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Home My WebLink AboutRDA Packet 1997/03/11 MEMORANDUM March 4, 1997 TO: Mayor Shirley Horton ~ VIA: John D. Goss, City Manager JC4 ~ '\ ~ FROM: Chris Salomone, Director of Commu De~opment C - I SUBJECT: Special Joint Redevelopment Agency/Council Meeting - March 11, 1997 Staff requests you call a special joint meeting of the Redevelopment Agency/Council for March 11, 1997 to discuss, deliberate and act upon the following item: . REPORT ON AUDITED FINANCIAL STATEMENTS FOR FISCAL YEAR ENDED JUNE 3D, 1996 By signing below you will authorize calling the meeting. I hereby call a special joint meeting of the Redevelopment Agency/Council for March 11, 1997 Sh;~~ [(md) M,IHOMEICOMMDEVISTAFFHEPIO2-11-97\SPMTG.MEM {MaIO" 4. 1997 (11,O2am» Notice is hereby given that the Chair of the Redevelopment Agency has called and will convene a special joint meeting of the Redevelopment Agency/Council, Tuesday, March II, 1997 at 6:00 p.m., immediately following the regular City Council meeting, in Council Chambers, located in the Public Services Building, 276 Fourth Avenue, Chula Vista, California to consider, deliberate and act upon the following: ". declare unrier """~,+,, ~f Mr;"rv that I am emplovei b t'" " . '° 'n the .J¿. It. ~ Com~unt.-c-"¡", ".C~dthatlleBt ~i', J. this Azer. . (" ."., ,- r 51 tile htdey Honon, Chalf PublicServceo:.;,:c, ,', .'-,tli."llon RAU.5:t1/Q1 SIGNED:zJ:¡",u'd JL....,A.,Jkr " Tuesday, March, 91 Council Chambers 6:00 p.m. Public Services Building (immediately following the City Council meeting) Special Joint Meetine of the Redevelopment AeencvlCouncil of the Citv of Chula Vista CALL TO ORDER L ROLL CALL: Agency/Council Members Moot -, Padilla_, Rindone -' Salas -' and Chair/Mayor Honon- CONSENT CALENDAR ( Items 2 through 3 ) (Will be voted on immediately following the Council Consent Calendar during the City Council meeting) The staff recommendations regarding the following üem listed under the Consent Calendar will be enacted by the Agency/Council by one motion without discussion unless an Agency/Councü member, a member of the public or City staff requests that the üem be pulled for discussion. If you wish to speak on one of these üems, please fill out a "Request to Speak Form" available in the lobby and submU it to the Secretary of the Redevelopment Agency or the City Clerk prior to the meeting. Items pulled from the Consent Calendar will be discussed after Action Items. Items pulled by the public will be the first items of business. 2. APPROVAL OF MINUTES: February 4, 1997 (Regular meeting); February 11, 1997 (Special meeting) 3. REPORT: AUDITED FINANCIAL STATEMENTS FOR FISCAL YEAR ENDED JUNE 30, 1996--Presented for Council/Agency information and acceptance are the Audited Financial Statements for the fiscal year ended June 30, 1996, as prepared by the independent audit firm of Moreland & Associates. Both the City's and the Agency's Annual Financial Reports received unqualified opinions from the independent audit firm. Staff recommends the Council and Agency accept the Fiscal Year 1995-96 Financial Statements. .. . END OF CONSENT CALENDAR" . ADJOURNMENT TO CITY COUNCIL MEETING At this time, the Redevelopment Agency will ndjoum to the Council meeting. ............. - Agenda -2- March 11, 1997 ORAL COMMUNICATIONS This is an opportunity for the general public to address the Redevelopment Agency on any subject maJter within the Agency's jurisdictWn that is not an item on this agenda. (State law, however, generally prohibits the Redevelopment Agency from taking lU:tWn on any issues not included On the posted agenda.) If you wish to address the Agency on such a subject, please complete the" Request to Speok Under Oral Communications Form" available in the lobby and submit it to the Secretary to the Redevelopment Agency or City Clerk prior to the meeting. Those who wish to speok, please give your name and address for record purposes and follow up lU:tion. ITEMS PULLED FROM THE CONSENT CALENDER This is the time the Redevelopment Agency will discuss items which have been removed from the Consent Calendar. Agenda items pulled at the request of the public will be considered prior to those pulled by Agency/Council Members. OTHER BUSINESS 4. DIRECTOR'S/CITY MANAGER'S REPORTfS) 5. CHAIR'SIMAYOR'S REPORT(s) 6. AGENCY/COUNCIL MEMBER COMMENTS ADJOURNMENT The meeting will adjourn to the Regular Redevelopment Agency Meeting on March 18, 1997 at 6:00 p.m., immediately following the City Council meeting, in the City Council Chambers. [M:\HOMEICOMMDEVIAGENDASIO3- t 1-97 .AGD] "I dcciote t:n"ot cc~-i':' 0: --:i'T/ thct I am emplovo:J by 'c' c 'n the Comm~n't.! Dc '- -----¡ ': c1 that I postod this Azenr':!;':: ..:",rd at the Public Service" ~:~';c:. , . :: - ~, eel Hell on DATF3-1-'í 1:,IGì;E~~~ .. .......---- ï i' - .. MINUTES OF A REGULAR MEETING OF THE REDEVELOPMENT AGENCY OF THE CITY OF CHULA VISTA Tuesday, February 4, 1997 Council Chambers 4:06 p.m. Public SelVices Building CALL TO ORDER 1. ROLL CALL: PRESENT: Agency/Councilmembers John S. Moot, Jerry R. Rindone, Mary Salas, and Chair/Mayor Shirley A. Horton. ABSENT: Agency/Councilmember Stephen C. Padilla ALSO PRESENT: John Goss, Director/City Manager; John M. Kaheny, Legal Counsel/City Attorney; Beverly A. Authelet, City Clerk; and Patricia Schwenke, Deputy City Clerk. CONSENT CALENDAR (Item pulled: None) THE CONSENT CALENDAR OFFERED BY AGENCY /COUNCll.MEMBER RINDONE, reading of the text was waived, titles read, passed, and approved 4-0-1 with Padilla absent. 2. APPROVAL OF MINUTES: January 21, 1997 3. RESOLUTION 1528 ADOPfING NEGATIVE DECLARATION IS-97-06 AND APPROVING AN OWNERrrENANT PARTICIPATION AGREEMENT WITH MARINA A. PICCIONI AND KENTUCKY FRIED CmCKEN OF CALIFORNIA, INC. FOR THE CONSTRUCTION OF A BUILDING AT 1305 THIRD A VENUE-Kentucky Fried Chicken is proposing to lease the site, demolish the existing building and construct a new restaurant. Staff recommends approval of the resolution subject to conditions listed in tbe agreement. (Community Development Director) Continued from the meeting of 1/21/97. * * * END OF CONSENT CALENDAR * * * ORAL COMMUNICATIONS None. ITEMS PULLED FROM THE CONSENT CALENDAR None. OTHER BUSINESS 4. DIRECTOR'S/CITY MANAGER'S REPORT(S): None. d- - ( Minutes February 4, 1997 Page 2 5. CHAIR' SIMA YOR'S REPORT(S): None. 6. AGENCY/COUNCILMEMBER COMMENTS: None. ADJOURNMENT The meeting adjourned at 4:07 p.m. Respectfully submitted, BEVERLY A. AUTHELET, CMC/AAE, City Clerk by: Patricia Schwenke, Deputy City Clerk c::;-~ MINUTES OF A SPECIAL MEETING OF THE REDEVELOPMENT AGENCY OF THE CITY OF CHULA VISTA Tuesday, February II, 1997 Council Chambers 6:27 p.m. Public Services Building CALL TO ORDER I. ROLL CALL: PRESENT: Agency/Councilmembers John S. Moot, Jerry R. Rindone, Mary Salas, and Chair/Mayor Shirley A. Horton ABSENT: Agency/Councilmember Stephen C. Padilla ALSO PRESENT: John Goss, Director/City Manager; John M. Kaheny. Legal Counsel/City Attorney; Beverly A. Authelet, City Clerk; and Patricia Schwenke, Deputy City Clerk. CONSENT CALENDAR (Item pulled: None) THE CONSENT CALENDAR WAS OFFERED BY AGENCY/COUNCILMEMBER RINDONE, reading of the text was waived, title read, passed, and approved 4-0-1 with Padilla absent. 2. RESOLUTION 1530 AUTHORIZING STAFF TO FILE A PETITION WITH THE SAN DIEGO REGIONAL WATER QUALITY CONTROL BOARD (RWQCB) FOR THE REMOVAL OF BENEFICIAL WATER USE DESIGNATIONS WEST OF 1-5 AND AUTHORIZING PARTICIPATION IN THE FUNDING OF A CONSULTANT FOR SUCH PURPOSES UP TO $35,000--Rohr is requesting assistance and participation of the City and the Port District to have the beneficial use designation removed. City participation would involvo staff time, designation of the City as the primary petitioner and sharing of consultant costs. Staff recommends approval of the resolution. (Community Development Director) * * * END OF CONSENT CALENDAR * * * ORAL COMMUNICATIONS None. ITEMS PULLED FROM THE CONSENT CALENDER None. OTHER BUSINESS 3. DIRECTOR'S/CITY MANAGER'S REPORT($): None. 4. CHAIR'S/MAYOR'S REPORTCS): None. ~-3 "I T" .. - Minutes Fehruary II, 1997 Page 2 5. AGENCY/COUNCILMEMBER COMMENTS: None. ADJOURNMENT The meeting adjourned at 6:28 p.m. Respectfully submitted, BEVERLY A. AUTHELET, CMC/AAE, City Clerk by: Patricia Schwenke, Deputy City Clerk ;;2.-1 JOINT COUNCIL/REDEVELOPMENT AGENCY AGENDA STATEMENT Item ..3 Meeting Date March !~.1997 ITEM TITLE: Audited Financial statements for Fiscal Year ended June 30, 1996 SUBMITTED BY: Director of Financ~ REVIEWED BY: City Manager~ (4/5ths Vote: Yes---No~) Presented for Council/Ageninformation and acceptance are the Audited Financial Statements for the fiscal year ended June 30, 1996, as prepared by the independent audit firm of Moreland & Associates. Both the city's and the Agency's Annual Financial Reports received unqualified opinions from the independent audit firm. RECOKKENDATION: That Council and the Agency accept the fiscal year 1995-96 Financial Statements. BOARDS/COMMISSIONS RECOMMENDATION: Not Applicable. DISCUSSION: Pursuant to the City Charter Section 1017, an annual audit is performed of the City's financial records by an independent accounting firm. The firm of Moreland & Associates has examined the general purpose financial statements of the City of Chula vista and the Redevelopment Agency, and issued their opinion that those statements "present fairly, in all material respects, the financial position of the City and Agency at June 30, 1996, and the results of operations for the year then ended in conformity with generally accepted accounting principles." In order to form a basis for their opinion, Moreland & Associates evaluated the internal control procedures of the City and found no conditions worthy of corrective recommendations to Council. This is a marked improvement over the previous year when there were several recommendations which Finance Department staff worked diligently to impl~ment. Although these reports are being presented more than six months earlier than the FY 1993-94 reports and almost two months earlier than last year's reports, staff recognizes that there is still a need for significant improvement in the speed with which they are produced in order to improve their usefulness. Please be assured that staff will continue to work with the independent auditors to streamline the year-end process, improve the financial statements, and still present them in a more timely manner. -3 - ( Page 2, Item .3 Meeting Date ~1!97 The accounting firm also produced a Single Audit Report as required by the Federal Government for grant recipients. This report is available at your request. The Single Audit Report includes a summary of the city's federal grants, primarily community Development Block Grants and statements of compliance with federal grant regulations. Again, the auditors found no significant incidences of non-compliance during this audit period, which is a marked improvement over previous years. A representative from Moreland & Associates is available to answer any questions you may have. FISCAL IMPACT: There is no fiscal impact to the city or Agency from this action. The contract for the audit services totaled $39,663 for the year reported. ...;J-~ 1201 DOVE STREET, SUITE 680 M oreland &~ NEWPORT 8EACH. CALIFORNIA 92660 (714) 221-0025 CERnRED PUBLIC ACCOUNTANTS 570 RANCHEROS DRIVE, SUITE 260 SAN MARCOS, CA 92069 (619) 752-3390 November 8, 1996 The Honorable City Council of the City of Chula Vista We have audited the general purpose financial statements of the City of Chula Vista, California for the year ended June 30, 1996, and have issued our report thereon dated November 8, 1996. Under generally accepted auditing standards, we are providing you the attached information related to our audit. Our responsibility under generally accepted auditing standards is to plan and perform our audit to obtain reasonable, but not absolute, assurance that the financial statements are free of material misstatement and are fairly presented in accordance with generally accepted accounting principles. Because of the concept of reasonable assurance and because we did not perform a detailed examination of all transactions, there is a risk that material errors, irregularities, or illegal acts, including fraud and defalcations, may exist and not be detected by us. In addition, we considered the internal control structure of the City of Chula Vista. Such considerations were solely for the purpose of determining our audit procedures and not to provide any assurance concerning such internal control structure. Significant Accounting Policies The significant accounting policies of the City are described in note 1 to the general purpose financial statements. No new accounting policies were adopted and the application of existing policies was not changed during the year. We noted no significant, unusual transactions during the year, or transactions for which there is a lack of authoritative guidance or consensus. Management Judgments and Accounting Estimates Accounting estimates are an integral part of the financial statements prepared by management and are based upon management's current judgments. Those judgments are normally based on knowledge and experience about past and current events and assumptions about future events. The judgments and estimates which may significantly effect the City's general purpose financial statements include recording a liability for general liability and workers' compensation claims. -.8-3 The Honorable City Council of the City of Chula Vista November 8, 1996 Page 2 During our audit of the general purpose financial statements, we have performed procedures to determine the reasonableness of the estimates used by management. These procedures included but were not limited to inquiries of the City Attorney and Risk Manager. Based on these other procedures performed, we were able to conclude that the liability recorded by management was reasonable. Significant Audit Adjustments As a result of our audit related testwork, we proposed several corrections of the financial statements that, in our judgment, either individually or in the aggregate, had a significant effect on the City's financial reporting process. Other Information in Documents Containing Audited Financial Statements Our responsibility for other information in documents containing the City's general purpose financial statements and our report thereon does not extend beyond financial information identified in our report, and we have no obligation to perform any procedures to corroborate other information contained in these documents. Disagreements With Management There were no disagreements with management on financial accounting and reporting matters that, if not satisfactorily resolved, would have caused a modification to our report on the City's 1996 financial statements. Consultation With Other Accountants We are not aware of any instances where management has consulted with or obtained opinions, written or oral, from other independent accountants during the past year that were subject to the requirements of Statement on Auditing Standards No. 50, Reports on the Application of Accounting Principles. Major Issues Discussed With Management Prior to Retention We generally discuss a variety of matters, including the application of accounting principles and auditing standards, with management each year prior to retention as the City's auditors. These discussions occurred in the normal course of our professional relationship. This information is intended solely for the use of the City Council, and should not be used for any other purpose. However, we understand that this document may be public information. /J1. Kd ~,l ç dNOc{d"S ..3-1 1201 DOVE STREET. SUITE 68C M oreland &~ NEWPORT BEACH. CALIFORNIA 92660 (714) 221-0025 CERTIFIED PUBLIC ACCOUNTANTS 570 RANCHEROS DRIVE, SUITE 260 SAN MARCOS, COMMUNITY DEVELOPMENT (619) 752-3390 8 FEB 2 0 I99T November 8, 1996 -- To the City Council of the City of Chula Vista, California Independent Accountants' Report on Agreed-Upon Procedures AppJied to Appropriations Limit Worksheets We have applied the procedures enumerated below to the accompanying Appropriations Limit worksheet No.6 (or other alternative computation) of the City of Chula Vista, California for the year ended June 30, 1996. These procedures, which were agreed to by the City of Chula Vista, CaJifornia and the League of California Cities (as presented in the League publication entitled Article XIIIB Appropriations Limitation Uniform Guidelines) were performed solely to assist the City of Chula Vista, California in meeting the requirements of Section 1.5 of Article XIIIB of the California Constitution. This engagement to apply agreed-upon procedures was performed in accordance with standards established by the American Institute of Certified Public Accountants. The sufficiency of the procedures is solely the responsibility of the specified users of the report. Consequently, we make no representation regarding the sufficiency of the procedures described below either for the purpose for which this report has been requested or for any other purpose. The procedures performed and our findings were as follows: 1. We obtained the completed worksheets No.1 through No.7 (or other alternative computations) and determined that the limit and annual adjustment factors were adopted by resolution of the City Council. We also determined that the population and inflation options were selected by a recorded vote of the City Council. 2. For the accompanying Appropriations Limit worksheet No.6, we added line A, last year's limit, to line E, total adjustments, and agreed the resulting amount to line F, this year's limit. 3. We agreed the current year information presented in the accompanying Appropriations Limit worksheet No.6 to the other worksheets described in No. 1 above. .,.2-,r To the City Council of the City of Chula Vista, California November 8, 1996 Page 2 4. We agreed the prior year appropriations limit presented in the accompanying Appropriations Limit worksheet No.6 to the prior year appropriations limit adopted by the City Council during the prior year. We were not engaged to, and did not, perform an audit, the objective of which would be the expression of an opinion on the accompanying Appropriations Limit worksheet No. 6 (or other alternative computation). Accordingly, we do not express such an opinion. Had we performed additional procedures, other matters might have come to our attention that would have been reported to you. This report is intended solely for the use of the City of Chula Vista, California and should not be used by those who have not agreed to the procedures and taken responsibility for the sufficiency of the procedures for their purposes. However, this report is a matter of public record and its distribution is not limited. '71r. ~ ~ ~ ~'c.ld,.s ~- G, ;1 T' - .. - I CITY OF CHULA VISTA APPROPRIATIONS UMIT WORKSHEET #6 FY 1995-96 BUDGET AMOUNT [$142,437,9281 A. LAST YEAR'S UMIT, AS AMENDED B. ADJUSTMENT FACTORS 1. Population % 2. Inflation % Total Adjustment % I 12.95% 1 [$18,445,7121 c. ANNUAL ADJUSTMENT D. OTIiER ADJUSTMENTS: Assumed Responsibility (Lost Responsibility) (Transfer to Private) (Transfer to Fees) Sub-total I - 1 E. TOTAL ADJUSTMENTS I $18,445,7121 ~160,883,640 I F. CURRENT YEAR's UMIT cJ - 7 - _. ----- --------, CITY OF CHULA VISTA Annual Financial Report For the Fiscal Year Ended June 30, 1996 M ~~R~L~2c Attc~ -- . CITY OF CHULA VISTA Annual Financial Report For the Year Ended June 30, 1996 TABLE OF CONTENTS PAGE IndependentAuditors'Report """""""""""""""""'" 1 Combined Financial Statements ("Liftable General Purpose Financial Statements"): Combined Balance Sheet - All Fund Types and Account Groups and Discretely Presented Component Unit. . . . . . . . . . . . . . . . .. 2 Combined Statement of Revenues, Expenditures and Changes in Fund Balances - All Governmental Fund Types ........... 6 Combined Statement of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual - General, Special Revenue and Debt Service Funds (Budgetary Basis) . . . . . . . . . .. 8 Combined Statement of Revenues, Expenses and Changes in Retained Earnings - All Proprietary Fund Types and Discretely Presented Component Unit. . . . . . . . . . . . . .. 10 Combined Statement of Cash Flows - All Proprietary Fund Types and Discretely Presented Component Unit. . . . . . . . . . . . . .. 12 Notes to Financial Statements ................................... 14 Combining and Individual Fund Financial Statements (Supplementary Information): Special Revenue Funds: CombiningBalanceSheet.... ... ..... ..... ... ..... .... .... ..., 50 Combining Statement of Revenues, Expenditures and Changes in Fund Balances .................................. 54 Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual (Budgetary Basis): Transportation Grants ................................., 58 Parking Meter ........................................ 59 Traffic Safety ......................................... 60 Sewer Funds .......................................... 61 Town Center I ........................................ 62 Open Space Districts ................................... 63 Housing Programs ..................................... 64 Golf Course Revenue ................................... 65 TransitService ........................................ 66 Sundry Grants ........................................ 67 Traffic Signal ......................................... 68 Special Capital Outlay .................................. 69 ill CITY OF CHUlA VISTA Annual Financial Report For the Year Ended June 30, 1996 TABLE OF CONTENTS (Continued) PAGE Bayfront Trolley ....................................... 70 Redevelopment Agency ................................. 71 Baldwin Project Management """""""""""""'" 72 Transportation Sales Tax """""""""""""""" 73 OtherMiscellaneousFunds ............................... 74 Debt Service Funds: CombiningBalanceSheet..................................... 76 Combining Statement of Revenues, Expenditures and Changes in Fund Balances .................................. 78 Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual (Budgetary Basis): 1965 Golf Course ...................................... 80 Redevelopment Agency """""""""""""""'" 81 1990 COP ............................................ 82 1994POB ............................................ 83 NotesPayable ......................................... 84 Capital Projects Funds: CombiningBalanceSheet..................................... 86 Combining Statement of Revenues, Expenditures and Changes in Fund Balances .................................. 90 Enterprise Funds: .CombiningBalanceSheet......................,............. 94 Combining Statement of Revenues, Expenses and Changes in Retained Earnings ............................... 95 Combining Statement -of Cash Flows ............................ 96 Internal Service Funds: CombiningBalanceSheet..................................... 97 Combining Statement of Revenues, Expenses and Changes in Retained Earnings ............................... 98 Combining Statement of Cash Flows ............................ 99 Agency Funds: CombiningBalanceSheet..................................... 100 Combining Statement of Changes in Assets and Liabilities. . . . . . . . . . .. 101 iv 1201 DOVE STREET, SUITE 680 M °E~!:?u~c~~ NEWPORT BEACH, CALIFORNIA 92660 (714) 221-0025 570 RANCHEROS DRIVE, SUITE 260 SAN MARCOS, CA 92069 (619) 752.3390 November 8,1996 The Honorable City Council of the City of Chula Vista, California Independent Auditors' Report We have audited the accompanying general purpose financial statements of the City of Chula Vista as of and for the year ended June 30, 1996, as listed in the table of contents. These general purpose financial statements are the responsibility of the City of Chula Vista management. Our responsibility is to express an opinion on these general purpose financial statements based on our audit. We conducted our audit in accordance with generally accepted auditing standards and 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 general purpose financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the general purpose financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall general purpose financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. In our opinion, the general purpose financial statements referred to above present fairly, in all material respects, the financial position of the City of Chula Vista as of June 30, 1996, and the results of its operations and cash flows of its proprietary fund types and discretely presented component unit for the year then ended in conformity with generally accepted accounting principles. Our audit was made for the purpose of forming an opinion on the general purpose financial statements taken as a whole. The accompanying combining, and individual fund financial statements listed as supplementary information in the table of contents are presented for purposes of additional analysis and are not a required part of the general purpose financial statements of the City of Chula Vista. The information has been subjected to the auditing procedures applied in the audit of the general purpose financial statements and, in our opinion, is fairly presented in all material respects in relation to the general purpose financial statements taken as a whole. In accordance with Government Auditing Standards, we have also issued a report dated November 8, 1996 on our consideration of the City of Chula Vista internal control structure and a report dated November 8, 1996 on its compliance with laws and regulations. '7tt#"l.t.1.