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2015-2016 CAFRComprehensive Annual Financial Report �., Fiscal Year Ended June 30, 2016 Chino Hills, California r 4 1 r .. f = —' _ - '�: -- _ ]rile• -- �',y,� p4+„'' , ,d w _ LT -. c. ;' , CITY OF CHINO HILLS, CALIFORNIA COMPREHENSIVE ANNUAL FINANCIAL REPORT FISCAL YEAR ENDED JUNE 30, 2016 Prepared by: Department of Finance i Chino Hills This page intentionally left blank. CITY OF CHINO HILLS COMPREHENSIVE ANNUAL FINANCIAL REPORT FOR THE FISCAL YEAR ENDED JUNE 30, 2016 TABLE OF CONTENTS INTRODUCTORY SECTION Letter of Transmittal..................................................................... Organizational Chart.................................................................... CityOfficials................................................................................. Certificate of Achievement for Excellence in Financial Reporting FINANCIAL SECTION INDEPENDENT AUDITORS' REPORT ............................................. MANAGEMENT'S DISCUSSION AND ANALYSIS ........................... Government—Wide Financial Statements Statement of Net Position............................................................ Statement of Activities................................................................. Fund Financial Statements Balance Sheet — Governmental Funds ....................................... Reconciliation of the Balance Sheet of Governmental Funds to the Statement of Net Position ................................................. Statement of Revenues, Expenditures and Changes in Fund Balances — Governmental Funds ................................................ Reconciliation of the Statement of Revenues, Expenditures and Changes in Fund Balances of Governmental Funds to the Statement of Activities................................................................. Statement of Net Position — Proprietary Funds ........................... Statement of Revenues, Expenses and Changes in Fund Net Assets — Proprietary Funds......................................................... Statement of Cash Flows — Proprietary Funds ........................... Statement of Fiduciary Net Position — Fiduciary Funds .............. Notes to Financial Statements........................................................ REQUIRED SUPPLEMENTARY INFORMATION Notes to Required Supplementary Information Budgetary Comparison Schedule — General Fund ..................... Budgetary Comparison Schedule — Existing Infrastructure Fees Page Number ... i .vi vii viii 1 6 ................................................19 ................................................20 .22 .25 .26 .28 .29 .30 .31 .32 .34 77 78 79 CITY OF CHINO HILLS COMPREHENSIVE ANNUAL FINANCIAL REPORT FOR THE FISCAL YEAR ENDED JUNE 30, 2016 TABLE OF CONTENTS Page Numher Pension Plan Schedule of Proportionate Share of Net Pension Liability.......................................................80 Schedule of Plan Contributions................................................................................................81 COMBINING AND INDIVIDUAL FUND STATEMENTS AND SCHEDULES Combining Balance Sheet — Nonmajor Governmental Funds.......................................................86 Combining Statement of Revenues, Expenditures and Changes in Fund Balances — Nonmajor Governmental Funds......................................................92 Budgetary Comparison Schedules Landscape and Lighting District...............................................................................................98 Sleepy Hollow Road Improvement...........................................................................................99 General Facilities Fees..........................................................................................................100 TrafficFacilities Fees.............................................................................................................101 Storm Drain Facilities Fees....................................................................................................102 ParklandFees........................................................................................................................103 TrafficSignal Fees.................................................................................................................104 GasTax..................................................................................................................................105 AirQuality...............................................................................................................................106 FederalGrants.......................................................................................................................107 MeasureI...............................................................................................................................108 SolidWaste............................................................................................................................109 StreetSweeping.....................................................................................................................110 FrontlinePolicing....................................................................................................................111 Miscellaneous Grants.............................................................................................................112 Affordable Housing Program..................................................................................................113 WaterFacilities Fee..............................................................................................................114 SewerFacilities Fee..............................................................................................................115 PublicSafety Programs..........................................................................................................116 CapitalImprovement..............................................................................................................117 CFD #9 Rincon Village...........................................................................................................118 Combining Statement of Net Position — Internal Service Funds ..................................................120 Combining Statement of Revenues, Expenses and Changes in Fund Net Position — Internal Service Funds.................................................................................121 Combining Statement of Cash Flows — Internal Service Funds...................................................122 Combining Statement of Assets and Liabilities — All Agency Funds ............................................124 Combining Statement of Changes in Assets and Liabilities — AIIAgency Funds..........................................................................................................................128 CITY OF CHINO HILLS COMPREHENSIVE ANNUAL FINANCIAL REPORT FOR THE FISCAL YEAR ENDED JUNE 30, 2016 TABLE OF CONTENTS STATISTICAL SECTION Last Ten Fiscal Years Net Position by Component........................................................... Changes in Net Position................................................................. Fund Balances of Governmental Funds ........................................ Changes in Fund Balances of Governmental Funds ..................... Water Revenue — Charges for Services ........................................ Assessed Value and Estimated Actual Value of Taxable Property Direct and Overlapping Property Tax Rates .............................................. Principal Property Tax Payers................................................................... Property Tax Levies and Collections......................................................... Ratios of Outstanding Debt by Type........................................................... Ratios of General Bonded Debt Outstanding ............................................ Direct and Overlapping Governmental Activities Debt ............................... Legal Debt Margin Information................................................................... Pledged—Revenue Coverage..................................................................... Demographic and Economic Statistics....................................................... PrincipalEmployers................................................................................... Full—Time—Equivalent City Government Employees by Function/Program Operating Indicator by Function/Program................................................... Capital Asset Statistics by Function/Program............................................ Page 136 137 139 140 142 143 144 145 146 148 149 150 151 152 154 155 158 159 160 i (.rhino Hills This page intentionally left blank. Cit} of Chino Introductory Section i (.rhino Hills This page intentionally left blank. Return to Table of Contents e/� November 23, 2016 The Honorable Mayor and City Council City of Chino Hills, California 14000 City Center Drive Chino Dills, CA 91709 (909) 364-2600 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, 2016. 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, Soll, & Lunghard, LLP, a firm of licensed certified public accountants, has issued an unmodified ("clean") opinion of the City of Chino Hills' financial statements for the year ended June 30, 2016. 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. 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. C4 cam.- Art Bennett ■ Ed M. Graham ■ Ray Marquez ■ Cynthia Moran 0 Peter J. Rogers Chino Hills is a family -friendly community with a diverse population that has climbed to nearly 78,866 people. Residents appreciate the City's ranking as one of the safest cities in the United States. In 2016, Chino Hills was ranked 9th "Safest Place in California" by Value Penguin Data Research (60,000* population) and 47th Safest City in California by SafeWise. Residents enjoy a nice balance of quality development and open space, excellent schools, a strong commitment to family values, and access to an active lifestyle, The community is home to 43 parks, 39 miles of trails, and 3,000 acres of community -owned open space. Residents take advantage of the beautiful environment while walking, hiking, and biking throughout the City. The rural atmosphere has been preserved in the rolling hills and canyons throughout the community after years of careful planning. The City's equestrian heritage continues today and is concentrated in the English Road area. 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. Chino Hills Community Park is the flagship park in the City. The park features six ball fields for baseball or softball and five overlay soccer fields. A grand opening was held for Vila Borba Park in December of 2015. The park. includes the City's first dog park. The City has a variety of venues that enhance the lifestyle that residents treasure. The craftsman style, 17,000 -square -foot Chino Hills Community Center is very popular for large banquets and weddings. Recreation classes take advantage of the state -of -the art dance room and exercise room. Art shows, free concerts, and various community presentations are also offered. Next door, the beautiful 20 -acre McCoy Equestrian & Recreation Center includes two lighted arenas, covered bleachers, a gazebo, a community building, and trail connections. These places play a role in the strong sense of community that residents enjoy. They provide a place for people to gather and connect with one another at various City -sponsored events including Concerts and Movies in the Park, and the Independence Day celebration. Chino Hills ranks high in the United States with an average household income of $103,464 according to 2016 data from the Environmental Systems Research Institute (ESRI). Income levels are often linked to educational levels and the 2016 data indicates that 45% of residents over age 25 have bachelor's degrees or higher, including 15.1 % with graduate degrees. Many families are attracted to Chino Hills by high -performing schools with Academic Performance Index (API) scores in the 800's and 900's. Chino Valley Unified School District schools lead the County in API results, The City, the School District, youth sports organizations, the faith community, youth organizations, parents, volunteers, and others all work together to provide a great environment for kids. The City of Chino Hills provides a full range of services including: police protection (via contract with the San Bernardino County Sheriffs Department), solid waste disposal services (via contract with Republic Waste Services of So. California dba-Chino Hills Disposal), the construction and maintenance of streets and infrastructure, economic development, recreational activities, and cultural events. The Chino Valley 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 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 1 of the Notes to Required Supplementary information for additional information on budget procedures. Relevant Financial Policies For fiscal year 2015-16, the City of Chino Hills has committed $1.1 million of the General Fund balance for the Liability Insurance Rate Stabilization. The City's general liability insurance costs are expected to have significant swings due to changes in the cost allocation formula to members of the insurance pool. The City Council has set aside $1.1 million of General Fund reserves in anticipation of the volatility of the costs going forward. Local Economy The economic condition of the area in which the City is located (In southwestern San Bernardino County) points to future growth for the City of Chino Hills. However, in November 1999, the residents of Chino Hills voted in favor of Proposition "U" that essentially states any new development proposed for a higher density than is allowed per the General Plan requires voter approval. This does not affect projects with densities equal to or lower than allowed per the General Plan or projects that already have approved tract maps. Chino Hills is one of the most desirable cities in the County of San Bernardino. The demand for residential construction will continue due to good schools, low crime, and the City's strong, positive reputation. In the 2015-16 fiscal year, 520 residential units were built as compared to 51 in 2014-15. For fiscal year 2016-17, the projection for new residential is 582 units. The City is reaching build -out, and the remaining residential properties are infill, smaller and/or have physical constraints that make them more challenging to build. The City's population continues to grow steadily, rising from 42,691 in 1991 to 78,866 in 2016. The projected population is 84,800 at the end of the current five-year operating plan, Chino Hills' future is projected to maintain continued growth given future development of the vacant land that remains under -the General Plan, projects currently under consideration, and the attractiveness of the Chino Hills marketplace. Economic development efforts over the past several years have proven successful in the strengthening of the City's revenue base. "The Shoppes at Chino Hills" Phase I and "The Commons at Chino Hills" projects have continued to add new restaurant and retail tenants and have made a 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 375,000 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 .foe's, Banana Republic, The Loft, White House Black Market, H&M, XXI Forever, Victoria's Secret, Wood Ranch BBQ & Grill, California Pizza Kitchen, Chipotle Mexican Grill, Panera Bread, Yard House Restaurant, Smash Burger, and Bruxie. Recent successful additions to The Shoppes include Old Navy and JCrew Mercantile. "The Commons at Chino Hills" is a 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, BJ's Brewhouse, and Souplantation. Recent additions to The Commons include Hobby Lobby, and an Orange. Theory fitness facility and Farou Food Egyptian restaurant which is currently under construction. Also recently completed is the Kaiser Regional Laboratory, a major redevelopment of the existing vacant 133,000 -square foot building, which was previously constructed and operated as the Great Indoors, into a regional laboratory of approximately 88,238 square feet (and 40,120 square feet of shelled future expansion space. Development projects under construction are the (i) Avalon Bay (aka Overton Moore); a 331 -unit apartment project and 16 -acre public park; (ii) Vila Borba; a 183 single family residential development that includes the recently completed 5 -acre community park that includes a one -acre dog park; (iii) Canyon Hills; a hillside development with 76 luxury single family homes; (iv) Jade Tree; a 65 unit townhome development; (v) Santa Barbara; a mixed-use development consisting of 324 luxury apartments and 15,000 square feet of retaillrestaurants; and (v) Turner Business Park; consisting of 300,000 square feet of light industrial space. The City also contracts with CBRE, a commercial broker, to assist with staff efforts to bring in successful new retail and restaurant tenants and to monitor upcoming vacancies. Short -Term Outlook The City is experiencing improvement during the economic recovery, although challenges still remain. The economy is projected to grow slowly over the next couple of years. The City needs to be attentive during the economic recovery stage to ensure that the City of Chino Hills Is positioned to take advantage of opportunities in the next economic growth cycle. Although the City of Chino Hills has been and continues to be strong financially, the potential fiscal impact of a recession could have an adverse impact on Chino Hills in the form of the state of California revenue reductions to local governments. The City of Chino Hills has maintained its strong financial position through prudent, long-range policy decisions, and sound fiscal management. The City will continue to monitor key economic indicators, sources of revenues, and spending levels as part of its sound conservative fiscal approach. Long -Term Goals, Efforts, and Actions The challenges presented by the demands of providing essential municipal services during an economic downturn continue to be a principal challenge for Chino Hills. The development, clarification, and refinement of processes are vital to sustain the organization over the long term. Both the Operating and Capital Improvement budgets reflect the continued focus on maintenance of the City's existing infrastructure. This maintenance effort is critical, on a proactive basis, to minimize our costs over the long term. Major Initiatives The City of Chino Hills prepares a five-year financial projection of its Capital Improvement Program (CIP). The City continues an aggressive CIP effort utilizing staff and consultant resources to implement projects in a timely and cost effective manner. A coordinated approach to the CIP is critical to meet the facility and infrastructure needs of our current residents and businesses as well as the infrastructure needs that the growth in Chino Hills will require. The management and implementation of our CIP merits and will continue to receive the attention of the entire organization, The City's Five Year CIP of $22,455,400 demonstrates its commitment to infrastructure improvements and consists of projects in the following categories: Streets $ 10,654,500 Public Facilities $ 114,500 Parks/Open Space $ 3,662,300 Water $ 4,854.800 Recycled Water $ 2,473,700 Sewer/Storm Drain $ 695,600 iv Awards and Acknowledgements The Government Finance Officers Association (GFOA) of the United States and Canada awarded a Certificate of Achievement for Excellence in Financial Reporting to the City for its Comprehensive Annual Financial Report for the fiscal year ended June 30, 2015. To be awarded a Certificate of Achievement, the City must publish an easily readable and efficiently organized Comprehensive Annual Financial Report, the contents of which conform to program standards. Such report must also satisfy both U.S. generally accepted accounting principles (GAAP) and applicable legal requirements. A Certificate of Achievement is valid for a period of one year only. We believe that our current Comprehensive Annual Financial Report conforms to the Certificate of Achievement Program's requirements, and we are submitting it to the GFOA to determine its eligibility for another certificate. The dedication of the Finance Department staff made it possible to prepare this report in a timely manner. We wish to express our appreciation to all members of the department who assisted and contributed to the preparation of this report. Credit also must be given to the Mayor and the City Council for their unfailing support for maintaining the highest standards of professionalism in the management of the City of Chino Hills' finances. Respectfully submitted, Konradt Bartlam City Manager V J R Lanihster Finance Director Return to Table of Contents THE CITY OF CHINO HILLS ORGANIZATION OF CITY GOVERNMENT OPERATING SUMMARY 91 Return to Table of Contents City CounciC Art Bennett Mayor Ed Graham CounciCwlember Ray Marquez Vice Mayor Cynthia Moran CounciCvlember .,administrative (Personnel City .Manager City .attorney City Clerk Finance Director Community Development Director Public -Works Director Community Services Director M Peter Rogers CounciCvlember Konradt Bartlam Mark D. Hensley Cheryl Balz Judy R. Lancaster Joann Lombardo Nadeem Majaj Jonathan Marshall Return to Table of Contents City of Chino Financial Section i (.rhino Hills This page intentionally left blank. Return to Table of Contents LS Us CPi., ADVISOR INDEPENDENT AUDITORS' REPORT To the Honorable Mayor and Members of the City Council City of Chino Hills, California Report on the Financial Statements We have audited the accompanying financial statements of the governmental activities, the business -type activities, each major fund, and the aggregate remaining fund information of City of Chino Hills, California, (the City) as of and for the year ended June 30, 2016, and the related notes to the financial statements, which collectively comprise the City's basic financial statements as listed in the table of contents. Management's Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error. Auditor's Responsibility Our responsibility is to express opinions on these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity's preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity's internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions. PrimeGlobal AnAa—wti- r ,,,V,nd_Areo tig Firms To the Honorable Mayor and Members of the City Council City of Chino Hills, California Opinions In our opinion, the financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities, the business -type activities, each major fund, and the aggregate remaining fund information of the City of Chino Hills, California, as of June 30, 2016, and the respective changes in financial position and, where applicable, cash flows thereof for the year then ended in accordance with accounting principles generally accepted in the United States of America. Other Matters Required Supplementary Information Accounting principles generally accepted in the United States of America require that the management's discussion and analysis, the budgetary comparison schedules for the General Fund and Existing Infrastructure Fees Fund, Schedule of Proportionate Share of the Net Pension Liability, and Schedule of Plan Contributions, as listed in the table of contents, be presented to supplement the basic financial statements. Such information, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board, who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management's responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance. Other Information Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the City's basic financial statements. The introductory section, combining and individual nonmajor fund financial statements and schedules and statistical section are presented for purposes of additional analysis and are not a required part of the basic financial statements. The combining and individual nonmajor fund financial statements and schedules are the responsibility of management and were derived from and relate directly to the underlying accounting and other records used to prepare the basic financial statements. The information has been subjected to the auditing procedures applied in the audit of the basic financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the basic financial statements or to the basic financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the combining and individual nonmajor fund financial statements and schedules are fairly stated in all material respects in relation to the basic financial statements as a whole. The introductory and statistical sections have not been subjected to the auditing procedures applied in the audit of the basic financial statements and, accordingly, we do not express an opinion or provide any assurance on them. To the Honorable Mayor and Members of the City Council City of Chino Hills, California Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated November 22, 2016 on our consideration of the City's internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the City's internal control over financial reporting and compliance. Brea, California November 22, 2016 i (.rhino Hills This page intentionally left blank. Cit} of Chino Management's Discussion & Analysis i (.rhino Hills This page intentionally left blank. Return to Table of Contents Uhino Hills MANAGEMENT'S DISCUSSION AND ANALYSIS The following Management Discussion and Analysis (MD&A) of the City of Chino Hills' financial performance provides an introduction and overview to the financial activities of the City for the fiscal year ended June 30, 2016. This narrative discussion and analysis focuses on the current year's activities, resulting changes and currently known facts; therefore, the information presented here should be considered in conjunction with additional information furnished in the letter of transmittal and the accompanying basic financial statements. FINANCIAL HIGHLIGHTS • Total assets of the City exceeded its liabilities at June 30, 2016 by $508.9 million (net position). • The City's net position increased by $28.6 million from $480.3 million to $508.9 million in fiscal year 2015-16 which was primarily attributable to the reduction of $19.8 million in long term debt, a $3.8 million gain on the City's investment in the Chino Basin Desalter Authority Joint Venture, and a reduction of $3.8 million in deferred pension related items. • The City's governmental funds combined ending fund balances increased $10.0 million from $51.1 million to $61.1 million at June 30, 2016 largely due to increases in operating revenues, increases in one time revenues received related to development activity, and a reduction of developer related debt. Of this $61.1 million, $0.7 million was non -spendable, $42.9 million was restricted, $22.4 million was committed, $1.7 million was assigned and ($6.6) million was unrestricted. USING THIS ANNUAL REPORT This annual report consists of a series of financial statements. The Statement of Net Position 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. The Statement of Net Position and the Statement of Activities: The Statement of Net Position and the Statement of Activities report information about the City as a whole and about its activities. These statements include all assets and liabilities of the City using the accrual basis of accounting, which is similar to the accounting used by most private -sector companies. All of the current year's revenues and expenses are taken into account regardless of when cash is received or paid. These two statements report the City's net position and changes. Net Position is the difference between assets and liabilities, which is one way to measure the City's financial health, or financial position. Over time, increases or decreases in the City's net position is an indication of whether its financial health is improving or deteriorating. However, other non-financial factors such as changes in the economy due to external factors that will cause a decrease in consumer spending also needs to be taken into consideration. In the Statement of Net Position and the Statement of Activities, the City's activities are separated as follows: Governmental activities — Most of the City's basic services are reported in this category, including the general government (city manager, city clerk, and finance), public safety (police protection), public works, community development, community services, and interest on long-term debt. Property taxes, sales tax, motor vehicle in -lieu fees, interest income, franchise fees, state and federal grants, contributions from other agencies, and other revenues finance these activities. Business -type activities — The City charges a fee to customers to cover all or most of the cost of certain services it provides. The City's water and sewer utilities are reported in this category. REPORTING THE CITY'S MOST SIGNIFICANT FUNDS Fund Financial Statements: The fund financial statements provide detailed information about the most significant funds and other funds; not the City as a whole. Some funds are required to be established by State law and by bond covenants. However, management established many other funds to help it control and manage money for particular purposes or to show that it is meeting legal responsibilities for using certain taxes, grants, and other resources. The City's two types of funds are governmental and proprietary. Governmental funds — Most of the City's basic services are reported in governmental funds, which focus on how money flows in and out of those funds and the balances left at year-end that are available for spending. These funds are reported using an accounting method called modified accrual accounting, which measures cash and all other financial assets that can readily be converted to cash. The governmental fund statements provide a detailed short-term view of the City's general government operations and the basic services it provides. Governmental fund information helps determine whether there are more or fewer financial resources that can be spent in the near future to finance the City's programs. The differences of results in the Governmental Fund financial statements to those in the Government -Wide financial statements are explained in a reconciliation following each Governmental Fund financial statement. Proprietary funds — When the City charges customers for the services it provides, these services are generally reported in proprietary funds. Proprietary funds are reported in the same way that all activities are reported in the Statement of Net Position and the Statement of Activities. In fact, the City's proprietary funds are the same as the business -type activities that are reported in the government -wide statements but provide more detail and additional information such as a statement of cash flows. The City uses internal service funds (the other component of proprietary funds) to report activities that provide supplies and services for the City's other programs and activities — such as the City's Equipment Maintenance and Information Technology Funds. The internal service funds are reported with governmental activities in the government -wide financial statements. The proprietary fund financial statements can be found in the Basic Financial Statements section of this report. THE CITY AS TRUSTEE Reporting the City's Fiduciary Responsibilities: The City is the trustee, or fiduciary, for certain funds held on behalf of those entities outside of the government. The City's fiduciary activities are reported in a separate Statement of Fiduciary Net Position. These activities are excluded from the City's other financial statements because the City cannot use these assets to finance its operations. The City is responsible for ensuring that the assets reported in these funds are used for their intended purposes. THE CITY AS A WHOLE This analysis focuses on the City's net position and changes in net position of the governmental and business -type activities for the fiscal year ended June 30, 2016. As noted earlier, the City's net position increased by $28.6 million from $480.3 million at June 30, 2015 to $508.9 at June 30, 2016. The largest portion $355.8 million, or 70% of the City's net position reflects the net investment in capital assets such as land, buildings, machinery and equipment, less any related debt used to acquire those assets that were still outstanding. These are not liquid assets; therefore, they are not available for future spending. An additional portion of $44.1 million or 9% of the City's net position represents various resources subject to external restrictions on how they may be used. The remaining balance of unrestricted net position of $109.0 million, or 21% may be used to meet the City's ongoing obligations to citizens and creditors. This is the only "discretionary" portion of the City's total net position amount. The following graph demonstrates the components of the City's net position at fiscal year ended June 30, 2016. Unrestricted $109.0 millior 21% City of Chino Hills Net Position June 30, 2016 $508.9 Million Restricted for other Restricted for Restricted for other uses Debt Service capital projects $7.7 million �1 1 millinn N !t investment in capital assets $355.8 million 70% The following is an analysis that summarizes the City's net position (Exhibit A) at fiscal year ended June 30, 2016, and 2015, respectively: Exhibit A Net Position (Summarized) As of June 30, 2016 and 2015 (in thousands) During the fiscal year 2015-16, current and other assets increased by $15.0 million. This was primarily the result of an $8.1 million increase in current and other