City of San Gabriel, California
COMPREHENSIVE ANNUAL
FINANCIAL REPORT
FOR FISCAL YEAR ENDED
JUNE 30, 2019
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CITY OF SAN GABRIEL, CALIFORNIA
COMPREHENSIVE ANNUAL FINANCIAL REPORT
WITH REPORT ON AUDIT
BY INDEPENDENT
CERTIFIED PUBLIC ACCOUNTANTS
For the Year Ended June 30, 2019
Prepared by:
FINANCE DEPARTMENT
Paula Chamberlain
Interim Director of Finance
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City of San Gabriel
Comprehensive Annual Financial Report
For the year ended June 30, 2019
Table of Contents
Page
Number INTRODUCTORY SECTION:
Letter of Transmittal i Officials of the City of San Gabriel viii Organization Chart ix
GFOA Certificate of Achievement for Excellence in Financial Reporting x
FINANCIAL SECTION:
Independent Auditors’ Report 1
Management’s Discussion and Analysis (Required Supplementary Information) 4
Basic Financial Statements: 15
Government-wide Financial Statements: 17
Statement of Net Position 19
Statement of Activities 20
Fund Financial Statements: 21
Governmental Funds: 23
Balance Sheet 24
Reconciliation of the Governmental Funds Balance Sheet
to the Government-wide Statement of Net Position 27
Statement of Revenues, Expenditures and Changes in Fund Balances 28
Reconciliation of the Governmental Funds Statement of Revenues,
Expenditures and Changes in Fund Balances to the Government-wide
Statement of Activities 30
Proprietary Fund Financial Statements: 31
Statement of Net Position 32 Statement of Revenues, Expenses and Changes in Net Position 33
Statement of Cash Flows 34
Fiduciary Fund Financial Statements: 35 Statement of Fiduciary Net Position 36
Statement of Changes in Fiduciary Net Position 37
Notes to Basic Financial Statements 41
City of San Gabriel
Comprehensive Annual Financial Report
For the year ended June 30, 2019
Table of Contents, Continued
Page
Number FINANCIAL SECTION (CONTINUED):
Required Supplementary Information: 86 Schedule of Proportionate Share of the Net Pension Liability - Miscellaneous 84
Schedule of Contributions - Defined Benefit Pension Plans - Miscellaneous 85
Schedule of Proportionate Share of the Net Pension Liability - Safety 86 Schedule of Contributions - Defined Benefit Pension Plans - Safety 87
Schedule of Changes in the Net OPEB Liability and Related Ratios 88
Schedule of Contributions - OPEB 89
Budgetary Comparison Schedules:
General Fund 91
Retirement Special Revenue Fund 93
Development Impact Fees Special Revenue Fund 94
Measure R Special Revenue Fund 96
Other Grants Special Revenue Fund 97
Sewer Assessment Special Revenue Fund 98
Note to Required Supplementary Information 99
Supplementary Information: 101
Other Governmental Funds:
Description of Other Governmental Funds 103
Combining Balance Sheet 106
Combining Statement of Revenues, Expenditures and
Changes in Fund Balances 110
Schedules of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual:
Proposition A Local Return Special Revenue Fund 114
Citizens Option for Public Safety (COPS) Special Revenue Fund 115 Parks and Recreation Activity Special Revenue Fund 116
Mission Playhouse/Facility Special Revenue Fund 117
Air Quality Management District Special Revenue Fund 118
Narcotic Seizure Special Revenue Fund 119 Proposition C Local Return Special Revenue Fund 120
Street Light Special Revenue Fund 121
Office of Traffic Safety Grant Special Revenue Fund 122 Community Development Block Grant Special Revenue Fund 123
Waste Management Special Revenue Fund 124
State Gas Tax Special Revenue Fund 125 Road Maintenance and Rehabilitation Fund 126
Measure M Special Revenue Fund 127
City of San Gabriel
Comprehensive Annual Financial Report
For the year ended June 30, 2019
Table of Contents, Continued
Page
Number FINANCIAL SECTION (CONTINUED):
Supplementary Information (Continued):
Internal Service Funds: Description of Internal Service Funds 129 Combining Statement of Net Position 130 Combining Statement of Revenues, Expenses and Changes in Net Position 131 Combining Statement of Cash Flows 132 Agency Fund: Description of Agency Fund 133 Statement of Changes in Fiduciary Assets and Liabilities 134
STATISTICAL SECTION: Description of Statistical Section 135 Financial Trends: Net Position by Component 136 Changes in Net Position 138 Fund Balances of Governmental Funds 140 Changes in Fund Balances of Governmental Funds 142 Revenue Capacity: Assessed Value and Estimated Actual Value of Taxable Property 144 Property Tax Rates - Direct and Overlapping Governments 145 Principal Property Taxpayers 146 Property Tax Levies and Collections 147 Debt Capacity: Direct and Overlapping Debt 148 Legal Debt Margin Information 150 Ratios of Outstanding Debt by Type 152 Demographic and Economic Information: Demographic Statistics 153 Principal Employers 154 Top 25 Sales Tax Producers 155 Operating Information: Full-Time Equivalent City Government Employees by Function/Program 156 Operating Indicators by Function/Program 157 Capital Asset Statistics by Function 158
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December 20, 2019
December 20, 2019 Honorable Mayor and City Council City of San Gabriel San Gabriel, California Introduction
Presented herein is the Comprehensive Annual Financial Report (CAFR) of the City of San Gabriel for the fiscal year ended June 30, 2019. The report is intended to update readers on the status of the City’s financial position and results of operations for the past year. This report consists of management’s representations concerning the finances of the City of San Gabriel. Consequently, management assumes full responsibility for the completeness and reliability of all of the information presented in this report. To provide a reasonable basis for making these representations, management of the City of San Gabriel has established a comprehensive internal control framework that is designed to protect the government’s assets from loss, theft, or misuse and to compile sufficient reliable information for the preparation of the City of San Gabriel’s financial statements in conformity with generally accepted accounting principles (GAAP). Because the cost of internal controls should not outweigh their benefits, the City of San Gabriel’s comprehensive framework of internal controls has been designed to provide reasonable rather than absolute assurance that the financial statements will be free from material misstatement. As management, we assert that, to the best of our knowledge and belief, this financial report is complete and reliable in all material respects. Audit
The City of San Gabriel’s financial statements have been audited by White, Nelson, Diehl, Evans LLP, a firm of licensed certified public accountants. The goal of the independent audit was to provide reasonable assurance that the financial statements of the City of San Gabriel for the fiscal year ended June 30, 2019, are free of material misstatement. The independent audit involved examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements; assessing the accounting principles used and significant estimates made by management; and evaluating the overall financial statement presentation. The independent auditor concluded, based upon the audit, that there was a reasonable basis for rendering an unmodified opinion that the City of San Gabriel’s financial statements for the fiscal year ended June 30, 2019, are fairly presented in conformity with GAAP. The independent auditor’s report is presented as the first component of the financial section of this report. GAAP require that management provide a narrative introduction, overview, and analysis to accompany the basic financial statements in the form of Management’s Discussion and Analysis (MD&A). This letter of transmittal is designed to complement the MD&A and should be read in
Phone: 626.308.2800
Fax: 626.458.2830
City Hall: 425 South Mission Drive, San Gabriel, California
Mail: P.O. Box 130, San Gabriel, California 91778-0130
Web: SanGabrielCity.com
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conjunction with it. The City of San Gabriel’s MD&A can be found immediately following the report of the independent auditors. City of San Gabriel Profile
The City of San Gabriel is a historically rich residential community borne from the fourth California Mission, which was established in 1771. Due to this fact it has earned the moniker—“The Birthplace of the Los Angeles
Region”. San Gabriel is located approximately 10 miles northeast of the City of Los Angeles and was incorporated in 1913 as a general law city which operates under the Council-Manager form of government. Policy-making and legislative authority are vested in a governing council consisting of five members of the City Council elected on a non-partisan basis at large for a four-year term. Council members serve four-year, staggered terms, with an election every two years. One member is appointed by the City Council to serve as Mayor for a one-year term; one is appointed as Mayor Pro Tem. The Council is responsible for, among other things, establishing policy, passing ordinances and resolutions, adopting the annual budget, appointing members to various City Commissions and Boards and hiring the City Manager and City Attorney. The City Manager is responsible for carrying out the policies and ordinances of the City Council, for overseeing the day-to-day operations of the government, and for appointing the heads of the various departments. The City provides a full range of municipal services including police and fire protection, community development (building, planning, code enforcement, and economic development), public works (street maintenance, engineering, traffic control, storm water, and facilities), maintenance and construction of public improvements, community services (parks and recreation services), and general administrative activities. The annual budget serves as the foundation for the City of San Gabriel’s financial planning and control. All departments of the City of San Gabriel are required to submit requests for appropriation and the City Manager uses these requests as the starting point for developing a proposed budget. The Manager then presents this proposed budget to the Council for review prior to the Council holding public hearings on the proposed budget and to adopt a final budget by no later than June 30th. The appropriated budget is prepared by fund and function (e.g. Police, Fire). Department heads may make transfers of appropriations within a department. The City Manager may make transfers of appropriations between departments within each fund up to $15,000; transfers of appropriations over $15,000 or between funds, however, require the approval of the City Council. Budget-to-actual comparisons are provided throughout the fiscal year, and in this CAFR for each individual governmental fund for which an appropriated annual budget has been adopted. This comparison is presented as Required Supplementary Information for major funds, while a comparison of non-major
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funds with appropriated budgets is presented as Supplementary Information after the Notes to the Financial Statements. Factors Affecting Financial Condition The information presented in the financial statements is perhaps best understood when it is considered from the broader perspective of the specific environment within which the City of San Gabriel operates. Local Economy
San Gabriel is a “bedroom community” with an abundance of superb eating establishments but no major retailers or auto dealerships. Despite this, San Gabriel’s economy continues to improve each year, evidenced by steady increase in year-over-year revenue growth. Development is expected to continue over the next few years with numerous mixed use projects, in addition to the construction of an additional branded hotel scheduled to welcome their first guest in FY 2020-21. The four main revenue sources for general government purposes are property taxes, sales taxes, utility users’ taxes, and transient occupancy taxes. Property taxes have increased as properties have been sold and new developments are added to the tax rolls. Sales taxes have improved in all categories, including distributions from the County pool, while transient occupancy taxes have been bolstered by the addition of the Sheraton Hotel which opened in late 2017-18. Utility users’ taxes have decreased over the past year due to changes in the communications industry. San Gabriel's local economy is performing well. As stated in the Profile of the City of San Gabriel, produced by Southern California Association of Governments (SCAG) in May 2019, the median existing home sales price in 2018 was $745,000 while median household income levels were $55,939 for the same period. The City has 13,543 housing units with a 45.2% homeownership rate. According to the U.S. Census Bureau, San Gabriel has 12.3% persons in poverty. The City’s assessed valuation has increased 6.0% over the prior year which positively impacts both the General Fund and the Retirement Special Revenue Fund. As San Gabriel remains a desirable location, both geographically and due to its many cultural amenities, home values locally are expected to remain strong. From an economic development perspective, the City is seeing interest in numerous projects, particularly multi-unit housing, office projects and national retailers looking to establish a presence in San Gabriel. Long-term Financial Planning
In light of the City’s current financial condition, a number of actions were taken during the fiscal year including amending the 2018-19 budget to reduce expenditures, approving a variety of policies, and receiving and reviewing a multitude of fiscal reports. In February 2019, the City Council reviewed a new Long-term Financial Plan and gave direction to staff to further explore revenue enhancements and alternative service delivery options. On May 7, 2019, the City Council adopted Resolution number 19-16 approving the City’s Fiscal Sustainability Policy. This policy established guidelines for the City’s overall fiscal planning and management and is intended to foster and support continued financial strength and stability of the City. The policy is quite comprehensive and covers areas of Budget, Economic Development, Risk Management, Accounting-Auditing-Financial Reporting, Cash Management and Investments, and Debt Management. The policy also required a separate Fund Balance Policy to ensure fiscal health of the City. Part of the Fund Balance Policy adopted by the City Council also on May 7, 2019, requires the General Fund to have a “Committed
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Fund Balance” of 17% of operating expenditures, less the amount provided by the transfer-in from the Retirement Special Revenue fund, by June 30, 2028. The policy provides a scale for reaching the 17% starting with 3% as of June 2021 and ending with the 17% in 2028. Together, these reports are intended to improve the City’s financial and operational decision making and pave the way to greater fiscal health. These document as well as other documents are readily available on the City’s website. The City Council has also authorized the placement of an initiative on the March 2020 ballot, to increase sales tax in the City. In addition to the fiscal challenge within the General Fund, the City must also address a wide variety of infrastructure, risk management and pension related issues. Towards that end, major road and sewer improvement projects have been identified such as street improvement or intersection improvement projects on Las Tunas, San Gabriel, and Del Mar, as well as, the recently completed San Gabriel Trench Project. The City's sewer system continues to take positive steps forward with the continued collection of a sewer user fee which will ensure the long-term viability of the system. In order to improve the City’s risk profile and contain costs, the City has collaborated with our Insurance Authority Risk Pool to implement a specific series of items under their “Loss Cap Program” Lastly, the City continues to be committed to ensuring mission critical and community based programs are delivered which secures the family oriented high quality of life San Gabriel residents wish to enjoy.
Cash Management
Temporarily idle cash was invested during the year in certificates of deposit, mutual funds, and the State investment pool. The City manages all of its cash and investments on a pooled basis with the exception of Deferred Compensation fund or loan proceeds that are managed by the appointed fiscal agents. Interest earnings are allocated to the various funds based on each fund’s share of monthly cash balances. The average value of the City’s monthly investment portfolio was $16.3 million and the average yield on investments managed by the City was 1.08%. Risk Management
The City of San Gabriel is a member of the California Joint Powers Insurance Authority (Authority). The Authority was established in 1978 under a joint powers agreement pursuant to California Government Code §6500 et seq. and is presently comprised of more than 120 California public entities. The purpose of the Authority is to arrange and administer programs for the pooling of self-insured losses, to purchase excess insurance or reinsurance, and to arrange for group purchased insurance for property and other lines of coverage. Each member agency has an elected official as its representative on the Board of Directors. The Board operates through a nine-member Executive Committee. The Authority’s net position for 2019 is $112.4 million, which represents a 7% increase in net position from 2018 ($105.1 million). At June 30, 2019, the claims payable for workers' compensation and general liability, based on information available to the City, were $1,149,867 and $338,205 respectively. Listed below are the Authority’s coverage limits and pooling/cost sharing methodology. Self-Insurance Programs of the Authority
Each member pays an annual contribution at the beginning of each coverage period, with retrospective adjustments conducted annually thereafter for coverage years 2012-13 and prior. Coverage years 2013-14 and forward are not subject to routine annual retrospective adjustments.
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The total funding requirement for the self-insurance programs are determined by actuarial analyses. Costs are allocated to individual agencies based on payroll and claims history relative to other members in the risk-sharing pool. Liability Claims are pooled separately between police and general government exposures. Pooling and cost allocation is determined by: (1) the payroll of each member relative to the payroll of other members. A variable credibility factor is determined for each member, which establishes the weight applied to payroll and the weight applied to losses within the formula; (2) the first layer of losses includes incurred costs up to $30,000 for each occurrence and is evaluated as a percentage of the pool’s total incurred costs within the first layer. (3) The second layer of losses includes incurred costs from $30,000 to $750,000 for each occurrence and is evaluated as a percentage of the pool’s total incurred costs within the second layer. (4) Incurred costs from $750,000 to $50 million, are distributed based on the outcome of cost allocation within the first and second loss layers. The overall coverage limit for each member, including all layers of coverage, is $50 million per occurrence. Subsidence losses have a sub-limit of $40 million per occurrence. The coverage structure includes retained risk that is pooled among members, reinsurance, and excess insurance. More detailed information about the various layers of coverage is available on the following website: https://cjpia.org/protection/coverage-programs.
Workers’ Compensation Claims are pooled separately between public safety (police and fire) and general government exposures. Pooling and cost allocation is determined by: (1) the payroll of each member relative to the payroll of other members. A variable credibility factor is determined for each member, which establishes the weight applied to payroll and the weight applied to losses within the formula. (2) The first layer of losses includes incurred costs up to $50,000 for each occurrence and is evaluated as a percentage of the pool’s total incurred costs within the first layer. (3) The second layer of losses includes incurred costs from $50,000 to $100,000 for each occurrence and is evaluated as a percentage of the pool’s total incurred costs within the second layer. (4) Incurred costs from $100,000 to statutory limits are distributed based on the outcome of cost allocation within the first and second loss layers.
For 2018-19, the Authority’s pooled retention is $2 million per occurrence, with reinsurance to statutory limits under California Workers’ Compensation Law. Employer’s Liability losses are pooled among members to $2 million. Coverage from $2 million to $5 million is purchased as part of a reinsurance policy, and Employer’s Liability losses from $5 million to $10 million are pooled among members. Purchased Insurance
Pollution Legal Liability Insurance The City of San Gabriel participates in the pollution legal liability insurance program which is available through the Authority. The policy covers sudden and gradual pollution of scheduled property, streets, and storm drains owned by the City of San Gabriel. Coverage is on a claims-made basis. There is a $50,000 deductible. The Authority has an aggregate limit of $50 million
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for the 3-year period from July 1, 2017 through July 1, 2020. Each member of the Authority has a $10 million sub-limit during the 3-year policy term.
Property Insurance The City of San Gabriel participates in the all-risk property protection program of the Authority. This insurance protection is underwritten by several insurance companies. City of San Gabriel property is currently insured according to a schedule of covered property submitted by the City of San Gabriel to the Authority. City of San Gabriel property currently has all-risk property insurance protection in the amount of $35,189,205. There is a $10,000 deductible per occurrence except for non-emergency vehicle insurance which has a $2,500 deductible. Adequacy of Protection
During the past three fiscal years, none of the above programs of protection experienced settlements or judgments that exceeded pooled or insured coverage. There were also no significant reductions in pooled or insured liability coverage in 2018-19. Pension and Other Post-Employment Benefits The City of San Gabriel provides pension benefits to safety and non-safety employees through the California Public Employees Retirement System (CalPERS). CalPERS provides retirement, disability benefits, annual cost-of-living adjustments, and death benefits to plan members and beneficiaries. The City was successful in negotiating two tier rates for new employees in all bargaining units beginning in 2011-12 (November 3, 2012). With the State’s pension Public Employees’ Pension Reform Act (PEPRA) implemented January 1, 2013, the City now has three tiers. As of June 30, 2018, the City has 94 active Tier 1 employees, 25 active Tier 2 employees, and 59 active Tier 3 (PEPRA) employees. The City paid employee contributions as negotiated benefit for many years, however, on June 13, 2013, all employees began paying the full employee share of CalPERS contributions. PERS acts as a common investment and administrative agent for participating public entities within the State of California. The City of San Gabriel also provides post-retirement healthcare benefits for certain retirees and their dependents through CalPERS. As of the end of the current fiscal year, there were 127 retired employees receiving these benefits. Beginning with FY 2017-18 the City implemented GASB Statement 75, which significantly changed the financial accounting and reporting for postemployment benefits other than pensions and significantly increased related liabilities which, in turn, decreased the City’s Total Net Position. Beginning in 2008-09, the City established a trust with CalPERS for OPEB and has made ten payments according to the other post-employment benefits prefunding actuarial schedule. Due to increasing pension rates, required annual unfunded accrued liability payments, and retiree health pay-as-you-go payments, the City did not contribute to the OPEB trust account in FY 2018-19. The balance in the PERS trust at year-end was $5,950,785. After the City made all required annual contributions to the pension plans and paid the current costs of retiree health for FY 2018-19, $1,636,461 remains available in the City’s Retirement Special Revenue Fund.
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Awards and Acknowledgements The Government Finance Officers Association (GFOA) awarded a Certificate of Achievement for Excellence in Financial Reporting to the City of San Gabriel for its Comprehensive Annual Financial Report (CAFR) for the fiscal year ended June 30, 2018. This was the twenty-ninth consecutive year that the City has received this prestigious award. In order to be awarded a Certificate of Achievement, the City published an easily readable and efficiently organized CAFR. This report satisfied both GAAP and applicable legal requirements. A Certificate of Achievement is valid for a period of one year only. We believe that our current CAFR continues to meet the Certificate of Achievement Program’s requirements and we are submitting it to the GFOA to determine its eligibility for another certificate. The preparation of the Comprehensive Annual Financial Report in accordance with GASB 34 financial reporting model was made possible by the dedicated work of the Finance Department Staff. Each member of the staff has our sincere appreciation for their contributions made in the preparation of the report. We would also like to thank the members of the City Council for their interest and support in planning and conducting the financial operations of the City, and to the White, Nelson, Diehl, Evans accounting firm for their professional assistance and expertise. Respectfully submitted, Mark Lazzaretto Paula Chamberlain City Manager Interim Finance Director
SAN GABRIEL CITY OFFICIALS At June 30, 2019
City Council
JASON PU DENISE MENCHACA Mayor Vice Mayor JULI COSTANZO JOHN R. HARRINGTON CHIN HO LIAO Councilmember Councilmember Councilmember
Other Elected Officials Julie Nguyen .................................................................................................... City Clerk Kevin Sawkins .......................................................................................... City Treasurer
Executive Team Mark Lazzaretto ....................................................................................... City Manager
Arminé Chaparyan .................. Asst City Manager/Community Development Director Sharon Clark ...........................................................................................Chief City Clerk Keith Lemieux ........................................................................................... City Attorney Rebecca Perez ................................................................. Community Services Director Paula Chamberlain .............................................................. Finance Director (Interim) Steven Wallace ................................................................................. Fire Chief (Acting) Edward Macias ................................................ Human Resources/Risk Mgmt Director Rebecca Perez ...................................................... Mission Playhouse Director (Acting) Eugene Harris .............................................................................................. Police Chief Greg de Vinck ...................................................... Public Works Director/City Engineer
Residents
City of San Gabriel Organizational Chart
City Clerk
Sharon Clark
Human Resources
Edward Macias
Community Development
Arminé Chaparyan
Fire
Steven Wallace (Acting)
Mission Playhouse
Rebecca Perez
(Acting)
Community Services
Rebecca Perez
Police
Eugene Harris
Public Works
Greg de Vinck
Finance
Paula Chamberlain (Interim)
City Council
Jason Pu ~ Mayor Denise Menchaca ~ Vice Mayor Juli Costanzo ~ Councilmember
John R. Harrington ~ Councilmember Chin Ho Liao ~ Councilmember
City Manager
Mark Lazzaretto
Administration
City Clerk
Julie Nguyen
City Treasurer
Kevin B. Sawkins
Commissions
Civil Service Community Services
Design Review Historic Preservation
Planning
City Attorney
Keith Lemieux
-Elections -Minutes -Records
-Benefits
-Recruitment
-Labor and Employee Relations
-Risk Management
-Training
-Compensation
-Building and Safety
-Economic Development
-Neighborhood Improvement
-Planning
-Successor Agency
-CDBG Program-Green Programs
-Fire Suppression -Emergency Operations -Disaster Preparedness -Fire Prevention
-Portfolio and Asset Management
-Accounting and Financial Reporting
-General Services
-Information Technology
-Purchasing
-Internal Control
-Patrol -Investigations -Administration Services -Traffic
-Engineering
-Street Services
-Maintenance Services
-Vehicle Services
-Urban Forestry
-Sewers and Storm Drains
-Facilities Maintenance
-Park Maintenance
-Recreation Programs
-Aquatics
-Youth and After School Programs
-Senior Services and Programs
-Event Production -Facility Maintenance -Facility and Event Marketing
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INDEPENDENT AUDITORS’ REPORT
Honorable Mayor and City Council of the City of San Gabriel San Gabriel, California Report on the Financial Statements
We have audited the accompanying financial statements of the governmental activities, each major fund, and the aggregate remaining fund information of the City of San Gabriel, California (the City), as of and for the year ended June 30, 2019, and the related notes to the basic financial statements, which collectively comprise the City’s basic financial statements as listed in the table of contents. Management’s Responsibility for the Financial Statements
Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error. Auditors’ Responsibility
Our responsibility is to express opinions on these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditors’ judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditors consider internal control relevant to the City’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the City’s internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions.
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Opinions
In our opinion, the financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities, each major fund, and the aggregate remaining fund information of the City of San Gabriel, as of June 30, 2019, and the respective changes
in financial position and, where applicable, cash flows thereof for the year then ended in accordance with accounting principles generally accepted in the United States of America.
Emphasis of Matters
As discussed in Note 13 to the financial statements, the City has suffered significant reductions in fund
balance in the General Fund. This condition raises concerns about the financial condition of the City’s General Fund and impact on future operations of the City. Management’s plan regarding this matter is also described in Note 13. The basic financial statements do not include any adjustments that might
result from the outcome of this uncertainty. Our opinions are not modified with respect to this matter.
Other Matters
Report on Required Supplementary Information
Accounting principles generally accepted in the United States of America require that the
management’s discussion and analysis, the schedules of proportionate share of the net pension
liability - miscellaneous and safety, the schedules of contributions - defined benefit pension plans -
miscellaneous and safety, the schedule of changes in the net OPEB liability and related ratios, the
schedule of contributions - OPEB, and the budgetary comparison schedules, identified as Required
Supplementary Information (RSI) in the accompanying table of contents, be presented to supplement
the basic financial statements. Such information, although not a part of the basic financial statements,
is required by the Governmental Accounting Standards Board, who considers it to be an essential part
of financial reporting for placing the basic financial statements in an appropriate operational, economic
or historical context. We have applied certain limited procedures to the RSI in accordance with
auditing standards generally accepted in the United States of America, which consisted of inquiries of
management about the methods of preparing the information and comparing the information for
consistency with management’s responses to our inquiries, the basic financial statements, and other
knowledge we obtained during the audit of the basic financial statements. We do not express an
opinion or provide any assurance on the RSI because the limited procedures do not provide us with
sufficient evidence to express an opinion or provide any assurance.
Other Information
Our audit was conducted for the purpose of forming an opinion on the financial statements that
collectively comprise the City’s basic financial statements. The introductory section, combining
statements and individual fund schedules and statistical section, as listed in the table of contents, are
presented for purposes of additional analysis and are not a required part of the basic financial statements.
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Other Matters (Continued)
Other Information (Continued)
The combining statements and individual fund schedules, as listed in the table of contents, are the
responsibility of management and were derived from and relate directly to the underlying accounting and other records used to prepare the basic financial statements. Such information has been subjected to the auditing procedures applied in the audit of the basic financial statements and certain additional
procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the basic financial statements or to the basic financial statements themselves, and other additional procedures in accordance with auditing standards generally
accepted in the United States of America. In our opinion, the combining statements and individual fund schedules are fairly stated in all material respects in relation to the basic financial statements taken as a whole.
The introductory and statistical sections have not been subjected to the auditing procedures applied in the audit of the basic financial statements and, accordingly, we express no opinion or provide any
assurance on them.
Other Reporting Required by Government Auditing Standards
In accordance with Government Auditing Standards, we have also issued our report dated
December 20, 2019, on our consideration of the City’s internal control over financial reporting and on
our tests of its compliance with certain provisions of laws, regulations, contracts and grant agreements
and other matters. The purpose of that report is to describe the scope of our testing of internal control
over financial reporting and compliance and the results of that testing, and not to provide an opinion on
the internal control over financial reporting or on compliance. That report is an integral part of an
audit performed in accordance with Government Auditing Standards in considering the City’s internal
control over financial reporting and compliance.
Irvine, California
December 20, 2019
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CITY OF SAN GABRIEL
Management’s Discussion and Analysis
Year Ended June 30, 2019
The following Management’s Discussion and Analysis (MD&A) of the City of San Gabriel’s financial performance provides an introduction and overview to the financial activities of the City for the fiscal year ended June 30, 2019. This narrative discussion and analysis focuses on the fiscal year 2018-19 activities, resulting changes and current known facts; therefore, the information presented here should be considered in conjunction with additional information furnished in the transmittal letter and the accompanying basic financial statements. FINANCIAL HIGHLIGHTS
The assets and deferred outflows of resources of the City exceeded its liabilities and deferred inflows of resources at the close of the fiscal year by $60.0 million. The Net Position is composed of $125.0 million Investment in Capital Assets, $28.4 million Restricted and ($93.4) Unrestricted. The negative unrestricted Net Position is mainly due to GASB 68 and GASB 75 which required the City to report the total unfunded pension and Other Post Employment Benefit liabilities in the amount of $111.7 million combined.
As of the close of the current fiscal year, the City’s governmental funds reported combined ending fund balances of $19.86 million.
At the end of the current fiscal year, the fund balance for the General Fund reflected a deficit of $1.8 million, which is a significant improvement over the $2.6 million deficit reported at June 30, 2018.
The City has taken significant steps in its effort to improve its financial condition including the review and acceptance of a long-term financial plan, the adoption of a fiscal sustainability policy, improvements to the transparency of financial reporting, and the adoption of an updated fund balance policy. Future steps include an analysis of alternative methods of service delivery for fire services and the placement of an initiative for voter consideration on the March 2020 ballot to increase the sales tax rate in the City.
On October 16, 2018, the City received its Final Letter of Determination from the California Department of Finance acknowledging the end of the Redevelopment Agency existence.
