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2016-2017 CAFRCITY OF CHINO HILLS c� 25 Yes OF EXCELLENCE Comprehensive Annual Financial Report Fiscal Year Ended lune 30, 2017 Chino Hills, California CITY OF CHINO HILLS, CALIFORNIA COMPREHENSIVE ANNUAL FINANCIAL REPORT FISCAL YEAR ENDED JUNE 30, 2017 Prepared by: Department of Finance i Chino Hills This page intentionally left blank. CITY OF CHINO HILLS COMPREHENSIVE ANNUAL FINANCIAL REPORT FOR THE FISCAL YEAR ENDED JUNE 30, 2017 TABLE OF CONTENTS INTRODUCTORY SECTION Letter of Transmittal ............. Page OrganizationalChart...............................................................................................................................v CityOfficials........................................................................................................................................... vi Certificate of Achievement for Excellence in Financial Reporting........................................................ vii FINANCIAL SECTION INDEPENDENT AUDITORS' REPORT..................................................................................................1 MANAGEMENT'S DISCUSSION AND ANALYSIS................................................................................5 Government—Wide Financial Statements Statementof Net Position...............................................................................................................17 Statementof Activities....................................................................................................................18 Fund Financial Statements Balance Sheet — Governmental Funds..........................................................................................20 Reconciliation of the Balance Sheet of Governmental Funds to the Statement of Net Position....................................................................................................23 Statement of Revenues, Expenditures and Changes in Fund Balances — Governmental Funds...................................................................................................24 Reconciliation of the Statement of Revenues, Expenditures and Changes in Fund Balances of Governmental Funds to the Statementof Activities....................................................................................................................26 Statement of Net Position — Proprietary Funds..............................................................................27 Statement of Revenues, Expenses and Changes in Fund Net Assets — Proprietary Funds............................................................................................................28 Statement of Cash Flows — Proprietary Funds..............................................................................29 Statement of Fiduciary Net Position — Fiduciary Funds.................................................................30 Notes to Financial Statements...........................................................................................................31 REQUIRED SUPPLEMENTARY INFORMATION Notes to Required Supplementary Information.................................................................................73 Budgetary Comparison Schedule — General Fund........................................................................74 Budgetary Comparison Schedule — Landscape & Lighting District................................................75 Budgetary Comparison Schedule — Existing Infrastructure Fees..................................................76 Budgetary Comparison Schedule — Solid Waste...........................................................................77 CITY OF CHINO HILLS COMPREHENSIVE ANNUAL FINANCIAL REPORT FOR THE FISCAL YEAR ENDED JUNE 30, 2017 TABLE OF CONTENTS Page Numher Pension Plan Schedule of Proportionate Share of Net Pension Liability.......................................................78 Schedule of Plan Contributions................................................................................................79 COMBINING AND INDIVIDUAL FUND STATEMENTS AND SCHEDULES Combining Balance Sheet— Nonmajor Governmental Funds.......................................................82 Combining Statement of Revenues, Expenditures and Changes in Fund Balances — Nonmajor Governmental Funds......................................................88 Budgetary Comparison Schedules Sleepy Hollow Road Improvement...........................................................................................84 GeneralFacilities Fees............................................................................................................95 TrafficFacilities Fees...............................................................................................................96 Storm Drain Facilities Fees......................................................................................................97 ParklandFees..........................................................................................................................98 TrafficSignal Fees...................................................................................................................99 GasTax..................................................................................................................................100 AirQuality...............................................................................................................................101 FederalGrants.......................................................................................................................102 MeasureI...............................................................................................................................103 StreetSweeping.....................................................................................................................104 FrontlinePolicing....................................................................................................................105 Miscellaneous Grants.............................................................................................................106 Affordable Housing Program..................................................................................................107 WaterFacilities Fee..............................................................................................................108 SewerFacilities Fee..............................................................................................................109 PublicSafety Programs..........................................................................................................110 CapitalImprovement..............................................................................................................111 CFD #9 Rincon Village...........................................................................................................112 CFD #10 Fairfield Ranch........................................................................................................113 Combining Statement of Net Position — Internal Service Funds ..................................................116 Combining Statement of Revenues, Expenses and Changes in Fund Net Position — Internal Service Funds.................................................................................117 Combining Statement of Cash Flows — Internal Service Funds...................................................118 Combining Statement of Assets and Liabilities — All Agency Funds ............................................120 Combining Statement of Changes in Assets and Liabilities — AIIAgency Funds..........................................................................................................................124 CITY OF CHINO HILLS COMPREHENSIVE ANNUAL FINANCIAL REPORT FOR THE FISCAL YEAR ENDED JUNE 30, 2017 TABLE OF CONTENTS Page STATISTICAL SECTION Last Ten Fiscal Years NetPosition by Component...................................................................................................132 Changesin Net Position.........................................................................................................134 Fund Balances of Governmental Funds................................................................................138 Changes in Fund Balances of Governmental Funds.............................................................140 Water Revenue — Charges for Services................................................................................144 Assessed Value and Estimated Actual Value of Taxable Property .......................................145 Direct and Overlapping Property Tax Rates..........................................................................146 Principal Property Tax Payers...............................................................................................147 Property Tax Levies and Collections.....................................................................................148 Ratios of Outstanding Debt by Type......................................................................................150 Ratios of General Bonded Debt Outstanding........................................................................151 Direct and Overlapping Governmental Activities Debt ...........................................................153 Legal Debt Margin Information...............................................................................................154 Pledged—Revenue Coverage.................................................................................................156 Demographic and Economic Statistics..................................................................................160 PrincipalEmployers...............................................................................................................161 Full—Time—Equivalent City Government Employees by Function/Program ...........................164 Operating Indicator by Function/Program..............................................................................166 Capital Asset Statistics by Function/Program........................................................................168 i Chino Hills This page intentionally left blank. CITY OF CHINO HILLS cdd�aLN 25 YEARS OF EXCELLENCE Introductory Section i (.rhino Hills This page intentionally left blank. C4 14000 City Center Drive • Chino Hills, CA 91709 • (909) 364-2600 November 23, 2017 The Honorable Mayor and City Council City of Chino Hills, California It is a pleasure to present the Comprehensive Annual Financial Report (CAFR) of the City of Chino Hills (City) for the fiscal year ended June 30, 2017. This report consists of management's representations concerning the finances of the City. 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 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's 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, Soll, & Lunghard, LLP, a firm of licensed certified public accountants, has issued an unmodified opinion of the City of Chino Hills' financial statements for the year ended June 30, 2017. 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. The Statistical section, which is unaudited, includes selected financial and demographic information generally presented on a multi-year basis. City of Chino Hills Profile Incorporated in December 1991 as a general law City, the City of Chino Hills is located in southwestern San Bernardino County and is well known for its beautiful rural atmosphere and high quality of life. The City has operated under the council-manager form of government since incorporation. Policy-making and legislative authority are vested in a governing council (Council) consisting of five members who are elected at large on a non-partisan basis to serve staggered four-year terms. The Council appoints a member to serve as the Mayor for a one-year term. The Council appoints the City Manager, who in turn appoints the heads of various departments. The City Council is responsible for, among other things, passing ordinances, adopting the budget, appointing committees, and appointing the City Manager, City Clerk and City Attorney. The City Manager is responsible for carrying out the policies and ordinances of the City Council, for overseeing the day-to-day operations of the City, and for appointing the heads of the various departments. Chino Hills is a family -friendly community with a diverse population that has surpassed 80,000 people. Residents appreciate the City's ranking as one of the safest cities in the United States. In 2016, Chino Hills was ranked 9th "Safest Place in California" by Value Penguin Data Research (60,000+ population) and 47th Safest City in California by SafeWise. Residents enjoy a nice balance of quality development and open space, excellent schools, a strong commitment to family values, opportunities to shop and dine, and access to an active lifestyle. The community is home to 42 parks, 47 miles of trails, and 3,000 acres of community -owned open space. Residents take advantage of the beautiful environment while walking, hiking, and biking throughout the City. The rural atmosphere has been preserved in the rolling hills and canyons throughout the community after years of careful planning. The City's equestrian heritage continues today and is concentrated in the English Road area. Chino Hills ranks high in the United States with an average household income of $122,551 according to 2016 data from the Environmental Systems Research Institute (ESRI). Income levels are often linked to educational levels and the 2016 data indicates that 45% of residents over age 25 have bachelor's degrees or higher, including 15.1 % with graduate degrees. The City of Chino Hills provides a full range of services including: police protection (via contract with the San Bernardino County Sheriff's 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 annual budget serves as a foundation for the City's financial planning and control. The City Council holds public hearings and adopts an annual budget for all funds. The budget appropriations are prepared by fund, function, and department. 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 1 of the Notes to Required Supplementary Information for additional information on budget procedures. Economic Condition and Outlook Chino Hills is one of the most desirable cities in the County of San Bernardino. The demand for residential construction will continue due to good schools, low crime, and the City's strong, positive reputation. In fiscal year 2016-17, 560 residential units were built as compared to 520 in fiscal year 2015- 16. For fiscal year 2017-18, the projection for new residential is 684 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. 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. The City's population continues to grow steadily, rising from 42,691 in 1991 to 80,676 in 2017. The projected population is 84,800 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. The City currently has numerous Development projects under construction including the following: (i) Vila Borba — a 183 single-family residential development that includes the recently completed 5 -acre community park that includes a one -acre dog park; (ii) Jade Tree — a 65 unit townhome development; (iii) Santa Barbara — a mixed-use development consisting of 324 luxury apartments and 15,000 square feet of retail/restaurants; (iv) Crossings at Chino Hills — a multi -family project consisting of 346 apartments; (v) Hillcrest Project — a hillside development with 76 luxury single-family homes; (vi) County Club Villas — a 70 unit condominium project; (vii) Founders Village — a 76 unit duplex project; and (viii) Lago Los Serranos — a 95 unit town home development. Short -Term Outlook The U.S. economy is expected to continue its expansion, growing at a slightly faster rate in 2017 than it has over the past two years — and short of some major change or upset in government policy, the outlook for 2018 is remarkably similar. California's housing shortage and sky high home prices and rents continue to be one of the greatest impediments to the state's future economic growth. Demand has steadily increased, including demand from the much anticipated arrival of millennials on the housing scene, while additional supply, the construction of new homes, has been weak since the recession. The new outlook finds that the state will continue to grow but won't reach its potential until it crafts long term, supply -oriented solutions to its housing affordability problem. The City is experiencing improvement during the economic recovery, although challenges still remain. The City needs to be attentive during the economic recovery stage to ensure that the City of Chino Hills is positioned to take advantage of opportunities in the next economic growth cycle. 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. The City will continue to monitor key economic indicators, sources of revenues, and spending levels as part of its sound conservative fiscal approach. Relevant Financial Policies Fund Balance Policy The City's Fund Balance Policy, which was approved in May 2011, established the procedures for reporting unrestricted fund balance in the General Fund financial statements. Certain commitments and assignments of the fund balance will help ensure that there will be adequate financial resources to protect the City against unforeseen circumstances and events such as revenue shortfalls and unanticipated expenditures. The policy also authorizes and directs the Finance Department in preparing financial reports that accurately categorize fund balance as per Governmental Accounting Standards Board (GASB) Statement No. 54, Fund Balance Reporting and Governmental Fund Type Definitions. Liability Insurance Rate Stabilization For fiscal year 2016-17, the City of Chino Hills has committed $1.1 million of the General Fund reserves for the Liability Insurance Rate Stabilization. The City's general liability insurance costs are expected to have significant swings due to changes in the cost allocation formula to members of the insurance pool. The City Council has set aside $1.1 million of General Fund reserves in anticipation of the volatility of the costs going forward. Long -Term Goals, Efforts, and Actions 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 the 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 Five Year CIP of $62,658,700 demonstrates its commitment to infrastructure improvements and consists of projects in the following categories: Streets $ 32,515,700 Public Facilities $ 1,405,000 Parks/Open Space $ 7,160,700 Water $ 11,407,500 Recycled Water $ 2,473,700 Sewer $ 4,127,800 Sewer/Storm Drain $ 3,568,300 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, 2016. 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. 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. Respectf Ily submitted, KonradYBartlam -- City Manager Iv Christa Buhagiar Finance Director THE CITY OF CHINO HILLS ORGANIZATION OF CITY GOVERNMENT OPERATING SUMMARY Community Development Department Community Engineering Finance Public Works Services Department Department Department Department City council Ray Marquez Mayor Art Bennett Council Member Peter Rogers Vice Mayor Ed Graham Council Member ,Administrative Personnel City .wlanager City .attorney City Clerk Finance Director Community Development Director Pu6Ctc -Works Director Community Services Director Cynthia Moran Council Member Konradt Bartlam Mark D. Hensley Cheryl Balz Christa Buhagiar Joann Lombardo Nadeem Majaj Jonathan Marshall Government Finance Officers Association Certificate of Achievement for Excellence in Financial Reporting Presente&to City of Chino Hills California For its Comprehensive Annual Financial Report for the Fiscal Year Ended June 30, 2016 PAWS.*,P e 0 0 A-#04 Executive Director/CEO i Chino Hills This page intentionally left blank. CITY OF CHINO HILLS cdd�aLN 25 YEARS OF EXCELLENCE Financial Section i (.rhino Hills This page intentionally left blank. LS Us CPi., ADVISOR INDEPENDENT AUDITORS' REPORT To the Honorable Mayor and Members of the City Council City of Chino Hills, California Report on the Financial Statements We have audited the accompanying financial statements of the governmental activities, the business -type activities, each major fund, and the aggregate remaining fund information of City of Chino Hills, California, (the City) as of and for the year ended June 30, 2017, and the related notes to the financial statements, which collectively comprise the City's basic financial statements as listed in the table of contents. Management's Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error. Auditor's Responsibility Our responsibility is to express opinions on these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity's preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity's internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions. PrimeGlobal AnAa—wti- r ,,,V,nd_Areo tig Firms To the Honorable Mayor and Members of the City Council City of Chino Hills, California Opinions In our opinion, the financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities, the business -type activities, each major fund, and the aggregate remaining fund information of the City of Chino Hills, California, as of June 30, 2017, and the respective changes in financial position and, where applicable, cash flows thereof for the year then ended in accordance with accounting principles generally accepted in the United States of America. Other Matters Required Supplementary Information Accounting principles generally accepted in the United States of America require that the management's discussion and analysis, the budgetary comparison schedules for the General Fund, Landscape and Lighting Fund, Existing Infrastructure Fees Fund and Solid Waste Fund, the Schedule of Proportionate Share of the Net Pension Liability, and Schedule of Plan Contributions, 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 consistency with management's responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance. Other Information Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the City's basic financial statements. The introductory section, combining and individual nonmajor fund financial statements, schedules, and statistical section are presented for purposes of additional analysis and are not a required part of the basic financial statements. The combining and individual nonmajor fund financial statements, and schedules are the responsibility of management and were derived from and relate directly to the underlying accounting and other records used to prepare the basic financial statements. The information has been subjected to the auditing procedures applied in the audit of the basic financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the basic financial statements or to the basic financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the combining and individual nonmajor fund financial statements and schedules are fairly stated in all material respects in relation to the basic financial statements as a whole. The introductory and statistical sections have not been subjected to the auditing procedures applied in the audit of the basic financial statements and, accordingly, we do not express an opinion or provide any assurance on them. To the Honorable Mayor and Members of the City Council City of Chino Hills, California Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated November 16, 2017 on our consideration of the City's internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is to solely describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the City's internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the City's internal control over financial reporting and compliance. Brea, California November 16, 2017 i Chino Hills This page intentionally left blank. CITY OF CHINO HILLS cdd�aLN 25 YEARS OF EXCELLENCE r Management's Discussion Analvsis i (.rhino Hills This page intentionally left blank. Uhino Hills MANAGEMENT'S DISCUSSION AND ANALYSIS The following Management Discussion and Analysis (MD&A) of the City of Chino Hills' financial performance provides an introduction and overview to the financial activities of the City for the fiscal year ended June 30, 2017. This narrative discussion and analysis focuses on the current year's activities, resulting changes and currently known facts; therefore, the information presented here should be considered in conjunction with additional information furnished in the letter of transmittal and the accompanying basic financial statements. FINANCIAL HIGHLIGHTS • Total assets and deferred outflows of the City exceeded total liabilities and deferred inflows at June 30, 2017 by $540.1 million (net position). • The City's net position increased by $31.2 million from $508.9 million to $540.1 million in fiscal year 2016-17 which was primarily attributable to the $14.8 million one-time developer fees received, the gain on the sale of the Founders property in the amount of $9.1 million, a reduction of $5.3 million in deferred pension related items, and a $1.9 million gain on the City's investment in the Chino Basin Desalter Authority Joint Venture. The City's governmental funds combined ending fund balances increased $38.2 million from $61.1 million to $99.3 million at June 30, 2017. This increase was largely due to the gain on the sale of the Founder's property in the amount of $9.1 million, increases in one time revenues received related to development activity, and a reduction in developer related debt. Of this $99.3 million, $0.2 million was non -spendable, $63.2 million was restricted, $19.1 million was committed, $2.8 million was assigned and $14.1 million was unrestricted. REPORTING THE CITY AS A WHOLE The Statement of Net Position and the Statement of Activities: The Statement of Net Position 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 position and changes. Net Position is the difference between assets and liabilities, which is one way to measure the City's financial health, or financial position. Over time, increases or decreases in the City's net position 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 Position 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 general government (city manager, city clerk, and finance), public safety (police protection), public works, community development, community services, 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. 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 between the Governmental Fund financial statements and the Government - Wide financial statements are explained in a reconciliation following each Governmental Fund financial statement. Proprietary funds — When the City charges customers for the services it provides, these services are generally reported in proprietary funds. Proprietary funds are reported in the same way that all activities are reported in the Statement of Net Position and the Statement of Activities. In fact, the City's proprietary 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 uses internal service funds (the other component of proprietary funds) to report activities that provide supplies and services for the City's other programs and activities — such as the City's Equipment Maintenance and Information Technology Funds. The internal service funds are reported with governmental activities in the government -wide financial statements. The proprietary fund financial statements can be found in the Basic Financial Statements section of this report. THE CITY AS TRUSTEE Reporting the City's Fiduciary Responsibilities: The City is the trustee, or fiduciary, for certain funds held on behalf of those entities outside of the government. The City's fiduciary activities are reported in a separate Statement of Fiduciary Net Position. 