MATTERS” herein. $111,545,000 TAXABLE PENSION OBLIGATION ...
Transcript of MATTERS” herein. $111,545,000 TAXABLE PENSION OBLIGATION ...
NEW ISSUE - BOOK-ENTRY ONLY Rating: S&P: “AA-” See the caption “CONCLUDING INFORMATION—Rating.”
In the opinion of Richards, Watson & Gershon, A Professional Corporation, Bond Counsel, under existing law
interest on the Bonds is exempt from State of California personal income taxes. INTEREST ON THE BONDS IS NOT
EXCLUDED FROM GROSS INCOME FOR FEDERAL INCOME TAX PURPOSES. Bond Counsel expresses no opinion
as to any other tax consequences regarding the Bonds. For a more complete discussion of the tax aspects, see “TAX
MATTERS” herein.
$111,545,000 CITY OF MONROVIA
TAXABLE PENSION OBLIGATION BONDS SERIES 2017
Dated: Delivery Date Due: May 1, as shown on the inside front cover page The above-captioned bonds (the “Bonds”) will be issued in fully registered form registered in the name of Cede &
Co. as nominee of The Depository Trust Company, New York, New York (“DTC”). The Bonds will be available to the ultimate purchasers (“Beneficial Owners”) in denominations of $5,000 or any integral multiple thereof pursuant to a Trust Agreement dated as of June 1, 2010 (the “Master Trust Agreement”) by and between the City of Monrovia (the “City”) and U.S. Bank National Association, as trustee (the “Trustee”), as supplemented by the First Supplemental Trust Agreement, dated as of December 1, 2017 (the “First Supplement,” and together with the Master Trust Agreement, the “Trust Agreement”). The Bonds are payable at the corporate trust office of the Trustee in Los Angeles, California or such other location as designated by the Trustee. Interest on the Bonds is payable semiannually on May 1 and November 1 in each year, commencing on May 1, 2018 (each, an “Interest Payment Date”), by check mailed by first class mail on the Interest Payment Date to the registered owner thereof as of the Record Date established for the Bonds or, at the option of any Owner of at least $1,000,000 in principal amount of Bonds, by wire transfer if such Owner will provide the Trustee written wire transfer instructions at least fifteen (15) days prior to the applicable Record Date. Capitalized terms not otherwise defined herein will have the meanings set forth in APPENDIX B—“SUMMARY OF THE TRUST AGREEMENT” herein and in the Trust Agreement.
The Bonds are subject to optional and mandatory term bond redemption prior to their maturity under certain conditions as described herein. See “THE BONDS” herein.
The Bonds are being issued to (i) refund in full the City of Monrovia Taxable Pension Obligation Bonds, Series 2010 (the “2010 Bonds”) currently outstanding in the principal amount of $10,970,000, (ii) fund the City’s unfunded accrued actuarial liability to the California Public Employees’ Retirement System (“CalPERS”) for the benefit of the City’s employees in an amount equal to $98,291,138, and (iii) pay certain costs of issuance in association therewith. The Bonds are special obligations of the City payable primarily from and secured by the Revenue Fund and the Retirement Tax Revenues deposited therein pursuant to the Trust Agreement. To the extent that such Retirement Tax Revenues are not available to make payments with respect to the Bonds, the obligation of the City to make payments is a general fund obligation of the City.
This cover page of the Official Statement contains information for quick reference only. It is not a complete summary of the Bonds. Investors should read the entire Official Statement to obtain information essential to the making of an informed investment decision. Attention is hereby directed to certain risk factors more fully described under the caption “RISK FACTORS” herein.
THE BONDS ARE SPECIAL OBLIGATIONS OF THE CITY PAYABLE PRIMARILY FROM AND SECURED BY THE REVENUE FUND AND THE RETIREMENT TAX REVENUES AND GENERAL FUND REVENUES DEPOSITED THEREIN PURSUANT TO THE TRUST AGREEMENT. NEITHER THE BONDS NOR THE OBLIGATION OF THE CITY TO MAKE PAYMENTS WITH RESPECT TO THE BONDS CONSTITUTES AN INDEBTEDNESS OF THE CITY, THE STATE OR ANY OF ITS POLITICAL SUBDIVISIONS IN CONTRAVENTION OF ANY CONSTITUTIONAL OR STATUTORY DEBT LIMITATION OR RESTRICTION.
The Bonds are offered, when, as and if issued, subject to the approval of Richards, Watson & Gershon, A
Professional Corporation, Los Angeles, California, Bond Counsel. In addition, certain legal matters will be passed on for
the City by Stradling Yocca Carlson & Rauth, a Professional Corporation, Newport Beach, California, as Disclosure
Counsel, for the Underwriter by its counsel, Nixon Peabody LLP, Los Angeles, California, and for the Trustee by its
counsel, Dorsey & Whitney LLP, Costa Mesa, California. It is anticipated that the Bonds will be available for delivery
through the facilities of DTC on or about December 13, 2017.
Dated: November 30, 2017.
$111,545,000 CITY OF MONROVIA
TAXABLE PENSION OBLIGATION BONDS SERIES 2017
Maturity Schedule
(Base CUSIP 611581†)
Maturity Date (May 1)
Principal Amount
Interest Rate Yield Price
CUSIP† Suffix
2018 $1,355,000 1.910% 1.910% 100.00% AH2 2019 2,290,000 2.186 2.186 100.00 AJ8 2020 2,345,000 2.400 2.400 100.00 AK5 2021 2,400,000 2.542 2.542 100.00 AL3 2022 2,460,000 2.742 2.742 100.00 AM1 2023 2,525,000 2.912 2.912 100.00 AN9 2024 2,600,000 3.062 3.062 100.00 AP4 2025 2,680,000 3.163 3.163 100.00 AQ2 2026 2,765,000 3.263 3.263 100.00 AR0 2027 2,855,000 3.363 3.363 100.00 AS8 2028 2,950,000 3.513 3.513 100.00 AT6
$16,510,000 3.890% Term Bonds due May 1, 2033 – Yield 3.890% – Price 100.000% – CUSIP Suffix AU3 $20,025,000 3.990% Term Bonds due May 1, 2038 – Yield 3.990% – Price 100.000% – CUSIP Suffix AV1 $19,115,000 4.090% Term Bonds due May 1, 2042 – Yield 4.090% – Price 100.000% – CUSIP Suffix AW9 $28,670,000 4.140% Term Bonds due May 1, 2047 – Yield 4.140% – Price 100.000% – CUSIP Suffix AX7
† CUSIP® is a registered trademark of the American Bankers Association. CUSIP Global Services (CGS) is managed on behalf of the American Bankers
Association by S&P Capital IQ. Copyright © 2017 CUSIP Global Services. All rights reserved. CUSIP® data herein is provided by Standard & Poor’s CUSIP Service Bureau. This data is not intended to create a database and does not serve in any way as a substitute for the CUSIP Service Bureau. CUSIP® numbers are provided for convenience of reference only. Neither the City nor the Underwriter takes any responsibility for the accuracy of such numbers.
CITY OF MONROVIA COUNTY OF LOS ANGELES, CALIFORNIA
CITY COUNCIL
Tom Adams, Mayor Gloria Crudgington, Mayor Pro-Tem
Larry J. Spicer, Councilmember Alexander C. Blackburn, Councilmember
Becky A. Shevlin, Councilmember
CITY STAFF
Oliver Chi, City Manager Buffy J. Bullis, Administrative Services Director
Craig Steele, City Attorney Alice D. Atkins, City Clerk
Stephen R. Baker, City Treasurer
SPECIAL SERVICES
Bond Counsel Richards, Watson & Gershon A Professional Corporation
Los Angeles, California
Disclosure Counsel Stradling Yocca Carlson & Rauth,
A Professional Corporation Newport Beach, California
Underwriter Hilltop Securities Inc.
Cardiff by the Sea, California
Municipal Advisor Urban Futures, Inc. Tustin, California
Verification Agent Grant Thornton, LLP
Minneapolis, Minnesota
Trustee and Escrow Agent U.S. Bank National Association
Los Angeles, California
No dealer, broker, salesperson or other person has been authorized by the City or the Underwriter to give any information or to make any representations, other than those contained in this Official Statement, and, if given or made, such other information or representations must not be relied upon as having been authorized by the City or the Underwriter. This Official Statement does not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of the Bonds by a person in any jurisdiction in which it is unlawful for such person to make such an offer, solicitation or sale. This Official Statement is not to be construed as a contract with the purchasers of the Bonds. Statements contained in this Official Statement which involve estimates, forecasts or matters of opinion, whether or not expressly so described herein, are intended solely as such and are not to be construed as a representation of facts.
The information set forth herein has been obtained from the City and other sources believed to be reliable, but the accuracy or completeness of such information is not guaranteed by, and should not be construed as a representation by, the Underwriter. This Official Statement has been deemed final, as of its date, by the City for the purpose of Rule 15c2-12 under the Securities Exchange Act of 1934, as amended. The information and expressions of opinions herein are subject to change without notice and neither delivery of the Official Statement nor any sale made hereunder shall, under any circumstances, create any implication that there has been no change in the affairs of the City since the date hereof. All summaries contained herein of the Trust Agreement or other documents are made subject to the provisions of such documents and do not purport to be complete statements of any or all of such provisions. All statements made herein are made as of the date of this document by the City, except statistical information or other statements where some other date is indicated in the text.
The Underwriter has provided the following sentence for inclusion in this Official Statement. The Underwriter has reviewed the information in this Official Statement in accordance with its responsibilities to investors under the federal securities laws as applied to the facts and circumstances of this transaction, but the Underwriter does not guarantee the accuracy or completeness of such information.
The Bonds are exempt from registration with the Securities and Exchange Commission pursuant to the Securities Act of 1933, as amended. The Bonds have not been registered or qualified under the securities laws of any state. The Bonds will not be listed on any stock or securities exchange. Neither the Securities and Exchange Commission nor any other federal, state or other governmental entity or agency will have passed upon the accuracy or adequacy of the Official Statement or approved the Bonds for sale.
IN CONNECTION WITH THIS OFFERING, THE UNDERWRITER MAY OVERALLOT OR EFFECT TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE BONDS AT A LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL ON THE OPEN MARKET. SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME. THE UNDERWRITER MAY OFFER AND SELL THE BONDS TO CERTAIN DEALERS AND DEALER BANKS AND BANKS ACTING AS AGENT AND OTHERS AT PRICES LOWER THAN THE PUBLIC OFFERING PRICES STATED ON THE INSIDE FRONT COVER PAGE HEREOF AND SUCH PUBLIC OFFERING PRICES MAY BE CHANGED FROM TIME TO TIME BY THE UNDERWRITER.
Certain statements included or incorporated by reference in this Official Statement constitute “forward-looking statements.” Such statements are generally identifiable by the terminology used such as “plan,” “expect,” “estimate,” “budget,” or other similar words. The achievement of certain results or other expectations contained in such forward-looking statements involves known and unknown risks, uncertainties and other factors which may cause actual results, performance or achievements described to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. While the City has agreed to provide certain on-going financial and other data for a limited period of time (see “CONCLUDING INFORMATION—Continuing Disclosure”), the City does not plan to issue any updates or revisions to those forward-looking statements if or when the expectations or events, conditions or circumstances on which such statements are based change.
TABLE OF CONTENTS
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INTRODUCTION ................................................................................................................................................ 1 General .............................................................................................................................................................. 1
THE BONDS ........................................................................................................................................................ 3 General .............................................................................................................................................................. 3 The Bonds ......................................................................................................................................................... 3 Optional Redemption of the Bonds .................................................................................................................. 3 Mandatory Sinking Fund Account Redemption of the Bonds .......................................................................... 4 Notice of Redemption ....................................................................................................................................... 5 Selection of Bonds for Redemption .................................................................................................................. 5 Book-Entry Only System .................................................................................................................................. 5
PLAN OF REFINANCING .................................................................................................................................. 6
SOURCES AND USES OF PROCEEDS ............................................................................................................. 7
SECURITY AND SOURCE OF PAYMENT FOR THE BONDS ...................................................................... 8 Bond Payments ................................................................................................................................................. 8 Limited Obligations .......................................................................................................................................... 9
SCHEDULE OF ANNUAL DEBT SERVICE PAYMENTS ............................................................................ 11
THE CITY .......................................................................................................................................................... 12 General ............................................................................................................................................................ 12 Budgetary Process and Administration ........................................................................................................... 12 Revenue and Expenditure Trends ................................................................................................................... 12 Debt Administration ....................................................................................................................................... 22 Cash Management .......................................................................................................................................... 23 Property Taxes ................................................................................................................................................ 23 Sales Taxes ..................................................................................................................................................... 27 The Retirement Tax ........................................................................................................................................ 27 Other Taxes ..................................................................................................................................................... 31 Services ........................................................................................................................................................... 31 Risk Management ........................................................................................................................................... 31 Retirement Contributions ................................................................................................................................ 31 Labor Status .................................................................................................................................................... 41
STATE OF CALIFORNIA BUDGET INFORMATION ................................................................................... 41 State Budget .................................................................................................................................................... 41 Potential Impact of State Financial Condition on the City ............................................................................. 43 Future State Budgets ....................................................................................................................................... 43
RISK FACTORS ................................................................................................................................................ 43 Future Financial Condition ............................................................................................................................. 43 Limited Obligation of the City ........................................................................................................................ 43 Possible Dilution of Retirement Tax Revenues .............................................................................................. 44 Additional General Fund Obligations of the City ........................................................................................... 44 Natural Disasters ............................................................................................................................................. 44 Hazardous Substances .................................................................................................................................... 45 Bankruptcy of the City .................................................................................................................................... 45 Legislative Changes ........................................................................................................................................ 46 Constitutional Limitation on Taxes and Expenditures .................................................................................... 46 Proposition 62 ................................................................................................................................................. 47 Proposition 218 ............................................................................................................................................... 48 Proposition 26 ................................................................................................................................................. 49 Future Initiatives ............................................................................................................................................. 49
TABLE OF CONTENTS (continued)
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Loss of State Tax Exemption .......................................................................................................................... 49 Secondary Market ........................................................................................................................................... 49
TAX MATTERS................................................................................................................................................. 50 Non-U.S. Owners ............................................................................................................................................ 51 Foreign Account Tax Compliance Act ........................................................................................................... 51 Form of Bond Counsel Opinion ...................................................................................................................... 52
VALIDATION.................................................................................................................................................... 52
CONCLUDING INFORMATION ..................................................................................................................... 52 Rating .............................................................................................................................................................. 52 Underwriting ................................................................................................................................................... 53 Verification of Mathematical Accuracy .......................................................................................................... 53 Municipal Advisor .......................................................................................................................................... 53 Legal Opinion ................................................................................................................................................. 53 Continuing Disclosure .................................................................................................................................... 54 Absence of Litigation ..................................................................................................................................... 55 Legality for Investment in California ............................................................................................................. 55 Miscellaneous ................................................................................................................................................. 55
APPENDIX A SUPPLEMENTAL INFORMATION OF THE CITY OF MONROVIA ............................. A-1 APPENDIX B SUMMARY OF THE TRUST AGREEMENT..................................................................... B-1 APPENDIX C FORM OF BOND COUNSEL OPINION ............................................................................. C-1 APPENDIX D FORM OF CONTINUING DISCLOSURE CERTIFICATE ................................................ D-1 APPENDIX E AUDITED FINANCIAL STATEMENTS OF THE CITY FOR THE YEAR
ENDING JUNE 30, 2016 ...................................................................................................... E-1 APPENDIX F BOOK-ENTRY ONLY SYSTEM ......................................................................................... F-1
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$111,545,000 CITY OF MONROVIA
TAXABLE PENSION OBLIGATION BONDS SERIES 2017
INTRODUCTION
General
The purpose of this Official Statement is to provide certain information concerning the issuance by the City of Monrovia (the “City”) of its Taxable Pension Obligation Bonds, Series 2017, in the aggregate principal amount of $111,545,000 (the “Bonds”).
The City is a member of the California Public Employees’ Retirement System (“CalPERS”), an agent multiple employer public employees retirement program that acts as a common investment and administrative agent for participating entities within the State of California. As such, the City is obligated by the Public Employees’ Retirement Law, constituting Part 3 of Division 5 of Title 2 of the California Government Code (the “Retirement Law”), and the contract between the Board of Administration of CalPERS and the City Council of the City, effective September 1, 1950 (the “CalPERS Contract”), as amended, to make contributions to CalPERS to (a) fund pension benefits for its employees who are members of CalPERS, (b) amortize a portion of the unfunded actuarial liability (the “Unfunded Liability”) with respect to such pension benefits, and (c) appropriate funds for the purposes of paying for the pension benefits and such Unfunded Liability.
The City is authorized pursuant to Articles 10 and 11 (commencing with section 53570) of Chapter 3 of Division 2 of Title 5 of the California Government Code (the “Refunding Bond Law”), to issue bonds for the purpose of refunding obligations evidenced by the CalPERS Contract and to refund other obligations of the City. The Bonds are being issued pursuant to a Trust Agreement, dated as of June 1, 2010 (the “Master Trust Agreement”) by and between the City and U.S. Bank National Association, as trustee (the “Trustee”) , as supplemented by the First Supplemental Trust Agreement, dated as of December 1, 2017 (the “First Supplement,” and together with the Master Trust Agreement, the “Trust Agreement”), and a resolution of issuance adopted by the City Council of the City (the “Council”) on August 5, 2008, as supplemented by a supplemental resolution adopted by the Council on November 7, 2017 (the “Supplemental Resolution”) approving the execution and delivery of the First Supplement and other documents relating to the Bonds. The proceeds from the sale of the Bonds will be used to (i) refund in full the City of Monrovia Taxable Pension Obligation Bonds, Series 2010 (the “2010 Bonds”), (ii) fund the City’s unfunded accrued actuarial liability to CalPERS for the benefit of the City’s employees, and (iii) pay certain costs of issuance in association therewith. See the captions “PLAN OF REFINANCING” and “SOURCES AND USES OF PROCEEDS” herein.
The obligations of the City under the CalPERS Contract and the Bonds, including the City’s obligation to make all payments of interest and principal when due, are absolute and unconditional, without any right of set-off or counterclaim. The Bonds are special obligations of the City payable primarily from and secured all money and securities for deposit in, or deposited in, the Revenue Fund, and certain other amounts pledged therefor in the Trust Agreement. The Revenue Fund shall be funded pursuant to the terms of the Trust Agreement first, from Retirement Tax Revenues (as defined herein) and second, from any other source of legally available funds of the City, to the extent that the Retirement Tax Revenues are not available therefor. See “SECURITY AND SOURCE OF PAYMENT FOR THE BONDS.”
The City levies a special retirement tax (the “Retirement Tax”) that was approved in 1950 to fund the City’s obligations under the CalPERS Contract, which is levied on taxable and/or assessable property in the City at a rate of 0.128519 per $100 of assessed valuation (see the caption “THE CITY—The Retirement Tax”
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herein and “—Tax Rate” in Appendix A). Revenues received by or payable to the City pursuant to such special retirement tax are referred to herein as the “Retirement Tax Revenues.” If the Retirement Tax Revenues are insufficient in any Fiscal Year to fund the Revenue Fund to the extent provided in the Trust Agreement for payment of interest and principal on the Bonds, the City shall make such payments from its general fund (the “General Fund”).
Under the Trust Agreement, Retirement Tax Revenues will be considered “available” for funding debt service on the Bonds pursuant to applicable law, including but not limited to Article XIIIA, Section 1(b)(1), of the California Constitution, as amended from time to time, as interpreted by Carman v. Alvord, 31 Cal.3d 318 (1982), Howard Jarvis Taxpayers Assn. v. County of Orange, 110 Cal.App.4th (2003), 88 Ops.Cal.Atty.Gen. 1 (2005), or any such successor court decisions and legal authorities as may be issued from time to time. As of the Closing Date for the Bonds and until such time as the foregoing legal authorities are amended or superseded in a manner that warrants a different allocation of funding between Retirement Tax Revenues and any other source of legally available funds of the City, as determined by Bond Counsel in consultation with the City Attorney, the City shall fund debt service on the Bonds as follows: (A) with respect to the portion of debt service attributable to refunding the 2010 Bonds, 76.8% shall be funded from Retirement Tax Revenues, and 23.2% shall be funded from any other source of legally available funds of the City; and (B) with respect to the balance of the debt service (being the portion attributable to refunding by the Bonds of certain Unfunded Liability not previously refunded by the 2010 Bonds), 79.0% shall be funded from Retirement Tax Revenues, and 21.0% shall be funded from any other source of legally available funds of the City. See the captions “SECURITY AND SOURCES OF PAYMENT FOR THE BONDS,” and “THE CITY—The Retirement Tax” and “—Retirement Contributions—Report of Independent Actuary.”
The Trust Agreement further provides that “any other source of legally available funds of the City” includes, without limitation, the City’s Water Enterprise Fund and the City’s Sewer Enterprise Fund, solely to the extent of legally permissible costs allocable to each such fund for contribution to the Deposit Amount under (A) applicable law, including but not limited to Article XIIID of the California Constitution, as amended from time to time, and (B) present or future contractual obligations of the City which include a pledge of, and/or lien upon, revenues of the City’s water system or sewer system, as applicable, including without limitation the Installment Sale Agreement (Water System) and the Installment Sale Agreement (Sewer System), each dated as of March 1, 2016, and each by and between the City and the Monrovia Financing Authority, entered into in connection with the Monrovia Financing Authority’s Water and Sewer Revenue Bonds, Series 2016.
The City maintains a practice of allocating a portion of the City’s retirement costs to the Water Enterprise Fund and the Sewer Enterprise Fund, as follows: (i) a portion of the normal cost is allocated to such funds by multiplying the percentage of payroll represented by the employer’s contribution (as stated in the annual actuarial report for the Miscellaneous Plan prepared by CalPERS) by the budgeted payroll of the water or sewer employees, as applicable, for the applicable Fiscal Year; and (ii) the City allocates a portion of the amount of the Unfunded Liability contribution for the Miscellaneous Plan (as stated in the annual actuarial report for the Miscellaneous Plan prepared by CalPERS) to the Water Enterprise Fund and Sewer Enterprise Fund based on the proportion of the City’s budgeted water or sewer employee salaries, as applicable, to all non-safety employee salaries budgeted for the applicable Fiscal Year.
After the Bonds are issued and the present Unfunded Liability is paid to CalPERS from the proceeds of the Bonds, the City expects to continue to annually calculate and apply the same methodology described in clause (ii) of the foregoing paragraph against the portion of the annual debt service for the Bonds that is attributable to refunding the Unfunded Liability for the Miscellaneous Plan, as well as to calculate and allocate any new Unfunded Liability annual contribution to CalPERS that may arise for the Miscellaneous Plan subsequent to the issuance of the Bonds, in each case to determine the proportionate allocation of such costs to the Water Enterprise Fund and the Sewer Enterprise Fund. For Fiscal Year 2017-18 and based on the methodology described in clause (ii) above, the City allocated 17.09% of the Unfunded Liability contribution paid by the City to CalPERS for the Miscellaneous Plan to the Water Enterprise Fund and 1.22% to the Sewer
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Enterprise Fund. For Fiscal Year 2018-19, these percentages are expected to be 17.17% and 1.23% for the Water Enterprise Fund and Sewer Enterprise Fund, respectively, and applied to the portion of the annual debt service for the Bonds that is attributable to refunding the Unfunded Liability for the Miscellaneous Plan. See “PLAN OF REFINANCING.” See also “THE CITY – Retirement Contributions” for more information regarding the funding of retirement costs, including the normal cost and Unfunded Liability.
THE BONDS ARE SPECIAL OBLIGATIONS OF THE CITY PAYABLE PRIMARILY FROM AND SECURED BY THE REVENUE FUND AND THE RETIREMENT TAX REVENUES AND GENERAL FUND REVENUES DEPOSITED THEREIN PURSUANT TO THE TRUST AGREEMENT. NEITHER THE BONDS NOR THE OBLIGATION OF THE CITY TO MAKE PAYMENTS WITH RESPECT TO THE BONDS CONSTITUTES AN INDEBTEDNESS OF THE CITY, THE STATE OR ANY OF ITS POLITICAL SUBDIVISIONS IN CONTRAVENTION OF ANY CONSTITUTIONAL OR STATUTORY DEBT LIMITATION OR RESTRICTION.
This Introduction contains a brief summary of certain information contained in this Official Statement. It is not intended to be complete and is qualified by the more detailed information contained elsewhere in this Official Statement.
All capitalized terms not defined herein or in Appendix B will have the meanings set forth in the Trust Agreement.
THE BONDS
General
The Bonds will be issued as current interest bonds in fully registered form only and, when delivered, will be registered in the name of Cede & Co., as nominee of The Depository Trust Company, New York, New York (“DTC”). DTC will act as Securities Depository for the Bonds. Ownership interests in the Bonds may be purchased in book-entry form only, in the denominations hereinafter set forth. Principal of, premium, if any, and interest on the Bonds will be payable by the Trustee to DTC, which is obligated in turn to remit such principal and interest to DTC Participants for subsequent disbursement to Beneficial Owners (herein defined) of the Bonds. See “—Book-Entry System” and Appendix F herein.
The Bonds
The Bonds will be dated the date of delivery, mature on the dates and in the principal amounts and bear interest at the rates set forth on the inside front cover page of this Official Statement. The Bonds will be delivered in denominations equal to $5,000 or any integral multiple thereof. Interest on the Bonds will be payable on each May 1 and November 1, commencing May 1, 2018, by check mailed by first class mail on such interest payment date to such registered holders at the address shown on the registration books maintained by the Trustee; provided, however, that any Bondowner of at least $1,000,000 in aggregate principal amount of Bonds may be paid by wire transfer upon written request submitted to the Trustee at least fifteen (15) days prior to the applicable Record Date.
Optional Redemption of the Bonds
The Bonds maturing on or after May 1, 2028 may be redeemed at the option of the City from any source of funds on any date on or after May 1, 2027 in whole or in part from such maturities as are selected by the City and by lot within a maturity at a redemption price equal to the principal amount to be redeemed, together with accrued interest to the date of redemption, without premium.
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Mandatory Sinking Fund Account Redemption of the Bonds
The Bonds maturing on May 1, 2033, May 1, 2038, May 1, 2042 and May 1, 2047 (the “Term Bonds”) are subject to mandatory sinking fund redemption at a redemption price equal to the principal amount of such Bonds to be redeemed, plus accrued interest to the redemption date, without premium. The Term Bonds shall be so redeemed on the following dates and in the following amounts:
Bonds Maturing on May 1, 2033
Sinking Fund Payment Date (May 1) Principal Amount
2029 $3,055,000 2030 3,175,000 2031 3,295,000 2032 3,425,000 2033 (maturity) 3,560,000
Bonds Maturing on May 1, 2038
Sinking Fund Payment Date (May 1) Principal Amount
2034 $3,695,000 2035 3,845,000 2036 4,000,000 2037 4,160,000 2038 (maturity) 4,325,000
Bonds Maturing on May 1, 2042
Sinking Fund Payment Date (May 1) Principal Amount
2039 $4,495,000 2040 4,680,000 2041 4,870,000 2042 (maturity) 5,070,000
Bonds Maturing on May 1, 2047
Sinking Fund Payment Date (May 1) Principal Amount
2043 $5,280,000 2044 5,495,000 2045 5,725,000 2046 5,960,000 2047 (maturity) 6,210,000
On or before the forty-fifth (45th) day prior to any mandatory sinking fund redemption date, the
Trustee shall proceed to select for redemption pro-rata from all Term Bonds subject to mandatory sinking fund redemption at that time an aggregate principal amount of such Term Bonds equal to the amount for such year as set forth in the applicable table above and shall call such Term Bonds or portions thereof for redemption and give notice of such redemption in accordance with the terms of the Trust Agreement. At the option of the City,
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to be exercised by delivery of a written certificate to the Trustee on or before the sixtieth (60th) day next preceding any mandatory sinking fund redemption date, it may (a) deliver to the Trustee for cancellation Term Bonds or portions thereof (in the amount of an Authorized Denomination) of the stated maturity subject to such redemption or (b) specify a principal amount of such Term Bonds or portions thereof (in the amount of an Authorized Denomination) which prior to said date have been purchased or redeemed and cancelled by the Trustee at the request of the City and not theretofore applied as a credit against any mandatory sinking fund redemption requirement. In the event that the Term Bonds are optionally redeemed, in part, the foregoing mandatory sinking fund payments that are not yet due or payable at such time will be reduced as nearly as practicable on a pro-rata basis in integral multiples of $5,000.
Notice of Redemption
So long as the Bonds are held in book-entry form by DTC, notices of redemption will be mailed only to DTC and not to the Beneficial Owners of Bonds.
Notice of redemption will be mailed: (i) in the case of Bonds not held as book-entry Bonds by DTC, by first class mail by the Trustee not less than thirty (30) nor more than sixty (60) days prior to the redemption date to the respective owners of the Bonds designated for redemption at their addresses appearing on the registration books of the Trustee; (ii) in the case of Bonds held by DTC, by facsimile transmission or an express delivery service for delivery on the next following Business Day; and (iii) in the case of Bonds not held by DTC as book-entry Bonds, by registered or certified mail or overnight delivery service to one or more Information Services not later than the date of mailing required by clause (i) above. Each notice of redemption shall state the Bonds or designated portions thereof to be redeemed, the date of redemption, the place of redemption, the redemption price, the CUSIP number (if any) of the Bonds to be redeemed, the distinctive numbers of the Bonds of such maturity to be redeemed and, in the case of Bonds to be redeemed in part only, the respective portions of the principal amount thereof to be redeemed, the original issue date, interest rate and stated maturity date of each Bond to be redeemed in whole or part. Each such notice shall also state that on said date there will become due and payable on each of the Bonds to be redeemed the redemption price, and redemption premium, if any, thereof, and that from and after such redemption date interest thereon shall cease to accrue. Failure to receive such notice or any defect therein shall not invalidate any of the proceedings taken in connection with such redemption or in any manner affect the redemption of any Bonds.
Selection of Bonds for Redemption
Bonds are subject to redemption pro rata within a maturity. Upon surrender of a Bond to be redeemed in part, the Trustee will authenticate for the registered owner a new Bond or Bonds of the same maturity and tenor equal in principal amount to the unredeemed portion of the Bond surrendered.
Book-Entry Only System
The Bonds will be issued as one fully registered bond without coupons for each maturity (unless there are different interest rates within such maturity, then one certificate for each interest rate within such maturity) and, when issued, will be registered in the name of Cede & Co., as nominee of DTC. DTC will act as Securities Depository of the Bonds. Individual purchases may be made in book-entry form only, in the principal amount of $5,000 and integral multiples thereof. Purchasers will not receive certificates representing their interest in the Bonds purchased. Principal and interest will be paid to DTC, which will in turn remit such principal and interest to its Participants for subsequent disbursement to the Beneficial Owners of the Bonds as described herein. So long as DTC’s book-entry system is in effect with respect to the Bonds, notices to Beneficial Owners of the Bonds by the City or the Trustee will be sent to DTC. Notices and communication by DTC to its participants, and then to the Beneficial Owners of the Bonds, will be governed by arrangements among them, subject to then effective statutory or regulatory requirements. See APPENDIX F—“BOOK-ENTRY ONLY SYSTEM.”
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In the event that such book-entry system is discontinued with respect to the Bonds, the City will execute and deliver replacements in the form of registered certificates and, thereafter, the Bonds will be transferable and exchangeable on the terms and conditions provided in the Trust Agreement. In addition, the following provisions would then apply: Principal of any Bond and any premium upon redemption will be paid by check of the Trustee upon presentation and surrender thereof at the corporate trust office of the Trustee in Los Angeles, California or such other address as may be designated in writing by the Trustee. The interest on the Bonds will be payable by check mailed or draft on each Interest Payment Date to the registered owners thereof as shown on the registration books of the Trustee as of the close of business on the Record Date (i.e., fifteenth day of the month preceding the Interest Payment Date); provided, that a registered owner of $1,000,000 or more in aggregate principal amount of the Bonds may specify in writing at least fifteen days prior to the Record Date that the interest payment payable on each succeeding Interest Payment Date be made by wire transfer. The interest, principal, and redemption premiums, if any, due with respect to the Bonds will be payable in lawful money of the United States of America.
PLAN OF REFINANCING
On December 17, 2008, the Superior Court of the State of California in and for the County of Los Angeles (the “County”) entered a default judgment to the effect, among other things, that the CalPERS Contract, the Trust Agreement, the 2010 Bonds (defined below) and the Additional Bonds issued under the Trust Agreement are valid, legal and binding obligations of the City and that the CalPERS Contract, the Trust Agreement, the 2010 Bonds and the Additional Bonds issued under the Trust Agreement are valid and in conformity with all applicable provisions of law and all applicable provisions of the Retirement Law and the California Constitution. See the caption “VALIDATION.”
On July 29, 2010, the City issued the 2010 Bonds in the original aggregate principal amount of $12,750,000 for the purpose of refinancing the City’s unfunded actuarial liability with respect to the “side fund” of the City’s Safety Plan pension obligation. The 2010 Bonds are currently outstanding in the principal amount of $10,970,000.
In July and August 2017, CalPERS notified the City as to the amount of the Unfunded Liabilities for the City’s Miscellaneous Plan, Safety Plan, PEPRA Safety Police Plan and PEPRA Safety Fire Plan based on the actuarial valuation reports as of June 30, 2016 (the “2016 CalPERS Reports”), which is the most recent actuarial valuation routinely performed by CalPERS for the City’s Miscellaneous Plan, Safety Plan, PEPRA Safety Police Plan and PEPRA Safety Fire Plan. According to the 2016 CalPERS Reports:
x The Miscellaneous Plan was 60.4% funded as of June 30, 2016 (based on market value of assets), and the City’s Unfunded Liability with respect to the Miscellaneous Plan under the CalPERS Contract was $44,997,286 as of June 30, 2016.
x The Safety Plan was 69.9% funded as of June 30, 2016 (based on market value of assets), and the City’s Unfunded Liability with respect to the Safety Plan under the CalPERS Contract was $51,891,757 as of June 30, 2016.
x The PEPRA Safety Police Plan was 89.6% funded as of June 30, 2016 (based on market value of assets), and the City’s Unfunded Liability with respect to the Safety Plan under the CalPERS Contract was $14,778 as of June 30, 2016.
x The PEPRA Safety Fire Plan was 87.1% funded as of June 30, 2016 (based on market value of assets), and the City’s Unfunded Liability with respect to the Safety Plan under the CalPERS Contract was $29,630 as of June 30, 2016.
In November 2017, the Actuarial Office of CalPERS provided the City with a form advising of the amount required in order to pay off the Unfunded Liability for each of the City’s Plans as of December 13,
7
2017 (the “2017 Actuarial Form”), as follows: $44,954,846 for the Miscellaneous Plan, $53,275,515 for the Safety Plan, $21,468 for the PEPRA Safety Police Plan and $39,309 for the PEPRA Safety Fire Plan.
The Bonds are being issued as Additional Bonds under the Trust Agreement (see the caption “VALIDATION” herein) to advance refund the 2010 Bonds in full and to refund the City’s Unfunded Liability for its Miscellaneous Plan, Safety Plan, PEPRA Safety Police Plan and PEPRA Safety Fire Plan, as determined by CalPERS in the 2017 Actuarial Form. Upon the issuance of the Bonds, the City will pay $98,291,138 to CalPERS for deposit to the CalPERS Payment Fund. It is possible that the current Unfunded Liability will be more or less than the estimate in such 2017 Actuarial Form if actual plan experience differs from the actuarial estimates. In the event of any remaining Unfunded Liability, the City could choose to pay it in a lump sum amount or in installments when due to CalPERS, or the City could choose to issue additional pension obligation bonds. See the caption “THE CITY—Retirement Contributions—City Actions to Pay Unfunded Liability” herein. Even if the Unfunded Liability is completely retired upon the issuance of the Bonds, failure by CalPERS to achieve its target investment returns or certain future amendments to the CalPERS Contract which add additional value to any of the four plans in which the City participates could also generate new Unfunded Liability for the City (which could be paid as described in the foregoing sentence).
A portion of the proceeds of the sale of the Bonds will be deposited with U.S. Bank National Association, as escrow agent for the 2010 Bonds (the “Escrow Agent”) pursuant to an Escrow Agreement, dated as of December 1, 2017, between the City and the Escrow Agent (the “Escrow Agreement”). Pursuant to the Escrow Agreement, the Escrow Agent will deposit such amounts and amounts on deposit in the funds and accounts established in connection with the 2010 Bonds into the 2010 Bonds Escrow Fund (the “Escrow Fund”) established under the Escrow Agreement and shall hold such amounts in cash and invested in certain direct obligations of the United State of America, subject to the requirements of the Escrow Agreement, in amounts sufficient to pay principal and accrued interest on the 2010 Bonds and redeem the 2010 Bonds on the redemption date. For information on mathematical verification for the sufficiency of amounts held in the Escrow Fund established under the Escrow Agreement to make such payments, see “CONCLUDING INFORMATION—Verification of Mathematical Accuracy.” All securities, investments and moneys held by the Escrow Agent in the Escrow Fund will solely be available to pay the redemption price of the 2010 Bonds, as provided in the Escrow Agreement, and will not be available to pay debt service on the Bonds.
SOURCES AND USES OF PROCEEDS
The proceeds to be received from the sale of the Bonds are estimated to be applied as set forth below.
Sources(1) Principal Amount of Bonds $ 111,545,000 Transfer from 2010 Bonds Revenue Fund 4 Total Sources $ 111,545,004 Uses(1) Funding of the Unfunded Accrued Liability(2) $ 98,291,138 Deposit of 2010 Escrow Fund(3) 12,143,091 Costs of Issuance(4) 1,110,775 Total Uses $ 111,545,004
(1) Amounts are rounded to nearest dollar. (2) Deposit to CalPERS Payment Fund. See “PLAN OF REFINANCING” herein. (3) An amount deposited in US Government Securities which will be sufficient when added to interest earnings thereon to pay
principal and interest on the 2010 Bonds through and including May 1, 2020. (4) Includes Underwriter’s discount, rating fees, underwriting costs, legal, printing, and other costs of issuance deposited in the
Costs of Issuance Fund.
8
SECURITY AND SOURCE OF PAYMENT FOR THE BONDS
Bond Payments
The obligations of the City under the Bonds, including the obligation to make all payments of principal, premium, if any and interest when due, are absolute and unconditional, without any right of set-off or counterclaim.
Pursuant to the Trust Agreement, if any Bonds are Outstanding, the City shall, no later than fifteen (15) days prior to each Interest Payment Date, deliver funds to the Trustee in an aggregate amount equal to the aggregate amount of principal and interest required to be paid on the Bonds (the “Deposit Amount”) (less amounts on deposit in the Revenue Fund) for the Payment Calculation Period ending on the applicable Interest Payment Date. The City shall fund such Deposit Amount from (i) Retirement Tax Revenues and (ii) any other source of legally available funds of the City, to the extent that the Retirement Tax Revenues are not available therefor. “Payment Calculation Period” is defined in the Trust Agreement as “(i) with respect to each May 1 Interest Payment Date, the six-month period commencing on the immediately preceding November 2 and ending on such May 1 Interest Payment Date, and (ii) with respect to each November 1 Interest Payment Date, the six-month period commencing on the immediately preceding May 2 and ending on such November 1 Interest Payment date, except that the first Payment Calculation Period with respect to the Bonds shall commence on the Closing Date and end on May 1, 2018.”
Under the Trust Agreement, Retirement Tax Revenues will be considered “available” for funding the Deposit Amount pursuant to applicable law, including but not limited to Article XIIIA, Section 1(b)(1), of the California Constitution, as amended from time to time, as interpreted by Carman v. Alvord, 31 Cal.3d 318 (1982), Howard Jarvis Taxpayers Assn. v. County of Orange, 110 Cal.App.4th (2003), 88 Ops.Cal.Atty.Gen. 1 (2005), or any such successor court decisions and legal authorities as may be issued from time to time. As of the Closing Date for the Bonds and until such time as the foregoing legal authorities are amended or superseded in a manner that warrants a different allocation of funding between Retirement Tax Revenues and any other source of legally available funds of the City, as determined by Bond Counsel in consultation with the City Attorney, the City shall fund each Deposit Amount as follows: (A) with respect to the portion of the Deposit Amount attributable to refunding the 2010 Bonds, 76.8% shall be funded from Retirement Tax Revenues, and 23.2% shall be funded from any other source of legally available funds of the City; and (B) with respect to the balance of the Deposit Amount (being the portion attributable to refunding by the Bonds of certain Unfunded Liability not previously refunded by the 2010 Bonds), 79.0% shall be funded from Retirement Tax Revenues, and 21.0% shall be funded from any other source of legally available funds of the City. See the captions “—Limited Obligations” and “THE CITY—The Retirement Tax” and “—Retirement Contributions—Report of Independent Actuary.”
The Trust Agreement further provides that “any other source of legally available funds of the City” includes, without limitation, the City’s Water Enterprise Fund and the City’s Sewer Enterprise Fund, solely to the extent of legally permissible costs allocable to each such fund for contribution to the Deposit Amount under (A) applicable law, including but not limited to Article XIIID of the California Constitution, as amended from time to time, and (B) present or future contractual obligations of the City which include a pledge of, and/or lien upon, revenues of the City’s water system or sewer system, as applicable, including without limitation the Installment Sale Agreement (Water System) and the Installment Sale Agreement (Sewer System), each dated as of March 1, 2016, and each by and between the City and the Monrovia Financing Authority, entered into in connection with the Monrovia Financing Authority’s Water and Sewer Revenue Bonds, Series 2016.
The City maintains a practice of allocating a portion of the City’s retirement costs to the Water Enterprise Fund and the Sewer Enterprise Fund, as follows: (i) a portion of the normal cost is allocated to such funds by multiplying the percentage of payroll represented by the employer’s contribution (as stated in the annual actuarial report for the Miscellaneous Plan prepared by CalPERS) by the budgeted payroll of the water
9
or sewer employees, as applicable, for the applicable Fiscal Year; and (ii) the City allocates a portion of the amount of the Unfunded Liability contribution for the Miscellaneous Plan (as stated in the annual actuarial report for the Miscellaneous Plan prepared by CalPERS) to the Water Enterprise Fund and Sewer Enterprise Fund based on the proportion of the City’s budgeted water or sewer employee salaries, as applicable, to all non-safety employee salaries budgeted for the applicable Fiscal Year.
After the Bonds are issued and the present Unfunded Liability is paid to CalPERS from the proceeds of the Bonds, the City expects to continue to annually calculate and apply the same methodology described in clause (ii) of the foregoing paragraph against the portion of the annual debt service for the Bonds that is attributable to refunding the Unfunded Liability for the Miscellaneous Plan, as well as to calculate and allocate any new Unfunded Liability annual contribution to CalPERS that may arise for the Miscellaneous Plan subsequent to the issuance of the Bonds, in each case to determine the proportionate allocation of such costs to the Water Enterprise Fund and the Sewer Enterprise Fund. For Fiscal Year 2017-18 and based on the methodology described in clause (ii) above, the City allocated 17.09% of the Unfunded Liability contribution paid by the City to CalPERS for the Miscellaneous Plan to the Water Enterprise Fund and 1.22% to the Sewer Enterprise Fund. For Fiscal Year 2018-19, these percentages are expected to be 17.17% and 1.23% for the Water Enterprise Fund and Sewer Enterprise Fund, respectively, and applied to the portion of the annual debt service for the Bonds that is attributable to refunding the Unfunded Liability for the Miscellaneous Plan. See “PLAN OF REFINANCING.” See also “THE CITY – Retirement Contributions” for more information regarding the funding of retirement costs, including the normal cost and Unfunded Liability.
No assurance can be given as to the amount and source of money available in the City General Fund, the Water Enterprise Fund or the Sewer Enterprise Fund for such transfers at any particular time. However, the Trust Agreement provides that the City shall punctually pay the interest on and the principal of and premium, if any, to become due on the Bonds.
Additional Bonds. From time to time, the City may enter into (i) one or more other trust agreements or indentures and/or (ii) one or more supplemental agreements supplementing and/or amending the Trust Agreement, for the purpose of providing for the issuance of Additional Bonds to refund the Bonds or to refund any Unfunded Liability under the CalPERS Contract or any other obligations due to CalPERS. Such Additional Bonds may be issued on a parity with the Bonds. See the caption “RISK FACTORS—Possible Dilution of Retirement Tax Revenue Pledge.”
Limited Obligations
California courts have held that Proposition 13, discussed below under the heading “RISK FACTORS—Constitutional Limitation on Taxes and Expenditures,” permits additional property taxation to pay for pension plans with special tax authority approved by voters prior to July 1, 1978; provided, the imposition of such tax is limited to the funding of employee retirement benefits at a level not in excess of the retirement benefits in existence prior to July 1, 1978 (the “Pre-Proposition 13 Pension Liability”). The City engaged an independent actuary, Bartel Associates, LLC (“Bartel”) to determine the portion of 2010 Bonds and the portion of the Unfunded Liability to be refinanced by the Bonds that is attributable to the City’s Pre-Proposition 13 Pension Liability. Bartel has certified that 76.8% of the proceeds of the 2010 Bonds and 79.0% of the Unfunded Liability refinanced with the proceeds of the Bonds constitutes Pre-Proposition 13 Pension Liability under the CalPERS Contract. Retirement Tax Revenues will only be available to pay the portion of debt service on the Bonds attributable to the refunding of the 2010 Bonds and Unfunded Liability, up to these percentages. The Trust Agreement provides that debt service on the Bonds will be paid from Retirement Tax Revenues to the extent such revenues are legally available for such purpose; the remainder of the debt service on the Bonds will be paid from other legally available sources, including General Fund revenues. See the captions “—Bond Payments” and “THE CITY—Retirement Contributions—Report of Independent Actuary” herein. Also see the caption “RISK FACTORS—Possible Dilution of Retirement Tax Revenue Pledge.”
10
A portion of the revenues generated by the Retirement Tax are allocated to the Successor Agency to the Monrovia Redevelopment Agency (the “Successor Agency”) as tax increment revenues. Under the California Constitution and the statutes that provide for allocation of tax increment revenues to the Successor Agency, Retirement Tax revenues generated from properties within the boundaries of the redevelopment project area are diverted by the County Auditor-Controller and paid to the Successor Agency to the extent needed to pay debt service on the Successor Agency’s bonded indebtedness. As shown in the table under the caption “THE CITY—The Retirement Tax,” a portion of the Retirement Tax revenues generated each year are allocated to the Successor Agency for payment of debt service on the Successor Agency’s bonds; however, in Fiscal Years 2015-16 and 2016-17 a portion of such revenues was returned to the City by the County Auditor-Controller. See the caption “THE CITY—The Retirement Tax” for additional information regarding the allocation of a portion of the Retirement Tax to pay debt service on Successor Agency bonds.
THE BONDS ARE SPECIAL OBLIGATIONS OF THE CITY PAYABLE PRIMARILY FROM AND SECURED BY THE REVENUE FUND AND THE RETIREMENT TAX REVENUES AND GENERAL FUND REVENUES DEPOSITED THEREIN PURSUANT TO THE TRUST AGREEMENT. NEITHER THE BONDS NOR THE OBLIGATION OF THE CITY TO MAKE PAYMENTS WITH RESPECT TO THE BONDS CONSTITUTES AN INDEBTEDNESS OF THE CITY, THE STATE OR ANY OF ITS POLITICAL SUBDIVISIONS IN CONTRAVENTION OF ANY CONSTITUTIONAL OR STATUTORY DEBT LIMITATION OR RESTRICTION.
11
SCH
ED
UL
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F A
NN
UA
L D
EB
T S
ER
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AY
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NT
S
The
follo
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show
s th
e an
nual
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rvic
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r th
e B
onds
, by
Bon
d Y
ear
(ass
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g no
opt
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dem
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ior
to s
ched
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atur
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f the
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ds),
and
the
porti
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f the
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ebt s
ervi
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aym
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elig
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for p
aym
ent f
rom
Ret
irem
ent T
ax R
even
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See
the
capt
ion
“SEC
UR
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AN
D S
OU
RC
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F PA
YM
ENT
FOR
TH
E B
ON
DS—
Bon
d Pa
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Yea
r En
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May
1
Prin
cipa
l In
tere
st To
tal
Deb
t Ser
vice
Pay
men
ts To
tal D
ebt S
ervi
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ayab
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from
Ret
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ax R
even
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Tota
l Deb
t Ser
vice
Pay
able
fr
om G
ener
al F
und
2018
$
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079,
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3
12
THE CITY
General
The City is located in the San Gabriel Valley twenty miles northeast of the City of Los Angeles at the base of the San Gabriel Mountains. Founded on May 17, 1886, the City was incorporated on December 15, 1887, and has a general law form of government. The City operates under a Council/Manager form of government; the Mayor and Councilmembers are elected at large and the City Manager is appointed by the Council. The population of the City as of January 1, 2017 was estimated to be 38,514.
Budgetary Process and Administration
The City prepares and adopts a two year budget every other fiscal year. In the second year of the two year budget cycle, an updated budget is prepared. Prior to June 30, the City Manager submits to the City Council a proposed budget for the Fiscal Year commencing the following July 1. The budget includes proposed expenditures and the means of financing them. Prior to June 30, public hearings are conducted to obtain public comments and the budget is legally enacted through the passage of a resolution.
The City’s budget for Fiscal Year 2017-18 was adopted by the City Council on June 6, 2017.
The City Council may transfer funds between funds or activities set forth in the budget. The City Manager may transfer funds between funds within an appropriation as set forth in the budget and may transfer appropriations between activities within any fund. Management may transfer appropriations between departments without the approval of the City Council.
Revenue and Expenditure Trends
For the Fiscal Year 2017-18 Budget, the City’s General Fund is structurally balanced, with revenues projected to be $46.1 million against expenditures of $46.1 million.
On the revenue side, property taxes, sales taxes and transient occupancy taxes combine to make up nearly 75% of all General Fund revenues, excluding transfers.
Property tax revenues are expected to reach $12.36 million for the 2017-18 Fiscal Year. This is approximately a 6.02% increase over the prior year, which equates to an increase of approximately $702,000. In addition, assessed values of single family homes are expected to increase approximately 5.03% next year, which is consistent with the growth rate experienced last year.
Sales tax revenue is projected to increase approximately 2.3% for the 2017-18 Fiscal Year, to $10.41 million. The growth is attributable to a combination of factors, in particular, auto sales and business and construction spending in Monrovia have bolstered the City’s sales tax receipts. Auto dealerships are looking to expand their inventories, as evidenced by the recently completed BMW Dealership’s new five story parking structure and showroom expansion project.
The City’s Transient Occupancy (Hotel) Tax continues to show strong growth over the last several years, and the City projects that those revenues will increase 3.1% during the 2017-18 Fiscal Year, with total hotel tax receipts projected to be over $2 million.
In accordance with the City’s adopted Strategic Goal of Enhancing Community Infrastructure, the City has, during the past two years, worked to develop and implement a very aggressive capital improvement program (CIP) plan.
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The largest CIP objective being undertaken by the City is an initiative that has been named Monrovia Renewal, which is an estimated $51.7 million project that seeks to facilitate the improvement of deferred street, sidewalk, water system and sewer line maintenance initiatives. The overall plan calls for the repair of every street in the City that has a pavement condition index rating of less than 70, the implementation of necessary water transmission pipe replacements, the improvement of water project facilities and the upgrade of all sewer lines in need of repair. Funding to implement the second year of the four to five year Monrovia Renewal project has been included in the Fiscal Year 2017-18 Budget.
In addition to the Monrovia Renewal program, the City has also incorporated a base CIP plan in the Fiscal Year 2017-18 budget that proposes to add $5.6 million in expenditures to execute an additional 15 separate capital improvement projects and capital outlay expenditures.
Like many public entities in the State, rising pension costs represent a significant and ongoing liability that must be actively managed to ensure long-term financial stability. Information regarding the City’s pension obligations and Unfunded Liability is set forth below under “—CalPERS Unfunded Liability” and under the caption “—Retirement Contributions.” The City is undertaking a number of strategies expected to help effectively manage such obligations, including the issuance of the Bonds. See “—Retirement Contributions—City Actions to Pay Unfunded Liability” and “—Labor Status” for more information regarding the City’s strategies to address the challenge of rising pension costs.
CalPERS Unfunded Liability. As of the most recent valuation performed by CalPERS, the City’s Unfunded Liability was $96,933,451. See the caption “PLAN OF REFINANCING.” The City is issuing the Bonds, in part, to pay this Unfunded Liability. The City is also taking additional steps to address the impact of increasing retirement costs on the City’s finances. See the caption “—Retirement Contributions” below.
Revenues. Estimated General Fund revenues for the 2016-17 Fiscal Year were $30,831,194, as compared to $32,804,852 for the 2015-16 Fiscal Year, a decrease of $1,973,658, or 6.0%. Such decrease was due to a decrease in a few revenue areas, including building and planning revenues and tax revenue. For the 2016-17 Fiscal Year, preliminary financial results show that the City’s overall tax revenue increased by $109,657, or 0.4% over prior year levels. During Fiscal Year 2015-16, the City received a one-time payment of approximately $900,000 for the State’s completion of the Triple Flip program. Excluding the impact of this payment for comparative purposes, the City’s overall tax revenue actually increased by approximately $1,009,000, or 4.2%. Sales tax increased by approximately $404,000 in Fiscal Year 2016-17 over the prior year, or 4.1%, after excluding the one-time Triple Flip payment. In addition to sales tax, property tax increased approximately $505,000 over the prior year, or 4.5%.
Other taxes went up by approximately $101,000, or 3.2%, which was mainly due to higher transient occupancy (hotel) tax revenue and business license revenue. Charges for Services revenues decreased by approximately $589,000, or 18.4% from the prior year, which is attributable to one-time revenues received during the prior fiscal year for several large developments that began construction during the current year. Such one-time revenues were collected at the commencement of construction on the developments. In addition, licenses and permits decreased by approximately $604,000, or 42.9%, which is also attributable to one-time building and planning revenues received during Fiscal Year 2015-16.
Use of Money and Property increased approximately $62,000 over the prior year, and Fines and Forfeitures increased by approximately $18,000, or 7.0%. Miscellaneous revenue decreased $209,000, or 27.1% from the prior year, due to the receipt of one-time monies received in the Fiscal Year 2015-16. Overall, even though revenues were approximately $1.97 million less than the prior year, they tracked very close to budget for Fiscal Year 2016-17, coming in approximately $319,000 less than projected, or 1.0% overall. Significant one-time revenues in Fiscal Year 2015-16 affected the comparison.
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The changes in Fiscal Year 2016-17 revenue by source are detailed as follows:
CITY OF MONROVIA Comparison of Revenues
General Fund
Category Total
2014-15 Total
2015-16 Total
2016-17(1) Percent
of Total(2) Increase
(Decrease)(3) Increase
(Decrease)(3)
Taxes Property taxes $ 10,484,736 $ 11,154,091 $ 11,658,497 37.8% $ 504,406 4.5% Transient occupancy taxes 1,760,129 1,891,098 1,945,275 6.3 54,177 2.9 Sales taxes(4) 9,129,153 10,675,133 10,178,953 33.0 (496,180) (4.6) Franchise taxes 612,623 627,925 616,374 2.0 (11,551) (1.8) Business license taxes 534,533 695,389 754,194 2.5 58,805 8.5 Licenses, permits and other
taxes 678,952 1,408,368 803,992 2.6 (604,376) (42.9) Intergovernmental 2,592,317 1,659,869 907,173 2.9 (752,696) (45.3) Charges for services 2,351,491 3,197,813 2,608,842 8.5 (588,971) (18.4) Use of money and property 298,859 360,966 422,475 1.4 61,509 17.0 Fines and forfeitures 261,920 263,280 281,857 .9 18,577 7.0 Contributions 87,501 101,972 93,128 .3 (8,844) (8.7) Reimbursements -- -- -- -- -- -- Miscellaneous 935,286 768,948 560,434 1.8 (208,514) (27.1) Total $ 29,727,500 $ 32,804,852 $ 30,831,194 100.0% $ (1,973,658) (6.0)%
(1) Unaudited. (2) Totals may not add due to rounding. (3) Change from Fiscal Year 2015-16 to Fiscal Year 2016-17. (4) Increase in Fiscal Year 2015-16 includes a one-time increase of approximately $900,000 for the State’s Triple Flip Program. Source: Audited Financial Statements for Fiscal Years 2014-15, 2015-16 and City for Fiscal Year 2016-17.
Expenditures. The City’s estimated General Fund expenditures for Fiscal Year 2016-17 totaled $41,440,585, compared to $36,528,691 for the Fiscal Year 2015-16, an increase of $4,911,894 or 13.4%. Approximately $1 million of this increase was due to an extra pay period that occurred during Fiscal Year 2016-17. Such extra pay period was budgeted as part of the annual budgeting process and was funded with one-time monies received in Fiscal Year 2015-16 for the State’s Triple Flip program. These funds were set-aside in reserves to pay for the extra pay period in Fiscal Year 2016-17. In addition, personnel costs, including CalPERS pension costs, increased over the prior year by approximately 13%. A majority of the additional CalPERS pension costs increases is due to changes in CalPERS retirement funding assumptions. See the caption “—Retirement Contributions.” In addition, one-time capital project expenditures and an increase in internal service charges resulted in an approximate increase of $500,000 over Fiscal Year 2015-16. Both expenditures were planned and were included as part of the annual budgeting process. The one-time capital project expenditures were funded with reserves.
General Government expenditures increased by $945,661 in Fiscal Year 2016-17, or approximately 20.3%. Public Safety increased by $1,980,828, or 8.3%. Community Development expenditures increased by $681,081, or 27.1%. Parks and Recreation expenditures increased by $1,105,825, or 26.4%. Public Works expenditures increased by $198,517, or 15.9%. Interest and Fiscal Charges decreased by $18, or 4.9%.
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The table below sets forth the unaudited Fiscal Year 2016-17 expenditures compared to the audited financial results for the previous two Fiscal Years.
CITY OF MONROVIA Comparison of Expenditures
General Fund
Category Total
2014-15 Total
2015-16 Total
2016-17(1) Percent
of Total(2) Increase
(Decrease)(3) Increase
(Decrease)(3)
Current: General government $ 4,261,746 $ 4,652,829 $ 5,598,490 13.5% $ 945,661 20.3% Public safety 22,043,373 23,919,610 25,900,438 62.5 1,980,828 8.3 Community
development 1,815,344 2,516,810 3,197,891 7.7 681,081 27.1 Parks and recreation 3,879,735 4,187,587 5,293,412 12.8 1,105,825 26.4 Public works 1,328,398 1,251,487 1,450,004 3.5 198,517 15.9 Debt service: Interest and fiscal
charges 374 368 350 0.0 (18) (4.9) Total $ 33,328,970 $ 36,528,691 $ 41,440,585 100.0% $ 4,911,894 13.4%
(1) Unaudited. (2) Totals may not add due to rounding. (3) Change from Fiscal Year 2015-16 to Fiscal Year 2016-17. Source: Audited Financial Statements for Fiscal Years 2014-15 and 2015-16; City for Fiscal Year 2016-17.
The following table sets forth a statement of the City’s General Fund and governmental fund revenues, expenditures, and changes in fund balances for Fiscal Years 2014-15 and 2015-16.
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CITY OF MONROVIA Statement of Revenues, Expenditures,
and Changes in Fund Balances All Governmental Funds
June 30, 2015 June 30, 2016
General Fund
Total Governmental
Funds General Fund
Total Governmental
Funds Revenues: Taxes $ 22,521,174 $ 30,944,861 $ 25,043,636 $ 34,342,343 Assessments - 1,331,082 - 1,332,814 Licenses and permits 678,952 678,952 1,408,368 1,408,368 Intergovernmental 2,592,317 19,764,461 1,659,869 22,652,458 Charges for services 2,351,491 2,548,793 3,197,813 3,415,180 Use of money and property 298,859 365,701 360,966 463,420 Fines and forfeitures 261,920 827,608 263,280 899,784 Contributions(1) 87,501 87,701 101,972 101,972 Miscellaneous 935,286 1,019,591 768,948 1,005,453 Total Revenues $ 29,727,500 $ 57,568,750 $ 32,804,852 $ 65,621,772 Expenditures: Current: General government $ 4,261,746 $ 4,401,812 $ 4,652,829 $ 4,799,809 Public safety 22,043,373 29,269,028 23,919,610 31,985,937 Community development 1,815,344 3,394,160 2,516,810 4,138,276 Parks and recreation 3,879,735 3,948,728 4,187,587 4,234,471 Public works 1,328,398 3,663,889 1,251,487 3,926,928 Capital outlay - 13,438,030 - 6,413,785 Debt service: Principal retirement - 920,000 - 1,045,000 Interest and fiscal charges 374 2,037,302 368 1,884,399 Total Expenditures $ 33,328,970 $ 61,072,949 $ 36,528,691 $ 58,428,605 Excess (Deficiency) of Revenues Over (Under) Expenditures (3,601,470) (3,504,199) (3,723,839) 7,193,167 Other Financing Sources (Uses): Transfers in $ 7,017,782 $ 11,781,633 $ 9,026,377 $ 13,596,008 Transfers out(2) (1,416,989) (9,709,362) (1,853,922) (10,381,400) Payment to refunded bond escrow agent - (6,690,000) - - Lease revenue issued - - - 13,600,000 Bond premium - 520,076 - 938,901 Debt issued - 6,180,000 - - Total Other Financing Sources (Uses) $ 5,600,793 $ 2,028,347 $ 7,172,455 $ 17,753,509 Extraordinary gain/(loss) (467,831) 353,790 Net change in fund balances 1,531,492 (1,421,852) 3,802,406 24,946,676 Fund Balances, Beginning of Year, as
originally reported $ 2,333,184 $ 16,088,948 $ 3,864,676 $ 14,667,096 Restatements - - - - Fund Balances, Beginning of Year, as restated 2,333,184 16,088,948 3,864,676 14,667,096 Fund Balances, End of Year $ 3,864,676 $ 14,667,096 $ 7,667,082 $ 39,613,772 (1) Contributions include, for example, donations and sponsorships for specific City programs. (2) Transfers out include the following: (i) transfers from the City’s Retirement Fund to specific operating funds that incur
pension costs, (ii) overhead costs charged to each operating department of the City for administrative services, (iii) transfers from the General Fund to the Retirement Fund to support future cost increases in pension costs, gas tax revenues transferred to the Street Fund to support street maintenance needs, (iv) Proposition C revenue transferred to the Street Fund for street resurfacing projects, and (v) transfers from the General Fund to support programs not accounted for in the General Fund, and other similar items.
Source: Audited Financial Statements for Fiscal Years 2014-15 and 2015-16.
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The following table sets forth the unaudited General Fund revenues, expenditures, and changes in fund balances for Fiscal Year 2016-17.
CITY OF MONROVIA Statement of Revenues, Expenditures,
and Changes in Fund Balances General Fund
2016-17
(Unaudited) Revenues: Taxes $ 25,153,293 Licenses and permits 803,992 Intergovernmental 907,173 Charges for services 2,608,842 Use of money and property 422,475 Fines and forfeitures 281,857 Contributions 93,128 Miscellaneous 560,434 Total Revenues $ 30,831,194 Expenditures: Current: General government $ 5,598,490 Public safety 25,900,438 Community development 3,197,891 Parks and recreation 5,293,412 Public works 1,450,004 Interest and Other Charges 350 Total Expenditures $ 41,440,585 Excess (Deficiency) of Revenues Over (Under) Expenditures $ (10,609,391) Other Financing Sources (Uses): Transfers in $ 11,672,547 Transfers out (2,492,356) Total Other Financing Sources (Uses) $ 9,180,191 Net change in fund balances $ (1,429,200) Fund Balances, Beginning of Year $ 7,667,082 Fund Balances, End of Year $ 6,237,882
Source: City of Monrovia.
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The following table shows the City’s summary of revenues, expenditures, and changes to fund balances for the Retirement Fund for Fiscal Years 2011-12, 2012-13, 2013-14, 2014-15, 2015-16 and 2016-17.
CITY OF MONROVIA Statement of Revenues, Expenditures,
and Changes in Fund Balances Retirement Fund
Last Six Fiscal Years
2011-12 2012-13 2013-14 2014-15 2015-16 2016-17 Revenues:
Taxes $ 4,924,954 $ 4,472,802 $ 4,706,308 $ 5,001,697 $ 5,959,025 $ 6,255,354 Licenses and permits -- -- -- -- -- -- Intergovernmental -- -- -- -- -- -- Charges for services -- -- -- -- -- -- Use of money and property 4,433 1,984 7,597 8,069 14,102 976 Fines and forfeitures -- -- -- -- -- -- Contributions -- -- -- -- -- -- Miscellaneous 2,000,000 --
Total revenues $ 4,929,387 $ 6,474,786 $ 4,713,905 $ 5,099,766 $ 5,973,127 $ 6,256,330 Expenditures:
Current: General government $ -- $ -- $ 140,765 $ 140,066 $ 146,918 $ 158,040 Public safety -- -- -- -- -- -- Community development -- -- -- -- -- -- Parks and recreation -- -- -- -- -- -- Public works -- -- -- -- -- --
Capital outlay -- -- -- -- -- -- Debt service:
Principal retirement -- -- -- -- -- -- Interest and fiscal charges -- -- -- -- -- --
Total expenditures $ -- $ -- $ 140,765 $ 140,066 $ 146,918 $ 158,040
Excess of revenues over (under) expenditures $ 4,929,387 $ 6,474,786 $ 4,573,140 $ 4,869,700 $ 5,826,209 $ 6,098,290 Other financing sources (uses):
Transfers in(1) $ 700,000 $ 800,000 $ 900,000 $ 1,100,000 $ 1,700,000 $ 1,800,000 Transfers out(2) (5,842,782) (6,093,536) (5,603,519) (5,814,031) (6,960,435) (8,170,261) Extraordinary loss on dissolution of redevelopment agency (2,000,000) -- -- -- -- --
Total other financing sources (uses) $ (7,148,782) $ (5,293,536) $ (4,703,519) $ (4,714,031) $ (5,260,435) $ (6,370,261)
Net change in fund balances $ (2,219,395) $ 1,181,250 $ (130,379) $ 155,669 $ 565,774 $ (271,971)
Fund balances (deficit), beginning of year, as previously reported
$ 3,333,213 $ 1,107,973 $ 2,289,223 $ 2,158,844 $ 2,314,513 $ 2,880,287
Restatements -- -- -- -- -- -- Fund balances (deficit), beginning of year, as restated
$ 3,333,213 $ 1,107,973 $ 2,289,223 $ 2,158,844 $ 2,314,513 $ 2,880,287
Fund balances (deficit), end of year $ 1,107,973 $ 2,289,223 $ 2,158,844 $ 2,314,513 $ 2,880,287 $ 2,608,316 (1) Transfers in include the following: Support from the General Fund to assist with annual costs in the Retirement Fund. (2) Transfers out include the following: Transfers to various funds to assist with retirement costs. In addition, an amount sufficient to
pay the debt service on the 2010 Bonds is transferred to the fund making the debt service payment. Source: City of Monrovia Comprehensive Annual Financial Report for Fiscal Years 2011-12, 2012-13, 2013-14, 2014-15, and
2015-16. City for Fiscal Year 2016-17.
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The following table sets forth the City’s governmental fund balance sheets for Fiscal Years 2014-15 and 2015-16. The combined fund balance of $14.67 million in Fiscal Year 2014-15 increased by $24.94 million to $39.61 million for Fiscal Year 2015-16. This increase is due to increases in several funds, including the General Fund, the Proposition C and Measure R Project Fund and the Capital Improvement Fund. The General Fund balance increased by approximately $3.8 million, mainly due to an increase in several key revenues as well as a one-time increase of approximately $900,000 for the State’s Triple Flip Program. In addition, the balance of the Proposition C and Measure R Project Fund increased by approximately $13.3 million as a result of the issuance of the Authority’s Lease Revenue Bonds (Measure R and Proposition C Street Improvements), Issue of 2016. See “—Debt Administration” herein. Finally, the Capital Project Fund balance increased by approximately $5.6 million due to the reimbursement of grant expenditures from the previous Fiscal Year.
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CITY OF MONROVIA Balance Sheet
General and Total Governmental Funds as of June 30, 2015 and June 30, 2016
June 30, 2015 June 30, 2016
General Fund
Total Governmental
Funds General Fund
Total Governmental
Funds Assets: Pooled cash and investments(1) $ 410,988 $ 10,368,217 $ 4,022,651 $ 19,068,664 Receivables: Accounts 947,124 1,404,002 689,908 1,335,678 Taxes 2,783,387 2,961,664 3,696,421 3,897,237 Notes and loans - 1,229,031 31,705 1,277,418 Accrued interest 36,586 36,586 66,517 66,517 Deferred loans - 1,593,224 - 1,663,518 Grants 74,765 9,314,679 75,043 1,714,179 Prepaid costs 16,580 16,580 301,640 2,046,436 Due from other funds 2,588,761 2,588,761 541,462 541,462 Advances to Successor Agency of the former RDA - 2,551,385 - 2,551,385 Land held for resale - 3,139,259 353,790 3,139,259 Restricted assets: Cash and investments - 334,336 - 1,130,492 Cash and investments with fiscal agents - 53,502 - 9,493,223 Total Assets $ 6,858,191 $ 35,591,226 $ 9,779,137 $ 47,925,468 Liabilities: Accounts payable $ 775,424 $ 8,018,268 $ 639,087 $ 2,200,838 Accrued liabilities 372,948 372,948 438,939 455,734 Unearned revenues 63,350 237,887 42,934 325,589 Deposits payable 116,706 116,706 119,312 119,312 Due to other governments - 188,642 - 192,177 Due to other funds - 2,454,376 - 385,887 Advances from other funds 139,340 365,751 92,896 243,833 Total Liabilities $ 1,467,768 $ 11,754,578 $ 1,333,168 $ 3,923,370 Deferred Inflows of Resources: Unavailable revenues $ 1,525,747 $ 9,169,552 $ 778,887 $ 4,388,326 Total Deferred Inflows of Resources $ 1,525,747 $ 9,169,552 $ 778,887 $ 4,388,326 Fund Balances: Nonspendable: Prepaid costs $ 16,580 $ 16,580 $ 301,640 $ 2,046,436 Land held for resale - 3,139,259 353,790 353,790 Notes and loans - 450,000 - - Advances to Successor Agency - 2,551,385 - - Permanent fund principal - 99,397 - 100,169 Restricted for: - Public safety - 144,095 - 233,746 Public works - 422,796 - 359,978 Capital Projects - - - 15,961,485 Debt service - 1,049,899 - 1,988,459 Retirement - 2,314,513 - 2,880,287 Transportation - 3,385,672 - 4,299,081 Air quality - 338,969 - 341,307 Street repair and maintenance - 503,925 - 186,053 Library - 341,503 - 333,567 Housing - 561,512 - 4,029,800 Assigned to: Special Programs 400,985 400,985 1,381,407 1,381,407 Unassigned 3,447,111 (1,053,394) 5,630,245 5,118,207 Total Fund Balances $ 3,864,676 $ 14,667,096 $ 7,667,082 $ 39,613,772 Total Liabilities, Deferred Inflows of Resources and Fund Balances $ 6,858,191 $ 35,591,226 $ 9,779,137 $ 47,925,468 (1) The combined fund pooled cash and investments total of $10.37 million in Fiscal Year 2014-15 increased by $8.7 million to $19.07 million
in Fiscal Year 2015-16. This increase is mainly due to the increase in General Fund revenues as well as the issuance of the Authority’s Lease Revenue Bonds (Measure R and Proposition C Street Improvements), Issue of 2016.
Source: Audited Financial Statements for Fiscal Years 2014-15 and 2015-16.
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The following table sets forth the City’s unaudited General Fund balance sheet for Fiscal Year 2016-17.
Revised Pre-Audit
Fiscal Year 2016-17(1) ASSETS Pooled Cash and Investments $ 3,333,225 Receivables: Accounts 705,234 Taxes 2,452,390 Notes and Loans 44,850 Accrued Interest 75,150 Grants 169,630 Prepaid Costs 60,263 Due from Other Funds 1,728,255 Land Held for Resale 353,790 TOTAL ASSETS $ 8,922,787 LIABILITIES Accounts Payable $ 937,759 Accrued Liabilities 928,105 Unearned Revenues 39,450 Deposits Payable 129,460 Advances from Other Funds 46,452 Total Liabilities $ 2,081,226 DEFERRED INFLOWS OF RESOURCES Unavailable Revenues $ 603,679 Total Deferred Inflows of Resources $ 603,679 FUND BALANCES $ 6,237,882
TOTAL LIABILITIES, DEFERRED INFLOWS OF RESOURCES AND FUND BALANCES $ 8,922,787
(1) Since the date of the Preliminary Official Statement, the City and its auditors have reclassified approximately $1,728,255
previously shown as Cash in the General Fund to Due from Other Funds. This reclassification was made to reflect a short-term borrowing from the General Fund by other City funds. Minor adjustments were also made to the Accounts Receivable and Notes and Loans receivable.
Source: City of Monrovia.
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The following table presents the City’s audited Retirement Fund Balance Sheet on June 30 for Fiscal Years 2011-12, 2012-13, 2013-14, 2014-15 and 2015-16, and unaudited Retirement Fund Balance Sheet for Fiscal Year 2016-17.
CITY OF MONROVIA Balance Sheet
Retirement Fund Last Six Fiscal Years
2011-12 2012-13 2013-14 2014-15 2015-16 2016-17 Assets Pooled cash and investments $ 729,854 $ 2,295,758 $ 2,081,017 $ 2,201,967 $ 2,736,804 $ 2,462,499 Receivables: Taxes 378,119 -- 77,827 112,546 143,483 145,817 Notes and Loans 2,000,000 -- -- -- -- -- Total Assets $ 3,107,973 $ 2,295,758 $ 2,158,844 $ 2,314,513 $ 2,880,287 $ 2,608,316 Liabilities Accounts payable -- $ 6,535 $ -- $ -- $ -- $ -- Deferred revenues $ 2,000,000 -- -- -- -- -- Total Liabilities $ 2,000,000 $ 6,535 $ -- $ -- $ -- $ -- Fund balances: Restricted for: Retirement $ 1,107,973 $ 2,289,223 $ 2,158,844 $ 2,314,513 $ 2,880,287 $ 2,608,316 Total Fund Balances $ 1,107,973 $ 2,289,223 $ 2,158,844 $ 2,314,513 $ 2,880,287 $ 2,608,316 Total Liabilities and Fund Balances $ 3,107,973 $ 2,295,758 $ 2,158,844 $ 2,314,513 $ 2,880,287 $ 2,608,316
Source: City of Monrovia Comprehensive Annual Financial Report for Fiscal Years 2011-12, 2012-13, 2013-14, 2014-15, and
2015-16. Unaudited actual results for Fiscal Year 2016-17.
Debt Administration
The debt obligations of the City as of June 30, 2017 (unless otherwise indicated) include:
x 2010 Taxable Pension Obligation Bonds, for $10,970,000 (to be refunded by the Bonds). x 2015 Lease Revenue Bonds (Hillside Wilderness Preserve), for $5,615,000. x 2016 Water and Sewer Revenue Bonds, for $36,370,000 (payable from water and sewer system
revenues). x 2016 Lease Revenue Bonds (Measure R and Proposition C Street Improvements), for
$13,445,000. x Lease Revenue Bonds (Library Project) Issue of 2017, in the outstanding principal amount of
$13,865,000. x Leases, for $271,322. x Compensated Absences, for $2,319,414. x Claims and Judgments, for $1,397,404. x OPEB obligations, for $14,265,963 (as of June 30, 2016, reflecting the most recent information
currently available).
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Cash Management
The City follows the practice of pooling cash and investments of all funds, except for funds required to be held by fiscal agents under provisions of bond indentures, trust agreements, or similar obligations. Interest income earned on pooled cash and investments is allocated monthly to the various funds based on monthly cash and investment balances. Interest Income from cash and investments with fiscal agents is credited directly to the related fund.
The City’s investment policy is designed to maximize the productive use of assets entrusted to its care and to invest and manage those funds wisely and prudently. Criteria for selecting investments and the order of priority are: (1) safety, (2) liquidity and (3) yield. The basic premise underlying the City’s investment policy is to ensure that money is always available when needed while at the same time reaping the highest and best return. Accordingly, deposits were either insured by federal depository insurance or collateralized.
Property Taxes
Property tax receipts of $11,658,497 provided one of the largest tax revenue sources of the City in Fiscal Year 2016-17, contributing approximately 37.8% of General Fund revenues. Property in the State which is subject to ad valorem taxes is classified as “secured” or “unsecured.” The secured classification includes property on which any property tax levied by a county becomes a lien on that property. A tax levied on unsecured property does not become a lien against the taxed unsecured property, but may become a lien on certain other property owned by the taxpayer. Every tax which becomes a lien on secured property has priority over all other liens, arising pursuant to State law, on the secured property, regardless of the time of the creation of other liens. The valuation of property is determined as of January 1 each year, and installments of taxes levied upon secured property become delinquent on the following December 10th and April 10th of the subsequent calendar year. Taxes on unsecured property are due July 1 and become delinquent August 31.
Secured and unsecured properties are entered separately on the assessment roll maintained by the county assessor. The method of collecting delinquent taxes is substantially different for the two classifications of property. The exclusive means of forcing the payment of delinquent taxes with respect to property on the secured roll is the sale of the property securing the taxes of the State for the amount of taxes that are delinquent. The taxing authority has four methods of collecting unsecured personal property taxes: (1) filing a civil action against the taxpayer; (2) filing a certificate in the office of the county clerk specifying certain facts in order to obtain a judgment lien on certain property of the taxpayer; (3) filing a certificate of delinquency for recording in the county recorder’s office in order to obtain a lien on certain property of the taxpayer; and (4) seizing and selling personal property, improvements or possessory interests belonging or taxable to the assessee.
A 10% penalty is added to delinquent taxes which have been levied with respect to property on the secured roll. In addition, beginning on the July 1 following a delinquency, interest begins accruing at the rate of 1.5% per month on the amount delinquent. Such property may thereafter be redeemed by the payment of the delinquent taxes and the 10% penalty, plus interest at the rate of 1.5% per month to the time of redemption. If taxes are unpaid for a period of five years or more, the property is deeded to the State and then is subject to sale by the county tax collector. A 10% penalty also applies to the delinquent taxes or property on the unsecured roll, and further, an additional penalty of 1.5% per month accrues with respect to such taxes beginning on the varying dates related to the tax billing date.
Legislation enacted in 1984 (Section 25 et seq. of the California Revenue and Taxation Code), provides for the supplemental assignment and taxation of property as of the occurrence of a change in ownership or completion of new construction. Previously, statutes enabled the assessment of such changes only as of the next tax lien date following the change and thus delayed the realization of increased property taxes from the new assessment for up to 14 months. Collection of taxes based on supplemental assessments occurs throughout the year. Taxes due are prorated according to the amount of time remaining in the tax year,
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with the exception of tax bills dated January 1 through May 31, which are calculated on the basis of the remainder of the current Fiscal Year and the full 12 months of the next Fiscal Year.
For a number of years, the State Legislature has shifted property taxes from cities, counties and special districts to the Educational Revenue Augmentation Fund (“ERAF”). In Fiscal Years 1993 and 1994, in response to serious budgetary shortfalls, the State Legislature and administration permanently redirected over $3 billion of property taxes from cities, counties, and special districts to schools and community college districts pursuant to ERAF shifts. The Fiscal Year 2005 State Budget included an additional $1.3 billion shift of property taxes from certain local agencies, including the City, in Fiscal Years 2005 and 2006.
On November 2, 2004, State voters approved Proposition 1A, which amended the State Constitution to significantly reduce the State’s authority over major local government revenue sources. Under Proposition 1A, the State may not: (i) reduce local sales tax rates or alter the method of allocating the revenue generated by such taxes; (ii) shift property taxes from local governments to schools or community colleges; (iii) change how property tax revenues are shared among local governments without two-thirds approval of both houses of the State Legislature; or (iv) decrease Vehicle License Fee revenues without providing local governments with equal replacement funding. Beginning in Fiscal Year 2009, the State may shift to schools and community colleges a limited amount of local government property tax revenue if certain conditions are met, including: (a) a proclamation by the Governor that the shift is needed due to a severe financial hardship of the State; and (b) approval of the shift by the State Legislature with a two-thirds vote of both houses. Under such a shift, the State must repay local governments for their property tax losses, with interest, within three years. Proposition 1A does allow the State to approve voluntary exchanges of local sales tax and property tax revenues among local governments within a county.
The following table sets forth the secured and unsecured assessed valuations for property in the City for the Fiscal Years 2006-07 through 2017-18.
