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2011-2012 CAFR s •t 'if) of Chino Hills California COMPREHENSIVE ANNUAL FINANCIAL REPORT Fiscal Year Ended June 30, 2012 CITY OF CHINO HILLS, CALIFORNIA COMPREHENSIVE ANNUAL FINANCIAL REPORT FISCAL YEAR ENDED JUNE 30, 2012 Prepared by: Department of Finance • wY mw,. -4, 4i ..w I 1 1C �i•]aCi�^ �. sW rub :? 41% a1 V F T ~rtt'�E �ff. r O,(C-I. T. -Jroty',y' 2i - YL CITY OF CHINO HILLS INCORPORATED 1 9 9 1 THIS PAGE INTENTIONALLY LEFT BLANK CITY OF CHINO HILLS COMPREHENSIVE ANNUAL FINANCIAL REPORT FOR THE FISCAL YEAR ENDED JUNE 30, 2012 TABLE OF CONTENTS Page Number INTRODUCTORY SECTION Letter of Transmittal Organizational Chart vi City Officials vii Certificate of Achievement for Excellence in Financial Reporting viii FINANCIAL SECTION INDEPENDENT AUDITORS' REPORT 1 MANAGEMENTS DISCUSSION AND ANALYSIS 3 Government—Wide Financial Statements Statement of Net Assets 9 Statement of Activities 10 Fund Financial Statements Balance Sheet—Governmental Funds 12 Reconciliation of the Balance Sheet of Governmental Funds to the Statement of Net Assets 15 Statement of Revenues, Expenditures and Changes in Fund Balances—Governmental Funds 16 Reconciliation of the Statement of Revenues, Expenditures and Changes in Fund Balances of Governmental Funds to the Statement of Activities 19 Budgetary Comparison Statement—General Fund 20 Budgetary Comparison Statement—Landscape and Lighting District 21 Budgetary Comparison Statement—Existing Infrastructure Fees 22 Statement of Net Assets—Proprietary Funds 23 Statement of Revenues, Expenses and Changes in Fund Net Assets— Proprietary Funds 25 Statement of Cash Flows— Proprietary Funds 26 Statement of Fiduciary Net Assets—Fiduciary Funds 28 Notes to Financial Statements 29 CITY OF CHINO HILLS COMPREHENSIVE ANNUAL FINANCIAL REPORT FOR THE FISCAL YEAR ENDED JUNE 30, 2012 TABLE OF CONTENTS Page Number COMBINING AND INDIVIDUAL FUND STATEMENTS AND SCHEDULES Combining Balance Sheet—Nonmajor Governmental Funds 67 Combining Statement of Revenues, Expenditures and Changes in Fund Balances—Nonmajor Governmental Funds 73 Budgetary Comparison Schedules Sleepy Hollow Road Improvement 79 General Facilities Fees 80 Traffic Facilities Fees 81 Storm Drain Facilities Fees 82 Parkland Fees 83 Traffic Signal Fees 84 Gas Tax 85 Air Quality 86 Federal Grants 87 Measure I 88 Solid Waste 89 Street Sweeping 90 Frontline Policing 91 Miscellaneous Grants 92 Affordable Housing Program 93 Local Government Energy Efficiency CDBG 94 Water Facilities Fee 95 Sewer Facilities Fee 96 Capital Improvement 97 CFD#9 Rincon Village 98 CFD#10 Fairfield Ranch 99 New Community Center 100 Combining Statement of Net Assets—Internal Service Funds 101 Combining Statement of Revenues, Expenses and Changes in Fund Net Assets—Internal Service Funds 102 Combining Statement of Cash Flows— Internal Service Funds 103 Combining Balance Sheet—All Agency Funds 104 Combining Statement of Changes in Assets and Liabilities— All Agency Funds 108 CITY OF CHINO HILLS COMPREHENSIVE ANNUAL FINANCIAL REPORT FOR THE FISCAL YEAR ENDED JUNE 30, 2012 TABLE OF CONTENTS Page Number STATISTICAL SECTION Last Ten Fiscal Years Net Assets by Component 115 Changes in Net Assets 116 Fund Balances of Governmental Funds 119 Changes in Fund Balances of Governmental Funds 120 Water Revenue—Charges for Services 123 Assessed Value and Estimated Actual Value of Taxable Property 124 Direct and Overlapping Property Tax Rates 125 Principal Property Tax Payers 126 Property Tax Levies and Collections 127 Ratios of Outstanding Debt by Type 129 Direct and Overlapping Governmental Activities Debt 130 Legal Debt Margin Information 131 Pledged—Revenue Coverage 132 Demographic and Economic Statistics 134 Principal Employers 135 Full—Time—Equivalent City Government Employees by Function/Program 137 Operating Indicator by Function/Program 138 Capital Asset Statistics by Function/Program 139 .244% ' > 5 S.` • i 5 "it-:•'-',•• ♦ 2 CITY OF CHINO HILLS INCORPORATED 1 9 9 1 - THIS PAGE INTENTIONALLY LEFT BLANK t Awarfr cit Chino Hills California INTRODUCTORY SECTION 1 k Win City of CITY OF CHIVO HILLS Chino Hills C 1111 111111 l 1j November 16, 2012 The Honorable Mayor and City Council City of Chino Hills, California State law requires that all general-purpose local governments publish, within six months of the close of each fiscal year, a complete set of financial statements presented in conformity with generally accepted accounting principles (GAAP) and audited in accordance with auditing standards generally accepted in the United States of America by a firm of licensed certified public accountants. Pursuant to that requirement, we hereby issue the Comprehensive Annual Financial Report (CAFR) for the City of Chino Hills for the fiscal year ended June 30, 2012. This report consists of management's representations concerning the finances of the City of Chino Hills. Consequently, management assumes full responsibility for the completeness and reliability of the information presented in this report. To provide a reasonable basis for making these representations, management of the City of Chino Hills has established a comprehensive internal control framework that is designed both to protect the government's assets from loss, theft, or misuse, and to compile sufficient reliable information for the preparation of the City of Chino Hills' financial statements in conformity with GAAP. Because the cost of internal controls should not outweigh their benefits, the City's comprehensive framework of internal controls has been designed to provide reasonable rather than absolute assurance that the financial statements are free from material misstatement. As management, we assert that, to the best of our knowledge and belief, this financial report is complete and reliable in all material respects. Lance, Soli, & Lunghard, LLP, a firm of licensed certified public accountants, has issued an unqualified ("clean") opinion of the City of Chino Hills' financial statements for the year ended June 30, 2012. The independent auditor's report is located at the front of the financial section of this report. Management's discussion and analysis (MD&A) immediately follows the independent auditor's report and provides a narrative introduction, overview, and analysis of the basic financial statements. This letter of transmittal complements the MD&A and the financial statements, and it should be read from that perspective and in conjunction with all other sections of the CAFR. City of Chino Hills Profile The City of Chino Hills was incorporated in December 1991 as a general law City and operates under the Council-Manager form of government. Chino Hills is located in southwestern San Bernardino County and is well known for its beautiful rural atmosphere and high quality of life. The population has grown from 42,000 to 75,655 in 21 years, and the community enjoys 3,000 acres of publicly-owned open space, 40 parks, 39 miles of trails, and five community buildings. A non-partisan five-member council, elected to serve staggered four-year terms, governs the City. Elections are consolidated with the statewide general election held in November of even numbered years. The City Council appoints the City Manager, City Clerk, and City Attorney as well as members of various City Council: Art Bennett Ed M. Graham W.C. "Bill"Kruger Gwenn E. Norton-Perry Peter J. Rogers 14000 City Center Drive, Chino Hills, CA 91709 • (909) 364-2600 • FAX (909) 364-2695 • www.chinohills.org commissions and citizen advisory groups ensuring a broad base of citizen input into the City's decision- making process. Chino Hills is a family-friendly community with a diverse population that has climbed to nearly 76,000 people. Residents are proud of the City's ranking as one of the safest cities in the United States. The City has attained a fair share of accolades and national recognition. In 2012, Chino Hills was ranked #34 on Money magazine's list of the "100 Best Places to Live." According to the CNN/Money website, the list includes "the top 100 terrific cities that offer what American families care about most — strong job opportunities, great schools, low crime, quality health care, plenty to do, and a true sense of community." America's Promise Alliance recognized the City as one of the "100 Best Communities for Young People" for 2011 and 2012. In 2009, Chino Hills was ranked #13 on Morgan Quitno Press list of the top 25 "Safest Cities in the Nation." Throughout the years, Money Magazine has featured Chino Hills as one of the top "100 Best Places to Live in the USA" (2005); and as#8 on the "America's Hottest Towns" list of"best places in the west with a population under 100,000" (2004). Chino Hills ranks high in the United States with an average household income of$112,594 according to the 2012 data from the Nielsen Company. Income levels are often linked to educational levels and the 2007-2009 American Community Survey found that 43.5% of residents over age 25 have bachelor's degrees or higher, including 14.3% with graduate degrees. Families are attracted by high-performing schools with Academic Performance Index (API) scores in the 800's and 900's. Chino Valley Unified School District schools lead the County in API results. Residents enjoy a nice balance of quality development and open space, excellent schools, a strong commitment to family values, and access to an active lifestyle. Quality retail development has led to a wide variety of shopping and dining options. Residents enjoy a strong sense of community which is enhanced as they gather at various City-sponsored events including Concerts in the Park, Snow Day, and the Old-Fashioned Fourth of July Picnic. The community is home to 40 parks, 39 miles of trails, and 3,000 acres of community-owned open space. Residents value the rural atmosphere that has been preserved in the rolling hills and canyons throughout the community. Recreation is a priority in Chino Hills and Big League Dreams Chino Hills Sports Park is a destination for recreation. This 33-acre, multi-use sports facility provides adult softball and youth baseball players with an opportunity to play in a "Major League" replica stadium complete with lifelike fans in the bleachers. The venue attracts tournaments, visitors, and new commercial ventures to Chino Hills. The City is also home to the McCoy Equestrian and Recreation Center. This beautiful 20-acre facility includes two lighted arenas, covered bleachers, a gazebo, a community building, and trail connections. The McCoy Residence also serves as a venue for events. Chino Hills Community Park is the flagship park in the City. This 33-acre park features six ball fields for baseball or softball and five overlay soccer fields. Local sports teams can play their games even after inclement weather thanks to the synthetic field turf at the park. People who live in Chino Hills love to come home at the end of the day. The City of Chino Hills provides a full range of services including: police protection (via contract with the San Bernardino County Sheriffs Department); solid waste disposal services (via contract with Republic Waste Services of So. California: dba-Chino Hills Disposal); the construction and maintenance of streets and infrastructure; economic development; recreational activities; and cultural events. The Chino Valley Independent Fire District, governed by its own independently-elected board of directors, provides fire protection and emergency medical services. The Fire District receives a share of the property tax and secures additional funding through contractual charges and other fees. The City's budget process includes the preparation of a five-year capital improvement plan (CIP). The CIP identifies major construction and equipment needs that are on the horizon. While the five-year CIP is a planning tool that is subject to change, it allows the City to prepare for and plan to fund all necessary infrastructure required for new residential and commercial development. Available funding for the ii installation of parks, infrastructure, and government facilities, and the maintenance of the City's open space, parks, and landscaped areas, comes from special assessment districts and development fees. The City's budget policy provides for an orderly process that allows for the adoption of the annual budget by June 30 of each year. The City maintains a budget control system to ensure compliance with legal provisions embodied in the annual appropriated budget approved by the City Council. Activities of the General Fund, Special Revenue Funds, and Capital Project Funds are included in the annual appropriated budget. See Note 2 of the Notes to the Basic Financial Statements for additional information on budget procedures. Relevant Financial Policies There were no significant effects in the current year from the application of relevant financial policies. Local Economy The economic condition of the area in which the City is located (in southwestern San Bernardino County) points to future growth for the City of Chino Hills. However, in November 1999, the residents of Chino Hills voted in favor of Proposition "U" that essentially states any new development proposed for a higher density than is allowed per the General Plan requires voter approval. This does not affect projects with densities equal to or lower than allowed per the General Plan or projects that already have approved tract maps. Chino Hills is one of the most desirable cities in the County of San Bernardino with median income nearly double the County average. The demand for residential construction will continue due to good schools, low crime, and the City's strong, positive reputation. In the 2011-12 fiscal year, 17 residential units were built as compared to 27 in 2010-11. For fiscal year 2012-13, the projection for new residential is 22 units. The City is reaching build-out and the remaining residential properties are infill, smaller and/or have physical constraints that make them more challenging to build. Due to the ongoing national recession, housing growth will continue to be slow. The City's population continues to grow steadily, rising from 42,691 in 1991 to an estimated 75,655 in 2012. The population growth in the City of Chino Hills has slowed significantly. The projected population is 80,400 at the end of the current five-year operating plan. Chino Hills' future is projected to maintain continued growth given future development of the vacant land that remains under the General Plan, projects currently under consideration and the attractiveness of the Chino Hills marketplace. Economic development efforts over the past several years have proven successful in the strengthening of the City's revenue base. The additions of "The Shoppes at Chino Hills" Phase I and "The Commons at Chino Hills" projects have made significant impact on the City's sales tax revenues since opening in fiscal year 2008-09. "The Shoppes at Chino Hills" is a lifestyle center that is now the center of the community. The 360,000 square foot open-air lifestyle retail center is part of a 50-acre development. Phase I includes a combination of upscale retail stores, restaurants, and eateries. Major tenants include Barnes & Noble, Trader Joe's, XXI Forever, Victoria's Secret, Wood Ranch BBQ & Grill, and Yard House Restaurant. "The Commons at Chino Hills" is a partially developed 530,000 square foot freeway-oriented development on a 50-acre site. Major tenants include Lowes Home Improvement Center, Toys R' Us/Babies R' Us, The Ayers Hotel, Lucille's BBQ, and BJ's Brewhouse. These shopping centers are keeping Chino Hills' citizens shopping in Chino Hills and also bringing in customers from surrounding areas. The "Carbon Canyon Commercial" development project providing 5,000 square feet of commercial and office development on approximately 0.64 acres was completed during fiscal year 2011-12. Development projects under construction are the (i) B.A.P.S. Temple and Cultural Center — a Hindu Socio-Religious facility located on 20 acres; (ii) "The Commons at Chino Hills" - approximately 160,000 iii square feet of buildings have yet to be constructed; and (iii) Pine Valley Estates —thus far 89 homes of a 98 single-family residential home project have been constructed since the project's inception. Short-Term Outlook Fortunately for the City and in spite of the economic downturn, the overall impacts to the City have not been as severe compared to other parts of the state and country. Although the City of Chino Hills has been and continues to be strong financially, the potential fiscal impact of a recession could have an adverse impact on Chino Hills in the form of the State of California revenue reductions to local governments. The City of Chino Hills has maintained its strong financial position through prudent, long-range policy decisions and sound fiscal management. Thus far, Chino Hills' economic base has enabled the City to weather the economic impact of the housing downturn with minimal impacts to service levels to date. The City will continue to monitor key economic indicators, sources of revenues, and spending levels as part of its sound conservative fiscal approach. Long-Term Goals, Efforts, and Actions Over the years, the City of Chino Hills has enjoyed a favorable economic environment with growth in both residential and commercial development, and with it the related revenues including permit fees, development fees, property taxes, and sales taxes. Since 2006, the new development activity level has slowed significantly and the growth experienced from 2000-2006 has subsided. The challenges presented by the demands of providing essential municipal services during an economic downturn continue to be a principal challenge for Chino Hills. The development, clarification, and refinement of processes are vital to sustain the organization over the long term. Both the Operating and Capital Improvement budgets reflect the continued focus on maintenance of the City's existing infrastructure. This maintenance effort is critical, on a proactive basis, to minimize our costs over the long term. Major Initiatives The City of Chino Hills prepares a five-year financial projection of its Capital Improvement Program (CIP). The City continues an aggressive CIP effort utilizing staff and consultant resources to implement projects in a timely and cost effective manner. A coordinated approach to the CIP is critical to meet the facility and infrastructure needs of our current residents and businesses as well as the infrastructure needs that growth in Chino Hills will require. The management and implementation of our CIP merits and will continue to receive the attention of the entire organization. The City's Long-Term CIP of$112,278,100 demonstrates its commitment to infrastructure improvements and consists of projects in the following categories: Streets $42,514,500 Public Facilities $ 7,965,700 Parks/Open Space $ 31,646,000 Water $ 17,280,700 Recycled Water $ 4,072,900 Sewer/Storm Drain $ 8,798,300 iv Awards and Acknowledgements The Government Finance Officers Association (GFOA) of the United States and Canada awarded a Certificate of Achievement for Excellence in Financial Reporting to the City for its Comprehensive Annual Financial Report for the fiscal year ended June 30, 2011. To be awarded a Certificate of Achievement, the City must publish an easily readable and efficiently organized Comprehensive Annual Financial Report, the contents of which conform to program standards. Such report must also satisfy both U.S. generally accepted accounting principles (GAAP) and applicable legal requirements. A Certificate of Achievement is valid for a period of one year only. We believe that our current Comprehensive Annual Financial Report conforms to the Certificate of Achievement Program's requirements, and we are submitting it to the GFOA to determine its eligibility for another certificate. The dedication of the Finance Department staff made it possible to prepare this report in a timely manner. We wish to express our appreciation to all members of the department who assisted and contributed to the preparation of this report. Credit also must be given to the Mayor and the City Council for their unfailing support for maintaining the highest standards of professionalism in the management of the City of Chino Hills' finances. Respectfully submitted, 4111). / i 6/1444 Michael S.. ‘j--iger dy R. /ncaster City Manager 'Finance 1 erector V THE CITY OF CHINO HILLS ORGANIZATION OF CITY GOVERNMENT OPERATING SUMMARY 1 City ofChinoHillsn Voters City Council Various Commissions I i City Clerk City Manager City Attorney I I Community ommunity Department Department I Engineering p rtment Department Development CServices Department De par me Public Works vi CITY OF CHINO HILLS LIST OF ELECTED AND APPOINTED OFFICIALS ELECTED OFFICIALS - CITY COUNCIL Art Bennett Mayor Peter Rogers Vice Mayor Ed Graham Council Member W.C. `Bill" Kruger Council Member Gwenn Norton-Perry Council Member APPOINTED OFFICIALS Michael S. Fleager City Manager Kathleen Gotch Assistant City Manager Mary M. McDuffee City Clerk Mark D. Hensley City Attorney Judy R. Lancaster Finance Director Joann Lombardo Community Development Director Nadeem Majaj Public Works Director Jonathan Marshall Community Services Director Steve Nix City Engineer vii Certificate of Achievement f(or- Excellence in Financial Reporting Presented to City of Chino Hills California For its Comprehensive Annual Financial Report for the Fiscal Year Ended June 30,2011 A Certificate of Achievement for Excellence in Financial Reporting is presented by the Government Finance Officers Association of the United States and Canada to government units and public employee retirement systems whose comprehensive annual financial reports(CAFRs)achieve the highest standards in government accounting and financial reporting. o OFTNE cu, ,. � ,46"tend e. t►'1 3F STATS 6- AND 9 4. CO ORATION/ President • 0,9 ...,...- p *Cep ile 0 r et--- tificw Executive Director viii 4 40e ChiiioiHills California FINANCIAL SECTcN CERTIFIED PUBLIC ACCOUNTANTS Brandon W,Burrows,CPA -David E.Hale,CPA,CFP A Professional Corporation Donald G.Slater,CPA Richard K.Kikuchi,CPA Susan F.Matz,CPA Shelly K.Jackley,CPA Bryan S.Gruber,CPA --Deborah A.Harper,CPA INDEPENDENT AUDITORS' REPORT To the Honorable Mayor and Members of City Council City of Chino Hills, California We have audited the accompanying financial statements of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of City of Chino Hills, California, as of and for the year ended June 30, 2012, which collectively comprise the City's basic financial statements as listed in the table of contents. These financial statements are the responsibility of City of Chino Hills, California'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 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 the 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, the business-type activities, each major fund, and the aggregate remaining fund information of the City of Chino Hills, California, as of June 30, 2012, and the respective changes in financial position, and cash flows, where applicable, thereof and the respective budgetary comparison for the General Fund, Landscape and Lighting District, and Existing Infrastructure Fees for the year then ended in conformity with accounting principles generally accepted in the United States of America. In accordance with Government Auditing Standards, we have also issued our report dated November 16, 2012, on our consideration of the City of Chino Hills, California's internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards and should be considered in assessing the results of our audit. Accounting principles generally accepted in the United States of America require that the management's discussion and analysis as listed in the table of contents be presented to supplement the basic financial statements. Such information, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board, who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information and comparing the information for Lance,Sall&Lunghard,LLP 203 North Brea Boulevard • Suite 203 • Brea,CA 92821 • TEL: 714.672.0022 • Fax:714.672.0331 www.lslcpas.com Orange County • Temecula Valley • Silicon Valley J JsJ®F 1. CERTIFIED PUBLIC ACCOUNTANTS To the Honorable Mayor and Members of City Council City of Chino Hills, California consistency with management's responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance. Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the City of Chino Hills, California's financial statements as a whole. The introductory section, combining and individual nonmajor fund financial statements and schedules, and statistical section, are presented for purposes of additional analysis and are not a required part of the financial statements. The combining and individual nonmajor fund financial statements and schedules are the responsibility of management and were derived from and relate directly to the underlying accounting and other records used to prepare the financial statements. The information has been subjected to the auditing procedures applied in the audit of the financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the financial statements or to the 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 financial statements as a whole. The introductory and statistical sections have not been subjected to the auditing procedures applied in the audit of the basic financial statements and, accordingly, we do not express an opinion or provide any assurance on them. C, Ct44a Brea, California November 16, 2012 1 2 Chino Hills California MANAGEMENT'S IISCUSSION & ANALYSIS MANAGEMENT'S DISCUSSION AND ANALYSIS The following is a narrative overview and analysis of the City of Chino Hills' financial statements for the fiscal year ended June 30, 2012. Information presented here should be taken into consideration with additional information furnished in the letter of transmittal and the City's financial statements. FINANCIAL HIGHLIGHTS • • The total net assets of the City of Chino Hills decreased $3.0 million from $491.1 million to $488.1 million in the fiscal year 2011-12. • The City's governmental funds combined ending fund balances decreased$6.0 million from$52.1 million to$46.1 million at June 30, 2012. Of this$46.1 million, $9.8 million was nonspendable, $29.6 million was restricted,$14.3 million was committed, $1.6 million was assigned and ($9.2)million was unassigned. USING THIS ANNUAL REPORT This annual report consists of a series of financial statements. The Statement of Net Assets and Statement of Activities provide information about the activities of the City as a whole, and present a long-term view of the City's finances. Fund financial statements are next. For governmental activities, these fund statements tell how these services were financed in the short term as well as what remains for future spending. Fund financial statements also report the City's operation in more detail than the government-wide statements by providing information about the City's most significant funds and other funds. The remaining fiduciary(Agency) fund statement provides financial information about activities for which the City acts solely as a trustee or agent for the benefit of those outside of the government. REPORTING THE CITY AS A WHOLE The Statement of Net Assets and the Statement of Activities: The Statement of Net Assets and the Statement of Activities report information about the City as a whole and about its activities. These statements include all assets and liabilities of the City using the accrual basis of accounting, which is similar to the accounting used by most private-sector companies. All of the current year's revenues and expenses are taken into account regardless of when cash is received or paid. These two statements report the City's net assets and changes. Net assets are the difference between assets and liabilities, which is one way to measure the City's financial health, or financial position. Over time, increases or decreases in the City's net assets are an indication of whether its financial health is improving or deteriorating. However, other non- financial factors such as changes in the economy due to external factors that will cause a decrease in consumer spending also needs to be taken into consideration. In the Statement of Net Assets and the Statement of Activities,the City's activities are separated as follows: Governmental activities — Most of the City's basic services are reported in this category, including the general government (city manager, city clerk, and finance), public safety (police protection), public works, community development, cultural and leisure, and interest on long-term debt. Property taxes, sales tax, motor vehicle in-lieu fees, interest income, franchise fees, state and federal grants, contributions from other agencies, and other revenues finance these activities. Business-type activities — The City charges a fee to customers to cover all or most of the cost of certain services it provides. The City's water and sewer utilities are reported in this category. REPORTING THE CITY'S MOST SIGNIFICANT FUNDS Fund Financial Statements: The fund financial statements provide detailed information about the most significant funds and other funds—not the City as a whole. Some funds are required to be established by State law and by bond covenants. However, management established many other funds to help it control and manage money for particular purposes or to show that it is meeting legal responsibilities for using certain taxes, grants, and other resources. The City's two types of funds are governmental and proprietary. 