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 This analysis focuses on the City's net position and changes in net position of the governmental and business -type activities for the fiscal year ended June 30, 2017. As noted earlier, the City's net position increased by $31.2 million from $508.9 million at June 30, 2016, to $540.1 at June 30, 2017. The largest portion $343.6 million, or 64% of the City's net position reflects the net investment in capital assets such as land, buildings, machinery and equipment, less any related debt used to acquire those assets that were still outstanding. These are not liquid assets; therefore, they are not available for future spending. An additional portion of $64.3 million or 12% of the City's net position represents various resources subject to external restrictions on how they may be used. These fund balance amounts are said to be restricted. The remaining balance of unrestricted net position of $132.2 million, or 24% may be used to meet the City's ongoing obligations to citizens and creditors. This is the only "discretionary" portion of the City's total net position amount. The following graph demonstrates the components of the City's net position at the fiscal year ended June 30, 2017. City of Chino Hills Net Position June 30, 2017 $540.1 Million Restricted for other capital projects, $45.4 million 8% Unrestricted _ $132.2 million 24% Restricted for other uses $17.8 million 3o/- 7 Restricted for Debt Service _$1.1 million 1% Net investment in capital assets $343.6 million 64% The following is an analysis that summarizes the City's net position (Exhibit A) at fiscal year ended June 30, 2017, and 2016, respectively: Exhibit A Net Position (Summarized) As of June 30, 2017 and 2016 (in thousands) Other liabilities $ 4,165 $ 4,069 $ 4,456 $ 4,193 $ 8,621 $ 8,262 $ 359 Long-term liabilities oustanding 44,554 47,496 19,952 15,499 64,506 62,995 1,511 Total Liabilities $ 48,719 $ 51,565 $ 24,408 $ 19,692 $ 73,127 $ 71,257 $ 1,870 Deferred pension related items $ 5,333 $ 7,478 $ 1,406 $ - $ 6,739 $ 7,478 $ (739) Total deferred inflows $ 5,333 $ 7,478 $ 1,406 $ - $ 6,739 $ 7,478 $ (739) Net Position: Net investment in capital assets $ 246,505 257,467 $ 97,054 $ 98,353 $ 343,559 $ 355,820 $ (12,261) Restricted 63,223 42,939 1,120 1,120 64,343 44,059 20,284 Unrestricted 23,695 327 108,542 108,676 132,237 109,003 23,234 Total net position $ 333,423 $ 300,733 $ 206,716 $ 208,149 $ 540,139 $ 508,882 $ 31,257 During the fiscal year 2016-17, current and other assets increased by a total of $43.8 million. This was primarily the result of a $9.1 million gain on the sale of assets related to the sale of the Founder's property, and $14.8 million received related to developer fees. The City also recorded a $1.9 million gain on investment in the Water Utility Fund related to the Chino Basin Desalter Authority joint venture and a $3.2 million increase in cash provided by net operating activities in the Water Utility Fund. Capital and intangible assets decreased by $16.7 million. This can be attributed to the increase in accumulated depreciation of capital assets for fiscal year 2016-17 as well as the removal of the Founder's property from the City's general fixed asset group. The overall result was an increase of $27.1 million in total assets from $575.9 million to $603.0 million in fiscal year 2016-17. Total deferred outflows increased by $5.3 million due to the net effect of a $0.1 million decrease in deferred charges related to Water Utility Fund long term debt and a $5.4 million increase in deferred pension related items associated with the annual pension reconciliation adjustments for changes in assumptions, as well as adjustments for actual verses proportionate share of contributions. Total liabilities increased $1.9 million in fiscal year 2016-17 due to the net effect of a reduction in long- term liabilities of $2.0 million in developer fee program obligations, a $1.8 million decrease in the Water Utility Fund bonded debt, and a $6.3 million increase in net pension obligations. This was the first year pension liabilities were reflected in the proprietary funds. Additionally, deferred pension related items decreased $0.7 million as a result of the fiscal year 2016-17 pension liability adjustments. This net increase in liabilities combined with the net increase in total assets resulted in an overall increase in net position of $31.2 million from $508.9 million to $540.1 million in fiscal year 2016-17. N. Governmental Business -Type Activities Activities Totals 2017 2016 2017 2016 2017 2016 Change Current and other assets $ 109,368 $ 70,696 $ 119,443 $ 114,319 $ 228,811 $ 185,015 $ 43,796 Capital & intangible assets 264,876 277,797 109,334 113,115 374,210 390,912 (16,702) Total Assets $ 374,244 $ 348,493 $ 228,777 $ 227,434 $ 603,021 $ 575,927 $ 27,094 Deferred from debt refunding $ - $ - $ 3,753 $ 407 $ 3,753 $ 407 $ 3,346 Deferred pension related items 13,231 11,283 - - 13,231 11,283 1,948 Total deferred outflows $ 13,231 $ 11,283 $ 3,753 $ 407 $ 16,984 $ 11,690 $ 5,294 Other liabilities $ 4,165 $ 4,069 $ 4,456 $ 4,193 $ 8,621 $ 8,262 $ 359 Long-term liabilities oustanding 44,554 47,496 19,952 15,499 64,506 62,995 1,511 Total Liabilities $ 48,719 $ 51,565 $ 24,408 $ 19,692 $ 73,127 $ 71,257 $ 1,870 Deferred pension related items $ 5,333 $ 7,478 $ 1,406 $ - $ 6,739 $ 7,478 $ (739) Total deferred inflows $ 5,333 $ 7,478 $ 1,406 $ - $ 6,739 $ 7,478 $ (739) Net Position: Net investment in capital assets $ 246,505 257,467 $ 97,054 $ 98,353 $ 343,559 $ 355,820 $ (12,261) Restricted 63,223 42,939 1,120 1,120 64,343 44,059 20,284 Unrestricted 23,695 327 108,542 108,676 132,237 109,003 23,234 Total net position $ 333,423 $ 300,733 $ 206,716 $ 208,149 $ 540,139 $ 508,882 $ 31,257 During the fiscal year 2016-17, current and other assets increased by a total of $43.8 million. This was primarily the result of a $9.1 million gain on the sale of assets related to the sale of the Founder's property, and $14.8 million received related to developer fees. The City also recorded a $1.9 million gain on investment in the Water Utility Fund related to the Chino Basin Desalter Authority joint venture and a $3.2 million increase in cash provided by net operating activities in the Water Utility Fund. Capital and intangible assets decreased by $16.7 million. This can be attributed to the increase in accumulated depreciation of capital assets for fiscal year 2016-17 as well as the removal of the Founder's property from the City's general fixed asset group. The overall result was an increase of $27.1 million in total assets from $575.9 million to $603.0 million in fiscal year 2016-17. Total deferred outflows increased by $5.3 million due to the net effect of a $0.1 million decrease in deferred charges related to Water Utility Fund long term debt and a $5.4 million increase in deferred pension related items associated with the annual pension reconciliation adjustments for changes in assumptions, as well as adjustments for actual verses proportionate share of contributions. Total liabilities increased $1.9 million in fiscal year 2016-17 due to the net effect of a reduction in long- term liabilities of $2.0 million in developer fee program obligations, a $1.8 million decrease in the Water Utility Fund bonded debt, and a $6.3 million increase in net pension obligations. This was the first year pension liabilities were reflected in the proprietary funds. Additionally, deferred pension related items decreased $0.7 million as a result of the fiscal year 2016-17 pension liability adjustments. This net increase in liabilities combined with the net increase in total assets resulted in an overall increase in net position of $31.2 million from $508.9 million to $540.1 million in fiscal year 2016-17. N. The City's programs for governmental activities include general government, public safety, public works, community development, and community services. The programs for the business -type activities include the water and sewer services. The following is a summary of Statements of Activities that records the Changes in Net Position (Exhibit B) for the programs listed above: Exhibit B Changes in Net Position As of June 30, 2017 and 2016 (in thousands) Governmental Business -Type Activities Activities Totals 2017 2015 2017 2015 2017 2016 Change Revenues: Program Revenues: Charges forservices $ 31,359 $ 29,766 $ 33,356 $ 31,007 $ 64,715 $ 60,773 $ 3,942 Operating contributions and grants 2,297 3,237 - - 2,297 3,237 (940) Capital contributions and grants 27,461 34,293 8 77 27,469 34,370 (6,90 General Revenues: P ro perty taxes 12,605 12,029 12,605 12,029 576 Sales taxes 7,596 7,073 7,596 7,073 523 Franchise taxes 2,208 2,364 2,208 2,364 (156) Othertaxes 1,604 1,734 1,604 1,734 (130) Intergovernmental, unrestricted 35 31 35 31 4 Use of mo ney and pro perty 827 2,245 139 1,418 966 3,663 (2,697) Gain (loss) on disp. of capital assets 9,119 - - - 9,119 - 9,119 Other revenues 6,239 449 2,015 2,242 8,254 2,691 5,563 Total Revenues 101,350 93,221 35,518 34,744 136,868 127,965 8,903 Expenses: General government 11,702 7,369 - - 11,702 7,369 4,333 Public safety 13,282 12,729 13,282 12,729 553 Public works 35,563 38,162 35,563 38,162 (2,599) Community development 4,892 4,421 4,892 4,421 471 Community services 7,766 7,267 7,766 7,267 499 Interest on long-term debt 115 501 115 501 (386) Water Utility - - 22,915 20,648 22,915 20,648 2,267 Sewer Utility - - 8,899 8,281 8,899 8,281 618 Total Expenses 73,320 70,449 31,814 28,929 105,134 99,378 5,756 Transfers 705 1,343 (705) (1,343) - - - Increase (decrease) in net position 28,735 24,115 2,999 4,472 31,734 28,587 3,147 Net position, beginning of year 300,733 276,618 208,149 203,677 508,882 480,295 28,587 Restatement 3,955 - (4,432) - (477) - (477) Net po stio n, end of year $ 333,423 $ 300,733 $ 206,716 $ 208,149 $ 540,139 $ 508,882 $ 31,257 In fiscal year 2016-17, there was a net increase in total revenues of $8.9 million as compared to fiscal year 2015-16. This was primarily due to the $9.1 million gain received from the sale of assets related to the Founder's property. There was also an increase of $5.6 million in Other Revenues related to contributions from Community Facilities District No. 4 for the payment of developer obligations, and an increase of $3.9 million in Charges for Services related to the receipt of development impact fees and Water Utility operating activities. These increases were offset by a $6.9 million decrease in Capital contributions and grants and a $2.7 million decrease in the Use of money and property. E Total expenses in fiscal year 2016-17 increased by $5.8 million as compared to the prior fiscal year. General government expenses increased by $4.3 million primarily due to a $0.8 million increase in general liability and worker's compensation insurance costs, a $2.1 million increase in capital outlay costs in fiscal year 2016-17, and a $2.0 million increase over fiscal year 2015-16 due to an increase in pension expenses. Public safety costs increased by $0.5 million due to an increase in personnel costs passed through to the City by the San Bernardino County Sheriffs department. Public works expenditures decreased by $2.6 million due to the recognition of developer credits for several large development projects. Lastly, Water Utility expenses increased by $2.3 million over the prior year primarily due to a smaller gain on investment with the Chino Basin Desalter Authority as compared to fiscal year 2015-16. The net effect of the changes in revenues and expenses resulted in an overall increase of $31.2 million for fiscal year 2016-17. Governmental Activities The following presents the cost of each of the City's six largest programs — general government, public safety, community development, community services, public works and interest on long-term debt — as well as each program's net cost (total cost less revenues generated by the activities). The net cost shows the financial impact by each of these functions. Total Cost of Services General government Public safety Public w orks Community development Community services Interest on long-term debt Total B(hibit C Governmental Activities As of June 30, 2017 and 2016 (in thousands) 2017 2016 Change $ 11,702 13,282 35,563 4,893 7,766 $ 7,369 12,729 37,789 4,794 7,267 $ 4,333 553 (2,226) 99 499 115 501 (386) $ 73,321 $ 70,449 $ 2,872 Net Cost of Services 2017 General government $ (1,013) Public safety (12,641) Public works 4,307 Community development 412 Community services (3,152) Interest on long-term debt (115) Total $ (12,202) 10 2016 $ 17,174 (12,040) (1,913) (472) (5,401) (501) $ (3,153) Change $ (18,187) (601) 6,220 884 2,249 386 $ (9,049) The chart below illustrates the total revenues of the governmental activities for the fiscal year ended June 30, 2017, and 2016, respectively. 35,000 30,000 N 25,000 0 c 20,000 15,000 0 10,000 5,000 0 City of Chino Hills Revenue Sources- Two- year Comparison Governmental Activities Taxes Operating Investment earnings Other contributions & grants ■ 2017 2016 The chart below illustrates the total expenses of the governmental activities for the fiscal year ended June 30, 2017, and 2016, respectively. 40,000 35,000 M r 30,000 0 25,000 20,000 0 E 15,000 10,000 5,000 0 City of Chino Hills Expenses- Two- year Comparison Governmental Activities General Public safety Public works Community Community Interest on government development services long term debt ■ 2017 2016 11 THE CITY'S FUNDS The total fund balance of the governmental funds at June 30, 2017 was $99.3 million. The fund balance includes the General Fund, Major Special Revenue Funds and non -major Other Governmental Funds which accounts for the remainder of the governmental fund balances. The General Fund, which has the largest fund balance of the governmental funds at $43.5 million, increased by $16.5 million compared to fiscal year 2015-16. The increase can be primarily attributed to the sale of the Founder's property, increases in licenses and permits, and increases in charges for services as compared to the related expenditures. The Major Special Revenue Funds accounting for $7.4 million of the governmental fund balance increased by $13.3 million compared to fiscal year 2015-16. The increase in the Special revenue fund balances can be primarily attributed to the reduction of long term developer obligations paid by the Existing Infrastructure Fee fund. The non -major Other Governmental Funds account for the remainder of governmental fund balances of $48.4 million. The aggregate increase in these funds is $8.4 million which is mainly attributed to development impact fee revenues. The total net position of the Proprietary Funds was $206.8 million. This represents a $1.4 million decrease from fiscal year 2015-16. The Proprietary Funds include the Water Utility Fund and the Sewer Utility Fund. The decrease in net position is mainly attributable to a $6.3 million pension liability that was added to the proprietary funds in fiscal year 2016-17. This was offset by an increase to the Water utility fund for the Chino Basin Desalter Authority joint venture, as well as an overall increase in operating activities in the Water Utility Fund. General Fund Budgetary Highlights During fiscal year 2016-17, the City Council reviewed and revised the City budget as recommended by the City 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 $25,000 per departmental request. Additionally, the City Manager is authorized to transfer appropriations within a department within a fund or between departments within a fund without limitation. All amendments in excess of $25,000 are approved by the City Council. General Fund revenues ended the year $0.8 million lower than anticipated; General Fund expenditures were $10.4 million less than the adjusted operating budget. These amounts resulted in an overall increase in the budgetary fund balance of $43.5 million. Key factors of the differences in budget -to -actual included the following: • Taxes received were $0.3 million lower than expected primarily due to Sales Tax revenue not reaching estimated amounts. • Licenses and Permits revenues were lower than expected for fiscal year 2016-17, resulting in $1.0 million less revenue than budgeted. This was the result of less development activity than originally anticipated due to routine delays on currently approved development projects. • Charges for services came in $0.3 million less than budgeted due to lower than expected administrative overhead charges received from development impact fee funds. Adopted estimates were based on projected development activity. Lower than expected development activity due to routine delays resulted in lower than expected amounts. • Miscellaneous revenues were $1.4 million greater than expected due to the receipt of $0.8 million in one-time developer payments, and $0.6 million in traffic fair share payments received from development projects. 12 • City Manager department expenses were $0.7 million less than expected primarily due to a $0.6 legal settlement that was budgeted but is still pending payment. • The Development services program ended the year $1.1 million under budget primarily due to developer reimbursed activity ending the year $0.8 million less than expected. This was the result of less development activity than originally anticipated due to routine delays on currently approved development projects. • Principal retirements ended the year $1.1 million under budget primarily due to the fact that General Fund interfund loan repayments are not recorded as expenditures, but rather, are recorded as transactions on the balance sheet. During fiscal year 2016-17, the General Fund paid $12.6 million in principal on interfund loans. • Transfers out ended the year $5.2 million less than budgeted primarily due to less reimbursements for capital projects activity. Specifically, the Bird Farm Park project and the Street Light Acquisition project, funded by the General Fund, only recorded minimal activity as the projects are still in the planning and design phases. Together, the items mentioned above resulted in a net $9.6 million positive variance to final budget amounts. CAPITAL ASSET AND DEBT ADMINISTRATION Capital Assets The City of Chino Hills had $374.2 million invested in the capital assets, as compared to $390.9 million in the prior year. The net decrease in the capital assets is approximately $16.7 million. The decrease was primarily due to the increase in Accumulated Depreciation of Capital Assets recorded in fiscal year 2016- 17, and the deletion of the Founder's property in the amount of $2.5 million which was sold for a total gain of $9.1 million. For more detailed information, see note 5 to the financial statements. Land and easements Construction -in -progress Structures and improvements Equipment Vehicles Irrigation Pipeline in service Utility plant in service Meters Infrastructure Water and capacity rights Total Exhibit D Capital Assets at Year -End (Net of Depreciation) For the Year Sided June 30, 2017 and 2016 (in thousands) Governmental Activities 2017 2016 $ 24,192 $ 26,693 12,890 13,850 99,513 102,057 2,555 1,907 707 863 300 - 150 154 124,568 132,273 Business -Type Activities 2017 2016 $ 3,933 $ 3,933 2,968 4,311 520 562 234 258 70,552 71,841 17,864 18,804 3,789 3,497 - - 9,474 9,909 $ 264,875 $ 277,797 $ 109,334 $ 113,115 13 Totals 2017 2016 Change $ 28,125 $ 30,626 $ (2,501) 15,858 18,161 (2,303) 100,033 102,619 (2,586) 2,789 2,165 624 707 863 (156) 300 - 300 70,702 71,995 (1,293) 17,864 18,804 (940) 3,789 3,497 292 124,568 132,273 (7,705) 9,474 9,909 (435) $ 374,209 $ 390,912 $ (16,703) Debt At June 30, 2017, the City's governmental activities had $44.6 million in long-term debts including the net pension liability, development fee related obligations, capital lease obligations, other post -employment benefits obligation, and compensated absences. This was a $2.9 million decrease over the fiscal year 2015-16 total of $47.5 million. This decrease is primarily due to a reduction in developer fee program obligations and a reduction of the governmental activities net pension liability. Please refer to Note 6 for further details on the City's long-term liabilities. Exhibit E Outstanding Debt at Year -End For Fiscal Year Ended June 30, 2017 and 2016 (in thousands) Compensated absences $ Advances from developers Development The program obligations Other post employment benefits obligation Net pension liability Revenue Bond CJPIA General liability retrospective deposit payable CJPIA Worker's comp retrospective deposit payable Bond premium/discount - - Total $ 44,553 $ 47,487 Governmental Business -Type Activities Activities Total 2017 2016 2017 2016 2017 2016 Change 958 $ 921 $ 357 $ 330 $ 1,315 $ 1,251 $ 64 2,045 2,046 - - 2,045 2,046 (1) 16,325 18,275 16,325 18,275 (1,950) 1,057 907 1,057 907 150 23,096 23,926 6,308 - 29,404 23,926 5,478 - - 11,905 13,695 11,905 13,695 (1,790) 1,072 1,261 151 1,072 1,261 (189) - - - 151 (151) 1,382 1,474 1,382 1,474 (92) $ 19,952 $ 15,499 $ 64,505 $ 62,986 $ 1,519 The majority of the obligations under the governmental activities were either pension obligations ($23.1 million) or development related ($16.3 million). The development obligations are owed to developers who had previously installed major infrastructure throughout the City. For the obligations under the business -type activities, the City had $11.9 million in long-term bonded debts which 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, 2017, in preparing the budget for fiscal year 2017-18, management considered the possible impact that the State of California and the national economies will have on the City's budget. Recent economic data reflects a generally favorable outlook for the U.S. economy. In recent years, the federal government has taken extraordinary steps to stabilize financial markets, encourage economic growth, and keep interest rates low. Inflationary pressures appear contained for now which coupled with continuing strong trends in the labor market may leave the door open for the Federal Reserve to continue normalizing monetary policy in the near future. The State continues to show signs of slow, but improved economic growth, and it is anticipated that this may continue for an extended period of time. Development activity within the region continues to show signs of improvement and during 2016-17 the City saw increases in development activity. This increase in development will provide for increases in revenue, however, these revenue sources will not be recurring to the General Fund. 14 The overall approach in the development of the fiscal year 2017-18 budget was to maintain expenses while continuing to provide Chino Hills' high level of community safety and customer service. The fiscal year 2017-18 Budget was adopted with an estimated General Fund surplus of $823,600. The City of Chino Hills has maintained its strong financial position through prudent, long-range policy decisions and sound fiscal management. The City will continue to monitor key economic indicators, sources of revenues, and spending levels as part of its sound conservative fiscal approach. The success of our City's program and project efforts during the next five years will shape the five-year viability and future of our community. Questions or requests for information regarding the City of Chino Hills' 2017-18 budget should be sent to the Finance Department at the address below. The budget may also be downloaded at the following link: http://www.chinohills.org/DocumentCenter/View/11464. 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. 15 i Chino Hills This page intentionally left blank. or. CITY OF CHINO HILLS cdd�aLN 25 YEARS OF EXCELLENCE Basic 17mnancial Statements i (.rhino Hills This page intentionally left blank. CITY OF CHINO HILLS STATEMENT OF NET POSITION JUNE 30, 2017 Assets: Cash and investments Receivables: Accounts Taxes Long-term receivables Accrued interest Special assessments Internal balances Due from other agencies Due from other governments Contribution due from developers Other investments Investment in joint venture Restricted assets: Cash and investments Cash with fiscal agent Capital assets not being depreciated Capital assets, net of depreciation Total Assets Deferred Outflows of Resources: Deferred charge on refunding Deferred pension related items Total Deferred Outflows of Resources Liabilities: Accounts payable Accrued liabilities Accrued interest Retentions payable Unearned revenue Deposits payable Noncurrent liabilities: Net pension liability Net OPEB obligation Due within one year Due in more than one year Total Liabilities Deferred Inflows of Resources: Deferred pension related items Total Deferred Inflows of Resources Net Position: Net investment in capital assets Restricted for: Community development projects Public safety Public works Capital projects Debt service Line of credit Pension Unrestricted Total Net Position See Notes to Financial Statements 17 Primary Government Governmental Business -Type An+ivi+in A^+hA+i- T -+tel $ 99,990,691 $ 76,517,785 $ 176,508,476 751,760 4,202,019 4,953,779 1,554,640 - 1,554,640 19,845 - 19,845 12,172 10,482 22,654 57,937 - 57,937 (277,982) 277,982 - 236,745 - 236,745 769,819 257 770,076 622,978 - 622,978 - 60,120 60,120 - 36,511,678 36,511,678 5,261,106 - 5,261,106 368,388 1,861,864 2,230,252 37,082,105 6,901,404 43,983,509 227,793,369 102,433,472 330,226,841 374,243,573 228,777,063 603,020,636 - 264,952 264,952 13,230,859 3,487,985 16,718,844 13,230,859 3,752,937 16,983,796 2,766,373 1,189,359 47,538 95,014 66,797 2,240,113 254,975 31,596 1,928,905 5,006,486 1,444,334 31,596 47,538 95,014 1,995,702 23,096,094 6,308,190 29,404,284 1,056,637 - 1,056,637 529,924 1,866,500 2,396,424 19,871,174 11,777,987 31,649,161 48,718,910 24,408,266 73,127,176 5,332,650 1,405,820 6,738,470 5,332,650 1,405,820 6,738,470 246,504,929 2,245,434 31,561 9,867,087 45,361,831 456,218 5,261,106 23,694,706 $ 333,422,872 97, 054,149 1,120,375 108,541,390 $ 206,715,914 343,559,078 2,245,434 31,561 9,867,087 45,361,831 1,120,375 456,218 5,261,106 132,236,096 $ 540,138,786 CITY OF CHINO HILLS STATEMENT OF ACTIVITIES YEAR ENDED JUNE 30, 2017 Business -Type Activities Water Utility 22,914,640 25,858,588 - - Sewer Utility 8,899,602 7,497,776 - 8,398 Total Business -Type Activities 31,814,242 33,356,364 - 8,398 Total Primary Government $ 105,134,740 $ 64,715,855 $ 2,297,562 $ 27,469,387 General Revenues: Taxes: Property taxes, levied for general purpose Sales taxes Franchise taxes Other taxes Intergovernmental, unrestricted: Motor vehicle in lieu - unrestricted Use of money and property Other Gain on sale of capital asset Transfers Total General Revenues and Transfers Change in Net Position Net Position at Beginning of Year Restatement of Net Position Net Position at End of Year, as Restated See Notes to Financial Statements 18 Program Revenues Operating Capital Charges for Contributions Contributions Expenses Services and Grants and Grants Functions/Programs Primary Government: Governmental Activities: General government $ 11,702,452 $ 10,376,287 $ 21,442 $ 292,216 Public safety 13,281,560 438,268 202,121 - Public works 35,562,526 13,711,455 1,774,273 24,384,200 Community development 4,892,784 5,304,386 - - Community services 7,765,794 1,529,095 299,726 2,784,573 Interest on long-term debt 115,382 - - - Total Governmental Activities 73,320,498 31,359,491 2,297,562 27,460,989 Business -Type Activities Water Utility 22,914,640 25,858,588 - - Sewer Utility 8,899,602 7,497,776 - 8,398 Total Business -Type Activities 31,814,242 33,356,364 - 8,398 Total Primary Government $ 105,134,740 $ 64,715,855 $ 2,297,562 $ 27,469,387 General Revenues: Taxes: Property taxes, levied for general purpose Sales taxes Franchise taxes Other taxes Intergovernmental, unrestricted: Motor vehicle in lieu - unrestricted Use of money and property Other Gain on sale of capital asset Transfers Total General Revenues and Transfers Change in Net Position Net Position at Beginning of Year Restatement of Net Position Net Position at End of Year, as Restated See Notes to Financial Statements 18 Net (Expenses) Revenues and Changes in Net Position Primary Government Governmental Business -Type Activities Activities Total $ (1,012,507) (12,641,171) 4,307,402 411,602 (3,152,400) (115,382) (12,202,456) (12,202,456) $ - $ (1,012,507) - (12,641,171) - 4,307,402 - 411,602 - (3,152,400) - (115,382) (12,202,456) 2,943,948 2,943,948 (1,393,428) (1,393,428) 1,550,520 1,550,520 1,550,520 (10,651,936) 12,604,842 - 12,604,842 7,595,570 - 7,595,570 2,208,116 - 2,208,116 1,603,972 - 1,603,972 35,331 - 35,331 826,728 138,868 965,596 6,239,091 2,014,663 8,253,754 9,118,602 - 9,118,602 705,095 (705,095) - 40,937,347 1,448,436 42,385,783 28,734,891 2,998,956 31,733,847 300,732,915 208,148,703 508,881,618 3,955,066 (4,431,745) (476,679) $ 333,422,872 $ 206,715,914 $ 540,138,786 See Notes to Financial Statements 19 CITY OF CHINO HILLS BALANCE SHEET GOVERNMENTAL FUNDS JUNE 30, 2017 Assets: Cash and investments Receivables: Accounts Taxes Long-term receivables Accrued interest Special assessments Due from other agencies Due from other governments Due from developers Due from other funds Advances to other funds Restricted assets: Cash and investments Cash and investments with fiscal agents Total Assets Liabilities, Deferred Inflows of Resources, and Fund Balances: Liabilities: Accounts payable Accrued liabilities Retentions payable Due to other funds Unearned revenues Deposits payable Advances from other funds Total Liabilities Deferred Inflows of Resources: Unavailable revenues Total Deferred Inflows of Resources Fund Balances: Nonspendable Restricted Committed Assigned Unassigned Total Fund Balances Total Liabilities, Deferred Inflows of Resources, and Fund Balances See Notes to Financial Statements 20 Special Revenue Funds Landscape and Existing Lighting Infrastructure General District Fees $ 37,611,373 $ 3,124,755 $ 4,698,666 190,815 24,436 - 1,334,499 - - 19,845 - - 5,093 338 909 - 54,839 - 236,557 - - 138,111 - - 618,843 - 4,135 107,347 - - 166,149 - - 5,261,106 - - $ 45,689,738 $ 3,204,368 $ 4,703,710 $ 532,725 $ 359,564 $ - 1,016,294 71,510 - - 1,700 - 4,240 22,614 - 63,698 - - 1,616,957 455,388 - 618,843 8,457 - 618,843 8,457 - 185,994 - - 7,336,274 2,740,523 4,703,710 19,071,040 - - 2,757,408 - - 14,103,222 - - 43,453,938 2,740,523 4,703,710 $ 45,689,738 $ 3,204,368 $ 4,703,710 CITY OF CHINO HILLS BALANCE SHEET GOVERNMENTAL FUNDS JUNE 30, 2017 Assets: Cash and investments Receivables: Accounts Taxes Long-term receivables Accrued interest Special assessments Due from other agencies Due from other governments Due from developers Due from other funds Advances to other funds Restricted assets: Cash and investments Cash and investments with fiscal agents Total Assets Liabilities, Deferred Inflows of Resources, and Fund Balances: Liabilities: Accounts payable Accrued liabilities Retentions payable Due to other funds Unearned revenues Deposits payable Advances from other funds Total Liabilities Deferred Inflows of Resources: Unavailable revenues Total Deferred Inflows of Resources Fund Balances: Nonspendable Restricted Committed Assigned Unassigned Total Fund Balances Total Liabilities, Deferred Inflows of Resources, and Fund Balances See Notes to Financial Statements 21 Special Revenue Fund Other Total Governmental Governmental Solid Waste Funds Funds $ 496,659 $ 49,051,587 $ 94,983,040 519,345 7,048 741,644 - 220,141 1,554,640 - - 19,845 - 5,255 11,595 - 3,098 57,937 - - 236,557 - 631,708 769,819 - - 622,978 - - 107,347 - - 166,149 - - 5,261,106 - 368,388 368,388 $ 1,016,004 $ 50,287,225 $ 104,901,045 $ 932,836 $ 885,578 $ 2,710,703 - 39,309 1,127,113 - 45,838 47,538 83,168 33,295 143,317 - 95,014 95,014 - 3,099 66,797 - 551,899 551,899 1,016,004 1,654,032 4,742,381 - 190,463 817,763 - 190,463 817,763 - - 185,994 - 48,442,730 63,223,237 - - 19,071,040 - - 2,757,408 - - 14,103,222 - 48,442,730 99,340,901 $ 1,016,004 $ 50,287,225 $ 104,901,045 i Chino Hills This page intentionally left blank. 