assets provided by net operating activities in the governmental funds related to increases in development related revenues and an increase in taxes received, a $3.9 million gain on investment in the Water Utility Fund related to the Chino Basin Desalter Authority joint venture and a $2.2 million increase in cash provided by net operating activities in the Water Utility Fund. Capital and intangible assets decreased by $11.5 million. This can be attributed to the increase in accumulated depreciation of capital assets for fiscal year 2015-16. The overall result was an increase of $3.5 million in total assets from $572.4 million to $575.9 million in the fiscal year 2015-16. Total deferred outflows increased by $0.3 million due to the net effect of a $0.1 million decrease in deferred charges related to Water Utility Fund long term debt and a $0.4 million increase in deferred pension related items associated with the annual pension reconciliation adjustments for changes in assumptions as well as adjustments for actual verses proportionate share of contributions. Total liabilities decreased by $21.0 million in fiscal year 2015-16 primarily due to the reduction of long-term liabilities related to the defeasance of the 2007 Certificates of Participation ($14.7 million), a General Obligation Bond, and a reduction of $4.4 million in developer fee program obligations. Additionally, deferred pension related items decreased $3.8 million as a result of the fiscal year 2015-16 pension liability adjustments. This net decrease in liabilities combined with the overall increase in total assets resulted in an overall increase in net position of $28.6 million from $480.3 million to $508.9 million in the fiscal year 2015-16. E Governmental Business -Type Activities Activities Totals 2016 2015 2016 2015 2016 2015 Change Current and other assets $ 70,696 $ 62,921 $ 114,319 $ 107,156 $ 185,015 $ 170,077 $ 14,938 Capital & intangible assets 277,797 285,334 113,115 117,026 390,912 402,360 (11,448) Total Assets $ 348,493 $ 348,255 $ 227,434 $ 224,182 $ 575,927 $ 572,437 $ 3,490 Deferred from debt refunding $ - $ - $ 407 $ 549 $ 407 $ 549 $ (142) Deferred pension related items 11,283 10,874 - - 11,283 10,874 409 Total deferred outflows $ 11,283 $ 10,874 $ 407 $ 549 $ 11,690 $ 11,423 $ 267 Other liabilities $ 4,069 $ 6,383 $ 4,194 $ 3,744 $ 8,263 $ 10,127 $ (1,864) Long-term liabilities oustanding 47,496 64,848 15,499 17,310 62,995 82,158 (19,163) Total Liabilities $ 51,565 $ 71,231 $ 19,693 $ 21,054 $ 71,258 $ 92,285 $ (21,027) Deferred pension related items $ 7,478 $ 11,280 $ - $ - $ 7,478 $ 11,280 $ (3,802) Total deferred inflows $ 7,478 $ 11,280 $ - $ - $ 7,478 $ 11,280 $ (3,802) Net Position: Net investment in capital assets $ 257,467 $ 249,002 $ 98,353 $ 100,579 $ 355,820 $ 349,581 $ 6,239 Restricted 42,939 40,314 1,120 3,455 44,059 43,769 290 Unrestricted 327 (12,698) 108,676 99,643 109,003 86,945 22,058 Total net position $ 300,733 $ 276,618 $ 208,149 $ 203,677 $ 508,882 $ 480,295 $ 28,587 During the fiscal year 2015-16, current and other assets increased by $15.0 million. This was primarily the result of an $8.1 million increase in current and other assets provided by net operating activities in the governmental funds related to increases in development related revenues and an increase in taxes received, a $3.9 million gain on investment in the Water Utility Fund related to the Chino Basin Desalter Authority joint venture and a $2.2 million increase in cash provided by net operating activities in the Water Utility Fund. Capital and intangible assets decreased by $11.5 million. This can be attributed to the increase in accumulated depreciation of capital assets for fiscal year 2015-16. The overall result was an increase of $3.5 million in total assets from $572.4 million to $575.9 million in the fiscal year 2015-16. Total deferred outflows increased by $0.3 million due to the net effect of a $0.1 million decrease in deferred charges related to Water Utility Fund long term debt and a $0.4 million increase in deferred pension related items associated with the annual pension reconciliation adjustments for changes in assumptions as well as adjustments for actual verses proportionate share of contributions. Total liabilities decreased by $21.0 million in fiscal year 2015-16 primarily due to the reduction of long-term liabilities related to the defeasance of the 2007 Certificates of Participation ($14.7 million), a General Obligation Bond, and a reduction of $4.4 million in developer fee program obligations. Additionally, deferred pension related items decreased $3.8 million as a result of the fiscal year 2015-16 pension liability adjustments. This net decrease in liabilities combined with the overall increase in total assets resulted in an overall increase in net position of $28.6 million from $480.3 million to $508.9 million in the fiscal year 2015-16. E The City's programs for governmental activities include general government, public safety, public works, community development, and community services. The programs for the business -type activities include the water and sewer services. The following is a summary of Statements of Activities that records the Changes in Net Position (Exhibit B) for the programs listed above: Exhibit B Changes in Net Position As of June 30, 2016 and 2015 (in thousands) Governmental Business -Type Activities Activities Totals 2016 2015 2016 2015 2016 2015 Change Revenues: Program Revenues: Charges for services $ 29,766 $ 27,060 $ 31,007 $ 33,731 $ 60,773 $ 60,791 $ (18) Operating contributions and grants 3,237 3,725 - - 3,237 3,725 (488) Capital contributions and grants 34,293 8,993 77 11 34,370 9,004 25,366 General Revenues: Property taxes 12,029 11,584 - - 12,029 11,584 445 Sales taxes 7,073 7,530 7,073 7,530 (457) Franchise taxes 2,364 2,381 2,364 2,381 (17) Othertaxes 1,734 1,366 1,734 1,366 368 Intergovernmental, unrestricted 31 32 - - 31 32 (1) Use of money and property 2,245 1,542 1,418 774 3,663 2,316 1,347 Other revenues 449 13 2,242 2,225 2,691 2,238 453 Total Revenues 93,221 64,226 34,744 36,741 127,965 100,967 26,998 Expenses: General government 7,369 7,457 - - 7,369 7,457 (88) Public safety 12,729 11,759 12,729 11,759 970 Public works 37,789 36,612 37,789 36,612 1,177 Community development 4,794 4,211 4,794 4,211 583 Community services 7,267 6,658 7,267 6,658 609 Interest on long-term debt 501 972 501 972 (471) Water Utility - - 20,648 10,932 20,648 10,932 9,716 Sewer Utility - 8,281 7,812 8,281 7,812 469 Total Expenses 70,449 67,669 28,929 18,744 99,378 86,413 12,965 Increase (decrease) in net position before transfers 22,772 (3,443) 5,815 17,997 28,587 14,554 14,033 Transfers 1,343 1,489 (1,343) (1,489) Increase (decrease) in net position $ 24,115 $ (1,954) $ 4,472 $ 16,508 $ 28,587 $ 14,554 $ 14,033 Net position, beginning of year $ 276,618 $ 303,864 $ 203,677 $ 187,169 $ 480,295 $ 491,033 $ (10,738) Restatement - (25,292) - - - (25,292) 25,292 Net postion, end of year $ 300,733 $ 276,618 $ 208,149 $ 203,677 $ 508,882 $ 480,295 $ 28,587 In fiscal year 2015-16, there was a net increase in total revenues of $27.0 million as compared to fiscal year 2014-15. An increase of $25.4 million in Capital contributions and grants accounts for 94% of the change. This increase was the result of two primary factors. First, the defeasance of the 2007 Certificates of Participation resulted in a one-time $13.0 million increase due to the contributions made by Community Facilities Districts No.'s 2, 5 and 8 for the debt payoff. These districts transferred funds to the General fund to facilitate the payment. Second, capital contributions and grants increased by $12.1 million due to an increase in development impact fees contributed by several large development projects in fiscal year 2015-16. 10 Total expenses in fiscal year 2015-16 increased by $13.0 million as compared to the prior fiscal year. Public safety costs increased by $1.0 million due to an increase in personnel costs passed through to the City by the San Bernardino County Sheriffs department. Public works expenditures increased by $1.2 million due to the recognition of developer credits for several large development projects. Lastly, Water utility expenses increased by $9.7 million over the prior year primarily due to a smaller gain on investment with the Chino Basin Desalter Authority in the fiscal year 2015-16. The net effect of the changes in revenues and expenses resulted in an overall increase of $28.6 million for the fiscal year 2015-16. Governmental Activities The following presents the cost of each of the City's six largest programs — general government, public safety, community development, community services, public works and interest on long-term debt — as well as each program's net cost (total cost less revenues generated by the activities). The net cost shows the financial impact by each of these functions. Exhibit C Governmental Activities As of June 30, 2016 and 2015 (in thousands) Net Cost of Services 2016 2015 Change Total Cost of Services $ 17,174 $ 4,053 $ 13,121 General government $ 7,369 $ 7,457 $ (88) Public safety 12,729 11,759 970 Public works 37,789 36,612 1,177 Comrrunity development 4,794 4,211 583 Comrrunity services 7,267 6,658 609 Interest on long-term (501) (972) 471 debt 501 972 (471) Total $ 70,449 $ 67,669 $ 2,780 Net Cost of Services 2016 2015 Change General government $ 17,174 $ 4,053 $ 13,121 Public safety (12,040) (11,049) (991) Public works (1,913) (13,336) 11,423 Comrrunity development (472) (1,488) 1,016 Community services (5,401) (5,100) (301) Interest on long-term debt (501) (972) 471 Total $ (3,153) $ (27,892) $ 24,739 11 The chart below illustrates the total revenues of the governmental activities for the fiscal year ended June 30, 2016 and 2015 respectively. 35,000 30,000 c 25,000 0 5 20,000 c E 15,000 0 E 10,000 5,000 E City of Chino Hills Revenue Sources- Two- year Comparison Governmental Activities Taxes Charges for Operating Capital Investment services contributions contributions earnings & grants & grants ■ 2016 ■ 2015 Other The chart below illustrates the total expenses of the governmental activities for the fiscal year ended June 30, 2016 and 2015 respectively. 40,000 35,000 M r 30,000 0 M r- 25,000 c 20,000 E 15,000 10,000 5,000 I City of Chino Hills Expenses- Two- year Comparison Governmental Activities General Public safety Public works Community Community Interest on government development services long term debt ■ 2016 ■ 2015 12 THE CITY'S FUNDS The total fund balance of the governmental funds at June 30, 2016 was $61.1 million. The fund balance includes the General Fund, Major Special Revenue Funds and non -major Other Governmental Funds which accounts for the remainder of governmental fund balances. The General Fund, which has the largest fund balance of the governmental funds at $27.0 million, increased by $4.8 million compared to fiscal year 2014-15. The increase can be primarily attributed to an overall increase in operating revenues in taxes, licenses and permits and charges for services as compared to the related expenditures. The Major Special Revenue Funds accounting for ($5.9) million of the governmental fund balance increased by $1.5 million compared to fiscal year 2014-15. The increase in the Special revenue fund balances can be primarily attributed to the reduction of long term developer obligations paid by the Existing Infrastructure Fee fund. The non -major Other Governmental Funds account for the remainder of governmental fund balances of $40.1 million. The aggregate increase in these funds is $3.7 million which is mainly attributed to development impact fee revenues. The total net position of the Proprietary Funds was $208.2 million. This represents a $4.6 million increase from fiscal year 2014-15. The Proprietary Funds include the Water Utility Fund and the Sewer Utility Fund. The increase in net position is mainly attributable to a $3.9 million gain on investment in the Water utility fund related to the Chino Basin Desalter Authority joint venture and an overall increase in operating activities in the Water Utility Fund. General Fund Budgetary Highlights During the year, the City Council reviewed and revised the City budget as recommended by the City staff. Adjustments were made on a quarterly basis as the City's staff requested additional appropriations to cover the cost of projects that either had change orders for additional work, or the estimated cost at the beginning of the project was underestimated. Adjustments were also made as department heads requested increases or decreases to their budgets to maintain their current level of services. The City Manager has authority to increase or decrease appropriations up to $25,000 per departmental request. Additionally, the City Manager is authorized to transfer appropriations within a department within a fund or between departments within a fund without limitation. All amendments in excess of $25,000 are approved by the City Council. The following discussion highlights the outcome of the General Fund budget. General Fund revenues ended the year $0.9 million lower than anticipated; General Fund expenditures were $7.0 million less than the adjusted operating budget. These amounts resulted in an overall increase in the fund balance to $27.0 million. Key factors of the differences in budget -to -actual included the following: • Taxes received were $0.7 million higher than expected primarily due to the final State of California triple -flip reconciliation received in the amount of $1.0 million. This amount represents the final "true -up" and signaled the end of the triple flip funding program. • Licenses and Permits were lower than expected, resulting in $0.8 million less revenue. This was the result of less development activity than originally anticipated due to routine delays on currently approved development projects. • Charges for services came in $1.0 million less than budgeted due to lower than expected administrative overhead charges received from development impact fee funds. Adopted estimates were based on projected development activity. Lower than expected development activity due to routine delays resulted in lower than expected amounts. 13 • Principal retirement expenses came in $1.2 million under budget as the General Fund interfund loan repayments are not recorded as expenditures, but rather are recorded as transactions on the balance sheet. • Transfers out ended the year $2.5 million less than budgeted primarily due to less reimbursements for capital projects activity. Specifically, the Bird Farm Park project funded by the general fund only recorded minimal activity as the project is still in the planning and design phase. Together, the above mentioned items resulted in a net $7.0 million positive variance to final budget amounts. CAPITAL ASSET AND DEBT ADMINISTRATION Capital Assets The City of Chino Hills had $390.9 million invested in the capital assets, as compared to $402.3 million in the prior year. Net decrease in the capital assets is approximately $11.4 million. The decrease was primarily due to the increase in Accumulated Depreciation of Capital Assets recorded in fiscal year 2015-16. For more detailed information, see Note 5 to the financial statements. Land and easements Construction -in -progress Structures and improvements Utility plant in service Meters Pipeline in service Equipment Vehicles Infrastructure Water and capacity rights Total Debt Exhibit D Capital Assets at Year -End (Net of Depreciation) For the Year Ended June 30, 2016 and 2015 (in thousands) Governmental Activities 2016 2015 $ 26,693 $ 26,693 13,850 8,110 102,057 105,311 154 159 1,907 2,124 863 1,064 132,273 141,873 Business -Type Activities 2016 2015 $ 3,933 $ 3,933 4,311 2,931 562 602 18,804 19,765 3,497 3,877 71,841 75,252 258 322 - - 9,909 10,344 $ 277,797 $ 285,334 $ 113,115 $ 117,026 Totals 2016 2015 Change $ 30,626 $ 30,626 $ - 18,161 11,041 7,120 102,619 105,913 (3,294) 18,804 19,765 (961) 3,497 3,877 (380) 71,995 75,411 (3,416) 2,165 2,446 (281) 863 1,064 (201) 132,273 141,873 (9,600) 9,909 10,344 (435) $ 390,912 $ 402,360 $ (11,448) At year-end, the City's governmental activities had $47.5 million in long-term debts including net pension liability, development fee related obligations, capital lease obligations, other post -employment benefits obligation, and compensated absences, as compared to $64.8 million in the prior year, a net decrease of $17.3 million during the fiscal year. This decrease is primarily due to the defeasance of the 2007 Certificates of Participation which reduced the Governmental Activities long term liabilities by $14.7 million. Please refer to Note 6 for further details on the City's long-term liabilities. 14 Compensated absences Advances from developers Development fee program obligations Capital lease obligations Other post employment benefits obligation Net pension liability Certificates of participation Revenue Bond CJPIA General liability retrospective deposit payable CJPIA Worker's comp retrospective deposit payable 151 20 Bond premium/discount - 26 $ 47,496 $ 64,848 Exhibit E Outstanding Debt at Year -End For Fiscal Year Ended June 30, 2016 and 2015 (in thousands) Governmental Activities 2016 2015 921 $ 879 2,046 2,045 18,275 22,720 9 21 907 814 23,926 22,704 - 14,730 1,261 889 Total Business -Type Activities Total 2016 2015 2016 2015 Change $ 330 $ 313 $ 1,251 $ 1,192 $ 59 - - 2,046 2,045 1 18,275 22,720 (4,445) 9 21 (12) 907 814 93 23,926 22,704 1,222 - 14,730 (14,730) 13,695 15,430 13,695 15,430 (1,735) - - 1,261 889 372 - - 151 20 131 1,474 1,566 1,474 1,592 (118) $ 15,499 $ 17,309 $ 62,995 $ 82,157 $ (19,162) The majority of the obligations under the governmental activities were either pension obligations ($23.9 million) or development related ($18.3 million). The development obligations are owed to developers who had previously installed major infrastructure throughout the City. For the obligations under the business -type activities, the City had $13.7 million in long-term bonded debts which were recorded in the Water utility fund. ECONOMIC FACTORS AND NEXT YEAR'S BUDGET Although the focus of this Annual Report is the economic condition of the City in the fiscal year ended June 30, 2016, in preparing the budget for fiscal year 2016-17, management considered the possible impact that the State of California and the national economies will have on the City's budget. Recent economic data reflects a generally favorable outlook for the U.S. economy. In recent years, the federal government has taken extraordinary steps to stabilize financial markets, encourage economic growth, and keep interest rates low. Inflationary pressures appear contained for now which coupled with continuing strong trends in the labor market may leave the door open for the Federal Reserve to continue normalizing monetary policy in the near future. The State continues to show signs of slow, but improved economic growth, and it is anticipated that this may continue for an extended period of time. In January 2016, the Governor presented his 2016-17 budget proposal stressing fiscal prudence and proper planning for future recessions. Furthermore, the Governor warned that California must not be lulled into a false sense of security by economic recovery. Development activity within the region continues to show signs of improvement and staff expects to see a significant increase in the City development during the next few years. This increase in development will provide for increases in revenue, however, these revenue sources will not be recurring to the General Fund. The overall approach in the development of the fiscal year 2016-17 budget was to maintain expenses while continuing to provide Chino Hills' high level of community safety and customer service. The fiscal year 2016-17 Budget was adopted with an estimated General Fund surplus of $1,879,800. 15 The City of Chino Hills has maintained its strong financial position through prudent, long-range policy decisions and sound fiscal management. The City will continue to monitor key economic indicators, sources of revenues, and spending levels as part of its sound conservative fiscal approach. The success of our City's program and project efforts during the next five years will shape the five-year viability and future of our community. Questions or requests for information regarding the City of Chino Hills' 2016-17 budget should be sent to the Finance Department at the address below. The budget may also be downloaded at the following link: http://www.chinohills.org/DocumentCenterNiew/11464. CONTACTING THE CITY'S FINANCIAL MANAGEMENT This financial report is designed to provide our citizens, taxpayers, customers, investors, and creditors with a general overview of the City of Chino Hills' finances and to show the City's accountability for the money it receives. Questions concerning any of the information provided in this report or requests for additional financial information should be addressed to the City's Finance Department, at the City of Chino Hills, 14000 City Center Drive, Chino Hills, CA 91709. WV i (.rhino Hills This page intentionally left blank. 17 Cit} of Chino Basic Financial Statements i (.rhino Hills This page intentionally left blank. 18 Return to Table of Contents CITY OF CHINO HILLS STATEMENT OF NET POSITION JUNE 30, 2016 Assets: Cash and investments Receivables: Accounts Taxes Long-term receivables Accrued interest Special assessments Internal balances Due from other agencies Due from other governments Contribution due from property owners Investment in joint venture Restricted assets: Cash with fiscal agent Capital assets not being depreciated Capital assets, net of depreciation Total Assets Deferred Outflows of Resources: Deferred charge on refunding Deferred pension related items Total Deferred Outflows of Resources Liabilities: Accounts payable Accrued liabilities Accrued interest Retentions payable Due to developers Unearned revenue Deposits payable Noncurrent liabilities: Net pension liability Net OPEB obligation Due within one year Due in more than one year Total Liabilities Deferred Inflows of Resources: Deferred pension related items Total Deferred Inflows of Resources Net Position: Net investment in capital assets Restricted for: Community development projects Public safety Public works Capital projects Debt service Line of credit Unrestricted Total Net Position See Notes to Financial Statements 19 Primary Government Governmental Business -Type A $ 79,680,346 $ 55,961,277 $ 135,641,623 660,438 3,671,293 4,331,731 2,518,232 - 2,518,232 13,553 - 13,553 11,902 15,193 27,095 69,528 - 69,528 (16,603,279) 16,603,279 - 267,736 - 267,736 2,071,421 - 2,071,421 1,611,346 901,584 2,512,930 - 34,540,041 34,540,041 394,772 2,626,821 3,021,593 40,543,470 8,244,150 48,787,620 237,253,834 104,870,859 342,124,693 348,493,299 227,434,497 575,927,796 - 406,948 406,948 11,283,089 - 11,283,089 11,283,089 406,948 11,690,037 2,795,149 2,128,850 4,923,999 1,061,251 226,814 1,288,065 - 37,563 37,563 85,098 - 85,098 76,471 - 76,471 51,280 1,800,444 1,851,724 23,926,493 - 23,926,493 907,230 - 907,230 504,214 1,796,500 2,300,714 22,158,531 13,702,571 35,861,102 51,565,717 19,692,742 71,258,459 7,477,756 - 7,477,756 7,477,756 - 7,477,756 257,467,380 98,352,645 355,820,025 1,340,598 - 1,340,598 38,599 - 38,599 5,850,669 - 5,850,669 35,252,858 - 35,252,858 - 1,120,375 1,120,375 456,218 - 456,218 326,593 108,675, 683 109,002,276 $ 300,732,915 $ 208,148,703 $ 508,881,618 Return to Table of Contents CITY OF CHINO HILLS STATEMENT OF ACTIVITIES YEAR ENDED JUNE 30, 2016 Total General Revenues and Transfers Change in Net Position Net Position at Beginning of Year Net Position at End of Year See Notes to Financial Statements 20 Program Revenues Operating Capital Charges for Contributions Contributions Expenses Services and Grants and Grants Functions/Programs Primary Government: Governmental Activities: General government $ 7,369,304 $ 10,280,428 $ 27,529 $ 14,235,192 Public safety 12,728,967 497,023 192,009 - Public works 37,789,276 13,245,578 2,572,427 20,058,240 Community development 4,794,309 4,322,080 - - Community services 7,266,899 1,420,515 445,444 - Interest on long-term debt 500,900 - - - Total Governmental Activities 70,449,655 29,765,624 3,237,409 34,293,432 Business -Type Activities: Water Utility 20,647,992 24,113,123 - 46,059 Sewer Utility 8,281,415 6,894,275 - 30,940 Total Business -Type Activities 28,929,407 31,007,398 - 76,999 Total Primary Government $ 99,379,062 $ 60,773,022 $ 3,237,409 $ 34,370,431 General Revenues: Taxes: Property taxes, levied for general purpose Sales taxes Franchise taxes Other taxes Intergovernmental, unrestricted: Motor vehicle in lieu - unrestricted Use of money and property Other Transfers Total General Revenues and Transfers Change in Net Position Net Position at Beginning of Year Net Position at End of Year See Notes to Financial Statements 20 Net (Expenses) Revenues and Changes in Net Position Primary Government Governmental Business -Type Activities Activities Total $ 17,173,845 (12,039,935) (1,913,031) (472,229) (5,400,940) (500,900) (3,153,190) (3,153,190) $ - $ 17,173,845 - (12,039,935) - (1,913,031) - (472,229) - (5,400,940) - (500,900) (3,153,190) 3,511,190 3,511,190 (1,356,200) (1,356,200) 2,154,990 2,154,990 2,154,990 (998,200) 12,028,812 - 12,028,812 7,072,833 - 7,072,833 2,363,758 - 2,363,758 1,734,224 - 1,734,224 31,309 - 31,309 2,244,674 1,418,149 3,662,823 449,255 2,241,768 2,691,023 1,343,147 (1,343,147) - 27,268,012 2,316,770 29,584,782 24,114,822 4,471,760 28,586,582 276,618,093 203,676,943 480,295,036 $ 300,732,915 $ 208,148,703 $ 508,881,618 See Notes to Financial Statements 21 Return to Table of Contents CITY OF CHINO HILLS BALANCE SHEET GOVERNMENTALFUNDS JUNE 30, 2016 Special Revenue Capital Funds Projects Funds Existing Infrastructure Capital General Fees Improvement Assets: Cash and investments $ 36,283,249 $ 1,308,302 $ 752,207 Receivables: Accounts Taxes Long-term receivables Accrued interest Special assessments Due from other agencies Due from other governments Due from developers Due from other funds Advances to other funds Restricted assets: Cash and investments with fiscal agents Total Assets Liabilities, Deferred Inflows of Resources, and Fund Balances: Liabilities: Accounts payable Accrued liabilities Retentions payable Due to other funds Due to developers Unearned revenues Deposits payable Advances from other funds Total Liabilities Deferred Inflows of Resources: Unavailable revenues Total Deferred Inflows of Resources Fund Balances: Nonspendable Restricted Committed Assigned Unassigned Total Fund Balances Total Liabilities, Deferred Inflows of Resources, and Fund Balances See Notes to Financial Statements 22 93,485 - - 2,320,410 - - 13,553 - - 6,159 409 - 267,736 - - 69,548 - - 618,843 992,503 - 1,263,704 - - 752,651 - - $ 41,689,338 $ 2,301,214 $ 752,207 $ 496,684 $ - $ 679,777 904,889 - - 2,381 - 72,430 3,162 53,128 - 2,520 - - 48,181 - - 12,629,417 8,165,220 - 14,087,234 8,218,348 752,207 646,608 - - 646,608 - - 766,204 - - 2,075,168 - - 22,399,767 - - 1,714,357 - - - (5,917,134) - 26,955,496 (5,917,134) - $ 41,689,338 $ 2,301,214 $ 752,207 CITY OF CHINO HILLS BALANCE SHEET GOVERNMENTALFUNDS JUNE 30, 2016 Assets: Cash and investments Receivables: Accounts Taxes Long-term receivables Accrued interest Special assessments Due from other agencies Due from other governments Due from developers Due from other funds Advances to other funds Restricted assets: Cash and investments with fiscal agents Total Assets Liabilities, Deferred Inflows of Resources, and Fund Balances: Liabilities: Accounts payable Accrued liabilities Retentions payable Due to other funds Due to developers Unearned revenues Deposits payable Advances from other funds Total Liabilities Deferred Inflows of Resources: Unavailable revenues Total Deferred Inflows of Resources Fund Balances: Nonspendable Restricted Committed Assigned Unassigned Total Fund Balances Total Liabilities, Deferred Inflows of Resources, and Fund Balances See Notes to Financial Statements 23 Other Total Governmental Governmental Funds Funds $ 37,133,584 $ 75,477,342 566,953 660,438 197,822 2,518,232 - 13,553 4,761 11,329 69,528 69,528 - 267,736 2,001,873 2,071,421 - 1,611,346 53,128 1,316,832 7,043,278 7,795,929 394,772 394,772 $ 47,465,699 $ 92,208,458 $ 1,496,744 $ 2,673,205 97,911 1,002,800 10,287 85,098 1,290,723 1,347,013 73,951 76,471 3,099 51,280 3,620,753 24,415,390 6,593,468 29,651,257 761.108 1.407.716 761,108 1,407,716 - 766,204 40,863,774 42,938,942 - 22,399,767 - 1,714,357 (752,651) (6,669,785) 40,111,123 61,149,485 $ 47,465,699 $ 92,208,458 i (.rhino Hills This page intentionally left blank. 24 Return to Table of Contents CITY OF CHINO HILLS RECONCILIATION OF THE BALANCE SHEET OF GOVERNMENTAL FUNDS TO THE STATEMENT OF NET POSITION JUNE 30, 2016 Fund balances of governmental funds $ 61,149,485 Amounts reported for governmental activities in the statement of net position are different because: Capital assets net of depreciation have not been included as financial resources in governmental fund activity. Capital Assets $ 491,231,740 Accumulated Depreciation (215,161,822) 276,069,918 Governmental funds report all pension contributions as expenditures. However, the net pension liability has a measurement date of June 30, 2015, and pension contributions subsequent to the measurement date are reclassified as deferred 5,528,874 pension contributions Deferred outflows of resources reported are Adjustment due to the changes in the proportions $ 2,055,678 Changes in actuarial assumptions 2,748,928 Differences between proportionate share and actual contributions 949,609 5,754,215 Governmental funds report all OPEB contributions as expenditures, however in the statement of net position any excesses or deficiencies in contributions in relation to the Annual Required Contribution (ARC) are recorded as an asset or liability. (907,230) Long-term debt and compensated absences that have not been included in the governmental fund activity: Long-term liabilities Advances from developers (2,045,626) Development fee program obligation (18,275,018) Equestrian center lease (6) CJPIA General liability retrospective payable (1,260,533) CJPIA Workers' comp liability retrospective payable (151,069) (21,732,252) Compensated absences (883,755) Certain receivables are not available to pay for current period expenditures and therefore, are reported as unavailable revenues in the governmental funds. However, revenues are recorded in the governmental activities. 1,407,716 Governmental funds report all pension contributions as expenditures, however, in the statement of net position, the excess of the plan proportionate share of the total pension liability over the proportionate share of the plan fiduciary net position is reported as a net pension liability. (23,926,493) Deferred inflows of resources reported are: Difference between expected and actual experience 3,975,790 Net difference between the proportionate share of the projected and actual earnings on pension plan investments 1,402,598 Changes in proportion and difference between employer contributions and proportionate share of contributions 2,099,368 (7,477,756) Internal service funds are used by management to charge the costs of certain activities, such as equipment management and information technology, to individual funds. The assets and liabilities of the internal service funds must be added to the statement of net position. 