CITY OF MONROVIA Secured and Unsecured Property Valuations
for Fiscal Years 2006-07 to 2017-18
Fiscal Year Secured Value(1) Unsecured Value Total Assessed Value
2006-07 $3,305,174,608 $180,423,637 $3,485,598,245 2007-08 3,602,182,441 183,517,705 3,785,700,146 2008-09 3,830,099,482 173,993,508 4,004,092,990 2009-10 3,854,953,049 171,908,106 4,026,861,155 2010-11 3,889,134,744 173,076,870 4,062,211,614 2011-12 3,973,102,950 156,416,613 4,129,519,563 2012-13 4,085,688,104 166,409,731 4,252,097,835 2013-14 4,205,064,699 165,151,799 4,370,216,498 2014-15 4,432,364,814 157,389,712 4,589,754,526 2015-16 4,709,539,422 153,133,303 4,862,672,725 2016-17 4,941,427,001 149,428,454 5,090,855,455 2017-18 5,218,717,527 156,177,666 5,374,895,193
(1) Includes public utility valuation. Source: Los Angeles County Auditor/Controller’s Office.
The following table sets forth property tax collections and delinquencies in the City as of June 30 for Fiscal Years 2004-05 through 2016-17, the latest period for which such information is available. The County has not adopted the Alternative Method of Distribution of Tax Levies and Collections and of Tax Sale Proceeds (known as the Teeter Plan), as provided for in Section 4701 et seq. of the Revenue and Taxation Code of the State, therefore the City’s property tax receipts are impacted by delinquencies as well as late fees and supplemental assessments.
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CITY OF MONROVIA Property Tax Levies and Collections for Fiscal Years 2004-05 to 2016-17
Fiscal Year Taxes(1) Levied for
the Fiscal Year
Collected within the Fiscal Year of the Levy
Total Current Outstanding Amount Percentage of Levy
2004-05 $4,110,770 $4,110,770 100.0% $ 0 2005-06 4,755,303 4,580,608 96.3 174,695 2006-07 5,181,404 5,173,342 99.8 8,061 2007-08 5,757,919 5,407,423 93.9 350,496 2008-09 6,258,106 5,602,232 89.5 655,874 2009-10 6,064,889 5,482,403 90.4 582,486 2010-11 5,922,673 5,477,853 92.5 444,820 2011-12 6,027,860 5,609,873 93.1 417,987 2012-13 6,031,266 5,851,552 97.0 179,714 2013-14 6,148,107 6,096,992 99.2 51,115 2014-15 6,501,077 6,389,453 98.3 111,624 2015-16 6,893,249 6,687,823 97.0 205,426 2016-17 7,198,323 6,997,335 97.2 200,988
(1) Includes 1% secured levy; does not include direct assessments or tax override. The amount presented is net of adjustments. Source: City Finance Department.
The following table sets forth the 10 largest taxpayers in the City for Fiscal Year 2017-18, the taxable assessed value and the percentage of the City’s total property tax revenues attributable to each. The information in the following table has been provided by HdL Coren & Cone. Neither the City nor the Underwriter has independently verified the information in the following table and do not guarantee its accuracy.
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27
Sales Taxes
Estimated sales tax receipts of $10,178,953 provided the second largest tax revenue source for the City in Fiscal Year 2016-17, contributing approximately 33% of General Fund revenues during Fiscal Year 2016-17. The largest sales tax-producing industries in the City include new motor vehicle dealers, sale of lumber and building materials, and auto leases. Some of the City’s largest businesses are Home Depot, BMW & Mini of Monrovia, Sierra Autocars, and Financial Services Vehicle Trust.
A sales tax is imposed on retail sales or consumption of personal property and collected and distributed by the State Board of Equalization. The basic sales tax rate is established by the State Legislature, and local overrides may be approved by voters. The current sales tax rate in the City is 9.25%. Effective October 1, 2017, the rate increased to 9.5%.
Additional information relating to sales tax receipts by the City is set forth in Appendix A.
The Retirement Tax
The City levies a special retirement tax (the “Retirement Tax”) that was approved in 1950 to fund the City’s obligations under the CalPERS Contract, which is levied on taxable and/or assessable property in the City at a rate of 0.128519 per $100 of assessed valuation (see the caption “—Tax Rate” in Appendix A). Revenues received by or payable to the City pursuant to such special retirement tax are referred to herein as the “Retirement Tax Revenues.” If or to the extent the Retirement Tax Revenues are insufficient or unavailable in any Fiscal Year to fund the Revenue Fund pursuant to the Trust Agreement for payment of interest and principal on the Bonds, the City shall make such payments from its General Fund.
Although the 1950 ballot measure approving the Retirement Tax authorizes the City to levy the Retirement Tax in an amount sufficient to provide sufficient revenues to meet all of the City’s obligations for contributions to CalPERS for all and maximum benefits provided under the Retirement Law, the maximum tax rate for the Retirement Tax was capped by Assembly Bill 377 (“AB 377”), enacted in July 1983 as Chapter 491 of Statutes of 1983 (now codified as Section 96.3 of the California Revenue and Taxation Code). AB 377 prohibits the levying of a retirement tax to pay for pension system costs in excess of the rate imposed in fiscal year 1982-83 or 1983-84, whichever is higher. The 1982-83 rate was 0.128519 per $100 of assessed valuation, which established the maximum rate of the Retirement Tax and is also the current rate of the Retirement Tax levied by the City.
Moreover, California courts have held that Proposition 13, discussed below under the heading “RISK FACTORS—Constitutional Limitation on Taxes and Expenditures,” permits additional property taxation to pay for pension plans with special tax authority approved by voters prior to July 1, 1978; provided, the imposition of such tax is limited to the funding of employee retirement benefits at a level not in excess of the retirement benefits in existence prior to July 1, 1978 (the “Pre-Proposition 13 Pension Liability”). The City engaged Bartel Associates, LLC (“Bartel”), an independent actuary, to determine the portion of the Unfunded Liability refinanced by the 2010 Bonds and the portion of the Unfunded Liability to be refinanced by the Bonds that is attributable to the City’s Pre-Proposition 13 Pension Liability. Bartel has determined that 76.8% of the pension liability refinanced with the proceeds of the 2010 Bonds and 79.0% of the Unfunded Liability refinanced with the proceeds of the Bonds constitute Pre-Proposition 13 Pension Liability under the CalPERS Contract. Thus, Retirement Tax Revenues will only be available to pay the portion of debt service on the Bonds attributable to the refunding of the 2010 Bonds and the Unfunded Liability, respectively, up to the foregoing percentages and subject to the maximum tax rate established by AB 377. The Trust Agreement provides that debt service on the Bonds will be paid from Retirement Tax Revenues to the extent such revenues are legally available for such purpose; the remainder of the debt service on the Bonds will be paid from other legally available sources, including General Fund revenues. See the captions “SECURITY AND SOURCE OF PAYMENT FOR THE BONDS—Bond Payments” and “THE CITY—Retirement Contributions—Report of Independent Actuary” herein.
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Based on the report provided by Bartel, the City has determined that the Retirement Tax being levied by the City is authorized by existing law and is not levied in amounts exceeding the pension costs of the City based on pre-Proposition 13 benefit levels. See the caption “THE CITY—Retirement Contributions—Report of Independent Actuary.”
Allocation or Retirement Tax Revenues to Successor Agency. The City established the Monrovia Redevelopment Agency (the “Agency”) in 1969 giving it broad powers to accomplish redevelopment within the City pursuant to the Community Redevelopment Law of the State of California including the financing of redevelopment projects based upon an allocation of taxes collected within the Agency’s Central Redevelopment Project, Project Area No. 1 (the “Project Area”). The Agency was dissolved by statute as of February 1, 2012 and the Successor Agency was formed to administer the wind-down of the Agency’s affairs, including payment of its outstanding debt and other obligations. Under the Redevelopment Law and the California Constitution the taxable valuation of a project area last equalized prior to adoption of a redevelopment plan for that project area is established as the “Base Year Roll,” and taxes produced by the levy of the then current rate upon the Base Year Roll is allocated among taxing agencies. Taxes produced by the levy of the then current tax rate upon any increase in assessed value over the Base Year Roll (except such portion generated by rates levied to pay voter-approved bonded indebtedness after January 1, 1989) are allocated to a redevelopment agency. Taxes collected in the Project Area attributable to the levy of the Retirement Tax on the Base Year Roll must be applied to fund Pre-Proposition 13 Pension Liability; however, such taxes attributable to the levy on the increase in assessed value over the Base Year Roll are allocated to the Successor Agency if and to the extent such amounts are needed to enable the Successor Agency to pay debt service on its outstanding bonds.
The final maturity of the Successor Agency’s outstanding bonded indebtedness is August 1, 2036, after which time the Successor Agency will no longer be entitled to receive any portion of the Retirement Tax Revenues. Further, as assessed values within the Project Area increase and more tax increment revenue is available to pay the Successor Agency’s debt service, the amount of Retirement Tax Revenues allocated to the Successor Agency to pay debt service on its bonds will decrease.
Historical Retirement Tax Revenues. The following table shows the amount of Retirement Tax revenues received by the City in Fiscal Years 2012-13 through 2015-16 as well as estimated and budgeted Retirement Tax revenues for Fiscal Years 2016-17 and 2017-18, respectively. The following table also describes the portions of the Retirement Tax revenues that were allocated to the Successor Agency in Fiscal Years 2012-13 through 2015-16, and unaudited amounts allocated to the Successor Agency in Fiscal Year 2016-17. See the captions “—The Retirement Tax—Allocation of Retirement Tax Revenues to Successor Agency” and “SECURITY AND SOURCE OF PAYMENT FOR THE BONDS—Limited Obligations.”
Historical Retirement Tax Revenues by Fiscal Year
Actual 2012-13
Actual 2013-14
Actual 2014-15
Actual 2015-16(1)
Unaudited 2016-17(1)
Retirement Tax Revenue Allocated to the City
$ 4,472,802 $ 4,706,308 $ 5,001,696 $ 5,959,026 $ 6,255,354 (1) Retirement Tax Revenues for Fiscal Years 2015-16 and 2016-17 are adjusted to account for amounts returned to the City after allocation to
the Successor Agency. See the caption “—Allocation or Retirement Tax Revenues to Successor Agency” above. Source: City of Monrovia.
29
Projected Retirement Tax Revenues. The City retains HdL Coren & Cone (“HdL”) to provide analysis of various City tax revenues, including property taxes and the Retirement Tax. The following table sets forth a projection of assessed valuation of property in the City (both inside the Project Area and outside the Project Area) and a projection of the Retirement Tax Revenues to be generated within the City (inside and outside the Project Area). HdL has assumed 5.03% growth in assessed value for Fiscal Years 2018-19 through 2022-23 and approximately 4% growth in assessed value thereafter. As described in the foregoing Historical Retirement Tax Revenues table, the Retirement Tax Revenues generated within the Project Area (derived from incremental value above the base year value set forth in the Redevelopment Plan) will be allocated to the Successor Agency if needed to pay debt service on the Successor Agency’s bonds. See the captions “—The Retirement Tax—Allocation of Retirement Tax Revenues to Successor Agency” and “SECURITY AND SOURCE OF PAYMENT FOR THE BONDS—Limited Obligations.”
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Projected Retirement Tax Revenues by Fiscal Year
(000’s Omitted)
Fiscal Year
Assessed Value (Outside Project
Area)(1)
Incremental Assessed Value (Inside Project
Area)(2)
Total Retirement Tax Revenue
(Outside Project Area)(3)
Total Retirement Tax Revenue (Inside
Project Area)(4)
Total Retirement Tax Revenue (Inside and Outside Project
Area)(5)
2017-18 $ 4,330,687 $ 1,044,209 $ 5,566 $ 1,342 $ 6,908 2018-19 4,541,643 1,103,609 5,837 1,418 7,255 2019-20 4,763,211 1,165,997 6,122 1,499 7,620 2020-21 4,995,924 1,231,524 6,421 1,583 8,003 2021-22 5,240,343 1,300,346 6,735 1,671 8,406 2022-23 5,497,055 1,372,630 7,065 1,764 8,829 2023-24 5,711,469 1,433,004 7,340 1,842 9,182 2024-25 5,934,459 1,495,792 7,627 1,922 9,549 2025-26 6,166,369 1,561,093 7,925 2,006 9,931 2026-27 6,407,555 1,629,005 8,235 2,094 10,329 2027-28 6,658,389 1,699,633 8,557 2,184 10,742 2028-29 6,919,256 1,773,087 8,893 2,279 11,171 2029-30 7,190,558 1,849,479 9,241 2,377 11,618 2030-31 7,472,711 1,928,927 9,604 2,479 12,083 2031-32 7,766,151 2,011,553 9,981 2,585 12,566 2032-33 8,071,329 2,097,483 10,373 2,696 13,069 2033-34 8,388,713 2,186,851 10,781 2,811 13,592 2034-35 8,718,793 2,279,794 11,205 2,930 14,135 2035-36 9,062,077 2,376,454 11,646 3,054 14,701 2036-37(6) 9,419,091 2,476,981 12,105 3,183 15,289 2037-38 12,371,915 -- 15,900 -- 15,900 2038-39 12,866,791 -- 16,536 -- 16,536 2039-40 13,381,463 -- 17,198 -- 17,198 2040-41 13,916,721 -- 17,886 -- 17,886 2041-42 14,473,390 -- 18,601 -- 18,601 2042-43 15,052,326 -- 19,345 -- 19,345 2043-44 15,654,419 -- 20,119 -- 20,119 2044-45 16,280,596 -- 20,924 -- 20,924 2045-46 16,931,820 -- 21,761 -- 21,761 2046-47 17,609,092 -- 22,631 -- 22,631
(1) Assessed value of property within the City but outside the Project Area plus value attributable to the applicable base year value of the Project Area,
pursuant to the Redevelopment Plan. Assessed values are actual for Fiscal Year 2017-18. Growth in assessed value for Fiscal Year 2018-19 through 2022-23 is estimated using the average annual growth in assessed value for Fiscal Years 2003-04 through 2017-18 (5.03%). Projected values for 2023-24 through 2046-47 are estimated using growth at 4% each year.
(2) Assessed value of property within the Project Area above the applicable base year value pursuant to the Redevelopment Plan. Assessed values are actual for Fiscal Year 2017-18. Growth in assessed value for Fiscal Year 2018-19 through 2022-23 is estimated using the average annual growth in assessed value for Fiscal Years 2003-04 through 2017-18 (5.03%). Projected values for 2023-24 through 2046-47 are estimated using growth at 4% each year.
(3) Retirement Tax Revenues available to the City for payment of Bonds debt service and retirement costs. Projections assume the Retirement Tax is levied at the maximum tax rate of 0.128519 per $100 of assessed valuation established by AB 377. See “THE CITY—The Retirement Tax.”
(4) All or a portion of the Retirement Tax Revenues generated within the Project Area above the Redevelopment Plan base year value may be allocated to the Successor Agency for payment of Successor Agency bonded indebtedness. In Fiscal Year 2016-17, Retirement Tax Revenues in the amount of approximately $1,281,000 were generated within the Project Area above the base year value, of which approximately $529,000 (41.3%) was allocated to the Successor Agency and approximately $752,000 (58.7%) was returned to the City. See the captions “—Allocation of Retirement Tax Revenues to Successor Agency” and “SECURITY AND SOURCE OF PAYMENT FOR THE BONDS—Limited Obligations.” The County Auditor-Controller will continue to allocate a portion of the Retirement Tax Revenues generated within the Project Area to the Successor Agency if, and to the extent, the County Auditor-Controller determines the Successor Agency needs such revenues to pay debt service on its outstanding bonds. If assessed values of property within the Project Area increase, the County Auditor-Controller is likely to reduce the amount of Retirement Tax Revenues allocated to the Successor Agency in future years. Further, when the Successor Agency’s bonds mature on August 1, 2036, the Successor Agency will no longer be eligible to receive a portion of the Retirement Tax Revenues. See footnote 6. The Projections assume the Retirement Tax is levied at the maximum tax rate of 0.128519 per $100 of assessed valuation established by AB 377. See “THE CITY—The Retirement Tax.”
(5) A portion of the Retirement Tax Revenues generated within the Project Area will be allocated to the Successor Agency if and to the extent the County Auditor-Controller determines that the Successor Agency needs such revenues to pay debt service on outstanding Successor Agency bonds. See footnote 4 and the caption “Allocation or Retirement Tax Revenues to Successor Agency” above.
(6) The final maturity date of Successor Agency Bonds is August 1, 2036. After retirement of the Successor Agency’s bonds, the Successor Agency will not be eligible to receive Retirement Tax Revenues generated within the Project Area.
Source: HdL Coren & Cone.
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Other Taxes
Estimated other taxes of $3,315,843 collected by the City in Fiscal Year 2016-17, including but not limited to, transient occupancy taxes, business licenses and franchise fees, provided approximately 10.74% of General Fund revenues during Fiscal Year 2016-17.
The City has commenced proceedings to increase the transient occupancy tax rate within the City from 10% to 12%. This proposed tax increase is expected to be placed on the ballot in calendar year 2018 and will require a majority voter approval. If the City is successful in increasing this tax rate, the City estimates that the annual amount of transient occupancy tax collected within the City will increase by approximately $400,000. The City has not incorporated this potential new revenue into any long-term revenue forecasts. See the caption “—Retirement Contributions—City Actions to Pay Unfunded Liability.”
Services
Estimated fees of $2,608,842 collected for services provided by the City in Fiscal Year 2016-17, including but not limited to fees for plan checks and other planning services, issuance of building permits, police services, paramedic services, public works projects and parks and recreation programs, provided approximately 8.5% of General Fund revenues during Fiscal Year 2016-17.
Risk Management
The City is insured for its general liability program through the California Joint Powers Insurance Authority (“Cal JPIA”). The City became a member of Cal JPIA on July 1, 2015. Coverage is in amounts up to $50 million single limit per occurrence. The City is also insured for worker’s compensation liability through Cal JPIA up to statutorily required amounts. The program will pay on behalf of the City worker’s compensation benefits for bodily injury by accident or occupational disease, including resulting death, deemed compensable under the laws of the State.
Estimates for all future liabilities have been accrued in the Worker’s Compensation and the Liability Insurance Funds. These funds also include an estimate for incurred but not reported claims. As of June 30, 2016, total estimated claims payable for worker’s compensation and general liability were $1,843,195 and $131,682, respectively.
Retirement Contributions
California Public Employees’ Retirement System.
This caption contains certain information relating to CalPERS. The information is primarily derived from information produced by CalPERS, its independent accountants and actuaries. The City has not independently verified the information provided by CalPERS and makes no representations nor expresses any opinion as to the accuracy of the information provided by CalPERS.
The comprehensive annual financial reports of CalPERS are available on its Internet website at www.calpers.ca.gov. The CalPERS website also contains CalPERS’ most recent actuarial valuation reports and other information concerning benefits and other matters. Such information is not incorporated by reference herein. The City cannot guarantee the accuracy of such information. Actuarial assessments are forward-looking statements that reflect the judgment of the fiduciaries of the pension plans, and are based upon a variety of assumptions, one or more of which may not materialize or be changed in the future. Actuarial assessments will change with the future experience of the pension plans.
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Plan Description. The City contributes to CalPERS, an agent multiple-employer public employee defined benefit pension plan. CalPERS provides retirement and disability benefits, annual cost-of-living adjustments, and death benefits to plan members and beneficiaries. CalPERS acts as a common investment and administrative agent for participating public entities within the State, including the City. Benefit provisions and all other requirements are established pursuant to State statute and City ordinance. Copies of CalPERS’ annual financial report may be obtained from its executive office located at 400 Q Street, Sacramento, California 95811, or via http://www.calpers.ca.gov.
Funding Policy. Required employer and employee contributions are determined from rates established by CalPERS based upon various actuarial assumptions, which are revised annually. The City currently funds the normal pension costs, which are determined by CalPERS using the Entry Age Normal Actuarial Cost Method, as well as an amortization of the City’s unfunded actuarial liability. For Fiscal Year 2016-17, the City’s required and actual employer contribution to CalPERS (for all funds, including the General Fund) was $7,521,732 ($3,571,582 for Miscellaneous and $3,950,150 for Safety). Such contributions were equal to the respective annual required contribution. For Fiscal Year 2016-17 the City’s CalPERS pension expenditure from the General Fund was $6,402,612. The City has budgeted $6,827,703 for Fiscal Year 2017-18.
Based on the actuarial valuation of CalPERS assets, the City’s required employer contribution to the retirement plan, including the amortization of the unfunded accrued liability, represented as a percentage of projected payroll, for Fiscal Year 2016-17 was 34.761% for non-safety members, and for sworn employees the City’s required employer contribution was 43.224% for Classic members and 13.817% for Fire sworn and 13.810% for Police sworn members subject to the California Public Employees’ Pension Reform Act of 2013 (“PEPRA”). The City made contributions to CalPERS in such amounts. For Fiscal Year 2017-18 the required employer contribution to the retirement plan, including the amortization of the unfunded accrued liability, represented as a percentage of projected payroll, is 37.059% for non-safety members, and for sworn employees the City’s required employer contribution was 49.978% for Classic members and 14.350% for Fire sworn and 14.339% for Police sworn members subject to PEPRA. Based on the 2017 CalPERS actuarial valuation reports for the City’s plans, the Fiscal Year 2018-19 required employer contribution, including the amortization of the unfunded accrued liability represented as a percentage of projected payroll, is 40.277% for non-safety members, and for sworn employees the City’s required employer contribution was 59.328% for Classic members and 14.356% for Fire sworn and 14.169% for Police sworn members subject to PEPRA.
The required employer contribution for Fiscal Year 2018-19 was determined as part of the June 30, 2016, actuarial valuation using the entry age actuarial cost method. The actuarial assumptions for the June 30, 2016 valuation included: (a) 7.375% investment rate of return (net of administrative expenses), (b) projected annual salary increases that vary from 3.2% to 12.2% for non-safety employees, 3.7% to 15.0% for police employees, and 3.4% to 20.0% for fire employees, depending on age, service, and type of employment, and (c) 2.75% inflation component.
The required employer contribution for Fiscal Years 2016-17 and 2017-18 were determined as part of the June 30, 2014 and June 30, 2015 actuarial valuations, respectively, using the entry age actuarial cost method. The actuarial assumptions for such valuations included: (a) 7.5% investment rate of return (net of administrative expenses), (b) projected annual salary increases that vary from 3.2% to 12.2% for non-safety employees, 3.7% to 15.0% for police employees, and 3.4% to 20.0% for fire employees, depending on age, service, and type of employment, and (c) 2.75% inflation component.
Subsequent to the June 30, 2012 actuarial valuation, CalPERS made changes to actuarial assumptions and methods. These changes include: moving from using smoothing of the market value of assets to obtain the actuarial value of assets to direct smoothing of employer contribution rates; increased life expectancy; changes to retirement ages (earlier for some groups and later for others); lower rates of disability retirement; and other changes.
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Commencing with the June 30, 2013, valuation, all new gains or losses are tracked and amortized over a fixed 30-year period with a 5 year ramp up at the beginning and a 5 year ramp down at the end of the amortization period. All changes in liability due to plan amendments (other than golden handshakes), changes in actuarial assumptions, or changes in actuarial methodology are amortized separately over a 20-year period with a 5 year ramp up at the beginning and a 5 year ramp down at the end of the amortization period. Changes in unfunded accrued liability due to a golden handshake will be amortized over a period of 5 years.
AB 340, Public Employee Pension Reform Act of 2013 (PEPRA). On September 12, 2012, the California Governor signed AB 340, which implements pension reform in California. Effective January 1, 2013, AB 340: (i) requires public retirement systems and their participating employers to share equally with employees the normal cost rate for such retirement systems; (ii) prohibits employers from paying employer-paid member contributions to such retirement systems for employees hired after January 1, 2013; (iii) establishes a compulsory maximum non-safety benefit formula of 2.5% at age 67; (iv) defines final compensation as the highest average annual pensionable compensation earned during a 36-month period; and (v) caps pensionable income at $118,775 ($142,530 for employees not enrolled in Social Security) subject to Consumer Price Index increases for calendar year 2017. Other provisions reduce the risk of the City incurring additional unfunded liabilities, including prohibiting retroactive benefits increases, generally prohibiting contribution holidays, and prohibiting purchases of additional non-qualified service credit.
CalPERS Plan Actuarial Methods. The staff actuaries at CalPERS prepare, annually, an actuarial valuation which is delivered approximately 12-15 months following the valuation date (thus, the actuarial valuation delivered to the City in August 2016 covered CalPERS’ Fiscal Year ended June 30, 2015). The actuarial valuations express the City’s required contribution rates in percentages of covered payroll, which percentages the City must contribute in the Fiscal Year immediately following the Fiscal Year in which the actuarial valuation is prepared (thus, the City’s contribution rate derived from the actuarial valuation as of June 30, 2015, which was delivered in August 2016, affects the City’s Fiscal Year 2017-18 required contribution rate). CalPERS rules require the City to implement the actuary’s recommended rates.
The annual actuarially required contribution rates consist of two components: the normal cost and the Unfunded Liability. The normal cost represents the actuarial present value of benefits that CalPERS will fund under the CalPERS plans that are attributed to the current year for active members, and the actuarial accrued liability (the “AAL”) represents the actuarial present value of benefits that CalPERS will fund for current members that are attributed to past years. The Unfunded Liability represents an estimate of the actuarial shortfall between the market value of assets on deposit at CalPERS and the present value of the benefits that CalPERS will pay under the CalPERS plans to retirees and active employees upon their retirement. The Unfunded Liability is based on several assumptions such as, among others, the expected rate of investment return, average life expectancy, average age of retirement, inflation, salary increases and occurrences of disabilities. In addition, the Unfunded Liability includes certain actuarial adjustments such as, among others, the actuarial practice of smoothing losses and gains over multiple years (which is described in more detail below). As a result, the Unfunded Liability may be considered an estimate of the unfunded actuarial present value of the benefits that CalPERS will pay under the CalPERS plans to retirees and active employees upon their retirement and not as a fixed expression of the liability the City owes to CalPERS under its CalPERS plans.
In the June 30, 2012 actuarial valuation, the CalPERS actuary estimates the actuarial value of the assets (the “Actuarial Value”) of the CalPERS plans at the end of the Fiscal Year (which assumes, among other things, that the rate of return during that Fiscal Year equaled the assumed rate of return of 7.5%). The CalPERS actuary uses a smoothing technique to determine Actuarial Value that is calculated based on certain policies. As described below, these policies and actuarial assumptions have changed significantly in recent years and are expected to change or be modified further by CalPERS in the future. Certain significant recent changes in assumptions include the following:
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1. On April 17, 2013, the CalPERS Board of Administration approved a plan: (i) to replace the current 15-year asset-smoothing policy with a 5-year direct-rate smoothing process; and (ii) to replace the current 30-year rolling amortization of unfunded liabilities with a 30-year fixed amortization period. CalPERS’ Chief Actuary has stated that the revised approach provides a single measure of funded status and unfunded liabilities, less rate volatility in extreme years, a faster path to full funding and more transparency to employers such as the City about future contribution rates. These changes are expected to accelerate the repayment of unfunded liabilities These changes will be reflected beginning with the June 30, 2014 actuarial valuation affecting contribution rates for Fiscal Year 2016 and thereafter.
2. On March 14, 2012, the CalPERS Board approved a change in the inflation assumption used in the actuarial assumptions used to determine employer contribution rates. This reduced the assumed investment return from 7.75% to 7.50%, reduced the long-term payroll growth assumption from 3.25% to 3.0%, and adjusted the inflation component of individual salary scales from 3.25% to a merit scale varying by duration of employment, an assumed annual inflation component of 3% and an annual production growth of 0.25%.
3. On February 18, 2014, the CalPERS Board approved changes to actuarial assumptions and methods based upon a recently completed experience study. These changes include: moving from using smoothing of the market value of assets to obtain the actuarial value of assets to direct smoothing of employer contribution rates; increased life expectancy; changes to retirement ages (earlier for some groups and later for others); lower rates of disability retirement; and other changes.
4. On December 21, 2016, the CalPERS Board of Administration approved an incremental lowering of the discount rate from 7.5% to 7.0% over the next three Fiscal Years. For Fiscal Years 2017-18, 2018-19, and 2019-20, the Board of Administration approved discount rates of 7.375%, 7.25% and 7.0%, respectively. While the full impact of the discount rate changes on the City is not yet clear, CalPERS expects such changes to increase average employer rates by approximately 1% to 3% of normal cost as a percent of payroll for most miscellaneous retirement plans and by approximately 2% to 5% for most safety plans. CalPERS also expects the discount rate changes to result in increased unfunded accrued liability payments for employers, and estimates that many employers will see such payments increase by up to 30% to 40%.
Benefits Provided by the City
Plan Description. All qualified permanent and probationary employees are eligible to participate in the City’s separate Cost-Sharing Safety (police and fire) and Agent Miscellaneous (all other) Plans, administered by CalPERS, which acts as a common investment and administrative agent for its participating member employers. Benefit provisions under the Plan are established by State statute and City resolution. CalPERS issues publicly available reports that include a full description of the pension plan regarding benefit provisions, assumptions and membership information that can be found on the CalPERS website.
Benefits Provided. CalPERS provides service retirement and disability benefits, annual cost of living adjustments and death benefits to plan members, who must be public employees and beneficiaries. Benefits are based on years of credited service, equal to one year of full time employment. Members with five years of total service are eligible for non-duty disability.
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The rate plan provisions and benefits in effect at June 30, 2017, are summarized as follows:
Miscellaneous Agent Plans
Miscellaneous Classic(1)
Miscellaneous PEPRA
Hire date Prior to January 1, 2013 January 1, 2013 and after Benefit formula 2.7% @ 55 2.0% @ 62 Benefit vesting schedule 5 years of service 5 years of service Benefit payments monthly for life monthly for life Retirement age minimum 50 yrs. minimum 50 yrs. Monthly benefits, as a % of eligible compensation 2% - 2.7%, 50 yrs. -
55+ yrs., respectively 1% - 2%, 50 yrs. -
62 yrs., respectively Required employee contribution rates 8.00% 6.75% Required employer contribution rates(2) 34.761% 34.761% (1) Closed to new entrants. (2) Includes Unfunded Liability reflected as a percentage of payroll.
Safety Cost-Sharing Plans
Safety Classic(1) Safety Fire PEPRA Safety Police PEPRA
Hire date Prior to January 1, 2013
January 1, 2013 and after
January 1, 2013 and after
Benefit formula 3.0% @ 50 2.7% @ 57 2.7% @ 57 Benefit vesting schedule 5 years of service 5 years of service 5 years of service Benefit payments monthly for life monthly for life monthly for life Retirement age minimum 50 yrs. minimum 50 yrs. minimum 50 yrs. Monthly benefits, as a % of eligible compensation 3.00% 2.0% - 2.7%, 50 yrs. -
62 yrs., respectively 2.0% - 2.7%, 50 yrs. - 62 yrs., respectively
Required employee contribution rates 9.00% 13.00% 13.00% Required employer contribution rates(2) 43.22% 13.817% 13.810% (1) Closed to new entrants. (2) Includes Unfunded Liability reflected as a percentage of payroll.
Funded Status; Unfunded Liability. As of the most recent actuarial study dated June 30, 2016, the Miscellaneous Plan is 60.4% funded, the Safety Plan is 69.9% funded, the PEPRA Safety Fire plan is 87.1% funded, and the PEPRA Safety Police plan is 89.6% funded.
The City had an unfunded accrued liability of $51,891,757 for its Safety Plan as of June 30, 2016, based on a market value of assets of $120,518,806 as set forth in the most recent actuarial report prepared by CalPERS. The City had an unfunded accrued liability of $29,630 for its PEPRA Safety Fire Plan as of June 30, 2016, based on a market value of assets of $199,898 as set forth in the most recent actuarial report prepared by CalPERS. The City had an unfunded accrued liability of $14,778 for its PEPRA Safety Police Plan as of June 30, 2016, based on a market value of assets of $126,968 as set forth in the most recent actuarial report prepared by CalPERS. The City had an unfunded accrued liability of $44,997,286 for its Miscellaneous Plan as of June 30, 2016, based on a market value of assets of $68,614,581 as set forth in the most recent actuarial report prepared by CalPERS.
The following table sets forth the schedule of funding progress for the City’s Miscellaneous Plan. The employer contribution rate for Fiscal Year 2017-18, which includes the Unfunded Liability reflected as a percentage of payroll, is 37.059% of annual covered payroll.
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Valuation Date
Entry Age Normal Accrued Liability
Unfunded Actuarial Accrued Liability
Market Value of Assets
Funded Ratio
Annual Covered Payroll
06/30/11 $ 89,579,789 $31,081,936 $58,497,853 65.3% $9,289,146 06/30/12 93,261,702 36,779,067 56,482,635 60.6 9,442,814 06/30/13 98,041,158 36,498,891 61,542,267 62.8 9,559,028 06/30/14 105,751,242 35,200,712 70,550,530 66.7 9,110,727 06/30/15 108,655,555 38,392,570 70,262,985 64.7 9,118,644 06/30/16 113,611,867 44,997,286 68,614,581 60.4 9,192,019
Source: CalPERS Actuarial Report Dated July 2017, as of June 30, 2016.
The following table sets forth the schedule of funding progress for the City’s Safety Plan (Classic). The City participates in the Safety Risk Pool administered by CalPERS, which is a cost-sharing multiple-employer defined benefit plan. The employer contribution rate for Fiscal Year 2017-18, which includes the Unfunded Liability reflected as a percentage of payroll, is 49.978% of annual covered payroll.
Valuation Date
Entry Age Normal Accrued Liability
Share of Pool’s Unfunded Actuarial Accrued Liability
Share of Pool’s Market Value
of Assets Funded
Ratio
Annual Covered Payroll
06/30/11 $138,507,604 $29,200,542 $109,307,062 78.9% $9,160,585 06/30/12 147,109,983 38,626,308 108,483,675 73.7 9,449,343 06/30/13 151,725,237 34,102,188 117,623,049 77.5 9,464,547 06/30/14 161,255,518 32,302,891 128,952,627 80.0 8,771,496 06/30/15 165,779,543 40,595,317 125,184,226 75.5 8,109,200 06/30/16 172,410,563 51,891,757 120,518,806 69.9 7,750,606
Source: CalPERS Actuarial Report Dated August 2017, as of June 30, 2016.
The following table sets forth the schedule of funding progress for the City’s PEPRA Safety Fire Plan. The employer contribution rate for Fiscal Year 2017-18, which includes the Unfunded Liability reflected as a percentage of payroll, is 14.356% of annual covered payroll.
Valuation Date
Accrued Liability
Share of Pool’s Unfunded Actuarial Accrued Liability
Share of Pool’s Market Value
of Assets Funded
Ratio
Annual Covered Payroll
06/30/14 $ 36,763 $ (1,560) $ 38,323 104.2% $441,371 06/30/15 107,504 8,365 99,139 92.2 457,137 06/30/16 229,528 29,630 199,898 87.1 584,715
Source: CalPERS Actuarial Report Dated August 2017, as of June 30, 2016.
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The following table sets forth the schedule of funding progress for the City’s PEPRA Safety Police Plan. The employer contribution rate for Fiscal Year 2017-18, which includes the Unfunded Liability reflected as a percentage of payroll, is 14.339% of annual covered payroll.
Valuation Date
Accrued Liability
Share of Pool’s
Unfunded Actuarial Accrued Liability
Share of Pool’s Market
Value of Assets Funded Ratio
Annual Covered Payroll
06/30/14 $ 23,983 $ (1,018) $ 25,001 104.2% $ 88,973 06/30/15 70,699 3,506 67,193 95.0 160,717 06/30/16 141,746 14,778 126,968 89.6 367,957
Source: CalPERS Actuarial Report Dated August 2017, as of June 30, 2016.
For additional information relating to the City’s CalPERS Plan, see Note 10 to the City’s financial statements set forth in Appendix E.
City Actions to Pay Unfunded Liability. The Bonds are being issued, in part, to refund the City’s Unfunded Liability with respect to its Miscellaneous Plan, Safety Plan, PEPRA Safety Fire Plan and PEPRA Safety Police Plan. On November 7, 2017, concurrently with adoption of the Supplemental Resolution approving the execution and delivery of the First Supplement and other documents relating to the Bonds, the City Council adopted a policy under which the City will pay down any accrued Unfunded Liability within a specified number of years, as follows:
x An Unfunded Liability between $0 and $5 million will be paid within 1 to 5 years;
x An Unfunded Liability between $5 and $10 million will be paid within 5 to 7 years;
x An Unfunded Liability between $10 and $15 million will be paid within 7 to 9 years; and
x An Unfunded Liability between $15 and $20 million will be paid within 9 to 10 years; and
x An Unfunded Liability of greater than $20 million will be paid within 10 to 15 years.
Concurrently with the issuance of the Bonds and adoption of the foregoing policy regarding payment of future Unfunded Liability amounts, the City is also proceeding with the following measures to address the financial challenges created by the City’s retirement obligations:
x The City is negotiating with labor groups to request that employees voluntarily pay a greater share of their CalPERS costs (see the caption “—Labor Status”).
x The City plans to establish Mello-Roos districts to finance the cost of public improvements and infrastructure in connection with anticipated new development in the City.
x The City has initiated steps to increase the transient occupancy tax rate from 10% to 12% (see the caption “—Other Taxes”).
Report of Independent Actuary. In connection with the issuance of the Bonds, the City engaged Bartel Associates, LLC (“Bartel”) to determine the portion of the 2010 Bonds debt service and the portion of the City’s Unfunded Liability attributable to the Pre-Proposition 13 Pension Liability. Bartel reviewed the application of the Retirement Tax to pay for benefits either contracted for or effective before July 1, 1978. At that time, the retirement benefit was set at 2% @ 60 for benefits under the Miscellaneous Plan, 1/2% @ 55 for
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benefits under the Police Safety Plan and 1/2% @ 55 for benefits under the Fire Safety Plan. Based on information provided by the City, Bartel evaluated the changes in pension benefits under the City’s retirement plans over time. Bartel utilized the Normal Cost method to determine the cost of benefit improvements made after July 1, 1978. This method is based on CalPERS Contract Amendment Analysis. The information suggests the best and most reasonable, long term indicator of cost is the change in Normal Cost due to the benefit improvements. By application of the Retirement Tax to pay for benefits either contracted for or effective before July 1, 1978, the estimated June 30, 2016 Unfunded Liability of the Miscellaneous Plan attributable to benefits contracted for or effective before July 1, 1978 is $38.3 million or 85.1% of total Unfunded Liability of the Miscellaneous Plan and the estimated June 30, 2016 Unfunded Liability of the Safety Plan attributable to benefits contracted for or effective before July 1, 1978 is $38.5 million or 74.2% of total Unfunded Liability of the Safety Plan. The City has determined that the Retirement Tax being levied by the City is authorized by existing law and is not levied in amounts exceeding the pension costs of the City based on pre-Proposition 13 benefit levels.
Other Post-Employment Benefits.
The City provides post-retirement health benefits to the various employee groups, which vary depending upon a retiree’s years of service and bargaining unit.
Defined Benefit Plan Description. The City of Monrovia Retiree Healthcare Plan (“Plan”) is a single-employer defined benefit healthcare plan administered by the City. The Plan provides healthcare benefits to eligible retirees and their dependents. Benefit provisions are established and may be amended through agreements and memorandums of understanding between the City, its management employees, and unions representing City employees. The Plan does not issue a financial report.
The City provides retiree healthcare benefits to employees retiring directly from the City. Medical coverage is provided through the City’s standalone healthcare program. The City reimburses retiree healthcare premiums, subject to caps which vary by bargaining unit and length of service. Because retiree premiums are based on blended active and retiree experience, an implied subsidy exists for retirees. No dental, vision or life insurance benefits are provided. The City currently pays for retiree healthcare benefits on a pay-as-you-go basis. As of January 1, 2014, plan membership consisted of 105 retirees and beneficiaries currently receiving benefits.
Funding Policy. There is no statutory requirement for the City to prefund its OPEB obligation. The City has currently chosen to pay plan benefits on a pay-as-you-go basis. There are no employee contributions. Retired Plan members and their beneficiaries pay the annual premium cost not paid by the employer. The General Fund has been used in prior years to liquidate the net OPEB obligation. A contribution of approximately $620,000 was made from the General Fund during Fiscal Year 2016-17 to cover current plan premiums.
Annual OPEB Cost and Net OPEB Obligation. The City’s annual other postemployment benefit cost (expense) is calculated based on the annual required contribution (“ARC”) of the employer. The ARC represents a level of funding that, if paid on an ongoing basis, is projected to cover the normal cost each year and amortize any unfunded actuarial liabilities (or funding excess) over a period not to exceed 30 years.
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The following table, based on the City’s actuarial valuation as of January 1, 2014, shows the components of the City’s annual OPEB cost for Fiscal Year 2015-16, the amount actually contributed to the plan, and changes in the City’s Net OPEB obligation:
Annual required contribution (ARC) $ 3,099,000 Interest on net OPEB obligation 123,210 Adjustment to ARC (602,323) Annual OPEB cost 2,619,887 Contributions made 666,942 (Decrease) increase in Net OPEB obligation 1,952,945 Net OPEB obligation (asset) – beginning of year 12,313,018 Net OPEB obligation (asset) – end of year $ 14,265,963
Source: Audited Financial Statements for Fiscal Year 2015-16, Note 12.
The City’s annual OPEB cost, the percentage of annual OPEB cost contributed to the plan, and the net OPEB obligation for Fiscal Years 2013-14 through 2015-16 are as follows (dollar amounts in thousands):
Fiscal Year End
Annual OPEB Cost
Actual Contribution (Net of Adjustments)
Percentage of Annual OPEB Cost Contributed
Net OPEB Obligation (Asset)
6/30/2014 $2,543 $513 20.17% $10,408 6/30/2015 2,458 554 22.54 12,313 6/30/2016 2,620 667 25.46 14,265
Source: Audited Financial Statements for Fiscal Year 2015-16, Note 12.
Funded Status and Funding Progress. Actuarial valuations of an ongoing plan involve estimates of the value of reported amounts and assumptions about the possibility of occurrence of events far into the future. Examples include assumptions about future employment, mortality, and healthcare cost trends. Amounts determined regarding the funded status of the plan and the annual required contributions of the City are subject to continual revision as actual results are compared with past expectations and new estimates are made about the future.
The schedule of funding progress below presents multiyear trend information about whether the actuarial value of plan assets is increasing or decreasing over time relative to the actuarial accrued liabilities for benefits. An actuarial is received every three years.
Schedule of Funding Progress for OPEB (Amounts in Thousands)
Valuation Type
Actuarial Valuation
Date
Actuarial Accrued Liability
Unfunded Actuarial Accrued Liability
Funded Ratio
Covered Payroll
UAAL as a % of
Covered Payroll
Interest Rate
Salary Scale
Actual 1/1/2010 $28,308 $28,308 0.0% $16,464 171.9% 4.25% 13.40% Actual 1/1/2012 32,318 32,318 0.0 17,192 188.0 4.00 15.10 Actual 1/1/2014 35,109 35,109 0.0 16,504 212.7 4.00 17.30
Source: Audited Financial Statements for Fiscal Year 2015-16, Note 12.
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Actuarial Methods and Assumptions. Projections of benefits for financial reporting purposes are based on the substantive plan (the plan as understood by the employer and the plan members) and include the types of benefits provided at the time of each valuation and the historical pattern of sharing of benefit costs between the employer and plan members to that point. Actuarial valuations of an ongoing plan involve estimates of the value of reported amounts and assumptions about the probability of occurrence of events far into the future, including but not limited to assumptions about future employment, mortality, and the healthcare cost trends. Amounts determined regarding the funded status of the plan and the annual required contributions of the employer are subject to continual revision. Projections of benefits for financial reporting purposes are based on the substantive plan (the plan as understood by the employer and plan members) and include the types of benefits provided at the time of each valuation and the historical pattern of sharing of benefit costs between the employer and plan members at that point. The actuarial methods and assumptions used include techniques that are designed to reduce the effects of short-term volatility in actuarial accrued liabilities and the actuarial value of assets consistent with the long-term perspective of the calculations.
Defined Contribution Plan Description. The second City of Monrovia Retiree Healthcare Plan is a single employer defined contribution retiree healthcare trust (“Trust”). The Trust provides healthcare benefits to eligible retirees and their dependents. Benefit provisions are established and may be amended through agreements and memorandums of understanding between the City, its management employees, and unions representing City employees. Currently, management employees, the general employees association, and the firefighter’s association participate in this plan. The plan was effective February 1, 2009. All new employees starting after this date are automatically enrolled in the Trust. Current employees, at the plan inception date, had the option of enrolling in the new plan. The Trust does not issue a financial report.
All employees in the Trust have contributions withheld from their biweekly paycheck and deposited into a trust account. The City contributes a predefined amount based on the employee’s position title. A third party trust account is held with Nationwide Retirement Solutions to account for the funds. The funds are invested with the assistance of Wells Fargo Insurance Services Investment Advisors, Inc. As of June 30, 2017, the plan assets were $1,162,190.
Public Agency Retirement System (Defined Contribution Retirement Plan).
The City contributed to the California Public Agency Retirement System (“PARS”), an agent multiple-employer public employee retirement system that acts as a common investment and administrative agent for participating public entities within the State of California. Benefit provisions and all other requirements are established by state statute and City ordinance.
PARS is a defined contribution retirement plan that provides retirement benefits in return for services rendered, provides an individual account for each participant, and specifies how contributions to the individual’s account are to be determined instead of specifying the amount of benefits the individual is to receive.
Under a defined contribution pension plan, the benefits a participant will receive depend solely on the amount contributed to the participant’s account, the returns earned on investments of those contributions, and forfeitures of other participant’s benefits that may be allocated to such participant’s account.
As established by the plan, all eligible employees of the City will become a participant in the plan from the date they are hired. An eligible employee is any employee who, at any time during which the employer maintains this plan, is not accruing a benefit under the Public Employees Retirement System. See “—California Public Employees’ Retirement System,” above.
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Contributions made by an employee and the employer vest immediately. As determined by the plan, each employee must contribute 3.75% of gross earnings to the plan. The City contributes an additional 3.75% of gross earnings. The contributions requirements of plan members and the City are established and may be amended by PARS.
During Fiscal Year 2016-17, the City contributed $40,281 (3.75% of current year covered payroll) and employees contributed $40,281 (3.75% of current year covered payroll). The total covered payroll of employees participating in the plan for Fiscal Year 2016-17, was $1,074,108.
No changes in plan provisions occurred during the year. The plan held no securities of the City or other related parties during or at the close of the Fiscal Year.
Labor Status
City employees are represented by three labor unions: Fire Sworn, Police Sworn and Non-Sworn, and General Employees. Each group operates under annual contracts and each group is currently under contract for Fiscal Year 2017-18 through 2021-22.
Although the City entered into memoranda of understanding with each of the labor unions in the spring of 2017, the labor unions and the City have agreed to have employees voluntarily pay an increased portion of the annual CalPERS contributions. The City anticipates that such voluntary employee contributions could result in cost savings to the City of approximately up to $300,000 per year.
STATE OF CALIFORNIA BUDGET INFORMATION
State Budget
The following information concerning the State’s budgets for fiscal year 2016-17 and fiscal year 2017-18 has been obtained from publicly available information that the City believes to be reliable; however, the City and the Underwriter take no responsibility as to the accuracy or completeness thereof and have not independently verified such information. Information about the State budget is regularly available at various State-maintained websites. Text of proposed and adopted budgets may be found at the website of the State Department of Finance (the “DOF”), http://www.dof.ca.gov, under the heading “California Budget.” An impartial analysis of the budget is posted by the Legislative Analyst’s Office (the “LAO”) at http://www.lao.ca.gov. In addition, various State official statements, many of which contain a summary of the current and past State budgets and the impact of those budgets on cities in the State, may be found at the website of the State Treasurer, http://www.treasurer.ca.gov. The information referred to is prepared by the respective State agency maintaining each website and not by the City or the Underwriter, and the City and the Underwriter take no responsibility for the continued accuracy of these Internet addresses or for the accuracy, completeness or timeliness of information posted there, and such information is not incorporated herein by these references.
2016-17 State Budget. On June 27, 2016, the Governor signed into law the State budget for fiscal year 2016-17 (the “2016-17 Budget”). The following information is drawn from the Department of Finance’s summary of the 2016-17 Budget and the LAO’s review of the 2016-17 Budget.
The 2016-17 Budget projected, for fiscal year 2015-16, total general fund revenues and transfers of $117.0 billion and total expenditures of $115.6 billion. The State was projected to end fiscal year 2015-16 with total available reserves of $7.3 billion, including $3.9 billion in the traditional general fund reserve and $3.4 billion in the Budget Stabilization Account (the “BSA”), the State’s basic reserve account. For fiscal year 2016-17, the 2016-17 Budget projected a growth in State general fund revenues driven primarily by total general fund revenues of $120.3 billion and authorized expenditures of $122.5 billion. The State was projected
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to end the fiscal year 2016-17 with total available reserves of $8.5 billion, including $1.8 billion in the traditional general fund reserve and $6.7 billion in the BSA.
As a result of higher general fund revenue estimates for fiscal years 2015-16 and 2016-17, and after accounting for expenditures that are controlled by State Constitutional funding requirements such as Proposition 2 and Proposition 98, the 2016-17 Budget allocated over $6 billion in discretionary funding for various purposes. These included: (i) additional deposits of $2 billion to the BSA and $600 million to the State’s discretionary budget reserve fund; (ii) approximately $2.9 billion in one-time funding for infrastructure, affordable housing, public safety and other purposes; and (iii) $700 million in on-going funding commitments for higher education (the California State University and the University of California systems), corrections and rehabilitation and State courts.
As required by Proposition 2, the 2016-17 Budget applied $1.3 billion towards the repayment of existing State liabilities, including loans from special funds, State and University of California pension and retiree health benefits and settle-up payments to K-14 school districts resulting from an underfunding of the Proposition 98 minimum funding guarantee in a prior fiscal year. With respect to education funding, the 2016-17 Budget set the Proposition 98 minimum funding guarantee at $71.9 billion, an increase of $2.8 billion over the revised level from the prior fiscal year.
For additional information regarding the 2016-17 Budget, see the DOF website at www.dof.ca.gov and the LAO’s website at www.lao.ca.gov. The information presented on such websites is not incorporated herein by reference.
2017-18 State Budget. On June 27, 2017, the Governor signed into law the State budget for fiscal year 2017-18 (the “2017-18 Budget”). The following information is drawn from the Department of Finance’s summary of the 2017-18 Budget.
The 2017-18 Budget projects, for fiscal year 2016-17, total general fund revenues and transfers of approximately $118.5 billion and total expenditures of approximately $121.4 billion, such revenues and expenditures being approximately $1.8 billion and $1.1 billion lower than what was included in the 2016-17 Budget, respectively. The State is projected to end fiscal year 2016-17 with total available reserves of approximately $7.4 billion, including $642 million in the traditional general fund reserve and $6.7 billion in the BSA. For fiscal year 2017-18, the 2017-18 Budget projects a growth in State general fund revenues driven primarily by total general fund revenues of approximately $125.9 billion and authorizes expenditures of approximately $125.1 billion. The State is projected to end the fiscal year 2017-18 with total available reserves of approximately $9.9 billion, including $1.4 billion in the traditional general fund reserve and $8.5 billion in the BSA.
After accounting for expenditures that are controlled by State Constitutional funding requirements such as Proposition 2 and Proposition 98, the 2017-18 Budget allocates discretionary funding for various purposes, including additional deposits of approximately $1.8 billion to the BSA and $800 million to the State’s discretionary budget reserve fund. Further, the 2017-18 Budget includes a $6 billion supplemental payment to CalPERS through a loan from the Surplus Money Investment Fund, which is projected to save $11 billion in pension costs over the next two decades. The General Fund share of repaying such loan will come from Proposition 2 revenues dedicated to reducing debts and long-term liabilities. Other discretionary allocations include one-time funding for infrastructure, affordable housing, public safety and other purposes.
As required by Proposition 2, the 2017-18 Budget applies $1.8 billion towards the repayment of existing State liabilities, including loans from special funds, State and University of California pension and retiree health benefits and settle-up payments to K-14 school districts resulting from an underfunding of the Proposition 98 minimum funding guarantee in a prior fiscal year. With respect to education funding, the 2017-18 Budget sets the Proposition 98 minimum funding guarantee at $74.5 billion, an increase of $3.1 billion over the revised level from the prior fiscal year.
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For additional information regarding the 2017-18 Budget, see the State Department of Finance website at www.dof.ca.gov and the LAO’s website at www.lao.ca.gov. However, the information presented on such websites is not incorporated herein by reference.
Potential Impact of State Financial Condition on the City
The State experienced significant financial stress during the last economic recession, with budget shortfalls in the several billions of dollars. There can be no assurance that, in the case of similar financial stress in the future, the State will not significantly reduce revenues to local governments (including the City) or shift financial responsibility for programs to local governments as part of its efforts to address the State financial difficulties. Although the State is not a significant source of City revenues, no prediction can be made by the City as to what measures the State would adopt to respond to potential future financial difficulties. There can be no assurance that State actions to respond to State financial difficulties will not adversely affect the financial condition of the City.
Future State Budgets
No prediction can be made by the City as to whether the State will continue to encounter budgetary problems in future years, and if it were to do so, it is not clear what measures would be taken by the State to balance its budget, as required by law. In addition, the City cannot predict the final outcome of future State budget negotiations, the impact that such budgets will have on City finances and operations or what actions will be taken in the future by the State Legislature and the Governor to deal with changing State revenues and expenditures. There can be no assurance that actions taken by the State to address its financial condition will not materially adversely affect the financial condition of the City. Current and future State budgets will be affected by national and State economic conditions and other factors.
RISK FACTORS
The purchase of the Bonds involves investment risk. If a risk factor materializes to a sufficient degree, it could delay or prevent payment of principal of and/or interest on the Bonds. Such risk factors include, but are not limited to, the following matters and should be considered, along with other information in this Official Statement, by potential investors. The order in which the following matters are presented does not reflect the relative importance of such risks.
Future Financial Condition
No representation is made as to the future financial condition of the City. Payment of the debt service payments on the Bonds is a general fund obligation of the City and the ability of the City to make debt service payments on the Bonds may be adversely affected by its financial condition as of any particular time.
Limited Obligation of the City
The obligation of the City to pay debt service on the Bonds does not constitute an obligation of the City for which the City is obligated to levy or pledge any form of taxation or for which the City has levied or pledged any form of taxation other than the Retirement Tax. The obligation of the City to pay debt service payments on the Bonds does not constitute a debt or indebtedness of the City, the State of California or any of its political subdivisions, in contravention of any constitutional or statutory debt limitation or restriction.
Notwithstanding the above, the City has covenanted in the Trust Agreement that it shall apply proceeds of the Retirement Tax, to the extent legally available, first to pay debt service on the Bonds; provided, however, because the Retirement Tax may be repealed by a vote of the people no representation or assurance can be made regarding its availability in the future; moreover, the Retirement Tax is not expected to generate amounts sufficient to make all required debt service payments under the Trust Agreement.
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Furthermore, no representation is made as to the future financial condition of the City, or as to the City’s ability or intent to make up any shortfall in the Retirement Tax.
Possible Dilution of Retirement Tax Revenues
As relates to debt service on the Bonds payable from Retirement Tax Revenues, a portion of debt service on the Bonds, and any Additional Bonds payable on a parity therewith, is payable as a Pre-Proposition 13 Pension Liability under the CalPERS Contract. The City engaged Bartel Associates, LLC (“Bartel”), an independent actuary, to determine the portion of the 2010 Bonds and Unfunded Liability being refinanced by the Bonds that is attributable to Pre-Proposition 13 Pension Liability. Bartel determined that 76.8% of the Unfunded Liability refinanced with the proceeds of the 2010 Bonds and 79.0% of the Unfunded Liability refinanced with the proceeds of the Bonds constitute Pre-Proposition 13 Pension Liability under the CalPERS Contract. Unless changes in applicable law occur subsequent to the issuance date of the Bonds, Retirement Tax Revenues will only be available to pay the portion of debt service on the Bonds attributable to the refunding of the 2010 Bonds and Unfunded Liability up to these percentages and, in any event, subject to the maximum tax rate established by AB 377. See “THE CITY—The Retirement Tax” for additional information regarding the maximum tax rate established by AB 377. The Trust Agreement provides that debt service on the Bonds and any Additional Bonds will be paid from Retirement Tax Revenues to the extent such revenues are legally available for such purpose; the remainder of the debt service on the Bonds will be paid from other legally available sources, including General Fund revenues.
If Additional Bonds are issued under the Trust Agreement, the amount of Retirement Tax Revenues available to pay debt service on the Bonds and such Additional Bonds will increase only if and to the extent that the proceeds of such Additional Bonds fund Pre-Proposition 13 Pension Liability under the CalPERS Contract. In any event, the Retirement Tax Revenues are subject to the maximum tax rate established by AB 377. If the aggregate portion of debt service on the Bonds and any Additional Bonds payable as a Pre-Proposition 13 Pension Liability exceeds the Retirement Tax Revenues that can be generated at the maximum tax rate established by AB 377, the issuance of Additional Bonds may dilute the Retirement Tax Revenues available to pay debt service on the Bonds and the Additional Bonds. See “SECURITY AND SOURCE OF PAYMENT FOR THE BONDS—Bond Payments” and “—Additional Bonds” herein.
Additional General Fund Obligations of the City
The City has a significant amount of obligations payable from its General Fund, including but not limited to debt obligations, pension obligations, lease obligations and other obligations related to post employment retirement benefits as well as certain other liabilities. The Trust Agreement does not prohibit the City from incurring additional obligations payable from the City’s General Fund.
Natural Disasters
The occurrence of any natural disaster in the City, including, without limitation, fire, earthquake or flood, could have an adverse material impact on the economy within the City, its General Fund and the revenues available for the payment of the Bonds. According to the Safety Element of the City’s General Plan, adopted June 12, 2002, three prominent faults are in close proximity to the City: the Sierra Madre Fault Zone (including the Duarte Fault), the San Andreas Fault, and the Raymond Hill Fault.
Earthquakes are considered a threat to the City due to the highly active seismic region and the proximity of fault zones, which could influence the entire southern coastal portion of the State. However, no major earthquake has caused substantial damage to the City.
An earthquake along one of the faults in the vicinity, either known or unknown, could cause a number of casualties and extensive property damage. The effects of such a quake could be aggravated by aftershocks and secondary effects such as fires, landslides, dam failure, liquefaction and other threats to public health,
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safety and welfare. The potential direct and indirect consequences of a major earthquake could easily exceed the resources of the City.
In the event that one or more of such conditions occur, such occurrence could cause damages of varying seriousness to the land and improvements and the value of property in the City could be diminished in the aftermath of such events. A substantial reduction of the value of such properties could affect the ability or willingness of the property owners to pay property taxes.
Hazardous Substances
An additional environmental condition that may result in the reduction in the assessed value of property, and therefore property tax revenue available to make debt service payments on the Bonds, would be the discovery of a hazardous substance that would limit the beneficial use of taxable property within the City. In general, the owners and operators of a property may be required by law to remedy conditions of the property relating to releases or threatened releases of hazardous substances. The Federal Comprehensive Environmental Response, Compensation and Liability Act of 1980, sometimes referred to as “CERCLA” or the “Superfund Act,” is the most well-known and widely applicable of these laws, but State laws with regard to hazardous substances are also stringent and similar in effect. Under many of these laws, the owner or operator may be required to remedy a hazardous substance condition of property whether or not the owner or operator has anything to do with creating or handling the hazardous substance. The effect, therefore, should any of the property within the City be affected by a hazardous substance, could be to reduce the marketability and value of such property by the costs of remedying the condition, because the purchaser, upon becoming owner, will become obligated to remedy the condition just as is the seller.
Hazardous substance liabilities may arise in the future with respect to any of the property in the City resulting from the existence, currently, of a substance presently classified as hazardous but which has not been released or the release of which is not presently threatened, or may arise in the future resulting from the existence, currently, on the parcel of a substance not presently classified as hazardous but which may in the future be so classified. Additionally, such liabilities may arise from the method of handling such substance. These possibilities could significantly affect the value of a parcel and could result in substantial delays in completing planned development on parcels that are currently undeveloped.
Bankruptcy of the City
The enforceability of the rights and remedies of the Holders of the Bonds are subject to a number of limitations, including bankruptcy, moratorium, insolvency or other laws affecting creditor’s rights or remedies and is subject to general principles of equity (regardless of whether such enforceability is considered in equity or at law), to the exercise of judicial discretion in appropriate cases and to the limitations on legal remedies against governmental entities in the State of California
In addition, the rights and remedies of the Holders of the Bonds may be limited by and are subject to the provisions of federal bankruptcy laws and to other laws or equitable principles that may affect the enforcement of creditors’ rights. The City is a governmental unit and therefore cannot be the subject of an involuntary case under the United States Bankruptcy Code (the “Bankruptcy Code”). However, the City is a municipality and therefore may seek voluntary protection from its creditors pursuant to Chapter 9 of the Bankruptcy Code for purposes of adjusting its debts. Should the City file for bankruptcy, there could be adverse effects on the Holders of the Bonds.
If the City is in bankruptcy, the parties (including the Trustee and the Holders of the Bonds) may be prohibited from taking any action to collect any amount from the City or to enforce any obligation of the City, unless the permission of the bankruptcy court is obtained. These restrictions may also prevent the Trustee from making payments to the Holders of the Bonds from funds in the Trustee’s possession.
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The Bonds are not secured by any property other than the funds that the City has actually deposited with the Trustee, and the City only obligated to deposit funds with the Trustee twice each year, on each April 15 and October 16, beginning April 15, 2018. The Bonds are not secured by any funds held by the City. If the City is in bankruptcy, it may not be obligated to make any further deposits with the Trustee. As a result, the Bonds may be treated as unsecured obligations of the City in the bankruptcy case. Under such circumstances, the Holders of the Bonds could suffer substantial losses.
The City may be able, without the consent and over the objection of the Trustee or the Holders of the Bonds, to alter the priority, interest rate, payment terms, maturity dates, payment sources, covenants, and other terms or provisions of the Trust Agreement and the Bonds, as long as the bankruptcy court determines that the alterations are fair and equitable.
There may be delays in payments on the Bonds while the court considers any of these issues. There may be other possible effects of a bankruptcy of the City that could result in delays or reductions in payments on the Bonds, or result in losses to the Holders of the Bonds. Regardless of any specific adverse determinations in a City bankruptcy proceeding, the fact of a City bankruptcy proceeding could have an adverse effect on the liquidity and value of the Bonds.
Recent bankruptcies in the City of Stockton, the City of San Bernardino and the City of Detroit have brought scrutiny to pension obligation securities. Specifically, in the Stockton bankruptcy the Court found that CalPERS was an unsecured creditor of the city with a claim on parity with those of other unsecured creditors. Additionally, in the San Bernardino bankruptcy, the Court held that in the event of a municipal bankruptcy, payments on pension obligation bonds, such as the Bonds, were unsecured obligations and not entitled to the same priority of payments made to CalPERS. A variety of events, including, but not limited to, additional rulings adverse to the interests of bond owners in the Stockton, San Bernardino and Detroit bankruptcy cases or additional municipal bankruptcies, could prevent or materially adversely affect the rights of Beneficial Owners to receive payments on the Bonds in the event the City files for bankruptcy. Accordingly, in the event of bankruptcy, Beneficial Owners may not recover the full amount of principal and interest due on the Bonds.
The opinion to be delivered by Bond Counsel concurrently with the execution and delivery of the Bonds will be subject to various limitations on remedies including those related to bankruptcy and the various other legal opinions to be delivered concurrently with the issuance of the Bonds will be similarly qualified. See Appendix C. In the event that the City fails to comply with its covenants under the Trust Agreement or fails to pay debt service payments on the Bonds, there can be no assurance of the availability of remedies adequate to protect the interest of the Beneficial Owners of the Bonds.
Legislative Changes
Legislative action could have an adverse effect on the City’s revenues. For example, the method of apportioning Motor Vehicle License Fees among the State’s cities and counties is established by statute and could be amended by future legislation. See “THE CITY.” Although the City is not aware of any proposal to amend the applicable statute, it can provide no assurance that such legislation, or other legislation which could reduce revenues, will not be enacted in the future.
Constitutional Limitation on Taxes and Expenditures
Article XIIIA of the State Constitution. On June 6, 1978, State voters approved an amendment (commonly known as both Proposition 13 and the Jarvis-Gann Initiative) to the State Constitution. The amendment, which added Article XIIIA to the State Constitution, among other things affects the valuation of real property for the purpose of taxation in that it defines the full cash property value to mean “the county assessor’s valuation of real property as shown on the Fiscal Year 1975-76 tax bill under ‘full cash value’, or thereafter, the appraised value of real property newly constructed, or when a change in ownership has occurred after the 1975 assessment.” The full cash value may be adjusted annually to reflect inflation at a rate not to
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exceed 2% per year, or a reduction in the consumer price index or comparable local data at a rate not to exceed 2% per year, or reduced in the event of declining property value caused by damage, destruction or other factors including a general economic downturn. The amendment further limits the amount of any ad valorem tax on real property to 1% of the full cash value, except that additional taxes may be levied to pay debt service on indebtedness approved by the voters prior to December 1, 1978, and bonded indebtedness for the acquisition or improvement of real property approved on or after December 1, 1978 by two-thirds of the votes cast by the voters voting on the proposition (55% in the case of certain school facilities). Property taxes subject to Proposition 13 are a significant source of revenues to the City’s General Fund. See the caption “THE CITY.”
Legislation enacted by the State Legislature to implement Article XIIIA provides that all taxable property is shown at full assessed value as described above. Tax rates for voter approved bonded indebtedness are also applied to 100% of assessed value.
Future assessed valuation growth allowed under Article XIIIA (new construction, change of ownership, 2% annual value growth) is allocated on the basis of “situs” among the jurisdictions that serve the tax rate area within which the growth occurs. Local agencies and school districts share the growth of “base” revenue from the tax rate area. Each year’s growth allocation becomes part of each agency’s allocation the following year. Article XIIIA effectively prohibits the levying of any other ad valorem property tax above the 1% limit except for taxes to support indebtedness approved by the voters as described above.
Article XIIIA has subsequently been amended to permit reduction of the “full cash value” base in the event of declining property values caused by damage, destruction or other factors, and to provide that there would be no increase in the “full cash value” base in the event of reconstruction of property damaged or destroyed in a disaster and in certain other limited circumstances.
Article XIIIB of the State Constitution. At the Statewide special election on November 6, 1979, the voters approved an initiative entitled “Limitation on Government Appropriations,” which added Article XIIIB to the State Constitution. Under Article XIIIB, State and local government entities have an annual “appropriations limit” which limits the ability to spend certain moneys which are called “appropriations subject to limitation” (consisting of tax revenues and investment proceeds thereof, certain State subventions and regulatory license fees, user charges and user fees to the extent that the proceeds thereof exceed the costs of providing such services, together called “proceeds of taxes,” and certain other funds) in an amount higher than the “appropriations limit.” Article XIIIB does not affect the appropriation of moneys which are excluded from the definition of “appropriations limit,” including debt service on indebtedness existing or authorized as of October 1, 1979, or bonded indebtedness subsequently approved by the voters. In general terms, the “appropriations limit” is to be based on certain 1978-79 expenditures and is to be adjusted annually to reflect changes in the consumer price index, population and services provided by these entities. Among other provisions of Article XIIIB, if those entities’ revenues in any year exceed the amounts permitted to be spent, the excess would have to be returned by revising tax rates or fee schedules over the subsequent two years.
The City’s appropriations have never exceeded the limitation on appropriations under Article XIIIB of the State Constitution.
Proposition 62
A statutory initiative (“Proposition 62”) was adopted by the voters of the State at the November 4, 1986 general election which: (a) requires that any tax for general governmental purposes imposed by local governmental entities be approved by resolution or ordinance adopted by two-thirds vote of the governmental agency’s legislative body and by a majority of the electorate of the governmental entity; (b) requires that any special tax (defined as taxes levied for other than general governmental purposes) imposed by a local governmental entity be approved by a two-thirds vote of the voters within the jurisdiction; (c) restricts the use of revenues from a special tax to the purposes or for the service for which the special tax is imposed; (d) prohibits the imposition of ad valorem taxes on real property by local governmental entities except as
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permitted by Article XIIIA; (e) prohibits the imposition of transaction taxes and sales taxes on the sale of real property by local governmental entities; and (f) requires that any tax imposed by a local governmental entity on or after August 1, 1985 be ratified by a majority vote of the electorate within two years of the adoption of the initiative or be terminated by November 15, 1988. The requirements imposed by Proposition 62 were upheld by the State Supreme Court in Santa Clara County Local Transportation Authority v. Guardino, 11 Cal.4th 220; 45 Cal.Rptr.2d 207 (1995).
Proposition 62 applies to the imposition of any taxes or the effecting of any tax increases after its enactment in 1986, but the requirements of Proposition 62 are largely subsumed by the requirements of Proposition 218 for the imposition of any taxes or the effecting of any tax increases after November 5, 1996. See the caption “—Proposition 218” below.
Proposition 218
On November 5, 1996, State voters approved Proposition 218, an initiative measure entitled the “Right to Vote on Taxes Act.” Proposition 218 added Articles XIIIC and XIIID to the State Constitution, imposing certain vote requirements and other limitations on the imposition of new or increased taxes, assessments and property-related fees and charges. Proposition 218 states that all taxes imposed by local governments are deemed to be either general taxes or special taxes. Special purpose districts, including school districts, have no power to levy general taxes. No local government may impose, extend or increase any general tax unless and until such tax is submitted to the electorate and approved by a majority vote. No local government may impose, extend or increase any special tax unless and until such tax is submitted to the electorate and approved by a two-thirds vote.
Proposition 218 also provides that no tax, assessment, fee or charge may be assessed by any agency upon any parcel of property or upon any person as an incident of property ownership except: (a) the ad valorem property tax imposed pursuant to Articles XIII and XIIIA of the State Constitution; (b) any special tax receiving a two-thirds vote pursuant to the State Constitution; and (c) assessments, fees and charges for property related services as provided in Proposition 218. Proposition 218 then goes on to add voter requirements for assessments and fees and charges imposed as an incident of property ownership, other than fees and charges for sewer, water, and refuse collection services. In addition, all assessments and fees and charges imposed as an incident of property ownership, including sewer, water, and refuse collection services, are subjected to various additional procedures, such as hearings and stricter and more individualized benefit requirements and findings. The effect of such new provisions will presumably be to increase the difficulty a local agency will have in imposing, increasing or extending such assessments, fees and charges.
Proposition 218 also extended the initiative power to reducing or repealing any local taxes, assessments, fees and charges. This extension of the initiative power is not limited to taxes imposed on or after November 6, 1996, the effective date of Proposition 218, and could result in retroactive repeal or reduction in any existing taxes, assessments, fees and charges, subject to overriding federal constitutional principles relating to the impairments of contracts. Legislation implementing Proposition 218 provides that the initiative power provided for in Proposition 218 “shall not be construed to mean that any owner or beneficial owner of a municipal security, purchased before or after (the effective date of Proposition 218) assumes the risk of, or in any way consents to, any action by initiative measure that constitutes an impairment of contractual rights” protected by the United States Constitution. However, no assurance can be given that the voters of the City will not, in the future, approve an initiative which reduces or repeals the Retirement Tax or local taxes, assessments, fees or charges that currently are deposited into the City’s General Fund.
Although a portion of the City’s General Fund revenues are derived from general taxes purported to be governed by Proposition 218, all of such taxes were imposed in accordance with the requirements of Proposition 218. No assurance can be given that the voters of the City will not, in the future, approve an initiative or initiatives which reduce or repeal local taxes, assessments, fees or charges which support the City’s General Fund.
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Proposition 26
On November 2, 2010, voters in the State approved Proposition 26. Proposition 26 amends Article XIIIC of the State Constitution to expand the definition of “tax” to include “any levy, charge, or exaction of any kind imposed by a local government” except the following: (a) a charge imposed for a specific benefit conferred or privilege granted directly to the payor that is not provided to those not charged, and which does not exceed the reasonable costs to the local government of conferring the benefit or granting the privilege; (b) a charge imposed for a specific government service or product provided directly to the payor that is not provided to those not charged, and which does not exceed the reasonable costs to the local government of providing the service or product; (c) a charge imposed for the reasonable regulatory costs to a local government for issuing licenses and permits, performing investigations, inspections, and audits, enforcing agricultural marketing orders, and the administrative enforcement and adjudication thereof; (d) a charge imposed for entrance to or use of local government property, or the purchase, rental or lease of local government property; (e) a fine, penalty or other monetary charge imposed by the judicial branch of government or a local government as a result of a violation of law; (f) a charge imposed as a condition of property development; and (g) assessments and property-related fees imposed in accordance with the provisions of Article XIIID. Proposition 26 provides that the local government bears the burden of proving by a preponderance of the evidence that a levy, charge, or other exaction is not a tax, that the amount is no more than necessary to cover the reasonable costs of the governmental activity, and that the manner in which those costs are allocated to a payor bear a fair or reasonable relationship to the payor’s burdens on, or benefits received from, the governmental activity. While the City has updated certain fees since the passage of Proposition 26 any such updates were made in accordance with Proposition 218 and Proposition 26, as applicable.
Future Initiatives
The provisions of Article XIIIA, XIIIB, XIIIC and XIIID were adopted as measures that qualified for the ballot pursuant to California’s Constitutional initiative process. From time to time other initiative measures could be adopted, affecting the ability of the participants to increase revenues and to increase appropriations.
Loss of State Tax Exemption
Interest on the Bonds is not excluded from gross income for federal income tax purposes. Interest on the Bonds could become includable in gross income for purposes of state income taxation if the constitutional basis for the tax exemption was changed, for example by initiative of the voters or by legislative action. Should such an event of taxability occur, the Bonds are not subject to special redemption or any increase in interest rate and will remain outstanding until maturity or until redeemed under one of the redemption provisions contained in the Trust Agreement. See the caption “TAX MATTERS.”
Secondary Market
There can be no guarantee that there will be a secondary market for the Bonds or, if a secondary market exists, that such Bonds can be sold for any particular price. Occasionally, because of general market conditions or because of adverse history or economic prospects connected with a particular issue, secondary marketing practices in connection with a particular issue are suspended or terminated. Additionally, prices of issues for which a market is being made will depend upon then prevailing circumstances. Such prices could be substantially different from the original purchase price.
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TAX MATTERS
In the opinion of Richards, Watson & Gershon, A Professional Corporation, Bond Counsel, under existing law, interest on the Bonds is exempt from State of California personal income taxes. Bond Counsel expresses no opinion as to any other tax consequences regarding the Bonds. INTEREST ON THE BONDS IS NOT EXCLUDED FROM GROSS INCOME FOR FEDERAL INCOME TAX PURPOSES.
THE LEGAL DEFEASANCE OF THE BONDS MAY RESULT IN A DEEMED SALE OR EXCHANGE OF THE BONDS UNDER CERTAIN CIRCUMSTANCES; OWNERS OF THE BONDS SHOULD CONSULT THEIR OWN TAX ADVISORS AS TO THE FEDERAL INCOME TAX CONSEQUENCES OF SUCH AN EVENT. PROSPECTIVE PURCHASERS OF THE BONDS SHOULD ALSO CONSULT WITH THEIR OWN TAX ADVISORS AS TO THE FEDERAL, STATE AND LOCAL, AND FOREIGN TAX CONSEQUENCES OF THEIR ACQUISITION, OWNERSHIP AND DISPOSITION OF THE BONDS. If a beneficial owner of a Bond fails to provide its taxpayer identification number or fails to report all interest on its federal income tax returns, payments of principal and interest made on the Bond will be subject to backup withholding. Beneficial owners of the Bonds should consult their tax advisors with respect to this and other tax consequences of ownership of the Bonds.
The following discussion is generally limited to “U.S. owners,” meaning beneficial owners of Bonds that for United States federal income tax purposes are individual citizens or residents of the United States, corporations or other entities taxable as corporations created or organized in or under the laws of the United States or any state thereof (including the District of Columbia), and certain estates or trusts with specific connections to the United States. Partnerships holding Bonds, and partners in such partnerships, should consult their own tax advisors regarding the tax consequences of an investment in the Bonds (including their status as U.S. owners).
Certain of the Bonds (Discount Bonds) may be offered and sold to the public at an original issue discount (OID). OID is the excess of the stated redemption price at maturity (the principal amount) over the “issue price” of such Bonds, provided that excess equals or exceeds a statutory de minimis amount (one-quarter of one percent of the Bond’s stated redemption price at maturity multiplied by the number of complete years to its maturity, or if required by applicable Treasury Regulations, to an earlier call date). The issue price of a Discount Bond is the initial offering price to the public (other than to bond houses, brokers or similar persons acting in the capacity of underwriters or wholesalers) at which a substantial amount of the Discount Bonds of the same maturity are sold pursuant to that offering. For federal income tax purposes, OID accrues to the owner of a Discount Bond over the period to maturity based on the constant yield method, compounded semiannually (or over a shorter permitted compounding interval selected by the owner). The portion of OID that accrues during the time a U.S. owner owns a Discount Bond (i) constitutes interest includable in the U.S. owner’s gross income for federal income tax purposes and (ii) is added to the U.S. owner’s tax basis for purposes of determining gain or loss on the maturity, redemption, prior sale, or other disposition of the Discount Bond. The effect of OID is to accelerate the recognition of taxable income during the term of the Discount Bond.
Certain of the Bonds (Premium Bonds) may be offered and sold to the public at a price in excess of their stated redemption price (the principal amount) at maturity. If a U.S. owner purchases a Premium Bond, that owner will be considered to have purchased such a Premium Bond with “amortizable bond premium” equal in amount to such excess. The U.S. owner may elect (and that election will apply to all securities purchased at a premium by such U.S. Owner), in accordance with the applicable provisions of Section 171 of the Code, to amortize that premium as an offset to the interest payments on the Premium Bond using a constant yield to maturity method over the remaining term of the Premium Bond (or, if required by applicable Treasury Regulations, to an earlier call date). Pursuant to Section 67(b)(11) of the Code, the amortization of that premium is not considered a miscellaneous itemized deduction. Any amortization of bond premium will reduce the basis of the Premium Bond pursuant to Section 1016(a)(5) of the Code.
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Owners of Discount or Premium Bonds (or book entry interests in them) should consult their own tax advisers as to the determination for federal tax purposes of the amount of OID or amortizable bond premium properly accruable in any period with respect to the Discount or Premium Bonds and as to other federal tax consequences and the treatment of OID and amortizable bond premium for purposes of state or local taxes on (or based on) income.
General information reporting requirements will apply to payments of principal and interest made on Bonds and the proceeds of the sale of Bonds to non-corporate owners, and “backup withholding” at a rate of 28% will apply to such payments if the owner fails to provide an accurate taxpayer identification number in the manner required or fails to report all interest required to be shown on its federal income tax returns. A beneficial owner of Bonds that is a U.S. owner generally can obtain complete exemption from backup withholding by providing a properly completed IRS Form W-9 (Request for Taxpayer Identification Number and Certification).
For taxable years beginning after December 31, 2012, a U.S. owner that is an individual or estate, or a trust not included in a special class of trust that is exempt from such tax, is subject to a 3.8 percent Medicare tax on the lesser of (i) the U.S. owner’s “net investment income” for the taxable year, and (ii) the excess of the U.S. owner’s modified adjusted gross income for the taxable year over a certain threshold (which in the case of individuals is between $125,000 and $250,000, depending on the individual’s circumstances). A U.S. owner’s net investment income generally includes interest income on, and net gains from the disposition of, Bonds, unless such interest income or net gains are derived in the ordinary course of a trader business (other than a trader business that consists of certain passive or trading activities). A U.S. owner that is an individual, estate, or trust, should consult its tax advisor regarding the applicability of the Medicare tax.
Non-U.S. Owners
Under the Code, interest and OID on any Bond whose beneficial owner is not a U.S. owner are generally not subject to United States income tax or withholding tax (including backup withholding) if the non-U.S. owner provides the payor of interest on the Bonds with an appropriate statement as to its status as a non-U.S. owner. This statement can be made on IRS Form W-8BEN or a successor form. If, however, the non-U.S. owner conducts a trade or business in the United States and the interest or OID on the Bonds held by the non-U.S. owner is effectively connected with such trade or business, that interest or OID will be subject to United States income tax but will generally not be subject to United States withholding tax (including backup withholding). The foregoing is a brief summary of certain federal income tax consequences to a non-U.S. owner. Non-U.S. owners should consult their own tax advisors regarding the tax consequences of an investment in the Bonds.
Foreign Account Tax Compliance Act
The Foreign Account Tax Compliance Act (“FATCA”) generally imposes a 30 percent withholding tax on interest payments and proceeds from the sale of interest-bearing obligations for payments made after the relevant effective date to (i) certain foreign financial institutions that fail to certify their FATCA status, and (ii) investment funds and non-financial foreign entities if certain disclosure requirements related to direct and indirect United States shareholders and/or United States account holders are not satisfied)
Under applicable Treasury Regulations, the FATCA withholding tax of 30 percent will generally be imposed, subject to certain exceptions, on payments of (i) interest on Bonds on or after July 1, 2014, and (ii) gross proceeds from the sale or other disposition of other Bonds on or after January 1, 2017, where such payments are made to persons described in the preceding paragraph.)
