HomeMy WebLinkAboutCity CAFR Yr Ended June 30, 2011CITY OF LAKE ELSINORE, CALIFORNIA
COMPREHENSIVE ANNUAL FINANCIAL REPORT
WITH REPORT ON AUDIT
BY INDEPENDENT
CERTIFIED PUBLIC ACCOUNTANTS
FOR THE YEAR ENDED JUNE 30, 2011
Prepared By: Department of Administrative Services
CITY OF LAKE ELSINORE, CALIFORNIA
TABLE OF CONTENTS
For the year ended June 30, 2011
Page
Number
INTRODUCTORY SECTION:
Letter of Transmittal i - vii
Organization Chart viii
Directory of Officials ix
FINANCIAL SECTION:
Independent Auditors' Report 1 - 2
Management's Discussion and Analysis (Required Supplementary Information) 3-14
Basic Financial Statements: 15
Government -wide Financial Statements:
Statement of Net Assets 16
Statement of Activities 17
Fund Financial Statements:
Governmental Funds:
Balance Sheet 18 - 19
Reconciliation of the Governmental Funds Balance Sheet
to the Statement of Net Assets 21
Statement of Revenues, Expenditures and Changes in Fund Balances 22-23
Reconciliation of the Governmental Funds Statement of Revenues,
Expenditures and Changes in Fund Balances to the Statement of Activities 24
Agency Funds:
Statement of Fiduciary Assets and Liabilities 25
Notes to Basic Financial Statements 26-90
Required Supplementary Information: 91
Schedule of Funding Progress 92
Budgetary Comparison Schedules:
General Fund 93
Redevelopment Agency Special Revenue Fund 94
Note to Required Supplementary Information 95
CITY OF LAKE ELSINORE, CALIFORNIA
TABLE OF CONTENTS
(CONTINUED)
For the year ended June 30, 2011
Page
Number
FINANCIAL SECTION (CONTINUED):
Supplementary Information: 97
Other Governmental Funds: 99
Combining Balance Sheet 100
Combining Statement of Revenues, Expenditures and
Changes in Fund Balances 101
Other Special Revenue Funds:
102- 103
Combining Balance Sheet
104- 107
Combining Statement of Revenues, Expenditures and
Changes in Fund Balances
108 - 111
Schedules of Revenues, Expenditures and Changes in
Fund Balance - Budget and Actual:
Supplemental Law Enforcement Service Special Revenue Fund
112
L.L.E.B.G Program Special Revenue Fund
113
Office of Traffic and Safety Special Revenue Fund
114
Traffic Offender Special Revenue Fund
115
Gas Tax Special Revenue Fund
116
Transportation Special Revenue Fund
117
Traffic Safety Special Revenue Fund
118
Lighting and Landscaping Special Revenue Fund
119
L.L.M.D. No. 1 Special Revenue Fund
120
Geothermal Special Revenue Fund
121
Air Pollution Special Revenue Fund
122
C.D.B.G Special Revenue Fund
123
Developer Agreement Special Revenue Fund
124
Affordable Housing In Lieu Special Revenue Fund
125
City Hall/Public Works Special Revenue Fund
126
Community Center Special Revenue Fund
127
Lake Side Facilities Special Revenue Fund
128
Animal Shelter Special Revenue Fund
129
Camino Del Norte Special Revenue Fund
130
Miscellaneous Grants Special Revenue Fund
131
N.P.D.E.S. Special Revenue Fund
132
CITY OF LAKE ELSINORE, CALIFORNIA
TABLE OF CONTENTS
(CONTINUED)
For the year ended June 30, 2011
Page
Number
FINANCIAL SECTION (CONTINUED):
Supplementary Information (Continued):
Other Capital Projects Funds:
133
Combining Balance Sheet
134- 135
Combining Statement of Revenues, Expenditures and
Changes in Fund Balances
136- 137
Schedules of Revenues, Expenditures and Changes in
Fund Balance - Budget and Actual:
Miscellaneous Grant Project Capital Projects Fund
138
Park Improvement and Development Capital Projects Fund
139
Street Capital Improvements Capital Projects Fund
140
Storm Drain Capital Projects Fund
141
Library Capital Improvement Capital Projects Fund
142
Signalization Improvement Capital Projects Fund
143
Traffic Improvements Capital Projects Fund
144
City Fire Protection Capital Projects Fund
145
Public Improvements Capital Projects Fund
146
TUMF Capital Projects Fund
147
Redevelopment Agency Capital Projects Fund
148
Schedules of Revenues, Expenditures and Changes in
Fund Balance - Budget and Actual:
Endowment Trust Permanent Fund 149
Agency Funds: 151
Combining Statement of Assets and Liabilities 152
Combining Statement of Changes in Assets and Liabilities 153- 154
Capital Assets: 155
Capital Assets Used in the Operation of Governmental Funds
Schedule by Source 156
CITY OF LAKE ELSINORE, CALIFORNIA
TABLE OF CONTENTS
(CONTINUED)
For the year ended June 30, 2011
STATISTICAL SECTION:
Page
Number
Description of Statistical Section Contents 157
Financial Trends:
Net Assets by Component - Last Nine Fiscal Years 158-159
Changes in Net Assets - Expenses and Program Revenues - Last Nine Fiscal Years 160-161
Changes in Net Assets - General Revenues - Last Nine Fiscal Years 162-163
Fund Balances of Governmental Funds - Last Nine Fiscal Years 164- 165
Changes in Fund Balances of Governmental Funds - Last Nine Fiscal Years 166-167
Revenue Capacity:
Direct and Overlapping Property Tax Rates - Last Ten Fiscal Years 169
Principal Property Taxpayers - Current Year and Nine Years Ago 170
Property Tax Levies and Collections - Last Ten Fiscal Years 171
Assessed Value and Estimated Actual Value of Taxable Property -
Last Ten Fiscal Years 172- 173
Debt Capacity:
Ratios of Outstanding Debt by Type - Last Ten Fiscal Years 174-175
Ratio of General Bonded Debt Outstanding - Last Ten Fiscal Years 176
Direct and Overlapping Debt 177
Legal Debt Margin Information - Last Ten Fiscal Years 178-179
Pledged Revenue Coverage - Last Ten Fiscal Years 180
Demographic and Economic Information:
Demographic and Economic Statistics - Last Ten Fiscal Years 181
Principal Employers - Current Year and Nine Years Ago 182
Operating Information:
Full -Time and Part-Time City Employees by Function - Last Ten Fiscal Years 183
Operating Indicators by Function - Last Ten Fiscal Years 184-185
Capital Asset Statistics by Function - Last Ten Fiscal Years 186
INTRODUCTORY SECTION
CITY OF
LAKE LSII` MICE
DREAM EXTREME,
March 12, 2012
Honorable Mayor and City Council
Lake Elsinore, California
Submitted for your information and consideration is the June 30, 2011 Comprehensive Annual
Financial Report for the City of Lake Elsinore, California. Responsibility for both the accuracy of
the presented data and the completeness and fairness of the presentation, including all disclosures,
rests with the City. We believe the data, as presented, is accurate in all material aspects; that it is
presented in a manner designed to fairly set forth the financial activity of its various funds; and that
all disclosure necessary to enable the reader to gain an understanding of the City's financial affairs
have been included.
The significant accounting policies of the City are described in the notes to the financial
statements. These accounting policies have been reviewed by the City's independent certified
public accountants and are in conformance with the recommendations of the Governmental
Accounting Standards Board.
The City's Financial Statements have been examined by our independent auditors, White Nelson
Diehl Evans LLP.
The Financial Reporting Entity
For financial reporting purposes, in conformance with the criteria of Governmental Accounting
Standard Board "Defining the Governmental Reporting Entity ", this report includes the operating
statements and statements of financial position of the City of Lake Elsinore, the Lake Elsinore
Redevelopment Agency, the Lake Elsinore Public Financing Authority and the Lake Elsinore
Recreation Authority. While each is a separate legal entity, the City Council, acting as Council
and Board of Directors, exercises oversight responsibility for each. Each was organized for the
benefit of the City and its residents and conducts all activity within its boundaries. They are
therefore shown as blended Component Units. The Redevelopment Agency is reported as a
Special Revenue Fund, a Debt Service Fund and a Capital Project Fund. The Public Financing
Authority is reported as a Debt Service Fund. The Recreation Authority is reported as a Debt
Service Fund.
-I -
Honorable Mayor and City Council
March 12, 2012
Services Provided
The City provides a wide range of municipal services for its citizens, including police, fire
services, parks, community services, planning and development, street lights and improvements
and general administration. Police and fire services are contracted through the County of
Riverside.
Reporting Standards
For reporting purposes, the City has adopted the provisions of Statement No. 1 of the
Governmental Accounting Standards Board (GASB), which established the authoritative status of
the pronouncements of its predecessor, the National Council on Governmental Accounting
(NCGA), and of the accounting and financial reporting guidance contained in the Industry Audit
Guide, Audits of State and Local Governmental Units, issued by the American Institute of
Certified Public Accountants. Through widespread acceptance, pronouncements of the NCGA,
GASB and the AICPA through its Industry Audit Guide, have long been acknowledged as the
primary authoritative statements of GAAP applicable to state and local government.
Financial Statement Format
This report is organized into three sections: introductory, financial and statistical.
The introductory section includes a table of contents, this transmittal letter, the City's principal
officers and its table of organization.
The financial section includes: (1) the Auditors' Report, (2) the MD &A which is intended to
disclose any known significant events or decisions that affect the financial condition of the City,
(3) the basic financial statements comprised of government -wide financial statements and fund
financial statements which provide an overview of the City's financial position and result of
operations, along with "notes" developed to ensure full disclosure and fair presentation, (4)
required supplementary information and (5) combining and individual fund financial statements
and schedules designed to present detailed information on individual funds, to demonstrate
compliance with finance - related legal and contractual requirements and to assure adequate
disclosure at the individual fund entity level.
The statistical section, which is unaudited, provides financial data usually covering more than two
years and other non - accounting data. The tables reflect financial trends, revenue capacity, debt
capacity, demographics, and operating information of the City government.
-ii -
Honorable Mayor and City Council
March 12, 2012
Fund Descriptions
The various fund types used by the City and included in this report are as follows:
Fund Category
Governmental Funds
Fiduciary Funds
Fund Type
General Fund
Special Revenue Funds
Debt Service Funds
Capital Project Funds
Permanent Fund
Agency Funds
A description of these funds is included in the "Notes to the Financial Statements ".
Budgetary Control and Accounting Basis
Budgetary control is maintained at the departmental level. To facilitate reporting, budgetary
control is maintained through computer - generated reports of the financial transactions of all City
funds. These reports allow for timely review and continuous assessment of the City's financial
condition. Capital Project expenditures are controlled at the project level.
The objective of budgetary control is to ensure compliance with legal provisions embodied in the
annual appropriated budget approved by the City Council and various Boards. Budgets are
adopted for the General Fund, Special Revenue Funds and certain Capital Project Funds. The level
of budgetary control is maintained at the expenditure object level for fixed assets. Schedules of
acquisitions of fixed assets at a cost of $5,000 or more and infrastructure at a cost of $50,000 or
more are included.
Encumbrance accounting is utilized to assure effective budgetary control; purchase orders and
contracts are reviewed and a determination is made that valid and sufficient appropriations exist for
payment for ordered goods and services. Encumbrances outstanding at year -end do not constitute
expenditures or liabilities. Unencumbered appropriations lapse at year -end, and encumbrances
outstanding at that time are reported as a reserve of fund balance for subsequent year expenditures.
In developing and modifying the City's accounting system, consideration has been given to the
adequacy of internal accounting controls. Internal accounting controls are designed to provide
reasonable, but not absolute, assurance regarding the safeguarding of assets and the reliability of
financial records and maintaining accountability of assets.
The concept of reasonable assurance recognizes that the cost of control should not exceed its
benefits. The evaluation of this cost benefit relationship rests with management.
All internal control evaluations occur within the bounds as described. We believe that the City's
internal accounting controls adequately safeguard assets and provide reasonable assurance of
proper recording of financial transactions.
- iii -
Honorable Mayor and City Council
March 12, 2012
General Government Operations
Revenue for the governmental fiend types totaled $64,024,893 for fiscal year 2010 -11. The amount
of revenues from various sources is shown in the following tabulation and represents an overall
increase of $1,420,425 or 2.3% from the 2009 -10 fiscal year.
Significant revenue increases in the Governmental Fund Types occurred in licenses, permits and
fees, fines and forfeitures, and contribution from property owners. Contribution from property
owners relates to bond proceeds received related infrastructure cost for the Summerly development
project. Decreases which occurred in intergovernmental revenues are related to a decrease in
funding for capital projects. Investment income is reduced due to the refunding of various tax
allocation bonds and other revenue decrease due to the completion of capital projects.
Expenditures for governmental purposes totaled $80,562,329 for fiscal year 2010 -11. Levels of
expenditures for major functions of the City are shown in the following tabulation:
Increase
Percent
Percent
(Decrease)
Of
Revenue Source
Amount
of Total
Prior Year
Change
Taxes
34,000,919
53.1%
53,749
0.2%
Licenses, permits and fees
3,291,938
5.1%
704,020
27.2%
Intergovernmental revenues
4,680,095
7.3%
(2,642,813)
(36.1 %)
Charges for services
1,383,934
2.2%
(210,840)
(13.2 %)
Fines and forfeitures
972,457
1.5%
238,665
32.5%
Investment income
7,147,497
11.2%
(781,114)
(9.9 %)
Special assessments
1,586,602
2.5%
7,823
0.5%
Contribution from property owners
5,352,614
8.4%
5,352,614
-
Other
5,608,837
8.8%
(1,301,679)
18.8%
TOTAL
$64,024,893
2.3%
1 420 425
2.3%
Significant revenue increases in the Governmental Fund Types occurred in licenses, permits and
fees, fines and forfeitures, and contribution from property owners. Contribution from property
owners relates to bond proceeds received related infrastructure cost for the Summerly development
project. Decreases which occurred in intergovernmental revenues are related to a decrease in
funding for capital projects. Investment income is reduced due to the refunding of various tax
allocation bonds and other revenue decrease due to the completion of capital projects.
Expenditures for governmental purposes totaled $80,562,329 for fiscal year 2010 -11. Levels of
expenditures for major functions of the City are shown in the following tabulation:
-iv -
Increase
Percent
Percent
(Decrease)
Of
Amount
of Total
Prior Year
Change
General government
8,904,165
11.1%
2,106, 845
31.0%
Public safety
11,212,605
13.9%
190,074
1.7%
Community development
18,805,484
23.3%
15,755,983
516.7%
Public services
6,221,286
7.7%
(6,679,778)
(51.8 %)
Community services
3,714,646
4.6%
401,564
12.1%
Pass - through payments
7,655,170
9.5%
(127,343)
(1.6 %)
Set aside suspension
-:
0.0%
(3,750,000)
(100.0 %)
SERAF payments
1,436,411
1.8%
(5,540,442)
(79.4 %)
Capital expenditures
2,931,038
3.6%
(1,463,805)
(33.3 %)
Refunding bond payment
1,832,080
2.3%
(155,665)
(7.8 %)
Bond issue costs
1,874,527
2.3%
289,562
18.3%
Debt service and costs
15,974,917
19.8%
(381,573)
2.3%
TOTAL
$80,562,329
S645,422
0.8%
-iv -
Honorable Mayor and City Council
March 12, 2012
The net overall expenditure increase for the governmental fund types totaled $645,422. Increases
in general government (related to other capital project funds), and community development
(related to $IImillion in costs for the Pottery Court low- income housing project) are offset by
decreases in public services related to projects, the one -time set aside suspension for the housing
fund in fiscal year 2009 -2010, reduced SERAF payment and one -time capital project expenditures.
Cash Management
Cash temporarily idle during the year was invested in State Local Agency Investment Fund and
Government - backed securities throughout the year.
The City's investment policy continues to rely on safety and liquidity as primary concerns.
Risk Management
The City is a member of the Southern California Joint Powers Insurance Authority which provides
coverage for liability, facility and automobile protection. The Authority utilizes a staff of risk
managers to assist member agencies in all aspects of coverage and safety issues. Workers
compensation coverage is still underwritten by the California State Compensation Corporation.
Debt Administration
The City of Lake Elsinore, not including the component units, has no outstanding bond debt as of
June 30, 2011.
The City's Financing Authority, a joint powers authority between the City and Redevelopment
Agency, was put in place to provide an economical and cost effective pool of funds to acquire
authorized local public obligations.
Certain bonds issued and sold through the Financing Authority were authorized under the Marks -
Roos Local Bond Pooling Act of 1985.
Major Initiatives for the Year and Prospects for the Future
The City Council's budgetary and legislative priorities continue to be public safety and
transportation.
-v -
Honorable Mayor and City Council
March 12, 2012
Public Safety
The City Council has made public safety its number one operating budget priority. The public
safety budget increased $190,074 amounting to 1.7% of the total net increase in the governmental
expenditures.
Transportation
Improving circulation to keep pace with growth is a major City Council goal. The strategies used
by the City Council include partnering with the Riverside County Transportation Commission and
other entities, such as Caltrans, to prioritize transportation projects and funding and updating the
City's General Plan, including the circulation element. The City's General Plan was completed
and approved by City Council in December 2011.
Given the City Council's dedication to quality of life, while being committed to preserving our
heritage and improving public safety, the City of Lake Elsinore is a place to dream extreme.
Independent Audit
State statutes require an annual audit by independent certified public accountants. The firm of
White Nelson Diehl Evans LLP was selected by the City Council and has just finished their
seventh year. Auditing standards generally accepted in the United States of America and the
standards set forth in the General Accounting Office's Government Auditing Standards were used
by the auditors in conducting the engagement. The auditors' report on the basic financial
statements is included in the financial section of this report.
-vi -
Honorable Mayor and City Council
Acknowledgments
We wish to express appreciation to all Finance Division staff' for their contribution to the
department during this fiscal year. Their efforts are reflected in this report and in other documents
resulting from the annual financial management process.
The Mayor, members of the City Council and Management are to be commended for their interest
and support in conducting financial operations of the City in a responsible and progressive manner.
Respectfully submitted,
CITY OF LAKE ELSINORE
A&Z
e tybeet A. Brady
Manager
- vii
J n s R. Riley, CPA
Qjfector of Administrative Se (i/es
cirr ur
City of Lake Elsinore
2010 -2011 Organizational Chart
PUBLIC SAFETY ADVISORY COMMISSION
(ADDOlnted Officials)
II PLANNING COMMISSION II
June 30, 2011
City Council
Redevelopment Agency
Public Finance
Authority
LE Recreation Authority
(Elected Officials)
CITY MANAGERS OFFICE
yr- i_��r•�:�u
CITY CLERK
FIRE DEPARTMENT I POLICE DEPARTMENT I=S & REC DEPT II
COMMUNITY DEV DEPT 11 FF ADMIN SERVICES DEPT PUBLIC WORKS DEPT
CITY OF LAKE ELSINORE
DIRECTORY OF OFFICIALS*
June 30, 2011
ELECTED OFFICIALS
Brian Tisdale
Mayor
Daryl Hickman
Mayor Pro Tern
Robert E. Magee
Councilmember
Melissa A. Melendez
Councilmember
Peter Weber
Councilmember
Allen Baldwin Treasurer
ADMINISTRATION
Robert A. Brady
City Manager
Virginia J. Bloom
City Clerk
Barbara Leibold
City Attorney
Pat Kilroy
Director of Lake, Parks & Recreation
James R. Riley
Director of Administrative Services
Ken Seumalo
Director of Public Works
Vacant
Director of Community Development
*At date of issuance
-ix -
FINANCIAL SECTION
INDEPENDENT AUDITORS' REPORT
City Council Members
City of Lake Elsinore
Lake Elsinore, California
We have audited the accompanying financial statements of the governmental activities, each major fund, and the
aggregate remaining fund information of the City of Lake Elsinore, as of and for the year ended June 30, 2011,
which collectively comprise the City's basic financial statements as listed in the table of contents. These
financial statements are the responsibility of the City of Lake Elsinore's management. 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 of material misstatement. An audit
includes consideration of internal control over financial reporting as a basis for designing audit procedures that
are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the
City's internal control over financial reporting. Accordingly, we express no such opinion. An audit also
includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements.
An audit also includes assessing the accounting principles used and significant estimates made by management,
as well as evaluating the overall financial statement presentation. We believe that our audit provides a
reasonable basis for our opinions.
In our opinion, the financial statements referred to above present fairly, in all material respects, the respective
financial position of the governmental activities, each major fund, and the aggregate remaining fund information
of the City of Lake Elsinore, as of June 30, 2011, and the respective changes in financial position for the year
then ended in conformity with accounting principles generally accepted in the United States of America.
The basic financial statements have been prepared assuming that the Lake Elsinore Redevelopment Agency
(Agency), a blended component unit of the City, will continue as a going concern. The Agency's activities are
accounted for in the Redevelopment Agency Special Revenue Fund and the Redevelopment Agency Debt
Service Fund, which are all considered to be major funds of the City, and the Redevelopment Agency Cost
Recovery System Special Revenue Fund and the Redevelopment Agency Capital Projects Fund which are
reported in the aggregate fund information of the City. As explained further in Note 21, on December 29, 2011,
the California Supreme Court upheld California Assembly Bill lx 26 which provides for the dissolution of
redevelopment agencies and invalidated Assembly Bill lx 27 which allowed an alternative for redevelopment
agencies to continue operations. The California Supreme Court's decisions raise substantial doubt about the
ability of the Redevelopment Agency Special Revenue Fund and the Redevelopment Agency Debt Service Fund
to continue as a going concern. The financial statements do not include any adjustments that might result from
the outcome of this uncertainty.
-1-
2875 Michelle Drive, Suite 300, Irvine, CA 92606 • Tel: 714.978.1300 • Fax: 714.978.7893
Offices located in Orange and San Diego Counties
As described in Note 14, the City has implemented the provisions of Governmental Accounting Standards Board
Statement Number 54, "Fund Balance Reporting and Governmental Fund Type Definitions ", for the year ended
June 30, 2011.
In accordance with Government Auditing Standards, we have also issued our report dated March 12, 2012, on
our consideration of the City of Lake Elsinore's internal control over financial reporting and on our tests of its
compliance with certain laws, regulations, contracts, 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 the internal control over financial reporting or on
compliance. That report is an integral part of an audit performed in accordance with Government Auditing
Standards and should be considered in assessing the results of our audit.
The management's discussion and analysis, the schedules of funding progress and budgetary comparison
schedules, as listed in the table of contents as required supplementary information, are not a required part of the
basic financial statements but are supplementary information required by the accounting principles generally
accepted in the United States of America. This information is 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 management's discussion and analysis and the schedules of funding progress 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 the audit of the basic financial statements. We do not express an opinion or provide any
assurance on the management's discussion and analysis and the schedules of funding progress because the
limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance.
The budgetary comparison schedules and related note have 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 of the City of Lake Elsinore 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 information is fairly stated in all material respects in relation to the basic financial statements
taken as a whole.
Our audit was made for the purpose of forming opinions on the financial statements that collectively comprise
the City's basic financial statements as a whole. The introductory section, supplementary information and
statistical section, as listed in the table of contents, are presented for purposes of additional analysis and are not
a required part of the basic financial statements of the City. The supplementary information is the responsibility
of management and was derived from and relates 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 of the City 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
supplementary information is fairly stated in all material respects in relation to the basic financial statements
taken as a whole. The introductory section and statistical section 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.
Irvine, California
March 12, 2012
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ZLOz)
CITY OF LAKE ELSINORE, CALIFORNIA
MANAGEMENT'S DISCUSSION AND ANALYSIS
June 30, 2011
As management of the City of Lake Elsinore, we offer readers of the City of Lake Elsinore's financial
statements this narrative overview and analysis of the financial activities of the City of Lake Elsinore
for the fiscal year ended June 30, 2011. We encourage readers to consider the information presented
here in conjunction with additional information that we have furnished in our letter of transmittal,
which can be found at the beginning of the Comprehensive Annual Financial Report.
FINANCIAL HIGHLIGHTS
■ The assets of the City of Lake Elsinore exceeded its liabilities at the close of the most recent fiscal
year by $165.6 million (net assets).
■ The government's total net assets increased by $5.5 million. The net increase is primarily
attributable to increases in sales taxes and other taxes and fees.
■ At the end of the current fiscal year, unassigned fund balance for the General Fund was
$10.8 million or 46.5 percent of total General Fund expenditures. City Council has designated
$7.6 million of the $10.8 million for future contingencies.
■ The City of Lake Elsinore's total debt had a net increase of $17.9 million during the current fiscal
year. The net increase includes $20.7 million of increases for local agency revenue bonds,
subordinate tax allocation bonds, developer agreements, loans, deferred amounts, and insurance
premium deposits payable. The decreases included $2.8 million for decrease in tax allocation
bonds due to refunding.
OVERVIEW OF THE FINANCIAL STATEMENTS
This discussion and analysis are intended to serve as an introduction to the City of Lake Elsinore's
basic financial statements. The City of Lake Elsinore's basic financial statements comprise of three
components: 1) government -wide financial statements, 2) fund financial statements, and 3) notes to the
basic financial statements. This report also contains other supplementary information in addition to the
basic financial statements themselves.
See independent auditors' report.
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CITY OF LAKE ELSINORE, CALIFORNIA
MANAGEMENT'S DISCUSSION AND ANALYSIS (CONTINUED)
June 30, 2011
Government -wide Financial Statements
The government -wide financial statements are designed to provide readers with a broad overview of
the City of Lake Elsinore's finances, in a manner similar to a private- sector business.
The statement of net assets presents information on all of the City of Lake Elsinore's assets and
liabilities, with the difference between the two reported as net assets. Over time, increases or
decreases in net assets may serve as a useful indicator of whether the financial position of the City of
Lake Elsinore is improving or deteriorating.
The statement of activities presents information showing how the government's net assets changed
during the most recent fiscal year. All changes in net assets are reported as soon as the underlying
event giving rise to the change occurs, regardless of the timing of related cash flows. Thus, revenues
and expenses are reported in this statement for some items that will only result in cash flows in future
fiscal periods (e.g., uncollected taxes and earned but unused vacation leave).
The governmental activities of the City of Lake Elsinore include general government, public safety,
community development, public services and community services.
The government -wide financial statements can be found on pages 16 - 17 of this report.
Fund Financial Statements
A fund is a grouping of related accounts that is used to maintain control over resources that have been
segregated for specific activities or objectives. The City of Lake Elsinore, like other state and local
governments, uses fund accounting to ensure and demonstrate compliance with finance- related legal
requirements. All of the funds of the City of Lake Elsinore can be divided into two categories:
governmental funds and fiduciary funds.
Governmental Funds
Governmental funds are used to account for essentially the same functions reported as governmental
activities in the government -wide financial statements. However, unlike the government -wide
financial statements, governmental funds financial statements focus on near -term inflows and ou flows
of spendable resources, as well as on balances of spendable resources available at the end of the fiscal
year. Such information may be useful in evaluating a government's near -term financing requirements.
See independent auditors' report.
CITY OF LAKE ELSINORE, CALIFORNIA
MANAGEMENT'S DISCUSSION AND ANALYSIS (CONTINUED)
June 30, 2011
Governmental Funds (Continued)
Because the focus of governmental funds is narrower than that of the government -wide financial
statements, it is useful to compare the information presented for governmental funds with similar
information presented for governmental activities in the government -wide financial statements. By
doing so, readers may better understand the long -term impact of the government's near -term financing
decisions. Both the governmental fund balance sheet and the governmental fund statement of
revenues, expenditures, and changes in fund balances provide a reconciliation to facilitate this
comparison between governmental funds and governmental activities.
The City of Lake Elsinore maintains various individual governmental funds. Information is presented
separately in the governmental fund balance sheet and in the governmental fund statement of revenues,
expenditures, and changes in fund balances for the General Fund, the Redevelopment Agency Special
Revenue Fund, the Redevelopment Agency Debt Service Fund and the Public Financing Authority
Debt Service Fund, which are considered to be major funds. Data from other governmental funds are
combined into a single, aggregated presentation. Individual fund data for each of these other
governmental funds is provided in the form of combining statements elsewhere in this report.
The City of Lake Elsinore adopts an annual appropriated budget for its General Fund, certain Special
Revenue and certain Capital Projects Funds. A budgetary comparison statement has been provided for
the General Fund and certain Special Revenue Funds to demonstrate compliance with this budget.
The basic governmental fund financial statements can be found on pages 18 - 19 and 22 - 23 of this
report.
Fiduciary funds. Fiduciary funds are used to account for resources held for the benefits of parties
outside the government. Fiduciary funds are not reflected in the government -wide financial statement
because the resources of those funds are not available to support the City of Lake Elsinore's own
programs.
The basic fiduciary fund financial statements can be found on page 25 of this report.
Notes to the Basic Financial Statements
The notes provide additional information that is essential to a full understanding of the data provided in
the government -wide and fund financial statements. The notes to the basic financial statements can be
found on pages 26 - 90 of this report.
See independent auditors' report.
-5-
CITY OF LAKE ELSINORE, CALIFORNIA
MANAGEMENT'S DISCUSSION AND ANALYSIS (CONTINUED)
June 30, 2011
Other Information
In addition to the basic financial statements and accompanying notes, this report also presents certain
required supplementary information. Required supplementary information can be found starting on
page 91 of this report. The combining statements referred to earlier in connecting with other
governmental funds are presented immediately following the required supplementary information.
Combining and individual fund statements and schedules can be found on pages 97 - 149 of this report.
GOVERNMENT -WIDE FINANCIAL ANALYSIS
As noted earlier, net assets may serve over time as a useful indicator of a government's financial
position. In the case of the City of Lake Elsinore, assets exceeded liabilities by $165.6 million at the
close of the most recent fiscal year.
Condensed Statements of Net Assets
Assets:
Current and other assets
Capital assets
Total Assets
Liabilities:
Long -term debt outstanding
Other liabilities
Total Liabilities
Net Assets:
Invested in capital assets,
net of related debt
Restricted
Unrestricted
Total Net Assets
See independent auditors' report.
Governmental Activities
2011 2010
$ 175,249,935 $ 150,421,619
154,792,875 156,708,348
330,042,810 307,129,967
145,591,908 127,709,799
18,819,221 19,326,031
164,411,129 147,035,830
141,427,875
142,968,348
134,777,767
110,984,917
(110,573,961)
(93,859,128)
165.631.681 160.094.137
CITY OF LAKE ELSINORE, CALIFORNIA
MANAGEMENT'S DISCUSSION AND ANALYSIS (CONTINUED)
June 30, 2011
GOVERNMENT -WIDE FINANCIAL ANALYSIS (CONTINUED)
For the City of Lake Elsinore, 85.4% of the net assets reflect its investment in capital assets (e.g., land,
buildings, machinery, equipment, and infrastructure); less any related debt used to acquire those assets
that is still outstanding. The City of Lake Elsinore uses these capital assets to provide services to
citizens; consequently, these assets are not available for future spending. Although the City of Lake
Elsinore's investment in its capital assets is reported net of related debt, it should be noted that the
resources needed to repay this debt must be provided from other sources, since the capital assets
themselves cannot be used to liquidate these liabilities.
An additional portion of the City of Lake Elsinore's net assets, 81.4 %, represents resources that are
subject to external restrictions on how they may be used. The deficit balance of approximately
- $110.6 million in unrestricted net assets reflects the fact that governmental activities raise resources
based on when liabilities are expected to be paid, rather than when they are incurred. Most
governments do not have sufficient current resources on hand to cover current and long term liabilities.
The deficit in and of itself should not be considered an economic or financial difficulty; however, it
does measure how far the City has committed the government's future tax revenues for purposes other
than capital acquisition.
The government's total net assets increased by $5.5 million. The net increase is primarily attributable
to increases in sales taxes and other taxes and fees.
See independent auditors' report.
-7-
CITY OF LAKE ELSINORE, CALIFORNIA
MANAGEMENT'S DISCUSSION AND ANALYSIS (CONTINUED)
June 30, 2011
GOVERNMENT -WIDE FINANCIAL ANALYSIS (CONTINUED)
Condensed Statements of Revenues,
Expenses and Changes in Net Assets
Revenues:
Program Revenues:
Charges for services
Operating grants and contributions
Capital grants and contributions
General Revenues:
Taxes:
Property taxes
Sales taxes
Franchise taxes
Other taxes
Fines, forfeitures and penalties
Investment income
Miscellaneous
Total Revenues
Expenses:
General government
Public safety
Community development
Public services
Community services
Interest on long -term debt
Total Expenses
Change in net assets
Net assets at beginning of year, as restated
Net assets at end of year
See independent auditors' report.
Governmental Activities
2011 2010
$ 6,262,474
3,292,972
6,573,426
24,237,023
7,190,695
1,913,807
483,556
972,457
7,782,639
5,705,412
64,414,461
11,079,707
11,212,605
16,060,065
8,145,956
4,704,242
7,674,342
58,876,917
5,537,544
160,094,137
S 165,631,681
$ 5,684,978
4,561,669
25,904,948
6,236,748
1,792,699
519,001
733,792
7,470,635
6,661,239
59,565,709
9,326,224
11,022,531
17,120,129
15,819,793
2,942,031
10,509,806
66,740,514
(7,174,805)
167,268,942
160.094,137
CITY OF LAKE ELSINORE, CALIFORNIA
MANAGEMENT'S DISCUSSION AND ANALYSIS (CONTINUED)
June 30, 2011
Expenses and Program Revenues — Governmental Activities
$35,000,000
$30,000,000
$25,000,000
$20,000,000
$15.000,000
$10,000,000
$5,000,000 L I
General Public safety Community Public Community Intereston
goiernmenl &velopmenl services services long -term
debt
■ E,,qaanses ■ Program Revenues
Revenues by Sources — Governmental Activities
h i6celhuleous
IllV e, t111e11t i11CQ1llC 5,705Al2
chtuges for sell, ice,,
7,182.639 9N
6.262,,•1 -,1
12%
1 M 0
Fines. 1orfeltllres
al {1pellaltle3
— :. }11e1.31111, Kraldti
972, 457
auci col111 illtlticlll
I °0
292972
5N
( thertaxes_r
-453,556
Capital l"ultsallcl
I 4o
olitl ib-LStlolis
I'rauchise w-Kes
6,,5, 3,426j
1,913,8177
10,0
3 °'0
Sides lases
190,695
P1oherty lases
11,0
3.1,33-,033
380,a
See independent auditors' report.
CITY OF LAKE ELSINORE, CALIFORNIA
MANAGEMENT'S DISCUSSION AND ANALYSIS (CONTINUED)
June 30, 2011
FINANCIAL ANALYSIS OF THE GOVERNMENT'S FUNDS
As noted earlier, the City of Lake Elsinore uses fund accounting to ensure and demonstrate compliance
with finance - related legal requirements.
Governmental Funds
The focus of the City of Lake Elsinore's governmental funds is to provide information on near -term
inflows, outflows, and balances of spendable resources. Such information is useful in assessing the
City of Lake Elsinore's financing requirements. In particular, unassigned fund balance may serve as a
useful measure of a government's net resources available for spending at the end of the fiscal year.
As of the end of the current fiscal year, the City of Lake Elsinore's governmental funds reported
combined ending fund balances of $177.6 million, an increase of $17.1 million in comparison with the
prior year. Of the $177.6 million ending fund balance, a net -$27.3 million,( -$38.1 million for the
Redevelopment Agency Debt Service Funds, special revenue funds, and capital project funds, offset by
$10.8 million related to the general fund), constitutes unassigned fund balance, which is available for
spending at the government's discretion. The remainder of fund balance is either nonspendable,
$88.4 million; restricted, $105.2 million; or assigned, $11.3 million to indicate that it is not available
for new spending because it has already been committed.
The General Fund is the chief operating fund of the City of Lake Elsinore. At the end of the current
fiscal year, unassigned fund balance of the General Fund was $10.8 million, while total fund balance
was $14.8 million. As a measure of the General Fund's liquidity, it may be useful to compare both
unassigned fund balance and total fund balance to total fund expenditures. Unassigned general fund
balance represents 46.5% of total General Fund expenditures, while total fund balance represents
63.8% of that same amount.
See independent auditors' report.
-10-
CITY OF LAKE ELSINORE, CALIFORNIA
MANAGEMENT'S DISCUSSION AND ANALYSIS (CONTINUED)
June 30, 2011
FINANCIAL ANALYSIS OF THE GOVERNMENT'S FUNDS (CONTINUED)
The fund balance of the City of Lake Elsinore's General Fund decreased by $0.1 million during the
current fiscal year. Key factors in this decrease are as follows:
■ $0.2 million of non - recurring contributions as transfers out of the General Fund to capital
project funds and special revenue funds.
■ Transfer in from other funds totaled $51,752.
■ Revenues were greater than expenditures of approximately $77,710.
GENERAL FUND BUDGETARY HIGHLIGHTS
The difference between the original budget and the final amended budget reflects a $0.5 million net
increase in appropriations, including transfers out and can be briefly summarized as follows:
■ $624,822 increase in general government activities
■ $136,255 decrease for public safety
■ $321,484 decrease in community development
■ $250,609 increase in public services
■ $131,434 increase to community services
■ $185,000 increase in transfers out for one -time capital items.
See independent auditors' report.
-11-
CITY OF LAKE ELSINORE, CALIFORNIA
MANAGEMENT'S DISCUSSION AND ANALYSIS (CONTINUED)
June 30, 2011
CAPITAL ASSETS AND DEBT ADMINISTRATION
Capital Assets
The City of Lake Elsinore's investment in capital assets for its governmental activities as of
June 30, 2011 amounts to $154.8 million (net of accumulated depreciation). This investment in capital
assets included land, buildings, improvements, machinery and equipment, and infrastructure. The total
decrease in the City of Lake Elsinore's investment in capital assets for the current fiscal year was 1 %.
Major or notable capital asset events during the current fiscal year included the following:
■ Completion of the Rosetta Fire Station & Park
■ Completion of State Route 74/ Interstate 15 interim interchange improvements
■ Other improvements and maintenance of City -owned streets
Capital Assets at Year -End
(Net of Depreciation)
Land
Construction in progress
Buildings and structures
Improvements other than buildings
Machinery and equipment
Furniture and fixtures
Automotive equipment
Infrastructure
Totals
Governmental Activities
2011 2010
$ 5,352,814
2,561,733
21,768,556
3,703,028
710,419
115,583
425,789
120,154,953
154.792.875
$ 5,352,814
14,311,848
14,788,395
3,832,429
737,189
88,450
572,474
117,024,749
156.708.348
Additional information on the City of Lake Elsinore's capital assets can be found in note 4 of this
report.
See independent auditors' report.
-12-
CITY OF LAKE ELSINORE, CALIFORNIA
MANAGEMENT'S DISCUSSION AND ANALYSIS (CONTINUED)
June 30, 2011
CAPITAL ASSETS AND DEBT ADMINISTRATION (CONTINUED)
Long -Term Debt
At year -end, the City has a number of debt issues outstanding. These issues include $64.2 million of
local agency revenue bonds, $60.1 million of tax allocation bonds, $4.6 million of subordinate tax
allocation bonds, $13.4 million of revenue refunding bonds, $2.7 million of disposition and
development agreements debt, $0.4 million of owner participation agreement debt, $0.2 million of
loans payable, $0.5 million in insurance premium deposit payable and $2.9 in OPEB obligation.
Outstanding Debt
Local agency revenue bonds
Tax allocation bonds
Subordinate tax allocation bonds
Deferred amounts
Revenue refunding bonds
Disposition and development agreements
Owner participation agreements
Loans payable
Insurance premium deposit payable
Other post - employment benefit obligation
Compensated absences
Totals
Governmental Activities
2011 2010
$ 64,220,000
60,080,000
4,610,000
(3,444,372)
13,365,000
2,656,593
414,172
204,046
2,877,575
608,894
145,591.908
$ 53,725,000
54,545,000
(1,063,668)
13,740,000
2,739,986
523,588
256,720
518,521
2,086,786
637,866
127.709.799
Additional information on the City of Lake Elsinore's long -term debt can be found in notes 6
through 8 and note 17 of this report.
See independent auditors' report.
-13-
CITY OF LAKE ELSINORE, CALIFORNIA
MANAGEMENT'S DISCUSSION AND ANALYSIS (CONTINUED)
June 30, 2011
ECONOMIC FACTORS AND NEXT YEAR'S BUDGETS AND RATES
• Property taxes are estimated to still the same for the next fiscal year due primarily to property
values remaining flat. Foreclosures have also keep property values flat.
• The retail sales trends increased each quarter in fiscal year 2011 and the projections are
expecting this growth to continue during the next year.
• Investment earnings are estimated to remain low due to low interest rates.
These factors were considered in preparing the City of Lake Elsinore's budget for fiscal year 2011 -12.
REQUEST FOR INFORMATION
This financial report is designed to provide a general overview of the City of Lake Elsinore's finances
for all those with an interest in the government's finances. Questions concerning any of the
information provided in this report or requests for additional financial information should be addressed
to the City of Lake Elsinore, Director of Administrative Services, 130 South Main Street,
Lake Elsinore, California, 92530, jriley_(,lake- elsinore.org.
See independent auditors' report.
-14-
BASIC FINANCIAL STATEMENTS
-15-
CITY OF LAKE ELSINORE, CALIFORNIA
STATEMENT OF NET ASSETS
June 30, 2011
ASSETS:
Cash and investments (Note 2)
Accounts receivable
Accrued interest receivable
Notes receivable (Note 3)
Interest receivable on notes (Note 3)
Due from other governments
Prepaid expense
Land held for resale (Note 5)
Deferred charges
Restricted assets (Note 2):
Cash and investments with fiscal agents
Capital assets, not depreciated (Note 4)
Capital assets, depreciated, net (Note 4)
TOTAL ASSETS
LIABILITIES:
Accounts payable
Accrued liabilities
Other payroll liabilities
Deposits and other liabilities
Due to other governments
Interest payable
Unearned revenue
Noncurrent liabilities (Note 7):
Due within one year
Due in more than one year
TOTAL LIABILITIES
NET ASSETS:
Invested in capital assets, net of related debt
Restricted for:
Debt service
Specific programs
Specific capital projects
Unrestricted (deficit)
TOTAL NET ASSETS
Governmental
Activities
$ 65,639,588
443,335
1,233,794
11,837,000
110,361
6,347,018
499,904
6,136,849
6,096,691
76,905,395
7,914,547
146,878,328
330,042,810
8,279,631
219,332
28,247
2,486
6,569,601
1,789,291
1,930,633
5,165,348
140,426,560
164,411,129
141,427,875
46,375,610
65,962,935
22,439,222
(110,573,961)
$ 165,631,681
See independent auditors' report and notes to basic financial statements.