5,750,193 Net Position of Governmental Activities $ 300,732,915 See Notes to Financial Statements 25 Return to Table of Contents CITY OF CHINO HILLS STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES GOVERNMENTAL FUNDS YEAR ENDED JUNE 30, 2016 Expenditures: Current: General government 8,412,559 Special Capital Public safety 12,297,005 Revenue Funds Projects Funds Public works 6,311,479 Existing 3,916,381 Community development 4,666,594 Infrastructure Capital Community services General Fees Improvement Revenues: 98,477 - 5,872,963 Taxes $ 24,194,441 $ - $ - Special assessments - - - Licenses and permits 2,658,148 - - Intergovernmental 42,832 - - Charges for services 14,539,730 - - Developer fees - 6,229,478 - Contribution from property owners - - 919,048 Fines and forfeitures 481,301 - - Contributions 936,614 - - Use of money and property 1,312,835 60,576 - Contribution from other agencies 13,041,538 - - Miscellaneous 1,014,254 324,237 - Total Revenues 58,221,693 6,614,291 919,048 Expenditures: Current: General government 8,412,559 - - Public safety 12,297,005 - - Public works 6,311,479 467,278 3,916,381 Community development 4,666,594 131,800 - Community services 5,500,089 - - Capital outlay 98,477 - 5,872,963 Debt service: Principal retirement 14,760,832 5,036,825 - Interest and fiscal charges 702,970 67,966 - Total Expenditures 52,750,005 5,703,869 9,789,344 Excess (Deficiency) of Revenues Over (Under) Expenditures 5,471,688 910,422 (8,870,296) Other Financing Sources (Uses): Transfers in 72,112 - 8,870,296 Transfers out (699,667) - - Long-term debt issued - 622,481 - Total Other Financing Sources (Uses) Net Change in Fund Balances Fund Balances, Beginning of Year Fund Balances, End of Year See Notes to Financial Statements 26 (627,555) 622,481 8,870,296 4,844,133 1,532,903 - 22,111,363 (7,450,037) - $ 26,955,496 $ (5,917,134) $ - CITY OF CHINO HILLS STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES GOVERNMENTALFUNDS YEAR ENDED JUNE 30, 2016 Revenues: Taxes Special assessments Licenses and permits Intergovernmental Charges for services Developer fees Contribution from property owners Fines and forfeitures Contributions Use of money and property Contribution from other agencies Miscellaneous Total Revenues Expenditures: Current: General government Public safety Public works Community development Community services Capital outlay Debt service: Principal retirement Interest and fiscal charges Total Expenditures Excess (Deficiency) of Revenues Over (Under) Expenditures Other Financing Sources (Uses): Transfers in Transfers out Long-term debt issued Total Other Financing Sources (Uses) Net Change in Fund Balances Fund Balances, Beginning of Year Fund Balances, End of Year See Notes to Financial Statements 27 Other Total Governmental Governmental Funds Funds $ - $ 24,194,441 8,868,555 8,868,555 - 2,658,148 7,850,308 7,893,140 6,342,570 20,882,300 3,899,497 10,128,975 170,427 1,089,475 7,810 489,111 - 936,614 778,763 2,152,174 - 13,041,538 108,045 1,446,536 28,025,975 93,781,007 8,412,559 165,658 12,462,663 16,770,990 27,466,128 2,527 4,800,921 106,780 5,606,869 379,804 6,351,244 - 19,797,657 30,840 801,776 17,456,599 85,699,817 10,569,376 8,081,190 769,355 9,711,763 (7,668,949) (8,368,616) - 622,481 (6,899,594) 1,965,628 3,669,782 10,046,818 36,441,341 51,102,667 $ 40,111,123 $ 61,149,485 Return to Table of Contents 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, 2016 Net change in fund balances - total governmental funds $ 10,046,818 Amounts reported for governmental activities in the statement of activities are different because: Governmental funds report capital outlays as expenditures. However, in the statement of activities, the costs of those assets are allocated over their estimated useful lives as depreciation expense. This is the amount by which depreciation exceeded capital outlays in the current period. Capital outlay $ 6,176,244 Disposition of capital assets (70,238) Depreciation (13,302,296) (7,196,290) The issuance of long-term debt provides current financial resources to governmental funds, while repayment of principal of long-term debt consumes the current financial resources of governmental funds. Neither transaction, however, has any effect on net position. Also, governmental funds report the effect of premiums, discounts and similar items when debt is first issued, whereas these amounts are deferred and amortized in the statement of activities. Debt issued or incurred: Development fee program obligations (622,481) CJPIA General liability retrospective payable (791,651) CJPIA Workers' comp liability retrospective payable (151,069) Principal repayments: Certificates of participation 14,730,000 Equestrian center lease 1 Development fee program obligations 5,067,656 CJPIA General liability retrospective payable 419,696 CJPIA Workers' comp liability retrospective payable 19,580 Bond premium amortization 25,854 18,697,586 Accrued interest for long-term liabilities. This is the net change in accrued interest for the current period. 275,959 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. (41,506) Pension obligation expenses reported in the statement of activities do not require the use of current financial resources and, therefore, are not reported as expenditures in governmental funds. 2,989,014 Governmental funds report all contributions in relation to the annual required contribution (ARC) for OPEB as expenditures, however in the statement of activities only the annual OPEB cost is an expense. (93,058) Some revenues recognized in governmental funds in current year were already recognized in governmental activities in prior year. (717,882) Internal service funds are used by management to charge the costs of certain activities, such as equipment management and information technology, to individual funds. The net revenues (expenses) of the internal service funds is reported with governmental activities. 154,181 Change in Net Position of Governmental Activities $ 24,114,822 See Notes to Financial Statements 28 Return to Table of Contents CITY OF CHINO HILLS STATEMENT OF NET POSITION PROPRIETARY FUNDS JUNE 30, 2016 Assets: Current: Cash and investments Receivables: Accounts Accrued interest Contribution due from property owners Due from other funds Restricted: Cash with fiscal agent Total Current Assets Noncurrent: Advances to other funds Investment in joint venture Capital assets not being depreciated Capital assets - net of accumulated depreciation Total Noncurrent Assets Total Assets Deferred Outflows of Resources: Deferred charge on refunding Business -Type Activities - Enterprise Funds Governmental Activities - Internal Water Utility Sewer Utility Totals Service Funds $ 44,039,641 $ 11,921,636 $ 55,961,277 $ 4,203,004 2,936,075 735,218 3,671,293 - 5,925 9,268 15,193 573 901,584 - 901,584 - 27,989 2,264 30,253 - 2,626,821 - 2,626,821 - 50,538,035 12,668,386 63,206,421 4,203,577 1,790,000 - 1,790,000 - - 16,619,461 16,619,461 - 34, 540, 041 - 34, 540, 041 34,868 8,041,835 202,315 8,244,150 - 85,198,812 19,672, 047 104, 870, 859 1,727,386 127,780,688 36,493,823 164,274,511 1,727,386 178,318,723 49,162,209 227,480,932 5,930,963 406,948 406,948 Total Deferred Outflows of Resources 406,948 - 406,948 - Total Assets and Deferred Outflows of Resources $ 178,725,671 $ 49,162,209 $ 227,887,880 $ 5,930,963 Liabilities and Net Position: Liabilities: Current: Accounts payable Accrued liabilities Accrued interest Deposits payable Due to other funds Compensated absences Capital leases Water revenue bonds Total Current Liabilities Noncurrent: Compensated absences Water revenue bonds Total Noncurrent Liabilities Total Liabilities Net Position: Net investment in capital assets Restricted for debt service Unrestricted Total Net Position $ 1,270,683 $ 858,167 $ 2,128,850 $ 121,944 163,473 63,341 226,814 58,451 37,563 - 37,563 - 1,395,823 404,621 1,800,444 - 72 72 - 5,000 1,500 6,500 2,596 - - - 9,274 1,790,000 - 1,790,000 - 4,662,542 1,327,701 5,990,243 192,265 215,859 107,400 323,259 34,868 13,379,312 - 13,379,312 - 13, 595,171 107,400 13,702,571 34,868 18,257,713 1,435,101 19,692,814 227,133 78,478,283 19,874,362 98,352,645 1,718,112 1,120,375 - 1,120,375 - 80,869,300 27,852,746 108,722,046 3,985,718 160,467,958 47,727,108 208,195,066 5,703,830 Total Liabilities and Net Position $ 178,725,671 $ 49,162,209 $ 227,887,880 $ 5,930,963 Reconciliation of Net Position to the Statement of Net Position Net Position per Statement of Net Position - Proprietary Funds $ 208,195,066 Prior years' accumulated adjustment to reflect the consolidation of internal service funds activities related to the enterprise funds 106,002 Current years' adjustments to reflect the consolidation of internal service activities related to enterprise funds (152,365) Net Position per Statement of Net Position $ 208,148,703 See Notes to Financial Statements 29 Return to Table of Contents CITY OF CHINO HILLS STATEMENT OF REVENUES, EXPENSES AND CHANGES IN FUND NET POSITION PROPRIETARY FUNDS YEAR ENDED JUNE 30, 2016 Operating Revenues: Charges for services Meter installation and fees Other Total Operating Revenues Operating Expenses: Salaries and benefits Professional and contractual services Purchased water Repair and maintenance Service and supplies Administrative and general expenses Utilities Depreciation and amortization Total Operating Expenses Operating Income (Loss) Nonoperating Revenues (Expenses): Interest revenue Interest expense Gain (loss) on joint venture Gain (loss) on disposal of capital assets Total Nonoperating Revenues (Expenses) Income (Loss) Before Transfers and Contributions Capital contributions Transfers out Changes in Net Position Net Position: Beginning of Year Business -Type Activities - Enterprise Funds Water Utility Sewer Utility Totals Governmental Activities - Internal Service Funds $ 24,113,123 $ 6,894,275 $ 31,007,398 $ 2,534,806 106,162 - 106,162 - 2,117,634 28,006 2,145,640 7,968 26,336,919 6,922,281 33,259,200 2,542,774 3,063,238 1,150,236 4,213,474 761,283 469,635 4,621,297 5,090,932 507,204 10,659,692 - 10,659,692 - 819,092 404,424 1,223,516 284,745 256,942 80,432 337,374 189,011 3,402,582 857,923 4,260,505 339,524 683,147 53,329 736,476 2,962 4,346,486 1,058,328 5,404,814 613,497 23,700,814 8,225,969 31,926,783 2,698,226 2,636,105 (1,303,688) 1,332,417 (155,452) 961,728 456,421 1,418,149 92,500 (532,410) - (532,410) (937) 3,682,151 - 3,682,151 - (10,034) - (10,034) - 4,101,435 456,421 4,557,856 91,563 6,737,540 (847,267) 5,890,273 (63,889) 46,059 30,940 76,999 65,705 (1,307,494) (35,653) (1,343,147) - 5,476,105 (851,980) 4,624,125 1,816 154,991,853 48,579,088 203,570,941 5,702,014 End of Fiscal Year $ 160,467,958 $ 47,727,108 $ 208,195,066 $ 5,703,830 Reconciliation of Changes in Net Position to the Statement of Activities: Changes in Net Position, per the Statement of Revenues, Expenses and Changes in Fund Net Position - Proprietary Funds $ 4,624,125 Adjustment to reflect the consolidation of current fiscal year internal service funds activities related to enterprise funds (152,365) Changes in Net Position of Business -Type Activities per Statement of Activities $ 4,471,760 See Notes to Financial Statements 30 Return to Table of Contents CITY OF CHINO HILLS STATEMENT OF CASH FLOWS PROPRIETARY FUNDS YEAR ENDED JUNE 30, 2016 Cash Flows from Operating Activities: Cash received from customers and users Cash paid to suppliers for goods and services Cash paid to employees for services Net Cash Provided (Used) by Operating Activities Cash Flows from Non -Capital Financing Activities: Cash transfers out Cash borrowed due to other funds Cash repayment received due from other funds Advance from other funds Net Cash Provided (Used) by Non -Capital Financing Activities Cash Flows from Capital and Related Financing Activities: Proceeds from capital asset disposals Capital contributions Acquisition and construction of capital assets Principal paid on capital debt Interest paid on capital debt Net Cash Provided (Used) by Capital and Related Financing Activities Cash Flows from Investing Activities: Interest received Net Cash Provided (Used) by Investing Activities Net Increase (Decrease) in Cash and Cash Equivalents Cash and Cash Equivalents at Beginning of Year Cash and Cash Equivalents at End of Year Reconciliation of Operating Income to Net Cash Provided (Used) by Operating Activities: Operating income (loss) Adjustments to reconcile operating income (loss) net cash provided (used) by operating activities: Depreciation (Increase) decrease in accounts receivable (Increase) decrease in due from other agencies Increase (decrease) in accounts payable Increase (decrease) in accrued liabilities Increase (decrease) in deposits payable Increase (decrease) in compensated absences Total Adjustments Net Cash Provided (Used) by Operating Activities Non -Cash Investing, Capital, and Financing Activities: Gain/(loss) on joint venture Amortization of bond premium Amortization of deferred amount on refunding Business -Type Activities - Enterprise Funds Water Utility Sewer Utility Governmental Activities - Internal Totals Service Funds $ 26,236,451 $ 6,836,588 $ 33,073,039 $ 2,567,210 (12,510,506) (5,075,256) (17,585,762) (1,332,189) (6,438,637) (1,989,984) (8,428,621) (1,074,756) 7,287,308 (228,652) 7,058,656 160,265 (1,307,494) (35,653) (1,343,147) 613,497 - (45) (45) 408 1,636 4 1,640 24,028 - 2,049,285 2,049,285 (348,267) (1,305,858) 2,013,591 707,733 25,439 4,464 - 4,464 - 46,059 30,940 76,999 65,705 (1,421,918) (86,050) (1,507,968) (272,930) (1,735,000) (228,652) (1,735,000) (11,429) (485,449) (485,449) (937) (3,591,844) (55,110) (3,646,954) (219,591) 963,180 452,424 1,415,604 92,662 963,180 452,424 1,415,604 92,662 3,352,786 2,182,253 5,535,039 33,336 43,313,676 9,739,383 53,053,059 4,169,668 $ 46,666,462 $ 11,921,636 $ 58,588,098 $ 4,203,004 $ 2,636,105 $ (1,303,688) $ 1,332,417 $ (155,452) 4,346,486 1,058,328 5,404,814 613,497 (133,110) (54,832) (187,942) 408 40,406 40,406 24,028 378,002 (30,861) 347,141 (348,267) 28,718 17,750 46,468 25,439 (7,764) 66,476 58,712 - (1,535) 18,175 16,640 612 4,651,203 1,075,036 5,726,239 315,717 $ 7,287,308 $ (228,652) $ 7,058,656 $ 160,265 $ 3,682,151 $ (92,145) 141,997 See Notes to Financial Statements 31 $ 3,682,151 $ (92,145) 141,997 Return to Table of Contents CITY OF CHINO HILLS STATEMENT OF FIDUCIARY NET POSITION FIDUCIARY FUNDS JUNE 30, 2016 Assets: Pooled cash and investments Receivables: Accounts Accrued interest Special assessments Restricted assets: Cash and investments with fiscal agents Total Assets Liabilities: Accounts payable Deposits payable Funds held for others Due to Inland Empire Utility Agency Total Liabilities See Notes to Financial Statements 32 Agency Funds $ 30,726,935 150 2,818 96,829 6,947,157 $ 37,773,889 $ 971,050 3,381,742 29,035,701 4,385,396 $ 37,773,889 Cit} of Chino Notes to the Financial Statements Chino Hills This page intentionally left blank. 33 Return to Table of Contents CITY OF CHINO HILLS NOTES TO FINANCIAL STATEMENTS JUNE 30, 2016 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, 39 and 61. The blended component units discussed below, although legally separate entities, are in substance part of the government operation and data from these component units has been combined herein. The City of Chino Hills Financing Authority The Chino Hills Financing Authority (Authority) is a joint exercise of powers authority organized and existing under and by virtue of the Joint Exercise of Powers Act, constituting Articles 1 through 4 (commencing with Section 6500) of Chapter 5, Division 7, Title 1 of the Government Code of the State of California. The City pursuant to Resolution No. 04R-16 adopted on January 13, 2004, and the former Chino Hills Redevelopment Agency (Agency) pursuant to Resolution No. CHRA 04-05 adopted on January 13, 2004, formed the Authority by the execution of a joint exercise of powers agreement (Joint Powers Agreement). The Authority is governed by a five -member Board which consists of all members of the City Council. Pursuant to the Marks -Roos Local Bond Pooling Act of 1985, as amended, constituting Article 4 (commencing with Section 6584), of Chapter 5, Division 7, Title 1 of the Government Code of the State, the Authority is authorized, among other things, to issue revenue bonds to provide funds to finance public capital facilities. The Authority's primary source of income will be installment sale, loan and lease payments received from the City which will be used to meet the debt service requirements on debt issues. The Authority does not have taxing power. Separate financial statements for the Authority are not prepared. The Agency was activated by the City Council in 2003. In 2011, the State of California Legislature approved a bill, AB X1 26, pursuant to which all California redevelopment agencies, including the Agency, were dissolved as of February 1, 2012, and certain of the Agency's rights and obligations were transferred to the City acting as the successor agency to the Agency on that date. As a result of the dissolution of the Redevelopment Agency, the City Council formed the Parking Authority to replace the Redevelopment Agency as the other member of the Financing Authority and the other party to the Joint Powers Agreement to ensure the continued existence of the Financing Authority. This action ensures the continued existence of the Financing Authority. 34 CITY OF CHINO HILLS NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2016 Note 1: Organization and Summary of Significant Accounting Policies (Continued) The Parking Authority The Parking Authority was created on August 11, 2015 to replace the Redevelopment Agency as the other member of the Financing Authority and the other party to the Joint Powers Agreement to ensure the continued existence of the Financing Authority. The Parking Authority has the power to transfer, lease, manage or improve property, issue bonds and receive and expend revenues. The City Council will serve as the governing board of the Parking Authority. There was no financial activity during the fiscal year 2015-2016. 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 2015-2016. b. Government—Wide and Fund Financial Statements The government—wide financial statements (i.e., the statement of net position and the statement of activities) report information on all of the nonfiduciary activities of the primary government and its component units. For the most part, the effect of interfund activity has been removed from these statements. Governmental activities, which normally are supported by taxes and intergovernmental revenues, are reported separately from business—type activities, which rely to a significant extent on fees and charges for support. The statement of activities demonstrates the degree to which the direct expenses of a given function or segment are offset by program revenues. Direct expenses are those that are clearly identifiable with a specific function or segment. Program revenues include: 1) charges to customers or applicants who purchase, use or directly benefit from goods, services or privileges provided by a given function or segment, and 2) grants and contributions that are restricted to meeting the operational or capital requirements of a particular function or segment. Taxes and other items not properly included among program revenues are reported instead as general revenues. Separate financial statements are provided for governmental funds, proprietary funds and fiduciary funds, even though the latter are excluded from the government—wide financial statements. Major individual governmental funds and major individual enterprise funds are reported as separate columns in the fund financial statements. 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. 35 CITY OF CHINO HILLS NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2016 Note 1: Organization and Summary of Significant Accounting Policies (Continued) Governmental fund financial statements are reported using the current financial resources measurement focus and the modified accrual basis of accounting. Revenues are recognized as soon as they are both measurable and available. Revenues are considered to be available when they are collectible within the current period or soon enough thereafter to pay liabilities of the current period. For this purpose, the government considers revenues to be available if they are collected within 60 days of the end of the current fiscal period. Expenditures generally are recorded when a liability is incurred, as under accrual accounting. However, debt service expenditures, as well as expenditures related to compensated absences and claims and judgments, are recorded only when payment is due. Property taxes, franchise taxes, licenses and interest associated with the current fiscal period are all considered to be susceptible to accrual and so have been recognized as revenues of the current fiscal period. Only the portion of special assessments receivable due within the current fiscal period is considered to be susceptible to accrual as revenue of the current period. All other revenue items are considered to be measurable and available only when cash is received by the government. The City reports the following major governmental funds: The General Fund is the City's primary operating fund. It accounts for all financial resources of the general government, except those required to be accounted for in another fund. The 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 Capital Improvement Capital Project Fund accounts for the expenditures of construction of various capital improvements projects throughout the City. 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. 0 CITY OF CHINO HILLS NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2016 Note 1: Organization and Summary of Significant Accounting Policies (Continued) 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 Position or Equity Cash and Investments All cash and investments, except those that are held by fiscal agents, are held in a City pool. These pooled funds are available upon demand, and therefore are considered cash and cash equivalents for purposes of the statement of cash flows. Investments held by fiscal agents with an original maturity of three months or less are also considered cash equivalents. Investments for the City are reported at fair value. The City's policy is generally to hold investments until maturity or until market values equal or exceed cost. The State Treasurer's Investment Pool and Counties Treasurer's Investment Pool operate in accordance with appropriate state laws and regulations. The reported value of the pool is the fair value of the pool shares. Receivables and Payables Activity between funds that are representative of lending/borrowing arrangements outstanding at the end of the fiscal year are referred to as either "due to/from other funds," (i.e., the current portion of interfund loans) or "advances to/from other funds" (i.e., the non—current portion of interfund loans). All other outstanding balances between funds are reported as "due to/from other funds." Any residual balances outstanding between the governmental activities and business—type activities are reported in the government—wide financial statements as "internal balances." 37 CITY OF CHINO HILLS NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2016 Note 1: Organization and Summary of Significant Accounting Policies (Continued) Advances between funds, as reported in the fund financial statements, are offset by a fund balance nonspendable account in applicable governmental funds to indicate that they are not available for appropriation and are not expendable available financial resources. All trade and property tax receivables are shown net of an allowance for uncollectibles. Property tax revenue is recognized on the modified accrual basis, that is, in the fiscal year for which the taxes have been levied providing they become available. Available means then due, or past due and receivable within the current period and collected within the current period or expected to be collected soon enough thereafter to be used to pay liabilities of the current period. The County of San Bernardino collects property taxes for the City. Tax liens attach annually as of 12:01 A.M. on the first day in January proceeding the fiscal year for which the taxes are levied. Taxes are levied on both real and personal property as it exists on that date. The tax levy covers the fiscal period July 1 to June 30. All secured personal property taxes and one—half of the taxes on real property are due November 1; the second installment is due February 1. All taxes are delinquent if unpaid on December 10 and April 10, respectively. Unsecured personal property taxes become due on the first of March each year and are delinquent if unpaid on August 31. Net Position Flow Assumption Sometimes the City will fund outlays for a particular purpose from both restricted (e.g., restricted bond or grant proceeds) and unrestricted resources. In order to calculate the amounts to report as restricted — net position and unrestricted — net position in the government -wide and proprietary fund financial statements, a flow assumption must be made about the order in which the resources are considered to be applied. It is the government's policy to consider restricted — net position to have been depleted before unrestricted — net position is applied. Functional Classifications Expenditures of the Governmental Funds are classified by function. Functional classifications are defined as follows: • General Government includes legislative activities that have a primary objective of providing legal and policy guidelines for the City. Also included in this classification are those activities that provide management or support services across more than one functional area. • Public Safety includes those activities that involve the protection of people and property. • Public Works includes those activities that involve the maintenance and improvement of City streets, roads and park development and maintenance. • Community Development includes those activities that involve the enhancing of the general quality of life. • Community Services includes those activities that involve recreation 38 CITY OF CHINO HILLS NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2016 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. 39 CITY OF CHINO HILLS NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2016 Note 1: Organization and Summary of Significant Accounting Policies (Continued) Property, plant and equipment of the primary government, as well as the component units, are depreciated using the straight—line method over the following estimated useful lives: Assets Years Equipment 3-12 Vehicles 4-10 Utility Plant in Service 5-100 Meters 15 Pipeline in Service 30-50 Infrastructure 20-60 Intangible Assets Intangible assets are capitalized at cost, while contributed assets are recorded at fair market value at the time received. Amortization has been provided on a straight—line basis over their estimated useful lives as follows: Assets Years Water Rights Deferred Outflows/Inflows of Resources .e In addition to assets, the statement of financial position and balance sheet will sometimes report a separate section for deferred outflows of resources. This separate financial statement element, deferred outflows of resources, represents a consumption of net position or fund balance that applies to a future period(s) and so will not be recognized as an outflow of resources (expense/ expenditure) until then. The City has two types of items that qualify for reporting in this category. The item, deferred charge on refunding, is reported in the government -wide statement of net position. A deferred charge on refunding results from the difference in the carrying value of refunded debt and its reacquisition price. This amount is deferred and amortized over the shorter of the life of the refunded or refunding debt. The other item is deferred pension related items. In addition to liabilities, the statement of financial position and balance sheet will sometimes report a separate section for deferred inflows of resources. This separate financial statement element, deferred inflows of resources, represents an acquisition of net position or fund balance that applies to a future period(s) and so will not be recognized as an inflow of resources (revenue) until that time. The City has two types of items. The item, unavailable revenue, is reported only in the governmental funds balance sheet. The governmental funds report unavailable revenues from two sources: taxes and intergovernmental revenues. These amounts are deferred and recognized as an inflow of resources in the period that the amounts become available. The other item is deferred pension related items reported in the government -wide statement of net position. 40 CITY OF CHINO HILLS NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2016 Note 1: Organization and Summary of Significant Accounting Policies (Continued) 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, 2016, have been recorded in the General Fund as compensated absences payable. The liability for governmental activity that has not matured at June 30, 2016, is reported on the statement of net position under non—current liabilities. Liabilities relating to proprietary funds are recorded within those respective funds. Net Pension Liabilities For purposes of measuring the net pension liability, deferred outflows of resources, deferred inflows of resources, and pension expense related to pensions, information about the fiduciary net position of the San Bernardino County Employees' Retirement Association (SBCERA) and additions to/deductions from SBCERA's fiduciary net position have been determined on the same basis as they are reported by SBCERA. For this purpose, employer and employee contributions are recognized in the period the related salaries are earned and become measurable pursuant to formal commitments, statutory or contractual requirements, benefit payments (including refunds of employee contributions) are recognized when due and payable in accordance with the benefit terms, and investments are reported at fair value. GASB 68 requires that the reported results must pertain to liability and asset information within certain defined timeframes. For this report, the following timeframes are used. Valuation Date (VD) June 30, 2014 Measurement Date (MD) June 30, 2015 Measurement Period (MP) July 1, 2014 to June 30, 2015 Long—Term Obligations In the government—wide financial statements and proprietary fund types in the fund financial statements, long—term debt and other long—term obligations are reported as liabilities in the applicable governmental activities, business—type activities, or proprietary fund type statement of net position. Bond premiums and discounts are deferred and amortized over the life of the bonds using the effective interest method. Bonds payable are reported net of the applicable bond premium or discount. Bond issuance costs are expensed in the year they are incurred. 41 CITY OF CHINO HILLS NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2016 Note 1: Organization and Summary of Significant Accounting Policies (Continued) In the fund financial statements, governmental fund types recognize bond premiums and discounts, as well as bond issuance costs, during the current period. The face amount of debt issued is reported as other financing sources. Premiums received on debt issuances are reported as other financing sources while discounts on debt issuances are reported as other financing uses. Issuance costs, whether or not withheld from the actual debt proceeds received, are reported as debt service expenditures. Fund Equity The City Council adopted Resolution No. 11 R-21 in conformity with Governmental Accounting Auditing Standards Board (GASB) Statement 54. In the fund financial statements, governmental funds report the following fund balance classifications: Nonspendable include amounts that cannot be spent because they are either (a) not in spendable form or (b) legally or contractually required to be maintained intact. Restricted include amounts that are constrained on the use of resources by either (a) external creditors, grantors, contributors, or laws of regulations of other governments or (b) by law through constitutional provisions or enabling legislation. Committed include amounts that can only be used for specific purposes pursuant to constraints imposed by formal action of the government's highest authority, City Council. The formal action that is required to be taken to establish, modify, or rescind a fund balance commitment is a resolution. Assigned include amounts that are constrained by the government's intent to be used for specific purposes, but are neither restricted nor committed. The City Manager and/or Finance Director is authorized to assign amounts to a specific purpose, which was established by the governing body in resolution. Unassigned include the residual amounts that have not been restricted, committed, or assigned to specific purposes. The General Fund is the only fund that reports a positive unassigned fund balance amount. An individual governmental fund could include nonspendable resources and amounts that are restricted or unrestricted (committed, assigned, or unassigned) or any combination of those classifications. Restricted or unrestricted amounts are to be considered spent when an expenditure is incurred for purposes for which both restricted and unrestricted fund balance is available and committed, assigned, then unassigned amounts are considered to have been spent when an expenditure is incurred for purposes for which amounts in any of those unrestricted fund balance classifications can be used. Stabilization Arrangements A stabilization arrangement has been established through Resolution No. 11 R-21. The stabilization agreement is to be used specifically for expenses associated with the declaration of a state or federal state of emergency or local emergency as defined in City of Chino Hills municipal code section 2.44.020. 42 CITY OF CHINO HILLS NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2016 Note 1: Organization and Summary of Significant Accounting Policies (Continued) Effect of New Accounting Standards During the fiscal year ended June 30, 2016, the City implemented the following Governmental Accounting Standards Board (GASB) standards: GASB Statement No. 72 — Fair Value Measurement and Application. This Statement addresses accounting and financial reporting issues related to fair value measurements. The definition of fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. This Statement provides guidance for determining a fair value measurement for financial reporting purposes. This Statement also provides guidance for applying fair value to certain investments and disclosures related to all fair value measurements. The requirements of this Statement are effective for financial statement for reporting periods beginning after June 15, 2015. II. STEWARDSHIP Note 2: Stewardship, Compliance and Accountability a. 