Comprehensive Annual Financial Report - The City of Los Angeles

CITY OF LOS ANGELES

CALIFORNIA

Comprehensive Annual Financial Report

For the Fiscal Year Ended June 30, 2012

Office of the Controller Wendy Greuel, City Controller

CITY OF LOS ANGELES CALIFORNIA



Prepared by the Office of the Controller Wendy Greuel, City Controller

CITY OF LOS ANGELES CALIFORNIA



Prepared by the City of Los Angeles Controller’s Office

Matias Farfan - Director of Financial Analysis & Reporting Sally A. Rocio - Financial Management Specialist V

GAAP Compliance Section

Elizabeth C. Lee - Financial Management Specialist IV Julieta A. Barba - Principal Accountant II Marlene D. Salandanan - Principal Accountant I Marie A. De Los Reyes - Senior Accountant II Josefina T. Quiocho - Senior Accountant II Louella O. Ubaldo - Senior Accountant II Victoria M. Orellana - Senior Clerk Typist

CITY OF LOS ANGELESCOMPREHENSIVE ANNUAL FINANCIAL REPORT


TABLE OF CONTENTS

Page

INTRODUCTORY SECTION

Letter of Transmittal …………………………………….………………………………………...………………… iOrganizational Chart …………………………….…………………..……………………………………………… viiiCity Officials ……………………..…………………..……………………………………………………………… ixCity Controller ……………………………………..………………………………………………………………… xGFOA Certificate of Achievement for Excellence in Financial Reporting …………………………………… xi

FINANCIAL SECTION

Independent Auditor's Report……………………………………………………………………………………… 1Management's Discussion and Analysis (Required Supplementary Information) …………………………… 3

BASIC FINANCIAL STATEMENTS

Government-wide Financial StatementsStatement of Net Assets …………………………………………………………………………………… 33Statement of Activities ……………………………………………………………………………………… 34

Fund Financial StatementsBalance Sheet - Governmental Funds …………………………………………………………………… 35Reconciliation of the Balance Sheet of Governmental Funds

to the Statement of Net Assets ……………………………………………………………………… 39Statement of Revenues, Expenditures

and Changes in Fund BalancesGovernmental Funds ………………………………………...…………… ………………………. 40

Reconciliation of the Statement of Revenues,Expenditures, and Changes in Fund Balances of Governmental Fundsto the Statement of Activities ………………………………………………………………………… 42

Statement of Revenues, Expenditures, and Changes in Fund BalancesBudget and Actual (Non-GAAP Budgetary Basis)General Fund ………………………………………………………………………………………… 44

Statement of Revenues, Expenditures, and Changes in Fund Balances (Deficit)Budget and Actual (Non-GAAP Budgetary Basis)Community Development Fund …...…………..…………………………………………………… 45

Statement of Revenues, Expenditures, and Changes in Fund BalancesBudget and Actual (Non-GAAP Budgetary Basis)Proposition A Local Transit Assistance Fund ……………………………………………………… 46

Statement of Revenues, Expenditures, and Changes in Fund BalancesBudget and Actual (Non-GAAP Budgetary Basis)Solid Waste Resources Fund ……………………………………………………………………… 47

Statement of Fund Net Assets Proprietary Funds……………………………………………………………………………………… 48

Statement of Revenues, Expenses, and Changes in Fund Net AssetsProprietary Funds …………………………………………………………………………………… 52

Statement of Cash FlowsProprietary Funds …………………………………………………………………………………… 54

Statement of Fiduciary Net AssetsFiduciary Funds ……………………………………………………………………………………… 58

Statement of Changes in Fiduciary Net AssetsFiduciary Funds ……………………………………………………………………………………… 59

Continued…



TABLE OF CONTENTS (Continued)

Page

Notes to the Basic Financial Statements (Index Page 60) ……………………………………………………… 61

REQUIRED SUPPLEMENTARY INFORMATION (OTHER THAN MD&A)

Schedule of Funding ProgressBenefit Pension Plans ………………………………………………………………………………… 197Other Postemployment Benefits Healthcare Plans ……………………………………………… 197

Condition Rating for City Bridges …………………………………………………………………………… 198Comparison of Needed-to-Actual Maintenance/Preservation Costs …………………………………… 198

COMBINING AND INDIVIDUAL FUND FINANCIAL STATEMENTS AND SCHEDULES

Combining Balance Sheet - Other Governmental Funds ……………………………………………… 200Combining Statement of Revenues, Expenditures

and Changes in Fund BalancesOther Governmental Funds ………………………………………………………………………… 202

General FundSupplemental Schedule of Budget Appropriations,

Expenditures and Other Financing Uses By FunctionBudget and Actual (Non-GAAP Budgetary Basis) ………………………………………… 203

Supplemental Schedule of Budget Appropriations,Expenditures, and Other Financing Uses By Function and ObjectBudget and Actual (Non-GAAP Budgetary Basis) ………………………………………… 205

Special Revenue FundsCombining Balance Sheet

Nonmajor Special Revenue Funds …………………………………………………………… 214Combining Statement of Revenues, Expenditures

and Changes in Fund Balances (Deficit) Nonmajor Special Revenue Funds …………………………………………………………… 222

Budgetary Comparison Schedule(Non-GAAP Budgetary Basis) Annually Budgeted Nonmajor Special Revenue Funds …………………………………… 226

Reconciliation of Operations on Budgetary Basis to the GAAP BasisNonmajor Special Revenue Funds …………………………………………………………… 266

Supplemental Schedule of Appropriations,Expenditures and Other Financing UsesBudget and Actual (Non-GAAP Budgetary Basis)All Budgeted Special Revenue Funds ...…………………………………………………… 267

Debt Service FundsCombining Balance Sheet

Nonmajor Debt Service Funds .……………………………………………………………… 273Combining Statement of Revenues, Expenditures

and Changes in Fund BalancesNonmajor Debt Service Funds ……………………………………………………………… 276

Budgetary Comparison Schedule(Non-GAAP Budgetary Basis) Annually Budgeted Nonmajor Debt Service Funds ………………………………………… 279

Reconciliation of Operations on Budgetary Basis to the GAAP BasisNonmajor Debt Service Funds ……………………………………………………………… 294

Continued…




Page

COMBINING AND INDIVIDUAL FUND FINANCIAL STATEMENTS AND SCHEDULES (Continued)

Capital Projects FundsCombining Balance Sheet

Nonmajor Capital Projects Funds…………………………………………………………… 296Combining Statement of Revenues, Expenditures

and Changes in Fund BalancesNonmajor Capital Projects Funds ……………………………….…………………………… 298

Budgetary Comparison Schedule(Non-GAAP Budgetary Basis)Annually Budgeted Nonmajor Capital Projects Funds …………………………………… 300

Reconciliation of Operations on Budgetary Basis to the GAAP BasisNonmajor Capital Projects Funds …………………………………………………………… 303

Supplemental Schedule of Appropriations,Expenditures and Other Financing UsesBudget and Actual (Non-GAAP Budgetary Basis) All Budgeted Capital Projects Funds …………………………..…………………………… 304

Fiduciary FundsCombining Statement of Fiduciary Net Assets

Pension and Other Employee Benefits Trust Funds ……………………………………… 306Combining Statement of Changes in Fiduciary Net Assets

Pension and Other Employee Benefits Trust Funds ……………………………………… 307Combining Statement of Fiduciary Net Assets

Pension Trust Funds …………………………………………………………………………… 308Combining Statement of Changes in Fiduciary Net Assets

Pension Trust Funds …………………………………………………………………………… 309Combining Statement of Fiduciary Net Assets

Other Employee Benefits Trust Funds ……………………………………………………… 310Combining Statement of Changes in Fiduciary Net Assets

Other Employee Benefits Trust Funds ……………………………………………………… 311Combining Statement of Fiduciary Assets and Liabilities

Agency Funds ………………………………………………………………………………… 312Combining Statement of Changes in Fiduciary Assets and Liabilities

Agency Funds ………………………………………………………………………………… 313

STATISTICAL SECTION

Financial TrendsNet Assets by Category

Accrual Basis of AccountingLast Ten Fiscal Years ………………………………………………………………………………… 316

Changes in Net AssetsAccrual Basis of AccountingLast Ten Fiscal Years ………………………………………………………………………………… 318

Fund Balances - Governmental FundsModified Accrual Basis of AccountingLast Ten Fiscal Years ………………………………………………………………………………… 322

Changes in Fund Balances - Governmental FundsModified Accrual Basis of AccountingLast Ten Fiscal Years ………………………………………………………………………………… 324

Continued…




Page

Financial Trends (continued)Tax Revenues By Source- Governmental Funds

Modified Accrual Basis of AccountingLast Ten Fiscal Years ………………………………………………………………………………… 326

Revenue Capacity Assessed and Estimated Actual Value of Property

Last Ten Fiscal Years ………………………………………………………………………………… 329Direct and Overlapping Property Tax Rates