USING THIS ANNUAL REPORT
This annual report consists of a series of financial statements. The Statement of Net Position and the Statement of Activities provide information about the activities of the City as a whole and present a longer-term view of the City’s finances. Fund financial statements tell how these services were financed in the short term as well as what remains for future spending. Fund financial statements also report the City’s operations in more detail than the government-wide statements by providing information about the City’s most significant funds. The remaining statements provide financial information about activities for which the City acts solely as a trustee or agent for the benefit of those outside of the government. OVERVIEW OF THE FINANCIAL STATEMENTS
This discussion and analysis portion of the annual financial report is intended to serve as an introduction to, and provide the reader with a fundamental understanding of, the Comprehensive Annual Financial Report (CAFR) for the City of San Gabriel. The CAFR is divided into four main sections. First is the Introductory Section which provides the letter of transmittal, an organizational chart, and a list of City officials. The Introductory Section is followed by the Financial Section, which contains the independent
CITY OF SAN GABRIEL
Management’s Discussion and Analysis, Continued
Year Ended June 30, 2019
5
auditor’s report, the management’s discussion and analysis, and finally the basic financial statements. These statements contain the “core” financial information for the City of San Gabriel. The basic financial statements include the government-wide financial statements, followed by the fund financial statements, and finally, the notes to the financial statements. The Financial Section is followed by the Supplemental Data portion of the report, which provides individual fund and combining information that rolls up into the amounts shown in the basic financial statements. The final portion of the CAFR is the Statistical Section. This section presents selected financial and demographic information, generally presented on a multi-year basis. Government-wide financial statements. The government-wide financial statements are designed to provide the reader with a broad overview of the City of San Gabriel’s finances, in a manner similar to a private sector business. Information contained within the government-wide statements includes the entire City government (except fiduciary funds). These statements use the accrual basis of accounting with the measurement focus on that of economic resources. All assets and deferred outflows of resources and liabilities and deferred inflows of resources, both financial and capital, short-term and long-term, are included. All revenues and expenses during the year, regardless of when cash is received or disbursed, are reported. The government-wide financial statements include the Statement of Net Position and the Statement of Activities. The Statement of Net Position presents information on all of the City of San Gabriel’s assets and deferred outflows of resources and liabilities and deferred inflows of resources, with the difference between the two reported as “net position”. Increases or decreases in net position may serve as a useful indicator as to whether the financial condition of the City of San Gabriel is improving or deteriorating over time. The Statement of Activities presents information showing how the City’s net position changed during the most recent fiscal year. All changes in net position are reported as soon as the underlying event causing the change occurs, regardless of when cash is actually received or disbursed. This means that revenues and expenses in this statement are recorded when earned or a liability is incurred. Thus, items such as the value of earned but unused vacation leave will be recorded as an expense of the current period, even though the actual use of the vacation time may not be until subsequent periods. Typically, government-wide financial statements are distinguished between governmental activities which are principally supported by taxes or intergovernmental revenues and business-type activities which are intended to recover all or a significant portion of their costs through user fees and charges. The governmental activities of the City of San Gabriel include general government, public safety, community development, public works, community services, and interest and fiscal charges. The City of San Gabriel does not have funds that operate as a business-type activity. Fund financial statements. A “fund” is a grouping of related accounts that is used to maintain control over resources that have been segregated for specific activities or objectives. The City of San Gabriel, like other state and local governments, uses fund accounting to ensure and demonstrate compliance with finance related legal requirements. The fund financial statements provide more detailed information about the City’s most significant funds, not the City as a whole. All of the funds of the City of San Gabriel can be divided into three categories: governmental funds, proprietary funds, and fiduciary funds. Governmental funds include activities of the City that are not proprietary or fiduciary. These funds are used to account for, essentially, the same functions reported as “governmental activities” in the
CITY OF SAN GABRIEL
Management’s Discussion and Analysis, Continued
Year Ended June 30, 2019
6
government-wide financial statements. Unlike the government-wide financial statements, however, governmental fund financial statements use the modified accrual basis of accounting and focus on near-term inflows and outflows of spendable resources, as well as the balances of spendable resources available at the end of the fiscal year. Only assets expected to be used and liabilities that come due during the year or soon thereafter are reported on the Balance Sheet. No capital assets are included. Revenues for which cash is received during or soon after the end of the year, and expenditures for goods and services that have actually been received during the year, are included within the Statement of Revenues, Expenditures, and Changes in Fund Balance. Because the focus of governmental funds is narrower than that of the government-wide financial statements, it is useful to compare the information presented for governmental funds in the fund financial statements with similar information presented for “governmental activities” in the government-wide financial statements. By doing so, the reader may better understand the long-term impact of the City’s near-term financing decisions. Both the Governmental Fund Balance Sheet and the Statement of Revenues, Expenditures, and Changes in Fund Balance provide a reconciliation to facilitate this comparison. The City of San Gabriel maintains 24 individual governmental funds. Individual fund information is presented for the “major” funds in the governmental fund balance sheet and in the governmental fund statement of revenues, expenditures, and changes in fund balance. The major funds presented include the General Fund, the Retirement Tax Fund, the Development Impact Fee Fund, the Measure R Fund, the Sewer Assessment Fund, and the Other Grants Fund. Information for the remaining governmental funds is combined into a single “other governmental funds” column on the face of the financial statements. Individual fund data for each of these non-major governmental funds is provided in the form of “combining statements” presented in the Supplemental Data portion of the report. Proprietary funds are used to report two types of funds: enterprise funds and internal service funds. Enterprise funds report the same functions presented as “business-type” activities in the government-wide financial statements. These include activities that the City operates similar to a private business. The City of San Gabriel has chosen to operate the Mission Playhouse Fund as a special revenue fund rather than an enterprise fund and does not provide any other services that require the use of enterprise funds. Internal service funds are an accounting device used to accumulate and allocate costs internally among the City’s various functions. The City of San Gabriel uses internal service funds to account for its risk management and fleet maintenance activities. Because these two services benefit governmental type functions, the activity has been included within “governmental activities” in the government-wide financial statements. Fiduciary funds are used to account for resources held for the benefit of parties outside of the government. Fiduciary funds are not reflected in the government-wide financial statements because the funds are custodial in nature, and therefore, these resources are not available to fund the City of San Gabriel programs. Notes to the financial statements. The notes to the financial statements provide additional information that is essential to a full understanding of the information contained in the government-wide and fund financial statements.
CITY OF SAN GABRIEL
Management’s Discussion and Analysis, Continued
Year Ended June 30, 2019
7
2019 2018
Current and other assets 24,537,785$ 25,488,405$
Advances to trust fund - 559,694
Capital assets 134,625,637 61,725,622
Total assets 159,163,422$ 87,773,721$
Deferred outflows of resources 32,028,200 20,265,498
Current liabilities 4,464,102$ 4,776,280$
Noncurrent liabilities 123,858,603 104,780,423
Total liabilities 128,322,705$ 109,556,703$
Deferred inflows of resources: 2,846,853 1,286,152
Net Position:
Net investments in capital assets 125,053,120$ 53,824,523$
Restricted for:
Debt service 6,651,667 6,911,667
Special projects 21,728,835 20,330,264
Unrestricted (93,411,558) (83,870,090)
Total net position 60,022,064$ (2,803,636)$
The combining statements referred to earlier in connection with non-major governmental funds and internal service funds are presented immediately following the notes to the financial statements. GOVERNMENT-WIDE FINANCIAL ANALYSIS
Net position. As mentioned earlier, net position may serve over time as a useful indicator of a government’s financial position. Total net position has increased when compared to the prior year mainly due to the completion of the ACE trench project. Below is a summary schedule showing the components that make up the City’s net position at June 30, 2019 and 2018. Statement of Net Position
For the City of San Gabriel, total assets and deferred outflow of resources exceeded total liabilities and deferred inflows of resources by $60 million at June 30, 2019. As the table above shows, the amount of $125.0 million is reported as net investment in capital assets. This amount represents those capital assets (land, buildings, improvements, equipment, and work in progress) which have been constructed or donated over time. The City of San Gabriel uses these capital assets to provide services to the residents of the City, and the assets are therefore not available for meeting current financial obligations. An additional portion of net position, in the amount of $28.4 million, reported as restricted net position represents resources that are subject to external restrictions on how the funds may be used. Restrictions include assets that are legally set aside for future capital development, capital projects, and other legally restricted amounts including debt service. The remaining balance is the unrestricted net position of ($93.4 million). It is not uncommon in government entities to see an unrestricted net position deficit.
CITY OF SAN GABRIEL
Management’s Discussion and Analysis, Continued
Year Ended June 30, 2019
8
2019 2018
Revenues
Program revenues:
Charges for services 8,469,388$ 7,503,290$
Operating contribution and grants 5,230,720 7,224,937
Capital contributions and grants 72,028,183 1,560,996
General revenues:
Taxes
Property taxes 18,410,087 17,137,916
Sales taxes 4,574,744 4,228,585
Utility users' taxes 4,220,173 4,477,367
Transient occupancy taxes 3,042,962 2,077,757
Business licenses taxes 695,898 716,215
Franchise taxes 631,983 538,126
Property transfer taxes 145,009 173,930
Other Taxes 19,642 -
Interest and use of property 104,136 104,362
Other 273,116 518,818 Total revenues 117,846,041 46,262,299
Expenses:
General government 9,653,309 7,544,585
Public safety 28,821,771 26,434,439
Community development 4,205,443 3,233,842
Public works 8,210,981 7,660,741
Community services 3,723,848 4,667,127
Interest on long-tem debt 404,989 235,979 Total expenses 55,020,341 49,776,713
Increase (decrease) in net position 62,825,700$ (3,514,414)$
Net position - beginning of year, as restated (2,803,636)$ 710,778
Net position - end of year 60,022,064$ (2,803,636)$
There are many reasons why this could occur but the City of San Gabriel has a deficit due to the large unfunded retirement liabilities including the City’s net pension liability in the amount of $67.3 million, and the net OPEB liability in the amount of $44.4 million. Changes in net position. The statement of net position provides a snapshot at a given point in time of the assets and liabilities of the City. The other citywide statement provided is the Statement of Activities. This statement provides the reader with information regarding the revenues, expenses, and changes in net position over the fiscal year. Generally, all changes to the City’s net position from one fiscal year to the next flow through the statement of activities. The City’s programs for governmental activities include legislative and support services, Police, Fire (collectively Public Safety), Community Development, Community Services, and Public Works. The following is a summary schedule showing the components that make up the City’s changes in net position for the years ended June 30, 2019 and 2018. Statement of Activities
CITY OF SAN GABRIEL
Management’s Discussion and Analysis, Continued
Year Ended June 30, 2019
9
Governmental Activities - The City’s program revenues totaled $85.7 million including a significant amount related to a contribution of an infrastructure asset. The cost of all governmental activities for the current year was $55.0 million. As indicated above the amount taxpayers ultimately financed for the $55.0 million in activities was reduced by Charges for Services revenue ($8.5 million), and/or by other governments and organizations that subsidized certain programs with operating contributions and grants ($5.2 million).
FINANCIAL ANALYSIS OF THE CITY’S FUNDS
The City uses governmental fund accounting to ensure compliance with budgetary allocations and to maintain control over resources that are legally, or otherwise, restricted for specific purposes. Following is a discussion of the individual “major” funds as shown on the Balance Sheet for Governmental Funds in the basic financial statements.
General Fund – The General Fund is used to account for the general operations of the City. It is used to account for all financial resources, except those required to be accounted for in another fund. The General Fund is always reported as a “major” fund. The General Fund reported $30.8 million in revenues and $37.3 million in expenditures resulting in expenditures in excess of revenues in the amount of $6.5 million before accounting for net other financing sources of $7.3 million. The result from these transaction was an increase to the General Fund fund balance of $0.8 million for the fiscal year. Total fund balance at June 30, 2019 was deficit in the amount of $1.8 million, composed of $9.2 million in assets against $11.0 million in liabilities. The City’s General Fund Unassigned Fund Balance is approximately ($8.5) million. This is due in part because the City has pledged $6.65 million of its reserves as collateral for a loan to construct the new public works facility. Consequently, $6.65 million is currently restricted for this purpose, however, this restriction will decrease over time as principal payments are made. As to the deficit fund balance, the City Council has undertaken a variety of steps to address the issue as described in Note 13 within the Note section of this report. In summary, the City Council adopted a fiscal sustainability policy that established guidelines for the City’s overall fiscal planning and
CITY OF SAN GABRIEL
Management’s Discussion and Analysis, Continued
Year Ended June 30, 2019
10
management. The Policy encompasses Budget; Economic Development; Risk Management; Accounting, Auditing and Financial Reporting; Cash Management and Investments; and Debt Management and are intended to foster and support the financial strength and stability of the City. The Council also approved an updated Fund Balance Policy setting the minimum fund balance at 17% of annual expenses less the amount provided by the Retirement Tax Fund with a tiered schedule of meeting this minimum and setting forth new procedures for budget preparation and annual reporting to be more transparent in financial matters. Retirement Tax Fund – The Retirement Tax Fund accounts for the revenues received from a special ad valorem tax passed by San Gabriel voters in 1948 to fund the City’s cost of employee CalPERS retirement benefits, and the transfers-out to funds with expenses related to those payments. The City’s special revenue Retirement fund revenues were $7.7 million for 2018-19, an increase of $486,000 over 2017-18 due to an increase in the City’s assessed valuation. Transfers-out of this special revenue fund to the General, Mission Playhouse, and Risk Management Funds increased $565,500 over the prior fiscal year predominately due to increases in the CalPERS normal cost rate, the unfunded accrued liability payment, and retiree health benefit costs. No contributions were made to the City’s OPEB Trust account in 2018-19. Development Impact Fees Fund – This fund is used to account for the collection of fees from developers pursuant to Government Code §66066. The City currently collects five types of impact fees: Park and Open Space Impact, Sanitary Sewer System Facilities Impact, Police Facility Impact, Fire Facility Impact and Traffic Impact. Revenues received in the Development Impact Fee fund fluctuate year to year based on anticipated development as indicated with the payment of building permit fees. Revenue for 2018-19 was $374,700, a decrease of $126,300 over 2017-18. Expenditures for the year were $383,800 including $330,000 in police and fire facility improvements and $28,000 in park improvements. Fund balance for all impact fees is $5.2 million of which $1.2 million has been appropriated to projects within the current Capital Improvement Program. As an additional resource, under requirements of Government Code §66066, the City issues a separate report detailing annual activity of Development Impact Fees. This report may be viewed on the City’s website. Measure R Fund – This fund is used to account for the City’s share of the half-cent sales tax approved by Los Angeles County voters in 2008 for developing and/or improving local public transit, paratransit and related transportation infrastructure. Measure R revenue for 2018-19 was $523,000 with expenditures of $2.7 million and an ending fund balance of $1.4 million. Of the $2.7 million in expenditures, $344,000 was for the current year loan repayment of the IBank loan (see Debt Administration), $857,000 was paid towards the Del Mar Rehabilitation – Wells to Valley project, $1.44 million for the Great Streets and Accelerated Great Streets project, and $61,000 for the Del Mar Rehabilitation – Wells to Mission project. At June 30, 2019, the fund balance of Measure R was $1.4 million, most of which has been appropriated to the current Capital Improvement Program.
Other Grants Fund – The Other Grants fund accounts for the revenues received and expenditures made for federal, state and or county approved programs and projects. The Other Grants fund has historically been a “major” fund based on criterion set forth by GASB 34. For the fiscal year, the Other Grants fund reported $429,600 in revenues and $170,000 in expenditures resulting in revenues over expenditures of $260,000. The entire fund balance of $680,000 is restricted for specific purposes.
CITY OF SAN GABRIEL
Management’s Discussion and Analysis, Continued
Year Ended June 30, 2019
11
Sewer Fund – This fund is used to account for revenues received and expenditures made for sewer improvements and maintenance. Financing is provided by the City’s sewer user fee made pursuant to Resolution 14-14. The Sewer Fund received $2.0 million in revenue and expended $949,207 during FY 2018-19. This is an increase in both revenue of $59,200 and expenditures of $2,400 over the 2017-18 fiscal year. The accumulated fund balance of $5.6 million will be used to finance sewer infrastructure improvements as shown in the capital improvement program budget. Funding for projects approved, but not expended at June 30, 2019, is authorized at $4.2 million with an additional $950,000 approved in the 2019-20 capital improvement program budget. Non-Major Funds – The Non-Major Governmental Funds show a combined fund balance total of $7.2 million, an increase of $310,500 over the prior year. GENERAL FUND BUDGETARY INFORMATION
The budget, as adopted on June 19, 2018, contained $39.3 million in appropriations and transfers out to fund operations and services. This amount increased to $41.5 million when funding approved for projects in 2017-18 but were not expended by June 30, 2018 was carried forward to 2018-19. By the end of the fiscal year, through City Council approved budget amendments, the amount was reduced to $40.8 million. This was a decrease of $704,400 over the original budget with carryovers. The change in appropriations was primarily due to:
A reduction in capital project carryover funding of $1.7 million.
The elimination $701,000 in contributions to the Fleet Services fund for future equipment replacements.
A change in accounting that moved the $1,519,000 appropriation for retiree health costs from the Risk Management Fund to the General Fund with a corresponding increase to the revenue estimate for the transfer in from the Retirement Tax Fund.
The reclassification of the $77,100 property tax administrative fee from revenue estimates to appropriations, thus increasing appropriations and reducing revenue estimates.
Both General Fund revenues and expenditures were under budget at the completion of the fiscal year.
As adopted on June 19, 2018, the City's FY 2018-19 General Fund revenue budget, including transfers-in, reflected $41.1 million in anticipated revenues. With approved budget adjustments, the total was amended to $42.8 million. Actual revenue for FY 2018-19 was $38.7 million, $4.0 million below the final budgeted estimate. Revenue in all categories fell below budget most notably in the taxes ($1.17 million), licenses and permits ($1.0 million), and departmental ($835,000) categories due to the under achieving of anticipated growth in these areas.
2018-19
Adopted
Budget
2018-19
Adopted
Budget with
Carryovers
2018-19 Final
Amended
Budget
2018-19
Actuals
% Actuals to
Amended
Budget
Total revenue / transfers in 41,114,014$ 41,182,209$ 42,778,044$ 38,743,223$ 91%
Total expenditures / transfers out 39,257,116 41,547,603 40,843,184 37,986,504 93%
Net 1,856,898$ (365,394)$ 1,934,860$ 756,719$
General Fund
Revenue and Expense Analysis
CITY OF SAN GABRIEL
Management’s Discussion and Analysis, Continued
Year Ended June 30, 2019
12
As adopted, the City's FY 2018-19 General Fund expenditures budget was initially approved with $39.3 million in appropriations and transfers-out which increased to $41.5 million when carryover appropriations were finalized. With approved budget adjustments, the final total was amended to $40.8 million. Overall, actual expenditures for FY 2018-19 are at $38 million, $2.9 million below the final adopted budget. The main contributor to these savings is $2.0 million in salary and benefit savings due to employee turnover and the cumulative vacancy of full-time positions offset by an increase in overtime to compensate for those vacancies, and overbudgeting for health insurance premiums, $400,000 in operational cost savings, the elimination of $701,000 in contributions to future fleet replacements, and a $119,300 reduction to transfers-out for the contribution to the Mission Playhouse for its operational shortfall. Although below overall appropriations, two departments exceeded appropriations as shown below:
Final Budget Actual Variance Human Resources 784,990 1,002,952 (217,962) Community Services 1,612,074 1,613,753 (1,679)
Expenses within the Human Resources Department exceeded budget due to extraordinary legal expense for ongoing litigation (Flores vs. San Gabriel). DEBT ADMINISTRATION
At the end of the fiscal year, the City had total long-term debt outstanding of $125.7 million. Loans Payable – On December 16, 2014, the City entered into a loan agreement with Citizens Business Bank for a loan of $7.8 million. The loan proceeds were for the construction of the new public works maintenance facility. The loan is collateralized with a ten-year certificate of deposit held with the lender for $6.65 million that is shown as restricted cash and investments in the financial statements. At year-end, the City’s liability for this loan was $6,651,667, and the amount due within one year is $260,000. Additional details regarding this loan may be found in Note 5. Loans Payable – On May 1, 2015, the City entered into an installment sale agreement with the California Infrastructure and Economic Development Bank (IBank) to finance the Accelerated Great Streets Program, which was to upgrade, reconstruct, and rehabilitate approximately 1.6 lane miles of public streets within the City. Interest accrues on the entire principal balance, whether or not disbursed, at in interest rate of 3.5% per annum. Principal and interest payments are due on each August 1 and February 1, commencing on August 1, 2016 and maturing on August 1, 2029. In addition, on August 1 of each year, the City must pay an annual fee of 0.3% on the outstanding principal component of the remaining
2019 2018 See
Loans payable 9,783,925$ 10,274,205$ Note 5
Compensated absences 2,654,434 2,719,281 Note 5
Claims payable 1,488,072 1,820,469 Note 10
Net pension liability 67,285,462 67,662,053 Note 8
Net OPEB liability 44,459,272 24,213,507 Note 9
Total 125,671,165$ 106,689,515$
Governmental Activities
CITY OF SAN GABRIEL
Management’s Discussion and Analysis, Continued
Year Ended June 30, 2019
13
principal balance. At year-end, the City’s liability for this loan was $3,132,258, and the amount due within one year is $238,340. Additional details regarding this loan may be found in Note 5. City has compensated absences for accumulated employee vacation and sick-time. At year-end, the City’s liability for Compensated Absences was $2,654,434, a reduction of $64,847 over the prior year. Of the $2,654,434, $782,626 is anticipated to be due within one year. PENSION AND OTHER POST EMPLOYMENT BENEFITS (OPEB) PAYMENTS
Details on pension and OPEB liabilities are found in Note 8 and Note 9, however much of this information is based on the valuation period rather than the current year costs of those liabilities e.g. amounts actually paid during the year. To provide the reader with data beyond the required valuation period data the following table has been prepared. CASH MANAGEMENT
To obtain flexibility in cash management, the City employs a pooled cash system (Reference Note 2 in the Notes to the Basic Financial Statements). Under the pooled cash concept, the City invests the cash of all funds with maturities planned to coincide with cash needs. Idle cash is invested in certain eligible securities as constrained by law and further limited by the City’s Investment Policy. The goals of the City’s Investment Policy are safety, liquidity and yield. CAPITAL ASSETS
The capital assets of the City are those assets, which are used in the performance of the City’s functions including infrastructure assets. At June 30, 2019, net capital assets of the governmental activities totaled $134.6 million and is detailed in the following table. The largest increase in Capital Assets was in the Infrastructure class with the acceptance of the $70.32 million trench project facilitated by the Alameda Corridor East (ACE) and transferred to the City in FY 2018-19. This project constructed a 2.2-mile trench to allow the rail line to pass below, separated from surface auto traffic, thereby eliminating conflicts and safety issues caused by growth and development in the San Gabriel Valley. Additional information on the City of San Gabriel’s capital assets may be found in Note 4 of the Notes to the Basic Financial Statements.
Governmental
Activities Fiduciary Funds Total
Cash and investments 14,205,237$ 1,847,168$ 16,052,405$
Restricted cash and investments 6,651,667 - 6,651,667
Total 20,856,904$ 1,847,168$ 22,704,072$
Retirement 2018-19 2017-18 2018-19 2017-18 2018-19 2017-18
Public Safety 4,833,269$ 4,462,509$ 22.346% 21.418% 17.334% 16.498%
Miscellaneous 1,991,180 1,810,956 13.084% 12.470% 8.346% 7.850%
Replacement Benefit 60,036 60,153
OPEBRetiree Health 1,233,512 1,111,215 Trust fund contributions - 112,899 2018-19 2017-18 2018-19 2017-18 Totals 8,117,997$ 7,557,732$ 127 115 $ 1,788 $ 1,766
Number of Retirees Max Rate per Retiree
Amounts Paid Tier 1 PERS Normal Rate Tier 2 PERS Normal Rate
CITY OF SAN GABRIEL
Management’s Discussion and Analysis, Continued
Year Ended June 30, 2019
14
NEXT YEAR’S BUDGET
The fiscal year 2019-20 budget is basically a “hold the line” budget including carrying forward cost saving measures from 2018-19 such as the elimination of contributions to future fleet purchases. Department Directors assumed a greater role in revenue estimate development which were conservatively, but accurately, proposed for adoption. Consultant services were utilized to estimate the City’s largest revenue sources such as property tax and sales tax while estimates provided by outside agencies such as LA METRO and AQMD were used for other funds when available. Appropriations were refined to reflect current employee salary and benefits and line-items were scrutinized to be more in line with actual needs and historical data. While it is the goal of the City Council to adopt a budget that is balance with on-going revenues meeting operating expenses, the 2019-20 adopted budget includes the sale of available restricted Prop A funds in exchange for unrestricted General Fund resources as a one-time revenue. Overall, the City is “cautiously optimistic” about future budgets but has taken additional steps to ensure its future fiscal health. Looking towards the 2020-21 budget, the City Council has authorized the placement of a ballot measure to increase the sales tax rate within the City which, if approved, would increase General Fund on-going revenue by approximately $3.4 million. In addition, another hotel is due to open during FY 2020-21 which would also significantly increase on-going General Fund revenue. Lastly, the City Council has received and accepted a long-term financial plan, which will be updated in 2021, the Mission District Economic Analysis and Market Study, and an analysis of current operations of the Mission Playhouse is underway, all of which will aid in the fiscal rebound of the City. CONTACTING THE CITY’S FINANCIAL MANAGEMENT
This financial report is designed to provide San Gabriel residents, taxpayers, customers, investors and creditors with a general overview of the City’s finances and to show the City’s accountability for the money it receives. Questions about this report or any additional financial information, should be directed to the City of San Gabriel Finance Department at 425 S. Mission Drive, San Gabriel, California, 91776.
2019 2018
Land 5,693,699$ 5,693,699$
Construction in progress 4,238,243 4,371,708
Buildings and improvements 28,438,456 28,134,873
Machinery and equipment 13,598,976 13,665,494
Infrastructure 162,168,631 85,949,100
Totals 214,138,005$ 137,814,874$
Accumulated appreciation (79,512,368) (76,089,252)
134,625,637$ 61,725,622$
Governmental Activities
15
BASIC FINANCIAL STATEMENTS
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GOVERNMENT-WIDE
FINANCIAL STATEMENTS
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City of San Gabriel
Statement of Net Position
June 30, 2019
Primary
Government
Governmental
Activities
ASSETS:
Current assets:
Cash and investments 14,205,237$
Restricted cash and investments 6,651,667
Accounts receivable 1,742,576
Interest receivable 69,559
Due from other governments 1,868,746
Total current assets 24,537,785
Noncurrent assets:
Capital assets:
Nondepreciable assets 9,931,942
Depreciable assets, net 124,693,695
Total noncurrent assets 134,625,637
Total assets 159,163,422
DEFERRED OUTFLOWS OF RESOURCES:
Deferred amounts on OPEB plan 15,699,398
Deferred amounts on pension plans 16,328,802
Total deferred outflows of resources 32,028,200
LIABILITIES:
Current liabilities:
Accounts payable 2,103,232
Accrued liabilities 490,206
Due to other governments 33,992
Deposits payable 24,110
Long-term liabilities, due within one year 1,812,562
Total current liabilities 4,464,102
Noncurrent liabilities:
Long-term liabilities, due in more than one year 12,113,869
Net OPEB liability, due in more than one year 44,459,272
Net pension liability, due in more than one year 67,285,462
Total noncurrent liabilities 123,858,603
Total liabilities 128,322,705
DEFERRED INFLOWS OF RESOURCES:
Deferred amounts on OPEB plan 99,213
Deferred amounts on pension plans 2,747,640
Total deferred inflows of resources 2,846,853
NET POSITION (DEFICIT):
Net investment in capital assets 125,053,120
Restricted:
Debt service 6,651,667
Community services 868,930
Public safety 1,040,405
Retirement benefits 1,636,461
Sewer service 7,511,619
Street improvements 8,471,348
Waste management programs 1,519,562
Neighborhood improvement and rehabilitation 680,510
Unrestricted (93,411,558)
Total net position (deficit) 60,022,064$
See accompanying notes to basic financial statements.
19
City of San Gabriel
Statement of Activities
For the year ended June 30, 2019
Net (Expense)
Revenue and
Changes in
Charges Operating Capital Net Position
for Grants and Grants and Governmental
Expenses Services Contributions Contributions Activities
Primary government:
Governmental activities:
General government 9,653,309$ 218,255$ 20,924$ -$ (9,414,130)$
Public safety 28,821,771 2,185,508 648,504 68,776 (25,918,983)
Community development 4,205,443 3,128,928 2,717,271 92,224 1,732,980
Community services 3,723,848 932,894 14,801 148,856 (2,627,297)
Public works 8,210,981 2,003,803 1,829,220 71,718,327 67,340,369
Interest 404,989 - - - (404,989)
Total governmental activities 55,020,341$ 8,469,388$ 5,230,720$ 72,028,183$ 30,707,950
General revenues:
Taxes:
Property taxes 18,410,087
Sales taxes 4,574,744
Utility users tax 4,220,173
Franchise taxes 631,983
Transient occupancy taxes 3,042,962
Business license taxes 695,898
Property transfer tax 145,009
Other tax 19,642
Investment income 104,136
Other 273,116
Total general revenues 32,117,750
Change in net position 62,825,700
Net Position - Beginning of Year (2,803,636)
Net Position - End of Year 60,022,064$
Program Revenues
Functions/Programs
See accompanying notes to basic financial statements.