In the case of payments made to a “foreign financial institution” (generally including an investment fund), as a beneficial owner or as its intermediary, the FATCA withholding tax generally will be imposed, subject to certain exceptions, unless such institution (i) enters into (or is otherwise subject to) and complies
52
with an agreement with the United States government (a “FATCA Agreement”), or (ii) is required by and complies with applicable foreign law enacted in connection with an intergovernmental agreement between the United States and a foreign jurisdiction (an “IGA”), in either case to, among other things, collect and provide to the United States or other relevant tax authorities certain information regarding United States account holders of such institution. In the case of payments made to a foreign entity that is not a financial institution (as a beneficial owner), the FATCA withholding tax generally will be imposed, subject to certain exceptions, unless such entity either provides the withholding agent with a certification that it does not have any “substantial” United States owner (generally, in a specified United States person that directly or indirectly owns more than a specified percentage of such entity) or identifies its “substantial” United States owners.
If Bonds are held through a foreign financial institution that enters into (or is otherwise subject to) a FATCA Agreement, such foreign financial institution (or, in certain cases, a person paying amounts to such foreign financial institutions) generally will be required, subject to certain exceptions, to withhold the 30 percent FATCA tax on payments of dividends or the items described above made to (i) a person (including an individual) that fails to comply with certain information requests, or to relies (ii) a foreign financial institution that has not entered into (and is not otherwise subject to) a FATCA Agreement and that is not required to comply with FATCA pursuant to applicable foreign law enacted in connection with an IGA. Coordinating rules may limit duplicative withholding in cases where the withholding described above in “Non-U.S. Owners” or back-up withholding described above also applies.
If any amount of, or in respect of, United States withholding tax were to be deducted or withheld from payments on Bonds as a result of a failure by an investor (or by an institution through which an investor holds the Bonds) to comply with FATCA, neither the City, the Trustee, any paying agent or bond registrar nor any other person would, pursuant to the terms of the Bonds, be required to pay additional amounts with respect to any Bond as a result of the deduction or withholding of such tax. Non-U.S. Owners should consult their tax advisors regarding the application of FATCA to the ownership and disposition of Bonds.
Form of Bond Counsel Opinion
A copy of the proposed form of Bond Counsel’s final approving opinion with respect to the Bonds is attached hereto as Appendix C.
VALIDATION
On August 6, 2008, the City, acting pursuant to the provisions of Sections 860 et seq. of the California Code of Civil Procedure, filed a complaint in the Superior Court of the State of California for the County of Los Angeles seeking judicial validation of the 2010 Bonds and all Additional Bonds and certain other matters, including the Trust Agreement. On December 17, 2008, the court entered a judgment to the effect, among other things, that the 2010 Bonds and all Additional Bonds were valid, legal and binding obligations of the County. The Trust Agreement was also the subject of the judgment. The time period for the filing of appeals with respect to the judgment has expired and no appeals were filed and therefore the judgment is final and unappealable. The Bonds are being issued as Additional Bonds under the Trust Agreement. In issuing its opinion as to the validity of the Bonds, Bond Counsel has relied upon the entry of the foregoing judgment.
CONCLUDING INFORMATION
Rating
S&P Global Ratings, a Standard & Poor’s Financial Services, LLC business (“S&P”), has assigned its long term municipal bond rating of “AA-” to the Bonds. This rating reflects the view of S&P as to the credit quality of the Bonds. There is no assurance that the rating will continue for any given period of time or that it will not be revised downward or withdrawn entirely by the respective rating agency, if in the judgment of the rating agency circumstances so warrant. Any such downward revision or withdrawal of the rating may have an
53
adverse effect on the market price of the Bonds. Such rating reflects only the views of S&P and an explanation of the significance of such rating may be obtained from S&P. Generally, rating agencies base their ratings on information and materials furnished to them (which may include information and material from the City which is not included in this Official Statement) and on investigations, studies and assumptions by the rating agencies.
Underwriting
The original purchase price to be paid for the Bonds is $110,719,567.00 (constituting the original aggregate principal amount thereof, less Underwriter’s discount of $825,433.00). Hilltop Securities Inc. (the “Underwriter”) intends to offer the Bonds to the public initially at the yields set forth on the inside front cover page of this Official Statement, which yields may subsequently change without any requirement of prior notice.
The Underwriter reserves the right to join with dealers and other underwriters in offering the Bonds to the public. The Underwriter may offer and sell Bonds to certain dealers (including dealers depositing the Bonds into investment trusts) at prices lower than the public offering prices, and such dealers may reallow any such discounts on sales to other dealers.
In reoffering Bonds to the public, the Underwriter may overallocate or effect transactions which stabilize or maintain the market prices for Bonds at levels above those which might otherwise prevail. Such stabilization, if commenced, may be discontinued at any time.
Verification of Mathematical Accuracy
Grant Thornton, LLP, Minneapolis, Minnesota, an independent accountant, upon delivery of the Bonds, will deliver a report on the mathematical accuracy of certain computations, contained in schedules provided to them that were prepared by the Underwriter, relating to the sufficiency of moneys and securities deposited into the Escrow Fund created under the Escrow Agreement, to pay, when due, the principal, whether at maturity or upon prior redemption, interest and redemption premium requirements with respect to the 2010 Bonds.
The report of Grant Thornton, LLP will include the statement that the scope of its engagement is limited to verifying the mathematical accuracy of the computations contained in such schedules provided to it, and that it has no obligation to update its report because of events occurring, or date or information coming to its attention, subsequent to the date of its report.
Municipal Advisor
Urban Futures, Inc., Tustin, California (the “Municipal Advisor”) has assisted the City in matters relating to the planning, structuring, and sale of the Bonds and the preparation of this Official Statement, and has provided general financial advisory services to the City with respect to the sale of the Bonds. The Municipal Advisor provides financial advisory services only and does not engage in the underwriting, marketing, or trading of municipal securities or other negotiable instruments.
Legal Opinion
The opinion of the Bond Counsel firm of Richards, Watson & Gershon, A Professional Corporation, Los Angeles, California, approving the validity of the Bonds and stating that interest on the Bonds is exempt from personal income taxes of the State of California under present State laws, will be furnished to the Underwriter at the time of delivery of the Bonds at the expense of the City.
54
The legal opinion is only as to legality and is not intended to be nor is it to be interpreted or relied upon as a disclosure document or an express or implied recommendation as to the investment quality of the Bonds. In addition, certain legal matters will be passed upon for the City by Stradling Yocca Carlson & Rauth, a Professional Corporation, Newport Beach, California, Disclosure Counsel, for the Underwriter by its counsel, Nixon Peabody LLP, Los Angeles, California, and for the Trustee by its counsel, Dorsey & Whitney LLP, Costa Mesa, California.
Continuing Disclosure
The City, for itself and as agent for the City, has covenanted for the benefit of holders and Beneficial Owners of the Bonds: (1) to provide certain financial information and operating data (the “Annual Report”) relating to the City by not later than each March 31, commencing with the submittal of the report for Fiscal Year 2016-17 on March 31, 2018 (this Official Statement constitutes the Annual Report for Fiscal Year 2015-16); and (2) to provide notices of the occurrence of certain enumerated events. The Annual Report will be filed by the City or a dissemination agent appointed by the City with the Municipal Securities Rulemaking Board’s Electronic Municipal Market Access System for municipal securities disclosures, maintained on the Internet at http://emma.msrb.org/ (“EMMA”). The notices of enumerated events will be timely filed by the City or a dissemination agent appointed by the City with EMMA. The specific nature of the information to be contained in the Annual Report or the notices of enumerated events is set forth in the Continuing Disclosure Certificate. See Appendix D. These covenants have been made in order to assist the Underwriter in complying with Rule 15c2-12(b)(5) of the Securities and Exchange Commission (the “Rule”).
It should be noted that the City is required to file certain financial statements with the Annual Report. This requirement has been included in the Continuing Disclosure Certificate solely to satisfy the provisions of the Rule. The inclusion of such information does not mean that the Bonds are secured by any resources or property of the City other than as described in this Official Statement.
In the last five years, the City did on occasion fail to comply with certain of its previous continuing disclosure undertakings (the “Prior Continuing Disclosure Obligations”) entered into pursuant to the Rule with respect to the Monrovia Financing Authority Lease Revenue Bonds (Hillside Wilderness Preserve Project) Issue of 2002 (the “2002 Bonds”) and the 2010 Bonds. The annual reports required under each of the Prior Continuing Disclosure Obligations consist of two components: (i) updates as to certain information presented in the official statements with respect to the respective bond issue (the “Updated Operating and Financial Data”), and (ii) annual financial statements.
Specifically, in the last five years, the City failed to file or to timely file complete annual reports for certain years as follows:
x For 2010 Bonds, certain tabular information was omitted from the Updated Operating and Financial Data reports for Fiscal Years 2011-12 and 2013-14.
x For the 2002 Bonds, the City failed to file the Updated Operating and Financial Data for Fiscal Years 2011-12 and 2012-13 for the 2002 Bonds, although certain of the required information is also contained in the City’s annual financial statements.
Notices of the late filing of the above annual financial statements and reports were not timely filed as required by the applicable continuing disclosure undertakings. The City has now brought itself current with respect to the Updated Operating and Financial Data described above as not having been previously filed or filed separately, as well as the notices of late filing described in the foregoing sentence, regardless of whether such disclosure issues might be considered immaterial or not in view of the balance of the information provided.
55
A failure by the City to comply with the provisions of the Continuing Disclosure Certificate is not an event of default under the Trust Agreement (although the holders and beneficial owners of the Bonds do have remedies at law and in equity). However, a failure to comply with the provisions of the Continuing Disclosure Certificate must be described in accordance with the Rule and must be considered by any broker, dealer or municipal securities dealer before recommending the purchase or sale of the Bonds. Therefore, a failure by the City to comply with the provisions of the Continuing Disclosure Certificate may adversely affect the marketability of the Bonds on the secondary market.
Pursuant to the Continuing Disclosure Certificate, U.S. Bank National Association will act as Dissemination Agent and file the annual reports and notices related to the Bonds (and prepared by the City) with the MSRB through EMMA. The full text of the Continuing Disclosure Certificate is set forth in Appendix D. The City will implement internal procedures to verify all filings are correctly made by the Dissemination Agent.
Absence of Litigation
There is no action, suit or proceeding known to be pending or threatened, restraining or enjoining the execution or delivery of the Bonds or the Trust Agreement or in any way contesting or affecting the validity of the foregoing or any proceeding of the City taken with respect to any of the foregoing.
Legality for Investment in California
Under State law, the Bonds are legal investments for all banks, trust companies and savings banks, insurance companies, and various other financial institutions, as well as for trust funds. The Bonds are also authorized security for public deposits.
Miscellaneous
References are made herein to certain documents and reports which are brief summaries thereof and which do not purport to be complete or definitive. Bondowners and other interested parties must refer to such documents and reports for full and complete statements of the contents thereof.
Any statements in this Official Statement involving matters of opinion, whether or not expressly so stated, are intended as such and not as representations of fact. This Official Statement is not to be construed as a contract or agreement among the City and the purchasers or owners of any of the Bonds.
The execution and delivery of this Official Statement has been duly authorized by the City.
CITY OF MONROVIA
By: /s/ Oliver Chi City Manager
A-1
APPENDIX A
SUPPLEMENTAL INFORMATION OF THE CITY OF MONROVIA
General
The City is located in the San Gabriel Valley twenty miles northeast of the City of Los Angeles at the base of the San Gabriel Mountains. The City encompasses approximately 13.75 square miles. Founded on May 17, 1886, the City was incorporated on December 8, 1887 and has a general law form of government. The City operates under a Council/Manager form of government; the Mayor and Councilmembers are elected at large and the City Manager is appointed by the Council.
Population
The population of the City as of January 1, 2017 was estimated to be 38,514. A summary of the City’s population is shown below.
CITY OF MONROVIA Population(1)
2008 36,369 2009 36,407 2010 36,659 2011 36,737 2012 36,923 2013 37,030 2014 37,170 2015 37,312 2016 37,411 2017 38,514
(1) Estimated by the California Department of Finance, Demographic Research Unit, as of January 1 of each year.
A-2
Per Capita Personal Income
The following table shows the annual per capita personal income for the Los Angeles-Long Beach-Anaheim, California Metropolitan Statistics Area, the State and the United States from 2007 through 2016.
LOS ANGELES-LONG BEACH-ANAHEIM, CALIFORNIA MSA AND UNITED STATES
Per Capita Personal Income Calendar Years 2007 through 2016(3)
Year Los Angeles-Long Beach-
Santa Ana MSA(1) California(2) U.S.(2)
2007 $44,529 $43,692 $39,821 2008 45,228 44,162 41,082 2009 43,245 42,224 39,376 2010 44,714 43,317 40,277 2011 47,246 45,849 42,461 2012 50,255 48,369 44,282 2013 49,368 48,570 44,493 2014 51,854 51,134 46,464 2015 54,526 53,949 48,190 2016(3) -- 55,987 49,571
(1) Per capita personal income was computed using Census Bureau midyear population estimates. (2) Per capita personal income is total personal income divided by total midyear population. All dollar estimates are in current
dollars (not adjusted for inflation). (3) MSA data not yet available for 2016. Source: U.S. Department of Commerce, Bureau of Economic Analysis.
Employment
The table below summarizes the employment history for the City and surrounding area from 2007 through 2016.
CITY OF MONROVIA Civilian Labor Force Employment and Unemployment
Calendar Years 2007-2016
Year Labor Force Employment Unemployment Unemployment
Rate
2007 20,700 19,800 900 4.4% 2008 20,900 19,500 1,400 6.6 2009 20,700 18,600 2,100 10.2 2010 20,000 18,000 1,900 9.7 2011 20,000 18,100 1,900 9.5 2012 20,000 18,300 1,700 8.5 2013 20,300 18,800 1,500 7.5 2014 20,500 19,200 1,300 6.3 2015 20,600 19,600 1,100 5.1 2016 20,900 20,000 800 4.0
(1) Not seasonally adjusted. Figures represent the 12-month average for each such year. Source: State of California, Employment Development Department.
A-3
CITY, STATE AND NATIONAL EMPLOYMENT STATISTICS Calendar Years 2007-2016
Unemployment Rate(1)
Year City of Monrovia State of California United States
2007 4.4% 5.4% 4.6% 2008 6.6 7.3 5.8 2009 10.2 11.2 9.3 2010 9.7 12.2 9.6 2011 9.5 11.7 8.9 2012 8.5 10.4 8.1 2013 7.5 8.9 7.4 2014 6.3 7.5 6.2 2015 5.1 6.2 5.3 2016 4.0 5.4 4.9
(1) Not seasonally adjusted. Figures represent the 12-month average for each such year. Source: State of California, Employment Development Department and U.S. Department of Labor, Bureau of Labor Statistics.
The following is a list of the major employers in the City.
CITY OF MONROVIA Major Employers, 2015-16(1)
Name of Company Employment
Monrovia School District 726 The Home Depot 280 Trader Joe’s Company 267 Ducommun Aerostructures Inc. 263(2) Sierra Autocars 246 Monrovia Memorial Hospital 209 Starr Surgical 191 Vinyl Technology Inc. 185 San Gabriel Valley Newspaper 177 Exelis, Inc. 177
(1) Does not include employers who are not required to obtain a business license with the City, such as the following types of
employers: (a) utility companies, (b) financial institutions and (c) insurance companies. (2) Information is estimated. Source: City of Monrovia Business Services Department and Monrovia Unified School District.
A-4
The City is included in the Los Angeles-Long Beach-Glendale labor market area. The following table shows employment by industry.
LOS ANGELES-LONG BEACH GLENDALE LABOR MARKET AREA Employment by Industry
2013 2014 2015 2016
Total Farm 5,500 5,200 5,000 5,300 Mining and Logging 4,500 4,300 3,900 3,600 Construction 114,600 118,500 126,200 133,100 Manufacturing 374,400 370,000 366,800 360,400 Trade, Transportation and Utilities 781,800 798,800 816,400 829,900 Information 197,000 198,800 207,500 230,900 Financial Activities 213,000 211,200 215,500 219,800 Professional and Business Services 586,900 593,300 595,500 605,200 Educational and Health Services 702,100 720,700 741,100 767,400 Leisure and Hospitality 440,500 466,600 489,100 510,500 Other Services 145,700 150,500 151,000 153,400 Government 551,200 556,200 568,500 576,300 Total All Industries(1) 4,117,200 4,193,900 4,286,500 4,395,700 Total Civilian Labor Force(2) 4,967,000 5,006,800 5,000,600 5,043,300 Total Unemployment 485,000 412,900 332,400 264,500 Unemployment Rate 9.8% 8.2% 6.6% 5.2% (1) Industry employment is by place of work; excludes self-employed individuals, unpaid family workers, household domestic
workers and workers on strike. (2) Labor force data is by place of residence; includes self-employed individuals, unpaid family workers, household domestic
workers and workers on strike. Source: California Employment Development Department, Labor Market Information Division.
Construction Activity
The table below summarizes the building permit valuations and the number of new dwelling units authorized in the City from 2012 through 2016.
CITY OF MONROVIA Building Permit Valuations
2012-2016
2012 2013 2014 2015 2016 Valuation ($000): Residential $ 2,788 $ 1,091 $ 10,045 $ 6,730 $ 62,044 Non-residential 256 309 7,557 26,019 41,794 Total* $ 3,044 $ 1,400 $ 17,602 $ 32,749 $ 103,838 Residential Units: Single family 9 2 31 5 23 Multiple family 0 0 0 0 418 Total 9 2 31 5 441
* Totals may not add to sums because of rounding. Source: Construction Industry Research Board.
A-5
Commerce
The number of establishments selling merchandise subject to sales tax and the valuation of taxable transactions are presented in the following table.
CITY OF MONROVIA Taxable Retail Sales
Number of Permits and Valuation of Taxable Transactions
Retail Stores Total All Outlets
Year No. of
Permits Taxable
Transactions No. of
Permits Taxable
Transactions
2007 669 $626,394,000 1,481 $781,952,000 2008 671 568,750,000 1,418 725,714,000 2009 834 501,466,000 1,305 627,869,000 2010 873 542,551,000 1,345 661,926,000 2011 882 573,604,000 1,341 740,015,000 2012 904 606,009,000 1,362 759,951,000 2013 841 626,552,000 1,288 768,971,000 2014 878 650,990,000 1,323 805,853,000 2015(1) 937 676,754,019 1,497 843,174,342 2016(1)(2) 908 503,179,042 1,469 633,938,420
(1) Beginning in 2015, the outlet counts in these reports show the number of outlets that were active during the reporting period.
Retailers that operate part-time are now tabulated with store retailers. Industry-level data for 2015 are not comparable to that of prior years.
(2) Through third quarter of 2016. Source: California State Board of Equalization, Taxable Sales in California (Sales & Use Tax).
A-6
Ta
x R
ate Pr
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ty ta
x ra
tes i
n th
e C
ity a
re a
s fol
low
s:
Fisc
al Y
ear
Basic
Tax
Le
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Los A
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Coun
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-07
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0660
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0047
0.
0652
80
0.00
3560
0.
0000
50
0.12
8519
1.
2027
69
$423
.58
2007
-08
1.00
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0045
0.
0632
62
0.01
6112
0.
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0.12
8519
1.
2123
93
485.
58
2008
-09
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0.
0043
0.
0501
25
0.02
4408
0.
0000
00
0.12
8519
1.
2073
52
455.
91
2009
-10
1.00
00
0.00
0000
0.
0043
0.
0652
10
0.02
3974
0.
0000
00
0.12
8519
1.
2220
03
519.
24
2010
-11
1.00
00
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0037
0.
0723
29
0.02
5159
0.
0000
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0.12
8519
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2297
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557.
60
2011
-12
1.00
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0.
0923
23
0.02
4466
0.
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00
0.12
8519
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557.
43
2012
-13
1.00
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0.
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63
0.02
5903
0.
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47
2013
-14
1.00
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87
0.02
2263
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572.
55
2014
-15
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6412
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558.
42
2015
-16
1.00
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0.
0868
00
0.02
4062
0.
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0.12
8519
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564.
47
(1)
Incl
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(2)
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incl
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16.
A-7
Statement of Direct and Overlapping Bonded Indebtedness
The City’s direct and overlapping bonded indebtedness as of June 30, 2017 is summarized as follows:
City Assessed Valuation $4,118,785,238 Successor Agency Incremental Valuation 972,070,217 $ 5,090,855,455 Percent Applicable
to City Outstanding Debt
6/30/17 Estimated Share of Overlapping Debt
Overlapping Debt: Metropolitan Water District(1) 0.381% $ 36,281,674 $ 138,211 El Monte School District 0.080 173,335,931 138,966 El Monte Union High School District 0.042 80,671,836 33,690 Citrus Community College District 19.415 94,282,553 18,305,221 Pasadena Area Community College District 0.023 80,630,000 18,634 Rio Hondo Community College District 0.005 153,807,824 7,966 Arcadia Unified School District 0.100 223,178,429 223,580 Duarte Unified School District 1.276 70,664,187 901,965 Monrovia Unified School District 86.836 63,893,092 55,482,392 Total Overlapping Debt: 75,250,625 Direct Debt City Direct Debt(2) 44,166,322 Successor Agency Direct Debt 49,155,000 Total City and Successor Agency Direct Debt 93,321,322 Total Direct and Overlapping Debt $ 168,571,947 (1) This fund is a portion of a larger agency, and is responsible for debt in areas outside the city. Overlapping governments are
those that coincide, at least in part, with the geographic boundaries of the City. The percentage of overlapping debt applicable is estimated by using taxable assessed values. Applicable percentages were estimated by determining the portion of another governmental unit’s taxable assessed value that is within the City’s boundaries and dividing it by each unit’s total taxable assessed value.
(2) The City’s Direct Debt does not include Business Type Activities debt. Source: HdL Coren & Cone and Los Angeles County Assessor.
Utilities
Water is supplied by the Monrovia Water Department. Southern California Gas Company supplies natural gas and electric power is provided by Southern California Edison Company. Telephone service is available through Verizon and trash collection is provided by Athens Company.
Community Service Facilities
The Monrovia Community Center provides entertainment and recreation facilities for the community. A bi-monthly publication “Monrovia Today,” also serves the City by providing important community information. Police and fire protection is maintained by the City to serve the residents.
The City’s educational system is comprised of one preschool, five elementary schools, two middle schools, one high school, one continuation high school and an adult educational school. The City serves the educational needs of approximately 5,000 students. The Monrovia Public Library also serves as an educational resource center.
In the area of health care there is one general care hospital in the City of Monrovia as well as a County health care facility. In addition, there are many physicians, dentists, optometrists, ophthalmologists and chiropractors in the area.
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The City also maintains an active public recreation program. There are three major parks, four neighborhood parks, 1,000 acres of hiking and camping areas, tennis and racquetball courts and swimming facilities.
The City offers its citizens a wide range of cultural activities, including the annual Monrovia Arts Festival in October, the Monrovia Historical Museum, the Mother’s Day Old Homes Tour, the weekly summer Concerts in the Park series and annual Jazz Festival.
Geography and Climate
The City of Monrovia is located at an altitude of 450 feet above sea level to the south and 1,100 feet above sea level to the north. Monrovia’s climate is characterized as mild with a mean temperature of 65 degrees. The average annual rainfall in the City is 20 inches.
Transportation
The City sits along the 210 Freeway, with easy access to Los Angeles, Hollywood, Orange County, Southland beaches, mountain resorts and LAX, Ontario and Burbank Airports.
There are four airports in the surrounding area of Monrovia that serve the City. They are located in Ontario, Hollywood-Burbank, El Monte and Los Angeles.
The community is served by bus systems operated by the Metropolitan Transit Authority and Foothill Transit. In addition, Monrovia Transit operates within the city with curb-to-curb, on-call service for Monrovia residents and visitors. The Old Town Trolley operates afternoons, connecting the offices along Huntington Drive to the shops and restaurants of Old Town. The Gold Line Light Rail system now connects the local region to downtown Los Angeles and was extended through Monrovia by the opening of the new station in Monrovia on March 5, 2016.
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APPENDIX B
SUMMARY OF THE TRUST AGREEMENT
The following is a summary of certain provisions of the Trust Agreement which are not included in the body of this Official Statement. This summary and other references to the Trust Agreement in the Official Statement are not intended to be definitive and reference is made to the complete documents for the full terms of the documents.
DEFINITIONS
Unless the context otherwise requires, the terms defined under this caption will, for all purposes of this Official Statement, have the meanings herein specified.
“2010 Bonds” means the series of bonds issued under the Trust Agreement and designated as “City of Monrovia Taxable Pension Obligation Bonds, Series 2010.”
“2010 Bonds Escrow Agreement” means that certain Escrow Agreement, dated as of December 1, 2017, by and between the City and the 2010 Bonds Escrow Agent, relating to the defeasance and redemption of the 2010 Bonds.
“2010 Bonds Escrow Fund” has the meaning assigned to that term in the 2010 Bonds Escrow Agreement.
“2010 Bonds Escrow Agent” means U.S. Bank National Association, acting as escrow agent under the 2010 Bonds Escrow Agreement, or any successor thereto pursuant to the 2010 Bonds Escrow Agreement.
“2017 Bonds” means the series of bonds issued under the Trust Agreement and designated as “City of Monrovia Taxable Pension Obligation Bonds, Series 2017.”
“2017 Term Bonds” means, collectively, the 2017 Bonds maturing on May 1, 2033, May 1, 2038, May 1, 2042, and May 1, 2047.
“Account” means any account established pursuant to the Trust Agreement.
“Additional Bonds” means bonds issued in accordance with the Trust Agreement.
“Authorized City Representative” means the City Manager, Administrative Services Director or any officer authorized to act on their respective behalves.
“Authorized Denominations” means $5,000 and any integral multiple thereof (except that while Bonds are registered in book-entry form, they may be held in amounts other than an integral multiple so long as the amount exceeds $5,000).
“Beneficial Owner” means, whenever used with respect to a Bond, the person in whose name such Bond is recorded as the beneficial owner of such Bond by a Participant on the records of such Participant or such person’s subrogee.
“Bond” or “Bonds” means the 2010 Bonds and/or the 2017 Bonds, as the context may require, issued under and at any time Outstanding pursuant to the Trust Agreement
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“Bond Counsel” means a firm of attorneys nationally recognized as experts in the area of municipal finance who are familiar with the transactions contemplated under the Trust Agreement and acceptable to the City.
“Bond Interest Account” means the Account of that name established within the Revenue Fund pursuant to the Trust Agreement.
“Bond Principal Account” means the Account of that name established within the Revenue Fund pursuant to the Trust Agreement.
“Book-Entry Bonds” means the Bonds held by DTC (or its nominee) as the registered owner thereof pursuant to the terms and provisions of the Trust Agreement.
“Business Day” means a day (a) other than a day on which banks located in the City of New York, New York or the cities in which the respective principal offices of the Trustee or any Paying Agent are located, are required or authorized by law or executive order to close, and (b) on which the New York Stock Exchange is open.
“Closing Date” means the respective date upon which a series of Bonds is delivered to the applicable Purchaser.
“Consultant” means the accountant, attorney, consultant, municipal finance consultant or investment banker, or firm thereof, retained by the City to perform acts and carry out the duties provided for such Consultant in the Trust Agreement. Such accountant, attorney, consultant, municipal finance consultant or investment banker, or firm thereof, shall be nationally recognized within its profession for work of the character required.
“Continuing Disclosure Agreement” means, (i) with respect to the 2010 Bonds, that certain Continuing Disclosure Agreement entered into by and between the City and the Trustee, dated as of June 1, 2010, and (ii) with respect to the 2017 Bonds, that certain Continuing Disclosure Certificate, dated as of December 13, 2017, executed by the City and appointing U.S. Bank National Association, as dissemination agent, each as originally executed and as it may be amended from time to time in accordance with the respective terms thereof.
“Costs of Issuance” means all costs and expenses incurred by the City in connection with the issuance of the Bonds and the refunding of the Unfunded Liability, including, but not limited to, out-of-pocket expenses of the City, costs and expenses of printing and copying documents and the Bonds and the fees, costs and expenses of Rating Agencies, credit providers or enhancers, the Trustee, counsel to the Trustee, Bond Counsel, the verification agent, accountants, municipal finance consultant, disclosure counsel and other consultants and the premium for any municipal bond insurance and surety bond insurance.
“Defeasance Securities” means any of the following: (a) cash, (b) non-callable direct obligations of the United States of America (“Treasuries”), (c) evidence of ownership of proportionate interests in future interest and principal payments on Treasuries held by a bank or trust company as custodian, under which the owner of the investment is the real party in interest and has the right to proceed directly and individually against the obligor and the underlying Treasuries are not available to any person claiming through the custodian or to whom the custodian may be obligated, and (d) pre-refunded municipal obligations rated “AAA” and “Aaa” by S&P and Moody’s, respectively or (e) securities eligible for “AAA” defeasance under then existing criteria of S&P (or any combination thereof), which shall be authorized to be used to effect defeasance of the Bonds.
“Deposit Amount” means, for any Payment Calculation Period, the sum of the aggregate amount of principal required to be paid on Bonds during such Payment Calculation Period either at maturity or pursuant
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to a mandatory sinking fund payment and the interest due on the Bonds on each Interest Payment Date during such Payment Calculation Period.
“DTC” means The Depository Trust Company, a limited-purpose trust company organized under the laws of the State of New York, and its successors and assigns.
“Event of Default” means any occurrence or event specified in the Trust Agreement.
“Fiduciary or Fiduciaries” means the Trustee, any Paying Agent, or any or all of them, as may be appropriate.
“First Supplemental Trust Agreement” means the First Supplemental Trust Agreement, dated as of December 1, 2017, by and between the City and U.S. Bank National Association, as trustee, or any successor thereto pursuant to the Trust Agreement.
“Fiscal Year” means the period of time beginning on July 1 of each given year and ending on June 30 of the immediately subsequent year, or such other period as the City designates as its fiscal year.
“Fund” means any fund established pursuant to the Trust Agreement.
“Holder,” or “Bondholder,” “owner” or “registered owner” means the registered owner of any Bonds, including DTC or its nominee as the sole registered owner of Book-Entry Bonds.
“Information Services” means any one or more of the national information services that Trustee determines are in the business of disseminating notices of redemption of obligations such as the Bonds.
“Interest Payment Date” means with respect to the 2010 Bonds, May 1 and November 1 of each year commencing November 1, 2010, and with respect to the 2017 Bonds, May 1 and November 1 of each year commencing May 1, 2018.
“Mail” means by first-class United States mail, postage prepaid.
“Master Trust Agreement” means the Trust Agreement, dated as of June 1, 2010, by and between the City and U.S. Bank National Association, as trustee, or any successor thereto pursuant to the Trust Agreement.
“Moody’s” means Moody’s Investors Service, a corporation organized and existing under the laws of the State of Delaware, and its successors, and, if such corporation shall for any reason no longer perform the functions of a securities rating agency, “Moody’s” shall be deemed to refer to any other nationally recognized rating agency designated by the City.
“Opinion of Bond Counsel” means a written opinion of Bond Counsel.
“Outstanding,” with respect to the Bonds, means all Bonds which have been authenticated and delivered under the Trust Agreement, except:
(a) Bonds cancelled or purchased by the Trustee for cancellation or delivered to or acquired by the Trustee for cancellation and, in all cases, with the intent to extinguish the debt represented thereby.
(b) Bonds deemed to be paid in accordance with the Trust Agreement.
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(c) Bonds in lieu of which other Bonds have been authenticated under the Trust Agreement.
(d) Bonds that have become due (at maturity, on redemption, or otherwise) and for the payment of which sufficient moneys, including interest accreted or accrued to the due date, are held by the Trustee or a Paying Agent.
(e) For purposes of any consent or other action to be taken by the holders of a specified percentage of Bonds Outstanding under the Trust Agreement, Bonds held by or for the account of the City or by any person controlling, controlled by or under common control with the City, unless such Bonds are pledged to secure a debt to an unrelated party, in which case such Bonds shall, for purposes of consents and other Bondholder action, be deemed to be Outstanding and owned by the party to which such Bonds are pledged. Nothing herein shall be deemed to prevent the City from purchasing Bonds from any party out of any funds available to the City.
“Participant” means the participants of DTC which include securities brokers and dealers, banks, trust companies, clearing corporations and certain other organizations.
“Paying Agent” means any paying agent for the Bonds appointed by the City pursuant to the Trust Agreement, and any successor appointed pursuant to the Trust Agreement.
“Payment Calculation Period” means (i) with respect to each May 1 Interest Payment Date, the six-month period commencing on the immediately preceding November 2 and ending on such May 1 Interest Payment Date, and (ii) with respect to each November 1 Interest Payment Date, the six-month period commencing on the immediately preceding May 2 and ending on such November 1 Interest Payment Date, except that the first Payment Calculation Period with respect to the 2017 Bonds shall commence on the Closing Date for the 2017 Bonds and end on May 1, 2018.
“Permitted Investments” means, if and to the extent permitted by law and by any policy guidelines promulgated by the City (which will be specified to the Trustee by the City), the following:
(1) Direct obligations of the United States of America and securities fully and unconditionally guaranteed as to the timely payment of principal and interest by the United States of America (“U.S. Government Securities”).
(2) Direct obligations* of the following federal agencies which are fully guaranteed by the full faith and credit of the United States of America:
a. Export-Import Bank of the United States – Direct obligations and fully guaranteed certificates of beneficial interest
b. Federal Housing Administration – debentures c. General Services Administration – participation certificates d. Government National Mortgage Association (“GNMAs”) – guaranteed
mortgage-backed securities and guaranteed participation certificates e. Small Business Administration – guaranteed participation certificates and
guaranteed pool certificates
* The following are explicitly excluded from the securities enumerated in 2 and 3: (i) All derivative obligations, including without limitation inverse floaters, residuals, interest-only, principal-only and
range notes; (ii) Obligations that have a possibility of returning a zero or negative yield if held to maturity; (iii) Obligations that do not have a fixed par value or those whose terms do not promise a fixed dollar amount at maturity or
call date; and (iv) Collateralized Mortgage-Backed Obligations (“CMOs”).
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f. U.S. Department of Housing & Urban Development – local authority bonds g, U.S. Maritime Administration – guaranteed Title XI financings h. Washington Metropolitan Area Transit Authority – guaranteed transit bonds
(3) Direct obligations* of the following federal agencies which are not fully guaranteed by the faith and credit of the United States of America:
a. Federal National Mortgage Association (“FNMAs”) – senior debt obligations rated Aaa by Moody’s Investors Service (“Moody’s”) and AAA by Standard & Poor’s Ratings Services (“S&P”)
b. Federal Home Loan Mortgage Corporation (“FHLMCs”) – participation certificates and senior debt obligations rated Aaa by Moody’s and AAA by S&P
c. Federal Home Loan Banks – consolidated debt obligations d. Student Loan Marketing Association – debt obligations e. Resolution Funding Corporation – debt obligations
(4) Direct, general obligations of any state of the United States of America or any subdivision or agency thereof whose uninsured and unguaranteed general obligation debt is rated, at the time of purchase, A2 or better by Moody’s and A or better by S&P, or any obligation fully and unconditionally guaranteed by any state, subdivision or agency whose uninsured and unguaranteed general obligation debt is rated, at the time of purchase, A2 or better by Moody’s and A or better by S&P.
(5) Commercial paper (having original maturities of not more than 270 days) rated, at the time of purchase, P-1 by Moody’s and A-1 or better by S&P.
(6) Certificates of deposit, savings accounts, deposit accounts or money market deposits in amounts that are continuously and fully insured by the Federal Deposit Insurance Corporation (“FDIC”), including the Bank Insurance Fund and the Savings Association Insurance Fund, and including funds for which the Trustee or its affiliates provide investment advisory or other management services.
(7) Certificates of deposit, deposit accounts, federal funds or bankers’ acceptances (in each case having maturities of not more than 365 days following the date of purchase) of any domestic commercial bank or United States branch office of a foreign bank, provided that such bank’s short-term certificates of deposit are rated P-1 by Moody’s and A-1 or better by S&P (not considering holding company ratings).
(8) Investments in money-market funds rated AAAm or AAAm-G by S&P, including funds for which the Trustee and its affiliates provide investment advisory or other management services.
(9) State-sponsored investment pools rated AA- or better by S&P.
(10) Repurchase agreements that meet the following criteria:
a. A master repurchase agreement or specific written repurchase agreement, substantially similar in form and substance to the Public Securities Association or Bond Market Association master repurchase agreement, governs the transaction.
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b. Acceptable providers shall consist of (i) registered broker/dealers subject to Securities Investors’ Protection Corporation (“SIPC”) jurisdiction or commercial banks insured by the FDIC, if such broker/dealer or bank has an uninsured, unsecured and unguaranteed rating of A3/P-1 or better by Moody’s and A-/A-1 or better by S&P, or (ii) domestic structured investment companies rated Aaa by Moody’s and AAA by S&P.
c. The repurchase agreement shall require termination thereof if the counterparty’s ratings are suspended, withdrawn or fall below A3 or P-1 from Moody’s, or A- or A-1 from S&P. Within ten (10) days, the counterparty shall repay the principal amount plus any accrued and unpaid interest on the investments.
d. The repurchase agreement shall limit acceptable securities to U.S. Government Securities and to the obligations of GNMA, FNMA or FHLMC described in 2(d), 3(a) and 3(b) above. The fair market value of the securities in relation to the amount of the repurchase obligation, including principal and accrued interest, is equal to a collateral level of at least 104% for U.S. Government Securities and 105% for GNMAs, FNMAs or FHLMCs. The repurchase agreement shall require (i) the Trustee or the Agent to value the collateral securities no less frequently than weekly, (ii) the delivery of additional securities if the fair market value of the securities is below the required level on any valuation date, and (iii) liquidation of the repurchase securities if any deficiency in the required percentage is not restored within two (2) business days of such valuation.
e. The repurchase securities shall be delivered free and clear of any lien to the Trustee or to an independent third party acting solely as agent (“Agent”) for the Trustee, and such Agent is (i) a Federal Reserve Bank, or (ii) a bank which is a member of the FDIC and which has combined capital, surplus and undivided profits or, if appropriate, a net worth, of not less than $50 million, and the Trustee shall have received written confirmation from such third party that such third party holds such securities, free and clear of any lien, as agent for the Trustee.
f. A perfected first security interest in the repurchase securities shall be created for the benefit of the Trustee, and the City and the Trustee shall receive an opinion of counsel as to the perfection of the security interest in such repurchase securities and any proceeds thereof.
g. The repurchase agreement shall have a term of one year or less, or shall be due on demand.
h. The repurchase agreement shall establish the following as events of default, the occurrence of any of which shall require the immediate liquidation of the repurchase securities:
(i) insolvency of the broker/dealer or commercial bank serving as the counterparty under the repurchase agreement;
(ii) failure by the counterparty to remedy any deficiency in the required collateral level or to satisfy the margin maintenance call under item 10(d) above; or
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(iii) failure by the counterparty to repurchase the repurchase securities on the specified date for repurchase.
(11) Investment agreements, collateralized at 102% of the principal amount thereof (also referred to as guaranteed investment contracts), that meet the following criteria:
a. A master agreement or specific investment agreement governs the transaction .
b. Acceptable providers of uncollateralized investment agreements shall consist of (i) domestic FDIC-insured commercial banks, or U.S. branches of foreign banks, rated at least Aa2 by Moody’s and AA by S&P; (ii) domestic insurance companies rated Aaa by Moody’s and AAA by S&P; and (iii) domestic structured investment companies rated Aaa by Moody’s and AAA by S&P.
c. Acceptable providers of collateralized investment agreements shall consist of (i) registered broker/dealers subject to SIPC jurisdiction, if such broker/dealer has an uninsured, unsecured and unguaranteed rating of Al or better by Moody’s and A+ or better by S&P; (ii) domestic FDIC-insured commercial banks, or U.S. branches of foreign banks, rated at least A1 by Moody’s and A+ by S&P; (iii) domestic insurance companies rated at least A1 by Moody’s and A+ by S&P; and (iv) domestic structured investment companies rated Aaa by Moody’s and AAA by S&P. Required collateral levels shall be as set forth in 11(f) below.
d. The investment agreement shall provide that if the provider’s ratings fall below Aa3 by Moody’s or AA- by S&P, the provider shall within ten (10) days either (i) repay the principal amount plus any accrued and interest on the investment; or (ii) deliver Permitted Collateral as provided below.
e. The investment agreement must provide for termination thereof if the provider’s ratings are suspended, withdrawn or fall below A3 from Moody’s or A- from S&P. Within ten (10) days, the provider shall repay the principal amount plus any accrued interest on the agreement, without penalty to the City.
f. The investment agreement shall provide for the delivery of collateral described in (i) or (ii) below (“Permitted Collateral”) which shall be maintained at the following collateralization levels at each valuation date:
(i) U.S. Government Securities at 104% of principal plus accrued interest; or
(ii) Obligations of GNMA, FNMA or FHLMC (described in 2(d), 3(a) and 3(b) above) at 105% of principal and accrued interest.
g. The investment agreement shall require the Trustee to determine the market value of the Permitted Collateral not less than weekly and notify the investment agreement provider on the valuation day of any deficiency. Permitted Collateral may be released by the Trustee to the provider only to the extent that there are excess amounts over the required levels. Market value, with respect to collateral, may be determined by any of the following methods:
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(i) the last quoted “bid” price as shown in Bloomberg, Interactive Data Systems, Inc., The Wall Street Journal or Reuters;
(ii) valuation as performed by a nationally recognized pricing service, whereby the valuation method is based on a composite average of various bid prices; or
(iii) the lower of two bid prices by nationally recognized dealers. Such dealers or their parent holding companies shall be rated investment grade and shall be market makers in the securities being valued.
h. Securities held as Permitted Collateral shall be free and clear of all liens and claims of third parties, held in a separate custodial account and registered in the name of the Trustee or the Agent.
i. The provider shall grant the Trustee a perfected first security interest in any collateral delivered under an investment agreement. For investment agreements collateralized initially and in connection with the delivery of Permitted Collateral under 11(f) above, the Trustee shall receive an opinion of counsel as to the perfection of the security interest in the collateral.
j. The investment agreement shall provide that moneys invested under the agreement must be payable and putable at par to the Trustee without condition, breakage fee or other penalty, upon not more than two (2) business days’ notice, or immediately on demand for any reason for which the funds invested may be withdrawn from the applicable fund or account established under the authorizing document, as well as the following:
(i) In the event of a deficiency in the debt service account; (ii) Upon acceleration after an event of default; (iii) Upon refunding of the Bonds in whole or in part; (iv) Reduction of any debt service reserve requirement for the
Bonds; or (v) If a determination is later made by a nationally recognized
bond counsel that investments must be yield-restricted.
Notwithstanding the foregoing, the agreement may provide for a breakage fee or other penalty that is payable in arrears and not as a condition of a draw by the Trustee if the City’s obligation to pay such fee or penalty is subordinate to its obligation to pay debt service on the Bonds and to make deposits to any debt service reserve fund established for the Bonds.
(k) The investment agreement shall establish the following as events of default, the occurrence of any of which shall require the immediate liquidation of the investment securities:
(i) Failure of the provider or the guarantor (if any) to make a payment when due or to deliver Permitted Collateral of the character, at the times or in the amounts described above;
(ii) Insolvency of the provider or the guarantor (if any) under the investment agreement;
(iii) Failure by the provider to remedy any deficiency with respect to required Permitted Collateral;
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(iv) Failure by the provider to make a payment or observe any covenant under the agreement;
(v) The guaranty (if any) is terminated, repudiated or challenged; or
(vi) Any representation of warranty furnished to the Trustee or the issuer in connection with the agreement is false or misleading.
(l) The investment agreement must incorporate the following general criteria:
(i) “Cure periods” for payment default shall not exceed two (2) business days;
(ii) The agreement shall provide that the provider shall remain liable for any deficiency after application of the proceeds of the sale of any collateral, including costs and expenses incurred by the Trustee;
(iii) If the investment agreement is for a debt service reserve fund, reinvestments of funds shall be required to bear interest at a rate at least equal to the original contract rate.
(iv) The provider shall be required to immediately notify the Trustee of any event of default or any suspension, withdrawal or downgrade of the provider’s ratings;
(v) The agreement shall be unconditional and shall expressly disclaim any right of set-off or counterclaim.
(12) Forward delivery agreements in which the securities delivered mature on or before each interest payment date (for debt service or debt service reserve funds) or draw down date (construction funds) that meet the following criteria:
(a) A specific written investment agreement governs the transaction .
(b) Acceptable providers shall be limited to (i) any registered broker/dealer subject to the Securities Investors’ Protection Corporation jurisdiction, if such broker/dealer or bank has an uninsured, unsecured and unguaranteed obligation rated A3/P-1 or better by Moody’s and A-/A-1 or better by S&P; (ii) any commercial bank insured by the FDIC, if such bank has an uninsured, unsecured and unguaranteed obligation rated A3/P-1 or better by Moody’s and A-/A-1 or better by S&P; and (iii) domestic structured investment companies rated Aaa by Moody’s and AAA by S&P.
(c) The forward delivery agreement shall provide for termination or assignment (to a qualified provider hereunder) of the agreement if the provider’s ratings are suspended, withdrawn or fall below A3 or P-1 from Moody’s or A- or A-1 from S&P. Within ten (10) days, the provider shall fulfill any obligations it may have with respect to shortfalls in market value. There shall be no breakage fee payable to the provider in such event.
(d) Permitted securities shall include the investments listed in 1, 2 and 3 above.
(e) The forward delivery agreement shall include the following provisions:
(i) The permitted securities must mature at least one (1) business day before a debt service payment date or scheduled draw. The
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maturity amount of the permitted securities must equal or exceed the amount required to be in the applicable fund on the applicable valuation date.
(ii) The agreement shall include market standard termination provisions, including the right to terminate for the provider’s failure to deliver qualifying securities or otherwise to perform under the agreement. There shall be no breakage fee or penalty payable to the provider in such event.
(iii) Any breakage fees shall be payable only on debt service payment dates and shall be subordinated to the payment of debt service and debt service reserve fund replenishments.
(iv) The provider must submit at closing a bankruptcy opinion to the effect that upon any bankruptcy, insolvency or receivership of the provider, the securities will not be considered to be a part of the provider’s estate.
(13) Forward delivery agreements in which the securities delivered mature after the funds may be required but provide for the right of the City or the Trustee to put the securities back to the provider under a put, guaranty or other hedging arrangement.
(14) Maturity of investments shall be governed by the following:
a. Investments of monies (other than reserve funds) shall be in securities and obligations maturing not later than the dates on which such monies will be needed to make payments.
b. Investments shall be considered as maturing on the first date on which they are redeemable without penalty at the option of the holder or the date on which the Trustee may require their repurchase pursuant to repurchase agreements.
c. Investments of monies in reserve funds not payable upon demand shall be restricted to maturities of five years or less.
(15) Any other investment which the City is permitted by law to make, including without limitation investment in the Local Agency Investment Fund of the State of California (LAIF), provided that any investment of the type authorized pursuant to paragraphs (d), (f), (h) and (i) of Section 53601 of the California Government Code are additionally restricted as provided in the appropriate paragraph or paragraphs above applicable to such type of investment and provided further that investments authorized pursuant to paragraphs (k) and (m) of Section 53601 are not permitted.
To the extent that any of the requirements concerning Permitted Investments embodies a legal conclusion, the Trustee shall be entitled to conclusively rely upon a certificate from the appropriate party or an opinion from counsel to such party, that such requirement has been met.
“PERS” means the California Public Employees’ Retirement System.
“PERS Contract” has the meaning assigned that term in the Recitals to the Trust Agreement.
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“Principal Office or Principal Corporate Trust Office” means the corporate trust office of the Trustee located at 633 West Fifth Street, 24th Floor, Los Angeles, California, Attention: Corporate Trust Services, or such other or additional offices as may be designated in writing by the Trustee; provided, however, that for the purposes of payment, transfer or exchange of Bonds such term means c/o U.S. Bank National Association, 60 Livingston Avenue, St. Paul, Minnesota 55107, Attention: Corporate Trust, or at such other address as may be designated in writing by the Trustee.
“Purchaser” means, with respect to the 2010 Bonds, Wedbush Securities Inc., and with respect to the 2017 Bonds, Hilltop Securities Inc.
“Rating Agencies” means Moody’s and S&P.
“Rating Category” means (a) with respect to any long-term rating category, all ratings designated by a particular letter or combination of letters, without regard to any numerical modifier, plus or minus sign or other modifier and (b) with respect to any short-term or commercial paper rating category, all ratings designated by a particular letter or combination of letters and taking into account any numerical modifier, but not any plus or minus sign or other modifier.
“Record Date” means the fifteenth day of the calendar month preceding each Interest Payment Date.
“Redemption Fund” means the Fund of that name established pursuant to the Trust Agreement.
“Refunding Law” has the meaning assigned that term in the Recitals to the Trust Agreement.
“Registrar” means, for purposes of the Trust Agreement, the Trustee or its successor or assignee.
“Representation Letter” means the Letter of Representations from the City and the Trustee to DTC with respect to the Bonds.
“Requisition” or “Written Requisition” means, with respect to the 2010 Bonds, a Requisition or Written Requisition, substantially in the form of Exhibit “C” to the Master Trust Agreement, and with respect to the 2017 Bonds, a Requisition or Written Requisition, substantially in the form of Exhibit “B” to the First Supplemental Trust Agreement.
“Responsible Officer” means an officer of the Trustee assigned by the Trustee to administer the Trust Agreement.
“Retirement Law” has the meaning assigned that term in the Recitals to the Trust Agreement.
“Retirement Tax Revenues” means all of the revenues received by or payable to the City from the ad valorem tax override levied annually by the City in order to pay for the City’s obligations with respect to its employees’ retirement benefits.
“Revenue Fund” means the Fund of that name established pursuant to the Trust Agreement.
“S&P” means Standard & Poor’s Corporation, a corporation organized and existing under the laws of the State of New York, and its successors, and if such corporation shall for any reason no longer perform the functions of a securities rating agency, “S&P” shall be deemed to refer to any other nationally recognized securities rating agency designated by the City.
“Securities Depositories” means any of The Depository Trust Company or, in accordance with then-current guidelines of the Securities and Exchange Commission, such other securities depositories, or if no such depositories, as the City may indicate in a certificate of the City delivered to the Trustee.
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“State” means the State of California.
“Total Bond Obligation” means, as of any date of calculation, the aggregate principal amount of the Bonds then Outstanding.
“Trust Agreement” means the Trust Agreement dated as of June 1, 2010 between the City and the Trustee, as it may be amended, supplemented or otherwise modified from time to time.
“Trustee” means the entity named as such in the heading of the Trust Agreement until a successor replaces it, and thereafter means such successor.
“Unfunded Liability” has the meaning assigned that term in the Recitals to the Trust Agreement.
EXECUTION, AUTHENTICATION AND EXCHANGE OF BONDS; BOOK ENTRY BONDS
Execution and Authentication; Registration.
(a) The Bonds will be signed for the City with the manual or facsimile signature of the Mayor of the City. The City may deliver to the Trustee or its agent duly executed Bonds for authentication from time to time by the Trustee or its agent as such Bonds may be required. Bonds executed and so delivered and authenticated will be valid. In case any officer of the City whose signature or whose facsimile signature shall appear on any Bonds shall cease to be such officer before the authentication of such Bonds, such signature or the facsimile signature thereof shall nevertheless be valid and sufficient for all purposes the same as if he or she had remained in office until authentication. Also, if a person signing a Bond is the proper officer on the actual date of execution, the Bond will be valid even if that person is not the proper officer on the nominal date of action and even though, at the date of the Trust Agreement, such person was not such officer.
(b) A Bond will not be valid until the Trustee or its agent executes the certificate of authentication on such Bond by manual signature. Such signature will be conclusive evidence that such Bond has been authenticated under the Trust Agreement. The Trustee may appoint an authenticating agent acceptable to the City to authenticate Bonds. An authenticating agent may authenticate Bonds whenever the Trustee may do so. Each reference in the Trust Agreement to authentication by the Trustee includes authentication by such agent.
(c) Bonds may be presented at the Principal Office of the Trustee, unless a different office has been designated for such purpose, for registration, transfer and exchange. The Registrar will keep a register of such Bonds and of their transfer and exchange.
Transfer or Exchange of Bonds. Subject to the Trust Agreement:
(a) All Bonds shall be issued in fully registered form. Upon surrender for transfer of any Bond at the Principal Office of the Trustee, the Trustee shall deliver in the name of the transferee or transferees a new fully authenticated and registered Bond or Bonds of Authorized Denominations of the same maturity for the aggregate principal amount which the Bondholder is entitled to receive.
(b) All Bonds presented for transfer, redemption or payment shall be accompanied by a written instrument or instruments of transfer or authorization for exchange, in form and with guaranty of signature satisfactory to the City, duly executed by the Bondholder or by his duly authorized attorney. The Trustee also may require payment from the Bondholder of a sum sufficient to cover any tax, or other governmental fee or charge that may be imposed in relation thereto. Such taxes, fees and charges shall be paid before any such new Bond shall be delivered.
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(c) Bonds delivered upon any transfer as provided in the Trust Agreement, or as provided in the Trust Agreement, shall be valid obligations of the City, evidencing the same debt as the Bond surrendered, shall be secured by the Trust Agreement and shall be entitled to all of the security and benefits thereof to the same extent as the Bond surrendered.
(d) The City, the Trustee and the Paying Agent shall treat the Bondholder, as shown on the registration books kept by the Trustee, as the person exclusively entitled to payment of principal, premium, if any, and interest with respect to such Bond and to the exercise of all other rights and powers of the Bondholder, except that all interest payments will be made to the party who, as of the Record Date, is the Bondholder.
Mutilated, Lost, Stolen or Destroyed Bonds.
(a) In the event any Bond is mutilated or defaced but identifiable by number and description, the City shall execute and the Trustee shall authenticate and deliver a new Bond of like date, maturity and denomination as such Bond, upon surrender thereof to the Trustee; provided that there shall first be furnished to the City and the Trustee proof satisfactory to the Trustee that the Bond is mutilated or defaced. The Bondholder shall accompany the above with a deposit of money required by the City for the cost of preparing the substitute Bond and all other expenses connected with the issuance of such substitute. The City shall then cause proper record to be made of the cancellation of the original, and thereafter the substitute shall have the validity of the original.
(b) In the event any Bond is lost, stolen or destroyed, the City may execute and the Trustee may authenticate and deliver a new Bond of like date, maturity and denomination as that Bond lost, stolen or destroyed; provided that there shall first be furnished to the Trustee evidence of such loss, theft or destruction satisfactory to the Trustee, together with indemnity satisfactory to it.
(c) The City and the Trustee shall charge the holder of such Bond all transfer taxes, if any, and their reasonable fees and expenses in this connection. All substitute Bonds issued and authenticated pursuant to this section shall be issued as a substitute and numbered, if numbering is provided for by the Trustee, as determined by the Trustee. In the event any such Bond has matured or has been called for redemption, instead of issuing a substitute Bond, the Trustee may pay the same without surrender thereof upon receipt of indemnity satisfactory to the Trustee.
Destruction of Bonds. Whenever any Outstanding Bonds shall be delivered to the Trustee for cancellation pursuant to the Trust Agreement, upon payment of the principal amount and interest represented thereby or for replacement pursuant to the Trust Agreement or transfer pursuant to the Trust Agreement, such Bond shall be cancelled and destroyed by the Trustee and counterparts of a certificate of destruction evidencing such destruction shall, upon the City’s request, be furnished by the Trustee to the City.
Temporary Bonds.
(a) Pending preparation of definitive Bonds, the City may execute and the Trustee shall authenticate and deliver, in lieu of definitive Bonds and subject to the same limitation and conditions, interim receipts, certificates or temporary bonds which shall be exchanged for the Bonds.
(b) If temporary Bonds shall be issued, the City shall cause the definitive Bonds to be prepared and to be executed and delivered to the Trustee, and the Trustee, upon presentation to it of any temporary Bond, shall cancel the same and deliver in exchange therefor at the place designated by the Bondholder, without charge to the Bondholder thereof, definitive Bonds of an equal aggregate principal amount, of the same series, maturity and bearing interest at the same rate or rates as the temporary Bonds surrendered. Until so exchanged, the temporary Bonds shall in all respects be entitled to the same benefit and security of the Trust Agreement as the definitive Bonds to be issued and authenticated thereunder.
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SOURCE OF PAYMENT OF BONDS
Sources of Payment of Bonds; Annual Payment by the City.
(a) The City hereby irrevocably assigns and pledges to the Trustee, in trust for the security of the Holders upon the terms hereof, all the City’s right, title and interest in and to all money and securities for deposit in, or deposited in, the Revenue Fund, and all investment earnings thereon, and all collateral security for, and all proceeds of, any of the foregoing. The Trustee shall hold all such rights, title and interest received by it under this section and all money and securities (exclusive of money to which the Trustee is entitled in its own right as a fee, indemnity, reimbursement or otherwise) received from the City or derived from the exercise of the City’s powers hereunder in trust for the security of the Holders in accordance with the provisions hereof, and the City shall from time to time execute, deliver, file and record such instruments as the Trustee may reasonably require to confirm or maintain the security created hereby and the assignment and pledge hereby of the rights, title and interest assigned and pledged by the City to the Trustee hereunder.
(b) If any Bonds are Outstanding, the City shall, no later than fifteen (15) days prior to each Interest Payment Date, deliver funds to the Trustee for deposit to the Revenue Fund in an aggregate amount equal to the Deposit Amount (less amounts on deposit in the Revenue Fund) for the Payment Calculation Period ending on the applicable Interest Payment Date. The City shall fund such amount from (i) Retirement Tax Revenues and (ii) any other source of legally available funds of the City, to the extent that the Retirement Tax Revenues are not available therefor.
For clarification purposes, Retirement Tax Revenues shall be considered “available” for funding the Deposit Amount in accordance with this subsection (b) pursuant to applicable law, including but not limited to Article XIIIA, Section 1(b)(1), of the California Constitution, as amended from time to time, as interpreted by Carman v. Alvord, 31 Cal.3d 318 (1982), Howard Jarvis Taxpayers Assn. v. County of Orange, 110 Cal.App.4th (2003), 88 Ops.Cal.Atty.Gen. 1 (2005), or any such successor court decisions and legal authorities as may be issued from time to time. As of the Closing Date for the 2017 Bonds and until such time as the foregoing legal authorities are amended or superseded in a manner that warrants a different allocation of funding between Retirement Tax Revenues and any other source of legally available funds of the City, as determined by Bond Counsel in consultation with the City Attorney, the City shall fund each Deposit Amount as follows: (A) with respect to the portion of the Deposit Amount attributable to refunding the 2010 Bonds, 76.8 percent shall be funded from Retirement Tax Revenues, and 23.2 percent shall be funded from any other source of legally available funds of the City; and (B) with respect to the balance of the Deposit Amount (being the portion attributable to refunding by the 2017 Bonds of certain Unfunded Liability not previously refunded by the 2010 Bonds), 79.0 percent shall be funded from Retirement Tax Revenues, and 21.0 percent shall be funded from any other source of legally available funds of the City.
For clarification purposes, “any other source of legally available funds of the City” includes, without limitation, the City’s Water Enterprise Fund and the City’s Sewer Enterprise Fund, solely to the extent of legally permissible costs allocable to each such fund for contribution to the Deposit Amount under (A) applicable law, including but not limited to Article XIIID of the California Constitution, as amended from time to time, and (B) present or future contractual obligations of the City which include a pledge of, and/or lien upon, revenues of the City’s water system or sewer system, as applicable, including without limitation the Installment Sale Agreement (Water System) and the Installment Sale Agreement (Sewer System), each dated as of March 1, 2016, and each by and between the City and the Monrovia Financing Authority, entered into in connection with the Monrovia Financing Authority’s Water and Sewer Revenue Bonds, Series 2016.
(c) The obligations of the City under the Bonds, including the obligation to make all payments of interest and principal when due, are obligations of the City that are absolute and unconditional, without any right of set-off or counterclaim. The Bonds do not constitute an obligation of the City for which the City is obligated to levy or pledge any form of taxation without limitation as to rate or amount upon property in the City. Neither the Bonds nor the obligation of the City to make payments on the Bonds constitute an
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indebtedness of the City, the State of California, or any of its political subdivisions within the meaning of any constitutional or statutory debt limitation or restriction.
CREATION OF CERTAIN FUNDS AND ACCOUNTS
Creation of Costs of Issuance Fund. There is created under the Trust Agreement a Fund to be held by the Trustee designated “City of Monrovia Taxable Pension Obligation Bonds, Series 2017 Costs of Issuance Fund” (the “Series 2017 Costs of Issuance Fund”). Funds on deposit in the Series 2017 Costs of Issuance Fund shall be used to pay or to reimburse the City for the payment of Costs of Issuance. Amounts in the Series 2017 Costs of Issuance Fund shall be disbursed by the Trustee upon Written Requisition in the form of an exhibit attached to this First Supplemental Trust Agreement, executed by an Authorized City Representative.
At such time as the City delivers to the Trustee written notice that all Costs of Issuance have been paid or otherwise notifies the Trustee in writing that no additional amounts from the Series 2017 Costs of Issuance Fund will be needed to pay Costs of Issuance, or no later than 180 days after the Closing Date for the 2017 Bonds, the Trustee shall transfer all amounts then remaining in the Series 2017 Costs of Issuance Fund to the Bond Interest Account of the Revenue Fund unless otherwise directed by the City. At such time as no amounts remain in the Series 2017 Costs of Issuance Fund, such Series 2017 Costs of Issuance Fund shall be closed.
Creation of Revenue Fund and Certain Accounts. There is created under the Trust Agreement a Fund to be held by the Trustee designated “City of Monrovia Taxable Pension Obligation Bonds, Series 2017 Revenue Fund” (the “Revenue Fund”). There are hereby created in the Revenue Fund two separate Accounts designated “Bond Interest Account” and “Bond Principal Account”.
(a) All amounts received by the Trustee from the City in respect of interest payments on the Bonds shall be deposited in the Bond Interest Account and shall be disbursed to the Bondholders to pay interest on the Bonds. All amounts held at any time in the Bond Interest Account (including amounts deposited pursuant to the Trust Agreement) shall be held for the security and payment of interest on the Bonds pursuant to the Trust Agreement. If at any time funds on deposit in the Bond Interest Account are insufficient to provide for the payment of such interest, the City shall promptly deposit funds to such Account to cure such deficiency. On May 2 of each year beginning in 2011, so long as no Event of Default has occurred and is continuing, the Trustee shall wire transfer all amounts on deposit in the Bond Interest Account not required for payment of interest on the Bonds to the City to be used for any lawful purpose.
(b) All amounts received by the Trustee from the City in respect of principal payments on the Bonds shall be deposited in the Bond Principal Account and all amounts in the Bond Principal Account will be disbursed to pay principal on the Bonds pursuant to the Trust Agreement. If at any time funds on deposit in the Bond Principal Account are insufficient to provide for the payment of such principal, the City shall promptly deposit funds to such Account to cure such deficiency.
(c) The moneys in such Fund and Accounts shall be held by the Trustee in trust and applied as provided in the Trust Agreement and, pending such application, shall be subject to a lien and charge in favor of the holders of the Bonds issued and Outstanding under the Trust Agreement and for the further security of such holders until paid or transferred as provided in the Trust Agreement.
Creation of Redemption Fund. A Fund to be held by the Trustee is created under the Trust Agreement and designated the “City of Monrovia Taxable Pension Obligation Bonds, Series 2017 Redemption Fund” (the “Redemption Fund”). All moneys deposited by the City with the Trustee for the purpose of redeeming Bonds shall be deposited in the Redemption Fund. All amounts deposited in the Redemption Fund shall be used and withdrawn by the Trustee solely for the purpose of redeeming Bonds in the manner, at the times and upon the terms and conditions specified in the Trust Agreement; provided that, at any time prior to giving such notice of redemption, the Trustee shall, upon receipt of written instructions from an Authorized
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City Representative, apply such amounts to the purchase of Bonds at public or private sale, as and when and at such prices (including brokerage and other charges) as directed by the City.
Moneys Held in Redemption Fund. All moneys which shall have been withdrawn from the Revenue Fund and deposited in the Redemption Fund for the purpose of paying any of the Bonds secured under the Trust Agreement, either at the maturity thereof or upon call for redemption, shall be held in trust for the respective holders of such Bonds.
Unclaimed Moneys. Any moneys which shall be set aside or deposited in the Redemption Fund, the Bond Principal Account, the Bond Interest Account or any other Fund or Account for the benefit of holders of Bonds and which shall remain unclaimed by the holders of such Bonds for a period of one year after the date on which such Bonds shall have become due and payable (or such longer period as shall be required by State law) shall be paid to the City, and thereafter the holders of such Bonds shall look only to the City for payment and the City shall be obligated to make such payment, but only to the extent of the amounts so received without any interest thereon, and the Trustee and any Paying Agent shall have no responsibility with respect to any of such moneys.
CONCERNING PAYING AGENT
Paying Agent; Appointment and Acceptance of Duties. The City appoints the Trustee as the Paying Agent for the Bonds.
Paying Agent - General Responsibilities.
(a) The City may at any time or from time to time appoint a different Paying Agent or Paying Agents for the Bonds, and each Paying Agent, if other than the Trustee, shall be a commercial bank with trust powers and shall designate to the City and the Trustee its principal office and signify its acceptance of the duties and obligations imposed upon it under the Trust Agreement by a written instrument of acceptance delivered to the City under which each such Paying Agent will agree, particularly:
(i) to hold all sums held by it for the payment of the principal of, and premium or interest on, Bonds in trust for the benefit of the Bondholders until such sums shall be paid to such Bondholders or otherwise disposed of as provided under the Trust Agreement;
(ii) to keep such books and records as shall be consistent with prudent industry practice, to make such books and records available for inspection by the City and the Trustee at all reasonable times; and
(iii) upon the request of the Trustee, to forthwith deliver to the Trustee all sums so held in trust by such Paying Agent.
(b) The Paying Agent shall perform the duties and obligations set forth in the Trust Agreement, and in particular shall hold all sums delivered to it by the Trustee for the payment of principal or premium of and interest on the Bonds in trust for the benefit of the Bondholders until such sums shall be paid to such Bondholders or otherwise disposed of as provided under the Trust Agreement.
(c) In performing its duties under the Trust Agreement, the Paying Agent shall be entitled to all of the rights, protections and immunities accorded to the Trustee under the terms of the Trust Agreement.
Certain Permitted Acts. Any Fiduciary may become the owner of any Bonds, with the same rights it would have if it were not a Fiduciary. To the extent permitted by law, any Fiduciary may act as depositary for, and permit any of its officers or directors to act as a member of, or in any other capacity with respect to, any
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committee formed to protect the rights of Bondholders or to effect or aid in any reorganization growing out of the enforcement of the Bonds or the Trust Agreement, whether or not any such committee shall represent the owners of a majority in Total Bond Obligation of the Bonds then Outstanding.
Resignation or Removal of Paying Agent and Appointment of Successor.
(a) Any Paying Agent may at any time resign and be discharged of the duties and obligations created by the Trust Agreement in accordance with the provisions set forth in the Trust Agreement for the removal of the Trustee by giving at least 60 days’ written notice to the City and the other Fiduciaries. Any Paying Agent may be removed at any time upon 30 days prior written notice by an instrument filed with such Paying Agent and the Trustee and signed by an Authorized City Representative. Any successor Paying Agent shall be appointed by the City with the approval of the Trustee and shall be a commercial bank with trust powers or trust company organized under the laws of any state of the United States, having capital stock and surplus aggregating at least $100,000,000, and willing and able to accept the office on reasonable and customary terms and authorized by law to perform all the duties imposed upon it by the Trust Agreement.
(b) In the event of the resignation or removal of any Paying Agent, such Paying Agent shall assign and deliver any moneys and Bonds, including authenticated Bonds, held by it to its successor, or if there be no successor, to the Trustee. In the event that for any reason there shall be a vacancy in the office of any Paying Agent, the Trustee shall act as such Paying Agent.
COVENANTS OF THE CITY
Payment of Principal and Interest. The City covenants and agrees that it will duly and punctually pay or cause to be paid the principal, premium, if any, and interest on every Bond at the place and on the dates and in the manner specified in the Trust Agreement and in the Bonds, according to the true intent and meaning thereof, and that it will faithfully do and perform all covenants and agreements contained in the Trust Agreement and in the Bonds and the City agrees that time is of the essence. The obligations of the City under the Bonds, including the obligation to make all payments of principal, premium, if any, and interest when due, are absolute and unconditional, without any right of set-off or counterclaim.
Performance of Covenants by City; Authority; Due Execution. The City covenants that it will faithfully perform at all times any and all covenants, undertakings, stipulations and provisions contained in the Trust Agreement, in any and every Bond executed, authenticated and delivered thereunder and in all of its proceedings pertaining thereto. The City covenants that it is duly authorized under the Constitution and laws of the State to issue the Bonds.
Instruments of Further Assurance. The City covenants that it will do, execute, acknowledge and deliver, or cause to be done, executed, acknowledged and delivered such further acts, instruments and transfers as the Trustee may reasonably request for the better assuring and confirming to the Trustee all the rights and obligations of the City under and pursuant to the Trust Agreement. The City shall, upon the reasonable request of the Trustee, from time to time execute and deliver such further instructions and take such further action as may be reasonable and as may be required to effectuate the purposes of the Trust Agreement or any provisions thereof; provided, however, that no such instruments or actions shall pledge the full faith and credit or the taxing powers of the State.
No Inconsistent Action. The City covenants that no contract or contracts will be entered into or any action taken by the City which shall be inconsistent with the provisions of the Trust Agreement.
No Adverse Action. The City covenants that it will not take any action which will have a material adverse effect upon the rights of the holders of the Bonds.
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Maintenance of Powers. The City covenants that it will at all times use its best efforts to maintain the powers, functions, duties and obligations now reposed in it pursuant to applicable law and will not at any time voluntarily do, suffer or permit any act or thing the effect of which would be to hinder, delay or imperil either the payment of the indebtedness evidenced by any of the Bonds or the performance or observance of any of the covenants contained in the Trust Agreement.
Covenants of City Binding on Successors.
(a) All covenants, stipulations, obligations and agreements of the City contained in the Trust Agreement shall be deemed to be covenants, stipulations, obligations and agreements of the City to the full extent authorized or permitted by law. If the powers or duties of the City shall be transferred by amendment of any provision of the Constitution or any other law of the State or in any other manner there shall be a successor to the City, and if such transfer shall relate to any matter or thing permitted or required to be done under the Trust Agreement by the City, then the entity that shall succeed to such powers or duties of the City shall act and be obligated in the place and stead of the City as provided in the Trust Agreement, and all such covenants, stipulations, obligations and agreements therein shall be binding upon such successor or successors thereof from time to time and upon any officer, board, body, district, authority or commission to whom or to which any power or duty affecting such covenants, stipulations, obligations and agreements shall be transferred by or in accordance with law.
(b) Except as otherwise provided in the Trust Agreement, all rights, powers and privileges conferred and duties and liabilities imposed upon the City by the provisions of the Trust Agreement shall be exercised or performed by the City or by such officers, board, body, district, authority or commission as may be required by law to exercise such powers or to perform such duties.
City and Trustee to Perform Pursuant to Continuing Disclosure Agreement. The City and the Trustee covenant and agree that they will comply with and carry out all of the provisions of the Continuing Disclosure Agreement. Notwithstanding any other provision of the Trust Agreement, failure of the City or the Trustee to comply with the Continuing Disclosure Agreement shall not be considered an Event of Default under the Trust Agreement; provided, however, the obligations of the City to comply with the provisions of the Continuing Disclosure Agreement shall be enforceable by any Holder of Outstanding Bonds, or by the Trustee on behalf of the Holders of Outstanding Bonds; provided, further, that the Trustee shall not be required to take any enforcement action whatsoever except at the written direction of the Holders of not less than a majority in aggregate principal amount of the Bonds at the time Outstanding who shall have provided the Trustee with security and indemnity to its satisfaction, including without limitation, attorney’s fees and expenses. The Holders’ and Trustee’s rights to enforce the provisions of the Continuing Disclosure Agreement shall be limited solely to a right, by action in mandamus or for specific performance, to compel performance of the City’s obligations under the Continuing Disclosure Agreement. Notwithstanding the foregoing, the City and the Trustee shall be entitled to amend or rescind the Continuing Disclosure Agreement to the extent permitted by law.
The Trustee agrees in the Trust Agreement to inform the City within three (3) Business Days after obtaining knowledge that any of the events listed in subsections (a) or (b) of Section 5 of the Continuing Disclosure Agreement with respect to the 2017 Bonds has occurred, or as soon as reasonably practicable thereafter, and in any event in sufficient time for the City to file a notice of such event within ten (10) business days after the occurrence of the event.
INVESTMENTS
Investments Authorized. Money held by the Trustee in any fund or account under the Trust Agreement shall be invested by the Trustee in Permitted Investments pending application as provided therein solely at the prior written direction of a City Representative, shall be registered in the name of the Trustee where applicable, as Trustee, and shall be held by the Trustee. The City shall direct the Trustee prior to 12:00
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p.m. Pacific time on the last Business Day before the date on which a Permitted Investment matures or is redeemed as to the reinvestment of the proceeds thereof. In the absence of such direction, the Trustee shall invest in investments authorized under clause (8) contained in the definition of “Permitted Investments.” The Trustee may rely on the City’s certification in such investment instructions that such investments are permitted by law and by any policy guidelines promulgated by the City. Money held in any fund or account under the Trust Agreement may be commingled for purposes of investment only.
The Trustee shall, with the prior written direction of the City, purchase from or sell to itself or any affiliate, as principal or agent, investments authorized by the Trust Agreement. Any investments and reinvestments shall be made after giving full consideration to the time at which funds are required to be available and to the highest yield practicably obtainable giving due regard to the safety of such funds and the date upon which such funds will be required for the uses and purposes required by the Trust Agreement. The Trustee or any of its affiliates may act as agent in the making or disposing of any investment and may act as sponsor or advisor with respect to any Permitted Investment. For investment purposes, the Trustee may commingle the funds and accounts established under the Trust Agreement, but shall account for each separately.
Valuation and Disposition of Investments. For the purpose of determining the amount in any fund or account under the Trust Agreement, all Permitted Investments shall be valued at the market value thereof not later than July 1 of each year. With the prior written approval of the City, the Trustee may sell at the best price obtainable, or present for redemption, any Permitted Investment so purchased by the Trustee whenever it shall be necessary in order to provide money to meet any required payment, transfer, withdrawal or disbursement from any fund or account under the Trust Agreement, and the Trustee shall not be liable or responsible for any loss resulting from such investment or sale, except any loss resulting from its own negligence or willful misconduct.
Application of Investment Earnings. Investments in any Fund or Account shall be deemed at all times to be a part of such Fund or Account, and any profit realized from such investment shall be credited to such Fund or Account and any loss resulting from such investment shall be charged to such Fund or Account. Interest earnings on investments in any Fund or Account shall be deposited in the Bond Interest Account of the Revenue Fund.
DEFEASANCE
Discharge of Bonds; Release of Trust Agreement. Bonds or portions thereof (such portions to be in an Authorized Denomination) which have been paid in full or which are deemed to have been paid in full shall no longer be entitled to the benefits of the Trust Agreement except for the purposes of payment from moneys, Defeasance Securities. When all Bonds which have been issued under the Trust Agreement have been paid in full or are deemed to have been paid in full, and all other sums payable under the Trust Agreement by the City, including all necessary and proper fees, compensation and expenses of the Trustee and any Paying Agents, have been paid or are duly provided for, then the Trustee shall cancel, discharge and release the Trust Agreement, shall execute, acknowledge and deliver to the City such instruments of satisfaction and discharge or release as shall be requisite to evidence such release and such satisfaction and discharge and shall assign and deliver to the City any amounts at the time subject to the Trust Agreement which may then be in the Trustee’s possession, except funds or securities in which such funds are invested and held by the Trustee or the Paying Agents for the payment of the principal, premium, if any, and interest on the Bonds.
Bonds Deemed Paid.
(a) A Bond shall be deemed to be paid within the meaning for all purposes of the Trust Agreement when (i) payment with respect thereto of the principal, interest and premium, if any, either (1) shall have been made or caused to be made in accordance with the terms of the Bonds and the Trust Agreement or (2) shall have been provided for, as certified to the Trustee by a Consultant which is a certified public
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accountant, by irrevocably depositing with the Trustee in trust and irrevocably setting aside exclusively for such payment: (x) moneys sufficient to make such payment, and/or (y) Defeasance Securities maturing as to principal and interest in such amounts and at such times as will insure the availability of sufficient moneys to make such payment, and (ii) all necessary and proper fees, compensation and expenses of the Trustee and any Paying Agents pertaining to the Bonds with respect to which such deposit is made shall have been paid or provision made for the payment thereof. At such times as Bonds shall be deemed to be paid under the Trust Agreement, such Bonds shall no longer be secured by or entitled to the benefits of the Trust Agreement, except for the purposes of payment from such moneys, Defeasance Securities.
(b) Notwithstanding the foregoing paragraph, no deposit under clause (i)(2) of the immediately preceding paragraph shall be deemed a payment of such Bonds until (i) proper notice of redemption of such Bonds shall have been given in accordance with the Trust Agreement, or in the event such Bonds are not to be redeemed within the next succeeding 60 days, until the City shall have given the Trustee irrevocable instructions to notify, as soon as practicable, the holders of the Bonds in accordance with the Trust Agreement, that the deposit required by clause (i)(2) above has been made with the Trustee and that such Bonds are deemed to have been paid in accordance with the Trust Agreement and stating the maturity or redemption date upon which moneys are to be available for the payment of the principal of, premium, if any, and unpaid interest on such Bonds; or (ii) the maturity of such Bonds.
(c) To accomplish defeasance, the City shall cause to be delivered (i) a report of an independent firm of nationally recognized certified public accountants (“Accountant”) verifying the sufficiency of the escrow established to pay the Bonds in full on the maturity or redemption date (“Verification”), (ii) an Escrow Agreement, (iii) an opinion of Bond Counsel to the effect that the Bonds are no longer “Outstanding” under the Trust Agreement and (iv) a certification of discharge of the Trustee with respect to the Bonds; each Verification and defeasance opinion shall be acceptable in form and substance, and addressed to the City and the Trustee.
Bonds shall be deemed “Outstanding” under the Trust Agreement unless and until they are in fact paid and retired or the above criteria are met.
DEFAULTS AND REMEDIES
Events of Default. Each of the following events shall constitute and is referred to in the Trust Agreement as an “Event of Default”:
(a) a failure to pay the principal or premium, if any, on any of the Bonds when the same shall become due and payable at maturity or upon redemption;
(b) a failure to pay any installment of interest on any of the Bonds when such interest shall become due and payable;
(c) a failure by the City to observe and perform any covenant, condition, agreement or provision (other than as specified in clauses (a) and (b) above) contained in the Bonds or in the Trust Agreement on the part of the City to be observed or performed, which failure shall continue for a period of 30 days after written notice, specifying such failure and requesting that it be remedied, shall have been given to the City by the Trustee; provided, however, that the Trustee shall be deemed to have agreed to an extension of such period if corrective action is initiated by the City within such period and is being diligently pursued; or
(d) if the City files a petition in voluntary bankruptcy, for the composition of its affairs or for its corporate reorganization under any state or federal bankruptcy or insolvency law, or makes an assignment for the benefit of creditors, or admits in writing to its insolvency or inability to pay debts as they mature, or consents in writing to the appointment of a trustee or receiver for itself.
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Upon its actual knowledge of the occurrence of any Event of Default, the Trustee shall immediately give written notice thereof to the City.
Remedies.
(a) Upon the occurrence and continuance of any Event of Default, the Trustee in its discretion may, and shall upon the written direction of the holders of a majority of the Total Bond Obligation of the Bonds then Outstanding, and, in each case, receipt of indemnity to its satisfaction, in its own name and as the Trustee of an express trust:
(1) by mandamus, or other suit, action or proceeding at law or in equity, enforce all rights of the Bondholders under the Trust Agreement, as the case may be, and require the City to carry out any agreements with or for the benefit of the Bondholders and to perform its or their duties under the Refunding Law or any other law to which it is subject and the Trust Agreement; provided that any such remedy may be taken only to the extent permitted under the applicable provisions of the Trust Agreement;
(2) bring suit upon the defaulted Bonds;
(3) commence an action or suit in equity to require the City to account as if it were the trustee of an express trust for the Bondholders; or
(4) by action or suit in equity enjoin any acts or things which may be unlawful or in violation of the rights of the Bondholders under the Trust Agreement.
(b) The Trustee shall be under no obligation to take any action with respect to any Event of Default unless the Trustee has actual knowledge of the occurrence of such Event of Default.
Restoration to Former Position. In the event that any proceeding taken by the Trustee to enforce any right under the Trust Agreement shall have been discontinued or abandoned for any reason, or shall have been determined adversely to the Trustee, then the City, the Trustee and the Bondholders shall be restored to their former positions and rights thereunder, respectively, and all rights, remedies and powers of the Trustee shall continue as though no such proceeding had been taken.