22 CITY OF CHINO HILLS RECONCILIATION OF THE BALANCE SHEET OF GOVERNMENTAL FUNDS TO THE STATEMENT OF NET POSITION JUNE 30, 2017 Fund balances of governmental funds $ 99,340,901 Amounts reported for governmental activities in the statement of net position are different because: Capital assets net of depreciation have not been included as financial resources in governmental fund activity. Capital Assets $ 491,400,332 Accumulated Depreciation (228,172,014) 263,228,318 Governmental funds report all pension contributions as expenditures. However, the net pension liability has a measurement date of June 30, 2016, and pension contributions subsequent to the measurement date are reclassified as deferred 4,253,794 pension contributions Deferred outflows of resources reported are Adjustment due to the changes in the proportions 1,163,276 Changes of assumptions 1,606,878 Net difference between projected and actual investment earnings 5,040,736 on pension plan investments Differences between proportionate share and actual contributions 1,166,175 8,977,065 Governmental funds report all OPEB contributions as expenditures, however in the statement of net position any excesses or deficiencies in contributions in relation to the Annual Required Contribution (ARC) are recorded as an asset or liability. (1,056,637) Long-term debt and compensated absences that have not been included in the governmental fund activity: Long-term liabilities Advances from developers (2,045,626) Development fee program obligation (16,324,914) Equestrian center lease (5) CJPIA General liability retrospective payable (1,072,223) (19,442,768) Compensated absences (903,592) Certain receivables are not available to pay for current period expenditures and therefore, are reported as unavailable revenues in the governmental funds. However, revenues are recorded in the governmental activities. 817,763 Governmental funds report all pension contributions as expenditures, however, in the statement of net position, the excess of the plan proportionate share of the total pension liability over the proportionate share of the plan fiduciary net position is reported as a net pension liability. (23,096,094) Deferred inflows of resources reported are: Difference between expected and actual experience (3,522,892) Changes in proportion and difference between employer contributions and proportionate share of contributions (1,809,758) (5,332,650) Internal service funds are used by management to charge the costs of certain activities, such as equipment management and information technology, to individual funds. The assets and liabilities of the internal service funds must be added to the statement of net position. 6,636,772 Net Position of Governmental Activities $ 333,422,872 See Notes to Financial Statements 23 CITY OF CHINO HILLS STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES GOVERNMENTALFUNDS YEAR ENDED JUNE 30, 2017 Revenues: Taxes Special assessments Licenses and permits Intergovernmental Charges for services Developer fees Contribution from property owners Fines and forfeitures Contributions Use of money and property Miscellaneous Total Revenues Expenditures: Current: General government Public safety Public works Community development Community services Capital outlay Debt service: Principal retirement Interest and fiscal charges Total Expenditures Excess (Deficiency) of Revenues Over (Under) Expenditures Other Financing Sources (Uses): 9,659,283 - - 12,884,083 - - 6,457,978 8,553,990 671,006 4,884,804 - 119,377 6,185,676 - - 95,093 37,188 - 28,757 - Special Revenue Funds 30,787 - Landscape Existing 40,226,461 8,591,178 and Lighting Infrastructure General District Fees $ 24,012,500 $ - $ - - 5,429,603 - 3,626,145 - - 52,594 - - 14,873,141 1,664,261 - - - 8,799,287 429,469 - - 5,021 - - 780,117 (10,799) (14,233) 2,226,914 9,882 4,295,579 46,005,901 7,092,947 13,080,633 9,659,283 - - 12,884,083 - - 6,457,978 8,553,990 671,006 4,884,804 - 119,377 6,185,676 - - 95,093 37,188 - 28,757 - 1,871,240 30,787 - 64,153 40,226,461 8,591,178 2,725,776 5,779,440 (1,498,231) 10,354,857 Transfers in 57,502 684,451 Transfers out (922,395) (21,784) - Long-term debt issued - - 265,987 Proceeds from sale of capital asset 11,583,895 - - Total Other Financing Sources (Uses) Net Change in Fund Balances Fund Balances, Beginning of Year Fund Balances, End of Year See Notes to Financial Statements 24 10,719,002 662,667 265,987 16,498,442 (835,564) 10,620,844 26,955,496 3,576,087 (5,917,134) $ 43,453,938 $ 2,740,523 $ 4,703,710 CITY OF CHINO HILLS STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES GOVERNMENTALFUNDS YEAR ENDED JUNE 30, 2017 Revenues: Taxes Special assessments Licenses and permits Intergovernmental Charges for services Developer fees Contribution from property owners Fines and forfeitures Contributions Use of money and property Miscellaneous Total Revenues Expenditures: Current: General government Public safety Public works Community development Community services Capital outlay Debt service: Principal retirement Interest and fiscal charges Total Expenditures Excess (Deficiency) of Revenues Over (Under) Expenditures Other Financing Sources (Uses): Special Other Total Governmental Governmental Solid Waste Funds Funds $ - $ - $ 24,012,500 - 5,000,966 10,430,569 - - 3,626,145 - 7,193,118 7,245,712 4,890,432 - 21,427,834 - 5,954,955 14,754,242 - 215,658 215,658 - 76 429,545 - 34,834 39,855 - 75,478 830,563 - 81,156 6,613,531 4,890,432 18,556,241 89, 626,154 9,659,283 - 165,310 13,049,393 4,890,432 5,129,649 25,703,055 - - 5,004,181 - 116,418 6,302,094 - 2,124,291 2,256,572 - - 1,899,997 - 20,200 115,140 4,890,432 7,555,868 63,989,715 - 11,000,373 25,636,439 Transfers in - 4,831,174 5,573,127 Transfers out - (3,923,853) (4,868,032) Long-term debt issued - - 265,987 Proceeds from sale of capital asset - - 11,583,895 Total Other Financing Sources (Uses) Net Change in Fund Balances Fund Balances, Beginning of Year Fund Balances, End of Year See Notes to Financial Statements 25 907,321 12,554,977 - 11,907,694 38,191,416 - 36,535,036 61,149,485 $ - $ 48,442,730 $ 99,340,901 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, 2017 Net change in fund balances - total governmental funds Amounts reported for governmental activities in the statement of activities are different because: Governmental funds report capital outlays as expenditures. However, in the statement of activities, the costs of those assets are allocated over their estimated useful lives as depreciation expense. This is the amount by which depreciation exceeded capital outlays in the current period. Capital outlay Disposition of capital assets Depreciation 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 position. Also, governmental funds report the effect of 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 CJPIA General liability retrospective payable CJPIA Workers' comp liability retrospective refund Principal repayments: Equestrian center lease Development fee program obligations CJPIA General liability retrospective payable CJPIA Workers' comp liability retrospective payable Forgiveness of loans 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. Pension obligation expenses reported in the statement of activities do not require the use of current financial resources and, therefore, are not reported as expenditures in governmental funds. 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 annual OPEB cost is an expense. Some revenues recognized in governmental funds in current year were already recognized in governmental activities in prior year. Internal service funds are used by management to charge the costs of certain activities, such as equipment management and information technology, to individual funds. The net revenues (expenses) of the internal service funds is reported with governmental activities. Change in Net Position of Governmental Activities See Notes to Financial Statements 26 $ 4,820,150 (4,651,558) (13,010,192) (265,987) (154,840) 170,098 1 1,899,996 343,150 151,069 316,095 $ 38,191,416 (12,841,600) 2,289,484 (19,837) 968,209 (149,407) (589,953) 886,579 $ 28,734,891 CITY OF CHINO HILLS STATEMENT OF NET POSITION PROPRIETARY FUNDS JUNE 30, 2017 Assets: Current: Cash and investments Receivables: Accounts Accrued interest Due from other funds Due from other governments Restricted: Cash with fiscal agent Total Current Assets Noncurrent: Advances to other funds Other investments Investment in joint venture Capital assets not being depreciated Capital assets - net of accumulated depreciation Total Noncurrent Assets Total Assets Deferred Outflows of Resources: Deferred charge on refunding Deferred pension related items Total Deferred Outflows of Resources Total Assets and Deferred Outflows of Resources Liabilities, Deferred Inflows and Net Position: Liabilities: Current: Accounts payable Accrued liabilities Accrued interest Deposits payable Due to other funds Compensated absences Water revenue bonds Total Current Liabilities Noncurrent: Compensated absences Water revenue bonds Net pension liability Total Noncurrent Liabilities Total Liabilities Deferred Inflows of Resources: Deferred pension related items Total Deferred Inflows of Resources Net Position: Net investment in capital assets Restricted for debt service Unrestricted Total Net Position Business -Type Activities - Enterprise Funds Governmental Activities - Internal Water Utility Sewer Utility Totals Service Funds 48,807,813 $ 27,709,972 $ 76,517,785 $ 5,007,651 3,401,679 800,340 4,202,019 10,116 5,813 4,669 10,482 577 33,766 2,279 36,045 - 257 - 257 188 1,861,864 - 1,861,864 - 54,111,192 28,517,260 82,628,452 5,018,532 - 385,750 385,750 - 60,120 - 60,120 36,511,678 - 36,511,678 6,697,514 203,890 6,901,404 - 83,499,506 18,933,966 102,433,472 1,647,156 126, 768, 818 19, 523, 606 146, 292, 424 1,647,156 180,880,010 48,040,866 228,920,876 6,665,688 264,952 - 264,952 - 2,460,837 1,027,148 3,487,985 2,725,789 1,027,148 3,752,937 - $ 183,605,799 $ 49,068,014 $ 232,673,813 $ 6,665,688 $ 1,333,587 $ 906,526 $ 2,240,113 $ 55,670 186,410 68,565 254,975 62,246 31,596 - 31,596 - 1,471,812 457,093 1,928,905 - 75 75 - 5,000 1,500 6,500 6,056 1,860,000 - 1,860,000 - 4,888,405 1,433,759 6,322,164 123,972 239,270 111,549 350,819 48,682 11,427,168 - 11,427,168 - 4,546,323 1,761,867 6,308,190 - 16,212,761 1,873,416 18,086,177 48,682 21,101,166 3,307,175 24,408,341 172,654 991,832 413,988 1,405,820 991,832 413,988 1,405,820 77,916,293 19,137,856 97,054,149 1,647,156 1,120,375 - 1,120,375 - 82,476,133 26,208,995 108,685,128 4,845,878 161,512,801 45,346,851 206,859,652 6,493,034 Total Liabilities, Deferred Inflows of Resources, and Net Position $ 1839605,799 $ 499068,014 $ 23296739813 $ 6,6659688 Reconciliation of Net Position to the Statement of Net Position Net Position per Statement of Net Position - Proprietary Funds $ 206,859,652 Prior years' accumulated adjustment to reflect the consolidation of internal service funds activities related to the enterprise funds (46,363) Current years' adjustments to reflect the consolidation of internal service activities related to enterprise funds (97,375) Net Position per Statement of Net Position $ 206,715,914 See Notes to Financial Statements 27 CITY OF CHINO HILLS STATEMENT OF REVENUES, EXPENSES AND CHANGES IN FUND NET POSITION PROPRIETARY FUNDS YEAR ENDED JUNE 30, 2017 Operating Revenues: Charges for services Meter installation and fees Other Total Operating Revenues Operating Expenses: Salaries and benefits Professional and contractual services Purchased water Repair and maintenance Service and supplies Administrative and general expenses Utilities Depreciation and amortization Total Operating Expenses Operating Income (Loss) Nonoperating Revenues (Expenses): Interest revenue Interest expense Gain (loss) on joint venture Gain (loss) on disposal of capital assets Total Nonoperating Revenues(Expenses) Income (Loss) Before Transfers and Contributions Capital contributions Transfers out Changes in Net Position Net Position: Beginning of Year, as previously reported Restatements Beginning of Fiscal Year, as restated Business -Type Activities - Enterprise Funds Governmental Activities - Internal Water Utility Sewer Utility Totals Service Funds $ 25,858,588 $ 7,497,776 $ 33,356,364 $ 3,827,943 132,531 - 132,531 - 1,597,159 328,447 1,925,606 634 27,588,278 7,826,223 35,414,501 3,828,577 3,021,784 1,147,290 4,169,074 1,007,163 658,203 5,163,770 5,821,973 345,240 11,070,227 - 11,070,227 - 987,867 439,607 1,427,474 621,777 286,714 67,651 354,365 182,054 3,387,253 917,921 4,305,174 375,062 674,654 53,485 728,139 4,940 4,256,172 1,061,270 5,317,442 634,009 24,342,874 8,850,994 33,193,868 3,170,245 3,245,404 (1,024,771) 2,220,633 658,332 (53,394) 192,262 138,868 (3,835) (494,635) - (494,635) (242) 1,971,636 - 1,971,636 - (43,474) - (43,474) 36,291 1,380,133 192,262 1,572,395 32,214 4,625,537 (832,509) 3,793,028 690,546 - 8,398 8,398 98,658 (379,848) (325,247) (705,095) - 4,245,689 (1,149,358) 3,096,331 789,204 160,467,958 47,727,108 208,195,066 5,703,830 (3,200,846) (1,230,899) (4,431,745) - 157,267,112 46,496,209 203,763,321 5,703,830 End of Fiscal Year $ 161,512,801 $ 45,346,851 $ 206,859,652 $ 6,493,034 Reconciliation of Changes in Net Position to the Statement of Activities: Changes in Net Position, per the Statement of Revenues, Expenses and Changes in Fund Net Position - Proprietary Funds $ 3,096,331 Adjustment to reflect the consolidation of current fiscal year internal service funds activities related to enterprise funds (97,375) Changes in Net Position of Business -Type Activities per Statement of Activities $ 2,998,956 See Notes to Financial Statements 28 CITY OF CHINO HILLS STATEMENT OF CASH FLOWS PROPRIETARY FUNDS YEAR ENDED JUNE 30, 2017 Cash Flows from Operating Activities: Cash received from customers and users Cash paid to suppliers for goods and services Cash paid to employees for services Net Cash Provided (Used) by Operating Activities Cash Flows from Non -Capital Financing Activities: Cash transfers out Cash borrowed due to other funds Cash repayment received due from other funds Repayment made to other funds Advance from other funds Net Cash Provided (Used) by Non -Capital Financing Activities Cash Flows from Capital and Related Financing Activities: Proceeds from capital asset disposals Capital contributions Acquisition and construction of capital assets Principal paid on capital debt Interest paid on capital debt Net Cash Provided (Used) by Capital and Related Financing Activities Cash Flows from Investing Activities: Purchase of Stock Interest received Net Cash Provided (Used) by Investing Activities Net Increase(Decrease)in Cash and Cash Equivalents Cash and Cash Equivalents at Beginning of Year Cash and Cash Equivalents at End of Year Reconciliation of Operating Income to Net Cash Provided (Used) by Operating Activities: Operating income (loss) Adjustments to reconcile operating income (loss) net cash provided (used) by operating activities: Depreciation (Increase) decrease in accounts receivable (Increase) decrease in due from other governments (Increase) decrease in deferred outflows of pension related items Increase (decrease) in accounts payable Increase (decrease) in accrued liabilities Increase (decrease) in deposits payable Increase (decrease) in net pension liability Increase (decrease) in deferred inflows from pension related items Increase (decrease) in compensated absences Total Adjustments Net Cash Provided (Used) by Operating Activities Non -Cash Investing, Capital, and Financing Activities: Gain/(loss) on joint venture Amortization of bond premium Amortization of deferred amount on refunding Business -Type Activities - Enterprise Funds Water Utility Sewer Utility Governmental Activities - Internal Totals Service Funds $ 27,198,406 $ 7,809,460 $ 35,007,866 $ 3,818,461 (13,738,289) (5,749,009) (19,487,298) (1,220,473) (6,362,689) (2,061,062) (8,423,751) (1,361,156) 7,097,428 (611) 7,096,817 1,236,832 (379,848) (325,247) (705,095) 3 3 895,807 - 895,807 (15) (15) - 16,233,711 16,233,711 515,959 15,908,452 16,424,411 - 36,173 - 36,173 27,390 - 8,398 8,398 98,658 (1,292,192) (324,764) (1,616,956) (544,878) (1,790,000) (1,790,000) (9,274) (450,749) (450,749) (242) (3,496,768) (316,366) (3,813,134) (428,346) (60,120) - (60,120) (53,284) 196,861 143,577 (3,839) (113,404) 196,861 83,457 (3,839) 4,003,215 15,788,336 19,791,551 804,647 46,666,462 11,921,636 58,588,098 4,203,004 $ 50,669,677 $ 27,709,972 $ 78,379,649 $ 5,007,651 $ 3,245,404 $ (1,024,771) $ 2,220,633 $ 658,332 4,256,172 1,061,270 5,317,442 634,009 (465,604) (65,122) (530,726) (10,116) (257) (257) (188) (781,552) (381,371) (1,162,923) - 62,904 48,359 111,263 (66,274) 22,937 5,224 28,161 3,795 75,989 52,472 128,461 - 828,214 332,051 1,160,265 (170,190) (32,872) (203,062) - 23,411 4,149 27,560 17,274 3,852,024 1,024,160 4,876,184 578,500 $ 7,097,428 $ (611) $ 7,096,817 $ 1,236,832 $ 1,971,636 $ - $ 1,971,636 $ - (92,144) (92,144) 141,997 141,997 See Notes to Financial Statements 29 CITY OF CHINO HILLS STATEMENT OF FIDUCIARY NET POSITION FIDUCIARY FUNDS JUNE 30, 2017 Assets: Pooled cash and investments Receivables: Accounts Accrued interest Special assessments Restricted assets: Cash and investments with fiscal agents Total Assets Liabilities: Accounts payable Deposits payable Due to other governments Funds held for others Due to Inland Empire Utility Agency Total Liabilities See Notes to Financial Statements 30 Agency Funds $ 27,672,732 71 3,522 73,083 6,673,106 $ 34,422,514 $ 288,663 3,766,121 34,919 24,196,638 6,136,173 $ 34,422,514 CITY OF CHINO HILLS cdd�aLN 25 YEARS OF EXCELLENCE Notes to tlhe Financial Statements i (.rhino Hills This page intentionally left blank. CITY OF CHINO HILLS NOTES TO FINANCIAL STATEMENTS JUNE 30, 2017 I. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Note 1: Summary of Significant Accounting Policies The basic financial statements of the City of Chino Hills, California, (the "City") have been prepared in conformity with generally accepted accounting principles (GAAP) as applied to governmental agencies. The Governmental Accounting Standards Board (GASB) is the accepted standard setting body for establishing governmental accounting and financial reporting principles. The more significant of the City's accounting policies are described below. a. Description of the Reporting Entity The City of Chino Hills 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, 39 and 61. 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 Financing Authority The Chino Hills Financing Authority (Authority) is a joint exercise of powers authority organized and existing under and by virtue of the Joint Exercise of Powers Act, constituting Articles 1 through 4 (commencing with Section 6500) of Chapter 5, Division 7, Title 1 of the Government Code of the State of California. The City pursuant to Resolution No. 04R-16 adopted on January 13, 2004, and the former Chino Hills Redevelopment Agency (Agency) pursuant to Resolution No. CHRA 04-05 adopted on January 13, 2004, formed the Authority by the execution of a joint exercise of powers agreement (Joint Powers Agreement). The Authority is governed by a five -member Board which consists of all members of the City Council. Pursuant to the Marks -Roos Local Bond Pooling Act of 1985, as amended, constituting Article 4 (commencing with Section 6584), of Chapter 5, Division 7, Title 1 of the Government Code of the State, the Authority is authorized, among other things, to issue revenue bonds to provide funds to finance public capital facilities. 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. 31 CITY OF CHINO HILLS NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2017 Note 1: Summary of Significant Accounting Policies (Continued) The Agency was activated by the City Council in 2003. In 2011, the State of California Legislature approved a bill, AB X1 26, pursuant to which all California redevelopment agencies, including the Agency, were dissolved as of February 1, 2012, and certain of the Agency's rights and obligations were transferred to the City acting as the successor agency to the Agency on that date. As a result of the dissolution of the Redevelopment Agency, the City Council formed the Parking Authority to replace the Redevelopment Agency as the other member of the Financing Authority and the other party to the Joint Powers Agreement to ensure the continued existence of the Financing Authority. This action ensures the continued existence of the Financing Authority. The Parking Authority The Parking Authority was created on August 11, 2015 to replace the Redevelopment Agency as the other member of the Financing Authority and the other party to the Joint Powers Agreement to ensure the continued existence of the Financing Authority. The Parking Authority has the power to transfer, lease, manage or improve property, issue bonds and receive and expend revenues. The City Council will serve as the governing board of the Parking Authority. There was no financial activity during the fiscal year 2016-2017. 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 2016-2017. b. Government—Wide and Fund Financial Statements The government—wide financial statements (i.e., the statement of net position and the statement of activities) report information on all of the nonfiduciary activities of the primary government and its component units. 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 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. 32 CITY OF CHINO HILLS NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2017 Note 1: Summary of Significant Accounting Policies (Continued) c. Measurement Focus and Basis of Accounting 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 related to 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. • The Solid Waste Special Revenue Fund accounts for receipts and expenditures of money for the collection, transportation, and disposal, via contract, of solid waste materials. 33 CITY OF CHINO HILLS NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2017 Note 1: 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: • Capital Projects Funds account for the construction activity of various projects throughout the City. • 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. 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. 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. 34 CITY OF CHINO HILLS NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2017 Note 1: Summary of Significant Accounting Policies (Continued) d. Assets, Liabilities and Net Position 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 County 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 nonspendable 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. 35 CITY OF CHINO HILLS NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2017 Note 1: Summary of Significant Accounting Policies (Continued) Net Position Flow Assumption Sometimes the City will fund outlays for a particular purpose from both restricted (e.g., restricted bond or grant proceeds) and unrestricted resources. In order to calculate the amounts to report as restricted — net position and unrestricted — net position in the government -wide and proprietary fund financial statements, a flow assumption must be made about the order in which the resources are considered to be applied. It is the government's policy to consider restricted — net position to have been depleted before unrestricted — net position is applied. 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. • Community Services 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. CITY OF CHINO HILLS NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2017 Note 1: Summary of Significant Accounting Policies (Continued) 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 acquisition value at the date of donation. 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 37 CITY OF CHINO HILLS NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2017 Note 1: Summary of Significant Accounting Policies (Continued) Deferred Outflows/Inflows of Resources In addition to assets, the statement of financial position and balance sheet will sometimes report a separate section for deferred outflows of resources. This separate financial statement element, deferred outflows of resources, represents a consumption of net position or fund balance that applies to a future period(s) and so will not be recognized as an outflow of resources (expense/ expenditure) until then. The City has two types of items that qualify for reporting in this category. The item, deferred charge on refunding, is reported in the government -wide statement of net position. A deferred charge on refunding results from the difference in the carrying value of refunded debt and its reacquisition price. This amount is deferred and amortized over the shorter of the life of the refunded or refunding debt. The other item is deferred pension related items. In addition to liabilities, the statement of financial position and balance sheet will sometimes report a separate section for deferred inflows of resources. This separate financial statement element, deferred inflows of resources, represents an acquisition of net position or fund balance that applies to a future period(s) and so will not be recognized as an inflow of resources (revenue) until that time. The City has two types of items that qualify for reporting in this category. The item, unavailable revenue, is reported only in the governmental funds balance sheet. The governmental funds report unavailable revenue from intergovernmental revenues. These amounts are deferred and recognized as an inflow of resources in the period that the amounts become available. The other item is deferred pension related items reported in the government -wide statement of net position. 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, 2017, have been recorded in the General Fund as compensated absences payable. The liability for governmental activity that has not matured at June 30, 2017, is reported on the statement of net position under non—current liabilities. Liabilities relating to proprietary funds are recorded within those respective funds. Net Pension Liabilities For purposes of measuring the net pension liability, deferred outflows of resources, deferred inflows of resources, and pension expense related to pensions, information about the fiduciary net position of the San Bernardino County Employees' Retirement Association (SBCERA) and additions to/deductions from SBCERA's fiduciary net position have been determined on the same basis as they are reported by SBCERA. For this purpose, employer and employee contributions are recognized in the period the related salaries are earned and become measurable pursuant to formal commitments, statutory or contractual requirements, benefit payments (including refunds of employee contributions) are recognized when due and payable in accordance with the benefit terms, and investments are reported at fair value. 38 CITY OF CHINO HILLS NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2017 Note 1: Summary of Significant Accounting Policies (Continued) GASB 68 requires that the reported results must pertain to liability and asset information within certain defined timeframes. For this report, the following timeframes are used. Valuation Date (VD) June 30, 2015 Measurement Date (MD) June 30, 2016 Measurement Period (MP) July 1, 2015 to June 30, 2016 Long—Term Obligations In the government—wide financial statements and proprietary fund types in the fund financial statements, long—term debt and other long—term obligations are reported as liabilities in the applicable governmental activities, business—type activities, or proprietary fund type statement of net position. Bond premiums and discounts are deferred and amortized over the life of the bonds using the effective interest method. Bonds payable are reported net of the applicable bond premium or discount. Bond issuance costs are expensed in the year they are incurred. 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. Fund Equity The City Council adopted Resolution No. 11 R-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: Nonspendable include amounts that cannot be spent because they are either (a) not in spendable form or (b) legally or contractually required to be maintained intact. Restricted include amounts that are constrained on the use of resources by either (a) external creditors, grantors, contributors, or laws of regulations of other governments or (b) by law through constitutional provisions or enabling legislation. 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. 39 CITY OF CHINO HILLS NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2017 Note 1: Summary of Significant Accounting Policies (Continued) Unassigned include the residual amounts that have not been restricted, committed, or assigned to specific purposes. The General Fund is the only fund that reports a positive unassigned fund balance amount. 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. 11 R-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. Effect of New Accounting Standards During the fiscal year ended June 30, 2017, the City implemented the following Governmental Accounting Standards Board (GASB) standards: GASB Statement No. 77 — Tax Abatement Disclosures. This Statement establishes financial reporting standards for tax abatement agreements entered into by state and local governments. This Statement requires disclosure of tax abatement information about (1) a government's own tax abatement agreements and (2) those that are entered into by other governments and that reduce the government's tax revenues. The requirements of this Statement are effective for financial statements for reporting periods beginning after December 15, 2015. 