Tax Rate Area No. 4Last Ten Fiscal Years ………………………………………………………………………………… 330

Ten Largest Property TaxpayersSecured Assessed ValuationCurrent and Nine Years Ago ………………………………………………………………………… 331

Property Tax Levies and CollectionsLast Ten Fiscal Years ………………………………………………………………………………… 332

Energy Sold by Type of CustomerPower Enterprise FundLast Ten Fiscal Years ………………………………………………………………………………… 333

Average Number of Customers for Energy SalesPower Enterprise FundLast Ten Fiscal Years ………………………………………………………………………………… 333

Debt CapacityRatios of Outstanding Debt By Type

Last Ten Fiscal Years ………………………………………………………………………………… 336Ratios of Net General Bonded Debt

to Assessed Value and Per CapitaLast Ten Fiscal Years ………………………………………………………………………………… 338

Direct and Overlapping Governmental Activities Debt …………………………………………………… 339Ratios of General Bonded Debt Outstanding and Legal Debt Margin

Last Ten Fiscal Years ………………………………………………………………………………… 340Pledged Revenue Coverage

Last Ten Fiscal Years ………………………………………………………………………………… 342

Demographic and Economic InformationDemographic and Economic Statistics

Last Ten Fiscal Years ………………………………………………………………………………… 345Principal Employers

Current Year and Nine Years Ago ………………………………………………………………… 346

Operating InformationNumber of City Government Employees by Function/Program

Full-Time EquivalentLast Ten Fiscal Years ………………………………………………………………………………… 348

Operating Indicators by Function/ProgramLast Ten Fiscal Years ………………………………………………………………………………… 352

Capital Assets InformationLast Ten Fiscal Years………………………………………………………………………………… 364

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PROFILE OF THE GOVERNMENT The City of Los Angeles is the second most populous city in the nation with a 2012 population of 3,825,297. With an area of 470 square miles, Los Angeles is located in the southern part of the State of California and is the principal city of a metropolitan region that stretches from the City of Ventura to the north, to the City of San Clemente to the south, and to the City of San Bernardino to the east. Founded in 1781, Los Angeles was for its first century a provincial outpost under a succession of Spanish, Mexican, and American rule. The City was incorporated in 1850 under the provisions of a City Charter. The current Charter was approved by the electorate on June 8, 1999 and became operative on July 1, 2000. The City operates under a Mayor-Council form of government. As Executive Officer, the Mayor supervises the administrative process of the City and works with the Council in matters relating to legislation, budget and finance. As governing body of the City, the 15-member full-time Council enacts ordinances, levies taxes, authorizes contracts and public improvements, adopts zoning and other land use contracts, and provides necessary resources for the budgetary departments and offices of the City. Council action is subject to the approval or veto of the Mayor, and Council may override a Mayoral veto by a two-thirds vote. The Charter provides for an independently elected City Attorney and independently elected City Controller. As discussed in Note 1B of the Notes to the Basic Financial Statements beginning on page 61, the City's reporting entity consists of 34 departments, bureaus, commissions and offices, and three pension systems governed by the City Charter. The City's reporting entity also includes, as blended component units, the Los Angeles Convention and Exhibition Center Authority, the Los Angeles Harbor Improvement Corporation, and the Municipal Improvement Corporation of Los Angeles (MICLA). The Community Redevelopment Agency of the City of Los Angeles, a governmental entity that was legally separate from the City and previously discretely presented in the City’s financial statements, has been eliminated pursuant to the State of California Assembly Bill 1X26. Public services provided by the City include: police; fire and paramedics; residential refuse collection and disposal; wastewater collection and treatment; street maintenance and other public works functions; enforcement of ordinances and statutes relating to building safety; public libraries; recreation and parks; community development; housing and aging services; planning; airports; harbor; power and water services; and, convention center. The annual budget serves as the foundation for the City’s financial planning and control. The City maintains budgetary controls to ensure that legal provisions embodied in the budget are complied with and that expenditures do not exceed appropriated amounts. Expenditures are controlled by appropriations at the line item level within each department, consistent with the level set forth in the resolution adopting the annual operating budget. The City also maintains an encumbrance accounting system that controls spending based on the expenditure budget; composed of appropriations, allotments, or a combination of both. Additional information about the City’s budget process can be found in Note 3A in the Notes to the Basic Financial Statements beginning on page 80. LOS ANGELES ECONOMY The City is one of the premier commercial and cultural centers in the nation and ranked 21st globally in terms of Gross Domestic Product (GDP). Because of the size and diversity of its economy, experts opine that Los Angeles is well placed to benefit from the eventual national economic recovery. For the past year, Los Angeles County employment grew in nearly all industry sectors, except in manufacturing and government. Employment improved in sectors such as private education, professional and health services, technology, international trade, and entertainment. International

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trade is up as evidenced by increases in Airports air cargo and passenger volume, as well as tonnage handled by the Port of Los Angeles. Production of feature films and commercials rose slightly. Modest growth is expected in health services, which account for over 11.0% of total nonfarm jobs in the County. The technology sector added on average 2.5 times more jobs than other industries since the Great Recession. One of every four jobs created statewide was in the leisure and hospitality industry. This trend favors Los Angeles, a major tourist destination for domestic and international travelers. A record 41.4 million people visited Los Angeles in 2012 based on data from the Los Angeles Tourism and Convention Board. Direct visitor spending, hotel occupancy and hotel room nights set all-time record highs. The U.S. Travel Association expects international tourism will be bolstered by a presidential executive order that simplifies the visa process for certain countries. PFK Consulting (PFK) forecasts positive growth in tourism, hotel occupancy and room rates. Recent City approvals and other stakeholder agreements pave the way for Anschutz Entertainment Group to negotiate a long-term lease with a National Football League franchise and to build a new $1.0 billion football stadium (Farmers Field). The preliminary plans for Farmers Field involve enhancement and expansion of Los Angeles Convention Center’s (LACC) exhibit space by 2016. Since LACC is a primary driver of demand for hotel rooms in Los Angeles, its expansion and the proposed Farmers Field are anticipated to generate a large upside for the leisure and hospitality industry. Los Angeles is highly dependent on a strong real estate market for economic activity and job creation. Despite extreme housing market volatility these past few years, the assessed valuation of Los Angeles’ property tax base was stable and is now on an upward track. Trends indicate a market that has hit near bottom. The housing recovery showed momentum on January 2013 as median home prices increased by 17.6%. Home sales tracked by DataQuick were the highest in six years, with sales to investors and cash buyers at near record levels. Foreclosure resales and notices of default in the state were at their lowest since 2007 and 2006, respectively. Beacon Economics projects home price increases of 3.0% to 4.0% annually from 2013 to 2016. With interest at historic lows and projected employment growth, commercial real estate analysts predict that market fundamentals should strengthen and drive office vacancies lower. In January 2013, investment and the sale market for office buildings in Los Angeles spiked 70.0%, while median prices increased 10.0%. Several large ongoing or approved construction projects are anticipated to create jobs. Dodger Stadium estimates completion of its $100.0 million renovation program to upgrade the 51-year old ballpark in time for the 2013 baseball season. Slated for completion in 2017, Korean Airlines unveiled a $1.0 billion hotel, retail and office skyscraper to be the tallest building in the West. The Los Angeles World Airports Department is in the midst of a $4.1 billion capital program to upgrade Tom Bradley International, central utility plant, terminals and others. Retail projects include the recently completed $40.0 million renovation of FIGat7th and possible upgrades for Macy’s Plaza (currently in escrow), which complement residential units and the sports and entertainment complex consisting of LA Live, Staples Center and future Farmers Field. Although challenges lie ahead and potential downside risks remain that may adversely impact the moderate economic recovery, economists are cautiously optimistic and predict a measured growth for Los Angeles.

