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2010-2011 CAFR s°° City Of Chino Hills California CITY OF CHINO HILLS I N C O R P O R A T E D 1 9 9 1 COMPREHENSIVE ANNUAL FINANCIAL REPORT Fiscal Year Ended June 30, 2011 CITY OF CHINO HILLS, CALIFORNIA COMPREHENSIVE ANNUAL FINANCIAL REPORT FISCAL YEAR ENDED JUNE 30, 2011 Prepared by: Department of Finance iss144%. yr >< ,. ^* TSR •r;yyf R- •.• ;is.,-,0-rth4:-..;,*. iii._. CITY OF CHINO HILLS INCORPORATED 1 9 9 1 THIS PAGE INTENTIONALLY LEFT BLANK CITY OF CHINO HILLS COMPREHENSIVE ANNUAL FINANCIAL REPORT FOR THE FISCAL YEAR ENDED JUNE 30, 2011 TABLE OF CONTENTS Page Number INTRODUCTORY SECTION Letter of Transmittal Organizational Chart vi City Officials vii Certificate of Achievement for Excellence in Financial Reporting viii FINANCIAL SECTION INDEPENDENT AUDITORS' REPORT 1 MANAGEMENT'S DISCUSSION AND ANALYSIS 3 Government—Wide Financial Statements Statement of Net Assets 9 Statement of Activities 10 Fund Financial Statements Balance Sheet—Governmental Funds 12 Reconciliation of the Balance Sheet of Governmental Funds to the Statement of Net Assets 15 Statement of Revenues, Expenditures and Changes in Fund Balances—Governmental Funds 16 Reconciliation of the Statement of Revenues, Expenditures and Changes in Fund Balances of Governmental Funds to the Statement of Activities 19 Budgetary Comparison Statement—General Fund 20 Budgetary Comparison Statement—Landscape and Lighting District 21 Budgetary Comparison Statement—Existing Infrastructure Fees 22 Budgetary Comparison Statement—Water Facilities Fees 23 Statement of Net Assets— Proprietary Funds 24 Statement of Revenues, Expenses and Changes in Fund Net Assets— Proprietary Funds 27 Statement of Cash Flows— Proprietary Funds 28 Statement of Fiduciary Net Assets— Fiduciary Funds 30 Notes to Financial Statements 31 CITY OF CHINO HILLS COMPREHENSIVE ANNUAL FINANCIAL REPORT FOR THE FISCAL YEAR ENDED JUNE 30, 2011 TABLE OF CONTENTS Page Number COMBINING AND INDIVIDUAL FUND STATEMENTS AND SCHEDULES Combining Balance Sheet—Nonmajor Governmental Funds 67 Combining Statement of Revenues, Expenditures and Changes in Fund Balances—Nonmajor Governmental Funds 73 Budgetary Comparison Schedules Sleepy Hollow Road Improvement 79 General Facilities Fees 80 Traffic Facilities Fees 81 Storm Drain Facilities Fees 82 Parkland Fees 83 Traffic Signal Fees 84 Gas Tax 85 Air Quality 86 Federal Grants 87 Measure I 88 Solid Waste 89 Street Sweeping 90 Frontline Policing 91 Miscellaneous Grants 92 Affordable Housing Program 93 Prop 1B 94 Traffic Congestion Relief 95 Local Government Energy Efficiency CDBG 96 Sewer Facilities Fees 97 Capital Improvement 98 CFD#9 Rincon Village 99 CFD#10 Fairfield Ranch 100 New Community Center 101 Combining Statement of Net Assets— Internal Service Funds 102 Combining Statement of Revenues, Expenses and Changes in Fund Net Assets—Internal Service Funds 103 Combining Statement of Cash Flows— Internal Service Funds 104 Combining Balance Sheet—All Agency Funds 105 Combining Statement of Changes in Assets and Liabilities— All Agency Funds 109 CITY OF CHINO HILLS COMPREHENSIVE ANNUAL FINANCIAL REPORT FOR THE FISCAL YEAR ENDED JUNE 30, 2011 TABLE OF CONTENTS Page Number STATISTICAL SECTION Last Ten Fiscal Years Net Assets by Component 117 Changes in Net Assets 118 Fund Balances of Governmental Funds 121 Changes in Fund Balances of Governmental Funds 122 Water Revenue—Charges for Services 126 Assessed Value and Estimated Actual Value of Taxable Property 127 Direct and Overlapping Property Tax Rates 128 Principal Property Tax Payers 129 Property Tax Levies and Collections 130 Ratios of Outstanding Debt by Type 132 Direct and Overlapping Governmental Activities Debt 133 Legal Debt Margin Information 134 Pledged—Revenue Coverage 135 Demographic and Economic Statistics 138 Principal Employers 139 Full—Time—Equivalent City Government Employees by Function/Program 142 Operating Indicator by Function/Program 143 Capital Asset Statistics by Function/Program 144 tin • - ` r %l `•• t..Et f� yam`,` " Q„-.. s ib-s .(i ' ape art CITY OF CHINO HILLS ATED 1 9 9 THIS PAGE INTENTIONALLY LEFT BLANK 1 ._ III III 1 - - - • • I NT RO D UCTORY SECTION . 1 ______ (1., • Ffit Y.: { ilii ,. .� _r te r� • r i CITY OF CHINO HILLS INCORPORATED 1 9 9 1 I 110111.111.1111111111.1111) I iii 1 I I III I I November 7, 2011 The Honorable Mayor and City Council City of Chino Hills, California State law requires that all general-purpose local governments publish, within six months of the close of each fiscal year, a complete set of financial statements presented in conformity with generally accepted accounting principles (GAAP) and audited in accordance with auditing standards generally accepted in the United States of America by a firm of licensed certified public accountants. Pursuant to that requirement, we hereby issue the Comprehensive Annual Financial Report (CAFR) for the City of Chino Hills for the fiscal year ended June 30, 2011. This report consists of management's representations concerning the finances of the City of Chino Hills. Consequently, management assumes full responsibility for the completeness and reliability of the information presented in this report. To provide a reasonable basis for making these representations, management of the City of Chino Hills has established a comprehensive internal control framework that is designed both to protect the government's assets from loss, theft, or misuse and to compile sufficient reliable information for the preparation of the City of Chino Hills' financial statements in conformity with GAAP. Because the cost of internal controls should not outweigh their benefits, the City's comprehensive framework of internal controls has been designed to provide reasonable rather than absolute assurance that the financial statements are free from material misstatement. As management, we assert that, to the best of our knowledge and belief, this financial report is complete and reliable in all material respects. Lance, Soil, & Lunghard, LLP, a firm of licensed certified public accountants, has issued an unqualified ("clean") opinion of the City of Chino Hills' financial statements for the year ended June 30, 2011. The independent auditor's report is located at the front of the financial section of this report. Management's discussion and analysis (MD&A) immediately follows the independent auditor's report and provides a narrative introduction, overview, and analysis of the basic financial statements. This letter of transmittal complements the MD&A and the financial statements, and it should be read from that perspective and in conjunction with all other sections of the CAFR. City of Chino Hills Profile The City of Chino Hills was incorporated in December 1991 as a general law City and operates under the Council-Manager form of government. Chino Hills is located in southwestern San Bernardino County and is well known for its beautiful rural atmosphere and high quality of life. The population has grown from 42,000 to 75,345 in 20 years, and the community now enjoys 3,000 acres of publicly-owned open space, 40 parks, 39 miles of trails, and five community buildings. A non-partisan five-member council, elected to serve staggered four-year terms, governs the City. Elections are consolidated with the statewide general election held in November of even numbered years. The City Council appoints the City Manager, City Clerk, and City Attorney as well as members of various commissions and citizen advisory groups ensuring a broad base of citizen input into the City's decision- making process. Chino Hills is a family-friendly community with a diverse population. Residents appreciate the City's ranking as one of the safest cities in the United States. The City has attained a fair share of accolades and national recognition. In 2009, Chino Hills was ranked #13 on Morgan Quitno Press list of the top 25 "Safest Cities in the Nation." Money Magazine often reviews data and ranks communities. Chino Hills has been featured in the magazine as one of the top"100 Best Places to Live in the USA" (2005); and as #8 on the "America's Hottest Towns" list of "best places in the west with a population under 100,000" (2004). Most recently, the City has been recognized as one of the "100 Best Communities for Young People" for 2011 by the America's Promise Alliance. Chino Hills ranks high in the United States with a median household income of$100,371 according to the 2007-2009 American Community Survey conducted by the Census Bureau. Income levels are often linked to educational levels and the 2007-2009 American Community Survey found that 43.5% of residents over age 25 have bachelor's degrees or higher, including 14.3%with graduate degrees. Recreation is a priority in Chino Hills and Big League Dreams Chino Hills Sports Park is a destination for recreation. This 33-acre, multi-use sports facility provides adult softball and youth baseball players with an opportunity to play in a "Major League" replica stadium complete with lifelike fans in the bleachers. The venue attracts tournaments, visitors, and new commercial ventures to Chino Hills. The City is also home to the McCoy Equestrian and Recreation Center. This beautiful 20-acre facility includes two lighted arenas, covered bleachers, a gazebo, a community building, and trail connections. The McCoy Residence also serves as a venue for events. Chino Hills Community Park is the flagship park in the City. This 33-acre park features six ball fields for baseball or softball and five overlay soccer fields. Local sports teams can play their games even after inclement weather thanks to the synthetic field turf at the park. The City of Chino Hills provides a full range of services including: police protection (via contract with the County of San Bernardino County Sheriffs Department); solid waste disposal services (via contract with Chino Hills Disposal); the construction and maintenance of streets and infrastructure; economic development; recreational activities; and cultural events. The Chino Valley Independent Fire District, governed by its own independently-elected board of directors, provides fire protection and emergency medical services. The Fire District receives a share of the property tax and secures additional funding through contractual charges and other fees. The City's budget process includes the preparation of a five-year capital improvement plan (CIP). The CIP identifies major construction and equipment needs that are on the horizon. While the five-year CIP is a planning tool that is subject to change, it allows the City to prepare for and plan to fund all necessary infrastructure required for new residential and commercial development. Available funding for the installation of parks, infrastructure, and government facilities, and the maintenance of the City's open space, parks, and landscaped areas, comes from special assessment districts as well as benefit assessment districts and development fees. The City's budget policy provides for an orderly process that allows for the adoption of the annual budget by June 30 of each year. The City maintains a budget control system to ensure compliance with legal provisions embodied in the annual appropriated budget approved by the City Council. Activities of the General Fund, Special Revenue Funds, and Capital Project Funds are included in the annual appropriated budget. See Note 2 of the Notes to the Basic Financial Statements for additional information on budget procedures. Relevant Financial Policies There were no significant effects in the current year from the application of relevant financial policies. Local Economy The economic condition of the area in which the City is located (in southwestern San Bernardino County) points to future growth for the City of Chino Hills. However, in November 1999, the residents of Chino Hills voted in Proposition "U" that essentially states any new development proposed for a higher density than is allowed per the General Plan requires voter approval. This does not affect projects with densities equal to or lower than allowed per the General Plan or projects that already have approved tract maps. Chino Hills is one of the most desirable cities in the County of San Bernardino with median income nearly double the County average. The demand for residential construction will continue due to good schools, low crime, and the City's strong, positive reputation. In the 2010-11 fiscal year, 27 residential units were built as compared to 30 in 2009-10. For fiscal year 2011-12, the projection for new residential is 55 units. Because of the national recession, housing growth will continue to be slow. Housing growth will not return to the levels seen in 2001-2004 for several years. The City's population continues to grow steadily, rising from 42,691 in 1991 to an estimated 75,345 in 2011. The population growth in the City of Chino Hills has slowed significantly. The projected population is 81,700 at the end of the current five-year operating plan. Chino Hills' future is for continued growth given future development of the vacant land that remains under the General Plan, projects currently under consideration and the attractiveness of the Chino Hills marketplace. Economic development efforts over the past several years have proven successful in the strengthening of the City's revenue base. The additions of "The Shoppes at Chino Hills" Phase I and "The Commons at Chino Hills" projects have made significant impact on the City's sales tax revenues since opening in fiscal year 2008-09. "The Shoppes at Chino Hills" is a lifestyle center that is now the center of the community. The 360,000 square foot open-air lifestyle retail center is part of a 50 acre development. Phase I includes a combination of upscale retail stores, restaurants, and eateries. Major tenants include Barnes & Noble, Trader Joe's, XXI Forever, Victoria's Secret, Wood Ranch BBQ & Grill, and Yard House Restaurant. "The Commons at Chino Hills" is a partially developed 530,000 square foot freeway-oriented development on a 50 acre site. Major tenants include Lowes Home Improvement Center, Toys R' Us/Babies R' Us, The Ayers Hotel, Lucille's BBQ, and BJ's Brewhouse. These shopping centers are keeping Chino Hills' citizens shopping in Chino Hills and also bringing in customers from surrounding areas. Development projects completed during fiscal year 2010-11 are: (i) Country Club Medical Plaza - a 27,200 square-foot medical office building will provide approximately 16 offices for medical and dental sevices; (ii) Celamonte" - a 119-unit town home community; and (iii) Holiday Inn Express - a 99 room facility. Development projects under construction are the (i) B.A.P.S. Temple and Cultural Center — a Hindu Socio-Religious facility located on 20 acres; (ii) "The Commons at Chino Hills" - approximately 160,000 square feet of buildings have yet to be constructed; (iii) "Pine Valley Estates" - 44 homes of a 98 single- family residential project on a 25.8 acre site; and (iv) "Country Club Villas" - a 70-unit condominium development with 24 units built. Short-Term Outlook Fortunately for the City and in spite of the economic downturn, the overall impacts to the City have not been as severe compared to other parts of the state and country. Although the City of Chino Hills has been and continues to be strong financially, the potential fiscal impact of a recession could have an adverse impact on Chino Hills in the form of the State of California revenue reductions to local governments. iii The City of Chino Hills has maintained its strong financial position through prudent, long-range policy decisions and sound fiscal management. So far, Chino Hills' economic base has allowed the City to ride out the economic impact of the housing downturn with minimal impacts to service levels to date. The City will continue to monitor key economic indicators, sources of revenues, and spending levels as part of its sound conservative fiscal approach. Long-Term Goals, Efforts, and Actions Over the years, the City of Chino Hills has enjoyed a favorable economic environment with growth in both residential and commercial development, and with it the related revenues, including permit fees, development fees, property taxes, and sales taxes. The activity level has slowed significantly and the growth experience during the past several years subsided. The challenges presented by the demands of providing essential municipal services during a downturn in the growth cycle continue to be a principal challenge for Chino Hills. The development, clarification, and refinement of processes are vital to sustain the organization over the long term. Both the Operating and Capital Improvement budgets reflect the continued focus on maintenance of the City's existing infrastructure. This maintenance effort is critical, on a proactive basis, to minimize our costs over the long term. Major Initiatives The City of Chino Hills prepares a five-year financial projection of its Capital Improvement Program (CIP). The City continues an aggressive CIP effort utilizing staff and consultant resources to implement projects in a timely and cost effective manner. A coordinated approach to the CIP is critical to meet the facility and infrastructure needs of our current residents and businesses as well as the infrastructure needs that growth in Chino Hills will require. The CIP is not only a critical program element of the Engineering Department's objectives, but the entire organization's. The management and implementation of our CIP merits and will continue to receive the attention of the entire organization. The City's Long-Term CIP of$128,774,700 demonstrates its commitment to infrastructure improvements and consists of projects in the following categories: Streets $ 63,326,600 Public Facilities $ 8,408,100 Parks/Open Space $ 31,376,400 Water $ 14,351,500 Recycled Water $ 3,938,400 Sewer/Storm Drain $ 7,373,700 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, 2010. 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 (GMP) and applicable legal requirements. iv A Certificate of Achievement is valid for a period of one year only. We believe that our current Comprehensive Annual Financial Report conforms to the Certificate of Achievement Program's requirements, and we are submitting it to the GFOA to determine its eligibility for another certificate. The dedication of the Finance Department staff made it possible to prepare this report in a timely manner. We wish to express our appreciation to all members of the department who assisted and contributed to the preparation of this report. Credit also must be given to the Mayor and the City Council for their unfailing support for maintaining the highest standards of professionalism in the management of the City of Chino Hills'finances. Respectfully submitted, 44 'I, le4u,terAtt-u ichael S,, lea g er d R. ,ncaster City Manager inanceIFlirector V THE CITY OF CHINO HILLS ORGANIZATION OF CITY GOVERNMENT OPERATING SUMMARY City of Chino Hills I 1 City Council Various Commissions I I City Clerk City Manager City Attorney I I I I I Community Community Engineering Finance Public Works Services Department ( Department Department Development Department I Department vi CITY OF CHINO HILLS LIST OF ELECTED AND APPOINTED OFFICIALS ELECTED OFFICIALS - CITY COUNCIL Ed Graham Mayor Art Bennett Vice Mayor W.C. "Bill" Kruger Council Member Gwenn Norton-Perry Council Member Peter Rogers Council Member APPOINTED OFFICIALS Michael S. Fleager City Manager Kathleen Gotch Assistant City Manager Mary M. McDuffee City Clerk Mark D. Hensley City Attorney Joann Lombardo Community Development Director Judy R. Lancaster Finance Director Jonathan Marshall Community Services Director John Mura Public Works Director Steve Nix City Engineer vii Certificate of Achievement for Excellence in Financial Reporting Presented to City of Chino Hills California For its Comprehensive Annual Financial Report for the Fiscal Year Ended June 30, 2010 A Certificate of Achievement for Excellence in Financial Reporting is presented by the Government Finance Officers Association of the United States and Canada to government units and public employee retirement systems whose comprehensive annual financial reports(CAFRs)achieve the highest standards in government accounting and financial reporting. 5� �4„ ��er OF Di,E` S'SFANinosi r@A.2 fti 3 nit CANADA otS' President msµ. cooRPa1Anr, a CV Ago A / y7- - r /S Executive Director viii Z 0 Cid . ,_ a, c, ,� f}411•_r ~ - , ___'.\ Iiiiiii ...7.. .:.r,7Il.:.:v.'e li.t:.i.kg-.:.,..t.. 0z°.. 17,3 •• , �f•` II ..4.... 1. "-ta i`!a r :,, cu(C‹ • M J d-I Dh l:tilli if-44:::, 47:: f..1".1 C411 d r -, ...,,.„ z z z U ,c,„ aI. it it it et it it cl i . rZ 11,, sit .it (1 (1. (1 (3 it it it et et ES OS A Ct. I1. it it (I it it :NCI it i'e <'e <'t <t it 4". 4, CERTIFIED PUBLIC ACCOUNTANTS 4 Brandon W.Burrows,CPA David E.Hale,CPA,CFP A Professional Corporation ,.Donald G.Slater,CPA Richard K.Kikuchi,CPA Susan F.Matz,CPA Shelly K.Jackley,CPA ,.Bryan S.Gruber,CPA INDEPENDENT AUDITOR'S REPORT To the Honorable Mayor and Members of City Council City of Chino Hills, California We have audited the accompanying financial statements of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of City of Chino Hills, California, as of and for the year ended June 30, 2011, which collectively comprise the City's basic financial statements as listed in the table of contents. These financial statements are the responsibility of City of Chino Hills, California's management. Our responsibility is to express opinions on these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and the significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinions. In our opinion, the financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of the City of Chino Hills, California, as of June 30, 2011, and the respective changes in financial position, and cash flows, where applicable, thereof and the respective budgetary comparison for the General Fund, Landscape and Lighting District, Existing Infrastructure Fees, and Water Facilities Fee for the year then ended in conformity with accounting principles generally accepted in the United States of America. In accordance with Government Auditing Standards, we have also issued our report dated November 7, 2011, on our consideration of the City of Chino Hills, California's internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards and should be considered in assessing the results of our audit. Accounting principles generally accepted in the United States of America require that the management's discussion and analysis as listed in the table of contents be presented to supplement the basic financial statements. Such information, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board, who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information and comparing the information for Lance,Soil&Lunghard,LLP 203 North Brea Boulevard t Suite 203 6 Brea, CA 92821 c TEL: 714.672.0022 Fax:714.672.0331 www.Islcpas.com 41185 Golden Gate Circle Suite 103 o Murrieta,CA 92562 ' TEL:951.304.2728 c. Fax:951.304.3940 1 CERTIFIED PUBLIC ACCOUNTANTS To the Honorable Mayor and Members of City Council City of Chino Hills, California consistency with management's responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance. Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the City of Chino Hills, California's financial statements as a whole. The introductory section, combining and individual nonmajor fund financial statements, and statistical section, are presented for purposes of additional analysis and are not a required part of the financial statements. The combining and individual nonmajor fund financial statements are the responsibility of management and were derived from and relate directly to the underlying accounting and other records used to prepare the financial statements. The information has been subjected to the auditing procedures applied in the audit of the financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the financial statements or to the financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the information is fairly stated in all material respects in relation to the financial statements as a whole. The introductory and statistical sections have not been subjected to the auditing procedures applied in the audit of the basic financial statements and, accordingly, we do not express an opinion or provide any assurance on them. dee se-4 ',A Brea, California November 7, 2011 2 i IMI II MANAGEMENT'S DISCUSSION & ANALysis 17. 4.411.°444 §\ :.8.1k •- .111 ' to riA ti , CI; 4,01 CITY OF CHINO HILLS INCORPORATED 1 9 9 1 II I MANAGEMENT'S DISCUSSION AND ANALYSIS The following is a narrative overview and analysis of the City of Chino Hills' financial statements for the fiscal year ended June 30, 2011 . Information presented here should be taken into consideration with additional information furnished in the letter of transmittal and the City's financial statements. FINANCIAL HIGHLIGHTS • The total net assets of the City of Chino Hills decreased $20.4 million from $511.5 million to$491.1 million in the fiscal year 2010-11. • The City's governmental funds combined ending fund balances increased $3.8 million from $48.3 million to $52.1 million at June 30, 2011. Of this $52.1 million, $ 10.2 million was nonspendable, $28.8 million was restricted, $16.1 million was committed, $.8 million was assigned and($3.8) million was unassigned. USING THIS ANNUAL REPORT This annual report consists of a series of financial statements. The Statement of Net Assets and Statement of Activities provide information about the activities of the City as a whole and present a long-term view of the City's finances. Fund financial statements are next. For governmental activities, these fund statements tell how these services were financed in the short term as well as what remains for future spending. Fund financial statements also report the City's operation in more detail than the government-wide statements by providing information about the City's most significant funds and other funds. The remaining fiduciary(Agency)fund statement provides financial information about activities for which the City acts solely as a trustee or agent for the benefit of those outside of the government. REPORTING THE CITY AS A WHOLE The Statement of Net Assets and the Statement of Activities: The Statement of Net Assets and the Statement of Activities report information about the City as a whole and about its activities. These statements include all assets and liabilities of the City using the accrual basis of accounting, which is similar to the accounting used by most private-sector companies. All of the current year's revenues and expenses are taken into account regardless of when cash is received or paid. These two statements report the City's net assets and changes. Net assets are the difference between assets and liabilities,which is one way to measure the City's financial health or financial position. Over time, increases or decreases in the City's net assets are an indication of whether its financial health is improving or deteriorating. However, other non- financial factors such as changes in the economy due to external factors that will cause a decrease in consumer spending also needs to be taken into consideration. In the Statement of Net Assets and the Statement of Activities, the City's activities are separated as follows: Governmental activities — Most of the City's basic services are reported in this category, including the general government (city manager, city clerk, and finance), public safety (police protection), public works, community development, cultural and leisure, and interest on long-term debt. Property taxes, sales tax, motor vehicle in-lieu fees, interest income, franchise fees, state and federal grants, contributions from other agencies, and other revenues finance these activities. Business-type activities — The City charges a fee to customers to cover all or most of the cost of certain services it provides. The City's water and sewer utilities are reported in this category. REPORTING THE CITY'S MOST SIGNIFICANT FUNDS Fund Financial Statements: The fund financial statements provide detailed information about the most significant funds and other funds —not the City as a whole. Some funds are required to be established by State law and by bond covenants. However, management established many other funds to help it control and manage money for particular purposes or to show that it is meeting legal responsibilities for using certain taxes, grants, and other resources. The City's two types of funds are governmental and proprietary. 