Untitled - City of Cerritos

Transcription

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CITY OF CERRITOS, CALIFORNIA
COMPREHENSIVE ANNUAL
FINANCIAL REPORT
FISCAL YEAR ENDED JUNE 30, 2011
Prepared by:
Administrative Services Department
Ms. Denise D. Manoogian, Director of Administrative Services
Nita McKay, Finance Manager
City of Cerritos
Comprehensive Annual Financial Report
For the year ended June 30, 2011
Table of Contents
Page
INTRODUCTORY SECTION
City Manager and Director of Administrative Services Letter of Transmittal ................................................. i
Principal Officials ...................................................................................................................................................... vi
Organization Chart.................................................................................................................................................... vii
GFOA Certificate of Achievement for Excellence in Financial Reporting ........................................................ viii
FINANCIAL SECTION
Independent Auditors’ Report ............................................................................................................................... 1
Management’s Discussion and Analysis (Unaudited) ...................................................................................... 3
Basic Financial Statements:
Government-wide Financial Statements:
Statement of Net Assets ............................................................................................................................... 17
Statement of Activities ................................................................................................................................. 18
Fund Financial Statements:
Governmental Fund Financial Statements:
Balance Sheet .......................................................................................................................................... 22
Reconciliation of the Governmental Funds Balance Sheet
to the Government-Wide Statement of Net Assets..................................................................... 23
Statement of Revenues, Expenditures and
Changes in Fund Balances ............................................................................................................. 24
Reconciliation of the Governmental Funds Statement of Revenues,
Expenditures and Changes in Fund Balances to the Government-Wide
Statement of Activities and Changes in Net Assets ................................................................... 25
Proprietary Fund Financial Statements:
Statement of Net Assets ........................................................................................................................ 28
Statement of Revenues, Expenses and Changes in Net Assets ....................................................... 29
Statement of Cash Flows ....................................................................................................................... 30
Notes to Basic Financial Statements ............................................................................................................... 33
City of Cerritos
Table of Contents, Continued
Page
FINANCIAL SECTION, Continued
Required Supplementary Information (Unaudited) ........................................................................................ 81
Notes to Required Supplementary Information ............................................................................................. 82
Budgetary Comparison Schedule:
General Fund................................................................................................................................................. 83
Schedule of Funding Progress:
Defined Pension Plan ................................................................................................................................... 84
Other Post Employment Benefits ............................................................................................................... 84
Supplementary Information:
Non-Major Governmental Funds:
Combining Balance Sheet ............................................................................................................................ 88
Combining Statement of Revenues, Expenditures and Changes in Fund Balances ........................... 92
Schedule of Revenues, Expenditures and Changes in Fund Balances – Budget and Actual:
Street Improvements Special Revenue Fund ..................................................................................... 95
Traffic Congestion Special Revenue Fund ......................................................................................... 96
Drainage Special Revenue Fund .......................................................................................................... 97
Proposition “A” Special Revenue Fund ............................................................................................. 98
Proposition “C” Special Revenue Fund .............................................................................................. 99
Assessment District #6 Special Revenue Fund .................................................................................. 100
Los Coyotes Lighting District Special Revenue Fund ...................................................................... 101
Local Law Enforcement Grants Special Revenue Fund ................................................................... 102
COPS Grants Special Revenue Fund .................................................................................................. 103
Library Grants Special Revenue Fund ................................................................................................ 104
Environmental Grant Special Revenue Fund .................................................................................... 105
AQMD Special Revenue Fund ............................................................................................................. 106
Measure “R” Special Revenue Fund ................................................................................................... 107
Non-Major Enterprise Funds:
Combining Statement of Net Assets .......................................................................................................... 110
Combining Statement of Revenues, Expenses and Changes in Net Assets ......................................... 111
Combining Statement of Cash Flows ........................................................................................................ 112
Internal Service Funds:
Statement of Net Assets ............................................................................................................................... 114
Statement of Revenues, Expenses and Changes in Net Assets .............................................................. 115
Statement of Cash Flows ............................................................................................................................. 116
City of Cerritos
Table of Contents, Continued
Page
Independent Auditors’ Report on Internal Control over Financial
Reporting and on Compliance and Other Matters Based on an
Audit of Financial Statements Performed in Accordance with
Government Auditing Standards...................................................................................................................... 117
STATISTICAL SECTION (Unaudited)
Description of Statistical Section Contents ............................................................................................................ 119
Financial Trends:
Net Assets by Component – Last Eight Fiscal Years ..................................................................................... 120
Changes in Net Assets – Expenses and Program Revenues - Last Eight Fiscal Years .............................. 122
Changes in Net Assets – General Revenues - Last Eight Fiscal Years ......................................................... 124
Fund Balances of Governmental Funds - Last Eight Fiscal Years ................................................................ 126
Changes in Fund Balances of Governmental Funds - Last Eight Fiscal Years ........................................... 128
Governmental Activities Revenues by Sources - Last Ten Fiscal Years ...................................................... 130
Revenue Capacity:
Assessed Value of Taxable Property - Last Ten Fiscal Years ........................................................................ 132
Property Tax Rates – All Direct and Overlapping Governments – Last Ten Fiscal Years ....................... 134
Ten Largest Secured Taxpayers – Current Year and Nine Years Ago ........................................................ 135
Property Tax Levies and Collections - Last Ten Fiscal Years ....................................................................... 136
Debt Capacity:
Ratios of Outstanding Debt by Type - Last Eight Fiscal Years ..................................................................... 138
Schedule of Direct and Overlapping Bonded Debt........................................................................................ 140
Legal Debt Margin Information- Last Eight Fiscal Years .............................................................................. 142
Demographic and Economic Information:
Demographic and Economic Statistics - Last Eight Fiscal Years .................................................................. 144
Principal Employers – Current Year and Eight Years Ago ........................................................................... 145
Operating Information:
Full-Time and Part-Time City Employees by Function - Last Eight Fiscal Years ...................................... 146
Operating Indicators by Function - Last Eight Fiscal Years.......................................................................... 147
Capital Asset Statistics by Function - Last Eight Fiscal Years ...................................................................... 148
Cerritos
ITY 0 F
E R 9k1 P
SM
CIVIC CENTER• 18125 BLOOMFIELDAVENUE
P.O. BOX 3130 CERRITOS, CALIFORNIA 90703-3 130
PHONE: (562) 860-0311 • WWW.CERRITOS.US
2008
December 1, 2011
Honorable Mayor, Members of the City Council, and Citizens of the City of Cerritos
It is our pleasure to present the Comprehensive Annual Financial Report (CAFR) of the City
of Cerritos (the City) for the fiscal year ended June 30, 2011.
This report consists of management’s representations concerning the finances of the City of
Cerritos. Management assumes the responsibility for the accuracy of the presented data,
the completeness and fairness of the presentation and all disclosures. To provide a
reasonable basis for making these representations, management has established a
comprehensive internal control framework that is designed both to protect the City’s assets
from loss, theft, or misuse and to compile sufficient reliable information for the preparation
of the City’s financial statements in conformity with generally accepted accounting principles
(GAAP). Because the costs of internal controls should not outweigh their benefits, internal
controls have been designed to provide reasonable rather than absolute assurance that the
financial statements will be free from material misstatements.
The City’s financial statements have been audited by Caporicci & Larson, Inc., a subsidiary
of Marcum, LLP, a firm of certified public accountants. The auditors have issued an
unqualified opinion on these financial statements. Such an opinion states that the auditors
feel the City followed all accounting rules appropriately and that the financial reports are an
accurate representation of the City’s financial condition. Their 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 is designed to complement the MD&A and
should be read in conjunction with it.
Profile of the City of Cerritos
The City of Cerritos is located approximately 20 miles southeast of Los Angeles along the
border of Orange County. Beginning as an unincorporated area known for its strawberry
farms and dairy operations, the City experienced a major transformation into a more urban
environment beginning in the late 1960s. In 1973, a unique and innovative General Plan
was adopted, which has guided development in a master planned fashion to create a parklike community with balanced development. Today the City is a progressive, affluent
community with a highly educated and ethnically diverse population.
The City is home to near 50,000 residents and several large business organizations.
Cerritos enjoys the distinction of being a large sales tax generator, resulting in significant
revenues to support City operations.
CAROL CHEN
MAYOR
JIM EDWARDS
MAYOR PRO TEM
BRUCE W. BARROWS
COUNCILMEMBER
JOSEPH CHO, Ph.D.
COUNCILMEMBER
MARK E. PULIDO
COUNCILMEMBER
The City, incorporated in 1956 as a charter city under the laws of the State of California,
encompasses an area of 8.9 square miles. Under the City’s Council-Manager form of
government, the Council members are elected at large for four-year staggered terms, and
the Mayor is chosen among the elected council members to serve a one-year term.
Members of the City Council also act as the governing body of the Cerritos Redevelopment
Agency, which includes the Los Cerritos and Los Coyotes Project Areas. The City Council
appoints the City Manager, who is responsible for the day-to-day administration and
management of City business within all City departments.
Strategic planning and hard work have brought Cerritos to its current position as a
community with financial strength, excellent municipal services, and a reputation as a great
place to live, work and do business. However, the City is aware that its enviable fiscal
position can be maintained only by managing its available resources wisely and monitoring
its operating expenditures carefully. The City continues to protect its financial resources
tenaciously through appropriate involvement in the legislative arena.
The City provides a full range of municipal services, including community development,
public works, recreational activities, state of the art library services, a performing arts
center, water, sewer, and electric utility services, and general administrative and support
services. The City provides police and fire services through contracts with the County of Los
Angeles. The City’s Sheriff Station serves as the operational headquarters for all County
Sheriff’s Department personnel assigned to Cerritos, and the Station acts as a stand-alone
full-service safety facility for the community. The building’s status as an “independent
station” has enabled the Sheriff’s Department to achieve progressively lower response times
in Cerritos, thereby creating an atmosphere of enhanced safety and security for the
community.
The annual budget serves as the foundation for the City’s financial planning and control. The
City Council holds public hearings and adopts an annual budget resolution for all funds.
Adoption of the annual budget must occur prior to the conclusion of the prior fiscal year.
The City Manager is authorized to make changes in departmental operating budget totals as
he may from time to time deem necessary in order to meet the City’s needs. In past years,
resources have been allocated to departments based on their work program objectives.
Continuing allocations are justified by measurable outputs and the ongoing need for the
services provided.
Economic Outlook and Major Initiatives
Regarded by many as the pre-eminent commercial center of southeast Los Angeles County,
the City continually strives to maintain an exemplary business climate. Though not immune
to the challenging financial and economic environment, Cerritos has significant economic
stability resulting from the automotive sector at the Cerritos Auto Square, the retail
presence at the Los Cerritos Center, and continuing business stability at the Cerritos Towne
Center.
Since its inception sixteen years ago, the Cerritos Towne Center has established itself as
one of Southern California’s most successful centers of commercial, recreational and
business activity. The ongoing success of such strong retailers as Kohl’s, Wal-Mart, Ross,
Office Max and Best Buy has been enhanced by the Edwards Cinemas and various dining
establishments like Macaroni Grill, Arté Café, Wood Ranch, Mimi’s Cafe and TGI Friday’s.
These establishments consistently attract consumers to the area, and will enable the Towne
Center to maintain its status as one of the premier economic engines in the region.
ii
Despite the challenging economic environment, the Cerritos Center for the Performing Arts
(CCPA) enjoyed another successful year with an impressive array of performances. The
CCPA has become a destination point within the Towne Center, and intentional marketing
efforts will help to ensure the success of the Towne Center in future years.
Additionally, the City is home to one of Southern California’s largest retail centers, the Los
Cerritos Center. As one of the nation’s elite shopping destinations, the Los Cerritos Center
has responded successfully to changing economic cycles many times since its opening in
1971. The mall’s ownership group, the Macerich Corporation, has demonstrated its ongoing
stewardship of the mall through an unwavering commitment to maintaining the mall’s
economic vitality. Addressing the use of vacant space, the mall established an exciting
restaurant, Lazy Dog Café, increasing the dining options for shopping center customers. The
Los Cerritos Center also was expanded with a new 138,000 square-foot flagship-quality
Nordstrom as well as 36,500 square feet of new in-line shops. These additional retailers
included a new Apple store, True Religion Brand Jeans, Love Culture, MAC Cosmetics,
Foreign Exchange and Carlton Hair International. The new development at the Los Cerritos
Center is projected to generate additional sales tax revenues as well as increased property
tax increment for the City’s Redevelopment Agency.
Despite the recent prolonged period of bleak economic news for the automotive sector, the
Cerritos Auto Square continues its status as the world’s largest auto center. For more than
three decades, the Cerritos Auto Square has served as a cornerstone of the City’s economic
stability. It has defined the concept of the “one-stop” auto mall, and it is still recognized as
the world’s prototypical auto center. The Cerritos Auto Square gained a new Kia dealership
at the beginning of the fiscal year.
Additionally, upgrades and new construction were completed in July 2010 at the “Landmark
Square,” which is adjacent to the Los Cerritos Mall. The shopping center was renovated and
features the new restaurants Ajito Japanese Grill & Yakitori, Gatten Sushi, Chronic Tacos,
Blizz Frozen Yogurt and Panera Bread.
Key Capital Projects completed during the current fiscal year included the installation of
solar panels at the City’s Corporate Yard and resurfacing of major traffic arteries, including
portions of South Street and Norwalk Boulevard.
Fiscal Year 2010-11 marks the sixth year of the Electric Utility in supplying energy to retail
consumers in Cerritos. The Electric Utility now serves approximately 238 accounts and
during the last fiscal year supplied almost 41.3 million kilowatt-hours to the retail
customers. This is in contrast to the first year of operations (2005), when select City
accounts and six ABC Unified School District accounts served as the Utility’s contracted
customers.
The challenging State budget crisis and the continuing instability in the global financial
world have added additional review and analysis to the City’s fiscal evaluation. The State’s
budget deficit continues to create uncertainty for all governmental agencies in California.
Although it appears that there may be hopeful signs of growth and recovery on the horizon,
the current economic downturn appears to be “the downturn without an end”, affecting
virtually every aspect of commercial activity, including housing, retail, credit and
employment.
The latest plan to balance the State of California budget includes the passage of Assembly
Bills (AB) 26 and AB 27. This new legislation proposes to abolish California Redevelopment
Agencies as they currently exist. AB 27 creates the option for redevelopment agencies to
iii
continue to exist and operate by means of an Alternative Voluntary Redevelopment
Program, which would require an annual subsidy to the State of California. As of the writing
of this report, this new legislation is being litigated in the courts. A ruling by the California
Supreme Court is expected by January 15, 2012. More detail regarding this legislation is
described in the notes to basic financial statements later in this report. As the State budget
process continues to evolve, the City will continue to monitor the situation to determine any
additional impacts that may affect the City of Cerritos.
Despite the challenging economic climate, our long term economic outlook should be
sustained through careful planning and with the outstanding relationships we have built with
business leaders and residents in the City. Indeed, much of the City’s recent success has
been attributed to bold and innovative economic decisions which were made early in our
history, and which have secured the community’s viable fiscal position. The challenging
economy has created opportunities for the business environment to continually reinvent
itself for the benefit of the City and its local surroundings.
The City of Cerritos will continue to work to preserve its resources while seeking to maintain
and provide the highest level of service to its residents. In fulfilling this mission, compliance
with new rules, regulations and procedures has always been the highest priority in the past,
and will continue to be in the future.
Awards and Acknowledgements
The Government Finance Officers Association (GFOA) awarded a Certificate of Achievement
for Excellence in Financial Reporting to the City of Cerritos for its Comprehensive Annual
Financial Report for the fiscal year ended June 30, 2010. The Certificate is a prestigious
national award that recognizes conformance with the highest standards for preparation of
state and local government financial reports. To be awarded a Certificate of Achievement,
the City published an easily readable and efficiently organized CAFR. The report satisfied
both generally accepted accounting principles and applicable legal requirements.
The Certificate of Achievement from the GFOA is valid for a period of one year. We believe
that this 2010-11 CAFR continues to conform to the Certificate of Achievement program
requirements, and it will be submitted to GFOA for award consideration.
The preparation and publication of this report would not have been possible without the
dedication, professionalism, and teamwork of the entire staff of the Finance Division within
the Administrative Services Department and the City’s independent auditors, Caporicci &
Larson, Certified Public Accountants. We would like to express our appreciation to all staff
members who assisted and contributed to its preparation.
iv
The City Council has continued to extend their support to the Administrative Services
Department in the planning of responsible and progressive financial operations. We would
like to thank the Mayor and City Council for their continued support for maintaining the
highest standards of professionalism in the management of the City’s finances.
Respectfully submitted,
Art Gallucci
City Manager
//
Di1e’iD. k’noogian
Director of Administrative Services
V
vi
COMMUNITY
DEVELOPMENT
Torrey N. Contreras,
Director
PUBLIC
WORKS
Hal Arbogast,
Director/City Engineer
CITY ATTORNEY
Mark Steres, City Attorney
COMMUNITY AND
SAFETY SERVICES
Greg Berg,
Director
CITY MANAGER
Art Gallucci, City Manager/Exec. Dir.
Vince Brar, Senior ACM/Water and Power
Kathy Matsumoto, Assistant City Manager
WATER AND
POWER
Vince Brar, Senior Assistant
City Manager
ADMINISTRATIVE
SERVICES
Denise D. Manoogian,
Director
CITY CLERK/TREASURER
Vida Barone, Interim
THEATER
DEPARTMENT
Dianne Cheney,
Executive Director
PARKS AND RECREATION
COMMISSION
Jack Reidy, Chairperson
James Fong Yee, PhD., Vice Chairperson
Kenneth Cha, Commissioner
Cindy Yen Chen, Commissioner
Lew Gentiluomo, Commissioner
PROPERTY PRESERVATION
COMMISSION
Waldo Arballo, Chairperson
George Dominguez, Vice Chairperson
Levi Javier, Commissioner
Nick Heung Kim, Commissioner
Allen Wood, Commissioner
FINE ARTS AND HISTORICAL
COMMISSION
Julietta C. Williams, Chairperson
Janet L. Beach, Vice Chairperson
Nora T. Benzon, Commissioner
Doris T. Iglesias, Commissioner
Elayne Shiohama, Commissioner
PLANNING
COMMISSION
Larry Sagert, Chairperson
Naresh Solanki, Vice Chairperson
Al Barlevy, PhD., Commissioner
Chuong Vo, Commissioner
Frank Yokoyama, Commissioner
ECONOMIC DEVELOPMENT
COMMISSION
Pat Patnaik, Chairperson
Kathleen Lovell, Vice Chairperson
Robert D. Buell, Commissioner
Rosalinda Law, Commissioner
Leslie J. Machado, Commissioner
CITY COUNCIL/REDEVELOPMENT AGENCY
Carol K. Chen, Mayor/Chairperson
Jim Edwards, Mayor Pro Tem/Vice Chairperson
Bruce W. Barrows, Council Member/Agency Member
Joseph Cho, PhD., Council Member/Agency Member
Mark E. Pulido, Council Member/Agency Member
vii
PARKS & RECREATION
COMMISSION
Water
Operations
Reclaimed Water
Operations
Electric Utility
Operations
PUBLIC WORKS
Engineering
Environmental
Services
General
Maintenance
Parks/Trees Maintenance
Geographic Information
Systems
Advance Planning
Redevelopment Team
Current Planning
WATER AND
POWER
Code Enforcement
Community Safety
Recreation Services
Community Participation/
Senior Center
COMMUNITY AND
SAFETY SERVICES
CITY MANAGER/EXECUTIVE DIRECTOR
FINE ARTS & HISTORICAL
COMMISSION
COMMUNITY
DEVELOPMENT
CITY ATTORNEY
ECONOMIC DEVELOPMENT
COMMISSION
CITY COUNCIL
REDEVELOPMENT AGENCY
RESIDENTS OF CERRITOS
ORGANIZATIONAL CHART
City of Cerritos
PROPERTY PRESERVATION
COMMISSION
Operations and Security
Special Event Services
Ticket Office
Municipal Library
Management Information Systems
Performance Management
Front of House
Performance Marketing
and Sales
Business Management
Support Services
Human Resources/
Risk Management
Finance/Water Billing
Communications
THEATER
CITY CLERK/TREASURER
ADMINISTRATIVE
SERVICES
PLANNING
COMMISSION
Certificate of
Achievement
for Excellence
in Financial
Reporting
Presented to
Text38:
City of Cerritos
California
For its Comprehensive Annual
Financial Report
for the Fiscal Year Ended
June 30, 2010
A Certificate of Achievement for Excellence in Financial
Reporting is presented by the Government Finance Officers
Association of the United States and Canada to
government units and public employee retirement
systems whose comprehensive annual financial
reports (CAFRs) achieve the highest
standards in government accounting
and financial reporting.
President
Executive Director
viii
C&L
Caporicci & Larson, Inc.
A Subsidiary of Marcum LLP
Certified Public Accountants
INDEPENDENT AUDITORS’ REPORT
Honorable Mayor and
Members of the City Council
City of Cerritos
Cerritos, California
We have audited the accompanying financial statements of the governmental activities, the businesstype activities, each major fund, and the aggregate remaining fund information of the City of Cerritos,
California (the “City”), as of and for the year ended June 30, 2011, which collectively comprise the
City’s basic financial statements as listed in the foregoing table of contents. These basic financial
statements are the responsibility of the City’s management. Our responsibility is to express an opinion
on these basic financial statements based on our audit.
We conducted our audit in accordance with auditing standards generally accepted in the United States
of America and the standards applicable to financial audits contained in Government Auditing Standards,
issued by the Comptroller General of the United States. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes consideration of internal control over financial reporting as a
basis for designing audit procedures that are appropriate in the circumstances but not for the purpose
of expressing an opinion on the effectiveness of the City’s internal control over financial reporting.
Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements, assessing the accounting principles
used and significant estimates made by management, as well as evaluating the overall basic financial
statement presentation. We believe that our audit provides a reasonable basis for our opinions.
In our opinion, the basic 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 as of June 30, 2011, and the respective
changes in financial position and cash flows, where applicable, thereof for the year then ended in
conformity with accounting principles generally accepted in the United States of America.
As explained further in Note 17 to the basic financial statements, the California State Legislature has
enacted legislation that is intended to provide for the dissolution of redevelopment agencies in the
State of California. The effects of this legislation are uncertain pending the result of certain lawsuits
that have been initiated to challenge the constitutionality of this legislation.
The City adopted the provisions of Governmental Accounting Standards Board (“GASB”) Statement
No. 54, Fund Balance Reporting and Governmental Fund Type Definitions, as of July1, 2010.
www.c-lcpa.com
Honorable Mayor and
City of Cerritos
Page 2
In accordance with Government Auditing Standards, we have also issued our report dated December 1,
2011 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 the
internal control over financial reporting or on compliance. That report is an integral part of an audit
performed in accordance with Government Auditing Standards and should be considered in assessing the
results of our audit.
Accounting principles generally accepted in the United States of America require that the
Management’s Discussion and Analysis, General Fund budgetary comparison schedule, and schedules
of funding progress 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.
Our audit was conducted for the purpose of forming opinions on the financial statements that
collectively comprise the City’s financial statements as a whole. The accompanying supplementary
information, as listed in the table of contents, is presented for purposes of additional analysis and is not
a required part of the financial statements. Such information is the responsibility of management and
is derived from and relates directly to the underlying accounting and other records used to prepare the
financial statements. The information has been subjected to the auditing procedures applied in the
audit of the financial statements and certain additional procedures, including comparing and
reconciling such information directly to the underlying accounting and other records used to prepare
the financial statements or to the financial statements themselves, and other additional procedures in
accordance with auditing standards generally accepted in the United States of America. In our opinion,
the information is fairly stated in all material respects in relation to the financial statements as a whole.
The Introductory and Statistical Sections have not been subjected to the auditing procedures applied in
the audit of the basic financial statements and, accordingly, we express no opinion on them.
Irvine, California
December 1, 2011
2
CITY OF CERRITOS, CALIFORNIA
Management’s Discussion and Analysis
Year Ended June 30, 2011
As Management of the City of Cerritos, California (City), we offer readers of the City’s financial
statements this narrative overview and analysis of the financial activities of the City for the fiscal year
ended June 30, 2011. We encourage readers to consider the information presented here in conjunction
with the accompanying letter of transmittal at the front of this report, and the basic financial
statements, which follow this section.
FINANCIAL HIGHLIGHTS

The City’s assets exceeded its liabilities at June 30, 2011 by $334.8 million. This amount is
referred to as the net assets of the City. Of this amount, $173.3 million is invested in capital
assets net of related debt, $45.5 million is restricted and $116.0 million is unrestricted. The
unrestricted amount may be used to meet the City’s ongoing obligations to citizens and
creditors.

The City’s net assets decreased $3.4 million, expenses exceeding revenues by this amount. This
decrease is mainly attributable to the mandatory payment of $2.4 million to the State of
California for the City’s share of the Supplemental Educational Revenue Augmentation Fund
(SERAF).

Governmental funds for the City reported combined fund balances of $146.4 million. Of this
amount, $102.0 million is nonspendable, $35.1 million is restricted by external parties, $14.2
million has been assigned by City management and negative $4.9 million unassigned further
reduces the City’s governmental funds combined fund balance.

As of June 30, 2011, the unassigned fund balance of the General Fund, the City’s chief
operating fund, was $71.1 million, or 103.1% of General Fund expenditures. This unassigned
fund balance is available for future appropriation.
OVERVIEW OF THE FINANCIAL STATEMENTS
This discussion and analysis is intended to serve as an introduction to the City’s basic financial
statements, which consist of three components: 1) government-wide financial statements, 2) fund
financial statements and 3) notes to the basic financial statements. This report also contains
supplementary information in addition to the basic financial statements.
Government-wide Financial Statements
The government-wide financial statements are designed to provide readers with a broad overview of
the City’s finances, in a manner similar to a private-sector business.
The Statement of Net Assets presents information on all of the City’s assets and liabilities, with the
difference between the two reported as net assets. Over time, increases or decreases in net assets may
serve as a useful indicator of whether the financial position of the City is improving or deteriorating.
3
OVERVIEW OF THE FINANCIAL STATEMENTS (CONTINUED)
Government-wide Financial Statements (Continued)
The Statement of Activities presents information on how the City’s net assets changed during the fiscal
year. All changes in net assets are reported as soon as the underlying event giving rise to the change
occurs, regardless of the timing of the related cash flows. Therefore, revenues and expenses are
reported in this statement for some items that will only result in cash flows in future fiscal periods (for
example, uncollected taxes and earned but unused employee leaves).
Both of the government-wide financial statements distinguish functions of the City that are principally
supported by taxes and intergovernmental revenues (governmental activities) from other functions that
are intended to recover all or a significant portion of their costs through user fees and charges
(business-type activities). The governmental activities of the City of Cerritos include legislative and
administration, community development, public works, water and power, community and safety
services, administrative services and the theater (Cerritos Center for the Performing Arts). The
business-type activities of the City include water operations, reclaimed water, sewer operations, and
electric utility.
The government-wide financial statements include not only the City of Cerritos itself (known as the
primary government), but also the activities of the Cerritos Redevelopment Agency (Agency) and the
Cerritos Public Financing Authority (Authority), a joint powers authority formed by the City and the
Agency to issue bonds for the construction of major capital facilities. The City is financially
accountable for both of these legally separate entities, which are referred to as blended component
units. The Agency and Authority function for all practical purposes as departments of the City, and
therefore, these blended component units have been included in these financial statements as an
integral part of the primary government.
Fund Financial Statements
A fund is a grouping of related accounts that is used to maintain control over resources that have been
segregated for specific activities or objectives. The City of Cerritos, like other state and local
governments, uses fund accounting to ensure and demonstrate compliance with finance-related legal
requirements. All of the funds of the City can be divided into two categories: governmental funds and
proprietary funds.

Governmental Funds
Governmental funds are used to account for essentially the same functions reported as
governmental activities in the government-wide financial statements. However, unlike the
government-wide financial statements, governmental fund financial statements focus on
near-term inflows and outflows of spendable resources, as well as on balances of spendable
resources available at the end of the fiscal year. Such information may be useful in evaluating
the City’s near-term financing requirements.
Because the focus of governmental funds is narrower than that of the government-wide
financial statements, it is useful to compare the information presented for governmental funds
with similar information presented for governmental activities in the government-wide
financial statements. By doing so, readers may better understand the long-term impact of the
City’s near-term financing decisions. Both the governmental fund balance sheet and the
governmental fund statement of revenues, expenditures and changes in fund balances provide a
reconciliation to facilitate this comparison between governmental funds and governmental
activities.
4
OVERVIEW OF THE FINANCIAL STATEMENTS (CONTINUED)
Fund Financial Statements (Continued)

Governmental Funds (Continued)
The City of Cerritos maintains seventeen individual governmental funds. Information is
presented separately in the governmental fund balance sheet and in the governmental fund
statement of revenues, expenditures and changes in fund balances for the General Fund,
Redevelopment Agency Debt Service Fund and Redevelopment Agency Capital Projects Fund,
each of which are considered to be major funds. Data from the other fourteen governmental
funds are combined into a single, aggregated presentation. Individual fund data for each of
these nonmajor governmental funds is provided in the form of combining statements elsewhere
in this report.
The City of Cerritos adopts an annual appropriated budget for the General Fund and all Special
Revenue Funds. A budgetary comparison statement has been provided for each of these funds
to demonstrate compliance with these budgets.

