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CITY OF AZUSA, CALIFORNIA
COMPREHENSIVE ANNUAL FINANCIAL REPORT
FOR THE FISCAL YEAR ENDED JUNE 30, 2009
CITY OF AZUSA, CALIFORNIA
COMPREHENSIVE ANNUAL FINANCIAL REPORT
FOR THE FISCAL YEAR ENDED JUNE 30, 2009
PREPARED BY FINANCE DEPARTMENT
CITY OF AZUSA
COMPREHENSIVE ANNUAL FINANCIAL REPORT
FOR THE FISCAL YEAR ENDED JUNE 30, 2009
TABLE OF CONTENTS
INTRODUCTORY SECTION
Page
Number
Letterof Transmittal..........,......................................................................................................................i
OrganizationalChart ...............................................................................................................................v
Officials of the City of Azusa..................................................................................................................A
GFOA Certificate of Achievement for Excellence in Financial Reporting ............................................. vii
FINANCIAL SECTION
INDEPENDENT AUDITORS' REPORT............................................................................:.....................1
MANAGEMENT'S DISCUSSION AND ANALYSIS...........................................................
BASIC FINANCIAL STATEMENTS
Government -Wide Financial Statements:
Statement of Net Assets ................................
Statement of Activities
Fund Financial Statements
11103
........15
......................................................................................... ..16
Balance Sheet - Governmental Funds...........................................................................................18
Reconciliation of the Balance Sheet of Governmental Funds
to the Statement of Net Assets.......................................................................................................21
Statement of Revenues, Expenditures and Changes in Fund
Balances - Governmental Funds....................................................................................................22
Reconciliation of the Statement of Revenues, Expenditures and
Changes in Fund Balances of Governmental Funds to the Statement of Activities .......................24
Budgetary Comparison Statement - General Fund........................................................................25
Statement of Net Assets - Proprietary Funds.................................................................................26
Statement of Revenues, Expenses and Changes in Fund Net
Assets- Proprietary Funds.............................................................................................................27
Statement of Cash Flows - Proprietary Funds...............................................................................28
Statement of Fiduciary Net Assets - Fiduciary Funds....................................................................30
Notesto Financial Statements..........................................................................................................31
CITY OF AZUSA
COMPREHENSIVE ANNUAL FINANCIAL REPORT
FOR THE FISCAL YEAR ENDED JUNE 30, 2009
TABLE OF CONTENTS
Page
Number
COMBINING AND INDIVIDUAL FUND STATEMENTS AND SCHEDULES
Combining Balance Sheet - Nonmajor Governmental Funds...........................................................72
Combining Statement of Revenues, Expenditures and
Changes in Fund Balances - Nonmajor Governmental Funds.........................................................78
Budgetary Comparison Schedules - Special Revenue Funds:
StateGasoline Tax.........................................................................................................................84
PropositionA..................................................................................................................................85
PropositionC..................................................................................................................................86
Community Development Block Grant...........................................................................................87
SeniorNutrition ...............................................................................................................................88
PublicBenefit Program...................................................................................................................89
AirQuality Improvement.................................................................................................................90
Grantsand Seizure.........................................................................................................................91
Supplemental Law Enforcement....................................................................................................92
FireSafety ......................................................................................................................................93
MonroviaNursery ...........................................................................................................................94
EmployeeBenefits..........................................................................................................................95
UtilityMitigation..............................................................................................................................96
LACMTA.........................................................................................................................................97
Low and Moderate Income Housing..............................................................................................98
Budgetary Comparison Schedules - Capital Projects Funds
ParkIn-Lieu....................................................................................................................................99
CapitalProjects............................................................................................................................100
PublicWorks Endowment............................................................................................................101
RedevelopmentAgency...............................................................................................................102
Budgetary Comparison Schedules - Debt Service Fund:
PublicFinancing Authority............................................................................................................103
RedevelopmentAgency...............................................................................................................104
Combining Statement of Net Assets — Nonmajor Proprietary Funds..............................................106
Combining Statement of Revenues, Expenses and Changes in
Fund Net Assets — Nonmajor Proprietary Funds............................................................................107
Combining Statement of Cash Flows— Nonmajor Proprietary Funds............................................108
Combining Statement of Net Assets — Internal Service Funds.......................................................112
CITY OF AZUSA
COMPREHENSIVE ANNUAL FINANCIAL REPORT
FOR THE FISCAL YEAR ENDED JUNE 30, 2009
TABLE OF CONTENTS
Page
Number
COMBINING AND INDIVIDUAL FUND STATEMENTS AND SCHEDULES (CONTINUED)
Combining Statement of Revenues, Expenses and Changes in
Fund Net Assets — Internal Service Funds...................................................................................114
Combining Statement of Cash Flows — Internal Service Funds...................................................116
Combining Statement of Changes in Assets and Liabilities — Agency Fund...............................118
Supplemental Statement of Revenues, Expenses and Changes in
Net Assets — Water— Enterprise Fund.........................................................................................119
Supplemental Statement of Revenues, Expenses and Changes in
Net Assets — Light — Enterprise Fund...........................................................................................120
STATISTICAL SECTION
Table 1 — Net Assets by Component............................................................................................122
Table 2 — Change in Net Assets...................................................................................................123
Table 3 — Fund Balances of Governmental Funds.......................................................................125
Table 4 — Changes in Fund Balances of Governmental Funds...................................................126
Table 5 — Light Department, Electricity Sold by Type of Customer..............................................127
Table6 — Electricity Rates............................................................................................................128
Table 7 — Largest Electrical Customers..........................................................