20
21
FUND FINANCIAL STATEMENTS
Governmental Fund Financial Statements
Proprietary Fund Financial Statements
Fiduciary Fund Financial Statements
22
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23
GOVERNMENTAL FUND
FINANCIAL STATEMENTS
City of San Gabriel
Balance Sheet
Governmental Funds
June 30, 2019
Development
General Retirement Impact Fees
ASSETS
Cash and investments -$ 1,493,133$ 1,209,181$
Restricted cash and investments 6,651,667 - -
Accounts receivable 1,456,358 - -
Interest receivable - 4,859 16,925
Due from other funds - - 4,000,000
Due from other governments 1,061,298 138,469 -
Total assets 9,169,323$ 1,636,461$ 5,226,106$
LIABILITIES, DEFERRED INFLOWS OF
RESOURCES AND FUND BALANCES
Liabilities:
Accounts payable 998,366$ -$ 17,876$
Accrued liabilities 448,445 - -
Due to other funds 9,523,370 - -
Due to other governments 33,992 - -
Deposits payable - - -
Total liabilities 11,004,173 - 17,876
Fund Balances (Deficit):
Restricted 6,651,667 1,636,461 5,208,230
Unassigned (8,486,517) - -
Total fund balances (deficit) (1,834,850) 1,636,461 5,208,230
Total liabilities, deferred inflows
of resources and fund balances 9,169,323$ 1,636,461$ 5,226,106$
Special Revenue Funds
See accompanying notes to basic financial statements.
24
Other Total
Other Sewer Governmental Governmental
Measure R Grants Assessment Funds Funds
1,342,969$ 684,038$ 558,526$ 6,847,749$ 12,135,596$
- - - - 6,651,667
211,408 - 4,311 70,499 1,742,576
4,235 - 18,087 19,072 63,178
- - 5,000,000 781,568 9,781,568
- 59,166 39,519 570,294 1,868,746
1,558,612$ 743,204$ 5,620,443$ 8,289,182$ 32,243,331$
156,300$ 62,694$ 55,605$ 770,922$ 2,061,763$
- - 7,544 28,823 484,812
- - - 258,198 9,781,568
- - - - 33,992
- - - 24,110 24,110
156,300 62,694 63,149 1,082,053 12,386,245
1,402,312 680,510 5,557,294 7,455,436 28,591,910
- - - (248,307) (8,734,824)
1,402,312 680,510 5,557,294 7,207,129 19,857,086
1,558,612$ 743,204$ 5,620,443$ 8,289,182$ 32,243,331$
Special Revenue Funds (Continued)
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City of San Gabriel
Reconciliation of the Governmental Funds Balance Sheet
to the Government-Wide Statement of Net Position
June 30, 2019
Fund balances - total governmental funds 19,857,086$
Amounts reported for governmental activities in the Statement of Net Position
are different because:
Capital assets used in governmental activities are not current financial resources
and therefore are not reported in the governmental funds balance sheet. This
amount does not include $2,050,950 of internal service fund net capital assets.
Capital assets 210,821,534$
Accumulated depreciation (78,246,847)
132,574,687
Long-term liabilities are not due and payable in the current period and, therefore,
are not reported in the governmental funds. Long-term liabilities consist of
the following:
Compensated absence - governmental activities (2,587,206)$
Compensated absences - internal service funds (67,228)
Claims payable (121,677)
Loan payable (6,651,667)
Installment sale agreement (3,132,258)
(12,560,036)
Pension and OPEB related debt applicable to the City's governmental activities are not due
and payable in the current period and accordingly are not reported as fund liabilities.
Deferred outflows of resources and deferred inflows of resources related to pensions
and OPEB are only reported in the Statement of Net Position as the changes in these
amounts effects only the government-wide statements for governmental activities:
Net Pension liability (67,285,462)$
Deferred outflows of resources - pension 16,328,802
Deferred inflows of resources - pension (2,747,640)
Net Other post-employment benefits (OPEB) liability (44,459,272)
Deferred outflows of resources - OPEB 15,699,398
Deferred inflows of resources - OPEB (99,213)
(82,563,387)
Internal service funds are used by management to charge the costs of activities
such as equipment management to departments within the City. The assets and
liabilities of the internal service funds are included in the Statement of Net Position. 2,713,714
Net position of governmental activities 60,022,064$
See accompanying notes to basic financial statements.
27
City of San Gabriel
Statement of Revenues, Expenditures and Changes in Fund Balances
Governmental Funds
For the year ended June 30, 2019
Development
General Retirement Impact Fees
REVENUES:
Taxes 23,310,253$ 7,714,705$ -$
Intergovernmental 596,840 - -
Charges for services 3,386,112 - 330,947
Fines and forfeitures 910,570 - -
Licenses and permits 2,280,570 - -
Investment income 127,855 14,397 43,732
Other 204,579 - -
Total revenues 30,816,779 7,729,102 374,679
EXPENDITURES:
Current:
General government 6,255,890 - -
Public safety 21,505,976 - -
Community development 2,610,636 - -
Community services 1,613,753 - -
Public works 4,629,319 - -
Capital outlay 358,339 - 383,835
Debt service:
Principal payments 260,000 - -
Interest and fiscal charges 110,187 - -
Total expenditures 37,344,100 - 383,835
EXCESS OF REVENUES OVER
(UNDER) EXPENDITURES (6,527,321) 7,729,102 (9,156)
OTHER FINANCING SOURCES (USES):
Transfers in 7,926,444 - -
Transfers out (642,404) (7,994,015) -
Total other financing sources (uses) 7,284,040 (7,994,015) -
NET CHANGE IN FUND BALANCES 756,719 (264,913) (9,156)
FUND BALANCES (DEFICIT):
Beginning of year (2,591,569) 1,901,374 5,217,386
End of year (1,834,850)$ 1,636,461$ 5,208,230$
Special Revenue Funds
28
Other Total
Other Sewer Governmental Governmental
Measure R Grants Assessment Funds Funds
-$ -$ -$ -$ 31,024,958$
512,463 409,393 - 4,491,968 6,010,664
- - 2,000,803 1,239,968 6,957,830
- - - - 910,570
- - - - 2,280,570
10,473 - 42,536 54,196 293,189
- 20,184 2,755 30,648 258,166
522,936 429,577 2,046,094 5,816,780 47,735,947
- - - - 6,255,890
- - - 180,176 21,686,152
- - - 74,174 2,684,810
- - - 1,569,483 3,183,236
- - 678,960 547,049 5,855,328
2,358,115 170,007 170,247 3,845,394 7,285,937
230,280 - - - 490,280
113,659 - - - 223,846
2,702,054 170,007 849,207 6,216,276 47,665,479
(2,179,118) 259,570 1,196,887 (399,496) 70,468
- - - 709,975 8,636,419
- - - - (8,636,419)
- - - 709,975 -
(2,179,118) 259,570 1,196,887 310,479 70,468
3,581,430 420,940 4,360,407 6,896,650 19,786,618
1,402,312$ 680,510$ 5,557,294$ 7,207,129$ 19,857,086$
Special Revenue Funds (Continued)
See accompanying notes to basic financial statements.
29
City of San Gabriel
Reconciliation of the Governmental Funds Statement of Revenues, Expenditures and Changes
in Fund Balances to the Government-wide Statement of Activities
For the year ended June 30, 2019
Net change in fund balances - total governmental funds 70,468$
Amounts reported for governmental activities in the Statement of Activities
are different because:
Governmental funds report capital outlays as expenditures. However,
in the Statement of Activities, the cost of those assets is allocated over
the estimated useful lives as depreciation expense. This is the amount
by which capital outlays exceed depreciation and retirements in the current
period. This does not include internal service fund activity of $84,708 in
additions, $334,373 in depreciation expense, and $5,793 loss on disposals.
Capital asset purchases 6,283,722$
Depreciation expense (3,441,233)
Disposals (2,016)
Capital contributions 70,315,000
73,155,473
To record as an adjustment to expense the net change in compensated absences
in the statement of activities:
Compensated absences expenses - governmental activities 71,857$
Compensated absences expenses - internal service funds (7,010)
64,847
The issuance of long-term debt provides current financial resources to
governmental funds, while repayment of the principal and issuance cost of
long-term debt consumes the current financial resources of the governmental
funds. Issuance of loan principal is an other financing source and repayment of
loan principal is an expenditure in governmental funds, but the issuance increases
long-term liabilities and the repayment reduces long-term liabilities in the Statement
of Net Position. The amounts are the net effect of these differences in the
treatment of long-term debt:
Repayment of principal 490,280
Pension and OPEB expense reported in the governmental funds includes the annual
required contributions and actuarially determined contributions, respectively. In the
Statement of Activities, pension and OPEB expense includes the change in the net
pension and OPEB liability, and related change in pension and OPEB amounts for
deferred outflows of resources and deferred inflows of resources. (9,667,172)
Internal service funds are used by management to charge the costs of activities
such as equipment management to departments within the City. The net income
is reported with Governmental Activities. The assets and liabilities of the internal
service funds are included in the Statement of Net Position. (888,293)
Certain revenues in the governmental funds are unavailable revenues
because they are not collected within the prescribed time period after year-end.
However, the revenues are included in the government-wide statements. (399,903)
Change in net position of governmental activities 62,825,700$
See accompanying notes to basic financial statements.
30
31
PROPRIETARY FUND
FINANCIAL STATEMENTS
City of San Gabriel
Statement of Net Position
Proprietary Funds
June 30, 2019
Governmental
Activities
Internal
Service
Funds
ASSETS:
Current assets:
Cash and investments 2,069,641$
Interest Receivable 6,381
Total current assets 2,076,022
Noncurrent assets:
Capital assets:
Being depreciated (net of accumulated depreciation) 2,050,950
Total noncurrent assets 2,050,950
Total assets 4,126,972
LIABILITIES:
Current liabilities:
Accounts payable 41,469
Accrued payroll 5,394
Compensated absences, due within one year 67,228
Claims payable, due within one year 409,919
Total current liabilities 524,010
Noncurrent liabilities:
Claims payable, due in more than one year 956,476
Total noncurrent liabilities 956,476
Total liabilities 1,480,486
NET POSITION:
Investment in capital assets 2,050,950
Unrestricted 595,536
Total net position 2,646,486$
See accompanying notes to basic financial statements.
32
City of San Gabriel
Statement of Revenues, Expenses and Changes in Net Position
Proprietary Funds
For the year ended June 30, 2019
Governmental
Activities
Internal
Service
Funds
OPERATING REVENUES:
Charges for services 6,316,224$
Total operating revenues 6,316,224
OPERATING EXPENSES:
Personnel services 319,675
Contractual services 17,254
Vehicle operating 470,973
Depreciation 334,373
Insurance premiums 6,065,617
Claims and judgments 11,698
Total operating expenses 7,219,590
OPERATING LOSS (903,366)
NONOPERATING REVENUES (EXPENSES):
Investment income 13,856
Loss on sale of capital assets (5,793)
Total nonoperating revenues (expenses) 8,063
CHANGE IN NET POSITION (895,303)
NET POSITION:
Beginning of the year 3,541,789
End of the year 2,646,486$
See accompanying notes to basic financial statements.
33
City of San Gabriel
Statement of Cash Flows
Proprietary Funds
For the year ended June 30, 2019
Governmental
Activities
Internal
Service
Funds
CASH FLOWS FROM OPERATING ACTIVITIES:
Cash received from user departments 6,316,224$
Cash payments to suppliers for goods and services (7,045,013)
Cash payments to employees for services (312,804)
Net cash used for operating activities (1,041,593)
CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES:
Cash received from other funds 2,191,065
Net cash provided by noncapital financing activities 2,191,065
CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES:
Payments to acquire capital assets (84,707)
Net cash used for capital and related financing activities (84,707)
CASH FLOWS FROM INVESTING ACTIVITIES:
Interest received from investments 7,475
Net cash provided by investing activities 7,475
Net increase in cash and cash equivalents 1,072,240
CASH AND CASH EQUIVALENTS:
Beginning of the year 997,401
End of the year 2,069,641$
RECONCILIATION OF OPERATING LOSS TO
NET CASH USED FOR OPERATING ACTIVITIES:
Operating loss (903,366)$
Adjustments to reconcile operating loss to
net cash used for operating activities:
Depreciation expense 334,373
Changes in assets and liabilities:
Increase (decrease) in accounts payable (147,074)
Increase (decrease) in accrued payroll (139)
Increase (decrease) in compensated absences payable 7,010
Increase (decrease) in claims payable (332,397)
Net cash used for operating activities (1,041,593)$
See accompanying notes to basic financial statements.
34
35
FIDUCIARY FUND
FINANCIAL STATEMENTS
City of San Gabriel
Statement of Fiduciary Net Position
Fiduciary Funds
June 30, 2019
Successor Agency
to the San Gabriel
Redevelopment
Agency
Private-Purpose
Trust Fund Agency Fund
ASSETS:
Cash and investments -$ 1,847,168$
Total assets - 1,847,168$
LIABILITIES:
CURRENT LIABILITIES:
Accounts payable - 76,825$
Deposits payable - 1,770,343
Total liabilities - 1,847,168$
NET POSITION:
Restricted for private purpose -
Total net position -$
See accompanying notes to basic financial statements.
36
City of San Gabriel
Statement of Changes in Fiduciary Net Position
Fiduciary Funds
For the year ended June 30, 2019
Successor Agency
to the San Gabriel
Redevelopment
Agency
Private-Purpose
Trust Fund
ADDITIONS:
Taxes -$
Total additions -
DEDUCTIONS:
Community development (181,142)
Total deductions (181,142)
Change in net position 181,142
NET POSITION:
Beginning of Year (181,142)
End of Year -$
See accompanying notes to basic financial statements.
37
38
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39
NOTES TO BASIC
FINANCIAL STATEMENTS
40
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City of San Gabriel
Notes to Basic Financial Statements
June 30, 2019
41
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The basic financial statements of the City of San Gabriel, California (the City), have been prepared in accordance with generally accepted accounting principles (GAAP) as applied to governmental agencies. The Governmental Accounting Standards Board (GASB) is the accepted standard setting body for establishing governmental accounting and financial reporting principles. The more significant of the City’s accounting policies are described below.
A. Description of Reporting Entity
The City of San Gabriel (City) was incorporated April 24, 1913, under the general laws of the State of California and enjoys all the rights and privileges pertaining to such “General Law” cities. The City is a municipal corporation governed by an elected five-member council.
As required by generally accepted accounting principles, these financial statements present the City of San Gabriel and its component unit, an entity for which the City is considered to be financially accountable. The City is considered to be financially accountable for an organization if the City appoints a voting majority of that organization’s governing body and the City is able to impose its will on that organization or there is a potential for that organization to provide specific financial benefits to or impose specific financial burdens on the City. The City is also considered to be financially accountable for an organization if that organization is fiscally dependent (i.e., it is unable to adopt its budget, levy taxes, set rates or charges, or issue bonded debt without approval from the City). In certain cases, other organizations are included as component units if the nature and significance of their relationship with the City are such that their exclusion would cause the City’s financial statements to be misleading or incomplete. The City has no component units.
B. Basis of Accounting and Measurement Focus
The basic financial statements of the City are composed of the following:
Government-wide financial statements
Fund financial statements
Notes to the basic financial statements
City of San Gabriel
Notes to Basic Financial Statements, Continued
June 30, 2019
42
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
B. Basis of Accounting and Measurement Focus (Continued)
Government-Wide Financial Statements
Government-wide financial statements display information about the reporting government as a whole, except for its fiduciary activities. These statements include separate columns for the governmental and business-type activities of the primary government (including its blended component units), as well as its discretely presented component units. The City of San Gabriel has no business-type activities or discretely presented component units. Certain eliminations have been made in regards to interfund transfers, payables and receivables. All internal balances in the Statement of Net Position have been eliminated. Eliminations have been made in the Statement of Activities so that certain allocated expenses are recorded only once (by the function to which they were allocated). However, general government expenses have not been allocated as indirect expenses to the various functions of the City. Internal service fund activity has been eliminated and net balances are included in the governmental activities. Interfund services provided and used, if any, are not eliminated in the consolidation process.
Government-wide financial statements are presented using the economic resources measurement
focus and accrual basis of accounting. Measurement focus is a term used to describe which transactions are recorded within the various financial statements. Under the economic resources
measurement focus, all (both current and long-term) economic resources and obligations of the reporting government are reported in the government-wide financial statements. Basis of accounting refers to when revenues and expenses are recognized in the accounts and reported in the financial statements. Under the accrual basis of accounting, revenues, expenses, gains, losses, assets, deferred outflows of resources, liabilities, and deferred inflows of resources resulting from exchange and exchange-like transactions are recognized when the exchange takes place. Under the accrual basis of accounting, revenues, expenses, gains, losses, assets, deferred outflows of resources, liabilities, and deferred inflows of resources resulting from nonexchange transactions, such grants, are recognized as revenue as soon as all eligibility requirements have been met.
Program revenues include charges for services and grants and contributions made by parties outside the reporting government’s citizenry if that money is restricted to a particular program. Program revenues are netted with program expenses in the statement of activities to present the net cost of each program. Taxes and other items not properly included among program revenues are reported instead as general revenues.
Amounts paid to acquire capital assets are capitalized as assets in the government-wide financial statements, rather than reported as an expenditure. Proceeds of long-term debt are recorded as a liability in the government-wide financial statements, rather than as an other financing source. Amounts paid to reduce long term indebtedness of the reporting government are reported as a reduction of the related liability, rather than as an expenditure.
City of San Gabriel
Notes to Basic Financial Statements, Continued
June 30, 2019
43
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
B. Basis of Accounting and Measurement Focus (Continued)
Fund Financial Statements
The underlying accounting system of the City is organized and operated on the basis of separate funds, each of which is considered to be 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, deferred inflows of resources, fund equity, revenues and expenditures or expenses, as appropriate. Governmental 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.
Fund financial statements for the primary government’s governmental, proprietary, and fiduciary funds are presented after the government-wide financial statements. These statements display information about major funds individually and nonmajor funds in the aggregate for governmental funds. Fiduciary statements, even though excluded from the government-wide financial statements represent the private-purpose trust fund and agency fund. Fiduciary funds of the City primarily represent assets held by the City in a custodial capacity for other individuals or organizations.
Governmental Funds
In the fund financial statements, governmental funds are presented using the modified-accrual
basis of accounting. Their revenues are recognized when they become measurable and available. Measurable means that the amounts can be estimated, or otherwise determined. Available means that the amounts were collected during the reporting period or soon enough thereafter to be available to finance the expenditures accrued for the reporting period. The City uses an availability period of sixty days.
Sales taxes, property taxes, franchise taxes, gas taxes, motor vehicle in lieu, transient occupancy taxes, grants and interest associated with the current fiscal period are all considered to be susceptible to accrual and so have been recognized as revenues of the current fiscal period to the extent normally collected within the availability period. Other revenue items are considered to be measurable and available where cash is received by the government.
Revenue recognition is subject to the measurable and availability criteria for the governmental funds in the fund financial statements. Exchange transactions are recognized as revenues in the period in which they are earned (i.e., the related goods or services are provided). Locally imposed derived tax revenues are recognized as revenues in the period in which the underlying exchange transaction upon which they are based takes place. Imposed nonexchange transactions are recognized as revenues in the period for which they were imposed. If the period of use is not specified, they are recognized as revenues when an enforceable legal claim to the revenues arises or when they are received, whichever occurs first. Government-mandated and voluntary nonexchange transactions are recognized as revenues when all applicable eligibility requirements have been met.
City of San Gabriel
Notes to Basic Financial Statements, Continued
June 30, 2019
44
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
B. Basis of Accounting and Measurement Focus (Continued)
Governmental Funds (Continued)
In the fund financial statements, governmental funds are presented using the current financial
resources measurement focus. This means that only current assets, current liabilities and deferred inflows of resources are generally included on their balance sheets. The reported fund balance is considered to be a measure of “available spendable resources”. Governmental fund operating statements present increases (revenues and other financing sources) and decreases (expenditures and other financing uses) in fund balance. Accordingly, they are said to present a summary of sources and uses of “available spendable resources” during a period.
Noncurrent portions of long-term receivables due to governmental funds are reported on their balance sheets in spite of their spending measurement focus.
Due to the nature of their spending measurement focus, expenditure recognition for governmental fund types excludes amounts represented by noncurrent liabilities. Since they do not affect current assets or liabilities, such long-term amounts are not recognized as governmental fund type expenditures or fund liabilities.
Amounts expended to acquire capital assets are recorded as expenditures in the year that resources were expended, rather than as fund assets. The proceeds of long-term debt are recorded as an other financing source rather than as a fund liability. Amounts paid to reduce long-term indebtedness are reported as fund expenditures.
Proprietary Funds
The City’s internal service funds are proprietary funds. Because the principal users of the internal services are the City’s governmental activities, the financial statements of the internal service fund are consolidated into the governmental activities column when presented in the government-wide financial statements. To the extent possible, the cost of these services is reported in the appropriate functional activity (general government, public safety, community development, culture and recreation, or transportation). The City uses the internal service funds to account for risk management and automotive maintenance.
In the fund financial statements, proprietary funds are presented using the accrual basis of
accounting. Revenues are recognized when they are earned and expenses are recognized when the related goods or services are delivered. In the fund financial statements, proprietary funds are presented using the economic resources measurement focus. This means that all assets and liabilities (whether current or noncurrent) associated with their activity are included on their statement of net position. Their reported fund equity presents total net position.
City of San Gabriel
Notes to Basic Financial Statements, Continued
June 30, 2019
45
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
B. Basis of Accounting and Measurement Focus (Continued)
Proprietary Funds (Continued)
Proprietary fund type operating statements present increases (revenues) and decreases (expenses) in total net position. Proprietary funds distinguish operating revenues and expenses from nonoperating items. Operating revenues and expenses generally result from providing services and producing and delivering goods in connection with a proprietary fund’s principal ongoing operations. The principal operating revenues of the City’s internal service funds are charges to departments for sales and services. Operating expenses for internal service funds include the cost of sales and services, administrative expenses, and depreciation on capital assets. All revenues and expenses not meeting this definition are reported as nonoperating revenues and expenses.
Amounts paid to acquire capital assets are capitalized as assets in the proprietary fund financial statements, rather than reported as an expenditure. Proceeds of long-term debt are recorded as a liability in the proprietary fund financial statements, rather than as an other financing source. Amounts paid to reduce long-term indebtedness of the internal service funds are reported as a reduction of the related liability, rather than as an expenditure.
Fiduciary Funds
In the fund financial statements, fiduciary funds represent the private-purpose trust fund and agency fund.
The Private-Purpose Trust Fund accounts for the assets held by the City for the Successor Agency to the San Gabriel Redevelopment Agency in which principal and income benefit individuals, private organizations, or other governments. The private-purpose trust fund is reported using the economic resources measurement focus and the accrual basis of accounting.
The Agency Fund is custodial in nature and has no measurement focus but utilizes the accrual basis for reporting its assets and liabilities.
C. Major Governmental Funds, Internal Service Funds and Fiduciary Fund Types
The City reports the following major governmental funds:
The General Fund is the primary fund of the City and is used to account for all revenues and expenditures of the City not legally restricted as to use. A broad range of municipal activities are provided through this fund including City Manager, City Attorney, Finance, City Clerk, Community Development, Public Safety and Culture and Recreation.
City of San Gabriel
Notes to Basic Financial Statements, Continued
June 30, 2019
46
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
C. Major Governmental Funds, Internal Service Funds and Fiduciary Fund Types (Continued)
The Retirement Special Revenue Fund is used to account for the receipt of property taxes of a voter-approved tax levy and pay the City’s cost of retirement for employees.
The Development Impact Fees Special Revenue Fund is used to account for the collection of fees from developers. These funds are used for public facility improvements.
The Measure R Special Revenue Fund is used to account for the City’s share of the half-cent sales tax for Los Angeles County. These funds are used for traffic relief and transportation upgrades.
The Other Grants Special Revenue Fund is used to account for funds from the State and Federal grants for neighborhood improvement and rehabilitation purposes. The Sewer Assessment Special Revenue Fund is used to account for the sewer user fees used to
pay for the maintenance and capital improvements of the sewer infrastructure.
Additionally, the City reports the following fund types:
Special Revenue Funds
The Special Revenue Funds are used to account for the revenues derived from specific revenue sources, which are usually required by law or administrative regulation, to be accounted for in separate funds.
Internal Service Funds
The Internal Service Funds - These funds are used to finance and account for goods and services provided by one City department to other City departments. Goods and services provided include payments for the City’s workers’ compensation and general liability claims and operations of an automotive equipment maintenance facility.
Fiduciary Funds
The Private-Purpose Trust Fund is used to account for the assets, liabilities, and activities of the City of San Gabriel Successor Agency.
The Agency Fund is used to account for deposits collected by the City which will be refunded at some later date.
City of San Gabriel
Notes to Basic Financial Statements, Continued
June 30, 2019
47
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
D. New Accounting Pronouncements
Current Year Standards
GASB 83 - Certain Asset Retirement Obligations, effective for periods beginning after June 15, 2018, and did not impact the City. GASB 88 - Certain Disclosures Related to Debt, Including Direct Borrowings and Direct Placements, effective for periods beginning after June 15, 2018, and did not significantly impact the City.
Pending Accounting Standards
GASB has issued the following statements, which may impact the City’s financial reporting requirements in the future:
GASB 84 - Fiduciary Activities, effective for periods beginning after December 15, 2018.
GASB 87 - Leases, effective for periods beginning after December 15, 2019.
GASB 89 - Accounting for Interest Cost Incurred before the End of a Construction Period, effective for periods beginning after December 15, 2019.
GASB 90 - Majority Equity Interests – an amendment of GASB Statements No. 14 and No. 61, effective for periods beginning after December 15, 2018.
GASB 91 - Conduit Debt Obligations, effective for periods beginning after December 15, 2020.
E. Cash Equivalents
For purposes of the statement of cash flows, cash equivalents are defined as short-term, highly liquid investments that are both readily convertible to known amounts of cash or so near their maturity that they present insignificant risk of changes in value because of changes in interest rates. Cash equivalents also represent the proprietary funds’ share in the cash and investment pool of the City of San Gabriel. Cash equivalents have an original maturity date of three months or less from the date of purchase. For purposes of the statement of cash flows, the entire balance of cash and investments on the combining statement of net position for the internal service funds is considered cash and cash equivalents.
City of San Gabriel
Notes to Basic Financial Statements, Continued
June 30, 2019
48
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) F. Investments
The City reports certain investments at fair value in the accompanying financial statements and recognizes the corresponding change in the fair value of investments in the year in which the change occurred as investment income. Investment income includes interest earnings, changes in fair value, and any gains or losses realized upon the liquidation or sale of investments. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Investments that are not traded on a market, such as investments in external pools, are valued based on the stated fair value represented by the external pool. The City pools cash and investments of all funds. Each fund’s share in this pool is displayed in the accompanying financial statements as cash and investments. Investment income earned by the pooled investments is allocated to the various funds based on each fund’s average cash and investment balances.
G. Prepaid Costs
Certain payments to vendors reflect costs applicable to future accounting periods and are recorded as prepaid costs in both government-wide and fund financial statements. Prepaid costs are recorded under the consumption method.
H. Receivables and Payables Activity between funds, that is representative of lending/borrowing arrangements outstanding at the end of the fiscal year, is referred to as either “due to/from other funds” (short-term) or “advances to/from other funds” (long-term). Advances between funds, as reported in the fund financial statements are reported as restricted in the special revenue funds and in the general fund, are offset by nonspendable fund balance for noncurrent assets to indicate that they do not constitute resources available for appropriation, and deferred inflows of resources for the portion attributable to interest receivable.
I. Capital Assets
Capital assets are recorded at cost where historical records are available and at an estimated historical cost where no historical records exist. Contributed capital assets are valued at their acquisition value at the date of the contribution. Generally, capital asset purchases in excess of $5,000 are capitalized if they have an expected useful life of three years or more.
Capital assets include additions to public domain (infrastructure) fixed assets consisting of certain improvements including roads, streets, sidewalks, medians, and storm drains. Infrastructure acquired prior to fiscal years ended June 30, 1980 is reported.
City of San Gabriel
Notes to Basic Financial Statements, Continued
June 30, 2019
49
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
I. Capital Assets (Continued)
Capital assets used in operations are depreciated over their estimated useful lives using the straight-line method in the government-wide financial statements and in the fund financial statements of the internal service funds. Depreciation is charged as an expense against operations and accumulated depreciation is reported on the respective balance sheet. The ranges of lives used for depreciation purposes for each capital asset class are as follows:
Buildings and improvements 20 - 50 years Machinery and equipment 5 - 20 years Infrastructure 15 - 50 years
J. Deferred Outflows/Inflows of Resources
In addition to assets, the statement of net position will sometimes report a separate section for deferred outflows of resources. This separate financial statement element, deferred outflows of
resources, represents a consumption of net position that applies to future periods and will not be recognized as an outflow of resources (expense/expenditure) until that time. The City has the following items that qualify for reporting in this category:
Deferred outflows related to pensions and OPEB equal to employer contributions made after the measurement date of the net pension liability and net OPEB liability, respectively.
Deferred outflows related to pensions for differences between expected and actual experiences. These amounts are amortized over a closed period equal to the average of the expected remaining service lives of all employees that are provided with pensions through the plans.