-16-
CITY OF LAKE ELSINORE, CALIFORNIA
STATEMENT OF ACTIVITIES
Functions /programs
Expenses
Governmental activities:
General government
$ 11,079,707
Public safety
11,212,605
Community development
16,060,065
Public services
8,145,956
Community services
4,704,242
Interest on long -term debt
7,674,342
June 30, 2011
Program Revenues
Charges Operating Capital
for Grants and Grants and
Services Contributions Contributions
Net (Expense)
Revenue and
Changes in
Net Assets
Governmental
Activities
$ 3,167,346 $ 294,486 $ - $ (7,617,875)
- 343,225 - (10,869,380)
1,508,526 285,243 - (14,266,296)
- 2,370,018 1,220,812 (4,555,126)
1,586,602 - 5,352,614 2,234,974
- - - (7,674,342)
Total governmental
activities $ 58,876,917 $ 6,262,474 $ 3,292,972 $ 6,573,426 (42,748,045)
General revenues:
Taxes:
Property taxes
Sales taxes
Franchise taxes
Other taxes
Fines, forfeitures and penalties
Investment income
Miscellaneous
Total general revenues
Change in net assets
NET ASSETS - BEGINNING OF YEAR
NET ASSETS - END OF YEAR
See independent auditors' report and notes to basic financial statements.
-17-
24,237,023
7,190,695
1,913,807
483,556
972,457
7,782,639
5,705,412
48,285,589
5,537,544
160,094,137
$ 165,631,681
CITY OF LAKE ELSINORE, CALIFORNIA
BALANCESHEET
GOVERNMENTAL FUNDS
June 30, 2011
See independent auditors' report and notes to basic financial statements
-18-
Redevelopment
Debt Service Funds
Agency
Public
General
Special Revenue
Redevelopment
Financing
ASSETS
Fund
Fund
Agency
Authority
Cash and investments
$ 12,013,573
$ 7,345,685
$ 18,870,504
$ 399,336
Cash and investments with fiscal agents
-
1,452,640
3,819,389
68,192,520
Accounts receivable
441,896
-
1,439
-
Accrued interest receivable
4,198
1,605
3,789
386
Loans receivable (Note 6)
-
-
-
60,080,000
Notes receivable
-
11,837,000
-
Interest receivable on notes
-
110,361
-
Due from other funds (Note 13)
577,981
-
4,809,388
-
Due from other governments
1,249,927
6,256
-
3,111,521
Advances to other funds (Notes 9 and 13)
3,588,189
37,954,247
-
-
Prepaid items
438,990
-
60,914
Land held for resale
48,369
-
-
TOTAL ASSETS
S 18.314.754
$ 58.756.163
$ 27.565.423
S 131.783.763
LIABILITIES AND FUND BALANCES
LIABILITIES
Accounts payable
$ 3,118,177
$ 452,945
$ 4,141,586
$ -
Accrued liabilities
198,287
-
-
Other payroll liabilities
28,247
Deposits and other liabilities
786
-
-
Due to other funds (Note 13)
-
83,246
14,440
Due to other governments
43,422
6,526,179
-
Advances from other funds (Notes 9 and 13)
-
-
41,542,436
Deferred revenue:
Interest on advance to other funds
16,163,809
-
For property tax
3,750,000
For notes receivable
11,837,000
Interest on notes receivable
-
110,361
Revenue other
110,054
-
TOTAL LIABILITIES
3,498,973
32,314,115
52,293,447
14,440
FUND BALANCES (DEFICIT),
Nonspendable:
Advances to other funds
3,588,189
18,040,438
-
-
Prepaid items
438,990
-
60,914
Land held for resale
-
48,369
-
-
Loans receivable
-
60,080,000
Endowment principal
-
-
-
Restricted for:
Debt service
1,452,640
8,145,581
71,689,323
Capital projects
-
-
-
Low and moderate income housing
6,900,601
General government
-
Public safety
Public services
Community services
Assigned to:
Capital projects funds
-
Unassigned in:
General fund
10,788,602
Special revenue funds
-
Debt service funds
(32,934,519)
Capital projects funds
TOTAL FUND BALANCES (DEFICIT;
14,815,781
26,442,048
(24,728,024)
131,769,323
TOTAL LIABILITIES
AND FUND BALANCES
$ 18.314.754
$ 58.756.163
$ 27.565.423
$ 131.783.763
See independent auditors' report and notes to basic financial statements
-18-
Other Total
Governmental Governmental
Funds Funds
$ 27,010,490 $
65,639,588
3,440,846
76,905,395
-
443,335
8,291
18,269
-
60,080,000
-
11,837,000
1,713,415
110,361
-
5,387,369
1,262,400
5,630,104
-
41,542,436
-
499,904
6,088,480
6,136,849
$ 37.810.507 $
274.230.610
$ 566,923 $
8,279,631
21,045
219,332
-
28,247
1,700
2,486
5,289,683
5,387,369
-
6,569,601
1,713,415
41,542,436
16,163,809
3,750,000
11,837,000
-
110,361
2,590,497
2,700,551
8,469,848
96,590,823
21,628,627
- 499,904
6,088,480 6,136,849
- 60,080,000
30,728 30,728
1,665
81,289,209
9,352,394
9,352,394
-
6,900,601
19,450
19,450
277,695
277,695
5,728,779
5,728,779
1,713,415
1,713,415
11,255,852 11,255,852
10,788,602
(214,942) (214,942)
(13,588) (32,948,107)
(4,899,269) (4,899,269)
29,340,659 177,639,787
$ 37.810.507 $ 274.230.610
-19-
THIS PAGE INTENTIONALLY LEFT BLANK
-20-
CITY OF LAKE ELSINORE, CALIFORNIA
RECONCILIATION OF THE GOVERNMENTAL FUNDS BALANCE SHEET
TO THE STATEMENT OF NET ASSETS
June 30, 2011
Fund balances for governmental funds $ 177,639,787
Amounts reported for governmental activities in the Statement of Net Assets are
different because:
Interfund loans receivable not reported in the Statement of Net Assets. (60,080,000)
Capital assets used in governmental activities are not financial resources and,
therefore, are not reported in the funds. 154,792,875
Long -term liabilities applicable to the City governmental activities are not due and
payable in the current period and accordingly are not reported as fund liabilities.
Interest on long -term liabilities is not accrued in governmental funds, but rather is
recognized as an expenditures when due. Unamortized bond issuance costs are
not current financial resources and are not reported in the funds long -term
liabilities and unamortized discount reported in the Statement of Net Assets
are:
Deferred charges
$ 6,096,691
Deferred amount on refunding
2,886,639
Bond discount
755,032
Bond premium
(197,299)
Interest payable
(1,789,291)
Long -term liabilities
(149,036,280)
(141,284,508)
Long -term assets are not available to pay for current period expenditures and,
therefore, are deferred in the fund financial statements
Interest receivable
$ 1,215,525
Due from other governments
1,486,832
2,702,357
Note and other receivables, interest on interfund loans reported in the special revenue
funds are not available soon enough to pay for current- period expenditures,
and therefore they are reported as deferred revenue in the funds.
The receivables and interest are:
Notes receivable
$ 11,837,000
Other receivable
3,750,000
Interest on notes receivable
110,361
Interest on interfund loans
16,163,809
31,861,170
Net assets of governmental activities
$ 165,631,681
See independent auditors' report and notes to basic financial statements.
-21-
CITY OF LAKE ELSINORE, CALIFORNIA
STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES
GOVERNMENTAL FUNDS
For the year ended June 30, 2011
FUND BALANCES (DEFICIT) - END OF YEAR $ 14,815,781 $ 26,442,048 $ (24,728,024) $ 131,769,323
See independent auditors' report and notes to basic financial statements.
-22-
Redevelopment
Debt Service Funds
Agency
Public
General
Special Revenue
Redevelopment
Financing
REVENUES:
Fund
Fund
Agency
Authority
Property taxes
$ 5,438,551
$ 3,821,776
$ 15,182,719
$ -
Other taxes
9,557,873
-
-
Licenses, permits and fees
1,783,412
-
-
-
Intergovernmental revenues
294,486
285,243
-
-
Charges for services
1,383,934
-
-
-
Fines, forfeitures and penalties
648,643
-
-
-
Investment income
245,583
106,865
165,109
6,282,983
Special assessments
-
-
-
-
Contribution from property owners
-
-
-
-
Miscellaneous
3,935,723
745,976
-
99,865
TOTAL REVENUES
23,288,205
4,959,860
15,347,828
6,382,848
EXPENDITURES:
Current:
General government
6,177,790
-
-
23,227
Public safety
10,659,634
-
-
-
Community development
1,337,689
11,560,419
5,907,376
-
Public services
1,716,863
-
-
-
Community services
3,318,519
-
-
-
Pass - through payments
-
-
7,655,170
-
SERAF payments
-
-
1,436,411
-
Capital outlay
-
-
-
-
Debt service:
Payment to refunding bond escrow agent
-
-
1,832,080
-
Bond issuance costs
-
-
1,361,755
512,772
Principal retirement
725,800
1,573,022
4,255,000
Interest and fiscal charges
-
552,492
2,852,366
5,601,476
TOTAL EXPENDITURES
23,210,495
12,838,711
22,618,180
10,392,475
EXCESS OF REVENUES OVER
(UNDER) EXPENDITURES
77,710
(7,878,851)
(7,270,352)
(4,009,627)
OTHER FINANCING SOURCES (USES):
Discount on bonds
-
-
(621,302)
-
Refunding bonds issued
-
-
29,435,000
-
Tax allocation bonds issued
-
10,160,000
-
Payment to refunding bond escrow agent
-
-
(25,662,920)
-
Loans issued
-
-
-
47,780,000
Loan payments
-
-
-
(27,495,000)
Transfers in
51,752
-
-
-
Transfers out
(231,000)
-
(5,903,453)
-
TOTAL OTHER FINANCING
SOURCES (USES)
(179,248)
-
7,407,325
20,285,000
NET CHANGE IN FUND BALANCES
(101,538)
(7,878,851)
136,973
16,275,373
FUND BALANCES (DEFICIT) -
BEGINNING OF YEAR
14,917,319
34,320,899
(24,864,997)
115,493,950
FUND BALANCES (DEFICIT) - END OF YEAR $ 14,815,781 $ 26,442,048 $ (24,728,024) $ 131,769,323
See independent auditors' report and notes to basic financial statements.
-22-
Other
Total
Governmental
Governmental
Funds
Funds
$ -
$ 24,443,046
-
9,557,873
1,508,526
3,291,938
4,100,366
4,680,095
-
1,383,934
323,814
972,457
346,957
7,147,497
1,586,602
1,586,602
5,352,614
5,352,614
827,273
5,608,837
14,046,152
64,024,893
2,703,148
8,904,165
552,971
11,212,605
-
18,805,484
4,504,423
6,221,286
396,127
3,714,646
-
7,655,170
-
1,436,411
2,931,038
2,931,038
-
1,832,080
-
1,874,527
375,000
6,928,822
39,761
9,046,095
11,502,468
80,562,329
2,543,684
(16,537,436)
(621,302)
- 29,435,000
- 10,160,000
- (25,662,920)
- 47,780,000
- (27,495,000)
6,134,453 6,186,205
(51,752) (6,186,205)
6,082,701 33,595,778
8,626,385 17,058,342
20,714,274 160,5 81,445
$ 29,340,659 $ 177,639,787
-23-
CITY OF LAKE ELSINORE, CALIFORNIA
RECONCILIATION OF THE GOVERNMENTAL FUNDS STATEMENT OF
REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES
TO THE STATEMENT OF ACTIVITIES
For the year ended June 30, 2011
Net change in fund balances - total governmental funds
Amounts reported for governmental activities in the Statement of Activities are
different because:
Governmental funds report capital outlays as an expenditure in the full amount as
current financial resources are used. However, in the Statement of Activities the
cost of these assets is allocated over the estimated useful life as depreciation
expense.
Capital outlay $ 3,415,708
Depreciation expense (5,331,181)
The issuance of long term debt provides current financial resources to governmental
funds, while the repayment of the principal of long term -debt consumes the current
financial resources of governmental funds. Neither transaction, however, has any
effect on net assets. These amounts are the net effect of these differences in the
treatment of long -term debt.
Long -term debt principal payments
Principal amount added on note payable
Refunding bonds issued
Tax allocation bonds issued
Local agency revenue bonds issued
Payment to refunding bond escrow agent
Deferred amount on refunding
Issuance costs
Loans issued
Loan payments
Discount on bonds
Some expenses reported in the Statement of Activities do not require the use
of current financial resources and are not reported as governmental fund
expenditures.
Amortization bond issuance costs
Amortization bond premum
Amortization of deferred amount on refunding
Amortization of bond discount
Interest and fiscal charges
Insurance premium deposit payable
Other post - employment benefit obligation
Compensated absences
Proiect costs
Some revenues reported in the Statement of Activities are not considered to be
available to finance current expenditures and therefore are not reported as
revenues in governmental funds:
Investment income
Taxes and intergovernmental revenue
Licenses, permits, fees and other revenue
Change in net assets of governmental activities
See independent auditors' report and notes to basic financial statements.
-24-
$ 5,072,161
(98,339)
(29,435,000)
(10,160,000)
(12,795,000)
27,495,000
1,900,311
1,874,527
(34,985,000)
29,450,000
621,302
$ (301,313)
21,922
(132,441)
(30,390)
(86,336)
518,521
(790,789)
28,972
11,837,000
$ 635,142
(342,149)
96,574
$ 17,058,342
(1,915,473)
(21,060,038)
11,065,146
389,567
$ 5,537,544
CITY OF LAKE ELSINORE, CALIFORNIA
STATEMENT OF FIDUCIARY ASSETS AND LIABILITIES
AGENCY FUNDS
June 30, 2011
ASSETS
Cash and investments
Cash and investments with fiscal agents
Interest receivable
Due from other governments
TOTAL ASSETS
LIABILITIES
Accounts payable
Deposits and other liabilities
Due to other governments
Due to bondholders
TOTAL LIABILITIES
$ 3,972,038
40,021,632
723
563,056
$ 44,557,449
$ 539,429
2,261,720
3,199,003
38,557,297
$ 44,557,449
See independent auditors' report and notes to basic financial statements
-25-
CITY OF LAKE ELSINORE, CALIFORNIA
NOTES TO BASIC FINANCIAL STATEMENTS
June 30, 2011
1. REPORTING ENTITY AND SIGNIFICANT ACCOUNTING POLICIES:
A. Description of the Reporting Entity:
The City of Lake Elsinore (City) was incorporated April 23, 1888, under the general laws of the
State of California. The City operates under a Council- Member form of government and
provides the following services: public safety (law enforcement), highways and streets,
cultural recreation, public improvements, planning and zoning, and general administrative
services.
The financial statements of the City of Lake Elsinore include the financial activities of the City,
the Lake Elsinore Redevelopment Agency (Agency), the Lake Elsinore Public Financing
Authority (Authority) and the Lake Elsinore Recreation Authority (Recreation Authority). The
basic criteria for including an agency, institution, authority or other organization in a
governmental unit's financial reporting entity is financial accountability. Financial
accountability includes, but is not limited to 1) selection of the governing body, 2) imposition
of will, 3) ability to provide a financial benefit to or impose financial burden on and 4) fiscal
dependency.
There may, however, be factors other than financial accountability that are so significant that
exclusion of a particular agency from a reporting entity's financial statements would be
misleading. These other factors include scope of public service and special financing
relationships.
Based upon the application of these criteria, an agency, institution or authority, may be included
as a component unit in the primary government's financial statements. 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 date of the primary government. A discretely
presented component unit, on the other hand, is reported in a separate column in the combined
financial statements to emphasize it is legally separate from the government. There are no
discretely presented component units in these financial statements. Each blended component
unit presented has a June 30, 2011 year end. The following is a brief review of each component
unit included in the primary government's reporting entity.
See independent auditors' report.
-26-
CITY OF LAKE ELSINORE, CALIFORNIA
NOTES TO BASIC FINANCIAL STATEMENTS
(CONTINUED)
June 30, 2011
1. REPORTING ENTITY AND SIGNIFICANT ACCOUNTING POLICIES (CONTINUED):
A. Description of the Reporting Entity (Continued):
The Lake Elsinore Redevelopment Agency
The Agency was established July 15, 1980, pursuant to the State of California Health and
Safety Code, Section 33000 entitled "Community Redevelopment Law ". Its purpose is to
eliminate blighted areas by encouraging the development of residential, commercial, industrial,
recreational and public facilities. The City Council also acts as the governing body of the
Agency. The Agency's activities are blended with those of the City in these financial
statements and reported as two special revenue funds, a debt service fund, a capital projects
fund and an agency fund.
The Lake Elsinore Public Financing Authority
The Authority is a joint exercise of powers between the City and Agency created by a joint
powers agreement dated July 25, 1989. The purpose of the Authority is to provide, through the
issuance of revenue bonds, a financing pool to fund capital improvement projects. These
revenue bonds are to be repaid solely from the revenues of certain public obligations. The
Authority does not have taxing power. The City Council also acts as the governing body of the
Authority. The Authority's activities are blended with those of the City in these financial
statements and are reported as a debt service fund.
The Lake Elsinore Recreation Authority
The Recreation Authority is a joint exercise of powers between the City and Agency created by
a joint powers agreement dated December 1, 1996. The purpose of the Recreation Authority is
to provide, through the issuance of revenue bonds, a financing pool to fund capital
improvement projects. These revenue bonds are to be repaid solely from the revenues of
certain public obligations. The Recreation Authority does not have taxing power. The City
Council also acts as the governing body of the Recreation Authority. The Recreation
Authority's activities are blended with those of the City in these financial statements and are
reported as a debt service fund.
A component unit financial statement for each component unit previously described may be
obtained at 130 South Main Street, Lake Elsinore, California 92530.
See independent auditors' report.
-27-
CITY OF LAKE ELSINORE, CALIFORNIA
NOTES TO BASIC FINANCIAL STATEMENTS
(CONTINUED)
June 30, 2011
1. REPORTING ENTITY AND SIGNIFICANT ACCOUNTING POLICIES (CONTINUED):
B. Government -Wide and Fund Financial Statements:
The government -wide financial statements (i.e., the statement of net assets and the statement of
changes in net assets) report information about the reporting government as a whole, except for
its fiduciary activities. 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. Likewise, the primary government
(including its blended component units) is reported separately from discretely presented
component units for which the primary government is financially accountable. The City has no
business -type activities or discretely presented component units. For the most part, the effect
of interfund activity has been removed from the government -wide financial statements. Direct
payments have not been eliminated from the functional categories. Internal expenses and
internal payments have been eliminated.
The statement of activities demonstrates the degree to which the direct expenses of a given
function or segment 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.
The underlying accounting system of the City is organized and operated on the basis of
separate funds, each of which is considered to be a separate accounting entity. The operations
of each fund are accounted for with a separate set of self - balancing accounts that comprise its
assets, liabilities, fund equity, revenues and expenditures or expenses, as appropriate.
Governmental resources are allocated to and accounted for in individual funds based upon the
purposes for which they are to be spent and the means by which spending activities are
controlled.
Separate Financial Statements for the government's governmental and fiduciary funds are
presented after the Government -wide Financial Statements. These statements display
information about major funds individually and nonmajor funds in the aggregate for
governmental funds. Fiduciary statements, even though excluded from the government -wide
financial statements includes financial information that primarily represent assets held by the
City in a custodial capacity for other individuals or organizations.
See independent auditors' report.
CITY OF LAKE ELSINORE, CALIFORNIA
NOTES TO BASIC FINANCIAL STATEMENTS
(CONTINUED)
June 30, 2011
1. REPORTING ENTITY AND SIGNIFICANT ACCOUNTING POLICIES (CONTINUED):
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 and
fiduciary fund financial statements. Under the economic resources measurement focus, all
assets and liabilities (whether current or noncurrent) associated with their activity are included
on their balance sheets. Operating statements present increases (revenues) and decreases
(expenses) in total net assets. Under the accrual basis of accounting, revenues are recorded
when earned and expenses are recorded when a liability is incurred, regardless of the timing of
related cash flows. 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. Nonexchange transactions, in which the City gives (or receives) value without
directly receiving (or giving) equal value in exchange include grants, entitlements, and
donations. Revenue from grants, entitlements, and donations is recognized in the fiscal year in
which all the eligibility requirements have been satisfied.
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.
Governmental fund financial statements are reported using the current financial resources
measurement focus and the modified accrual basis of accounting. Under the current financial
resources measurement focus, only current assets and current liabilities are generally included
on their balance sheets. The reported fund balance (net current assets) is considered to be a
measure of "available spendable resources ". Governmental fund operating statements present
increases (revenues and other financing sources) and decreases (expenditures and other
financing uses) in net current assets. Accordingly, they are said to present a summary of
sources and uses of "available spendable resources" during a period. Noncurrent portions of
long -term receivables due to governmental funds are reported on their balance sheets in spite of
their spending measurement focus. However, special reporting treatments are used to indicate
that they should not be considered "available spendable resources" since they do not represent
net current assets. Recognition of governmental fund type revenue represented by noncurrent
receivables is deferred until they become current receivables. Noncurrent portions of other
long -term receivables are reported under the nonspendable fund balance category.
See independent auditors' report.
-29-
CITY OF LAKE ELSINORE, CALIFORNIA
NOTES TO BASIC FINANCIAL STATEMENTS
(CONTINUED)
June 30, 2011
1. REPORTING ENTITY AND SIGNIFICANT ACCOUNTING POLICIES (CONTINUED):
C. Measurement Focus, Basis of Accounting, and Financial Statement Presentation (Continued):
Under the modified accrual basis of accounting, revenues are considered to be 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 to be 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, except for principal and interest on general long -term
liabilities and compensated absences which are recognized as expenditures to the extent they
have matured. General capital asset acquisitions are reported as expenditures in governmental
funds. Proceeds of general long -term liabilities are reported as other financing sources.
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 to be susceptible to accrual as revenue of the current period. All
other revenue items are considered to be measurable and available only when cash is received
by the government.
D. Fund Classifications:
The funds designated as major funds are determined by a mathematical calculation consistent
with GASB Statement No. 34. The City reports the following major governmental funds:
The General Fund is used to account for all financial resources of the City, except for those
required to be accounted for in another fund.
The Redevelopment Agency Special Revenue Fund is used to account for 20% set -aside for
low and moderate income projects. Expenditures for this fund are restricted to low and
moderate income projects.
The Redevelopment Agency Debt Service Fund is used to account for the accumulation of
resources for, and the payment of, long -term debt principal, interest and related costs within the
Rancho Laguna I, Rancho Laguna II and Rancho Laguna III project areas.
The Public Financing Authority Debt Service Fund is used to account for the accumulation of
resources for, and the repayment of, long -term debt principal, interest and related costs of the
Authority.
See independent auditors' report.
-30-
CITY OF LAKE ELSINORE, CALIFORNIA
NOTES TO BASIC FINANCIAL STATEMENTS
(CONTINUED)
June 30, 2011
1. REPORTING ENTITY AND SIGNIFICANT ACCOUNTING POLICIES (CONTINUED):
D. Fund Classifications (Continued):
Additionally, the City reports the following fund types:
The Special Revenue Funds are used to account for the proceeds of specific revenue sources
that are restricted by law or external agreements to expenditure for specific purposes.
The Debt Service Fund is used to account for debt service transactions including revenue
collections and payments of principal and interest on long -term obligations of the component
unit.
The Capital Projects Funds are used to account for financial resources to be used for the
acquisition or construction of redevelopment projects and administrative expenses.
The Agency Funds are used to account for money received by the City as an agent for
individuals, other governments and other entities.
E. Explanation of Differences between the Governmental Funds Balance Sheet and the Statement
of Net Assets:
The "total fund balances" of the City's governmental funds $177,639,787 differs from "net
assets" of governmental activities $165,631,681 reported in the Statement of Net Assets. This
difference primarily results from the long -term economic focus of the statement of net assets
versus the current financial resources focus of the governmental fund balance sheets.
Loans Receivable
Loans receivable from the Agency to the Authority are not reported in the Statement of Net
Assets. All interfund assets are reported in the funds.
Loan receivable from LERDA (60,080,000)
See independent auditors' report.
-31-
CITY OF LAKE ELSINORE, CALIFORNIA
NOTES TO BASIC FINANCIAL STATEMENTS
(CONTINUED)
June 30, 2011
1. REPORTING ENTITY AND SIGNIFICANT ACCOUNTING POLICIES (CONTINUED):
E. Explanation of Differences between the Governmental Funds Balance Sheet and the Statement
of Net Assets (Continued):
Capital Assets
Capital assets are recorded as expenditures in the full amount as current financial resources are
used in the governmental funds. However, the Statement of Net Assets allocates these capital
assets as financial resources over their estimated useful life.
Capital assets, net of depreciation
Bond Issuance Costs
154,792.875
Bond issuance costs are due and payable in the current period and accordingly reported as an
expenditure for the full amount when paid in the governmental funds. However, the Statement
of Net Assets reports an asset for the unamortized portion of these costs over the life of the
bond.
Bond issuance costs $ 6,398,004
Amortization (301,313)
Unamortized bond issuance costs 6,096,691
Long -Term Debt Transactions
Long -term liabilities and related items such as bond premiums, deferred amounts on refunding,
and interest payable on these liabilities applicable to the City's governmental activities are not
due and payable in the current period and accordingly are not reported as fund liabilities. All
liabilities and related items (both current and long -term) are reported in the Statement of Net
Assets. Balances at the end of this fiscal year were:
Interest payable on long -term liabilities $ (1,789,291)
Long -term liabilities (149,036,280)
Deferred amounts on refunding 2,886,639
Bond premium (197,299)
Bond discount 755,032
Long -term debt transactions (147,381,199)
See independent auditors' report.
-32-
CITY OF LAKE ELSINORE, CALIFORNIA
NOTES TO BASIC FINANCIAL STATEMENTS
(CONTINUED)
June 30, 2011
1. REPORTING ENTITY AND SIGNIFICANT ACCOUNTING POLICIES (CONTINUED):
E. Explanation of Differences between the Governmental Funds Balance Sheet and the Statement
of Net Assets (Continued):
Long -Term Assets
Receivables applicable to the City's governmental activities which are not available to pay for
current period expenditures, and are deferred in the fund financial statements. All receivables
(both current and long -term) are reported in the Statement of Net Assets. Balances at the end of
this fiscal year were:
Interest receivable $ 1,215,525
Due from other governments 1,486,832
Long -term receivables 2,702,357
Notes Receivable, Other Receivables and Interest
Notes receivable, other receivables and interest on interfund loans reported in the special
revenue funds are not available soon enough to pay for current- period expenditures, and
therefore they are reported as deferred revenue in the funds.
Notes receivable $ 11,837,000
Other receivables 3,750,000
Interest on interfund loans 16,163,809
Interest on notes receivable 110,361
31,861,170
Reclassification and Eliminations
Interfund balances must generally be eliminated in the government -wide statements, except for
net residual amounts due between governmental activities. Amounts involving fiduciary funds
should be reported as external transactions. Any allocations must reduce the expenses of the
function from which the expenses are being allocated, so that expenses are reported only once,
in the function in which they are allocated.
See independent auditors' report.
-33 -
CITY OF LAKE ELSINORE, CALIFORNIA
NOTES TO BASIC FINANCIAL STATEMENTS
(CONTINUED)
June 30, 2011
1. REPORTING ENTITY AND SIGNIFICANT ACCOUNTING POLICIES (CONTINUED):
F. Explanation of Differences between the Governmental Fund Statement of Revenues,
Expenditures and Changes in Fund Balances and the Statement of Activities:
The "net change in fund balances" for governmental funds $17,058,342 differs from the
"change in net assets" for governmental activities $5,537,544 reported in the Statement of
Activities. The differences arise primarily from the long -term economic focus of the statement
of activities versus the current financial resources focus of the governmental funds. The effect
of the differences is illustrated below.
Depreciation of Capital Assets
Capital assets are reported as expenditures in full in the year of acquisition as current financial
resources are used in governmental funds. However the costs of these capital assets are
allocated over their estimated useful life in the Statement of Activities through depreciation.
Donated assets and disposal of assets are reported only in the Statement of Activities.
Capital outlay $ 3,415,708
Depreciation expense (5,331,181)
1,915,473)
Long -Term Debt Transactions
Some revenues and expenditures reported in the Statement of Revenues, Expenditures and
Changes in Fund Balances are included as an addition or deletion of long -term liabilities in the
Statement of Net Assets.
Long -term debt principal payments
Principal amount added on note payable
Refunding bonds issued
Tax allocation bonds issued
Local agency revenue bonds issued
Payment to refunding bond escrow agent
Deferred amount on refunding
Issuance costs
Loans issued
Loan payments
Discount on bonds
Total long -term debt transactions
See independent auditors' report.
-34-
$ 5,072,161
(98,339)
(29,435,000)
(10,160,000)
(12,795,000)
27,495,000
1,900,311
1,874,527
(34,985,000)
29,450,000
621,302
(21,060,038)
CITY OF LAKE ELSINORE, CALIFORNIA
NOTES TO BASIC FINANCIAL STATEMENTS
(CONTINUED)
June 30, 2011
1. REPORTING ENTITY AND SIGNIFICANT ACCOUNTING POLICIES (CONTINUED):
F. Explanation of Differences between the Governmental Fund Statement of Revenues,
Expenditures and Changes in Fund Balances and the Statement of Activities (Continued):
Bond Issuance Costs
Bond issuance costs are due and payable in the current period and accordingly reported as an
expenditure for the full amount when paid in the governmental funds. However, the Statement
of Activities reports an expense for the unamortized portion of these costs over the life of the
bond.
Amortization of bond issuance costs
Bond Premium/Discount
(301.313)
Bond premiums /discounts are reported as revenues /expenditures for the full amount when
bonds are issued in the governmental funds. However, the Statement of Activities reports an
increase /decrease in expense for the unamortized portion of these costs over the life of the
bond.
Amortization of bond premium $ 21,922
Amortization of bond discount (30,390)
(8.468)
Interest on Long -Term Debt
Interest payable on long -term debt does not require the use of current financial resources and is
not reported as governmental fund expenditures. However, these expenses are reported in the
Statement of Activities.
Interest and fiscal charges
Deferred Amount
(86,336)
In the governmental funds, proceeds from refunding bonds and related payment to refund bond
escrow agent are reported in the full amount in the year of the refunding. For the Statement of
Activities any gain or loss is deferred and amortized over the shorter period over which
principal is to be paid on the refunded bonds or issued bonds.
Amortization of deferred amount on refunding (132.441)
See independent auditors' report.
-35-
CITY OF LAKE ELSINORE, CALIFORNIA
NOTES TO BASIC FINANCIAL STATEMENTS
(CONTINUED)
June 30, 2011
1. REPORTING ENTITY AND SIGNIFICANT ACCOUNTING POLICIES (CONTINUED):
F. Explanation of Differences between the Governmental Fund Statement of Revenues,
Expenditures and Changes in Fund Balances and the Statement of Activities (Continued):
Other Expenses
Some expenses reported in the Statement of Activities do not require the use of current
financial resources and are not reported as governmental fund expenditures.
Insurance premium deposit payable $ 518,521
Other post - employment benefit obligation (790,789)
Compensated absences 28,972
Project costs 11,837,000
11,593,704
Interest on Long -Term Receivables
Interest on the discount of long -term receivables from the Agency to the Authority is not
reported on the Statement of Activities. However, these revenues are reported as governmental
fund revenues.
Investment income 662.853
Interest on Investments in Local Obligations
The net change in interest receivable on investments in local obligations, which is not available
to pay for current expenditures, is not reported in the Fund Financial Statements.
Interest on investments in local obligations S (27,711)
Other Revenues
Some revenues reported in the Statement of Activities are not considered to be available to
finance current expenditures, and therefore are not reported as revenues in the governmental
funds.
Taxes, intergovernmental revenue and other revenue (245.575)
See independent auditors' report.
-36-
CITY OF LAKE ELSINORE, CALIFORNIA
NOTES TO BASIC FINANCIAL STATEMENTS
(CONTINUED)
June 30, 2011
1. REPORTING ENTITY AND SIGNIFICANT ACCOUNTING POLICIES (CONTINUED):
F. Explanation of Differences between the Governmental Fund Statement of Revenues,
Expenditures and Changes in Fund Balances and the Statement of Activities (Continued):
Reclassification and Eliminations
Interfund balances must generally be eliminated in the government -wide financial statements,
except for net residual amounts due between governmental activities. Amounts involving
fiduciary funds should be reported as external transactions. Any allocations must reduce the
expenses of the function from which the expenses are being allocated, so that expenses are
reported only once, in the function in which they are allocated.
G Encumbrances:
Encumbrances represent commitments related to unperformed contracts for goods or services.
Encumbrance accounting, under which purchase orders, contracts, and other commitments for
the expenditure of resources are recorded to reserve that portion of the applicable appropriation,
is employed as an extension of formal budgetary integration in the General Fund, Special
Revenue Funds and Capital Projects Funds. Unexpended and unencumbered appropriations of
the governmental funds automatically lapse at the end of the fiscal year. Encumbrances
outstanding at year end are reported as committed fund balances and do not constitute
expenditures or liabilities because the commitments are reappropriated the following year.
H. Investments:
Investments are reported at fair value, except for the investment contract and investments in
local obligations, which are reported at cost, because the investments are not transferable and
the fair values are not affected by changes in interest rates. Investment income includes interest
earnings, changes in fair value, and any gains or losses related to the liquidation or sale of the
investment.
I. Employee Compensated Absences:
In accordance with GASB Statement No. 16, a liability is recorded for unused vacation, sick,
holiday benefits and compensatory leave balances since the employees' entitlement to these
balances are attributable to services already rendered and it is probable that virtually all of these
balances will be liquidated by either paid time off or payment upon termination or retirement.
The amount recorded in accordance with GASB Statement No. 16 at June 30, 2011 was
$608,894.
See independent auditors' report.
-37-
CITY OF LAKE ELSINORE, CALIFORNIA
NOTES TO BASIC FINANCIAL STATEMENTS
(CONTINUED)
June 30, 2011
1. REPORTING ENTITY AND SIGNIFICANT ACCOUNTING POLICIES (CONTINUED):
J. Interfund Activity:
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).
Noncurrent portions of long -term interfund loan receivables are reported as advances and such
amounts are offset equally by a fund balance reserve account which indicates that they do not
constitute expendable available financial resources and therefore are not available for
appropriation.
K. Risk Management:
The City's workers' compensation losses are covered by a policy with the California State
Compensation Board. The City's liability losses are covered under their participation in the
California Joint Powers Insurance Authority (JPIA).
L. Capital Assets:
Capital assets, which include land, structures, equipment, and infrastructure assets, are reported
in the government -wide financial statements. Capital assets are recorded at cost where
historical records are available and at an estimated historical cost where no historical records
exist. Assets purchased in excess of $5,000 are capitalized if they have an expected useful life
of 2 years or more. Infrastructure is capitalized if cost is in excess of $50,000 and it has an
expected useful life of 2 years or more. Capital assets acquired through lease obligations are
valued at the present value of future lease payments at the date acquired. Donated capital
assets are valued at their estimated fair market value at the date of donation. The cost of
normal maintenance and repairs that do not add to the value of the asset's lives are not
capitalized.
Capital assets used in operations are depreciated over their estimated useful lives using the
straight -line method in the government -wide financial statements. Depreciation is charged as
an expense against operations and accumulated depreciation is reported on the Statement of Net
Assets.
See independent auditors' report.
CITY OF LAKE ELSINORE, CALIFORNIA
NOTES TO BASIC FINANCIAL STATEMENTS
(CONTINUED)
June 30, 2011
1. REPORTING ENTITY AND SIGNIFICANT ACCOUNTING POLICIES (CONTINUED):
L. Capital Assets (Continued):
The range of lives used for depreciation purposes for each capital asset class is as follows:
Building and structures
40 years
Improvements other than buildings
25 years
Machinery and equipment
5 - 8 years
Furniture and fixtures
5 years
Automotive equipment
5 years
Infrastructure
35 -100 years
M. Property Tax Revenue:
Property tax in California is levied according to Article 13 -A of the California Constitution. The
County of Riverside, California (the County) is permitted by State law (Proposition 13) to levy
taxes at I% of full market value (at time of purchase) as determined by the County Assessor.
Property taxes are levied by the County and shared with all other political jurisdictions within
the County. These political jurisdictions and the County may levy an additional property tax
override only after two- thirds approval of the jurisdictions' voters.
The County bills and collects the property taxes and remits them to the City in installments
during the year. City property tax revenues are recognized when levied provided that the
revenue is collected during the year or within 60 days of year -end. Property taxes attach as an
enforceable lien on property as of January 1. Taxes are levied on July 1, and are payable in two
installments on November 1 and February 1. Such taxes become delinquent on December 10
and April 10, respectively.
N. Fund Balance:
In the governmental fund financial statements, governmental fund types report nonspendable
and restricted fund balance for amounts that are not available for appropriation or are legally
restricted by outside parties for use for a specific purpose. Assigned fund balance represents
tentative management plans that are subject to change.
O. Use of Estimates:
The preparation of financial statements in conformity with accounting principles generally
accepted in the United States of America requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and the reported amounts
of revenues and expenditures /expenses during the reporting period. Actual results could differ
from those estimates.
See independent auditors' report.
-39-
CITY OF LAKE ELSINORE, CALIFORNIA
NOTES TO BASIC FINANCIAL STATEMENTS
(CONTINUED)
June 30, 2011
2. CASH AND INVESTMENTS:
Cash and Investments
Cash and investments at June 30, 2011 are classified in the accompanying financial statements as
follows:
Unrestricted assets:
Cash and investments
Restricted assets:
Cash and investments with fiscal agents
Total Cash and Investments
Government-
Fiduciary
Wide
Fund
Statement of
Statement of
Net Assets
Net Assets Total
$ 65,639,588 $ 3,972,038 $ 69,611,626
76,905,395 40,021,632 116,927,027
$ 142,544,983 S 43,993,670 186,538,653
Cash and investments at June 30, 2011 consisted of the following:
Cash on hand $ 1,300
Deposits with financial institutions 7,595,159
Investments 178,942,194
Total Cash and Investments 186,538,653
Investments Authorized by the California Government Code and the City's Investment
Policy
The table below identifies the investment types that are authorized for the City by the California
Government Code (or the City's investment policy, where more restrictive). The table also
identifies certain provisions of the California Government Code (or the City's investment policy,
where more restrictive) that address interest rate risk, credit risk, and concentration of credit risk.
This table does not address investments of debt proceeds held by bond trustee that are governed by
the provisions of debt agreements of the City, rather than the general provisions of the California
Government Code or the City's investment policy.
See independent auditors' report.
-40-
CITY OF LAKE ELSINORE, CALIFORNIA
NOTES TO BASIC FINANCIAL STATEMENTS
(CONTINUED)
June 30, 2011
2. CASH AND INVESTMENTS (CONTINUED):
Investments Authorized by the California Government Code and the City's Investment
Policy (Continued)
N/A - Not Applicable
* - Excluding amounts held by bond trustee that are not subject to California Government Code
restrictions.
Investments Authorized by Debt Agreements
Investments of debt proceeds held by 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. Investments authorized for funds held by bond trustee include, United States
Treasury Obligations, United States Government Sponsored Agency Securities, Guaranteed
Investment Contracts, Commercial Paper, Local Agency Bonds, Banker's Acceptance and Money
Market Mutual Funds. There were no limitations on the maximum amount can be invested in one
issuer, maximum percentage allowed or the maximum maturity of an investment, except for the
maturity of Commercial Paper which is limited to 92 days and of Banker's Acceptances which are
limited to one year.
See independent auditors' report.
-41-
Maximum
Maximum
Maximum
Percentage
Investment
Authorized Investment Type
Maturity
of Portfolio*
in One Issuer
United States Treasury Obligations
5 years
None
None
United States Government Sponsored
Agency Securities
5 years
None
40%
State and Local Agency Obligations
5 years
None
None
Banker's Acceptances
180 days
40%
10%
Insured or Collateralized Time
Certificate of Deposits
5 years
None
None
Commercial Paper
270 days
15%
10%
Negotiable Certificates of Deposit
5 years
30%
None
Repurchase Agreements
30 days
None
None
Reverse Repurchase Agreements
92 days
10%
None
Medium -Term Corporate Notes
5 years
30%
None
Local Agency Investment Fund (LAIF)
N/A
None
$ 50,000,000
California Asset Management Program (CAMP)
N/A
None
None
Money Market Fund
5 years
20%
None
N/A - Not Applicable
* - Excluding amounts held by bond trustee that are not subject to California Government Code
restrictions.
Investments Authorized by Debt Agreements
Investments of debt proceeds held by 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. Investments authorized for funds held by bond trustee include, United States
Treasury Obligations, United States Government Sponsored Agency Securities, Guaranteed
Investment Contracts, Commercial Paper, Local Agency Bonds, Banker's Acceptance and Money
Market Mutual Funds. There were no limitations on the maximum amount can be invested in one
issuer, maximum percentage allowed or the maximum maturity of an investment, except for the
maturity of Commercial Paper which is limited to 92 days and of Banker's Acceptances which are
limited to one year.
See independent auditors' report.
-41-
CITY OF LAKE ELSINORE, CALIFORNIA
NOTES TO BASIC FINANCIAL STATEMENTS
(CONTINUED)
June 30, 2011
2. CASH AND INVESTMENTS (CONTINUED):
Disclosures Relating to Interest Rate Risk
Interest rate risk is the risk that changes in market interest rates will adversely affect the fair value
of an investment. Generally, the longer the maturity of an investment, the greater the sensitivity of
its fair value to changes in market interest rates. One of the ways that the City manages its
exposure to interest rate risk is by purchasing a combination of shorter term and longer term
investments and by timing cash flows from maturities so that a portion of the portfolio is maturing
or coming close to maturity evenly over time as necessary to provide the cash flow and liquidity
needed for operations.
