORNIA
COMPREHENSIVE
ANNUAL FINANCIAL REPORT
For the Year Ended June 30, 2003
Prepared By:
Finance Department
Dennis McLean, Director of Finance & Information Technology
Kathryn Downs, Accounting Manager
Cover photo courtesy of Roger E. Lindenmuth, 2000 Palos Verdes Peninsula Land Conservancy Photo Contest
INTRODUCTORY SECTION
Photo courtesy of Kent Tolley, 2003 Palos Verdes Peninsula Land Conservancy
Photo Contest
CITY OF RANCHO PALOS VERDES
COMPREHENSIVE ANNUAL FINANCIAL REPORT
FOR THE YEAR ENDED JUNE 30, 2003
TABLE OF CONTENTS
i
INTRODUCTORY SECTION:
Table of Contents i-iii
Letter of Transmittal iv-x
Directory of City Officials xi
Organization Chart xii
GFOA Certificate of Achievement for Excellence in Financial Reporting xiii
CSMFO Certificate of Award for Outstanding Financial Reporting xiv
FINANCIAL SECTION:
Independent Auditor’s Report 1
Management Discussion and Analysis 3
Government-Wide Financial Statements
Statement of Net Assets 11
Statement of Activities 12
Fund Financial Statements
Governmental Funds
Balance Sheet 13
Reconciliation of the Balance Sheet of Governmental Funds
to the Statement of Net Assets 15
Statement of Revenues, Expenditures, and Changes in Fund Balances 16
Reconciliation of the Statement of Revenues, Expenditures, and Changes
in Fund Balances to the Statement of Activities 18
General Fund
Statement of Revenues, Expenditures, and Changes in Fund Balance
- Budget and Actual 19
Street Maintenance Special Revenue Fund
Statement of Revenues, Expenditures, and Change in Fund Balance
- Budget and Actual 20
Proprietary Funds
Statement of Net Assets 21
Statement of Revenues, Expenses, and Changes in Fund Net Assets 22
Statement of Cash Flows 23
Notes to the Financial Statements 24
CITY OF RANCHO PALOS VERDES
COMPREHENSIVE ANNUAL FINANCIAL REPORT
FOR THE YEAR ENDED JUNE 30, 2003
TABLE OF CONTENTS
ii
Supplementary Schedules
Major Fund Budgetary Comparison Schedules
Schedule of Revenues, Expenditures, and Changes in Fund Balances
- Budget and Actual
Capital Improvement Projects Capital Projects Fund 43
RDA Debt Service Fund 44
Non-Major Governmental Funds
Combining Balance Sheet 47
Combining Statement of Revenues, Expenditures, and Changes
in Fund Balances 53
Schedule of Revenues, Expenditures, and Changes in Fund Balances
- Budget and Actual – Special Revenue Funds
Air Quality Management Fund 59
Community Development Block Grant Fund 60
El Prado Fund 61
RDA Housing Set-Aside Fund 62
Proposition A Fund 63
Proposition C Fund 64
Recycling Fund 65
Solid Waste Fund 66
LLESS/COPS/CLEEP Fund 67
1972 Act Fund 68
1911 Act Fund 69
JPIA – Portuguese Bend Fund 70
Habitat Restoration Fund 71
Subregion One Maintenance Fund 72
Measure A Fund 73
Abalone Cove Sewer Assessment District 74
Schedule of Revenues, Expenditures, and Changes in Fund Balances
- Budget and Actual – Capital Projects Funds
Bikeways Fund 75
RDA Abalone Cove Fund 76
Environmental Excise Tax Fund 77
Quimby Fund 78
Affordable Housing Fund 79
RDA Portuguese Bend Fund 80
Utility Undergrounding Fund 81
Roadway Beautification Fund 82
Schedule of Revenues, Expenditures, and Changes in Fund Balance
- Budget and Actual – Permanent Fund
Joint Powers Improvement Authority – Abalone Cove Fund 83
CITY OF RANCHO PALOS VERDES
COMPREHENSIVE ANNUAL FINANCIAL REPORT
FOR THE YEAR ENDED JUNE 30, 2003
TABLE OF CONTENTS
iii
Internal Service Funds
Combining Statement of Net Assets 85
Combining Statement of Revenues, Expenses, and Changes
in Fund Net Assets 86
Combining Statement of Cash Flows 87
STATISTICAL SECTION (Unaudited)
General Governmental Expenditures by Function – Last Ten Fiscal Years 88
General Governmental Revenues by Source – Last Ten Fiscal Years 89
Property Tax Levies and Collections – Last Ten Fiscal Years 90
Assessed Value of Taxable Property – Last Ten Fiscal Years 91
Property Tax Rates – All Overlapping Governments – Last Ten Fiscal Years 92
Principal Taxpayers 93
Special Assessment Billings and Collections – Last Ten Fiscal Years 94
Computation of Legal Debt Margin 95
Statement of Direct and Overlapping Debt 96
Demographic Statistics – Last Ten Fiscal Years 97
Demographic Statistics – 2000 Census Data 98
Building Permits and Property Value – Last Ten Fiscal Years 99
Miscellaneous Statistics 100
Photo courtesy of Linda Wedemeyer, 2003 Palos Verdes Peninsula Land Conservancy Photo Contest
iv
September 11, 2003
Honorable Mayor and City Council
City of Rancho Palos Verdes
Rancho Palos Verdes, California
The Comprehensive Annual Financial Report (CAFR) of the City of Rancho Palos Verdes for the fiscal year ended June 30,
2003, is hereby submitted as mandated by both local ordinances and state statutes. These ordinances and statutes require
that the City of Rancho Palos Verdes issue annually a report on its financial position and activity, and that an independent firm
of certified public accountants audit this report. Responsibility for both the accuracy of the data, and the completeness and
fairness of the presentation, including all disclosures, rests with the City. To the best of our knowledge and belief, the
enclosed data is accurate in all material respects and is reported in a manner that presents fairly the financial position and
results of operations of the various funds and component units of the City of Rancho Palos Verdes. In addition, to the best of
our knowledge, there are no untrue statements of material fact within the financial statements or omissions of material fact to
cause the financial statements to be misleading. All disclosures necessary to enable the reader to gain an understanding of
the City's financial activities have been included.
The CAFR is presented in three sections: introductory, financial, and statistical. The introductory section, which is unaudited,
includes this Letter of Transmittal, an organizational chart and a directory of the City's principal elected and appointed
officials. The financial section includes management’s discussion and analysis (MD&A) the government-wide statements,
notes to the financial statements, combining and individual fund financial statements, as well as the independent auditor's
report on these financial statements and schedules. This letter of transmittal is designed to complement the MD&A and
should be read in conjunction with it. The statistical section, which is unaudited, includes selected financial and demographic
information, generally presented on a multi-year historical basis.
The financial reporting entity (the government) includes all the funds of the primary government (i.e., the City of Rancho Palos
Verdes as legally defined), as well as its component units, the Rancho Palos Verdes Redevelopment Agency and the Joint
Powers Improvement Authority. A component unit is a legally separate entity for which the primary government is financially
accountable. The City provides a broad range of services, including police protection, solid waste collection, construction
and maintenance of highways, streets, and infrastructure, planning and zoning activities, recreational activities, cultural events,
and general administrative services. The City of Rancho Palos Verdes is a contract city, meaning that some of these
services are provided by contract with other agencies (both public and private) and some services are delivered by the City's
own employees.
Special districts of the County of Los Angeles provide library services, fire protection services, and sewer services. The City
has excluded the County of Los Angeles, as well as the State of California and various school districts, from the financial
reporting entity because they do not meet the established criteria for inclusion.
GOVERNMENTAL STRUCTURE, ECONOMIC CONDITION AND OUTLOOK
The City of Rancho Palos Verdes is located on a coastal peninsula overlooking the Pacific Ocean in Los Angeles County, 20
miles south of the City of Los Angeles. The City was incorporated September 7, 1973. The City currently has a land area of
13.6 square miles and a population of 42,322. The City is primarily a "bedroom" community with relatively little commercial
activity.
v
The City has operated under the council-manager form of government since incorporation. Policy-making and legislative
authority are vested in the governing council, which consists of five council members, including the mayor and mayor pro-tem.
The governing council is responsible, among other things, for passing ordinances, adopting the budget, appointing
committees and hiring the city manager and the city attorney. The city manager is responsible for carrying out the policies
and ordinances of the governing council, for overseeing the day-to-day operations of the government, and for appointing the
heads of the government's departments. The council is elected on a non-partisan, at-large basis. Council members are
elected to four-year staggered terms with two or three council members elected every two years. The council designates the
mayor and mayor pro-tem for a one-year term.
Though the General fund reserves of the City increased moderately during the fiscal year ended June 30, 2003, it is important
to continue to measure the City’s financial strength over time, not just on the basis of the most recent three or four years
experience. The budget adopted by the City Council for the fiscal year ending June 30, 2004 presents the expectation of a
decrease of General fund reserves. The economic downturn and management’s concern about the possible decrease of
state shared revenues will require continued conservative fiscal policies.
MAJOR INITIATIVES
The City's staff, following specific directives of the City Council and the City Manager, has been involved in a variety of
projects throughout the year. These projects reflect the government's commitment to ensuring that its citizens are able to live
and work in an enviable environment.
Planning, Building, and Code Enforcement
• The City Council conditionally approved the Long Point Resort Hotel project allowing the construction of a 582-room
resort hotel and a 3-hole golf practice facility with driving range on property located at 6610 Palos Verdes Drive
South (former Marineland site).
• The City, in cooperation with the Palos Verdes Peninsula Land Conservancy, continued to oversee the
implementation of the Forrestal Management Plan and the Forrestal Steering Committee.
• The City adopted new Neighborhood Compatibility Requirements, along with a Neighborhood Compatibility
Handbook based on recommendations provided by the Neighborhood Compatibility Steering Committee. The City
will monitor the effectiveness of the new rules and report back to the Council in one year's time.
• The Equestrian Committee and City Council reviewed and approved the continued operation of two Conditional
Large Domestic Animal Permits to allow non-profit organizations to conduct equestrian activities in the Portuguese
Bend Equestrian Overlay District.
• The City continued the process of updating the City’s General Plan by holding monthly meetings of the General Plan
Update Steering Committee. The Committee is charged with the task of reviewing and commenting on all of the
existing goals and policies of the General Plan.
• The City continued to implement its state approved Housing Element and efforts to work with the Southern California
Association of Governments in preparing the Regional Transportation Plan related to the next Regional Housing
Needs Assessment/Housing Element Update.
• The City continued work on Phase II of the Natural Communities Conservation Plan (NCCP) as a part of its
continuing effort to finalize the habitat preserve design.
• The City continued to provide review and inspection services for repair of the 18
th
hole at Ocean Trails, which was
damaged by a landslide in June 1999 prior to the opening of the golf course. The City met with Ocean Trails’ staff
on a regular basis to assist them in the development of the project, as well as to point out issues important to the
community. The City issued Special Use Permits to allow the continued temporary operation of the 15-hole golf
course during the landslide repair efforts, issued permits for the reconstruction of Palos Verdes Drive South (one of
the City’s major arterials), and approved plans to expand the existing Clubhouse as well as for improvements to the
golf course.
• The City initiated the Environmental Impact Report (EIR) for the proposed Marymount College facilities expansion.
r
vi
• The City continued to formally monitor development projects in surrounding jurisdictions (referred to as “border
issues”) to assess their potential impacts upon the City and its residents.
• The City issued Building Permits for 12 additional homes within the Oceanfront Estates residential project located
along Palos Verdes Drive West.
• The City oversaw the renovation and construction of the Golden Cove Shopping Center.
• The City approved the recordation of Final Tract Map No. 52666 to allow the land division of a 3.92-acre lot into 13
residential lots on property located at 3200 Palos Verdes Drive West.
• The City issued building permits and oversaw/inspected the construction of the Belmont Village 122-unit assisted
living facility on Crestridge Road.
• The City continued to approve the installation of various commercial antenna facilities for cellular telephones and
personal communication systems on private property throughout the City.
• The City continued to implement a permit tracking system for the Planning, Code Enforcement and Building & Safety
divisions.
Public Works
• The City completed the storm drain improvement and landslide stabilization project at San Ramon Canyon.
• The FY02-03 Arterial Overlay Program included the rehabilitation of a portion of 25
th
Street/Palos Verdes Drive
South from the City’s eastern boundary to La Rotunda Drive.
• The FY01-02 Residential Overlay program was completed.
• Soil remediation was completed at Point Vicente Interpretive Center with assistance from the federal government.
• Storm drain improvements were constructed at the Point Vicente Interpretive Center.
• Playground improvements were constructed and new play equipment installed at both Ryan Park and Ladera Linda
Park.
• The City awarded 53 neighborhood beautification grants totaling almost $200,000.
• A traffic signal was constructed at the intersection of Hawthorne Boulevard and Vallon Drive.
Recreation and Parks
• The City continued to offer the use of park facilities to the Peninsula Seniors, a local non-profit organization.
• The City worked cooperatively with the United States Coast Guard to host the annual Whale of a Day Celebration on the
Point Vicente Lighthouse grounds.
• The Los Serenos de Pointe Vicente docents continued their successful docent-led hike programs at several sites
throughout the City.
• Recreation & Parks Department staff coordinated the City’s annual July 4
th
Independence Day celebration.
• The City hosted the third annual Shakespeare By the Sea drama production at Upper Point Vicente Park.
• Recreation & Parks Department staff continued to coordinate several annual community events including the Abalone
Cove Beach Clean-Up Day and Breakfast with Santa.
• Once again, the City has qualified for the use of Community Development Block grant funds for the REACH program for
the developmentally challenged.
vii
Administration
• The City Council sponsored two Community Leaders' Breakfast meetings. The first was held at Ocean Trails Golf
Course in November 2002. Mr. Donald Trump was the featured speaker and informed the community about his
future plans for this high-profile property. The second, held in May 2003, was attended by state Senator Betty
Karnette and U.S. Congressman Dana Rohrabacher, and focused on state and local budget issues.
• The City hosted the California Contract Cities annual meeting in April 2003, which was attended by approximately
150 people representing the member cities.
• The City successfully prepared and processed a resolution promoting the undergrounding of utilities through the
League of California Cities’ committees. The resolution was approved at the League’s General Assembly in
October 2002.
• The City Council created an 8-member Emergency Preparedness Committee to pursue the goals identified by the
previous Emergency Preparedness Task Force to assist the City Council and staff in improving and maintaining a
high state of readiness to respond to a wide variety of emergencies and disasters.
• The City continued to publish the widely read and much acclaimed quarterly City Newsletter. In FY 02-03, the
newsletter featured articles on how citizens can participate more effectively in their local government, how property
tax dollars are allocated, the City’s new neighborhood compatibility ordinance, the history of the Portuguese Bend
Beach Club and how to incorporate native plants into residential gardens. The spring 2003 edition also included a
removable pamphlet on emergency preparedness.
• The City Council continued to provide financial assistance to a variety of non-profit organizations that provide service
to the community.
• The City revised the format of the Two-Year City Budget document from a fund-based budget to a program-based
budget, thereby greatly improving the organization and functionality of this important City document for the City
Council, City staff members and the public at large. In addition, the City modified the Budget In Brief from a booklet
into a brochure, which has made it more attractive, informative and simpler to distribute to the public.
• The City expanded its presence on the local cable television network by producing a new monthly cable television
show called “RPV CityTalk” that highlights issues of interest to the community. The City launched a new
governmental/educational channel on Channel 33 through the City’s cable television franchise agreement with Cox
Communications. The City opened a Multi-Media Studio, operated by Palos Verdes on the Net, to produce
additional original local cable programming of benefit to the community.
FINANCIAL INFORMATION
The Finance department of the City is responsible for establishing and maintaining an appropriate internal control structure.
The internal control system is designed to ensure that the assets of the City are protected from loss, theft, 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 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; and (2) the valuation of costs and benefits requires estimates and
judgements by management.
Single Audit. As a recipient of federal, state, and county financial assistance, the City is responsible for ensuring that an
adequate internal control structure is in place to ensure compliance with applicable laws and regulations related to those
programs. This internal control structure is subject to periodic evaluation by management. In years when over $300,000 is
expended on Federal financial assistance programs, the City is required to undergo an annual single audit in conformity with
the provisions of the Single Audit Act of 1984 and U.S. Office of Management and Budget Circular A-133, Audits of States,
Local Governments, and Non-Profit Organizations. For the year ended June 30, 2003, less than $300,000 was expended on
Federal financial assistance programs; and therefore, a single audit was not required.
Budgeting Controls. The City of Rancho Palos Verdes maintains budgetary controls. The objective of these budgetary
controls is to ensure compliance with legal provisions contained in the annual appropriated budgets approved by the City
Council, Redevelopment Agency Board, and Improvement Authority Commission. Activities of the General fund, Special
Revenue funds, Capital Projects funds, Debt Service fund and Permanent fund are included in the annual appropriated
viii
budgets of the government units. The level of budgetary control (that is, the level at which expenditures cannot legally exceed
the appropriated amount) is established at the department/function level within each fund. Formal budgetary integration is
employed as a management control device. The City also maintains an encumbrance accounting system as one method of
maintaining budgetary control. Encumbrances lapse at year-end, and any unexpended balance is eligible to be carried over to
the following year's budget appropriations with Council approval.
General Government Functions. The following schedule presents a summary of all Governmental fund revenues for the fiscal
year ended June 30, 2003 with the amount and percentage of increases or decreases in relation to prior year revenue:
Increase/ Percent of
(Decrease) Increase/
Amount from FY01-02 (Decrease)
Taxes $
$
369,099
3.5%
Licenses and permits
1,463,135
218,264
17.5%
Fines and forfeitures
115,448
(1,150) -1
.0%
Use of money and property
803,510
(349,373) -
30.3%
Charges for services
204,798
(12,589) -
5.8%
Revenues from other agencies
4,318,078
(3,852,436) -
47.2%
Other revenues
554,035
(8,653) -
1.5%
TOTAL REVENUES $
$ (3,636,838) -
16.4%
With overall revenues decreasing by over $3.6 million for the year, the City recognized large fluctuations in several of the
different revenue categories. These increases and decreases are discussed below.
The Licenses and Permits increase of over $200,000 was primarily due to increased Building & Safety permit activity. As a
result of low interest rates, new construction and home remodeling activity increased during FY02-03.
Consistent with the national trend, the City’s investment rate of return decreased from an average of 3.43 percent in FY01-02
to an average of 2.18 percent in FY02-03. Interest income decreased by almost $350,000 when compared with the prior
year.
The decrease of revenues from other agencies was primarily due to the $3.9 million Measure A grant received in FY01-02 for
the Barkentine property purchase.
The following schedule presents a summary of all Governmental fund expenditures for the fiscal year ended June 30, 2003,
and the amount and percentage of increases and decreases in relation to prior year amounts:
Increase/ Percent of
(Decrease) Increase/
Amount from FY01-02 (Decrease)
General government $
3,092,599
$
177,996
6.1%
Public safety
3,094,005
195,7
40
6.8%
Public works
5,291,650
(2,157,700) -
29.0%
Parks and recreation
785,788
116,849
17.5%
Planning, building and code enforcement
2,194,265
243,761
12.5%
Pass through to other agencies
136,904
35,334
34.8%
Capital outlay
3,892,640
(4,353,793) -
52.8%
Debt service
836,235
(93,592) -
10.1%
TOTAL EXPENDITURES $
$ (5,835,405) -
23.2%
ix
The overall $5.8 million decrease in expenditures is due to large fluctuations in several expenditure categories. These
increases and decreases are discussed below.
The net decrease in Public Works expenditures is almost entirely comprised of prior year expenditures for engineering
activities related to the San Ramon drainage project in the amount of $2.3 million.
Parks and recreation expenditures increased due to staffing an administrative position in FY02-03. The position was not
filled during FY01-02.
As described previously, Building and Safety activity increased during FY02-03. The City contracts with a consultant for
Building and Safety services. With the increased activity, consulting expenditures and the corresponding fee revenue
increased.
Total capital outlay expenditures decreased by a net amount of more than $4.3 million. Capital project budgets vary each
year, due to the City’s needs and funding availability. In addition, many capital projects are constructed over multiple fiscal
years. The Barkentine open space property was purchased in FY01-02 for approximately $3.9 million. Finally, the City
deferred the FY02-03 Residential Street Overlay project to be combined with the FY03-04 project. The deferral saved
approximately $623,000.
Budget to Actual Comparison. Once again, the City experienced a favorable budget variance in the General fund for the
fiscal year ended June 30, 2003. Actual General fund revenues were approximately $764,000 greater than the amount
budgeted, while expenditures were approximately $696,000 less than the amount budgeted. The positive variance resulted
from the continued careful management of resources, as well as the continued strength of property values during FY02-03.
Governmental Fund Balances. The combined fund balances of all Governmental Funds decreased by approximately
$976,000 from the prior year. The net decrease is primarily attributable to continued spending on capital projects, including
San Ramon drainage improvements and the FY01-02 Residential Street Overlay program.