3 Governmental funds-Most of the City's basic services are reported in governmental funds, which focus on how money flows in and out of those funds and the balances left at year-end that are available for spending. These funds are reported using an accounting method called modified accrual accounting, which measures cash and all other financial assets that can readily be converted to cash. The governmental fund statements provide a detailed short-term view of the City's general government operations and the basic services it provides. Governmental fund information helps determine whether there are more or fewer financial resources that can be spent in the near future to finance the City's programs. The differences of results in the Governmental Fund financial statements to those in the Government-Wide financial statements are explained in a reconciliation following each Governmental Fund financial statement. Proprietary funds-When the City charges customers for the services it provides, these services are generally reported in proprietary funds. Proprietary funds are reported in the same way that all activities are reported in the Statement of Net Assets and the Statement of Activities. In fact, the City's enterprise funds are the same as the business-type activities that are reported in the government-wide statements but provide more detail and additional information such as a statement of cash flows. THE CITY AS TRUSTEE Reporting the City's Fiduciary Responsibilities: The City is the trustee, or fiduciary, for certain funds held on behalf of those entities outside of the government. The City's fiduciary activities are reported in a separate Statement of Fiduciary Net Assets. These activities are excluded from the City's other financial statements because the City cannot use these assets to finance its operations. The City is responsible for ensuring that the assets reported in these funds are used for their intended purposes. THE CITY AS A WHOLE The following is an analysis that summarizes the City's net assets(Exhibit A)at fiscal year ended June 30,2012, and 2011, respectively: Exhibit A Net Assets(Summarized) As of June 30, 2012 and 2011 (in thousands) Governmental Business-Type Activities Activities Totals 2012 2011 2012 2011 2012 2011 Change Current and other assets $ 55,949 $ 66,053 $ 69,689 $ 65,501 $ 125,638 $ 131,554 $ (5,916) Capital&intangible assets 310,427 319,739 127,133 129,975 437,560 449,714 (12,154) Total Assets $ 366,376 $ 385,792 $ 196,822 $ 195,476 $ 563,198 $ 581,268 $ (18,070) Long-Term Liabilities Outstanding $ 51,244 $ 60,167 $ 16,921 $ 18,069 $ 68,165 $ 78,236 $ (10,071) Other Liabilities 3,701 8,988 3,244 2,956 6,945 11,944 (4,999) Total Liabilities $ 54,945 $ 69,155 $ 20,165 $ 21,025 $ 75,110 $ 90,180 $ (15,070) Net Assets: Invested in capital assets, net of related debt $ 261,744 $ 260,831 $ 110,459 $ 112,137 $ 372,203 $ 372,968 $ (765) Restricted 29,590 22,773 892 892 30,482 23,665 6,817 Unrestricted 20,097 33,033 65,306 61,422 85,403 94,455 (9,052) Total Net Assets $ 311.431 $ 316,637 $ 176,657 $ 174,451 $ 488,088 $ 491,088 $ (3,000) During FY 2011-12, current and other assets decreased by $5.9 million. This was primarily due to the developer agreement debt payments of$6.9 million. Capital and intangible assets decreased by $12.2 million. This was primarily due to the increase in Accumulated Depreciation of capital assets for FY 2011-12. The overall result was a decrease of $18.1 million in the total assets from $581.3 million to $563.2 million in the FY 2011-12. The total liabilities decrease by $15.1 million which was primarily attributed to the restructuring and pay down of developer reimbursement agreement debt of$7.8 million and the 2007 COP debt services of$2.5 million. The overall result was a total net assets decrease of $3.0 million from $491.1 million to$488.1 million in the fiscal year 2011-12. 4 The following is a summary of Statements of Activities that records the Changes in Net Assets (Exhibit B): Exhibit B Changes in Net Assets As of June 30,2012 and 2011 (in thousands) Governmental Business-Type Activities Activities Totals 2012 2011 2012 2011 2012 2011 Change Revenues: Program Revenues: Charges for services $ 13,935 $ 13,883 $ 26,475 $ 23,559 $ 40,410 $ 37,442 $ 2,968 Operating contributions and grants 6,284 4,707 - - 6,284 4,707 1,577 Capital contributions and grants 12,767 9,253 324 - 13,091 9,253 3,838 General Revenues: Property taxes 10,236 10,193 - - 10,236 10,193 43 Sales taxes 6,670 6,423 - - 6,670 6,423 247 Franchise taxes 2,128 2,039 - - 2,128 2,039 89 Business license taxes 142 146 - - 142 146 (4) Other taxes 825 780 - - 825 780 45 Intergovmntl.,unrestricted 39 361 - - 39 361 (322) Use of money and prop. 1,324 1,454 312 373 1,636 1,827 (191) Gain(loss)on disp.of capital assets - 6 - - - 6 (6) Other Revenues 381 594 4,027 4,419 4,408 5,013 (605) Total Revenues 54.731 49,839 31,138 28,351 85,869 78,190 7,679 Expenses: General government 10,796 8,966 - - 10,796 8,966 1,830 Public safety 11,777 11,456 - - 11,777 11,456 321 Public works 30,320 40,156 - - 30,320 40,156 (9,836) Community development 2,306 5,058 - - 2,306 5,058 (2,752) Culture and leisure 4,703 4,652 - - 4,703 4,652 51 Interest on long-term debt 1,090 1,273 - - 1,090 1,273 (183) Water Utility - - 21,541 20,834 21,541 20,834 707 Sewer Utility - - 6,399 6,210 6,399 6,210 189 Total Expenses 60.992 71,561 27,940 27.044 88,932 98,605 (9,673) Increase(Decrease)in Net Assets Assets Before Transfers (6,261) (21,722) 3,198 1,307 (3,063) (20,415) 17,352 Transfers 991 470 (991) (470) - - - Restatement of Net Assets 64 - - - 64 - 64 Increase(Decrease)in Net Assets $ (5,206) $ (21,252) $ 2,207 $ 837 $ (2,999) $ (20,415) $ 17,416 The net increase in the total revenues of $7.7 million as compared to FY 2010-11 is due to the $3.0 million increase charges for services which is mainly attributed to water sales revenue in the Water Utility Fund, a$1.5 million increase in operating contributions and grants which is mainly attributed to receipt of the Federal Highway Grant associated with the Peyton/Eucalyptus project, and an increase of$3.8 million in capital contributions and grants which is mainly attributed to a $3.6 million increase in contributions from Community Facilities Districts for accumulated special tax revenue to be spent on infrastructure. As for the total expenses in FY 2011-12, overall expenses decreased by $9.7 million as compared to last fiscal year. Expenses for Public Works decreased by $9.8 million due to significant one time expenditures that occurred in FY 2010- 11 that did not occur in FY 2011-12. The one-time expenditures include a$4.6 million developer agreement payment and $6.7 million in Capital Outlay expenditures that were not capitalized. The increase in General Governmental expense is primarily due to the $1.2 million retrospective deposit payable for the California Joint Powers Insurance Authority. The decrease in Community development expense is primarily due to the FY 2010-11 $2.3 million reconciliation adjustment for assessment district program debt that did not occur in FY 2011-12. 5 Governmental Activities The following presents the cost of each of the City's six largest programs—general government, public safety, community development, culture and leisure, public works and interest on long-term debt—as well as each program's net cost (total cost less revenues generated by the activities). The net cost shows the financial burden that was placed on the City's taxpayers by each of these functions. Exhibit C Governmental Activities As of June 30, 2012 and 2011 (in thousands) 2012 2011 Change Total Cost of Services General government $ 10,796 $ 8,966 $ 1,830 Public safety 11,777 11,456 321 Public works 30,320 40,156 (9,836) Community development 2,306 5,058 (2,752) Culture and leisure 4,703 4,652 51 Interest on long-term debt 1,090 1,273 (183) Total $ 60,992 $ 71,561 $ (10,569) Net Cost of Services 2012 2011 Change General government $ (557) $ (2,260) $ 1,703 Public safety (11,072) (10,657) (415) Public works (11,711) (22,794) 11,083 Community development (38) (3,274) 3,236 Culture and leisure (3,539) (3,460) (79) Interest on long-term debt (1,090) (1,273) 183 Total $ (28,007) $ (43,718) $ 15,711 THE CITY'S FUNDS The total fund balance of the governmental funds was $46.1 million. The fund balance includes the General Fund, Major Special Revenue Funds and non-major Other Governmental Funds which accounts for the remainder of governmental fund balances. The General Fund, which has the largest fund balance of the governmental funds at $21.1 million, decreased by $.8 million compared to FY 2010-11. The decrease can be primarily attributed to the $1.6 million restatement of administrative overhead fees. The Major Special Revenue Funds accounting for ($.4) million of the governmental fund balance decreased by $6.7M compared to FY 2010-11. The decrease can be primarily attributed to a $6.6 million decrease in the Existing Infrastructure Fees Fund as a result of developer agreement debt payments. The non-major Other Governmental Funds account for the remainder of governmental fund balances of $25.4 million. The aggregate increase in these funds is $6.6 million which is mainly attributed to the reclassification of the Water Facilities Fee Fund and Capital Improvement Funds from a Major Special Revenue Fund to a Non-major Other Governmental Fund. The total net assets of the Enterprise Funds was $176.6 million, This represents a$2.2 million increase from FY 2010-11. The Enterprise Funds include the Water Utility Fund and the Sewer Utility Fund. The increase in net assets is mainly attributable to an increase in operating revenues. General Fund Budgetary Highlights During the year, the City Council reviewed and revised the City budget as recommended by the staff. Adjustments were made on a quarterly basis as the City's staff requested additional appropriations to cover the cost of projects that either had change orders for additional work, or the estimated cost at the beginning of the project was underestimated. Adjustments were also made as department heads requested increases or decreases to their budgets to maintain their current level of services. The City Manager has authority to increase or decrease appropriations up to $10,000 per 6 departmental request. Additionally, the City Manager is authorized to transfer appropriations within a department without limitation. All amendments in excess of$10,000 are approved by the City Council. CAPITAL ASSET AND DEBT ADMINISTRATION Capital Assets The City of Chino Hills had $437.6 million invested in the capital assets, as compared to $449.7 million in the prior year. Net decrease in the capital assets is approximately$12.2 million. Exhibit D Capital Assets at Year-End • (Net of Depreciation) For the Year Ended June 30,2012 and 2011 (in thousands) Governmental Business-Type Activities Activities Totals 2012 2011 2012 2011 2012 2011 Change Land and easements $ 26,694 $ 26,694 $ 3,933 $ 3,933 $ 30,627 $ 30,627 $ - Construction-in-progress 6,061 19,520 2,002 4,667 8,063 24,187 (16,124) Structures and 105,055 107,440 733 777 105,788 108,217 (2,429) improvements Utility plant in service - - 22,468 20,210 22,468 20,210 2,258 Meters - - 3,695 3,239 3,695 3,239 456 Pipeline in service 171 176 82,536 84,979 82,707 85,155 (2,448) Equipment 1,950 1,839 116 84 2,066 1,923 143 Vehicle 1,600 1,662 - - 1,600 1,662 (62) infrastructure 168,896 162,408 - - 168,896 162,408 6,488 Water&capacity rights - - 11,650 12,086 11,650 12,086 (436) Total $ 310,427 $ 319,739 $ 127,133 $ 129,975 $ 437,560 $ 449,714 $ (12,154) The decrease was primarily due to the increase in Accumulated Depreciation of Capital Assets for FY 2011-12. For more detailed information, see note 6 to the financial statements. Debt At year-end, the City's governmental activities had $51.2 million in long-term debts including development fee related obligations, capital lease obligations, other post employment benefits obligation, certificates of participations and compensated absences, as compared to $60.2 million in prior year, a net decrease of$8.9 million during the fiscal year. Please refer to Note 7 for further details on the City's long-term liabilities. Exhibit E Outstanding Debt at Year-End For Fiscal Year Ended June 30,2012 and 2011 (in thousands) Governmental Business-Type Activities Activities Total 2012 2011 2012 2011 2012 2011 Change Compensated absences $ 842 $ 850 $ 244 $ 228 $ 1,086 $ 1,078 $ 8 Advances from developers 774 774 - - 774 774 - Advances for construction - - - - - - - Development fee program obligations 28,827 36,430 3 3 28,830 36,433 (7,603) Capital lease obligations 128 219 - - 128 219 (91) Other post employment benefits obligation 509 410 509 410 99 Certificates of Participation 18,920 21,445 17,395 18,675 36,315 40,120 (3,805) CJPIA General Liability restrospective deposit payable 1,210 - - - 1,210 - 1,210 Less: Deferred amount on Refunding - - (652) (761) (652) (761) 109 Bond premium/discount 34 39 (70) (75) (36) (36) - Total $ 51.244 $ 60,167 $ 16.920 $ 18.070 $ 68.164 $ 78,237 $ (10.073) 7 The majority of the obligations under the governmental activities were development related ($28.8 million) and owed to developers who had previously installed major infrastructure throughout the City. For the obligations under the business-type activities, the City had $16.9 million in long-term debts and they were recorded in the Water Utility fund. ECONOMIC FACTORS AND NEXT YEAR'S BUDGET Although the focus of this Annual Report is the economic condition of the City in the fiscal year ended June 30, 2012, in preparing the budget for FY 2012-13, management considered the possible impact that the State of California and the national economies will have on the City's budget, Unfortunately, there is no consensus, at any level, as to the depth and length of this current downturn,which presented a challenge to the preparation of the City's adopted budget. The overall approach in the development of the FY 2012-13 budget was to reduce expenditures where possible while continuing to maintain Chino Hills' high level of community safety and customer service. The State of California has not addressed its on-going fiscal structural deficit problem. The FY 2012-13 adopted budget, does not provide for further State"takeaways"affecting the General Fund. Due to the uncertainty regarding the State Budget and wide range of potential reductions, it is difficult to determine the fiscal impact to the City at this time. Key budget assumptions for forecasting General Fund operating budget in FY 2012-13 include the following: • The revenue forecasts anticipated effects of the national recession and the slowdown in new development as the City matures. • The budget for property taxes provides for an overall increase of 3.9%from prior year final budget in anticipation of a slight increase from new development. • The Sales tax projection was increased 12.7%from the FY 2011-12 original budget projections. This estimate assumes increases in merchant occupancy in both"The Shoppes in Chino Hills"and"The Commons"shopping centers, as well as an overall increase in retail activity as the economy turns around. • Significant cuts were made during the development of the budget, including vacant positions not funded, requests for new positions denied, major reduction in the use of consultants, deferred maintenance on streets, landscape, infrastructure and deferred funding on some capital improvement programs. • Investment earnings were budgeted at a rate of return of 0.6 percent. The Operating Budget for FY 2012-13 approves the use of$.4 million of general fund reserves which reflects the City's commitment to foster steady, controlled growth and provide the highest level of service to the community within the City's financial constraint and is consistent with the City Council's goals and objectives. Questions or requests for information regarding the City of Chino Hills'2012-13 budget should be sent to the Finance Department at the address below. CONTACTING THE CITY'S FINANCIAL MANAGEMENT This financial report is designed to provide our citizens, taxpayers, customers, investors, and creditors with a general overview of the City of Chino Hills' finances and to show the City's accountability for the money it receives. Questions concerning any of the information provided in this report or requests for additional financial information should be addressed to the City's Finance Department, at the City of Chino Hills, 14000 City Center Drive, Chino Hills, CA 91709. 8 Asir y-10 Cif) of Chino Hills California BASIC FINANCIAL STATEMENTS CITY OF CHINO HILLS STATEMENT OF NET ASSETS JUNE 30,2012 , Primary Government Governmental Business-Type Activities Activities Total Assets: Cash and investments $ 62,655,715 $ 31,542,552 $ 94,198,267 Receivables: Accounts 1,164,458 3,029,207 4,193,665 Taxes 2,528,677 - 2,528,677 Long-term receivable 152,948 - 152,948 Accrued interest 20,309 15,076 35,385 Special assessments 59,958 - 59,958 Internal balances (18,669,222) 18,669,222 - Due from other agencies 247,090 - 247,090 Due from other governments 1,509,2341,509,234 Due from developers 2,262,970 901,584 3,164,554 Prepaid costs 28,262 - 28,262 Deferred charges 191,903 344,454 536,357 Investment in joint venture - 14,294,623 14,294,623 Restricted assets: Cash with fiscal agent 3,797,279 891,788 4,689,067 Capital assets not being depreciated 32,754,577 5,934,907 38,689,484 Capital assets, net of depreciation 277,672,253 121,198,215 398,870,468 Total Assets 366,376,411 196,821,628 563,198,039 Liabilities: Accounts payable 2,355,712 1,442,243 3,797,955 Accrued liabilities 735,105 125,976 861,081 Accrued interest 298,992 66,196 365,188 Retentions payable 86,682 - 86,682 Due to developers 141,131 - 141,131 Unearned revenue 71,581 - 71,581 Deposits payable 11,720 1,609,474 1,621,194 Noncurrent liabilities: Due within one year 690,763 1,331,500 2,022,263 Due in more than one year 50,553,488 15,589,046 66,142,534 Total Liabilities 54,945,174 20,164,435 75,109,609 Net Assets: Invested in capital assets, net of related debt 261,743,969 110,459,489 372,203,458 Restricted for: Community development projects 3,589,988 - 3,589,988 Public safety 15,316 - 15,316 Public works 13,541,485 - 13,541,485 Capital projects 9,064,308 - 9,064,308 Debt service 1,494,340 891,788 2,386,128 English channel 1,885,000 - 1,885,000 Unrestricted 20,096,831 65,305,916 85,402,747 Total Net Assets $ 311,431,237 $ 176,657,193 $ 488,088,430 See Notes to Financial Statements 9 CITY OF CHINO HILLS STATEMENT OF ACTIVITIES YEAR ENDED JUNE 30,2012 Program Revenues Operating Capital Charges for Contributions Contributions Expenses Services and Grants and Grants Functions/Programs Primary Government: Governmental Activities: General government $ 10,796,216 $ 4,657,938 $ 739,003 $ 4,842,193 Public safety 11,776,645 562,197 142,984 Community development 2,306,428 619,127 1,649,340 - Culture and leisure 4,702,555 1,163,550 Public works 30,320,176 6,932,375 3,752,544 7,924,731 Interest on long-term debt 1,090,459 - - - Total Governmental Activities 60,992,479 13,935,187 6,283,871 12,766,924 Business-Type Activities: Water Utility 21,540,857 20,922,012 - 300,955 Sewer Utility 6,398,875 5,553,029 - 22,834 Total Business-Type Activities 27,939,732 26,475,041 - 323,789 Total Primary Government $ 88,932,211 $ 40,410,228 $ 6,283,871 $ 13,090,713 General Revenues: Taxes: Property taxes,levied for general purpose Sales taxes Franchise taxes Business licenses taxes Other taxes Intergovernmental,unrestricted: Motor vehicle in lieu-unrestricted Use of money and property Other Transfers Total General Revenues and Transfers Change in Net Assets Net Assets at Beginning of Year Restatement of Net Assets Net Assets at End of Year See Notes to Financial Statements 10 Net(Expenses)Revenues and Changes in Net Assets Primary Government Governmental Business.Type Activities Activities Total $ (557,082) $ - $ (557,082) (11,071,464) - (11,071,464) (37,961) - (37,961) (3,539,005) - (3,539,005) (11,710,526) - (11,710,526) (1,090,459) - (1,090,459) (28,006,497) - (28,006,497) (317,890) (317,890) (823,012) (823,012) (1,140,902) (1,140,902) (28,006,497) (1,140,902) (29,147,399) 10,236,250 - 10,236,250 6,670,479 - 6,670,479 2,127,570 - 2,127,570 141,716 - 141,716 824,544 - 824,544 39,069 - 39,069 1,324,713 311,535 1,636,248 381,015 4,026,926 4,407,941 991,070 (991,070) - 22,736,426 3,347,391 26,083,817 (5,270,071) 2,206,489 (3,063,582) 316,637,242 174,450,704 491,087,946 64,066 - 64,066 $ 311,431,237 $ 176,657,193 $ 488,088,430 See Notes to Financial Statements 11 CITY OF CHINO HILLS BALANCE SHEET GOVERNMENTAL FUNDS JUNE 30,2012 ', Special Revenue Funds Landscape Existing and Lighting Infrastructure General District Fees Assets: Cash and investments $ 29,394,369 $ 7,275,601 $ 985,113 Receivables: Accounts 303,553 42,648 - Taxes 2,308,939 - - Long-term receivable 152,948 - - Accrued Interest 10,519 2,607 - Special assessments - 56,667 - Prepaid costs 28,262 - - Due from other agencies 243,021 - - Due from other governments 79,467 - - Due from developers 618,843 - 1,590,999 Due from other funds 230,665 - - Advances to other funds 174,435 - - Restricted assets: Cash and investments with fiscal agents 3,394,764 - - Total Assets $ 36,939,785 $ 7,377,523 $ 2,576,112 Liabilities and Fund Balances: Liabilities: Accounts payable $ 247,626 $ 401,379 $ - Accrued liabilities 634,647 35,427 - Retention payable - - - Due to other funds 3,088 20,516 - Due to developers - - 141,131 Deferred revenues 1,607,249 - - Unearned revenues - - - Deposits payable 11,720 - - Advances from other funds 13,342,730 - 9,769,480 Total Liabilities 15,847,060 457,322 9,910,611 Fund Balances: Nonspendable: Prepaid costs 28,262 - - Advances to other funds 174,435 - - Restricted for: Community development projects - - - Public safety - - - Public works - 6,920,201 - Capital Projects 1,618,950 - - Debt service 1,494,340 - - English Channel 1,885,000 - - Committed to: Emergencies and contingencies 10,157,425 - - Cash flow contingency 3,990,000 - - Operational contingency 100,000 - - Assigned to: General Government 298,288 - - CIP special projects 1,346,025 Unassigned - - (7,334,499) Total Fund Balances 21,092,725 6,920,201 (7,334,499) Total Liabilities and Fund Balances $ 36,939,785 $ 7,377,523 $ 2,576,112 See Notes to Financial Statements 12 CITY OF CHINO HILLS BALANCE SHEET GOVERNMENTAL FUNDS JUNE 30,2012 Other Total Governmental Governmental Funds Funds Assets: Cash and investments $ 21,618,861 $ 59,273,944 Receivables: Accounts 797,421 1,143,622 Taxes 219,738 2,528,677 Long-term receivable - 152,948 Accrued interest 6,066 19,192 i Special assessments 3,291 59,958 Prepaid costs - 28,262 Due from other agencies - 243,021 Due from other governments 1,429,767 1,509,234 Due from developers 53,128 2,262,970 Due from other funds - 230,665 Advances to other funds 9,646,249 9,820,684 Restricted assets: Cash and investments with fiscal agents 402,515 3,797,279 Total Assets $ 34,177,036 $ 81,070,456 Liabilities and Fund Balances: Liabilities: Accounts payable $ 1,567,884 $ 2,216,889 Accrued liabilities 40,348 710,422 Retention payable 86,682 86,682 Due to other funds 239,185 262,789 Due to developers - 141,131 Deferred revenues 1,449,258 3,056,507 Unearned revenues 71,581 71,581 Deposits payable - 11,720 Advances from other funds 5,297,179 28,409,389 Total Liabilities 8,752,117 34,967,110 Fund Balances: Nonspendable: Prepaid costs - 28,262 Advances to other funds 9,646,249 9,820,684 Restricted for: Community development projects 3,589,988 3,589,988 Public safety 15,316 15,316 Public works 6,621,284 13,541,485 Capital Projects 7,445,358 9,064,308 Debt service - 1,494,340 English Channel - 1,885,000 Committed to: Emergencies and contingencies - 10,157,425 Cash flow contingency - 3,990,000 Operational contingency - 100,000 Assigned to: General Government - 298,288 CIP special projects - 1,346,025 Unassigned (1,893,276) (9,227,775) Total Fund Balances 25,424,919 46,103,346 Total Liabilities and Fund Balances $ 34,177,036 $ 81,070,456 See Notes to Financial Statements 13 M0•a. t .. may( ; � [ } f ".t .T1 , r••� !F i t Y 1 T� % .'i k t '�_ Q-i if ' } , .., f••. -_ r q z •x.;•743 e' ! a'i. s•" 4n e . CITY OF CHINO HILLS I INCQRPORATED 1 9 9 1 THIS PAGE INTENTIONALLY LEFT BLANK 14 CITY OF CHINO HILLS RECONCILIATION OF THE BALANCE SHEET OF GOVERNMENTAL FUNDS TO THE STATEMENT OF NET ASSETS JUNE 30,2012 Fund balances of governmental funds $ 46,103,346 Amounts reported for governmental activities in the statement of net assets are different because: Capital assets net of depreciation have not been included as financial resources in governmental fund activity. Capital Assets 473,223,500 Accumulated Depreciation (164,818,996) 308,404,504 Governmental funds report all OPEB contributions as expenditures, however in the Statement of Net Assets any excesses or deficiencies in contributions in relation to the Annual Required Contribution (ARC)are recorded as an asset or liability. (509,334) Bond issuance cost is an expenditure in the governmental funds, but it is a deferred charge in the statement of net assets. 191,903 Long-term debt and compensated absences that have not been included in the governmental fund activity: Long-term liabilities Advances from developers $ (773,756) Development fee program obligations (28,826,854) Certificates of participation (18,920,000) Unamortized premium (34,348) Equestrian center lease (10) CJPIA General liability retrospective payable (1,209,594) (49,764,562) Compensated absences (809,612) Accrued interest payable for the current portion of interest due on bonds that have not been reported in the governmental funds. (298,992) Revenues reported as deferred revenue in the governmental funds are recognized in the Statement of Activities.These are included in the Intergovernmental revenues in the governmental fund activity. 3,056,507 Internal service funds are used by management to charge the costs of certain activities, such as equipment management and self-insurance,to individual funds. The assets and liabilities of the internal service funds must be added to the statement of net assets. 5,057,477 Net assets of governmental activities $ 311,431,237 See Notes to Financial Statements 15 CITY OF CHINO HILLS STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES GOVERNMENTAL FUNDS YEAR ENDED JUNE 30,2012 , Special Revenue Funds Landscape Existing and Lighting Infrastructure General District Fees Revenues: Taxes $ 19,964,017 $ - $ - Special assessments - 5,392,507 - Licenses and permits 616,552 - - Intergovernmental 57,967 - - _ Charges for services 6,252,949 1,605,997 - Developer fees - - 249,870 Contributions from property owners 1,154,531 - - Fines and forfeitures 550,199 - - Contributions - - - Use of money and property 1,143,285 40,546 3,413 Miscellaneous 861,076 42,302 - Total Revenues 30,600,576 7,081,352 253,283 Expenditures: Current: General government 8,030,951 - - Public safety 11,382,412 - - Public works 3,853,483 7,886,949 - Community development 2,514,475 - 221,859 Culture and leisure 3,129,058 - - Capital outlay 40,070 426,013 - Debt service: Principal retirement 829,850 - 6,606,396 Interest and fiscal charges 1,005,395 - 51,837 Total Expenditures 30,785,694 8,312,962 6,880,092 Excess(Deficiency)of Revenues Over(Under)Expenditures (185,118) (1,231,610) (6,626,809) Other Financing Sources(Uses): Transfers in 3,362,992 416,718 - Transfers out (2,364,504) (997,697) - Long-term debt issued - - 117,433 Total Other Financing Sources (Uses) 998,488 (580,979) 117,433 Net Change in Fund Balances 813,370 (1,812,589) (6,509,376) Fund Balances, Beginning of Year 21,892,247 8,732,790 (2,438,015) Restatements (1,612,892) - 1,612,892 Fund Balances, Beginning of Year 20,279,355 8,732,790 (825,123) Fund Balances, End of Year $ 21,092,725 $ 6,920,201 $ (7,334,499) See Notes to Financial Statements 16 CITY OF CHINO HILLS STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES GOVERNMENTAL FUNDS YEAR ENDED JUNE 30,2012 Other Total Governmental Governmental Funds Funds Revenues: Taxes $ - $ 19,964,017 Special assessments 214,682 5,607,189 Licenses and permits - 616,552 Intergovernmental 6,220,983 6,278,950 Charges for services 166,616 8,025,562 Developer fees 120,371 370,241 Contributions from property owners 4,372,424 5,526,955 Fines and forfeitures 3,144 553,343 Contributions 198,192 198,192 Use of money and property 4,410,321 5,597,565 Miscellaneous 96,258 999,636 Total Revenues 15,802,991 53,738,202 Expenditures: Current: General government 9,339 8,040,290 Public safety 124,976 11,507,388 Public works 97,275 11,837,707 Community development 8,780,351 11,516,685 Culture and leisure 261,847 3,390,905 Capital outlay 3,618,783 4,084,866 Debt service: Principal retirement 1,965,000 9,401,246 Interest and fiscal charges 61,373 1,118,605 Total Expenditures 14,918,944 60,897,692 Excess(Deficiency)of Revenues Over(Under)Expenditures 884,047 (7,159,490) Other Financing Sources(Uses): Transfers in 6,399,514 10,179,224 Transfers out (5,745,753) (9,107,954) Long-term debt issued - 117,433 Total Other Financing Sources (Uses) 653,761 1,188,703 Net Change in Fund Balances 1,537,808 (5,970,787) Fund Balances, Beginning of Year 23,887,111 52,074,133 Restatements - - Fund Balances, Beginning of Year 23,887,111 52,074,133 Fund Balances,End of Year $ 25,424,919 $ 46,103,346 See Notes to Financial Statements 17 ..fry, :° . : , '3 4 ` avie sp = ! �r.' pp�, c i[• uti �, Nti, S3 w $ ' ci ^ Qf 7�y ate . , T. a}w •.A&it 4,f '`_! 4.x<y r'.` r., yr,� E ' L.rig z?'ly�' • ".14,x '! ',,..:-...4 ,. f ''�s '4'�>: CITY OF CHINO HILLS INCORPORATED 19 9 1 ' THIS PAGE INTENTIONALLY LEFT BLANK 18 CITY OF CHINO HILLS RECONCILIATION OF THE STATEMENT OF REVENUES,EXPENDITURES, AND CHANGES IN FUND BALANCES OF GOVERNMENTAL FUNDS TO THE STATEMENT OF ACTIVITIES YEAR ENDED JUNE 30, 2012 Net change In fund balances-total governmental funds. $ (5,970,787) Amounts reported for governmental activities in the statement of activities are different because: Governmental funds report capital outlays as expenditures, However, In the statement of activities, the costs of those assets is allocated over their estimated useful lives as depreciation expense. This is the amount by which capital outlays exceeded depreciation In the current period. Capital outlay $ 3,737,226 Depreciation expense (12,942,702) Disposal of capital assets (13,974) (9,219,450) The Issuance of long-term debt provides current financial resources to governmental funds, while repayment of principal of long-term debt consumes the current financial resources of governmental funds. Neither transaction,however, has any effect on net assets.Also, governmental funds report the effect of issuance costs, premiums, discounts and similar Items when debt Is first issued,whereas these amounts are deferred and amortized in the statement of activities. Debt issued or incurred: Development fee program obligations (160,856) CJPIA General liability restrospective payable (1,209,594) Principal repayments: Certificates of participation 2,525,000 Equestrian center lease 1 Development fee program obligations 7,764,355 Cost of issuance amortization (7,703) Bond premium amortization 5,029 8,916,232 Accrued interest for long-term liabilities.This is the net change In accrued Interest for the current period, 38,117 • Compensated absences expenses reported in the statement of activities do not require the use of current financial resources and, therefore,are not reported as expenditures in governmental funds. 