Information about the sensitivity of the fair values of the City's investments (including investments
held by bond trustee) to market interest rate fluctuations is provided by the following table that
shows the distribution of the City's investments by maturity:
Remaining Maturity (in Months)
12 Months 13-24 25-60 More Than
Investment Type
or Less
Months
Months 60 Months
Total
Local Agency Investment Fund
$ 23,430,858
$ -
$ - $ -
$ 23,430,858
Local Obligation Bonds
2,325,676
2,546,742
11,291,317 39,665,823
55,829,558
Corporate Notes
1,027,935
1,085,506
- -
2,113,441
United States Government Sponsored
Agency Securities
-
-
23,197,192 -
23,197,192
United States Treasury Notes
1,760,487
13,294,976
2,744,437 -
17,799,900
United States Treasury Securities
Sate and Local Government Series -
California Asset Management
Program Pool (CAMP) 122,313
Mutual Funds 53,775,322
Disclosures Relating to Credit Risk
7,285 55,117
2,611,208 2,673,610
122,313
53,775,322
82.442.591 16.934.509 37.288.063 42.277.031 $178,942,194
Generally, credit risk is the risk that an issuer of an investment will 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, or debt agreements, and
the actual rating, by Standard and Poor's as of year end for each investment type.
See independent auditors' report.
-42-
CITY OF LAKE ELSINORE, CALIFORNIA
NOTES TO BASIC FINANCIAL STATEMENTS
(CONTINUED)
June 30, 2011
2. CASH AND INVESTMENTS (CONTINUED):
Disclosures Relating to Credit Risk (Continued)
The City's investment in local obligation bonds are secured by special assessment taxes on
property owned by the Community Facilities Districts or Special Assessment Districts. Due to the
decline in property values and general economic conditions, there has been an increase in
delinquent special assessment collections, resulting in foreclosures on property secured by the
special assessments. The City may not be able to recover its investment in these local obligations
bonds if collections of special assessments decline and foreclosure proceeds are not adequate to
cover the investment balances.
California Asset
Management Program
Pool (CAMP) 122,313
Mutual Funds 53,775,322
Total $ 178.942,194
N/A - Not Applicable
N/A 122,313
AAA 53,775,322
$ 77,094,827 $ 2,113,441 S-19 ,260,416 1 20,473,510
Subsequent to June 30, 2011, Standards and Poor's reduced the rating of the United States
Government Sponsored Agency Securities from AAA to AA +.
See independent auditors' report.
-43-
Total
Minimum
Not
as of
Legal
Required to
Investment Type
June 30, 2011
Rating_
AAA AA Unrated be Rated
Local Agency
Investment Fund $
23,430,858
N/A
$ - $ - $ 23,430,858 $ -
Local Obligation Bonds
55,829,558
N/A
- - 55,829,558
Corporate Notes
2,113,441
AA
- 2,113,441 - -
United States
Government Sponsored
Agency Securities
23,197,192
AAA
23,197,192 - - -
United States
Treasury Notes
17,799,900
N/A
- - - 17,799,900
United States Treasury
Securities State and
Local Government
Series
2,673,610
N/A
- - - 2,673,610
California Asset
Management Program
Pool (CAMP) 122,313
Mutual Funds 53,775,322
Total $ 178.942,194
N/A - Not Applicable
N/A 122,313
AAA 53,775,322
$ 77,094,827 $ 2,113,441 S-19 ,260,416 1 20,473,510
Subsequent to June 30, 2011, Standards and Poor's reduced the rating of the United States
Government Sponsored Agency Securities from AAA to AA +.
See independent auditors' report.
-43-
CITY OF LAKE ELSINORE, CALIFORNIA
NOTES TO BASIC FINANCIAL STATEMENTS
(CONTINUED)
June 30, 2011
2. CASH AND INVESTMENTS (CONTINUED):
Concentration of Credit Risk
The investment policy of the City contains no limitations on the amount that can be invested in any
one issuer beyond that stipulated by the California Government Code. Investments in any one
issuer that represent 5% or more of total City's investments are as follows:
Issuer Investment Type
Community Facilities District
88 -3 West Lake Elsinore
Community Facilities District
98 -1 Bonds
Custodial Credit Risk
Local Obligation Bond
Local Obligation Bond
Reported
Amount
$ 20,090,000
17,535,000
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 its 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 (e.g., broker - dealer) to a
transaction, a government will not be able to recover the value of its investment or collateral
securities that are in the possession of another party.
The California Government Code and the City's investment policy do not contain legal or policy
requirements that would limit the exposure to custodial credit risk for deposits or investments,
other than the following provision for deposits: The California Government Code requires that a
financial institution secure deposits made by state or local governmental units by pledging
securities in an undivided collateral pool held by a depository regulated under state law (unless so
waived by the governmental unit). The market value of the pledged securities in the collateral pool
must equal at least 110% of the total amount deposited by the public agencies. California law also
allows financial institutions to secure City deposits by pledging first trust deed mortgage notes
having a value of 150% of the secured public deposits. At June 30, 2011, the City deposits (bank
balances) were fully insured by the Federal Depository Insurance Corporation.
See independent auditors' report.
..
CITY OF LAKE ELSINORE, CALIFORNIA
NOTES TO BASIC FINANCIAL STATEMENTS
(CONTINUED)
June 30, 2011
2. CASH AND INVESTMENTS (CONTINUED):
Investment 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. The fair value of the City's investment in this pool is reported in the accompanying
financial statements at amounts based upon the City's pro -rata share of the fair value provided by
LAIF for the entire LAIF portfolio (in relation to the amortized cost of that portfolio). The balance
available for withdrawal is based on the accounting records maintained by LAIF, which are
recorded on an amortized cost basis.
Investment in California Asset Management Program
The California Asset Management Program (the CAMP) is a public joint powers authority which
provides California Public Agencies with investment management services for surplus funds and
comprehensive investment management, accounting and arbitrage rebate calculation services for
proceeds of tax - exempt financings. The CAMP currently offers the Cash Reserve Portfolio, a
short-term investment portfolio, as a means for Public Agencies to invest these funds. Public
Agencies that invest in the Pool (Participants) purchase shares of beneficial interest. Participants
may also establish individual, professionally managed investment accounts (Individual Portfolios)
by separate agreement with the Investment Advisor. The City has a separate account with the
Investment Advisor to manage part of the CAMP portfolio which consists of $23,197,192 of
United States Government Sponsored Agency Securities, $17,799,900 of United States Treasury
Obligations and $2,113,441 of medium -term corporate notes.
Investments in the Pools and Individual Portfolios are made only in investments in which Public
Agencies generally are permitted by California statute. The CAMP may reject any investment and
may limit the size of a Participant's account. The Pool seeks to maintain, but does not guarantee, a
constant net asset value of $1.00 per share. A Participant may withdraw funds from its Pool
accounts at any time by check or wire transfers. Requests for wire transfers must be made by
9:00 a.m. that day. Fair value of the Pool is determined by the fair value per share of the Pool's
underlying portfolio.
See independent auditors' report.
-45-
CITY OF LAKE ELSINORE, CALIFORNIA
NOTES TO BASIC FINANCIAL STATEMENTS
(CONTINUED)
June 30, 2011
2. CASH AND INVESTMENTS (CONTINUED):
Cash and Investment by Entity:
Cash and investments held by entity at June 30, 2011 are as follows:
Deposits at carrying amount (1)
Petty cash and change drawer
Local Agency Investment Fund
Local Obligation Bonds
Corporate Notes
United States Government
Sponsored Agency Securities
United States Treasury Notes
United States Treasury Securities
State and Local Government Series
California Asset Management
Program Pool (CAMP)
Mutual Funds
Total Cash and Investments
City of
Public
Lake
Redevelopment
Financing
Recreation
Elsinore
Agency-
Authority
Authority Total
$ 2,226,606
$ 645,488
$ 4,723,065
$ - $ 7,595,159
1,300
-
-
- 1,300
12,098,782
11,007,271
324,805
- 23,430,858
-
-
55,829,558
- 55,829,558
2,113,441
-
-
- 2,113,441
15,285,678
7,911,514
-
- 23,197,192
10,567,045
7,232,855
-
- 17,799,900
2,673,610
-
-
- 2,673,610
71,645
50,668
-
- 122,313
35,365,538
10,693,692
7,714,427
1,665 53,775,322
80.403.645 S 37,541,488 68.591.855 $ 1,665 $186,538,653
(1) Net of deposits in transit and outstanding warrants.
3. NOTES RECEIVABLE:
The City has a note receivable in the amount of $9,737,000 from Pottery Court Housing
Associates, L.P. dated March 10, 2011. The purpose of the loan is to assist with the acquisition of
property and development of the Pottery Court Affordable Housing Project. The loan is to be
repaid with interest in arrears in annual installments on July 1, commencing on July 1 in the
calendar year immediately following the calendar year in which the deed of trust securing the
permanent loan is recorded in the official records of Riverside County. Absent prepayment or
acceleration, the Borrower agrees to pay the loan in annual payments equal to 67.5 percent of the
residual receipts as defined in the loan agreement. Notwithstanding any other provision, unless the
loan is paid earlier, the outstanding principal and accrued unpaid interest is payable 55 years from
the date of recording of the Release of Construction Covenants. As of June 30, 2011 the release of
construction has not been recorded. At June 30, 2011, the total outstanding balance of $9,810,028
included interest of $73,028.
See independent auditors' report.
.e
CITY OF LAKE ELSINORE, CALIFORNIA
NOTES TO BASIC FINANCIAL STATEMENTS
(CONTINUED)
June 30, 2011
3. NOTES RECEIVABLE (CONTINUED):
The City has a note receivable in the amount of $1,000,000 from Pottery Court Housing
Associates, L.P. dated December 9, 2009. The purpose of the loan is to assist with the development
of the Pottery Court Affordable Housing Project. This loan was funded with HOPE VI grant funds
from the United States Department of Housing and Urban Development. The loan is to be repaid
with interest in arrears in annual installments on July 1, commencing on July 1 in the calendar year
immediately following the calendar year in which the deed of trust securing the permanent loan is
recorded in the official records of Riverside County. Absent prepayment or acceleration, the
Borrower agrees to pay the loan in annual payments equal to 75 percent of the residual receipts as
defined in the loan agreement. Notwithstanding any other provision, unless the loan is paid earlier,
the outstanding principal and accrued unpaid interest is payable 55 years from the date of recording
of the deed of trust. As of June 30, 2011 the deed of trust has not been recorded. At June 30, 2011,
the total outstanding balance of $1,030,000 included accrued interest of $30,000.
The City has a note receivable in the amount of $1,100,000 from LMV II Affordable, LP dated
October 12, 2010. The purpose of the loan is to assist with the rehabilitation of 64 units of
affordable housing for families the Lakeview II Affordable Housing Project. The loan is to be
repaid with interest in arrears in annual installments on July 1, commencing on July 1 in the
calendar year immediately following the calendar year in which the deed of trust securing the
second permanent loan is recorded in the official records of Riverside County. Absent prepayment
or acceleration, the Borrower agrees to pay the loan in annual payments equal to 30 percent of the
residual receipts as defined in the loan agreement. Notwithstanding any other provision, unless the
loan is paid earlier, the outstanding principal and accrued unpaid interest is payable 55 years from
the date of recording of the release of construction covenants evidencing completion of the
rehabilitation. As of June 30, 2011 the deed of trust has not been recorded. At June 30, 2011, the
total outstanding balance of $1,107,333 included accrued interest of $7,333.
See independent auditors' report.
-47-
CITY OF LAKE ELSINORE, CALIFORNIA
NOTES TO BASIC FINANCIAL STATEMENTS
(CONTINUED)
June 30, 2011
4. CAPITAL ASSETS:
A summary of changes in the Governmental Activities capital assets at June 30, 2011 is as follows:
Capital assets, not depreciated:
Land
Construction in progress
Total capital assets,
not depreciated
Capital assets, depreciated:
Building and structures
Improvements other than buildings
Machinery and equipment
Furniture and fixtures
Automotive equipment
Infrastructure
Total capital assets,
depreciated
Less accumulated depreciation for:
Building and structures
Improvements other than buildings
Machinery and equipment
Furniture and fixtures
Automotive equipment
Infrastructure
Total accumulated depreciation
Total capital assets,
depreciated, net
Total Governmental Activities
capital assets, net
Balance at Balance at
June 30, 2010 Additions Deletions June 30, 2011
$ 5,352,814 $ - $ - $ 5,352,814
14,311,848 2,499,718 (14,249,833) 2,561,733
19,664,662 2,499,718 (14,249,833) 7,914,547
23,113,642
7,492,296
- 30,605,938
8,190,430
119,821
- 8,310,251
3,341,502
99,566
(50,129) 3,390,939
619,814
55,818
(49,734) 625,898
2,002,003
7,462
- 2,009,465
174,866,595
7,395,387
- 182,261,982
212,133,986 15,170,350 (99,863) 227,204,473
(8,325,247)
(512,135)
- (8,837,382)
(4,358,001)
(249,222)
- (4,607,223)
(2,604,313)
(125,418)
49,211 (2,680,520)
(531,364)
(25,076)
46,125 (510,315)
(1,429,529)
(154,147)
- (1,583,676)
(57,841,846) (4,265,183)
- (62,107,029)
(75,090,300) (5,331,181) 95,336 (80,326,145
137,043,686 9,839,169 (4,527) 146,878,328
156.708.348 12.338.887 S (14.254.360) 154.792.875
Depreciation expense was charged to functions /programs in the Statement of Activities as follows:
Governmental Activities:
General government $ 2,416,915
Public services 1,924,670
Community services 989,596
Total depreciation expense S 5,331,181
See independent auditors' report.
.•
CITY OF LAKE ELSINORE, CALIFORNIA
NOTES TO BASIC FINANCIAL STATEMENTS
(CONTINUED)
June 30, 2011
5. LAND HELD FOR RESALE:
The Agency has acquired land as part of its primary purpose to develop unimproved properties.
The land is being carried in the Redevelopment Agency Special Revenue Fund and Other
Governmental Funds (the Redevelopment Agency Capital Projects Fund) at the lower of cost or
estimated net realizable value. At June 30, 2011, the balance of land held for resale totaled
$6,136,849 with this amount offset by a nonspendable fund balance in the Governmental Fund
Balance Sheet.
6. LOANS RECEIVABLE:
The Authority has entered into loan agreements with the Agency whereby the Authority loaned the
proceeds of the 2010 Series A, B and C Tax Allocation Revenue Bonds and the 2011 Series A Tax
Allocation Bonds issued by the Authority to the Agency to retire debt and provide funds for certain
public improvements in Agency project areas.
The following table represents the balance of net proceeds loaned to the Agency at June 30, 2011:
Tax Allocation
Revenue Bonds
2010 Series A Issue
2010 Series B Issue
2010 Series C Issue
2011 Series A Issue
Total
Loans
Receivable
Balance
$ 14,755,000
10,340,000
29,435,000
5,550,000
E, �1 1:1 111
On June 29, 2011, the Governor of the State of California signed Assembly Bills lx 26 and 27 as
part of the State's budget package. Assembly Bill lx 26 requires each California redevelopment
agency to suspend nearly all activities except to implement existing contracts, meet
already - incurred obligations, preserve its assets and prepare for the impending dissolution of the
agency. Assembly Bill lx 27 provides a means for redevelopment agencies to continue to exist
and operate by means of a Voluntary Alternative Redevelopment Program.
See independent auditors' report.
BELIE
CITY OF LAKE ELSINORE, CALIFORNIA
NOTES TO BASIC FINANCIAL STATEMENTS
(CONTINUED)
June 30, 2011
6. LOANS RECEIVABLE (CONTINUED):
The League of California Cities and the California Redevelopment Association (CRA) filed a
lawsuit on July 18, 2011 on behalf of cities, counties and redevelopment agencies petitioning the
California Supreme Court to overturn Assembly Bills lx 26 and 27 on the grounds that these bills
violate the California Constitution.
On December 29, 2011, the California Supreme Court rendered an opinion upholding Assembly
Bill lx 26 and invalidating Assembly Bill lx 27. AB lx 26 requires that the Agency continues to
meet already incurred obligations. The Financing Authority expects repayment of the loans.
These loans are recorded as a receivable offset by a nonspendable fund balance in the Authority's
Debt Service Fund on the Governmental Fund Balance Sheet.
Interfund balances must generally be eliminated in the government -wide statements. Thus this
loan receivable does not appear on the Statement of Net Assets (see Note 113).
The principal and interest are payable in installment payments payable not less than three business
days prior to the due date on the bonds (see Note 7).
7. LONG -TERM LIABILITIES:
Local Agency
Revenue Bonds:
1996 Series E
1999 Series G
2003 Series H
2008 Series A
2008 Series B
2010 Series A
2011 Series A
Tax Allocation
Revenue Bonds:
2010 Series A
2010 Series B
2010 Series C
2011 Series A
Date of
Years of
Rate of
Amount
Issue
Maturity
Interest
Authorized
3/96
1997 -2026
5.25% - 7.50%
$ 1,750,000
2/99
2000 -2015
5.00% - 5.80%
4,035,000
2/03
2003 -2033
2.75% - 6.375%
31,570,000
1/08
2008 -2020
3.5%-4.30%
22,295,000
3/08
2008 -2038
4.5% - 6.875%
3,265,000
11 /10
2013 -2040
3.25% - 6.25%
7,430,000
6/11
2012 -2038
3.00% - 6.125%
5,365,000
2/10
2010 -2033
2.00% - 5.25%
15,435,000
5110
2010 -2025
2.00% - 4.75%
10,855,000
10 /10
2011 -2030
2.00% - 5.00%
29,435,000
1/11
2012 -2021
4.00% - 6.00%
5,550,000
See independent auditors' report.
-50-
CITY OF LAKE ELSINORE, CALIFORNIA
NOTES TO BASIC FINANCIAL STATEMENTS
(CONTINUED)
June 30, 2011
7. LONG -TERM LIABILITIES (CONTINUED):
Date of
Years of
Rate of
Amount
Issue
Maturity
Interest
Authorized
Subordinate Tax
Allocation Revenue
Bonds:
2011 Series Project Area II
4/11
2011 -2038
various
$ 3,260,000
2011 Series Project Area III
4/11
2011 -2038
various
1,350,000
Revenue Refunding
Bonds:
2000 Series A
7/00
2005 -2032
Variable
15,660,000
Developer Agreements:
Wal -Mart Stores, Inc.
3/93
1995 -2014
7.00%
2,200,000
Oak Grove Equities
3/93
1995 -2014
7.00%
1,800,000
Outlet Center
12/89
1996 -2015
N/A
2,140,000
Loans Payable:
EVMWD Amber Ridge
2/95
1999 -2014
2.70% - 6.00%
867,574
See independent auditors' report.
-51-
CITY OF LAKE ELSINORE, CALIFORNIA
NOTES TO BASIC FINANCIAL STATEMENTS
(CONTINUED)
June 30, 2011
7. LONG -TERM LIABILITIES (CONTINUED):
See independent auditors' report.
-52-
Outstanding
49,868,387
(31,609,091)
Outstanding
Due
Revenue Refunding Bonds:
June 30,
June 30,
Within
2000 Series A
2010
Additions
Retirements
2011
One Year
Local Agency Revenue Bonds:
1996 Series E $
1,390,000
$ -
$ (45,000) $
1,345,000
$ 45,000
1999 Series G
1,680,000
-
(240,000)
1,440,000
255,000
2003 Series H
28,050,000
-
(760,000)
27,290,000
850,000
2008 Series A
19,340,000
-
(1,255,000)
18,085,000
1,340,000
2008 Series B
3,265,000
-
-
3,265,000
-
2010 Series A
-
7,430,000
-
7,430,000
-
2011 Series A
-
5,365,000
-
5,365,000
-
Tax Allocation Revenue Bonds:
1999 Series A
28,255,000
-
(28,255,000)
-
-
2010 Series A
15,435,000
-
(680,000)
14,755,000
305,000
2010 Series B
10,855,000
-
(515,000)
10,340,000
545,000
2010 Series C
-
29,435,000
-
29,435,000
650,000
2011 Series A
-
5,550,000
-
5,550,000
-
Subordinate Tax Allocation Bonds:
2011 Series Project Area II
-
3,260,000
-
3,260,000
-
2011 Series Project Area III
-
1,350,000
-
1,350,000
-
108,270,000
52,390,000
(31,750,000)
128,910,000
3,990,000
Add (less) deferred amounts:
Bond premium
219,221
-
(21,922)
197,299
-
Onrefunding
(1,118,769)
(1,900,311)
132,441
(2,886,639)
-
Discount on bonds
(164,120)
(621,302)
30,390
(755,032)
See independent auditors' report.
-52-
107,206,332
49,868,387
(31,609,091)
125,465,628
3,990,000
Revenue Refunding Bonds:
2000 Series A
13,740,000
-
(375,000)
13,365,000
390,000
Developer Agreements:
Wal -Mart Stores, Inc.
445,094
-
(181,732)
263,362
181,732
Oak Grove Equities
2,294,892
98,339
-
2,393,231
-
Outlet Center
523,588
-
(109,416)
414,172
109,416
Loan Payable:
EVMWD Amber Ridge
256,720
-
(52,674)
204,046
53,436
Insurance premium deposit
payable
518,521
-
(518,521)
-
-
Other post - employment
benefit obligation (Note 17)
2,086,786
1,170,664
(379,875)
2,877,575
379,875
Compensated absences
637,866
-
(28,972)
608,894
60,889
127,709,799
_$__37 390
(33255.281) $
145,591,908
� 5,165,348
See independent auditors' report.
-52-
7
CITY OF LAKE ELSINORE, CALIFORNIA
NOTES TO BASIC FINANCIAL STATEMENTS
(CONTINUED)
June 30, 2011
LONG -TERM LIABILITIES (CONTINUED):
A. Local Agency Revenue Bonds:
In February 1990, the Public Financing Authority was authorized to issue $500,000,000 in
revenue bonds for the purpose of enabling the Public Financing Authority to acquire certain
qualified obligations (the Local Obligations) of the City or the Agency for whose benefit the
program has been designed, or of any other local agencies in the State of California, including
Community Facilities District and Special Assessment District (the Local Agencies). The
Bonds were issued to provide funds to finance the acquisition or construction of land,
buildings, equipment and other capital improvements. The Bonds will constitute special
obligations of the Public Financing Authority and will be issued in Series from time to time
pursuant to Supplemental Indentures. These bonds will be payable solely from the repayment
by Local Agencies of their obligations and any available surplus revenues.
1996 Series E
In March 1996, $1,750,000 principal amount of 1996 Local Agency Revenue Bonds, Series E,
was issued in accordance with the indenture described above. The bonds are due in annual
installments of $15,000 to $135,000 from October 1, 1997 through October 1, 2026; interest at
5.25% to 7.50 %. The bonds maturing on or before October 1, 2005, are not subject to optional
redemption prior to maturity. The bonds maturing on or after October 1, 2006 are subject to
redemption under certain circumstances, at the option of the Authority, from funds deposited in
the Series E redemption account on or after October 1, 2005, at a specified redemption price
together with accrued interest. The Series E Bonds are also subject to special mandatory
redemption on various specified dates at specified redemption prices under certain
circumstances, as provided in the Bond Indenture Agreement. At June 30, 2011, the Authority
has a cash reserve balance for debt service of $149,909, which is sufficient to cover the Bond
Indenture Reserve Requirement of $149,909.
Future debt requirements for the 1996 Series E Local Agency Revenue Bonds are as follows:
Year Ending
June 30,
2012
2013
2014
2015
2016
2017-2021
2022-2026
2027
Totals
See independent auditors' report.
Principal
$ 45,000
50,000
55,000
60,000
60,000
385,000
555,000
135,000
1,345,000
-53-
Interest
$ 99,075
95,625
91,688
87,375
82,875
335,813
160,313
5,063
957,827
Total
$ 144,075
145,625
146,688
147,375
142,875
720,813
715,313
140,063
2,302.827
CITY OF LAKE ELSINORE, CALIFORNIA
NOTES TO BASIC FINANCIAL STATEMENTS
(CONTINUED)
June 30, 2011
7. LONG -TERM LIABILITIES (CONTINUED):
A. Local Agency Revenue Bonds (Continued):
1999 Series G
In February 1999, $4,035,000 principal amount of 1999 Local Agency Revenue Bonds,
Series G, was issued in accordance with the indenture described above. The bonds are due in
annual installments of $165,000 to $370,000 from September 2, 2000 through
September 2, 2015; interest at 5.00% to 5.80 %. The bonds are subject to call and redemption
prior to their stated maturity commencing September 2, 2008 at specified redemption prices.
At June 30, 2011, the Agency has a cash reserve balance for debt service of $144,034, which is
sufficient to cover the Bond Indenture Reserve Requirement of $144,000.
Future debt requirements for the 1999 Series G Local Agency Revenue Bonds are as follows:
Year Ending
June 30,
2012
2013
2014
2015
2016
Totals
See independent auditors' report.
Princi
$ 255,000
275,000
285,000
305,000
320,000
Interest
$ 76,125
60,755
44,515
27,405
9,280
Total
$ 331,125
335,755
329,515
332,405
329,280
1,440,000 218.080 1,658.080
-54-
CITY OF LAKE ELSINORE, CALIFORNIA
NOTES TO BASIC FINANCIAL STATEMENTS
(CONTINUED)
June 30, 2011
7. LONG -TERM LIABILITIES (CONTINUED):
A. Local Agency Revenue Bonds (Continued):
2003 Series H
In February 2003, $31,570,000 principal amount of 2003 Local Agency Revenue Bonds,
Series H, was issued in accordance with the indenture described above. The bonds are due in
annual installments of $375,000 to $1,850,000 from October 1, 2003 through October 1, 2033;
interest at 2.75% to 6.375 %. The bonds are subject to mandatory redemption, without premium,
prior to their maturity dates commencing October 1, 2014 in the case of bonds maturing
October 1, 2015, October 1, 2016 in the case of bonds maturing October 1, 2020,
October 1, 2021 in the case of bonds maturing October 1, 2026, and October 1, 2027 in the case
of bonds maturing October 1, 2033, from Sinking Account payments under the indentures. The
bonds are subject to optional redemption prior to maturity in a manner determined by the
Authority on October 1, 2013, and on any date thereafter at a redemption price equal to the
principal amount thereof, plus accrued interest to the date of redemption, plus a specified
premium. At June 30, 2011, the Authority has a cash reserve balance for debt service of
$2,676,053, which is sufficient to cover the Bond Indenture Reserve Requirement of
$2,657,752.
Future debt requirements for the 2003 Series H Local Agency Revenue Bonds are as follows:
Year Ending
June 30, Principal Interest Total
2012 $
850,000 $
1,628,856 $
2,478,856
2013
940,000
1,583,519
2,523,519
2014
1,055,000
1,531,737
2,586,737
2015
1,160,000
1,472,144
2,632,144
2016
1,280,000
1,405,044
2,685,044
2017-2021
7,250,000
5,849,919
13,099,919
2022-2026
3,640,000
4,155,469
7,795,469
2027-2031
6,010,000
2,654,250
8,664,250
2032-2034
5,105,000
506,654
5,611,654
Totals
27,290.000
20.787.592
48.077.592
See independent auditors' report.
-55-
CITY OF LAKE ELSINORE, CALIFORNIA
NOTES TO BASIC FINANCIAL STATEMENTS
(CONTINUED)
June 30, 2011
7. LONG -TERM LIABILITIES (CONTINUED):
A. Local Agency Revenue Bonds (Continued):
2008 Series A
In January 2008, $22,295,000 principal amount of 2008 Local Agency Revenue Bonds,
Series A, was issued in accordance with the indenture described above. The bonds were issued
to refund the 1997 Local Agency Revenue Bonds. The bonds are due in annual installments of
$940,000 to $2,520,000 from September 1, 2008 through September 1, 2020; interest at 3.5%
to 4.3 %. The bonds are subject to call and redemption prior to their stated maturity
commencing September 1, 2008 at specified redemption prices. At June 30, 2011, the Authority
has a cash reserve balance for debt service of $1,115,006, which is sufficient to cover the Bond
Indenture Reserve Requirement of $904,250.
Future debt requirements for the 2008 Series A Local Agency Revenue Bonds are as follows:
Year Ending
June 30,
2012
2013
2014
2015
2016
2017-2021
Totals
See independent auditors' report.
Principal Interest Total
$ 1,340,000
1,425,000
1,515,000
1,620,000
1,720,000
10,465,000
$ 692,335
643,948
588,710
526,010
459,210
1,119,425
$ 2,032,335
2,068,948
2,103,710
2,146,010
2,179,210
11,584,425
18,085,000 4,029.638 22.114,638
-56-
CITY OF LAKE ELSINORE, CALIFORNIA
NOTES TO BASIC FINANCIAL STATEMENTS
(CONTINUED)
June 30, 2011
7. LONG -TERM LIABILITIES (CONTINUED):
A. Local Agency Revenue Bonds (Continued):
2008 Series B
In March 2008, $3,265,000 principal amount of 2008 Local Agency Revenue Bonds, Series B,
was issued in accordance with the indenture described above. The bonds are due in annual
installments of $5,000 to $285,000 from September 1, 2012 through September 1, 2038.
Interest payments ranging from 4.5% to 6.875% are due from September 1, 2008 through
September 1, 2038. The bonds are subject to call and redemption prior to their stated maturity
commencing September 1, 2008 at specified redemption prices. At June 30, 2011, the Authority
has a cash reserve balance for debt service of $308,847, which is sufficient to cover the Bond
Indenture Reserve Requirement of $308,844.
Future debt requirements for the 2008 Series B Local Agency Revenue Bonds are as follows:
Year Ending
June 30, Principal Interest Total
2012 $
- $
220,487 $
220,487
2013
5,000
220,374
225,374
2014
10,000
220,024
230,024
2015
15,000
219,430
234,430
2016
20,000
218,573
238,573
2017-2021
210,000
1,065,896
1,275,896
2022-2026
430,000
966,625
1,396,625
2027-2031
740,000
765,531
1,505,531
2032-2036
1,030,000
463,375
1,493,375
2037-2039
805,000
85,421
890,421
Totals
3,265,000
4,445,736
7,710.736
See independent auditors' report.
-57-
CITY OF LAKE ELSINORE, CALIFORNIA
NOTES TO BASIC FINANCIAL STATEMENTS
(CONTINUED)
June 30, 2011
7. LONG -TERM LIABILITIES (CONTINUED):
A. Local Agency Revenue Bonds (Continued):
2010 Series A
In November 2010, $7,430,000 principal amount of 2010 Local Agency Revenue Bonds,
Series A, was issued in accordance with the indenture described above. The bonds are due in
annual installments of $10,000 to $735,000 from September 1, 2013 through
September 1, 2040; interest at 3.25% to 6.25 %. The bonds are subject to call and redemption
prior to their stated maturity commencing September 1, 2013 at specified redemption prices. At
June 30, 2011, the Authority has a cash reserve balance for debt service of $743,265, which is
sufficient to cover the Bond Indenture Reserve Requirement of $743,000.
Future debt requirements for the 2010 Series A Local Agency Revenue Bonds are as follows:
Year Ending
June 30,
2012
2013
2014
2015
2016
2017-2021
2022-2026
2027-2031
2032-2036
2037-2041
Totals
See independent auditors' report.
E9
Princi
10,000
20,000
25,000
315,000
690,000
1,230,000
2,015,000
3,125,000
7.430.000
Interest
$
447,138
447,138
446,975
446,463
445,644
2,196,894
2,072,078
1,804,928
1,314,844
521,094
10.143.196
Total
$ 447,138
447,138
456,975
466,463
470,644
2,511,894
2,762,078
3,034,928
3,329,844
3,646,094
17.573.196
CITY OF LAKE ELSINORE, CALIFORNIA
NOTES TO BASIC FINANCIAL STATEMENTS
(CONTINUED)
June 30, 2011
7. LONG -TERM LIABILITIES (CONTINUED):
A. Local Agency Revenue Bonds (Continued):
2011 Series A
In June 2011, $5,365,000 principal amount of 2011 Local Agency Revenue Bonds, Series A,
was issued in accordance with the indenture described above. The bonds are due in annual
installments of $135,000 to $370,000 from September 1, 2012 through September 1, 2038;
interest at 3.0% to 6.125 %. The bonds are subject to call and redemption on and after their
stated maturity commencing September 1, 2016 at redemption price equal to principal amount.
At June 30, 2011, the Authority has a cash reserve balance for debt service of $427,175, which
is sufficient to cover the Bond Indenture Reserve Requirement of $427,175.
Future debt requirements for the 2011 Series A Local Agency Revenue Bonds are as follows:
Year Ending
June 30,
2012
2013
2014
2015
2016
2017-2021
2022-2026
2027-2031
2032-2036
2037-2039
Totals
See independent auditors' report.
E9
Princi
135,000
140,000
145,000
145,000
830,000
1,045,000
1,385,000
1,230,000
310,000
5.365.000
-59-
Interest
$ 192,767
285,925
281,800
277,525
273,175
1,273,606
1,033,856
681,806
236,244
29,400
4.566.104
Total
$ 192,767
420,925
421,800
422,525
418,175
2,103,606
2,078,856
2,066,806
1,466,244
339,400
9.931.104
CITY OF LAKE ELSINORE, CALIFORNIA
NOTES TO BASIC FINANCIAL STATEMENTS
(CONTINUED)
June 30, 2011
7. LONG -TERM LIABILITIES (CONTINUED):
B. Tax Allocation Revenue Bonds:
1999 Series A
In February 1999, $33,450,000 principal amount of Tax Allocation Revenue Bonds, Series A,
was issued in accordance with the indenture described above. The term bonds are due in
annual installments of $410,000 to $2,175,000 from September 1, 2000 through
September 1, 2030; interest at 5.00% to 5.50 %. The bonds are subject to call and redemption
prior to their stated maturity commencing September 1, 2015, at specified redemption prices.
The 1999 Series A Tax Allocation Revenue Bonds were refunded by the 2010 Series C Tax
Allocation Revenue Bonds in October 2010 and retired in December 2010.
2010 Series A
In February 2010, $15,435,000 principal amount of Tax Allocation Revenue Bonds, Series A,
was issued in accordance with the indenture described above. The term bonds are due in
annual installments of $305,000 to $2,910,000 from September 1, 2010 through
September 1, 2033; interest at 2.00% to 5.25 %. The bonds are subject to call and redemption
prior to their stated maturity commencing September 1, 2024, at specified redemption prices.
At June 30, 2011, the Agency has a cash reserve balance for debt service of $1,472,778, which
is sufficient to cover the Bond Indenture Reserve Requirement of $1,471,914.
Future debt requirements for the 2010 Series A Tax Allocation Revenue Bonds are as follows:
Year Ending
June 30,
2012
2013
2014
2015
2016
2017-2021
2022-2026
2027-2031
2032-2033
Totals
See independent auditors' report.
Principal
$ 305,000
310,000
315,000
325,000
330,000
1,835,000
2,225,000
2,830,000
6,280,000
Interest
$ 686,781
679,081
669,707
660,106
651,106
3,087,306
2,676,153
2,034,638
431,024
Total
$ 991,781
989,081
984,707
985,106
981,106
4,922,306
4,901,153
4,864,638
6,711,024
14.755.000 $ 11 575,902 S 26.330.902
•1
CITY OF LAKE ELSINORE, CALIFORNIA
NOTES TO BASIC FINANCIAL STATEMENTS
(CONTINUED)
June 30, 2011
7. LONG -TERM LIABILITIES (CONTINUED):
B. Tax Allocation Revenue Bonds (Continued):
2010 Series B
In May 2010, $10,855,000 principal amount of Tax Allocation Revenue Bonds, Series B, was
issued in accordance with the indenture described above. The term bonds are due in annual
installments of $515,000 to $895,000 from September 1, 2010 through September 1, 2025;
interest at 2.00% to 4.75 %. The bonds are subject to call and redemption prior to their stated
maturity commencing September 1, 2019, at specified redemption prices. At June 30, 2011, the
Agency has a cash reserve balance for debt service of $939,806, which is sufficient to cover the
Bond Indenture Reserve Requirement of $939,538.
Future debt requirements for the 2010 Series B Tax Allocation Revenue Bonds are as follows:
Year Ending
June 30,
2012
2013
2014
2015
2016
2017-2021
2022-2026
Totals
See independent auditors' report.
Princi
$ 545,000
560,000
575,000
590,000
610,000
3,355,000
4,105,000
Interest
$ 384,900
371,050
354,025
336,550
318,550
1,271,163
490,350
Total
$ 929,900
931,050
929,025
926,550
928,550
4,626,163
4,595,350
$ 10,340,000 $ 3,526.588 S 13,866.588
-61-
CITY OF LAKE ELSINORE, CALIFORNIA
NOTES TO BASIC FINANCIAL STATEMENTS
(CONTINUED)
June 30, 2011
7. LONG -TERM LIABILITIES (CONTINUED):
B. Tax Allocation Revenue Bonds (Continued):
2010 Series C
In October 2010, $29,435,000 principal amount of Tax Allocation Revenue Bonds, Series C,
was issued in accordance with the indenture described above. The term bonds are due in
annual installments of $650,000 to $2,115,000 from September 1, 2011 through
September 1, 2030; interest at 2.00% to 5.00 %. The bonds are subject to call and redemption
on or after their stated maturity commencing September 1, 2020, at redemption price equal to
principal amount. At June 30, 2011, the Agency has a cash reserve balance for debt service of
$2,223,028, which is sufficient to cover the Bond Indenture Reserve Requirement of
$2,222,395.
Future debt requirements for the 2010 Series C Tax Allocation Revenue Bonds are as follows:
Year Ending
June 30,
2012
2013
2014
2015
2016
2017-2021
2022-2026
2027-2031
Totals
See independent auditors' report.
Principal
$ 650,000
1,140,000
1,165,000
1,190,000
1,215,000
6,565,000
7,825,000
9,685,000
Interest
$ 1,083,714
1,065,814
1,042,764
1,019,214
994,404
4,438,653
3,104,009
1,189,834
Total
$ 1,733,714
2,205,814
2,207,764
2,209,214
2,209,404
11,003,653
10,929,009
10,874,834
29,435,000 13,938,406 43,373,406
-62-
CITY OF LAKE ELSINORE, CALIFORNIA
NOTES TO BASIC FINANCIAL STATEMENTS
(CONTINUED)
June 30, 2011
7. LONG -TERM LIABILITIES (CONTINUED):
B. Tax Allocation Revenue Bonds (Continued):
2011 Series A
In January 2011, $5,550,000 principal amount of Tax Allocation Revenue Bonds, Series A, was
issued in accordance with the indenture described above. The term bonds are due in annual
installments of $445,000 to $700,000 from September 1, 2012 through September 1, 2021;
interest at 4.00% to 6.00 %. The bonds are subject to call and redemption on and after their
stated maturity commencing September 1, 2016, at redemption price equal to principal amount.
At June 30, 2011, the Agency has a cash reserve balance for debt service of $539,738, which is
sufficient to cover the Bond Indenture Reserve Requirement of $539,623.
Future debt requirements for the 2011 Series A Tax Allocation Revenue Bonds are as follows:
Year Ending
June 30,
2012
2013
2014
2015
2016
2017-2021
2022
Totals
See independent auditors' report.
E9
Princi
445,000
465,000
485,000
505,000
2,950,000
700,000
Interest
$ 323,422
286,613
267,250
246,481
223,550
665,188
21,000
Total
$ 323,422
731,613
732,250
731,481
728,550
3,615,188
721,000
$ 5,550,000 $ 2,033.504 $ 7,583,504
-63-
CITY OF LAKE ELSINORE, CALIFORNIA
NOTES TO BASIC FINANCIAL STATEMENTS
(CONTINUED)
June 30, 2011
7. LONG -TERM LIABILITIES (CONTINUED):
C. Subordinate Tax Allocation Revenue Bonds:
2011 Series Project Area II
In April 2011, $3,260,000 principal amount of Subordinate Tax Allocation Revenue Bonds,
Series 2011 Project Area II was issued to reimburse infrastructure costs to McMillin Summerly
LLP under an Amended and Restated Disposition and Development Agreement dated
March 8, 2011. The bonds were issued as a private placement offering to the developer. In
connection with the bonds, the Agency has entered into a loan agreement with the Lake
Elsinore Public Financing Authority to provide for funds for the Agency to purchase the bonds
held by the developer. As of June 30, 2011, the loan was not funded. The term bonds are due
in annual installments of $70,000 to $285,000 from September 1, 2012 through
September 1, 2033; interest at 3.60% to 7.65 %. The bonds are subject to call and redemption
prior to their stated maturity at specified redemption prices.
Future debt requirements for the Subordinate Tax Allocation Revenue Bonds Series 2011
Project Area II are as follows:
Year Ending
June 30,
2012
2013
2014
2015
2016
2017-2021
2022-2026
2027-2031
2032-2034
Totals
See independent auditors' report.
Principal Interest Total
70,000
75,000
80,000
80,000
485,000
685,000
990,000
795,000
3.260.000
W
$ 208,515
234,055
231,107
227,380
223,180
1,029,748
821,029
504,518
94,286
3.573.818
$ 208,515
304,055
306,107
307,380
303,180
1,514,748
1,506,029
1,494,518
889,286
6.833.818
CITY OF LAKE ELSINORE, CALIFORNIA
NOTES TO BASIC FINANCIAL STATEMENTS
(CONTINUED)
June 30, 2011
7. LONG -TERM LIABILITIES (CONTINUED):
C. Subordinate Tax Allocation Revenue Bonds (Continued):
2011 Series Project Area III
In April 2011, $1,350,000 principal amount of Subordinate Tax Allocation Revenue Bonds,
Series 2011 Project Area III was issued to reimburse infrastructure costs to McMillin Summerly
LLP under an Amended and Restated Disposition and Development Agreement dated
March 8, 2011. The bonds were issued as a private placement offering to the developer. In
connection with the bonds, the Agency has entered into a loan agreement with the Lake
Elsinore Public Financing Authority to provide for funds for the Agency to purchase the bonds
held by the developer. As of June 30, 2011, the loan was not funded. The term bonds are due
in annual installments of $20,000 to $110,000 from September 1, 2012 through
September 1, 2038; interest at 3.60% to 7.75 %. The bonds are subject to call and redemption
prior to their stated maturity at specified redemption prices.
Future debt requirements for the Subordinate Tax Allocation Revenue Bonds Series 2011
Project Area III are as follows:
Year Ending
June 30, Principal Interest Total
2012 $
- $
88,573 $
88,573
2013
20,000
99,597
119,597
2014
20,000
98,788
118,788
2015
20,000
97,827
117,827
2016
20,000
96,778
116,778
2017-2021
135,000
460,075
595,075
2022-2026
180,000
403,928
583,928
2027-2031
265,000
319,684
584,684
2032-2036
380,000
198,075
578,075
2037-2039
310,000
37,200
347,200
Totals
1,350,000
1,900,525
3,250,525
See independent auditors' report.