Debt Administration. At June 30, 2003, the City had no general obligation debt and one tax increment bond issued during
FY97-98. The schedule for repayment of this bond is included in the notes to the financial statements.
Cash Management. To obtain increased flexibility in cash management, the City employs a pooled cash system. The goals of
the City's investment policy are safety, liquidity, and yield, in that order. Investments are currently maintained with the State
Treasurer's Local Agency Investment Fund (LAIF); however, the City’s investment policy permits investments legally allowable
under state law. LAIF provides high safety and liquidity and is operated specifically for local governments. The City's
invested balance with LAIF as of June 30, 2003 was $28,324,360. The average return on invested funds was 2.181%.
Earnings are allocated to the various funds based on average cash balances.
Risk Management. The City of Rancho Palos Verdes is a member of the California Joint Powers Insurance Authority
(CJPIA). With over 80 members, it is the largest joint powers insurance authority in California. Through the CJPIA, the City is
self-insured against liability and workers' compensation claims. As protection against catastrophic loss, members fund a
pool to finance large settlements. During the fiscal year ended June 30, 2003, Rancho Palos Verdes continued its proactive
liability risk management role through careful monitoring of losses, working closely with the CJPIA's third-party claims
adjuster, and designing and implementing programs to minimize risks and reduce losses. In addition, the City's Safety
Committee analyzes workers compensation issues by monitoring work conditions, and organizing and implementing safety-
training programs to reduce employee exposure to hazards.
Fiduciary Operations. The City of Rancho Palos Verdes has a fiduciary fund that is used to account for assets (cash) held by
the City in a trustee capacity or as an agent for other governmental units, private organizations or individuals. The trust and
x
agency fund is restricted as to its use and is not available to fund the operating activities of the City and, as such, are offset by
a liability equal to the carrying amount of the asset.
OTHER INFORMATION
Independent Audit. The City requires an annual audit by independent certified public accountants. The accounting firm of
Vavrinek, Trine, Day & Company, LLP conducted this year's audit. The auditors' report on the government-wide financial
statements and combining and individual fund statements and schedules is included in the financial section of this report.
GFOA Certificate of Achievement Award. The Government Finance Officer's Association of the United States and Canada
(GFOA) oversees a prestigious national award program to recognize conformance with the highest standards of report
preparation. In order to be awarded a Certificate of Achievement, a government unit must publish an easily readable and
efficiently organized CAFR. This report must satisfy both Generally Accepted Accounting Principles and applicable legal
requirements.
The GFOA awarded a Certificate of Achievement for Excellence in Financial Reporting to the City of Rancho Palos Verdes
for its CAFR for the fiscal year ended June 30, 2002. This was the tenth consecutive year that the City of Rancho Palos
Verdes has achieved this prestigious award. A copy of the GFOA Certificate of Achievement is included later in the
introductory section of this year's CAFR. A Certificate of Achievement is valid for a period of one year only. We believe our
current CAFR continues to meet the Certificate of Achievement Program’s requirements and we are submitting it to the
GFOA to determine its eligibility for another certificate.
CSMFO Certificate of Award for Outstanding Financial Reporting. The California Society of Municipal Finance Officers
(CSMFO) awarded a Certificate of Award for Outstanding Financial Reporting to the City of Rancho Palos Verdes for its
CAFR for the fiscal year ended June 30, 2002. A copy of this Certificate of Award has also been included later in the CAFR's
introductory section. The certificate is issued in recognition of meeting professional standards and criteria in reporting which
reflect a high level of quality in the annual financial statements. We will again submit the City's annual report to the CSMFO for
award consideration.
Acknowledgments. Preparation of this report was the accomplishment by combined efforts of many individuals. I wish to
acknowledge the assistance of our auditors, Vavrinek, Trine, Day & Company, LLP and the contributions of the Finance
Department staff: Kathryn Downs, Gary Gyves, Jane Lin, Teresa Takaoka, Gayle Vanoverbeck, Selena Wright, and Nancy
Vitez.
I would also like to recognize the City Council for their continued leadership directing the City to achieve a sound fiscal
position over the last several years. We look forward to maintaining this success in the future under the leadership of the City
Council and our City Manager, Les Evans.
Respectfully submitted,
Dennis McLean
Director of Finance & Information Technology
Photo courtesy of Pat Mack, 2001 Palos Verdes Peninsula Land Conservancy Photo Contest winner
xi
CITY OF RANCHO PALOS VERDES
DIRECTORY OF CITY OFFICIALS
JUNE 30, 2003
CITY COUNCIL
Douglas Stern, Mayor
Barbara Ferraro, Mayor Pro-Tem
Larry Clark, Councilmember
Peter Gardiner, Councilmember
John C. McTaggart, Councilmember
ADMINISTRATION AND DEPARTMENT HEADS
City Manager ....................................................................................................................................................................Les Evans
Assistant City Manager............................................................................................................................................ Carolynn Petru
Director of Administrative Services/City Clerk...............................................................................................................Jo Purcell
Director of Public Works.............................................................................................................................................. Dean Allison
Director of Finance & Information Technology......................................................................................................Dennis McLean
Director of Planning, Building and Code Enforcement.................................................................................................Joel Rojas
Director of Recreation and Parks........................................................................................................................... Ron Rosenfeld
City Attorney......................................................................................................................................Richards, Watson & Gershon
CITY OF RANCHO PALOS VERDES
ORGANIZATIONAL CHART
CITIZENS OF
RANCHO PALOS VERDES
MAYOR AND CITY COUNCIL
COMMISSIONS & COMMITTEES
Planning Commission
Traffic Committee
Finance Advisory Committee
Equestrian Committee
COMMISSIONS & COMMITTEES
Open Space Planning Parks & Recreation Task Force
Emergency Preparedness Task Force
View Restoration Mediators
CITY MANAGER
Administration/Budget
Personnel/Community Outreach
Risk Management
CITY ATTORNEY
Richards, Watson & Gershon
CITY CLERK
Records Management
Public Information
Elections
PUBLIC SAFETY
L.A. County Sheriff
L.A. County Fire
Animal Control
Emergency Preparedness
PUBLIC WORKS
Street Maintenance
Refuse/City Engineering
Park/Building Maintenance
Capital Projects
PLANNING & BUILDING
Planning/Zoning
Building & Safety/Geology
Code Enforcement
View Restoration
RECREATION & PARKS
Park Facilities
Point Vicente Interpretive Center
Special Events
REACH Program
FINANCE & INFORMATION
TECHNOLOGY
Financial Reporting
Accounts Payable/Receivable
Payroll
Purchasing
Information Technology
xii
FINANCIAL SECTION
MANAGEMENT’S DISCUSSION & ANALYSIS
Photo courtesy of Steven Thompson, 2002 Palos Verdes Peninsula Land Conservancy
Photo Contest
CITY OF RANCHO PALOS VERDES
Management’s Discussion and Analysis
June 30, 2003
As management of the City of Rancho Palos Verdes, we offer readers of the City of Rancho
Palos Verde’s financial statements this narrative overview and analysis of the financial activities
of the City of Rancho Palos Verdes for the fiscal year ended June 30, 2003. We encourage
readers to consider the information presented here in conjunction with additional information that
we have furnished in our letter of transmittal, which can be found on pages iv-x of this report.
Financial Highlights
Ø The assets of the City of Rancho Palos Verdes exceed its liabilities, at the close of the
fiscal year ended June 30, 2003, by $118,560,176 (net assets). Of this amount,
$13,004,390 (unrestricted net assets) may be used to meet the government’s ongoing
obligations to citizens and creditors.
Ø The City’s total net assets increased by $931,578. This increase is primarily attributable
to the excess of General fund revenues over General fund expenditures.
Ø As of June 30, 2003, the City’s governmental funds reported combined ending fund
balances of $19,135,887, a decrease of $976,370 in comparison with the prior year. The
decrease in combined ending fund balances is primarily attributable to continued
spending on capital projects, including San Ramon drainage improvements and the
FY01-02 Residential Street Overlay program. Approximately $4,697,890 (unreserved
fund balance) is available for spending at the government’s discretion.
Ø As of June 30, 2003, unreserved fund balance for the General fund was $9,606,644 or
86% of total General fund expenditures and transfers out.
Ø The City’s total debt increased by $28,068 (0.5%) during the current fiscal year. The total
increase was entirely attributable to an increase in the accumulation of employee
compensated absences.
Overview of the Financial Statements
This discussion and analysis is intended to serve as an introduction to the City’s basic financial
statements, which are comprised of three components: 1) government-wide financial statements;
2) fund financial statements; and 3) notes to the financial statements. This report also contains
other supplementary information in addition to the basic financial statements themselves.
Government-wide financial statements. The government-wide financial statements are
designed to provide readers with a broad overview of the City’s finances, in a manner similar to a
private-sector business.
The statement of net assets presents information on all of the City’s assets and liabilities, with the
difference between the two reported as net assets. Over time, increases or decreases in net
assets may serve as a useful indicator of whether the financial position of the City of Rancho
Palos Verdes is improving or deteriorating.
The statement of activities presents information showing how the government’s net assets
changed during the most recent fiscal year. All changes in net assets are reported as soon as
the underlying event giving rise to the change occurs, regardless of the timing of related cash
flows. Thus, revenues and expenses are reported in this statement for some items that will only
result in cash flows in future fiscal periods (e.g. uncollected taxes and earned but unused
vacation leave).
Both the government-wide financial statements distinguish functions of the City that are
principally supported by taxes and intergovernmental revenues (governmental activities) from
3
CITY OF RANCHO PALOS VERDES
Management’s Discussion and Analysis
June 30, 2003
other functions that are intended to recover all or a significant portion of their costs through user
fees and charges (business-type activities). The governmental activities of the City include
general government, public safety, public works, planning, building and safety, and recreation.
The City does not have business-type activities.
The government-wide financial statements include not only the City of Rancho Palos Verdes itself
(known as the primary government), but also a legally separate Redevelopment Agency and a
legally separate Improvement Authority for which the City of Rancho Palos Verdes is financially
accountable. Financial information for these component units has been included as an integral
part of the primary government.
The government-wide financial statements can be found on pages 11-12 of this report.
Fund financial statements. A fund is a grouping of related accounts that is used to maintain
control over resources that have been segregated for specific activities or objectives. The City of
Rancho Palos Verdes, like other state and local governments, uses fund accounting to ensure
and demonstrate compliance with finance-related legal requirements. All of the funds of the City
can be divided into three categories: governmental funds, proprietary funds, and fiduciary funds.
Governmental funds. Governmental funds are used to account for essentially the same
functions reported as governmental activities in the government-wide financial statements.
However, unlike the government-wide financial statements, governmental fund financial
statements focus on near-term inflows and outflows of spendable resources, as well as on
balances of spendable resources available at the end of the fiscal year. Such information may be
useful in evaluating a government’s near-term financing requirements.
Because the focus of governmental funds is narrower than that of the government-wide financial
statements, it is useful to compare the information presented for governmental funds with similar
information presented for governmental activities in the government-wide financial statements.
By doing so, readers may better understand the long-term impact of the government’s near-term
financing decisions. Both the governmental balance sheet and governmental fund statement of
revenues, expenditures, and changes in fund balances provide a reconciliation to facilitate this
comparison between governmental funds and governmental activities.
The City of Rancho Palos Verdes maintains 29 individual governmental funds. Information is
presented separately in the governmental fund balance sheet and in the governmental fund
statement of revenues, expenditures, and changes in fund balances for the General fund, the
Street Maintenance fund, the Capital Improvements fund and the RDA Debt-Service fund, all of
which are considered to be major funds. Data from the other 25 governmental funds are
combined into a single, aggregated presentation. Individual fund data for each of these non-
major governmental funds is provided in the form of combining statements elsewhere in this
report.
The City of Rancho Palos Verdes adopts an annual appropriated budget for each of its
governmental funds. A budgetary comparison statement has been provided for each
governmental fund to demonstrate compliance with this budget.
The basic governmental fund financial statements can be found on pages 13-17 of this report.
Proprietary funds. The City of Rancho Palos Verdes maintains one type of proprietary fund.
Internal service funds are an accounting device used to accumulate and allocate costs internally
among the City’s various functions. The City uses internal service funds to account for its fleet of
vehicles, computer systems, furniture and equipment, employee benefits, and Civic Center
building improvements. Because these services predominantly benefit the governmental
4
CITY OF RANCHO PALOS VERDES
Management’s Discussion and Analysis
June 30, 2003
function, they have been included within governmental activities in the government-wide financial
statements.
Proprietary fund financial statements provide the same type of information as the government-
wide financial statements, only in more detail. All three internal service funds are combined into a
single, aggregated presentation in the proprietary fund financial statements. Individual fund data
for the internal service funds is provided in the form of combining statements elsewhere in this
report.
Notes to the financial statements. The notes provide additional information that is essential to
a full understanding of the data provided in the government-wide and fund financial statements.
The notes to the financial statements can be found on pages 24-41 of this report.
Other information. The combining statements referred to earlier in connection with non-major
governmental funds and internal service funds are presented immediately following the notes to
the financial statements. Combing and individual fund statements and schedules can be found
on pages 42-87 of this report.
Government-wide Financial Analysis
As noted earlier, net assets may serve over time as a useful indicator of a government’s financial
position. In the case of the City of Rancho Palos Verdes, assets exceeded liabilities by
$118,560,176 at June 30, 2003. By far the largest portion of the City’s net assets (80 percent)
reflects its investment in capital assets (e.g. land, infrastructure, buildings, equipment). The City
uses these capital assets to provide services to citizens; consequently, these assets are not
available for future spending.
City of Rancho Palos Verdes Net Assets
Governmental Governmental
Activities Activities
June 30, 2003 June 30, 2002
Current and other assets 31,363,993$ 32,700,457$
Capital assets 94,894,816 93,636,014
Total assets 126,258,809 126,336,471
Long-term liabilities outstanding 5,516,954 5,617,750
Other liabilities 2,181,679 3,090,123
Total liabilities 7,698,633 8,707,873
Invested in capital assets 94,894,816 93,636,014
Restricted 10,660,970 10,326,579
Unrestricted 13,004,390 13,666,005
Total net assets 118,560,176$ 117,628,598$
An additional portion of the City’s net assets ($10,660,970 or 9 percent) represents resources that
are subject to external restrictions on how they may be used. The remaining balance of
unrestricted net assets ($13,004,390 or 11 percent) may be used to meet the government’s
ongoing obligations to citizens and creditors.
5
CITY OF RANCHO PALOS VERDES
Management’s Discussion and Analysis
June 30, 2003
Governmental activities. Governmental activities increased the City’s net assets by $931,578,
thereby accounting for 100 percent of the total growth in the net assets of the City.
City of Rancho Palos Verdes Changes in Net Assets
Governmental Governmental
Activities Activities
June 30, 2003 June 30, 2002
Program revenues:
Charges for services 1,783,853$ 1,657,580$
Operating contributions and grants 2,970,984 6,876,566
Capital contributions and grants 130,988 705,945
General revenues:
Property taxes 5,334,977 5,252,509
Other taxes 7,417,676 6,786,581
Other 887,160 748,788
Total revenues 18,525,638 22,027,969
Expenses:
General government 3,293,469 3,068,413
Public safety 3,094,005 2,898,265
Public works 7,954,034 7,283,411
Parks and recreation 809,454 686,583
Planning, building and code enforcement 2,170,348 1,916,297
Interest on long-term debt 272,750 272,750
Total expenses 17,594,060 16,125,719
Increase in net assets 931,578 5,902,250
Net assets - beginning of fiscal year 117,628,598 111,726,348
Net assets - end of fiscal year 118,560,176$ 117,628,598$
Key elements of this increase are as follows:
Ø General fund revenues exceeded General fund expenses and net transfers by $2.6
million.
Ø The Capital Improvements fund balance was depleted for additional necessary capital
improvements, including additional San Ramon drainage improvements ($1.3 million),
Residential Street Overlay ($1.1 million) and other miscellaneous improvement projects
($1.3 million).
Ø The difference in the method of accounting for capital assets in the governmental funds
versus the statement of activities accounts for an increase in excess of $1.1 million in net
assets. Governmental funds fully expend capital asset costs in the period they are
acquired. However, in the statement of activities, the cost of those assets is allocated
over their estimated useful lives.
6
CITY OF RANCHO PALOS VERDES
Management’s Discussion and Analysis
June 30, 2003
Ø The difference in the method of accounting for interest income in the governmental funds
versus the Statement of Activities accounts for an increase in excess of approximately
$563,000 in net assets. Unpaid accrued interest income is deferred in the governmental
funds since it is not available.
Ø The excess of Internal Service fund revenues over expenses of approximately $308,000.
The net revenues and expenses of Internal Service funds are reported with governmental
activities in the Statement of Activities.
Revenues by Source – Governmental Activities
other taxes
25%
motor vehicle in lieu
tax
15%
property taxes
29%
operating contributions
and grants
16%
charges for
services
10%
investment
income
2%
other
3%
As of the end of the current fiscal year, the City’s governmental funds reported combined ending
fund balances of $19,135,887, a decrease of $976,370 in comparison with the prior year.
Approximately 24 percent of the combined ending fund balances ($4,697,890) constitutes
unreserved fund balance, which is available for spending at the City’s discretion. The remainder
of the combined ending fund balances is reserved to indicate that it is not available for new
spending because it has already been committed 1) to liquidate contracts and purchase orders of
the prior period ($5,934,880), 2) to reserve the principal balance of loans made to the City’s
Redevelopment Agency ($5,877,552), and 3) for a variety of other restricted purposes
($2,625,565).
The General fund is the chief operating fund of the City of Rancho Palos Verdes. At the end of
the current fiscal year, unreserved fund balance of the General fund was $9,606,644, while total
fund balance reached $16,460,849. As a measure of the General fund’s liquidity, it may be useful
to compare both unreserved fund balance and total fund balance to total fund expenditures and
transfers out. Unreserved fund balance represents 86 percent of total General fund expenditures,
while total fund balance represents 148 percent of that same amount.
During the current fiscal year, the fund balance of the City’s General fund increased by
$2,655,371. The key factor in this growth follows:
Ø Revenues exceeded expenditures by approximately $3.2 million; however, more than
$550,000 was transferred to other funds primarily for capital projects.
7
CITY OF RANCHO PALOS VERDES
Management’s Discussion and Analysis
June 30, 2003
The debt service fund has a negative fund balance of $10,915,092. The Redevelopment
Agency’s debt to the City is recorded in the debt service fund; however, because there are
currently no assets to extinguish that debt, the fund carries a negative fund balance. The net
decrease in the debt service fund balance during the current year was $437,562, which
represents accumulated interest on the advance from the City to the Redevelopment Agency.
Proprietary funds. The City’s proprietary funds provide the same type of information found in the
government-wide financial statements, but in more detail. Unrestricted net assets of the Internal
Service funds at the end of the year amounted to $3,969,104. The total growth in net assets was
$307,562.
General Fund Budgetary Highlights
The difference between the original budget and the final amended budget was a decrease of
$76,691; and can be briefly summarized as follows:
Ø A decrease of approximately $840,000 was attributable to appropriations continued to
FY03-04.
Ø An increase of approximately $460,000 was attributable to appropriations continued from
FY01-02.
Ø Additional funds of $39,000 were required to support consulting services for the Building
& Safety program.
Ø Additional funds of $60,000 were required to support the View Restoration program.
Ø Additional funds of $65,000 were required for the Open Space Planning and Recreation
and Parks task force consultant.
Ø Other immaterial increases totaled approximately $139,000.
Capital Asset and Debt Administration
Capital assets. The City’s investment in capital assets for its governmental activities as of June
30, 2003, amounts to $94,894,816 (net of accumulated depreciation). This investment in capital
assets includes land, buildings, park improvements, roadways, sewer, storm drains, vehicles,
computer equipment, furniture, other equipment, and construction in progress. During the current
fiscal year, the City’s investment in capital assets increased by 1.3 percent.
Major capital asset events during the current fiscal year included the following:
Ø The FY01-02 Residential Overlay program was completed and capitalized to pavement at
a cost of approximately $1.2 million.
Ø The 25
th
Street Settlement project was completed with FY02-03 costs of $434,000.
Ø The joint storm drain project with the City of Palos Verdes Estates was completed with
FY02-03 costs of $210,000.
Ø The Pointe Vicente Interpretive Center Soil Remediation project was completed with
FY02-03 costs of $523,000.
Ø The Point Vicente storm drain was completed after fiscal year end with FY02-03 costs of
$323,000.
8
CITY OF RANCHO PALOS VERDES
Management’s Discussion and Analysis
June 30, 2003
Ø The San Ramon Drainage project was completed with FY02-03 costs of $1.3 million.
Ø Depreciation of $3 million was recorded for the City’s capital assets.