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RELEVANT FINANCIAL POLICIES AFFECTING THE CITY’S OPERATIONS The City has experienced a significant structural imbalance between revenue and expenditure growths made worse by the Great Recession. To ensure the City’s financial health and its sustainability, it embarked on a series of strategies and solutions to address its significant near-term and projected long-term budget shortfalls. After several years of experiencing mid-year budgetary deficits, the City’s annual budgets have stabilized. Annual budgetary deficits, though lower than prior forecasts, are still projected for future fiscal years. Efforts to reduce the City’s structural budget deficits are discussed below. They include labor cost reductions, revenue enhancement, and operating cost reductions and efficiencies. Labor Cost Reductions The City’s largest cost drivers are salaries and benefits, including healthcare, workers’ compensation, and retirement benefits. The City has made significant cuts to personnel cash expenditures through the following: furloughs; layoffs; a managed hiring program to control employment; expanded use of part-time employees such as part-time traffic officers; increased sworn and civilian employee retirement contributions by two percent to four percent; increased medical benefit contributions for certain bargaining units; and increased banked hours for excess sick leave and overtime. The City plans to implement best practices in risk management including training and improved tracking of costs to lower the City’s workers’ compensation and other liabilities. It will also develop a methodology to hold general managers accountable for risk management liabilities. In October 2012, the City approved a second pension tier for the Los Angeles City Employees’ Retirement System applicable to civilian employees hired on or after July 1, 2013. The new tier raised the retirement age to 65, capped the maximum retirement allowance at 75.0% of final compensation, lowered the maximum retirement factor to 2.0%, eliminated pension spiking and added risk sharing with employees. Revenue Enhancement The City continued to achieve full cost recovery for services by increasing the following fees: fire industrial building inspection and plan review; planning; engineering; peak hour compliance; zoo admission fees; and, related cost reimbursements by special funds. In addition, it increased revenues through ambulance billing efficiencies; surplus transfers from special funds; increased reimbursement for fire emergency medical services pursuant to Assembly Bill 678; and, increased parking citations receipts through productivity improvements, an expanded part-time traffic officer program, and increased parking fines for certain violations. Additionally, other revenue enhancement strategies are being pursued. The City created and filled a new Inspector General position to provide guidance and to monitor progress of revenue and collections performance citywide. The City is studying implementation of a citywide permit revocation program to enforce payments of permits and fees. In March 2013, voters will consider Proposition A, a ballot measure, to increase the City’s sales tax by a half-cent. If approved, the receipts would be used to reduce the City’s structural deficits. Operating Costs Reductions and Efficiencies and Departmental Consolidations The City continues to focus on reducing operating costs, increasing efficiencies and improving services to its residents. These include the consolidation of personnel functions under the Personnel Department; and transferring Office of Public Safety function from General Services to the Police Department. Other departmental consolidations being considered are the Housing Department and the Community Development Department; Planning and Building and Safety; and, Transportation Department and Public Works Bureaus of Street Lighting and Street Services. The City is expediting

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a third party review and analysis of the fire department deployment and overtime. The City is also seeking proposals for public/private partnerships such as alternative management of the LACC and animal shelters. The most recently approved financial status report projects some receipts to be on track or above budget with some at risk. It also projected a budgetary shortfall of $216.0 million for fiscal year 2014. However, it may be lowered due to revised City contribution rates for sworn and civilian retirement. To help address this shortfall, the City plans to build its Budget Stabilization Fund during fiscal year 2013 to balance its fiscal year 2014 budget. MAJOR INITIATIVES To achieve fiscal sustainability, improve service delivery to its citizens, promote an attractive business climate, and create job opportunities, the City is pursuing the following key initiatives: a) continued pension reform; b) healthcare costs reductions; c) public private partnerships; d) performance budgeting; and, e) economic development programs to increase revenues and create jobs. The City will continue to work with its labor partners to achieve additional savings related to salary, pension and healthcare costs. Stated potential public private partnerships include City parking assets and ambulance transport. As previously mentioned, proposals are currently being requested for an alternative management structure for the LACC and animal shelters. In line with the Controller’s road map to the way the City approaches the budgeting process, the City is implementing performance based budgeting to help it measure service delivery, to assist policy makers in determining core priorities, and to hold managers accountable for achievement of goals. The Mayor mandated departments to submit actual performance data for fiscal year 2012, estimates for fiscal year 2013, and proposed outcomes for fiscal year 2014. Performance metrics are to be integrated with strategic planning in the budget process. For fiscal year 2014, certain departments are required to submit strategic plans. Finally, the City continues to develop and implement economic development programs. The City continues its efforts to promote business development and to spur job creation. Upon the dissolution of the City’s Community Redevelopment Agency, the City lost an important economic development tool that contributed to the revitalization of communities. The City established a new Economic Development Department, to be associated with a non-profit economic development organization, to maximize the City’s investments, stimulate job growth, create jobs and expand the local tax base. The Office of Contractor Relations, as part of the Mayor’s Economic and Business Policy Office, was created to make it easier to do business with the City; affirming the City’s commitment to include minority-, veteran- and women-owned businesses in contracting opportunities; and placing a new emphasis on small and local business. In November 2012, the City approved extension of the business tax exemption by another three years for new businesses established before December 31, 2015. The program is credited with bringing innovative, high-growth companies like Google to Los Angeles. Also, elimination of the auto dealer business tax for new car dealerships became effective January 1, 2013 through 2020. Other incentives are going through the legislative committee process. The Los Angeles Mayor’s Council on Innovation and Industry (LAMCII) assembled 25 business leaders from across the innovative growth sectors, universities, and professional services to focus

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Operating

CHARTER DEPARTMENT WITH FULL-TIME COMMISSION

STATE LAW DEPARTMENTS HEADED BY CITY COMMISSIONS

INDEPENDENT CHARTER DEPARTMENTS HEADED BY CITIZEN COMMISSIONS

CHARTER DEPARTMENTS WITH CITIZEN COMMISSIONS

ELECTED OFFICIALS

CHARTER OFFICES AND CHARTER DEPARTMENTS HEADED BY COMMISSIONS

ORDINANCE DEPARTMENTS WITH CITIZEN COMMISSIONS

ORDINANCE DEPARTMENTS

ORGANIZATION OF THE CITY OF LOS ANGELES

Operating

Support Operating

Operating Operating & Support

Chief Legislative Analyst

KEY

Operating Operating

COUNCIL 15 Member

Governing Body CITY ATTORNEY CONTROLLER

ELECTORATE

MAYOR Chief Executive

FY 2011-12

Operating Operating City Clerk

Operating

Finance/ City Treasurer

Fire (Commission)

Police (Commission)

Ethics Commission (Commission)

City Administrative

Officer

Personnel Planning Neighborhood

Empowerment

Employee Relations Board

Information Technology

Agency

Community Development

Planning Housing

El Pueblo

Aging Emergency

Management

Cultural Affairs Building & Safety Convention

Center Transportation Zoo Animal Services Disability

Department of Water & Power Harbor

Los Angeles World Airports Library Recreation & Parks City Employees’

Retirement System

Fire & Police Pension System

Housing Authority

Bureau of Sanitation

Bureau of Street Lighting

Bureau of Street Services

Bureau of Engineering

Bureau of Contract

Administration

Board of Public Works

Operating General Services

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CITY OFFICIALSCity of Los Angeles, California

Antonio Villaraigosa Carmen A. Trutanich Wendy GreuelMayor City Attorney City Controller

Herb J. Wesson, Jr. Ed P. Reyes Tom LaBonge Paul Krekorian Dennis P. Zine10th District 1st District 4th District 2nd District 3rd District

Council President President Pro Tempore Asst. Pres. Pro Tempore

Paul Koretz Tony Cárdenas Richard Alarcón Bernard Parks Jan Perry5th District 6th District 7th District 8th District 9th District

Bill Rosendahl Mitchell Englander Eric Garcetti José Huizar Joe Buscaino11th District 12th District 13th District 14th District 15th District

NON-ELECTED FISCAL OFFICERS

CITY COUNCIL

Director of FinanceCity Treasurer

Antoinette D. Christovale

City AdministrativeOfficer

Miguel A. Santana

General Manager & City Purchasing AgentDepartment of General Services

Tony M. Royster

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WENDY GREUELCITY CONTROLLER

The City Charter establishes the Controller as an elected official and gives the Controller the responsibility forserving as the auditor and chief accounting officer of the City. The Charter guarantees the independence of theOffice, and provides for better accountability to the public and a more direct form of public control over the fiscalaffairs of the City, in keeping with the established principle of checks and balances exercised for both theexecutive and legislative branches of municipal government. The Controller is required to exercise generalsupervision over the accounts of all offices and departments of the City, including the independent departments ofAirports, Water and Power, and Harbor (Port of Los Angeles).

Wendy Greuel was sworn in as City Controller on July 1, 2009 for a four year term. She is the second womanelected to citywide office in the history of Los Angeles.