-65-
CITY OF LAKE ELSINORE, CALIFORNIA
NOTES TO BASIC FINANCIAL STATEMENTS
(CONTINUED)
June 30, 2011
7. LONG -TERM LIABILITIES (CONTINUED):
D. Revenue Refunding Bonds:
2000 Series A
In July 2000, $15,660,000 principal amount of Revenue Refunding Bonds, Series A, was issued
in accordance with the indenture to advance refund 1997 Revenue Bonds, Series A, whose
proceeds were to provide funds to finance the Authority's lease of certain City recreation
facilities from the City for lease back to the City. The term bonds are due in annual
installments of $285,000 to $960,000 from February 1, 2005 through February 1, 2032; interest
is variable. The bonds are subject to call and redemption prior to their stated maturity
commencing February 1, 2002, at specified redemption prices.
Future debt requirements for the 2000 Series A Revenue Refunding Bonds are as follows:
Year Ending
June 30,
Principal
Interest *
Total
2012
$ 390,000
$ 9,355 $
399,355
2013
410,000
9,083
419,083
2014
430,000
8,795
438,795
2015
450,000
8,495
458,495
2016
470,000
8,179
478,179
2017-2021
2,680,000
35,669
2,715,669
2022-2026
3,360,000
25,378
3,385,378
2027-2031
4,215,000
12,474
4,227,474
2032
960,000
672
960,672
Totals
13.365.000
118.100
13.483.100
* Interest on the bonds is payable on the first of each month, so long as the bonds bear
interest at a variable interest rate, and after conversion to a fixed rate, interest will be
payable on February 1 and August 1 of each year. The amount of the payments are not yet
known due to the variable interest rate which is calculated weekly. For purposes of this
schedule, the interest rate at June 30, 2011 of 0.07% was used to calculate the future
interest payments.
See independent auditors' report.
MOM
CITY OF LAKE ELSINORE, CALIFORNIA
NOTES TO BASIC FINANCIAL STATEMENTS
(CONTINUED)
June 30, 2011
7. LONG -TERM LIABILITIES (CONTINUED):
E. Developer Agreements:
The Agency has entered into several developer agreements to attract new business to the City.
The following represents the Agency's significant commitments with certain developers:
Wal -Mart Stores, Inc.
On March 12, 1993, the Agency entered into a Disposition and Development Agreement with
Wal -Mart Stores, Inc. The Agency has agreed to purchase Wal -Mart property through the
payment of a $2,200,000 loan from Wal -Mart Stores, Inc. The $2,200,000 accrues interest at
7.00% per annum. Installment payments are to be made each year on January 30th for
approximately 20 years, continuing 19 years after the first installment date. Installment
payments are calculated to be (1) in the amount of 100% of the sales tax in excess of $200,000,
but not to exceed $200,000 and (2) 50% of the amount of any additional sales tax received in
excess of $400,000. Sales tax is not pledged for repayment. The obligation is a general
obligation of the Agency and tax increment is not specifically pledged. As of June 30, 2011,
the Agency owes $263,362 to Wal -Mart Stores, Inc., which has been included in the long -term
obligations.
Oak Grove Equities
On March 12, 1993, the Agency entered into an Owner Participation Agreement with Oak
Grove Equities. The Agency has agreed to reimburse the developer $1,800,000 for certain
public improvements that were installed at the Lake Elsinore City Center. The $1,800,000
accrues interest at 7.00% per annum. Installment payments are to be made each year on
January 30th for approximately 20 years, continuing 19 years after the first installment date.
Installment payments are calculated to be (1) in the amount of 100% of the sales tax in excess
of $200,000, but not to exceed $200,000 and (2) 50% of the amount of any additional sales tax
received in excess of $400,000. Sales tax is not pledged for repayment. The obligation is a
general obligation of the Agency and tax increment is not specifically pledged. As of
June 30, 2011, the Agency owes $2,393,231 to Oak Grove Equities which has been included in
the long -term obligations. Any unpaid obligation on the 20th payment date, which is
January 31, 2016, is to be forgiven and discharged.
See independent auditors' report.
-67-
CITY OF LAKE ELSINORE, CALIFORNIA
NOTES TO BASIC FINANCIAL STATEMENTS
(CONTINUED)
June 30, 2011
7. LONG -TERM LIABILITIES (CONTINUED):
E. Developer Agreements (Continued):
Outlet Center
The Agency entered into an Owner Participation Agreement with NG /Chelsea Lake Elsinore
Limited Partnership pertaining to the development of a factory retail outlet. The factory outlet
center is located in Redevelopment Project Area 1. Pursuant to the Agreement, the Agency is
required to pay the annual special assessment levied by Assessment District 86 -1. The bonds
issued by Assessment District 86 -1 mature in the year 2015 and the annual special assessment
is approximately $108,000. As of June 30, 2011, the Agency owes $414,172 which has been
included in the long -term obligations.
F. Loans Payable:
Elsinore Valley Municipal Water District ( EVMWD) - Amber Ridge
In February 1995, the City and the Agency entered into an agreement with the EVMWD
whereby the Agency would reimburse the EVMWD's annual loan payment related to project
costs of the EVMWD and a loan payable to the State Water Resources Control Board. The
Agency's annual installments of $60,740 are due July 1, 1999 to July 1, 2014; interest from
2.70% to 6.00 %.
Future debt requirements for the loans are as follows:
Year Ending
June 30,
2012
2013
2014
2015
Totals
See independent auditors' report.
Principal
$ 53,436
55,412
57,474
37,724
Interest
$ 7,304
5,328
3,266
1,113
Total
$ 60,740
60,740
60,740
38,837
S 204,046 S 17,011 $ 221,057
.:
CITY OF LAKE ELSINORE, CALIFORNIA
NOTES TO BASIC FINANCIAL STATEMENTS
(CONTINUED)
June 30, 2011
7. LONG -TERM LIABILITIES (CONTINUED):
G Other Post - Employment Benefit Obligation:
Other post- employment benefit obligation is not expected to be funded with current resources
and has been reported as a liability of the governmental activities.
H. Compensated Absences:
Compensated absences are liquidated by the General Fund and are reported as a liability of the
governmental activities.
8. LOANS PAYABLE TO PUBLIC FINANCING AUTHORITY:
Periodically the City of Lake Elsinore's Public Financing Authority (the Authority) issues Tax
Allocation Revenue Bonds for financing projects of the Agency and to provide funds for the
various debt obligations of the Agency. The Agency entered into loan agreements with the
Authority which mirrored the bonds issued by the Authority. Concurrent with the execution and
delivery of the loan agreements, the Authority issued the aggregate principal amount of the Tax
Allocation Revenue Bonds to the Agency. The loans were made as an advance for the principal
amount which was made from the proceeds of the bonds on the closing date of the bond. The
principal and interest are payable in installment payments not less than three business days prior to
the due date on the bonds.
At June 30, 2011, loan agreements between the Agency and Authority totaled $60,080,000 based
on 2010 Series A, Series B and Series C Tax Allocation Revenue Bonds and the 2011 Series A Tax
Allocation Revenue Bonds as described below. Since these loans are interfund activities, they are
excluded from the long -term liabilities schedule in Note 7 and on the Statement of Net Assets.
Note 21 has additional information on recent changes affecting California Redevelopment
Agencies.
1999 Series A
In February 1999, $33,450,000 principal amount of Tax Allocation Revenue Bonds, Series A, was
issued by the Authority. Concurrent with this issue, the principal amount was loaned to the
Agency. The proceeds of the loan were used to advance refund $34,825,000 of outstanding 1992
Tax Allocation Revenue Bonds and to provide funds for the acquisition and construction of certain
public improvements within the Rancho Laguna Redevelopment Project Areas I and II. The loan is
payable in annual principal installments varying from $410,000 to $2,175,000 through 2030 and
bear interest rates varying from 5.00% to 5.50 %. The Bonds were refunded by the 2010 Series C
Tax Allocation Bonds in October 2010.
See independent auditors' report.
eV
CITY OF LAKE ELSINORE, CALIFORNIA
NOTES TO BASIC FINANCIAL STATEMENTS
(CONTINUED)
June 30, 2011
8. LOANS PAYABLE TO PUBLIC FINANCING AUTHORITY (CONTINUED):
2010 Series A
In February 2010, $15,435,000 principal amount of Tax Allocation Revenue Bonds, Series A, was
issued by the Authority. Concurrent with this issue, the principal amount was loaned to the
Agency. The proceeds were used to advance refund $13,170,000 of outstanding 1999 Series C Tax
Allocation Revenue Bonds. The loan is payable in annual installments of $305,000 to $2,910,000
from September 1, 2010 through September 1, 2033; interest at 2.00% to 5.25 %. The loan balance
at June 30, 2011 is $15,435,000. At June 30, 2011, the Agency has a cash reserve balance for debt
service of $1,472,778 which is sufficient to cover the Bond Indenture Reserve Requirement.
2010 Series B
In May 2010, $10,855,000 principal amount of Tax Allocation Revenue Bonds, Series B, was
issued by the Authority. Concurrent with this issue, the principal amount was loaned to the
Agency. The proceeds were used to advance refund $10,065,000 of outstanding 1995 Series A Tax
Allocation Revenue Bonds. The advance refunding resulted in an economic gain of $757,319 and
a decrease in cash flows of $893,956. Proceeds from the 2010 Series B bonds were invested in an
escrow fund with a trustee which together with earnings will pay interest and principal on the
bonds until fully retired. The 1995 Series A bonds are legally defeased and are no longer a liability
of the Agency. The loan is payable in annual installments of $515,000 to $895,000 from
September 1, 2010 through September 1, 2025; interest at 2.00% to 4.75 %. The loan balance at
June 30, 2011 is $10,855,000. At June 30, 2011, the Agency has a cash reserve balance for debt
service of $939,806 which is sufficient to cover the Bond Indenture Reserve Requirement.
2010 Series C
In October 2010, $29,435,000 principal amount of Tax Allocation Revenue Bonds, Series C, was
issued by the Authority. Concurrent with this issue, the principal amount was loaned to the Agency
through the release of the net proceeds of the financing. The net proceeds were used to advance
refund $27,495,000 of outstanding 1999 Series A Tax Allocation Revenue Bonds. Tax revenues
from Project Areas 1 and 2 are pledged for the repayment of the loan. In the event that tax
revenues are not sufficient from Project Areas 1 and 2, the Agency has covenanted to make
interfund loans from Project Area 3 and the Low and Moderate Income Housing Fund to make the
loan payment. The loan is payable in annual installments of $605,000 to $2,115,000 from
September 1, 2011 through September 1, 2030; interest at 2.00% to 5.00 %. The loan balance at
June 30, 2011 is $29,435,000. At June 30, 2011, the Agency has a cash reserve balance for debt
service of $2,223,028 which is sufficient to cover the Bond Indenture Reserve Requirement.
See independent auditors' report.
-70-
CITY OF LAKE ELSINORE, CALIFORNIA
NOTES TO BASIC FINANCIAL STATEMENTS
(CONTINUED)
June 30, 2011
8. LOANS PAYABLE TO PUBLIC FINANCING AUTHORITY (CONTINUED):
2010 Series C (Continued)
The advance refunding resulted in an economic gain of $1,653,015 and a decrease in cash flows of
$2,252,722. Proceeds from the 2010 Series C bonds were invested in an escrow fund with a trustee
which together with earnings will pay interest and principal on the bonds until fully retired. The
1999 Series A bonds are legally defeased and are no longer a liability of the Agency.
2011 Series A
In January 2011, $5,550,000 principal amount of Tax Allocation Revenue Bonds, Series A, was
issued by the Authority. Concurrent with this issue, the principal amount was loaned to the Agency
through the release of the net proceeds of the financing. The net proceeds were used to provide
funding for a boat launch ramp project benefitting Project Area 1. Tax revenues from Project Area
I are pledged for repayment of the loan. In the event that tax revenues are not sufficient from
Project Area 1, the Agency has covenanted to make interfund loans from Project Areas 2 and 3 to
make the loan payment. The pledge of Project Area 1 revenues to the loan is on a subordinate basis
with respect to the 2010 Series C loan and on a parity basis with the 2010 Series A loan. The loan
is payable in annual installments of $445,000 to $700,000 from September 1, 2012 through
September 1, 2021; interest at 4.00% to 6.00 %. The loan balance at June 30, 2011 is $5,550,000.
At June 30, 2011, the Agency has a cash reserve balance for debt service of $539,738 which is
sufficient to cover the Bond Indenture Reserve Requirement.
Future debt requirements for the loans payable to the Public Financing Authority are as follows:
Year Ending
June 30,
Principal
Interest
Total
2012
$ 1,500,000 $
2,478,817 $
3,978,817
2013
2,455,000
2,402,558
4,857,558
2014
2,520,000
2,333,745
4,853,745
2015
2,590,000
2,262,351
4,852,351
2016
2,660,000
2,187,611
4,847,611
2017-2021
14,705,000
9,462,309
24,167,309
2022-2026
14,855,000
6,291,513
21,146,513
2027-2031
12,515,000
3,224,471
15,739,471
2032-2036
6,280,000
431,025
6,711,025
Totals
60,080,000 $
31,074,400
91.154.400
See independent auditors' report.
-71-
CITY OF LAKE ELSINORE, CALIFORNIA
NOTES TO BASIC FINANCIAL STATEMENTS
(CONTINUED)
June 30, 2011
9. ADVANCES PAYABLE:
The General Fund advanced the Agency $8,158,238 from 1997 through 2002 and $903,250 for the
fiscal year ended June 30, 2003. The advances are to cover certain administrative costs and a legal
settlement related to the Agency. Payments of $214,968 are to be made on an annual basis through
fiscal year 2032. Interest is accrued cumulatively on the advances at a rate of 2 %.
Future debt requirements for the advances to the Agency are as follows:
Year Ending
June 30,
2012
2013
2014
2015
2016
2017-2021
2022-2026
2027-2031
2032
Totals
Principal
$ 143,205
146,069
148,991
151,970
155,010
822,810
908,449
1,003,002
108,683
Interest
$ 71,764
68,900
65,978
62,998
59,959
252,032
166,395
71,843
2,175
Total
$ 214,969
214,969
214,969
214,968
214,969
1,074,842
1,074,844
1,074,845
110,858
3.588.189 822.044 4.410.233
Note 21 has additional information on the impact of recent changes in litigation affecting
California Redevelopment Agencies on the amounts due from the Agency.
10. SPECIAL ASSESSMENT DISTRICT BONDS:
The payment of these bonds is secured by valid assessment liens upon certain lands in each district
and are not direct liabilities of the City. Reserves have been established to meet delinquencies
should they occur. Neither the faith and credit nor the taxing power of the City is pledged to the
payment of the bonds. If delinquencies occur beyond the amounts held in those reserves, the City
has no duty to pay those delinquencies out of any other available funds. The City has used the
proceeds of the Local Agency Revenue Bonds to invest in the Special Assessment District Bonds
and acts solely as an agent for those paying assessments and the bondholders.
See independent auditors' report.
-72-
CITY OF LAKE ELSINORE, CALIFORNIA
NOTES TO BASIC FINANCIAL STATEMENTS
(CONTINUED)
June 30, 2011
10. SPECIAL ASSESSMENT DISTRICT BONDS (CONTINUED):
A summary of Special Assessment Bonds outstanding at June 30, 2011, for which the City has no
liability or commitment, follows:
Original Bonds
Issue Outstanding at
Amount June 30, 2011
Assessment District No. 86 -1 Improvement Bonds $ 4,712,332 $ 1,543,734
Assessment District No. 90 -1 A Improvement Bonds 1,780,000 945,000
Assessment District No. 93 -1 Refunding Improvement
Bonds, Series 2000 19,875,000 16,975,000
Total Assessment District Bonds 19,463,734
11. COMMUNITY FACILITIES DISTRICT BONDS:
These bonds are authorized pursuant to the Mello -Roos Community Facilities District Act of 1982
as amended, and are payable from special taxes levied on property within the Community Facility
Districts according to a methodology approved by the voters within the District and by the City
Council of the City of Lake Elsinore. Neither the faith and credit nor taxing power of the City is
pledged to the payment of the bonds. Reserves have been established from the bond proceeds to
meet delinquencies should they occur. If delinquencies occur beyond the amounts held in those
reserves, the City has no duty to pay the delinquency out of any available funds of the City. The
City has used the proceeds of the Local Agency Revenue Bonds to invest in these Community
Facilities District Bonds and acts solely as an agency for those paying taxes levied and the
bondholders. Therefore, the outstaying balances of these bonds are not reflected in these financial
statements. A summary of Mello -Roos Bonds outstanding at June 30, 2011 follows:
Community Facilities District 90 -2 Tuscany Hills
Public Improvements 2002 Series
Community Facilities District 95 -1 Lake Elsinore
City Center Public Improvements
Community Facilities District 98 -1 Summerhill
Public Improvements
Community Facilities District 2003 -2 Canyon
Hills 2004 Series A
Community Facilities District 2004 -3 Roseta
Canyon 2005 Series A
Community Facilities District 2005 -1 Serenity
2006 Series A
Community Facilities District 2005 -2 Alberhill
Ranch 2005 Series A
See independent auditors' report.
-73-
Original Bonds
Issue Outstanding at
Amount June 30, 2011
$ 14,470,000 $ 7,545,000
1,600,000 1,205,000
17,660,000 17,535,000
12,235,000 11,865,000
22,635,000 22,230,000
NEW U11112 : :1 111
24,680,000 24,480,000
CITY OF LAKE ELSINORE, CALIFORNIA
NOTES TO BASIC FINANCIAL STATEMENTS
(CONTINUED)
June 30, 2011
11. COMMUNITY FACILITIES DISTRICT BONDS (CONTINUED):
Summary of Mello -Roos Bonds outstanding at June 30, 2011 (Continued):
Community Facilities District 2005 -6 City
Center Townhomes 2006 Series A
Community Facilities District 90 -2 Tuscany Hills
Public Improvement 2007 Series A
Community Facilities District 2003 -2 Canyon Hills
2006 Series A
Community Facilities District 2004 -3 Roseta
Canyon 2006 Series A
Community Facilities District 2006 -2 Viscaya
2006 Series A
Community Facilities District 88 -3
2008 Series A
Community Facilities District 88 -3
2008 Series A
Community Facilities District 88 -3
2008 Series B
Community Facilities District 2003 -2
Canyon Hills 2010 Series A
Total Community Facilities District Bonds
12. MORTGAGE REVENUE BONDS:
Original Bonds
Issue Outstanding at
Amount June 30, 2011
$ 3,525,000 $ 3,495,000
7,340,000 7,340,000
20,570,000 20,315,000
23,460,000 23,295,000
7,290,000 7,225,000
24,670,000 20,090,000
7,175,000 6,610,000
3,265,000 3,265,000
7,430,000 7,430,000
192,805,000
The City and Agency have entered into a bond and loan program to assist low and moderate
income homebuyers of multi- family residential developments with the City limits. Although the
City has arranged the financing program, these debts are not payable from any revenues or assets
of the City. Neither the faith and credit nor the taxing power of the City, or any political
subdivision of the City, is pledged to repay the indebtedness. Accordingly, since these debts do not
constitute an obligation of the City, they are not reflected in the accompanying financial statements.
Original Bonds
Issue Outstanding at
Amount June 30, 2011
Lakeside Village Project - Due January 1, 2031 $ 5,000,000 $ 4,146,704
See independent auditors' report.
-74-
CITY OF LAKE ELSINORE, CALIFORNIA
NOTES TO BASIC FINANCIAL STATEMENTS
(CONTINUED)
June 30, 2011
13. INTERFUND RECEIVABLES/PAYABLES AND TRANSFERS:
During the course of normal operations, the City entered into numerous transactions between
funds, including expenditures and transfers of resources to provide services, construct assets and
service debt. The accompanying governmental fund financial statements generally reflect such
transactions as operating transfers. Nonrecurring or nonroutine permanent transfers of equity are
reported as residual equity transfers. Interf ind transactions and interfund receivables /payables at
year -end are not eliminated in the governmental fund financial statements.
Due To /From
Due to and from other funds at June 30, 2011 are as follows:
Receivable Fund Payable Fund Amount
General Fund Redevelopment Agency
Debt Service Fund $ 83,246
Public Financing Authority
Debt Service Fund 14,440
Other Governmental Funds 480,295
Redevelopment Agency Debt
Service Fund Other Governmental Funds 4,809,388
5.387.369
The General Fund loaned the Redevelopment Agency Debt Service Fund, the Public Financing
Authority Debt Service Fund and Other Governmental Funds $83,246, $14,440 and $480,295,
respectively and the loans were used to provide cash flows for expenditures.
The Redevelopment Agency Debt Service Fund loaned Other Governmental Funds $4,809,388 and
the loan was used to provide cash flows for expenditures.
See independent auditors' report.
-75-
CITY OF LAKE ELSINORE, CALIFORNIA
NOTES TO BASIC FINANCIAL STATEMENTS
(CONTINUED)
June 30, 2011
13. INTERFUND RECEIVABLES/PAYABLES AND TRANSFERS (CONTINUED):
Advances To/From
Advances to and from other funds at June 30, 2011 are as follows:
Receivable Fund
General Fund
Redevelopment Agency
Special Revenue Fund
Payable Fund
Redevelopment Agency
Debt Service Fund
Redevelopment Agency
Debt Service Fund
Amount
$ 3,588,189
37,954,247
41.542.436
The General Fund advanced $3,588,189 to the Redevelopment Agency Debt Service Fund to
provide funds to fund Agency projects. (See Note 9).
The advances from the Redevelopment Agency Special Revenue Fund to the Redevelopment
Agency Debt Service Fund were made from: (a) the 1995 Series A and 1999 Series C bond
proceeds deposited in the Rancho Laguna Special Revenue Fund. The 1995 Series A and 1999
Series C bonds were refunded in fiscal year 2010 with the issuance of the 2010 Series A and 2010
Series B bonds. The advances payable include an original loan amount of $18,040,438 and
accrued interest of $16,163,809, and (b) advances in the amount of $3,750,000 was a result of
suspending a portion of the 20% set aside requirement to assist in the payment of the SERAF
obligation for fiscal year 2010. This advance is to be repaid in installments by fiscal
year 2014 -2015.
Transfers In /Out
The compositions of the City's interfund transfer balances as of June 30, 2011 are as follows:
Transfers In Transfers Out Amount
General Fund Other Governmental Funds $ 51,752
Other Governmental Funds General Fund 231,000
Redevelopment Agency
Debt Service Fund 5,903,453
6.186.205
The transfers between the General Fund and the Other Governmental Funds were made to provide
cash flows for expenditures. The transfer of $5,903,453 between Other Governmental Funds and
the Redevelopment Agency Debt Service Fund was made to fund operational and capital projects
costs.
See independent auditors' report.
-76-
CITY OF LAKE ELSINORE, CALIFORNIA
NOTES TO BASIC FINANCIAL STATEMENTS
(CONTINUED)
June 30, 2011
14. GOVERNMENTAL FUND BALANCE CLASSIFICATIONS:
The City has implemented Governmental Accounting Standards Board Statement No. 54, "Fund
Balance Reporting and Governmental Fund Type Definitions ", for the year ended June 30, 2011.
The fund balances reported on the fund statements now consist of the following categories:
Nonspendable - This classification includes 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 - This classification includes amounts that can be spent only for specific purposes
stipulated by constitution, external resource providers or through enabling legislation.
Committed - This classification includes amounts that can be used only for the specific purposes
determined by a formal action of the government's highest level of decision - making authority.
Assigned - This classification includes amounts to be used by the government for specific purposes
but do not meet the criteria to be classified as restricted or committed. In governmental funds,
other than the general fund, assigned fund balance represents the remaining amount that is not
restricted or committed.
Unassigned - This classification includes the residual balance for the government's general fund
and includes all spendable amounts not contained in other classifications. In other funds, the
unassigned classification is used only to report a deficit balance resulting from overspending for
specific purposes for which amounts had been restricted, committed or assigned.
When an expenditure is incurred for purposes for which both restricted and unrestricted fund
balances are available, the City's policy is to apply restricted fund balance first.
When an expenditure is incurred for purposes for which committed, assigned or unassigned fund
balances are available, the City's policy is to apply committed fund balance first, then assigned
fund balance, and finally unassigned fund balance.
See independent auditors' report.
-77-
CITY OF LAKE ELSINORE, CALIFORNIA
NOTES TO BASIC FINANCIAL STATEMENTS
(CONTINUED)
June 30, 2011
15. OTHER REQUIRED INDIVIDUAL FUND DISCLOSURES:
It is the City's intention to seek authority from the City Council to realign the current year's budget
to reflect priority changes in the goals and objectives of the City. This realignment did not take
place in the current year budget; therefore, expenditures exceeded appropriations in the following
funds:
Expenditures Appropriations
Major Fund:
Redevelopment Agency Special Revenue Fund $ 12,838,711 $ 2,612,234
Other Governmental Funds:
L.L.E.B.G Program Special Revenue Fund
Office of Traffic and Safety Special Revenue Fund
Traffic Offender Special Revenue Fund
Lighting and Landscaping Special Revenue Fund
Endowment Trust Special Revenue Fund
Community Center Special Revenue Fund
Traffic Improvements Capital Projects Fund
58,946
17,000
107,982
50,000
34,087
25,000
1,345,268
1,275,000
5,050
2,100
7,493
-
778
-
The following funds had a deficit fund balance at June 30, 2011. These deficits are expected to be
eliminated through future revenues and transfers except for the Redevelopment Agency Debt
Service Fund. Due to the dissolution of the Redevelopment Agency effective February 1, 2011, it
is not known how the Successor Agency will eliminate the deficit.
Major Fund:
Redevelopment Agency Debt Service Fund $
Other Governmental Funds:
Office of Traffic and Safety Special Revenue Fund
C.D.B.G Special Revenue Fund
Miscellaneous Grants Special Revenue Fund
N.P.D.E.S. Special Revenue Fund
Recreation Authority Debt Service Fund
TUMF Capital Projects Fund
See independent auditors' report.
Amount
24,728,024
21,381
109,869
72,724
10,968
11,923
103,620
CITY OF LAKE ELSINORE, CALIFORNIA
NOTES TO BASIC FINANCIAL STATEMENTS
(CONTINUED)
June 30, 2011
16. PENSION PLAN:
Plan Description
The City contributes to the California Public Employees Retirement System (PERS), a cost sharing
multiple - employer public employee defined benefit pension plan. PERS provides retirement and
disability benefits, annual cost -of- living adjustments, and death benefits to plan members and
beneficiaries. PERS acts as a common investment and administrative agent for participating public
entities within the State of California. As of July 1, 2005, the City was mandated by the State to
participate in the risk pool. The risk pool combines the assets and liabilities across employers of
the same risk pool to provide a method to spread the risk of uncertain gains and losses over a larger
base of members. Benefit provisions and all other requirements are established by state statute and
City ordinance. Copies of PERS annual financial report may be obtained from their executive
office: 400 P Street, Sacramento, California 95814.
All full -time City employees are eligible to participate in PERS. Benefits vest after five (5) years
of credited service. Employees are eligible for retirement at the age of 55 and are entitled to a
monthly benefit of 2.5% of final compensation, the highest average monthly compensation earned
during any period of three consecutive years, for each year of service credit. Retirement may begin
at age 50 with a reduced benefit rate. PERS also provides death and disability benefits. Upon
separation from the plan, members' accumulated contributions are refundable with interest credited
through the date of separation. Effective December 7, 2011, employees are eligible for retirement
at the age of 60 and are entitled to a monthly benefit of 2.0% based on average monthly
compensations earned during the final three years of employment.
Annual Required Contribution
PERS participants are required to contribute on the basis of a percentage of regular earnings. The
percentages are set by statute and, therefore, generally remain unchanged from year to year.
The present rates are:
Member Rates
As A Percentage
Of Wages
Local Miscellaneous Members 8.00%
For employees who are covered by formulas modified to coordinate with social security, a rate of
zero is charged for the first $133.33 per month.
Also, there is an additional charge for employees covered by the 1959 Survivor Benefit, $2.00 per
covered member per month.
See independent auditors' report.
-79-
CITY OF LAKE ELSINORE, CALIFORNIA
NOTES TO BASIC FINANCIAL STATEMENTS
(CONTINUED)
June 30, 2011
16. PENSION PLAN (CONTINUED):
Annual Required Contribution (Continued)
The City is required to contribute the remaining amounts necessary to fund the benefits for its
members, using the actuarial basis recommended by the PERS actuaries and actuarial consultants
and adopted by the Board of Administration. The contribution rates at June 30, 2011, 2010
and 2009 were 16.465 %, 16.485% and 17.50 %, respectively. The City's contributions to CalPERS
for the years ended June 30, 2011, 2010 and 2009 were $922,645, $1,022,973 and $1,240,414,
respectively, and were equal to required contributions for each year.
17. OTHER POST-EMPLOYMENT BENEFITS:
Plan Description
In addition to providing pension benefits, the City provides post - employment benefits for retired
employees. In accordance with City Resolution 89 -42 dated September 1989, the City provides
health insurance premium costs to qualifying employees. Employees who retire from the City on
or after attaining age 55 with at least 5 years of service with the City, qualify to receive the
post - employment benefit. The City pays 100% of the retirees' and authorized dependents monthly
medical premiums.
Funding Policy
The contribution requirements of plan members and the City are established and may be amended
by the City, the City's City Council, and/or the employee associations. Currently, contributions
are not required from plan members. Contributions are funded on a pay -as- you -go basis. During
the fiscal year ended June 30, 2011, the City elected to fund $379,875 towards the unfunded
accrued liability related to this benefit.
Annual OPEB Cost and Net OPEB Obligation
The City's annual OPEB cost (expense) is calculated based on the annual required contribution of
the employer (ARC), an amount actuarially determined in accordance with parameters of GASB
Statement 45. The ARC represents a level of funding that, if paid on an ongoing basis, is projected
to cover normal cost each year and to amortize any unfunded liabilities of the plan over a period
not to exceed thirty years. The ARC for fiscal year 2010 -11 was $1,356,199.
See independent auditors' report.
:1
CITY OF LAKE ELSINORE, CALIFORNIA
NOTES TO BASIC FINANCIAL STATEMENTS
(CONTINUED)
June 30, 2011
17. OTHER POST - EMPLOYMENT BENEFITS (CONTINUED):
Annual OPEB Cost and Net OPEB Obligation (Continued)
The following table 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.
Annual required contribution (ARC)
Interest on net OPEB obligation
Adjustment to ARC
Annual OPEB cost
Actual contributions made
Increase in net OPEB obligation
Net OPEB Obligation - beginning of year
Net OPEB Obligation - end of year
Three -Year Trend Information
$ 1,356,199
125,519
(311,054)
1,170,664
(379,875)
790,789
2,086,786
2.877,575
For fiscal year 2011, the City's annual OPEB cost (expense) of $1,356,199 was equal to the ARC.
Information on the annual OPEB cost, percentage of Annual OPEB cost contributed, and Net
OPEB Obligation is presented below:
Fiscal
Year
Ended
6/30/09
6/30/10
6/30/11
Annual
OPEB
Cost
$ 1,356,199
1,356,199
1,170,664
Funded Status and Funding Progress
Actual
Contributions
(Net of
Adjustments)
$ 307,802
317,810
379,875
Percentage
of Annual
OPEB Cost
Contributed
22.70%
23.43%
32.45%
Net
OPEB
Obligation
_
$ 1,048,397
2,086,786
2,877,575
As of July 1, 2008, the first actuarial valuation date, the plan was zero percent funded. The
actuarial accrued liability for benefits was $8,791,806 and the actuarial value of assets was zero,
resulting in an unfunded accrued liability (UAL) of $8,791,806. The covered payroll (annual
payroll of active employees covered by the plan) was $5,280,551 and the ratio of the UAL to the
covered payroll was 166.49 %.
See independent auditors' report.
-81-
CITY OF LAKE ELSINORE, CALIFORNIA
NOTES TO BASIC FINANCIAL STATEMENTS
(CONTINUED)
June 30, 2011
17. OTHER POST - EMPLOYMENT BENEFITS (CONTINUED):
Funded Status and Funding Progress (Continued)
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, presented as required
supplementary information following the notes to basic financial statements, presents multi -year
trend information about whether the actuarial value of plan assets is increasing or decreasing over
time relative to the actuarial accrued liabilities for benefits.
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 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.
In the July 1, 2008 actuarial valuation, the frozen entry age method was used. The actuarial
assumptions included a rate of return on assets of 7.75% per annum and a medical cost trend rates
ranging from 5.5% to 9% for the first four years and an ultimate rate of 5.0% after four years,
dental cost trend is 4% per year. The City's unfunded actuarial accrued liability is being amortized
by level dollar contributions over twenty years as a level dollar amount.
18. DEFERRED COMPENSATION:
The City offers its employees a deferred compensation plan created in accordance with Internal
Revenue Code Section 457. On August 20, 1996 the provisions of Internal Revenue Code (IRC)
Section 457 were amended to require new plans to place all assets and income of the plans in trust
for the exclusive benefit of participants and their beneficiaries. Plans in existence as of the date of
this change must place the Plan assets and income in trust by January 1, 1999. Once the assets and
income are placed in trust the City no longer owns the amounts deferred by employees and related
income. Prior to this IRC Section 457 Amendment, the deferred amounts and related income
remained as property of the City until withdrawn by the employee.
See independent auditors' report.
CITY OF LAKE ELSINORE, CALIFORNIA
NOTES TO BASIC FINANCIAL STATEMENTS
(CONTINUED)
June 30, 2011
18. DEFERRED COMPENSATION (CONTINUED):
During the 1997 -98 fiscal year, the City placed its Deferred Compensation Plan assets and related
income in trust as allowed by IRC Section 457 and as a result the asset and corresponding liability
are no longer presented in these financial statements. This change had no impact on the City's fund
equity.
19. LIABILITY, PROPERTY AND PROTECTION:
Description Self- Insurance Pool Pursuant to Joint Powers Agreement
The City is a member of the California Joint Powers Insurance Authority (Insurance Authority).
The Insurance Authority is composed of 121 California public entities and is organized under a
joint powers agreement pursuant to California Government Code §6500 et seq. The purpose of the
Insurance 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 coverages. The Insurance Authority's pool 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 9- member Executive Committee.
Self - Insurance Programs of the Insurance Authority
A revised cost allocation methodology was introduced in 2010 -11, however it retains many
elements of the previous cost allocation methodology. Each member pays an annual contribution
(formerly called the primary deposit) to cover estimated losses for the coverage period. This initial
funding is paid at the beginning of the coverage period. After the close of the coverage period,
outstanding claims are valued. A retrospective deposit computation is then conducted annually
thereafter until all claims incurred during the coverage period are closed on a pool -wide basis.
This subsequent cost re- allocation among members based on actual claim development can result
in adjustments of either refunds or additional deposits required.
The total funding requirement for self - insurance programs is estimated using actuarial models and
pre - funded through the annual contribution. Costs are allocated to individual agencies based on
exposure (payroll) and experience (claims) relative to other members of the risk - sharing pool.
Additional information regarding the cost allocation methodology is provided below.
See independent auditors' report.
CITY OF LAKE ELSINORE, CALIFORNIA
NOTES TO BASIC FINANCIAL STATEMENTS
(CONTINUED)
June 30, 2011
19. LIABILITY, PROPERTY AND PROTECTION (CONTINUED):
Self - Insurance Programs of the Insurance Authority (Continued)
General Liability Insurance. In the liability program claims are pooled separately between police
and non - police 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 in excess of $750,000 up
to the reinsurance attachment point of $5 million are distributed based on the outcome of cost
allocation within the first and second loss layers. (5) Costs of covered claims from $5 million to
$10 million are paid under a reinsurance contract subject to a $2.5 million annual aggregate
deductible. Costs of covered claims from $10 million to $15 million are paid under two
reinsurance contracts subject to a combined $3 million annual aggregate deductible. On a
cumulative basis for all 2010 -11 reinsurance contracts the annual aggregate deductible is
$5.5 million. (6) Costs of covered claims from $15 million up to $50 million are covered through
excess insurance policies.
The overall coverage limit for each member including all layers of coverage is $50 million per
occurrence.
Costs of covered claims for subsidence losses are paid by reinsurance and excess insurance with a
pooled sub -limit of $35 million per occurrence. This $35 million subsidence sub -limit is composed
of (a) $5 million retained within the pool's SIR, (b) $10 million in reinsurance and (c) $20 million
in excess insurance. The excess insurance layer has a $20 million annual aggregate.
Purchased Insurance
All Risk Property Insurance - The City participates in the all -risk property protection program of
the Insurance Authority. This insurance protection is underwritten by several insurance companies.
The City's property is currently insured according to a schedule of covered property submitted by
the City to the Insurance Authority. The City's property currently has all -risk property insurance
protection in the amount of $35,808,267. 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 retroactive adjustments.
See independent auditors' report.
.,
CITY OF LAKE ELSINORE, CALIFORNIA
NOTES TO BASIC FINANCIAL STATEMENTS
(CONTINUED)
June 30, 2011
19. LIABILITY, PROPERTY AND PROTECTION (CONTINUED):
Purchased Insurance (Continued)
Crime Insurance - The City purchases crime insurance coverage in the amount of $1,000,000 with
a $2,500 deductible. The fidelity coverage is provided through the Insurance Authority. Premiums
are paid annually and are not subject to retroactive adjustments.
Adequacy of Protection
During the past three fiscal (claims) years, none of the above programs of protection have
experienced settlements or judgments that exceeded pooled or insured coverage. There were also
no significant reductions in pooled or insured liability coverage in 2010 -2011.
The aforementioned information is not included in the accompanying financial statements.
Complete financial statements for the California Joint Powers Insurance Authority may be obtained
from their administrative office located at 8081 Moody Street, La Palma, California 90623.
20. LITIGATION:
The City is a defendant in several other pending lawsuits of a nature common to many similar
jurisdictions. City management estimates that the potential claims against the City not covered by
insurance resulting from such litigation would not materially affect the basic financial statements of
the City.
21. COMMITMENTS AND CONTINGENCIES:
The Agency has entered into several developer agreements to attract new business to the City. The
following represents the Agency's significant commitments with certain developers:
McMillin Summerly LLC
On or about December 26, 2002, the Agency entered into a Disposition and Development
Agreement (DDA) with Laing -CP Lake Elsinore LLC and Civic Partners- Elsinore LLC, as
developer and master developer, respectively, covering an area of approximately 3,000 acres
located in Project Areas II and III. As a result of the bankruptcy of the managing member of
Laing -CP Lake Elsinore LLC, Bank of America foreclosed on the property subject to the DDA.
Subsequently, Bank of America transferred the ownership of the property subject to DDA to
McMillin Summerly LLC, who assumed the rights and obligations of the developer under the DDA
pursuant to an Amended and Restated DDA entered into as of March 8, 2011. In the DDA, the
Agency pledged 100% of the net tax increment generated by the property subject to the DDA to the
developer and master developer, excluding, without limitation, moneys to be set aside in the low
and moderate income housing fund and funds payable under existing pass- through agreements.
See independent auditors' report.
MKM
CITY OF LAKE ELSINORE, CALIFORNIA
NOTES TO BASIC FINANCIAL STATEMENTS
(CONTINUED)
June 30, 2011
21. COMMITMENTS AND CONTINGENCIES (CONTINUED):
McMillin Summerly LLC (Continued)
As of June 30, 2011, the Agency has accrued $3,177,229 of tax increment due to the developer and
master developer for payment when due pursuant to the terms of the DDA. These liabilities are
presented as part of accounts payable in the Redevelopment Agency Special Revenue Fund and
Redevelopment Agency Debt Service Fund. A portion of the tax increment pledge reimburses the
developer for construction of certain extraordinary infrastructure associated with the project.
Developer's reimbursement for construction of certain extraordinary infrastructure is limited to
$19,000,000, as adjusted in accordance with the terms of the DDA. The Agency issued two
subordinate tax allocation bonds 2011 Series totaling $4,610,000, the proceeds of which will be
used to reimburse the developer for construction of certain extraordinary infrastructure. Any
unpaid reimbursement of extraordinary infrastructure is to be forgiven upon the expiration of the
Agency's right to receive tax increment under its Redevelopment Plans for Project Areas II and III.
The DDA prohibits further bonded indebtedness secured by tax increment generated by the project
site, other than for specified project purposes.
Supplemental Education Revenue Augmentation Fund ( SERAF)
Pursuant to AB 26 4x, a budget trailer bill, California redevelopment agencies were required to
make Supplemental Education Revenue Augmentation Fund ( SERAF) contributions totaling
$1.7 billion for the fiscal year 2009 -2010 and $350 million for the fiscal year 2010 -2011. Under
AB 26 4x, agencies may borrow a portion of the required contributions from their low and
moderate income housing fund. Alternatively, sponsoring governmental agencies (the cities or
counties) may elect to pay the SERAF contributions on behalf of their redevelopment agencies. On
October 20, 2009, the California Redevelopment Association filed a class action lawsuit on behalf
of all California redevelopment agencies, again challenging the SERAF obligations as
unconstitutional. The court ruled that the SERAF obligations were not unconstitutional.
The Agency's SERAF contributions are $6,976,853 for the fiscal year 2009 -2010 and $1,436,411
for 2010 -2011. For fiscal year 2009 -2010, the Agency paid $3,226,853 from non - housing funds
and the balance of $3,750,000 was from suspending a portion of the 20% set aside amount for
fiscal year 2010 as allowed by the legislation. For fiscal year 2010 -2011, the SERAF payment was
made by the Agency's Debt Service Funds.
See independent auditors' report.
:.
CITY OF LAKE ELSINORE, CALIFORNIA
NOTES TO BASIC FINANCIAL STATEMENTS
(CONTINUED)
June 30, 2011
21. COMMITMENTS AND CONTINGENCIES (CONTINUED):
Recent Changes in Legislation Affecting California Redevelopment Agencies
On June 29, 2011, the Governor of the State of California signed Assembly Bills lx 26 and 27 as
part of the State's budget package. Assembly Bill lx 26 requires each California redevelopment
agency to suspend nearly all activities except to implement existing contracts, meet
already - incurred obligations, preserve its assets and prepare for the impending dissolution of the
agency. Assembly Bill lx 27 provides a means for redevelopment agencies to continue to exist
and operate by means of a Voluntary Alternative Redevelopment Program. Under this program
each City would adopt an ordinance agreeing to make certain payments to the County Auditor
Controller in fiscal year 2011 -12 and annual payments each fiscal year thereafter. Assembly
Bill lx 26 indicates that the City "may use any available funds not otherwise obligated for other
uses" to make this payment. The City of Lake Elsinore intends to use available monies of its
redevelopment agency for this purpose. The amounts to be paid after fiscal year 2012 -13 have yet
to be determined by the state legislature.