City of Rancho Palos Verdes Capital Assets
(net of depreciation)
Governmental
Governmental
activities activities
June 30, 2003
June 30, 2002
Land $ 15,058,724
$ 15,058,724
Buildings 2,178,959
2,242,919
Park improvements 2,007,591
659,527
Roadways 51,268,840
51,441,584
Sewer system 12,165,526
12,771,670
Storm drain system 10,461,116
5,815,947
Vehicles 42,082
55,336
Computer equipment 96,320
47,913
Furniture and other equipment 184,317
71,474
Construction in Progress 1,431,341
5,470,920
Total $ 94,894,816
$ 93,636,014
Additional information on the City’s capital assets can be found in note 4 on page 34 of this
report.
Long-term debt. At the end of the current fiscal year, the City of Rancho Palos Verdes had total
debt outstanding of $5,645,818. Of this amount, $5,455,000 is a liability of the Redevelopment
Agency.
City of Rancho Palos Verdes Outstanding Debt
Governmental
Governmental
activities activities
June 30, 2003
June 30, 2002
RDA Tax Increment Bond $ 5,455,000
$ 5,455,000
Employee compensated absences 190,818
162,750
Total $ 5,645,818
$ 5,617,750
The City’s total debt increased by $28,068 (0.5 percent) during the current fiscal year, due to the
accumulation of additional employee compensated absences.
State statutes limit the amount of general obligation debt a governmental entity may issue to 15
percent of its total assessed valuation. The current debt limitation for the City of Rancho Palos
Verdes is $902,133,119. Additional information on the City’s long-term debt can be found in note
5 on pages 34-36 of this report.
9
CITY OF RANCHO PALOS VERDES
Management’s Discussion and Analysis
June 30, 2003
Economic Factors and Next Year’s Budgets and Rates
Ø Local property values remain strong; therefore, property tax revenue (approximately 29
percent of City-wide revenues) remains unaffected by the downturn in the economy.
Ø State shared revenues (i.e. Motor Vehicle In Lieu Tax) have substantially remained intact
for FY02-03.
These factors were considered in preparing the City’s budget for FY03-04. Due to the continued
uncertainty of the state budget, the FY03-04 city budget was conservatively prepared assuming
that only one-third of the Motor Vehicle In Lieu Tax would be received. Indeed on November 17,
2003, the state governor rescinded the Motor Vehicle In Lieu Tax increase; thereby decreasing
the tax to approximately one-third of the full rate.
During the current fiscal year, unreserved fund balance in the General fund increased to
$9,606,644.
Requests for Information
This financial report is designed to provide a general overview of the financial position of the City
of Rancho Palos Verdes for all those with an interest in the government’s finances. Questions
concerning any of the information provided in this report or requests for additional financial
information should be addressed to the Finance Department, 30940 Hawthorne Boulevard,
Rancho Palos Verdes, CA 90275.
10
BASIC FINANCIAL STATEMENTS
GOVERNMENT-WIDE STATEMENTS
CITY OF RANCHO PALOS VERDES
STATEMENT OF NET ASSETS
JUNE 30, 2003
Governmental
Activities
ASSETS
Cash and cash equivalents 28,096,654$
Receivables:
Taxes 430,624
Interest 123,308
Notes 654,986
Other 535,597
Prepaid costs 810,432
Deposits 10,000
Land held for development
702,392
Non-depreciable:
Land 15,058,724
Construction in progress
1,431,341
Depreciable, net of accumulated depreciation:
Property and equipment 322,719
Buildings and improvements 2,178,959
Infrastructure 75,903,073
Total Assets 126,258,809
LIABILITIES
Accounts payable and accrued liabilities 1,379,291
Interest payable 22,729
Deferred revenue
132,326
Deposits
518,469
Noncurrent liabilities:
Due within one year 128,864
Due in more than one year 5,516,954
Total Liabilities 7,698,633
NET ASSETS
Invested in capital assets 94,894,816
Restricted
Community development
Expendable 6,909,228
Non-expendable
1,000,000
Public safety 67,373
Public works 2,288,698
Recreation services 395,671
Unrestricted 13,004,390
Total Net Assets
118,560,176
$
See accompanying notes to financial statements.
11
CITY OF RANCHO PALOS VERDES
STATEMENT OF ACTIVITIES
YEAR ENDED JUNE 30, 2003
Operating
Capital
Net
Charges for
Contributions
Contributions
Governmental
Expenses
Services
and Grants
and Grants
Activities
Governmental Activities:
Administration
3,293,469
$
87,552
$
34,552
$
(3,171,365)
$
Public safety
3,094,005
235,028
140,785
(2,718,192)
Public works
7,954,034
251,558
2,795,647
130,988
(4,775,841)
Parks and recreation
809,454
7,861
(801,593)
Planning, building and
code enforcement
2,170,348
1,201,854
(968,494)
Interest on long-term debt
272,750
(272,750)
Total Governmental Activities
17,594,060
$
1,783,853
$
2,970,984
$
130,988
$
(12,708,235)
$
General Revenues:
Taxes:
Property tax, levied for general purpose
5,334,977
Transient occupancy tax
15,508
Franchise tax
1,087,266
Sales tax
1,003,495
Motor vehicle in lieu tax
2,727,808
Utility user tax
1,832,000
Other taxes
751,599
Investment income
370,568
Loss on asset disposal
(13,403)
Other
529,995
Total General Revenues
13,639,813
Change in Net Assets
931,578
Net Assets at Beginning of Year
117,628,598
Net Assets at End of Year
118,560,176
$
Program Revenues
See accompanying notes to financial statements.
12
FUND FINANCIAL STATEMENTS
CITY OF RANCHO PALOS VERDES
GOVERNMENTAL FUNDS
BALANCE SHEET
JUNE 30, 2003
Capital
Projects
Street Capital
ASSETS General Maintenance Improvements
Cash and cash equivalents 11,100,926$ 967,266$ 1,808,629$
Receivable
Taxes 409,937
Interest 41,491 6,355 12,834
Other 314,984 35,394 34,484
Due from other funds 40,355 45,868
Prepaid items 133,733
Advances to other funds 11,451,482
Deposits 10,000
Land held for development
Total Assets
23,502,908
$
1,009,015
$
1,901,815
$
LIABILITIES AND FUND BALANCES
LIABILITIES
Accounts payable and accrued liabilities 817,334$ 130,652$ 269,823$
Due to other funds
Deferred revenue 5,706,256
Advances to Redevelopment Agency
Deposits 518,469
Total Liabilities 7,042,059 130,652 269,823
FUND BALANCES
Reserved for:
Continuing appropriations 839,680 428,600 4,372,900
Reimbursement settlement agreement
Prepaid costs 136,973
Advances to other funds 5,877,552
Land development
Housing set-aside
Unreserved, reported in:
General fund 9,606,644
Special revenue funds 449,763
Capital projects funds (2,740,908)
Permanent funds
Debt service
Total Fund Balances 16,460,849 878,363 1,631,992
Total Liabilities and
Fund Balances
23,502,908
$
1,009,015
$
1,901,815
$
Special
Revenue
See accompanying notes to financial statements.
13
Debt
Service
Other
Governmental
RDA Funds Totals
10,331,232$ 24,208,053$
20,687 430,624
46,247 106,927
150,735 535,597
86,223
576,745$ 17,752 728,230
11,451,482
10,000
702,392 702,392
576,745
$
11,269,045
$
38,259,528
$
143,402$ 1,361,211$
40,355$ 45,868 86,223
5,706,256
11,451,482 11,451,482
518,469
11,491,837 189,270 19,123,641
293,700 5,934,880
1,000,000 1,000,000
136,973
5,877,552
702,392 702,392
786,200 786,200
9,606,644
4,562,014 5,011,777
3,275,415 534,507
460,054 460,054
(10,915,092) (10,915,092)
(10,915,092) 11,079,775 19,135,887
576,745
$
11,269,045
$
38,259,528
$
See accompanying notes to financial statements.
14
CITY OF RANCHO PALOS VERDES
GOVERNMENTAL FUNDS
RECONCILIATION OF THE BALANCE SHEET OF GOVERNMENTAL FUNDS
TO THE STATEMENT OF NET ASSETS
JUNE 30, 2003
Fund Balances of Governmental Funds 19,135,887$
Amounts reported for governmental activities in the statement of net assets are
different because:
Capital assets of governmental activities are not financial resources and, therefore,
are not reported in the governmental funds. 94,572,097
Interest accrued on the advance receivable in the General Fund is not paid by the
owing funds and, therefore, is recorded as deferred revenue and added to the
balance of the advance. The statement of net assets reports on the full accrual
basis and does not defer currently unavailable revenues. 5,573,930
Interest expenditures are recognized when due, and therefore, interest payable
is not recorded in the governmental funds. (22,729)
Long-term notes receivable are not current available resources and, therefore,
are not reported in the governmental funds. 654,986
Long-term liabilities are not due and payable in the current period and, therefore,
are not reported in the governmental funds. (5,645,818)
Internal service funds are used by management to charge the costs of certain
activities, including equipment and building replacement and employee benefits,
to individual funds. The assets and liabilities of the internal service funds
are included in the statement of net assets. 4,291,823
Net Assets of Governmental Activities
118,560,176
$
See accompanying notes to financial statements.
15
GOVERNMENTAL FUNDS
STATEMENT OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCES
YEAR ENDED JUNE 30, 2003
Special Capital
Projects
Street
Capital
General
Maintenance
Improvements
REVENUES
Taxes
8,626,697
$
Licenses and permits
1,463,135
Fines and forfeitures
115,448
Use of money and property
470,615
23,244
$
84,604
$
Charges for services
107,311
17,676
Revenue from other agencies
2,762,360
883,804
43,384
Other revenues
122,385
44,133
3,000
Total Revenues
13,667,951
968,857
130,988
EXPENDITURES
Current:
Administration
3,079,967
Public safety
2,834,073
Public works
1,542,561
1,532,488
741,138
Parks and recreation
785,788
Planning, building and
code enforcement
2,194,265
Pass through to other agencies
Capital outlay
22,862
3,533,776
Debt service:
Principal and interest
Total Expenditures
10,459,516
1,532,488
4,274,914
Excess (Deficiency) of Revenues
Over Expenditures
3,208,435
(563,631)
(4,143,926)
OTHER FINANCING SOURCES
Transfers in 100,162 735,490 476,671
Advances to Redevelopment Agency
Transfers out (653,226) (89,161)
Total Other Financing Sources (Uses)
(553,064)
646,329
476,671
Net Change in Fund Balances
2,655,371
82,698
(3,667,255)
Fund Balances, Beginning of Year
13,805,478
795,665
5,299,247
Fund Balances, End of Year
16,460,849
$
878,363
$
1,631,992
$
CITY OF RANCHO PALOS VERDES
Revenue
See accompanying notes to financial statements.
16
Debt
Service
Other
Governmental
RDA
Funds
Totals
560,170
$
1,859,361
$
11,046,228
$
1,463,135
115,448
39
225,008
803,510
79,811
204,798
628,530
4,318,078
384,517
554,035
560,209
3,177,227
18,505,232
12,632
3,092,599
259,932
3,094,005
1,475,463
5,291,650
785,788
2,194,265
136,904
136,904
336,002
3,892,640
836,235
836,235
985,771
2,071,397
19,324,086
(425,562)
1,105,830
(818,854)
363,551 1,675,874
(12,000) 12,000
(1,091,003) (1,833,390)
(12,000)
(715,452)
(157,516)
(437,562)
390,378
(976,370)
(10,477,530)
10,689,397
20,112,257
(10,915,092)
$
11,079,775
$
19,135,887
$
See accompanying notes to financial statements.
17
CITY OF RANCHO PALOS VERDES
RECONCILIATION OF THE STATEMENT OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCES OF GOVERNMENTAL FUNDS
TO THE STATEMENT OF ACTIVITIES
YEAR ENDED JUNE 30, 2003
Net Change in Fund Balances - Total Governmental Funds (976,370)$
Amounts reported for governmental activities in the Statement of Activities differs
from the amounts reported in the Statement of Revenues, Expenditures, and Changes
in Fund Balances because:
Governmental funds report capital outlays as expenditures. However, in the statement
of activities, the cost of those assets is allocated over their estimated useful lives
as depreciation expense, or are allocated to the appropriate functional expense when
the cost is below the capitalization threshold. This activity is reconciled as follows:
Cost of assets capitalized less disposals 4,183,580
Depreciation expense (3,072,774)
Unpaid accrued interest income is deferred in the governmental funds since it is
not available. This income is accrued in the Statement of Activities. 563,485
Increases in long-term notes receivable use current financial resources and are
included in the expenditures, of governmental funds. Repayments of long-term notes
receivable provide current financial resources and are included in the revenues of
governmental funds. These changes in notes receivable are not reflected in the
revenues or expenses of the Statement of Activities. This amount represents
the net change in the long-term notes receivable. (45,837)
Compensated absences expenses reported in the statement of activities do not
require the use of current financial resources and therefore are not reported as
expenditures in governmental funds. (28,068)
Internal service funds are used by management to charge the costs of certain
activities, including equipment and building replacement and employee benefits, to
individual funds. The net revenues/(expenses) of the internal service funds (excluding
transfers and interest income) are reported with governmental activities. 307,562
Change in Net Assets of Governmental Activities
931,578
$
See accompanying notes to financial statements.
18
CITY OF RANCHO PALOS VERDES
STATEMENT OF REVENUES, EXPENDITURES
AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL
GENERAL FUND
FOR THE YEAR ENDED JUNE 30, 2003
Variance with
Final Budget -
Actual Positive
Original Final Amounts (Negative)
REVENUES
Taxes 8,403,000$ 8,433,000$ 8,626,697$ 193,697$
Licenses and permits 1,130,800 1,130,800 1,463,135 332,335
Fines and forfeitures 135,000 135,000 115,448 (19,552)
Use of money and property 632,590 632,590 470,615 (161,975)
Charges for services 109,500 109,500 107,311 (2,189)
Revenue from other agencies 2,361,900 2,361,900 2,762,360 400,460
Other revenues 100,950 100,950 122,385 21,435
Total Revenues 12,873,740 12,903,740 13,667,951 764,211
EXPENDITURES
Current:
Administration 3,305,694 3,223,306 3,079,967 143,339
Public safety 3,135,228 3,063,944 2,834,073 229,871
Public works 1,660,030 1,730,203 1,542,561 187,642
Parks and recreation 838,230 841,730 785,788 55,942
Planning, building and
code enforcement 2,254,680 2,245,772 2,194,265 51,507
Capital outlay 38,100 50,316 22,862 27,454
Total Expenditures 11,231,962 11,155,271 10,459,516 695,755
Excess of Revenues
Over Expenditures 1,641,778 1,748,469 3,208,435 1,459,966
OTHER FINANCING SOURCES (USES)
Transfers in 101,510 101,510 100,162 (1,348)
Transfers out (2,530,835) (1,823,903) (653,226) 1,170,677
Total Other Financing Sources (Uses) (2,429,325) (1,722,393) (553,064) 1,169,329
Net Change in Fund Balances (787,547) 26,076 2,655,371 2,629,295
Fund Balance, Beginning of Year 13,805,478 13,805,478 13,805,478
Fund Balance, End of Year
13,017,931
$
13,831,554
$
16,460,849
$
2,629,295
$
Budgeted Amounts
See accompanying notes to financial statements.
19
CITY OF RANCHO PALOS VERDES
STATEMENT OF REVENUES, EXPENDITURES
AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL
STREET MAINTENANCE SPECIAL REVENUE FUND
FOR THE YEAR ENDED JUNE 30, 2003
Variance with
Final Budget -
Actual Positive
Original Final Amounts (Negative)
REVENUES
Use of money and property 1,000$ 1,000$ 23,244$ 22,244$
Charges for services 21,600 21,600 17,676 (3,924)
Revenue from other agencies 869,500 914,435 883,804 (30,631)
Other revenues 5,000 34,000 44,133 10,133
Total Revenues 897,100 971,035 968,857 (2,178)
EXPENDITURES
Current:
Public works 2,043,310 1,761,201 1,532,488 228,713
Excess (Deficiency) of Revenues
Over Expenditures (1,146,210) (790,166) (563,631) 226,535
OTHER FINANCING SOURCES (USES)
Transfers in 1,234,710 741,490 735,490 (6,000)
Transfers out (86,960) (89,161) (2,201)
Total Other Financing Sources (Uses) 1,234,710 654,530 646,329 (8,201)
Net Change in Fund Balances 88,500 (135,636) 82,698 218,334
Fund Balance, Beginning of Year 795,665 795,665 795,665
Fund Balance, End of Year
884,165
$
660,029
$
878,363
$
218,334
$
Budgeted Amounts
See accompanying notes to financial statements.
20
CITY OF RANCHO PALOS VERDES
STATEMENT OF NET ASSETS
PROPRIETARY FUNDS
JUNE 30, 2003
Governmental
Activities -
Internal Service
Funds
ASSETS
Current Assets
Cash and cash equivalents 3,888,601$
Receivables
Interest 16,381
Prepaid items 82,202
Total Current Assets 3,987,184
Noncurrent Assets
Capital assets
Property and equipment 814,068
Accumulated depreciation (491,349)
Total Assets 4,309,903
LIABILITIES
Current Liabilities
Accounts payable and accrued liabilities 18,080
Total Liabilities 18,080
NET ASSETS
Invested in capital assets 322,719
Unrestricted 3,969,104
Total Net Assets
4,291,823
$
See accompanying notes to financial statements.
21
CITY OF RANCHO PALOS VERDES
STATEMENT OF REVENUE, EXPENSES, AND CHANGES
IN FUND NET ASSETS
PROPRIETARY FUNDS
FOR THE YEAR ENDED JUNE 30, 2003
Governmental
Activities -
Internal Service
Funds
OPERATING REVENUES
Charges for services 1,085,105$
Total Operating Revenues 1,085,105
OPERATING EXPENSES
Personnel services 577,030
Material and supplies 272,829
Maintenance 59,588
Depreciation 91,856
Total Operating Expenses 1,001,303
Operating Income 83,802
NONOPERATING REVENUES
Interest income 79,647
Loss on asset disposal (13,403)
Total Non Operating Revenues 66,244
Income Before Transfers 150,046
TRANSFERS IN 157,516
Change in Net Assets 307,562
Net Assets, Beginning of Year 3,984,261
Net Assets, Ending of Year
4,291,823
$
See accompanying notes to financial statements.
22
CITY OF RANCHO PALOS VERDES
STATEMENT OF CASH FLOWS
PROPRIETARY FUNDS
FOR THE YEAR ENDED JUNE 30, 2003
Governmental
Activities -
Internal Service
Funds
CASH FLOWS FROM OPERATING ACTIVITIES
Receipts from customers 1,085,105$
Payments to suppliers (972,528)
NET CASH PROVIDED BY OPERATING ACTIVITIES 112,577
CASH FLOWS FROM CAPITAL AND
RELATED FINANCING ACTIVITIES
Acquisition of capital assets (253,256)
CASH FLOWS FROM NONCAPITAL
FINANCING ACTIVITIES
Operating transfer in 157,516
CASH FLOWS FROM INVESTING ACTIVITIES
Interest received on investments 88,473
NET INCREASE IN CASH AND CASH EQUIVALENTS 105,310
CASH AND CASH EQUIVALENTS, Beginning of Year 3,783,291
CASH AND CASH EQUIVALENTS, End of Year
3,888,601
$
RECONCILIATION OF OPERATING INCOME
TO NET CASH PROVIDED (USED) BY OPERATING
ACTIVITIES
Operating income 83,802$
Adjustments to reconcile operating income to
net cash provided (used) by operating activities:
Depreciation 91,856
Decrease in other receivables 1,465
Decrease in prepaid items (33,164)
Decrease in accounts payable
and accrued liabilities (31,382)
NET CASH PROVIDED BY
OPERATING ACTIVITIES
112,577
$
See accompanying notes to financial statements.
23
NOTES TO FINANCIAL STATEMENTS
Photo courtesy of Christy Kelly, 2003 Palos Verdes Peninsula Land Conservancy Photo Contest
CITY OF RANCHO PALOS VERDES
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2003
NOTE #1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The accounting policies of the City of Rancho Palos Verdes conform to accounting principles generally
accepted in the United States of America as applicable to governments. The Governmental Accounting
Standards Board (GASB) is the accepted standard setting body for governmental accounting and
financial reporting principles. The City has implemented GASB Statements No. 33 and 34 and these
statements are presented according to those requirements. The following is a summary of the significant
policies.
A. Reporting Entity:
The reporting entity “City of Rancho Palos Verdes” includes the accounts of the City, the Rancho
Palos Verdes Redevelopment Agency (the RDA) and the Joint Powers Improvement Authority (the
Authority).
The City was incorporated on September 7, 1973 as a general law city and operates under a
Council/Manager form of government.
The RDA was formed in 1984 pursuant to the State of California Health and Safety Code, Section
33000 entitled “Community Redevelopment Law”. Its purpose is to finance long-term capital
improvements designed to eliminate physical and economic blight in a project area through
stabilization of hazardous landslides.