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. b. Deficit Fund Balance At June 30, 2016, the Miscellaneous Grants Fund had a deficit fund balance of $752,651. This deficit will be eliminated with future revenue. c. Budget Budget schedules are not presented for the Tree Mitigation Fund and CFD #10 Fairfield Ranch Fund. III. DETAILED NOTES ON ALL FUNDS Note 3: Cash and Investments At June 30, 2016, cash and investments were reported in the accompanying financial statements as follows: Governmental Business -type Fiduciary Activities Activities Funds Total Cash and Investments $ 79,680,346 $ 55,961,277 $ 30,726,935 $ 166,368,558 Restricted assets: Cash with fiscal agent 394,772 2,626,821 6,947,157 9,968,750 Total Cash and Investments $ 80,075,118 $ 58,588,098 $ 37,674,092 $ 176,337,308 43 CITY OF CHINO HILLS NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2016 Note 3: Cash and Investments (Continued) Cash and investments as of June 30, 2016, consist of the following: Cash on hand $ 3,200 Deposits with financial institutions 2,841,548 Investments 173,492,560 Total Cash and Investments $ 176,337,308 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, 2016, the carrying amount of the City's deposits was $2,844,748 and the bank balance was $2,953,557. The $108,809 difference represents outstanding checks and other reconciling items. The California Government Code requires California banks and savings and loan associations to secure an Agency's deposits by pledging government securities with a value of 110% of an Agency's deposits. California law also allows financial institutions to secure Agency deposits by pledging first trust deed mortgage notes having a value of 150% of an Agency's total deposits. The City Treasurer may waive the collateral requirement for deposits that are fully insured up to $250,000 by the FDIC. The collateral for deposits in federal and state chartered banks is held in safekeeping by an authorized Agent of Depository recognized by the State of California Department of Banking. The collateral for deposits with savings and loan associations is generally held in safekeeping by the Federal Home Loan Bank in San Francisco, California as an Agent of Depository. These securities are physically held in an undivided pool for all California public agency depositors. Under Government Code Section 53655, the placement of securities by a bank or savings and loan association with an "Agent of Depository" has the effect of perfecting the security interest in the name of the local governmental agency. Accordingly, all collateral held by California Agents of Depository is considered to be held for, and in the name of, the local governmental agency. Authorized Investments Under provision of the City's investment policy and in accordance with Section 53601 of the California Government Code, the City may invest in the following types of investments: • Bonds issued by the City • Repurchase Agreements • Registered state warrants or treasury notes or bonds of this State • Bonds, notes or warrants of any local agency within this State • United States treasury notes, bonds, bills or certificates of indebtedness • Obligations of a federal agency or United States government sponsored agency • Negotiable certificates of deposit • Mutual Funds • State and County Investment Pools LI' CITY OF CHINO HILLS NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2016 Note 3: Cash and Investments (Continued) Investment Pool Oversight State of California Local Agency Investment Fund (LAIF) LAIF is overseen by the Local Agency Investment Advisory Board, which consists of five members, in accordance with State statute. The State Treasurer's office audits the fund annually. Los Angeles County Investment Pool The investment section of the County Treasurer's office monitors the pool daily for compliance with the government code and investment guidelines. The Auditor -Controller's Office audits it quarterly for compliance. The Board of Supervisors receives an investment report monthly. The County's Treasury Oversight Committee, which was established by the Board of Supervisors pursuant to the government code, reviews the annual investment policy and investment reports and oversees the portfolio's annual audit. Investment Authorized by Debt Agreements The City has monies held by trustees or fiscal agents pledged to the payment or security of certain bonds and certificates of participation. The California Government Code provides that these monies, in the absence of specific statutory provisions governing the issuance of bonds or certificates, may be invested in accordance with the ordinance, resolutions or indentures specifying the types of investments its trustee or fiscal agents may make. Included in the monies held by trustees or fiscal agents are deposits with various institutions for the payment of long—term debt. GASB Statement No. 31 The City adopted GASB Statement No. 31, Accounting and Financial Reporting for Certain Investments and for External Investment Pools, as of July 1, 1997. GASB Statement No. 31 establishes fair value standards for investments in participating interest earning investment contracts, external investment pools, equity securities, option contracts, stock warrants and stock rights that have readily determinable fair values. Accordingly, the City reports its investments at fair value in the balance sheet. All investment income, including changes in the fair value of investments, is recognized as revenue in the operating statement. Credit Risk The City's investment policy limits investments in medium—term notes (MTN's) to those rated "A" or higher by Standard and Poor's (S&P) or by Moody's. As of June 30, 2016, the City has $46,069,492 of 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, 2016, the City's investments in external investment pools and money market mutual funds are unrated. The US Tresury Notes, FHLB, FHLMC, FFCB, and FNMA are Aaa and AA+ and the US Corporate Notes are A3 to Aaa and A- to AAA, rated by Moody's and S&P, respectively. W CITY OF CHINO HILLS NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2016 Note 3: Cash and Investments (Continued) Custodial Credit Risk The custodial credit risk for deposits is the risk that in the event of the failure of a depository financial institution, a government will not be able to recover deposits or will not be able to recover collateral securities that are in the possession of an outside party. The custodial credit risk for investments is the risk that in the event of the failure of the counterparty to a transaction, a government will not be able to recover the value of investment or collateral securities that are in the possession of an outside party. As of June 30, 2016, none of the City's deposits or investments are exposed to custodial credit risk. Concentration of Credit Risk The City's investment policy imposes restrictions for certain types of investments with any one issuer. In accordance with GASB Statement No. 40, if the City has invested more than 5% of its investments in any one issuer, it is exposed to credit risk. Investments guaranteed by the U.S. government and investments in mutual funds and external investment pools are excluded from this requirement. Investments in any one issuer that represents 5% or more of the City's total investments as of June 30, 2016 are as follows: Interest Rate Risk The City's investment policy limits investment maturities as a means of managing its exposure to fair value losses arising from increasing interest rates. The City's investment policy states that purchases of investments will be restricted to securities with a final stated maturity not to exceed five years. The City has elected to use the segmented time distribution method of disclosure for its interest rate risk. ER Reported Percent of Issuer Investment Type Amount Investments Federal National Mortgage Federal Agency $ 23,290,056 13% Association Securities Federal Home Loan Bank Federal Agency 11,933,958 7% Securities Federal Home Loan Mortgage Federal Agency 17,656,870 10% Corp Securities Interest Rate Risk The City's investment policy limits investment maturities as a means of managing its exposure to fair value losses arising from increasing interest rates. The City's investment policy states that purchases of investments will be restricted to securities with a final stated maturity not to exceed five years. The City has elected to use the segmented time distribution method of disclosure for its interest rate risk. ER CITY OF CHINO HILLS NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2016 Note 3: Cash and Investments (Continued) As of June 30, 2016, the City had the following investments and original maturities: Investment Maturities (in Years) 6 months 6 months 1 year 3 year Fair or less to 1 year to 3 years to 5 years Value I nvestments: Los Angeles County Investment Pool $ 28,592,119 $ - $ - $ - $ 28,592,119 California Local Agency Investment Fund 1,064,782 - - - 1,064,782 Money Market Mutual Funds 18,746 - - - 18,746 Certificate of Deposit - 456,218 - - 456,218 US Corporate Notes 1,401,610 2,151,652 28,467,476 14,048,754 46,069,492 Tennessee Valley Authority - - 2,613,094 - 2,613,094 US Treasury Notes - - 13,690,561 15,945,121 29,635,682 FHLB - 2,258,798 4,847,284 4,827,876 11,933,958 FHLMC - 2,262,938 8,023,477 7,370,455 17,656,870 FFCB 1,857,548 335,245 - - 2,192,793 FNMA - 3,490,550 8,719,049 11,080,457 23,290,056 Investment with Fiscal Agents: Money Market Mutual Funds 9,968,750 - - - 9,968,750 $ 42,903,555 $ 10,955,401 $ 66,360,941 $ 53,272,663 $ 173,492,560 Fair Value Measurement and Application The City categorizes its fair value measurements within the fair value hierarchy established by generally accepted accounting principles. The hierarchy is based on the valuation inputs used to measure the fair value of the asset. Level 1 inputs are quoted prices in active markets for identical assets; Level 2 inputs are significant other observable inputs; Level 3 inputs are significant unobservable inputs." The City has the following recurring fair value measurements as of June 30, 2016: Investments: US Treasury Federal Government Agency Medium -Term Corporate Notes Asset -Backed Securities Certificate of Deposit Money Market Funds LA County Investment Pool Local Agency Investment Fund Total Cash Investments Investments with Fiscal Agents: Money Market Funds Total Investments with Fiscal Agent Total Investments Investments That Are Not Measured June 30, 2016 at Fair Value $ 29,635,711 $ - 57,686,731 - 37,025,789 - 9,043,714 - 456,218 - 18,746 18,746 28,592,119 - 1,064,782 - 163,523,810 18,746 9,968,750 - 9,968,750 - $ 173,492,560 $ 18,746 47 Level 1 2 $ - $ 29,635,711 - 57,686,731 - 37,025,789 - 9,043,714 - 456,218 - 28,592,119 - 1,064,782 - 163,505,064 - 9,968,750 - 9,968,750 $ - $ 173,473,814 CITY OF CHINO HILLS NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2016 Note 4: Interfund Receivable, Payable and Transfers The composition of interfund balances as of June 30, 2016 is as follows: Due To/From Other Funds Due To Other Funds Governmental Funds General Fund Existing Infrastructure Fees Nonmajor Governmental Funds Proprietary Funds Sewer Utility Total Due From Other Funds Governmental Funds Proprietary Funds Nonmajor Governmental General Fund Funds Water Utility Sewer Utility 1,263,704 $ - $ 3,162 $ 53,128 - - 24,755 - 72 2,264 Total $ 3,162 53,128 1,290,723 72 $ 1,263,704 $ 53,128 $ 27,989 $ 2,264 $ 1,347,085 Current interfund balances arise in the normal course of business and are cleared shortly after the end of the fiscal year. Advances To/From Other Funds Advances To Other Funds The General Fund advanced Miscellaneous Grants Fund $752,651 to temporarily eliminate a deficit cash balance resulting from grant reimbursement timing differences. Other Governmental Funds advanced the Existing Infrastructure Fees Fund $7,043,278 pertaining to developer agreements. The Sewer Utility Fund advanced $12,629,417 to the General Fund for the Kline/Maloof properties, the Lennar sales tax reimbursement and the reimbursement of the Existing Infrastructure Fee administrative overhead. In addition, the Sewer Utility Fund advanced $1,121,942 to the Existing Infrastructure Fees Fund for developer related obligations. Lastly, the Sewer Utility Fund advanced various funds a total of $2,868,102 related to the Chino Hills Community Park and the new loans for the Peyton Drive and English Channel improvement projects to the Gas Tax (7360) fund. 48 Governmental Funds Proprietary Funds Other General Governmental Sewer Advances From Other Funds Fund Funds Utility Total Governmental Funds General Fund $ - $ - $ 12,629,417 $ 12,629,417 Existing Infrastructure Fees - 7,043,278 1,121,942 8,165,220 Other Governmental Funds 752,651 - 2,868,102 3,620,753 Total $ 752,651 $ 7,043,278 $ 16,619,461 $ 24,415,390 The General Fund advanced Miscellaneous Grants Fund $752,651 to temporarily eliminate a deficit cash balance resulting from grant reimbursement timing differences. Other Governmental Funds advanced the Existing Infrastructure Fees Fund $7,043,278 pertaining to developer agreements. The Sewer Utility Fund advanced $12,629,417 to the General Fund for the Kline/Maloof properties, the Lennar sales tax reimbursement and the reimbursement of the Existing Infrastructure Fee administrative overhead. In addition, the Sewer Utility Fund advanced $1,121,942 to the Existing Infrastructure Fees Fund for developer related obligations. Lastly, the Sewer Utility Fund advanced various funds a total of $2,868,102 related to the Chino Hills Community Park and the new loans for the Peyton Drive and English Channel improvement projects to the Gas Tax (7360) fund. 48 CITY OF CHINO HILLS NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2016 Note 4: Interfund Receivable, Payable and Transfers (Continued) Interfund Transfers Transfers Out Governmental Funds Proprietary Funds Water Sewer General Nonmajor Utility Utility Transfers In Fund Governmental Fund Fund Total Governmental Funds General Fund $ - $ 72,112 $ - $ - $ 72,112 Capital Improvement 92,517 7,434,632 1,307,494 35,653 8,870,296 Nonmajor Governmental Funds 607,150 162,205 - - 769,355 Total $ 699,667 $ 7,668,949 $ 1,307,494 $ 35,653 $ 9,711,763 The transfers to the General Fund of $72,712 is a transfer from the Miscellaneous Grants Fund for various grant related programs. Transfers totaling $7,527,149 to the Capital Improvement Fund were related to various capital improvement projects. The transfer out of the General Fund totaling $607,150 can be attributed to a transfer to the Landscape and Lighting District, to pay for General Fund obligations and subsidies to cover operations in various Landscape and Lighting Districts. Lastly, the transfer of $162,205 from the Nonmajor Governmental Funds (Miscellaneous Grants Fund) to Nonmajor Governmental Funds (Traffic Facilities Fees Fund) was to reimburse the Traffic Facilities Fees fund for San Bernardino Associated Governments' expenditures. Transfers totaling $1,343,147 to the Capital Improvement Fund, from the Water and Sewer Utility funds were related to various capital improvement projects. EEO CITY OF CHINO HILLS NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2016 Note 5: Capital Assets Capital asset activity for the year ended June 30, 2016, was as follows: 50 Beginning Ending Balance Transfers Increases Decreases Balance Governmental activities: Capital assets, not being depreciated: Land $ 26,693,498 $ - $ - $ - $ 26,693,498 Construction -in -progress 8,109,837 (175,000) 5,915,135 - 13,849,972 Total capital assets, not being depreciated 34,803,335 (175,000) 5,915,135 - 40,543,470 Capital assets, being depreciated: Buildings 105,248,490 - 150,908 2,401,403 102,997,995 Structures other than buildings 31,943,220 - 37,800 - 31,981,020 Equipment 5,109,258 - 245,923 - 5,355,181 Vehicles 5,227,192 - 99,408 - 5,326,600 Pipeline in service 217,375 - - - 217,375 Infrastructure 312,735,101 175,000 - - 312,910,101 Total capital assets, being depreciated 460,480,636 175,000 534,039 2,401,403 458,788,272 Less accumulated depreciation: Buildings 18,903,732 - 2,255,380 2,331,165 18,827,947 Structures other than buildings 12,976,845 - 1,116,705 - 14,093,550 Equipment 2,985,025 - 463,961 - 3,448,986 Vehicles 4,163,327 - 300,975 - 4,464,302 Pipeline in service 58,691 - 4,348 - 63,039 Infrastructure 170,862,190 - 9,774,424 - 180,636,614 Total accumulated depreciation 209,949,810 - 13,915,793 2,331,165 221,534,438 Total capital assets, being depreciated, net 250,530,826 175,000 (13,381,754) 70,238 237,253,834 Governmental activities capital assets, net $ 285,334,161 $ - $ (7,466,619) $ 70,238 $ 277,797,304 50 CITY OF CHINO HILLS NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2016 Note 5: Capital Assets (Continued) $ 1,327,251 Community services 1,671,086 Beginning 1,982 Ending Balance Increases Decreases Balance Business -type activities: 520,980 Information technology Capital assets, not being depreciated: $ 13,915,793 Business -Type Activities: Land $ 3,395,256 $ - $ - $ 3,395,256 Easements 537,940 - - 537,940 Construction -in -progress 2,930,841 1,380,113 - 4,310,954 Total capital assets, not being depreciated 6,864,037 1,380,113 - 8,244,150 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 36,026,336 - - 36,026,336 Pipeline in service 138,592,103 35,155 - 138,627,258 Meters 7,037,988 82,915 124,158 6,996,745 Equipment 700,444 9,785 - 710,229 Intangible assets - utility rights 17,410,863 - - 17,410,863 Total capital assets, being depreciated 201,100,518 127,855 124,158 201,104,215 Less accumulated depreciation: Buildings and improvements 594,388 30,409 - 624,797 Structure other than building 137,072 10,067 - 147,139 Utility plant in service 16,261,558 960,253 - 17,221,811 Pipeline in service 63,339,783 3,445,872 - 66,785,655 Meters 3,161,256 448,132 109,660 3,499,728 Equipment 377,640 74,808 - 452,448 Intangible assets - utility rights 7,066,505 435,273 - 7,501,778 Total accumulated depreciation 90,938,202 5,404,814 109,660 96,233,356 Total capital assets, being depreciated, net 110,162,316 (5,276,959) 14,498 104,870,859 Business -type activities capital assets, net $ 117,026,353 $ (3,896,846) $ 14,498 $ 113,115,009 Depreciation and amortization expense was charged to functions/programs of the primary government as follows: Governmental Activities General government $ 1,327,251 Community services 1,671,086 Community development 1,982 Public safety 266,895 Public works 10,035,082 Equipment maintenance 520,980 Information technology 92,517 $ 13,915,793 Business -Type Activities: Water utility $ 4,346,486 Sewer utility 1,058,328 $ 5,404,814 51 CITY OF CHINO HILLS NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2016 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, 2016: Long-term debt repayments per governmental funds financial statements $ 19,797,657 Other post employment benefits obligations payments 13,173 Net pension liability 3,596,438 CJPIA general liability restrospective deposit payable 419,696 CJPIA worker's compensation retrospective deposit payable 19,580 Compensated absences payouts 2,378 Capital lease obligations reported in the internal service funds 11,429 Total Deletions per Changes in Long -Term Debt Schedule $ 23,860,351 52 Balance at Balance at Due Within July 1, 2015 Additions Deletions June 30, 2016 One Year Civic Center COP $ 14,730,000 $ - $ 14,730,000 $ - $ - Advances from developers 2,045,626 - - 2,045,626 - Development fee program obligations 22,720,193 622,481 5,067,656 18,275,018 - Capital Lease obligations 20,703 - 11,429 9,274 9,274 Equestrian Center lease 7 - 1 6 1 Other post employment benefits obligations 814,172 106,231 13,173 907,230 - CJPIA General liability retrospective deposit payable 888,578 791,651 419,696 1,260,533 315,592 CJPIA workers' comp retrospective deposit payable 19,580 151,069 19,580 151,069 - Net pension liability 22,704,424 4,818,507 3,596,438 23,926,493 - Compensated absences 879,101 44,496 2,378 921,219 179,347 Total 64,822,384 $ 6,534,435 $ 23,860,351 47,496,468 $ 504,214 Unamortized Bond Premium 25,854 $ - $ 25,854 - Total Long -Term Debt $ 64,848,238 $ 47,496,468 Long-term debt repayments per governmental funds financial statements $ 19,797,657 Other post employment benefits obligations payments 13,173 Net pension liability 3,596,438 CJPIA general liability restrospective deposit payable 419,696 CJPIA worker's compensation retrospective deposit payable 19,580 Compensated absences payouts 2,378 Capital lease obligations reported in the internal service funds 11,429 Total Deletions per Changes in Long -Term Debt Schedule $ 23,860,351 52 CITY OF CHINO HILLS NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2016 Note 6: Long -Term Debt (Continued) Certificates of Participation 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. On May 10, 2011, the City Council approved a prepayment of the English Channel portion of this bond. $1,965,000 was paid in full to reduce total debt service payments over the next 25 years by $7,979,887. On January 28, 2014 the City Council approved a principal prepayment in the amount of $2,435,000 related to the Peyton Drive portion of the bond. By prepaying this portion of the Certificates the City will save over $1.6 million in interest costs over the remaining life of the original financing, which matures in 2036. On October 6, 2015 the Certificates were prepaid with the 2015 Community Facilities District Bond Program, Series C and defeased the Certificates of Participation in its entirety. Advances From Developers Advances from developers for the Chino Hills Parkway Phasing Plan represent monies owed to developers for development fees collected in advance. Future development fees will be used to reimburse developers for their cost. There is no fixed repayment schedule. $ 2,045,626 Development Fee Program Obligations The City has executed many agreements/programs with outside developers requiring developers to provide funding up -front for the costs of backbone infrastructure (major thoroughfares, water and sewer mains, etc.) concurrent with the development of their residential and commercial projects. These agreements/programs include Facilities Development Fee Program, Facilities Benefit Assessment Program, Existing Infrastructure Fee Reimbursement Agreements, and Assessment District Credit agreements. This up -front funding is generally in the form of the developer constructing the backbone infrastructure. Future development fees will be used to reimburse the developers (either as credits against fees owed or cash reimbursements if not fully credited) for their costs. A liability has been recorded for the project costs incurred to date. There is no fixed repayment schedule. $ 18,275,018 53 CITY OF CHINO HILLS NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2016 Note 6: Long -Term Debt (Continued) Capital Lease Obligations The City entered into a five year lease purchase agreement in fiscal year 2011-2012 for copiers. The assets acquired and the related obligation are reported in the Information Technology internal service fund. $ 9,274 Governmental Activities Equipment $ 53,187 Less: accumulated depreciation 47,868 $ 101,055 The future minimum lease obligations and the net present value of these minimum lease payments are as follows: Governmental Year Ending June 30, Activities 2017 $ 9,516 Total minimum lease payments 9,516 Less: amount representing interest (242) Present value of minimum lease payment $ 9,274 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. $ 6 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. $ 907,230 California Joint Powers Insurance Authority General Liability and Workers' Comp Retrospective Deposit Payable The City of Chino Hills is a member of the California Joint Powers Insurance Authority (CJPIA). The purpose of CJPIA is to arrange and administer programs for the pooling of self-insured losses, to purchase excess insurance or reinsurance, and to arrange for group purchased insurance for property and other lines of coverage. Retrospective deposits and refunds are cost allocation adjustments to prior coverage 54 CITY OF CHINO HILLS NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2016 Note 6: Long -Term Debt (Continued) periods. Some claims take many years to resolve and over time their estimated value changes. The retrospective adjustments are calculated annually and take into consideration all the changes in claim values that occurred during the most recent year. The formula is designed to adequately cover the cost of claims brought against members and to ensure the overall financial strength and security of the Authority. The formula was developed to be as equitable as possible by taking into consideration both risk exposure and claims experience of individual members. The City is currently paying the Liability program retrospective deposit due in installments over a 6 year period. In fiscal year 2015-16 the City paid the third installment in the amount of $345,150. Retrospective Balances will Change Annually Retrospective balances will change with each annual computation during the payment deferral period. Member balances may increase or decrease as a result of the most recent year's claim development. More information on the CJPIA retrospective balances can be found on the CJ PIA website at CJPIA.org. The balance due for the general liability retrospective deposit payable was $ 1,260,533 The balance due for the workers' compensation retrospective deposit payable was Net Pension Liability The City's policies relating to net pension liability are described in Note 7 of the Notes to Financial Statements. The balance as of June 30, 2016 was 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. 55 $ 151,069 $ 23,926,493 $ 921,219 CITY OF CHINO HILLS NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2016 Note 6: Long -Term Debt (Continued) b. Business Type Activities The following is a summary of changes in Proprietary Funds debt for the year ended June 30, 2016: Balance at Balance at Due Within July 1, 2015 Additions Deletions June 30, 2016 One Year Revenue bonds $ 15,430,000 $ - $ 1,735,000 $ 13,695,000 $ 1,790,000 Compensated absences 313,119 18,175 1,535 329,759 6,500 Total 15,743,119 $ 18,175 $ 1,736,535 14,024,759 $ 1,796,500 Unamortized bond premium 1,566,457 $ - $ 92,145 1,474,312 Total Long -Term Debt $ 17,309,576 $ 15,499,071 Water Revenue Bond On December 18, 2012, the City issued $19,975,000 in Water Revenue Bonds to advance refund the $9,205,000 of outstanding 2002 Certificates of Participation and $8,190,000 of 2003 Certificates of Participation and for acquisition of certain water improvements. The bonds consist of serial bonds maturing in principal amounts ranging from $555,000 to $1,860,000 beginning June 2013 through June 2030, with interest rates ranging from 1.50% to 4.00%. The bonds also include term bonds due June 1, 2032 of $1,430,000 and an interest rate of 3.00%. Proceeds of $17,635,146 were used to purchase U.S. government securities. Those securities were deposited in an irrevocable trust with an escrow agent to provide for all future debt service payments on the 1984 Series bonds. As a result, the 2002 and 2003 Certificates of Participation are considered to be defeased and the liability for those bonds has been removed from the government - wide statement of net position. The advance refunding resulted in a difference between the reacquisition price and the net carrying amount of the old debt of $958,631. This difference, reported in the accompanying financial statements as a deferred charge on refunding, is being charged to operations through the year 2032. The City completed the advance refunding to reduce its total debt service payments over the next 20 years by $4,060,363 and to obtain an economic gain (difference between the present values of the old and new debt service payments) of $3,436,837. $ 13,695,000 62 CITY OF CHINO HILLS NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2016 Note 6: Long -Term Debt (Continued) The annual requirements to amortize the Water Revenue Bond outstanding as of June 30, 2016 were as follows: Year ending June 30, Principal Interest 2017 $1,790,000 $450,750 2018 1,860,000 379,150 2019 905,000 304,750 2020 915,000 291,175 2021 940,000 277,450 2021 -2026 3,260,000 931,750 2026-2031 3,300,000 412,050 2031 -2032 725,000 21,750 Totals $ 13,695,000 $ 3,068,825 Pledged Revenues The City has pledged income derived from the fees and charges to users of the enterprise operation of the water system, net of operating expenses, to pay debt service on revenue bonds. The City pledged $19,975,000 in utility revenues through the term of the commitment which concludes on June 1, 2032. The percent of the revenue pledged is 100%. The 2015-16 principal and interest for the revenue bonds was $2,220,450 and the pledged revenues recognized for at June 30, 2016 was $2,220,450. The outstanding principal and interest amounts of the revenue bonds at June 30, 2016 was $13,695,000 and $3,068,825, respectively. A reserve fund in the amount of a $1,120,375 was established with a fiscal agent for benefit of the City and as security for the bond owners. Since the City is not at -risk for the installment sale payments and the bonds are to be repaid from resources generated by the Water Enterprise Fund, the bonds are recorded as long-term debt in the Water Enterprise Fund. Standard & Poor's Bond Rating Change On June 6, 2016 Standard & Poor's upgraded the rating on the Water Revenue Bonds from AA- to AA+. 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. $ 329,759 57 CITY OF CHINO HILLS NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2016 Note 6: Long -Term Debt (Continued) c. Assessment District and Community Facilities District Bond Issues Excluded from the liabilities are special assessment and special tax bonds related to various special assessment districts and community facilities districts included within the City. The City acts as an agent for the property owners benefited by the projects financed from the bond proceeds in collecting the assessments and taxes, forwarding the collections to bond holders, and initiating foreclosure proceedings, if appropriate. Neither the faith and credit nor the taxing power of the City is pledged to the payment of the bonds, and the City is not legally obligated for payment of the bonds. Total non -obligation debt at June 30, 2016, is $48,115,000. The debt outstanding at June 30, 2016, consists of the following individual issues: 2006 $49,660,000 Community Facilities District Bond Program to finance the Community Facilities share of the Government Center. Serial Series B bonds due in annual installments of $1,050,000 to $4,680,000 through September 1, 2026; interest ranging from 3.625% to 4.375% additionally, $1,295,000 term bonds due September 1, 2030; interest rates varying from 4.400% to 4.5000%. $ 21,875,000 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%. $ 10,385,000 2011 $4,915,000 Community Facilities District No. 9 (Rincon Village Area) Special Tax Refunding Bonds, refunded the 1998 $14,860,000 Community Facilities District No. 9, Special Tax Bonds. The 2011 refunding bonds include serial bonds due in annual installments of $70,000 to $615,000 through September 2021; interest ranging from 1.250% to 5.125%. $ 2,785,000 Reassessment District No. 10-1; The City issued bonds for $3,505,000 on August 5, 2010 for the refinance of Reassessment District 1995. The serial bonds are due in annual installments of $265,000 to $390,000 through September 21, 2021, with an interest rate of 2.00% to 5.32%. $ 1,875,000 2015 $11,195,000 Community Facilities District Bond Program, Series C prepaid the City's 2007 Civic Center Certificates of Participation. The serial bonds are due in annual installments of $465,000 to $750,000 through September 1, 2030; interest ranging 2.00% to 5.00% additionally, $1,375,000 term bonds due September 1, 2028, $1,260,000 term bonds due September 1, 2032, and $895,000 term bonds due September 1, 2034, with interest rates rate of 5.00%. $ 11,195,000 58 CITY OF CHINO HILLS NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2016 Note 7: Pension Plan Defined Benefit Pension Plans a. San Bernardino County Employees' Retirement Association Plan Description The City participates in the San Bernardino County Employees' Retirement Association (SBCERA) pension plan - a cost-sharing multiple -employer defined benefit pension plan (the Plan). SBCERA administers the Plan which provides benefits for two membership classifications, General and Safety, and those benefits are tiered based upon date of SBCERA membership. The City of Chino Hills members are classified as General members. Generally, those who become members prior to January 1, 2013 are Tier 1 members. All other members are Tier 2. An employee who is appointed to a regular position, whose service is greater than fifty percent of the full standard of hours required are members of SBCERA, and are provided with pension benefits pursuant to Plan requirements. Tier 1 is closed to new entrants. The Plan operates under the provisions of the California County Employees' Retirement Law of 1937 (CERL), the California Public Employees' Pension Reform Act of 2013 (PEPRA), and the regulations, procedures and policies adopted by SBCERA's Board of Retirement (Board). The Plan's authority to establish and amend the benefit terms are set by the CERL and PEPRA, and may be amended by the California state legislature and in some cases require approval by the County of San Bernardino Board of Supervisors and/or the SBCERA Board. SBCERA is a tax qualified plan under Section 401 (a) of the Internal Revenue Code. SBCERA is a legally separate entity from the City, not a component unit, and there is no financial interdependency with the County of San Bernardino. For these reasons, the City's comprehensive annual financial report excludes the SBCERA pension plan as of June 30, 2016. SBCERA publishes its own comprehensive annual financial report that includes its financial statements and required supplementary information, that can be obtained by writing SBCERA at, 348 W. Hospitality Lane, Third Floor, San Bernardino, CA 92415-0014 or visiting the website at: www.SBCERA.org. Benefits Provided SBCERA provides retirement, disability, death and survivor benefits. The CERL and PEPRA establish benefit terms. Retirement benefits are calculated on the basis of age, average final compensation and service credit as follows: 59 CITY OF CHINO HILLS NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2016 Note 7: Pension Plan (Continued) Final Average Compensation Normal Retirement Age Early Retirement: Years of service required and/or age eligible for General - Tier 1 General - Tier 2 Highest 12 months Age 55 Age 70 any years 10 years age 50 30 years any age Highest 12 months Age 55 Age 70 any years 5 years age 52 N/A Benefit percent per year of service 2.0% per year of final 3.0% per year of final for normal retirement age average compensation for average compensation for every year of service credit every year of service credit Benefit adjustments Final Average Compensation Lim itation Required employee contribution rates Required employer contribution rates Reduced before age 55, increased after 55 up to age 65 Internal Revenue Code section 401(a)(17) 7.07% - 13.52% 33.31% Reduce before age 67 Government Code 7522.10 6.37% - 7.88% 29.77% An automatic cost of living adjustment is provided to benefit recipients based on changes in the local region Consumer Price Index (CPI) up to a maximum of 2% per year. Any increase greater than 2% is banked and may be used in years where the CPI is less than 2%. There is a one-time 7% increase at retirement for members hired before August 19, 1975. The Plan also provides disability and death benefits to eligible members and their beneficiaries, respectively. For retired members, the death benefit is determined by the retirement benefit option chosen. For all other members, the beneficiary is entitled to benefits based on the members years of service or if the death was caused by employment. General members are also eligible for survivor benefits which are payable upon a member's death. Contributions The City and active members are required by statute to contribute a percentage of covered salary to the Plan. This requirement is pursuant to Government Code sections 31453.5 and 31454, for participating employers and Government Code sections 31621.6, 31639.25 and 7522.30 for active members. The contribution requirements are established and may be amended by the SBCERA Board pursuant to Article 1 of the CERL, which is consistent with the Plan's actuarial funding policy. The contribution rates are adopted yearly, based on an annual actuarial valuation, conducted by an independent actuary, that requires actuarial assumptions with regard to mortality, expected future service (including age at entry into the Plan, if applicable and tier), and compensation increases of the members and beneficiaries. The combined active member and employer contribution rates are expected to I- CITY OF CHINO HILLS NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2016 Note 7: Pension Plan (Continued) finance the costs of benefits for employees that are allocated during the year, with an additional amount to finance any unfunded accrued liability. The City may pay a portion of the active members' contributions through negotiations and bargaining agreements. The required employer contributions and the amount paid to SBCERA by the City for the year ended June 30, 2016 were $4,546,047. The City's employer contributions were equal to the required employer contributions for the year ended June 30, 2016. Pension Liability At June 30, 2016, City reported a net pension liability of $23,926,493 for its proportionate share of the SBCERA's net pension liability. The net pension liability was measured as of June 30, 2015, and the total pension liability used to calculate the net pension liability was determined by an actuarial valuation as of June 30, 2015. The SBCERA's publicly available financial report provides details on the change in the net pension liability. The City's proportion of the net pension liability was based on the City's contributions received by SBCERA during the measurement period for employer payroll paid dates from July 1, 2014 through June 30, 2015, relative to the total employer contributions received from all of SBCERA's participating employers. At June 30, 2015, the City's proportion was 1.232%. Pension Expense and Deferred Outflows/Inflows of Resources For the year ended June 30, 2016, the City recognized pension expense of $2,539,860 for its proportionate share of SBCERA's pension expense. At June 30, 2016, the City reported its proportionate share of deferred outflows of resources and deferred inflows of resources related to pensions, from the following sources: 61 CITY OF CHINO HILLS NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2016 Note 7: Pension Plan (Continued) Deferred Outflows Deferred Inflows Employer contributions paid to SBCERA subsequent to the measurement date 5,528,874 - Total $ 11,283,089 $ 7,477,766 The $5,528,874 reported as deferred outflows of resources related to pensions resulting from City contributions to SBCERA subsequent to the measurement date will be recognized as a reduction of the net pension liability in the year ended June 30, 2016. Other amounts reported as deferred outflows of resources and deferred inflows of resources related to SBCERA pensions will be recognized in pension expense as follows: Year ended June 30 2017 $ (1,032,559) 2018 (1,032,559) 2019 34,307 2020 648,224 2021 (354,339) Thereafter 13,385 C.