3 Governmental funds-Most of the City's basic services are reported in governmental funds, which focus on how money flows in and out of those funds and the balances left at year-end that are available for spending. These funds are reported using an accounting method called modified accrual accounting, which measures cash and all other financial assets that can readily be converted to cash. The governmental fund statements provide a detailed short-term view of the City's general government operations and the basic services it provides. Governmental fund information helps determine whether there are more or fewer financial resources that can be spent in the near future to finance the City's programs. The differences of results in the Governmental Fund financial statements to those in the Government-Wide financial statements are explained in a reconciliation following each Governmental Fund financial statement. Proprietary funds-When the City charges customers for the services it provides, these services are generally reported in proprietary funds. Proprietary funds are reported in the same way that all activities are reported in the Statement of Net Assets and the Statement of Activities. In fact, the City's enterprise funds are the same as the business-type activities that are reported in the government-wide statements but provide more detail and additional information such as a statement of cash flows. THE CITY AS TRUSTEE Reporting the City's Fiduciary Responsibilities: The City is the trustee, or fiduciary,for certain funds held on behalf of those entities outside of the government. The City's fiduciary activities are reported in a separate Statement of Fiduciary Net Assets. These activities are excluded from the City's other financial statements because the City cannot use these assets to finance its operations. The City is responsible for ensuring that the assets reported in these funds are used for their intended purposes. THE CITY AS A WHOLE The following is an analysis that summarizes the City's net assets (Exhibit A) at fiscal year ended June 30, 2011, and 2010, respectively: Exhibit A Net Assets(Summarized) As of June 30,2011 and 2010 (in thousands) Governmental Business-Type Activities Activities Totals 2011 2010 2011 2010 2011 2010 Change Current and other assets $ 66,053 $ 57,049 $ 65,501 $ 81,366 $ 131,554 $ 138,415 $ (6,861) Capital&intangible assets 319,739 330,976 129,975 131,211 449,714 462,187 (12,473) Total Assets $ 385,792 $ 388,025 $ 195,476 $ 212,577 $ 581,268 $ 600,602 $ (19,334) Long-Term Liabilities Outstanding $ 60,167 $ 63,104 $ 18,069 $ 19,188 $ 78,236 $ 82,292 $ (4,056) Other Liabilities 8,988 3,596 2,956 3,211 11,944 6,807 5,137 Total Liabilities $ 69,155 $ 66,700 $ 21,025 $ 22,399 $ 90,180 $ 89,099 $ 1,081 Net Assets: Invested In capital assets, net of related debt $ 260,831 $ 269,351 $ 112,137 $ 112,236 $ 372,968 $ 381,587 $ (8,619) Restricted 22,773 29,239 892 892 23,665 30,131 (6,466) Unrestricted 33,033 22,735 61,422 77,050 94,455 99,785 (5,330) Total Net Assets $ 316,637 $ 321,325 $ 174,451 $ 190,178 $ 491,088 $ 511,503 $ (20,415) During FY 2010-11, capital and intangible assets decreased by $12.5 million. This was primarily due to the increase in Accumulated Depreciation of Capital Assets for FY 2010-11. Current and other assets decreased by $6.9 million. This was primarily due to the developer agreement debt payments of$4.6 million. The overall result was a decrease of$19.3 million in the total net assets from$600.6 million to$581.3 million in the FY 2010-11. 4 The following is a summary of Statements of Activities that records the Changes in Net Assets (Exhibit B): Exhibit B Changes in Net Assets As of June 30,2011 and 2010 (in thousands) Governmental Business-Type Activities Activities Totals 2011 2010 2011 2010 2011 2010 Change Revenues: Program Revenues: Charges for services $ 13,883 $ 13,260 $ 23,559 $ 23,639 $ 37,442 $ 36,899 $ 543 Operating grants and cont. 4,707 6,600 - - 4,707 6,600 (1,893) Capital grants and cont. 9,253 10,148 - 268 9,253 10,416 (1,163) General Revenues: Property taxes 10,193 10,026 - - 10,193 10,026 167 Sales taxes 6,423 5,907 - - 6,423 5,907 516 Franchise taxes 2,039 2,411 - - 2,039 2,411 (372) Business license taxes 146 144 - - 146 144 2 Other taxes 780 777 - - 780 777 3 Intergovmntl.,unrestricted 361 231 - - 361 231 130 Use of money and prop. 1,454 1,599 373 930 1,827 2,529 (702) Gain(loss)on disp.of capital assets 6 - - - 6 - 6 Other Revenues 594 452 4,419 2,827 5,013 3,279 1,734 Total Revenues 49,839 51,555 28,351 27,664 78,190 79,219 (1,029) Expenses: General government 8,966 9,614 - - 8,966 9,614 (648) Public safety 11,456 11,677 - - 11,456 11,677 (221) Public works 40,156 28,555 - - 40,156 28,555 11,601 Community development 5,058 4,212 - - 5,058 4,212 846 Culture and leisure 4,652 4,797 - - 4,652 4,797 (145) Interest on long-term debt 1,273 1,329 - - 1,273 1,329 (56) Water Utility - - 20,834 23,240 20,834 23,240 (2,406) Sewer Utility - - 6,210 5,867 6,210 5,867 343 Total Expenses 71,561 60,184 27,044 29,107 98,605 89,291 9,314 Increase(Decrease)in Net Assets Assets Before Transfers (21,722) (8,629) 1,307 (1,443) (20,415) (10,072) (10,343) Transfers 470 484 (470) (484) - - - Increase(Decrease)In Net Assets $ (21,252) $ (8,145) $ 837 $ (1,927) $ (20,415) $ (10,072) $ (10,343) The net decrease in the total revenues of$1 million is due to the $3.1 million decline in operating grants, capital grants and contributions and an increase in other revenues of $1.7 million as compared to FY 2009-10. The overall decrease was mainly attributed to the decline in developer impact fees related to the decline in the real estate market. As for the total expenses in FY 2010-11, overall expenses increased by $9.3 million as compared to last fiscal year. Expenses for Public Works increased by $11.6 million due to a settlement agreement payment to a developer of $4.6 million and Capital Outlay projects for$6.7 million that were not capitalized. Expenses for Water Utility decreased by$2.4 million due to reduced equity adjustments in investments FY 2010-11 as compared to FY 2009-10. 5 Governmental Activities The following presents the cost of each of the City's six largest programs —general government, public safety, community development, culture and leisure, public works and interest on long-term debt—as well as each program's net cost (total cost less revenues generated by the activities). The net cost shows the financial burden that was placed on the City's taxpayers by each of these functions. Exhibit C Governmental Activities As of June 30,2011 and 2010 (in thousands) 2011 2010 Change Total Cost of Services General government $ 8,966 $ 9,614 $ (648) Public safety 11,456 11,677 (221) Public works 40,156 28,555 11,601 Community development 5,058 4,212 846 Culture and leisure 4,652 4,797 (145) Interest on long-term debt 1,273 1,329 (56) Total $ 71,561 $ 60,184 $ 11,377 Net Cost of Services 2011 2010 Change General government $ (2,260) $ (3,147) $ 887 Public safety (10,657) (10,859) 202 Public works (22,794) (13,899) (8,895) Community development (3,274) (224) (3,050) Culture and leisure (3,460) (718) (2,742) Interest on long-term debt (1,273) (1,329) 56 Total $ (43,718) $ (30,176) $ (13,542) THE CITY'S FUNDS The total fund balance of the governmental funds was$52.1 million. The major funds include the General Fund which has the largest fund balance of the governmental funds at $21.9 million with Special Revenue Funds accounting for $11.4 million. The non-major Other Governmental Funds account for the remainder of governmental fund balances of $18.8 million. General Fund Budgetary Highlights During the year, the City Council reviewed and revised the City budget as recommended by the staff. Adjustments were made on a quarterly basis as the City's staff requested additional appropriations to cover the cost of projects that either had change orders for additional work, or the estimated cost at the beginning of the project was underestimated. Adjustments were also made as department heads requested increases or decreases to their budgets to maintain their current level of services. All amendments that either increase or decrease appropriations are approved by the City Council. The City Manager has authority to increase or decrease appropriations up to$10,000 per departmental request. CAPITAL ASSET AND DEBT ADMINISTRATION Capital Assets The City of Chino Hills had $449.7 million invested in the capital assets, as compared to $462.2 million in the prior year. Net decrease in the capital assets is approximately$12.5 million. 6 Exhibit D Capital Assets at Year-End (Net of Depreciation) For the Year Ended June 30,2011 and 2010 (in thousands) Governmental Business-Type Activities Activities Totals 2011 2010 2011 2010 2011 2010 Change Land and easements $ 26,694 $ 26,694 $ 3,933 $ 3,933 $ 30,627 $ 30,627 $ - Construction-In-progress 19,520 17,743 4,667 1,218 24,187 18,961 5,226 Structures and Improvements 107,440 110,743 777 822 108,217 111,565 (3,348) Utility plant in service - - 20,210 20,944 20,210 20,944 (734) Meters - - 3,239 3,479 3,239 3,479 (240) Pipeline In service 176 180 84,979 88,225 85,155 88,405 (3,250) Equipment 1,839 2,224 84 69 1,923 2,293 (370) Vehicle 1,662 1,824 - - 1,662 1,824 (162) Infrastructure 162,408 171,568 - - 162,408 171,568 (9,160) Water&capacity rights - 12,086 12,521 12,086 12,521 (435) Total $ 319,739 $ 330,976 $ 129,975 $ 131,211 $ 449,714 $ 462,187 $ (12,473) The decrease was primarily due to the increase in Accumulated Depreciation of Fixed Assets for FY 2010-11. For more detailed information, see note 5 to the financial statements. Debt At year-end, the City's governmental activities had $60.2 million in long-term debts including development fee related obligations, capital lease obligations, other post employment benefits obligation, certificates of participations and compensated absences, as compared to $63.1 million in prior year; a net decrease of$2.9 million during the fiscal year. 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 30,2011 and 2000 (in thousands) Governmental Business-Type Activities Activities Total 2011 2010 2011 2010 2011 2010 Change Compensated absences $ 850 $ 852 $ 228 $ 221 $ 1,078 $ 1,073 $ 5 Advances from developers 774 774 - - 774 774 - Advances for construction - - - - - - - Development fee program obligations 36,430 38,995 3 3 36,433 38,998 (2,565) Capital lease obligations 219 307 - - 219 307 (88) Other post employment benefits obligation 410 269 410 Certificates of Participation 21,445 21,865 18,675 19,915 40,120 41,780 (1,660) Less: Deferred amount on Refunding - - (761) (871) (761) (871) 110 Bond premium/discount 39 41 (75) (81) (36) (40) 4 Total $ 60,167 $ 63,103 $ 18,070 $ 19,187 $ 78,237 $ 82,021 $ (4,194) 7 The majority of the obligations under the governmental activities were development related ($36.4 million) and owed to developers who had previously installed major infrastructure throughout the City. For obligations under business-type activities, the City had $18.1 million in long-term debts and they were recorded in the Water Utility fund. ECONOMIC FACTORS AND NEXT YEAR'S BUDGET Although the focus of this Annual Report is the economic condition of the City in the fiscal year ended June 30, 2011, in preparing the budget for FY 2011-12, management considered the possible impact that the State of California and the national economies will have on the City's budget. Unfortunately, there is no consensus, at any level, as to the depth and length of this current downturn, which presented a challenge to the preparation of the City's adopted budget. The overall approach in the development of the FY 2011-12 budget was to reduce expenditures where possible while continuing to maintain Chino Hills' high level of community safety and customer service. The State of California has not addressed its on-going fiscal structural deficit problem. The FY 2011-12 budget, as adopted, does not, provide for further State "takeaways' affecting the General Fund. Due to the uncertainty regarding the state budget and wide range of potential reductions, it is difficult to determine the fiscal impact to the City at this time. Key budget assumptions for forecasting General Fund revenues in FY2011-12 include the following: • The revenue forecasts anticipated effects of the economic downturn and real estate market decline. • The budget for property taxes provides for an overall increase of 3% from prior year final budget in anticipation property tax rolls not increasing from new development. • The Sales tax projection was conservatively increased 4% from the prior year final budget. The actual sales tax for the prior year exceeded budget projection by almost 5%. This estimate assumes a slow economic recovery for merchants in the city. • Residential development activities within the City may continue to be sluggish in FY 2011-12. Permit fees continue to be sufficient to fund the related operations. • Adjustments to operational expenditures included deletion and/or no funding for vacant positions. • Investment earnings were budgeted at a rate of return of 0.8 percent. The Operating Budget for FY 2011-12 is a well-balanced budget that reflects the City's commitment to foster steady, controlled growth and provide the highest level of service to the community within the City's financial constraint and is consistent with the City Council's goals and objectives. Questions or requests for information regarding the City of Chino Hills'2011-12 budget should be sent to the Finance Department at the address below. CONTACTING THE CITY'S FINANCIAL MANAGEMENT This financial report is designed to provide our citizens, taxpayers, customers, investors, and creditors with a general overview of the City of Chino Hills' finances and to show the City's accountability for the money it receives. Questions concerning any of the information provided in this report or requests for additional financial information should be addressed to the City's Finance Department, at the City of Chino Hills, 14000 City Center Drive, Chino Hills, CA 91709. 8 A Imins ilii II � 1+ BASIC FINANCIALSTATEMENTS ✓ ✓ ThAri els` '1 44N, • 14141pk:g14. -411111.. a. n tr: +•ter•. • :14 •+1 A �ltMat.. CITY OF CHINO HILLS INCORPORATED 1991 i 1 m P � . CITY OF CHINO HILLS STATEMENT OF NET ASSETS JUNE 30,2011 Primary Government Governmental Business-Type Activities Activities Total Assets: Cash and investments $ 64,976,267 $ 35,499,628 $ 100,475,895 Receivables: Accounts 747,857 2,733,450 3,481,307 Taxes 1,898,401 - 1,898,401 Accrued interest 113,257 63,901 177,158 Special assessments 70,156 - 70,156 Internal balances (11,677,002) 11,677,002 - Due from other agencies 226,083 136,169 362,252 Due from other governments 1,108,877 8,789 1,117,666 Due from developers 2,338,559 901,584 3,240,143 Deferred charges 199,606 378,827 578,433 Investment in joint venture - 13,209,749 13,209,749 Restricted assets: Cash and investments 121,743 - 121,743 Cash with fiscal agent 5,929,220 891,788 6,821,008 Capital assets not being depreciated 46,213,546 8,600,589 54,814,135 Capital assets, net of depreciation 273,525,438 121,374,891 394,900,329 Total Assets 385,792,008 195,476,367 681,268,375 Liabilities: Accounts payable 2,840,686 1,207,695 4,048,381 Accrued liabilities 594,408 101,933 696,341 Accrued interest 337,109 69,945 407,054 Retentions payable 204,731 - 204,731 Due to developers 4,875,124 - 4,875,124 Due to other governments - 8,789 8,789 Unearned revenue 79,817 - 79,817 Deposits payable 55,966 1,567,686 1,623,652 Noncurrent liabilities: Due within one year 691,938 1,286,500 1,978,438 Due in more than one year 59,474,987 16,783,115 76,258,102 Total Liabilities 69,154,766 21,025,663 90,180,429 Net Assets: Invested in capital assets, net of related debt 260,831,157 112,137,003 372,968,160 Restricted for: Community development projects 3,301,017 - 3,301,017 Public safety 11,324 - 11,324 Public works 16,112,794 - 16,112,794 Capital projects 5,968,257 - 5,968,257 Debt service 3,379,341 891,788 4,271,129 Unrestricted 27,033,352 61,421,913 88,455,265 Total Net Assets $ 316,637,242 $ 174,450,704 $ 491,087,946 See Notes to Financial Statements 9 CITY OF CHINO HILLS STATEMENT OF ACTIVITIES YEAR ENDED JUNE 30,2011 Program Revenues Operating Capital Charges for Contributions Contributions Expenses Services and Grants and Grants Functions/Programs Primary Government: Governmental Activities: General government $ 8,966,318 $ 4,487,857 $ 366,345 $ 1,851,660 Public safety 11,455,829 600,952 197,571 - Community development 5,057,949 778,031 991,203 14,957 Culture and leisure 4,651,993 1,191,777 -Public works 40,156,027 6,824,803 3,151,399 7,385,945 Interest on long-term debt 1,272,852 - - - Total Governmental Activities 71,560,968 13,883,420 4,706,518 9,252,562 Business-Type Activities: Water Utility 20,834,162 18,068,634 - - Sewer Utility 6,209,880 5,490,532 - - Total Business-Type Activities 27,044,042 23,559,166 - - Total Primary Government $ 98,605,010 $ 37,442,586 $ 4,706,518 $ 9,252,562 General Revenues: Taxes: Property taxes,levied for general purpose Sales taxes Franchise taxes Business licenses taxes Other taxes Intergovernmental,unrestricted Motor vehicle in lieu-unrestricted Use of money and property Other Gain on sale of capital asset Transfers Total General Revenues and Transfers Change in Net Assets Net Assets at Beginning of Year Restatement of Net Assets Net Assets at End of Year See Notes to Financial Statements 10 Net(Expenses)Revenues and Changes in Net Assets Primary Government Governmental Business•Type Activities Activities Total $ (2,260,456) $ - $ (2,260,456) (10,657,306) - (10,657,306) (3,273,758) - (3,273,758) (3,460,216) - (3,460,216) (22,793,880) - (22,793,880) (1,272,852) - (1,272,852) (43,718,468) - (43,718,468) (2,765,528) (2,765,528) (719,348) (719,348) (3,484,876) (3,484,876) (43,718,468) (3,484,876) (47,203,344) 10,192,744 - 10,192,744 6,422,617 - 6,422,617 2,039,246 - 2,039,246 145,728 - 145,728 779,935 - 779,935 361,339 - 361,339 1,454,225 372,899 1,827,124 594,258 4,419,454 5,013,712 5,645 - 5,645 470,454 (470,454) - 22,466,191 4,321,899 26,788,090 (21,252,277) 837,023 (20,415,254) 321,324,859 190,178,341 511,503,200 16,564,660 (16,564,660) - $ 316,637,242 $ 174,450,704 $ 491,087,946 See Notes to Financial Statements 11 CITY OF CHINO HILLS BALANCE SHEET GOVERNMENTAL FUNDS JUNE 30,2011 Special Revenue Funds Landscape Existing and Lighting Infrastructure Water General District Fees Facilities Fee Assets: Cash and investments $ 26,431,183 $ 9,227,279 $ 1,459,029 $ 7,151,713 Receivables: Accounts 204,922 39,348 - 14,100 Taxes 1,665,865 - - - Accrued interest 49,934 15,110 2,326 12,311 Special assessments - 61,219 - - Due from other agencies 222,697 - - - Due from other governments 253,949 - - - Due from developers 618,843 - 1,666,588 38,544 Due from other funds 778,735 - - - Advances to other funds - - - 3,560,977 Restricted assets: Cash and investments - - - - Cash and investments with fiscal agents 5,526,089 - - - Total Assets $ 35,752,217 $ 9,342,956 $ 3,127,943 $ 10,777,645 Liabilities and Fund Balances: Liabilities: Accounts payable $ 209,907 $ 576,596 $ - $ 1,658 Accrued liabilities 507,401 27,773 - - Retention payable - - - - Due to other funds 935 5,797 - - Due to developers - - 53,128 3,346,356 Deferred revenues 1,441,662 - 75,589 - Unearned revenues - - - - Deposits payable 55,966 - - - Advances from other funds 11,644,099 - 5,437,241 2,312,100 Total Liabilities 13,859,970 610,166 5,565,958 5,660,114 Fund Balances: Nonspendable: Advances to other funds - - - 3,560,977 Restricted for: Community development projects - - - - Public safety - - - - Public works - 8,732,790 - 1,556,554 Capital Projects 1,618,950 - - Debt service 3,379,341 - - - Committed to: Emergencies and contingencies 11,960,340 - - - Cash flow contingency 3,990,000 - - - Opertional contingency 100,000 - - - Assigned to: General Government 99,758 - - - CIP special projects 743,858 - - - Unassigned - - (2,438,015) - Total Fund Balances 21,892,247 8,732,790 (2,438,015) 5,117,531 Total Liabilities and Fund Balances $ 35,752,217 $ 9,342,956 $ 3,127,943 $ 10,777,645 See Notes to Financial Statements 12 CITY OF CHINO HILLS BALANCE SHEET GOVERNMENTAL FUNDS JUNE 30,2011 Capital Projects Fund Other Total Capital Governmental Governmental Improvement Funds Funds Assets: Cash and investments $ 1,108,620 $ 16,449,153 $ 61,826,977 Receivables: Accounts - 467,495 725,865 Taxes - 232,536 1,898,401 Accrued interest - 28,136 107,817 Special assessments - 8,937 70,156 Due from other agencies - - 222,697 Due from other governments - 854,928 1,108,877 Due from developers - 14,584 2,338,559 Due from other funds - - 778,735 Advances to other funds - 6,658,338 10,219,315 Restricted assets: Cash and investments 121,743 - 121,743 Cash and investments with fiscal agents - 403,131 5,929,220 Total Assets $ 1,230,363 $ 25,117,238 $ 85,348,362 Liabilities and Fund Balances: Liabilities: Accounts payable $ 1,017,716 $ 973,909 $ 2,779,786 Accrued liabilities 7,916 26,460 569,550 Retention payable 204,731 - 204,731 Due to other funds - 787,544 794,276 Due to developers - 1,475,640 4,875,124 Deferred revenues - 618,538 2,135,789 Unearned revenues - 79,817 79,817 Deposits payable - - 55,966 Advances from other funds - 2,385,750 21,779,190 Total Liabilities 1,230,363 6,347,658 33,274,229 Fund Balances: Nonspendable: Advances to other funds - 6,658,338 10,219,315 Restricted for: Community development projects - 3,301,017 3,301,017 Public safety - 11,324 11,324 Public works - 5,823,450 16,112,794 Capital Projects - 4,349,307 5,968,257 Debt service - - 3,379,341 Committed to: Emergencies and contingencies - - 11,960,340 Cash flow contingency - - 3,990,000 Opertional contingency - - 100,000 Assigned to: General Government - - 99,758 CIP special projects - - 743,858 Unassigned - (1,373,856) (3,811,871) Total Fund Balances - 18,769,580 52,074,133 Total Liabilities and Fund Balances $ 1,230,363 $ 25,117,238 $ 85,348,362 See Notes to Financial Statements 13 - « ® \ . v , 5y . » 2/ . .2 3#. •vv2 _ . ® . ¢ �/ 4 - ¥* \ ?; • . . . s 1 . : -v � . : � ,2a�.�w� �. .y� ; f-fy y« - '_ a / \ / . a � %pf—�J.� |:. t.-ter « a > k9 };c —. 9 \kms ƒ } / |4;. --- CITY OF CHINO HILLS INCORPORATED 1991 THIS PAGE INTENTIONALLY LEFT BLANK 14 CITY OF CHINO HILLS RECONCILIATION OF THE BALANCE SHEET OF GOVERNMENTAL FUNDS TO THE STATEMENT OF NET ASSETS JUNE 30,2011 Fund balances of governmental funds $ 52,074,133 Amounts reported for governmental activities in the statement of net assets are different because: Capital assets net of depreciation have not been included as financial resources in governmental fund activity 317,623,954 Governmental funds report all OPEB contributions as expenditures, however in the Statement of Net Assets any excesses or deficiencies in contributions in relation to the Annual Required Contribution(ARC)are recorded as an asset or liability. (409,363) Bond issuance cost is an expenditure in the governmental funds,but it is a deferred charge in the statement of net assets 199,606 Long-term debt and compensated absences that have not been included in the governmental fund activity: Long-term liabilities (58,688,497) Compensated absences (816,444) Accrued interest payable for the current portion of interest due on Bonds that have not been reported in the governmental funds (337,109) Revenues reported as deferred revenue in the governmental funds are recognized in the Statement of Activities.These are included in the intergovernmental revenues in the governmental fund activity. 2,135,789 Internal service funds are used by management to charge the costs of certain activities,such as equipment management and self-insurance, to individual funds. The assets and liabilities of the internal service funds must be added to the statement of net assets 4,855,173 Net assets of governmental activities $ 316,637,242 See Notes to Financial Statements 15 CITY OF CHINO HILLS STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES GOVERNMENTAL FUNDS YEAR ENDED JUNE 30,2011 Special Revenue Funds Landscape Existing and Lighting Infrastructure Water General District Fees Facilities Fee Revenues: Taxes $ 19,487,208 $ - $ - $ - Special assessments - 5,363,229 - 4,330 Licenses and permits 775,396 - - - Intergovernmental 375,283 - - - Charges for services 6,314,633 1,503,994 - - Developer fees - - 232,564 - Contributions from property owners 1,133,624 - - - Fines and forfeitures 588,766 - - - Contributions - 1,800 - 174,617 Use of money and property 1,136,051 61,489 4,712 49,186 Miscellaneous 1,770,650 19,639 - - Total Revenues 31,581,611 6,950,151 237,276 228,133 Expenditures: Current: General government 7,310,427 - - - Public safety 11,071,648 - - - Public works 3,644,807 7,320,680 - 3,420,111 Community development 2,688,040 - 198,341 - Culture and leisure 2,998,691 - - - Capital outlay 73,871 432,878 - - Debt service: Principal retirement 695,149 - 4,340,573 - Interest and fiscal charges 1,155,507 - 58,212 23,199 Total Expenditures 29,638,140 7,753,558 4,597,126 3,443,310 Excess(Deficiency)of Revenues Over(Under)Expenditures 1,943,471 (803,407) (4,359,850) (3,215,177) Other Financing Sources(Uses): Transfers in 1,023,996 542,959 - - Transfers out (1,251,718) (30,707) - (3,130,826) Long-term debt issued - - 61,383 - Proceeds from sale of capital asset - - - - Total Other Financing Sources (Uses) (227,722) 512,252 61,383 (3,130,826) Net Change in Fund Balances 1,715,749 (291,155) (4,298,467) (6,346,003) Fund Balances, Beginning of Year, as previously reported 20,176,498 9,023,945 1,860,452 - Restatements - - - 11,463,534 Fund Balances, Beginning of Year,as restated 20,176,498 9,023,945 1,860,452 11,463,534 Fund Balances,End of Year $ 21,892,247 $ 8,732,790 $ (2,438,015) $ 5,117,531 See Notes to Financial Statements 16 CITY OF CHINO HILLS STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES GOVERNMENTAL FUNDS YEAR ENDED JUNE 30,2011 , Capital Projects Fund Other Total Capital Governmental Governmental Improvement Funds Funds Revenues: Taxes $ - $ - $ 19,487,208 Special assessments - 216,215 5,583,774 Licenses and permits - - 775,396 Intergovernmental - 4,764,081 5,139,364 Charges for services - 226,706 8,045,333 Developer fees - 167,079 399,643 Contributions from property owners - 4,190,339 5,323,963 Fines and forfeitures - 1,342 590,108 Contributions - - 176,417 Use of money and property - 715,660 1,967,098 Miscellaneous - 59,291 1,849,580 Total Revenues 10,340,713 49,337,884 Expenditures: Current: General government - 2,051 7,312,478 Public safety - 110,232 11,181,880 Public works 6,665,258 119,244 21,170,100 Community development - 8,079,622 10,966,003 Culture and leisure - 152,312 3,151,003 Capital outlay 2,557,826 100,280 3,164,855 Debt service: 1 Principal retirement - - 5,035,722 Interest and fiscal charges - 23,938 1,260,856 Total Expenditures 9,223,084 8,587,679 63,242,897 Excess(Deficiency)of Revenues Over(Under)Expenditures (9,223,084) 1,753,034 (13,905,013) Other Financing Sources(Uses): Transfers in 9,223,084 2,831 10,792,870 Transfers out - (5,306,509) (9,719,760) Long-term debt issued - - 61,383 Proceeds from sale of capital asset - 5,645 5,645 Total Other Financing Sources (Uses) 9,223,084 (5,298,033) 1,140,138 Net Change in Fund Balances - (3,544,999) (12,764,875) Fund Balances, Beginning of Year,as previously reported - 17,213,453 48,274,348 Restatements - 5,101,126 16,564,660 Fund Balances, Beginning of Year, as restated - 22,314,579 64,839,008 Fund Balances, End of Year $ • $ 18,769,580 $ 52,074,133 See Notes to Financial Statements 17 • • 4,.4.. 