The Authority was formed on September 4, 1990 in accordance with the provisions of the
Reimbursement and Settlement Agreement, dated October 27, 1987, entered into by the City, the
RDA and the County of Los Angeles (the County) in connection with the Horan lawsuit. The
Agreement requires funds to be set aside and expended by the Authority to maintain landslide
abatement improvements installed and constructed by the RDA.
The criteria used in determining the scope of the reporting entity are based on the provisions of
GASB Statement 14. The City of Rancho Palos Verdes is the primary government unit. Component
units are those entities which are financially accountable to the primary government, either because
the City appoints a voting majority of the component unit’s Board, or because the component unit will
provide a financial benefit or impose a financial burden on the City. The City has accounted for both
the RDA and the Authority as “blended” component units. Despite being legally separate, the RDA
and the Authority are so intertwined with the City, it is in substance, part of the City’s operations.
Accordingly, the balances and transactions of the RDA are reported as separate funds in the Special
Revenue, Debt Service, and Capital Projects Funds. The balances and transactions of the Authority
are reported as separate funds in a Permanent Fund and a Special Revenue Fund. The following
specific criteria were used in determining that the RDA and the Authority are “blended” component
units:
1) The members of the City Council also act as the governing body of both the RDA and the
Authority.
2) The City, the RDA and the Authority are financially interdependent. The City makes loans to the
RDA for use on redevelopment projects. Available property tax revenues of the RDA will be used
to repay the loans from the City. It is not anticipated that tax increment revenues will be available
to repay the loans any time in the immediate future.
3) Employees of the City manage both the RDA and the Authority.
24
CITY OF RANCHO PALOS VERDES
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2003
NOTE #1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, Continued
The financial statements for both the RDA and the Authority may be obtained at the City’s
administrative offices.
Participation In Public Entity Joint Powers Authority:
The City is a member of the Palos Verdes Peninsula Transit Joint Powers Authority. The Transit
Authority is comprised of four member cities and is organized under a Joint Powers Agreement
pursuant to the California Government Code. The purpose of the Authority is to study, implement,
and provide a public transit system within and around the Palos Verdes Peninsula. These transit
services include Palos Verdes Transit, Dial-A-Ride, and a fixed route shuttle service. Periodic
deposits are paid by member cities and are adjusted retrospectively to cover costs. Costs are
prorated among all participating cities based on population.
The City does not have an equity interest in the Transit Authority; therefore, no amount has been
reported in the Statement of Net Assets. However, the City does have an ongoing financial interest
because the City is able to influence the operations of the Authority so that the Authority uses its
resources on behalf of the City. Also, an ongoing financial responsibility exists because the Authority
is dependent on continued funding from the City. The condensed financial information of the
Authority has not been reproduced in this report, but is available from the Authority.
B. Accounting and Reporting Policies:
The City has conformed to the pronouncements of the GASB, which are the primary authoritative
statements of accounting principles generally accepted in the United States of America applicable to
state and local governments. In accordance with GASB Statement No. 20, the City applies all
applicable Financial Accounting Standards Board (FASB) pronouncements, as well as those of its
predecessors, issued on or before November 30, 1989, unless any such pronouncements contradict
GASB pronouncements. The City also applies all FASB Statements and Interpretations issued after
November 30, 1989, except those that conflict with or contradict GASB pronouncements.
C. Description of Funds:
The accounts of the City are organized on the basis of funds, 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. The following
are types of funds used:
Governmental Fund Types:
• General Fund – Used to account for all financial resources except those that are required to be
accounted for in another fund.
• Special Revenue Funds – Used to account for the proceeds of specific revenue sources that are
restricted by law or administrative action for specified purposes.
• Debt Service Fund – The debt service fund of the RDA is used to account for property tax
increment revenue and related interest income. Disbursements from this fund consist mainly of
principal and interest on RDA indebtedness.
25
CITY OF RANCHO PALOS VERDES
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2003
NOTE #1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, Continued
• Capital Projects Funds – Used to account for financial resources used for the construction of
specific capital projects.
• Permanent Fund – Used to account for resources legally restricted to the extent that only
earnings, and not principal, may be used for purposes that support the reporting government’s
programs.
Proprietary Fund Type:
• Internal Service Funds – Used to account for the financing of goods or services provided by one
department of the City to other departments on a cost-reimbursement basis.
D. Basis of Accounting/Measurement Focus
Government – Wide Financial Statements
The City’s Government-Wide Financial Statements include a Statement of Net Assets and a
Statement of Activities and Changes in Net Assets. These statements present summaries of
Governmental Activities for the City.
These statements are presented on an “economic resources” measurement focus and the accrual
basis of accounting. Accordingly, all of the City’s assets and liabilities, including capital assets and
infrastructure as well as long-term debt, are included in the accompanying Statement of Net Assets.
The Statement of Activities presents changes in net assets. Under the accrual basis of accounting,
revenues are recognized in the period in which they are earned while expenses are recognized in the
period in which the liability is incurred. The Statement of Activities demonstrates the degree to which
the direct expenses of a given function are offset by program revenues. Direct expenses are those
that are clearly identifiable with a specific function. The types of transactions reported as program
revenues for the City are reported in three categories: 1) charges for services, 2) operating grants
and contributions, and 3) capital grants and contributions. Charges for services include revenues
from customers or applicants who purchase, use, or directly benefit from goods, services, or
privileges provided by a given function. Operating grants and contributions include revenues
restricted to meeting the requirements of a particular operating function and may include state shared
revenues and grants. Capital grants and contributions include revenues restricted to meeting the
requirements of a particular capital function and may include grants and developer fees. Taxes and
other items not properly included among program revenues are reported instead as general
revenues.
Certain eliminations have been made as prescribed by GASB Statement No. 34 in regards to inter-
fund activities, payables, and receivables. All internal balances in the government-wide statements
have been eliminated.
Governmental Fund Financial Statements
Governmental fund financial statements include a Balance Sheet and Statement of Revenue,
Expenditures, and Changes in Fund Balances for all major governmental funds and aggregated non-
major funds. An accompanying schedule is presented to reconcile and explain the differences in fund
balances as presented in these statements to the net assets presented in the Government-Wide
Financial Statements. The City has presented all major funds that met qualifications of GASB
Statement No. 34. In addition, the City has presented the Street Maintenance Special Revenue Fund
as a major fund because the City believes the financial position and activities of this fund are
significant to the City as a whole.
26
CITY OF RANCHO PALOS VERDES
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2003
NOTE #1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, Continued
All governmental funds are accounted for on a spending or “current financial resources”
measurement focus and the modified accrual basis of accounting. Accordingly, only current assets
and current liabilities are included on the Balance Sheets. The Statement of Revenues, Expenditures
and Changes in Fund Balances present increases (revenues and other financing sources) and
decreases (expenditures and other financing uses) in fund balances. Revenues are recognized in the
accounting period in which they become susceptible to accrual, that is, when they become both
measurable and available to finance expenditures of the current period. “Measurable” means that the
amount of the transaction can be determined, and “available” means collectible within the current
period or soon enough thereafter to be used to pay liabilities of the current period. Accrued revenues
include property taxes received within 60 days after year-end (see Note #11), taxpayer-assessed
taxes such as sales taxes, and earnings on investments. Grant funds earned but not received are
recorded as a receivable, and grant funds received before the revenue recognition criteria have been
met are reported as deferred revenues. Expenditures are recorded when the fund liability is incurred,
if measurable, except for immature interest on general long-term debt, which is recognized when due.
The City reports the following major governmental funds:
The General Fund is the government’s primary operating fund. It accounts for all financial resources
of the City, except those that are required to be accounted for in another fund.
The Street Maintenance Special Revenue Fund is used to account for State highway users tax used
for street maintenance, right-of-way acquisition and street construction.
The Capital Improvement Capital Projects Fund is used to account for the funds used for the City’s
capital improvement projects.
The RDA Debt Service Fund is used to account for the accumulation of resources for, and the
payment of principal and interest on the RDA’s debt and other long-term obligations.
Proprietary Fund Financial Statements
Proprietary fund types are accounted for using the “economic resources” measurement focus and
accrual basis of accounting. This means that all assets and liabilities (whether current or non-current)
associated with the activity are included on the balance sheet. Their reported fund equity presents
total net assets. The operating statement of the proprietary funds present increases (revenues) and
decreases (expenses) in total net assets. Revenues are recognized when they are earned and
expenses are recognized when the liability is incurred.
Proprietary funds distinguish operating revenues and expenses from non-operating items. Operating
revenues and expenses generally result from providing services and producing and delivering goods
in connection with a proprietary fund’s principal ongoing operations. The principal operating revenues
of the City’s internal service funds are charges to other funds for services. Operating expenses for
the internal service funds include the costs of employee benefits, maintenance of capital assets, and
depreciation on capital assets. All revenues and expenses not meeting this definition are reported as
non-operating revenues and expenses.
The City’s internal service funds are presented in the proprietary funds financial statements. Because
the principal users of the internal services are the City’s governmental activities, the financial
statements of the internal service funds are consolidated into the governmental column when
presented in the government-wide financial statements. To the extent possible, the cost of these
services is reported in the appropriate functional activity (general government, public safety, public
works, etc.).
27
CITY OF RANCHO PALOS VERDES
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2003
NOTE #1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, Continued
The City uses the internal service funds to finance and account for goods and services provided by
one City department to other City department including the purchase and maintenance of equipment,
replacement of buildings and employee benefits.
E. Budgetary Accounting:
Annual budgets are adopted on a basis consistent with GAAP for all governmental funds. All annual
appropriations lapse at fiscal year-end. Throughout the year, the City Council made several
supplementing budgetary adjustments to the General fund, Special Revenue funds, Capital Projects
funds, Proprietary funds and the Permanent fund. These adjustments resulted in a net appropriation
increase in the amount of $4,309,720. This increase resulted primarily from amounts carried over
from FY 2001-02 as continuing appropriations.
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,
returned to the taxpayers through revised tax rates or revised fee schedules, or an excess in one year
may be offset against a deficit in the following year. For the fiscal year ended June 30, 2003, based
on calculations by City Management, proceeds of taxes did not exceed related appropriations.
F. Advances to Other Funds
Long-term inter-fund advances are recorded as a receivable in the advancing governmental fund and
as a liability in the fund receiving the advance. Accrued unpaid interest is deferred in the advancing
governmental fund and the principal portion of the advance is reported as a reservation of fund
balance.
G. Capital Assets
Capital assets, which include land, machinery and equipment (vehicles, computers, etc.), buildings
and improvements, and infrastructure assets (street systems, storm drains, sewer systems, etc.), are
reported in Governmental Activities column of the Government-Wide Financial Statements. Capital
assets are defined by the City as all land and buildings, vehicles, computers and equipment with an
initial individual cost of more than $5,000; and improvements and infrastructure assets with costs of
more than $100,000. Such assets are recorded at historical cost or estimated historical cost if
purchased or constructed. Donated or annexed capital assets are recorded at estimated market
value at the date of donation or annexation.
The costs of normal maintenance and repairs that do not add to the value of the asset or materially
extend assets lives are not capitalized. Depreciation is recorded in the Government-Wide Financial
Statements on a straight-line basis over the useful life of the assets as follows:
Buildings and improvements 25 to 50 years
Vehicles, computers, and equipment 3 to 10 years
Infrastructure Assets
Roadway Network 10 to 100 years
Sewer Network 25 to 50 years
Storm Drain Network 30 to 100 years
Parks and Recreation Network 25 years
28
CITY OF RANCHO PALOS VERDES
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2003
NOTE #1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, Continued
H. Employee Compensated Absences:
City employees may receive from 10 to 20 days vacation time each year, depending upon length of
service. An employee may accumulate earned vacation time up to a maximum of two years’ worth of
accrued vacation leave. Upon termination, employees are paid the full value of their unused vacation
time at their existing salary. There is no fixed payment schedule for employee compensated
absences.
At June 30, 2003, vested accrued vacation and compensatory time amounted to $190,818.
I. Investments:
The City has adopted the provisions of Governmental Accounting Standards Board (GASB)
Statement No 31, “Accounting and Financial Reporting for Certain Investments and External Pools”,
which require governmental entities to report certain investments at fair value in the balance sheet
and recognize the corresponding change in the fair value of investments in the year in which the
change occurred. In accordance with GASB Statement No. 31, the City has adjusted certain
investments to fair value (when material).
Investments are included within the financial statement classifications of “Cash and investments” and
are stated at fair value, (see Note #2).
J. Cash and Cash Equivalents:
For purposes of the statement of cash flows of the proprietary funds, all cash and investments with an
original maturity of 90 days or less are considered to be cash and cash equivalents. As explained in
Note #2, the City pools it investment funds for maximum return. A substantial portion of these
investments is held in the State Treasurer’s Local Agency Investment Pool, which is highly liquid.
The City has no non-cash investing, capital, or financing activities to be reported on the statement of
cash flows.
K. Claims and Judgments:
When it is probable that a claim liability has been incurred, and the amount of the loss can be
reasonably estimated, the City records the estimated loss, net of any insurance coverage under its
self-insurance program. At June 30, 2003, in the opinion of the City Attorney, the City had no
material claims, which require loss provisions in the financial statements. Small claims and
judgments are recorded as expenditures when paid.
The City’s self-insurance program is administered through the California Joint Powers Authority (the
CJPIA), which is described at Note #8. The CJPIA is a public entity risk pool, which is accounted for
under the provisions of GASB Statement 10. Claim losses recorded in the CJPIA include both
current claims and Incurred But Not Reported claims (IBNR). The City records amounts deposited
with CJPIA as insurance expenditures in the General Fund when paid. These deposits are subject to
retrospective adjustment. Favorable claims experience result in a refund of deposits from the CJPIA
and such refunds, if any, are recorded as a reduction of insurance expenditures in the year received.
Adverse claims experience result in the payment of additional deposits and such deposits, if any, are
recorded as insurance expenditures when paid.
29
CITY OF RANCHO PALOS VERDES
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2003
NOTE #1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, Continued
L. Estimates:
The preparation of financial statements in conformity with accounting principles generally accepted in
the United States of America requires management to make estimates and assumptions that effect
certain reported amounts and disclosures. Accordingly, actual results could differ from those
estimates.
M. Use of Restricted Resources:
When both restricted and unrestricted resources are available for use, it is the City’s policy to use
restricted resources first, and then unrestricted resources as they are needed.
NOTE #2 – CASH AND INVESTMENTS
The City maintains a cash and investments pool, which is available for use by all funds. Each fund’s
portion of the pool is displayed on the Financial Statements as "Cash and Investments".
Interest income earned on pooled cash and investments is allocated quarterly to the funds based on
average monthly cash and investment balances. Interest income from restricted cash is allocated directly
to the fund earning the income.
Authorized Investments:
Under provisions of the City’s Investment Policy, and in accordance with Section 53601 of the California
Government Code, the City may invest in the following types of instruments, subject to certain restrictions
as to maturity and percentage of portfolio:
Demand Deposits and Money Market Accounts
Insured Certificates of Deposit
Repurchase Agreements
Obligations of the U.S. Treasury and U.S. Agencies
Assessment Bonds of the City of Rancho Palos Verdes
California Local Agency Investment Fund (LAIF)
Shares of “Money Market Funds”
Throughout the year ended June 30, 2003, the City did not utilize overnight Repurchase Agreements.
Classification of Deposits and Investments by Credit Risk
Statement No. 3 of the Governmental Accounting Standards Board requires that deposits and
investments be classified into three categories of credit risk. These categories are as follows:
Deposits:
Category 1: Insured or collateralized with securities held by the City or by its agent in the City’s
name.
Category 2: Collateralized with securities held by the pledging financial institution's trust department or
agent in the City's name.
Category 3: Uncollateralized. This includes any bank balance that is collateralized with securities held by
the pledging financial institution or by its trust department or agent, but not in the City’s
name.
30
CITY OF RANCHO PALOS VERDES
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2003
NOTE #2 – CASH AND INVESTMENTS, Continued
Investments:
Category 1: Insured or registered, or securities held by the City or its agent in the City's name.
Category 2: Uninsured and unregistered, with securities held by the pledging financial institutions or
counterparty's trust department or agent in the City's name.
Category 3: Uninsured and unregistered, with securities held by the counterparty or by its trust
department or agent, but not in the City's name.
Deposits and investments were categorized as follows at June 30, 2003:
BANK BALANCE -
CATEGORY BANK CARRYING FAIR
Categorized: 1 2 3 BALANCES AMOUNTS VALUE
Demand Deposits 100,000$ 28,419$ 128,419$ (228,706)$
Investments at June 30, 2003, by risk category are as follows:
1 2 3
Investments:
Local Agency
Investment Fund
(1)
-$ -$ -$ 28,324,360 28,404,979$
(2)
Petty cash on hand at June 30, 2003 1,000
Total Cash and Investments 28,096,654$
CATEGORY
Cash and investments are reported in the accompanying financial statements as follows:
Governmental Funds 24,208,053$
Proprietary Funds 3,888,601
28,096,654$
(1)
Not subject to categorization.
(2)
The management of the State of California Pooled Money Investment Account (generally referred to
as LAIF) has indicated to the City that as of June 30, 2003, the carrying amount of the pool was
$55,429,568,408 and the estimated market value of the pool (including accrued interest) was
$55,709,492,881. The City's proportionate share of the value is $28,324,360. Certain derivative
securities or similar products in the form of structured notes are included in the LAIF investment
portfolio, totaling $304,000,000 and asset-backed securities totaling $985,676,000. The LAIF (and
the City's) exposure to risk (credit, market, or legal) is not currently available.
Fair Value of Investments
GASB Statement No. 31 generally applies to investments in external investment pools (State of California
LAIF), investments purchased with maturities greater than one year, mutual funds, and certain investment
pools agreements. Generally, governmental entities need to report the “fair value” changes for these
investments at year-end and record these gains or losses on their income statement.
31
CITY OF RANCHO PALOS VERDES
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2003
NOTE #2 – CASH AND INVESTMENTS, Continued
The City holds an investment in LAIF that is subject to being adjusted to “fair value”. The City is required
to disclose its methods and assumptions used to estimate the fair value of its holdings in LAIF. The City
relied upon information provided by the State Treasurer when estimating the City’s fair value position of
investments held in LAIF. The City had a contractual withdrawal value of $28,324,360 whose pro-rata
share of fair value was estimated by the state Treasurer to be $28,404,979. The fair value change in this
investment for the year came to an amount that was not material for presentation in the financial
statements.
LAIF is a governmental investment pool managed and directed by the California State Treasurer and is
not registered with the Securities and Exchange Commission. An oversight committee, comprised of
California State officials and various participants, provide the management of the fund. The daily
operations and responsibilities of LAIF fall under the auspices of the State Treasurer’s office. The City is
a voluntary participant in the investment pool.
NOTE #3 – INTERFUND TRANSACTIONS
Inter-fund Balances
Inter-fund balances consisted of the following at June 30, 2003:
Due to the General Fund from:
RDA Debt Service 40,355$
General fund monies were used to cover an RDA Debt Service fund negative cash
balance for the ERAF shift and property tax administrative fee.
Due to the Capital Improvement Projects Fund from:
Bikeways 44$
The CIP fund covered a Bikeways fund negative cash balance for interest receivable.
CDBG 45,824
The CIP fund covered a CDBG fund negative cash balance for grants and interest
receivable.
Inter-fund Advances
The General Fund has advanced the RDA Debt Service Fund amounts as described below:
Balance Balance
July 1, 2002
Additions
Deletions
June 30, 2003
Advances to the Redevelopment Agency 10,875,997$ 575,485$ 11,451,482$
32
CITY OF RANCHO PALOS VERDES
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2003
NOTE #3 – INTERFUND TRANSACTIONS, Continued
The City has entered into an agreement to provide the RDA operating funds and staff assistance,
supplies, technical and other services and facilities of the City as the RDA requires in carrying out its
function under the community redevelopment law. The RDA will repay the resulting indebtedness, plus
interest, from incremental property tax revenues arising from the project area, as such revenue becomes
available. As of June 30, 2003, no revenue was available to the RDA to repay the advances due to the
City, nor are sufficient revenues expected to be available to repay advances in the immediate future.
Variable interest was accrued at a rate of 6.43 percent and 5.18 percent respectively during the fiscal
years ended June 30, 2002 and 2003. Of the $11,451,482 remaining indebtedness, $9,105,496 relates
to the Portuguese Bend portion of the RDA, while $2,345,986 relates to the Abalone Cove portion.
During the year ended June 30, 2003, accrued interest of $448,518 was added to the balance of the
advance to the Portuguese Bend Fund, while principal of $12,000 and accrued interest of $114,967 was
advanced to the Abalone Cove Fund. No interest has ever been paid by the RDA on these advances;
therefore, the interest component of the advance has been recorded as deferred revenue in the General
Fund of the City.