% of Resources of Resources Difference between expected and actuarial experience $ - $ 3,975,790 Changes actuarial assumptions 2,748,928 - Net difference between projected and actual earning on pension plan investments - 1,402,598 Changes in proportion 2,055,678 2,099,368 Difference between proportionate share and actual contributions 949,609 - Employer contributions paid to SBCERA subsequent to the measurement date 5,528,874 - Total $ 11,283,089 $ 7,477,766 The $5,528,874 reported as deferred outflows of resources related to pensions resulting from City contributions to SBCERA subsequent to the measurement date will be recognized as a reduction of the net pension liability in the year ended June 30, 2016. Other amounts reported as deferred outflows of resources and deferred inflows of resources related to SBCERA pensions will be recognized in pension expense as follows: Year ended June 30 2017 $ (1,032,559) 2018 (1,032,559) 2019 34,307 2020 648,224 2021 (354,339) Thereafter 13,385 C.% CITY OF CHINO HILLS NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2016 Note 7: Pension Plan (Continued) Actuarial assumptions and methods The significant actuarial assumptions and methods used to measure the total pension liability are as follows: Actuarial valuation date Actuarial cost method Amortization method Investment rate of return Inflation Projected salary increases Administrative expenses June 30, 2015 Entry age normal Level percent of payroll (3.75% payroll growth assumed) 7.5% 3.25% General: 4.60% to 13.75%; Safety: 4.55% to 13.75% 0.60% of payroll For General and Safety employees post-retirement mortality is based on the RP -2000 Combined Healthy Mortality Tables projected with Scale BB to 2020. The actuarial assumptions used in the June 30, 2015 valuation were based on the results of an actuarial experience study for the three year period of July 1, 2010 — June 30, 2013. The June 30, 2015 actuarial valuation reflected new assumptions compared to the June 30, 2014 actuarial valuation, based on the June 30, 2015 experience study. The long-term expected rate of return on pension plan investments is 7.50%. SBCERA's actuary prepares an analysis of the long-term expected rate of return on a triennial basis using a building-block method in which expected future real rates of return (expected returns, net of inflation) are developed for each major asset class. These returns are combined to produce the long-term expected rate of return by weighting the expected future real rates of return by the target asset allocation percentage by adding expected inflation and subtracting expected investment expenses and a risk margin. The target allocations (approved by the SBCERA Board) and projected arithmetic real rates of return for each major asset class, after deducting inflation, but before deducting investment expenses, used in the derivation of the long term expected investment rate of return assumptions are summarized in the following table: 63 CITY OF CHINO HILLS NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2016 Note 7: Pension Plan (Continued) SBCERA's Long -Term Expected Real Rate of Return Discount rate The discount rate used to measure the total pension liability was 7.50%. The projection of cash flows used to determine the discount rate assumed that employee and employer contributions will be made based on the actuarially determined rates based on the SBCERA Board's funding policy, which establishes the contractually required rate based on statute. Based on those assumptions, the pension plan's fiduciary net position was projected to be available to make all projected future benefit payments of current active and inactive plan members. Therefore, the long-term expected rate of return on pension plan investments was applied to all periods of projected benefit payments to determine the total pension liability. For the actuarial valuation date of June 30, 2015, the discount rate used to measure the total pension liability as of the year ended June 30, 2015 was 7.5%. Sensitivity of the City's proportionate share of the SBCERA net pension liability to changes in the discount rate. The following table presents the City's proportionate share of the net pension liability calculated using the discount rate of 7.50%, as well as what the City's proportionate share of the net pension liability would be if it were calculated using a discount rate that is 1 -percentage -point lower (6.50%) or 1 -percentage -point higher (8.50%) than the current rate: 64 As of June 30, 2015 Valuation Date Long -Term Expected Real Target Rate of Return Asset Class Allocation (Arithmetic) Large Cap U.S. Equity 5.00% 5.94% Small Cap U.S. Equity 2.00% 6.50% Developed International Equity 6.00% 6.87% Emerging Market Equity 6.00% 8.06% U.S. Core Fixed Income 2.00% 0.69% High Yield/Credit Strategies 13.00% 3.10% Global Core Fixed Income 1.00% 0.30% Emerging Market Debt 6.00% 4.16% Real Estate 9.00% 4.96% Cash & Equivalents 2.00% -0.30% International Credit 10.00% 6.76% Absolute Return 13.00% 2.88% Real Assets 6.00% 6.85% Long/Short Equity 3.00% 4.86% Private Equity 16.00% 9.64% Total 100.00% Discount rate The discount rate used to measure the total pension liability was 7.50%. The projection of cash flows used to determine the discount rate assumed that employee and employer contributions will be made based on the actuarially determined rates based on the SBCERA Board's funding policy, which establishes the contractually required rate based on statute. Based on those assumptions, the pension plan's fiduciary net position was projected to be available to make all projected future benefit payments of current active and inactive plan members. Therefore, the long-term expected rate of return on pension plan investments was applied to all periods of projected benefit payments to determine the total pension liability. For the actuarial valuation date of June 30, 2015, the discount rate used to measure the total pension liability as of the year ended June 30, 2015 was 7.5%. Sensitivity of the City's proportionate share of the SBCERA net pension liability to changes in the discount rate. The following table presents the City's proportionate share of the net pension liability calculated using the discount rate of 7.50%, as well as what the City's proportionate share of the net pension liability would be if it were calculated using a discount rate that is 1 -percentage -point lower (6.50%) or 1 -percentage -point higher (8.50%) than the current rate: 64 CITY OF CHINO HILLS NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2016 Note 7: Pension Plan (Continued) Sensitivity of Net Pension Liability to Changes in the Discount Rate Pension Plan Fiduciary Net Position Detailed information about the SBCERA's fiduciary net position is available in a separately issued SBCERA comprehensive annual financial report. That report may be obtained on the Internet at www.SBCERA.org; by writing to SBCERA at 348 W. Hospitality Lane, Third Floor, San Bernardino, CA 92415; or by calling (909) 885-7980 or (877) 722-3721. Note 8: Other Post -Employment Employee Benefits Plan Description The City has established the City of Chino Hills Retiree Healthcare Plan, a single -employer defined benefit healthcare plan. The plan provides postretirement healthcare benefits to eligible employees who retire from the City under the San Bernardino County Employee's Retirement Association (SBCERA) and who elect a CaIPERS Health Plan (PEMHCA). The City pays the PEMHCA minimum employer contribution using the unequal method of $101.15 per month for the months in 2015 and $109.80 per month for the months in 2016. The retiree pays the remainder of the PEMHCA premium. The City does not provide contributions for retiree dental, vision, or life insurance benefits. Funding Policy Currently, the City funds retiree healthcare benefits on a pay-as-you-go basis, paying for retiree benefits from the City's General Fund, the Water Utility Fund and the Equipment Maintenance Fund as they are due with no pre -funding for future years. For fiscal year 2015-2016, the City paid $13,173 for benefits of 11 retired employees. C� 1.00% Current 1.00% Decrease Discount Rate Increase June 30, 2016 6.50% 7.50% 8.50% City's proportionate share of net pension liability $ 35,224,082 $ 23,926,493 $ 14,576,748 Pension Plan Fiduciary Net Position Detailed information about the SBCERA's fiduciary net position is available in a separately issued SBCERA comprehensive annual financial report. That report may be obtained on the Internet at www.SBCERA.org; by writing to SBCERA at 348 W. Hospitality Lane, Third Floor, San Bernardino, CA 92415; or by calling (909) 885-7980 or (877) 722-3721. Note 8: Other Post -Employment Employee Benefits Plan Description The City has established the City of Chino Hills Retiree Healthcare Plan, a single -employer defined benefit healthcare plan. The plan provides postretirement healthcare benefits to eligible employees who retire from the City under the San Bernardino County Employee's Retirement Association (SBCERA) and who elect a CaIPERS Health Plan (PEMHCA). The City pays the PEMHCA minimum employer contribution using the unequal method of $101.15 per month for the months in 2015 and $109.80 per month for the months in 2016. The retiree pays the remainder of the PEMHCA premium. The City does not provide contributions for retiree dental, vision, or life insurance benefits. Funding Policy Currently, the City funds retiree healthcare benefits on a pay-as-you-go basis, paying for retiree benefits from the City's General Fund, the Water Utility Fund and the Equipment Maintenance Fund as they are due with no pre -funding for future years. For fiscal year 2015-2016, the City paid $13,173 for benefits of 11 retired employees. C� CITY OF CHINO HILLS NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2016 Note 8: Other Post -Employment Employee Benefits (Continued) Annual OPEB Cost and Net OPEB Obligation The City's annual other postemployment benefit (OPEB) cost is calculated based on the annual required contribution of the employer (ARC), an amount actuarially determined in accordance with the parameters of GASB Statement 45. The ARC represents a level of funding that, if paid on an ongoing basis, is projected to cover normal cost each year and amortize any unfunded actuarial liabilities over a period not to exceed thirty years. The following table shows the components of the City's annual OPEB cost for the year, the amount actually contributed to the plan, and changes in the City's net OPEB obligation: Annual required contribution (ARC) Interest on net OPEB obligation Adjustment to ARC Annual OPEB cost (expense) Contribution made Increase in net OPEB obligation Net OPEB obligation - July 1, 2015 Net OPEB obligation - June 30, 2016 Retiree Healthcare Plan $ 163,587 12,213 (69,569) 106,231 13,173 93,058 814,172 $ 907,230 The City's annual OPEB cost, the percentage of annual OPEB cost contributed to the plan, and the net OPEB obligation for the 2015-2016 fiscal year and the two preceding years were as follows: Funded Status and Funding Progress Actuarial valuations of an ongoing plan involve estimates of the value of reported amounts and assumptions about the probability of occurrence of events far into the future. Examples include assumptions about future employment, mortality, and the healthcare cost trends. Amounts determined regarding the funded status of the plan and the annual required contributions of the employer are subject to continual revision as actual results are compared with past expectations and new estimates are made about the future. The schedule of funding progress below represents multiyear trend information about whether the actuarial value of plan assets is increasing or decreasing over time relative to the actuarial accrued liabilities or benefits. .: Percentage of Fiscal Year Annual Annual OPEB Net OPEB Ended OPEB Cost Cost Contributed Obligation 06/30/14 $ 94,821 13.64% $ 695,315 06/30/15 123,842 15.21% 814,172 06/30/16 106,231 11.71% 907,230 Funded Status and Funding Progress Actuarial valuations of an ongoing plan involve estimates of the value of reported amounts and assumptions about the probability of occurrence of events far into the future. Examples include assumptions about future employment, mortality, and the healthcare cost trends. Amounts determined regarding the funded status of the plan and the annual required contributions of the employer are subject to continual revision as actual results are compared with past expectations and new estimates are made about the future. The schedule of funding progress below represents multiyear trend information about whether the actuarial value of plan assets is increasing or decreasing over time relative to the actuarial accrued liabilities or benefits. .: CITY OF CHINO HILLS NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2016 Note 8: Note 9: Other Post -Employment Employee Benefits (Continued) Schedule of Funding Progress for OPEB (Amount in Thousands) Actuarial Methods and Assumptions Actuarial UAAL as Accrued a % of Actuarial Actuarial Liability Unfunded Valuation Valuation of (AAL) Entry AAL date Assets Age (UAAL) 01/01/2009 $ - $ 919 $ 919 06/15/2012 - 1,160 1,160 05/01/2015 - 1,498 1,498 Actuarial Methods and Assumptions Projections of benefits for financial reporting purposes are based on the substantive plan (the plan as understood by the employer and the plan members) and include the types of benefits provided at the time of each valuation and the historical pattern of sharing of benefit costs between the employer and plan members to that point. The actuarial methods and assumptions used include techniques that are designed to reduce the effects of short-term volatility in actuarial accrued liabilities and the actuarial value of assets, consistent with the long-term perspective of the calculations. The actuarial valuation dated May 1, 2015, used the Entry Age Normal actuarial cost method, a discount rate of 4.50% which is the long-term expected rate of return on the City's investment fund, an annual general inflation rate of 2.75%, and an annual aggregate payroll increase of 2.75%. The unfunded accrued actuarial liability (UAAL) is being amortized over a fixed 30 -year period as a level percentage of payroll beginning with the 2008-2009 fiscal year. The initial UAAL was amortized over a closed 30 years and residual UAAL is amortized over an open 20 years. The PEMHCA medical plans are considered community rated plans for the City. Therefore, no implied subsidy was determined for this valuation. The Plan is assumed to be on going for cost purposes. This does not imply that an obligation to continue the Plan exists. As of the actuarial valuation date, the City had 149 active participants and six retiree receiving benefits. 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 116 California public entities and is organized under a joint powers agreement pursuant to California Government Code §6500 et seq. The purpose of the Authority is to arrange and administer programs for the pooling of self-insured losses, to purchase excess insurance or reinsurance, and to arrange for group purchased insurance for property and other lines of coverage. The California JPIA began covering claims of its members in 1978. Each member government has an elected official as its representative on the Board of Directors. The Board operates through a nine -member Executive Committee. 67 UAAL as a % of Funded Covered Covered Ratio Payroll Payroll 0.0% $ 9,175 10.0% 0.0% 10,595 10.9% 0.0% 11,999 12.5% Projections of benefits for financial reporting purposes are based on the substantive plan (the plan as understood by the employer and the plan members) and include the types of benefits provided at the time of each valuation and the historical pattern of sharing of benefit costs between the employer and plan members to that point. The actuarial methods and assumptions used include techniques that are designed to reduce the effects of short-term volatility in actuarial accrued liabilities and the actuarial value of assets, consistent with the long-term perspective of the calculations. The actuarial valuation dated May 1, 2015, used the Entry Age Normal actuarial cost method, a discount rate of 4.50% which is the long-term expected rate of return on the City's investment fund, an annual general inflation rate of 2.75%, and an annual aggregate payroll increase of 2.75%. The unfunded accrued actuarial liability (UAAL) is being amortized over a fixed 30 -year period as a level percentage of payroll beginning with the 2008-2009 fiscal year. The initial UAAL was amortized over a closed 30 years and residual UAAL is amortized over an open 20 years. The PEMHCA medical plans are considered community rated plans for the City. Therefore, no implied subsidy was determined for this valuation. The Plan is assumed to be on going for cost purposes. This does not imply that an obligation to continue the Plan exists. As of the actuarial valuation date, the City had 149 active participants and six retiree receiving benefits. 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 116 California public entities and is organized under a joint powers agreement pursuant to California Government Code §6500 et seq. The purpose of the Authority is to arrange and administer programs for the pooling of self-insured losses, to purchase excess insurance or reinsurance, and to arrange for group purchased insurance for property and other lines of coverage. The California JPIA began covering claims of its members in 1978. Each member government has an elected official as its representative on the Board of Directors. The Board operates through a nine -member Executive Committee. 67 CITY OF CHINO HILLS NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2016 Note 9: Liability, Property and Workers' Compensation Protection (Continued) b. Self -Insurance Programs of the Authority Each member pays an annual contribution at the beginning of the coverage period. A retrospective adjustment is then conducted annually thereafter, for coverage years 2012-13 and prior. Retrospective adjustments are scheduled to continue indefinitely on coverage years 2012-13 and prior, until all claims incurred during those coverage years 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. Coverage years 2013-14 and forward are not subject to routine annual retrospective adjustment. 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 general government exposures. (1) The payroll of each member is evaluated relative to the payroll of other members. A variable credibility factor is determined for each member, which establishes the weight applied to payroll and the weight applied to losses within the formula. (2) The first layer of losses includes incurred costs up to $30,000 for each occurrence and is evaluated as a percentage of the pool's total incurred costs within the first layer. (3) The second layer of losses includes incurred costs from $30,000 to $750,000 for each occurrence and is evaluated as a percentage of the pool's total incurred costs within the second layer. (4) Incurred costs from $750,000 to $50 million, are distributed based on the outcome of cost allocation within the first and second loss layers. For 2015-16 the Authority's pooled retention is $2 million per occurrence, with reinsurance to $20 million, and excess insurance to $50 million. The Authority's reinsurance contracts are subject to the following additional pooled retentions: (a) $2.5 million annual aggregate deductible in the $3 million x/s $2 million layer, and (b) $3 million annual aggregate deductible in the $5 million x/s $10 million layer. There is a third annual aggregate deductible in the amount of $2.5 million in the $5 million x/s $5 million layer, however it is fully covered under a separate policy and therefore not retained by the Authority. The overall coverage limit for each member, including all layers of coverage, is $50 million per occurrence. Costs of covered claims for subsidence losses have a sub -limit of $30 million per occurrence. .: CITY OF CHINO HILLS NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2016 Note 9: Liability, Property and Workers' Compensation Protection (Continued) Workers' Compensation In the workers' compensation program claims are pooled separately between public safety (police and fire) and general government exposures. (1) The payroll of each member is evaluated relative to the payroll of other members. A variable credibility factor is determined for each member, which establishes the weight applied to payroll and the weight applied to losses within the formula. (2) The first layer of losses includes incurred costs up to $50,000 for each occurrence and is evaluated as a percentage of the pool's total incurred costs within the first layer. (3) The second layer of losses includes incurred costs from $50,000 to $100,000 for each occurrence and is evaluated as a percentage of the pool's total incurred costs within the second layer. (4) Incurred costs from $100,000 to statutory limits are distributed based on the outcome of cost allocation within the first and second loss layers. For 2015-16 the Authority's pooled retention is $2 million per occurrence, with reinsurance to statutory limits under California Workers' Compensation Law. Employer's Liability losses are pooled among members to $2 million. Coverage from $2 million to $5 million is purchased as part of a reinsurance policy, and Employer's Liability losses from $5 million to $10 million are pooled among members. c. Purchased Insurance Pollution Legal Liability Insurance The City of Chino Hills participates in the pollution legal liability insurance program which is available through the Authority. The policy covers sudden and gradual pollution of scheduled property, streets, and storm drains owned by the City of Chino Hills. Coverage is on a claims -made basis. There is a $50,000 deductible. The Authority has a limit of $50 million for the 3 -year period from July 1, 2014 through July 1, 2017. Each member of the Authority has a $10 million sub -limit during the 3 -year term of the policy. Property Insurance The City of 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 $120,962,949. There is a $5,000 deductible per occurrence except for non -emergency vehicle insurance which has a $1,000 deductible. Premiums for the coverage are paid annually and are not subject to retrospective adjustments. Earthquake and Flood Insurance The City of Chino Hills purchases earthquake and flood insurance on a portion of its property. The earthquake insurance is part of the property protection insurance program of the Authority. City of Chino Hills property currently has earthquake protection in the amount of $81,313,669. There is a deductible of 5% per unit of value with a minimum deductible of $100,000. Premiums for the coverage are paid annually and are not subject to retrospective adjustments. CITY OF CHINO HILLS NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2016 Note 9: Liability, Property and Workers' Compensation Protection (Continued) Crime Insurance The City of Chino Hills purchases crime insurance coverage in the amount of $1,000,000 with a $2,500 deductible. The fidelity coverage is provided through the Authority. Premiums are paid annually and are not subject to retrospective adjustments. d. Adequacy of Protection During the past three fiscal years, none of the above programs of protection experienced settlements or judgments that exceeded pooled or insured coverage. There were also no significant reductions in pooled or insured liability coverage in 2015-16. Note 10: Contingencies a. Litigation The City is involved in several pending lawsuits of a nature common to many similar jurisdictions. City management estimates that potential claims against the City not covered by insurance, will not have a material adverse effect on the financial statements of the City. b. Voter Initiatives Proposition 218, which was approved by the voters in November 1996, will regulate the City's ability to impose, increase and extend taxes, assessments and fees. Any new, increased or extended taxes, assessments and fees subject to the provisions of Proposition 218 require voter approval before they can be implemented. Additionally, Proposition 218 provides that these taxes, assessments and fees are subject to the voter initiative process and may be rescinded in the future by the voters. Therefore, the City's ability to finance the services for which the taxes, assessments and fees were imposed may be significantly impaired. The taxes, fees and assessments that are subject to the provisions of Proposition 218 that the City currently imposes for its own benefit or as an agent for a special district, or receives from other governmental agencies, potentially include the County of San Bernardino Measure I taxes, business license fees, community facilities districts, special taxes, landscape and lighting district assessments, street sweeping assessments, water utility fees, sewer utility fees and refuse disposal fees. Certain language in the initiative is unclear as to the scope and impact of the proposition. Future court rulings or state legislation may clarify these issues. At this time it is uncertain how Proposition 218 will affect the City's ability to maintain or increase the revenue it receives from taxes, assessments and fees. 2. A general plan initiative was passed by City residents in November 1999, which removed the City Council's ability to increase residential density zoning except under specific circumstances. An increase in residential zoning density would require a majority voter approval. Current zoning on certain developable residential parcels in the City is of a lower density of units per acre than the density desired by residential developers. This change could slow down development in the City due to the voter approval requirement. 70 CITY OF CHINO HILLS NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2016 Note 11: Joint Venture a. Water Facility Authority On February 19, 1980, the Water Facilities Authority (the Authority) was created under a joint exercise of powers agreement between the CSA 70 Zone CH (now part of the City of Chino Hills) and other local entities. It was formed for the acquisition and construction of facilities directly benefiting the participants by supplying water to the inhabitants within the boundaries of its members. Thus, each participant has an ongoing financial interest in the Authority. The governing Board of Directors consists of one member appointed from each participating agency and has approval of all budget and finance activities. The City's investment in the Authority has been recorded under the equity method of accounting and is shown as an investment in joint venture in the Water Enterprise Fund. On September 30, 1997, the Authority issued $24,455,000 in 1997 Refunding Certificates of Participation (COPS) for the purpose of refunding $25,820,000 of the outstanding 1986 COPs. The 1997 Refunding COPS carry interest rates from 4.00% to 5.30% and will be repaid in various principal increments with the final payment due on October 1, 2015. Each participant in the joint venture has pledged gross revenues from its respective Enterprise Fund and has agreed to restrictive covenants that establish rates and charges for each respective water enterprise fund at levels sufficient to maintain net revenues equal to at least 1.25 times the aggregate amount of each respective party's installment payments to the Authority as well as any parity debt that shall become due and payable within the succeeding 12 months. On March 21, 1996, the Board of Directors of Authority approved the prepayment by the City of Chino Hills of its installment payment obligation pursuant to the 1986 Installment Purchase Agreement between the Authority and its participants. As a result of such prepayment and redemption of such 1986 Certificates, the City of Chino Hills has no further obligation for the payment of installment payments to the Authority. The value of the City's investment in the Authority at June 30, 2016 was $3,191,526. 