Bondholders’ Right to Direct Proceedings on their Behalf. Anything in the Trust Agreement to the contrary notwithstanding, holders of a majority in Total Bond Obligation of the Bonds then Outstanding shall have the right, at any time, by an instrument in writing executed and delivered to the Trustee, to direct the time, method and place of conducting all remedial proceedings on their behalf available to the Trustee under the Trust Agreement to be taken in connection with the enforcement of the terms of the Trust Agreement or exercising any trust or power conferred on the Trustee by the Trust Agreement; provided that such direction shall not be otherwise than in accordance with the provisions of the law and the Trust Agreement and that there shall have been provided to the Trustee security and indemnity satisfactory to the Trustee against the costs, expenses and liabilities to be incurred as a result thereof by the Trustee; provided further that the Trustee shall have the right to decline to follow any such direction which in the opinion of the Trustee would be unjustly prejudicial to Bondholders not parties to such direction.
Limitation on Bondholders’ Rights to Institute Proceedings. No owner of any Bond shall have the right to institute any suit, action or proceeding at law in equity, for the protection or enforcement of any right or remedy under the Trust Agreement, or applicable law with respect to such Bond, unless (a) such owner shall have given to the Trustee written notice of the occurrence of an Event of Default; (b) the owners of not less than a majority in Total Bond Obligation of the Bonds then Outstanding shall have made written request upon the Trustee to exercise the powers granted under the Trust Agreement or to institute such suit, action or proceeding in its own name; (c) such owner or said owners shall have tendered to the Trustee reasonable
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indemnity against the costs, expenses and liabilities to be incurred in compliance with such request; (d) the Trustee shall have refused or failed to comply with such request for a period of 60 days after such written request shall have been received by and said tender of indemnity shall have been made to, the Trustee and (e) the Trustee shall not have received contrary directions from the owners of a majority in aggregate principal amount of the Bonds then Outstanding.
No Impairment of Right to Enforce Payment. Notwithstanding any other provision in the Trust Agreement, the right of any Bondholder to receive payment of the principal of and interest on such Holder’s Bond, on or after the respective due dates expressed therein, or to institute suit for the enforcement of any such payment on or after such respective date, shall not be impaired or affected without the consent of such Bondholder.
Proceedings by Trustee Without Possession of Bonds. All rights of action under the Trust Agreement or under any of the Bonds secured by the Trust Agreement which are enforceable by the Trustee may be enforced by it without the possession of any of the Bonds, or the production thereof at the trial or other proceedings relative thereto, and any such suit, action or proceeding instituted by the Trustee shall be brought in its name for the equal and ratable benefit of the Bondholders, as the case may be, subject to the provisions of the Trust Agreement.
No Remedy Exclusive. No remedy conferred upon or reserved to the Trustee or to Bondholders under the Trust Agreement is intended to be exclusive of any other remedy or remedies, and each and every such remedy shall be cumulative, and shall be in addition to every other remedy given under the Trust Agreement, or existing at law or in equity or by statute; provided, however, that any conditions set forth in the Trust Agreement to the taking of any remedy to enforce the provisions of the Trust Agreement or the Bonds shall also be conditions to seeking any remedies under any of the foregoing pursuant to the Trust Agreement.
No Waiver of Remedies. No delay or omission of the Trustee or of any Bondholder to exercise any right or power accruing upon any default shall impair any such right or power or shall be construed to be a waiver of any such default, or an acquiescence therein and every power and remedy given by the Trust Agreement to the Trustee and to the Bondholders, respectively, may be exercised from time to time and as often as may be deemed expedient.
Application of Moneys.
(a) Any moneys received by the Trustee for the benefit of Bondholders, by any receiver or by any Bondholder pursuant to any right given or action taken under the provisions of the Trust Agreement, after payment of the costs and expenses of the proceedings resulting in the collection of such moneys and of the fees, expenses, liabilities and advances incurred or made by the Trustee (including without limitation reasonable fees and reasonable expenses of its attorneys), shall be deposited in the Revenue Fund and all moneys so deposited in the Revenue Fund during the continuance of an Event of Default shall be applied (i) first, to the payment to the persons entitled thereto of all installments of interest then due on the Bonds, with interest on overdue installments, if lawful, at the rate per annum borne by the Bonds, as the case may be, in the order of maturity of the installments of such interest (if the amount available for such interest installments shall not be sufficient to pay in full any particular installment of interest, then to the payment ratably, according to the amounts due on such installment), and if the amount available for such interest shall not be sufficient to make payment thereof, then to the payment thereof ratably according to the respective aggregate amounts due and (ii) second, to the payment to the persons entitled thereto of the unpaid principal, as applicable, of any of the Bonds which shall have become due with interest on such Bonds at their respective rate from the respective dates upon which they became due (if the amount available for such unpaid principal and interest shall not be sufficient to pay in full Bonds due on any particular date, together with such interest, then to the payment ratably, according to the amount of principal and interest due on such date, in each case to the persons entitled thereto, without any discrimination or privilege among holders of Bonds), and, if the amount available for such
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principal and interest shall not be sufficient to make full payment thereof, then to the payment thereof ratably according to the respective aggregate amounts due.
(b) Whenever moneys are to be applied pursuant to the provisions of the Trust Agreement, such moneys shall be applied at such times, and from time to time, as the Trustee shall determine, having due regard to the amount of such moneys available for application and the likelihood of additional moneys becoming available for such application in the future. Whenever the Trustee shall apply such funds, it shall fix the date (which shall be an Interest Payment Date unless it shall deem another date more suitable) upon which such application is to be made and upon such date interest on the amounts to be paid on such date shall cease to accrue. The Trustee shall give notice of the deposit with it of any such moneys and of the fixing of any such date by Mail to all Bondholders and shall not be required to make payment to any Bondholder until such Bonds shall be presented to the Trustee for appropriate endorsement or for cancellation if fully paid.
Severability of Remedies. It is the purpose and intention of the Trust Agreement to provide rights and remedies to the Trustee and the Bondholders which may be lawfully granted under the provisions of applicable law, but should any right or remedy therein granted be held to be unlawful, the Trustee and the Bondholders shall be entitled, as above set forth, to every other right and remedy provided in the Trust Agreement and by applicable law.
Additional Events of Default and Remedies. So long as any Bonds are Outstanding, the Events of Default and remedies as set forth in the Trust Agreement may be supplemented with additional Events of Default and remedies as set forth from time to time in a supplemental agreement.
TRUSTEE; REGISTRAR
Acceptance of Trusts. The Trustee accepts and agrees to execute the trusts specifically imposed upon it by the Trust Agreement, but only upon the additional terms set forth in the Trust Agreement, to all of which the City agrees and the respective Bondholders agree by their acceptance of delivery of any of the Bonds.
Duties of Trustee.
(a) If an Event of Default has occurred and is continuing, the Trustee shall exercise its rights and powers and use the same degree of care and skill in their exercise as a prudent person would exercise or use under the circumstances in the conduct of such person’s own affairs.
(b) Except during the continuance of an Event of Default:
(i) the Trustee need perform only those duties that are specifically set forth in the Trust Agreement and no others; and
(ii) in the absence of negligence on its part, the Trustee may conclusively rely, as to the truth of the statements and the correctness of the opinions expressed, upon certificates or opinions furnished to the Trustee and conforming to the requirements of the Trust Agreement. However, the Trustee shall examine the certificates and opinions to determine whether they conform to the requirements of the Trust Agreement.
(c) The Trustee may not be relieved from liability for its own negligent action, its own negligent failure to act or its own willful misconduct, except that:
(i) this paragraph does not limit the effect of the Trust Agreement;
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(ii) the Trustee shall not be liable for any error of judgment made in good faith by a Responsible Officer unless the Trustee was negligent in ascertaining the pertinent facts;
(iii) the Trustee shall not be liable with respect to any action it takes or fails to take in good faith in accordance with a direction received by it from Bondholders or the City in the manner provided in the Trust Agreement; and
(iv) no provision of the Trust Agreement shall require the Trustee to expend or risk its own funds or otherwise incur any financial liability in the performance of any of its duties thereunder or in the exercise of any of its rights or powers if repayment of such funds or adequate indemnity against such risk or liability is not reasonably assured to it.
(d) Every provision of the Trust Agreement that in any way relates to the Trustee is subject to the Trust Agreement.
(e) The Trustee may refuse to perform any duty or exercise any right or power unless it receives indemnity reasonably satisfactory to it against any loss, liability or expense.
(f) The Trustee shall not be liable for interest on any cash held by it except as the Trustee may agree with the City.
Rights of Trustee.
(a) The recitals of facts contained in the Trust Agreement and in the Bonds shall be taken as statements of the City, and the Trustee assumes no responsibility for the correctness of the same (other than the certificate of authentication of the Trustee on each Bond), and makes no representations as to the validity or sufficiency of the Trust Agreement or of the Bonds or of any Permitted Investment and shall not incur any responsibility in respect of any such matter, other than in connection with the duties or obligations expressly assigned to or imposed upon it in the Trust Agreement or in the Bonds. The Trustee shall, however, be responsible for its representations contained in its certificate of authentication on the Bonds. The Trustee shall not be liable in connection with the performance of its duties under the Trust Agreement, except for its own negligence, willful misconduct or breach of the express terms and conditions thereof. The Trustee and its directors, officers, employees or agents may in good faith buy, sell, own, hold and deal in any of the Bonds and may join in any action which any Owner of a Bond may be entitled to take, with like effect as if the Trustee was not the Trustee under the Trust Agreement.
(b) The Trustee may execute any of the trusts or powers of the Trust Agreement and perform the duties required of it thereunder by or through attorneys, agents or receivers, and shall be entitled to advice of counsel concerning all matters of trust and its duty thereunder, and the opinion of such counsel shall be authorization for any action taken or not taken in reliance on such opinion, but the Trustee shall be answerable for the negligence or misconduct of any such attorney, agent or receiver selected by it.
(c) No permissive power, right or remedy conferred upon the Trustee under the Trust Agreement shall be construed to impose a duty to exercise such power, right or remedy.
(d) The Trustee shall not be bound to make any investigation into the facts or matters stated in any resolution, certificate, statement, instrument, opinion, report, notice, request, direction, consent, order, bond, debenture, coupon or other paper or document but the Trustee, in its discretion, may make such further inquiry or investigation into such facts or matters as it may see fit, and, if the Trustee shall determine to make such further inquiry or investigation, it shall be entitled to examine the books, records and premises of the City, personally or by agent or attorney.
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(e) The Trustee shall not be responsible for the application or handling by the City of any moneys transferred to or pursuant to any requisition or request of the City in accordance with the terms and conditions of the Trust Agreement.
(f) Whether or not therein expressly so provided, every provision of the Trust Agreement relating to the conduct or affecting the liability of or affording protection to the Trustee shall be subject to the provisions of the Trust Agreement.
(g) The Trustee shall be protected in acting upon any notice, resolution, request, consent, order, certificate, report, facsimile transmission, electronic mail, opinion, note or other paper or document believed by it to be genuine and to have been signed or presented by the proper party or parties.
(h) The Trustee shall not be considered in breach of or in default in its obligations under the Trust Agreement or progress in respect thereto in the event of enforced delay (“unavoidable delay”) in the performance of such obligations due to unforeseeable causes beyond its control and without its fault or negligence, including, but not limited to, Acts of God or of the public enemy or terrorists, acts of a government, acts of the other party, fires, floods, epidemics, quarantine restrictions, strikes, freight embargoes, earthquakes, explosion, mob violence, riot, inability to procure or general sabotage or rationing of labor, equipment, facilities, sources of energy, material or supplies in the open market, litigation or arbitration involving a party or others relating to zoning or other governmental action or inaction pertaining to the project, malicious mischief, condemnation, and unusually severe weather or delays of suppliers or subcontractors due to such causes or any similar event and/or occurrences beyond the control of the Trustee; provided, that in the event of any such enforced delay, the Trustee shall notify the City in writing within ten Business Days after the occurrence of the event giving rise to such delay.
(i) The Trustee agrees to accept and act upon facsimile transmission of written instructions and/or directions pursuant to the Trust Agreement provided, however, that: (x) subsequent to such facsimile transmission of written instructions and/or directions the Trustee shall forthwith receive the originally executed instructions and/or directions, (y) such originally executed instructions and/or directions shall be signed by a person as may be designated and authorized to sign for the party signing such instructions and/or directions, and (z) the Trustee shall have received a current incumbency certificate containing the specimen signature of such designated person.
Individual Rights of Trustee. The Trustee in its individual or any other capacity may become the owner or pledgee of Bonds and may otherwise deal with the City with the same rights it would have if it were not Trustee. Any Paying Agent or other agent may do the same with like rights.
Trustee’s Disclaimer. The Trustee makes no representations as to the validity or adequacy of the Trust Agreement or the Bonds, it shall not be accountable for the City’s use of the proceeds from the Bonds paid to the City and it shall not be responsible for any statement in any official statement or other disclosure document or in the Bonds other than its certificate of authentication.
Notice of Defaults. If an event occurs which with the giving of notice or lapse of time or both would be an Event of Default, and if the event is continuing and if it is actually known to the Trustee, the Trustee shall mail to each Bondholder notice of the event within 90 days after it occurs. Except in the case of a default in payment or purchase on any Bonds, the Trustee may withhold the notice to Bondholders if and so long as a committee of its Responsible Officers in good faith determines that withholding the notice is in the interests of the Bondholders.
Eligibility of Trustee. The Trust Agreement shall always have a Trustee that is a trust company, a bank or association having trust powers and is organized and doing business under the laws of the United States or any state or the District of Columbia, is subject to supervision or examination by United States, state
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or District of Columbia authority and has a combined capital and surplus of at least $100,000,000 as set forth in its most recent published annual report of condition.
Replacement of Trustee.
(a) The Trustee may resign as trustee by notifying the City in writing prior to the proposed effective date of the resignation. The holders of a majority in Total Bond Obligation of the Bonds may remove the Trustee by notifying the removed Trustee and may appoint a successor Trustee with the City’s consent. The City may remove the Trustee, by notice in writing delivered to the Trustee 30 days prior to the proposed removal date; provided, however, that the City shall have no right to remove the Trustee during any time when an Event of Default has occurred and is continuing unless (i) the Trustee fails to comply with the foregoing section, (ii) the Trustee is adjudged a bankrupt or an insolvent, (iii) the Trustee otherwise becomes incapable of acting or (iv) the City determines that the Trustee’s services are no longer satisfactory to the City. No resignation or removal of the Trustee under this section shall be effective until a new Trustee has taken office. If the Trustee resigns or is removed or for any reason is unable or unwilling to perform its duties under the Trust Agreement, the City shall promptly appoint a successor Trustee.
(b) A successor Trustee shall deliver a written acceptance of its appointment to the retiring Trustee and to the City. Immediately thereafter, the retiring Trustee shall transfer all property held by it as Trustee to the successor Trustee, the resignation or removal of the retiring Trustee shall then (but only then) become effective and the successor Trustee shall have all the rights, powers and duties of the Trustee under the Trust Agreement. If a Trustee is not performing its duties and a successor Trustee does not take office within 60 days after the retiring Trustee delivers notice of resignation or the City delivers notice of removal, the retiring Trustee, the City or the holders of a majority in Total Bond Obligation of the Bonds may petition any court of competent jurisdiction for the appointment of a successor Trustee.
Successor Trustee or Agent by Merger. If the Trustee, any Paying Agent or Registrar consolidates with, merges or converts into, or transfers all or substantially all its assets (or, in the case of a bank or trust company, its corporate trust business) to, another corporation, the resulting, surviving or transferee corporation without any further act shall be the successor Trustee, Paying Agent or Registrar.
Registrar. The City shall appoint the Registrar for the Bonds and may from time to time remove a Registrar and name a replacement upon notice to the Trustee. The City initially appoints the Trustee as Registrar. Each Registrar, if other than the Trustee, shall designate to the Trustee, the Paying Agent, and the City its principal office and signify its acceptance of the duties imposed upon it under the Trust Agreement by a written instrument of acceptance delivered to the City and the Trustee under which such Registrar will agree, particularly, to keep such books and records as shall be consistent with prudent industry practice and to make such books and records available for inspection by the City, the Trustee, and the Paying Agent at all reasonable times.
Other Agents. The City or the Trustee may from time to time appoint other agents to perform duties and obligations under the Trust Agreement which agents may include, but not be limited to, authenticating agents all as provided by resolution of the City.
Several Capacities. Anything in the Trust Agreement to the contrary notwithstanding, the same entity may serve thereunder as the Trustee, Registrar and any other agent as appointed to perform duties or obligations under the Trust Agreement or an escrow agreement, or in any combination of such capacities, to the extent permitted by law.
Accounting Records and Reports of Trustee.
(a) The Trustee shall at all times keep, or cause to be kept, proper books of record and account in which complete and accurate entries shall be made of all transactions made by it relating to the
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proceeds of the Bonds and all Funds and Accounts established pursuant to the Trust Agreement and held by the Trustee. Such books of record and account shall be available for inspection by the City and any Bondholder, or his agent or representative duly authorized in writing, at reasonable hours and under reasonable circumstances.
(b) The Trustee shall file and furnish to the City and to each Bondholder who shall have filed his name and address with the Trustee for such purpose (at such Bondholder’s cost), on an annual basis (or, with respect to the City, such other interval that the City may request), a complete financial statement (which may be its regular account statements and which need not be audited) covering receipts, disbursements, allocation and application of moneys in any of the funds and accounts established pursuant to the Trust Agreement for the preceding year.
No Remedy Exclusive. No remedy conferred upon or reserved to the City under the Trust Agreement is intended to be exclusive of any other remedy or remedies, and each and every such remedy shall be cumulative, and shall be in addition to every other remedy given under the Trust Agreement, or existing at law or in equity or by statute.
MODIFICATION OF THE TRUST AGREEMENT
Limitations. The Trust Agreement shall not be modified or amended in any respect subsequent to the first delivery of fully executed and authenticated Bonds except as provided in and in accordance with and subject to the provisions of the Trust Agreement.
Supplemental Agreements Not Requiring Consent of Bondholders.
(a) The City may, from time to time and at any time, without the consent of or notice to the Bondholders, execute and deliver supplemental agreements supplementing and/or amending the Trust Agreement as follows:
(i) to cure any formal defect, omission, inconsistency or ambiguity in the Trust Agreement;
(ii) to add to the covenants and agreements of the City in the Trust Agreement other covenants and agreements, or to surrender any right or power reserved or conferred upon the City, and which shall not adversely affect the interests of the Bondholders;
(iii) to confirm, as further assurance, any interest of the Trustee in and to the Funds and Accounts held by the Trustee or in and to any other moneys, securities or funds of the City provided pursuant to the Trust Agreement or to otherwise add security for the Bondholders;
(iv) to comply with the requirements of the Trust Indenture Act of 1939, as from time to time amended;
(v) to modify, alter, amend or supplement the Trust Agreement in any other respect which, in the judgment of the City, is not materially adverse to the Bondholders;
(vi) to qualify the Bonds for a rating or ratings by any Rating Agency; and
(vii) to authorize the issuance of Additional Bonds in accordance with the Trust Agreement.
(b) Before the City shall, pursuant to the Trust Agreement, execute any supplemental agreement there shall have been delivered to the City an opinion of Bond Counsel to the effect that such
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supplemental agreement (i) is authorized or permitted by the Trust Agreement and the Refunding Law, and (ii) will, upon the execution and delivery thereof, be valid and binding upon the City in accordance with its terms, subject to the typical exceptions.
Supplemental Agreement Requiring Consent of Bondholders.
(a) Except for any supplemental agreement entered into pursuant to the Trust Agreement, the holders of not less than a majority in Total Bond Obligation of the Bonds Outstanding shall have the right from time to time to consent to and approve the execution by the City of any supplemental agreement deemed necessary or desirable by the City for the purposes of modifying, altering, amending, supplementing or rescinding, in any particular, any of the terms or provisions contained in the Trust Agreement or in a supplemental agreement; provided, however, that, unless approved in writing by the holders of all the Bonds then Outstanding, nothing contained therein shall permit or be construed as permitting (i) a change in the times, amounts or currency of payment of the principal of or interest on any Outstanding Bonds or (ii) a reduction in the principal amount or redemption price of any Outstanding Bonds or the rate of interest thereon; and provided that nothing contained therein, including the provisions of the Trust Agreement, shall, unless approved in writing by the holders of all the Bonds then Outstanding, permit or be construed as permitting (1) a preference or priority of any Bond or Bonds over any other Bond or Bonds or (2) a reduction in the aggregate principal amount of Bonds the consent of the Bondholders of which is required for any such supplemental agreement. Nothing therein contained, however, shall be construed as making necessary the approval by Bondholders of the execution of any supplemental agreement as authorized in the Trust Agreement.
(b) If at any time the City shall desire to enter into any supplemental agreement for any of the purposes of the Trust Agreement, the City shall cause notice of the proposed execution of the supplemental agreement to be given by Mail to all Bondholders. Such notice shall briefly set forth the nature of the proposed supplemental agreement and shall state that a copy thereof is on file at the office of the City for inspection by all Bondholders.
(c) Within two weeks after the date of the first mailing of such notice, the City may execute and deliver such supplemental agreement in substantially the form described in such notice, but only if there shall have first been delivered to the City (i) the required consents, in writing, of Bondholders and (ii) an opinion of Bond Counsel stating that such supplemental agreement is authorized or permitted by the Trust Agreement and other applicable law, complies with their respective terms and, upon the execution and delivery thereof, will be valid and binding upon the City in accordance with its terms.
(d) If Bondholders of not less than the percentage of Bonds required by the Trust Agreement shall have consented to and approved the execution and delivery thereof as provided in the Trust Agreement, no Bondholders shall have any right to object to the adoption of such supplemental agreement, or to object to any of the terms and provisions contained therein or the operation thereof, or in any manner to question the propriety of the execution and delivery thereof, or to enjoin or restrain the City from executing the same or from taking any action pursuant to the provisions thereof.
Effect of Supplemental Agreements. Upon execution and delivery of any supplemental agreement pursuant to the provisions of the Trust Agreement, the Trust Agreement and all supplemental agreements shall be, and shall be deemed to be, modified and amended in accordance therewith, and the respective rights, duties and obligations under the Trust Agreement and all supplemental agreements of the City, the Trustee, the Registrar, any Paying Agent and all Bondholders shall thereafter be determined, exercised and enforced under the Trust Agreement and all supplemental agreements, subject in all respects to such modifications and amendments.
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Supplemental Agreements to be Part of the Trust Agreement. Any supplemental agreement adopted in accordance with the provisions of the Trust Agreement shall thereafter form a part of the Trust Agreement or the supplemental agreement which they supplement or amend, and all of the terms and conditions contained in any such supplemental agreement as to any provision authorized to be contained therein shall be and shall be deemed to be part of the terms and conditions of the Trust Agreement which they supplement or amend for any and all purposes.
MISCELLANEOUS PROVISIONS
Parties in Interest. Except as otherwise specifically provided, nothing in the Trust Agreement expressed or implied is intended or shall be construed to confer upon any person, firm or corporation other than the City, the Paying Agent, the Trustee, and the Bondholders any right, remedy or claim under or by reason of the Trust Agreement, the Trust Agreement being intended to be for the sole and exclusive benefit of the City, the Paying Agent, the Trustee and the Bondholders.
Severability. In case any one or more of the provisions of the Trust Agreement, or of any Bonds issued thereunder shall, for any reason, be held to be illegal or invalid, such illegality or invalidity shall not affect any other provisions of the Trust Agreement or of Bonds, and the Trust Agreement and any Bonds issued thereunder shall be construed and enforced as if such illegal or invalid provisions had not been contained in the Trust Agreement or the Bonds.
No Personal Liability of City Officials; Limited Liability of City to Bondholders.
(a) No covenant or agreement contained in the Bonds or in the Trust Agreement shall be deemed to be the covenant or agreement of any present or future official, officer, agent or employee of the City in his individual capacity, and neither the members of the City Council of the City nor any person executing the Bonds shall be liable personally on the Bonds or be subject to any personal liability or accountability by reason of the issuance thereof.
(b) Except for the payment when due of the payments and the observance and performance of the other agreements, conditions, covenants and terms required to be performed by it contained in the Trust Agreement, the City shall not have any obligation or liability to the Bondholders with respect to the Trust Agreement or the preparation, execution, delivery, transfer, exchange or cancellation of the Bonds or the receipt, deposit or disbursement of the payments by the Trustee, or with respect to the performance by the Trustee of any obligation required to be performed by it contained in the Trust Agreement.
Execution of Instruments; Proof of Ownership.
(a) Any request, direction, consent or other instrument in writing required or permitted by the Trust Agreement to be signed or executed by Bondholders or on their behalf by an attorney-in-fact may be in any number of concurrent instruments of similar tenor and may be signed or executed by such Bondholders in person or by an agent or attorney-in-fact appointed by an instrument in writing or as provided in the Bonds. Proof of the execution of any such instrument and of the ownership of Bonds shall be sufficient for any purpose of the Trust Agreement and shall be conclusive in favor of the Trustee with regard to any action taken by it under such instrument if made in the following manner:
(i) the fact and date of the execution by any person of any such instrument may be proved by the certificate of any officer in any jurisdiction who, by the laws thereof, has power to take acknowledgments within such jurisdiction, to the effect that the person signing such instrument acknowledged before him the execution thereof, or by an affidavit of a witness to such execution; and
(ii) the ownership of Bonds shall be proved by the registration books kept under the provisions of the Trust Agreement;
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(b) Nothing contained in the Trust Agreement shall be construed as limiting the Trustee to such proof. The Trustee may accept any other evidence of matters therein stated which it may deem sufficient. Any request, consent of, or assignment by any Bondholder shall bind every future Bondholder of the same Bonds or any Bonds issued in lieu thereof in respect of anything done by the Trustee or the City in pursuance of such request or consent.
Governing Law; Venue. The Trust Agreement is made in the State under the Constitution and laws of the State and is to be so construed. If any party to the Trust Agreement initiates any legal or equitable action to enforce the terms of the Trust Agreement, to declare the rights of the parties under the Trust Agreement or which relates to the Trust Agreement in any manner, each such party agrees that the place of making and for performance of the Trust Agreement shall be the City of Monrovia, State of California, and the proper venue for any such action is the Superior Court of the State of California, in and for the City of Monrovia.
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APPENDIX C
FORM OF BOND COUNSEL OPINION
Upon issuance and delivery of the Bonds, Richards Watson & Gershon, A Professional Corporation, Bond Counsel, proposes to render its final approving opinion with respect to the Bonds in substantially the following form:
[Delivery Date]
City of Monrovia Monrovia, California
Opinion of Bond Counsel
with reference to
$111,545,000 City of Monrovia
Taxable Pension Obligation Bonds Series 2017
Ladies and Gentlemen:
We have examined (i) a record of proceedings relating to the issuance by the City of Monrovia (the “City”) of the above-captioned bonds (the “Bonds”); (ii) the Trust Agreement, dated as of June 1, 2010, (the “Master Trust Agreement”), as amended and supplemented by the First Supplemental Trust Agreement, dated as of December 1, 2017 (the “First Supplement”; and together with the Master Trust Agreement, the “Trust Agreement”), each by and between the City and U.S. Bank National Association, as Trustee; (iii) Resolution No. 2008-49 of the City Council of the City, adopted on August 5, 2008, approving the issuance of the Bonds; (iv) Resolution No. 2017-37 of the City Council of the City, adopted on November 7, 2017, approving the execution and delivery of the First Supplement and other documents relating to the Bonds; (v) the Judgment, dated December 17, 2008 (the “Judgment”), executed by Honorable James R. Dunn, Judge of the Superior Court of the State of California, County of Los Angeles, with respect to the action entitled City of Monrovia v. All Persons Interested in the Matter, etc., Case No. BC395860; (vi) supplemental documents furnished to us, certificates and documents from public officials and others; and (vii) such other matters of law as we have deemed necessary to enable us to render the opinions expressed herein. As to questions of fact material to this opinion, we have relied upon such certificates and documents without undertaking to verify the same by independent investigation.
The Bonds are issued under and pursuant to the Constitution and laws of the State, including Articles 10 (commencing with Section 53570) and 11 (commencing with Section 53580) of Chapter 3 of Part 1 of Division 2 of Title 5 of the Government Code, and the Trust Agreement. Capitalized terms not otherwise defined herein have the meanings ascribed to them in the Trust Agreement.
Based on the Judgment and the examination described herein, we are of the opinion that under existing law:
1. The City has the right and power to enter into the First Supplement. The First Supplement has been duly and lawfully authorized, executed and delivered by the City and, assuming due authorization, execution and delivery by the Trustee, is in full force and effect in accordance with its
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terms and is valid and binding upon the City and enforceable in accordance with its terms, and no other authorization for the Trust Agreement is required. The Trust Agreement creates the valid pledge which it purports to create of the Revenue Fund established by the Trust Agreement, including the investments, if any, thereof; subject only to the provisions of the Trust Agreement permitting the application thereof for the purposes and on the terms and conditions set forth in the Trust Agreement.
2. The Bonds constitute valid and binding obligations of the City.
3. Interest on the Bonds is exempt from State of California personal income taxes. We express no opinion regarding the exclusion of interest on the Bonds from gross income for Federal income tax purposes.
Except as stated in the foregoing paragraph numbered 3, we express no opinion as to any Federal or state tax consequences of the ownership or disposition of the Bonds.
The opinions expressed in the paragraphs numbered 1 and 2 hereof are qualified to the extent that the enforceability of the Trust Agreement and the Bonds may be limited by any applicable bankruptcy, insolvency, debt adjustment, fraudulent conveyance or transfer, moratorium, reorganization or other similar laws affecting creditors’ rights, to the application of equitable principles, to the exercise of judicial discretion in appropriate cases and to the limitations on legal remedies against public entities in the State of California. We express no opinion with respect to any opinion with respect to any indemnification, contribution, penalty, choice of law, choice of forum, choice of venue, waiver or severability provisions contained in the foregoing documents.
The opinions expressed herein are based on an analysis of existing law and cover certain matters not directly addressed thereby. Such opinions may be affected by actions taken or omitted or events occurring after the date hereof, and we have not undertaken to determine, or to inform any person, whether any such actions or events are taken or do occur. We have assumed the genuineness of all documents and signatures presented to us. We have not undertaken to verify independently, and have assumed, the accuracy of the factual matters represented, warranted or certified in such documents. Furthermore, we have assumed compliance with all agreements and covenants contained in the Trust Agreement. No opinion is expressed herein with respect thereto the accuracy, completeness or fairness of the Official Statement or any other offering material relating to the Bonds.
The foregoing discussion with respect to the Bonds was not intended or written by us to be used, and it cannot be used, for the purpose of avoiding penalties that may be imposed on an owner of the Bonds. The foregoing discussion was written to support the promotion or marketing of the Bonds. Each prospective purchaser of the Bonds should seek advice based on the prospective purchaser’s particular circumstances from an independent tax advisor.
Respectfully submitted,
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APPENDIX D
FORM OF CONTINUING DISCLOSURE CERTIFICATE
Upon the issuance of the Bonds, the City proposes to enter into a Continuing Disclosure Certificate in substantially the following form:
CONTINUING DISCLOSURE CERTIFICATE
This Continuing Disclosure Certificate (the “Disclosure Certificate”), dated ___________, 2017, is executed and delivered by the City of Monrovia (the “City”) in connection with the issuance of the $111,545,000 principal amount City of Monrovia Taxable Pension Obligation Bonds Series 2017 (the “Bonds”). The Bonds will be issued under the terms of a Trust Agreement, dated as of June 1, 2010, as supplemented by the First Supplemental Trust Agreement, dated as of December 1, 2017 (together, the “Trust Agreement”), by and between the City and U.S. Bank National Association, as trustee (the “Trustee”). The City covenants and agrees as follows:
Section 1. Purpose of the Disclosure Certificate. This Disclosure Certificate is being executed and delivered by the City for the benefit of the Holders and Beneficial Owners of the Bonds and in order to assist the Participating Underwriter in complying with the Rule (as defined below).
Section 2. Definitions. In addition to the definitions set forth in the Trust Agreement, which apply to any capitalized term used in this Disclosure Certificate, unless otherwise defined in this Section, the following capitalized terms shall have the following meanings:
“Annual Report” shall mean any Annual Report provided by the City pursuant to, and as described in, Sections 3 and 4 of this Disclosure Certificate.
“Beneficial Owner” shall mean any person which: (a) has the power, directly or indirectly, to vote or consent with respect to, or to dispose of ownership of, any Bonds (including persons holding Bonds through nominees, depositories or other intermediaries); or (b) is treated as the owner of any Bonds for federal income tax purposes.
“Business Day” shall have the meaning given to such term in the Trust Agreement.
“Dissemination Agent” shall mean, initially, U.S. Bank National Association, or any successor Dissemination Agent designated in writing by the City and which has filed with the City and the Trustee a written acceptance of such designation.
“EMMA” shall mean the Electronic Municipal Market Access system located at http://www.emma.msrb.org, as the centralized on-line repository for municipal disclosure documents to be filed with the MSRB pursuant to the Rule, or such other successor repository site as prescribed by the MSRB.
“Fiscal Year” shall mean the one-year period ending on the last day of June of each year, or such other period selected as the fiscal year of the City.
“Holder” shall mean a registered owner of the Bonds.
“Listed Events” shall mean any of the events listed in Sections 5(a) or 5(b) of this Disclosure Certificate.
“MSRB” shall mean the Municipal Securities Rulemaking Board or any successor thereto.
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“Official Statement” shall mean the final Official Statement dated November 30, 2017 relating to the Bonds.
“Participating Underwriter” shall mean Hilltop Securities Inc., as the original underwriter of the Bonds required to comply with the Rule in connection with offering of the Bonds.
“Rule” shall mean Rule 15c2-12 adopted by the SEC under the Securities Exchange Act of 1934, as the same may be amended from time to time.
“SEC” shall mean the United States Securities and Exchange Commission.
Section 3. Provisions of Annual Reports.
(a) The City shall, or shall cause the Dissemination Agent to, no later than each March 31 following the end of each Fiscal Year, commencing with March 31, 2018 with the Annual Report for Fiscal Year 2016-17, provide to the MSRB, via EMMA, an Annual Report covering the prior Fiscal Year that is consistent with the requirements of Section 4 of this Disclosure Certificate. The Annual Report may be submitted as a single document or as separate documents comprising a package, and may include by reference other information as provided in Section 4 of this Disclosure Certificate; provided that the audited financial statements of the City may be submitted separately from the balance of the Annual Report, and later than the date required above for the filing of the Annual Report if not available by that date. If the City’s Fiscal Year changes, it shall give notice of such change in the same manner as for a Listed Event under Section 5(a).
(b) Not later than 15 Business Days prior to the date specified in subsection (a) above for providing the Annual Report to the MSRB, the City shall provide the Annual Report to the Dissemination Agent (if other than the City). If by such date, the Dissemination Agent has not received a copy of the Annual Report, the Dissemination Agent shall contact the City to determine if the City is in compliance with the first sentence of this subsection (b). The City shall provide a written certification with each Annual Report furnished to the Dissemination Agent to the effect that such Annual Report constitutes the Annual Report required to be furnished by it hereunder. The Dissemination Agent may conclusively rely upon such certification of the City and shall have no duty or obligation to review such Annual Report.
(c) If the Dissemination Agent is unable to verify that an Annual Report has been provided to the MSRB by the date required in subsection (a), the Dissemination Agent shall send a notice on a timely basis to the MSRB, in such form as prescribed or acceptable to MSRB.
(d) The Dissemination Agent (if other than the City) shall, if and to the extent, the City has provided an Annual Report in final form to the Dissemination Agent for dissemination, file a report with the City certifying that the Annual Report has been provided to the MSRB pursuant to this Disclosure Certificate, and stating the date that it was provided.
Section 4. Content of Annual Reports. The City’s Annual Report shall contain or incorporate by reference the following:
(a) The audited financial statements prepared for the City for the most recently completed Fiscal Year, in accordance with generally accepted accounting principles as promulgated to apply to governmental entities from time to time by the Governmental Accounting Standards Board, as may be further modified by applicable state law. If such audited financial statements are not available by the time the Annual Report is required to be filed pursuant to Section 3(a), the Annual Report shall contain unaudited financial statements in a format similar to the audited financial statements customarily used by the City, and the audited financial statements shall be filed in the same manner as the Annual Report when they become available.
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(b) To the extent not contained in the audited financial statements filed pursuant to the preceding subsection (a) by the date required by Section 3 hereof:
(i) The principal amount of the Bonds outstanding as of June 30 of the prior Fiscal Year;
(ii) updates to the tables set forth in the Official Statement under the heading “THE CITY—Revenue and Expenditure Trends” for the prior Fiscal Year; and
(iii) updates to the Historical Retirement Tax Revenues table set forth in the Official Statement under the heading “THE CITY—The Retirement Tax” for the prior Fiscal Year.
(c) In addition to any of the information expressly required to be provided under paragraphs (a) and (b) of this Section, the City shall provide such further information, if any, as may be necessary to make the specifically required statements, in light of the circumstances under which they are made, not misleading.
Any or all of the items listed above for inclusion in the Annual Report may be included by specific reference to other documents, including official statements of debt issues of the City or related public entities, which have been available to the public on EMMA or filed with the SEC. The City shall clearly identify each such other document so included by reference.
Section 5. Reporting of Significant Events.
(a) The City shall give, or shall cause to be given, notice of the occurrence of any of the following events with respect to the Bonds in a timely manner not more than 10 Business Days after the event:
(1) Principal and interest payment delinquencies.
(2) Unscheduled draws on debt-service reserves reflecting financial difficulties.
(3) Unscheduled draws on credit enhancements reflecting financial difficulties.
(4) Substitution of credit or liquidity providers, or their failure to perform.
(5) Adverse tax opinions, the issuance by the Internal Revenue Service of proposed or final determinations of taxability or Notices of Proposed Issue (IRS Form 5701 TEB).
(6) Tender offers.
(7) Defeasances.
(8) Ratings changes.
(9) Bankruptcy, insolvency, receivership or similar proceedings.
For the purposes of the event identified in this Section 5(a)(9), the event is considered to occur when any of the following occur: the appointment of a receiver, fiscal agent or similar officer for an obligated person in a proceeding under the U.S. Bankruptcy Code or in any other proceeding under state or federal law in which a court or governmental authority has assumed jurisdiction over substantially all of the assets or business of the obligated person, or if such jurisdiction has been assumed by leaving the existing governmental body and officials or officers in possession but subject to the supervision and orders of a court or governmental authority, or the entry of an order confirming a plan of reorganization, arrangement or liquidation by a court or
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governmental authority having supervision or jurisdiction over substantially all of the assets or business of the obligated person.
(b) The City shall give, or shall cause to be given, notice of the occurrence of any of the following events with respect to the Bonds, if material:
(1) Unless described in Section 5(a)(5), other notices or determinations by the Internal Revenue Service with respect to the tax status of the Bonds or other events affecting the tax status of the Bonds.
(2) Modifications to the rights of Bond Holders.
(3) Optional, unscheduled, or contingent Bond redemptions.
(4) Release, substitution or sale of property securing repayment of the Bonds.
(5) Non-payment related defaults.
(6) The consummation of a merger, consolidation, or acquisition involving the City or the sale of all or substantially all of the assets of the City, other than in the ordinary course of business; the entry into a definitive agreement to undertake such an action; or the termination of a definitive agreement relating to any such actions, other than in accordance with its terms.
(7) Appointment of a successor or additional trustee or the change of the name of a trustee.
(c) If the City determines that knowledge of the occurrence of a Listed Event under Section 5(b) would be material under applicable federal securities laws, the City shall file a notice of the occurrence with EMMA in a timely manner not more than 10 Business Days after the event.
Section 6. Termination of Reporting Obligation. The City’s obligations under this Disclosure Certificate with respect to each series of the Bonds shall terminate upon the legal defeasance, prior redemption or payment in full of all of the Bonds. If such termination occurs prior to the final maturity of such Bonds, the City shall give notice of such termination in the same manner as for a Listed Event under Section 5(a).
Section 7. Dissemination Agent. The initial Dissemination Agent shall be U.S. Bank National Association. From time to time, the City may appoint a different Dissemination Agent to assist it in carrying out its obligations under this Disclosure Certificate. The Dissemination Agent may resign by providing 30 days written notice to the City and the Trustee. The City may replace the Dissemination Agent with or without cause.
Section 8. Amendment; Waiver. Notwithstanding any other provision of this Disclosure Certificate, the City may amend this Disclosure Certificate, and any provision of this Disclosure Certificate may be waived, provided that the following conditions are satisfied:
(a) if the amendment or waiver relates to the provisions of Sections 3(a), 4, 5(a) or 5(b), it may only be made in connection with a change in circumstances that arises from a change in legal requirements, change in law, or change in the identity, nature, or status of an obligated person with respect to the Bonds, or type of business conducted;
(b) the undertakings herein, as proposed to be amended or waived, would, in the opinion of nationally recognized bond counsel, have complied with the requirements of the Rule at the time of the
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primary offering of the Bonds, after taking into account any amendments or interpretations of the Rule, as well as any change in circumstances; and
(c) the proposed amendment or waiver affecting the Bonds either (i) is approved by Holders of the affected Bonds in the manner provided in the Trust Agreement for amendments to Trust Agreement with the consent of Holders, or (ii) does not, in the opinion of nationally recognized bond counsel, materially impair the interests of the Holders or Beneficial Owners of such Bonds.
If the annual financial information or operating data to be provided in the Annual Report is amended pursuant to the provisions hereof, the first annual financial information filed pursuant hereto containing the amended operating data or financial information shall explain, in narrative form, the reasons for the amendment and the impact of the change in the type of operating data or financial information being provided. For purposes of this paragraph, “impact” has the meaning as that word is used in the letter from the staff of the SEC to the National Association of Bond Lawyers dated June 23, 1995.
If an amendment is made to the undertaking specifying the accounting principles to be followed in preparing financial statements, the annual financial information for the year in which the change is made shall present a comparison between the financial statements or information prepared on the basis of the new accounting principles and those prepared on the basis of the former accounting principles. The comparison shall include a qualitative discussion of the differences in the accounting principles and the impact of the change in the accounting principles on the presentation of the financial information, in order to provide information to investors to enable them to evaluate the ability of the City to meet its obligations. To the extent reasonably feasible, the comparison shall be quantitative. A notice of the change in the accounting principles shall be sent to the MSRB in the same manner as for a Listed Event under Section 5(b).
No amendment to this Disclosure Certificate which modifies the duties or rights of the Dissemination Agent shall be made without the prior written consent of the Dissemination Agent.
Section 9. Additional Information. Nothing in this Disclosure Certificate shall be deemed to prevent the City from disseminating any other information, using the means of dissemination set forth in this Disclosure Certificate or any other means of communication, or including any other information in any Annual Report or notice of occurrence of a Listed Event, in addition to that which is required by this Disclosure Certificate. If the City chooses to include any information in any Annual Report or notice of occurrence of a Listed Event in addition to that which is specifically required by this Disclosure Certificate, the City shall have no obligation under this Disclosure Certificate to update such information or include it in any future Annual Report or notice of occurrence of a Listed Event.
Section 10. Default. In the event of a failure of the City or the Dissemination Agent to comply with any provision of this Disclosure Certificate, any Participating Underwriter or any Holder or Beneficial Owner of the Bonds may take such actions as may be necessary and appropriate, including seeking mandate or specific performance by court order, to cause the City or the Dissemination Agent, as the case may be, to comply with its obligations under this Disclosure Certificate. A default under this Disclosure Certificate shall not be deemed an Event of Default under the Trust Agreement, and the sole remedy under this Disclosure Certificate in the event of any failure of the City or the Dissemination Agent to comply with this Disclosure Certificate shall be an action to compel performance.
Section 11. Duties, Immunities and Liabilities of Dissemination Agent. The City agrees to indemnify and save the Dissemination Agent, its officers, directors, employees and agents, harmless against any loss, expense and liabilities which it may incur arising out of the disclosure of information pursuant to this Disclosure Certificate or arising out of or in the exercise or performance of its powers and duties hereunder, including the costs and expenses (including attorneys’ fees) of defending against any claim of liability, but excluding liabilities due to the Dissemination Agent’s negligence or willful misconduct. The Dissemination Agent has only such duties as are specifically set forth in this Disclosure Certificate. The Dissemination Agent
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(if different than the City) shall be paid compensation by the City for its services provided hereunder in accordance with its schedule of fees as amended from time to time. The Dissemination Agent shall have no duty or obligation to review any information provided to it hereunder and shall not be deemed to be acting in any fiduciary capacity for the City, the Owners, or any other party. The Dissemination Agent may rely and shall be protected in acting or refraining from acting upon any direction from the City or an opinion of nationally recognized bond counsel. The obligations of the City under this Section shall survive resignation or removal of the Dissemination Agent and payment of the Bonds.
Section 12. Beneficiaries. This Disclosure Certificate shall inure solely to the benefit of the City, the Dissemination Agent, the Participating Underwriter, Holders and Beneficial Owners from time to time of the Bonds, and shall create no rights in any other person or entity.
IN WITNESS WHEREOF, the City has caused its duly authorized officer to execute and deliver this Certificate on the date first written above.
CITY OF MONROVIA
By: Oliver Chi, City Manager
AGREED AND ACCEPTED:
U.S. BANK NATIONAL ASSOCIATION, as Initial Dissemination Agent
By:_______________________________ Martin Meza, Authorized Officer
City of Monrovia
Monrovia, CA
Comprehensive Annual Financial Report
Prepared By: Department of Finance
Mark D. Alvarado
Administrative Services Director
Buffy J. Bullis Deputy Administrative Services Director
Fiscal Year Ended June 30, 2016
CITY OF MONROVIA, CALIFORNIA
COMPREHENSIVE ANNUAL FINANCIAL REPORT
FOR THE FISCAL YEAR ENDED JUNE 30, 2016
TABLE OF CONTENTS Page Number INTRODUCTORY SECTION Letter of Transmittal .................................................................................................................................... i City Organizational Chart .......................................................................................................................... ix Listing of City Officials ................................................................................................................................ x GFOA Certificate of Achievement for Excellence in Financial Reporting ................................................. xi Citywide Strategic Goals .......................................................................................................................... xii Principles of Financial Management ........................................................................................................ xiii FINANCIAL SECTION INDEPENDENT AUDITORS' REPORT ..................................................................................................... 1 MANAGEMENT'S DISCUSSION AND ANALYSIS ................................................................................... 5 BASIC FINANCIAL STATEMENTS
Government-Wide Financial Statements: Statement of Net Position ........................................................................................................... 15 Statement of Activities ................................................................................................................. 16
Fund Financial Statements:
Balance Sheet - Governmental Funds ........................................................................................ 20 Reconciliation of the Balance Sheet of Governmental Funds to the Statement of Net Position ................................................................................................. 23 Statement of Revenues, Expenditures and Changes in Fund Balances - Governmental Funds ................................................................................................ 24 Reconciliation of the Statement of Revenues, Expenditures and Changes in Fund Balances of Governmental Funds to the Statement of Activities ................................................................................................................. 26 Statement of Net Position - Proprietary Funds ........................................................................... 28 Statement of Revenues, Expenses and Changes in Fund Net Position - Proprietary Funds ....................................................................................................... 29
CITY OF MONROVIA, CALIFORNIA
COMPREHENSIVE ANNUAL FINANCIAL REPORT
FOR THE FISCAL YEAR ENDED JUNE 30, 2016
TABLE OF CONTENTS Page Number
Statement of Cash Flows - Proprietary Funds ............................................................................ 30
Statement of Fiduciary Net Position - Fiduciary Funds ............................................................... 31 Statement of Changes in Fiduciary Net Position - Fiduciary Fund ............................................. 32
Notes to Financial Statements ........................................................................................................... 33
REQUIRED SUPPLEMENTARY INFORMATION
Schedule of Changes in the Net Pension Liability and Related Ratios – Agent Multiple-Employer Miscellaneous Plans ........................................................................... 92 Schedule of Contributions – Agent Multiple-Employer Miscellaneous Plans ............................. 93 Schedule of Proportionate Share of the Net Pension Liability – Cost-Sharing Multiple-Employer Safety Plans ............................................................................ 94 Schedule of Contributions – Cost-Sharing Multiple-Employer Safety Plans .............................. 95 Budgetary Comparison Schedule By Department – General Fund ............................................ 96 Budgetary Comparison Schedule – Gang Violence and Drug Abuse Grants ............................ 97 Budgetary Comparison Schedule – Monrovia Housing Authority ............................................... 98 Notes to Required Supplementary Information ........................................................................... 99
SUPPLEMENTARY INFORMATION Combining Balance Sheet - Nonmajor Governmental Funds ......................................................... 104 Combining Statement of Revenues, Expenditures and Changes in Fund Balances - Nonmajor Governmental Funds ........................................................ 112 Budgetary Comparison Schedules - Special Revenue Funds
Retirement ................................................................................................................................. 119 Proposition A ............................................................................................................................. 120 Proposition C ............................................................................................................................. 121 AB 2766 .................................................................................................................................... 122 Traffic Safety ............................................................................................................................. 123 State Gasoline Tax ................................................................................................................... 124 Library ....................................................................................................................................... 125 Fire Hazmat ............................................................................................................................... 126 Community Development Block Grant ...................................................................................... 127 Asset Forfeiture ......................................................................................................................... 128 Police Grants ............................................................................................................................. 129 Lighting and Landscaping Assessment. ................................................................................... 130 Park Maintenance Assessment District .................................................................................... 131
CITY OF MONROVIA, CALIFORNIA
COMPREHENSIVE ANNUAL FINANCIAL REPORT
FOR THE FISCAL YEAR ENDED JUNE 30, 2016
TABLE OF CONTENTS Page Number
Business Improvement District ................................................................................................. 132 Fire Grants ................................................................................................................................ 133 Measure R ................................................................................................................................. 134
Budgetary Comparison Schedules – Capital Project Funds
Street Maintenance ................................................................................................................... 135 Capital Improvements ............................................................................................................... 136 Library Bond Construction Project ............................................................................................ 137 Hillside Acquisition .................................................................................................................... 138 Proposition C and Measure R Projects ..................................................................................... 139
Budgetary Comparison Schedules – Debt Service Funds
Hillside Acquisition .................................................................................................................... 140 Library Bond .............................................................................................................................. 141 Pension Obligation Bond .......................................................................................................... 142 Proposition C and Measure R ................................................................................................... 143
Budgetary Comparison Schedules – Permanent Fund
Miller Memorial Trust ................................................................................................................. 144 Combining Statement of Net Position - Nonmajor Proprietary Funds ............................................. 146 Combining Statement of Revenues, Expenses and Changes in Fund Net Position - Nonmajor Proprietary Funds ..................................................................................... 147 Combining Statement of Cash Flows - Nonmajor Proprietary Funds ............................................. 148
Combining Statement of Net Position - Internal Service Funds ...................................................... 150 Combining Statement of Revenues, Expenses and Changes in Fund Net Position - Internal Service Funds ..................................................................................... 152 Combining Statement of Cash Flows - Internal Service Funds ....................................................... 154 Combining Statement of Changes in Position and Liabilities - Agency Fund ................................. 156
Combining Statement of Fiduciary Net Position - Private-Purpose Trust Funds ............................ 157 Combining Statement of Changes in Fiduciary Net Position - Private-Purpose Trust Funds ......... 158
CITY OF MONROVIA, CALIFORNIA
COMPREHENSIVE ANNUAL FINANCIAL REPORT
FOR THE FISCAL YEAR ENDED JUNE 30, 2016
TABLE OF CONTENTS Page Number
STATISTICAL SECTION Net Position by Component – Last Ten Fiscal Years ............................................................................ 161 Changes in Net Position – Last Ten Fiscal Years ................................................................................. 162 Fund Balances of Governmental Funds – Last Nine Fiscal Years ........................................................ 164 Changes in Fund Balances of Governmental Funds – Last Ten Fiscal Years ...................................... 165 Assessed Value and Estimated Actual Value of Taxable Property Last Ten Fiscal Years ............................................................................................................................ 166 Direct and Overlapping Property Tax Rates – Last Ten Fiscal Years ................................................... 167 Principal Property Taxpayers – Current Year and Nine Years Ago ....................................................... 168 Property Tax Levies and Collections – Last Ten Fiscal Years .............................................................. 169 Ratios of Outstanding Debt by Type – Last Five Fiscal Years .............................................................. 170 Direct and Overlapping Governmental Activities Debt as of June 30, 2016 .......................................... 171 Legal Debt Margin Information – Last Ten Fiscal Years ........................................................................ 172 Pledged Revenue Coverage – Last Five Fiscal Years .......................................................................... 173 Demographic and Economic Statistics – Last Ten Calendar Years ...................................................... 174 Principal Employers Current Year and Nine Years Ago ........................................................................ 175 Full-Time Equivalent City Government Employees by Function/Program Last Ten Fiscal Years ............................................................................................................................ 176 Operating Indicators by Function/Program – Last Ten Fiscal Years ..................................................... 177 Capital Asset Statistics by Function/Program – Last Ten Fiscal Years ................................................. 178 Schedule of Insurance In Force – July 1, 2015-June 30, 2016 ............................................................. 179
December 20, 2016
Honorable Mayor and City Council
City of Monrovia
Monrovia, California
It is with great pleasure that we present to you the City of Monrovia’s Comprehensive Annual Financial
Report (CAFR) for the 2015-16 fiscal year. The report complies with the most current Governmental
Accounting Standards Board (GASB) Statements. The Statements continue to improve our financial
reporting by adding significant additional information in local government financial statements.
In addition to the fund-by-fund financial information currently presented in the City’s financial statements,
government-wide financial statements are also included. The government-wide financial statements
include a Statement of Net Position that provides the total net equity of the City, including infrastructure,
and the Statement of Activities that shows the cost of providing government services. These statements
have been prepared using the economic resources measurement focus and the accrual basis of
accounting versus the financial resources measurement focus and the modified accrual method used
in the fund financial statements. A reconciliation report is provided as a key to understanding the
changes between the two reporting methods. The Governmental Fund Statements also include an
emphasis on the City’s major funds. These statements, combined with other information, are further
analyzed in the narrative section called Management’s Discussion and Analysis (MDA). The MDA
provides financial highlights and interprets the reports by analyzing trends and by explaining changes,
fluctuations, and variances in the financial data. In addition, the MDA is intended to disclose significant
events or decisions that affect the financial condition of the City.
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
information is accurate in all material respects and is reported in a manner designed to present fairly
the financial position of the City. All disclosures necessary to enable an understanding of the City’s
financial activities have been included.
History
The City of Monrovia is located in Southern California and is part of the San Gabriel Valley within Los
Angeles County. More specifically, Monrovia is located 20 miles northeast of the City of Los Angeles.
The City was incorporated on December 15, 1887, under the laws of the State of California. Monrovia
operates under all the rights and privileges applicable to a general law city.
The Redevelopment Agency was created on March 4, 1969, pursuant to redevelopment law of the
State of California commencing with Health and Safety Code Section 33000. Its purpose was to prepare
and carry out plans for the rehabilitation, improvement and development of blighted areas within the
project area of the Agency. AB x1 26 abolished redevelopment agencies as of February 1, 2012. The
Successor Agency to the former Redevelopment Agency (“Successor Agency”) was formed on January
11, 2012. This was done to allow the Successor Agency time to take over all the duties and
responsibilities of the former Redevelopment Agency. The City Council serves as the Successor
Agency's Board Members. As such, it is deemed to be financially accountable. Therefore, all former
Redevelopment Agency and Successor Agency financial activities are blended with the City's financial
statements.
The Monrovia Housing Authority was established on October 5, 2004. The creation of the authority was
done to administer the affordable housing needs and requirements of the City. The housing assets of
the former Monrovia Redevelopment Agency were transferred over to the Housing Authority so that the
City could continue to provide affordable housing opportunities for residents.
The Monrovia Financing Authority was established on February 6, 1996. The creation of the authority
was to facilitate the proper completion of a loan refinancing with the State Department of Water
Resources. The bylaws of the Authority establish the City Council as the governing body. This entity
is blended into the City’s combined financial statements.
The Monrovia Wilderness Preserve Foundation, Inc., a nonprofit public benefit corporation, was created
on November 22, 2000, to acquire property in the foothills to be used as a wilderness preserve for the
protection of existing natural resources and to provide outdoor educational activities to nearby schools.
It also serves as a mechanism to help secure funding for improvements to all the City’s parks. The
Foundation has a separate governing board, which is comprised of City Council members, employees,
members of the Community Services Commission, and members of the public.
The City of Monrovia is a full-service city with approximately 240 full time employees. Being the third
oldest incorporated city in California has meant many older homes are nestled in the foothills. Historic
preservation is a very high priority in our community. Monrovia is one of the leading cities in granting
historic preservation status. We have granted approximately 130 historic preservation designations
throughout the community.
Economic Condition and Outlook
Although the focus of this Comprehensive Annual Financial Report is the economic condition of the City
at June 30, 2016, the financial implications of the loss of Redevelopment and the ever present potential
pension cost increases are a critical element of our future economic outlook. The “Major Initiatives for
the Future” section will address these issues.
The City of Monrovia’s economy is led by manufacturing/building/construction and retail/wholesale. The
first area accounts for 30% of the business types, while retail/wholesale account for 49%. The sales
tax generated from all industries accounts for almost 37% of all General Fund revenues (excluding
transfers in).
Over the last thirty years, Monrovia has continuously tried to position itself to be a self sustaining,
well diversified economy. This diversity has created a well balanced labor pool to support the retail,
manufacturing, and service based industries located within the community. Housing prices attract
affluent, middle, and lower income owners and renters. Proper land use decisions, in conjunction
with numerous redevelopment projects, have allowed Monrovia to weather any economic downturns.
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Assessed valuation of citywide property has always been a solid benchmark reflecting the state of
our local economy. For 2015-16, county wide assessed valuation increased by 5.95%. This was
the fifth straight year of growth in excess of 2% after a couple of years of minimal growth due to the
recession. For our City, property tax revenue was up approximately 5.69%. The secured property
tax growth for 2016-17 is estimated to be 4%. This growth rate coincides with what our history shows
as the long term average growth. Because we are a more established built out City, we are less
vulnerable to the housing bubble cycles that can negatively impact city finances. In other words, our
long term property value growth is more steady and consistent, in spite of housing upturns or
downturns.
After the economic downturn from 2008 thru 2012, the City has repositioned itself to regain all of the
lost sales tax growth from those years. Our low point of sales tax was 2009-10, when we collected
$7.2 million. Our projection for 2016-17 is $10.1 million. Before the recession, our high was
$9 million in 2007-08. So we have now recouped our lost growth and reaching for new highs in sales
tax revenues. That being said, our strong growth the last five years is a combination of some pent
up desire of buying, along with the return of stronger consumer confidence in the economy. We will
forecast continued growth in the 3-5% range going forward.
As California continues to go through its re-evolution due to the economic changes caused by the
loss of businesses, demographic changes, and tax laws that effect future revenue growth, Monrovia
has gone through many of the same population and economic trends noted above. Monrovia’s
diversified business base has enabled the City to benefit from economic expansion. Demographic
changes are addressed through employee hiring processes, program modification and cooperative
efforts between the School District, Chamber of Commerce, and the City.
The City has adopted a balanced budget for the 2016-17 fiscal year. Every year, based on economic
changes, mid year adjustments are made to revenues and expenditures. Every quarter, the City Council
will make any necessary adjustments to reflect any revenue and expenditure projection changes, but
will still retain a balanced budget. It is important for the City to monitor and control all potential
expenditure increases, as it is difficult to always expect revenues to continue to keep pace. In addition,
the City must continue to look at setting aside reserves for building and infrastructure needs.
Major Accomplishments for the Year: Our mission is clear. We exist to serve the people of Monrovia to create a community that offers a
premier quality of life. Our core values are based on being humble, hungry, loyal, and smart. The four
strategic goals that have guided us are:
1. Enhance Community Infrastructure
2. Enhance Fiscal Sustainability
3. Enhance Organizational Capacity
4. Enhance Relationships with the Community
During the 2015-16 fiscal year, the first year of a two year budget cycle, the City Council undertook a
process of adopting these four key strategic goals to support our overall thematic objective of Renewal.
A primary focal point of our strategic goals has been the development and implementation of capital
infrastructure improvements. These include road upgrades, sidewalk / curb / gutter enhancements,
water & sewer line repairs, water system production improvements, and City facility / equipment
upgrades.
iii
The City continues on developing and implementing a comprehensive Citywide CIP plan. During the
2015-16 fiscal year, the City Council approved an initiative called Monrovia Renewal, which is an
estimated $51.7 million project that seeks to facilitate the improvement of deferred street, sidewalk,
water system, and sewer line maintenance initiatives. The overall plan calls for the repair of every street
in the City that has a pavement condition index rating of less than 70, the implementation of necessary
water transmission pipe replacements, the improvement of water production facilities, and the upgrade
of all sewer lines in need of repair. The first construction contracts were awarded for the new the budget
year.
The City’s current purchasing policy was just recently updated. The City Council approved staff
authority for purchasing thresholds from $5,000 - $15,000 to now $25,000. The benefits of the new
purchasing process include simplifying the procurement process throughout the City by creating one
purchasing system instead of the four that were in place. In addition, the program modifications will
enhance citywide staff understanding of purchasing processes while reducing non-essential
administrative activities.
A survey of ten (10) surrounding cities determined that the average purchasing threshold delegated
to staff was $32,000. The most common purchasing threshold of the surveyed cities was $25,000.
In addition to being in line with survey results, it was important that our independent auditors
indicated that $25,000 was a reasonable and conservative threshold for a city the size of Monrovia.
In addition, the proposed $25,000 staff purchasing authority level is now consistent with the threshold
previously adopted by the City Council in April 2015 for the Uniform Construction Cost Accounting
Procedures (“UCCAP”) program.
We also established a formal reserve fund policy. This policy establishes target levels of reserves
for various City funds, as recommended by the Government Finance Officers Association (GFOA).
The policy requires that the City work towards establishing a minimum “Savings Account” for each
specific fund identified, which would allow the City to better address any significant swings in cash
flows due to economic cycles and unanticipated emergencies. The reserve policy includes the
following components:
� For our General Fund, the reserve level is 20% (10% working capital fund + 10% emergency
contingency).
� For our Enterprise Funds and our Facilities Fund, the reserve levels are 30% of the budgeted
operating expenditures.
� For our Fleet Replacement Fund, the reserve level are 30% of the estimated replacement
value of all fleet inventory.
� For our Retirement (Pension Cost Reserve) Fund, the reserve level is $1,000,000. The
Retirement Fund provides a reserve to offset unanticipated fluctuations in the PERS rates,
which can cause the City's annual pension costs to increase or decrease dramatically from
one year to the next.
The Successor Agency initiated the sale of two more former redevelopment properties. Developers
were selected and purchase contracts were drawn up. Sales were finalized, and approved by the State,
during the current fiscal year.
The City secured $16 million in public improvements from the Metropolitan Transit Authority (MTA) in
the 2012-13 fiscal year. These funds, paired with other Federal and State grants, totaled $25 million
that was available to do on-site and off-site improvements around the Metro Gold Line light rail stop,
what we call Station Square. A contract with the IBI Group for engineering services, project
management, and construction were approved in the 2014, and this year the construction improvements
iv
were completed. The improvements around the light rail stop include a walking trail, open space for
gatherings and children’s play, a bus turnaround facility, and possibly some retail components in the
future.
In addition to this, Metro finished construction on a parking structure adjacent to the light rail stop.
Passenger service on this light rail segment, which extends from the east end of Pasadena to Azusa,
began in March, 2016.
Major Initiatives for the Future:
In an effort to address all of the City Council directed objectives, the Fiscal Year 2016-17 budget
presents spending plans focusing on the execution of significant capital infrastructure and facility
improvements, enhancing public safety initiatives (including expansion of community oriented policing
activities), advancing historic preservation / neighborhood compatibility practices, and addressing
economic development priorities. These goals involve many processes and projects that are aligned
with our mission to serve the people of Monrovia to create a community that offers a premier quality of
life.
In addition to the Monrovia Renewal program, the City also incorporated a “base” CIP plan in the
FY 2016-17 budget that proposes $1.567 million in expenditures to execute 22 separate capital
improvement projects and capital outlay expenditures. Some of these proposed projects include a
parking study for our Station Square transit oriented development area, an in-depth study of our sewer
catch basin system, repairs to our hillside wilderness preserve fire access roads, a new integrated
permitting system for our development services operations, and multiple police department operational
module and machine upgrades.
With the opening of the Gold Line light rail in March of this year, our focus going forward will be on
creating residential housing in and around the Station Square area, along with retail opportunities for
people getting on or off the train. A 168 unit residential rental project, adjacent to the parking structure,
is under construction. Four eating and drinking establishments are scheduled to open for business
around the area in the next 12 to 18 months.
The City continues to work with developers interested in other potential land sites in and around the
area. The elimination of Redevelopment in 2011 was a blow to our long term economic development
plan, but it has not stopped us. Land sale proceeds from key development sites owned by the former
Redevelopment Agency are still part of our long term plan to help stimulate residential and commercial
development in the south end of town. This will go hand in hand with the extension of the Gold Line
light rail. Even without Redevelopment, we are committed to bringing new projects to this area.
The City and the Successor Agency will focus on finding strong development companies who can build
residential and/or commercial development projects that will compliment the “transit oriented
development” area. While our ability to provide any type of significant financial assistance to these
types of development projects is gone, it is important that we create a strong public/private partnership
to assist with these long term plans.
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Other Financial Information Internal Controls
The management of the City is responsible for establishing and maintaining an internal control structure
to ensure that the assets of the City are protected from loss, theft, or misuse, and to ensure that
adequate accounting data is compiled 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 structure should not exceed the benefits likely to be
derived; and (2) the valuation of costs and benefits requires estimates and judgments by management.
Budgetary Controls
The objective of budgetary controls is to ensure compliance with legal provisions embodied in the annual
appropriated budget approved by the City Council. Activities of all governmental-type funds and
enterprise-type funds are included in the annual appropriated budget. The level of budgetary control
(that is, the level at which expenditures cannot legally exceed the appropriated amount) adopted by City
Council is established at the fund level. Formal budgetary integration is employed as a management
control device. The City maintains an encumbrance accounting system for all governmental-type funds.
Encumbrances and appropriations for unfinished capital projects will generally be re-appropriated as
part of the following year.
The City of Monrovia operates under a philosophy of community involvement and cooperative effort.
The City Council established Strategic Goals in 2015 in order to outline a roadmap to success for
upcoming years. In addition, the City also has a list of City Council Priorities, with Fiscal Responsibility
being the top priority. A complete list of the strategic goals and priorities is shown on page xi.
In conjunction with establishing goals and priorities, the City follows “Principles of Financial
Management.” Fourteen separate principles have been established as the foundation for meeting the
Fiscal Responsibility priority. The purpose of these standards is to build a foundation for establishing
balanced resource allocation and appropriation levels in the upcoming budget. The principles reflect
responsible, conservative fiscal practices. In addition, they provide a buffer from quick fixes or solutions
that could lead to long term financial problems.
Financial Policies
Financial policies that have directly affected the City’s financial statements include the City Council
priority number one, which is Fiscal Responsibility. In 2009, the City implemented a new defined
contribution retiree medical plan to supplement the current defined benefit plan. All new general and
fire department employees, as of February 1, 2009, are enrolled in the defined contribution plan. Both
employee and employer contributions are put into a trust vehicle. Employee contributions can not be
accessed until they separate employment from Monrovia. Vesting does not occur until the employee
retires directly from Monrovia.
All current general and fire employees were given a one time election to opt into the new retiree medical
plan. The new plan does not create an unfunded liability because all contributions must be made every
pay period. The City still has an unfunded liability for the old retiree medical plan.
vi
All City employees are paying the employee portion of pension costs. All new hires fall under the
guidelines of PEPRA (Public Employee Pension Reform Act), and as of January 1, 2014, all applicable
healthcare changes from the Affordable Healthcare Act were implemented.
Debt Administration
The City has no outstanding general obligation bonds as of June 30, 2016
Debt outstanding of the City of Monrovia includes:
x 2015 Hillside Wilderness Preserve Lease Revenue Bonds, for $5,880,000
x 2007 Library Lease Revenue Bonds, for $13,620,000
x 2010 Pension Obligation Bonds, for $11,420,000
x 2016 Lease Revenue Bonds, for $13,600,000
x 2016 Water and Sewer Lease Revenue Bonds, for $36,770,000
Debt outstanding of the Successor Agency to the Monrovia Redevelopment Agency includes:
x 2007 Tax Allocation Bonds, for $3,955,000
x 2011 Tax Allocation Bonds, for $5,975,000
x 2012 Subordinate Tax Allocation Refunding Bonds, for $11,015,000
x 2013A Subordinate Tax Allocation Refunding Bonds, for $9,865,000
x 2013B Subordinate Tax Allocation Refunding Bonds, for $3,150,000
x 2015A Tax Allocation Refunding Bonds, for $18,985,000
x 2015B Tax Allocation Refunding Bonds, for $3,865,000
x Pass thru agreement with Los Angeles County, $5,281,167
Risk Management
The City is a member of the California Joint Powers Insurance Authority for liability, property, and risk
management insurance coverage. The Authority was established in 1978 for the purpose of providing
liability protection for its members from losses from lawsuits. Today, it is one of the largest municipal
self-insurance pools in the state.
The California JPIA works with its members to reduce the frequency and severity of claims. Monrovia
has a specific Risk Manager assigned to serve our needs and to help us determine our risk management
strategy.
Independent Audit
The City requires an annual audit by independent certified public accountants. The accounting firm of
Lance Soll & Lunghard, LLP, conducted this year’s audit. The auditor’s report on the basic financial
statements, which include the government-wide and fund financial statements, is located in the financial
section of this report.
Financial Reporting Recognition
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 Monrovia for its
Comprehensive Annual Financial Report (CAFR) for the fiscal year ended June 30, 2015. In order to
be awarded a Certificate of Achievement, a government unit must publish an easily readable and
vii
efficiently organized comprehensive annual financial report. 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 our current
comprehensive annual financial report continues to meet to the Certificate of Achievement Program’s
requirements and we are submitting it to GFOA to determine its eligibility for another certificate.
Acknowledgements
The City's Comprehensive Annual Financial Report was prepared through the combined efforts of City
staff. Special recognition is due the Finance Department, in particular Michie Hernandez and Buffy
Bullis. Along with their excellent accounting staff, the department coordinated the closing the books for
the fiscal year, ensuring timely and accurate reporting. They also were instrumental in putting this
document together.
Lastly, a special thank you goes to the Mayor, City Council, and City Manager for their support in
planning, conducting, and improving the financial operations of the City in a progressive and
professional manner.
Respectfully submitted,
Mark D. Alvarado, CPA
Administrative Services Director/Asst. City Manager
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City of Monrovia
Comprehensive Annual Financial Report Fiscal Year Ended June 30, 2016
CITY COUNCIL
Tom Adams, Mayor Alexander C. Blackburn, Mayor Pro Tem
Larry J. Spicer Gloria Crudgington Becky A. Shevlin Councilmember Councilmember Councilmember
ELECTED OFFICIALS
Alice D. Atkins, CMC, City Clerk Stephen R. Baker, City Treasurer
MANAGEMENT TEAM
Oliver Chi, City Manager
Mark D. Alvarado, Administrative Services Director/Assistant City Manager Tina Cherry, Director of Public Services
Brad Dover, Fire Chief James Hunt, Chief of Police
Craig Jimenez, Director of Community Development
Submitted By:
Department of Finance June 2016
x
Citywide Thematic Goal
Renewal
Citywide Strategic Goals The City has established four strategic goals in support of our current thematic goal of
Renewal. Those four strategic goals include the following:
Strategic Goal 1: Enhance Organizational Capacity
� Achievement of this goal will be accomplished by pursuing work plan items which
build a mission-driven & values-based organizational culture, establish people-
oriented organizational systems, remove obstacles which impede the ability of
our people to achieve success, and establish performance management systems
that gauge operational effectiveness.
Strategic Goal 2: Enhance Community Infrastructure
� Achievement of this goal will be accomplished by pursuing work plan items which
implement Citywide capital infrastructure improvements, enhance neighborhood
compatibility, and augment historic preservation practices.
Strategic Goal 3: Enhance Fiscal Sustainability
� Achievement of this goal will be accomplished by pursuing work plan items which
support the development of structurally balanced operating budgets, pursue new
economic development opportunities, and enhance office-based occupancy
rates.
Strategic Goal 4: Enhance Relationships with the Community
� Achievement of this goal will be accomplished by pursuing work plan items which
serve to enhance community trust in all City operations, expand Community
Activist Policing programs, inspire excellence in customer service, and provide
enhanced opportunities for civic engagement.
xii
Principles of Financial Management
PRINCIPLE I CITY BUDGETS MUST BALANCE
The City Council will continue to adopt balanced budgets on an annual
basis. Annual audited financial reports confirm the adoption of a
balanced budget, and note any discrepancies. These financial reports
are used by the financing community to gauge the City's credit
worthiness, among other issues.
PRINCIPLE II THE CITY SHALL MAINTAIN PRUDENT RESERVES
Adequate reserves of funds shall be established to meet future capital
needs, to offset economic hard times, to stabilize fluctuations in cash
flow requirements, and to provide for emergency situations.
PRINCIPLE III THE CITY SHALL ENDEAVOR TO MAINTAIN COMPETITIVE COMPENSATION
The City wishes to continue positive labor relations, be competitive in
the market place, and desires to attract and retain top talent.
Competitive salary and benefits will be provided to all employees
within the City's means, with the expectation that services being
provided by staff will continue to be exemplary.
PRINCIPLE IV THE CITY SHALL MAINTAIN ITS INFRASTRUCTURE
Ongoing, preventative maintenance is an essential component of the
City's operations. Adequate funding shall be allocated in current
years to minimize expenditures in future years. Infrastructure
maintenance includes, but is not limited to, streets, sewers, storm
drains, water systems, sidewalks, lights, and parks.
PRINCIPLE V THE CITY SHALL AMORTIZE CAPITAL COSTS
To the extent possible, the cost of replacing or expanding existing
facilities and equipment will be fully amortized as a continuing cost of
doing business. With respect to equipment, rates shall be established
to recover the replacement cost of each item at the end of its useful
life. Facilities will be amortized to cover ongoing maintenance and
cyclical repairs, and for the replacement or expansion of major
structures.
xiii
PRINCIPLE VI THE CITY SHALL ONLY BORROW WHAT IT CAN AFFORD TO REPAY
Loans and other external obligations will be established wisely to level
out costs. Refinancing of existing debt will take place when market
conditions lend themselves to economic gains. The City shall not
overextend indebtedness, which may cause undue financial burdens
in subsequent years.
PRINCIPLE VII THE CITY SHALL FUND ONGOING COSTS WITH ONGOING REVENUES
Cost must be matched with revenues. Ongoing costs shall only be
funded with ongoing revenues. One-time costs can be funded with
one-time revenues. However, ongoing costs cannot be funded by
one-time revenues.
PRINCIPLE VIII THE CITY SHALL BASE ITS BUDGET ON REALISTIC ESTIMATES
The City shall make its budgetary and financial decisions on
conservative estimates of revenues and expenditures.
PRINCIPLE IX THE CITY SHALL COMPETITIVELY PROCURE GOODS AND SERVICES
Significant savings of tax dollars can be obtained through the
competitive bidding of purchases of goods and services. The City
shall seek market prices or proposals for all significant purchases of
goods and services, including periodic market testing of internally-
provided services, consistent with the City's purchasing policy.
Preference will be given to Monrovia businesses.
PRINCIPLE X THE CITY MUST KNOW ITS TRUE COSTS
The City shall maintain current full business costs of providing each
and every City-provided service. In addition, the City shall make
conscious decisions about cost recovery and/or general tax subsidy of
those services which benefit only portions of the tax-paying public.
PRINCIPLE XI THE CITY SHALL PLAN AHEAD
The City shall examine its financial condition periodically by
forecasting several years into the future. In this way, adverse trends
can be anticipated and better managed.
xiv
PRINCIPLE XII THE CITY SHALL MAKE AND REPORT ITS FINANCIAL DECISIONS PUBLICLY
Public involvement is encouraged in budgeting and financial planning.
The City Council shall make all non-routine or non-administrative
financial decisions in public at regularly scheduled meetings, and the
results of such decision-making shall be reported in a timely manner
through Comprehensive Annual Financial Reports and public
information documents.
PRINCIPLE XIII THE CITY SHALL OPPOSE MANDATED PROGRAMS WHICH ARE UNFUNDED
Federal and State Government regularly adopt laws which mandate
local compliance or implementation. The City is forced to incur
additional operating costs, and no funding is provided to pay for these
mandates. The City shall have a general policy against unfunded
mandates that have an adverse impact to Monrovia's services and
budget.
PRINCIPLE XIV THE CITY SHALL CONSERVATIVELY INVEST ITS IDLE CASH
The City will invest its idle cash in a conservative manner so as to
safeguard public funds. Investment instruments will be chosen using
safety, liquidity, and yield as the selection criteria.
xv
INDEPENDENT AUDITORS’ REPORT
To the Honorable Mayor and Members of the City Council
City of Monrovia, California
Report on the Financial Statements
We have audited the accompanying financial statements of the governmental activities, the business-type
activities, each major fund, and the aggregate remaining fund information of City of Monrovia, California,
(the City) as of and for the year ended June 30, 2016, and the related notes to the financial statements,
which collectively comprise the City’s basic financial statements as listed in the table of contents.
Management’s Responsibility for the Financial Statements
Management is responsible for the preparation and fair presentation of these financial statements in
accordance with accounting principles generally accepted in the United States of America; this includes
the design, implementation, and maintenance of internal control relevant to the preparation and fair
presentation of financial statements that are free from material misstatement, whether due to fraud or
error.
Auditor’s Responsibility
Our responsibility is to express opinions on these financial statements based on our audit. We conducted
our audit in accordance with auditing standards generally accepted in the United States of America and
the standards applicable to financial audits contained in Government Auditing Standards, issued by the
Comptroller General of the United States. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in
the financial statements. The procedures selected depend on the auditor’s judgment, including the
assessment of the risks of material misstatement of the financial statements, whether due to fraud or
error. In making those risk assessments, the auditor considers internal control relevant to the entity’s
preparation and fair presentation of the financial statements in order to design audit procedures that are
appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of
the entity’s internal control. Accordingly, we express no such opinion. An audit also includes evaluating
the appropriateness of accounting policies used and the reasonableness of significant accounting
estimates made by management, as well as evaluating the overall presentation of the financial
statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for
our audit opinions.
203 N. Brea Blvd., Suite 203 Brea, CA 92821 Phone: 714.672.0022
An Association of Independent Accounting Firms
To the Honorable Mayor and Members of the City Council
City of Monrovia, California
Opinions
In our opinion, the financial statements referred to above present fairly, in all material respects, the
respective financial position of the governmental activities, the business-type activities, each major fund,
and the aggregate remaining fund information of the City of Monrovia, California, as of June 30, 2016,
and the respective changes in financial position and, where applicable, cash flows thereof for the year
then ended in accordance with accounting principles generally accepted in the United States of America.
Other Matters Required Supplementary Information
Accounting principles generally accepted in the United States of America require that the management’s
discussion and analysis, the budgetary comparison information as listed in the table of contents, the
schedule of changes in net pension liability and related ratio, the schedule of contributions, and the
schedule of proportionate share of the net pension liability be presented to supplement the basic financial
statements. Such information, although not a part of the basic financial statements, is required by the
Governmental Accounting Standards Board, who considers it to be an essential part of financial reporting
for placing the basic financial statements in an appropriate operational, economic, or historical context.
We have applied certain limited procedures to the required supplementary information in accordance with
auditing standards generally accepted in the United States of America, which consisted of inquiries of
management about the methods of preparing the information and comparing the information for
consistency with management’s responses to our inquiries, the basic financial statements, and other
knowledge we obtained during our audit of the basic financial statements. We do not express an opinion
or provide any assurance on the information because the limited procedures do not provide us with
sufficient evidence to express an opinion or provide any assurance.
Other Information
Our audit was conducted for the purpose of forming opinions on the financial statements that collectively
comprise the City’s basic financial statements. The introductory section, combining and individual
nonmajor fund financial statements and schedules, and statistical section are presented for purposes of
additional analysis and are not a required part of the basic financial statements.
The combining and individual nonmajor fund financial statements and schedules are the responsibility of
management and were derived from and relate directly to the underlying accounting and other records
used to prepare the basic financial statements. The information has been subjected to the auditing
procedures applied in the audit of the basic financial statements and certain additional procedures,
including comparing and reconciling such information directly to the underlying accounting and other
records used to prepare the basic financial statements or to the basic financial statements themselves,
and other additional procedures in accordance with auditing standards generally accepted in the United
States of America. In our opinion, the combining and individual nonmajor fund financial statements and
schedules are fairly stated in all material respects in relation to the basic financial statements as a whole.
The introductory and statistical sections have not been subjected to the auditing procedures applied in the
audit of the basic financial statements and, accordingly, we do not express an opinion or provide any
assurance on them.
2
To the Honorable Mayor and Members of the City Council City of Monrovia, California
Other Reporting Required by Government Auditing Standards
In accordance with Government Auditing Standards, we have also issued our report dated December 20, 2016 on our consideration of the City’s internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the City’s internal control over financial reporting and compliance.