41)• 1 70 4". • . t krx• 1 lik, = •Sitalf.II 1.1:1 • 4. ‘-` 4. :4w;.-- .'---4S/ 44% 1„::-.4f2:---.,46„,L.--..,„Trn.:„it/.11. ..117.r-x-• ' 104:40€40 .'` .. < ,ra•-• -?„136 45- #a. . sac‘......1, ......3tr,......._ -- vs - 40-nt.f.4 t--- •••• -- - r .41,t'. ..,. _.....?..r.t.- ...., X.,ww•-„, • 41,:-.t: 'A.•'—',..--11-4 --...'-ertt,.., l'al.,,S .4.a2.4100,411$21,,,_V —7:4•• _71.---0 cht: _A.-S-Itt ._•,!_ig.--,......-01_ --Items:. 111-4---..- ; ... ,. CITY OF CHINO HILLS ' INCORPORATED 1991 THIS PAGE INTENTIONALLY LEFT BLANK 18 CITY OF CHINO HILLS RECONCILIATION OF THE STATEMENT OF REVENUES,EXPENDITURES, AND CHANGES IN FUND BALANCES OF GOVERNMENTAL FUNDS TO THE STATEMENT OF ACTIVITIES YEAR ENDED JUNE 30,2011 Net change in fund balances-total governmental funds. $ (12,764,875) Amounts reported for governmental activities in the statement of activities are different because: Governmental funds report capital outlays as expenditures. However,in the statement of activities,the costs of those assets is allocated over their estimated useful lives as depreciation expense. This is the amount by which capital outlays exceeded depreciation in the current period. (10,848,882) The issuance of long-term debt provides current financial resources to governmental funds, while repayment of principal of long-term debt consumes the current financial resources of governmental funds. Neither transaction, however, has any effect on net assets.Also, governmental funds report the effect of issuance costs, premiums,discounts and similar items when debt is first issued,whereas these amounts are deferred and amortized in the statement of activities. 2,978,679 Accrued interest for long-term liabilities. This is the net change in accrued interest for the current period. 5,110 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 (393) Governmental funds report all contributions in relation to the annual required contribution(ARC)for OPEB as expenditures, however in the Statement of Activities only the ARC is an expense. (139,871) Revenues reported as deferred revenue in the governmental funds are recognized in the Statement of Activities.These are included in the intergovernmental revenues in the governmental fund activity. 459,000 Internal service funds are used by management to charge the costs of certain activities,such as equipment management and self-insurance, to individual funds. The net revenues(expenses)of the internal service funds is reported with governmental activities (941,045) Change in net assets of governmental activities $ (21,252,277) See Notes to Financial Statements 19 CITY OF CHINO HILLS BUDGETARY COMPARISON STATEMENT GENERAL FUND YEAR ENDED JUNE 30,2011 Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) Budgetary Fund Balance, July 1 $20,176,498 $20,176,498 $20,176,498 $ - Resources(Inflows): Taxes 19,266,500 19,094,600 19,487,208 392,608 Licenses and permits 886,600 1,094,600 775,396 (319,204) Intergovernmental 115,500 244,000 375,283 131,283 Charges for services 6,898,900 6,388,600 6,314,633 (73,967) Contributions from property owners 1,135,500 1,135,500 1,133,624 (1,876) Fines and forfeitures 603,600 603,600 588,766 (14,834) Use of money and property 1,093,600 971,700 1,136,051 164,351 Miscellaneous 1,336,100 1,836,300 1,770,650 (65,650) Transfers in 678,600 1,023,700 1,023,996 296 Amounts Available for Appropriation 52,191,398 52,569,098 52,782,105 213,007 Charges to Appropriation(Outflow): General government City council 244,200 244,200 241,349 2,851 City manager 1,533,800 1,591,700 1,491,854 99,846 City clerk 865,900 865,900 823,719 42,181 City attorney 350,000 350,000 351,766 (1,766) Finance 2,107,600 2,110,900 2,058,485 52,415 Risk management 984,300 1,205,600 1,158,595 47,005 Human resource 429,800 454,800 368,047 86,753 Non-departmental 85,900 87,900 49,248 38,652 Public works administration 782,100 799,600 767,364 32,236 Public safety Emergency preparedness 161,500 161,500 151,216 10,284 Neighborhood services 868,900 842,400 784,171 58,229 Code enforcement 300,200 327,700 322,796 4,904 Law enforcement 10,074,100 10,074,100 9,813,465 260,635 Community development Community development 1,165,200 1,147,700 1,057,072 90,628 Building and safety 1,017,500 1,018,500 979,140 39,360 Planning 957,300 1,054,700 590,154 464,546 Economic development 65,600 84,600 61,674 22,926 Parks and recreation Recreation 2,523,600 2,531,800 2,302,334 229,466 Community services administration 732,400 742,400 696,357 46,043 Public works Public facilities and operations 2,110,100 2,147,400 2,023,791 123,609 Engineering 1,780,500 1,780,500 1,621,016 159,484 Capital outlay 17,400 76,400 73,871 2,529 Debt service: Principal retirement 745,800 745,800 695,149 50,651 Interest and fiscal charges 1,119,800 1,119,800 1,155,507 (35,707) Transfers out 4,550,000 4,410,100 1,251,718 3,158,382 Total Charges to Appropriations 35,573,500 35,976,000 30,889,858 5,086,142 Budgetary Fund Balance,June 30 $16,617,898 $16,593,098 $21,892,247 $ 5,299,149 See Notes to Financial Statements 20 CITY OF CHINO HILLS BUDGETARY COMPARISON STATEMENT LANDSCAPE AND LIGHTING DISTRICT YEAR ENDED JUNE 30,2011 Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) Budgetary Fund Balance,July 1 $9,023,945 $ 9,023,945 $9,023,945 $ - Resources(Inflows): 1 Special assessments 5,349,400 5,359,700 5,363,229 3,529 Charges for services 1,378,200 1,378,200 1,503,994 125,794 Contributions - - 1,800 1,800 ' Use of money and property 54,400 54,400 61,489 7,089 Miscellaneous - - 19,639 19,639 Transfers in 1,579,800 1,604,700 542,959 (1,061,741) Amounts Available for Appropriation 17,385,745 17,420,945 16,517,055 (903,890) Charges to Appropriation(Outflow): Public works 7,408,500 7,433,700 7,320,680 113,020 Capital outlay 549,400 846,400 432,878 413,522 Transfers out 1,835,400 1,868,900 30,707 1,838,193 Total Charges to Appropriations 9,793,300 10,149,000 7,784,265 2,364,735 Budgetary Fund Balance,June 30 $7,592,445 $ 7,271,945 $8,732,790 $ 1,460,845 See Notes to Financial Statements 21 CITY OF CHINO HILLS BUDGETARY COMPARISON STATEMENT EXISTING INFRASTRUCTURE FEES YEAR ENDED JUNE 30,2011 Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) Budgetary Fund Balance,July 1 $1,860,452 $ 1,860,452 $ 1,860,452 $ - Resources(Inflows): Developer fees 1,034,900 1,034,900 232,564 (802,336) Use of money and property 39,300 39,300 4,712 (34,588) Long-term debt issued - - 61,383 61,383 Amounts Available for Appropriation 2,934,652 - 2,934,652 2,159,111 (775,541) Charges to Appropriation(Outflow): Community development 578,600 578,600 198,341 380,259 Debt service: Principal retirement - 4,340,671 4,340,573 98 Interest and fiscal charges 80,600 80,600 58,212 22,388 Total Charges to Appropriations 659,200 4,999,871 4,597,126 402,745 Budgetary Fund Balance,June 30 $2,275,452 $(2,065,219) $(2,438,015) $ (372,796)_ See Notes to Financial Statements 22 CITY OF CHINO HILLS BUDGETARY COMPARISON STATEMENT WATER FACILITIES FEE YEAR ENDED JUNE 30,2011 Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) Budgetary Fund Balance,July 1, as restated $11,463,534 $11,463,534 $11,463,534 $ - Resources(Inflows): Special assessments 5,000 5,000 4,330 (670) Contributions 294,700 294,700 174,617 (120,083) Use of money and property 56,100 56,100 49,186 (6,914) Amounts Available for Appropriation 11,819,334 11,819,334 11,691,667 (127,667) Charges to Appropriation(Outflow): Public works 57,000 3,421,600 3,420,111 1,489 Debt service: Principal retirement 330,300 330,300 - 330,300 Interest and fiscal charges 21,100 21,100 23,199 (2,099) Transfers out 6,054,300 6,032,300 3,130,826 2,901,474 Total Charges to Appropriations 6,462,700 9,805,300 6,574,136 3,231,164 Budgetary Fund Balance,June 30 $ 5,356,634 $ 2,014,034 $ 5,117,531 $ 3,103,497 See Notes to Financial Statements 23 CITY OF CHINO HILLS STATEMENT OF NET ASSETS PROPRIETARY FUNDS JUNE 30,2011 Business-Type Activities -Enterprise Funds Governmental Activities- Internal Water Utility Sewer Utility Totals Service Funds Assets: Current: Cash and investments $ 20,173,180 $ 15,326,448 $ 35,499,628 $ 3,149,290 Receivables: Accounts 2,170,221 563,229 2,733,450 21,992 Accrued interest 34,889 29,012 63,901 5,440 Due from other governments 8,789 - 8,789 - Duefromotheragencies 136,169 - 136,169 3,386 Due from developers 901,584 - 901,584 Due from other funds 13,358 2,200 15,558 - Restricted: Cash with fiscal agent 891,788 - 891,788 - Total Current Assets 24,329,978 15,920,889 40,250,867 3,180,108 Noncurrent: Advances to other funds - 11,559,875 11,559,875 - Deferred Charges 378,827 - 378,827 - Investmentinjointventure 13,209,749 - 13,209,749 - Capital assets-net of accumulated depreciation 105,090,978 24,884,502 129,975,480 2,115,030 Total Noncurrent Assets 118,679,554 36,444,377 155,123,931 2,115,030 Total Assets $ 143,009,532 $ 52,365,266 $ 195,374,798 $ 5,295,138 See Notes to Financial Statements 24 CITY OF CHINO HILLS STATEMENT OF NET ASSETS PROPRIETARY FUNDS JUNE 30,2011 Business-Type Activities-Enterprise Funds Governmental Activities- Internal Water Utility Sewer Utility Totals Service Funds Liabilities and Net Assets: Liabilities: Current: Accounts payable $ 649,660 $ 558,035 $ 1,207,695 $ 60,900 Accrued liabilities 74,323 27,610 101,933 24,858 Accrued interest 69,945 - 69,945 - Deposits payable 1,197,187 370,499 1,567,686 - Due to other governments 8,789 - 8,789 - Due to other funds - 17 17 - Compensated absences 5,000 1,500 6,500 500 Capital leases - - - 91,437 Certificates of participation 1,280,000 - 1,280,000 - Total Current Liabilities 3,284,904 957,661 4,242,565 177,695 Noncurrent: Due to developers 3,099 - 3,099 - Compensated absences 164,047 57,492 221,539 32,790 Capital leases - - - 127,894 Certificates of participation 16,558,477 - 16,558,477 - Total Noncurrent Liabilities 16,725,623 57,492 16,783,115 160,684 Total Liabilities 20,010,527 1,015,153 21,025,680 338,379 Net Assets: Invested in capital assets, net of related debt 87,252,501 24,884,502 112,137,003 1,895,699 Restricted for debt service 891,788 - 891,788 - Unrestricted 34,854,716 26,465,611 61,320,327 3,061,060 Total Net Assets 122,999,005 51,350,113 174,349,118 4,956,759 Total Liabilities and Net Assets $ 143,009,532 $ 52,365,266 $ 195,374,798 $ 5,295,138 Reconciliation of Net Assets to the Statement of Net Assets Net Assets per Statement of Net Assets-Proprietary Funds $ 174,349,118 Prior years'accumulated adjustment to reflect the consolidation of internal service funds activities related to the enterprise funds 388,116 Current years'adjustments to reflect the consolidation of internal service activities related to enterprise funds (286,530) Net Assets per Statement of Net Assets $ 174,450,704 See Notes to Financial Statements 25 trail*�r .S ,l,t, � 1 4 t f A`4 1 .rte`+-" r s *ft *IL ,4 r�{} 'Sad ;kIy iid CITY OF CHINO HILLS INCORPORATED 1 9 9 1 THIS PAGE INTENTIONALLY LEFT BLANK 26 CITY OF CHINO HILLS STATEMENT OF REVENUES,EXPENSES AND CHANGES IN FUND NET ASSETS PROPRIETARY FUNDS YEAR ENDED JUNE 30,2011 Business-Type Activities-Enterprise Funds Governmental Activities- Internal Water Utility Sewer Utility Totals Service Funds Operating Revenues: Charges for services $ 18,068,634 $ 5,490,532 $ 23,559,166 $ 1,770,646 Meter installation and fees 12,320 - 12,320 - Other 4,364,099 32,139 4,396,238 11,524 Total Operating Revenues 22,445,053 5,522,671 27,967,724 1,782,170 Operating Expenses: Salaries and benefits 2,220,079 828,181 3,048,260 714,186 Professional and contractual services 560,202 3,243,081 3,803,283 347,830 Purchased water 9,436,354 - 9,436,354 - Repairandmaintenance 493,497 331,690 825,187 295,715 Service and supplies 656,374 57,225 713,599 241,690 Administrative and general expenses 1,698,579 464,407 2,162,986 169,236 Utilities 738,416 49,448 787,864 - Depreciation and amortization 3,858,438 1,130,411 4,988,849 663,172 Total Operating Expenses 19,661,939 6,104,443 25,766,382 2,431,829 Operating Income(Loss) 2,783,114 (581,772) 2,201,342 (649,659) Nonoperating Revenues(Expenses): Interest revenue 149,250 223,649 372,899 21,568 Interest expense (991,130) - (991,130) (10,968) Contributions 10,896 - 10,896 14,140 Total Nonoperating Revenues(Expenses) (830,984) 223,649 (607,335) 24,740 Income(Loss)Before Transfers 1,952,130 (358,123) 1,594,007 (624,919) Transfers in 1,523 - 1,523 2,944 Transfers out (429,614) (42,363) (471,977) (605,600) Changes in Net Assets 1,524,039 (400,486) 1,123,553 (1,227,575) Net Assets: Beginning of Year,as previously reported 132,938,500 56,851,725 189,790,225 6,184,334 Restatements (11,463,534) (5,101,126) (16,564,660) - Beginning of Fiscal Year,as restated 121,474,966 51,750,599 173,225,565 6,184,334 End of Fiscal Year $ 122,999,005 $ 51,350,113 $ 174,349,118 $ 4,956,759 Reconciliation of Changes in Net Assets to the Statement of Activities: Changes in Net Assets, per the Statement of Revenues, Expenses and Changes in Fund Net Assets-Proprietary Funds $ 1,123,553 Adjustment to reflect the consolidation of current fiscal year internal service funds activities related to enterprise funds (286,530) Changes in Net Assets of Business-Type Activities per Statement of Activities $ 837,023 See Notes to Financial Statements 27 CITY OF CHINO HILLS STATEMENT OF CASH FLOWS PROPRIETARY FUNDS YEAR ENDED JUNE 30,2011 Business-Type Activities-Enterprise Funds Governmental Activities- Internal Water Utility Sewer Utility Totals Service Funds Cash Flows from Operating Activities: Cash received from customers and users $ 22,377,847 $ 5,574,853 $ 27,952,700 $ 1,815,360 Cash paid to suppliers for goods and services (11,680,282) (3,734,031) (15,414,313) (892,231) Cash paid to employees for services (3,924,517) (1,265,260) (5,189,777) (882,615) Net Cash Provided(Used)by Operating Activities 6,773,048 575,562 7,348,610 40,514 Cash Flows from Non-Capital Financing Activities: Cash transfers out (429,614) (42,363) (471,977) (605,600) Cash transfers In 1,523 - 1,523 2,944 Repayment received from other funds 25,684 13 25,697 - Repayment made to other funds - (75) (75) Advance to other funds - 561,822 561,822 - Contributions - 14,140 Net Cash Provided(Used)by Non-Capital Financing Activities (402,407) 519,397 116,990 (588,516) Cash Flows from Capital and Related Financing Activities: Acquisition and construction of capital assets (3,684,471) (58,288) (3,742,759) (274,812) Principal paid on capital debt (1,240,000) - (1,240,000) (87,764) Interest paid on capital debt (844,930) - (844,930) (10,968) Net Cash Provided(Used)by Capital and Related Financing Activities (5,769,401) (58,288) (5,827,689) (373,544) Cash Flows from Investing Activities: Interest received 153,700 230,555 384,255 23,812 Net Cash Provided(Used)by Investing Activities 153,700 230,555 384,255 23,812 Net Increase(Decrease)in Cash and Cash Equivalents 754,940 1,267,226 2,022,166 (897,734) Cash and Cash Equivalents at Beginning of Year 20,310,028 14,059,222 34,369,250 4,047,024 Cash and Cash Equivalents at End of Year $ 21,064,968 $15,326,448 $ 36,391,416 $ 3,149,290 Reconciliation of Operating Income to Net Cash Provided(Used)by Operating Activities: Operating income(loss) $ 2,783,114 $ (581,772) $ 2,201,342 $ (649,659) See Notes to Financial Statements 28 CITY OF CHINO HILLS STATEMENT OF CASH FLOWS PROPRIETARY FUNDS YEAR ENDED JUNE 30,2011 Business-Type Activities-Enterprise Funds Governmental Activities- Internal Water Utility Sewer Utility Totals Service Funds Adjustments to reconcile operating income(loss) net cash provided(used)by operating activities: Depreciation 3,858,438 1,130,411 4,988,849 663,172 (Increase)decrease in accounts receivable 47,608 49,462 97,070 33,385 (Increase)decrease in investment In joint venture 439,671 - 439,671 - (Increase)decrease In deposits receivable - - - - (Increase)decrease in due from other agencies (136,169) 3,663 (132,506) - (Increase)decrease in due from developers - - - - (Increase)decrease in due from other governments (8,789) - (8,789) (195) Increase(decrease)in accounts payable (235,110) (52,587) (287,697) (6,996) Increase(decrease)in accrued liabilities 4,244 10,354 14,598 3,463 Increase(decrease)in deposits payable 21,355 (943) 20,412 - Increase(decrease)in due to other governments 8,789 - 8,789 - Increase(decrease)in due to developers - - - - Increase(decrease)in compensated absences (10,103) 16,974 6,871 (2,656) Total Adjustments 3,989,934 1,157,334 5,147,268 690,173 Net Cash Provided(Used)by Operating Activities $ 6,773,048 $ 575,562 $ 7,348,610 _$ 40,514 Non-Cash Investing,Capital,and Financing Activities: Contributions from developers $ 10,896 $ - $ 10,896 $ - Deferred charges amortization 34,373 - 34,373 - Amortization of bond discounts 115,156 - 115,156 - See Notes to Financial Statements 29 CITY OF CHINO HILLS STATEMENT OF FIDUCIARY NET ASSETS FIDUCIARY FUNDS JUNE 30,2011 Agency Funds Assets: Cash and investments $ 34,240,817 Receivables: Interest 52,817 Special assessments 119,097 Restricted assets: Cash and investments with fiscal agents 6,721,819 Total Assets $ 41,134,550 Liabilities: Accounts payable $ 1,835 Deposits payable 2,273,833 Funds held for others 37,997,474 Due to Inland Empire Utility Agency 861,408 Total Liabilities $ 41,134,550 See Notes to Financial Statements 30 • lic00.0000010000000.0 NOTES TO THE ,,„ FINANCIAL STATEMENTS ✓ ✓ ✓ h r • 4.4, Or •ors, • CITY OF CHINO HILLS INCORPORATED 1 9 9 1 N _r_ 1•. .� g n 1 CITY OF CHINO HILLS NOTES TO FINANCIAL STATEMENTS JUNE 30, 2011 I.SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Note 1: Organization and Summary of Significant Accounting Policies a. Description of the Reporting Entity The City of Chino Hills (the "City") was incorporated December 1, 1991, under the General Laws of the State of California. The City operates under a Council—Manager form of government and provides the following services: contracted police, lighting and landscaping, public improvements, water, sanitation, planning and zoning, general administrative services, contracted animal control, building and safety, community services, and street and highway maintenance. As required by accounting principles generally accepted in the United States of America, these financial statements present the City of Chino Hills and its component units, entities for which the City is considered financially accountable. The inclusion of an organization within the scope of the reporting entity of the City of Chino Hills is based on the provision of GASB Statements No. 14 and 39. The blended component units discussed below, although legally separate entities, are in substance part of the government operation and data from these component units has been combined herein. The City of Chino Hills Redevelopment Agency The Chino Hills Redevelopment Agency (the Agency) was activated November 12, 2003, pursuant to the State of California Health and Safety Code Section 33000 entitled "Community Development Law." The primary purpose of the Agency is to serve as the second "public agency" in the formation of a joint powers agreement (JPA). It is not intended that the Agency conduct any activities other than to participate in the JPA formation process. The JPA was formed to facilitate the purpose of executing Marks—Roos bond offerings. There was no financial activity during the fiscal year 2010-2011. The City of Chino Hills Public Financing Authority The City of Chino Hills Public Financing Authority (the Authority) was created by a joint exercise of joint powers agreement between the City of Chino Hills and the Chino Hills Redevelopment Agency on November 12, 2003, by virtue of the laws of the State of California pursuant to Section 2.02 hereof. The purpose of the Authority is to provide through the issuance of debt, financing necessary for various capital improvements. The Authority is administered by the Board of Directors who are the members of the City Council and the Mayor. The Authority's primary source of income will be installment sale, loan and lease payments received from the City, which will be used to meet the debt service requirements on debt issues. The Authority does not have taxing power. Separate financial statements for the Authority are not prepared. The City of Chino Hills Capital Improvement Corporation The Chino Hills Capital Improvement Corporation, A California non-profit benefit corporation, was established on May 19, 1992 to facilitate the financing of capital improvements on behalf of the City of Chino Hills. There was no financial activity during the fiscal year 2010-2011. 31 CITY OF CHINO HILLS NOTES TO FINANCIAL STATEMENTS(CONTINUED) JUNE 30,2011 Note 1: Organization and Summary of Significant Accounting Policies (Continued) b. Government—Wide and Fund Financial Statements The government—wide financial statements (i.e., the statement of net assets and the statement of 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. c. Measurement Focus, Basis of Accounting and Financial Statement Presentation The government—wide financial statements are reported using the economic resources measurement focus and the accrual basis of accounting, as are the proprietary fund and fiduciary fund financial statements. Revenues are recorded when earned and expenses are recorded when a liability is incurred, regardless of the timing of related cash flows. Property taxes are recognized as revenues in the year for which they are levied. Grants and similar items are recognized as revenue as soon as all eligibility requirements imposed by the provider have been met. Governmental fund financial statements are reported using the current financial resources measurement focus and the modified accrual basis of accounting. Revenues are recognized as soon as they are both measurable and available. Revenues are considered to be available when they are collectible within the current period or soon enough thereafter to pay liabilities of the current period. For this purpose, the government considers revenues to be available if they are collected within 60 days of the end of the current fiscal period. Expenditures generally are recorded when a liability is incurred, as under accrual accounting. However, debt service expenditures, as well as expenditures related to compensated absences and claims and judgments, are recorded only when payment is due. Property taxes, franchise taxes, licenses and interest associated with the current fiscal period are all considered to be susceptible to accrual and so have been recognized as revenues of the current fiscal period. Only the portion of special assessments receivable due within the current fiscal period is considered to be susceptible to accrual as revenue of the current period. All other revenue items are considered to be measurable and available only when cash is received by the government. 32 CITY OF CHINO HILLS NOTES TO FINANCIAL STATEMENTS(CONTINUED) JUNE 30,2011 Note 1: Organization and Summary of Significant Accounting Policies (Continued) The City reports the following major governmental funds: • The General Fund is the City's primary operating fund. It accounts for all financial resources of the general government, except those required to be accounted for in another fund. • The Landscape and Lighting District Special Revenue Fund accounts for receipts and expenditures of money in the benefit assessment district zones for operating expenditures, maintenance and capital outlay for street lighting, landscaping and parks located within the district. • The Existing Infrastructure Fee Special Revenue Fund accounts for receipts and expenditures of money in the facilities'development programs, which provides for the reimbursement of expenditures to property owners who constructed the facilities in the program. • The Water Facilities Fee Special Revenue Fund accounts for receipts of money received from developer fees that are restricted for use of infrastructure improvements to the water lines. • The Capital Improvement Fund accounts for receipts and expenditures of money for construction of various projects. The City reports the following major proprietary funds: • The Water Utility Fund accounts for the revenues and expenses for the operation, maintenance, and facilities' improvements of the City's water production, transmission and distribution system. • The Sewer Utility Fund accounts for the revenues and expenses for the collection and treatment(via contract) of the liquid waste generated within the City. Additionally, the City reports the following fund types: • Internal Service Funds account for the financial transactions related to repair, replacement and maintenance of City-owned equipment and City's general information technology systems and telecommunications hardware and software. • Agency Funds used to account for money and property held by the City as trustee or custodian. They are also used to account for various assessment districts and community facilities districts for which the City acts as an agent for debt service activity. 