40 CITY OF CHINO HILLS NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2017 II. STEWARDSHIP Note 2: Stewardship, Compliance and Accountability a. Budget Budget schedules are not presented for the Tree Mitigation Fund and Traffic Impact Fee Fund. III. DETAILED NOTES ON ALL FUNDS Note 3: Cash and Investments At June 30, 2017, cash and investments were reported in the accompanying financial statements as follows: Cash and investments as of June 30, 2017, consist of the following: Cash on hand $ 3,200 Deposits with financial institutions 4,517,377 Investments 213,825,095 Total Cash and Investments $ 218,345,672 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. 41 Governmental Business -type Fiduciary Activities Activities Funds Total Cash and Investments $ 99,990,691 $ 76,517,785 $ 27,672,732 $ 204,181,208 Restricted assets: Cash and Investments 5,261,106 - - 5,261,106 Cash with fiscal agent 368,388 1,861,864 6,673,106 8,903,358 Total Cash and Investments $ 105,620,185 $ 78,379,649 $ 34,345,838 $ 218,345,672 Cash and investments as of June 30, 2017, consist of the following: Cash on hand $ 3,200 Deposits with financial institutions 4,517,377 Investments 213,825,095 Total Cash and Investments $ 218,345,672 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. 41 CITY OF CHINO HILLS NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2017 Note 3: Cash and Investments (Continued) Deposits At June 30, 2017, the carrying amount of the City's deposits was $4,517,377 and the bank balance was $4,495,928. The $21,449 difference represents outstanding checks and other reconciling items. The California Government Code requires California banks and savings and loan associations to secure an Agency's deposits by pledging government securities with a value of 110% of an Agency's deposits. California law also allows financial institutions to secure Agency deposits by pledging first trust deed mortgage notes having a value of 150% of an Agency's total deposits. The City 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. 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) 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. 42 CITY OF CHINO HILLS NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2017 Note 3: Cash and Investments (Continued) 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. 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 City 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 City reports its investments at fair value in the balance sheet. All investment income, including changes in the fair value of investments, is recognized as revenue in the operating statement. Credit Risk The City's investment policy limits investments in medium—term notes (MTN's) to those rated "A" or higher by Standard and Poor's (S&P) or by Moody's. As of June 30, 2017, the City has $56,724,322 of investment in medium—term notes and asset-backed securities. Investments in U.S. government securities are not considered to have credit risk; therefore, their credit quality is not disclosed. As of June 30, 2017, the City's investments in external investment pools and money market mutual funds are unrated. The federal government agency are Aaa and AA+ and the US Corporate Notes are A3 to Aaa and A- to AAA, rated by Moody's and S&P, respectively. 43 CITY OF CHINO HILLS NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2017 Note 3: Cash and Investments (Continued) Custodial Credit Risk The custodial credit risk for deposits is the risk that in the event of the failure of a depository financial institution, a government will not be able to recover deposits or will not be able to recover collateral securities that are in the possession of an outside party. The custodial credit risk for investments is the risk that in the event of the failure of the counterparty to a transaction, a government will not be able to recover the value of investment or collateral securities that are in the possession of an outside party. As of June 30, 2017, none of the City's deposits or investments are exposed to custodial credit risk. Concentration of Credit Risk The City's investment policy imposes restrictions for certain types of investments with any one issuer. In accordance with GASB Statement No. 40, if the City has invested more than 5% of its investments in any one issuer, it is exposed to credit risk. Investments guaranteed by the U.S. government and investments in mutual funds and external investment pools are excluded from this requirement. Investments in any one issuer that represents 5% or more of the City's total investments as of June 30, 2017 are as follows: Issuer Federal National Mortgage Association Federal Home Loan Mortgage Corp Federal Home Loan Bank Interest Rate Risk Reported Percent of Investment Type Amount Investments Federal Government $ 26,802,197 13% Agency Federal Government 24,752,336 12% Agency Federal Government 15,626,393 7% Agency 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. 44 CITY OF CHINO HILLS NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2017 Note 3: Cash and Investments (Continued) As of June 30, 2017, 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 California Local Agency Investment Fund Money Market Mutual Funds Certificate of Deposit US Corporate Notes Tennessee Valley Authority US Treasury Notes FHLB FHLMC FNMA Restricted Cash -PARS Investment Held by Fiscal Agents: Money Market Mutual Funds $ 28,336,695 $ - $ - $ - $ 28,336,695 1,069,916 - - - 1,069,916 467,491 - - - 467,491 456,218 - - - 456,218 3,638,642 7,415,844 31,590,419 14,079,417 56,724,322 - - 2,573,056 - 2,573,056 - 3,179,616 16,523,891 23,148,500 42,852,007 - 4,796,640 2,508,500 8,321,253 15,626,393 - 3,142,442 18,497,286 3,112,608 24,752,336 - - 8,614,141 18,188,056 26,802,197 5,261,106 - - - 5,261,106 8,903,358 - - - 8,903,358 $ 48,133,426 $ 18,534,542 $ 80,307,293 $ 66,849,834 $ 213,825,095 Fair Value Measurement and Application The City categorizes its fair value measurements within the fair value hierarchy established by generally accepted accounting principles. The hierarchy is based on the valuation inputs used to measure the fair value of the asset. Level 1 inputs are quoted prices in active markets for identical assets; Level 2 inputs are significant other observable inputs; Level 3 inputs are significant unobservable inputs." The City has the following recurring fair value measurements as of June 30, 2017: Investments That Are Not Measured Level June 30, 2017 at Fair Value 1 2 Investment Type: US Treasury Federal Government Agency Medium -Term Corporate Notes Asset -Backed Securities Certificate of Deposit Money Market Funds LA County Investment Pool Local Agency Investment Fund Total Cash Investments Restricted Cash: PARS Investments with Fiscal Agents: Money Market Funds Total Investments with Fiscal Agent Total Investments $ 42,852,007 69,753,982 43,972,842 12,751,480 456,218 467,491 1,069,916 28,336,695 467,491 199,660,631 467,491 5,261,106 8,903,358 $ - $ 42,852,007 - 69,753,982 - 43,972,842 - 12,751,480 - 456,218 - 1,069,916 - 28,336,695 - 199,193,140 - 5,261,106 - 8,903,358 8,903,358 - - 8,903,358 $ 213,825,095 $ 467,491 $ - $ 213,357,604 45 CITY OF CHINO HILLS NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2017 Note 4: Interfund Receivable, Payable and Transfers The composition of interfund balances as of June 30, 2017 is as follows: Due To/From Other Funds Due To Other Funds Governmental Funds General Fund Landscape and Lighting District Solid Waste Other Governmental Funds Proprietary Funds Sewer Utility Total Due From Other Funds Governmental Funds Proprietary Funds General Fund Water Utility Sewer Utility Total $ - $ 4,240 $ - $ 4,240 - 22,614 - 22,614 74,052 6,837 2,279 83,168 33,295 - - 33,295 - 75 - 75 $ 107,347 $ 33,766 $ 2,279 $ 143,392 The General fund was owed $74,052 from the Solid Waste Fund for Utility accruals, and $33,295 from Other Governement Funds for temporary loans to cover negative cash balances. The Water Utility Fund and the Sewer Utility Fund are owed $33,766 and $2,279, respectively, for Utility accruals. Advances To/From Other Funds Advances From Other Funds Advances To Other Funds Governmental Proprietary Funds Funds General Fund Sewer Utility Total Governmental Funds Other Governmental Funds $ 166,149 $ 385,750 $ 551,899 Total $ 166,149 $ 385,750 $ 551,899 The General Fund advanced the Miscellaneous Grants Fund $166,149 to temporarily eliminate a deficit cash balance resulting from grant reimbursement timing differences. The Sewer Utility Fund advanced the Parkland Fees Fund $385,750 for the New Community Park project. ER CITY OF CHINO HILLS NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2017 Note 4: Interfund Receivable, Payable and Transfers (Continued) Interfund Transfers Transfers Out Governmental Funds Proprietary Funds Landscape and Water Sewer General Lighting Other Utility Utility Transfers In Fund District Governmental Fund Fund Total Governmental Funds General Fund $ - $ - $ 57,502 $ - $ - $ 57,502 Landscape and Lighting District 684,451 - - - - 684,451 Other Governmental Funds 237,944 21,784 3,866,351 379,848 325,247 4,831,174 Total $ 922,395 $ 21,784 $ 3,923,853 $ 379,848 $ 325,247 $ 5,573,127 The General Fund transferred $684,451 to the Landscape and Lighting District Fund for operational obligations and subsidies in various Landscape and Lighting Districts. Additionally, the General Fund transferred $237,944 to Other Governmental Funds (Capital Improvement Fund) for various capital improvement projects. The Landscape and Lighting District Fund transferred $21,784 to the Capital Improvement Fund for capital improvement projects. The Miscellaneous Grants Fund transferred $57,502 to the General Fund and $1,107,254 to the Measure I fund for grant related programs. The Other Governmental Funds transferred $2,759,097 to the Other Governmental Funds (Capital Improvement Fund) for various capital improvement projects. The Water and Sewer Utility Funds transferred a total of $705,095 to Other Governmental Funds (Capital Improvement Fund) for various capital improvement projects. 47 CITY OF CHINO HILLS NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2017 Note 5: Capital Assets Capital asset activity for the year ended June 30, 2017, was as follows: 48 Beginning Ending Balance Transfers Increases Decreases Balance Governmental activities: Capital assets, not being depreciated: Land $ 26,693,498 $ - $ - $ 2,501,584 $ 24,191,914 Construction -in -progress 13,849,972 (434,672) 1,624,865 2,149,974 12,890,191 Total capital assets, not being depreciated 40,543,470 (434,672) 1,624,865 4,651,558 37,082,105 Capital assets, being depreciated: Buildings 102,997,995 27,611 227,397 - 103,253,003 Structures other than buildings 31,981,020 - 562,767 - 32,543,787 Equipment 5,355,181 1,166,664 516,036 6,005,809 Vehicles 5,326,600 123,633 150,875 5,299,358 Irrigation - 300,741 - 300,741 Pipeline in service 217,375 - 217,375 Infrastructure 312,910,101 407,061 1,376,482 - 314,693,644 Total capital assets, being depreciated 458,788,272 434,672 3,757,684 666,911 462,313,717 Less accumulated depreciation: Buildings 18,827,947 - 2,257,301 - 21,085,248 Structures other than buildings 14,093,550 1,105,344 - 15,198,894 Equipment 3,448,986 508,949 507,416 3,450,519 Vehicles 4,464,302 278,745 150,875 4,592,172 Pipeline in service 63,039 4,347 - 67,386 Infrastructure 180,636,614 9,489,515 - 190,126,129 Total accumulated depreciation 221,534,438 - 13,644,201 658,291 234,520,348 Total capital assets, being depreciated, net 237,253,834 434,672 (9,886,517) 8,620 227,793,369 Governmental activities capital assets, net $ 277,797,304 $ - $ (8,261,652) $ 4,660,178 $ 264,875,474 48 CITY OF CHINO HILLS NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2017 Note 5: Capital Assets (Continued) Business -type activities: Capital assets, not being depreciated: Land Easements Construction -in -progress Total capital assets, not being depreciated Capital assets, being depreciated: Buildings and improvements Structure other than building Utility plant in service Pipeline in service Meters Equipment Intangible assets - utility rights Total capital assets, being depreciated Less accumulated depreciation: Buildings and improvements Structure other than building Utility plant in service Pipeline in service Meters Equipment Intangible assets - utility rights Total accumulated depreciation Total capital assets, being depreciated, net Business -type activities capital assets, net Beginning Ending Balance Transfers Increases Decreases Balance $ 3,395,256 $ - $ - $ - $ 3,395,256 537,940 - - - 537,940 4,310,954 (2,029,536) 712,599 25,809 2,968,208 8,244,150 (2,029,536) 712,599 25,809 6,901,404 1,042,550 - - - 1,042,550 290,234 - - - 290,234 36,026,336 - - - 36,026,336 138,627,258 2,029,536 - - 140,656,794 6,996,745 - 859,503 301,832 7,554,416 710,229 - 44,854 - 755,083 17,410,863 - - - 17,410,863 201,104,215 2,029,536 904,357 301,832 203,736,276 624,797 - 30,412 - 655,209 147,139 - 10,066 - 157,205 17,221,811 - 940,662 - 18,162,473 66,785,655 - 3,318,473 - 70,104,128 3,499,728 - 513,600 247,994 3,765,334 452,448 - 68,958 - 521,406 7,501,778 - 435,271 - 7,937,049 96,233,356 - 5,317,442 247,994 101,302,804 104,870,859 2,029,536 (4,413,085) 53,838 102,433,472 $ 113,115,009 $ - $ (3,700,486) $ 79,647 $ 109,334,876 Depreciation and amortization expense was charged to functions/programs of the primary government as follows: Governmental Activities General government $ 1,308,104 Community services 1,635,540 Community development 1,457 Public safety 269,283 Public works 9,795,808 Equipment maintenance 495,074 Information technology 138,935 $ 13,644,201 Business -Type Activities: Water utility $ 4,256,172 Sewer utility 1,061,270 $ 5,317,442 49 CITY OF CHINO HILLS NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2017 Note 6: Long -Term Debt a. Governmental Activities The following is a summary of changes in Long -Term Debt for the year ended June 30, 2017: Advances from developers Development fee program obligations Capital Lease obligations Equestrian Center lease Other post employment benefits obligations CJPIA General liability retrospective deposit payable CJPIA Workers' comp retrospective deposit payable Net pension liability Compensated absences Total " Beginning net position was adjusted to reflect the allocation of net pension liability to the Water and Sewer funds. Long-term debt repayments per governmental funds financial statements Forgiveness of loans Other post employment benefits obligations payments Net pension liability CJPIA general liability restrospective deposit payable CJPIA worker's compensation retrospective deposit payable Compensated absences payouts Capital lease obligations reported in the internal service funds Total Deletions per Changes in Long -Term Debt Schedule 50 $ 1,899,997 316,095 10,240 3,340,843 343,150 151,069 81,654 9,274 $ 6,152,322 Adjusted Balance at Beginning Balance at Due Within July 1, 2016 Adjustments Balance Additions Deletions June 30, 2017 One Year $ 2,045,626 $ $ 2,045,626 $ - $ - $ 2,045,626 $ 18,275,018 18,275,018 265,987 2,216,091 16,324,914 9,274 9,274 - 9,274 - - 6 6 1 5 1 907,230 907,230 159,647 10,240 1,056,637 - 1,260,533 1,260,533 154,840 343,150 1,072,223 343,150 151,069 151,069 - 151,069 - - 23,926,493 (5,147,925) " 18,778,568 7,658,368 3,340,843 23,096,093 - 921,219 921,219 118,766 81,654 958,331 186,773 47,496,468 $ (5,147,925) $ 42,348,543 $ 8,357,608 $ 6,152,322 44,553,829 $ 529,924 " Beginning net position was adjusted to reflect the allocation of net pension liability to the Water and Sewer funds. Long-term debt repayments per governmental funds financial statements Forgiveness of loans Other post employment benefits obligations payments Net pension liability CJPIA general liability restrospective deposit payable CJPIA worker's compensation retrospective deposit payable Compensated absences payouts Capital lease obligations reported in the internal service funds Total Deletions per Changes in Long -Term Debt Schedule 50 $ 1,899,997 316,095 10,240 3,340,843 343,150 151,069 81,654 9,274 $ 6,152,322 CITY OF CHINO HILLS NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2017 Note 6: Long -Term Debt (Continued) 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. $ 2,045,626 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, 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. There is no fixed repayment schedule. $ 16,324,914 Capital Lease Obligations The City entered into a five year lease purchase agreement in fiscal year 2011-2012 for copiers. The assets acquired and the related obligation are reported in the Information Technology internal service fund. The final payment was made in May 2017. 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. Other Post Employment Benefits Obligations The City's other post employment benefits obligations are described in Note 8 of the Notes to Financial Statements. This liability will be paid in future years from the General Fund. 51 $ 5 $1,056,637 CITY OF CHINO HILLS NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2017 Note 6: Long -Term Debt (Continued) California Joint Powers Insurance Authority General Liability and Workers' Comp Retrospective Deposit Payable 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. The City is currently paying the Liability program retrospective deposit due in installments over a 6 year period. In fiscal year 2016-17 the City paid the fourth installment in the amount of $343,150. 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. More information on the CJPIA retrospective balances can be found on the CJPIA website at CJPIA.org. The balance due for the general liability retrospective deposit payable was $ 1,072,223 Liability for the workers' compensation retrospective deposit payable was paid in full in fiscal year 2016-17. During the fiscal year the City's annual computation resulted in a refund in the amount of $170,098. The balance is reported as a receivable in the Statement of Net Position. Net Pension Liability The City's policies relating to net pension liability are described in Note 7 of the Notes to Financial Statements. The beginning balance was adjusted in fiscal year 2016-17 to allocate the portion of net pension liability to the Water and Sewer Funds, totalling $5,147,925. $ 23,096,093 52 CITY OF CHINO HILLS NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2017 Note 6: Long -Term Debt (Continued) 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. $ 958,331 b. Business Type Activities The following is a summary of changes in Proprietary Funds debt for the year ended June 30, 2017: Water Revenue Bonds On December 18, 2012, the City issued $19,975,000 in Water Revenue Bonds to advance refund the $9,205,000 of outstanding 2002 Certificates of Participation and $8,190,000 of 2003 Certificates of Participation and for acquisition of certain water improvements. The bonds consist of serial bonds maturing in principal amounts ranging from $555,000 to $1,860,000 beginning June 2013 through June 2030, with interest rates ranging from 1.50% to 4.00%. The bonds also include term bonds due June 1, 2032 of $1,430,000 and an interest rate of 3.00%. Proceeds of $17,635,146 were used to purchase U.S. government securities. Those securities were deposited in an irrevocable trust with an escrow agent to provide for all future debt service payments on the 1984 Series bonds. As a result, the 2002 and 2003 Certificates of Participation are considered to be defeased and the liability for those bonds has been removed from the government - wide statement of net position. The advance refunding resulted in a difference between the reacquisition price and the net carrying amount of the old debt of $958,631. This difference, reported in the accompanying financial statements as a deferred charge on refunding, is being charged to operations through the year 2032. The City completed the advance refunding to reduce its total debt service payments over the next 20 years by $4,060,363 and to obtain an economic gain (difference between the present values of the old and new debt service payments) of $3,436,837. $ 11,905,000 53 Balance at Balance at Due Within July 1, 2016 Adjustments Additions Deletions June 30, 2017 One Year Revenue bonds $ 13,695,000 $ - $ - $ 1,790,000 $ 11,905,000 $ 1,860,000 Net Pension Liability - 5,147,925 2,040,995 880,730 6,308,190 - Compensated absences 329,759 - 44,040 16,480 357,319 6,500 Total 14,024,759 $ 5,147,925 $ 2,085,035 $ 2,687,210 18,570,509 $ 1,866,500 Unamortized bond premium 1,474,312 - $ - $ 92,144 1,382,168 Total Long -Term Debt $ 15,499,071 $ 19,952,677 Water Revenue Bonds On December 18, 2012, the City issued $19,975,000 in Water Revenue Bonds to advance refund the $9,205,000 of outstanding 2002 Certificates of Participation and $8,190,000 of 2003 Certificates of Participation and for acquisition of certain water improvements. The bonds consist of serial bonds maturing in principal amounts ranging from $555,000 to $1,860,000 beginning June 2013 through June 2030, with interest rates ranging from 1.50% to 4.00%. The bonds also include term bonds due June 1, 2032 of $1,430,000 and an interest rate of 3.00%. Proceeds of $17,635,146 were used to purchase U.S. government securities. Those securities were deposited in an irrevocable trust with an escrow agent to provide for all future debt service payments on the 1984 Series bonds. As a result, the 2002 and 2003 Certificates of Participation are considered to be defeased and the liability for those bonds has been removed from the government - wide statement of net position. The advance refunding resulted in a difference between the reacquisition price and the net carrying amount of the old debt of $958,631. This difference, reported in the accompanying financial statements as a deferred charge on refunding, is being charged to operations through the year 2032. The City completed the advance refunding to reduce its total debt service payments over the next 20 years by $4,060,363 and to obtain an economic gain (difference between the present values of the old and new debt service payments) of $3,436,837. $ 11,905,000 53 CITY OF CHINO HILLS NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2017 Note 6: Long -Term Debt (Continued) The annual requirements to amortize the Water Revenue Bond outstanding as of June 30, 2017 were as follows: Year ending June 30, 2018 2019 2020 2021 2022 2022-2027 2027-2032 Principal $1,860,000 905,000 915,000 940,000 970,000 2,910,000 3,405,000 Interest $379,150 304,750 291,175 277,450 239,850 812,650 313,050 Totals $ 11,905,000 $ 2,618,075 Pledged Revenues The City has pledged income derived from the fees and charges to users of the enterprise operation of the water system, net of operating expenses, to pay debt service on revenue bonds. The City pledged $19,975,000 in utility revenues through the term of the commitment which concludes on June 1, 2032. The percent of the revenue pledged is 100%. The 2016-17 principal and interest for the revenue bonds was $2,240,750 and the pledged revenues recognized for at June 30, 2017 was $2,240,750. The outstanding principal and interest amounts of the revenue bonds at June 30, 2017 was $11,905,000 and $2,618,075, respectively. A reserve fund in the amount of $1,120,375 was established with a fiscal agent for benefit of the City and as security for the bond owners. Since the City is not at -risk for the installment sale payments and the bonds are to be repaid from resources generated by the Water Enterprise Fund, the bonds are recorded as long-term debt in the Water Enterprise Fund. Net Pension Liability The City's policies relating to net pension liability are described in Note 7 of the Notes to Financial Statements. The beginning balance was adjusted in fiscal year 2016-17 to allocate the portion of net pension liability to the water and sewer funds, totalling $5,147,925. The balance as of June 30, 2017 was $ 6,308,189 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. $ 357,319 54 CITY OF CHINO HILLS NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2017 Note 6: Long -Term Debt (Continued) 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, 2017, is $43,195,000. The debt outstanding at June 30, 2017, consists of the following individual issues: 2006 $49,660,000 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% additionally, $1,295,000 term bonds due September 1, 2030; interest rates varying from 4.400% to 4.5000%. $ 19,035,000 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%. $ 9,890,000 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%. $ 2,310,000 Reassessment 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%. $ 1,290,000 2015 $11,195,000 Community Facilities District Bond Program, Series C prepaid the City's 2007 Civic Center Certificates of Participation. The serial bonds are due in annual installments of $465,000 to $750,000 through September 1, 2030; interest ranging 2.00% to 5.00% additionally, $1,375,000 term bonds due September 1, 2028, $1,260,000 term bonds due September 1, 2032, and $895,000 term bonds due September 1, 2034, with interest rates rate of 5.00%. $ 10,670,000 55 CITY OF CHINO HILLS NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2017 Note 7: Pension Plan Defined Benefit Pension Plans a. San Bernardino County Employees' Retirement Association Plan Description The City participates in the San Bernardino County Employees' Retirement Association (SBCERA) pension plan - a cost-sharing multiple -employer defined benefit pension plan (the Plan). SBCERA administers the Plan which provides benefits for two membership classifications, General and Safety, and those benefits are tiered based upon date of SBCERA membership. The City of Chino Hills members are classified as General members. Generally, those who became members prior to January 1, 2013 are Tier 1 members. All other members are Tier 2. An employee who is appointed to a regular position, whose service is greater than fifty percent of the full standard of hours required are members of SBCERA, and are provided with pension benefits pursuant to Plan requirements. Tier 1 is closed to new entrants. The Plan operates under the provisions of the California County Employees' Retirement Law of 1937 (CERL), the California Public Employees' Pension Reform Act of 2013 (PEPRA), and the regulations, procedures and policies adopted by SBCERA's Board of Retirement (Board). The Plan's authority to establish and amend the benefit terms are set by the CERL and PEPRA, and may be amended by the California state legislature and in some cases require approval by the County of San Bernardino Board of Supervisors and/or the SBCERA Board. SBCERA is a tax qualified plan under Section 401 (a) of the Internal Revenue Code. SBCERA is a legally separate entity from the City, not a component unit, and there is no financial interdependency with the County of San Bernardino. For these reasons, the City's comprehensive annual financial report excludes the SBCERA pension plan as of June 30, 2017. SBCERA publishes its own comprehensive annual financial report that includes its financial statements and required supplementary information, that can be obtained by writing SBCERA at, 348 W. Hospitality Lane, Third Floor, San Bernardino, CA 92415-0014 or visiting the website at: www.SBCERA.org. Benefits Provided SBCERA provides retirement, disability, death and survivor benefits. The CERL and PEPRA establish benefit terms. Retirement benefits are calculated on the basis of age, average final compensation and service credit as follows: CITY OF CHINO HILLS NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2017 Note 7: Pension Plan (Continued) General - Tier 1 General - Tier 2 Final Average Compensation Highest 12 months Highest 36 months Normal Retirement Age Age 55 Age 55 Early Retirement: Years of Age 70 any years Age 70 any years service required and/or age 10 years age 50 5 years age 52 eligible for 30 years any age N/A Benefit percent per year of 2.0% per year of final 3.0% per year of final service for normal retirement age average compensation for average compensation for every year of service credit every year of service credit Reduced before age 55, Benefit adjustments increased after 55 up to Reduce before age 67 age 65 Final Average Compensation Internal Revenue Code Government Code 7522.10 Limitation section 401(a)(17) Required employee contribution rates 7.07% - 13.52% 6.37% - 7.88% Required employer contribution rates 33.31% 29.77% An automatic cost of living adjustment is provided to benefit recipients based on changes in the local region Consumer Price Index (CPI) up to a maximum of 2% per year. Any increase greater than 2% is banked and may be used in years where the CPI is less than 2%. There is a one-time 7% increase at retirement for members hired before August 19, 1975. The Plan also provides disability and death benefits to eligible members and their beneficiaries, respectively. For retired members, the death benefit is determined by the retirement benefit option chosen. For all other members, the beneficiary is entitled to benefits based on the members years of service or if the death was caused by employment. General members are also eligible for survivor benefits which are payable upon a member's death. Contributions The City and active members are required by statute to contribute a percentage of covered salary to the Plan. This requirement is pursuant to Government Code sections 31453.5 and 31454, for participating employers and Government Code sections 31621.6, 31639.25 and 7522.30 for active members. The contribution requirements are established and may be amended by the SBCERA Board pursuant to Article 1 of the CERL, which is consistent with the Plan's actuarial funding policy. The contribution rates are adopted yearly, based on an annual actuarial valuation, conducted by an independent actuary, that requires actuarial assumptions with regard to mortality, expected future service (including age at entry into the Plan, if applicable and tier), and compensation increases of the members and beneficiaries. The combined active member and employer contribution rates are expected to 57 CITY OF CHINO HILLS NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2017 Note 7: Pension Plan (Continued) finance the costs of benefits for employees that are allocated during the year, with an additional amount to finance any unfunded accrued liability. The City may pay a portion of the active members' contributions through negotiations and bargaining agreements. The required employer contributions and the amount paid to SBCERA by the City for the year ended June 30, 2017 were $5,375,200. The City's employer contributions were equal to the required employer contributions for the year ended June 30, 2017. Pension Liability At June 30, 2017, City reported a net pension liability of $29,404,284 for its proportionate share of the SBCERA's net pension liability. The net pension liability was measured as of June 30, 2016, and the total pension liability used to calculate the net pension liability was determined by an actuarial valuation as of June 30, 2016. The SBCERA's publicly available financial report provides details on the change in the net pension liability. The City's proportion of the net pension liability was based on the City's contributions received by SBCERA during the measurement period for employer payroll paid dates from July 1, 2015 through June 30, 2016, relative to the total employer contributions received from all of SBCERA's participating employers. At June 30, 2016, the City's proportion was 1.191 %. Pension Expense and Deferred Outflows/Inflows of Resources For the year ended June 30, 2017, the City recognized pension expense of $3,894,648 for its proportionate share of SBCERA's pension expense. At June 30, 2017, the City reported its proportionate share of deferred outflows of resources and deferred inflows of resources related to pensions, from the following sources: 58 CITY OF CHINO HILLS NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2017 Note 7: Pension Plan (Continued) The $5,375,200 reported as deferred outflows of resources related to pensions resulting from City contributions to SBCERA subsequent to the measurement date will be recognized as a reduction of the net pension liability in the year ended June 30, 2017. Other amounts reported as deferred outflows of resources and deferred inflows of resources related to SBCERA pensions will be recognized in pension expense as follows: Year ended June 30 Deferred Outflows Deferred Inflows 438,826 of Resources of Resources Difference between expected and actual 2,054,519 2021 experience $ - $ 4,451,615 Changes of assumptions 2,030,491 - Net difference between projected and actual investment earnings on pension plan investments 6,369,599 - Changes in proportions 1,469,944 2,286,855 Difference between proportionate share and actual contributions 1,473,610 - Employer contributions paid to SBCERA subsequent to the measurement date 5,375,200 - Total $ 16,718,844 $ 6,738,470 The $5,375,200 reported as deferred outflows of resources related to pensions resulting from City contributions to SBCERA subsequent to the measurement date will be recognized as a reduction of the net pension liability in the year ended June 30, 2017. Other amounts reported as deferred outflows of resources and deferred inflows of resources related to SBCERA pensions will be recognized in pension expense as follows: Year ended June 30 2018 $ 438,826 2019 1,470, 840 2020 2,054,519 2021 1,076,553 2022 (377,298) Thereafter (58,266) $ 4,605,174 59 CITY OF CHINO HILLS NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2017 Note 7: Pension Plan (Continued) Actuarial assumptions and methods The significant actuarial assumptions and methods used to measure the total pension liability are as follows: Actuarial valuation date Actuarial cost method Amortization method Investment rate of return Inflation Projected salary increases Administrative expenses June 30, 2016 Entry age normal Level percent of payroll (3.75% payroll growth assumed) 7.5% 3.25% General: 4.60% to 13.75%; Safety: 4.55% to 13.75% 0.60% of payroll For General and Safety employees post-retirement mortality is based on the RP -2000 Combined Healthy Mortality Tables projected with Scale BB to 2020. The actuarial assumptions used in the June 30, 2016 valuation were based on the results of an actuarial experience study for the three year period of July 1, 2010 – June 30, 2013. The June 30, 2016 actuarial valuation reflected new assumptions compared to the June 30, 2015 actuarial valuation, based on the June 30, 2016 experience study. The long-term expected rate of return on pension plan investments is 7.50%. SBCERA's actuary prepares an analysis of the long-term expected rate of return on a triennial basis using a building-block method in which expected future real rates of return (expected returns, net of inflation) are developed for each major asset class. These returns are combined to produce the long-term expected rate of return by weighting the expected future real rates of return by the target asset allocation percentage by adding expected inflation and subtracting expected investment expenses and a risk margin. The target allocations (approved by the SBCERA Board) and projected arithmetic real rates of return for each major asset class, after deducting inflation, but before deducting investment expenses, used in the derivation of the long term expected investment rate of return assumptions are summarized in the following table: l- CITY OF CHINO HILLS NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2017 Note 7: Pension Plan (Continued) SBCERA's Long -Term Expected Real Rate of Return Discount Rate The discount rate used to measure the total pension liability was 7.50%. The projection of cash flows used to determine the discount rate assumed that employee and employer contributions will be made based on the actuarially determined rates based on the SBCERA Board's funding policy, which establishes the contractually required rate based on statute. Based on those assumptions, the pension plan's fiduciary net position was projected to be available to make all projected future benefit payments of current active and inactive plan members. Therefore, the long-term expected rate of return on pension plan investments was applied to all periods of projected benefit payments to determine the total pension liability. For the actuarial valuation date of June 30, 2016, the discount rate used to measure the total pension liability as of the year ended June 30, 2016 was 7.5%. Sensitivity of the City's proportionate share of the SBCERA net pension liability to changes in the discount rate. The following table presents the City's proportionate share of the net pension liability calculated using the discount rate of 7.50%, as well as what the City's proportionate share of the net pension liability would be if it were calculated using a discount rate that is 1 -percentage -point lower (6.50%) or 1 -percentage -point higher (8.50%) than the current rate: 61 As of June 30, 2016 Valuation Date Long -Term Expected Real Target Rate of Return Asset Class Allocation (Arithmetic) Large Cap U.S. Equity 5.00% 5.94% Small Cap U.S. Equity 2.00% 6.50% Developed International Equity 6.00% 6.87% Emerging Market Equity 6.00% 8.06% U.S. Core Fixed Income 2.00% 0.69% High Yield/Credit Strategies 13.00% 3.10% Global Core Fixed Income 1.00% 0.30% Emerging Market Debt 6.00% 4.16% Real Estate 9.00% 4.96% Cash & Equivalents 2.00% -0.30% International Credit 10.00% 6.76% Absolute Return 13.00% 2.88% Real Assets 6.00% 6.85% Long/Short Equity 3.00% 4.86% Private Equity 16.00% 9.64% Total 100.00% Discount Rate The discount rate used to measure the total pension liability was 7.50%. The projection of cash flows used to determine the discount rate assumed that employee and employer contributions will be made based on the actuarially determined rates based on the SBCERA Board's funding policy, which establishes the contractually required rate based on statute. Based on those assumptions, the pension plan's fiduciary net position was projected to be available to make all projected future benefit payments of current active and inactive plan members. Therefore, the long-term expected rate of return on pension plan investments was applied to all periods of projected benefit payments to determine the total pension liability. For the actuarial valuation date of June 30, 2016, the discount rate used to measure the total pension liability as of the year ended June 30, 2016 was 7.5%. Sensitivity of the City's proportionate share of the SBCERA net pension liability to changes in the discount rate. The following table presents the City's proportionate share of the net pension liability calculated using the discount rate of 7.50%, as well as what the City's proportionate share of the net pension liability would be if it were calculated using a discount rate that is 1 -percentage -point lower (6.50%) or 1 -percentage -point higher (8.50%) than the current rate: 61 CITY OF CHINO HILLS NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2017 Note 7: Pension Plan (Continued) Sensitivity of Net Pension Liability to Changes in the Discount Rate 1.00% Current 1.00% Decrease Discount Rate Increase June 30, 2017 6.50% 7.50% 8.50% City's proportionate share of net pension liability $ 41,489,149 $ 29,404,284 $ 19,390,102 Pension Pian Fiduciary Net Position Detailed information about the SBCERA's fiduciary net position is available in a separately issued SBCERA comprehensive annual financial report. That report may be obtained on the Internet at www.SBCERA.org; by writing to SBCERA at 348 W. Hospitality Lane, Third Floor, San Bernardino, CA 92415; or by calling (909) 885-7980 or (877) 722-3721. Note 8: 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 $118.75 per month for the months in 2016 and $128.00 per month for the months in 2017. 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, the Water Utility Fund and the Equipment Maintenance Fund as they are due with no pre -funding for future years. For fiscal year 2016-2017, the City paid $10,240 for benefits of 15 retired employees. C CITY OF CHINO HILLS NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2017 Note 8: Other Post -Employment Employee Benefits (Continued) 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: Annual required contribution (ARC) Interest on net OPEB obligation Adjustment to ARC Annual OPEB cost (expense) Contribution made Increase in net OPEB obligation Net OPEB obligation - July 1, 2016 Net OPEB obligation - June 30, 2017 Retiree Healthcare Plan $ 222,402 15,877 (78,632) 159,647 10,240 149,407 907,230 $ 1,056,637 The City's annual OPEB cost, the percentage of annual OPEB cost contributed to the plan, and the net OPEB obligation for the 2016-2017 fiscal year and the two preceding years were as follows: 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 represents multiyear trend information about whether the actuarial value of plan assets is increasing or decreasing over time relative to the actuarial accrued liabilities or benefits. 63 Percentage of Fiscal Year Annual Annual OPEB Net OPEB Ended OPEB Cost Cost Contributed Obligation 06/30/15 $ 123,842 15.21% $ 814,172 06/30/16 106,231 11.71% 907,230 06/30/17 159,647 15.11% 1,056,637 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 represents multiyear trend information about whether the actuarial value of plan assets is increasing or decreasing over time relative to the actuarial accrued liabilities or benefits. 63 CITY OF CHINO HILLS NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2017 Note 8: Other Post -Employment Employee Benefits (Continued) Schedule of Funding Progress for OPEB (Amount in Thousands) 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 July 1, 2017, 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 2.75%, and an annual aggregate payroll increase of 2.75%. 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 UAAL is amortized over an open 20 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 15 retiree receiving benefits. Note 9: 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 117 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. Actuarial Accrued UAAL as Actuarial Actuarial Liability Unfunded a % of Valuation Valuation of (AAL) Entry AAL Funded Covered Covered date Assets Age (UAAL) Ratio Payroll Payroll 06/15/2012 $ - $ 1,160 $ 1,160 0.0% $ 10,595 10.9% 05/01/2015 - 1,498 1,498 0.0% 11,999 12.5% 07/01/2017 - 2,069 2,069 0.0% 13,185 15.7% 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 July 1, 2017, 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 2.75%, and an annual aggregate payroll increase of 2.75%. 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 UAAL is amortized over an open 20 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 15 retiree receiving benefits. Note 9: 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 117 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. CITY OF CHINO HILLS NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2017 Note 9: Liability, Property and Workers' Compensation Protection (Continued) b. Self -Insurance Programs of the Authority Each member pays an annual contribution at the beginning of the coverage period. A retrospective adjustment is then conducted annually thereafter, for coverage years 2012- 13 and prior. Coverage years 2013-14 and forward are not subject to routine annual retrospective adjustment. The total funding requirement for self-insurance programs is based on an actuarial analysis. Costs are allocated to individual agencies based on payroll and claims history, relative to other members of the risk -sharing pool. Primary Liability Program Claims are pooled separately between police and general government exposures. (1) The payroll of each member is evaluated relative to the payroll of other members. A variable credibility factor is determined for each member, which establishes the weight applied to payroll and the weight applied to losses within the formula. (2) The first layer of losses includes incurred costs up to $30,000 for each occurrence and is evaluated as a percentage of the pool's total incurred costs within the first layer. (3) The second layer of losses includes incurred costs from $30,000 to $750,000 for each occurrence and is evaluated as a percentage of the pool's total incurred costs within the second layer. (4) Incurred costs from $750,000 to $50 million, are distributed based on the outcome of cost allocation within the first and second loss layers. For 2016-17 the Authority's pooled retention is $2 million per occurrence, with reinsurance to $20 million, and excess insurance to $50 million. The Authority's reinsurance contracts are subject to the following additional pooled retentions: (a) $2.5 million annual aggregate deductible in the $3 million in excess of $2 million layer, and (b) $3 million annual aggregate deductible in the $5 million in excess of $10 million layer. There is a third annual aggregate deductible in the amount of $2.5 million in the $5 million in excess of $5 million layer, however it is fully covered under a separate policy and therefore not retained by the Authority. The overall coverage limit for each member, including all layers of coverage, is $50 million per occurrence. Costs of covered claims for subsidence losses have a sub -limit of $30 million per occurrence. Workers' Compensation Program Claims are pooled separately between public safety (police and fire) and general government exposures. (1) The payroll of each member is evaluated relative to the payroll of other members. A variable credibility factor is determined for each member, which establishes the weight applied to payroll and the weight applied to losses within the formula. (2) The first layer of losses includes incurred costs up to $50,000 for each occurrence and is evaluated as a percentage of the pool's total incurred costs within the first layer. (3) The second layer of losses includes incurred costs from $50,000 to $100,000 for each occurrence and is evaluated as a percentage of the pool's total incurred costs within the second layer. (4) Incurred costs from $100,000 to statutory limits are distributed based on the outcome of cost allocation within the first and second loss layers. C-9 CITY OF CHINO HILLS NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2017 Note 9: Liability, Property and Workers' Compensation Protection (Continued) For 2016-17 the Authority's pooled retention is $2 million per occurrence, with reinsurance to statutory limits under California Workers' Compensation Law. Employer's Liability losses are pooled among members to $2 million. Coverage from $2 million to $5 million is purchased as part of a reinsurance policy, and Employer's Liability losses from $5 million to $10 million are pooled among members. c. Purchased Insurance Pollution Legal Liability Insurance The City of Chino Hills participates in the pollution legal liability insurance program which is available through the Authority. The policy covers sudden and gradual pollution of scheduled property, streets, and storm drains owned by the City of Chino Hills. Coverage is on a claims -made basis. There is a $50,000 deductible. The Authority has an aggregate limit of $50 million for the 3 -year period from July 1, 2014 through July 1, 2017. Each member of the Authority has a $10 million sub -limit during the 3 -year policy term. 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 $121,519,367. There is a $5,000 deductible per occurrence except for non -emergency vehicle insurance which has a $2,500 deductible. 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. 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 2016-17. .: CITY OF CHINO HILLS NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2017 Note 10: 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 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 County of San Bernardino 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. 2. A general plan initiative was passed by City residents in November 1999, which removed the City Council's ability to increase residential density zoning except under specific circumstances. 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. 67 CITY OF CHINO HILLS NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2017 Note 11: 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 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, 2017 was $3,264,493. I- CITY OF CHINO HILLS NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2017 Note 11: Joint Venture (Continued) Audited financial information of the Authority for the fiscal year ended June 30, 2017 was summarized as follows: Water Facilities Authority Net Position Total assets $ 30,086,807 Deferred outflow of resources 6,656,906 380,121 Total liabilities 34.62% (5,133,190) Deferred inflow of resources 117,703 (68,899) Total Net Position $ 25,264,839 Water Facilities Authority Changes in Net Position: Operating revenues $ 16,944,966 Operating expenses (16,900,283) Operating loss before depreciation and amortization 44,683 Depreciation and amortization (1,115,295) Operating revenue (loss) (1,070,612) Nonoperating revenues (expenses) 1,214,876 Capital contributions 372,746 Change in Net Position 517,010 Beginning Net Position 24,747,829 Ending Net Position $ 25,264,839 The participants and their audited financial contributions through June 30, 2017 were as follows: City of Chino Hills Monte Vista Water District City of Chino City of Ontario City of Upland Non -Participants Total Amount Percent $ 5,422,174 12.92% 6,836,261 16.30% 6,656,906 15.86% 14,529,089 34.62% 8,401,611 20.02% 117,703 0.28% $ 41,963,744 100.00% 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 CITY OF CHINO HILLS NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2017 Note 11: Joint Venture (Continued) 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, 2017, the value of the City's investment in the Authority was $31,348,515. On June 22, 2016, the Chino Basin Desalter Authority issued the Desalter Revenue Refunding Bonds, Series 2016A in the amount of $67,105,000 to refund the Desalter Revenue Refunding Bonds, Series 2008A. 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, 2017 is summarized as follows: Chino Basin Desalter Authority Net Position: Total assets Deferred outflows of resources Total liabilities Total Net Position Chino Basin Desalter Authority Changes in Net Position: Operating revenues Operating expenses Operating gain before depreciation and amortization Depreciation and amortization Operating revenue (loss) Nonoperating revenues (expenses) Income (loss) before transfers and contributions Contributions Capital grants Change in Net Position Beginning Net Position Ending Net Position 70 $ 311,839,413 4,575,503 (120,918,018) $ 195,496,898 $ 38,098,746 (34,264,416) 3,834,330 (4,052,636) (218,306) (1,397,802) (1,616,108) 10,913,765 200,318 9,497,975 185,998,923 $ 195,496,898 CITY OF CHINO HILLS NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2017 Note 11: Joint Venture (Continued) The participants' contributions through June 30, 2017 were as follows: JCSD City of Chino Hills City of Chino City of Norco City of Ontario Santa Ana River Co. Western Municipal Water District Total Amount Percent $ 8,308,575 36.60% 189,223 3,699,455 16.29% 163,813 4,403,254 19.39% - 881,752 3.88% 18,100 4,224,502 18.61% $ 1,369,879 1,054,698 4.65% 130,920 0.58%- $ 22,703,156 100.00% Financial statements of the Authority can be obtained from the CDA Treasurer's office located at 2151 Haven Avenue, Suite 202, Ontario, CA 91761. Note 12: Other Commitments The City has active projects as of June 30, 2017. The projects include signals, streets and drainage, bridges, trails, landscapes and facilities. At fiscal year end, the City's encumbrances with contractors were as follows: Capital Improvements Fund: Buildings Improvements Other than Buildings Information Technology Streets Facilities Sanitary Sewer Lines & Facilities Water Lines and Mains Water Supply Facilities Total Note 13: Tax Abatements Remaining Spent -to -date Commitment $ 19,358 $ 5,542 189,223 63,177 105,188 163,813 814,059 405,387 - 58,508 153,700 18,100 88,351 185,281 $ 1,369,879 $ 899,808 In prior years, the City entered into property tax abatement agreements with local businesses. The abatements may be granted to any business located within or promising to relocate to the City. For the fiscal year ended June 30, 2017, the City abated property taxes totaling $288,392 under this program, the City has the following tax abatement agreements: • A property tax abatement to a hardware store for purchasing land and opening a store within the City's limits which would provide employment to Chino Hills residents. In fiscal year 2016-17 the abatement amounted to $28,756. • A 50 percent property tax reduction for a Water Supply company purchasing a building within the City. In fiscal year 2016-17 the abatement amounted to $259,636. 71 CITY OF CHINO HILLS NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2017 Note 14: Net Position Restatement The beginning net position of governmental activities in the Statement of Activities has been restated by $3,955,066 to remove the portion of the Net Pension Liability which should have been allocated to the Water Utility and Sewer Utility proprietary funds in prior years. The Net Position restatement in these funds totaled $3,200,846 and $1,230,899, respectively. Note 15: Fund Balances Fund Balance Classifications At June 30, 2017, the City reports the following fund balance classifications: Landscape Existing Other Total and Lighting Infrastructure Governmental Governmental General District Fees Funds Funds Fund Balances Nonspendable Long-term receivables $ 19,845 $ $ $ $ 19,845 Advances to other funds 166,149 166,149 Restricted Community development projects - 2,245,434 2,245,434 Public safety 31,561 31,561 Public works 4,703,710 954,197 5,657,907 Landscape & lighting projects & related administrative costs 2,740,523 - - 2,740,523 General facilities projects & related administrative costs - 3,950,821 3,950,821 Parkland projects & related administrative costs 2,481,959 2,481,959 Sewer facilities projects & related administrative costs 4,557,554 4,557,554 Storm drain projects & related administrative costs 6,784,600 6,784,600 Traffic facilities projects & related administrative costs 2,705,323 2,705,323 Water facilities projects & related administrative costs 14,693,343 14,693,343 Capital projects 1,618,950 10,037,938 11,656,888 Line of credit 456,218 - 456,218 Committed Emergencies and contingencies 12,060,340 12,060,340 Cash flow contingency 5,900,000 5,900,000 Stabilization Fund 1,110,700 1,110,700 PARS trust for pensions 5,261,106 5,261,106 Assigned General government 733,106 733,106 CIP special projects 2,024,302 2,024,302 Unassigned 14,103,222 14,103,222 Total Fund Balances $ 43,453,938 $ 2,740,523 $ 4,703,710 $ 48,442,730 $ 99,340,901 72 CITY OF CHINO HILLS cdd�aLN 25 YEARS OF EXCELLENCE Required Supplementary Information i (.rhino Hills This page intentionally left blank. CITY OF CHINO HILLS NOTES TO REQUIRED SUPPLEMENTARY INFORMATION JUNE 30, 2017 Note 1: 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 appropriate from reserves for each expenditure line item or capital improvement project, not exceeding $25,000 per transaction. The total of appropriations by the City Manager from General Fund reserves may not exceed $100,000 in a fiscal year. Any appropriations from reserves for each expenditure line item or capital improvement project exceeding $25,000 per transaction must be approved by the City Council. The City Manager is authorized to transfer appropriations within a department within a fund or between departments within a fund without limitation. All appropriations from reserves and all appropriation transfers are subject to funding eligibility requirements. 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 budgeted in the following fiscal year. 73 CITY OF CHINO HILLS BUDGETARY COMPARISON SCHEDULE GENERALFUND YEAR ENDED JUNE 30, 2017 74 Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) Budgetary Fund Balance, July 1 $26,955,496 $ 26,955,496 $26,955,496 $ - Resources (Inflows): Taxes 24,156,300 24,315,600 24,012,500 (303,100) Licenses and permits 4,657,400 4,657,400 3,626,145 (1,031,255) Intergovernmental 31,300 31,300 52,594 21,294 Charges for services 15,186,200 15,186,200 14,873,141 (313,059) Use of money and property 1,059,300 1,059,300 780,117 (279,183) Fines and forfeitures 489,200 489,200 429,469 (59,731) Contributions 3,800 53,800 5,021 (48,779) Miscellaneous 347,700 812,000 2,226,914 1,414,914 Transfers in 106,840 296,340 57,502 (238,838) Proceeds from sale of capital asset - 11,583,900 11,583,895 (5) Amounts Available for Appropriations 72,993,536 85,440,536 84,602,794 (837,742) Charges to Appropriation (Outflow): General government City council 283,200 292,000 291,973 27 City manager 2,509,500 2,632,500 1,903,076 729,424 City clerk 1,261,100 1,269,600 1,195,027 74,573 City attorney 350,000 350,000 243,718 106,282 Finance 2,707,200 2,718,400 2,578,000 140,400 Risk management 2,227,700 2,230,400 2,165,522 64,878 Human resources 463,100 476,400 404,084 72,316 Non -departmental 62,500 62,500 60,399 2,101 Emergency preparedness 240,800 240,800 208,375 32,425 Code enforcement 617,700 614,800 609,109 5,691 Public safety Law enforcement 11,961,900 12,918,200 12,884,083 34,117 Public works Public works operations 3,337,800 3,460,300 3,383,724 76,576 Engineering 2,036,800 2,137,200 1,814,286 322,914 Public works administration 1,253,700 1,274,100 1,259,968 14,132 Community development Community development administration 1,818,100 1,859,200 1,676,887 182,313 Building and safety 1,443,600 1,493,600 1,452,295 41,305 Development services 2,196,000 2,709,800 1,637,843 1,071,957 Economic development 119,200 119,200 117,779 1,421 Community services Recreation 6,100,400 6,242,700 6,185,676 57,024 Capital outlay 369,500 1,094,800 95,093 999,707 Debt service: Principal retirement 358,600 1,086,400 28,757 1,057,643 Interest and fiscal charges 216,300 216,300 30,787 185,513 Transfers out 3,002,540 6,076,540 922,395 5,154,145 Total Charges to Appropriations 44,937,240 51,575,740 41,148,856 10,426,884 Budgetary Fund Balance, June 30 $28,056,296 $ 33,864,796 $43,453,938 $ 9,589,142 74 CITY OF CHINO HILLS BUDGETARY COMPARISON SCHEDULE LANDSCAPE AND LIGHTING DISTRICT YEAR ENDED JUNE 30, 2017 Budgetary Fund Balance, July 1 Resources (Inflows): Special assessments Charges for services Use of money and property Miscellaneous Transfers in Amounts Available for Appropriations Charges to Appropriation (Outflow): Public works Capital outlay Transfers out Total Charges to Appropriations Budget Amounts Original Final $ 3,576,087 $ 3,576,087 Actual Amounts $ 3,576,087 Variance with Final Budget Positive (Negative) 5,380,900 5,380,900 5,429,603 48,703 1,671,000 1,671,000 1,664,261 (6,739) 61,600 61,600 (10,799) (72,399) - - 9,882 9,882 647,700 682,400 684,451 2,051 11,337,287 11,371,987 11,353,485 (18,502) 8,403,860 8,713,690 8,553,990 159,700 17,940 102,810 37,188 65,622 27,100 27,100 21,784 5,316 8,448,900 8,843,600 8,612,962 230,638 Budgetary Fund Balance, June 30 $ 2,888,387 $ 2,528,387 $ 2,740,523 $ 212,136 75 CITY OF CHINO HILLS BUDGETARY COMPARISON SCHEDULE EXISTING INFRASTRUCTURE FEES YEAR ENDED JUNE 30, 2017 Budgetary Fund Balance, July 1 Resources (Inflows): Developer fees Use of money and property Miscellaneous Long-term debt issued Amounts Available for Appropriations Charges to Appropriation (Outflow): Public works Community development Debt service: Principal retirement Interest and fiscal charges Total Charges to Appropriations Budget Amounts Original Final $ (5,917,134) $ (5,917,134) Actual Amounts $(5,917,134) Variance with Final Budget Positive (Negative) 9,290,800 9,644,900 8,799,287 (845,613) 17,500 17,500 (14,233) (31,733) - 4,295,600 4,295,579 (21) - 266,000 265,987 (13) 3,391,166 8,306,866 7,429,486 (877,380) 696,800 696,800 671,006 25,794 - 119,400 119,377 23 8,542,300 9,043,000 1,871,240 7,171,760 69,200 69,200 64,153 5,047 9,308,300 9,928,400 2,725,776 7,202,624 Budgetary Fund Balance, June 30 $ (5,917,134) $ (1,621,534) $ 4,703,710 $ 6,325,244 Wv CITY OF CHINO HILLS BUDGETARY COMPARISON SCHEDULE SOLID WASTE YEAR ENDED JUNE 30, 2017 Budgetary Fund Balance, July 1 Resources (Inflows): Charges for services Amounts Available for Appropriations Charges to Appropriation (Outflow): Public works Total Charges to Appropriations Budgetary Fund Balance, June 30 77 Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) 4,910,900 4,910,900 4,890,432 (20,468) 4,910,900 4,910,900 4,890,432 (20,468) 4,910,900 4,910,900 4,890,432 20,468 4,910,900 4,910,900 4,890,432 20,468 77 CITY OF CHINO HILLS SBCERA PENSION PLAN A COST-SHARING, MULTIPLE -EMPLOYER DEFINED BENEFIT PENSION PLAN SCHEDULE OF PROPORTIONATE SHARE OF THE NET PENSION LIABILITY AS OF JUNE 30, 2017 FOR THE LAST TEN FISCAL YEARS (3) Proportion of the Net Pension Liability Proportionate Share of the Net Pension Liability Covered -Employee Payroll Proportionate Share of the Net Pension Liability as Percentage of Covered -Employee Payroll Plan Fiduciary Net Position as a Percentage of the Total Pension Liability 2015 2016 2017 1.336% 1.232% 1.191% $ 22,704,424 $ 23,926,493 $ 29,404,282 $ 11,984,203 $ 11,338,934 $ 12,849,852 189.45% 211.01% 71.97% 71.75% 228.83% 67.99% Notes to Schedule: Benefit Changes: All members with membership dates on or after January 1, 2013 enter the new tiers created by the California Public Employees' Pension Reform Act of 2013 (PEPRA). The addition of a new tier of benefits did not result in a change in the net pension liability of participating employers due to changes in benefit terms as of June 30, 2014 and 2013. (1) Historical information is required only for measurement for which GASB 68 is applicable. Fiscal Year 2015 was the first year of implementation, therefore only three years are shown. 