The City Controller is also the Controller for the following governmental agencies:Los Angeles Convention and Exhibition Center AuthorityMunicipal Improvement Corporation of Los Angeles (MICLA)El Pueblo de Los Angeles State Historical Park (Plaza)

EXECUTIVE STAFFCLAIRE DANIEL SHANNON MARISOL FAITH FARID MATIASBARTELS TARICA MURPHY ESPINOZA MOK SAFFAR FARFAN

Chief Deputy Controller Deputy Controller Deputy Controller Principal Director of Auditing Director ofDeputy Controller Government Relations Communications Community Affairs Deputy Controller Financial Analysis

and Reporting

NAM HUYNH Director of SystemsSALLY ROCIO Financial Analysis and ReportingMIN CHEN Financial OperationsJOVONNE LAVENDER Management ServicesJOSEPHINE PALOMINO PaymasterROSEMARY GO Payroll

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633 WEST 5th STREET, SUITE 3320 LOS ANGELES, CA 90071

(213) 736-6664 TELEPHONE (213) 736-6692 FAX

www.simpsonandsimpsoncpas.com

SIMPSON & SIMPSON CERTIFIED PUBLIC ACCOUNTANTS

PARTNERS BRAINARD C. SIMPSON, CPA

MELBA W. SIMPSON, CPA

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Honorable Members of the City Council City of Los Angeles, California

INDEPENDENT AUDITOR’S REPORT

We have audited the accompanying financial statements of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of the City of Los Angeles, California (City), as of and for the fiscal year ended June 30, 2012, which collectively comprise the City’s basic financial statements as listed in the table of contents. These financial statements are the responsibility of the City’s management. Our responsibility is to express opinions on these financial statements based on our audit. We did not audit the financial statements of the following City departments/funds, which are reported as enterprise and pension trust funds: Departments of Airports, Harbor, Water and Power, Los Angeles Fire and Police Pension System, and Los Angeles City Employees’ Retirement System, which represent the following percentages of assets and revenues/additions as of and for the fiscal year ended June 30, 2012:

Opinion Unit Assets Revenues/Additions Business-type Activities 87% 91% Each Major Enterprise Fund: Airports, Harbor, Power, and Water 100% 100% Aggregate Remaining Fund Information: Los Angeles Fire and Police Pension System and Los Angeles City Employees’ Retirement System 69% 9%

Those financial statements were audited by other auditors whose reports thereon have been furnished to us, and our opinion, insofar as it relates to the amounts included for the City funds described above, is based solely on the reports of the other auditors. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit and the reports of the other auditors provide a reasonable basis for our opinions. In our opinion, based on our audit and the reports of the other auditors, the financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of the City, as of June 30, 2012, and the respective changes in financial position and cash flows, where applicable, thereof and the respective budgetary comparisons for the General Fund, Community Development Fund, Proposition A Local Transit Assistance Fund, and Solid Waste Resources Fund, for the fiscal year then ended in conformity with accounting principles generally accepted in the United States of America. As discussed in notes 1.B, 1.E, and 5.F, the California State Legislature enacted legislation that dissolved redevelopment agencies in the State of California as of February 1, 2012. On January 11, 2012, the City Council elected not to serve as the successor agency of the Community Redevelopment Agency of the City of Los Angeles (CRA). Subsequently, on January 25, 2012, the City Council adopted a resolution to assume only the housing functions and activities of the CRA. As a result of the CRA dissolution, the CRA, which was previously reported as a

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discretely presented component unit of the City, is no longer considered a component unit of the City. Due to this change in reporting entity, the City restated its beginning balances. Consequently, CRA’s total assets, liabilities, and net assets as of June 30, 2011 of $916,118 (in thousands), $853,995 (in thousands), and $62,123 (in thousands), respectively, have been eliminated from the City’s financial statements. As of June 30, 2012, the City has yet to assume the housing assets and functions of the CRA. The transition of the housing assets and functions is currently on hold pending the completion of the meet and confer process with the State Department of Finance. Furthermore, as discussed in note 5.F, on April 20, 2012, pursuant to the Dissolution Act, the State Controller issued an order for all cities and other public agencies to reverse any asset transfers unless the city or public agency had committed to a third party for an expenditure or encumbrance of a specific asset prior to June 28, 2011. On November 26, 2012, the City returned certain properties to the Designated Local Authority (DLA) or successor agency as part of this order. While these properties along with others may ultimately be considered for transfer to the City for governmental uses or continued redevelopment as part of the DLA’s Long Range Property Management Plan, the transfer of properties to the City is uncertain at this time. Also, the collectability of certain receivables from the CRA is uncertain at this time. In accordance with Government Auditing Standards, we also issued our report dated February 1, 2013 on our consideration of the City’s internal control over financial reporting and our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements, and other matters. The purpose of that report is to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards and should be read in conjunction with this report in considering the results of our audit. Accounting principles generally accepted in the United States of America require that the Management’s Discussion and Analysis (MD&A) and Required Supplementary Information (Other Than MD&A) on pages 3 through 32 and 197 through 198, respectively, be presented to supplement the basic financial statements. Such information, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management’s responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance. Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the City’s financial statements taken as a whole. As identified in the accompanying table of contents, the introductory section on pages i through xi, the combining and individual funds financial statements and schedules on pages 200 through 314, and the statistical section on pages 316 through 367, are presented for purposes of additional analysis and are not a required part of the financial statements. The combining and individual fund financial statements and schedules are the responsibility of management and were derived from and relate directly to the underlying accounting and other records used to prepare the financial statements. The information has been subjected to the auditing procedures applied by us and the other auditors in the audit of the financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the financial statements or to the financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, based on the auditing procedures applied by us and the other auditors, the information is fairly stated in all material respects in relation to the financial statements taken as a whole. The introductory and statistical sections listed in the accompanying table of contents have not been subjected to the auditing procedures applied by us in the audit of the basic financial statements and, accordingly, we do not express an opinion or provide any assurance on them.

Los Angeles, California February 1, 2013

Management’s Discussion and Analysis

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This section of the Comprehensive Annual Financial Report of the City of Los Angeles (the City) presents a narrative overview and discussion of the City’s financial activities for the fiscal year ended June 30, 2012. We encourage readers to consider the information presented here in conjunction with additional information that we have presented in the letter of transmittal of this report. We hope that the information and the discussions will provide readers with a clear picture of the City’s overall financial condition. FINANCIAL HIGHLIGHTS

• The assets of the City exceeded liabilities at the close of fiscal year 2012 by $21.4 billion. The net assets of $21.4 billion consisted of: $14.3 billion investment in capital assets, net of related debt; $5.7 billion (restricted net assets) represents resources that are subject to certain restrictions on how they may be used; $3.2 billion (unrestricted net assets) may be used to meet the City’s obligations for its business-type activities; and $1.8 billion deficit of governmental activities.

• The City’s financial activities during the fiscal year resulted in an increase in total net assets of $929.8 million. Governmental activities increased by $344.5 million while the business-type activities increased by $585.3 million.

• As of June 30, 2012, the aggregate ending fund balance of the City’s governmental funds was $3.8 billion, an increase of $215.9 million from June 30, 2011. Of the combined fund balances of $3.8 billion, $2,549.0 million or 67.1% are restricted, $871.3 million or 22.9%, are assigned to specific purposes, $265.5 million or 7.0% are unassigned, and $113.5 million or 3.0% are nonspendable fund balances.

• At the end of the fiscal year, the General Fund shows a fund balance of $571.7 million, of which $31.1 million are nonspendable, $267.7 million are assigned for various purposes, and $272.9 million are unassigned.

• The City’s bonded debt and long-term notes payable at June 30, 2012 totaled $21.4 billion, a net decrease of $196.7 million from the prior year’s balance of $21.6 billion.

OVERVIEW OF THE FINANCIAL STATEMENTS

This annual report consists of management’s discussion and analysis (MD&A), basic financial statements, including the accompanying notes to the basic financial statements, required supplementary information, and combining statements and schedules for the nonmajor governmental and fiduciary funds. The basic financial statements comprise three components: 1) government-wide financial statements, 2) fund financial statements, and 3) notes to the basic financial statements.

Government-wide Financial Statements are designed to provide readers with a broad overview of the City’s finances and are made up of the following two statements: the Statement of Net Assets and the Statement of Activities. Both of these statements were prepared using accounting methods similar to those used by private-sector businesses, which are the economic resources measurement focus and the accrual basis of accounting.

The statement of net assets

presents information on all of the City’s assets and liabilities, with the difference between the two reported as net assets. Over time, increases or decreases in net assets may serve as a useful indicator of whether the financial position of the City is improving or deteriorating.

Management’s Discussion and Analysis (Continued)

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The statement of activities

Both of these government-wide financial statements distinguish functions of the City that are principally supported by taxes and intergovernmental revenues (governmental activities) from other functions that are intended to recover all or in part a portion of their costs through user fees and charges (business-type activities). The governmental activities of the City include general government, protection of persons and property, public works, health and sanitation (other than sewer services), transportation, cultural and recreational services, and community development. The business-type activities of the City include airports, harbor, power, water, sewer and convention center services.

presents information showing how the City’s net assets changed during the most recent fiscal year. All changes in net assets are reported as soon as the underlying event giving rise to the change occurs, regardless of the timing of related cash flows. Thus, revenues and expenses are reported in this statement for some items that will result in cash flows in future fiscal periods, such as revenues pertaining to uncollected taxes and expenses pertaining to earned but unused compensated absences, and incurred but unpaid workers’ compensation claims.

The government-wide financial statements reflect not only the activities of the City itself (known as the primary government), but also include the Los Angeles Convention and Exhibition Center Authority, the Los Angeles Harbor Improvement Corporation, and the Municipal Improvement Corporation of Los Angeles. Although legally separate, these entities have been included as an integral part of the primary government because the City Council is their governing body and their sole purpose is to provide services entirely to or exclusively for the City. The Community Redevelopment Agency (CRA) was formerly presented as a discrete component unit until State Assembly Bill 1X26 dissolved all California redevelopment agencies as of February 1, 2012. Please see related Notes 1B, 1E and 5F on pages 62, 75, and 190 to 191, respectively.