Brea, California December 20, 2016
3
MANAGEMENT’S DISCUSSION AND ANALYSIS
As management of the City of Monrovia, we offer readers of the City of Monrovia’s financial statements this narrative overview and analysis of the financial activities of the City of Monrovia for the fiscal year ended June 30, 2016. We encourage readers to consider the information presented here in conjunction with additional information that we have furnished in our Letter of Transmittal and the City’s financial statements.
FINANCIAL HIGHLIGHTS
x The assets and deferred outflows of the City, as a whole, exceeded its liabilities and deferred inflows at the close of fiscal year 2015-2016 by $34.79 million (net position). Of this amount, the City had $93.71 million invested in capital assets, $34.32 million in restricted net position, and ($93.24) million in unrestricted net position. This reflects a net increase over the prior year of $11.13 million. The analysis of this change is discussed under the section titled “THE CITY AS A WHOLE.”
x During the year, the City had revenues (including transfers) that were $12.19 million more than the$51.56 million expenses recorded by the City for its governmental activities. For the City’s business-typeactivities, revenues were $1.06 million less than the $10.65 million in expenses (including transfers)recorded for the year. The analysis of these changes in net position is discussed under the section titled“THE CITY AS A WHOLE.”
x During the year, the City’s revenues increased by $1.03 million over the prior year, or 1.48 percent.Additionally, expenditures decreased by $1.64 million over the prior year, or 2.68 percent. The analysis ofthese changes is also discussed under the section titled “THE CITY AS A WHOLE.”
x In the General Fund, the net increase in fund balance was $3.80 million. The analysis of this increase isdiscussed under the section titled “THE CITY’S FUNDS.”
x The City’s total outstanding debt at year-end increased by $49.17 million. The analysis of this increase isdiscussed under the section titled “CAPITAL ASSETS AND DEBT ADMINISTRATION.”
x The City’s total capital assets increased by $5.09 million, or 4.57 percent. The analysis of this increase isdiscussed under the section titled “CAPITAL ASSETS AND DEBT ADMINISTRATION.”
x During the year, the City began a comprehensive infrastructure improvement project called MonroviaRenewal. The Monrovia Renewal Project is aimed at making citywide repairs to water pipelines andfacilities, sewer pipelines, streets, and sidewalks. Funding for the project was achieved through theissuance of various bond financings. The “CAPITAL ASSETS AND DEBT ADMINISTRATION” sectionsinclude asset and debt information related to the project.
USING THIS ANNUAL REPORT
This annual report consists of a series of financial statements. The Statement of Net Position and Statement of Activities (on pages 19-21) provide information about the activities of the City, as a whole, and present a long-term view of the City’s finances. Fund financial statements start on page 26. For governmental activities, these fund statements tell how these services were financed in the short term, as well as what remains for future spending. Fund financial statements also report the City’s operations in more detail than the government-wide statements by providing information about the City’s most significant funds and other funds. The remaining fiduciary (Agency) fund statements provide financial information about activities for which the City acts solely as a trustee or agent for the benefit of those outside of the government.
5
REPORTING THE CITY AS A WHOLE The Statement of Net Position and the Statement of Activities: Our analysis of the City, as a whole, begins on page 19. Each year, one of the most important questions asked about the City’s finances is, “Is the City, as a whole, better off or worse off as a result of the year’s activities?” The Statement of Net Position and the Statement of Activities report information about the City, as a whole, and about its activities in a way that answers this question. These statements include all assets and liabilities of the City using the accrual basis of accounting, which is similar to the accounting used by most private-sector companies. All of the current year’s revenues and expenses are taken into account regardless of when cash is received or paid. These two statements report the City’s net position and changes. Net position is the difference between assets and liabilities, which is one way to measure the City’s financial health, or financial position. Over time, increases or decreases in the City’s net position is an indication of whether its financial health is improving or deteriorating. In the Statement of Net Position and the Statement of Activities, we separate the City activities as follows: Governmental activities – Most of the City’s basic services are reported in this category, including the general administration (city manager, city clerk, finance, etc.), police and fire protection, community development, public works, community services, and interest on long-term debt. Property taxes, sales tax, transient occupancy tax, interest income, franchise fees, state and federal grants, contributions from other agencies, and other revenues finance these activities. Business-type activities – The City charges a fee to customers to cover all or most of the cost of certain services it provides. The City’s water, sewer, storm drain, street sweeping and waste management activities are reported in this category. REPORTING THE CITY’S MOST SIGNIFICANT FUNDS Fund Financial Statements: The fund financial statements provide detailed information about the most significant funds and other funds – not the City as a whole. Some funds are required to be established by State law and by bond covenants. However, management established many other funds to help it control and manage money for particular purposes or to show that it is meeting legal responsibilities for using certain taxes, grants, and other resources. The City’s two types of funds are governmental and proprietary.
6
Governmental funds – Most of the City’s basic services are reported in governmental funds, which focus on how money flows in and out of those funds and the balances left at year-end that are available for spending. These funds are reported using an accounting method called modified accrual accounting, which measures cash and all other financial assets that can readily be converted to cash. The governmental fund statements provide a detailed short-term view of the City’s general government operations and the basic services it provides. Governmental fund information helps determine whether there are more or fewer financial resources that can be spent in the near future to finance the City’s programs. The differences of results in the governmental fund financial statements to those in the government-wide financial statements are explained in a reconciliation following each governmental fund financial statement. Proprietary funds – When the City charges customers for the services it provides, these services are generally reported in proprietary funds. Proprietary funds are reported in the same way that all activities are reported in the Statement of Net Position and the Statement of Activities. In fact, the City’s enterprise funds are the same as the business-type activities we report in the government-wide statements, but provide more detail and additional information such as a statement of cash flows.
THE CITY AS TRUSTEE
Reporting the City’s Fiduciary Responsibilities: The City is the trustee, or fiduciary, for certain funds held on behalf of those entities outside of the government. The City’s fiduciary activities are reported in a separate Statement of Fiduciary Net Position. We exclude these activities from the City’s other financial statements because the City cannot use these assets to finance its operations. The City is responsible for ensuring that the assets reported in these funds are used for their intended purposes.
THE CITY AS A WHOLE
The City’s combined net position increased $11.13 million. A separate review of the net change in the governmental and business-type activities depicts two different stories. Our analysis below focuses on the net position (Table 1) and changes in net position (Table 2) of the City’s governmental and business-type activities.
7
TABLE 1
NET POSITION (IN MILLIONS)
As of June 30, 2016
Governmental
Activities Business-Type
Activities Total
2016 2015 2016 2015 2016 2015
Current and other assets $ 53.17 $ 41.01 $ 51.04 $ 13.53 $ 104.21 $ 54.54Capital assets 102.52 98.13 13.84 13.14 116.36 111.27 TOTAL ASSETS 155.69 139.14 64.88 26.67 220.57 165.81 Deferred outflows 6.07 4.90 .46 .48 6.53 5.38 Long term liabilities Outstanding
128.25
110.50 46.18 7.04
174.43
117.54
Other liabilities 7.98 12.92 2.12 1.66 10.10 14.58 TOTAL LIABILITIES 136.23 123.42 48.30 8.70 184.53 132.12 Deferred inflows 7.20 14.49 .57 .92 7.77 15.41 Net Investment in Capital Assets 81.21 77.22 12.50 13.14 93.71 90.36
Restricted 34.32 20.50 - - 34.32 20.50Unrestricted (97.21) (91.59) 3.97 4.39 (93.24) (87.20) TOTAL NET POSITION
$ 18.32
$ 6.13 $ 16.47 $ 17.53
$ 34.79
$ 23.66
8
TABLE 2
CHANGES IN NET POSITION (IN MILLIONS)
As of June 30, 2016
Governmental Activities
Business Type Activities
Total
2016 2015 2016 2015 2016 2015
REVENUES: Program Revenues: Charges for services $ 8.83 $ 7.14 $ 9.41 $ 8.98 $ 18.24 $ 16.12 Operating grants and contributions 8.18 8.58 .02 .03 8.20 8.61 Capital grants and contributions 8.10 12.18 - - 8.10 12.18General Revenues: Property Taxes 20.52 19.03 - - 20.52 19.03 Sales Tax 9.45 8.06 - - 9.45 8.06 Franchise Taxes .63 .60 - - .63 .60 Other Taxes 1.07 1.24 - - 1.07 1.24 Motor Vehicle In-Lieu .02 .01 - - .02 .01 Use of Money & Property .65 .53 .12 .07 .77 .60 Other Revenues 3.43 2.97 .04 .02 3.47 2.99 TOTAL REVENUES 60.88 60.34 9.59 9.10 70.47 69.44 EXPENSES: General Government 6.18 6.32 - - 6.18 6.32 Public Safety 30.00 30.05 - - 30.00 30.05 Community Development 3.85 3.51 - - 3.85 3.51 Community Services 4.08 4.34 - - 4.08 4.34 Public Works 5.45 6.00 - - 5.45 6.00 Interest on Long-term Debt 2.00 2.00 - - 2.00 2.00 Water - - 6.26 6.33 6.26 6.33 Sewer - - .83 1.00 .83 1.00 Storm Drain - - .22 .67 .22 .67 Street Sweeping - - .11 .20 .11 .20 Waste Management - - .36 .56 .36 .56TOTAL EXPENSES 51.56 52.22 7.78 8.76 59.34 60.98 Increase (Decrease) in Net Position before transfers
9.32 8.12 1.81
.34
11.13 8.46
Transfers 2.87 1.91 (2.87) (1.91) - - Increase (Decrease) in Net Position 12.19 10.03 (1.06) (1.57) 11.13 8.46Net Position at Beginning of Year 6.13 66.06 17.53 26.46 23.66 92.52Restatements of Net Position - (69.96) - (7.36) - (77.32) NET POSITION AT END OF YEAR $ 18.32 $ 6.13 $16.47 $ 17.53 $ 34.79 $ 23.66
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Compared to the prior year, the net position of the City’s governmental activities increased by 198.86 percent, or $12.19 million. This overall increase is partially due to an increase in revenues of $.54 million over the prior year and a decrease in expenses of $.66 million over the prior year, creating a much larger gap between revenues and expenditures for the year. In addition, transfers increased by $.96 million over the prior year. Overall, both governmental and business-type activities were $11.13 million more than expenses during the year. This positive increase is mainly attributable to the receipt of grant revenues for the Station Square project, as well as an increase in other tax revenue throughout the City. The City’s net position of $34.79 million is made-up of three components: Net Investment in Capital Assets, Restricted Net Position and Unrestricted Net Position. The largest portion of the City’s net position, $93.71 million, reflects its net investment in capital assets (e.g., infrastructure, land, buildings, machinery, and equipment) less any related debt used to acquire those assets that is still outstanding. The City uses these capital assets to provide services to the community. As such, these assets are not available for spending. In addition, $34.32 million of the City’s net position represents resources that are subject to external restrictions on how they may be used. The remaining negative balance of unrestricted net position of $93.24 million is the result of the implementation of GASB 68. During fiscal year 2014-2015, the City implemented GASB 68, a new accounting standard that established new financial reporting requirements for most state and local governments that provide employees with pension benefits. GASB 68 requires governments providing defined benefit pensions, such as the City of Monrovia, to recognize their long-term obligation for pension benefits as a liability on the Government-Wide Statement of Net Position for the first time. This accounting requirement has resulted in a restatement of net position totaling $77.32 million for the City of Monrovia during fiscal year 2014-2015. For additional information regarding GASB 68, please see the Notes to the Financial Statements, Note 10.
Governmental Activities The following presents the cost of each of the City’s six largest programs – general government, public safety, community development, community services, public works and interest on long-term debt – as well as each program’s net cost (total cost less revenues generated by the activities). The net cost shows the financial burden that was placed on the City’s taxpayers by each of these functions. The City earmarks most of its general revenues (i.e., sales tax, property taxes, occupancy taxes, business license taxes, motor vehicle fees and franchise fees) to provide the services from the areas listed below. Public safety (police and fire services) is always the number one priority for the use of discretionary revenues. During fiscal year 2015-2016, the public works program recognized $3.79 million more in revenues than expenses in the Statement of Activities. This is the result of the City receiving grant reimbursements for Station Square Project costs that were capitalized as Construction in Progress assets. The expensing of these capitalized assets will be recognized each year as depreciation is recorded over their useful lives.
10
Governmental Activities (In Millions)
THE CITY’S FUNDS On pages 26-27, the Governmental Funds Balance Sheet is shown. The combined fund balance of $39.61 million increased by $24.95 million over the prior year. This net increase is due to the following increases and decreases among the City’s funds:
x An increase of $3.80 million in the General Fund, due to a general increase in most revenues and transfers. The General Fund is discussed in further detail in the section titled “General Fund Budgetary Highlights” below.
x An increase of $13.33 million in the Proposition C and Measure R Projects Fund, a new fund established during the year. This increase is the result of the issuance of bonds that will be used for capital projects.
x A net increase of $5.61 million in the Capital Improvement Fund. This increase is due to grant timing factors. Grant expenditures from the previous year were reimbursed during the current year, resulting in an excess of revenues over expenditures.
x An increase of $.32 million in the City’s Gang Violence and Drug Abuse Grants Fund, a fund which is used to account for activity related to several state and federal public safety grants. This increase of $.32 million is due to prior year expenditures being reimbursed by the grantor during the current year.
x All other funds contributed minor increases and decreases to the overall total during the year.
General Fund Budgetary Highlights During the year, with the recommendation from City staff, the City Council made several adjustments to the budget. Adjustments were made as staff requested additional appropriations to cover the cost of projects that either had change orders for additional work, or the estimated cost at the beginning of the project was underestimated. Adjustments were also made as departments requested increases to their budgets to implement new programs or to add enhancements to existing programs. All amendments that either increase or decrease appropriations are approved by the City Council.
Total Cost of Services
Net Cost of Services
General Government $ 6.18 $ 4.48 Public Safety 30.00 20.40 Community Development 3.85 .81 Community Services 4.08 2.55 Public Works 5.45 (3.79) Interest on Long-Term Debt 2.00 2.00 Total $ 51.56 $ 26.45
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For the City’s General Fund, actual ending revenues of $42.19 million (including transfers) were $2.93 million more than final budgeted revenues of $39.26 million. This difference was due to the following:
x The City experienced an increase in several of its key revenue streams, including property tax, sales tax, and transient occupancy tax revenue over the prior year. This resulted in $.54 million more in tax revenue than budgeted.
x Charges for Services revenue was $.44 million more than budgeted. x Intergovernmental revenue was $.87 more than budgeted. x Only one revenue source, Fines and Forfeitures, came in slightly lower than budget.
The General Fund actual expenditures of $38.38 million (including transfers) were $.11 million less than the final budget of $38.49 million. This variance was due to the following:
x While the City realized savings in many departments, several departments incurred overages, including Police Patrol and Communication Crime Analysis. Other departments incurred minor overages. These overages were partly offset by an increase in revenues in several of these departments, as well as significant cost savings in several departments and programs, including the City Attorney, the Library, and Canyon Park. These budget savings were achieved through staffing vacancies and other cost saving measures implemented by the City’s operating departments.
CAPITAL ASSET AND DEBT ADMINISTRATION Capital Assets At June 30, 2016, the City had $116.36 million in land, buildings, equipment, and infrastructure capital assets. (See Table 3). This amount represents a net increase (including additions, deletions, and adjustments) of $5.09 million. Capital assets increased by $4.39 million in governmental activities and increased by $.70 million in business-type activities. Normal depreciation of existing assets resulted in a decrease in some asset categories, such as Structures and Improvements and Infrastructure. Construction in Progress; however, increased by $7.42 million during the year. This increase is due to construction activity related to the City’s Station Square Project and the Monrovia Renewal Project. To see detailed activity for Capital Assets, please see pages 57 and 58 in the notes to the financial statements.
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TABLE 3
CAPITAL ASSETS AT YEAR-END (NET OF DEPRECIATION, IN MILLIONS)
For the year ended June 30, 2016
Debt At year-end, the City’s governmental activities had $50.31 million in bonds, leases, compensated absences, and claims and judgments, compared to $40.64 million in the prior year, an increase of $9.67 million. The net increase of $9.67 million was mainly due to the issuance of new bonds for the Monrovia Renewal Project. These increases were offset by decreases in pension obligation bonds, capitalized leases, and claims and judgments. The decreases in pension obligation bonds and capitalized leases are the result of the normal payment of principal and interest during the year. The decrease in claims and judgments is due to a change in methodology of insurance coverage for the City during the year. Please see the Notes to the Financial Statements for detailed information (pages 61-72).
TABLE 4
OUSTANDING DEBT, AT YEAR-END (IN MILLIONS)
For the year ended June 30, 2016
Governmental Activities
Business Type Activities
Total
2016 2015 2016 2015 2016 2015
Land $ 32.82 $ 32.82 $ .44 $ .44 $ 33.26 $ 33.26Construction in Progress 21.27 14.88 1.03 - 22.30 14.88Structures and Improvements
16.92
17.60 2.24 2.30
19.16 19.90
Furniture and Equipment 4.48 3.64 .06 .06 4.54 3.70
Infrastructure 27.03 29.19 10.07 10.34 37.10 39.53 Total $ 102.52 $ 98.13 $ 13.84 $ 13.14 $ 116.36 $ 111.27
Governmental Activities
Business Type Activities
Total
2016 2015 2016 2015 2016 2015 Compensated Absences $ 2.12 $ 2.08 $ .12 $ .15 $ 2.24 $ 2.23Pension Obligation Bonds 11.42 11.81 - - 11.42 11.81Capitalized Leases .41 .47 - - .41 .47Claims & Judgments 1.97 5.79 - - 1.97 5.79Revenue Bonds 33.10 20.16 36.77 - 69.87 20.16Unamortized Bond Premium (Discount)
1.29
.33 2.76 -
4.05 .33
TOTALS $ 50.31 $ 40.64 $ 39.65 $ .15 $ 89.96 $ 40.79
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The City’s business-type activities debt increased $39.50 million, from $.15 million to $39.65 million. This large increase is due to the issuance of water and sewer bonds for the Monrovia Renewal Project. For detailed information, please see page 72 in the Notes to the Financial Statements.
ECONOMIC FACTORS AND NEXT YEAR’S BUDGET
In preparing the budget for 2016-2017, management looked at the following economic factors:
x The effects of steady growth in the overall economy.x The impact on revenues resulting from the steady growth in housing market activity (e.g., increase in
home sale activity and increase in housing prices) in California.x The impact on revenues resulting from the growth in retail sales activity in California.x The impact on revenues resulting from growth in tourism activity within California.
Key budget assumptions for forecasting General Fund revenues include the following:
x Sales Tax revenue is expected to increase by approximately 4 percent over the prior year. This growthis attributed to growth in the overall economy and in consumer spending.
x Secured Property Tax revenues will continue to experience steady growth in 2016-2017. This growth ispartly due to the increase in assessed valuation of single-family homes.
x Transient Occupancy (Hotel) Tax revenues will increase by approximately 3 percent. With most hotelsshowing strong occupancy rates, and tourism activity within California on the rise, hotel tax revenue isexpected to increase during the 2016-2017 fiscal year.
x Service revenues, especially building and planning-related revenues, will continue to experience growthas the construction sector activity continues to improve.
x Some growth in revenue will result from realigning fees with the cost of services.
The Operating Budget for Fiscal Year 2016-2017 is a well-balanced budget that reflects the City's commitment to foster steady, controlled growth and provide the highest level of service to the community within the City's financial constraint and is consistent with the City Council's list of objectives. Budget documents are available online at www.cityofmonrovia.org. Questions or requests for information regarding the City of Monrovia's budget should be sent to the Administrative Services Department at the address below.
CONTACTING THE CITY’S FINANCIAL MANAGEMENT
This financial report is designed to provide our citizens, taxpayers, customers, investors, and creditors with a general overview of the City of Monrovia’s finances and to show the City’s accountability for the money it receives. Questions concerning any of the information provided in this report or requests for additional financial information should be addressed to:
City of Monrovia Administrative Services Department
415 S. Ivy Monrovia, CA 91016.
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CITY OF MONROVIA
STATEMENT OF NET POSITION
Governmental Business-TypeActivities Activities Total
Assets:Cash and investments 24,817,250$ 23,417,109$ 48,234,359$ Receivables:
Accounts 1,414,602 1,402,712 2,817,314 Taxes 3,897,237 - 3,897,237 Notes and loans 1,277,418 - 1,277,418 Accrued interest 66,517 - 66,517 Deferred loans 1,663,518 - 1,663,518 Grants 1,714,179 - 1,714,179
Internal balances (51,076) 51,076 - Advances to Successor Agency 2,551,385 - 2,551,385 Prepaid costs 2,057,421 130,580 2,188,001 Inventories 1,670 - 1,670 Land held for resale 3,139,259 - 3,139,259 Restricted assets:
Cash and investments 1,130,492 - 1,130,492 Cash with fiscal agent 9,493,223 26,042,206 35,535,429
Capital assets not being depreciated 54,092,131 1,464,394 55,556,525 Capital assets, net of depreciation 48,429,068 12,371,119 60,800,187
Total Assets 155,694,294 64,879,196 220,573,490
Deferred Outflows of Resources:Deferred charge on refunding 54,706 - 54,706 Deferred pension related items 6,015,036 455,834 6,470,870
Total Deferred Outflows of Resources 6,069,742 455,834 6,525,576
Liabilities:Accounts payable 2,568,246 987,723 3,555,969 Accrued liabilities 471,508 10,667 482,175 Accrued interest 274,062 390,883 664,945 Unearned revenue 325,589 22,891 348,480 Deposits payable 119,312 222,234 341,546 Due to other governments 192,177 - 192,177 Noncurrent liabilities:
Due within one year 4,070,410 487,643 4,558,053 Due in more than one year 46,238,541 39,168,885 85,407,426 OPEB Obligation 14,265,963 - 14,265,963 Net pension liability 67,709,081 7,006,889 74,715,970
Total Liabilities 136,234,889 48,297,815 184,532,704
Deferred Inflows of Resources:Deferred pension related items 7,201,535 567,941 7,769,476
Total Deferred Inflows of Resources 7,201,535 567,941 7,769,476
Net Position:Net investment in capital assets 81,209,749 12,500,944 93,710,693 Restricted for:
Housing 6,489,031 - 6,489,031 Public safety 916,119 - 916,119 Public works 361,180 - 361,180
Capital projects 16,388,881 - 16,388,881 Debt service 1,988,459 - 1,988,459 Retirement 2,880,287 - 2,880,287 Transportation 4,329,410 - 4,329,410 Air quality 341,307 - 341,307 Street maintenance 194,961 - 194,961 Library 333,567 - 333,567 Memorial Trust
Expendable 30,169 - 30,169 Nonexpendable 70,000 - 70,000
Unrestricted (97,205,508) 3,968,330 (93,237,178)
Total Net Position 18,327,612$ 16,469,274$ 34,796,886$
JUNE 30, 2016
Primary Government
See Notes to Financial Statements15
CITY OF MONROVIA
STATEMENT OF ACTIVITIESYEAR ENDED JUNE 30, 2016
Operating CapitalCharges for Contributions Contributions
Expenses Services and Grants and Grants
Functions/ProgramsPrimary Government:Governmental Activities:
General government 6,180,431$ 1,695,935$ -$ 6,195$ Public safety 30,004,707 2,669,686 6,937,517 - Community development 3,852,738 2,396,273 645,813 - Community services 4,076,224 1,460,641 64,618 - Public works 5,446,094 611,954 531,193 8,092,843 Interest on long-term debt 1,998,044 - - -
Total Governmental Activities 51,558,238 8,834,489 8,179,141 8,099,038
Business-Type Activities:Water 6,259,232 6,332,222 - - Sewer 833,572 1,162,961 - - Storm Drain 224,510 286,604 - - Street Sweeping 105,187 211,107 - - Waste Management 359,475 1,417,668 22,048 -
Total Business-Type Activities 7,781,976 9,410,562 22,048 -
Total Primary Government 59,340,214$ 18,245,051$ 8,201,189$ 8,099,038$
General Revenues:Taxes: Property taxes, levied for general purpose Transient occupancy taxes Sales taxes Franchise taxes Business licenses taxes Other taxesMotor vehicle in lieu - unrestrictedUse of money and propertyOther
Transfers
Total General Revenues and Transfers
Change in Net Position
Net Position at Beginning of Year
Net Position at End of Year
Program Revenues
See Notes to Financial Statements16
Primary Government
Governmental Business-TypeActivities Activities Total
(4,478,301)$ -$ (4,478,301)$ (20,397,504) - (20,397,504)
(810,652) - (810,652) (2,550,965) - (2,550,965) 3,789,896 - 3,789,896
(1,998,044) - (1,998,044)
(26,445,570) - (26,445,570)
- 72,990 72,990 - 329,389 329,389 - 62,094 62,094 - 105,920 105,920 - 1,080,241 1,080,241
- 1,650,634 1,650,634
(26,445,570) 1,650,634 (24,794,936)
20,521,090 - 20,521,090 1,891,098 - 1,891,098 9,451,394 - 9,451,394
632,425 - 632,425 777,899 - 777,899
1,068,417 - 1,068,417 24,576 - 24,576
652,691 118,106 770,797 755,084 35,765 790,849
2,865,417 (2,865,417) -
38,640,091 (2,711,546) 35,928,545
12,194,521 (1,060,912) 11,133,609
6,133,091 17,530,186 23,663,277
18,327,612$ 16,469,274$ 34,796,886$
Net (Expenses) Revenues and Changes in Net Position
See Notes to Financial Statements17
MAJOR GOVERNMENTAL FUNDS The following funds have been classified as major governmental funds in the accompanying financial statements. General Fund - To account for all revenues and expenditures of the City which are
not required to be accounted for in another fund. Gang Violence and Drug Abuse Grant Fund – To account for the revenues and
expenditures of federal and state anti-drug abuse grants for which the City provides fiduciary responsibilities. The City is the grant recipient for funds used by a consortium of federal, state, and local law enforcement agencies who manage grant activities.
Monrovia Housing Authority Fund – To account for the costs of construction and
management of quality affordable housing within the City. The Monrovia Housing Authority was established pursuant to the California Housing Authority law. Proposition C and Measure R Projects - To account for Proposition C and Measure R project expenditures for the Monrovia Renewal Improvement Program, which have been financed through a bond measure. This program will provide for citywide street infrastructure repairs and improvements. Capital Improvement Fund - To account for the costs associated with major capital improvement projects not financed under other funds. The many different projects undertaken by this fund are under the control of the Public Works Department. Financing for the projects includes state grants, investment earnings, and new construction taxes.
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CITY OF MONROVIA
BALANCE SHEETGOVERNMENTAL FUNDS JUNE 30, 2016
GeneralAssets:Pooled cash and investments 4,022,651$ -$ 685,930$ 3,931,898$ 568,825$ Receivables:
Accounts 689,908 - - - 185,045 Taxes 3,696,421 - - - - Notes and loans 31,705 - 1,245,713 - - Accrued interest 66,517 - - - - Deferred loans - - 1,663,518 - - Grants 75,043 1,222,940 - - 160,216
Prepaid costs 301,640 - - - 1,744,796 Due from other funds 541,462 - - - - Advances to Successor Agency of the former RDA - - 2,551,385 - - Land held for resale 353,790 - 347,036 - 2,438,433 Restricted assets:
Cash and investments - - - - 328,315 Cash and investments with fiscal agents - - - 9,493,208 -
Total Assets 9,779,137$ 1,222,940$ 6,493,582$ 13,425,106$ 5,425,630$
Liabilities, Deferred Inflows of Resources, and Fund Balances:
Liabilities:Accounts payable 639,087$ 798,844$ 2,409$ 89,536$ 381,176$ Accrued liabilities 438,939 - 2,142 - - Unearned revenues 42,934 143,055 - - 139,600 Deposits payable 119,312 - - - - Due to other governments - - - - 188,642 Due to other funds - 151,188 - - - Advances from other funds 92,896 - - - -
Total Liabilities 1,333,168 1,093,087 4,551 89,536 709,418
Deferred Inflows of Resources:Unavailable revenues 778,887 594,073 2,459,231 - 345,501
Total Deferred Inflows of Resources 778,887 594,073 2,459,231 - 345,501 Fund Balances: Nonspendable: Prepaid costs 301,640 - - - 1,744,796 Land held for resale 353,790 - - - - Permanent fund principal - - - - - Restricted for: Public safety - - - - - Public works - - - - - Capital Projects - - - 13,335,570 2,625,915 Debt service - - - - - Retirement - - - - - Transportation - - - - - Air quality - - - - - Street repair and maintenance - - - - - Library - - - - - Housing - - 4,029,800 - - Assigned to: Special Programs 1,381,407 - - - - Unassigned 5,630,245 (464,220) - - -
Total Fund Balances 7,667,082 (464,220) 4,029,800 13,335,570 4,370,711
Total Liabilities, Deferred Inflows of Resources, and Fund Balances 9,779,137$ 1,222,940$ 6,493,582$ 13,425,106$ 5,425,630$
Special Revenue Funds Proposition
C and Measure R
Projects Capital
Improvement
Monrovia Housing Authority
Gang Violence and Drug Abuse
Grants
Capital Projects Funds
See Notes to Financial Statements20
CITY OF MONROVIA
BALANCE SHEETGOVERNMENTAL FUNDSJUNE 30, 2016
Assets:Pooled cash and investmentsReceivables:
AccountsTaxesNotes and loansAccrued interestDeferred loansGrants
Prepaid costsDue from other fundsAdvances to Successor Agency of the former RDALand held for resaleRestricted assets:
Cash and investmentsCash and investments with fiscal agents
Total Assets
Liabilities, Deferred Inflows of Resources, and Fund Balances:
Liabilities:Accounts payableAccrued liabilitiesUnearned revenuesDeposits payableDue to other governmentsDue to other fundsAdvances from other funds
Total Liabilities
Deferred Inflows of Resources:Unavailable revenues
Total Deferred Inflows of ResourcesFund Balances: Nonspendable: Prepaid costs Land held for resale Permanent fund principal Restricted for: Public safety Public works Capital Projects Debt service Retirement Transportation Air quality Street repair and maintenance Library Housing Assigned to: Special Programs Unassigned
Total Fund Balances
Total Liabilities, Deferred Inflows of Resources, and Fund Balances
9,859,360$ 19,068,664$
460,725 1,335,678 200,816 3,897,237
- 1,277,418 - 66,517 - 1,663,518
255,980 1,714,179 - 2,046,436 - 541,462 - 2,551,385 - 3,139,259
802,177 1,130,492 15 9,493,223
11,579,073$ 47,925,468$
289,786$ 2,200,838$ 14,653 455,734
- 325,589 - 119,312
3,535 192,177 234,699 385,887 150,937 243,833
693,610 3,923,370
210,634 4,388,326
210,634 4,388,326
- 2,046,436 - 353,790
100,169 100,169
233,746 233,746 359,978 359,978
- 15,961,485 1,988,459 1,988,459 2,880,287 2,880,287 4,299,081 4,299,081
341,307 341,307 186,053 186,053 333,567 333,567
- 4,029,800
- 1,381,407 (47,818) 5,118,207
10,674,829 39,613,772
11,579,073$ 47,925,468$
Other Governmental
Funds
Total Governmental
Funds
See Notes to Financial Statements21
CITY OF MONROVIA
RECONCILIATION OF THE BALANCE SHEET OF GOVERNMENTAL FUNDSTO THE STATEMENT OF NET POSITIONJUNE 30, 2016
Fund balances of governmental funds 39,613,772$
Amounts reported for governmental activities in the statement of net position are different because:
Capital assets net of depreciation have not been included as financial resources in governmental fund activity. 97,515,723
Deferred charge on refunding have not been included in the governmental fund activity. 54,706
Deferred outflows related to pension items:Miscellaneous pension contributions subsequent to measurement date 2,225,614$ Safety pension contributions subsequent to measurement date 3,515,143 Safety adjustment due to differences in proportion 67,492 5,808,249
Long-term debt and compensated absences that have not been included in the governmental fund activity:
Bonds payable (44,520,000) Unamortized bond premiums/discounts (1,287,706) Compensated Absences (2,015,695) (47,823,401)
Governmental funds report all OPEB contributions as expenditures, however in the statement of net position any excesses or deficiencies in contributions in relation to the Annual Required Contribution (ARC) are recorded as an asset or liability. (14,265,963)
Governmental funds report all pension contributions as expenditures, however the unfunded net pension liability is reported in the statement of net position.
Miscellaneous net pension liability (27,884,395) Safety net pension liability (36,861,305) (64,745,700)
Accrued interest payable for the current portion of interest due on bonds has not been reported in the governmental funds. (274,062)
Revenues reported as unavailable revenue in the governmental funds and recognized in the statement of activities. These are included in the intergovernmental revenues in the governmental fund activity. 4,388,326
Deferred inflows related to pension items:Miscellaneous change in assumptions (811,639) Miscellaneous net differences between projected and actual experience (744,528) Miscellaneous net differences between projected and actual earnings (315,113) Safety change in assumptions (1,641,246) Safety net differences between projected and actual experience (356,842) Safety net differences between projected and actual earnings (831,794) Safety adjustment due to difference in proportions (240,946) Safety adjustment due to difference in proportion contribution (2,024,696) (6,966,804)
Internal service funds are used by management to charge the costs of certain activities, such as equipment management and self-insurance, to individual funds. The assets and liabilities of the internal service funds must be added to the statement of net position. 5,022,766
Net Position of governmental activities 18,327,612$
See Notes to Financial Statements23
CITY OF MONROVIA
STATEMENT OF REVENUES,EXPENDITURES AND CHANGES IN FUND BALANCESGOVERNMENTAL FUNDSYEAR ENDED JUNE 30, 2016
General Revenues:Taxes 25,043,636$ -$ -$ -$ 82,510$ Assessments - - - - - Licenses and permits 1,408,368 - - - - Intergovernmental 1,659,869 6,959,586 - - 11,761,127 Charges for services 3,197,813 - - - - Use of money and property 360,966 2,268 22,523 7,882 1,273 Fines and forfeitures 263,280 - - - - Contributions 101,972 - - - - Miscellaneous and other revenue 768,948 16,147 220,358 - -
Total Revenues 32,804,852 6,978,001 242,881 7,882 11,844,910
Expenditures:Current: General government 4,652,829 - - - - Public safety 23,919,610 6,660,449 - - - Community development 2,516,810 - 111,414 - - Parks and recreation 4,187,587 - - - - Public works 1,251,487 - - - 11,416 Capital outlay - - - 162,976 6,225,544 Debt service: Principal retirement - - - - - Interest and fiscal charges 368 - - - -
Total Expenditures 36,528,691 6,660,449 111,414 162,976 6,236,960
Excess (Deficiency) of Revenues Over (Under) Expenditures (3,723,839) 317,552 131,467 (155,094) 5,607,950
Other Financing Sources (Uses):Transfers in 9,026,377 - 12,391 - - Transfers out (1,853,922) - (23,991) - - Lease revenue issued - - - 13,490,664 - Bond premium - - - - -
Total Other Financing Sources (Uses) 7,172,455 - (11,600) 13,490,664 -
Extraordinary gain/(loss) 353,790 - (353,790) - -
Net Change in Fund Balances 3,802,406 317,552 (233,923) 13,335,570 5,607,950
Fund Balances, Beginning of Year 3,864,676 (781,772) 4,263,723 - (1,237,239)
Fund Balances, End of Year 7,667,082$ (464,220)$ 4,029,800$ 13,335,570$ 4,370,711$
Proposition C and Measure R
Projects Capital
Improvement
Gang Violence and Drug Abuse
Grants
Monrovia Housing Authority
Capital Projects Funds Special Revenue Funds
See Notes to Financial Statements24
CITY OF MONROVIA
STATEMENT OF REVENUES,EXPENDITURES AND CHANGES IN FUND BALANCESGOVERNMENTAL FUNDSYEAR ENDED JUNE 30, 2016
Revenues:TaxesAssessmentsLicenses and permitsIntergovernmentalCharges for servicesUse of money and propertyFines and forfeituresContributionsMiscellaneous and other revenue
Total Revenues
Expenditures:Current: General government Public safety Community development Parks and recreation Public worksCapital outlayDebt service: Principal retirement Interest and fiscal charges
Total Expenditures
Excess (Deficiency) of Revenues Over (Under) Expenditures
Other Financing Sources (Uses):Transfers inTransfers outLease revenue issuedBond premium
Total Other Financing Sources (Uses)
Extraordinary gain/(loss)
Net Change in Fund Balances
Fund Balances, Beginning of Year
Fund Balances, End of Year
9,216,177$ 34,342,323$ 1,332,814 1,332,814
- 1,408,368 2,271,876 22,652,458
217,367 3,415,180 68,508 463,420
636,504 899,784 - 101,972 - 1,005,453
13,743,246 65,621,772
146,980 4,799,809 1,405,878 31,985,937 1,510,052 4,138,276
46,884 4,234,471 2,664,025 3,926,928
25,265 6,413,785
1,045,000 1,045,000 1,884,031 1,884,399
8,728,115 58,428,605
5,015,131 7,193,167
4,557,240 13,596,008 (8,503,487) (10,381,400)
109,336 13,600,000 938,901 938,901
(2,898,010) 17,753,509
- -
2,117,121 24,946,676
8,557,708 14,667,096
10,674,829$ 39,613,772$
Other Governmental
Funds
Total Governmental
Funds
See Notes to Financial Statements25
CITY OF MONROVIA
RECONCILIATION OF THE STATEMENT OF REVENUES, EXPENDITURES,AND CHANGES IN FUND BALANCES OF GOVERNMENTAL FUNDSTO THE STATEMENT OF ACTIVITIESYEAR ENDED JUNE 30, 2016
Net change in fund balances - total governmental funds 24,946,676$
Amounts reported for governmental activities in the statement of activities aredifferent because:
Governmental funds report capital outlays as expenditures. However, in the statement of activities, the costs of those assets is allocated over their estimated useful lives as depreciation expense. This is the amount by which capital outlays exceeded depreciation and disposals in the current period.
Capital outlay 6,494,347$ Depreciation (3,304,121) 3,190,226
Repayment of bond principal is an expenditure in the governmental funds, but the repayment reduces long-term liabilities in the statement of net position.
Principal repayments 1,045,000 2016 Lease Revenue Bond debt issuance (13,600,000) 2016 Lease Revenue Bond premium (938,901) Amortization of bond premiums/discounts (16,010) Amortization of deferred charge (464) (13,510,375)
Accrued interest for long-term liabilities. This is the net change in accrued interest for the current period. (51,713)
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. (75,696)
Governmental funds report all contributions in relation to the annual required contribution (ARC) for OPEB as expenditures, however in the statement of activities only the ARC is an expense. (1,952,945)
Pension obligation 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. 1,541,390
Revenues reported as unavailable revenue in the governmental funds and recognized in the statement of activities. These are included in the intergovernmental revenues in the governmental fund activity. (4,781,226)
Internal service funds are used by management to charge the costs of certain activities, such as equipment management and self-insurance, to individual funds. The net revenues (expenses) of the internal service funds is reported with governmental activities. 2,888,184
Change in net position of governmental activities 12,194,521$
See Notes to Financial Statements26
MAJOR PROPRIETARY FUNDS The following funds have been classified as major proprietary funds in the accompanying financial statements. Water Fund – To account for the costs associated with maintaining and operating
the City’s water system, which includes water production and treatment, delivery and distribution of potable water, State-mandated water quality testing, inspection services, utility billing and collection for water services, and water pipeline and water facility improvements.
Sewer Fund - To account for the costs associated with maintaining and operating the
citywide sewer system, which includes sewer cleaning, preventative maintenance, emergency standby service, and sewer pipeline improvements.
27
CITY OF MONROVIA
STATEMENT OF NET POSITIONPROPRIETARY FUNDS JUNE 30, 2016
GovernmentalOther Activities-
Assets and Deferred Outflows of Resources: Enterprise InternalFunds Totals Service Funds
Assets:Current:
Cash and investments 14,726,152$ 5,082,472$ 3,608,485$ 23,417,109$ 5,748,586$ Receivables:
Accounts 967,567 188,564 246,581 1,402,712 78,924 Prepaid costs 93,117 37,463 - 130,580 10,985 Due from other funds 580,353 246,523 173,260 1,000,136 - Inventories - - - - 1,670
Restricted:Cash with fiscal agent 18,838,704 7,203,502 - 26,042,206 -
Total Current Assets 35,205,893 12,758,524 4,028,326 51,992,743 5,840,165 Noncurrent:
Advances to other funds 241,561 95,168 - 336,729 - Capital assets - net of accumulated depreciation 9,833,290 3,630,941 371,282 13,835,513 5,005,476
Total Noncurrent Assets 10,074,851 3,726,109 371,282 14,172,242 5,005,476
Total Assets 45,280,744 16,484,633 4,399,608 66,164,985 10,845,641
Deferred Outflows of Resources:Deferred pension related items 364,507 41,295 50,032 455,834 206,787
Total Deferred Outflows of Resources 364,507 41,295 50,032 455,834 206,787
Total Assets and Deferred Outflows of Resources 45,645,251$ 16,525,928$ 4,449,640$ 66,620,819$ 11,052,428$
Liabilities, Deferred Inflows of Resources, and Net Position:
Liabilities:Current:
Accounts payable 849,300$ 108,451$ 29,972$ 987,723$ 367,408$ Accrued liabilities 10,667 - - 10,667 15,774 Accrued interest 278,746 112,137 - 390,883 - Unearned revenues - - 22,891 22,891 - Deposits payable 93,200 - 129,034 222,234 - Due to other funds - - 1,155,711 1,155,711 - Accrued compensated absences 83,131 4,512 - 87,643 74,911 Accrued claims and judgments - - - - 1,158,891 Bonds, notes, and capital leases 285,000 115,000 - 400,000 135,308
Total Current Liabilities 1,600,044 340,100 1,337,608 3,277,752 1,752,292
Noncurrent:Advances from other funds - - 46,448 46,448 46,448 Accrued compensated absences 32,329 1,755 - 34,084 29,132 Accrued claims and judgments - - - - 815,986 Bonds, notes, and capital leases 27,907,229 11,227,572 - 39,134,801 271,322 Net pension liability 5,381,874 643,462 981,553 7,006,889 2,963,381
Total Noncurrent Liabilities 33,321,432 11,872,789 1,028,001 46,222,222 4,126,269
Total Liabilities 34,921,476 12,212,889 2,365,609 49,499,974 5,878,561
Deferred Inflows of Resources:Deferred pension related items 423,029 53,935 90,977 567,941 234,731
Total Deferred Inflows of Resources 423,029 53,935 90,977 567,941 234,731
Net Position:Net investment in capital assets 8,933,087 3,196,575 371,282 12,500,944 4,598,846 Unrestricted 1,367,659 1,062,529 1,621,772 4,051,960 340,290
Total Net Position 10,300,746 4,259,104 1,993,054 16,552,904 4,939,136
Total Liabilities, Deferred Inflows of Resources, and Net Position 45,645,251$ 16,525,928$ 4,449,640$ 66,620,819$ 11,052,428$
Reconciliation of Net Position to the Statement of Net Position
Net Position per Statement of Net Position - Proprietary Funds 16,552,904$
Prior years' accumulated adjustment to reflect the consolidation of internal service funds activities related to the enterprise funds (443,190)
Current years' adjustments to reflect the consolidation of internal service activities related to enterprise funds 359,560 Net Position per Statement of Net Position 16,469,274$
Business-Type Activities - Enterprise Funds
Water Sewer
See Notes to Financial Statements28
CITY OF MONROVIA
STATEMENT OF REVENUES, EXPENSESAND CHANGES IN FUND NET POSITIONPROPRIETARY FUNDS YEAR ENDED JUNE 30, 2016
GovernmentalOther Activities-
Enterprise InternalFunds Totals Service Funds
Operating Revenues:Sales and service charges 6,332,222$ 1,162,961$ 1,915,379$ 9,410,562$ 482,679$ Interdepartmental charges - - - - 7,910,012 Miscellaneous 24,420 - 11,345 35,765 183,689
Total Operating Revenues 6,356,642 1,162,961 1,926,724 9,446,327 8,576,380
Operating Expenses:Salaries and employee benefits 1,693,426 202,725 207,271 2,103,422 899,787 Professional and contract services 1,592,923 26,394 275,356 1,894,673 423,760 Maintenance and supplies 990,181 248,494 185,945 1,424,620 1,810,535 Utilities 1,424,204 - - 1,424,204 644,663 Repairs and replacements 140,189 25,721 2,245 168,155 390,265 Claims expense - - - - 175,344 Depreciation expense 235,726 112,112 18,155 365,993 612,994 Other operating expense - - - - 10,547 Claims expense/(recovery) - - - - 12,888
Total Operating Expenses 6,076,649 615,446 688,972 7,381,067 4,980,783
Operating Income (Loss) 279,993 547,515 1,237,752 2,065,260 3,595,597
Nonoperating Revenues (Expenses):Intergovernmental - - 22,048 22,048 - Interest revenue 70,532 17,863 29,711 118,106 46,796 Interest expense (542,143) (218,126) (200) (760,469) (45,458)
Total Nonoperating Revenues (Expenses) (471,611) (200,263) 51,559 (620,315) 1,338
Income (Loss) Before Transfers (191,618) 347,252 1,289,311 1,444,945 3,596,935
Transfers in - - 30,000 30,000 206,818 Transfers out (1,322,910) (233,395) (1,339,112) (2,895,417) (556,009)
Changes in Net Position (1,514,528) 113,857 (19,801) (1,420,472) 3,247,744
Net Position:Beginning of Year 11,815,274 4,145,247 2,012,855 17,973,376 1,691,392
End of Fiscal Year 10,300,746$ 4,259,104$ 1,993,054$ 16,552,904$ 4,939,136$
Reconciliation of Changes in Net Position to the Statement of Activities:
Changes in Net Position, per the Statement of Revenues,Expenses and Changes in Fund Net Position - Proprietary Funds (1,420,472)$
Adjustment to reflect the consolidation of current fiscal yearinternal service funds activities related to enterprise funds 359,560
Changes in Net Position of Business-Type Activities per Statement of Activities (1,060,912)$
Business-Type Activities - Enterprise Funds
Water Sewer
See Notes to Financial Statements29
CITY OF MONROVIA
STATEMENT OF CASH FLOWSPROPRIETARY FUNDS YEAR ENDED JUNE 30, 2016
GovernmentalOther Activities-
Enterprise InternalFunds Totals Service Funds
Cash Flows from Operating Activities:Cash received from customers and users 6,158,420$ 1,077,208$ 1,976,993$ 9,212,621$ -$ Cash received from/(paid to) interfund service provided - - - - 8,585,588 Cash paid to suppliers for goods and services (3,080,641) (257,290) (674,530) (4,012,461) (2,603,685) Cash paid to employees for services (3,323,675) (226,845) (305,528) (3,856,048) (1,736,522) Cash received from (payments to) others - - - - (4,006,710)
Net Cash Provided by Operating Activities (245,896) 593,073 996,935 1,344,112 238,671
Cash Flows from Non-CapitalFinancing Activities:
Cash transfers out (1,322,910) (233,395) (1,339,112) (2,895,417) (556,009) Cash transfers in - - 30,000 30,000 206,818 Cash given for interfund receivables - - (25,198) (25,198) - Repayment received from/(paid to) other funds (295,843) (46,743) 388,974 46,388 - Cash paid for advances to other funds - - (23,222) (23,222) (23,222) Repayments received for advance to other funds 120,779 47,583 - 168,362 - Intergovernmental - - 22,048 22,048 -
Net Cash Provided by (Used in) Non-Capital Financing Activities (1,497,974) (232,555) (946,510) (2,677,039) (372,413)
Cash Flows from Capital and Related Financing Activities:
Proceeds from capital debt - - - - 70,990 Bond issuance proceeds 26,220,000 10,550,000 - 36,770,000 - Bond premium 1,994,381 801,485 - 2,795,866 - Amortization of bond premium (22,152) (8,913) - (31,065) - Acquisition and construction of capital assets (656,685) (402,828) - (1,059,513) (1,828,262) Principal paid on capital debt - - - - (137,688) Interest paid on capital debt (263,397) (105,989) (200) (369,586) (45,458) Proceeds from sales of capital assets - - - - 13,001
Net Cash Used in Capital and Related Financing Activities 27,272,147 10,833,755 (200) 38,105,702 (1,927,417)
Cash Flows from Investing Activities:Interest received 70,532 17,863 29,711 118,106 46,796
Net Cash Provided byNet Cash Provided by Investing Activities 70,532 17,863 29,711 118,106 46,796
Net Increase (Decrease) in Cash and Cash Equivalents 25,598,809 11,212,136 79,936 36,890,881 (2,014,363)
Cash and Cash Equivalents at Beginning of Year 7,966,047 1,073,838 3,528,549 12,568,434 7,762,949
Cash and Cash Equivalents at End of Year 33,564,856$ 12,285,974$ 3,608,485$ 49,459,315$ 5,748,586$
Reconciliation of Operating Income to Net CashProvided by (Used in) Operating Activities:Operating income 279,993$ 547,515$ 1,237,752$ 2,065,260$ 3,595,597$ Adjustments to reconcile operating income net cash provided by (used in) operating activities:
Depreciation 235,726 112,112 18,155 365,993 612,994 (Increase) decrease in accounts receivable (266,522) (85,753) 46,312 (305,963) 9,208 (Increase) decrease in inventories - - - - (126) (Increase) decrease in prepaid expense (91,207) (37,463) - (128,670) 6,688 (Increase) decrease in deferred pension related outflows 3,459 12,366 11,852 27,677 17,828 Increase (decrease) in accounts payable (266,141) 80,782 (210,984) (396,343) 14,313 Increase (decrease) in unearned revenue - - 3,739 3,739 - Increase (decrease) in deposits payable 68,300 - 218 68,518 - Increase (decrease) in claims and judgments - - - - (3,818,478) Increase (decrease) in compensated absences (13,225) (1,067) (15,760) (30,052) (31,191) Increase (decrease) in accrued liabilities 10,667 - - 10,667 15,774 Increase (decrease) in net pension liability 68,394 (4,226) (49,774) 14,394 (25,790) Increase (decrease) in deferred pension related inflows (275,340) (31,193) (44,575) (351,108) (158,146)
Total Adjustments (525,889) 45,558 (240,817) (721,148) (3,356,926)
Net Cash Provided by Operating Activities (245,896)$ 593,073$ 996,935$ 1,344,112$ 238,671$
Non-Cash Activity in Investing and Financing Activities:Amortization of premiums/(discounts) 22,151$ 8,914$ -$ -$ -$
Business-Type Activities - Enterprise Funds
Water Sewer
See Notes to Financial Statements30
CITY OF MONROVIA
STATEMENT OF FIDUCIARY NET POSITIONFIDUCIARY FUNDSJUNE 30, 2016
AgencyFunds
Assets:Pooled cash and investments 1,577,978$ 7,644,873$ Receivables:
Accounts 21,039 29,787 Notes and loans - 2,106,030
Prepaid costs - 328,431 Land held for resale - 5,674,434 Restricted assets:
Cash and investments with fiscal agents - 3,252,651 Capital assets:
Capital assets, not being depreciated - 400,638 Capital assets, net of accumulated depreciation - 1,677,471
Total Assets 1,599,017$ 21,114,315
Deferred Outflows of Resources:Deferred charge on refunding 1,260,798
Total Deferred Outflows of Resources 1,260,798
Liabilities:Accounts payable 30,659$ 4,114 Accrued interest - 665,645 Deposits payable 1,568,358 - Advances from City - 2,551,385 Long-term liabilities:
Due in one year - 3,855,000 Due in more than one year - 59,163,786
Total Liabilities 1,599,017$ 66,239,930
Net Position:Held in trust for educational material 172,884 Held in trust for other purposes (44,037,701)
Total Net Position (43,864,817)$
Private-Purpose Trust
Funds
See Notes to Financial Statements31
CITY OF MONROVIA
STATEMENT OF CHANGES IN FIDUCIARY NET POSITIONFIDUCIARY FUNDSYEAR ENDED JUNE 30, 2016
Additions:Taxes 4,217,748$ Interest, rental income and change in fair value of investments 418,444
Total Additions 4,636,192
Deductions:Administrative expenses 330,587 Contractual services 35,818 Interest expense 3,157,793 Depreciation expense 47,071 Loss on sale of property 1,667,976
Total Deductions 5,239,245
Changes in Net Position (603,053)
Net Position:Net Position - Beginning of the Year (43,261,764)
Net Position - End of the Year (43,864,817)$
Private-Purpose Trust Funds
See Notes to Financial Statements32
CITY OF MONROVIA NOTES TO FINANCIAL STATEMENTS JUNE 30, 2016
I. SIGNIFICANT ACCOUNTING POLICIES
Note 1: Summary of Significant Accounting Policies
a. Financial Reporting Entity
The financial reporting entity "City of Monrovia" includes the accounts of the City, the
Monrovia Financing Authority (the Authority), and the Monrovia Housing Authority
(Housing Authority).
The City of Monrovia was incorporated December 15, 1887, under the general laws of
the State of California and follows the City Council - Manager form of government. As
required by accounting principles generally accepted in the United States of America,
these financial statements present the government and its component units, entities for
which the government is considered to be financially accountable. Blended component
units, although legally separate entities are, in substance, part of the government's
operations and so data from these units are combined with data of the primary
government. Each blended component unit has a June 30 year-end.
Blended Component Units
The Authority was established by resolution on February 6, 1996, under a
Joint Exercise of Powers Agreement (the Agreement) by the City of Monrovia and the
former Monrovia Redevelopment Agency. The governing body of the Authority is
comprised of the consenting members of the City Council. The agreement provides
for the financing of public capital improvements for the City and the Agency through
the acquisition by the Authority of such public capital improvements and/or the
purchase of obligations of the City and the Agency pursuant to debt purchase
agreements.
The Housing Authority was established on October 5, 2004, pursuant to the
California Housing Authority Law codified under State of California Health and
Safety Code, Section 34200 et seq. The Housing Authority retained the housing
assets and functions previously performed by the former Redevelopment Agency.
City Council serves as the governing Board for the Housing Authority. Further, City
management has the same operational responsibility for the Housing Authority as it
does for the rest of the City. The Housing Authority was formed for purposes of
construction and management of quality affordable housing within the City. Separate
financial statements are not prepared.
Discretely Presented Component Units
Monrovia Wilderness Preserve Foundation, Inc. - The Monrovia Wilderness Preserve
Foundation, Inc. (the Foundation), a nonprofit public benefit corporation, was created
on November 20, 2000, to acquire property in the foothills to be used as a wilderness
preserve for the protection of existing natural resources and to provide outdoor
educational activities to nearby schools. The Foundation has a separate governing
board, which is comprised of City Council members, employees, citizens and
members from two local conservancy agencies. During fiscal year 2015-2016, there
was no material financial activity for the Foundation; therefore, financial data has not
been presented in the City's financial statements.
33
CITY OF MONROVIA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2016
Note 1: Summary of Significant Accounting Policies (Continued)
b. Government-Wide and Fund Financial Statements
The government-wide financial statements (i.e., the statement of net position and the
statement of activities) report information on all of the nonfiduciary activities of the
primary government and its component units. All fiduciary activities are reported only in
the fund financial statements. For the most part, the effect of interfund activity has been
removed from these statements. Governmental activities which normally are supported
by taxes and intergovernmental revenues are reported separately from business-type
activities, which rely to a significant extent on fees and charges for support.
The statement of activities demonstrates the degree to which the direct expenses of a
given function or segments are offset by program revenues. Direct expenses are those
that are clearly identifiable with a specific function or segment. Program revenues
include: 1) charges to customers or applicants who purchase, use, or directly benefit from
goods, services or privileges provided by a given function or segment, and 2) grants and
contributions that are restricted to meeting the operational or capital requirements of a
particular function or segment. Taxes and other items not properly included among
program revenues are reported instead as general revenues.
While separate government-wide and fund financial statements are presented, they are
interrelated. The governmental activities column incorporates data from the governmental
funds and internal service funds, while business-type activities incorporate data from the
government’s enterprise funds. Separate financial statements are provided for
governmental funds, even though the latter are excluded from the government-wide
financial statements.
c. Measurement Focus, Basis of Accounting and Financial Statement Presentation
The government-wide financial statements are reported using the economic resources
measurement focus and the accrual basis of accounting, as are the proprietary fund
financial statements. Revenues are recorded when earned and expenses are recorded
when a liability is incurred, regardless of the timing of related cash flows. Property taxes
are recognized as revenues in the year for which they are levied. Grants and similar
items are recognized as revenue as soon as all eligibility requirements imposed by the
provider have been met.
The fund financial statements provide information about the government’s funds,
including its fiduciary funds and blended component units. Separate statements for each
fund category – governmental, proprietary, and fiduciary – are presented. The emphasis
of fund financial statements is on major governmental and enterprise funds, each
displayed in a separate column. All remaining governmental and enterprise funds are
aggregated and reported as non-major funds. Major individual governmental and
enterprise funds are reported as separate columns in the fund financial statements.
Governmental fund financial statements are reported using the current financial
resources measurement focus and the modified accrual basis of accounting. Revenues
are recognized as soon as they are both measurable and available. Revenues are
considered available when they are collectible within the current period or soon enough
thereafter to pay liabilities of the current period. For this purpose, the government
considers revenues available if they are collected within 60 days of the end of the current
fiscal period. Expenditures generally are recorded when a liability is incurred, as under
accrual accounting.
34
CITY OF MONROVIA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2016
Note 1: Summary of Significant Accounting Policies (Continued)
However, debt service expenditures, as well as expenditures related to compensated
absences and claims and judgments, are recorded only when payment is due.
Property taxes, franchise taxes, licenses and interest associated with the current fiscal
period are all considered to be susceptible to accrual and so have been recognized as
revenues of the current fiscal period. Only the portion of special assessments receivable
due within the current fiscal period is considered susceptible to accrual as revenue of the
current period. All other revenue items are considered measurable and available only
when cash is received by the government.
The City reports the following major governmental funds:
x The General Fund is the City's primary operating fund. It accounts for all financial
resources of the general government, except those required to be accounted for in
another fund.
x The Gang Violence and Drug Abuse Grants Fund accounts for grant funds received
from the U.S. Department of Justice, the California Emergency Management Agency,
and the Board of State and Community Corrections. All expenditures are restricted
to target area projects and programs.
x The Monrovia Housing Authority accounts for transactions related to affordable
housing activities. Revenues include bond proceeds held by the Monrovia Successor
Agency that will be transferred for use into this fund for affordable housing activities.
x The Proposition C and Measure R Projects Fund accounts for Proposition C and
Measure R project expenditures for the Monrovia Renewal Improvement Program,
which have been financed through a bond measure. This program will provide for
citywide street infrastructure repairs and improvements
x The Capital Improvement Fund accounts for the costs associated with major capital
improvement projects not financed under other funds. The many different projects
undertaken by this fund are under the control of the Public Works Department.
Financing for the projects includes state grants, investment earnings, and new
construction taxes.
The City reports the following major proprietary funds:
x The Water Fund accounts for the administration, operation, maintenance,
improvement and contract costs associated with the water utility.
x The Sewer Fund accounts for the citywide sewer maintenance services provided to
all segments of the community. The City maintains 91 miles of sewer lines.
35
CITY OF MONROVIA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2016
Note 1: Summary of Significant Accounting Policies (Continued)
Additionally, the City reports the following fund types:
x The Debt Service Funds are used to account for the accumulation of funds for the
payment of principal and interest of various bond issues and loans.
x The Permanent Fund is used to account for resources that are legally restricted to
the extent that only earnings, and not principal, may be used for purposes that
support the City’s programs.
x Internal Service Funds are used to account for goods and services provided by one
City department to other City departments on a cost-reimbursement basis. The
services provided to the departments are facility maintenance including capital
replacements, equipment pool maintenance including routine maintenance and
replacement of the City’s motorized fleet, central services including information
services, maintenance and replacement of copy machines and specialized
equipment, and the operation of the City-wide general and automotive, workers’
compensation and unemployment insurance programs.
x The Agency Fund is used to account for assets held by the City in a trustee capacity
or as an agent for individuals, private organizations and other governmental units.
The purpose of the assets held by the City are for various organizations such as the
Wilderness Preservation Foundation and the City of Monrovia Employees We Care
Foundation, as well as several other miscellaneous activities.
x The Private Purpose Trust Fund is used to account for the Bartle Memorial Trust,
which is a contribution where the principal and interest earnings are used to acquire
books or other educational materials appropriate to the library. The Private Purpose
Trust Fund also accounts for the assets and liabilities of the former redevelopment
agency and is allocated revenue to pay estimated installment payments of
enforceable obligations until obligations of the former redevelopment agency are paid
in full and assets have been liquidated.
The proprietary and private-purpose trust funds are reported using the economic
resources measurement focus and the accrual basis of accounting. The agency fund has
no measurement focus, but utilizes the accrual basis of accounting for reporting its assets
and liabilities.
Generally, the effect of interfund activity has been eliminated from the government-wide
financial statements. Exceptions to this general rule are charges between the
government's proprietary funds function and various other functions of the government.
Elimination of these charges would distort the direct costs and program revenues
reported for the various functions concerned.
Amounts reported as program revenues include: 1) charges to customers or applicants
for goods, services or privileges provided, 2) operating grants and contributions, and
3) capital grants and contributions, including special assessments. Internally dedicated
resources are reported as general revenues rather than as program revenues. Likewise,
general revenues include all taxes.
Proprietary funds distinguish operating revenues and expenses from nonoperating items.
Operating revenues and expenses generally result from providing services and producing
and delivering goods in connection with a proprietary fund's principal ongoing operations.
36
CITY OF MONROVIA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2016
Note 1: Summary of Significant Accounting Policies (Continued)
The principal operating revenues of the Enterprise Funds and of the Internal Service
Funds are charges to customers for sales and services. Operating expenses for
Enterprise Funds and Internal Service Funds include the cost of sales and services,
administrative expenses and depreciation on capital assets. All revenues and expenses
not meeting this definition are reported as nonoperating revenues and expenses.
When both restricted and unrestricted resources are available for use, it is the
government's policy to use restricted resources first, then unrestricted resources as they
are needed.
d. Assets, Deferred Outflows of Resources, Liabilities, Deferred Inflows of Resources, and Net Position or Equity
Cash and Investments
The City's cash and cash equivalents are considered to be cash on hand, demand
deposits and short-term investments with original maturities of three months or less
from the date of acquisition. For financial statement presentation purposes, cash and
cash equivalents are shown as both unrestricted and restricted cash and
investments.
Investments for the City, as well as for its component units, are reported at fair value,
the value at which a financial instrument could be exchanged in a current transaction
between willing parties, other than a forced liquidation sale. The City's policy is
generally to hold investments until maturity or until market values equal or exceed
cost. The State Treasurer's Investment Pool operates in accordance with appropriate
state laws and regulations. The reported value of the pool is the same as the fair
value of the pool shares.
Receivables and Payables
Activity between funds that are representative of lending/borrowing arrangements
outstanding at the end of the fiscal year are referred to as either "due to/from other
funds" (i.e., the current portion of interfund loans) or "advances to/from other funds"
(i.e., the non-current portion of interfund loans). Any residual balances outstanding
between the governmental activities and business-type activities are reported in the
government-wide financial statements as "internal balances."
Advances between funds, as reported in the fund financial statements, are offset by a
fund balance reserve account in applicable governmental funds to indicate that they
are not available for appropriation and are not expendable available financial
resources.
All trade and property tax receivables are shown net of an allowance for
uncollectibles.
Inventories and Land Held for Resale
All inventories are valued at cost using the first-in/first-out (FIFO) method. The City
accounts for inventory using the consumption method and is equally offset by a
reservation of fund balance in the fund-level statements, which indicates that it does
not constitute "available spendable resources." Inventory is capitalized when
37
CITY OF MONROVIA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2016
Note 1: Summary of Significant Accounting Policies (Continued)
purchased and is thereafter recorded as an expenditure at the time the inventory item
is consumed.
Land purchased for resale is capitalized as inventory at acquisition costs or net
realizable value, if lower. Land held for resale is classified as nonspendable fund
balance, which indicates that it does not constitute "available spendable resources."
Other property held for resale is capitalized as inventory and is recorded at cost.
Capital Assets
Capital assets, which include property, plant, equipment and infrastructure assets
(e.g., roads, bridges, sidewalks and similar items), are reported in the applicable
governmental or business-type activities columns in the government-wide financial
statements. Capital assets are defined by the City as assets with an initial, individual
cost of more than $5,000. Such assets are recorded at historical cost or estimated
historical cost if purchased or constructed. Donated capital assets are recorded at
estimated fair market value at the date of donation.
In accordance with GASB Statement No. 34, the City has reported general
infrastructure assets acquired in the current and prior years.
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.
Major outlays for capital assets and improvements are capitalized as projects are
constructed. Interest incurred during the construction phase of capital assets of
business-type activities is included as part of the capitalized value of the assets
constructed.
Property, plant and equipment of the governmental activities and business-type
activities for the primary government, as well as the component units, are
depreciated using the straight-line method over the following estimated useful lives:
Assets Years
Structures and Improvements 50
Equipment, Furniture, & Vehicles:
Furniture & Fixtures 5
Machinery & Equipment 5-10
Autos & Trucks 5-20
Infrastructures:
Reservoirs & Wells 50
Water & Sewer Mains 50-75
Meters 35
Hydrants 75
Pumping Equipment 50
Transmission & Distribution 50
Other infrastructures 15-50
38
CITY OF MONROVIA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2016
Note 1: Summary of Significant Accounting Policies (Continued)
Deferred Outflows/Inflows of Resources
In addition to assets, the statement of financial position will sometimes report a
separate section for deferred outflows of resources. This separate financial statement
element, deferred outflows of resources, represents a consumption of net position that
applies to a future period(s) and so will not be recognized as an outflow of resources
(expense/ expenditure) until then. The City has two items that qualify for reporting in
this category. It is the deferred charge on refunding reported in the fiduciary statement
of net position. A deferred charge on refunding results from the difference in the
carrying value of refunded debt and its reacquisition price. This amount is deferred
and amortized over the shorter of the life of the refunded or refunding debt. The
second are deferred outflows relating to the net pension obligation reported in the
statement of net position. These outflows are the results of contributions made after
the measurement period, which are expensed in the following year, adjustments due
to differences in proportions, adjustments due to difference in proportions and the
difference between actual contributions made and the proportionate share of the risk
pool’s total contributions, and differences between expected and actual experiences.
These amounts are deferred and amortized over the expected average remaining
service lifetime.
In addition to liabilities, the statement of financial position will sometimes report a
separate section for deferred inflows of resources. This separate financial statement
element, deferred inflows of resources, represents an acquisition of net position that
applies to a future period(s) and so will not be recognized as an inflow of resources
(revenue) until that time. The City has two types of reported in this category. The
first item is in relation to the net pension obligation reported in the statement of
net position. These inflows are the results of net differences between projected and
actual earnings on pension plan investments, adjustments due to differences in
proportions, changes in assumptions, and net difference between proportion actuarial
and actual contributions. Inflows from changes in net pension liability arise only under
a full accrual basis of accounting, and are reported in the government-wide Statement
of Net Position and proprietary funds. The second item arises only under a modified
accrual basis of accounting. Accordingly, the item, unavailable revenue, is reported
only in the governmental funds balance sheet. The governmental funds report
unavailable revenues from two sources: sales taxes and grant revenues. These
amounts are deferred and recognized as an inflow of resources in the period that the
amounts become available.
Compensated Absences
Compensated absences are accounted for in accordance with Govt. Code Sec. C60.
It is the government's policy to permit employees to accumulate earned but unused
vacation, holiday and compensatory pay benefits. There is no liability for unpaid
accumulated sick leave, with the exception of certain management and fire positions,
since the City does not have a policy to pay any amounts when employees separate
from service with the government. All vacation pay is accrued when incurred in the
government-wide and proprietary fund financial statements.
39
CITY OF MONROVIA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2016
Note 1: Summary of Significant Accounting Policies (Continued)
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. Claims payable, which include
an estimate for incurred but not reported claims (IBNR), are recorded in Internal
Service Funds.
Unearned Revenue
Unearned revenues are those where asset recognition has been met, but for which
the revenue recognition criteria has not. The City reported as unearned revenues the
amount of $185,989 in the governmental funds related to the General and
Gang Violence and Drug Abuse Grant Funds; there is $139,600 reported in the
Capital Improvement Fund for which services have not been rendered; there is also
$22,891 reported in the Waste Management Proprietary Fund for which services
have not yet been rendered.
Long-Term Obligations
In the government-wide financial statements, and proprietary fund types in the fund
financial statements, long-term debt and other long-term obligations are reported as
liabilities in the applicable governmental activities, business-type activities, or
proprietary fund type Statement of Net Position. Bond premiums and discounts, are
deferred and amortized over the life of the bonds using the effective interest method.
Bonds payable are reported net of the applicable bond premium or discount. Bond
issuance costs are no longer reported as deferred charges and amortized over the
term of the related debt. Debt issuance costs should be recognized in the period
incurred. This was a change in accounting principle due to implementing
GASB Statement No. 65.
In the fund financial statements, governmental fund types recognize bond premiums
and discounts during the current period. The face amount of debt issued is reported
as other financing sources. Bond issuance costs are expensed in the year incurred.
Premiums received on debt issuances are reported as other financing sources while
discounts on debt issuances are reported as other financing uses. Issuance costs,
whether or not withheld from the actual debt proceeds received, are reported as
expenditures.
Net Pension Liability
For purposes of measuring the net pension liability, deferred outflows of resources
and deferred inflows of resources related to pensions, and pension expense,
information about the fiduciary net position of the Plan and additions to/deductions
from the Plan’s fiduciary net position has been determined on the same basis as they
are reported by the CalPERS Financial Office. For this purpose, benefit payments
(including refunds of employee contributions) are recognized when currently due and
payable in accordance with the benefit terms. Investments are reported at fair value.
CalPERS audited financial statements are publicly available reports that can be
obtained at CalPERS’ website under Forms and Publications.
40
CITY OF MONROVIA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2016
Note 1: Summary of Significant Accounting Policies (Continued)
GASB 68 requires that the reported results must pertain to liability and asset
information within certain defined timeframes. For this report, the following
timeframes are used.
Valuation Date (VD) June 30, 2014
Measurement Date (MD) June 30, 2015
Measurement Period (MP) July 1, 2014 to June 30, 2015
Statement of Cash Flows
Substantial portions of the City’s investments are in short-term instruments with
maturities of one to three years. In addition, there are liquid funds on deposit with
California Local Agency Investment Fund. For purposes of the statements of cash
flows, all cash and investments held by the enterprise and internal service funds are
considered short-term and, accordingly, are considered cash and cash equivalents.
Net Position Flow Assumption
Sometimes the government will fund outlays for a particular purpose from both
restricted (e.g., restricted bond or grant proceeds) and unrestricted resources. In
order to calculate the amounts to report as restricted – net position and unrestricted –
net position in the government-wide and proprietary fund financial statements, a flow
assumption must be made about the order in which the resources are considered to
be applied. It is the government’s policy to consider restricted – net position to have
been depleted before unrestricted – net position is applied.
Fund Balance Flow Assumptions
Sometimes the government will fund outlays for a particular purpose from both
restricted and unrestricted resources (the total of committed, assigned, and
unassigned fund balance). In order to calculate the amounts to report as restricted,
committed, assigned, and unassigned fund balance in the governmental fund financial
statements a flow assumption must be made about the order in which the resources
are considered to be applied. It is the government’s policy to consider restricted fund
balance to have been depleted before using any of the components of unrestricted
fund balance. Further, when the components of unrestricted fund balance can be
used for the same purpose, committed fund balance is depleted first, followed by
assigned fund balance. Unassigned fund balance is applied last.
Fund Equity
In the fund financial statements, government funds report the following fund balance
classification:
Nonspendable include amounts that cannot be spent because they are either (a) not
in spendable form or (b) legally or contractually required to be maintained intact.
Restricted include amounts that are constrained on the use of resources by either
(a) external creditors, grantors, contributors, or laws of regulations of other
governments or (b) by law through constitutional provisions or enabling legislation.
41
CITY OF MONROVIA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2016
Note 1: Summary of Significant Accounting Policies (Continued)
Committed include amounts that can only be used for specific purposes pursuant to
constraints imposed by formal action of the government’s highest authority, the
City Council. The formal action that is required to be taken to establish, modify, or
rescind a fund balance commitment is a resolution. The City did not have any
committed fund balance as of June 30, 2016.
Assigned include amounts that are constrained by the government’s intent to be used
for specific purposes, but are neither restricted nor committed. The City Manager is
authorized to assign amounts to a specific purpose, which was established by the
governing body in Resolution No. 2011-32 approved on June 21, 2011. As of
June 30, 2016, $1,381,407 has been assigned in the General Fund for special
programs.
Unassigned include the residual amounts that have not been restricted, committed,
or assigned to specific purposes. The General Fund is the only fund that reports a
positive unassigned fund balance amount. In governmental funds, other than the
general fund, if expenditures incurred for specific purposes exceed the amounts that
are restricted, committed, or assigned to those purposes, the City reports a negative
unassigned fund balance in that fund.
An individual governmental fund could include nonspendable resources and amounts
that are restricted or unrestricted (committed, assigned, or unassigned) or any
combination of those classifications. Restricted amounts are to be considered spent
when an expenditure is incurred for purposes for which both restricted and
unrestricted fund balance is available and committed, assigned, then unassigned
amounts are considered to have been spent when an expenditure is incurred for
purposes for which amounts in any of those unrestricted fund balance classifications
can be used.
Effect of New Accounting Standards
During the fiscal year ended June 30, 2015, the City implemented the following
Governmental Accounting Standards Board (GASB) standards:
GASB Statement No. 72 - Fair Value Measurement and Application, during the year
ended June 30, 2016. The changes resulting from this implementation are reflected
in Note 3.
42
CITY OF MONROVIA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2016
II. STEWARDSHIP
Note 2: Deficit Fund Balances
The following funds contained deficit fund balances:
Amount
Gang Violence and Drug Abuse Grants Major Special Revenue Fund 464,220$
Nonmajor Special Revenue Funds:
Community Development Block Grant 5,647
Asset Forfeiture 4,091
Police Grants 26,989
Fire Grants 10,802
Capital Projects Funds:
Hillside Acquisition 289 q
Internal Service Funds:
Central Services 592,620
Workers' Compensation Insurance 861,207
Fund
The City expects to eliminate these deficits from future revenues.
III. DETAILED NOTES ON ALL FUNDS
Note 3: Cash and Investments
As of June 30, 2016, cash and investments were reported in the accompanying financial
statements as follows:
Governmental activities 35,440,965$
Business-type activities 49,459,315
Fiduciary funds 12,475,502
Total cash and investments 97,375,782$
Deposits with financial institutions (882,700)$
Petty Cash 8,452
Investments 58,331,458
Investments held with fiscal agents 39,918,572
Total cash and investments 97,375,782$
The City follows the practice of pooling cash and investments of all funds, except for funds
required to be held by fiscal agents under provisions of bond indentures. Interest income
earned on pooled cash and investments is allocated monthly to the various funds based on
monthly cash and investment balances. Interest Income from cash and investments with
fiscal agents is credited directly to the related fund.
43
CITY OF MONROVIA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2016
Note 3: Cash and Investments (Continued)
Deposits
At June 30, 2016, the carrying amount of the City’s deposits was -$882,700 and the
bank balance was $628,591. The $1,511,291 difference represents outstanding checks
and other reconciling items.
The California Government Code requires California banks and savings and loan
associations to secure a City’s deposits by pledging government securities with a value
of 110% of a City’s deposits. California law also allows financial institutions to secure
City deposits by pledging first trust deed mortgage notes having a value of 150% of a
City’s total deposits. The City Treasurer may waive the collateral requirement for
deposits which are fully insured up to $250,000 by the FDIC. The collateral for deposits
in federal and state chartered banks is held in safekeeping by an authorized Agent of
Depository recognized by the State of California Department of Banking. The collateral
for deposits with savings and loan associations is generally held in safekeeping by the
Federal Home Loan Bank in San Francisco, California as an Agent of Depository.
These securities are physically held in an undivided pool for all California public agency
depositors. Under Government Code Section 53655, the placement of securities by a
bank or savings and loan association with an “Agent of Depository” has the effect of
perfecting the security interest in the name of the local government agency.
Accordingly, all collateral held by California Agents of Depository are considered to be
held for, and in the name of, the local governmental agency.
Investments
Under provisions of the City’s investment policy, and in accordance with the California
Government Code, the following investments are authorized:
x U.S. Treasury Bills
x Federal Agency Securities
x Federal Instrumentality
x Repurchase Agreements
x Prime Commercial Paper
x Eligible Bankers Acceptances
x Medium-Term Corporate Notes
x Negotiable and Non-negotiable Certificates of Deposit
x State of California’s Local Agency Investment Fund (LAIF)
x Los Angeles County Pooled Investment Fund
x Money Market Funds
Investments Authorized by Debt Agreements
The above investments do not address investment of debt proceeds held by a bond
trustee. Investments of debt proceeds held by a bond trustee are governed by provisions
of the debt agreements, rather than the general provisions of the California Government
Code or the City’s investment policy.
44
CITY OF MONROVIA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2016
Note 3: Cash and Investments (Continued)
Investments in State Investment Pool
The City is a voluntary participant in the Local Agency Investment Fund (LAIF) that is
regulated by California Government Code Section 16429 under the oversight of the
Treasurer of the State of California. LAIF is overseen by the Local Agency Investment
Advisory Board, which consists of five members, in accordance with State statute. The
State Treasurer’s Office audits the fund annually. The fair value of the position in the
investment pool is the same as the value of the pool shares.
GASB Statement No. 31
The City adopted GASB Statement of No. 31, Accounting and Financial Reporting for Certain Investments and for External Investment Pools, as of July 1, 1997.
GASB Statement No. 31 establishes fair value standards for investments in participating
interest earning investment contracts, external investment pools, equity securities, option
contracts, stock warrants and stock rights that have readily determinable fair values.
Accordingly, the City reports its investments at fair value in the balance sheet. All
investment income, including changes in the fair value of investments, is recognized as
revenue in the operating statement.
Credit Risk
The City's investment policy limits investments in Medium-Term Notes to those rated in
the top three rating categories by two of the three largest nationally recognized rating
services at time of purchase. As of June 30, 2016, the City did not have any investments
in Medium-Term Notes. Generally, credit risk is the risk that an issuer of an investment
might not fulfill its obligation to the holder of the investment. This is measured by the
assignment of a rating by a nationally recognized statistical rating organization.
Presented below is the minimum rating required by (where applicable) the California
Government Code, the City's investment policy, and the actual rating by Standard and
Poor’s as of year-end for each investment type.
Legal
Investment Type: Total Rating Aaa Not Rated
Local Agency Investment Fund 39,533,193$ N/A -$ 39,533,193$
Money Market Funds
Federal Home Loan Mortgage Corp. 8,021,660 N/A 8,021,660 -
Federal Home Loan Bank 2,001,150 N/A 2,001,150 -
Federal Farm Credit Banks 2,005,660 N/A 2,005,660 -
Federal National Mortgage Assn 5,007,380 N/A 5,007,380 -
Certificates of Deposit 1,762,415 N/A - 1,762,415
Money Market Mutual Funds 39,918,572 N/A - 39,918,572
98,250,030$ 17,035,850$ 81,214,180$
45
CITY OF MONROVIA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2016
Note 3: Cash and Investments (Continued)
Custodial Credit Risk
The custodial credit risk for deposits is the risk that, in the event of the failure of a
depository financial institution, a government will not be able to recover deposits or will
not be able to recover collateral securities that are in the possession of an outside party.
The custodial credit risk for investments is the risk that, in the event of the failure of the
counterparty to a transaction, a government will not be able to recover the value of
investment or collateral securities that are in the possession of an outside party.
As of June 30, 2016, none of the City’s deposits or investments were exposed to
custodial credit risk.
Concentration of Credit Risk
The City’s investment policy imposes restrictions on the maximum percentage it can
invest in certain investments, as follows:
Prime Commercial Paper 10%
Eligible Bankers Acceptances 10%
Medium-Term Corporate Notes 10%
Negotiable Certificates of Deposit 30%
Non-Negotiable Certificates of Deposit 30%
Money Market Funds 20%
As of June 30, 2016, the City is in compliance with the investment policy restrictions.
The City has invested more than 5% of the total investment value with the following
issuers:
Federal Home Loan Mortgage Corp 8.16%
Federal National Mortgage Assoc. 5.10%
Interest Rate Risk
The City's investment policy limits investment maturities as a means of managing its
exposure to fair value losses arising from increasing interest rates. The City's
investment policy states that the City's investment portfolio will not directly invest in
securities maturing in more than five years. The City has elected to use the segmented
time distribution method of disclosure for its interest rate risk.