Assembly Bill lx 26 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 Assembly Bill lx 26.
In the event that Assembly Bill lx 26 is upheld, the interagency receivable recognized by funds of
the City that had previously loaned or advanced funds to the redevelopment agency may become
uncollectible resulting in a loss recognized by such funds. The City might additionally be impacted
if reimbursements previously paid by the redevelopment agency to the City for shared
administrative services are eliminated.
At June 30, 2011, the General Fund of the City had advanced $3,588,189 to the Redevelopment
Agency reported as Due from other funds and Advances to other funds which may not be
collectible. Additionally from the period June 1, 2011 to June 30, 2011, $4,235,000 in principal
and interest and $2,308,005 in staff support, debt service payment, fiscal charges and other costs
were repaid by the Redevelopment Agency to the City. The Agency also transferred $4,978,453 to
the City for capital project costs. These transactions are subject to review by the State Controller's
Office.
See independent auditors' report.
CITY OF LAKE ELSINORE, CALIFORNIA
NOTES TO BASIC FINANCIAL STATEMENTS
(CONTINUED)
June 30, 2011
21. COMMITMENTS AND CONTINGENCIES (CONTINUED):
Recent Changes in Legislation Affecting California Redevelopment Agencies (Continued)
The League of California Cities and the California Redevelopment Association (CRA) filed a
lawsuit on July 18, 2011 on behalf of cities, counties and redevelopment agencies petitioning the
California Supreme Court to overturn Assembly Bills lx 26 and 27 on the grounds that these bills
violate the California Constitution. On August 11, 2011, the California Supreme Court issued a
stay of all of Assembly Bill lx 27 and most of Assembly Bill lx 26. The California Supreme
Court stated in its order that "the briefing schedule is designed to facilitate oral argument as early
as possible in 2011, and a decision before January 15, 2012 ". A second order issued by the
California Supreme Court on August 17, 2011 indicated that certain provisions of Assembly
Bills lx 26 and 27 were still in effect and not affected by its previous stay, including requirements
to file an appeal of the determination of the community remittance payment by August 15, the
requirement to adopt an Enforceable Obligations Payment Schedule (EOPS) by August 29, 2011,
and the requirement to prepare a preliminary draft of the initial Recognized Obligation Payment
Schedule (ROPS) by September 30, 2011.
Because the stay provide by Assembly Bill lx 26 only affects enforcement, each agency must
adopt an EOPS and draft ROPS prior to September 30, as required by the statute. Enforceable
obligations include bonds, loans and payments required by the federal or State government; legally
enforceable payments required in connection with agency employees such as pension payments
and unemployment payments, judgments or settlement; legally binding and enforceable agreements
or contracts; and contracts or agreements necessary for the continued administration or operation of
the agency that are permitted for purposes set forth in Assembly Bill lx 26.
On August 23, 2011, City Ordinance No. 2011 -1293 was adopted, indicating that the City will
comply with the Voluntary Alternative Redevelopment Program in order to permit the continued
existence and operation of the Agency, in the event Assembly Bills lx 26 and/or 27 are upheld as
constitutional.
On December 29, 2011, the California Supreme Court upheld Assembly Bill lx 26 which dissolves
the Lake Elsinore Redevelopment Agency on February 1, 2012, and struck down Assembly
Bill lx 27, which would have allowed the formation of new redevelopment agencies. By operation
of Assembly Bill lx 26, the City of Lake Elsinore becomes the Successor Agency, with the
responsibility to dissolve the Agency's operations.
Pursuant to the provisions of Assembly Bill lx 26, the City staff is in the process of preparing an
Enforceable Obligation Payment Schedule (EOPS) and a Preliminary Draft Recognized Obligation
Payment Schedule (PDROPS) and establish an Oversight Board Committee to direct the Successor
Agency in winding down redevelopment activities pursuant to Health and Safety Code
Section 34181.
See independent auditors' report.
..
CITY OF LAKE ELSINORE, CALIFORNIA
NOTES TO BASIC FINANCIAL STATEMENTS
(CONTINUED)
June 30, 2011
21. COMMITMENTS AND CONTINGENCIES (CONTINUED):
Recent Changes in Legislation Affecting California Redevelopment Agencies (Continued)
The EOPS and PDROPS are similar payment schedules (with the PDROPS identifying sources of
payment for obligations) that outline the fiscal obligations of the City in its capacity as Successor
Agency from January 1, 2012 through July 1, 2012. These schedules are necessary so that the
Successor Agency will be able to receive funding from the County of Riverside to pay its
enforceable obligations. There are certain advances made from the City to the Agency in the
amount of $3,588,189 (see Note 13) which ultimate payment is not currently known.
In light of the recent State Supreme Court decision, California Redevelopment Association and
League of California Cities representatives have vowed to work with State Legislators immediately
to develop special legislation to revive redevelopment in order to protect local communities, job
creation and to assist in the economic recovery. Two bills have already been introduced. Senate
Bill 659 was introduced on January 5, 2012 to move the dissolution dates to April 15th. Pro Tem
Steinberg introduced Assembly Bill 654 on January 10th to allow the transfer of all property and
cash assets to a city's housing authority. Both bills were not taken up by the state legislature and
the dissolution date remains February 1, 2012.
On January 10, 2012, the City also elected to retain the housing assets and functions previously
performed by the Agency in accordance with Section 34176 of the redevelopment law.
The impacts of Assembly Bill lx 26 are difficult to determine, since there are many uncertainties.
The uncertainties include whether the Legislature will adopt clean -up legislation and
redevelopment reform legislation. The uncertainties also include existing and future litigation.
There are also uncertainties created by the Successor Agency and Oversight Committee process, as
well as the involvement of the County Auditor - Controller and the State Department of Finance.
The accompanying financial statements do not include any adjustments that might result from the
outcome of these uncertainties.
22. JOINT POWERS AGREEMENTS:
a. On March 28, 2000, the City agreed to enter into a joint powers agreement under
Proposition 13 with Elsinore Valley Municipal Water District and the Santa Ana Watersheds
Project Authority to form the Lake Elsinore and San Jacinto Watersheds Authority. The
Authority is due to receive $15 million in Proposition 13 water bond proceeds to improve the
Lake Elsinore and San Jacinto Watersheds Authority lake water quality. As of June 30, 2011,
the Authority had minimal activity and according to the criteria in Note 1A, the Authority is not
included in these financial statements.
See independent auditors' report.
:'
CITY OF LAKE ELSINORE, CALIFORNIA
NOTES TO BASIC FINANCIAL STATEMENTS
(CONTINUED)
June 30, 2011
22. JOINT POWERS AGREEMENTS (CONTINUED):
b. In November 2010, the City agreed to enter into a joint powers agreement with the County of
Riverside, City of Canyon Lake, City of Murrieta, City of Temecula and City of Wildomar to
form the Southwest Communities Financing Authority (the Authority) to provide animal shelter
services. The City contributes a prorated share of the Authority's debt service payments, costs
of administrative services and operation of animal shelter. The City does not have measurable
equity interest in the Authority. According to criteria in Note IA, the Authority is not included
in these financial statements.
c. In January 2004, the City entered into a joint powers agreement with the County of Riverside,
the Cities of Banning, Beaumont, Calimesa, Canyon Lake, Corona, Hemet, Moreno Valley,
Murrieta, Norco, Perris, Riverside, San Jacinto and Temecula to form the Western Riverside
County Regional Conservation Authority (the Conservation Authority). The purposes of the
Conservation Authority are to acquire, administer, operate and maintain land and facilities for
ecosystem conservation and habitat reserve for certain endangered species. The City's
contributions to the Conservation Authority consist of a development mitigation fee imposed on
all new development. The City does not have measurable equity interest in the Conservation
Authority. According to criteria in Note IA, the Conservation Authority is not included in
these financial statements.
23. SUBSEQUENT EVENTS:
Issuance of Local Agency Revenue Bonds 2011 Series B
In November 2011, Lake Elsinore Public Financing Authority issued Local Agency Revenue Bonds
2011 Series B in the aggregate principal amount of $1,405,000. The proceeds were used to refund
the 1996 Series E bonds and acquire local obligation bonds.
24. RESTATEMENT OF FUND BALANCES - GOVERNMENTAL FUND FINANCIAL
STATEMENTS:
In the Other Governmental Funds, the fund balance of the Permanent Fund Endowment Trust was
increased by $35,463 to account for a reclassification from the Special Revenue Funds.
See independent auditors' report.
.1
REQUIRED SUPPLEMENTARY INFORMATION
-91-
CITY OF LAKE ELSINORE
SCHEDULE OF FUNDING PROGRESS
For the year ended June 30, 2011
OTHER POST - EMPLOYMENT BENEFITS PLAN
See independent auditors' report.
-92-
Actuarial
Actuarial
UAAL as a
Accrued
Value of
Unfunded
Annual
% of
Actuarial
Liability
Assets
AAL
Funded
Covered
Covered
Valuation
(AAL)
(AVA)
(UAAL)
Ratio
Payroll
Payroll
Date
(a)
(b)
(a) - (b)
(b) /(a)
(c)
[(a)- (b)] /(c)
7/1/2008
$ 8,791,806
$ -
$ 8,791,806
0.00%
$ 5,280,551
166.49%
See independent auditors' report.
-92-
CITY OF LAKE ELSINORE, CALIFORNIA
BUDGETARY COMPARISON SCHEDULE
REVENUES:
Property taxes
Other taxes
Licenses, permits and fees
Intergovernmental revenues
Charges for services
Fines, forfeitures and penalties
Investment income
Miscellaneous
TOTAL REVENUES
EXPENDITURES:
Current:
General government
Public safety
Community development
Public services
Community services
TOTAL EXPENDITURES
EXCESS OF REVENUES OVER
(UNDER) EXPENDITURES
OTHER FINANCING SOURCES (USES):
Transfers in
Transfers out
TOTAL OTHER
FINANCING SOURCES (USES)
NET CHANGE IN FUND BALANCE
FUND BALANCE - BEGINNING OF YEAR
FUND BALANCE - END OF YEAR
GENERAL FUND
For the year ended June 30, 2011
Budgeted Amounts
Original Final
Actual
Variance with
Final Budget
Positive
(Negative)
$ 5,344,000
$ 5,544,000
$ 5,438,551
$ (105,449)
8,836,000
9,286,000
9,557,873
271,873
1,336,700
1,571,870
1,783,412
211,542
262,100
255,402
294,486
39,084
1,449,765
1,404,640
1,383,934
(20,706)
404,000
396,000
648,643
252,643
315,450
240,450
245,583
5,133
2,972,800
3,483,498
3,935,723
452,225
20,920,815
22,181,860
23,288,205
1,106,345
5,375,710
6,000,532
6,177,790
(177,258)
11,553,255
11,417,000
10,659,634
757,366
1,705,137
1,383,653
1,337,689
45,964
1,390,670
1,641,279
1,716,863
(75,584)
3,462,046
3,593,480
3,318,519
274,961
23,486,818
24,035,944
23,210,495
825,449
(2,566,003)
(1,854,084)
77,710
1,931,794
50,000
50,000
51,752
1,752
-
(185,000)
(231,000)
(46,000)
50,000
(135,000)
(179,248)
(44,248)
(2,516,003)
(1,989,084)
(101,538)
1,887,546
14,917,319 14,917,319 14,917,319 -
$ 12,401,316 $ 12,928,235 $ 14,815,781 $ 1,887,546
See independent auditors' report and note to required supplementary information.
-93-
CITY OF LAKE ELSINORE, CALIFORNIA
BUDGETARY COMPARISON SCHEDULE
REDEVELOPMENT AGENCY SPECIAL REVENUE FUND
REVENUES:
Property taxes
Intergovernmental revenues
Investment income
Miscellaneous income
TOTAL REVENUES
EXPENDITURES:
Current:
Community development
Debt services:
Principal retirement
Interest and fiscal charges
TOTAL EXPENDITURES
EXCESS OF REVENUES OVER
(UNDER) EXPENDITURES
FUND BALANCE - BEGINNING OF YEAR
FUND BALANCE - END OF YEAR
For the year ended June 30, 2011
1,315,450 1,315,450 11,560,419 (10,244,969)
515,000 515,000 725,800 210,800
781,784 781,784 552,492 (229,292)
2,612,234 2,612,234 12,838,711 (10,226,477)
2,120,566 2,120,566 (7,878,851) (9,999,417)
34,320,899 34,320,899 34,320,899 -
$ 36,441,465 $ 36,441,465 $ 26,442,048 $ (9,999,417)
See independent auditors' report and note to required supplementary information.
-94-
Variance with
Final Budget
Budgeted Amounts
Positive
Original
Final
Actual
(Negative)
$ 3,892,800
$ 3,892,800
$ 3,821,776
$ (71,024)
-
-
285,243
285,243
300,000
300,000
106,865
(193,135)
540,000
540,000
745,976
205,976
4,732,800
4,732,800
4,959,860
227,060
1,315,450 1,315,450 11,560,419 (10,244,969)
515,000 515,000 725,800 210,800
781,784 781,784 552,492 (229,292)
2,612,234 2,612,234 12,838,711 (10,226,477)
2,120,566 2,120,566 (7,878,851) (9,999,417)
34,320,899 34,320,899 34,320,899 -
$ 36,441,465 $ 36,441,465 $ 26,442,048 $ (9,999,417)
See independent auditors' report and note to required supplementary information.
-94-
CITY OF LAKE ELSINORE, CALIFORNIA
NOTE TO REQUIRED SUPPLEMENTARY INFORMATION
June 30, 2011
1. BUDGETS AND BUDGETARY ACCOUNTING:
The City follows these procedures in establishing the budgetary data reflected in the financial
statements:
1) In May, the City Manager submits to the City Council a proposed operating budget for the
fiscal year commencing July 1. The operating budget includes proposed expenditures and
estimated revenues and other means of financing.
2) Public hearings are conducted at City Council meetings to obtain public input.
3) Prior to July 1, the budget is adopted by Council action.
4) The City Manager is authorized to transfer funds appropriated with respect to those
classifications designated as other services and material and supplies within the same
department. The City Manager may transfer appropriated funds from any classification within
other expenditure categories to the capital outlay classification within the same department
only. For budgeting purposes, the General Fund is composed of several departments while all
other budgeted funds are considered a single department. Revenues are budgeted on a line item
basis.
5) The legal level of budgetary control is maintained at the departmental level. Formal budgetary
integration is employed as a management control device during the year for the General and
Special Revenue Fund types to assist in controlling expenditures and enforcing revenue
provisions. Capital Projects Fund types are budgeted on a project by project basis. All
appropriations lapse at the end of the fiscal year, except for capital projects which are carried
forward until such time as the project is completed or terminated.
6) Budgets for the General, certain Special Revenue and certain Capital Projects Funds are
adopted on a basis consistent with accounting principles generally accepted in the United States
of America. Budgeted amounts are as originally adopted and as further amended by the City
Council.
7) Budget information is presented for the General, certain Special Revenue and certain Capital
Projects Fund types. Formal budgeting policies are not required for the Debt Service Fund and,
therefore, the financial statement of this fund is not included in the Schedule of Revenues,
Expenditures and Changes in Fund Balances - Budget and Actual.
See independent auditors' report.
-95-
THIS PAGE INTENTIONALLY LEFT BLANK
.s
SUPPLEMENTARY INFORMATION
-97-
THIS PAGE INTENTIONALLY LEFT BLANK
"'.
CITY OF LAKE ELSINORE, CALIFORNIA
OTHER GOVERNMENTAL FUNDS
June 30, 2011
SPECIAL REVENUE FUNDS are used to account for the proceeds of specific revenue sources that
are restricted by law or City Council resolution to expenditure for specific purposes.
DEBT SERVICE RECREATION AUTHORITY FUND is used to account for debt service
transactions including revenue collections and payments of principal and interest on long -term
obligations of the component unit.
CAPITAL PROJECTS FUNDS are used to account for financial resources to be used for the
acquisition or construction of redevelopment projects and administrative expenses.
PERMANENT FUND - ENDOWMENT TRUST is used to account for receipts used for payment of
high school scholarships.
W
CITY OF LAKE ELSINORE, CALIFORNIA
COMBINING BALANCE SHEET
OTHER GOVERNMENTAL FUNDS
June 30, 2011
ASSETS
Cash and investments
Cash and investments with fiscal agents
Accrued interest receivable
Due from other governments
Land held for resale
TOTAL ASSETS
LIABILITIES AND FUND BALANCES
LIABILITIES:
Accounts payable
Accrued liabilities
Deposits and other liabilities
Due to other funds
Deferred revenue
TOTAL LIABILITIES
FUND BALANCES (DEFICIT):
Nonspendable:
Land held for resale
Endowment principal
Restricted for:
Debt service
General government
Public safety
Public services
Community services
Capital projects
Assigned to:
Capital projects
Unassigned
TOTAL FUND
BALANCES (DEFICIT)
TOTAL LIABILITIES
AND FUND BALANCES
See independent auditors' report.
$10,193,336 $ 1,665 $ 27,584,778 $ 30,728 $37,810,507
$ 484,466 $ - $ 82,457 $ - $ 566,923
21,045 - - - 21,045
1,700 - - - 1,700
205,156 13,588 5,070,939 - 5,289,683
1,956,572 - 633,925 - 2,590,497
2,668,939 13,588 5,787,321 - 8,469,848
6,088,480 - 6,088,480
- 30,728 30,728
-
Debt Service
- 1,665
Permanent
Total
Special
Fund
Capital
Fund
Other
Revenue
Recreation
Projects
Endowment
Governmental
Funds
Authority
Funds
Trust
Funds
$ 9,741,913
$ -
$ 17,237,854
$ 30,723
$27,010,490
-
1,665
3,439,181
-
3,440,846
3,052
-
5,234
5
8,291
448,371
-
814,029
-
1,262,400
-
-
6,088,480
-
6,088,480
$10,193,336 $ 1,665 $ 27,584,778 $ 30,728 $37,810,507
$ 484,466 $ - $ 82,457 $ - $ 566,923
21,045 - - - 21,045
1,700 - - - 1,700
205,156 13,588 5,070,939 - 5,289,683
1,956,572 - 633,925 - 2,590,497
2,668,939 13,588 5,787,321 - 8,469,848
6,088,480 - 6,088,480
- 30,728 30,728
-
1,665 -
- 1,665
19,450
- -
- 19,450
277,695
- -
- 277,695
5,728,779
- -
- 5,728,779
1,713,415
- -
- 1,713,415
-
- 9,352,394
- 9,352,394
-
- 11,255,852
- 11,255,852
(214,942)
(13,588) (4,899,269)
- (5,127,799)
7,524,397
(11,923) 21,797,457
30,728 29,340,659
$10,193,336 $ 1,665 $ 27,584,778 $ 30,728 $37,810,507
-100-
CITY OF LAKE ELSINORE, CALIFORNIA
COMBINING STATEMENT OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCES - OTHER GOVERNMENTAL FUNDS
REVENUES:
Licenses, permits and fees
Intergovernmental revenues
Fines, forfeitures and penalties
Investment income
Special assessments
Contribution from property owners
Miscellaneous
TOTAL REVENUES
EXPENDITURES:
Current:
General government
Public safety
Public services
Community services
Capital outlay
Debt service:
Principal retirement
Interest and fiscal charges
TOTAL EXPENDITURES
EXCESS OF REVENUES OVER
(UNDER) EXPENDITURES
OTHER FINANCING SOURCES (USES):
Transfers in
Transfers out
TOTAL OTHER FINANCING
SOURCES (USES)
NET CHANGE IN FUND BALANCES
For the year ended June 30, 2011
36,708
Debt Service
2,666,440
Permanent
Total
Special
Fund
Capital
Fund
Other
Revenue
Recreation
Projects
Endowment
Governmental
Funds
Authority
Funds
Trust
Funds
$ 751,254
$ -
$ 757,272
$ -
$ 1,508,526
3,734,253
-
366,113
-
4,100,366
323,814
-
-
-
323,814
133,935
-
212,707
315
346,957
1,586,602
-
-
-
1,586,602
-
-
5,352,614
-
5,352,614
95,664
408,657
322,952
-
827,273
6,625,522
408,657
7,011,658
315
14,046,152
36,708
-
2,666,440
-
2,703,148
552,971
-
-
-
552,971
3,270,543
-
1,228,830
5,050
4,504,423
396,127
-
-
-
396,127
2,044,988
-
886,050
-
2,931,038
-
375,000
-
-
375,000
-
39,761
-
-
39,761
6,301,337
414,761
4,781,320
5,050
11,502,468
324,185
(6,104)
2,230,338
(4,735)
2,543,684
-
-
6,134,453
-
6,134,453
(50,000)
-
(1,752)
-
(51,752)
(50,000)
-
6,132,701
-
6,082,701
274,185
(6,104)
8,363,039
(4,735)
8,626,385
FUND BALANCES (DEFICIT) -
BEGINNING OF YEAR, AS RESTATED 7,250,212 (5,819) 13,434,418 35,463 20,714,274
FUND BALANCES (DEFICIT) -
END OF YEAR $ 7,524,397 $ (11,923) $ 21,797,457 $ 30,728 $ 29,340,659
See independent auditors' report.
-101-
CITY OF LAKE ELSINORE, CALIFORNIA
OTHER SPECIAL REVENUE FUNDS
June 30, 2011
Supplemental Law Enforcement Service - to account for receipts and expenditures of money related to
the citizens option for public safety grant.
L.L.E.B.G Program - to account for grant monies received from the U.S. Department of Justice.
Expenditures for this fund are restricted to local law enforcement.
Office of Traffic and Safety - to account for monies received under federal and state programs to
enforce traffic safety laws.
Traffic Offender - to account for administrative fees generated from charges to drivers who have been
arrested for DUI, who are driving on suspended /revoked licenses, or have never been issued a drivers
license. These funds may only be used to further the traffic safety goals of the City and are subject to
OTS audit.
Gas Tax - to account for receipts and expenditures of money apportioned under the Street and
Highway Code of the State of California.
Transportation - to account for the collection of fees assessed to developers and for expenditures made
to improve the City's transportation system.
Traffic Safety - to account for expenditures financed by revenue generated from enforcement of
California vehicle codes and city ordinances. These restricted funds may be used only for traffic
signals, school crossing guards, and other related traffic safety expenditures.
Lighting and Landscape - to account for revenues derived from annual assessments which are used to
pay the costs incurred by the City for landscape maintenance and street light maintenance.
Lighting and Landscape Maintenance District (L.L.M.D.) No. 1 - to account for revenues derived from
annual assessments which are used to pay the costs incurred by the City for landscape maintenance and
street light maintenance.
Geothermal - to account for state grant monies used to maintain hot water wells owned by the City.
Air Pollution - to account for South Coast Air Quality Board receipts used to develop systems to
reduce air pollution.
Community Development Block Grant (C.D.B.G.) - to account for grant monies received from a
federal pass - through agency not accounted for in the other funds.
-102-
CITY OF LAKE ELSINORE, CALIFORNIA
OTHER SPECIAL REVENUE FUNDS
(CONTINUED)
June 30, 2011
Cost RecoveKy S s e - to account for receipts of deposits paid by developers used to pay for plans
and permits.
Developer Agreement - to account for developer lot fees.
Affordable Housing in Lieu - to account for collection of fees assessed to developers and for
expenditures made on affordable housing projects.
City Hall /Public Works - to account for collection of fees assessed to developers and for expenditures
made on City Hall and Public Works facilities projects.
Community Center - to account for collection of fees assessed to developers and for expenditures made
on Community Center facilities projects.
Lake Side Facilities - to account for collection of fees assessed to developers and for expenditure made
on Lake Side facilities projects.
Animal Shelter - to account for collection of fees assessed to developers and for expenditures made on
Animal Shelter facilities projects.
Camino del Norte - to account for fees assessed to developers and for expenditures made on the
Camino del Norte projects.
Miscellaneous Grants - to account for miscellaneous Federal, State and County grants requiring
segregated fund accounting.
N.P.D.E.S. - to account for fees assessed to property owners for the National Pollutant Discharge
System (N.P.D.E.S.), which is mandated by the federal government. This requires cities to clean up
storm water runoff.
Redevelopment Agency Cost RecoverySystem - to account for receipts of deposits paid by developers
used to pay for legal and outside consultant services.
-103-
ASSETS
Cash and investments
Accrued interest receivable
Due from other governments
TOTAL ASSETS
LIABILITIES:
Accounts payable
Accrued liabilities
Deposits and other liabilities
Due to other funds
Deferred revenue
TOTAL LIABILITIES
FUND BALANCES (DEFICITS):
Restricted for:
General government
Public safety
Public services
Community services
Unassigned
TOTAL FUND
BALANCES (DEFICITS)
TOTAL LIABILITIES
AND FUND BALANCES
See independent auditors' report.
CITY OF LAKE ELSINORE, CALIFORNIA
COMBINING BALANCE SHEET
OTHER SPECIAL REVENUE FUNDS
June 30, 2011
Supplemental
Office of
Law
Traffic
Enforcement
L.L.E.B.G.
and
Traffic
Gas
Service
Program
Safety
Offender
Tax
$ 110,547
$
2,170
$
-
$
143,324
$ 2,487,749
49
-
-
60
1,060
25,228
-
36,222
-
-
$ 135,824
$
2,170
$
36,222
$
143,384
$ 2,488,809
$ -
$
5
$
-
$
1,873
$ 19,434
-
1,805
-
-
15,007
-
-
42,555
-
-
-
-
15,048
-
-
-
1,810
57,603
1,873
34,441
135,824
360
-
141,511
-
-
-
-
-
2,454,368
-
-
(21,381)
-
-
135,824
360
(21,381)
141,511
2,454,368
$ 135,824
$
2,170
$
36,222
$
143,384
$ 2,488,809
-104-
- - - - 19,450 - -
666,370 142,909 21,956 104,158 - 177,803 -
- - - - - - (109,869)
666,370 142,909 21,956 104,158 19,450 177,803 (109,869)
$ 784,220 $ 215,647 $ 126,376 $ 112,421 $ 21,150 $ 178,231 $ -
(Continued)
-105-
Lighting
Traffic
and
L.L.M.D.
Air
Transportation
Safety
Landscaping
No.I
Geothermal
Pollution C.D.B.G.
$ 641,010
$ 184,906
$ 90,878
$ 108,752
$ 21,142
$ 165,939 $ -
305
56
-
59
8
68 -
142,905
30,685
35,498
3,610
-
12,224 -
$ 784,220
$ 215,647
$ 126,376
$ 112,421
$ 21,150
$ 178,231 $ -
$ 116,383
$ 72,738
$ 104,420
$ 8,263
$ -
$ 428 $ -
1,467
-
-
-
-
- -
-
-
-
-
1,700
- -
-
-
-
-
-
- 109,869
117,850
72,738
104,420
8,263
1,700
428 109,869
- - - - 19,450 - -
666,370 142,909 21,956 104,158 - 177,803 -
- - - - - - (109,869)
666,370 142,909 21,956 104,158 19,450 177,803 (109,869)
$ 784,220 $ 215,647 $ 126,376 $ 112,421 $ 21,150 $ 178,231 $ -
(Continued)
-105-
CITY OF LAKE ELSINORE, CALIFORNIA
COMBINING BALANCE SHEET
OTHER SPECIAL REVENUE FUNDS
(CONTINUED)
June 30, 2011
ASSETS
Cash and investments
Accrued interest receivable
Due from other governments
TOTAL ASSETS
TOTAL LIABILITIES AND FUND BALANCES
LIABILITIES:
Accounts payable
Accrued liabilities
Deposits and other liabilities
Due to other funds
Deferred revenue
TOTAL LIABILITIES
FUND BALANCES (DEFICITS):
Restricted for:
General government
Public safety
Public services
Community services
Unassigned
TOTAL FUND
BALANCES (DEFICITS)
TOTAL LIABILITIES
AND FUND BALANCES
Cost Affordable
Recovery Developer Housing
System Agreement in Lieu
$ 1,093,899 $ 1,058,328 $ 1,102,481
- 138 480
11,260 - -
City Hall/
$ 1,087,361
472
$ 65,167 $ 19,983 $
1,039,992 - - -
1,105,159 19,983 - -
- 1,038,483 - 1,087,833
- 1,102,961 -
1,038,483 1,102,961 1,087,833
$ 1,105,159 $ 1,058,466 $ 1,102,961 $ 1,087,833
See independent auditors' repot.
-106-
- - - - - - - 19,450
- - - - - - - 277,695
- - - 34,899 - - - 5,728,779
110,648 200,650 299,156 - - - - 1,713,415
- - - - (72,724) (10,968) - (214,942)
110,648 200,650 299,156 34,899 (72,724) (10,968) - 7,524,397
$ 113,349 $ 212,701 $ 299,156 $ 34,899 $ 808,857 $ 46,461 $ 79,040 $ 10,193,336
-107-
Redevelopment
Agency
Total
Lake
Cost
Other
Community
Side
Animal
Camino
Miscellaneous
Recovery
Special
Center
Facilities
Shelter
del Norte
Grants
N.P.D.E.S.
System
Revenue Funds
$ 113,300
$ 212,599
$ 299,026
$ 34,883
$ 704,579
$ -
$ 79,040
$ 9,741,913
49
102
130
16
-
-
-
3,052
-
-
-
-
104,278
46,461
-
448,371
$ 113,349
$ 212,701
$ 299,156
$ 34,899
$ 808,857
$ 46,461
$ 79,040
$ 10,193,336
$ 2,701
$ 12,051
$ -
$ -
$ 48,794
$ 2,234
$ 9,992
$ 484,466
-
-
-
-
303
2,463
-
21,045
-
-
-
-
-
-
-
1,700
-
-
-
-
-
52,732
-
205,156
-
-
-
-
832,484
-
69,048
1,956,572
2,701
12,051
-
-
881,581
57,429
79,040
2,668,939
- - - - - - - 19,450
- - - - - - - 277,695
- - - 34,899 - - - 5,728,779
110,648 200,650 299,156 - - - - 1,713,415
- - - - (72,724) (10,968) - (214,942)
110,648 200,650 299,156 34,899 (72,724) (10,968) - 7,524,397
$ 113,349 $ 212,701 $ 299,156 $ 34,899 $ 808,857 $ 46,461 $ 79,040 $ 10,193,336
-107-
CITY OF LAKE ELSINORE, CALIFORNIA
COMBINING STATEMENT OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCES - OTHER SPECIAL REVENUE FUNDS
REVENUES:
Licenses, permits and fees
Intergovernmental revenues
Fines, forfeitures and penalties
Investment income
Special assessments
Miscellaneous
TOTAL REVENUES
EXPENDITURES:
Current:
General government
Public safety
Public services
Community services
Capital outlay
TOTAL EXPENDITURES
EXCESS OF REVENUES OVER
(UNDER) EXPENDITURES
OTHER FINANCING USES:
Transfers out
NET CHANGE IN FUND BALANCES
FUND BALANCES (DEFICITS) -
BEGINNING OF YEAR, AS RESTATED
FUND BALANCES (DEFICITS) -
END OF YEAR
See independent auditors' report.
For the year ended June 30, 2011
Supplemental
Office of
Law
Traffic
Enforcement
L.L.E.B.G.
and
Traffic
Gas
Service
Program
Safety
Offender
Tax
$ -
$ -
$ -
$ 80,056
$ -
100,228
71,619
156,330
-
1,196,730
2,001
-
-
2,276
44,836
-
-
-
-
750
102,229
71,619
156,330
82,332
1,242,316
75,000 38,904 107,982 34,087 -
- - - - 925,317
- 20,042 - - 141,121
75,000 58,946 107,982 34,087 1,066,438
27,229 12,673
27,229 12,673
108,595
48,348 48,245 175,878
48,348
(12,313) (69,729)
48,245 175,878
93,266 2,278,490
$ 135,824 $ 360 $ (21,381) $ 141,511 $ 2,454,368
-108-
-
-
Lighting
-
-
-
12,662
Traffic
and
L.L.M.D.
Air
-
Transportation
Safety
Landscaping
No.I
Geothermal Pollution
C.D.B.G.
-
9,146
-
648,876
-
-
821,031
-
-
-
- -
87,661
-
323,814
-
-
- -
-
16,040
1,623
-
3,874
372 2,597
-
-
-
1,376,919
209,683
- -
-
1,394
-
14,102
-
- 55,971
3,328
838,465
325,437
1,391,021
213,557
372 58,568
90,989
-
-
-
-
-
-
12,662
-
218,215
-
-
-
-
75,000
547,914
20,194
1,345,268
132,278
-
9,146
-
648,876
-
-
-
-
-
-
1,196,790
238,409
1,345,268
132,278
-
9,146
87,662
(358,325)
87,028
45,753
81,279
372
49,422
3,327
-
-
(20,000)
(30,000)
-
-
-
(358,325)
87,028
25,753
51,279
372
49,422
3,327
1,024,695
55,881
(3,797)
52,879
19,078
128,381
(113,196)
$ 666,370
$ 142,909
$ 21,956
$ 104,158
$ 19,450
$ 177,803
$ (109,869)
(Continued)
-109-
CITY OF LAKE ELSINORE, CALIFORNIA
COMBINING STATEMENT OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCES - OTHER SPECIAL REVENUE FUNDS
(CONTINUED)
For the year ended June 30, 2011
See independent auditors' report
-110-
Cost
Affordable
Recovery Developer
Housing
City Hall/
System Agreement
in Lieu
Public Works
REVENUES:
Licenses, permits and fees
$ - $ 171,500
$ 6,802
$ 70,157
Intergovernmental revenues
- -
-
-
Fines, forfeitures and penalties
- -
-
-
Investment income
- 6,356
20,552
19,437
Special assessments
- -
-
-
Miscellaneous
- -
-
-
TOTAL REVENUES
- 177,856
27,354
89,594
EXPENDITURES:
Current:
General government
- -
-
-
Public safety
- -
-
-
Public services
- 35,530
-
-
Community services
- 7,315
-
-
Capital outlay
- 6,395
-
-
TOTAL EXPENDITURES
- 49,240
-
-
EXCESS OF REVENUES OVER
(UNDER) EXPENDITURES
- 128,616
27,354
89,594
OTHER FINANCING USES:
Transfers out
- -
-
-
NET CHANGE IN FUND BALANCES
- 128,616
27,354
89,594
FUND BALANCES (DEFICITS) -
BEGINNING OF YEAR, AS RESTATED
- 909,867
1,075,607
998,239
FUND BALANCES (DEFICITS) -
END OF YEAR
$ - $ 1,038,483
$ 1,102,961
$ 1,087,833
See independent auditors' report
-110-
-
-
-
-
24,046
Redevelopment
- 36,708
-
-
-
-
3,783
Agency
Total
-
Lake
-
-
57,947
Cost
Other
Community
Side
Animal
Camino
Miscellaneous
Recovery
Special
Center
Facilities
Shelter
del Norte
Grants
N.P.D.E.S. System
Revenue Funds
$ 46,541
$ 66,548
$ 29,754
$ -
$ 900
$ 278,996 $ -
$ 751,254
-
-
-
-
1,300,654
- -
3,734,253
-
-
-
-
-
- -
323,814
1,612
3,675
8,031
653
-
- -
133,935
-
-
-
-
-
- -
1,586,602
-
-
-
-
20,119
- -
95,664
48,153
70,223
37,785
653
1,321,673
278,996 -
6,625,522
-
-
-
-
24,046
-
- 36,708
-
-
-
-
3,783
-
- 552,971
-
-
-
-
57,947
196,949
- 3,270,543
7,493
42,036
187,640
-
151,643
-
- 396,127
-
-
-
-
1,161,355
67,199
- 2,044,988
7,493
42,036
187,640
-
1,398,774
264,148
- 6,301,337
40,660
28,187
(149,855)
653
(77,101)
14,848
- 324,185
-
-
-
-
-
-
- (50,000)
40,660
28,187
(149,855)
653
(77,101)
14,848
- 274,185
69,988
172,463
449,011
34,246
4,377
(25,816)
- 7,250,212
$ 110,648
$ 200,650
$ 299,156 $
34,899
$ (72,724)
$ (10,968) $
- $ 7,524,397
- 111 -
CITY OF LAKE ELSINORE, CALIFORNIA
SCHEDULE OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCE - BUDGET AND ACTUAL
SUPPLEMENTAL LAW ENFORCEMENT SERVICE SPECIAL REVENUE FUND
REVENUES:
Intergovernmental revenues
Investment income
TOTAL REVENUES
EXPENDITURES:
Current:
Public safety
Capital outlay
TOTAL EXPENDITURES
EXCESS OF REVENUES OVER
(UNDER) EXPENDITURES
FUND BALANCE - BEGINNING OF YEAR
FUND BALANCE - END OF YEAR
See independent auditors' report.
For the year ended June 30, 2011
Budgeted Amounts
Original Final
$ 100,000 $ 100,000
Variance with
Final Budget
Positive
Actual (Negative)
$ 100,228 $ 228
2,001 2,001
75,000 75,000 75,000 -
25,000 25,000 - 25,000
100,000 100,000 75,000 25,000
27,229 27,229
108,595 108,595 108,595 -
$ 108,595 $ 108,595 $ 135,824 $ 27,229
-112-
CITY OF LAKE ELSINORE, CALIFORNIA
SCHEDULE OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCE - BUDGET AND ACTUAL
L.L.E.B.G. PROGRAM SPECIAL REVENUE FUND
REVENUES:
Intergovernmental revenues
EXPENDITURES:
Current:
Public safety
Capital outlay
TOTAL EXPENDITURES
EXCESS OF REVENUES OVER
(UNDER) EXPENDITURES
FUND BALANCE (DEFICIT) -
BEGINNING OF YEAR
FUND BALANCE - END OF YEAR
See independent auditors' report.
For the year ended June 30, 2011
Variance with
Final Budget
Budgeted Amounts Positive
Original Final Actual (Negative)
$ 32,000 $ 32,000 $ 71,619 $ 39,619
17,000 17,000 38,904 (21,904)
- - 20,042 (20,042)
17,000 17,000 58,946 (41,946)
15,000 15,000 12,673 (2,327)
(12,313) (12,313) (12,313) -
$ 2,687 $ 2,687 $ 360 $ (2,327)
-113 -
CITY OF LAKE ELSINORE, CALIFORNIA
SCHEDULE OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCE - BUDGET AND ACTUAL
OFFICE OF TRAFFIC AND SAFETY SPECIAL REVENUE FUND
For the year ended June 30, 2011
Budgeted Amounts
Original Final
REVENUES:
Actual
Variance with
Final Budget
Positive
(Negative)
Intergovernmental revenues $
117,000 $
117,000 $
156,330 $
39,330
EXPENDITURES:
Current:
Public safety
50,000
50,000
107,982
(57,982)
EXCESS OF REVENUES OVER
(UNDER) EXPENDITURES
67,000
67,000
48,348
(18,652)
FUND BALANCE (DEFICIT) -
BEGINNING OF YEAR
(69,729)
(69,729)
(69,729)
-
FUND BALANCE (DEFICIT) - END OF YEAR $
(2,729) $
(2,729) $
(21,381) $
(18,652)
See independent auditors' report.
-114-
CITY OF LAKE ELSINORE, CALIFORNIA
SCHEDULE OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCE - BUDGET AND ACTUAL
TRAFFIC OFFENDER SPECIAL REVENUE FUND
For the year ended June 30, 2011
REVENUES:
Licenses, permits and fees
Investment income
TOTAL REVENUES
EXPENDITURES:
Current:
Public safety
EXCESS OF REVENUES OVER
(UNDER) EXPENDITURES
FUND BALANCE - BEGINNING OF YEAR
FUND BALANCE - END OF YEAR
See independent auditors' report.
Budgeted Amounts
Original Final
$ 25,000 $ 25,000
25,000 25,000
25,000 25,000 34,087 (9,087)
- - 48,245 48,245
93,266 93,266 93,266 -
$ 93,266 $ 93,266 $ 141,511 $ 48,245
- 115 -
Variance with
Final Budget
Positive
Actual
(Negative)
$ 80,056
$ 55,056
2,276
2,276
82,332
57,332
25,000 25,000 34,087 (9,087)
- - 48,245 48,245
93,266 93,266 93,266 -
$ 93,266 $ 93,266 $ 141,511 $ 48,245
- 115 -
CITY OF LAKE ELSINORE, CALIFORNIA
SCHEDULE OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCE - BUDGET AND ACTUAL
GAS TAX SPECIAL REVENUE FUND
For the year ended June 30, 2011
REVENUES:
Intergovernmental revenues
Investment income
Miscellaneous
TOTAL REVENUES
EXPENDITURES:
Current:
Public services
Capital outlay
TOTAL EXPENDITURES
EXCESS OF REVENUES OVER
(UNDER) EXPENDITURES
FUND BALANCE - BEGINNING OF YEAR
FUND BALANCE - END OF YEAR
See independent auditors' report.
Budgeted Amounts
Original Final
$ 1,097,204 $ 1,097,204
1,097,204 1,097,204
Variance with
Final Budget
Positive
Actual (Negative)
$ 1,196,730 $ 99,526
44,836 44,836
1,242,316 145,112
840,548
840,548
925,317
(84,769)
653,750
653,750
141,121
512,629
1,494,298
1,494,298
1,066,438
427,860
(397,094)
(397,094)
175,878
572,972
2,278,490
2,278,490
2,278,490
-
$ 1,881,396
$ 1,881,396
$ 2,454,368
$ 572,972
-116-
CITY OF LAKE ELSINORE, CALIFORNIA
SCHEDULE OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCE - BUDGET AND ACTUAL
TRANSPORTATION SPECIAL REVENUE FUND
REVENUES:
Intergovernmental revenues
Investment income
Miscellaneous
TOTAL REVENUES
EXPENDITURES:
Current:
Public services
Capital outlay
TOTAL EXPENDITURES
EXCESS OF REVENUES OVER
(UNDER) EXPENDITURES
FUND BALANCE - BEGINNING OF YEAR
FUND BALANCE - END OF YEAR
See independent auditors' report.