71 CITY OF CHINO HILLS NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2016 Note 11: Joint Venture (Continued) Audited financial information of the Authority for the fiscal year ended June 30, 2016 was summarized as follows: Water Facilities Authority Net Position Total assets $ 29,009,950 Deferred outflow of resources 6,746,802 192,097 Total liabilities 15.95% (4,326,949) Deferred inflow of resources 8,315,879 (127,269) Total Net Position $ 24,747,829 Water Facilities Authority Changes in Net Position: Operating revenues $ 14,846,762 Operating expenses (14,973,599) Operating loss before depreciation and amortization (126,837) Depreciation and amortization (1,160,509) Operating revenue (loss) (1,287,346) Nonoperating revenues (expenses) 420,747 Contributions 12,244 Change in Net Position (854,355) Beginning Net Position, as restated 25,602,184 Ending Net Position $ 24,747,829 The participants and their audited financial contributions through June 30, 2016 were as follows: City of Chino Hills Monte Vista Water District City of Chino City of Ontario City of Upland Non -Participants Total Amount Percent $ 5,363,653 12.90% 6,746,802 16.23% 6,634,914 15.95% 14,412,047 34.65% 8,315,879 19.99% 117,703 0.28% $ 41,590,998 100.00% Financial statements of the Authority can be obtained from the office of Charles Z. Fedak & Co., 6081 Orange Avenue, Cypress, California 90630. b. Chino Basin Desalter Authority On January 15, 2002, the Chino Basin Desalter Authority (the Authority) was created under a joint exercise of powers agreement between the City of Chino Hills and other neighboring government agencies. This agreement was formed to successfully manage the groundwater resources in the Chino Basin. The governing Board of Directors consists of one representative appointed from each participating agency and has the power and responsibility to adopt budgets, operating plans and finance activities to further the purpose of the Authority. The City's investment 72 CITY OF CHINO HILLS NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2016 Note 11: Joint Venture (Continued) in the Authority has been recorded under the equity method of accounting and is shown as an investment in joint venture in the Chino Basin Desalter Authority. At June 30, 2016, the value of the City's investment in the Authority was $31,348,515. On June 22, 2016, the Chino Basin Desalter Authority issued the Desalter Revenue Refunding Bonds, Series 2016A in the amount of $67,105,000 to refund the Desalter Revenue Refunding Bonds, Series 2008A. The new revenue refunding bond has various debt payment schedules tailored to each CDA member agency, based on their respective election. This provision affords each member the ability to prepay their share of debt service. Unaudited Financial information of the Authority for the fiscal year ended June 30, 2016 is summarized as follows: Chino Basin Desalter Authority Net Position: Total assets $ 284,250,902 Total liabilities (97,763,486) Total Net Position $ 186,487,416 Chino Basin Desalter Authority Changes in Net Position Operating revenues $ 39,082,935 Operating expenses (35,019,426) Operating gain before depreciation and amortization 4,063,509 Depreciation and amortization (3,984,054) Operating revenue (loss) 79,455 Nonoperating revenues (expenses) 2,408,663 Income (loss) before transfers and contributions 2,488,118 Contributions 19,643,423 Capital grants 4,768,747 Distribution of excess reserves - Change in Net Position 26,900,288 Beginning Net Position 159,587,128 Ending Net Position $ 186,487,416 73 CITY OF CHINO HILLS NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2016 Note 11: Joint Venture (Continued) The participants' contributions through June 30, 2016 were as follows: JCSD City of Chino Hills City of Chino City of Norco City of Ontario Santa Ana River Co. Western Municipal Water District Total Amount Percent $ 9,826,442 35.10% 4,245,918 15.17% 5,056,413 18.06% 1,012,711 3.62% 5,084,599 18.16% 1,209,916 4.32% 1,556,694 5.57%- $ 27,992,693 100.00% Financial statements of the Authority can be obtained from the CDA Treasurer's office located at 2151 Haven Avenue, Suite 202, Ontario, CA 91761. Note 12: Other Commitments The City has active construction projects as of June 30, 2016. The projects include streets facilities and water lines and mains. At fiscal year end, the City's encumbrances with contractors were as follows: Capital Improvements Fund: Improvements Other than Buildings Office Furniture and Equipment Streets Facilities Traffic Signals Sanitary Sewer Lines & Facilities Storm Sewer Lines Water Supply Facilities Total 74 Remaining Spent -to -date Commitment $ 6,749 $ 243,251 27,400 55,478 152,761 100,429 - 11,869 19,445 297,024 650,463 237,157 88,351 68,849 $ 945,169 $ 1,014,057 CITY OF CHINO HILLS NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2016 Note 13: Fund Balances Fund Balance Classifications At June 30, 2016, the City reports the following fund balance classifications: Existing Other Total Infrastructure Governmental Governmental General Fees Funds Funds Fund Balances Nonspendable Long-term receivables $ 13,553 $ - $ - $ 13,553 Advances to other funds 752,651 - - 752,651 Restricted Community development projects - - 1,340,598 1,340,598 Public safety - - 38,599 38,599 Public works - - 221,920 221,920 Landscape & lighting projects & related administrative costs - - 3,576,087 3,576,087 General facilities projects & related administrative costs - - 2,670,579 2,670,579 Parkland projects & related administrative costs - - 426,432 426,432 Sewer facilities projects & related administrative costs - - 4,304,416 4,304,416 Storm drain projects & related administrative costs - - 5,836,961 5,836,961 Traffic facilities projects & related administrative costs - - 2,614,180 2,614,180 Water facilities projects & related administrative costs - - 10,484,534 10,484,534 Capital projects 1,618,950 - 9,349,468 10,968,418 Line of credit 456,218 - - 456,218 Committed Emergencies and contingencies 15,299,767 - - 15,299,767 Cash flow contingency 5,900,000 - - 5,900,000 Stabilization Fund 1,100,000 - - 1,100,000 Operational contingency 100,000 - - 100,000 Assigned General government 284,414 - - 284,414 CIP special projects 1,429,943 - - 1,429,943 Unassigned - (5,917,134) (752,651) (6,669,785) Total Fund Balances $ 26,955,496 $ (5,917,134) $ 40,111,123 $ 61,149,485 Note 14: Subsequent Events Sale of Land On July 14, 2016, the City sold land from the Founders Site to Trumark Homes in the amount of $11,600,000. The proceeds from the sale of the property will be used to retire General Fund debt. 75 City of Chino Required Supplementary Information i (.rhino Hills This page intentionally left blank. N Return to Table of Contents CITY OF CHINO HILLS NOTES TO REQUIRED SUPPLEMENTARY INFORMATION JUNE 30, 2016 Note 1: Budget Procedures All financial activities of the General Fund, Special Revenue Funds and Capital Projects Funds are part of the appropriated budget. Appropriated amounts are as originally adopted or as amended by the City Council throughout the year. The following general procedures are followed in establishing the annual budget: 1. The annual budget adopted by the City Council provides for the general operation of the City. It includes proposed expenditures and estimated revenues. 2. The City Manager is authorized to appropriate from reserves for each expenditure line item or capital improvement project, not exceeding $25,000 per transaction. The total of appropriations by the City Manager from General Fund reserves may not exceed $100,000 in a fiscal year. Any appropriations from reserves for each expenditure line item or capital improvement project exceeding $25,000 per transaction must be approved by the City Council. The City Manager is authorized to transfer appropriations within a department within a fund or between departments within a fund without limitation. All appropriations from reserves and all appropriation transfers are subject to funding eligibility requirements. 3. The budget is formally integrated into the accounting system and employed as a management control device during the year for all funds. 4. The budget is adopted on an annual basis. 5. The budget is adopted on a basis which differs from accounting principles generally accepted in the United States of America in that encumbrances are included as expenditures. The modified accrual basis of accounting is employed in the preparation of the budget. 6. At fiscal year—end, operating budget appropriations lapse; however, incomplete capital improvement project appropriations within Capital Projects Funds, and authorized non—capital appropriations are budgeted in the following fiscal year. 77 Return to Table of Contents CITY OF CHINO HILLS BUDGETARY COMPARISON SCHEDULE GENERALFUND YEAR ENDED JUNE 30, 2016 78 Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) Budgetary Fund Balance, July 1 $22,111,363 $ 22,111,363 $22,111,363 $ - Resources (Inflows): Taxes 23,410,400 23,511,200 24,194,441 683,241 Licenses and permits 3,841,400 3,433,400 2,658,148 (775,252) Intergovernmental 31,300 31,300 42,832 11,532 Charges for services 15,461,700 15,560,500 14,539,730 (1,020,770) Use of money and property 865,600 865,600 1,312,835 447,235 Fines and forfeitures 464,100 464,100 481,301 17,201 Contributions 1,271,400 1,285,400 936,614 (348,786) Miscellaneous 327,400 872,400 1,014,254 141,854 Transfers in 117,700 117,700 72,112 (45,588) Contributions from other agencies - 13,041,600 13,041,538 (62) Amounts Available for Appropriations 67,902,363 81,294,563 80,405,168 (889,395) Charges to Appropriation (Outflow): General government City council 257,600 272,300 272,420 (120) City manager 1,697,500 1,809,500 1,686,774 122,726 City clerk 1,128,100 1,223,100 1,156,219 66,881 City attorney 350,000 350,000 261,901 88,099 Finance 2,441,000 2,584,100 2,352,583 231,517 Risk management 1,408,300 1,441,100 1,424,663 16,437 Human resources 404,800 426,600 399,438 27,162 Non -departmental 60,300 60,300 53,863 6,437 Emergency preparedness 246,400 251,200 227,879 23,321 Code enforcement 544,000 598,000 576,819 21,181 Public safety Law enforcement 12,058,800 12,297,100 12,297,005 95 Public works Public works operations 3,092,900 3,579,500 3,534,896 44,604 Engineering 1,926,200 2,091,500 1,847,426 244,074 Public works administration 1,043,600 1,102,400 1,047,069 55,331 Community development Community development administration 1,765,700 1,841,800 1,601,165 240,635 Building and safety 1,351,900 1,418,100 1,349,563 68,537 Development services 1,562,900 2,349,700 1,572,971 776,729 Economic development 114,700 169,700 170,094 (394) Community services Recreation 5,632,000 5,858,200 5,540,203 317,997 Capital outlay 352,700 555,200 (86,748) 641,948 Debt service: Principal retirement 1,806,300 15,981,300 14,760,832 1,220,468 Interest and fiscal charges 870,600 1,014,600 702,970 311,630 Transfers out 3,096,600 3,200,300 699,667 2,500,633 Total Charges to Appropriations 43,212,900 60,475,600 53,449,672 7,025,928 Budgetary Fund Balance, June 30 $24,689,463 $ 20,818,963 $26,955,496 $ 6,136,533 78 Return to Table of Contents CITY OF CHINO HILLS BUDGETARY COMPARISON SCHEDULE EXISTING INFRASTRUCTURE FEES YEAR ENDED JUNE 30, 2016 Long-term debt issued Amounts Available for Appropriations Charges to Appropriation (Outflow): Public works Community development Debt service: Principal retirement Interest and fiscal charges Total Charges to Appropriations 10,000 1,088,400 622,481 (465,919) Variance with 6,263,663 (213,265) (6,476,928) 945,800 Final Budget 467,278 Budget Amounts Actual Positive 131,800 Original Final Amounts (Negative) Budgetary Fund Balance, July 1 $ (7,450,037) $ (7,450,037) $(7,450,037) $ - Resources (Inflows): 6,707,800 5,703,869 1,003,931 Developer fees 12,611,100 12,611,100 6,229,478 (6,381,622) Use of money and property 14,200 14,200 60,576 46,376 Miscellaneous - - 324,237 324,237 Long-term debt issued Amounts Available for Appropriations Charges to Appropriation (Outflow): Public works Community development Debt service: Principal retirement Interest and fiscal charges Total Charges to Appropriations 10,000 1,088,400 622,481 (465,919) 5,185,263 6,263,663 (213,265) (6,476,928) 945,800 945,800 467,278 478,522 - - 131,800 (131,800) 3,431,200 5,705,900 5,036,825 669,075 56,100 56,100 67,966 (11,866) 4,433,100 6,707,800 5,703,869 1,003,931 Budgetary Fund Balance, June 30 $ 752,163 $ (444,137) $(5,917,134) $ (5,472,997) 79 Return to Table of Contents CITY OF CHINO HILLS SBCERA PENSION PLAN A COST-SHARING, MULTIPLE -EMPLOYER DEFINED BENEFIT PENSION PLAN SCHEDULE OF PROPORTIONATE SHARE OF THE NET PENSION LIABILITY AS OF JUNE 30, 2016 FOR THE LAST TEN FISCAL YEARS (2) Proportion of the Net Pension Liability Proportionate Share of the Net Pension Liability Covered -Employee Payroll Proportionate Share of the Net Pension Liability as Percentage of Covered -Employee Payroll Plan Fiduciary Net Position as a Percentage of the Total Pension Liability 2015 2016 1.336% 1.232% $ 22,704,424 $ 23,926,493 $ 11,984,203 $ 11,338,934 71.97% Notes to Schedule: Benefit Changes: All members with membership dates on or after January 1, 2013 enter the new tiers created by the California Public Employees' Pension Reform Act of 2013 (PEPRA). The addition of a new tier of benefits did not result in a change in the net pension liability of participating employers due to changes in benefit terms as of June 30, 2014 and 2013. (1) Historical information is required only for measurement for which GASB 68 is applicable. Fiscal Year 2015 was the first year of implementation, therefore only two years are shown. :t 211.01% 71.75% Return to Table of Contents CITY OF CHINO HILLS SBCERA PENSION PLAN A COST-SHARING, MULTIPLE -EMPLOYER DEFINED BENEFIT PENSION PLAN SCHEDULE OF PLAN CONTRIBUTIONS AS OF JUNE 30, 2016 FOR THE LAST TEN FISCAL YEARS (2) 2015 2016 Actuarially Determined Contribution $ 4,546,047 $ 5,528,874 Actuarial Contributions (4,546,047) (5,528,874) Contribution Deficiency (Excess) $ - $ - Covered -Employee Payroll $ 11,999,151 $ 12,556,972 Contributions as a Percentage of Covered -Employee Payroll -37.89% -44.03% Note to Schedule: Valuation Date: June 30, 2015 Methods and assumptions used to determine contribution rates: Actuarial cost method Entry age normal Amortization method Level percent of payroll (3.75% payroll growth assumed) Remaining amortization period 15 years Assets valuation method Market value of assets less unrecognized returns from each of the last five years. Inflation 3.25% Projected salary increases General: 4.6% to 13.75 and Safety: 4.55% to 13.75°/x, including inflation of 3.25% Investment rate of return 7.5% net of pension plan investment expenses, including inflation Retirement age 58 years for General members; 52 years for Safety members Mortality RP -2000 Combined Healthy Mortality Table (1) Historical information is required only for measurement for which GASB 68 is applicable. Fiscal Year 2015 was the first year of implementation, therefore only two years are shown. 81 i (.rhino Hills This page intentionally left blank. p NONMAJOR GOVERMENTAL FUNDS Snecial Revenue Funds Landscape and Lighting District — To account 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. Sleepy Hollow Road Improvement — To account for receipts and expenditures of money for landscape and other maintenance in the area of the City formerly designated as County Service Area No. 19. General Facilities Fee — To account for receipts and expenditures of money in the facilities development program for civic facilities such as a civic center, fire stations and community centers. Traffic Facilities Fee — To account for receipts and expenditures of money in the facilities development program for traffic facilities such as streets, sidewalks, curbs and gutters. Storm Drain Facilities Fee — To account for receipts and expenditures of money in the facilities development program for storm drain facilities. Parkland Fee — To account for receipts and expenditures of money in parks & recreation facilities fee and quimby in -lieu fee programs which provide funds for the acquisition of land and construction of parks within the City and is financed from fees collected from the development of residential and commercial properties. Traffic Signal Fee — To account for receipts and expenditures of money in the traffic signal fee program which provides funds for the installation of traffic signals within the City. Gas Tax — To account for receipts and expenditures of money apportioned under the State of California Streets and Highways Code Sections 2103, 2105, 2106, and 2107. Air Quality — To account for receipts and expenditures of money in the State and Federally mandated program to improve air quality within the South Coast Air Quality Management District. Federal Grants — To account for receipts and expenditures of money for certain federal grants received by the City. Measure I — To account for receipts and expenditures of money in providing qualifying street maintenance activities in conformance with provisions of the voter approved Measure I two cent sales tax levy. Solid Waste — To account for receipts and expenditures of money for the collection, transportation, and disposal, via contract, of solid waste materials. Street Sweeping — To account for receipts and expenditures of money in providing street sweeping services as financed through assessment fees collected from residential and commercial property owners. Frontline Policing — To account for the receipts and expenditures of money for the Frontline Policing Grant received from the State of California for qualifying police activities. Miscellaneous Grants — To account for receipts and expenditures of money for various grants received from Local, State, and Federal agencies. 83 NONMAJOR GOVERMENTAL FUNDS (Continued) Affordable Housing Program — To account for receipts and expenditures of money in development of affordable housing in the City as financed through affordable housing in -lieu fees collected from new residential development projects. Water Facilities Fee — To account for receipts and expenditures of money in the facilities development program for water facilities. Sewer Facilities Fee — To account for receipts and expenditures of money in the facilities development program for sewer facilities. Tree Mitigation Fund — To account for the receipts and expeditures of money for the replacement of protected trees within the City. Public Safety Programs Fund - To account for the receipts and expenditures of money for programs which enhance public safety and law enforcement. Capital Projects Funds The following Capital Projects Funds are used to account for resources that are restricted, committed or assigned for the acquisition of capital facilities and other capital assets: CFD #9 Rincon Village — To account for capital projects in the Community Facilities District No. 9 (Rincon Village Area) financed by the issuance of Mello -Roos Community Facilities Bonds as required by the Mello -Roos Community Facilities Act of 1982. CFD #10 Fairfield Ranch — To account for capital projects in the Community Facilities District No. 10 (Fairfield Ranch) financed by the issuance of Mello -Roos Community Facilities Bonds as required by the Mello -Roos Community Facilities Act of 1982. ;.i Chino Hills This page intentionally left blank. Return to Table of Contents CITY OF CHINO HILLS COMBINING BALANCE SHEET NONMAJOR GOVERNMENTAL FUNDS JUNE 30, 2016 :: Special Revenue Funds Landscape Sleepy Hollow and Lighting Road General Traffic District Improvement Facilities Fees Facilities Fees Assets: Cash and investments $ 3,954,888 $ 50,132 $ 2,670,329 $ 2,219,509 Receivables: Accounts 48,372 - - - Taxes - - - - Accrued interest 591 7 250 252 Special assessment 66,600 420 - - Due from other governments - - - - Due from other funds - - - - Advances to other funds - - - - Restricted assets: Cash and investments with fiscal agents - - - - Total Assets $ 4,070,451 $ 50,559 $ 2,670,579 $ 2,219,761 Liabilities, Deferred Inflows of Resources, and Fund Balances: Liabilities: Accounts payable $ 400,818 $ - $ - $ - Accrued liabilities 63,417 - - - Retentions payable 3,710 - - - Due to other funds 17,962 - - - Unearned revenues - - - - Deposits payable - - - - Advances from other funds - - - - Total Liabilities 485,907 - - - Deferred Inflows of Resources: Unavailable revenues 8,457 - - - Total Deferred Inflows of Resources 8,457 - - - Fund Balances: Restricted 3,576,087 50,559 2,670,579 2,219,761 Unassigned - - - - Total Fund Balances 3,576,087 50,559 2,670,579 2,219,761 Total Liabilities, Deferred Inflows of Resources, and Fund Balances $ 4,070,451 $ 50,559 $ 2,670,579 $ 2,219,761 :: CITY OF CHINO HILLS COMBINING BALANCE SHEET NONMAJOR GOVERNMENTAL FUNDS JUNE 30, 2016 (CONTINUED) Special Revenue Funds Storm Drain Traffic Signal Assets: Cash and investments $ 5,823,566 $ 1,813,498 $ 394,366 $ 4,528,177 Receivables: Accounts - - - 12,954 Taxes - - - - Accrued interest 676 243 53 591 Special assessment - - - - Due from other governments - - - 143 Due from other funds 12,719 - - - Advances to other funds - - - - Restricted assets: Cash and investments with fiscal agents - - - - Total Assets $ 5,836,961 $ 1,813,741 $ 394,419 $ 4,541,865 Liabilities, Deferred Inflows of Resources, and Fund Balances: Liabilities: Accounts payable $ - $ - $ - $ 64,070 Accrued liabilities - 1,559 - 32,534 Retentions payable - - - - Due to other funds - - - - Unearned revenues - - - - Deposits payable - - - - Advances from other funds - 1,385,750 - 1,482,352 Total Liabilities - 1,387,309 - 1,578,956 Deferred Inflows of Resources: Unavailable revenues - - - - Total Deferred Inflows of Resources - - - - Fund Balances: Restricted 5,836,961 426,432 394,419 2,962,909 Unassigned - - - - Total Fund Balances 5,836,961 426,432 394,419 2,962,909 Total Liabilities, Deferred Inflows of Resources, and Fund Balances $ 5,836,961 $ 1,813,741 $ 394,419 $ 4,541,865 87 CITY OF CHINO HILLS COMBINING BALANCE SHEET NONMAJOR GOVERNMENTAL FUNDS JUNE 30, 2016 ; Special Revenue Funds Federal Air Quality Grants Measure I Solid Waste Assets: Cash and investments $ 291,507 $ - $ 920,649 $ 516,267 Receivables: Accounts - - - 505,627 Taxes - - 197,822 - Accrued interest 38 - 123 - Special assessment - - - - Due from other governments 26,549 44,058 - - Due from other funds - - - - Advances to other funds - - - - Restricted assets: Cash and investments with fiscal agents - - - - Total Assets $ 318,094 $ 44,058 $ 1,118,594 $ 1,021,894 Liabilities, Deferred Inflows of Resources, and Fund Balances: Liabilities: Accounts payable $ - $ 24,242 $ - $ 940,434 Accrued liabilities - 401 - - Retentions payable - 6,577 - - Due to other funds - 12,838 - 81,460 Unearned revenues - - - - Deposits payable - - - - Advances from other funds - - - - Total Liabilities - 44,058 - 1,021,894 Deferred Inflows of Resources: Unavailable revenues - - - - Total Deferred Inflows of Resources - - - - Fund Balances: Restricted 318,094 - 1,118,594 - Unassigned - - - - Total Fund Balances 318,094 - 1,118,594 - Total Liabilities, Deferred Inflows of Resources, and Fund Balances $ 318,094 $ 44,058 $ 1,118,594 $ 1,021,894 ; CITY OF CHINO HILLS COMBINING BALANCE SHEET NONMAJOR GOVERNMENTAL FUNDS JUNE 30, 2016 (CONTINUED) Assets: Cash and investments Receivables: Accounts Taxes Accrued interest Special assessment Due from other governments Due from other funds Advances to other funds Restricted assets: Cash and investments with fiscal agents Total Assets Liabilities, Deferred Inflows of Resources, and Fund Balances: Liabilities: Accounts payable Accrued liabilities Retentions payable Due to other funds Unearned revenues Deposits payable Advances from other funds Total Liabilities Deferred Inflows of Resources: Unavailable revenues Total Deferred Inflows of Resources Fund Balances: Restricted Unassigned Total Fund Balances Total Liabilities, Deferred Inflows of Resources, and Fund Balances Special Revenue Funds Affordable Street Frontline Miscellaneous Housing Sweeping Policing Grants Program $ 189,328 $ 47,481 $ 73,951 $ 1,340,425 28 6 - 173 2,508 - - - - - 1,931,114 - $ 191,864 $ 47,487 $ 2,005,065 $ 1,340,598 $ 24,765 $ 41,300 $ - - - 1,178,463 - - 73,951 - - 752,651 24,765 41,300 2,005,065 - - 752,651 - - - 752,651 - 167,099 6,187 - 1,340,598 - - (752,651) - 167,099 6,187 (752,651) 1,340,598 $ 191,864 $ 47,487 $ 2,005,065 $ 1,340,598 CITY OF CHINO HILLS COMBINING BALANCE SHEET NONMAJOR GOVERNMENTAL FUNDS JUNE 30, 2016 Assets: Cash and investments Receivables: Accounts Taxes Accrued interest Special assessment Due from other governments Due from other funds Advances to other funds Restricted assets: Cash and investments with fiscal agents Total Assets Liabilities, Deferred Inflows of Resources, and Fund Balances: Liabilities: Accounts payable Accrued liabilities Retentions payable Due to other funds Unearned revenues Deposits payable Advances from other funds Total Liabilities Deferred Inflows of Resources: Unavailable revenues Total Deferred Inflows of Resources Fund Balances: Restricted Unassigned Total Fund Balances Total Liabilities, Deferred Inflows of Resources, and Fund Balances Special Revenue Funds Tree Public Safety Water Sewer Mitigation Programs $ 6,888,186 $ 820,164 $ 4,262 $ 32,399 1,041 86 - 4 - - - 9 38,544 1,865 - - 3,560,977 3,482,301 - - $ 10,488,748 $ 4,304,416 $ 4,262 $ 32,412 $ 1,115 $ 3,099 - - - 4,214 - - - 10,484,534 4,304,416 4,262 32,412 10,484,534 4,304,416 4,262 32,412 $ 10,488,748 $ 4,304,416 $ 4,262 $ 32,412 M CITY OF CHINO HILLS COMBINING BALANCE SHEET NONMAJOR GOVERNMENTAL FUNDS JUNE 30, 2016 Assets: Cash and investments Receivables: Accounts Taxes Accrued interest Special assessment Due from other governments Due from other funds Advances to other funds Restricted assets: Cash and investments with fiscal agents Total Assets Liabilities, Deferred Inflows of Resources, and Fund Balances: Liabilities: Accounts payable Accrued liabilities Retentions payable Due to other funds Unearned revenues Deposits payable Advances from other funds Total Liabilities Deferred Inflows of Resources: Unavailable revenues Total Deferred Inflows of Resources Fund Balances: Restricted Unassigned Total Fund Balances Total Liabilities, Deferred Inflows of Resources, and Fund Balances 91 Capital Project Funds CFD #10 CFD # 9 Fairfield Rincon Village Ranch $ 4,554,500 $ - $ 37,133,584 Total Governmental Funds - - 566,953 - - 197,822 599 - 4,761 - - 69,528 - - 2,001,873 - - 53,128 - - 7,043,278 - 394,772 394,772 $ 4,555,099 $ 394,772 $ 47,465,699 $ 1,496,744 - - 97,911 - - 10,287 - - 1,290,723 - - 73,951 - - 3,099 - - 3,620,753 6,593,468 - - 761,108 761,108 4,555,099 394,772 40,863,774 - - (752,651) 4,555,099 394,772 40,111,123 $ 4,555,099 $ 394,772 $ 47,465,699 Return to Table of Contents CITY OF CHINO HILLS COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES NONMAJOR GOVERNMENTAL FUNDS YEAR ENDED JUNE 30, 2016 Special Revenue Funds Expenditures: Current: Public safety - - - - Public works 8,151,493 419 62,393 7,865 Community development - - - - Community services - - - - Capital outlay 46,631 - - - Debt service: Interest and fiscal charges - - - - Total Expenditures Landscape Sleepy Hollow 62,393 7,865 Excess (Deficiency) of Revenues and Lighting Road General Traffic Over (Under) Expenditures District Improvement Facilities Fees Facilities Fees Revenues: Special assessments $ 5,408,399 $ 10,192 $ - $ - Intergovernmental - - - - Charges for services 1,498,987 - - - Developer fees - - 831,910 104,864 Fines and forfeitures - - - - Contributions from property owners - - - - Use of money and property 89,102 1,034 32,030 40,833 Miscellaneous 68,207 - - - Total Revenues 7,064,695 11,226 863,940 145,697 Expenditures: Current: Public safety - - - - Public works 8,151,493 419 62,393 7,865 Community development - - - - Community services - - - - Capital outlay 46,631 - - - Debt service: Interest and fiscal charges - - - - Total Expenditures 8,198,124 419 62,393 7,865 Excess (Deficiency) of Revenues Over (Under) Expenditures (1,133,429) 10,807 801,547 137,832 Other Financing Sources (Uses): Transfers in 607,150 - - 162,205 Transfers out (6,670) - - - Total Other Financing Sources (Uses) 600,480 - - 162,205 Net Change in Fund Balances (532,949) 10,807 801,547 300,037 Fund Balances, Beginning of Year 4,109,036 39,752 1,869,032 1,919,724 Fund Balances, End of Year $ 3,576,087 $ 50,559 $ 2,670,579 $ 2,219,761 CITY OF CHINO HILLS COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES NONMAJOR GOVERNMENTAL FUNDS YEAR ENDED JUNE 30, 2016 (CONTINUED) Revenues: Special assessments Intergovernmental Charges for services Developer fees Fines and forfeitures Contributions from property owners Use of money and property Miscellaneous Total Revenues Expenditures: Current: Public safety Public works Community development Community services Capital outlay Debt service: Interest and fiscal charges Total Expenditures Excess (Deficiency) of Revenues Over (Under) Expenditures Other Financing Sources (Uses): Transfers in Transfers out Total Other Financing Sources (Uses) Net Change in Fund Balances Fund Balances, Beginning of Year Fund Balances, End of Year Special Revenue Funds Storm Drain Parkland Traffic Signal - - - 1,678,263 841,761 1,460,163 - - 99,717 40,122 9,034 99,445 - - - 39,838 941,478 1,500,285 9,034 1,817,546 63,132 1,454,547 - 1,566,930 - 17,982 - - 63,132 1,472,529 - 1,566,930 878,346 27,756 9,034 250,616 - - (16,062) (399,769) (16,062) (399,769) 878,346 27,756 (7,028) (149,153) 4,958,615 398,676 401,447 3,112,062 $ 5,836,961 $ 426,432 $ 394,419 $ 2,962,909 93 CITY OF CHINO HILLS COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES NONMAJOR GOVERNMENTAL FUNDS YEAR ENDED JUNE 30, 2016 Revenues: Special assessments Intergovernmental Charges for services Developer fees Fines and forfeitures Contributions from property owners Use of money and property Miscellaneous Total Revenues Expenditures: Current: Public safety Public works Community development Community services Capital outlay Debt service: Interest and fiscal charges Total Expenditures Excess (Deficiency) of Revenues Over (Under) Expenditures Other Financing Sources (Uses): Transfers in Transfers out Total Other Financing Sources (Uses) Net Change in Fund Balances Fund Balances, Beginning of Year Fund Balances, End of Year Air Quality 98,730 5,746 Special Revenue Funds Federal Grants Measure I Solid Waste 418,816 1,262,153 - - - 4,843,583 - 31,516 - 104,476 418,816 1,293,669 4,843,583 25,570 - 38,900 4,843,583 - 106,780 - - 37,800 295,373 - - 63,370 402,153 38,900 4,843,583 41,106 16,663 1,254,769 - - (2,667,436) - - (2,667,436) - 41,106 16,663 (1,412,667) - 276,988 (16,663) 2,531,261 - $ 318,094 $ - $1,118,594 $ - 94 CITY OF CHINO HILLS COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES NONMAJOR GOVERNMENTAL FUNDS YEAR ENDED JUNE 30, 2016 (CONTINUED) Revenues: Special assessments Intergovernmental Charges for services Developer fees Fines and forfeitures Contributions from property owners Use of money and property Miscellaneous Total Revenues Expenditures: Current: Public safety Public works Community development Community services Capital outlay Debt service: Interest and fiscal charges Total Expenditures Excess (Deficiency) of Revenues Over (Under) Expenditures Other Financing Sources (Uses): Transfers in Transfers out Total Other Financing Sources (Uses) Net Change in Fund Balances Fund Balances, Beginning of Year Fund Balances, End of Year Special Revenue Funds Affordable Street Frontline Miscellaneous Housing Sweeping Policing Grants Program $ 197,424 $ - $ - $ - - 138,898 4,253,448 - - - - 660,799 4,986 1,171 - 21,248 202,410 140,069 4,253,448 682,047 - 160,509 - - 315,343 - - - - - - 2,527 315,343 160,509 - 2,527 (112,933) (20,440) 4,253,448 679,520 - - (4,502,013) - (4,502,013) - (112,933) (20,440) (248,565) 679,520 280,032 26,627 (504,086) 661,078 $ 167,099 $ 6,187 $ (752,651) $1,340,598 N9 CITY OF CHINO HILLS COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES NONMAJOR GOVERNMENTAL FUNDS YEAR ENDED JUNE 30, 2016 Revenues: Special assessments Intergovernmental Charges for services Developer fees Fines and forfeitures Contributions from property owners Use of money and property Miscellaneous Total Revenues Expenditures: Current: Public safety Public works Community development Community services Capital outlay Debt service: Interest and fiscal charges Total Expenditures Excess (Deficiency) of Revenues Over (Under) Expenditures Other Financing Sources (Uses): Transfers in Transfers out Total Other Financing Sources (Uses) Net Change in Fund Balances Fund Balances, Beginning of Year Fund Balances, End of Year Special Revenue Funds Tree Public Safety Water Sewer Mitigation Programs $ 3,001,174 $ 251,363 $ - - - 7,810 147,650 55,209 35 715 3,148,824 306,572 35 8,525 - - - 5,149 224,833 15,982 - - 12,858 - - - 237,691 15,982 - 5,149 2,911,133 290,590 (46,059) (30,940) 35 3,376 (46,059) (30,940) - - 2,865,074 259,650 35 3,376 7,619,460 4,044,766 4,227 29,036 $ 10,484,534 $ 4,304,416 $ 4,262 $ 32,412 CITY OF CHINO HILLS COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES NONMAJOR GOVERNMENTAL FUNDS YEAR ENDED JUNE 30, 2016 Revenues: Special assessments Intergovernmental Charges for services Developer fees Fines and forfeitures Contributions from property owners Use of money and property Miscellaneous Total Revenues Expenditures: Current: Public safety Public works Community development Community services Capital outlay Debt service: Interest and fiscal charges Total Expenditures Excess (Deficiency) of Revenues Over (Under) Expenditures Other Financing Sources (Uses): Transfers in Transfers out Total Other Financing Sources (Uses) Net Change in Fund Balances Fund Balances, Beginning of Year Fund Balances, End of Year 97 Capital Projects Funds CFD # 9 CFD # 10 Total Rincon Fairfield Governmental Village Ranch Funds $ - $ 3 $ 8,868,555 - - 7,850,308 - - 6,342,570 - - 3,899,497 - - 7,810 170,427 - 170,427 99,168 2 778,763 - - 108,045 269,595 5 28,025,975 - - 165,658 - - 16,770,990 - - 2,527 - - 106,780 - - 379,804 - - 30,840 - - 17,456,599 269,595 5 10,569,376 - - 769,355 - - (7,668,949) - - (6,899,594) 269,595 5 3,669,782 4,285,504 394,767 36,441,341 $ 4,555,099 $ 394,772 $ 40,111,123 Return to Table of Contents CITY OF CHINO HILLS BUDGETARY COMPARISON SCHEDULE LANDSCAPE AND LIGHTING DISTRICT YEAR ENDED JUNE 30, 2016 Budgetary Fund Balance, July 1 Resources (Inflows): Special assessments Charges for services Use of money and property Miscellaneous Transfers in Amounts Available for Appropriations Charges to Appropriation (Outflow): Public works Capital outlay Transfers out Total Charges to Appropriations Budgetary Fund Balance, June 30 Budget Amounts Original Final $ 4,109,036 $ 4,109,036 Actual Amounts $ 4,109,036 Variance with Final Budget Positive (Negative) 5,370,100 5,370,100 5,408,399 38,299 1,511,200 1,511,200 1,498,987 (12,213) 48,300 48,300 89,102 40,802 - 13,600 68,207 54,607 780,400 874,400 607,150 (267,250) 11,819,036 11,926,636 11,780,881 (145,755) 8,890,300 9,058,300 8,151,493 906,807 440,300 554,700 46,631 508,069 26,900 26,900 6,670 20,230 9,357,500 9,639,900 8,204,794 1,435,106 $ 2,461,536 $ 2,286,736 $ 3,576,087 $ 1,289,351 Return to Table of Contents