46
CITY OF MONROVIA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2016
Note 3: Cash and Investments (Continued)
As of June 30, 2016, the City had the following investments and original maturities:
1 year 1 year Fair
Investment Type: or less to 5 years Value
Local Agency Investment Fund 39,533,193$ -$ 39,533,193$
US Treasury Securities - - -
Federal Home Loan Bank - 2,001,150 2,001,150
Federal Home Loan Mortgage Corp. - 8,021,660 8,021,660
Federal National Mortgage Assoc. - 5,007,380 5,007,380
Federal Farm Credit Bank - 2,005,660 2,005,660
Certificates of Deposit - 1,762,415 1,762,415
Money Market Mutual Funds 39,918,572 - 39,918,572
79,451,765$ 18,798,265$ 98,250,030$
Investment Maturities (in Years)
Fair Value Hierarchy
The City categorizes its fair value measurements within the fair value hierarchy
established by generally accepted accounting principles. The hierarchy is based on the
valuation inputs used to measure the fair value of the asset. Level 1 inputs are quoted
prices in active markets for identical assets; Level 2 inputs are significant other
observable inputs; Level 3 inputs are significant unobservable inputs. The City has the
following recurring fair value measurements as of June 30, 2016:
Totals 1 2
U.S. Treasury Securities 17,035,850$ 17,035,850$ -$
Certificates of Deposit 1,762,415 - 1,762,415
Local Agency Investment Fund (LAIF) 39,533,193 - 39,533,193
Held by Fiscal Agent: - - -
Money Market Mutual Funds 39,918,572 - 39,918,572
Total Investments 98,250,030$ 17,035,850$ 81,214,180$
Level
Investment Type
U.S. Treasury Securities are classified in Level 1 of the fair value hierarchy are valued
using prices quoted in active markets for those securities. Certificates of Deposit, LAIF,
and Money Market Mutual Funds are classified in Level 2 of the fair value hierarchy are
valued using institutional bond quotes or specified fair market value factors.
47
CITY OF MONROVIA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2016
IV. OTHER INFORMATION Note 4: Loans and Deferred Loans Receivable
a. Loans Receivable In October 2002, the former redevelopment agency issued a 30-year Note
Receivable to Monrovia Heritage Park, L.P. for the rehabilitation of low and
moderate income housing. The note bears interest at 3% per annum,
compounded annually. Payments are due annually, beginning April 15, 2002,
and are equal to 50% of all residual receipts after the payment of deferred
developer fee notes. The full amount of the note, together with all accrued and
unpaid interest, is due no later than April 15, 2032. As of June 30, 2016, the
balance was: 180,088$
On July 1, 2008, the former redevelopment agency issued a 45-year Note
Receivable to San Gabriel Valley Habitat for Humanity for the sale of properties
at 1214 & 1218 Sherman Avenue, for the development of 4 low-income housing
units. The note will not accrue interest and will become due and payable if a unit
is subsequently sold to a buyer that does not meet the income restriction level. In
the event that the buyer remains on site for 45 years, the note will be forgiven in
its entirety. The balance of the loan outstanding on June 30, 2016 was: 300,000
On October 1, 1992, the former redevelopment agency issued a 28-year note
receivable to Regency Court for the development of a 115 unit senior apartment
complex. The full amount of the note, together with all accrued interest and
unpaid interest, is due no later than October 1, 2020. However, pursuant to the
First Amendment to the Disposition and Development Agreement, dated June 15,
1993, the entire principal amount and accrued interest shall be forgiven by the
Agency provided that no event of default exists. As of June 30, 2016, the balance
was: 765,625
31,705
On September 25, 2015, City Council approved a loan repayment agreement
between the City of Monrovia (City) and Green Leaf Events, Inc. (Franchisee) in
an amount not to exceed $45,000 for use towards fulfilling Franchisee's
obligations to serve as an independent contractor for the production of the weekly
Friday Night Family Street Fair in Old Town Monrovia. Any loan amount
requested by the Franchisee shall accrue interest at the rate of 1.75%. As of
June 30, 2016, the balance was:
b. Deferred Loans Receivable The City has made various rehabilitation and second trust deed loans bearing
different interest rates to property owners within the City. The majority of the loans
are payable upon sale of the property. However, if the property is not sold within a
certain number of years, as stated in each loan agreement, any principal and
interest relating to the loan is forgiven. The balance of the loans outstanding as
of June 30, 2016, was: 1,663,518
Total Loans and Deferred Loans Receivable: 2,940,936$
48
CITY OF MONROVIA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2016
Note 5: Capital Assets
Capital asset activity for the year ended June 30, 2016, was as follows:
Beginning Ending
Balance Increases Decreases Balance
Governmental Activities:
Capital Assets, Not Being Depreciated:
Land 32,824,327$ -$ -$ 32,824,327$
Construction-in-progress 14,877,070 6,390,734 - 21,267,804
Total Capital Assets
Not Being Depreciated 47,701,397 6,390,734 - 54,092,131
Capital Assets, Being Depreciated:
Structures & Improvements 27,240,154 - - 27,240,154
Equipment, Furniture and Vehicles 12,306,897 1,920,738 (389,006) 13,838,629
Infrastructure 71,154,073 11,137 - 71,165,210
Total Capital Assets
Being Depreciated 110,701,124 1,931,875 (389,006) 112,243,993
Less Accumulated Depreciation
Structures & Improvements 9,644,201 672,786 - 10,316,987
Equipment, Furniture and Vehicles 8,667,064 1,070,217 (376,005) 9,361,276
Infrastructure 41,962,550 2,174,112 - 44,136,662
Total Accumulated 60,273,815 3,917,115 (376,005) 63,814,925
Depreciation
Total Capital Assets
Being Depreciated, Net 50,427,309 (1,985,240) (13,001) 48,429,068
Governmental Activities
Capital Assets, Net 98,128,706$ 4,405,494$ (13,001)$ 102,521,199$
Depreciation expense was charged to functions/programs of the primary government as
follows:
Governmental Activities
General government 11,161$
Public Safety 528,091
Community development 144,770
Community services 348,230
Public works 2,271,869
Internal Services Funds 612,994
Total Governmental Activities 3,917,115$
49
CITY OF MONROVIA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2016
Note 5: Capital Assets (Continued)
Beginning Ending
Balance Increases Decreases Balance
Business-Type Activities:
Capital assets, not being depreciated:
Land 438,232$ -$ -$ 438,232$
Construction-in-Progress - 1,026,162 - 1,026,162
Total Capital Assets
Not Being Depreciated 438,232 1,026,162 - 1,464,394
Capital assets, being depreciated:
Structures & Improvements 3,277,298 - - 3,277,298
Equipment, furniture and vehicles 1,464,144 33,351 - 1,497,495
Infrastructure 16,199,405 - - 16,199,405
Total Capital assets, being depreciated: 20,940,847 33,351 - 20,974,198
Less Accumulated Depreciation
Structures & improvements 977,182 55,714 - 1,032,896
Machinery, Equipment & Vehicles 1,400,458 39,807 - 1,440,265
Infrastructure 5,859,446 270,472 - 6,129,918
Total Accumulated Depreciation: 8,237,086 365,993 - 8,603,079
12,703,761 (332,642) - 12,371,119
13,141,993$ 693,520$ -$ 13,835,513$
Total Capital Assets, Being Depreciated, Net
Business-type Activities Capital Assets, Net
Depreciation expense was charged to functions/programs of the primary government as
follows:
Business-Type Activities:
Water 235,726$
Sewer 112,112
Storm drain 18,155
Total Business-Type Activities 365,993$
50
CITY OF MONROVIA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2016
Note 6: Interfund Receivables, Payables and Transfers
The composition of interfund balances as of June 30, 2016, was as follows:
a. Due To/From Other Funds
Totals
General Fund Gang Violence and Drug Abuse Grants 151,188$
NonMajor Governmental Funds 234,699
NonMajor Business Type 155,575
541,462
Water Fund NonMajor Business-type Funds 580,353
Sewer Fund NonMajor Business-type Funds 246,523
Non Major Business Type NonMajor Business-type Funds 173,260
Receivable Fund Payable Fund
Funds were advanced from the Sewer and NonMajor Business Type Funds to various
funds to pay for the Corporate Yard renovation. The amounts loaned from the General
Fund to the NonMajor Governmental Funds was to eliminate negative cash balances as
of June 30, 2016.
b. Interfund Transfers
Monrovia Nonmajor Nonmajor Internal
Housing Governmental Business-Type Service
Fund General Authority Funds Funds Funds Totals
Major Governmental Funds:
General Fund -$ -$ 1,853,922$ -$ -$ 1,853,922$
Housing Authority 23,991 - - - - 23,991
Major Business Type Funds:
Water Fund 1,322,910 - - - - 1,322,910
Sewer Fund 233,395 - - - - 233,395
Nonmajor Governmental Funds 6,010,960 12,391 2,273,318 - 206,818 8,503,487
Nonmajor Business-Type Funds 879,112 - 430,000 30,000 - 1,339,112
Internal Service Funds 556,009 - - - - 556,009
Totals 9,026,377$ 12,391$ 4,557,240$ 30,000$ 206,818$ 13,832,826$
Tra
nsfe
rs O
ut:
Transfers In:
The General Fund received $9,026,377 for retirement costs, overhead and administrative
charges. The Housing Authority received $12,391 for general overhead and
administrative charges. The non-major governmental funds received $4,557,240 from
various funds to cover retirement costs, for general overhead and administrative charges,
and for general support for various projects and operational costs. The non-major
business type funds received $30,000 in support for street sweeping costs. The internal
service type funds received $206,818 for retirement costs and general overhead and
administrative charges.
51
CITY OF MONROVIA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2016
Note 6: Interfund Receivables, Payables and Transfers (Continued)
c. Advances To/From Other Funds
Totals
Business-type Funds:
Water General Fund 66,641$
Non-major Governmental Funds 108,278
Non-major Enterprise Funds 33,321
Internal Service Funds 33,321
241,561
Sewer General Fund 26,255
Non-major Governmental Funds 42,659
Non-major Enterprise Funds 13,127
Internal Service Funds 13,127
95,168
336,729$
Receivable Fund Payable Fund
The Water Fund and Sewer Fund paid for the Public Works Corporate Yard renovation
project. Various funds that account for other Public Works departments are repaying the
Water and Sewer Funds, amortized over ten years.
Note 7: Advance to the Successor Agency of the Former Monrovia Redevelopment Agency (Successor Agency)
On July 23, 2009, the State adopted legislation requiring a shift of monies during fiscal years
2009-2010 and 2010-2011 to be deposited into the County Supplemental Educational
Revenue Augmentation Fund (SERAF). To accomplish these payments, Monrovia’s former
Redevelopment Agency borrowed from Monrovia’s Redevelopment Agency
Low/Mod Housing Fund. The balance outstanding of $2,551,385 as of June 30, 2016, due
from the Private Purpose Trust Fund Successor Agency.
52
CITY OF MONROVIA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2016
Note 8: Governmental Activities Long-Term Debt
The following is a summary of changes in governmental activities long-term debt of the City
for the year ended June 30, 2016:
Balance Balance Due Within
July 1, 2015 Additions Deletions June 30, 2016 One Year
Lease revenue bonds:
2007 Library Bonds 13,980,000$ -$ 360,000$ 13,620,000$ 380,000$
2015 Hillside Refunding Bonds 6,180,000 - 300,000 5,880,000 265,000
2016 Lease Revenue Bonds - 13,600,000 - 13,600,000 155,000
Pension obligation bonds:
2010 Pension Obligation Bonds 11,805,000 - 385,000 11,420,000 450,000
Other long term liabilities:
Leases Payable 473,328 70,990 137,688 406,630 135,308
Compensated Absences 2,075,233 1,490,087 1,445,582 2,119,738 1,526,211
Claims and judgment 5,793,355 - 3,818,478 1,974,877 1,158,891
40,306,916$ 15,161,077$ 6,446,748$ 49,021,245 4,070,410$
Net unamortized bond premium (discount) 1,287,706
50,308,951$
There are a number of limitations and restrictions contained in the various bond indentures.
The City is in compliance with all significant limitations and restrictions.
a. Lease Revenue Bonds 2007 Library Lease Revenue Bonds
On November 15, 2007, the Monrovia Financing Authority issued Lease Revenue Bonds
in the amount of $15,850,000. The bonds are payable from lease payments to be made
by the City of Monrovia to the Authority for the rental of certain property and the
Monrovia Public Library facilities and all other facilities and improvements.
The bonds maturing after December 1, 2017, are subject to optional redemption prior to
maturity at 100% of par, at the option of the City pursuant to the Lease Agreement, as a
whole or in part on any date on or after December 1, 2017, from available funds in the
Redemption Account including the amount of the Purchase Option Price in the event the
City exercises its option to purchase the Project. The bonds maturing on
December 1, 2027, are subject to mandatory redemption by lot in the principal amounts
ranging from $485,000 to $605,000, without premium, on December 1 of each year,
commencing on December 1, 2022. The bonds maturing on December 1, 2032, are
subject to mandatory redemption by lot in the principal amounts ranging from $630,000 to
$755,000, without premium, on December 1, of each year, commencing on
December 1, 2028. The bonds maturing on December 1, 2037, are subject to mandatory
redemption by lot in the principal amounts ranging from $790,000 to $960,000, without
premium, on December 1 of each year, commencing on December 1, 2033.
53
CITY OF MONROVIA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2016
Note 8: Governmental Activities Long-Term Debt (Continued)
The balance outstanding as of June 30 and the remaining debt service payments are as
follows:
Principal Interest
2017 380,000$ 623,899$
2018 395,000 606,461
2019 415,000 589,274
2020 430,000 572,159
2021 445,000 554,166
2022 - 2026 2,540,000 2,454,544
2027 - 2031 3,165,000 1,811,925
2032 - 2036 3,975,000 978,769
2037 - 2038 1,875,000 94,875
Total 13,620,000$ 8,286,072$
2007 Library Lease Revenue BondYear Ending
June 30,
2015 Hillside Lease Revenue Refunding Bonds
On April 7, 2015, the Monrovia Financing Authority issued Lease Revenue Refunding
Bonds (Hillside Wilderness Preserve Project) in the amount of $6,180,000. Proceeds
from the bonds were used to refund the Authority’s Lease Revenue Bonds
(Hillside Wilderness Preserve Project) Issue of 2002, to pay the premium for a municipal
bond debt service reserve insurance policy for deposit into the Reserve Account and to
pay certain costs associated with issuance of the Bonds. The proceeds of the
2002 Bonds were used to acquire certain property located in the foothills of the
San Gabriel Mountains (The Property). The Bonds are payable from Lease Payments to
be made by the City to the Authority as rental for The Property pursuant to that certain
Lease Agreement between the City and the Authority dated as of July 1, 2002.
The Bonds bear interest ranging from 2.00% to 5.00% per annum payable on June 1 and
December 1 of each year commencing June 1, 2015. The Bonds mature starting
December 1, 2015 and end on December 1, 2031.
54
CITY OF MONROVIA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2016
Note 8: Governmental Activities Long-Term Debt (Continued)
The balance outstanding as of June 30 and the remaining debt service payments are as
follows:
Principal Interest
2017 265,000$ 230,194$
2018 275,000 222,094
2019 285,000 212,269
2020 295,000 200,669
2021 305,000 187,144
2022 - 2026 1,765,000 684,969
2027 - 2031 2,205,000 257,272
2032 485,000 7,881
Total 5,880,000$ 2,002,492$
2015 Hillside Lease Revenue
Refunding BondsYear Ending
June 30,
2016 Measure R and Proposition C Street Improvements Lease Revenue Bonds
On March 10, 2016, the Monrovia Financing Authority issued Lease Revenue Bonds
(Measure R and Proposition C Street Improvements) in the amount of $13,600,000. The
Bonds are being issued to finance the costs of acquisition, construction, rehabilitation,
reconstruction, and resurfacing of the City’s public street facilities, to fund a reserve
account, and to pay certain costs of issuance in association therewith. The Bonds are
payable from lease payments to be made by the City of Monrovia, California to the
Authority for the rental of certain real property located at 600 South Mountain Avenue,
2053 to 2055 South Myrtle Avenue and 141 East Lemon Avenue, in the City, and the
City’s Corporate Yard Building and Maintenance Yard, Fire Station #1, and Fire Station
#2, and related parking lots, and all other facilities and improvements on the Site,
pursuant to a Lease Agreement, dated March 1, 2016, by and between the City, as
lessee, and the Authority, as lessor.
The Bonds bear interest ranging from 3.00% to 5.00% per annum payable on June 1 and
December 1 of each year commencing December 1, 2016. The Bonds mature starting
December 1, 2016 and end on December 1, 2045.
The balance outstanding as of June 30 and the remaining debt service payments are as
follows:
Principal Interest
2017 155,000$ 630,058$
2018 265,000 524,531
2019 275,000 516,431
2020 280,000 508,106
2021 290,000 498,106
2022 - 2026 1,630,000 2,298,756
2027 - 2031 2,040,000 1,890,081
2032 - 2036 2,410,000 1,517,834
2037 - 2041 2,820,000 1,101,931
2042 - 2046 3,435,000 446,125
Total 13,600,000$ 9,931,959$
2016 Lease Revenue BondsYear Ending
June 30,
55
CITY OF MONROVIA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2016
Note 8: Governmental Activities Long-Term Debt (Continued)
b. 2010 Taxable Pension Obligation Bonds
On July 28, 2010, the City issued Taxable Pension Obligation Bonds, Series 2010 in the
amount of $12,750,000. The proceeds of the bonds were used to fund a portion of the
City’s unfunded liability to the California Public Employees’ Retirement System (“PERS”)
for the benefit of the City’s employees.
The serial bonds mature annually each December 1 from 2011 to 2028, in amounts
ranging from $40,000 to $330,000 and bear interest at rates ranging from 1.80% to
4.56%. Interest is payable semi-annually on May 1 and November 1, commencing
November 1, 2010.
The term bonds maturing on May 1, 2023 and May 1, 2028, bear interest rates of 6.000%
and 6.625% respectively. The bonds are subject to optional redemption prior to maturity,
in whole or in part, on May 1, 2020, and on any date thereafter, at a redemption price
equal to the principal amount, plus accrued interest to the redemption date, without a
premium. The balance outstanding at June 30, less unamortized original issue discount
and the remaining debt service payments are as follows:
Principal Interest
2017 450,000$ 726,575$
2018 520,000 699,575
2019 595,000 668,375
2020 675,000 632,675
2021 760,000 592,175
2022 - 2026 5,355,000 2,139,250
2027 - 2028 3,065,000 309,719
Total 11,420,000$ 5,768,344$
2010 Taxable Pension Obligation
BondsYear Ending
June 30,
56
CITY OF MONROVIA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2016
Note 8: Governmental Activities Long-Term Debt (Continued)
c. Lease Payable
1. Internal Service Fund Capital Leases
i. During January 2013, the City entered into a vehicle lease agreement for a
2013 Ford Edge for the Police Department. Interest on the Ford Edge accrues at
1.95% for a period of 3 years commencing on March 2013. At June 30, 2016, the
lease had been paid in full.
ii. During May 2013, the City entered into a vehicle lease agreement for a
2013 Ford Explorer for the Police Department. Interest on the Ford Explorer
accrues at 1.95% for a period of 3 years commencing on May 2013. At
June 30, 2016, the lease had been paid in full.
iii. During May 2014, the City entered into a vehicle lease agreement for a new
2014 Ford Fusion Hybrid vehicle. Interest on the Ford Fusion Hybrid vehicle
accrues at 1.5% for a period of 4 years commencing on May 2014.
The following is a schedule, by years, of future minimum lease payments:
Year Ending
June 30, Total
2017 6,570$
2018 5,934
Total Minimum Lease Payments 12,504
Less Amount Representing Interest (1,886)
Present Value of Net Minimum Lease Payments 10,618$
iv. During May 2014, the City entered into vehicle lease agreements for two new
2014 Ford Edge vehicles. Interest on the Ford Edge vehicles accrue at 1.5% for
a period of 4 years commencing on May 2014.
The following is a schedule, by years, of future minimum lease payments:
Year Ending
June 30, Total
2017 14,943$
2018 13,577
Total Minimum Lease Payments 28,520
Less Amount Representing Interest (4,303)
Present Value of Net Minimum Lease Payments 24,217$
57
CITY OF MONROVIA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2016
Note 8: Governmental Activities Long-Term Debt (Continued)
v. During June 2014, the City entered into vehicle lease agreements for two new
2014 Ford Fusion Hybrid vehicles. Interest on the Ford Fusion Hybrid vehicle
accrues at 1.5% for a period of 5 years commencing on June 2014.
The following is a schedule, by years, of future minimum lease payments:
Year Ending
June 30, Total
2017 12,973$
2018 12,973
2019 12,757
Total Minimum Lease Payments 38,703
Less Amount Representing Interest (11,977)
Present Value of Net Minimum Lease Payments 26,726$
vi. During December 2014, the City entered into a vehicle lease agreement for a
new 2015 Chevrolet Colorado vehicle. Interest on the Chevrolet Colorado vehicle
accrues at 1.5% for a period of 4 years commencing on December 2014.
The following is a schedule, by years, of future minimum lease payments:
Year Ending
June 30, Total
2017 6,207$
2018 6,207
2019 2,737
Total Minimum Lease Payments 15,151
Less Amount Representing Interest (2,284)
Present Value of Net Minimum Lease Payments 12,867$
58
CITY OF MONROVIA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2016
Note 8: Governmental Activities Long-Term Debt (Continued)
vii. During February 2015, the City entered into a vehicle lease agreement for a new
2015 Ford Transit-350XL Super Cab vehicle. Interest on the 2015 Ford Transit
vehicle accrues at 1.65% for a period of 5 years commencing on February 2015.
The following is a schedule, by years, of future minimum lease payments:
Year Ending
June 30, Total
2017 13,103$
2018 13,103
2019 13,103
2020 7,995
Total Minimum Lease Payments 47,304
Less Amount Representing Interest (17,272)
Present Value of Net Minimum Lease Payments 30,032$
viii. During December 2014, the City entered into a vehicle lease agreement for a
new 2015 Ford Transit-150 vehicle. Interest on the Ford Transit vehicle accrues
at 1.5% for a period of 5 years commencing in December 2014.
The following is a schedule, by years, of future minimum lease payments:
Year Ending
June 30, Total
2017 5,999$
2018 5,999
2019 5,999
2020 2,500
Total Minimum Lease Payments 20,497
Less Amount Representing Interest (6,345)
Present Value of Net Minimum Lease Payments 14,152$
59
CITY OF MONROVIA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2016
Note 8: Governmental Activities Long-Term Debt (Continued)
ix. During August, 2014, the City entered into a vehicle lease agreement for a new
2014 Ford Fusion Hybrid vehicle. Interest on the Ford Fusion Hybrid vehicle
accrues at 1.5% for a period of 5 years commencing on August 2014.
The following is a schedule, by years, of future minimum lease payments:
Year Ending
June 30, Total
2017 6,535$
2018 6,535
2019 6,552
Total Minimum Lease Payments 19,622
Less Amount Representing Interest (6,074)
Present Value of Net Minimum Lease Payments 13,548$
x. During September 2014, the City entered into a vehicle lease agreement for a
new 2014 Ford F-150. Interest on the Ford F-150 vehicle accrues at 1.5% for a
period of 5 years commencing in September 2014.
The following is a schedule, by years, of future minimum lease payments:
Year Ending
June 30, Total
2017 7,301$
2018 7,301
2019 7,301
2020 1,704
Total Minimum Lease Payments 23,607
Less Amount Representing Interest (7,308)
Present Value of Net Minimum Lease Payments 16,299$
60
CITY OF MONROVIA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2016
Note 8: Governmental Activities Long-Term Debt (Continued)
xi. During October 2014, the City entered into vehicle lease agreements for a new
2014 Ford F-150 Super Cab and 2015 Ford F-150 Super Cab vehicle. Interest on
these Ford F-150’s accrues at 1.5% for a period of 4 and 5 years commencing in
October 2014.
The following is a schedule, by years, of future minimum lease payments:
Year Ending
June 30, Total
2017 13,001$
2018 13,001
2019 8,687
2020 2,128
Total Minimum Lease Payments 36,817
Less Amount Representing Interest (9,218)
Present Value of Net Minimum Lease Payments 27,599$
xii. During November 2014, the City entered into vehicle lease agreements for
two new 2014 Ford F-150 vehicles. Interest on the Ford F-150 vehicles accrue at
1.5% for a period of 4 and 5 years commencing in November 2014.
The following is a schedule, by years, of future minimum lease payments:
Year Ending
June 30, Total
2017 11,993$
2018 11,993
2019 7,564
2020 1,500
Total Minimum Lease Payments 33,050
Less Amount Representing Interest (8,061)
Present Value of Net Minimum Lease Payments 24,989$
61
CITY OF MONROVIA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2016
Note 8: Governmental Activities Long-Term Debt (Continued)
xiii. During September 2014, the City entered into vehicle lease agreements for
two new 2014 Ford F-250 vehicles. Interest on the Ford F-250 vehicles accrue at
1.5% for a period of 5 years commencing in September 2014.
The following is a schedule, by years, of future minimum lease payments:
Year Ending
June 30, Total
2017 15,247$
2018 15,247
2019 15,247
2020 3,727
Total Minimum Lease Payments 49,468
Less Amount Representing Interest (15,311)
Present Value of Net Minimum Lease Payments 34,157$
xiv. During November 2014, the City entered into vehicle lease agreements for
three new 2015 Ford F-250 vehicles. Interest on the Ford F-250 vehicles accrue
at 1.5% for a period of 5 years commencing in November 2014.
The following is a schedule, by years, of future minimum lease payments:
Year Ending
June 30, Total
2017 21,416$
2018 21,416
2019 21,416
2020 5,736
Total Minimum Lease Payments 69,984
Less Amount Representing Interest (21,673)
Present Value of Net Minimum Lease Payments 48,311$
62
CITY OF MONROVIA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2016
Note 8: Governmental Activities Long-Term Debt (Continued)
xv. During November 2014, the City entered into a vehicle lease agreement for a
new 2015 Ford F-350 vehicle. Interest on the Ford F-350 vehicle accrues at
1.5% for a period of 5 years commencing on November 2014.
The following is a schedule, by years, of future minimum lease payments:
Year Ending
June 30, Total
2017 7,496$
2018 7,496
2019 7,496
2020 1,894
Total Minimum Lease Payments 24,382
Less Amount Representing Interest (7,549)
Present Value of Net Minimum Lease Payments 16,833$
xvi. During January 2015, the City entered into vehicle lease agreements for
three new 2015 Chevrolet Colorado vehicles. Interest on the Chevrolet Colorado
vehicles accrue at 1.5% for a period of 4 years commencing on January 2015.
The following is a schedule, by years, of future minimum lease payments:
Year Ending
June 30, Total
2017 18,743$
2018 18,743
2019 10,161
Total Minimum Lease Payments 47,647
Less Amount Representing Interest (7,224)
Present Value of Net Minimum Lease Payments 40,423$
63
CITY OF MONROVIA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2016
Note 8: Governmental Activities Long-Term Debt (Continued)
xvii. During September 2015, the City entered into a vehicle lease agreement for
a new 2016 Chevrolet Colorado vehicle. Interest on the Chevrolet Colorado
vehicle accrue at 1.60% for a period of 4 years commencing on September 2015.
The following is a schedule, by years, of future minimum lease payments:
Year Ending
June 30, Total
2017 6,601$
2018 6,601
2019 6,601
2020 1,359
Total Minimum Lease Payments 21,162
Less Amount Representing Interest (4,407)
Present Value of Net Minimum Lease Payments 16,755$
xviii. During May 2016, the City entered into a vehicle lease agreement for a new
2015 Ford F-350 Chassis vehicle. Interest on the Ford Chassis vehicle accrue
at 1.67% for a period of 5 years commencing on May 2016.
The following is a schedule, by years, of future minimum lease payments:
Year Ending
June 30, Total
2017 15,939$
2018 15,939
2019 15,939
2020 15,939
2021 14,354
Total Minimum Lease Payments 78,110
Less Amount Representing Interest (29,006)
Present Value of Net Minimum Lease Payments 49,104$
d. Compensated Absences
There is no fixed payment schedule for compensated absences. Compensated absences
are liquidated from all funds, with the majority being liquidated from the General Fund.
The outstanding balance due as of June 30, 2016, is $2,119,738.
e. Claims and Judgment
The City’s liability regarding self insurance is described in Note 13 of the Notes to
Financial Statements. The liability will be paid as it becomes due by the Liability
Insurance Fund.
64
CITY OF MONROVIA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2016
Note 9: Business-Type Activities Long-Term Debt
The following is a summary of changes in business-type activities long-term debt for the year
ended June 30, 2016:
Balance Balance Due Within
July 1, 2015 Additions Deletions July 30, 2016 One Year
Lease revenue bonds:
-$ 36,770,000$ -$ 36,770,000$ 400,000$
Other long term liabilities
Compensated Absences 151,779 129,530 159,582 121,727 87,643
Total 151,779$ 36,899,530$ 159,582$ 36,891,727$ 487,643$
Net unamortized bond premium (discount) 2,764,801
39,656,528$
2016 Water and Sewer
Revenue Bonds
a. 2016 Water and Sewer Revenue Bonds
On March 9, 2016, the Monrovia Financing Authority issued Water and Sewer Revenue
Bonds. The proceeds will be used to finance the acquisition and construction of capital
improvements of the Water System of the City of Monrovia, to finance the acquisition and
construction of capital improvement of the Sewer System of the City, to purchase a
municipal bond insurance policy from Assured Guaranty Municipal Corp to guarantee the
payment of principal of and interest on the Bonds, to purchase a municipal bond debt
service reserve insurance policy from the Insurer for deposit in the Reserve Account for
the Bonds, and to pay costs of issuance of the Bonds.
The Bonds bear interest ranging from 3.00% to 5.00% per annum payable on June 1 and
December 1 of each year commencing December 1, 2016. The Bonds mature starting
December 1, 2016 and end on December 1, 2045.
The balance outstanding as of June 30 and the remaining debt service payments are as
follows:
Principal Interest
2017 400,000$ 1,731,608$
2018 695,000 1,442,538
2019 715,000 1,421,388
2020 735,000 1,395,963
2021 765,000 1,365,963
2022 - 2026 4,325,000 6,316,488
2027 - 2031 5,455,000 5,153,188
2032 - 2036 6,570,000 4,068,650
2037 - 2041 7,735,000 2,848,856
2042 - 2046 9,375,000 1,152,775
Total 36,770,000$ 26,897,417$
2016 Water and Sewer Revenue
BondsYear Ending
June 30,
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CITY OF MONROVIA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2016
Note 9: Business-Type Activities Long-Term Debt (Continued)
b. Compensated Absences There is no fixed payment schedule for compensated absences. The outstanding balance
at June 30, 2016, was $121,727. In prior years, the liability for compensated absences
has been funded by all business-type activities.
Note 10: City Employees Retirement Plan (Defined Benefit Pension Plan)
Plan Description
All qualified permanent and probationary employees are eligible to participate in the City’s
separate Cost-Sharing Safety (police and fire) and Agent Miscellaneous (all other) Plans,
administered by the California Public Employees’ Retirement System (CalPERS), which acts
as a common investment and administrative agent for its participating member employers.
Benefit provisions under the Plan are established by State statute and City resolution.
CalPERS issues publicly available reports that include a full description of the pension plan
regarding benefit provisions, assumptions and membership information that can be found on
the CalPERS website.
Benefits Provided
CalPERS provides service retirement and disability benefits, annual cost of living adjustments
and death benefits to plan members, who must be public employees and beneficiaries.
Benefits are based on years of credited service, equal to one year of full time employment.
Members with five years of total service are eligible for non-duty disability benefits after
10 statutorily reduced benefits.
The rate plan provisions and benefits in effect at June 30, 2016, are summarized as follows:
Miscellaneous
Classic*
Miscellaneous
PEPRA
Hire date
Prior to
January 1, 2013
January 1, 2013
and after
Benefit formula 2.7% @ 55 2.0% @ 62
Benefit vesting schedule 5 years service 5 years service
Benefit payments monthly for life monthly for life
Retirement age minimum 50 yrs minimum 50 yrs
Monthly benefits, as a % of
eligible compensation
2% - 2.7%, 50 yrs -
55+ yrs, respectively
1% - 2%, 50 yrs -
62 yrs, respectively
Required employee
contribution rates 8.00% 6.75%
Required employer
contribution rates 30.91% 30.91%
*Closed to new entrants
Miscellaneous Agent Plans
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CITY OF MONROVIA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2016
Note 10: City Employees Retirement Plan (Defined Benefit Pension Plan) (Continued)
Safety Classic*
Safety Fire
PEPRA
Safety Police
PEPRA
Hire date
Prior to
January 1, 2013
January 1, 2013
and after
January 1, 2013
and after
Benefit formula 3.0% @ 50 2.7% @ 57 2.7% @ 57
Benefit vesting schedule 5 years service 5 years service 5 years service
Benefit payments monthly for life monthly for life monthly for life
Retirement age minimum 50 yrs minimum 50 yrs minimum 50 yrs
Monthly benefits, as a % of
eligible compensation 3.00%
2.0% - 2.7%, 50
yrs - 62 yrs,
respectively
2.0% - 2.7%, 50
yrs - 62 yrs,
respectively
Required employee
contribution rates 9.00% 13.00% 13.00%
Required employer
contribution rates 22.38% 12.93% 12.93%
Safety Cost-Sharing Plans
*Closed to new entrants
Employees Covered
As of the measurement date, the following employees were covered by the benefit terms for
the Miscellaneous Plans:
Miscellaneous Plans
Inactive employees or beneficiaries currently receiving benefits 231
Inactive employees entitled to but not yet receiving benefits 505
Active employees 137
873
Contributions
Section 20814(c) of the California Public Employees’ Retirement Law (PERL) requires that
the employer contribution rates for all public employers be determined on an annual basis by
the actuary and shall be effective on the July 1 following notice of a change in the rate. The
total plan contributions are determined through CalPERS’ annual actuarial valuation process.
The actuarially determined rate is the estimated amount necessary to finance the costs of
benefits earned by employees during the year, with an additional amount to finance any
unfunded accrued liability. The employer is required to contribute the difference between the
actuarially determined rate and the contribution rate of employees.
For the year ended June 30, 2016, the contributions recognized as a reduction to the
net pension liability was $2,546,716 and $2,674,702 for the miscellaneous and safety plans,
respectively.
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CITY OF MONROVIA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2016
Note 10: City Employees Retirement Plan (Defined Benefit Pension Plan) (Continued)
Actuarial Methods and Assumptions Used to Determine Total Pension Liability
For the measurement period ended June 30, 2015 (the measurement date), the total pension
liability was determined by rolling forward the June 30, 2014 total pension liability. The
June 30, 2015 total pension liabilities were based on the following actuarial methods and
assumptions:
Actuarial Cost Method Entry Age Normal in accordance with the
requirements of GASB Statement No. 68
Discount Rate 7.65%
Inflation 2.75%
Salary Increases Varies by Entry Age and Service
Investment Rate of Return 7.50% Net of Pension Plan Investment and
Administrative Expenses; includes Inflation
Mortality Rate Table (1) Derived using CalPERS’ Membership Data for
all Funds
Post Retirement Benefit
Increase Contract COLA up to 2.75% until Purchasing
Power Protection Allowance Floor on
Purchasing Power applies, 2.75% thereafter
Actuarial Assumptions
(1) The mortality table used was developed based on CalPERS’ specific data. The table includes
20 years of mortality improvements using Society of Actuaries Scale BB. For more details on this
table, please refer to the 2014 experience study report.
All other actuarial assumptions used in the June 30, 2014 valuation were based on the
results of an actuarial experience study for the period from 1997 to 2011, including updates to
salary increase, mortality and retirement rates. The Experience Study report can be obtained
at CalPERS’ website under Forms and Publications.
Change of Assumptions
GASB 68, paragraph 68 states that the long-term expected rate of return should be
determined net of pension plan investment expense but without reduction for pension plan
administrative expense. The discount rate of 7.50 percent used for the June 30, 2014
measurement date was net of administrative expenses. The discount rate of 7.65 percent
used for the June 30, 2015 measurement date is without reduction of pension plan
administrative expense.
Discount Rate
The discount rate used to measure the total pension liability was 7.65 percent. To determine
whether the municipal bond rate should be used in the calculation of a discount rate for each
plan, CalPERS stress tested plans that would most likely result in a discount rate that would
be different from the actuarially assumed discount rate. Based on the testing, none of the
tested plans run out of assets. Therefore, the current 7.65 percent discount rate is adequate
and the use of the municipal bond rate calculation is not necessary. The long-term expected
discount rate of 7.65 percent is applied to all plans in the Public Employees Retirement Fund.
The stress test results are presented in a detailed report called “GASB Crossover Testing
Report” that can be obtained at CalPERS’ website under the GASB 68 section.
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CITY OF MONROVIA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2016
Note 10: City Employees Retirement Plan (Defined Benefit Pension Plan) (Continued)
According to Paragraph 30 of Statement 68, the long-term discount rate should be
determined without reduction for pension plan administrative expense. The 7.50 percent
investment return assumption used in this accounting valuation is net of administrative
expenses. Administrative expenses are assumed to be 15 basis points. An investment return
excluding administrative expenses would have been 7.65 percent. Using this lower discount
rate has resulted in a slightly higher total pension liability and net pension liability. This
difference was deemed immaterial to the agent multiple-employer plan. Refer to the
sensitivity of the net pension liability for changes in the discount rate.
CalPERS is scheduled to review all actuarial assumptions as part of its regular Asset Liability
Management review cycle that is scheduled to be completed in February 2018. Any changes
to the discount rate will require Board action and proper stakeholder outreach. For these
reasons, CalPERS expects to continue using a discount rate net of administrative expenses
for GASB 67 and 68 calculations through at least the 2017-18 fiscal year. CalPERS will
continue to check the materiality of the difference in calculation until such time as we have
changed our methodology.
The long-term expected rate of return on pension plan investments was determined using a
building-block method in which best-estimate ranges of expected future real rates of return
(expected returns, net of pension plan investment expense and inflation) are developed for
each major asset class.
In determining the long-term expected rate of return, CalPERS took into account both
short-term and long-term market return expectations as well as the expected pension fund
cash flows. Such cash flows were developed assuming that both members and employers
will make their required contributions on time and as scheduled in all future years. Using
historical returns of all the funds’ asset classes, expected compound (geometric) returns were
calculated over the short-term (first 10 years) and the long-term (11-60 years) using a
building-block approach. Using the expected nominal returns for both short-term and
long-term, the present value of benefits was calculated for each fund. The expected rate of
return was set by calculating the single equivalent expected return that arrived at the same
present value of benefits for cash flows as the one calculated using both short-term and
long-term returns. The expected rate of return was then set equivalent to the single
equivalent rate calculated above and rounded down to the nearest one quarter of one
percent.
The table below reflects long-term expected real rate of return by asset class. The rate of
return was calculated using the capital market assumptions applied to determine the discount
rate and asset allocation. These geometric rates of return are net of administrative expenses.
Asset ClassNew Strategic
AllocationReal Return
Years 1 - 10 (1)Real Return
Years 11+ (2)Global Equity 51.0% 5.25% 5.71%
Global Fixed Income 19.0 0.99 2.43
Inflation Sensitive 6.0 0.45 3.36
Private Equity 10.0 6.83 6.95
Real Estate 10.0 4.50 5.13
Infrastructure and Forestland 2.0 4.50 5.09
Liquidity 2.0 (0.55) (1.05)
69
CITY OF MONROVIA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2016
Note 10: City Employees Retirement Plan (Defined Benefit Pension Plan) (Continued)
Pension Plan Fiduciary Net Position
The plan fiduciary net position disclosed in the GASB 68 accounting valuation report may
differ from the plan assets reported in the funding actuarial valuation report due to several
reasons. First, for the accounting valuations, CalPERS must keep items such as deficiency
reserves, fiduciary self-insurance and OPEB expense included as assets. These amounts are
excluded for rate setting purposes in the funding actuarial valuation. In addition, differences
may result from early Comprehensive Annual Financial Report closing and final reconciled
reserves.
Net Pension and Liability and Changes in Net Pension Liability
As of June 30, 2016, the City reported net pension liabilities of each as follows:
Miscellaneous agent 37,854,665$
Safety cost-sharing proportionate share 36,861,305
Total Net Pension Liability: 74,715,970$
Net Pension Liability
For the Safety proportionate share of the net pension liability, it is measured as of
June 30, 2015, and the total pension liability for each Plan used to calculate the net pension
liability was determined by an actuarial valuation as of June 30, 2014 rolled forward to
June 30, 2015 using standard update procedures. The City’s proportion of the net pension
liability was based on a projection of the City’s long-term share of contributions to the pension
plans relative to the projected contributions of all participating employers, actuarially
determined.
The City’s proportionate share of the net pension liability for the Safety plans as of
June 30, 2014 and June 30, 2015 is as follows:
Safety Classic
Safety Fire
PEPRA
Safety Police
PEPRA Total Plans
Proportion - June 30, 2014 0.42717% 0.00000% 0.00000% 0.42717%
Proportion - June 30, 2015 0.53703% 0.00000% 0.00000% 0.53703%
Change - Increase (Decrease) 0.10986% 0.00000% 0.00000% 0.10986%
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CITY OF MONROVIA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2016
Note 10: City Employees Retirement Plan (Defined Benefit Pension Plan) (Continued)
Changes in the Net Pension Liability
The following table shows the changes in net pension liability recognized over the
measurement period for the miscellaneous agent multiple-employer plan.
Total Pension
Liability
(a)
Plan Fiduciary
Net Position
(b)
Net Pension
Liability/(Assets)
(c)=(a)-(b)
Balance at: 6/30/2014 (Valuation Date) (1) 107,522,595$ 70,578,785$ 36,943,810$
Changes Recognized for the Measurement Period:
Service Cost 1,785,034 - 1,785,034
Interest on the Total Pension Liability 7,805,621 - 7,805,621
Changes of Benefit Terms - - -
Difference between Expected and Actual (1,771,353) - (1,771,353)
Changes of Assumptions (1,931,021) - (1,931,021)
Contribution from the Employer - 2,546,716 (2,546,716)
Contributions from Employees - 924,253 (924,253)
Net Investment Income (2) - 1,585,632 (1,585,632)
Benefit Payments including Refunds of
Employee
Contributions (5,356,957) (5,356,957) -
Administrative Expense - (79,175) 79,175
Net Changes During 2014-15 531,324 (379,531) 910,855
Balance at: 6/30/2015 (Measurement Date) (1) 108,053,919$ 70,199,254$ 37,854,665$
Increase (Decrease)
Note: Contributions from the Employer (City) has been adjusted from the GASB 68 report to reflect the
actual contributions for the year ended June 30, 2015.
(1) The fiduciary net position includes receivables for employee service buybacks, deficiency reserves,
fiduciary self-insurance and OPEB expense. This may differ from the plan assets reported in the
funding actuarial valuation report.
(2) Net of administrative expenses.
Sensitivity of the Net Pension Liability to Changes in the Discount Rate
The following presents the net pension liability of the Plan as of the measurement date,
calculated using the discount rate of 7.65 percent, as well as what the net pension liability
would be if it were calculated using a discount rate that is 1 percentage-point lower
(6.65 percent) or 1 percentage-point higher (8.65 percent) than the current rate:
Discount Rate - 1%
6.65%
Current Rate - 1%
7.65%
Discount Rate + 1%
8.65%
111,893,568$ 74,715,970$ 43,917,470$
Recognition of Gains and Losses
Under GASB 68, gains and losses related to changes in total pension liability and fiduciary
net position are recognized in pension expense systematically over time.
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CITY OF MONROVIA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2016
Note 10: City Employees Retirement Plan (Defined Benefit Pension Plan) (Continued)
The first amortized amounts are recognized in pension expense for the year the gain or loss
occurs. The remaining amounts are categorized as deferred outflows and deferred inflows of
resources related to pensions and are to be recognized in future pension expense.
The amortization period differs depending on the source of the gain or loss:
Difference between projected and
actual earnings
5 year straight-line amortization
All other amounts Straight-line amortization over the
average expected remaining service
lives of all members that are provided
with benefits (active, inactive, and
retired) as of the beginning of the
measurement period
The expected average remaining service lifetime (EARSL) is calculated by dividing the total
future service years by the total number of plan participants (active, inactive, and retired).
The EARSL for the Plan for the 2014-15 measurement period is 3.8 years for safety
cost-sharing and 2.2 years for miscellaneous agent, which was obtained by dividing the total
service years of 467,023 safety and 1,308 miscellaneous (the sum of remaining service
lifetimes of the active employees) by 122,410 safety and 583 miscellaneous (the total number
of participants: active, inactive, and retired). Note that inactive employees and retirees have
remaining service lifetimes equal to 0. Also note that total future service is based on the
members’ probability of decrementing due to an event other than receiving a cash refund.
Pension Expense and Deferred Outflows and Deferred Inflows of Resources Related to Pensions
For the year ended June 30, 2016, the City recognized pension expense of $1,275,867 and
$3,110,976 for the miscellaneous and safety plans, respectively. At June 30, 2016, the City
reported deferred outflows of resources and deferred inflows of resources related to pensions
from the following sources:
Miscellaneous Agent Multiple-Employer Deferred Outflows of
Resources
Deferred Inflows of
Resources
Pension contributions subsequent to measurement date 2,888,235$ -$
Change in Assumptions - 1,053,284
Net Difference between Projected and Actual Experience - 966,193
Net Difference between Projected and Actual Earnings on
Pension Plan Investments - 654,475
Total Miscellaneous 2,888,235$ 2,673,952$
72
CITY OF MONROVIA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2016
Note 10: City Employees Retirement Plan (Defined Benefit Pension Plan) (Continued)
Safety Cost-Sharing Multiple-EmployerDeferred Outflows of
Resources
Deferred Inflows of
Resources
Pension contributions subsequent to measurement date 3,515,143$ -$
Change in Assumptions - 1,641,246
Net Difference between Projected and Actual Experience - 356,842
Net Difference between Projected and Actual Earnings on
Pension Plan Investments - 831,794
Adjustment due to Difference in Proportions 67,492 240,946
Adjustment due to Difference in Proportions contribution - 2,024,696
Total Safety 3,582,635$ 5,095,524$
Total PlansDeferred Outflows of
Resources
Deferred Inflows of
Resources
Pension contributions subsequent to measurement date 6,403,378$ -$
Change in Assumptions - 2,694,530
Net Difference between Projected and Actual Experience - 1,323,035
Net Difference between Projected and Actual Earnings on
Pension Plan Investments - 1,486,269
Adjustment due to Difference in Proportions 67,492 240,946
Adjustment due to Difference in Proportions contribution - 2,024,696
Total Safety 6,470,870$ 7,769,476$
$6,470,870 reported as deferred outflows of resources related to contributions
subsequent to the measurement date will be recognized as a reduction of the
net pension liability in the year ended June 30, 2016. Other amounts reported as
deferred outflows and deferred inflows of resources related to pensions will be
recognized in future pension expense as follows:
Measurement Period ended
June 30:
Deferred Outflows/(Inflows) of
Resources2016 (4,404,626)$
2017 (2,980,832)
2018 (2,084,421)
2019 1,767,895
73
CITY OF MONROVIA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2016
Note 10: City Employees Retirement Plan (Defined Benefit Pension Plan) (Continued)
Pension Plan Fiduciary Net Position
Detailed information about the Plan’s fiduciary net positions is available in the separately
issued CalPERS financial reports.
Note 11: Public Agency Retirement System (Defined Contribution Retirement Plan)
The City of Monrovia contributed to the California Public Agency Retirement System (PARS),
an agent multiple-employer public employee retirement system that acts as a common
investment and administrative agent for participating public entities within the State of
California. Benefit provisions and all other requirements are established by state statute and
City ordinance.
PARS is a defined contribution retirement plan that provides retirement benefits in return for
services rendered, provides an individual account for each participant, and specifies how
contributions to the individual's account are to be determined instead of specifying the
amount of benefits the individual is to receive.
Under a defined contribution pension plan, the benefits a participant will receive depend
solely on the amount contributed to the participant's account, the returns earned on
investments of those contributions, and forfeitures of other participant's benefits that may be
allocated to such participant's account.
As established by the plan, all eligible employees of the City will become a participant in the
plan from the date they are hired. An eligible employee is any employee who, at any time
during which the employer maintains this plan, is not accruing a benefit under the
Public Employees Retirement System (See Note 10).
Contributions made by an employee and the employer vest immediately. As determined by
the plan, each employee must contribute 3.75% of gross earnings to the plan. The City
contributes an additional 3.75% of gross earnings. The contributions requirements of plan
members and the City are established and may be amended by PARS.
During the year, the City contributed $32,816 (3.75% of current year covered payroll) and
employees contributed $32,816 (3.75% of current year covered payroll). The total covered
payroll of employees participating in the plan for the year ended June 30, 2016, was
$875,057.
No changes in plan provisions occurred during the year. The plan held no securities of the
City or other related parties during or at the close of the fiscal year.
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CITY OF MONROVIA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2016
Note 12: Other Post-Employment Employee Benefits
Plan Description
The City of Monrovia Retiree Healthcare Plan (Plan) is a single-employer defined benefit
healthcare plan administered by the City. The plan provides healthcare benefits to eligible
retirees and their dependents. Benefit provisions are established and may be amended
through agreements and memorandums of understanding between the City, its management
employees, and unions representing City employees. The Plan does not issue a financial
report.
The City provides retiree healthcare benefits to employees retiring directly from the City.
Medical coverage is provided through the City’s stand alone healthcare program. The City
reimburses retiree healthcare premiums, subject to caps which vary by bargaining unit and
length of service. Because retiree premiums are based on blended active and retiree
experience, an implied subsidy exists for retirees. No dental, vision or life insurance benefits
are provided. The City currently pays for retiree healthcare benefits on a pay-as-you-go
basis. As of January 1, 2014, plan membership consisted of 105 retirees and beneficiaries
currently receiving benefits.
Funding Policy
There is no statutory requirement for the City to prefund its OPEB obligation. The City has
currently chosen to pay plan benefits on a pay-as-you-go basis. There are no employee
contributions. Retired Plan members and their beneficiaries pay the annual premium cost not
paid by the employer. The General Fund has been used in prior years to liquidate the net
OPEB obligation. A contribution of $666,942 was made from the General Fund during the
2015-2016 fiscal year to cover current plan premiums.
Annual OPEB Cost and Net OPEB Obligation The City’s annual other postemployment benefit cost (expense) is calculated based on the
annual required contribution (ARC) of the employer. The ARC represents a level of funding
that, if paid on an ongoing basis, is projected to cover the normal cost each year and
amortize any unfunded actuarial liabilities (or funding excess) over a period not to exceed
30 years.
The following table, based on the City’s actuarial valuation as of January 1, 2014, shows the
components of the City’s annual OPEB cost for the year, the amount actually contributed to
the plan, and changes in the City’s Net OPEB obligation:
75
CITY OF MONROVIA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2016
Note 12: Other Post-Employment Employee Benefits (Continued)
Annual required contribution (ARC) 3,099,000$
Interest on net OPEB obligation 123,210
Adjustment to ARC (602,323)
Annual OPEB cost 2,619,887
Contributions made 666,942
(Decrease) increase in Net OPEB obligation 1,952,945
Net OPEB obligation (asset) - beginning of year 12,313,018
Net OPEB obligation (asset) - end of year 14,265,963$
The City’s annual OPEB cost, the percentage of annual OPEB cost contributed to the plan,
and the net OPEB obligation for fiscal year 2015-16 are as follows (dollar amounts in
thousands):
Actual Percentage
Fiscal Annual Contribution of Annual Net OPEB
Year OPEB (Net of OPEB Cost Obligation
End Cost Adjustments) Contributed (Asset)
6/30/2014 2,543$ 513$ 20.17% 10,408$
6/30/2015 2,458 554 22.54% 12,313
6/30/2016 2,620 667 25.46% 14,265
Funded Status and Funding Process
Actuarial valuations of an ongoing plan involve estimates of the value of reported amounts
and assumptions about the probability of occurrence of events far into the future. Examples
include assumptions about future employment, mortality, and the healthcare cost trend.
Amounts determined regarding the funded status of the plan and the annual required
contributions of the City are subject to continual revision as actual results are compared with
past expectations and new estimates are made about the future.
The schedule of funding progress below presents multiyear trend information about whether
the actuarial value of plan assets is increasing or decreasing over time relative to the
actuarial accrued liabilities for benefits. An actuarial is received every three years.
Unfunded UAAL as
Actuarial Actuarial Actuarial Actuarial a % of
Valuation Valuation Valuation of Accrued Accrued Funded Covered Covered Interest Salary
Type Date Assets Liability Liability Ratio Payroll Payroll Rate Scale
Actual 1/1/2010 -$ 28,308$ 28,308$ 0.0% 16,464$ 171.9% 4.25% 13.40%
Actual 1/1/2012 - 32,318 32,318 0.0% 17,192 188.0% 4.00% 15.10%
Actual 1/1/2014 - 35,109 35,109 0.0% 16,504 212.7% 4.00% 17.30%
Schedule of Funding Progress for OPEB
(Amounts in Thousands)
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CITY OF MONROVIA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2016
Note 12: Other Post-Employment Employee Benefits (Continued)
Actuarial Methods and Assumptions Projections of benefits for financial reporting purposes are based on the substantive plan
(the plan as understood by the employer and the plan members) and include the types of
benefits provided at the time of each valuation and the historical pattern of sharing of benefit
costs between the employer and plan members to that point. The actuarial methods and
assumptions used are consistent with the long-term perspective of the calculations.
For the January 1, 2014, actuarial valuation, the entry age normal actuarial cost method was
used. The actuarial assumptions included a 4.00% investment rate of return, which is the
expected long-term investment return on City investments, a 3% general inflation
assumption, an annual aggregate payroll increase rate of 3.25%, and an annual
pre-Medicare medical cost trend of 7.5% (HMO) and 7.8% (PPO) for 2016 decreasing to
5.0% after 5 years (the post-Medicare medical cost trend starts 0.4% higher for 2016). Other
assumptions include the Management/Mid-Management premium caps increasing at
MO trend rates, and the General/Fire/Police dollar caps having no increases. The UAAL is
being amortized as a level percentage of pay over 30 years on a closed basis, starting
June 30, 2008. As of June 30, 2016, 23 years have yet to be amortized.
The second City of Monrovia Retiree Healthcare Plan is a single employer defined
contribution retiree healthcare trust (Trust). The Trust provides healthcare benefits to eligible
retirees and their dependents. Benefit provisions are established and may be amended
through agreements and memorandums of understanding between the City, its management
employees, and unions representing City employees. Currently, management employees, the
general employees’ association, and the firefighter’s association participate in this plan. The
plan was effective February 1, 2009. All new employees starting after this date are
automatically enrolled in this Trust. Current employees, at the plan inception date, had the
option of enrolling in the new plan. The plan does not issue a financial report.
All employees in the Trust have contributions withheld from their biweekly paycheck and
deposited into a trust account. The City contributes a predefined amount based on the
employee's position title. A third party trust account was established with ICMA Retirement
Corporation to account for the funds. The funds are invested with the assistance of
Wells Fargo Insurance Services Investment Advisors, Inc. As of June 30, 2016, the plan
assets were $953,721.96.
Note 13: Risk Management Insurance Pool
a. Independent Cities Risk Management Authority (Authority) The City became members of the California Joint Powers Insurance Authority
July 1, 2015, as noted in Part B. The City is still responsible for all tail claims related to
their former self-insured programs. The City of Monrovia was self-insured for its general
liability program for the first $300,000 of each general liability loss and is a member of the
Independent Cities Risk Management Authority (Authority) for excess coverage up to
$30 million per occurrence. An amount attributable to claims incurred but not reported
has been included based upon an actuarial study. The City was also self-insured for
worker's compensation program for the first $750,000 of each claim. The City also
purchased excess coverage for workers’ compensation from the Authority for claims up
to $100 million per occurrence.
Estimates for all liabilities, up to the self-insured levels, have been accrued in the
Workers' Compensation and the Liability Insurance Funds. These funds also include an
estimate for incurred but not reported claims. As of June 30, 2016, total estimated claims
payable for workers' compensation and general liability were $1,843,195 and $131,682,
respectively.
77
CITY OF MONROVIA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2016
Note 13: Risk Management Insurance Pool (Continued)
The Authority is comprised of 21 Southern California cities, and each member city has a
representative on the governing board. The comprehensive general liability insurance
includes monetary damages for personal liability, property damage and public officials'
errors and omissions. Deposits made to the Authority are based on losses incurred by
the insured, and rebates are possible if the losses are minimal. Changes in the balances
of claims liabilities for the years ended June 30, 2014 through 2016, were as follows:
Year
Ended
June 30,
Balance
July 1,
Claims
Increases
Claims
Decreases
Balance
June 30,
Due Within
One Year
2014 4,956,404$ 972,720$ (506,673)$ 5,422,451$ 530,233$
2015 5,422,451 1,179,149 (808,245) 5,793,355 861,959
2016 5,793,355 - (3,818,478) 1,974,877 1,158,891
b. California Joint Powers Insurance Authority (Authority) Beginning July 1, 2015 the City of Monrovia became a member of California Joint Powers
Insurance Authority (Authority). The Authority is composed of 116 California public
entities and is organized under a joint powers agreement pursuant to California
Government Code §6500 et seq. The purpose of the Authority is to arrange and
administer programs for the pooling of self-insured losses, to purchase excess insurance
or reinsurance, and to arrange for group purchased insurance for property and other lines
of coverage. The California JPIA began covering claims of its members in 1978. Each
member government has an elected official as its representative on the Board of
Directors. The Board operates through a nine-member Executive Committee.
Liability
In the liability program claims are pooled separately between police and general
government exposures. (1) The payroll of each member is evaluated relative to the
payroll of other members. A variable credibility factor is determined for each member,
which establishes the weight applied to payroll and the weight applied to losses within the
formula. (2) The first layer of losses includes incurred costs up to $30,000 for each
occurrence and is evaluated as a percentage of the pool’s total incurred costs within the
first layer. (3) The second layer of losses includes incurred costs from $30,000 to
$750,000 for each occurrence and is evaluated as a percentage of the pool’s total
incurred costs within the second layer. (4) Incurred costs from $750,000 to $50 million,
are distributed based on the outcome of cost allocation within the first and second loss
layers.
For 2015-16 the Authority’s pooled retention is $2 million per occurrence, with
reinsurance to $20 million, and excess insurance to $50 million. The Authority’s
reinsurance contracts are subject to the following additional pooled retentions: (a) $2.5
million annual aggregate deductible in the $3 million x/s $2 million layer, and (b) $3
million annual aggregate deductible in the $5 million x/s $10 million layer. There is a third
annual aggregate deductible in the amount of $2.5 million in the $5 million x/s $5 million
layer, however it is fully covered under a separate policy and therefore not retained by
the Authority.
The overall coverage limit for each member, including all layers of coverage, is $50
million per occurrence. Costs of covered claims for subsidence losses have a sub-limit of
$30 million per occurrence.
78
CITY OF MONROVIA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2016
Note 13: Risk Management Insurance Pool (Continued)
Workers’ Compensation
In the workers’ compensation program, claims are pooled separately between public
safety (police and fire) and general government exposures. (1) The payroll of each
member is evaluated relative to the payroll of other members. A variable credibility factor
is determined for each member, which establishes the weight applied to payroll and the
weight applied to losses within the formula. (2) The first layer of losses includes incurred
costs up to $50,000 for each occurrence and is evaluated as a percentage of the pool’s
total incurred costs within the first layer. (3) The second layer of losses includes incurred
costs from $50,000 to $100,000 for each occurrence and is evaluated as a percentage of
the pool’s total incurred costs within the second layer. (4) Incurred costs from $100,000 to
statutory limits are distributed based on the outcome of cost allocation within the first and
second loss layers.
For 2015-16, the Authority’s pooled retention is $2 million per occurrence, with
reinsurance to statutory limits under California Workers’ Compensation Law. Employer’s
Liability losses are pooled among members to $2 million. Coverage from $2 million to
$5 million is purchased as part of a reinsurance policy and Employer’s Liability losses
from $5 million to $10 million are pooled among members.
Pollution Legal Liability Insurance
The City of Monrovia participates in the pollution legal liability insurance program, which
is available through the Authority. The policy covers sudden and gradual pollution of
scheduled property, streets, and storm drains owned by the City of Monrovia. Coverage
is on a claims-made basis. There is a $50,000 deductible. The Authority has a limit of
$50 million for the 3-year period from July 1, 2014 through July 1, 2017. Each member of
the Authority has a $10 million sub-limit during the 3-year term of the policy.
Property Insurance
The City of Monrovia participates in the all-risk property protection program of the
Authority. This insurance protection is underwritten by several insurance companies. City
of Monrovia property is currently insured according to a schedule of covered property
submitted by the City of Monrovia to the Authority. City of Monrovia property currently has
all-risk property insurance protection in the amount of $59,597,142. There is a $5,000
deductible per occurrence except for non-emergency vehicle insurance, which has a
$1,000 deductible. Premiums for the coverage are paid annually and are not subject to
retrospective adjustments.
Crime Insurance
The City of Monrovia purchased crime insurance coverage in the amount of $1,000,000
with a $2,500 deductible. The fidelity coverage is provided through the Authority.
Premiums are paid annually and are not subject to retrospective adjustments.
79
CITY OF MONROVIA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2016
Note 14: Property Taxes
Under California law, property taxes are assessed and collected by the counties up to 1% of
assessed value, plus other increases approved by the voters. Property taxes go into a pool,
and are then allocated to the cities based on complex formulas.
Accordingly, the City of Monrovia accrues only those taxes, which are received within
60 days after year-end.
Lien Date:
Levy Date:
Due Date:
Collection Dates:
January 1
June 30
November 1, February 1
December 10, April 10
Note 15: Commitments and Contingencies
The following material commitments existed at June 30, 2016:
Project Name Contract Amount
Remaining
Commitments
Monrovia Renewal Water Improvements 435,120$ 435,120$
Monrovia Renewal Sidewalk Services 309,116 309,116
Main San Gabriel Basin Water Rights 348,500 348,500
Total Construction Commitments 1,092,736$ 1,092,736$
Claims and suits have been filed against the City in the normal course of business. Based
upon information received from the City Attorney and the self-insurance administrator, the
estimated liability under such claims would be adequately covered by self-insurance reserves
and insurance coverage.
Note 16: Extraordinary Gain/Loss
During fiscal year 2014-2015, a Low-Mod Housing loan to the General Fund for $467,831
was reversed, based on the State Controller’s Asset Transfer Review Report, dated
December 31, 2014. Due to laws enacted because of the dissolution of redevelopment
agencies, the City was not able to transfer the land back until the current fiscal year to the
General Fund. The City setup an allowance for adjustment to market value in the amount of
$114,041. This results in an extraordinary gain to the City and loss to the Housing Successor
in the amount of $353,790.
80
CITY OF MONROVIA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2016
Note 17: Successor Agency Trust For Assets of Former Redevelopment Agency
On December 29, 2011, the California Supreme Court upheld Assembly Bill 1X 26 (“the Bill”)
that provides for the dissolution of all redevelopment agencies in the State of California. This
action impacted the reporting entity of the City that previously had reported a redevelopment
agency within the reporting entity of the City as a blended component unit.
After enactment of the law, which occurred on June 28, 2011, redevelopment agencies in the
State of California cannot enter into new projects, obligations or commitments. Subject to the
control of a newly established oversight board, remaining assets can only be used to pay
enforceable obligations in existence at the date of dissolution (including the completion of any
unfinished projects that were subject to legally enforceable contractual commitments).
Successor agencies will only be allocated revenue in the amount that is necessary to pay the
estimated annual installment payments on enforceable obligations of the former
redevelopment agency until all enforceable obligations of the prior redevelopment agency
have been paid in full and all assets have been liquidated.
The Bill directs the State Controller of the State of California to review the propriety of any
transfers of assets between redevelopment agencies and other public bodies that occurred
after January 1, 2011. If the public body that received such transfers is not contractually
committed to a third party for the expenditure or encumbrance of those assets, the
State Controller is required to order the available assets to be transferred to the public body
designated as the successor agency by the Bill.
In accordance with the timeline set forth in the Bill (as modified by the California Supreme
Court on December 29, 2011) all redevelopment agencies in the State of California were
dissolved and ceased to operate as a legal entity as of February 1, 2012. The following are
the balances for the Successor Agency of the former Redevelopment Agency.
a. Cash and Investments Cash and investments reported in the accompanying financial statements consisted of
the following:
Cash and investments pooled with the City 7,471,989$
Cash and investments with fiscal agent 3,252,651
10,724,640$
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CITY OF MONROVIA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2016
Note 17: Successor Agency Trust For Assets of Former Redevelopment Agency (Continued)
b. Loans Receivable
The following loans receivable were transferred from the Redevelopment Agency to the
Successor Agency as of February 1, 2012, as a result of the dissolution:
The Agency has issued a 30-year low interest loan of $120,000 at 5%
for rehabilitation of commercial property into a senior citizen apartment
complex secured by a second trust deed on the property. Loan
payments are based on residual receipts and interest has accrued
since March 1, 1994. As of June 30, 2016, the balance including
interest was: 365,821$
The Agency issued a long-term note receivable due from Merengue
Bakery (A&M Hospitality, LLC) for $75,000 on March 27, 2008. The
money will be used for exterior rehabilitation and the addition of a
grease interceptor. The full loan amount is due at the end of three
years (February 4, 2011). At the election of A&M Hospitality, LLC, the
loan may be extended for an additional 7 year term. The loan will be
fully amortized over the 7 years and will bear an interest rate of 7%.
The balance of the loan outstanding as of June 30, 2016, was: 89,875
The Agency loaned funds to owners or tenants of commercial
structures within Project Area No. 1. On June 2, 2009, the Agency
issued a Note Receivable to London Gastropub, Inc. in the amount of
$150,000 to install a grease inceptor and make storefront
improvements. The disbursement of funds is as follows: $50,000 within
three working days after satisfaction of the Conditions to Disbursement
in the agreement, $40,000 disbursed upon July 1, 2010, $30,000 upon
July 1, 2011 and $30,000 upon July 1, 2012. Repayment of the note is
not due until December 31, 2017 at which time the unpaid balance,
principal amount less the amount that has been generated back to the
City through sales tax, will be due and payable. As of June 30, 2016,
the balance of the loan outstanding, less sales tax generated back to
the City of $13,061, was: 87,574
82
CITY OF MONROVIA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2016
Note 17: Successor Agency Trust For Assets of Former Redevelopment Agency (Continued)
The Agency issued a Note Receivable to T. Phillips, Inc. in the amount
of $1,500,000 of which $25,000 was paid during escrow. The note
bears interest, compounded annually, as follows: 2% per annum for
year one and two; 3.5% per annum for year three and four; 5.5% per
annum for year five and six; and 7.5% per annum on year seven.
Interest payments due during the first two years of the agreement are to
be deferred, and not due until after 84 months, the term of the note. As
of June 30, 2016, the balance of the loan outstanding, including the
deferred interest amount of $87,760, was: 1,562,760
Total Loans Receivable: 2,106,030$
c. Capital Assets
An analysis of capital assets as of June 30, 2016, follows:
Beginning Ending
Balance Additions Deletions Balance
Fiduciary Activities:
Capital assets, not being depreciated:
Land 400,638$ -$ -$ 400,638$
Total Capital Assets,
Not Being Depreciated 400,638 - - 400,638
Capital assets, being depreciated:
Structures & Improvements 2,353,532 - - 2,353,532
Equipment, furniture, and vehicles 7,145 - - 7,145
Total Capital Assets,
Being Depreciated 2,360,677 - - 2,360,677
Less accumulated depreciation:
Machinery and equipment 628,990 47,071 - 676,061
Vehicles 7,145 - - 7,145
Total Accumulated
Depreciation 636,135 47,071 - 683,206
Total Capital Assets,
Being Depreciated, Net 1,724,542 (47,071) - 1,677,471
Governmental Activities
Capital Assets, Net 2,125,180$ (47,071)$ -$ 2,078,109$
83
CITY OF MONROVIA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2016
Note 17: Successor Agency Trust For Assets of Former Redevelopment Agency (Continued)
d. Long-Term Debt
The following is a summary of changes in the Successor Agency long-term debt for the
year ended June 30, 2016.
Balance
July 1, 2015 Additions Repayments
Balance
June 30, 2016
Due Within
One Year
Fiduciary Activities
Successor Agency of the
Former RDA
Tax allocation bonds:
2006A Tax Allocation Refunding Bonds 18,775,000$ -$ 18,775,000$ -$ -$
2006B Tax Allocation Bonds 3,400,000 - 3,400,000 - -
2007 Tax Allocation Bonds 4,200,000 - 245,000 3,955,000 255,000
2011 Housing Tax Allocation Bonds 6,415,000 - 440,000 5,975,000 455,000
2012 Subordinate Tax Allocation Refunding Bonds 11,710,000 - 695,000 11,015,000 725,000
2013A Subordinate Tax Allocation Refunding Bonds 10,890,000 - 1,025,000 9,865,000 1,045,000
2013B Subordinate Tax Allocation Refunding Bonds 3,515,000 - 365,000 3,150,000 380,000
2015A Tax Allocation Refunding Bond - 19,770,000 785,000 18,985,000 965,000
2015B Tax Allocation Refunding Bond - 3,890,000 25,000 3,865,000 30,000
Other long term liabilities:
Due to Other Governments 5,281,167 - - 5,281,167 -
Total $ 64,186,167 $ 23,660,000 $ 25,755,000 62,091,167 $ 3,855,000
Unamortized Premiums/(Discounts) 927,619
Total Long-term Debt 63,018,786$
A description of the individual issues of bonds of the Successor Agency of the Former
Redevelopment Agency outstanding as of June 30, 2016, follows:
2006 A Taxable Tax Allocation Refunding Bonds
On May 11, 2006, the Agency issued Central Redevelopment Project Area No. 1 Tax
Allocation Refunding bonds in the amount of $23,450,000. The proceeds of the bonds
were used to pay off the loan agreement with Zions First National Bank in the amount of
$3,675,000 and the Agency’s $20,585,000 Subordinate Taxable Tax Allocation
Refunding Bonds, Issue of 1998A currently outstanding in the principal amount of
$17,775,000 with a loss on defeasance of $1,048,613 which will be amortized over the
life of the 2006A Tax Allocation Refunding Bonds.
The 2006A Bonds are subject to mandatory redemption from sinking account payments,
in part by lot, on May 1, 2017, for the 2023 Term Bonds and May 1, 2024, for the
2028 Term Bonds and on each May 1 thereafter at a redemption price equal to the
principal amount thereof plus accrued interest to the redemption date, without premium.
The bonds mature between 2007 and 2016, with principal payments ranging from
$495,000 to $665,000 and interest rates from 5.380% to 5.820%. Term bonds in the
amount of $5,960,000 mature on May 1, 2023, and bear interest of 6.150%. Term bonds
in the amount of $12,150,000 mature on May 1, 2028, and bear interest of 6.280%.
This bond was refunded during the current year with the issuance of the 2015A and
2015B Tax Allocation Refunding Bonds.
84
CITY OF MONROVIA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2016
Note 17: Successor Agency Trust For Assets of Former Redevelopment Agency (Continued)
2006 B Tax Allocation Bonds
On May 11, 2006, the Agency issued Central Redevelopment Project Area No. 1 Tax
Allocation bonds in the amount of $3,400,000 for the purpose of providing moneys to
finance the Redevelopment Plan. The Term Bond of $3,400,000 matures on
May 1, 2036, bearing interest of 4.750%.
This bond was refunded during the current year with the issuance of the 2015A and
2015B Tax Allocation Refunding Bonds.
2007 Taxable Tax Allocation Bonds
On April 1, 2007, the Agency issued Central Redevelopment Project Area No. 1 Taxable
Tax Allocation Bonds in the amount of $5,750,000. The proceeds of the bonds were used
to provide moneys to finance the Redevelopment Plan to acquire land to serve
approximately an 80-acre Transit Village, also known as “Station Square.”
The term bonds mature on May 1, 2012, and bear interest at rates ranging from 5.03% to
5.94%. Interest is payable semi-annually on May 1 and November 1. The bonds are
subject to optional redemption prior to maturity in whole or in part on May 1, 2017, and on
each interest day thereafter at a price equal to the principal amount, plus accrued interest
to the redemption date. The bonds are secured by a pledge of tax increment revenue
from Project Area 1 and by interest earned from the investment of proceeds of the bond
issue. The balance outstanding at June 30, less unamortized original issue discount and
the remaining debt service payments are as follows:
Principal Interest
2017 255,000$ 227,253$
2018 270,000 213,738
2019 285,000 198,213
2020 300,000 181,826
2021 320,000 164,576
2022 - 2026 1,905,000 523,878
2027 - 2031 490,000 121,283
2032 - 2036 115,000 19,899
2037 15,000 891
Total 3,955,000$ 1,651,557$
2007 Taxable Tax Allocation BondsYear Ending
June 30,
85
CITY OF MONROVIA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2016
Note 17: Successor Agency Trust For Assets of Former Redevelopment Agency (Continued)
2011 Housing Tax Allocation Bonds On April 12, 2011, the former Agency issued Central Redevelopment Project, Project
Area No. 1, Housing Tax Allocation Bonds, Issue of 2011 in the amount of $8,000,000.
The proceeds of the bonds were issued to finance low and moderate-income housing
projects pursuant to the Redevelopment Plan. Term bonds of $2,110,000 mature at
May 1, 2026 bearing interest of 6.72%. Term bonds of $1,325,000 mature at
May 1, 2036 bearing interest of 7.08%. The balance outstanding at June 30, less
outstanding original discount and the remaining debt service payments are as follows:
Principal Interest
2017 455,000$ 368,963$
2018 480,000 346,213
2019 505,000 321,013
2020 535,000 293,238
2021 565,000 262,475
2022 - 2026 2,110,000 813,000
2026 - 2031 825,000 393,990
2032 - 2036 500,000 71,070
Totals 5,975,000$ 2,869,962$
2011 Housing Tax Allocation
Bonds Year Ending
June 30,
2012 Subordinate Tax Allocation Refunding Bonds
On February 13, 2013, the Successor Agency issued Central Redevelopment Project,
Project Area No. 1, Subordinate Tax Allocation Refunding Bonds, Issue of 2012 in the
amount of $13,330,000. The proceeds of the bonds were issued on a subordinate basis
to previously issued 1998B Bonds, 2002 Bonds, 2003 Bonds, 2006A Bonds, 2007 Bonds,
and 2011 Bonds, all issued to either refinance existing debt or to finance low and
moderate income housing projects pursuant to the Redevelopment Plan. The Bonds are
being issued to refinance the prior Agency’s previously issued $11,750,000 Central
Redevelopment Project, Project Area No. 1 2007 Notes. The Bonds are subject to
optional redemption prior to maturity, in whole or part, on August 1, 2022 and any date
thereafter. Term bonds of $4,040,000 mature August 1, 2026 bearing interest of 4.15%.
Term bonds of $1,270,000 mature August 1, 2036 bearing interest of 4.7%. The balance
outstanding as of June 30, less outstanding original premium and the remaining debt
service payments are as follows:
86
CITY OF MONROVIA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2016
Note 17: Successor Agency Trust For Assets of Former Redevelopment Agency (Continued)
Principal Interest
2017 725,000$ 463,963$
2018 755,000 434,363
2019 785,000 403,563
2020 815,000 371,563
2021 845,000 341,531
2022 - 2026 4,735,000 1,173,700
2027 - 2031 1,890,000 237,250
2032 - 2036 380,000 70,750
2037 85,000 2,125
Totals 11,015,000$ 3,498,808$
2012 Subordinate Tax Allocation
Refunding Bonds Year Ending
June 30,
2013A Subordinate Tax Allocation Refunding Bonds
On October 16, 2013, the Successor Agency issued Central Redevelopment Project,
Project Area No. 1, Subordinate Tax Allocation Refunding Bonds, Issue of 2013A in the
amount of $12,000,000. The proceeds of the bonds were issued on a subordinate basis
to previously issued 2006A Bonds, 2006B Bonds, 2007 Bonds, and 2011 Bonds, all
issued to either refinance existing debt or to finance low and moderate income housing
projects pursuant to the Redevelopment Plan. The Bonds are being issued to refinance
the prior Agency’s previously issued $15,160,000 Central Redevelopment Project,
Project Area No. 1, Subordinate Tax Allocation Refunding Bonds, Issue of 1998B and
$9,100,000 Central Redevelopment Project, Project Area No. 1, Subordinate Tax
Allocation Refunding Bonds, Issue of 2002. This advance refunding was undertaken to
reduce total debt service payments over the next 9 years by $2,500,300 and to obtain an
economic gain (difference between the present value of the debt service payments of the
refunded and refunding bonds) of $1,003,567. The Bonds are not subject to redemption
prior to maturity, on August 1, 2023, and bear interest at rates ranging from 3.00% to
5.00%. Interest is payable semi-annually on February 1 and August 1. The balance
outstanding as of June 30, less outstanding original premium and the remaining debt
service payments are as follows:
Principal Interest
2017 1,045,000$ 450,900$
2018 1,100,000 408,000
2019 1,135,000 357,625
2020 1,190,000 299,500
2021 1,250,000 238,500
2022 - 2024 4,145,000 317,625
Totals 9,865,000$ 2,072,150$
2013A Subordinate Tax Allocation
Refunding Bonds Year Ending
June 30,
87
CITY OF MONROVIA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2016
Note 17: Successor Agency Trust For Assets of Former Redevelopment Agency (Continued)
2013B Subordinate Tax Allocation Refunding Bonds
On October 16, 2013, the Successor Agency issued Central Redevelopment Project,
Project Area No. 1, Subordinate Tax Allocation Refunding Bonds, Issue of 2013B in the
amount of $3,920,000. The proceeds of the bonds were issued on a subordinate basis to
previously issued 2006A Bonds, 2006B Bonds, 2007 Bonds, and 2011 Bonds, all issued
to either refinance existing debt or to finance low and moderate income housing projects
pursuant to the Redevelopment Plan. The Bonds are being issued to refinance the prior
Agency’s previously issued $6,000,000 Central Redevelopment Project, Project Area
No. 1, Taxable Tax Allocation Refunding Bonds, Issue of 2003. This advance refunding
was undertaken to reduce total debt service payments over the next 9 years by $228,430
and to obtain an economic gain (difference between the present value of the debt service
payments of the refunded and refunding bonds) of $123,568. The Bonds are subject to
mandatory sinking account redemption prior to maturity, on August 1, 2023, and bear
interest at rates ranging from 1.38% to 4.00%. Interest is payable semi-annually on
February 1 and August 1. Term bonds of $1,140,000 mature August 1, 2023 bearing
interest of 4.95%. The balance outstanding as of June 30, less outstanding original
premium and the remaining debt service payments are as follows:
Year Ending
June 30, Principal Interest
2017 380,000$ 118,366$
2018 385,000 107,518
2019 400,000 94,743
2020 415,000 79,546
2021 430,000 62,750
2022 - 2024 1,140,000 71,963
Totals 3,150,000$ 534,886$
2013B Subordinate Tax Allocation
Refunding Bonds
88
CITY OF MONROVIA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2016
Note 17: Successor Agency Trust For Assets of Former Redevelopment Agency (Continued)
2015A Taxable Allocation Refunding Bonds
On December 2, 2015, the Successor Agency issued Central Redevelopment Project,
Project Area No. 1, Taxable Tax Allocation Refunding Bonds, Issue of 2015A in the
amount of $19,770,000. The proceeds of the bonds, together with other funds on hand,
are to refund on an advance basis $18,540,000 in outstanding principal amount of the
Prior Agency’s previously issued $23,450,000 Central Redevelopment Project,
Project Area No. 1, Taxable Tax Allocation Refunding Bonds, Issue of 2006A, currently
outstanding in the principal amount of $18,775,000. As a result, the refunded bonds
defeased and the liability of the 2006A Taxable Allocation Bonds have been removed
from long-term debt. The refunding resulted in an economic gain of $4,050,500. The
2015A Taxable Allocation Refunding Bonds bear interest at rates ranging from 1.50% to
4.00%. Interest is payable semi-annually on May 1 and November 1. The balance
outstanding as of June 30, less outstanding original premium and the remaining debt
service payments are as follows:
Year Ending
June 30, Principal Interest
2017 965,000$ 640,011$
2018 990,000 620,711
2019 1,000,000 600,911
2020 1,030,000 575,911
2021 1,065,000 549,131
2022 - 2026 12,900,000 1,943,081
2027 1,035,000 62,600
Totals 18,985,000$ 4,992,356$
2015A Taxable Tax Allocation
Refunding Bonds
2015B Taxable Allocation Refunding Bonds
On December 2, 2015, the Successor Agency issued Central Redevelopment Project,
Project Area No. 1, Taxable Tax Allocation Refunding Bonds, Issue of 2015 in the
amount of $3,890,000. The proceeds of the bonds, together with other funds on hand,
are to refund on an advance basis the remaining portion of the outstanding 2006A Bonds
in aggregate principal amount of $235,000, and refund on an advance basis all amounts
payable pursuant to the Prior Agency’s previously issued $3,400,000
Central Redevelopment Project, Project Area No. 1, Tax Allocation Bonds, Issue of
2006B, currently outstanding in the principal amount of $3,400,000. As a result, the
refunded bonds are defeased and the liability of the 2006B Taxable Allocation Bonds
have been removed from long-term debt. The refunding resulted in an economic gain of
$178,756. The 2015B Taxable Allocation Refunding Bonds bear interest at rates ranging
from 2.20% to 4.00%. Interest is payable semi-annually on May 1 and November 1. The
balance outstanding as of June 30, less outstanding original premium and the remaining
debt service payments are as follows:
89
CITY OF MONROVIA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2016
Note 17: Successor Agency Trust For Assets of Former Redevelopment Agency (Continued)
Year Ending
June 30, Principal Interest
2017 30,000$ 132,645$
2018 30,000 131,745
2019 30,000 130,545
2020 35,000 129,345
2021 35,000 127,945
2022 - 2026 280,000 621,795
2027 - 2031 2,405,000 505,750
2032 - 2036 1,020,000 60,725
Totals 3,865,000$ 1,840,495$
2015B Taxable Tax Allocation
Refunding Bonds
e. Due to Other Governments
In an agreement dated July 24, 1990, between the Agency, the City of Monrovia, the
Flood Control District of Los Angeles County (District) and the County of Los Angeles
(County), the Agency agreed to pay to the County and District a portion of tax increment
revenue received. The Agency is entitled to the first $3,000,000 of tax increment revenue
in each fiscal year. The County and District shall receive 48.25% and 1.70%,
respectively, of the tax increment revenue in excess of $3,000,000. These payments are
subordinate to certain debt service of the Agency. Per the terms of the agreement,
payments for the first ten years were allowed to be deferred, interest free, and are due at the end of the life of the redevelopment plan. The outstanding balance of these deferred
payments as of June 30, 2016, was $5,281,167.
f. Pledged Revenue
The City pledged, as security for bonds issued, either directly or through the
Financing Authority, a portion of tax increment revenue (including Low and Moderate
Income Housing set-aside and pass through allocations) that it receives. The bonds
issued were to provide financing for various capital projects, accomplish Low and
Moderate Income Housing projects and to defease previously issued bonds. Assembly
Bill 1X 26 provided that upon dissolution of the Redevelopment Agency, property taxes
allocated to redevelopment agencies no longer are deemed tax increment but rather
property tax revenues and will be allocated first to successor agencies to make payments
on the indebtedness incurred by the dissolved redevelopment agency. Total principal and
interest remaining on the debt is $79,551,381 with annual debt service requirements as
indicated above. For the current year, the total property tax revenue recognized by the
Successor Agency for the payment of indebtedness incurred by the dissolved
redevelopment agency was $4,217,748 and the debt service obligation on the bonds was
$5,608,512.
g. Insurance
The Successor Agency is covered under the City’s insurance policies. Therefore, the
limitation and self-insured retentions applicable to the City also apply to the
Successor Agency. Additional information as to coverage and self-insured retentions can
be found in Note 13.