Proprietary Funds
The City of Cerritos maintains two different types of proprietary funds. Enterprise funds are
used to report the same functions presented as business-type activities in the government-wide
financial statements. The City uses enterprise funds to account for its water, reclaimed water,
sewer, and electric utility activities. Internal service funds are accounting devices used to
accumulate and allocate costs internally among the City’s various functions. The City uses an
internal service fund to account for its equipment maintenance and replacement activities.
Because the internal service fund provides services that predominantly benefit governmental
rather than business-type functions, it has been included within governmental activities in the
government-wide financial statements.
Proprietary funds provide the same type of information as the government-wide financial
statements, only in more detail. The proprietary fund financial statements provide separate
information for the Water Fund and Electric Utility Fund, which are considered major funds of
the City. The other two enterprise funds are combined into a single, aggregated presentation.
Individual fund data for each of these nonmajor enterprise funds is provided in the form of
combining statements elsewhere in this report. Conversely, the internal service fund is shown
as a separate reporting category on the Proprietary Funds reports and in the Supplementary
Information section of this report.
Notes to the Basic Financial Statements
The notes to the basic financial statements provide additional information that is essential to a full
understanding of the data provided in the government-wide and fund financial statements.
Other Information
The combining statements, referred to earlier in connection with other governmental funds and the
internal service fund, are presented in Supplementary Information.
5
GOVERNMENT-WIDE FINANCIAL ANALYSIS
The following table summarizes the Statement of Net Assets for fiscal years ending June 30, 2011 and
June 30, 2010.
City of Cerritos Net Assets
(in millions)
Governmental Activities
2011
2010
Cash and investments
Other Assets
Capital Assets
$
Total Assets
Other liabilities
Long-term liabilities outstanding
Total Liabilities
Net Assets
Invested in capital assets,
net of related debt
Restricted
Unrestricted
Total net assets
$
155.0
33.9
289.2
$
Business-Type Activities
2011
2010
154.0
29.5
292.2
$
5.1
(10.1)
45.0
$
7.3
(4.1)
46.3
Total
2011
$
160.1
23.8
334.2
2010
$
161.3
25.4
338.5
478.1
475.7
40.0
49.5
518.1
525.2
14.5
166.1
11.5
174.2
2.5
0.2
1.1
0.2
17.0
166.3
12.6
174.4
180.6
185.7
2.7
1.3
183.3
187.0
128.3
45.5
123.7
123.4
42.3
124.3
45.0
(7.7)
46.3
1.9
173.3
45.5
116.0
169.7
42.3
126.2
297.5
$
290.0
$
37.3
$
48.2
$
334.8
$
338.2
As noted earlier, net assets may serve over time as a useful indicator of a government’s financial
position. In the case of the City of Cerritos, net assets were $334.8 million as of June 30, 2011. Net
assets decreased $3.4 million, or 1.0%, during fiscal year 2010-11. Assets decreased 1.4% and
liabilities decreased 2.0% when compared to June 30, 2010.
The largest portion of the City’s net assets at June 30, 2011 ($173.3 million, or 51.8% of total net
assets) reflects its investment in capital assets (e.g., land, infrastructure, buildings, machinery and
equipment) less any related debt used to acquire those assets that is still outstanding. The City uses
these capital assets to provide services to citizens; consequently, these assets are not available for
future spending. Although the City’s investment in its capital assets is reported net of related debt, it
should be noted that the resources needed to repay this debt must be provided from other sources, since
the capital assets themselves cannot be used to liquidate these liabilities.
The increase in governmental activities investment in capital assets is attributable to the completion of
various building improvement and street resurfacing projects. The decrease in business-type activities
was due to normal depreciation of existing capital assets with no significant purchases. The restricted
portion of the City’s net assets (13.6%) represents resources that are subject to external restrictions on
how they may be used. The remaining balance of unrestricted net assets of $116.0 million may be used
to meet the government’s ongoing obligations to citizens and creditors.
Cash and investments decreased 0.7%, or $1.2 million when compared to the previous fiscal year. This
decrease is directly linked to the State of California mandated payment of $2.4 million for the City’s
share of the Supplemental Educational Revenue Augmentation Fund (SERAF).
6
GOVERNMENT-WIDE FINANCIAL ANALYSIS (CONTINUED)
As noted in the following table, the City’s net assets decreased by $3.4 million during the current fiscal
year. The fiscal year 2010-11 decrease in net assets compares to the fiscal year 2009-10 decrease of
$16.1 million.
City of Cerritos Change in Net Assets
(in millions)
2011
2010
Revenues
Program revenues:
Charges for services
Operating grants and contributions
Capital grants and contributions
General revenues:
Taxes
Investment income
Miscellaneous
$
11.6
8.7
-
$
12.1
11.3
0.6
2011
2010
$
13.2
0.1
$
12.4
0.1
Total
2011
$
2010
24.8
8.7
0.1
$
24.5
11.3
0.7
62.1
19.5
0.6
58.5
20.5
1.1
0.1
-
0.2
-
62.1
19.6
0.6
58.5
20.7
1.1
102.5
104.1
13.4
12.7
115.9
116.8
11.9
6.0
14.2
0.2
22.6
13.0
9.7
0.9
16.7
-
24.0
9.6
17.5
0.5
23.2
12.3
10.8
1.1
16.1
-
9.8
1.1
11.4
1.8
9.7
1.4
6.5
0.2
11.9
6.0
14.2
0.2
22.6
13.0
9.7
0.9
16.7
9.8
1.1
11.4
1.8
24.0
9.6
17.5
0.5
23.2
12.3
10.8
1.1
16.1
9.7
1.4
6.5
0.2
Total expenses
95.2
115.1
24.1
17.8
119.3
132.9
Change in net assets
before transfers
7.3
(11.0)
(10.7)
(5.1)
(3.4)
(16.1)
Transfers
0.2
2.0
(0.2)
(2.0)
-
-
7.5
(9.0)
(10.9)
(7.1)
(3.4)
(16.1)
48.2
55.3
Total revenues
Expenses:
Legislative and administration
Community development
Public works
Water and power
Community and safety services
Administrative services
Cerritos Center for the performing Arts
Unallocated infrastructure depreciation
Interest expense
Water and power
Reclaimed water
Electric utility
Sewer
Change in net assets
Net assets, beginning of year
Net assets, end of year
290.0
$
297.5
299.0
$
290.0
$
37.3
$
48.2
338.2
$
334.8
354.3
$
338.2
The City’s total revenues were $115.9 million in fiscal year 2010-11, while the total cost of all
programs and services was $119.3 million. Revenues decreased by $0.9 million, or 0.8%, from the
prior year levels and expenses decreased $13.6 million, or 10.2% when compared to fiscal year 200910.
Approximately 53.6% of all revenues this past year came from some form of tax (an increase from
50.1% in fiscal year 2009-10).
7
GOVERNMENT-WIDE FINANCIAL ANALYSIS (CONTINUED)
Revenue Sources
Fiscal Year Ended June 30, 2011
Revenues associated with governmental activities decreased
$1.6 million compared to fiscal year 2009-10 primarily due to
the economic recession. Although tax revenues increased,
specifically in the areas of sales taxes and tax increment
revenues ($3.5 million), other revenue sources declined when
compared to one year ago. Decreases in operating grants and
contributions amounted to $2.6 million, while capital grants
declined $0.6 million when compared to the prior year. These
declines in revenues relate to grant monies for street
improvement projects, as well as technology upgrades to the
Sheriff’s station, completed in the prior fiscal year.
Additionally, investment and rental income declined $1.0
million because of the decline in the overall investment market.
Expenses associated with governmental activities decreased
$19.9 million compared to one year earlier. With the economic
downturn and declines in the City’s core revenue sources, all
City departments were charged with reducing operating
expenses to maintain a balanced budget. The largest decrease
in expenses relates to the decrease in the mandated SERAF
payment to the State of California from $11.8 million in the
prior fiscal year to the current year’s payment of $2.4 million.
11%
Sales taxes
20%
Transient occupancy
taxes
<1%
Motor vehicle taxes
4%
Investment and rental
income
19%
Other taxes
<1%
Franchise taxes
1%
Operating grants and
contributions
9%
Property taxes
35%
Miscellaneous
1%
Functional Expenses
Interest and fiscal
charges
17%
Unallocated
infrastructure
depreciation
1%
Cerritos Center for the
Performing Arts
10%
Administrative
Services
14%
Legislative and
Administrative
13%
Community
Development
8%
Public Works
13%
Water and Power
<1%
Community and Safety
Services
24%
Revenue Sources
Charges for servicessewer
<1%
Charges for serviceselectric utility
34%
Investment and rental
income
1%
Capital grants and
contributions
1%
Charges for servicesreclaimed water
6%
Charges for serviceswater
58%
Functional Expenses
Reclaimed Water
5%
Water
41%
Electric Utility
47%
Business-type activities decreased the City’s net assets by
$10.9 million when compared to fiscal year 2009-10.
Charges for services increased by $0.8 million, or 6.5%,
when compared to the prior fiscal year. The increase in
revenues is mainly attributable to reimbursement payments
from other cities related to a joint water-related project.
Expenses increased $6.3 million. The main factor
contributing to this increase is the Electric Utility Fund,
which includes a one-time impairment loss of $2.1 million.
This impairment loss is the result of prior contributions to
the joint powers authority for the City’s share of fuel
reserves, capital reserves and debt service reserves.
Operational expenses increased in the Electric Utility Fund
for additional expenses for the City’s share of the Magnolia
Power Plant operating expenses. Water operations showed
small increases in costs associated with purchased water and
other operational expenses related to water pumping.
Sewer
7%
8
FINANCIAL ANALYSIS OF THE CITY’S FUNDS
As noted earlier, the City of Cerritos uses fund accounting to ensure and demonstrate compliance with
finance-related legal requirements.
Governmental Funds
The focus of the City’s governmental funds is to provide information on near-term inflows, outflows,
and balances of spendable resources. Such information is useful in assessing the City’s financing
requirements. In particular, unreserved fund balance may serve as a useful measure of a government’s
net resources available for spending at the end of the fiscal year.
At the end of the current fiscal year, the City’s governmental funds reported combined ending fund
balances of $146.4 million, an increase of $1.0 million from the prior fiscal year. Nonspendable fund
balances total $102.0 million for such items as long-term receivables ($101.9 million) from the
Cerritos Redevelopment Agency and the Electric Utility Fund and inventories and prepaid expenses
($0.1 million). Restricted fund balances, legally restricted by external parties, total $35.1 million. An
additional $14.2 million in fund balances have been assigned by City management for such items as art
center programs, asset replacement, and self insurance. The remaining negative fund balances are
categorized as unassigned.
The General Fund is the main operating fund of the City. At the end of the current fiscal year,
unassigned fund balance of the General Fund was $71.1 million, which represents 103.1% of General
Fund expenditures, excluding transfers. The remaining fund balance includes nonspendable of $90.1
million (long-term receivables), $0.1 million (inventories/prepaid expenses) and $14.2 million
assigned.
The City’s General Fund balance decreased $7.8 million during the fiscal year compared to a budgeted
increase of $2.7 million. Revenues (including transfers in and contribution from the Cerritos
Redevelopment Agency) completed the fiscal year $0.3 million over the adjusted budget, departmental
expenditures (including transfers out) were over budget $10.8 million, because of the capital outlay
expenditures related to the sale of assets from the Cerritos Redevelopment Agency to the City. This
increase in expenditures resulted in a $10.5 million variance from budgeted to actual fund balance.
The City of Cerritos has two other governmental funds that qualify as major funds. The
Redevelopment Agency Debt Service Fund ended the fiscal year with a deficit fund balance of $57.6
million. The deficit fund balance decreased $8.4 million during the fiscal year due to the sale of assets
to the City, resulting in revenue from the sale of assets in the amount of $11.0 million. The
Redevelopment Agency Capital Projects Fund completed fiscal year 2010-11 with an ending fund
balance of $27.2 million. Of this ending fund balance, $11.9 million is considered nonspendable and
$17.0 million is considered to be restricted for low and moderate income housing expenditures. The
remaining fund balance is a deficit of $1.7 million which is unassigned.
Proprietary Funds
The City’s proprietary funds provide the same type of information found in the government-wide
financial statements, but in more detail.
The City’s major proprietary funds are the Water and Electric Utility Funds. Net assets of these funds
at the end of the fiscal year amounted to $24.5 million and a deficit of $0.7 million, respectively. The
total changes in net assets of these funds were a deficit of $0.9 million and a deficit of $6.9 million,
respectively. In total, net assets for the major funds decreased $7.8 million from the previous fiscal
year.
9
FINANCIAL ANALYSIS OF THE CITY’S FUNDS (CONTINUED)
Proprietary Funds (Continued)
Operating expenses exceeded operating revenues in each of the major proprietary funds resulting in a
decline in net assets. The City has not implemented a rate increase in the past five years, calling upon
existing net assets to subsidize operations.
GENERAL FUND BUDGETARY HIGHLIGHTS
During the fiscal year, there was a $0.9 million decrease in appropriations between the original and
final amended budget. City management mandated budget reductions within all departmental budgets
due to the effects of the economic recession on the City’s major revenue streams. For the second
consecutive year, all line items were reviewed with special emphasis on necessary expenditures, while
items such as travel, training, and supplies were reduced. The sale of assets from the Cerritos
Redevelopment Agency to the City created a variance in capital outlay expenditures, when compared
to appropriations, of $13.3 million.
As stated above, the decrease in appropriations was necessary because General Fund revenues have
declined over the past few years, and though the City’s revenue base has begun a slow rebounding, the
reduced revenue base continues to require reductions in departmental expenditures. General Fund
revenues declined $0.7 million, or 1.1% from fiscal year 2009-10.
CAPITAL ASSET AND DEBT ADMINISTRATION
Capital Assets
The City of Cerritos’ investment in capital assets for its governmental and business-type activities as of
June 30, 2011, amounts to $334.2 million (net of accumulated depreciation), a decrease of $4.3 million
from the prior fiscal year. This investment in capital assets includes land, streets, water, sewer and
storm drain systems, buildings and improvements, machinery and equipment, vehicles, public works of
art, parking structures, water rights and electric rights.
The following table presents the capital assets of the City of Cerritos at June 30, 2011.
Land
Parking structure rights
Right-of-way
Public art
Trees
Construction in progress
Buildings and structures
Improvements other
than buildings
Infrastructure/water mains
and lines/sewer mains
Water rights
Electric Rights
Furniture and equipment
Total
City of Cerritos Capital Assets
(in millions)
Governmental activities
Business-type activities
2010
2011
2010
2011
$ 85.8
$ 84.0
$
$
3.8
3.8
49.2
49.2
4.4
4.4
1.3
1.4
0.2
0.2
121.2
126.0
3.1
3.2
Total
2011
2010
$
85.8 $
84.0
3.8
3.8
49.2
49.2
4.4
4.4
1.3
1.4
0.2
0.2
124.3
129.2
4.7
4.3
-
-
4.7
4.3
15.7
2.9
$ 289.2
15.8
3.1
$ 292.2
27.4
1.7
11.3
1.5
45.0
28.2
1.8
11.8
1.3
46.3
43.1
1.7
11.3
4.4
334.2
44.0
1.8
11.8
4.4
338.5
$
10
$
$
$
CAPITAL ASSET AND DEBT ADMINISTRATION (CONTINUED)
Capital Assets (Continued)
Major capital asset events during the fiscal year included the following:


Installation of solar panels at the corporate yard in the amount of $0.5 million.
Street resurfacing on Norwalk Boulevard and South Street of $0.6 million.
Detailed information relating to capital assets can be found in Note 6 to the basic financial statements.
Long-term debt
At the end of the current fiscal year, the City had total debt outstanding of $166.3 million. The
majority of this debt is Redevelopment Agency revenue bonds ($160.9 million).
City of Cerritos Long-Term Debt
(in millions)
Los Cerritos-Revenue Bonds
Los Coyotes-Revenue Bonds
Add Deferred Amounts
Subtotal – Revenue Bonds
Note Payable
Compensated Absences
Claims Payable-General Liability
$
Total Long-Term Debt
$
2011
37.1 $
122.3
1.5
160.9
1.0
2.7
1.7
2010
39.8
127.4
1.6
168.8
1.0
2.7
1.9
166.3 $
174.4
Detailed information relating to long-term debt can be found in Note 8 to the basic financial
statements.
ECONOMIC FACTORS AND NEXT YEAR’S BUDGET
The current economic situation has appeared to be “the downturn without an end”, affecting virtually
every aspect of commercial activity, including housing, retail, credit and employment. The State of
California’s budget deficit, estimated in the billions, continues to create uncertainty for all
governmental agencies in California. The City of Cerritos is not immune to this uncertainty.
Despite the continuation of the most sweeping nationwide economic downturn in eighty years and the
effects of the State of California’s budgetary crises, the City of Cerritos has been able to maintain its
vibrant business community, and as a result, the community has enjoyed a high level of fiscal stability
due to the success and visibility of its commercial sector. The City has been able to maintain its levels
of service to the community by positioning itself to withstand fluctuations in the economic
environment. The combined tax revenues, particularly sales tax and income from investments and
ground leases have made it possible to progress with the planned level of development while
maintaining a high degree of financial stability.
11
ECONOMIC FACTORS AND NEXT YEAR’S BUDGET (CONTINUED)
The City’s ability to maintain a positive business climate was evidenced with the completion of the
new Landmark Square and the Lazy Dog Cafe adjacent to the Los Cerritos Center. These
accomplishments are strong examples of the City’s continued ability to generate significant ground
rent, sales tax and tax increment revenues.
Despite the challenging economic environment, careful management of expenditures will enable the
City to maintain its ability to fund current levels of services to its residents without the need to use
large amounts of its fund balances. The City has, in the past, used unassigned fund balance for specific
capital projects, but continues to take a cautious approach to spending in light of the ongoing national
and state-wide economic crises. Management is confident that the City can sustain its current level of
services while satisfying the funding needs of future capital projects. Future planned capital projects
include the installation of photovoltaic solar panels at the corporate yard and ongoing street
improvement projects.
The recent fluctuations in revenues, continuing demand for the City’s service levels, and potential
revenue reductions from the State’s actions to eliminate the State budget deficit continue to be taken
into account by the City when budgeting its expenses for the upcoming year. The City of Cerritos
continues to adopt a budget that not only serves as a financial plan, but also a communication device,
policy tool and operations guide for the City Council and the citizens of Cerritos.
REQUESTS FOR INFORMATION
This financial report is designed to provide the City of Cerritos citizens, taxpayers, customers,
investors, and creditors with a general overview of the City’s finances and to illustrate the City’s
accountability for the money it receives. If you have questions about this report or need additional
financial information, contact the City’s Administrative Services Department at the City of Cerritos,
18125 Bloomfield Avenue, Cerritos, CA 90703, or call (562) 860-0311 or visit our website at
www.cerritos.us.
12
BASIC FINANCIAL STATEMENTS
13
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14
GOVERNMENT-WIDE FINANCIAL STATEMENTS
15
16
City of Cerritos
Statement of Net Assets
June 30, 2011
Governmental
Business-Type
Activities
Activities
Total
ASSETS
$
128,203,122
$
5,106,150
$
133,309,272
Restricted assets:
Cash
10,226,660
-
10,226,660
Investments with fiscal agents
16,598,679
-
16,598,679
9,655,935
2,012,529
11,668,464
315,680
11,929
327,609
Accounts receivable
Interest receivable
Internal balances
12,078,953
(12,078,953)
-
Other receivables
3,728
-
3,728
Prepaid expenses
62,864
-
62,864
Inventories
Other post employment benefit assets
Unamortized bond issue costs
15,259
-
15,259
10,441,444
-
10,441,444
1,307,364
-
1,307,364
Capital assets:
Nondepreciable
144,736,130
-
144,736,130
Depreciable, net
144,477,097
44,962,820
189,439,917
478,122,915
40,014,475
518,137,390
Accounts payable and accrued liabilities
5,741,264
2,325,218
8,066,482
Accrued salaries and benefits
3,550,734
111,984
3,662,718
Total Assets
LIABILITIES
Interest payable
1,638,902
-
1,638,902
Unearned revenue
3,273,702
-
3,273,702
317,393
34,269
351,662
Deposits payable
Noncurrent liabilities:
9,900,784
67,700
9,968,484
Due in more than one year
Due within one year
156,195,436
203,100
156,398,536
Total Liabilities
180,618,215
2,742,271
183,360,486
128,288,812
44,962,820
173,251,632
NET ASSETS
Invested in capital assets, net of related debt
Restricted for:
Debt services
16,598,679
-
16,598,679
Low and moderate housing
17,012,352
-
17,012,352
1,473,481
-
1,473,481
10,441,444
-
10,441,444
Special revenues
Other post employment benefits
Unrestricted
123,689,932
Total Net Assets
$
See accompanying Notes to Basic Financial Statements.
17
297,504,700
(7,690,616)
$
37,272,204
115,999,316
$
334,776,904
City of Cerritos
Statement of Activities
For the Year Ended June 30, 2011
Program Revenues
Operating
Functions/Programs
Expenses
Capital
Charges for
Grants and
Grants and
Services
Contributions
Contributions
Governmental Activities:
Legislative and Administration
$
Community Development
11,895,682
$
7,623
$
3,879,914
$
-
5,995,050
1,055,373
1,984,647
14,271,031
767,444
2,586,567
-
180,845
66,788
-
-
Community and Safety Services
22,595,702
3,864,946
240,163
-
Administrative Services
13,033,543
1,237,313
20,173
-
9,697,750
4,558,285
-
-
Public Works
Water and Power
Cerritos Center for the Performing Arts
-
908,341
-
-
-
16,654,681
-
-
-
95,232,625
11,557,772
8,711,464
-
Water
9,787,697
7,763,664
-
95,360
Reclaimed Water
1,086,647
838,548
-
-
11,428,662
4,556,861
-
-
1,787,455
65,095
-
-
24,090,461
13,224,168
-
95,360
Interest and fiscal charges
Total Governmental Activities
Business-Type Activities:
Electric Utility
Sewer
Total Business-Type Activities
Total
$
119,323,086
$
24,781,940
$
8,711,464
$
95,360
General Revenues:
Taxes:
Sales taxes
Property taxes
Motor vehicle taxes
Franchise taxes
Transient occupancy taxes
Other taxes
Investment and rental income
Miscellaneous
Transfers
Total General Revenues
Changes in Net Assets
Net Assets - Beginning of Year, as restated (Note 16)
Net Assets - End of Year
18
Net (Expense) Revenue and
Changes in Net Assets
$
$
Governmental
Business-Type
Activities
Activities
(8,008,145)
$
-
$
(8,008,145)
(2,955,030)
-
(2,955,030)
(10,917,020)
-
(10,917,020)
(114,057)
-
(114,057)
(18,490,593)
-
(18,490,593)
(11,776,057)
-
(11,776,057)
(5,139,465)
-
(5,139,465)
(908,341)
-
(908,341)
(16,654,681)
-
(16,654,681)
(74,963,389)
-
(74,963,389)
-
(1,928,673)
(1,928,673)
-
(248,099)
(248,099)
-
(6,871,801)
(6,871,801)
-
(1,722,360)
(1,722,360)
-
(10,770,933)
(10,770,933)
(74,963,389)
$
(10,770,933)
$
(85,734,322)
20,486,099
-
20,486,099
35,034,773
-
35,034,773
4,451,226
-
4,451,226
1,487,320
-
1,487,320
398,620
-
398,620
262,970
-
262,970
19,458,284
71,130
19,529,414
621,736
-
621,736
242,091
(242,091)
-
82,443,119
(170,961)
82,272,158
7,479,730
(10,941,894)
290,024,970
$
Total
297,504,700
(3,462,164)
48,214,098
$
37,272,204
338,239,068
$
334,776,904
19
20
FUND FINANCIAL STATEMENTS
21
City of Cerritos
Balance Sheet
Governmental Funds
June 30, 2011
Major Funds
Redevelopment
General
Redevelopment
Agency
Agency
Nonmajor
Total
Debt Service
Capital Projects
Governmental
Governmental
Fund
Fund
Funds
Funds
ASSETS
$
94,093,699
$
660,970
$
16,350,599
$
1,728,062
$
112,833,330
Restricted assets:
Cash
Investments with fiscal agents
10,226,660
-
-
-
10,226,660
-
16,598,679
-
-
16,598,679
6,922,611
2,086,259
226,601
420,464
9,655,935
Receivables:
Accounts
Notes, net of allowance for uncollectible
Interest
Other
-
-
-
-
-
163,188
100,868
19,289
4,468
287,813
1,688
-
-
2,040
3,728
3,253,440
16,066,000
470,040
-
19,789,480
Prepaid expenses
62,864
-
-
-
62,864
Inventories
15,259
-
-
-
15,259
Due from other funds
Advances to other funds
Total Assets
90,057,072
-
11,881,487
-
101,938,559
$
204,796,481
$
35,512,776
$
28,948,016
$
2,155,034
$
271,412,307
$
4,459,694
$
925,000
$
120,169
$
233,434
$
5,738,297
LIABILITIES AND
FUND BALANCES
Liabilities:
3,483,451
Deposits payable
-
-
67,283
3,550,734
276,560
-
40,833
-
317,393
Due to other funds
16,091,549
2,302,314
1,332,379
15,357
19,741,599
Deferred revenue
5,143,920
-
255,836
365,479
5,765,235
-
89,907,487
-
-
89,907,487
29,455,174
93,134,801
1,749,217
681,553
125,020,745
Advances from other funds
Total Liabilities
Fund Balances:
Nonspendable
90,135,195
-
11,881,487
-
102,016,682
Restricted
-
16,598,679
17,012,352
1,473,481
35,084,512
Assigned
14,150,052
-
-
-
14,150,052
Unassigned
71,056,060
(74,220,704)
(1,695,040)
-
(4,859,684)
175,341,307
(57,622,025)
27,198,799
Total Fund Balances
Total Liabilities and Fund Balances
$
204,796,481
$
22
35,512,776
$
28,948,016
1,473,481
$
2,155,034
146,391,562
$
271,412,307
City of Cerritos
Reconciliation of the Governmental Funds Balance Sheet
to the Government-Wide Statement of Net Assets
June 30, 2011
Total Fund Balances - Total Governmental Funds
$
146,391,562
Amounts reported for governmental activities in the statement of net assets are different because:
Capital assets used in governmental activities are not financial resources and therefore are not
reported in governmental funds.
Cost
$
Less: Accumulated depreciation
396,859,339
(107,646,112)
289,213,227
Revenue earned but not available to pay for current period expenditures for governmental funds
is deferred.
2,491,533
Internal service funds are used by management to charge the costs of various city activities to
individual government. The assets and liabilities of the internal service funds are included in
the statement of net assets.
15,394,692
Long-term liabilities applicable to the City governmental activities are not due and payable in
the current period and accordingly are not reported as fund liabilities. All liabilities, both
current and long-term, are reported in the Statement of Net Assets:
Tax allocation bonds payable
Note payable
Compensated absences payable
Claims payable
Unamortized bond premium
Unamortized deferred charge on refunding of bonds
Unamortized bond discount
Unamortized issuance cost
$ (159,440,000)
(1,025,000)
(2,476,008)
(1,670,797)
(3,987,076)
1,701,411
801,250
1,307,364
(164,788,856)
Net other post employment benefit asset is not available to pay for current period expenditures
and therefore is not reported in the governmental funds.
10,441,444
Accrued interest payable for the interest due on long-term liabilities has not been reported in the
governmental funds.
(1,638,902)
Net Assets of Governmental Activities
$
23
297,504,700
City of Cerritos
Statement of Revenues, Expenditures and Changes in Fund Balances
Governmental Funds
Major Funds
Redevelopment
General
Redevelopment
Agency
Agency
Nonmajor
Total
Debt Service
Capital Projects
Governmental
Governmental
Fund
Fund
Funds
Funds
REVENUES:
Property, sales, and other taxes
$
23,635,540
$
25,876,994
$
6,469,248
$
-
$
55,981,782
Franchises
1,487,320
-
-
79,355
1,566,675
Licenses and permits
1,869,739
-
-
-
1,869,739
Fines and forfeitures
1,305,871
-
-
-
1,305,871
15,757,260
567,385
2,270,617
30,339
18,625,601
Revenues from other agencies
8,741,938
-
-
5,174,136
13,916,074
Current fees and services
6,886,623
-
-
103,088
6,989,711
747,669
-
41,833
-
789,502
60,431,960
26,444,379
8,781,698
5,386,918
101,044,955
2,515,105
4,736,812
3,968,040
128,405
11,348,362
3,000,786
-
895,956
2,034,643
5,931,385
10,246,568
-
-
3,865,379
14,111,947
Other revenues
Total Revenues
EXPENDITURES:
Current:
Public Works
175,593
-
-
-
175,593
Water and Power
20,909,182
-
-
248,257
21,157,439
10,747,581
-
-
552,621
11,300,202
8,054,469
-
-
-
8,054,469
13,300,639
-
28,470
1,388,064
14,717,173
Capital outlay
Debt service:
Principal retirement
-
7,712,500
-
-
7,712,500
Interest
-
16,563,936
173,020
-
16,736,956
68,949,923
29,013,248
5,065,486
8,217,369
111,246,026
(8,517,963)
(2,568,869)
3,716,212
(2,830,451)
(10,201,071)
Total Expenditures
REVENUES OVER
(UNDER) EXPENDITURES
OTHER FINANCING SOURCES (USES):
Transfers in
Transfers out
Proceeds from sale of assets
1,200,000
-
-
(2,233,414)
-
-
2,007,464
(731,959)
-
11,000,000
-
-
3,207,464
(2,965,373)
11,000,000
Contribution from Cerritos
Redevelopment Agency
Contribution to City of Cerritos
Total Other Financing Sources (Uses)
Net Change in Fund Balances
1,792,610
-
-
-
1,792,610
-
-
(1,792,610)
-
(1,792,610)
759,196
11,000,000
(1,792,610)
1,275,505
11,242,091
8,431,131
1,923,602
(1,554,946)
1,041,020
(66,053,156)
25,275,197
3,028,427
(7,758,767)
FUND BALANCES:
Beginning of Year, as restated (Note 16)
End of Year
183,100,074
$
175,341,307
$
(57,622,025)
24
$
27,198,799
$
1,473,481
145,350,542
$
146,391,562
City of Cerritos
Reconciliation of the Governmental Funds Statement of Revenues, Expenditures and Changes
in Fund Balances to the Government-Wide Statement of Activities
Net Change in Fund Balance - Total Governmental Funds:
$
1,041,020
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 cost
of these assets is allocated over their estimated useful lives and reported as depreciation expense.
Capital outlays
Depreciation expense
$
3,717,173
(6,640,753)
(2,923,580)
The net effect of adjustment involving disposal of capital assets
(42,362)
Revenue in the Statement of Activities that does not provide current financial resources is not reported as
revenue in governmental funds.
(306,182)
Internal service funds are used by management to charge the costs of certain activities, such as equipment
replacement and inventory usage fees to individual funds. The change in net assets of internal service funds
is reported within governmental activities.
(98,623)
Change in net other post employment benefit asset reported in the statements of activities does not provide
current financial resources and, therefore, is not reported as an revenue in governmental funds
1,731,491
The issuance of long-term liabilities provides current financial resources to governmental funds, while the
repayment of the principal of long-term liabilities consumes the current financial resources of governmental
funds. Neither transaction, however, has any effect on net assets. Also, governmental funds report the effect
of issuance costs, premiums, discounts, and similar items when debt is first issued, whereas these amounts
are deferred and amortized in the statement of activities. This amount is the net effect of these differences in
the treatment of long-term liabilities and related items.
Debt issued or incurred:
Principal payments
Change in compensated absences payable
Change in claim payable
$
7,712,500
36,427
246,764
7,995,691
Some expenses reported in the Statement of Activities do not require the use of current financial resources
and therefore are not reported as expenditures in the governmental funds.
Accrued interest
Amortization of bond premium
79,563
306,699
Amortization of deferred charge on refunding
(141,785)
Amortization of bond discount
(61,635)
Amortization of issuance costs
(100,567)
Change in Net Assets of Governmental Activities
82,275
$
25
7,479,730
26
PROPRIETARY FUND FINANCIAL STATEMENTS
27
City of Cerritos
Proprietary Funds
June 30, 2011
Governmental
Business-Type Activities - Enterprise Funds
Nonmajor
Major Funds
Activities -
Water
Electric
Enterprise
Total Enterprise
Internal
Fund
Utility
Funds
Funds
Service Funds
ASSETS
Current Assets:
$
Accounts receivable
3,503,900
$
1,092,734
Interest receivable
Due from other funds
Total Current Assets
1,089,405
$
512,845
755,002
164,793
7,977
-
-
30,178
4,604,611
1,874,585
$
5,106,150
$
15,369,792
2,012,529
-
3,952
11,929
27,867
-
30,178
-
681,590
7,160,786
15,397,659
Noncurrent Assets:
Capital assets:
Building and structures
4,947,697
-
1,315,000
6,262,697
-
Water mains and lines
27,882,460
-
13,068,932
40,951,392
-
Equipment
4,343,651
-
120,278
4,463,929
-
Water rights acquired
2,259,378
-
-
2,259,378
-
Electric utility rights acquired
-
14,105,000
-
14,105,000
-
Sewer mains
-
-
11,760,205
11,760,205
-
(18,721,678)
(2,821,000)
(13,297,103)
(34,839,781)
-
Total Noncurrent Assets
20,711,508
11,284,000
12,967,312
44,962,820
-
Total Assets
25,316,119
13,158,585
13,648,902
52,123,606
15,397,659
Accumulated depreciation
LIABILITIES
Current Liabilities:
Accounts payable
441,784
1,860,097
23,337
2,325,218
2,967
84,314
14,488
13,182
111,984
-
Deposits payable
34,269
-
-
34,269
-
-
-
78,059
78,059
-
67,700
-
-
67,700
-
628,067
1,874,585
114,578
2,617,230
2,967
Due to other funds
Compensated absences
Total Current Liabilities
Noncurrent Liabilities:
Advance from other funds
-
12,031,072
-
12,031,072
-
203,100
-
-
203,100
-
Total Noncurrent Liabilities
203,100
12,031,072
-
12,234,172
-
Total Liabilities
831,167
13,905,657
114,578
14,851,402
2,967
20,711,508
11,284,000
12,967,312
44,962,820
3,773,444
(12,031,072)
NET ASSETS
Invested in capital assets
Unrestricted
Total Net Assets
$
24,484,952
$
28
(747,072)
567,012
$
13,534,324
-
(7,690,616)
$
37,272,204
15,394,692
$
15,394,692
City of Cerritos
Statement of Revenues, Expenses and Changes in Net Assets
Proprietary Funds
Nonmajor
Major Funds
Water
Electric
Enterprise
Total Enterprise
Fund
Utility
Funds
Funds
Governmental
Activities Internal
Service Funds
OPERATING REVENUES:
Sales of water:
Regular
Wholesale
Sales of electricity:
Regular
Resale
Fire lines
Other agency contribution
Other revenues
$
Total Operating Revenues
$
5,659,090
977,673
-
$
838,548
-
$
6,497,638
977,673
$
-
260,388
40,658
825,855
-
3,678,805
137
860,403
17,516
65,095
-
3,678,805
137
260,388
105,753
1,686,258
17,516
-
7,763,664
4,556,861
903,643
13,224,168
-
3,729,215
3,662,347
1,140,212
406,017
36,348
813,558
-
832,170
6,979,650
21,238
470,167
2,143,267
460,607
176,019
1,708,286
57,596
5,144
466,450
-
5,021,992
3,838,366
9,828,148
463,613
62,730
1,750,175
2,143,267
272,247
-
9,787,697
10,446,492
2,874,102
23,108,291
272,247
(2,024,033)
(5,889,631)
(1,970,459)
(9,884,123)
(272,247)
41,954
-
(982,170)
29,176
-
71,130
(982,170)
173,624
-
41,954
(982,170)
29,176
(911,040)
173,624
OPERATING EXPENSES:
Management
Production and distribution
Operations
Inspections
Billings and collection
Administrative costs
Depreciation
Impairment loss
Total Operating Expenses
OPERATING LOSS
NONOPERATING REVENUES (EXPENSES):
Investment income/(loss)
Interest expense
Total Nonoperating Revenues (Expenses)
INCOME (LOSS) BEFORE CAPITAL
CONTRIBUTIONS AND TRANSFERS
(1,982,079)
(6,871,801)
(1,941,283)
(10,795,163)
(98,623)
95,360
957,909
-
-
(1,200,000)
95,360
957,909
(1,200,000)
-
1,053,269
-
(1,200,000)
(146,731)
-
(6,871,801)
(3,141,283)
(10,941,894)
(98,623)
CAPITAL CONTRIBUTIONS AND TRANSFERS:
Capital contributions
Transfers in
Transfers out
Total Capital Contributions and Transfers
Change in Net Assets
(928,810)
NET ASSETS:
Beginning of the Year, as restated (Note 16)
End of the Year
25,413,762
$
24,484,952
6,124,729
$
29
(747,072)
16,675,607
$
13,534,324
48,214,098
$
37,272,204
15,493,315
$
15,394,692
City of Cerritos
Statement of Cash Flows
Proprietary Funds
Major Funds
Governmental
Nonmajor
Activities -
Water
Electric
Enterprise
Total Enterprise
Internal
Fund
Utility
Funds
Funds
Service Funds
CASH FLOWS FROM OPERATING ACTIVITIES:
Cash received from customers
$
7,663,823
$
4,283,127
$
890,419
$
12,837,369
$
-
Cash paid to other suppliers of goods or services
(5,238,330)
(5,266,631)
(1,988,314)
(12,493,275)
(236,715)
Cash paid to employees
(3,698,328)
(817,682)
(454,575)
(4,970,585)
(76,635)
(1,272,835)
(1,801,186)
(1,552,470)
(4,626,491)
(313,350)
Net Cash Used for Operating Activities
CASH FLOWS FROM NONCAPITAL
FINANCING ACTIVITIES:
Transfers from other funds
Cash advances from other funds
957,909
-
-
957,909
-
-
2,864,150
-
2,864,150
-
957,909
2,864,150
-
3,822,059
-
Net Cash Provided by (Used for)
Noncapital Financing Activities
CASH FLOWS FROM CAPITAL AND
RELATED FINANCING ACTIVITIES:
Acquisition of capital assets
Proceeds from sale of capital assets
Transfers to other funds
Receipt of capital contribution
(447,775)
-
-
(447,775)
-
20,711
-
-
20,711
-
-
-
(1,200,000)
95,360
-
-
(331,704)
-
(1,200,000)
(1,200,000)
-
95,360
-
Capital and Related Financing Activities
(1,531,704)
-
CASH FLOWS FROM INVESTING ACTIVITIES:
Interest income received
43,509
61
32,727
76,297
181,735
43,509
61
32,727
76,297
181,735
Investing Activities
Net Increase (Decrease) in
Cash and Cash Equivalents
(603,121)
1,063,025
(2,719,743)
(2,259,839)
3,232,588
7,365,989
(131,615)
CASH AND CASH EQUIVALENTS:
Beginning of Year
End of Year
4,107,021
$
3,503,900
30
26,380
$
1,089,405
$
512,845
$
5,106,150
15,501,407
$
15,369,792
Governmental
Nonmajor
Activities -
Water
Electric
Enterprise
Total Enterprise
Internal
Fund
Utility
Funds
Funds
Service Funds
RECONCILIATION OF OPERATING
LOSS TO NET CASH PROVIDED BY
(USED FOR) OPERATING ACTIVITIES:
Operating loss
$
(2,024,033)
$
(5,889,631)
$
(1,970,459)
$
(9,884,123)
$
(272,247)
Adjustments to reconcile operating income to net cash
provided by (used for) operating activities:
Impairment loss
813,558
470,167
466,450
1,750,175
-
-
2,143,267
-
2,143,267
-
Change in assets and liabilities:
(Increase) decrease in accounts receivable
(Increases) decrease in due from other funds
(77,478)
(273,734)
(13,224)
(364,436)
-
-
(30,186)
-
(30,186)
-
3,930
438,007
-
1,368,938
8,357
1,345,309
(41,103)
14,488
6,032
38,544
-
(Increase) decrease in prepaid expenses
38,580
Increase (decrease) in accounts payable
(31,986)
Increase (decrease) in accrued salaries and benefits
18,024
Increase (decrease) in deposits payable
Increase (decrease) in due to other funds
Increase (decrease) in compensated absences
395,497
$
(22,363)
-
-
(22,363)
-
-
8
(53,556)
(53,548)
-
12,863
-
-
12,863
-
(1,272,835)
31
$
(1,801,186)
$
(1,552,470)
$
(4,626,491)
$
(313,350)
32
City of Cerritos
Index to Notes to Basic Financial Statements
Page
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES ·················································· 35
A. Financial Reporting Entity ···························································································· 35
B. Basis of Accounting and Measurement Focus ··································································· 36
C. Cash and Cash Equivalents ·························································································· 39
D. Investments ··············································································································· 39
E. Inventories ················································································································ 39
F. Capital Assets ············································································································ 39
G. Compensated Absences Payable ···················································································· 40
H. Claims and Judgments································································································· 41
I. Property Taxes ··········································································································· 41
J. Fund Balances and Net Assets ······················································································· 41
K. Estimates ·················································································································· 42
2. CASH AND INVESTMENTS ··························································································· 42
A. Deposits ··················································································································· 43
B. Investments ··············································································································· 44
C. Investments Authorized by Debt Agreements ·································································· 44
D. Risk Disclosures ········································································································· 45
E. Investments in State Investment Pool·············································································· 47
3. PREPAID EXPENSES ······································································································ 47
4. NOTES RECEIVABLE ····································································································· 47
5. INTERFUND TRANSACTIONS ······················································································· 48
A. Government-Wide Financial Statements ·········································································· 48
B. Fund Financial Statements···························································································· 48
6. CAPITAL ASSETS ·········································································································· 51
7. DEFERRED/UNEARNED REVENUE ················································································· 53
8. LONG TERM DEBT········································································································ 54
A. Los Cerritos Redevelopment Project 1993 Revenue Bonds, Series B ······································· 55
B. Los Cerritos Redevelopment Project 2002 Tax Allocation Revenue Bonds, Series A ·················· 55
C. Los Cerritos Redevelopment Project 2002 Tax Allocation Revenue Bonds, Series B ··················· 56
D. Los Cerritos and Los Coyotes Redevelopment Project-Magnolia Power Project B,
Series 2003 Revenue Bonds ··························································································· 57
E. Los Coyotes Redevelopment Project 1993 Revenue Bonds, Series A ······································ 58
F. Los Coyotes Redevelopment Project 1993 Revenue Bonds, Series B ······································· 59
G. Los Coyotes Redevelopment Project 1998 Tax Allocation Bonds, Series A······························· 60
H. Los Coyotes Redevelopment Project 2002 Tax Allocation Revenue Bonds, Series A ·················· 61
I. Los Coyotes Redevelopment Project 2002 Tax Allocation Revenue Bonds, Series B ··················· 62
J. Los Cerritos and Los Coyotes Redevelopment Project-Magnolia Power Project B,
Series 2003 Revenue Bonds ·························································································· 62
33
City of Cerritos
Index to Notes to Basic Financial Statements, Continued
Page
8. LONG TERM DEBT, Continued
K. Los Cerritos Redevelopment Project-Note Payable ···························································· 64
L. Compensated Absences ······························································································· 64
M. Claims Payable – General Liability ················································································· 64
9. FUND BALANCES CLASSIFICATIONS ············································································ 65
10. RETIREMENT PLAN ······································································································ 66
A. Defined Benefit Pension Plan ························································································ 66
B. Post-Retirement Health Care Benefits ············································································· 67
C. Other Defined Contribution Plans ·················································································· 70
11. LIABILITY, PROPERTY AND WORKERS’ COMPENSATION PROTECTION ························ 70
A. Description of Self-Insurance Pool Pursuant to Joint Powers Agreement ································ 70
B. Self-Insurance Programs of the CJPIA ············································································· 71
C. Purchased Insurance ··································································································· 72
D. Adequacy of Protection ······························································································· 73
E. Retroactive Deposit ····································································································· 73
12. OTHER REQUIRED DISCLOSURES ················································································· 74
A. Deficit Fund Balances ·································································································· 74
B. Excess Expenditures over Appropriations ········································································ 74
13. COMMITMENTS AND CONTINGENCIES ······································································· 75
A. Lawsuits ··················································································································· 75
B. Contract with Los Angeles County Sheriff’s Department ···················································· 75
C. $5,640,000 Tax Allocation Bonds arrangement with Commonwealth Cousins I, LLC················· 75
D. Electric Utility ··········································································································· 75
E. Grants ······················································································································ 76
14. LEASE INCOME UNDER OPERATING LEASES ································································ 76
15. TRANSFER OF ASSETS ·································································································· 76
16. PRIOR PERIOD ADJUSTMENTS ····················································································· 77
17. RECENT CHANGES IN LEGISLATION AFFECTING CALIFORNIA REDEVELOPMENT
AGENCIES ···················································································································· 78
34
City of Cerritos
Notes to Basic Financial Statements
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The basic financial statements of the City of Cerritos, California, (the “City”) have been prepared in
conformity with accounting principles generally accepted in the United States of America (“GAAP”) as
applied to governmental agencies. The Governmental Accounting Standards Boards (“GASB”) is the
accepted standard setting body for establishing governmental accounting and financial reporting principles.
The following is a summary of the significant policies:
A. Financial Reporting Entity
The City was incorporated on April 26, 1956 as a charter city under the laws of the State of California and
enjoys all the rights and privileges allowed by its charter. The City is governed by an elected five-member
council.
As required by GAAP, the accompanying financial statements present the City and its component units.
GASB Statement No. 14, The Financial Reporting Entity, defines component units as legally separate entities
that meet any one of the following tests:

The City appoints the voting majority of the board of the potential component unit and:
o
is able to impose its will on the component unit and/or
o
is in a relationship of financial benefit or burden with the potential component unit.

The potential component unit is fiscally dependent upon the City.

The financial statements of the City would be misleading if data from the potential component units
were omitted.
Management determined that the following blended component units based on the criteria above:
Cerritos Redevelopment Agency - The Cerritos Redevelopment Agency (the “Agency”) was activated in
November, 1969 pursuant to the State of California Health and Safety Code, Section 33000 entitled
“Community Development Law”. The primary purpose of the Agency is to eliminate physically and
economically blighted areas by encouraging the development of residential, commercial, industrial,
recreational and public facilities. The Agency has undertaken the Los Cerritos Redevelopment Project,
encompassing approximately 940 acres, and the Los Coyotes Redevelopment Project that covers 1,615
acres in the eastern section of the City. The Agency, through the two project areas, has constructed
various facilities that are being utilized by the City.
Cerritos Public Financing Authority - The Cerritos Public Financing Authority (the “Authority”) was
formed pursuant to a Joint Exercise of Powers Agreement, dated May 18, 1993 by and between the City
and the Agency. The purpose of the Authority is to provide financing for public improvements and
capital expenditures and for the repayment of existing debt.
These component units are included in the primary government because of the significance of their
financial or operational relationship and due to the same governing body as the City.
The Agency issues separate component unit financial statements and these can be obtained from the City’s
Administrative Services Department located at 18125 Bloomfield Avenue, Cerritos, California 90703.
Separate financial statements are not prepared for the Authority.
35
City of Cerritos
Notes to Basic Financial Statements, Continued
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, Continued
B. Basis of Accounting and Measurement Focus
The accounts of the City are organized on the basis of funds, each of which is considered a separate
accounting entity. The operations of each fund are accounted for in a separate set of self-balancing accounts
that comprise its assets, liabilities, fund equity, revenues, and expenditures or expenses, as appropriate.
City resources are allocated to and accounted for in individual funds based upon the purpose for which
they are to be spent and the means by which spending activities are controlled.
Government-Wide Financial Statements
The City’s Government-Wide Financial Statements include a Statement of Net Assets and a Statement of
Activities. These statements present summaries of Governmental and Business-Type Activities for the City
accompanied by a total column.
The Government-Wide Financial Statements are presented on an “economic resources” measurement focus
and the accrual basis of accounting. Accordingly, all of the City’s assets and liabilities, including capital
assets, as well as infrastructure assets, and long-term liabilities, are included in the accompanying
Statement of Net Assets. The Statement of Activities presents changes in net assets. Under the accrual basis
of accounting, revenues are recognized in the period in which they are earned while expenses are
recognized in the period in which the liability is incurred. The types of transactions reported as program
revenues for the City are reported in three categories: 1) charges for services, 2) operating grants and
contributions, and 3) capital grants and contributions.
Certain eliminations have been made as prescribed by GASB Statement No. 34 in regards to interfund
activities, payables and receivables including the corresponding deferred revenues. All internal balances in
the Statement of Net Assets have been eliminated except those representing balances between the
governmental activities and the business-type activities, which are presented as internal balances and
eliminated in the total primary government column. In the Statement of Activities, internal service fund
transactions have been eliminated. However, transactions between governmental and business-type
activities have not been eliminated. The following interfund activities have been eliminated:



Due to and from other funds
Advances to and from other funds
Transfers in and out
Private-sector standards of accounting and financial reporting issued prior to December 1, 1989, generally
are followed in both the government-wide and proprietary fund financial statements to the extent that
those standards do not conflict with or contradict guidance of the Governmental Accounting Standards
Board. The City also has the option of following subsequent private-section guidance for their businesstype activities and enterprise funds, subject to this same limitation. The City has elected not to follow
subsequent private-sector guidance.
36
City of Cerritos
B. Basis of Accounting and Measurement Focus, Continued
Governmental Fund Financial Statements
Governmental Fund Financial Statements include a Balance Sheet and a Statement of Revenues,
Expenditures and Changes in Fund Balance for all major governmental funds and nonmajor funds in
aggregate. An accompanying schedule is presented to reconcile and explain the differences in net assets as
presented in these statements to the net assets presented in the Government-Wide financial statements. The
City has presented all major funds that met the qualifications for major fund reporting.
All governmental funds are accounted for on a spending or "current financial resources" measurement
focus and the modified accrual basis of accounting. Accordingly, only current assets and current liabilities
are included on the Balance Sheets. The Statement of Revenues, Expenditures and Changes in Fund Balance
presents increases (revenues and other financing sources) and decreases (expenditures and other financing
uses) in net current assets. Under the modified accrual basis of accounting, revenues are recognized in the
accounting period in which they become both measurable and available to finance expenditures of the
current period.
Revenues are recorded when received in cash, except that revenues subject to accrual (generally 60 days
after year-end) are recognized when due. The primary revenue sources, which have been treated as
susceptible to accrual by the City, are property taxes, sales taxes, taxpayer-assessed tax revenues (transient
occupancy taxes, franchise taxes, etc.), certain grant revenues and earnings on investments. Expenditures
are recorded in the accounting period in which the related fund liability is incurred.
Deferred revenues arise when potential revenues do not meet both the “measurable” and “available” criteria
for recognition in the current period. Deferred revenues also arise when the government receives resources
before it has a legal claim to them, as when grant monies are received prior to incurring qualifying
expenditures. In subsequent periods when both revenue recognition criteria are met or when the
government has a legal claim to the resources, the deferred revenue is removed from the balance sheet and
revenue is recognized.
Reconciliation of the Fund Financial Statements to the Government-Wide Financial Statements is provided
to explain the differences created by the integrated approach of GASB Statement No. 34.
Proprietary Fund Financial Statements
Proprietary Fund Financial Statements include a Statement of Net Assets, a Statement of Revenues,
Expenses and Changes in Net Assets, and a Statement of Cash Flows for each major proprietary fund.
Proprietary funds are accounted for using the "economic resources" measurement focus and the accrual
basis of accounting. Accordingly, all assets and liabilities (whether current or noncurrent) are included on
the Statement of Net Assets. The Statement of Revenues, Expenses and Changes in Net Assets presents
increases (revenues) and decreases (expenses) in total net assets. Under the accrual basis of accounting,
revenues are recognized in the period in which they are earned while expenses are recognized in the period
in which the liability is incurred. In these funds, receivables have been recorded as revenue and provisions
have been made for uncollectible amounts.
37
City of Cerritos
Proprietary Fund Financial Statements, Continued
Proprietary funds distinguish operating revenues and expenses from nonoperating items. Operating
revenues and expenses generally result from providing services and producing and delivering goods in
connection with a proprietary fund’s principal ongoing operations. The principal operating revenues of the
proprietary funds are charges to customers for sales and services. Operating expenses for the proprietary
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 nonoperating revenues and expenses.
The City reports the following major governmental funds:
The General Fund is the general operating fund of the City. All general tax revenues and other receipts
not allocated by law or contractual agreement to other funds are accounted for in this fund.
Expenditures of this fund include general operating costs not paid through other funds.
The Redevelopment Agency Debt Service Fund is used to account for tax increment revenue and related
interest income. Tax increment is property tax revenue based on the increase in valuation of the project
areas over the “frozen” base year. This fund is used for the repayment of principal and interest on the
indebtedness of the Agency.
The Redevelopment Agency Capital Projects Fund is used to account for advances from the City of
Cerritos, bond proceeds available for project improvements, a portion of tax increment revenues set
aside for low/moderate income housing projects, interest income on invested funds and certain
miscellaneous income. The funds are expended primarily for administrative expenses and
redevelopment project costs.
The City reports the following major proprietary funds:
The Water Fund is used to account for the provision of water to the residents and businesses of the City.
All activities necessary to provide such services are accounted for in this fund including, but not limited
to, administration, operations, maintenance, construction, and financing.
The Electric Utility Fund is used to account for provided retail electricity provided by the City. Initially,
major accounts for both the City and the ABC Unified School District were served. Additional accounts
have been added since inception to utilize the full output of the Magnolia plant allocated to Cerritos. All
activities necessary to provide such services are accounted for in this fund including, but not limited to,
administration, operations, maintenance, construction financing and related debt service.
38
City of Cerritos
Additionally, the City reports the following fund types:
The Special Revenue Funds are used to account for and report the proceeds of specific revenue sources
that are restricted or committed to expenditure for specified purposes other than debt service or capital
projects.
The Capital Projects Fund is used to account for and report financial resources that are restricted,
committed, or assigned to expenditure for capital outlays including the acquisition or construction of
capital facilities and other capital assets.
The Reclaimed Water Fund and Sewer Fund, Nonmajor Enterprise Funds, are used to account for the
construction, operation, and maintenance of the city owned reclaimed water system and sewer system
and to account for monies received from sewer connection and maintenance fees.
The Equipment Replacement Fund, an Internal Service Fund, is used to account for the regular
maintenance and replacement of the City’s capital equipment and office equipment inventory.
C. Cash and Cash Equivalents
A substantial portion of the City’s investments are in short-term liquid instruments, with original maturities
of three months or less (excluding fiscal agent investments). The Enterprise and Internal Service Funds
participate in the pooling of City-wide cash and investments. Amounts from the pool are available to these
funds on demand. As a result, the cash and investments of the Enterprise and Internal Service Funds are
considered to be cash and cash equivalents for Statement of Cash Flow purposes. The Statement of Cash
Flows is presented using the direct method.
D. Investments
Investments are stated at fair value (quoted market price or best available estimate thereof).
E. Inventories
Inventories are valued at average cost. Inventories in the General Fund are recorded based on the
consumption (capitalization) method and are offset by a nonspendable fund balance.
F. Capital Assets
Capital assets (including infrastructure) are recorded at cost where historical records are available and at an
estimated original cost where no historical records exist. Contributed capital assets are valued at their
estimated fair market value at the date of contribution. Generally, capital asset purchases in excess of $2,500
are capitalized if they have an expected useful life of 1 year or more.
39
City of Cerritos
F. Capital Assets, Continued
Capital assets include additions to public domain (infrastructure), certain improvements including
pavement, curb and gutter, sidewalks, traffic control devices, street lights, sewers, water lines, bridges and
right-of-way corridors within the City. The City has valued and recorded all infrastructure asset data as of
June 30, 2011.
In June 1999, the Governmental Accounting Standards Board (GASB) issued Statement No. 34 which
requires the inclusion of infrastructure capital assets in local governments’ basic financial statements. For
infrastructure systems, the City elected to use the “Basic Approach” as defined by GASB Statement No. 34
for infrastructure reporting.
The costs of normal maintenance and repairs that do not add to the value of the asset 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 the capital assets of business-type activities is included as part of
the capitalized value of the assets constructed.
Capital assets used in operations are depreciated over their estimated useful lives using the straight-line
method. The lives used for depreciation purposes of each capital asset class are:
Buildings
Improvements other than buildings
Water rights
Vehicles
Machinery and equipment
Office furniture, computers and equipment
Leased property
Infrastructure
40 years
10 to 40 years
65 years
40 years
5 to 15 years
5 to 15 years
3 to 15 years
5 to 10 years
20 to 75 years
G. Compensated Absences Payable
In governmental funds vacation and sick leave are recorded as expenditures in the year paid. Accordingly,
the entire unpaid liability for the governmental funds is recorded as a long-term obligation in the
government-wide financial statements only.
Unpaid compensated absences in proprietary funds are recorded as a liability in those funds as the vested
benefits accrue to the employees.
40
City of Cerritos
H. Claims and Judgments
When it is probable that a claim or judgment liability has been incurred at year end, and the amount of the
loss can be reasonably estimated, the City records the estimated loss, net of any insurance coverage. The
City is a member of the California Joint Powers Insurance Authority (CJPIA). The City believes that its
deposits with the CJPIA are adequate to cover all claims, including claims incurred but not reported.
I.
Property Taxes
Under California law, property taxes are assessed and collected by the counties up to 1% of assessed value,
plus other increases approved by the voters. The property taxes go into a pool, with the County, and are
then allocated to the cities based on complex formulas. The following are annual dates pertaining to
property taxes:
Lien Date
Levy Date
Due Dates
Delinquency Dates
J.
January 1
June 30
November 1 and February 1
December 10 and April 10
Fund Balances and Net Assets
In the governmental fund financial statements, fund balances are classified as follows:
Nonspendable Fund Balance – This amount indicates the portion of funds balances which cannot be spent
because they are either not in spendable form, such as prepaid items, inventories or loans receivable, or
legally or contractually required to be maintained intact, such as the principal portion of an endowment.
Restricted Fund Balance – This amount indicates the portion of fund balances which has been restricted a)
externally imposed by creditors (such as through debt covenants), grantors, contributors, or laws or
regulations of other governments; or b) imposed by law through constitutional provisions or enabling
legislation.
Committed Fund Balance – This amount indicates the portion of fund balances which can only be used for
specific purposes pursuant to formal resolution or ordinance of the City Council.
Assigned Fund Balance – This amount indicates the portion of fund balances which is constrained by the
City’s intent to be used for specific purpose, but is neither restricted nor committed. The City Manager
is authorized to determine and define the amount of assigned fund balances.
Unassigned Fund Balance – Unassigned fund balance represents fund balance that has not been assigned
to other funds and that has not been restricted, committed or designated as nonspendable.
When expenses are incurred for purposes for which both restricted and unrestricted fund balances are
available, the City’s policy is to apply restricted fund balances first, then unrestricted fund balances as they
are needed.
41
City of Cerritos
J.
Fund Balances and Net Assets, Continued
When expenditures are incurred for purposes where only unrestricted fund balances are available, the City
uses the unrestricted resources in the following order: committed, assigned, and unassigned.
In the governmental-wide financial statements and proprietary fund financial statements, net assets are
classified as follows:
Invested in Capital Assets, Net of Related Debt – This amount consists of capital assets net of accumulated
depreciation and reduced by outstanding debt that attributed to the acquisition, construction, or
improvement of the assets.
Restricted Net Assets – This amount is restricted by external creditors, grantors, contributors, or laws or
regulations of other governments.
Unrestricted Net Assets – This amount is all net assets that do not meet the definition of “invested in
capital assets, net of related debt” or “restricted net assets.”
When expenses are incurred for purposes for which both restricted and unrestricted net assets are available,
the City’s policy is to apply restricted net assets first, then unrestricted net assets as they are needed.
K. Estimates
The preparation of the basic financial statements in conformity with accounting principles generally
accepted in the United States of America requires management to make estimates and assumptions that
affect certain reported amounts and disclosures. Accordingly, actual results could differ from those
estimates.
2. CASH AND INVESTMENTS
The City maintains a cash and investment pool, which includes cash balances and authorized investments
of all funds. The City has the following cash and investments at June 30:
Government-Wide
Governmental
Business-Type
Activities
Activities
$
128,203,122
$
Total
5,106,150
$
133,309,272
Restricted Cash and Investments:
Cash
10,226,660
-
10,226,660
Investments with fiscal agent
16,598,679
-
16,598,679
Total cash and investments
$
42
155,028,461
$
5,106,150
$
160,134,611
City of Cerritos
2. CASH AND INVESTMENTS, Continued
The City’s Cash and Investments at June 30 in more detail:
Cash and cash equivalents:
Petty cash
Demand deposits
$
Total cash and cash equivalents
11,285
22,794,402
22,805,687
Investments:
Local Agency Investment Fund
U.S. Government Sponsored Enterprise Securities
Corporate Obligations
Certificates of Deposits
Investment Contracts
Money Market Mutual Funds
58,321,311
70,897,160
3,196,380
200,000
3,206,533
1,507,540
Total investments
137,328,924
Total cash and investments
$
160,134,611
A. Deposits
The carrying amounts of the City’s demand deposits were $22,794,402 at June 30, 2011. Bank balances were
$24,367,761 at that date, the total amount of which was collateralized or insured with securities held by the
pledging financial institutions in the City’s name as discussed below.
The California Government Code requires California banks and savings and loan associations to secure the
City’s cash deposits by pledging securities as collateral. This Code states that collateral pledged in this
manner shall have the effect of perfecting a security interest in such collateral superior to those of a general
creditor. Thus, collateral for cash deposits is considered to be held in the City's name.
The market value of pledged securities must equal at least 110% of the City's cash deposits. California law
also allows institutions to secure city deposits by pledging first trust deed mortgage notes having a value of
150% of the City’s total cash deposits. The City may waive collateral requirements for cash deposits;
however, the City has not waived the collateralization requirements. Beginning December 31, 2010 through
July 20, 2011, noninterest-bearing transaction accounts have unlimited coverage by Federal Depository
Insurance Corporation (“FDIC”). As a result, the City’s cash deposits at June 30, 2011 were fully insured by
FDIC.
43
City of Cerritos
B. Investments
The table below identifies the investment types that are authorized for the City by the California
Government Code (or the City’s investment policy, where more restrictive). The table also identifies certain
provisions of the California Government Code (or the City’s investment policy, where more restrictive) that
address interest rate risk, credit risk, and concentration of credit risk. This table does not address
investments of debt proceeds held by bond trustees that are governed by the provisions of debt agreements
of the City, rather than the general provisions of the California Government Code or the City’s investment
policy.
Maximum
Maturity
Authorized Investment Type
United States Treasury Obligations
U.S. Government Sponsored
Enterprise Securities
Banker's Acceptances
Commercial Paper
Negotiable Certificates of Deposit
Repurchase Agreements
Money Market Mutual Funds
Local Agency Investment Fund (LAIF)
Maximum
Percentage
of Portfolio *
Maximum
Investment
in One Issuer
5 years
No Limit
No Limit
5 years
180 days
270 days
5 years
1 year
N/A
N/A
No Limit
40%
40%
30%
No Limit
20%
No Limit
No Limit
10%
10%
10%
No Limit
No Limit
50,000,000
$
N/A - Not Applicable
* Excluding amounts held by bond trustees that are not subject to California Government Code restrictions.
C. Investments Authorized by Debt Agreements
Investment of debt proceeds held by a bond trustee are governed by provisions of the debt agreements,
rather than the general provisions of the California Government Code or the City’s investment policy.
Investments authorized for funds held by the bond trustee include U.S. Treasury Obligations, U.S.
Government Sponsored Enterprise Securities, Money Market Mutual Funds and Investment Contracts.
There are no limitations on the maximum amount that can be invested in one issuer, maximum percentage
allowed or the maximum maturity of an investment.
44
City of Cerritos
D. Risk Disclosures
Interest Rate Risk – The City’s investment policy manages exposure to interest rate risk by purchasing a
combination of shorter term and longer term investments and by timing cash flows from maturities so that
a portion of the portfolio is maturing or coming close to maturity evenly over time as necessary to provide
the cash flow and liquidity needed for operations. The policy limits investment maturities as a means of
managing its exposure to fair value losses arising from fluctuating interest rates. Information about the
sensitivity of the fair values of the City’s investments (including investments held by bond trustees) to
market interest rate fluctuations is provided by the following table that shows the distribution of the City’s
investments at maturity:
Remaining Maturity ( in Months)
12 Months
13 - 24
25 - 60
Investment Type
Local Agency Investment Fund (LAIF)
or Less
$
Months
58,321,311
Federal Home Loan bank (FHLB)
-
$
Months
-
$
Total
-
$
58,321,311
-
15,076,310
15,076,310
12,913,610
Federal National Mortgage Association (FNMA)
-
-
12,913,610
Federal Home Loan Mortgage Corporation (FHLMC)
-
-
5,977,312
5,977,312
Federal Farm Credit Bank (FFCB)
-
-
36,928,847
36,928,847
Government Nat'l Mortgage Association (GNMA)
-
-
1,081
1,081
Long Term Corporate Note (LTN)
-
25,000
-
25,000
Medium Term Corporate Note (MTN)
-
3,171,380
-
3,171,380
200,000
-
-
200,000
-
-
3,206,533
3,206,533
1,507,540
-
-
1,507,540
Money Market (MMkt) Mutual Funds
Total
$
60,028,851
45
$
3,196,380
$
74,103,693
$
137,328,924
City of Cerritos
D. Risk Disclosures, Continued
Credit Risk – Generally, credit risk is the risk that an issuer of an investment will not fulfill its obligation to
the holder of the investment. This is measured by the assignment of a rating by a nationally recognized
statistical rating organization. Presented below is the minimum rating required by (where applicable) the
California Government Code, the City’s investment policy, or debt agreements, and the actual rating at time
of purchase for each investment type:
Investment Type
LAIF
$
Total
Minimum
as of
June 30, 2011
Legal
Rating
58,321,311
N/A
Not
AAA
$
Other
-
$
Required
to be Rated
Unrated
-
$
-
$
58,321,311
FHLB
15,076,310
N/A
15,076,310
-
-
-
FNMA
FHLMC
12,913,610
5,977,312
N/A
N/A
12,913,610
5,977,312
-
-
-
FFCB
36,928,847
N/A
36,928,847
-
-
-
1,081
N/A
1,081
-
-
-
25,000
GNMA
N/A
-
-
25,000
-
MTN
LTN
3,171,380
200,000
A
A-1/P-1
-
3,171,380
-
200,000
-
3,206,533
N/A
3,206,533
-
-
-
MMkt Mutual Funds
1,507,540
N/A
-
-
1,507,540
-
Total
$
137,328,924
$
74,103,693
$
3,171,380
$
1,732,540
$
58,321,311
N/A - Not Applicable
The actual ratings at time of purchase for the Medium Term Corporate Notes (MTN) are as follows:
Other:
A+
$
A
2,111,380
1,060,000
Total Other
$
3,171,380
Custodial Credit Risk – For deposits, custodial credit risk is the risk that, in the event of the failure of a
deposit financial institution, a government will not be able to recover its deposits or will not be able to
recover collateral securities that are in the possession of an outside party. For an investment, custodial
credit risk is the risk that, in the event of the failure of the counterparty, the City will not be able to recover
the value of its investments or collateral securities that are in the possession of an outside party. The City’s
investment policy does not contain legal or policy requirements that would limit the exposure to custodial
credit risk for deposits or investments, other than the provision for deposits stated in Note 2A. At June 30,
2011, City’s deposits with financial institutions are fully insured by FDIC.
46
City of Cerritos
E. Investments in State Investment Pool
The City is a participant in LAIF which is regulated by California Government Code Section 16429 under
the oversight of the Treasurer of the State of California. The City’s investments with LAIF at June 30, 2011,
included a portion of pool funds invested in Structured Notes and Asset-Backed Securities:
Structured Notes: debt securities (other than asset-backed securities) whose cash flow characteristics
(coupon rate, redemption amount, or stated maturity) depend upon one or more indices and/or that have
embedded forwards or options.
Asset-Backed Securities: generally mortgage-backed securities that entitle their purchasers to receive a share
of the cash flows from a pool of assets such as principal and interest repayments from a pool of mortgages
(for example, Collateralized Mortgage Obligations) or credit card receivables.
As of June 30, 2011, the City had $58,321,311 invested in LAIF, which had invested 5.01% of the pool
investment funds in Structured Notes and Asset-Backed securities as compared to 5.42% in the previous
year.
3. PREPAID EXPENSES
The City had prepaid expenses in the amount of $62,864 for governmental activities at June 30, 2011.
During the year ended June 30, 2011, the City determined that the prepaid expenses representing payments
for the City’s share of fuel reserves, capital reserves and debt service reserves relating to the operations of
the Magnolia Power Plant in the amount of $2,143,267 were impaired. This impairment was determined
based on the fact that the City made the required payments for its share of fuel, capital and debt service, but
had no control over when the monies were actually expended. As a result, the Electric Utility Fund
recognized an impairment loss in the amount of $2,143,267 for the year ended June 30, 2011.
4. NOTES RECEIVABLE
Notes receivable in the Redevelopment Agency Capital Project Fund consisted of the following at June 30,
2011:
Balance
July 1, 2010
Residential Assistance Program
$
Residental Loan Program
2,040,000
$
355,506
Subtotal
2,395,506
Less: Allowance for uncollectible
Total
Additions
-
$
$
Balance
June 30, 2011
Deletions
-
$
-
$
313,689
(41,817)
2,353,689
(2,395,506)
$
-
2,040,000
(41,817)
(2,353,689)
$
-
The Redevelopment Agency Capital Project Fund provides funding for residential assistance and
residential loan programs.
47
City of Cerritos
5. INTERFUND TRANSACTIONS
A. Governmental-Wide Financial Statements
At June 30, 2011, the City had the following internal receivable and payable:
Internal Receivable
Governmental
Activities
Internal Payable
$
12,078,953
B. Fund Financial Statements
Due To and Due From Other Funds - At June 30, 2011, the City had the following due to/from other funds:
Due from Other Funds
Governmental Funds
Enterprise Fund
Redevelopment Redevelopment
Due to Other Funds
General
Agency Debt
Agency Capital
Electric
Service Fund
Projects Fund
Utility
$
$
Total
Governmental Funds:
General Fund
$
Redevelopment Agency Debt Service Fund
Redevelopment Agency Capital Projects Fund
Nonmajor Governmental Funds
Enterprise Funds:
Nonmajor Enterprise Funds
Total
$
-
16,066,000
25,549
$
-
$
16,091,549
1,857,823
-
444,491
-
2,302,314
1,302,201
15,357
-
-
30,178
-
1,332,379
15,357
78,059
-
-
-
78,059
3,253,440
$
16,066,000
$
470,040
$
30,178
$
19,819,658
The interfund amounts due to the General Fund from the Redevelopment Agency Funds, Nonmajor
Governmental Funds, and Nonmajor Enterprise Funds are for administrative expenditures paid by the
General Fund on behalf of the other funds. All amounts were repaid to the General Fund by August 31,
2011.
The interfund amount due to Redevelopment Agency Funds from General Fund in amount of $16,091,549 is
for interfund loans not yet received by the Redevelopment Agency Funds but approved by the Council on
June 23, 2011.
The interfund amount between the Redevelopment Agency Capital Project Fund and Redevelopment
Agency Debt Service Fund in amount of $444,491 is for the 20% set-aside for low and moderate income
housing and the interest accrued at June 30, 2011.
48
City of Cerritos
5. INTERFUND TRANSACTIONS, Continued
B. Fund Financial Statements, Continued
Advances To/From Other Funds - At June 30, 2011, the City had the following advances to/from other
funds:
Advances to Other Funds
Governmental Funds
General
Fund
Advances from Other Funds
Redevelopment
Agency
Capital Projects
Fund
Total
Governmental Fund:
Redevelopment Agency Debt Service Fund
Enterprise Fund:
$
Electric Utility Enterprise Fund
Total
78,026,000
$
12,031,072
$
90,057,072
$
11,881,487
$
89,907,487
-
12,031,072
11,881,487
$ 101,938,559
Advances from the General Fund to the Redevelopment Agency were provided to fund capital
improvement projects in both the Los Cerritos and Los Coyotes projects areas. Interest on the outstanding
balance on advances payable of $78,026,000 is charged at an annual rate of 8% to the Agency. The Agency
remits the interest payment to the City on a quarterly basis. All payments to the City for the interest on
advances payable were paid by August 31, 2011.
Advances made to the Electric Utility Enterprise Fund in the amount of $12,031,072 from the General Fund
were used for initial working capital. Interest on the outstanding balance on advances payable is charged at
an annual rate of 12% to the Electric Utility Enterprise Fund. As of June 30, 2011, interest in the amount of
$982,170 was incurred and added to the outstanding loan balance.
Advances from the Low and Moderate Income Housing Capital Project Fund to the Los Cerritos and Los
Coyotes Redevelopment Agency Debt Service Funds were used to make the payment for the Agency’s
share of the Supplemental Educational Revenue Augmentation Fund (the “SERAF”) due to the State of
California. No interest is charged on the outstanding balance on advances payable of $11,881,487. The Debt
Service Funds remit the principal payments to the Low and Moderate Income Housing Fund on a quarterly
basis.
49
City of Cerritos
5. INTERFUND TRANSACTIONS, Continued
B. Fund Financial Statements, Continued
Transfers - At June 30, 2011, the City had the following transfers in/out:
Transfers In
Enterprise Fund
Governmental Funds
Transfers Out
General
Nonmajor
Governmental
Water
Fund
Funds
Enterprise
Total
Governmental Funds:
General Fund
$
-
Nonmajor Governmental Funds
Enterprise Funds:
Total
$
$
1,275,505
$
957,909
$
2,233,414
-
731,959
-
731,959
1,200,000
-
-
1,200,000
1,200,000
$
2,007,464
$
957,909
$
4,165,373
During the year, the General Fund transferred $1,275,505 to the Nonmajor Governmental Funds related to
certain capital projects costs and administrative costs within the funds.
Transfer in the amount of $1,200,000 was transferred from the Nonmajor Enterprise Funds to the General
Fund for the maintenance and reconstruction of the sewer systems. In addition, the transfer of $731,959
between the Nonmajor Governmental Funds relates to the funding of transportation related costs between
the Proposition “A” and Proposition “C” funds.
Transfer from the General Fund to Water Enterprise Fund in amount of $957,909 is to reimburse for legal
costs.
50
City of Cerritos
6. CAPITAL ASSETS
The following is a summary of capital assets for the governmental activities:
Balance
July 1, 2010
Balance
As Restated
Additions
Deletions
June 30, 2011
Capital assets, not being depreciated:
Land
$
Parking structure rights
83,963,207
$
1,792,610
$
-
$
85,755,817
3,760,000
-
-
3,760,000
49,184,582
-
-
49,184,582
Public art
4,428,314
-
-
4,428,314
Trees
1,370,017
10,800
238,516
-
142,944,636
1,803,410
Right-of-way
Construction in progress
Total capital assets, not being depreciated
(11,916)
(11,916)
1,368,901
238,516
144,736,130
Capital assets, being depreciated:
Buildings
190,085,558
28,470
5,056,878
640,556
(40,500)
5,656,934
22,779,159
508,587
(126,105)
23,161,641
Infrastructure
32,459,758
736,150
(5,302)
33,190,606
250,381,353
1,913,763
(171,907)
252,123,209
(64,097,843)
(4,842,106)
-
(68,939,949)
(766,340)
(170,491)
10,779
(926,052)
(19,658,876)
(719,815)
126,106
(20,252,585)
Infrastructure
(16,623,761)
(908,341)
4,576
(17,527,526)
(101,146,820)
(6,640,753)
141,461
(107,646,112)
Total capital assets, being depreciated, net
149,234,533
(4,726,990)
(30,446)
144,477,097
Governmental activities capital assets, net
$ 292,179,169
(42,362)
$ 289,213,227
Total Capital Assets, Being Depreciated
-
190,114,028
Less accumulated depreciation for:
Buildings
Total accumulated depreciation
$
(2,923,580)
$