33 CITY OF CHINO HILLS NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2011 Note 1: Organization and Summary of Significant Accounting Policies (Continued) Private—sector standards of accounting and financial reporting issued prior to December 1989 generally are followed in both the government—wide and proprietary fund financial statements to the extent that those standards do not conflict with or contradict guidance of the Governmental Accounting Standards Board. Governments also have the option of following subsequent private—sector guidance for their business—type activities and enterprise funds, subject to this same limitation. The government has elected not to follow subsequent private—sector guidance. As a general rule, the effect of interfund activity has been eliminated from the government—wide financial statements. Exceptions to this general rule are charges between the government's proprietary funds function and various other functions of the government. Elimination of these charges would distort the direct costs and program revenues reported for the various functions concerned. Amounts reported as program revenues include: 1) charges to customers or applicants for goods, services or privileges provided, 2) operating grants and contributions, and 3)capital grants and contributions, including special assessments. Internally dedicated resources are reported as general revenues rather than as program revenues. Likewise, general revenues include all taxes. Proprietary funds distinguish operating revenues and expenses from non—operating items. Operating revenues and expenses generally result from providing services and producing and delivering goods in connection with a proprietary fund's principal ongoing operations. The principal operating revenues of the Enterprise Funds and of the Internal Service Funds are charges to customers for sales and services. Operating expenses for Enterprise Funds and Internal Service Funds include the cost of sales and services, administrative expenses, and depreciation on capital assets. All revenues and expenses not meeting this definition are reported as non—operating revenues and expenses. When both restricted and unrestricted resources are available for use, it is the government's policy to use restricted resources first, and then unrestricted resources as they are needed. d. Assets, Liabilities and Net Assets or Equity Cash and Investments All cash and investments, except those that are held by fiscal agents, are held in a City pool. These pooled funds are available upon demand, and therefore are considered cash and cash equivalents for purposes of the statement of cash flows. Investments held by fiscal agents with an original maturity of three months or less are also considered cash equivalents. Investments for the City are reported at fair value. The City's policy is generally to hold investments until maturity or until market values equal or exceed cost. The State Treasurer's Investment Pool and Counties Treasurer's Investment Pool operate in accordance with appropriate state laws and regulations. The reported value of the pool is the fair value of the pool shares. 34 CITY OF CHINO HILLS NOTES TO FINANCIAL STATEMENTS(CONTINUED) JUNE 30,2011 Note 1: Organization and Summary of Significant Accounting Policies(Continued) Receivables and Payables Activity between funds that are representative of lending/borrowing arrangements outstanding at the end of the fiscal year are referred to as either "due to/from other funds," (i.e., the current portion of interfund loans) or "advances to/from other funds" (i.e., the non—current portion of interfund loans). All other outstanding balances between funds are reported as "due to/from other funds." Any residual balances outstanding between the governmental activities and business—type activities are reported in the government—wide financial statements as"internal balances." Advances between funds, as reported in the fund financial statements, are offset by a fund balance reserve account in applicable governmental funds to indicate that they are not available for appropriation and are not expendable available financial resources. All trade and property tax receivables are shown net of an allowance for uncollectibles. Property tax revenue is recognized on the modified accrual basis, that is, in the fiscal year for which the taxes have been levied providing they become available. Available means then due, or past due and receivable within the current period and collected within the current period or expected to be collected soon enough thereafter to be used to pay liabilities of the current period. The County of San Bernardino collects property taxes for the City. Tax liens attach annually as of 12:01 A.M. on the first day in January preceding 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. Functional Classifications Expenditures of the Governmental Funds are classified by function. Functional classifications are defined as follows: • General Government includes legislative activities that have a primary objective of providing legal and policy guidelines for the City. Also included in this classification are those activities that provide management or support services across more than one functional area. • Public Safety includes those activities that involve the protection of people and property. • Public Works includes those activities that involve the maintenance and improvement of City streets, roads and park development and maintenance. • Community Development includes those activities that involve the enhancing of the general quality of life. • Culture and Leisure includes those activities that involve recreation. 35 CITY OF CHINO HILLS NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30,2011 Note 1: Organization and Summary of Significant Accounting Policies (Continued) • Capital Outlay includes those activities that involve the acquisition of capital assets. • Debt Service includes those activities that account for the payment of long—term debt principal, interest and fiscal charges. Inventories Inventories consist of water pipe, valves, tools and miscellaneous items used in installing, monitoring and repairing these items. Inventories are accounted under the purchases method since the City does not maintain significant amounts of inventories. Restricted Assets Certain proceeds of debt issues, as well as certain resources set aside for their repayment, are classified as restricted assets on the balance sheet because their use is limited by applicable bond covenants. In addition, funds have been restricted for future capital improvements by City resolution. Capital Assets Capital assets which include property, plant, equipment and infrastructure assets (e.g., roads, bridges, sidewalks and similar items), are reported in the applicable governmental or business—type activities columns in the government—wide financial statements. Capital assets are defined by the City as assets with an initial, individual cost of more than $5,000 (amount not rounded) and an estimated useful life in excess of two years. Such assets are recorded at historical cost or estimated historical cost if purchased or constructed. Donated capital assets are recorded at estimated fair market value at the date of donation. 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: 36 CITY OF CHINO HILLS NOTES TO FINANCIAL STATEMENTS(CONTINUED) JUNE 30, 2011 Note 1: Organization and Summary of Significant Accounting Policies(Continued) Assets Years Equipment 3-12 Vehicles 4-10 Utility Plant in Service 5-100 Meters 15 Pipeline in Service 30-50 Infrastructure 20-60 Intangible Assets Intangible assets are capitalized at cost, while contributed assets are recorded at fair market value at the time received. Amortization has been provided on a straight—line basis over their estimated useful lives as follows: Assets Years Water Rights 40 Capacity Rights 40 Deferred Charges Deferred charges consist of capitalized debt issuance costs and are amortized on a straight—line basis. Governmental Business-Type Activities Activities Balance at July 1,2010 $ 207,309 $ 413,200 Current year amortization (7,703) (34,373) Balance at June 30, 2011 $ 199,606 $ 378,827 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, 2011, have been recorded in the General Fund as compensated absences payable. The liability for governmental activity that has not matured at June 30, 2011, is reported on the statement of net assets under non—current liabilities. Liabilities relating to proprietary funds are recorded within those respective funds. 37 CITY OF CHINO HILLS NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30,2011 Note 1: Organization and Summary of Significant Accounting Policies(Continued) Long—Term Obligations In the government—wide financial statements and proprietary fund types in the fund financial statements, long—term debt and other long—term obligations are reported as liabilities in the applicable governmental activities, business—type activities, or proprietary fund type statement of net assets. Bond premiums and discounts, as well as issuance costs, are deferred and amortized over the life of the bonds using the effective interest method. Bonds payable are reported net of the applicable bond premium or discount. Bond issuance costs are reported as deferred charges and amortized over the term of the related debt. In the fund financial statements, governmental fund types recognize bond premiums and discounts, as well as bond issuance costs, during the current period. The face amount of debt issued is reported as other financing sources. Premiums received on debt issuances are reported as other financing sources while discounts on debt issuances are reported as other financing uses. Issuance costs, whether or not withheld from the actual debt proceeds received, are reported as debt service expenditures. Fund Equity The City Council adopts and amends committed fund balance amounts through a resolution. The City Manager authorizes assigned amounts for specific purposes pursuant to the policy-making powers granted to him through a resolution. When an expenditure is incurred for purposes for which both restricted and unrestricted fund balance is available, the City considers restricted amounts to be used first, then unrestricted. When an expenditure is incurred for purposes for which amounts in any of the unrestricted fund balance classifications could be used, they are considered to be spent in the order as follows: committed, assigned and then unassigned. e. Reconciliation of Government—Wide and Fund Financial Statements Explanation of certain differences between the governmental fund balance sheet and the government—wide statement of net assets: The governmental fund balance sheet includes reconciliation between fund balance—governmental funds and net assets of governmental activities as reported in the government—wide statement of net assets. One element of that reconciliation explains that "long—term debts and compensated absences have not been included in the governmental fund activity." The details of the ($58,688,497) long—term debt difference are as follows: 38 CITY OF CHINO HILLS NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2011 Note 1: Organization and Summary of Significant Accounting Policies(Continued) Long-term debt: Advances from developers $ (773,756) Development fee program obligations (36,430,352) Certificates of participation (21,445,000) Unamortized premium (39,378) Equestrian center lease (11) Net adjustment to reduce fund balance of total governmental funds to arrive at net assets of governmental activities $ (58,688,497) Explanation of certain differences between the governmental fund statement of revenues, expenditures and changes in fund balances and the government—wide statement of activities: The governmental fund statement of revenues, expenditures and changes in fund balances includes a reconciliation between net changes in fund balances of total governmental funds and changes in net assets of governmental activities as reported in the government—wide statement of activities. One element of that reconciliation explains that "Governmental funds report capital outlays as expenditures. However, in the statement of activities, the cost of those assets is allocated over their estimated useful lives and reported as depreciation expense."The details of this ($10,848,882) difference are as follows: Capital outlay $ 3,194,361 Depreciation expense (12,642,391) Disposal of capital assets (1,400,852) Net adjustment to increase net changes in fund balances of total governmental funds to arrive at changes in net assets of governmental activities $ (10,848,882) Another element of that reconciliation states that "the issuance of long-term debt provides current financial resources to governmental funds, while the repayment of the principal of long-term debt consumes the current financial resources of governmental funds. Neither transaction, however, has any effect on net assets. Also, governmental funds report the effect of issuance costs, premiums, discounts and similar items when debt is first issued, whereas these amounts are deferred and amortized in the statement of activities.° The detail of this$2,978,679 difference is as follows: 39 CITY OF CHINO HILLS NOTES TO FINANCIAL STATEMENTS(CONTINUED) JUNE 30, 2011 Note 1: Organization and Summary of Significant Accounting Policies(Continued) Debt issued or incurred: Development fee program obligations $ (2,371,998) Principal repayments: Certificates of participation 420,000 Equestrian center lease 1 Development fee program obligations 4,936,814 Cost of issuance amortization (7,703) Bond premium amortization 1,565 Net adjustment to decrease net changes in fund balance of total governmental funds to arrive at changes in net assets of governmental activities $ 2,978,679 II.STEWARDSHIP Note 2: Stewardship, Compliance and Accountability a. Budget Procedures All financial activities of the General Fund, Special Revenue Funds and Capital Projects Funds are part of the appropriated budget. Appropriated amounts are as originally adopted or as amended by the City Council throughout the year. The following general procedures are followed in establishing the annual budget: 1. The annual budget adopted by the City Council provides for the general operation of the City. It includes proposed expenditures and estimated revenues. 2. The City Manager is authorized to transfer appropriations between programs and funds up to $10,000 without approval by the City Council. In addition, the City Manager has unlimited authority to transfer appropriations between items and accounts within the same department funded by the General Fund and within the same function funded by a special revenue, debt service or capital projects fund. 3. The budget is formally integrated into the accounting system and employed as a management control device during the year for all funds. 4. The budget is adopted on an annual basis. 5. The budget is adopted on a basis which differs from accounting principles generally accepted in the United States of America in that encumbrances are included as expenditures. The modified accrual basis of accounting is employed in the preparation of the budget. 6. At fiscal year—end, operating budget appropriations lapse: however, incomplete capital improvement project appropriations within Capital Projects Funds, and authorized non—capital appropriations are rebudgeted in the following fiscal year. 40 CITY OF CHINO HILLS NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2011 Note 2: Stewardship, Compliance and Accountability(Continued) b. Encumbrances Encumbrance accounting is employed as an extension of formal budgetary integration in governmental funds. Encumbrances such as purchase orders, contracts and other commitments for the expenditure of monies, are reported as assignments of fund balances. Outstanding encumbrances at year—end are reappropriated in the following year. c. Deficit Fund Balance At June 30, 2011, the Parkland Fees fund has a fund balance deficit of $755,318 and the Miscellaneous Grants fund has a deficit fund balance of $618,538. These deficits will be eliminated with future revenue. III. DETAILED NOTES ON ALL FUNDS Note 3: Cash and Investments At June 30, 2011, cash and investments were reported in the accompanying financial statements as follows: Governmental activities $ 71,027,230 Business-type activities 36,391,416 Fiduciary funds 40,962,636 Total Cash and Investments $ 148,381,282 The City of Chino Hills maintains a cash and investment pool that is available for use for all funds. Each fund type's position in the pool is reported on the combined balance sheet as cash and investments. The City has adopted an investment policy which authorizes it to invest in various investments. Deposits At June 30, 2011, the carrying amount of the City's deposits was $1,286,993 and the bank balance was $2,022,182. The $735,189 difference represents outstanding checks and other reconciling items. 41 CITY OF CHINO HILLS NOTES TO FINANCIAL STATEMENTS(CONTINUED) JUNE 30,2011 Note 3: Cash and Investments (Continued) The California Government Code requires California banks and savings and loan associations to secure an Entity's deposits by pledging government securities with a value of 110% of an Entity's deposits. California law also allows financial institutions to secure Entity deposits by pledging first trust deed mortgage notes having a value of 150% of an Entity's total deposits. The Entity Treasurer may waive the collateral requirement for deposits that are fully insured up to$250,000 by the FDIC. The collateral for deposits in federal and state chartered banks is held in safekeeping by an authorized Agent of Depository recognized by the State of California Department of Banking. The collateral for deposits with savings and loan associations is generally held in safekeeping by the Federal Home Loan Bank in San Francisco, California as an Agent of Depository. These securities are physically held in an undivided pool for all California public agency depositors. Under Government Code Section 53655, the placement of securities by a bank or savings and loan association with an "Agent of Depository" has the effect of perfecting the security interest in the name of the local governmental agency. Accordingly, all collateral held by California Agents of Depository is considered to be held for, and in the name of,the local governmental agency. Authorized Investments Under provision of the City's investment policy and in accordance with Section 53601 of the California Government Code, the City may invest in the following types of investments: • Bonds issued by the City • Repurchase Agreements • Registered state warrants or treasury notes or bonds of this State • Bonds, notes or warrants of any local agency within this State • United States treasury notes, bonds, bills or certificates of indebtedness • Obligations of a federal agency or United States government sponsored agency • Negotiable certificates of deposit • Mutual Funds • State and County Investment Pools Investment Pool Oversight State of California Local Agency Investment Fund LAIF is overseen by the Local Agency Investment Advisory Board, which consists of five members, in accordance with State statute. The State Treasurer's office audits the fund annually. 42 CITY OF CHINO HILLS NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30,2011 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. San Bernardino County Investment Pool 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 Entity adopted GASB Statement No. 31, Accounting and Financial Reporting for Certain Investments and for External Investment Pools, as of July 1, 1997. GASB Statement No. 31 establishes fair value standards for investments in participating interest earning investment contracts, external investment pools, equity securities, option contracts, stock warrants and stock rights that have readily determinable fair values. Accordingly, the Entity reports its investments at fair value in the balance sheet. All investment income, including changes in the fair value of investments, is recognized as revenue in the operating statement. Credit Risk The City's investment policy limits investments in medium—term notes (MTN's) to those rated "A" or higher by Standard and Poor's (S&P) or by Moody's. As of June 30, 2011, the City does not have investment in medium—term notes. Investments in U.S. government securities are not considered to have credit risk; therefore, their credit quality is not disclosed. As of June 30, 2011, the City's investments in external investment pools and money market mutual funds are unrated. On August 5, 2011, Standard & Poor's Ratings Services lowered its long-term sovereign credit rating on the United States of America to AA+ from AAA. As a result, on August 8, 2011, Standard & Poor's Ratings Services lowered its issuer credit ratings and related issue ratings on various Federal Home Loan Bank, Federal Farm Credit Bank, Fannie Mae and Freddie Mac to AA+ from AM. The City also invests in LAIF which invests in various underlying securities, including the federal 43 CITY OF CHINO HILLS NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2011 Note 3: Cash and Investments(Continued) agency securities listed above. While LAIF is not rated, the federal agency securities are, and these have been affected by this rating change as well. 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, 2011, 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. With respect to concentration risk as of June 30, 2011, the City has not invested more than 5% of its total investments in any one issuer. Investments guaranteed by the U.S. government and investments in mutual funds and external investment pools are excluded from this requirement. Interest Rate Risk The City's investment policy limits investment maturities as a means of managing its exposure to fair value losses arising from increasing interest rates. The City's investment policy states that purchases of investments will be restricted to securities with a final state maturity not to exceed three years. The City has elected to use the segmented time distribution method of disclosure for its interest rate risk. As of June 30, 2011, the City had the following investments and original maturities: Investment Maturities (in Years) 6 months 6 months 1 year Fair or less to 1 year to 3 years Value Investments Los Angeles County Investment Pool $ 45,083,513 $ - $ - $ 45,083,513 San Bernardino County Investment Pool 48,499,026 - - 48,499,026 California Local Agency Investment Fund 29,944,907 - - 29,944,907 Money Market Mutual Funds 86,230 - - 86,230 US Treasury Notes 875,667 297,973 1,193,642 2,367,282 FHLB 295,000 299,416 1,196,976 1,791,392 FHLMC 296,328 - 1,480,952 1,777,280 FFCB 292,903 300,045 1,205,127 1,798,075 FNMA 1,614,972 1,614,972 Tennessee Valley Authority - 290,796 297,990 588,786 Investment Held by Fiscal Agents Money Market Mutual Funds 13,542,826 - - 13,542,826 $ 138,916,400 $ 1,188,230 $ 6,989,659 $147,094,289 44 CITY OF CHINO HILLS NOTES TO FINANCIAL STATEMENTS(CONTINUED) JUNE 30,2011 Note 4: Interfund Receivable, Payable and Transfers The composition of interfund balances as of June 30, 2011, is as follows: Due To/From Other Funds Due From Other Funds: General Water Sewer Funds Fund Utility Utility Total Due To Other Funds: General Fund $ - $ 935 $ - $ 935 Landscape and Lighting District - 5,797 - 5,797 Nonmajor Governmental Funds 778,735 6,609 2,200 787,544 Sewer Utility - 17 - 17 Total $ 778,735 $ 13,358 $ 2,200 $ 794,293 The interfund balances were the results of routine interfund transactions not cleared prior to year—end. Advances To/From Other Funds Advances From Other Funds: Governmental Funds: Existing Water Other General Infrastructure Facilities Governmental Funds Fund Fees Fees Funds Total Advances To Other Funds: Governmental funds: Water Facilities Fee $ - $ 3,560,977 $ - $ - $ 3,560,977 Non-major Governmental Funds 4,782,074 1,876,264 - - 6,658,338 Proprietary Funds: Sewer Utility 6,862,025 - 2,312,100 2,385,750 11,559,875 Total $ 11,644,099 $ 5,437,241 $ 2,312,100 $ 2,385,750 $ 21,779,190 During the current and prior fiscal years, the Sewer Utility Fund advanced $2,385,750 to the Parkland Fees fund for a new community park. The Water Facilities Fee Fund, the Sewer Utility Fund and non-major governmental funds advanced $3,560,977, $292,530 and $1,583,734 respectively to the Existing Infrastructure Fund for developer related obligations. The Sewer Utility Fund advanced$2,312,000 to the Water Utility Fund for the Monte Vista water distribution capacity, the Monte Vista Interconnect and the Los Serranos Golf Course Conversion. The Sewer Utility Fund advanced $6,862,025 and the non-major governmental funds advanced $4,782,074 to the General Fund for the Kline/Maloof properties, the Shoppes-Residential project, the Lennar sales tax reimbursement agreement and the Shoppes-Residential dirt cost project. 45 CITY OF CHINO HILLS NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2011 Note 4: Interfund Receivable, Payable and Transfers (Continued) Interfund Transfers Transfers Out: Governmental Funds: Landscape Water General and Lighting Facilities Sewer Nonmajor Transfers In: Fund District Fees Utility Governmental General Fund $ - $ - $ - $ - $ 418,396 Landscape and Lighting District 468,699 - - - 74,260 Capital Improvement 783,019 30,707 3,130,826 42,363 4,806,555 Nonmajor Governmental • - - - 2,831 Water Utility - - - - 1,523 Sewer Utility - - - - - Internal Service Funds - - - - 2,944 Total $ 1,251,718 $ 30,707 $ 3,130,826 $ 42,363 $ 5,306,509 Transfers Out: Proprietary Funds: Water Internal Utility Service Transfers In: Fund Funds Total General Fund $ - $ 605,600 $ 1,023,996 Landscape and Lighting District - - 542,959 Capital Improvement 429,614 - 9,223,084 Nonmajor Governmental - - 2,831 Water Utility - - 1,523 Sewer Utility - - - Internal Service Funds - - 2,944 Total $ 429,614 $ 605,600 $ 10,797,337 The transfers in to the Capital Improvement Fund and the Landscape and Lighting District fund from the other funds were to cover construction costs of various projects. The transfers in to the General Fund from the Internal Service Funds were related to excess reserves. 