6,832 Governmental funds report all contributions in relation to the annual required contribution (ARC)for OPEB as expenditures, however in the Statement of Activities only the ARC Is an expense. (99,971) Revenues reported as deferred revenue in the governmental funds are recognized in the Statement of Activities.These are included in the intergovernmental revenues in the governmental fund activity. 920,718 Internal service funds are used by management to charge the costs of certain activities,such as equipment management and self-insurance, to individual funds. The net revenues(expenses)of the internal service funds Is reported with governmental activities. 138,238 Change In net assets of governmental activities $ (5,270,071) See Notes to Financial Statements 19 CITY OF CHINO HILLS BUDGETARY COMPARISON STATEMENT GENERAL FUND YEAR ENDED JUNE 30,2012 , Variance with Final Budget Budget Amounts Actual Positive Original Anal Amounts (Negative) Budgetary Fund Balance,July 1,as restated $20,279,355 $20,279,355 $20,279,355 $ - Resources(Inflows): Taxes 19,555,800 19,994,100 19,964,017 (30,083) Licenses and permits 940,000 639,300 616,552 (22,748) Intergovernmental 256,600 - 57,967 57,967 Charges for services 6,853,000 6,296,000 6,252,949 (43,051) Contributions from property owners 1,300,000 1,300,000 1,154,531 (145,469) Fines and forfeitures 578,000 578,000 550,199 (27,801) Use of money and property 981,600 1,076,300 1,143,285 66,985 Miscellaneous 1,107,500 1,100,100 861,076 (239,024) Transfers In 1,077,700 3,136,300 3,362,992 226,692 Amounts Available for Appropriation 52,929,555 54,399,455 54,242,923 (156,532) Charges to Appropriation(Outflow): General government City council 239,000 247,500 234,685 12,815 City manager 1,549,800 2,240,700 1,974,684 266,016 City clerk 810,200 884,600 874,235 10,365 City attorney 350,000 358,800 358,730 70 Finance 2,117,900 2,147,200 2,008,225 138,975 Risk management 1,367,300 1,392,800 1,326,310 66,490 Human resource 422,500 425,600 359,549 66,051 Non-departmental 79,700 79,700 57,176 22,524 Public works administration 868,500 890,000 837,357 52,643 Public safety Emergency preparedness 162,900 163,700 157,090 6,610 Neighborhood services 824,600 831,600 785,011 46,589 Code enforcement 368,500 373,300 349,942 23,358 Law enforcement 10,432,700 10,410,800 10,090,369 320,431 Community development Community development 1,062,100 1,012,500 984,512 27,988 Building and safety 1,000,700 870,300 867,427 2,873 Planning 1,107,200 823,600 631,491 192,109 Economic development 58,500 33,500 31,045 2,455 Culture and leisure Recreation 2,533,700 2,555,200 2,364,265 190,935 Community services administration 774,700 803,600 764,793 38,807 Public works Public facilities and operations 2,038,000 2,253,700 2,147,631 106,069 Engineering 1,783,600 1,804,100 1,705,852 98,248 Capital outlay 31,900 41,100 40,070 1,030 Debt service: Principal retirement 882,700 882,700 829,850 52,850 Interest and fiscal charges 1,014,600 1,014,600 1,005,395 9,205 Transfers out 1,697,700 3,748,800 2,364,504 1,384,296 Total Charges to Appropriations 33,579,000 36,290,000 33,150,198 3,139,802 Budgetary Fund Balance,June 30 $19,350,555 $18,109,455 $21,092,725 $ 2,983,270 See Notes to Financial Statements 20 CITY OF CHINO HILLS BUDGETARY COMPARISON STATEMENT LANDSCAPE AND LIGHTING DISTRICT YEAR ENDED JUNE 30,2012 , Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) Budgetary Fund Balance,July 1 $8,732,790 $ 8,732,790 $8,732,790 $ - Resources(Inflows): Special assessments 5,373,000 5,373,000 5,392,507 19,507 Charges for services 1,644,300 1,644,300 1,605,997 (38,303) Use of money and property 58,600 58,600 40,546 (18,054) Miscellaneous - 300 42,302 42,002 Transfers in 1,844,200 2,116,700 416,718 (1,699,982) Amounts Available for Appropriation 17,652,890 17,925,690 16,230,860 (1,694,830) Charges to Appropriation(Outflow): Public works 8,017,300 8,147,400 7,886,949 260,451 Capital outlay 872,400 976,900 426,013 550,887 Transfers out 2,340,600 2,542,600 997,697 1,544,903 Total Charges to Appropriations 11,230,300 11,666,900 9,310,659 2,356,241 Budgetary Fund Balance,June 30 $6,422,590 $ 6,258,790 $6,920,201 $ 661,411 See Notes to Financial Statements 21 CITY OF CHINO HILLS BUDGETARY COMPARISON STATEMENT EXISTING INFRASTRUCTURE FEES YEAR ENDED JUNE 30,2012 Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) Budgetary Fund Balance,July 1,as restated $ (825,123) $ (825,123) $ (825,123) $ - Resources(Inflows): Developer fees 482,400 482,400 249,870 (232,530) Use of money and property 11,000 11,000 3,413 (7,587) Long-term debt issued 74,700 74,700 117,433 42,733 Amounts Available for Appropriation (257,023) (257,023) (454,407) (197,384) Charges to Appropriation(Outflow): Community development - 352,000 221,859 130,141 Debt service: Principal retirement - 6,606,400 6,606,396 4 Interest and fiscal charges - 74,700 51,837 22,863 Total Charges to Appropriations - 7,033,100 6,880,092 153,008 Budgetary Fund Balance,June 30 $ (257,023) $(7,290,123) $(7,334,499) $ (44,376) See Notes to Financial Statements 22 CITY OF CHINO HILLS STATEMENT OF NET ASSETS PROPRIETARY FUNDS JUNE 30,2012 , Business-Type Activities-Enterprise Funds Governmental Activities- Internal Water Utility Sewer Utility Totals Service Funds Assets: Current: Cash and investments $ 22,897,637 $ 8,644,915 $ 31,542,552 $ 3,381,771 Receivables: Accounts 2,444,784 584,423 3,029,207 20,836 Accrued interest 8,115 6,961 15,076 1,117 Due from other agencies - - - 4,069 Due from developers 901,584 - 901,584 - Due from other funds 29,936 2,224 32,160 - Restricted: Cash with fiscal agent 891,788 - 891,788 - Total Current Assets 27,173,844 9,238,523 36,412,367 3,407,793 Noncurrent: Advances to other funds - 18,588,705 18,588,705 - Deferred Charges 344,454 - 344,454 - Investment in joint venture 14,294,623 - 14,294,623 - Capital assets-net of accumulated depreciation 103,160,328 23,972,794 127,133,122 2,022,326 Total Noncurrent Assets 117,799,405 42,561,499 160,360,904 2,022,326 Total Assets $ 144,973,249 $ 51,800,022 $ 196,773,271 $ 5,430,119 See Notes to Financial Statements 23 CITY OF CHINO HILLS STATEMENT OF NET ASSETS PROPRIETARY FUNDS JUNE 30,2012 Business-Type Activities-Enterprise Funds Governmental Activities- Internal Water Utility Sewer Utility Totals Service Funds Liabilities and Net Assets: Liabilities: Current: Accounts payable $ 898,372 $ 543,871 $ 1,442,243 $ 138,823 Accrued liabilities 94,383 31,593 125,976 24,683 Accrued interest 66,196 - 66,196 - Deposits payable 1,266,969 342,505 1,609,474 - Due to other governments - - - - Due to other funds - 36 36 - Compensated absences 5,000 1,500 6,500 500 Capital leases - - - 95,262 Certificates of participation 1,325,000 - 1,325,000 - Total Current Liabilities 3,655,920 919,505 4,575,425 259,268 Noncurrent: Due to developers 3,099 - 3,099 - Compensated absences 173,711 63,603 237,314 32,349 Capital leases - - - 32,632 Certificates of participation 15,348,633 - 15,348,633 - Total Noncurrent Liabilities 15,525,443 63,603 15,589,046 64,981 Total Liabilities 19,181,363 983,108 20,164,471 324,249 Net Assets: Invested in capital assets,net of related debt 86,486,695 23,972,794 110,459,489 1,894,432 Restricted for debt service 891,788 - 891,788 - Unrestricted 38,413,403 26,844,120 65,257,523 3,211,438 Total Net Assets 125,791,886 50,816,914 176,608,800 5,105,870 Total Liabilities and Net Assets $ 144,973,249 $ 51,800,022 $ 196,773,271 $ 5,430,119 Reconciliation of Net Assets to the Statement of Net Assets Net Assets per Statement of Net Assets-Proprietary Funds $ 176,608,800 Prior years'accumulated adjustment to reflect the consolidation of internal service funds activities related to the enterprise funds 101,586 Current years'adjustments to reflect the consolidation of internal service activities related to enterprise funds (53,193) Net Assets per Statement of Net Assets $ 176,657,193 See Notes to Financial Statements 24 CITY OF CHINO HILLS STATEMENT OF REVENUES, EXPENSES AND CHANGES IN FUND NET ASSETS PROPRIETARY FUNDS YEAR ENDED JUNE 30,2012 Business-Type Activities-Enterprise Funds Governmental Activities- Internal Water Utility Sewer Utility Totals Service Funds Operating Revenues: Charges for services $ 20,922,012 $ 5,553,029 $ 26,475,041 $ 2,248,691 Meter Installation and fees 9,934 - 9,934 - Other 3,779,917 213,050 3,992,967 610 Total Operating Revenues 24,711,863 5,766,079 30,477,942 2,249,301 Operating Expenses: Salaries and benefits 2,445,111 858,623 3,303,734 671,030 Professional and contractual services 497,970 3,306,044 3,804,014 325,557 Purchased water 9,925,014 - 9,925,014 - Repair and maintenance 879,979 521,807 1,401,786 266,601 Service and supplies 253,469 47,854 301,323 253,109 Administrative and general expenses 1,853,637 467,296 2,320,933 161,086 Utilities 768,737 49,633 818,370 - Depreciation and amortization 3,932,471 1,128,143 5,060,614 624,742 Total Operating Expenses 20,556,388 6,379,400 26,935,788 2,302,125 Operating Income(Loss) 4,155,475 (613,321) 3,542,154 (52,824) Nonoperating Revenues(Expenses): Interest revenue 128,640 182,895 311,535 17,098 Interest expense (950,751) - (950,751) (7,297) Gain (loss)on disposal of capital assets 24,025 - 24,025 - Total Nonoperating Revenues(Expenses) (798,086) 182,895 (615,191) 9,801 Income(Loss)Before Contributions and Transfers 3,357,389 (430,426) 2,926,963 (43,023) Contributions from other funds 300,955 22,834 323,789 208,268 Transfers out (865,463) (125,607) (991,070) (80,200) Changes in Net Assets 2,792,881 (533,199) 2,259,682 85,045 Net Assets: Beginning of Year,as previously reported 122,999,005 51,350,113 174,349,118 4,956,759 Restatements - - - 64,066 Beginning of Fiscal Year, as restated 122,999,005 51,350,113 174,349,118 5,020,825 End of Fiscal Year $ 125,791,886 $ 50,816,914 $ 176,608,800 $ 5,105,870 Reconciliation of Changes in Net Assets to the Statement of Activities: Changes in Net Assets, per the Statement of Revenues, Expenses and Changes in Fund Net Assets-Proprietary Funds $ 2,259,682 Adjustment to reflect the consolidation of current fiscal year internal service funds activities related to enterprise funds (53,193) Changes In Net Assets of Business-Type Activities per Statement of Activities $ 2,206,489 See Notes to Financial Statements 25 CITY OF CHINO HILLS STATEMENT OF CASH FLOWS PROPRIETARY FUNDS YEAR ENDED JUNE 30,2012 Business-Type Activities-Enterprise Funds Governmental Activities- Internal Water Utility Sewer Utility Totals Service Funds Cash Flows from Operating Activities: Cash received from customers and users $ 24,643,251 $ 5,716,891 $ 30,360,142 $ 2,249,774 Cash paid to suppliers for goods and services (13,161,331) (3,939,502) (17,100,833) (703,278) Cash paid to employees for services (4,269,024) (1,315,825) (5,584,849) (832,732) Net Cash Provided(Used)by Operating Activities 7,212,896 461,564 7,674,460 713,764 Cash Flows from Non-Capital Financing Activities: Cash transfers out (865,463) (125,607) (991,070) (80,200) Repayment made to other funds (16,578) (24) (16,602) - Repayment received from other funds - 19 19 Advance to other funds - (7,028,830) (7,028,830) - Contributions from other funds - - - 208,268 Net Cash Provided(Used)by Non-Capital Financing Activities (882,041) (7,154,442) (8,036,483) 128,068 Cash Flows from Capital and Related Financing Activities: Acquisition and construction of capital assets (1,676,841) (193,601) (1,870,442) (532,038) Principal paid on capital debt (1,280,000) - (1,280,000) (91,437) Interest paid on capital debt (804,971) - (804,971) (7,297) Net Cash Provided(Used)by Capital and Related Financing Activities (3,761,812) (193,601) (3,955,413) (630,772) Cash Flows from Investing Activities: Interest received 155,414 204,946 360,360 21,421 Net Cash Provided(Used)by Investing Activities 155,414 204,946 360,360 21,421 Net Increase(Decrease)in Cash and Cash Equivalents 2,724,457 (6,681,533) (3,957,076) 232,481 Cash and Cash Equivalents at Beginning of Year 21,064,968 15,326,448 36,391,416 3,149,290 Cash and Cash Equivalents at End of Year $ 23,789,425 $ 8,644,915 $32,434,340 $ 3,381,771 See Notes to Financial Statements 26 CITY OF CHINO HILLS STATEMENT OF CASH FLOWS PROPRIETARY FUNDS YEAR ENDED JUNE 30,2012 Business-Type Activities-Enterprise Funds Governmental Activities- Internal Water Utility Sewer Utility Totals Service Funds Reconciliation of Operating Income to Net Cash Provided(Used)by Operating Activities: Operating income(loss) $ 4,155,475 $ (613,321) $ 3,542,154 $ (52,824) Adjustments to reconcile operating income(loss) net cash provided(used)by operating activities: Depreciation 3,932,471 1,128,143 5,060,614 624,742 Restatement relating to prior year expenses - - - 64,066 (Increase)decrease in accounts receivable (274,563) (21,194) (295,757) 1,156 (Increase)decrease in investment in joint venture (1,084,874) - (1,084,874) - 1 (Increase)decrease in due from other agencies 136,169 - 136,169 - (Increase)decrease in due from other governments 8,789 - 8,789 (683) Increase(decrease)in accounts payable 248,712 (14,164) 234,548 77,923 Increase(decrease)in accrued liabilities 20,060 3,983 24,043 (175) Increase(decrease)in deposits payable 69,782 (27,994) 41,788 - Increase(decrease)in due to other governments (8,789) - (8,789) - Increase(decrease)In compensated absences 9,664 6,111 15,775 (441) Total Adjustments 3,057,421 1,074,885 4,132,306 766,588 Net Cash Provided(Used)by Operating Activities $ 7,212,896 _$ 461,564 $ 7,674,460 $ 713,764 Non-Cash Investing,Capital,and Financing Activities: Contributions from developers $ 300,955 $ 22,834 $ 323,789 $ 208,268 Deferred charges amortization 34,373 - 34,373 - Amortization of bond discounts 115,156 - 115,156 - See Notes to Financial Statements 27 CITY OF CHINO HILLS STATEMENT OF FIDUCIARY NET ASSETS FIDUCIARY FUNDS JUNE 30,2012 Agency Funds Assets: Cash and investments $ 31,675,839 Receivables: Interest 10,112 Special assessments 122,971 Restricted assets: Cash and investments with fiscal agents 6,684,845 Total Assets $ 38,493,767 Liabilities: Accounts payable $ 158,450 Deposits payable 1,893,128 Funds held for others 35,716,563 Due to Inland Empire Utility Agency 725,626 Total Liabilities $ 38,493,767 See Notes to Financial Statements 28 olt -411 Ole City of Chino Hills California NOTES TO THE FINANCIAL STATEMENTS CITY OF CHINO HILLS NOTES TO FINANCIAL STATEMENTS JUNE 30, 2012 I. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Note 1: Organization and Summary of Significant Accounting Policies a. Description of the Reporting Entity The City of Chino Hills (the "City") was incorporated December 1, 1991, under the General Laws of the State of California. The City operates under a Council—Manager form of government and provides the following services: contracted police, lighting and landscaping, public improvements, water, sanitation, planning and zoning, general administrative services, contracted animal control, building and safety, community services, and street and highway maintenance. As required by accounting principles generally accepted in the United States of America, these financial statements present the City of Chino Hills and its component units, entities for which the City is considered financially accountable. The inclusion of an organization within the scope of the reporting entity of the City of Chino Hills is based on the provision of GASB Statements No. 14 and 39. The blended component units discussed below, although legally separate entities, are in substance part of the government operation and data from these component units has been combined herein. The City of Chino Hills Redevelopment Agency The Chino Hills Redevelopment Agency (the Agency) was activated November 12, 2003, pursuant to the State of California Health and Safety Code Section 33000 entitled "Community Development Law." The primary purpose of the Agency is to serve as the second "public agency" in the formation of a joint powers agreement (JPA). It is not intended that the Agency conduct any activities other than to participate in the JPA formation process. The JPA was formed to facilitate the purpose of executing Marks—Roos bond offerings. There was no financial activity during the fiscal year 2011-2012. On July 18, 2011, the California Redevelopment Association ("CRA") and the League of California Cities ("League") filed a petition for writ of mandate with the California Supreme Court, requesting the Court to declare unconstitutional two bills that were passed as part of the 2011-12 State Budget, AB X1 26 and 27 (California Redevelopment Association v. Matosantos). AB X1 26 dissolves redevelopment agencies effective October 1, 2011. AB X1 27 gave redevelopment agencies an option to avoid dissolution if it commits to making defined payments for the benefit of the State, school districts and certain special districts. In 2011-12, these payments amounted to a state-wide total of$1.7 billion. In 2012-13 and subsequent years, the payments totaled $400 million, annually. Each city or county's share of these payments was determined based on its proportionate share of state-wide tax increment. On August 17, 2011 the Supreme Court issued a stay of the implementation of AB X1 26 and 27 which allowed a redevelopment agency to continue if it adopted an AB X1 27 ordinance. However, because of the effect of the stay order, the authority for the Redevelopment Agency to engage in most activities was suspended. The Supreme Court heard oral arguments on November 10, 2011 and on December 29, 2011 announced its decision in California Redevelopment Association v. Matosantos. The court upheld AB X1 26 which dissolves redevelopment agencies, 29 CITY OF CHINO HILLS NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2012 Note 1: Organization and Summary of Significant Accounting Policies (Continued) but invalidated in its entirety AB X1 27 which allowed redevelopment agencies to continue as long as they made the required payments. AB X1 26 established deadlines for the process of Redevelopment Agency dissolution and the handling of existing obligations. The full text of AB X1 26 may be obtained from the California legislative information website maintained by the Legislative Counsel of the State of California at: http://www.leginfo.ca.gov/bilinfo.html. As of January 31, 2012 the Redevelopment Agency has been dissolved. Certain of the Redevelopment Agency's rights and obligations were transferred to the City acting as the successor agency to the Redevelopment Agency on that date. This includes the Redevelopment Agency's rights and obligations under the Joint Powers Agreement between the City and the Redevelopment Agency creating the Chino Hills Financing Authority, as described below. The City of Chino Hills Financing Authority The City of Chino Hills Financing Authority (the Authority) was created by a joint exercise of joint powers agreement between the City of Chino Hills and the Chino Hills Redevelopment Agency on November 12, 2003, by virtue of the laws of the State of California pursuant to Section 2.02 hereof. The purpose of the Authority is to provide through the issuance of debt, financing necessary for various capital improvements. The Authority is administered by the Board of Directors who are the members of the City Council and the Mayor. The Authority's primary source of income will be installment sale, loan and lease payments received from the City, which will be used to meet the debt service requirements on debt issues. The Authority does not have taxing power. Separate financial statements for the Authority are not prepared. The City of Chino Hills Capital Improvement Corporation The Chino Hills Capital Improvement Corporation, a California non-profit benefit corporation, was established on May 19, 1992 to facilitate the financing of capital improvements on behalf of the City of Chino Hills. There was no financial activity during the fiscal year 2011-2012. b. Government—Wide and Fund Financial Statements The government—wide financial statements (i.e., the statement of net assets and the statement of activities) report information on all of the nonfiduciary activities of the primary government and its component units. For the most part, the effect of interfund activity has been removed from these statements. Governmental activities, which normally are supported by taxes and intergovernmental revenues, are reported separately from business—type activities, which rely to a significant extent on fees and charges for support. The statement of activities demonstrates the degree to which the direct expenses of a given function or 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 30 CITY OF CHINO HILLS NOTES TO FINANCIAL STATEMENTS(CONTINUED) JUNE 30,2012 Note 1: Organization and Summary of Significant Accounting Policies(Continued) particular function or segment. Taxes and other items not properly included among program revenues are reported instead as general revenues. Separate financial statements are provided for governmental funds, proprietary funds and fiduciary funds, even though the latter are excluded from the government—wide financial statements. Major individual governmental funds and major individual enterprise funds are reported as separate columns in the fund financial statements. c. Measurement Focus, Basis of Accounting and Financial Statement Presentation The government—wide financial statements are reported using the economic resources measurement focus and the accrual basis of accounting, as are the proprietary fund and fiduciary fund financial statements. Revenues are recorded when earned and expenses are recorded when a liability is incurred, regardless of the timing of related cash flows. Property taxes are recognized as revenues in the year for which they are levied. Grants and similar items are recognized as revenue as soon as all eligibility requirements imposed by the provider have been met. Governmental fund financial statements are reported using the current financial resources measurement focus and the modified accrual basis of accounting. Revenues are recognized as soon as they are both measurable and available. Revenues are considered 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, as under accrual accounting. However, debt service expenditures, as well as expenditures related to compensated absences and claims and judgments, are recorded only when payment is due. Property taxes, franchise taxes, licenses and interest associated with the current fiscal period are all considered to be susceptible to accrual and so have been recognized as revenues of the current fiscal period. Only the portion of special assessments receivable due within the current fiscal period is considered 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. The City reports the following major governmental funds: • The General Fund is the City's primary operating fund. It accounts for all financial resources of the general government, except those required to be accounted for in another fund. • The Landscape and Lighting District Special Revenue Fund accounts for receipts and expenditures of money in the benefit assessment district zones for operating expenditures, maintenance and capital outlay for street lighting, landscaping and parks located within the district. • The Existing Infrastructure Fee Special Revenue Fund accounts for receipts and expenditures of money in the facilities'development programs, which provides for the reimbursement of expenditures to property owners who constructed the facilities in the program. 31 CITY OF CHINO HILLS NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30,2012 Note 1: Organization and Summary of Significant Accounting Policies (Continued) The City reports the following major proprietary funds: • The Water Utility Fund accounts for the revenues and expenses for the operation, maintenance, and facilities' improvements of the City's water production, transmission and distribution system. • The Sewer Utility Fund accounts for the revenues and expenses for the collection and treatment(via contract)of the liquid waste generated within the City. Additionally, the City reports the following fund types: • Internal Service Funds account for the financial transactions related to repair, replacement and maintenance of City-owned equipment and City's general information technology systems and telecommunications hardware and software. • Agency Funds used to account for money and property held by the City as trustee or custodian. They are also used to account for various assessment districts and community facilities districts for which the City acts as an agent for debt service activity. Private—sector standards of accounting and financial reporting issued prior to December 1989 generally are followed in both the government—wide and proprietary fund financial statements to the extent that those standards do not conflict with or contradict guidance of the Governmental Accounting Standards Board. Governments also have the option of following subsequent private—sector guidance for their business—type activities and enterprise funds, subject to this same limitation. The government has elected not to follow subsequent private—sector guidance. As a general rule, the effect of interfund activity has been eliminated from the government—wide financial statements. Exceptions to this general rule are charges between the government's proprietary funds function and various other functions of the government. Elimination of these charges would distort the direct costs and program revenues reported for the various functions concerned. Amounts reported as program revenues include: 1) charges to customers or applicants for goods, services or privileges provided, 2) operating grants and contributions, and 3)capital grants and contributions, including special assessments. Internally dedicated resources are reported as general revenues rather than as program revenues. Likewise, general revenues include all taxes. Proprietary funds distinguish operating revenues and expenses from non—operating items. Operating revenues and expenses generally result from providing services and producing and delivering goods in connection with a proprietary fund's principal ongoing operations. The principal operating revenues of the Enterprise Funds and of the Internal Service Funds are charges to customers for sales and services. Operating expenses for Enterprise Funds and Internal Service Funds include the cost of sales and services, administrative expenses, and depreciation on capital assets. All revenues and expenses not meeting this definition are reported as non—operating revenues and expenses. 32 CITY OF CHINO HILLS NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2012 Note 1: Organization and Summary of Significant Accounting Policies (Continued) When both restricted and unrestricted resources are available for use, it is the government's policy to use restricted resources first, and then unrestricted resources as they are needed. d. Assets, Liabilities and Net Assets or Equity Cash and Investments All cash and investments, except those that are held by fiscal agents, are held in a City pool. These pooled funds are available upon demand, and therefore are considered cash and cash equivalents for purposes of the statement of cash flows. Investments held by fiscal agents with an original maturity of three months or less are also considered cash equivalents. Investments for the City are reported at fair value. The City's policy is generally to hold investments until maturity or until market values equal or exceed cost. The State Treasurer's Investment Pool and Counties Treasurer's Investment Pool operate in accordance with appropriate state laws and regulations. The reported value of the pool is the fair value of the pool shares. Receivables and Payables Activity between funds that are representative of lending/borrowing arrangements outstanding at the end of the fiscal year are referred to as either "due to/from other funds," (i.e., the current portion of interfund loans) or "advances to/from other funds" (i.e., the non—current portion of interfund loans). All other outstanding balances between funds are reported as "due to/from other funds." Any residual balances outstanding between the governmental activities and business—type activities are reported in the government—wide financial statements as "internal balances." Advances between funds, as reported in the fund financial statements, are offset by a fund balance reserve account in applicable governmental funds to indicate that they are not available for appropriation and are not expendable available financial resources. All trade and property tax receivables are shown net of an allowance for uncollectibles. Property tax revenue is recognized on the modified accrual basis, that is, in the fiscal year for which the taxes have been levied providing they become available. Available means then due, or past due and receivable within the current period and collected within the current period or expected to be collected soon enough thereafter to be used to pay liabilities of the current period. The County of San Bernardino collects property taxes for the City. Tax liens attach annually as of 12;01 A.M. on the first day in January proceeding the fiscal year for which the taxes are levied. Taxes are levied on both real and personal property as it exists on that date. The tax levy covers the fiscal period July 1 to June 30. All secured personal property taxes and one—half of the taxes on real property are due November 1; the second installment is due February 1. All taxes are delinquent if unpaid on December 10 and April 10, respectively. Unsecured personal property taxes become due on the first of March each year and are delinquent if unpaid on August 31. 