Inter-fund Transfers
Inter-fund transfers for the year ended June 30, 2003 consisted of the following:
General Street Other
Fund Maintenance Governmental Total
General Fund 100,162$ 100,162$
Street Maintenance 344,375$ 391,115 735,490
Capital Improvement Project 89,161$ 387,510 476,671
Other Governmental 203,851 159,700 363,551
Internal Service 105,000 52,516 157,516
Total 653,226$ 89,161$ 1,091,003$ 1,833,390$
Transfer From
Transfer To
Transfers are used to (1) move revenues from the fund that statute or budget requires to collect them to
the fund that statute or budget requires to expend them and (2) use unrestricted revenues collected in the
General Fund to finance various programs accounted for in other funds in accordance with budgetary
authorizations or grant matching requirements.
NOTE #4 – CAPITAL ASSETS AND DEPRECIATION
In accordance with GASB Statement No. 34, the City has reported all capital assets including
infrastructure in the Government-Wide Statement of Net Assets. The City elected to use the basic
reporting approach as defined by GASB Statement No. 34 for all infrastructure, whereby depreciation
expense and accumulated depreciation has been recorded. The following table presents the capital
assets activity for the year ended June 30, 2003.
33
CITY OF RANCHO PALOS VERDES
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2003
NOTE #4 – CAPITAL ASSETS AND DEPRECIATION, Continued
Depreciation expense was charged to functions/programs of the primary government as follows:
Beginning Ending
Governmental Activities
Balance
Increases
Decreases
Balance
Capital assets not being depreciated:
Land 15,058,724$ 15,058,724$
Construction in progress 5,470,920 4,183,580$ (8,223,159)$ 1,431,341
Total capital assets not being depreciated 20,529,644 4,183,580 (8,223,159) 16,490,065
Capital assets being depreciated:
Buildings and improvements 3,197,989 3,197,989
Vehicles 177,069 177,069
Computer equipment 223,451 104,165 (131,199) 196,417
Furniture, fixtures and equipment 291,491 149,091 440,582
Infrastructure
Roadway system 75,191,205 2,070,393 77,261,598
Sewer system 25,755,463 25,755,463
Storm drain system 6,717,814 4,769,364 11,487,178
Parks system 4,191,673 1,383,402 5,575,075
Total capital assets being depreciated 115,746,155 8,476,415 (131,199) 124,091,371
Less accumulated depreciation for:
Buildings and improvements (955,070) (63,960) (1,019,030)
Vehicles (121,733) (13,254) (134,987)
Computer equipment (175,538) (42,354) 117,796 (100,097)
Furniture, fixtures and equipment (220,017) (36,248) (256,265)
Infrastructure
Roadway system (23,749,621) (2,243,137) (25,992,758)
Sewer system (12,983,793) (606,144) (13,589,937)
Storm drain system (901,867) (124,195) (1,026,062)
Parks system (3,532,146) (35,338) (3,567,484)
Total accumulated depreciation (42,639,785) (3,164,630) 117,796 (45,686,620)
Total capital assets being depreciated, net 73,106,370 5,311,785 (13,403) 78,404,751
Governmental activities capital assets, net 93,636,014$ 9,495,365$ (8,236,562)$ 94,894,816$
Depreciation expense was charged to functions/programs of the primary government as follows:
Administration 63,960$
Public works, including depreciation of general infrastructure assets 2,973,476
Recreation services 35,338
Capital assets held by the City's internal service funds are charged to the various
functions based on their usage of the assets 91,856
Total Depreciation Expense - Governmental Activities 3,164,630$
NOTE #5 – LONG-TERM DEBT
Balance Balance Amount Due
July 1, 2002 Additions Deletions June 30, 2003 in 2004
RDA Tax Increment Bond 5,455,000$ 5,455,000$
Employee compensated absences 162,750 137,977$ (109,909)$ 190,818 128,864$
Totals 5,617,750$ 137,977$ (109,909)$ 5,645,818$ 128,864$
34
CITY OF RANCHO PALOS VERDES
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2003
NOTE #5 – LONG-TERM DEBT, Continued
A. RDA Tax Increment Bond
In July 1991, the RDA received $10,000,000 in loan proceeds (the Loan) from the County of Los
Angeles (the County) upon the County’s issue of Abalone Cove Improvement Bonds 2651-M
pursuant to a Reimbursement and Settlement Agreement (the Agreement), dated October 27, 1987 in
connection with the Horan Lawsuit. The Loan was made for the purpose of abating the Abalone
Cove landslide. The settlement Loan was secured by property assessment liens in the Abalone Cove
project area.
As stipulated by the parties to the Agreement, a portion of the Loan proceeds was used to repay a tax
allocation and revenue anticipation promissory note issued to the County in the principal amount of
$1,450,000, plus accrued interest equal to $179,244. A second portion of the proceeds was used to
repay expenses advanced by the County in the amount of $135,614. A third portion was used to
repay certain loans from the City to the RDA in the amount of $787,340.
Per the terms of the Agreement, $1,000,000 of the proceeds was deposited in the Abalone Cove
Maintenance Nonexpendable Trust Fund of the Joint Powers Improvement Authority. The remainder
of the proceeds was accounted for in the RDA’s Abalone Cove Fund. Concurrent with the execution
of the Agreement, the County deeded its title in the Abalone Cove Beach Park to the RDA.
As part of the Agreement, the RDA is required to transfer 17 percent of tax increment revenue to the
Consolidated Fire Protection District of the County and 50.9 percent of tax increment revenue for debt
repayment to the County. In accordance with the Agreement, the RDA was to pay the Loan principal
plus interest at 7.7654 percent over a 30-year period that began in 1992. However, these debt
payments were to be deferred 10 years until the fiscal year ended June 30, 2002.
As part of the deferral arrangement, the accrued interest from the inception of the Loan through
June 30, 2002, in the amount of $7,314,944, was scheduled for payment over a 20-year period
beginning in the fiscal year ending June 30, 2002, with no additional interest. The remaining balance
of $10,274,119 was scheduled for payment to the County over a 20-year period beginning in the
fiscal year ending June 30, 2002, with interest at 7.7654 percent.
On November 1, 1997, the City, RDA and County of Los Angeles entered into a Memorandum of
Understanding (MOU) agreeing to restructure the repayment schedule of the debt owed the County
by the RDA. In accordance with the terms of the MOU, the $10,000,000 loan principal owed the
County was cancelled. As consideration for the loan cancellation, the RDA made a lump sum
payment to the County in the amount of $4,545,000 and issued a $5,455,000 tax increment bond to
the County (the RDA bond). Of the $4,545,000 lump sum payment, $2,000,000 was paid from tax
increment revenue and interest earnings accumulated in the Debt Service Fund. The remaining
$2,545,000 was funded by a combination of a loan from the General Fund of the City to the Agency
for $1,545,000 and a net operating transfer from the Agency’s Abalone Cove Capital Projects Fund to
the Debt Service Fund of $1,000,000. The private property liens resulting from the formation of the
bond assessment district in connection with the Reimbursement and Settlement Agreement in 1987
were discharged in accordance with the terms of the MOU.
The RDA bond was issued as a conduit through the Improvement Authority to the County. No
issuance costs were incurred. One hundred percent of net future tax increment revenue will fund the
payment of the RDA bond debt and the deferred interest from the original Loan until paid in full. In
December 1997, the County began withholding payment of the Agency’s net tax increment revenue
(net of the 17 percent payment to the County Fire Protection District and the 20 percent housing set-
aside amount) to offset the annual principal and interest charges. The principal of the RDA bond will
mature in installments each December 2
nd
, commencing December 2, 2004. Interest accrues at a
rate of 5 percent per annum and is payable in arrears each June 2
nd
and December 2
nd
. Additionally,
35
CITY OF RANCHO PALOS VERDES
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2003
NOTE #5 – LONG-TERM DEBT, Continued
both the accrued interest and deferred interest on the $10,000,000 Loan previously owed the County
was retroactively recalculated from the Loan origination date at a rate of approximately 5 percent
compared to 7.7654 percent per the original Agreement. The recalculated deferred interest is
$3,111,400. The accumulated amount of tax increment withheld over the scheduled principal and
interest payment made during the life of the RDA bond is recorded in the Debt Service Fund as a
prepaid item at June 30, 2003.
After payment of the deferred interest, the RDA may elect to further defer payment to the County of
the 50.9 percent of tax increment revenue in order to extinguish any other indebtedness of the RDA.
This deferral would allow the tax increment to be available for the repayment of loans made to the
RDA by the City (Note #3). In the event the deferral is elected, the debt owed the City is fully
extinguished and no other RDA indebtedness exists, the RDA will transfer all subsequent tax
increment revenue to the County to fund prior deferrals of, and current payments of, the 50.9 percent
of tax increment revenue required to be paid per the Settlement Agreement.
The debt service schedule below summarizes all fixed principal and interest payments for the term of
the RDA bond. Because the payback period for the deferred interest amount will fluctuate depending
on the availability of excess tax increment revenues, no amounts have been included in the following
schedule for repayment of the deferred interest.
Year Ended
June 30 Principal Interest Total
2004 - 272,750$ 272,750$
2005 5,000$ 272,625 277,625
2006 15,000 272,125 287,125
2007-2011 270,000 1,334,250 1,604,250
2012-2016 690,000 1,214,750 1,904,750
2017-2021 1,275,000 972,875 2,247,875
2022-2026 2,085,000 557,875 2,642,875
2027-2028 1,115,000 56,875 1,171,875
5,455,000$ 4,954,125$ 10,409,125$
Tax Allocation Bond
B. Employee Compensated Absences
There is no fixed payment schedule for employee compensated absences. Based on historical
trends, $128,864 is estimated to be the amount that will be used and/or paid out during fiscal year
2003-04.
NOTE #6 – CLASSIFICATIONS OF NET ASSETS AND FUND BALANCE
In the Government-Wide financial statements net assets are classified in the following categories:
Invested in Capital Assets
This category groups all capital assets, including infrastructure, into one component of net assets.
Accumulated depreciation on these assets reduces this category.
Restricted Net Assets
This category presents external restrictions imposed by creditors, grantors, contributions or laws or
regulations of other governments and restrictions imposed by law through constitutional provisions or
enabling legislation.
36
CITY OF RANCHO PALOS VERDES
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2003
NOTE #6 – CLASSIFICATIONS OF NET ASSETS AND FUND BALANCE, Continued
Unrestricted Net Assets
This category represents the net assets of the City that are not externally restricted for any project or
other purpose.
In the Fund Financial Statements the City has established “reserves” to segregate portions of fund
balance which are not appropriable for expenditure in future periods, or which are legally set aside for a
specific future use. In addition, fund balance may be designated to indicate tentative plans for financial
resource utilization of unreserved fund balance in a future period.
The City’s governmental funds reserves and designations at June 30, 2003 are presented below, followed
by explanations of the nature and purpose of each reserve and designation.
Steet Capital Other
General Maintenance Improvement Governmental
Fund Fund Fund Funds
Reserved:
Continuing appropriations 839,680$ 428,600$ 4,372,900$ 293,700$
Reimbursement
settlement agreement 1,000,000
Advances to other funds 5,877,552
Prepaid costs 136,973
Land held for development 702,392
Housing set-aside 786,200
Total Reserved 6,854,205$ 428,600$ 4,372,900$ 2,782,292$
A. Reserves for Encumbrances and Continuing Appropriations
These reserves are maintained for purchase orders and other commitments outstanding at year-end.
B. Reserved for Reimbursement Settlement Agreement
This reserve has been established under the legal requirements of the Reimbursement Settlement
Agreement (see Note #5).
C. Reserved for Advances to Other Funds
This reserve represents the long-term portion of loans from the City’s General Fund to the RDA less
$5,573,930 recorded as deferred revenue (see Note #12).
D. Reserved for Prepaid Items
This reserve is provided to indicate that the asset carrying value is not available to spend to meet
expenditures of the current year.
E. Reserved for Land Held for Development
These funds are reserved for land purchased by the City to be sold or otherwise used for the
development of low and moderate-income housing.
37
CITY OF RANCHO PALOS VERDES
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2003
NOTE #6 – CLASSIFICATIONS OF NET ASSETS AND FUND BALANCE, Continued
F. Reserved for Housing Set-Aside
These funds are reserved for low and moderate-income housing as restricted by law or administrative
action.
NOTE #7 – PENSION PLAN
Plan Description
The City’s defined benefit pension plan provides retirement and disability benefits, annual cost-of-living
adjustments, and death benefits to plan members and beneficiaries. The Plan is part of the Public
Agency portion of the California Public Employees Retirement System (CalPERS), an agent multiple-
employer plan administrated by CalPERS, which acts as a common investment and administrative agent
for participating public employers within the State of California. State statutes, within the Public
Employees’ Retirement Law, establish benefit provisions and other requirements. The City selects
optional benefit provisions from the benefit menu by contract with CalPERS and adopts those benefits
through local ordinance. The CalPERS issues a separate comprehensive annual financial report. Copies
of the CalPERS annual financial report may be obtained from the CalPERS Executive Office – 400 P
Street, Sacramento, California, 95814.
Funding Policy
A contribution of 7 percent of annual covered salary is required for each active plan member. For local
miscellaneous members, the City pays the full 7 percent contribution for all the full-time positions, while
part-time employees must contribute the 7 percent from earnings. Additionally, the City is required to
contribute the actuarially determined remaining amounts necessary to fund the benefits for its members.
The actuarial methods and assumptions used are those adopted by the CalPERS Board of
Administration. The required employer contribution rate for fiscal year 2002-03 was zero percent for local
miscellaneous members. The contribution requirements of the plan members are established by State
statute and the employer contribution rate is established and may be amended by CalPERS.
Annual Pension Cost
For fiscal year 2002-03, the City’s actual and contributed pension cost was $167,423. The required
contribution for fiscal year 2002-03 was determined as part of the June 30, 2001 actuarial valuation using
the entry age normal actuarial cost method with the contributions determined as a percent of pay. The
actuarial assumptions included (a) 8.25 percent investment rate of return (net of administrative
expenses); (b) projected salary increases that vary by duration of service ranging from 3.75 percent to
14.20 percent; and (c) payroll growth of 3.75 percent. Both (a) and (b) include an inflation component of
3.5 percent. The actuarial value of the Plan’s assets was determined using a technique that smoothes
the effect of short-term volatility in the market value of investments over a two to five year period
depending on the size of investment gains and/or losses. The Plan’s un-funded actuarial accrued liability
(or excess assets) is being amortized as a level percentage of projected payroll expenditures on a closed
basis. The remaining amortization period at June 30, 2003, was one year.
38
CITY OF RANCHO PALOS VERDES
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2003
NOTE #7 – PENSION PLAN, Continued
Three-Year Trend Information for Plan:
Annual Percentage
Fiscal Year
Pension Cost
of APC Net Pension
Ending (APC) Contributed
Obligation
6/30/2001
$ 133,460
100% $ 0
6/30/2002
144,783
100% $ 0
6/30/2003
167,423
100% $ 0
Schedule of Funding Status of Plan:
Actuarial
Entry Age
Unfunded
Annual
Valuation
Value of
Normal Accrued
(Overfunded)
Funded
Covered
UAAL as a
Date
Assets
Liability
Liability
Ratio
Payroll
% of Payroll
6/30/2000
$7,227,658
$ 5,690,826 $(1,536,832)
127.0%
$2,102,848
-73.1%
6/30/2001
7,445,220
6,515,182 (930,038)
114.3%
2,086,935
-44.6%
6/30/2002
7,178,677
7,477,012 298,335
96.0% 2,455,956
12.1%
NOTE #8 – INSURANCE
A. Description of Participation in the California Joint Powers Insurance Authority
The City is a member of the California Joint Powers Insurance Authority (CJPIA). The CJPIA is
comprised of over 80 California member cities and is organized under a Joint Powers Agreement
pursuant to the California Government Code. The purpose of the CJPIA is to arrange and administer
programs of insurance for the pooling of self-insured losses and to purchase excess insurance
coverage. Each member city has a representative on the Board of Directors. The accounting
methods used by the CJPIA are more fully described at Note #1-K.
Self-insurance Programs of the CJPIA
• General Liability Insurance
Annual deposits are paid by member cities and are adjusted retrospectively to cover costs. Each
member city, including Rancho Palos Verdes, has a retention level of $30,000 and pays 100
percent of each loss up to $30,000. The City does not share or pay for losses of other member
cities under $30,000. Participating cities then share in the next $30,000 to $750,000 per loss
occurrence. Losses between $750,000 and $5,000,000 are prorated on a payroll basis between
member cities. Losses between $5,000,000 and $50,000,000 are covered by the pool’s
purchased re-insurance. Specific coverage includes automotive liability, personal injury,
contractual liability, errors and omissions and certain other coverage. Beginning with fiscal year
1987, the CJPIA became fully self-insured.
• Workers’ Compensation
Periodic deposits are paid by member cities and are adjusted retrospectively to cover costs.
Each member city has a specific retention level. The City of Rancho Palos Verdes has a
retention level of $50,000 and pays 100 percent of all losses incurred up to $50,000. The City
does not share or pay for losses of other cities under $50,000. Losses of $50,000 to $100,000
39
CITY OF RANCHO PALOS VERDES
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2003
NOTE #8 – INSURANCE, Continued
are prorated among all participating cities on the basis of each city’s total losses under its
retention level. Losses between $100,000 and $2 million are prorated on a payroll basis. Losses
in excess of $2 million and up to a limit of $5 million are covered by excess insurance purchased
by the member cities.
• Property Protection
The City of Rancho Palos Verdes participates in the All Risk Property Protection Program, which
is primarily underwritten by a casualty insurance company. The annual deposits paid by
participating member cities are based upon deductibility levels and are not subject to retroactive
adjustments. The City also has insurance coverage for boiler and machinery.
B. Summary Disclosure of Self-Insurance Losses
The City is exposed to various risks of losses related to torts; theft of, damage to, and destruction of
assets; errors and omissions; injuries to employees; and natural disasters. The City currently reports
all of its risk management activities in its General Fund.
Settled claims have not exceeded any of the coverage amounts in any of the last three fiscal years.
No reductions in coverage occurred in the year ended June 30, 2003. As previously described in
Note #1-K, the City has no material claims, which would require loss provisions in the financial
statements.
NOTE #9 – ASSESSMENT DISTRICTS BOND ISSUES
Assessment District No. 9 issued special assessment bonds for the purpose of public improvements
under the Municipal Improvement acts of 1911 and 1913. Neither the faith, credit, not taxing power of the
City is pledged to the repayment of the bonds. The City is only acting as an agent for the property
owners and bondholders in collecting and forwarding the special assessment. Accordingly, the un-retired
principal at June 30, 2003 of $13,091 has not been recorded as a long-term liability in the Statement of
Net Assets.
NOTE #10 – CONTINGENCIES AND COMMITMENTS
In the normal course of operations, the City has been named as a defendant in various claims and legal
actions. In the opinion of management and legal counsel, the ultimate liability for these legal actions and
claims will not have a material adverse effect on the City’s general-purpose financial statements.
NOTE #11 – PROPERTY TAXES
Under California law, property taxes are assessed and collected by the counties up to 1 percent of
assessed value, plus other increases approved by the voters. The property taxes go into a pool, and are
then allocated to the cities based on complex formulas. Accordingly, the City accrues only those taxes,
which are received from the county within sixty days after year-end.
Lien date March 1
Levy date June 30
Due date November 1 and February 1
Collection dates December 10 and April 10
40
CITY OF RANCHO PALOS VERDES
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2003
NOTE #12 – DEFERRED REVENUES
The deferred revenues in the fund financial statements of the City of Rancho Palos Verdes as of June 30,
2003 consisted of the following:
NOTE #13 – LAND HELD FOR DEVELOPMENT
On March 21, 2000, the City purchased approximately 20 acres of land to be used for an affordable
housing project. The total cost of the land was $702,392. The City has recorded the cost of the land as
an asset in the special revenue fund that purchased the property (Housing Set-Aside fund).
The City expects one or more developers to file an application for a multiple unit housing project, with an
affordable housing element, during the fiscal year ending June 30, 2004. If approved, the City anticipates
transferring the land to a developer for construction of the housing project. The City will recognize a gain
or loss on the disposal of the land at the time a disposition and development agreement is finalized. The
fund balance in the Housing Set-Aside fund has been reserved for an amount equal to the purchase price
of the land.
In the event the Crestridge property is not used for low or moderate income housing, or in the event the
property is used for a purpose that may not be charged against the Housing Set-Aside fund in the full
amount of $702,392, then all, or a portion of the $702,392 purchase price must be reimbursed to the
Housing Set-Aside fund. Following such reimbursement, the fund balance will likely exceed $1 million.
The amount exceeding $1 million is defined as “excess surplus.” In the event of the occurrence of excess
surplus, the RDA may be required to either transfer the excess surplus to the County Housing Authority
within one year, or spend such excess within an additional two years after such occurrence. The
Community Redevelopment Law sets forth substantial penalties if the RDA fails to properly dispose of
excess surplus funds.