90
CITY OF MONROVIA
AGENT MULTIPLE-EMPLOYER MISCELLANEOUS PLANSCHEDULE OF CHANGES IN THE NET PENSION LIABILITY AND RELATED RATIOSAS OF JUNE 30, FOR THE LAST TEN FISCAL YEARS (1)
2016 2015Total Pension LiabilityService cost 1,785,034$ 1,945,825$ Interest on total pension liability 7,805,621 7,606,239 Differences between expected and actual experience (1,771,353) - Changes in assumptions (1,931,021) - Benefit payments, including refunds of employee contributions (5,356,957) (4,946,152) Net change in total pension liability 531,324 4,605,912 Total pension liability - beginning 107,522,595 102,916,683 Total pension liability - ending (a) 108,053,919$ 107,522,595$
Plan Fiduciary Net PositionContributions - employer 2,546,716$ 2,375,009$ Contributions - employee 924,253 911,780 Difference in projected and actual earnings (3,734,084) - Net investment income 5,319,716 10,617,828 Benefit payments (5,356,957) (4,946,152) Administration Expense (79,175) - Net change in plan fiduciary net position (379,531) 8,958,465 Plan fiduciary net position - beginning 70,578,785 61,620,320 Plan fiduciary net position - ending (b) 70,199,254$ 70,578,785$
Net pension liability - ending (a)-(b) 37,854,665$ 36,943,810$
Plan fiduciary net position as a percentage of the total pension liability 64.97% 65.64%
Covered-employee payroll 8,746,943$ 9,433,771$
Net pension liability as a percentage of covered-employee payroll 432.78% 391.61%
Notes to Schedule:
Changes of Assumptions: The discount rate was changed from 7.5 percent (net of administration expense) to 7.65 percent.
(1) Fiscal Year 2015 was the first year of implementation, therefore two years are shown.
Benefit Changes: The figures above do not include any liability impact that may have resulted from plan changes whichoccurred after the June 30, 2014 valuation date. This applies for voluntary benefit changes as well as any offers of Two YearsAdditional Service Credit (a.k.a. Golden Handshakes).
92
CITY OF MONROVIA
AGENT MULTIPLE-EMPLOYER MISCELLANEOUS PLANSCHEDULE OF CONTRIBUTIONSAS OF JUNE 30, FOR THE LAST TEN FISCAL YEARS (1)
2016 2015
MISCELLANEOUS CLASSIC:Actuarially Determined Contribution 2,454,498$ 2,360,528$ Contribution in Relation to the Actuarially Determined Contributions (2,454,498) (2,360,528) Contribution Deficiency (Excess) -$ -$
Covered-Employee Payroll 7,430,056$ 8,058,826$
Contributions as a Percentage of Covered-Employee Payroll 33.03% 29.29%
MISCELLANEOUS CLASSIC:Actuarially Determined Contribution 433,737$ 186,188$ Contribution in Relation to the Actuarially Determined Contributions (433,737) (186,188) Contribution Deficiency (Excess) -$ -$
Covered-Employee Payroll 1,392,194$ 688,117$
Contributions as a Percentage of Covered-Employee Payroll 31.15% 27.06%
Note to Schedule:
Valuation Date: June 30, 2013
Methods and assumptions used to determine contribution rates:Single and Agent Employers Entry age normalAmortization method Level Percent of PayrollAssets valuation method Market valueInflation 2.75%Salary Increases 3.00%Investment rate of return
Retirement age
Mortality RP-2000 Heath Annuitant Mortality Table
The probabilities of Retirement are based on the 2010 CalPERS Experience Study for the period from 1997 to 2007.
7.50% Net of Pension Plan Investment and Administrative Expenses; includes Inflation.
(1) Historical information is required only for measurement for which GASB 68 is applicable. Fiscal Year 2015 was the first year of implementation, therefore only two years are shown.
93
CITY OF MONROVIA
COST-SHARING MULTIPLE EMPLOYER SAFETY PLANSSCHEDULE OF PROPORTIONATE SHARE OF THE NET PENSION LIABILITYAS OF JUNE 30, FOR THE LAST TEN FISCAL YEARS (1)
2016 2015SAFETY CLASSIC:Proportion of the Net Pension Liability 0.53704% 0.49830%
Proportionate Share of the Net Pension Liability 36,862,123$ 31,006,504$
Covered-Employee Payroll 7,473,575$ 9,306,810$
Proportionate Share of the Net Pension Liability as Percentage of Covered-Employee Payroll 493.23% 333.16%
PEPRA SAFETY POLICE PLAN:Proportion of the Net Pension Liability 0.00000%
Proportionate Share of the Net Pension Liability (537)$
Covered-Employee Payroll 387,619$
Proportionate Share of the Net Pension Liability as Percentage of Covered-Employee Payroll -0.14%
SAFETY PEPRA:Proportion of the Net Pension Liability 0.00000%
Proportionate Share of the Net Pension Liability $ (281)
Covered-Employee Payroll 148,161$
Proportionate Share of the Net Pension Liability as Percentage of Covered-Employee Payroll -0.19%
Plan Fiduciary Net Position as a Percentage of the TotalPension Liability 79.82% 78.40%
Notes to Schedule:
Changes of Assumptions: The discount rate was changed from 7.5 percent (net of administration expense) to 7.65 percent.
Benefit Changes: The figures above do not include any liability impact that may have resulted from plan changes whichoccurred after the June 30, 2014 valuation date. This applies for voluntary benefit changes as well as any offers of Two YearsAdditional Service Credit (a.k.a. Golden Handshakes).
(1) Historical information is required only for measurement for which GASB 68 is applicable. Fiscal Year 2015 was the first year of implementation, therefore two years are shown.
94
CITY OF MONROVIA
COST-SHARING MULTIPLE EMPLOYER SAFETY PLANSSCHEDULE OF CONTRIBUTIONSAS OF JUNE 30, FOR THE LAST TEN FISCAL YEARS (1)
2016 2015
SAFETY CLASSIC:Actuarially Determined Contribution 3,407,303$ 2,601,155$ Contribution in Relation to the Actuarially Determined Contributions (3,407,303) (2,601,155) Contribution Deficiency (Excess) -$ -$
Covered-Employee Payroll 7,382,545$ 7,473,575$
Contributions as a Percentage of Covered-Employee Payroll 46.15% 34.80%
SAFETY FIRE PEPRA:Actuarially Determined Contribution 71,388$ 54,048$ Contribution in Relation to the Actuarially Determined Contributions (71,388) (54,048) Contribution Deficiency (Excess) -$ -$
Covered-Employee Payroll 515,112$ 387,619$
Contributions as a Percentage of Covered-Employee Payroll 13.86% 13.94%
SAFETY POLICE PEPRA:Actuarially Determined Contribution 36,452$ 19,499$ Contribution in Relation to the Actuarially Determined Contributions (36,452) (19,499) Contribution Deficiency (Excess) -$ -$
Covered-Employee Payroll 263,859$ 148,161$
Contributions as a Percentage of Covered-Employee Payroll 13.81% 13.16%
Note to Schedule:
Valuation Date: June 30, 2013
Methods and assumptions used to determine contribution rates:Single and Agent Employers Entry age normalAmortization method Level percentage of payroll, closed 20 yearsAssets valuation method Market valueInflation 2.75%Salary Increases
Investment rate of return
Retirement age 50 and 57 yearsMortality RP-2000 Heath Annuitant Mortality Table
3.30% to 14.20% depending on age, service, and type of employment7.50% Net of Pension Plan Investment and Administrative Expenses; includes Inflation
(1) Historical information is required only for measurement for which GASB 68 is applicable. Fiscal Year 2015 was the first year of implementation, therefore only two years are shown.
95
CITY OF MONROVIA
BUDGETARY COMPARISON SCHEDULE BY DEPARTMENTGENERAL FUNDYEAR ENDED JUNE 30, 2016
Variance with Final Budget
Budget Amounts Actual PositiveOriginal Final Amounts (Negative)
Budgetary Fund Balance, July 1 3,864,676$ 3,864,676$ 3,864,676$ -$ Resources (Inflows):Taxes 23,564,837 24,497,705 25,043,636 545,931 Licenses and permits 731,005 871,005 1,408,368 537,363 Intergovernmental 777,545 789,980 1,659,869 869,889 Charges for services 3,052,632 2,756,283 3,197,813 441,530 Use of money and property 395,380 345,380 360,966 15,586 Fines and forfeitures 317,600 317,600 263,280 (54,320) Contributions 89,925 89,925 101,972 12,047 Miscellaneous 612,095 612,095 768,948 156,853 Transfers in 8,977,182 8,977,182 9,026,377 49,195 Extraordinary gain - - 353,790 353,790
Amounts Available for Appropriations 42,382,877 43,121,831 46,049,695 2,927,864 Charges to Appropriations (Outflow):General government
City Council 221,276 220,116 167,395 52,721 City Manager 626,618 615,428 588,947 26,481 Community Relations 94,742 94,162 66,139 28,023 City Clerk 464,639 485,551 497,791 (12,240) City Clerk Elections 1,822 1,322 1,117 205 Passport Program 81,952 125,987 125,396 591 City Treasurer 17,099 15,667 15,447 220 City Attorney 477,000 477,000 330,167 146,833 Finance Administration 202,327 205,427 242,861 (37,434) Finance Operations 901,168 966,573 879,997 86,576 Human Resources 308,451 365,702 330,125 35,577 Non-departmental 1,650,368 1,268,998 1,407,447 (138,449)
Public safetyEmergency Services 40,134 40,134 40,525 (391) Police Administration 445,105 452,305 470,738 (18,433) Police Services 1,871,206 1,900,961 1,925,330 (24,369) Police Patrol 7,185,562 7,223,981 7,619,801 (395,820) Communication Crime Analysis 1,244,408 1,249,839 1,434,780 (184,941) Community Policing 482,618 469,642 429,883 39,759 Animal License 176,806 176,806 171,798 5,008 Fire Administration 505,185 581,685 590,793 (9,108) Fire Suppression 8,529,274 8,714,610 8,780,838 (66,228) Prevention 240,871 242,678 257,924 (15,246) Emergency Medical Services 382,577 382,577 364,244 18,333 Emergency Preparedness 15,324 15,324 15,079 245 Detectives 1,768,891 1,805,471 1,817,877 (12,406)
Community developmentCommunity Development Admin/Econ Dev 333,475 333,475 419,636 (86,161) Building 984,123 1,252,141 1,255,723 (3,582) Business License 127,579 130,115 140,441 (10,326) Planning 651,397 685,717 701,010 (15,293)
Parks and recreationCommunity Services Administration 845,762 877,266 829,780 47,486 Senior Program 16,733 16,733 29,338 (12,605) PR - Recreation Services 621 16,560 16,560 9,289 7,271 Library 1,771,675 1,824,414 1,743,476 80,938 Youth Center 1,000 1,000 - 1,000 Historical Museum 62,412 62,412 65,404 (2,992) Community Center Operations 414,897 414,897 433,162 (18,265) Concerts in the Park 15,060 15,060 21,535 (6,475) Contract Classes 80,215 80,215 83,659 (3,444) Urban Park Rental Programs 6,988 6,988 4,042 2,946 Monrovia Reads and Play 35,098 35,098 31,270 3,828 Library Reference 180,369 180,369 175,090 5,279 Children's Library 88,863 88,863 88,851 12 Library Circulation 21,000 21,000 21,000 - Public Relations 70,750 74,750 71,614 3,136 Special Activities 26,766 36,766 64,792 (28,026) Youth Sports 113,202 113,202 141,161 (27,959) Wilderness Management Program 151,066 84,734 74,039 10,695 Canyon Park 410,965 410,965 300,085 110,880
Public worksPublic Works Administration 260,379 259,587 200,403 59,184 Engineering 316,176 391,176 421,751 (30,575) Parks Maintenance 647,296 673,052 629,333 43,719
Capital outlay 580 580 - 580 Debt service: Interest and fiscal charges 500 500 368 132 Transfers out 2,279,934 2,299,934 1,853,922 446,012
Total Charges to Appropriations 37,866,243 38,485,515 38,382,613 102,902
Budgetary Fund Balance, June 30 4,516,634$ 4,636,316$ 7,667,082$ 3,030,766$
96
CITY OF MONROVIA
BUDGETARY COMPARISON SCHEDULEGANG VIOLENCE AND DRUG ABUSE GRANTSYEAR ENDED JUNE 30, 2016
Variance with Final Budget
Budget Amounts Actual PositiveOriginal Final Amounts (Negative)
Budgetary Fund Balance, July 1 (781,772)$ (781,772)$ (781,772)$ -$ Resources (Inflows):Intergovernmental 10,246,842 10,246,842 6,959,586 (3,287,256) Use of money and property 2,000 2,000 2,268 268 Miscellaneous - - 16,147 16,147
Amounts Available for Appropriations 9,467,070 9,467,070 6,196,229 (3,270,841) Charges to Appropriations (Outflow):Public safety 10,246,842 10,246,843 6,660,449 3,586,394
Total Charges to Appropriations 10,246,842 10,246,843 6,660,449 3,586,394
Budgetary Fund Balance, June 30 (779,772)$ (779,773)$ (464,220)$ 315,553$
See Notes to Required Supplementary Information97
CITY OF MONROVIA
BUDGETARY COMPARISON SCHEDULEMONROVIA HOUSING AUTHORITYYEAR ENDED JUNE 30, 2016
Variance with Final Budget
Budget Amounts Actual PositiveOriginal Final Amounts (Negative)
Budgetary Fund Balance, July 1 4,263,723$ 4,263,723$ 4,263,723$ -$ Resources (Inflows):Use of money and property 17,000 17,000 22,523 5,523 Miscellaneous 2,500 2,500 220,358 217,858 Transfers in 112,635 112,635 12,391 (100,244)
Amounts Available for Appropriations 4,395,858 4,395,858 4,518,995 123,137 Charges to Appropriations (Outflow):Community development 130,346 136,046 111,414 24,632 Transfers out - - 23,991 (23,991) Extraordinary loss - - 353,790 (353,790)
Total Charges to Appropriations 130,346 136,046 489,195 (353,149)
Budgetary Fund Balance, June 30 4,265,512$ 4,259,812$ 4,029,800$ (230,012)$
See Notes to Required Supplementary Information98
CITY OF MONROVIA NOTES TO REQUIRED SUPPLEMENTARY INFORMATION JUNE 30, 2016
General Budget Policies
The City's budget is prepared under the direction of the City Manager. Revenues are budgeted based
on source. The budget control level established is at the "fund level", with sub-classifications by
function, department and object of expenditure.
The City Council approves total budgeted appropriations and any amendments to total appropriations
during the year. This "appropriated budget" covers substantially all City expenditures, with the
exception of debt service and capital projects that constitute legally authorized "non-appropriated
budget." All annual appropriations lapse at year-end. There were no significant non-budgeted
financial activities. The budgetary information shown for revenues and expenditures represents the
original adopted budget adjusted for any changes made by the City Council or City Manager.
Supplemental budgetary appropriations were necessary during the year. The effects of these
amendments were not material.
Although the appropriated budget is classified by departments and objects of expenditure, the
City Manager is authorized to transfer budgeted amounts between departments and object
categories, and also between programs. Council approval is required only for transfers between
funds, or for an increase in total appropriations.
Budgets for the General and Special Revenue Funds are adopted on a basis substantially consistent
with generally accepted accounting principles (GAAP). Accordingly, actual revenues and
expenditures can be compared with related budgeted amounts without any significant reconciling
items.
The Bikeway Special Revenue Fund did not have a legally adopted budget.
99
CITY OF MONROVIA NOTES TO REQUIRED SUPPLEMENTARY INFORMATION (CONTINUED) JUNE 30, 2016
Expenditures Exceeding Appropriations
Excesses of expenditures over appropriations by department in individual funds are as follows:
Appropriation Actual ExcessGeneral Fund:
General governmentCity clerk elections 485,551$ 497,791$ (12,240)$ Finance administration 205,427 242,861 (37,434) Non-departmental 1,285,558 1,411,363 (125,805)
Public safetyEmergency services 40,134 40,525 (391) Police administration 452,305 470,738 (18,433) Police services 1,900,961 1,925,330 (24,369) Police patrol 7,223,981 7,619,531 (395,550) Communication crime analysis 1,249,839 1,434,780 (184,941) Fire Administration 581,685 590,793 (9,108) Fire suppression 8,714,610 8,780,838 (66,228) Prevention 242,678 257,924 (15,246) Detectives 1,805,471 1,817,877 (12,406)
Community developmentCommunity development admin 333,475 419,636 (86,161) Building 1,252,141 1,255,723 (3,582) Business License 130,115 140,441 (10,326) Planning 685,717 701,010 (15,293)
Parks and recreationSenior Program 16,733 29,338 (12,605) Community Center operations 414,897 433,162 (18,265) Historical museum 62,412 65,404 (2,992) Concerts in the park 15,060 21,535 (6,475) Public relations 80,215 83,659 (3,444) Special activities 36,766 64,792 (28,026) Youth sports 113,202 141,161 (27,959)
Public worksEngineering 391,176 421,751 (30,575)
Monrovia Housing Authority Fund 136,046 489,195 (353,149)
Fund
100
NON MAJOR GOVERNMENTAL FUNDS The following funds have been classified as non-major governmental funds in the accompanying financial statements. Retirement Fund - To account for voter approved override property taxes levied for employee
retirement funding. Monies are transferred from this fund to numerous other funds to reimburse each fund for the payment of retirement costs which are charged directly against each fund. In addition, monies are transferred from this fund to the Pension Obligation Bond Debt Service Fund to provide funds for the payment of debt service on the 2010 Pension Obligation Bonds.
Proposition A Fund - To account for ½ cent transportation sales tax, which became effective
July 1982. Proposition C Fund - To account for ½ cent transportation sales tax, which became effective
November 1990.
AB 2766 Fund - To account for funds used to implement air quality improvement pursuant to South Coast Air Quality Management District (SCAQMD).
Traffic Safety Fund - To account for fines and forfeitures received under Section 1463 of the
Penal Code. Expenditures must be used exclusively for traffic control devices, traffic law enforcement, and traffic accident prevention.
State Gasoline Tax Fund - To account for State gasoline taxes received by the City. These
funds are transferred to the Street Maintenance Fund and used for street repair, reconstruction, and maintenance.
Bikeway Fund - To account for costs under SB821 related to State Bikeway monies which are used for the development of bicycle and pedestrian facilities. (There was no activity in the Bikeway Fund during FY 2014-15).
Library Grant Fund - To account for state funds provided under SB555, which supplement, but not supplant, local revenues appropriated for public library expenditures. In addition, this fund is also used to account for other library grant funds received by the City.
Fire Hazmat Fund - To account for state mandated hazardous materials information collection
and reporting. Expenditures included inspection of businesses for compliance with regulations.
Community Development Block Grant (CDBG) Fund - To account for CDBG funds received from the Department of Housing and Urban Development (HUD) administered by the County of Los Angeles. All expenditures are restricted for target area projects and programs.
Asset Forfeiture Fund - To account for coordinated drug enforcement efforts within the San Gabriel Valley. Expenditures incurred are restricted to targeting, investigating and prosecuting individuals who engage in high level drug-trafficking enterprises, and to seize all assets derived therefrom.
101
NON MAJOR GOVERNMENTAL FUNDS (Continued)
Police Grants Fund - To account for law enforcement grant funds received from local, state, and federal agencies.
Lighting and Landscaping Assessment District Fund - To account for the costs associated with the City's street lighting and street tree maintenance programs. These costs are deemed to benefit all property owners who are assessed their proportionate share of the costs. The City's landscape maintenance is not billed to all property owners, but only those who specifically receive benefits from the districts. Assessments are placed on the property tax bill and collected and remitted by the County of Los Angeles.
Park Maintenance Assessment District Fund - To account for the costs associated with the City’s park maintenance program.
Business Improvement District Fund - To account for special assessment collected from the Business Improvement District to be spent on promotional activities.
Fire Grants Fund – To account for fire related grant funds received from local, state, and federal agencies.
Measure R Fund- To account for ½ cent transportation sales tax, which became effective July 2009.
Street Maintenance Fund - This fund serves as the main repository for all revenues supporting street maintenance activities. Financing for street related projects is provided by monies transferred in from the State Gasoline Tax and Capital Improvement Funds.
Hillside Acquisition Capital Project Fund - This fund accounts for the costs associated with the acquisition of all land designated for the Wilderness Preserve (Hillside open space).
Library Bond Construction Project Fund – To account for the costs associated with the construction of the new City of Monrovia Public Library. Funds were made available through the passage of a bond measure passed in 2007.
Hillside Acquisition Debt Service Fund - This fund was created to account for the annual receipt of property taxes collected for the Hillside Wilderness Preserve and all costs associated with the issuance of bonds, including the receipt of proceeds, the costs of issuance, and the annual debt service payments.
Library Bond Debt Service Fund - This fund was created to account for the annual receipt of property taxes, all costs associated with the issuance of bonds, including the receipt of proceeds, the costs of issuance, and the annual debt service payments related to the 2007 bond measure passed to fund the construction of a new library.
Pension Obligation Bond Debt Service Fund – This fund was created to accumulate funds for the payment of debt service on the 2010 Pension Obligation Bonds. Funds are transferred in from the Retirement Fund.
102
NON MAJOR GOVERNMENTAL FUNDS (Continued)
Proposition C and Measure R Debt Service - To account for the payment of annual debt service on the 2016 Measure R and Proposition C Street Improvement Bonds. The Bonds were issued to finance the Monrovia Renewal Improvement Program project expenses. The debt service is paid with Proposition C and Measure R local revenues. Miller Memorial Trust Fund - This fund accounts for the Joseph H. Miller Trust for which only interest earnings may be expended for library books.
103
CITY OF MONROVIA
COMBINING BALANCE SHEETNONMAJOR GOVERNMENTAL FUNDS JUNE 30, 2016
Assets:Pooled cash and investments 2,736,804$ 9,553$ 1,956,904$ 336,201$ Receivables:
Accounts - 270,735 - 12,798 Taxes 143,483 - - - Grants - - - -
Restricted assets:Cash and investments - - - - Cash and investments with fiscal agents - - - -
Total Assets 2,880,287$ 280,288$ 1,956,904$ 348,999$
Liabilities, Deferred Inflows of Resources, and Fund Balances:
Liabilities:Accounts payable -$ 60,603$ -$ 7,692$ Accrued liabilities - - 465 - Due to other governments - - - - Due to other funds - - - - Advances from other funds - - - -
Total Liabilities - 60,603 465 7,692
Deferred Inflows of Resources:Unavailable revenues - 30,329 - -
Total Deferred Inflows of Resources - 30,329 - -
Fund Balances: Nonspendable: Permanent fund principal - - - - Restricted for: Public safety - - - - Public works - - - - Debt service - - - - Retirement 2,880,287 - - - Transportation - 189,356 1,956,439 - Air Quality - - - 341,307 Street Repair and Maintenance - - - - Library - - - - Unassigned - - - -
Total Fund Balances 2,880,287 189,356 1,956,439 341,307
Total Liabilities, Deferred Inflows of Resources, and Fund Balances 2,880,287$ 280,288$ 1,956,904$ 348,999$
Retirement Proposition A Proposition C AB 2766
Special Revenue Funds
104
CITY OF MONROVIA
COMBINING BALANCE SHEETNONMAJOR GOVERNMENTAL FUNDSJUNE 30, 2016
Assets:Pooled cash and investmentsReceivables:
AccountsTaxesGrants
Restricted assets:Cash and investmentsCash and investments with fiscal agents
Total Assets
Liabilities, Deferred Inflows of Resources, and Fund Balances:
Liabilities:Accounts payableAccrued liabilitiesDue to other governmentsDue to other fundsAdvances from other funds
Total Liabilities
Deferred Inflows of Resources:Unavailable revenues
Total Deferred Inflows of Resources
Fund Balances: Nonspendable: Permanent fund principal Restricted for: Public safety Public works Debt service Retirement Transportation Air Quality Street Repair and Maintenance Library Unassigned
Total Fund Balances
Total Liabilities, Deferred Inflows of Resources, and Fund Balances
(CONTINUED)
146,427$ -$ -$ 94,899$
53,944 - 17,258 - - - - - - - - -
- - - - - - - -
200,371$ -$ 17,258$ 94,899$
25,570$ -$ -$ -$ 486 - - -
- - - - - - 17,258 - - - - -
26,056 - 17,258 -
- - - -
- - - -
- - - -
174,315 - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 94,899 - - - -
174,315 - - 94,899
200,371$ -$ 17,258$ 94,899$
Library Grant Traffic Safety State
Gasoline Tax Bikeway
Special Revenue Funds
105
CITY OF MONROVIA
COMBINING BALANCE SHEETNONMAJOR GOVERNMENTAL FUNDSJUNE 30, 2016
Assets:Pooled cash and investmentsReceivables:
AccountsTaxesGrants
Restricted assets:Cash and investmentsCash and investments with fiscal agents
Total Assets
Liabilities, Deferred Inflows of Resources, and Fund Balances:
Liabilities:Accounts payableAccrued liabilitiesDue to other governmentsDue to other fundsAdvances from other funds
Total Liabilities
Deferred Inflows of Resources:Unavailable revenues
Total Deferred Inflows of Resources
Fund Balances: Nonspendable: Permanent fund principal Restricted for: Public safety Public works Debt service Retirement Transportation Air Quality Street Repair and Maintenance Library Unassigned
Total Fund Balances
Total Liabilities, Deferred Inflows of Resources, and Fund Balances
(CONTINUED)
60,997$ -$ 98$ -$
92,647 - 10,464 134 - - - - - 166,721 - -
- - - - - - - -
153,644$ 166,721$ 10,562$ 134$
10$ 167$ -$ -$ 5,903 - 4,092 -
- - - - - 172,201 10,561 27,123 - - - -
5,913 172,368 14,653 27,123
88,300 - - -
88,300 - - -
- - - -
59,431 - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - (5,647) (4,091) (26,989)
59,431 (5,647) (4,091) (26,989)
153,644$ 166,721$ 10,562$ 134$
Fire Hazmat
Community Development Block Grant
Asset Forfeiture Police Grants
Special Revenue Funds
106
CITY OF MONROVIA
COMBINING BALANCE SHEETNONMAJOR GOVERNMENTAL FUNDSJUNE 30, 2016
Assets:Pooled cash and investmentsReceivables:
AccountsTaxesGrants
Restricted assets:Cash and investmentsCash and investments with fiscal agents
Total Assets
Liabilities, Deferred Inflows of Resources, and Fund Balances:
Liabilities:Accounts payableAccrued liabilitiesDue to other governmentsDue to other fundsAdvances from other funds
Total Liabilities
Deferred Inflows of Resources:Unavailable revenues
Total Deferred Inflows of Resources
Fund Balances: Nonspendable: Permanent fund principal Restricted for: Public safety Public works Debt service Retirement Transportation Air Quality Street Repair and Maintenance Library Unassigned
Total Fund Balances
Total Liabilities, Deferred Inflows of Resources, and Fund Balances
(CONTINUED)
391,572$ 85,754$ 29,883$ -$
975 - 227 - 18,923 4,162 - -
- - - -
- - - - - - - -
411,470$ 89,916$ 30,110$ -$
109,403$ 357$ 2,500$ -$ - - - - - - - 3,535 - - - 7,267
34,832 23,224 - -
144,235 23,581 2,500 10,802
975 - 227 -
975 - 227 -
- - - -
- - - - 266,260 66,335 27,383 -
- - - - - - - - - - - - - - - - - - - - - - - - - - - (10,802)
266,260 66,335 27,383 (10,802)
411,470$ 89,916$ 30,110$ -$
Park Maint. Assessment
District
Business Improvement
District Fire Grants
Lighting and Landscaping Assessment
District
Special Revenue Funds
107
CITY OF MONROVIA
COMBINING BALANCE SHEETNONMAJOR GOVERNMENTAL FUNDSJUNE 30, 2016
Assets:Pooled cash and investmentsReceivables:
AccountsTaxesGrants
Restricted assets:Cash and investmentsCash and investments with fiscal agents
Total Assets
Liabilities, Deferred Inflows of Resources, and Fund Balances:
Liabilities:Accounts payableAccrued liabilitiesDue to other governmentsDue to other fundsAdvances from other funds
Total Liabilities
Deferred Inflows of Resources:Unavailable revenues
Total Deferred Inflows of Resources
Fund Balances: Nonspendable: Permanent fund principal Restricted for: Public safety Public works Debt service Retirement Transportation Air Quality Street Repair and Maintenance Library Unassigned
Total Fund Balances
Total Liabilities, Deferred Inflows of Resources, and Fund Balances
(CONTINUED)
Special Revenue
Funds
2,153,689$ 365,723$ -$ 238,668$
- 1,543 - - - - - - - 7,364 81,895 -
- - - - - - - -
2,153,689$ 374,630$ 81,895$ 238,668$
403$ 83,081$ -$ -$ - 3,707 - - - - - - - - 289 - - 92,881 - -
403 179,669 289 -
- 8,908 81,895 -
- 8,908 81,895 -
- - - -
- - - - - - - - - - - - - - - -
2,153,286 - - - - - - - - 186,053 - - - - - 238,668 - - (289) -
2,153,286 186,053 (289) 238,668
2,153,689$ 374,630$ 81,895$ 238,668$
Library Bond Construction
Project Street
Maintenance
Hillside Acquisition
Capital Project Measure R
Capital Projects Funds
108
CITY OF MONROVIA
COMBINING BALANCE SHEETNONMAJOR GOVERNMENTAL FUNDSJUNE 30, 2016
Assets:Pooled cash and investmentsReceivables:
AccountsTaxesGrants
Restricted assets:Cash and investmentsCash and investments with fiscal agents
Total Assets
Liabilities, Deferred Inflows of Resources, and Fund Balances:
Liabilities:Accounts payableAccrued liabilitiesDue to other governmentsDue to other fundsAdvances from other funds
Total Liabilities
Deferred Inflows of Resources:Unavailable revenues
Total Deferred Inflows of Resources
Fund Balances: Nonspendable: Permanent fund principal Restricted for: Public safety Public works Debt service Retirement Transportation Air Quality Street Repair and Maintenance Library Unassigned
Total Fund Balances
Total Liabilities, Deferred Inflows of Resources, and Fund Balances
(CONTINUED)
296,483$ 843,165$ 11,226$ 1,145$
- - - - 14,254 19,994 - -
- - - -
- - - 802,177 5 - 10 -
310,742$ 863,159$ 11,236$ 803,322$
-$ -$ -$ -$ - - - - - - - - - - - - - - - -
- - - -
- - - -
- - - -
- - - -
- - - - - - - -
310,742 863,159 11,236 803,322 - - - - - - - - - - - - - - - - - - - - - - - -
310,742 863,159 11,236 803,322
310,742$ 863,159$ 11,236$ 803,322$
Library Bond Debt Service
Pension Obligation Bond Debt
Service Prop C and Measure R
Hillside Acquisition Debt
Service
Debt Service Funds
109
CITY OF MONROVIA
COMBINING BALANCE SHEETNONMAJOR GOVERNMENTAL FUNDSJUNE 30, 2016
Assets:Pooled cash and investmentsReceivables:
AccountsTaxesGrants
Restricted assets:Cash and investmentsCash and investments with fiscal agents
Total Assets
Liabilities, Deferred Inflows of Resources, and Fund Balances:
Liabilities:Accounts payableAccrued liabilitiesDue to other governmentsDue to other fundsAdvances from other funds
Total Liabilities
Deferred Inflows of Resources:Unavailable revenues
Total Deferred Inflows of Resources
Fund Balances: Nonspendable: Permanent fund principal Restricted for: Public safety Public works Debt service Retirement Transportation Air Quality Street Repair and Maintenance Library Unassigned
Total Fund Balances
Total Liabilities, Deferred Inflows of Resources, and Fund Balances
(CONTINUED)
Permanent Funds
Total Nonmajor
GovernmentalFunds
100,169$ 9,859,360$
- 460,725 - 200,816 - 255,980
- 802,177 - 15
100,169$ 11,579,073$
-$ 289,786$ - 14,653 - 3,535 - 234,699 - 150,937
- 693,610
- 210,634
- 210,634
100,169 100,169
- 233,746 - 359,978 - 1,988,459 - 2,880,287 - 4,299,081 - 341,307 - 186,053 - 333,567 - (47,818)
100,169 10,674,829
100,169$ 11,579,073$
Miller Memorial Trust
Fund
110
CITY OF MONROVIA
COMBINING STATEMENT OF REVENUES,EXPENDITURES AND CHANGES IN FUND BALANCESNONMAJOR GOVERNMENTAL FUNDSYEAR ENDED JUNE 30, 2016
Revenues:Taxes 5,959,025$ 670,783$ -$ -$ Assessments - - - - Intergovernmental - 346,344 557,787 47,961 Charges for services - 37,557 - 4,323 Use of money and property 14,102 1,607 13,568 2,625 Fines and forfeitures - - - -
Total Revenues 5,973,127 1,056,291 571,355 54,909
Expenditures:Current: General government 146,918 - - - Public safety - - - - Community development - 1,077,872 - - Parks and recreation - - - - Public works - - 44,450 52,571 Capital outlay - - - - Debt service: Principal retirement - - - - Interest and fiscal charges - - - -
Total Expenditures 146,918 1,077,872 44,450 52,571
Excess (Deficiency) of Revenues Over (Under) Expenditures 5,826,209 (21,581) 526,905 2,338
Other Financing Sources (Uses):Transfers in 1,700,000 - - - Transfers out (6,960,435) - - - Lease revenue bonds issued - - - - Bond premium - - - -
Total Other Financing Sources (Uses) (5,260,435) - - -
Net Change in Fund Balances 565,774 (21,581) 526,905 2,338
Fund Balances, Beginning of Year 2,314,513 210,937 1,429,534 338,969
Fund Balances, End of Year 2,880,287$ 189,356$ 1,956,439$ 341,307$
Special Revenue Funds
Retirement Proposition A Proposition C AB 2766
112
CITY OF MONROVIA
COMBINING STATEMENT OF REVENUES,EXPENDITURES AND CHANGES IN FUND BALANCESNONMAJOR GOVERNMENTAL FUNDSYEAR ENDED JUNE 30, 2016
Revenues:TaxesAssessmentsIntergovernmentalCharges for servicesUse of money and propertyFines and forfeitures
Total Revenues
Expenditures:Current: General government Public safety Community development Parks and recreation Public worksCapital outlayDebt service: Principal retirement Interest and fiscal charges
Total Expenditures
Excess (Deficiency) of Revenues Over (Under) Expenditures
Other Financing Sources (Uses):Transfers inTransfers outLease revenue bonds issuedBond premium
Total Other Financing Sources (Uses)
Net Change in Fund Balances
Fund Balances, Beginning of Year
Fund Balances, End of Year
(CONTINUED)
-$ 809,602$ 17,258$ -$ - - - - - - - 35,771 - - - -
1,057 - - 872 618,011 - - -
619,068 809,602 17,258 36,643
- - - - 506,682 - - -
- - - - - - - 46,884 - - 17,258 - - - - -
- - - - - - - -
506,682 - 17,258 46,884
112,386 809,602 - (10,241)
31,650 - - 20,678 (91,115) (809,602) - -
- - - - - - - -
(59,465) (809,602) - 20,678
52,921 - - 10,437
121,394 - - 84,462
174,315$ -$ -$ 94,899$
Special Revenue Funds
Traffic Safety State
Gasoline Tax Bikeway Library Grant
113
CITY OF MONROVIA
COMBINING STATEMENT OF REVENUES,EXPENDITURES AND CHANGES IN FUND BALANCESNONMAJOR GOVERNMENTAL FUNDSYEAR ENDED JUNE 30, 2016
Revenues:TaxesAssessmentsIntergovernmentalCharges for servicesUse of money and propertyFines and forfeitures
Total Revenues
Expenditures:Current: General government Public safety Community development Parks and recreation Public worksCapital outlayDebt service: Principal retirement Interest and fiscal charges
Total Expenditures
Excess (Deficiency) of Revenues Over (Under) Expenditures
Other Financing Sources (Uses):Transfers inTransfers outLease revenue bonds issuedBond premium
Total Other Financing Sources (Uses)
Net Change in Fund Balances
Fund Balances, Beginning of Year
Fund Balances, End of Year
-$ -$ -$ -$ - - - - - 237,661 63,450 114,618
149,585 - 5,902 - 323 - - -
- - 18,493 -
149,908 237,661 87,845 114,618
- - - - 108,640 - 229,754 109,689
- 341,405 - - - - - - - - - - - - - 4,929
- - - - - - - -
108,640 341,405 229,754 114,618
41,268 (103,744) (141,909) -
13,954 104,481 137,818 - (18,492) - - -
- - - - - - - -
(4,538) 104,481 137,818 -
36,730 737 (4,091) -
22,701 (6,384) - (26,989)
59,431$ (5,647)$ (4,091)$ (26,989)$
Special Revenue Funds
Fire Hazmat
Community Development Block Grant
Asset Forfeiture Police Grants
114
CITY OF MONROVIA
COMBINING STATEMENT OF REVENUES,EXPENDITURES AND CHANGES IN FUND BALANCESNONMAJOR GOVERNMENTAL FUNDSYEAR ENDED JUNE 30, 2016
Revenues:TaxesAssessmentsIntergovernmentalCharges for servicesUse of money and propertyFines and forfeitures
Total Revenues
Expenditures:Current: General government Public safety Community development Parks and recreation Public worksCapital outlayDebt service: Principal retirement Interest and fiscal charges
Total Expenditures
Excess (Deficiency) of Revenues Over (Under) Expenditures
Other Financing Sources (Uses):Transfers inTransfers outLease revenue bonds issuedBond premium
Total Other Financing Sources (Uses)
Net Change in Fund Balances
Fund Balances, Beginning of Year
Fund Balances, End of Year
(CONTINUED)
-$ -$ 4,500$ -$ 1,037,577 209,768 85,469 -
- - - 450,000 - - 20,000 -
2,468 713 242 - - - - -
1,040,045 210,481 110,211 450,000
- - - - - - - 451,113 - - 90,485 - - - - -
1,125,374 235,954 - - - - - -
- - - - 151 99 - -
1,125,525 236,053 90,485 451,113
(85,480) (25,572) 19,726 (1,113)
255,435 34,729 13 - (201,471) (49,360) (10,838) -
- - - - - - - -
53,964 (14,631) (10,825) -
(31,516) (40,203) 8,901 (1,113)
297,776 106,538 18,482 (9,689)
266,260$ 66,335$ 27,383$ (10,802)$
Special Revenue Funds Lighting and Landscaping Assessment
District
Park Maint. Assessment
District
Business Improvement
District Fire Grants
115
CITY OF MONROVIA
COMBINING STATEMENT OF REVENUES,EXPENDITURES AND CHANGES IN FUND BALANCESNONMAJOR GOVERNMENTAL FUNDSYEAR ENDED JUNE 30, 2016
Revenues:TaxesAssessmentsIntergovernmentalCharges for servicesUse of money and propertyFines and forfeitures
Total Revenues
Expenditures:Current: General government Public safety Community development Parks and recreation Public worksCapital outlayDebt service: Principal retirement Interest and fiscal charges
Total Expenditures
Excess (Deficiency) of Revenues Over (Under) Expenditures
Other Financing Sources (Uses):Transfers inTransfers outLease revenue bonds issuedBond premium
Total Other Financing Sources (Uses)
Net Change in Fund Balances
Fund Balances, Beginning of Year
Fund Balances, End of Year
Special Revenue
Funds
-$ -$ -$ -$ - - - -
417,550 734 - - - - - -
15,360 3,092 - 1,963 - - - -
432,910 3,826 - 1,963
- - - - - - - - - - 290 - - - - -
12,075 1,176,343 - - - - - 20,336
- - - - - 400 - -
12,075 1,176,743 290 20,336
420,835 (1,172,917) (290) (18,373)
- 1,122,376 - - (12,750) (267,331) - -
- - - - - - - -
(12,750) 855,045 - -
408,085 (317,872) (290) (18,373)
1,745,201 503,925 1 257,041
2,153,286$ 186,053$ (289)$ 238,668$
Capital Projects Funds
Measure R Street
Maintenance
Hillside Acquisition
Capital Project
Library Bond Construction
Project
116
CITY OF MONROVIA
COMBINING STATEMENT OF REVENUES,EXPENDITURES AND CHANGES IN FUND BALANCESNONMAJOR GOVERNMENTAL FUNDSYEAR ENDED JUNE 30, 2016
Revenues:TaxesAssessmentsIntergovernmentalCharges for servicesUse of money and propertyFines and forfeitures
Total Revenues
Expenditures:Current: General government Public safety Community development Parks and recreation Public worksCapital outlayDebt service: Principal retirement Interest and fiscal charges
Total Expenditures
Excess (Deficiency) of Revenues Over (Under) Expenditures
Other Financing Sources (Uses):Transfers inTransfers outLease revenue bonds issuedBond premium
Total Other Financing Sources (Uses)
Net Change in Fund Balances
Fund Balances, Beginning of Year
Fund Balances, End of Year
(CONTINUED)
728,976$ 1,026,033$ -$ -$ - - - - - - - - - - - -
1,439 5,981 1,024 1,300 - - - -
730,415 1,032,014 1,024 1,300
- 62 - - - - - - - - - - - - - - - - - - - - - -
300,000 360,000 385,000 - 242,243 643,817 751,106 246,215
542,243 1,003,879 1,136,106 246,215
188,172 28,135 (1,135,082) (244,915)
- - 1,136,106 - (82,093) - - -
- - - 109,336 - - - 938,901
(82,093) - 1,136,106 1,048,237
106,079 28,135 1,024 803,322
204,663 835,024 10,212 -
310,742$ 863,159$ 11,236$ 803,322$
Debt Service Funds Pension
Obligation Bond Debt
Service Prop C and Measure R
Hillside Acquisition
Debt Service Library Bond Debt Service
117
CITY OF MONROVIA
COMBINING STATEMENT OF REVENUES,EXPENDITURES AND CHANGES IN FUND BALANCESNONMAJOR GOVERNMENTAL FUNDSYEAR ENDED JUNE 30, 2016
Revenues:TaxesAssessmentsIntergovernmentalCharges for servicesUse of money and propertyFines and forfeitures
Total Revenues
Expenditures:Current: General government Public safety Community development Parks and recreation Public worksCapital outlayDebt service: Principal retirement Interest and fiscal charges
Total Expenditures
Excess (Deficiency) of Revenues Over (Under) Expenditures
Other Financing Sources (Uses):Transfers inTransfers outLease revenue bonds issuedBond premium
Total Other Financing Sources (Uses)
Net Change in Fund Balances
Fund Balances, Beginning of Year
Fund Balances, End of Year
Permanent Fund
Total Nonmajor Governmental
Funds
-$ 9,216,177$ - 1,332,814 - 2,271,876 - 217,367
772 68,508 - 636,504
772 13,743,246
- 146,980 - 1,405,878 - 1,510,052 - 46,884 - 2,664,025 - 25,265
- 1,045,000 - 1,884,031
- 8,728,115
772 5,015,131
- 4,557,240 - (8,503,487) - 109,336 - 938,901
- (2,898,010)
772 2,117,121
99,397 8,557,708
100,169$ 10,674,829$
Miller Memorial
Trust Fund
118
CITY OF MONROVIA
BUDGETARY COMPARISON SCHEDULERETIREMENTYEAR ENDED JUNE 30, 2016
Variance with Final Budget
Budget Amounts Actual PositiveOriginal Final Amounts (Negative)
Budgetary Fund Balance, July 1 2,314,513$ 2,314,513$ 2,314,513$ -$ Resources (Inflows):Taxes 4,959,194 5,065,608 5,959,025 893,417 Use of money and property 5,000 5,000 14,102 9,102 Transfers in 1,700,000 1,700,000 1,700,000 -
Amounts Available for Appropriations 8,978,707 9,085,121 9,987,640 902,519 Charges to Appropriations (Outflow):General government 150,000 150,000 146,918 3,082 Transfers out 7,134,121 7,134,121 6,960,435 173,686
Total Charges to Appropriations 7,284,121 7,284,121 7,107,353 176,768
Budgetary Fund Balance, June 30 1,694,586$ 1,801,000$ 2,880,287$ 1,079,287$
119
CITY OF MONROVIA
BUDGETARY COMPARISON SCHEDULEPROPOSITION AYEAR ENDED JUNE 30, 2016
Variance with Final Budget
Budget Amounts Actual PositiveOriginal Final Amounts (Negative)
Budgetary Fund Balance, July 1 210,937$ 210,937$ 210,937$ -$ Resources (Inflows):Taxes 682,380 682,380 670,783 (11,597) Intergovernmental 417,948 417,948 346,344 (71,604) Charges for services 45,000 45,000 37,557 (7,443) Use of money and property 3,000 3,000 1,607 (1,393)
Amounts Available for Appropriations 1,359,265 1,359,265 1,267,228 (92,037) Charges to Appropriations (Outflow):Community development 1,204,829 1,204,829 1,077,872 126,957 Capital outlay 360,000 360,000 - 360,000
Total Charges to Appropriations 1,564,829 1,564,829 1,077,872 486,957
Budgetary Fund Balance, June 30 (205,564)$ (205,564)$ 189,356$ 394,920$
120
CITY OF MONROVIA
BUDGETARY COMPARISON SCHEDULEPROPOSITION CYEAR ENDED JUNE 30, 2016
Variance with Final Budget
Budget Amounts Actual PositiveOriginal Final Amounts (Negative)
Budgetary Fund Balance, July 1 1,429,534$ 1,429,534$ 1,429,534$ -$ Resources (Inflows):Intergovernmental 561,000 561,000 557,787 (3,213) Use of money and property 8,000 8,000 13,568 5,568
Amounts Available for Appropriations 1,998,534 1,998,534 2,000,889 2,355 Charges to Appropriations (Outflow):Public works 78,964 78,964 44,450 34,514
Total Charges to Appropriations 78,964 78,964 44,450 34,514
Budgetary Fund Balance, June 30 1,919,570$ 1,919,570$ 1,956,439$ 36,869$
121
CITY OF MONROVIA
BUDGETARY COMPARISON SCHEDULETRAFFIC SAFETYYEAR ENDED JUNE 30, 2016
Variance with Final Budget
Budget Amounts Actual PositiveOriginal Final Amounts (Negative)
Budgetary Fund Balance, July 1 121,394$ 121,394$ 121,394$ -$ Resources (Inflows):Use of money and property - - 1,057 1,057 Fines and forfeitures 470,000 510,000 618,011 108,011 Transfers in 29,915 29,915 31,650 1,735
Amounts Available for Appropriations 621,309 661,309 772,112 110,803 Charges to Appropriations (Outflow):Public safety 317,862 452,778 506,682 (53,904) Parks and recreation 45,711 1,000 - 1,000 Transfers out 65,443 65,443 91,115 (25,672)
Total Charges to Appropriations 429,016 519,221 597,797 (78,576)
Budgetary Fund Balance, June 30 192,293$ 142,088$ 174,315$ 32,227$
122
CITY OF MONROVIA
BUDGETARY COMPARISON SCHEDULEAB 2766YEAR ENDED JUNE 30, 2016
Variance with Final Budget
Budget Amounts Actual PositiveOriginal Final Amounts (Negative)
Budgetary Fund Balance, July 1 338,969$ 338,969$ 338,969$ -$ Resources (Inflows):Intergovernmental 47,000 47,000 47,961 961 Charges for services 8,000 8,000 4,323 (3,677) Use of money and property 1,500 1,500 2,625 1,125
Amounts Available for Appropriations 395,469 395,469 393,878 (1,591) Charges to Appropriations (Outflow):Public works 59,886 59,886 52,571 7,315
Total Charges to Appropriations 59,886 59,886 52,571 7,315
Budgetary Fund Balance, June 30 335,583$ 335,583$ 341,307$ 5,724$
123
CITY OF MONROVIA
BUDGETARY COMPARISON SCHEDULESTATE GASOLINE TAXYEAR ENDED JUNE 30, 2016
Variance withFinal Budget
Budget Amounts Actual PositiveOriginal Final Amounts (Negative)
Budgetary Fund Balance, July 1 -$ -$ -$ -$ Resources (Inflows):Taxes 850,438 836,643 809,602 (27,041)
Amounts Available for Appropriations 850,438 836,643 809,602 (27,041) Charges to Appropriations (Outflow):Transfers out 850,438 850,438 809,602 40,836
Total Charges to Appropriations 850,438 850,438 809,602 40,836
Budgetary Fund Balance, June 30 -$ (13,795)$ -$ 13,795$
124
CITY OF MONROVIA
BUDGETARY COMPARISON SCHEDULELIBRARY GRANTYEAR ENDED JUNE 30, 2016
Variance with Final Budget
Budget Amounts Actual PositiveOriginal Final Amounts (Negative)
Budgetary Fund Balance, July 1 84,462$ 84,462$ 84,462$ -$ Resources (Inflows):Intergovernmental 25,000 25,000 35,771 10,771 Use of money and property 300 300 872 572 Transfers in 11,017 11,017 20,678 9,661
Amounts Available for Appropriations 120,779 120,779 141,783 21,004 Charges to Appropriations (Outflow):Parks and recreation 35,685 35,685 46,884 (11,199)
Total Charges to Appropriations 35,685 35,685 46,884 (11,199)
Budgetary Fund Balance, June 30 85,094$ 85,094$ 94,899$ 9,805$
125
CITY OF MONROVIA
BUDGETARY COMPARISON SCHEDULEFIRE HAZMATYEAR ENDED JUNE 30, 2016
Variance with Final Budget
Budget Amounts Actual PositiveOriginal Final Amounts (Negative)
Budgetary Fund Balance, July 1 22,701$ 22,701$ 22,701$ -$ Resources (Inflows):Charges for services 172,000 137,000 149,585 12,585 Use of money and property - - 323 323 Transfers in 28,014 28,014 13,954 (14,060)
Amounts Available for Appropriations 222,715 187,715 186,563 (1,152) Charges to Appropriations (Outflow):Public safety 165,857 130,857 108,640 22,217 Transfers out 29,854 29,854 18,492 11,362
Total Charges to Appropriations 195,711 160,711 127,132 33,579
Budgetary Fund Balance, June 30 27,004$ 27,004$ 59,431$ 32,427$
126
CITY OF MONROVIA
BUDGETARY COMPARISON SCHEDULECOMMUNITY DEVELOPMENT BLOCK GRANTYEAR ENDED JUNE 30, 2016
Variance with Final Budget
Budget Amounts Actual PositiveOriginal Final Amounts (Negative)
Budgetary Fund Balance, July 1 (6,384)$ (6,384)$ (6,384)$ -$ Resources (Inflows):Intergovernmental 236,926 236,926 237,661 735 Transfers in 99,743 99,743 104,481 4,738
Amounts Available for Appropriations 330,285 330,285 335,758 5,473 Charges to Appropriations (Outflow):Community development 341,816 341,816 341,405 411
Total Charges to Appropriations 341,816 341,816 341,405 411
Budgetary Fund Balance, June 30 (11,531)$ (11,531)$ (5,647)$ 5,884$
127
CITY OF MONROVIA
BUDGETARY COMPARISON SCHEDULEASSET FORFEITUREYEAR ENDED JUNE 30, 2016
Variance withFinal Budget
Budget Amounts Actual PositiveOriginal Final Amounts (Negative)
Budgetary Fund Balance, July 1 -$ -$ -$ -$ Resources (Inflows):Intergovernmental 80,000 60,000 63,450 3,450 Charges for services 6,000 6,000 5,902 (98) Fines and forfeitures 17,000 17,000 18,493 1,493 Transfers in 125,475 145,475 137,818 (7,657)
Amounts Available for Appropriations 228,475 228,475 225,663 (2,812) Charges to Appropriations (Outflow):Public safety 214,270 214,270 229,754 (15,484)
Total Charges to Appropriations 214,270 214,270 229,754 (15,484)
Budgetary Fund Balance, June 30 14,205$ 14,205$ (4,091)$ (18,296)$
128
CITY OF MONROVIA
BUDGETARY COMPARISON SCHEDULEPOLICE GRANTSYEAR ENDED JUNE 30, 2016
Variance with Final Budget
Budget Amounts Actual PositiveOriginal Final Amounts (Negative)
Budgetary Fund Balance, July 1 (26,989)$ (26,989)$ (26,989)$ -$ Resources (Inflows):Intergovernmental 315,909 315,909 114,618 (201,291)
Amounts Available for Appropriations 288,920 288,920 87,629 (201,291) Charges to Appropriations (Outflow):Public safety 123,003 123,003 109,689 13,314 Capital outlay - - 4,929 (4,929)
Total Charges to Appropriations 123,003 123,003 114,618 8,385
Budgetary Fund Balance, June 30 165,917$ 165,917$ (26,989)$ (192,906)$
129
CITY OF MONROVIA
BUDGETARY COMPARISON SCHEDULELIGHTING AND LANDSCAPING ASSESSMENTYEAR ENDED JUNE 30, 2016
Variance withFinal Budget
Budget Amounts Actual PositiveOriginal Final Amounts (Negative)
Budgetary Fund Balance, July 1 297,776$ 297,776$ 297,776$ -$ Resources (Inflows):Assessments 1,054,257 1,054,257 1,037,577 (16,680) Intergovernmental 30,000 30,000 - (30,000) Use of money and property 1,500 1,500 2,468 968 Miscellaneous 10,000 10,000 - (10,000) Transfers in 270,560 357,560 255,435 (102,125)
Amounts Available for Appropriations 1,664,093 1,751,093 1,593,256 (157,837) Charges to Appropriations (Outflow):Public works 1,272,235 1,359,235 1,125,374 233,861 Debt service: Interest and fiscal charges 200 200 151 49 Transfers out 229,002 229,002 201,471 27,531
Total Charges to Appropriations 1,501,437 1,588,437 1,326,996 261,441
Budgetary Fund Balance, June 30 162,656$ 162,656$ 266,260$ 103,604$
130
CITY OF MONROVIA
BUDGETARY COMPARISON SCHEDULEPARK MAINTENANCE ASSESSMENT DISTRICTYEAR ENDED JUNE 30, 2016
Variance withFinal Budget
Budget Amounts Actual PositiveOriginal Final Amounts (Negative)
Budgetary Fund Balance, July 1 106,538$ 106,538$ 106,538$ -$ Resources (Inflows):Assessments 222,464 222,464 209,768 (12,696) Use of money and property 500 500 713 213 Transfers in 37,432 37,432 34,729 (2,703)
Amounts Available for Appropriations 366,934 366,934 351,748 (15,186) Charges to Appropriations (Outflow):Public works 239,323 239,323 235,954 3,369 Debt service: Interest and fiscal charges 150 150 99 51 Transfers out 57,437 57,437 49,360 8,077
Total Charges to Appropriations 296,910 296,910 285,413 11,497
Budgetary Fund Balance, June 30 70,024$ 70,024$ 66,335$ (3,689)$
131
CITY OF MONROVIA
BUDGETARY COMPARISON SCHEDULEBUSINESS IMPROVEMENT DISTRICTYEAR ENDED JUNE 30, 2016
Variance with Final Budget
Budget Amounts Actual PositiveOriginal Final Amounts (Negative)
Budgetary Fund Balance, July 1 18,482$ 18,482$ 18,482$ -$ Resources (Inflows):Taxes 18,000 18,000 4,500 (13,500) Assessments 86,560 86,560 85,469 (1,091) Charges for services - - 20,000 20,000 Use of money and property 100 100 242 142 Transfers in - - 13 13
Amounts Available for Appropriations 123,142 123,142 128,706 5,564 Charges to Appropriations (Outflow):Community development 78,300 78,300 90,485 (12,185) Transfers out 6,696 6,696 10,838 (4,142)
Total Charges to Appropriations 84,996 84,996 101,323 (16,327)
Budgetary Fund Balance, June 30 38,146$ 38,146$ 27,383$ (10,763)$
132
CITY OF MONROVIA
BUDGETARY COMPARISON SCHEDULEFIRE GRANTSYEAR ENDED JUNE 30, 2016
Variance with Final Budget
Budget Amounts Actual PositiveOriginal Final Amounts (Negative)
Budgetary Fund Balance, July 1 (9,689)$ (9,689)$ (9,689)$ -$ Resources (Inflows):Intergovernmental 118,954 118,954 450,000 331,046
Amounts Available for Appropriations 109,265 109,265 440,311 331,046 Charges to Appropriations (Outflow):Public safety - - 451,113 (451,113)
Total Charges to Appropriations - - 451,113 (451,113)
Budgetary Fund Balance, June 30 109,265$ 109,265$ (10,802)$ (120,067)$
133
CITY OF MONROVIA
BUDGETARY COMPARISON SCHEDULEMEASURE RYEAR ENDED JUNE 30, 2016
Variance withFinal Budget
Budget Amounts Actual PositiveOriginal Final Amounts (Negative)
Budgetary Fund Balance, July 1 1,745,201$ 1,745,201$ 1,745,201$ -$ Resources (Inflows):Intergovernmental 422,280 422,280 417,550 (4,730) Use of money and property 8,000 8,000 15,360 7,360
Amounts Available for Appropriations 2,175,481 2,175,481 2,178,111 2,630 Charges to Appropriations (Outflow):Public works - 14,000 12,075 1,925 Transfers out 75,000 75,000 12,750 62,250
Total Charges to Appropriations 75,000 89,000 24,825 64,175
Budgetary Fund Balance, June 30 2,100,481$ 2,086,481$ 2,153,286$ 66,805$
134
CITY OF MONROVIA
BUDGETARY COMPARISON SCHEDULESTREET MAINTENANCEYEAR ENDED JUNE 30, 2016
Variance withFinal Budget
Budget Amounts Actual PositiveOriginal Final Amounts (Negative)
Budgetary Fund Balance, July 1 503,925$ 503,925$ 503,925$ -$ Resources (Inflows):Intergovernmental 72,571 72,571 734 (71,837) Use of money and property 5,000 5,000 3,092 (1,908) Transfers in 893,637 893,637 1,122,376 228,739
Amounts Available for Appropriations 1,475,133 1,475,133 1,630,127 154,994 Charges to Appropriations (Outflow):Public works 1,328,729 1,323,729 1,176,343 147,386 Debt service: Interest and fiscal charges 500 500 400 100 Transfers out 249,947 249,947 267,331 (17,384)
Total Charges to Appropriations 1,579,176 1,574,176 1,444,074 130,102
Budgetary Fund Balance, June 30 (104,043)$ (99,043)$ 186,053$ 285,096$
135
CITY OF MONROVIA
BUDGETARY COMPARISON SCHEDULECAPITAL IMPROVEMENTSYEAR ENDED JUNE 30, 2016
Variance with Final Budget
Budget Amounts Actual PositiveOriginal Final Amounts (Negative)
Budgetary Fund Balance, July 1 (1,237,239)$ (1,237,239)$ (1,237,239)$ -$ Resources (Inflows):Taxes 15,000 15,000 82,510 67,510 Intergovernmental 1,019,676 12,780,076 11,761,127 (1,018,949) Use of money and property - - 1,273 1,273
Amounts Available for Appropriations (202,563) 11,557,837 10,607,671 (950,166) Charges to Appropriations (Outflow):Public works 62,757 65,357 11,416 53,941 Capital outlay 1,047,150 7,222,250 6,225,544 996,706
Total Charges to Appropriations 1,109,907 7,287,607 6,236,960 1,050,647
Budgetary Fund Balance, June 30 (1,312,470)$ 4,270,230$ 4,370,711$ 100,481$
136
CITY OF MONROVIA
BUDGETARY COMPARISON SCHEDULELIBRARY BOND CONSTRUCTION PROJECTYEAR ENDED JUNE 30, 2016
Variance with Final Budget
Budget Amounts Actual PositiveOriginal Final Amounts (Negative)
Budgetary Fund Balance, July 1 257,041$ 257,041$ 257,041$ -$ Resources (Inflows):Use of money and property 1,500 1,500 1,963 463
Amounts Available for Appropriations 258,541 258,541 259,004 463 Charges to Appropriations (Outflow):Capital outlay 46,000 121,000 20,336 100,664
Total Charges to Appropriations 46,000 121,000 20,336 100,664
Budgetary Fund Balance, June 30 212,541$ 137,541$ 238,668$ 101,127$
137
CITY OF MONROVIA
BUDGETARY COMPARISON SCHEDULEHILLSIDE ACQUISITION CAPITAL PROJECTSYEAR ENDED JUNE 30, 2016
Variance withFinal Budget
Budget Amounts Actual PositiveOriginal Final Amounts (Negative)
Budgetary Fund Balance, July 1 1$ 1$ 1$ -$ Amounts Available for Appropriations 1 1 1 -
Charges to Appropriation (Outflow):Community development 42,000 67,000 290 66,710
Total Charges to Appropriations 42,000 67,000 290 66,710
Budgetary Fund Balance, June 30 (41,999)$ (66,999)$ (289)$ 66,710$
138
CITY OF MONROVIA
BUDGETARY COMPARISON SCHEDULEPROPOSITION C AND MEASURE R PROJECTSYEAR ENDED JUNE 30, 2016
Variance with Final Budget
Budget Amounts Actual PositiveOriginal Final Amounts (Negative)
Budgetary Fund Balance, July 1 -$ -$ -$ -$ Resources (Inflows):Use of money and property - - 7,882 7,882 Refunding bonds issued - - 13,490,664 13,490,664
Amounts Available for Appropriations - - 13,498,546 13,498,546 Charges to Appropriation (Outflow):Capital outlay - 163,000 162,976 24
Total Charges to Appropriations - 163,000 162,976 24
Budgetary Fund Balance, June 30 -$ (163,000)$ 13,335,570$ 13,498,570$
139
CITY OF MONROVIA
BUDGETARY COMPARISON SCHEDULEHILLSIDE ACQUISITION DEBT SERVICEYEAR ENDED JUNE 30, 2016
Variance with Final Budget
Budget Amounts Actual PositiveOriginal Final Amounts (Negative)
Budgetary Fund Balance, July 1 204,663$ 204,663$ 204,663$ -$ Resources (Inflows):Taxes 758,000 758,000 728,976 (29,024) Use of money and property 1,500 1,500 1,439 (61)
Amounts Available for Appropriations 964,163 964,163 935,078 (29,085) Charges to Appropriations (Outflow):Debt service: Principal retirement 300,000 300,000 300,000 - Interest and fiscal charges 242,569 242,569 242,243 326 Transfers out 83,000 83,000 82,093 907
Total Charges to Appropriations 625,569 625,569 624,336 1,233
Budgetary Fund Balance, June 30 338,594$ 338,594$ 310,742$ (27,852)$
140
CITY OF MONROVIA
BUDGETARY COMPARISON SCHEDULELIBRARY BOND DEBT SERVICEYEAR ENDED JUNE 30, 2016
Variance withFinal Budget
Budget Amounts Actual PositiveOriginal Final Amounts (Negative)
Budgetary Fund Balance, July 1 835,024$ 835,024$ 835,024$ -$ Resources (Inflows):Taxes 1,050,000 1,050,000 1,026,033 (23,967) Use of money and property 3,000 3,000 5,981 2,981
Amounts Available for Appropriations 1,888,024 1,888,024 1,867,038 (20,986) Charges to Appropriations (Outflow):General government - - 62 (62) Debt service: Principal retirement 360,000 360,000 360,000 - Interest and fiscal charges 644,549 644,549 643,817 732
Total Charges to Appropriations 1,004,549 1,004,549 1,003,879 670
Budgetary Fund Balance, June 30 883,475$ 883,475$ 863,159$ (20,316)$
141
CITY OF MONROVIA
BUDGETARY COMPARISON SCHEDULEPENSION OBLIGATION BOND DEBT SERVICEYEAR ENDED JUNE 30, 2016
Variance with Final Budget
Budget Amounts Actual PositiveOriginal Final Amounts (Negative)
Budgetary Fund Balance, July 1 10,212$ 10,212$ 10,212$ -$ Resources (Inflows):Use of money and property 6,000 6,000 1,024 (4,976) Transfers in 1,134,675 1,134,675 1,136,106 1,431
Amounts Available for Appropriations 1,150,887 1,150,887 1,147,342 (3,545) Charges to Appropriations (Outflow):Debt service: Principal retirement 385,000 385,000 385,000 - Interest and fiscal charges 751,000 751,000 751,106 (106)
Total Charges to Appropriations 1,136,000 1,136,000 1,136,106 (106)
Budgetary Fund Balance, June 30 14,887$ 14,887$ 11,236$ (3,651)$
142
CITY OF MONROVIA
BUDGETARY COMPARISON SCHEDULEPROPOSITION C AND MEASURE R DEBT SERVICEYEAR ENDED JUNE 30, 2016
Variance with Final Budget
Budget Amounts Actual PositiveOriginal Final Amounts (Negative)
Budgetary Fund Balance, July 1 -$ -$ -$ -$ Resources (Inflows):Use of money and property - 1,000 1,300 300 Lease revenue bonds issued - 109,000 109,336 336 Bond premium - 940,000 938,901 (1,099)
Amounts Available for Appropriations - 1,050,000 1,049,537 (463) Charges to Appropriation (Outflow):Debt service: Interest and fiscal charges - 250,000 246,215 3,785
Total Charges to Appropriations - 250,000 246,215 3,785
Budgetary Fund Balance, June 30 -$ 800,000$ 803,322$ 3,322$
143
CITY OF MONROVIA
BUDGETARY COMPARISON SCHEDULEMILLER MEMORIAL TRUSTYEAR ENDED JUNE 30, 2016
Variance with Final Budget
Budget Amounts Actual PositiveOriginal Final Amounts (Negative)
Budgetary Fund Balance, July 1 99,397$ 99,397$ 99,397$ -$ Resources (Inflows):Use of money and property 600 600 772 172
Amounts Available for Appropriations 99,997 99,997 100,169 172
Budgetary Fund Balance, June 30 99,997$ 99,997$ 100,169$ 172$
144
NON MAJOR PROPRIETARY FUNDS
Proprietary Funds are used to account for operations that are financed and operated in
a manner similar to private business enterprises where the intent of the governing body
is to ensure that the costs of providing goods or services to the general public, on a
continuing basis, be financed or recovered primarily through user charges. Funds
included are:
Storm Drain Fund - Established in fiscal year 1993-94 to implement and administer the
mandated cleanup of the storm drain system as required under federal regulations
(NPDES - National Pollution Discharge Elimination System Act). Also, to account for
routine maintenance costs associated with debris and catch basin facilities.
Street Sweeping Fund - To account for citywide street sweeping services provided to
all areas of the community. City owned parking lots are swept as part of this activity. All
costs of providing this service are accounted for in this fund, including contracted
services, administration, billing, and overhead.
Waste Management Fund - To account for the State mandated AB939 Solid Waste
Management program and other waste management activities. This fund tracks all
costs associated with the preparation, adoption, and implementation of a
comprehensive waste management program.
145
CITY OF MONROVIA
COMBINING STATEMENT OF NET POSITIONNON-MAJOR PROPRIETARY FUNDS JUNE 30, 2016
Assets and Deferred Outflows of Resources:Totals
Assets:Current:
Cash and investments 1,546,436$ 252,801$ 1,809,248$ 3,608,485$ Receivables:
Accounts 27,295 26,502 192,784 246,581 Due from other funds - 57,159 116,101 173,260
Total Current Assets 1,573,731 336,462 2,118,133 4,028,326
Noncurrent:Capital assets - net of accumulated depreciation 371,282 - - 371,282
Total Noncurrent Assets 371,282 - - 371,282
Total Assets 1,945,013 336,462 2,118,133 4,399,608
Deferred Outflows of Resources:Deferred pension related items 519 - 49,513 50,032
Total Deferred Outflows of Resources 519 - 49,513 50,032
Total Assets and Deferred Outflows of Resources 1,945,532$ 336,462$ 2,167,646$ 4,449,640$
Liabilities, Deferred Inflows of Resources, and Net Position:
Liabilities:Current:
Accounts payable 12,715$ 13,827$ 3,430$ 29,972$ Unearned revenues - - 22,891 22,891 Deposits payable - - 129,034 129,034 Due to other funds 1,155,711 - - 1,155,711
Total Current Liabilities 1,168,426 13,827 155,355 1,337,608
Noncurrent:Advances from other funds 23,224 - 23,224 46,448 Net pension liability 131,030 - 850,523 981,553
Total Noncurrent Liabilities 154,254 - 873,747 1,028,001
Total Liabilities 1,322,680 13,827 1,029,102 2,365,609
Deferred Inflows of Resources:Deferred pension related items 17,616 - 73,361 90,977
Total Deferred Inflows of Resources 17,616 - 73,361 90,977
Net Position:Net investment in capital assets 371,282 - - 371,282 Unrestricted 233,954 322,635 1,065,183 1,621,772
Total Net Position 605,236 322,635 1,065,183 1,993,054
Total Liabilities, Deferred Inflows of Resources, and Net Position 1,945,532$ 336,462$ 2,167,646$ 4,449,640$
Waste Management
Business-Type Activities - Enterprise Funds
Storm Drain Street
Sweeping
146
CITY OF MONROVIA
COMBINING STATEMENT OF REVENUES, EXPENSESAND CHANGES IN FUND NET POSITIONNON-MAJOR PROPRIETARY FUNDS YEAR ENDED JUNE 30, 2016
TotalsOperating Revenues:Sales and service charges 286,604$ 211,107$ 1,417,668$ 1,915,379$ Miscellaneous 1,170 - 10,175 11,345
Total Operating Revenues 287,774 211,107 1,427,843 1,926,724
Operating Expenses:Salaries and employee benefits 2,918 1,488 202,865 207,271 Professional and contract services 155,525 95,619 24,212 275,356 Maintenance and supplies 45,567 8,080 132,298 185,945 Repairs and replacements 2,245 - - 2,245 Depreciation expense 18,155 - - 18,155
Total Operating Expenses 224,410 105,187 359,375 688,972
Operating Income (Loss) 63,364 105,920 1,068,468 1,237,752
Nonoperating Revenues (Expenses):Intergovernmental - - 22,048 22,048 Interest revenue 11,781 2,063 15,867 29,711 Interest expense (100) - (100) (200)
Total Nonoperating Revenues (Expenses) 11,681 2,063 37,815 51,559
Income (Loss) Before Transfers 75,045 107,983 1,106,283 1,289,311
Transfers in - 30,000 - 30,000 Transfers out (48,255) (38,340) (1,252,517) (1,339,112)
Changes in Net Position 26,790 99,643 (146,234) (19,801)
Net Position:
Beginning of Year 578,446 222,992 1,211,417 2,012,855
End of Fiscal Year 605,236$ 322,635$ 1,065,183$ 1,993,054$
Waste Management
Business-Type Activities - Enterprise Funds
Storm Drain Street
Sweeping
147
CITY OF MONROVIA
COMBINING STATEMENT OF CASH FLOWSNON-MAJOR PROPRIETARY FUNDSYEAR ENDED JUNE 30, 2016
TotalsCash Flows from Operating Activities:Cash received from customers and users 285,671$ 210,492$ 1,480,830$ 1,976,993$ Cash paid to suppliers for goods and services (327,674) (129,805) (217,051) (674,530) Cash paid to employees for services (5,884) (56,054) (243,590) (305,528)
Net Cash Provided by Operating Activities (47,887) 24,633 1,020,189 996,935
Cash Flows from Non-CapitalFinancing Activities:
Cash transfers out (48,255) (38,340) (1,252,517) (1,339,112) Cash transfers in - 30,000 - 30,000 Repayment received (paid) from other funds 388,974 - - 388,974 Cash paid for advances to other funds (11,611) - (11,611) (23,222) Cash given for interfund receivables - (7,659) (17,539) (25,198) Intergovernmental - - 22,048 22,048
Net Cash Provided by (Used in) Non-Capital Financing Activities 329,108 (15,999) (1,259,619) (946,510)
Cash Flows from Capital and Related Financing Activities:
Interest paid on capital debt (100) - (100) (200)
Net Cash Used in Capital and Related Financing Activities (100) - (100) (200)
Cash Flows from Investing Activities:Interest received 11,781 2,063 15,867 29,711
Net Cash Provided by Investing Activities 11,781 2,063 15,867 29,711
Net Increase in Cash and Cash Equivalents 292,902 10,697 (223,663) 79,936
Cash and Cash Equivalents at Beginning of Year 1,253,534 242,104 2,032,911 3,528,549
Cash and Cash Equivalents at End of Year 1,546,436$ 252,801$ 1,809,248$ 3,608,485$
Reconciliation of Operating Income to Net CashProvided (Used) by Operating Activities:Operating income 63,364$ 105,920$ 1,068,468$ 1,237,752$ Adjustments to reconcile operating income net cash provided (used) by operating activities:
Depreciation 18,155 - - 18,155 (Increase) decrease in accounts receivable (2,103) (615) 49,030 46,312 (Increase) decrease in deferred pension related outflows 6,082 3,813 1,957 11,852 Increase (decrease) in accounts payable (124,337) (26,106) (60,541) (210,984) Increase (decrease) in unearned revenue - - 3,739 3,739 Increase (decrease) in deposits payable - - 218 218Increase (decrease) in compensated absences (2,676) - (13,084) (15,760) Increase (decrease) in accrued liabilities - - - - Increase (decrease) in net pension liability (5,980) (51,597) 7,803 (49,774) Increase (decrease) in deferred pension related inflows (392) (6,782) (37,401) (44,575)
Total Adjustments (111,251) (81,287) (48,279) (240,817)
Net Cash Provided by Operating Activities (47,887)$ 24,633$ 1,020,189$ 996,935$
Waste Management
Business-Type Activities - Enterprise Funds
Storm Drain Street
Sweeping
148
INTERNAL SERVICE FUNDS
Established to finance and account for goods and services provided by one City
department to other City departments on a cost-reimbursement basis. Such
reimbursements are accounted for as quasi external interfund transactions.
Accordingly, they are treated as operating revenues of the Internal Service Fund, and as
current operating expenditures or operating expenses, as appropriate, of the fund(s)
receiving the service. The fee charged is designed to accumulate the total costs
(including depreciation and overhead) of providing the service. Funds included are:
Facilities Maintenance Fund - This fund serves as a cost center for facility
maintenance activities and as a depreciation reserve to meet large cyclical and capital
replacement expenses.
Equipment Pool Fund - To account for the costs of operating a central maintenance
and refueling facility and to provide for replacement of automotive and motorized
equipment used by other City departments. In addition, this fund accounts for the
operating costs of maintaining fire equipment and accumulates monies for the
replacement of depreciated fire rolling stock and specialized equipment.
Central Services Fund - To account for information systems services and the
centralized purchasing of materials and supplies, including reprographic services
provided to various other operating departments. This fund also accumulates monies
for the maintenance and replacement of the City-wide telephone system.
Liability Insurance Fund - To account for the costs to operate a City-wide general and
automobile liability program.
Workers' Compensation Insurance Fund - To account for the costs to operate a
City-wide self-insured workers' compensation program.
Unemployment Insurance Fund - To account for the costs to operate a City-wide
self-insured unemployment insurance program.