Depreciation expense was charged to functions/programs of governmental activities for the fiscal year
ended June 30, 2011 as follows:
Legislative and Administrative
$
Public Works
Water and Power
553,735
77,517
155,819
49,225
1,474,275
1,764,921
1,656,920
908,341
Total depreciation expense
51
$
6,640,753
City of Cerritos
6. CAPITAL ASSETS, Continued
The following is a summary of capital assets for the business-type activities:
Balance
July 1, 2010
As Restated
Additions
Balance
June 30, 2011
Deletions
Capital assets, being depreciated:
6,262,697
40,857,274
127,839
(33,721)
6,262,697
40,951,392
Equipment
4,143,993
2,259,378
14,105,000
319,936
-
-
4,463,929
2,259,378
14,105,000
Sewer mains
11,760,205
-
-
11,760,205
79,388,547
447,775
(33,721)
79,802,601
(3,060,272)
(18,560,963)
(2,798,141)
(124,334)
(762,296)
(180,128)
13,010
-
(3,184,606)
(19,310,249)
(2,978,269)
(451,875)
(2,350,833)
(5,880,532)
(56,484)
(470,167)
(156,766)
-
(508,359)
(2,821,000)
(6,037,298)
Total accumulated depreciation
(33,102,616)
(1,750,175)
13,010
(34,839,781)
Total capital assets, being depreciated, net
46,285,931
(1,302,400)
(20,711)
44,962,820
Total Capital Assets, Being Depreciated
Less accumulated depreciation for:
Equipment
Sewer mains
Business-type activities capital assets, net
$
46,285,931
$
(1,302,400)
$
(20,711)
$
44,962,820
Depreciation expense for business-type activities for the fiscal year ended June 30, 2011 was charged as
follows:
Water and Power
Electric Utility
Reclaimed Water
Sewer
Total depreciation expense
$
813,558
470,167
309,684
156,766
$
1,750,175
Electric Utility Rights - Southern California Public Power Authority (“SCPPA”)
The City’s Electric Utility is a member of the SCPPA, a joint powers authority. The City entered into the
Magnolia Power Project, which is financed and owned by SCPPA. Member cities of the Magnolia Power
Project include Anaheim, Burbank, Colton, Glendale, and Pasadena (the Project “A” Participants) and the
City of Cerritos (the Project “B” Participant).
52
City of Cerritos
6. CAPITAL ASSETS, Continued
The Magnolia Power Project consists of a natural gas-fired generating facility with a nominally rated net
base capacity of 242 Megawatts to be located on an existing generating site in the City of Burbank,
California, including necessary and appurtenant facilities and equipment thereto, the applicable portion of
any common facilities and interconnection facilities. The Project was being constructed for the primary
purpose of providing the participants in the Project with firm capacity and energy to help meet their power
and energy requirements in 2005 and thereafter. Commercial operations commenced September, 2005. The
City of Cerritos has entered into a “Take or Pay” contract with SCPPA and is obligated to pay their share of
the indebtedness regardless of the ability of the contracting agency to provide electricity. The City’s share of
these payments are reported as long-term debt (see Notes 9D and 9J). This contract provides for generating
capacity of 4.2% of the output generated from the plant.
7. DEFERRED/UNEARNED REVENUE
At June 30, 2011, deferred/unearned revenue totaled $5,765,235 consisting of the following:
Unearned Revenue:
Facility booking rentals
$
Advance Performing Arts Center ticket sales
59,464
2,258,573
Performing Arts Center refund clearing
4,690
Rental income
950,975
Total Unearned Revenue
3,273,702
Deferred Revenue:
Sales tax
1,261,600
Workers' compensation claims receivable
864,454
Operating Grant - Public Works
11,320
Capital Grant - community and Safety Services
354,159
Total Deferred Revenue
2,491,533
Total
$
53
5,765,235
City of Cerritos
8. LONG-TERM DEBT
Following is a summary of long-term debt for governmental activities for the fiscal year ended June 30,
2011:
Balance
July 1, 2010,
as Restated
Additions
Deletions
Balance
June 30, 2011
Due within
One Year
Due in more
than One Year
$
$
$
Los Cerritos Redevelopment
Project Revenue Bonds:
1993 Issue, Series B,
$17,525,000
2002, Issue, Series A,
$31,550,000
$7,550,000
2003 Issue, Series 2003,
$3,526,250
$
2,175,000
$
-
$ (1,745,000)
430,000
430,000
-
29,125,000
-
(485,000)
28,640,000
1,955,000
26,685,000
5,195,000
-
(385,000)
4,810,000
400,000
4,410,000
3,268,125
-
(61,875)
3,206,250
63,750
3,142,500
8,000,000
-
8,000,000
-
8,000,000
39,050,000
-
(3,055,000)
35,995,000
3,295,000
32,700,000
1,660,000
-
(290,000)
1,370,000
310,000
1,060,000
57,955,000
-
(1,290,000)
56,665,000
1,325,000
55,340,000
10,920,000
-
(215,000)
10,705,000
235,000
10,470,000
9,804,375
-
(185,625)
9,618,750
191,250
9,427,500
167,152,500
-
(7,712,500)
159,440,000
8,205,000
151,235,000
4,293,775
-
(306,699)
3,987,076
-
3,987,076
(862,885)
(1,843,196)
-
61,635
141,785
(801,250)
(1,701,411)
-
(801,250)
(1,701,411)
168,740,194
-
(7,815,779)
160,924,415
8,205,000
152,719,415
Note payable
1,025,000
2,512,435
1,652,981
(1,689,408)
1,025,000
2,476,008
200,000
1,495,784
825,000
980,224
Claims payable - General Liability
1,917,561
-
(246,764)
1,670,797
-
1,670,797
1,652,981
$ (9,751,951)
$ 166,096,220
9,900,784
$ 156,195,436
Los Coyotes Redevelopment
Project Revenue Bonds:
1993 Issue, Series A,
$42,155,000
$63,765,000
$3,760,000
$64,710,000
$12,225,000
2003 Issue, Series 2003,
$10,578,750
Subtotal
Add (less) deferred amounts:
Bond premium
Bond discount
Deferred charge on refunding
Total Revenue Bonds
Total long-term liabilities
$ 174,195,190
$
54
-
$
City of Cerritos
8. LONG-TERM DEBT, Continued
Following is a summary of long-term debt for business-type activities for the fiscal year ended June 30,
2011:
Balance
July 1, 2010,
Compensated absences - Water Fund
Total long-term liabilities
Additions
257,937
$
257,937
Deletions
12,863
$
12,863
Balance
Due within
Due in more
June 30, 2011
One Year
than One Year
$
-
270,800
$
270,800
67,700
$
67,700
203,100
$
203,100
A. Los Cerritos Redevelopment Project 1993 Revenue Bonds, Series B
In June, 1993, the Cerritos Public Financing Authority (the Authority) issued $17,525,000 in 1993 Revenue
Bonds, Series B. $15,967,767 of the $17,525,000 issue was loaned to repay prior City loans to the Agency,
$1,323,852 was used to fund a reserve fund for the loans to the Agency, and the remaining balance was used
to pay the cost of issuance of the bonds. Interest rates on the bonds vary from 4.00% to 8.00% with interest
payable semiannually on May 1 and November 1, and principal maturing annually on November 1.
The 1993 Los Cerritos Redevelopment Project Revenue Bonds, Series B, are payable solely from and secured
by tax increment revenues received by the Authority from the Agency. Annual principal and interest
payments on the bonds are expected to require less than 25% of net revenues. The total remaining principal
and interest to be paid on the bonds is $447,200. Principal and interest paid for the current year and total net
revenues were $1,849,200 and $7,814,380, respectively.
The annual requirements to amortize the outstanding bond indebtedness as of June 30, 2011, including
interest, are as follows:
Year Ending
June 30,
Principal
Interest
Total
2012
$
430,000
$
17,200
$
447,200
TOTAL
$
430,000
$
17,200
$
447,200
B. Los Cerritos Redevelopment Project 2002 Tax Allocation Revenue Bonds, Series A
In June 1993, the Authority issued $27,555,000 in Revenue Bonds, Series A. In September 2002, the
Authority issued $31,550,000 of Tax Allocation Bonds to provide funds to refund the 1993 Revenue Bonds,
Series A. A portion of the proceeds from the Bonds issued in 2002 were placed in an escrow fund to provide
the debt service on the 1993 Revenue Bonds, Series A. The advance refunding met the requirements of an
in-substance defeasance and the bonds were removed from the Agency’s long-term debt.
The 2002 bonds are broken into two segments; the Term Bonds $27,940,000 and the Special Escrow Bonds
$3,610,000.
55
City of Cerritos
B. Los Cerritos Redevelopment Project 2002 Tax Allocation Revenue Bonds, Series A, Continued
The Term Bonds are payable in annual installments ranging from $260,000 to $3,240,000 until maturity on
November 1, 2020. Interest is payable semiannually on May 1 and November 1, with rates ranging from
2.00% to 5.00%. Bonds outstanding at June 30, 2011 were $25,995,000.
The Special Escrow bonds are payable in annual installments ranging from $195,000 to $320,000 until
maturity on November 1, 2020. Interest is payable semiannually on May 1 and November 1, with rates
ranging from 3.40% to 4.55%. Bonds outstanding at June 30, 2011 were $2,645,000.
The 2002 Los Cerritos Redevelopment Project Tax Allocation Revenue Bonds, Series A, are payable solely
from and secured by tax increment revenues received by the Authority from the Agency. Annual principal
and interest payments on the bonds are expected to require less than 25% of net revenues. The total
remaining principal and interest to be paid on the bonds is $36,181,843. Principal and interest paid for the
current year and total tax revenues were $1,803,475 and $7,814,380, respectively.
Future debt service requirements on these bonds (term and special escrow) are as follows:
Year Ending
June 30,
2012
2013
2014
Principal
$
2015
2016
2017-2021
TOTAL
Interest
1,955,000
2,480,000
2,570,000
$
2,660,000
2,795,000
16,180,000
$
28,640,000
1,279,113
1,204,090
1,113,875
Total
$
1,002,318
867,710
2,074,737
$
7,541,843
3,234,113
3,684,090
3,683,875
3,662,318
3,662,710
18,254,737
$
36,181,843
C. Los Cerritos Redevelopment Project 2002 Tax Allocation Revenue Bonds, Series B
In September 2002, the Authority issued $7,550,000 in 2002 Series B Tax Allocation Revenue Bonds. The
proceeds were loaned to the Agency and were used to fund projects in the Los Cerritos Project Area and
pay for the cost of issuance.
The bonds are payable in annual installments ranging from $360,000 to $580,000 until maturity on
The 2002 Los Cerritos Redevelopment Project Tax Allocation Revenue Bonds, Series B, are payable solely
current year and total tax revenues were $605,271 and $7,814,380, respectively.
56
City of Cerritos
C. Los Cerritos Redevelopment Project 2002 Tax Allocation Revenue Bonds, Series B, Continued
Future debt service requirements on these bonds are as follows:
Year Ending
June 30,
2012
2013
2014
Principal
$
2015
2016
2017-2021
TOTAL
400,000
415,000
430,000
Interest
$
445,000
465,000
2,655,000
$
4,810,000
206,430
191,449
175,068
Total
$
157,345
138,341
343,720
$
1,212,353
606,430
606,449
605,068
602,345
603,341
2,998,720
$
6,022,353
D. Los Cerritos and Los Coyotes Redevelopment Project - Magnolia Power Project B, Series 2003 Revenue
Bonds
The Southern California Public Power Authority (“SCPPA”) was created in 1980 under a joint exercise of
powers agreement. It was formed for the acquisition and construction of facilities to supply electric energy
within the boundaries of its members. Complete financial statements for SCPPA may be obtained at their
administrative office located at 225 S. Lake Avenue, Suite 1250, Pasadena, CA 91101.
In 2001, SCPPA entered into an agreement with the City of Anaheim, the City of Burbank, the City of
Cerritos, the City of Colton, the City of Glendale, and the City of Pasadena to construct a generation facility
with a capacity of 242 megawatts to be located on the existing Magnolia generating site in Burbank,
California.
SCPPA issued $14,105,000 of lease revenue bonds to finance a portion of the project costs for the facility that
was collateralized by the parking structure at City Hall. The City has leased back the parking structure from
SCPPA. SCPPA will provide for the payment of a portion of the costs of operation of the Project through the
sale of a portion of the capacity and energy of the Project of the member cities pursuant to the Power Sales
Agreement. On March 1, 2003, the City entered into this sales agreement with SCPPA, entitling the City to a
4.2% share of the plant output.
In June 2005, the Redevelopment Agency Debt Service Fund assumed the City’s debt related to the sales
agreement with SCPPA. As the energy derived from the plant serves and benefits both the Los Cerritos and
Los Coyotes Capital Project Areas, it was deemed appropriate that the Agency assume the debt. Debt
assumed was allocated 25%, which is $3,526,250, to the Los Cerritos Project Area and 75%, which is
$10,578,750, to the Los Coyotes Project Area. The City advances debt service payments to SCPPA and is
subsequently reimbursed by the Redevelopment Agency immediately after the payment due dates.
The payments are due in annual installments on January 1 and July 1 of each year. The first payment was
made January 2006, and the final payment is due at maturity on July 1, 2036.
57
City of Cerritos
D. Los Cerritos and Los Coyotes Redevelopment Project - Magnolia Power Project B, Series 2003 Revenue
Bonds, Continued
The debt service schedule for the Los Coyotes Project Area is at Note 8J.
The Los Cerritos Project Area portion is payable solely from and secured by tax increment revenues
received by the Authority from the Agency. Annual principal and interest payments on the bonds are
expected to require less than 10% of net revenues. The total remaining principal and interest to be paid on
the bonds is $5,846,405. Principal and interest paid for the current year and total tax revenues were $215,101
and $7,814,380, respectively.
Future debt service requirements on the bonds allocated to the Los Cerritos Project Area are as follows:
Year Ending
June 30,
2012
2013
2014
2015
2016
Principal
$
2017-2021
2022-2026
2027-2031
2032-2036
2037
TOTAL
63,750
65,625
67,500
70,000
73,125
Interest
$
411,875
510,625
649,375
1,014,375
280,000
$
3,206,250
151,291
149,138
146,800
144,310
141,631
Total
$
661,357
562,596
424,220
244,813
13,999
$
2,640,155
215,041
214,763
214,300
214,310
214,756
1,073,232
1,073,221
1,073,595
1,259,188
293,999
$
5,846,405
E. Los Coyotes Redevelopment Project 1993 Revenue Bonds, Series A
In June 1993, the Authority issued $42,155,000 in 1993 Revenue Bonds, Series A. $2,594,959 of the
$42,155,000 issue was loaned to the Agency to advance refund the $7,500,000 Los Coyotes Redevelopment
Project Tax Allocation Bonds, Series A originally issued by the Agency in 1976, $6,780,483 was loaned to the
Agency to advance refund the $15,000,000 Los Coyotes Redevelopment Project Tax Allocation Bonds, Series
B originally issued by the Agency in 1977, $19,669,546 was loaned to repay prior City loans to the Agency,
$9,000,000 was loaned to fund additional projects in the Los Coyotes Project Area, $3,206,533 was used to
fund a reserve fund for the loans to the Agency, and the remaining balance was used to pay the cost of
issuance of the bonds. Interest rates on the bonds vary from 2.50% to 6.50% with interest payable
semiannually on May 1 and November 1, and principal maturing annually on November 1 except for the
years 2002 through 2018 in which no principal payments mature.
58
City of Cerritos
E. Los Coyotes Redevelopment Project 1993 Revenue Bonds, Series A, Continued
In September 2002, the Authority issued 2002 Tax Allocation Bonds, Series A to provide funds to partially
refund the 1993 Revenue Bonds ($24,510,000), Series A. A portion of the proceeds from the Bonds issued in
2002 were placed in an escrow fund to provide the debt service on the 1993 Revenue Bonds, Series A. The
advance refunding met the requirements of an in-substance defeasance and the bonds were removed from
the Agency’s long-term debt. The principal balance on the 1993 Revenue Bonds, Series A at June 30, 2003
paid by the trustee from the escrow fund was $24,510,000, and the balance remaining in the Agency’s longterm debt is $8,000,000, which is payable in fiscal year ended June 30, 2024.
The 1993 Los Coyotes Redevelopment Project Revenue Bonds, Series A, are payable solely from and
secured by tax increment revenues received by the Authority from the Agency. Annual principal and
interest payments on the bonds are expected to require less than 10% of net revenues. The total remaining
principal and interest to be paid on the bonds is $14,469,775. Interest paid for the current year and total tax
revenues were $520,000 and $18,062,614, respectively.
Year Ending
June 30,
2012
Principal
$
Interest
-
$
520,000
Total
$
520,000
2013
-
520,000
520,000
2014
-
520,000
520,000
2015
2016
-
520,000
520,000
520,000
520,000
2017-2021
-
2,600,000
2,600,000
2022-2024
8,000,000
1,269,775
9,269,775
TOTAL
$
8,000,000
$
6,469,775
$
14,469,775
F. Los Coyotes Redevelopment Project 1993 Revenue Bonds, Series B
In June 1993, the Authority issued $63,765,000 in 1993 Revenue Bonds, Series B. $57,938,653 of the
$63,765,000 issue was loaned to repay prior City loans to the Agency, $4,850,304 was used to fund a reserve
fund for the loans to the Agency, and the remaining balance was used to pay the cost of issuance of the
bonds. Interest rates on the bonds vary from 3.50% to 7.80% with interest payable semiannually on May 1
and November 1, and principal maturing annually on November 1.
The 1993 Los Coyotes Redevelopment Project Revenue Bonds, Series B, are payable solely from and secured
by tax increment revenues received by the Authority from the Agency. Annual principal and interest
payments on the bonds are expected to require less than 35% of net revenues. The total remaining principal
and interest to be paid on the bonds is $48,669,968. Principal and interest paid for the current year and total
tax revenues were $5,975,653 and $18,062,614, respectively.
59
City of Cerritos
F. Los Coyotes Redevelopment Project 1993 Revenue Bonds, Series B, Continued
Year Ending
June 30,
2012
2013
2014
Principal
$
2015
2016
2017-2020
TOTAL
3,295,000
3,550,000
3,825,000
Interest
$
4,120,000
4,440,000
16,765,000
$
35,995,000
2,674,594
2,404,350
2,123,569
Total
$
1,814,670
1,460,830
2,196,955
$
12,674,968
5,969,594
5,954,350
5,948,569
5,934,670
5,900,830
18,961,955
$
48,669,968
G. Los Coyotes Redevelopment Project 1998 Tax Allocation Bonds, Series A
In January 2001, the Los Coyotes Redevelopment Project issued $3,760,000 in 1998 Tax Allocation Bonds,
Series A. The proceeds were used in the construction of a shared parking structure, which serves both the
retail complex and tenants within an adjacent office building. The City will retain parking rights to the
structure. The interest rate on the bonds is 6.5% with principal and interest payable annually on May 1.
The 1998 Los Coyotes Redevelopment Project Tax Allocation Revenue Bonds, Series A, are payable solely
The annual requirements to amortize the outstanding bond indebtedness as of June 30, 2011, including
interest, are as follows:
Year Ending
June 30,
2012
2013
Principal
$
2014
2015
TOTAL
310,000
330,000
Interest
$
355,000
375,000
$
1,370,000
60
89,050
68,900
Total
$
47,450
24,375
$
229,775
399,050
398,900
402,450
399,375
$
1,599,775
City of Cerritos
H. Los Coyotes Redevelopment Project 2002 Tax Allocation Revenue Bonds, Series A
In June 1993, the Authority issued $42,155,000 in Revenue Bonds, Series A. In September 2002, the
Authority issued $64,710,000 of Tax Allocation Bonds to provide funds to refund $24,510,000 of the
remaining $32,510,000 the 1993 Revenue Bonds, Series A. A portion of the proceeds from the Bonds issued
in 2002 were placed in an escrow fund to provide the debt service on the 1993 Revenue Bonds, Series A. The
advance refunding met the requirements of an in-substance defeasance and the bonds were removed from
the Agency’s long-term debt. The principal balance on the 1993 Revenue Bonds, Series A, at June 30, 2003
that was paid by the trustee from the escrow fund was $24,510,000. The balance remaining in the Agency’s
long-term debt as of June 30, 2011 is $8,000,000 (see Note 8E).
The bonds were broken into two segments; the Term Bonds $53,675,000 and the Special Escrow Bonds
$11,035,000.
The Term Bonds are payable in annual installments ranging from $775,000 to $9,345,000 until maturity on
The Special Escrow bonds are payable in annual installments ranging from $435,000 to $830,000 until
maturity on November 1, 2024. Interest is payable semiannually on May 1 and November 1, with rates
ranging from 3.40% to 4.55%. Bonds outstanding at June 30, 2011 were $8,860,000.
The 2002 Los Coyotes Redevelopment Project Tax Allocation Revenue Bonds, Series A, are payable solely
current year and total tax revenues were $4,042,925 and $18,062,614, respectively.
Future debt service requirements on these bonds (term and special escrow) are as follows:
Year Ending
June 30,
2012
Principal
$
1,325,000
Interest
$
2,711,810
Total
$
4,036,810
2013
1,370,000
2,667,248
4,037,248
2014
1,420,000
2,618,928
4,038,928
2015
2016
1,460,000
1,540,000
2,559,016
2,486,446
4,019,016
4,026,446
2017-2021
19,970,000
10,697,468
30,667,468
2022-2025
29,580,000
2,874,972
32,454,972
TOTAL
$
56,665,000
61
$
26,615,888
$
83,280,888
City of Cerritos
I.
Los Coyotes Redevelopment Project 2002 Tax Allocation Revenue Bonds, Series B
In September 2002, the Authority issued $12,225,000 in 2002 Series B Tax Allocation Revenue Bonds. The
proceeds were loaned to the Agency and will be used to fund projects in the Los Coyotes Project Area and
to pay for the cost of issuance.
The bonds are payable in annual installments ranging from $210,000 to $1,270,000 until maturity on
The 2002 Los Coyotes Redevelopment Project Tax Allocation Revenue Bonds, Series B, are payable solely
Year Ending
June 30,
2012
2013
Principal
$
$
519,715
510,985
Total
$
754,715
750,985
2014
250,000
501,485
751,485
2015
260,000
491,155
751,155
2016
270,000
480,087
750,087
2017-2021
4,730,000
1,840,585
6,570,585
2022-2025
4,720,000
506,480
5,226,480
TOTAL
J.
235,000
240,000
Interest
$
10,705,000
$
4,850,492
$
15,555,492
Los Cerritos and Los Coyotes Redevelopment Project - Magnolia Power Project B, Series 2003 Revenue
Bonds
The Southern California Public Power Authority (“SCPPA”) was created in 1980 under a joint exercise of
powers agreement. It was formed for the acquisition and construction of facilities to supply electric energy
to the inhabitants within the boundaries of its members. Complete financial statements for SCPPA may be
obtained at their administrative office located at 225 S. Lake Avenue, Suite 1250, Pasadena, CA 91101.
In 2001, SCPPA entered into an agreement with the City of Anaheim, the City of Burbank, the City of
Cerritos, the City of Colton, the City of Glendale, and the City of Pasadena to construct a generation facility
with a capacity of 242 megawatts to be located on the existing Magnolia generating site in Burbank,
California.
62
City of Cerritos
J.
Los Cerritos and Los Coyotes Redevelopment Project - Magnolia Power Project B, Series 2003 Revenue
Bonds, Continued
SCPPA issued $14,105,000 of lease revenue bonds to finance a portion of the project costs for the facility that
was collateralized by the parking structure at City Hall. The City has leased back the parking structure from
SCPPA. SCPPA will provide for the payment of a portion of the costs of operation of the Project through the
sale of a portion of the capacity and energy of the Project of the member cities pursuant to the Power Sales
Agreement. On March 1, 2003, the City entered into this sales agreement with SCPPA, entitling the City to a
4.2% share of the plant output.
In June 2005, the Redevelopment Agency Debt Service Fund assumed the City’s debt related to the sales
agreement with SCPPA. As the energy derived from the plant serves and benefits both the Los Cerritos and
Los Coyotes Capital Project Areas, it was deemed appropriate that the Agency assume the debt. Debt
assumed was allocated 25%, which is $3,526,250, to the Los Cerritos Project Area and 75%, which is
$10,578,750, to the Los Coyotes Project Area. The City advances debt service payments to SCPPA and is
subsequently reimbursed by the Redevelopment Agency immediately after the payment due dates.
The payments are due in annual installments on January 1 and July 1 of each year. The first payment was
made January 2006, and the final payment is due at maturity on July 1, 2036.
The debt service schedule for the Los Cerritos Project Area is at Note 8D.
The Los Coyotes Project Area portion is payable solely from and secured by tax increment revenues
received by the Authority from the Agency. Annual principal and interest payments on the bonds are
expected to require less than 10% of net revenues. The total remaining principal and interest to be paid on
the bonds is $17,539,218. Principal and interest paid for the current year and total tax revenues were
$645,302 and $18,062,614, respectively.
Future debt service requirements on the bonds allocated to the Los Coyotes Project Area are as follows:
Year Ending
June 30,
2012
2013
2014
2015
2016
Principal
$
2017-2021
2022-2026
2027-2031
2032-2036
2037
TOTAL
191,250
196,875
202,500
210,000
219,375
Interest
$
1,235,625
1,531,875
1,948,125
3,043,125
840,000
$
9,618,750
63
453,874
447,414
440,400
432,930
424,894
Total
$
1,984,074
1,687,789
1,272,656
734,437
42,000
$
7,920,468
645,124
644,289
642,900
642,930
644,269
3,219,699
3,219,664
3,220,781
3,777,562
882,000
$
17,539,218
City of Cerritos
K. Los Cerritos Redevelopment Project - Note Payable
In September 2005, the Agency entered into an agreement to purchase land owned by Southeast Regional
Occupational Program within the Los Cerritos Capital Project Area for $1,205,662.
In connection with the purchase, the Agency provided a note payable in the amount of $1,025,000. Interest
will be charged annually at the rate equal to the annual average of the City’s investment fund return,
excluding interest on outstanding loans provided by the City to the Agency and the Electric Utility
Enterprise Fund.
Interest only payments are due on each anniversary date through 2010. Thereafter, annual principal and
interest payments will be due through the maturity date, September 26, 2015, with principal in the amount
of $200,000 per year on the sixth through ninth year anniversary dates and $225,000 on the maturity date.
Future debt service requirements on this note are as follows:
Year Ending
June 30,
Principal
Interest
Total
2012
2013
2014
2015
2016
$
200,000
200,000
200,000
200,000
225,000
$
15,990
12,870
9,750
6,630
3,510
$
215,990
212,870
209,750
206,630
228,510
TOTAL
$
1,025,000
$
48,750
$
1,073,750
L. Compensated Absences
This liability represents the total unpaid vacation and compensatory time earned by employees of the City.
Since this amount is paid to the employee upon termination of employment, there is no fixed payment
schedule for earned but unpaid compensated absences. The compensated absences are predominately
associated with the General Fund and Water Fund.
M. Claims Payable – General Liability
The amount of claims and judgments payable at June 30, 2011 was $1,670,797. See Note 11E for details.
64
City of Cerritos
9. FUND BALANCES CLASSIFICATION
The City’s fund balances at June 30, 2011 are tabulated below by fund types.
Redevelopment
Redevelopment
Other
Agency
Agency
Governmental
Debt Service
Capital Projects
Funds
General
Total
Nonspendable:
Prepaid expenses
$
Inventories
Advances to other funds
62,864
$
-
$
-
$
-
$
62,864
15,259
90,057,072
-
11,881,487
-
15,259
101,938,559
90,135,195
-
11,881,487
-
102,016,682
Debt service
-
16,598,679
-
-
16,598,679
Low and moderate income housing
Traffic congestion
-
-
17,012,352
-
66,251
17,012,352
66,251
Proposition A
-
-
-
624,929
624,929
Assessment District #6
Local Law Enforcement Grant
-
-
-
130,575
9,290
130,575
9,290
Environmental Grant
-
-
-
17,468
17,468
Air Quality Management District
Measure R
-
-
-
293,568
331,400
293,568
331,400
-
16,598,679
17,012,352
1,473,481
35,084,512
Total nonspendable
Restricted:
Total restricted
Assigned:
Asset replacement
Art Center programs
Earthquake preparedness
Art in Public Places
Self Insurance
Total assigned
700,000
-
-
-
700,000
9,945,472
1,954,417
-
-
-
9,945,472
1,954,417
550,163
-
-
-
550,163
1,000,000
-
-
-
1,000,000
14,150,052
-
-
-
14,150,052
-
Unassigned:
General Fund
Redevelopment Agency Funds
Total unassigned
Total
$
71,056,060
-
-
71,056,060
-
(74,220,704)
(1,695,040)
-
(75,915,744)
71,056,060
(74,220,704)
(1,695,040)
-
(4,859,684)
175,341,307
$
(57,622,025)
65
$
27,198,799
$
1,473,481
$
146,391,562
City of Cerritos
10. RETIREMENT PLAN
A. Defined Benefit Pension Plan
Plan Description
The City’s defined benefit pension plan, the Miscellaneous Plan for the City of Cerritos (Plan), provides
retirement and disability benefits, annual cost-of-living adjustments, and death benefits to plan members
and beneficiaries. The Plan is part of the Public Agency portion of the California Public Employees’
Retirement System (CalPERS), an agent multiple-employer plan administered by CalPERS, which acts as a
common investment and administrative agent for participating public entities within the State of
California. A menu of benefit provisions as well as other requirements are established by the State statutes
within the Public Employees’ Retirement Law. The City selects optional benefit provisions from the benefit
menu by contract with CalPERS and adopts those benefits through local ordinance. CalPERS issues a
separate comprehensive annual financial report. Copies of CalPERS’ annual financial report may be
obtained from the CalPERS Executive Office, 400 P Street, Sacramento, CA 95814.
Funding Policy
Participants are required to contribute 8% of their annual covered salary. The City makes the contributions
required of City employees on their behalf and for their account. The City is required to contribute the
actuarially determined remaining amounts necessary to fund the benefits for its members. The actuarial
methods and assumptions used are those adopted by the CalPERS Board of Administration. The City’s
required employer contribution rate for fiscal year 2010-11 was 17.297%. The contribution requirements of
the plan members are established by State statute and the employer contribution rate is established and
may be amended by CalPERS.
Annual Pension Cost
For fiscal year 2010-11 the City’s actual and contributed annual pension cost was $1,656,879. The required
contribution for fiscal year 2010-11 was determined as part of an amended contract between the City of
Cerritos and CalPERS which became effective September 23, 2004, which included an actuarial valuation
dated June 30, 2008 using the entry age normal actuarial cost method with the contributions determined as
a percentage of pay. The actuarial assumptions included (a) 7.75% investment rate of return (net of
administrative expenses); (b) projected salary increases that vary by duration of service and (c) a 3.25% costof-living adjustment. Both (a) and (b) include an inflation component of 3.0%. The actuarial value of the
Plan’s assets were determined using a technique that smoothes the effect of short-term volatility in the
market value of investments over a two to five year period depending on the size of investment gains
and/or losses. The Plan’s unfunded actuarial excess assets are being amortized as a level of percentage of
projected payroll on a closed basis. The remaining amortization period at June 30, 2008 was 28 years.
66
City of Cerritos
10. RETIREMENT PLAN, Continued
A. Defined Benefit Pension Plan, Continued
The following is the three-year trend information:
Three-Year Trend Information for PERS
Percentage of
Fiscal Year
Annual Pension
APC