NOTE #14 – OTHER REQUIRED FUND DISCLOSURES
The following fund had a deficit fund balance as of June 30, 2003:
RDA Debt Service Fund 10,915,092$
The City plans to finance this deficit through future revenues to the fund.
Source
General Fund
Accrued Interest from Long-Term Advances
to the Redevelopment Agency
$ 5,573,930
Advance on Federal Grant
132,326
Total Deferred Revenues
$ 5,706,256
41
SUPPLEMENTAL STATEMENTS
CITY OF RANCHO PALOS VERDES
JUNE 30, 2003
MAJOR FUND BUDGETARY COMPARISON SCHEDULES
Budgetary comparison statements are presented as part of the basic financial
statements for the General fund and all Major Special Revenue funds as
provided for by GASB Statement No. 34. The budgetary comparison schedules
for the remaining major funds are presented to aid in additional analysis and are
not a required part of the basic financial statements.
42
CITY OF RANCHO PALOS VERDES
SCHEDULE OF REVENUES, EXPENDITURES
AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL
CAPITAL IMPROVEMENT PROJECT CAPITAL PROJECTS FUND
FOR THE YEAR ENDED JUNE 30, 2003
Variance with
Final Budget -
Actual Positive
Original Final Amounts (Negative)
REVENUES
Use of money and property 12,600$ 12,600$ 84,604$ 72,004$
Revenue from other agencies 43,384 43,384
Other revenues 3,000 3,000
Total Revenues 12,600 12,600 130,988 118,388
EXPENDITURES
Current:
Public works 465,740 1,042,907 741,138 301,769
Capital outlay 974,400 3,896,641 3,533,776 362,865
Total Expenditures 1,440,140 4,939,548 4,274,914 664,634
Excess (Deficiency) of Revenues
Over Expenditures (1,427,540) (4,926,948) (4,143,926) 783,022
OTHER FINANCING SOURCES (USES)
Operating transfer in 1,450,140 1,162,577 476,671 (685,906)
Net Change in Fund Balances 22,600 (3,764,371) (3,667,255) 97,116
Fund Balance, Beginning of Year 5,299,247 5,299,247 5,299,247
Fund Balance, End of Year
5,321,847
$
1,534,876
$
1,631,992
$
97,116
$
Budgeted Amounts
43
CITY OF RANCHO PALOS VERDES
SCHEDULE OF REVENUES, EXPENDITURES
AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL
RDA DEBT SERVICE FUND
FOR THE YEAR ENDED JUNE 30, 2003
Variance with
Final Budget -
Actual Positive
Original Final Amounts (Negative)
REVENUES
Taxes 460,000$ 460,000$ 560,170$ 100,170$
Use of money and property 600 600 39 (561)
Total Revenues 460,600 460,600 560,209 99,609
EXPENDITURES
Current:
Administration 12,500 12,500 12,632 (132)
Pass through to other agencies 98,000 98,000 136,904 (38,904)
Debt Service-interest 954,800 954,800 836,235 118,565
Total Expenditures 1,065,300 1,065,300 985,771 79,529
Excess (Deficiency) of Revenues
Over Expenditures (604,700) (604,700) (425,562) 179,138
OTHER FINANCING SOURCES (USES)
Advances to Redevelopment Agency 682,050 682,050 (12,000) (694,050)
Total Other Financing Sources (Uses) 682,050 682,050 (12,000) (694,050)
Net Change in Fund Balances 77,350 77,350 (437,562) (514,912)
Fund Balance, Beginning of Year (10,477,530) (10,477,530) (10,477,530)
Fund Balance, End of Year
(10,400,180)
$
(10,400,180)
$
(10,915,092)
$
(514,912)
$
Budgeted Amounts
44
CITY OF RANCHO PALOS VERDES
JUNE 30, 2003
NONMAJOR GOVERNMENTAL FUNDS
Special Revenues Fund Descriptions
Special Revenue Funds are used to account for taxes and other revenues set aside in accordance with
law or administrative regulation for a specific purpose.
Air Quality Management – to account for AB2766 fees received to fund programs to reduce air pollution
from motor vehicles.
Community Development Block Grant (CDBG) – to account for Federal Grants received from the
Department of Housing and Urban Development (HUD).
El Prado – to account for taxes collected to maintain and service existing and proposed improvements.
Redevelopment Agency (RDA) – Housing Set-Aside – to account for the portion of Redevelopment tax
increment monies which is a requirement under California Redevelopment Law, Section 33334, to be
set-aside for the development of low and moderate income housing.
Proposition A – to account for the City’s share of an additional one-half percent sales tax designated to
fund certain public transportation orientated projects.
Proposition C – to account for sales taxes received from the County and used to support public transit
and related services.
Recycling – to account for monies received for the City’s recycling program used for community
improvement, grants and promotion of recycling.
Solid Waste – to account for AB939 fees received for state mandated waste reduction and recycling
plans and programs.
LLESS/COPS/CLEEP – to account for federal grant funds for local law enforcement supplemental
services, AB3229 funds used for additional law enforcement services and public safety technology
equipment.
1972 Act Landscaping and Lighting District – to account for revenues and costs associated with the
City’s landscaping and lighting district.
1911 Act Lighting District – to account for revenue and costs associated with a lighting district
transferred to the “city-wide” landscape and lighting district from the County in 1995.
Joint Powers Improvement Authority (JPIA) – Portuguese Bend – to account for maintenance and
repairs of landslide abatement improvements in the Portuguese Bend Project area.
Habitat Restoration – to account for fees paid by developers for conservation easements to be used
exclusively for future habitat restoration efforts on City owned property.
Subregion One Maintenance – to account for monies used to maintain public improvements and habitat
areas dedicated to the City upon completion of the Subregion One residential development project.
45
CITY OF RANCHO PALOS VERDES
JUNE 30, 2003
NONMAJOR GOVERNMENTAL FUNDS
Special Revenues Fund Descriptions, Continued
Measure A – to account for the voter approved 1992 and 1996 Measure A funds and other state and
county grants used for the acquisition of open space and park improvements.
Abalone Cove Sewer Assessment District – to account for property assessments used to partially pay
for operation and maintenance of the Abalone Cove sewer system.
Capital Projects Funds Descriptions
Capital Projects Funds are used to account for financial resources used for the acquisition or
construction of major capital facilities.
Bikeways – to account for State funds used for the construction of bikeways and/or pedestrian facilities.
Redevelopment Agency (RDA) – Abalone Cove – to account for landslide abatement in the Abalone
Cove Project Area.
Environmental Excise Tax – to account for taxes received in connection with new construction within
the City.
Quimby – to account for funds from the payment of fees or the dedication of land for park and
recreation purposes.
Affordable Housing – to account for in-lieu fees by developers for the City to construct low and
moderate income housing.
Redevelopment Agency (RDA) – Portuguese Bend – to account for monies used for landslide
abatement in the Portuguese Bend Project Area.
Utility Undergrounding – to account for the accumulation of monies transferred from the General fund,
to be used for relocating utility poles and lines on arterial roadways underground, and provide residents
assistance with utility undergrounding in residential areas of the City.
Roadway Beautification – to account for the accumulation of monies transferred from the General and
Recycling funds to be used for landscape improvements along the City’s roadways.
Permanent Fund Description
Permanent Funds are used to account for resources legally restricted to the extent that only earnings,
and not principal, may be used for purposes that support the City’s programs.
Joint Powers Improvement Authority (JPIA) – Abalone Cove – to account for monies received as part of
a July 1991 Reimbursement and Settlement Agreement with the County of Los Angeles. As a part of
this agreement the Authority received a $1,000,000 deposit of nonexpendable principal. The interest
earnings are used to pay for maintenance and repair of Abalone Cove landslide abatement
improvements.
46
CITY OF RANCHO PALOS VERDES
NON-MAJOR GOVERNMENTAL FUNDS
COMBINING BALANCE SHEET
JUNE 30, 2003
Air Quality
ASSETS Management CDBG El Prado
Cash and cash equivalents 24,703$ 10,778$
Taxes 41
Interest 63 45
Other 12,665 58,978$
Prepaid items 2,255
Land held for development
Total Assets
37,431
$
61,233
$
10,864
$
LIABILITIES AND FUND BALANCES
LIABILITIES
Accounts payable and accrued liabilities 75$ 9,829$ 26$
Due to other funds 45,824
Total Liabilities 75 55,653 26
FUND BALANCES
Reserved for:
Continuing appropriations
Reimbursement settlement agreement
Land development
Housing set-aside
Unreserved, reported in:
Special revenue funds 37,356 5,580 10,838
Capital projects funds
Permanent funds
Total Fund Balances 37,356 5,580 10,838
Total Liabilities and
Fund Balances
37,431
$
61,233
$
10,864
$
Special Revenue Funds
47
Redevelopment
Agency -
Housing Proposition Proposition Solid
Set-Aside A C Recycling Waste
778,767$ 417,581$ 341,245$ 584,827$ 653,247$
4,002
3,431 1,523 2,690 2,665 3,287
50,464 19,970
702,392
1,488,592
$
419,104
$
343,935
$
637,956
$
676,504
$
2,859$ 5,312$ 21,046$
2,859 5,312 21,046
12,000 121,900
702,392$
786,200
0 404,245 343,935$ 510,744 655,458
1,488,592 416,245 343,935 632,644 655,458
1,488,592
$
419,104
$
343,935
$
637,956
$
676,504
$
Special Revenue Funds
48
CITY OF RANCHO PALOS VERDES
NON-MAJOR GOVERNMENTAL FUNDS
COMBINING BALANCE SHEET (CONTINUED)
JUNE 30, 2003
Special Revenue Funds
LLESS/
ASSETS COPS/CLEEP 1972 Act 1911 Act
Cash and investments 86,713$ 242,975$ 1,055,055$
Taxes 5,201 11,443
Interest 415 1,083 4,507
Other 8,466
Prepaid items
Land held for development
Total Assets
95,594
$
249,259
$
1,071,005
$
LIABILITIES AND FUND BALANCES
LIABILITIES
Accounts payable and accrued liabilities 28,221$ 404$ 44,351$
Due to other funds
Total Liabilities 28,221 404 44,351
FUND BALANCES
Reserved for:
Continuing appropriations 11,000
Reimbursement settlement agreement
Land development
Housing set-aside
Unreserved, reported in:
Special revenue funds 56,373 248,855 1,026,654
Capital projects funds
Permanent funds
Total Fund Balances 67,373 248,855 1,026,654
Total Liabilities and
Fund Balances
95,594
$
249,259
$
1,071,005
$
49
Special Revenue Funds
Joint Powers
Improvement Abalone Cove
Authority - Sewer
Portuguese Habitat Subregion One Assessment
Bend Restoration Maintenance Measure A District
252,202$ 243,103$ 827,761$ 58,062$ 42,669$
1,120 1,039 3,549 248 235
192
253,322
$
244,142
$
831,310
$
58,310
$
43,096
$
8,650$ 1,450$ 9,304$
8,650 1,450 9,304
127,500$ 21,300
244,672 116,642 829,860 58,310$ 12,492
244,672 244,142 829,860 58,310 33,792
253,322
$
244,142
$
831,310
$
58,310
$
43,096
$
50
CITY OF RANCHO PALOS VERDES
NON-MAJOR GOVERNMENTAL FUNDS
COMBINING BALANCE SHEET (CONTINUED)
JUNE 30, 2003
Redevelopment
Agency -
Abalone Environmental
ASSETS Bikeways Cove Excise Tax Quimby
Cash and investments 56,187$ 782,513$ 336,291$
Taxes
Interest 44$ 261 3,294 1,070
Other
Prepaid items
Land held for development
Total Assets
44
$
56,448
$
785,807
$
337,361
$
LIABILITIES AND FUND BALANCES
LIABILITIES
Accounts payable and accrued liabilities 3,303$
Due to other funds 44$
Total Liabilities 44 3,303
FUND BALANCES
Reserved for:
Continuing appropriations
Reimbursement settlement agreement
Land development
Housing set-aside
Unreserved, reported in:
Special revenue funds
Capital projects funds 53,145 785,807$ 337,361$
Permanent funds
Total Fund Balances 53,145 785,807 337,361
Total Liabilities and
Fund Balances
44
$
56,448
$
785,807
$
337,361
$
Capital Projects Funds
51
Permanent
Fund
Joint Powers
Redevelopment Improvement Total
Agency - Authority - Non-major
Affordable Portuguese Utility Roadway Abalone Governmental
Housing Bend Undergrounding Beautification Cove Funds
997,304$ 446,798$ 232,193$ 404,455$ 1,455,803$ 10,331,232$
20,687
4,265 2,056 993 1,676 6,688 46,247
150,735
15,497 17,752
702,392
1,001,569
$
464,351
$
233,186
$
406,131
1,462,491
$
11,269,045
$
6,135$ 2,437$ 143,402$
45,868
6,135 2,437 189,270
293,700
1,000,000 1,000,000
702,392
786,200
4,562,014
1,001,569$ 458,216$ 233,186$ 406,131 3,275,415
460,054 460,054
1,001,569 458,216 233,186 406,131 1,460,054 11,079,775
1,001,569
$
464,351
$
233,186
$
406,131
$
1,462,491
$
11,269,045
$
Capital Projects Funds
52
CITY OF RANCHO PALOS VERDES
NON-MAJOR GOVERNMENTAL FUNDS
COMBINING STATEMENT OF REVENUES, EXPENDITURES
AND CHANGES IN FUND BALANCES
YEAR ENDED JUNE 30, 2003
Air Quality
Management CDBG El Prado
REVENUES
Taxes 1,235$
Use of money and property 247$ 208
Charges for services
Revenue from other agencies 48,752 183,213$
Other revenues
Total Revenues 48,999 183,213 1,443
EXPENDITURES
Current:
Public safety
Public works 43,695 138,545 181
Capital outlay
Total Expenditures 43,695 138,545 181
Excess (Deficiency) of Revenues Over
Over Expenditures 5,304 44,668 1,262
Other Financing Sources (Uses):
Transfers in
Advances to Redevelopment Agency
Transfers out (38,652)
Total Other Financing Sources (Uses) (38,652)
Net Change in Fund Balances 5,304 6,016 1,262
FUND BALANCES, Beginning of Year 32,052 (436) 9,576
FUND BALANCES, End of Year
37,356
$
5,580
$
10,838
$
Special Revenue Funds
53
Redevelopment
Agency -
Housing Proposition Proposition Solid
Set-Aside A C Recycling Waste
139,973$ 558,342$ 463,039$
15,923 6,242 12,367 13,662$ 15,671$
79,811
46,146 11,915 15,474
267,781
155,896 564,584 521,552 293,358 110,956
79 424,877 1,776 215,357 100,885
79 424,877 1,776 215,357 100,885
155,817 139,707 519,776 78,001 10,071
(471,338) (112,000) (112,216)
(471,338) (112,000) (112,216)
155,817 139,707 48,438 (33,999) (102,145)
1,332,775 276,538 295,497 666,643 757,603
1,488,592
$
416,245
$
343,935
$
632,644
$
655,458
$
Special Revenue Funds
54
CITY OF RANCHO PALOS VERDES
NON-MAJOR GOVERNMENTAL FUNDS
COMBINING STATEMENT OF REVENUES, EXPENDITURES
AND CHANGES IN FUND BALANCES (CONTINUED)
YEAR ENDED JUNE 30, 2003
Special Revenue Funds
LLESS/
COPS/CLEEP 1972 Act 1911 Act
REVENUES
Taxes 332,806$ 343,330$
Use of money and property 2,927$ 5,167 20,604
Charges for services
Revenue from other agencies 137,858
Other revenues
Total Revenues 140,785 337,973 363,934
EXPENDITURES
Current:
Public safety 259,932
Public works 53,754 328,171
Capital outlay
Total Expenditures 259,932 53,754 328,171
Excess (Deficiency) of Revenues Over
Over Expenditures (119,147) 284,219 35,763
Other Financing Sources (Uses):
Transfers in 26,221
Advances to Redevelopment Agency
Transfers out (270,000)
Total Other Financing Sources (Uses) 26,221 (270,000)
Net Change in Fund Balances (92,926) 14,219 35,763
FUND BALANCES, Beginning of Year 160,299 234,636 990,891
FUND BALANCES, End of Year
67,373
$
248,855
$
1,026,654
$
55
Special Revenue Funds
Joint Powers
Improvement Abalone Cove
Authority - Sewer
Portuguese Habitat Subregion One Parks/ Assessment
Bend Restoration Maintenance Measure A District
20,636$
5,169$ 5,001$ 17,217$ 1,418$ 941
62,387
8,494
5,169 5,001 17,217 72,299 21,577
33,460 17,400 45,656
23,902
33,460 17,400 69,558
(28,291) 5,001 (183) 72,299 (47,981)
95,000 35,000
(59,510)
95,000 (59,510) 35,000
66,709 5,001 (183) 12,789 (12,981)
177,963 239,141 830,043 45,521 46,773
244,672
$
244,142
$
829,860
$
58,310
$
33,792
$
56
CITY OF RANCHO PALOS VERDES
NON-MAJOR GOVERNMENTAL FUNDS
COMBINING STATEMENT OF REVENUES, EXPENDITURES
AND CHANGES IN FUND BALANCES (CONTINUED)
YEAR ENDED JUNE 30, 2003
Redevelopment
Agency -
Abalone Environmental
Bikeways Cove Excise Tax Quimby
REVENUES
Taxes
Use of money and property 338$ 1,636$ 14,485$ 8,340$
Charges for services
Revenue from other agencies 26,949 50,000
Other revenues 108,242
Total Revenues 27,287 1,636 122,727 58,340
EXPENDITURES
Current:
Public safety
Public works 5,487 20,584
Capital outlay 20,582 291,518
Total Expenditures 26,069 312,102
Excess (Deficiency) of Revenues Over
Over Expenditures 27,287 (24,433) 122,727 (253,762)
Other Financing Sources (Uses):
Transfers in 107,330
Advances to Redevelopment Agency 12,000
Transfers out (27,287)
Total Other Financing Sources (Uses) (27,287) 12,000 107,330
Net Change in Fund Balances (12,433) 122,727 (146,432)
FUND BALANCES, Beginning of Year 65,578 663,080 483,793
FUND BALANCES, End of Year
-
$
53,145
$
785,807
$
337,361
$
Capital Projects
57
Permanent
Fund
Joint Powers
Redevelopment Improvement Total
Agency - Authority - Non-major
Affordable Portuguese Utility Roadway Abalone Governmental
Housing Bend Undergrounding Beautification Cove Funds
1,859,361$
20,524$ 10,376$ 4,777$ 6,927$ 34,841$ 225,008
79,811
45,836 628,530
384,517
20,524 56,212 4,777 6,927 34,841 3,177,227
259,932
27,821 17,735 1,475,463
336,002
27,821 17,735 2,071,397
20,524 28,391 4,777 6,927 17,106 1,105,830
100,000 363,551
12,000
(1,091,003)
100,000 (715,452)
20,524 28,391 4,777 106,927 17,106 390,378
981,045 429,825 228,409 299,204 1,442,948 10,689,397
1,001,569
$
458,216
$
233,186
$
406,131
$
1,460,054
$
11,079,775
$
Capital Projects
58
CITY OF RANCHO PALOS VERDES
SCHEDULE OF REVENUES, EXPENDITURES
AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL
AIR QUALITY MANAGEMENT SPECIAL REVENUE FUND
FOR THE YEAR ENDED JUNE 30, 2003
Variance with
Final Budget -
Actual Positive
Original Final Amounts (Negative)
REVENUES
Use of money and property 1,600$ 1,600$ 247$ (1,353)$
Charges for services 48,000 48,000 48,752 752
Total Revenues 49,600 49,600 48,999 (601)
EXPENDITURES
Current:
Public works 43,960 43,960 43,695 265
Excess (Deficiency) of Revenues
Over Expenditures 5,640 5,640 5,304 (336)
Fund Balance, Beginning of Year 32,052 32,052 32,052
Fund Balance, End of Year
37,692
$
37,692
$
37,356
$
(336)
$
Budgeted Amounts
59
CITY OF RANCHO PALOS VERDES
SCHEDULE OF REVENUES, EXPENDITURES
AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL
COMMUNITY DEVELOPMENT BLOCK GRANT SPECIAL REVENUE FUND
FOR THE YEAR ENDED JUNE 30, 2003
Variance with
Final Budget -
Actual Positive
Original Final Amounts (Negative)
REVENUES
Revenue from other agencies 260,000$ 260,000$ 183,213$ (76,787)$
EXPENDITURES