~ 1 auðG./~S 1 CITY OF CHULA VISTA Combined Balance Sheet - All Fund Types, Accounts Groups and Discretely Presented Component Unit June 30, 1996 Governmental Fund Types General Special Debt Capital Assets and Other Debits Fund Revenue Service Projects Cash and investments (Note 2) $ 3,504,860 $ 32,776,235 $ 1,534,601 $ 30,270,662 Receivables: Accounts 2,052,671 2,472,232 667,581 Taxes 2,347,295 65,047 97,011 Interest 5,584 1,467,675 2,743 450,042 Grants 192,741 579,853 525,551 Due from other funds (Note 10) 1,156,254 Loans receivable (Note 4) 250,000 7,209,057 2,600,000 Inventories Advances to component unit (Note 12) 2,130,992 49,238 2,072,724 Advances to other funds (Notes 7 and 10) 7,444,974 3,413,601 13,089,094 Restricted Assets: Cash and investments (Note 2) 64,187 1,823,465 Cash and investments with fiscal agents (Note 2) 5,442,967 Property, plant and equipment (net) (Notes 5 and 6) Amount available in debt service funds Amount to be provided for retirement oflong-term debt Total Assets and Other Debits - $ 17.993,304 $ 49,856,403 $ 6,980,311 $ 50,928.919 See Accompanying Notes to Financial Statements. 2 Total Component Fiduciary Account Groups Primary Unit Proprietary Fund Types Fund Type General General Government Bayfront Internal Trust and Fixed Long-term (Memorandum Conservancy Enterprise Service Agency Assets Debt Only) Trust $ 5,412,609 $ 1,140,599 $ 31,178,990 $ 105,818,556 $ 190,864 129,905 120 6,698 5,329,207 1,226 33,051 2,542,404 9,809 23,415 26,694 1,985,962 369 1,298,145 12,102 550,000 1,706,254 10,059,057 80,809 80,809 19,694 4,252,954 23,947,669 1,887,652 2,179,031 7,621,998 2,762,071 $ 87,688,318 90,450,389 208,583 $ 6,980,311 6,980,311 85,410,721 85,410,721 $ 8,314,394 $ 1,794,943 $ 33,424,464 $ 87,68"8,318 $ 92,391,032 $ 349.372,088 $ 432,838 (Continued) 3 ., _.. .. ., CITY OF CHULA VISTA Combined Balance Sheet - All Fund Types, Accounts Groups and Discretely Presented Component Unit (Continued) June 30, 1996 Governmental Fund Types General Special Debt Capital Fund Revenue Service Projects Liabilities Equity and Other Credits Liabilities: Accounts payable $ 641,877 $ 1,081,448 $ 640,183 Accrued liabilities 1,294,763 33,877 Due to bondholders Due to other funds (Note 10) 514,610 641,644 Refundable deposits 1,285 Advances from other funds (Notes 7 and 10) 2,989,285 Advances from primary government (Note 12) Notes payable (Note 7) Loans payable (Note 7) Deferred revenue (Note 11) 1,821,113 2,115,309 5,190,379 Deferred compensation (Note 15) Claims payable (Notes 7 and 18) Compensated absences (Note 7) Other long-term debt payable (Note 7) Total Liabilities 3,759,038 3,745,244 9,461,491 Equity and Other Credits: Contributed capital Investment in general fixed assets Retained earnings (deficit): Unreserved Fund Balances: Reserved (Note 13) 9,239,879 14,945,128 $ 6,980,311 14,068,599 Unreserved: Designated (Note 13) 4,140,941 512,416 27,965,288 Undesignated 853,446 30,653,615 (566,459) Total Equity and Other Credits 14,234,266 46,111,159 6,980,311 41,467,428 Total Liabilities, Equity and Other Credits $ 17,993,304 $ 49.856,403 $ 6,980.311 $ 50,928,919 See Accompanying Notes to Financial Statements. 4 - - - Total Component Fiduciary Account Groups Primary Unit Proprietary Fund Types Fund Type General General Government Bayfront Internal Trust and Fixed Long-tenn (Memorandum Conservancy Enterprise Service Agency Assets Debt Only) Trust $ 451,847 $ 23,905 $ 42,012 $ 2,881,272 $ 14,399 61,648 1,390,288 32,197 12,430,473 12,430,473 550,000 1,706,254 4,380,742 4,382,027 45,412 $ 20,912,972 23,947,669 4,252,954 2,422,639 2,422,639 315,723 315,723 672,664 22,504 9,821,969 420 16,525,825 16,525,825 2,929,874 2,929,874 2,473,490 2,473,490 63,336,334 63,336,334 1,124,511 658,057 33,424,464 92,391,032 144,563,837 4,299,970 2,762,071 88,624 2,850,695 271,278 $ 87,688,318 87,688,318 4,427,812 1,048,262 5,476,074 (4,138,410) 45,233,917 32,618,645 30,940,602 7,189,883 1,136,886 87,688,318 204,808,251 (3,867,132) $ 8,314,394 $ 1.794,943 $ 33.424.464 $ 87,688,318 $ 92,391.032 $ 349,372,088 $ 432,838 5 CITY OF CHULA VISTA Combined Statement of Revenues, Expenditures and Changes in Fund Balances - All Governmental Fund Types For the Year Ended June 3D, 1996 Governmental Special General Revenue Revenues: Taxes $ 28,147,903 $ 8,279,385 Intergovernmental 16,095,010 4,631,450 Licenses and permits 1,662,946 Charges for services 2,790,442 13,682,045 Fines and forfeitures 570,217 116,354 Development fees Revenue ITom use of money and property 1,587,721 2,269,726 Other 1,955,019 763,390 Total Revenues 52,809,258 29,742,350 Expenditures: Current: General government 11,315,411 11,367,255 Public safety 24,817,345 Public works 11,780,101 9,560,331 Parks and recreation 5,088,326 Library 3,713,059 108,845 Capital Projects Debt Service: Principal 12,197 Interest and fiscal charges 864 Bond issuance costs Total Expenditures 56,714,242 21,049,492 Excess (Deficiency) of Revenues Over Expenditures (3,904,984) 8,692,858 Other Financing Sources (Uses): Proceeds ITom long-term debt Sale offixed assets Operating transfers in 4,280,484 1,038,760 Operating transfers out (1,702,801) (6,743,478) Total Other Financing Sources (Uses) 2,577,683 (5,704,718) Excess (Deficiency) of Revenues and Other Sources Over Expenditures and Other Uses (1,327,301) 2,988,140 Fund Balances, Beginning, Restated (Note 17) 15,392,393 43,292,193 Residual Equity Transfers In (Out) 169,174 (169,174) Fund Balances, Ending $ 14,234,266 $ 46,111,159 See Accompanying Notes to Financial Statements. 6 Fund Types Total Debt Capital (Memorandum Service Projects Only) $ 2,340,303 $ 2,592,027 $ 41,359,618 2,809,368 23,535,828 1,662,946 16,472,487 686,571 4,308,893 4,308,893 370,028 2,538,929 6,766,404 637,007 3,355,416 2,710,331 12,886,224 98,148,163 50,337 22,733,003 24,817,345 21,340,432 5,088,326 3,821,904 15,165,850 15,165,850 7,215,436 2,391,047 9,618,680 4,699,527 1,331,121 6,031,512 88,448 88,448 12,053,748 18,888,018 108,705,500 (9,343,417) (6,00 1,794) (10,557,337) 7,557,616 2,723,524 10,281,140 2,750,250 2,750,250 1,711,468 3,274,757 10,305,469 (951) (1,844,739) (10,291,969) 9,268,133 6,903,792 13,044,890 (75,284) 901,998 2,487,553 7,055,595 40,565,430 106,305,611 $ 6,980,311 $ 41,467,428 $ 108.793.164 7 "I CITY OF CHULA VISTA Combined Statement of Revenues, Expenditures and Changes in Fund Balances Budget and Actual (Budgetary Basis) General, Special Revenue and Debt Service Funds For the Year Ended June 30, 1996 General Fund Actual on a Variance Budgetary Favorable Budget Basis (Unfavorable) Revenues: Taxes $ 29,394,421 $ 28,147,903 $ (1,246,518) Intergovernmental 17,395,941 16,095,010 (1,300,931) Licenses and pennits 2,060,301 1,662,946 (397,355) Charges for services 3,487,405 2,790,442 (696,963) Fines and forfeitures 709,553 570,217 (139,336) Revenue ITom use of money and property 628,749 1,587,721 958,972 Other 190,332 1,955,019 1,764,687 Total Revenues 53,866,702 52,809,258 (1,057,444) Expenditures: Current: General government 11,998,744 11,604,314 394,430 Public safety 24,590,650 24,842,154 (251,504) Public works 12,302,690 11,975,397 327,293 Parks and recreation 5,076,371 5,126,514 (50,143) Library 4,030,384 3,828,140 202,244 Debt Service: Principal Interest and fiscal charges Bond issuance costs Total Expenditures 57,998,839 57,376,519 622,320 Excess (Deficiency) of Revenues Over Expenditures (4,132,137) (4,567,261) (435,124) Other Financing Sources (Uses): Proceeds from long-term debt Operating transfers in 4,279,768 4,280,484 716 Operating transfers out (2,639,605) (1,702,801) 936,804 Total Other Financing Sources (Uses) 1,640,163 2,577,683 937,520 Excess (Deficiency) of Revenues and Other Sources Over Expenditures and Other Uses (2,491,974) (1,989,578) 502,396 Fund Balances, Beginning, Restated (Note 17) 15,392,393 15,392,393 Residual Equity Transfers In (Out) 169,174 169,174 Fund Balances, Ending $ 12,900.419 $ 13.571.989 $ 671.570 See Accompanying Notes to Financial Statements. 8 .. Special Revenue Funds Debt Service Funds Actual on a Variance Actual on a Variance Budgetary Favorable Budgetary Favorable Budget Basis (Unfavorable) Budget Basis (Unfavorable) $ 4,631,469 $ 8,279,385 $ 3,647,916 $ 2,340,303 $ 2,340,303 10,006,922 4,631,450 (5,375,472) 13,412,498 13,686,891 274,393 156,600 116,354 (40,246) 1,661,270 2,269,726 608,456 370,028 370,028 35,300 758,544 723,244 29,904,059 29,742,350 (161,709) 2,710,331 2,710,331 12,444,240 11,612,114 832,126 $ 37,320 50,337 (13,017) 17,713,741 9,792,801 7,920,940 179,318 126,928 52,390 12,197 (12,197) 7,078,216 7,215,436 (137,220) 864 (864) 4,769,690 4,699,527 70,!63 88,448 88,448 30,337,299 21,544,904 8,792,395 11,973,674 12,053,748 (80,074) (433,240) 8,197,446 8,630,686 (11,973,674) (9,343,417) 2,630,257 6,242,152 7,557,616 1,315,464 29,392 1,038,760 1,009,368 407,046 1,711,468 1,304,422 (3,759,639) (6,743,478) (2,983,839) (951) (951) (3,730,247) (5,704,718) (1,974,471) 6,649,198 9,268,133 2,618,935 (4,163,487) 2,492,728 6,656,215 (5,324,476) (75,284) 5,249,192 43,292,193 43,292,193 7,055,595 7,055,595 (169,174) (169,174) $ 39.128.706 $ 45.615,747 $ 6.487.041 $ 1.731.119 $ 6,980,311 $ 5,249.192 9 .. CITY OF CHULA VISTA Combined Statement of Revenues, Expenses, and Changes in Retained Earnings All Proprietary Fund Types and Discretely Presented Component Unit For the Year Ended June 30, 1996 Proprietary Fund Types Internal Enterprise Service Operating Revenues: Charges for services $ 1,501,424 $ 2,480,478 Seminar and admission fees Other Total Operating Revenues 1,501,424 2,480,478 Operating Expenses: Operations and administration 3,456,276 2,605,882 Depreciation 416,301 Total Operating Expenses 3,872,577 2,605,882 Operating Loss (2,371,153) (125,404) Nonoperating Revenues (Expenses): Intergovernmental 2,1l0,073 Donations Interest income 66,599 47,682 Interest expense Total Nonoperating Revenues (Expenses) 2,176,672 47,682 Loss Before Operating Transfers (194,481) - (77,722) Operating Transfers: Transfers (out) (13,500) Net Loss (194,481) (91,222) Depreciation on Contributed Capital 416,301 Increase (Decrease) in Retained Earnings 221,820 (91,222) Retained Earnings, Beginning 4,205,992 1,139,484 Retained Earnings, Ending $ 4.427,812 $ 1.048.262 See Accompanying Notes to Financial Statements. 10 Total Component Primary Unit Government Bayftont (Memorandum Conservancy Only) Trust $ 3,981,902 $ 43,306 60,487 6,747 3,981,902 110,540 6,062,158 505,447 416,301 73,335 6,478,459 578,782 (2,496,557) (468,242) 2,110,073 63,256 114,281 ! 7,283 (243,773) 2,224,354 (163,234) (272,203) (631,476) (13,500) (285,703) (631,476) 416,301 130,598 (631,476) 5,345,476 (3,506,934) $ 5,476.074 $(4.138.410) 11 " - . CITY OF CHULA VISTA Combined Statement of Cash Flows All Proprietary Fund Types and Discretely Presented Component Unit For the Year Ended June 30,1996 Proprietary Fund Types Internal Enterprise Service Cash Flows from Operating Activities: Operating (loss) $ (2,371,153) $ (125,404) Adjustments to reconcile operating loss to net cash used for operating activities: Depreciation 416,301 Changes in operating assets and liabilities: (Increase) decrease in accounts receivable (444) (120) Decrease in inventory 7,815 Increase (decrease) in accounts payable 211,914 (29,311) Increase in accrued liabilities 27,409 Increase (decrease) in deferred revenue (281,489) 22,504 Net Cash Used for Operating Activities (2,024,871) (97,107) Cash Flows from Non-Capital Financing Activities: Intergovernmental revenue received 2,110,073 Loans received Donations Operating transfers out (13,500) Loans to other funds (115,679) Loans from other funds 115,679 Net Cash Provided by (Used for) Non-Capital Financing Activities 2,110,073 (13,500) Cash Flows from Capital and Related Financing Activities: Capital grant received Property aquisition Net Cash Flows Used for Capital and Related Financing Activities Cash Flows from Investing Activities: Interest received 79,860 28,842 Net Increase (Decrease) in Cash and Cash Equivalents 165,062 (81,765) Cash and Cash Equivalents, Beginning 5,247,547 1,222,364 Cash and Cash Equivalents, Ending $ 5,412,609 $ 1,140,599 Noncash Investing, Capital, and Financing Activities: The Bayfront Conservancy Trust incurred interest expense of $243,773 during the year related to loans payable. See Accompanying Notes to Financial Statements. 12 ., - , Total Component Primary Unit Government Bayftont (Memorandum Conservancy Only) Trust $ (2,496,557) $ (468,242) 416,301 73,335 (564) 1,344 7,815 4,773 182,603 10,571 27,409 4,952 (258,985} 420 (2,121,978) (372,847) 2,110,073 380,504 63,256 (13,500) (115,679) 115,679 2,096,573 443,760 112,924 ~ (181,105) (68,181) 108,702 17,818 83,297 20,550 6,469,911 170,314 $ 6.553.208 $ 190.864 13 CITY OF CHULA VISTA Notes to Financial Statements June 30, 1996 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Description of the Reporting Entitv: This report includes all fund types and account groups of the City of Chula Vista (the "primary government"), as well as the Chula Vista Redevelopment Agency (the Agency), the Chula Vista Industrial Development Authority (the Authority), the Chula Vista Public Financing Authority (the PFA), and the Bayfront Conservancy Trust (the Trust). The latter four entities meet the definition of a "component unit". The Agency, the Authority and the PF A are presented on a "blended" basis as if they were part of the primary government. Although they are legally separate entities, their governing boards are comprised of the same membership as the City Council. The City may impose its will on them, including the ability to appoint, hire, reassign or dismiss management. There is also a financial benefit/burden relationship between the City and these entities. The Trust is discretely presented as an enterprise fund. The City Council does not appoint a voting majority of the Trust's Board of Directors but the Trust is financially dependent on the City. The CitY of Chula Vista was incorporated under the general laws of the State of California in 1911 and became a Charter City in 1949. The City operates under a Council-Manager form of government and provides the following services: public safety, community services, engineering services, planning services, public works, general administrative services, and capital improvements. The Redevelopment Agency of the City of Chula Vista was activated in October 1972 pursuant to the California Community Redevelopment Laws, for the purpose of eliminating the blighted areas by encouraging development of residential, commercial, industrial, recreational and public facilities. The Agency's financial data and transactions are included with the special revenue, debt service and capital projects fund types and the general fIXed assets and general long-term debt account groups. The Chula Vista Industrial Development Authority was formed in 1982 for the purpose of promoting and developing commercial, industrial and manufacturing enterprise and encouraging employment. The Authority's financial data and transactions are included with the capital projects fund types. The Chu]a Vista Public Financing Authority is a joint powers authority organized pursuant to the State of California Government Code, Section 6500. The Authority exists under a Joint Exercise of Power Agreement dated April 4, 1995, by and between the City of Chula Vista and the Redevelopment Agency of the City of Chula Vista. The PF A is authorized to borrow money for the purpose of financing the acquisition of bonds, notes and other obligations of, or for the purpose of making loans to the City and/or to refinance outstanding obligations of the City. 14 CITY OF CHULA VISTA Notes to Financial Statements (Continued) June 30, 1996 The Chula Vista Bavfront Conservanc;y Trust was established to assist in carrying out the provisions of the City of Chula Vista's Local Coastal Plan, as approved by the State Coastal Commission. The Trust is operating as a nonprofit public benefit corporation established to ensure the protection of the environmentally sensitive areas of the Chula Vista Bayfront. Separate financial statements for the Agency and the Trust are available at the Chula Vista City Hall. Separate financial statements are not prepared for the Authority and the PFA The accounting policies of the City of Chula Vista and its component units conform to generally accepted accounting principles as applicable to governments. The following is a summary of the more significant policies. Fund Accounting: The accounts of the City are organized on the basis of funds and account groups, each of which is considered a separate accounting entity. The operations of each fund are accounted for with a separate set of self-balancing accounts that comprise its assets, liabilities, fund equity, revenues, and expenditures, or expenses, as appropriate. Government resources are allocated to and accounted for in individual funds based upon the purposes for which they are to be spent and the means by which spending activities are controlled. The various funds are grouped, in the financial statements in this report, into generic fund types and broad fund categories as follows: Governmental Funds: General Fund - The General Fund is the general operating fund of the City. It is used to account for all financial resources except those required to be accounted for in another fund. Special Revenue Funds - Special Revenue Funds are used to account for the proceeds of specific revenue sources that are legally restricted to expenditures for specified purposes. Debt Service Funds - The Debt Service Funds are used to account for the accumulation of resources for, and the payment of principal, interest, and related costs of the debt of the general long-term debt account group. Capital Projects Funds - Capital Projects Funds are used to account for financial resources to be used for the acquisition or construction of major capital facilities (other than those financed by proprietary funds). 15 ;1 - - .' CITY OF CHULA VISTA Notes to Financial Statements (Continued) June 30, 1996 Proprietary Funds: EntelJ'rise Funds - The Enterprise Funds are used to account for operations that are fmanced and operated in a manner similar to a private business enterprise - where the intent of the City Council is that the costs (expenses, including depreciation) of providing goods or services to the general public on a continuing basis be financed or recovered primarily through user charges. Internal Service Fund - The Internal Service Fund is used to account for activities and services performed for other organizational units within the City. Charges to other city departments are made to support these activities. Fiduciary Funds: Agency Funds - The Agency Funds are used to account for deferred compensation, developer deposits, and bond deposits. These funds are custodial in nature (assets equal liabilities) and do not involve measurement of results of operations. Fixed Assets and Long-Term Liabilities: The accounting and reporting treatment applied to the fIXed assets and long-term liabilities associated with a fund are determined by its measurement focus. All governmental funds are accounted for on a spending or "financial flow" measurement focus. This means that only current assets and current liabilities are generally included on their balance sheets. Their reported fund balance (net current assets) is considered a measure of "available spendable resources." Governmental fund operating statements present increases (revenues and other financing sources) and decrea~es (expenditures and other financing uses) in net current assets. Accordingly, they are said to present a summary of resources and uses of "available spendable resources" during a period. Fixed assets used in governmental fund type operations (general fIXed assets) are accounted for in the General Fixed Assets Account Group, rather than in governmental funds. Public domain ("infrastructure") general fIXed assets consisting of certain improvements other than buildings, including roads, bridges, curbs and gutters, streets and sidewalks, drainage systems, and lighting systems are not capitalized along with other general fixed assets. No depreciation has been provided on general fIXed assets. All fixed assets are valued at historical cost or estimated historical cost if actual historical cost is not available. Donated fIXed assets are valued at theìr estimated fair market value on the date donated. The City capitalizes its fIXed assets acquired under lease purchases or similar contracts. 16 ., -. - - CITY OF CHULA VISTA Notes to Financial Statements (Continued) June 30, 1996 Long-term liabilities expected to be financed from governmental funds are accounted for in the General Long-Term Debt Account Group, not in the governmental funds. The two account groups are not "funds." They are concerned only with the measurement of financial position. They are not involved with measurement of results of operations. Because of their spending measurement focus, expenditure recognition for governmental fund types is limited to exclude amounts represented by non-current liabilities. Since they do not affect net current assets, such long-term amounts are not recognized as governmental fund type expenditures or fund liabilities. They are instead reported as liabilities in the General Long-Term Debt Account Group. The proprietary funds are accounted for on a cost of services or "capital maintenance" measurement focus. This means that all assets and all liabilities (whether current or noncurrent) associated with their activities are included on their balance sheets. The reported fund equity (net total assets) is segregated into contributed capital and retained earnings components. Proprietary fund type operating statements present increases (revenues) and decreases (expenses) in net total assets. Depreciation of all exhaustible [JXed assets used by the proprietary funds is charged as an expense against their operations. Accumulated depreciation is provided on proprietary fund balance sheets. Depreciation has been provided over the estimated useful lives using the straight-line method. The estimated useful lives are as follows: Buildings 25 Years Machinery and equipment 5-20 Years Basis of Accounting: Basis of accounting refers to when revenues and expenditures or expenses are recognized in the accounts and reported in the financial statements. Basis of accounting relates to the timing of the measurements made, regardless of the measurement focus applied. All governmental funds and the agency fund are accounted for using the modified accrual basis of accounting. Their revenues are recognized when they become measurable and available as net current assets. Their measurement focus is based on flow of current financial resources. The primary revenue sources susceptible to accrual are property and sales taxes, franchise fees, transient occupancy taxes, investment income, federal entitlement, motor vehicle fees and gas tax subventions. 