129
Table 8 — Water Sold by Type of Customer.................................................................................130
Table9 — Water Rates..................................................................................................................131
Table 10 —Largest Water Customers..........................................................................................132
Table 11 —Assessed Value and Estimated Actual Value of Taxable Property ............................133
Table 12 — Direct and Overlapping Property Rates......................................................................134
Table 13 — Principal Property Tax Payers....................................................................................135
Table 14 — Property Tax Levies and Collections..........................................................................136
CITY OF AZUSA
COMPREHENSIVE ANNUAL FINANCIAL REPORT
FOR THE FISCAL YEAR ENDED JUNE 30, 2009
TABLE OF CONTENTS
Page
Number
STATISTICAL SECTION (CONTINUED)
Table 15 — Ratios of Outstanding Debt by Type..........................................................................137
Table 16 — Ratio of General Bonded Debt Outstanding...............................................................138
Table 17 — Direct and Overlapping Debt......................................................................................139
Table 18—Legal Debt Margin Information...................................................................................140
Table 19 — Pledged Revenue Coverage......................................................................................141
Table 20 — Pledged Revenue Coverage,
Tax Allocation Bonds — Redevelopment Agency.......................................................143
Table 21 — Demographic and Economic Statistics.......................................................................144
Table 22 — Principal Employers....................................................................................................145
Table 23 — Full-time and Part-time Employees by Function........................................................146
Table 24 — Operating Indicators by Function...............................................................................147
Table 25 — Capital Asset Statistics by Function...........................................................................148
Table 26 — Schedule of Credits....................................................................................................149
I
The Canyon City —Gateway to the American Dream
December 15, 2009
Honorable Mayor and Council Members
City of Azusa
213 E. Foothill Blvd.
Azusa, CA 91702
Honorable Mayor and Council Members:
Submitted for your.information and consideration is the Comprehensive Annual Financial Report
of the City of Azusa for the fiscal year ended June 30, 2008. Responsibility for both the accuracy
of the data and the completeness and fairness of the presentation, including all disclosures, rests
with City management. The data presented is believed to be accurate in all material aspects and
is designed to set forth fairly the financial position and the results of the City's operations as
measured by the financial activity of the various funds. All necessary disclosures are included to
enable the reader to understand fully the financial activities and operations of the City. The
financial statements are prepared in accordance with Generally Accepted Accounting Principles
(GAAP) as promulgated by the Governmental Accounting Standards Board (GASB) and include
the report of the City's independent Certified Public Accountants, Lance, Soil & Lunghard.
Management's discussion and analysis (MD&A) immediately follows the
independent auditor's report and provides a narrative introduction, overview, and
analysis of the basic financial statements. MD&A complement this letter of
transmittal and should be read in conjunction with it.
AUDIT REPORT
The City received an unqualified opinion from its independent auditors, Lance, Sol[ and
Lunghard, for the City's Comprehensive Annual Financial Report (CAFR) for the year ended
June 30, 2009. The scope of the examination did not include the statistical section of this report.
REPORTING ENTITY
The Comprehensive Annual Financial Report combines the financial statements of the
Redevelopment Agency of the City of Azusa and the Azusa Public Financing Authority with the
City of Azusa to constitute a single reporting entity. Although each entity is legally separate from
the City, their respective financial operations are closely related thereto. This combined
presentation better represents the financial activities of the City of Azusa.