Deferred outflows related to pension plans for the changes in employer’s proportion and differences between the employer’s contributions and the employer’s proportionate share of contributions. These amounts are amortized over a closed period equal to the average of the expected remaining service lives of all employees that are provided with pensions through the plans.
Deferred outflows related to pensions resulting from the difference in projected and actual earnings on investments of the pension plans fiduciary net position. These amounts are amortized over five years.
Deferred outflows related to pensions and OPEB resulting from changes in assumptions. These amounts are amortized over a closed period equal to the average of the expected remaining service lives of all employees that are provided with pensions and OPEB through the respective plans.
City of San Gabriel
Notes to Basic Financial Statements, Continued
June 30, 2019
50
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
J. Deferred Outflows/Inflows of Resources (Continued)
In addition to liabilities, the statement of net position and the governmental funds balance sheet will sometimes report a separate section for deferred inflows of resources. This separate financial statement element, deferred inflows of resources, represents an acquisition of net position that applies to future periods and will not be recognized as an inflow of resources (revenue) until that time. The City has the following items that qualify for reporting in this category:
Deferred inflows related to pensions resulting from the differences between expected and actual experiences. These amounts are amortized over a closed period equal to the average of the expected remaining service lives of all employees that are provided with pensions through the plans.
Deferred inflows related to pension plans for the changes in employer’s proportion and differences between the employer’s contributions and the employer’s proportionate share of contributions. These amounts are amortized over a closed period equal to the average of the expected remaining service lives of all employees that are provided with pensions through the plans.
Deferred inflows related to pensions resulting from changes in assumptions. These amounts are amortized over a closed period equal to the average of the expected remaining service lives of all employees that are provided with pensions through the plans.
Deferred inflow related to OPEB resulting from the difference in projected and actual earnings on investments of the OPEB plan’s fiduciary net position. These amounts are amortized over five years.
K. Compensated Absences
Permanent City employees earn from 10 to 20 vacation days, 12 holidays and 12 sick leave days a year. In addition, if an employee works overtime, they may receive compensatory time pursuant to the Fair Labor Standards Act. Upon termination, employees are paid for all unused vacation hours, holiday and compensatory time earned. Upon a service retirement, employees are paid one-third of accumulated sick leave and all of their accumulated vacation, holiday and compensatory time earned. The remaining unused accumulated sick leave is used to increase service credit pursuant to the California Public Employees Retirement System.
A liability is recorded for unused vacation, holiday and compensatory leave balances since the employees’ entitlement to these balances are attributable to services already rendered and it is probable that virtually all of these balances will be liquidated by either paid time off or payments upon termination or retirement.
City of San Gabriel
Notes to Basic Financial Statements, Continued
June 30, 2019
51
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
K. Compensated Absences (Continued)
A liability is recorded for unused sick leave balances only to the extent that it is probable that the unused balances will result in termination payments. This liability is estimated by using 33% of the unused balances of employees age 51 and above and 10% of the unused balances of employees aged 45-50. Employees under age 45 are not estimated to receive termination payments but are anticipated to receive the benefit of their unused sick leave through their service to the City.
L. Property Taxes
Under California law, property taxes are assessed and collected by the counties up to 1 % of assessed value, plus other increases approved by the voters. The property taxes go into a pool and are then allocated to the cities based on complex formulas. Accordingly, the City of San Gabriel accrues only those taxes that are received from the county within 60 days after year-end:
Lien Date: March 1 Levy Date: July 1 to June 30 Due Dates: November 1 - 1st installment March 1 - 2nd installment Collection Dates: December 10 - 1st installment April 10 - 2nd installment
M. Net Position
In the government-wide financial statements and the proprietary and fiduciary fund financial statements, net position is classified in the following categories:
Net investment in capital assets - This amount consists of capital assets net of accumulated depreciation and reduced by outstanding debt that is attributed to the acquisition, construction, or improvement of the assets.
Restricted net position - This amount is restricted by external creditors, grantors, contributors, or laws or regulations of other governments.
Unrestricted net position - This amount is all net position that does not meet the definition of “net investment in capital assets” or “restricted net position”.
Net Position Flow Assumptions
Sometimes the City will fund outlays for a particular purpose from both restricted (e.g., restricted bond or grant proceeds) and unrestricted resources. In order to calculate the amounts to report as restricted - net position and unrestricted - net position in the government-wide and proprietary and fiduciary fund financial statements, a flow assumption must be made about the order in which the resources are considered to be applied.
It is the City’s practice to consider restricted - net position to have been depleted before unrestricted - net position is applied.
City of San Gabriel
Notes to Basic Financial Statements, Continued
June 30, 2019
52
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
N. Fund Balances
In the Governmental Fund Financial Statements, fund balances are classified in the following categories:
Nonspendable - Items that cannot be spent because they are not in spendable form, such as prepaid items and inventories, items that are legally or contractually required to be maintained intact, such as principal of an endowment or revolving loan funds.
Restricted - Restricted fund balances encompass the portion of net fund resources subject to externally enforceable legal restrictions. This includes externally imposed restrictions by creditors, such as through debt covenants, grantors, contributors, laws or regulations of other governments, as well as restrictions imposed by law through constitutional provisions or enabling legislation.
Committed - Committed fund balance includes amounts that can be used only for specific purpose determined by the highest level of decision making. These committed amounts cannot be used for any other purpose unless the City removes or changes the specified use through the same type of formal action taken to establish the commitment. The City Council is considered the highest authority for the City and the adoption of a formal resolution prior to the end of the fiscal year is required to establish a fund balance commitment. This policy was adopted with City Council Resolution No. 11-18.
Assigned - Assigned fund balances encompass the amounts that can be used by the City for a specific purpose but are not restricted or committed. The City Council Resolution No. 11-18 designates the City Manager as the City Official to determine and define the amounts of those components of fund balance that are classified as “Assigned Fund Balance”.
Unassigned - This classification includes the residual balance for the government’s General Fund and includes all spendable amounts not contained in other classifications. The General Fund is the only fund that can have a positive unassigned fund balance. In other funds, the unassigned classification is used only to report a deficit balance resulting from overspending for specific purposes for which amounts had been restricted, committed or assigned.
When an expenditure is incurred for purposes for which both restricted and unrestricted fund balances are available, the City’s policy is to apply restricted fund balance first.
When an expenditure is incurred for purposes for which committed, assigned and/or unassigned fund balance classifications could be used, and all those funds are available, the City will spend in the order of the committed, assigned and unassigned.
City of San Gabriel
Notes to Basic Financial Statements, Continued
June 30, 2019
53
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
O. Pensions
For purposes of measuring the net pension liability and deferred outflows/inflows of resources related to pensions, and pension expense, information about the fiduciary net position of the City’s California Public Employees’ Retirement System (CalPERS) plans (Plans) and additions to/deductions from the Plans’ fiduciary net position have been determined on the same basis as they are reported by CalPERS. For this purpose, benefit payments (including refunds of employee contributions) are recognized when due and payable in accordance with the benefit terms. Investments are reported at fair value.
P. Post-Employment Benefits Other Than Pensions (OPEB)
For purposes of measuring the net OPEB liability and deferred outflows/inflows of resources related to OPEB, and OPEB expense, information about the fiduciary net position of the City’s OPEB Plan and additions to/deductions from the OPEB Plans’ fiduciary net position have been determined on the same basis as they are reported by the Plan. For this purpose, the City’s OPEB Plan recognizes benefit payments when due and payable in accordance with the benefit terms. Investments are reported at fair value.
Q. Use of Estimates
The preparation of financial statements in accordance with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets, deferred outflows of resources, liabilities, and deferred inflows of resources and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting year. Actual results could differ from those estimates.
NOTE 2 - CASH AND INVESTMENTS
Cash and Investments
Cash and investments as of June 30, 2019 were classified in the accompanying financial statements as follows:
Government- Fiduciary
Wide Funds
Statement of Statement of
Net Position Net Position Total
Cash and investments 14,205,237$ 1,847,168$ 16,052,405$
Restricted cash and investments 6,651,667 - 6,651,667
Total cash and investments 20,856,904$ 1,847,168$ 22,704,072$
City of San Gabriel
Notes to Basic Financial Statements, Continued
June 30, 2019
54
NOTE 2 - CASH AND INVESTMENTS (CONTINUED)
Cash and investments at June 30, 2019 consisted of the following:
Cash on hand 5,950$
Deposits with financial institutions 11,643,720
Local Agency Investment Fund (LAIF) 11,054,402
Total cash and investments 22,704,072$
The restricted cash and investments balance of $6,651,667 is a portion of a certificate of deposit with Citizens Business Bank that matures on January 20, 2025. The certificate of deposit is pursuant to the requirement for collateral of the loan payable through the maturity date of the loan of January 21, 2025 (see Note 5). The City’s investment policy limits the maximum maturity of certificates of deposit to 5 years with the exception of this investment in the certificate of deposit with Citizens Business Bank which is 10 years. Investments Authorized by the California Government Code and the City’s Investment Policy
The table below identifies the investment types that are authorized for the City by the California Government Code and the City’s investment policy. The table also identities certain provisions of the California Government Code (or the City’s investment policy, if more restrictive) that address interest rate risk, and concentration of credit risk.
Authorized
by Investment
Policy
Maximum
Maturity*
Maximum
Percentage of
Portfolio*
Maximum
Investment in
One Issuer*Local Agency Bonds Yes 5 years None None
U.S. Treasury Obligations Yes 5 years None None
U.S. Government Sponsored
Agency Securities Yes 5 years 20% None
Banker’s Acceptances Yes 180 days 40% 30%
Commercial Paper Yes 270 days 25% 10%
Negotiable Certificates of Deposit Yes 5 years 30% None
Repurchase Agreements Yes 1 year None None
Reverse Repurchase Agreements Yes 92 days 20% of basic
value
None
Medium-Term Notes Yes 5 years 30% None
Mutual Funds Yes N/A 10% 10%
Money Market Mutual Funds Yes N/A 20% 10%
Mortgage Pass-Through Securities Yes 5 years 20% None
County Pooled Investment Funds Yes N/A None None
Local Agency Investment Fund (LAIF) Yes N/A None None
JPA Pools (other investment pools) Yes N/A None None
*Based on state law requirements or investment policy requirements, whichever is more restrictive.
N/A - Not Applicable
Investment Types
Authorized by State Law
City of San Gabriel
Notes to Basic Financial Statements, Continued
June 30, 2019
55
NOTE 2 - CASH AND INVESTMENTS (CONTINUED)
Disclosures Relating to Interest Rate Risk
Interest rate risk is the risk that changes in market interest rates will adversely affect the fair value of an investment. Generally, the longer the maturity of an investment, the greater the sensitivity of its fair value to changes in market interest rates. One of the ways that the City manages its exposure to interest rate risk is by purchasing a combination of shorter term and longer term investments and by timing cash flows from maturities so that a portion of the portfolio is maturing or coming close to maturity evenly over time as necessary to provide the cash flow and liquidity needed for operations. Due to the high liquidity of LAIF, its investment maturity is considered to be less than one year.
Disclosures Relating to Credit Risk
Generally, credit risk is the risk that an issuer of an investment will not fulfill its obligation to the holder of the investment. This is measured by the assignment of a rating by a nationally recognized statistical rating organization. The City’s investment in LAIF is not rated. Custodial Credit Risk
Custodial credit risk for deposits is the risk that, in the event of the failure of a depository financial institution, a government will not be able to recover its deposits or will not be able to recover collateral securities that are in the possession of an outside party. The custodial credit risk for investments is the risk that, in the event of the failure of the counterparty (e.g., broker-dealer) to a transaction, a government will not be able to recover the value of its investment or collateral securities that are in the possession of another party. The California Government Code and the City’s investment policy do not contain legal or policy requirements that would limit the exposure to custodial credit risk for deposits or investments, other than the following provision for deposits: The California Government Code requires that a financial institution secure deposits made by state or local governmental units by pledging securities in an undivided collateral pool held by a depository regulated under state law (unless so waived by the governmental unit). The market value of the pledged securities in the collateral pool must equal at least 110% of the total amount deposited by the public agencies. California law also allows financial institutions to secure City deposits by pledging first trust deed mortgage notes having a value of 150% of the secured public deposits. At June 30, 2019, the City’s deposits were insured by the Federal Deposit Insurance Corporation or collateralized as required by California law. Investment in State Investment Pool - LAIF
The City is a voluntary participant in the Local Agency Investment Fund (LAIF) that is regulated by California Government Code Section 16429 under the oversight of the Treasurer of the State of California. The fair value of the City’s investment in this pool is reported in the accompanying financial statements at amounts based upon the City’s pro-rata share of the fair value provided by LAIF for the entire LAIF portfolio. The balance available for withdrawal is based on the accounting records maintained by LAIF.
City of San Gabriel
Notes to Basic Financial Statements, Continued
June 30, 2019
56
NOTE 2 - CASH AND INVESTMENTS (CONTINUED)
Fair Value Measurements
The City categorizes its fair value measurement within the fair value hierarchy established by generally accepted accounting principles. The hierarchy is based on the valuation inputs used to measure the fair value of the assets. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements).
The City’s investment in LAIF is not subject to the fair value hierarchy.
NOTE 3 - INTERFUND TRANSACTIONS
Due To and Due From
The composition of interfund balances as of June 30, 2019 is as follows:
Due From Due To Amount
General Fund Development Impact Fees Special Revenue Fund 4,000,000$
Sewer Assessment Special Revenue Fund 5,000,000
Other Governmental Funds 523,370
Other Governmental Funds Other Governmental Funds 258,198
9,781,568$
The outstanding balances between Other Governmental Funds result mainly from interfund borrowings to cover temporary cash shortfalls. The outstanding balances between the General Fund and other funds result from interfund borrowings due to the General Fund’s liquidity problems (see note 13).
Interfund Transfers
The composition of interfund transfers for the year ended June 30, 2019 is as follows:
Transfers In Amount
General Fund Retirement Special Revenue Fund (a) 7,926,444$
Other Governmental Funds Retirement Special Revenue Fund (a) 67,571
General Fund (b) 642,404
8,636,419$
Transfers Out
Transfers are used to provide funding for (a) retirement costs and (b) operating costs of Mission Playhouse/Facility.
City of San Gabriel
Notes to Basic Financial Statements, Continued
June 30, 2019
57
NOTE 4 - CAPITAL ASSETS
Capital asset activity for governmental activities for the year ended June 30, 2019 was as follows:
Balance at Deletions/ Balance at
July 1, 2018 Additions Transfers June 30, 2019
Capital assets, not being depreciated:
Land 5,693,699$ -$ -$ 5,693,699$
Construction in progress 4,371,708 894,471 (1,027,936) 4,238,243
Total capital assets, not
being depreciated 10,065,407 894,471 (1,027,936) 9,931,942
Capital assets, being depreciated:
Buildings and improvements 28,134,873 303,583 - 28,438,456
Machinery and equipment 13,665,494 293,781 (360,299) 13,598,976
Infrastructure 85,949,100 76,219,531 - 162,168,631
Total capital assets,
being depreciated 127,749,467 76,816,895 (360,299) 204,206,063
Less accumulated depreciation for:
Buildings and improvements (6,553,607) (802,970) - (7,356,577)
Machinery and equipment (8,443,125) (739,622) 352,490 (8,830,257)
Infrastructure (61,092,520) (2,233,014) - (63,325,534)
Total accumulated depreciation (76,089,252) (3,775,606) 352,490 (79,512,368)
Total capital assets,
being depreciated, net 51,660,215 73,041,289 (7,809) 124,693,695
Total capital assets, net 61,725,622$ 73,935,760$ (1,035,745)$ 134,625,637$
During the fiscal year ended June 30, 2019, the City received contributed infrastructure assets from the San Gabriel Valley Council of Government, a joint power authority, with acquisition value of $70,315,000. Depreciation expense was charged to the following functions in the Statement of Activities:
General government 142,285$
Public safety 344,826
Community development 1,400,033
Community services 537,075
Public works 1,351,387
Total 3,775,606$
City of San Gabriel
Notes to Basic Financial Statements, Continued
June 30, 2019
58
NOTE 5 - LONG-TERM LIABILITIES
Changes in long-term liabilities during the year ended June 30, 2019 were as follows:
Due in
Balance Balance Due Within More Than
July 1, 2018 Additions Deletions June 30, 2019 One Year One Year
Direct borrowing:
Loan payable 6,911,667$ -$ (260,000)$ 6,651,667$ 260,000$ 6,391,667$
Installment sale agreement 3,362,538 - (230,280) 3,132,258 238,340 2,893,918
Compensated absences 2,719,281 484,535 (549,382) 2,654,434 782,626 1,871,808
Claims payable (Note 10) 1,820,469 2,591,169 (2,923,566) 1,488,072 531,596 956,476
Total long-term liabilities 14,813,955$ 3,075,704$ (3,963,228)$ 13,926,431$ 1,812,562$ 12,113,869$
Loan Payable
On December 16, 2014, the City entered into a loan agreement with Citizens Business Bank for a loan of $7,800,000. The loan proceeds were used for the construction of the new public works maintenance facility. Interest on the loan is computed on a 365/360 basis at an annual fixed interest rate of 1.6%. The City will repay the loan, beginning on February 21, 2015, in 119 principal payments of $21,667 each and one final principal and interest payment of $5,221,667 on January 21, 2025. In addition, the City will pay regular monthly payments of accrued unpaid interest due as of each payment date. The loan is collateralized with a ten-year certificate of deposit held with the lender in the amount of $6,651,667 that is shown as restricted cash and investments in the financial statements.
The City has an option to extend the term of the loan for two additional 10 year periods. If the first option is utilized, the interest rate would increase by 1.0% to an annual rate of 2.6% and the loan would mature on January 21, 2035. If the second option is utilized, the rate would increase by 1.0% over the extended term rate to an annual rate of 3.6% and the loan would mature on January 21, 2045. Upon utilizing either option, the City would be required to collateralize the loan with a new ten-year certificate of deposit held with the lender in the amount of the balance of the loan. The annual requirements to amortize the loan payable outstanding at June 30, 2019 are as follows:
FiscalYear Ending Principal Interest Total
2020 260,000$ 104,520$ 364,520$ 2021 260,000 100,360 360,360 2022 260,000 96,200 356,200 2023 260,000 92,040 352,040 2024 260,000 87,880 347,880 2025 5,351,667 49,574 5,401,241
Totals 6,651,667$ 530,574$ 7,182,241$
City of San Gabriel
Notes to Basic Financial Statements, Continued
June 30, 2019
59
NOTE 5 - LONG-TERM LIABILITIES (CONTINUED)
Installment Sale Agreement
On May 1, 2015, the City entered into an installment sale agreement with the California Infrastructure and Economic Development Bank (IBank) to finance the accelerated great streets program, which will upgrade, reconstruct, and rehabilitate approximately 1.6 lane miles of public streets within the City. IBank has issued tax-exempt bonds for which the City will submit reimbursement requests upon incurring project costs. The City can utilize proceeds in an amount up to $3,800,000. Interest accrues on the entire principal balance, whether or not disbursed, at an interest rate of 3.5% per annum. Principal and interest payments are due on each August 1 and February 1, commencing on August 1, 2017 and maturing on August 1, 2029. In addition, on August 1 of each year, the City must pay an annual fee of 0.3% on the outstanding principal component of the remaining principal balance.
In order to carry out its obligation, the City shall maintain a distinct fund separate and apart from other funds. All Measure R revenues received shall be deposited in trust in this separate fund and shall be applied in the following order until the loan has matured: (1) establish a reserve account in the amount equal to $343,798, (2) payment of annual debt service 0.3% fee, (3) payment for any lawful purpose allowed by Measure R. The Measure R activity is recorded in the Measure R Special Revenue Fund. During the fiscal year ended June 30, 2019, the Measure R intergovernmental revenues recognized in the governmental fund financial statements totaled $522,936 and principal and interest payments totaling $343,939 were made. During fiscal year 2018-19, $3,588,592 of loan proceeds were disbursed, leaving $211,408 of loan proceeds to be disbursed, which is recorded as accounts receivable in the Measure R Special Revenue Fund. The liability and outstanding balance at June 30, 2019, is $3,132,258 and the annual payment requirements are as follows:
FiscalYear Ending Principal Interest Total
2020 238,340$ 105,458$ 343,798$ 2021 246,682 96,970 343,652 2022 255,315 88,185 343,500 2023 264,252 79,093 343,345 2024 273,500 69,682 343,182
2025 - 2029 1,517,968 195,311 1,713,279 2030 336,201 5,884 342,085
Totals 3,132,258$ 640,583$ 3,772,841$
Compensated Absences
The City’s policies relating to compensated absences are described in Note 1K. This liability, amounting to $2,654,434 at June 30, 2019, is expected to be paid in future years from future resources and is typically liquidated from the General Fund.
City of San Gabriel
Notes to Basic Financial Statements, Continued
June 30, 2019
60
NOTE 6 - EXPENDITURES IN EXCESS OF APPROPRIATIONS
Expenditures for the year ended June 30, 2019 exceeded the appropriations of the following departments/funds:
Final Variance withBudget Actual Final Budget
Major Funds:General Fund:
Human resources 784,990$ 1,002,952$ (217,962)$ Community services 1,612,074 1,613,753 (1,679)
Other Governmental Funds:Citizens Option for Public Safety
Special Revenue Fund:Public safety 125,375 151,635 (26,260)
NOTE 7 - FUND DEFICITS
At June 30, 2019, the following funds had a deficit balance:
Major Funds:General Fund (1,834,850)$
Other Governmental Special Revenue Funds:Citizens Option for Public Safety (24,464) Mission Playhouse/Facility (223,843)
Internal Service Fund - Risk Management (142,471) The deficits in the other governmental special revenue funds and internal service fund are expected to be remedied with future revenues or transfers. See note 13 for disclosure regarding the deficit in the General Fund.
City of San Gabriel
Notes to Basic Financial Statements, Continued
June 30, 2019
61
NOTE 8 - DEFINED BENEFIT PENSION PLANS (CalPERS)
A. General Information about the Pension Plans
Plan Descriptions
All qualified permanent and probationary employees are eligible to participate in the City’s separate Safety (police and fire) and Miscellaneous (all other) Employee Pension Plans, cost-sharing multiple employer defined benefit pension plans administered by the California Public Employees’ Retirement System (CalPERS). Benefit provisions under the Plans are established by State statute and City resolution. CalPERS issues publicly available reports that include a full description of the pension plans regarding benefit provisions, assumptions and membership information that can be found on the CalPERS website.
Benefits Provided
CalPERS provides service retirement and disability benefits, annual cost of living adjustments and death benefits to plan members, who must be public employees and beneficiaries. Benefits are based on years of credited service, equal to one year of full time employment. Members with five years of total service are eligible to retire at age 50 to 62 with statutorily reduced benefits. For employees hired into a plan with the 1.5% at 65 formula, eligibility for service retirement is age 55 with at least 5 years of services. California Public Employees’ Pension Reform Act of 2013, PEPRA miscellaneous members become eligible for service retirement upon attainment of age 52 with at least 5 years of service. All members are eligible for non-duty disability benefits after 5 years of service. The death benefit is one of the following: the Basic Death Benefit, the 1957 Survivor Benefit, or the Optional Settlement 2W Death Benefit. Safety members can receive a special death benefit if the member dies while actively employed and the death is job-related. Fire members may receive the alternate death benefit in lieu of the Basic Death Benefit or the 1957 Survivor Benefit if the member dies while actively employed and has at least 20 years of total CalPERS service. The cost of living adjustments for each plan are applied as specified by the Public Employees’ Retirement Law.
City of San Gabriel
Notes to Basic Financial Statements, Continued
June 30, 2019
62
NOTE 8 - DEFINED BENEFIT PENSION PLANS (CalPERS) (CONTINUED)
A. General Information about the Pension Plans (Continued)
Benefits Provided (Continued)
The Plans’ provisions and benefits in effect at measurement date ended June 30, 2018, and fiscal year ended June 30, 2019, are summarized as follows:
Tier I Tier II Tier III - PEPRA
Prior to On or After On or After
Hire date November 3, 2012 November 3, 2012 January 1, 2013
Benefit formula 2.7%@55 2%@60 2%@62
Benefit vesting schedule 5 years of service 5 years of service 5 years of service
Benefit payments monthly for life monthly for life monthly for life
Retirement age 50 - 55 50 - 63 52 - 67
Monthly benefits, as a % of eligible
compensation 2.0% to 2.7% 1.092% to 2.418% 1.0% to 2.5%
Required employee contribution rates 8% 7% 6.5%
Required employer contribution rates:
Measurement date June 30, 2018:
Normal cost rate 12.470% 7.850% 6.908%
Payment of unfunded liability $1,136,314 $165 $334
Fiscal year end date June 30, 2019:
Normal cost rate 13.084% 8.346% 7.266%
Payment of unfunded liability $1,313,253 $1,111 $645
Miscellaneous
Tier I Tier II Tier III - PEPRA
Prior to On or After On or After
Hire date November 3, 2012 November 3, 2012 January 1, 2013
Benefit formula 3%@50 2%@50 2.7%@57
Benefit vesting schedule 5 years of service 5 years of service 5 years of service
Benefit payments monthly for life monthly for life monthly for life
Retirement age 50 - 55 50 - 55 50 - 57
Monthly benefits, as a % of eligible
compensation 2.4% to 3.0% 2.0% to 2.7% 2.0% to 2.7%
Required employee contribution rates 9% 9% 12.250%
Required employer contribution rates:
Measurement date June 30, 2018:
Normal cost rate 21.418% 16.498% 12.729%
Payment of unfunded liability $2,766,577 * $0 $315
Fiscal year end date June 30, 2019:
Normal cost rate 22.346% 17.334% 12.965%
Payment of unfunded liability $3,255,835 * $96 $903
*
Safety - Police
The payment of the unfunded liability of $2,766,577 and $3,255,835 consists of the total for both the police and
fire defined benefit pension plans.
City of San Gabriel
Notes to Basic Financial Statements, Continued
June 30, 2019
63
NOTE 8 - DEFINED BENEFIT PENSION PLANS (CalPERS) (CONTINUED)
A. General Information about the Pension Plans (Continued)
Benefits Provided (Continued)
The Plans’ provisions and benefits in effect at measurement date ended June 30, 2018, and fiscal year ended June 30, 2019, are summarized as follows (Continued):
Tier I Tier II Tier III - PEPRA
Prior to On or After On or After
Hire date November 3, 2012 November 3, 2012 January 1, 2013
Benefit formula 3%@50 2%@50 2.7%@57
Benefit vesting schedule 5 years of service 5 years of service 5 years of service
Benefit payments monthly for life monthly for life monthly for life
Retirement age 50 - 55 50 - 55 50 - 57
Monthly benefits, as a % of eligible
compensation 2.4% to 3.0% 2.0% to 2.7% 2.0% to 2.7%
Required employee contribution rates 9% 9% 12.250%
Required employer contribution rates:
Measurement date June 30, 2018:
Normal cost rate 21.418% 16.498% 12.729%
Payment of unfunded liability $2,766,577 * $0 $68
Fiscal year end date June 30, 2019:
Normal cost rate 21.418% 17.334% 12.965%
Payment of unfunded liability $3,255,835 * $1,370 $278
*
Safety - Fire
The payment of the unfunded liability of $2,766,577 and $3,255,835 consists of the total for both the police and
fire defined benefit pension plans.
Contributions
Section 20814(c) of the California Public Employees’ Retirement Law requires that the employer contribution rates for all public employers are determined on an annual basis by the actuary and shall be effective on the July 1 following notice of a change in the rate. The total plan contributions are determined through CalPERS’ annual actuarial valuation process. The actuarially determined rate is the estimated amount necessary to finance the costs of benefits earned by employees during the year, with an additional amount to finance any unfunded accrued liability. The City is required to contribute the difference between the actuarially determined rate and the contribution rate of employees. City contribution rates may change if plan contracts are amended. Payments made by the employer to satisfy contribution requirements that are identified by the pension plan terms as plan member contributions requirements are classified as plan member contributions. Pension liability is primarily liquidated from the general fund.