Current:
Public works 185,800 46,680 138,545 (91,865)
Capital outlay 34,200 290,659 290,659
Total Expenditures 220,000 337,339 138,545 198,794
Excess (Deficiency) of Revenues
Over Expenditures 40,000 (77,339) 44,668 122,007
OTHER FINANCING SOURCES (USES)
Transfers out (40,000) (40,000) (38,652) 1,348
Net Change in Fund Balances (117,339) 6,016 123,355
Fund Balance, Beginning of Year (436) (436) (436)
Fund Balance, End of Year
(436)
$
(117,775)
$
5,580
$
123,355
$
Budgeted Amounts
60
CITY OF RANCHO PALOS VERDES
SCHEDULE OF REVENUES, EXPENDITURES
AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL
EL PRADO SPECIAL REVENUE FUND
FOR THE YEAR ENDED JUNE 30, 2003
Variance with
Final Budget -
Actual Positive
Original Final Amounts (Negative)
REVENUES
Taxes 1,000$ 1,000$ 1,235$ 235$
Use of money and property 390 390 208 (182)
Total Revenues 1,390 1,390 1,443 53
EXPENDITURES
Current:
Public works 900 900 181 719
Excess of Revenues
Over Expenditures 490 490 1,262 772
Fund Balance, Beginning of Year 9,576 9,576 9,576
Fund Balance, End of Year
10,066
$
10,066
$
10,838
$
772
$
Budgeted Amounts
61
CITY OF RANCHO PALOS VERDES
SCHEDULE OF REVENUES, EXPENDITURES
AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL
RDA HOUSING SET-ASIDE SPECIAL REVENUE FUND
FOR THE YEAR ENDED JUNE 30, 2003
Variance with
Final Budget -
Actual Positive
Original Final Amounts (Negative)
REVENUES
Taxes 115,000$ 115,000$ 139,973$ 24,973$
Use of money and property 18,000 18,000 15,923 (2,077)
Total Revenues 133,000 133,000 155,896 22,896
EXPENDITURES
Current:
Public works 50,000 50,000 79 49,921
Excess of Revenues
Over Expenditures 83,000 83,000 155,817 72,817
Fund Balance, Beginning of Year 1,332,775 1,332,775 1,332,775
Fund Balance, End of Year
1,415,775
$
1,415,775
$
1,488,592
$
72,817
$
Budgeted Amounts
62
CITY OF RANCHO PALOS VERDES
SCHEDULE OF REVENUES, EXPENDITURES
AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL
PROPOSITION A SPECIAL REVENUE FUND
FOR THE YEAR ENDED JUNE 30, 2003
Variance with
Final Budget -
Actual Positive
Original Final Amounts (Negative)
REVENUES
Taxes 583,500$ 583,500$ 558,342$ (25,158)$
Use of money and property 9,800 9,800 6,242 (3,558)
Total Revenues 593,300 593,300 564,584 (28,716)
EXPENDITURES
Current:
Public works 486,843 486,843 424,877 61,966
Capital outlay 12,000
Total Expenditures 498,843 486,843 424,877 61,966
Excess of Revenues
Over Expenditures 94,457 106,457 139,707 33,250
Fund Balance, Beginning of Year 276,538 276,538 276,538
Fund Balance, End of Year
370,995
$
382,995
$
416,245
$
33,250
$
Budgeted Amounts
63
CITY OF RANCHO PALOS VERDES
SCHEDULE OF REVENUES, EXPENDITURES
AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL
PROPOSITION C SPECIAL REVENUE FUND
FOR THE YEAR ENDED JUNE 30, 2003
Variance with
Final Budget -
Actual Positive
Original Final Amounts (Negative)
REVENUES
Taxes 485,000$ 485,000$ 463,039$ (21,961)$
Use of money and property 6,000 6,000 12,367 6,367
Revenue from other agencies 46,146
Total Revenues 491,000 491,000 521,552 (15,594)
EXPENDITURES
Current:
Public works 3,170 3,170 1,776 1,394
Excess (Deficiency) of Revenues
Over Expenditures 487,830 487,830 519,776 (14,200)
OTHER FINANCING SOURCES (USES)
Transfers out (131,115) (518,960) (471,338) 47,622
Net Change in Fund Balances 356,715 (31,130) 48,438 79,568
Fund Balance, Beginning of Year 295,497 295,497 295,497
Fund Balance, End of Year
652,212
$
264,367
$
343,935
$
79,568
$
Budgeted Amounts
64
CITY OF RANCHO PALOS VERDES
SCHEDULE OF REVENUES, EXPENDITURES
AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL
RECYCLING SPECIAL REVENUE FUND
FOR THE YEAR ENDED JUNE 30, 2003
Variance with
Final Budget -
Actual Positive
Original Final Amounts (Negative)
REVENUES
Use of money and property 20,000$ 20,000$ 13,662$ (6,338)$
Revenue from other agencies 44,500 44,500 11,915 (32,585)
Other revenues 200,000 200,000 267,781 67,781
Total Revenues 264,500 264,500 293,358 28,858
EXPENDITURES
Current:
Public works 143,640 213,986 215,357 (1,371)
Excess (Deficiency) of Revenues
Over Expenditures 120,860 50,514 78,001 27,487
OTHER FINANCING SOURCES (USES)
Transfers out (112,000) (112,000) (112,000)
Net Change in Fund Balances 8,860 (61,486) (33,999) 27,487
Fund Balance, Beginning of Year 666,643 666,643 666,643
Fund Balance, End of Year
675,503
$
605,157
$
632,644
$
27,487
$
Budgeted Amounts
65
CITY OF RANCHO PALOS VERDES
SCHEDULE OF REVENUES, EXPENDITURES
AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL
SOLID WASTE SPECIAL REVENUE FUND
FOR THE YEAR ENDED JUNE 30, 2003
Variance with
Final Budget -
Actual Positive
Original Final Amounts (Negative)
REVENUES
Use of money and property 22,000$ 22,000$ 15,671$ (6,329)$
Charges for services 74,100 74,100 79,811 5,711
Revenue from other agencies 15,000 15,000 15,474 474
Total Revenues 111,100 111,100 110,956 (144)
EXPENDITURES
Current:
Public works 107,440 116,640 100,885 15,755
Excess (Deficiency) of Revenues
Over Expenditures 3,660 (5,540) 10,071 15,611
OTHER FINANCING SOURCES (USES)
Transfers out (112,216) (112,216)
Net Change in Fund Balances 3,660 (117,756) (102,145) 15,611
Fund Balance, Beginning of Year 757,603 757,603 757,603
Fund Balance, End of Year
761,263
$
639,847
$
655,458
$
15,611
$
Budgeted Amounts
66
CITY OF RANCHO PALOS VERDES
SCHEDULE OF REVENUES, EXPENDITURES
AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL
LLESS/COPS/CLEEP SPECIAL REVENUE FUND
FOR THE YEAR ENDED JUNE 30, 2003
Variance with
Final Budget -
Actual Positive
Original Final Amounts (Negative)
REVENUES
Use of money and property 3,800$ 3,800$ 2,927$ (873)$
Revenue from other agencies 100,000 100,000 137,858 37,858
Total Revenues 103,800 103,800 140,785 36,985
EXPENDITURES
Current:
Public safety 284,465 273,465 259,932 13,533
Excess (Deficiency) of Revenues
Over Expenditures (180,665) (169,665) (119,147) 50,518
OTHER FINANCING SOURCES (USES)
Transfers in 5,000 5,000 26,221
Net Change in Fund Balances (175,665) (164,665) (92,926) 71,739
Fund Balance, Beginning of Year 160,299 160,299 160,299
Fund Balance, End of Year
(15,366)
$
(4,366)
$
67,373
$
71,739
$
Budgeted Amounts
67
CITY OF RANCHO PALOS VERDES
SCHEDULE OF REVENUES, EXPENDITURES
AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL
1972 ACT SPECIAL REVENUE FUND
FOR THE YEAR ENDED JUNE 30, 2003
Variance with
Final Budget -
Actual Positive
Original Final Amounts (Negative)
REVENUES
Taxes 324,970$ 324,970$ 332,806$ 7,836$
Use of money and property 6,450 6,450 5,167 (1,283)
Total Revenues 331,420 331,420 337,973 6,553
EXPENDITURES
Current:
Public works 59,100 59,100 53,754 5,346
Excess of Revenues
Over Expenditures 272,320 272,320 284,219 11,899
OTHER FINANCING SOURCES (USES)
Transfers out (270,000) (270,000) (270,000)
Net Change in Fund Balances 2,320 2,320 14,219 11,899
Fund Balance, Beginning of Year 234,636 234,636 234,636
Fund Balance, End of Year
236,956
$
236,956
$
248,855
$
11,899
$
Budgeted Amounts
68
CITY OF RANCHO PALOS VERDES
SCHEDULE OF REVENUES, EXPENDITURES
AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL
1911 ACT SPECIAL REVENUE FUND
FOR THE YEAR ENDED JUNE 30, 2003
Variance with
Final Budget -
Actual Positive
Original Final Amounts (Negative)
REVENUES
Taxes 295,000$ 295,000$ 343,330$ 48,330$
Use of money and property 27,500 27,500 20,604 (6,896)
Total Revenues 322,500 322,500 363,934 41,434
EXPENDITURES
Current:
Public works 350,200 350,200 328,171 22,029
Excess (Deficiency) of Revenues
Over Expenditures (27,700) (27,700) 35,763 63,463
Fund Balance, Beginning of Year 990,891 990,891 990,891
Fund Balance, End of Year
963,191
$
963,191
$
1,026,654
$
63,463
$
Budgeted Amounts
69
CITY OF RANCHO PALOS VERDES
SCHEDULE OF REVENUES, EXPENDITURES
AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL
JPIA - PORTUGUESE BEND SPECIAL REVENUE FUND
FOR THE YEAR ENDED JUNE 30, 2003
Variance with
Final Budget -
Actual Positive
Original Final Amounts (Negative)
REVENUES
Use of money and property 6,000$ 6,000$ 5,169$ (831)$
EXPENDITURES
Current:
Maintenance 99,100 99,100 33,460 65,640
Excess (Deficiency) of Revenues
Over Expenditures (93,100) (93,100) (28,291) 64,809
OTHER FINANCING SOURCES (USES)
Transfers in 95,000 95,000 95,000
Net Change in Fund Balances 1,900 1,900 66,709 64,809
Fund Balance, Beginning of Year 177,963 177,963 177,963
Fund Balance, End of Year
179,863
$
179,863
$
244,672
$
64,809
$
Budgeted Amounts
70
CITY OF RANCHO PALOS VERDES
SCHEDULE OF REVENUES, EXPENDITURES
AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL
HABITAT RESTORATION SPECIAL REVENUE FUND
FOR THE YEAR ENDED JUNE 30, 2003
Variance with
Final Budget -
Actual Positive
Original Final Amounts (Negative)
REVENUES
Use of money and property 4,600$ 4,600$ 5,001$ 401$
EXPENDITURES
Capital outlay 7,500
Excess (Deficiency) of Revenues
Over Expenditures (2,900) 4,600 5,001 401
Fund Balance, Beginning of Year 239,141 239,141 239,141
Fund Balance, End of Year
236,241
$
243,741
$
244,142
$
401
$
Budgeted Amounts
71
CITY OF RANCHO PALOS VERDES
SCHEDULE OF REVENUES, EXPENDITURES
AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL
SUBREGION ONE MAINTENANCE SPECIAL REVENUE FUND
FOR THE YEAR ENDED JUNE 30, 2003
Variance with
Final Budget -
Actual Positive
Original Final Amounts (Negative)
REVENUES
Use of money and property 24,200$ 24,200$ 17,217$ (6,983)$
EXPENDITURES
Current:
Public works 39,500 39,500 17,400 22,100
Excess (Deficiency) of Revenues
Over Expenditures (15,300) (15,300) (183) 15,117
Fund Balance, Beginning of Year 830,043 830,043 830,043
Fund Balance, End of Year 814,743$ 814,743$ 829,860$ 15,117$
Budgeted Amounts
72
CITY OF RANCHO PALOS VERDES
STATEMENT OF REVENUES, EXPENDITURES
AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL
MEASURE A SPECIAL REVENUE FUND
FOR THE YEAR ENDED JUNE 30, 2003
Variance with
Final Budget -
Actual Positive
Original Final Amounts (Negative)
REVENUES
Use of money and property 1,418$ 1,418$
Revenue from other agencies 65,000$ 65,000$ 62,387 (2,613)
Other revenues 8,494
Total Revenues 65,000 65,000 72,299 (1,195)
Excess (Deficiency) of Revenues
Over Expenditures 65,000 65,000 72,299 (1,195)
OTHER FINANCING SOURCES (USES)
Transfers out (59,510) (59,510) (59,510)
Total Other Financing Sources (Uses) (59,510) (59,510) (59,510)
Net Change in Fund Balances 5,490 5,490 12,789 7,299
Fund Balance, Beginning of Year 45,521 45,521 45,521
Fund Balance, End of Year
51,011
$
51,011
$
58,310
$
7,299
$
Budgeted Amounts
73
CITY OF RANCHO PALOS VERDES
SCHEDULE OF REVENUES, EXPENDITURES
AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL
ABALONE COVE SEWER ASSESSMENT DISTRICT SPECIAL REVENUE FUND
FOR THE YEAR ENDED JUNE 30, 2003
Variance with
Final Budget -
Actual Positive
Original Final Amounts (Negative)
REVENUES
Taxes 20,000$ 20,000$ 20,636$ 636$
Use of money and property 250 250 941 691
Total Revenues 20,250 20,250 21,577 1,327
EXPENDITURES
Current:
Public works 50,000 50,000 45,656 4,344
Capital outlay 19,306 23,902
Total Expenditures 50,000 69,306 69,558 4,344
Excess (Deficiency) of Revenues
Over Expenditures (29,750) (49,056) (47,981) 5,671
OTHER FINANCING SOURCES (USES)
Transfers in 35,000 35,000 35,000
Net Change in Fund Balances 5,250 (14,056) (12,981) 1,075
Fund Balance, Beginning of Year 46,773 46,773 46,773
Fund Balance, End of Year 52,023$ 32,717$ 33,792$ 1,075$
Budgeted Amounts
74
CITY OF RANCHO PALOS VERDES
SCHEDULE OF REVENUES, EXPENDITURES
AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL
BIKEWAYS CAPITAL PROJECTS FUND
FOR THE YEAR ENDED JUNE 30, 2003
Variance with
Final Budget -
Actual Positive
Original Final Amounts (Negative)
REVENUES
Use of money and property 338$ 338$
Revenue from other agencies 16,000$ 16,000$ 26,949 10,949
Total Revenues 16,000 16,000 27,287 11,287
OTHER FINANCING SOURCES (USES)
Transfers out (16,000) (25,483) (27,287) (1,804)
Net Change in Fund Balances (9,483) 9,483
Fund Balance, Beginning of Year
Fund Balance, End of Year
-
$
(9,483)
$
-
$
9,483
$
Budgeted Amounts
75
CITY OF RANCHO PALOS VERDES
SCHEDULE OF REVENUES, EXPENDITURES
AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL
RDA ABALONE COVE CAPITAL PROJECTS FUND
FOR THE YEAR ENDED JUNE 30, 2003
Variance with
Final Budget -
Actual Positive
Original Final Amounts (Negative)
REVENUES
Use of money and property -$ -$ 1,636$ 1,636$
EXPENDITURES
Current:
Public works 5,487 (5,487)
Capital outlay 65,578 20,582 44,996
Total Expenditures 65,578 26,069 39,509
Excess (Deficiency) of Revenues
Over Expenditures (65,578) (24,433) 41,145
OTHER FINANCING SOURCES (USES)
Advances to Redevelopment Agency 12,000
Net Change in Fund Balances (65,578) (12,433) 53,145
Fund Balance, Beginning of Year 65,578 65,578 65,578
Fund Balance, End of Year
65,578
$
-
$
53,145
$
53,145
$
Budgeted Amounts
76
CITY OF RANCHO PALOS VERDES
SCHEDULE OF REVENUES, EXPENDITURES
AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL
ENVIRONMENTAL EXCISE TAX CAPITAL PROJECTS FUND
FOR THE YEAR ENDED JUNE 30, 2003
Variance with
Final Budget -
Actual Positive
Original Final Amounts (Negative)
REVENUES
Use of money and property 10,100$ 10,100$ 14,485$ 4,385$
Other revenues 85,000 85,000 108,242 23,242
Total Revenues 95,100 95,100 122,727 27,627
Fund Balance, Beginning of Year 663,080 663,080 663,080
Fund Balance, End of Year
758,180
$
758,180
$
785,807
$
27,627
$
Budgeted Amounts
77
CITY OF RANCHO PALOS VERDES
SCHEDULE OF REVENUES, EXPENDITURES
AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL
QUIMBY CAPITAL PROJECTS FUND
FOR THE YEAR ENDED JUNE 30, 2003
Variance with
Final Budget -
Actual Positive
Original Final Amounts (Negative)
REVENUES
Use of money and property 4,900$ 4,900$ 8,340$ 3,440$
Revenue from other agencies 50,000 50,000
Total Revenues 29,900 79,900 58,340 (21,560)
EXPENDITURES
Current:
Public works 6,000 15,500 20,584 (5,084)
Capital outlay 50,000 298,655 291,518 7,137
Total Expenditures 56,000 314,155 312,102 2,053
Excess (Deficiency) of Revenues
Over Expenditures (26,100) (234,255) (253,762) (23,613)
OTHER FINANCING SOURCES (USES)
Transfers in 107,330 107,330
Net Change in Fund Balances (26,100) (126,925) (146,432) (19,507)
Fund Balance, Beginning of Year 483,793 483,793 483,793
Fund Balance, End of Year
457,693
$
356,868
$
337,361
$
(19,507)
$
Budgeted Amounts
78
CITY OF RANCHO PALOS VERDES
SCHEDULE OF REVENUES, EXPENDITURES
AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL
AFFORDABLE HOUSING CAPITAL PROJECTS FUND
FOR THE YEAR ENDED JUNE 30, 2003
Variance with
Final Budget -
Actual Positive
Original Final Amounts (Negative)
REVENUES
Use of money and property 52,300$ 52,300$ 20,524$ (31,776)$
Fund Balance, Beginning of Year 981,045 981,045 981,045
Fund Balance, End of Year
1,033,345
$
1,033,345
$
1,001,569
$
(31,776)
$
Budgeted Amounts
79
CITY OF RANCHO PALOS VERDES
SCHEDULE OF REVENUES, EXPENDITURES
AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL
RDA PORTUGUESE BEND CAPITAL PROJECTS FUND
FOR THE YEAR ENDED JUNE 30, 2003
Variance with
Final Budget -
Actual Positive
Original Final Amounts (Negative)
REVENUES
Use of money and property 5,000$ 5,000$ 10,376$ 5,376$
Revenue from other agencies 45,836 45,836
Other revenues 10,500 10,500 (10,500)
Total Revenues 15,500 15,500 56,212 40,712
EXPENDITURES
Current:
Public works 120,010 120,010 27,821 92,189
Capital outlay 40,000 40,000 40,000
Total Expenditures 160,010 160,010 27,821 132,189
Excess (Deficiency) of Revenues
Over Expenditures (144,510) (144,510) 28,391 172,901
Fund Balance, Beginning of Year 429,825 429,825 429,825
Fund Balance, End of Year
285,315
$
285,315
$
458,216
$
172,901
$
Budgeted Amounts
80
CITY OF RANCHO PALOS VERDES
SCHEDULE OF REVENUES, EXPENDITURES
AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL
UTILITY UNDERGROUNDING CAPITAL PROJECTS FUND
FOR THE YEAR ENDED JUNE 30, 2003
Variance with
Final Budget -
Actual Positive
Original Final Amounts (Negative)
REVENUES
Use of money and property 6,000$ 6,000$ 4,777$ (1,223)$
EXPENDITURES
Current:
Public works 20,000 20,000 20,000
Excess (Deficiency) of Revenues
Over Expenditures (14,000) (14,000) 4,777 18,777
Fund Balance, Beginning of Year 228,409 228,409 228,409
Fund Balance, End of Year
214,409
$
214,409
$
233,186
$
18,777
$
Budgeted Amounts
81
CITY OF RANCHO PALOS VERDES
SCHEDULE OF REVENUES, EXPENDITURES
AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL
ROADWAY BEAUTIFICATION CAPITAL PROJECTS FUND
FOR THE YEAR ENDED JUNE 30, 2003
Variance with
Final Budget -
Actual Positive
Original Final Amounts (Negative)
REVENUES
Use of money and property 6,000$ 6,000$ 6,927$ 927$
EXPENDITURES
Current:
Public works 15,000 15,000 15,000
Capital outlay 85,000 85,000 85,000
Total Expenditures 100,000 100,000 100,000
Excess (Deficiency) of Revenues
Over Expenditures (94,000) (94,000) 6,927 100,927
OTHER FINANCING SOURCES (USES)
Transfers in 100,000 100,000 100,000
Net Change in Fund Balances 6,000 6,000 106,927 100,927
Fund Balance, Beginning of Year 299,204 299,204 299,204
Fund Balance, End of Year
305,204
$
305,204
$
406,131
$
100,927
$
Budgeted Amounts
82
CITY OF RANCHO PALOS VERDES
SCHEDULE OF REVENUES, EXPENDITURES
AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL
JPIA - ABALONE COVE PERMANENT FUND
FOR THE YEAR ENDED JUNE 30, 2003
Variance with
Final Budget -
Actual Positive
Original Final Amounts (Negative)
REVENUES
Use of money and property 41,000$ 41,000$ 34,841$ (6,159)$
EXPENDITURES
Current:
Public works 109,700 109,700 17,735 91,965
Excess (Deficiency) of Revenues
Over Expenditures (68,700) (68,700) 17,106 85,806
Fund Balance, Beginning of Year 1,442,948 1,442,948 1,442,948
Fund Balance, End of Year
1,374,248
$
1,374,248
$
1,460,054
$
85,806
$
Budgeted Amounts
83
CITY OF RANCHO PALOS VERDES
JUNE 30, 2003
INTERNAL SERVICE FUNDS DESCRIPTIONS
The Internal Service Funds are used to finance and account for goods and services provided by one
City department to other City departments on a cost-reimbursement basis, including depreciation.