17. .. - - CITY OF CHULA VISTA Notes to Financial Statements (Continued) June 30, 1996 The City does not accrue grant revenue which is not available within sixty days of fiscal year end. Expenditures are generally recognized under the modified accrual basis of accounting when the related fund liability is incurred. An exception to this general rule is principal and interest on general long-term debt which is recognized when due. The proprietary funds are accounted for using the accrual basis of accounting. Their measurement focus is based on flow of economic resources. Their revenues are recognized when earned, and expenses are recognized when they are incurred. In accordance with Governmental Accounting Standards Board (GASB) Statement No. 20, Accounting and Financial Reporting for Proprieta¡y Funds and Other Governmental Entities That Use Proprietary Fund Accounting, the City applies all GASB pronouncements currently in effect as well as Financial Accounting Standards Board Statements and Interpretations, Accounting Principals Board Opinions and Accounting Research Bulletins of the Committee on Accounting Procedure issued on or before November 30, 1989. Budgets and Budgeta¡y Accounting: An annual budget is adopted by the City Council prior to the first day of the fiscal year. The budget process includes submittal of each department's budget request for the next fiscal year, a detailed review of each department's proposed budget by the City Manager, and a final City Manager recommended budget that is transmitted to the City Council for its review before the required date of adoption. Once transmitted to the City Council, the proposed budget is made available for public inspection. A public hearing is held to give the public the opportunity to comment upon the proposed budget. Notice of such public hearing is given in a newspaper of general circulation. The adoption of the budget is accomplished by the approval of a Budget Resolution. The level of budgetary control is at the department level. Any budget modification which would result in an appropriation increase, requires City Council approval. The City Manager and Finance Director are jointly authorized to transfer appropriations within a departmental budget and salary related appropriations between departments. Any non-salary related appropriations transfers between departments require City Council approval. All appropriations which are not obligated, encumbered or expended at the end of the fiscal year lapse and become a part of the unreserved fund balance which may be appropriated for the next fiscal year. 18 .. - . - CITY OF CHULA VISTA Notes to Financial Statements (Continued) June 30, 1996 An annual budget for the year ended June 30, 1996 was adopted and approved by the City Council for the General, Special Revenue, and Debt Service Funds. The budgets of the Capital Projects Funds are primarily long-term budgets which emphasize major programs and capital outlay plans extending over a number of years. Because of the long-term nature of these projects, annual budget comparisons are not considered meaningful, and accordingly, no budgetary informa!ion for Capital Projects Funds is included in the accompanyjng financial statements. During the year ended June 30, 1996, the original operating budget was modified by supplemental appropriations of $8,501,886. These budget modifications were adopted and approved by the City Council. Formal budgetary integration is employed as a management control device. Encumbrance accounting, under which purchase orders, contracts, and other commitments for the expenditure of monies are recorded in order to reserve that portion of the applicable appropriation, is employed as an extension of formal budgetary integration. Encumbrances outstanding at year end are reported as reservations of fund balances, since they do not constitute GAAP basis expenditures or liabilities. Fund balance differences between GAAP basis and the City's budgetary basis of accounting are $1,157,689 of encumbrances outstanding at year end. The following schedule is a reconciliation of the budgetary and GAAP fund balances: Special Debt General Revenue Service Fund Funds Funds Fund balances - budgetary basis $13,571,989 $45,615,747 $6,980,311 . Outstanding encumbrances 662.277 495.412 Fund balances - GAAP basis $14.234.266 $46.111.159 $6.980.311 Investments: Investments are stated at cost except for investments of the deferred compensation plan which are stated at market value (See Notes 2 and IS). If market values decline below cost, no loss is recorded if such declines are considered temporary. The City's policy is to hold investments until maturity, or until market values equal or exceed cost. However, if the liquidity needs of the City were to require that investments be sold at a loss subsequent to year end, the decline in value would be recorded as a loss at year end. 19 .. - . CITY OF CHULA VISTA Notes to Financial Statements (Continued) June 30, 1996 Cash and Cash Equivalents: For purposes of the Statement of Cash Flows, the City consider all highly liquid investments (including restricted assets) with a maturity of three months or less when purchased to be cash equivalents. In addition, cash invested in the City's cash management pool is considered to be cash equivalents. Compensated Absences: For governmental funds, accumulated vacation and sick leave benefits and compensatory time payable in future years when used by City employees amounted to $2,473,490 at June 30, 1996. These amounts are payable from future resources and therefore have been recorded in the General Long-Term Debt Account Group. Vacation benefits, sick leave, and compensatory time are recorded as expenditures in the related funds when used. Upon retirement or termination, the expenditures are recorded in the fund which incurred the original obligation. Compensated absences payable for Proprietary Funds are reported within the respective funds. Total Columns on Combined Statements: Total columns on the Combined Statements are captioned "Memorandum Only" to indicate that they are presented only to facilitate financial analysis. Data in these columns do not present financial position, results of operations, or cash flows in conformity with generally accepted accounting principles. Neither is such data comparable to a consolidation. Interfund eliminations have not been made in the aggregation of this data. 2. CASH AND INVESTMENTS Cash and investments at June 30, 1996 consisted of the following: Pooled deposits: Demand accounts (bank balances) $ 386,252 Add deposit in transit 290,787 Less outstanding warrants (1.038.212) Book Balance $ (361,173) Certificates of deposit 310.000 Total Pooled Deposits (51,173) Pooled investments 89,534,767 Deposits (Restricted Cash) 1,887,652 20 ., _.. - .. OTY OF CHULA VISTA Notes to Financial Statements (Continued) June 30, 1996 Deposits and investments with fiscal agents 7,621,998 Cash and investments - deferred compensation plan 16.525.826 Total Cash and Investments $115.519.070 The City follows the practice of pooling cash and investments of all funds (including the Bayfront Conservancy Trust) except for funds required to be held by outside fiscal agents under the provisions of bond indentures, restricted deposits and funds in its deferred compensation plan (See Note 15). Interest income earned on pooled cash and investments is allocated monthly to the various funds based on the average cash balance in each fund. Interest income from deposits and investments with fiscal agents, restricted deposits and the deferred compensation plan is credited directly to the related fund. Authorized Deposits/Investments: Under provision of the City's investment policy, and in accordance with Section 53601 of the California Government Code, the City may invest in the following types of investments: Securities of the u.S. Government or its agencies Certificates of Deposit (or Time Deposits) Bankers' Acceptances Negotiable Certificates of Deposit Commercial Paper Local Agency Investment Fund demand deposits (State pool) Repurchase Agreements Passbook Savings Account demand deposits Mutual Funds Medium-Term Corporate Notes Mortgage-backed Securities County of San Diego Treasury Investment Pool Deposits/Credit Risk: The California Government Code requires California banks and savings and loan associations to secure a City's deposits by pledging government securities as collateral. The market value of pledged securities must equal at least 110% of a City's deposits. California law also allows financial institutions to secure City deposits by pledging first trust deed mortgage notes having a value of 150% of a City's total deposits. 21 .. - . CITY OF CHULA VISTA Notes to Financial Statements (Continued) June 30, 1996 The City may waive collateral requirements for deposits which are fully insured up to $100,000 by Federal depository insurance. In accordance with GASB Statement 3, deposits are classified as to credit risk by three categories as follows: Category 1: Insured or collateralized with securities held by the City or by its agent in the City's name. Category 2: Collateralized with securities held by the pledging financial institution's trust department or agent in the City's name. Category 3: Uncollateralized. Credit Risk. CarrYing Amount. and Market Value of Investments: The investments that are represented by specific identifiable investment securities are classified as to credit risk by three categories as follows: Category 1: Insured or registered, or securities held by the City or its agent in the City's name. Category 2: Uninsured and unregistered with securities held by the pledging financial institution's or counterparty's trust department or agent in the City's name. Category 3: Uninsured and unregistered with securities held by the counterparty, or by its trust department or agent, but not in the City's name. Deposits were categorized as follows at June 30, 1996: Category Carrying 1 2 ----1- Amount Pooled Deposits: Demand Accounts (Bank Balances) $ 129,686 $ 256,566 $ 386,252 Add deposit in transit 290,787 Less outstanding warrants (1.038.212) Demand Accounts (Book Balance) (361,173) Certificates of Deposit 310.000 - 310.000 Total Pooled Deposits 129.686 566.566 - (51.173) 22 CITY OF CHULA VISTA Notes to Financial Statements (Continued) June 30, 1996 Category Carrying 1 2 -1- Amount Restricted Cash: Deposits (Bank Balances) 83,137 1,823,465 1,906,602 Less outstanding warrants - (18.950) Deposits (Book Balance) 83.137 1.823.465 - 1.887.652 Deposits with Fiscal Agents $39.079 39.079 Deferred Compensation: Deposits 4,697,495 73,804 4,771,299 Certificates of Deposit 2.863.238 438.775 - 3.302.013 Total Deferred Compensation 7.560.733 512.579 - 8.073.312 Total Deposits $7.773.556 $2.902.610 $39.079 $9.948.870 Investments consisted of the following at June 30, 1996: ContrnctuaJ/ Cate¡¡o¡y Can)ing Market --L- -L 3 Amount Value Pooled Investments: u.s. Government Securities $ 1,993,750 S !,993,75O $ 2,005,320 FHlB's 2A,435,938 2A,435,938 23,932,!45 FHIMCs 14,9'Æ,125 14,9'Æ,125 14,836,710 FNMAD's 4,002,813 4,002,813 3~!,560 FNMA's 29,134,058 29,134,058 2B,569,730 SlMA's 3,m0,313 3,m0,313 ~ ,250 Local Agency Investment Fund (State Poolji) -- - 11.959.760 11.959.7@ Total Pooled Investments Tl575007 - - 89534 767 892£6.475 Investments with FD Agents: u.s. Treasu¡y Notes $ 5(f,,6ZT 5«J,6Z7 575,145 Repurchase Ag¡=nent 745,512 745,512 745,512 Investment Ag¡=nents<3J 1,Œ1,1l0 3,173,983 3,173,983 Mutual Funds(l) -- - 3 œ6. 797 3 œ6. 797 Total Investments With FD Agents -- ~ 7.582.919 7591.437 23 ., . . CITY OF CHULA VISTA Notes to Financial Statements (Continued) June 30, 1996 ContractuaJ/ Cate~ty Can¡ing Market -----L- ~ 3 Amount Value Deferred Compensation: Mutual FwxJs(l) -- - 8.452514 8.452514 Total Investments rn575.rm~ $2393249 $105570200 $105310.426 (1) Not subject to categorization (2) The management of the State of California Pooled Money Investment Account (generally referred to as LAIF) has indicated to the City that as of June 30, 1996 the carrying amount of the pool was $26,781,148,920 and the estimated market value of the pool (including accrued interest) was $26,982,550,842. The City's proportionate share of that value is $12,049,697. Included in LAIF's investment portfolio are certain derivative securities or similar products in the form of structured notes, totalling $1,100,720,000, and asset-backed securities totalling $313,945,000. LAIF's (and the City's) exposure to risk (credit, market or legal) is not currently available. (3) Total includes agreements with non-financial institutions, which are not subject to categorization. Deposits and Investments with Fiscal Agents: The City has monies held by trustees or fiscal agents pledged to the payment or security of certain bonds. The California Government Code provides these monies, in the absence of specific statutory provisions governing the issuance of bonds, may be invested in accordance with the ordinance, resolutions or indentures specifying the types of investments its trustees or fiscal agents may make. Cash and Investments - Deferred Compensation Plan: The City offers its employees a deferred compensation plan created in accordance with Internal Revenue Code Section 457. See Note 15 for additional information about this plan. The City invests deferred compensation assets with two entities-- the International City Management Association (ICMA) and Great Western Savings Bank. Authorized investments for the plan include deposits, certificate of deposits, stock mutual funds, bond mutual funds, and guaranteed investment contracts purchased from insurance companies. The plan assets totalling $16,525,825 are recorded at market value at June 30, 1996. 24 CITY OF CHULA VISTA Notes to Financial Statements (Continued) June 30, 1996 3. PROPERTY TAXES Property taxes attach as an enforceable lien on property as of March 1. Taxes are levied on July 1 and are payable in two installments on December 10 and April 10. The County bills and collects the property taxes and remits them to the City in installments during the year. City property tax revenues are recognized when levied to the extent that they result in current receivables in accordance with GASB Cod. Sec. P70. The County is permitted by State Law (Proposition 13) to levy taxes at 1% of full market value (at time of purchase) and can increase the value no more than two percent per year. The City receives a share of this basic levy. 4. LOANS RECEIVABLE As of June 30, 1996 the City and Agency had made the following loans: South Bay Community Services The City entered into a loan agreement with South Bay Community Services, a California non-profit public benefit corporation. The loan was made so that South Bay Community Services-could purchase a 14-unit apartment building to provide housing and related services to homeless and/or very low income families. The funds were made available to the City through a drawdown from the u.S. Department of Housing and Urban Development. The note is secured by a deed of trust on certain property and assignment of rents. Interest accrues annually at 6% of the unpaid principal balance of the Note. Principal and interest are payable annually out of any and all residual receipts derived from the property and/or operation of the property. Interest of $131,956 has been deferred at June 30, 1996. $ 896,818 Girls and Boys Club Construction Loan The City has made a loan of $250,000 for construction of a new facility for the Boys and Girls aub. The loan is interest free and will be repaid with equal annual payments over 20 years, starting in February 1999. 250,000 25 '1 - , CITY OF CHULA VISTA Notes to Financial Statements (Continued) June 30, 1996 Chula Vista Rehabilitation CHIP Loans The Chula Vista Rehabilitation Community Housing Improvement Program ("CHIP") is under the direct control of the Agency. CHIP offers deferred and low interest rate home improvement loans to qualified borrowers residing within a target area. Loan repayments are redeposited into the program cash accounts and are redistributes as future loans. The program was originally funded entirely with Community Development Block Grant Federal funds. In recent years, the Agency began supplementing the program due to decreased availability of Federal grants. In the current year, new contributions to the program were made entirely with Agency funds. The outstanding principal balances of the CHIP loans to the City's Housing Program Fund and Redevelopment Agency Fund are $771,006 and $4,244,487 respectively, at June 30, 1996. 5,015,493 Shinohara Loan The Agency entered into a loan agreement with Judi and Jimmie Shinohara, the previous owners of property purchased by the Agency. The loan was made to fund the cleanup of hazardous materials, discovered during pre-closing grading work, agreed to be completed by the seller. The loan is secured by a deed of trust. Interest accrues quarterly at 7%. The principal, along with accrued interest of $382,007 is payable in full on August 18, 1997. 1,500,000 One Park. Ltd. Loan The Agency entere,d into a cooperative agreement with One Park, Ltd. ("OPL") in 1986 whereby the Agency's Low and Moderate Income Housing Fund provided a construction loan of $850,000 to OPL on a deferred basis with a ten-year term. The project is a rental apartment project and under the agreement, 75% of the project units are reserved for low and moderate income occupancy at affordable rent levels. The Agency participates in the equity gain on the project, receiving at sale or term a percentage of the gross sales price of the project. The percentage increases incrementally over the term of the loan and peaks at 4.5%. Interest accrues, but is not paid periodically nor is principal. The deeds of trust to be provided by OPL to the Agency have been subordinated to concurrently recorded deeds of trust held by the construction and permanent financing lenders. Interest receivable of $1,170,975 has been deferred at June 30, 1996. 850,000 26 '1 -, - - CITY OF CHULA VISTA Notes to Financial Statements (Continued) June 30, 1996 Civic Center Barrio Housin~ CO1:poration Loan In 1991 the Agency entered into a loan agreement with the Civic Center Barrio Housing Corporation, a California non-profit public benefit corporation. The loan was made for the purchase of land and the development of a 28 unit low income housing project. During 1992, the loan was assigned to Park Village Apartments Ltd., a California limited partnership in which Civic Center Barrio Housing Corporation is the managing general partner. The loan is secured by a deed of trust on the property and assignment of rents. Principal and interest are payable monthly. Interest accrues annually at 5 % of the unpaid principal balance of the note. 306,166 Scripps Memorial Hospital Loan The Agency has entered into a loan agreement with Scripps Memorial Hospital ("Scripps"), a California non-profit corporation. The loan was made so Scripps could provide relocation assistance to relocate Rollerskateland as part of Scripps' expansion in the City. The loan is an unsecured promissory note. Interest accrues annually at 4.5% through December 1997 and 8% for the remaining period; interest is payable monthly. All principal and any accrued but unpaid interest is due and payable December 20, 2004. The loan may be required to be paid earlier in the event of default. 300,000 Mobile Assistance Programs The Agency entered into agreements with eligible residents of the Orange Tree Mobilehome Park, whereby the Agency loaned $250,030 as permanent financing assistance to residents for the purpose of purchasing certain mobilehome property. The loans are secured by deeds of trust on the property and mature in 2017 or when the property is sold. Contingent interest will be charged based on calculations specified in the agreement. 125,280 Eastlake Development Companv Loan The City loaned $800,000 to Eastlake Development Company, a California General Partnership in accordance with an agreement dated March 21, 1996. Interest accrues at the rate of 3% per annum, compounded annually, on each anniversary date of the effective date of the agreement until July 1, 1999, and thereafter 27 .. CITY OF CHULA VISTA Notes to Financial Statements (Continued) June 30, 1996 at the rate of the City's average quarterly interest earnings rate on the City's investment pool. All principal and accumulated interest thereon is due and payable on demand after July 1, 1999. 800,000 Other Loan Receivable 15.300 Total Loans Receivable $10.059.057 5. CHANGES IN GENERAL FIXED ASSETS Changes in general fixed assets during the year ended June 30, 1996, were as follows: Balance Balance Julv 1. 1995 Additions Deletions June 30. 1996 Land $30,939,988 $ 5,998,000 $ 9,761,464 $27,176,524 Buildings 34,484,644 2,822,129 764,948 36,541,825 Improvements other than buildings 7,749,369 369,334 8,118,703 Machinery and equipment 14.035.961 2.947.597 1.132.292 15.851.266 $87.209.962 $12.137.060 $11.658.704 $87.688.318 6. ENTERPRISE FIXED ASSETS A summary of proprietary fund type and discretely presented component unit property, plant and equipment at June 30, 1996 follows: Component Unit Bayfront Conservancy Transit Fund Trust Buildings $ 8,170 Machinery and equipment $5.532.537 531.101 Total 5,532,537 539,271 Less accumulated depreciation (2.770.466) (330.688) Net $2.762.071 $208.583 2~ CITY OF CHULA VISTA Notes to Financial Statements (Continued) June 30, 1996 7. LONG-TERM DEBT Changes in long-term debt for the year ended June 30, 1996 were as follows: Balance Balance July 1. 1995(1) Additions Deletions June 30. 1996 Notes payable $ 2,659,518 $ 4,726 $ 241,605 $ 2,422,639 Loans payable 327,920 12,197 315,723 Oaims payable (See Note 18) 3,317,659 2,109,572 2,497,357 2,929,874 Capital leases 12,341 12,341 Compensated absences (See Note 1) 2,399,512 73,978 2,473,490 Advances from other funds 18,706,436 4,596,414 2,389,878 20,912,972 General obligation bonds 50,000 50,000 Bond payable - Pension obligation 17,017,964 213,370 17,231,334 Tax allocation bonds 28,655,000 5,680,000 5,735,000 28,600,000 Certificates of participation 18.695.000 1.190.000 17.505.000 Total $91.841.350 $12.678.060 $12.128.378 $92.391.032 Notes Pavable In June 1993, the City entered into a note payable with the Price Company in order to provide funding for certain construction projects. Interest on the note accrues at the rate of 8% and is paid annually. Principal payments of $189,200 are paid annually commencing June 4, 1994. $1,324,400 In January 1994, the City entered into a note payable with Ignazio and Jean Adamo in order to purchase certain land and improvements for the ultimate purpose of constructing a three- level parking structure. The note calls for 240 monthly payments of principal and interest, commencing in April 1994 in the initial amount of $2,548 and increasing three percent annually. The annual interest rate is 8.294%. 368,678 In June 1995, the Agency entered into a note payable with Cypress Creek Company in order to provide for reimbursement of the Agency's agreed-upon share of site acquisition costs under the Palomar Trolley Center Disposition and Development 29 ., - . CITY OF CHULA VISTA Notes to Financial Statements (Continued) June 30, 1996 Agreement Installment payments of principal and interest will be payable within 30 days of the Agency receiving "Detailed Reports" from the State Board of Equalization itemizing the sources of the State Board of Equalization reconciliation payment for "Sales Tax Revenues." The Agency will remit an amount equal to thirty percent of the sales tax revenues generated by the project until the unpaid principal balance, plus any accrued interest is paid in full. Simple interest accrues at a rate of 7% annually. 729.561 Total Notes Payable $2.422.639 Loans Payable The Agency entered into loan agreements with a bank in order to purchase certain Orange Tree Mobilehome Park lots. These lots will be held by the Agency and rented to park residents until the residents or qualified buyers can purchase these lots from the Agency. The loans carry interest at 11.5% annually and mature in the year 2008. The Agency intends to sell the lots and payoff the loans in subsequent years and has therefore recorded the outstanding balances in the General Long-Term Debt Account. $315.723 Advances from Other Funds The Agency has entered into reimbursement agreements with the City to reimburse the City for certain lease payments made by the City under various lease agreements. Accrued interest in the amount of $298,907 is included in the balance at June 30, 1996. $4,264,025 The Chula Vista City Council authorized various loans to the Redevelopment Agency for operating purposes. The terms of the loans are indefinite. Accrued interest in the amount of $1,470,207 is included in the balance at June 30, 1996. 3,135,538 The Bayfront Town Center I Capital Projects Fund has advanced $9,459,803 to other Capital Projects Funds for operating purposes. The terms of the advances are indefinite. Accrued interest in the amount of $3,629,291 is included in the balance at June 30, 1996. 13,089,094 30 .. - . CITY OF CHULA VISTA Notes to Financial Statements (Continued) June 30, 1996 The Redevelopment Agency Special Revenue Fund has advanced $45,600 to the Redevelopment Agency Capital Projects Fund for operating purposes. The terms of the advance are indefinite. Accrued interest in the amount of $58,685 is included in the balance at June 30, 1996. 104,285 The Agency has recorded an advance to the Low and Moderate Income Housing Fund for the 20% set aside of tax increment received in the Redevelopment Agency Capital Projects Fund. This amount is required to be deposited into the Low and Moderate Income Housing Fund. Interest in the amount of $17,135 is included in the balance at June 30, 1996. 320.030 Total Advances from Other Funds $20.912.972 Pension Obligation Bonds The Pension Obligation Bonds, Series 1994 were issued by the City to pay the obligations from the City to the California Public Employees Retirement System for the City's unfunded pension liability. The total issue is comprised of the following: (1) Current Interest Bonds, with original amount due of $7,415,000. These bonds mature in amounts ranging from $310,000 in 1997 to $1,820,000 in 2009. Interest is payable semi-annually on February 1 and August 1, beginning February 1, 1996, at interest rates ranging from 6.05% to 7.875% annually; (2) $7,000,000 Term Bond due August 1, 2011, with a stated annual interest rate of 8.15%; (3) Capital Appreciation Bonds, with original amount due of $2,371,532. These bonds mature in the initial principal amounts ranging from $462,424 in 2002 to $480,409 in 2005 and $480,036 in 2006. The effective annual yield on these bonds ranges from 7.69% to 8.34%. The accreted value of the Capital Appreciation Bonds at June 30, 1996 was $2,816,334. $17.231.334 Tax AJlocation Bonds In November 1994, the Agency issued $14,810,000 1994 Senior Tax Allocation Refunding Bonds, Series A, to refund the 1986 Tax Allocation Bonds. The bonds consist of $1,925,000 serial bonds which mature from 1996 to 2004 in amounts ranging from $165,000 to $275,000 and $12,885,000 term bonds which mature in 2024. Interest is payable semi-annually on March 1 and September 1, at interest rates ranging from 5.6% to 7.625%. Bonds maturing on or after September 1, 2006 are subject to 31 ., -. - .' CITY OF CHULA VISTA Notes to Financial Statements (Continued) June 30, 1996 optional redemption on any interest payment date on or after September 1, 2005 at various redemption prices. $14,810,000 In February 1996, the Agency issued $5,680,000 1994 Senior Tax Allocation Refunding Bonds, Series D, to refund the Agency's BayfrontfTown Centre Redevelopment Project, 1994 Senior Tax Allocation Refunding Bonds, Series B. The 1994 Bonds, Series B, were paid off with the bond proceeds. The bonds are term bonds which mature in 2024. Interest is payable semi-annually on March 1 and September 1 at 8.625%. The bonds are subject to redemption prior to maturity on any interest payment date, on or after September 1, 2006 at various redemption prices. The bonds are subject to mandatory sinking fund redemption prior to maturity, in part, by lot, on September 1, 1996 and on each September 1 thereafter, without premium, from 1996 to 2024 in amounts ranging from $40,000 to $495,000. 