City of San Gabriel
Notes to Basic Financial Statements, Continued
June 30, 2019
64
NOTE 8 - DEFINED BENEFIT PENSION PLANS (CalPERS) (CONTINUED)
B. Pension Liabilities, Pension Expenses and Deferred Outflows/Inflows of Resources Related to
Pensions
As of June 30, 2019, the City reported net pension liabilities for its proportionate shares of the net pension liability of each Plan as follows:
Proportionate
Share of
Net Pension
Liability
Miscellaneous 17,824,500$
Safety 49,460,962
Total Net Pension Liability 67,285,462$
The City’s net pension liability for each Plan is measured as the proportionate share of the net pension liability. The net pension liability of each of the Plans is measured as of June 30, 2018, and the total pension liability for each Plan used to calculate the net pension liability was determined by an actuarial valuation as of June 30, 2017 rolled forward to June 30, 2018 using standard update procedures. The City’s proportionate share of the net pension liability was based on a projection of the City’s long-term share of contributions to the pension plans relative to the projected contributions of all participating employers, actuarially determined. The City’s proportionate share of the net pension liability for each Plan as of the measurement dates ended June 30, 2017 and 2018 was as follows:
Miscellaneous Safety
Proportion - June 30, 2017 0.46576% 0.82510%
Proportion - June 30, 2018 0.47296% 0.84296%
Change - Increase (Decrease) 0.00720% 0.01786%
City of San Gabriel
Notes to Basic Financial Statements, Continued
June 30, 2019
65
NOTE 8 - DEFINED BENEFIT PENSION PLANS (CalPERS) (CONTINUED)
B. Pension Liabilities, Pension Expenses and Deferred Outflows/Inflows of Resources Related to
Pensions (Continued) For the year ended June 30, 2019, the City recognized pension expense of $2,834,459 for the miscellaneous plan and $7,744,689 for the safety plan. At June 30, 2019, the City reported deferred outflows of resources and deferred inflows of resources related to pensions from the following sources:
Deferred Deferred
Outflows Inflows
of Resources of Resources
Pension contributions subsequent to measurement date 2,003,491$ -$
Differences between expected and actual experience 683,895 (232,725)
Change in assumptions 2,032,046 (498,015)
Change in employer's proportion and differences
between the employer's contributions and the
employer's proportionate share of contributions 300,967 (588,741)
Net differences between projected and actual
earnings on plan investments 88,121 -
Total 5,108,520$ (1,319,481)$
Miscellaneous
Deferred Deferred
Outflows Inflows
of Resources of Resources
Pension contributions subsequent to measurement date 4,883,007$ -$
Differences between expected and actual experience 1,062,749 (4,031)
Change in assumptions 4,852,983 (654,754)
Change in employer's proportion and differences
between the employer's contributions and the
employer's proportionate share of contributions 86,668 (769,374)
Net differences between projected and actual
earnings on plan investments 334,875 -
Total 11,220,282$ (1,428,159)$
Safety
City of San Gabriel
Notes to Basic Financial Statements, Continued
June 30, 2019
66
NOTE 8 - DEFINED BENEFIT PENSION PLANS (CalPERS) (CONTINUED)
B. Pension Liabilities, Pension Expenses and Deferred Outflows/Inflows of Resources Related to
Pensions (Continued) $2,003,491 and $4,883,007 reported as deferred outflows of resources related to contributions subsequent to the measurement date for the miscellaneous and safety plan, respectively, will be recognized as a reduction of the net pension liability in the year ending June 30, 2020. Other amounts reported as deferred outflows of resources and deferred inflows of resources related to pensions will be recognized as pension expense as follows:
Year
Ending
June 30, Amount
2020 1,734,840$
2021 910,886
2022 (699,858)
2023 (160,320)
2024 -
Thereafter -
Year
Ending
June 30, Amount
2020 4,323,427$
2021 2,411,521
2022 (1,483,239)
2023 (342,593)
2024 -
Thereafter -
Miscellaneous
Safety
Actuarial Assumptions
The total pension liability for the June 30, 2018 measurement period was determined by an actuarial valuation as of June 30, 2017, with update procedures used to roll forward the total pension liability to June 30, 2018.
City of San Gabriel
Notes to Basic Financial Statements, Continued
June 30, 2019
67
NOTE 8 - DEFINED BENEFIT PENSION PLANS (CalPERS) (CONTINUED)
B. Pension Liabilities, Pension Expenses and Deferred Outflows/Inflows of Resources Related to
Pensions (Continued) Actuarial Assumptions (Continued)
The total pension liability was based on the following actuarial methods and assumptions:
Miscellaneous Safety
Valuation Date June 30, 2017 June 30, 2017
Measurement Date June 30, 2018 June 30, 2018
Actuarial Cost Method Entry-Age Normal Entry-Age Normal
Cost Method Cost Method
Actuarial Assumptions:
Discount Rate 7.15% 7.15%
Inflation 2.50% 2.50%
Salary Increases (1) (1)
Mortality Rate Table (2) (2)
Post Retirement Benefit Increase (3) (3)
(1) Varies by entry age and service
(2)
(3) Contract COLA up to 2.00% until Purchasing Power Protection Allowance Floor on
Purchasing Power applies, 2.50% thereafter.
The mortality table used was developed based on CalPERS-specific data. The table includes
15 years of mortality improvements using Society of Actuaries Scale 90% of scale MP 2016.
For more details on this table, please refer to the December 2017 experience study report
(based on CalPERS demographic data from 1997 to 2015) that can be found on the
CalPERS website.
Long-term Expected Rate of Return
The long-term expected rate of return on pension plan investments was determined using a building-block method in which expected future real rates of return (expected returns, net of pension plan investment expense and inflation) are developed for each major asset class.
In determining the long-term expected rate of return, CalPERS took into account both short-term and long-term market return expectations as well as the expected pension fund cash flows. Using historical returns of all the funds’ asset classes, expected compound (geometric) returns were calculated over the short-term (first 10 years) and the long-term (11+ years) using a building-block approach. Using the expected nominal returns for both short-term and long-term, the present value of benefits was calculated for each fund. The expected rate of return was set by calculating the rounded single equivalent expected return that arrived at the same present value of benefits for cash flows as the one calculated using both short-term and long-term returns. The expected rate of return was then set equal to the single equivalent rate calculated above and adjusted to account for assumed administrative expenses.
City of San Gabriel
Notes to Basic Financial Statements, Continued
June 30, 2019
68
NOTE 8 - DEFINED BENEFIT PENSION PLANS (CalPERS) (CONTINUED)
B. Pension Liabilities, Pension Expenses and Deferred Outflows/Inflows of Resources Related to
Pensions (Continued)
Long-term Expected Rate of Return (Continued)
The expected real rates of return by asset class are as follows:
Assumed Real Return Real Return
Asset Years Years
Allocation 1 - 10 (b) 11+ (c)
Global Equity 50.00% 4.80% 5.98%
Fixed Income 28.00% 1.00% 2.62%
Inflation Assets 0.00% 0.77% 1.81%
Private Equity 8.00% 6.30% 7.23%
Real Assets 13.00% 3.75% 4.93%
Liquidity 1.00% 0.00% -0.92%
Total 100.00%
(a)
(b) An expected inflation of 2.0% used for this period
(c) An expected inflation of 2.92% used for this period
Asset Class (a)
In the CalPERS CAFR, Fixed Income is included in Global Debt Securities; Liquidity is
included in Short-term Investments; Inflation Assets are included in both Global Equity
Securities and Global Debt Securities
Discount Rate
The discount rate used to measure the total pension liability was 7.15%. The projection of cash flows used to determine the discount rate assumed that contributions from plan members will be made at the current member contribution rates and that contributions from employers will be made at statutorily required rates, actuarially determined. Based on those assumptions, the Plan’s fiduciary net position was projected to be available to make all projected future benefit payments of current plan members. Therefore, the long-term expected rate of return on plan investments was applied to all periods of projected benefit payments to determine the total pension liability.
City of San Gabriel
Notes to Basic Financial Statements, Continued
June 30, 2019
69
NOTE 8 - DEFINED BENEFIT PENSION PLANS (CalPERS) (CONTINUED)
B. Pension Liabilities, Pension Expenses and Deferred Outflows/Inflows of Resources Related to
Pensions (Continued) Sensitivity of the Proportionate Share of the Net Pension Liability to Changes in the Discount
Rate
The following presents the City’s proportionate share of the net pension liability for each Plan, calculated using the discount rate for each Plan, as well as what the City’s proportionate share of the net pension liability would be if it were calculated using a discount rate that is 1-percentage point lower or 1-percentage point higher than the current rate:
Miscellaneous Safety
1% Decrease 6.15% 6.15%
Net Pension Liability 26,163,192$ 70,964,305$
Current Discount Rate 7.15% 7.15%
Net Pension Liability 17,824,500$ 49,460,962$
1% Increase 8.15% 8.15%
Net Pension Liability 10,941,046$ 31,842,823$
Pension Plans Fiduciary Net Position
Detailed information about each pension plan’s fiduciary net position is available in the separately issued CalPERS financial reports.
C. Payable to the Pension Plans
At June 30, 2019, the City had no outstanding amount of contributions to the pension plan required for the year ended June 30, 2019.
City of San Gabriel
Notes to Basic Financial Statements, Continued
June 30, 2019
70
NOTE 9 - OTHER POST-EMPLOYMENT BENEFITS (OPEB) PLAN
A. Plan Description The City contracts with the California Public Employees’ Retirement System to provide post-retirement health benefits. As an agent multi-employer postemployment benefit plan, the City pays $150 per month towards health insurance premiums for employees who retired before July 1, 2003. The amount the City pays for employees who retire after July 1, 2003 with at least 5 years of employment with the City of San Gabriel is varied based on years of service. The exact amount is calculated based on CalPERS vesting schedule. California Government Code 22871 sets the state health coverage contributions for retired employees (annuitants). The amount is equal to 100 percent of the weighted average of the premiums in the four basic health plans with the largest state enrollment for the previous benefit year. The schedule is adjusted annually based on the 100%/90%, employee/dependent, formula as provided in Section 22825.1 of the Public Employees’ Medical and Hospital Act. For the fiscal year ended June 30, 2019, the schedule is as follows:
Years of
CalPERS % of Employer
Service 1 Party 2 Party 3+ Party Contribution
Less than 10 -$ -$ -$ 0%
10 367.00 699.00 894.00 50%
11 403.70 768.90 983.40 55%
12 440.40 838.80 1,072.80 60%
13 477.10 908.70 1,162.20 65%
14 513.80 978.60 1,251.60 70%
15 550.50 1,048.50 1,341.00 75%
16 587.20 1,118.40 1,430.40 80%
17 623.90 1,188.30 1,519.80 85%
18 660.60 1,258.20 1,609.20 90%
19 697.30 1,328.10 1,698.60 95%
20 or more 734.00 1,398.00 1,788.00 100%
Employees Covered
As of measurement date June 30, 2018, the following current and former employees were covered by the benefit terms under the plan:
Inactive employees, spouses, or beneficiaries currently
receiving benefit payments 115
Active employees 180
Total Plan Participants 295
City of San Gabriel
Notes to Basic Financial Statements, Continued
June 30, 2019
71
NOTE 9 - OTHER POST-EMPLOYMENT BENEFITS (OPEB) PLAN (CONTINUED)
A. Plan Description (Continued)
Contributions
The contribution requirements of plan members and the City are established and may be amended by the City Council. Currently, contributions are not required from plan members. Administrative costs of the OPEB plan are financed through investment earnings. The annual contribution is based on the actuarially determined contributions. For the measurement period ended June 30, 2018, the City contributed $112,900 to the California Retiree Benefit Trust (CERBT), paid $1,111,215 for current premiums, and the estimated implied subsidy was $188,404, resulting in total contributions of $1,412,519. The contributions to the OPEB plan are generally made from the risk management internal service fund. The liability for governmental activities is primarily liquidated from the risk management internal service fund.
For the fiscal year ended June 30, 2019, the City did not make a contribution to the CERBT, paid $1,233,512 for current premiums and the estimated implied subsidy was $196,039, resulting in total contributions of $1,429,551. The contributions for the fiscal year ended June 30, 2019 were made from the general fund.
B. Total OPEB Liability
The City’s total OPEB liability for the June 30, 2018 measurement period was determined by an actuarial valuation as of June 30, 2017, with update procedures used to roll forward the total OPEB liability to June 30, 2018.
Actuarial Assumptions
The total OPEB liability in the June 30, 2017 actuarial valuation was determined using the following actuarial assumptions, applied to all periods included in the measurement, unless otherwise specified:
Valuation Date June 30, 2017
Measurement Date June 30, 2018
Actuarial Cost Method Entry-age normal level percentage of salary
Actuarial Assumptions:
Discount Rate 3.78%
Long-Term Expected
Rate of Return on Investments 7.00%
Inflation 2.75%
Salary Increase 3.00% in aggregate
Healthcare Cost Trend Rates 6.00% HMO/6.50% PPO in 2019 trending
down to 5.00% in 2021+ for HMO and 2022+
for PPO
Mortality Derived from CalPERS pension plan updated
to reflect most recent experience study
City of San Gabriel
Notes to Basic Financial Statements, Continued
June 30, 2019
72
NOTE 9 - OTHER POST-EMPLOYMENT BENEFITS (OPEB) PLAN (CONTINUED)
B. Total OPEB Liability (Continued) The actuarial assumptions used in the June 30, 2017 valuation were based on a standard set of assumptions the actuary has used for similar valuations, modified as appropriate for the City. The long-term expected rate of return was determined using a building-block method in which best-estimate ranges of expected future real rates of return (expected returns, net of OPEB plan investment expense and inflation) are developed for each major asset class. These ranges are combined to produce the long-term expected rate of return by weighing the expected future real rates of return by the target asset allocation percentage and by adding expected inflation. Best estimates of arithmetic real rates of return for each major asset class included in the OPEB plan’s target asset allocation as of measurement date June 30, 2018 are summarized in the following table:
Long-TermTarget Expected Real
Allocation Rate of ReturnCERBT
Global Equity 57.00% 5.50%Global Debt Securities 27.00% 2.35%Inflation Assets 5.00% 1.50%Commodities 3.00% 1.75%REITs 8.00% 3.65%Total 100.00%
Asset Class
Discount Rate
The discount rate used to measure the total OPEB liability was 3.78%. The City does not currently have a pre-funding policy or practice for additional prefunding but does not reimburse for its current retiree payments from the CERBT. The projection of cash flows used to determine the discount rate assumed that no future contributions are made to the CERBT. The discount rate is a blended rate between the long-term expected rate of return at 7.00% and 3.50%, which is the average of three 20-year municipal bond rate indices as of measurement date June 30, 2018: S&P Municipal Bond 20 Year High Grade Rate Index, Bond Buyer 20-Bond GO Index, and Fidelity GO AA 20 Year Bond Index. The long-term expected rate of return on CERBT investments was applied from years 2018 through 2031 and the average municipal bond rate was applied from years 2032 and after to determine the total OPEB liability.
City of San Gabriel
Notes to Basic Financial Statements, Continued
June 30, 2019
73
NOTE 9 - OTHER POST-EMPLOYMENT BENEFITS (OPEB) PLAN (CONTINUED)
C. Changes in the Net OPEB Liability
The changes in the net OPEB liability are as follows:
Total Plan Net
OPEB Fiduciary OPEB
Liability Net Position Liability
Balance at June 30, 2017
(Measurement Date) 29,306,985$ 5,093,478$ 24,213,507$
Changes in the Year:
Service cost 955,322 - 955,322
Interest on the total OPEB liability 2,072,875 - 2,072,875
Changes in assumptions 19,026,463 - 19,026,463
Contribution - employer - 1,412,519 (1,412,519)
Net investment income - 405,826 (405,826)
Benefit payments (1,299,620) (1,299,620) -
Administrative expenses - (2,710) 2,710
Other expense - (6,740) 6,740
Net Changes 20,755,040 509,275 20,245,765
Balance at June 30, 2018
(Measurement Date) 50,062,025$ 5,602,753$ 44,459,272$
Increase (Decrease)
Change of Assumptions
The discount rate was lowered from 7.00% as of June 30, 2017 to 3.78% as of June 30, 2018. Change of Benefit Terms
There were no changes of benefit terms.
Subsequent Events
There were no subsequent events that would materially affect the results presented in this disclosure.
City of San Gabriel
Notes to Basic Financial Statements, Continued
June 30, 2019
74
NOTE 9 - OTHER POST-EMPLOYMENT BENEFITS (OPEB) PLAN (CONTINUED)
C. Changes in the Net OPEB Liability
Sensitivity of the Net OPEB Liability to Changes in the Discount Rate
The following presents the net OPEB liability of the City, as well as what the City’s net OPEB liability would be if it were calculated using a discount rate that is 1-percentage point lower (2.78%) or 1-percentage point higher (4.78%) than the current discount rate:
1% Decrease Discount Rate 1% Increase(2.78%) (3.78%) (4.78%)
Net OPEB Liability 53,994,999$ 44,459,272$ 37,000,068$
Sensitivity of the Net OPEB Liability to Changes in Healthcare Cost Trend Rates
The following presents the net OPEB liability of the City, as well as what the City’s net OPEB liability would be if it were calculated using healthcare cost trend rates that are 1-percentage point lower (5.0%/5.5% decreasing to 5.0%) or 1-percentage point higher (7.0%/7.5% decreasing to 6.0%) than the current healthcare cost trend rates:
Current Healthcare 1% Decrease Cost Trend Rates 1% Increase(5.0%/5.5% (6.0%/6.5% (7.0%/7.5%
decreasing to 4.0%) decreasing to 5.0%) decreasing to 6.0%)Net OPEB Liability 35,940,523$ 44,459,272$ 55,588,733$
D. OPEB Expense and Deferred Outflows/Inflows of Resources Related to OPEB
For the year ended June 30, 2019, the City recognized OPEB expense of $7,404,073. At June 30, 2019, the City reported deferred outflows of resources and deferred inflows of resources related to OPEB from the following sources:
Deferred DeferredOutflows Inflows
of Resources of ResourcesOPEB contributions subsequent to measurement date 1,429,551$ -$ Change in assumptions 14,269,847 -
Differences between projected and actual earnings - (99,213)
Total 15,699,398$ (99,213)$
City of San Gabriel
Notes to Basic Financial Statements, Continued
June 30, 2019
75
NOTE 9 - OTHER POST-EMPLOYMENT BENEFITS (OPEB) PLAN (CONTINUED)
D. OPEB Expense and Deferred Outflows/Inflows of Resources Related to OPEB (Continued)
$1,429,551 reported as deferred outflows of resources related to contributions subsequent to the measurement date will be recognized as a reduction of the net OPEB liability in the year ending June 30, 2020. Other amounts reported as deferred outflows of resources and deferred inflows of resources related to OPEB will be recognized as OPEB expense as follows:
YearEnding
June 30, Amount2020 4,726,590$ 2021 4,726,590 2022 4,726,588 2023 (9,134) 2024 -
Thereafter -
E. Payable to the OPEB Plan
At June 30, 2019, the City had no outstanding amount of contributions to the OPEB plan required for the year ended June 30, 2019.
NOTE 10 - RISK MANAGEMENT
Description of Self-Insurance Pool Pursuant to Joint Powers Agreement
The City of San Gabriel is a member of the California Joint Powers Insurance Authority (Authority). The Authority is composed of 116 California public entities and is organized under a joint powers agreement pursuant to California Government Code §6500 et seq. The purpose of the Authority is to arrange and administer programs for the pooling of self-insured losses, to purchase excess insurance or reinsurance, and to arrange for group purchased insurance for property and other lines of coverage. The Authority began covering claims of its members in 1978. Each member government has an elected official as its representative on the Board of Directors. The Board operates through a nine-member Executive Committee.
Primary Self-Insurance Programs of the Authority
Each member pays an annual contribution at the beginning of the coverage period. A retrospective adjustment is then conducted annually thereafter, for coverage years 2012-13 and prior. Coverage years 2013-14 and forward are not subject to routine annual retrospective adjustment. The total funding requirement for primary self-insurance programs is based on an actuarial analysis. Costs are allocated to individual agencies based on payroll and claims history, relative to other members of the risk-sharing pool.
City of San Gabriel
Notes to Basic Financial Statements, Continued
June 30, 2019
76
NOTE 10 - RISK MANAGEMENT (CONTINUED)
Primary Self-Insurance Programs of the Authority (Continued)
Primary Liability Program
Claims are pooled separately between police and general government exposures. (1) The payroll of each member is evaluated relative to the payroll of other members. A variable credibility factor is determined for each member, which establishes the weight applied to payroll and the weight applied to losses within the formula. (2) The first layer of losses includes incurred costs up to $30,000 for each occurrence and is evaluated as a percentage of the pool’s total incurred costs within the first layer. (3) The second layer of losses includes incurred costs from $30,000 to $750,000 for each occurrence and is evaluated as a percentage of the pool’s total incurred costs within the second layer. (4) Incurred costs from $750,000 to $50 million, are distributed based on the outcome of cost allocation within the first and second loss layers. The overall coverage limit for each member, including all layers of coverage, is $50 million per occurrence. Subsidence losses have a sub-limit of $40 million per occurrence. The coverage structure includes retained risk that is pooled among members, reinsurance, and excess insurance. More detailed information about the various layers of coverage is available on the following website: https://cjpia.org/protection/coverage-programs. Primary Workers’ Compensation Program
Claims are pooled separately between public safety (police and fire) and general government exposures. (1) The payroll of each member is evaluated relative to the payroll of other members. A variable credibility factor is determined for each member, which establishes the weight applied to payroll and the weight applied to losses within the formula. (2) The first layer of losses includes incurred costs up to $50,000 for each occurrence and is evaluated as a percentage of the pool’s total incurred costs within the first layer. (3) The second of losses includes incurred costs from $50,000 to $100,000 for each occurrence and is evaluated as a percentage of the pool’s total incurred costs within the second layer. (4) Incurred costs in excess from $100,000 to statutory limits are distributed based on the outcome of cost allocation within the first and second loss layers.
For 2018-19 the Authority’s pooled retention is $2 million per occurrence, with reinsurance to statutory limits under California Workers’ Compensation Law. Employer’s Liability losses are pooled among members to $2 million. Coverage from $2 million to $5 million is purchased as part of a reinsurance policy, and Employer’s Liability losses from $5 million to $10 million are pooled among members.
Crime Insurance
The City of San Gabriel purchases crime insurance coverage in the amount of "Non Participant" with a "Non Participant" deductible. The fidelity coverage is provided through the Authority.
City of San Gabriel
Notes to Basic Financial Statements, Continued
June 30, 2019
77
NOTE 10 - RISK MANAGEMENT (CONTINUED)
Purchased Insurance
Pollution Legal Liability Insurance
The City of San Gabriel participates in the pollution legal liability insurance program which is available through the Authority. The policy covers sudden and gradual pollution of scheduled property, streets, and storm drains owned by the City of San Gabriel. Coverage is on a claims-made basis. There is a $50,000 deductible. The Authority has an aggregate limit of $50 million for the 3-year period from July 1, 2017 through July 1, 2020. Each member of the Authority has a $10 million sub-limit during the 3-year term of the policy.
Property Insurance
The City of San Gabriel participates in the all-risk property protection program of the Authority. This insurance protection is underwritten by several insurance companies. The City of San Gabriel’s property is currently insured according to a schedule of covered property submitted by the City of San Gabriel to the Authority. The City of San Gabriel’s property currently has all-risk property insurance protection in the amount of $35,189,205. There is a $10,000 deductible per occurrence except for non-emergency vehicle insurance, which has $2,500 deductible.
Adequacy of Protection
During the past three fiscal years, none of the above programs of protection experienced settlements or judgments that exceeded pooled or insured coverage. There were also no significant reductions in pooled or insured liability coverage in 2018-19.
Reconciliation of Changes in Aggregate Liabilities Reconciliation of the changes in the City’s aggregate liabilities for the years ended June 30, 2019 and 2018 is as follows:
Liability Claims and Liability
Beginning Changes in Claims End
of Year Estimates Payments of Year
2019:
Liability claims 154,827$ 1,415,847$ (1,232,469)$ 338,205$
Workers' compensation 1,665,642 1,175,322 (1,691,097) 1,149,867
1,820,469$ 2,591,169$ (2,923,566)$ 1,488,072$
2018:
Liability claims 165,029$ 338,114$ (348,316)$ 154,827$
Workers' compensation 1,485,321 1,984,104 (1,803,783) 1,665,642
1,650,350$ 2,322,218$ (2,152,099)$ 1,820,469$
As of June 30, 2019, the total claims liability of $1,488,072 includes $841,908 of claims from when the City was self-insured and was not a part of the California Joint Powers Insurance Authority.
City of San Gabriel
Notes to Basic Financial Statements, Continued
June 30, 2019
78
NOTE 11 - CONSTRUCTION COMMITMENTS
The following material construction commitments existed at June 30, 2019:
Expenditures
as of Remaining
June 30, 2019 Commitments
Project Name:
Great Streets Program 2,164,494$ 2,677,094$
Dewey/Brighton Sewer Upgrade - 1,405,015
Del Mar Sewer Upgrade 43,180 1,197,532
Del Mar/Alhambra Wash Bridge Replacement 412,601 1,143,376
Broadway/Walnut Grove Intersection Imp. 13,255 938,746
San Gabriel Bl Sewer Imp - Wells/Angeleno 24,578 622,480
Police Facility 52,387 542,568
Intersection Safety Improvement (HSIP) 41,890 527,910
Sewer Master Plan Update - 500,000
Storm Drain Catch Basin Inserts 7,972 481,673
Citywide Bridge Repair 39,000 451,925
Las Tunas Sewer Rehabilitation - 377,877
San Gabriel Bl Sewer Imp - Dewey/Wells 12,140 333,218
San Gabriel Bl - Roses Rd Crosswalk (HSIP) 17,277 252,923
Vincent Lugo Park Renovation Phase II 14,594 243,188
Station 52 Upgrade 278,177 236,958
Traffic Signal - SG Blvd at Commercial 5,184 229,816
Las Tunas Rehab SG Muscatel - 125,521
Sewer Lift Station SCADA System - 85,000
School and Ped. Safety Facilities 22,474 84,298
Vincent Lugo Park Equipment - 61,006
Smith Park Facility - 59,372
Traffic Signal Upgrade Program 548 59,176
Citywide Series Street Light Retrofit - 49,008
City Hall Refurbishment & Remodeling 27,230 13,275
Sewer Manhole Rehabilitation Program - 12,280
Various smaller projects 350,769 898,373
Total 3,527,749$ 13,609,608$
City of San Gabriel
Notes to Basic Financial Statements, Continued
June 30, 2019
79
NOTE 12 - CLASSIFICATION OF NET POSITION AND FUND BALANCES
Fund Balances
Fund balances are presented in the following categories: nonspendable, restricted, committed, assigned and unassigned (see Note 1N for a description of these categories). A detailed schedule of fund balances at June 30, 2019, is as follows:
Development OtherGeneral Impact Other Sewer Governmental
Fund Retirement Fees Measure R Grants Assessment Funds TotalRestricted:
Debt service 6,651,667$ -$ -$ -$ -$ -$ -$ 6,651,667$ Community services - - 721,953 - - - 146,977 868,930 Public safety - - 639,773 - - - 400,632 1,040,405 Future retirement benefits
payments - 1,636,461 - - - - - 1,636,461 Sewer service and capital
improvements - - 1,954,325 - - 5,557,294 - 7,511,619 Street improvements - - 1,892,179 1,402,312 - - 5,388,265 8,682,756 Waste management
programs - - - - - - 1,519,562 1,519,562 Neighborhood improvement
and rehabilitation - - - - 680,510 - - 680,510 Total Restricted 6,651,667 1,636,461 5,208,230 1,402,312 680,510 5,557,294 7,455,436 28,591,910
Committed to:Automation & engineering
consultant services 20,856 - - - - - - 20,856 Total Committed 20,856 - - - - - - 20,856
Unassigned (8,507,373) - - - - - (248,307) (8,755,680)
Total Fund Balances (1,834,850)$ 1,636,461$ 5,208,230$ 1,402,312$ 680,510$ 5,557,294$ 7,207,129$ 19,857,086$
Special Revenue Funds
City of San Gabriel
Notes to Basic Financial Statements, Continued
June 30, 2019
80
NOTE 12 - CLASSIFICATION OF NET POSITION AND FUND BALANCES (CONTINUED)
Net Position
Net position is presented in the following categories: net investment in capital assets, restricted, and unrestricted (see Note 1M for a description of these categories). A detailed schedule of net position at June 30, 2019, is as follows:
Governmental
Activities
Net investment in capital assets:
Total capital assets,
net of accumulated depreciation 134,625,637$
Less: total capital related debt (9,783,925)
Plus: loan proceeds receivable 211,408
Net investment in capital assets 125,053,120
Restricted for:
Debt service 6,651,667
Community services 868,930
Public safety 1,040,405
Retirement benefits 1,636,461
Sewer service 7,511,619
Street improvements 8,471,348
Waste management programs 1,519,562
Neighborhood improvement and rehabilitation 680,510
Total restricted net position 28,380,502
Unrestricted (93,411,558)
Total Net Position 60,022,064$
City of San Gabriel
Notes to Basic Financial Statements, Continued
June 30, 2019
81
NOTE 13 - UNCERTAINTIES
The General Fund is the focal point in analyzing the financial health of the City as the General Fund is expected to act as a financial backstop for other funds in the event of an insufficiency in those funds. For fiscal year 2015-16, 2016-17 and 2017-18, the General Fund’s expenditures have exceeded revenues by $6,647,156, $2,627,559 and $4,783,046, respectively, resulting in a deficit fund balance of $2,591,569 as of June 30, 2018. During fiscal year 2018-19, the General Fund had a positive change in fund balance $756,719 that decreased the fund deficit to $1,834,850 as of June 30, 2019. The General Fund has liquidity problems and needed to borrow cash from other funds in fiscal year 2016-17, 2017-18, and 2018-19 totaling $6,289,979, $10,749,859, and $9,523,370, respectively. The General Fund did not have the ability to provide any resources to other funds in fiscal year 2018-19. In response to the City’s financial condition, during fiscal year 2018-19, the City eliminated or delayed capital improvement projects funded by the General Fund, transferred capital improvement related expenditures from the General Fund to other funds when the expenditures were an allowable use of those other funds, and eliminated General Fund’s contributions for future equipment replacement. The City also adopted modifications to the Municipal Code for purchasing and business license provisions, revised and updated the Citywide Fee Schedule, and adopted an Interfund Borrowing Policy. In addition, the City has approved a series of policies to improve budgeting and financial reporting including the adoption of a Fiscal Sustainability Policy and a revised Fund Balance Policy that establishes a tiered approach to growing the General Fund’s reserves to 17% by June 20, 2028. Beginning in fiscal year 2019-20, the budget for revenues was estimated more conservatively, but realistically, and for expenditures was based on actual known costs and historical data. The fiscal year 2019-20 operating budget was adopted with revenues slightly in excess of expenditure appropriations. The City expects the General Fund’s revenues to grow as a third major hotel is scheduled to open in fiscal year 2020-21, which will increase transient occupancy taxes revenue, and the City’s assessed property valuation reflects an increase of over 7%, which will increase property taxes revenue in the General Fund as well as the Retirement Special Revenue Fund. The City has also adopted provisions to place a sales tax measure on the March 2020 election’s ballot for voter consideration that, if approved, will generate approximately $3.4 million of revenue to the General Fund beginning fiscal year 2020-21. If the above actions prove insufficient in balancing the City’s budget and replenishing the General Fund’s fund balance, the City Council, City Manager, and executive team are prepared to adjust the budget for expenditures accordingly.