Equipment Replacement – to account for purchases, replacement and maintenance of certain
equipment items on behalf of all City departments.
Building Replacement – to account for the accumulation of funds transferred from the General Fund for
replacement of certain buildings on behalf of the City.
Employee Benefits – to account for employee benefit costs on behalf of all City departments.
84
CITY OF RANCHO PALOS VERDES
INTERNAL SERVICE FUNDS
COMBINING STATEMENT OF NET ASSETS
JUNE 30, 2003
Equipment Building Employee
Replacement Replacement Benefits Totals
ASSETS
Current Assets
Cash and cash equivalents 2,298,869$ 1,545,578$ 44,154$ 3,888,601$
Receivables
Interest 9,634 6,186 561 16,381
Prepaid items 82,202 82,202
Total Current Assets 2,308,503 1,551,764 126,917 3,987,184
Noncurrent Assets
Capital assets
Property and equipment 814,068 814,068
Accumulated depreciation (491,349) (491,349)
Total Assets 2,631,222 1,551,764 126,917 4,309,903
LIABILITIES
Current Liabilities
Accounts payable and accrued liabilities 16,888 855 337 18,080
Total Liabilities 16,888 855 337 18,080
NET ASSETS
Invested in capital assets 322,719 322,719
Unrestricted 2,291,615 1,550,909 126,580 3,969,104
Total Net Assets
2,614,334
$
1,550,909
$
126,580
$
4,291,823
$
85
CITY OF RANCHO PALOS VERDES
INTERNAL SERVICE FUNDS
COMBINING STATEMENT OF REVENUES, EXPENSES,
AND CHANGES IN FUND NET ASSETS
FOR THE YEAR ENDED JUNE 30, 2003
Equipment Building Employee
Replacement Replacement Benefits Totals
OPERATING REVENUES
Charges for services 475,535$ 609,570$ 1,085,105$
Total Operating Revenues 475,535 609,570 1,085,105
OPERATING EXPENSES
Personnel services 577,030 577,030
Material and supplies 150,914 121,915$ 272,829
Maintenance 54,988 4,600 59,588
Depreciation 91,856 91,856
Total Operating Expenses 297,758 126,515 577,030 1,001,303
Operating Income (Loss) 177,777 (126,515) 32,540 83,802
NONOPERATING REVENUES
Interest income 46,263 31,230 2,154 79,647
Gain (Loss) on Asset Disposal (13,403) (13,403)
Total Operating Expenses 32,860 31,230 2,154 66,244
Income (Loss) Before
Transfers 210,637 (95,285) 34,694 150,046
TRANSFERS IN 52,516 105,000 157,516
Change in Net Assets 263,153 9,715 34,694 307,562
Net Assets, Beginning of Year 2,351,181 1,541,194 91,886 3,984,261
Net Assets, Ending of Year
2,614,334
$
1,550,909
$
126,580
$
4,291,823
$
86
CITY OF RANCHO PALOS VERDES
INTERNAL SERVICE FUNDS
COMBINING STATEMENT OF CASH FLOWS
FOR THE FISCAL YEAR ENDED JUNE 30, 2003
Equipment Building Employee
Replacement Replacement Benefits Totals
CASH FLOWS FROM OPERATING ACTIVITIES
Receipts from customers 475,535$ 609,570$ 1,085,105$
Payments to suppliers (231,927) (125,660)$ (614,941) (972,528)
NET CASH PROVIDED (USED) BY
OPERATING ACTIVITIES 243,608 (125,660) (5,371) 112,577
CASH FLOWS FROM CAPITAL AND
RELATED FINANCING ACTIVITIES
Acquisition of capital assets (253,256) (253,256)
CASH FLOWS FROM NONCAPITAL
FINANCING ACTIVITIES
Operating transfer in 52,516 105,000 157,516
CASH FLOWS FROM INVESTING ACTIVITIES
Interest received on investments 51,080 35,139 2,254 88,473
NET INCREASE (DECREASE) IN
CASH AND CASH EQUIVALENTS 93,948 14,479 (3,117) 105,310
CASH AND CASH EQUIVALENTS, Beginning of Year 2,204,921 1,531,099 47,271 3,783,291
CASH AND CASH EQUIVALENTS, End of Year
2,298,869
$
1,545,578
$
44,154
$
3,888,601
$
RECONCILIATION OF OPERATING INCOME (LOSS)
TO NET CASH PROVIDED (USED) BY OPERATING
ACTIVITIES
Operating income (loss) 177,777$ (126,515)$ 32,540$ 83,802$
Adjustments to reconcile operating income (loss) to
net cash provided (used) by operating activities:
Depreciation 91,856 91,856
(Increase) decrease in other receivables 1,465 1,465
(Increase) decrease in prepaid items 194 (33,358) (33,164)
Increase (decrease) in accounts payable
and accrued liabilities (26,219) 855 (6,018) (31,382)
NET CASH PROVIDED (USED) BY
OPERATING ACTIVITIES
243,608
$
(125,660)
$
(5,371)
$
112,577
$
87
STATISTICAL SECTION
CITY OF RANCHO PALOS VERDES Table 1
Planning,
Code
Fiscal General Public Public Parks and Enforcement Capital Debt
Year Government Safety Works Recreation & Building Outlay Service Totals
1994 $ 1,388,019 $ 2,437,018 $ 2,891,418 $ 475,036 $ 937,581 $ 1,563,682 --- $9,692,754
1995 1,497,317 2,539,329 3,166,876 489,834 1,031,028 1,623,833 --- 10,348,217
1996 1,545,955 2,609,804 3,638,583 543,602 1,148,340 1,129,275 --- 10,615,559
1997 1,588,565 2,637,280 3,856,324 550,722 1,360,468 8,885,989 --- 18,879,348
1998 1,659,753 2,533,309 4,079,842 710,477 1,558,511 3,974,928 --- 14,516,820
1999 1,679,549 2,658,145 3,942,290 633,292 1,882,051 3,116,632 --- 13,911,959
2000 1,836,468 2,662,096 5,864,072 597,045 1,646,824 2,110,309 --- 14,716,814
2001 2,388,727 2,732,579 3,616,253 596,185 1,778,319 4,227,852 --- 15,339,915
2002 2,939,097 2,898,265 3,855,747 668,938 1,950,504 9,441,273 --- 21,753,825
2003 3,084,614 3,094,005 4,306,768 785,786 2,194,265 4,767,678 --- 18,233,116
* Includes all governmental fund types, excluding activity of the Redevelopment Agency and Improvement Authority.
GENERAL GOVERNMENTAL EXPENDITURES BY FUNCTION*
LAST TEN FISCAL YEARS
Source: City Finance Department
88
CITY OF RANCHO PALOS VERDES Table 2
Fees Use of Charges Revenues
Fiscal and Fines and Money and for From Other Other
Year Taxes Permits Forfeitures Property Services Agencies Revenues Totals
1994 $ 6,201,116 $ 676,872 $ 98,067 $ 675,856 $ 317,668 $ 3,299,943 $ 151,528 $11,421,050
1995 7,310,905 825,680 89,494 819,185 285,235 2,754,149 326,863 12,411,511
1996 8,321,970 689,077 85,790 960,071 297,124 2,558,842 359,737 13,272,611
1997 8,432,900 798,168 93,076 1,145,664 336,634 10,673,669 513,625 21,993,736
1998 8,449,951 890,269 114,409 1,239,537 175,418 4,899,646 640,609 16,409,839
1999 8,539,047 1,292,498 140,089 1,177,539 217,699 4,340,676 518,009 16,225,557
2000 9,022,637 1,089,720 156,730 1,314,901 203,691 3,654,695 1,875,671 17,318,045
2001 9,391,699 1,530,425 139,694 1,602,638 196,730 4,816,266 866,621 18,544,073
2002 9,723,259 1,589,701 116,598 987,793 217,387 8,170,513 513,512 21,318,763
2003 10,002,224 1,855,746 115,448 735,526 204,798 4,223,490 554,035 17,691,267
* Includes all governmental fund types, excluding activity of the Redevelopment Agency and Improvement Authority.
LAST TEN FISCAL YEARS
GENERAL GOVERNMENTAL REVENUES BY SOURCE *
Source: City Finance Department
89
CITY OF RANCHO PALOS VERDES Table 3
Fiscal Current Current Percent
Year Levy Collection Collected
1993-1994 $ 1,730,785 $ 1,658,420 95.82%
1994-1995 2,218,369 2,147,249 96.79%
1995-1996 2,700,133 2,571,526 95.24%
1996-1997 2,708,114 2,651,513 97.91%
1997-1998 2,731,834 2,664,833 97.55%
1998-1999 2,877,987 2,770,246 96.26%
1999-2000 3,123,218 3,048,626 97.61%
2000-2001 3,352,310 3,233,833 96.47%
2001-2002 3,567,276 3,451,599 96.76%
2002-2003 3,768,471 3,688,465 97.88%
PROPERTY TAX LEVIES AND COLLECTIONS
LAST TEN FISCAL YEARS
Source: City Public Works and Finance Departments
90
CITY OF RANCHO PALOS VERDES Table 4
Net
Fiscal Secured Public Unsecured Homeowners Assessed Percent
Year Value Utility Value Subtotal Exemption Value Increase
1994 $ 4,142,760,058 $ 210,000 $ 12,641,931 $ 4,155,611,989 $ 77,423,929 $ 4,078,188,060 0.70%
1995 4,277,717,064 210,000 12,448,590 4,290,375,654 79,193,508 4,211,182,146 3.26%
1996 4,316,092,536 210,000 15,334,559 4,331,637,095 79,614,908 4,252,022,187 0.97%
1997 4,354,282,854 210,000 14,956,195 4,369,449,049 79,417,508 4,290,031,541 0.89%
1998 4,414,137,301 975,785 14,526,105 4,429,639,191 79,074,508 4,350,564,683 1.41%
1999 4,666,924,997 975,785 22,058,574 4,689,959,356 78,654,508 4,611,304,848 5.99%
2000 5,121,424,832 975,785 16,961,594 5,139,362,211 78,055,228 5,061,306,983 9.76%
2001 5,420,734,560 1,023,567 18,422,700 5,440,180,827 77,799,028 5,362,381,799 5.95%
2002 5,758,506,586 947,258 19,641,491 5,779,095,335 77,157,828 5,701,937,507 6.33%
2003 6,069,010,412 449,498 21,740,910 6,091,200,820 76,980,028 6,014,220,792 5.48%
LAST TEN FISCAL YEARS
ASSESSED VALUE OF TAXABLE PROPERTY
Source: HdL Companies
91
CITY OF RANCHO PALOS VERDES Table 5
Basic Metropolitan
Fiscal County School Flood Water Library
Year Levy District Control District District County Totals
1994 1.0000% 0.0004% 0.0042% 0.0089% 0.0140% 0.0017% 1.0292%
1995 1.0000% --- 0.0060% 0.0089% 0.0042% 0.0020% 1.0211%
1996 1.0000% --- 0.0010% 0.0089% 0.0150% 0.0018% 1.0267%
1997 1.0000% --- 0.0020% 0.0089% 0.0150% 0.0016% 1.0275%
1998 1.0000% --- 0.0022% 0.0089% 0.0148% 0.0016% 1.0275%
1999 1.0000% --- 0.0020% 0.0089% 0.0114% 0.0015% 1.0237%
2000 1.0000% --- 0.0018% 0.0089% 0.0113% 0.0014% 1.0234%
2001 1.0000% --- 0.0016% 0.0088% 0.0114% 0.0013% 1.0230%
2002 1.0000% --- 0.0005% 0.0077% 0.0096% 0.0011% 1.0189%
2003 1.0000% --- 0.0009% 0.0067% 0.0097% 0.0010% 1.0183%
Note: The state constitutional amendment Proposition 13 provided that the tax rate be limited to 1% of assessed value, levied only by the County and
shared with all other jurisdictions. All other jurisdictions and the County can levy a tax rate for voter approved debt.
PROPERTY TAX RATES - ALL OVERLAPPING GOVERNMENTS
(PER $100 OF ASSESSED VALUATION)
LAST TEN FISCAL YEARS
Source: HdL Companies
92
CITY OF RANCHO PALOS VERDES Table 6
2002 Percentage of
Type of Assessed Total Assessed
Taxpayer Business Valuation Valuation
Ocean Trails Limited Partnership Golf Course/Residential $ 62,320,260 1.04%
P.V. Victoria Apartments Apartments 40,814,540 0.68%
RPV Associates Residential Development 31,115,443 0.52%
VRPV LLC, Et. Al. Kennedy Palos Verdes Apartments 26,896,304 0.45%
Western Riviera Investors Apartments 24,853,212 0.41%
York Long Point Associates Commercial/Residential 22,010,505 0.37%
American Golf, Inc. Golf Course 13,873,318 0.23%
Theodore Gardner II Apartments 13,528,404 0.22%
Salvation Army Institutional/Commercial 13,456,653 0.22%
Top Terraces Inc. Commercial/Retail 12,444,000 0.21%
TOTAL TOP TEN $ 261,312,639 4.35%
PRINCIPAL TAXPAYERS
JUNE 30, 2003
Source: HdL Companies
93
CITY OF RANCHO PALOS VERDES Table 7
Special Special Percent of
Fiscal Assessment Assessments Levy
Year Billings Collected Collected
1994 $ 816,170 $ 816,339 100.0%
1995 811,651 796,924 98.2%
1996 809,208 788,919 97.5%
1997 756,438 741,261 98.0%
1998 374,483 368,652 98.4%
1999 325,130 333,455 102.6%
2000 326,425 327,423 100.3%
2001 326,396 325,337 99.7%
2002 327,460 324,016 98.9%
2003 327,384 332,806 101.7%
SPECIAL ASSESSMENT BILLINGS AND COLLECTIONS
LAST TEN FISCAL YEARS
Source: City Public Works and Finance Departments
94
CITY OF RANCHO PALOS VERDES Table 8
Net Assessed Value $ 6,014,220,792
Debt limit - 15% of assessed value $ 902,133,119
Amount of debt applicable to debt limit ---
Legal debt margin $ 902,133,119
Note: Section 43605 of the Government Code of the State of California limits the amount of indebtedness for
public improvements to 15% of the assessed valuation of all real personal property in the City.
The City of Rancho Palos Verdes has no general bonded indebtedness.
AS OF JUNE 30, 2003
COMPUTATION OF LEGAL DEBT MARGIN
Source: City Finance Department
95
CITY OF RANCHO PALOS VERDES Table 9
Percent Bonded Debt
Applicable June 30, 2003
DIRECT AND OVERLAPPING BONDED DEBT:
Los Angeles County Detention Facilities 1987 1.014% $ 306,450
Los Angeles County Flood Control Storm Drain Bonds No. 4 0.937% 94,735
Los Angeles County Flood Control Refunding Bonds 1993 0.937% 7,918
Palos Verdes Library District Refunding Bonds 1998 49.501% 6,222,238
West Basin Metropolitan Water District * 1.057% 5,024,555
Los Angeles City Community College 2003 Series A 1.798% 1,761,036
Los Angeles City Community College 2003 Series B & C 1.798% 1,648,774
Los Angeles City Community College 2001 Series A 1.798% 9,114,458
Los Angeles Unified School District 2002 Refunding Bonds 0.217% 551,761
Los Angeles Unified School District 2002 Series A 0.217% 1,101,731
Los Angeles Unified School District 1997 Series A 0.217% 686,637
Los Angeles Unified School District 1997 Series B 0.217% 489,025
Los Angeles Unified School District 1997 Series C 0.217% 450,881
Los Angeles Unified School District 1997 Series D 0.217% 578,124
Los Angeles Unified School District 1997 Series E 0.217% 1,059,320
Los Angeles Unified School District 1997 Series F 0.217% 4,560,278
Palos Verdes Peninsula USD Series 2000 A 46.923% 9,138,290
Palos Verdes Peninsula USD Series 2000 B 46.923% 7,047,908
Palos Verdes Peninsula USD Series 2000 C 46.923% 4,892,850
TOTAL DIRECT AND OVERLAPPING BONDED DEBT $ 54,736,969 (1)
(1) Excludes revenue, mortgage revenue, tax allocation bonds, interim financing obligations, non-bonded capital lease
obligations, and certificates of participation.
Debt to Assessed Valuation Ratios:
Direct Debt 0.00%
Overlapping Debt 0.92%
Total Debt 0.92%
* This debt is a portion of a larger agency, which is responsible for debt in areas outside the City.
AS OF JUNE 30, 2003
STATEMENT OF DIRECT AND OVERLAPPING DEBT
Source: HdL Companies
96
CITY OF RANCHO PALOS VERDES Table 10
Fiscal Housing
Year Population Units
1994 42,000 15,581
1995 42,089 15,588
1996 42,670 15,610
1997 43,155 15,623
1998 43,657 15,652
1999 44,345 15,683
2000 44,933 15,706
2001 41,145 15,753
2002 42,002 15,762
2003 42,322 15,772
DEMOGRAPHIC STATISTICS
LAST TEN FISCAL YEARS
Source: CA Department of Finance and the City Planning, Building and Code Enforcement Department
97
CITY OF RANCHO PALOS VERDES Table 11
Population distribution by ethnic group: Individuals Percent
White 27,660 67.23%
Asian 10,676 25.95%
Black or African American 815 1.98%
American Indian/Alaska Native 62 0.15%
Other 1,932 4.70%
Total 41,145 100.00%
Population distribution by age: Individuals Percent
0-9 years 4,732 11.50%
10-19 years 5,436 13.21%
20-34 years 4,067 9.88%
35-44 years 6,584 16.00%
45-54 years 6,789 16.50%
55-64 years 5,837 14.19%
65-74 years 4,574 11.12%
75+ years 3,126 7.60%
Total 41,145 100.00%
Household by type:
Household Number of
type: households Percent
Family - Married Couple 6,423 42.10%
Family - Married Couple with children under 18 4,375 28.68%
Family - Single Parent 830 5.44%
Family - Single Parent with children under 18 595 3.90%
Non Family 464 3.04%
Householder living alone 2,569 16.84%
Total 15,256 100.00%
Housing Tenure: Units Percent
Owner-occupied 12,456 81.65%
Renter-occupied 2,800 18.35%
Total 15,256 100.00%
DEMOGRAPHIC STATISTICS
2000 CENSUS DATA
Source: U.S. Bureau of the Census
98
CITY OF RANCHO PALOS VERDES Table 12
Total Construction New Residential Construction
Fiscal Number of Property Number of Property Bank
Year Permits Value Units Value Deposits
1994 1,158 $ 16,174,450 11 $ 4,589,000 $ 103,983,000
1995 1,269 24,004,600 25 10,805,000 113,023,000
1996 1,356 19,993,784 19 8,572,000 193,339,000
1997 1,389 20,897,000 23 9,766,000 139,282,000
1998 2,373 25,799,345 31 11,948,000 170,584,000
1999 3,129 65,373,000 96 43,200,000 198,802,000
2000 2,544 41,403,218 39 24,949,630 202,839,000
2001 2,468 22,685,411 9 4,677,000 207,807,000
2002 1,319 20,363,386 10 4,387,828 208,627,000
2003 1,405 37,526,472 16 9,931,300 * *
** Data regarding bank deposits within the City of Rancho Palos Verdes for the fiscal year ended June 30, 2002 is not currently
available.
BUILDING PERMITS AND PROPERTY VALUE
LAST TEN FISCAL YEARS
Source: City Planning, Building and Code Enforcement Department and State Banking Department
99
CITY OF RANCHO PALOS VERDES Table 13
Date of Incorporation September 7, 1973
Form of Government Council/Manager
Area 13.6 square miles
Coastline 7.5 miles
Contract Services:
Police Protection Los Angeles County Sheriff
Fire Protection Los Angeles County Fire Protection District
Sewers Los Angeles County Sanitation District #5
Utilities:
Water California Water Service Company
Gas Southern California Gas Company
Electricity Southern California Edison
Telephone Verizon, Pacific Bell
City Facilities:
Streets 143 miles
Parks 14 with 514 acres
Employees (Full-Time) 45
MISCELLANEOUS STATISTICS
AS OF JUNE 30, 2003
Source: City Finance Department
100
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