Fund Financial Statements are designed to report information about groupings of related accounts that are used to maintain control over resources that have been segregated for specific activities or objectives. The City, like other state and local governments, uses fund accounting to ensure and demonstrate finance-related legal compliance. All of the funds of the City can be divided into three categories: governmental funds, proprietary funds and fiduciary funds.

Governmental funds

The governmental funds financial statements are made up of the following: the balance sheet and the statement of revenues, expenditures and changes in fund balances. Both of these statements were prepared using the current financial resources measurement focus and the modified accrual basis of accounting.

are used to account for essentially the same functions reported as governmental activities in the government-wide financial statements. However, unlike the government-wide financial statements, governmental funds financial statements focus on near-term inflows and outflows of spendable resources, as well as on balances of spendable resources available at the end of the fiscal year. Such information may be useful in determining what financial resources are available in the near future to finance the City’s programs.

The budgetary basis statement of revenues, expenditures and changes in fund balances is prepared on a modified cash basis of accounting that is different from generally accepted accounting principles. (Please see Note 3B of the Notes to the Basic Financial Statements beginning on page 82 for additional information on the basis difference.)

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 activities in the government-wide financial statements. By doing so, readers may better understand the long-term impact of the government’s near-term financing decisions. Both the governmental funds balance sheet and the governmental funds statement of revenues, expenditures, and changes in fund balances provide a reconciliation to facilitate this comparison between governmental funds and governmental activities.


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The City maintains several individual governmental funds organized according to their type (general, special revenue, debt service, and capital projects funds). Information is presented separately in the governmental funds balance sheet and in the governmental funds statement of revenues, expenditures, and changes in fund balances for the General Fund, Community Development Fund, Municipal Improvement Corporation Special Revenue and Debt Service Funds, Proposition A Local Transit Assistance Fund, Recreation and Parks Fund, and Solid Waste Resources Fund, which are considered to be major funds. Data from the remaining governmental funds are combined into a single, aggregated presentation. Individual fund data for each of these nonmajor governmental funds is provided in the form of combining statements and schedules elsewhere in this report.

Non-GAAP budgetary basis statements of revenues, expenditures and changes in fund balances have been provided for the General Fund and three other budgeted major funds to demonstrate compliance with the annually appropriated budget. The other budgeted major funds are: Community Development, Proposition A Local Transit Assistance, and Solid Waste Resources.

Proprietary funds

• Enterprise funds are used to report the same functions presented as business-type activities in the government-wide financial statements. The City uses enterprise funds to account for the airports, harbor, power, water, sewer, and convention center operations. All of the City’s enterprise funds, except the convention center, are considered major funds.

are generally used to account for services for which the City charges customers – either outside customers, or other departments/funds of the City. The proprietary funds financial statements provide the same type of information as shown in the government-wide financial statements, only in more detail. The City maintains the following type of proprietary funds:

Fiduciary funds

Notes to the Basic Financial Statements provide additional information that is essential to a full understanding of the data provided in the government-wide and fund financial statements.

are used to account for resources held for the benefit of parties outside the City. The City’s pension trust, other employee benefits trust, and agency funds are reported under the fiduciary funds. Since the resources of these funds are not available to support the City’s own programs, they are not reflected in the government-wide financial statements. The accounting used for fiduciary funds is much like that used for proprietary funds.

Required Supplementary Information, other than MD&A, is presented concerning the City’s progress in funding its obligation to provide pension and other postemployment benefits to City employees. Also included in this section is the condition assessment for City bridges.

The combining and individual fund statements and schedules referred to earlier provide information for nonmajor governmental funds and fiduciary funds and are presented immediately following the required supplementary information.


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GOVERNMENT-WIDE FINANCIAL ANALYSIS

Analysis of Net Assets:

As noted earlier, net assets may serve over time as a useful indicator of a government’s financial position. In the case of the City, assets exceeded liabilities by $21.4 billion at the close of fiscal year 2012.

The following table is a condensed summary of the City’s government-wide net assets:

CITY OF LOS ANGELES Condensed Statement of Net Assets (amounts expressed in thousands)

Governmental Business-type

Activ ities Activ ities Total

FY 2012 FY 2011 FY 2012 FY 2011 FY 2012 FY 2011

Assets:Current and other assets………… 5,786,187$ 5,387,251$ 9,893,965$ 11,480,828$ 15,680,152$ 16,868,079$

Capital assets……………………… 7,245,108 7,139,780 26,226,943 24,306,991 33,472,051 31,446,771

Total assets……………… 13,031,295 12,527,031 36,120,908 35,787,819 49,152,203 48,314,850

Liabilities:Current and other liabilities………… 1,319,141 1,147,865 1,606,545 1,752,260 2,925,686 2,900,125

Long-term liabilities………………… 6,991,627 7,003,127 17,819,020 17,925,546 24,810,647 24,928,673

Total liabilities……………… 8,310,768 8,150,992 19,425,565 19,677,806 27,736,333 27,828,798

Net assets:Invested in capital assets,

net of related debt……………… 4,416,934 4,140,258 9,855,473 9,186,620 14,272,407 13,326,878

Restricted…………………………… 2,086,056 2,030,096 3,625,705 3,586,417 5,711,761 5,616,513

Unrestricted………………………… (1,782,463) (1,794,315) 3,214,165 3,336,976 1,431,702 1,542,661

Total net assets…………… 4,720,527$ 4,376,039$ 16,695,343$ 16,110,013$ 21,415,870$ 20,486,052$

Notes: Rounding off difference may occur in the discussion.

At the end of fiscal year 2012, the City net assets totaled $21.4 billion, of which $14.3 billion or 66.6% reflects its investment in capital assets (e.g., land, infrastructure, buildings, facilities and equipment) less any related outstanding debt used to acquire those assets. The City uses these capital assets to provide services to its citizens; consequently, these assets are not available for future spending. Although the City’s investment in capital assets is reported net of related debt, it should be noted that the resources to repay this debt must be provided from other sources since the capital assets themselves cannot be used to liquidate the debt.

An additional portion of the City’s net assets, $5.7 billion or 26.7%, represents resources that are subject to various restrictions on how they may be used. The remaining balance of $1.4 billion or 6.7% is the net amount of the governmental activities deficit of $1.8 billion, and $3.2 billion unrestricted net assets that may be used to meet the City’s obligations for its business-type activities.


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At the end of fiscal year 2012, the City reported positive results in two categories of net assets except for unrestricted net assets which decreased by $111.0 million or 7.2%. The slight decrease in the deficit balance for governmental activities of $11.8 million was offset by the decrease in unrestricted net assets for business-type activities of $122.8 million. Airports and Power reported decreases in unrestricted net assets while Harbor, Water and Sewer showed positive results. The deficit balance for the governmental activities unrestricted net assets of $1.8 billion should not be considered, of itself, evidence of economic or financial difficulties. The deficit reflects the extent to which the City has deferred to future periods the financing of certain liabilities (i.e. claims and judgments, workers’ compensation, compensated absences, pension and other postemployment benefits). While accounting is primarily concerned with when a liability is incurred, financing focuses on when a liability will be paid. The City, like many other governments, raises and budgets resources needed to liquidate a liability during the year in which the liability is to be liquidated rather than during the year in which the liability is incurred. Key changes in the statement of net assets are as follows:

Capital assets increased by $2.0 billion or 6.4%. The net increase for governmental activities and business-type activities was $105.3 million and $1.9 billion, respectively. For the governmental activities, the increase was primarily due to various projects under construction for recreational, fire, zoo, bridges, stormwater, street lightings, streets, transportation, computer software and various other improvements to City facilities, and acquisition of vehicles for refuse collection and street services. Business-type increases reflect additions and ongoing construction and improvements to modernize airport and harbor terminals, sewer facilities and power and water utility plants.

Current and other assets decreased by $1.2 billion or 7.0%. Governmental activities were $398.9 million higher, while business-type activities fell $1.6 billion. Governmental activities increase in cash and pooled investments of $263.2 million is primarily due to funds reserved to meet the debt service requirements of a Tax and Revenue Anticipation Note (TRAN) after the end of fiscal year 2012; offset by decrease in cash collateral due to the City’s temporary suspension of its securities lending program (SLP), and allocation of unsettled investment at trade date to participating proprietary funds. Governmental activities receivables went up by $151.6 million mainly in taxes receivables, consistent with the growing economy. Intergovernmental receivables also grew due to increased Urban Area Security Initiative homeland security grants, reimbursements from Proposition 1B Infrastructure Bond and Measure R one-half cent sales tax for transportation projects. Temporary suspension of the City’s SLP program and draw downs for capital expenditures and debt service payments resulted in lower cash and pooled investments and restricted assets for business type activities. The City’s current and other liabilities saw a net increase of $25.5 million or 0.8%. Governmental activities grew by $171.3 million as a result of TRAN payable offset by the decrease in obligations under SLP as well as distribution of investment at trade date to proprietary funds as noted above. In addition, accrued compensated absence payable went up by $20.2 million primarily due to sworn officers banked overtime. Business-type activities fell by $145.7 million mainly due to the suspension of obligations under SLP, offset by increased accounts payable and accrued expenses, and derivative instrument liabilities.