NOTE 14 - SUBSEQUENT EVENTS
In preparing these financial statements, the City has evaluated events and transactions for potential recognition or disclosure through December 20, 2019, the date the financial statements were available to be issued.
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REQUIRED SUPPLEMENTARY INFORMATION
City of San Gabriel
Schedule of Proportionate Share of the Net Pension Liability - Miscellaneous
Last Ten Fiscal Years*
Fiscal year ended June 30, 2019 June 30, 2018 June 30, 2017 June 30, 2016 June 30, 2015
Measurement period June 30, 2018 June 30, 2017 June 30, 2016 June 30, 2015 June 30, 2014
Plan's proportion of the
net pension liability 0.18497% 0.18514% 0.18891% 0.19831% 0.17884%
Plan's proportionate share
of the net pension liability 17,824,500$ 18,360,499$ 16,346,939$ 13,611,684$ 11,128,292$
Plan's covered payroll 6,578,458$ 6,407,196$ 6,137,547$ 5,530,560$ 5,152,007$
Plan's proportionate share
of the net pension liability as a
percentage of covered payroll 270.95% 286.56% 266.34% 246.12% 216.00%
Plan's proportionate share of the
fiduciary net position as a
percentage of the Plan's total
pension liability 75.26% 73.31% 74.06% 78.40% 76.48%
Plan's proportionate share of
aggregate employer contributions 1,669,141$ 1,556,141$ 1,414,990$ 1,351,495$ 1,108,270$
Notes to Schedule:
Benefit Changes:
There were no changes in benefits.
Changes in Assumptions:
From fiscal year June 30, 2015 to June 30, 2016:
From fiscal year June 30, 2016 to June 30, 2017:
There were no changes in assumptions.
From fiscal year June 30, 2017 to June 30, 2018:
The discount rate was reduced from 7.65% to 7.15%.
From fiscal year June 30, 2018 to June 30, 2019:
There were no significant changes in assumptions.
* Fiscal year 2015 was the 1st year of implementation, therefore only five years are shown.
GASB 68, paragraph 68 states that the long-term expected rate of return should be determined net of pension plan investment
expense but without reduction for pension plan administrative expense. The discount rate of 7.50% used for the June 30, 2014
measurement date was net of administrative expenses. The discount rate of 7.65% used for the June 30, 2015 measurement date
is without reduction of pension plan administrative expense.
84
City of San Gabriel
Schedule of Contributions - Defined Benefit Pension Plans - Miscellaneous
Last Ten Fiscal Years*
Fiscal year ended June 30, 2019 June 30, 2018 June 30, 2017 June 30, 2016 June 30, 2015
Contractually required contribution
(actuarially determined) 2,033,491$ 1,806,091$ 1,695,780$ 1,569,998$ 1,136,914$
Contributions in relation to
the actuarially determined
contributions (2,033,491) (1,806,091) (1,695,780) (1,569,998) (1,136,914)
Contribution deficiency (excess) -$ -$ -$ -$ -$
Covered payroll 6,901,477$ 6,578,458$ 6,407,196$ 6,137,547$ 5,530,560$
Contributions as a percentage of
covered payroll 29.46% 27.45% 26.47% 25.58% 20.56%
Notes to Schedule:
Valuation Date 6/30/2016 6/30/2015 6/30/2014 6/30/2013 6/30/2012
Methods and Assumptions Used to Determine Contribution Rates:
Actuarial cost method Entry age Entry age Entry age Entry age Entry age
Amortization method (1) (1) (1) (1) (1)
Asset valuation method Market Value Market Value Market Value Market Value 15 Year
Smoothed
Market Method
Inflation 2.75% 2.75% 2.75% 2.75% 2.75%
Salary increases (2) (2) (2) (2) (2)
Investment rate of return 7.375% (3) 7.50% (3) 7.50% (3) 7.50% (3) 7.50% (3)
Retirement age (4) (4) (4) (4) (4)
Mortality (5) (5) (5) (5) (5)
(1) Level percentage of payroll, closed
(2) Depending on age, service, and type of employment
(3) Net of pension plan investment expense, including inflation
(4) 50 years (2.7% @ 55 and 2% @ 60) and 52 years (2% @ 62)
(5) Mortality assumptions are based on mortality rates resulting from the most recent CalPERS Experience Study
adopted by the CalPERS Board.
* Fiscal year 2015 was the 1st year of implementation, therefore only five years are shown.
85
City of San Gabriel
Schedule of Proportionate Share of the Net Pension Liability - Safety
Last Ten Fiscal Years*
Fiscal year ended June 30, 2019 June 30, 2018 June 30, 2017 June 30, 2016 June 30, 2015
Measurement period June 30, 2018 June 30, 2017 June 30, 2016 June 30, 2015 June 30, 2014
Plan's proportion of the
net pension liability 0.51328% 0.49713% 0.50881% 0.53055% 0.51986%
Plan's proportionate share
of the net pension liability 49,460,962$ 49,301,554$ 44,027,527$ 36,416,665$ 32,348,126$
Plan's covered payroll 8,694,792$ 7,901,890$ 7,697,142$ 7,854,454$ 7,572,009$
Plan's proportionate share
of the net pension liability as a
percentage of covered payroll 568.86% 623.92% 572.00% 463.64% 427.21%
Plan's proportionate share of the
fiduciary net position as a
percentage of the Plan's total
pension liability 75.26% 73.30% 74.06% 78.40% 76.12%
Plan's proportionate share of
aggregate employer contributions 4,493,825$ 3,551,186$ 3,297,274$ 3,314,579$ 2,853,651$
Notes to Schedule:
Benefit Changes:
There were no changes in benefits.
Changes in Assumptions:
From fiscal year June 30, 2015 to June 30, 2016:
From fiscal year June 30, 2016 to June 30, 2017:
There were no changes in assumptions.
From fiscal year June 30, 2017 to June 30, 2018:
The discount rate was reduced from 7.65% to 7.15%.
From fiscal year June 30, 2018 to June 30, 2019:
There were no significant changes in assumptions.
* Fiscal year 2015 was the 1st year of implementation, therefore only five years are shown.
GASB 68, paragraph 68 states that the long-term expected rate of return should be determined net of pension plan investment
expense but without reduction for pension plan administrative expense. The discount rate of 7.50% used for the June 30, 2014
measurement date was net of administrative expenses. The discount rate of 7.65% used for the June 30, 2015 measurement date
is without reduction of pension plan administrative expense.
86
City of San Gabriel
Schedule of Contributions - Defined Benefit Pension Plans - Safety
Last Ten Fiscal Years*
Fiscal year ended June 30, 2019 June 30, 2018 June 30, 2017 June 30, 2016 June 30, 2015
Contractually required contribution
(actuarially determined) 4,883,007$ 4,444,968$ 3,956,628$ 3,626,414$ 2,991,604$
Contributions in relation to
the actuarially determined
contributions (4,883,007) (4,444,968) (3,956,628) (3,626,414) (2,991,604)
-$ -$ -$ -$ -$
Contribution deficiency (excess)
8,382,275$ 8,694,792$ 7,901,890$ 7,697,142$ 7,854,454$
Covered payroll
Contributions as a percentage of 58.25% 51.12% 50.07% 47.11% 38.09%
covered payroll
Notes to Schedule:
Valuation Date 6/30/2016 6/30/2015 6/30/2014 6/30/2013 6/30/2012
Methods and Assumptions Used to Determine Contribution Rates:
Actuarial cost method Entry age Entry age Entry age Entry age Entry age
Amortization method (1) (1) (1) (1) (1)
Asset valuation method Market Value Market Value Market Value Market Value 15 Year
Smoothed
Market Method
Inflation 2.75% 2.75% 2.75% 2.75% 2.75%
Salary increases (2) (2) (2) (2) (2)
Investment rate of return 7.375% (3) 7.50% (3) 7.50% (3) 7.50% (3) 7.50% (3)
Retirement age (4) (4) (4) (4) (4)
Mortality (5) (5) (5) (5) (5)
(1) Level percentage of payroll, closed
(2) Depending on age, service, and type of employment
(3) Net of pension plan investment expense, including inflation
(4) 50 years (3%@50, 2%@50, and 2.7%@57)
(5) Mortality assumptions are based on mortality rates resulting from the most recent CalPERS Experience Study
adopted by the CalPERS Board.
* Fiscal year 2015 was the 1st year of implementation, therefore only five years are shown.
87
City of San Gabriel
Schedule of Changes in the Net OPEB Liability and Related Ratios
Last Ten Fiscal Years*
Fiscal year end June 30, 2019 June 30, 2018
Measurement date June 30, 2018 June 30, 2017
Total OPEB Liability:
Service cost 955,322$ 892,825$
Interest on total OPEB liability 2,072,875 1,955,646
Changes of assumptions 19,026,463 -
Benefit payments (1,299,620) (1,172,916)
Net Change in Total OPEB Liability 20,755,040 1,675,555
Total OPEB Liability - Beginning of Year 29,306,985 27,631,430
Total OPEB Liability - End of Year (a) 50,062,025 29,306,985
Plan Fiduciary Net Position:
Contributions - employer 1,412,519 2,063,381
Net investment income 405,826 401,794
Benefit payments (1,299,620) (1,172,916)
Administrative expense (2,710) (2,039)
Other expense (6,740) -
Net Change in Plan Fiduciary Net Position 509,275 1,290,220
Plan Fiduciary Net Position - Beginning of Year 5,093,478 3,803,258
Plan Fiduciary Net Position - End of Year (b) 5,602,753 5,093,478
Net OPEB Liability - Ending (a)-(b) 44,459,272$ 24,213,507$
Plan fiduciary net position as a percentage of the
total OPEB liability 11.19% 17.38%
Covered - employee payroll 15,273,250$ 14,309,086$
Net OPEB liability as percentage of
covered - employee payroll 291.09% 169.22%
Notes to Schedule:
Benefit Changes:
Changes in Assumptions:
From fiscal year June 30, 2018 to June 30, 2019:
The discount rate decreased from 7.00% to 3.78%.
* Fiscal year 2018 was the first year of implementation; therefore, only two years are shown.
There were no changes in benefits.
88
City of San Gabriel
Schedule of Contributions - OPEB
Last Ten Fiscal Years*
Fiscal year ended June 30, 2019 June 30, 2018
Actuarially determined contribution 3,521,938$ 3,486,951$
Contributions in relation to the actuarially determined contributions (1,429,551) (1,412,518)
Contribution deficiency (excess) 2,092,387$ 2,074,433$
Covered - employee payroll 15,283,752$ 15,273,250$
Contributions as a percentage of covered - employee payroll 9.35% 9.25%
Notes to Schedule:
Valuation Date 6/30/2017 6/30/2017
Methods and Assumptions Used to Determine Contribution Rates:
Single and agent employers Entry age normal
Amortization method Level percent of pay, closed 20 year period
Asset valuation method Market value
Inflation 2.75%
Medical trend rates HMO - 6.00% in 2018, decreasing to 5.00% in 2022 and later
PPO - 6.50% in 2018, decreasing to 5.00% in 2021 and later
Salary increases 3.00%
Investment rate of return 7.00%
Retirement age
Mortality rate
* Fiscal year 2018 was the first year of implementation; therefore, only two years are shown.
According to the retirement rates under the most recent CalPERS pension plan
experience study.
According to the pre-retirement and post-retirement mortality rates under the
CalPERS pension plan updated to reflect the most recent experience study.
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City of San Gabriel
Budgetary Comparison Schedule
General Fund
For the year ended June 30, 2019
Variance with
Final Budget
Original Final Positive
Budget Budget Actual (Negative)
REVENUES:
Taxes 19,802,000 24,479,068$ 23,310,253$ (1,168,815)$
Intergovernmental 5,142,849 609,946 596,840 (13,106)
Charges for services 4,266,067 4,266,067 3,386,112 (879,955)
Fines and forfeitures 1,135,000 1,135,000 910,570 (224,430)
Licenses and permits 3,286,500 3,286,500 2,280,570 (1,005,930)
Investment income 424,400 424,400 127,855 (296,545)
Other 382,000 383,098 204,579 (178,519)
Total revenues 34,438,816 34,584,079 30,816,779 (3,767,300)
EXPENDITURES:
General government:
City council 246,966 254,401 239,322 15,079
City clerk:
City clerk 455,021 455,021 437,745 17,276
Elections 43,372 43,372 41,841 1,531
Administration:
City manager 479,023 474,526 458,733 15,793
Public information 146,662 143,723 134,995 8,728
City attorney 298,200 298,200 277,489 20,711
Finance:
City treasurer 220,983 220,983 188,744 32,239
Finance 1,336,441 1,288,441 1,296,839 (8,398)
Information technology 360,404 360,404 292,710 67,694
Purchasing 244,269 244,269 212,487 31,782
General services 156,135 108,135 103,453 4,682
Human resources 784,990 784,990 1,002,952 (217,962)
Non-departmental 263,000 1,858,835 1,568,580 290,255
Total general government 5,035,466 6,535,300 6,255,890 279,410
Public safety:
Police 14,323,947 14,208,287 13,177,227 1,031,060
Fire 8,788,598 8,601,598 8,328,749 272,849
Total public safety 23,112,545 22,809,885 21,505,976 1,303,909
Community development:
Administration 575,711 527,711 525,055 2,656
Planning 595,376 595,376 421,720 173,656
Building and safety 1,188,105 1,188,106 1,027,543 160,563
Neighborhood improvement 353,677 353,677 312,840 40,837
Economic development 342,466 358,965 323,478 35,487
Total community development 3,055,335 3,023,835 2,610,636 413,199
(Continued)
See accompanying note to required supplementary information. 91
City of San Gabriel
Budgetary Comparison Schedule, Continued
General Fund
For the year ended June 30, 2019
Variance with
Final Budget
Original Final Positive
Budget Budget Actual (Negative)
EXPENDITURES, CONTINUED:
Community services:
Administration 832,790$ 832,790$ 832,713$ 77$
Aquatics 149,413 149,413 140,026 9,387
Community facilities 144,526 175,610 160,376 15,234
Recreation 378,663 454,261 480,638 (26,377)
Total community services 1,505,392 1,612,074 1,613,753 (1,679)
Public works:
Administration 1,759,097 1,759,099 1,339,261 419,838
Street services 1,216,857 1,168,857 1,336,367 (167,510)
Stormwater management 185,000 185,000 42,802 142,198
Park maintenance 1,163,935 1,076,962 957,731 119,231
Aquatic facilities 93,470 93,470 65,584 27,886
Facilities 262,202 263,484 266,836 (3,352)
Engineering 568,135 568,135 620,738 (52,603)
Total public works 5,248,696 5,115,007 4,629,319 485,688
Capital outlay 156,000 603,397 358,339 245,058
Debt service:
Principal payments 260,000 260,000 260,000 -
Interest and fiscal charges 122,000 122,000 110,187 11,813
Total debt service 382,000 382,000 370,187 11,813
Total expenditures 38,495,434 40,081,498 37,344,100 2,737,398
EXCESS OF REVENUES
UNDER EXPENDITURES (4,056,618) (5,497,419) (6,527,321) (1,029,902)
OTHER FINANCING SOURCES (USES):
Transfers in 6,675,198 8,193,965 7,926,444 (267,521)
Transfers out (761,682) (761,682) (642,404) 119,278
Total other financing sources (uses) 5,913,516 7,432,283 7,284,040 (148,243)
NET CHANGE IN FUND BALANCE 1,856,898 1,934,864 756,719 (1,178,145)
FUND BALANCE:
Beginning of year (2,591,569) (2,591,569) (2,591,569) -
End of year (734,671)$ (656,705)$ (1,834,850)$ (1,178,145)$
See accompanying note to required supplementary information. 92
City of San Gabriel
Budgetary Comparison Schedule
Retirement Special Revenue Fund
For the year ended June 30, 2019
Variance with
Final Budget
Original Final Positive
Budget Budget Actual (Negative)
REVENUES:
Taxes 7,000,000$ 7,000,000$ 7,714,705$ 714,705$
Investment income 35,000 35,000 14,397 (20,603)
Total revenues 7,035,000 7,035,000 7,729,102 694,102
OTHER FINANCING USES:
Transfers out (8,312,928) (8,312,928) (7,994,015) 318,913
NET CHANGE IN FUND BALANCE (1,277,928) (1,277,928) (264,913) 1,013,015
FUND BALANCE:
Beginning of year 1,901,374 1,901,374 1,901,374 -
End of year 623,446$ 623,446$ 1,636,461$ 1,013,015$
See accompanying note to required supplementary information.93
City of San Gabriel
Budgetary Comparison Schedule
Development Impact Fees Special Revenue Fund
For the year ended June 30, 2019
Variance with
Final Budget
Original Final Positive
Budget Budget Actual (Negative)
REVENUES:
Charges for services 1,030,000$ 1,030,000$ 330,947$ (699,053)$
Investment income 45,000 45,000 43,732 (1,268)
Total revenues 1,075,000 1,075,000 374,679 (700,321)
EXPENDITURES:
Capital outlay 300,000 2,066,940 383,835 1,683,105
EXCESS OF REVENUES OVER
(UNDER) EXPENDITURES 775,000 (991,940) (9,156) 982,784
FUND BALANCE:
Beginning of year 5,217,386 5,217,386 5,217,386 -
End of year 5,992,386$ 4,225,446$ 5,208,230$ 982,784$
See accompanying note to required supplementary information.94
City of San Gabriel
Budgetary Comparison Schedule
Measure R Special Revenue Fund
For the year ended June 30, 2019
Variance with
Final Budget
Original Final Positive
Budget Budget Actual (Negative)
REVENUES:
Intergovernmental 450,000$ 450,000$ 512,463$ 62,463$
Investment income 12,000 12,000 10,473 (1,527)
Total revenues 462,000 462,000 522,936 60,936
EXPENDITURES:
Capital outlay - 3,599,637 2,358,115 1,241,522
Debt service:
Principal payments 222,493 222,493 230,280 (7,787)
Interest and fiscal charges 122,507 122,507 113,659 8,848
Total expenditures 345,000 3,944,637 2,702,054 1,242,583
EXCESS OF REVENUES OVER
(UNDER) EXPENDITURES 117,000 (3,482,637) (2,179,118) 1,303,519
FUND BALANCE:
Beginning of year 3,581,430 3,581,430 3,581,430 -
End of year 3,698,430$ 98,793$ 1,402,312$ 1,303,519$
See accompanying note to required supplementary information.95
City of San Gabriel
Budgetary Comparison Schedule
Other Grants Special Revenue Fund
For the year ended June 30, 2019
Variance with
Final Budget
Original Final Positive
Budget Budget Actual (Negative)
REVENUES:
Intergovernmental 803,499$ 2,349,060$ 409,393$ (1,939,667)$
Other - 230,196 20,184 (210,012)
Total revenues 803,499 2,579,256 429,577 (2,149,679)
EXPENDITURES:
Capital outlay 803,499 3,151,266 170,007 2,981,259
EXCESS OF REVENUES OVER
(UNDER) EXPENDITURES - (572,010) 259,570 831,580
FUND BALANCE (DEFICIT):
Beginning of year 420,940 420,940 420,940 -
End of year 420,940$ (151,070)$ 680,510$ 831,580$
See accompanying note to required supplementary information.96
City of San Gabriel
Budgetary Comparison Schedule
Sewer Assessment Special Revenue Fund
For the year ended June 30, 2019
Variance with
Final Budget
Original Final Positive
Budget Budget Actual (Negative)
REVENUES:
Charges for services 2,000,000$ 2,000,000$ 2,000,803$ 803$
Investment income 17,000 17,000 42,536 25,536
Other - - 2,755 2,755
Total revenues 2,017,000 2,017,000 2,046,094 29,094
EXPENDITURES:
Current:
Public works 943,636 1,017,911 678,960 338,951
Capital outlay 1,408,500 4,716,842 170,247 4,546,595
Total expenditures 2,352,136 5,734,753 849,207 4,885,546
EXCESS OF REVENUES OVER
(UNDER) EXPENDITURES (335,136) (3,717,753) 1,196,887 4,914,640
FUND BALANCE:
Beginning of year 4,360,407 4,360,407 4,360,407 -
End of year 4,025,271$ 642,654$ 5,557,294$ 4,914,640$
See accompanying note to required supplementary information.97
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City of San Gabriel
Note to Required Supplementary Information
June 30, 2019
99
NOTE 1 - BUDGETARY INFORMATION
The City adheres to the following general procedures in establishing its annual budget, which is reflected in the accompanying basic financial statements:
The annual budget adopted by the City Council provides for the general operations of the City. It includes proposed expenditures and the means of financing them. Budgeted remaining appropriations lapse at the end of the fiscal year.
The City Council approves total budgeted appropriations and amendments to appropriations throughout the year. The City Council must approve budget appropriation transfers between departments within a fund. The departments of the General Fund are considered to be departments for purposes of this requirement. Actual expenditures for the General Fund may not legally exceed budgeted appropriations at the department level. Actual expenditures for all other funds may not legally exceed budgeted appropriations at the fund level.
Annual budgets are adopted for all Governmental Fund Types on a basis substantially consistent with Generally Accepted Accounting Principles (GAAP).
Formal budgetary information is employed as a management control device. Commitments for materials and services, such as purchase orders and contracts are recorded during the year as encumbrances to assist in controlling expenditures. Appropriations, which are encumbered at year end, lapse and then are added to the following year’s budgeted appropriations. However, encumbrances at year-end are reported as committed fund balance.
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SUPPLEMENTARY INFORMATION
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OTHER GOVERNMENTAL FUNDS
SPECIAL REVENUE FUNDS
(Non-Major Programs)
Proposition A Local Return Fund
To account for the City's share of the half-cent sales tax. These funds are used for local transit. Citizens Option for Public Safety Fund
To account for the revenues received from the California Department of Justice to be used to enhance existing law enforcement services.
Parks and Recreation Activity Fund
To account for revenues and expenditures for the City's recreation programs provided through contract services.
Mission Playhouse/Facility Fund
To account for monies paid by facility clients and to assure that they are set aside for operation,
maintenance and improvement to the Mission Playhouse.
Air Quality Management District Fund
To account for revenues received from the Air Quality Management District for the improvement of
air quality.
Narcotic Seizure Fund
To account for revenues seized by the Police Department during narcotics investigations.
Proposition C Local Return Fund
To account for monies received from an allocation of sales tax revenue restricted to fund local
transportation related activities in accordance with Proposition C regulations.
Street Light Fund
To account for fees collected from new developments. These funds are used for the construction of
street lights in certain areas of the City.
Office of Traffic Safety Grant Fund
To account for the revenues from the California Office of Traffic Safety to be used towards a
comprehensive traffic safety program.
Community Development Block Grant Fund
To account for funds from the Community Development Block Grant for neighborhood improvement and rehabilitation purposes.
Waste Management Fund
To account for the collection of a waste surcharge from consumers to finance waste management
programs.
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OTHER GOVERNMENTAL FUNDS
SPECIAL REVENUE FUNDS (CONTINUED)
(Non-Major Programs)
State Gas Tax Fund
To account for the City’s share of state and county gasoline tax allocation. These funds are expended on street maintenance and construction.
Road Maintenance and Rehabilitation Fund
To account for the City’s share of the SB1 allocation. These funds are expended on street maintenance and construction.
Measure M Fund To account for monies received from an allocation of sales tax revenue restricted to fund local
transportation related activities in accordance with Measure M guidelines.