5,680,000 In November 1994, the Agency issued $8,195,000 1994 Subordinate Tax Allocation Refunding Bonds, Series C, to refund the 1986 Tax Allocation Bonds. The bonds consist of $1,015,000 serial bonds which mature from 1996 to 2004 in amounts ranging from $85,000 to $145,000 and term bonds of $2,255,000 and $4,925,000 which mature in 2014 and 2024, respectively. Interest is payable semi-annually on May 1 and November 1 at interest rates ranging from 5.95% to 8.25%. The bonds are subject to optional redemption on any interest payment date on or after May 1, 2005 at various redemption prices. 8.110.000 Total Tax Allocation Bonds $28.600.000 Certificates of Participation In September 1987, the Agency issued $6,600,000 Certificates of Participation, Series B, to provide capital improvements and to advance refund the 1982 Parking Facility Certificates of Participation. The certificates mature in amounts ranging from $460,000 in 1996 to $735,000 in 2002. Interest is payable semi- annually on March 1 and September 1, at interest rates ranging from 7.75% to 8.5% annually. The 1987 Series B Certificates maturing after September 1, 1997 are subject to redemption at premiums ranging from zero to 2%. $ 4,110,000 32 .. -. - 0' CITY OF CHULA VISTA Notes to Financial Statements (Continued) June 30, 1996 In March 1993, the Agency issued $11,285,000 1993 Refunding Certificates of Participation to advance refund the 1987 Series A Certificates of Participation. The certificates mature in amounts ranging from $395,000 in 1996 to $925,000 in 2012. Interest is payable semi-annually on March 1 and September 1, at interest rates ranging from 4.25% to 6%. The certificates maturing after September 1, 2003 are subject to redemption at premiums ranging from zero to 2%. 10,385,000 In December 1993, the Agency issued $3,115,000 1993 Certificates of Participation to provide capital improvements in the Town Centre II Redevelopment Project of the Agency. Net proceeds of $2,600,000 were paid to Homart Development Co., for construction of a public parking facility. The certificates mature in amounts ranging from $110,000 in 1996 to $250,000 in 2013. Interest is payable semi-annually on March 1 and September 1, a interest rates ranging from 3.9% to 5.8%. The certificates maturing after September 1, 2013 are subject to redemption at premiums ranging from zero to 2%. 3.010.000 Total Certificates of Participation .$17.505.000 The annual requirements to amortize all debt outstanding in the General Long-term Debt Account Group, excluding the Cypress Creek note payable, loans payable, claims payable, advances from other funds and compensated absences, as of June 30, 1996, including interest of $69,812,595 are as follows: Year Tax Certificates Pension Ending Notes Allocation of Obligation June 30. Payable Bonds Participation Bonds Total 1997 $ 326,769 $ 2,562,262 $ 2,018,437 $ 1,424,520 $ 6,331,988 1998 313,678 2,556,029 2,013,633 1,496,980 6,380,320 1999 299,552 2,553,905 2,002,738 1,571,222 6,427,417 2000 286,058 2,549,841 2,005,503 1,651,263 6,492,665 2001 271,391 2,552,777 2,006,347 1,736,166 6,566,681 Thereafter 1.153.707 59.864.833 16.473.047 25.151.349 102.642.936 $2.651.155 $72.639.647 $26.519.705 $33.031.500 $134.842.007 33 ., - - .' CITY OF CHULA VISTA Notes to Financial Statements (Continued) June 30, 1996 8. NO COMMITMENT DEBT Bonds issued to finance public improvement projectsin certain assessment districts are liabilities of the property owners and are secured by liens against the assessed property. The City acts as an agent for collection of principal and interest payments by the property owners and remittance of such monies to the bondholders. The City has no obligation or duty to pay any delinquency out of any available funds of the City. Neither the faith and credit nor the taxing power of the City is pledged to the payment of the bonds. Therefore, none of the following obligations are included in the accompanying financial statements. Original Outstanding Issue Date Issued Amount June 30. 1996 85-1 Las Flores Drive June 1987 $ 1,621,568 $ 370,000 88-1 Otay Lakes Road June 1991 7,349,608 6,730,000 90-3 Eastlake Greens August 1991 22,352,427 18,635,000 91-1 Telegraph Canyon Road June 1992 6,839,455 6,485,000 90-1 Salt Creek 1 August 1992 4,747,262 4,505,000 90-2 Otay Valley Road September 1993 3,607,498 3,535,000 92-2 Autopark August 1994 1,976,364 1,940,000 90-2 Otay Valley Series B September 1995 2,119,994 2,075,000 94-1 Eastlake Greens II June 1995 7,464,474 7,464,474 1995 Assessment Bond Refinancing Series A June 1995 14,460,000 14,460,000 1995 Assessment Bond Refinancing Series B June 1995 4,795,000 4,795,000 In addition, the City has issued revenue bonds which do not constitute an indebtedness of the City. Neither the faith nor credit of the City is pledged for payment of the bonds. The bonds, together with interest thereon, are payable solely from and secured by the revenues to be derived pursuant to a Loan Agreement between the City and San Diego Gas and Electric Company. Accordingly, the assets and liability are not included in the financial statements. Year Original Outstanding Issue Issued Amount June 30. 1996 Industrial Development Revenue Bonds (San Diego Gas & Electric Company) 1992 $250,000,000 $250,000,000 34 .. - . CITY OF CHULA VISTA Notes to Financial Statements (Continued) June 30, 1996 In June 1995, the Chula Vista Public Financing Authority issued $14,460,000 Series A and $4,795,000 Series B Local Agency Revenue Bonds to facilitate the issuance of 1996 Assessment Bond Refinancing, Series A and B (see above and Note 9). The bonds, together with interest thereon, are payable from assessments collected from property owners and are secured by liens against the assessed property. The Authority has no obligation or duty to pay any delinquency out of any available funds of the Authority. Therefore, the bonds are not included in the General Long- Term Debt Account Group. Original Outstanding Issue Date Issued Amount June 30. 1996 Local Agency Revenue Bonds, Series A June 1995 $14,460,000 $14,460,000 Local Agency Revenue Bonds, Series B June 1995 4,795,000 4,795,000 9. DEFEASED DEBT a) In June 1995, the Chula Vista Public Financing Authority issued $14,460,000 Series A and $4,795,000 Series B Local Agency Revenue Bonds to purchase the 1995 Assessment Bond Refinancing, Series A and B (See Note 8). The refunding bonds (with no governmental commitment) were issued to refund the City's outstanding limited obligation improvement bonds for Assessment District Nos. 85-2, 86-1, 87-1, and 88-2. The bonds for Assessment District Nos. 87-1 and 88-2 had no government commitment. All assets and liabilities pertaining to these bonds were removed from the Agency funds. The bonds for Assessment District Nos. 85-2 and 86-1 had government commitment and were, therefore, previously included in the General Long- Term Debt Account Group. Accordingly, the liability for those bonds were removed from the General Long-Term Debt Account Group. The bonds were paid off in fiscal year 1995-96. b) In November 1994, the Agency advance refund $27,095,000 1986 Tax Allocation Bonds by placing in an irrevocable trust amounts sufficient to meet all future debt service payments of the refunded debt. As a result, the 1986 Tax Allocation Bonds were considered defeased and the liability was removed from the General Long-Term Debt Account Group. The 1986 bonds were paid off in fiscal year 1995-96. 35 .. - - CITY OF CHULA VISTA Notes to Financial Statements (Continued) June 30, 1996 c) On May 29, 1986, the Agency advance refunded $7,150,000 1979 Tax Allocation Bonds by placing in an irrevocable trust amounts sufficient to meet all future debt service payments of the refunded debt. As a result, the 1979 bonds were considered defeased and the liability was removed from the General Long-Term Debt Account Group. The outstanding balance at June 30, 1996 was $4,575,000. d) On March 1, 1993, the Agency advance refunded $9,640,000 1987 Series A Certificates of Participation by placing in an irrevocable trust amounts sufficient to meet all future debt service payments of the refunded debt. As a result, the 1987 bonds were considered defeased and the liability was removed from the General Long-Term Debt Account Group. The outstanding balance at June 30, 1996 was $8,940,000. 10. INTERFUND RECEIV ABLESIP A Y ABLES At June 30, 1996 interfund receivables and payables consisted of the following: Receivables Parables General Fund $ 7,444,974 Special Revenue Funds: Transportation Grants $ 146,228 Sewer Fund 2,989,286 Sundry Grants 336,861 Redevelopment Agency 424,315 Other Miscellaneous Funds 31,521 Capital Projects Funds: Capit¡¡l Improvement Program 1,156,254 Library Construction 641,644 Development Impact Funds 571,200 Redevelopment Agency 13,089,094 2,418,085 Internal Service Funds: Central Garage 550,000 Equipment Replacement 550,000 Agency Fund: Special Assessment Districts 45,412 Long-term Debt Account Group (See Note 7) 20.912.972 $25.653.923 $25.653.923 36 .. CITY OF CHULA VISTA Notes to Financial Statements (Continued) June 30, 1996 11. DEFERRED REVENUE Deferred revenue consisted of the following at June 30, 1996: Interest Receivable on: Advances to other funds $5,238,789 Loans Receivable: Shinohara (See Note 4) 382,007 One Park, Ltd (See Note 4) 1,170,975 Chula Vista Bayfront Conservancy Trust (See Note 12) 1,125,917 CHIP (See Note 4) 105,663 South Bay Communities Services (See Note 4) 131,956 Unearned grant revenue 735,404 Advance to other funds (See Note 7) 302,895 Long-term receivable 595,690 Other 32.673 Total Deferred Revenue $9.821.969 12. ADVANCES BETWEEN COMPONENT UNIT AND PRIMARY GOVERNMENT As of June 30, 1996, the City and Agency had advanced $2,180,230 and $2,072,724, respectively to the Chula Vista Bayfront Conservancy Trust. Interest accrues annually at rates ranging from 5.5% to 11 %. The Trust entered into a Lease, Loan and Operating Agreement (the "Agreement") with the City and the Agency for the use of a building and other facilities. The lease portion of the agreement requires payment of $1 per year through July 1997. The Agreement states that the intention of the parties is to negotiate a longer lease term before the end of the current term and indicates that the rental payment may be increased to fair market value at that time. In addition, the Agreement sets forth certain operating provisions to be followed by the Trust. Furthermore, the Agreement calls for the Trust to develop a repayment schedule on the advances by July 1997. Should the parties fail to reach agreement by then, the outstanding advances and interest shall be due and payable in July 1997. The Trust is subject to certain covenants detailed in the Three Party Agreement which includes the requirement that the Trust maintain minimum insurance coverages. The Trust is in compliance with all covenants. As of June, 30, 1996 the Trust had an accumulated deficit of $4,138,410 (See Note 19). Accrued interest in the amount of $1,125,917 is included in the balance at June 30, 1996. $4.252.954 37 CITY OF CHUrA VISTA Notes to Financial Statements (Continued) June 30, 1996 13. FUND BALANCES RESERVATIONS AND DESIGNATIONS The various reserves established as of June 30, 1996, are described below: General Fund Encumbrances $ 662,277 Long-Term Receivables 8,004,853 Assessment District Debt 572.749 Total Reserved $9.239.879 Special Revenue Funds Encumbrances $ 495,412 Low and Moderate Income Housing 3,546,995 Long-Term Receivables 10,028,209 Restricted Assets 774,512 Capital Projects 100.000 Total Reserved $14.945.128 Debt Service Funds Debt Service $6.980.311 Capital Projects Funds Encumbrances $ 229,924 Long-Term Receivables 13.838.675 Total Reserved $14.068.599 Reserve for Encumbrances: These reserves represent the portion of purchase orders and contracts for goods and services which had not been received at June 30, 1996. Reserve for Long-Term Receivables: This reserve is established for long-term receivables. 38 CITY OF CHULA VISTA Notes to Financial Statements (Continued) June 30, 1996 Reserve for Assessment District Debt: Under the indenture of trust for the limited Obligation Improvement Bonds, Series A & B, Assessment District No. 90-2 (Otay Valley Road),the City has made a limited pledge in lieu of setting up a cash debt service reserve fund which is intended to cover deficiencies in the Redemption fund from available City funds in amount equal to a typical debt service reserve fund. Reserve for Low and Moderate Income Housing: This reserve is established for funds set aside to benefit low and moderate income housing within the redevelopment area. Reserve for Restricted Assets: This reserve is established for restricted assets under the Housing program. Reserve for Capital Projects: This reserve is established to set-aside funds which are committed for capital projects under certain agreements. Reserve for Debt Service: Funds collected and interest earned on these funds are reserved for future principal and interest payments of general long-term debt. Designations: $4,140,941 of the General Fund unreserved fund balance is designated for contingencies and self-insurance. $512,416 of the Special Revenue funds unreserved fund balance is designated for contingencies. The Capital Projects Funds unreserved fund balance of $27,965,288 is designated for capital projects. 14. SEGMENT INFORMATION FOR ENTERPRISE FUNDS The City maintains two enterprise funds which provide transit services. Segment information for the year ended June 30, 1996, is as follows: 39 CITY OF CHULA VISTA Notes to Financial Statements (Continued) June 30, 1996 Handitran Transit Fund Fund Total Operating Revenues $1,431,479 $ 69,945 $1,501,424 Depreciation 416,301 416,301 Operating Loss (2,214,702) (156,451) (2,371,153) Intergovernmental Revenues 1,960,097 149,976 2,110,073 Net Loss (194,481) (194,481) Total Assets 8,218,744 95,650 8,314,394 Net Working Capital 4,427,812 4,427,812 Total Equity 7,189,883 7,189,883 15. DEFERRED COMPENSATION The City has made available to its employees a deferred compensation plan, created in accordance with Internal Revenue Code Section 457. The plan, available to all City employees, permits them to defer a portion of their salary to be deposited in individual investment accounts. Funds may be withdrawn by participants upon termination of employment, retirement, or certified emergency. The plan is administered by an independent plan administrator. All amounts of compensation deferred under the plan, all property and rights purchased with those amounts, and all income attributable to those amounts, property, or rights are (until paid or made available to the employee or other beneficiary) solely the property and rights of the City (without being restricted to the provisions of benefits under the plan), subject only to the claims of the City's general creditors. Participants' rights under the plan are equal to those of general creditors of the City in an amount equal to the fair market value of the deferred account for each participant. The City has no liability for losses under the plan but does have the duty of due care that would be required of an ordinary prudent investor. The City believes that it is unlikely that it will use the assets to satisfy the claims of general creditors in the future. Assets of the fund totaled $16,525,825 at June 30, 1996. The assets are stated at market value. 16. PUBLIC EMPLOYEES RETIREMENT SYSTEM P1an Description: PERS Defined Benefit Pension Plan: The City contributes to the State of California Public Employees' Retirement System (PERS), an agent multiple-employer public employee retirement system that act as a common investment and administrative agent for cities and school districts in California. The City's payroll for employees covered by PERS for the year ended June 30, 1996 was $33,077,826; the City's total payroll was $33,550,050. 40 ., - . CITY OF CHULA VISTA Notes to Financial Statements (Continued) June 30, 1996 All salaried full-time and part-time City employees are eligible to participate in PERS. Participants in the plan vest after 5 years of employment. Employees in the plan who retire at or after age 50 receive annual retirement benefits calculated based on age, years of service and compensation during the last 12 consecutive months of employment or another period of 12 consecutive months selected by the member if the average payrate was higher. PERS also provides death and disability benefits. These benefit provisions and all other requirements are established by State statute and City ordinance. Employee and Emplover Contribution Obli~ations: By contract terms, the City makes the total contribution required of local miscellaneous members on the employee's behalf and for their acco!.mt. For local safety members, the City makes a contribution of between 2% and the entire 9% on the employee's behalf, depending on the contractual agreement with the particular bargaining group. The rates are set by statute and therefore remain unchanged from year to year. Member Rates as a Percentage of Wages Local miscellaneous members 7% Local safety members 9% The City is required to contribute the remaining amounts necessary to fund the benefits for its members, using the actuarial losses recommended by the PERS actuaries and actuarial consultants and adopted by the Board of Administration. Funding Status and Progress: The amount shown below as the "pension benefit obligation" is a standardized measure of the present value of pension benefits, adjusted for the effects of step- rate benefits, estimated to be payable in the future as a result of employee service to date. The measure is intended to help assess the funding status of the system on a going-concern basis, assess progress made in accumulating sufficient assets to pay benefits when due, and make comparisons among employers. The measure is the actuarial present value of credited projected benefits and is independent of the funding method used to determine contributions to the system. The pension benefit obligation was computed as part of an actuarial valuation performed as of June 30, 1996. Significant actuarial assumptions used in the valuation include a rate of return on the investment of present and future assets of 8.5 percent a year compounded annually. The salary scale used assumes salary 41 "I - . CITY OF CHULA VISTA Notes to Financial Statements (Continued) June 30, 1996 increases that vary by length of service. The total increase in any future year includes an assumed 4.5 percent inflation rate, no across the board increase and merit increases that vary by length of service. The assets in excess of the pension benefit obligation applicable to the City employees was $16,086,501 at June 30, 1996 (based upon June 30, 1995 data), as follows: Pension Benefit Obligation: Retirees and beneficiaries currently receiving benefits and terminated employees not yet receiving benefits $ 61,865,562 Current Employees: Accumulated employee contributions including allocated investment earnings 32,242,695 Employer-financed vested 36,656,221 Employer-financed nonvested 1.776.621 Total Pension Benefit Obligation 132,541,099 Net Assets Available for Benefits at Cost (Market Value is $157,991,139) 148.627.600 Assets in Excess of Pension Benefit Obligation $ 16.086.501 Changes in the pension benefit obligation from last year attributable to changes in benefit provisions were $(3,760,465). ActuarialJv-Determined Contribution Requirements and Contribution Made: PERS uses the Entry Age Normal Actuarial Cost Method which is a projected benefit cost method. That is, it takes into account those benefits that are expected to be earned in the future as well as those already accrued. According to this cost method, the normal cost for an employee is the level amount which would fund the projected benefit if it were paid annually from date of employment until retirement. PERS uses a modification of the Entry Age Cost Method in which the employer's total normal cost is expressed as a level percent of payroll. PERS also uses the level percentage of payroll method to amortize any unfunded actuarial liabilities. The amortization period of the unfunded actuarial liability ends in the year 2000 for prior service benefits and in the year 2011 for current service benefits. 42 CITY OF CHULA VISTA Notes to Financial Statements (Continued) June 30, 1996 The significant actuarial assumptions used to compute the actuarially-determined contribution requirement are the same as those used to compute the pension benefit obligation, as previously described. The contribution to the system for 1996 of $5,503,081 was made in accordance with actuarially determined requirements computed through an actuarial valuation performed as of June 30, 1994. The contribution consisted of (a) $5,658,965 normal cost (17.1 percent of current covered payroll), and (b) $(155,884) amortization of the unfunded actuarial accrued liability ( (.47) percent of current covered payroll). The City contributed employer contributions of $2,907,334 (8.8 percent of current covered payroll) and $2,595,747 (7.9 percent of current covered payroll) on behalf of its employees. Trend Information: Trend information gives an indication of the progress made in accumulating sufficient assets to pay benefits when due. Within the City's financial statements, ten years of historical trend information are required. 1987-88 is the first year that this actuarial information has been made available by PERS. Until ten years of data are available, as many years as are available are presented as follows: (In Millions) ]987-88 ]98%'9 ]989-90 1<,00.9] ]991-92 ]992-93 ]993-94 ]994-95 ]995-96 Net Assets Available for Benefits 44.9 52] 61.0 68.9 762 84.9 111.9 B72 148.6 Pemion Benefit Obligation 54.0 61.0 69.1 79.9 'æ.7 101.7 110.0 116.0 B25 Net Assets Available for Benefits Exprered as Ii P=ntage of the Pension Benefit Obligation 832% 855% 883% 86.! % 84.9% 835% 101.8% 118.2% 112!% Unfimded (Assets in F= ot) Pension Benefit Obligation' 9.1 8.8 8.1 11.0 135 !6.8 (20) (2!2) (!6.1) Annual Covered Payroll 20.1 22.9 262 28.8 31.6 342 35.7 328 33.1 43 ., - . CITY OF CHULA VISTA Notes to Financial Statements (Continued) June 30, 1996 1987.æ 19&%'9 1989-~ 1m91 1991-92 1992-93 1993-94 1994-95 1995-96 Unfimded (Assets in Excess of) Pension Benefit Obligation, &pressed as a Percentage of Annual Covered Payroll 453% 38.4% 30.9% 38.2% 427% 49.1% (5.6)% (64.6)% (48.63)% Employer Contributions (1) (1) (1) (1) 42 4.07 4.50 289 291 Employer Contributions &pressed as a Percentage of Annual Covered Payroll These conaibutions \'>ere made in accordance with actuarially detetmined requirements (1) (1) (1) (1) 133% 11.9% 126% 8.8% 8.8% (1) Not available Plan Description: Defined Contribution Pension Plan The City provides pension benefits for all of its part-time employees through a defined contribution plan (Public Agency Retirement Plan). In a defined contribution plan, benefits depend solely on amounts contributed to the plan plus investment earnings. The plan is administered as part of the City's 457 plan. All part-time employees are eligible to participate from the date of employment. Federal legislation requires contributions of at least 7.5% to a retirement plan, and City Council resolved to match the employees' contributions of 3.75%. The City's contributions for each employee (and interest earned by the accounts) are fully vested immediately. For the year ended June 30, 1996, the City's total payroll and covered payroll was $1,658,443. The City made employer contributions of $60,623 (3.75 percent of current covered payroll), and employees contributed $60,623 (3.75 percent of current covered payroll). 17. PRIOR PERIOD ADJUSTMENTS Interest of $66,514 on Community Housing Improvement Program (CHIP) loans was not deferred at June 30, 1995. The beginning fund balance of the Special Revenue Funds has been restated as follows: As Previously Reported $43,358,707 Adjustment (66.514) As Restated $43.292.193 44 ., - CITY OF CHULA VISTA Notes to Financial Statements (Continued) June 30, 1996 18. INSURANCE PROGRAMS The City is a member of the San Diego Pooled Insurance Program Authority (SANDPIP A) which provides general liability insurance. As a member, the City carries a self-insured retention of $250,000 and is insured through SAND PIP A from $250,000 to $2,000,000. In addition, SANDPIPA has purchased excess insurance coverage from $2,000,000 to $15,000,000 for all of its members, including the City. For workers' compensation claims, the City has purchased insurance for claims in excess of $250,000. SANDPIP A is a joint venture of twelve cities located within San Diego County. Each city has equal representation on the Board of Directors, which consists of a city staff member (and an alternate) appointed by each city's City Council. The Board of Directors has total responsibility for all actions of SANDPIPA The Board of Directors elects three members (including a President and Vice President) to the Executive Committee, which has a responsibility for overseeing all operations of SANDPIPA, including preparation and submission of the annual operating budget to the Board of Directors for its approval and modification, if deemed necessary. Annual premiums and assessments are approved by the Board of Directors and are adjusted each year based on the following criteria: Each city's incurred losses; Each city's share of such losses and other expenses as a proportion of all cities' such losses; Each city's contribution to reserves, including reserves for incurred-but-not reported losses; Each city's share of costs to purchase excess insurance; and Each city's share of costs to purchase any additional coverage. Only the probable amounts of loss as estimated by legal counsel and the city, including an estimate for incurred but not reported losses, have been recorded as liabilities in the accompanying financial statements. 