33 CITY OF CHINO HILLS NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2012 Note 1: Organization and Summary of Significant Accounting Policies (Continued) Functional Classifications Expenditures of the Governmental Funds are classified by function. Functional classifications are defined as follows: • General Government includes legislative activities that have a primary objective of providing legal and policy guidelines for the City. Also included in this classification are those activities that provide management or support services across more than one functional area. • Public Safety includes those activities that involve the protection of people and property. • Public Works includes those activities that involve the maintenance and improvement of City streets, roads and park development and maintenance. • Community Development includes those activities that involve the enhancing of the general quality of life. • Culture and Leisure includes those activities that involve recreation. • Capital Outlay includes those activities that involve the acquisition of capital assets. • Debt Service includes those activities that account for the payment of long—term debt principal, interest and fiscal charges. Inventories Inventories consist of water pipe, valves, tools and miscellaneous items used in installing, monitoring and repairing these items. Inventories are accounted under the purchases method since the City does not maintain significant amounts of inventories. Restricted Assets Certain proceeds of debt issues, as well as certain resources set aside for their repayment, are classified as restricted assets on the balance sheet because their use is limited by applicable bond covenants. In addition, funds have been restricted for future capital improvements by City resolution. Capital Assets Capital assets which include property, plant, equipment and infrastructure assets (e.g., roads, bridges, sidewalks and similar items), are reported in the applicable governmental or business—type activities columns in the government—wide financial statements. Capital assets are defined by the City as assets with an initial, individual cost of more than $5,000 (amount not rounded) and an estimated useful life in excess of two years. Such assets are recorded at historical cost or estimated historical cost if purchased or constructed. Donated capital assets are recorded at estimated fair market value at the date of donation. 34 CITY OF CHINO HILLS NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30,2012 Note 1: Organization and Summary of Significant Accounting Policies(Continued) In accordance with GASB Statement No. 34, the City has reported its general infrastructure assets which include streets, sidewalks, storm drains, curbs and gutters, handicap ramps, trails and equestrian fencings with a cost of more than $50,000 per location. The City has assigned no value to its rights of way. The costs of normal maintenance and repairs that do not add to the value of the assets or materially extend assets lives are not capitalized. Major outlays for capital assets and improvements are capitalized as projects are constructed. Interest incurred during the construction phase of capital assets of business—type activities is included as part of the capitalized value of the assets constructed. Property, plant and equipment of the primary government, as well as the component units, are depreciated using the straight—line method over the following estimated useful lives: Assets Years Equipment 3-12 Vehicles 4-10 Utility Plant in Service 5-100 Meters 15 Pipeline in Service 30-50 Infrastructure 20-60 Intangible Assets Intangible assets are capitalized at cost, while contributed assets are recorded at fair market value at the time received. Amortization has been provided on a straight—line basis over their estimated useful lives as follows: Assets Years Water Rights 40 Capacity Rights 40 35 CITY OF CHINO HILLS NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2012 Note 1: Organization and Summary of Significant Accounting Policies (Continued) Deferred Charges Deferred charges consist of capitalized debt issuance costs and are amortized on a straight—line basis. Governmental Business-Type Activities Activities Balance at July 1, 2011 $ 199,606 $ 378,827 Current year amortization (7,703) (34,373) Balance at June 30,2012 $ 191,903 $ 344,454 Compensated Absences In accordance with GASB Code Section C60, the City of Chino Hills records a liability for vacation and compensatory leave that is earned and unused at year—end. Sick leave liability recorded has been estimated using the "vesting method," which is calculated " based on the sick leave accumulated at the balance sheet date by those employees who are currently eligible to receive termination payments as well as other employees who are expected to become eligible in the future to receive such payments." Vacation, sick, and compensatory leave liabilities relating to governmental funds that have matured at June 30, 2012, have been recorded in the General Fund as compensated absences payable. The liability for governmental activity that has not matured at June 30, 2012, is reported on the statement of net assets under non—current liabilities. Liabilities relating to proprietary funds are recorded within those respective funds. Long—Term Obligations In the government—wide financial statements and proprietary fund types in the fund financial statements, long—term debt and other long—term obligations are reported as liabilities in the applicable governmental activities, business—type activities, or proprietary fund type statement of net assets. Bond premiums and discounts, as well as issuance costs, are deferred and amortized over the life of the bonds using the effective interest method. Bonds payable are reported net of the applicable bond premium or discount. Bond issuance costs are reported as deferred charges and amortized over the term of the related debt. In the fund financial statements, governmental fund types recognize bond premiums and discounts, as well as bond issuance costs, during the current period. The face amount of debt issued is reported as other financing sources. Premiums received on debt issuances are reported as other financing sources while discounts on debt issuances are reported as other financing uses. Issuance costs, whether or not withheld from the actual debt proceeds received, are reported as debt service expenditures. 36 CITY OF CHINO HILLS NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2012 Note 1: Organization and Summary of Significant Accounting Policies (Continued) Fund Equity The City Council adopted resolution 11R-21 in conformity with Governmental Accounting Auditing Standards Board (GASB) Statement 54. In the fund financial statements, governmental funds report the following fund balance classifications: Nonsoendable include amounts that cannot be spent because they are either(a) not in spendable form or(b) legally or contractually required to be maintained intact. Restricted include amounts that are constrained on the use of resources by either (a) external creditors, grantors, contributors, or laws of regulations of other governments or(b) by law through constitutional provisions or enabling legislation. Committed include amounts that can only be used for specific purposes pursuant to constraints imposed by formal action of the government's highest authority, City Council. The formal action that is required to be taken to establish, modify, or rescind a fund balance commitment is a resolution. Assigned include amounts that are constrained by the government's intent to be used for specific purposes, but are neither restricted nor committed. The City Manager and/or Finance Director is authorized to assign amounts to a specific purpose, which was established by the governing body in resolution. Unassigned include the residual amounts that have not been restricted, committed, or assigned to specific purposes. An individual governmental fund could include nonspendable resources and amounts that are restricted or unrestricted (committed, assigned, or unassigned) or any combination of those classifications. Restricted or unrestricted amounts are to be considered spent when an expenditure is incurred for purposes for which both restricted and unrestricted fund balance is available and committed, assigned, then unassigned amounts are considered to have been spent when an expenditure is incurred for purposes for which amounts in any of those unrestricted fund balance classifications can be used. Stabilization Arrangements A stabilization arrangement has been established through Resolution No. 11R-21. The stabilization agreement is to be used specifically for expenses associated with the declaration of a state or federal state of emergency or local emergency as defined in City of Chino Hills municipal code section 2.44.020. 37 CITY OF CHINO HILLS NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30,2012 II. STEWARDSHIP Note 2: Stewardship, Compliance and Accountability a. Budget Procedures All financial activities of the General Fund, Special Revenue Funds and Capital Projects Funds are part of the appropriated budget. Appropriated amounts are as originally adopted or as amended by the City Council throughout the year. The following general procedures are followed in establishing the annual budget: 1. The annual budget adopted by the City Council provides for the general operation of the City. It includes proposed expenditures and estimated revenues. 2. The City Manager is authorized to transfer appropriations between programs and funds up to $10,000 without approval by the City Council. In addition, the City Manager has unlimited authority to transfer appropriations between items and accounts within the same department funded by the General Fund and within the same function funded by a special revenue, debt service or capital projects fund. 3. The budget is formally integrated into the accounting system and employed as a management control device during the year for all funds. 4. The budget is adopted on an annual basis. 5. The budget is adopted on a basis which differs from accounting principles generally accepted in the United States of America in that encumbrances are included as expenditures. The modified accrual basis of accounting is employed in the preparation of the budget. 6. At fiscal year—end, operating budget appropriations lapse; however, incomplete capital improvement project appropriations within Capital Projects Funds, and authorized non—capital appropriations are rebudgeted in the following fiscal year. b. Encumbrances Encumbrance accounting is employed as an extension of formal budgetary integration in governmental funds. Encumbrances such as purchase orders, contracts and other commitments for the expenditure of monies, are reported as assignments of fund balances. Outstanding encumbrances at year—end are reappropriated in the following year. c. Deficit Fund Balance At June 30, 2012, the Existing Infrastructure Fees Fund had a deficit fund balance of $7,334,499, the Parkland Fees fund had a deficit fund balance of $730,677, the Miscellaneous Grants Fund had a deficit fund balance of $1,154,981 and the Local Government Energy Efficiency CDBG Fund had a deficit fund balance of$7,618. These deficits will be eliminated with future revenue. 38 CITY OF CHINO HILLS NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2012 III. DETAILED NOTES ON ALL FUNDS Note 3: Cash and Investments At June 30, 2012, cash and investments were reported in the accompanying financial statements as follows: Governmental activities $ 66,452,994 Business-type activities 32,434,340 Fiduciary funds 38,360,684 Total Cash and Investments $ 137,248,018 The City of Chino Hills maintains a cash and investment pool that is available for use for all funds. Each fund type's position in the pool is reported on the combined balance sheet as cash and investments. The City has adopted an investment policy which authorizes it to invest in various investments. Deposits At June 30, 2012, the carrying amount of the City's deposits was $1,437,209 and the bank balance was $1,603,032. The $165,823 difference represents outstanding checks and other reconciling items. The California Government Code requires California banks and savings and loan associations to secure an Entity's deposits by pledging government securities with a value of 110% of an Entity's deposits. California law also allows financial institutions to secure Entity deposits by pledging first trust deed mortgage notes having a value of 150% of an Entity's total deposits. The Entity Treasurer may waive the collateral requirement for deposits that are fully insured up to $250,000 by the FDIC. The collateral for deposits in federal and state chartered banks is held in safekeeping by an authorized Agent of Depository recognized by the State of California Department of Banking. The collateral for deposits with savings and loan associations is generally held in safekeeping by the Federal Home Loan Bank in San Francisco, California as an Agent of Depository. These securities are physically held in an undivided pool for all California public agency depositors. Under Government Code Section 53655, the placement of securities by a bank or savings and loan association with an "Agent of Depository" has the effect of perfecting the security interest in the name of the local governmental agency. Accordingly, all collateral held by California Agents of Depository is considered to be held for, and in the name of, the local governmental agency. 39 CITY OF CHINO HILLS NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2012 Note 3: Cash and Investments (Continued) A provision of the Dodd-Frank Wall Street Reform and Consumer Protection Act provides temporary unlimited deposit insurance coverage for noninterest-bearing transaction accounts at all FDIC-insured institutions. This provision was effective from December 31, 2010 and will remain effective until December 31, 2012. Noninterest- bearing transaction accounts is defined as an account(1)with respect to which interest is neither accrued nor paid; (2) on which the depositor or account holder is permitted to make withdrawals by negotiable or transferable instrument, payment orders of withdrawal, telephone or other electronic media transfers, or other similar items for the purpose of making payments or transfers to third parties or others; and (3) on which the FDIC-insured depository institutions does not reserve the right to require advance notice of an intended withdrawal. As of June 30, 2012, the City maintains cash deposits that are temporarily covered by this provision. Authorized Investments Under provision of the City's investment policy and in accordance with Section 53601 of the California Government Code, the City may invest in the following types of investments: • Bonds issued by the City • Repurchase Agreements • Registered state warrants or treasury notes or bonds of this State • Bonds, notes or warrants of any local agency within this State • United States treasury notes, bonds, bills or certificates of indebtedness • Obligations of a federal agency or United States government sponsored agency • Negotiable certificates of deposit • Mutual Funds • State and County Investment Pools Investment Pool Oversight State of California Local Agency Investment Fund LAIF is overseen by the Local Agency Investment Advisory Board, which consists of five members, in accordance with State statute. The State Treasurer's office audits the fund annually. Los Angeles County Investment Pool The investment section of the County Treasurer's office monitors the pool daily for compliance with the government code and investment guidelines. The Auditor-Controller's Office audits it quarterly for compliance. The Board of Supervisors receives an investment report monthly. The County's Treasury Oversight Committee, which was established by the Board of Supervisors pursuant to the government code, reviews the annual investment policy and investment reports and oversees the portfolio's annual audit. 40 CITY OF CHINO HILLS NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2012 Note 3: Cash and Investments(Continued) Investment Authorized by Debt Agreements The City has monies held by trustees or fiscal agents pledged to the payment or security of certain bonds and certificates of participation. The California Government Code provides that these monies, in the absence of specific statutory provisions governing the issuance of bonds or certificates, may be invested in accordance with the ordinance, resolutions or indentures specifying the types of investments its trustee or fiscal agents may make. Included in the monies held by trustees or fiscal agents are deposits with various institutions for the payment of long—term debt. GASB Statement No. 31 The Entity adopted GASB Statement No. 31, Accounting and Financial Reporting for Certain Investments and for External Investment Pools, as of July 1, 1997. GASB Statement No. 31 establishes fair value standards for investments in participating interest earning investment contracts, external investment pools, equity securities, option contracts, stock warrants and stock rights that have readily determinable fair values. Accordingly, the Entity reports its investments at fair value in the balance sheet. All investment income, including changes in the fair value of investments, is recognized as revenue in the operating statement. Credit Risk The City's investment policy limits investments in medium—term notes (MTN's) to those rated "A" or higher by Standard and Poor's (S&P) or by Moody's. As of June 30, 2012, the City does not have investment in medium—term notes. Investments in U.S. government securities are not considered to have credit risk; therefore, their credit quality is not disclosed. As of June 30, 2012, the City's investments in external investment pools and money market mutual funds are unrated. The US Tresury Notes, FHLB, FHLMC, FFCB, FNMA, and Tenesee Valley Authority are Aaa and M+and the US Corporate Notes are Al and A+. Custodial Credit Risk The custodial credit risk for deposits is the risk that in the event of the failure of a depository financial institution, a government will not be able to recover deposits or will not be able to recover collateral securities that are in the possession of an outside party. The custodial credit risk for investments is the risk that in the event of the failure of the counterparty to a transaction, a government will not be able to recover the value of investment or collateral securities that are in the possession of an outside party. As of June 30, 2012, none of the City's deposits or investments are exposed to custodial credit risk. 41 CITY OF CHINO HILLS NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30,2012 , Note 3: Cash and Investments(Continued) Concentration of Credit Risk The City's investment policy imposes restrictions for certain types of investments with any one issuer. Investments in any one issuer that represents 5% or more of the City's total investments as of June 30, 2012 are as follows: Reported Percent of Issuer Investment Type Amount Investments Federal National Mortgage Federal Agency _ Association Securities $ 8,763,143 6% Federal Agency Federal Home Loan Bank Securities 8,870,175 7% Federal Home Loan Mortgage Federal Agency Corp Securities 10,752,630 8% Federal Agency Federal Farm Credit Bank Securities 8,351,256 6% Interest Rate Risk The City's investment policy limits investment maturities as a means of managing its exposure to fair value losses arising from increasing interest rates. The City's investment policy states that purchases of investments will be restricted to securities with a final stated maturity not to exceed five years. The City has elected to use the segmented time distribution method of disclosure for its interest rate risk. As of June 30, 2012, the City had the following investments and original maturities: Investment Maturities (in Years) 6 months 6 months 1 year 3 year Fair or less to 1 year to 3 years to 5 years Value Investments Los Angeles County Investment Pool $ 35,723,772 $ - $ - $ - $ 35,723,772 California Local Agency Investment Fund 30,055,510 - - - 30,055,510 Money Market Mutual Funds 51,045 - - 51,045 US Corporate Notes - 721,707 9,428,693 1,474,938 11,625,338 US Treasury Notes 882,872 1,453,997 5,276,893 2,341,942 9,955,704 FHLB 284,413 2,310,433 3,489,314 2,786,016 8,870,176 FHLMC 1,955,026 296,755 4,051,949 4,448,900 10,752,630 FFCB 2,273,225 1,460,357 1,471,616 3,146,058 8,351,256 FNMA 1,694,381 1,450,635 5,618,127 - 8,763,143 Tennessee Valley Authority - - 288,324 - 288,324 Investment Held by Fiscal Agents Money Market Mutual Funds 11,373,911 - - - 11,373,911 $ 84,294,155 $ 7,693,884 $ 29,624,916 $ 14,197,854 $ 135,810,809 42 CITY OF CHINO HILLS NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30,2012 • Note 4: Interfund Receivable, Payable and Transfers The composition of interfund balances as of June 30, 2012, is as follows: Due To/From Other Funds Due From Other Funds: Governmental Proprietary Fund: Funds: General Water Sewer Funds Fund Utility Utility Total Due To Other Funds: Governmental Funds: General Fund $ - $ 3,088 $ - $ 3,088 Landscape and Lighting District 377 20,139 - 20,516 Nonmajor Governmental Funds 230,288 6,673 2,224 239,185 Proprietary Funds: Sewer Utility - 36 - 36 Total $ 230,665 $ 29,936 $ 2,224 $ 262,825 The interfund balances were the results of routine interfund transactions not cleared prior to year—end. Advances To/From Other Funds Advances From Other Funds: Governmental Funds: Existing Other General Infrastructure Governmental Funds Fund Fees Funds Total Advances To Other Funds: Governmental Funds: General Fund $ - $ - $ 174,435 $ 174,435 Nonmajor Governmental Funds - 8,691,055 955,194 9,646,249 Proorietary Funds: Sewer Utility 13,342,730 1,078,425 4,167,550 18,588,705 Total $ 13,342,730 $ 9,769,480 $ 5,297,179 $ 28,409,389 During the current fiscal year, the Sewer Utility fund advanced $1,078,425 to the Existing Infrastructure Fees fund for developer related obligations. The Sewer Utility Fund advanced $13,342,730 to the General Fund for the Kline/Maloof properties, the Shoppes-Residential project, the Lennar sales tax reimbursement agreement and the Shoppes-Residential dirt cost project. Of the $4,167,550 advance from the Sewer Utility fund to the Other Governmental Funds, $2,185,750 relates to the Parkland Fees fund for a new community park and $1,981,800 relates to Water Utility Fee Fund for Monte Vista Water Supply Acquisition and Interconnect and the Los Serranos Golf Course Conversion. The Existing Infrastructure Fees Fund received $8,691,055 from other various nonmajor governmental funds consisting of $5,437,241 for the Richland/Chino Hills Heights Agreement, $451,096 for developer related obligations and $2,802,709 for the Development Agreement Settlement. 43 CITY OF CHINO HILLS NOTES TO FINANCIAL STATEMENTS(CONTINUED) JUNE 30, 2012 Note 4: Interfund Receivable, Payable and Transfers (Continued) Interfund Transfers Transfers Out: Governmental Funds: Landscape General and Lighting Nonmajor Transfers In: Fund District Governmental Governmental Funds: General Fund $ - $ 908,300 $ 2,374,492 Landscape and Lighting District 314,901 - 101,817 Nonmajor Governmental 2,049,603 89,397 3,269,444 Total $ 2,364,504 $ 997,697 $ 5,745,753 Transfers Out: Proprietary Funds: Water Seer Internal Utility Utility Service Transfers In: Fund Fund Funds Total Governmental Funds: General Fund $ - $ - $ 80,200 $ 3,362,992 Landscape and Lighting District - - - 416,718 Nonmajor Governmental 865,463 125,607 - 6,399,514 Total $ 865,463 $ 125,607 $ 80,200 $ 10,179,224 The transfers to the General Fund which total $3,362,992 can be primarily attributed to a $2.0 million transfer from the Storm Drain Facilities Fees fund for the 2007 COP English Channel prepayment and a$908,300 one-time transfer from the Lighting and Landscape Districts related to excess reserves. The transfers to the Lighting and Landscape Districts from other funds total $416,718 which includes the General Fund's share of costs for parks maintenance of $287,500, transfers to cover grant related expenditures in the amount of $101,815, and $27,402 for General Fund subsidies to cover operations in various Lighting and Landscaping districts. The $6.4 million in transfers to Nonmajor Governmental Funds can be mainly attributed to$5.3 million in transfers to various funds to cover costs for capital improvement projects. 44 CITY OF CHINO HILLS NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30,2012 Note 5: Long-Term Receivable California Joint Powers Insurance Authority Long-term Receivable The City of Chino Hills is a member of the California Joint Powers Insurance Authority (CJPIA). The purpose of CJPIA is to arrange and administer programs for the pooling of self- insured losses, to purchase excess insurance or reinsurance, and to arrange for group purchased insurance for property and other lines of coverage. Retrospective deposits and refunds are cost allocation adjustments to prior coverage periods. Some claims take many years to resolve and over time their estimated value changes. The retrospective adjustments are calculated annually and take into consideration all the changes in claim values that occurred during the most recent year. The formula is designed to adequately cover the cost of claims brought against members and to ensure the overall financial strength and security of the Authority. The formula was developed to be as equitable as possible by taking into consideration both risk exposure and claims experience of individual members. CJPIA has temporarily deferred the payment on retrospective deposits owed to the Authority by members. The payment deferral period extends until July 1, 2013 for the Liability program and July 1, 2015 for the Workers' Compensation program. Retrospective deposit payments are scheduled to resume on these dates. The October 2011 annual retrospective adjustment is included in these balances. The City at June 30, 2012 had a retrospective refund due to the City in the amount of$152,948. During the payment deferral period, members with a retrospective refund balance will receive a portion of the balance as a credit against other charges on the annual contribution invoice. For the 2011-12 coverage year, the refund amount will be 25%. The percentage to be refunded in future years will be set on an annual basis by the Executive Committee of CJPIA. Once the payment deferral period has concluded in each program, subsequent retrospective refund adjustments will be applied in full (100%) as a credit on the annual contribution invoice. More information on the CJPIA retrospective balances can be found on the CJPIA website at CJPIA.org. 45 CITY OF CHINO HILLS NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2012 Note 6: Capital Assets Capital asset activity for the year ended June 30, 2012,was as follows: Beginning Ending Balance Transfers Increases Decreases Balance Governmental Activities: Capital assets,not being depreciated: Land $ 26,693,498 $ - $ - $ - $ 26,693,498 Construction-in-progress 19,520,048 (17,098,999) 3,640,030 - 6,061,079 Total Capital Assets, - Not Being Depreciated 46,213,546 (17,098,999) 3,640,030 - 32,754,577 Capital assets,being depreciated: Buildings 95,940,690 - - - 95,940,690 Structures other than buildings 30,652,687 846,214 97,196 (110,000) 31,486,097 Equipment 3,450,602 338,424 177,175 - 3,966,201 Vehicles 4,797,855 - 354,863 - 5,152,718 Pipeline in service 217,375 - - - 217,375 Infrastructure 294,579,206 15,914,361 - - 310,493,567 Total Capital Assets, Being Depreciated 429,638,415 17,098,999 629,234 (110,000) 447,256,648 Less accumulated depreciation: Buildings 10,252,336 - 2,175,312 - 12,427,648 Structures other than buildings 8,901,264 - 1,138,394 (96,026) 9,943,632 Equipment 1,611,029 - 405,246 - 2,016,275 Vehicles 3,136,273 - 417,042 - 3,553,315 Pipeline in service 41,301 - 4,348 - 45,649 Infrastructure 132,170,774 - 9,427,102 - 141,597,876 Total Accumulated Depreciation 156,112,977 - 13,567,444 (96,026) 169,584,395 Total Capital Assets, Being Depreciated, Net 273,525,438 17,098,999 (12,938,210) (13,974) 277,672,253 Governmental Activities Capital Assets, Net $319,738,984 $ - $ (9,298,180) $ (13,974) $310,426,830 46 CITY OF CHINO HILLS NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2012 Note 6: Capital Assets (Continued) Beginning Ending Balance Transfers Increases Decreases Balance Business-Type Activities: Capital assets,not being depreciated: Land $ 3,395,256 $ - $ - $ - $ 3,395,256 Easements 537,940 - - - 537,940 Construction-in-progress 4,667,393 (4,048,534) 1,385,912 (3,060) 2,001,711 Total Capital Assets, Not Being Depreciated 8,600,589 (4,048,534) 1,385,912 (3,060) 5,934,907 Capital assets, being depreciated: Buildings and improvements 1,042,550 - - - 1,042,550 Structure other than building 290,234 - - - 290,234 Utility plant in service 32,683,711 3,176,514 - - 35,860,225 Pipeline in service 135,211,177 812,016 - - 136,023,193 Meters 5,321,331 - 801,189 (107,072) 6,015,448 Equipment 309,096 60,004 - - 369,100 Intangible assets-utility rights 17,410,863 - - - 17,410,863 Total Capital Assets, Being Depreciated 192,268,962 4,048,534 801,189 (107,072) 197,011,613 Less accumulated depreciation: Buildings and improvements 458,745 - 34,410 - 493,155 Structure other than building 96,806 - 10,066 - 106,872 Utility plant in service 12,473,633 - 918,980 - 13,392,613 Pipeline in service 50,232,133 - 3,255,172 - 53,487,305 Meters 2,082,666 - 344,475 (106,914) 2,320,227 Equipment 224,669 - 27,866 - 252,535 Intangible assets-utility rights 5,325,419 - 435,272 - 5,760,691 Total Accumulated Depreciation 70,894,071 - 5,026,241 (106,914) 75,813,398 Total Capital Assets, Being Depreciated,Net 121,374,891 4,048,534 (4,225,052) (158) 121,198,215 Business-Type Activities Capital Assets, Net $ 129,975,480 $ - $ (2,839,140) $ (3,218) $ 127,133,122 • 47 CITY OF CHINO HILLS NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2012 , Note 6: Capital Assets (Continued) Depreciation and amortization expense was charged to functions/programs of the primary government as follows: Governmental Activities General Activities $ 1,506,293 Culture and Leisure 1,479,001 Community Development 1,051 Public Safety 269,257 Public Works 9,687,100 Equipment Maintenance 471,294 Information Technology 153,448 $ 13,567,444 Business-Type Activities: Water Utility $ 3,898,098 Sewer Utility 1,128,143 $ 5,026,241 Note 7: Long-Term Debt a. Governmental Activities The following is a summary of changes in Long—Term Debt for the year ended June 30,2012: Balance at Balance at Due Within July 1,2011 Additions Deletions June 30,2012 One Year Civic Center COP $ 21,445,000 $ - $ 2,525,000 $ 18,920,000 $ 585,000 Advances from developers 773,756 - - 773,756 - Development fee program obligations 36,430,353 160,856 7,764,355 28,826,854 - Capital Lease obligations 219,330 - 91,436 127,894 95,262 Equestrian Center lease 11 - 1 10 1 Other post employment 1 benefits obligations 409,363 102,323 2,352 509,334 - CJPIA General liability retrospective deposit payable - 1,209,594 - 1,209,594 - Compensated absences 849,735 239 7,513 842,461 10,500 Total 60,127,548 $ 1,473,012 10,390,657 51,209,903 $ 690,763 Unamortized Bond Premium 39,377 $ - $ 5,029 34,348 Total Long-Term Debt $ 60,166,925 $ 51,244,251 48 CITY OF CHINO HILLS NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2012 Note 7: Long-Term Debt(Continued) Long-term debt repayments per governmental funds financial statements. $ 9,401,246 Long-term debt repayment made by the Assessment District Funds: The City has executed many agreements with outside developers requiring developers to provide up-front funding for the cost of backbone infrastructure. As a result, the City has recorded development fee program obligations. A portion of the development fee program obligation is repaid periodically by the Assessment Districts Agency Fund by giving a building permit fee credit against assessments previously paid to the Assessment District Funds. For fiscal year 2011-2012, the amount repaid by the Assessment District Agency Funds was: 888,110 Other post employment benefits obligations payments. 