City of San Gabriel
Combining Balance Sheet
Other Governmental Funds
June 30, 2019
Citizens
Option for
Proposition A Public
Local Return Safety
ASSETS
Cash and investments 1,093,621$ -$
Accounts receivable - -
Interest receivable 3,559 -
Due from other funds - -
Due from other governments - 55,948
Total assets 1,097,180$ 55,948$
LIABILITIES AND FUND BALANCES
Liabilities:
Accounts payable 32,572$ -$
Accrued liabilities 1,853 3,330
Due to other funds - 77,082
Deposits payable - -
Total liabilities 34,425 80,412
Fund Balances (Deficits):
Restricted 1,062,755 -
Unassigned - (24,464)
Total fund balances (deficits) 1,062,755 (24,464)
Total liabilities and fund balances 1,097,180$ 55,948$
Special Revenue Funds
106
Air
Parks and Mission Quality
Recreation Playhouse/ Management Narcotic Proposition C Street
Activity Facility District Seizure Local Return Light
170,215$ -$ 168,083$ 392,430$ 1,733,902$ 54,719$
- 2,070 - - - -
- - 547 1,277 5,642 -
- - - - - -
- - 13,760 - - -
170,215$ 2,070$ 182,390$ 393,707$ 1,739,544$ 54,719$
20,052$ 70,186$ -$ -$ 19,800$ -$
3,189 13,729 - - 2,540 -
- 117,888 - - - -
- 24,110 - - - -
23,241 225,913 - - 22,340 -
146,974 - 182,390 393,707 1,717,204 54,719
- (223,843) - - - -
146,974 (223,843) 182,390 393,707 1,717,204 54,719
170,215$ 2,070$ 182,390$ 393,707$ 1,739,544$ 54,719$
(Continued)
Special Revenue Funds (Continued)
107
City of San Gabriel
Combining Balance Sheet, Continued
Other Governmental Funds
June 30, 2019
Office of
Traffic Community
Safety Development
Grant Block Grant
ASSETS
Cash and investments 3,131$ -$
Accounts receivable - 15,550
Interest receivable - -
Due from other funds - -
Due from other governments 3,794 362,868
Total assets 6,925$ 378,418$
LIABILITIES AND FUND BALANCES
Liabilities:
Accounts payable -$ 311,005$
Accrued liabilities - 4,182
Due to other funds - 63,228
Deposits payable - -
Total liabilities - 378,415
Fund Balances (Deficits):
Restricted 6,925 3
Unassigned - -
Total fund balances (deficits) 6,925 3
Total liabilities and fund balances 6,925$ 378,418$
Special Revenue Funds (Continued)
108
Road Total
Maintenance Other
Waste State Gas and Governmental
Management Tax Rehabilitation Measure M Funds
799,946$ 1,699,223$ 155,012$ 577,467$ 6,847,749$
52,879 - - - 70,499
- 5,529 504 2,014 19,072
781,568 - - - 781,568
- - 133,924 - 570,294
1,634,393$ 1,704,752$ 289,440$ 579,481$ 8,289,182$
114,831$ 117,418$ -$ 85,058$ 770,922$
- - - - 28,823
- - - - 258,198
- - - - 24,110
114,831 117,418 - 85,058 1,082,053
1,519,562 1,587,334 289,440 494,423 7,455,436
- - - - (248,307)
1,519,562 1,587,334 289,440 494,423 7,207,129
1,634,393$ 1,704,752$ 289,440$ 579,481$ 8,289,182$
Special Revenue Funds (Continued)
109
City of San Gabriel
Combining Statement of Revenues, Expenditures and Changes in Fund Balances
Other Governmental Funds
For the year ended June 30, 2019
Citizens
Option for
Proposition A Public
Local Return Safety
REVENUES:
Intergovernmental 823,522$ 204,694$
Charges for services - -
Investment income 11,378 -
Other - -
Total revenues 834,900 204,694
EXPENDITURES:
Current:
Public safety - 151,635
Community development - -
Community services - -
Public works 453,066 -
Capital outlay - -
Total expenditures 453,066 151,635
EXCESS OF REVENUES OVER
(UNDER) EXPENDITURES 381,834 53,059
OTHER FINANCING SOURCES:
Transfers in - -
Total other financing sources - -
NET CHANGE IN FUND BALANCES 381,834 53,059
FUND BALANCES (DEFICITS):
Beginning of year 680,921 (77,523)
End of year 1,062,755$ (24,464)$
Special Revenue Funds
110
Air
Parks and Mission Quality
Recreation Playhouse/ Management Narcotic Proposition C Street
Activity Facility District Seizure Local Return Light
-$ 6,340$ 53,076$ 66,016$ 683,088$ -$
193,411 586,913 - - - -
- - 1,294 3,108 13,444 -
385 30,263 - - - -
193,796 623,516 54,370 69,124 696,532 -
- - - - - -
- - - - - -
185,413 1,333,491 - - - -
- - - - 93,983 -
- - 27,325 - 75,979 -
185,413 1,333,491 27,325 - 169,962 -
8,383 (709,975) 27,045 69,124 526,570 -
- 709,975 - - - -
- 709,975 - - - -
8,383 - 27,045 69,124 526,570 -
138,591 (223,843) 155,345 324,583 1,190,634 54,719
146,974$ (223,843)$ 182,390$ 393,707$ 1,717,204$ 54,719$
(Continued)
Special Revenue Funds (Continued)
111
City of San Gabriel
Combining Statement of Revenues, Expenditures and Changes in Fund Balances, Continued
Other Governmental Funds
For the year ended June 30, 2019
Office of
Traffic Community
Safety Development
Grant Block Grant
REVENUES:
Intergovernmental 34,542$ 459,578$
Charges for services - -
Investment income - -
Other - -
Total revenues 34,542 459,578
EXPENDITURES:
Current:
Public safety 28,541 -
Community development - 74,174
Culture and recreation - 50,579
Transportation - -
Capital outlay - 311,005
Total expenditures 28,541 435,758
EXCESS OF REVENUES OVER
(UNDER) EXPENDITURES 6,001 23,820
OTHER FINANCING SOURCES:
Transfers in - -
Total other financing sources - -
NET CHANGE IN FUND BALANCES 6,001 23,820
FUND BALANCES (DEFICITS):
Beginning of year 924 (23,817)
End of year 6,925$ 3$
Special Revenue Funds (Continued)
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Road Total
Maintenance Other
Waste State Gas and Governmental
Management Tax Rehabilitation Measure M Funds
-$ 788,253$ 796,545$ 576,314$ 4,491,968$
459,644 - - - 1,239,968
- 15,179 3,635 6,157 54,195
- - - - 30,648
459,644 803,432 800,180 582,471 5,816,779
- - - - 180,176
- - - - 74,174
- - - - 1,569,483
- - - - 547,049
1,072,565 1,091,830 751,804 514,885 3,845,393
1,072,565 1,091,830 751,804 514,885 6,216,275
(612,921) (288,398) 48,376 67,586 (399,496)
- - - - 709,975
- - - - 709,975
(612,921) (288,398) 48,376 67,586 310,479
2,132,483 1,875,732 241,064 426,837 6,896,650
1,519,562$ 1,587,334$ 289,440$ 494,423$ 7,207,129$
Special Revenue Funds (Continued)
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City of San Gabriel
Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual
Proposition A Local Return Special Revenue Fund
For the year ended June 30, 2019
Variance with
Final Budget
Final Positive
Budget Actual (Negative)
REVENUES:
Intergovernmental 780,000$ 823,522$ 43,522$
Investment income 10,000 11,378 1,378
Total revenues 790,000 834,900 44,900
EXPENDITURES:
Current:
Public works 617,912 453,066 164,846
Capital outlay 150,153 - 150,153
Total expenditures 768,065 453,066 314,999
EXCESS OF REVENUES OVER
EXPENDITURES 21,935 381,834 359,899
FUND BALANCE:
Beginning of year 680,921 680,921 -
End of year 702,856$ 1,062,755$ 359,899$
114
City of San Gabriel
Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual
Citizens Option for Public Safety Special Revenue Fund
For the year ended June 30, 2019
Variance with
Final Budget
Final Positive
Budget Actual (Negative)
REVENUES:
Intergovernmental 130,000$ 204,694$ 74,694$
EXPENDITURES:
Current:
Public safety 125,375 151,635 (26,260)
EXCESS OF REVENUES
UNDER EXPENDITURES 4,625 53,059 48,434
FUND BALANCE (DEFICIT):
Beginning of year (77,523) (77,523) -
End of year (72,898)$ (24,464)$ 48,434$
115
City of San Gabriel
Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual
Parks and Recreation Activity Special Revenue Fund
For the year ended June 30, 2019
Variance with
Final Budget
Final Positive
Budget Actual (Negative)
REVENUES:
Charges for services 207,600$ 193,411$ (14,189)$
Other 800 385 (415)
Total revenues 208,400 193,796 (14,604)
EXPENDITURES:
Current:
Community services 245,409 185,413 59,996
EXCESS OF REVENUES OVER
(UNDER) EXPENDITURES (37,009) 8,383 45,392
FUND BALANCE:
Beginning of year 138,591 138,591 -
End of year 101,582$ 146,974$ 45,392$
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City of San Gabriel
Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual
Mission Playhouse/Facility Special Revenue Fund
For the year ended June 30, 2019
Variance with
Final Budget
Final Positive
Budget Actual (Negative)
REVENUES:
Intergovernmental 11,680$ 6,340$ (5,340)$
Charges for services 712,470 586,913 (125,557)
Other 10,500 30,263 19,763
Total revenues 734,650 623,516 (111,134)
EXPENDITURES:
Current:
Community services 1,636,138 1,333,491 302,647
EXCESS OF REVENUES OVER
(UNDER) EXPENDITURES (901,488) (709,975) 191,513
OTHER FINANCING SOURCES:
Transfers in 880,645 709,975 (170,670)
NET CHANGE IN FUND BALANCE (20,843) - 20,843
FUND BALANCE (DEFICIT):
Beginning of year (222,843) (222,843) -
End of year (243,686)$ (222,843)$ 20,843$
117
City of San Gabriel
Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual
Air Quality Management District Special Revenue Fund
For the year ended June 30, 2019
Variance with
Final Budget
Final Positive
Budget Actual (Negative)
REVENUES:
Intergovernmental 56,000$ 53,076$ (2,924)$
Investment income 1,100 1,294 194
Total revenues 57,100 54,370 (2,730)
EXPENDITURES:
Capital outlay 27,325 27,325 -
EXCESS OF REVENUES OVER
(UNDER) EXPENDITURES 29,775 27,045 (2,730)
FUND BALANCE:
Beginning of year 155,345 155,345 -
End of year 185,120$ 182,390$ (2,730)$
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City of San Gabriel
Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual
Narcotic Seizure Special Revenue Fund
For the year ended June 30, 2019
Variance with
Final Budget
Final Positive
Budget Actual (Negative)
REVENUES:
Intergovernmental -$ 66,016$ 66,016$
Investment income 3,550 3,108 (442)
Total revenues 3,550 69,124 65,574
EXPENDITURES:
Capital outlay - - -
EXCESS OF REVENUES OVER
EXPENDITURES 3,550 69,124 65,574
FUND BALANCE:
Beginning of year 324,583 324,583 -
End of year 328,133$ 393,707$ 65,574$
119
City of San Gabriel
Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual
Proposition C Local Return Special Revenue Fund
For the year ended June 30, 2019
Variance with
Final Budget
Final Positive
Budget Actual (Negative)
REVENUES:
Intergovernmental 675,000$ 683,088$ 8,088$
Investment income 6,500 13,444 6,944
Total revenues 681,500 696,532 15,032
EXPENDITURES:
Current:
Public works 332,614 93,983 238,631
Capital outlay 1,322,392 75,979 1,246,413
Total expenditures 1,655,006 169,962 1,485,044
EXCESS OF REVENUES OVER
(UNDER) EXPENDITURES (973,506) 526,570 1,500,076
FUND BALANCE:
Beginning of year 1,190,634 1,190,634 -
End of year 217,128$ 1,717,204$ 1,500,076$
120
City of San Gabriel
Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual
Street Light Special Revenue Fund
For the year ended June 30, 2019
Variance with
Final Budget
Final Positive
Budget Actual (Negative)
REVENUES
Intergovernmental 2,000$ -$ (2,000)$
EXPENDITURES:
Capital outlay 49,008 - 49,008
EXCESS OF REVENUES OVER
(UNDER) EXPENDITURES (47,008) - 47,008
FUND BALANCE:
Beginning of year 54,719 54,719 -
End of year 7,711$ 54,719$ 47,008$
121
City of San Gabriel
Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual
Office of Traffic Safety Grant Special Revenue Fund
For the year ended June 30, 2019
Variance with
Final Budget
Final Positive
Budget Actual (Negative)
REVENUES:
Intergovernmental 100,000$ 34,542$ (65,458)$
EXPENDITURES:
Current:
Public safety 100,000 28,541 71,459
EXCESS OF REVENUES OVER
EXPENDITURES - 6,001 6,001
FUND BALANCE:
Beginning of year 924 924 -
End of year 924$ 6,925$ 6,001$
122
City of San Gabriel
Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual
Community Development Block Grant Special Revenue Fund
For the year ended June 30, 2019
Variance with
Final Budget
Final Positive
Budget Actual (Negative)
REVENUES:
Intergovernmental 439,119$ 459,578$ 20,459$
EXPENDITURES:
Current:
Community development 88,001 74,174 13,827
Community services 64,288 50,579 13,709
Capital outlay 311,013 311,005 8
Total expenditures 463,302 435,758 27,544
EXCESS OF REVENUES OVER
(UNDER) EXPENDITURES (24,183) 23,820 48,003
FUND BALANCE (DEFICIT):
Beginning of year (23,817) (23,817) -
End of year (48,000)$ 3$ 48,003$
123
City of San Gabriel
Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual
Waste Management Special Revenue Fund
For the year ended June 30, 2019
Variance with
Final Budget
Final Positive
Budget Actual (Negative)
REVENUES:
Charges for services 507,000$ 459,644$ (47,356)$
EXPENDITURES:
Capital outlay 2,684,382 1,072,565 1,611,817
EXCESS OF REVENUES OVER
(UNDER) EXPENDITURES (2,177,382) (612,921) 1,564,461
FUND BALANCE (DEFICIT):
Beginning of year 2,132,483 2,132,483 -
End of year (44,899)$ 1,519,562$ 1,564,461$
124
City of San Gabriel
Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual
State Gas Tax Special Revenue Fund
For the year ended June 30, 2019
Variance with
Final Budget
Final Positive
Budget Actual (Negative)
REVENUES:
Intergovernmental 992,000$ 788,253$ (203,747)$
Investment income 18,000 15,179 (2,821)
Total revenues 1,010,000 803,432 (206,568)
EXPENDITURES:
Capital outlay 2,782,400 1,091,830 1,690,570
EXCESS OF REVENUES OVER
(UNDER) EXPENDITURES (1,772,400) (288,398) 1,484,002
FUND BALANCE:
Beginning of year 1,875,732 1,875,732 -
End of year 103,332$ 1,587,334$ 1,484,002$
125
City of San Gabriel
Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual
Road Maintenance and Rehabilitation Special Revenue Fund
For the year ended June 30, 2019
Variance with
Final Budget
Final Positive
Budget Actual (Negative)
REVENUES:
Intergovernmental 750,000$ 796,545$ 46,545$
Investment income - 3,635 3,635
Total revenues 750,000 800,180 50,180
EXPENDITURES:
Capital outlay 1,028,399 751,804 276,595
EXCESS OF REVENUES OVER
(UNDER) EXPENDITURES (278,399) 48,376 326,775
FUND BALANCE (DEFICIT):
Beginning of year 241,064 241,064 -
End of year (37,335)$ 289,440$ 326,775$
126
City of San Gabriel
Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual
Measure M Special Revenue Fund
For the year ended June 30, 2019
Variance with
Final Budget
Final Positive
Budget Actual (Negative)
REVENUES:
Intergovernmental 330,000$ 576,314$ 246,314$
Investment income 300 6,157 5,857
Total revenues 330,300 582,471 252,171
EXPENDITURES:
Capital outlay 600,000 514,885 85,115
EXCESS OF REVENUES OVER
(UNDER) EXPENDITURES (269,700) 67,586 337,286
FUND BALANCE:
Beginning of year 426,837 426,837 -
End of year 157,137$ 494,423$ 337,286$
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INTERNAL SERVICE FUNDS
Internal Service Funds are used to finance and account for goods and services provided by one City
department to other City departments for agencies. Funds included are:
Risk Management Fund
To account for payments made for the City’s workers’ compensation and general liability claims.
Automotive Maintenance Fund
To account for costs of operating a maintenance facility for automotive equipment used by City
departments.
City of San Gabriel
Combining Statement of Net Position
Internal Service Funds
June 30, 2019
Automotive
Risk Management Maintenance Total
ASSETS:
Current assets:
Cash and investments 1,233,333$ 836,308$ 2,069,641$
Interest receivable 3,660 2,721 6,381
Total current assets 1,236,993 839,029 2,076,022
Noncurrent assets:
Capital assets:
Being depreciated (net of accumulated depreciation) - 2,050,950 2,050,950
Total noncurrent assets - 2,050,950 2,050,950
Total assets 1,236,993 2,889,979 4,126,972
LIABILITIES:
Current liabilities:
Accounts payable 13,069 28,400 41,469
Accrued payroll - 5,394 5,394
Compensated absences, due within one year - 67,228 67,228
Claims payable, due within one year 409,919 - 409,919
Total current liabilities 422,988 101,022 524,010
Noncurrent liabilities:
Claims payable, due in more than one year 956,476 - 956,476
Total noncurrent liabilities 956,476 - 956,476
Total liabilities 1,379,464 101,022 1,480,486
NET POSITION:
Investment in capital assets - 2,050,950 2,050,950
Unrestricted (142,471) 738,007 595,536
Total net position (142,471)$ 2,788,957$ 2,646,486$
130
City of San Gabriel
Combining Statement of Revenues, Expenses and Changes in Net Position
Internal Service Funds
For the year ended June 30, 2019
Automotive
Risk Management Maintenance Total
OPERATING REVENUES:
Charges for services 5,335,224$ 981,000$ 6,316,224$
Total operating revenues 5,335,224 981,000 6,316,224
OPERATING EXPENSES:
Personnel services - 319,675 319,675
Contractual services - 17,254 17,254
Vehicle operating - 470,973 470,973
Depreciation - 334,373 334,373
Insurance premiums 6,065,617 - 6,065,617
Claims and judgments 11,698 - 11,698
Total operating expenses 6,077,315 1,142,275 7,219,590
OPERATING LOSS (742,091) (161,275) (903,366)
NONOPERATING REVENUES (EXPENSES):
Investment income 5,658 8,198 13,856
Loss on sale of capital assets - (5,793) (5,793)
Total nonoperating revenues (expenses) 5,658 2,405 8,063
CHANGE IN NET POSITION (736,433) (158,870) (895,303)
NET POSITION:
Beginning of the year 593,962 2,947,827 3,541,789
End of the year (142,471)$ 2,788,957$ 2,646,486$
131
City of San Gabriel
Combining Statement of Cash Flows
Internal Service Funds
For the year ended June 30, 2019
Automotive
Risk Management Maintenance Total
CASH FLOWS FROM OPERATING ACTIVITIES:
Cash received from user departments 5,335,224$ 981,000$ 6,316,224$
Cash payments to suppliers for goods and services (6,403,287) (641,726) (7,045,013)
Cash payments to employees for services - (312,804) (312,804)
Net cash provided by (used for)
operating activities (1,068,063) 26,470 (1,041,593)
CASH FLOWS FROM NONCAPITAL
FINANCING ACTIVITIES:
Cash received from other funds 2,191,065 - 2,191,065
Net cash provided by
noncapital financing activities 2,191,065 - 2,191,065
CASH FLOWS FROM CAPITAL AND
RELATED FINANCING ACTIVITIES:
Payments to acquire capital assets - (84,707) (84,707)
Net cash used for capital
and related financing activities - (84,707) (84,707)
CASH FLOWS FROM INVESTING ACTIVITIES:
Interest received from investments 1,998 5,477 7,475
Net cash provided by investing activities 1,998 5,477 7,475
Net increase (decrease) in cash
and cash equivalents 1,125,000 (52,760) 1,072,240
CASH AND CASH EQUIVALENTS:
Beginning of the year 108,333 889,068 997,401
End of the year 1,233,333$ 836,308$ 2,069,641$
RECONCILIATION OF OPERATING
LOSS TO NET CASH PROVIDED BY
(USED FOR) OPERATING ACTIVITIES:
Operating loss (742,091)$ (161,275)$ (903,366)$
Adjustments to reconcile operating loss to
net cash provided by (used for) operating activities:
Depreciation expense - 334,373 334,373
Changes in assets and liabilities:
Increase (decrease) in accounts payable 6,425 (153,499) (147,074)
Increase (decrease) in accrued payroll - (139) (139)
Increase (decrease) in compensated absences payable - 7,010 7,010
Increase (decrease) in claims payable (332,397) - (332,397)
Net cash provided by (used for)
operating activities (1,068,063)$ 26,470$ (1,041,593)$
132
133
AGENCY FUND
The Agency Fund is used to account for assets held by the City as an agent for individuals, private
organizations, other governments and/or other funds. The Agency Fund operates as a clearing
mechanism. Cash resources are collected, held for a brief period and then distributed to the proper recipients. The City has a fiduciary responsibility for the assets, which it does not own outright.
Deposit Fund
To account for deposits collected by the City which will be refunded at some later date.
City of San Gabriel
Statement of Changes in Fiduciary Assets and Liabilities
Agency Fund
For the year ended June 30, 2019
Balance at Balance at
July 1, 2018 Additions Deletions June 30, 2019
Deposit Agency Fund
ASSETS:
Cash and investments 1,732,943$ 1,163,467$ (1,049,242)$ 1,847,168$
Total assets 1,732,943$ 1,163,467$ (1,049,242)$ 1,847,168$
LIABILITIES:
Accounts payable 30,702$ 1,062,269$ (1,016,146)$ 76,825$
Deposits payable 1,702,241 1,161,703 (1,093,601) 1,770,343
Total liabilities 1,732,943$ 2,223,972$ (2,109,747)$ 1,847,168$
134
Contents Page
Financial Trends 136-143
Revenue Capacity 144-147
Debt Capacity 148-152
Demographic and Economic Information 153-155
Operating Information 156-158
These schedules offer demographic and economic indicators to help
the reader understand the environment within which the government's
financial activities take place.
These schedules contain service and infrastructure data to help the
reader understand how the information in the government's financial
report relates to the services the government provides and the
activities it performs.
Sources: Unless otherwise noted, the information in these schedules is
derived from the comprehensive annual financial reports for the
relevant year.
STATISTICAL SECTION
This part of the City of San Gabriel's comprehensive annual financial report presents detailed
information as a context for understanding what the information in the financial statements,
note disclosures, and required supplementary information says about the government's overall
financial health.
These schedules contain trend information to help the reader
understand how the government's financial performance and well-
being have changed over time.
These schedules contain information to help the reader assess the
government's most significant local revenue source, the property tax.
These schedules present information to help the reader assess the
affordability of the government's current levels of outstanding debt
and the government's ability to issue additional debt in the future.
135
City of San GabrielNet Position by Component
Last Ten Fiscal Years
(accrual basis of accounting)
2019 2018 2017 2016
Primary government
Investment in capital assets 125,053,120$ 53,824,523$ 47,221,824$ 44,929,618$
Restricted (1)28,380,502 27,241,931 26,700,097 27,988,037
Unrestricted (93,411,558) (83,870,090) (62,637,635) (61,019,107)
Total primary government net position 60,022,064$ (2,803,636)$ 11,284,286$ 11,898,548$
(1) The City of San Gabriel adopted the provisions of GASB 54 on June 7, 2010, for fiscal year 2010-11.
Fiscal Year
136
TABLE 1
2015 2014 2013 2012 2011 2010
38,923,809$ 39,736,996$ 40,680,317$ 40,773,686$ 39,375,000$ 37,827,601$
15,175,788 15,319,010 12,393,282 10,408,493 14,665,685 -
(47,541,083) (2,111,415) 458,790 2,508,800 2,179,372 20,371,939
6,558,514$ 52,944,591$ 53,532,389$ 53,690,979$ 56,220,057$ 58,199,540$
Fiscal Year
137
City of San GabrielChanges in Net Position
Last Ten Fiscal Years
(accrual basis of accounting)
2019 2018 2017 2016Expenses
Governmental activities:
General government 9,653,309$ 7,544,585$ 5,054,531$ 5,820,395$
Public safety 28,821,771 26,434,439 23,774,313 21,210,784 Community development 4,205,443 7,413,445 8,156,129 6,899,388
Community Services 3,723,848 6,037,114 5,669,801 4,967,684
Public Works 8,210,981 2,111,151 3,333,714 1,248,794
Interest 404,989 235,979 347,600 123,159
Loss on disposal of capital assets - - Total primary government expenditures 55,020,341 49,776,713 46,336,088 40,270,204
Program Revenues
Governmental activities:
Charges for services:
General government (2)218,255 921,508 859,092 873,165
Public safety 2,185,508 1,917,588 2,469,550 2,733,338
Community development (1)3,128,928 4,445,702 5,987,521 5,929,340
Community services 932,894 928,707 938,587 921,712
Public works (1)2,003,803 6,000 6,000 6,000
Operating grants and contributions 5,230,720 7,224,937 5,575,088 4,549,618
Capital grants and contributions 72,028,183 1,560,996 2,228,849 3,488,072 Total government activities program revenues 85,728,291 17,005,438 18,064,687 18,501,245
Net revenue/(expenses)
Total primary government net expense 30,707,950$ (32,771,275)$ (28,271,401)$ (21,768,959)$
Governmental activities:
Taxes
Property taxes 18,410,087$ 17,137,916$ 16,199,887$ 15,449,170$
Sales taxes 4,574,744 4,228,585 4,217,723 4,149,964
Utility users tax 4,220,173 4,477,367 4,496,220 4,317,061
Franchise taxes 631,983 538,126 497,699 575,991 Transient occupancy tax 3,042,962 2,077,757 1,601,695 1,592,425
Business license taxes (2)695,898 - - -
Property transfer tax 145,009 173,930 183,926 152,399
Other tax (3)19,642 - - -
Motor vehicle in lieu (unrestricted) - - - -
Investment earnings 104,136 104,362 87,295 284,257
Miscellaneous 273,116 518,818 372,694 587,726
Total governmental activities: 32,117,750 29,256,861 27,657,139 27,108,993 Total primary government 32,117,750 29,256,861 27,657,139 27,108,993
Extraordinary item - - - -
Changes in Net Position
Total primary government 62,825,700$ (3,514,414)$ (614,262)$ 5,340,034$
(1) In fiscal year 2019-20, Sewer users fee was reclassified from community development to public works.
(2) In fiscal year 2019-20, Business license taxes was removed from General Government Charges for Services to Governmental Activities Taxes
(3) In fiscal year 2019-20, Other taxes was added for Motor Vehicle Excess payment
Fiscal Year
138
TABLE 2
2015 2014 2013 2012 2011 2010
6,891,875$ 6,907,530$ 7,153,952$ 6,324,430$ 6,863,837$ 6,437,800$
19,628,528 18,953,862 19,644,859 19,695,496 18,558,140 17,748,076
5,782,405 5,469,123 5,451,019 8,880,924 8,984,098 6,406,734
3,809,983 3,290,862 3,512,514 3,259,953 3,178,378 2,929,024
3,427,420 2,105,289 2,984,929 1,563,573 3,069,674 1,688,865
52,030 - - - - -
- - 27,481 - - - 39,592,241 36,726,666 38,774,754 39,724,376 40,654,127 35,210,499
845,229 881,188 811,645 788,719 788,664 738,643
2,894,409 2,169,374 2,149,555 2,292,293 2,356,082 2,227,266
4,597,675 1,982,011 1,784,826 1,653,036 1,784,907 1,496,009
814,717 815,468 850,741 780,451 675,849 762,501
6,000 6,000 6,000 6,000 6,000 6,000
5,773,315 4,147,332 5,788,085 5,948,416 6,900,218 3,648,642
1,720,849 787,239 911,063 1,687,194 2,897,964 4,302,455 16,652,194 10,788,612 12,301,915 13,156,109 15,409,684 13,181,516
(22,940,047)$ (25,938,054)$ (26,472,839)$ (26,568,267)$ (25,244,443)$ (22,028,983)$
10,888,734$ 10,261,507$ 9,718,176$ 9,237,775$ 8,990,057$ 8,193,637$
4,205,561 4,177,364 4,221,735 3,860,989 4,690,820 3,090,531
4,480,156 4,596,568 4,655,606 4,514,886 880,057 4,685,188
555,940 587,201 585,104 582,469 3,527,569 563,514
1,453,521 1,425,873 1,167,616 948,223 582,088 760,976
- - - - - -
155,164 176,835 118,016 87,613 86,649 130,419
- - - - - -
4,011,131 3,836,014 3,706,552 3,611,799 3,716,904 3,597,698
113,396 118,520 195,987 654,325 697,253 645,521
206,848 170,374 105,000 67,915 93,564 146,830
26,070,451 25,350,256 24,473,792 23,565,994 23,264,960 21,814,314 26,070,451 25,350,256 24,473,792 23,565,994 23,264,960 21,814,314
- - - 1,805,302 - -
3,130,404$ (587,798)$ (1,999,047)$ (1,196,971)$ (1,979,483)$ (214,669)$
Fiscal Year
139
City of San GabrielFund Balances of Governmental Funds
Last Ten Fiscal Years
(modified accrual basis of accounting)
2019 2018 2017 2016
General fund
Nonspendable -$ 350,174$ 773,276$ 1,331,203$
Reserved - - -
Restricted 6,651,667 6,911,667 7,171,667 7,450,168
Committed 811,533 1,988,515 1,591,702
Assigned - - 94,006
Unassigned (8,486,517) (10,664,943) (7,741,981) (5,648,043)
Unreserved - - - Total general fund (1,834,850)$ (2,591,569)$ 2,191,477$ 4,819,036$
All other governmental funds
Reserved
Restricted 21,940,243$ 22,703,370$ 22,425,770$ 24,337,869$
Committed - - - -
Unassigned - - - -
Special revenue funds (248,307) (325,183) (472,605) (18,417)
Capital projects funds - (68,806) -
Total all other governmental funds 21,691,936$ 22,378,187$ 21,884,359$ 24,319,452$
As of July 1, 2010, the City of San Gabriel adopted the provisions of Government Accounting Standards Board ("GASB")Statement No. 54, Fund Balance Reporting and Governmental Fund Type Definitions.
Fund balance explanation: comparing 2018 to 2019
General fund
All other governmental funds
Restricted and Unassigned categories for all other funds did not change significantly.
Fiscal Year
The balances for Reserved, Assigned and Unreserved categories either have no or only insignificant changes from 2018. The balance for
Restricted funds decreased by about $260,000, which mainly represents the 2018-19 payment on the City's $7.8 million loan from Citizens
Business Bank. The balance for Committed funds decreased because the funding for projects have changed. The balance for Unassigned
funds increased by $2.2 million related to the City's pledging of Certificates of Deposit as collateral for the bank loan of $7.8 million.
Lastly, Nonspendable funds declined by $350,174 due to advances to other funds.