ACCOUNTING SYSTEM AND BUDGETARY CONTROL
The City uses the modified accrual basis of accounting to record general governmental
operations. Under this method, revenues are recognized in the accounting period in which they
Finance Department • 213 E. Foothill Blvd. • P.O. Box 1395 • Azusa, CA 91702-1395
Tel: (626) 812-5203 • FAX (626) 334-6358
become measurable and available to finance expenditures of the fiscal period. For proprietary
funds (enterprise and internal service funds), the full accrual method of accounting is utilized.
Accordingly, revenues are recognized in the accounting period when they are earned and
expenses are recognized when they are incurred.
In developing and evaluating the City's accounting systems, consideration is given to the
adequacy of internal accounting controls. Internal accounting controls are designed to provide
reasonable, but not absolute, assurance regarding the safeguarding of assets against loss from
unauthorized use or disposition. Internal controls are also utilized to ensure the reliability of
financial records, which are the basis for preparing financial statements and maintaining
accountability of assets. The concept of reasonable assurance recognizes that the cost of control
measures does not exceed the benefits likely to be derived from this control, and that the
evaluation of costs and benefits likely to be derived requires estimates and judgments by
management. All internal evaluations occur within the framework outlined above. Staff believes
the internal accounting controls safeguard adequately the Citys assets and provide reasonable
assurance that financial transactions are properly recorded.
Section 2-450 of the Azusa Municipal Code stipulates that budget amendments of S100,000 or
more must be approved by City Council. This is the legal level of budgetary control. Capital
Improvement Projects are maintained by project life, therefore the budget appropriation for these
projects may need to be re -budgeted in subsequent accounting periods.
LOCAL ECONOMY
The City of Azusa enjoys a diverse local economy and City revenues are less dependent on single
source or cyclical revenues than most of the surrounding Cities in the region. Sales Tax, though
important, is not the City's primary revenue source. Consequently, the City is relatively better
insulated from major economic downturns. In addition, economic development efforts of the
City's Redevelopment Agency in recent years have begun to bear fruit with the completed
development of the Foothill Shopping Center last year and with the recent groundbreaking for a
new Target store in the City's town center anticipated to stimulate additional growth. Local
employment remains stable with Northrop -Grumman, a major defense contractor, preparing to
expand its operations and Azusa Pacific University in the midst of a major expansion of both
facilities and student population. The planned and funded expansion of the Los Angeles Metro
Gold Line through Azusa in the immediate future is also anticipated to bring additional economic
activity to the City's revitalizing Downtown with planned transit oriented development projects
currently under negotiation.
MAJOR INITIATIVES
This year we continued to work towards a number of key efforts
Continued planning efforts for the extension of the "Gold Line" commuter rail service
which will ultimately link Azusa to downtown Los Angeles on the west end and Ontario
Airport in the east with stops at most of the communities along the length of this route. A
recent County -wide ballot measure was successfully passed by the voters, securing
funding for the extension of the rail line through to the Eastern edge of Azusa. Two
stations will be located within the City. This project is now a Part of the Los Angeles
County Metropolitan Transportation Authority's regional improvement program which
will expedite construction.
Finance Department • 213 E. Foothill Blvd. • P.O. Box 1395 - Azusa, CA 91702-1395
Tel: (626) 812-5203 • FAX (626) 334-6358
Completed and began operating the City's new $37 million water treatment plant with
state of the art filtration systems.
The acquisition of numerous parcels in the blighted Atlantis Gardens housing
development which, in a planned partnership with the City of Industry (financial
assistance) and a private developer are proposed to be demolished and replaced with
modern low and moderate income housing units
Continued Downtown revitalization that has seen the first new private construction in our
historic core in nearly 30 years, Tile City's Redevelopment Agency has acquired and
consolidated parcels of land in the Downtown area and negotiations are underway with a
master developer for the entire north Foothill business and government center.
APPROPRIATION LIMIT
As set forth by the Gann Initiative, which became law in the State of California in 1979, and its
subsequent revisions, the City's statutory appropriation limit for 2008-09 was calculated at $45,
045,512. Budgeted revenues from proceeds of tares totaled $25,796,759 , which is $17,859,343
or about 40% below the City's legal appropriation limit.