For the year ended June 30, 2011
Budgeted Amounts
Original Final
$ 820,500 $ 820,500
820,500 820,500
263,221
Variance with
547,914
Final Budget
1,156,730
Positive
Actual
(Negative)
$ 821,031
$ 531
16,040
16,040
1,394
1,394
838,465
17,965
263,221
263,221
547,914
(284,693)
1,156,730
1,156,730
648,876
507,854
1,419,951
1,419,951
1,196,790
223,161
(599,451)
(599,451)
(358,325)
241,126
1,024,695
1,024,695
1,024,695
-
$ 425,244
$ 425,244
$ 666,370
$ 241,126
-117-
CITY OF LAKE ELSINORE, CALIFORNIA
SCHEDULE OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCE - BUDGET AND ACTUAL
TRAFFIC SAFETY SPECIAL REVENUE FUND
REVENUES:
Fines, forfeitures and penalties
Investment income
TOTAL REVENUES
EXPENDITURES:
Current:
Public safety
Public services
TOTAL EXPENDITURES
EXCESS OF REVENUES OVER
(UNDER) EXPENDITURES
FUND BALANCE - BEGINNING OF YEAR
FUND BALANCE - END OF YEAR
See independent auditors' report.
For the year ended June 30, 2011
Budgeted Amounts
Original Final
$ 308,000 $ 308,000
Variance with
Final Budget
Positive
Actual (Negative)
$ 323,814 $ 15,814
1,623 1,623
')1G All 11 All
264,685
264,685
218,215
46,470
40,000
40,000
20,194
19,806
304,685
304,685
238,409
66,276
3,315
3,315
87,028
83,713
55,881
55,881
55,881
-
$ 59,196 $
59,196 $
142,909 $
83,713
- 118 -
CITY OF LAKE ELSINORE, CALIFORNIA
SCHEDULE OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCE - BUDGET AND ACTUAL
LIGHTING AND LANDSCAPING SPECIAL REVENUE FUND
For the year ended June 30, 2011
REVENUES:
Special assessments
Miscellaneous
TOTAL REVENUES
EXPENDITURES:
Current:
Public services
EXCESS OF REVENUES OVER
(UNDER) EXPENDITURES
OTHER FINANCING USES:
Transfers out
NET CHANGE IN FUND BALANCE
FUND BALANCE (DEFICIT) -
BEGINNING OF YEAR
FUND BALANCE - END OF YEAR
See independent auditors' report.
Budgeted Amounts
Original Final
$ 1,300,000 $ 1,300,000
1,300,000 1,300,000
1,275,000 1,275,000 1,345,268 (70,268)
25,000 25,000 45,753 20,753
(20,000) (20,000) (20,000)
5,000 5,000 25,753
20,753
(3,797) (3,797) (3,797) -
$ 1,203 $ 1,203 $ 21,956 $ 20,753
-119-
Variance with
Final Budget
Positive
Actual
(Negative)
$ 1,376,919
$ 76,919
14,102
14,102
1,391,021
91,021
1,275,000 1,275,000 1,345,268 (70,268)
25,000 25,000 45,753 20,753
(20,000) (20,000) (20,000)
5,000 5,000 25,753
20,753
(3,797) (3,797) (3,797) -
$ 1,203 $ 1,203 $ 21,956 $ 20,753
-119-
CITY OF LAKE ELSINORE, CALIFORNIA
SCHEDULE OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCE - BUDGET AND ACTUAL
L.L.M.D. NO. 1 SPECIAL REVENUE FUND
For the year ended June 30, 2011
REVENUES:
Investment income
Special assessments
TOTAL REVENUES
EXPENDITURES:
Current:
Public services
EXCESS OF REVENUES OVER
(UNDER) EXPENDITURES
OTHER FINANCING USES:
Transfers out
NET CHANGE IN FUND BALANCE
FUND BALANCE - BEGINNING OF YEAR
FUND BALANCE - END OF YEAR
See independent auditors' report.
Variance with
Final Budget
Budgeted Amounts Positive
Original Final Actual (Negative)
$ - $ - $ 3,874 $ 3,874
210,000 210,000 209,683 (317)
210,000 210,000 213,557 3,557
195,994 195,994 132,278 63,716
14,006 14,006 81,279 67,273
(30,000) (30,000) (30,000) -
(15,994) (15,994) 51,279 67,273
52,879 52,879 52,879 -
$ 36,885 $ 36,885 $ 104,158 $ 67,273
-120-
CITY OF LAKE ELSINORE, CALIFORNIA
SCHEDULE OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCE - BUDGET AND ACTUAL
GEOTHERMAL SPECIAL REVENUE FUND
For the year ended June 30, 2011
REVENUES:
Investment income
FUND BALANCE - BEGINNING OF YEAR
FUND BALANCE - END OF YEAR
See independent auditors' report.
Budgeted Amounts
Original Final
$ 245 $ 245
Actual
$ 372
Variance with
Final Budget
Positive
(Negative)
$ 127
19,078 19,078 19,078 -
$ 19,323 $ 19,323 $ 19,450 $ 127
- 121 -
CITY OF LAKE ELSINORE, CALIFORNIA
SCHEDULE OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCE - BUDGET AND ACTUAL
AIR POLLUTION SPECIAL REVENUE FUND
REVENUES:
Investment income
Miscellanoues
TOTAL REVENUES
EXPENDITURES:
Current:
Public services
EXCESS OF REVENUES OVER
(UNDER) EXPENDITURES
FUND BALANCE - BEGINNING OF YEAR
FUND BALANCE - END OF YEAR
See independent auditors' report.
For the year ended June 30, 2011
Variance with
Final Budget
Budgeted Amounts Positive
Original Final Actual (Negative)
$ 2,000 $ 2,000 $ 2,597 $ 597
48,000 48,000 55,971 7,971
50,000 50,000 58,568 8,568
100,000 100,000 9,146 90,854
(50,000) (50,000) 49,422 99,422
128,381 128,381 128,381 -
$ 78,381 $ 78,381 $ 177,803 $ 99,422
-122-
CITY OF LAKE ELSINORE, CALIFORNIA
SCHEDULE OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCE - BUDGET AND ACTUAL
C.D.B.G. SPECIAL REVENUE FUND
For the year ended June 30, 2011
REVENUES:
Intergovernmental revenues
Miscellaneous
TOTAL REVENUES
EXPENDITURES:
Current:
General government
Public safety
Capital outlay
TOTAL EXPENDITURES
EXCESS OF REVENUES OVER
(UNDER) EXPENDITURES
FUND BALANCE (DEFICIT) -
BEGINNING OF YEAR
FUND BALANCE (DEFICIT) - END OF YEAR
See independent auditors' report.
-123-
Variance with
Final Budget
Budgeted
Amounts
Positive
Original
Final
Actual
(Negative)
$ 190,370
$ 190,370
$ 87,661
$ (102,709)
-
-
3,328
3,328
190,370
190,370
90,989
(99,381)
-
-
12,662
(12,662)
75,000
75,000
75,000
-
115,370
115,370
-
115,370
190,370
190,370
87,662
102,708
-
-
3,327
3,327
(113,196)
(113,196)
(113,196)
-
-123-
CITY OF LAKE ELSINORE, CALIFORNIA
SCHEDULE OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCE - BUDGET AND ACTUAL
DEVELOPER AGREEMENT SPECIAL REVENUE FUND
REVENUES:
Licenses, permits and fees
Investment income
TOTAL REVENUES
EXPENDITURES:
Current:
Public services
Community services
Capital outlay
TOTAL EXPENDITURES
EXCESS OF REVENUES OVER
(UNDER) EXPENDITURES
FUND BALANCE - BEGINNING OF YEAR
FUND BALANCE - END OF YEAR
See independent auditors' report.
For the year ended June 30, 2011
Variance with
Final Budget
Budgeted Amounts Positive
Original Final Actual (Negative)
$ - $ - $ 171,500 $ 171,500
24,000 24,000 6,356 (17,644)
1 A AAA I A AAA I - .11 , 11 OGL
155,012 155,012 35,530 119,482
- - 7,315 (7,315)
6,395 (6,395)
, GG A11 ,GG A11 -IA.
(131,012) (131,012) 128,616 259,628
909,867 909,867 909,867 -
$ 778,855 $ 778,855 $ 1,038,483 $ 259,628
-124-
CITY OF LAKE ELSINORE, CALIFORNIA
SCHEDULE OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCE - BUDGET AND ACTUAL
AFFORDABLE HOUSING IN LIEU SPECIAL REVENUE FUND
REVENUES:
Licenses, permits and fees
Investment income
TOTAL REVENUES
FUND BALANCE - BEGINNING OF YEAR
FUND BALANCE - END OF YEAR
See independent auditors' report.
For the year ended June 30, 2011
Variance with
Final Budget
Budgeted Amounts Positive
Original Final Actual (Negative)
$ 10,000 $ 10,000 $ 6,802 $ (3,198)
12,000 12,000 20,552 8,552
22,000 22,000 27,354 5,354
1,075,607 1,075,607 1,075,607 -
$ 1,097,607 $ 1,097,607 $ 1,102,961 $ 5,354
-125-
CITY OF LAKE ELSINORE, CALIFORNIA
SCHEDULE OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCE - BUDGET AND ACTUAL
CITY HALL/PUBLIC WORKS SPECIAL REVENUE FUND
REVENUES:
Licenses, permits and fees
Investment income
TOTAL REVENUES
FUND BALANCE - BEGINNING OF YEAR
FUND BALANCE - END OF YEAR
See independent auditors' report.
For the year ended June 30, 2011
Budgeted Amounts
Original Final
$ 56,000 $ 56,000
Variance with
Final Budget
Positive
Actual (Negative)
$ 70,157 $ 14,157
19,437 19,437
56,000 56,000 89,594 33,594
998,239 998,239 998,239 -
$ 1,054,239 $ 1,054,239 $ 1,087,833 $ 33,594
-126-
CITY OF LAKE ELSINORE, CALIFORNIA
SCHEDULE OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCE - BUDGET AND ACTUAL
COMMUNITY CENTER SPECIAL REVENUE FUND
For the year ended June 30, 2011
REVENUES:
Licenses, permits and fees
Investment income
TOTAL REVENUES
EXPENDITURES:
Current:
Community services
EXCESS OF REVENUES OVER
(UNDER) EXPENDITURES
FUND BALANCE - BEGINNING OF YEAR
FUND BALANCE - END OF YEAR
See independent auditors' report.
Budgeted Amounts
Original Final
$ 32,000 $ 32,000
32,000
32,000
7,493 (7,493)
32,000 32,000 40,660 8,660
69,988 69,988 69,988 -
$ 101,988 $ 101,988 $ 110,648 $ 8,660
-127-
Variance with
Final Budget
Positive
Actual
(Negative)
$ 46,541
$ 14,541
1,612
1,612
48,153
16,153
7,493 (7,493)
32,000 32,000 40,660 8,660
69,988 69,988 69,988 -
$ 101,988 $ 101,988 $ 110,648 $ 8,660
-127-
CITY OF LAKE ELSINORE, CALIFORNIA
SCHEDULE OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCE - BUDGET AND ACTUAL
LAKE SIDE FACILITIES SPECIAL REVENUE FUND
REVENUES:
Licenses, permits and fees
Investment income
TOTAL REVENUES
EXPENDITURES:
Current:
Community services
Capital outlay
TOTAL EXPENDITURES
EXCESS OF REVENUES OVER
(UNDER) EXPENDITURES
FUND BALANCE - BEGINNING OF YEAR
FUND BALANCE - END OF YEAR
See independent auditors' report.
For the year ended June 30, 2011
Budgeted Amounts
Original Final
$ 49,900 $ 49,900
Variance with
Final Budget
Positive
Actual (Negative)
$ 66,548 $ 16,648
3,675 3,675
268,271
268,271
42,036
226,235
49,860
49,860
-
49,860
318,131
318,131
42,036
276,095
(268,231)
(268,231)
28,187
296,418
172,463
172,463
172,463
-
$ (95,768) $
(95,768) $
200,650
$ 296,418
-128-
CITY OF LAKE ELSINORE, CALIFORNIA
SCHEDULE OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCE - BUDGET AND ACTUAL
ANIMAL SHELTER SPECIAL REVENUE FUND
For the year ended June 30, 2011
REVENUES:
Licenses, permits and fees
Investment income
TOTAL REVENUES
EXPENDITURES:
Current:
Community services
EXCESS OF REVENUES OVER
(UNDER) EXPENDITURES
FUND BALANCE - BEGINNING OF YEAR
FUND BALANCE - END OF YEAR
See independent auditors' report.
Budgeted Amounts
Original Final
$ 25,000 $ 25,000
25,000 25,000
200,000 200,000 187,640 12,360
(175,000) (175,000) (149,855) 25,145
449,011 449,011 449,011 -
$ 274,011 $ 274,011 $ 299,156 $ 25,145
-129-
Variance with
Final Budget
Positive
Actual
(Negative)
$ 29,754
$ 4,754
8,031
8,031
37,785
12,785
200,000 200,000 187,640 12,360
(175,000) (175,000) (149,855) 25,145
449,011 449,011 449,011 -
$ 274,011 $ 274,011 $ 299,156 $ 25,145
-129-
CITY OF LAKE ELSINORE, CALIFORNIA
SCHEDULE OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCE - BUDGET AND ACTUAL
CAMINO DEL NORTE SPECIAL REVENUE FUND
For the year ended June 30, 2011
REVENUES:
Investment income
FUND BALANCE - BEGINNING OF YEAR
FUND BALANCE - END OF YEAR
See independent auditors' report.
Budgeted Amounts
Original Final
$ 370 $ 370
Actual
$ 653
Variance with
Final Budget
Positive
(Negative)
$ 283
34,246 34,246 34,246 -
$ 34,616 $ 34,616 $ 34,899 $ 283
-130-
CITY OF LAKE ELSINORE, CALIFORNIA
SCHEDULE OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCE - BUDGET AND ACTUAL
MISCELLANEOUS GRANTS SPECIAL REVENUE FUND
For the year ended June 30, 2011
See independent auditors' report.
-131-
Variance with
Final Budget
Budgeted
Amounts
Positive
Original
Final
Actual
(Negative)
REVENUES:
Licenses, permits and fees
$ -
$ -
$ 900
$ 900
Intergovernmental revenues
866,994
866,994
1,300,654
433,660
Miscellaneous
-
-
20,119
20,119
TOTAL REVENUES
866,994
866,994
1,321,673
454,679
EXPENDITURES:
Current:
General government
25,545
25,545
24,046
1,499
Public safety
100,000
100,000
3,783
96,217
Public services
-
-
57,947
(57,947)
Community services
-
-
151,643
(151,643)
Capital outlay
1,475,137
1,475,137
1,161,355
313,782
TOTAL EXPENDITURES
1,600,682
1,600,682
1,398,774
201,908
EXCESS OF REVENUES OVER
(UNDER) EXPENDITURES
(733,688)
(733,688)
(77,101)
656,587
FUND BALANCE - BEGINNING OF YEAR
4,377
4,377
4,377
-
FUND BALANCE (DEFICIT) - END OF YEAR
$ (729,311)
$ (729,311)
$ (72,724)
$ 656,587
See independent auditors' report.
-131-
CITY OF LAKE ELSINORE, CALIFORNIA
SCHEDULE OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCE - BUDGET AND ACTUAL
N.P.D.E.S. SPECIAL REVENUE FUND
For the year ended June 30, 2011
See independent auditors' report.
-132-
Variance with
Final Budget
Budgeted
Amounts
Positive
Original
Final
Actual
(Negative)
REVENUES:
Licenses, permits and fees
$ 179,000
$ 179,000
$ 278,996
$ 99,996
EXPENDITURES:
Current:
Public services
393,526
393,526
196,949
196,577
Capital outlay
66,901
66,901
67,199
(298)
TOTAL EXPENDITURES
460,427
460,427
264,148
196,279
EXCESS OF REVENUES OVER
(UNDER) EXPENDITURES
(281,427)
(281,427)
14,848
296,275
FUND BALANCE (DEFICIT) -
BEGINNING OF YEAR
(25,816)
(25,816)
(25,816)
-
FUND BALANCE (DEFICIT) - END OF YEAR
$ (307,243)
$ (307,243)
$ (10,968)
$ 296,275
See independent auditors' report.
-132-
CITY OF LAKE ELSINORE, CALIFORNIA
OTHER CAPITAL PROJECTS FUNDS
June 30, 2011
OTHER FUNDS:
Miscellaneous General Project - to account for miscellaneous general projects of the City.
Park Improvement and Development - to account for the improvement and development of parks that
are financed by developer fees.
Street Capital Improvements - to account for general capital improvements of streets within the City
that are financed by development fees.
Storm Drain - to account for the capital improvements of upgrading the storm drains within the City.
Library Capital Improvement - to account for general capital improvements necessary for the
maintenance of the Public Library.
Signalization Improvement - to account for general improvements and repairs to signal lights within
the City.
Traffic Improvements - to account for projects related to traffic improvements.
City Fire Protection - to account for the construction of fire facilities at the Cottonwood Canyon
Development.
Public Improvements - to account for special designated improvements to City property.
Fire Station - to account for deposits and expenditures related to the Fire Station construction.
TUMF - to account for multi jurisdictional development impact fee paid for by new development to
provide the transportation infrastructure necessary to accommodate new development.
Boat Launch Construction - to account for proceeds and expenditures related to the construction of a
new City boat launch.
Assessment Districts - to account for transactions related to proceeds from assessment bonds and other
resources used to acquire and construct certain capital facilities.
Redevelopment Agency - to account for financial resources to be used for the acquisition or
construction of redevelopment projects and administrative expenses within the Rancho Laguna I,
Rancho Laguna II and Rancho Laguna II project areas.
-133-
CITY OF LAKE ELSINORE, CALIFORNIA
COMBINING BALANCE SHEET
OTHER CAPITAL PROJECTS FUNDS
June 30, 2011
See independent auditors' report.
-134-
Park
Miscellaneous
Improvement
Street
Library
General
and
Capital
Storm
Capital
Signalization
Project
Development
Improvements
Drain
Improvement
Improvement
ASSETS
Cash and investments
$
391,419
$ 297,569
$
13,609
$
5,137,824
$ 1,404,629
$ 148,873
Cash and investments
with fiscal agents
-
-
-
-
-
-
Accrued interest receivable
306
128
6
2,238
614
65
Due from other governments
3,051
-
-
-
-
-
Land held for resale
-
-
-
-
-
-
TOTAL ASSETS
$
394,776
$ 297,697
$
13,615
$
5,140,062
$ 1,405,243
$ 148,938
LIABILITIES AND
FUND BALANCES
LIABILITIES:
Accounts payable
$
18,928
$ -
$
-
$
-
$ 3,410
$
Due to other funds
-
-
-
-
Deferred revenue
3,051
-
TOTAL LIABILITIES
21,979
3,410
FUND BALANCES (DEFICIT):
Nonspendable:
Land held for resale
Restricted for:
Capital projects
-
297,697
13,615
-
-
-
Assigned to:
Capital projects
372,797
-
-
5,140,062
1,401,833
148,938
Unassigned
-
-
-
-
-
-
TOTAL FUND
BALANCES (DEFICIT)
372,797
297,697
13,615
5,140,062
1,401,833
148,938
TOTAL LIABILITIES
AND FUND BALANCES
$
394,776
$ 297,697
$
13,615
$
5,140,062
$ 1,405,243
$ 148,938
See independent auditors' report.
-134-
$ 3,274,693 $ 280,155 $ 637,356 $ 18 $ 815,272 $ 4,974,599 $ 3,577,831 $ 6,624,523 $ 27,584,778
$ 26,467 $ 5,231 $ - $ 28,421 $ 82,457
261,551 - - 4,809,388 5,070,939
630,874 - 633,925
918,892 5,231 4,837,809 5,787,321
- - 6,088,480 6,088,480
4,969,368 3,577,831 493,883 9,352,394
3,274,693 280,155 637,356 18 - - - 11,255,852
- - - - (103,620) - (4,795,649) (4,899,269)
3,274,693 280,155 637,356 18 (103,620) 4,969,368 3,577,831 1,786,714 21,797,457
$ 3,274,693 $ 280,155 $ 637,356 $ 18 $ 815,272 $ 4,974,599 $ 3,577,831 $ 6,624,523 $ 27,584,778
-135-
Total
City
Other
Traffic
Fire
Public Fire
Boat Launch Assessment
Redevelopment Capital
Improvements
Protection
Improvements Station
TUMF Construction Districts
Agency Projects Funds
$ 3,273,274
$ 280,034
$ 637,080 $ 18
$ 4,294 $ 4,974,599 $ 138,589
$ 536,043 $ 17,237,854
-
-
- -
- - 3,439,181
- 3,439,181
1,419
121
276
- 61
5,234
-
-
-
810,978 -
814,029
$ 3,274,693 $ 280,155 $ 637,356 $ 18 $ 815,272 $ 4,974,599 $ 3,577,831 $ 6,624,523 $ 27,584,778
$ 26,467 $ 5,231 $ - $ 28,421 $ 82,457
261,551 - - 4,809,388 5,070,939
630,874 - 633,925
918,892 5,231 4,837,809 5,787,321
- - 6,088,480 6,088,480
4,969,368 3,577,831 493,883 9,352,394
3,274,693 280,155 637,356 18 - - - 11,255,852
- - - - (103,620) - (4,795,649) (4,899,269)
3,274,693 280,155 637,356 18 (103,620) 4,969,368 3,577,831 1,786,714 21,797,457
$ 3,274,693 $ 280,155 $ 637,356 $ 18 $ 815,272 $ 4,974,599 $ 3,577,831 $ 6,624,523 $ 27,584,778
-135-
CITY OF LAKE ELSINORE, CALIFORNIA
COMBINING STATEMENT OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCES - OTHER CAPITAL PROJECTS FUNDS
For the year ended June 30, 2011
See independent auditors' report.
-136-
Park
Miscellaneous
Improvement
Street
Library
General
and
Capital
Storm
Capital
Signalization
Project
Development
Improvements
Drain
Improvement
Improvement
REVENUES:
Licenses, permits and fees
$
$ 254,488
$
$ 92,476
$ 48,300
$
Intergovernmental revenues
-
-
-
-
Investment income
5,432
4,252
255
95,106
26,072
2,780
Contribution from property owners
-
-
-
-
-
-
Miscellaneous
22
-
-
-
-
-
TOTAL REVENUES
5,454
258,740
255
187,582
74,372
2,780
EXPENDITURES:
Current:
General government
-
-
-
-
-
-
Public services
103,837
4,945
8,000
22,520
Capital outlay
58,868
118,204
-
-
-
-
TOTAL EXPENDITURES
162,705
123,149
-
8,000
22,520
-
EXCESS OF REVENUES OVER
(UNDER) EXPENDITURES
(157,251)
135,591
255
179,582
51,852
2,780
OTHER FINANCING
SOURCES (USES):
Transfers in
231,000
-
-
-
-
-
Transfers out
(1,752)
TOTAL OTHER FINANCING
SOURCES (USES)
229,248
-
-
NET CHANGE IN
FUND BALANCES
71,997
135,591
255
179,582
51,852
2,780
FUND BALANCES (DEFICIT) -
BEGINNING OF YEAR
300,800
162,106
13,360
4,960,480
1,349,981
146,158
FUND BALANCES (DEFICIT) -
END OF YEAR
$ 372,797
$ 297,697
$ 13,615
$ 5,140,062
$ 1,401,833
$ 148,938
See independent auditors' report.
-136-
-
-
-
2,666,440
-
2,666,440
Total
- - 137,176
City
-
945,401
1,228,830
- -
Other
Traffic
Fire
Public Fire
Boat Launch
Assessment
Redevelopment
Capital
Improvements
Protection
Improvements Station
TUMF Construction
Districts
Agency
Projects Funds
$ 213,570
$ 106,919
$ 41,519 $
$ - $
$
$
$ 757,272
-
-
-
366,113
-
366,113
58,471
3,955
11,720 1
-
4,569
94
212,707
-
-
- -
5,352,614
-
5,352,614
4,969,368
2,165,355
299,623
- 3,000
-
319,930
322,952
272,041
110,874
53,239 1
366,113 3,000
5,357,183
320,024
7,011,658
-
-
-
2,666,440
-
2,666,440
778
- - 137,176
6,173
-
945,401
1,228,830
- -
- - 177,678
5,912
525,388
-
886,050
778 -
- - 314,854
12,085
3,191,828
945,401
4,781,320
271,263 110,874
53,239 1 51,259
(9,085)
2,165,355
(625,377)
2,230,338
- -
- - -
4,978,453
-
925,000
6,134,453
-
-
(1,752)
- -
4,978,453
925,000
6,132,701
271,263 110,874
53,239 1 51,259
4,969,368
2,165,355
299,623
8,363,039
3,003,430 169,281
584,117 17 (154,879)
-
1,412,476
1,487,091
13,434,418
$ 3,274,693 $ 280,155 $ 637,356 $ 18 $ (103,620) $ 4,969,368 $ 3,577,831 $ 1,786,714 $21,797,457
- 137-
CITY OF LAKE ELSINORE, CALIFORNIA
SCHEDULE OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCE - BUDGET AND ACTUAL
MISCELLANEOUS GENERAL PROJECT CAPITAL PROJECTS FUND
For the year ended June 30, 2011
REVENUES:
Investment income
Miscellaneous
TOTAL REVENUES
EXPENDITURES:
Current:
Public services
Capital outlay
TOTAL EXPENDITURES
EXCESS OF REVENUES OVER
(UNDER) EXPENDITURES
OTHER FINANCING SOURCES (USES):
Transfers in
Transfers out
TOTAL OTHER FINANCING
SOURCES (USES)
NET CHANGE IN FUND BALANCE
FUND BALANCE - BEGINNING OF YEAR
FUND BALANCE - END OF YEAR
See independent auditors' report.
Budgeted Amounts
Original Final
Variance with
Final Budget
Positive
Actual (Negative)
5,432 $ 5,432
143,434
143,434
103,837
39,597
257,919
257,919
58,868
199,051
401,353
401,353
162,705
238,648
(401,353)
(401,353)
(157,251)
244,102
227,950
227,950
231,000
3,050
-
-
(1,752)
(1,752)
227,950
227,950
229,248
1,298
(173,403)
(173,403)
71,997
245,400
300,800
300,800
300,800
-
$ 127,397 $
127,397 $
372,797
$ 245,400
-138-
CITY OF LAKE ELSINORE, CALIFORNIA
SCHEDULE OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCE - BUDGET AND ACTUAL
PARK IMPROVEMENT AND DEVELOPMENT CAPITAL PROJECTS FUND
For the year ended June 30, 2011
See independent auditors' report.
-139-
Variance with
Final Budget
Budgeted
Amounts
Positive
Original
Final
Actual
(Negative)
REVENUES:
Licenses, permits and fees
$ 95,000
$ 95,000
$ 254,488
$ 159,488
Investment income
10,000
10,000
4,252
(5,748)
TOTAL REVENUES
105,000
105,000
258,740
153,740
EXPENDITURES:
Current:
Public services
-
-
4,945
(4,945)
Capital outlay
130,000
130,000
118,204
11,796
TOTAL EXPENDITURES
130,000
130,000
123,149
6,851
EXCESS OF REVENUES OVER
(UNDER) EXPENDITURES
(25,000)
(25,000)
135,591
160,591
FUND BALANCE - BEGINNING OF YEAR
162,106
162,106
162,106
-
FUND BALANCE - END OF YEAR
$ 137,106
$ 137,106
$ 297,697
$ 160,591
See independent auditors' report.
-139-
CITY OF LAKE ELSINORE, CALIFORNIA
SCHEDULE OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCE - BUDGET AND ACTUAL
STREET CAPITAL IMPROVEMENTS CAPITAL PROJECTS FUND
For the year ended June 30, 2011
REVENUES:
Investment income
FUND BALANCE - BEGINNING OF YEAR
FUND BALANCE - END OF YEAR
See independent auditors' report.
Budgeted Amounts
Original Final
$ 145 $ 145
Actual
$ 255
Variance with
Final Budget
Positive
(Negative)
$ 110
13,360 13,360 13,360 -
$ 13,505 $ 13,505 $ 13,615 $ 110
-140-
CITY OF LAKE ELSINORE, CALIFORNIA
SCHEDULE OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCE - BUDGET AND ACTUAL
STORM DRAIN CAPITAL PROJECTS FUND
REVENUES:
Licenses, permits and fees
Investment income
TOTAL REVENUES
EXPENDITURES:
Current:
Public services
Capital outlay
TOTAL EXPENDITURES
EXCESS OF REVENUES OVER
(UNDER) EXPENDITURES
FUND BALANCE - BEGINNING OF YEAR
FUND BALANCE - END OF YEAR
See independent auditors' report.
For the year ended June 30, 2011
Variance with
Final Budget
Budgeted Amounts Positive
Original Final Actual (Negative)
$ 20,000 $ 20,000 $ 92,476 $ 72,476
75,000 75,000 95,106 20,106
95,000 95,000 187,582 92,582
- - 8,000 (8,000)
65,000 65,000 - 65,000
65,000 65,000 8,000 57,000
30,000 30,000 179,582 149,582
4,960,480 4,960,480 4,960,480 -
$ 4,990,480 $ 4,990,480 $ 5,140,062 $ 149,582
- 141 -
CITY OF LAKE ELSINORE, CALIFORNIA
SCHEDULE OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCE - BUDGET AND ACTUAL
LIBRARY CAPITAL IMPROVEMENT CAPITAL PROJECTS FUND
For the year ended June 30, 2011
See independent auditors' report.
-142-
Variance with
Final Budget
Budgeted
Amounts
Positive
Original
Final
Actual
(Negative)
REVENUES:
Licenses, permits and fees
$ 30,000
$ 30,000
$ 48,300
$ 18,300
Investment income
11,000
11,000
26,072
15,072
TOTAL REVENUES
41,000
41,000
74,372
33,372
EXPENDITURES:
Current:
Public services
30,000
30,000
22,520
7,480
EXCESS OF REVENUES OVER
(UNDER) EXPENDITURES
11,000
11,000
51,852
40,852
FUND BALANCE - BEGINNING OF YEAR
1,349,981
1,349,981
1,349,981
-
FUND BALANCE - END OF YEAR
$ 1,360,981
$ 1,360,981
$ 1,401,833
$ 40,852
See independent auditors' report.
-142-
CITY OF LAKE ELSINORE, CALIFORNIA
SCHEDULE OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCE - BUDGET AND ACTUAL
SIGNALIZATION IMPROVEMENT CAPITAL PROJECTS FUND
For the year ended June 30, 2011
See independent auditors' report.
-143-
Variance with
Final Budget
Budgeted Amounts
Positive
Original Final
Actual
(Negative)
REVENUES:
Investment income
$ 1,570 $ 1,570
$ 2,780
$ 1,210
FUND BALANCE - BEGINNING OF YEAR
146,158 146,158
146,158
-
FUND BALANCE - END OF YEAR
$ 147,728 $ 147,728
$ 148,938
$ 1,210
See independent auditors' report.
-143-
REVENUES:
Licenses, permits and fees
Investment income
TOTAL REVENUES
EXPENDITURES:
Current:
Public services
CITY OF LAKE ELSINORE, CALIFORNIA
SCHEDULE OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCE - BUDGET AND ACTUAL
TRAFFIC IMPROVEMENTS CAPITAL PROJECTS FUND
For the year ended June 30, 2011
Variance with
Final Budget
Budgeted Amounts Positive
Original Final Actual (Negative)
$ 22,000 $ 22,000 $ 213,570 $ 191,570
35,000 35,000 58,471 23,471
57,000 57,000 272,041 215,041
778 (778)
EXCESS OF REVENUES OVER
(UNDER) EXPENDITURES 57,000 57,000 271,263 214,263
FUND BALANCE - BEGINNING OF YEAR 3,003,430 3,003,430 3,003,430 -
FUND BALANCE - END OF YEAR $ 3,060,430 $ 3,060,430 $ 3,274,693 $ 214,263
See independent auditors' report.
-144-
CITY OF LAKE ELSINORE, CALIFORNIA
SCHEDULE OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCE - BUDGET AND ACTUAL
CITY FIRE PROTECTION CAPITAL PROJECTS FUND
REVENUES:
Licenses, permits and fees
Investment income
TOTAL REVENUES
FUND BALANCE - BEGINNING OF YEAR
FUND BALANCE - END OF YEAR
See independent auditors' report.
For the year ended June 30, 2011
Variance with
Final Budget
Budgeted Amounts Positive
Original Final Actual (Negative)
$ 40,000 $ 40,000 $ 106,919 $ 66,919
13,000 13,000 3,955 (9,045)
53,000 53,000 110,874 57,874
169,281 169,281 169,281 -
$ 222,281 $ 222,281 $ 280,155 $ 57,874
-145-
CITY OF LAKE ELSINORE, CALIFORNIA
SCHEDULE OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCE - BUDGET AND ACTUAL
PUBLIC IMPROVEMENTS CAPITAL PROJECTS FUND
REVENUES:
Licenses, permits and fees
Investment income
TOTAL REVENUES
FUND BALANCE - BEGINNING OF YEAR
FUND BALANCE - END OF YEAR
See independent auditors' report.
For the year ended June 30, 2011
Variance with
Final Budget
Budgeted Amounts Positive
Original Final Actual (Negative)
$ 20,000 $ 20,000 $ 41,519 $ 21,519
6,000 6,000 11,720 5,720
26,000 26,000 53,239 27,239
584,117 584,117 584,117 -
$ 610,117 $ 610,117 $ 637,356 $ 27,239
-146-
CITY OF LAKE ELSINORE, CALIFORNIA
SCHEDULE OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCE - BUDGET AND ACTUAL
REVENUES:
Intergovernmental revenues
EXPENDITURES:
Current:
Public services
Capital outlay
TOTAL EXPENDITURES
EXCESS OF REVENUES OVER
(UNDER) EXPENDITURES
TUMF CAPITAL PROJECTS FUND
For the year ended June 30, 2011
Variance with
Final Budget
Budgeted Amounts Positive
Original Final Actual (Negative)
$ 2,346,860 $ 2,346,860 $ 366,113 $ (1,980,747)
402,792 402,792 137,176 265,616
2,346,860 2,346,860 177,678 2,169,182
2,749,652 2,749,652 314,854 2,434,798
(402,792) (402,792) 51,259 454,051
FUND BALANCE (DEFICIT) -
BEGINNING OF YEAR (154,879) (154,879) (154,879) -
FUND BALANCE (DEFICIT) - END OF YEAR $ (557,671) $ (557,671) $ (103,620) $ 454,051
See independent auditors' report.
-147-
CITY OF LAKE ELSINORE, CALIFORNIA
SCHEDULE OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCE - BUDGET AND ACTUAL
REDEVELOPMENT AGENCY CAPITAL PROJECTS FUND
For the year ended June 30, 2011
REVENUES:
Investment income
Miscellaneous
TOTAL REVENUES
EXPENDITURES:
Current:
Public services
EXCESS OF REVENUES OVER
(UNDER) EXPENDITURES
OTHER FINANCING SOURCES:
Transfers in
NET CHANGE IN FUND BALANCE
FUND BALANCE - BEGINNING OF YEAR
FUND BALANCE - END OF YEAR
See independent auditors' report.
Variance with
Final Budget
Budgeted Amounts Positive
Original Final Actual (Negative)
$ - $ - $ 94 $ 94
300,000 300,000 319,930 19,930
300,000 300,000 320,024 20,024
1,296,605
1,296,605
945,401
351,204
(996,605)
(996,605)
(625,377)
371,228
-
-
925,000
925,000
(996,605)
(996,605)
299,623
1,296,228
1,487,091
1,487,091
1,487,091
-
$ 490,486
$ 490,486
$ 1,786,714
$ 1,296,228
-148-
CITY OF LAKE ELSINORE, CALIFORNIA
SCHEDULE OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCE - BUDGET AND ACTUAL
ENDOWMENT TRUST PERMANENT FUND
For the year ended June 30, 2011
REVENUES:
Investment income
EXPENDITURES:
Current:
Public services
EXCESS OF REVENUES OVER
(UNDER) EXPENDITURES
FUND BALANCE - BEGINNING OF YEAR
FUND BALANCE - END OF YEAR
See independent auditors' report.
Variance with
Final Budget
Budgeted Amounts Positive
Original Final Actual (Negative)
$ 370 $ 370 $ 315 $ (55)
2,100 2,100 5,050 (2,950)
(1,730) (1,730) (4,735)
35,463 35,463 35,463
$ 33,733 $ 33,733 $ 30,728
-149-
(3,005)
$ (3,005)
THIS PAGE INTENTIONALLY LEFT BLANK
-150-
CITY OF LAKE ELSINORE, CALIFORNIA
AGENCY FUNDS
June 30, 2011
Kangaroo Rat - to account for receipts of Kangaroo Rat fees.
Developer Deposit Trust - to account for receipts of deposits paid by developers.
Assessment Districts - to account for receipts of special assessments and taxes that will be used to pay
interest and principal on the bonds.
Lake Maintenance - to account for receipts made by Elsinore Valley Municipal Water District and City
to jointly fund the purchase of water to keep the lake level stabilized.
Destratification Equipment Replacement Fund - to account for receipts made by Elsinore Valley
Municipal Water District, Riverside County and the City to replace equipment for the axial flow pump
destratification system.
- 151 -
CITY OF LAKE ELSINORE, CALIFORNIA
COMBINING STATEMENT OF ASSETS AND LIABILITIES
AGENCY FUNDS
June 30, 2011
LIABILITIES
Accounts payable
Deposits and other liabilities
Due to other governments
Due to bondholders
TOTAL LIABILITIES
$ - $ 1,000 $ 535,948 $ - $ 2,481 $ 539,429
1,621,068 65,000 431,122 144,530 2,261,720
- - 3,199,003 - - 3,199,003
- 38,557,297 - - 38,557,297
$ - $ 1,622,068 $ 42,357,248 $ 431,122 $ 147,011 $ 44,557,449
See independent auditors' report.
-152-
Developer
Destratification
Total
Kangaroo Deposit
Assessment
Lake
Equipment
Agency
Rat Trust
Districts
Maintenance
Replacement
Funds
ASSETS
Cash and investments
$ - $ 1,622,068
$ 2,202,959
$ -
$ 147,011
$ 3,972,038
Cash and investments
with fiscal agents
- -
39,590,510
431,122
-
40,021,632
Accrued interest receivable
- -
723
-
-
723
Due from other governments
- -
563,056
-
-
563,056
TOTAL ASSETS
$ - $ 1,622,068
$ 42,357,248
$ 431,122
$ 147,011
$ 44,557,449
LIABILITIES
Accounts payable
Deposits and other liabilities
Due to other governments
Due to bondholders
TOTAL LIABILITIES
$ - $ 1,000 $ 535,948 $ - $ 2,481 $ 539,429
1,621,068 65,000 431,122 144,530 2,261,720
- - 3,199,003 - - 3,199,003
- 38,557,297 - - 38,557,297
$ - $ 1,622,068 $ 42,357,248 $ 431,122 $ 147,011 $ 44,557,449
See independent auditors' report.
-152-
CITY OF LAKE ELSINORE, CALIFORNIA
COMBINING STATEMENT OF CHANGES IN ASSETS AND LIABILITIES
AGENCY FUNDS
For the year ended June 30, 2011
See independent auditors' report.
-153-
(Continued)
Balance
Balance
July 1,
June 30,
2010
Additions
Deletions
2011
KANGAROO RAT
ASSETS:
Cash and investments
$
4,198
$
-
$
4,198
$
-
LIABILITIES:
Accounts payable
$
4,198
$
-
$
4,198
$
-
DEVELOPER DEPOSIT TRUST
ASSETS:
Cash and investments
$
1,074,831
$
547,237
$
-
$
1,622,068
LIABILITIES:
Accounts payable
$
-
$
1,000
$
-
$
1,000
Deposits and other liabilities
1,074,831
546,237
-
1,621,068
TOTAL LIABILITIES
$
1,074,831
$
547,237
$
-
$
1,622,068
ASSESSMENT DISTRICTS
ASSETS:
Cash and investments
$
2,099,908
$
103,051
$
-
$
2,202,959
Cash and investments with fiscal agents
35,966,337
3,624,173
-
39,590,510
Accounts receivable
24,598
-
24,598
-
Accrued interest receivable
99,095
-
98,372
723
Due from other governments
1,459,262
-
896,206
563,056
TOTAL ASSETS
$
39,649,200
$
3,727,224
$
1,019,176
$
42,357,248
LIABILITIES:
Accounts payable
$
16,373
$
519,575
$
-
$
535,948
Deposits and other liabilities
65,000
-
-
65,000
Due to other governments
4,685,615
-
1,486,612
3,199,003
Due to bondholders
34,882,212
3,675,085
-
38,557,297
TOTAL LIABILITIES
$
39,649,200
$
4,194,660
$
1,486,612
$
42,357,248
See independent auditors' report.
-153-
(Continued)
CITY OF LAKE ELSINORE, CALIFORNIA
COMBINING STATEMENT OF CHANGES IN ASSETS AND LIABILITIES
AGENCY FUNDS
(CONTINUED)
For the year ended June 30, 2011
See independent auditors' report.
-154-
Balance
Balance
July 1,
June 30,
2010
Additions
Deletions
2011
LAKE MAINTENANCE
ASSETS:
Cash and investments with fiscal agents
$
1,731,273
$
-
$
1,300,151
$
431,122
LIABILITIES:
Deposits and other liabilities
$
1,731,273
$
-
$
1,300,151
$
431,122
DESTRATIFICATION EQUIPMENT
REPLACEMENT
ASSETS:
Cash and investments
$
112,425
$
34,586
$
-
$
147,011
LIABILITIES:
Accounts payable
$
289
$
2,192
$
-
$
2,481
Deposits and other liabilities
112,136
32,394
-
144,530
TOTAL LIABILITIES
$
112,425
$
34,586
$
-
$
147,011
TOTAL - ALL AGENCY FUNDS
ASSETS:
Cash and investments
$
3,291,362
$
684,874
$
4,198
$
3,972,038
Cash and investments with fiscal agents
37,697,610
3,624,173
1,300,151
40,021,632
Accounts receivable
24,598
-
24,598
-
Accrued interest receivable
99,095
-
98,372
723
Due from other governments
1,459,262
-
896,206
563,056
TOTAL ASSETS
$
42,571,927
$
4,309,047
$
2,323,525
$
44,557,449
LIABILITIES:
Accounts payable
$
20,860
$
522,767
$
4,198
$
539,429
Deposits and other liabilities
2,983,240
578,631
1,300,151
2,261,720
Due to other governments
4,685,615
-
1,486,612
3,199,003
Due to bondholders
34,882,212
3,675,085
-
38,557,297
TOTAL LIABILITIES
$
42,571,927
$
4,776,483
$
2,790,961
$
44,557,449
See independent auditors' report.