CITY OF CHINO HILLS BUDGETARY COMPARISON SCHEDULE SLEEPY HOLLOW ROAD IMPROVEMENT YEAR ENDED JUNE 30, 2016 Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) Budgetary Fund Balance, July 1 $ 39,752 $ 39,752 $ 39,752 $ - Resources (Inflows): Special assessments 10,400 10,400 10,192 (208) Use of money and property 600 600 1,034 434 Amounts Available for Appropriations 50,752 50,752 50,978 226 Charges to Appropriation (Outflow): Public works 500 500 419 81 Total Charges to Appropriations 500 500 419 81 Budgetary Fund Balance, June 30 $ 50,252 $ 50,252 $ 50,559 $ 307 Return to Table of Contents CITY OF CHINO HILLS BUDGETARY COMPARISON SCHEDULE GENERAL FACILITIES FEES YEAR ENDED JUNE 30, 2016 100 Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) Budgetary Fund Balance, July 1 $ 1,869,032 $ 1,869,032 $ 1,869,032 $ - Resources (Inflows): Developer fees 1,798,200 1,798,200 831,910 (966,290) Use of money and property 8,900 8,900 32,030 23,130 Amounts Available for Appropriations 3,676,132 3,676,132 2,732,972 (943,160) Charges to Appropriation (Outflow): Public works 134,900 134,900 62,393 72,507 Total Charges to Appropriations 134,900 134,900 62,393 72,507 Budgetary Fund Balance, June 30 $ 3,541,232 $ 3,541,232 $ 2,670,579 $ (870,653) 100 Return to Table of Contents CITY OF CHINO HILLS BUDGETARY COMPARISON SCHEDULE TRAFFIC FACILITIES FEES YEAR ENDED JUNE 30, 2016 101 Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) Budgetary Fund Balance, July 1 $ 1,919,724 $ 1,919,724 $ 1,919,724 $ - Resources (Inflows): Developer fees 221,900 221,900 104,864 (117,036) Use of money and property 11,400 11,400 40,833 29,433 Transfers in - - 162,205 162,205 Amounts Available for Appropriations 2,153,024 2,153,024 2,227,626 74,602 Charges to Appropriation (Outflow): Public works 16,600 16,600 7,865 8,735 Total Charges to Appropriations 16,600 16,600 7,865 8,735 Budgetary Fund Balance, June 30 $ 2,136,424 $ 2,136,424 $ 2,219,761 $ 83,337 101 Return to Table of Contents CITY OF CHINO HILLS BUDGETARY COMPARISON SCHEDULE STORM DRAIN FACILITIES FEES YEAR ENDED JUNE 30, 2016 Budgetary Fund Balance, July 1 Resources (Inflows): Developer fees Use of money and property Amounts Available for Appropriations Charges to Appropriation (Outflow): Public works Total Charges to Appropriations Budgetary Fund Balance, June 30 $ 6,423,315 $ 6,423,315 $ 5,836,961 $ (586,354) 102 Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) $ 4,958,615 $ 4,958,615 $ 4,958,615 $ - 1,564,400 1,564,400 841,761 (722,639) 17,600 17,600 99,717 82,117 6,540,615 6,540,615 5,900,093 (640,522) 117,300 117,300 63,132 54,168 117,300 117,300 63,132 54,168 Budgetary Fund Balance, June 30 $ 6,423,315 $ 6,423,315 $ 5,836,961 $ (586,354) 102 Return to Table of Contents CITY OF CHINO HILLS BUDGETARY COMPARISON SCHEDULE PARKLAND FEES YEAR ENDED JUNE 30, 2016 Budgetary Fund Balance, July 1 Resources (Inflows): Developer fees Use of money and property Amounts Available for Appropriations Charges to Appropriation (Outflow): Public works Debt service: Principal retirement Interest and fiscal charges Total Charges to Appropriations Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) $ 398,676 $ 398,676 $ 398,676 $ - 3,302,200 4,643,900 1,460,163 (3,183,737) 13,500 13,500 40,122 26,622 3,714,376 5,056,076 1,898,961 (3,157,115) 247,700 1,589,400 1,454,547 134,853 1,385,800 1,385,800 - 1,385,800 8,700 8,700 17,982 (9,282) 1,642,200 2,983,900 1,472,529 1,511,371 Budgetary Fund Balance, June 30 $ 2,072,176 $ 2,072,176 $ 426,432 $ (1,645,744) 103 Return to Table of Contents CITY OF CHINO HILLS BUDGETARY COMPARISON SCHEDULE TRAFFIC SIGNAL FEES YEAR ENDED JUNE 30, 2016 Budgetary Fund Balance, July 1 Resources (Inflows): Use of money and property Amounts Available for Appropriations Charges to Appropriation (Outflow): Transfers out Total Charges to Appropriations Budgetary Fund Balance, June 30 104 Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) $ 401,447 $ 401,447 $ 401,447 $ - 3,400 3,400 9,034 5,634 404,847 404,847 410,481 5,634 - 97,000 16,062 80,938 - 97,000 16,062 80,938 $ 404,847 $ 307,847 $ 394,419 $ 86,572 104 Return to Table of Contents CITY OF CHINO HILLS BUDGETARY COMPARISON SCHEDULE GAS TAX YEAR ENDED JUNE 30, 2016 105 Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) Budgetary Fund Balance, July 1 $ 3,112,062 $ 3,112,062 $ 3,112,062 $ - Resources (Inflows): Intergovernmental 2,122,900 1,664,500 1,678,263 13,763 Use of money and property 37,000 37,000 99,445 62,445 Miscellaneous - - 39,838 39,838 Transfers in 123,000 123,000 - (123,000) Amounts Available for Appropriations 5,394,962 4,936,562 4,929,608 (6,954) Charges to Appropriation (Outflow): Public works 1,588,100 1,652,200 1,566,930 85,270 Capital outlay 30,500 39,300 - 39,300 Transfers out 1,423,600 399,800 399,769 31 Total Charges to Appropriations 3,042,200 2,091,300 1,966,699 124,601 Budgetary Fund Balance, June 30 $ 2,352,762 $ 2,845,262 $ 2,962,909 $ 117,647 105 Return to Table of Contents CITY OF CHINO HILLS BUDGETARY COMPARISON SCHEDULE AIR QUALITY YEAR ENDED JUNE 30, 2016 Budgetary Fund Balance, July 1 Resources (Inflows): Intergovernmental Use of money and property Amounts Available for Appropriations Charges to Appropriation (Outflow): Public works Capital outlay Total Charges to Appropriations Budgetary Fund Balance, June 30 106 Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) $ 276,988 $ 276,988 $ 276,988 $ - 98,100 98,100 98,730 630 1,600 1,600 5,746 4,146 376,688 376,688 381,464 4,776 500 500 25,570 (25,070) - 73,700 37,800 35,900 500 74,200 63,370 10,830 $ 376,188 $ 302,488 $ 318,094 $ 15,606 106 Return to Table of Contents CITY OF CHINO HILLS BUDGETARY COMPARISON SCHEDULE FEDERAL GRANTS YEAR ENDED JUNE 30, 2016 Budgetary Fund Balance, July 1 Resources (Inflows): Intergovernmental Amounts Available for Appropriations Charges to Appropriation (Outflow): Community services Capital outlay Total Charges to Appropriations Budgetary Fund Balance, June 30 107 Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) $ (16,663) $ (16,663) $ (16,663) $ - 658,000 658,000 418,816 (239,184) 641,337 641,337 402,153 (239,184) 169,300 169,300 106,780 62,520 488,700 473,600 295,373 178,227 658,000 642,900 402,153 240,747 $ (16,663) $ (1,563) $ - $ 1,563 107 Return to Table of Contents CITY OF CHINO HILLS BUDGETARY COMPARISON SCHEDULE MEASUREI YEAR ENDED JUNE 30, 2016 108 Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) Budgetary Fund Balance, July 1 $ 2,531,261 $ 2,531,261 $ 2,531,261 $ - Resources (Inflows): Intergovernmental 1,238,400 1,238,400 1,262,153 23,753 Use of money and property 20,800 20,800 31,516 10,716 Amounts Available for Appropriations 3,790,461 3,790,461 3,824,930 34,469 Charges to Appropriation (Outflow): Public works 38,900 38,900 38,900 - Transfers out 2,340,700 2,913,800 2,667,436 246,364 Total Charges to Appropriations 2,379,600 2,952,700 2,706,336 246,364 Budgetary Fund Balance, June 30 $ 1,410,861 $ 837,761 $ 1,118,594 $ 280,833 108 Return to Table of Contents CITY OF CHINO HILLS BUDGETARY COMPARISON SCHEDULE SOLID WASTE YEAR ENDED JUNE 30, 2016 Budgetary Fund Balance, July 1 Resources (Inflows): Charges for services Amounts Available for Appropriations Charges to Appropriation (Outflow): Public works Total Charges to Appropriations Budgetary Fund Balance, June 30 109 Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) 4,814,600 4,814,600 4,843,583 28,983 4,814,600 4,814,600 4,843,583 28,983 4,814,600 4,814,600 4,843,583 (28,983) 4,814,600 4,814,600 4,843,583 (28,983) 109 Return to Table of Contents CITY OF CHINO HILLS BUDGETARY COMPARISON SCHEDULE STREET SWEEPING YEAR ENDED JUNE 30, 2016 Budgetary Fund Balance, July 1 Resources (Inflows): Special assessments Use of money and property Amounts Available for Appropriations Charges to Appropriation (Outflow): Public works Total Charges to Appropriations Budgetary Fund Balance, June 30 110 Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) $ 280,032 $ 280,032 $ 280,032 $ - 204,400 204,400 197,424 (6,976) 4,400 4,400 4,986 586 488,832 488,832 482,442 (6,390) 323,500 348,400 315,343 33,057 323,500 348,400 315,343 33,057 $ 165,332 $ 140,432 $ 167,099 $ 26,667 110 Return to Table of Contents CITY OF CHINO HILLS BUDGETARY COMPARISON SCHEDULE FRONTLINE POLICING YEAR ENDED JUNE 30, 2016 Budgetary Fund Balance, July 1 Resources (Inflows): Intergovernmental Use of money and property Amounts Available for Appropriations Charges to Appropriation (Outflow): Public safety Total Charges to Appropriations Budgetary Fund Balance, June 30 Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) $ 26,627 $ 26,627 $ 26,627 $ - 99,500 138,900 138,898 (2) 500 500 1,171 671 126,627 166,027 166,696 669 100,000 160,600 160,509 91 100,000 160,600 160,509 91 $ 26,627 $ 5,427 $ 6,187 $ 760 111 Return to Table of Contents CITY OF CHINO HILLS BUDGETARY COMPARISON SCHEDULE MISCELLANEOUS GRANTS YEAR ENDED JUNE 30, 2016 Budgetary Fund Balance, July 1 Resources (Inflows): Intergovernmental Amounts Available for Appropriations Charges to Appropriation (Outflow): Transfers out Total Charges to Appropriations Budgetary Fund Balance, June 30 $ (504,086) $ 2,464,914 $ (752,651) $ (3,217,565) 112 Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) $ (504,086) $ (504,086) $ (504,086) $ - 9,420,400 11,152,400 4,253,448 (6,898,952) 8,916,314 10,648,314 3,749,362 (6,898,952) 9,420,400 8,183,400 4,502,013 3,681,387 9,420,400 8,183,400 4,502,013 3,681,387 Budgetary Fund Balance, June 30 $ (504,086) $ 2,464,914 $ (752,651) $ (3,217,565) 112 Return to Table of Contents CITY OF CHINO HILLS BUDGETARY COMPARISON SCHEDULE AFFORDABLE HOUSING PROGRAM YEAR ENDED JUNE 30, 2016 Budgetary Fund Balance, July 1 Resources (Inflows): Developer fees Use of money and property Amounts Available for Appropriations Charges to Appropriation (Outflow): Community development Total Charges to Appropriations Budgetary Fund Balance, June 30 Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) $ 661,078 $ 661,078 $ 661,078 $ - 1,421,500 1,421,500 660,799 (760,701) 4,800 4,800 21,248 16,448 2,087,378 2,087,378 1,343,125 (744,253) - - 2,527 (2,527) - - 2,527 (2,527) $ 2,087,378 $ 2,087,378 $ 1,340,598 $ (746,780) 113 Return to Table of Contents CITY OF CHINO HILLS BUDGETARY COMPARISON SCHEDULE WATER FACILITIES FEE YEAR ENDED JUNE 30, 2016 Budgetary Fund Balance, July 1 Resources (Inflows): Special assessments Use of money and property Amounts Available for Appropriations Charges to Appropriation (Outflow): Public works Debt service: Principal retirement Interest and fiscal charges Transfers out Total Charges to Appropriations Budgetary Fund Balance, June 30 114 Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) $ 7,619,460 $ 7,619,460 $ 7,619,460 $ - 4,669,800 4,669,800 3,001,174 (1,668,626) 33,600 33,600 147,650 114,050 12,322,860 12,322,860 10,768,284 (1,554,576) 349,900 349,900 224,833 125,067 990,900 990,900 - 990,900 7,200 7,200 12,858 (5,658) 506,600 501,500 46,059 455,441 1,854,600 1,849,500 283,750 1,565,750 $10,468,260 $10,473,360 $10,484,534 $ 11,174 114 Return to Table of Contents CITY OF CHINO HILLS BUDGETARY COMPARISON SCHEDULE SEWER FACILITIES FEE YEAR ENDED JUNE 30, 2016 115 Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) Budgetary Fund Balance, July 1 $4,044,766 $ 4,044,766 $ 4,044,766 $ - Resources (Inflows): Special assessments 447,800 447,800 251,363 (196,437) Use of money and property 37,500 37,500 55,209 17,709 Amounts Available for Appropriations 4,530,066 4,530,066 4,351,338 (178,728) Charges to Appropriation (Outflow): Public works 33,600 33,600 15,982 17,618 Transfers out 178,800 178,500 30,940 147,560 Total Charges to Appropriations 212,400 212,100 46,922 165,178 Budgetary Fund Balance, June 30 $4,317,666 $ 4,317,966 $ 4,304,416 $ (13,550) 115 Return to Table of Contents CITY OF CHINO HILLS BUDGETARY COMPARISON SCHEDULE PUBLIC SAFETY PROGRAMS YEAR ENDED JUNE 30, 2016 Budgetary Fund Balance, July 1 Resources (Inflows): Fines and forfeitures Use of money and property Amounts Available for Appropriations Charges to Appropriation (Outflow): Public safety Total Charges to Appropriations Budgetary Fund Balance, June 30 116 Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) $ 29,036 $ 29,036 $ 29,036 $ - 5,800 5,800 7,810 2,010 200 200 715 515 35,036 35,036 37,561 2,525 - -5,149 (5,149) - - 5,149 (5,149) $ 35,036 $ 35,036 $ 32,412 $ (2,624) 116 Return to Table of Contents CITY OF CHINO HILLS BUDGETARY COMPARISON SCHEDULE CAPITAL IMPROVEMENT YEAR ENDED JUNE 30, 2016 Budgetary Fund Balance, July 1 Resources (Inflows): Contributions from property owners Transfers in Amounts Available for Appropriations Charges to Appropriation (Outflow): Public works Capital outlay Total Charges to Appropriations Budgetary Fund Balance, June 30 Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) 2,021,100 1,712,900 919,048 (793,852) 23,006,700 21,088,400 8,870,296 (12,218,104) 25,027,800 22,801,300 9,789,344 (13,011,956) 3,916,381 3,916,381 3,916,381 - 21,111,419 18,884,919 5,872,963 13,011,956 25,027,800 22,801,300 9,789,344 13,011,956 117 Return to Table of Contents CITY OF CHINO HILLS BUDGETARY COMPARISON SCHEDULE CFD #9 RINCON VILLAGE YEAR ENDED JUNE 30, 2016 Budgetary Fund Balance, July 1 Resources (Inflows): Contributions Use of money and property Amounts Available for Appropriations Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) $4,285,504 $ 4,285,504 $ 4,285,504 $ - 188,500 188,500 170,427 (18,073) 34,800 34,800 99,168 64,368 4,508,804 4,508,804 4,555,099 46,295 Budgetary Fund Balance, June 30 $4,508,804 $ 4,508,804 $ 4,555,099 $ 46,295 118 INTERNAL SERVICE FUNDS Internal Service Funds are used to account for the financing of services provided by one department of a government to another. Internal Service Funds include the followings: Equipment Maintenance Fund — To account for repair, replacement and maintenance of City -owned vehicles and equipment. Information Technology Fund — To account for repair, replacement and maintenance of City -owned information technology systems and telecommunications hardware and software. 119 Return to Table of Contents CITY OF CHINO HILLS COMBINING STATEMENT OF NET POSITION INTERNAL SERVICE FUNDS JUNE 30, 2016 Governmental Activities - Internal Service Funds Assets: Current: Cash and investments Receivables: Accrued interest Total Current Assets Noncurrent: Capital assets - net of accumulated depreciation Total Noncurrent Assets Total Assets Liabilities and Net Position: Liabilities: Current: Accounts payable Accrued liabilities Compensated absences Capital leases Total Current Liabilities Noncurrent: Compensated absences Total Noncurrent Liabilities Total Liabilities Net Position: Net investment in capital assets Unrestricted Total Net Position Total Liabilities and Net Position 120 Equipment Maintenance Information Technology Totals $ 4,002,693 $ 200,311 $ 4,203,004 526 47 573 4,003,219 200,358 4,203,577 1,391,643 335,743 1,727,386 1,391,643 335,743 1,727,386 $ 5,394,862 $ 536,101 $ 5,930,963 $ 52,661 $ 69,283 $ 121,944 18,677 39,774 58,451 500 2,096 2,596 - 9,274 9,274 71,838 120,427 192,265 19,302 15,566 34,868 19,302 15,566 34,868 91,140 135,993 227,133 1,391,643 326,469 1,718,112 3,912,079 73,639 3,985,718 5,303,722 400,108 5,703,830 $ 5,394,862 $ 536,101 $ 5,930,963 Return to Table of Contents CITY OF CHINO HILLS COMBINING STATEMENT OF REVENUES, EXPENSES AND CHANGES IN FUND NET POSITION INTERNAL SERVICE FUNDS YEAR ENDED JUNE 30, 2016 Operating Revenues: Charges for services Other Total Operating Revenues Operating Expenses: Salaries and benefits Professional and contractual services Repairs and maintenance Service and supplies Administrative and general expenses Utility services Depreciation and amortization Total Operating Expenses Operating Income (Loss) Nonoperating Revenues (Expenses): Interest revenue Interest expense Total Nonoperating Revenues(Expenses) Income (Loss) Before Contributions Capital contributions Changes in Net Position Net Position: Beginning of Year End of Fiscal Year 121 Governmental Activities - Internal Service Funds Equipment Information Maintenance Technology Totals $ 1,147,438 $ 1,387,368 $ 2,534,806 7,968 - 7,968 1,155,406 1,387,368 2,542,774 343,266 418,017 761,283 1,656 505,548 507,204 195,527 89,218 284,745 169,765 19,246 189,011 156,068 183,456 339,524 1,373 1,589 2,962 520,980 92,517 613,497 1,388,635 1,309,591 2,698,226 (233,229) 77,777 (155,452) 86,180 6,320 92,500 - (937) (937) 86,180 5,383 91,563 (147,049) 83,160 (63,889) 65,705 - 65,705 (81,344) 83,160 1,816 5,385,066 316,948 5,702,014 $ 5,303,722 $ 400,108 $ 5,703,830 Return to Table of Contents CITY OF CHINO HILLS COMBINING STATEMENT OF CASH FLOWS INTERNAL SERVICE FUNDS YEAR ENDED JUNE 30, 2016 Cash Flows from Operating Activities: Cash received from customers and users Cash paid to suppliers for goods and services Cash paid to employees for services Net Cash Provided (Used) by Operating Activities Cash Flows from Capital and Related Financing Activities: Capital contributions Acquisition and construction of capital assets Principal paid on capital debt Interest paid on capital lease Net Cash Provided (Used) by Capital and Related Financing Activities Cash Flows from Investing Activities: Interest received Net Cash Provided (Used) by Investing Activities Net Increase (Decrease) in Cash and Cash Equivalents Cash and Cash Equivalents at Beginning of Year Cash and Cash Equivalents at End of Year Reconciliation of Operating Income to Net Cash Provided (Used) by Operating Activities: Operating income (loss) Adjustments to reconcile operating income (loss) net cash provided (used) by operating activities: Depreciation (Increase) decrease in accounts receivable (Increase) decrease in due from other agencies Increase (decrease) in accounts payable Increase (decrease) in accrued liabilities Increase (decrease) in compensated absences Total Adjustments Net Cash Provided (Used) by Operating Activities Non -Cash Investing, Capital, and Financing Activities: There was no noncash investing, capital, or financing activities. 122 Governmental Activities - Internal Service Funds Equipment Information Maintenance Technology Totals $ 1,155,814 $ 1,411,396 $ 2,567,210 (670,866) (661,323) (1,332,189) (492,085) (582,671) (1,074,756) (7,137) 167,402 160,265 65,705 - 65,705 (99,408) (173,522) (272,930) - (11,429) (11,429) - (937) (937) (33,703) (185,888) (219,591) 86,371 6,291 92,662 86,371 6,291 92,662 45,531 (12,195) 33,336 3,957,162 212,506 4,169,668 $ 4,002,693 $ 200,311 $ 4,203,004 $ (233,229) $ 77,777 $ (155,452) 520,980 92,517 613,497 408 - 408 - 24,028 24,028 (302,545) (45,722) (348,267) 4,259 21,180 25,439 2,990 (2,378) 612 226,092 89,625 315,717 $ (7,137) $ 167,402 $ 160,265 AGENCYFUNDS Agency Funds are used to account for assets held by the City as an agent for individuals, private organizations, other governments and/or funds. Agency Funds include the followings: AD #1994 — To account for the collection of assessments from owners of property within the Assessment District 1994, and for the remittance of such assessments to the bondholders as required by the California 1915 Improvements Act. CFD #1 Rollinq Ridge — To account for the collection of assessments from owners of property within the Community Facilities District No. 1 (Rolling Ridge), and for the remittance of such assessments to the bondholders as required by the Mello -Roos Community facilities Act of 1982. CFD #2 Los Ranchos — To account for the collection of assessments from owners of property within the Community Facilities District No. 2 (Los Ranchos), and for the remittance of such assessments to the bondholders as required by the Mello -Roos Community facilities Act of 1982. CFD #4 The Oaks — To account for the collection of assessments from owners of property within the Community Facilities District No. 4 (The Oaks), and for the remittance of such assessments to the bondholders as required by the Mello -Roos Community facilities Act of 1982. CFD #5 Rincon Village — To account for the collection of assessments from owners of property within the Community Facilities District No. 5 (Rincon Village), and for the remittance of such assessments to the bondholders as required by the Mello -Roos Community facilities Act of 1982. CFD #6 Carbon Canyon — To account for the collection of assessments from owners of property within the Community Facilities District No. 6 (Carbon Canyon), and for the remittance of such assessments to the bondholders as required by the Mello -Roos Community facilities Act of 1982. CFD #8 Butterfield — To account for the collection of assessments from owners of property within the Community Facilities District No. 8 (Butterfield), and for the remittance of such assessments to the bondholders as required by the Mello -Roos Community facilities Act of 1982. CFD #9 Rincon Village — To account for the collection of assessments from owners of property within the Community Facilities District No. 9 (Rincon Village), and for the remittance of such assessments to the bondholders as required by the Mello -Roos Community facilities Act of 1982. CFD #10 Fairfield Ranch — To account for the collection of assessments from owners of property within the Community Facilities District No. 10 (Fairfield Ranch), and for the remittance of such assessments to the bondholders as required by the Mello -Roos Community facilities Act of 1982. General Agency Fund — To account for the collection of various fees/deposits from developers for community development projects, and for the remittance of such fees/deposits to the City as costs associated to the projects incurred. RAD 10-1 — To account for the collection of assessments from owners of property within the Reassessment District No. 10-1, and for the remittance of such assessments to the bondholders as required by the California 1915 Improvements Act. CFD Vila Borba — To account for the collection of assessments from owners of property within the Vila Borba development for the maintenance of parks and facilities within the district. 123 Return to Table of Contents CITY OF CHINO HILLS COMBINING STATEMENT OF ASSETS AND LIABILITIES ALL AGENCY FUNDS JUNE 30. 2016 CFD # 1 CFD # 2 Los AD # 1994 Rolling Ridge Ranchos Assets: Pooled cash and investments $ 326,973 $ 430,461 $ 3,950,682 Receivables: Accounts Accrued interest Special assessments Restricted assets: Cash and investments with fiscal agents Total Assets Liabilities: Accounts payable Deposits payable Funds held for others Due to Inland Empire Utility Agency Total Liabilities 124 43 57 526 - 10,908 22,286 - 721,305 1,680,037 $ 327,016 $ 1,162,731 $ 5,653,531 $ - $ 31 $ 226 327,016 1,162,700 5,653,305 $ 327,016 $ 1,162,731 $ 5,653,531 CITY OF CHINO HILLS COMBINING STATEMENT OF ASSETS AND LIABILITIES ALL AGENCY FUNDS JUNE 30, 2016 (CONTINUED) CFD # 6 CFD # 4 The CFD # 5 Carbon Oaks Rincon Village Canyon Assets: Pooled cash and investments $ 9,963,884 $ 2,922,526 $ 1,293,858 Receivables: Accounts Accrued interest Special assessments Restricted assets: Cash and investments with fiscal agents Total Assets Liabilities: Accounts payable Deposits payable Funds held for others Due to Inland Empire Utility Agency Total Liabilities 125 1,312 385 170 283 34,693 5,651 416,665 1,999,526 201,982 $ 10,382,144 $ 4,957,130 $ 1,501,661 $ 5 $ 719 $ 43 10,382,139 4,956,411 1,501,618 $ 10,382,144 $ 4,957,130 $ 1,501,661 CITY OF CHINO HILLS COMBINING STATEMENT OF ASSETS AND LIABILITIES ALL AGENCY FUNDS JUNE 30. 2016 Assets: Pooled cash and investments Receivables: Accounts Accrued interest Special assessments Restricted assets: Cash and investments with fiscal agents Total Assets Liabilities: Accounts payable Deposits payable Funds held for others Due to Inland Empire Utility Agency Total Liabilities 126 CFD # 10 CFD # 8 CFD # 9 Fairfield Butterfield Rincon Village Ranch $ 229,601 $ 801,877 $ 895,848 29 106 118 565 11,211 8,969 103,891 491,500 981,750 $ 334,086 $ 1,304,694 $ 1,886,685 $ 1 $ 662 $ 500 334,085 1,304,032 1,886,185 $ 334,086 $ 1,304,694 $ 1,886,685 CITY OF CHINO HILLS COMBINING STATEMENT OF ASSETS AND LIABILITIES ALL AGENCY FUNDS JUNE 30. 2016 Liabilities: Accounts payable Deposits payable Funds held for others Due to Inland Empire Utility Agency Total Liabilities $ 962,346 $ 820 $ 5,697 $ 971,050 3,381,742 - - 3,381,742 41,220 902,962 584,028 29,035,701 4,385,396 - - 4,385,396 $ 8,770,704 $ 903,782 $ 589,725 $ 37,773,889 127 General CFD Vila Agency Fund RAD 10-1 Borba Totals Assets: Pooled cash and investments $ 8,770,554 $ 550,946 $ 589,725 $ 30,726,935 Receivables: Accounts 150 - - 150 Accrued interest - 72 - 2,818 Special assessments - 2,263 - 96,829 Restricted assets: Cash and investments with fiscal agents - 350,501 - 6,947,157 Total Assets $ 8,770,704 $ 903,782 $ 589,725 $ 37,773,889 Liabilities: Accounts payable Deposits payable Funds held for others Due to Inland Empire Utility Agency Total Liabilities $ 962,346 $ 820 $ 5,697 $ 971,050 3,381,742 - - 3,381,742 41,220 902,962 584,028 29,035,701 4,385,396 - - 4,385,396 $ 8,770,704 $ 903,782 $ 589,725 $ 37,773,889 127 Return to Table of Contents CITY OF CHINO HILLS COMBINING STATEMENT OF CHANGES IN ASSETS AND LIABILITIES ALL AGENCY FUNDS YEAR ENDED JUNE 30, 2016 Balance Balance Ie111EfAifN1 Z! Assets: Pooled cash and investments $ 319,701 $ 7,760 $ 488 $ 326,973 Receivables: Accrued interest 126 43 126 43 Total Assets 7 319,827 7,803 614 327,016 Liabilities: Accounts payable $ 45 $ 19 $ 64 $ - Funds held for others 319,782 7,784 550 327,016 Total Liabilities $ 319,827 $ 7,803 $ 614 $ 327,016 CFD # 1 Rolling Ridge Assets: Pooled cash and investments $ 360,131 $ 417,290 $ 346,960 $ 430,461 Receivables: Accrued interest 68 57 68 57 Special assessments 2,216 10,908 2,216 10,908 Restricted assets: Cash and investments with fiscal agents 721,303 214,980 214,978 721,305 Total Assets $ 1,083,718 $ 643,235 $ 564,222 $ 1,162,731 Liabilities: Accounts payable $ 24 $ 8,284 $ 8,277 $ 31 Funds held for others 1,083,694 634,950 555,944 1,162,700 Total Liabilities $ 1,083,718 $ 643,234 $ 564,221 $ 1,162,731 CFD # 2 Los Ranchos Assets: Pooled cash and investments $ 5,157,600 $ 2,184,792 $ 3,391,710 $ 3,950,682 Receivables: Accrued interest 984 526 984 526 Special assessments 19,031 22,286 19,031 22,286 Restricted assets: Cash and investments with fiscal agents 1,676,080 2,158,076 2,154,119 1,680,037 Total Assets $ 6,853,695 $ 4,365,680 $ 5,565,844 $ 5,653,531 Liabilities: Accounts payable $ 356 $ 30,823 $ 30,953 $ 226 Funds held for others 6,853,339 4,334,857 5,534,891 5,653,305 Total Liabilities $ 6,853,695 $ 4,365,680 $ 5,565,844 $ 5,653,531 128 CITY OF CHINO HILLS COMBINING STATEMENT OF CHANGES IN ASSETS AND LIABILITIES ALL AGENCY FUNDS YEAR ENDED JUNE 30, 2016 (CONTINUED) Balance Balance 7/1/2015 Additions Deductions 6/30/2016 CFD # 4 The Oaks Assets: Pooled cash and investments $ 9,892,766 $ 310,935 $ 239,817 $ 9,963,884 Receivables: Accrued interest 1,816 1,312 1,816 1,312 Special assessments 277 283 277 283 Restricted assets: Cash and investments with fiscal agents 421,614 183,234 188,183 416,665 Total Assets $ 10,316,473 $ 495,764 $ 430,093 $ 10,382,144 Liabilities: Accounts payable $ 656 $ 6,659 $ 7,310 $ 5 Funds held for others 10,315,817 489,104 422,782 10,382,139 Total Liabilities $ 10,316,473 $ 495,763 $ 430,092 $ 10,382,144 CFD # 5 Rincon Village Assets: Pooled cash and investments $ 2,708,436 $ 2,612,625 $ 2,398,535 $ 2,922,526 Receivables: Accrued interest 498 385 498 385 Special assessments 16,931 34,693 16,931 34,693 Restricted assets: Cash and investments with fiscal agents 1,502,976 2,409,306 1,912,756 1,999,526 Total Assets $ 4,228,841 $ 5,057,009 $ 4,328,720 $ 4,957,130 Liabilities: Accounts payable $ 180 $ 13,825 $ 13,286 $ 719 Funds held for others 4,228,661 5,043,185 4,315,435 4,956,411 Total Liabilities $ 4,228,841 $ 5,057,010 $ 4,328,721 $ 4,957,130 CFD # 6 Carbon Canyon Assets: Pooled cash and investments $ 1,241,107 $ 329,404 $ 276,653 $ 1,293,858 Receivables: Accrued interest 228 170 228 170 Special assessments 4,432 5,651 4,432 5,651 Restricted assets: Cash and investments with fiscal agents 201,981 196,694 196,693 201,982 Total Assets $ 1,447,748 $ 531,919 $ 478,006 $ 1,501,661 Liabilities: Accounts payable $ 82 $ 17,122 $ 17,161 $ 43 Funds held for others 1,447,666 514,797 460,845 1,501,618 Total Liabilities $ 1,447,748 $ 531,919 $ 478,006 $ 1,501,661 129 CITY OF CHINO HILLS COMBINING STATEMENT OF CHANGES IN ASSETS AND LIABILITIES ALL AGENCY FUNDS YEAR ENDED JUNE 30, 2016 Balance Balance CFD # 8 Butterfield Assets: Pooled cash and investments $ 2,092,392 $ 180,449 $ 2,043,240 $ 229,601 Receivables: Accrued interest 385 29 385 29 Special assessments 3,878 565 3,878 565 Restricted assets: Cash and investments with fiscal agents 187,961 1,954,428 2,038,498 103,891 Total Assets $ 2,284,616 $ 2,135,471 $ 4,086,001 $ 334,086 Liabilities: Accounts payable $ 139 $ 6,084 $ 6,222 $ 1 Funds held for others 2,284,477 2,129,387 4,079,779 334,085 Total Liabilities $ 2,284,616 $ 2,135,471 $ 4,086,001 $ 334,086 CFD # 9 Rincon Village Assets: Pooled cash and investments $ 716,068 $ 874,076 $ 788,267 $ 801,877 Receivables: Accrued interest 132 106 132 106 Special assessments 17,673 11,211 17,673 11,211 Restricted assets: Cash and investments with fiscal agents 491,500 574,041 574,041 491,500 Total Assets $ 1,225,373 $ 1,459,434 $ 1,380,113 $ 1,304,694 Liabilities: Accounts payable $ 57 $ 10,054 $ 9,449 $ 662 Funds held for others 1,225,316 1,449,381 1,370,665 1,304,032 Total Liabilities $ 1,225,373 $ 1,459,435 $ 1,380,114 $ 1,304,694 CFD # 10 Fairfield Ranch Assets: Pooled cash and investments $ 859,263 $ 996,129 $ 959,544 $ 895,848 Receivables: Accrued interest 158 118 158 118 Special assessments 5,127 8,969 5,127 8,969 Restricted assets: Cash and investments with fiscal agents 981,750 1,894,278 1,894,278 981,750 Total Assets $ 1,846,298 $ 2,899,494 $ 2,859,107 $ 1,886,685 Liabilities: Accounts payable $ 57 $ 6,709 $ 6,266 $ 500 Funds held for others 1,846,241 2,892,785 2,852,841 1,886,185 Total Liabilities $ 1,846,298 $ 2,899,494 $ 2,859,107 $ 1,886,685 130 CITY OF CHINO HILLS COMBINING STATEMENT OF CHANGES IN ASSETS AND LIABILITIES ALL AGENCY FUNDS YEAR ENDED JUNE 30, 2016 (CONTINUED) Balance Balance General Agency Fund Assets: Pooled cash and investments Receivables: Accounts Total Assets Liabilities: Accounts payable Deposits payable Funds held for others Due to Inland Empire Utility Agency Total Liabilities RAD 10-1 Assets: Pooled cash and investments Receivables: Accrued interest Special assessments Restricted assets: Cash and investments with fiscal agents Total Assets Liabilities: Accounts payable Funds held for others Total Liabilities CFD Vila Borba Assets: Pooled cash and investments Total Assets Liabilities: Accounts payable Funds held for others Total Liabilities $ 6,503,187 $ 7,809,326 $ 5,541,959 $ 8,770,554 - 150 - 150 $ 6,503,187 $ 7,809,476 $ 5,541,959 $ 8,770,704 $ 78,473 $ 4,026,098 $ 3,142,225 $ 962,346 3,319,533 2,578,629 2,516,420 3,381,742 110,204 2,255,023 2,324,007 41,220 2,994,977 3,051,385 1,660,966 4,385,396 $ 6,503,187 $ 11,911,135 $ 9,643,618 $ 8,770,704 $ 427,110 $ 548,490 $ 424,654 $ 550,946 78 72 78 72 3,406 2,263 3,406 2,263 350,500 386,648 386,647 350,501 $ 781,094 $ 937,473 $ 814,785 $ 903,782 $ 38 $ 18,953 $ 18,171 $ 820 781,056 918,519 796,613 902,962 $ 781,094 $ 937,472 $ 814,784 $ 903,782 $ - $ 650,600 $ 60,875 $ 589,725 $ - $ 650,600 $ 60,875 $ 589,725 $ - $ 16,234 $ 10,537 $ 5,697 - 634,366 50,338 584,028 $ - $ 650,600 $ 60,875 $ 589,725 131 CITY OF CHINO HILLS COMBINING STATEMENT OF CHANGES IN ASSETS AND LIABILITIES ALL AGENCY FUNDS YEAR ENDED JUNE 30, 2016 Balance Balance Totals -All Agency Funds Assets: Pooled cash and investments Receivables: Accounts Accrued interest Special assessments Restricted assets: Cash and investments with fiscal agents Total Assets Liabilities: Accounts payable Deposits payable Funds held for others Due to Inland Empire Utility Agency Total Liabilities $ 30,277,761 4,473 72,971 $ 16,921,876 150 2,818 96,829 $16,472,702 4,473 72,971 6,535,665 9,971,685 9,560,193 $ 36,890,870 $ 26,993,358 $26,110,339 $ 30,726,935 150 2,818 96,829 6,947,157 $ 37,773,889 $ 80,107 $ 4,160,864 $ 3,269,921 $ 971,050 3,319,533 2,578,629 2,516,420 3,381,742 30,496,253 21,304,138 22,764,690 29,035,701 2,994,977 3,051,385 1,660,966 4,385,396 $ 36,890,870 $ 31,095,016 $30,211,997 $ 37,773,889 132 City of Chino Statistical Section Chino Hills This page intentionally left blank. 133 Statistical Section This part of the City of Chino Hills' comprehensive annual financial report presents detailed information as a context for understanding what the information in the financial statements, note disclosures, and required supplementary information says about the City's overall financial health. Contents Pape Financial Trends - These schedules contain trend information to help the reader understand how the City's financial performance and well-being have changed over time. 1 Net Position by Component 136 2 Changes in Net Position 137 3 Fund Balances of Governmental Funds 139 4 Changes in Fund Balances of Governmental Funds 140 Revenue Capacity - These schedules contain information to help the reader assess the factors affecting the City's ability to generate its water revenue, property, and sales taxes. 5 Water Revenue - Charges for Services 6 Assessed Value and Estimated Actual Value of Taxable Property 7 Direct and Overlapping Property Tax Rates 8 Principal Property Tax Payers 9 Property Tax Levies and Collections Debt Capacity - These schedules present information to help the reader assess the affordability of the City's current levels of outstanding debt and the City's ability to issue additional debt in the future. 142 143 144 145 146 10 Ratios of Outstanding Debt by Type 148 11 Ratios of General Bonded Debt Outstanding 149 12 Direct and Overlapping Governmental Activities Debt 150 13 Legal Debt Margin Information 151 14 Pledged -Revenue Coverage 152 Demographic and Economic Information - These schedules offer demographic and economic indicators to help the reader understand the environment within which the City's financial activities take place and to help make comparisons over time and with other governments. 