46 CITY OF CHINO HILLS NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30,2011 Note 5: Capital Assets Capital asset activity for the year ended June 30, 2011,was as follows: Beginning Ending Balance Increases Decreases Balance Governmental Activities: Capital assets, not being depreciated: Land $ 26,693,498 $ - $ - $ 26,693,498 Construction-in-progress 17,743,437 3,177,463 (1,400,852) 19,520,048 Total Capital Assets, Not Being Depreciated 44,436,935 3,177,463 (1,400,852) 46,213,546 Capital assets, being depreciated: Buildings 95,940,690 - - 95,940,690 Structures other than buildings 30,652,687 - - 30,652,687 Equipment 3,446,433 16,900 (12,731) 3,450,602 Vehicles 4,791,914 274,810 (268,869) 4,797,855 Pipeline in service 217,375 - - 217,375 Infrastructure 294,579,206 - - 294,579,206 Total Capital Assets, Being Depreciated 429,628,305 291,710 (281,600) 429,638,415 Less accumulated depreciation: Buildings 8,077,024 2,175,312 - 10,252,336 Structures other than buildings 7,774,483 1,126,781 - 8,901,264 Equipment 1,221,859 401,901 (12,731) 1,611,029 Vehicles 2,967,708 437,434 (268,869) 3,136,273 Pipeline in service 36,954 4,347 - 41,301 Infrastructure 123,010,986 9,159,788 - 132,170,774 Total Accumulated Depreciation 143,089,014 13,305,563 (281,600) 156,112,977 Total Capital Assets, Being Depreciated, Net 286,539,291 (13,013,853) - 273,525,438 Governmental Activities Capital Assets, Net $ 330,976,226 $ (9,836,390) $ (1,400,852) $ 319,738,984 47 CITY OF CHINO HILLS NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2011 Note 5: Capital Assets(Continued) Beginning Ending Balance Increases Decreases Balance Business-Type Activities: Capital assets, not being depreciated: i Land $ 3,395,256 $ - $ - $ 3,395,256 Easements 537,940 - - 537,940 Construction-in-progress 1,218,318 3,599,302 (150,227) 4,667,393 Total Capital Assets, Not Being Depreciated 5,151514 3,599,302 (150,227) 8,600,589 Capital assets,being depreciated: Buildings and improvements 1,042,550 - - 1,042,550 Structure other than building 290,234 - - 290,234 Utility plant in service 32,533,481 150,230 - 32,683,711 Pipeline in service 135,211,177 - - 135,211,177 Meters 5,243,229 78,102 - 5,321,331 Equipment 295,219 41,876 (27,999) 309,096 Intangible assets-utility rights 17,410,863 - - 17,410,863 Total Capital Assets, Being Depreciated 192,026,753 270,208 (27,999) 192,268,962 Less accumulated depreciation: Buildings and improvements 424,335 34,410 - 458,745 Structure other than building 86,740 10,066 - 96,806 Utility plant in service 11,589,022 884,611 - 12,473,633 Pipeline in service 46,986,307 3,245,826 - 50,232,133 Meters 1,764,378 318,288 - 2,082,666 Equipment 226,663 26,005 (27,999) 224,669 Intangible assets-utility rights 4,890,148 435,271 - 5,325,419 Total Accumulated Depreciation 65,967,593 4,954,477 (27,999) 70,894,071 Total Capital Assets, Being Depreciated, Net 126,059,160 (4,684,269) - 121,374,891 Business-Type Activities Capital Assets, Net $ 131,210,674 _$ (1,084,967) $ (150,227) $ 129,975,480 Depreciation and amortization expense was charged to functions/programs of the primary government as follows: Governmental Activities GeneralActEities $ 1,470,709 Culture and Leisure 1,474,364 Community Development 1,051 Public Safety 273,949 Public Works 9,422,318 Equipment Maintenance 499,798 Information Technology 163,374 $ 13,305,563 Business-Type Activities: Water Utility $ 3,824,066 Sewer Utility 1,130,411 $ 4,954,477 48 CITY OF CHINO HILLS NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30,2011 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, 2011: Balance at Balance at Due Within July 1,2010 Additions Deletions June 30, 2011 One Year Civic Center COP $ 21,865,000 $ - $ 420,000 $ 21,445,000 $ 600,000 Advances from developers 773,756 - - 773,756 - Development fee program obligations 38,995,168 2,297,192 4,862,007 36,430,353 - Capital Lease obligations 307,095 - 87,765 219,330 91,437 Equestrian Center lease 12 - 1 11 1 Other post employment benefits obligations 269,492 141,112 1,241 409,363 - Compensated absences 851,997 393 2,655 849,735 500 Total $ 63,062,520 $ 2,438,697 $ 5,373,669 $ 60,127,548 $ 691,938 Unamortized Bond Premium 40,943 $ - $ 1,566 39,377 Total Long-Term Debt $ 63,103,463 $ 60,166,925 Long-term debt repayments per governmental funds financial statements, $ 5,035,722 Long-term debt repayment made by the Assessment District Funds: The City has executed many agreements with outside developers requiring developers to provide up-front funding for the cost of backbone infrastructure. As a result, the City has recorded development fee program obligations. A portion of the development fee program obligation is repaid periodically by the Assessment Districts Agency Fund by giving a building permit fee credit against assessments previously paid to the Assessment District Funds. For fiscal year 2010-2011, the amount repaid by the Assessment District Agency Funds was: 246,286 Other post employment benefits obligations payments 1,241 Compensated absences payouts. 2,655 Capital lease obligations reported in the internal service funds 87765 Total Deletions per Changes in Long-Term Debt Schedule $ 5,373,669 49 CITY OF CHINO HILLS NOTES TO FINANCIAL STATEMENTS(CONTINUED) JUNE 30, 2011 Note 6: Long-Term Debt(Continued) In June 2007, the City issued $22,040,000 in Certificates of Participation. The certificates consist of $5,005,000 serial certificates maturing in principal amounts of $85,000 to $670,000 beginning September 2008 through September 2017 with interest rates ranging from 3.600% to 4.125%, term certificates of $7,240,000 due September 1, 2026, with an interest rate of 5.000%, and term certificates of$9,795,000 due September 1, 2036, with an interest rate of 5.000%. The Certificates were issued to provide funds to finance a portion of the costs of the construction and installation of a new Civic Center, including a new City Hall complex, a new sheriff substation, a new fire administration facility, a new library, the widening of Peyton Drive and the inlet/outlet English Channel transition at Peyton Drive and related infrastructure. $ 21,445,000 The annual requirements to amortize the Certificates of Participation outstanding as of June 30, 2011,were as follows: Principal Interest 2011-2012 $ 600,000 $ 1,014,023 2012-2013 625,000 990,898 2013-2014 650,000 966,429 2014-2015 670,000 940,770 2015-2016 665,000 914,405 2016-2017 3,240,000 4,159,753 2017-2021 4,215,000 3,242,125 2022-2026 5,365,000 2,048,375 2027-2031 5,115,000 600,875 2032-2036 300,000 7,500 Totals $ 21,445,000 $ 14,885,153 • Advances From Developers Advances from developers represent monies owed to developers for development fees collected in advance. Future development fees will be used to reimburse developers for their cost. There is no fixed repayment schedule. $ 773,756 50 CITY OF CHINO HILLS NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2011 Note 6: Long-Term Debt(Continued) Development Fee Program Obligations The City has executed many agreements with outside developers requiring developers to provide funding up-front for the costs of backbone infrastructure (major thoroughfares, water and sewer mains, etc.) concurrent with the development of their residential and commercial projects. This up-front funding is generally in the form of the developer constructing the backbone infrastructure. Future development fees will be used to reimburse the developers (either as credits against fees owed or cash reimbursements if not fully credited) for their costs. A liability has been recorded for the project costs incurred to date, including estimated interest payable related to one of the projects. There is no fixed repayment schedule. $ 36,430,353 Capital Lease Obligations The City entered into a five year lease purchase agreements in fiscal year 2008-2009 for copiers. The assets acquired and the related obligation are reported in the Information Technology internal service fund. $ 219,330 The annual requirements to amortize the capital lease obligations outstanding as of June 30, 2011,were as follows: Principal Interest 2011-2012 $ 91,437 $ 7,297 2012-2013 95,262 3,471 2013-2014 32,631 280 Totals $ 219,330 $ 11,048 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. $ 11 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. $ 849,735 51 CITY OF CHINO HILLS NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2011 Note 6: Long-Term Debt(Continued) 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. $ 409,363 b. Business Type Activities The following is a summary of changes in Proprietary Funds debt for the year ended June 30, 2011: Balance at Balance at Due Within July 1,2010 Additions Deletions June 30, 2011 One Year Utility development program obligations $ 3,099 $ - $ - $ 3,099 $ Certificates of participation 19,915,000 - 1,240,000 18,675,000 1,280,000 Compensated absences 221,168 16,974 10,103 228,039 6,500 Totals 20,139,267 $ 16,974 $ 1,250,103 18,906,138 $ 1,286,500 Deferred amount on refunding (870,593) $ - $ 109,393 (761,200) Unamortized bond discount (81,086) - 5,763 (75,323) Total Long-Term Debt $ 19,187,588 $ 18,069,615 • Certificates of Participation On December 2, 2003, the City issued $18,210,000 in Certificates of Participation. The certificates consist of serial certificates maturing in principal amounts of $940,000 to $1,460,000 beginning June 2004 through June 2018, with interest rates ranging from 2.00% to 4.20%. The certificates were issued in order to refund $17,330,000 of outstanding installment obligations due on the 1996 Water Certificates of Participation. $ 9,440,000 The annual requirements to amortize the Certificates of Participation outstanding as of June 30, 2011, were as follows: Principal Interest 2011-2012 $ 1,250,000 $ 366,890 2012-2013 1,295,000 323,140 2013-2014 1,340,000 276,520 2014-2015 1,400,000 226,270 2015-2016 1,460,000 170,270 2016-2017 2,695,000 169,620 Totals $ 9,440,000 $ 1,532,710 52 CITY OF CHINO HILLS NOTES TO FINANCIAL STATEMENTS(CONTINUED) JUNE 30, 2011 Note 6: Long-Term Debt(Continued) On June 1, 2002, the City issued $9,545,000 in Certificates of Participation. The Certificates consist of serial certificates maturing in principal amounts of$20,000 to$685,000 beginning June 1, 2003 through June 2028, with interest rates ranging from 1.900% to 5.125% and term certificates of$3,140,000 maturing on June 1, 2032, with an interest rate of 5.300%. The Certificates were issued for the acquisition, construction and installation of certain improvements to the City's water system. $ 9,235,000 The annual requirements to amortize the Certificates of Participation outstanding as of June 30, 2011,were as follows: Principal Interest 2011-2012 30,000 472,454 2012-2013 30,000 471,209 2013-2014 30,000 469,919 2014-2015 25,000 468,599 2015-2016 20,000 2,257,761 2016-2021 1,820,000 1,747,954 2021-2026 2,805,000 989,906 2026-2031 3,630,000 130,988 2031-2036 845,000 44,363 Totals $ 9,235,000 $ 7,053,153 Development Program Obligations The City has executed many agreements with outside developers requiring developers to provide funding up-front for the costs of backbone infrastructure (major thoroughfares, water and sewer mains, etc.) concurrent with the development of their residential and commercial projects. This up-front funding is generally in the form of the developer constructing the backbone infrastructure. Future development fees will be used to reimburse the developers for their up-front funding. A liability has been recorded for the project costs incurred to date. $ 3,099 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. $ 228,039 53 CITY OF CHINO HILLS NOTES TO FINANCIAL STATEMENTS(CONTINUED) JUNE 30, 2011 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. Included in the Agency fund is$64,205,000 of funds due to bondholders relating to these obligations. The debt outstanding at June 30, 2011, consists of the following individual issues: 2004$14,560,000 Community Facilities District Special Tax Refunding Bonds due in annual installments of $1,530,000 to $2,075,000 through September 1, 2011; interest ranging from 2.00% to 3.00%. The bonds were issued to decease $3,725,000 of 1991 Community Facilities- District No. 2, Special Tax Bonds, Series "A", $5,815,000 of 1993 Community Facilities - District No. 1, Special Tax Refunding Bonds, $1,805,000 of 1993 Community Facilities - District No. 4, Special Tax Refunding Bonds, $1,340,000 of 1993 Community Facilities - District No.5, Special Tax Refunding Bonds and$1,875,000 of 1993 Community Facilities -District No. 8, Special Tax Refunding Bonds. $ 2,075,000 2006 $48,365,000 Community Facilities District Bond Program to finance the Community Facilities share of the Government Center. Serial Series B bonds due in annual installments of $1,050,000 to $4,680,000 through September 1, 2026; interest ranging from 3.625% to 4.375% plus $1,295,000 term bonds due September 1,2030; interest rates varying from 4.400%to 4.5000%. $ 41,320,000 2010 $12,390,000 Community Facilities District No. 10, (Fairfield Ranch) Special Tax Refunding Bonds refunded the 2000 $13,040,000 Community Facilities District No. 10, Special Tax Bonds. The 2010 refunding bonds include serial bonds due in annual installments of$335,000 to $935,000 through September 1, 2030;interest ranging from 2.00%to 5.00%. $ 12,390,000 2011 $4,915,000 Community Facilities District No. 9 (Rincon Village Area)Special Tax Refunding Bonds, refunded the1998 $14,860,000 Community Facilities District No. 9, Special Tax Bonds. The 2011 refunding bonds include serial bonds due in annual installments of $70,000 to $615,000 through September 2021; interest ranging from 1.250%to 5.125% $ 4,915,000 54 CITY OF CHINO HILLS NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30,2011 Note 6: Long-Term Debt(Continued) Re-Assessment District No. 10-1;The City issued bonds for$3,505,000 on August 5, 2010 for the refinance of Reassessment District 1995.The serial bonds are due in annual installments of$265,000 to$390,000 through September 21,2021,with an interest rate of 2.00%to 5.32%. $ 3,505,000 Note 7: Pension Plan Plan Description The City of Chino Hills contributes to the San Bernardino County Employees' Retirement Association (SBCERA), a cost-sharing multiple-employer defined benefit pension plan operating under the California County Employee's Retirement Act of 1937 and covering substantially all employees of the County of San Bernardino, the City of Chino Hills, the City of Big Bear Lake, the California State Association of Counties, the South Coast Air Quality Management District(AQMD), the San Bernardino County Law Library, the Crest Forest Fire District, Mojave Desert Air Quality Management District (MDAQMD), and the Superior Courts collectively referred to as the "Participating Members." SBCERA provides retirement, disability benefits, annual cost of living adjustments and death benefits to plan members and beneficiaries. SBCERA acts as a common investment and administrative agent for the Participating Members. SBCERA publishes its own Comprehensive Annual Financial Report and receives its own independent audit. This report may be obtained from their executive office: 348 West Hospitality Lane, Third Floor, San Bernardino, CA 92415-0014. Funding Policy Participating members are required to contribute a percentage of covered salary based on certain actuarial assumptions and their age at entry into the Plan. The City pays a portion of the employees' required contribution to the Plan at a rate of 8% of the employees covered payroll. The City pays the entire employee required contribution for Executive Management and Division Managers. The current employer's rate for General Members is 20.39% of annual covered payroll. The contribution requirements of the plan members and the City are established and may be amended by SBCERA. 55 CITY OF CHINO HILLS NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30,2011 Note 7: Pension Plan(Continued) Required Contributions For fiscal year 2010-2011, the City's annual pension cost of$3,599,384 for SBCERA was equal to the City's required and actual contributions. The required contribution was determined as part of the June 30, 2010, actuarial valuation using the entry age normal actuarial cost method. The actuarial assumptions included (a) 8.00% investment rate of return (net of administrative expenses), (b) projected annual salary increase that vary by duration of service and (c) cost-of-living adjustments are contingent upon CPI increases with a 2% maximum. Both (a)and (b)included an inflation component of 3.75%. The Asset Valuation Method of SBCERA employs market value of assets less unrecognized market value gains and losses from each of the last five years. Market value gains and losses are equal to the difference between the actual market return and the expected return on the market value, and are recognized over a five-year period. The actuarial value of assets is reduced by the value of the non-valuation reserves. SBCERA unfunded actuarial accrued liability (URAL) is being amortized as a level percentage of future active member payroll (including payroll for new members) assuming a constant number of active members. The June 30, 2002, UAAL is being recognized over a 20-year declining period effective June 30, 2002. Any new UAAL after June 30, 2002, that arises at each valuation is amortized over its own 20-year declining period. (Amount in Thousands) Percentage of Required Required Contributions Fiscal Year Contributions Contributed 6/30/2009 $ 3,269 100% 6/30/2010 3,461 100% 6/30/2011 3,599 100% 56 CITY OF CHINO HILLS NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2011 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 $75.60 per month for 2011. The retiree pays the remainder of the PEMHCA premium. The City does not provide contributions for retiree dental, vision, or life insurance benefits. Funding Policy Currently, the City funds retiree healthcare benefits on a pay-as-you-go basis, paying for retiree benefits from the City's General Fund as they are due with no pre-funding for future years. For fiscal year 2010-2011, the City paid$1,241 for benefits of two retired employees. Annual OPEB Cost and Net OPEB Obligation The City's annual other postemployment benefit (OPEB) cost is calculated based on the annual required contribution of the employer (ARC), an amount actuarially determined in accordance with the parameters of GASB Statement 45. The ARC represents a level of funding that, if paid on an ongoing basis, is projected to cover normal cost each year and amortize any unfunded actuarial liabilities over a period not to exceed thirty years. The following table shows the components of the City's annual OPEB cost for the year, the amount actually contributed to the plan, and changes in the City's net OPEB obligation: Retiree Healthcare Plan Annual required contribution(ARC) $ 146,000 Interest on net OPEB obligation 11,453 Adjustment to ARC (16,341) Annual OPEB cost(expense) 141,112 Contribution made 1,241 Increase in net OPEB obligation 139,871 Net OPEB obligation-July 1,2010 269,492 Net OPEB obligation-June 30, 2011 $ 409,363 The City's annual OPEB cost, the percentage of annual OPEB cost contributed to the plan, and the net OPEB obligation for the 2010-11 fiscal year and the two preceding years were as follows: Percentage of Fiscal Year Annual Annual OPEB Net OPEB Ended OPEB Cost Cost Contributed Obligation 06/30/09 $ 133,000 100.27% $ 132,636 06/30/10 140,865 52.27% 269,492 06/30/11 141,112 34.47% 409,363 57 CITY OF CHINO HILLS NOTES TO FINANCIAL STATEMENTS(CONTINUED) JUNE 30,2011 Note 8: Other Post-Employment Employee Benefits(Continued) Funded Status and Funding Progress Actuarial valuations of an ongoing plan involve estimates of the value of reported amounts and assumptions about the probability of occurrence of events far into the future. Examples include assumptions about future employment, mortality, and the healthcare cost trends. Amounts determined regarding the funded status of the plan and the annual required contributions of the employer are subject to continual revision as actual results are compared with past expectations and new estimates are made about the future. The schedule of funding progress below presents multiyear trend information about whether the actuarial value of plan assets is increasing or decreasing over time relative to the actuarial accrued liabilities for benefits. Only one year is presented since the City implemented the provision of GASB Statement 45 in fiscal year 2010-11 and performs its actuarial valuation every three years. Schedule of Funding Progress for OPEB (Amount in Thousands) Actuarial Accrued URAL as Actuarial Actuarial Liability Unfunded a%of Valuation Valuation of (ML) Entry ML Funded Covered Covered date Assets Age (URAL) Ratio Payroll Payroll 1/1/2009 $ - $ 919 $ (919) 0.0% $ 9,175 10.0% 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 January 1, 2009, used the Entry Age Normal actuarial cost method, a discount rate of 4.25%which is the long-term expected rate of return on the City's investment fund, an annual general inflation rate of 3.75%, and an annual aggregate payroll increase of 4.25%. 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 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 one retiree receiving benefits. 58 CITY OF CHINO HILLS NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2011 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 121 California public entities and is organized under a joint powers agreement pursuant to California Government Code §6500 et seq. The purpose of the Authority is to arrange and administer programs for the pooling of self-insured losses, to purchase excess insurance or reinsurance, and to arrange for group purchased insurance for property and other lines of coverage. The California JPIA began covering claims of its members in 1978. Each member government has an elected official as its representative on the Board of Directors. The Board operates through a nine-member Executive Committee. b. Self—Insurance Programs of the Authority A revised cost allocation methodology was introduced in 2010-11, however it retains many elements of the previous cost allocation methodology. Each member pays an annual contribution (formerly called the primary deposit)to cover estimated losses for the coverage period. This initial funding is paid at the beginning of the coverage period. After the close of the coverage period, outstanding claims are valued. A retrospective deposit computation is then conducted annually thereafter until all claims incurred during the coverage period are closed on a pool-wide basis. This subsequent cost re-allocation among members based on actual claim development can result in adjustments of either refunds or additional deposits required. The total funding requirement for self-insurance programs is estimated using actuarial models and pre-funded through the annual contribution. Costs are allocated to individual agencies based on exposure (payroll) and experience (claims) relative to other members of the risk-sharing pool. Additional information regarding the cost allocation methodology is provided below. Liability In the liability program claims are pooled separately between police and non-police exposures. (1) The payroll of each member is evaluated relative to the payroll of other members. A variable credibility factor is determined for each member, which establishes the weight applied to payroll and the weight applied to losses within the formula. (2) The first layer of losses includes incurred costs up to $30,000 for each occurrence and is evaluated as a percentage of the pool's total incurred costs within the first layer. (3) The second layer of losses includes incurred costs from $30,000 to $750,000 for each occurrence and is evaluated as a percentage of the pool's total incurred costs within the second layer. (4) Incurred costs in excess of$750,000 up to the reinsurance attachment point of$5 million are distributed based on the outcome of cost allocation within the first and second loss layers. (5) Costs of covered claims from $5 million to $10 million are paid under a reinsurance contract subject to a $2.5 million annual aggregate deductible. Costs of covered claims from $10 million to $15 million are paid under two reinsurance contracts subject to a combined$3 million annual aggregate deductible. On a cumulative basis for all 2010-11 reinsurance contracts the annual aggregate deductible is $5.5 million. (6) Costs of covered claims from $15 million up to $50 million are covered through excess insurance policies. The overall coverage limit for each member including all layers of coverage is $50 million per occurrence. 59 CITY OF CHINO HILLS NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30,2011 Note 9: Liability, Property and Workers'Compensation Protection (Continued) Costs of covered claims for subsidence losses are paid by reinsurance and excess insurance with a pooled sub-limit of $35 million per occurrence. This $35 million subsidence sub-limit is composed of(a) $5 million retained within the pool's SIR, (b) $10 million in reinsurance and (c) $20 million in excess insurance. The excess insurance layer has a$20 million annual aggregate. Workers'Compensation In the workers' compensation program claims are pooled separately between public safety(police and fire) and non-public safety exposures. (1)The payroll of each member is evaluated relative to the payroll of other members. A variable credibility factor is determined for each member, which establishes the weight applied to payroll and the weight applied to losses within the formula. (2)The first layer of losses includes incurred costs up to $50,000 for each occurrence and is evaluated as a percentage of the pool's total incurred costs within the first layer. (3) The second layer of losses includes incurred costs from $50,000 to$100,000 for each occurrence and is evaluated as a percentage of the pool's total incurred costs within the second layer. (4) Incurred costs in excess of $100,000 up to the reinsurance attachment point of $2 million are distributed based on the outcome of cost allocation within the first and second loss layers. (5) Costs of covered claims from $2 million up to statutory limits are paid under a reinsurance policy. Protection is provided per statutory liability under California Workers'Compensation Law. Employer's Liability losses are pooled among members to $2 million. Coverage from $2 million to $4 million is purchased as part of a reinsurance policy, and Employer's Liability losses from $4 million to$10 million are pooled among members. c. Purchased Insurance Pollution Leaal Liability Insurance The City of Chino Hills participates in the pollution legal liability insurance program (formerly called environmental insurance) which is available through the Authority. The policy covers sudden and gradual pollution of scheduled property, streets, and storm drains owned by the City of Chino Hills. Coverage is on a claims-made basis. There is a $50,000 deductible. The Authority has a limit of $50 million for the 3-year period from July 1, 2008 through July 1, 2011. Each member of the Authority has a $10 million sub- limit during the 3-year term of the policy. Property Insurance The City of Chino Hills participates in the all-risk property protection program of the Authority. This insurance protection is underwritten by several insurance companies. City of Chino Hills property is currently insured according to a schedule of covered property submitted by the City of Chino Hills to the Authority. City of Chino Hills property currently has all-risk property insurance protection in the amount of $97,759,439. There is a $5,000 deductible per occurrence. Premiums for the coverage are paid annually and are not subject to retrospective adjustments. Crime Insurance The City of Chino Hills purchases crime insurance coverage in the amount of$1,000,000 with a $2,500 deductible. The fidelity coverage is provided through the Authority. Premiums are paid annually and are not subject to retrospective adjustments. 60 CITY OF CHINO HILLS NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2011 Note 9: Liability, Property and Workers'Compensation Protection (Continued) 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 2010-11. 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 1. The California Supreme Court issued an opinion in December 1995 relating to the validity of Proposition 62, which was passed by the voters in 1986 (the Guardino case). This case could potentially affect the City with respect to the monies the City received and will receive, from the County of San Bernardino pursuant to the Measure I voter—approved initiative, and the monies the City has received and will receive, from its business license fees and from its property transfer tax. The City cannot further assess its potential liabilities at this time until additional opinions are issued by the State of California courts. 