Net Pension
Ending
Cost (APC)
Contributed
Obligation
6/30/2009
6/30/2010
6/30/2011
$
1,731,902
1,693,293
1,656,879
100%
100%
100%
$
-
Funding Status and Funding Progress
As of June 30, 2010, the most recent actuarial valuation date, the plan was 80% funded. The actuarial
accrued liability for benefits was $154.7 million, and the actuarial value of assets was $123.7 million,
resulting in an unfunded actuarial accrued liability (UAAL) of $31 million. The covered payroll (annual
payroll for active employees covered by the plan) was $19.1 million, and the ratio of the UAAL to the
covered payroll was 162%.
B. Post-Retirement Health Care Benefits
Plan Description
In addition to the pension benefits described in Note 10A, the City provides other post-employment
benefits (“OPEB”) through the California Employer’s Retiree Benefit Trust Fund (the “CERBT”), an agent
multiple-employer defined benefit healthcare plan administered by the California Public Employees’
Retirement System (the “CalPERS”), by contributing a predetermined monthly maximum of $872.03 for
each eligible retiree and spouse toward health insurance. These benefits are provided per contract between
the City and the City’s management, professional and general employees. Health insurance premiums for
the City Manager, City Attorney and City Council are fully covered per Council decision. As of June 30,
2011, there were 208 participants receiving these healthcare benefits. Separate financial statements for the
CERBT may be obtained by writing to CalPERS at Lincoln Plaza North 400 Q Street, Sacramento, CA 95814,
or by visiting the CalPERS website at www.calpers.ca.gov.
67
City of Cerritos
B. Post-Retirement Health Care Benefits, Continued
Funding Policy
The contribution requirements of plan members and the City are established and may be amended by the
City, City Council, and/or the employee associations. Currently, contributions are not required from plan
members. On November 19, 2007, the City entered into an agreement with CalPERS to create an irrevocable
trust. The assets, all property and rights purchased with such amounts, and all income attributable to such
amounts, property or rights are held in the trust for the exclusive benefit of the participants and their
beneficiaries. These assets are no longer the property of the City, and as such, are no longer subject to the
claims of the City’s general creditors. A one-time employer contribution of $14 million was made on
December 28, 2007, and was included in the January 1, 2011 actuarial study. During the fiscal year ended
June 30, 2011, the City did not contribute to the plan. The purpose of these contributions is to cover the
annual required contribution (ARC) and to prefund benefits.
As a result, the City calculated a Net OPEB Asset of $10,441,444, representing the difference between the
ARC and actual contributions, as presented below:
Annual Required Contribution
Interest on Beginning Net OPEB Asset
Adjustment to the Annual Required Contribution
$
1,792,058
(4,316,814)
793,265
Annual OPEB Cost
Contributions Made Outside of a Trust
(1,731,491)
-
Change in Net OPEB Assets
(1,731,491)
Net OPEB Asset, Beginning of Year
(8,709,953)
Net OPEB Asset, End of Year
$
(10,441,444)
The interest earnings are based on actual amount of interest earned and the ARC of $1,792,058 is actuarially
determined in accordance with the parameters of GASB Statement No. 45. The ARC represents a level of
funding that, if paid on an ongoing basis is projected to cover the annual normal cost and the amortization
of unfunded actuarial accrued liabilities (or funding excess) over a thirty year period.
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City of Cerritos
Annual OPEB Cost and Net OPEB Obligation (Asset)
For fiscal year 2010-11, the City’s annual OPEB cost of $(1,731,491) was $3,523,549 lower than the ARC of
$1,792,058 as a result of investment earnings. Information on the annual OPEB cost, percentage of Annual
OPEB Cost contributed, and Net OPEB Asset for the 2010-11 fiscal year and preceding years are presented
below:
Annual
Actual
Percentage of
Fiscal
OPEB
Contribution
OPEB Cost
Net OPEB
Year
Cost
(Net of Adjustments)
Contributed
Assets
6/30/2009
$
6,770,678
6/30/2010
$
2,686,877
39.68%
-
0.00%
(8,709,953)
-
0.00%
(10,441,444)
486,338
6/30/2011
(1,731,491)
$
(9,196,291)
Funded Status and Funding Progress
The funded status of the plan as of January 1, 2011 is as follows:
Schedule of Funding Progress for OPEB ($ Amount in Thousands)
Actuarial
Actuarial
Validation
Value of
Entry Age
Unfunded
Funded
Covered
% of
Date
Assets
Normal AAL
AAL
Status
Payroll
Payroll
1/1/2011
$
20,646
Annual
$
30,179
$
9,533
68.4%
$
21,305
UAAL as a
44.7%
Actuarial valuations of an ongoing plan involve estimates of the value of reported amounts and
assumptions about the probability of occurrence of events far into the future. Examples include
assumptions about future employment, mortality, and the healthcare cost trend. Amounts determined
regarding the funded status of the plan and the annual required contributions of the City are subject to
continual revision as actual results are compared with past expectations and new estimates are made about
the future. The schedule of funding progress, presented as required supplementary information following
the notes to the financial statements, presents multiyear trend information that shows whether the actuarial
value of plan assets is increasing or decreasing over time relative to the actuarial accrued liabilities for
benefits.
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City of Cerritos
Actuarial Methods and Assumptions
Projections of benefits for financial reporting purposes are based on the substantive plan and include the
types of benefits provided at the time of each valuation. The actuarial methods and assumptions used
include techniques that are designed to reduce the effects of short-term volatility in actuarial accrued
liabilities and the actuarial value of assets, consistent with the long-term perspective of the calculations. In
the January 1, 2011, actuarial valuation, the entry age normal actuarial cost method was used. The actuarial
assumptions included a 7.75 percent investment rate of return (net of administrative expenses) and an
initial annual healthcare cost trend rate of 9 percent, reduced by decrements to an ultimate rate of 5% after
eight years. A 3.25 percent annual rate of increase in future salaries is also assumed in the valuation. The
City’s unfunded actuarial accrued liability will be amortized as a level percentage of projected covered
payroll on a closed basis. The amortization period at January 1, 2011 was twenty-six years.
C. Other Defined Contribution Plans
The City of Cerritos has adopted, through the Public Agency Retirement System (the “PARS”), tax qualified
governmental defined benefit plans for the benefit of eligible City of Cerritos employees to provide
supplemental retirement benefits. The plans, which include exempt employees plan, non-exempt
employees plan and the defined contribution floor-offset plan, conform to the requirements of Internal
Revenue Code Section 401(a) and therefore entitle each Plan to favorable tax treatment.
11. LIABILITY, PROPERTY AND WORKERS’ COMPENSATION PROTECTION
A. Description of Self-Insurance Pool Pursuant to Joint Powers Agreement
The City of Cerritos is a member of the California Joint Powers Insurance Authority (the “CJPIA”). The
CJPIA is composed of 121 California public entities and is organized under a joint powers agreement
pursuant to California Government Code §6500 et seq. The purpose of the 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. The CJPIA 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.
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City of Cerritos
11. LIABILITY, PROPERTY AND WORKERS’ COMPENSATION PROTECTION, Continued
B. Self-Insurance Programs of the CJPIA
A revised cost allocation methodology was introduced in 2010-11, however it retains many elements of the
previous cost allocation methodology. Each member pays an annual contribution (formerly called the
primary deposit) to cover estimated losses for the coverage period. This initial funding is paid at the
beginning of the coverage period. After the close of the coverage period, outstanding claims are valued. A
retrospective deposit computation is then conducted annually thereafter until all claims incurred during the
coverage period are closed on a pool-wide basis. This subsequent cost re-allocation among members based
on actual claim development can result in adjustments of either refunds or additional deposits required.
The total funding requirement for self-insurance programs is estimated using actuarial models and prefunded through the annual contribution. Costs are allocated to individual agencies based on exposure
(payroll) and experience (claims) relative to other members of the risk-sharing pool. Additional
information regarding the cost allocation methodology is provided below.
Liability
In the liability program claims are pooled separately between police and non-police exposures. (1) The
payroll of each member is evaluated relative to the payroll of other members. A variable credibility factor is
determined for each member, which establishes the weight applied to payroll and the weight applied to
losses within the formula. (2) The first layer of losses includes incurred costs up to $30,000 for each
occurrence and is evaluated as a percentage of the pool’s total incurred costs within the first layer. (3) The
second layer of losses includes incurred costs from $30,000 to $750,000 for each occurrence and is evaluated
as a percentage of the pool’s total incurred costs within the second layer. (4) Incurred costs in excess of
$750,000 up to the reinsurance attachment point of $5 million are distributed based on the outcome of cost
allocation within the first and second loss layers. (5) Costs of covered claims from $5 million to $10 million
are paid under a reinsurance contract subject to a $2.5 million annual aggregate deductible. Costs of
covered claims from $10 million to $15 million are paid under two reinsurance contracts subject to a
combined $3 million annual aggregate deductible. On a cumulative basis for all 2010-11 reinsurance
contracts the annual aggregate deductible is $5.5 million. (6) Costs of covered claims from $15 million up to
$50 million are covered through excess insurance policies.
The overall coverage limit for each member including all layers of coverage is $50 million per occurrence.
Costs of covered claims for subsidence losses are paid by reinsurance and excess insurance with a pooled
sub-limit of $35 million per occurrence. This $35 million subsidence sub-limit is composed of (a) $5 million
retained within the pool’s SIR, (b) $10 million in reinsurance and (c) $20 million in excess insurance. The
excess insurance layer has a $20 million annual aggregate.
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City of Cerritos
B. Self-Insurance Programs of the CJPIA, Continued
Workers’ Compensation
In the workers’ compensation program claims are pooled separately between public safety (police and fire)
and non-public safety exposures. (1) The payroll of each member is evaluated relative to the payroll of
other members. A variable credibility factor is determined for each member, which establishes the weight
applied to payroll and the weight applied to losses within the formula. (2) The first layer of losses includes
incurred costs up to $50,000 for each occurrence and is evaluated as a percentage of the pool’s total incurred
costs within the first layer. (3) The second layer of losses includes incurred costs from $50,000 to $100,000
for each occurrence and is evaluated as a percentage of the pool’s total incurred costs within the second
layer. (4) Incurred costs in excess of $100,000 up to the reinsurance attachment point of $2 million are
distributed based on the outcome of cost allocation within the first and second loss layers. (5) Costs of
covered claims from $2 million up to statutory limits are paid under a reinsurance policy. Protection is
provided per statutory liability under California Workers’ Compensation Law.
Employer’s Liability losses are pooled among members to $2 million. Coverage from $2 million to $4
million is purchased as part of a reinsurance policy, and Employer’s Liability losses from $4 million to $10
million are pooled among members.
C. Purchased Insurance
Pollution Legal Liability Insurance
The City of Cerritos participates in the pollution legal liability insurance program (formerly called
environmental insurance) which is available through the CJPIA. The policy covers sudden and gradual
pollution of scheduled property, streets, and storm drains owned by the City of Cerritos. Coverage is on a
claims-made basis. There is a $50,000 deductible. The CJPIA has a limit of $50 million for the 3-year period
from July 1, 2008 through July 1, 2011. Each member of the CJPIA has a $10 million sub-limit during the 3year term of the policy.
Property Insurance
The City of Cerritos participates in the all-risk property protection program of the CJPIA. This insurance
protection is underwritten by several insurance companies. City of Cerritos property is currently insured
according to a schedule of covered property submitted by the City of Cerritos to the CJPIA. City of Cerritos
property currently has all-risk property insurance protection in the amount of $252,770,335. 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.
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City of Cerritos
C. Purchased Insurance, Continued
Crime Insurance
The City of Cerritos purchases crime insurance coverage in the amount of $1,000,000 with a $2,500
deductible. The fidelity coverage is provided through the CJPIA. Premiums are paid annually and are not
subject to retrospective adjustments.
Special Event Tenant User Liability Insurance
The City of Cerritos further protects against liability damages by requiring tenant users of certain property
to purchase low-cost tenant user liability insurance for certain activities on agency property. The insurance
premium is paid by the tenant user and is paid to the City of Cerritos according to a schedule. The City of
Cerritos then pays for the insurance. The insurance is arranged by the CJPIA.
D. Adequacy of Protection
During the past three fiscal years, none of the above programs of protection experienced settlements or
judgments that exceeded pooled or insured coverage. There were also no significant reductions in pooled
or insured liability coverage in 2010-11.
E. Retroactive Deposit
Each year the City makes an annual contribution, and at the end of the year, the CJPIA retroactively
reviews the loss history and issues a partial refund or requests an additional deposit based on actual claims
activity. This retrospective review is conducted on an annual basis and includes all coverage years which
contain open claims. For many members of the CJPIA, claims incurred in 2003-2004 and 2004-2005 have
experienced significant adverse development during the past three years.
Additional funding (retrospective adjustments) for these and other coverage years, was not collected in full
at the time these funding short-falls were initially identified. Members of the CJPIA were allowed to make
partial payments, while a portion of each retrospective adjustment was deferred. The aggregation of these
deferred amounts over the course of several years is equal to the City’s current outstanding balance, which
is referred to as the aggregate retrospective deposit balance.
Retrospective deposits are payments required in addition to the annual contribution, which is payment for
the current year’s insurance coverage.
Following is a summary of retroactive deposit balances for the fiscal year ended June 30, 2011:
Balance
July 1, 2010
Addition
Deletion
Balance
June 30, 2011
Due within
One Year
Due in more
than One Year
Claims liabilities - general liabilities $
1,917,561
$
-
$
(246,764)
$
1,670,797
$
-
$
1,670,797
Total claims liabilities
1,917,561
$
-
$
(246,764)
$
1,670,797
$
-
$
1,670,797
$
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City of Cerritos
12. OTHER REQUIRED DISCLOSURES
A. Deficit Fund Balance/Net Assets
At June 30, 2011, the following funds had deficit fund balances/net assets:
Fund
Fund Type
Debt Service Fund:
Redevelopment Agency
Enterprise Fund:
Electric Utility Fund
Deficit
Major Governmental Fund
$
(57,622,025)
Major Enterprise Fund
(747,072)
Redevelopment Agency Debt Service Fund – The Redevelopment Agency Debt Service Fund has a deficit fund
balance of $57,622,025 as a result of debt service payments exceeding revenues. The deficit is expected to be
eliminated with future tax increment revenues.
Electric Utility Fund – The Electric Utility Fund has deficit net assets of $747,072 as a result of the one-time
impairment loss of $2,143,267. The deficit is expected to be eliminated with future sales of electricity.
B. Excess of Expenditures over Appropriations
Excess of expenditures over appropriations occurred in individual funds during fiscal year 2010-11 as
follows:
Fund
General Fund
Special Revenue Funds:
Street Improvements
Drainage
Local Law Enforcement Grants
Expenditures
$
68,949,923
Appropriations
$
57,995,410
Exess
Expenditures over
Appropriations
$
(10,954,513)
2,974,881
13,329
127,732
2,943,990
12,640
107,420
(30,891)
(689)
(20,312)
19,838
44,891
18,670
44,710
(1,168)
(181)
Library Grants
AQMD
General Fund actual expenditures exceeded budgeted expenditures for the purchase of capital assets from
the Agency. Special Revenue Fund actual expenditures exceeded budgeted expenditures for the Street
Improvements, Drainage and AQMD relating to operational and administrative costs, and for Local Law
Enforcement Grants and Library Grants to reimburse the General Fund for costs incurred relating to the
grants.
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City of Cerritos
13. COMMITMENTS AND CONTINGENCIES
A. Lawsuits
Numerous claims and suits have been filed against the City in the normal course of conducting City
business. Based upon information received from the City Attorney and the self-insurance administrator,
the estimated liability under such claims would be adequately covered by the deposits paid to CJPIA for
self-insurance and insurance coverage (See Note 11).
B. Contract with Los Angeles County Sheriff’s Department
The City contracts for policing services through the Los Angeles County Sheriff’s Department. As part of
the agreement for services, the City is required to pay an additional 4% premium over the contract price to
the Sheriff’s Department for liability insurance. This amount is held by the County in a Liability Trust Fund
and provides for the payment of claims brought against the Sheriff’s Department. During the fiscal year
ended June 30, 2011, the results of an actuarial study of both existing open claims and claims not yet
reported are not able to be estimated at this time. In order to fund these past obligations of the Liability
Trust Fund, the premium paid by the City may increase in future periods. The precise amount and timing
of any contingencies or commitments resulting from the shortfall in the County’s Liability Trust Fund
cannot be determined at this time.
C. $5,640,000 Tax Allocation Bonds arrangement with Commonwealth Cousins I, LLC
In October 1998, the City Council authorized the Agency to issue bonds relating to specific development
within the Los Coyotes Project Area. Then, in November 1998, the Agency entered into an agreement to
issue $5,640,000 of Tax Allocation Bonds to Commonwealth Cousins I, LLC, in relation to the construction
of a shared parking structure in the Cerritos Towne Center. The parking structure serves both the retail
complex and tenants within an adjacent office building. In 2001, $3,760,000 of the bonds were issued. The
remaining balance of $1,880,000 remained unissued as of June 30, 2011. Interest will not accrue prior to the
issuance date. The Agency will repay the bonds by pledging a portion of the tax increment generated from
the adjacent office building.
D. Electric Utility
The City’s Electric Utility is a member of the Magnolia Power Project that is financed and owned by the
Southern California Public Power Authority (SCPPA). Member cities of the Magnolia Power Project
include Anaheim, Burbank, Colton, Glendale and Pasadena (the Project “A” Participants) and the City of
Cerritos (the Project “B” Participant). All Magnolia Participants have a “Take or Pay” contract with SCPPA
and are obligated to pay their share of the indebtedness regardless of the ability of the contracting agency to
provide electricity. The City’s shares of these payments are reported as long-term debt (see Notes 8D and
8J). Payment for these obligations will be made from operating revenues. This contract provides for
generating capacity of 4.2% of the output generated from the plant.
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City of Cerritos
13. COMMITMENTS AND CONTINGENCIES, Continued
E. Grants
Amounts received or receivable from federal and state granting agencies are subject to audit and
adjustment by grantor agencies. While no matters of non-compliance were disclosed by the audit of the
financial statements or single audit of the Federal grant programs, grantor agencies may subject grant
programs to additional compliance tests, which may result in disallowed costs. In the opinion of
management, future disallowances of current or prior grant expenditures, if any, would not have a material
adverse effect on the financial position of the City.
14. LEASE INCOME UNDER OPERATING LEASES
Land in the amount of $69,098,912 is owned by the City and Agency and is held for lease. In connection
with certain ground leases of the Cerritos Towne Center property, the Lincoln Station Property,
REMAX/ABC property, Lamar/Kia property and the Jaguar/Land Rover property, the Agency and City
have entered into cooperation agreements. Under the terms of the cooperation agreements, 75% of the lease
income is paid to the City and 25% is paid to the Agency. For the year ended June 30, 2011, the Agency’s
25% portion of the lease income was $1,928,484 while the City’s 75% portion was $4,730,575.
Projected minimum lease payments to be received by the City and Agency as of June 30, 2011 are as
follows:
Year Ending
June 30,
2012
City
$
2013
2014
2015
2016
2017-2088
Total
Agency
4,344,762
$
4,391,451
4,400,154
4,410,487
4,438,619
272,806,037
$
294,791,510
1,791,584
Total
$
1,821,117
1,837,658
1,532,362
1,479,540
90,935,345
$
99,397,606
6,136,346
6,212,568
6,237,812
5,942,849
5,918,159
363,741,382
$
394,189,116
15. TRANSFER OF ASSETS
On March 24, 2011, the City and the Agency signed a “Transfer and Purchase Agreement and Joint Escrow
Instructions” (the “Agreement”) approving the transfer to the City of ownership interest in properties
recorded as capital assets on the Agency’s financial statements. These properties included (1) parcels on
which public uses already exist or on which additional development for public use is contemplated, (2)
parcels which are currently vacant and which are held for future redevelopment either by a public entity or
through a public-private partnership , and (3) properties on which initial public-private redevelopment has
occurred but which remain subject to a ground lease interest under which the Agency retains a reversionary
interest in the real property following the expiration or earlier termination of that ground lease.
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City of Cerritos
15. TRANSFER OF ASSETS, Continued
The capital assets were transferred on March 31, 2011 as a result of the Agreement, from the Agency to the
City. The transfer included land ($59.1 million), construction in progress ($0.2 million), and buildings ($59.7
million, net of accumulated depreciation of $37.7 million). The $119.0 million in capital assets at June 30,
2011 are included in note 6 in the notes to the basic financial statements of the City of Cerritos. In addition,
land held for resale or lease in the amount of $1,792,610 was transferred to the City’s capital assets as part of
the Agreement.
16. PRIOR PERIOD ADJUSTMENTS
Government-Wide Financial Statements
Net Assets at July 1, 2010
(1) Sewer Fund Reclassification
(2) Capital Assets
Infrastructure
Accumulated Depreciation
(3) Other Post-Employment Benefit Asset
Net Assets at July 1, 2010, as Restated
$
288,426,820
(3,247,905)
$
39,086,520
3,247,905
(11,760,205)
5,880,532
10,725,728
$
290,024,970
11,760,205
(5,880,532)
$
48,214,098
Fund Financial Statements
Fund Balance at July 1, 2010
Governmental Fund
Nonmajor Governmental
Funds
$
6,276,332
Proprietary Fund
Nonmajor Enterprise
Funds
$
7,548,029
(3,247,905)
3,247,905
(1) Sewer Fund Reclassification
(2) Capital Assets
Infrastructure
Accumulated Depreciation
Fund Balance at July 1, 2010, as Restated
$
3,028,427
11,760,205
(5,880,532)
$
16,675,607
(1) Sewer Fund reported as part of Nonmajor Governmental Funds and Governmental Activities as of June
30, 2010 was reclassified to Nonmajor Enterprise Funds and Business-Type Activities at July 1, 2010 due
to implementation of GASB 54.
(2) Capital assets funded by the Sewer Fund and related accumulated depreciation were reclassified from
Governmental Activities to Business-Type Activities due to implementation of GASB 54.
(3) Other Post-Employment Benefit was restated from an obligation in the amount of $2,015,775 to an asset
in the amount of $8,709,953. The net effect was an increase to net assets in the amount of $10,725,728 at
July 1, 2010.
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City of Cerritos
17. RECENT CHANGES
AGENCIES
IN
LEGISLATION
AFFECTING
CALIFORNIA
REDEVELOPMENT
On June 29, 2011, the Governor of the State of California signed Assembly Bills X1 26 and 27 as part of the
State’s budget package. Assembly Bill X1 26 requires each California redevelopment agency to suspend
nearly all activities except to implement existing contracts, meet already-incurred obligations, preserve its
assets and prepare for the impending dissolution of the agency. Assembly Bill X1 27 provides a means for
redevelopment agencies to continue to exist and operate by means of a Alternative Voluntary
Redevelopment Program. Under this program, each city would adopt an ordinance agreeing to make
certain payments to the County Auditor Controller in fiscal year 2011-12 and annual payments each fiscal
year thereafter. Assembly Bill X1 26 indicates that the city “may use any available funds not otherwise
obligated for other uses” to make this payment. The City of Cerritos intends to use available monies of its
redevelopment agency for this purpose and the City and Agency have approved a reimbursement
agreement to accomplish that objective. The amounts to be paid after fiscal year 2012-13 have yet to be
determined by the state legislature.
Assembly Bill X1 26 directs the State Controller of the State of California to review the propriety of any
transfers of assets between redevelopment agencies and other public bodies that occurred after January 1,
2011. If the public body that received such transfers is not contractually committed to a third party for the
expenditure or encumbrance of those assets, the State Controller is required to order the available assets to
be transferred to the public body designated as the successor agency by Assembly Bill X1 26.
In the event that Assembly Bill X1 26 is upheld, the interagency receivable recognized by funds of the City
that had previously loaned or advanced funds to the redevelopment agency may become uncollectible
resulting in a loss recognized by such funds. The City might additionally be impacted if reimbursements
previously paid by the redevelopment agency to the City for shared administrative services are reduced or
eliminated.
The League of California Cities and the California Redevelopment Association (the “CRA”) filed a lawsuit
on July 18, 2011 on behalf of cities, counties and redevelopment agencies petitioning the California Supreme
Court to overturn Assembly Bills X1 26 and 27 on the grounds that these bills violate the California
Constitution. On August 11, 2011, the California Supreme Court issued a stay of all of Assembly Bill X1 27
and most of Assembly Bill X1 26. The California Supreme Court stated in its order that “the briefing
schedule is designed to facilitate oral argument as early as possible in 2011, and a decision before January
15, 2012.” A second order issued by the California Supreme Court on August 17, 2011 indicated that certain
provisions of Assembly Bills X1 26 and 27 were still in effect and not affected by its previous stay, including
requirements to file an appeal of the determination of the community remittance payment by August 15,
2011, the requirement to adopt an Enforceable Obligations Payment Schedule (“EOPS”) by August 29, 2011,
and the requirement to prepare a preliminary draft of the initial Recognized Obligation Payment Schedule
(“ROPS”) by September 30, 2011.
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City of Cerritos
17. RECENT CHANGES IN
AGENCIES, Continued
LEGISLATION
AFFECTING
CALIFORNIA
REDEVELOPMENT
Because the stay provided by Assembly Bill X1 26 only affects enforcement, each agency must adopt an
Enforceable Obligation Payment Schedule and draft Recognized Obligation Payment Schedule prior to
September 30, 2011, as required by the statute. Enforceable obligations include bonds, loans and payments
required by the federal or State government; legally enforceable payments required in connection with
agency employees such as pension payments and unemployment payments, judgments or settlements;
legally binding and enforceable agreements or contracts; and contracts or agreements necessary for the
continued administration or operation of the agency that are permitted for purposes set forth in AB1X 26.
On August 11, 2011, City Ordinance No. 962 was adopted, indicating that the City will comply with the
Alternative Voluntary Redevelopment Program in order to permit the continued existence and operation of
the agency, in the event Assembly Bills X1 26 and/or 27 are upheld as constitutional. The initial payment
by the City is estimated to be $9,339,030 for the year ended June 30, 2012. Thereafter, an estimated
$2,300,000 will be due annually. The amounts to be paid after fiscal year 2012-13 have yet to be determined
by the State Legislature. The semi-annual payments will be due on January 15 and May 15 of each year and
would increase or decrease with changes in tax increment. Additionally, an increased amount would be due
to schools if any "new debt" is incurred. Assembly Bill X1 27 allows a one-year reprieve on the agency’s
obligation to contribute 20% of tax increment to the low-and-moderate-income housing fund so as to permit
the Agency to assemble sufficient funds to make its initial payments. Failure to make these payments
would require agencies to be terminated under the provisions of ABX1 26.
Management believes that the Agency will have sufficient funds to pay its obligations as they become due