45 ., - . CITY OF CHUrA VISTA Notes to Financial Statements (Continued) June 30, 1996 The changes in the claims liability for the year ended June 30, 1996 were as follows: General Workers' Liability Compensation Total Claims payable, beginning of year $1,583,349 $1,734,310 $3,317,659 Current year claims and changes in estimates 418,826 1,690,746 2,109,572 Claim payments (1.186.368) (1.310.989) (2.497.357) Claims payable, end of year $ 815.807 $2.114.067 $2.929.874 19. OTHER REOUIRED INDIVIDUAL FUND DISCLOSURES Total expenditures exceeded total appropriations in the following funds and amounts: Special Revenue Funds: Housing Programs Fund $ 4,842 Baldwin Project Management Fund 321,496 Debt Service Funds: 1990 COP Fund 164,336 1994 POB Fund 4,327 The following funds had fund balance/retained earnings deficits at June 30, 1996: Library Construction Capital Projects Fund $248,233 Central Garage Internal Service Fund 594,886 The deficits are expected to be eliminated with increase in future revenues or operating transfers from other funds. The Chula Vista Bayfront Conservancy Trust has an accumulated deficit of $4,138,410 at June 30, 1996. Approximately $330,688 of the deficit relates to accumulated non-cash depreciation expense and $1,125,917 relates to interest expense accrued on advances payable. The remaining balance is due to operations expenses funded by advances from the City and the Redevelopment Agency of the City of Chula Vista. Effective June 1, 1993 the Trust began collecting admission fees. In addition, management of the City of Chula Vista intends to form an assessment district to fund the advances repayment and operations on an ongoing basis. 46 ., - - CITY OF CHULA VISTA Notes to Financial Statements (Continued) June 30, 1996 20. COMMITMENTS AND CONTINGENCIES At June 30, 1996, the City has been named as a defendant in various discrimination cases. The city intends to contest the allegations made, but the results of the litigation are not presently determinable. However, in the opinion of management, the amount of losses that might be sustained would not materially affect the City's fmancial position. In August 1994, the Agency entered into a Disposition and Development Agreement with Wal-Mart Stores and Chula Vista Town Centre Associates, LP., for the development of a Wal-Mart Store within the Town Centre II Project Area. Under the agreement, the Agency has agreed to reimburse the Redeveloper $1,915,000. The payments on the note are to be based on a percentage of the sales tax revenues generated by the store. A lawsuit has been filed contesting the legality of the Agency entering into such an agreement. The litigation was successful at the trial court level, thereby negating the Agency's obligation under the promissory note. However, there remains a possibility that the trial court decision could be overturned on appeal. The amount that the Agency would have had to pay Wal- Mart Stores in fiscal year 1995-96 under the note was $13,300. 21. SUBSEOUENT EVENT Proposition 218, which was approved by the voters in November 1996, will regulate the City's ability to impose, increase and extend taxes, assessments and fees. Any new, increased, or extended taxes, assessments, and fees subject to the provisions of Proposition 218, require voter approval before they can be implemented. Additionally, Proposition 218 provides that these taxes, assessments, and fees are subject to the voter initiative process and may be rescinded in the future by the voters. ~Therefore, the City's ability to finance the services for which the taxes, assessments, and fees were imposed may be significantly impaired. At this time it is uncertain how Proposition 218 will affect the City's ability to maintain or increase the revenue from taxes, assessments and fees. 47 " - . This page intentionally left blank. 48 .. - . SUPPLEMENTARY INFORMATION "I .. .. .. CITY OF CHULA VISTA Combining Balance Sheet - All Special Revenue Funds June 30, 1996 Trans- portation Parking Traffic Sewer ~ Grants Meter Safety Funds Cash and investments $ 1,271,521 $ 141,831 $ 20,370,229 Receivables: Accounts 237,967 2,226 $ 10,479 2,133,403 Taxes 1,811 21,491 Interest 3,434 302 104 35,394 Grants Loans receivable 15,300 Advances to component unit 49,238 Advances to other funds 2,989,286 Restricted Assets: Cash and investments Total Assets $ 1.514,733 $ 144.359 $ 10.583 $ 25.614.341 Liabilities and Fund Balances Liabilities: Accounts payable $ 7,891 $ 377 $ 859,888 Accrued liabilities 4,556 Due to other funds 146,228 Deferred revenue 265,247 Total Liabilities 154,119 4,933 1,125,135 Fund Balances: Reserved for: Encumbrances 127,971 801 130,139 Low and moderate income housing Long-term receivables 2,788,852 Restricted assets Capital projects Unreserved: Designated for contingencies 31,994 106,029 346,022 Unreserved and undesignated 1,200,649 32,596 $ 10,583 21,224,193 Total Fund Balances 1,360,614 139,426 10,583 24,489,206 Total Liabilities and Fund Balances $ 1.514.733 $ 144.359 $ 10,583 $ 25.614.341 50 " - - Open Golf Town Space Housing Course Transit Sundry Centre I Districts Programs Revenue Service Grants $ 7,830 $ 2,299,588 $ 774,976 $ 9,616 $ 482,619 18,775 14 4,302 1,334 133,141 371,554 $ 771,006 896,818 774,512 $ 7,844 $ 2,322,665 $ 1,545.518 $ 776.310 $ 9.616 $ 1.884.132 $ 52,941 $ 11,138 $ 9,616 13,866 336,861 131,971 52,941 9,616 493,836 92,229 18,083 $ 771,006 896,818 774,512 $ 100,000 28,371 $ 7,844 2,177,495 676,310 447,024 7,844 2,269,724 1,545,518 776,310 1,390,296 $ 7,844 $ 2,322.665 $ 1.545.518 $ 776,310 $ 9.616 $ 1.884.132 (Continued) 51 ., - , CITY OF CHULA VISTA Combining Balance Sheet - All Special Revenue Funds (Continued) June 30, 1996 Special Traffic Capital Bayfront Redevelopment ~ Signal Outlay Trolley Agency Cash and investments $ 652,221 $ 122,328 $ 2,509,885 Receivables: Accounts Taxes 22,970 Interest 1,011 218 1,280,490 Grants Loans receivable 5,525,933 Advances to component unit Advances to other funds 424,315 Restricted Assets: Cash and investments 1,048,953 Total Assets $ 653,232 $ - $ 122,546 $ 10,812,546 Liabilities and Fund Balances Liabilities: Accounts payable $ 7,500 Accrued liabilities Due to other funds Deferred revenue $ 1,655,351 Total Liabilities 7,500 1,655,351 Fund Balances: Reserved for: Encumbrances 2,310 36,998 Low and moderate income housing 3,546,995 Long-term receivables 5,571,533 Restricted assets Capital projects Unreserved: Designated for contingencies Unreserved and undesignated $ 653,232 112,736 1,669 Total Fund Balances 653,232 115,046 9,157,195 Total Liabilities and Fund Balances $ 653,232 $ - $ 122,546 $ 10,812.546 52 .. - , Baldwin Trans- Other Project portation Miscellaneous Management Sales Tax: Funds Total $ 100,763 $ 3,998,464 $ 34,364 $ 32,776,235 88,157 2,472,232 65,047 292 7,386 253 1,467,675 208,299 579,853 7,209,057 49,238 3,413,601 1,823,465 $ 189,212 $ 4,005.850 $ 242,916 $ 49.856,403 $ 31,865 $ 87,919 $ 21,929 $ 1,081,448 5,839 33,877 31,521 514,610 62,740 2,115,309 31,865 87,919 122,029 3,745,244 19,127 24,425 43,329 495,412 3,546,995 10,028,209 774,512 100,000 512,416 138,220 3,893,506 77,558 30,653,615 157,347 3,917,931 120,887 46,111,159 $ 189.212 $ 4,005,850 $ 242,916 $ 49,856,403 53 .. - - CITY OF CHULA VISTA Combining Statement of Revenues, Expenditures, and Changes in Fund Balances All Special Revenue Funds For the Year Ended June 30, 1996 Trans- portation Parking Traffic Sewer Grants Meter Safety Funds Revenues: Taxes $ 2,794,152 Intergovernmental Charges for services $ 357,171 $ 12,802,171 Fines and forfeitures $ 116,354 Revenue &om use of money and property 94,633 14,069 1,239,966 Other 1,250 110,397 Total Revenues 2,890,035 371,240 116,354 14,152,534 Expenditures: Current: General government 436,572 9,006,956 Public works 2,972,772 Library Debt service: Principal Interest and fiscal charges Total Expenditures 2,972,772 436,572 9,006,956 Excess (Deficiency) of Revenues Over Expenditures (82,737) (65,332) 116,354 5,145,578 Other Financing Sources (Uses): Operating transfers in 14,898 551,191 Operating transfers out (51,925) (144,127) (4,504,060) Total Other Financing Sources (Uses) (51,925) (129,229) (3,952,869) Excess (Deficiency) of Revenues and Other Sources Over Expenditures and Other Uses (82,737) (117,257) (12,875) 1,192,709 Fund Balances, Beginning, Restated 1,443,351 256,683 23,458 23,296,497 Residual Equity Transfer Out Fund Balances, Ending $ 1.360.614 $ 139.426 $ 10.583 $ 24.489.206 54 .. - - Open Golf Town Space Housing Course Transit Sundry Centre 1 Districts Programs Revenue Service Grants $ 1,154,448 $ 264,895 $ 3,088,910 $ 4,319 121,023 $ 16,973 $ 308,399 12,573 35,939 3,500 250 36 7,819 1,275,471 16,973 308,649 277,468 3,124,885 134,000 4,842 207,469 1,688,842 12,155 2,941,649 108,845 134,000 1,688,842 4,842 12,155 207,469 3,050,494 (126,181) (413,371) 12,131 296,494 69,999 74,391 95,109 (51,680) (400,000) (355,675) (51,680) (400,000) (260,566) (126,181) (413,371) 12,131 244,814 (330,001) (186,175) 134,025 2,683,095 1,533,387 531,496 499,175 1,576,471 (169,174) $ 7.844 $ 2.269.724 $ 1.545.518 $ 776.310 $ - $ 1.390.296 (Continued) 55 I -. - .. CITY OF CHULA VISTA Combining Statement of Revenues, Expenditures, and Changes in Fund Balances All Special Revenue Funds (Continued) For the Year Ended June 30, 1996 Special Traffic Capital BayfTont Redevelopment Signal Outlay Trolley Agency Revenues: Taxes $ 1,022,437 Intergovernmental $ 39,396 647,843 Charges for services 366,249 156,454 Fines and forfeitures Revenue from use of money and property 74,498 $ 2,350 $ 6,419 184,202 Other 1,500 Total Revenues 480,143 2,350 6,419 2,012,436 Expenditures: Current: General government 5,381 45 13,456 532,151 Public works Library Debt service: Principal 12,197 Interest and fiscal charges 864 Total Expenditures 5,381 45 13,456 545,212 Excess (Deficiency) of Revenues Over Expenditures 474,762 2,305 (7,037) 1,467,224 Other Financing f'ources (Uses): Operating transfers in 377,040 Operating transfers out (982,200) (151,610) Total Other Financing Sources (Uses) (605,160) (151,610) Excess (Deficiency) of Revenues and Other Sources Over Expenditures and Other Uses (130,398) (149,305) (7,037) 1,467,224 Fund Balances, Beginning, Restated 783,630 149,305 122,083 7,689,971 Residual Equity Transfer Out Fund Balances, Ending $ 653,232 $ - $115.046 $ 9.157.195 56 " - Baldwin Trans- Other Project portation Miscellaneous Management Sales Tax Funds Total $ 3,308,348 $ 8,279,385 $ 590,406 4,631,450 $ 4,846 13,686,891 116,354 5,948 144,259 4,156 2,269,726 608,377 33,234 758,544 619,171 3,452,607 627,796 29,742,350 518,450 507,933 11,367,255 1,944,913 9,560,331 108,845 12,197 864 518,450 1,944,913 507,933 21,049,492 100,721 1,507,694 119,863 8,692,858 522 1,038,760 (102,201) (6,743,478) (101,679) (5,704,718) 100,721 1,507,694 18,184 2,988,140 56,626 2,410,237 102,703 43,292,193 (169,174) $157.347 $ 3,917.931 $ 120.887 $ 46.111,159 57 ., - . CITY OF CHULA VISTA Schedule of Revenues, Expenditures and Changes in Fund Balance Budget and Actual- (Budgetary Basis) Transportation Grants Special Revenue Fund For the Year Ended June 30, 1996 Actual on a Variance Budgetary Favorable Budget Basis (Unfavorable) Revenues: Taxes $ 2,679,565 $ 2,794,152 $ 114,587 Revenue ITom use of money and property 125,200 94,633 (30,567) Other 1,250 1,250 Total Revenues 2,804,765 2,890,035 85,270 Expenditures: Current: Public works 3,662,400 3,100,743 561,657 (Deficiency) of Revenues Over Expenditures (857,635) (210,708) 646,927 Fund Balance, Beginning 1,443,351 1,443,351 Fund Balance, Ending $ 585,716 $ 1,232,643 $ 646.927 58 ., - - CITY OF CHULA VISTA Schedule of Revenues, Expenditures and Changes in Fund Balance Budget and Actual - (Budgetary Basis) Parking Meter Special Revenue Fund For the Year Ended June 30, 1996 Actual on a Variance Budgetary Favorable Budget Basis (Unfavorable) Revenues: Charges for services $445,000 $ 357,171 $ (87,829) Revenue from use of money and property 12,000 14,069 2,069 Total Revenues 457,000 371,240 (85,760) Expenditures: Current: General government 483,707 437,373 46,334 (Deficiency) of Revenues Over Expenditures (26,707) (66,133) (39,426) Other Financing Uses: Operating transfers out (50,000) (51,925) (1,925) (Deficiency) of Revenues Over Expenditures and Other Uses (76,707) (118,058) (41,351) Fund Balance, Beginning 256,683 256,683 Fund Balance, Ending $179.976 $ 138.625 $ (41.351) 59 ., . . CITY OF CHULA VISTA Schedule of Revenues, Expenditures and Changes in Fund Balance Budget and Actual- (Budgetary Basis) Traffic Safety Special Revenue Fund For the Year Ended June 30, 1996 Actual on a Variance Budgetary Favorable Budget Basis (Unfavorable) Revenues: Fines and forfeitures $ 156,600 $ 116,354 $ (40,246) Revenue fTom use of money and property 2,600 (2,600) Total Revenues 159,200 116,354 (42,846) Other Financing Sources (Uses): Operating transfers in 14,898 14,898 Operating transfers out (159,200) (144,127) 15,073 Total Other Financing Sources (Uses) (159,200) (129,229) 29,971 (Deficiency) of Revenues and Other Sources Over Other Uses (12,875) (12,875) Fund Balance, Beginning 23,458 23,458 Fund Balance, Ending $ 23.458 $ 10,583 $ 02,875) 60 ., - - CITY OF CHULA VISTA Schedule of Revenues, Expenditures and Changes in Fund Balance Budget and Actual - (Budgetary Basis) Sewer Funds Special Revenue Fund For the Year Ended June 30, 1996 Actual on a Variance Budgetary Favorable Bud¡¡;et Basis (Unfavorable) Revenues: Charges for oervices $ 12,393,798 $ 12,802,171 $ 408,373 Revenue ITom use of money and property 31,400 1,239,966 1,208,566 Other 110,397 110.397 Total Revenues 12,425,198 14,152,534 1,727,336 Expenditures: Current: General government 9.185,293 9.137,095 48.198 Excess of Revenues Over Expenditures 3,239.905 5.015.439 1. 775.534 Other Financing Sources (Uses): Operating transfers in 29,392 551,191 521,799 Operating transfers out (3,077.984) (4.504.060) 0.426,076) Total Other Financing Sources (Uses) (3.048,592) (3,952.869) (904,277) Excess of Revenues and Other Sources Over Expenditures and Other Uses 191,313 1,062,570 871,257 Fund Balance, Beginning 23.296.497 23.296.497 Fund Balance, Ending $ 23 487 810 $ 24359067 $ 871 257 61 .. - - CITY OF CHULA VISTA Schedule of Revenues, Expenditures and Changes in Fund Balance Budget and Actual- (Budgetary Basis) Town Center I Special Revenue Fund For the Year Ended June 30, 1996 Actual on a Variance Budgetary Favorable Budget Basis (Unfavorable) Revenues: Revenue from use of money and property $ 5,700 $ 4,319 $ (1,381) Other 29,000 3,500 (25,500) Total Revenues 34,700 7,819 (26,881) Expenditures: Current: General government 139,862 134,000 5,862 (Deficiency) of Revenues Over Expenditures (105,162) (126,181) (21,019) Fund Balance, Beginning 134,025 134,025 Fund Balance, Ending $ 28.863 $ 7.844 $ (21,019) 62 .. - - CITY OF CHULA VISTA Schedule of Revenues, Expenditures and Changes in Fund Balance Budget and Actual- (Budgetary Basis) Open Space Districts Special Revenue Fund For the Year Ended June 30, 1996 Actual on a Variance Budgetary Favorable Budget Basis (Unfavorable) Revenues: Taxes $ 1,093,971 $ 1,154,448 $ 60,477 Revenue fÌ"om use of money and property 5,900 121,023 115,123 Total Revenues 1,099,871 1,275,471 175,600 Expenditures: Current: Public works 2,215,746 1,781,071 434,675 (Deficiency) of Revenues Over Expenditures (1,115,875) (505,600) 610,275 Fund Balance, Beginning 2,683,095 2,683,095 Fund Balance, Ending $ I.567,220 $ 2,177,495 $ 610,275 63 '1 . . CITY OF CHULA VISTA Schedule of Revenues, Expenditures and Changes in Fund Balance Budget and Actual- (Budgetary Basis) Housing Programs Special Revenue Fund For the Year Ended June 30, 1996 Actual on a Variance Budgetary Favorable Budget Basis (Unfavorable) Revenues: Revenue from use of money and property $ 16,973 $ 16,973 Expenditures: Current: General Government 4,842 (4,842) Excess of Revenues Over Expenditures 12,131 12,131 Fund Balance, Beginning $ 1,533,387 1,533,387 Fund Balance, Ending $ 1,533,387 $ 1,545.518 $ 12.131 64 .. CITY OF CHULA VISTA Schedule of Revenues, Expenditures and Changes in Fund Balance Budget and Actual - (Budgetary Basis) Golf Course Revenue Special Revenue Fund For the Year Ended June 30, 1996 Actual on a Variance Budgetary Favorable Budget Basis (Unfavorable) Revenues: Revenue ITom use of money and property $ 293,000 $ 308,399 $ 15,399 Other 100 250 150 Total Revenues 293,100 308,649 15,549 Expenditures: Current: Public works 12,155 12,155 Excess of Revenues Over Expenditures 280,945 296,494 15,549 Other Financing Uses: Opemtingtr~fursout (51,680) (51,680) Excess of Revenues Over Expenditures and Other Uses 229,265 244,814 15,549 Fund Balance, Beginning 531,496 531,496 Fund Balance, Ending $ 760.761 $ 776.310 $ 15.549 65 CITY OF CHULA VISTA Schedule of Revenues, Expenditures and Changes in Fund Balance Budget and Actual- (Budgetary Basis) Transit Service Special Revenue Fund For the Year Ended June 30, 1996 Actual on a Variance Budgetary Favorable Budget Basis (Unfavorable) Revenues: Intergovernmental $212,830 $ 264,895 $ 52,065 Revenue ITom use of money and property 19,600 12,573 (7,027) Total Revenues 232,430 277,468 45,038 Expenditures: Current: General government 212,830 207,469 5,361 Excess of Revenues Over Expenditures 19,600 69,999 50,399 Other Financing Uses: Operating transfers out (400,000) (400,000) Excess (Deficiency) of Revenues Over Expenditures and Other Uses 19,600 (330,001) (349,60 I) Fund Balance, Beginning 499,175 499,175 Residual Equity Transfers Out (169,174) (169,174) Fund Balance, Ending $518,775 $ - $ (518,775) 66 CITYOFCHULA VISTA Schedule of Revenues, Expenditures and Changes in Fund Balance Budget and Actual - (Budgetary Basis) Sundry Grants Special Revenue Fund Forthe Year Ended June 30,1996 Actual on a Variance Budgetary Favorable Budget Basis (Unfavorable) Revenues: Intergovernmental $ 5,557,625 $ 3,088,910 $ (2,468,715) Revenue from use of money and property 39,300 35,939 (3,361) Other 36 36 Total Revenues 5,596,925 3,124,885 (2,472,040) Expenditures: Current: Public works 6,747,998 2,941,649 3,806,349 Library 179,318 126,928 52,390 Total Expenditures 6,927,316 3,068,577 3,858,739 Excess (Deficiency) of Revenues Over Expenditures (1,330,391) 56,308 1,386,699 Other Financing Sources (Uses): Operating transfers in 95,109 95,109 Operating transfers out (328,000) (355,675) (27,675) Total Other Financing Sources (Uses) (328,000) (260,566) 67,434 (Deficiency) of Revenues and Other Sources Over Expenditures and Other Uses (1,658,391) (204,258) 1,454,133 Fund Balance, Beginning 1,576,471 1,576,471 Fund Balance, Ending $ (81,920) $ 1,372,213 $ 1,454,133 67 ., - . CITY OF CHULA VISTA Schedule of Revenues, Expenditures and Changes in Fund Balance Budget and Actual- (Budgetary Basis) Traffic Signal Special Revenue Fund Forthe Year Ended June 30, 1996 Actual on a Variance Budgetary Favorable Budget Basis (Unfavorable) Revenues: Intergovernmental $ 202,700 $ 39,396 $ (163,304) Charges for services 560,000 366,249 (193,751) Revenue from use of money and property 70,370 74,498 4,128 Total Revenues 833,070 480,143 (352,927) Expenditures: Current: General Government 7,400 5,381 2,019 Excess of Revenues Over Expenditures 825,670 474,762 (350,908) Other Financing Sources (Uses): Operating transfers in 377,040 377,040 Operating transfers out (982,200) (982,200) Total Other Financing Sources (Uses) (605,160) (605,160) Excess (Deficiency) of Revenues and Other Sources Over Expenditures and Other Uses 825,670 (130,398) (956,068) Fund Balance, Beginning 783,630 783,630 Fund Balance, Ending $ 1.609.300 $ 653.232 $ (956.068) 68 .. - - CITY OF CHULA VISTA Schedule of Revenues, Expenditures and Changes in Fund Balance Budget and Actual - (Budgetary Basis) Special Capital Outlay Special Revenue Fund For the Year Ended June 30,1996 Actual on a Variance Budgetary Favorable Budget Basis (Unfavorable) Revenues: Revenue /:Ì"om use of money and property $ 9,200 $ 2,350 $ (6,850) Expenditures: Current: General government 15,766 45 15,721 Excess (Deficiency) of Revenues Over Expenditures (6,566) 2,305 8,871 Other Financing Uses: Transfers out (92,775) (151,610) (58,835) (Deficiency) of Revenues Over Expenditures and Other Uses (99,341) (149,305) (49,964) Fund Balance, Beginning 149,305 149,305 Fund Balance, Ending $ 49,964 $ - $ (49,964) 69 CITY OF CHULA VISTA Schedule of Revenues, Expenditures and Changes in Fund Balance Budget and Actual- (Budgetary Basis) Bayft-ont Trolley Special Revenue Fund For the Year Ended June 30, 1996 Actual on a Variance Budgetary Favorable Budget Basis (Unfavorable) Revenues: Revenue from use of money and property $ 6,300 $ 6,419 $ 119 Expenditures: Current: General government 15,766 15,766 - (Deficiency) of Revenues Over Expenditures (9,466) (9,347) 119 Fund Balance, Beginning 122,083 122,083 - Fund Balance, Ending $112,617 $112,736 $ 119 70 ~ I - , - CITY OF CHULA VISTA Schedule of Revenues, Expenditures and Changes in Fund Balance Budget and Actual- (Budgetary Basis) Redevelopment Agency Special Revenue Fund For the Year Ended June 3O, 1996 Actualona Variance Budgetary Favorable Budget Basis (Unfavorable) Revenues: Taxes $ 857,933 $ 1,022,437 $ 164,504 Intergovernmental 643,000 647,843 4,843 Charges for services 13,700 156,454 142,754 Revenue from use of money and property 809,800 184,202 (625,598) Other 1,500 1,500 Total Revenues 2,325,933 2,012,436 (313,497) Expenditures: Current: General government 1,411,537 569,149 842,388 Debt Service: Principal 12,197 (12,197) Interest and fiscal charges 864. (864) Total Expenditures 1,411,537 582,210 829,327 Excess of Revenues Over Expenditures 914,396 1,430,226 515,830 Fund Balance, Beginning, Restated 7,689,971 7,689,971 Fund Balance, Ending $ 8,604,367 $ 9,120,197 $ 515,830 71 .. - . CITY OF CHULA VISTA Schedule of Revenues, Expenditures and Changes in Fund Balance Budget and Actual- (Budgetary Basis) Baldwin Project Management Special Revenue Fund Forthe Year Ended June 30, 1996 Actual on a Variance Budgetary Favorable Budget Basis (Unfavorable) Revenues: Revenue from use of money and property $ 5,948 $ 5,948 Other 613,223 613,223 Total Revenues 619,171 619,171 Expenditures: Current: General government $ 216,081 537,577 (321,496) Excess (Deficiency) of Revenues Over Expenditures (216,081) 81,594 297,675 Fund Balance, Beginning 56,626 56,626 Fund Balance, Ending $ (159.455) $ 138,220 $ 297,675 72 "I - . ClTYOFCHULA VISTA Schedule of Revenues, Expenditures and Changes in Fund Balance Budget and Actual - (Budgetary Basis) Transportation Sales Tax Special Revenue Fund For the Year Ended June 30, 1996 Actual on a Variance Budgetary Favorable Budget Basis (Unfavorable) Revenues: Taxes $ 2,848,500 $ 3,308,348 $ 459,848 Revenue ITom use of money and property 225,700 144,259 (81,441) Total Revenues 3,074,200 3,452,607 378,407 Expenditures: Current: Public works 5,087,597 1,969,338 3,118,259 Excess (Deficiency) of Revenues Over Expenditures (2,013,397) 1,483,269 3,496,666 Fund Balance, Beginning 2,410,237 2,410,237 Fund Balance, Ending $ 396.840 $ 3.893.506 $ 3.496.666 73 .. CITY OF CHULA VISTA Schedule of Revenues, Expenditures and Changes in Fund Balance Budget and Actual- (Budgetary Basis) Other Miscellaneous Funds Special Revenue Fund For the Year Ended June 30, 1996 Actual on a Variance Budgetary Favorable Budget Basis (Unfavorable) Revenues: Intergovernmental $ 542,267 $ 590,406 $ 48,139 Revenue fÌ'om use of money and property 5,200 4,156 (1,044) Other 4,700 33,234 28,534 Total Revenues 552,167 627,796 75,629 Expenditures: Current: General government 1,032,043 551,262 480,781 Excess (Deficiency) of Revenues Over Expenditures (479,876) 76,534 556,410 Other Financing Sources (Uses): Operating transfers in 522 522 Operating transfers out (102,201) (102,201) Total Other Financing Sources (Uses) (101,679) (10 1,679) (Deficiency) of Revenues and Other Sources Over Expenditures and Other Uses (479,876) (25,145) 454,731 Fund Balance, Beginning 102,703 102,703 Fund Balance (Deficit), Ending $ (377,173) $ 77,558 $ 454,731 74 This page intentionally left blank. 