2. Proposition 218, which was approved by the voters in November 1996, will regulate the City's ability to impose, increase and extend taxes, assessments and fees. Any new, increased or extended taxes, assessments and fees subject to the provisions of Proposition 218 require voter approval before they can be implemented. Additionally, Proposition 218 provides that these taxes, assessments and fees are subject to the voter initiative process and may be rescinded in the future by the voters. Therefore, the City's ability to finance the services for which the taxes, assessments and fees were imposed may be significantly impaired. The taxes,fees and assessments that are subject to the provisions of Proposition 218 that the City currently imposes for its own benefit or as an agent for a special district, or receives from other governmental agencies, potentially include the Measure I taxes, business license fees, community facilities districts, special taxes, landscape and lighting district assessments, street sweeping assessments, water utility fees, sewer utility fees and refuse disposal fees, Certain language in the initiative is unclear as to the scope and impact of the proposition. Future court rulings or state legislation may clarify these issues. At this time it is uncertain how Proposition 218 will affect the City's ability to maintain or increase the revenue it receives from taxes, assessments and fees. 3. A general plan initiative was passed by City residents in November 1999, which removed the City Council's ability to increase residential density zoning. An increase in residential zoning density would require a majority voter approval. 61 CITY OF CHINO HILLS NOTES TO FINANCIAL STATEMENTS(CONTINUED) JUNE 30,2011 Note 10: Contingencies(Continued) Current zoning on a significant amount of 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 significantly slow down development in the City due to the voter approval requirement. 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 the Authority approved the prepayment by the City of Chino Hills of its installment payment obligation pursuant to the 1986 Installment Purchase Agreement between the Authority and its participants. As a result of such prepayment and redemption of such 1986 Certificates, the City of Chino Hills has no further obligation for the payment of installment payments to the Authority. The value of the City's investment in the Authority at June 30, 2011,was$3,510,445. Audited financial information of the Authority for the fiscal year ended June 30, 2011,was summarized as follows: 62 CITY OF CHINO HILLS NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30,2011 Note 11: Joint Venture(Continued) Water Facilities Authority Net Assets: Total assets $ 35,664,356 Total liabilities (12,317,483) Total Net Assets $ 23,346,873 Water Facilities Authority Changes in Net Assets: Operating revenues $ 16,988,678 Operating expenses (16,976,846) Operating loss before depreciation and amortization 11,832 Depreciation and amortization (1,050,831) Operating revenue(loss) (1,038,999) Nonoperating revenues(expenses) 340,273 Contributions 1,642,470 Change in net assets 943,744 Beginning Net Assets 22,403,129 Ending Net Assets $ 23,346,873 The participants and their audited financial contributions through June 30, 2011, were as follows: Amount Percent City of Chino Hills $ 5,354,632 15.04% Monte Vista Water District 5,751,272 16.15% City of Chino 5,488,430 15.41% City of Ontario 11,939,841 33.53% City of Upland 6,970,401 19.57% Non-Participants 107,399 0.30% Total $ 35,611,975 100.00% Financial statements of the Authority can be obtained from the office of Charles Z. Fedak& Co., 6081 Orange Avenue, Cypress, California 90630. b. Chino Basin Desalter Authority On January 15, 2002, the Chino Basin Desalter Authority (the Authority) was created under a joint exercise of powers agreement between the City of Chino Hills and other neighboring government agencies. This agreement was formed to successfully manage the groundwater resources in the Chino Basin. The governing Board of Director consists of one representative appointed from each participating agency and has the power and responsibility to adopt budgets, operating plans and finance activities to further the purpose of the Authority. The City's investment in the Authority has been recorded under the equity method of accounting and is shown as an investment in joint venture in the Chino Basin Desalter Authority. At June 30, 2011, the value of the City's investment in the Authority was $9,699,304. 63 CITY OF CHINO HILLS NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30,2011 Note 11: Joint Venture (Continued) On June 11, 2009, the Chino Basin Desalter Authority issued the Desalter Refunding Bonds, Series 2008A in the amount of$ 89,440,000 to refund the 2004 Adjustable Rate Revenue Refunding Bonds, Series 1 and 2. The new revenue refunding bond has various debt payment schedules tailored to each CDA member agency, based on their respective election. This provision affords each member the ability to prepay their share of debt service. Unaudited Financial information of the Authority for the fiscal year ended June 30, 2011, is summarized as follows: Chino Basin Desalter Authority Net Assets: Total assets $ 145,307,722 Total liabilities (90,270,155) Total Net Assets $ 55,037,567 Chino Basin Desalter Authority Changes in Net Assets: Operating revenues $ 32,272,194 Operating expenses (31,803,000) Operating gain before depreciation and amortization 469,194 Depreciation and amortization (4,390,000) Operating revenue(loss) (3,920,806) Nonoperating revenues (expenses) 1,496,563 Income(loss) before transfers and contributions (2,424,243) Capital grants 22,487 Change in net assets (2,401,756) Beginning Net Assets 57,439,323 Ending Net Assets $ 55,037,567 The participants'contributions through June 30, 2011,were as follows: Amount Percent JCSD $ 7,039,394 35.05% City of Chino Hills 3,732,857 18.59% City of Chino 4,443,541 22.12% City of Norco 888,758 4.43% City of Ontario 2,913,641 14.51% Santa Ana River Co. 1,066,553 5.31% Total $ 20,084,744 100.01% Financial statements of the Authority can be obtained from the CDA Treasurers office located at 6075 Kimball Avenue, Chino, CA 91710. 64 CITY OF CHINO HILLS NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2011 Note 12: Other Commitments On February 13, 2007, the City of Chino Hills entered into an agreement with the County of San Bernardino to provide for the design and construction of a multi-puporse community center on the old City Yard site on Pipeline Avenue. The City is responsible for the design and construction of the facility and agrees to provide the staffing and operational costs throughout the term of the agreement. The County allows the City to occupy the premises for a period of 30 years. At the termination of the agreement, the City agrees to vacate the premises and remove personal property at the request of the County. Due to the impact of the Tehachapi Renewable Transmission Project(TRTP), the project was put on hold pending a resolution of the TRTP issue. On August 18, 2010, the agreement was amended to require that construction begin within three years of the execution of this amendement. In addition, the amount the County would provide for construction was reduced from $6,000,000 to$4,000,000. The City has already received$1,000,000 and would receive the remaing$3,000,000 as stipulated in the original agreement. In fiscal year 2005-06, the City transferred the Pipeline site to the County by grant deed. The County intends to re-convey the Pipeline site to the City in partial payment of its obligation to pay for the Community Center. The City has included the Pipeline site in the Water Utility capital assets because it was once the City Yard. Note 13: Net Asset Restatements Beginning net assets has been restated as follows: Governmental Activities: To set up the Water Facilities Fee as a Special Revenue Fund $ 11,463,534 To set up the Sewer Facilities Fee as a Special Revenue Fund 5,101,126 $ 16,564,660 Business-Type Activities: To set up the Water Facilities Fee as a Special Revenue Fund $ (11,463,534) To set up the Sewer Facilities Fee as a Special Revenue Fund (5,101,126) $ (16,564,660) 65 i. 4 ':, ;, rpt �L1 SE` _,,e,..77 ac CITYOF CHIN® HILLS I N C O R P O R A T E D 1 9 9 1 THIS PAGE INTENTIONALLY LEFT BLANK 66 _ _ __ ................ 1 4c.......,11 SUPPLEMENTARY INFORMATION 0.444ilit 1. 4 {j•.'•' I? ' ' ' I,'a- 1 ,,, �'• CITY OF CHINO HILLS INCORPORATED 1 9 9 1 ■1 III I IIII•111I111111 I I I IIMI CITY OF CHINO HILLS I COMBINING BALANCE SHEET ', NONMAJOR GOVERNMENTAL FUNDS JUNE 30,2011 Special Revenue Funds Sleepy General Storm Drain Hollow Road Facilities Traffic Facilities Improvement Fees Facilites Fees Fees Assets: Cash and investments $ 45,858 $ 402,046 $ 867,753 $ 1,835,580 Receivables: Accounts - - - 7,237 ' Taxes - - - - Interest 76 674 1,458 4,125 Special assessments 288 - - - Due from other governments - - - - Due from developers - - - 12,719 Advances to other funds - 761,482 140,597 3,072,692 Restricted assets: Cash and investments with fiscal agents - - - - Total Assets $ 46,222 $ 1,164,202 $ 1,009,808 $ 4,932,353 Liabilities and Fund Balances: Liabilities: Accounts payable $ 824 $ - $ - $ - Accrued liabilities - - - - Due to other funds - - - - Due to developers - - - - Deferred revenues - - - - Unearned revenues - - - - Advances from other funds - - - - Total Liabilities 824 - - - Fund Balances: Nonspendable: Advances to other funds - 761,482 140,597 3,072,692 Restricted for: Community development projects - 402,720 869,211 1,859,661 Public safety - - - - Public works 45,398 - - - Capital Projects - - - - Unassigned - - - - Total Fund Balances 45,398 1,164,202 1,009,808 4,932,353 Total Liabilities and Fund Balances $ 46,222 $ 1,164,202 $ 1,009,808 $ 4,932,353 67 CITY OF CHINO HILLS COMBINING BALANCE SHEET NONMAJOR GOVERNMENTAL FUNDS JUNE 30,2011 (Continued) Special Revenue Funds Parkland Traffic Signal Fees Fees Gas Tax Air Quality Assets: Cash and investments $ 1,629,403 $ 389,216 $ 1,124,705 $ 489,976 Receivables: Accounts - - 22,342 - Taxes - - 232,536 - Interest 2,739 653 1,447 857 Special assessments - - - - Due from other governments - - - 19,012 Due from developers - - - Advances to other funds - - - - Restricted assets: Cash and investments with fiscal agents - - - - Total Assets $ 1,632,142 $ 389,869 $ 1,381,030 $ 509,845 Liabilities and Fund Balances: Liabilities: Accounts payable $ - $ - $ 77,321 $ Accrued liabilities 1,710 - 22,281 - Due to other funds - - - - Due to developers - - - - Deferred revenues - - - - Unearned revenues - - - - Advances from other funds 2,385,750 - - - Total Liabilities 2,387,460 - 99,602 - Fund Balances: Nonspendable: Advances to other funds - - - - Restricted for: Community development projects - - - - Public safety - - - - Public works - 389,869 1,281,428 509,845 Capital Projects - - - - Unassigned (755,318) - - - Total Fund Balances (755,318) 389,869 1,281,428 509,845 Total Liabilities and Fund Balances $ 1,632,142 $ 389,869 $ 1,381,030 $ 509,845 68 CITY OF CHINO HILLS COMBINING BALANCE SHEET NONMAJOR GOVERNMENTAL FUNDS JUNE 30,2011 , Special Revenue Funds Federal Street Grants Measure I Solid Waste Sweeping Assets: Cash and investments $ - $ 1,943,465 $ 467,585 $ 670,443 Receivables: Accounts - - 437,602 - Taxes - - - - Interest - 3,535 - 1,170 Special assessments - - - 2,736 Due from other governments 78,449 - - - Due from developers - - - - Advances to other funds - - - - Restricted assets: Cash and investments with fiscal agents - - - - Total Assets $ 78,449 $ 1,947,000 $ 905,187 $ 674,349 Liabilities and Fund Balances: Liabilities: Accounts payable $ 27,373 $ - $ 832,576 $ 35,815 Accrued liabilities 1,954 - - - Due to other funds 49,122 - 72,611 - Due to developers - - - - Deferred revenues - - - - Unearned revenues - - - - Advances from other funds - - - - Total Liabilities 78,449 - 905,187 35,815 Fund Balances: Nonspendable: Advances to other funds - - - - Restricted for: Community development projects - - - - Public safety - - - Public works - 1,947,000 - 638,534 Capital Projects - - - - Unassigned - - - - Total Fund Balances - 1,947,000 - 638,534 Total Liabilities and Fund Balances $ 78,449 $ 1,947,000 $ 905,187 $ 674,349 69 CITY OF CHINO HILLS COMBINING BALANCE SHEET NONMAJOR GOVERNMENTAL FUNDS JUNE 30,2011 (Continued) Special Revenue Funds Affordable Frontline Miscellaneous Housing Policing Grants Program Prop 1B Assets: Cash and investments $ - $ - $ 169,146 $ - Receivables: Accounts - - - - Taxes - - - - Interest - - 279 - Special assessments - - - - Due from other governments 11,324 725,955 - - Due from developers - - - - Advances to other funds - - - - Restricted assets: Cash and investments with fiscal agents - - - Total Assets $ 11,324 $ 725,955 $ 169,425 $ - Liabilities and Fund Balances: Liabilities: Accounts payable $ - $ - $ - $ - Accrued liabilities - - - - Due to other funds - 646,138 - - Due to developers - - - - Deferred revenues - 618,538 - - Unearned revenues - 79,817 - - Advances from other funds - - - Total Liabilities - 1,344,493 - - Fund Balances: Nonspendable: Advances to other funds - - - - Restricted for: Community development projects - - 169,425 - Public safety 11,324 - - - Public works - - - - Capital Projects - - - - Unassigned - (618,538) - - Total Fund Balances 11,324 (618,538) 169,425 - Total Liabilities and Fund Balances $ 11,324 $ 725,955 $ 169,425 $ - 70 CITY OF CHINO HILLS COMBINING BALANCE SHEET NONMAJOR GOVERNMENTAL FUNDS JUNE 30,2011 Capital Special Revenue Funds Project Fund Local Government Traffic Energy CFD#9 Congestion Efficiency Sewer Rincon Relief CDBG Facilities Fee Village Assets: Cash and investments $ - $ - $ 2,480,677 $ 57 Receivables: Accounts - - 314 - Taxes - - - - Interest - - 4,160 360 Special assessments - - - 5,913 Due from other governments - 20,188 - - Due from developers - - 1,865 - Advances to other funds - - 2,683,567 - Restricted assets: Cash and investments with fiscal agents - - - - Total Assets $ - $ 20,188 $ 5,170,583 $ 6,330 Liabilities and Fund Balances: Liabilities: Accounts payable $ - $ - $ - $ - Accrued liabilities - 515 - - Due to other funds - 19,673 - - Due to developers - - 1,475,640 - Deferred revenues - - - - Unearned revenues - - - - Advances from other funds - - - - Total Liabilities --- - 20,188 1,475,640 - Fund Balances: Nonspendable: Advances to other funds - - 2,683,567 - Restricted for: Community development projects - - - - Public safety - - - - Public works - - 1,011,376 - Capital Projects - - - 6,330 Unassigned - - - Total Fund Balances - - 3,694,943 6,330 Total Liabilities and Fund Balances $ - $ 20,188 $ 5,170,583 $ 6,330 71 CITY OF CHINO HILLS COMBINING BALANCE SHEET NONMAJOR GOVERNMENTAL FUNDS JUNE 30,2011 Capital Project Funds CFD#10 New Total Fairfield Community Governmental Ranch Center Funds Assets: Cash and investments $ - $ 3,933,243 $ 16,449,153 Receivables: Accounts - - 467,495 Taxes - - 232,536 Interest - 6,603 28,136 Special assessments - - 8,937 Due from other governments - - 854,928 Due from developers - - 14,584 Advances to other funds - - 6,658,338 Restricted assets: Cash and investments with fiscal agents 403,131 - 403,131 Total Assets $ 403,131 $ 3,939,846 $ 25,117,238 Liabilities and Fund Balances: Liabilities: Accounts payable $ - $ - $ 973,909 Accrued liabilities - - 26,460 Due to other funds - - 787,544 Due to developers - - 1,475,640 Deferred revenues - - 618,538 Unearned revenues - - 79,817 Advances from other funds - - 2,385,750 Total Liabilities - - 6,347,658 Fund Balances: Nonspendable: Advances to other funds - - 6,658,338 Restricted for: Community development projects - - 3,301,017 Public safety - - 11,324 Public works - - 5,823,450 Capital Projects 403,131 3,939,846 4,349,307 Unassigned - - (1,373,856) Total Fund Balances 403,131 3,939,846 18,769,580 Total Liabilities and Fund Balances $ 403,131 $ 3,939,846 $ 25,117,238 72 CITY OF CHINO HILLS COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES NONMAJOR GOVERNMENTAL FUNDS YEAR ENDED JUNE 30,2011 Special Revenue Funds 1 Sleepy General Storm Drain Hollow Road Facilities Traffic Facilities Improvement Fees Facilites Fees Fees Revenues: Special assessments $ 9,623 $ - $ - $ - Intergovernmental - - - - Charges for services - - - - Developer fees - 45,671 5,636 35,309 Contributions from property owners - - - - Fines and forfeitures - - - - Use of money and property 306 2,809 6,106 42,363 Miscellaneous - - - - Total Revenues 9,929 48,480 11,742 77,672 Expenditures: Current: General government 1,147 - - - Public safety - - - - Public works - - - - Community development - 12,600 5,900 14,500 Culture and leisure - - - - Capital outlay - - - - Debt service: Interest and fiscal charges - - - - Total Expenditures 1,147 12,600 5,900 14,500 Excess(Deficiency)of Revenues Over(Under)Expenditures 8,782 35,880 5,842 63,172 Other Financing Sources(Uses): Transfers in - - - - Transfers out - - - (1,146,059) Proceeds from sale of capital asset - - - - Total Other Financing Sources (Uses) - - - (1,146,059) Net Change in Fund Balances 8,782 35,880 5,842 (1,082,887) Fund Balances, Beginning of Year 36,616 1,128,322 1,003,966 6,015,240 Restatements - - - - Fund Balances, Beginning of Year,as Restated 36,616 1,128,322 1,003,966 6,015,240 Fund Balances,End of Year $ 45,398 $ 1,164,202 $ 1,009,808 $ 4,932,353_ 73 CITY OF CHINO HILLS COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES NONMAJOR GOVERNMENTAL FUNDS YEAR ENDED JUNE 30,2011 (Continued) Special Revenue Funds Parkland Traffic Signal Fees Fees Gas Tax Air Quality Revenues: Special assessments $ - $ - $ - $ - Intergovernmental - - 1,955,503 86,775 Charges for services - - - - Developer fees 79,101 - - - Contributions from property owners - - - - Fines and forfeitures - - - - Use of money and property 10,475 2,737 4,472 3,659 Miscellaneous - - 29,002 - Total Revenues 89,576 2,737 1,988,977 90,434 Expenditures: Current: General government - - - - Public safety - - - - Public works - - 1,392,044 - Community development 21,500 - - - Culture and leisure - - - - Capital outlay - - - 99,996 Debt service: Interest and fiscal charges 23,938 - - Total Expenditures 45,438 - 1,392,044 99,996 Excess(Deficiency)of Revenues Over(Under)Expenditures 44,138 2,737 596,933 (9,562) Other Financing Sources(Uses): Transfers in - - 2,128 - Transfers out - - (9,448) (179,282) Proceeds from sale of capital asset - - - 5,645 Total Other Financing Sources (Uses) - - (7,320) (173,637) Net Change in Fund Balances 44,138 2,737 589,613 (183,199) Fund Balances, Beginning of Year (799,456) 387,132 691,815 693,044 Restatements - - - - Fund Balances, Beginning of Year, as Restated (799,456) 387,132 691,815 693,044 Fund Balances,End of Year $ (755,318) $ 389,869 $ 1,281,428 $ 509,845 74 CITY OF CHINO HILLS COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES NONMAJOR GOVERNMENTAL FUNDS YEAR ENDED JUNE 30,2011 Special Revenue Funds Federal Street 1 Grants Measure I Solid Waste Sweeping Revenues: Special assessments $ - $ - $ - $ 199,050 Intergovernmental 159,651 2,068,210 - - Charges for services - - 4,190,339 - Developer fees - - - - Contributions from property owners - - - - Fines and forfeitures - - - - Use of money and property - 14,023 - 4,687 Miscellaneous - - - - Total Revenues 159,651 2,082,233 4,190,339 203,737 Expenditures: Current: General government 904 - - - Public safety - - - - Public works - 3,400 4,190,339 294,552 Community development 23,039 - - - Culture and leisure 119,244 - - - Capital outlay - - - - Debt service: Interest and fiscal charges - - - - Total Expenditures 143,187 3,400 4,190,339 294,552 Excess(Deficiency)of Revenues Over(Under)Expenditures 16,464 2,078,833 - (90,815) Other Financing Sources(Uses): Transfers in - - - 703 Transfers out (16,464) (1,775,695) - - Proceeds from sale of capital asset - - - - Total Other Financing Sources ' (Uses) (16,464) (1,775,695) - 703 Net Change in Fund Balances - 303,138 - (90,112) Fund Balances, Beginning of Year - 1,643,862 - 728,646 Restatements - - - - Fund Balances, Beginning of Year, as Restated - 1,643,862 - 728,646 Fund Balances,End of Year $ - $ 1,947,000 $ - $ 638,534 75 CITY OF CHINO HILLS COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES I NONMAJOR GOVERNMENTAL FUNDS YEAR ENDED JUNE 30,2011 (Continued) Special Revenue Funds Affordable Frontline Miscellaneous Housing Policing Grants Program Prop 18 Revenues: Special assessments $ - $ - $ - $ - Intergovernmental 100,089 318,796 - - Charges for services - - - - Developer fees - - 60,989 - Contributions from property owners - - - - Fines and forfeitures - 1,342 - - Use of money and property 69 - 1,146 883 Miscellaneous - - - - Total Revenues 100,158 320,138 62,135 883 Expenditures: Current: General government - - - - Public safety 110,232 - - - Public works - - - - Community development - - - - Culture and leisure - - - - Capital outlay - - - - Debt service: Interest and fiscal charges - - - - Total Expenditures 110,232 - - - Excess (Deficiency)of Revenues Over(Under)Expenditures (10,074) 320,138 62,135 883 Other Financing Sources(Uses): Transfers in - - - - Transfers out - (597,013) - (699,501) Proceeds from sale of capital asset - - - - Total Other Financing Sources (Uses) - (597,013) - (699,501) Net Change in Fund Balances (10,074) (276,875) 62,135 (698,618) Fund Balances, Beginning of Year 21,398 (341,663) 107,290 698,618 Restatements - - - - Fund Balances, Beginning of Year,as Restated 21,398 (341,663) 107,290 698,618 Fund Balances,End of Year $ 11,324 $ (618,538) $ 169,425 $ - 76 CITY OF CHINO HILLS COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES NONMAJOR GOVERNMENTAL FUNDS YEAR ENDED JUNE 30,2011 Capital Special Revenue Funds Project Fund Local Government Traffic Energy CFD#9 Congestion Efficiency Sewer Rincon Relief CDBG Facilities Fee Village Revenues: Special assessments $ - $ - $ - $ - Intergovernmental - 75,057 - - Charges for services - - - - Developer fees - - - Contributions from property owners - - - 715,660 Fines and forfeitures - - - Use of money and property 3,353 - 41,268 1,086 Miscellaneous - - 30,289 - Total Revenues 3,353 75,057 71,557 716,746 Expenditures: Current: General government - - - - Public safety - - - - Public works - - 1,477,740 721,547 Community development - 74,773 - - Culture and leisure - - - - Capital outlay - 284 - - Debt service: Interest and fiscal charges - - - - Total Expenditures - 75,057 1,477,740 721,547 Excess(Deficiency)of Revenues Over(Under)Expenditures 3,353 - (1,406,183) (4,801) Other Financing Sources(Uses): Transfers in - - - - Transfers out (883,047) - - - Proceeds from sale of capital asset - - - - Total Other Financing Sources (Uses) (883,047) - - - Net Change in Fund Balances (879,694) - (1,406,183) (4,801) Fund Balances, Beginning of Year 879,694 - - 11,131 Restatements - - 5,101,126 - Fund Balances, Beginning of Year,as Restated 879,694 - 5,101,126 11,131 Fund Balances,End of Year $ - $ - $ 3,694,943 $ 6,330 77 CITY OF CHINO HILLS COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES NONMAJOR GOVERNMENTAL FUNDS YEAR ENDED JUNE 30,2011 Capital Project Funds CFD#10 New Total Fairfield Community Governmental Ranch Center Funds Revenues: Special assessments $ 7,542 $ - $ 216,215 Intergovernmental - - 4,764,081 Charges for services - - 4,190,339 Developer fees - - 226,706 Contributions from property owners - - 715,660 Fines and forfeitures - - 1,342 Use of money and property 5 27,632 167,079 Miscellaneous - - 59,291 Total Revenues 7,547 27,632 10,340,713 Expenditures: Current: General government - - 2,051 Public safety - - 110,232 Public works - - 8,079,622 Community development - - 152,312 Culture and leisure - - 119,244 Capital outlay - - 100,280 Debt service: Interest and fiscal charges - - 23,938 Total Expenditures - - 8,587,679 Excess(Deficiency)of Revenues Over(Under)Expenditures 7,547 27,632 1,753,034 Other Financing Sources(Uses): Transfers in - - 2,831 Transfers out - - (5,306,509) Proceeds from sale of capital asset - - 5,645 Total Other Financing Sources (Uses) - - (5,298,033) Net Change in Fund Balances 7,547 27,632 (3,544,999) Fund Balances, Beginning of Year 395,584 3,912,214 17,213,453 Restatements - - 5,101,126 Fund Balances, Beginning of Year,as Restated 395,584 3,912,214 22,314,579 Fund Balances,End of Year $ 403,131 $ 3,939,846 $ 18,769,580 78 CITY OF CHINO HILLS BUDGETARY COMPARISON SCHEDULE SLEEPY HOLLOW ROAD IMPROVEMENT YEAR ENDED JUNE 30,2011 Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) Budgetary Fund Balance,July 1 $ 36,616 $ 36,616 $ 36,616 $ - Resources(Inflows): Special assessments 9,000 9,000 9,623 623 Use of money and property 300 300 306 6 Amounts Available for Appropriation 45,916 45,916 46,545 629 Charges to Appropriation (Outflow): General government 400 1,500 1,147 353 Total Charges to Appropriations 400 1,500 1,147 353 Budgetary Fund Balance,June 30 $ 45,516 $ 44,416 $ 45,398 $ 982 79 CITY OF CHINO HILLS BUDGETARY COMPARISON SCHEDULE GENERAL FACILITIES FEES YEAR ENDED JUNE 30,2011 Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) Budgetary Fund Balance,July 1 $1,128,322 $ 1,128,322 $ 1,128,322 $ - Resources(Inflows): Developer fees 98,500 98,500 45,671 (52,829) Use of money and property 3,000 3,000 2,809 (191) Amounts Available for Appropriation 1,229,822 1,229,822 1,176,802 (53,020) Charges to Appropriation(Outflow): Community development 12,600 12,600 12,600 - Transfers out 348,000 348,000 - 348,000 Total Charges to Appropriations 360,600 360,600 12,600 348,000 Budgetary Fund Balance,June 30 $ 869,222 $ 869,222 $1,164,202 $ 294,980 80 CITY OF CHINO HILLS BUDGETARY COMPARISON SCHEDULE TRAFFIC FACILITIES FEES YEAR ENDED JUNE 30,2011 Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) Budgetary Fund Balance,July 1 $1,003,966 $ 1,003,966 $1,003,966 $ Resources(Inflows): Developer fees 12,200 12,200 5,636 (6,564) Use of money and property 7,700 7,700 6,106 (1,594) Amounts Available for Appropriation 1,023,866 1,023,866 1,015,708 (8,158) Charges to Appropriation(Outflow): Community development 5,900 5,900 5,900 - Total Charges to Appropriations 5,900 5,900 5,900 - Budgetary Fund Balance,June 30 $1,017,966 $ 1,017,966 $1,009,808 $ (8,158) 81 CITY OF CHINO HILLS BUDGETARY COMPARISON SCHEDULE STORM DRAIN FACILITIES FEES YEAR ENDED JUNE 30,2011 Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) Budgetary Fund Balance,July 1 $6,015,240 $ 6,015,240 $6,015,240 $ - Resources (Inflows): Developer fees 126,600 126,600 35,309 (91,291) Use of money and property 21,800 21,800 42,363 20,563 Amounts Available for Appropriation 6,163,640 6,163,640 6,092,912 (70,728) Charges to Appropriation(Outflow): Community development 14,500 14,500 14,500 - Debt service: Principal retirement - 1,965,000 - 1,965,000 Interest and fiscal charges - 31,700 - 31,700 Transfers out 2,291,300 2,636,400 1,146,059 1,490,341 Total Charges to Appropriations 2,305,800 4,647,600 1,160,559 3,487,041 Budgetary Fund Balance,June 30 $3,857,840 $ 1,516,040 $4,932,353 $ 3,416,313 82 CITY OF CHINO HILLS BUDGETARY COMPARISON SCHEDULE PARKLAND FEES YEAR ENDED JUNE 30,2011 , Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) Budgetary Fund Balance,July 1 $ (799,456) $ (799,456) $ (799,456) $ - Resources(Inflows): Developer fees 133,200 133,200 79,101 (54,099) Use of money and property 15,300 15,300 10,475 (4,825) Amounts Available for Appropriation (650,956) (650,956) (709,880) (58,924) Charges to Appropriation(Outflow): Community development 21,500 21,500 21,500 - Debt service: Principal retirement 300,000 300,000 - 300,000 Interest and fiscal charges 24,500 24,500 23,938 562 Total Charges to Appropriations 346,000 346,000 45,438 300,562 Budgetary Fund Balance,June 30 $ (996,956) $ (996,956) $ (755,318) $ 241,638 83 CITY OF CHINO HILLS BUDGETARY COMPARISON SCHEDULE TRAFFIC SIGNAL FEES YEAR ENDED JUNE 30,2011 Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) Budgetary Fund Balance,July 1 $ 387,132 $ 387,132 $ 387,132 $ - Resources (Inflows): Use of money and property 2,600 2,600 2,737 137 Amounts Available for Appropriation 389,732 389,732 389,869 137 Budgetary Fund Balance,June 30 $ 389,732 $ 389,732 $ 389,869 $ 137 84 CITY OF CHINO HILLS BUDGETARY COMPARISON SCHEDULE GAS TAX YEAR ENDED JUNE 30,2011 • Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) Budgetary Fund Balance,July 1 $ 691,815 $ 691,815 $ 691,815 $ - Resources(Inflows): Intergovernmental 2,097,900 2,097,900 1,955,503 (142,397) Use of money and property 5,500 5,500 4,472 (1,028) Miscellaneous - - 29,002 29,002 Transfers in - - 2,128 2,128 Amounts Available for Appropriation 2,795,215 2,795,215 2,682,920 (112,295) Charges to Appropriation(Outflow): Public works 1,473,900 1,473,900 1,392,044 81,856 Transfers out 172,300 113,100 9,448 103,652 Total Charges to Appropriations 1,646,200 1,587,000 1,401,492 185,508 Budgetary Fund Balance,June 30 $1,149,015 $ 1,208,215 $ 1,281,428 $ 73,213 85 CITY OF CHINO HILLS BUDGETARY COMPARISON SCHEDULE AIR QUALITY YEAR ENDED JUNE 30,2011 . Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) Budgetary Fund Balance, July 1 $ 693,044 $ 693,044 $ 693,044 $ - Resources (Inflows): Intergovernmental 92,200 92,200 86,775 (5,425) Use of money and property 3,100 3,100 3,659 559 Proceeds from sale of capital asset - - 5,645 5,645 Amounts Available for Appropriation 788,344 788,344 789,123 779 Charges to Appropriation(Outflow): Capital outlay 20,000 241,500 99,996 141,504 Transfers out 220,000 440,800 179,282 261,518 Total Charges to Appropriations 240,000 682,300 279,278 403,022 Budgetary Fund Balance,June 30 $ 548,344 $ 106,044 $ 509,845 $ 403,801 86 CITY OF CHINO HILLS _ BUDGETARY COMPARISON SCHEDULE FEDERAL GRANTS YEAR ENDED JUNE 30,2011 Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) Budgetary Fund Balance,July 1 $ - $ - $ - $ - Resources(Inflows): Intergovernmental 457,000 457,000 159,651 (297,349) Amounts Available for Appropriation 457,000 457,000 159,651 (297,349) Charges to Appropriation (Outflow): General government 7,200 7,200 904 6,296 Community development 305,000 305,000 23,039 281,961 Culture and leisure 144,800 144,800 119,244 25,556 Transfers out - - 16,464 (16,464) Total Charges to Appropriations 457,000 457,000 159,651 297,349 Budgetary Fund Balance,June 30 $ - $ $ - $ - 87 CITY OF CHINO HILLS BUDGETARY COMPARISON SCHEDULE MEASURE I YEAR ENDED JUNE 30,2011 _ Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) Budgetary Fund Balance,July 1 $1,643,862 $ 1,643,862 $ 1,643,862 $ - Resources(Inflows): Intergovernmental 1,950,600 2,030,400 2,068,210 37,810 Use of money and property - - 14,023 14,023 Amounts Available for Appropriation 3,594,462 3,674,262 3,726,095 51,833 Charges to Appropriation(Outflow): Public works 3,400 3,400 3400 - Transfers out 3,192,900 3,280,900 1,775,695 1,505,205 Total Charges to Appropriations 3,196,300 3,284,300 1,779,095 1,505,205 Budgetary Fund Balance,June 30 $ 398,162 $ 389,962 $ 1,947,000 $ 1,557,038 88 CITY OF CHINO HILLS BUDGETARY COMPARISON SCHEDULE SOLID WASTE YEAR ENDED JUNE 30,2011 , Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) Budgetary Fund Balance,July 1 $ - $ - $ - $ - Resources (Inflows): Charges for services 4,188500 4,188,500 4,190,339 1,839 Amounts Available for Appropriation 4,188,500 4,188,500 4,190,339 1,839 Charges to Appropriation(Outflow): Public works 4,188,500 4,188,500 4,190,339 (1,839) Total Charges to Appropriations 4,188,500 4,188,500 4,190,339 (1,839) Budgetary Fund Balance,June 30 $ - $ $ - $ 89 CITY OF CHINO HILLS BUDGETARY COMPARISON SCHEDULE STREET SWEEPING YEAR ENDED JUNE 30,2011 , Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) Budgetary Fund Balance,July 1 $ 728,646 $ 728,646 $ 728,646 $ - Resources(Inflows): Special assessments 196,200 196,200 199,050 2,850 Use of money and property 6,400 6,400 4,687 (1,713) Transfers in - - 703 703 Amounts Available for Appropriation 931,246 931,246 933,086 1,840 Charges to Appropriation(Outflow): Public works 284,300 284,300 294,552 (10,252) Total Charges to Appropriations 284,300 284,300 294,552 (10,252) Budgetary Fund Balance,June 30 $ 646,946 $ 646,946 $ 638,534 $ (8,412) 90 CITY OF CHINO HILLS BUDGETARY COMPARISON SCHEDULE FRONTLINE POLICING YEAR ENDED JUNE 30,2011 _ Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) Budgetary Fund Balance,July 1 $ 21,398 $ 21,398 $ 21,398 $ - Resources(Inflows): Intergovernmental 100,000 100,000 100,089 89 Use of money and property - - 69 69 Amounts Available for Appropriation 121,398 121,398 121,556 158 Charges to Appropriation (Outflow): Public safety 100,400 100,400 110,232 (9,832) Total Charges to Appropriations 100,400 100,400 110,232 (9,832) Budgetary Fund Balance,June 30 $ 20,998 $ 20,998 $ 11,324 $ (9,674) 91 CITY OF CHINO HILLS BUDGETARY COMPARISON SCHEDULE MISCELLANEOUS GRANTS YEAR ENDED JUNE 30,2011 , Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) Budgetary Fund Balance,July 1 $ (341,663) $ (341,663) $ (341,663) $ - Resources(Inflows): Intergovernmental 14,013,600 14,323,500 318,796 (14,004,704) Fines and forfeitures - - 1,342 1,342 Amounts Available for Appropriation 13,671,937 13,981,837 (21,525) (14,003,362) Charges to Appropriation (Outflow): Transfers out 14,013,600 14,103,200 597,013 13,506,187 Total Charges to Appropriations 14,013,600 14,103,200 597,013 13,506,187 Budgetary Fund Balance,June 30 $ (341,663) $ (121,363) $ (618,538) $ (497,175) 92 CITY OF CHINO HILLS BUDGETARY COMPARISON SCHEDULE AFFORDABLE HOUSING PROGRAM YEAR ENDED JUNE 30,2011 Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) Budgetary Fund Balance,July 1 $ 107,290 $ 107,290 $ 107,290 $ - Resources(Inflows): Developer fees 15,000 15,000 60,989 45,989 Use of money and property - - 1,146 1,146 Amounts Available for Appropriation 122,290 122,290 169,425 47,135 Charges to Appropriation (Outflow): Community development 15,000 15,000 - 15,000 Total Charges to Appropriations 15,000 15,000 - 15,000 Budgetary Fund Balance,June 30 $ 107,290 $ 107,290 $ 169,425 $ 62,135_ 93 CITY OF CHINO HILLS BUDGETARY COMPARISON SCHEDULE PROP 1B YEAR ENDED JUNE 30,2011 _ , Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) Budgetary Fund Balance,July 1 $ 698,618 $ 698,618 $ 698,618 $ - Resources(Inflows): Intergovernmental 694,500 694,500 - (694,500) Use of money and property - - 883 883 Amounts Available for Appropriation 1,393,118 1,393,118 699,501 (693,617) Charges to Appropriation(Outflow): Transfers out 694,500 699,400 699,501 (101) Total Charges to Appropriations 694,500 699,400 699,501 (101) Budgetary Fund Balance,June 30 $ 698,618 $ 693,718 $ - $ (693,718) 94 CITY OF CHINO HILLS BUDGETARY COMPARISON SCHEDULE TRAFFIC CONGESTION RELIEF YEAR ENDED JUNE 30,2011 _ Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) Budgetary Fund Balance,July 1 $ 879,694 $ 879,694 $ 879,694 $ - Resources (Inflows): Use of money and property - - 3,353 3,353 Amounts Available for Appropriation 879,694 879,694 883,047 3,353 Charges to Appropriation(Outflow): Transfers out 356,100 883,100 883,047 53 Total Charges to Appropriations 356,100 883,100 883,047 53 1 Budgetary Fund Balance,June 30 $ 523,594 $ (3,406) $ - $ 3,406 95 CITY OF CHINO HILLS BUDGETARY COMPARISON SCHEDULE LOCAL GOVERNMENT ENERGY EFFICIENCY CDBG YEAR ENDED JUNE 30,2011 , Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) Budgetary Fund Balance,July 1 $ - $ - $ - $ - Resources(Inflows): Intergovernmental 27,000 27,000 75,057 48,057 Amounts Available for Appropriation 27,000 27,000 75,057 48,057 Charges to Appropriation(Outflow): Community development 27,000 92,700 74,773 17,927 Capital outlay 439,000 N 439,000 284 438,716 Total Charges to Appropriations 466,000 531,700 75,057 456,643 Budgetary Fund Balance,June 30 $ (439,000) $ (504,700) $ - $ 504,700 96 CITY OF CHINO HILLS BUDGETARY COMPARISON SCHEDULE SEWER FACILITIES FEE YEAR ENDED JUNE 30,2011 , Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) Budgetary Fund Balance,July 1,as restated $5,101,126 $ 5,101,126 $5,101,126 $ - Resources(Inflows): Use of money and property 39,800 39,800 41,268 1,468 Miscellaneous 64,300 64,300 30,289 (34,011) Amounts Available for Appropriation 5,205,226 5,205,226 5,172,683 (32,543) Charges to Appropriation(Outflow): Public works 2,100 2,100 1,477,740 (1,475,640) Transfers out 210,000 210,000 - 210,000 Total Charges to Appropriations 212,100 212,100 1,477,740 (1,265,640) Budgetary Fund Balance,June 30 $4,993,126 $ 4,993,126 $3,694,943 $ (1,298,183) 97 CITY OF CHINO HILLS BUDGETARY COMPARISON SCHEDULE CAPITAL IMPROVEMENT YEAR ENDED JUNE 30,2011 _ Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) Budgetary Fund Balance,July 1 $ - $ - $ - $ - Resources (Inflows): Contributions from property owners 489,400 489,400 - (489,400) Transfers in 35,425,900 35,824,500 9,223,084 (26,601,416) Amounts Available for Appropriation 35,915,300 36,313,900 9,223,084 (27,090,816) Charges to Appropriation (Outflow): Public works - - 6,665,258 (6,665,258) Capital outlay 35,915,300 36,313,900 2,557,826 33,756,074 Total Charges to Appropriations 35,915,300 36,313,900 9,223,084 27,090,816 Budgetary Fund Balance,June 30 $ - $ _ $ - $ 98 CITY OF CHINO HILLS BUDGETARY COMPARISON SCHEDULE CFD#9 RINCON VILLAGE YEAR ENDED JUNE 30,2011 , Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) Budgetary Fund Balance,July 1 $ 11,131 $ 11,131 $ 11,131 $ - Resources(Inflows): Contributions from property owners 680,700 680,700 715,660 34,960 1 Use of money and property 800 800 1,086 286 Amounts Available for Appropriation 692,631 692,631 727,877 35,246 Charges to Appropriation(Outflow): Public works 681,500 681,500 721,547 (40,047) Total Charges to Appropriations 681,500 681,500 721,547 (40,047) Budgetary Fund Balance,June 30 $ 11,131 $ 11,131 $ 6,330 $ (4,801) • 99 CITY OF CHINO HILLS BUDGETARY COMPARISON SCHEDULE CFD#10 FAIRFIELD RANCH YEAR ENDED JUNE 30,2011 Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) Budgetary Fund Balance,July 1 $ 395,584 $ 395,584 $ 395,584 $ - Resources (Inflows): Special assessments - - 7,542 7,542 Use of money and property 3,700 3,700 5 (3,695) Amounts Available for Appropriation 399,284 399,284 403,131 3,847 Charges to Appropriation(Outflow): Capital outlay 296,300 285,600 - 285,600 Total Charges to Appropriations 296,300 285,600 - 285,600 Budgetary Fund Balance,June 30 $ 102,984 $ 113,684 $ 403,131 $ 289,447 100 CITY OF CHINO HILLS BUDGETARY COMPARISON SCHEDULE NEW COMMUNITY CENTER YEAR ENDED JUNE 30,2011 Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) Budgetary Fund Balance,July 1 $3,912,214 $ 3,912,214 $3,912,214 $ - Resources(Inflows): Use of money and property - - 27,632 27,632 Amounts Available for Appropriation 3,912,214 3,912,214 3,939,846 27,632 Charges to Appropriation(Outflow): Capital outlay 3,826,900 3,812,700 - 3,812,700 Total Charges to Appropriations 3,826,900 3,812,700 - 3,812,700 Budgetary Fund Balance,June 30 $ 85,314 $ 99,514 $3,939,846 $ 3,840,332 101 CITY OF CHINO HILLS COMBINING STATEMENT OF NET ASSETS INTERNAL SERVICE FUNDS JUNE 30,2011 Governmental Activities-Internal Service Funds Equipment Information Maintenance Technology Totals Assets: Current: Cash and investments $ 2,918,736 $ 230,554 $ 3,149,290 Receivables: Accounts - 21,992 21,992 Accrued interest 4,955 485 5,440 Due from other agencies - 3,386 3,386 Total Current Assets 2,923,691 256,417 3,180,108 Noncurrent: Capital assets-net of accumulated depredation 1,805,854 309,176 2,115,030 Total Noncurrent Assets 1,805,854 309,176 2,115,030 Total Assets $ 4,729,545 $ 565,593 $ 5,295,138 Liabilities and Net Assets: Liabilities: Current: Accounts payable $ 41,609 $ 19,291 $ 60,900 Accrued liabilities 8,700 16,158 24,858 Compensated absences 500 - 500 Capital leases - 91,437 91,437 Total Current Liabilities 50,809 126,886 177,695 Noncurrent. Compensated absences 17,214 15,576 32,790 Capital leases - 127,894 127,894 Total Noncurrent Liabilities 17,214 143,470 160,684 Total Liabilities 68,023 270,356 338,379 Net Assets: Invested in capital assets, net of related debt 1,805,854 89,845 1,895,699 Unrestricted 2,855,668 205,392 3,061,060 Total Net Assets 4,661,522 295,237 4,956,759 Total Liabilities and Net Assets $ 4,729,545 $ 565,593 $ 5,295,138 102 CITY OF CHINO HILLS COMBINING STATEMENT OF REVENUES,EXPENSES AND CHANGES IN FUND NET ASSETS INTERNAL SERVICE FUNDS YEAR ENDED JUNE 30,2011 Governmental Activities-Internal Service Funds Equipment Information Maintenance Technology Totals Operating Revenues: Charges for services $ 742,311 $ 1,028,335 $ 1,770,646 Other 11,524 - 11,524 Total Operating Revenues 753,835 1,028,335 1,782,170 Operating Expenses: Salaries and benefits 256,006 458,180 714,186 Professional and contractual services 1,302 346,528 347,830 Repair and maintenance 220,655 75,060 295,715 Service and supplies 222,846 18,844 241,690 Administrative and general expenses 78,347 90,889 169,236 Depreciation and amortization 499,798 163,374 663,172 Total Operating Expenses 1,278,954 1,152,875 2,431,829 Operating Income (Loss) (525,119) (124,540) (649,659) Nonoperating Revenues(Expenses): Interest revenue 19,433 2,135 21,568 Interest expense - (10,968) (10,968) Contributions 14,140 - 14,140 Total Nonoperating Revenues(Expenses) 33,573 (8,833) 24,740 Income(Loss)Before Transfers (491,546) (133,373) (624,919) Transfers in 2,944 - 2,944 Transfers out (477,100) (128,500) (605,600) Changes in Net Assets (965,702) (261,873) (1,227,575) Net Assets: Beginning of Year 5,627,224 557,110 6,184,334 End of Fiscal Year $ 4,661,522 $ 295,237 $ 4,956,759 103 CITY OF CHINO HILLS COMBINING STATEMENT OF CASH FLOWS INTERNAL SERVICE FUNDS YEAR ENDED JUNE 30,2011 Governmental Activities-Internal Service Funds Equipment Information Maintenance Technology Totals Cash Flows from Operating Activities: Cash received from customers and users $ 781,101 $ 1,034,259 $ 1,815,360 Cash paid to suppliers for goods and services (467,934) (424,297) (892,231) Cash paid to employees for services (333,846) (548,769) (882,615) Net Cash Provided (Used)by Operating Activities (20,679) 61,193 40,514 Cash Flows from Non-Capital Financing Activities: Cash transfers out (477,100) (128,500) (605,600) Cash transfers in 2,944 - 2,944 Contributions 14,140 - 14,140 Net Cash Provided(Used)by Non-Capital Financing Activities (460,016) (128,500) (588,516) Cash Flows from Capital and Related Financing Activities: Purchases of capital assets (274,812) - (274,812) Principal paid on capital lease - (87,764) (87,764) Interest paid on capital lease - (10,968) (10,968) Net Cash Provided (Used)by Capital and Related Financing Activities (274,812) (98,732) (373,544) Cash Flows from Investing Activities: Interest received 21,620 2,192 23,812 Net Cash Provided(Used)by Investing Activities 21,620 2,192 23,812 Net Increase(Decrease)in Cash and Cash Equivalents (733,887) (163,847) (897,734) Cash and Cash Equivalents at Beginning of Year 3,652,623 394,401 4,047,024 Cash and Cash Equivalents at End of Year $ 2,918,736 $ 230,554 $3,149,290 Reconciliation of Operating Income to Net Cash Provided(Used)by Operating Activities: Operating income(loss) $ (525,119) $ (124,540) $ (649,659) Adjustments to reconcile operating income(loss) net cash provided (used)by operating activities: Depreciation 499,798 163,374 663,172 (Increase)decrease in accounts receivable 27,266 6,119 33,385 (Increase)decrease in due from other agencies - (195) (195) Increase(decrease)in accounts payable (23,131) 16,135 (6,996) Increase(decrease)in accrued liabilities 1,025 2,438 3,463 Increase(decrease)in compensated absences (518) (2,138) (2,656) Total Adjustments 504,440 185,733 690,173 Net Cash Provided(Used)by Operating Activities $ (20,679) $ 61,193 $ 40,514 Non-Cash Investing,Capital,and Financing Activities: There were no non-cash transactions 104 CITY OF CHINO HILLS COMBINING BALANCE SHEET ALL AGENCY FUNDS JUNE 30,2011 CFD#1 CFD#2 Los AD#1980 AD #1994 Rolling Ridge Ranchos Assets: Cash and investments $ 11,111 $ 1,205,532 $ 1,523,036 $ 6,216,103 Receivables: Interest 18 2,024 2,609 10,553 Special assessments 69 - 22,949 25,619 Restricted assets: Cash and investments with fiscal agents - - 721,303 1,676,080 Total Assets $ 11,198 $ 1,207,556 $ 2,269,897 $ 7,928,355 Accounts payable $ - $ - $ 88 $ 175 Deposits payable - - - - Fundsheldforothers 11,198 1,207,556 2,269,809 7,928,180 Due to Inland Empire Utility Agency - - - - Total Liabilities $ 11,198 $ 1,207,556 $ 2,269,897 $ 7,928,355 105 CITY OF CHINO HILLS COMBINING BALANCE SHEET ALL AGENCY FUNDS JUNE 30,2011 (Continued) CFD#6 CFD#4 The CFD#5 Carbon CFD#8 Oaks Rincon Village Canyon Butterfield Assets: Cash and investments $ 11,991,916 $ 1,279,676 $ 1,196,003 $ 2,272,054 Receivables: Interest 20,257 2,552 2,041 3,929 Special assessments 12,129 16,536 3,900 7,118 Restricted assets: Cash and investments with fiscal agents 421,614 1,502,976 203,786 354,500 Total Assets $ 12,445,916 $ 2,801,740 $ 1,405,730 $ 2,637,601 Accounts payable $ 59 $ 176 $ 29 $ 59 Deposits payable - - - - Fundsheldforothers 12,445,857 2,801,564 1,405,701 2,637,542 Due to Inland Empire Utility Agency - - - - Total Liabilities $ 12,445,916 $ 2,801,740 $ 1,405,730 $ 2,637,601 106 CITY OF CHINO HILLS COMBINING BALANCE SHEET ALL AGENCY FUNDS JUNE 30,2011 CFD#10 CFD#9 Fairfield General Rincon Village Ranch Agency Fund RAD 104 Assets: Cash and investments $ 4,289,799 $ 698,162 $ 3,136,285 $ 421,140 Receivables: Interest 7,114 1,059 - 661 Special assessments 11,069 13,474 - 6,234 Restricted assets: Cash and investments with fiscal agents 499,387 981,750 - 360,423 Total Assets $ 4,807,369 $ 1,694,445 $ 3,136,285 $ 788,458 Accounts payable $ 59 $ 29 $ 1,044 $ 117 Deposits payable - - 2,273,833 - Funds held for others 4,807,310 1,694,416 - 788,341 Due to Inland Empire Utility Agency - - 861,408 - Total Liabilities $ 4,807,369 $ 1,694,445 $ 3,136,285 $ 788,458 107 CITY OF CHINO HILLS COMBINING BALANCE SHEET ALL AGENCY FUNDS JUNE 30,2011 Totals Assets: Cash and investments $ 34,240,817 Receivables: Interest 52,817 Special assessments 119,097 Restricted assets: Cash and investments with fiscal agents 6,721,819 Total Assets $ 41,134,550 Accounts payable $ 1,835 Deposits payable 2,273,833 Funds held for others 37,997,474 Due to Inland Empire Utility Agency 861,408 Total Liabilities $ 41,134,550 108 CITY OF CHINO HILLS COMBINING STATEMENT OF CHANGES IN ASSETS AND LIABILITIES ALL AGENCY FUNDS YEAR ENDED JUNE 30,2011 Balance Balance 7/1/2010 Additions Deductions 6130/2011 AD#1980 Assets: Pooled cash and investments $ 131,231 $ 9,392 $ 129,512 $ 11,111 Receivables: Accrued interest 258 18 258 18 Deferred loans 841 69 841 69 Total Assets $ 132,330 $ 9,479 $ 130,611 $ 11,198 Liabilities: Accounts payable $ 213 $ 3,161 $ 3,374 $ - Funds held for others 132,117 9,479 130,398 11,198 Total Liabilities $ 132,330 $ 12,640 $ 133,772 $ 11,198 AD #1994 Assets: Pooled cash and investments $ 1,196,682 $ 13,929 $ 5,079 $ 1,205,532 Receivables: Accrued interest 2,396 2,024 2,396 2,024 Total Assets $ 1,199,078 $ 15,953 $ 7,475 $ 1,207,556 Liabilities: Funds held for others 1,199,078 15,953 7,475 1,207,556 Total Liabilities $ 1,199,078 $ 15,953 $ 7,475 $ 1,207,556 AD#1995 Assets: Pooled cash and investments $ 1,500,726 $ 29,152 $ 1,529,878 $ - Receivables: Accrued interest 3,228 - 3,228 - Deferred loans 9,194 - 9,194 - Restricted assets: Cash and investments with fiscal agents 2,863,378 1,430,004 4,293,382 Total Assets $ 4,376,526 $ 1,459,156_ $ 5,835,682 $ - Liabilities: Accounts payable $ 1,171 $ 3,185 $ 4,356 $ - Funds held for others 4,375,355 687,789 5,063,144 - Total Liabilities $ 4,376,526 $ 690,974 $ 5,067,500 $ - CFD#1 Rollina Ridae Assets: Pooled cash and investments $ 1,367,272 $ 1,672,226 $ 1,516,462 $ 1,523,036 Receivables: Accrued interest 2,505 2,609 2,505 2,609 Deferred loans 15,317 22,949 15,317 22,949 Restricted assets: Cash and investments with fiscal agents 721,303 1,293,709 1,293,709 721,303 Total Assets $ 2,106,397 $ 2,991,493 $ 2,827,993 $ 2,269,897 Liabilities: Accounts payable $ - $ 12,386 $ 12,298 $ 88 Funds held for others 2,106,397 1,697,791 1,534,379 2,269,809 109 CITY OF CHINO HILLS COMBINING STATEMENT OF CHANGES IN ASSETS AND LIABILITIES ALL AGENCY FUNDS YEAR ENDED JUNE 30,2011 1Continuedii Balance Balance 7/1/2010 Additions Deductions 6/30/2011 Total Liabilities $ 2,106,397 $ 1,710,177 $ 1,546,677 $ 2,269,897 CFD#2 Los Ranchos Assets: Pooled cash and investments $ 5,934,712 $ 2,643,685 $ 2,362,294 $ 6,216,103 Receivables: Accrued interest 11,552 10,553 11,552 10,553 Deferred loans 30,727 25,619 30,727 25,619 Restricted assets: Cash and investments with fiscal agents 1,676,080 2,015,954 2,015,954 1,676,080 Total Assets $ 7,653,071 $ 4,695,811 $ 4,420,527 $ 7,928,355 Liabilities: Accounts payable $ - $ 17,955 $ 17,780 $ 175 Funds held for others 7,653,071 2,679,874 2,404,765 7,928,180 Total Liabilities $ 7,653,071 $ 2,697,829 $ 2,422,545 $ 7,928,355 CFD#4 The Oaks Assets: Pooled cash and investments $ 11,827,902 $ 1,198,223 $ 1,034,209 $ 11,991,916 Receivables: Accrued interest 23,682 20,257 23,682 20,257 Deferred loans 9,906 12,129 9,906 12,129 Restricted assets: Cash and investments with fiscal agents 421,614 791,461 791,461 421,614 Total Assets $ 12,283,104 $ 2,022,070 $ 1,859,258 $ 12,445,916 • Liabilities: Accounts payable $ - $ 10,344 $ 10,285 $ 59 Funds held for others 12,283,104 1,230,613 1,067,860 12,445,857 Total Liabilities $ 12,283,104 $ 1,240,957 $ 1,078,145 $ 12,445,916 CFD#5 Rincon Village Assets: Pooled cash and investments $ 857,371 $ 2,241,654 $ 1,819,349 $ 1,279,676 Receivables: Accrued interest 1,487 2,552 1,487 2,552 Deferred loans 25,350 16,536 25,350 16,536 Restricted assets: Cash and investments with fiscal agents 1,502,976 1,295,691 1,295,691 1,502,976 Total Assets $ 2,387,184 $ 3,556,433 $ 3,141,877 $ 2,801,740 Liabilities: Accounts payable $ - $ 17,385 $ 17,209 $ 176 Funds held for others 2,387,184 2,828,073 2,413,693 2,801,564 Total Liabilities $ 2,387,184 $ 2,845,458 $ 2,430,902 $ 2,801,740 110 CITY OF CHINO HILLS COMBINING STATEMENT OF CHANGES IN ASSETS AND LIABILITIES ALL AGENCY FUNDS YEAR ENDED JUNE 30,2011 Balance Balance 7/1/2010 Additions Deductions 6/30/2011 CFD#6 Carbon Canyon Assets: Pooled cash and investments $ 1,156,806 $ 266,462 $ 227,265 $ 1,196,003 Receivables: Accrued interest 2,281 2,041 2,281 2,041 Deferred loans 3,735 3,900 3,735 3,900 Restricted assets: Cash and investments with fiscal agents 203,786 175,805 175,805 203,786 Total Assets $ 1,366,608 $ 448,208 $ 409,086 $ 1,405,730 Liabilities: Accounts payable $ - $ 4,687 $ 4,658 $ 29 Funds held for others 1,366,608 272,405 233,312 1,405,701 Total Liabilities $ 1,366,608 $ 277,092 $ 237,970 $ 1,405,730 CFD#8 Butterfield Assets: Pooled cash and investments $ 2,153,398 $ 670,167 $ 551,511 $ 2,272,054 Receivables: Accrued interest 4,274 3,929 4,274 3,929 Deferred loans 7,471 7,118 7,471 7,118 Restricted assets: Cash and investments with fiscal agents 354,500 396,816 396,816 354,500 Total Assets $ 2,519,643 $ 1,078,030 $ 960,072 $ 2,637,601 Liabilities: Accounts payable $ - $ 10,244 $ 10,185 $ 59 Funds held for others 2,519,643 845,972 728,073 2,637,542 Total Liabilities $ 2,519,643 $ 856,216 $ 738,258 $ 2,637,601 CFD#9 Rincon Village Assets: Pooled cash and investments $ 3,698,369 $ 802,074 $ 210,644 $ 4,289,799 1 Receivables: 1 Accrued interest 7,274 7,114 7,274 7,114 Deferred loans 11,873 11,069 11,873 11,069 1 Restricted assets: Cash and investments with fiscal agents 715,671 142,957 359,241 499,387 Total Assets $ 4,433,187 $ 963,214 $ 589,032 $ 4,807,369 Liabilities: Accounts payable $ - $ 10,354 $ 10,295 $ 59 Funds held for others 4,433,187 5,649,692 5,275,569 4,807,310 Total Liabilities $ 4,433,187 $ 5,660,046 $ 5,285,864 $ 4,807,369 111 CITY OF CHINO HILLS COMBINING STATEMENT OF CHANGES IN ASSETS AND LIABILITIES ALL AGENCY FUNDS YEAR ENDED JUNE 30,2011 (Continued) Balance Balance 7/1/2010 Additions Deductions 6/30/2011 CFD#10 Fairfield Ranch Assets: Pooled cash and investments $ 1,075,559 $ 979,139 $ 1,356,536 $ 698,162 Receivables: Accrued interest 1,840 1,059 1,840 1,059 Deferred loans 21,117 13,474 21,117 13,474 Restricted assets: Cash and investments with fiscal agents 1,219,230 1509,325 1546,805 981,750 Total Assets $ 2,317,746 $ 2,302,997 $ 2,926,298 $ 1,694,445 Liabilities: Accounts payable $ 1,209 $ 4,701 $ 5,881 $ 29 Funds held for others 2,316,537 14,403,165 15,025,286 1,694,416 Total Liabilities $ 2,317,746 $ 14,407,866 $ 15,031,167 $ 1,694,445_ General Aaencv Fund Assets: Pooled cash and investments $ 3,801,728 $ 1,032,077 $ 1,697,520 $ 3,136,285 Total Assets $ 3,801,728 $ 1,032,077_ $ 1,697,520 $ 3,136,285_ Liabilities: Accounts payable $ 546,943 $ 700,242 $ 1,246,141 $ 1,044 Deposits payable 2,573,004 808,747 1,107,918 2,273,833 Funds held for others 40,000 - 40,000 - Due to Inland Empire Utility Agency 641,781 230,208 10,581 861,408 Total Liabilities $ 3,801,728 $ 1,739,197 $ 2,404,640 § 3,136,285 RAD 10-1 Assets: Pooled cash and investments $ - $ 538,913 $ 117,773 $ 421,140 Receivables: Accrued interest - 661 - 661 Deferred loans - 6,234 - 6,234 Restricted assets: Cash and investments with fiscal agents - 3,734,364 3,373,941 360,423 Total Assets $ - $ 4,280,172 $ 3,491,714 $ 788,458 Liabilities: Accounts payable $ - $ 6,369 $ 6,252 $ 117 Funds held for others - 8,853,900 8,065,559 788,341 Total Liabilities $ - $ 8,860,269 $ 8,071,811 $ 788,458 112 CITY OF CHINO HILLS COMBINING STATEMENT OF CHANGES IN ASSETS AND LIABILITIES ALL AGENCY FUNDS YEAR ENDED JUNE 30,2011 Balance Balance 7/1/2010 Additions Deductions 6/30/2011 Totals -All Aaencv Funds Assets: Pooled cash and investments $ 34,701,756 $12,097,093 $12,558,032 $ 34,240,817 Receivables: Accrued interest 60,777 52,817 60,777 52,817 Deferred loans 135,531 119,097 135,531 119,097 Restricted assets: Cash and investments with fiscal agents 9,678,538 12,586,086 15,542,805 6,721,819 Total Assets $ 44,576,602 $24,855,093 $28,297,145 $ 41,134,550 Liabilities: Accounts payable $ 549,536 801,013 1,348,714 $ 1,835 Deposits payable 2,573,004 808,747 1,107,918 2,273,833 Funds held for others 40,812,281 39,174,706 41,989,513 37,997,474 Due to Inland Empire Utility Agency 641,781 230,208 10,581 861,408 Total Liabilities $ 44,576,602 $41,014,674 $44,456,726 $ 41,134,550 113 1 i • J • mary 8 - $ m 4 1 k ,, y_ �, k *,y . a Air te' b < {Na 11:1'$ }. CSR a r- + 11/4)r7.-, ILCrt , LINANS _.,, s ' cO�g��s.,, Tp{Is aC�s1P1�s�CtnrINI-t ' E ��t R%VC 114 1 STATISTICAL SECTION . I E r Y Y. t t,'..s i %iv, ,..4 _ .A1. ."• tea;: CITY OF CHINO HILLS INCORPORATED 1991 , I I i 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 Retie Financial Trends -These schedules contain trend information to help the reader understand how the City's financial performance and well-being have changed overtime. 116 1 Net Assets by Component 117 2 Changes in Net Assets 118 3 Fund Balances of Governmental Funds 121 4 Changes in Fund Balances of Governmental Funds 122 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. 125 5 Water Revenue-Charges for Services 126 6 Assessed Value and Estimated Actual Value of Taxable Property 127 7 Direct and Overlapping Property Tax Rates 128 8 Principal Property Tax Payers 129 9 Property Tax Levies and Collections 130 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. 131 10 Ratios of Outstanding Debt by Type 132 11 Direct and Overlapping Governmental Activities Debt 133 12 Legal Debt Margin Information 134 13 Pledged-Revenue Coverage 135 Demoaraohic 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. 137 14 Demographic and Economic Statistics 138 15 Principal Employers 139 Oneratina information -These schedules contain information about the City's operations and resources to help the reader understand how the City's financial information relates to the services the City provides and the activities it performs. 