78 CITY OF CHINO HILLS SBCERA PENSION PLAN A COST-SHARING, MULTIPLE -EMPLOYER DEFINED BENEFIT PENSION PLAN SCHEDULE OF PLAN CONTRIBUTIONS AS OF JUNE 30, 2017 FOR THE LAST TEN FISCAL YEARS (3) Actuarially Determined Contribution Actuarial Contributions Contribution Deficiency (Excess) Covered -Employee Payroll Contributions as a Percentage of Covered -Employee Payroll Note to Schedule: Valuation Date: Methods and assumptions used to determine contribution rates: Actuarial cost method Amortization method Remaining amortization period Assets valuation method Inflation Projected salary increases Investment rate of return Retirement age Mortality June 30, 2016 2015 2016 2017 $ 4,546,047 $ 5,528,874 $ 5,375,200 (4,546,047) (5,528,874) (5,375,200) $ 11,999,151 $ 12,556,972 $ 13,184,761 -37.89% -44.03% -40.77% Entry age normal Level percent of payroll (3.75% payroll growth assumed) 15 years Market value of assets less unrecognized returns from each of the last five years. 3.25% General: 4.6% to 13.75 and Safety: 4.55% to 13.75%, including inflation of 3.75% 7.5% net of pension plan investment expenses, including inflation 58 years for General members; 52 years for Safety members RP -2000 Combined Healthy Mortality Table (1) Historical information is required only for measurement for which GASB 68 is applicable. Fiscal Year 2015 was the first year of implementation, therefore only three years are shown. 79 NONMAJOR GOVERMENTAL FUNDS Snecial Revenue Funds Sleepy Hollow Road Improvement — To account for receipts and expenditures of money for landscape and other maintenance in the area of the City formerly designated as County Service Area No. 19. General Facilities Fee — To account for receipts and expenditures of money in the facilities development program for civic facilities such as a civic center, fire stations and community centers. Traffic Facilities Fee — To account for receipts and expenditures of money in the facilities development program for traffic facilities such as streets, sidewalks, curbs and gutters. Storm Drain Facilities Fee — To account for receipts and expenditures of money in the facilities development program for storm drain facilities. Parkland Fee — To account for receipts and expenditures of money in parks & recreation facilities fee and quimby in -lieu fee programs which provide funds for the acquisition of land and construction of parks within the City and is financed from fees collected from the development of residential and commercial properties. Traffic Signal Fee — To account for receipts and expenditures of money in the traffic signal fee program which provides funds for the installation of traffic signals within the City. Gas Tax — To account for receipts and expenditures of money apportioned under the State of California Streets and Highways Code Sections 2103, 2105, 2106, and 2107. Air Quality — To account for receipts and expenditures of money in the State and Federally mandated program to improve air quality within the South Coast Air Quality Management District. Federal Grants — To account for receipts and expenditures of money for certain federal grants received by the City. Measure I — To account for receipts and expenditures of money in providing qualifying street maintenance activities in conformance with provisions of the voter approved Measure I two cent sales tax levy. Street Sweeping — To account for receipts and expenditures of money in providing street sweeping services as financed through assessment fees collected from residential and commercial property owners. Frontline Policing — To account for the receipts and expenditures of money for the Frontline Policing Grant received from the State of California for qualifying police activities. Miscellaneous Grants — To account for receipts and expenditures of money for various grants received from Local, State, and Federal agencies. NONMAJOR GOVERMENTAL FUNDS (Continued) Affordable Housing Program — To account for receipts and expenditures of money in development of affordable housing in the City as financed through affordable housing in -lieu fees collected from new residential development projects. Water Facilities Fee — To account for receipts and expenditures of money in the facilities development program for water facilities. Sewer Facilities Fee — To account for receipts and expenditures of money in the facilities development program for sewer facilities. Tree Mitigation Fund — To account for the receipts and expeditures of money for the replacement of protected trees within the City. Public Safety Programs Fund - To account for the receipts and expenditures of money for programs which enhance public safety and law enforcement. Traffic Impact Fee - To account for receipts and expenditures of money in the facilities development program for public transportation improvements needed to mitigate traffic impacts of future development. Capital Projects Funds The following Capital Projects Funds are used to account for resources that are restricted, committed or assigned for the acquisition of capital facilities and other capital assets: Capital Improvement Capital Project Fund — To account for the expenditures of construction of various capital improvements projects throughout the City. CFD #9 Rincon Village — To account for capital projects in the Community Facilities District No. 9 (Rincon Village Area) financed by the issuance of Mello -Roos Community Facilities Bonds as required by the Mello -Roos Community Facilities Act of 1982. CFD #10 Fairfield Ranch — To account for capital projects in the Community Facilities District No. 10 (Fairfield Ranch) financed by the issuance of Mello -Roos Community Facilities Bonds as required by the Mello -Roos Community Facilities Act of 1982. 81 CITY OF CHINO HILLS COMBINING BALANCE SHEET NONMAJOR GOVERNMENTAL FUNDS JUNE 30, 2017 M Special Revenue Funds Sleepy Hollow Road General Traffic Storm Drain Improvement Facilities Fees Facilities Fees Facilities Fees Assets: Cash and investments $ 34,438 $ 3,950,394 $ 2,378,856 $ 6,783,868 Receivables: Accounts - - - - Taxes - - - - Accrued interest 4 427 257 732 Special assessment 555 - - - Due from other governments - - - - Restricted assets: Cash and investments with fiscal agents - - - - Total Assets $ 34,997 $ 3,950,821 $ 2,379,113 $ 6,784,600 Liabilities, Deferred Inflows of Resources, and Fund Balances: Liabilities: Accounts payable $ - $ - $ - $ - Accrued liabilities - - - - Retentions payable - - - - Due to other funds - - - - Unearned revenues - - - - Deposits payable - - - - Advances from other funds - - - - Total Liabilities - - - - Deferred Inflows of Resources: Unavailable revenues - - - - Total Deferred Inflows of Resources - - - - Fund Balances: Restricted 34,997 3,950,821 2,379,113 6,784,600 Total Fund Balances 34,997 3,950,821 2,379,113 6,784,600 Total Liabilities, Deferred Inflows of Resources, and Fund Balances $ 34,997 $ 3,950,821 $ 2,379,113 $ 6,784,600 M CITY OF CHINO HILLS COMBINING BALANCE SHEET NONMAJOR GOVERNMENTAL FUNDS JUNE 30, 2017 (CONTINUED) 83 Special Revenue Funds Traffic Signal Parkland Fees Fees Gas Tax Air Quality Assets: Cash and investments $ 2,869,104 $ 321,739 $ 2,911,807 $ 382,682 Receivables: Accounts - - 7,048 - Taxes - - - - Accrued interest 418 35 313 41 Special assessment - - - - Due from other governments - - 244 25,601 Restricted assets: Cash and investments with fiscal agents - - - - Total Assets $ 2,869,522 $ 321,774 $ 2,919,412 $ 408,324 Liabilities, Deferred Inflows of Resources, and Fund Balances: Liabilities: Accounts payable $ - $ - $ 62,762 $ 48 Accrued liabilities 1,813 - 36,474 - Retentions payable - - - - Due to other funds - - - - Unearned revenues - - - - Deposits payable - - - - Advances from other funds 385,750 - - - Total Liabilities 387,563 - 99,236 48 Deferred Inflows of Resources: Unavailable revenues - - - - Total Deferred Inflows of Resources - - - - Fund Balances: Restricted 2,481,959 321,774 2,820,176 408,276 Total Fund Balances 2,481,959 321,774 2,820,176 408,276 Total Liabilities, Deferred Inflows of Resources, and Fund Balances $ 2,869,522 $ 321,774 $ 2,919,412 $ 408,324 83 CITY OF CHINO HILLS COMBINING BALANCE SHEET NONMAJOR GOVERNMENTAL FUNDS JUNE 30, 2017 ." Special Revenue Funds Federal Street Frontline Grants Measure I Sweeping Policing Assets: Cash and investments $ - $ 1,636,721 $ 62,241 $ - Receivables: Accounts - - - - Taxes - 220,141 - - Accrued interest - 180 7 - Special assessment - - 2,543 - Due from other governments 116,252 - - 1,301 Restricted assets: Cash and investments with fiscal agents - - - - Total Assets $ 116,252 $ 1,857,042 $ 64,791 $ 1,301 Liabilities, Deferred Inflows of Resources, and Fund Balances: Liabilities: Accounts payable $ 101,149 $ - $ 33,566 $ - Accrued liabilities - - - - Retentions payable 8,106 - - - Due to other funds 6,997 - - - Unearned revenues - - - - Deposits payable - - - - Advances from other funds - - - - Total Liabilities 116,252 - 33,566 - Deferred Inflows of Resources: Unavailable revenues - - - - Total Deferred Inflows of Resources - - - - Fund Balances: Restricted - 1,857,042 31,225 1,301 Total Fund Balances - 1,857,042 31,225 1,301 Total Liabilities, Deferred Inflows of Resources, and Fund Balances $ 116,252 $ 1,857,042 $ 64,791 $ 1,301 ." CITY OF CHINO HILLS COMBINING BALANCE SHEET NONMAJOR GOVERNMENTAL FUNDS JUNE 30, 2017 (CONTINUED) Assets: Cash and investments Receivables: Accounts Taxes Accrued interest Special assessment Due from other governments Restricted assets: Cash and investments with fiscal agents Total Assets Liabilities, Deferred Inflows of Resources, and Fund Balances: Liabilities: Accounts payable Accrued liabilities Retentions payable Due to other funds Unearned revenues Deposits payable Advances from other funds Total Liabilities Deferred Inflows of Resources: Unavailable revenues Total Deferred Inflows of Resources Fund Balances: Restricted Total Fund Balances Total Liabilities, Deferred Inflows of Resources, and Fund Balances Special Revenue Funds Affordable Miscellaneous Housing Water Sewer Grants Program Facilities Fee Facilities Fee $ 847,007 $ 2,245,191 $ 14,694,856 $ 4,557,433 - 243 1,586 121 488,286 - - - $ 1,335,293 $ 2,245,434 $ 14,696,442 $ 4,557,554 95,014 - - - - - 3,099 - 166,149 - - - 261,163 - 3,099 - 190,463 - - - 190,463 - - - 883,667 2,245,434 14,693,343 4,557,554 883,667 2,245,434 14,693,343 4,557,554 $ 1,335,293 $ 2,245,434 $ 14,696,442 $ 4,557,554 (-9 CITY OF CHINO HILLS COMBINING BALANCE SHEET NONMAJOR GOVERNMENTAL FUNDS JUNE 30, 2017 Capital Special Revenue Funds Projects Fund Tree Public Safety Mitigation Programs Traffic Impact Capital Fund Fund Fee Improvement Assets: Cash and investments $ 4,308 $ 30,233 $ 4,436 $ 670,507 Receivables: Accounts - - - - Taxes - - - - Accrued interest - 3 - - Special assessment - - - - Due from other governments - 24 - - Restricted assets: Cash and investments with fiscal agents Total Assets Liabilities, Deferred Inflows of Resources, and Fund Balances: Liabilities: Accounts payable Accrued liabilities Retentions payable Due to other funds Unearned revenues Deposits payable Advances from other funds Total Liabilities Deferred Inflows of Resources: Unavailable revenues Total Deferred Inflows of Resources Fund Balances: Restricted Total Fund Balances Total Liabilities, Deferred Inflows of Resources, and Fund Balances $ 4,308 $ 30,260 $ 4,436 $ 670,507 - $ - $ 634,560 - - 1,022 - - 34,925 670,507 4,308 30,260 4,436 4,308 30,260 4,436 $ 4,308 $ 30,260 $ 4,436 $ 670,507 :: CITY OF CHINO HILLS COMBINING BALANCE SHEET NONMAJOR GOVERNMENTAL FUNDS JUNE 30, 2017 Assets: Cash and investments Receivables: Accounts Taxes Accrued interest Special assessment Due from other governments Restricted assets: Cash and investments with fiscal agents Total Assets Liabilities, Deferred Inflows of Resources, and Fund Balances: Liabilities: Accounts payable Accrued liabilities Retentions payable Due to other funds Unearned revenues Deposits payable Advances from other funds Total Liabilities Deferred Inflows of Resources: Unavailable revenues Total Deferred Inflows of Resources Fund Balances: Restricted Total Fund Balances Total Liabilities, Deferred Inflows of Resources, and Fund Balances 87 Capital Project Funds CFD #10 CFD # 9 Fairfield Rincon Village Ranch $ 4,665,766 $ - $ 49,051,587 Total Governmental Funds - - 7,048 - - 220,141 505 383 5,255 - - 3,098 - - 631,708 - 368,388 368,388 $ 4,666,271 $ 368,771 $ 50,287,225 $ - $ 53,493 $ 885,578 - - 39,309 - 2,807 45,838 - 26,298 33,295 - - 95,014 - - 3,099 - - 551,899 82,598 1,654,032 - - 190,463 190,463 4,666,271 286,173 48,442,730 4,666,271 286,173 48,442,730 $ 4,666,271 $ 368,771 $ 50,287,225 CITY OF CHINO HILLS COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES NONMAJOR GOVERNMENTAL FUNDS YEAR ENDED JUNE 30, 2017 Special Revenue Funds Total Revenues 9,402 1,382,866 172,225 1,024,369 Expenditures: Current: Public safety - - - - Public works 24,964 102,624 12,873 76,730 Community services - - - - Capital outlay - - - - Debt service: Interest and fiscal charges - - - - Total Expenditures 24,964 102,624 12,873 76,730 Excess (Deficiency) of Revenues Over (Under) Expenditures (15,562) 1,280,242 159,352 947,639 Other Financing Sources (Uses): Transfers in - - - - Transfers out - - - - Total Other Financing Sources (Uses) - - - - Net Change in Fund Balances (15,562) 1,280,242 159,352 947,639 Fund Balances, Beginning of Year 50,559 2,670,579 2,219,761 5,836,961 Fund Balances, End of Year $ 34,997 $ 3,950,821 $ 2,379,113 $ 6,784,600 ; Sleepy Hollow Road General Traffic Storm Drain Improvement Facilities Fees Facilities Fees Facilities Fees Revenues: Special assessments $ 9,603 $ - $ - $ Intergovernmental - - - - Developer fees - 1,368,324 171,640 1,017,893 Contribution from property owners - - - - Fines and forfeitures - - - - Contributions from property owners - - - - Use of money and property (201) 14,542 585 6,476 Miscellaneous - - - - Total Revenues 9,402 1,382,866 172,225 1,024,369 Expenditures: Current: Public safety - - - - Public works 24,964 102,624 12,873 76,730 Community services - - - - Capital outlay - - - - Debt service: Interest and fiscal charges - - - - Total Expenditures 24,964 102,624 12,873 76,730 Excess (Deficiency) of Revenues Over (Under) Expenditures (15,562) 1,280,242 159,352 947,639 Other Financing Sources (Uses): Transfers in - - - - Transfers out - - - - Total Other Financing Sources (Uses) - - - - Net Change in Fund Balances (15,562) 1,280,242 159,352 947,639 Fund Balances, Beginning of Year 50,559 2,670,579 2,219,761 5,836,961 Fund Balances, End of Year $ 34,997 $ 3,950,821 $ 2,379,113 $ 6,784,600 ; CITY OF CHINO HILLS COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES NONMAJOR GOVERNMENTAL FUNDS YEAR ENDED JUNE 30, 2017 (CONTINUED) Revenues: Special assessments Intergovernmental Developer fees Contribution from property owners Fines and forfeitures Contributions from property owners Use of money and property Miscellaneous Total Revenues Expenditures: Current: Public safety Public works Community services Capital outlay Debt service: Interest and fiscal charges Total Expenditures Excess (Deficiency) of Revenues Over (Under) Expenditures Other Financing Sources (Uses): Transfers in Transfers out Total Other Financing Sources (Uses) Net Change in Fund Balances Fund Balances, Beginning of Year Fund Balances, End of Year Special Revenue Funds Parkland Traffic Signal Fees Fees Gas Tax Air Quality - - 1,497,837 100,712 2,497,217 - - - 2,717 (1,203) (8,962) 227 - - 76,720 - 2,499,934 (1,203) 1,565,595 100,939 424,207 - 1,708,328 577 - - - 10,180 20,200 - - - 444,407 - 1,708,328 10,757 2,055,527 (1,203) (142,733) 90,182 - (71,442) - - - (71,442) - - 2,055,527 (72,645) (142,733) 90,182 426,432 394,419 2,962,909 318,094 $ 2,481,959 $ 321,774 $ 2,820,176 $ 408,276 CITY OF CHINO HILLS COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES NONMAJOR GOVERNMENTAL FUNDS YEAR ENDED JUNE 30, 2017 Revenues: Special assessments Intergovernmental Developer fees Contribution from property owners Fines and forfeitures Contributions from property owners Use of money and property Miscellaneous Total Revenues Expenditures: Current: Public safety Public works Community services Capital outlay Debt service: Interest and fiscal charges Total Expenditures Excess (Deficiency) of Revenues Over (Under) Expenditures Other Financing Sources (Uses): Transfers in Transfers out Total Other Financing Sources (Uses) Net Change in Fund Balances Fund Balances, Beginning of Year Fund Balances, End of Year Special Revenue Funds Federal Street Frontline Grants Measure I Sweeping Policing $ - $ - $ 198,943 $ - 285,844 1,346,350 - 158,366 - (8,201) (1,811) (114) 285,844 1,338,149 197,132 158,252 - - - 163,138 - 65,900 333,006 - 116,418 - - - 169,426 - - - 285,844 65,900 333,006 163,138 - 1,272,249 (135,874) (4,886) - 1,107,254 - - - (1,641,055) - - - (533,801) - - - 738,448 (135,874) (4,886) - 1,118,594 167,099 6,187 $ - $1,857,042 $ 31,225 $ 1,301 M CITY OF CHINO HILLS COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES NONMAJOR GOVERNMENTAL FUNDS YEAR ENDED JUNE 30, 2017 (CONTINUED) Revenues: Special assessments Intergovernmental Developer fees Contribution from property owners Fines and forfeitures Contributions from property owners Use of money and property Miscellaneous Total Revenues Expenditures: Current: Public safety Public works Community services Capital outlay Debt service: Interest and fiscal charges Total Expenditures Excess (Deficiency) of Revenues Over (Under) Expenditures Other Financing Sources (Uses): Transfers in Transfers out Total Other Financing Sources (Uses) Net Change in Fund Balances Fund Balances, Beginning of Year Fund Balances, End of Year Special Revenue Funds (2,167,691) - (35,267) (8,398) (2,167,691) - (35,267) (8,398) 1,636,318 904,836 4,208,809 253,138 (752,651) 1,340,598 10,484,534 4,304,416 $ 883,667 $ 2,245,434 $ 14,693,343 $ 4,557,554 91 Affordable Miscellaneous Housing Water Sewer Grants Program Facilities Fee Facilities Fee $ - $ - $ 4,567,163 $ 224,825 3,804,009 - - - - 899,881 - - - 4,955 19,605 53,223 3,804,009 904,836 4,586,768 278,048 - - 342,692 16,512 16,512 - - 342,692 3,804,009 904,836 4,244,076 261,536 (2,167,691) - (35,267) (8,398) (2,167,691) - (35,267) (8,398) 1,636,318 904,836 4,208,809 253,138 (752,651) 1,340,598 10,484,534 4,304,416 $ 883,667 $ 2,245,434 $ 14,693,343 $ 4,557,554 91 CITY OF CHINO HILLS COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES NONMAJOR GOVERNMENTAL FUNDS YEAR ENDED JUNE 30, 2017 Revenues: Special assessments Intergovernmental Developer fees Contribution from property owners Fines and forfeitures Contributions from property owners Use of money and property Miscellaneous Total Revenues Expenditures: Current: Public safety Public works Community services Capital outlay Debt service: Interest and fiscal charges Total Expenditures Excess (Deficiency) of Revenues Over (Under) Expenditures Other Financing Sources (Uses): Transfers in Transfers out Total Other Financing Sources (Uses) Net Change in Fund Balances Fund Balances, Beginning of Year Fund Balances, End of Year Special Revenue Funds Tree Public Safety Mitigation Programs Traffic Impact Capital Fund Fund Fee Improvement - - - 34,834 - 76 - - 46 (56) - - - - 4,436 - 46 20 4,436 34,834 - 2,172 - - - - - 2,021,236 - - - 1,737,518 2,172 - 3,758,754 46 (2,152) 4,436 (3,723,920) - - - 3,723,920 - - - 3,723,920 46 (2,152) 4,436 - 4,262 32,412 - - $ 4,308 $ 30,260 $ 4,436 $ - CITY OF CHINO HILLS COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES NONMAJOR GOVERNMENTAL FUNDS YEAR ENDED JUNE 30, 2017 Revenues: Special assessments Intergovernmental Developer fees Contribution from property owners Fines and forfeitures Contributions from property owners Use of money and property Miscellaneous Total Revenues Expenditures: Current: Public safety Public works Community services Capital outlay Debt service: Interest and fiscal charges Total Expenditures Excess (Deficiency) of Revenues Over (Under) Expenditures Other Financing Sources (Uses): Transfers in Transfers out Total Other Financing Sources (Uses) Net Change in Fund Balances Fund Balances, Beginning of Year Fund Balances, End of Year 93 Capital Projects Funds CFD # 9 CFD # 10 Total Rincon Fairfield Governmental Village Ranch Funds $ - $ 432 $ 5,000,966 - - 7,193,118 - - 5,954,955 - - 34,834 - - 76 215,658 - 215,658 (6,906) 556 75,478 - - 81,156 208,752 988 18,556,241 - - 165,310 - - 5,129,649 - - 116,418 97,580 109,587 2,124,291 - - 20,200 97,580 109,587 7,555,868 111,172 (108,599) 11,000,373 - - 4,831,174 - - (3,923,853) - - 907,321 111,172 (108,599) 11,907,694 4,555,099 394,772 36,535,036 $ 4,666,271 $ 286,173 $ 48,442,730 CITY OF CHINO HILLS BUDGETARY COMPARISON SCHEDULE SLEEPY HOLLOW ROAD IMPROVEMENT YEAR ENDED JUNE 30, 2017 Budgetary Fund Balance, July 1 Resources (Inflows): Special assessments Use of money and property Amounts Available for Appropriations Charges to Appropriation (Outflow): Public works Total Charges to Appropriations Budgetary Fund Balance, June 30 Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) $ 50,559 $ 50,559 $ 50,559 $ - 9,600 9,600 9,603 3 800 800 (201) (1,001) 60,959 60,959 59,961 (998) 400 25,000 24,964 36 400 25,000 24,964 36 $ 60,559 $ 35,959 $ 34,997 $ (962) CITY OF CHINO HILLS BUDGETARY COMPARISON SCHEDULE GENERAL FACILITIES FEES YEAR ENDED JUNE 30, 2017 Budgetary Fund Balance, July 1 Resources (Inflows): Developer fees Use of money and property Amounts Available for Appropriations Charges to Appropriation (Outflow): Public works Total Charges to Appropriations Budgetary Fund Balance, June 30 $ 3,976,779 $ 3,976,779 $ 3,950,821 $ (25,958) N9 Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) $ 2,670,579 $ 2,670,579 $ 2,670,579 $ - 1,397,000 1,397,000 1,368,324 (28,676) 14,000 14,000 14,542 542 4,081,579 4,081,579 4,053,445 (28,134) 104,800 104,800 102,624 2,176 104,800 104,800 102,624 2,176 Budgetary Fund Balance, June 30 $ 3,976,779 $ 3,976,779 $ 3,950,821 $ (25,958) N9 CITY OF CHINO HILLS BUDGETARY COMPARISON SCHEDULE TRAFFIC FACILITIES FEES YEAR ENDED JUNE 30, 2017 Budgetary Fund Balance, July 1 Resources (Inflows): Developer fees Use of money and property Amounts Available for Appropriations Charges to Appropriation (Outflow): Public works Total Charges to Appropriations Budgetary Fund Balance, June 30 $ 2,404,361 $ 2,404,361 $ 2,379,113 $ (25,248) Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) $ 2,219,761 $ 2,219,761 $ 2,219,761 $ - 176,300 176,300 171,640 (4,660) 21,500 21,500 585 (20,915) 2,417,561 2,417,561 2,391,986 (25,575) 13,200 13,200 12,873 327 13,200 13,200 12,873 327 Budgetary Fund Balance, June 30 $ 2,404,361 $ 2,404,361 $ 2,379,113 $ (25,248) CITY OF CHINO HILLS BUDGETARY COMPARISON SCHEDULE STORM DRAIN FACILITIES FEES YEAR ENDED JUNE 30, 2017 Budgetary Fund Balance, July 1 Resources (Inflows): Developer fees Use of money and property Miscellaneous Amounts Available for Appropriations Charges to Appropriation (Outflow): Public works Total Charges to Appropriations Budget Amounts Original Final $ 5,836,961 $ 5,836,961 Variance with Final Budget Actual Positive Amounts (Negative) $ 5,836,961 $ - 1,275,500 1,275,500 1,017,893 (257,607) 52,100 52,100 6,476 (45,624) 12,700 12,700 - (12,700) 7,177,261 7,177,261 6,861,330 (315,931) 95,700 95,700 76,730 18,970 95,700 95,700 76,730 18,970 Budgetary Fund Balance, June 30 $ 7,081,561 $ 7,081,561 $ 6,784,600 $ (296,961) 97 CITY OF CHINO HILLS BUDGETARY COMPARISON SCHEDULE PARKLAND FEES YEAR ENDED JUNE 30, 2017 Budgetary Fund Balance, July 1 Resources (Inflows): Developer fees Use of money and property Amounts Available for Appropriations Charges to Appropriation (Outflow): Public works Debt service: Interest and fiscal charges Transfers out Total Charges to Appropriations Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) $ 426,432 $ 426,432 $ 426,432 $ - 2,565,500 2,565,500 2,497,217 (68,283) 21,300 21,300 2,717 (18,583) 3,013,232 3,013,232 2,926,366 (86,866) 814,100 830,700 424,207 406,493 - - 20,200 (20,200) 1,500,000 1,500,000 - 1,500,000 2,314,100 2,330,700 444,407 1,886,293 Budgetary Fund Balance, June 30 $ 699,132 $ 682,532 $ 2,481,959 $ 1,799,427 CITY OF CHINO HILLS BUDGETARY COMPARISON SCHEDULE TRAFFIC SIGNAL FEES YEAR ENDED JUNE 30, 2017 Budgetary Fund Balance, July 1 Resources (Inflows): Use of money and property Amounts Available for Appropriations Charges to Appropriation (Outflow): Transfers out Total Charges to Appropriations Budgetary Fund Balance, June 30 Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) $ 394,419 $ 394,419 $ 394,419 $ - 4,800 4,800 (1,203) (6,003) 399,219 399,219 393,216 (6,003) 130,000 130,800 71,442 59,358 130,000 130,800 71,442 59,358 $ 269,219 $ 268,419 $ 321,774 $ 53,355 CITY OF CHINO HILLS BUDGETARY COMPARISON SCHEDULE GAS TAX YEAR ENDED JUNE 30, 2017 Budgetary Fund Balance, July 1 Resources (Inflows): Intergovernmental Use of money and property Miscellaneous Amounts Available for Appropriations Charges to Appropriation (Outflow): Public works Total Charges to Appropriations Budgetary Fund Balance, June 30 100 Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) $ 2,962,909 $ 2,962,909 $ 2,962,909 $ - 1,591,500 1,591,500 1,497,837 (93,663) 53,400 53,400 (8,962) (62,362) - - 76,720 76,720 4,607,809 4,607,809 4,528,504 (79,305) 1,584,800 1,800,000 1,708,328 91,672 1,584,800 1,800,000 1,708,328 91,672 $ 3,023,009 $ 2,807,809 $ 2,820,176 $ 12,367 100 CITY OF CHINO HILLS BUDGETARY COMPARISON SCHEDULE AIR QUALITY YEAR ENDED JUNE 30, 2017 Budgetary Fund Balance, July 1 Resources (Inflows): Intergovernmental Use of money and property Amounts Available for Appropriations Charges to Appropriation (Outflow): Public works Capital outlay Total Charges to Appropriations Budgetary Fund Balance, June 30 $ 421,194 $ 410,994 $ 408,276 $ (2,718) 101 Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) $ 318,094 $ 318,094 $ 318,094 $ - 101,000 101,000 100,712 (288) 2,700 2,700 227 (2,473) 421,794 421,794 419,033 (2,761) 600 600 577 23 - 10,200 10,180 20 600 10,800 10,757 43 Budgetary Fund Balance, June 30 $ 421,194 $ 410,994 $ 408,276 $ (2,718) 101 CITY OF CHINO HILLS BUDGETARY COMPARISON SCHEDULE FEDERAL GRANTS YEAR ENDED JUNE 30, 2017 Budgetary Fund Balance, July 1 Resources (Inflows): Intergovernmental Amounts Available for Appropriations Charges to Appropriation (Outflow): Community services Capital outlay Total Charges to Appropriations Budgetary Fund Balance, June 30 102 Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) 547,500 547,500 285,844 (261,656) 547,500 547,500 285,844 (261,656) 186,600 189,600 116,418 73,182 360,900 360,900 169,426 191,474 547,500 550,500 285,844 264,656 $ - $ (3,000) $ - $ 3,000 102 CITY OF CHINO HILLS BUDGETARY COMPARISON SCHEDULE MEASUREI YEAR ENDED JUNE 30, 2017 Budgetary Fund Balance, July 1 Resources (Inflows): Intergovernmental Use of money and property Transfers in Amounts Available for Appropriations Charges to Appropriation (Outflow): Public works Transfers out Total Charges to Appropriations Budgetary Fund Balance, June 30 $ 658,794 $ 1,331,094 $ 1,857,042 $ 525,948 103 Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) $ 1,118,594 $ 1,118,594 $ 1,118,594 $ - 1,210,900 1,210,900 1,346,350 135,450 23,100 23,100 (8,201) (31,301) - 1,107,300 1,107,254 (46) 2,352,594 3,459,894 3,563,997 104,103 64,800 65,900 65,900 - 1,629,000 2,062,900 1,641,055 421,845 1,693,800 2,128,800 1,706,955 421,845 Budgetary Fund Balance, June 30 $ 658,794 $ 1,331,094 $ 1,857,042 $ 525,948 103 CITY OF CHINO HILLS BUDGETARY COMPARISON SCHEDULE STREET SWEEPING YEAR ENDED JUNE 30, 2017 104 Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) Budgetary Fund Balance, July 1 $ 167,099 $ 167,099 $ 167,099 $ - Resources (Inflows): Special assessments 201,400 201,400 198,943 (2,457) Use of money and property 4,000 4,000 (1,811) (5,811) Amounts Available for Appropriations 372,499 372,499 364,231 (8,268) Charges to Appropriation (Outflow): Public works 337,200 369,600 333,006 36,594 Total Charges to Appropriations 337,200 369,600 333,006 36,594 Budgetary Fund Balance, June 30 $ 35,299 $ 2,899 $ 31,225 $ 28,326 