during the fiscal year ending June 30, 2012. The nature and extent of the operation of redevelopment
agencies in the State of California beyond that time frame are dependent upon the outcome of litigation
surrounding the actions of the State. In the event that Assembly Bills X1 26 and/or 27 are specifically found
by the courts to be unconstitutional, there is a possibility that future legislative acts may create new
challenges to the ability of redevelopment agencies in the State of California to continue in view of the
California State Legislature’s stated intent to eliminate California redevelopment agencies and to reduce
their funding.
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80
REQUIRED SUPPLEMENTARY INFORMATION
(UNAUDITED)
81
CITY OF CERRITOS
Required Supplementary Information (Unaudited)
1. BUDGET AND BUDGETARY ACCOUNTING
The annual budget adopted by the City Council provides for the general operation of the City. It includes
proposed expenditures and the means of financing them.
The City Council approves total budgeted appropriations and any amendments to appropriations
throughout the year. This “appropriated budget” covers substantially all City expenditures, with the
exception of debt service on bond issues and capital improvement projects carried forward from prior
years, which expenditures constitute legally-authorized “non-appropriated budget.”
There were no significant non-budgeted financial activities. Actual expenditures may not exceed budgeted
appropriations at the fund level. However, the City Manager is authorized to transfer budgeted amounts
between funds. There were no significant supplementary budget appropriations during the year ended
June 30, 2011.
Formal budgetary integration is employed as a management control. Commitments for materials and
services, such as purchase orders and contracts, are recorded during the year as encumbrances to assist in
controlling expenditures. Encumbrances at year end lapse, unless appropriations are made for certain
capital projects in the subsequent fiscal year.
Annual budgets for the General and Special Revenue Funds are adopted on a basis substantially consistent
with accounting principles generally accepted in the United States of America. Accordingly, actual
revenues and expenditures can be compared with related budgeted amounts without any significant
reconciling items. Budgets for the Capital Projects and Debt Service Funds are long-term in nature.
Accordingly, no budgetary comparisons are reflected for these funds in the accompanying financial
statements. No budgetary comparisons are presented for Proprietary Funds, as the City is not legally
required to adopt a budget for these types of funds.
Under Article XIIIB of the California Constitution (the Gann Spending Limitation Initiative), the City is
restricted as to the amount of annual appropriations from the proceeds of taxes, and if proceeds of taxes
exceed allowed appropriations, the excess must either be refunded to the State Controller, returned to the
taxpayers through revised tax rates or revised fee schedules, or an excess in one year may be offset against a
deficit in the following year. For the fiscal year ended June 30, 2011, based on calculations by City
Management, proceeds of taxes did not exceed appropriations. Further, Section 5 of Article XIIIB allows the
City to designate a portion of fund balance for general contingencies, to be used for any purpose.
82
CITY OF CERRITOS
Required Supplementary Information (Unaudited), Continued
1. BUDGET AND BUDGETARY ACCOUNTING, Continued
BUDGETARY COMPARISON SCHEDULE
GENERAL FUND
Variance with
Final Budget
Budgeted Amounts
Original
Final
REVENUES:
Taxes
Franchises
$
$
1,012,500
Other revenue
TOTAL REVENUES
EXPENDITURES:
Current:
Public Works
Water and Power
Capital outlay
TOTAL EXPENDITURES
EXCESS OF REVENUES OVER
Transfers in
Transfers out
Contribution from
Cerritos Redevelopment Agency
FUND BALANCES - BEGINNING OF YEAR
$
23,040,000
$
23,635,540
1,913,500
1,487,320
1,869,739
930,000
930,000
15,640,090
1,305,871
10,921,000
10,921,000
15,757,260
7,387,050
7,437,580
8,741,938
1,505,000
1,505,000
6,886,623
$
595,540
(426,180)
939,739
589,880
499,150
747,669
(14,334,219)
4,836,260
1,304,358
5,381,623
248,519
61,886,320
61,886,320
60,431,960
(1,454,360)
1,879,400
2,472,780
2,534,990
2,403,590
2,515,105
3,000,786
19,885
(597,196)
11,340,300
144,010
22,499,620
11,762,820
8,765,580
10,261,810
819,460
21,973,410
11,723,280
8,278,870
10,246,568
175,593
20,909,182
10,747,581
8,054,469
15,242
643,867
1,064,228
975,699
224,401
58,864,510
57,995,410
13,300,639
68,949,923
(13,300,639)
(10,954,513)
3,021,810
3,890,910
(8,517,963)
(12,408,873)
(2,381,090)
1,200,000
(2,381,090)
(2,233,414)
(1,181,090)
640,720
2,709,820
183,100,074
183,100,074
183,740,794
83
$
185,809,894
147,676
1,200,000
-
(2,381,090)
NET CHANGE IN FUND BALANCE
Actual
15,599,890
-
TOTAL OTHER FINANCING
SOURCES (USES)
FUND BALANCES - END OF YEAR
23,941,000
Positive
(Negative)
1,792,610
1,792,610
759,196
1,940,286
(7,758,767)
(10,468,587)
-
183,100,074
$
175,341,307
$
(10,468,587)
CITY OF CERRITOS
Required Supplementary Information (Unaudited), Continued
2. DEFINED PENSION PLAN
PUBLIC EMPLOYEE RETIREMENT SYSTEMS (PERS)
SCHEDULE OF FUNDING PROGRESS
Miscellaneous Employees
Schedule of Funding Progress for PERS ($ Amount in Thousands)
Valuation
Actuarial Value
Entry Age Normal
Unfunded/Liability
Funded
Annual Covered
UAAL as a %
Date
of Assets
Accrued Liability
(Excess Assets)
Status
Payroll
of Payroll
6/30/2008
$
6/30/2009
6/30/2010
109,425
$
116,451
123,723
132,565
$
146,971
154,697
23,140
82.5%
30,520
30,974
79.2%
80.0%
$
19,718
117.4%
19,394
19,126
157.4%
161.9%
* Based on the latest actuarial valuation available.
3. OTHER POST EMPLOYMENT BENEFITS
SCHEDULE OF FUNDING PROGRESS
Schedule of Funding Progress for OPEB ($ Amount in Thousands)
Actuarial
Actuarial
Validation
Value of
Entry Age
Unfunded
Funded
Covered
% of
Date
Assets
Normal AAL
AAL
Status
Payroll
Payroll
1/1/2007
1/1/2009
1/1/2011
$
Annual
11,825
20,646
$
25,769
$
27,855
30,179
* Based on the latest actuarial valuation available.
84
25,769
0.0%
16,030
9,533
42.5%
68.4%
$
UAAL as a
19,306
133.5%
21,648
21,305
74.0%
44.7%
SUPPLEMENTARY INFORMATION
85
86
NONMAJOR GOVERNMENTAL FUNDS
Special Revenue Funds account for taxes and other revenues set aside in accordance with law or administrative
regulations for a specific purpose.
Street Improvements Fund - to account for allocation of state gasoline taxes received by the City. These funds
may be used for street maintenance, right-of-way acquisition and street construction.
Traffic Congestion Fund - to account for allocated funds from the state for street or road maintenance or
reconstruction during the fiscal year 2010-2011.
Drainage Fund - to account for monies received from development fees. The funds are used for the maintenance
of the drainage system.
Proposition “A” Fund - to account for Los Angeles County special 1/2 cent transportation sales tax, which
became effective July 1 , 1982. These funds may be used only for certain transportation purposes.
Proposition “C” Fund - to account for a Los Angeles County Special 1/2 cent transit sales tax, which was
approved by the voters in November 1990. These funds may be used only for public transit projects.
Assessment District #6 Fund - to account for monies received from special assessment tax levied from the areas
benefited. These funds are used to cover the expenses of maintaining the improvements in the area.
Los Coyotes Lighting District Fund - to account for monies secured from the State of California under the
provision of Division 14, Part 1, Street and Highways Code, State of California as amended, referred to as the
“Street Lighting Act of 1919”. These funds are used for the installation, maintenance of, and furnishing of
electrical current for the lighting of a street lighting system on certain public streets within the City.
Local Law Enforcement Grants Fund - to account for non-recurring grant monies received from the State of
California for “Local Law Enforcement Block Grant”. These funds are used for public safety programs.
COPS Grants Fund - to account for non-recurring grant monies received from the State of California under the
following laws: COPS SB3229 and COPS Ahead. These funds are used for public safety programs.
Library Grants Fund - to account for non-recurring grant monies received from the State of California for
technology improvements in library services.
Environmental Grant Fund - to account for non-recurring grant monies received from the State of California for
increased recycling efforts within the City of Cerritos.
Air Quality Management District (AQMD) Fund - to account for monies received from the South Coast Air
Quality Management District. These funds are used for the City’s rideshare program.
Measure "R" Fund - to account for a Los Angeles County 1/2-cent sales tax which was approved by voters in
November 2008 for transportation purposes.
The Capital Projects Fund is used to account for resources used for the construction and acquisition of capital
facilities.
Municipal Improvement Fund - to account for the monies received from General Fund and other grant monies for
the construction of major capital facilities, which generally require more than one budgetary cycle to complete.
87
City of Cerritos
Combining Balance Sheet
Non-Major Governmental Funds
June 30, 2011
Special Revenue Funds
Street
Traffic
Improvements
Congestion
Proposition
Drainage
"A"
ASSETS
$
160,079
$
106,456
$
86
$
620,840
Receivable:
14,579
-
-
-
Interest
Accounts
-
644
-
2,049
Other
-
-
-
2,040
Total Assets
$
174,658
$
107,100
$
86
$
$
113,750
$
38,866
$
86
$
624,929
LIABILITIES AND
FUND BALANCES
Liabilities:
60,908
1,983
-
-
Due to other funds
-
-
-
-
Deferred revenue
-
-
-
-
174,658
40,849
86
-
-
66,251
-
624,929
-
66,251
-
624,929
Total Liabilities
Fund Balances:
Restricted
Total Fund Balances (Deficit)
$
88
174,658
$
107,100
$
86
$
624,929
Public Safety Grants Fund
Local Law
$
$
$
Proposition
Assessment
Los Coyotes
Enforcement
COPS
Library
Environmental
"C"
District #6
Lighting District
Grant
Grant
Grant
Grant
-
$
$
6,507
$
-
$
-
$
-
$
17,468
$
277,361
-
-
-
16,404
12,706
-
11,320
15,700
-
231
-
-
-
-
-
507
-
-
-
-
-
-
-
-
-
$
130,620
$
6,507
$
16,404
$
-
$
45
$
5,798
$
59
$
-
$
130,389
AQMD
-
709
12,706
$
-
$
-
-
-
$
-
$
-
28,788
$
-
$
-
293,568
-
-
-
-
2,651
12,706
-
-
-
-
-
-
4,404
-
-
11,320
-
-
45
6,507
7,114
12,706
-
11,320
-
-
130,575
-
17,468
293,568
-
130,575
-
17,468
293,568
-
$
130,620
9,290
$
6,507
9,290
$
-
16,404
$
89
12,706
$
-
$
28,788
$
293,568
City of Cerritos
Combining Balance Sheet
June 30, 2011
Capital
Projects Fund
Special Revenue Fund
Total
Total Special
Nonmajor
Measure
Revenue
Municipal
Governmental
"R"
Funds
Improvement
Funds
ASSETS
$
372,903
$
1,692,089
$
35,973
$
1,728,062
Receivable:
Accounts
Interest
Other
Total Assets
-
70,709
349,755
1,037
4,468
-
420,464
4,468
-
2,040
-
2,040
$
373,940
$
1,769,306
$
385,728
$
2,155,034
$
38,857
$
197,461
$
35,973
$
233,434
LIABILITIES AND
FUND BALANCES
Liabilities:
3,683
67,283
-
67,283
Due to other funds
-
15,357
-
15,357
Deferred revenue
-
15,724
349,755
365,479
42,540
295,825
385,728
681,553
331,400
1,473,481
-
1,473,481
331,400
1,473,481
-
1,473,481
Total Liabilities
Fund Balances:
Restricted
Total Fund Balances (Deficit)
$
90
373,940
$
1,769,306
$
385,728
$
2,155,034
91
City of Cerritos
Combining Statement of Revenues, Expenditures and Changes in Fund Balances
Street
Traffic
Improvements
Congestion
Proposition
Drainage
"A"
REVENUES:
Investment and rental income/(loss)
$
(1,323)
$
1,485,527
Franchise
Total Revenues
4,226
$
-
$
14,456
-
-
927,241
-
-
570
11,994
79,355
-
-
-
1,563,559
4,226
570
953,691
EXPENDITURES:
Current:
Public Works
Capital outlay
Total Expenditures
128,405
-
-
-
-
-
-
550,527
1,956,076
224,803
12,133
-
-
-
-
-
371,723
-
1,196
-
518,677
181,436
-
-
2,974,881
406,239
13,329
550,527
(1,411,322)
(402,013)
(12,759)
403,164
REVENUES OVER
Transfers in
Transfers out
NET CHANGE IN FUND BALANCES
704,349
-
12,759
-
-
-
-
(731,959)
704,349
-
12,759
(731,959)
(706,973)
(402,013)
-
(328,795)
706,973
468,264
-
953,724
FUND BALANCE (DEFICIT):
End of Year
$
92
-
$
66,251
$
-
$
624,929
Public Safety Grants Fund
Local Law
$
Proposition
Assessment
Los Coyotes
Enforcement
COPS
Library
Environmental
"C"
District #6
Lighting District
Grant
Grant
Grant
Grant
93
$
616,649
$
-
$
884,416
661
$
31,156
406
$
100,000
19
$
19,654
772
$
31,837
3,088
79,528
90,524
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
707,266
22,005
884,416
31,817
100,406
19,673
32,609
82,616
-
-
-
-
-
-
-
-
1,439,225
-
-
-
-
-
-
44,891
-
-
1,070,455
-
-
-
126,283
-
-
-
-
127,732
120,525
-
-
-
-
2,072
157,792
-
-
19,838
-
-
-
-
-
-
-
-
-
-
1,439,225
2,072
1,228,247
127,732
120,525
19,838
126,283
44,891
(95,915)
(20,119)
(93,674)
37,725
(731,959)
$
1,411
20,594
AQMD
19,933
(343,831)
(165)
731,959
-
348,811
-
-
-
-
-
-
-
-
-
-
-
-
-
731,959
-
348,811
-
-
-
-
-
-
19,933
4,980
(95,915)
(20,119)
(165)
(93,674)
37,725
-
110,642
(4,980)
105,205
20,119
165
111,142
255,843
-
$
130,575
$
-
$
9,290
$
93
-
$
-
$
17,468
$
293,568
City of Cerritos
Combining Statement of Revenues, Expenditures and Changes in Fund Balances
Capital
Special Revenue Fund
Projects Fund
Total
Total Special
Nonmajor
Measure
Revenue
Municipal
Governmental
"R"
Funds
Improvement
Funds
REVENUES:
Investment and rental income/(loss)
$
6,745
$
30,554
$
(215)
$
30,339
459,983
4,656,585
517,551
5,174,136
-
103,088
-
103,088
Franchise
-
79,355
-
79,355
466,728
4,869,582
517,336
5,386,918
Total Revenues
EXPENDITURES:
Current:
-
128,405
-
128,405
-
2,034,643
-
2,034,643
3,865,379
435,687
3,825,437
39,942
Public Works
-
248,257
-
248,257
-
552,621
-
552,621
-
700,113
687,951
1,388,064
435,687
7,489,476
727,893
8,217,369
31,041
(2,619,894)
(210,557)
(2,830,451)
1,797,878
209,586
2,007,464
Capital outlay
Total Expenditures
REVENUES OVER
Transfers in
-
Transfers out
-
(731,959)
-
NET CHANGE IN FUND BALANCES
-
1,065,919
(731,959)
209,586
1,275,505
31,041
(1,553,975)
(971)
(1,554,946)
300,359
3,027,456
971
3,028,427
End of Year
$
94
331,400
$
1,473,481
$
-
$
1,473,481
City of Cerritos
Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual
Street Improvements Special Revenue Fund
Original
Budget
Final
Budget
Variance
Positive
(Negative)
Actual
REVENUES:
$
Franchise
Total Revenues
889,260
-
$
1,608,280
102,200
$
(1,323)
1,485,527
79,355
$
(1,323)
(122,753)
(22,845)
889,260
1,710,480
1,563,559
(146,921)
Current:
Public Works
Capital outlay
10,230
2,570,080
96,790
397,030
130,790
1,785,220
524,210
503,770
128,405
1,956,076
371,723
518,677
2,385
(170,856)
152,487
(14,907)
Total Expenditures
3,074,130
2,943,990
2,974,881
(30,891)
(2,184,870)
(1,233,510)
(1,411,322)
(177,812)
EXPENDITURES:
REVENUES OVER (UNDER) EXPENDITURES
Transfers in
1,865,840
966,580
704,349
(262,231)
1,865,840
966,580
704,349
(262,231)
(319,030)
(266,930)
(706,973)
(440,043)
706,973
706,973
706,973
FUND BALANCE:
Beginning of Year
End of Year
$
387,943
95
$
440,043
$
-
$
(440,043)
City of Cerritos
Traffic Congestion Special Revenue Fund
Original
Budget
Final
Budget
Variance
Positive
(Negative)
Actual
REVENUES:
$
Total Revenues
548,400
$
17,200
$
4,226
-
$
4,226
(17,200)
548,400
17,200
4,226
(12,974)
-
289,230
196,230
224,803
181,436
64,427
14,794
-
485,460
406,239
79,221
548,400
(468,260)
(402,013)
66,247
468,264
468,264
468,264
EXPENDITURES:
Current:
Public works
Capital outlay
Total expenditures
FUND BALANCE:
Beginning of Year
End of Year
$
1,016,664
96
$
4
$
66,251
$
66,247
City of Cerritos
Drainage Special Revenue Fund
Original
Budget
Final
Budget
Variance
Positive
(Negative)
Actual
REVENUES:
$
Total Revenues
1,500
$
500
$
570
$
70
1,500
500
570
70
Current:
Public Works
8,520
12,800
620
9,460
2,560
12,133
1,196
620
(2,673)
1,364
Total Expenditures
21,320
12,640
13,329
(689)
(19,820)
(12,140)
(12,759)
(619)
19,820
12,140
12,759
619
19,820
12,140
12,759
619
-
-
-
-
-
-
-
-
EXPENDITURES:
Transfers in
FUND BALANCE:
Beginning of Year
End of Year
$
-
97
$
-
$
-
$
-
City of Cerritos
Proposition "A" Special Revenue Fund
Original
Budget
Final
Budget
Variance
Positive
(Negative)
Actual
REVENUES:
$
Total Revenues
27,340
979,330
15,000
$
27,340
899,590
12,000
$
14,456
927,241
11,994
$
(12,884)
27,651
(6)
1,021,670
938,930
953,691
14,761
725,000
649,190
550,527
98,663
725,000
649,190
550,527
98,663
296,670
289,740
403,164
113,424
(836,745)
(771,180)
(731,959)
39,221
(836,745)
(771,180)
(731,959)
39,221
(540,075)
(481,440)
(328,795)
152,645
953,724
953,724
953,724
EXPENDITURES:
Current:
Total Expenditures
Transfers out
FUND BALANCE:
Beginning of Year
End of Year
$
413,649
98
$
472,284
$
624,929
$
152,645
City of Cerritos
Proposition "C" Special Revenue Fund
Original
Budget
Final
Budget
Variance
Positive
(Negative)
Actual
REVENUES:
Revenue from other agencies
$
Total Revenues
613,255
100,000
$
613,260
80,000
$
93
616,649
90,524
$
93
3,389
10,524
713,255
693,260
707,266
14,006
1,550,000
1,464,440
1,439,225
25,215
1,550,000
1,464,440
1,439,225
25,215
EXPENDITURES:
Current:
Total Expenditures
(836,745)
(771,180)
(731,959)
39,221
836,745
771,180
731,959
(39,221)
836,745
771,180
731,959
(39,221)
-
-
-
-
-
-
-
-
Transfers in
FUND BALANCE:
Beginning of Year
End of Year
$
-
99
$
-
$
-
$
-
City of Cerritos
Assessment District #6 Special Revenue Fund
Original
Budget
Final
Budget
Variance
Positive
(Negative)
Actual
REVENUES:
$
Total Revenues
800
31,000
$
2,000
28,020
$
1,411
20,594
$
(589)
(7,426)
31,800
30,020
22,005
(8,015)
Current:
Public Works
12,800
310
520
1,340
2,072
310
520
(732)
Total Expenditures
12,800
2,170
2,072
98
19,000
27,850
19,933
110,642
110,642
110,642
EXPENDITURES:
(7,917)
FUND BALANCE:
Beginning of Year
End of Year
$
129,642
100
$
138,492
$
130,575
$
(7,917)
City of Cerritos
Los Coyotes Lighting District Special Revenue Fund
Original
Budget
Final
Budget
Variance
Positive
(Negative)
Actual
REVENUES:
$
Total Revenues
869,000
$
865,030
$
884,416
$
19,386
869,000
865,030
884,416
19,386
954,590
125,410
42,660
1,024,460
171,060
1,070,455
157,792
42,660
(45,995)
13,268
1,080,000
1,238,180
1,228,247
9,933
EXPENDITURES:
Current:
Public Works
Total Expenditures
(211,000)
(373,150)
(343,831)
29,319
211,000
378,130
348,811
(29,319)
211,000
378,130
348,811
(29,319)
-
4,980
4,980
-
(4,980)
(4,980)
-
(
)
Transfers in
Beginning of Year
End of Year
(4,980)
$
(4,980)
101
$
-
$
-
$
-
City of Cerritos
Local Law Enforcement Grants Special Revenue Fund
Original
Budget
Final
Budget
Variance
Positive
(Negative)
Actual
REVENUES:
Revenue from other agencies
$
Total Revenues
1,800
-
$
2,210
$
661
31,156
$
661
28,946
1,800
2,210
31,817
29,607
1,800
107,420
127,732
(20,312)
1,800
107,420
127,732
(20,312)
(105,210)
(95,915)
9,295
105,205
105,205
EXPENDITURES:
Current:
Total Expenditures
-
FUND BALANCE:
Beginning of Year
End of Year
105,205
$
105,205
102
$
(5)
$
9,290
$
9,295
City of Cerritos
COPS Grants Special Revenue Fund
Original
Budget
Final
Budget
Variance
Positive
(Negative)
Actual
REVENUES:
$
Total Revenues
1,800
100,000
$
2,200
100,000
$
406
100,000
$
(1,794)
-
101,800
102,200
100,406
(1,794)
100,000
122,320
120,525
1,795
100,000
122,320
120,525
1,795
1,800
(20,120)
(20,119)
1
20,119
20,119
20,119
-
EXPENDITURES:
Current:
Total Expenditures
FUND BALANCE:
Beginning of Year
End of Year
$
21,919
103
$
(1)
$
-
$
1
City of Cerritos
Library Grants Special Revenue Fund
Original
Budget
Final
Budget
Variance
Positive
(Negative)
Actual
REVENUES:
$
Total Revenues
20,000
$
18,500
$
19
19,654
$
19
1,154
20,000
18,500
19,673
1,173
Current:
20,000
18,670
19,838
(1,168)
Total Expenditures
20,000
18,670
19,838
(1,168)
EXPENDITURES:
-
(170)
(165)
5
165
165
-
FUND BALANCE:
Beginning of Year
End of Year
165
$
165
104
$
(5)
$
-
$
5
City of Cerritos
Environmental Grants Special Revenue Fund
Original
Budget
Final
Budget
Actual
Variance from
Final Budget
Positive
(Negative)
REVENUES:
$
Total Revenues
2,100
9,000
$
1,100
14,370
$
772
31,837
$
(328)
17,467
11,100
15,470
32,609
17,139
31,770
126,610
126,283
327
31,770
126,610
126,283
327
(20,670)
(111,140)
(93,674)
111,142
111,142
111,142
EXPENDITURES:
Current:
Public Works
Total Expenditures
17,466
FUND BALANCE:
Beginning of Year
End of Year
$
90,472
105
$
2
$
17,468
$
17,466
City of Cerritos
AQMD Special Revenue Fund
Original
Budget
Final
Budget
Variance
Positive
(Negative)
Actual
REVENUES:
$
Total Revenues
4,850
50,000
$
4,100
50,000
$
3,088
79,528
$
(1,012)
29,528
54,850
54,100
82,616
28,516
51,490
3,200
44,710
-
44,891
-
(181)
-
54,690
44,710
44,891
(181)
160
9,390
37,725
28,335
255,843
255,843
255,843
-
EXPENDITURES:
Current:
Total Expenditures
FUND BALANCE:
Beginning of Year
End of Year
$
256,003
106
$
265,233
$
293,568
$
28,335
City of Cerritos
Measure "R" Special Revenue Fund
Original
Budget
Final
Budget
Variance
Positive
(Negative)
Actual
REVENUES:
$
Total Revenues
459,940
$
9,000
459,940
$
6,745
459,983
$
(2,255)
43
459,940
468,940
466,728
(2,212)
180,970
538,100
-
435,687
-
102,413
-
180,970
538,100
435,687
102,413
278,970
(69,160)
31,041
100,201
300,359
300,359
300,359
-
EXPENDITURES:
Current:
Public Works
Capital outlay
Total Expenditures
FUND BALANCE:
Beginning of Year
End of Year
$
579,329
107
$
231,199
$
331,400
$
100,201
108
NON-MAJOR ENTERPRISE FUNDS
Reclaimed Water Fund - to account for the construction, operation, and maintenance of the City owned reclaimed
wastewater system.
Sewer Fund - to account for construction, operation, and maintenance of the City owned sewer system and to
account for monies received from sewer connection and maintenance fees.
109
City of Cerritos
Combining Statement of Net Assets
June 30, 2011
Reclaimed
Water
Total
Nonmajor
Enterprise
Funds
Sewer
ASSETS
Current Assets:
Accounts receivable
Interest receivable
$
Total Current Assets
156,398
-
$
156,398
Noncurrent Assets:
Capital assets:
Building and structures
Equipment
Sewer mains
Accumulated depreciation
512,845
8,395
3,952
$
525,192
512,845
164,793
3,952
681,590
1,315,000
13,068,932
120,278
(7,259,805)
11,760,205
(6,037,298)
1,315,000
13,068,932
120,278
11,760,205
(13,297,103)
Total Noncurrent Assets
7,244,405
5,722,907
12,967,312
Total Assets
7,400,803
6,248,099
13,648,902
16,535
6,258
78,059
6,802
6,924
-
23,337
13,182
78,059
Total Current Liabilities
100,852
13,726
114,578
Total Liabilities
100,852
13,726
114,578
7,244,405
55,546
5,722,907
511,466
12,967,312
567,012
LIABILITIES
Accounts payable
Due to other funds
NET ASSETS
Invested in capital assets
Unrestricted
Total Net Assets
$
110
7,299,951
$
6,234,373
$
13,534,324
City of Cerritos
Combining Statement of Revenues, Expenses and Changes in Net Assets
Reclaimed
Water
Total
Nonmajor
Enterprise
Funds
Sewer
OPERATING REVENUES:
Sales of water:
Regular
$
Total Operating Revenues
838,548
-
$
65,095
$
838,548
65,095
838,548
65,095
903,643
329,385
42,157
353,154
47,997
4,270
309,684
131,222
133,862
1,355,132
9,599
874
156,766
460,607
176,019
1,708,286
57,596
5,144
466,450
1,086,647
1,787,455
2,874,102
(1,722,360)
(1,970,459)
OPERATING EXPENSES:
Management
Production and distribution
Operations
Inspections
Billings and collection
Depreciation
OPERATING LOSS
(248,099)
NONOPERATING REVENUES (EXPENSES):
Investment income
Total Nonoperating Revenues (Expenses)
INCOME (LOSS) BEFORE CAPITAL
CONTRIBUTIONS AND TRANSFERS
21
29,155
29,176
21
29,155
29,176
(248,078)
(1,693,205)
(1,941,283)
-
(1,200,000)
(1,200,000)
(248,078)
(2,893,205)
(3,141,283)
9,127,578
16,675,607
TRANSFERS:
Transfers out
NET ASSETS:
Beginning of the Year, as restated (Note 16)
7,548,029
End of the Year
$
111
7,299,951
$
6,234,373
$
13,534,324
City of Cerritos
Combining Statement of Cash Flows
Reclaimed
Water
Total
Nonmajor
Enterprise
Funds
Sewer
Cash received from customers
$
Net Cash Provided by
(Used for) Operating Activities
825,905
(495,649)
(330,277)
$
(21)
64,514
(1,492,665)
(124,298)
$
890,419
(1,988,314)
(454,575)
(1,552,449)
(1,552,470)
-
(1,200,000)
(1,200,000)
-
(1,200,000)
(1,200,000)
CASH FLOWS CAPITAL AND
FINANCING RELATED ACTIVITIES:
Transfers from/(to) other funds
Capital and Related Financing Activities
Investing Activities
Net Increase (Decrease) in
Cash and Cash Equivalents
21
32,706
32,727
21
32,706
32,727
-
(2,719,743)
(2,719,743)
-
3,232,588
3,232,588
Beginning of Year
End of Year
$
-
$
(248,099)
$
512,845
$
512,845
RECONCILIATION OF OPERATING
INCOME (LOSS) TO NET CASH PROVIDED BY
(USED FOR) OPERATING ACTIVITIES:
Operating loss
provided by (used for) operating activities:
(Increase) decrease in accounts receivable
(Increase) decrease in prepaid expenses
Increase (decrease) in accounts payable
Increase (decrease) in accrued salaries and benefits
Increase (decrease) in deposits payable
Increase (decrease) in due to other funds
309,684
Net Cash Provided by
(Used for) Operating Activities
$
112
$ (1,722,360)
156,766
$ (1,970,459)
466,450
(12,643)
3,930
1,555
(892)
(53,556)
(581)
6,802
6,924
-
(13,224)
3,930
8,357
6,032
(53,556)
(21)
$ (1,552,449)
$ (1,552,470)
INTERNAL SERVICE FUNDS
Equipment Replacement Fund - to account for the regular maintenance and replacement of the City’s capital
equipment and office equipment inventory and to accumulate funds necessary for equipment replacement.
113
City of Cerritos
Internal Service Funds
June 30, 2011
Equipment
Replacement
ASSETS
Current assets:
Interest receivables
15,369,792
27,867
Total Assets
15,397,659
LIABILITIES
Accounts payable
2,967
Total Liabilities
2,967
NET ASSETS
Unrestricted
15,394,692
Total Net Assets
$
114
15,394,692
City of Cerritos
Statement of Revenues, Expenses and Changes in Net Assets
Equipment
Replacement
OPERATING EXPENSES:
Administrative costs
272,247
272,247
OPERATING LOSS
(272,247)
NONOPERATING REVENUES:
Interest income
173,624
Total Nonoperating Revenues
173,624
CHANGE IN NET ASSETS
(98,623)
NET ASSETS:
Beginning of Year
15,493,315
End of Year
$
115
15,394,692
City of Cerritos
Statement of Cash Flows
Equipment
Replacement
$
(236,715)
(76,635)
(313,350)
181,735
Net Cash Provided by Investing Activities
181,735
Net Increase in Cash and Cash Equivalents
(131,615)
Beginning of Year
15,501,407
End of Year
$
15,369,792
RECONCILIATION OF OPERATING LOSS TO NET
CASH PROVIDED BY (USED FOR) OPERATING ACTIVITIES:
Operating loss
used for operating activities:
Decrease in accounts payable
$
(272,247)
(41,103)
Total Adjustments
(41,103)
Net Cash Provided by (Used for) Operating Activities
$
116
(313,350)
C&L
INDEPENDENT AUDITORS’ REPORT ON INTERNAL CONTROL OVER FINANCIAL
REPORTING AND ON COMPLIANCE AND OTHER MATTERS BASED ON AN
AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE
WITH GOVERNMENT AUDITING STANDARDS
Honorable Mayor and
City of Cerritos
We have audited the accompanying financial statements of the governmental activities, the businesstype activities, each major fund, and the aggregate remaining fund information of the City of Cerritos,
California (the “City”), as of and for the year ended June 30, 2011, which collectively comprise the
City’s basic financial statements, and have issued our report thereon dated December 1, 2011. We
conducted our audit in accordance with auditing standards generally accepted in the United States of
America and the standards applicable to financial audits contained in Government Auditing Standards,
issued by the Comptroller General of the United States.
Internal Control Over Financial Reporting
In planning and performing our audit, we considered the City’s internal control over financial
reporting as a basis for designing our auditing procedures for the purpose of expressing our opinions
on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of
the City’s internal control over financial reporting. Accordingly, we do not express an opinion on the
effectiveness of the City’s internal control over financial reporting.
A deficiency in internal control exists when the design or operation of a control does not allow
management or employees, in the normal course of performing their assigned functions, to prevent,
or detect and correct misstatements on a timely basis. A material weakness is a deficiency, or
combination of deficiencies, in internal control such that there is a reasonable possibility that a
material misstatement of the City’s financial statements will not be prevented, or detected and
corrected on a timely basis.
Our consideration of the internal control over financial reporting was for the limited purpose
described in the first paragraph of this section and was not designed to identify all deficiencies in
internal control over financial reporting that might be deficiencies, significant deficiencies, or material
weaknesses. We did not identify any deficiencies in internal control over financial reporting that we
consider to be material weakness, as defined above.
www.c-lcpa.com
Honorable Mayor and
City of Cerritos
Page 2
Compliance and Other Matters
As part of obtaining reasonable assurance about whether the City’s financial statements are free of
material misstatement, we performed tests of its compliance with certain provisions of laws,
regulations, contracts and grant agreements, noncompliance with which could have a direct and
material effect on the determination of financial statement amounts. However, providing an opinion
on compliance with those provisions was not an objective of our audit, and accordingly we do not
express such an opinion. The results of our tests disclosed no instance of noncompliance or other
matters that are required to be reported under Government Auditing Standards.
This report is intended solely for the information and use of management, the City Council, others
within the City, and federal awarding agencies and pass-through entities and is not intended to be
and should not be used by anyone other than these specified parties.
Irvine, California
December 1, 2011
118
STATISTICAL SECTION
(Unaudited)
This part of the City of Cerritos's comprehensive annual financial report presents detailed information as a context for
understanding what the information in the financial statements, note disclosures, and required supplementary
information says about the City's overall financial health.
Contents
Page
Financial Trends
120
These tables contain trend information to help the reader understand how the City's financial
performance and well-being have changed over time.
Revenue Capacity
132
These tables contain information to help the reader assess the City's most significant local
revenue source, the property tax.
Debt Capacity
138
These tables 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.
Demographic and Economic Information
144
These tables offer demographic and economic indicators to help the reader understand the
environment within which the City's financial activities take place.
Operating Information
146
These tables contain service and infrastructure data to help the reader understand how the
information in the City's financial report relates to the services the City provides and the
activities it performs.
Sources:
Unless otherwise noted, the information in these tables is derived from the
comprehensive annual financial reports for the relevant year.
119
City of Cerritos
Net Assets By Component
Last Nine Fiscal Years
(accrual basis of accounting)
Fiscal Year
2002-03
2003-04
2004-05
2005-06