2,352 Compensated absences payouts. 7,513 Capital lease obligations reported in the internal service funds. 91,436 Total Deletions per Changes in Long-Term Debt Schedule $ 10,390,657 In June 2007, the City issued $22,040,000 in Certificates of Participation. The certificates consist of$5,005,000 serial certificates maturing in principal amounts of $85,000 to $670,000 beginning September 2008 through September 2017 with interest rates ranging from 3.600% to 4.125%, term certificates of $7,240,000 due September 1, 2026, with an interest rate of 5.000%, and term certificates of $9,795,000 due September 1, 2036, with an interest rate of 5.000%. The Certificates were issued to provide funds to finance a portion of the costs of the construction and installation of a new Civic Center, including a new City Hall complex, a new sheriff substation, a new fire administration facility, a new library, the widening of Peyton Drive and the inlet/outlet English Channel transition at Peyton Drive and related infrastructure. During May 2011, the City Council approved a prepayment of the English Channel portion of this bond. $1,965,000 was paid in full to reduce total debt service payments over the next 25 years by $7,979,887. The debt service schedule has been adjusted to reflect this prepayment. $ 18,920,000 The annual requirements to amortize the Certificates of Participation outstanding as of June 30, 2012, were as follows: 49 CITY OF CHINO HILLS NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2012 Note 7: Long-Term Debt(Continued) Principal Interest 2012-2013 $ 585,000 $ 898,226 2013-2014 605,000 875,389 2014-2015 625,000 851,480 2015-2016 620,000 826,893 2016-2017 530,000 803,628 2017-2022 3,140,000 3,610,256 2022-2027 4,075,000 2,714,625 2027-2032 5,190,000 1,565,500 2032-2037 3,550,000 292,500 Totals $ 18,920,000 $ 12,438,497 Advances From Developers Advances from developers for the Chino Hills Parkway Phasing Plan represent monies owed to developers for development fees collected in advance. Future development fees will be used to reimburse developers for their cost. There is no fixed repayment schedule. $ 773,756 Development Fee Program Obligations The City has executed many agreements/programs with outside developers requiring developers to provide funding up-front for the costs of backbone infrastructure (major thoroughfares, water and sewer mains, etc.) concurrent with the development of their residential and commercial projects. These agreements/programs include Facilities Development Fee Program, Facilities Benefit Assessment Program, Existing Infrastructure Fee Reimbursement Agreements, Community Facilities Districts Reimbursement Agreements and Assessment District Credit agreements. This up-front funding is generally in the form of the developer constructing the backbone infrastructure. Future development fees will be used to reimburse the developers (either as credits against fees owed or cash reimbursements if not fully credited) for their costs. A liability has been recorded for the project costs incurred to date, including estimated interest payable related to one of the projects. There is no fixed repayment schedule. $ 28,826,854 Capital Lease Obligations The City entered into a five year lease purchase agreement in fiscal year 2008-2009 for copiers. The assets acquired and the related obligation are reported in the Information Technology internal service fund. $ 127,894 50 CITY OF CHINO HILLS NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30,2012 • Note 7: Long-Term Debt(Continued) Governmental Activities Equipment $ 445,609 Less: accumulated depreciation (153,448) $ 292,161 The future minimum lease obligations and the net present value of these minimum lease payments are as follows: Governmental Year Ending June 30, Activities 2013 $ 98,733 2014 32,911 Total minimum lease payments 131,644 Less: amount representing interest (3,750) Present value of minimum lease payment $ 127,894 Equestrian Center Lease On December 30, 1996, the City entered into a lease with the McCoy Equestrian Center trust to provide property for the equestrian center. The lease is for a period of 25 years for$1 per year with options to renew on an annual basis. $ 10 Other Post Employment Benefits Obligations The City's other post employment benefits obligations are described in Note 9 of the Notes to Financial Statements. This liability will be paid in future years from the General Fund. $ 509,334 CJPIA General Liability Retrospective Deposit Payable Retrospective deposits and refunds are cost allocation adjustments to prior coverage periods. Some claims take many years to resolve and over time their estimated value changes. The retrospective adjustments are calculated annually and take into consideration all the changes in claim values that occurred during the most recent year. The formula is designed to adequately cover the cost of claims brought against members and to ensure the overall financial strength and security of the Authority. The formula was developed to be as equitable as possible by taking into consideration both risk exposure and claims experience of individual members. CJPIA has temporarily deferred the payment on retrospective deposits owed to the Authority by members. The payment deferral period extends until July 1, 2013 for the Liability program and July 1, 2015 for the Workers' Compensation program. Retrospective deposit payments are scheduled to resume on these dates. The October 2011 annual retrospective adjustment is included in these balances. 51 CITY OF CHINO HILLS NOTES TO FINANCIAL STATEMENTS(CONTINUED) JUNE 30,2012 Note 7: Long-Term Debt(Continued) Optional Payment Plans When retrospective deposit payments resume as indicated above, members will have the opportunity to select from a variety of optional payment plans. Discounts under the incentive plan are available to members choosing to voluntarily accelerate payment during the deferral period. The City has chosen not to voluntarily accelerate payment at this time. After the deferral period, members choosing from among the optional payment plans will be subject to a moderate annual fee. The fee is intended to provide a means for the Authority to recover otherwise foregone investment earnings and to serve as a minor disincentive for the selection of longer financing terms. Retrospective Balances will Change Annually Retrospective balances will change with each annual computation during the payment deferral period. Member balances may increase or decrease as a result of the most recent year's claim development. Accordingly, some members who chose to pay off their balance in full may be required to pay additional retrospective deposits in the future based on the outcome of actual claim development reflected in subsequent retrospective deposit computations. Conversely, if claim development is favorable then subsequent retrospective adjustments could potentially result in refunds to the member. More information on the CJPIA retrospective balances can be found on the CJPIA website at CJPIA,org. At June 30, 2012 the retrospective amount due was: $ 1.209.594 Compensated Absences The City's policies relating to compensated absences are described in Note 1 of the Notes to Financial Statements. This liability will be paid in future years from the General Fund. $ 842,461 52 CITY OF CHINO HILLS NOTES TO FINANCIAL STATEMENTS(CONTINUED) JUNE 30,2012 Note 7: Long-Term Debt(Continued) b. Business Type Activities The following is a summary of changes in Proprietary Funds debt for the year ended June 30, 2012: Balance at Balance at Due Within July 1,2011 Additions Deletions June 30,2012 One Year Utility development program obligations $ 3,099 $ - $ - $ 3,099 $ Certificates of participation 18,675,000 - 1,280,000 17,395,000 1,325,000 Compensated absences 228,039 15,775 - 243,814 6,500 Totals 18,906,138 $ 15,775 $ 1,280,000 17,641,913 $ 1,331,500 Deferred amount on refunding (761,200) $ - $ 109,393 (651,807) Unamortized bond discount (75,323) - 5,763 (69,560) Total Long-Term Debt $ 18,069,615 _$ 16,920,546 Development Program Obligations The City has executed many agreements with outside developers requiring developers to provide funding up-front for the costs of backbone infrastructure (major thoroughfares, water and sewer mains, etc.) concurrent with the development of their residential and commercial projects. This up-front funding is generally in the form of the developer constructing the backbone infrastructure. Future development fees will be used to reimburse the developers for their up-front funding. A liability has been recorded for the project costs incurred to date. $ 3,099 Certificates of Participation On December 2, 2003. the City issued $18,210,000 in Certificates of Participation. The certificates consist of serial certificates maturing in principal amounts of $940,000 to $1,460,000 beginning June 2004 through June 2018, with interest rates ranging from 2.00% to 4.20%. The certificates were issued in order to refund $17,330,000 of outstanding installment obligations due on the 1996 Water Certificates of Participation. $ 8,190,000 The annual requirements to amortize the Certificates of Participation outstanding as of June 30, 2012,were as follows: Principal Interest 2012-2013 $ 1,295,000 $ 323,140 2013-2014 1,340,000 276,520 2014-2015 1,400,000 226,270 2015-2016 1,460,000 170,270 2016-2017 1,320,000 111,870 2017-2022 1,375,000 57,750 Totals $ 8,190,000 $ 1,165,820 53 CITY OF CHINO HILLS NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2012 • Note 7: Long-Term Debt(Continued) On June 1, 2002, the City issued $9,545,000 in Certificates of Participation. The Certificates consist of serial certificates maturing in principal amounts of$20,000 to$685,000 beginning June 1, 2003 through June 2028, with interest rates ranging from 1.900% to 5.125% and term certificates of $3,140,000 maturing on June 1, 2032, with an interest rate of 5.300%. The Certificates were issued for the acquisition, construction and installation of certain improvements to the City's water system. $ 9,205,000 The annual requirements to amortize the Certificates of Participation outstanding as of June 30, 2012, were as follows: Principal Interest 2012-2013 $ 30,000 $ 471,209 2013-2014 30,000 469,919 2014-2015 25,000 468,599 2015-2016 20,000 467,474 2016-2017 225,000 466,554 2017-2022 2,100,000 2,101,281 2022-2027 2,950,000 1,468,719 2027-2032 3,825,000 622,581 Totals $ 9,205,000 $ 6,536,336 Compensated Absences The City's policies relating to compensated absences are described in Note 1 of the Notes to Financial Statements. This liability will be paid in future years by the Water Utility Fund and the Sewer Utility Fund, $ 243,814 c. Assessment District and Community Facilities District Bond Issues Excluded from the liabilities are special assessment and special tax bonds related to various special assessment districts and community facilities districts included within the City. The City acts as an agent for the property owners benefited by the projects financed from the bond proceeds in collecting the assessments and taxes, forwarding the collections to bond holders, and initiating foreclosure proceedings, If appropriate. Neither the faith and credit nor the taxing power of the City is pledged to the payment of the bonds, and the City is not legally obligated for payment of the bonds. Total non-obligation debt at June 30, 2012 is $58,670,000. 54 CITY OF CHINO HILLS NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2012 Note 7: Long-Term Debt(Continued) The debt outstanding at June 30,2012, consists of the following individual issues: 2004$14,560,000 Community Facilities District Special Tax Refunding Bonds due in annual installments of$1,530,000 to$2,075,000 through September 1, 2011; interest ranging from 2.00% to 3.00%. The bonds were issued to decrease $3,725,000 of 1991 Community Facilities- District No. 2, Special Tax Bonds, Series"A",$5,815,000 of 1993 Community Facilities- District No. 1, Special Tax Refunding Bonds, $1,805,000 of 1993 Community Facilities - District No. 4, Special Tax Refunding Bonds, $1,340,000 of 1993 Community Facilities - District No. 5, Special Tax Refunding Bonds and $1,875,000 of 1993 Community Facilities- District No. 8, Special Tax Refunding Bonds.The outstanding balance was paid off as of June 30,2012. $ 2006 $48,365,000 Community Facilities District Bond Program to finance the Community Facilities share of the Government Center. Serial Series B bonds due in annual installments of$1,050,000 to$4,680,000 through September 1, 2026; interest ranging from 3.625% to 4.375% plus $1,295,000 term bonds due September 1,2030; interest rates varying from 4.400%to 4.5000%. $ 38,950,000 2010 $12,390,000 Community Facilities District No. 10, (Fairfield Ranch) Special Tax Refunding Bonds refunded the 2000 $13,040,000 Community Facilities District No. 10, Special Tax Bonds. The 2010 refunding bonds include serial bonds due in annual installments of $335,000 to $935,000 through September 1,2030;interest ranging from 2.00%to 5.00%. $ 12,055,000 2011 $4,915,000 Community Facilities District No. 9 (Rincon Village Area) Special Tax Refunding Bonds, refunded the 1998 $14,860,000 Community Facilities District No.9,Special Tax Bonds.The 2011 refunding bonds include serial bonds due in annual installments of $70,000 to $615,000 through September 2021;interest ranging from 1.250%to 5.125% $ 4,425,000 Re-Assessment District No. 10-1; The City issued bonds for $3,505,000 on August 5, 2010 for the refinance of Reassessment District 1995. The serial bonds are due in annual installments of $265,000 to $390,000 through September 21,2021,with an interest rate of 2.00%to 5.32%. $ 3,240,000 Note 8: Pension Plan Plan Description The City of Chino Hills contributes to the San Bernardino County Employees' Retirement Association (SBCERA), a cost—sharing multiple—employer defined benefit pension plan operating under the California County Employee's Retirement Act of 1937 and covering substantially all employees of the County of San Bernardino, the City of Chino Hills, the 55 CITY OF CHINO HILLS NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2012 Note 8: Pension Plan (Continued) City of Big Bear Lake, the California State Association of Counties, the South Coast Air Quality Management District (SCAQMD), the San Bernardino County Law Library, the Crest Forest Fire Protection District, Mojave Desert Air Quality Management District (MDAQMD), and the Superior Courts collectively referred to as the "Participating Members." SBCERA provides retirement, disability benefits, annual cost of living adjustments and death benefits to plan members and beneficiaries. SBCERA acts as a common investment and administrative agent for the Participating Members. SBCERA publishes its own Comprehensive Annual Financial Report and receives its own independent audit. This report may be obtained from their executive office: 348 West Hospitality Lane,Third Floor, San Bernardino, CA 92415-0014. Funding Policy Participating members are required to contribute a percentage of covered salary based on certain actuarial assumptions and their age at entry into the Plan. The City pays a portion of the employees' required contribution to the Plan at a rate of 8% of the employees covered payroll. The City pays the entire employee required contribution for Executive Management and Division Managers. The current employer's rate for General Members is 22.38% of annual covered payroll. The contribution requirements of the plan members and the City are established and may be amended by SBCERA. Required Contributions For fiscal year 2011-2012, the City's annual pension cost of$3,800,665 for SBCERA was equal to the City's required and actual contributions. The required contribution was determined as part of the June 30, 2010, actuarial valuation using the entry age normal actuarial cost method. The actuarial assumptions included (a) 8.00% investment rate of return (net of administrative expenses), (b) projected annual salary increases range from 5.00% to 13.5% and (c) cost-of-living adjustments are contingent upon CPI increases with a 2.00% maximum. Both (a) and (b) included an inflation component of 3.75% and a payroll growth of 4,25%. The Asset Valuation Method of SBCERA employs market value of assets less unrecognized market value gains and losses from each of the last five years. Market value gains and losses are equal to the difference between the actual market return and the expected return on the market value, and are recognized over a five-year period. The actuarial value of assets is reduced by the value of the non-valuation reserves. SBCERA unfunded actuarial accrued liability (UAAL) is being amortized as a level percentage of future active member payroll (including payroll for new members) assuming a constant number of active members. The June 30, 2002, UAAL is being recognized over a 20-year declining period effective June 30, 2002. Any new UAAL after June 30, 2002, that arises at each valuation is amortized over its own 20-year declining period. Three-Year Trend Information for SBCERA (Amount in Thousands) • Percentage of Required Required Contributions Fiscal Year Contributions Contributed 6/30/2010 $ 3,461 100% 6/30/2011 3,599 100% 6/30/2012 3,800 100% 56 CITY OF CHINO HILLS NOTES TO FINANCIAL STATEMENTS(CONTINUED) JUNE 30,2012 Note 9: Other Post-Employment Employee Benefits Plan Description The City has established the City of Chino Hills Retiree Healthcare Plan, a single- employer defined benefit healthcare plan. The plan provides postretirement healthcare benefits to eligible employees who retire from the City under the San Bernardino County Employee's Retirement Association (SBCERA) and who elect a CaIPERS Health Plan (PEMHCA). The City pays the PEMHCA minimum employer contribution using the unequal method of $84.00 per month for 2012. The retiree pays the remainder of the PEMHCA premium. The City does not provide contributions for retiree dental, vision, or life insurance benefits. Funding Policy Currently, the City funds retiree healthcare benefits on a pay-as-you-go basis, paying for retiree benefits from the City's General Fund as they are due with no pre-funding for future years. For fiscal year 2011-2012, the City paid $2,352 for benefits of two retired employees. Annual OPEB Cost and Net OPEB Obligation The City's annual other postemployment benefit (OPEB) cost is calculated based on the annual required contribution of the employer(ARC), an amount actuarially determined in accordance with the 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 amortize any unfunded actuarial liabilities over a period not to exceed thirty years. 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: Retiree Healthcare Plan Annual required contribution(ARC) $ 114,034 Interest on net OPEB obligation 6,301 Adjustment to ARC (18,012) Annual OPEB cost(expense) 102,323 Contribution made 2,352 Increase in net OPEB obligation 99,971 Net OPEB obligation-July 1,2011 409,363 Net OPEB obligation-June 30,2012 $ 509,334 The City's annual OPEB cost, the percentage of annual OPEB cost contributed to the plan, and the net OPEB obligation for the 2011-12 fiscal year and the two preceding years were as follows: Percentage of Fiscal Year Annual Annual OPEB Net OPEB Ended OPEB Cost Cost Contributed Obligation 06/30/10 $ 140,865 52.27% $ 269,492 06/30/11 141,112 34.47% 409,363 06/30/12 102,323 20.09% 509,334 57 CITY OF CHINO HILLS NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30,2012 • Note 9: Other Post-Employment Employee Benefits (Continued) Funded Status and Funding Progress 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 trends. Amounts determined regarding the funded status of the plan and the annual required contributions of the employer are subject to continual revision as actual results are compared with past expectations and new estimates are made about the future. The schedule of funding progress below presents multiyear trend information about whether the actuarial value of plan assets is increasing or decreasing over time relative to the actuarial accrued liabilities for benefits. Only two years are presented since the City implemented the provision of GASB Statement 45 in fiscal year 2009-2010 and performs its actuarial valuation every three years. Schedule of Funding Progress for OPEB (Amount in Thousands) Actuarial Accrued UAAL as Actuarial Actuarial Liability Unfunded a%of Valuation Valuation of (ML) Entry AAL Funded Covered Covered date Assets Age (UAAL) Ratio Payroll Payroll 1/1/2009 $ - $ 919 $ 919 0.0% $ 9,175 10.0% 6/15/2012 - 1,160 1,160 0.0% 10,595 10.9% 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. The actuarial valuation dated May 1, 2012, used the Entry Age Normal actuarial cost method, a discount rate of 4.50% which is the long-term expected rate of return on the City's investment fund, an annual general inflation rate of 3%, and an annual aggregate payroll increase of 3.5%. The unfunded accrued actuarial liability (UAAL) is being amortized over a fixed 30-year period as a level percentage of payroll beginning with the 2008-2009 fiscal year. The initial UAAL was amortized over a closed 30 years and residual URAL is amortized over an open 30 years. The PEMHCA medical plans are considered community rated plans for the City. Therefore, no implied subsidy was determined for this valuation. The Plan is assumed to be on going for cost purposes. This does not imply that an obligation to continue the Plan exists. As of the actuarial valuation date, the City had 154 active participants and three retiree receiving benefits. 58 CITY OF CHINO HILLS NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2012 Note 10: Liability, Property and Workers' Compensation Protection a. Description of Self—Insurance Pool Pursuant to Joint Powers Agreement The City of Chino Hills is a member of the CALIFORNIA JOINT POWERS INSURANCE AUTHORITY (Authority). The Authority is composed of 123 California public entities and is organized under a joint powers agreement pursuant to California Government Code §6500 et seq. The purpose of the Authority is to arrange and administer programs for the pooling of self-insured losses, to purchase excess insurance or reinsurance, and to arrange for group purchased insurance for property and other lines of coverage. The California JPIA began covering claims of its members in 1978. Each member government has an elected official as its representative on the Board of Directors. The Board operates through a nine-member Executive Committee. b. Self—Insurance Programs of the Authority 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. Liability 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 2011-12 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. 59 CITY OF CHINO HILLS NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2012 Note 10: Liability, Property and Workers'Compensation Protection (Continued) 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. Workers' Compensation In the workers' compensation program claims are pooled separately between public safety (police and fire) and non-public safety exposures. (1) The payroll of each member is evaluated relative to the payroll of other members. A variable credibility factor is determined for each member, which establishes the weight applied to payroll and the weight applied to losses within the formula. (2) The first layer of losses includes incurred costs up to $50,000 for each occurrence and is evaluated as a percentage of the pool's total incurred costs within the first layer. (3) The second layer of losses includes incurred costs from $50,000 to $100,000 for each occurrence and is evaluated as a percentage of the pool's total incurred costs within the second layer. (4) Incurred costs in excess of $100,000 up to the reinsurance attachment point of $2 million are distributed based on the outcome of cost allocation within the first and second loss layers. (5) Costs of covered claims from $2 million up to statutory limits are paid under a reinsurance policy. Protection is provided per statutory liability under California Workers' Compensation Law. Employer's Liability losses are pooled among members to $2 million. Coverage from $2 million to $5 million is purchased as part of a reinsurance policy, and Employer's Liability losses from $5 million to $10 million are pooled among members. c. Purchased Insurance Pollution Leaal Liability Insurance The City of Chino Hills participates in the pollution legal liability insurance program (formerly called environmental insurance) which is available through the Authority. The policy covers sudden and gradual pollution of scheduled property, streets, and storm drains owned by the City of Chino Hills. Coverage is on a claims-made basis. There is a $50,000 deductible. The Authority has a limit of $50 million for the 3-year period from July 1, 2011 through July 1, 2014. Each member of the Authority has a $10 million sub-limit during the 3-year term of the policy. Property Insurance The City of Chino Hills participates in the all-risk property protection program of the Authority. This insurance protection is underwritten by several insurance companies. City of Chino Hills property is currently insured according to a schedule of covered property submitted by the City of Chino Hills to the Authority. City of Chino Hills property currently has all-risk property insurance protection in the amount of $103,146,108. There is a $5,000 deductible per occurrence except for non-emergency vehicle insurance which has a $1,000 deductible. Premiums for the coverage are paid annually and are not subject to retrospective adjustments. Earthquake and Flood Insurance The City of Chino Hills purchases earthquake and flood insurance on a portion of its property. The earthquake insurance is part of the property protection insurance program of the Authority. City of Chino Hills property currently has earthquake protection in the amount of $69,241,469. There is a deductible of 5% per unit of value with a minimum deductible of $100,000. Premiums for the coverage are paid annually and are not subject to retrospective adjustments. 60 CITY OF CHINO HILLS NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2012 Note 10: Liability, Property and Workers' Compensation Protection (Continued) Crime Insurance The City of Chino Hills purchases crime insurance coverage in the amount of$1,000,000 with a $2,500 deductible. The fidelity coverage is provided through the Authority. Premiums are paid annually and are not subject to retrospective adjustments. d. Adequacy of Protection During the past three fiscal years, none of the above programs of protection experienced settlements or judgments that exceeded pooled or insured coverage. There were also no significant reductions in pooled or insured liability coverage in 2011-12. Note 11: Contingencies a. Litigation The City is involved in several pending lawsuits of a nature common to many similar jurisdictions. City management estimates that potential claims against the City not covered by insurance, will not have a material adverse effect on the financial statements of the City. b. Voter Initiatives 1, The California Supreme Court issued an opinion in December 1995 relating to the validity of Proposition 62, which was passed by the voters in 1986 (the Guardino case). This case could potentially affect the City with respect to the monies the City received and will receive, from the County of San Bernardino pursuant to the Measure I voter—approved initiative, and the monies the City has received and will receive, from its business license fees and from its property transfer tax. The City cannot further assess its potential liabilities at this time until additional opinions are issued by the State of California courts. 