140
TABLE 3
2015 2014 2013 2012 2011 2010
1,284,945$ 1,284,945$ 1,284,945$ 1,291,035$ 5,457,078$
- - - - - 11,037,947$
- 18,247 10,525 21,907 244,594 -
6,929,562 2,951,643 3,294,439 5,836,526 6,121,090 -
15,093 132,488 56,076 - - -
3,236,592 2,962,914 3,365,984 1,140,249 (639,868) -
- - - - - 122,874 11,466,192$ 7,350,237$ 8,011,969$ 8,289,717$ 11,182,894$ 11,160,821$
4,090,559$
15,175,788$ 15,056,442$ 12,382,757$ 11,084,898$ 14,845,426$ -
- - - - - -
- - - - (5,631,679) -
(113,724) (7,840) (5,248) (824,635) - 10,288,265
- - - - - (2,067,856)
15,062,064$ 15,048,602$ 12,377,509$ 10,260,263$ 9,213,747$ 12,310,968$
Fiscal Year
141
City of San GabrielChanges in Fund Balances of Governmental Funds
Last Ten Fiscal Years
(modified accrual basis of accounting)
2019 2018 2017 2016
Revenues
Taxes 23,310,253$ 19,711,009$ 22,765,499$ 22,007,184$
Intergovernmental 596,840 17,205,621 9,043,036 8,878,018
Charges for services 3,386,112 6,549,613 7,645,744 10,165,807
Fines and forfeitures 910,570 643,798 798,782 838,920
Licenses and permits 2,280,570 2,278,140 3,003,502 2,829,532
Investment income 127,855 250,370 227,185 243,608
Other 204,579 519,877 1,184,292 575,580
Total revenues 30,816,779 47,158,428 44,668,040 45,538,649
Expenditures
General government 6,255,890 5,273,096 5,350,904 7,190,134
Police 13,177,227 14,025,947 13,008,035 11,763,828
Fire 8,328,749 8,651,832 8,915,538 7,864,657
Community development 2,610,636 6,588,290 7,057,181 5,847,288
Community services 1,613,753 4,870,603 4,618,828 4,089,106
Public Works 4,629,319 532,209 1,785,822 567,218
Capital outlay 358,339 9,563,082 6,289,720 8,376,848
Debt Service
Principal Payments 260,000 482,493 474,969 260,000
Interest and fiscal charges 110,187 235,979 347,600 123,159
Total expenditures 37,344,100 50,223,531 47,848,597 46,082,238
Excess of revenues
over (under) expenditures (6,527,321) (3,065,103) (3,180,557) (543,589)
Other financing sources (uses)
Proceeds from loan - - - 3,800,000
Transfers in 7,926,444 6,888,715 6,214,803 7,473,959
Transfers out (642,404) (8,112,830) (8,096,898) (8,120,138)
Sales of capital assets -
Total other financing
sources (uses) 7,284,040 (1,224,115) (1,882,095) 3,153,821
Extraordinary item - - - -
Net change in fund balances 756,719$ (4,289,218)$ (5,062,652)$ 2,610,232$
Debt service as a percentage of
noncapital expenditures 1.19% 1.72% 1.92% 1.02%
The City of San Gabriel had no debt prior to FY 2014-15
Fiscal Year
142
TABLE 4
2015 2014 2013 2012 2011 2010
21,739,077$ 21,225,348$ 21,115,668$ 19,707,269$ 19,971,918$ 18,967,156$
9,208,954 7,665,587 8,911,593 9,353,878 8,851,153 8,865,299
7,084,354 3,457,711 3,258,226 3,295,442 3,255,034 2,897,685
994,034 857,420 907,211 1,099,215 1,121,834 1,010,089
2,257,281 1,898,675 1,802,968 1,721,882 1,682,928 1,525,324
248,905 769,084 942,989 1,425,700 1,589,883 1,717,467
1,208,887 251,544 923,047 195,915 1,830,805 402,551
42,741,492 36,125,369 37,861,702 36,799,301 38,303,555 35,385,571
6,811,618 6,228,126 6,405,502 5,476,596 6,129,782 5,748,554
10,795,608 10,607,474 10,588,300 11,011,904 10,579,871 10,288,761
7,657,473 6,398,977 6,254,470 6,459,510 6,342,987 6,102,152
5,111,672 4,507,884 4,430,192 6,745,302 5,140,022 5,178,331
2,966,338 2,956,061 3,056,792 2,993,283 2,872,819 2,840,657
1,839,783 676,760 1,689,974 595,409 1,998,050 797,342
9,762,538 1,572,501 2,596,974 6,349,023 7,474,667 3,488,540
108,333 - - - - -
52,030 - - - - -
45,105,393 32,947,783 35,022,204 39,631,027 40,538,198 34,444,337
(2,363,901) 3,177,586 2,839,498 (2,831,726) (2,234,643) 941,234
7,800,000 - - - - -
5,306,780 4,446,410 4,858,716 5,315,085 5,813,008 5,768,687
(6,613,462) (5,614,635) (5,858,716) (6,135,322) (6,653,513) (6,580,756)
- - - - - -
6,493,318 (1,168,225) (1,000,000) (820,237) (840,505) (812,069)
- - - 1,805,302 - -
4,129,417$ 2,009,361$ 1,839,498$ (1,846,661)$ (3,075,148)$ 129,165$
0.45% - - - - -
Fiscal Year
143
City of San Gabriel TABLE 5
Assessed Value and Actual Value of Taxable Property
Last Ten Fiscal Years
Fiscal
Year
Residential
Property
Commercial
Property
Industrial
Property
Less: Tax-
Exempt
Property
Total Taxable
Assessed Value
Total Assessed
ValueTotal Direct
Rate
2009-2010 2,722,164,237 918,206,629 78,518,715 35,961,299 3,718,889,581 3,754,850,880 0.27553
2010-2011 2,775,114,206 918,057,248 77,679,876 34,857,400 3,770,851,330 3,805,708,730 0.27532
2011-2012 2,856,205,133 909,646,117 80,043,712 35,658,601 3,845,890,962 3,881,549,563 0.27546
2012-2013 2,948,513,283 924,559,905 73,486,182 35,351,485 3,946,559,370 3,981,910,855 0.27426
2013-2014 3,077,659,813 933,384,303 78,114,044 40,290,255 4,089,297,310 4,129,587,565 0.24374
2014-2015 3,226,829,597 970,630,484 80,074,371 42,574,924 4,277,534,452 4,320,109,376 0.24384
2015-2016 3,407,339,170 1,022,934,271 82,866,431 43,241,832 4,513,139,872 4,556,381,704 0.24395
2016-2017 3,578,102,131 1,059,071,807 90,260,235 42,343,035 4,727,434,173 4,769,777,208 0.24404
2017-2018 3,769,933,014 1,144,617,776 90,254,101 40,384,860 5,004,804,891 5,045,189,751 0.24357
2018-2019 3,988,817,226 1,223,707,273 93,292,195 40,933,054 5,305,816,694 5,346,749,748 0.25023
Source: Los Angeles County Assessor's Office
144
City of San Gabriel TABLE 6
Property Tax Rates
Direct and Overlapping Governments
Last Ten Fiscal Years
(rate per $100 of assessed value)
2018-19 2017-18 2016-17 2015-16 2014-15 2013-14 2012-13 2011-12 2010-11 2009-10
Agency
Basic Levy 1.00000 1.00000 1.00000 1.00000 1.00000 1.00000 1.00000 1.00000 1.00000 1.00000
Alhambra Unified School District 0.05404 0.10300 0.06111 0.06558 0.06595 0.06666 0.06760 0.07411 0.05996 0.05151
El Monte Union High School 0.08793 0.08243 0.08469 0.09155 0.08418 0.09799 0.08992 0.09591 0.08475 0.09654
Garvey School District 0.08705 0.08332 0.06067 0.05874 0.05947 0.05978 0.06037 0.05686 0.05733 0.05378
Garvey-Alhambra 0.08800 0.04805 0.02806 0.02906 0.02912 0.03154 0.02795 0.02718 0.02770 0.02458
LA Community College 0.04621 0.04599 0.03596 0.03575 0.04017 0.04454 0.04875 0.03530 0.04031 0.02311
Metropolitan Water District 0.00350 0.00350 0.00350 0.00350 0.00350 0.00350 0.00350 0.00370 0.00370 0.00430
Pasadena Community College 0.00767 0.00819 0.00885 0.00872 0.01032 0.01899 0.02056 0.01956 0.01986 0.02300
Rosemead School District 0.09260 0.11979 0.08533 0.09997 0.09886 0.10314 0.10240 0.10507 0.10743 0.11358
San Gabriel Unified School District 0.10563 0.10078 0.10534 0.10684 0.11444 0.10082 0.10523 0.08454 0.10190 0.10070
Tax District #1 0.14000 0.14000 0.14000 0.14000 0.14000 0.14000 0.14000 0.14000 0.14000 0.14000
Temple City Unified 0.10245 0.10232 - - - - - - - -
Total Direct and Overlapping Tax Rates 1.81508 1.83737 1.61351 1.63971 1.64600 1.66697 1.66628 1.64222 1.64294 1.63110
City's Share of 1% Levy Per Prop 13 0.10637 0.10637 0.10637 0.10637 0.10637 0.10637 0.10637 0.10637 0.10637 0.10637
Voter Approved City Debt Levy 0.14000 0.14000 0.14000 0.14000 0.14000 0.14000 0.14000 0.14000 0.14000 0.14000
Redevelopment Rate - - - - - - - 1.14370 1.14370 1.14370
Total Direct Rate 0.25023 0.24357 0.24404 0.24395 0.24384 0.24374 0.27426 0.27546 0.27532 0.27553
Source: Los Angeles County Assessor 2009/10 -2018/19 Tax Rate Table.
Fiscal Year
Direct Rate is the rate applied pursuant to Proposition 13 and excludes revenues derived from aircraft. Overlapping rates are those of local and county governments that apply to property owners within theCity. Not all overlapping rates apply to all city property owners.
145
City of San Gabriel Table 7
Principal Property Taxpayers
Last Ten Fiscal Years
(amounts expressed in thousands)
Taxable
Assessed
Value Rank
Percentage
of Total
Taxable
Assessed
Value
Taxable
Assessed
Value Rank
Percentage
of Total
Taxable
Assessed
Value
Taxpayer
Landwin Hospitality LLC 79,111$ 1 1.49% 51,880$ 2 1.40%
Universal Shopping Plaza 67,529 2 1.27% 59,666 1 1.60%
SGVMC CALMED Investment LP (aka
San Gabriel Valley Medical Center) 42,020 3 0.79% 37,128 3 1.00%
Pacific Square San Gabriel 32,253 4 0.61%
Forever Enterprises LLC 31,141 5 0.59%
Lancer Investment LLC 24,061 6 0.45% 25,905 4 0.70%
NHP PMB San Gabriel Vly Med. Plaza (aka San Gabriel Medical Plaza LLC) 21,946 7 0.41% 21,552 6 0.58%
San Yi US Investment Company Inc. 16,874 8 0.32%
Demer Properties Inc. 20,005 9 0.38% 17,677 8 0.48%
Royal Vista Care Properties LLC 19,309 10 0.36% -
Valley Del Mar Plaza LLC - - 22,440 5 0.60%
Tony C. Chu Trust 21,300 7 0.57%
Setiawan Boedi Trust 16,854 9 0.45%
SG Gateway Center 16,801 10 0.45%
354,249$ 6.68% 291,203$ 7.83%
Source: Los Angeles County Assessor
20102019
146
City of San Gabriel TABLE 8
Property Tax Levies and Collections
Last Ten Fiscal Years
(amounts expressed in thousands)
Total Tax
Levy for
Fiscal Year Fiscal Year (1) Amount (2)Amount
2009-2010 8,974,995 8,127,697 91% 328,444 8,456,142 94%
2010-2011 8,530,846 8,258,096 97% 298,579 8,556,675 100%
2011-2012 9,047,677 8,520,858 94% 569,336 9,090,194 100%
2012-2013 9,585,668 9,128,515 95% 176,089 9,304,604 97%
2013-2014 9,627,987 9,289,993 96% 140,421 9,430,414 98%
2014-2015 10,209,947 9,726,022 95% 124,800 9,850,821 96%
2015-2016 10,754,860 10,222,984 95% 144,623 10,367,607 96%
2016-2017 11,071,673 10,592,003 96% 193,677 10,785,680 97%
2017-2018 11,617,441 11,055,784 95% 304,234 11,360,018 98%
2018-2019 13,069,050 12,522,902 96% 198,372 12,721,274 97%
(1) Total original tax levy for the fiscal year.
(2) Collections excluded penalty and interest.
Source: Los Angeles County Auditor-Controller
Subsequent YearsPercentage of Levy
Total Collections to Date
Percentage of Levy
Collected within the
Fiscal Year of the Levy Collections in
147
City of San Gabriel TABLE 9
Schedule of Direct and Overlapping Debt
June 30, 2019
6/30/2019
Direct Debt:
CITY INDEBTEDNESS 1.000 $ 9,241,930
Overlapping Bonded Debt:
METROPOLITAN WATER DISTRICT 0.410 23,317,224 95,614
GARVEY SCHOOL DISTRICT 2004 SERIES 2006 12.329 12,674,618 1,562,647
GARVEY SCHOOL DISTRICT 2004 SERIES C 12.329 8,317,964 1,025,517
GARVEY SCHOOL DISTRICT 2011 REFUND BONDS 12.329 3,175,000 391,444
GARVEY SCHOOL DISTRICT 2013 REFUND BONDS 12.329 950,000 117,125
GARVEY SCHOOL DISTRICT 2014 REFUND BONDS 12.329 3,575,000 440,760
GARVEY SCHOOL DISTRICT 2016 SERIES A 12.329 19,500,000 2,404,145
ROSEMEAD SCHOOL DISTRICT DS 2007 SERIES D 11.212 120,000 13,455
ROSEMEAD SCHOOL DISTRICT DS 2008 SERIES A 11.212 215,000 24,107
ROSEMEAD SD DS 2011 REFUNDING BONDS 11.212 6,195,000 694,612
ROSEMEAD SD DS 2012 REFUNDING BONDS 11.212 5,160,000 578,563
ROSEMEAD SD DS 2008 SERIES T 1 11.212 7,566,503 848,391
ROSEMEAD SD DS 2014 REFUNDING BONDS 11.212 5,560,000 623,413
ROSEMEAD SD DS 2016 REFUNDING BONDS 11.212 12,235,000 1,371,844
ROSEMEAD SD DS 2014 SERIES A 11.212 9,000,000 1,009,121
ROSEMEAD SD DS 2014 SERIES T 2 11.212 175,000 19,622
EL MONTE UNION HSD DS 2008 SERIES A 2.403 30,041,132 721,888
EL MONTE UNION HSD DS 2008 SERIES B 2.403 25,830,000 620,695
EL MONTE UNION HSD DS 2015 REFUND BONDS 2.403 10,765,000 258,683
EL MONTE UNION HSD DS 2016 REF DLYD DLVR 2.403 4,165,000 100,085
EL MONTE UNION HSD DS 2008 SERIES C 2.403 48,525,000 1,166,056
EL MONTE UNION HSD DS 2016 REF BONDS 2.403 10,650,098 255,922
EL MONTE UNION HSD DS 2008 SERIES D 2.403 56,430,000 1,356,013
LA CCD DS 2003 TAXABLE SERIES 2004B 0.582 2,115,000 12,302
LA CCD DS 2001 TAXABLE SERIES 2004A 0.582 31,555,000 183,548
LA CCD DS 2008, 2009 TAXABLE SERIES B 0.582 75,000,000 436,257
LA CCD DS 2008, 2010 TAXABLE SERIES D 0.582 125,000,000 727,094
LA CCD DS 2008, 2010 TAX SERIES E (BABS) 0.582 900,000,000 5,235,078
LA CCD DS 2008 2012 SERIES F 0.582 202,000,000 1,174,984
LA CCD DS 2013 REFUNDING BONDS 0.582 38,945,000 226,533
LA CCD DS 2008 SERIES G 0.582 212,070,000 1,233,559
LA CCD DS 2015 REFUNDING SERIES A 0.582 1,429,435,000 8,314,671
LA CCD DS 2015 REFUNDING SERIES B 0.582 28,830,000 167,697
LA CCD DS 2015 REFUNDING SERIES C 0.582 252,150,000 1,466,694
LA CCD DS 2008 SERIES I 0.582 210,570,000 1,224,834
LA CCD DS 2008 SERIES J 0.582 174,965,000 1,017,728
LA CCD DS 2016 REF BONDS 0.582 247,755,000 1,441,130
PASADENA AREA CCD DS 2002, 2006 SERIES D 0.403 1,840,000 7,408
PASADENA AREA CCD DS 2002, 2009 SER E (BABS) 0.403 25,295,000 101,837
PASADENA AREA CCD DS 2014 REF SERIES A 0.403 13,900,000 55,961
PASADENA AREA CCD DS 2016 REF SERIES A 0.403 32,395,000 130,422
SAN GABRIEL USD DS 2010 REFUND BONDS 75.227 8,404,370 6,322,324
SAN GABRIEL USD DS 2008 SERIES B 75.227 5,900,000 4,438,371
SAN GABRIEL USD DS 2012 REF BOND SERIES B 75.227 14,177,023 10,664,896
SAN GABRIEL USD DS 2008 SERIES C 75.227 22,918,806 17,241,045
SAN GABRIEL USD DS 2015 REF BOND SERIES A 75.227 31,925,000 24,016,101
ALHAMBRA USD DS 1999 SERIES A 0.016 6,512,345 1,047
Percent Applicable
to City of
San Gabriel
Amount Applicable
to City of
San Gabriel
$ 9,241,930
148
City of San Gabriel TABLE 9
Schedule of Direct and Overlapping Debt
June 30, 2019
6/30/2019
Percent Applicable
to City of
San Gabriel
Amount Applicable
to City of
San Gabriel
ALHAMBRA USD DS 2005 REFUNDING BONDS 0.016 4,565,000 734
ALHAMBRA USD DS 2008 SERIES A SFID 0.016 11,324,708 1,821
ALHAMBRA USD-GARVEY DS 2004 SERIES B 0.016 21,694,695 3,488
ALHAMBRA USD DS 2008 SERIES B-1 QSCB 0.016 7,934,000 1,276
ALHAMBRA USD-GARVEY DS 2012 REF SERIES A 0.016 34,315,000 5,517
ALHAMBRA USD DS 2012 REF SERIES B 0.016 3,455,000 555
ALHAMBRA USD-GARVEY DS 2016 REF SERIES A 0.016 10,670,000 1,715
ALHAMBRA USD DS 2016 REF BOND SERIES B 0.016 22,985,000 3,695
ALHAMBRA USD DS 2016 SERIES A 0.016 30,000,000 4,823
ALHAMBRA USD-GARVEY DS 2016 SERIES A 0.016 25,000,000 4,019
TEMPLE CITY USD DS 1998 SERIES B 0.003 4,331,661 138
TEMPLE CITY USD DS 2005 REFUNDING BOND 0.003 8,580,000 273
TEMPLE CITY USD DS 2012 SERIES A 0.003 21,915,863 696
TEMPLE CITY USD DS 2012 SERIES B 0.003 33,457,588 1,063
TEMPLE CITY USD DS 2017 REFUNDING BOND 0.003 19,720,000 627
Total Overlapping Debt: 101,571,683
Total Direct and Overlapping Debt:
Source: HdL Coren & Cone, Los Angeles County Assessor and Auditor Combined 2018/19 Lien Date Tax Rolls.
110,813,613$
Overlapping governments are those that coincide, at least in part, wth the geographic boundaries of the city. The percentage of overlapping debt applicable is
estimated by using taxable assessed values. Applicable percentages were estimated by determining the portion of anothe rgovernmental unit's taxable assessed value
that is within the city's coundaries and dividing it by each unit's total taxable assessed value
149
City of San GabrielLegal Debt Margin Information
Last Ten Fiscal Years
2019 2018 2017 2016
5,305,816,694 5,004,804,891 4,727,434,173 4,513,139,872
25% 25% 25% 25%
1,326,454,174 1,251,201,223 1,181,858,543 1,128,284,968
15% 15% 15% 15%
198,968,126 187,680,183 177,278,781 169,242,745
- - - -
198,968,126 187,680,183 177,278,781 169,242,745
0% 0% 0% 0%
Source: (1) Los Angeles County Assessor
(2) City Finance Department
Conversion percentage
Fiscal Year
Adjusted assessed valuation
Debt limit percentage
Debt limit
The Government Code of the State of California provides for a legal debt limit of 15% of gross assessed valuation. However, this provision
was enacted when assessed valuation was based upon 25% of market value. Effective with the 1981-82 fiscal year, each parcel is now assessed
at 100% of market value (as of the most recent change in ownership for that parcel). The computations shown above reflect a conversion of
assessed valuation data for each fiscal year from the current full valuation perspective to the 25% level that was in effect at the time that the
legal debt margin was enacted by the State of California for local governments located within the state.
Legal debt margin
Total debt applicable to the limit as a percentage
of debt limit
Total net debt applicable to limit:
Total Taxable Assessed value
150
TABLE 10
2015 2014 2013 2012 2011 2010
4,277,534,452 4,089,297,310 3,946,559,370 3,845,890,962 3,770,851,330 3,718,889,581
25% 25% 25% 25% 25% 25%
1,069,383,613 1,022,324,328 986,639,843 961,472,741 942,712,833 929,722,395
15% 15% 15% 15% 15% 15%
160,407,542 153,348,649 147,995,976 144,220,911 141,406,925 139,458,359
- - - - - -
160,407,542 153,348,649 147,995,976 144,220,911 141,406,925 139,458,359
0% 0% 0% 0% 0% 0%
Fiscal Year
151
City of San GabrielRatios of Outstanding Debt by Type
Last Five Fiscal Years
2019 2018 2017 2016 2015
Governmental Activities
Loan Payable 1 6,651,667$ 6,911,667$ 7,171,667$ 7,431,667$ 7,691,667$
Installment Sale Agreement 2 3,132,258 3,362,538 3,585,031 3,800,000 -
Total Long-Term Liabilities 9,783,925$ 10,274,205$ 10,756,698$ 11,231,667$ 7,691,667$
41178 40920 41,020 40,424 40,219
Number of Households 12925 12946 12,333 12,723 12,535
Median Household Income 62,050$ 65,080$ 51,579$ 60,222$ 57,666$
Per Capita Personal Income 27550 29063 24,891$ 27,059$ 24,891$
Debt per Capita 238$ 251$ 262$ 278$ 191$
Notes: 1
2
Sources:
TABLE 11
Fiscal Year
California State Department of Finance; US Census Bureau; California Hometown Locator.com
Population - State Department of Finance
January 1
On December 16, 2014, the City entered into a loan agreement with Citizens Business Bank for a loan of $7,800,000. The
loan proceeds were used for the construction of the new public works maintenance facility. The City began repaying the
loan, beginning on February 21, 2015, in 119 principal payments of $21,667 each and one final principle and interest
payments of $5,221,667 on January 21, 2025. Please see Notes to Basic Financial Statements, No. 5, for further details.
On May 1, 2015, the City entered into an installment sale agreement with the California Infrastructure and Economic
Development Bank (I-Bank) to finance the accelerated great street program, which will upgrade, reconstruct and
rehabilitate approximately 1.6 lane miles of public streets within the City. Principal and interest payments are due on each
August 1 and February 1, commencing on August 1, 2016 and maturing on August 1, 2029. Please see Notes to Basic
Financial Statements, No. 5, for further details.
152
City of San Gabriel TABLE 12
Demographic Statistics
Last Ten Fiscal Years
Fiscal Year
2010 42,984 956,609 22,255 10.40%
2011 39,926 984,455 24,657 10.10%
2012 40,153 1,009,727 25,147 7.60%
2013 40,313 995,691 24,699 6.20%
2014 40,332 991,119 24,574 5.10%
2015 40,424 1,006,220 24,891 4.10%
2016 41,020 949,919 23,157 3.20%
2017 40,920 976,112 23,854 3.60%
2018 41,178 1,017,730 24,715 3.70%
2019 41,255 *
(*) Estimated
Source: (1) Estimates from California State Department of Finance(2) HDL report. (3) California Employment Development Department
Personal Income (2)
(In Thousands)City Population (1)
Per Capita Personal
Income (2)
Unemployment
Rate (3)
153
City of San GabrielPrincipal Employers
Last Ten Fiscal Years
Employer
No. of
Employees Rank
% of Total
City
Employees
No. of
Employees Rank
% of Total
City
Employees
AHMC SAN GABRIEL VALLEY
MEDICAL1062 1 11.27% 924 1 11.51%
LANDWIN HOSPITALITY LLC. 150 2 1.59% 80 10 1.00%
IVY CREEK HEALTHCARE &
WELLNESS CENTRE147 3 1.56%
SGV HEALTHCARE INC. (aka Live
Oak)147 4 1.56% 137 4 1.71%
99 RANCH MARKET #208 (TAWA) 143 5 1.52% 180 2 2.24%
ROYAL VISTA CARE CENTER, LLC
(aka Vista Cove Care Center)123 6 1.31% 103 6 1.28%
SAN GABRIEL COUNTRY CLUB 120 7 1.27%
PINE GROVE HEALTHCARE &
WELLNESS CENTRE116 8 1.23%
FIVE STAR SEAFOOD
RESTAURANT105 9 1.11%
SAN GABRIEL SUPERSTORE 105 10 1.11% 139 3 1.73%
HAWAII SUPERMARKET 99 11 1.05%
BROADWAY HEALTH CARE
CENTER91 12 0.97%
168 MARKET #803 72 13 0.76%
ALDERWOOD MANOR 114 5 1.42%
MISSION LODGE SANITARIUM 87 8 1.08%
PARK UNIFORM RENTAL 85 9 1.06%
FERNWOOD CONVALESCENT
HOSPITAL95 7 1.18%
MARCO'S AUTO BODY, INC. 65 12 0.81%
A G SAN GABRIEL, LLC 71 11
O'DONNELL CHEVROLET-GEO
BUICK59 13 0.73%
Source: City Finance Dept
20102019
TABLE 13
154
City of San Gabriel Table 14
Top 25 Sales Tax Producers
Last Ten Fiscal Years
Sales Tax Producers Business Category Sales Tax Producers Business Category
76 Service Stations 99 Ranch Market Grocery Stores
Airstream Los Angeles Trailers/RVs Albertsons Grocery Stores
Boston Lobster Casual Dining AM PM Mini Mart Service Stations
Chong Hing Jewelers Jewelry Stores Carl's Jr Quick-Service Restaurants
Ferguson Enterprises Plumbing/Electrical Supplies Chong Hing Jewelers Jewelry Stores
Five Star Seafood Restaurant Casual Dining Ferguson Enterprises Plumbing/Electrical Supplies
Garvey Equipment Garden/Agricultural Supplies Garvey Equipment Garden/Agricultural Supplies
Golden Deli Vietnamese Restaurant Casual Dining Hilton Hotels-Liquor
Hilton Hotels-Liquor Hing Wa Lee Jewelers Jewelry Stores
Hing Wa Lee Jewelers Jewelry Stores Howards Appliances Electronics/Appliance Stores
Mission Car Wash Service Stations JHM Supply Garden/Agricultural Supplies
Mission Hardware Building Materials Kwik/Al Sal Oil Service Stations
Newport Seafood Casual Dining Marcos Auto Body Auto Repair Shops
Oil Lee Service Stations MCS Water Technology Contractors
Sam Wood BBQ Casual Dining Mission Car Wash Service Stations
San Gabriel 76 Service Stations Mission Hardware Building Materials
San Gabriel Country Club Leisure/Entertainment New Capital Seafood Restaurant Fine Dining
San Gabriel Mobil Servince Center Service Stations Newport Seafood Casual Dining
Service King Paint & Body Auto Repair Shops O Donnell Chevrolet Buick New Motor Vehicle Dealers
Shancheng Lameizi Casual Dining Plumbing Wholesale Outlet Plumbing/Electrical Supplies
Sun Nong Dan Casual Dining San Gabriel 76 Service Stations
T Mobile Electronics/Appliance Stores San Gabriel Nursery Florist Garden/Agricultural Supplies
Tivoli Jewelry Jewlery Stores San Gabriel Service Center Service Stations
Union 76 Service Stations Shell Service Stations
USA Gasoline Service Stations Union 76 Service Stations
*Firms Listed Alphabetically
Source: HDL Report
2019 2010Fiscal Year
155
City of San Gabriel TABLE 15
Full-time Equivalent City Government Employees by Function/Program
Last Ten Fiscal Years
2019 2018 2017 2016 2015 2014 2013 2012 2011 2010
Function/Program
General government
Management services 20 18 18 18 8 8 7 7 7 6
Finance 9 10 10 10 9 8 9 7 8 9
Planning 4 4 4 4 3 3 3 4 4 3
Building 4 4 4 4 2 2 4 4 4 4
Other 7 7 7 9 4 4 5 5 5 4
Police
Officers 54 54 54 54 51 53 52 52 53 54 Civilians 15 15 15 15 16 15 14 14 14 15Fire
Firefighters and officers 35 36 35 34 28 28 29 29 30 33
Civilians 1 1 1 1 1 1 1 1 1 1Highways and streets Engineering 9 15 15 12 4 3 3 3 3 2
Maintenance 26 17 17 17 13 13 16 17 17 17
Redevelopment 0 0 0 0 0 0 0 1 1 1
Parks and recreation 14 14 14 12 18 18 20 21 21 22
Total 198 195 194 190 157 156 163 165 168 171
Source: City Finance Department
Full-time Equivalent Employees
156
City of San Gabriel TABLE 16
Operating Indicators by Function/Program
Last Ten Fiscal Years
2019 2018 2017 2016 2015 2014 2013 2012 2011 2010
Function/Program
General government
Building permits issued 941 632 1,765 2,040 1,935 1,734 1,682 1,517 1,349 1,355
Building inspections conducted 3,981 896 5,219 4,851 5,448 5,103 4,794 5,256 5,143 5,381
Business licenses processed 4,000 3,900 3,996 3,900 3,874 3,817 3,777 3,484 3,379 3,380
Overnight parking applications processed 1,741 1,600 1,576 1,650 1,635 1,604 1,576 1,484 1,425 1,450
Number of city website visitors * 480,191 439,175 376,701 337,024 313,979 195,557
Police
Physical arrests 691 609 725 608 582 587 617 691 825 722
Parking violations 10,905 7,472 11,815 13,151 14,246 14,689 14,246 18,196 18,196 17,165
Traffic violations 5,541 4,227 5,005 5,549 5,059 5,617 6,312 9,400 9,400 10,001
Fire
Emergency responses 2,453 2,987 3,210 3,260 2,451 2,340 2,283 2,300 2,102 2,008
Inspections 1,729 1,499 2,515 2,515 2,485 3,408 2,641 2,173 2,638 2,615
Highways and streets
Street resurfacing (miles) 3.4 20.0 7.6 1 4 - 1 10 1 3
Culture and recreation
Classes offered 426 448 347 452 489 362 459 326 352 352
Facility rentals 514 500 626 740 803 105 44 55 52 51
* The City of San Gabriel began tracking website visitors in 2013-14.
Source: City Departments
Fiscal Year
157
City of San GabrielCapital Asset Statistics by Function
Last Ten Fiscal Years
2019 2018 2017 2016 2015 2014 2013 2012 2011 2010
Function/Program
Public safety
Police
Stations 1 1 1 1 1 1 1 1 1 1
Patrol units 43 40 40 38 34 38 37 35 27 26
Fire
Fire stations 2 2 2 2 2 2 2 2 2 2
Highways and streets
Streets (miles) 80 80 80 80 80 80 72 72 72 72
Streetlights 1043 848 834 816 800 800 800 800 800 800
Traffic signals 36 37 37 36 36 36 36 36 36 36
Culture and recreation
Parks acreage * 31.62 31.62 29.27 25 25 25 25 25 25 25
Parks 7 7 6 4 4 4 4 4 4 4
Swimming pools 1 1 1 1 1 1 1 1 1 1
Tennis courts 6 6 6 6 6 6 6 6 6 6
Community centers 2 2 2 2 2 2 2 2 2 2
* By agreement between the City of San Gabriel and the San Gabriel Unified School District, the City will use parks owned by the school district as public parks.
The parks are: Coolidge School Park 1.75 acres
Washington School Park 2.52 acres
Source: City Departments
TABLE 17
Fiscal Year
158