Total net assets rose $929.8 million or 4.5% with governmental and business-type activities increases of $344.5 million and $585.3 million, respectively. The amount invested in capital assets, net of related debt, grew by $276.7 million for governmental activities and $668.9 million for business type activities. Significant changes in restricted net assets for governmental activities were increases of $13.6 million for capital projects; $13.9 million for public safety; $27.8 million for public works and sanitation; $34.7 million for cultural and recreational; $20.8 million for community development; and, decreases of $58.1 million for debt service and $8.3 million for other purposes.


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For business-type activities, key changes were increases of $89.2 million for passenger/customer facility charges and $20.8 million for other purposes with decreases of $68.1 million for capital projects. As explained in more detail in subsequent pages, governmental activities unrestricted net assets deficit improved by $11.8 million, while the business-type activities unrestricted net assets declined by $122.8 million.

Analysis of Activities:

CITY OF LOS ANGELES

The following table presents condensed information showing how the City’s net assets changed during the most recent fiscal year. As previously stated, all changes in net assets are reported as soon as the underlying event giving rise to the change occurs, regardless of the timing of related cash flows.

Condensed Statement of Activities (amounts expressed in thousands)

Governmental Business-typeActivities Activities Total

FY 2012 FY 2011 FY 2012 FY 2011 FY 2012 FY 2011Revenues Program Revenues

Charges for Services …………………………………… 1,622,959$ 1,480,999$ 6,170,366$ 6,039,071$ 7,793,325$ 7,520,070$ Operating Grants and Contributions …………………. 1,023,001 924,031 -- -- 1,023,001 924,031 Capital Grants and Contributions ……………………… 96,156 75,744 158,114 174,574 254,270 250,318

General RevenuesProperty Taxes …………………………………………… 1,662,316 1,618,444 -- -- 1,662,316 1,618,444 Utility Users Taxes ……………………………………… 623,721 628,028 -- -- 623,721 628,028 Business Taxes …………………………………………… 440,327 410,888 -- -- 440,327 410,888 Other Taxes ……………………………………………… 458,741 392,405 -- -- 458,741 392,405 Unrestricted Grants and Contributions ……………….. 370,288 390,431 -- -- 370,288 390,431 Unrestricted Investment Earnings ……………………… 21,879 18,814 -- -- 21,879 18,814 Other Revenues ………………………………………… 91,735 75,838 -- -- 91,735 75,838

Total Revenues …………………………………………………… 6,411,123 6,015,622 6,328,480 6,213,645 12,739,603 12,229,267 Expenses General Government ………………………………………… 1,335,180 1,462,581 -- -- 1,335,180 1,462,581 Protection of Persons and Property ……………………… 2,707,892 2,641,343 -- -- 2,707,892 2,641,343 Public Works …………………………………………………… 413,348 342,722 -- -- 413,348 342,722 Health and Sanitation ………………………………………… 416,894 393,827 -- -- 416,894 393,827 Transportation ………………………………………………… 365,841 338,755 -- -- 365,841 338,755 Cultural and Recreational Services…………………….. 445,815 446,805 -- -- 445,815 446,805 Community Development …………………………………… 437,229 429,695 -- -- 437,229 429,695 Interest on Long-term Debt ………………………………… 194,513 190,424 -- -- 194,513 190,424 Airports ………………………………………………………… -- -- 897,380 834,071 897,380 834,071 Harbor ………………………………………………………… -- -- 333,355 310,534 333,355 310,534 Power ………………………………………………………… -- -- 2,870,609 2,964,399 2,870,609 2,964,399 Water …………………………………………………………… -- -- 799,575 791,049 799,575 791,049 Sewer ………………………………………………………… -- -- 553,047 557,269 553,047 557,269 Convention Center …………………………………………… -- -- 39,107 40,400 39,107 40,400 Total Expenses …………………………………………………… 6,316,712 6,246,152 5,493,073 5,497,722 11,809,785 11,743,874 Excess (Deficit) of Revenues Over Expenses ……………….. 94,411 (230,530) 835,407 715,923 929,818 485,393 Transfers ………………………………………………………… 250,077 258,815 (250,077) (258,815) -- -- Special Items Loss on Loan Settlement …..……………………………… -- (47,007) -- -- -- (47,007) Transfer of Properties ………………………………… -- 93,410 -- -- -- 93,410 Increase (Decrease) in Net Assets ……………………………… 344,488 74,688 585,330 457,108 929,818 531,796 Net Assets Beginning of Year …………………………… 4,376,039 4,301,351 16,110,013 15,652,905 20,486,052 19,954,256 Net Adjustment for Prior Years' Intangible Assets -- -- -- -- -- --

Net Assets End of Year ………………………………………… 4,720,527$ 4,376,039$ 16,695,343$ 16,110,013$ 21,415,870$ 20,486,052$


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Governmental Activities For the fiscal year ended June 30, 2012, total expenses for governmental activities of $6.3 billion were $70.6 million or 1.1% higher than the prior year. Total revenues exceeded expenses by $94.4 million. Of the $6.3 billion total expenses, 55.1% was funded by taxes and other general revenues, and the remaining 44.9% was funded by program revenues, transfers from business-type funds and available fund balance. Program revenues are resources obtained from parties outside of the City. They include: (a) amounts received from those who purchase, use or directly benefit from a program; (b) grants and contributions that are restricted to specific programs; and (c) investment earnings that are legally restricted for a specific program.

The following charts are graphical comparisons between June 30, 2012 and 2011, for governmental revenues by source.

Revenues from property taxes, charges for services and operating grants and contributions are the three largest revenue sources for governmental activities. Together, these accounted for 67.2% of total revenues and posted an increase of $284.8 million over fiscal year 2011. Charges for services rose nearly $142.0 million or 9.6% primarily due to an increase of $48.4 million in departmental receipts such as Fire ambulance billings, engineering B-permits, and reimbursements from other special funds for related costs. In addition, revenue from other governmental activities went up mainly due to increased parking receipts of $10.9 million; newly established assessment for a tourism and marketing business improvement district of $12.6 million; reimbursement for Proposition C transportation projects of $5.5 million; Solid Waste fees of $31.4 million; and, various planning, building and safety permits and fees of $13.3 million. Operating grants increased by nearly $99.0 million or 10.7% mainly due to additional grants received from Proposition A transit assistance, ARRA neighborhood stabilization program, and gas tax. Capital grants and contributions rose by $20.4 million mainly due to amortization of bond premium related to bond issuances for stormwater pollution abatement projects. Property tax, up by $43.9 million or 2.7%, was buoyed by the stability in the housing market and gradual but steady rise of median home prices, in addition to early receipt of net tax increment monies distributed to various taxing entities pursuant to the dissolution of CRA. Business and transient occupancy tax grew by $29.4 million and $16.9 million, respectively, in line with the positive uptick in economic activity and boost in the tourism sector. Unrestricted grants and contribution decreased by $20.1 million mainly due to a decline in sales tax receipts and motor vehicle license fees.

Charges for Services25.3%

Operating Grants and

Contributions16.0%

Capital Grants and

Contributions1.5%

Property Tax25.9%

Utility Users Tax

9.7%

Business Tax6.9%

Other Taxes7.1%

Unrestricted Grants and

Contributions5.8%

Other1.8%

FY 2012Total Revenues: $6.41 Billion

Charges for Services24.6%

Operating Grants and

Contributions15.4%

Capital Grants and

Contributions1.3%

Property Tax26.9%

Utility Users Tax

10.4%

Business Tax6.8%

Other Taxes6.5%

Unrestricted Grants and

Contributions6.5%

Other1.6%

FY 2011Total Revenues: $6.02 Billion


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The following charts are graphical comparisons between June 30, 2012 and 2011, of the City’s governmental expenses by function.

Overall expenditures increased by $70.5 million or 1.1% over fiscal year 2011. Combined increases in expenses for protection of persons and property, public works, health and sanitation, as well as transportation, and community development of $194.9 million was offset by decrease of $127.4 million in general government expenses. General government expenses fell by $127.4 million mainly due to lower estimated claims and judgments payable totaling $167.7 million based on actuarial estimates for workers’ compensation and tort liability, offset by increased General Fund expenses of $32.5 million. Protection of persons and property grew by $66.5 million primarily due to increased sworn pension contribution of $60.7 million. Higher expenses in gas tax and Proposition 1B transportation bond program for the street repair and resurfacing program; and increases in capital expenses accounted for the $70.6 million increase in public works. Transportation increased by $27.1 million or 8.0% largely due to increased transportation grants.

Business-type Activities

The City has six business-type activities: airports, harbor, power, water, sewer, and convention center services. The combined operating revenues from their customers and ratepayers of $5.7 billion were $910.3 million more than the $4.8 billion combined operating costs.

Since the proprietary funds provide the same type of information found in the government-wide statements, a more detailed discussion of the activities of the City’s business-type activities is found in the financial analysis of the City’s funds.