2. Proposition 218, which was approved by the voters in November 1996, will regulate the City's ability to impose, increase and extend taxes, assessments and fees. Any new, increased or extended taxes, assessments and fees subject to the provisions of Proposition 218 require voter approval before they can be implemented. Additionally, Proposition 218 provides that these taxes, assessments and fees are subject to the voter initiative process and may be rescinded in the future by the voters. Therefore, the City's ability to finance the services for which the taxes, assessments and fees were imposed may be significantly impaired. The taxes, fees and assessments that are subject to the provisions of Proposition 218 that the City currently imposes for its own benefit or as an agent for a special district, or receives from other governmental agencies, potentially include the Measure I taxes, business license fees, community facilities districts, special taxes, landscape and lighting district assessments, street sweeping assessments, water utility fees, sewer utility fees and refuse disposal fees. Certain language in the initiative is unclear as to the scope and impact of the proposition. Future court rulings or state legislation may clarify these issues. At this time it is uncertain how Proposition 218 will affect the City's ability to maintain or increase the revenue it receives from taxes, assessments and fees. 61 CITY OF CHINO HILLS NOTES TO FINANCIAL STATEMENTS(CONTINUED) JUNE 30,2012 Note 11: Contingencies (Continued) 3. A general plan initiative was passed by City residents in November 1999, which removed the City Council's ability to increase residential density zoning. An increase in residential zoning density would require a majority voter approval. Current zoning on certain developable residential parcels in the City is of a lower density of units per acre than the density desired by residential developers. This change could slow down development in the City due to the voter approval requirement. Note 12: Joint Venture a. Water Facility Authority On February 19, 1980, the Water Facilities Authority (the Authority) was created under a joint exercise of powers agreement between the CSA 70 Zone CH(now part of the City of Chino Hills) and other local entities. It was formed for the acquisition and construction of facilities directly benefiting the participants by supplying water to the inhabitants within the boundaries of its members. Thus, each participant has an ongoing financial interest in the Authority. The governing Board of Directors consists of one member appointed from each participating agency and has approval of all budget and finance activities. The City's investment in the Authority has been recorded under the equity method of accounting and is shown as an investment in joint venture in the Water Enterprise Fund. On September 30, 1997, the Authority issued $24,455,000 in 1997 Refunding Certificates of Participation (COPS) for the purpose of refunding $25,820,000 of the outstanding 1986 COPs. The 1997 Refunding COPs carry interest rates from 4.00%to 5.30% and will be repaid in various principal increments with the final payment due on October 1, 2015. Each participant in the joint venture has pledged gross revenues from its respective Enterprise Fund and has agreed to restrictive covenants that establish rates and charges for each respective water enterprise fund at levels sufficient to maintain net revenues equal to at least 1.25 times the aggregate amount of each respective party's installment payments to the Authority as well as any parity debt that shall become due and payable within the succeeding 12 months. On March 21, 1996, the Board of Directors of the Authority approved the prepayment by the City of Chino Hills of its installment payment obligation pursuant to the 1986 Installment Purchase Agreement between the Authority and its participants. As a result of such prepayment and redemption of such 1986 Certificates, the City of Chino Hills has no further obligation for the payment of installment payments to the Authority. The value of the City's investment in the Authority at June 30, 2012, was$3,474,316. 62 CITY OF CHINO HILLS NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30,2012 Note 12: Joint Venture (Continued) Audited financial information of the Authority for the fiscal year ended June 30, 2012, was summarized as follows: Water Facilities Authority Net Assets: Total assets $ 35,989,058 Total liabilities (11,772,955) Total Net Assets $ 24,216,103 Water Facilities Authority Changes in Net Assets: Operating revenues $ 17,890,880 Operating expenses (17,959,140) Operating loss before depreciation and amortization (68,260) Depreciation and amortization (1,061,277) Operating revenue(loss) (1,129,537) Nonoperating revenues (expenses) 288,767 Contributions 1,710,000 Change in net assets 869,230 Beginning Net Assets 23,346,873 Ending Net Assets $ 24,216,103 The participants and their audited financial contributions through June 30, 2012, were as follows: Amount Percent City of Chino Hills $ 5,354,632 14.35% Monte Vista Water District 6,035,268 16.17% City of Chino 5,819,102 15.59% City of Ontario 12,649,778 33.89% City of Upland 7,355,796 19.71% Non-Participants 107,399 0.29% Total $ 37,321,975 100.00% Financial statements of the Authority can be obtained from the office of Charles Z. Fedak&Co., 6081 Orange Avenue, Cypress, California 90630. b. Chino Basin Desalter Authority On January 15, 2002, the Chino Basin Desalter Authority (the Authority) was created under a joint exercise of powers agreement between the City of Chino Hills and other neighboring government agencies. This agreement was formed to successfully manage the groundwater resources in the Chino Basin. The governing Board of Directors consists of one representative appointed from each participating agency and has the power and responsibility to adopt budgets, operating plans and finance activities to further the purpose of the Authority. The City's investment in the Authority has been recorded under the equity method of accounting and is shown as an investment in joint venture in the Chino Basin Desalter Authority.At June 30, 2012, the value of the City's investment in the Authority was$10,820,307. 63 CITY OF CHINO HILLS NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30,2012 Note 12: Joint Venture (Continued) On June 11, 2009, the Chino Basin Desalter Authority issued the Desalter Refunding Bonds, Series 2008A in the amount of$89,440,000 to refund the 2004 Adjustable Rate Revenue Refunding Bonds, Series 1 and 2.The new revenue refunding bond has various debt payment schedules tailored to each CDA member agency, based on their respective election. This provision affords each member the ability to prepay their share of debt service. Unaudited Financial information of the Authority for the fiscal year ended June 30, 2012, is summarized as follows: Chino Basin Desalter Authority Net Assets: Total assets $ 176,384,129 Total liabilities (97,180,585) Total Net Assets $ 79,203,544 Chino Basin Desalter Authority Changes in Net Assets: Operating revenues $ 31,643,709 Operating expenses (29,091,358) Operating gain before depreciation and amortization 2,552,351 Depreciation and amortization (4,165,536) Operating revenue(loss) (1,613,185) Nonoperating revenues(expenses) 2,775,639 Income(loss) before transfers and contributions 1,162,454 Contributions 22,591,175 Capital grants 412,348 Change in net assets 24,165,977 Beginning Net Assets 55,037,567 Ending Net Assets $ 79,203,544 The participants'contributions through June 30, 2012, were as follows: Amount Percent JCSD $ 7,447,343 35.09% City of Chino Hills 3,921,115 18.47% City of Chino 4,669,807 22.00% City of Norco 935,030 4.40% City of Ontario 3,132,783 14.76% Santa Ana River Co. 1,121,061 5.28% Total $ 21,227,139 100.00% Financial statements of the Authority can be obtained from the CDA Treasurer's office located at 6075 Kimball Avenue, Chino, CA 91710. 64 CITY OF CHINO HILLS NOTES TO FINANCIAL STATEMENTS(CONTINUED) JUNE 30,2012 Note 13: Other Commitments On February 13, 2007, the City of Chino Hills entered into an agreement with the County of San Bernardino to provide for the design and construction of a multi-purpose community center on the old City Yard site on Pipeline Avenue. The City is responsible for the design and construction of the facility and agrees to provide the staffing and operational costs throughout the term of the agreement. The County allows the City to occupy the premises for a period of 30 years. At the termination of the agreement, the City agrees to vacate the premises and remove personal property at the request of the County. On August 18, 2010, the agreement was amended to require that construction begin within three years of the execution of this amendment. In addition, the amount the County would - provide was reduced from$6 million to$4 million. The entire$4 million has been received by the City. In fiscal year 2005-06, the City transferred the Pipeline site to the County by grant deed. The County intends to re-convey the Pipeline site to the City in partial payment of its obligation to pay for the Community Center. The City has included the Pipeline site in the Water Utility capital assets because it was once the City Yard. On July 24, 2012, the City Council approved the plans and specifications for the Chino Hills Community Center project. The project consists of three (3) elements: the Community Center building and associated parking, improvements to the south parking lot of the McCoy Equestrian and Recreation Center to serve as shared parking; and a Passive Park adjacent to and south of the Community Center building. On September 11, 2012, a bid was awarded for two (2) elements of the project: the Community Center building and the Passive Park improvements. The total approved amount was$6,914,155. After award of the contract, the contractor proposed to perform the work for the third element, the McCoy parking lot. Upon negotiation, both parties agreed to a price of$770,000, which will be presented to City Council on November 13, 2012 for approval. The Community Center project has a total estimated budget of$8.8 million. Of that, $4 million is being provided by the County of San Bernardino, $2.7 million is funded by various Community Facilities Districts and $2.1 is funded by the Landscape and Lighting Districts. The project is expected to break ground in November 2012. The City has active construction projects as of June 30, 2012. The projects include buildings, improvements other than buildings, streets facilities, sanitary sewer lines and facilities, storm sewer lines and water supply facilities. At fiscal year end, the City's encumbrances with contractors were as follows: Remaining Spent-to-date Commitment Buildings $ 547,310 $ 53,858 Improvements Other than Buildings - 104,821 Streets Facilities 281,381 1,116,640 Sanitary Sewer Lines &Facilities 16,455 600 Storm Sewer Lines 66,149 5,411 Water Supply Facilities 791,707 312,128 Total $ 1,703,002 $ 1,593,458 65 CITY OF CHINO HILLS NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30,2012 Note 14: Fund Balance and Net Assets Restatements Beginning fund balance has been restated as follows: Governmental Activities: General Fund To properly restate prior year expenditures $ (1,612,892) Existing Infrastructure Fees Fund To properly restate prior year expenditures 1,612,892 $ Beginning net assets has been restated as follows: Internal Service Funds Information Technology Fund To properly restate current year expenditures $ 64,066 Note 15: Subsequent Event Subsequent to June 30, 2012, it was determined that there was a compliance exception that occurred in the City's Investment portfolio due to two purchases of commercial paper on July 30, 2012 and August 2, 2012. Although the investment in commercial paper is allowed under Government Code Section 53601, it is specifically prohibited under the City's Investment Policy. The securities were: PNC Bank $ 1,750,000 July 30, 2012 purchase date Toyota Motor Credit $ 1,750,000 July 30, 2012 purchase date Bank of Nova Scotia $ 1,750,000 August 2, 2012 purchase date Chandler Asset Management (Chandler) noticed this exception to the compliance on August 29, 2012, during the month-end reporting process. Chandler took immediate corrective action by selling all three securities on August 30, 2012. The cumulative sales resulted in a realized gain of$609.58. On October 23, 2012, the City Council and the Chino Hills Financing Authority approved the issuance of water revenue bonds in an amount not to exceed $22 million for the purpose of refinancing of the City's Certificates of Participation (2002 Water System Project) and Refunding Certificates of Participation (2003 Water System Project) and raising approximately $3.55 million for additional capital improvements to the City's water system. The bonds are expected to be issued in December 2012. 66 •r iti I City of Chino Hills California SUPPLEMENTARY INFORMATION CITY OF CHINO HILLS COMBINING BALANCE SHEET NONMAJOR GOVERNMENTAL FUNDS JUNE 30,2012 Special Revenue Funds Sleepy General Traffic Storm Drain Hollow Road Facilities Facilities Facilities Improvement Fees Fees Fees Assets: Cash and investments $ 55,507 $ 424,806 $ 871,222 $ 2,060,938 Receivables: I Accounts - - - 4,170 Taxes - - - Interest 19 146 301 212 Special assessments 237 - - - Due from other governments - - - - Due from developers - - - 12,719 Advances to other funds - 761,482 140,597 681,655 Restricted assets: Cash and investments with fiscal agents - - - - Total Assets $ 55,763 $ 1,186,434 $ 1,012,120 $ 2,759,694 Liabilities and Fund Balances: Liabilities: Accounts payable $ - $ - $ - $ - Accrued liabilities - - - - Retentions payable - - - - Due to other funds - - - - Deferred revenues - - - Unearned revenues - - - - Advances from other funds - - - Total Liabilities - - - Fund Balances: Nonspendable: Advances to other funds - 761,482 140,597 681,655 Restricted for: Community development projects - 424,952 871,523 2,078,039 Public safety - - - Public works 55,763 - - - Capital Projects - - - - Unassigned - - - - Total Fund Balances 55,763 1,186,434 1,012,120 2,759,694 Total Liabilities and Fund Balances $ 55,763 $ 1,186,434 $ 1,012,120 $ 2,759,694 67 CITY OF CHINO HILLS COMBINING BALANCE SHEET NONMAJOR GOVERNMENTAL FUNDS JUNE 30,2012 (Continued) Special Revenue Funds Parkland Traffic Signal • Fees Fees Gas Tax Air Quality Assets: Cash and investments $ 1,455,754 $ 391,681 $ 737,853 $ 548,616 Receivables: Accounts - - 89,815 - Taxes - - 219,738 - Interest 503 135 562 194 Special assessments - - - - Due from other governments - - - 23,330 Due from developers - - - - Advances to other funds - - 955,194 - Restricted assets: Cash and investments with fiscal agents - - - - Total Assets $ 1,456,257 $ 391,816 $ 2,003,162 $ 572,140 Liabilities and Fund Balances: Liabilities: Accounts payable $ - $ - $ 42,521 $ - Accrued liabilities 1,184 - 24,930 - I Retentions payable - - - - Due to other funds - - - - Deferred revenues - - 68,068 - Unearned revenues - - - - Advances from other funds 2,185,750 - - - Total Liabilities 2,186,934 - 135,519 - Fund Balances: Nonspendabie: Advances to other funds - - 955,194 - Restricted for: Community development projects - - - - Public safety - - - - Public works - 391,816 912,449 572,140 Capital Projects - - - - Unassigned (730,677) - - - Total Fund Balances (730,677) 391,816 1,867,643 572,140 Total Liabilities and Fund Balances $ 1,456,257 $ 391,816 $ 2,003,162 $ 572,140 • 68 CITY OF CHINO HILLS COMBINING BALANCE SHEET NONMAJOR GOVERNMENTAL FUNDS JUNE 30,2012 Special Revenue Funds Federal Street Grants Measure I Solid Waste Sweeping Assets: Cash and investments $ - $ 2,548,407 $ 448,545 $ 570,555 Receivables: Accounts - - 470,340 - Taxes - - - - Interest - 885 - 203 Special assessments - - - 3,054 Due from other governments 38,393 - - - Due from developers - - - - Advances to other funds - - - - Restricted assets: Cash and investments with fiscal agents - - - - Total Assets $ 38,393 $ 2,549,292 $ 918,885 $ 573,812 Liabilities and Fund Balances: Liabilities: Accounts payable $ 17,880 $ - $ 842,317 $ 17,386 Accrued liabilities 413 - - - Retentions payable - - - - Due to other funds 20,100 - 76,568 - Deferred revenues - - - - Unearned revenues - - - Advances from other funds - - - - 1 Total Liabilities 38,393 - 918,885 17,386 Fund Balances: Nonspendable: Advances to other funds - - - - Restricted for: Community development projects - - - - Public safety - - - - Public works - 2,549,292 - 556,426 Capital Projects - - - - Unassigned - - - - Total Fund Balances - 2,549,292 - 556,426 Total Liabilities and Fund Balances $ 38,393 $ 2,549,292 $ 918,885 $ 573,812 69 CITY OF CHINO HILLS COMBINING BALANCE SHEET NONMAJOR GOVERNMENTAL FUNDS JUNE 30,2012 (Continued) Special Revenue Funds Local Government Affordable Energy Frontline Miscellaneous Housing Efficiency Policing Grants Program CDBG Assets: Cash and investments $ 600 $ - $ 215,401 $ - Receivables: Accounts - - - - Taxes - - - - Interest - - 73 - Special assessments - - - - Due from other governments 14,716 1,334,713 - 18,615 Due from developers - - - - Advances to other funds - - - - j Restricted assets: Cash and investments with fiscal agents - - - - Total Assets $ 15,316 $ 1,334,713 $ 215,474 $ 18,615 Liabilities and Fund Balances: Liabilities: Accounts payable $ - $ - $ - $ - Accrued liabilities - - - 9,362 Retentions payable - - - 7,617 Due to other funds - 131,294 - 9,254 Deferred revenues - 1,157,190 - - Unearned revenues - 71,581 - - Advances from other funds - 1,129,629 - - Total Liabilities - 2,489,694 - 26,233 Fund Balances: Nonspendabie: Advances to other funds - - - - Restricted for: Community development projects - - 215,474 - Public safety 15,316 - - - Public works - - - - Capital Projects Unassigned - (1,154,981) - (7,618) Total Fund Balances 15,316 (1,154,981) 215,474 (7,618) Total Liabilities and Fund Balances $ 15,316 $ 1,334,713 $ 215,474 $ 18,615 70 CITY OF CHINO HILLS COMBINING BALANCE SHEET NONMAJOR GOVERNMENTAL FUNDS JUNE 30,2012 . Special Revenue Funds Capital Project Funds CFD#9 Water Sewer Capital Rincon Facilities Fee Facilities Fee Improvement Village Assets: Cash and Investments $ 3,336,344 $ 179,000 $ 388,892 $ 3,698,314 Receivables: Accounts 232,924 172 - - Taxes - - - - Interest 1,162 260 - 74 Special assessments - - - - Due from other governments - - - Due from developers 38,544 1,865 - - Advances to other funds 3,560,977 3,546,344 - - Restricted assets: Cash and investments with fiscal agents - - - - Total Assets $ 7,169,951 $ 3,727,641 $ 388,892 $ 3,698,388 Liabilities and Fund Balances: Liabilities: Accounts payable $ 1,073 $ - $ 305,368 $ - Accrued liabilities - - 4,459 - Retentions payable - - 79,065 - Due to other funds - - - - 1 Deferred revenues 224,000 - - - 1 Unearned revenues - - - - Advances from other funds 1,981,800 - - - Total Liabilities 2,206,873 - 388,892 - Fund Balances: Nonspendable: Advances to other funds 3,560,977 3,546,344 - - Restricted for: Community development projects - - - - Public safety - - - - Public works 1,402,101 181,297 - - Capital Projects - - - 3,698,388 Unassigned - - - Total Fund Balances 4,963,078 3,727,641 - 3,698,388 Total Liabilities and Fund Balances $ 7,169,951 $ 3,727,641 $ 388,892 $ 3,698,388 71 CITY OF CHINO HILLS COMBINING BALANCE SHEET NONMAJOR GOVERNMENTAL FUNDS JUNE 30,2012 Capital Project Funds CFD#10 New Total Fair-field Community Governmental Ranch Center Funds Assets: Cash and investments $ - $ 3,686,426 $ 21,618,861 Receivables: Accounts - - 797,421 Taxes - - 219,738 Interest - 1,337 6,066 Special assessments - - 3,291 Due from other governments - - 1,429,767 Due from developers - - 53,128 Advances to other funds - - 9,646,249 Restricted assets: Cash and investments with fiscal agents 402,515 - 402,515 Total Assets $ 402,515 $ 3,687,763 $ 34,177,036 Liabilities and Fund Balances: Liabilities: Accounts payable $ - $ 341,339 $ 1,567,884 Accrued liabilities - - 40,348 Retentions payable - - 86,682 Due to other funds 1,969 - 239,185 Deferred revenues - - 1,449,258 Unearned revenues - - 71,581 Advances from other funds - - 5,297,179 Total Liabilities 1,969 341,339 8,752,117 Fund Balances: Nonspendable: Advances to other funds - - 9,646,249 Restricted for: Community development projects - - - 3,589,988 Public safety - - 15,316 Public works - - 6,621,284 Capital Projects 400,546 3,346,424 7,445,358 Unassigned - - (1,893,276) Total Fund Balances 400,546 3,346,424 25,424,919 Total Liabilities and Fund Balances $ 402,515 .$ 3,687,763 $ 34,177,036 72 CITY OF CHINO HILLS COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES NONMAJOR GOVERNMENTAL FUNDS YEAR ENDED JUNE 30,2012 Special Revenue Funds Sleepy General Traffic Storm Drain Hollow Road Facilities Facilities Facilities Improvement Fees Fees Fees Revenues: Special assessments $ 10,421 $ - $ - $ - 1 Intergovernmental - - - - Charges for services - - - - Developer fees - 32,886 3,978 29,780 Contributions from property owners - - - - Fines and forfeitures - - - - Contributions - - - - Use of money and property 269 2,201 4,662 11,834 Miscellaneous - - - - Total Revenues 10,690 35,087 8,640 41,614 Expenditures: Current: General government 325 - - - Public safety - - - - Public works - - - - Community development - 12,855 6,328 14,826 Culture and leisure - - - - Capital outlay - - - - Debt service: Principal retirement - - - 1,965,000 Interest and fiscal charges - - - 31,644 Total Expenditures 325 12,855 6,328 2,011,470 Excess(Deficiency)of Revenues Over(Under)Expenditures 10,365 22,232 2,312 (1,969,856) Other Financing Sources(Uses): Transfers in - - - 1,996,644 Transfers out - - - (2,199,447) Total Other Financing Sources (Uses) - - - (202,803) Net Change in Fund Balances 10,365 22,232 2,312 (2,172,659) Fund Balances, Beginning of Year 45,398 1,164,202 1,009,808 4,932,353 Fund Balances,End of Year $ 55,763 $ 1,186,434 $ 1,012,120 $ 2,759,694 73 CITY OF CHINO HILLS COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES ', NONMAJOR GOVERNMENTAL FUNDS YEAR ENDED JUNE 30,2012 (Continued) Special Revenue Funds Parkland Traffic Signal Fees Fees Gas Tax Air Quality Revenues: Special assessments $ - $ - $ - $ - Intergovernmental - - 2,191,970 94,510 Charges for services - - - - Developer fees 54,867 - - - Contributions from property owners - - - - Fines and forfeitures - - - - Contributions - - - - Use of money and property 7,610 2,094 7,757 2,866 Miscellaneous - - 37,937 25,000 Total Revenues 62,477 2,094 2,237,664 122,376 Expenditures: Current: General government - - - 8,377 Public safety - - - - Public works - 147 1,563,137 - Community development 22,244 - - - Culture and leisure - - - - Capital outlay - - - 558 Debt service: Principal retirement - - - - Interest and fiscal charges 15,592 - - - Total Expenditures 37,836 147 1,563,137 8,935 Excess(Deficiency)of Revenues Over(Under)Expenditures 24,641 1,947 674,527 113,441 Other Financing Sources(Uses): Transfers In - - - - Transfers out - - (88,312) (51,146) Total Other Financing Sources (Uses) - - (88,312) (51,146) Net Change in Fund Balances 24,641 1,947 586,215 62,295 Fund Balances, Beginning of Year (755,318) 389,869 1,281,428 509,845 Fund Balances,End of Year $ (730,677) $ 391,816 $ 1,867,643 $ 572,140 74 CITY OF CHINO HILLS COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES NONMAJOR GOVERNMENTAL FUNDS YEAR ENDED JUNE 30,2012 Special Revenue Funds Federal Street Grants Measure I Solid Waste Sweeping Revenues: Special assessments $ - $ - $ - $ 198,991 Intergovernmental 259,956 1,008,443 - - Charges for services - - 4,372,424 - Developer fees - - - - Contributions from property owners - - - - Fines and forfeitures - - - Contributions - - - Use of money and property - 12,593 - 3,162 Miscellaneous - - - - Total Revenues 259,956 1,021,036 4,372,424 202,153 Expenditures: Current: General government 637 - - - Public safety - - - Public works - 4,289 4,372,424 284,261 Community development 162,044 - - - Culture and leisure 97,275 - - - Capital outlay - - - - Debt service: Principal retirement - - - - Interest and fiscal charges - - - Total Expenditures 259,956 4,289 4,372,424 284,261 Excess(Deficiency)of Revenues Over(Under)Expenditures - 1,016,747 - (82,108) Other Financing Sources(Uses): Transfers in - - - - - Transfers out - (414,455) - - Total Other Financing Sources (Uses) - (414,455) - - Net Change in Fund Balances - 602,292 - (82,108) Fund Balances, Beginning of Year - 1,947,000 - 638,534 Fund Balances,End of Year $ - $ 2,549,292 $ - $ 556,426 75 CITY OF CHINO HILLS COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES NONMAJOR GOVERNMENTAL FUNDS YEAR ENDED JUNE 30,2012 (Continued) Special Revenue Funds Local Government Affordable Energy Frontline Miscellaneous Housing Efficiency Policing Grants Program CDBG Revenues: Special assessments $ - $ - $ - $ - Intergovernmental 128,968 2,129,017 - 408,119 Charges for services - - - - Developer fees - - 45,105 - Contributions from property owners - - - - Fines and forfeitures - 3,144 - - Contributions - - - - Use of money and property - - 1,015 - Miscellaneous - - - - Total Revenues 128,968 2,132,161 46,120 408,119 Expenditures: Current: General government - - - - Public safety 124,976 - - - Public works - - - - Community development - - 71 43,479 Culture and leisure - - - - Capital outlay - - - 372,258 Debt service: Principal retirement - - - - Interest and fiscal charges - - - - Total Expenditures 124,976 - 71 415,737 Excess(Deficiency)of Revenues Over(Under)Expenditures 3,992 2,132,161 46,049 (7,618) Other Financing Sources(Uses): Transfers in - - - - Transfers out - (2,668,604) - - Total Other Financing Sources (Uses) - (2,668,604) - - Net Change in Fund Balances 3,992 (536,443) 46,049 (7,618) Fund Balances, Beginning of Year 11,324 (618,538) 169,425 - Fund Balances,End of Year $ 15,316 $ (1,154,9811 $ 215,474 $ (7,618) 76 CITY OF CHINO HILLS COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES NONMAJOR GOVERNMENTAL FUNDS YEAR ENDED JUNE 30,2012 Special Revenue Funds Capital Project Funds CFD#9 Water Sewer Capital Rincon Facilities Fee Facilities Fee Improvement Village Revenues: Special assessments $ 5,270 $ - $ - $ - Intergovernmental - - - - Charges for services - - - - Developer fees - - - - Contributions from property owners - - 163 4,410,158 Fines and forfeitures - - - - Contributions 198,192 - - - Use of money and property 17,389 24,701 - 875 Miscellaneous - 33,321 - - Total Revenues 220,851 58,022 163 4,411,033 Expenditures: Current: General government - - - - Public safety - - - - Public works 60,212 2,490 1,774,416 718,975 Community development - - - - Culture and leisure - - - - Capital outlay - - 2,628,617 - Debt service: Principal retirement - - - - Interest and fiscal charges 14,137 - - - Total Expenditures 74,349 2,490 4,403,033 718,975 Excess(Deficiency)of Revenues Over(Under)Expenditures 146,502 55,532 (4,402,870) 3,692,058 Other Financing Sources(Uses): Transfers in - - 4,402,870 - Transfers out (300,955) (22,834) - - Total Other Financing Sources (Uses) (300,955) (22,834) 4,402,870 - Net Change in Fund Balances (154,453) 32,698 - 3,692,058 Fund Balances, Beginning of Year 5,117,531 3,694,943 - 6,330 Fund Balances, End of Year $ 4,963,078 $ 3,727,641 $ - $ 3,698,388 77 CITY OF CHINO HILLS COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES NONMAJOR GOVERNMENTAL FUNDS YEAR ENDED JUNE 30,2012 , Capital Project Funds CFD#10 New Total Fairfield Community Governmental Ranch Center Funds Revenues: Special assessments $ - $ - $ 214,682 Intergovernmental - - 6,220,983 Charges for services - - 4,372,424 Developer fees - - 166,616 Contributions from property owners - - 4,410,321 Fines and forfeitures - - 3,144 Contributions - - 198,192 Use of money and property - 21,343 120,371 Miscellaneous - - 96,258 Total Revenues - 21,343 15,802,991 1, Expenditures: Current: General government - - 9,339 Public safety - - 124,976 Public works - - 8,780,351 Community development - - 261,847 Culture and leisure - - 97,275 Capital outlay 2,585 614,765 3,618,783 Debt service: Principal retirement - - 1,965,000 Interest and fiscal charges - - 61,373 Total Expenditures 2,585 614,765 14,918,944 Excess(Deficiency)of Revenues Over(Under)Expenditures (2,585) (593,422) 884,047 Other Financing Sources(Uses): Transfers In - - 6,399,514 Transfers out - - (5,745,753) Total Other Financing Sources (Uses) - - 653,761 Net Change in Fund Balances (2,585) (593,422) 1,537,808 Fund Balances, Beginning of Year 403,131 3,939,846 23,887,111 Fund Balances,End of Year _$ 400,546 $ 3,346,424 $ 25,424,919 78 CITY OF CHINO HILLS BUDGETARY COMPARISON SCHEDULE SLEEPY HOLLOW ROAD IMPROVEMENT YEAR ENDED JUNE 30,2012 Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) Budgetary Fund Balance,July 1 $ 45,398 $ 45,398 $ 45,398 $ - Resources(Inflows): Special assessments 9,100 9,100 10,421 1,321 Use of money and property 200 200 269 69 Amounts Available for Appropriation 54,698 54,698 56,088 1,390 Charges to Appropriation(Outflow): General government 100 400 325 75 Total Charges to Appropriations 100 400 325 75 Budgetary Fund Balance,June 30 $ 54,598 $ 54,298 $ 55,763 $ 1,465 79 CITY OF CHINO HILLS BUDGETARY COMPARISON SCHEDULE GENERAL FACILITIES FEES YEAR ENDED JUNE 30,2012 Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) Budgetary Fund Balance,July 1 $1,164,202 $ 1,164,202 $ 1,164,202 $ - Resources (Inflows): Developer fees 98,500 98,500 32,886 (65,614) Use of money and properly 3,100 3,100 2,201 (899) Amounts Available for Appropriation 1,265,802 1,265,802 1,199,289 (66,513) Charges to Appropriation (Outflow): Community development 12,700 12,700 12,855 (155) Transfers out 348,000 348,000 - 348,000 Total Charges to Appropriations 360,700 360,700 12,855 347,845 Budgetary Fund Balance,June 30 $ 905,102 $ 905,102 $ 1,186,434 $ 281,332 80 CITY OF CHINO HILLS BUDGETARY COMPARISON SCHEDULE TRAFFIC FACILITIES FEES YEAR ENDED