104 CITY OF CHINO HILLS BUDGETARY COMPARISON SCHEDULE FRONTLINE POLICING YEAR ENDED JUNE 30, 2017 Budgetary Fund Balance, July 1 Resources (Inflows): Intergovernmental Use of money and property Amounts Available for Appropriations Charges to Appropriation (Outflow): Public safety Total Charges to Appropriations Budget Amounts Original Final $ 6,187 $ 6,187 95,000 157,000 700 700 101,887 163,887 Variance with Final Budget Actual Positive Amounts (Negative) $ 6,187 $ - 158,366 1,366 (114) (814) 164,439 552 100,000 164,300 163,138 1,162 100,000 164,300 163,138 1,162 Budgetary Fund Balance, June 30 $ 1,887 $ (41 3) $ 1,301 $ 1,714 105 CITY OF CHINO HILLS BUDGETARY COMPARISON SCHEDULE MISCELLANEOUS GRANTS YEAR ENDED JUNE 30, 2017 Budgetary Fund Balance, July 1 Resources (Inflows): Intergovernmental Amounts Available for Appropriations Charges to Appropriation (Outflow): Transfers out Total Charges to Appropriations Budgetary Fund Balance, June 30 $ (752,651) $ 1,039,449 $ 883,667 $ (155,782) 106 Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) $ (752,651) $ (752,651) $ (752,651) $ - 4,452,000 6,747,700 3,804,009 (2,943,691) 3,699,349 5,995,049 3,051,358 (2,943,691) 4,452,000 4,955,600 2,167,691 2,787,909 4,452,000 4,955,600 2,167,691 2,787,909 Budgetary Fund Balance, June 30 $ (752,651) $ 1,039,449 $ 883,667 $ (155,782) 106 CITY OF CHINO HILLS BUDGETARY COMPARISON SCHEDULE AFFORDABLE HOUSING PROGRAM YEAR ENDED JUNE 30, 2017 Budgetary Fund Balance, July 1 Resources (Inflows): Developer fees Use of money and property Amounts Available for Appropriations Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) $ 1,340,598 $ 1,340,598 $ 1,340,598 $ - 1,340,000 1,340,000 899,881 (440,119) 8,200 8,200 4,955 (3,245) 2,688,798 2,688,798 2,245,434 (443,364) Budgetary Fund Balance, June 30 $ 2,688,798 $ 2,688,798 $ 2,245,434 $ (443,364) 107 CITY OF CHINO HILLS BUDGETARY COMPARISON SCHEDULE WATER FACILITIES FEE YEAR ENDED JUNE 30, 2017 Budgetary Fund Balance, July 1 Resources (Inflows): Special assessments Use of money and property Miscellaneous Amounts Available for Appropriations Charges to Appropriation (Outflow): Public works Transfers out Total Charges to Appropriations Budgetary Fund Balance, June 30 Budget Amounts Original Final $10,484,534 $10,484,534 3,897,300 3,897,300 76,900 76,900 2,757,100 2,757,100 17,215, 834 17,215, 834 Variance with Final Budget Actual Positive Amounts (Negative) $10,484,534 $ - 4,567,163 669,863 19,605 (57,295) (2,757,100) 15,071,302 (2,144,532) 291,900 291,900 342,692 (50,792) 2,502,200 2,866,400 35,267 2,831,133 2,794,100 3,158,300 377,959 2,780,341 $14,421,734 $14,057,534 $14,693,343 $ 635,809 108 CITY OF CHINO HILLS BUDGETARY COMPARISON SCHEDULE SEWER FACILITIES FEE YEAR ENDED JUNE 30, 2017 109 Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) Budgetary Fund Balance, July 1 $4,304,416 $ 4,304,416 $ 4,304,416 $ - Resources (Inflows): Special assessments 356,500 356,500 224,825 (131,675) Use of money and property 39,200 39,200 53,223 14,023 Miscellaneous 3,320,000 3,320,000 - (3,320,000) Amounts Available for Appropriations 8,020,116 8,020,116 4,582,464 (3,437,652) Charges to Appropriation (Outflow): Public works 26,700 26,700 16,512 10,188 Transfers out 170,600 147,600 8,398 139,202 Total Charges to Appropriations 197,300 174,300 24,910 149,390 Budgetary Fund Balance, June 30 $7,822,816 $ 7,845,816 $ 4,557,554 $ (3,288,262) 109 CITY OF CHINO HILLS BUDGETARY COMPARISON SCHEDULE PUBLIC SAFETY PROGRAMS YEAR ENDED JUNE 30, 2017 Budgetary Fund Balance, July 1 Resources (Inflows): Fines and forfeitures Use of money and property Amounts Available for Appropriations Charges to Appropriation (Outflow): Public safety Transfers out Total Charges to Appropriations Budgetary Fund Balance, June 30 Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) $ 32,412 $ 32,412 $ 32,412 $ - - - 76 76 300 300 (56) (356) 32,712 32,712 32,432 (280) - 2,172 (2,172) - 22,000 - 22,000 - 22,000 2,172 19,828 $ 32,712 $ 10,712 $ 30,260 $ 19,548 110 CITY OF CHINO HILLS BUDGETARY COMPARISON SCHEDULE CAPITAL IMPROVEMENT YEAR ENDED JUNE 30, 2017 Budgetary Fund Balance, July 1 Resources (Inflows): Contributions from property owners Transfers in Amounts Available for Appropriations Charges to Appropriation (Outflow): Public works Capital outlay Total Charges to Appropriations Budgetary Fund Balance, June 30 Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) 1,533,100 1,114,900 34,834 (1,080,066) 17,666,400 19,581,300 3,723,920 (15,857,380) 19,199,500 20,696,200 3,758,754 (16,937,446) 2,021,236 2,021,236 2,021,236 - 17,178,264 18,674,864 1,737,518 16,937,346 19,199,500 20,696,100 3,758,754 16,937,346 $ - $ 100 $ - $ (100) 111 CITY OF CHINO HILLS BUDGETARY COMPARISON SCHEDULE CFD #9 RINCON VILLAGE YEAR ENDED JUNE 30, 2017 112 Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) Budgetary Fund Balance, July 1 $4,555,099 $ 4,555,099 $ 4,555,099 $ - Resources (Inflows): Contributions 235,300 235,300 215,658 (19,642) Use of money and property 52,700 52,700 (6,906) (59,606) Amounts Available for Appropriations 4,843,099 4,843,099 4,763,851 (79,248) Charges to Appropriation (Outflow): Capital outlay 2,500,000 2,500,000 97,580 2,402,420 Total Charges to Appropriations 2,500,000 2,500,000 97,580 2,402,420 Budgetary Fund Balance, June 30 $2,343,099 $ 2,343,099 $ 4,666,271 $ 2,323,172 112 CITY OF CHINO HILLS BUDGETARY COMPARISON SCHEDULE CFD #10 FAIRFIELD RANCH YEAR ENDED JUNE 30, 2017 Budgetary Fund Balance, July 1 Resources (Inflows): Special assessments Use of money and property Amounts Available for Appropriations Charges to Appropriation (Outflow): Capital outlay Total Charges to Appropriations Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) $ 394,772 $ 394,772 $ 394,772 $ - - - 432 432 - - 556 556 394,772 394,772 395,760 988 395,000 395,000 109,587 285,413 395,000 395,000 109,587 285,413 Budgetary Fund Balance, June 30 _L_1228L $ (228) $ 286,173 $ 286,401 113 i Chino Hills This page intentionally left blank. 114 INTERNAL SERVICE FUNDS Internal Service Funds are used to account for the financing of services provided by one department of a government to another. Internal Service Funds include the followings: Equipment Maintenance Fund — To account for the repair, replacement and maintenance of City -owned vehicles and equipment. Information Technology Fund — To account for the repair, replacement and maintenance of City -owned information technology systems and telecommunications hardware and software. 115 CITY OF CHINO HILLS COMBINING STATEMENT OF NET POSITION INTERNAL SERVICE FUNDS JUNE 30, 2017 Governmental Activities - Internal Service Funds Assets: Current: Cash and investments Receivables: Accounts Accrued interest Due from other governments Total Current Assets Noncurrent: Capital assets - net of accumulated depreciation Total Noncurrent Assets Total Assets Liabilities and Net Position: Liabilities: Current: Accounts payable Accrued liabilities Compensated absences Total Current Liabilities Noncurrent: Compensated absences Total Noncurrent Liabilities Total Liabilities Net Position: Net investment in capital assets Unrestricted Total Net Position Total Liabilities and Net Position 116 Equipment Maintenance $ 4,174,544 10,047 474 188 Information Technology Totals $ 833,107 $ 5,007,651 69 10,116 103 577 - 188 4,185,253 833,279 5,018,532 1,035,152 612,004 1,647,156 1,035,152 612,004 1,647,156 $ 5,220,405 $ 1,445,283 $ 6,665,688 $ 33,366 $ 22,304 $ 55,670 26,101 36,145 62,246 500 5,556 6,056 59,967 64,005 123,972 26,457 22,225 48,682 26,457 22,225 48,682 86,424 86,230 172,654 1,035,152 612,004 1,647,156 4,098,829 747,049 4,845,878 5,133,981 1,359,053 6,493,034 $ 5,220,405 $ 1,445,283 $ 6,665,688 CITY OF CHINO HILLS COMBINING STATEMENT OF REVENUES, EXPENSES AND CHANGES IN FUND NET POSITION INTERNAL SERVICE FUNDS YEAR ENDED JUNE 30, 2017 Operating Revenues: Charges for services Other Total Operating Revenues Operating Expenses: Salaries and benefits Professional and contractual services Repairs and maintenance Service and supplies Administrative and general expenses Utility services Depreciation and amortization Total Operating Expenses Operating Income (Loss) Nonoperating Revenues (Expenses): Interest revenue Interest expense Gain (loss) on disposal of capital assets Total Nonoperating Revenues(Expenses) Income (Loss) Before Contributions Capital contributions Changes in Net Position Net Position: Beginning of Year End of Fiscal Year 117 Governmental Activities - Internal Service Funds Equipment Information Maintenance Technology Totals - $ 1,063,886 $ 2,764,057 $ 3,827,943 1,064,520 2,764,057 3,828,577 404,554 366 173,257 171,570 108,786 1,843 495,074 1,355,450 (290,930) 602,609 344,874 448,520 10,484 266,276 3,097 138,935 1,814,795 949,262 1,007,163 345,240 621,777 182,054 375,062 4,940 634,009 3,170,245 658,332 (4,859) 1,024 (3,835) - (242) (242) 27,390 8,901 36,291 22,531 9,683 32,214 (268,399) 958,945 690,546 98,658 - 98,658 (169,741) 958,945 789,204 5,303,722 400,108 5,703,830 $ 5,133,981 $ 1,359,053 $ 6,493,034 CITY OF CHINO HILLS COMBINING STATEMENT OF CASH FLOWS INTERNAL SERVICE FUNDS YEAR ENDED JUNE 30, 2017 Cash Flows from Operating Activities: Cash received from customers and users Cash paid to suppliers for goods and services Cash paid to employees for services Net Cash Provided (Used) by Operating Activities Cash Flows from Capital and Related Financing Activities: Proceeds from capital asset disposals Capital contributions Acquisition and construction of capital assets Principal paid on capital debt Interest paid on capital lease Net Cash Provided (Used) by Capital and Related Financing Activities Cash Flows from Investing Activities: Interest received Net Cash Provided (Used) by Investing Activities Net Increase (Decrease) in Cash and Cash Equivalents Cash and Cash Equivalents at Beginning of Year Cash and Cash Equivalents at End of Year Reconciliation of Operating Income to Net Cash Provided (Used) by Operating Activities: Operating income (loss) Adjustments to reconcile operating income (loss) net cash provided (used) by operating activities: Depreciation (Increase) decrease in accounts receivable (Increase) decrease in due from other governments Increase (decrease) in accounts payable Increase (decrease) in accrued liabilities Increase (decrease) in compensated absences Total Adjustments Net Cash Provided (Used) by Operating Activities Governmental Activities - Internal Service Funds Equipment Information Maintenance Technology Totals $ 1,054,473 $ 2,763,988 $ 3,818,461 (366,519) (853,954) (1,220,473) (498,761) (862,395) (1,361,156) 189,193 1,047,639 1,236,832 27,390 - 27,390 98,658 - 98,658 (138,583) (406,295) (544,878) - (9,274) (9,274) - (242) (242) (12,535) (415,811) (428,346) (4,807) 968 (3,839) (4,807) 968 (3,839) 171,851 632,796 804,647 4,002,693 200,311 4,203,004 $ 4,174,544 $ 833,107 $ 5,007,651 $ (290,930) $ 949,262 $ 658,332 495,074 138,935 634,009 (10,047) (69) (10,116) (188) - (188) (19,295) (46,979) (66,274) 7,424 (3,629) 3,795 7,155 10,119 17,274 480,123 98,377 578,500 $ 189,193 $ 1,047,639 $ 1,236,832 Non -Cash Investing, Capital, and Financing Activities: There was no noncash investing, capital, or financing activities. 118 AGENCYFUNDS Agency Funds are used to account for assets held by the City as an agent for individuals, private organizations, other governments and/or funds. Agency Funds include the followings: AD #1994 — To account for the collection of assessments from owners of property within the Assessment District 1994, and for the remittance of such assessments to the bondholders as required by the California 1915 Improvements Act. CFD #1 Rolling Ridge — To account for the collection of assessments from owners of property within the Community Facilities District No. 1 (Rolling Ridge), and for the remittance of such assessments to the bondholders as required by the Mello -Roos Community facilities Act of 1982. CFD #2 Los Ranchos — To account for the collection of assessments from owners of property within the Community Facilities District No. 2 (Los Ranchos), and for the remittance of such assessments to the bondholders as required by the Mello -Roos Community facilities Act of 1982. CFD #4 The Oaks — To account for the collection of assessments from owners of property within the Community Facilities District No. 4 (The Oaks), and for the remittance of such assessments to the bondholders as required by the Mello -Roos Community facilities Act of 1982. CFD #5 Rincon Village — To account for the collection of assessments from owners of property within the Community Facilities District No. 5 (Rincon Village), and for the remittance of such assessments to the bondholders as required by the Mello -Roos Community facilities Act of 1982. CFD #6 Carbon Canyon — To account for the collection of assessments from owners of property within the Community Facilities District No. 6 (Carbon Canyon), and for the remittance of such assessments to the bondholders as required by the Mello -Roos Community facilities Act of 1982. CFD #8 Butterfield — To account for the collection of assessments from owners of property within the Community Facilities District No. 8 (Butterfield), and for the remittance of such assessments to the bondholders as required by the Mello -Roos Community facilities Act of 1982. CFD #9 Rincon Village — To account for the collection of assessments from owners of property within the Community Facilities District No. 9 (Rincon Village), and for the remittance of such assessments to the bondholders as required by the Mello -Roos Community facilities Act of 1982. CFD #10 Fairfield Ranch — To account for the collection of assessments from owners of property within the Community Facilities District No. 10 (Fairfield Ranch), and for the remittance of such assessments to the bondholders as required by the Mello -Roos Community facilities Act of 1982. General Agency Fund — To account for the collection of various fees/deposits from developers for community development projects, and for the remittance of such fees/deposits to the City as costs associated to the projects incurred. RAD 10-1 — To account for the collection of assessments from owners of property within the Reassessment District No. 10-1, and for the remittance of such assessments to the bondholders as required by the California 1915 Improvements Act. CFD Vila Borba — To account for the collection of assessments from owners of property within the Vila Borba development for the maintenance of parks and facilities within the district. 119 CITY OF CHINO HILLS COMBINING STATEMENT OF ASSETS AND LIABILITIES ALL AGENCY FUNDS JUNE 30. 2017 CFD # 1 CFD # 2 Los AD # 1994 Rolling Ridge Ranchos Assets: Pooled cash and investments $ 39,054 $ 621,760 $ 3,271,818 Receivables: Accounts Accrued interest Special assessments Restricted assets: Cash and investments with fiscal agents Total Assets Liabilities: Accounts payable Deposits payable Due to other governments Funds held for others Due to Inland Empire Utility Agency Total Liabilities 120 15 272 842 - 5,127 19,286 - 721,620 1,676,817 $ 39,069 $ 1,348,779 $ 4,968,763 39,069 1,348,779 4,968,763 $ 39,069 $ 1,348,779 $ 4,968,763 CITY OF CHINO HILLS COMBINING STATEMENT OF ASSETS AND LIABILITIES ALL AGENCY FUNDS JUNE 30, 2017 (CONTINUED) CFD # 6 CFD # 4 The CFD # 5 Carbon Oaks Rincon Village Canyon Assets: Pooled cash and investments $ 5,695,966 $ 3,258,191 $ 1,378,973 Receivables: Accounts Accrued interest Special assessments Restricted assets: Cash and investments with fiscal agents Total Assets 669 919 204 1,441 20,381 3,170 176,793 2,000,035 195,279 $ 5,874,869 $ 5,279,526 $ 1,577,626 Liabilities: Accounts payable $ - $ - $ - Deposits payable - - - Due to other governments - - - Funds held for others 5,874,869 5,279,526 1,577,626 Due to Inland Empire Utility Agency - - - Total Liabilities $ 5,874,869 $ 5,279,526 $ 1,577,626 121 CITY OF CHINO HILLS COMBINING STATEMENT OF ASSETS AND LIABILITIES ALL AGENCY FUNDS JUNE 30. 2017 Assets: Pooled cash and investments Receivables: Accounts Accrued interest Special assessments Restricted assets: Cash and investments with fiscal agents Total Assets CFD # 10 CFD # 8 CFD # 9 Fairfield Butterfield Rincon Village Ranch $ 290,201 $ 863,098 $ 919,944 54 233 99 1,153 10,725 6,545 78,442 491,716 981,750 $ 369,850 $ 1,365,772 $ 1,908,338 Liabilities: Accounts payable $ - $ - $ - Deposits payable - - - Due to other governments - - - Funds held for others 369,850 1,365,772 1,908,338 Due to Inland Empire Utility Agency - - - Total Liabilities $ 369,850 $ 1,365,772 $ 1,908,338 122 CITY OF CHINO HILLS COMBINING STATEMENT OF ASSETS AND LIABILITIES ALL AGENCY FUNDS JUNE 30. 2017 Liabilities: Accounts payable Deposits payable Due to other governments Funds held for others Due to Inland Empire Utility Agency Total Liabilities $ 283,354 $ - $ 5,309 $ 288,663 3,766,121 - - 3,766,121 34,662 - 257 34,919 39,260 749,582 675,204 24,196,638 6,136,173 - - 6,136,173 $ 10,259,570 $ 749,582 $ 680,770 $ 34,422,514 123 General Agency CFD Vila Fund RAD 10-1 Borba Totals Assets: Pooled cash and investments $ 10,259,499 $ 396,160 $ 678,068 $ 27,672,732 Receivables: Accounts 71 - - 71 Accrued interest - 142 73 3,522 Special assessments - 2,626 2,629 73,083 Restricted assets: Cash and investments with fiscal agents - 350,654 - 6,673,106 Total Assets $ 10,259,570 $ 749,582 $ 680,770 $ 34,422,514 Liabilities: Accounts payable Deposits payable Due to other governments Funds held for others Due to Inland Empire Utility Agency Total Liabilities $ 283,354 $ - $ 5,309 $ 288,663 3,766,121 - - 3,766,121 34,662 - 257 34,919 39,260 749,582 675,204 24,196,638 6,136,173 - - 6,136,173 $ 10,259,570 $ 749,582 $ 680,770 $ 34,422,514 123 CITY OF CHINO HILLS COMBINING STATEMENT OF CHANGES IN ASSETS AND LIABILITIES ALL AGENCY FUNDS YEAR ENDED JUNE 30, 2017 Balance Balance Ie1lIVAP111! Assets: Pooled cash and investments $ 326,973 $ 3,691 $ 291,610 $ 39,054 Receivables: Accrued interest 43 15 43 15 Total Assets 7 327,016 3,706 291,653 39,069 Liabilities: Funds held for others $ 327,016 $ 3,707 $ 291,654 $ 39,069 Total Liabilities $ 327,016 $ 3,707 $ 291,654 $ 39,069 CFD # 1 Rolling Ridge Assets: Pooled cash and investments $ 430,461 $ 436,050 $ 244,751 $ 621,760 Receivables: Accrued interest 57 272 57 272 Special assessments 10,908 5,127 10,908 5,127 Restricted assets: Cash and investments with fiscal agents 721,305 214,286 213,971 721,620 Total Assets $ 1,162,731 $ 655,735 $ 469,687 $ 1,348,779 Liabilities: Accounts payable $ 31 $ 8,542 $ 8,573 $ - Funds held for others 1,162,700 647,193 461,114 1,348,779 Total Liabilities $ 1,162,731 $ 655,735 $ 469,687 $ 1,348,779 CFD # 2 Los Ranchos Assets: Pooled cash and investments $ 3,950,682 $ 2,680,152 $ 3,359,016 $ 3,271,818 Receivables: Accrued interest 526 842 526 842 Special assessments 22,286 19,286 22,286 19,286 Restricted assets: Cash and investments with fiscal agents 1,680,037 1,791,493 1,794,713 1,676,817 Total Assets $ 5,653,531 $ 4,491,773 $ 5,176,541 $ 4,968,763 Liabilities: Accounts payable $ 226 $ 16,511 $ 16,737 $ - Funds held for others 5,653,305 4,475,262 5,159,804 4,968,763 Total Liabilities $ 5,653,531 $ 4,491,773 $ 5,176,541 $ 4,968,763 124 CITY OF CHINO HILLS COMBINING STATEMENT OF CHANGES IN ASSETS AND LIABILITIES ALL AGENCY FUNDS YEAR ENDED JUNE 30, 2017 (CONTINUED) Balance Balance 7/1/2016 Additions Deductions 6/30/2017 CFD # 4 The Oaks Assets: Pooled cash and investments $ 9,963,884 $ 195,386 $ 4,463,304 $ 5,695,966 Receivables: Accrued interest 1,312 669 1,312 669 Special assessments 283 1,441 283 1,441 Restricted assets: Cash and investments with fiscal agents 416,665 79 239,951 176,793 Total Assets $ 10,382,144 $ 197,575 $ 4,704,850 $ 5,874,869 Liabilities: Accounts payable $ 5 $ 14,560 $ 14,565 $ - Funds held for others 10,382,139 183,015 4,690,285 5,874,869 Total Liabilities $ 10,382,144 $ 197,575 $ 4,704,850 $ 5,874,869 CFD # 5 Rincon Village Assets: Pooled cash and investments $ 2,922,526 $ 2,676,593 $ 2,340,928 $ 3,258,191 Receivables: Accrued interest 385 919 385 919 Special assessments 34,693 20,381 34,693 20,381 Restricted assets: Cash and investments with fiscal agents 1,999,526 2,172,885 2,172,376 2,000,035 Total Assets $ 4,957,130 $ 4,870,778 $ 4,548,382 $ 5,279,526 Liabilities: Accounts payable $ 719 $ 15,877 $ 16,596 $ - Funds held for others 4,956,411 4,854,901 4,531,786 5,279,526 Total Liabilities $ 4,957,130 $ 4,870,778 $ 4,548,382 $ 5,279,526 CFD # 6 Carbon Canyon Assets: Pooled cash and investments $ 1,293,858 $ 314,404 $ 229,289 $ 1,378,973 Receivables: Accrued interest 170 204 170 204 Special assessments 5,651 3,170 5,651 3,170 Restricted assets: Cash and investments with fiscal agents 201,982 193,886 200,589 195,279 Total Assets $ 1,501,661 $ 511,664 $ 435,699 $ 1,577,626 Liabilities: Accounts payable $ 43 $ 3,847 $ 3,890 $ - Funds held for others 1,501,618 507,819 431,811 1,577,626 Total Liabilities $ 1,501,661 $ 511,666 $ 435,701 $ 1,577,626 125 CITY OF CHINO HILLS COMBINING STATEMENT OF CHANGES IN ASSETS AND LIABILITIES ALL AGENCY FUNDS YEAR ENDED JUNE 30, 2017 Balance Balance CFD # 8 Butterfield Assets: Pooled cash and investments $ 229,601 $ 88,756 $ 28,156 $ 290,201 Receivables: Accrued interest 29 54 29 54 Special assessments 565 1,153 565 1,153 Restricted assets: Cash and investments with fiscal agents 103,891 35 25,484 78,442 Total Assets $ 334,086 $ 89,998 $ 54,234 $ 369,850 Liabilities: Accounts payable $ 1 $ 3,228 $ 3,229 $ - Funds held for others 334,085 86,769 51,004 369,850 Total Liabilities $ 334,086 $ 89,997 $ 54,233 $ 369,850 CFD # 9 Rincon Village Assets: Pooled cash and investments $ 801,877 $ 925,408 $ 864,187 $ 863,098 Receivables: Accrued interest 106 233 106 233 Special assessments 11,211 10,725 11,211 10,725 Restricted assets: Cash and investments with fiscal agents 491,500 588,138 587,922 491,716 Total Assets $ 1,304,694 $ 1,524,504 $ 1,463,426 $ 1,365,772 Liabilities: Accounts payable $ 662 $ 8,978 $ 9,640 $ - Funds held for others 1,304,032 1,515,525 1,453,785 1,365,772 Total Liabilities $ 1,304,694 $ 1,524,503 $ 1,463,425 $ 1,365,772 CFD # 10 Fairfield Ranch Assets: Pooled cash and investments $ 895,848 $ 1,014,972 $ 990,876 $ 919,944 Receivables: Accrued interest 118 99 118 99 Special assessments 8,969 6,545 8,969 6,545 Restricted assets: Cash and investments with fiscal agents 981,750 927,938 927,938 981,750 Total Assets $ 1,886,685 $ 1,949,554 $ 1,927,901 $ 1,908,338 Liabilities: Accounts payable $ 500 $ 6,276 $ 6,776 $ - Funds held for others 1,886,185 1,943,278 1,921,125 1,908,338 Total Liabilities $ 1,886,685 $ 1,949,554 $ 1,927,901 $ 1,908,338 126 CITY OF CHINO HILLS COMBINING STATEMENT OF CHANGES IN ASSETS AND LIABILITIES ALL AGENCY FUNDS YEAR ENDED JUNE 30, 2017 (CONTINUED) Balance Balance 7/1/2016 Additions Deductions 6/30/2017 General Agency Fund Assets: Pooled cash and investments $ 8,770,554 $ 11,869,572 $10,380,627 $ 10,259,499 Receivables: Accounts 150 71 150 71 Total Assets $ 8,770,704 T1 $10,380,627 $ 10,259,570 Liabilities: Accounts payable $ 962,346 $ 7,785,761 $ 8,464,753 $ 283,354 Deposits payable 3,381,742 3,535,897 3,151,518 3,766,121 Due to other governments - 34,662 34,662 Funds held for others 41,220 2,575,675 2,577,635 39,260 Due to Inland Empire Utility Agency 4,385,396 6,753,492 5,002,715 6,136,173 Total Liabilities $ 8,770,704 $ 20,685,487 $19,196,621 $ 10,259,570 RAD 10-1 Assets: Pooled cash and investments $ 550,946 $ 551,063 $ 705,849 $ 396,160 Receivables: Accrued interest 72 142 72 142 Special assessments 2,263 2,626 2,263 2,626 Restricted assets: Cash and investments with fiscal agents 350,501 664,747 664,594 350,654 Total Assets $ 903,782 $ 1,218,578 $ 1,372,778 $ 749,582 Liabilities: Accounts payable $ 820 $ 13,574 $ 14,394 $ - Funds held for others 902,962 1,205,003 1,358,383 749,582 Total Liabilities $ 903,782 $ 1,218,577 $ 1,372,777 $ 749,582 CFD Vila Borba Assets: Pooled cash and investments $ 589,725 $ 280,643 $ 192,300 $ 678,068 Receivables: Accrued interest - 73 - 73 Special assessments - 2,629 - 2,629 Total Assets $ 589,725 $ 283,345 $ 192,300 $ 680,770 Liabilities: Accounts payable $ 5,697 $ 125,176 $ 125,564 $ 5,309 Due to other governments - 257 - 257 Funds held for others 584,028 157,912 66,736 675,204 Total Liabilities $ 589,725 $ 283,345 $ 192,300 $ 680,770 127 CITY OF CHINO HILLS COMBINING STATEMENT OF CHANGES IN ASSETS AND LIABILITIES ALL AGENCY FUNDS YEAR ENDED JUNE 30, 2017 Balance Balance Totals -All Agency Funds Assets: Pooled cash and investments Receivables: Accounts Accrued interest Special assessments Restricted assets: Cash and investments with fiscal agents Total Assets Liabilities: Accounts payable Deposits payable Due to other governments Funds held for others Due to Inland Empire Utility Agency Total Liabilities $ 30,726,935 $ 21,036,690 $24,090,893 $ 27,672,732 150 71 150 71 2,818 3,522 2,818 3,522 96,829 73,083 96,829 73,083 6,947,157 6,553,487 6,827,538 6,673,106 $ 37,773,889 $ 27,666,853 $31,018,228 $ 34,422,514 $ 971,050 $ 8,002,330 $ 8,684,717 $ 288,663 3,381,742 3,535,897 3,151,518 3,766,121 - 34,919 - 34,919 29,035,701 18,156,059 22,995,122 24,196,638 4,385,396 6,753,492 5,002,715 6,136,173 $ 37,773,889 $ 36,482,697 $39,834,072 $ 34,422,514 128 CITY OF CHINO HILLS cdd�aLN 25 YEARS OF EXCELLENCE Statistical Section i (.rhino Hills This page intentionally left blank. 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 Pape 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. 1 Net Position by Component 132 2 Changes in Net Position 134 3 Fund Balances of Governmental Funds 136 4 Changes in Fund Balances of Governmental Funds 138 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 6 Assessed Value and Estimated Actual Value of Taxable Property 7 Direct and Overlapping Property Tax Rates 8 Principal Property Tax Payers 9 Property Tax Levies and Collections 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. 144 145 146 147 148 10 Ratios of Outstanding Debt by Type 150 11 Ratios of General Bonded Debt Outstanding 151 12 Direct and Overlapping Governmental Activities Debt 153 13 Legal Debt Margin Information 154 14 Pledged -Revenue Coverage 156 Demographic and Economic Information - These schedules offer demographic and economic indicators to help the reader understand the environment within which the City's financial activities take place and to help make comparisons over time and with other governments. 15 Demographic and Economic Statistics 160 16 Principal Employers 161 Operating 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. 17 Full -Time -Equivalent City Government Employees by Function/Program 164 18 Operating Indicators by Function/Program 166 19 Capital Assets Statistics by Function/Program 168 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. 129 i Chino Hills This page intentionally left blank. 