$0

$500

$1,000

$1,500

$2,000

$2,500

$3,000

$1,335 $1,462

$2,708 $2,641

$413 $343 $417 $394 $366 $339 $446 $447 $437 $430 $195 $190

In M

illion

s

FY 2012 Total Expenses: $6.32 Billion FY 2011 Total Expenses: $6.25 Billion

General Government Protection of Persons and PropertyPublic Works Health and SanitationTransportation Cultural and Recreational ServicesCommunity Development Interest on Debt


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FINANCIAL ANALYSIS OF THE CITY’S FUNDS

As noted earlier, the City uses fund accounting to ensure and demonstrate compliance with finance-related legal requirements.

Governmental Funds

The focus of the City’s governmental funds is to provide information on near-term inflows, outflows and balances of resources that are available for spending. Such information is useful in assessing the City’s financial requirements. In particular, the unreserved fund balance may serve as a useful measure for the City’s net resources available for spending at the end of the fiscal year.

At June 30, 2012, the City’s governmental funds reported combined fund balances of $3.8 billion. Of the $3.8 billion, $113.5 million are nonspendable associated with inventories, prepaid items and certain advances to other funds, $2,549.0 million are restricted due to constraints on the use of resources imposed by creditors, grantors and certain enabling legislation, $871.3 million are assigned to various specific purposes, and $265.5 million have not been restricted, committed, or assigned to specific purposes within the General Fund.

Governmental functions revenue totaled $6.6 billion, while expenditures were $7.0 billion. Although total receipts were $434.9 million less than total expenditures, other financing sources bridged the gap. Other financing sources include proceeds from issuance of debt and transfers from enterprise funds.

The General Fund is the general operating fund of the City and it includes transactions of the Reserve Fund and other accounts that have General Fund type activity for GAAP reporting purposes. At June 30, 2012, the General Fund reported a total fund balance of $571.7 million, composed of $31.1 million nonspendable fund balance associated with inventories of $19.8 million, and certain advances to other funds of $11.3 million; $267.6 million fund balance assigned for general government purposes; and $272.9 million unassigned fund balance, which includes $0.5 million for economic stabilization, and $272.4 million for reserves, emergency and contingency purposes.


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The following table presents the summary of revenues and expenditures of the General Fund:

City of Los Angeles Summary of Revenues, Expenditures and Other

Financing Sources and Uses - General Fund (amounts expressed in thousands)

Revenues and Other Financing Sources Expenditures and Other Financing Uses

FY 2012 FY 2011 % Change FY 2012 FY 2011 % Change

Revenues ExpendituresProperty Tax es ..................... 1,470,799$ 1,436,707$ 2.4 % General Gov ernment........ 1,257,198$ 1,224,681$ 2.7 %

Sales Tax es ......................... 328,059 299,624 9.5 Protection of Persons

Utility Users' Tax es................ 634,629 618,307 2.6 and Property .............. 2,279,987 2,182,116 4.5

Business Tax es..................... 438,969 424,762 3.3 Public Works................... 165,025 158,050 4.4

Other Tax es.......................... 392,686 359,434 9.3 Health and Sanitation........ 146,270 137,829 6.1

Licenses and Permits.............. 26,241 20,229 29.7 Transportation................. 107,803 113,632 (5.1)

Intergov ernmental................... 7,182 33,704 (78.7) Cultural and Recreational

Charges for Serv ices.............. 510,401 496,551 2.8 Serv ices................... 46,592 46,239 0.8

Serv ices to Enterprise Community

Funds .............................. 245,853 248,263 (1.0) Dev elopment ............. 30,544 32,204 (5.2)

Fines ................................... 147,780 145,731 1.4 Capital Outlay ................ 17,751 17,203 3.2

Special Assessments.............. 1,922 2,332 (17.6) Debt Serv ice- Interest 1,152 -- NA

Inv estment Earnings............... 21,456 18,149 18.2 Debt Serv ice- Cost

Other.................................... 91,357 75,498 21.0 of Issuance ............... 940 1,090 (13.8)

Total Revenues.................... 4,317,334 4,179,291 3.3 Total Expenditures........ 4,053,262 3,913,044 3.6

Other Financing Sources Other Financing UsesTransfers In .......................... 270,660 299,510 (9.6) Transfers Out.................. 486,336 482,183 0.9

Total Revenues and Total Expenditures and Other Financing Other Financing Sources........................... 4,587,994$ 4,478,801$ 2.4 Uses........................ 4,539,598$ 4,395,227$ 3.3

Excess of Revenues Over Expenditures ….. 264,072$ 266,247$ (0.8)

Net Change in Fund Balance.................. 48,396$ 83,574$ (42.1)

Total taxes accounted for nearly $3.3 billion or 75.6% of General Fund revenue. An overall tax receipts increase of $126.3 million or 4.0% over fiscal year 2011 reflected the improvement in the economy. Property tax benefited from additional tax receipts due to the dissolution of CRA; an increase in assessed valuation; and a slight improvement of the collection rate. Growth in economy-sensitive revenues such as sales tax of $28.4 million and business tax of $14.2 million outpaced other receipts. Utility users’ tax receipts, composed of electric, gas and communications users’ taxes, posted a net increase of $16.3 million. An electricity users’ tax receipt increase of $18.2 million was offset by a lower gas users’ tax receipts of $6.4 million due to a decline in natural gas prices. Telephone users’ tax receipts have been declining steadily due to a variety of factors including market competition and changes in wireless plan purchases.


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Other tax receipts were up $33.2 million mainly due to an increase in transient occupancy tax receipts of $19.2 million related to gains in tourism; improvements in enforcement and compliance associated with parking users’ tax collection of $4.2 million; and higher documentary transfer tax receipts of $6.6 million related to improvements in local real estate market activity. Intergovernmental revenues were $26.5 million or 78.7% lower than the prior year due to the elimination of $16.6 million in Vehicle License Fee by State budget action in order to fund community law enforcement programs that previously had been paid by the State general fund; and decreased grant reimbursements totaling $7.6 million. Charges for services increased $13.8 million due to reimbursements from special funds for services. Total General Fund expenditures for fiscal year 2012 were nearly $4.1 billion. Various budget balancing solutions were utilized. Furloughs were imposed on certain bargaining units, along with other budget balancing solutions; such as, salary adjustments; requiring employees to contribute two percent to four percent of their pay for retiree health care beginning July 1, 2012, or freezing benefits for employees not contributing; eliminating positions; and consolidation of treasury and finance functions. The expenditure increase of $140.2 million or 3.6% from the prior fiscal year was primarily in general government and protection of persons and property. The general government expenditures increase of $32.5 million or 2.7% includes: delayed payments for prior year electricity bills and Solid Waste Lifeline program; increased volatility in petroleum and fuel; higher workers’ compensation costs; maintenance of a new financial management system; and maintenance service contracts for the Figueroa Plaza. These increases were partially offset by savings due to Civilian FLEX plan design modifications and stable health care benefit rates. Protection of persons and property expenditures grew 4.5% or $97.9 million mainly due to a nine percentage point increase in the City’s pension contribution rate for sworn salaries; and restoration of furlough funding for civilian employees of the Police and Fire departments. Overall, General Fund revenues exceeded expenditures by $264.1 million, a slight decline of $2.1 million from $266.2 million in fiscal year 2011. Transfers in from other funds amounted to $270.7 million, while transfers out were nearly $486.3 million. The Power Enterprise Fund transfer of $250.1 million accounted for 92.3% of total transfers in. The $486.3 million transfers out included: $148.6 million for parks, cultural, and recreational facilities and activities; $146.0 million for MICLA debt service; and, $191.8 million for departmental operations. The above items contributed to a year end fund balance of $571.7 million; an increase of $51.6 million from the prior year’s fund balance of $520.1 million.


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The following charts are graphical comparisons between June 30, 2012 and 2011, for General Fund revenues by source and expenditures by function.