JUNE 30,2012 Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) Budgetary Fund Balance,July 1 $1,009,808 $ 1,009,808 $1,009,808 $ - Resources(Inflows): Developer fees 12,200 12,200 3,978 (8,222) Use of money and property 6,900 6,900 4,662 (2,238) Amounts Available for Appropriation 1,028,908 1,028,908 1,018,448 (10,460) Charges to Appropriation(Outflow): Community development 6,000 6,000 6,328 (328) Transfers out - 800,000 - 800,000 Total Charges to Appropriations 6,000 806,000 6,328 799,672 Budgetary Fund Balance,June 30 $1,022,908 $ 222,908 $1,012,120 $ 789,212 81 CITY OF CHINO HILLS BUDGETARY COMPARISON SCHEDULE STORM DRAIN FACILITIES FEES YEAR ENDED JUNE 30,2012 Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) Budgetary Fund Balance,July 1 $4,932,353 $ 4,932,353 $4,932,353 $ - Resources(Inflows): Developer fees 67,000 67,000 29,780 (37,220) Use of money and property 22,200 22,200 11,834 (10,366) Transfers in - 1,996,700 1,996,644 (56) Amounts Available for Appropriation 5,021,553 7,018,253 6,970,611 (47,642) Charges to Appropriation(Outflow): Community development 14,600 14,600 14,826 (226) Debt service: Principal retirement - 1,965,000 1,965,000 - Interest and fiscal charges - 31,700 31,644 56 Transfers out 1,216,200 3,221,900 2,199,447 1,022,453 Total Charges to Appropriations 1,230,800 5,233,200 4,210,917 1,022,283 Budgetary Fund Balance,June 30 $3,790,753 $ 1,785,053 $2,759,694 $ 974,641 82 CITY OF CHINO HILLS BUDGETARY COMPARISON SCHEDULE PARKLAND FEES YEAR ENDED JUNE 30,2012 Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) Budgetary Fund Balance, July 1 $ (755,318) $ (755,318) $ (755,318) $ - Resources (Inflows): Developer fees 133,200 133,200 54,867 (78,333) Use of money and property 12,200 12,200 7,610 (4,590) Amounts Available for Appropriation (609,918) (609,918) (692,841) (82,923) Charges to Appropriation(Outflow): Community development 21,700 21,700 22,244 (544) Debt service: Principal retirement - 200,000 - 200,000 Interest and fiscal charges - 17,000 15,592 1,408 Total Charges to Appropriations 21,700 238,700 37,836 200,864 Budgetary Fund Balance,June 30 $ (631,618) $ (848,618) $ (730,677) $ 117,941 83 CITY OF CHINO HILLS BUDGETARY COMPARISON SCHEDULE TRAFFIC SIGNAL FEES YEAR ENDED JUNE 30,2012 Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) Budgetary Fund Balance,July 1 $ 389,869 $ 389,869 $ 389,869 $ - Resources(Inflows): Use of money and property 2,700 2,700 2,094 (606) Amounts Available for Appropriation 392,569 392,569 391,963 (606) Charges to Appropriation(Outflow): Public works 352,000 - 147 (147) Debt service: Principal retirement 141,400 - - Interest and fiscal charges 74,700 - - - Transfers out 200,000 216,700 - 216,700 Total Charges to Appropriations 768,100 216,700 147 216,553 Budgetary Fund Balance,June 30 $ (375,531) $ 175,869 $ 391,816 $ 215,947 84 CITY OF CHINO HILLS BUDGETARY COMPARISON SCHEDULE GAS TAX YEAR ENDED JUNE 30,2012 Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) Budgetary Fund Balance, July 1 $1,281,428 $ 1,281,428 $ 1,281,428 $ - Resources (inflows): Intergovernmental 2,011,100 2,011,100 2,191,970 180,870 Use of money and property 3,000 3,000 7,757 4,757 Miscellaneous 37,937 37,937 Amounts Available for Appropriation 3,295,528 3,295,528 3,519,092 223,564 Charges to Appropriation(Outflow): Public works 1,513,100 1,625,400 1,563,137 62,263 Transfers out 355,900 1,455,600 88,312 1,367,288 Total Charges to Appropriations 1,869,000 3,081,000 1,651,449 1,429,551 Budgetary Fund Balance,June 30 $1,426,528 $ 214,528 $ 1,867,643 $ 1,853,115 85 CITY OF CHINO HILLS BUDGETARY COMPARISON SCHEDULE AIR QUALITY YEAR ENDED JUNE 30,2012 Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) Budgetary Fund Balance,July 1 $ 509,845 $ 509,845 $ 509,845 $ - Resources(Inflows): Intergovernmental 90,100 90,100 94,510 4,410 Use of money and property 3,000 3,000 2,866 (134) Miscellaneous - 25,000 25,000 Amounts Available for Appropriation 602,945 602,945 632,221 29,278 Charges to Appropriation(Outflow): General government 8,200 8,200 8,377 (177) Capital outlay 10,000 134,700 55B 134,142 Transfers out 156,500 259,700 51,146 208,554 Total Charges to Appropriations 174,700 402,600 60,081 342,519 Budgetary Fund Balance,June 30 $ 428,245 $ 200,345 $ 572,140 $ 371,795 86 CITY OF CHINO HILLS BUDGETARY COMPARISON SCHEDULE FEDERAL GRANTS YEAR ENDED JUNE 30,2012 Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) Budgetary Fund Balance,July 1 $ - $ - $ - $ - Resources(Inflows): Intergovernmental 422,700 380,000 259,956 (120,044) !1 Amounts Available for Appropriation 422,700 380,000 259,956 (120,044) Charges to Appropriation(Outflow): 1 General government 5,000 5,000 637 4,363 Public safety 202,300 - - - Community development 274,800 651,300 162,044 489,256 Culture and leisure - 128,000 97,275 30,725 1 Debt service: Principal retirement 1,140,000 - - - Interest and fiscal charges 178,500 - - - Total Charges to Appropriations 1,800,600 784,300 259,956 524,344 Budgetary Fund Balance,June 30 $(1,377,900) $ (404,300) $ - $ 404,300 87 CITY OF CHINO HILLS BUDGETARY COMPARISON SCHEDULE MEASURE I YEAR ENDED JUNE 30,2012 , Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) Budgetary Fund Balance,July 1 $1,947,000 $ 1,947,000 $1,947,000 $ - Resources(Inflows): j Intergovernmental 914,400 972,300 1,008,443 36,143 Use of money and property 1,600 1,600 12,593 10,993 I Amounts Available for Appropriation 2,863,000 2,920,900 2,968,036 47,136 Charges to Appropriation(Outflow): Public works 103,800 3,400 4,289 (889) Transfers out 2,141,100 1,589,700 414,455 1,175,245 . Total Charges to Appropriations 2,244,900 1,593,100 418,744 1,174,356 Budgetary Fund Balance,June 30 $ 618,100 $ 1,327,800 $2,549,292 $ 1,221,492 88 CITY OF CHINO HILLS BUDGETARY COMPARISON SCHEDULE SOLID WASTE YEAR ENDED JUNE 30,2012 Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) Budgetary Fund Balance,July 1 $ - $ - $ - $ _ Resources(Inflows): Charges for services 4,228,400 4,228,400 4,372,424 144,024 Amounts Available for Appropriation 4,228,400 4,228,400 4,372,424 144,024 Charges to Appropriation(Outflow): Public works 4,228,400 4,228,400 4,372,424 (144,024) Total Charges to Appropriations 4,228,400 4,228,400 4,372,424 (144,024) Budgetary Fund Balance,June 30 $ $ • $ • $ - 89 CITY OF CHINO HILLS BUDGETARY COMPARISON SCHEDULE STREET SWEEPING YEAR ENDED JUNE 30,2012 Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) Budgetary Fund Balance,July 1 $ 638,534 $ 638,534 $ 638,534 $ - Resources(Inflows): Special assessments 198,600 198,600 198,991 391 Use of money and property 5,700 5,700 3,162 (2,538) Amounts Available for Appropriation 842,834 842,834 840,687 (2,147) Charges to Appropriation(Outflow): Public works 7,200 284,000_ 284,261 (261) Total Charges to Appropriations 7,200 284,000 284,261 (261) Budgetary Fund Balance,June 30 $ 835,634 $ 558,834 $ 556,426 $ (2,408) 1 90 CITY OF CHINO HILLS BUDGETARY COMPARISON SCHEDULE FRONTLINE POLICING YEAR ENDED JUNE 30,2012 Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) Budgetary Fund Balance,July 1 $ 11,324 $ 11,324 $ 11,324 $ - Resources(Inflows): Intergovernmental 100,000 143,000 128,968 (14,032) Amounts Available for Appropriation 111,324 154,324 140,292 (14,032) Charges to Appropriation(Outflow): Public safety 142,900 143,400 124,976 18,424 Total Charges to Appropriations 142,900 143,400 124,978 18,424 Budgetary Fund Balance,June 30 $ (31,576) $ 10,924 $ 15,316 $ 4,392 91 CITY OF CHINO HILLS BUDGETARY COMPARISON SCHEDULE MISCELLANEOUS GRANTS YEAR ENDED JUNE 30,2012 , Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) Budgetary Fund Balance,July 1 $ (618,538) $ (618,538) $ (618,538) $ - Resources(Inflows): Intergovernmental 6,162,400 7,053,400 2,129,017 (4,924,383) Fines and forfeitures - - 3,144 3,144 Amounts Available for Appropriation 5,543,862 6,434,862 1,513,623 (4,921,239) Charges to Appropriation(Outflow): Transfers out 6,162,400 11,123,900 2,668,604 8,455,296 Total Charges to Appropriations 6,162,400 11,123,900 2,668,604 8,455,296 Budgetary Fund Balance,June 30 $ (618,538) $(4,689,038) $(1,154,981) $ 3,534,057 92 CITY OF CHINO HILLS BUDGETARY COMPARISON SCHEDULE AFFORDABLE HOUSING PROGRAM YEAR ENDED JUNE 30,2012 Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) Budgetary Fund Balance,July 1 $ 169,425 $ 169,425 $ 169,425 $ - Resources (Inflows): Developer fees 15,000 15,000 45,105 30,105 Use of money and property 700 700 1,015 315 Amounts Available for Appropriation 185,125 185,125 215,545 30,420 Charges to Appropriation (Outflow): Community development 15,000 15,000 71 14,929 Total Charges to Appropriations 15,000 15,000 71 14,929 Budgetary Fund Balance,June 30 $ 170,125 $ 170,125 $ 215,474 $ 45,349 93 CITY OF CHINO HILLS BUDGETARY COMPARISON SCHEDULE LOCAL GOVERNMENT ENERGY EFFICIENCY CDBG YEAR ENDED JUNE 30,2012 Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) Budgetary Fund Balance,July 1 $ - $ - $ - $ Resources(Inflows): Intergovernmental 484,000 484,000 408,119 (75,881) Amounts Available for Appropriation 484,000 484,000 408,119 (75,881) Charges to Appropriation(Outflow): Community development - 43,600 43,479 121 Capital outlay - 439,000 372,258 66,742 Total Charges to Appropriations - 482,600 415,737 66,863 Budgetary Fund Balance,June 30 $ 484,000 $ 1,400 $ (7,618) $ (9,018) 94 CITY OF CHINO HILLS BUDGETARY COMPARISON SCHEDULE WATER FACILITIES FEE YEAR ENDED JUNE 30,2012 Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) Budgetary Fund Balance,July 1 $ 5,117,531 $ 5,117,531 $ 5,117,531 $ - Resources (Inflows): Special assessments 5,000 5,000 5,270 270 Contributions 294,700 294,700 198,192 (96,508) Use of money and property 53,400 53,400 17,389 (36,011) Miscellaneous 400,000 400,000 - (400,000) Amounts Available for Appropriation 5,870,631 5,870,631 5,338,382 (532,249) Charges to Appropriation (Outflow): Public works 57,500 58,900 60,212 (1,312) Debt service: Principal retirement - 330,300 - 330,300 Interest and fiscal charges - 16,100 14,137 1,963 Transfers out 2,722,200 2,997,400 300,955 2,696,445 Total Charges to Appropriations 2,779,700 3,402,700 375,304 3,027,396 Budgetary Fund Balance,June 30 $ 3,090,931 $ 2,467,931 $ 4,963,078 $ 2,495,147 95 CITY OF CHINO HILLS BUDGETARY COMPARISON SCHEDULE SEWER FACILITIES FEE YEAR ENDED JUNE 30,2012 , Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) Budgetary Fund Balance,July 1 $3,694,943 $ 3,694,943 $3,694,943 $ - Resources(Inflows): Use of money and property 35,500 35,500 24,701 (10,799) Miscellaneous 24,500 24,500 33,321 8,821 Amounts Available for Appropriation 3,754,943 3,754,943 3,752,965 (1,978) Charges to Appropriation(Outflow): Public works 2,100 2,100 2,490 (390) Debt service: Principal retirement 330,300 - - - Interest and fiscal charges 16,100 - - - Transfers out 105,000 105,000 22,834 82,166 Total Charges to Appropriations 453,500 107,100 25,324 81,776 Budgetary Fund Balance,June 30 $3,301,443 $ 3,647,843 $3,727,641 $ 79,798 96 CITY OF CHINO HILLS BUDGETARY COMPARISON SCHEDULE CAPITAL IMPROVEMENT YEAR ENDED JUNE 30,2012 , Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) Budgetary Fund Balance,July 1 $ - $ - $ - $ - Resources(Inflows): Contributions from property owners 162,500 162,500 163 (162,337) Transfers in 19,040,000 25,249,900 4,402,870 (20,847,030) Amounts Available for Appropriation 19,202,500 25,412,400 4,403,033 (21,009,367) Charges to Appropriation(Outflow): Public works - - 1,774,416 (1,774,416) Capital outlay 5,352,100 25,371,200 2,628,617 22,742,583 Total Charges to Appropriations 5,352,100 25,371,200 4,403,033 20,968,167 Budgetary Fund Balance,June 30 $ 13,850,400 $ 41,200 $ - $ (41,200) 97 CITY OF CHINO HILLS BUDGETARY COMPARISON SCHEDULE CFD#9 RINCON VILLAGE YEAR ENDED JUNE 30,2012 , Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) Budgetary Fund Balance,July 1 $ 6,330 $ 6,330 $ 6,330 $ - Resources(Inflows): Contributions from property owners 722,600 722,600 4,410,158 3,687,558 Use of money and property - - 875 875 Amounts Available for Appropriation 728,930 728,930 4,417,363 3,688,433 Charges to Appropriation(Outflow): Public works - 722,600 718,975 3,625 Total Charges to Appropriations - 722,600 718,975 3,625 Budgetary Fund Balance,June 30 $ 728,930 $ 6,330 $3,698,388 $ 3,692,058 98 CITY OF CHINO HILLS BUDGETARY COMPARISON SCHEDULE CFD#10 FAIRFIELD RANCH YEAR ENDED JUNE 30,2012 Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) Budgetary Fund Balance,July 1 $ 403,131 $ 403,131 $ 403,131 $ - Resources (Inflows): Use of money and property 3,200 3,200 - (3,200) Amounts Available for Appropriation 406,331 406,331 403,131 (3,200) Charges to Appropriation(Outflow): Capital outlay 285,600 285,600 2,585 283,015 Total Charges to Appropriations 285,600 285,600 2,585 283,015 Budgetary Fund Balance,June 30 $ 120,731 $ 120,731 $ 400,546 $ 279,815 99 CITY OF CHINO HILLS BUDGETARY COMPARISON SCHEDULE NEW COMMUNITY CENTER YEAR ENDED JUNE 30,2012 Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) Budgetary Fund Balance,July 1 $ 3,939,846 $ 3,939,846 $3,939,846 $ - Resources(Inflows): Use of money and property - - 21,343 21,343 Amounts Available for Appropriation 3,939,846 3,939,846 3,961,189 21,343 Charges to Appropriation(Outflow): Capital outlay 18,326,800 3,812,700 614,765 3,197,935 Total Charges to Appropriations 18,326,800 3,812,700 614,765 3,197,935 Budgetary Fund Balance,June 30 $(14,386,954) $ 127,146 $3,346,424 $ 3,219,278 100 CITY OF CHINO HILLS COMBINING STATEMENT OF NET ASSETS INTERNAL SERVICE FUNDS JUNE 30,2012 Governmental Activities-Internal Service Funds Equipment Information Maintenance Technology Totals Assets: Current: Cash and investments $ 3,143,758 $ 238,013 $ 3,381,771 Receivables: Accounts - 20,836 20,836 Accrued interest 1,062 55 1,117 Due from other agencies - 4,069 4,069 Total Current Assets 3,144,820 262,973 3,407,793 Noncurrent: Capital assets-net of accumulated depreciation 1,803,870 218,456 2,022,326 Total Noncurrent Assets 1,803,870 218,456 2,022,326 Total Assets $ 4,948,690 $ 481,429 $ 5,430,119 Liabilities and Net Assets: Liabilities: Current: Accounts payable $ 119,047 $ 19,776 $ 138,823 Accrued liabilities 9,240 15,443 24,683 Compensated absences 500 - 500 Capital leases - 95,262 95,262 Total Current Liabilities 128,787 130,481 259,268 Noncurrent: Compensated absences 16,534 15,815 32,349 Capital leases - 32,632 32,632 Total Noncurrent Liabilities 16,534 48,447 64,981 ' Total Liabilities 145,321 178,928 324,249 Net Assets: Invested in capital assets,net of related debt 1,803,870 90,562 1,894,432 Unrestricted 2,999,499 211,939 3,211,438 Total Net Assets 4,803,369 302,501 5,105,870 Total Liabilities and Net Assets $ 4,948,690 $ 481,429 $ 5,430,119 101 CITY OF CHINO HILLS COMBINING STATEMENT OF REVENUES, EXPENSES AND CHANGES IN FUND NET ASSETS INTERNAL SERVICE FUNDS YEAR ENDED JUNE 30,2012 , Governmental Activities-Internal Service Funds Equipment Information Maintenance Technology Totals Operating Revenues: Charges for services $ 1,156,135 $ 1,092,556 $ 2,246,691 Other 579 31 610 Total Operating Revenues 1,156,714 1,092,587 2,249,301 Operating Expenses: Salaries and benefits 244,112 426,918 671,030 Professional and contractual services 2,134 323,423 325,557 Repair and maintenance 206,675 59,926 266,601 Service and supplies 246,685 6,424 253,109 Administrative and general expenses 68,618 92,468 161,086 Depreciation and amortization 471,294 153,448 624,742 Total Operating Expenses 1,239,518 1,062,607 2,302,125 Operating Income(Loss) (82,804) 29,980 (52,824) Nonoperating Revenues(Expenses): Interest revenue 16,383 715 17,098 Interest expense - (7,297) (7,297) Total Nonoperating Revenues(Expenses) 16,383 (6,582) 9,801 Income(Loss)Before Contributions and Transfers (66,421) 23,398 (43,023) Contributions from other funds 208,268 - 208,268 Transfers out - (80,200) (80,200) Changes in Net Assets 141,847 (56,802) 85,045 Net Assets: Beginning of Year,as originally reported 4,661,522 295,237 4,956,759 Restatements - 64,066 64,066 Beginning of Fiscal Year,as restated 4,661,522 359,303 5,020,825 End of Fiscal Year $ 4,803,369 $ 302,501_ $ 5,105,870 102 CITY OF CHINO HILLS COMBINING STATEMENT OF CASH FLOWS INTERNAL SERVICE FUNDS YEAR ENDED JUNE 30,2012 Governmental Activities-internal Service Funds Equipment Information Maintenance Technology Totals Cash Flows from Operating Activities: Cash received from customers and users $ 1,156,714 $ 1,093,060 $2,249,774 Cash paid to suppliers for goods and services (378,056) (325,222) (703,278) Cash paid to employees for services (312,870) (519,862) (832,732) Net Cash Provided (Used)by Operating Activities 465,788 247,976 713,764 Cash Flows from Non-Capital Financing Activities: Cash transfers out - (80,200) (80,200) Contributions from other funds 208,268 - 208,268 Net Cash Provided(Used)by Non-Capital Financing Activities 208,268 (80,200) 128,068 Cash Flows from Capital and Related Financing Activities: Purchases of capital assets (469,310) (62,728) (532,038) Principal paid on capital lease - (91,437) (91,437) Interest paid on capital lease - (7,297) (7,297) Net Cash Provided(Used)by Capital and Related Financing Activities (469,310) (161,462) (630,772) Cash Flows from Investing Activities: Interest received 20,276 1,145 21,421 Net Cash Provided(Used)by Investing Activities 20,276 1,145 21,421 Net Increase(Decrease)in Cash and Cash Equivalents 225,022 7,459 232,481 Cash and Cash Equivalents at Beginning of Year 2,918,736 230,554 3,149,290 Cash and Cash Equivalents at End of Year $ 3,143,758 $ 238,013 $3,381,771 Reconciliation of Operating Income to Net Cash Provided (Used)by Operating Activities: Operating income(loss) $ (82,804) $ 29,980 $ (52,824) Adjustments to reconcile operating income(loss) net cash provided(used)by operating activities: Depreciation 471,294 153,448 624,742 (Increase)decrease in accounts receivable - 1,156 1,156 (Increase)decrease in due from other agencies - (683) (683) Restatement related to prior year expenses - 64,066 64,066 Increase(decrease)in accounts payable 77,438 485 77,923 Increase(decrease)in accrued liabilities 540 (715) (175) Increase(decrease)in compensated absences (680) 239 (441) Total Adjustments 548,592 217,996 766,588 Net Cash Provided(Used)by Operating Activities $ 465,788 $ 247,976 $ 713,764 Non-Cash Investing,Capital,and Financing Activities: There were no non-cash transactions 103 CITY OF CHINO HILLS COMBINING BALANCE SHEET ALL AGENCY FUNDS JUNE 30,2012 CFD#1 CFD#2 Los AD#1980 AD #1994 Rolling Ridge Ranchos Assets: Cash and investments $ 14,297 $ 1,213,170 $ 1,716,535 $ 6,511,563 Receivables: Interest 5 418 609 2,274 Special assessments - - 13,836 25,093 Restricted assets: Cash and investments with fiscal agents - - 721,303 1,676,080 Total Assets $ 14,302 $ 1,213,588 $ 2,452,283 $ 8,215,010 Liabilities: Accounts payable $ - $ - $ 94 $ 188 Deposits payable - - - Funds held for others 14,302 1,213,588 2,452,189 8,214,822 Due to Inland Empire Utility Agency - - - - Total Liabilities $ 14,302 $ 1,213,588 $ 2,452,283 $ 8,215,010 104 CITY OF CHINO HILLS COMBINING BALANCE SHEET ALL AGENCY FUNDS JUNE 30,2012 (Continued) I, CFD#6 CFD#4 The CFD#5 Carbon CFD#8 Oaks Rlncon Village Canyon Butterfield Assets: Cash and investments $ 12,166,371 $ 1,719,675 $ 1,236,448 $ 2,416,335 Receivables: Interest 4,219 683 433 860 Special assessments 9,925 31,279 3,916 13,155 Restricted assets: Cash and Investments with fiscal agents 421,614 1,502,976 203,786 335,336 Total Assets $ 12,602,129 $ 3,254,613 $ 1,444,563 $ 2,765,686 Liabilities: Accounts payable $ 63 $ 188 $ 31 $ 63 Deposits payable Funds held for others 12,602,066 3,254,425 1,444,552 2,765,623 Due to Inland Empire Utility Agency Total Liabilities $ 12,602,129 $ 3,254,613 $ 1,444,583 $ 2,765,686 105 CITY OF CHINO HILLS COMBINING BALANCE SHEET ALL AGENCY FUNDS JUNE 30,2012 , CFD#10 CFD#9 Fairfield General Rincon Village Ranch Agency Fund RAD 104 Assets: Cash and investments $ 667,301 $ 747,973 $ 2,776,357 $ 489,814 Receivables: Interest 215 237 - 159 Special assessments 8,931 12,910 - 3,926 Restricted assets: Cash and investments with fiscal agents 491,500 981,750 - 350,500 Total Assets $ 1,167,947 $ 1,742,870 $ 2,776,357 $ 844,399 Liabilities: Accounts payable $ 63 $ 31 $ 157,603 $ 126 Deposits payable - - 1,893,128 - Funds held for others 1,167,884 1,742,839 - 844,273 Due to Inland Empire Utility Agency - - 725,626 - Total Liabilities $ 1,167,947 $ 1,742,870 $ 2,776,357 $ 844,399 106 CITY OF CHINO HILLS COMBINING BALANCE SHEET ALL AGENCY FUNDS JUNE 30,2012 Totals Assets: Cash and investments $ 31,675,839 Receivables: Interest 10,112 Special assessments 122,971 Restricted assets: Cash and Investments with fiscal agents 6,684,845 Total Assets $ 38,493,767 Liabilities: Accounts payable $ 158,450 Deposits payable 1,893,128 Funds held for others 35,716,563 Due to Inland Empire Utility Agency 725,626 Total Liabilities $ 38,493,767 107 CITY OF CHINO HILLS COMBINING STATEMENT OF CHANGES IN ASSETS AND LIABILITIES ALL AGENCY FUNDS YEAR ENDED JUNE 30,2012 , Balance Balance 7/1/2011 Additions Deductions 6/30/2012 AD#1980 Assets: Pooled cash and investments $ 11,111 $ 3,254 $ 68 $ 14,297 Receivables: Accrued interest 18 5 18 5 Special assessments 69 - 69 - Total Assets $ 11,198 $ 3,259 $ 155 $ 14,302 Liabilities: Funds held for others $ 11,198 $ 3,259 $ 155 $ 14,302 Total Liabilities $ 11,198 $ 3,259 $ 155 $ 14,302 AD #1994 Assets: Pooled cash and investments $ 1,205,532 $ 14,421 $ 6,783 $ 1,213,170 Receivables: Accrued interest 2,024 418 2,024 418 Total Assets $ 1,207,556 $ 14,839 $ 8,807 $ 1,213,588 Liabilities: Funds held for others $ 1,207,556 $ 14,839 $ 8,807 $ 1,213,588 Total Liabilities $ 1,207,556 $ 14,839 $ 8,807 $ 1,213,588 CFD#1 Rolllna Ridae Assets: Pooled cash and investments $ 1,523,036 $ 1,747,748 $ 1,554,249 $ 1,716,535 Receivables: Accrued interest 2,609 609 2,609 609 Special assessments 22,949 13,836 22,949 13,836 Restricted assets: Cash and investments with fiscal agents 721,303 1,318,409 1,318,409 721,303 Total Assets $ 2,269,897 $ 3,080,602 $ 2,898,216 $ 2,452,283 Liabilities: Accounts payable $ 88 $ 94 $ 88 $ 94 Funds held for others 2,269,809 3,080,507 2,898,127 • 2,452,189 Total Liabilities $ 2,269,897 $ 3,080,601 $ 2,898,215 $ 2,452,283 CFD#2 Los Ranchos Assets: Pooled cash and Investments $ 6,216,103 $ 2,750,118 $ 2,454,658 $ 6,511,563 Receivables: Accrued interest 10,553 2,274 10,553 2,274 Special assessments 25,619 25,093 25,619 25,093 Restricted assets: Cash and investments with fiscal agents 1,676,080 2,056,294 2,056,294 1,676,080 Total Assets $ 7,928,355_ $ 4,833,779 , $ 4,547,124 $ 8,215,010 Liabilities: Accounts payable $ 175 $ 188 $ 175 $ 188 Funds held for others 7,928,180 4,833,591 4,546,949 8,214,822 Total Liabilities $ 7,928,355 $ 4,833,779 $ 4,547,124 $ 8,215,010 108 CITY OF CHINO HILLS COMBINING STATEMENT OF CHANGES IN ASSETS AND LIABILITIES ALL AGENCY FUNDS YEAR ENDED JUNE 30,2012 , Balance Balance 7/1/2011 Additions Deductions 6/30/2012 CFD#4 The Oaks Assets: Pooled cash and investments $ 11,991,916 $ 1,224,361 $ 1,049,906 $ 12,166,371 Receivables: Accrued Interest 20,257 4,219 20,257 4,219 Special assessments 12,129 9,925 12,129 9,925 Restricted assets: Cash and investments with fiscal agents 421,614 803,117 803,117 421,614 Total Assets $ 12,445,916 $ 2,041,622 $ 1,885,409 $ 12,602,129 Liabilities: Accounts payable $ 59 $ 63 $ 59 $ 63 Funds held for others 12,445,857 2,041,560 1,885,351 12,602,066 Total Liabilities $ 12,445,916 $ 2,041,623 $ 1,885,410 $ 12,602,129 CFD#5 Rincon Village Assets: Pooled cash and investments $ 1,279,676 $ 2,281,986 $ 1,841,987 $ 1,719,675 Receivables: Accrued Interest 2,552 683 2,552 683 Special assessments 16,536 31,279 16,536 31,279 Restricted assets: Cash and investments with fiscal agents 1,502,976 1,294,569 1,294,569 1,502,976 Total Assets $ 2,801,740 $ 3,608,517 $ 3,155,644 $ 3,254,613 Liabilities: Accounts payable $ 176 $ 188 $ 176 $ 188 Funds held for others 2,801,564 3,611,658 3,158,797 3,254,425 Total Liabilities $ 2,801,740 $ 3,611,846 $ 3,158,973 $ 3,254,613 CFD#6 Carbon Canyon Assets: Pooled cash and investments $ 1,196,003 $ 273,222 $ 232,777 $ 1,236,448 Receivables: Accrued interest 2,041 433 2,041 433 Special assessments 3,900 3,916 3,900 3,916 Restricted assets: Cash and investments with fiscal agents 203,786 181,636 181,636 203,786 Total Assets $ 1,405,730 $ 459,207 $ 420,354 $ 1,444,583 Liabilities: Accounts payable $ 29 $ 31 $ 29 $ 31 Funds held for others 1,405,701 459,176 420,325 1,444,552 Total Liabilities $ 1,405,730 $ 459,207 $ 420,354 $ 1,444,583 109 CITY OF CHINO HILLS COMBINING STATEMENT OF CHANGES IN ASSETS AND LIABILITIES ALL AGENCY FUNDS YEAR ENDED JUNE 30,2012 , Balance Balance 7/1/2011 Additions Deductions 6130/2012 CFD#8 Butterfield Assets: Pooled cash and investments $ 2,272,054 $ 689,410 $ 545,129 $ 2,416,335 Receivables: Accrued interest 3,929 860 3,929 860 Special assessments 7,118 13,155 7,118 13,155 Restricted assets: Cash and investments with fiscal agents 354,500 381,861 401,025 335,336 Total Assets $ 2,637,601 $ 1,085,286 $ 957,201 $ 2,765,686 _ Liabilities: Accounts payable $ 59 $ 63 $ 59 $ 63 Funds held for others 2,637,542 1,085,224 957,143 2,765,623 Total Liabilities $ 2,637,601 $ 1,085,287 $ 957,202 $ 2,765,686 CFD#9 Rincon Village Assets: Pooled cash and investments $ 4,289,799 $ 793,904 $ 4,416,402 $ 667,301 Receivables: Accrued interest 7,114 215 7,114 215 Special assessments 11,069 8,931 11,069 8,931 Restricted assets: Cash and investments with fiscal agents 499,387 658,545 666,432 491,500 Total Assets $ 4,807,369 $ 1,461,595 $ 5,101,017 $ 1,167,947 Liabilities: Accounts payable $ 59 $ 63 $ 59 $ 63 Funds held for others 4,807,310 1,461,532 5,100,958 1,167,884 Total Liabilities $ 4,807,369 $ 1,461,595 $ 5,101,017 $ 1,167,947 CFD#10 Fairfield Ranch Assets: Pooled cash and investments $ 698,162 $ 926,423 $ 876,612 $ 747,973 Receivables: i Accrued interest 1,059 237 1,059 237 j Special assessments 13,474 12,910 13,474 12,910 Restricted assets: Cash and investments with fiscal agents 981,750 829,000 829,000 981,750 Total Assets $ 1,694,445 $ 1,768,570 $ 1,720,145 $ 1,742,870 Liabilities: Accounts payable $ 29 $ 31 $ 29 $ 31 Funds held for others 1,694,416 1,768,538 1,720,115 1,742,839 Total Liabilities $ 1,694,445 $ 1,768,569 $ 1,720,144 $ 1,742,870 110 CITY OF CHINO HILLS COMBINING STATEMENT OF CHANGES IN ASSETS AND LIABILITIES ALL AGENCY FUNDS YEAR ENDED JUNE 30,2012 Balance Balance 7/1/2011 Additions Deductions 6/30/2012 General Agency Fund Assets: Pooled cash and investments $ 3,136,285 $ 836,204 $ 1,196,132 $ 2,776,357 Total Assets $ 3,136,285 $ 836,204 $ 1,196,132 $ 2,776,357 Liabilities: Accounts payable $ 1,044 $ 157,603 $ 1,044 $ 157,603 Deposits payable 2,273,833 399,283 779,988 1,893,128 Due to Inland Empire Utility Agency 861,408 303,894 439,676 725,626 Total Liabilities $ 3,136,285 $ 860,780 $ 1,220,708 $ 2,776,357 RAD 10-1 Assets: Pooled cash and investments $ 421,140 $ 542,400 $ 473,726 $ 489,814 Receivables: Accrued interest 661 159 661 159 Special assessments 6,234 3,926 6,234 3,926 Restricted assets: Cash and investments with fiscal agents 360,423 395,702 405,625 350,500 Total Assets $ 788,458 $ 942,187 $ 886,246 $ 844,399 Liabilities: Accounts payable $ 117 $ 126 $ 117 $ 126 Funds held for others 788,341 942,061 886,129 844,273 Total Liabilities $ 788,458 $ 942,187 $ 886,246 $ 844,399 Totals-All Agencv Funds Assets: Pooled cash and investments $ 34,240,817 $12,083,451 $14,648,429 $ 31,675,839 Receivables: Accrued interest 52,817 10,112 52,817 10,112 _ Special assessments 119,097 122,971 119,097 122,971 Restricted assets: Cash and investments with fiscal agents 6,721,819 7,919,133 7,956,107 6,684,845 Total Assets $ 41,134,550 $20,135,667 $22,776,450 $ 38,493,767 Liabilities: Accounts payable $ 1,835 $ 158,450 $ 1,835 $ 158,450 Deposits payable 2,273,833 399,283 779,988 1,893,128 Funds held for others 37,997,474 19,301,945 21,582,856 35,716,563 Due to Inland Empire Utility Agency 861,408 303,894 439,676 725,626 Total Liabilities $ 41,134,550 $20,163,572 $22,804,355 $ 38,493,767 111 i lc } ,-3 " --. 1;t,-A , - „1,x. t � .Y4f4 . ,. .xair44., .:; w , te,; i't ii► < x4x b . .' - Ybfl A .. �+ " y " ri" a�. n w ma:`:45':! t t7- � xrwhiy44i ijiit r0 ; 7tisY iq'ti f`ccf.. CITY OF CHINO HILLS INCORPORATED 1 9 9 1 - THIS PAGE INTENTIONALLY LEFT BLANK 112 of Chirio Hills California STATISTIC_- SECTIO Statistical Section This part of the City of Chino Hills'comprehensive annual financial report presents detailed information as a context for understanding what the information in the financial statements, note disclosures, and required supplementary information says about the City's overall financial health. Contents Page Financial Trends -These schedules contain trend information to help the reader understand how the City's financial performance and well-being have changed over time. I Net Assets by Component 115 2 Changes in Net Assets 116 3 Fund Balances of Governmental Funds 119 4 Changes in Fund Balances of Governmental Funds 120 Revenue Capacity-These schedules contain information to help the reader assess the factors affecting the City's ability to generate its water revenue,property, and sales taxes. 5 Water Revenue-Charges for Services 123 6 Assessed Value and Estimated Actual Value of Taxable Property 124 7 Direct and Overlapping Property Tax Rates 125 8 Principal Property Tax Payers 126 9 Property Tax Levies and Collections 127 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. 10 Ratios of Outstanding Debt by Type 129 11 Direct and Overlapping Governmental Activities Debt 130 12 Legal Debt Margin information 131 13 Pledged-Revenue Coverage 132 Demouranhic 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 and to help make comparisons over time and with other governments. 14 Demographic and Economic Statistics 134 15 Principal Employers 135 Oneratina information -These schedules contain information about the City's operations and resources to help the reader understand how the City's financial information relates to the services the City provides and the activities it performs. 