15 Demographic and Economic Statistics 154 16 Principal Employers 155 Operating Information - These schedules contain information about the City's operations and resources to help the reader understand how the City's financial information relates to the services the City provides and the activities it performs. 17 Full -Time -Equivalent City Government Employees by Function/Program 158 18 Operating Indicators by Function/Program 159 19 Capital Assets Statistics by Function/Program 160 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. 134 135 Return to Table of Contents d 136 O N coIA to m M M m co 00 00 V O M O IA T V I` O O (fl M (c r N r O M N (c tD r co 0 N N O Cn w O O N O (0 co N M V O M P* to N I, M (fl r N IA O 00 cq O O cc N r N O 00 O M to V A) 00 LO V O N M O O O N UA V O O M N V) V) V) V) V) V) IA 00 OM N OM (fl co r -w N V W m( (fl (fl 0 O a 00,- 00 O N V c) V OIAO N V W 00 00 Cn co CD O lA O) N O O O r O co (fl CD r to V P.. lA V (fl 0 W co IA V N N N O) O N CD O co O) M O) O) O V Vr N N O O O N V V co 00 M a V) V) V) V) V) V) CO coo 0 0 0 CND t` V N MV 000 W lA O N 0 V a O N MIA a M lA Cn It (fl I` V O O M O M O N to co CD M O V 00 00 I` O CD r (fl � r O co O M I` 0 N WO CO c) V V I- CO CO LO M O N M O 00 r CD V W O M a V) V) V) V) V) V) O M V r O (D CD O V O M V 0 O N Ie V O � O M W N lA (fl M V V co r to IA O O M N N 0-4 M r N M to O N 00 O V V co CD O Co Cn r M I` V N N (fl c Pl r C14 N N V O C11 N 0 (0 CO 00 0 V 0 0 0r- 00 Co N 0) N N O 00 r co M co r co a V) V) V) V) V) V) OI` r OO (flM co 0 rO COO COM O N O N 000000)I V I� O r -.c) V O O It N M 00 O O 0 r M O V 00 O V co O M r Co O a Co O O N V 00 MCD O� 0 w N V V O N � 00� O IACD N 0000 R CON N c) N M (0 r r r co CO 00 M a } V) V) V) V) V) V) U N 1-M N N l0 M l0a M 0O M 00000 0 � l0 CD (fl N 10a LL r 1� M N N Mr O t` O r � O IA N O co V for O M� M c) O H O CD M O NIA of V' co (0 l0 00 O (fl V O N O00 I --CD N �� N O COQ CO N N N M r r N 00 M a V) V) V) V) V) V) V O co O V co O r co r-- 0 O O (D 00 N 0 0 0 O00 IA V M O l0 V0 O� V N O 000 V (D 000 CD 00M O 0 CO CO N M N 1-M co OCn r N 0O Or cO M cO O Cn -rN N O O N- N I-- 0 � 0 0 : (D N N N N M t` O r WM O Ln M N V) V) V) V) V) V) N WW co N 00 O (0 M O N 0001- O (0 1- 000 MN IA OOH O MM OIAr T O Co 00 .4N �� 0 0 O O co O IC O to O It N 0 0 0 co 00 00 r 00 0 0 00 NV O N N 0 0 M l0 IA N I-- 0 N co N N MI� N M O r O N O N M N V) V) V) V) V) V) N 00 V O 1-. r M I- CO N N (fl O V N OJ N - (fl - O 1-- C0 [- (fl (fl O 00 0000 Coco O C0 O0 O O M O I A N V Il � O O (D N_ CO (fl r O O N to O O N N co N 0 M CO 00 N N N � co V N N M r 00 M N a co N V) 6% V) V) V) V) O 00 Co C0 00 (0 V 00 O ( M co 2 � (fl- C0 O I` M N O NM O N co CD 10 OOH I� O O co 00 V N V V N N O O p V O00Ce) W l0 (fl O 0 co V O NCD rG7 M V O CD N V- V r V � (0 0) N t0 r V I --Na N M O (fl CD r V 1--c0O co N V) V) V) V) V) V) C O N 0 O Q O O V1 O N Q C y Q y a� co rn y y N V m R C C N V y CL N N E N R> cc R U r 0 0 (0 C U E 2 N N N N E a) O) m R y V R y E N O N N C p- N N N C O R N N r N N O N N U R .V .0 p F ` r' C- r�+y V OZ 0'Z) 0 �Z 0'Z )- £ Z 0'Z) 0 i m a 136 Return to Table of Contents d y V I N M M O LO N Ln r N N M N O I D d) N LO M 1n M O M IS N� M N M M N I� N O(OI o o)O ( O (O N NONIS M M N M N O) N M V V O V O In O In V V V N M M O7 O (A N M V (O O O) I� M M O I� 1n N O r M (O M V N V O CON N M N O V V N N I� N M V N" M M M M N O7 C M I� r r N 1n V CO NM M (V V (V M V N N N N O M N I� N r V I� O O N N M O M V (h V r V CO OJ M M CO N M M V7 69 H7 U) N I 0 0 (O O M M O M N N N N N V I (D O r V M MCO O M N M M N N CO N M O M V COC N CO N V I- V LOM V CO OD LD r rr r N M V7 CO M N NM N N d' V N N CO V V N I� N N O N M l0 1n In r CO M V N V (O N N M I� O N V p V I� CON COM CO M N r V M 10 O r V o) r, N 10 r 10 N I� CO V CO 2 (O M M N CO N 0) r CO M M M CO N M H7 (fl U) H7 I� M S N O N M M N V M CO N LO M N O I� V' CO M OD 10 M � O N 10 M N N N M CO I� M M O I� i0 CO N M V N I� 10 M M M I� N I O N r N M O CON N M d. V N M 10 CO r CO V CO O o CO V V V I� (O I� M r V N M (D M M I C M ( M I� O ( 0 0 (V O N O I� M V M p I S N (O N M O N C O (D N (O N M N N � M N o— N (1) V (h — CK N CO N CO CO M 10 M CO N N M fR Efl H7 H7 COM N COO N V M OM O(ON CO M CO M CO M O N I� (O N N I� N M N M O I� V N V T (O CO M (O V N O (O M M M N N N CO (O M (O r O (O r r CO (y M M� O I� CO V (O I� ISN MOON O NOIR O N M N V V N O M V N N N M N V (D MV I� N V (O p CO V N I� O M M I� O co V V N I� N V O N M N N V N N N (h V- (() N (C) (� - (n r V (T N M (n M N M CO N N M N N N (O V7 Efl H7 EA CO (O V O (O M (ON _ N r (O r 0 V N N M M O N_ V CO V (O (O r CO r M M M I� N (O r N N Q N M N N M N (O V V N N r- N M M (O N M M O O N N N CO CO NI "O N O N M N (O (1) (1) N V MI "M OM M V M M M LO NM N NN N NLO N M N p r" r (O O r o M (O M M M N (O MCO " r- M M (O M I— r N O— O N V O (O N V (O (O N N O (n N M M N N N N M N N (O R } V7 fl H7 A R (V0 N M I� M M N N N O N O I� N M r N N O V N' (O N LL N N V M (O N CO N V (O (O O M r (O O M M CO (O M N O M M N M N O O N M N 0 1 (O (O (O N (O (D N (O N p LO (ON O V M d' (O r O V N 0) N N N N O M r N M O V O N O N ISM ON V COM (O 0) (OO M V O 0 CO N (O N N O CO V N N N N O V (O V N N 0 (n V O (C) r- oz� V (O V (T r N (n M M N N (O R 69 H7 EA N N V V N (O M dT (O (O (O V N N (O CO O M N I� O M N N O M M N 7 N (O V OI� r N V M N M V I� O M M M V I" O N N (O O (O r N M (O I� O I N p V CO (O COM V M CO N r N p M M j r (O M (0 0 V I� (O M N N M OD O M CO M OD O 0 M V O (O N N O p CO CO (O N r M � N N � N M CO N I� O (O � O A V N M M N M— N V V O M (n (P M (n V (O O O N (n M M N N N N N M N N V7 Efl H7 H7 O O (O V N N O O O N O N N M V N N N M V (O r (O B V I N N N I� M N N N O M O V N I� N (O M (O dT r- M O N M (O M M N N (O O_ M_ M (O (O " co N I� M (O M O) M (O r CO (V N T M I� N M (O V N I� (O 0) I� N O I (O (O N N N M (O N N M M I� 0 0 � ( O N ) 0 N M O (O (O r( N M M V I S N (O N N N O( V (O N M N M N I" N O V O V- V O (n (O O (n V (O (T M N (n (n M M M I N N O N N LO V7 (fl U) U) N N V N (O N (O V M (O r V N M (O M I� N M N V N (O O N CO N I� r V I� N M M (O M M M M N O V— O_ O N N M NO M V V N M V CO w V N N O N N N N (O r M O N O N OCO N O V CO N V CO M (O N O (O r M M V M O M O N M" M M M M N I N N O N I- N N O O CO N r O M N V N (O r V N O7 (n V N (n N N co V- V O N (O N r N V M N w fl H7 t NN CON LO V (O M O (O NN (OM NCO M N r N O " I� (O N (O M N (n N V M" M (O MV N (O V �_ (O N N N M (O I� V V M N N M M N (O M (O (O O N M M O M N N N O V N N N M 7 p M CO CO M N (O CO NV i V I� (O M V (O N O OO ONI�(O N O (O CO N N MI_ MO NIS r (ON M N (O m V M (O CO V O (O (() V M M (n r r M u) N r N M N N w (? w EA n N C r j N a) O d H �C (00 C (0 C N d a)m O O X W K N N d O` to a) W C d to d C p�j > C O O a) U :_• C 07 N> C 0> ? 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(n �` > m o c E E O o_ o m a� of Z' = C R C (0 U C C O C (n (7 a a U U N m m c t ll N N (0 to V N F c �cY a�ia�aci��oo� (7 ��� m a ��L o_m (7 �L m m a` �,m ,� a>C7aa00 m�� rs p >O 0C) U R UUP'.° w(7 m F (Db In F 137 &0 O N M N V O) V' N N_ O' O N O N N O O O O N M 1 n N N N r N O r O M N V O V N CO r r N r NCO N N r M M V N N N co V - V N N N N N V V N M N O O N r COM O O M r M V O N r N N O V N M oo Ln r N — V LO (3) V V co fA GO V) (fl (A (fl V N N 1n OOH MO Mr N OM M E M LO V O V N V M In V O r O M N O V O M M O O N O N O V r N V N N N r N N r- r V M O (O N N (h N N V Lo O N (h r M O O N O O N NMN N Ln 1n M M M V O 1n V M O r M r r T V O O LO O 10 LO fA Efl fA Efl EH Efl N O M LO N O N M Ln O V O' LO M N O V M Ln O N Lo N N Ln M Ln V r M N O"" Ln LO O N r M r N r O O Ln O N r r LO M Lo O LO O N N O N N M r V co O O O N M co N N O M O N 0 0 0 O O M M M r N M V N M N N N M V O r M N V V co V N r N N M N r V N O fH 69 fA fA fR EA ;�:, N M N V V N r ' M O N' M O N N r M M O V M M O N Orr ( N" N N N V r M N O N N co N N M N N r V M N CO N N Ln co N O N CO N V O V M N O O M N r Mr O M O) Ln N N O V M N O O M O N M NM N O N V V M V O N N O (O (V M (h (h (D M V N fA GO V) (fl (A (fl r N O O O O O O M N ' N M' N r O N O O V O O M Lc) r r N N V Lc) N (O O r O M M M N LO O N V N V M N Ln Ln N O r N O r (O O V M (O N M r M O V O V (1)I N N N N O M N N M M V" r M O M M N O COO N N O N O O (O N - V V N h M (O ( EH 69 fA Efl fH EA N N V V r N M O Ln Ln N O' O O O r M V N r V N V M V V N r N N N M N V M N N r O O O N O O N O O r N M N O N co V M N N O Ln V LO V N N O co N r LO N r V O N O N M N V O O CO LO N M V O N V r V M O N M N r LO M N N V co co r O N N N M V N O fA GO fA 69 fA Efl COM O r O N r O M ' r O r' O N N (O r M LO N N N r O N r N O V N N N O N V LO N N N N LO r N N M (O M M N N N O r N O r N r O O N CO N O M M Lo V r r O N r M N O N O O V O M O M N N O M O N V O M r N O co V N r O O O M LO O LO N N N M M N O M M � N N EH 69 fA Efl fR Efl O Lo LO O r N ' Or r' V M M N V O LO O M N N N N C O O r LO V O O M M V N M N M O M O V_ M O O O LO O M O V V V r O N (1) _ O" O V W V N N M N V V N V N M O V r N LO O N r N N O LO N N M V N M V N M O V M O LO N N N V V O M CO fA Efl fA 69 EH Efl V N N LO —o O V N O O' O O LO N N M N N V M V LO O O V V N M r V M N N O M r N r V N r N N O O O O O O V N M N N ONO O N N N O N r N N O O LO LOM r N V N V" r M O V LO N M N M N N" V N N r r V O N O LO N N V N N V N M N fA Efl fA Efl fA Efl N O r O O r V O O N N O r M N O N N M r r N O LO O N N LO N N O O N LO N V O r V V O O N O Lo N M V V O M r O N V O N N - N r LO N M O M r N O r M N LO O T V O M O NN V r V M O LO O N N r N r O N M LO V N O O L O N N L O N N r O O co V LO N N O w fA w Efl fA fR C O y O a v m 0a Z a) c N N 1 C. 2 N X W R t C N U d U Z � r y> O' U U N O E y N E N O Q N L1 -y0 to E w E > > > > > �- o -o C R ) oa 0— d' N O -p a) C (o '� U R to T > O > C U O Q Q C'I C Q T ( co w U N a N N ~ d Q Q C'I N N d Z' > N L N CO j C _ d p R N (NA Z N d d N~ K N (1 N C L . CO N N ~ C C E N~ E C d U) lL D 6 p O w. j N R C� O 0 U` N N L m d C N d O j 7z a O )C N N C L_ � .� D (9 d ZC7m O F R 0(D - x(90 o F m F F UC7m F 138 Return to Table of Contents 7 co r- r - O m (O LLQ N r, C7 (O LC) O V O r- O r- O M r, N N N (fJ N co O V (`') LO N V 7 LQ LQ N N NN r— LO O V LO C7 N O CO (O ER C7 c, 0 C7 OO LO CA LL) M LC) r— CA 7 I� co O O N (O LO 7 ER Lf r— O O O O (O N 7 O (O N N CA LO M N V O) r, EH N OO 7 O O O N O O C7 co (O V V N O N V O 7 (O V 7 69 O (O CA 7 N M (O N O m O LO 7 O O CO 7 (O (fi N (O r— N N N r LO MV N (7 r: N EH r— O i i i i O r- CA C7 V O C7 N (O 7 KJ (ON O C7 r, LO 7 (O O rb r� oc O V EH "r 0 rn r` 00 00 r,r,O M O) M � � O zr V M EA 1 ER O O (O 7 N O C C 7 — r- M LL C O 7 O O C � U N U Cr E rb E O N N N O > i LN6 ER f6 .-. LO N N N 6 _ 2 1i LL> Nt U `c c m d p F T T o 01Dz0�UQ U_ C7 (O 7 L6 £ U LL J O 0 U H "r 0 rn r` 00 00 r,r,O M O) M � � O zr V M EA 1 ER O O (O 7 N O O r- M N O O 7 C Cr Cr (0 rb (') N EA ER (O .-. LO N N C) ER CO N (O V co O O (O V LO N LQ O C7 LC) C7 (O (`') N EA ER C) C) M O r, O Lli O) LO i) N I� O (O M N Lf) co r CO r EA ER O LC) r (O N r— O V C) (O LC) N N O CA V O LO N EH N ER LL') N V (O I�O LO M ( ) V co W O 7 N 7 N V O M N I, W (c O C7 ) O V N M ER (f3 ER O N N N N LC) O (O V LO N LQ O C7 LC) LO CO r— r— O N V (O r— N CA N LO LC) O C) r, N O 7 co N O O O O V 00N EA O L2 Lli ER 7 CA N ' ' (O CA N ' LO M co CA LO N 7 N V M N (c N (c O (O V N (f3 ER N N LC) C) O C7 LC) r— N V (O O LO LC) O 0) 7 co N O O O V N O L2 Lli r c') ER " ER O 0)0 O O Lf) V N O O V CO I- O(O 11 O r— � L2 r- 61) " ER 139 Return to Table of Contents u m w O O m L0 N V O V m V V O I- I- lO n M r O 0) M 00 O) V 0 (O N N O V I- CO ' m I- r O O) M (O ''' (O 00 00 N W o O V (O M O) V L0 O lO (O � O) W N O r V (O of V 00 00 M N 00 O) 0) 00 N O N N (O O CO � r � O) 00 N LO (O N O) (O LO O) 00 N00 00 I- (O V a0 (O (O O O L('J O) O O) 00 O N w V N N 00 O oc OD O V O) V V M N n O O M N I� M V V V oc ( M w N r V LO O r W O) O L° O 00 r M O ms O) O O_ N N 0) N 00 �'' 61) (A O) O N O O O O M O V V I- LOO 00 (O O) 00 V M N N 00 O M LO I- 00 (O I- 00 O 0) N M N LO 0) O LO N M O N' ' LO a0 00 N V 00 (O O O o LO N L0 Cb r O) O O) V O O N r a0 O) O M V Oc L0 N L (O O O M O) M V V 00 (O 0) O V M V N L° V V I- r 00 W V 0) L° O O) O M 00 G N O N00 0) M 00 M M O) O) 00 O) L° I- V N O) I- O M M N V N O V L° (O W O) V LO N V l° N V V V N O 0) O N M O) V CO N (O — (O a0 N N M (O O) CO V LO N N N O a0 M 60 Efl V N V O 00 N O) (O O) 00 M (O r r lO O r O co ' I- C9 co O ' 00 V o O) N (O — O) M I- m r O N I - r L° — O) 00 V O 00 I O) CO O A N O O) I- l0 B O O O) r r lO N r V 00 LO M (O (O O) O O M r N r M t` CV OV a0 00 a0 r M O) V CO M n LO CO (O V 00 V M 00 00 L° O 0 00 N O r O O) O N 00 O O 00 (O 00 a0 lO a0 V O lI7 00 O I'. N V M O LO r V I- V N M I- N O) lO V L0 O O) O N M M (O � O (O M V N 00 I- lO V l0 LO N co N CO EA (fl I� N (O O O V O O l° N M 00 W M r 00 V 00 co ' N M O V N' ' ' 00 In o a0 LO O r CO LO CO a0 00 M l° lO N (Q O) L0 ( O V N I- O) V M N LO L0 O) V (q V OO M 00 I- r O V M M V V LO O M O) V O 00 (Q 00 M l") O O 00 CO LO r 0) I- O N S CO V 00 O 00 N LO 0) N O) co LO N V I� O O M V co co W co 00 "T V O I- O I- V N M O V V CO O M I� (O r LO (O r a0 O N N M (O 00 00 O O) V (O I - M V N M N V Ln N O L° lO M N N O) N O M M (D r lI7 O lI7 V N l0 r N LO EA Efl I� O) N O N LO CO N LO (O 00 LO LO (O V LO V () CO M N O O 00 r r LO O O) 00 O O) O CO V LO ' M O N O) O O) V V M' ' ' N LO CO O o0 o 00 O � L0 O) L0 N O) M _ (Q N N M r O0 O) W O (fl (q V N O) V rl rl 06 N _LQ V I- O 00 L0 O co M 00 r O) 00 O r r r O V W O 0 M0I-Nr N LO O)0)0) M V OMO O)00 O) 7 �O� 00 i - N O) (O O N O M LQ LO LI) 0) O LI) Oc M M O (O -- O0 O) O) LI) co 00 LI) LO c ) 00 M V r r r O) 0 r O r In 0) R N o0 V co V M M M 00 00 O V 00 O O M M LO N (O ' r M O O M' ' L° 00 l0 0 LL O I- O) O M V O O O) W 00 I- 00 O O O LO N (O O) I- CO 00 V M I- (O N r- M M M O O) V O lO 00 V oc c c 00 rl W O0 O 00 r M (O o0 I- CO LO 0) (O O) M O (D r 0) M W r M V O) N O) I� (O V I- M N O O V 00 I� O l(J O M O M O N V L° O N O) LO O) (O O V V CO N V (f) r O M ClLO O) oc O) (f) (O 00 LO M 0) M — � O) M M O N LO — N M O) I� r _ I� r V N CO U3 Efl V (O 00 N_ V V V M M M O) O) V LO O ' CO I- M M M ''' M O o O N O00 00 O L0 00 M N (O r l0 N I- — O N LO ( Cq V O O 00 O) N 00 V L0 O) O N N O) (q O) L('J LO O 0) N CO LI) Oc V M N O) N 00 M G W M V O 0) O O CO M M 0) M N (O r O) N V 00 V L° 00 I- 00 0 00 M O O W O) O) N M M 00 N O V (O V 00 00 O I- O) O 00 00 N 00 (O I- N O V O (D (O O N O) V O) M M O) V M O (O V 00 M 00 V 00 LO O) N N r N LO I- V M V N 61) ER N I- CO r (O 00 V 00 V O V V O) � N N O ' CO_ M O N O' ' ' V O) o O a�ONM0 w0 O N O) O _ O O) O) I O0 O M O N V (O N N V N O O O N 00 r- C-4 N LO O 00 O) V V N I- V N 00 L° M M C N O V 00 V O O) O (O V W r N00 N N L° LO M l0 M O N LO O) I- 00 LO O) LO I- M O LO V L0 CO M O O) M L° r O N I� L0 O— O V O CO M 0 W O) V M I� M O co O W O a0 O O) O 00 LO r LO N N N O (O I-- r a0 O O') M O) V N N N N V M r - N EA Efl M N M M N 00 V O O r (O V CO 00 ' N O N N 00 ' ' ' 00 O o O)I- r r w O N O O) M N O0 V O) r- O) -- r 00 O V N O O) O — M V 00 O) w O O) (O M 00 V O) O) LO N LO N N N CO 00 O 00 00 O LO O) O LO 00 co a0 N M O) 0 V O) I- V O) O) O) O) LO O 0 O C9 LO O 00 N (O N M ) 00 00 00 7 O O) N O I,. LO coNO) N LO LO I- O O O r- O N r LO N LO — CO O CO — LO O O O LO M O N LO O O CO N LO O V V co V3 Uj V V I- LO W CO CO V CO 00 I, N_ NCD O N 00 (O r 006,1- ' L° ' 00 LO o N NO L° I� O LO V 00 M L° 00 M N O) N O) N O O O O) lI7 I- N L0 I r O) O) M r r LO O) L!) O N O) r O N W O co V O) r- CO M V O M 00 n p V00 (O O) LO V I- I- LO O LO 00 M 00 Cb LO N V O) O LO O LO N C N r CO M O) 00 O (O N LO O) VL I- V O LO L0 O) M O 00 L0 L0 O l0 V O L0 M O) O) 0) M N V N O) V M LI) O O O V V 00 O) O LO N 0 0 I- O (O M N 0 M O V N N V N V 00 00 M O O N N N N O (O Q9 V) N c 7 LL R c d Ca1 c N - C N OA °0 C7 E2c N m O U ° c ° ° > w N0 V O N R O N > N N N 07 N U O rte.. U ` U w0 N c N r N C Q N N O O U C y Q U y N O c (0 c N i R O' O V E N N O x C^ ` N 0 N R O C N' > Z E ° N 0O "O LT (0 L C N m� .w Q N E U N Q d -O E N "00 N U .V O N (0 N N c -O ' N 2=} i E d C E w O O) w w >` d N C im N E E C w cc N Q V U O" N N m N O 'E 'E U C co N N: 'a CNA O c 0 "O N N O iy = N R CONN_ N T C E c O N N d �0 fA O j N CA W CA N U' E - w c c N c V Il L' -O fOA c c N fA (0 E O O O O c° O c U U E E O Z '' N. ,O- CA d c N N a`) c" O d "NO R N O U. 'Z N U m y d 1 O Q> w a 5 c 5 E m N r O N v o o U '� °� a N> x ° w w .O-. a 0 w N N° °� L o Q v o= F o o w o ami .�° C7 a a U U a` p °� w a L °° m ° N a L R v1 0 .� > N 10 > C N C y O. O o o° CO d N o « U L U x N O) d (p O_,U L N O .0 O CO O U (i p K O L H H J O O c -0 c N (n UUJ £ LL'H (nJ �UpULLU�� f H W H H Z p 140 u fig 141 Return to Table of Contents LO d r-- r-- CMLOr-- M ti N M M r r N LO ti N ti CO O ti CO r -- co co 4f) Lf) Lf) co N N co co co M M O Lf) CO N'tt M C r C tiCl Cfl C O7 O7 00 N r F -CO ti CO ti M O M CO ti M Itt � M qzt M � LO r CO LO Nt ti LO N N 00 M N CO N N ti O7 M N 00 M M M ti y d O M C LO r ti ti M LO N r r �N M LO LO M LO � N CO M N N N N N N N O� U 60 r ti LO Itt LO 0 0 C r C M M N N r 0 r LO 0 C M M M M CO N O M O a) a) M r L() C N r 2 r - L() L() E V CO ti CO 00 N r N 00 i 'j r r r M M� N I� Lf) 00 d r r r r r r N N N r c N U C9 C M C M N 00 N ti CO O LO M M M r M ti M M LO f4 LO M M M M ti M N LO %.. V d Nt CO A N O M� CO � 00 Q M CO CO r N LO 00 r ti LO E j r N't:t M r ti M r M CO 0 co co c) M co M co Nt LO LO � U N M r r ti M N r 00 � ti ti n Cfl O Cfl M 00 N ti V Q M ti M r C M O LO O M O LO M N M C r C ti r ' cr ticr ti M O O 00 O M r r r N CO LO ti 00 O7 r-- - — r— r r r— r r— r d fC L ti M M O r N M'tt LO CO V C C C r r r r r r r to d 2222222222 M>- N N N N N N N N N N 142 a) L 0) � T CU U L a) � U LL C a) _ a) LL cu O a) a) U U M LL a) a) U L a) � 21 L CU r � r U C N LL c � >' a) C L � �MM W y C a r a) c) Q LL a) LL 0 ~ C a) U N U LL M LL LL E a) O �. U LL Q a) V � 3 AS, O O O co Z I" Return to Table of Contents w Q +� 0 0 0 0 0 0 0 0 0 0 c�a x d 0000000000 r r r r — r r r r r 0 g m F- Q (O r 0 0 I� 00 M 00 CO O M CO LO O LO M O O r r M I-- LO M O I-- M I-- ti CO C N r N M 4 M N 0 00 CO Q 0 0 0 0 0 0 0 0 a0 a0 E Q x LU UDI CO M 00 r CO N O O Lf) N M 00 N 00 00 I� ti O 00 00 'Z: 00 CO Lf) N N CO N r Lf ) L O NO OItt O O O N O d d r _ NNM cM') M M OM M N t Q 0 O L a I-- O ti ti CO r r�qzt CO O r— 00 M O N LO O O N fC N I-- ti LO I-- ti LO M I-- O L O�OO�titi(6C6C Q� � CO N M O LO � LO M Nt LO I-- ti O O O O ti O O a U LO O I-- CO N Itt CO O CO O I-- M CO M I-- CO r CO fC m N O N I-- N LO LO I -- t+ M O O 4 O ti ti Lf) r L6 CO r r I-- O O CO O r N Q O 00 r CO I� 00 O M O M •y O ti ti 00 ti ti ti ti 00 00 O Q a w Itt M r 0 M u) N I-- M O I-- CO O O r N M'tt LO CO M O r LO X 0 0 I-- CO M an d 0 0 0 0 0 0 0 0 0 0 Lf) M N Cfl M Lf) O O N O f0 d d CO O N M M LO CO N CO 00 X U) LO CO M CO CO N '� '� LO I - H d 3 U) (13 > Cfl LO O 00 00 O O M O M P- 00 O 00 00 00 O O O O r O Q F- 60- (O r 0 0 I� 00 M 00 CO O M CO LO O LO M O O r r M I-- LO M O I-- M I-- ti CO C N r N M 4 M N 0 00 CO Q 0 0 0 0 0 0 0 0 a0 a0 E Q x LU UDI CO M 00 r CO N O O Lf) N M 00 N 00 00 I� ti O 00 00 'Z: 00 CO Lf) N N CO N r Lf ) L O NO OItt O O O N O d d r _ NNM cM') M M OM M N t Q 0 O L a I-- O ti ti CO r r�qzt CO O r— 00 M O N LO O O N fC N I-- ti LO I-- ti LO M I-- O L O�OO�titi(6C6C Q� � CO N M O LO � LO M Nt LO I-- ti O O O O ti O O a U LO O I-- CO N Itt CO O CO O I-- M CO M I-- CO r CO fC m N O N I-- N LO LO I -- t+ M O O 4 O ti ti Lf) r L6 CO r r I-- O O CO O r N Q O 00 r CO I� 00 O M O M •y O ti ti 00 ti ti ti ti 00 00 O Q a w 143 ai L O co I-- CO O O r N M'tt LO CO 0 0 0 r— r r r r r an d 0 0 0 0 0 0 0 0 0 0 U- >- N N N N N N N N N N 143 ai L O co Return to Table of Contents ti d 144 L 0 Q 0 co C Qi m c co 0 c 0 U d L 7 O m O cn r- o Q U m N d � ti LO m m ti ti LO LO LO LO 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 o d o 0 0 0 0 0 0 0 0 0 _ Q CL y CL 0 � m p L � > 0 I� � co Nt CO O 00 LO O Nt — O N LO 00 O CO — qzt lzt O LO � LO � � � � LO � � O 'i 0 %- 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 V N CO N Q N� N x L� r d y 0 0 0 0 0 0 0 0 0 0 Q 0 0 0 0 0 0 0 0 0 0 Q 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 > r r -- r r r r r Lv a d as K > M L d J E i d '^ t/ Q x d � 0 > O Q Q y ti 00 O O r N M LO 0 O Q N d O O O r r r r — r r 0 0 0 0 0 0 0 0 0 0 Ly N N N N N N N N N N U 0 J 144 L 0 Q 0 co C Qi m c co 0 c 0 U d L 7 O m Return to Table of Contents U) O N 00 0 0 0 0 0 0 0 0 CO M M— M CO M— ti N mtitiCoIttNtNtNtchch 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 -00- 00 Itt M ch r— ti ti ti CO 00 00 qzt qzt CO N N N N — N M 'tt LO 0 ti CO M OT N�qzt M M N O— 0 CO ti— 0 M M CO LC) LC) O O N CO LO LO I-- CO m N O CO O r ti O O O 0) r Lf') — CO m O N ti c'0 LC) Nt LC) M O 01 ti r Ch CO (0 (0 LC) ti ti ch ti M r M 0 0 0 M 0 N co r-- 00 00 00 00 00 M Ch Ef} YIr U N MItt Lf) CO ti CO M OT C •�J O O O m O LC) ti O ti L() r -- (1) N U co Cb O O ti O m Lf) N ti co co N 00 O Itt LC) CO — M CO ti r cU c"> -n LC) O 00 00 0) (fl N CO LC) Ch ti Nd 7 M LC) M Nt O LC) LC) CO CO CO ti K (1) qz:t N Lf) qz:t qz:t r ti LC) Ce00 00 M N > — N — c') O 00 zt N 00 N Lf ) QO 00 00 CO LC) Nt Nt Nt M co 00 (1) Y-0 co 2T a) o of OU�0�2 Q -"o _= Efl Efl 145 U C •�J co a) (1) N U co CLU J CO J J N v �_ & a U a) cU c"> -n o JQ C U V Q J Cn U J mJ J co 2 J .45 L �_ O a) Y C O) L �i = C �_L) n N = �> T O " (1)Uco L C c (1) Y-0 co 2T a) o of OU�0�2 Q -"o _= co o 0 1:11c U ) 0 c M cu a) LL Q Q.->� LL_�•D) H UZLLU2fn>> cu aa)i�� UfnU6)5 00 W o 0 J� � 145 Return to Table of Contents O Q 0 0 0 0 0 0 0 0 0 -00- Q O I -- m ti N LO N MLO CO 't r r LO CO LO LO CO r CO O Q rn 0) a) 0) a) a) a) o rn rn d J O L O Q O d L() M I� N O O CO CO L() Lf) O 00 I� M I� r O 00 L() 00 'Z:t (� r --,t w 00 M O r CO CO 00 I- r r� M LO N� ti ti O ti r M M M LO I-- CO O O E N M M M M M M M M 4 � Q a+ r LO I- rItt M LO M M r U) d . 00 M CO 00 00 I� M O O C-. A M M Cfl — Cfl O M N 00 O a .. M M N O M r —0 M I-- ++ d O ON >- U 0 0 0 0 0 0 0 0 0 -.0- Q O I-- M L() N I-- m ti r L() L() CO I-- M O r r LO I-- CO r -- cm A 00 00 00 a) 07 m m m m m > d d > d J J L O O Q M O r CO N r I-- N Q y Nt ti m O I� O N N N O V 07 ti te r N 0 CO - d ++ ti Oqzt N r CO r N qzt 0 �C O 00 00 07 lzt O CO r M M O Oy C CO O r r N N LO I-- O :i ) 0 N N M M M M M M M 4 Q Efl _ O !CL y M I-- M M O r N MItt LO CO U) d O O O r r r— r r r U) d a 0 0 0 0 0 0 0 0 0 0 LU O N N N N N N N N N N 7 146 T � L N c � O W c CLco X E T m O C CD LL C to LL N T O U OO C to y O T) co U E 'Lo- co U a) O +� N N E O L E Q N O > -a W V N 0 X N co X a)� of Q 'V L) a) N "--•"--• Q c .0 U) a) U O ON " O) U cr — C 4 •L C p U 0 (n Q to ^ O ^ � cq c) +0 L)"� C a z LLL Z fn O M I-- M M LO r M O N Q N N O Lf) Lf) r 00 O N I� L O O r N r I� LO r N r d M en ti 00 M r CO M M O J +�+ O O M LO LO LO CO M r u) y M M M M M M M M M 4 O w N m M _ O !CL y M I-- M M O r N MItt LO CO U) d O O O r r r— r r r U) d a 0 0 0 0 0 0 0 0 0 0 LU O N N N N N N N N N N 7 146 T � L N c � O W c CLco X E T m O C CD LL C to LL N T O U OO C to y O T) co U E 'Lo- co U a) O +� N N E O L E Q N O > -a W V N 0 X N co X a)� of Q 'V L) a) N "--•"--• Q c .0 U) a) U O ON " O) U cr — C 4 •L C p U 0 (n Q to ^ O ^ � cq c) +0 L)"� C a z LLL Z fn ■Room V �1 W 1W 147 Return to Table of Contents Q Q c0 Q 0 H a) A Q Q Q Q 0 D d � L r y m t LL O w w O .L O 0 !C LO O O r LO M r O r 0 LO M N N I-- O M r r -- LO LO LO LO LO qzt LO r L � a CL m U 0 0 0 0 0 0 0 0 0 -.0- r-- ti LO LO LO LO CO N r LO I� N 0 0 N LO LO r�Itt N O M I-- Itt LO O N N O N rqzt r LO I-- rqzt N I-- 4 M N— 07 Lf) 00 M r M CO CO CO M O M M CO I-- LO r r O O C0 O O Oqzt CO N O a0 P% O O a0 O M N N N r r r r r r r M r I- O CO Itt r r M O O r N I-- M N M M N r 0Itt ti 0 Nt Nt CO N 0 ' CO CO O O CO LO 0 N LO N O O O O O� O M M r— a) N N r r r a0 a0 L() 4 N N N N N r r r r w O v a) � U a c a) E a) 7-0 U) U C co C a) s 0 a) 0 c a) c C 7 O a) a m U -0 a) O C C co U) 0 c N U E a) Q D 0) a) � U O c co c � LL ca T +o •- a) U 0 cC L I-- CO O O r N MItt LO 0 0 O O O r r r r— r r U) a) 0 0 0 0 0 0 0 0 0 0 L N O O N Z 148 Return b Table 2 Contents Q Q \ � 149 \ 0 n \ \ \ : > E \ 5 \ \ O \ E \ S / @ a \ 0 n § \ � § � 2 \ \ @ § \ \ a (k/ \ L ) 2 / _ ) A— c o¥¥ c ¥ r o r A Nt o c / 3 0 f 7 A A A A g ' L) 76 > 6 r-- m ■ _ § e = e e o r Q E� E \ / \\ 0 /a§ y y y y y y y y y y kƒ\ /\ Q \ \ \ \ \ & \ - / % c / § # 7 / & ® — ■■ o® 0 6 6 6 6 6 6 6 6 6 e e§ e E ¥ e 2= > \ / / \ \ � 0 o _= 0 0 & o c * a)0 § LU o /t § _ o , E a) § 0 § f . 2 e CO CO ¥ e CO o A e \ ° 3=$� ° c ƒ / % / / \ / \ 2 § ] � / E \ \ 2 q q & & & CO CO \ / / 0) / 4a .2 t CL / 2 : 0 / k / 0 \ k § 7 §$ 3 0 \ a c/\=$af §2 _� 0 ® \ 3 0 / U) ) f 0 \ / E - - - - - Cc — — I \ \ \ \ \ \ \ \ \ \ Q 0 0 m 2 149 Return to Table of Contents N d d L co O. U) R CDN O O O M L � � U � � w � O 5 w L O U 0 Q \o \o \o \o \o \o \o \o \o \o \o \o 0 0 0 0 0 0 0 0 0 0 0 0 M O CO 0 0 0 0 0 0 0 0 0 N I� 0 0 0 0 0 0 0 0 0 0 01 0O In 0 0 0 0 0 0 0 0 0 B V 0 0 0 0 0 0 0 0 0 O N M O O O O O O O O O O M I� 0 0 0 0 0 0 0 0 0 O O - Lf) Lf) O L() O Lf) L() L() L() 'a CO co O I- r- V M V LO N CO CO C W O I_ W M N N N O) r_ M 0" NMLO co N NO N 0 K3 N V In M co O 0 0 0 0 0 0 0 0 Z Z Z Z Z Z Z Z U U U U U U U U N N N N N N D N U U U U U U U U U U N N (6 (6 (6 (6 (6 (6 LL LL LL LL LL Mn o w w w w w w w w m C E C C C C C C .� N O U E E E E E E E E N D TU)�UUUUUUUU m E c 2 2 2 2 2 2 2 2 2 E2 C E N C C C C C C C C C X � O — '= U FU L L L L L L L L L Q>> 0 0 0 U U U U U U O O 0 '5'5 00 '5'5 50 0 0 L w w w w w w w w w O 150 0 0 0 0 0 0 O O O O) CO CO M co co Il- O LO LO LO O) I- N LO LO L() O L() L() V O V O CO O O O N O CO O O O CO O CO O O O O LO LO O O O LM M LO O O M O) CO 7 1 M V V U O Z N M O O O O O O O O O O O O I_ L() I- In 0(.0 V V LO N V 0 0 0 0 0 0 0 0 0 O , O N CO CO CO LO In Nr - 0 O W L() r- 0 0 0 0 0 0 0 0 0 O O N L() I-- M L() X P_ O M d N I� LO L() LO O L() O L() LO LO LO I- I- V V N CO L() N V I- N O N N N V LO V O L() I- O 0 M L() CO LO COM M M V CO M N N N O I� M M CO CO O M N CO V O N N M LO L MM� CO N N O N V M V- CO O) N O N (n (D L() N N N N LO CO N O N d _A U � \o \o \o \o \o \o \o \o \o \o \o \o 0 0 0 0 0 0 0 0 0 0 0 0 M O CO 0 0 0 0 0 0 0 0 0 N I� 0 0 0 0 0 0 0 0 0 0 01 0O In 0 0 0 0 0 0 0 0 0 B V 0 0 0 0 0 0 0 0 0 O N M O O O O O O O O O O M I� 0 0 0 0 0 0 0 0 0 O O - Lf) Lf) O L() O Lf) L() L() L() 'a CO co O I- r- V M V LO N CO CO C W O I_ W M N N N O) r_ M 0" NMLO co N NO N 0 K3 N V In M co O 0 0 0 0 0 0 0 0 Z Z Z Z Z Z Z Z U U U U U U U U N N N N N N D N U U U U U U U U U U N N (6 (6 (6 (6 (6 (6 LL LL LL LL LL Mn o w w w w w w w w m C E C C C C C C .� N O U E E E E E E E E N D TU)�UUUUUUUU m E c 2 2 2 2 2 2 2 2 2 E2 C E N C C C C C C C C C X � O — '= U FU L L L L L L L L L Q>> 0 0 0 U U U U U U O O 0 '5'5 00 '5'5 50 0 0 L w w w w w w w w w O 150 0 0 0 0 0 0 O O O O) CO CO M co co Il- O LO LO LO O) I- N LO LO L() O L() L() V O V O CO O O O N O CO O O O CO O CO O O O O LO LO O O O LM M LO O O M O) CO 7 1 M V V U O Z Return b Table 2 Contents ® | | ®| w CD k � k _ § E \\ \ 0-1 ,}\\ t = =053 7= f \ \ � oar°os 0 \/ ® | | ®| w CD k � k _ § E } ? / \{ 0-1 ,}\\ t = =053 7= 2 2\ � oar°os \ \/ 2 ya2��Eg o $ (D E / r\ 0 E E 5 / 2 »sg2229 o= CL \ U) LL 4 \ 0 \ 0 \ 0 \ 0 \ 0 \ 0 \ 0 \ 0 \ 0 \ 0 151 E \ \{ 7 7= 2 2\ \ \/ / / CL k j 5 ) \ ` / 0 151 Return to Table of Contents M � M m M LC) Nlzt LC) O M O M LO M M O'tt Ozt M N r M r r r r r O r r r r r I` r (p O r r'tt O r N N LO qtt I- O N Mqtt Nt O C9 M O 00 LC) M N O 00 00 Cfi M O O D 'tt r LO OItt M O CD r M O M O M O M M m O) O M P- P- (O LC) P- M N (O NtNtqtt(0NtMLOLO(O(Oqtt ell (O r N r M O (O LO I'- N N N m O O Itt I,- N M LC) O (O M LO r M M LO O M O LO r M r r r r r r C) M M r r r r r r r r r 00 N O M Nt I- Nt LO LO O m (O I�t (O (O O O M LC) N LO r O I` 'tt r M M r— 00 LO 00 O O O O O m 00 0 LC) LO -,t r MP] O LC) LO LO O O O O LO O LO O N I` OItt m M It I` co r r r N N N N (O (O I- Cfi (O N I` m It O N 00 I- (O r N 00 LC) I%- (O N N Ch I- M I- (O N 1� co (O 00 O 00 (O ell O I` LO N I` Itt m LO O (O qtt O m m O (O m I` m Nt LC) O O O N M LC) N r (O M mMItLO(oLC)(oI`00C)m Lsl LO M N r r M M I- M M C) I- I` 0 M M'tt I- M LO r C) O M N LC) O O W LO LC) O � O r 00 O C) N LC) 00 00 C9 r N N r N r N N N N N UDI 0 1- M O O r N M'tt LC) 0 O O O O r r r r r r r N N N N N N N N N N N 152 LL c coC9 C O a)m UO 1E N EL oco N aU) U O X N O N C L co - co Ui co U) C O N •_ E X O O ate--. C9 O O r N N +0.. C) � O U O O C a... L U L m i N O i C O O 0) coU N co Q� U � + O O L (U co L o co _a O p W O N C0) -p 0 U C C U) a O !_ N Ox Q -2� r CO C i O O Cn N N Q LCL LCL --�C: PIA 153 Return to Table of Contents vi v co V E O t/1 0 L O cU >- W y � � O 2 d CU U � � d O O E N U 0 J mill CO .N... d aCL 0 m OE va CE �a y Q N co L O Z3 a d 4-- p r- 3 Q O a O O O O O O O O O -.0- 04 r N N M CO I-_ CO � � LC) � O w M O M O O w M N r M Lf) r r r I- r N N r 0 O M r M Lf) I-- M MItt LO M N Nt Nt Nt Nt Nt M M M M M M M M M M CO Itt Mqzt 0 r r I-- M M I-- LC) O Nt m LC) 0 ti LO LO CO m r N m LO qzt N w w N 4 CT L() LC) M C6 O O Cfl I-- -qzt 0 M M N N qzt O LO I-- � 0 LC) 0 0 0 0 N N N N N N N N N N W- � LO LO r LC) LO M r LO 0 O 0 N tiItt Lf) M M LC) 0 Mqz:t I� Cl M CO c r CD m 0 0 0 0 Lf) L() 0 0 (6C6 ti ti ti ti ti ti ti ti ti ti U L W N U L Q O) O E N 0 N U C CO C i.L O c a� E c� Q 0 L r L L ti M M O r N MItt LC) 0 y iO O O O r r r r r r r Q 0 0 0 0 0 0 0 0 0 0 N N N N N N N N N N i U 0 O co 154 Return to Table of Contents O N O Q L Q N O U) Q z O O o = CO Q tE Lm - W d CL O d v U a U d _ U d � co co co co co co co co co co co v O_ c c c c c c c c c c c L Q d L ow w N 00 CO O ti ti O 00 CT O d CO N N r N L Q r d O c\o C 3 E Z LU d cC U 0 0 0 0 0 0 0 0 0 0 0 00 LO D O 0)�tiLOu)NtCM«c)MN N L Q co 0 0 0 0 0 0 0 0 C) 00 d L ow .he Ir N C 7 Ln CO ti 00 OT 155 a� L (Q G L O co J co L O U (V � 0 N O � Qj CL •— E O L ca Co Qi i E C) cu C) Cco Q CO 'C �. co cu E N T ti O C1 N 4 O LLL (n >1 L CL) U O - _ :3 co co 0 co � � 0 04 CO r O M 00 — O 00 CO 'tt M r CO wCO O y M 00 N O ti zt CO N r LO N N N N— — — —— CO N L d r Ch m O .. Q z W U •L yr U � •L 0 � O"J LL V C 0 N U E N CD U N -a O N to CL N O c = E a = U +L- Y 0(nN��E L = CL C U) d p co T-Co > � o of 0 0 a)> a) � _ O c) 0 N CD 0 ) _ "M (� W U U U m -i Q m U 2—i I0 155 a� L (Q G L O co J co L O U (V � 0 N O � Qj CL •— E O L ca Co Qi i E C) cu C) Cco Q CO 'C �. co cu E N T ti O C1 N 4 O LLL (n >1 L CL) U O - _ :3 co co 0 co � � 0 04 CO r i (.rhino Hills This page intentionally left blank. 156 157 Return to Table of Contents E f0 O aL ILO O N it M 0 N N N ' O N 10 O O N I00 O O N r- M CO V N c0 ch Na- co Na- LO N a CO O M d" c0 ch (0 LO N m m m m m r- CO 00 CO 0 LO LO N r- r - "T LO N N co LO 00 158 U) r- .0 O •y >+ _ > a� c N L V O 0 O d y a N E V > O > O 4 d E N (D y C R= y E U N O O d U Q ON U) w N C •>_ y f0 � � N N U <4 U � C L R E p N C O 0 0 O y i > N a O U) y C C a N Z E ayi f0 > C y �a E 0 N C O i N L w a1 O C N .0 LU E+' a� y Lu ? U N Z +, y v c y �p y O C LO N p o E04 a 04 o L L O L f0 N *' f0 •+_�+ 0 'Fu N _ f0 E cv t U f0 C U *' U) L L y � w N > w 0) > C r- O m 00 N c0 N c0 r- m d LO N 00 > N E r— o m r— ch co o co r— Ln — LO N 00 7 lL N f0 N Y N V N co y c to C O _ m NM � M R U � N 'TLn N0') R C v r 0') 0') Nch 00 c0 ti N V N Na- N m 000 O >+ LN 0_.Q U) i (0 i i i 0) N LO chr- O j 7 Na- N v N Do O D t t O0 O .0 O � N c0 O co 00 O O O �r- 00 L ++ Na- N V N(0 O O � 7 N � t v O y 0 0 N N y '0 U N N U U Q Q E (DE N 0 y N 00 E U y C C N O= v 0- c N N Lc) LU = +' n C 0) > LL O ONom_ O !_ >' D (n >' w E d o J U LL N U Z LU 0 , >' >, _ __ U Q N O 70- 0) (n V U U !_ E NN V yO JD) (6 N Li 0- 0- U 0 U cn O 1-- O to O Z 158 U) r- .0 O •y >+ _ > a� c N L V O 0 O d y a N E V > O > O 4 d E N (D y C R= y E U N O O d U Q ON U) w N C •>_ y f0 � � N N U <4 U � C L R E p N C O 0 0 O y i > N a O U) y C C a N Z E ayi f0 > C y �a E 0 N C O i N L w a1 O C N .0 LU E+' a� y Lu ? U N Z +, y v c y �p y O C LO N p o E04 a 04 o L L O L f0 N *' f0 •+_�+ 0 'Fu N _ f0 E cv t U f0 C U *' U) L L y � w N > w 0) > Return to Table of Contents 159 r- V LO I- LO CO d" N O I- (0 CO CO (O CO N co co NI (O V O m d' O M LO co (O V LO LO V LO V N CO N (O = N O LCi N O Cn co N O 'IT co LO CO LO (O LO LO N d. 00 V (0 (O N N .0 NI � � N (o U_ I- O N O N (O 'ITlLOI— V CO CO V N N N iZ O N N O CO Of N T 00 co m N O O m O LO O LON N O O 0 r- LO N L O Ch Q N O V I- (0 O LO O LO co N00 V O co co EO LLO N N N r Ln N _ N L r- O N r- O (oO r- co t� O V CO r- I- N LO CO N c m O N U co U I- NN LO m O (O Na- (O r m c O V LO r- r- (O Ch N N ' O O N > N O O O O m co (O LO LO LO O LO 00 co 00 LO (b r- d' O 00 � N N O LO E OI 00 N N 0) i C (6 00 00 (O O O V co (O m V (6 N (O O (O LO LO M CO U C 00 O N (6 O O 2 U N N _ N E m c r- 0 > N N U _ a)co E O LL 'ON O E O m C N N c -6 p 0- UN O sZ N p c - E _ co N i Z) to O a) Z) O N c 'N O N C) 'O rn Y c E U U N >= N U) U N - rn � N '5 N N O cn U rn N rn N N E }, O � . p c 0 E rn U -O 2 V CO L C E O O U U p (6 co >, O p 0 E >, O O "O U ` N N (6 C6 U (a N C6 (6 co 00 a C N � Q N O O U U) .� C (6 -O 0) >, 0) in -O 0) (6 (6 r Il .0 d O U = N rn c E N c '� >, N > > O OU N U N O O) O 'O O iA O w ++ N O m -O -O N > N = Y = N = N N N N N N L QU) �mm (n (If O �(nLL roz > NEE > o o cl) c 0-1 LL 0 O m 159 Return to Table of Contents E fC O a` c O v C 7 LL A N V N N c >- 2 co (a O U O � N U Q C 7 L N U U J () J+ O .Q C 4) In D U) 4) m E N N O 2 Q E O U !n LO LL O) C N 00 V N O Il- O N LO LO O O Ln O O V N V O O OI co co O O N N N LC) N m 00 O N Lf) N LC) O N c') I-- LO V (D N O 00 co O CO LOI N C) N _ O N N N Lf) N co 00 O N LO N LC) O N m V) V (D N O 00 C7 O 00 ,Tj� � N CO N N N N LC) LC) CO O N LC) O (0 O N c') I --Lf) V LC) N 00 V O c0 MI N C) N M N N O LO r Lf) CO M N LO I- (0 m N co LO V LO N = CO COO 00 NI � N CO N C4 N N Or co 00 I- L(7 co O O O LO V LO (0 �I O N N O V O LO c0 00 I` LO N I- 00 O V r- V) V V) N O c") co 00 O OI N CO 0 N N co 00 I- L(7 O co � V V LO O N O O N N 00 N OI O � N r co co 00 I- O O N O O V LO O N N OI N N O(0O V V LON00I-L(7 OO N N Lf) N OI N N () J+ O .Q C 4) In D U) 4) m E N N O 2 Q E O U !n LO LL O) C i (.rhino Hills This page intentionally left blank. 161