75 CITY OF CHULA VISTA Combining Balance Sheet All Debt Service Funds June 30, 1996 1965 Golf Redevelopment 1990 1994 Am1£ Course Agency COP PCB Cash and investments $ 1,534,601 Interest receivable 2,743 Restricted Assets: Cash and investments with fiscal agents - 5,440,698 $ 2,269 Total Assets $ - $ 6,978,042 $ $ 2,269 Fund Balances Fund Balances: Reserved for debt service $ - $ 6,978,042 $ $ 2,269 76 Notes Payable Total $ 1,534,601 2,743 5,442,967 $ $ 6,980,311 $ - $ 6,980,311 77 CITY OF CHULA VISTA Combining Statement of Revenues, Expenditures, and Changes in Fund Balances All Debt Service Funds For the Year Ended June 30, 1996 1965 Golf Redevelopment 1990 1994 Course Agency COP POB Revenues: Taxes $ 2,340,303 Revenue from use of money and property 362,505 $ 2,950 $ 4,573 Total Revenues 2,702,808 2,950 4,573 Expenditures: General Government 50,337 Debt service: Principal $ 50,000 6,701,236 275,000 Interest and fiscal charges 1,027 3,438,029 11,156 1,128,227 Bond issuance costs 88,448 Total Expenditures 51,027 10,278,050 286,156 1,128,227 (Deficiency) of Revenues Over Expenditures (51,027) (7,575,242) (283,206) (1,123,654) Other Financing Sources (Uses): Proceeds from long-term debt 7,557,616 Operating transfers in 51,680 66,748 160,621 1,122,131 Operating transfers out (951) Total Other Financing Sources (Uses) 50,729 7,624,364 160,621 1,122,131 Excess (Deficiency) of Revenues and Other Sources Over Expenditures and Other Uses (298) 49,122 (122,585) (1,523) Fund Balances, Beginning 298 6,928,920 122,585 3,792 Fund Balances, Ending $ - $ 6,978,042 $ - $ 2,269 78 Notes Payable Total $ 2,340,303 370,028 2,710,331 50,337 $ 189,200 7,215,436 121,088 4,699,527 88,448 310,288 12,053,748 (310,288) (9,343,417) 7,557,616 310,288 1,711,468 (951) 310,288 9,268,133 (75,284) 7,055,595 $ - $ 6.980.311 79 il -. - 0' CITY OF CHULA VISTA Schedule of Revenues, Expenditures and Changes in Fund Balance Budget and Actual - (Budgetary Basis) 1965 Golf Course Debt Service Fund For the Year Ended JundO, 1996 Actual on a Variance Budgetary Favorable Budget Basis (Unfavorable) Expenditures: Debt service: Principal $ 50,000 $ 50,000 Interest and fiscal charges 1,680 1,027 $ 653 Total Expenditures 51,680 51,027 ~ Other Financing Sources (Uses): Operating transfers in 51,680 51,680 Operating transfers out (951) ~ Total Other Financing Sources (Uses) 51,680 50,729 ~ (Deficiency) of Other Sources Over Expenditures and Other Uses (298) (298) Fund Balance, Beginning 298 298 - Fund Balance, Ending $ 298 $ - $ (298) 80 CITY OF CHULA VISTA Schedule of Revenues, Expenditures and Changes in Fund Balance Budget and Actual- (Budgetary Basis) Redevelopment Agency Debt Service Fund For the Year Ended June 30, 1996 Actual on a Variance Budgetary Favorable Budget Basis (Unfavorable) Revenues: Taxes $ 2,340,303 $ 2,340,303 Revenue tTom use of money and property 362,505 362,505 Total Revenues 2,702,808 2,702,808 Expenditures: General government $ 37,320 50,337 (13,017) Debt service: Principal 6,717,906 6,701,236 16,670 Interest and fiscal charges 3,477,230 3,438,029 39,201 Bond issuance costs 88,448 88,448 Total Expenditures 10,320,904 10,278,050 42,854 (Deficiency) of Revenues Over Expenditures (10,320,904) (7,575,242) 2,745,662 Other Financing Sources (Uses): Proceeds tTom long-term debt 6,242,152 7,557,616 1,315,464 Operating transfers in 66,748 66,748 Total Other Financing Sources (Uses) 6,242,152 7,624,364 1,382,212 Excess (Deficiency) of Revenues and Other Sources Over Expenditures and Other Uses (4,078,752) 49,122 4,127,874 Fund Balance, Beginning 6,928,920 6,928,920 Fund Balance, Ending $ 2,850,168 $ 6,978,042 $ 4,127,874 81 CITY OF CHULA VISTA Schedule of Revenues, Expenditures and Changes in Fund Balance Budget and Actual- (Budgetary Basis) 1990 COP Debt Service Fund For the Year Ended June 30, 1996 Actual on a Variance Budgetary Favorable Budget Basis (Unfavorable) Revenues: Revenue from use of money and property $ 2,950 $ 2,950 Expenditures: Debt Service: Principal $ 120,000 275,000 (155,000) Interest and fiscal charges 1,820 11,156 (9,336) Total Expenditures 121,820 286,156 (164,336) (Deficiency) of Revenues Over Expenditures (121,820) (283,206) (161,386) Other Financing Sources: Operating transfers in 160,621 160,621 (Deficiency) of Revenues and Other Sources Over Expenditures (121,820) (122,585) (765) Fund Balance, Beginning 122,585 122,585 Fund Balance, Ending $- 765 $ - $ (765) 82 '1 -' - - - CITY OF CHULA VISTA Schedule of Revenues, Expenditures and Changes in Fund Balance Budget and Actual- (Budgetary Basis) 1994 POB Debt Service Fund For the Year Ended June 30, 1996 Actual on a Variance Budgetary Favorable Budget Basis (Unfavorable) Revenues: Revenue from use of money and property $ 4,573 $ 4,573 Expenditures: Debt service: Interest and fiscal charges $ 1,123,900 1,128,227 (4,327) (Deficiency) of Revenues Over Expenditures (1,123,900) (1,123,654) 246 Other Financing Sources: Operating transfers in 1,122,131 1,122,131 (Deficiency) of Revenues and Other Sources Over Expenditures (1,123,900) (1,523) 1,122,377 Fund Balance, Beginning 3,792 3,792 Fund Balance, Ending $ 0.120.108) $ 2,269 $ U22,377 83 - CITY OF CHULA VISTA Schedule of Revenues, Expenditures and Changes in Fund Balance Budget and Actual- (Budgetary Basis) Notes Payable Debt Service Fund For the Year Ended June 30, 1996 Actual on a Variance Budgetary Favorable Budget Basis (Unfavorable) Expenditures: Debt service: Principal $ 190,310 $ 189,200 $ 1,110 Interest and fiscal charges 165,060 121,088 43,972 Total Expenditures 355,370 310,288 45,082 Other Financing Sources: Operating transfers in 355,366 310,288 (45,078) (Deficiency) of Other Sources Over Expenditures (4) 4 Fund Balance, Beginning Fund Balance, Ending $ (4) $ - $ 4 84 This page intentionally left blank. 85 CITY OF CHULA VISTA Combining Balance Sheet All Capital Projects Funds June 30, 1996 Parks and Recreation Capital Park Residential Block Improvement Acquisition Construction Am1s Grants Program Development Tax $ 53,646 $ 3,740,801 $ 5,330 $ 215,948 Receivables: Accounts Taxes Interest 96 9,435 627 Grants 30,056 Due ITom other funds 1,156,254 Loans receivable Advances to component unit Advances to other funds Total Assets $ 83.798 $ 4.906.490 $ 5.330 $ 216.575 Liabilities and Fund Balances Liabilities: Accounts payable $ 141,125 $ 148 Due to other funds Advances ITom other funds Deferred revenue Total Liabilities 141,125 148 Fund Balances: Reserved for: Encumbrances 46,747 Long-term receivables 69,900 $ 202,555 Unreserved: Designated for capital projects $ 83,798 4,718,618 14,020 Undesignated (64,718) Total Fund Balances 83,798 4,765,365 5,182 216,575 Total Liabilities and Fund Balances $ 83.798 $ 4.906.490 $ 5,330 $ 216.575 86 Assessment State Telegraph Industrial District Library Bond Act Canyon Bicycle Development Improvement Construction 1974 Road Facility Authority Funds $ 993 $ 44,833 $ 612,094 $ 5,665 $ 5,570,927 2 80 1,094 10 13,725 $ 393,411 - $ 393.411 $ 995 $ 44.913 $ 613,188 $ 5,675 $ 5,584,652 $ 27,968 $ 641,644 - 13,709 - 641,644 - 41,677 - 1,952 $ 995 $ 44,913 569,559 $ 5,675 $ 5,584,652 (248,233) - - (248,233) 995 44,913 571,511 ~ 5,584,652 $ 393.411 $ 995 $ 44,913 $ 613,188 $ 5.675 $ 5,584.652 (Continued) 87 -.. -.. CITY OF CHULA VISTA Combining Balance Sheet All Capital Projects Funds (Continued) June 30, 1996 Sewer Development Facility Impact Redevelopment Replacement Amt£ Funds Agency Fund Cash and investments $ 12,253,257 $ 2,395,972 $ 4,137,689 Receivables: Accounts 595,690 71,891 Taxes 97,011 Interest 21,605 393,480 7,638 Grants Due from other funds Loans receivable 800,000 1,800,000 Advances to component unit 2,072,724 Advances to other funds 13,089,094 Total Assets $ 13,670,552 $ 19.848,281 $ 4.217,218 Liabilities and Fund Balances Liabilities: Accounts payable $ 79,168 $ 209,904 Due to other funds Advances from other funds 571,200 2,418,085 Deferred revenue 595,690 4,580,980 Total Liabilities 1,246,058 7,208,969 Fund Balances: Reserved for: Encumbrances 19,804 126,600 Long-term receivables 800,000 12,766,220 Unreserved: Designated for capital projects 11,604,690 $ 4,217,218 Undesignated (253,508) Total Fund Balances 12,424,494 12,639,312 4,217,218 Total Liabilities and Fund Balances $ 13,670.552 $ 19.848,281 $ 4.217,218 88 Transpor- tation Partnership Fund Total $ 1,233,507 $ 30,270,662 667,581 97,01l 2,250 450,042 102,084 525,551 1,156,254 2,600,000 2,072,724 13,089,094 $ U37.841 $ 50.928.919 $ 181,870 $ 640,183 641,644 2,989,285 5,190,379 181,870 9,461,491 34,821 229,924 13,838,675 1,121,150 27,965,288 (566,459) 1,155,971 41,467,428 $ 1.337.841 $ 50.928.919 89 - - .. .. CITY OF CHULA VISTA Combining Statement of Revenues, Expenditures, and Changes in Fund Balances All Capital Projects Funds For theY ear Ended June 30, 1996 Parks and Recreation Capital Park Residential Block Improvement Acquisition Construction Grants Program Development Tax Revenues: Taxes $ 343,650 Intergovernmental $ 40,788 $ 1,865 Development fees Revenue from use of money and property 3,007 243,213 28,318 Other Total Revenues 43,795 245,078 371,968 Expenditures: Capital projects 13,852 $ 1,902,206 12,415 Debt service: Principal Interest and fiscal charges Total Expenditures 13,852 1,902,206 12,415 Excess (Deficiency) of Revenues Over Expenditures ~9,943 (1,902,206) 245,078 359,553 Other Financing Sources (Uses): Proceeds from long-term debt Sale of fixed assets Operating transfers in 3,218,878 22,570 33,309 Operating transfers out (944,682) (581,713) (198,547) Total Other Financing Sources (Uses) 2,274,196 (559,143) (165,238) Excess (Deficiency) of Revenues and Other Sources Over Expenditures and Other Uses 29,943 371,990 (314,065) 194,315 Fund Balances, Beginning 53,855 4,393,375 319,247 22,260 Fund Balances, Ending $ 83.798 $ 4,765,365 $ 5,182 $ 216,575 90 Assessment State Telegraph Industrial District Library Bond Act Canyon Bicycle Development Improvement Construction 1974 Road Facility Authority Funds $ 393,411 $132,691 $ 51 $ 2,599 26,219 $ 150 $ 471,508 - - 139,642 393,411 51 2,599 158,910 150 611,150 55,522 22,944 102,202 6,249,886 - - 55,522 - 22,944 102,202 - 6,249,886 337,889 51 (20,345) 56,708 150 (5,638,736) - - - - 337,889 51 (20,345) 56,708 150 (5,638,736) (586,122) 944 65,258 514,803 ~ 11,223,388 $ (248,233) $995 $ 44,913 $571,511 $ 5,675 $ 5,584.652 (Continued) 91 -. .. .. CITY OF CHULA VISTA Combining Statement of Revenues, Expenditures, and Changes in Fund Balances All Capital Projects Funds (Continued) For theY ear Ended June 30, 1996 Sewer Development Facility Impact Redevelopment Replacement Funds Agency Fund Revenues: Taxes $ 2,248,377 Intergovernmental $ 175,299 1,688,372 Development fees 4,308,893 Revenue from use of money and property 711,467 762,914 $ 216,097 Other 86,609 23,794 386,962 Total Revenues 5,282,268 4,723,457 603,059 Expenditures: Capital projects 3,012,266 2,737,425 296,675 Debt service: Principal 1,169 2,389,878 Interest and fiscal charges 68,439 1,262,682 Total Expenditures 3,081,874 6,389,985 296,675 Excess (Deficiency) of Revenues Over Expenditures 2,200,394 (1,666,528) 306,384 Other Financing Sources (Uses): Proceeds from long-term debt 2,723,524 Sale of fixed assets 2,750,250 Operating transfers in Operating transfers out (53,049) (66,748) Total Other Financing Sources (Uses) (53,049) 5,407,026 Excess (Deficiency) of Revenues and Other Sources Over Expenditures and Other Uses 2,147,345 3,740,498 306,384 Fund Balances, Beginning 10,277,149 8,898,814 3,910,834 Fund Balances, Ending $ 12,424,494 $ 12,639,312 $ 4,217,218 92 Transpor- tation Partnership Fund Total $ 2,592,027 $ 376,942 2,809,368 4,308,893 73,386 2,538,929 637,007 450,328 12,886,224 760,457 15,165,850 2,391,047 1,331,121 760,457 18,888,018 (310,129) (6,001,794) 2,723,524 2,750,250 3,274,757 (1,844,739) 6,903,792 (310,129) 901,998 1,466,100 40,565,430 $ 1,155,971 $ 41,467,428 93 -. .. .. - CITY OF CHULA VISTA Combining Balance Sheet All Enterprise Funds June 30, 1996 Transit Handitran ~ Fund Fund Total Current Assets: Cash and investments $ 5,317,421 $ 95,188 $ 5,412,609 Receivables: Accounts 129,618 287 129,905 Interest 9,634 175 9,809 Total Current Assets 5,456,673 95,650 5,552,323 Property, Plant and Equipment 5,532,537 5,532,537 Less Accumulated Depreciation (2,770,466) (2,770,466) Net Property, Plant and Equipment 2,762,071 2,762,071 Total Assets $ 8,218,744 $ 95,650 $ 8.314,394 Liabilities and Fund Equity Current Liabilities: Accounts payable $ 433,753 $ 18,094 $ 451,847 Deferred revenue 595,108 77,556 672,664 Total Liabilities 1,028,861 95,650 1,124,511 Fund Equity: Contributed Capital 2,762,071 2,762,071 Retained Earnings: Unreserved 4,427,812 4,427,812 Total Fund Equity 7,189,883 7,189,883 Total Liabilities and Fund Equity $ 8,218.744 $ 95,650 $ 8.314,394 94 CITY OF CHULA VISTA Combining Statement of Revenues, Expenses, and Changes in Retained Earnings All Enterprise Funds For the Year Ended June 30, 1996 Transit Handitran Fund Fund Total Operating Revenues: Charges for services $ 1,431,479 $ 69,945 $ 1,501,424 Operating Expenses: Operations and administration 3,229,880 226,396 3,456,276 Depreciation 416,301 416,301 Total Operating Expenses 3,646,181 226,396 3,872,577 Operating Loss (2,214,702) (156,451) (2,371,153) Nonoperating Revenues: Intergovernmental 1,960,097 149,976 2,110,073 Interest income 60,124 6,475 66,599 Total Nonoperating Revenues 2,020,221 156,451 2,176,672 Net Loss (194,481) (194,481) Depreciation on contributed capital 416,301 416,301 Increase in Retained Earnings 221,820 221,820 Retained Earnings, Beginning 4,205,992 4,205,992 Retained Earnings, Ending $ 4.427,812 $ - $ 4.427,812 95 CITY OF CHULA VISTA Combining Statement of Cash Flows All Enterprise Funds For the Year Ended June 30, 1996 Transit Handitran Fund Fund Total Cash Flows from Operating Activities: Operating loss $ (2,214,702) $ (156,451) $ (2,371,153) Adjustments to reconcile operating loss to net cash used for operating activities: Depreciation 416,301 416,301 Changes in operating assets and liabilities: (Increase) decrease in accounts receivable (727) 283 (444) Increase (decrease) in accounts payable 212,163 (249) 211,914 (Decrease) in deferred revenue (255,977) (25,512) (281,489) Net Cash Used for Operating Activities (1,842,942) (181,929) (2,024,871) Cash Flows from Non-Capital Financing Activities: Intergovernmental revenue received 1,960,097 149,976 2,110,073 Cash Flows from Investing Activities: Interest received 73,016 6,844 79,860 Net Increase (Decrease) in Cash and Cash Equivalents 190,171 (25,109) 165,062 Cash and Cash Equivalents, Beginning 5,127,250 120,297 5,247,547 Cash and Cash Equivalents, Ending $ 5.317,421 $ 95..188 $ 5,412,609 96 - - CITY OF CffiJLA VISTA Combining Balance Sheet Internal Service Funds June 30, 1996 Central Equipment Stores ~ Garage Replacement Inventory Total Current Assets: Cash and investments $ 18,897 $ 1,095,471 $ 26,231 $ 1,140,599 Accounts receivable 120 120 Interest receivable 23,415 23,415 Due ITom other funds 550,000 550,000 Inventories 80,809 80,809 Total Assets $ 19.017 $ 1,668,886 $ 107,040 $ 1,794,943 Liabilities and Fund Equity Current Liabilities: Accounts payable $ 2,255 $ 19,601 $ 2,049 $ 23,905 Accrued liabilities 61,648 61,648 Due to other funds 550,000 550,000 - Deferred revenue 22,504 22,504 Total Liabilities 613,903 42,105 2,049 658,057 Fund Equity: Contributed Capital 88,624 88,624 Retained Earnings (Deficit): Unreserved (594,8862 1,626,781 - 16,367 1,048,262 Total Fund Equity (594,886) 1,626,781 104,991 1,136,886 Total Liabilities and Fund Equity $ 19,017 $ 1,668,886 $ 107,040 $ 1,794.943 97 _. - .. - CITY OF CHULA VISTA Combining Statement of Revenues, Expenses, and Changes in Retained Earnings All Internal Service Funds For the Year Ended June 30, 1996 Central Equipment Stores Garage Replacement Inventory Total Operating Revenues: Charges for services $ 1,291,507 $ 906,881 $ 282,090 $ 2,480,478 Operating Expenses: Operations and administration 1,394,854 945,305 265,723 2,605,882 Operating Income (Loss) (103,347) (38,424) 16,367 (125,404) Nonoperating Revenues: Interest income 47,682 47,682 Income (Loss) Before Operating Transfers (103,347) 9,258 16,367 (77,722) Operating Transfers: Transfers out (13,500) (13,500) Net Income (Loss) (103,347) (4,242) 16,367 (91,222) Retained Earnings (Deficit), Beginning (491,539) 1,631,023 1,139,484 Retained Earnings (Deficit), Ending $ (594,886) $ 1,626,781 $ 16,367 $ 1,048,262 98 -.. - .. CITY OF CHULA VISTA Combining Statement of Cash Flows All Internal Service Funds For the Year Ended June 30, 1996 Central Equipment Stores Garage Replacement Inventory Total Cash Flows !Tom Operating Activities: Operating income (loss) $ (103,347) $ (38,424) $ 16,367 $ (125,404) Adjustments to reconcile operating income (loss) to net cash provided by (used for) operating activities: Changes in operating assets and liabilities: (Increase) in accounts receivable (120) (120) Decrease in inventories 7,815 7,815 Increase (decrease) in accounts payable (20,724) (10,636) 2,049 (29,311) Increase in accrued liabilities 27,409 27,409 Increase in deferred revenue 22,504 22,504 Net Cash Provided by (Used for) Operating Activities (96,782) (26,556) 26,231 (97,107) Cash Flows !Tom Non-Capital Financing Activities: Transfers out (13,500) (13,500) Loans to other funds (115,679) (115,679) Loans !Tom other funds 115,679 115,679 Net Cash Provided by (Used for) Non-Capital Financing Activities 115,679 (129,179) (13,500) Cash Flows From Investing Activities: Interest-received 28,842 28,842 Net Increase (Decrease) in Cash and Cash Equivalents 18,897 (126,893) 26,231 (81,765) Cash and Cash Equivalents, Beginning 1,222,364 1,222,364 Cash and Cash Equivalents, Ending $ 18,897 $ 1,095.471 $ 26,231 $ 1,140,599 99 CITY OF CHULA VISTA Combining Balance Sheet Agency Funds June 30, 1996 Special Cash Deferred Recreation Assessment Bond Compensation Trust Districts Deposits Total Assets: Cash and investments $ 16,525,825 $489,841 $ 10,273,209 $ 3,890,115 $ 31,178,990 Receivables: Accounts 6,638 60 6,698 Taxes 33,051 33,051 Interest 922 18,154 7,618 26,694 Cash and investments with fiscal agents 2,179,031 2,179,031 Total Assets $ 16.525,825 $497.401 $ 12,503.445 $ 3,897,793 $ 33.424,464 Liabilities: Accounts payable $ 27,560 $ 14,452 $ 42,012 Due to bondholders 12,430,473 12,430,473 Refundable deposits $497,401 3,883,341 4,380,742 Advances from other funds 45,412 45,412 Deferred compensation $ 16,525,825 16,525,825 Total Liabilities $ 16,525,825 $497.401 $ 12,503.445 $ 3,897,793 $ 33,424.464 100 - . CITY OF CHULA VISTA Combining Statement of Changes in Assets and Liabilities Agency Funds For the Year Ended June 30, 1996 Balance Balance Deferred Compensation Fund July 1, 1995 Additions Deletions June 30, 1996 Assets Cash and investments $ 13,700,575 $ 3,532,690 $ 707,440 $ 16,525,825 Liabilities Deferred compensation $ 13,700,575 $ 3,532,690 $ 707,440 $ 16,525,825 Recreation Trust Assets Cash and investments $ 460,923 $ 28,918 $ 489,841 Accounts receivable 7,153 6,638 $ 7,153 6,638 Interest Receivable 2,364 922 2,364 922 Total Assets $ 470,440 $ 36,478 $ 9,517 $ 497,401 Liabilities Refundable deposits $ 470,440 $ 36,478 $ 9,517 $ 497,401 Special Assessment Districts Assets Cash and investments $ 10,642,869 $ 7,842,557 $ 8,212,217 $ 10,273,209 Accounts receivable 7,220 7,220 Taxes receivable 68,581 33,051 68,581 33,051 Interest receivable 76,910 18,154 76,910 18,154 Cash and investments with fiscal agents 2,025,570 153,461 2,179,031 Total Assets $ 12,821,150 $ 8,047,223 $ 8,364,928 $ 12,503,445 Liabilities Accounts payable $ 1,101 $ 27,560 $ 1,101 $ 27,560 Interest payable 16,848 16,848 Due to bondholders 12,803,201 7,974,251 8,346,979 12,430,473 Advances ÍÌ"om other funds 45,412 45,412 Total Liabilities $ 12,821,150 $ 8,047,223 $ 8,364,928 $ 12,503,445 (Continued) 101 CITY OF CHULA VISTA Combining Statement of Changes in Assets and Liabilities Agency Funds (Continued) Forthe Year Ended June 30, 1996 Balance Balance July I, 1995 Additions Deletions June 30, 1996 Cash Bond Deposits Assets Cash and investments $ 3,709,816 $ 2,797,277 $ 2,616,978 $ 3,890,115 Accounts receivable 706 60 706 60 Interest receivable 17,901 7,618 17,901 7,618 Total Assets $ 3,728,423 $ 2,804,955 $ 2,635.585 $ 3,897,793 Liabilities Accounts payable $ 38,321 $ 14,452 $ 38,321 $ 14,452 Refundable deposits 3,690,102 2,790,503 2,597,264 3,883,341 Total Liabilities $ 3.728,423 $ 2,804.955 $ 2.635,585 $ 3.897.793 Total - All Agency Funds Assets Cash and investments $ 28,514,183 $ 14,201,442 $ 11,536,635 $ 31,178,990 Accounts receivab!~ 15,079 6,698 15,079 6,698 Taxes receivable 68,581 33,051 68,581 33,051 Accrued interest 97,175 26,694 97,175 26,694 Cash and investments with fiscal agents 2,025,570 153,461 2,179,031 Total Assets $ 30,720,588 $ 14,421,346 $ 11,717,470 $ 33,424,464 Liabilities Accounts payable $ 39,422 $ 42,012 $ 39,422 $ 42,012 Interest payable 16,848 16,848 Due to bondholders 12,803,201 7,974,251 8,346,979 12,430,473 Refundable deposits 4,160,542 2,826,981 2,606,781 4,380,742 Advances ftom other funds 45,412 45,412 Deferred compensation 13,700,575 3,532,690 707,440 16,525,825 Total Liabilities $ 30,720,588 $ 14,421,346 $ 11.717,470 $ 33,424,464 102 -. - .. - -- - -- -~ REDEVELOPMENT AGENCY OF THE CITY OF CHULA VISTA Annual Financial Report l June 30, 1996 -- r- --__0- L- r L- '- ,-- L Moreland &~ I - -- " --CERTIR~ ~UBUC ACCOUNTANTS REDEVELOPMENT AGENCY OF THE CITY OF CHULA VISTA Annual Financial Report June30, 1996 T ABT ,E OF CONTENTS u.GE FINANCIAL SECTION: Independent Auditors' Report .......................................... 1 General Purpose Financial Statements: Combined Balance Sheet - All Fund Types and Account Groups. . . . . . . . . . .. 2 Combined Statement of Revenues, Expenditures and Changes in Fund Balances - All Governmental Fund Types. . . . . . . . . . . . . . . . . . . .. 4 Combined Statement of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual (Budgetary Basis) Special Revenue and Debt Services Funds. . . . . . . . . . . . . . . . . . . . . . . . . .. 6 NotestoFinancialStatements........................................8 Supplementary Information: Debt Service Funds: CombiningBalanceSheet..........................................26 Combining Statement of Revenues, Expenditures and Changes in Fund Balances ....................................... 27 Statement of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual: Bayfront/fownCentreIFund ..................................28 TownCentreIIFund .........................................29 Southwest Fund .............................................30 Capital Projects Funds: Combining Balance Sheet..................................... .....32 Combining Statement of Revenues, Expenditures and Changes in Fund Balances .......................................34 REDEVELOPMENT AGENCY OF THE CITY OF CHULA VISTA Annual Financial Report June 30, 1996 TABT-E OF CONTENTS (Continued) £AGE COMPLIANCE AND INTERNAL CONTROL SECTION Independent Auditors' Report on Compliance Based on an Audit of General Purpose Financial Statements Performed in Accordance With Government Auditin¡¡ Standards. . . . . . . . . . . . . . . . . . . . 37 Independent Auditors' Report on Compliance With Provisions of Laws and Regulations Contained in the Guidelines FOT Compliance Audits nf CaliforniaRedevelopmentA~encies..................................39 Independent Auditors' Report on the Internal Control Structure Based on an Audit of General Purpose Financial Statements Performed in Accordance With GovernmentAuditinIlStandaTds.....................................41 -.. - .. - 1201 DOVE STIREET, SUITE 680 M O~~!~~C~~ NEWPORT BEACH, CALIFORNIA 92660 (714) 221.0025 570 RANCHEROS DRIVE, SUITE 260 SAN MARCOS, CA 92069 (619) 752-3390 November 8, 1996 The Board of Directors of the Redevelopment Agency of the City of Chula Vista Ind~endent Auditors' Report We have audited the general purpose financial statements of the Redevelopment Agency of the City of Chula Vista, a component unit of the City of Chula Vista, as of and for the year ended June 30, 1996, as listed in the table of contents. These financial statements are the responsibility of the Redevelopment Agency of the City of Chula Vista management. Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with generally accepted auditing standards and Government Auditinl Standards issued by the Comptroller General of the United States. Those standards require that we plan and perfonm the audit to obtain reasonable assurance about whether the financial statements are ftee of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion- In our opinion, the general purpose financial statements referred to above present fairly, in all material respects, the financial position of the Redevelopment Agency of the City ofChula Vista at June 30, 1996 and the results of its operations for the year then ended in confonmity with generally accepted accounting principles. Our audit was made for the purpose of fonming an opinion on the general purpose financial statements taken as a whole. The accompanying combining and individual fund financial statements listed as supplementary infonmation in the table of contents is presented for purposes of additional analysis and is not a required part of the general purpose financial statements of the Redevelopment Agency of the City ofChula Vista. The infonmation has been subjected to the auditing procedures applied in the audit of the general purpose financial statements and, in our opinion, is fairly presented in all material respects in relation to the general purpose financial statements taken as a whole. In accordance with Government Auditinl Standards, we have also issued a report dated November 8,19% on our consideration of the Redevelopment Agency of the City ofChula Vista internal control structure and a report dated November 8, 1996 on its compliance with laws and regulations. 7'lð'td.&,zÆ .f aullCftt.!