141 16 Full-Time-Equivalent City Govemment Employees by Function/Program 142 17 Operating Indicators by Function/Program 143 18 Capital Assets Statistics by Function/Program 144 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. 115 iai Trends Financ C) Schedule 1 City of Chino Hills Net Assets By Component Last Nine Fiscal Years (accrual basis of accounting) Fiscal Year 2003 2004 2005 2006 2007 2008 2009 2010 2011 Government activities Invested in capital assets,net of related debt $ 158,522,217 $ 170,214,503 $ 177,027,176 $ 196,572,923 $244,840,301 $276,239,662 $281,960,122 $269,350,904 $260,831,157 Restricted 24,454,187 24,793,566 25,313,102 26,951,415 71,509,169 32,100,028 25,515,988 29238,969 33,934701 Unrestricted 22,455.591 26,761,061 29,505,254 27,534,630 24,688.669 45,419,424 25,998,601 22,734,986 21.871,384 Total governmental activities net assets $205,431,995 $ 221,769,130 $231,845,532 $251,058,968 $341,038,139 $353,759,114 $333,474,711 $321,324,859 $316,637,242 Business-type activities Invested in capital assets,net of related debt $ 80,051,419 $ 87,951,967 $ 90,729,037 $ 101,715,882 $ 104,474,205 $ 111,270,111 $ 115,321,588 $112,236,094 $112,137,003 Restricted 5,539,052 1,180,447 914,901 901,348 902,855 895,629 891,908 891,788 891,788 Unrestricted 54,809,237 55,154,461 59,667,148 54,864,729 61,284,270 76,600,187 75,891,932 77,050,459 61,421.913 Total business-type activities net assets $ 140,399,708 $ 144,286,875 $ 151,311,086 $ 157,481,959 $ 166,661,330 $ 188,765,927 $ 192,105,428 $190,178,341 $174,450,704 Primary government Invested in capital assets,net of related debt $ 238,573,636 $258,166,470 $267,756,213 $298,288,805 $349,314,506 $387,509,773 $397,281,710 $381,586,998 $372,968,160 J Restricted 29,993,239 25,974,013 26,228,003 27,852,763 72,412,024 32,995,657 26,407,896 30,130,757 34,826489 Unrestricted 77,264,828 81,915,522 89,172402 82,399,359 85.972,939 122,019.611 101,890,533 99,785,445 83,293,297 Total primary government activities net assets $ 345,831,703 $366,056,005 $383,156,618 $408,540,927 $ 507,699,469 $542,525,041 $ 525,580,139 $511,503,200 $491,087,946 Schedule 2 City of Chino Hills - Changes in Net Assets Last Nine Fiscal Years (accrual basis of accounting) Fiscal Year 2003 2004 2005 2006 2007 2008 2009 2010 2011 Expenses Governmental Activities: General government $ 4,791,760 $ 5,791,059 $ 4,706,563 $ 5,271,426 $ 6,030,186 $ 7,361,372 $ 10,579,750 $ 9,614,408 $ 8,966,318 Public safety 4,685,540 5,267,519 6,316,390 7,709,721 9,066,406 10,182,888 11,555,310 11,676,798 11,455,829 Public works 24,190,015 24,644,445 16,338,394 23,693,162 31,061,116 29,007,194 34,757,045 28,555,064 40,156,027 Community development 13,540,354 2,676,842 3,557,317 3,077,001 4,233,528 2,818,026 10,683,874 4,211,927 5,057,949 Culture and leisure 2,517,511 3,018,462 2,961,591 3,191,791 3,714,175 4,347,447 4,812,362 4,796,904 4,651,993 Interest on long-term debt 606,644 380,809 495,042 994,463 1.567,850 2,264,125 1,928581 1,329.331 1,272,852 Total Governmental Activities expenses 54331,824 41,779,136 34,375,297 43.937,564 55,673261 55,981,052 74,316,922 60,184.432 71,560,968 Business-Type Activities: Water utility 13,988,695 14,540,120 15,078,649 14,369,015 16,050,154 17,942,005 20,469,370 23,239,765 20,834,162 Sewer utility 3,984,971 4,013,704 4,288,240 4,285,136 4,564235 4,968,864 5,797,290 5,867,079 6,209,880 Total Business-Type Activities Expenses 17.973,666 18,553,824 19,366,889 18,654,151 20,614,389 22,910,869 26,266,660 29,106,844 27,044,042 —` Total Primary Government Expenses $ 68,305,490 $60,332,960 $53,742,186 $62,591,715 $ 76m287,650 $78,891,921 $100,583,582 $ 89291,276 $ 98.605,010 _s CO Program Revenues Governmental Activities: Charges for services: General government $ 5,002,488 $ 5,111,368 $ 5,248,069 $ 5,096,254 $ 5,613,725 $ 5,776,175 $ 5.881,060 $ 5.962,565 $ 4,487,857 Public safety 587,025 603,561 605,589 1,180,499 947,446 672,677 631,906 637,055 600,952 Public works 3,069,353 3,396,199 3,882,515 4,746,512 4,718,496 4,892,044 4,836,932 4,876,544 6,824,803 Community development 1,762,324 1,498,104 1,354,772 2,070,238 1,946,325 2,058,372 1,071,103 704,708 778,031 Culture and leisure 1,011,135 1,035,082 990,265 975,332 1,071,833 1,125,427 1,204,544 1,079,171 1,191,777 Operating Contributions and Grants 2,417,924 2,121,376 2,715,236 5,599,718 1,656,858 5,607,412 6,508,561 6,599,618 4,706,518 Capital Contributions and Grants 18,210,072 11.418,393 11,145,328 23,623,731 83,790,316 26,719,831 9,217,276 10,147,915 9252,562 Total Governmental Activities Program Revenues 32,060,321 25,184.083 25,941,774 43,292,284 99,744,999 46,851,938 29,351,382 30.007576 27,842,500 Business-Type Activities: Charges for services: Water utility 13,060,808 14,672,595 14,314,657 16,341,865 17,568,215 18,170,451 18,865,858 18,155,780 18,068,634 Sewer utility 4,114,787 4,250,684 4,278,320 4,404,840 4,688,511 4,838,131 5,311,713 5,483,049 5,490,532 Capital Contributions and Grants - - - 2,803,533 5,122,942 11.031.613 5,609,994 267,792 - Total Business-Type Activities Program Revenues 17,175,595 18,923,279 18,592,977 23,550,238 27,379,668 34,040,195 29,787,565 23.906,621 23,559,166 Total Primary Government Program Revenues $49,235,916 $44,107,362 $44,534,751 $66,842,522 $127,124,667 $80,892,133 $ 59,138,947 $ 53,914,197 $ 51,401,666 Fiscal Year 2003 2004 2005 2006 2007 2008 2009 2010 2011 Net(Expense)/Revenue Governmental Activities $(18,271,503) (16,595,053) (8,433523) (645,280) $ 44,071,738 $(9,129,114) $ (44,965,540) $(30,176,856) $(43,718,468) Business-Type Activities (798,071) 369,455 (773,912) 4.896,087 6,765,279 11,129,326 3,520,905 (5,200,223) (3,484576) Total primary Government Net Expense $(19,069,574)` 16,225598) ..x,207,435)_ 4,250,807 $ 50,837,017 $ 2,000,212 .,$ (41,444,635) $(35,377,079 $47,203,344) General Revenues and Other Charges in Net Assets Governmental Activities: Taxes: Property taxes,levied for general purpose $ 2,139,115 $ 2,391,352 $ 6,704,552 $ 7,696,773 $ 9,059,550 $ 9,854,421 $ 10,314,989 $ 10,026,487 $ 10,192,744 Sales taxes 3,300,701 3,890,159 4,574,678 4,991,352 5,396,890 5,458,545 5,984,767 5,907,670 6,422,617 Franchise taxes 1,494,117 1,683,595 1,753,414 2,047,801 2,174,127 2,133,061 2,447,581 2,410,856 2,039,246 Business licenses taxes 117,410 132,450 137,873 144,613 151,017 162,807 152,442 143,578 145,728 Other taxes 396,549 497,029 565,394 501,058 798,867 716,103 568,019 776,629 779,935 Intergovernmental,unrestricted: Motor Vehicle In Lieu-unrestricted 4,056,601 3,335,980 1,692,165 536,507 421,191 348,740 268,308 231,590 361,339 Use of money and property 1,695,715 1,088,166 2,305,598 3,528,476 6,722,699 6,929,444 2753,401 1,598,863 1,454,225 Gain(loss)on sale of capital assets - - - - 15,421 (4,172,567) - - 5545 Other revenues and transfers 1,135,604 225,130 679,008 412,136 411,950 419,535 2,191,630 936,547 1,064,712 Total Governmental Activities 14,335,812 13,243,861 18,412,682 19,858,716 25.151.712 21,850,089 24581,137 22,032220 22,466,191 Business-Type Activities: -• Use of money and property 920,415 406,944 842,926 1,653,347 2,598,146 2,636,760 1,510,927 929,857 372,899 CO Gain on investment in joint venture - - 529,868 - - - - - - Gain on sale of assets 475,065 - - 11,747 7,010 - - - - Loss in investment in joint venture (261,929) - - (390,308) - - - _ _ Other revenues and transfers 6,690,095 5,850,206 1,789,448 - 47 - (1,692,331) 2,343,279 3,949,000 Contributions - - 4,160,594 - .. . - _Total Business-Type Activities 7.823,646 6,257,150 7,322,836 1,274,786 2,605,203 2,636,760 (181,404) 3,273,136 4.321.899 Total Primary Government 22159,458 19,501,011 25,735,518 21,133,502 27,756,915 24,486,849 24,499,733 25,305,356 26,788,090 Changes in Net Assets Governmental Activities (3,935,691) (3,351,192) 9,979,159 19,213,436 69,223,450 12,720,975 (20,284,403) (8,144,636) (21,252,277) Business-Type Activities 7,025,575 6526,605 6,548,924 6,170,873 9,370,482 13,766,086 3,339,501 (1,927,087) 837,023 Total Primary Government $ 3.089,884 $ 3,275,413 $16528583 $25,384,309 $ 78593,932 $26,487,061.., $ (16.944,902) 3,10,071,723) $(20,415,254) • yik y. a 1� y wiet—e44,2,e r, .!''ti Ate~# 41 ' T FC^n'1Y3.'@ ' sa i h�-.. CITY F CHIN® HILLS INCORPORATED 1 9 9 1 THIS PAGE INTENTIONALLY LEFT BLANK 120 Schedule 3 City of Chino Hills Fund Balances of Governmental Funds Last Nine Fiscal Years (modified accrual basis of accounting) Fiscal Year 2003 2004 2005 2006 2007 2006 2009 2010 2011 General Fund _ Reserved $ 1,346,436 $ 981,699 $ 656,814 $ 571,579 $ 825,811 $ 764,706 $ 6,349,837 $17,831,272 $ - Unreserved 13,026,938 13,257,304 17,142,984 14,600,992 40,400,164 40,886,532 14,803,786 2,345,226 - Restricted 4,998,291 Committed 16,050,340 Assigned 843,616 Total General Fund $14,373,374 $14,239,003 $17,799,798 $15,172,571 $41,225,975 $41,651,238 $21,153,623 $20,176,498 $21,892,247 All other governmental funds N Reserved $ 8,137,347 $ 7,392,443 $11,298,311 $18,954,928 $70,162,019 $30,945,202 $ 9,248,464 $15,727,160 $ - -� Unreserved, reported in: Special Revenue Funds 21,033,489 25,952,716 22,171,639 23,735,877 16,470,009 15,685,432 16,629,699 13,297,242 - Capital Project Fund 2,746,725 249,984 (229,614) (6,848,976) (15,861,558) (15,420,655) (1,245,728) (926,552) - Nonspendable 10,219,315 Restricted 23,774,442 Unassigned (3,811,871) Total all other governmental funds $31,917,561 $33,595,143 $33,240,336 $35,841,829 $70,770,470 $31,209,979 $24,632,435 $28,097,850 $30,181,886 Schedule 4 City of Chino Hills Changes in Fund Balances of Governmental Funds Last Nine Fiscal Years (modified accrual basis of accounting) Fiscal Year 2003 2004 2005 2006 2007 2008 2009 2010 2011 Revenues: Taxes $11,263,343 $11,657,289 $14,723,571 $15,028,374 $16,974,524 $ 17,908,191 $ 18,751,902 $18,888,204 $ 19,487,208 Special Assessments 5,332,321 5,356,117 5,876,774 5,371,287 5,468,821 5,460,976 5,542,087 5,633,526 5,583,774 Licenses and permits 2,035,885 1,733,174 1,370,704 2,440,976 2,136,301 2,058,372 1,071,103 704,708 775,396 Intergovernmental 3,672,868 3,180,817 3,106,971 6,043,995 5,799,254 5,708,213 5,180,627 9,200,512 5,139,364 Charges for services 9,369,932 9,863,549 10,351,236 10,678,498 11,411,177 11,680,879 12,074,131 12,089,281 8,045,333 Development fees 9,958,702 3,783,910 2,710,135 4,115,661 5,085,905 3,625,482 1,128,996 490,784 399,643 Contribution from property owners 996,276 1,189,508 2,010,270 14,175,866 67,104,258 10,119,918 2,484,988 1,090,164 5,323,963 Fines and forfeiture 301,987 354,012 575,160 585,743 567,143 660,764 620,764 626,154 590,108 Contributions 176,417 Use of money and property 1,592,313 1,057,207 2,242,131 3,415,811 6,527,986 6,725,920 2,629,808 1,533,085 1,967,098 N Miscellaneous 1,150,261 601,302 786,143 1,003,344 1,955,234 1,738,161 1,350,624 2,033,235 1,849,580 N Total revenues 45,673,888 38,756,885 43,753,095 62,859,555 123,030,603 65,686,876 50,835,030 52,289,653 49,337,884 Expenditures: Current: General government 4,168,525 5,184,585 4,102,552 4,614,084 5,485,568 6,818,907 7,915,221 7,923,217 7,312,478 Public safety 4,674,473 5,263,470 6,303,899 7,702,276 9,058,797 10,172,046 11,413,644 11,402,849 11,181,880 Public works 21,235,554 17,198,835 14,192,320 16,831,468 16,553,751 20,083,124 18,396,664 17,941,401 21,170,100 Community development 2,359,836 2,672,650 3,587,253 3,539,481 4,308,912 5,999,367 16,772,629 4,356,509 10,966,003 Culture and leisure 1,952,138 2,159,952 2,196,976 2,397,380 2,918,972 3,235,419 3,381,221 3,317,984 3,151,003 Capital outlay 11,379,811 6,710,597 8,524,106 25,179,789 42,155,326 56,654,818 31,655,842 4,949,091 3,164,855 Debt service: Principal retirement 2,753,395 1,459,123 1,755,461 1,876,929 2,292,970 679,693 679,272 482,925 5,035,722 Interest and fiscal charges 606,644 380,809 495,042 994,463 1,494,572 2,257,988 1,635,520 1,314,620 1,260,856 Debt issuance cost - - - - 231,058 - - - - Total expenses 49,130,376 41,030,021 41,157,609 63,135,870 84,499,926 105,901,362 91,850,013 51,688,596 63,242,897 Excess (deficiency)of revenues over(under)expenditures (3,456,488) (2,273,136) 2,595,486 (276,315) 38,530,677 (40,214,486) (41,014,983) 601,057 (13,905,013) Fiscal Year 2003 2004 2005 2006 2007 2008 2009 2010 2011 Other financing sources(uses): Transfers in 12,532,497 6,782,853 5,012,996 13,916,584 16,005,428 11,059,192 22,815,140 7,474,593 10,792,870 Transfers out (12,532,497) (5,967,753) (5,012,996) (13,916,584) (16,010,989) (11,059,192) (21,036,742) (5,895,823) (9,719,760) Long term debt issued - - - - 22,411,164 1,079,258 12,161,426 308,463 61,383 Other debt issued 268,113 3,001,247 513,259 250,581 - - - - - Bond premium - - - - 45,765 - - - - Proceeds from sale of capital asset - - - - - - - - 5,645 Total other financing sources(uses) 268,113 3,816,347 513,259 250,581 22,451,368 1,079,258 13,939,824 1,887,233 1,140,138 Net change in fund balances! net assets $ (3,188,375) $ 1,543,211 $ 3,108,745 $ (25,734) $60,982,045 $(39,135,228) $(27,075,159) $ 2,488,290 $(12,764,875) Debt service as a percentage of noncapital expenditures 8.9% 5.4% 6.9% 7.6% 8.3% 6.3% 3.3% 3.8% 10.5% N CO • �^r • %t kr • w t yn x "‘ t 'I ce?i .fJ •. A. ..�.. I ;M cif k< or CITY OF CHINO HILLS 1 I N CORPORATED 1 9 9 1 THIS PAGE INTENTIONALLY LEFT BLANK 124 125 Schedule 5 City of Chino Hills Water Revenue -Charges for Services Last Ten Fiscal Years Residential Commercial Government Fiscal Service Service Service Other Year Charge Charge Charge Charges Total 2002 9,362,149 1,075,492 1,540,439 396,385 12,374,465 2003 10,139,498 1,134,916 1,657,459 128,935 13,060,808 2004 10,884,969 1,258,241 2,276,134 253,251 14,672,595 2005 10,574,657 1,156,851 2,047,851 535,298 14,314,657 2006 11,175,366 2,522,285 1,016,575 1,250,103 15,964,329 2007 11,908,728 3,194,550 1,163,001 220,258 16,486,537 na 2008 11,757,737 3,236,899 1,171,397 1,619,744 17,785,777 co 2009 11,989,919 3,434,330 1,165,995 314,977 16,905,221 2010 12,721,619 3,312,889 1,380,924 240,358 17,655,790 2011 13,380,074 3,120,412 1,342,925 225,224 18,068,634 Source: City Finance Department. 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 2002 n/a n/a n/a 83,251 4,719,735 1.00 2003 n/a n/a n/a 84,759 5,148,753 1.00 2004 5,221,647 192,198 162,834 89,910 5,666,589 1.00 2005 5,751,757 207,832 174,517 91,308 6,225,414 1.00 2006 6,310,533 230,589 228,009 91,672 6,860,803 1.00 2007 7,083,545 340,267 140,436 92,336 7,656,584 1.00 ND 2008 7,810,970 444,779 212,883 91,761 8,560,393 1.00 J 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 Source: HDL Coren &Cone and San Bernardino County Auditor/Controller-Property Tax Division. Schedule 7 City of Chino Hills Direct and Overlapping Property Tax Rates, Last Ten Fiscal Years (rate per$100 of assessed value) City Direct Rates Overlapping Rates General Metropolitan San Fiscal Tax School Water Bernardino Year Levy District District County 2002 1.0000 - 0.0088 - 2003 1.0000 0.0490 0.0067 - 2004 1.0000 0.0527 0.0061 - 2005 1.0000 0.0452 0.0058 - 2006 1.0000 0.0634 0.0052 - N 2007 1.0000 0.0517 0.0047 - OD 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 - Source: County of San Bernardino Auditor/Controller-Recorder. Schedule 8 City of Chino Hills Principal Property Tax Payers, Current Year and Nine Years Ago 2010/11 2001/02 Percentage Percentage of Total City of Total City Taxable Taxable Taxable Taxable Assessed Assessed Assessed Assessed Taxpayer Value Rank Value Value Rank Value Chino Hills Mall LLC $ 114,730,000 1 1.29% $ - - BRE Properties Inc. 78,567,758 2 0.89% - - Woodview Chino Hills Apartments Limited 78,321,393 3 0.88% - - CRCH LLC 78,302,635 4 0.88% - _ YAH Investments LLC 60,580,056 5 0.68% - - Missions At Chino Hills 57,086,384 6 0.64% - - _a Grand Gateway II LLC 41,763,340 7 0.47% - - N Village Oaks Inc. 35,044,008 8 0.40% - - CO WRI Chino Hills LLC 33,212,044 9 0.37% - - Chino Hills Corporate Park 29,868,571 10 0.34% - - CTF-8 Village Oaks - - 21,388,936 1 0.45% KB Retain Properties Limited Partnership - - 21,321,529 2 0.45% ERP Operating Limited Partnership - - 18,728,913 3 0.40% LBK Limited Partnership - - 14,835,492 4 0.31% LDC Cougar - - 14,090,161 5 0.30% Evans Withycombe Residential Limited Partnership - - 13,186,252 6 0.28% Chino Hills Montage LLC - - 12,750,265 7 0.27% Costco Wholesale Corporation - - 12,722,766 8 0.27% Albertsons'sInc - - 11,968,557 9 0.25% Centex Homes - - 11,782,589 10 0.25% Total $ 607,476,189 6.84% $152,775,460 3.23% Source: HDL Coren&Cone Schedule 9 City of Chino Hills Property Tax Levies and Collections, Last Ten Fiscal Years Fiscal Collected within the Year Taxes Levied Fiscal Year of the Levy Collections Total Collections to Date Ended for the Percentage in Subsequent Percentage June 30, Fiscal Year Amount of Levy Years Amount of Levy 2002 1,866,919 1,783,954 95.6% 72,318 1,856,272 99.4% 2003 2,033,010 1,963,816 96.6% 79,485 2,043,301 100.5% 2004 2,250,501 2,217,021 98.5% 85,370 2,302,391 102.3% 2005 2,462,079 2,312,787 93.9% 82,560 2,395,347 97.3% 2006 2,720,557 2,537,125 93.3% 89,871 2,626,996 96.6% 2007 3,030,270 2,687,944 88.7% 133,985 2,821,929 93.1% 2008 3,390,298 2,980,778 87.9% 223,347 3,204,125 94.5% co 2009 3,571,077 3,194,990 89.5% 206,641 3,401,631 95.3% O 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% - 3,201,176 91.7% Sources: County of San Bernadino Auditor/Controller-Recorder. 9 ca ct U Z. a) 131 Schedule 10 City of Chino Hills Ratios of Outstanding Debt by Type, Last Nine Fiscal Years (dollars in thousands, except per capita) Business-type Governmental Activities Activities Certificates Special Certificates Total Percentage Fiscal of Assessment of Primary of Personal Per Year Participation Bonds Participation Government Income a Capita a 2003 $ - $ 52,923 $ 26,835 $ 79,758 0.09% $ 1,089 2004 - 49,937 26,740 76,677 0.08% 1,001 2005 - 47,000 25,660 72,660 0.07% 935 f CO 2006 - 42,037 24,560 66,597 0.06% 857 ro 2007 22,040 87,678 23,435 133,153 0.11% 1,700 2008 22,040 83,339 22,290 127,669 n/a 1,627 2009 21,955 76,540 21,115 119,610 n/a 1,519 2010 21,865 71,806 19,915 113,586 n/a 1,438 2011 21,445 64,205 18,675 104,325 n/a 1,385 Notes: Details regarding the city's outstanding debt can be found in the notes to the financial statements. a See Demographic and Economic Statistics schedule(schedule 14)for personal income and population data. Schedule 11 City of Chino Hills Direct and Overlapping Governmental Activities Debt As off June 30,2011 Fiscal Year 2010-11 Assessed Valuation:$8,863,342,730 Debt % City's Share of Overlaooina Tax and Assessment Debt Outstanding Applicable(1) Debt 6/30/11 Metropolitan Water District $ 227,670,000 0.497% $ 1,131,520 Chaffey Community College District 150,208,960 16.379% 24,602,726 Chino Valley Unified School District 141,329,999 52.060% 73,576,397 City of Chino Hills 1915 Act Bonds 3,505,000 100.000% 3,505,000 City of Chino Hills-Community Facilities District No. 1 5,335,000 100.000% 5,335,000 City of Chino Hills-Community Facilities District No.2 15,080,000 100.000% 15,080,000 City of Chino Hills-Community Facilities District No.4 3,020,000 100.000% 3,020,000 City of Chino Hills-Community Facilities District No.5 16,735,000 100.000% 16,735,000 City of Chino Hills-Community Facilities District No.6 1,635,000 100.000% 1,635,000 City of Chino Hills-Community Facilities District No.8 1,590,000 100.000% 1,590,000 City of Chino Hills-Community Facilities District No.9 4,915,000 100.000% 4,915,000 City of Chino Hills-Community Facilities District No.10 12,390,000 100.000% 12,390,000 w Total Overlapping Tax and Assessment Debt 163,515,643 W Overlaooina General Fund Obligation Debt San Bernardino County General Fund Obligations 649,325,000 7.779% 50,510,992 San Bernardino County Pension Obligations 601,765,591 7.779% 46,811,345 San Bernardino County Flood Control District 111,555,000 7.779% 8,677,863 Chaffey Community College District General Fund Obligations 12,440,666 16.379% 2,037,657 Chino Valley Unified School District Certificates of Participation 31,515,000 52.060% 16,406,709 West Valley Vector Control District Certificates of Participation 3,450,000 21,228% 732,366 Total Direct and Overlapping General Fund Obligation Debt 125,176,932 Direct General Fund Obligation Debt City of Chino Hills Certificates of Participation 21445,000 100.000% 21,445,000 COMBINED TOTAL DEBT $ 310,137,575 (2) Source:California Municipal Statistics, Inc. Note: (1) Percentage of overlapping agency's assessed valuation located within boundaries of the city. (2) Excludes tax and revenue anticipation notes,enterprise revenue, mortgage revenue and tax allocation bonds and non-bonded capital lease obligations. Schedule 12 Hills $B 663,343 of chino lnformation, Fiscal Year 2011 }32950} Leg Cityof Debt Marginn for Years t Main Calculation Oast Ten fiscalYears ) legal seh dollars in thousands) Assessed value of assessed value) Debt limit( to limit'. ds Debt applicable ener a obligation bon $.4“32} General Mentset aside for debt Ment of general limitobligabon Less:Amount repayMent to Emit Totalldidebt rgP Legal debt margin 2l 2 2� g 1 329 5D'. Fiscal Year 2l 81329,546 4 20� 2j../9.§. — $12 9 468 $1,2g4,059 $1,354,832 _ ...---"'--"- 4, 2� 120 _ 81,329.501 2 2 649,988 8933 812 $ },029, _ $1,354,832 $1,328,548 CO 8707 960 $772,313 $ ""�- 4 81.2g4 p5g 0.00°/° 88 0120 g 0.00 0.00°/0 8849,988 $93� 12— 0.00°(0 Debt LIMA 0 O0% debt applicable to limit $712.313— 8707.960 0.00% Total net 0.00°/0 Legal debt margin the limit 0.00% 0.00°/o 0.00% to Total net debt applicable PPlica lleb111mit as a Percentage of Schedule 13 City of Chino Hills Pledged-Revenue Coverage, Last Nine Fiscal Years (dollars in thousands) Water Certificate of Participation Special Assessment Bonds Utility Less: Net Special Fiscal Service Operating Available Debt Service Assessment Debt Service (2) Year Charges Expenses (1) Revenue Principal Interest Coverage Collections Principal Interest Coverage 2003 $ 14,102 $ 9,182 $ 4,920 $ 790 $ 1,478 2.17 $ 11,999 $ 4,765 $ 3,712 1.42 2004 15,372 9,824 5,548 975 744 3.23 11,837 3,741 3,455 1.64 2005 17,314 10,546 6,768 1,080 1,042 3.19 10,914 2,937 2,750 1.92 w 2006 17,075 9,909 7,166 1,100 1,018 3.38 11,627 4,963 2,647 1.53 cn 2007 20,379 13,087 7,292 1,125 996 3.44 13,826 4,019 3,327 1.88 2008 21,262 14,445 6,817 1,145 974 3.22 11,591 4,339 4,051 1.38 2009 18,531 15,982 2,549 1,175 946 1.20 11,192 6,799 3,846 1.05 2010 20,931 16,207 4,724 1,200 916 2.23 11,801 4,734 3,579 1.42 2011 19,048 15,364 3,684 1,240 880 1.74 11,348 28,411 3,391 0.36 Notes: (1) Operating expenses do not include interest, depreciation, or amortization expenses. (2) Details regarding the city's outstanding debt can be found in the notes to the financial statements. a� '-'1.7--4,.: V4 t M oL • 1 "1 . dt .:45 y 4- "c .+ 4. CITY CHINO HILLS s I N C O R P O R A T E D 1 9 9 1 THIS PAGE INTENTIONALLY LEFT BLANK 136 Demographic nhip and formation I Schedule 14 City of Chino Hills Demographic and Economic Statistics, Last Ten Calendar Years Personal Per Income (2) Capita Calendar (millions Personal Unemployment Year Population (1) of dollars) Income (2) Rate (3) 2002 71,394 84,151 24,134 3.1% 2003 73,211 89,476 24,737 3.4% 2004 76,584 96,756 25,780 3.1% 2005 77,699 103,716 26,789 2.7% 2006 77,719 111,762 28,063 2.5% 2007 78,307 117,134 28,804 2.8% 2008 78,465 125,025 30,547 3.9% co 2009 78,725 122,969 29,680 6.9% co 2010 78,971 125,756 n/a 7.3% 2011 75,345 n/a n/a 7.2% Sources: (1) Population-State of California/Department of Finance/Demographic Research Unit (2) Personnal Income and Per Capita Personal Income are not available at the City's level. The information presented here is for the Riverside-San Bernardino-Ontario, CA (MSA)area, provided by U.S. Department of Commerce-Bureau of Ecomomic Analysis. (3) Unemployment Rate-California Labor Market. Schedule 15 City of Chino Hills Principal Employers, Current Year and Ten Years Ago 2011 2001 Percentage Percentage Number of Total City of Total City Employer of Employees Rank Employment' Employees Rank Employment Chino Valley Unified School District 1,375 1 3.87% • n/a n/a n/a City of Chino Hills 277 2 0.78% n/a n/a n/a Costco 260 3 0.73% n/a n/a n/a Boys Republic 198 4 0.56% n/a n/a n/a Lowe's 184 5 0,52% n/a n/a n/a Albertson's, Inc. 182 6 0.51% n/a n/a n/a Best Buy 136 7 0.38% n/a n/a n/a w Harkins Theatre 129 8 0.36% n/a n/a n/a co Chino ValleyIndependent Fire District ° P 124 9 0.35/� n/a n/a n/a 99 Ranch Market 116 10 0.33% n/a n/a n/a Total 2,981 8.40% n/a n/a Source: Finance Department, and California Labor Market. Note: aTotal city employment 35,500, provided by California Labor Market. a a ga I d, t rya'l. r. r i��1E . F ti ww� Lf:. a{ >_ +max», man w i s . t 4' CITY OF CHINO HILLS INCORPORATED 1 9 9 1 THIS PAGE INTENTIONALLY LEFT BLANK 140 Information ppe rating J Schedule 16 City of Chino Hills Full-Time-Equivalent City Government Employees by Function/Program, Full-time Equivalent Employees as of June 30 2006 2007 2008 2009 2010 2011 Function/Proaram General government Legislative 6 6 6 7 7 7 City Manager 10 10 11 11 11 11 Finance 14 13 16 19 21 21 Public Safety 7 8 9 9 9 8 Public Works 36 40 42 42 42 42 N Community Development 20 20 21 23 19 17 Culture and Leisure 36 40 45 48 53 47 Water Utility 22 24 23 26 24 24 Sewer Utilitiy 7 7 7 7 7 7 Total 158 168 180 192 193 184 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. Full-Time-Equivalent City Government Employees by Function/Program was not calculated prior to 2006. Schedule 17 City of Chino Hills Operating Indicators by Function/Program, Last Ten Fiscal Years Fiscal Year 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 Function/Proaram General government Building permits issued 1,584 1,832 1,787 1,715 1,799 1,868 1,559 1,047 947 1,097 Building inspections conducted 14,338 11,114 12,135 13,373 10,540 10,001 8,713 6,252 5,081 4,516 Refuse collection Refuse collected (tons per day) n/a n/a n/a n/a 243 248 186 171.90 169.57 170.66 Recyclables collected (tons per day) n/a n/a n/a n/a 73 66 75 74.60 71.67 50.11 Other public works cce Street resurfacing (lane miles) n/a n/a n/a n/a 56.80 49.80 40.50 18.86 27.33 19.64 Potholes repaired n/a n/a n/a n/a 120 50 105 66 50 65 Water New connections n/a n/a n/a n/a 104 94 85 36 66 22 Water main breaks n/a n/a n/a n/a 24 33 40 24 11 8 Average daily consumption (million gallons) 15.63 14.79 15.46 14.97 14.49 15.87 15.25 16.14 15.62 14.20 Peak daily consumption (million gallons) n/a n/a n/a n/a 25.31 28.60 27.90 26.71 27.08 26.37 Sewage System Average daily sewage treatment (million gallons) 6.0 6.5 6.5 7.1 7.1 4.3 7.8 3.48 3.48 3.48 Sources:Various City departments. Schedule 18 City of Chino Hills Capital Asset Statistics by Function/Program, Last Ten Fiscal Years Fiscal Year 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 Function/Program Other public works Streets (miles) 179 172 172 175 175 177 170 170.37 170.37 170.37 Traffic signals n/a n/a n/a n/a 42 44 48 49 54 55 Parks and recreation Parks 34 37 37 37 38 40 40 40 40 40 Acreage 208 218 218 218 248 255 255 255 255 255 Playgrounds n/a n/a n/a n/a 27 28 28 28 28 28 Baseball/softball diamonds n/a n/a n/a n/a 14 8 8 8 8 8 a Soccer/football fields n/a n/a n/a n/a 7 7 7 7 7 7 Community centers n/a n/a n/a n/a 5 5 5 5 5 5 Water Water mains (miles) 295 240 245 250 250 250 250 250 302 302 Fire hydrants n/a n/a n/a n/a 2,500 2,564 2,610 1,805 2,137 2,137 Storage capacity(million gallons) 35 38 38 38 38 38 38 38 38 38 Sewage System Sanitary sewers (miles) 255 215 200 202 202 202 202 220 188.63 188.63 Storm sewers (miles) 190 75 80 82 82 103.5 103.5 103.5 103.5 103.5 Sources: Various city departments. Notes: No capital asset indicators are available for the general government.