$
83,888,493
$
121,366,767
$
128,354,981
$
124,591,591
Restricted For:
8,063,081
6,245,154
6,587,749
Street and sewer related purposes
Special revenue
-
-
-
7,143,179
-
Transportation related purposes
-
-
-
-
Assessment districts
-
-
-
-
Miscellaneous grants
-
-
-
-
Asset replacement
-
14,308,312
15,072,026
14,900,417
-
-
-
-
Debt Service
-
-
-
-
-
-
-
-
215,788,662
156,663,276
152,914,279
144,717,403
307,740,236
298,583,509
302,929,035
291,352,590
29,922,954
29,578,894
31,835,092
42,440,170
Unrestricted
20,818,339
19,195,242
18,232,852
15,685,283
50,741,293
48,774,136
50,067,944
58,125,453
113,811,447
150,945,661
160,190,073
167,031,761
8,063,081
6,245,154
6,587,749
7,143,179
Unrestricted
Total governmental activities net assets
Business-type Activities:
Total business-type activities net assets
Primary Government:
Restricted For:
Special revenue
Street and sewer related purposes
-
-
-
-
Transportation related purposes
-
-
-
-
Assessment districts
-
-
-
-
Miscellaneous grants
-
-
-
-
Asset replacement
-
14,308,312
15,072,026
14,900,417
-
-
-
-
236,607,001
175,858,518
171,147,131
160,402,686
Debt Service
Unrestricted
Total primary government net assets
$
358,481,529
$
347,357,645
$
352,996,979
$
349,478,043
The City has elected to show only nine years of data for this schedule coinciding with the implementation of GASB 34 in fiscal year 2002-2003.
Information prior to implementation of GASB 34 is not available.
Source: Finance Division, City of Cerritos
120
Fiscal Year
2006-07
$
2007-08
123,877,356
$
2008-09
112,701,038
$
2009-10
108,311,131
$
2010-11
129,318,648
$
128,288,812
6,663,515
-
-
-
-
6,498,583
6,271,895
4,423,142
1,473,481
-
-
1,368,331
1,065,555
1,254,083
-
-
77,532
126,594
105,662
-
-
239,106
484,163
492,474
-
13,595,796
28,582,731
24,966,400
25,275,197
-
-
14,000,000
-
-
10,441,444
-
-
-
-
16,598,679
-
-
-
-
17,012,352
156,184,426
143,862,339
158,317,863
127,557,614
123,689,932
300,321,093
307,329,660
299,543,601
288,426,820
297,504,700
28,761,072
30,454,814
41,912,421
40,406,258
44,962,820
13,011,620
9,099,926
2,164,728
(1,319,738)
(7,690,616)
41,772,692
39,554,740
44,077,149
39,086,520
37,272,204
152,638,428
143,155,852
150,223,552
169,724,906
173,251,632
6,663,515
-
-
-
1,473,481
-
6,498,583
6,271,895
4,423,142
-
-
1,368,331
1,065,555
1,254,083
-
-
77,532
126,594
105,662
-
-
239,106
484,163
492,474
-
13,595,796
28,582,731
24,966,400
25,275,197
-
-
14,000,000
-
-
10,441,444
16,598,679
17,012,352
169,196,046
$
342,093,785
152,962,265
$
346,884,400
160,482,591
$
343,620,750
126,237,876
$
327,513,340
121
115,999,316
$
334,776,904
City of Cerritos
Changes In Net Assets
Fiscal Year
Expenses:
Governmental activities:
GLegislative and administrative
LCommunity development
TPublic works
Water and power
PCommunity and safety services
DAdministrative services
ECerritos Center for the Performing Arts
HUnallocated infrastructure depreciation
Land transferred to developer
IInterest expense
2002-03
$
Total governmental activities expenses
Business-type activities:
Water
Reclaimed water
W
Electric utility
Sewer
Total business-type activities net assets
Total primary government expenses
Program revenues:
Governmental activities:
Charges for services:
Legislative and administrative
Public works
Water and power
Operating grants and contributions
9,612,757
6,411,921
23,421,916
18,281,998
14,664,165
14,526,215
870,960
16,784,520
2003-04
$
10,849,842
3,594,264
20,268,011
22,430,205
13,789,588
14,021,467
924,241
16,187,807
2004-05
$
12,317,585
4,696,912
19,420,947
18,769,565
13,570,397
12,661,796
913,887
15,952,869
2005-06
$
5,137,856
3,461,730
17,574,984
20,107,426
25,390,327
13,166,416
1,017,027
1,752,597
16,189,176
104,574,452
102,065,425
98,303,958
103,797,539
8,461,281
1,007,903
-
8,120,758
1,434,632
54,352
-
8,369,176
796,974
227,238
-
9,153,710
1,541,594
7,076,232
-
9,469,184
9,609,742
9,393,388
17,771,536
$
114,043,636
$
111,675,167
$
107,697,346
$
121,569,075
$
3,113
1,608,929
555,720
2,359,547
2,744,760
6,502,960
8,642,059
-
$
15,290
1,685,361
649,676
2,759,291
2,917,003
5,172,658
7,805,246
106,620
$
145
1,849,001
725,501
2,855,197
3,248,205
5,532,468
7,474,648
82,317
$
1,536
1,861,055
759,197
2,943,514
3,059,380
5,683,029
8,324,225
352,285
Total governmental activities program revenues
22,417,088
21,111,145
21,767,482
22,984,221
Charges for services:
Water
Reclaimed water
Electric utility
Sewer
Total business-type activities program revenues
5,796,613
580,307
341,898
6,718,818
6,199,207
484,908
253,637
6,937,752
6,855,422
748,555
2,479,163
10,083,140
7,832,449
540,922
5,171,744
36,978
13,582,093
Total primary government program revenues
Net revenue (expense):
Total primary government net expense
$
29,135,906
$
28,048,897
$
31,850,622
$
36,566,314
$
(82,157,364)
(2,750,366)
$
(80,954,280)
(2,671,990)
$
(76,536,476)
689,752
$
(80,813,318)
(4,189,443)
$
(84,907,730)
$
(83,626,270)
$
(75,846,724)
$
(85,002,761)
The City has elected to show only nine years of data for this schedule coinciding with the implementation of GASB 34 in
fiscal year 2002-2003.
Information prior to implementation of GASB 34 is not available.
122
2006-07
$
9,586,244
7,974,456
21,644,742
183,723
21,788,095
14,898,470
12,309,527
977,568
16,857,542
Fiscal Year
2008-09
2007-08
$
10,763,138
7,944,431
21,251,184
166,380
21,553,201
13,740,128
12,950,937
1,010,465
16,686,433
$
12,202,801
7,512,609
23,981,467
1,456,670
24,661,818
16,536,088
12,613,288
994,414
16,811,036
2009-10
$
24,016,676
9,634,162
17,574,871
503,095
23,219,777
12,431,539
10,795,353
1,058,317
16,114,428
2010-11
$
11,895,682
5,995,050
14,271,031
180,845
22,595,702
13,033,543
9,697,750
908,341
16,654,681
106,220,367
106,066,297
116,770,191
115,348,218
95,232,625
9,633,874
1,163,206
8,390,869
-
10,249,111
1,384,725
9,064,917
-
9,034,371
1,338,743
9,189,345
-
9,690,959
1,351,283
6,524,284
-
9,787,697
1,086,647
11,428,662
1,787,455
19,187,949
20,698,753
19,562,459
17,566,526
24,090,461
$
125,408,316
$
126,765,050
$
136,332,650
$
132,914,744
$
119,323,086
$
5,401
2,059,152
776,251
2,926,171
3,078,915
6,269,387
9,247,019
101,281
$
7,975
2,530,848
809,946
3,069,657
1,949,196
6,249,316
8,954,724
472,220
$
24,123
1,151,681
974,575
3,693,983
1,421,710
5,267,804
9,954,624
176,995
$
8,990
1,472,210
924,062
8,200
3,724,638
1,313,723
4,620,793
11,297,870
613,790
$
7,623
1,055,373
767,444
66,788
3,864,946
1,237,313
4,558,285
8,711,464
-
24,463,577
24,043,882
22,665,495
23,984,276
20,269,236
8,577,571
852,558
7,068,193
125,020
16,623,342
8,766,259
886,454
7,517,818
888,011
18,058,542
7,371,339
902,348
7,040,943
135,613
15,450,243
7,032,634
698,021
4,637,710
109,677
12,478,042
7,763,664
838,548
4,556,861
65,095
95,360
13,319,528
$
41,086,919
$
42,102,424
$
38,115,738
$
36,462,318
$
33,588,764
$
(81,756,790)
(2,564,607)
$
(82,022,415)
(2,640,211)
$
(94,104,696)
(4,112,216)
$
(91,363,942)
(5,088,484)
$
(74,963,389)
(10,770,933)
$
(84,321,397)
$
(84,662,626)
$
(98,216,912)
$
(96,452,426)
$
(85,734,322)
123
City of Cerritos
(Continued)
Fiscal Year
2002-03
2003-04
2004-05
2005-06
General revenues and other changes in net assets:
Taxes:
Sales taxes
$
Property taxes in lieu of sales taxes
26,279,631
$
26,540,867
$
27,288,347
$
26,136,953
27,469,285
27,036,204
28,931,093
32,938,305
Motor vehicle taxes
3,291,867
3,732,692
3,570,211
4,026,334
Franchise taxes
1,011,506
1,123,865
1,072,893
1,146,323
Transient occupancy taxes
294,792
312,177
423,239
443,467
Other taxes
188,127
284,405
249,160
272,498
19,600,776
12,685,570
17,236,176
18,353,462
588,745
175,006
104,209
24,664
(128,299)
(93,233)
Miscellaneous
Transfers
Total governmental activities
-
(133)
78,596,430
71,797,553
78,875,328
83,341,873
1,110,441
611,600
604,056
529,425
-
-
-
2,387,606
-
-
-
128,299
93,233
-
133
3,545,301
704,833
604,056
529,558
Gain (loss) on sale of assets
(81,045)
Miscellaneous
Transfers
Total business-type activities
Total primary government
$
82,141,731
$
72,502,386
$
79,479,384
$
$
(3,560,934)
$
(9,156,727)
$
2,338,852
$
83,871,431
Changes in net assets:
Total primary government
794,935
$
(2,765,999)
(1,967,157)
$
(11,123,884)
1,293,808
$
3,632,660
The City has elected to show only Nine years of data for this schedule coinciding with the implementation of GASB 34
in fiscal year 2002-2003. Information prior to implementation of GASB 34 is not available.
124
2,528,555
(3,659,885)
$
(1,131,330)
Fiscal Year
2006-07
$
2007-08
26,680,643
$
20,602,899
$
17,166,138
$
20,486,099
36,392,537
34,842,837
35,034,773
4,146,681
4,210,900
4,446,679
4,382,067
4,451,226
1,341,635
1,418,403
1,507,105
1,498,545
1,487,320
474,297
481,880
394,290
356,119
398,620
403,210
240,331
258,898
286,895
262,970
25,200,318
22,483,705
18,318,651
20,581,624
19,458,284
79,703
106,499
195,668
1,132,936
621,736
105,000
-
4,201,910
-
242,091
90,725,293
89,030,982
86,318,637
80,247,161
82,443,119
546,768
422,259
142,035
97,855
71,130
-
-
-
-
-
-
-
-
-
91,167,061
$
8,968,503
$
(2,122,839)
$
$
2010-11
35,005,279
441,768
$
25,083,985
2009-10
32,293,806
(105,000)
$
2008-09
6,845,664
(4,201,910)
-
(242,091)
422,259
(4,059,875)
97,855
(170,961)
89,453,241
$
82,258,762
$
80,345,016
$
7,008,567
$
(7,786,059)
$
(11,116,781)
$
(2,217,952)
$
-
-
4,790,615
(8,172,091)
$
(15,958,150)
(4,990,629)
$
(16,107,410)
125
82,272,158
7,479,730
(10,941,894)
$
(3,462,164)
City of Cerritos
Fund Balances of Governmental Funds
(modified accrual basis of accounting)
Fiscal Year
2002-03
2003-04
2004-05
2005-06
General fund:
Reserved
$
Unreserved
8,033,673
$
182,507,752
76,071,914
$
111,105,238
76,993,950
$
113,993,942
91,500,873
97,162,922
Nonspendable
-
-
-
-
Restricted
-
-
-
-
Committed
-
-
-
-
Assigned
-
-
-
-
Unassigned
-
-
-
-
Total general fund
$
190,541,425
$
187,177,152
$
190,987,892
$
188,663,795
$
4,020,515
$
3,865,603
$
3,967,607
$
4,999,544
All other governmental funds:
Reserved
Unreserved, reported in:
Special revenue funds
Debt service funds
Capital projects funds
8,063,081
6,245,154
6,587,749
7,143,179
(23,317,416)
(23,790,958)
(25,644,125)
(31,728,190)
20,171,114
30,200,811
26,022,565
21,623,936
Nonspendable
-
-
-
-
Restricted
-
-
-
-
Committed
-
-
-
-
Assigned
-
-
-
-
Unassigned
-
-
-
-
Total all other governmental funds
$
18,966,991
$
12,342,364
$
6,535,167
The City has elected to show only Nine years of data for this schedule coinciding with the implementation of GASB 34 in fiscal
year 2002-2003.
126
$
585,647
Fiscal Year
2006-07
$
2007-08
92,579,824
$
2008-09
98,193,022
$
2009-10
99,903,724
$
2010-11
102,622,950
$
-
101,236,061
81,992,326
81,541,328
80,477,124
-
-
-
-
-
90,135,195
-
-
-
-
-
-
-
-
-
-
-
-
-
-
14,150,052
-
-
-
-
71,056,060
$
193,815,885
$
180,185,348
$
181,445,052
$
183,100,074
$
175,341,307
$
4,095,975
$
2,837,221
$
5,851,972
$
1,953,330
$
-
$
6,663,515
8,183,552
7,849,641
6,275,361
-
(47,251,487)
(45,566,239)
(43,171,702)
(66,053,156)
-
34,522,333
21,762,988
19,212,994
23,322,838
-
-
-
-
-
11,881,487
-
-
-
-
35,084,512
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(75,915,744)
(1,969,664)
$
(12,782,478)
$
(10,257,095)
$
(34,501,627)
127
$
(28,949,745)
City of Cerritos
Changes in Fund Balances of Governmental Funds
(modified accrual basis of accounting)
Fiscal Years
2002-03
Revenues:
Taxes
Market value investment fluctuation
Franchises
Other revenue
Total revenues
$
Expenditures:
Current:
Public works
Water and power
Land transferred to developer
Capital outlay
Prefund other post employment benefits obligation
Debt service:
Principal retirement
Interest
Bond issuance costs
Total expenditures
Excess of revenues over
(under) expenditures
Other Financing Sources (Uses):
Transfers in
Transfers out
Issuance of debt
Payment to refunding bond escrow agent
Proceeds from sale of assets
Contribution from Cerritos Redevelopment Agency
Contribution to City of Cerritos
Total other financing sources (uses)
Net change in fund balances
Fund balances - July 1
Fund balances - June 30
Debt service as a percentage
of noncapital expenditures
54,231,835
1,582,962
780,388
18,862,717
12,253,101
10,648,407
1,011,506
949,829
100,320,745
2003-04
$
$
56,891,838
1,673,017
1,224,282
16,749,519
11,948,199
10,197,847
1,072,893
1,269,811
101,027,406
2005-06
$
58,539,846
1,844,753
1,207,626
17,847,889
14,104,013
10,333,249
1,146,324
748,401
105,772,101
8,575,389
4,033,261
17,727,961
15,989,974
10,457,027
12,130,813
17,259,976
-
10,333,065
3,316,869
17,492,649
18,074,542
10,691,994
12,326,532
8,581,890
-
11,657,197
4,122,251
18,056,952
17,877,074
10,520,783
10,966,179
8,661,850
-
4,098,818
4,607,205
19,659,561
18,740,162
20,349,051
10,331,228
15,495,350
-
2,855,000
15,021,364
2,212,463
106,263,228
4,200,000
16,404,229
101,421,770
4,725,000
16,099,412
102,686,698
5,105,000
16,341,796
114,728,171
(5,942,483)
(9,800,614)
(1,659,292)
(8,956,070)
54,542,346
(54,753,609)
121,426,395
(53,478,228)
67,736,904
12,234,072
(12,422,358)
(188,286)
10,558,209
(10,895,374)
(337,165)
19,901,653
(20,244,200)
1,025,000
682,453
61,794,421
(9,988,900)
(1,996,457)
(8,273,617)
147,713,995
$
54,173,653
1,620,309
1,154,385
12,260,022
11,102,756
9,549,672
1,123,865
636,494
91,621,156
2004-05
209,508,416
22.57%
209,508,416
$
199,519,516
22.19%
199,519,516
$
197,523,059
197,523,059
$
189,249,442
22.15%
The City has elected to show only Nine years of data for this schedule coinciding with the implementation of GASB 34 in fiscal year 2002-2003.
128
21.61%
2006-07
$
59,211,957
2,026,677
1,178,472
24,607,789
13,904,277
10,888,836
1,341,635
644,735
113,804,378
$
61,019,400
2,425,107
1,162,016
21,889,177
13,907,020
9,699,277
1,418,403
1,103,420
112,623,820
$
58,009,779
2,037,294
1,146,489
18,358,111
15,161,460
7,783,043
1,507,105
1,140,096
105,143,377
2009-10
$
52,651,959
1,913,968
1,103,441
19,768,319
16,614,010
7,090,018
1,504,852
1,848,075
102,494,642
2010-11
$
55,981,782
1,869,739
1,305,871
18,625,601
13,916,074
6,989,711
1,566,675
789,502
101,044,955
9,983,075
5,992,210
20,146,511
143,296
19,985,188
11,719,308
10,508,816
8,457,564
-
10,148,023
4,851,226
19,926,345
164,016
19,904,050
12,322,795
11,083,634
21,081,472
14,000,000
10,943,195
5,042,844
17,288,857
299,790
20,894,079
11,495,344
9,528,923
6,695,801
-
21,357,884
4,657,802
16,127,237
105,823
21,351,962
10,646,488
8,781,832
18,533,849
-
11,348,362
5,931,385
14,111,947
175,593
21,157,439
11,300,202
8,054,469
14,717,173
-
6,092,500
17,018,816
110,047,284
6,467,500
16,851,905
136,800,966
6,862,500
16,508,867
105,560,200
7,260,000
16,261,275
125,084,152
7,712,500
16,736,956
111,246,026
3,757,094
(24,177,146)
(416,823)
(22,589,510)
(10,201,071)
30,324,598
(30,494,913)
(170,315)
14,025,441
(14,291,646)
(266,205)
15,856,712
(11,654,802)
4,201,910
25,559,016
(25,559,016)
-
3,207,464
(2,965,373)
11,000,000
1,792,610
(1,792,610)
11,242,091
3,586,779
(24,443,351)
3,785,087
(22,589,510)
1,041,020
188,259,442
$
Fiscal Years
2008-09
2007-08
191,846,221
22.75%
191,846,221
$
167,402,870
20.15%
167,402,870
$
171,187,957
171,187,957
$
148,598,447
23.64%
22.08%
129
145,350,542
$
146,391,562
25.33%
City of Cerritos
Governmental Activities (1) Revenues by Sources
Last Ten Fiscal Years
Other
Licenses
Fiscal
Sales
Year
Tax
2001-02
$
24,381,406
Franchise
$
1,147,739
$
Other
Business
Building
and
Taxes
Licenses
Permits
Permits
24,552,345
$
722,909
$
600,465
$
1,275
2002-03
26,279,631
1,011,506
27,952,204
726,350
832,532
24,080
2003-04
26,540,866
1,123,865
27,632,787
761,667
856,912
1,730
2004-05
27,288,347
1,072,893
29,603,491
796,205
871,787
5,025
2005-06
26,095,745
1,146,324
32,444,100
839,060
1,000,338
5,355
2006-07
26,040,643
1,341,635
33,856,356
908,258
1,110,529
7,890
2007-08
25,291,910
1,418,403
35,727,490
963,775
1,455,121
6,211
2008-09
20,964,054
1,507,105
37,045,725
888,701
1,137,133
11,460
2009-10
17,166,108
1,504,852
35,485,851
882,434
1,024,714
6,820
2010-11
20,285,419
1,566,675
35,696,363
902,240
950,874
16,625
(1) Includes General, Special Revenue, Debt Service, and Capital Projects funds.
Source:
Finance Division, City of Cerritos
130
$
Fines
Investment
Charges
From
and
and Rental
For
Other
Forfeitures
Income
Services
Agencies
791,270
$
20,771,225
$
10,802,271
$
11,564,242
Other
$
668,114
Totals
$
96,003,261
780,388
18,862,717
10,648,407
12,253,101
949,829
100,320,745
1,154,385
12,260,022
9,549,672
11,102,756
636,494
91,621,156
1,224,282
16,749,519
10,197,847
11,948,199
1,269,811
101,027,406
1,207,626
17,847,889
10,333,249
14,104,013
748,402
105,772,101
1,178,472
24,607,789
8,862,159
13,904,277
1,986,370
113,804,378
1,162,016
21,889,177
9,699,277
13,907,020
1,103,420
112,623,820
1,146,489
18,358,111
7,783,043
15,161,460
1,140,096
105,143,377
1,103,441
19,768,319
7,090,018
16,614,010
1,848,075
102,494,642
1,305,871
18,625,600
6,989,712
13,810,180
895,396
101,044,955
131
City of Cerritos
Assessed Value of Taxable Property
Fiscal Year
Category
Residential
2001-2002
$
2002-2003
3,004,053,067
$
2003-2004
3,194,101,239
$
2004-2005
3,417,442,052
$
3,652,684,822
Commercial
734,796,343
779,666,425
941,597,239
974,952,423
Industrial
569,466,932
596,087,183
624,825,548
654,396,867
Government
-
-
-
-
Institutional
12,520,302
8,535,262
8,681,377
9,451,184
-
-
306
-
296
300
-
-
Recreational
-
366,228
4,922,132
5,014,027
Vacant land
39,367,468
27,410,710
12,789,464
9,366,646
SBE nonunitary
i
11,590,716
590 716
1 614 284
1,614,284
1 853 601
1,853,601
22,035,367
035 367
2,442,550
2,993,961
4,919,537
4,678,298
Unsecured
281,489,877
275,661,875
255,457,453
272,282,747
Exempt
(32,010,938)
(32,899,559)
(29,673,960)
(28,510,172)
Unknown
1,897,237
1,936,549
1,986,321
2,023,708
4,615,613,850
4,855,474,457
5,244,801,070
5,558,375,917
32,010,938
32,899,559
29,673,960
28,510,172
Irrigated
Miscellaneous
Possessory
interest
Subtotal
Add back
exempt
Grand Total
$
4,647,624,788
$
4,888,374,016
$
5,274,475,030
$
5,586,886,089
Total
Direct Rate
0.59331%
Source: HdL Coren & Cone
132
0.59209%
0.60187%
0.56813%
Fiscal Year
2005-2006
$
$
2006-2007
3,925,932,025
$
2007-2008
4,236,487,296
$
2008-2009
4,492,069,661
$
2009-2010
4,672,038,063
$
2010-2011
4,539,269,735
$
4,580,132,941
1,057,807,314
1,160,350,438
1,228,751,400
1,343,951,315
1,366,103,446
1,323,612,342
685,464,066
708,718,893
757,782,869
908,573,269
952,870,116
948,998,591
-
2,750,027
-
-
-
-
21,702,864
27,537,449
26,101,211
19,811,379
20,572,239
19,001,598
-
-
328
334
340
338
-
-
-
-
-
-
5,114,306
5,216,591
6,523,402
6,653,868
6,786,944
6,770,857
10,224,697
8,462,513
9,684,651
8,777,294
5,495,684
3,313,710
1 309 388
1,309,388
11,237,559
237 559
22,737,670
737 670
2 597 624
2,597,624
2 597 624
2,597,624
22,597,624
597 624
4,717,568
6,518,019
5,849,466
14,163,200
13,854,359
11,602,663
275,010,910
290,016,895
294,796,408
306,757,198
309,113,020
283,995,026
(29,083,529)
(29,016,454)
(30,799,948)
(28,844,386)
(39,947,438)
(32,985,082)
2,064,175
2,105,454
-
-
-
-
5,960,263,784
6,420,384,680
6,793,497,118
7,254,479,158
7,176,716,069
7,147,040,608
29,083,529
29,016,454
30,799,948
28,844,386
39,947,438
32,985,082
5,989,347,313
0.58997%
$
6,449,401,134
0.59562%
$
6,824,297,066
0.59608%
133
$
7,283,323,544
0.59547%
$
7,216,663,507
0.48569%
$
7,180,025,690
0.48117%
City of Cerritos
Direct and Overlapping Property Tax Rates
(Per $100 of Taxable Value)
Los
Sanitation/
Fiscal
Basic Tax
Angeles
School
Flood
Water
Year
Levy
County
District
Control
District
Totals
2002
1.0000
.0011
.0250
.0005
.0077
1.0343
2003
1.0000
.0010
.0278
.0009
.0067
1.0364
2004
1.0000
.0010
.0249
.0005
.0067
1.0331
2005
1.0000
.0010
.0457
.0002
.0058
1.0527
2006
1.0000
.0010
.0517
.0001
.0052
1.0580
2007
1.0000
.0010
.0482
.0001
.0047
1.0540
2008
1.0000
.0000
.0351
.0000
.0045
1.0396
2009
1.0000
.0000
.0338
.0000
.0043
1.0381
2010
1.0000
1 0000
.0000
0000
.0455
0455
.0000
0000
.0043
0043
1.0498
1 0498
2011
1.0000
.0000
.0560
.0000
.0037
1.0597
Source: HdL Coren & Cone, Los Angeles County Auditor-Controller
134
City of Cerritos
Ten Largest Secured Taxpayers
Current Year and Nine Years Ago
2010-11
2001-02
Percentage
Percentage
Property
Property
Assessed
of
Assessed
of
Owner
Description
Valuations
Total (1)
Valuations
Total (1)
Macerich Cerritos LLC
Commercial
City of Cerritos
$
254,693,952
3.69%
Commercial
159,587,132
Walton CWCA O'Donnell Cerritos
Industrial
Cerritos Office Center I LLC
-
0.00%
2.31%
-
0.00%
131,817,639
1.91%
-
0.00%
Commercial
91,519,076
1.33%
-
0.00%
TA Western LLC
Industrial
60,042,428
0.87%
58,837,755
1.35%
Cerritos Best Plaza, LLC
Commercial
55,000,000
0.80%
-
0.00%
Cerritos Towne Center LLC
Commercial
47,358,643
0.69%
-
0.00%
Cerritos Corporate Tower LLP
Commercial
37,060,000
0.54%
-
0.00%
Cerritos Promenade LLC
Commercial
36,800,000
0.53%
-
0.00%
Realty Associates Fund VIII LP
Industrial
32,023,923
0.46%
-
0.00%
Macerich Cerritos
Commercial
-
0.00%
96,431,596
2.21%
Calwest Industries Properties
Industrial
-
0.00%
66,853,896
1.53%
Commonwealth Cousins I LLC
Office Building
-
0.00%
61,942,672
1.42%
Equity Office Properties Trust
Office Building
-
0.00%
50,518,523
1.16%
Krausz Enterprises
Office Building
-
0.00%
50,082,555
1.15%
Vestar Development Company
Office Building
-
0.00%
43,543,832
1.00%
TIAA Realty Inc.
Warehouse/Distributions
-
0.00%
24,797,023
0.57%
Cerritos Office Center V, LLC
Office Building
-
0.00%
22,316,829
0.51%
CWIP Corp
Industrial
-
0.00%
21,151,169
0.48%
$
905,902,793
13.14%
$
496,475,850
11.37%
$
6,896,030,664
$
4,366,134,911
(1) 2010-11 and 2001-02 total secured assessed valuation is
Source: HdL Coren & Cone
135
$
City of Cerritos
Property Tax Levies and Collections
Property
Fiscal
Tax
Year
Collections
2001-02
$
22,400,298
2002-03
25,875,620
2003-04
25,106,032
2004-05
26,620,835
2005-06
29,163,729
2006-07
29,860,652
2007-08
32,454,062
2008-09
33,711,139
2009-10
32,144,708
2010-11
32,346,242
Note: This table represents tax increment revenues received by the Cerritos Redevelopment Agency,
representing the increase in valuation of the redevelopment project areas over the base year,
1969-70. The City of Cerritos does not levy a direct property tax.
Source:
136
137
City of Cerritos
Ratios of Outstanding Debt by Type
Los
Los
Los
Cerritos
Coyotes
Cerritos
Redevelopment
Redevelopment
Redevelopment
Project
Project
Project
Fiscal
Revenue
Revenue
Note
Bond
Bond
Charge on
Year
Bonds
Bonds
Payable
Premium
Discount
Refunding
2002-03
$
50,380,000
$
143,380,000
$
Add (Less) Deferred Amounts
Deferred
-
$
6,440,668
$
(1,294,336)
$
(2,835,691)
2003-04
48,900,000
140,660,000
-
6,133,969
(1,232,700)
(2,693,906)
2004-05
47,240,000
137,595,000
-
5,827,270
(1,171,064)
(2,552,121)
2005-06
48,978,750
144,856,250
1,025,000
5,520,571
(1,109,428)
(2,410,336)
2006-07
46,883,125
140,859,375
1,025,000
5,213,872
(1,047,792)
(2,268,551)
2007-08
44,651,250
136,623,750
1,025,000
4,907,173
(986,156)
(2,126,766)
2008-09
42,278,125
132,134,375
1,025,000
4,600,474
(924,520)
(1,984,981)
2009-10
39,763,125
127,389,375
1,025,000
4,293,775
(862,885)
(1,843,196)
2010-11
37,086,250
122,353,750
1,025,000
3,987,076
(801,256)
(1,701,411)
Note: Details regarding the outstanding debt can be found
in the notes to basic financial statements.
(a) Not available.
The City has elected to show only nine years of data for this
schedule coinciding with the implementation of GASB 34 in
fiscal year 2002-2003.
138
Total
% of
Primary
Government
$
Total Debt
Population
196,070,771
51,716
191,767,363
Personal
per Capita
$
Income
3,791
12.054%
51,748
3,706
11.169%
186,939,085
51,792
3,609
10.485%
196,860,807
51,944
3,790
10.144%
190,665,029
52,020
3,665
9.210%
184,094,395
52,096
3,534
8.361%
177,128,473
52,172
3,395
8.308%
169,765,194
52,249
3,249
(a)
161,949,409
49,041
3,302
(a)
139
City of Cerritos
Schedule of Direct and Overlapping Bonded Debt
June 30, 2011
Percent
*Metropolitan Water District
Debt Balance
Applicable
City's Share
Outstanding
to City
of Debt
$
107,259,876
Cerritos CC DS 2004 Series 2004A
0.471 %
$
505,614
2,930,000
20.557 %
602,320
Cerritos CC DS 2005 Refunding Bonds
22,358,702
20.557 %
4,596,280
Cerritos CCD DS 2004 Series 2006
30,645,000
20.557 %
6,299,694
Cerritos CCD DS 2004 Series 2009C
53,635,000
20.557 %
11,025,750
ABC USD 2003 Refunding Bond Series A
15,530,000
60.075 %
9,329,595
ABC Unified SD DS 1997 Series B
29,626,700
60.075 %
17,798,139
ABC Unified SD DS 2010 Refunding Bonds
10,670,000
60.075 %
6,409,966
Total Overlapping Debt:
$
2010/11 Assessed Valuation: $4,003,285,201 After Deducting $3,176,740,489 Redevelopment Increment.
Debt To Assessed Valuation Ratios:
Direct Debt
0.00 %
Overlapping Debt
1.41 %
Total Debt
1.41 %
Note: Prepared for the City of Cerritos by HdL Coren & Cone.
140
56,567,358
141
City of Cerritos
Legal Debt Margin Information
Fiscal Year
2002-03
Debt Limit
$
738,016,496
Total net debt applicable to limit
Legal debt margin
2003-04
$
795,621,570
$
738,016,496
2004-05
$
842,826,108
$
795,621,570
2005-06
$
$
842,826,108
901,944,542
-
$
901,944,542
Total net debt applicable to the limit as a
percent of debt limit
0.00%
0.00%
0.00%
Legal Debt Margin Calculation for Fiscal Year 2010-2011:
Assessed value
Add back: exempt real property
Total assessed value
Debt limit (15% of total assessed value)
Debt applicable to limit
Legal debt margin
Note:
Section 43605 of the Government Code of the State of California limits the amount of indebtedness for public
improvements to 15% of the assessed valuation of all real and personal property of the City.
The City has elected to show only nine years of data for this schedule coinciding with the implementation of GASB 34 in fiscal year
year 2002-2003.
Source: HdL Coren & Cone, Los Angeles County Assessors Office
142
0.00%
Fiscal Year
2006-07
$
2007-08
971,890,907
$
$
971,890,907
0.00%
2008-09
1,028,776,348
$
$
1,028,776,348
0.00%
2009-10
1,098,825,713
$
1,089,326,156
$
1,098,825,713
2010-11
$
$
1,089,326,156
0.00%
1,084,570,960
-
$
0.00%
1,084,570,960
0.00%
$
7,180,025,690
50,447,376
$
7,230,473,066
$
1,084,570,960
-
$
143
1,084,570,960
City of Cerritos
Demographic and Economic Statistics
Per Capita
Personal
Fiscal
Year
Population (1)
City
Income
Personal
Unemployment
(in thousands)
Income (2) *
Rate (3)
2002-03
51,716
31,452
1,626,572
3.50%
2003-04
51,748
33,179
1,716,947
3.30%
2004-05
51,792
34,426
1,782,991
2.60%
2005-06
51,944
37,362
1,940,732
2.50%
2006-07
52,020
39,794
2,070,084
2.60%
2007-08
52,096
42,265
2,201,837
3.80%
2008-09
52,172
40,867
2,132,113
6.20%
2009-10
52,249
(a)
(a)
6.70%
2010-11
49,041
(a)
(a)
6.80%
*Based on Los Angeles County personal income data
(a) Not Available
The City has elected to show only nine years of data for this schedule coinciding with the
implementation of GASB 34 in fiscal year 2002-2003.
Sources:
(1) City of Cerritos
(2) Bureau of Economic Analysis
(3) State of California, Labor Market Information, Data Library
144
City of Cerritos
Principal Employers
Current Year and Nine Years Ago
2011
2002**
Percent of
Employer
Percent of
Number of
Total
Number of
Total
Employees
Employment*
Employees
Employment
ABC Unified School District
1,899
6.66%
United Parcel Service
1,761
6.18%
Cingular
994
3.49%
Southern Wine & Spirits of Southern California
979
3.44%
City of Cerritos
667
2.34%
College Hospital, Inc
523
1.84%
S&J Chevrolet
415
1.46%
Nordstrom Inc
364
1.28%
Deltal Dental of California
353
1.24%
Norm Reeves Honda of Cerritos
286
1.00%
8,241
28.93%
Total
*Based upon California Employment Development Department data of 28,500 total employment of all employers located
within City limits.
**Information not available
Source: Gateway Cities Council of Governments
145
City of Cerritos
Full-Time and Part-Time City Employees
By Function
Fiscal Year
Department
2002-03
2003-04
2004-05
2005-06
2006-07
2007-08
2008-09
2009-10
10
8
9
9
9
9
9
9
9
20
19
20
20
21
20
20
20
20
137
138
128
130
113
114
111
96
90
-
-
-
-
19
19
18
17
17
Public Works
Water and Power
2010-11
Community and cultural services
176
177
237
239
251
255
292
298
296
142
134
146
147
148
155
155
153
150
173
173
222
221
203
201
190
200
200
658
649
762
766
764
773
795
793
782
Full-Time employees
250
248
241
241
241
241
235
239
230
Part-Time employees
408
401
521
525
523
532
560
554
552
658
649
762
766
764
773
795
793
782
Total
Total
The City has elected to show only nine years of data for this schedule coinciding with the implementation
of GASB 34 in fiscal year 2002-2003.
146
City of Cerritos
Operating Indicators By Function
Fiscal Year
Function
2002-03
2003-04
2004-05
2005-06
2006-07
2007-08
2008-09
2009-10
2010-11
Public Works
Maintenance:
Graffiti removal (average incidence)
7,900
7,900
8,000
8,000
7,800
8,000
7,800
7,800
7,000
Streetsweeping miles
7,100
7,100
7,100
7,100
7,100
7,100
7,100
7,100
7,100
Trees maintained
28,000
28,000
28,000
28,000
28,000
29,450
29,450
29,500
28,500
Trees trimmed
12,000
12,000
12,000
12,000
11,500
12,000
12,000
12,000
4,000
15,060
15,622
15,636
15,647
15,647
15,482
15,159
15,668
15,668
8.68
9.02
8.15
8.18
8.80
10.13
9.75
8.57
8.16
2,272
2,272
2,800
2,272
2,104
2,128
2,038
2,039
2,076
Number of sworn officers
64
58
59
58
54
56
59
60
63
Community Service officers (non-sworn)
25
5
17
17
16
16
14
19
17
18,536
18,680
17,945
17,447
17,286
16,931
16,830
16,745
14,738
6,765
6,672
6,321
5,650
5,991
5,946
5,843
5,511
4,900
Moving citations
8,287
7,622
6,680
6,740
5,615
4,920
6,395
5,868
6,376
Parking citations
1,259
719
722
936
825
1,152
1,116
1,089
1,923
51,423
Water and Power
Water:
Number of customer accounts
Average daily consumption (millions of gallons)
Water samples taken (annual)
Police (1):
Calls dispatched
Crime reports
Culture and Recreation:
Leisure classes attendance
56,786
53,023
53,520
58,346
60,947
47,135
48,360
53,360
145,799
150,676
169,635
177,712
152,561
121,777
99,119
101,237
91,813
Picnic shelter attendance
54,096
65,795
59,267
56,091
61,658
44,716
53,880
57,903
77,475
Swim lessons attendance
118,504
133,477
131,644
181,996
298,131
288,504
292,674
284,994
265,800
58,217
62,082
54,549
51,009
55,587
55,021
51,594
48,784
49,182
8,876
16,528
19,558
20,954
16,097
16,027
11,974
12,550
13,158
1,173,171
1,057,044
1,089,527
1,172,500
1,173,000
1,042,445
1,064,875
1,128,990
1,066,492
Indoor park reservation attendance
Recreational swim attendance
Volunteer hours
Library:
Number of patrons
(1) Services are contracted with the County of Los Angeles
The City has elected to show only nine years of data for this schedule coinciding with the implementation of
GASB 34 in fiscal year 2002-2003.
147
City of Cerritos
Capital Assets By Function
Fiscal Year
Function
2002-03
2003-04
2004-05
2005-06
2006-07
2007-08
2008-09
2009-10
2010-11
Public Works
Sewers:
Miles of sanitary sewers
Sewer lines (miles)
124
124
124
124
124
124
124
124
124
109.18
109.32
109.32
109.32
109.32
109.32
109.32
109.32
109.32
136.33
Streets and Highways:
Streets (miles)
136.33
136.33
136.33
136.33
136.33
136.33
136.33
136.33
Sidewalks (miles)
242.16
242.16
242.16
242.16
242.16
242.16
242.16
242.16
242.16
Curb & gutter (miles)
255.75
255.75
255.75
255.75
255.75
255.75
255.75
255.75
255.75
87
87
89
89
90
90
90
90
90
Traffic signals (intersections)
Number of Sheriff Stations
1
Number of parks
Number of swimming pool
1
1
1
1
1
1
1
1
24
24
24
24
24
24
24
24
24
2
2
2
2
2
2
2
2
2
Number of libraries
1
1
1
1
1
1
1
1
1
Number of volumes
224,822
238,243
242,167
238,860
241,942
241,607
247,405
258,349
245,942
The City has elected to show only nine years of data for this schedule coinciding with the
implementation of GASB 34 in fiscal year 2002-2003.
148

Untitled - City of Cerritos

Transcription

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