-<5 1 - - REDEVELOPMENT AGENCY OF THE CITY OF CHULA VISTA Combined Balance Sheet All Fund Types and Account Groups June 30, 1996 Governmental Fund Types Special Debt Capital Assets and Other Debits Revenue Service Projects Cash and investments (Note 3) $ 2,509,885 $ 1,534,601 $ 2,395,972 Loans receivable (Note 4) 5,525,933 3,306,417 Interest receivable (Note 4) 1,280,490 2,743 959,787 Lease receivable (Note 5) 17,505,000 Other receivables 22,970 97,011 Advances to other funds (Notes 7 and 9) 424,315 13,089,094 Fixed assets (Note 6) Restricted Assets: Cash and investments (Note 3) 1,048,953 Cash and investments with fiscal agents (Note 3) 5,440,698 Amounts available for retirement oflong-term debt Amount to be provided for retirement oflong-term debt Total Assets and Other Debits $ 10.812.546 $ 6,978.042 $ 37.353,281 Liabilities, Fund Balances and Other Credits Liabilities: Accounts payable $ 209,904 Advances fÌ"om other funds (Notes 7 and 9) Advances fÌ"om the City ofChula Vista (Note 7) 2,418,085 Note Payable (Note 7) Loans payable (Note 7) Deferred revenue (Note 10) $ 1,655,351 22,085,980 Other long-term debt payable (Note 7) Total Liabilities 1,655,351 24,713,969 Fund Balances and Other Credits: Investment in general fixed assets Fund balances: Reserved for: Loans receivable 5,525,933 3,306,417 Advances to other funds 45,600 9,459,803 Low and moderate income housing 3,546,995 Encumbrances 36,998 126,600 Debt service $ 6,978,042 Unreserved, undesignated 1,669 (253,508) Total Fund Balances and Other Credits 9,157,195 6,978,042 12,639,312 Total Liabilities, Fund Balances, and Other Credits $ 10.812.546 $ 6.978,042 $ 37.353.281 See Accompanying Notes to Financial Statements 2 Account Groups General General Total Fixed Long-Term (Memorandum Assets Debt Only) $ 6,440,458 8,832,350 2,243,020 17,505,000 119,981 13,513,409 $ 24,208,564 24,208,564 1,048,953 5,440,698 $ 6,978,042 6,978,042 61,085,214 61,085,214 $ 24.208.564 $ 68.063.256 $147,415.689 $ 209,904 $ 13,513,409 13,513,409 7,399,563 9,817,648 729,561 729,561 315,723 315,723 23,741,331 46, I 05,000 46,105,000 68,063,256 94,432,576 $ 24,208,564 24,208,564 8,832,350 9,505,403 3,546,995 163,598 6,978,042 (251,839) 24,208,564 52,983,113 $ 24.208.564 $ 68.063.256 $147,415.689 3 - - REDEVELOPMENT AGENCY OF THE CITY OF CHULA VISTA Combined Statement of Revenues, Expenditures, and Changes in Fund Balances All Governmental Fund Types For the Year Ended June 30, 1996 Special Debt Revenue Service Revenues: Tax increment revenue $ 1,022,437 $ 2,340,303 Revenue from use of money and property 184,202 362,505 Charges for services 156,454 Reimbursement - other agencies 647,843 Miscellaneous 1,500 Total Revenues 2,012,436 2,702,808 Expenditures: Property acquisition and operation 19,195 Improvement and construction costs 28,998 Administrative 445,168 50,337 Professional and consulting fees Planning, survey and design Rehabilitation costs and grants 38,790 Pass-through agreements Debt service: Principal retirement 12,197 6,701,236 Interest 864 3,438,029 Bond issuance costs 88,448 Total Expenditures 545,212 10,278,050 Excess (Deficiency) of Revenues Over Expenditures 1,467,224 (7,575,242) Other Financing Sources (Uses): Proceeds ofIong-term debt 7,557,616 Sale of fixed assets Operating transfers in 66,748 Operating transfers out Total Other Financing Sources (Uses) 7,624,364 Excess (Deficiency) of Revenues and Other Sources over Expenditures and Other Uses 1,467,224 49,122 Fund Balances, Beginning, Restated (Note 11) . 7,689,971 6,928,920 Fund Balances, Ending $ 9,157,195 $ 6,978.042 See Accompanying Notes to Financial Statements. 4 - - Total Capital (Memorandum Projects Only) ~ $ 2,248,377 $ 5,611,117 762,914 1,309,621 156,454 1,688,372 2,336,215 23,794 25,294 4,723,457 9,438,701 62,897 82,092 536,819 565,817 1,719,134 2,214,639 145,621 145,621 23,000 23,000 38,790 248,079 248,079 2,389,878 9,103,311 1,264,557 4,703,450 88,448 6,389,985 17,213,247 (1,66~,528) (7,774,546) 2,723,524 10,281,140 2,750,250 2,750,250 66,748 (66,748) (66,748) 5,407,026 13,031,390 3,740,498 5,256,844 8,898,814 23,517,705 $ 12,639,312 $ 28,774,549 5 - . REDEVELOPMENT AGENCY OF THE CITY OF CHill..A VISTA Combined Statement of Revenues, Expenditures, and Changes in Fund Balances - Budget and Actual (Budgetary Basis) Special Revenue and Debt Service Funds For the Year Ended June 30, 1996 Special Revenue Variance Favorable Budget Actual (Unfavorable) Revenues: Tax increment revenue $ 857,933 $ 1,022,437 $ 164,504 Revenue ftom use of money and property 809,800 184,202 (625,598) Charges for services 13,700 156,454 142,754 Reimbursement - other agencies 643,000 647,843 4,843 Miscellaneous 1,500 1,500 Total Revenues 2,325,933 2,012,436 (313,497) Expenditures: Property acquisition and operation 24,691 20,406 4,285 Improvement and construction costs 512,119 28,998 483,121 Administrative 574,727 480,955 93,772 Rehabilitation costs and grants 300,000 38,790 261,210 Debt service: Principal retirement 12,197 (12,197) Interest 864 (864) Bond issuance costs Total Expenditures 1,411,537 582,210 829,327 Excess (Deficiency) of Revenues Over Expenditures 914,396 1,430,226 515,830 Other Financing Sources: Proceeds oflong-term debt Operating tranfers in Total Other Financing Sources (Uses) Excess (Deficiency) of Revenues and Other Sources Over Expenditures and Other Uses 914,396 1,430,226 515,830 Fund Balances, Beginning, Restated (Note 11) 7,689,971 7,689,971 Fund Balances, Ending $ 8.604.367 $ 9.120.197 $ 515.830 See Accompanying Notes to Financial Statements. 6 - - Debt Service Variance Favorable Budget Actual (Unfavorable) $ 2,340,303 $ 2,340,303 362,505 362,505 2,702,808 2,702,808 $ 37,320 50,337 (13,017) 6,717,906 6,701,236 16,670 3,477,230 3,438,029 39,201 88,448 88,448 10,320,904 10,278,050 42,854 (10,320,904) (7,575,242) 2,745,662 6,242,152 7,557,616 1,315,464 66,748 66,748 6,242,152 7,624,364 1,382,212 (4,078,752) 49,122 4,127,874 6,928,920 6,928,920 $ 2,850,168 $ 6,978,042 $ 4,127,874 7 - - REDEVELOPMENT AGENCY OF THE CITY OF CHULA VISTA Notes to Financial Statements June 30,1996 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Description of Funds and Account Groups The accounting records of the Agency are organized on the basis of funds and account groups as follows: Governmental Funds: The Special Revenue Fund is used to account for the 20% portion of the Agency's tax increment revenue that is required to be set aside for low and moderate income housing and related expenditures. The Debt Service Funds are used to account for the accumulation of resources for, and the payment of principal and interest on long- term debt. The C1\)itaJ Proiects Funds are used to account for the financial resources used in developing the project areas as well as the administrative expenditures incurred in sustaining Agency activities. Account Groups: The General Fixed Assets Account Group is used to account for the cost of general fixed assets of the Agency. The General Long-Term Debt Account Group is used to record the outstanding principal balance of the Agency's long-term debt obligation. Basis of Accounting Basis of accounting refers to when revenues and expenditures are recognized in the accounts and reported in the financial statements. Basis of accounting relates to the timing of the measurements made, regardless of the measurement focus applied. The governmental funds are accounted for using the modified accrual basis of accounting. Their revenues are recognized when they become measurable and available as net current assets. Expenditures are generally recognized under the modified accrual basis of accounting when the related fund liability is incurred. An exception to this general rule is principal and interest on general long-term debt which is recognized when due. S REDEVELOPMENT AGENCY OF THE CITY OF CHULA VISTA Notes to Financial Statements (Continued) June 30, 1996 A~ency Financial Reportin~ In accordance with GASB Cod. Sec. 2100, "Defining the Governmental Reporting Entity," the Agency's financial activities will be included with financial activities of the City of Chula Vista for financial reporting purposes. Memorandum Only Totals Columns in the accompanying financial statements captioned "Total (Memorandum Only)" are not necessary for a fair presentation of the financial statements in accordance with generally accepted accounting principles, but are presented only to facilitate financial analysis. Data in these columns do not present financial position or results of operations in conformity with generally accepted accounting principles. Neither is such data comparable to a consolidation. Interfund eliminations have not been made in the aggregation of this data. General Fixed Assets General fixed assets are recorded as expenditures in the Govemmental Funds and capitalized in the General Fixed Assets Account Group at cost. No depreciation is recorded on general fixed assets. ' Investments Investments are stated at cost. When market values decline below cost, no loss is recorded if such declines are considered temporary. The Agency's policy is to hold investments until maturity, or until market values equal or exceed cost. Bud~etaty Policy and Control The Board of Directors approves the annual budget submitted by the Executive Director prior to the beginning of the new fiscal year. All appropriations lapse at year end except for those relating to encumbrances which are carried over to the subsequent year. The Board of Directors has the legal authority to amend the budget at any time during the fiscal year. The Agency maintains budgetary controls to ensure compliance with legal provisions embodied in the appropriated budget approved by the Board of Directors. Formal budgetary integration is employed as a management control device for the Special Revenue and Debt Service fund types. 9 - - REDEVELOPMENT AGENCY OF THE CITY OF CHULA VISTA Notes to Financial Statements (Continued) June 30,1996 Encumbrance accounting, under which purchase orders, contracts, and other commitments for the expenditure of funds are recorded in order to reserve that portion of the applicable appropriation, is employed in the governmental funds. Open encumbrances are recorded as reservations of fund balance since the commitments will be paid by subsequent years' budget appropriations. Encumbrances do not constitute expenditures or liabilities. Budgets for the special revenue and debt service funds (which include encumbrances) are adopted on a basis which differs fi-om generally accepted accounting principles. The Combined Statement of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual (Budgetary Basis) - Special Revenue and Debt Service Funds presents comparisons of the legally adopted budget and actual data on the budgetary basis. The budgets of the Capital Projects Funds are primarily "long-term" budgets which emphasize major programs and capital outlay plans extending over a number of years . Because of the long-term nature of projects, "annual" budget comparisons are not considered meaningful, and accordingly, no budgetary information is included in the accompanying financial statements for the Capital Projects Funds. Budgeted amounts are reported as originally adopted and as further amended by the Board of Directors. The differences between the budgetary basis and GAAP fund balances as of June 30, 1996 were as follows: Special Debt Revenue Service Fund Funds Fund balances - budgetary basis $9,120,197 $6,978,042 Encumbrances outstanding at year end 36 998 Fund balances - GAAP basis $9157 ]95 $6 978 042 2. HISTORY ORGANTZA TION AND PROPERTY TAXES The Agency was activated in October 1972, pursuant to the California Community Redevelopment Law, with its primary purpose to eliminate blighted areas by encouraging the development of residential, commercial, industrial, recreational and public facilities. The Bayfrontffown Centre I Project encompasses approximately 775 acres; its general objective is to redevelop the Bayfront area and the central business 10 - . REDEVELOPMENT AGENCY OF THE CITY OF CHULA VISTA Notes to Financial Statements (Continued) June 30, 1996 district. The goal of the Town Centre II Project, which consists of approximately 212.5 acres in the central area ofChula Vista, is to revitalize the area into a principal regional shopping center. The Otay Valley Road Project area, comprising approximately 770 acres, was created to establish and upgrade infrastructure capital improvements for the promotion of industrial development. The Southwest Project area, comprising approximately 1,100 acres, was created to upgrade the commercial, industrial, residential properties and rights-of-way at a more rapid pace than would occur without a redevelopment plan. The Agency's primary source of funding, other than advances from the City and bond proceeds, is property taxes, included in the accompanying financial statements as Tax Increment Revenue. Property taxes allocated to the Agency are computed in the following manner: a. The assessed valuation of all property within the project area was determined on the date of adoption of the Redevelopment Plan. b. Property taxes related to the incremental increase in assessed values after the adoption of the Redevelopment Plan are allocated to the Agency; all taxes on the "frozen" assessed valuation of the property are allocated to the City and other districts. The Agency has no power to levy and collect taxes, and any legislative property tax reform might reduce the amount available to pay the principal and interest on bonds or loans from the City. Broadened property tax exemptions could have a similar effect. Conversely, any increase in the tax rate or assessed valuation, or any reduction or elimination of present property tax exemptions would increase the amount of tax revenues that would be available to pay principal and interest on bonds or loans from the City. 3. CASH AND INVESTMENTS Cash and investments at June 30, 1996 consisted of the following: Cash and Investments pooled with the City $ 6,440,458 Deposits 1,048,953 Cash and Investments with Fiscal Agents 5440698 Total Cash and Investments $12930109 11 REDEVELOPMENT AGENCY OF THE CITY OF CHULA VISTA Notes to Financial Statements (Continued) June 30, 1996 Pooled Cash and Investments: The Agency follows the practice of pooling all cash and investments (except for cash and investments with fiscal agents and certain deposits) with the City of Chula Vista to maximize yield. These cash and investments are not specifically identifiable and are not subject to categorization. Deposits/Credit Risk: The California Government Code requires California banks and savings and loan associations to secure deposits by pledging government securities as collateral. The market value of pledged securities must equal at least 110% of an Agency's deposits. California law also allows financial institutions to secure Agency deposits by pledging first trust deed mortgage notes having a value of 150% of the Agency's total deposits. The Agency may waive collateral requirements for deposits which are fully insured up to $100,000 by Federal depository insurance. In accordance with GASB Statement 3, deposits are classified as to credit risk by three categories as follows: Category I: Insured or collateralized with securities held by the Agency or by its agent in the Agency's name. Category 2: Collateralized with securities held by the pledging financial institution's trust department or agent in the Agency's name. Category 3: Uncollateralized At June 30, 1996, $100,000 of the Agency's deposits of $1,048,953 is insured and therefore in Category 1. The remaining collateralized amount is in Category 2. The Agency also had deposits of $39,078 with a fiscal agent which is classified in category 3. Cash and Investments with Fiscal Agents: The Agency has monies held by fiscal agents pledged to the payment or security of certain bonds. The California Government Code provides these monies, in the absence of specific statutory provisions governing the issuance of bonds, may be invested in accordance with the ordinance, resolutions or indentures specifying the types of investments its fiscal agents may make. 12 - - REDEVELOPMENT AGENCY OF THE CITY OF CHULA VISTA Notes to Financial Statements (Continued) June30, 1996 Credit Risk Canying Amount and Market Value ofInvestments: The investments that are represented by specific identifiable investment securities are classified as to credit risk by the three categories as follows: Category I: Insured or registered, or securities held by the Agency or its agent in the Agency's name. Category 2: Uninsured and unregistered with securities held by the pledging financial institution's or counterparty's trust department or agent in the Agency's name. Category 3: Uninsured and unregistered with securities held by the counterparty, or by its trust department or agent, but not in the Agency's name. Investments with fiscal agents consisted of the following at June 30,1996: Contractual! Cate~oQ' Carrying Market .......L- ---L- 3 Amount Value u.S. Treasury Notes $ 566,627 $ 566,627 $ 575,145 Repurchase Agreement 745,512 745,512 745,512 Investment Agreements(2) 1,081,110 3,173,983 3,173,983 Mutual Funds(1) - - 915498 915498 Total Investments with Fiscal Agents ~ $ - $2393249 $5401620 $54]0138 (1) Not subject to categorization. (2) Total includes agreements with non-financial institutions, which are not subject to categorization. 13 - . REDEVELOPMENT AGENCY OF THE CITY OF CHULA VISTA Notes to Financial Statements (Continued) June 30, 1996 4. LOANS RECEIVABLE As of June 30, 1996 the Agency had made the following loans: Chllla Vista Rehabilitation CHIP T ,oans The Chura Vista Rehabilitation Community Housing Improvement Program ("CHIP") is under the direct control of the Agency. CHIP offers deferred and low interest rate home improvement loans to qualified borrowers residing within a target area. Loan repayments are redeposited into the program cash accounts and are redistributed as future loans. The program was originally funded entirely with Community Development Block Grant Federal funds. In recent years, the Agency began supplementing the program due to decreased availability of Federal grants. In the current year, new contributions to the program were made entirely with Agency funds. Interest receivable of$1O5,663 is deferred at June 30, 1996. $ 4,244,487 Shinohara Loan The Agency entered into a loan agreement with Judi and Jimmie Shinohara, the previous owners of property purchased by the Agency. The loan was made to fund the cleanup of hazardous materials, discovered during pre-closing grading work, agreed to be completed by the seller. The loan is secured by a deed of trust. Interest accrues quarterly at 7%. The principal, along with accrued interest of $382,007, is payable in full on August 18, 1997. 1,500,000 One Park Ltd Loan The Agency entered into a cooperative agreement with One Park, Ltd. ("OPL") in 1986 whereby the Agency's Low and Moderate Income Housing Fund provided a construction loan of $850,000 to OPL on a deferred basis. The project is a rental apartment project and under the agreement, 75% of the project units are reserved for low and moderate income occupancy at affordable rent levels. The Agency participates in the equity gain on the project, receiving at sale or term a percentage of the gross sales price of the project. The percentage increases incrementally over the term of the loan and peaks at 4.5%. Interest accrues, but is not paid periodically nor is principal. The deeds of trust to be provided by OPL to the Agency have been subordinated to 14 - - REDEVELOPMENT AGENCY OF THE CITY OF CHULA VISTA Notes to Financial Statements (Continued) June 30, 1996 concurrently recorded deeds of trust held by the construction and permanent financing lenders. Interest receivable of $1,170,975 has been deferred at June 30, 1996. 850,000 Chula Vista B~ront Conservancy Tmst Loans As ofJune 30,1996, the Agency had made loans of$I,506,417 to the Chula Vista Bayfront Conservancy Trust (the "Trust"), a nonprofit public benefit corporation established to ensure the protection of the environmentally sensitive areas of the Chula Vista Bayftont. Interest accrues annually at rates ranging ITom 5.5% to II %. The Trust entered into a Lease, Loan and Operating Agreement (the "Agreement") with the City of Chula Vista and the Agency for the use of a building and other facilities. The lease portion of the agreement requires payment of $1 per year through July 1997. The Agreement states that the intention of the parties is to negotiate a longer lease term before the end of the current term and indicates that the rental payment may be increased to fair market value at that time. In addition, the Agreement sets forth certain operating provisions to be followed by the Trust. Furthermore, the Agreement calls for the Trust to develop a repayment schedule for the loans by July 1997. Should the parties fail to reach agreement by then, the outstanding loans and interest shall be due and payable in July 1997. The Trust is subject to certain covenants detailed in the Three Party Agreement which includes the requirement that the Trust maintain minimum insurance coverages. The Trust is in compliance with all covenants. As of June 30, 1996 the Trust had an accumulated deficit of $4,138,410. Unpaid interest on the loans of $566,307 is reflected in the Capital Projects Funds (See Note 10). 1,506,417 Civic Center Barrio Housing COI:poration I ,Dan In 1991 the Agency entered into a loan agreement with the Civic Center Barrio Housing Corporation, a Califomia non-profit public benefit corporation. The loan was made for the purchase of land and the development of a 28 unit low income housing proj ect. During 1992, the loan was assigned to Park Village Apartments Ltd., a California limited partnership in which Civic Center Barrio Housing Corporation is the managing general partner. The loan is secured by a deed of trust on the property and assignment of rents. Principal and interest are payable monthly. Interest accrues annually at 5% of the unpaid principal balance of the note. 306,166 15 _. - .. REDEVELOPMENT AGENCY OF THE CITY OF CHULA VISTA Notes to Financial Statements (Continued) June30, 1996 Scripps Memorial Hospital Loan The Agency has entered into a loan agreement with Scripps Memorial Hospital ("Scripps"), a California non-profit corporation. The loan was made so Scripps could provide relocation assistance to relocate Rollerskateland as part of Scripps' expansion in the City. The loan is an unsecured promissory note. Interest accrues annually at 4.5% through December 1997 and 8% for the remaining period; interest is payable monthly. All principal and any accrued but unpaid interest is due and payable December 20, 2004. The loan may be required to be paid earlier in the event of default. 300,000 Mobilehome Assistance Pro~rarns The Agency entered into agreements with eligible residents of the Orange Tree Mobilehome Park, whereby the Agency loaned $250,030 as permanent financing assistance to residents for the purpose of purchasing certain mobilehome property. The loans are secured by deeds of trust on the property and mature in 2017 or when the property is sold. Contingent interest will be charged based on calculations specified in the agreement. ] 25 280 Total Loans Receivable $8 832 350 5. LEASESRECErvABLE The Agency has entered into three lease agreements with the City in connection with the Certificates of Participation mentioned in Note 7. The City's annual lease payments to the Agency are equal to the annual debt service requirements on the outstanding Certificates of Participation. The Agency has also entered into reimbursement agreements with the City whereas the Agency is to reimburse the City for certain lease payments made under the leases. At June 30, 1996, the Agency had $4,264,025 of advances payable to the City in the Long-term Debt Account Group pertaining to the reimbursement agreements (See Note 7). 16 - - REDEVELOPMENT AGENCY OF THE CITY OF CHULA VISTA Notes to Financial Statements (Continued) June 30, 1996 6. FIXED ASSETS Changes in general fixed assets during the year ended June 30, 1996 were as follows: Balance Balance July I 1995 Addition~ Deletion~ June 30 1996 Land $25,575,630 $5,355,000 $ 9,761,463 $21,169,167 Buildings 2,591,779 791,295 764,948 2,618,126 Equipment 384,301 5,491 389,792 Improvements 31479 31479 Total $28 583 189 $6151786 $1052641] $24208564 7. LONG-TERM DEBT Changes in long-term debt for the year ended June 30, 1996 were as follows: Balance Balance July I 1995 Addition~ Deletion~ June30 1996 Note payable $ 776,071 $ 4,726 $ 51,236 $ 729,561 Loans payable 327,920 12,197 315,723 Advances from the City ofChula Vista 6,279,571 2,531,870 1,411,878 7,399,563 Advances ITom other funds 12,426,865 2,064,544 978,000 13,513,409 Tax allocation bonds 28,655,000 5,680,000 5,735,000 28,600,000 Certificates of participation 18 420 000 915000 17505000 $66 885 427 $10 281 140 $9103311 $68063 256 Notes P'lYable In June 1995, the Agency entered into a note payable with Cypress Creek Co., in order to provide for reimbursement of the Agency's agreed-upon share of site acquisition costs under the Palomar Trolley Center Disposition and Development Agreement. Installments payments of principal and interest will be payable within 30 days of the Agency receiving "Detailed Reports" ITom the State Board of Equalization itemizing the sources of the State Board of Equalization reconciliation payment for "Sales Tax Revenues". The Agency will remit an amount equal to thirty percent of the 17 - - REDEVELOPMENT AGENCY OF THE CITY OF CHULA VISTA Notes to Financial Statements (Continued) June 30,1996 sales tax revenues generated by the project until the unpaid principal balance plus any and all accrued interest is paid in full. Simple interest accrues at a rate of7% annually. ~ T ,Dans PE\Yable The Agency entered into loan agreements with a bank in order to purchase certain Orange Tree Mobilehome Park lots. These lots will be held by the Agency and rented to park residents until the residents or qualified buyers can purchase these lots ITom the Agency. The loans carry interest at 11.5% annually and mature in the year 2008. The Agency intends to sell the lots and payoff the loans in subsequent years and has therefore recorded the outstanding balances in the General Long-Tenn Debt Account. $315723 Advances from the City ofChula Vista The Agency has entered into reimbursement agreements with the City to reimburse the City for certain lease payments made by the City under various lease agreements (See Note 5). Accrued interest in the amount of$298,907 is included in the balance at June 30, 1996. $4,264,025 The Chula Vista City Council authorized various loans to the Redevelopment Agency for operating purposes. The tenns of the loans are indefmite. Accrued interest in the amount of $1,470,207 is included in the balance at June 30, 1996. 3 135 538 Sub-Total 7,399,563 The City Sewer Special Revenue Fund has loaned $1,500,000 to the Town Centre II Capital Projects Fund and $825,000 to the Southwest Capital Projects Fund. Accrued interest of $93,085 is included in the balance at June 30, 1996. 