-154-
CAPITAL ASSETS USED IN THE
OPERATION OF GOVERNMENTAL FUNDS
-155-
CITY OF LAKE ELSINORE, CALIFORNIA
CAPITAL ASSETS USED IN OPERATION OF GOVERNMENTAL FUNDS
SCHEDULE BY SOURCE
June 30, 2011
GOVERNMENTAL FUNDS CAPITAL ASSETS:
Land
$ 5,352,814
Building and structures
30,605,938
Improvements other than buildings
8,310,251
Machinery and equipment
3,390,939
Furniture and fixtures
625,898
Automotive
2,009,465
Infrastructure
182,261,982
Construction in progress
2,561,733
TOTAL GOVERNMENTAL FUNDS CAPITAL ASSETS
$ 235,119,020
INVESTMENTS IN GOVERNMENTAL FUNDS CAPITAL ASSETS BY SOURCE:
General Fund
$ 109,173,805
Redevelopment Agency Special Revenue Fund
17,839,207
Supplemental Law Enforcement Service Special Revenue Fund
102,366
L.L.E.B.G. Special Revenue Fund
37,775
Office of Traffic and Safety Special Revenue Fund
672,037
Traffic Offender Special Revenue Fund
149,633
Gas Tax Special Revenue Fund
2,165,416
Transportation Special Revenue Fund
3,238,827
Traffic Safety Special Revenue Fund
5,959
Lighting and Landscaping Special Revenue Fund
57,059
Air Pollution Special Revenue Fund
220,177
C.D.B.G. Special Revenue Fund
1,575,695
Developer Agreement Special Revenue Fund
1,854,215
City Hall /Public Works Special Revenue Fund
152,951
Community Center Special Revenue Fund
7,494
Lakeside Facilities Special Revenue Fund
573,999
Miscellaneous Grants Special Revenue Fund
1,407,828
N.P.D.E.S. Special Revenue Fund
132,736
Assessment Districts Capital Projects Fund
59,706,935
Miscellaneous General Projects Capital Projects Fund
26,705,645
Park Improvement and Development Capital Projects Fund
1,382,968
Street Capital Improvements Projects Fund
231,454
Storm Drain Capital Projects Fund
133
Signalization Improvement Capital Projects Fund
224,718
Traffic Improvements Capital Projects Fund
4,571,000
City Fire Protection Capital Projects Fund
782,902
Public Improvements Capital Projects Fund
393,064
Fire Station Capital Projects Fund
170,990
TUMF Capital Projects Fund
1,582,032
TOTAL INVESTMENTS IN GOVERNMENTAL FUNDS CAPITAL ASSETS BY SOURCE
$ 235,119,020
See independent auditors' report.
-156-
STATISTICAL SECTION
DESCRIPTION OF STATISTICAL SECTION CONTENTS
June 30, 2011
This part of the City of Lake Elsinore'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 say about the government's overall financial
health.
Contents:
Pages
Financial Trends theses schedules contain trend information to help the reader
understand how the City's financial performance and well -being have changed
over time. 158- 167
Revenue Capacity these schedules contain information to help the reader
assess the City's most significant local revenue source, the property tax. 169- 173
Debt Capacity these 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. 174- 180
Demographic and Economic Information these schedules offer demographic
and economic indicators to help the reader understand the environment within
which the City's financial activities take place. 181-182
Operating Information these schedules contain service and infrastructure data
to help the reader understand how the information in the City's financial
report relates to the services the City provides and the activities it performs. 183-186
-157-
Governmental activities:
Invested in capital assets,
net of related debt
Restricted
Unrestricted
Total governmental activities net assets:
CITY OF LAKE ELSINORE
NET ASSETS BY COMPONENT
Last Nine Fiscal Years
(accrual bases of accounting)
Fiscal Year
2003 2004 2005 2006
$ 78,779,255 $ 76,438,068 $ 79,194,299 $ 86,605,543
64,336,191 64,509,263 76,616,021 135,197,478
(111,687,867) (107,107,310) (103,129,508) (93,977,441)
$ 31,427,579 $ 33,840,021 $ 52,680,812 $ 127,825,580
GASB 34 was implemented for the fiscal year ended June 30, 2003.
Information prior to implementation of GASB 34 is not available.
Source: City Finance Department
-158-
Fisal Year
2007 2008 2009 2010 2011
$ 97,369,896 $ 125,539,928 $ 141,550,858 $ 142,968,348 $ 141,427,875
173,307,658 151,937,522 122,099,858 110,984,917 134,777,767
(92,504,071) (96,240,481) (96,792,528) (93,859,128) (110,573,961)
$ 178,173,483 $ 181,236,969 $ 166,858,188 $ 160,094,137 $ 165,631,681
- 159-
CITY OF LAKE ELSINORE
CHANGES IN NET ASSETS
EXPENSES AND PROGRAM REVENUES
Expenses:
Governmental activities:
General government
Public safety
Community development
Public services
Community services
Interest on long -term debt
Total governmental activities expenses
Program revenues:
Governmental activities:
Charges for services:
General government
Public safety
Community development
Public services
Community services
Operating grants and contributions
Capital grants and contributions
Total governmental activities
program revenues
Net revenues (expenses):
Governmental activities
Total net revenues (expenses)
Last Nine Fiscal Years
(accrual basis of accounting)
Fiscal Year
2003 2004 2005 2006
$ 10,884,758
4,602,363
2,146,985
6,165,477
3,819,864
14,205,151
41,824,598
$ 9,938,841
5,707,203
3,534,782
5,833,376
4,008,347
10,935,104
39,957,653
$ 12,208,992
7,375,602
3,083,947
8,404,675
3,994,151
11,077,433
46,144,800
$ 12,700,900
8,369,753
12,009,611
8,739,770
3,519,545
11,146,325
56,485,904
6,474,617
5,874,918
10,081,980
12,199,668
184,242
25,259
39,824
44,919
1,923,284
1,880,802
4,864,686
11,334,631
4,920,172
92,933
70,631
73,260
577,152
1,624,467
1,658,146
1,677,140
387,815
3,807,619
3,586,701
2,600,374
709,009
-
4,332,067
49,777,269
15,176,291
13,305,998
24,634,035
77,707,261
(26,648,307) (26,651,655) (21,510,765) 21,221,357
$ (26,648,307) $ (26,651,655) $ (21,510,765) $ 21,221,357
GASB 34 was implemented for the fiscal year ended June 30, 2003.
Information prior to implementation of GASB 34 is not available.
Source: City Finance Department
-160-
2007
Fiscal Year
2008 2009 2010
2011
$ 10,414,729
$ 8,195,897
$ 10,562,122
$ 10,252,727
$ 11,079,707
11,686,158
14,293,269
13,139,3 89
11,022,531
11,212,605
21,514,552
32,342,175
31,976,146
15,847,532
16,060,065
9,867,133
10,861,673
14,123,738
14,812,199
8,145,956
6,801,741
6,013,006
4,737,856
4,295,719
4,704,242
11,531,570
10,145,830
10,168,917
10,509,806
7,674,342
71,815,883
81,851,850
84,708,168
66,740,514
58,876,917
9,204,517
6,885,167
4,828,438
3,181,706
3,167,346
4,362,650
3,960,353
1,064,036
924,493
1,508,526
1,364,513
1,422,754
1,482,146
1,578,779
1,586,602
5,043,547
4,109,188
6,482,888
4,561,669
3,292,972
42,085,516
2,159,798
-
-
6,573,426
62,060,743
18,537,260
13,857,508
10,246, 647
16,128,872
(9,755,140) (63,314,590) (70,850,660) (56,493,867) (42,748,045)
$ (9,755,140) $ (63,314,590) $ (70,850,660) $ (56,493,867) $ (42,748,045)
-161-
General revenues and other changes
in net assets:
Governmental activities:
Taxes:
Property taxes
Sales taxes
Franchise taxes
Other taxes
Fines, Forfeitures and Penalties
Investment Income
Miscellaneous
Gain on Defeasance of Bonds
Special Item- Revenue from
Forgiveness of Debt
Special Item- Gain on Settlement
of Long -term Debt
Total governmental activities
Changes in net assets
Governmental activities
Total primary government
CITY OF LAKE ELSINORE
CHANGES IN NET ASSETS
GENERAL REVENUES
Last Nine Fiscal Years
(accrual basis of accounting)
Fiscal Year
2003
2004
2005
2006
$ 11,218,220
$ 10,891,618
$ 16,521,561
$ 23,190,099
5,084,099
5,274,927
6,133,299
6,367,466
884,455
996,394
1,138,484
1,473,018
124,292
515,018
731,100
1,093,484
365,803
377,262
427,975
481,065
7,061,692
7,735,043
8,236,698
11,217,026
1,300,198
2,147,938
3,400,243
4,852,432
8,588,374
-
-
-
324,678 - - -
6,724,591 - - -
41,676,402 27,938,200 36,589,360 48,674,590
15,028,095 1,286,545 15,078,595 69,895,947
$ 15,028,095 $ 1,286,545 $ 15,078,595 $ 69,895,947
GASB 34 was implemented for the fiscal year ended June 30, 2003.
Information prior to implementation of GASB 34 is not available.
Source: City Finance Department
-162-
Fiscal Year
Inner inn o )Ann inin i
$ 26,685,369
$ 33,307,785
$ 31,590,868
$ 25,904,948
$ 24,237,023
7,836,334
8,148,355
6,414,419
6,236,748
7,190,695
1,688,010
1,768,178
1,824,890
1,792,699
1,913,807
1,020,788
770,024
751,794
519,001
483,556
599,894
918,619
937,506
733,792
972,457
17,220,975
14,271,312
9,334,141
7,470,635
7,782,639
5,839,608
7,193,803
5,768,257
6,661,239
5,705,412
VV,07V,7 /0 VV,J /O,V /V JV,VG 1,0 /J 4Y,J 17,VVG 40,GOJ,J07
51,135,838 3,063,486 (14,228,785) (7,174,805) 5,537,544
$ 51,135,838 $ 3,063,486 $ (14,228,785) $ (7,174,805) $ 5,537,544
-163-
CITY OF LAKE ELSINORE
FUND BALANCES OF GOVERNMENTAL FUNDS
Last Nine Fiscal Years
(modified accrual basis of accounting)
All other governmental funds:
Reserved
$ 124,515,734
Fiscal Year
$ 126,093,490
$ 185,264,579
Unreserved, reported in:
2003
2004
2005
2006
General fund:
4,894,111
7,686,320
5,010,728
6,382,838
Reserved
$ 10,603,350
$ 9,607,894 $
9,744,980
$ 8,796,782
Unreserved
5,115,310
5,174,923
8,067,151
15,829,308
Total general func
$ 15,718,660
$ 14,782,817 $
17,812,131
$ 24,626,090
All other governmental funds:
Reserved
$ 124,515,734
$ 122,139,124
$ 126,093,490
$ 185,264,579
Unreserved, reported in:
Special revenue funds
4,894,111
7,686,320
5,010,728
6,382,838
Debt service funds
(3,523,760)
(8,665,854)
(7,503,643)
(11,915,554)
Capital projects funds
(5,395,439)
(50,687)
7,608,315
9,141,046
Total all other governmental fund;
$ 120,490,646
$ 121,108,903
$ 131,208,890
$ 188,872,909
General fund:
Nonspendable $ - $ - $ - $ -
Unassigned - - - -
Total general func $ - $ - $ - $ -
All other governmental funds:
Nonspendable -
Restricted for:
Debt service - - - -
Capital projects - - - -
Other - - - -
Assigned to:
Capital projects funds - - - -
Unassigned in:
Special revenue funds - - - -
Debt service funds - - - -
Capital projects funds - - - -
Total all other governmental fund; $ - $ - $ - $ -
Note: GASB 54 was implemented in 2011, prior years have no comparable data.
The City of Lake Elsinore has elected to show only nine years of data for this schedule.
Source: City Finance Department
-164-
Fiscal Year
2007 2008 2009 2010 2011
$
9,936,859
$
9,476,355
$
8,580,684
$
8,593,518
$ -
10,496,356
9,285,492
8,762,248
6,323,801
-
$
20,433,215
$
18,761,847
$
17,342,932
$
14,917,319
$ -
$
215,008,475
$
188,270,868
$
163,563,859
$
161,473,544
$ -
7,921,415
10,731,428
5,241,416
6,999,090
-
(10,006,673)
(5,375,005)
(3,841,954)
(28,305,645)
-
13,041,510
8,824,274
2,966,273
5,497,137
-
$
225,964,727
$
202,451,565
$
167,929,594
$
145,664,126
$ -
$
-
$
-
$
-
$
-
$ 4,027,179
-
-
-
-
10,788,602
$
-
$
-
$
-
$
-
$ 14,815,781
$ 84,348,929
- - - - 81,289,209
- - - 9,352,394
- - - - 14,639,940
- - - - 11,255,852
- - - - (214,942)
- - - - (32,948,107)
- - - - (4,899,269)
$ 162,824,006
-165-
CITY OF LAKE ELSINORE
CHANGES IN FUND BALANCES OF GOVERNMENTAL FUNDS
Last Nine Fiscal Years
(modified accrual basis of accounting)
The City of Lake Elsinore has elected to show only nine years of data for this schedul
Source: City Finance Department
-166-
Fiscal Year
2003
2004
2005
2006
Revenues:
Property taxes
$ 10,960,120
$ 10,891,618 $
16,521,561
$ 23,190,099
Other taxes
6,350,946
6,786,339
7,192,270
9,265,130
Licenses, permits and fees
4,784,007
4,888,957
9,133,887
18,047,742
Intergovernmental revenue:
4,685,876
3,807,619
3,586,701
2,600,374
Charges for services
3,082,673
3,113,391
6,019,081
5,712,480
Fines, forfeitures and penalties
365,803
377,262
427,975
481,065
Investment income
7,350,982
7,793,901
8,302,080
11,290,353
Special assessments
1,379,409
1,496,031
1,562,300
1,569,396
Contributions from property owner:
-
-
-
49,777,269
Miscellaneous
3,338,771
2,147,938
3,400,242
4,852,433
Total revenues
42,298,587
41,303,056
56,146,097
126,786,341
Expenditures
Current:
General governmern
5,514,205
3,993,019
6,673,543
5,319,941
Public safety
4,527,765
5,650,526
7,375,602
8,369,753
Community developmen
2,146,985
3,469,142
3,083,947
5,853,938
Public services
4,837,013
4,465,356
7,067,549
7,385,171
Community services
3,138,577
3,310,108
3,306,649
2,823,109
Pass - through payments
2,801,592
3,033,654
3,957,978
5,671,146
Set aside suspension
-
-
-
-
SERAF payments
-
-
-
-
Capital outlay
2,228,982
2,649,498
2,055,243
17,094,933
Debt service:
Payment to refunding bond escrow agen
-
-
-
-
Bond issuance costs
-
-
-
-
Principal retirement
2,786,033
3,853,166
3,828,484
4,023,167
Interest and fiscal charges
10,678,462
11,254,303
11,008,078
11,097,091
Debt issuance costs
2,484,161
3,500
-
-
Total expenditures
41,143,775
41,682,272
48,357,073
67,638,249
Excess (deficiency) of revenue
over (under) expenditure:
1,154,812
(379,216)
7,789,024
59,148,092
Other financing sources (uses)
Transfers in
501,913
26,486,109
5,423,965
1,823,891
Transfers out
(501,913)
(26,486,109)
(5,423,965)
(1,823,891)
Settlement
(1,250,000)
-
-
-
Contribution to RDA
(1,947,000)
-
-
-
Proceeds of refunding bond:
31,570,000
-
-
-
Debt issuance
-
-
391,811
81,065
Loans issued
-
-
-
-
Loan payments
-
-
-
-
Premium on bonds
-
-
-
-
Bond discount
-
-
-
-
Refunding and tax allocation bonds issues
-
-
-
-
Capital debt issued
-
-
-
-
Payment to refunded bond escrow agen
(31,666,626)
-
-
-
Total other financing sources (uses
(3,293,626)
-
391,811
81,065
Net change in fund balances
$ (2,138,814)
$ (379,216) $
8,180,835
$ 59,229,157
Debt service as a percentage of
noncapital expenditures
41.0%
38.7%
32.0%
29.9%
The City of Lake Elsinore has elected to show only nine years of data for this schedul
Source: City Finance Department
-166-
Fiscal Year
2007
2008
2009
2010
2011
$ 26,685,369
$ 33,307,785
$ 31,590,868
$ 25,429,344
$ 24,443,046
10,503,108
10,741,363
9,071,246
8,517,826
9,557,873
7,775,477
6,266,086
2,267,568
2,587,918
3,291,938
2,700,185
4,109,188
3,630,144
7,322,908
4,680,095
5,791,690
4,579,433
3,548,413
1,594,774
1,383,934
599,894
918,619
937,506
733,792
972,457
17,268,845
14,237,891
9,445,099
7,928,611
7,147,497
1,364,513
1,422,754
1,482,146
1,578,779
1,586,602
42,085,516
2,159,798
-
-
5,352,614
5,839,608
7,193,803
5,768,257
6,910,516
5,608,837
120,614,205
84,936,720
67,741,247
62,604,468
64,024,893
8,548,606
6,190,346
6,479,795
6,797,320
8,904,165
11,686,158
14,293,269
13,139,3 89
11,022,531
11,212,605
3,481,278
4,549,297
4,662,003
3,049,501
18,805,484
8,431,702
9,321,939
12,202,971
12,901,064
6,221,286
6,063,747
5,221,331
3,750,267
3,313,082
3,714,646
7,006,699
9,878,294
9,647,322
7,782,513
7,655,170
-
-
-
3,750,000
-
-
-
-
6,976,853
1,436,411
25,236,661
49,056,332
38,113,875
4,394,834
2,931,038
-
-
-
1,987,745
1,832,080
-
1,213,789
-
1,584,965
1,874,527
4,979,674
3,872,984
5,469,538
6,037,770
6,928,822
11,492,802
10,132,679
10,066,977
10,318,720
9,046,095
86,927,327
113,730,260
103,532,137
79,916,898
80,562,329
33,686,878
(28,793,540)
(35,790,890)
(17,312,430)
(16,537,436)
7,089,415
6,412,891
4,386,162
4,500,694
6,186,205
(7,089,415)
(6,412,891)
(4,386,162)
(4,500,694)
(6,186,205)
-
-
-
26,290,000
47,780,000
-
-
-
(23,235,000)
(27,495,000)
-
274,026
-
-
-
(3,117)
-
(166,785)
(621,302)
-
22,295,000
-
26,290,000
39,595,000
-
3,265,000
-
-
-
-
(22,221,899)
-
(22,082,648)
(25,662,920)
-
3.609.010
-
7.095.567
33.595.778
$ 33,686,878 $ (25,184,530) $ (35,790,890) $ (10,216,863) $ 17,058,342
26.7% 23.5% 23.7% 26.0% 25.0%
-167-
THIS PAGE INTENTIONALLY LEFT BLANK
.:
CITY OF LAKE ELSINORE
DIRECT AND OVERLAPPING PROPERTY TAX RATES
Last Ten Fiscal Years
(rate per $100 of taxable value)
Fiscal Year
Agency
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
High School
City Basic Levy'
1.00000
1.00000
1.00000
1.00000
1.00000
1.00000
1.00000
1.00000
1.00000
1.00000
East Municipal
Overlappingz
Water
0.00000
0.00000
0.00000
0.00000
0.00000
0.00000
0.00000
0.00000
0.00000
0.00000
Menifee School
1.02418
1.04287
1.03397
1.04305
1.04270
1.06108
1.07725
1.08855
1.08915
City's Share of 1%
District
0.00000
0.00000
0.02117
0.01625
0.01435
0.00578
0.00549
0.02370
0.03254
0.03436
Metropolitan
0.17415
0.17415
0.17415
0.17415
0.17415
0.17415
0.17415
0.17415
0.17415
General Obligation
Water District
0.00770
0.00670
0.00610
0.00580
0.00520
0.00470
0.00450
0.00430
0.00430
0.00370
Perris School
District 0.00000 0.00000 0.00000 0.00000 0.00000 0.00000 0.02999 0.02894 0.02485 0.01983
Perris Union
High School
0.01696
0.01748
0.0156
0.01192
0.0235
0.03222
0.0211
0.02031
0.02686
0.03126
Total Direct and
Overlappingz
Tax Rates
1.02466
1.02418
1.04287
1.03397
1.04305
1.04270
1.06108
1.07725
1.08855
1.08915
City's Share of 1%
Levy Per Prop 133
0.17415
0.17415
0.17415
0.17415
0.17415
0.17415
0.17415
0.17415
0.17415
0.17415
General Obligation
Debt Rate:
RDA basic rate
1.00770
1.00670
1.00610
1.00580
1.00520
1.00470
1.00450
1.00430
1.00430
1.00370
Total Direct Rates 0.63574 0.63470 0.61268 0.58827 0.57653 0.53996 0.51615 0.51762 0.53493 0.53269
Notes:
'In 1978, the voters of the State of California passed Proposition 13 which set the property tax rate at a 1.00% fixed amount. This 1.00% is
shared by all taxing agencies for which the subject property resides within. In addition to the 1.00% fixed amount, property owners are
charged taxes as a percentage of assessed property values for the payment of any voter approved bonds.
2Overlapping rates are those of local and county governments that apply to property owners within the City. Not all overlapping rates
apply to all city property owners.
3City's Share of 1% Levy is based on the City's share of the general fund tax rate area with the largest net taxable value within the city.
ERAF general fund tax shifts may not be included in tax ratio figures.
4Redevelopment Agency (RDA) rate is based on the largest RDA tax rate area (TRA) and includes only rate(s) from indebtedness
adopted prior to 1989 per California State statute. RDA direct and overlapping rates are applied only to the incremental property values
5Total Direct Rate is the weighted average of all individual direct rates applied by the government preparing the statistical section
information.
Source: Riverside County Assessor 2001/02 - 2010/11 Tax Rate Table and Annual Tax Increment Tables
-169-
CITY OF LAKE ELSINORE
PRINCIPAL PROPERTY TAX PAYERS
Current Year and Nine Years Ago
(1) 2010 -11 Local Secured Assessed Valuation: $ 3,928,751,948
(2) 2001 -02 Local Secured Assessed Valuation: $ 1,551,637,303
Source: Riverside County Assessor 2001/02 - 2010/11 Combined Tax Rolls.
-170-
2011
2002
Percent of
Percent of
Total City
Total City
Taxable
Taxable
Taxable
Taxable
Assessed
Assessed
Assessed
Assessed
Taxpayer
Value
Value (1)
Value
Value (2)
100 East Wisconsin Avenue JV
$ 50,489,413
1.29%
-
0.00%
Castle and Cooke, Lake Elsinore Outlet
43,437,742
1.11%
-
0.00%
Pacific Aggregates, Inc.
42,463,999
1.08%
-
0.00%
Castle and Cooke, Lake Elsinore West
38,144,168
0.97%
-
0.00%
Broadstone Rivers Edge
28,042,552
0.71%
-
0.00%
JPMCC2006 -LDP6 Lake Elsinore
24,847,661
0.63%
-
0.00%
Pacific Clay Products Inc.
19,525,386
0.50%
-
0.00%
McMillin Summerly LLC
18,368,067
0.47%
-
0.00%
Federal National Mortage Association
17,159,617
0.44%
-
0.00%
Centex Homes
17,084,122
0.43%
-
0.00%
MCG Outlet Centers LP
-
0.00%
$ 74,822,360
4.82%
King Vedeocable Company
-
0.00%
22,401,043
1.44%
Elsinore Val Water and Sewer Facilities Corp.
-
0.00%
14,351,086
0.92%
Wares Delaware Corporation
-
0.00%
13,499,835
0.87%
Oak Grove Equities
-
0.00%
11,668,023
0.75%
Pardee Grossman Cottonwood Canyon
-
0.00%
11,561,291
0.75%
Albertson's
-
0.00%
11,017,263
0.71%
Louis F. DePasquale
-
0.00%
8,435,953
0.54%
White Rock Acquisition Company
-
0.00%
8,127,723
0.52%
Railroad Canyon Lake Elsinore
-
0.00%
7,598,333
0.49%
$ 299,562,727
7.62%
$ 183,482,910
11.83%
(1) 2010 -11 Local Secured Assessed Valuation: $ 3,928,751,948
(2) 2001 -02 Local Secured Assessed Valuation: $ 1,551,637,303
Source: Riverside County Assessor 2001/02 - 2010/11 Combined Tax Rolls.
-170-
CITY OF LAKE ELSINORE
PROPERTY TAX LEVIES AND COLLECTIONS
Last Ten Fiscal Years
Note:
The amounts presented include City of Lake Elsinore property taxes only (excludes Redevelopment Agency taxes).
(1) Collections received through March 1, 2011.
Sources: County of Riverside, Auditor - Controller
City of Lake Elsinore Finance Department
-171-
Collected within the
Fiscal
Taxes Levied
Fiscal Year of Levy
Collections in
Total Collections to Date
Year Ended
for the
Percent
Subsequent
Percent
June 30
Fiscal Year
Amount
of Levy
Years
Amount
of Levy
2002
$ 1,006,982
$ 1,027,863
102.07%
$ 10,373
$ 1,038,236
103.10%
2003
1,035,888
1,193,908
115.25%
12,436
1,206,344
116.46%
2004
1,091,168
1,129,675
103.53%
99,982
1,229,657
112.69%
2005
1,327,699
1,405,509
105.86%
313,819
1,719,328
129.50%
2006
1,446,320
1,742,413
120.47%
227,007
1,969,420
136.17%
2007
1,714,890
2,131,576
124.30%
212,538
2,344,114
136.69%
2008
2,208,181
2,313,581
104.77%
149,942
2,463,523
111.56%
2009
2,230,658
2,254,961
101.09%
74,601
2,329,562
104.43%
2010
1,894,552
1,958,553
103.38%
138,415 (1)
2,096,968
110.68%
2011
1,900,256
1,797,763
94.61%
82,035
1,879,798
98.92%
Note:
The amounts presented include City of Lake Elsinore property taxes only (excludes Redevelopment Agency taxes).
(1) Collections received through March 1, 2011.
Sources: County of Riverside, Auditor - Controller
City of Lake Elsinore Finance Department
-171-
CITY OF LAKE ELSINORE
ASSESSED VALUE AND ESTIMATED ACTUAL VALUE
OF TAXABLE PROPERTY
Last Ten Fiscal Years
Notes:
Exemptions are netted directly against the individual property categories.
n/a =not available
In 1978 the voters of the State of California passed Proposition 13 which limited property taxes to a total maximum rate of I%
based upon the assessed value of the property being taxed. Each year, the assessed value of property may be increased by
an "inflation factor" (limited to a maximum increase of 2 %). With few exceptions, property is only reassessed at the time that
it is sold to a new owner. At that point, the new assessed value is reassessed at the purchase price of the property sold.
The assessed valuation data shown above represents the only data currently available with respect to the actual market
value of taxable property and is subject to the limitations described above.
Source: Riverside County Auditor- Controller 2001/02 - 2010/11 Combined Tax Rolls
-172-
City
Fiscal Year
Taxable
Ended
Assessed
June 30
Secured
Unsecured
Value
2002
$ 1,480,961,595
$ 70,675,708
$ 1,551,637,303
2003
158,974,975
63,785,234
222,760,209
2004
1,866,612,714
71,494,000
1,93 8,106,714
2005
2,182,647,610
93,461,511
2,276,109,121
2006
2,782,774,310
88,651,279
2,871,425,589
2007
3,586,255,450
84,367,728
3,670,623,178
2008
4,805,775,656
119,981,392
4,925,757,048
2009
4,813,256,755
114,151,249
4,927,408,004
2010
3,957,220,879
104,899,011
4,062,119,890
2011
3,780,321,503
148,430,445
3,928,751,948
Notes:
Exemptions are netted directly against the individual property categories.
n/a =not available
In 1978 the voters of the State of California passed Proposition 13 which limited property taxes to a total maximum rate of I%
based upon the assessed value of the property being taxed. Each year, the assessed value of property may be increased by
an "inflation factor" (limited to a maximum increase of 2 %). With few exceptions, property is only reassessed at the time that
it is sold to a new owner. At that point, the new assessed value is reassessed at the purchase price of the property sold.
The assessed valuation data shown above represents the only data currently available with respect to the actual market
value of taxable property and is subject to the limitations described above.
Source: Riverside County Auditor- Controller 2001/02 - 2010/11 Combined Tax Rolls
-172-
-173-
Redevelopment Agency
Taxable
Total
Assessed
Direct Tax
Secured
Unsecured
Value
Rate
n/a
n/a
n/a
0.63574%
1,061,846,886
61,221,639
1,123,068,525
0.63470%
n/a
n/a
n/a
0.61268%
1,309,466,152
88,347,530
1,397,813,682
0.58827%
1,614,383,654
82,665,786
1,697,049,440
0.57653%
1,917,886,856
79,195,924
1,997,082,780
0.53996%
2,393,710,398
100,647,142
2,494,357,540
0.51615%
2,411,198,603
91,268,375
2,502,466,978
0.51762%
2,077,411,999
83,367,167
2,160,779,166
0.53493%
1,998,889,644
79,994,003
2,078,883,647
0.53269%
-173-
CITY OF LAKE ELSINORE
RATIOS OF OUTSTANDING DEBT BY TYPE
Last Ten Fiscal Years
Governmental Activities
Fiscal Year Local Tax Subordinate
Ended Agency Allocation Tax
June 30 Revenue Bonds Bonds Bonds
2002
$ 69,610,000
$ 60,220,000 $
2003
60,375,000
59,290,000
2004
59,315,000
58,310,000
2005
58,285,000
57,320,000
2006
57,160,000
56,280,000
2007
55,845,000
55,175,000
2008
58,755,000
54,010,000
2009
56,745,000
52,785,000
2010
53,725,000
54,545,000
2011
64,220,000
60,080,000
Revenue/ Developer/
Revenue Refunding Owner
Bonds Agreements
- $ 15,660,000
$ 4,819,657
- 15,660,000
3,098,473
- 15,660,000
2,704,814
- 15,375,000
4,718,010
- 15,075,000
4,396,460
- 14,760,000
3,933,650
- 14,435,000
3,635,257
- 14,095,000
3,441,041
- 13,740,000
3,263,574
4,610,000 13,365,000
3,070,763
Notes: Details regarding the City's outstanding debt can be found in the notes to the financial statements.
Source: City Finance Department; California State Department of Finance
-174-
-175-
Governmental Activities (Continued)
Insurance
Total
Percentage
Debt
Notes/ Loans
Capitalized
Premium
OPEB
Governmental
of Personal
per
Payable
Lease
Deposit Payable
Obligation
Activities
Income
Capita
$ 8,787,427
$ 44,682
$ -
$ -
$ 159,141,766
31.81%
5,300
1,710,407
28,185
-
-
140,162,065
26.82%
4,489
1,270,901
57,992
-
-
137,318,707
23.85%
4,109
1,055,676
306,398
-
-
137,060,084
20.93%
3,817
1,012,501
234,021
-
-
134,157,982
18.28%
3,513
403,126
166,532
-
-
130,283,308
15.30%
3,165
356,589
93,478
-
-
131,285,324
12.75%
2,760
307,542
20,316
537,869
1,048,397
128,980,165
11.90%
2,604
256,760
-
518,521
2,086,786
128,135,641
12.03%
2,546
204,046
-
-
2,877,575
148,427,384
15.08 %
2,911
-175-
CITY OF LAKE ELSINORE
RATIO OF GENERAL BONDED DEBT OUTSTANDING
Last Ten Fiscal Years
General bonded debt is debt payable with governmental fund resources and general obligation
bonds recorded in enterprise funds (of which, the City has none).
Source: City Finance Department
-176-
Outstanding General Bonded Debt
Fiscal Year
Tax
Percent of
Ended
Allocation
Assessed
Per
June 30
Bonds
Total
Value
Capita
2002
$ 60,220,000
$ 60,220,000
3.88%
$ 2,006
2003
59,290,000
59,290,000
26.62%
1,899
2004
58,310,000
58,310,000
3.01%
1,745
2005
57,320,000
57,320,000
2.52%
1,596
2006
56,280,000
56,280,000
1.96%
1,474
2007
55,175,000
55,175,000
1.50%
1,340
2008
54,010,000
54,010,000
1.10%
1,135
2009
52,785,000
52,785,000
1.07%
1,066
2010
54,545,000
54,545,000
1.34%
1,084
2011
60,080,000
60,080,000
1.53%
1,178
General bonded debt is debt payable with governmental fund resources and general obligation
bonds recorded in enterprise funds (of which, the City has none).
Source: City Finance Department
-176-
CITY OF LAKE ELSINORE
DIRECT AND OVERLAPPING DEBT
June 30, 2011
City Assessed Valuation
Redevelopment Agency Incremental Valuation
Total Assessed Valuatioi
Overlapping Tax and Assessment Debt:
Riverside County Flood Control District, Zone No. 3 Benefit Assessment District
Metropolitan Water District
Perris Union High School District
Menifee Union School District
Perris School District
Lake Elsinore Unified School District Community Facilities Districts
City of Lake Elsinore Community Facilities District No. 88 -3
City of Lake Elsinore Community Facilities District No. 90 -2
City of Lake Elsinore Community Facilities District No. 95 -1
City of Lake Elsinore Community Facilities District No. 98 -1
City of Lake Elsinore Community Facilities District No. 2003 -2
City of Lake Elsinore Community Facilities District No. 2004 -3
City of Lake Elsinore Community Facilities District No. 2005 -1
City of Lake Elsinore Community Facilities District No. 2005 -2
City of Lake Elsinore Community Facilities District No. 2005 -5
City of Lake Elsinore Community Facilities District No. 2005 -6
City of Lake Elsinore Community Facilities District No. 2006 -2
City of Lake Elsinore 1915 Act Bonds
Total overlapping tax and assessment debt
Direct and Overlapping General Fund Debt:
Riverside County General Fund Obligations
Riverside County Pension Obligations
Riverside County Board of Education Certificates of Participation
Mount San Jacinto Community College District General Fund Obligations
Lake Elsinore Unified School District Certificates of Participation
Perris Union High School District General Fund Obligations
Menifee and Perris School District Certificates of Participation
City of Lake Elsinore General Fund Obligations
Elsinore Water District Certificates of Participation
Ortega Trail Recreation and Park District Certificates of Participation
Total gross direct and overlapping general fund debt
Less: Riverside County General Fund self - supporting obligations
Total net direct and overlapping general fund debt
Gross combined total debt(2)
Net total direct and overlapping debt
$ 232,694,466
1.473%
$ 4,052,357,508
10,261,431
1.473%
(1,897,539,942)
5,405,100
1.473%
$ 2,154,817,566
90,884
3.904%
12,215,000
City's
30.086%
38,300,000
Share of
Percentage
Outstanding
Overlapping
Applicable (1)
Debt 6/30/11
Debt 6/30/11
47.115%
$ 2,685,000
$ 1,265,038
0.103%
227,670,000
234,500
0.785%
54,717,260
429,530
1.165%
45,108,922
525,519
0.400%
7,454,571
29,818
100.000%
24,631,327
24,631,327
100.000%
27,440,000
27,440,000
100.000%
14,885,000
14,885,000
100.000%
1,205,000
1,205,000
100.000%
17,535,000
17,535,000
100.000%
32,180,000
32,180,000
100.000%
45,525,000
45,525,000
100.000%
8,880,000
8,880,000
100.000%
24,480,000
24,480,000
100.000%
3,265,000
3,265,000
100.000%
3,495,000
3,495,000
100.000%
7,225,000
7,225,000
100.000%
19,463,734
19,463,734
$ 232,694,466
1.473%
696,634,853
10,261,431
1.473%
366,945,000
5,405,100
1.473%
6,170,000
90,884
3.904%
12,215,000
476,874
30.086%
38,300,000
11,522,938
0.785%
31,575,000
247,864
1.165 & 0.400 %
14,840,000
107,402
100.000%
13,365,000
13,365,000
48.140%
235,144
113,198
36.523%
145,000
52,958
41,643,649
203,321
41,440,328
Notes:
(1) For debt repaid with property taxes, the percentage of overlapping debt applicable is estimated using taxable assessed
property 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) Excludes tax and revenue anticipation notes, enterprise revenue, mortgage revenue and tax allocation bonds and
non - bonded capital lease obligations.
Overlapping governments are those that coincide, at least in part, with the geographic boundaries of the City. This
schedule estimates the portion of the outstanding debt of those overlapping governments that is borne by the residents
and businesses of the City. This process recognizes that, when considering the City's ability to issue and repay
long -term debt, the entire debt burden borne by the residents and businesses should be taken into account. However,
this does not imply that every taxpayer is a resident, and therefore responsible for repaying the debt, of each overlapping
government.
Source: California Municipal Statistics
-177-
$ 274,338,115
$ 274,134,794
Assessed valuation
Conversion percentage
Adjusted assessed valuation
Debt limit percentage
Debt limit
Total net debt applicable to limitation
Legal debt margin
Total debt applicable to the limit
as a percentage of debt limit
CITY OF LAKE ELSINORE
LEGAL DEBT MARGIN INFORMATION
Last Ten Fiscal Years
2002
$ 1,525,792,000
25%
381,448,000
15%
57,217,200
Fiscal Year
2003
$ 1,626,026,872
25%
406,506,718
15%
60,976,008
2004
$ 1,907,367,963
25%
476,841,991
15%
71,526,299
2005
$ 2,243,178,491
25%
560,794,623
15%
84,119,193
$ 57,217,200 $ 60,976,008 $ 71,526,299 $ 84,119,193
0.0% 0.0% 0.0% 0.0%
The Government Code of the State of California provides for a legal debt limit of 15% of gross assessed
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 that was in effect at the time that the legal debt margin
was enacted by the State of California for local governments located within the state.
Sources: Riverside County Assessor's Office
City Finance Department
-178-
2006
$ 2,851,510,537
25%
712,877,634
15%
106,931,645
2007
$ 3,648,621,060
25%
912,155,265
15%
136,823,290
Fiscal Year
2008
$ 4,887,272,022
25%
1,221,818,006
15%
183,272,701
2009
$ 4,886,177,664
25%
1,221,544,416
15%
183,231,662
2010
$ 4,019,961,300
25%
1,004,990,325
15%
150,748,549
2011
$ 4,062,119,890
25%
1,015,529,973
15%
152,329,496
$ 106,931,645 $ 136,823,290 $ 183,272,701 $ 183,231,662 $ 150,748,549 $ 152,329,496
0.0% 0.0% 0.0%
- 179-
0.0% 0.0% 0.0 %,
Fiscal Year
Ended
June 30
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
Redevelopment
Tax Increment
Revenue
8,400,465
9,824,602
9,749,507
13,136,081
18,500,277
21,112,545
26,484,367
24,892,412
19,877,054
19,004,495
CITY OF LAKE ELSINORE
PLEDGED - REVENUE COVERAGE
Last Ten Fiscal Years
Debt Service
Principal
Interest
$ 1,365,504
$ 3,663,230
1,377,603
3,992,473
1,413,940
3,635,594
1,300,793
3,629,620
1,932,704
3,888,298
2,307,832
4,108,847
1,688,978
3,663,448
1,761,323
3,558,405
1,295,000
3,304,802
1,195,000
2,315,314
Coverage
1.67
1.83
1.93
2.66
3.18
3.29
4.95
4.68
4.32
5.41
Tax
Allocation
Bonds
$ 60,220,000
59,290,000
58,310,000
57,320,000
56,280,000
55,175,000
54,010,000
52,785,000
54,545,000
60,080,000
Notes: Details regarding the City's outstanding debt can be found in the notes to the basic financial statements.
Source: City Finance Department
_180-
CITY OF LAKE ELSINORE
DEMOGRAPHIC AND ECONOMIC STATISTICS
Last Ten Fiscal Years
Sources:
(1) State Department of Finance
(2, 3 *) Income Data: ESRI - Demographic Estimates are based on the last available Census. Projections
are developed by incorporating all of the prior census dta relased to date. Post census trends in
the population are extracted from a variety of data sources.
(4) California State Employment Development Department
-181-
Personal
Per
Fiscal Year
Income
Capita
Unemployment
Ended
Population
(In Thousands
Personal
Rate
June 30
(1)
(2)
Income (3) *
(4)
2002
30,027
$ 500,294
$ 16,661
5.30%
2003
31,225
522,538
16,735
6.30%
2004
33,423
575,658
17,223
6.30%
2005
35,905
654,965
18,242
5.80%
2006
38,185
734,050
19,224
5.20%
2007
41,164
851,375
20,683
4.90%
2008
47,567
1,029,928
21,652
5.80%
2009
49,528
1,083,488
21,876
8.20%
2010
50,324
1,065,544
21,174
13.20%
2011
50,983
984,074
19,302
14.30%
Sources:
(1) State Department of Finance
(2, 3 *) Income Data: ESRI - Demographic Estimates are based on the last available Census. Projections
are developed by incorporating all of the prior census dta relased to date. Post census trends in
the population are extracted from a variety of data sources.
(4) California State Employment Development Department
-181-
CITY OF LAKE ELSINORE
PRINCIPAL EMPLOYERS
Current Year and Nine Years Ago
2011 2002
"Total Employment" as used above represents the total employment of all employers located within City limits.
Sources: City GIS Department
California Employment Development Department
- 182-
Percent of
Percent of
Number of
Total
Number of
Total
Employer
Employees
Employment
Employees
Employment
Lake Elsinore Unified School Distrct
1,526
9.13%
-
0.00%
Outlet Center
1,169
7.00%
-
0.00%
Stater Bros. (3 stores today)
305
1.83%
127
1.27%
Walmart
245
1.47%
245
2.45%
Costco
201
1.20%
-
0.00%
Lake Elsinore Storm/Golden State Concession
200
1.20%
165
1.65%
Medley Communications
175
1.05%
-
0.00%
Shirt WERX / Innovative Merchandising
160
0.96%
-
0.00%
E. V. M. W. D.
170
1.02%
-
0.00%
Home Depot
160
0.96%
-
0.00%
Riverside Public Social Services
160
0.96%
-
0.00%
Target
150
0.90%
-
0.00%
Lake Elsinore Hotel & Casino
150
0.90%
200
2.00%
Lake Chevrolet
116
0.69%
104
1.04%
Lowe's
106
0.63%
-
0.00%
"Total Employment" as used above represents the total employment of all employers located within City limits.