149
CITY OF MONROVIA
COMBINING STATEMENT OF NET POSITIONINTERNAL SERVICE FUNDSJUNE 30, 2016
Assets and Deferred Outflows:Assets:Current:
Cash and investments 563,855$ 2,103,105$ 502,748$ 1,033,340$ Receivables:
Accounts 4,876 57,459 15,834 755 Prepaid costs - - 8,940 2,045 Inventories - - 1,670 -
Total Current Assets 568,731 2,160,564 529,192 1,036,140
Noncurrent:Capital assets - net of accumulated depreciation 1,836,546 3,031,055 137,875 -
Total Noncurrent Assets 1,836,546 3,031,055 137,875 -
Total Assets 2,405,277 5,191,619 667,067 1,036,140
Deferred Outflows of Resources:Deferred pension related items 63,218 6,561 104,037 19,238
Total Deferred Outflows of Resources 63,218 6,561 104,037 19,238
Total Assets and Deferred Outflows of Resources 2,468,495$ 5,198,180$ 771,104$ 1,055,378$
Liabilities, Deferred Inflows of Resources, and Net Position:
Liabilities:Current:
Accounts payable 109,250$ 155,352$ 29,060$ 27,656$ Accrued liabilities 11,813 3,961 - - Accrued compensated absences 5,555 154 69,202 - Accrued claims and judgments - - - 120,657 Bonds, notes, and capital leases - 135,308 - -
Total Current Liabilities 126,618 294,775 98,262 148,313
Noncurrent:Advances from other funds 46,448 - - - Accrued compensated absences 2,160 60 26,912 - Accrued claims and judgments - - - 11,025 Bonds, notes, and capital leases - 271,322 - - Net pension liability 1,088,278 7,854 1,167,422 386,679
Total Noncurrent Liabilities 1,136,886 279,236 1,194,334 397,704
Total Liabilities 1,263,504 574,011 1,292,596 546,017
Deferred Inflows of Resources:Deferred pension related items 95,986 - 71,128 36,459
Total Deferred Inflows of Resources 95,986 - 71,128 36,459
Net Position:Net investment in capital assets 1,836,546 2,624,425 137,875 - Unrestricted (727,541) 1,999,744 (730,495) 472,902
Total Net Position 1,109,005 4,624,169 (592,620) 472,902
Total Liabilities and Net Position 2,468,495$ 5,198,180$ 771,104$ 1,055,378$
Facilities Maintenance
Equipment Pool
Governmental Activities - Internal Service Funds
Central Services
Liability Insurance
150
CITY OF MONROVIA
COMBINING STATEMENT OF NET POSITIONINTERNAL SERVICE FUNDSJUNE 30, 2016
Assets and Deferred Outflows:Assets:Current:
Cash and investmentsReceivables:
AccountsPrepaid costsInventories
Total Current Assets
Noncurrent:Capital assets - net of accumulated depreciation
Total Noncurrent Assets
Total Assets
Deferred Outflows of Resources:Deferred pension related items
Total Deferred Outflows of Resources
Total Assets and Deferred Outflows of Resources
Liabilities, Deferred Inflows of Resources, and Net Position:
Liabilities:Current:
Accounts payableAccrued liabilitiesAccrued compensated absencesAccrued claims and judgmentsBonds, notes, and capital leases
Total Current Liabilities
Noncurrent:Advances from other fundsAccrued compensated absencesAccrued claims and judgmentsBonds, notes, and capital leasesNet pension liability
Total Noncurrent Liabilities
Total Liabilities
Deferred Inflows of Resources:Deferred pension related items
Total Deferred Inflows of Resources
Net Position:Net investment in capital assetsUnrestricted
Total Net Position
Total Liabilities and Net Position
Totals
1,358,651$ 186,887$ 5,748,586$
- - 78,924 - - 10,985 - - 1,670
1,358,651 186,887 5,840,165
- - 5,005,476
- - 5,005,476
1,358,651 186,887 10,845,641
13,733 - 206,787
13,733 - 206,787
1,372,384$ 186,887$ 11,052,428$
46,090$ -$ 367,408$ - - 15,774 - - 74,911
1,038,234 - 1,158,891 - - 135,308
1,084,324 - 1,752,292
- - 46,448 - - 29,132
804,961 - 815,986 - - 271,322
313,148 - 2,963,381
1,118,109 - 4,126,269
2,202,433 - 5,878,561
31,158 - 234,731
31,158 - 234,731
- - 4,598,846 (861,207) 186,887 340,290
(861,207) 186,887 4,939,136
1,372,384$ 186,887$ 11,052,428$
Workers' Compensation
Insurance Unemployment
Insurance
Governmental Activities - Internal Service Funds
151
CITY OF MONROVIA
COMBINING STATEMENT OF REVENUES, EXPENSESAND CHANGES IN FUND NET POSITIONINTERNAL SERVICE FUNDSYEAR ENDED JUNE 30, 2016
Operating Revenues:Sales and service charges 16,400$ 466,279$ -$ -$ Interdepartmental charges 1,800,000 1,501,738 1,132,514 1,500,000 Miscellaneous 29,512 4,747 45,598 58,042
Total Operating Revenues 1,845,912 1,972,764 1,178,112 1,558,042
Operating Expenses:Salaries and employee benefits 269,765 39,514 443,700 86,463 Professional and contract services 85,574 122,297 126,251 66,605 Maintenance and Supplies 792,615 579,118 411,508 10,512 Utilities 393,402 7,852 243,409 - Repairs and replacements 46,041 342,221 2,003 - Insurance - - - 175,344 Depreciation expense 78,451 524,259 10,284 - Other operating expense 10,547 - - - Claims expense - - - -
Total Operating Expenses 1,676,395 1,615,261 1,237,155 338,924
Operating Income 169,517 357,503 (59,043) 1,219,118
Nonoperating Revenues (Expenses):Interest revenue 4,959 20,672 4,527 5,483 Interest expense (202) (45,256) - -
Total Nonoperating Revenue (Expenses) 4,757 (24,584) 4,527 5,483
Income (Loss) Before Transfers 174,274 332,919 (54,516) 1,224,601
Transfers in 63,218 6,561 104,037 19,254 Transfers out (298,272) (95,379) (162,358) -
Changes in Net Position (60,780) 244,101 (112,837) 1,243,855
Net Position:
Beginning of Year 1,169,785 4,380,068 (479,783) (770,953)
End of Fiscal Year 1,109,005$ 4,624,169$ (592,620)$ 472,902$
Central Services
Liability Insurance
Governmental Activities - Internal Service Funds
Facilities Maintenance
Equipment Pool
152
CITY OF MONROVIA
COMBINING STATEMENT OF REVENUES, EXPENSESAND CHANGES IN FUND NET POSITIONINTERNAL SERVICE FUNDSYEAR ENDED JUNE 30, 2016
Operating Revenues:Sales and service chargesInterdepartmental chargesMiscellaneous
Total Operating Revenues
Operating Expenses:Salaries and employee benefitsProfessional and contract servicesMaintenance and SuppliesUtilitiesRepairs and replacementsInsuranceDepreciation expenseOther operating expenseClaims expense
Total Operating Expenses
Operating Income
Nonoperating Revenues (Expenses):Interest revenueInterest expense
Total Nonoperating Revenue (Expenses)
Income (Loss) Before Transfers
Transfers inTransfers out
Changes in Net Position
Net Position:
Beginning of Year
End of Fiscal Year
Totals
-$ -$ 482,679$ 1,874,746 101,014 7,910,012
45,790 - 183,689
1,920,536 101,014 8,576,380
60,345 - 899,787 23,033 - 423,760 16,782 - 1,810,535
- - 644,663 - - 390,265 - - 175,344 - - 612,994 - - 10,547 - 12,888 12,888
100,160 12,888 4,980,783
1,820,376 88,126 3,595,597
9,783 1,372 46,796 - - (45,458)
9,783 1,372 1,338
1,830,159 89,498 3,596,935
13,748 - 206,818 - - (556,009)
1,843,907 89,498 3,247,744
(2,705,114) 97,389 1,691,392
(861,207)$ 186,887$ 4,939,136$
Workers' Compensation
Insurance Unemployment
Insurance
Governmental Activities - Internal Service Funds
153
CITY OF MONROVIA
COMBINING STATEMENT OF CASH FLOWSINTERNAL SERVICE FUNDSYEAR ENDED JUNE 30, 2016
Cash Flows from Operating Activities:Cash received from interfund service provided 1,843,436$ 1,968,780$ 1,162,278$ 1,589,544$ Cash paid to suppliers for goods and services (916,349) (1,046,167) (524,040) (113,832) Cash paid to employees for services (712,994) (41,898) (760,791) (97,203) Cash paid for insurance claims - - - (1,616,479)
Net Cash Provided by Operating Activities 214,093 880,715 (122,553) (237,970)
Cash Flows from Non-CapitalFinancing Activities:
Cash transfers out (298,272) (95,379) (162,358) - Cash transfers in 63,218 6,561 104,037 19,254 Cash paid for advances to other funds (23,222) - - -
Net Cash Provided by (Used in) Non-Capital Financing Activities (258,276) (88,818) (58,321) 19,254
Cash Flows from Capital and Related Financing Activities:
Proceeds from capital debt - 70,990 - - Acquisition and construction of capital assets (19,840) (1,698,644) (109,778) - Principal paid on capital debt - (137,688) - - Interest paid on capital debt (202) (45,256) - - Proceeds from sales of capital assets - 13,001 - -
Net Cash Used in Capital and Related Financing Activities (20,042) (1,797,597) (109,778) -
Cash Flows from Investing Activities:Interest received 4,959 20,672 4,527 5,483
Net Cash Provided by Investing Activities 4,959 20,672 4,527 5,483
Net Increase in Cash and Cash Equivalents (59,266) (985,028) (286,125) (213,233)
Cash and Cash Equivalents at Beginning of Year 623,121 3,088,133 788,873 1,246,573
Cash and Cash Equivalents at End of Year 563,855$ 2,103,105$ 502,748$ 1,033,340$
Reconciliation of Operating Income to Net CashProvided by (Used in) Operating Activities:Operating income 169,517$ 357,503$ (59,043)$ 1,219,118$ Adjustments to reconcile operating income (loss) net cash provided (used) by operating activities:
Depreciation 78,451 524,259 10,284 - (Increase) decrease in accounts receivable (2,476) (3,984) (15,834) 31,502 (Increase) decrease in inventories - - (126) - (Increase) decrease in prepaid expense - - 8,733 (2,045) (Increase) decrease in deferred pension related outflows 17,810 (6,561) (7,820) 5,076 Increase (decrease) in accounts payable 7,881 (2,531) 7,115 (34,670) Increase (decrease) in claims and judgments - - - (1,441,135) Increase (decrease) in compensated absences (15,802) 214 (15,603) - Increase (decrease) in accrued liabilities 11,813 3,961 - - Increase (decrease) in net pension liability (5,348) 7,854 28,328 (1,284) Increase (decrease) in deferred pension related inflows (47,753) - (78,587) (14,532)
Total Adjustments 44,576 523,212 (63,510) (1,457,088)
Net Cash Provided by Operating Activities 214,093$ 880,715$ (122,553)$ (237,970)$
Facilities Maintenance
Equipment Pool
Central Services
Liability Insurance
Governmental Activities - Internal Service Funds
154
CITY OF MONROVIA
COMBINING STATEMENT OF CASH FLOWSINTERNAL SERVICE FUNDSYEAR ENDED JUNE 30, 2016
Cash Flows from Operating Activities:Cash received from interfund service providedCash paid to suppliers for goods and servicesCash paid to employees for servicesCash paid for insurance claims
Net Cash Provided by Operating Activities
Cash Flows from Non-CapitalFinancing Activities:
Cash transfers outCash transfers inCash paid for advances to other funds
Net Cash Provided by (Used in) Non-Capital Financing Activities
Cash Flows from Capital and Related Financing Activities:
Proceeds from capital debtAcquisition and construction of capital assetsPrincipal paid on capital debtInterest paid on capital debtProceeds from sales of capital assets
Net Cash Used in Capital and Related Financing Activities
Cash Flows from Investing Activities:Interest received
Net Cash Provided by Investing Activities
Net Increase in Cash and Cash Equivalents
Cash and Cash Equivalents at Beginning of Year
Cash and Cash Equivalents at End of Year
Reconciliation of Operating Income to Net CashProvided by (Used in) Operating Activities:Operating income Adjustments to reconcile operating income (loss) net cash provided (used) by operating activities:
Depreciation(Increase) decrease in accounts receivable(Increase) decrease in inventories(Increase) decrease in prepaid expense(Increase) decrease in deferred pension related outflowsIncrease (decrease) in accounts payableIncrease (decrease) in claims and judgmentsIncrease (decrease) in compensated absencesIncrease (decrease) in accrued liabilitiesIncrease (decrease) in net pension liabilityIncrease (decrease) in deferred pension related inflows
Total Adjustments
Net Cash Provided by Operating Activities
Totals
1,920,536$ 101,014$ 8,585,588$ 6,077 (9,374) (2,603,685)
(68,012) (55,624) (1,736,522) (2,377,343) (12,888) (4,006,710)
(518,742) 23,128 238,671
- - (556,009) 13,748 - 206,818
- - (23,222)
13,748 - (372,413)
- - 70,990 - - (1,828,262) - - (137,688) - - (45,458) - - 13,001
- - (1,927,417)
9,783 1,372 46,796
9,783 1,372 46,796
(495,211) 24,500 (2,014,363)
1,853,862 162,387 7,762,949
1,358,651$ 186,887$ 5,748,586$
1,820,376$ 88,126$ 3,595,597$
- - 612,994 - - 9,208 - - (126) - - 6,688
5,548 3,775 17,828 45,892 (9,374) 14,313
(2,377,343) - (3,818,478) - - (31,191) - - 15,774
(2,841) (52,499) (25,790) (10,374) (6,900) (158,146)
(2,339,118) (64,998) (3,356,926)
(518,742)$ 23,128$ 238,671$
Unemployment Insurance
Governmental Activities - Internal Service Funds
Workers' Compensation
Insurance
155
CITY OF MONROVIA
COMBINING STATEMENT OF CHANGES IN POSITION AND LIABILITIESALL AGENCY FUNDSYEAR ENDED JUNE 30, 2016
Balance Balance7/1/2015 Additions Deductions 6/30/2016
Deposit
Assets:Pooled cash and investments 1,119,506$ 804,883$ 346,411$ 1,577,978$ Receivables:
Accounts 17,613 32,402 28,976 21,039 Total Assets 1,137,119$ 837,285$ 375,387$ 1,599,017$
Liabilities:Accounts payable 26,750$ 348,403$ 344,494$ 30,659$ Deposits payable 1,110,369 798,155 340,166 1,568,358
Total Liabilities 1,137,119$ 1,146,558$ 684,660$ 1,599,017$
156
CITY OF MONROVIA
COMBINING STATEMENT OF FIDUCIARY NET POSITIONPRIVATE PURPOSE TRUST FUNDSJUNE 30, 2016
Assets:Pooled cash and investments 172,884$ 7,471,989$ 7,644,873$ Receivables:
Accounts - 29,787 29,787 Notes and loans - 2,106,030 2,106,030
Prepaid costs - 328,431 328,431 Land held for resale - 5,674,434 5,674,434 Restricted assets:
Cash and investments with fiscal agents - 3,252,651 3,252,651 Capital assets:
Capital assets, not being depreciated - 400,638 400,638 Capital assets, net of accumulated depreciation - 1,677,471 1,677,471
Total Assets 172,884 20,941,431 21,114,315
Deferred Outflows of Resources:Deferred charge on refunding - 1,260,798 1,260,798
Total Deferred Outflows of Resources - 1,260,798 1,260,798
Liabilities:Accounts payable - 4,114 4,114 Accrued interest - 665,645 665,645 Advances from City - 2,551,385 2,551,385 Long-term liabilities:
Due in one year - 3,855,000 3,855,000 Due in more than one year - 59,163,786 59,163,786
.Total Liabilities - 66,239,930 66,239,930
Net Position:Held in trust for educational material 172,884 - 172,884 Held in trust for other purposes - (44,037,701) (44,037,701)
Total Net Position 172,884$ (44,037,701)$ (43,864,817)$
Total
Private-Purpose Trust Funds
Bartle Memorial Trust
Successor Agency of the Former RDA
157
CITY OF MONROVIA
COMBINING STATEMENT OF CHANGES IN FIDUCIARY NET POSITIONPRIVATE PURPOSE TRUST FUNDSJUNE 30, 2016
Additions:Taxes -$ 4,217,748$ 4,217,748$ Interest, rental income and change in fair value of investments 1,384 417,060 418,444
Total Additions 1,384 4,634,808 4,636,192
Deductions:Administrative expenses 50,000 280,587 330,587 Contractual services - 35,818 35,818 Interest expense - 3,157,793 3,157,793 Depreciation expense - 47,071 47,071 Loss on sale of property - 1,667,976 1,667,976
Total Deductions 50,000 5,189,245 5,239,245
Changes in Net Position (48,616) (554,437) (603,053)
Net Position:Net Position - Beginning of the Year 221,500 (43,483,264) (43,261,764)
Net Position - End of the Year 172,884$ (44,037,701)$ (43,864,817)$
Private-Purpose Trust Funds
Bartle Memorial Trust
Successor Agency of the Former RDA Total
158
Statistical Section
Contents
Financial TrendsThese schedules contain trend information to help the reader understand how the
City's financial performance and well-being have changed over time.
Revenue CapacityThese schedules contain information to help the reader assess the factors
affecting the City's ability to generate its property and sales taxes.
Debt CapacityThese schedules present information to help the reader assess the affordability of
the City's current levels of outstanding debt and the City's ability to issue additional
debt in the future.
Demographic and Economic InformationThese schedules offer demographic and economic indicators to help the reader
understand the environment within which the City's financial activities take place
and to help make comparisons over time and with other governments.
Operating InformationThese schedules contain information about the city's operations and resources to
help the reader understand how the City's financial information relates to the
services the City provides and the activities it performs.
This part of the City of Monrovia's comprehensive annual financial report presents
detailed information as a context for understanding what the information in the financial
statements, note disclosures, and required supplementary information says about the
City's overall financial health.
Sources: Unless otherwise noted, the information in these schedules is derived from the
comprehensive annual financial reports for the relevant year. The City has presented five years of
financial information for the financial schedules.
159
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
Gov
ernm
ent a
ctiv
ities
Inve
sted
in c
apita
l ass
ets
75,4
99,9
86$
54,0
03,2
81$
68,1
77,8
22$
66,5
34,9
92$
63,9
14,8
74$
65,4
85,6
37$
61,2
77,6
53$
66,2
32,6
69$
77,2
17,7
53$
81,2
09,7
49$
Res
trict
ed43
,580
,496
20
,900
,217
11
,977
,766
10
,017
,948
7,48
8,49
010
,814
,928
8,13
8,80
39,
085,
685
9,16
2,28
134
,323
,371
Unr
estri
cted
(66,
784,
438)
(27,
606,
155)
(45,
869,
176)
(52,
443,
982)
(52,
872,
687)
(9,8
61,3
00)
(4,8
95,0
26)
(9,2
61,0
92)
(80,
246,
943)
(97,
205,
508)
Tota
l gov
ernm
enta
l act
iviti
es n
et p
ositi
on52
,296
,044
$
47
,297
,343
$
34
,286
,412
$
24
,108
,958
$
18
,530
,677
$
66
,439
,265
$
64
,521
,430
$
66
,057
,262
$
6,
133,
091
$
18
,327
,612
$
Bus
ines
s-ty
pe a
ctiv
ities
Inve
sted
in c
apita
l ass
ets
13,6
86,0
29$
14,9
73,7
84$
14,6
58,7
59$
14,3
53,2
22$
14,1
85,7
38$
13,9
86,9
85$
13,6
96,0
19$
13,4
33,9
53$
13,1
41,9
93$
12,5
00,9
44$
Unr
estri
cted
9,47
2,81
6
9,97
0,72
0
10,7
50,3
56
10,8
32,9
5611
,186
,996
11,2
82,5
6112
,236
,913
13,0
33,4
004,
388,
193
3,96
8,33
0To
tal b
usin
ess-
type
act
iviti
es n
et p
ositi
on23
,158
,845
$
24
,944
,504
$
25
,409
,115
$
25
,186
,178
$
25
,372
,734
$
25
,269
,546
$
25
,932
,932
$
26
,467
,353
$
17
,530
,186
$
16
,469
,274
$
Prim
ary
gove
rnm
ent
Inve
sted
in c
apita
l ass
ets
89,1
86,0
15$
68,9
77,0
65$
82,8
36,5
81$
80,8
88,2
14$
78,1
00,6
12$
79,4
72,6
22$
74,9
73,6
72$
79,6
66,6
22$
90,3
59,7
46$
93,7
10,6
93$
Res
trict
ed43
,580
,496
20
,900
,217
11
,977
,766
10
,017
,948
7,
488,
490
10
,814
,928
8,
138,
803
9,
074,
278
9,
162,
281
34
,323
,371
U
nres
trict
ed(5
7,31
1,62
2)
(1
7,63
5,43
5)
(3
5,11
8,82
0)
(4
1,61
1,02
6)
(4
1,68
5,69
1)
1,
421,
261
7,
341,
887
3,
783,
715
(7
5,85
8,75
0)
(9
3,23
7,17
8)
To
tal p
rimar
y go
vern
men
t act
iviti
es n
et p
ositi
on75
,454
,889
$
72
,241
,847
$
59
,695
,527
$
49
,295
,136
$
43
,903
,411
$
91
,708
,811
$
90
,454
,362
$
92
,524
,615
$
23
,663
,277
$
34
,796
,886
$
Fisc
al Y
ear
CIT
Y O
F M
ON
RO
VIA
Net
Pos
ition
by
Com
pone
ntLa
st T
en F
isca
l Yea
rs(A
ccru
al B
asis
of A
ccou
ntin
g)
161
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
Expe
nses
Gov
ernm
enta
l Act
iviti
es:
Gen
eral
gov
ernm
ent
7,11
5,64
2$
7,64
5,49
4$
14,6
90,8
87$
11,3
23,0
45$
7,80
6,61
9$
11,5
37,6
71$
6,03
1,35
8$
6,19
4,41
6$
6,31
6,04
9$
6,18
0,43
1$
Pub
lic s
afet
y22
,593
,957
27
,014
,096
30
,237
,704
29
,668
,311
31,9
92,3
3229
,263
,648
29,0
76,2
7129
,145
,200
30,0
45,2
5230
,004
,707
Com
mun
ity d
evel
opm
ent
4,49
8,74
7
4,
821,
992
5,63
7,54
5
3,
566,
623
3,73
5,34
02,
998,
784
1,88
4,56
12,
524,
932
3,50
8,96
33,
852,
738
Com
mun
ity s
ervi
ces
3,94
0,23
0
3,
541,
063
4,32
8,97
2
4,
221,
050
4,04
4,49
23,
927,
271
3,82
3,05
34,
239,
048
4,34
2,03
84,
076,
224
Pub
lic w
orks
5,57
3,41
2
7,
573,
848
6,72
6,06
5
6,
578,
725
5,67
4,63
24,
398,
366
5,75
9,85
05,
530,
663
6,00
2,67
95,
446,
094
Inte
rest
on
long
-term
deb
t3,
816,
111
5,31
2,01
8
6,
601,
294
6,34
0,49
27,
212,
599
4,08
2,34
92,
022,
347
1,82
4,75
52,
000,
926
1,99
8,04
4
Tota
l Gov
ernm
enta
l Act
iviti
es E
xpen
ses
47,5
38,0
99
55,9
08,5
11
68,2
22,4
67
61,6
98,2
46
60,4
66,0
14
56,2
08,0
89
48,5
97,4
40
49,4
59,0
14
52,2
15,9
07
51,5
58,2
38
Bus
ines
s-Ty
pe A
ctiv
ities
:W
ater
5,
915,
352
4,99
4,39
0
5,
481,
405
5,54
7,93
05,
227,
978
5,24
8,40
35,
213,
823
5,86
4,40
96,
330,
266
6,25
9,23
2S
ewer
704,
328
81
4,11
8
558,
679
62
6,71
050
5,29
951
6,03
153
4,25
259
3,90
71,
001,
746
833,
572
Sto
rm d
rain
278,
523
30
8,70
1
337,
220
28
3,38
515
7,37
616
3,52
016
5,40
123
3,39
066
8,25
422
4,51
0S
treet
sw
eepi
ng23
4,93
5
236,
553
24
2,85
2
243,
356
209,
676
191,
631
188,
954
170,
970
203,
009
105,
187
Was
te m
anag
emen
t33
2,99
7
345,
245
33
5,78
9
306,
124
361,
184
395,
355
382,
775
471,
767
556,
717
359,
475
Tota
l Bus
ines
s-Ty
pe A
ctiv
ities
Exp
ense
s7,
466,
135
6,69
9,00
7
6,
955,
945
7,00
7,50
5
6,
461,
513
6,51
4,94
0
6,
485,
205
7,33
4,44
3
8,
759,
992
7,78
1,97
6
Tota
l Prim
ary
Gov
ernm
ent E
xpen
ses
55,0
04,2
34$
62,6
07,5
18$
75,1
78,4
12$
68,7
05,7
51$
66,9
27,5
27$
62,7
23,0
29$
55,0
82,6
45$
56,7
93,4
57$
60,9
75,8
99$
59,3
40,2
14$
Prog
ram
Rev
enue
sG
over
nmen
tal A
ctiv
ities
:C
harg
es fo
r ser
vice
s:G
ener
al g
over
nmen
t42
3,43
5$
388,
079
$
67
0,35
3$
633,
045
$
76
0,92
6$
840,
773
$
1,
019,
838
$
76
4,18
4$
1,75
9,64
0$
1,69
5,93
5$
Pub
lic s
afet
y2,
299,
621
2,32
9,64
3
2,
116,
014
2,07
9,84
82,
062,
508
2,76
0,23
72,
108,
552
2,27
6,14
92,
226,
628
2,66
9,68
6C
omm
unity
dev
elop
men
t97
8,03
1
1,16
8,69
4
1,
188,
330
884,
580
748,
759
1,14
9,75
981
0,33
11,
229,
953
1,17
6,16
92,
396,
273
Com
mun
ity s
ervi
ces
274,
882
1,
447,
181
1,45
7,36
2
1,
481,
477
1,47
6,37
01,
448,
002
1,46
9,00
11,
490,
209
1,49
1,75
51,
460,
641
Pub
lic w
orks
1,48
0,15
4
1,
064,
853
422,
130
69
2,97
964
5,72
795
0,92
965
6,76
61,
675,
944
487,
529
611,
954
Ope
ratin
g C
ontri
butio
ns2,
957,
773
8,07
9,03
9
9,
119,
603
9,30
6,79
59,
459,
910
8,71
4,12
67,
932,
635
8,79
1,53
78,
580,
298
8,17
9,14
1C
apita
l Con
tribu
tions
and
Gra
nts
7,45
8,54
7
(4
43,7
27)
3,
254,
503
732,
032
1,86
4,28
71,
102,
849
594,
847
1,67
0,94
912
,176
,977
8,09
9,03
8
Tota
l Gov
ernm
enta
l Act
iviti
es P
rogr
am R
even
ues
15,8
72,4
43
14,0
33,7
62
18,2
28,2
95
15,8
10,7
56
17,0
18,4
87
16,9
66,6
75
14,5
91,9
70
17,8
98,9
25
27,8
98,9
96
25,1
12,6
68
Bus
ines
s-Ty
pe A
ctiv
ities
:C
harg
es fo
r ser
vice
s: W
ater
7,
002,
185
6,14
4,37
5
6,
719,
182
6,24
6,55
16,
189,
598
6,04
0,60
26,
583,
725
7,02
5,06
06,
006,
480
6,33
2,22
2 S
ewer
719,
721
76
1,15
7
783,
411
78
6,96
580
1,76
175
4,96
580
6,44
183
0,44
280
4,77
51,
162,
961
Sto
rm d
rain
279,
861
28
1,22
8
278,
474
28
1,36
928
1,36
827
0,44
728
3,66
729
3,48
328
4,04
428
6,60
4 S
treet
sw
eepi
ng20
1,90
8
206,
727
20
4,04
8
205,
677
206,
267
197,
904
207,
598
214,
807
208,
687
211,
107
Was
te m
anag
emen
t35
3,72
3
350,
952
48
2,54
9
614,
354
724,
046
621,
036
1,15
8,01
81,
210,
551
1,70
3,83
21,
417,
668
Ope
ratin
g C
ontri
butio
ns-
- -
- -
- -
- -
22,0
48
Tota
l Bus
ines
s-Ty
pe A
ctiv
ities
Pro
gram
Rev
enue
s8,
557,
398
7,74
4,43
9
8,
467,
664
8,13
4,91
6
8,
203,
040
7,88
4,95
4
9,
039,
449
9,57
4,34
3
9,
007,
818
9,43
2,61
0
Tota
l Prim
ary
Gov
ernm
ent P
rogr
am R
even
ues
24,4
29,8
41$
21,7
78,2
01$
26,6
95,9
59$
23,9
45,6
72$
25,2
21,5
27$
24,8
51,6
29$
23,6
31,4
19$
27,4
73,2
68$
36,9
06,8
14$
34,5
45,2
78$
Net
(Exp
ense
)/Rev
enue
Gov
ernm
enta
l Act
iviti
es(3
1,66
5,65
6)
(41,
874,
749)
(4
9,99
4,17
2)
(45,
887,
490)
(4
3,44
7,52
7)
(39,
241,
414)
(3
4,00
5,47
0)
(31,
560,
089)
(2
4,31
6,91
1)
(26,
445,
570)
B
usin
ess-
Type
Act
iviti
es1,
091,
263
1,04
5,43
2
1,
511,
719
1,12
7,41
1
1,
741,
527
1,37
0,01
4
2,
554,
244
2,23
9,90
0
24
7,82
6
1,65
0,63
4
Tota
l Prim
ary
Gov
ernm
ent N
et E
xpen
se(3
0,57
4,39
3)
(40,
829,
317)
(4
8,48
2,45
3)
(44,
760,
079)
(4
1,70
6,00
0)
(37,
871,
400)
(3
1,45
1,22
6)
(29,
320,
189)
(2
4,06
9,08
5)
(24,
794,
936)
Fis
cal Y
ear
CIT
Y O
F M
ON
RO
VIA
Cha
nges
in N
et P
ositi
onLa
st T
en F
isca
l Yea
rs(A
ccru
al B
asis
of A
ccou
ntin
g)
162
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
Fis
cal Y
ear
CIT
Y O
F M
ON
RO
VIA
Cha
nges
in N
et P
ositi
onLa
st T
en F
isca
l Yea
rs(A
ccru
al B
asis
of A
ccou
ntin
g)
Gen
eral
Rev
enue
s an
d O
ther
Cha
nges
in N
et P
ositi
onG
over
nmen
tal A
ctiv
ities
:Ta
xes:
Pro
perty
taxe
s, le
vied
for g
ener
al p
urpo
se20
,438
,899
$
22
,435
,934
$
23
,167
,560
$
22
,536
,516
$
23
,430
,213
$
21
,693
,992
$
17
,889
,530
$
18
,470
,835
$
19
,026
,069
$
20
,521
,090
$
Tr
ansi
ent o
ccup
ancy
taxe
s70
5,59
6
964,
056
1,
040,
912
1,04
2,88
81,
179,
277
1,32
9,19
31,
454,
318
1,56
2,88
01,
760,
129
1,89
1,09
8S
ales
taxe
s6,
895,
605
7,01
0,35
4
6,
635,
741
6,40
4,61
36,
636,
440
10,3
68,6
937,
149,
117
7,30
0,38
58,
056,
915
9,45
1,39
4Fr
anch
ise
taxe
s81
2,58
3
806,
372
85
5,83
6
722,
647
779,
315
910,
643
614,
151
633,
585
599,
709
632,
425
Bus
ines
s lic
ense
s ta
xes
617,
047
60
2,77
6
572,
204
56
0,71
553
6,63
056
5,08
654
7,40
356
0,60
655
5,22
777
7,89
9O
ther
taxe
s2,
027,
875
977,
743
88
3,35
3
877,
189
1,22
5,93
01,
359,
121
1,17
0,52
51,
524,
077
1,24
3,54
31,
068,
417
Inte
rgov
ernm
enta
l, un
rest
ricte
d:
M
otor
Veh
icle
In L
ieu
226,
372
17
4,22
9
133,
794
11
8,37
720
4,95
932
,482
21,3
2840
,217
7,31
524
,576
Use
of m
oney
and
pro
perty
6,59
4,04
8
3,
295,
342
1,99
5,13
5
1,
349,
593
1,73
9,93
332
6,88
388
7,07
746
6,01
252
9,05
065
2,69
1G
ain
on th
e sa
le o
f cap
ital a
sset
- 17
2,52
9
206,
427
18
6,36
420
2,37
5-
- -
- -
Oth
er2,
217,
914
224,
366
19
1,98
4
306,
457
356,
988
800,
116
861,
699
876,
193
664,
172
755,
084
Ext
raor
dina
ry g
ain/
(loss
) on
diss
olut
ion
of R
DA
- -
- -
57,3
43,8
47-
- -
- Tr
ansf
ers
(325
,360
)
(2
25,5
36)
1,30
0,65
9
1,
604,
677
1,67
2,98
31,
551,
374
1,96
5,33
71,
816,
446
1,90
6,14
92,
865,
417
Tota
l Gov
ernm
enta
l Act
iviti
es40
,210
,579
36
,438
,165
36
,983
,605
35
,710
,036
37
,965
,043
96
,281
,430
32
,560
,485
33
,251
,236
34
,348
,278
38
,640
,091
Bus
ines
s-Ty
pe A
ctiv
ities
:U
se o
f mon
ey a
nd p
rope
rty53
8,18
0
464,
889
19
5,82
8
42,6
8242
,695
21,9
9017
,610
51,6
0067
,451
118,
106
Oth
er20
,092
34
,568
57
,723
54
,193
75,3
175,
056,
182
56,8
6959
,367
20,4
9835
,765
E
xtra
ordi
nary
gai
n/(lo
ss) o
n di
ssol
utio
n of
RD
A(5
,000
,000
)-
- -
- Tr
ansf
ers
325,
360
22
5,53
6
(1,3
00,6
59)
(1
,604
,677
)(1
,672
,983
)(1
,551
,374
)(1
,965
,337
)(1
,816
,446
)(1
,906
,149
)(2
,865
,417
)
Tota
l Bus
ines
s-Ty
pe A
ctiv
ities
883,
632
72
4,99
3
(1,0
47,1
08)
(1
,507
,802
)
(1,5
54,9
71)
(1
,473
,202
)
(1,8
90,8
58)
(1
,705
,479
)
(1,8
18,2
00)
(2
,711
,546
)
Tota
l Pri
mar
y G
over
nmen
t41
,094
,211
37
,163
,158
35
,936
,497
34
,202
,234
36
,410
,072
94
,808
,228
30
,669
,627
31
,545
,757
32
,530
,078
35
,928
,545
Cha
nges
in N
et P
ositi
onG
over
nmen
tal A
ctiv
ities
8,54
4,92
3
(5
,436
,584
)
(13,
010,
567)
(1
0,11
6,66
0)(5
,482
,484
)57
,040
,016
(1
,444
,985
)
1,69
1,14
7
10
,031
,367
12
,194
,521
B
usin
ess-
Type
Act
iviti
es1,
974,
895
1,77
0,42
5
46
4,61
1
(380
,391
)18
6,55
6(1
03,1
88)
663,
386
53
4,42
1
(1,5
70,3
74)
(1
,060
,912
)
Tota
l Pri
mar
y G
over
nmen
t10
,519
,818
$
(3
,666
,159
)$
(12,
545,
956)
$
(1
0,49
7,05
1)$
(5,2
95,9
28)
$
56
,936
,828
$
(7
81,5
99)
$
2,22
5,56
8$
8,
460,
993
$
11,1
33,6
09$
163
2008
2009
2010
2011
2012
2013
2014
2015
2016
Gen
eral
Fun
d
N
onsp
enda
ble
4,37
7$
472,
208
$
482,
208
$
11,6
08,5
80$
47
,018
$
8,34
5$
29,5
01$
16
,580
$
655,
430
$
Res
trict
ed
-
-
-
-
-
-
-
-
-
Com
mitt
ed-
-
-
-
-
-
-
-
-
As
sign
ed5,
230,
447
4,65
7,84
6
3,35
8,02
8
-
-
-
40
3,42
7
40
0,98
5
1,
381,
407
U
nass
igne
d-
-
-
(8
,392
,252
)
(8
,874
,464
)
4,
663,
689
1,
900,
256
3,
447,
111
5,
630,
245
Tota
l Gen
eral
Fun
d5,
234,
824
$
5,13
0,05
4$
3,84
0,23
6$
3,21
6,32
8$
(8,8
27,4
46)
$
4,67
2,03
4$
2,33
3,18
4$
3,86
4,67
6$
7,66
7,08
2$
All O
ther
Gov
ernm
enta
l Fun
ds
N
onsp
enda
ble
33,8
84,8
56$
52
,569
,460
$
51,9
61,8
44$
54
,350
,505
$
6,71
6,20
0$
6,23
9,14
0$
6,23
9,52
5$
6,24
0,04
1$
1,84
4,96
5$
Res
trict
ed
13,3
73,7
28
10
,640
,201
9,99
2,05
7
7,39
0,27
3
7,08
4,20
3
8,04
0,30
7
8,97
5,39
8
9,06
2,88
4
30,6
13,7
63
C
omm
itted
7,71
7,83
6
17
3,20
7
39
,990
-
-
-
-
-
-
Assi
gned
4,33
9,65
2
45
8,62
4
-
-
-
-
-
-
-
Una
ssig
ned
(4,2
83,7
48)
(16,
990,
443)
(19,
260,
373)
(18,
529,
307)
(2,7
77,5
78)
(314
,408
)
(1,4
59,1
58)
(4,5
00,5
05)
(512
,038
)
Tota
l all
othe
r Gov
ernm
enta
l Fun
ds55
,032
,324
$
46,8
51,0
49$
42
,733
,518
$
43,2
11,4
71$
11
,022
,825
$
13,9
65,0
39$
13
,755
,765
$
10,8
02,4
20$
31
,946
,690
$
Tota
l Gov
ernm
enta
l Fun
ds60
,267
,148
$
51,9
81,1
03$
46
,573
,754
$
46,4
27,7
99$
2,
195,
379
$
18
,637
,073
$
16,0
88,9
49$
14
,667
,096
$
39,6
13,7
72$
In c
ompl
ianc
e w
ith G
ASB
54, F
unds
Bal
ance
s ar
e no
w c
lass
ified
into
: Non
spen
dabl
e, R
estri
cted
, Com
mitt
ed, A
ssig
ned,
and
Una
ssig
ned.
In
form
atio
n fo
r prio
r yea
rs
was
re-c
lass
ified
acc
ordi
ngly
.
* Ten
yea
rs o
f dat
a is
requ
ired
to b
e pr
esen
ted;
how
ever
, onl
y ni
ne y
ears
of d
ata
is a
vaila
ble.
Fisc
al Y
ear
CIT
Y O
F M
ON
RO
VIA
Fund
Bal
ance
s of
Gov
ernm
enta
l Fun
dsLa
st N
ine
Fisc
al Y
ears
(Mod
ified
Acc
rual
Bas
is O
f Acc
ount
ing)
164
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
Rev
enue
s:Ta
xes
31,3
09,4
91$
35,2
09,0
99$
35,6
47,3
17$
34,4
74,4
43$
36,6
10,5
46$
33,3
76,1
94$
29,1
00,0
54$
30,0
23,9
85$
30,9
44,8
61$
34,3
42,3
23$
Asse
ssm
ents
1,24
0,39
1
1,27
4,27
7
1,27
0,52
7
1,27
7,80
3
1,28
7,64
9
1,28
5,59
9
1,31
6,59
2
1,34
5,31
7
1,33
1,08
2
1,33
2,81
4
Lice
nses
and
per
mits
807,
651
808,
099
857,
144
572,
193
599,
797
667,
484
682,
042
619,
092
678,
952
1,40
8,36
8
Inte
rgov
ernm
enta
l5,
861,
651
10
,848
,006
9,
875,
592
10
,818
,625
11
,504
,520
11
,111
,951
9,
103,
423
9,
567,
142
19
,764
,461
22
,652
,458
C
ontri
butio
ns fr
om p
rope
rty o
wne
rs-
-
4,
755,
251
-
-
-
352,
200
-
-
-
C
harg
es fo
r ser
vice
s2,
522,
054
2,
106,
873
2,
135,
036
1,
958,
137
1,
885,
962
2,
041,
373
2,
393,
370
2,
591,
961
2,
548,
793
3,
415,
180
U
se o
f mon
ey a
nd p
rope
rty2,
458,
402
2,
890,
722
1,
877,
342
1,
308,
050
1,
445,
079
73
2,91
1
36
1,85
3
31
8,48
1
36
5,70
1
46
3,42
0
Fi
nes
and
forfe
iture
s84
1,59
9
94
8,98
4
81
1,43
2
71
8,42
6
76
1,55
7
74
9,83
2
83
0,02
5
80
2,34
8
82
7,60
8
89
9,78
4
C
ontri
butio
ns34
4,52
1
30
0,61
0
14
7,99
3
16
8,95
8
12
4,41
5
10
7,72
9
30
3,21
3
65
,642
87
,701
10
1,97
2
M
isce
llane
ous
and
Oth
er R
even
ue1,
091,
232
56
8,53
4
75
0,29
2
93
5,97
8
82
4,76
7
81
6,05
8
18
,584
,884
1,
218,
364
1,
019,
591
1,
005,
453
Tota
l rev
enue
s46
,476
,992
54
,955
,204
58
,127
,926
52
,232
,613
55
,044
,292
50
,889
,131
63
,027
,656
46
,552
,332
57
,568
,750
65
,621
,772
Expe
nditu
res:
C
urre
nt:
Gen
eral
gov
ernm
ent
6,94
9,65
2
7,50
3,54
4
8,03
6,27
3
6,66
4,99
7
18,0
63,6
02
9,77
2,56
6
4,37
1,89
8
4,34
4,83
5
4,40
1,81
2
4,79
9,80
9
Pub
lic s
afet
y21
,783
,082
26
,281
,927
28
,576
,229
28
,446
,086
28
,814
,981
29
,887
,298
28
,996
,950
30
,594
,384
29
,269
,028
31
,985
,937
C
omm
unity
dev
elop
men
t4,
088,
412
4,
490,
541
5,
181,
007
3,
233,
906
6,
052,
290
2,
992,
448
3,
103,
061
3,
420,
012
3,
394,
160
4,
138,
276
P
arks
& R
ecre
atio
n3,
552,
755
3,
287,
028
3,
823,
784
3,
797,
647
3,
844,
360
3,
862,
009
3,
925,
833
4,
037,
963
3,
948,
728
4,
234,
471
P
ublic
wor
ks3,
837,
347
4,
697,
897
3,
851,
359
3,
841,
395
3,
340,
885
3,
118,
867
3,
464,
568
3,
396,
830
3,
663,
889
3,
926,
928
Cap
ital o
utla
y9,
316,
143
5,
011,
834
17
,191
,124
56
1,43
1
3,
102,
769
68
5,79
3
1,
975,
268
2,
488,
254
13
,438
,030
6,
413,
785
Deb
t ser
vice
:
P
rinci
pal r
etire
men
t2,
517,
963
2,
667,
672
3,
126,
281
3,
586,
985
3,
816,
239
1,
099,
696
78
0,00
0
84
5,00
0
92
0,00
0
1,
045,
000
I
nter
est a
nd fi
scal
cha
rges
3,47
6,80
2
5,34
8,49
6
6,03
5,21
1
6,05
6,37
5
6,69
1,32
4
4,53
9,49
4
2,01
4,73
1
1,81
8,87
5
2,03
7,30
2
1,88
4,39
9
Bon
d is
suan
ce c
osts
421,
892
-
22
8,61
8
-
582,
117
-
-
-
-
-
P
ass-
thro
ugh
agre
emen
t pay
men
ts-
2,42
1,33
9
2,46
3,94
7
2,65
7,62
0
2,94
0,92
5
-
-
-
-
-
Tota
l exp
endi
ture
s55
,944
,048
61
,710
,278
78
,513
,833
58
,846
,442
77
,249
,492
55
,958
,171
48
,632
,309
50
,946
,153
61
,072
,949
58
,428
,605
Exce
ss (D
efic
ienc
y) o
f Rev
enue
sO
ver (
Und
er) E
xpen
ditu
res
(9,4
67,0
56)
(6
,755
,074
)
(20,
385,
907)
(6,6
13,8
29)
(2
2,20
5,20
0)
(5
,069
,040
)
14,3
95,3
47
(4,3
93,8
21)
(3
,504
,199
)
7,19
3,16
7
Oth
er fi
nanc
ing
sour
ces
(use
s):
T
rans
fers
in29
,642
,794
30
,010
,253
19
,422
,167
11
,529
,520
13
,232
,148
10
,400
,936
11
,569
,340
11
,144
,426
11
,781
,633
13
,596
,008
Tra
nsfe
rs o
ut(2
9,82
5,74
5)
(3
1,43
0,16
6)
(1
9,17
1,94
1)
(9
,814
,235
)
(11,
424,
809)
(8,6
40,3
68)
(9
,377
,391
)
(9,1
43,4
15)
(9
,709
,362
)
(10,
381,
400)
L
ong-
term
deb
t iss
ued
19,5
00,0
00
15,8
50,0
00
12,0
00,0
00
-
20
,750
,000
-
-
-
6,18
0,00
0
-
Pro
ceed
s on
sal
e of
cap
ital a
sset
-
-
-
(5
08,8
05)
-
-
-
-
-
Cap
ital l
ease
s-
10,2
40
-
-
-
-
-
-
-
Not
es a
nd lo
ans
issu
ed-
3,01
0,24
0
-
-
-
-
-
-
-
Orig
inal
bon
d di
scou
nt(8
1,39
0)
-
(1
50,0
00)
-
(3
08,2
05)
-
-
-
-
-
Bon
d pr
emiu
m-
-
-
-
-
-
-
-
52
0,07
6
93
8,90
1
Lea
se re
venu
e bo
nd is
sued
-
-
-
-
-
-
-
(6
,690
,000
)
13,6
00,0
00
Tot
al o
ther
fina
ncin
g so
urce
s
(us
es)
19,2
35,6
59
17,4
50,5
67
12,1
00,2
26
1,20
6,48
0
22,2
49,1
34
1,76
0,56
8
2,19
1,94
9
2,00
1,01
1
2,08
2,34
7
17,7
53,5
09
Extra
ordi
nary
gai
n/(lo
ss) o
n di
ssol
utio
n
of r
edev
elop
men
t age
ncy
-
-
-
-
-
(4
0,92
3,94
6)
-
-
-
-
N
et c
hang
e in
fund
bal
ance
s /
net
ass
ets
9,76
8,60
3$
10,6
95,4
93$
(8,2
85,6
81)
$
(5
,407
,349
)$
43,9
34$
(44,
232,
418)
$
16,5
87,2
96$
(2,3
92,8
10)
$
(1
,421
,852
)$
24,9
46,6
76$
Deb
t ser
vice
as
a pe
rcen
tage
of
nonc
apita
l exp
endi
ture
s *
13.0
4%14
.02%
14.6
6%16
.54%
14.2
2%10
.45%
5.96
%5.
69%
6.21
%5.
64%
*Th
is p
erce
ntag
e is
com
pute
d as
: D
ebt S
ervi
ce d
ivid
ed b
y N
on-C
apita
l Exp
endi
ture
sD
ebt S
ervi
ce =
Prin
cipa
l Ret
irem
ent +
Inte
rest
& F
isca
l Cha
rges
Non
-Cap
ital E
xpen
ditu
res
= To
tal E
xpen
ditu
res
- Cap
ital O
utla
y Ba
sed
on th
is m
etho
dolo
gy, t
his
perc
enta
ge fo
r pas
t yea
rs h
as b
een
rest
ated
.
Fisc
al Y
ear
CIT
Y O
F M
ON
RO
VIA
Cha
nges
In F
und
Bal
ance
s O
f Gov
ernm
enta
l Fun
dsLa
st T
en F
isca
l Yea
rs(M
odifi
ed A
ccru
al B
asis
Of A
ccou
ntin
g)
165
CITY OF MONROVIA
Assessed Value and Estimated Actual Value of Taxable PropertyLast Ten Fiscal Years(in thousands of dollars)
Total Estimated Taxable AssessedTotal Taxable Direct Actual Value as a
Fiscal Residential Commercial Other Assessed Tax Taxable Percentage ofYear Property Property Property Value Rate Value Actual Taxable Value
2007 2,497,602 461,248 526,748 3,485,598 1.00 3,485,598$ 100.0%2008 2,725,071 512,382 548,247 3,785,700 1.00 3,785,700$ 100.0%2009 2,894,684 542,187 567,222 4,004,093 1.00 4,004,093$ 100.0%2010 2,863,598 588,407 574,856 4,026,861 1.00 4,026,861$ 100.0%2011 2,912,716 615,345 534,151 4,062,212 1.00 4,062,212$ 100.0%2012 2,964,174 636,146 529,200 4,129,520 1.00 4,129,520$ 100.0%2013 3,035,166 670,932 545,999 4,252,097 1.00 4,252,097$ 100.0%2014 3,135,799 685,473 548,944 4,370,216 1.00 4,370,216$ 100.0%2015 3,341,727 699,352 548,676 4,589,755 1.00 4,589,755$ 100.0%2016 3,545,820 757,368 559,485 4,862,673 1.00 4,862,673$ 100.0%
Source: HDL Coren & Cone.
166
CIT
Y O
F M
ON
RO
VIA
Dir
ect a
nd O
verl
appi
ng P
rope
rty
Tax
Rat
es,
Last
Ten
Fis
cal Y
ears
(rat
e pe
r $10
0 of
ass
esse
d va
lue)
Gen
eral
Vot
erB
asic
Tota
lM
etro
polit
anS
choo
lFl
ood
App
rove
dFi
scal
Tax
Dir
ect
Los
Ang
eles
Wat
er D
istr
ict
Dis
tric
tC
omm
unity
C
ontr
olP
ensi
onTo
tal
Dir
ect
Yea
rLe
vyR
ate
Cou
nty
(1)
Bon
dsB
onds
Col
lege
(3)
Bon
dsO
verr
ide
Tax
Rat
eA
sses
smen
ts (2
)
2007
1.00
00
1.
0000
0.00
0660
0.00
470.
0652
800.
0035
600.
0000
500.
1285
191.
2027
69$4
23.5
820
081.
0000
1.00
00
0.
0000
000.
0045
0.06
3262
0.01
6112
0.00
0000
0.12
8519
1.21
2393
$485
.58
2009
1.00
00
1.
0000
0.00
0000
0.00
430.
0501
250.
0244
080.
0000
000.
1285
191.
2073
52$4
55.9
120
101.
0000
1.00
00
0.
0000
000.
0043
0.06
5210
0.02
3974
0.00
0000
0.12
8519
1.22
2003
$519
.24
2011
1.00
00
1.
0000
0.00
0000
0.00
370.
0723
290.
0251
590.
0000
000.
1285
191.
2297
07$5
57.6
020
121.
0000
1.00
00
0.
0000
000.
0037
0.09
2323
0.02
4466
0.00
0000
0.12
8519
1.24
9008
$557
.43
2013
1.00
00
1.
0000
0.00
0000
0.00
350.
0890
630.
0259
030.
0000
000.
1285
191.
2469
85$5
69.4
720
141.
0000
1.00
00
0.
0000
000.
0035
0.08
9187
0.02
2263
0.00
0000
0.12
8519
1.24
3469
$572
.55
2015
1.00
00
1.
0000
0.00
0000
0.00
350.
0849
450.
0164
120.
0000
000.
1285
191.
2333
76$5
58.4
220
161.
0000
1.00
00
0.
0000
000.
0035
0.08
6800
0.02
4062
0.00
0000
0.12
8519
1.24
2881
$564
.47
(1) I
nclu
des
Cou
nty
Sch
ool S
ervi
ces.
(2) E
stim
ated
flat
rate
per
hou
seho
ld in
clud
es F
lood
Con
trol D
istri
ct, S
anita
tion
Dis
trict
, City
Lig
htin
g an
d
Lan
dsca
pe M
aint
enan
ce D
istri
cts,
Par
k M
aint
enan
ce D
istri
ct, M
osqu
ito A
bate
men
t Dis
trict
,
L.A
. Cou
nty
Par
k M
aint
enan
ce D
istri
ct, W
ater
Dis
trict
sur
char
ges
from
the
Met
ro W
ater
Dis
trict
a
nd U
pper
San
Gab
riel D
istri
ct, C
ity's
Wild
erne
ss P
rese
rve
Taxe
s, W
ilder
ness
Pre
serv
e
Mai
nten
ance
, Li
brar
y B
ond
Tax
and
Trau
ma
and
Em
erge
ncy
Ser
vice
s.
(3) A
sses
smen
t com
men
ced
in th
e ye
ar 2
004.
Sou
rce:
Cou
nty
of L
os A
ngel
es A
udito
r-Con
trolle
r and
HD
L C
oren
and
Con
e.
Ove
rlap
ping
Rat
esC
ity D
irec
t Rat
es
167
CITY OF MONROVIA
Principal Property TaxpayersCurrent Year and Nine Years Ago
Percentage Percentageof Total City of Total City
Taxable Taxable Taxable TaxableAssessed Assessed Assessed Assessed
Taxpayer Value Rank Value Value Rank Value
South Myrtle Monrovia MM LLC 61,319,841$ 1 1.26% 0.00%Foothill Technology Center LLC 46,993,020 2 0.97% 32,296,160 2 0.93%Meile Investments LLC 43,632,721 3 0.90% 0.00%Huntington Oaks Delaware Partners LLC 42,842,057 4 0.88% 33,204,585 1 0.95%Monrovia Technology Campus LLC 28,761,253 5 0.59% 16,581,451 5 0.48%PI Properties No 46 LLC 20,909,587 6 0.43% 0.00%S and F Huntington Crossing LLC 17,544,529 7 0.36% 15,429,606 6 0.44%BRE HV Properties LLC 17,482,477 8 0.36% 0.00%723 EHD LLC 17,449,119 9 0.36% 0.00%Nationwide Monrovia Mkt Plc LLC 17,397,154 10 0.36% 15,300,000 7 0.44%1024 Royal Oaks LP - 22,700,000 3 0.65%Home Depot USA Inc - 16,618,042 4 0.48%Realty Associates Fund VI LP - 15,293,879 8 0.44%Showprop Monrovia LLC - 14,508,506 9 0.42%MDS Pealty II LLC - 13,479,300 10 0.39%
Total 314,331,758$ 6.46% 195,411,529$ 5.61%
Source: HDL Coren & Cone.
2016 2007
168
CITY OF MONROVIA
Property Tax Levies and Collections,Last Ten Fiscal Years
FiscalYear Taxes* Levied Collections
Ended for the Percentage in Subsequent PercentageJune 30, Fiscal Year Amount of Levy Years Amount of Levy
2007 5,181,404 5,173,342 99.8% - 5,173,342 99.8%2008 5,757,919 5,402,084 93.8% 5,339 5,407,423 93.9%2009 6,258,106 5,602,232 89.5% - 5,602,232 89.5%2010 6,064,889 5,482,403 90.4% - 5,482,403 90.4%2011 5,922,673 5,477,853 92.5% - 5,477,853 92.5%2012 6,027,860 5,609,873 93.1% - 5,609,873 93.1%2013 6,031,266 5,851,552 97.0% - 5,851,552 97.0%2014 6,148,107 6,096,992 99.2% - 6,096,992 99.2%2015 6,501,077 6,389,453 98.3% - 6,389,453 98.3%2016 6,893,249 6,687,823 97.0% N/A 6,687,823 97.0%
Sources:
* Includes 1% secured levy; does not include direct assessments or tax override. The amount presented is net of adjustments.
Collected within theFiscal Year of the Levy Total Collections to Date
169
CIT
Y O
F M
ON
RO
VIA
Rat
ios
of O
utst
andi
ng D
ebt b
y Ty
pe,
Last
Fiv
e Fi
scal
Yea
rs
Bus
ines
sG
over
nmen
t Act
iviti
esTy
pe A
ctiv
ities
Tota
lR
esou
rces
Net
Est
imat
edG
ener
al
Per
cent
age
Fisc
alD
ue to
P
rim
ary
Ava
ilabl
e fo
rG
ener
al
Val
ue o
f Tax
able
Bon
ded
of P
erso
nal
Per
Yea
rB
onds
DN
otes
Loan
sLe
ases
Oth
er G
ov'ts
Bon
dsG
over
nmen
tP
rinc
ipal
B
onde
d D
ebt
Pro
pert
y B
Deb
t Rat
ioIn
com
e A
Cap
ita
A
2012
34,8
26,3
31-
-
17
7,89
6-
-
35
,004
,227
38,3
76
34,9
65,8
523,
259,
734,
454
1.07
%2.
98%
948
20
1334
,049
,905
-
-
133,
919
-
-
34,1
83,8
248
34,1
83,8
163,
347,
777,
998
1.02
%2.
87%
920
20
1433
,208
,479
-
-
143,
809
-
-
33,3
52,2
888
33,3
52,2
803,
445,
725,
570
0.97
%2.
78%
897
20
1532
,297
,795
-
-
473,
328
-
-
32,7
71,1
234
32,7
71,1
193,
642,
003,
553
0.90
%2.
55%
873
20
1644
,520
,000
-
-
406,
630
-
36
,770
,000
81
,696
,630
795,
921
80,9
00,7
093,
850,
377,
301
2.10
%6.
36%
2,18
4
Not
es: D
etai
ls re
gard
ing
the
City
's o
utst
andi
ng d
ebt c
an b
e fo
und
in th
e no
tes
to th
e fin
anci
al s
tate
men
ts.
AS
ee D
emog
raph
ic a
nd E
cono
mic
Sta
tistic
s sc
hedu
le fo
r per
sona
l inc
ome
and
popu
latio
n da
ta.
Thes
e ra
tios
are
calc
ulat
ed u
sing
per
sona
l inc
ome
and
popu
latio
n fo
r the
prio
r cal
enda
r yea
r.
BE
stim
ated
val
ue e
xclu
des
unse
cure
d pr
oper
ty.
DA
mou
nts
pres
ente
d ar
e ne
t of r
elat
ed p
rem
ium
s, d
isco
unts
and
adj
ustm
ents
.
170
CITY OF MONROVIA
Direct and Overlapping Governmental Activities DebtAs of June 30, 2016
City Assessed Valuation $3,927,950,499Successor Agency Incremental Valuation $934,722,226
$4,862,672,725
Estimated SharePercent Outstanding of Overlapping
Applicable to City Debt 6/30/16 Debt
Overlapping Debt:Metropolitan Water District* 0.382% 44,916,916 171,529$ El Monte School District 0.083% 118,012,423 97,924El Monte Union High School District 0.043% 140,639,462 60,853Citrus Community College District 19.486% 96,907,553 18,883,883Pasadena Area Commmunity College District 0.022% 84,630,000 18,347Rio Hondo Community College District 0.005% 158,962,824 8,540Arcadia Unified School District 0.092% 187,723,308 171,794Duarte Unified School District 1.321% 53,463,568 706,089Monrovia Unified School District 86.892% 65,259,829 56,705,637Total Overlapping Debt: 76,824,596
Direct DebtCity Direct Debt 44,926,630Successor Agency Direct Debt 56,810,000Total City & Successor Agency Direct Debt 101,736,630
Total Direct and Overlapping Debt 178,561,226$
Note:
* This fund is a portion of a larger agency, and is responsible for debt in areas outside the city.
Overlapping governments are those that coincide, at least in part, with the geographic boundaries of the City. The percentage of overlapping debtapplicable is estimated by using taxable assessed values. Applicable percentages were estimated by determining the portion of another governmental unit's taxable assessed value that is within the City's boundaries and dividing it by each unit's total taxable assessed value. The City's Direct Debt does not include Business Type Activities debt.
Source: HDL Coren & Cone and Los Angeles County Assessor.
171
CITY OF MONROVIA
Legal Debt Margin InformationLast Ten Fiscal Years(dollars in thousands)
Legal Debt Margin Calculation for Fiscal Year 2016
Assessed value 4,862,672,725Conversion percentage 25% *Adjusted assessed value 1,215,668,181Debt limit percentage 15% *Debt limit 182,350,227 Total net debt applicable to limit:
General obligation bonds -
Legal debt margin 182,350,227$
Total Net DebtApplicable to the
Total Net Debt Legal Limit as aApplicable to Debt Percentage of
Fiscal Year Debt Limit * Limit Limit A * Debt Limit2007 130,710 - 130,710 0.00%2008 141,964 - 141,964 0.00%2009 150,153 - 150,153 0.00%2010 151,007 - 151,007 0.00%2011 152,333 - 152,333 0.00%2012 154,857 - 154,857 0.00%2013 159,454 - 159,454 0.00%2014 163,883 - 163,883 0.00%2015 172,116 - 172,116 0.00%2016 182,350 - 182,350 0.00%
* The Government Code of the State of California provides for a legal debt limit of 15% of gross assessed valuation. However, this provision was enacted when assessed valuation was based upon 25% of market value. Effective with the 1981-82 fiscal year, each parcel is now assessed at 100% of market value (as of the most recent change in ownership for that parcel). The computations shown above reflect a conversion of assessed valuation data for each fiscal year from the current full valuation amount to the 25% level that was in effect at the time that the legal debt margin was enacted by the State of California for local governments. Based on this methodology, prior years' figures were restated accordingly.
172
CITY OF MONROVIA
Pledged-Revenue CoverageLast Five Fiscal Years(in thousands)
Use of NetFiscal Money & Less: AvailableYear Property Expenditures Revenue Principal Interest Coverage
2012 639 3 636 575 69 12013 673 3 670 605 31 12014 - - - - - - A2015 - - - - - - A2016 - - - - - - A
NetFiscal Less: AvailableYear Taxes Expenditures Revenue Principal Interest Coverage
2012 1,022 2 1,021 305 699 1.022013 1,021 2 1,019 320 686 1.01
1,033 2 1,031 330 672 1.032015 1,026 2 1,024 345 656 1.022016 1,026 2 1,024 360 641 1.02
NetFiscal Less: AvailableYear Taxes Expenditures Revenue Principal Interest Coverage
2015 729 163 566 245 311 1.02 B2016 729 82 647 300 237 1.20 B
NetFiscal Less: AvailableYear Taxes Expenditures Revenue Principal Interest Coverage
2016 - - - - - -
Notes: Details regarding the City's outstanding debt can be found in the Notes to the Financial Statements.
A The 1993A Lease Revenue Refunding Bonds matured and were paid off in FY12-13.
B The 2002 Hillside Lease Revenue Bonds were refinanced with the 2015 Hillside LeaseRevenue Refunding Bonds during FY 14-15. Please see Notes to the Financial Statements for additional information.
2016 Measure R and Proposition C Street Improvement Lease Revenue Bonds
Debt Service
2007 Library Lease Revenue Bonds
Debt Service
1993 A Lease Revenue Bonds
Debt Service
2015 Hillside Lease Revenue Bonds
Debt Service
173
CITY OF MONROVIA
Demographic and Economic StatisticsLast Ten Calendar Years
PersonalIncome Per
(3) Capita UnemploymentCalendar Population (thousands Personal Rate
Year (1) of dollars) Income (2)
2007 38,932 1,046,441 26,879 4.4%2008 39,040 1,057,682 27,092 6.5%2009 39,384 1,040,654 26,423 10.2%2010 39,984 1,152,219 28,817 10.8%2011 36,727 1,156,386 31,486 11.2%2012 36,943 1,174,972 31,805 9.8%2013 37,162 1,189,370 32,005 9.0%2014 37,179 1,197,721 32,215 6.4%2015 37,531 # 1,283,929 34,209 6.4%2016 37,406 N/A * N/A * 3.9%
Sources: (1) State of California Department of Finance(2) State of California Economic Development Department(3) HDL Coren & Cone
* Information for 2016 not yet available.# Data for 2015 has been restated based on updated figures.
174
CITY OF MONROVIA
Principal EmployersCurrent Year and Nine Years Ago
2015-2016 2006-07 *Percentage Percentageof Total City of Total City
Employer** Employees Rank Employment Employees Rank Employment
Monrovia School District 726 1 3.54%The Home Depot 280 2 1.37%Trader Joe's Company 267 3 1.30%Ducommon Aerostructures Inc. 263 # 4 1.28%Sierra Autocars 246 5 1.20%Monrovia Memorial Hospital 209 6 1.02%Starr Surgical 191 7 0.93%Vinyl Technology 185 8 0.90%San Gabriel Valley Newspaper 177 9 0.86%Exelis, Inc. 177 10 0.86%
2,721 13.27% 0 0.00%
* Information not available. ** Does not include employers who are not required to obtain a business license with the City, such as the following types of employers: (a) utility companies, (b) financial institutions, and (c) insurance companies.# Information is estimated.
Source: City of Monrovia Business Services Department and Monrovia Unified School District
175
CIT
Y O
F M
ON
RO
VIA
Full-
Tim
e-E
quiv
alen
t City
Gov
ernm
ent E
mpl
oyee
s by
Fun
ctio
n/P
rogr
amLa
st T
en F
isca
l Yea
rs
Fisc
al Y
ears
:20
0720
0820
0920
1020
1120
1220
1320
1420
1520
16
Func
tion/
Pro
gram
Gen
eral
gov
ernm
ent
City
Cou
ncil
5.00
5.00
5.00
5.00
5.00
5.00
5.00
5.00
5.00
5.00
Adm
inis
tratio
n #
32.7
536
.00
33.7
528
.75
26.5
026
.50
27.9
026
.90
25.9
027
.00
Com
mun
ity D
evel
opm
ent
Adm
inis
tratio
n2.
002.
002.
001.
001.
001.
001.
001.
001.
001.
00P
lann
ing
5.75
7.25
7.00
7.00
6.00
6.00
6.00
6.00
6.00
5.00
Insp
ectio
n6.
507.
507.
003.
003.
003.
003.
003.
004.
005.
00H
ousi
ng S
ervi
ces/
Cod
e E
nfor
cem
ent
4.50
4.50
4.00
4.00
3.00
3.00
4.00
4.00
4.00
6.00
Pol
ice
**A
dmin
istra
tion
2.00
2.00
2.00
2.00
2.00
2.00
2.00
2.00
2.00
2.00
Pat
rol
38.0
038
.00
38.0
033
.00
36.0
035
.00
35.0
035
.00
35.0
038
.00
Inve
stig
atio
n/C
rime
Pre
vent
ion
19.0
019
.00
19.0
019
.00
16.0
011
.00
11.0
011
.00
11.0
012
.00
Pol
ice
Ser
vice
s18
.00
18.0
018
.00
17.0
016
.00
14.0
014
.00
12.0
012
.00
13.0
0D
ispa
tch
5.00
6.00
7.00
6.00
7.00
7.00
7.00
8.00
8.00
8.00
Oth
er P
D S
uppo
rt6.
008.
007.
007.
007.
007.
007.
007.
007.
007.
00
Fire
Adm
inis
tratio
n2.
002.
502.
002.
001.
751.
752.
002.
002.
002.
50Fi
re S
uppr
essi
on (i
nclu
ding
Par
amed
ics)
40.0
040
.00
40.0
040
.00
42.0
042
.00
42.0
042
.00
42.0
041
.00
Fire
Pre
vent
ion/
Insp
ectio
n1.
002.
001.
001.
000.
000.
000.
001.
001.
002.
50
Pub
lic W
orks
Adm
in/E
ngin
eerin
g11
.00
11.0
09.
007.
007.
007.
007.
006.
007.
006.
00M
aint
enan
ce48
.00
49.0
044
.00
41.0
041
.00
41.0
041
.00
41.0
040
.00
34.0
0M
echa
nic
2.00
0.00
1.00
1.00
1.00
1.00
1.00
1.00
1.00
3.00
Com
mun
ity S
ervi
ces
Adm
inis
tratio
n2.
002.
002.
002.
002.
002.
002.
002.
002.
002.
00R
ecre
atio
n8.
0010
.00
8.00
7.00
5.50
5.50
6.00
6.00
6.00
6.00
Libr
ary
10.2
510
.25
8.50
11.0
011
.00
11.0
011
.50
10.7
59.
0011
.00
Tota
l Aut
horiz
ed P
erso
nnel
*26
3.75
275.
0026
0.25
239.
7523
4.75
226.
7523
0.40
227.
6522
5.90
232.
00
*To
tal A
utho
rized
Per
sonn
el -
excl
udes
par
t-tim
e C
ounc
il m
embe
rs.
**
# A
dmin
istra
tion
tota
l for
201
3 w
as re
stat
ed.
Not
e: A
full-
time
empl
oyee
is s
ched
uled
to w
ork
2,08
0 ho
urs
per y
ear (
incl
udin
g va
catio
n an
d si
ck le
ave)
.
Ful
l-tim
e eq
uiva
lent
em
ploy
men
t is
calc
ulat
ed b
y di
vidi
ng to
tal l
abor
hou
rs b
y 20
80.
Sou
rce:
City
of M
onro
via
Ann
ual B
udge
t
Pol
ice
Dep
artm
ent d
ata
was
rest
ated
for t
he 2
012,
201
3, a
nd 2
014
year
s.
Als
o, A
nim
al C
ontro
l ser
vice
s w
ere
out-s
ourc
ed d
urin
g FY
13-1
4. A
s a
resu
lt, 2
Ani
mal
Con
trol
Offi
cer p
ositi
ons
wer
e no
t inc
lude
d in
the
num
bers
abo
ve fo
r FY
13-1
4
176
CIT
Y O
F M
ON
RO
VIA
Ope
ratin
g In
dica
tors
by
Func
tion/
Pro
gram
Last
Ten
Fis
cal Y
ears
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
Func
tion/
Pro
gram
Com
mun
ity d
evel
opm
ent
Num
ber o
f:B
usin
ess
licen
ses
(A)
2,55
22,
549
2,
301
2,35
82,
271
2,27
22,
217
2,21
62,
220
2,80
5P
lan
chec
ks (B
)26
428
6
24
017
918
219
430
942
534
137
2N
PD
ES
insp
ectio
ns20
12
129
22
-
-
-
-
Cod
e vi
olat
ions
(cal
enda
r bas
is)
1,69
21,
650
1,
514
1,28
01,
000
1,12
399
097
981
968
0
Pol
ice
Num
ber o
f:P
art 1
Crim
es1,
271
1,25
7
1,09
41,
273
1,00
61,
015
944
857
679
839
Park
ing
& no
n-m
ovin
g vi
olat
ions
11,3
2011
,163
8,52
68,
847
8,54
28,
565
8,93
17,
610
11,1
1913
,162
Traf
fic (m
ovin
g) v
iola
tions
6,34
04,
825
5,
557
4,64
65,
241
4,73
35,
289
4,47
03,
873
3,08
1In
cide
nt &
crim
e re
ports
6,10
75,
754
5,
642
5,66
94,
744
4,65
24,
652
4,12
13,
696
3,91
8
Pub
lic w
orks
Mile
s of
:S
treet
resu
rfaci
ng/re
pair
3
3
-
-
4
2
2
1
-
-
S
treet
Sw
eepi
ng (C
) 21
2
21
2
21
221
221
221
221
221
221
221
2
Num
ber o
f:St
reet
sig
nals
mai
ntai
ned
(inte
rsec
tions
) 46
35
36
36
3636
3636
3737
Tree
s pr
uned
per
yea
r (C
) 2,
784
2,
485
1,
623
96
884
21,
284
965
900
1,34
02,
577
Squ
are
feet
gra
ffiti
rem
oved
(C)
64,1
94
84
,945
89,6
41
98
,665
32,0
4027
,236
26,7
4021
,910
23,7
5018
,636
Rec
reat
ion
& c
omm
unity
ser
vice
sN
umbe
r of e
nrol
lees
:A
quat
ics
(D)
3,76
6
3,80
0
4,10
0
3,90
0N
/AN
/AN
/AN
/AN
/AN
/AC
omm
unity
ser
vice
s/se
nior
s1,
800
1,
700
1,
550
1,
325
1,31
01,
275
1,20
51,
175
1,02
5D
ay c
amp
375
430
425
438
425
300
250
225
235
216
Par
k pr
ogra
m6,
100
6,
200
5,
800
6,
200
8,40
08,
650
8,90
08,
500
8,10
01,
044
Cla
sses
6,50
0
6,20
0
6,49
0
6,54
06,
390
6,45
06,
250
5,95
05,
900
2,13
0S
peci
al e
vent
s4,
200
4,
500
5,
250
5,
850
6,25
06,
350
6,42
56,
550
6,80
014
,300
N/A
- D
ata
not a
vaila
ble
(A) -
Incl
udes
new
& re
new
al li
cens
es, e
xclu
des
tem
pora
ry li
cens
es(B
) - E
xclu
des
tem
pora
ry p
lan
chec
ks.
(C) -
Est
imat
ed d
ata
pres
ente
d fo
r prio
r fis
cal y
ears
.(D
) - C
ity o
f Mon
rovi
a no
long
er p
rovi
des
Aqu
atic
s/S
wim
pro
gram
s
Sou
rces
: Var
ious
City
dep
artm
ents
.
Fisc
al Y
ear
177
CITY OF MONROVIA
Capital Asset Statistics by Function/ProgramLast Ten Fiscal Years
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016Function/Program
Community developmentCode enforcement vehicles 3 4 3 3 4 4 4 4 3 3
PoliceStations 1 1 1 1 1 1 1 1 1 1Patrol vehicles 15 14 14 14 13 13 13 14 15Other vehicles 27 30 30 27 24 24 22 23 23 22
Public worksStreets (miles) 90 90 90 90 90 90 90 90 90 90Street lights (city-owned) 1,390 1,390 1,390 1,390 1,376 1,376 1,376 1,376 1,376 1,376Traffic signals 46 46 47 47 48 48 48 48 49 49Public works vehicles 47 47 47 48 45 45 45 45 45 47
Recreation & community serviceYouth centers 1 1 1 1 1 1 1 1 1 1Community centers 1 1 1 1 1 1 1 1 1 1Parks 7 7 7 7 7 7 7 7 8 8Community service vehicles 3 1 2 3 4 4 4 5 6 6
Notes: No capital asset indicators are available for the general government.
Sources: Various City departments.
Fiscal Year
178
NAME OF EXPIRATION TYPE OF COVERAGECOMPANY POLICY NO. DATE COVERAGE LIMITS
California Joint Powers Insurance Authority No policy number 07/01/17 Liability $50,000,000 combined single limit per occurrence per memberLIMITS PER MEMBER (Subsidence) $30,000,000 Per Occurrence Per Member $10,000,000 Annual Aggregate Per Member
Brit Syndicate (Lloyds 2987) E/B26444.15 07/01/17 Cyber Liability $1,000,000 Limit Each Claim and in the Aggregate for the Policy Period Per
California Joint Powers Insurance Authority No policy number 07/01/17 Workers' Compensation and Employer's Liability coverage
Statutory Benefits and $10,000,000
Employer's Liability
XL Catlin Travelers
B128410009W16 07/01/17 All Risk Property Insurance All-Risk (required)$500 Million per occurrence (shared limits) $10 Million annual aggregate for flood (per member limits) Deductible: $5,000 per occurrence Premium: $0.021 / per $100 of Insured Values Coverage is written at replacement cost.
Vehicles Physical Damage (comprehensive & collision) (optional)Deductible: $1,000 per occurrence (collision), licensed vehicles other than Fire and AmbulanceDeductible: $1,000 per occurrence (comprehensive), licensed vehicles other than Fire and AmbulancePremium: $0.553/ per $100 of Insured Values
Deductible: $5,000 per occurrence (collision), Fire and Ambulance vehiclesDeductible: $1,000 per occurrence (comprehensive), Fire and Ambulance vehiclesPremium: $0.244 / per $100 of Insured ValuesCoverage is written at stated value.
Mechanical Breakdown (formerly Boiler
National Union Fire Insurance Company of Pittsburg, PA (CHARTIS)
01-330-98-06 07/01/17 Crime Insurance $1,000,000/per member
Tokio Marine Specialty Insurance Company PPK1197283 7/1/2017 Period: July 13, 2015 to July 1, 2017, three-year policy (*Note: policy term is 07/01/14-07/01/17; however, the City’s
coverage was effective 07/01/15.)
Pollution and Remediation Legal Liability Program
10,000,000 Per member
Evanston Insurance Company SEP41017 01/01/2016 - 01/01/2017 Special Events Coverage Program $1,000,000 per occurrence $1,000,000 or $2,000,000 aggregate per event $5,000 medical expense limit Additional limits are available, subject to underwriter approval.
CITY OF MONROVIA
SCHEDULE OF INSURANCE IN FORCEJuly 1, 2016 - June 30, 2017
179
F-1
APPENDIX F
BOOK-ENTRY ONLY SYSTEM
The following information concerning DTC and DTC’s book-entry only system has been obtained from sources that the City and the Underwriter believe to be reliable, but neither of the City or the Underwriter takes any responsibility for the completeness or accuracy thereof. The following description of the procedures and record keeping with respect to beneficial ownership interests in the Bonds, payment of principal, premium, if any, accreted value and interest on the Bonds to DTC Participants or Beneficial Owners, confirmation and transfers of beneficial ownership interests in the Bonds and other related transactions by and between DTC, the DTC Participants and the Beneficial Owners is based solely on information provided by DTC.
DTC will act as securities depository for the Bonds. The Bonds will be issued as fully-registered securities registered in the name of Cede & Co. (DTC’s partnership nominee) or such other name as may be requested by an authorized representative of DTC. One fully registered bond will be issued for each annual maturity of the Bonds, each in the aggregate principal amount of such annual maturity, and will be deposited with DTC.
DTC, the world’s largest securities depository, is a limited-purpose trust company organized under the New York Banking Law, a “banking organization” within the meaning of the New York Banking Law, a member of the Federal Reserve System, a “clearing corporation” within the meaning of the New York Uniform Commercial Code, and a “clearing agency” registered pursuant to the provisions of Section 17A of the Securities Exchange Act of 1934. DTC holds and provides asset servicing for over 3.5 million issues of U.S. and non-U.S. equity issues, corporate and municipal debt issues, and money market instruments (from over 100 countries) that DTC’s participants (“Direct Participants”) deposit with DTC. DTC also facilitates the post-trade settlement among Direct Participants of sales and other securities transactions in deposited securities, through electronic computerized book-entry transfers and pledges between Direct Participants’ accounts. This eliminates the need for physical movement of securities certificates. Direct Participants include both U.S. and non-U.S. securities brokers and dealers, banks, trust companies, clearing corporations, and certain other organizations. DTC is a wholly-owned subsidiary of The Depository Trust & Clearing Corporation (“DTCC”). DTCC is the holding company for DTC, National Securities Clearing Corporation and Fixed Income Clearing Corporation, all of which are registered clearing agencies. DTCC is owned by the users of its regulated subsidiaries. Access to the DTC system is also available to others such as both U.S. and non-U.S. securities brokers and dealers, banks, trust companies, and clearing corporations that clear through or maintain a custodial relationship with a Direct Participant, either directly or indirectly (“Indirect Participants”). DTC has a Standard & Poor’s rating of AA+. The DTC Rules applicable to its Participants are on file with the Securities and Exchange Commission. More information about DTC can be found at www.dtcc.com.
Purchases of Bonds under the DTC system must be made by or through Direct Participants, which will receive a credit for the Bonds on DTC’s records. The ownership interest of each actual purchaser of each Bond (“Beneficial Owner”) is in turn to be recorded on the Direct and Indirect Participants’ records. Beneficial Owners will not receive written confirmation from DTC of their purchase. Beneficial Owners are, however, expected to receive written confirmations providing details of the transaction, as well as periodic statements of their holdings, from the Direct or Indirect Participant through which the Beneficial Owner entered into the transaction. Transfers of ownership interests in the Bonds are to be accomplished by entries made on the books of Direct and Indirect Participants acting on behalf of Beneficial Owners. Beneficial Owners will not receive certificates representing their ownership interests in the Bonds, except in the event that use of the book-entry system for the Bonds is discontinued.
To facilitate subsequent transfers, all Bonds deposited by Direct Participants with DTC are registered in the name of DTC’s partnership nominee, Cede & Co., or such other name as may be requested by an authorized representative of DTC. The deposit of Bonds with DTC and their registration in the name of Cede & Co. or such other DTC nominee do not effect any change in beneficial ownership. DTC has no knowledge of the actual Beneficial Owners of the Bonds; DTC’s records reflect only the identity of the Direct Participants to whose accounts
F-2
such Bonds are credited, which may or may not be the Beneficial Owners. The Direct and Indirect Participants will remain responsible for keeping account of their holdings on behalf of their customers.
Conveyance of notices and other communications by DTC to Direct Participants, by Direct Participants to Indirect Participants, and by Direct Participants and Indirect Participants to Beneficial Owners will be governed by arrangements among them, subject to any statutory or regulatory requirements as may be in effect from time to time. Beneficial Owners of Bonds may wish to take certain steps to augment the transmission to them of notices of significant events with respect to the Bonds, such as redemptions, tenders, defaults, and proposed amendments to the Bond documents. For example, Beneficial Owners of Bonds may wish to ascertain that the nominee holding the Bonds for their benefit has agreed to obtain and transmit notices to Beneficial Owners. In the alternative, Beneficial Owners may wish to provide their names and addresses to the registrar and request that copies of notices be provided directly to them.
Redemption notices shall be sent to DTC. If less than all of the Bonds within a maturity are being redeemed, DTC’s practice is to determine by lot the amount of the interest of each Direct Participant in such maturity to be redeemed.
Neither DTC nor Cede & Co. (nor any other DTC nominee) will consent or vote with respect to Bonds unless authorized by a Direct Participant in accordance with DTC’s MMI Procedures. Under its usual procedures, DTC mails an Omnibus Proxy to the City as soon as possible after the record date. The Omnibus Proxy assigns Cede & Co.’s consenting or voting rights to those Direct Participants to whose accounts Bonds are credited on the record date (identified in a listing attached to the Omnibus Proxy).
Redemption proceeds, distributions, and dividend payments on the Bonds will be made to Cede & Co., or such other nominee as may be requested by an authorized representative of DTC. DTC’s practice is to credit Direct Participants’ accounts upon DTC’s receipt of funds and corresponding detail information from the City or the Trustee, on payable date in accordance with their respective holdings shown on DTC’s records. Payments by Participants to Beneficial Owners will be governed by standing instructions and customary practices, as is the case with securities held for the accounts of customers in bearer form or registered in “street name,” and will be the responsibility of such Participant and not of DTC, the Trustee, or the City, subject to any statutory or regulatory requirements as may be in effect from time to time. Payment of redemption proceeds, distributions, and dividend payments to Cede & Co. (or such other nominee as may be requested by an authorized representative of DTC) is the responsibility of the City or the Trustee, disbursement of such payments to Direct Participants will be the responsibility of DTC, and disbursement of such payments to the Beneficial Owners will be the responsibility of Direct and Indirect Participants.
A Bond Owner shall give notice to elect to have its Bonds purchased or tendered, through its Participant, to the Trustee, and shall effect delivery of such Bonds by causing the Direct Participant to transfer the Participant’s interest in the Bonds, on DTC’s records, to the Trustee. The requirement for physical delivery of Bonds in connection with an optional tender or a mandatory purchase will be deemed satisfied when the ownership rights in the Bonds are transferred by Direct Participants on DTC’s records and followed by a book-entry credit of tendered Bonds to the Trustee’s DTC account. DTC may discontinue providing its services as depository with respect to the Bonds at any time by giving reasonable notice to the City or the Trustee. Under such circumstances, in the event that a successor depository is not obtained, physical certificates are required to be printed and delivered.
The City may decide to discontinue use of the system of book-entry only transfers through DTC (or a successor securities depository). In that event, bonds will be printed and delivered to DTC.
THE TRUSTEE, AS LONG AS A BOOK-ENTRY ONLY SYSTEM IS USED FOR THE BONDS, WILL SEND ANY NOTICE OF REDEMPTION OR OTHER NOTICES TO OWNERS ONLY TO DTC. ANY FAILURE OF DTC TO ADVISE ANY DTC PARTICIPANT, OR OF ANY DTC PARTICIPANT TO NOTIFY ANY BENEFICIAL OWNER, OF ANY NOTICE AND ITS CONTENT OR EFFECT WILL NOT AFFECT THE VALIDITY OF SUFFICIENCY OF THE PROCEEDINGS RELATING TO THE REDEMPTION OF THE BONDS CALLED FOR REDEMPTION OR OF ANY OTHER ACTION PREMISED ON SUCH NOTICE.