130 Financial Trends 131 Schedule 1 City of Chino Hills Net Position By Component Last Ten Fiscal Years (accrual basis of accounting) Government activities Net investment in capital assets Restricted Unrestricted Total governmental activities net position Business -type activities Net investment in capital assets Restricted Unrestricted Total business -type activities net position Primary government Net investment in capital assets Restricted Unrestricted Total primary government activities net position Fiscal Year 2008 2009 2010 2011 $ 276,239,662 $ 281,960,122 $ 269,350,904 $ 260,831,157 32,100,028 25,515,988 29,238,969 28,772,733 45,419,424 25,998,601 22,734,986 27,033,352 $ 353,759,114 $ 333,474,711 $ 321,324,859 $ 316,637,242 $ 111,270,111 $ 115,321,588 $ 112,236,094 $ 112,137,003 895,629 891,908 891,788 891,788 76,600,187 75,891,932 77,050,459 61,421,913 $ 188,765,927 $ 192,105,428 $ 190,178,341 $ 174,450,704 $ 387,509,773 $ 397,281,710 $ 381,586,998 $ 372,968,160 32,995,657 26,407,896 30,130,757 29,664,521 122,019,611 101,890,533 99,785,445 88,455,265 $ 542,525,041 $ 525,580,139 $ 511,503,200 $ 491,087,946 132 Fiscal Year 2012 2013 2014 2015 2016 2017 $ 261,743,969 $ 255,042,440 $ 258,323,150 $ 249,001,625 $257,467,380 $ 246,504,929 29,588,207 26,542,013 39,055,709 40,314,648 42,938,942 63,223,237 20,099,061 16,580,294 6,485,403 (12,698,180) 326,593 23,694,706 $ 311,431,237 $ 298,164,747 $ 303,864,262 $ 276,618,093 $ 300,732,915 $ 333,422,872 $ 110,459,489 $ 105,233,109 $ 107,786,808 $ 100,578,841 $ 98,352,645 $ 97,054,149 891,788 4,677,531 4,677,531 3,455,102 1,120,375 1,120,375 65,305,916 70,842,686 74,704,941 99,643,000 108,675,683 108,541,390 $ 176,657,193 $ 180,753,326 $ 187,169,280 $ 203,676,943 $ 208,148,703 $ 206,715,914 $ 372,203,458 $ 360,275,549 $ 366,109,958 $ 349,580,466 $ 355,820,025 $ 343,559,078 30,479,995 31,219,544 43,733,240 41,435,023 44,059,317 64,343,612 85,404,977 87,422,980 81,190,344 89,279,547 109,002,276 132,236,096 $ 488,088,430 $ 478,918,073 $ 491,033,542 $ 480,295,036 $ 508,881,618 $ 540,138,786 133 Schedule 2 City of Chino Hills Changes in Net Position Last Ten Fiscal Years (accrual basis of accounting) Expenses Governmental Activities: General government Public safety Public works Community development Community services Interest on long-term debt Total Governmental Activities expenses Business -Type Activities: Water utility Sewer utility Total Business -Type Activities Expenses Total Primary Government Expenses Program Revenues Governmental Activities: Charges for services: General government Public safety Public works Community development Community services Operating Contributions and Grants Capital Contributions and Grants Total Governmental Activities Program Revenues Business -Type Activities: Charges for services: Water utility Sewer utility Capital Contributions and Grants Total Business -Type Activities Program Revenues Total Primary Government Program Revenues Fiscal Year 2008 2009 2010 2011 $ 7,361,372 $ 10,579,750 $ 9,614,408 $ 8,966,318 10,182,888 11,555,310 11,676,798 11,455,829 29,007,194 34,757,045 28,555,064 40,156,027 2,818,026 10,683,874 4,211,927 5,057,949 4,347,447 4,812,362 4,796,904 4,651,993 2,264,125 1,928,581 1,329,331 1,272,852 55,981,052 74,316,922 60,184,432 71,560,968 46,851,938 29,351,382 30,007,576 27,842,500 17,942,005 20,469,370 23,239,765 20,834,162 4,968,864 5,797,290 5,867,079 6,209,880 22,910,869 26,266,660 29,106,844 27,044,042 $ 78,891,921 $ 100,583,582 $ 89,291,276 $ 98,605,010 $ 5,776,175 $ 5,881,060 $ 5,962,565 $ 4,487,857 672,677 631,906 637,055 600,952 4,892,044 4,836,932 4,876,544 6,824,803 2,058,372 1,071,103 704,708 778,031 1,125,427 1,204,544 1,079,171 1,191,777 5,607,412 6,508,561 6,599,618 4,706,518 26,719,831 9,217,276 10,147,915 9,252,562 46,851,938 29,351,382 30,007,576 27,842,500 18,170,451 18,865,858 18,155,780 18,068,634 4,838,131 5,311,713 5,483,049 5,490,532 11,031,613 5,609,994 267,792 - 34,040,195 29,787,565 23,906,621 23,559,166 $ 80,892,133 $ 59,138,947 $ 53,914,197 $ 51,401,666 134 Fiscal Year 2012 2013 2014 2015 2016 2017 $ 10,796,216 $ 12,681,538 $ 10,724,167 $ 7,456,698 $ 7,369,304 $ 11,702,452 11,776,645 12,433,463 11,232,499 11,759,297 12,728,967 13,281,560 30,528,964 31,123,891 32,569,871 36,612,361 35,980,415 35,562,526 2,097,640 3,241,108 3,235,758 4,211,200 6,603,170 4,892,784 4,702,555 4,741,588 4,996,597 6,658,170 7,266,899 7,765,794 1,090,459 1,080,370 1,077,310 971,895 500,900 115,382 60,992,479 65,301,958 63,836,202 67,669,621 70,449,655 73,320,498 32,985,982 28,610,527 42,777,050 39,777,707 67,296,465 61,118,042 21,540,857 22,337,387 21,634,599 10,932,290 20,647,992 22,914,640 6,398,875 6,746,884 7,136,383 7,812,499 8,281,415 8,899,602 27,939,732 29,084,271 28,770,982 18,744,789 28,929,407 31,814,242 $ 88,932,211 $ 94,386,229 $ 92,607,184 $ 86,414,410 $ 99,379,062 $ 105,134,740 $ 4,657,938 $ 5,427,630 $ 6,256,739 $ 9,328,173 $ 10,280,428 $ 10,376,287 562,197 497,527 504,866 542,578 497,023 438,268 6,932,375 7,226,137 13,224,578 13,051,322 13,245,578 13,711,455 619,127 749,902 1,301,891 2,723,488 4,322,080 5,304,386 1,163,550 1,216,579 1,314,795 1,414,666 1,420,515 1,529,095 6,283,871 4,460,740 3,167,809 3,724,886 3,237,409 2,297,562 12,766,924 9,032,012 17,006,372 8,992,594 34,293,432 27,460,989 32,985,982 28,610,527 42,777,050 39,777,707 67,296,465 61,118,042 20,922,012 23,942,745 26,896,617 27,208,741 24,113,123 25,858,588 5,553,029 5,870,168 6,241,264 6,522,726 6,894,275 7,497,776 323,789 27,756 - 10,770 76,999 8,398 26,798,830 29,840,669 33,137,881 33,742,237 31,084,397 33,364,762 $ 59,784,812 $ 58,451,196 $ 75,914,931 $ 73,519,944 $ 98,380,862 $ 94,482,804 135 Schedule 2 City of Chino Hills Changes in Net Position, (continued) Last Ten Fiscal Years (accrual basis of accounting) Intergovernmental, unrestricted Motor Vehicle In Lieu - unrestricted 348,740 Fiscal Year 231,590 361,339 2008 2009 2010 2011 Net (Expense)/Revenue Gain (loss) on sale of capital assets (4,172,567) - - Governmental Activities $ (9,129,114) $ (44,965,540) $ (30,176,856) $ (43,718,468) Business -Type Activities 11,129,326 3,520,905 (5,200,223) (3,484,876) Total primary Government Net Expense $ 2,000,212 $ (41,444,635) $ (35,377,079) $ (47,203,344) General Revenues and Other Charges in Net Position Business -Type Activities 13,766,086 3,339,501 (1,927,087) Governmental Activities: Total Primary Government $ 26,487,061 $ (16,944,902) $ (10,071,723) Taxes: Property taxes, levied for general purpose $ 9,854,421 $ 10,314,989 $ 10,026,487 $ 10,192,744 Sales taxes 5,458,545 5,984,767 5,907,670 6,422,617 Franchise taxes 2,133,061 2,447,581 2,410,856 2,039,246 Other taxes 878,910 720,461 920,207 925,663 Intergovernmental, unrestricted Motor Vehicle In Lieu - unrestricted 348,740 268,308 231,590 361,339 Use of money and property 6,929,444 2,753,401 1,598,863 1,454,225 Gain (loss) on sale of capital assets (4,172,567) - - 5,645 Other revenues and transfers 419,535 2,191,630 936,547 1,064,712 Total Governmental Activities 21,850,089 24,681,137 22,032,220 22,466,191 Business -Type Activities Use of money and property 2,636,760 1,510,927 929,857 372,899 Other revenues and transfers - (1,692,331) 2,343,279 3,949,000 Total Business -Type Activities 2,636,760 (181,404) 3,273,136 4,321,899 Total Primary Government $ 24,486,849 $ 24,499,733 $ 25,305,356 $ 26,788,090 Changes in Net Position Governmental Activities $ 12,720,975 $ (20,284,403) $ (8,144,636) $ (21,252,277) Business -Type Activities 13,766,086 3,339,501 (1,927,087) 837,023 Total Primary Government $ 26,487,061 $ (16,944,902) $ (10,071,723) $ (20,415,254) 136 Fiscal Year 2012 2013 2014 2015 2016 2017 $ (28,006,497) $ (36,691,431) $ (21,059,152) $ (27,891,914) $ (3,153,190) $ (12,202,456) (1,140,902) 756,398 4,366,899 14,997,448 2,154,990 1,550,520 $ (29,147,399) $ (35,935,033) $ (16,692,253) $ (12,894,466) $ (998,200) $ (10,651,936) $ 10,236,250 $ 10,512,688 $ 11,009,485 $ 11,583,735 $ 12,028,812 $ 12,604,842 6,670,479 6,875,104 7,002,758 7,530,159 7,072,833 7,595,570 2,127,570 2,233,274 2,312,330 2,381,049 2,363,758 2,208,116 966,260 1,092,271 1,301,656 1,366,301 1,734,224 1,603,972 39,069 40,482 33,503 32,363 31,309 35,331 1,324,713 638,787 1,377,025 1,542,399 2,244,674 826,728 381,015 - 220 3,923 449,255 9,118,602 - 1,916,363 2,484,754 1,498,097 1,343,147 6,944,186 21,745,356 23,308,969 25,521,731 25,938,026 27,268,012 40,937,347 311,535 94,366 688,980 774,420 1,418,149 138,868 4,026,926 3,589,823 1,360,075 735,795 898,621 1,309,568 4,338,461 3,684,189 2,049,055 1,510,215 2,316,770 1,448,436 $ 26,083,817 26,993,158 27,570,786 27,448,241 29,584,782 42,385,783 $ (6,261,141) (13,382,462) 4,462,579 (1,953,888) 24,114,822 28,734,891 3,197,559 4,440,587 6,415,954 16,507,663 4,471,760 2,998,956 $ (3,063,582) $ (8,941,875) $ 10,878,533 $ 14,553,775 $ 28,586,582 $ 31,733,847 137 Schedule 3 City of Chino Hills Fund Balances of Governmental Funds Last Ten Fiscal Years (modified accrual basis of accounting) General Fund Reserved Unreserved Nonspendable Restricted Committed Assigned Unassigned Total General Fund All other governmental funds Reserved Unreserved, reported in: Special Revenue Funds Capital Project Fund Nonspendable Restricted Committed Assigned Unassigned Total all other governmental funds 2008 Fiscal Year 2009 2010 2011 $ 764,706 $ 6,349,837 $ 17,831,272 $ 40,886,532 14,803,786 2,345,226 4,998,291 16,050,340 843,616 $ 41,651,238 $ 21,153,623 $ 20,176,498 $ 21,892,247 $ 30,945,202 $ 9,248,464 $ 15,727,160 $ - 15,685,432 16,629,699 13,297,242 - (15,420,655) (1,245,728) (926,552) - - - - 10,219,315 - - - 23,774,442 - - - (3,811,871) $ 31,209,979 $ 24,632,435 $ 28,097,850 $ 30,181,886 138 Fiscal Year 2012 2013 2014 2015 2016 2017 9,646,249 8,715,323 24,592,147 21,089,734 33,786,116 1,617,555 36,962,090 1,947,844 40,863,774 55,886,963 (9,227,775) (8,265,078) (7,494,821) (7,970,786) (6,669,785) $ 25,010,621 $ 21,539,979 $ 27,908,850 $ 30,939,148 $ 34,193,989 139 $ 55,886,963 28,262 216,615 87,933 518,432 766,204 185,994 4,996,060 5,452,279 5,269,593 3,352,558 2,075,168 7,336,274 14,424,090 12,932,490 14,164,391 16,292,529 22,539,530 19,071,040 14,424,090 12,932,490 14,164,391 1,947,844 1,574,594 2,757,408 - - - - - 14,103,222 $ 33,872,502 $ 31,533,874 $ 33,686,308 $ 22,111,363 $ 26,955,496 $ 43,453,938 9,646,249 8,715,323 24,592,147 21,089,734 33,786,116 1,617,555 36,962,090 1,947,844 40,863,774 55,886,963 (9,227,775) (8,265,078) (7,494,821) (7,970,786) (6,669,785) $ 25,010,621 $ 21,539,979 $ 27,908,850 $ 30,939,148 $ 34,193,989 139 $ 55,886,963 Schedule 4 City of Chino Hills Changes in Fund Balances of Governmental Funds Last Ten Fiscal Years (modified accrual basis of accounting) Revenues: Taxes Special Assessments Licenses and permits Intergovernmental Charges for services Development fees Contribution from property owners Fines and forfeiture Contributions Use of money and property Miscellaneous Total revenues Expenditures: Current: General government Public safety Public works Community development Community services Capital outlay Debt service: Principal retirement Interest and fiscal charges Fiscal Year 2008 2009 2010 2011 $ 17,908,191 $ 18,751,902 $ 18,888,204 $ 19,487,208 5,460,976 5,542,087 5,633,526 5,583,774 2,058,372 1,071,103 704,708 775,396 5,708,213 5,180,627 9,200,512 5,139,364 11,680,879 12,074,131 12,089,281 8,045,333 3,625,482 1,128,996 490,784 399,643 10,119,918 2,484,988 1,090,164 5,323,963 660,764 620,764 626,154 590,108 10,792,870 Transfers out (11,059,192) 176,417 6,725,920 2,629,808 1,533,085 1,967,098 1,738,161 1,350,624 2,033,235 1,849,580 65,686,876 50,835,030 52,289,653 49,337,884 6,818,907 7,915,221 7,923,217 7,312,478 10,172,046 11,413,644 11,402,849 11,181,880 20,083,124 18,396,664 17,941,401 21,170,100 5,999,367 16,772,629 4,356,509 10,966,003 3,235,419 3,381,221 3,317,984 3,151,003 56,654,818 31,655,842 4,949,091 3,164,855 679,693 679,272 482,925 5,035,722 2,257,988 1,635,520 1,314,620 1,260,856 Total expenses 105,901,362 91,850,013 51,688,596 63,242,897 Excess (deficiency) of revenues over (under) expenditures (40,214,486) (41,014,983) 601,057 (13,905,013) Other financing sources (uses): Transfers in 11,059,192 22,815,140 7,474,593 10,792,870 Transfers out (11,059,192) (21,036,742) (5,895,823) (9,719,760) Long term debt issued 1,079,258 12,161,426 308,463 61,383 Proceeds from sale of capital asset - - - 5,645 Total other financing sources (uses) 1,079,258 13,939,824 1,887,233 1,140,138 Net change in fund balances / net position Debt service as a percentage of noncapital expenditures $ (39,135,228) $ (27,075,159) $ 2,488,290 $ (12,764,875) 6.3% 3.3% 3.8% 10.5% (1) The outstanding balance of $14,175,000 for the 2007 Certificates of Participation for the Civic Center Interir 140 Fiscal Year 2012 2013 2014 2015 2016 2017 $ 19,964,017 $ 20,730,381 $ 21,686,794 $ 22,624,279 $ 24,194,441 $ 24,012,500 5,607,189 5,610,517 5,624,722 6,464,550 8,868,555 10,430,569 616,552 748,552 1,301,564 1,528,812 2,658,148 3,626,145 6,278,950 5,433,206 7,918,110 6,585,706 7,893,140 7,245,712 8,025,562 13,235,670 14,778,998 18,899,986 20,882,300 21,427,834 370,241 387,930 7,018,831 930,066 10,128,975 14,754,242 5,526,955 2,039,554 4,901,472 484,996 1,089,475 215,658 553,343 487,636 497,059 533,483 489,111 429,545 198,192 416,186 163,876 2,234,046 13,978,152 39,855 5,597,565 642,015 1,329,709 1,492,634 2,152,174 830,563 999,636 2,001,482 2,084,928 1,517,224 1,446,536 6,613,531 53,738,202 51,733,129 67,306,063 63,295,782 93,781,007 89,626,154 8,040,290 9,814,578 9,213,715 9,484,876 8,412,559 9,659,283 11,507,388 12,168,998 10,967,517 11,494,913 12,462,663 13,049,393 11,837,707 20,676,443 22,585,727 26,457,085 25,657,267 25,703,055 11,307,897 3,258,637 3,463,005 4,277,307 6,609,782 5,004,181 3,390,905 3,262,428 3,586,690 5,148,498 5,606,869 6,302,094 4,084,866 6,375,854 6,081,977 2,128,126 6,351,244 2,256,572 9,610,034 859,738 6,154,570 1,094,853 19,797,657 1,899,997 1,118,605 1,082,786 1,088,276 979,592 801,776 115,140 60,897,692 57,499,462 63,141,477 61,065,250 85,699,817 63,989,715 (7,159,490) (5,766,333) 4,164,586 2,230,532 8,081,190 25,636,439 10,179,224 6,335,040 7,251,636 10,339,681 9,711,763 5,573,127 (9,107,954) (5,142,344) (5,883,060) (8,920,080) (8,368,616) (4,868,032) 117,433 24,952 18,361 13,022 622,481 265,987 - - 18,791 8,745 - 11,583,895 1,188,703 1,217,648 1,405,728 1,441,368 1,965,628 12,554,977 $ (5,970,787) $ (4,548,685) $ 5,570,314 $ 3,671,900 $ 10,046,818 $ 38,191,416 18.8% 3.8% 12.7% 3.5% 26.0% 3.3% n Financing Project was fully refunded in fiscal year 2015-16. 141 i Chino Hills This page intentionally left blank. 142 Revenue Capacity 143 Schedule 5 City of Chino Hills Water Revenue - Charges for Services Last Ten Fiscal Years Fiscal Year (1) 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Residential Commercial Government Reclaimed Service Service Service Water Other Charge Charge Charge Charge Charges Total $ 11,757,737 $ 3,236,899 $ 1,171,397 N/A $1,619,744 $ 17,785,777 11,989,919 3,434,330 1,165,995 N/A 314,977 16,905,221 12,721,619 3,312,889 1,380,924 N/A 240,358 17,655,790 13,380,074 3,120,412 1,342,925 N/A 225,224 18,068,634 15,008,633 3,759,938 1,921,614 N/A 231,829 20,922,013 17,010,320 4,384,772 2,290,266 N/A 257,387 23,942,745 18,805,819 5,116,387 2,717,016 N/A 257,395 26,896,617 19,070,284 5,374,286 2,525,850 N/A 238,321 27,208,741 17,313,747 4,658,550 1,885,061 N/A 255,766 24,113,124 18,240,058 4,406,061 1,916,795 1,040,125 (2) 255,549 25,858,588 Source: City Finance Department. Note (1): From fiscal years 2008-10 Water Revenue- Charges for Services totals include revenue figures from the Water Facilities Fee Fund. Beginning in fiscal year 2011, the Water Facilities Fee Fund activity was excluded and reported separately as a non -major government fund. Note (2): Beginning in fiscal year 2016-17, reclaimed water charges were separately accounted for and no longer included in commercial and government service charges. 144 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 2008 $ 7,810,970 $ 444,779 $ 212,883 $ 91,761 $ 8,560,393 1.00 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 2013 7,967,288 657,551 326,670 92,393 9,043,902 1.00 2014 8,305,516 646,364 300,299 90,798 9,342,977 1.00 2015 8,911,568 653,794 302,185 88,716 9,956,263 1.00 2016 9,325,710 718,928 246,582 86,819 10,378,039 1.00 2017 9,756,826 803,558 236,466 88,066 10,884,916 1.00 Source: HDL Coren & Cone and San Bernardino County Assessor. 145 Schedule 7 City of Chino Hills Direct and Overlapping Property Tax Rates, Last Ten Fiscal Years (rate per $100 of assessed value) Source: County of San Bernardino Assessor. 146 City Direct Rates Overlapping Rates General Metropolitan San Fiscal Tax School Water Bernardino Year Levy District District County 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 - 2013 1.0000 0.0468 0.0035 - 2014 1.0000 0.0515 0.0035 - 2015 1.0000 0.0440 0.0035 - 2016 1.0000 0.0444 0.0035 - 2017 1.0000 0.0499 0.0035 Source: County of San Bernardino Assessor. 146 Schedule 8 City of Chino Hills Principal Property Tax Payers, Current Year and Nine Years Ago Taxpayer 2016-17 Percentage of Total City Taxable Taxable Assessed Assessed Value Rank Value 2007-08 Percentage of Total City Taxable Taxable Assessed Assessed Value Rank Value Chino Dunhill LLC $ 147,208,121 1 1.35% $ - - NF Chino Hills Associates LP 83,504,313 2 0.77% - - FHF I The Heights LLC 82,842,776 3 0.76% - - JSP Creekside LP 67,237,253 4 0.62% - - CRCH LLC 65,997,698 5 0.61% - - Missions at Chino Hills 53,349,000 6 0.49% - - Fairfield Chino Hills LP 51,821,134 7 0.48% - - YAH Investments LLC 46,621,606 8 0.43% - - Weingarten Nostat Inc 45,434,627 9 0.42% - - ROIC California 35,063,105 10 0.32% - - BRE Properties Inc - - 76,085,701 1 0.89% Woodview Chino Hills Apts Ltd - - 68,654,280 2 0.80% Lakha Props -Chino Hills LLC - - 65,271,446 3 0.76% Missions at Chino Hills - - 55,000,000 4 0.64% Village Oaks Inc - - 33,773,728 5 0.39% WRI Chino Hills LLC - - 31,998,215 6 0.37% Chino Hills Land West LLC - - 27,031,283 7 0.32% Meritage Homes of California Inc - - 24,473,565 8 0.29% 26 Del Sur Crossroads 1 LLC - - 24,239,000 9 0.28% Sears Roebuck and Company - - 23,772,066 10 0.28% Total $ 679,079,633 6.24% $ 430,299,284 5.03% Source: HDL Coren & Cone 147 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 (1) Amount of Levy Years (2) Amount of Levy 2008 $ 3,390,298 $ 2,980,778 87.9% $ 223,347 $ 3,204,125 94.5% 2009 3,571,077 3,194,990 89.5% 206,641 3,401,631 95.3% 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% 110,845 3,344,047 95.1% 2013 3,565,821 3,411,021 95.7% 163,919 3,574,940 100.3% 2014 3,691,033 3,582,627 97.1% 82,773 3,665,400 99.3% 2015 3,932,280 3,794,122 96.5% 78,381 3,872,503 98.5% 2016 4,101,732 4,000,104 97.5% 83,243 4,083,347 99.6% 2017 4,316,205 4,239,539 98.2% - 4,239,539 98.2% Sources: County of San Bernadino Auditor/Controller-Recorder. Note (1): The figures presented are specific to General Fund taxes only. These amounts do not include Community Facilities District Special Taxes or Assessment District assessments. Note (2) : Delinquent collections were modified in fiscal year 2015-16 to be presented in the year they were actually collected. Since these collections may include more than one delinquent years, the total collections to date could be more than 100 percent of the taxes levied for that fiscal year. 148 Debt Capacity 149 Schedule 10 City of Chino Hills Ratios of Outstanding Debt by Type, Last Ten Fiscal Years (dollars in thousands, except per capita) Business -type 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 15) for personal income and population data. 150 Governmental Activities Activities Certificates Certificates of Total Percentage Fiscal of Capital Participation/ Primary of Personal Per Year Participation Leases Revenue Bonds Government income' Capita a 2008 $ 22,084 $ - $ 21,108 $ 43,192 1.59% 550 2009 21,997 391 20,048 42,436 1.54% 539 2010 21,906 307 18,963 41,176 1.54% 521 2011 21,484 219 17,839 39,542 1.56% 525 2012 18,954 128 16,673 35,755 1.36% 473 2013 18,368 74 19,663 38,105 1.45% 501 2014 15,322 31 18,068 33,421 1.28% 439 2015 14,756 21 16,447 31,224 1.18% 411 2016 - 9 14,762 14,771 0.51% 174 2017 - - 13,022 13,022 0.48% 161 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 15) for personal income and population data. 150 Schedule 11 City of Chino Hills Ratios of General Bonded Debt Outstanding, Last Ten Fiscal Years (dollars in thousands, except per capita) Source: City Finance Department Notes: General bonded debt is debt payable with governmental fund resources. Details regarding the city's outstanding debt can be found in the notes to the financial a Assessed value has been used because the actual value of taxable property is not readily available. See Schedule 6 for assessed property value data. b See Demographic and Economic Statistics schedule (schedule 15) for personal income and population data. ° The outstanding balance of $14,175,000 for the 2007 Certificates of Participation for the Civic Center Interim Financing Project was fully refunded in fiscal year 2015-2016. 151 General Bonded Debt Outstanding Percentage Certificates of Assessed Fiscal of Value of Per Year Participation Property a Capita b 2008 $ 22,084 0.26% 281 2009 21,997 0.24% 279 2010 21,906 0.25% 277 2011 21,484 0.24% 285 2012 18,954 0.21% 251 2013 18,368 0.20% 242 2014 15,322 0.16% 201 2015 14,756 0.15% 194 2016 - C0.00% - 2017 - 0.00% - Source: City Finance Department Notes: General bonded debt is debt payable with governmental fund resources. Details regarding the city's outstanding debt can be found in the notes to the financial a Assessed value has been used because the actual value of taxable property is not readily available. See Schedule 6 for assessed property value data. b See Demographic and Economic Statistics schedule (schedule 15) for personal income and population data. ° The outstanding balance of $14,175,000 for the 2007 Certificates of Participation for the Civic Center Interim Financing Project was fully refunded in fiscal year 2015-2016. 151 i Chino Hills This page intentionally left blank. 152 Schedule 12 City of Chino Hills Direct and Overlapping Governmental Activities Debt As of June 30, 2017 Fiscal Year 2016-17 Assessed Valuation : 10,884,915,903 Total overlapping taxes and assessment debt 213,112,887 Overlapping General Fund Obligation Debt: San Bernardino County General Fund Obligations Debt % City's Share of Overlapping Tax and Assessment Debt: Outstanding Applicable (1) Debt 6/30/17 Metropolitan Water District $ 74,905,000 0.421% $315,350 Chaffey Community College District 144,865,000 11.049% 16,006,134 Chino Valley Unified School District 337,112,546 45.561% 153,596,403 City of Chino Hills - Community Facilities District No. 1 1,215,000 100.000% 1,215,000 City of Chino Hills - Community Facilities District No. 2 6,745,000 100.000% 6,745,000 City of Chino Hills - Community Facilities District No. 5 20,955,000 100.000% 20,955,000 City of Chino Hills - Community Facilities District No. 6 790,000 100.000% 790,000 City of Chino Hills - Community Facilities District No. 9 2,310,000 100.000% 2,310,000 City of Chino Hills - Community Facilities District No.10 9,890,000 100.000% 9,890,000 City of Chino Hills 1915 Act Bonds 1,290,000 100.000% 1,290,000 Total overlapping taxes and assessment debt 213,112,887 Overlapping General Fund Obligation Debt: San Bernardino County General Fund Obligations 399,400,000 5.567% 22,234,598 San Bernardino County Pension Obligations 379,612,328 5.567% 21,133,018 San Bernardino County Flood Control District General Fund Obligations 73,680,000 5.567% 4,101,766 Chaffey Community College District General Fund Obligations 10,725,666 11.049% 1,185,079 Chino Valley Unified School District Certificates of Participation 12,325,000 45.561% 5,615,393 West Valley Vector Control District Certificates of Participation 2,950,000 15.100% 451,645 Total overlapping general fund debt Subtotal, overlapping debt City of Chino Hills Direct Debt Total Direct and Overlapping Debt 54,721,499 267,834,386 18,370,545 (2) $ 286,204,931 (3) Source: California Municipal Statistics, Inc. and the City Finance Department Note: (1) Percentage of overlapping agency's assessed valuation located within boundaries of the city. (2) Details regarding the City's direct debt can be found in the notes to the financial statements. (3) Excludes tax and revenue anticipation notes, enterprise revenue, mortgage revenue and tax allocation bonds and non -bonded capital lease obligations. 153 Schedule 13 City of Chino Hills Legal Debt Margin Information, Last Ten Fiscal Years (dollars in thousands) Debt Limit Total net debt applicable to limit Legal debt margin Total net debt applicable to the limit as a percentage of debt limit 2008 2009 2010 2011 $ 1,284,059 $ 1,354,832 $ 1,329,548 $ 1,329,501 $ 1,284,059 $ 1,354,832 $ 1,329,548 $ 1,329,501 0.00% 0.00% 0.00% 0.00% 154 Legal Debt Margin Calculation for Fiscal Year 2016-17 Assessed value Debt limit (15% of assessed value) 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 $ 10,884,916 1,632,737 $ 1,632,737 Fiscal Year 2012 2013 2014 2015 2016 2017 $ 1,338,826 $ 1,356,585 $ 1,401,447 $ 1,493,439 $ 1,632,737 $ 1,632,737 $ 1,338,826 $ 1,356,585 $ 1,401,447 $ 1,493,439 $ 1,632,737 $ 1,632,737 0.00% 0.00% 0.00% 0.00% 155 0.00% 0.00% Schedule 14 City of Chino Hills Pledged -Revenue Coverage, Last Ten Fiscal Years (dollars in thousands) (3) In fiscal year 2010-11 the refunding of bonds related to Assessment Districts for $19.7 million has been excluded from this presentation. (4) In fiscal year 2012-13 the 2002 and 2003 Certificates of Participation were refunded and replaced by the 2012 Water Revenue Bonds. (5) The Community Facilities Districts No. 4 and No. 8 Series B bonds were fully paid off in fiscal year 2016-17. 156 Water Certificate of Participation/Revenue Bonds Utility Less: Net Fiscal Service Operating Available Debt Service Year Charges Expenses (1) Revenue Principal Interest Coverage 2007 20,379 13,087 7,292 1,125 qq6F 3.44 2008 21,262 14,445 6,817 1,145 974 3.22 2009 18,531 15,982 2,549 1,175 946 1.20 2010 20,931 16,207 4,724 1,200 916 2.23 2011 19,048 15,364 3,684 1,240 880 1.74 2012 22,878 16,588 6,290 1,280 839 2.97 2013 25,537 17,275 8,262 1,230 673 4.34 2014 28,558 18,180 10,378 1,645 585 4.65 2015 28,413 19,646 8,767 1,670 552 3.95 2016 26,000 19,354 6,646 1,735 485 2.99 2017 27,130 20,211 6,919 1,790 451 3.09 Source: City Finance Department Notes: (1) Operating expenses do not include interest, depreciation, or amortization (2) Details regarding the city's outstanding debt can be found in the notes to the financial statements. (3) In fiscal year 2010-11 the refunding of bonds related to Assessment Districts for $19.7 million has been excluded from this presentation. (4) In fiscal year 2012-13 the 2002 and 2003 Certificates of Participation were refunded and replaced by the 2012 Water Revenue Bonds. (5) The Community Facilities Districts No. 4 and No. 8 Series B bonds were fully paid off in fiscal year 2016-17. 156 157 Special Assessment Bonds Special Assessment Debt Service (2) Collections Principal Interest Coverage 13,826 4,019 3,327 1.88 11,591 4,339 4,051 1.38 11,192 6,799 3,846 1.05 11,801 4,734 3,579 1.42 11,348 8,691 3,391 0.94 (3) 11,570 5,535 2,421 1.45 11,026 5,700 2,234 1.39 (4) 10,335 6,334 2,040 1.23 8,957 6,293 1,841 1.10 8,592 4,660 1,802 1.33 8,073 4,920 1,906 1.18 (5) 157 i Chino Hills This page intentionally left blank. 158 Demographic and Economic Information 159 Schedule 15 City of Chino Hills Demographic and Economic Statistics, Last Ten Calendar Years 160 Personal Per Income (2) Capita Calendar (thousands Personal Unemployment Year Population (1) of dollars) Income (2) Rate (3) 2008 78,465 $ 2,714,954 $ 34,688 2.7% 2009 78,725 2,749,103 35,053 3.9% 2010 78,971 2,665,244 33,910 6.6% 2011 75,345 2,535,996 32,113 7.3% 2012 75,655 2,633,551 34,810 6.7% 2013 76,033 2,628,461 34,570 4.8% 2014 76,131 2,620,277 34,418 4.1% 2015 76,055 2,640,858 34,723 5.9% 2016 78,866 2,706,859 34,322 4.7% 2017 80,676 2,737,033 33,926 4.2% Sources: (1) Population - State of California/Department of Finance/Demographic Research Unit (2) HDL Coren & Cone (3) HDL Coren & Cone 160 Schedule 16 City of Chino Hills Principal Employers, Current Year and Nine Years Ago Employer Chino Valley Unified School District Costco City of Chino Hills Boys Republic Lowe's Home Improvement Kaiser Permanente Laboratory Albertson's Harkins Theatres Chino Valley Independent Fire District BXs Brewery Total 2017 2008 (1) (2) (3) Percentage Percentage Number of of Total City Number of of Total City Employees Rank Employment Employees Rank Employment 2,509 (4) 1 6.34% 1,408 1 n/a 321 2 0.81% 250 2 n/a 284 3 0.72% 230 3 n/a 237 4 0.60% 197 5 n/a 211 5 0.53% 250 2 n/a 190 6 0.48% n/a n/a n/a 178 7 0.45% 204 4 n/a 140 8 0.35% n/a n/a n/a 139 9 0.35% 122 6 n/a 126 10 0.32% n/a n/a n/a Source: Finance Department, and California Labor Market. Note: (1) Includes full-time, part-time, and contract employees. (2) Total city employment of 40,600 was provided by California Labor Market report. (3) Data for fiscal year 2007-08 is partially available. (4) Number of employees of the Chino Valley Unified School District changed due to information provided in prior years was calculated differently. 161 i Chino Hills This page intentionally left blank. 162 Operating Information 163 Schedule 17 City of Chino Hills Full -Time -Equivalent City Government Employees by Function/Program Function/Program General government Legislative City Manager Finance Code Enforcement Neighborhood Services Emergency Preparedness Public Safety Public Works Community Development Community Services Water Utility Sewer Utilitiy Full-time Equivalent Employees as of June 30 2008 2009 2010 2011 6 7 7 7 11 11 11 11 16 19 21 21 9 9 9 8 42 42 42 42 21 23 19 17 45 48 53 47 23 26 24 24 7 7 7 7 Tota 1 180 192 193 184 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. a In fiscal year 2013-14, Code Enforcement and Neighborhood Services divisions were reclassified from Public Safety to General Government, and the Emergency Preparedness division was reclassified from Communtiy Services to General Government to be consistent with financial statement presentation. b In fiscal year 2014-15, the Neighborhood Services division was eliminated and the employees were moved to other divisions within the City. The Information Technology division was moved from the Finance department to the City Manager's division in fiscal year 2016-17. 164 Full-time Equivalent Employees as of June 30 2012 2013 2014 2015 2016 2017 7 10 19 7 43 16 50 26 7 7 10 19 8 42 16 52 26 7 7 8 7 8 8 10 9 13 ° 18 19 18 15 3 a 4 4 4 6 a - b - - 1 a 1 1 1 a 45 15 52 a 27 7 41 16 53 26 7 185 187 189 185 165 42 43 16 16 53 52 24 27 8 8 182 187 Schedule 18 City of Chino Hills Operating Indicators by Function/Program, Last Ten Fiscal Years Function/Program General government Building permits issued Building inspections conducted Refuse collection Refuse collected (tons per day) Recyclables collected (tons per day) Other public works Street resurfacing (lane miles) Potholes repaired Water New connections Water main breaks Average daily consumption (million gallons) Peak daily consumption (million gallons) Sewage System Average daily sewage treatment (million gallons) Fiscal Year 2008 2009 2010 2011 1,559 1,047 947 1,097 8,713 6,252 5,081 4,516 186 172 170 171 75 75 72 50 41 19 27 20 105 66 50 65 85 36 66 22 40 24 11 8 15 16 16 14 28 27 27 26 8 3 3 3 Sources: Various City departments. (1) The variance between the fiscal years is due to change in methodology in calculating the information provided by Republic Services, for the refuse and recyclables collected during the fiscal year. 166 Fiscal Year 2012 2013 2014 2015 2016 2017 1,068 1,077 1,483 1,656 1,877 2,002 3,363 3,240 4,012 5,154 6,661 7,830 179 162 140 149 184 ��� 184 52 61 64 59 35 ��� 41 10 7 13 44 17 17 60 140 165 120 115 95 9 24 18 39 161 84 10 11 25 15 88 122 15 16 16 13 14 11 26 24 25 26 22 21 5 5 5 4 4 4 167 Schedule 19 City of Chino Hills Capital Asset Statistics by Function/Program, Last Ten Fiscal Years Function/Program Other public works (1) Streets (miles) Traffic signals Parks and recreation Parks Acreage Playgrounds Baseball/softball diamonds Soccer/football fields Community centers Water Water mains (miles) Fire hydrants Storage capacity (million gallons) Sewage System Sanitary sewers (miles) Storm drains (miles) Fiscal Year 2008 2009 2010 2011 170 170 170 170 48 49 54 55 40 40 40 40 255 255 255 255 28 28 28 28 8 8 8 8 7 7 7 7 5 5 5 5 250 250 302 302 2,610 1,805 2,137 2,137 38 38 38 38 202 220 189 189 104 104 104 104 Sources: Various city departments. Notes: (1) No capital asset indicators are available for the general government. (2) The total acreage for the parks was upated based on GIS information during fiscal year 2015-16, as compared to the estimates used in prior years. 168 Fiscal Year 2012 2013 2014 2015 2016 2017 170 172 172 172 198 197 55 55 55 55 54 54 41 41 42 42 42 42 255 255 263 263 320 320 (2) 28 28 28 28 27 27 9 9 9 9 9 9 12 12 12 12 12 12 5 5 5 5 5 5 317 319 302 302 315 305 2,186 2,186 2,185 2,185 2,010 2,035 39 40 39 39 40 40 202 202 202 202 195 202 83 83 83 83 90 91 169 i Chino Hills This page intentionally left blank. 170