16 Full-Time-Equivalent City Government Employees by Function/Program 137 17 Operating indicators by Function/Program 138 18 Capital Assets Statistics by Function/Program 139 Sources: Unless otherwise noted, the information in these schedules is derived from the comprehensive annual financial reports for the relevant year. The City implemented Statement 34 in 2003;schedules presenting government-wide information include information beginning in that year. 113 • C Q) 'L. P C IL 114 Schedule 1 City of Chino Hills Net Assets By Component Last Ten Fiscal Years (accrual basis of accounting) Fiscal Year 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 Government activities Invested in capital assets,net of related debt $158,522,217 $170,214,503 $177,027,176 $196,572,923 $244,840,301 $276,239,662 $281,960,122 $289,350,904 $260,831,157 $261,743,969 Restricted 24,454,187 24,793,566 25,313,102 26,951,415 71,509,169 32,100,028 25,515,988 29,238,969 28,772,733 29,588,207 Unrestricted 22,455.591 28,761,061 29,505,254 27,534,630 24,688,669 45,419.424 25,998,601 22,734,986 27,033,352 20.099,061 Total governmental activities net assets $205,431,995 5 221,769,130 $231,845,532 $251,058,966 $341,038,139 $353,759,114 $333,474,711 $321,324,859 $316,637,242 $311,431,237 Business-type activities Invested In capital assets,net of related debt $ 80,051,419 S 87,951,967 $ 90,729,037 $101,715,882 $104,474,205 $111,270,111 $115,321,588 $112,236,094 $112,137,003 $110,459,489 Restricted 5,539,052 1,180,447 914,901 901,348 902,855 895,629 891,908 891,788 891,788 891,788 Unrestricted 54,809,237 55,154,461 59.667,148 54,864,729 61,284,270 78,800,187 75,891.932 77,050,459 61,421,913 65,305,916 Total business-type activities net assets $140,399,708 S 144,286,875 $151,311,086 $157,481,959 $166,661,330 $188,765,927 $192,195,428 $190,178,341 $174,450,704 $176,657,193 Primary government Invested in capital assets,net of related debt $238,573,838 $258,188,470 $267,756,213 $298,288,805 $349,314,506 $387,509,773 $397,281,710 $381,586,998 $372,988,160 $372,203,458 Restricted 29,993,239 25,974,013 26,228,003 27,852,763 72,412,024 32,995,657 26,407,896 30,130,757 29,664,521 30,479,995 J Unrestricted 77,264,828 81,915,522 89,172,402 82,399,359 85,972,939 122,019,611 101,890,533 99,785,445 88,455,285 85,404.977 01 Total primary government activities net assets $345,831,703 $366,056,005 $383,156,618 $408,540,927 $507,699,469 $542,525,041 $525,580,139 5511,503,200 $491,087,946 $488,068,430 Source: City Finance Department. Schedule 2 City of Chino Hills Changes in Net Assets Last Ten Fiscal Years (accrual basis of accounting) Fiscal Year 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 Expenses Governmental Activities: General government $ 4,791,760 $ 5,791,059 $ 4,706,563 $ 5,271,426 $ 6,030,186 $ 7,361,372 $ 10,579,750 $ 9,614,408 $ 8,966,318 $10,796,216 Public safety 4,685,540 5,267,519 6,316,390 7,709,721 9,066,406 10,182,888 11,555,310 11,676,798 11,455,829 11,776,645 Public works 24,190,015 24,644,445 16,338,394 23,693,162 31,061,116 29,007,194 34,757,045 28,555,064 40,156,027 30,528,964 Community development 13,540,354 2,676,842 3,557,317 3,077,001 4,233,528 2,818,026 10,683,874 4,211,927 5,057,949 2,097,640 Culture and leisure 2,517,511 3,018,462 2,961,591 3,191,791 3,714,175 4,347,447 4,812,362 4,796,904 4,651,993 4,702,555 Interest on long-term debt 606,644 360,809 495,042 994,463 1,567,850 2,264,125 1,928,581 1,329,331 1,272,852 1,090,459 Total Governmental Activities expenses 50,331,824 41,779,136 34,375,297 43,937,564 55,673,261 55,981,052 74,316,922 60.184,432 71,560,968 60,992,479 Business-Type Activities: Water utility 13,968,695 14,540,120 15,078,649 14,369,015 16,050,154 17,942,005 20,469,370 23,239,765 20,834,162 21,540,857 Sewer utility 3,984,971 4,013,704 4.288.240 4,285,136 4,564,235 4,968,864 5,797,290 5,867,079 6,209,860 6,398,875 Total Business-Type Activities Expenses 17,973,666 18,553,824 19,366,889 18,654,151 20,614,389 22,910.869 26,266,660 29,106,844 27.044,042 27,939,732 Total Primary Government Expenses $68,305,490 $60,332,960 $53,742,186 $62,591,715 $ 76,287.650 $78,891.921 $100,583,582 5 89,291,276 5 98.605,010 $88,932,211 a, Program Revenues Governmental Activities: Charges for services: General government $ 5,002,488 $ 5,111,368 $ 5,248,069 $ 5,096,254 $ 5,613,725 $ 5,776,175 $ 5,881,060 $ 5,962,565 $ 4,487,857 5 4,657,938 Public safety 587,025 603,561 605,589 1,180,499 947,446 672,677 631,906 637,055 600,952 562,197 Public works 3,069,353 3,396,199 3,882,515 4,746,512 4,716,496 4,892,044 4,836,932 4,876,544 6,824,803 6,932,375 Community development 1,762,324 1,498,104 1,354,772 2,070,238 1,946,325 2,058,372 1,071,103 704,708 778,031 619,127 Culture and leisure 1,011,135 1,035,082 990,265 975,332 1,071,833 1,125,427 1,204,544 1,079,171 1,191,777 1,163,550 Operating Contributions and Grants 2,417,924 2,121,376 2,715,236 5,599,718 1,656,856 5,607,412 6,508,561 6,599,618 4,706,518 6,283,871 Capital Contributions and Grants 18,210,072 11,418,393 11.145,328 23.623,731 83,790,316 26,719,831 9,217,276 10,147,915 9,252,562 12,766,924 Total Governmental Activities Program Revenues 32,060,321 25,184,083 25,941,774 43,292,284 99,744,999 46,651,938 29,351,382 30,007,576 27,B42,500 32,985,982 Business-Type Activities: Charges for services: Water utility 13,060,808 14,672,595 14,314,657 16,341,865 17,568,215 18,170,451 18,865,858 18,155,780 18,068,634 20,922,012 Sewer utility 4,114,787 4,250,684 4,278,320 4,404,840 4,688,511 4,838,131 5,311,713 5,483,049 5,490,532 5,553,029 Capital Contributions and Grants - - - 2,803,533 5,122,942 11,031,613 5.609,994 267,792 - 323,769 Total Business-Type Activities Program Revenues 17,175,595 16,923,279 16,592,977 23,550,238 27,379,668 34,040,195 29,787,565 23,906,621 23,559,166 26,798,530 Total Primary Government Program Revenues $49,235,916 $44,107,362 $44,534,751 $66,842,522 $127,124,667 $80,892,133 $ 59,138,947 $53,914,197 $51,401,666 $59,784,812 Fiscal Year 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 Net(Expense)/Revenue Governmental Activities $(18,271,503) (16,595,053) (8,433,523) (645,280) $ 44,071,738 $(9,129,114) $(44,965,540) $(30,176,856) $(43,718,468) $(28,006,497) Business-Type Activities (798,071) 369,455 (773.912) 4,896,087 6,765,279 11.129,326 3,520,905 (5,200,223) (3,484,876) (1,140,902) Total primary Government Net Expense _.$11/019:65a1 J16,225,598) (9,207,435k 4,250,807 $ 50,837,017 $ 2,000212 $(41,444,635) $(35,377,079). $(47,203,344) $(29,147,399) General Revenues and Other Charges In Net Assets Governmental Activities: Taxes: Property taxes,levied for general purpose $ 2,139,115 $ 2,391,352 $ 6,704,552 $ 7,696,773 $ 9,059,550 $ 9,854,421 $ 10,314,989 $10,026,487 $10,192,744 $10,236,250 Sales taxes 3,300,701 3,690,159 4,574,678 4,991,352 5,396,890 5,458,545 5,984,767 5,907,670 6,422,617 6.670,479 Franchise taxes 1,494,117 1,683,595 1,753,414 2,047,801 2,174,127 2,133,061 2,447,581 2,410,856 2,039,246 2,127,570 Business licenses taxes 117,410 132,450 137,873 144,613 151,017 162,807 152,442 143,578 145,728 141,716 Other taxes 396,549 497,029 565,394 501.058 798,867 716,103 568,019 776,629 779,935 824,544 Intergovernmental,unrestricted: Motor Vehicle In Lieu-unrestricted 4,056,601 3,335,980 1,692,165 536,507 421,191 348,740 268,308 231,590 361,339 39,069 Use of money and property 1,695,715 1,088,166 2,305,598 3,528.476 6,722,699 6,929,444 2,753,401 1,598,863 1,454,225 1,324,713 Gain(loss)on sale of capital assets - - • - 15,421 (4,172,567) - - 5,645 381,015 Other revenues and transfers 1,135,604 _ 225,130 679,008 412,136 411,950 419.535 2,191,630 936.547 1,064112 - TotalGovernmentalActivitles 14,335,812 13,243,861 18,412,682 19,858,716 25,151,712 21,850,089 24,681,137 22,032,220 22,466,191 21,745.356 Business-Type Activities: Use of money and property 920,415 406,944 842,926 1,653,347 2,598,146 2,636,760 1,510,927 929,857 372,899 311,535 J Gain on investment in joint venture - - 529,868 - - - - - - - J Gain on sale of assets 475,065 - - 11,747 7,010 - - - - - Lossininvestmentinjointventure (261,929) - - (390,308) - - - - - Other revenues and transfers 6,690,095 5,850,206 1,789,448 - 47 - (1,692,331) 2,343,279 3,949,000 4,026.926 Contributions - - 4,160,594 - - - - - -Total Business-Type Activities 7,823,646 _6257,150 7,322,836 1,274,786 2,605,203 2.636,760 (181,404) 3,273,136 4,321,899 4,338,461 Total Primary Government 22,159458 19,501,011 25,735.518 21,133,502 27,756,915 24,486,849 24,499,733 25,305,356 26.788,090 26.083,817 Changes In Net Assets Governmental Activities (3,935,691) (3,351,192) 9,979,159 19,213,436 69,223,450 12,720,975 (20,284,403) (8,144,636) (21,252,277) (6,261,141) Business-Type Activities 7,025,575 _6,626,605 6,548,924 6,170,873 9,370,482 13,766,086 3.339.501 (1,927,087) 837,023 3,197,559 Total Primary Government $ 3,089,864 $ 3,275,413 $16,528,083 $25,384,309 $ 78,593,932 $26,487,061 $(16,944,902) $(10,071,723) $(20,415,254) $ (3,063,582) Source: City Finance Department. ?* ;&, ' : � � ��� f y%t --,--'11,.. �/�\ _ « e ! l27 \ " y — \ , /, 2f � \\ � � \ / =, A^ \ "_ • « 4 ©^�m«�� %�< ~ «X , . x . ��/ \ � . 22x � f ,,?:-..: s \ •` �. ,i \ : \ - y « � ` « 3,-"3„, � �a � � xa � �/ 2� , /y ."14•10440S-911.44-4 t.eliv:\ ' • . CITY OF CHINO HILLS INCORPORATED 1991 ..RPoR & IED1991 11 THIS PAGE INTENTIONALLY LEFT BLANK 118 Schedule 3 City of Chino Hills Fund Balances of Governmental Funds Last Ten Fiscal Years (modified accrual basis of accounting) Fiscal Year 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 General Fund Reserved $ 1,346,436 $ 981,699 $ 656,814 $ 571,579 $ 825,811 $ 764,706 $ 6,349,837 $17,831,272 $ - $ - Unreserved 13,026,938 13,257,304 17,142,984 14,600,992 40,400,164 40,886,532 14,803,786 2,345,226 - - Nonspendable - - - - - - - - 28,262 Restricted - - - - - - - 4,998,291 4,996,060 Committed - - - - - - - 16,050,340 14,424,090 Assigned - - - - - - 843,616 1,644,313 Total General Fund $14,373,374 $14,239,003 $17.799,798 $15,172,571 $41,225,975 $41,651,238 $21,153,623 $20,176,498 $21,892,247 $21,092,725 All other governmental funds . Reserved $ 8,137,347 $ 7,392,443 $11,298,311 $18,954,928 $70,162,019 $30,945,202 $ 9,248,464 $15,727,160 $ - $ - i Unreserved,reported in: c>, Special Revenue Funds 21,033,489 25,952,716 22,171,639 23,735,877 16,470,009 15,685,432 16,629,699 13,297,242 - - Capital Project Fund 2,746,725 249,984 (229,614) (6,848,976) (15,861,558) (15,420,655) (1,245,728) (926,552) - - Nonspendable - - - - - - - 10,219,315 9,646,249 Restricted - - - - - - - 23,774,442 24,592,147 Committed - - - - - - - - - Assigned - - - - - - - - - Unassigned - - - - - - - (3,811,871) (9,227,775) Total all other governmental funds $31,917,561 $33,595,143 $33,240,336 $35.841,829 $70,770,470 $31,209,979 $24,632.435 $28,097,850 $30,181.886 $25,010,621 Source: City Finance Department. Schedule 4 City of Chino Hills Changes in Fund Balances of Governmental Funds Last Ten Fiscal Years (modified accrual basis of accounting) Fiscal Year 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 Revenues: Taxes $11,263,343 $11,657,269 $14,723,571 $15,028,374 $16,974,524 $ 17,908,191 $ 18,751,902 $18,888,204 $ 19,487,208 $ 19,964,017 Special Assessments 5,332,321 5,356,117 5,876,774 5,371,287 5,468,821 5,460,976 5,542,087 5,633,526 5,583,774 5,607,189 Licenses and permits 2,035,885 1,733,174 1,370,704 2,440,976 2,136,301 2,058,372 1,071,103 704,708 775,396 616,552 Intergovernmental 3,672,868 3,180,817 3,106,971 6,043,995 5,799,254 5,708,213 5,180,627 9,200,512 5,139,364 6,278,950 Charges for services 9,369,932 9,863,549 10,351,236 10,678,498 11,411,177 11,680,879 12,074,131 12,089,281 8,045,333 8,025,562 Development fees 9,958,702 3,763,91C 2,710,135 4,115,661 5,085,905 3,625,482 1,128,996 490,784 399,643 370,241 Contribution from property owners 996,276 1,189,508 2,010,270 14,175,866 67,104,258 10,119,918 2,484,988 1,090,164 5,323,963 5,526,955 Fines and forfeiture 301,987 354,012 575,160 585,743 567,143 660,764 620,764 626,154 590,108 553,343 Contributions - - - - - - 176,417 198,192 Use of money and property 1,592,313 1,057,207 2,242,131 3,415,811 6,527,986 6,725,920 2,629,808 1,533,085 1,967,098 5,597,565 Miscellaneous 1,150,261 601,302 786,143 1,003,344 1,955,234 1,738,161 1,350,624 2,033,235 1,849,580 999,636 N Total revenues 45,673,888 38,756,885 43,753,095 62,859,555 123,030,603 65,686,876 50,835,030 52,289,653 49,337.884 53,738.202 O Expenditures: Current: General government 4,168,525 5,184,585 4,102,552 4,614,084 5,485,568 6,818,907 7,915,221 7,923,217 7,312,478 8,040,290 Public safety 4,674,473 5,263,470 6,303,899 7,702,276 9,058,797 10,172,046 11,413,644 11,402,849 11,181,880 11,507,388 Public works 21,235,554 17,198,835 14,192,320 16,831,468 16,553,751 20,083,124 18,396,664 17,941,401 21,170,100 11,837,707 Community development 2,359,836 2,672,650 3,587,253 3,539,481 4,308,912 5,999,367 16,772,629 4,356,509 10,966,003 11,307,897 Culture and leisure 1,952,138 2,159,952 2,196,976 2,397,380 2,918,972 3,235,419 3,381,221 3,317,984 3,151,003 3,390,905 Capital outlay 11,379,811 6,710,597 8,524,106 25,179,789 42,155,326 56,654,818 31,655,842 4,949,091 3,164,855 4,084,866 Debt service: Principal retirement 2,753,395 1,459,123 1,755,461 1,876,929 2,292,970 679,693 679,272 482,925 5,035,722 9,610,034 Interest and fiscal charges 606,644 380,809 495,042 994,463 1,494,572 2,257,988 1,635,520 1,314,620 1,260,856 1,118,605 Debt issuance cost - - - - 231,058 - - - - Total expenses 49,130,376 41,030,021 41,157,609 63,135,870 84,499,926 105,901,362 91,850,013 51,688,596 63,242,897 60,897,692 Excess(deficiency)of revenues over(under)expenditures (3,456,488) (2,273,136) 2,595,486 (276,315) 38,530,677 (40,214,486) (41,014,983) 601,057 (13,905,013) (7,159,490) Other financing sources(uses): Transfers in 12,532,497 6,782,853 5,012,996 13,916,584 16,005,428 11,059,192 22,815,140 7,474,593 10,792,870 10,179,224 Transfers out (12,532,497) (5,967,753) (5,012,996) (13,916,584) (16,010,989) (11,059,192) (21,036,742) (5,895,823) (9,719,760) (9,107,954) Long term debt issued - - - - 22,411,164 1,079,258 12,161,426 308,463 61,383 117,433 Other debt issued 268,113 3,001,247 513,259 250,581 - - - - - - Bond premium - - - - 45,765 - - - - - 2p++ 2.U� piscalYeaZ� _' + 2p0� 4 ___:--1,55:12--:33_ t 8_ 4875 5910?g7 2006 ' 1393932 1276 H_____:---4°92---- 2„.-1---------36 1� j..03-2-13-1-16,_ � 2 gg8.2�g0 �' �' 451368 14 27 075159 r.�" 18.8°/° 2� ___-:---15>-:h551_ 250 581 ;$2,12.15a. 39135.228 300 5°I° g80 gg2,D45 3.3°1° of caD�eyf asset + $ 25;134 from safe 2� $ 3 108 745 6.3°I° roceeds Iola otter Bnandn9 sources 15esl $ 31g�375 5 +543.2++ 9°/° 7 Mo B.3°I° Net change.1(‘bind bola 5q°I„ 6. net ossa B.9°/° Debt service as Pad ice percentage of nonoaP�la Department, City Octanes a N a it22 Schedule 5 City of Chino Hills Water Revenue-Charges for Services Last Ten Fiscal Years Residential Commercial Government Fiscal Service Service Service Other Year Charge Charge Charge Charges Total 2003 10,139,498 1,134,916 1,657,459 128,935 13,060,808 2004 10,884,969 1,258,241 2,276,134 253,251 14,672,595 2005 10,574,657 1,156,851 2,047,851 535,298 14,314,657 2006 11,175,366 2,522,285 1,016,575 1,250,103 15,964,329 2007 11,908,728 3,194,550 1,163,001 220,258 16,486,537 ro 2008 11,757,737 3,236,899 1,171,397 1,619,744 17,785,777 cu 2009 11,989,919 3,434,330 1,165,995 314,977 16,905,221 2010 12,721,619 3,312,889 1,380,924 240,358 17,655,790 2011 13,380,074 3,120,412 1,342,925 225,224 18,068,634 2012 15,008,633 3,759,938 1,921,614 231,829 20,922,012 Source: City Finance Department. Note: From FY 2006- FY 2010 Water Revenue-Charges for Services totals include revenue figures from the Water Facilities Fee Fund. Beginning in FY 2011 the Water Facilities Fee Fund activity was excluded and reported separately as a non-major governmental fund. Schedule 6 City of Chino Hills Assessed Value and Estimated Actual Value of Taxable Property, Last Ten Fiscal Years (in thousands of dollars) Total Total Taxable Direct Fiscal Residential Commercial Other Assessed Tax Year Property Property Property Exemption Value Rate 2003 n/a n/a n/a 84,759 5,148,753 1.00 2004 5,221,647 192,198 162,834 89,910 5,666,589 1.00 2005 5,751,757 207,832 174,517 91,308 6,225,414 1.00 2006 6,310,533 230,589 228,009 91,672 6,860,803 1.00 2007 7,083,545 340267 140,436 92,336 7,656,584 1.00 N 2008 7,810,970 444,779 212,883 91,761 8,560,393 1.00 A 2009 8,110,237 589,787 239,628 92,559 9,032,211 1.00 2010 7,674,088 729,587 366,581 93,399 8,863,656 1.00 2011 7,700,232 734,768 334,286 94,057 8,863,343 1.00 2012 7,807,774 697,721 326,272 93,738 8,925,505 1.00 Source: HDL Coren& Cone and San Bernardino County Auditor/Controller-Property Tax Division. Schedule 7 City of Chino Hills Direct and Overlapping Property Tax Rates, Last Ten Fiscal Years (rate per$100 of assessed value) City Direct Rates Overlapping Rates General Metropolitan San Fiscal Tax School Water Bernardino Year Levy District District County 2003 1.0000 0.0490 0.0067 - 2004 1.0000 0.0527 0.0061 - 2005 1.0000 0.0452 0.0058 - 2006 1.0000 0.0634 0.0052 - w 2007 1.0000 0.0517 0.0047 - (71 2008 1.0000 0.0497 0.0045 - 2009 1.0000 0.0523 0.0043 - 2010 1.0000 0.0454 0.0043 - 2011 1.0000 0.0486 0.0037 - 2012 1.0000 0.0499 0.0037 - Source: County of San Bernardino Auditor/Controller-Recorder. Schedule 8 City of Chino Hills Principal Property Tax Payers, Current Year and Nine Years Ago 2011/12 2002/03 Percentage Percentage of Total City of Total City Taxable Taxable Taxable Taxable Assessed Assessed Assessed Assessed Taxpayer Value RankValue Value Rank Value Chino Hills Mall LLC $ 117,475,352 1 1.32% $ - - BRE Properties Inc. 79,156,010 2 0.69% - - CRCH LLC 78,878,464 3 0.88% - - Missions At Chino Hills 57,516,245 4 0.64% - - Woodview Chino Hills Apartments Limited 54,539,471 5 0.61% - - YAH Investments LLC 47,774,896 6 0.54% - - N Chino Hills Corporate Park 33,854,123 7 0.38% - - a> WRI Chino Hills LLC 33,462,131 8 0.37% - - Village Oaks Inc. 32,335,522 9 0.36% - - Gordon Ranch Marketplace LLC 25,188,250 10 0.28% - - CTF-8 Village Oaks - - 30,600,000 1 0.59% Chino Hills I LLC 22,377,000 2 0.43% Centex Homes - - 21,531,174 3 0.42% ERP Operating Limited Partnership - - 19,101,689 4 0.37% Sears Roebuck and Company - - 17,200,203 5 0.33% LSK Limited Partnership - - 15,110,336 6 0.29% LDC Cougar - - 14,371,933 7 0.28% LNR Crossroads Marketplace LLC 13,907,872 8 0.27% Evans Withycombe Residential Limited Partnership - - 13,449,977 9 0.26% Chino Hills Mortgage LLC - - 13,005,269 10 0.25% Total $ 560,180,464 6.27% $180,655,453 3.49% Source: HDL Coren&Cone Schedule 9 City of Chino Hills Property Tax Levies and Collections, Last Ten Fiscal Years Fiscal Collected within the Year Taxes Levied Fiscal Year of the Levy Collections Total Collections to Date Ended for the Percentage in Subsequent Percentage June 30, Fiscal Year Amount of Levy Years Amount of Levy 2003 2,033,010 1,963,816 96.6% 79,485 2,043,301 100.5% 2004 2,250,501 2,217,021 98.5% 85,370 2,302,391 102.3% 2005 2,462,079 2,312,787 93.9% 82,560 2,395,347 97.3% 2006 2,720,557 2,537,125 93.3% 89,871 2,626,996 96.6% 2007 3,030,270 2,687,944 88,7% 133,985 2,821,929 93.1% -• 2008 3,390,298 2,980,778 87.9% 223,347 3,204,125 94.5% N 2009 3,571,077 3,194,990 89.5% 206,641 3,401,631 95.3% `1 2010 3,482,579 3,142,101 90.2% 131,954 3,274,055 94.0% 2011 3,491,579 3,201,176 91.7% 116,818 3,317,994 95.0% 2012 3,517,145 3,233,202 91.9% - 3,233,202 91.9% Sources: City Finance Department and County of San Bernardino Auditor/Controller-Recorder. Note: The figures presented are specific to General Fund taxes only, These amounts do not include Community Facilities District Special Taxes or Assessment District assessments. ea C) swirl CI a) 128 Schedule 10 City of Chino Hills Ratios of Outstanding Debt by Type, Last Ten Fiscal Years (dollars in thousands, except per capita) Business-type Governmental Activities Activities Certificates Special Certificates Total Percentage Debt Fiscal of Assessment of Primary of Personal Per Year Participation Bonds Participation Government Income a Capita a 2003 $ - $ 52,923 $ 26,835 $ 79,758 0.09% $ 1,089 2004 - 49,937 26,740 76,677 0.08% 1,001 iv 2005 - 47,000 25,660 72,660 0.07% 935 CD 2006 - 42,037 24,560 66,597 0.06% 857 2007 22,040 87,678 23,435 133,153 0.11% 1,700 2008 22,040 83,339 22,290 127,669 0.10% 1,627 2009 21,955 76,540 21,115 119,610 0.10% 1,519 2010 21,865 71,806 19,915 113,586 0.09% 1,438 2011 21,445 64,205 18,675 104,325 n/a 1,385 2012 18,920 58,670 17,395 94,985 n/a 1,256 Source: City Finance Department. Notes: Details regarding the city's outstanding debt can be found in the notes to the financial statements. a See Demographic and Economic Statistics schedule (schedule 14)for personal income and population data. Schedule 11 City of Chino Hills Direct and Overlapping Governmental Activities Debt As of June 30,2012 Fiscal Year 2011-12 Assessed Valuation:$8,925,505,221 Debt % City's Share of Overlapping Tax and Assessment Debt Outstanding Applicable(1) Debt 6130112 Metropolitan Water District $ 196,545,000 0.495% $ 972,898 Chaffey Community College District 145,842,855 16.370% 23,874,475 Chino Valley Unified School District 139,374,999 52.364% 72,982,324 City of Chino Hills 1915 Act Bonds 3,240,000 100.000% 3,240,000 City of Chino Hills-Community Facilities District No.1 4,195,000 100.000% 4,195,000 City of Chino Hills-Community Facilities District No.2 13,575,000 100.000% 13,575,000 City of Chino Hills-Community Facilities District No.4 2,315,000 100.000% 2,315,000 City of Chino Hills-Community Facilities District No.5 16,110,000 100.000% 16,110,000 City of Chino Hills-Community Facilities District No.6 1,515,000 100.000% 1,515,000 City of Chino Hills-Community Facilities District No.8 1,240,000 100.000% 1,240,000 City of Chino Hills-Community Facilities District No.9 4,425,000 100.000% 4,425,000 City of Chino Hills-Community Facilities District No.10 12,055,000 100.000% 12,055,000 Total overlapping taxes and assessment debt 156,499,697 W O Overlaooina General Fund Obliaation Debt: San Bemardino County General Fund Obligations 613,235,000 7.842% 48,089,889 San Bernardino County Pension Obligations 547,885,591 7.842% 42,965,188 San Bernardino County Flood Control District 108,210,000 7.842% 8,485,828 Chaffey Community College District General Fund Obligations 12,275,666 16.370% 2,009,527 Chino Valley Unified School District Certificates of Participation 23,295,000 52.364% 12,198,194 West Valley Vector Control District Certificates of Participation 3,375,000 21.220% 716,175 Total overlapping general fund debt 114,464,801 Subtotal,overlapping debt 270,964,498 City of Chino Hills Direct Debt 48,682,662 Total Direct and Overlapping Debt $ 319,647,360 (2) Source:Califomia Municipal Statistics, Inc. Note: (1) Percentage of overlapping agency's assessed valuation located within boundaries of the city. (2) Excludes tax and revenue anticipation notes,enterprise revenue,mortgage revenue and tax allocation bonds and non-bonded capital lease obligations. Schedule 12 City of Chino Hills Legal Debt Margin Information, Last Ten Fiscal Years (dollars In thousands) Legal Debt Margin Calculation for Fiscal Year 2012 Assessed value $8,925,505 Debt limit(15%of assessed value) 1,338,826 Debt applicable to limit: General obligation bonds Less:Amount set aside for repayment of general obligation debt Total net debt applicable to limit - Legal debt margin $1,338,826 CO Fiscal Year 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 Debt Limit $772,313 $849,988 $933,812 $ 1,029,120 $1,148,488 $1,284,059 $1,354,832 $1,329,548 $1,329,501 $1,338,826 Total net debt applicable to limit - - - - - - - - - - Legal debt margin $772,313 $849988 $933,812 $ 1,029,120 $1,148,488 $1,284,059 $1,354,832 $1,329,548 $1,329,501 $1,338,826 Total net debt applicable to the limit as a percentage of debt limit 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% Source:California Municipal Statistics,Inc. Schedule 13 City of Chino Hills Pledged-Revenue Coverage, Last Ten Fiscal Years (dollars in thousands) Water Certificate of Participation Special Assessment Bonds Utility Less: Net Special Fiscal Service Operating Available Debt Service Assessment Debt Service(2) Year Charges Expenses(1) Revenue Principal Interest Coverage Collections Principal Interest Coverage 2003 $ 14,102 $ 9,182 $ 4,920 $ 790 $ 1,478 2.17 $ 11,999 $ 4,765 $ 3,712 1.42 2004 15,372 9,824 5,548 975 744 3.23 11,837 3,741 3,455 1.64 2005 17,314 10,546 6,768 1,080 1,042 3.19 10,914 2,937 2,750 1.92 -+ 2006 17,075 9,909 7,166 1,100 1,018 3.38 11,627 4,963 2,647 1.53 co 2007 20,379 13,087 7,292 1,125 996 3.44 13,826 4,019 3,327 1.88 Na 2008 21,262 14,445 6,817 1,145 974 3.22 11,591 4,339 4,051 1.38 2009 18,531 15,982 2,549 1,175 946 1.20 11,192 6,799 3,846 1.05 2010 20,931 16,207 4,724 1,200 916 2.23 11,801 4,734 3,579 1.42 2011 19,048 15,364 3,684 1,240 880 1.74 11,348 8,691 3,391 0.94 (3) 2012 22,878 16,588 6,290 1,280 839 2.97 11,570 5,535 2,421 1.45 Source: City Finance Department. Notes: (1) Operating expenses do not include interest, depreciation,or amortization expenses. (2) Details regarding the city's outstanding debt can be found in the notes to the financial statements. (3) In FY 2011 the refunding of bonds related to Assessment Districts for$19.7 million has been excluded from this presentation. Demographic hip and Economic formatio n I co Schedule 14 City of Chino Hills Demographic and Economic Statistics, Last Ten Calendar Years Personal Per Income (2) Capita Calendar (millions Personal Unemployment Year Population (1) of dollars) Income(2) Rate (3) 2003 73,211 89,476 24,737 3.4% 2004 76,584 96,756 25,780 3.1% 2005 77,699 103,716 26,789 2.7% 2006 77,719 111,762 28,063 2.5% 2007 78,307 117,134 28,804 2.8% 2008 78,465 125,025 30,547 3.9% w 2009 78,725 120,805 29,035 6.9% 2010 78,971 124,840 29,409 7.3% 2011 75,345 n/a n/a 7.2% 2012 75,655 n/a n/a 6.4% Sources: (1) Population-State of California/Department of Finance/Demographic Research Unit (2) Personal Income and Per Capita Personal Income are not available at the City's level. The information presented here is for the Riverside-San Bernardino-Ontario, CA(MSA)area, provided by U.S. Department of Commerce-Bureau of Ecomomic Analysis. (3) Unemployment Rate-California Labor Market. Schedule 15 City of Chino Hills Principal Employers, Current Year and Ten Years Ago 2012 2002` Percentage Percentage Number of Total City of Total City Employer of Employee? Rank Employmentb Employees Rank Employment Chino Valley Unified School District 1,350 1 3.63% n/a n/a n/a City of Chino Hills 271 2 0.73% n/a n/a n/a Costco 270 3 0.73% n/a n/a n/a Boys Republic 210 4 0.56% n/a n/a n/a Lowe's 206 5 0.55% n/a n/a n/a 99 Ranch Market 126 6 0.34% n/a n/a n/a co Chino Valley Independent Fire District 125 7 0.34% n/a n/a n/a N Harkins Theatreo 120 8 0.32% n/a n/a n/a BJ's Brewery 117 9 0.31% n/a n/a n/a Best Buy 91 10 0.24% n/a n/a n/a Total 2,886 7.76% n/a n/a Source: City Finance Department and California Labor Market. Note: a Includes full-time and part-time employees. Total city employment 37,200, provided by California Labor Market. `Data for FY 2002 was not collected and is not available to report. m 1 ul 6u fl a dO Schedule 16 City of Chino Hills Full-Time-Equivalent City Government Employees by Function/Program, Full-time Equivalent Employees as of June 30 2006 2007 2008 2009 2010 2011 2012 Function/Program General government Legislative 6 6 6 7 7 7 7 City Manager 10 10 11 11 11 11 10 Finance 14 13 16 19 21 21 19 Public Safety 7 8 9 9 9 8 7 Public Works 36 40 42 42 42 42 43 oo Community Development 20 20 21 23 19 17 16 Culture and Leisure 36 40 45 48 53 47 50 Water Utility 22 24 23 26 24 24 26 Sewer Utility 7 7 7 7 7 7 7 Total 158 168 180 192 193 184 185 Source: City Finance Department. Notes: A full-time employee is scheduled to work 2,080 hours per year(including vacation and sick leave). Full-time-equivalent employment is calculated by dividing total labor hours by 2,080. Full-Time-Equivalent City Government Employees by Function/Program was not calculated prior to 2006. Schedule 17 City of Chino Hills Operating Indicators by Function/Program, Last Ten Fiscal Years Fiscal Year 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 Function/Program General government Building permits issued 1,832 1,787 1,715 1,799 1,868 1,559 1,047 947 1,097 1,068 Building inspections conducted 11,114 12,135 13,373 10,540 10,001 8,713 6,252 5,081 4,516 3,363 Refuse collection Refuse collected (tons per day) n/a n/a n/a 243 248 186 171.90 169.57 170.66 179.28 Recyclables collected (tons per day) n/a n/a n/a 73 66 75 74.60 71.67 50.11 51.76 co Other public works Street resurfacing (lane miles) n/a n/a n/a 56.80 49.80 40.50 18.86 27.33 19.64 9.50 Potholes repaired n/a n/a n/a 120 50 105 66 50 65 60 Water New connections n/a n/a n/a 104 94 85 36 66 22 9 Water main breaks n/a n/a n/a 24 33 40 24 11 8 10 Average daily consumption (million gallons) 14.79 15.46 14.97 14.49 15.87 15.25 16.14 15.62 14.20 14.98 Peak daily consumption (million gallons) n/a n/a n/a 25.31 28.60 27.90 26.71 27.08 26.37 25.69 Sewage System Average daily sewage treatment (million gallons) 6.5 6.5 7.1 7.1 4.3 7.8 3.48 3.48 3.48 4.86 Sources:Various City departments. Schedule 18 City of Chino Hills Capital Asset Statistics by Function/Program, Last Ten Fiscal Years Fiscal Year 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 Function/Program Other public works Streets (miles) 172 172 175 175 177 170 170.37 170.37 170.37 170 Traffic signals n/a n/a n/a 42 44 48 49 54 55 55 Parks and recreation Parks 37 37 37 38 40 40 40 40 40 41 Acreage 218 218 218 248 255 255 255 255 255 255 w Playgrounds n/a n/a n/a 27 28 28 28 28 28 28 m Baseball/softball diamonds n/a n/a n/a 14 8 8 8 8 8 9 Soccer/football fields n/a n/a n/a 7 7 7 7 7 7 12 Community centers n/a n/a n/a 5 5 5 5 5 5 5 Water Water mains (miles) 240 245 250 250 250 250 250 302 302 317 Fire hydrants n/a n/a n/a 2,500 2,564 2,610 1,805 2,137 2,137 2,186 Storage capacity(million gallons) 38 38 38 38 38 38 38 38 38 39 Sewage System Sanitary sewers (miles) 215 200 202 202 202 202 220 188.63 188.63 202.00 Storm drains (miles) 75 80 82 82 103.5 103.5 103.5 103.5 103.5 83.0 Sources: Various city departments. Notes: No capital asset indicators are available for the general government. er kt .• ? WetIttitrim t ..- , :� f �t1�.,.r J y . dr s• 1 CITY OF CHINO HILLS INCORPORATED1 9 9 1 THIS PAGE INTENTIONALLY LEFT BLANK 140