2418085 Total Advances from the City ofChula Vista $9817648 Advances ITom Other Funds The Bayfi'ont Town Center I Capital Projects Fund has advanced $9,459,803 to other Capital Projects Funds for operating purposes (See Note 9). The tenns of the advances are indefinite. Accrued interest in the amount of$3,629,29l is included in the balance at June 30, 1996. $13,089,094 18 - . REDEVELOPMENT AGENCY OF THE CITY OF CHULA VISTA Notes to Financial Statements (Continued) June 30, 1996 The Special Revenue Fund has advanced $45,600 to the Otay Valley Capital Projects Food for operating purposes. The terms of the advance are indefinite. Accrued interest in the amount of$58,685 is included in the balance at June 30, 1996. 104,285 The Agency has recorded an advance to the Low and Moderate Income Housing Food for the 20% set aside of tax increment received in the Town Center n Capital Projects Fund. This amount is required to be deposited into the Low and Moderate Income Housing Fund. Accrued interest in the amount of$17,135 is included in the balance at June 30, 1996. 320030 Total Advances from Other Funds $13 513 409 Tax Allocation Bonds In November 1994, the Agency issued $14,810,000 1994 Senior Tax Allocation Refunding Bonds, Series A, to refund the 1986 Tax Allocation Bonds. The bonds consist of$I,925,000 serial bonds which mature ITom 1996 to 2004 in amounts ranging ITom $165,000 to $275,000 and $12,885,000 term bonds which mature in 2024. Interest is payable semi-annually on March 1 and September 1, at interest rates ranging ITom 5.6% to 7.625%. Bonds maturing on or after September 1,2006 are subject to optional redemption on any interest payment date on or after September I, 2005 at various redemption prices. $14,810,000 In-February 1996, the Agency issued $5,680,000 1994 Senior Tax Allocation Refunding Bonds, Series D to refund the Agency's Bayfi-ontlrown Centre Redevelopment Project, 1994 Senior Tax Allocation Refunding Bonds, Series B. The 1994 Bonds, Series B, were paid off with the bond proceeds. The bonds are term bonds which mature in 2024. Interest is payable semi-annually on March I and September I at 8.625%. The bonds are subject to redemption prior to maturity on any interest payment date, on or after September 1,2006 at various redemption prices. The bonds are subject to mandatory sinking fund redemption prior to maturity, in part, by lot, on September 1,1996 and on each September I thereafter, without premium, ITom 1996 to 2024 in amounts ranging ITom $40,000 to $495,000. 5,680,000 19 -" - - REDEVELOPMENT AGENCY OF THE CITY OF CHULA VISTA Notes to Financial Statements (Continued) June 30, 1996 In November 1994, the Agency issued $8,195,000 1994 Subordinate Tax Allocation Refunding Bonds, Series C, to refund the 1986 Tax Allocation Bonds. The bonds consist of$I,015,000 serial bonds which mature from 1996 to 2004 in amounts ranging fÌ'om $85,000 to $145,000 and term bonds of$2,255,000 and $4,925,000 which mature in 2014 and 2024, respectively. Interest is payable semi-annually on May I and November 1 at interest rates ranging fÌ'om 5.95% to 8.25%. The bonds are subject to optional redemption on any interest payment date on or after May I, 2005 at various redemption prices. 8110000 Total Tax Allocation Bonds $28 600 000 Certificates of Participation In September 1987, the Agency issued $6,600,000 Certificates of Participation, Series B, to provide capital improvements and to advance refund the 1982 Parking Facility Certificates of Participation. The certificates mature in amounts ranging fÌ'om $460,000 in 1996 to $735,000 in 2002. Interest is payable semi-annually on March I and September 1, at interest rates ranging from 7.75% to 8.5% annually. The 1987 Series B Certificates maturing after September I, 1997 are subject to redemption at premiums ranging from zero to 2%. $ 4,110,000 In March 1993, the Agency issued $11,285,000 1993 Refunding Certificates of Participation to advance refund the 1987 Series A Certificates of Participation. The certificates mature in amounts ranging fi-om $395,000 in 1996 to $925,000 in 2012. Interest is payable semi- annually on March 1 and September I, at interest rates ranging fÌ'om 4.25% to 6%. The certificates maturing after September 1,2003 are subject to redemption at premiums ranging from zero to 2%. 10,385,000 In December 1993, the Agency issued $3,115,000 1993 Certificates of Participation to provide capital improvements in the Town Centre II Redevelopment Project of the Agency. Net proceeds of $2,600,000 were paid to Homart Development Co., for construction of a public parking facility. The certificates mature in amounts ranging fÌ'om $110,000 in 1996 to $250,000 in 2013. Interest is payable semi- annually on March 1 and September 1, at interest rates ranging fÌ'om 3.9% to 5.8%. The certificates maturing after September 1,2003 are subject to redemption at premiums ranging fÌ'om zero to 2%. 3010000 Total Certificates of Participation $17 505 000 20 REDEVELOPMENT AGENCY OF THE CITY OF CHULA VISTA Notes to Financial Statements (Continued) June 30, 1996 The annual requirements to amortize the tax allocation bonds and certificates of participation, as of June 30, 1996, including interest payments of $53,054,352 are as follows: Year Tax Ending Allocation Certificates of June 30 Bonds Participation Total 1997 $ 2,562,262 $ 2,018,437 $ 4,580,699 1998 2,556,029 2,013,633 4,569,662 1999 2,553,905 2,002,738 4,556,643 2000 2,549,841 2,005,503 4,555,344 2001 2,552,777 2,006,347 4,559,124 Thereafter 59 864 833 ]6473047 76337880 $72 639 647 $26519705 $99 159352 8. DEFEASED DEBT In November 1994, the Agency advance refund $27,095,000 1986 Tax Allocation Bonds by placing in an ÍITevocable trust amounts sufficient to meet all future debt service payments of the refunded debt As a result, the 1986 Tax Allocation Bonds were considered defeased and the liability was removed &om the General Long-Term Debt Account Group. The 1986 bonds were paid off in fiscal year 1995-96. On May 29, 1986, the Agency advance refunded $7,150,000 1979 Tax Allocation Bonds by placing in an irrevocable trust amounts sufficient to meet all future debt service payments of the refunded debt As a result, the 1979 bonds were considered defeased and the liability - was removed &om the General Long-Term Debt Account Group. The outstanding balance at June 30, 1996 was $4,575,000. On March I, 1993, the Agency advance refunded $9,640,000 1987 Series A Certificates of Participation by placing in an irrevocable trust amounts sufficient to meet all future debt service payments of the refunded debt As a result, the 1987 bonds were considered defeased and the liability was removed from the General Long-Term Debt Account Group. The outstanding balance at June 30, 1996 was $8,940,000. 21 - - REDEVELOPMENT AGENCY OF THE CITY OF CHULA VISTA Notes to Financial Statements (Continued) June30, 1996 9. INTERF1 JND RECETV ABLESIP A Y ABT ,FS At June 30, 1996 interfund receivables and payables consisted of the following: Receiv1\hles P<lYahles Special Revenue Fund $ 424,315 Capital Projects Funds: BayfTontIT own Center I 13,089,094 Long-term Debt Account Group: Town Center II Project Area $ 3,276,077 Otay Valley Project Area 9,645,262 Southwest Project Area 565,544 Town Center I Project Area 26 526 $13513 409 $13 513 409 10. DEFERRFD REVFNTJF DefeITed revenue consisted of the following at June 30, 1996: Interest Receivable on: Advances to other funds (See Note 7) $3,705,111 Loans Receivable (See Note 4): Shinohara 382,007 One Park, Ltd 1,170,975 Chula Vista Bajiront Conservancy Trust 566,307 CHIP . 105,663 Advance to other funds (See Note 7) 302,895 Lease Receivable (See Note 5) 17,505,000 Other 3373 Total DefeITed Revenue $23741 331 11. PRIOR PERIOD ADJUSTMENT Interest income of $66,514 on Community Housing Improvement Program (CHIP) loans was not defeITed at June 30, 1995. The beginning fund balance of the Special Revenue Fund has been restated as follows: 22 - . REDEVELOPMENT AGENCY OF THE CITY OF CHULA VISTA Notes to Financial Statements (Continued) June 30, 1996 As Previously Reported $7,756,485 Adjustment (665]4) As Restated $7 689 971 12. COMM1TMFNT~ AND CONTINGENCIES At June 30, 1996, the Agency has been named as a defendant in various legal complaints. The Agency intends to contest the allegations made, but the results of the litigation are not presently determinable. However, in the opinion of management, the amount of losses that might be sustained would not materially affect the Agency's financial position. In August 1994, the Agency entered into a Disposition and Development Agreement with Wal-Mart Stores and Chula Vista Tour Center Associates, L.P., for the development of a Wal-Mart Store within the Town Center II project area Under the agreement, the Agency agreed to reimburse the Redeveloper $1,915,000. The payments on the note are to be based on a percentage of the sales tax revenues generated by the store. A lawsuit has been filed contesting the legality of the Agency entering into such an agreement. The litigation was successful at the trial court level, thereby negating the Agency's obligation under the promissory note. However, there remains a possibility that the trial court decision could be overturned on appeal. The amount that the Agency would have had to pay Wal-Mart Stores in fiscal year 1995-96 under the note was $13,300. p. OTIIER REQUIRED INDIVIDUAl, FT JND DISCLOSURES The following funds had deficit fund balances at June 30, 1996 which are expected to be eliminated through future revenues: Capital Projects Funds: Town Center II $640,108 Southwest 834,554 23 - . SUPPLEMENTARY INFORMATION 25 REDEVELOPMENT AGENCY OF THE CITY OF CHULA VISTA Combining Balance Sheet All Debt Service Funds June 30, 1996 Bayfrontl Town Town ~ Centre I Centre II Southwest Total Cash and investments $ 1,503,568 $ 31,033 $ 1,534,601 Interest receivable 2,675 68 2,743 Restricted Assets: Cash and investments with fiscal agents 3,370,128 2,070,570 5,440,698 Total Assets $ 4,876,371 $ 2,101,671 $ - $ 6,978,042 Fund Balances Fund Balances: Reserved for debt service $ 4,876,371 $ 2,101,671 $ - $ 6,978,042 26 - - -- -- REDEVELOPMENT AGENCY OF THE CITY OF CHULA VISTA Combining Statement of Revenues, Expenditures and Changes in Fund Balances All Debt Service Funds For the Year Ended June 30,1996 Bayfrontl Town Town Centre I Centre II Southwest Total Revenues: Tax increment revenue $ 2,340,303 $ 2,340,303 Revenue ITom use of money and property 244,355 $ 118,150 362,505 Total Revenues 2,584,658 118,150 2,702,808 Expenditures: Administrative 34,380 15,957 50,337 Debt service: Principal retirement 6,068,250 581,750 $ 51,236 6,701,236 Interest 2,594,526 833,265 10,238 3,438,029 Bond issuance costs 88,448 88,448 Total Expenditures 8,785,604 1,430,972 61,474 10,278,050 (Deficiency) of Revenues Over Expenditures (6,200,946) (1,312,822) (61,474) (7,575,242) Other Financing Sources (Uses): Proceeds oflong-term debt 6,242,152 1,310,738 4,726 7,557,616 Operating transfers in 10,000 56,748 66,748 Total Other Financing Sources (Uses) 6,242,152 1,320,738 61,474 7,624,364 Excess of Revenues and Other Sources Over Expenditures and Other Uses 41,206 7,916 49,122 Fund Balances, Beginning 4,835,165 2,093,755 6,928,920 Fund Balances, Ending $ 4,876,371 $ 2,101.671 $ - $ 6.978.042 27 - . REDEVELOPMENT AGENCY OF TIffi CITY OF CHULA VISTA Statement of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual Bayftont/Town Centre I Debt Service Fund For the Year Ended June 30,1996 Variance Favorable Budget Actual (Unfavorable) Revenues: Tax increment revenue $ 2,340,303 $ 2,340,303 Revenue ftom use of money and property 244,355 244,355 Total Revenues 2,584,658 2,584,658 Expenditures: Administrative $ 19,650 34,380 (14,730) Debt service: Principal retirement 6,068,250 6,068,250 Interest 2,620,279 2,594,526 25,753 Bond issuance costs 88,448 88,448 Total Expenditures 8,796,627 8,785,604 11,023 (Deficiency) of Revenues Over Expenditures (8,796,627) (6,200,946) 2,595,681 Other Financing Sources: Proceeds oflong-term debt 6,242,152 6,242,152 Excess (Deficiency) of Revenues and Other Sources Over Expenditures (2,554,475) 41,206 2,595,681 Fund Balance, Beginning 4,835,165 4,835,165 Fund Balance, Ending $ 2,280,690 $ 4,876.371 $ 2,595,681 28 -. . .' REDEVELOPMENT AGENCY OF THE CITY OF CHVLA VISTA Statement of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual Town Centre II Debt Service Fund For the Year Ended June 30, 1996 Variance Favorable Budget Actual (Unfavorable) Revenues: Revenue ITom use of money and property $ 118,150 $ 118,150 Expenditures: Administrative $ 17,670 15,957 1,713 Debt service: Principal retirement 598,420 581,750 16,670 Interest 826,951 833,265 (6,314) Total Expenditures 1,443,041 1,430,972 12,069 (Deficiency) of Revenues Over Expenditures (1,443,041) (1,312,822) 130,219 Other Financing Sources: Proceeds oflong term debt 1,310,738 1,310,738 Operating transfers in 10,000 10,000 Total Other Financing Sources 1,320,738 1,320,738 Excess (Deficiency) of Revenues and Other Sources Over Expenditures (1,443,041) 7,916 1,450,957 Fund Balance, Beginning 2,093,755 2,093,755 Fund Balance, Ending $ 650,714 $ 2.101.671 $ 1.450.957 29 -.. - .. REDEVELOPMENT AGENCY OF THE CITY OF CHULA VISTA Statement of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual Southwest Debt Service Fund For the Year Ended June 30, 1996 Variance Favorable Budget Actual (Unfavorable) Expenditures: Debt service: Principal retirement $ 51,236 $ 51,236 Interest 30,000 10,238 $ 19,762 Total Expenditures 81,236 61,474 19,762 Other Financing Sources: Proceeds of long term debt 4,726 4,726 Operating transfers in 56,748 56,748 Total Other Financing Sources 61,474 61,474 (Deficiency) of Other Sources Over Expenditures (81,236) 81,236 Fund Balance, Beginning Fund Balance, Ending $ (81,236) $ - $ 81.236 30 - . REDEVELOP}'-fENT AGENCY OF THE CITY OF CHULA VISTA Combining Balance Sheet Capital Project Funds June 30, 1996 Bayfi-ontl Town Otay ~ Town Center I Center IT Valley Cash and investments $ 729,361 $ 618,114 $ 929,686 Loans receivable 1,506,417 300,000 1,500,000 Interest receivable 571,771 2,123 384,767 Leases receivable 3,185,250 14,319,750 Other receivables 28,571 14,857 31,709 Advances to other funds 13,089,094 Total Assets $ 19,110,464 $ 15,254,844 $ 2,846.162 Liabilities and Fund Balances Liabilities: Accounts payable $ 2,706 $ 10,452 $ 77,091 Advances from the City of Chula Vista 1,561,375 Deferred revenue 7,380,848 14,323,125 382,007 Total Liabilities 7,383,554 15,894,952 459,098 Fund Balances: Reserved for: Loans receivable 1,506,417 300,000 1,500,000 Advances to other funds 9,459,803 ~Encumbrances 90,041 5,553 5,553 Unreserved, undesignated 670,649 (945,661) 881,511 Total Fund Balances (Deficit) 11,726,910 (640,108) 2,387,064 Total Liabilities and Fund Balances $ 19,110.464 $ 15,254,844 $ 2,846.162 32 . . Southwest Total $ 118,811 $ 2,395,972 3,306,417 1,126 959,787 17,505,000 21,874 97,011 13,089,094 $ 141,811 $ 37,353,281 $ 119,655 $ 209,904 856,710 2,418,085 22,085,980 976,365 24,713,969 3,306,417 9,459,803 25,453 126,600 (860,007) (253,508) (834,554) 12,639,312 $ 141,811 $ 37.353.281 33 -. - ., REDEVELOPMENT AGENCY OF TIIE CITY OF CHULA VISTA Combining Statement of Revenues, Expenditures, and Changes in Fund Balances Capital Project Funds For the Year Ended June 30, 1996 BayfTont/ Town Otay Town Center! Center IT Valley Revenues: Tax increment revenue $ 437,137 $ 640,687 $ 716,097 Revenue fÌ"om use of money and property 666,806 31,307 21,249 Reimbursement - other agencies 1,522,588 126,350 39,434 Miscellaneous 23,794 Total Revenues 2,650,325 798,344 776,780 Expenditures: Property acquisition and operation 49,180 Improvement and construction costs 290,223 82,342 164,254 Administrative 712,457 138,272 242,014 Professional and consulting fees 89,700 21,470 15,746 Planning, survey, and design Pass-through agreements Debt service: Principal retirement 102,970 117,808 2,169,100 Interest 11,742 501,204 670,094 Total Expenditures 1,256,272 861,096 3,261,208 Excess (Deficiency) of Revenues Over Expenditures 1,394,053 (62,752) (2,484,428) Other Financing Sources (Uses): Proceeds oflong-term debt 26,527 562,144 1,808,139 Sale of Fixed Assets 1,175,000 1,575,250 Operating transfers out (10,000) Total Other Financing Sources (Uses) 1,201,527 552,144 3,383,389 Excess (Deficiency) of Revenues and Other Sources Over Expenditures and Other Uses 2,595,580 489,392 898,961 Fund Balances (Deficits), Beginning 9,131,330 (1,129,500) 1,488,103 Fund Balances (Deficits), Ending $ 11.726.910 $ (640.108) $ 2.387.064 34 - . Southwest Total $ 454,456 $ 2,248,377 43,552 762,914 1,688,372 23,794 498,008 4,723,457 13,717 62,897 536,819 626,391 1,719,134 18,705 145,621 23,000 23,000 248,079 248,079 2,389,878 . 81,517 1,264,557 1,011,409 6,389,985 (513,401) (1,666,528) 326,714 2,723,524 2,750,250 (56,748) (66,748) 269,966 5,407,026 (243,435) 3,740,498 (591,119) 8,898,814 $ (834.554) $ 12,639.312 35 . - .. .. - 1201 DOVE STREET. SUITE 680 M O;~!:2~c~~ NEWPORT BEACH, CALIFORNIA 92680 (714) 221-0025 570 RANCHEROS DRIVE, SUITE 260 SAN MARCOS, CA 92069 (619) 752.3390 November 8, 1996 The Board of Directors of the Redevelopment Agency of the City ofChula Vista IndE:jJendent Auditors' RE:jJort on Compliance Based on an Audit of General PUJ::pose Financial Statements Performed in Accordance With Government Auditini Standards We have audited the general purpose financial statements of the Redevelopment Agency of the City of Chula Vista, a component unit of the City of Chula Vista, as of and for the year ended June 30,1996, and have issued our report thereon dated November 8,1996. We conducted our audit in accordance with generally accepted auditing standards and Government Auditini 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. Compliance with laws, regulations, contracts, and grants applicable to the Redevelopment Agency of the City of Chula Vista is the responsibility of the Redevelopment Agency of the City of Chula Vista management. As part of obtaining reasonable assurance about whether the financial statements are free of material misstatement, we performed tests of the Redevelopment Agency of the City of Chula Vista compliance with certain provisions of laws, regulations, contracts, and grants. However, the objective of our audit of the general purpose fmancial statements was not to provide an opinion on overall compliance with such provisions. Accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance that are required to be reported herein under Government Auditin" Standards. This report is intended for the information of the Board of Directors and management of the Redevelopment Agency of the City of Chula Vista. However, this report is a matt,er of public record and its distribution is not limited. ~ tlu/c~ 71t1'1d ~ ,l. 37 - . 1201 DOVE STREET, SUITE 680 M oreland &~ NEWPORT BEACH, CALIFORNIA 92660 (714) 221-0025 CERTIFIED PUBLIC ACCOUNTANTS 570 RANCHEROS DRIVE, SUITE 260 SAN MARCOS, CA 92069 (619) 752.3390 November 8,1996 The Board of Directors of the Redevelopment Agency of the City of Chula Vista IndeDendent Auditors' ReDor! on ComDliance With Provisions of Laws and Regulations Contained in the Guidelines For ComDliance Audits of California RedeveloDment Agencies We have audited the general purpose financial statements of the Redevelopment Agency of the CityofChula Vista as of and for the year ended June 30,1996, and have issued our report thereon dated November 8, 1996. We conducted our audit in accordance with generally accepted auditing standards and Government Auditing Standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. Compliance with laws and regulations applicable to the Redevelopment Agency of the City of Chula Vista is the responsibility of the Redevelopment Agency of the City of Chula Vista management. As part of obtaining reasonable assurance about whether the financial statements are free of material misstatement, we performed tests of the Redevelopment Agency of the City of Chula Vista compliance with provisions of laws and regulations contained in the Guidelines For ComDliance Audits of California RedeveloDment Agencies issued by the State Controller's Office, Division of Local Government Fiscal Affairs. The results of our tests indicated that, with respect to the items tested, the Redevelopment Agency of the City of Chula Vista complied, in all material respects, with the provisions referred to in the preceding paragraph. With respect to items not tested, nothing came to our attention that caused us to believe that the Redevelopment Agency of the City ofChula Vista has not complied, in all material respects, with those provisions. However, the results of our procedures disclosed the following immaterial instance of non-compliance with these prOVISIOns: 39 -. - .' Health and Safety Code Section 33334.2 and 33334.6 require that certain findings be made annually by resolution of the Agency if 20% of the tax increment fi-om a project area is not set aside for low and moderate income housing. Such a finding was not made for the Bayfrontffown Center I project area for fiscal year ended June 30, 1996. Agency staff has informed us that they were aware of the shortfall and are analyzing whether such findings can be made given current conditions in this project area. This report is intended for the information of the Redevelopment Agency of the City of Chula Vista management and the State Controller's Office. However, this report is a matter of public record and its distribution is not limited. '-m1'1d ~ ,I. ç au " c tdr:.s 40 _.. . .. 1201 DOVE STREET, SUITE 680 M O~~!~~C~~ NEWPORT BEACH, CALIFORNIA 92660 (714) 221-0025 570 RANCHEROS DRIVE, SUITE 260 SAN MARCOS, CA 92069 (619) 752-3390 November 8, 1996 The Board of Directors of the Redevelopment Agency of the City of Chula Vista Ind~endent Auditors' R~ort on the Internal Control Stmcture Based on an Audit of Genernl PuQ)ose Financial Statements Performed in Accordance With Government Auditini Standards We have audited the general purpose financial statements of the Redevelopment Agency of the City ofChula Vista, a component unit of the City ofChula Vista, as of and for the year ended June 30, 1996, and have issued our report thereon dated November 8, 1996. We conducted our audit in accordance with generally accepted auditing standards and Government Allditini 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 general purpose financial statements are free of material misstatement. The management of the Redevelopment Agency of the City ofChula Vista is responsible for establishing and maintaining an internal control Structure. In fulfilling this responsibility, estimates and judgments by management are required to ass~ss the expected benefits and related costs of internal control structure policies and procedures. The objectives of an internal control structure are to provide management with reasonable, but not absolute, assurance that assets are safeguarded against loss from unauthorized use or disposition and that transactions are executed in accordance with management's authorization and recorded properly to permit the preparation of general purpose financial statements in accordance with generally accepted accounting principles. Because of inherent limitations in any internal control structure, errors or irregularities may nevertheless occur and not be detected. Also, projection of any evaluation of the structure to future periods is subject to the risk that procedures may become inadequate because of changes in conditions or that the effectiveness of the design and operation of policies and procedures may deteriorate. In planning and performing our audit of the general purpose financial statements of the Redevelopment Agency of the City of Chula Vista for the year ended June 30, 1996, we obtained an understanding of the internal control structure. With respect to the internal control structure, we obtained an understanding of the design of relevant policies and procedures and 41 -.. - .. whether they have been placed in operation, and we assessed control risk in order to determine our auditing procedures for the purpose of expressing our opinion on the general purpose financial statements and not to provide an opinion on the internal control structure. Accordingly, we do not express such an opinion. Our consideration of the internal control structure would not necessarily disclose all matters in the internal control structure that might be material weaknesses under standards established by the American Institute of Certified Public Accountants. A material weakness is a reportable condition in which the design or operation of one or more of the internal control structure elements does not reduce to a relatively low level the risk that errors or irregularities in amounts that would be material in relation to the general purpose financial statements being audited may occur and not be detected within a timely period by employees in the normal course of performing their assigned functions. We noted no matters involving the internal control structure and its operation that we consider to be material weaknesses as defined above. However, we noted certain matters ofless significance involving the internal control structure and its operation that we have reported in a separate letter dated November 8, 1996, to the management of the City ofChula Vista, relating to both the City and the Agency. This report is intended fòr the information of the Board of Directors and management of the Redevelopment Agency of the City of Chula VisúL However, this report is a matter of public record and its distribution is not limited. /fl ML1 #-rt eL f ~u~a:ks 42