Sources: City GIS Department
California Employment Development Department
- 182-
CITY OF LAKE ELSINORE
FULL -TIME AND PART -TIME CITY EMPLOYEES
BY FUNCTION
Last Ten Fiscal Years
Note: Police and Fire services are provided by the County of Riverside.
Source: City Finance Department
-183-
Fiscal Year
Function
2002
2003
2004
2005
2006 2007
2008
2009
2010
2011
General government
18
17
19
18
21 26
26
20
20
17
Community Services
( includes Public works)
36
34
37
36
41 52
52
41
42
47
Community development
17
17
18
17
20 23
23
21
14
11
Total
71
68
74
71
82 101
101
82
76
75
Note: Police and Fire services are provided by the County of Riverside.
Source: City Finance Department
-183-
CITY OF LAKE ELSINORE
OPERATING INDICATORS
BY FUNCTION
Last Ten Fiscal Years
Function
Police:
Lake related boating enforcement citations
Hazardous traffic violations
DUI arrests
Fire:
Calls
Fire suppression equipment
Public works:
Centerline miles of paved surface streets maintained
Centerline miles of dirt surface streets maintained
Weed abatement -lots cleaned
Community Development:
Construction permits issued
Property value per permits (estimated in 000's)
New home building permits issued
Parks and recreation:
Daily lake use passes sold
n/a--not available
Source: City of Lake Elsinore, Various Departments
-184-
Fiscal Year
2002
2003
2004
2005
1,048
1,091
800
703
597
519
1,533
1,500
n/a
n/a
n/a
n/a
n/a
n/a
3,120
3,391
n/a
n/a
3
3
129
135
140
140
n/a
21
21
21
890
860
890
552
1,549
1,838
2,361
3,516
$ 126,600
$ 159,346
$ 153,186
$ 242,988
844
550
766
1,317
35,700 26,550 28,500 26,530
Fiscal Year
2006
2007
2008
2009
2010
2011
808
625
100
n/a
444
244
2,376
2,500
5,000
n/a
1,561
1,200
n/a
n/a
n/a
n/a
261
n/a
3,610
3,567
3,778
3,876
4,007
3,950
3
3
3
3
3
3
140
143
155
174
173
173
13
12
10
9
9
9
706
700
581
390
365
470
4,260
2,527
1,604
505
771
829
$ 462,204
$ 153,013
$ 78,680
$ 21,474
$ 42,848
$ 50,899
1,355
450
74
43
211
223
34,835 32,018 36,000 25,230 23,765 19,577
-185-
CITY OF LAKE ELSINORE
CAPITAL ASSET STATISTICS
BY FUNCTION
Last Ten Fiscal Years
Fiscal Year
Function
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
Police:
Stations
1
1
1
1
1
1
1
1
1
1
Fire:
Fire stations
1
2
2
3
3
3
3
3
3
3
Public works:
Street (miles)
153.3
153.3
153.3
153.3
156
157
157
157
157
157
Lakeshore (miles)
10.5
10.5
10.5
10.5
10.5
10.5
10.5
10.5
10.5
10.5
Parks and recreation:
Parks
12
12
12
12
12
15
15
15
16
16
Beaches and Recreation
Facilities
n/a
8
8
8
8
8
8
8
10
10
Libraries
1
1
1
2
2
2
2
2
2
2
Stadium (Amphitheater
seats)
6,600
6,600
6,600
6,600
6,600
6,600
6,600
6,600
6,600
6,600
Lake (surface acres)
3,300
3,300
3,300
3,300
3,300
3,300
3,300
3,300
3,300
3,300
n/a =not available
Source: City of Lake Elsinore, Various Departments
-186-
To the Honorable Mayor and
Members of the City Council
of the City of Lake Elsinore
Lake Elsinore, California
We have audited the financial statements of the governmental activities, each major fund, and the
aggregate remaining fund information of the City of Lake Elsinore for the year ended June 30, 2011.
Professional standards require that we provide you with information about our responsibilities under
generally accepted auditing standards, as well as certain information related to the planned scope and
timing of our audit. We have communicated such information in our engagement letter dated
April 7, 2011 and during our meeting on planning matters May 27, 2011. Professional standards also
require that we communicate to you the following information related to our audit.
Significant Audit Findings:
Qualitative Aspects ofAAccuunting Practices
Management is responsible for the selection and use of appropriate accounting policies. The significant
accounting policies used by the City of Lake Elsinore are described in Note 1 to the financial
statements. The City implemented Governmental Accounting Standards Board Statement Number 54,
"Fund Balance Reporting and Governmental Fund Type Definitions ", for the year ended
June 30, 2011. No other accounting procedures were adopted and the application of other existing
policies was not changed during the year ended June 30, 2011. We noted no transactions entered into
by the City during the year for which there is a lack of authoritative guidance or consensus. All
significant transactions have been recognized in the financial statements in the proper period.
Accounting estimates are an integral part of the financial statements prepared by management and are
based on management's knowledge and experience about past and current events and assumptions
about future events. Certain accounting estimates are particularly sensitive because of their
significance to the financial statements and because of the possibility that future events affecting them
may differ significantly from those expected.
-1-
2875 Michelle Drive, Suite 300, Irvine, CA 92606 • Tel: 714.978.1300 • Fax: 714.978.7893
Offices located in Orange and San Diego Counties
Significant Audit Findings (Continued):
Qualitative Aspects of Accounting Practices (Continued)
The most sensitive estimates affecting the financial statements were:
a. Management's estimate of the fair market value of investments is based on market values
provided by outside sources.
b. Management's estimate of the value of capital assets (infrastructure assets) is based on
industry standards.
c. The estimated useful lives of capital assets for depreciation purposes are based on industry
standards.
d. The funded status and funding progress of the public defined benefit plan with Ca1PERS are
based on actuarial valuations.
e. The annual required contribution and actuarial accrued liability for the City's Other
Post - Employment Benefit Plan are based on certain actuarial assumptions and methods
prepared by an outside consultant.
We evaluated the key factors and assumptions used to develop these estimates in determining that they
were reasonable in relation to the financial statements taken as a whole.
Certain financial statement disclosures are particularly sensitive because of their significance to
financial statement users. The most sensitive disclosures affecting the financial statement were
reported in Note 16 regarding the defined benefit pension plan, in Note 17 regarding the City's other
post - employment benefit plan and in Note 20 regarding the recent changes in legislation affecting
California Redevelopment Agencies.
Difficulties Encountered in Perforining the Audit
We encountered no significant difficulties in dealing with management in performing and completing
our audit.
Corrected and Uncorrected Misstatements
Professional standards require us to accumulate all known and likely misstatements identified during
the audit, other than those that are trivial, and communicate them to the appropriate level of
management.
The following matters of misstatements were detected by us as a result of our audit procedures, and
have been corrected by management.
a. The refunding of the 1999 Series A Bonds by the 2010 Series C Bonds was not
recorded properly. An adjustment was made to the Redevelopment Agency's
general ledger to reflect the gross proceeds and repayment of the bonds.
-2-
Corrected and Uncorrected Misstatements Continued
b. The issuance of the Tax Allocation Bonds 2011 Series A was not recorded properly.
An adjustment was made to the Redevelopment Agency's general ledger to reflect
the gross proceeds.
c. The issuance of the Local Agency Revenue Bonds 2010 Series A was not recorded
properly. An adjustment was made to the Public Financing Authority's general
ledger to reflect the gross proceeds and discounts on investments.
d. An adjustment was made to correct the unrealized gain on investments and cash
balances.
The attached schedule summarizes uncorrected misstatements of the financial statements.
Management has determined that their effects are immaterial, both individually and in the aggregate, to
the financial statements taken as a whole.
Disagreements with Management
For purposes of this letter, professional standards define a disagreement with management as a
financial accounting, reporting, or auditing matter, whether or not resolved to our satisfaction, that
could be significant to the financial statements or the auditor's report. We are pleased to report that no
such disagreements arose during the course of our audit.
Management. Representations
We have requested and received certain representations from management that are included in the
management representation letter dated March 12, 2012.
Mana . anent Consultations with Other Independent Accountants
In some cases, management may decide to consult with other accountants about auditing and
accounting matters, similar to obtaining a "second opinion" on certain situations. If a consultation
involves application of an accounting principle to the City's financial statements or a determination of
the type of auditor's opinion that may be expressed on those statements, our professional standards
require the consulting accountant to check with us to determine that the consultant has all the relevant
facts. To our knowledge, there were no such consultations with other accountants.
Other Information in Documents Containing Audited Financial Statements
With respect to the supplementary information accompanying the financial statements, we made
certain inquiries of management and evaluated the form, content, and methods of preparing the
information to determine that the information complies with accounting principles generally accepted
in the United States of America, the method of preparing it has not changed from the prior period, and
the information is appropriate and complete in relation to our audit of the financial statements. We
compared and reconciled the supplementary information to the underlying accounting records used to
prepare the financial statements or to the financial statements themselves.
- 3 -
Other Audit Finditi s or Issues
We generally discuss a variety of matters, including the application of accounting principles and
auditing standards, with management each year prior to retention as the City's auditors. However,
these discussions occurred in the normal course of our professional relationship and our responses
were not a condition to our retention.
This information is intended solely for the use of the City Council and management of the City of Lake
Elsinore and is not intended to be and should not be used by anyone other than these specified parties.
Irvine, California
March 12, 2012
I ��
-4-
City of Lake Elsinore
Schedule of Unrecorded Mistatements
June 30, 2011
REF. DESCRIPTION
GENERAL rUND
Interest income
Interest receivable
To pass on adjustment for City CAMP interest
receivable at year end
ADA DEB TSEk;1K')-' FOND
Interest income
Interest receivable
To pass on adjustment for City CAMP interest
receivable at year end
DEBIT fQ ,t]IT
ASSET LIABILITY FUND BAL REVENUE EXPENSE
(52,514.73)
52,514.73
52,514.73 0.00 0,00 (52,514.73) 0.00
(38,078.24)
38,078.24
38;078.24 0.00 0.00 (38,078.24) 0.00
TOTAL UNRECORDED MISSTATEMENTS 90,592.97 0.00 0.00 (90,592.97) 0.00
CITY OF LAKE ELSINORE
APPROPRIATIONS LIMIT WORKSHEET NO.6
WITH INDEPENDENT ACCOUNTANTS' REPORT
ON AGREED -UPON PROCEDURES
APPLIED TO APPROPRIATIONS LIMIT WORKSHEET
FOR THE YEAR ENDED JUNE 30, 2011
INDEPENDENT ACCOUNTANTS' REPORT ON
APPLYING AGREED -UPON PROCEDURES
APPLIED TO APPROPRIATIONS LIMIT WORKSHEET NO. 6
To the Honorable Mayor and
Members of the City Council
of the City of Lake Elsinore
Lake Elsinore, California
We have applied the procedures enumerated below to the accompanying Appropriations Limit
Worksheet No. 6 of the City of Lake Elsinore, California for the year ended June 30, 2011. These
procedures which were agreed to by the City of Lake Elsinore, California and the League of California
Cities (as presented in the League publication entitled "Article XIIIB Appropriations Limit Uniform
Guidelines ") were performed solely to assist the City of Lake Elsinore, California in meeting the
requirements of Section 1.5 of Article XIIIB of the California Constitution. The City of Lake Elsinore
management is responsible for the Appropriations Limit Worksheet No. 6.
This agreed -upon procedures engagement was conducted in accordance with attestation standards
established by the American Institute of Certified Public Accountants. The sufficiency of these
procedures is solely the responsibility of those parties specified in this report. Consequently, we make
no representation regarding the sufficiency of the procedures described below either for the purpose for
which this report has been requested or for any other purpose.
The procedures performed and our findings were as follows:
1. We obtained the completed Worksheet No. 6 for the year ended June 30, 2011 and compared the
limit and annual adjustment factors included in that worksheet to the limit and annual adjustment
factors that were adopted by resolution of the City Council. We also compared the population and
inflation options included in the aforementioned worksheet to those that were selected by a
recorded vote of the City Council.
Findln ?:
No exceptions were noted as a result of our performing this procedure. However, had the City
elected the option to use the annual percentage change in population for the County of Riverside,
1.014 as the population factor, the appropriations limit would have increased by $53,817 to
$60,632,970.
2875 Michelle Drive, Suite 300, Irvine, CA 92606 • Tel: 714.978.1300 • Fax: 714.978.7893
Offices located in Orange and Sun Diego Counties
2. For the accompanying Appropriations Limit Worksheet No. 6 we added last year's limit to the total
adjustments, and compared the resulting amount to this year's limit. We also recalculated the
adjustment factors, and the adjustment for inflation and population, and compared the results to the
amounts on Worksheet No. 6.
No exceptions were noted as a result of our performing this procedure.
We compared the prior year appropriations limit presented in the accompanying Appropriations
Limit Worksheet No. 6 to the prior year appropriations limit calculated by the City.
No exceptions were noted as a result of our performing this procedure.
We were not engaged to, and did not perform an audit, the objective of which would be the expression
of an opinion on the accompanying Appropriations Limit Worksheet No. 6. Accordingly, we do not
express such an opinion. Had we performed additional procedures, other matters might have come to
our attention that would have been reported to you. No procedures have been performed with respect
to the determination of the appropriations limit for the base year, as defined by the League publication
entitled "Article XIIIB Appropriations Limitation Uniform Guidelines ".
This report is intended solely for the information and use of the City Council and management of the
City of Lake Elsinore, California and is not intended to be, and should not be, used by anyone other
than these specified parties.
Irvine, California
March 12, 2012
a"") zz-,-,)
-2-
CITY OF LAKE ELSINORE
APPROPRIATIONS LIMIT WORKSHEET NO. 6
For the year ended June 30, 2011
Appropriations limit for fiscal year ended June 30, 2010
Adjustment factors for the fiscal year ended June 30, 2011 (see Note 2):
Inflation Population
Factor Factor Combined
(Note 3) (Note 4) Factor
0.97460000 1.01310000 0.98736726
Adjustment for inflation and population
Other adjustments (Note 5)
Total adjustments
Appropriations limit for fiscal year ended June 30, 2011
$61,354,225
x (0.01263274)
(775,072)
775_,072)
60,579,153
See independent accountants' report on agreed -upon procedures applied to appropriations limit
worksheet No.6 and accompanying notes.
-3-
CITY OF LAKE ELSINORE
NOTES TO APPROPRIATIONS LIMIT WORKSHEET NO. 6
For the year ended June 30, 2011
1. PURPOSE OF LIMITED PROCEDURES REVIEW:
Under Article XIIIB of the California Constitution (the Gann Spending Limitation Initiative),
California governmental agencies are restricted as to the amount of annual appropriations from
proceeds of taxes. Effective for years beginning on or after July 1, 1990, under Section 1.5 of
Article XIIIB, the annual calculation of the appropriations limit is subject to a limited procedures
review in connection with the annual audit.
2. METHOD OF CALCULATION:
Under Section 10.5 of Article XIIIB, for fiscal years beginning on or after July 1, 1990, the
appropriations limit is required to be calculated based on the limit for the fiscal year 1986 -87,
adjusted for the inflation and population factors discussed at Notes 3 and 4 below.
3. INFLATION FACTORS:
A California governmental agency may adjust its appropriations limit by either the annual
percentage change in the 4th quarter per capita personal income (which percentages are supplied by
the State Department of Finance), or the annual percentage change in the local assessment roll due
to local nonresidential new construction. The factor used by the City of Lake Elsinore for the fiscal
year 2010 -2011 represents the annual percentage change in per capita income published by the
California Department of Finance.
4. POPULATION FACTORS:
A California governmental agency may adjust its appropriations limit by either the annual
percentage change of the jurisdiction's own population, or the annual percentage change in
population in the County where the jurisdiction is located. The factor used by the City of Lake
Elsinore for fiscal year 2010 -2011 represents the annual percentage change in population for the
City of Lake Elsinore.
5. OTHER ADJUSTMENTS:
A California government agency may be required to adjust its appropriations limit when certain
events occur, such as the transfer of responsibility for municipal services to, or from, another
government agency or private entity. The City of Lake Elsinore had no such adjustments for the
year ended June 30, 2011.
See independent accountants' report on agreed -upon procedures applied to appropriations limit
worksheet No. 6.
-4-
INDEPENDENT AUDITORS' REPORT ON INTERNAL CONTROL OVER
FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERS
BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED
IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS
The Honorable Mayor and
Members of City Council
City of Lake Elsinore
Lake Elsinore, California
We have audited the financial statements of the governmental activities, each major fund, and the
aggregate remaining fund information of the City of Lake Elsinore and its blended component units,
including the Lake Elsinore Redevelopment Agency (the City), as of and for the year ended
June 30, 2011, which collectively comprise the City's basic financial statements and have issued our
report thereon dated March 12, 2012. 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.
Internal Control Over Financial RepgE ng
Management of the City is responsible for establishing and maintaining effective internal control over
financial reporting. In planning and performing our audit, we considered the City's internal control
over financial reporting as a basis for designing our auditing procedures for the purpose of expressing
our opinions on the financial statements, but not for the purpose of expressing an opinion on the
effectiveness of the City's internal control over financial reporting. Accordingly, we do not express an
opinion on the effectiveness of the City's internal control over financial reporting.
A deficiency in internal control exists when the design or operation of a control does not allow
management or employees, in the normal course of performing their assigned functions, to prevent, or
detect and correct misstatements on a timely basis. A material weakness is a deficiency, or a
combination of deficiencies, in internal control such that there is a reasonable possibility that a material
misstatement of the City's financial statements will not be prevented, or detected and corrected on a
timely basis.
- 1 -
2875 Michelle Drive, Suite 300, Irvine, CA 92606 • Tel: 714.978.1300 • Fax: 714.978.7893
Offices located in Orange and San Diego Counties
Internal Control Over Financial Reporting (Continued)
Our consideration of internal control over financial reporting was for the limited purpose described in
the first paragraph of this section and was not designed to identify all deficiencies in internal control
over financial reporting that might be deficiencies, significant deficiencies or material weaknesses. We
did not identify any deficiencies in internal control over financial reporting that we consider to be
material weaknesses, as defined above. However, we identified certain deficiencies in internal control
over financial reporting, described as significant deficiencies #1 through #3, in the accompanying
Schedule of Comments and Responses that we consider to be significant deficiencies in internal
control over financial reporting. A significant deficiency is a deficiency, or a combination of
deficiencies, in internal control that is less severe than a material weakness, yet important enough to
merit attention by those charged with governance.
Compliance and Other Matters
As part of obtaining reasonable assurance about whether the City's financial statements are free of
material misstatement, we performed tests of its compliance with certain provisions of laws,
regulations, contracts and grant agreements, noncompliance with which could have a direct and
material effect on the determination of financial statement amounts. However, providing an opinion on
compliance with those provisions was not an objective of our audit and, accordingly, we do not express
such an opinion. The results of our tests disclosed no instances of noncompliance or other matters that
are required to be reported under Government Auditing Standards.
We noted other matters, described as noncompliance and other matters #4 through #5 in the
accompanying Schedule of Comments and Responses that we have reported to management.
The City's responses to the findings identified in our audit are described in the Schedule of Comments
and Responses. We did not audit the City's responses and, accordingly, we express no opinion on them.
This communication is intended solely for the information and use of the City Council, management
and others within the City and is not intended to be, and should not be, used by anyone other than these
specified parties.
Irvine, California
March 12, 2012
IL;� zy-f-z)
-2-
SCHEDULE OF COMMENTS AND RESPONSES
Significant Deficiencies:
1. Review Year -End Closine Schedule
As part of year -end closing procedures, City staff prepared schedules to reconcile account
balances. However, we noted that some of these schedules were missing the necessary information
and had to be revised several times, which caused delay in the audit. Additionally, there was a
delay in the year -end closing of the Redevelopment Agency. We did not receive a trial balance of
the Agency until the middle of November 2011. In the prior year, we had recommended that the
City established a more formal year -end closing schedule, provided additional training to staff and
considered contracting seasonal accounting professional in preparation for the annual audit. The
City has implemented some of these recommendations.
We recommend that the City continue to implement these recommendations and all audit schedules
be reviewed by management prior to providing them to the auditors. We further recommend that
the City continue to review its year -end closing procedures and adhere to the established time
schedule. This will improve efficiency in year -end work and allow the audit process to stay on
schedule.
Management's Response:
The City has implemented many of the recommendations noted in the prior year. However, during
the current 2010 -11 fiscal year audit, the following issues contributed to delay in the audit process:
a. Format change in some the schedules requested.
b. Merger of the audit firm with White Nelson in the latter part of 2011.
c. State of California decision to eliminate the Redevelopment Agencies in the state.
The City will continue to review our year end process to improve efficiency and procedures during
the audit next fiscal year.
2. Recording of Transactions
During our review of long -term debt, we noted that the City and Redevelopment Agency did not
correctly record the gross bond proceeds and bond issuance costs for the Tax Allocation Revenue
Bonds and Local Agency Revenue Bonds issued during the year. Additionally, the City did not
record the notes receivable with developers for certain projects. We proposed significant journal
entries as a result of our audit procedures.
We understand that these entries were related to unique or one -time transactions at the City. We
recommend that the City provide specific training to its staff or obtain outside professional
assistance in handling these entries.
Management's Response:
The City will provide additional training to its staff or obtain outside professional assistance in
handling these entries in the future.
-3-
SCHEDULE OF COMMENTS AND RESPONSES
(CONTINUED)
Significant Deficiencies (Continued):
Deficit Fund Balance
In our review of the financial statements, we noted that the Community Development Block Grant
Special Revenue Fund (CDBG Fund) had a deficit fund balance for the years ended June 30, 2008,
2009, 2010 and 2011 as a result of expenditures exceeding the revenue collected for this fund. The
reason for the deficits could be that expenditures have exceeded grant reimbursements. We
recommend that the City review this fund to determine what the actual fund balance should be and
make appropriate adjustments.
Management's Response:
The City will review this fund and determine what the actual fund balance should be and make
adjustments appropriately.
Noncompliance and Other Matters:
4. Disaster Recovery Plan
We noted that the City does not have a formalized Electronic Data Processing (EDP) disaster
recovery plan. We recommend that the City adopt an EDP disaster recovery plan which is a written
set of instructions to assist City personnel to process data in such events as power outages,
hardware or software breakdown, or other disasters that keep data from being processed in a
normal manner. This plan should contain such information as the name and phone number of the
firms providing hardware and software support, location of documentation for all hardware and
software and the locations of back -up system and alternative processing locations. This would
assist the City in the absence of those employees familiar with the system.
Management's Response:
The City does have procedures in place that are followed daily to back up data and store the back
up in an off -site location. We are in the process of developing a more formalized disaster recovery
plan.
5. Developer Deposit
We noted that this deposit balance has not changed for a number of years. Per inquiry to City
Finance staff, this deposit dated back to the 1980s and is related to a development which was later
sold to other parties. The validity of this deposit liability can not be determined.
We recommend that the City research prior year records to determine whether this liability should
remain on the books or be recognized as revenue by the City.
Management's Response:
The City has done additional research of prior years records and determined that this deposit
should be recognized as revenue. This will be done in fiscal year 2011 -12.
-4-
To the Honorable Mayor and
Members of the City Council
of the City of Lake Elsinore
Lake Elsinore, California
We have audited the financial statements of the governmental activities, each major fund, and the
aggregate remaining fund information of the City of Lake Elsinore for the year ended June 30, 2011.
Professional standards require that we provide you with information about our responsibilities under
generally accepted auditing standards, as well as certain information related to the planned scope and
timing of our audit. We have communicated such information in our engagement letter dated
April 7, 2011 and during our meeting on planning matters May 27, 2011. Professional standards also
require that we communicate to you the following information related to our audit.
Significant Audit Findings:
Qualitative Aspects ofAAccuunting Practices
Management is responsible for the selection and use of appropriate accounting policies. The significant
accounting policies used by the City of Lake Elsinore are described in Note 1 to the financial
statements. The City implemented Governmental Accounting Standards Board Statement Number 54,
"Fund Balance Reporting and Governmental Fund Type Definitions ", for the year ended
June 30, 2011. No other accounting procedures were adopted and the application of other existing
policies was not changed during the year ended June 30, 2011. We noted no transactions entered into
by the City during the year for which there is a lack of authoritative guidance or consensus. All
significant transactions have been recognized in the financial statements in the proper period.
Accounting estimates are an integral part of the financial statements prepared by management and are
based on management's knowledge and experience about past and current events and assumptions
about future events. Certain accounting estimates are particularly sensitive because of their
significance to the financial statements and because of the possibility that future events affecting them
may differ significantly from those expected.
-1-
2875 Michelle Drive, Suite 300, Irvine, CA 92606 • Tel: 714.978.1300 • Fax: 714.978.7893
Offices located in Orange and San Diego Counties
Significant Audit Findings (Continued):
Qualitative Aspects of Accounting Practices (Continued)
The most sensitive estimates affecting the financial statements were:
a. Management's estimate of the fair market value of investments is based on market values
provided by outside sources.
b. Management's estimate of the value of capital assets (infrastructure assets) is based on
industry standards.
c. The estimated useful lives of capital assets for depreciation purposes are based on industry
standards.
d. The funded status and funding progress of the public defined benefit plan with Ca1PERS are
based on actuarial valuations.
e. The annual required contribution and actuarial accrued liability for the City's Other
Post - Employment Benefit Plan are based on certain actuarial assumptions and methods
prepared by an outside consultant.
We evaluated the key factors and assumptions used to develop these estimates in determining that they
were reasonable in relation to the financial statements taken as a whole.
Certain financial statement disclosures are particularly sensitive because of their significance to
financial statement users. The most sensitive disclosures affecting the financial statement were
reported in Note 16 regarding the defined benefit pension plan, in Note 17 regarding the City's other
post - employment benefit plan and in Note 20 regarding the recent changes in legislation affecting
California Redevelopment Agencies.
Difficulties Encountered in Perforining the Audit
We encountered no significant difficulties in dealing with management in performing and completing
our audit.
Corrected and Uncorrected Misstatements
Professional standards require us to accumulate all known and likely misstatements identified during
the audit, other than those that are trivial, and communicate them to the appropriate level of
management.
The following matters of misstatements were detected by us as a result of our audit procedures, and
have been corrected by management.
a. The refunding of the 1999 Series A Bonds by the 2010 Series C Bonds was not
recorded properly. An adjustment was made to the Redevelopment Agency's
general ledger to reflect the gross proceeds and repayment of the bonds.
-2-
Corrected and Uncorrected Misstatements Continued
b. The issuance of the Tax Allocation Bonds 2011 Series A was not recorded properly.
An adjustment was made to the Redevelopment Agency's general ledger to reflect
the gross proceeds.
c. The issuance of the Local Agency Revenue Bonds 2010 Series A was not recorded
properly. An adjustment was made to the Public Financing Authority's general
ledger to reflect the gross proceeds and discounts on investments.
d. An adjustment was made to correct the unrealized gain on investments and cash
balances.
The attached schedule summarizes uncorrected misstatements of the financial statements.
Management has determined that their effects are immaterial, both individually and in the aggregate, to
the financial statements taken as a whole.
Disagreements with Management
For purposes of this letter, professional standards define a disagreement with management as a
financial accounting, reporting, or auditing matter, whether or not resolved to our satisfaction, that
could be significant to the financial statements or the auditor's report. We are pleased to report that no
such disagreements arose during the course of our audit.
Management. Representations
We have requested and received certain representations from management that are included in the
management representation letter dated March 12, 2012.
Mana . anent Consultations with Other Independent Accountants
In some cases, management may decide to consult with other accountants about auditing and
accounting matters, similar to obtaining a "second opinion" on certain situations. If a consultation
involves application of an accounting principle to the City's financial statements or a determination of
the type of auditor's opinion that may be expressed on those statements, our professional standards
require the consulting accountant to check with us to determine that the consultant has all the relevant
facts. To our knowledge, there were no such consultations with other accountants.
Other Information in Documents Containing Audited Financial Statements
With respect to the supplementary information accompanying the financial statements, we made
certain inquiries of management and evaluated the form, content, and methods of preparing the
information to determine that the information complies with accounting principles generally accepted
in the United States of America, the method of preparing it has not changed from the prior period, and
the information is appropriate and complete in relation to our audit of the financial statements. We
compared and reconciled the supplementary information to the underlying accounting records used to
prepare the financial statements or to the financial statements themselves.
- 3 -
Other Audit Finditi s or Issues
We generally discuss a variety of matters, including the application of accounting principles and
auditing standards, with management each year prior to retention as the City's auditors. However,
these discussions occurred in the normal course of our professional relationship and our responses
were not a condition to our retention.
This information is intended solely for the use of the City Council and management of the City of Lake
Elsinore and is not intended to be and should not be used by anyone other than these specified parties.
Irvine, California
March 12, 2012
I ��
-4-
City of Lake Elsinore
Schedule of Unrecorded Mistatements
June 30, 2011
REF. DESCRIPTION
GENERAL rUND
Interest income
Interest receivable
To pass on adjustment for City CAMP interest
receivable at year end
ADA DEB TSEk;1K')-' FOND
Interest income
Interest receivable
To pass on adjustment for City CAMP interest
receivable at year end
DEBIT fQ ,t]IT
ASSET LIABILITY FUND BAL REVENUE EXPENSE
(52,514.73)
52,514.73
52,514.73 0.00 0,00 (52,514.73) 0.00
(38,078.24)
38,078.24
38;078.24 0.00 0.00 (38,078.24) 0.00
TOTAL UNRECORDED MISSTATEMENTS 90,592.97 0.00 0.00 (90,592.97) 0.00
CITY OF LAKE ELSINORE
APPROPRIATIONS LIMIT WORKSHEET NO.6
WITH INDEPENDENT ACCOUNTANTS' REPORT
ON AGREED -UPON PROCEDURES
APPLIED TO APPROPRIATIONS LIMIT WORKSHEET
FOR THE YEAR ENDED JUNE 30, 2011
INDEPENDENT ACCOUNTANTS' REPORT ON
APPLYING AGREED -UPON PROCEDURES
APPLIED TO APPROPRIATIONS LIMIT WORKSHEET NO. 6
To the Honorable Mayor and
Members of the City Council
of the City of Lake Elsinore
Lake Elsinore, California
We have applied the procedures enumerated below to the accompanying Appropriations Limit
Worksheet No. 6 of the City of Lake Elsinore, California for the year ended June 30, 2011. These
procedures which were agreed to by the City of Lake Elsinore, California and the League of California
Cities (as presented in the League publication entitled "Article XIIIB Appropriations Limit Uniform
Guidelines ") were performed solely to assist the City of Lake Elsinore, California in meeting the
requirements of Section 1.5 of Article XIIIB of the California Constitution. The City of Lake Elsinore
management is responsible for the Appropriations Limit Worksheet No. 6.
This agreed -upon procedures engagement was conducted in accordance with attestation standards
established by the American Institute of Certified Public Accountants. The sufficiency of these
procedures is solely the responsibility of those parties specified in this report. Consequently, we make
no representation regarding the sufficiency of the procedures described below either for the purpose for
which this report has been requested or for any other purpose.
The procedures performed and our findings were as follows:
1. We obtained the completed Worksheet No. 6 for the year ended June 30, 2011 and compared the
limit and annual adjustment factors included in that worksheet to the limit and annual adjustment
factors that were adopted by resolution of the City Council. We also compared the population and
inflation options included in the aforementioned worksheet to those that were selected by a
recorded vote of the City Council.
Findln ?:
No exceptions were noted as a result of our performing this procedure. However, had the City
elected the option to use the annual percentage change in population for the County of Riverside,
1.014 as the population factor, the appropriations limit would have increased by $53,817 to
$60,632,970.
2875 Michelle Drive, Suite 300, Irvine, CA 92606 • Tel: 714.978.1300 • Fax: 714.978.7893
Offices located in Orange and Sun Diego Counties
2. For the accompanying Appropriations Limit Worksheet No. 6 we added last year's limit to the total
adjustments, and compared the resulting amount to this year's limit. We also recalculated the
adjustment factors, and the adjustment for inflation and population, and compared the results to the
amounts on Worksheet No. 6.
No exceptions were noted as a result of our performing this procedure.
We compared the prior year appropriations limit presented in the accompanying Appropriations
Limit Worksheet No. 6 to the prior year appropriations limit calculated by the City.
No exceptions were noted as a result of our performing this procedure.
We were not engaged to, and did not perform an audit, the objective of which would be the expression
of an opinion on the accompanying Appropriations Limit Worksheet No. 6. Accordingly, we do not
express such an opinion. Had we performed additional procedures, other matters might have come to
our attention that would have been reported to you. No procedures have been performed with respect
to the determination of the appropriations limit for the base year, as defined by the League publication
entitled "Article XIIIB Appropriations Limitation Uniform Guidelines ".
This report is intended solely for the information and use of the City Council and management of the
City of Lake Elsinore, California and is not intended to be, and should not be, used by anyone other
than these specified parties.
Irvine, California
March 12, 2012
a"") zz-,-,)
-2-
CITY OF LAKE ELSINORE
APPROPRIATIONS LIMIT WORKSHEET NO. 6
For the year ended June 30, 2011
Appropriations limit for fiscal year ended June 30, 2010
Adjustment factors for the fiscal year ended June 30, 2011 (see Note 2):
Inflation Population
Factor Factor Combined
(Note 3) (Note 4) Factor
0.97460000 1.01310000 0.98736726
Adjustment for inflation and population
Other adjustments (Note 5)
Total adjustments
Appropriations limit for fiscal year ended June 30, 2011
$61,354,225
x (0.01263274)
(775,072)
775_,072)
60,579,153
See independent accountants' report on agreed -upon procedures applied to appropriations limit
worksheet No.6 and accompanying notes.
-3-
CITY OF LAKE ELSINORE
NOTES TO APPROPRIATIONS LIMIT WORKSHEET NO. 6
For the year ended June 30, 2011
1. PURPOSE OF LIMITED PROCEDURES REVIEW:
Under Article XIIIB of the California Constitution (the Gann Spending Limitation Initiative),
California governmental agencies are restricted as to the amount of annual appropriations from
proceeds of taxes. Effective for years beginning on or after July 1, 1990, under Section 1.5 of
Article XIIIB, the annual calculation of the appropriations limit is subject to a limited procedures
review in connection with the annual audit.
2. METHOD OF CALCULATION:
Under Section 10.5 of Article XIIIB, for fiscal years beginning on or after July 1, 1990, the
appropriations limit is required to be calculated based on the limit for the fiscal year 1986 -87,
adjusted for the inflation and population factors discussed at Notes 3 and 4 below.
3. INFLATION FACTORS:
A California governmental agency may adjust its appropriations limit by either the annual
percentage change in the 4th quarter per capita personal income (which percentages are supplied by
the State Department of Finance), or the annual percentage change in the local assessment roll due
to local nonresidential new construction. The factor used by the City of Lake Elsinore for the fiscal
year 2010 -2011 represents the annual percentage change in per capita income published by the
California Department of Finance.
4. POPULATION FACTORS:
A California governmental agency may adjust its appropriations limit by either the annual
percentage change of the jurisdiction's own population, or the annual percentage change in
population in the County where the jurisdiction is located. The factor used by the City of Lake
Elsinore for fiscal year 2010 -2011 represents the annual percentage change in population for the
City of Lake Elsinore.
5. OTHER ADJUSTMENTS:
A California government agency may be required to adjust its appropriations limit when certain
events occur, such as the transfer of responsibility for municipal services to, or from, another
government agency or private entity. The City of Lake Elsinore had no such adjustments for the
year ended June 30, 2011.
See independent accountants' report on agreed -upon procedures applied to appropriations limit
worksheet No. 6.
-4-
INDEPENDENT AUDITORS' REPORT ON INTERNAL CONTROL OVER
FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERS
BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED
IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS
The Honorable Mayor and
Members of City Council
City of Lake Elsinore
Lake Elsinore, California
We have audited the financial statements of the governmental activities, each major fund, and the
aggregate remaining fund information of the City of Lake Elsinore and its blended component units,
including the Lake Elsinore Redevelopment Agency (the City), as of and for the year ended
June 30, 2011, which collectively comprise the City's basic financial statements and have issued our
report thereon dated March 12, 2012. 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.
Internal Control Over Financial RepgE ng
Management of the City is responsible for establishing and maintaining effective internal control over
financial reporting. In planning and performing our audit, we considered the City's internal control
over financial reporting as a basis for designing our auditing procedures for the purpose of expressing
our opinions on the financial statements, but not for the purpose of expressing an opinion on the
effectiveness of the City's internal control over financial reporting. Accordingly, we do not express an
opinion on the effectiveness of the City's internal control over financial reporting.
A deficiency in internal control exists when the design or operation of a control does not allow
management or employees, in the normal course of performing their assigned functions, to prevent, or
detect and correct misstatements on a timely basis. A material weakness is a deficiency, or a
combination of deficiencies, in internal control such that there is a reasonable possibility that a material
misstatement of the City's financial statements will not be prevented, or detected and corrected on a
timely basis.
- 1 -
2875 Michelle Drive, Suite 300, Irvine, CA 92606 • Tel: 714.978.1300 • Fax: 714.978.7893
Offices located in Orange and San Diego Counties
Internal Control Over Financial Reporting (Continued)
Our consideration of internal control over financial reporting was for the limited purpose described in
the first paragraph of this section and was not designed to identify all deficiencies in internal control
over financial reporting that might be deficiencies, significant deficiencies or material weaknesses. We
did not identify any deficiencies in internal control over financial reporting that we consider to be
material weaknesses, as defined above. However, we identified certain deficiencies in internal control
over financial reporting, described as significant deficiencies #1 through #3, in the accompanying
Schedule of Comments and Responses that we consider to be significant deficiencies in internal
control over financial reporting. A significant deficiency is a deficiency, or a combination of
deficiencies, in internal control that is less severe than a material weakness, yet important enough to
merit attention by those charged with governance.
Compliance and Other Matters
As part of obtaining reasonable assurance about whether the City's financial statements are free of
material misstatement, we performed tests of its compliance with certain provisions of laws,
regulations, contracts and grant agreements, noncompliance with which could have a direct and
material effect on the determination of financial statement amounts. However, providing an opinion on
compliance with those provisions was not an objective of our audit and, accordingly, we do not express
such an opinion. The results of our tests disclosed no instances of noncompliance or other matters that
are required to be reported under Government Auditing Standards.
We noted other matters, described as noncompliance and other matters #4 through #5 in the
accompanying Schedule of Comments and Responses that we have reported to management.
The City's responses to the findings identified in our audit are described in the Schedule of Comments
and Responses. We did not audit the City's responses and, accordingly, we express no opinion on them.
This communication is intended solely for the information and use of the City Council, management
and others within the City and is not intended to be, and should not be, used by anyone other than these
specified parties.
Irvine, California
March 12, 2012
IL;� zy-f-z)
-2-
SCHEDULE OF COMMENTS AND RESPONSES
Significant Deficiencies:
1. Review Year -End Closine Schedule
As part of year -end closing procedures, City staff prepared schedules to reconcile account
balances. However, we noted that some of these schedules were missing the necessary information
and had to be revised several times, which caused delay in the audit. Additionally, there was a
delay in the year -end closing of the Redevelopment Agency. We did not receive a trial balance of
the Agency until the middle of November 2011. In the prior year, we had recommended that the
City established a more formal year -end closing schedule, provided additional training to staff and
considered contracting seasonal accounting professional in preparation for the annual audit. The
City has implemented some of these recommendations.
We recommend that the City continue to implement these recommendations and all audit schedules
be reviewed by management prior to providing them to the auditors. We further recommend that
the City continue to review its year -end closing procedures and adhere to the established time
schedule. This will improve efficiency in year -end work and allow the audit process to stay on
schedule.
Management's Response:
The City has implemented many of the recommendations noted in the prior year. However, during
the current 2010 -11 fiscal year audit, the following issues contributed to delay in the audit process:
a. Format change in some the schedules requested.
b. Merger of the audit firm with White Nelson in the latter part of 2011.
c. State of California decision to eliminate the Redevelopment Agencies in the state.
The City will continue to review our year end process to improve efficiency and procedures during
the audit next fiscal year.
2. Recording of Transactions
During our review of long -term debt, we noted that the City and Redevelopment Agency did not
correctly record the gross bond proceeds and bond issuance costs for the Tax Allocation Revenue
Bonds and Local Agency Revenue Bonds issued during the year. Additionally, the City did not
record the notes receivable with developers for certain projects. We proposed significant journal
entries as a result of our audit procedures.
We understand that these entries were related to unique or one -time transactions at the City. We
recommend that the City provide specific training to its staff or obtain outside professional
assistance in handling these entries.
Management's Response:
The City will provide additional training to its staff or obtain outside professional assistance in
handling these entries in the future.
-3-
SCHEDULE OF COMMENTS AND RESPONSES
(CONTINUED)
Significant Deficiencies (Continued):
Deficit Fund Balance
In our review of the financial statements, we noted that the Community Development Block Grant
Special Revenue Fund (CDBG Fund) had a deficit fund balance for the years ended June 30, 2008,
2009, 2010 and 2011 as a result of expenditures exceeding the revenue collected for this fund. The
reason for the deficits could be that expenditures have exceeded grant reimbursements. We
recommend that the City review this fund to determine what the actual fund balance should be and
make appropriate adjustments.
Management's Response:
The City will review this fund and determine what the actual fund balance should be and make
adjustments appropriately.
Noncompliance and Other Matters:
4. Disaster Recovery Plan
We noted that the City does not have a formalized Electronic Data Processing (EDP) disaster
recovery plan. We recommend that the City adopt an EDP disaster recovery plan which is a written
set of instructions to assist City personnel to process data in such events as power outages,
hardware or software breakdown, or other disasters that keep data from being processed in a
normal manner. This plan should contain such information as the name and phone number of the
firms providing hardware and software support, location of documentation for all hardware and
software and the locations of back -up system and alternative processing locations. This would
assist the City in the absence of those employees familiar with the system.
Management's Response:
The City does have procedures in place that are followed daily to back up data and store the back
up in an off -site location. We are in the process of developing a more formalized disaster recovery
plan.
5. Developer Deposit
We noted that this deposit balance has not changed for a number of years. Per inquiry to City
Finance staff, this deposit dated back to the 1980s and is related to a development which was later
sold to other parties. The validity of this deposit liability can not be determined.
We recommend that the City research prior year records to determine whether this liability should
remain on the books or be recognized as revenue by the City.
Management's Response:
The City has done additional research of prior years records and determined that this deposit
should be recognized as revenue. This will be done in fiscal year 2011 -12.
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