CASH MANAGEMENT
As a general law city, Azusa operates its pooled idle cash investments under the Prudent Man
Rule (California Civil Code Section 2261, et. seq.), which in essence states that "in investing
property for the benefit of another, a trustee shall exercise the judgment and care, under
circumstances then prevailing, which men of prudence, discretion and intelligence exercise in the
management of their own affairs..." The City's cash management system is designed to monitor
and forecast expenditures and revenues as accurately as possible and to invest funds to the fullest
extent possible. The City attempts to obtain the highest available investment yields consistent
with the criteria established and outlined in the City's Investment Policy, which is approved
annually by the City Council. Some of the instruments in which the City may invest are: U.S.
Government Securities, Certificates of Deposit, Bankers' Acceptances, the State of California
Local Agency Investment Fund (LAIF), Treasury Bills, Repurchase Agreements, and regular
savings and demand deposits. Though declining in these difficult economic times, the City's cash
position remained healthy throughout 2008-09.
AWARDS AND ACKNOWLEDGMENTS
The Government Finance Officers Association of the United States and Canada (GFOA) awarded
a Certificate of Achievement for Excellence in Financial Reporting to the City of Azusa for its
(CAFR) for the fiscal year ended June 30, 2008, In order to be awarded a Certificate of
Achievement, a government must publish an easily readable and efficiently organized CAFR.
This report must satisfy both generally accepted accounting principles and applicable legal
requirements.
A Certificate of Achievement is valid for a period of one year only. We believe that 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.
Finance Department - 213 E. Foothill Blvd. • P.O. Box 1395 • Azusa, CA 917024395
Tel: (626) 812-5203 • FAX (626) 334-6358
This document could not have been prepared without the dedicated efforts of the entire Finance
Department staff. The City's independent auditors, Lance, Soil and Lunghard, provided expertise
and advice in preparing this financial report.
Through the team effort of its City Council, management and employees, the City expects to
continue the high level of service, which is currently provided to the Azusa community. Due to
the consistent policies of the City Council and the Finance Department, the City of Azusa has
been able to maintain a sound financial base from which to operate.
Very truly yours,
AL 1611,
. .
Alan Kreimeier
Administrative Services Director/CFO
Finance Department- 213 E. Foothill Blvd. • P.O. Box 1395 • Azusa, CA 91702-1395
Tel: (626) 812-5203 • FAX (626) 334-6358
iv
ELECTED OFFICIALS
Vera Mendoza
Marcene Hamilton
Joseph Rocha
Uriel Macias
Angel Carrillo
Robert Gonzales
Keith Hanks
DEPARTMENT HEADS
Francis M. Delach
James Makshanoff
Kurt Christiansen
Joe Jacobs
Alan Kreimeier
Joseph Hsu
Bob Garcia
Tito Haes
Albert Tovar
Kermit Francis
Ann Graf
P. Michael Freeman
City Attorney
City of Azusa
ELECTED OFFICIALS AND DEPARTMENT HEADS
213 E. Foothill Boulevard
Azusa, CA 91702
(626)812-5200
Fax (626) 334-6358
www.ci.azusa.ca.us
TITLE
City Clerk
City Treasurer
Mayor
Mayor Pro-Tem
Councilmember
Councilmember
Councilmember
TERM EXPIRATION
March, 2013
March, 2013
March, 2013
March, 2011
March, 2011
March, 2013
March, 2013
TITLE
PHONE NUMBER
City Manager
626-812-5238
Assistant City Manager
626-812-5224
Director of Economic & Community Development
626-812-5236
Director of Recreation & Family Services
626-812-5220
Director of Administrative Services/CFO
626-812-5291
Director of Utilities
626-812-5219
Chief of Police
626-812-3250
Director of Public Works/Assistant City Manager
626-812-5248
Director of Library
626-812-5277
Interim Director of Human Resources
626-812-5183
Director of Information Technology
626-812-5024
Chief/Fire
626-974-8371
Best, Best, & Krieger (Sonia Carvalho)
949-263-2603
vi
Certificate of
Achievement
for Excellence
in Financial
Reporting
Presented to
City of Azusa
California
For its Comprehensive Annual
Financial Report
for the Fiscal Year Ended
June 30, 2008
A Certificate of Achievement for Excellence in Financial
Reporting is presented by the Government Finance Officers
Association of the United States and Canada to
government units and public employee retirement
systems whose comprehensive annual financial
reports (CAFRs) achieve the highest
standards in government accounting
and financial reporting.
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Executive Director
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