34.07%

7.60%14.70%

10.17%

9.10%

0.61%0.17%

11.82%

5.69%

3.42% 0.04% 0.50% 2.11%

General Fund Revenues by Source: $4.32 BillionFiscal Year Ended June 30, 2012

Property Taxes (34.07%) Sales Taxes (7.60%) Utility Users Taxes (14.70%)

Business Taxes (10.17%) Other Taxes (9.10%) Licenses and Permits (0.61%)

Intergovernmental (0.17%) Charges for Services (11.82%) Services to Enterprise Funds (5.69%)

Fines (3.42%) Special Assessments (0.04%) Investment Earnings (0.50%)

Other (2.11%)

34.39%

7.18%

14.79%

10.17%

8.59%

0.48%

0.81%11.89%

5.93%3.49%

0.05% 0.43%

1.80%

General Fund Revenues by Source: $4.18 BillionFiscal Year Ended June 30, 2011

Property Taxes (34.39%) Sales Taxes (7.18%) Utility Users Taxes (14.79%)

Business Taxes (10.17%) Other Taxes (8.59%) Licenses and Permits (0.48%)

Intergovernmental (0.81%) Charges for Services (11.89%) Services to Enterprise Funds (5.93%)

Fines (3.49%) Special Assessments (0.05%) Investment Earnings (0.43%)

Other (1.80%)


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31.01%

56.25%

4.07%

3.61%2.66%

1.15% 0.75%

0.50%

General Fund Expenditures by Function: $4.05 BillionFiscal Year Ended June 30, 2012

General Government (31.01%) Protection of Persons and Property (56.25%)

Public Works (4.07%) Health and Sanitation (3.61%)

Transportation (2.66%) Cultural and Recreational Services (1.15%)

Community Development (0.75%) Capital Outlay / Others (0.50%)

31.30%

55.77%

4.04%

3.53%2.91%

1.18%0.82%

0.46%

General Fund Expenditures by Function: $3.91 BillionFiscal Year Ended June 30, 2011

General Government (31.30%) Protection of Persons and Property (55.76%)

Public Works (4.04%) Health and Sanitation (3.53%)

Transportation (2.91%) Cultural and Recreational Services (1.18%)

Community Development (0.82%) Capital Outlay (0.46%)


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The Community Development Fund accounts for federal grant funds for community and economic development within the City. At June 30, 2012, the total fund balance was $123.8 million. Revenues for fiscal year 2012 amounted to $78.2 million, while expenditures totaled $97.6 million.

The Municipal Improvement Corporation Funds account for the activities of the City’s public financing entity, Municipal Improvement Corporation of Los Angeles (MICLA). Acquisition of certain real property and equipment, and construction of buildings and other improvements are financed through the issuance of MICLA certificates of participation and lease revenue bonds. The Debt Service Fund’s aggregate principal and interest expenditures for the year were $294.2 million, while lease payments from the General Fund and certain Special Revenue Funds were $170.4 million. Investment earnings, available fund balance of the MICLA Debt Service Fund and proceeds of lease revenue bonds issued to pay-off commercial paper notes funded the difference of $123.8 million.

The Proposition A Local Transit Assistance Fund accounts for the City’s 25% share of the additional one-half cent sales tax within the County of Los Angeles for public transit programs. At June 30, 2012, the total fund balance was $136.5 million, which reflected a decrease of $11.6 million from the previous fiscal year. Revenue increased by $34.1 million while expenditures increased by $73.7 million.

The Recreation and Parks Fund accounts for the City’s recreation programs and park services. At June 30, 2012, the total fund balance was $269.2 million. The Fund’s total expenditures exceeded its revenues by $123.1 million. Transfers from the General Fund and available fund balance financed the revenues deficiency.

The Solid Waste Resources Fund accounts for the solid waste collection, transfer, recycling, recovery of waste resources, and disposal fees imposed on all single dwellings in the City and on multiple unit dwellings for which the City provides refuse collection services. The Fund was formerly known as Sanitation Equipment Charge Fund. At June 30, 2012, total fund balance was $189.7 million, which reflected an increase of $37.1 million from the previous fiscal year. Revenues increased by $27.2 million while expenditures decreased by $17.9 million.


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Proprietary Funds

The City’s proprietary funds provide the same type of information in the business-type activities column of the government-wide financial statements.

The following table summarizes the operating results of the City’s six enterprise funds:

Business-type ActivitiesChange in Net Assets

For the Fiscal Year Ended June 30, 2012(amounts expressed in thousands)

Other-

Convention

Airports Harbor Power Water Sewer Center Total

Operating Revenues............. 902,157$ 409,787$ 3,081,680$ 811,897$ 516,859$ 0 27,329$ 5,749,709$

Operating Expenses............. (809,370) (300,291) (2,629,541) (650,984) (410,197) (39,002) (4,839,385)

Operating Income (Loss) ……… 92,787 109,496 452,139 160,913 106,662 (11,673) 910,324

Net Nonoperating Revenues

(Expenses)....................... 124,264 (7,560) (110,607) (111,366) (127,683) (79) (233,031)

Capital Contributions 62,441 31,307 26,731 27,482 10,153 -- 158,114

Transfers Out ....................... -- -- (250,077) -- -- -- (250,077)

Change in Net Assets........... 279,492$ 133,243$ 118,186$ 77,029$ (10,868)$ (11,752)$ 585,330$

Business-type ActivitiesChange in Net Assets


Other-

Convention

Airports * Harbor Power Water Sewer Center Total

Operating Revenues ............ 851,166$ 400,503$ 3,125,957$ 756,605$ 506,537$ 26,442$ 5,667,210$

Operating Expenses............. (747,728) (300,163) (2,695,125) (655,068) (424,439) (40,400) (4,862,923)

Operating Income (Loss)...... 103,438 100,340 430,832 101,537 82,098 (13,958) 804,287

Net Nonoperating Revenues

(Expenses)....................... 115,281 (4,268) (142,359) (109,530) (122,155) 93 (262,938)

Capital Contributions............. 75,171 12,059 27,983 48,946 10,415 -- 174,574

Transfers Out........................ -- -- (258,815) -- -- -- (258,815)

Change in Net Assets........... 293,890$ 108,131$ 57,641$ 40,953$ (29,642)$ (13,865)$ 457,108$

* Certain reclassifications have been made to fiscal year 2011 amounts in order to conform

to the fiscal year 2012 presentation. Such reclassifications had no effect on the previously

reported change in net assets.


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Airports

Airports Enterprise Fund (Airports) accounts for the operation, maintenance, and development of Los Angeles International Airport (LAX), LA/Ontario International Airport (ONT), and Van Nuys Airport (VNY). In addition, Airports maintains LA/Palmdale Regional Airport (PMD); however, PMD is not currently certificated by the Federal Aviation Administration.

Airports operating revenues totaled $902.2 million, a $51.0 million or 6.0% increase from the fiscal year 2011. Aviation and non-aviation revenue grew by $37.0 million and $14.0 million, respectively. Revenues from landing fees went up by $14.8 million, or 7.3%. Landed weight increased as a result of gains in LAX passenger and cargo traffic; passenger and cargo rates increased 4.4% and 7.6%, respectively. Building rental revenue posted an increase of $22.5 million or 9.7% as new and renegotiated leases with airlines and other tenants were signed at LAX. Maintenance and operations charges, as a component of building rental, also increased. Non-aviation revenue grew by $14.2 million or 4.9% primarily realized from concessions at LAX. The continued decline in ONT passenger traffic had an offsetting decrease in Airports operating revenues. Fiscal year 2012 operating expenses were $809.4 million, a $61.6 million or 8.2% increase from the prior fiscal year. Salaries and benefits went up by $16.3 million mainly due to a 59.6% increase in the medical cost component of the estimated workers’ compensation liability. Contractual services rose by $20.7 million in line with consulting services required for the LAX capital improvement and modernization projects. Depreciation charges increased by $20.8 million due to the completion of certain major projects at LAX terminals and airfield. A total of $899.0 million was reclassified from construction work in progress to depreciable capital asset categories in fiscal year 2012. The remaining expense accounts had an aggregate increase of $3.8 million. Airports nonoperating activities increased by approximately $9.0 million, mainly due to an increase of $4.2 million in interest and investment income corresponding to improving interest rates; and an increase of $2.7 million in passenger facility charges (PFCs) from the prior fiscal year, consistent with gains in LAX passenger traffic. Customer facility charges also posted an increase of $1.8 million, mostly from LAX rental car business buoyed by passenger traffic. The increase of $1.9 million in other nonoperating revenue was mainly due to higher Build America Bonds subsidy of $0.7 million. Nonoperating expenses increased by $1.7 million primarily due to higher interest expense corollary to additional issuances of revenue bonds to finance capital improvement projects. Eligible expenditures for federal grant reimbursement decreased by $12.7 million in fiscal year 2012. As a result of the above financial changes, the Airports Enterprise Fund’s change in net assets for fiscal year 2012 amounted to $279.5 million, a decline of $14.4 million from fiscal year 2011.

Harbor

The Harbor Enterprise Fund (Harbor) accounts for the operations of the Port of Los Angeles. It provides for shipping, fishing, recreational, and other benefits for the citizens of California and surrounding communities. For the fiscal year ended June 30, 2012, overall operating revenues of Harbor increased by $9.3 million or 2.3%, from $400.5 million to $409.8 million. Shipping service revenue increased by $14.2 million, mainly from wharfage fees of $16.1 million, due to a 3.2% increase in container cargo volume. This was offset by a decrease in land rental of $2.6 million or 6.0% which resulted from a $3.5 million adjustment of an overstatement of a tenant’s prior year rental permit. Revenue from royalties, fees, and other operating revenues declined by $2.6 million primarily due to a decrease of $3.1 million from collection of fees from noncompliant trucks under Harbor’s Clean Truck Program (CTP), as collection of those fees ended in December 2011.


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Operating expenses, before depreciation and amortization, totaled $199.8 million, a decline of $9.9 million or 4.7%, from $209.7 million in the prior fiscal year. Cost of living adjustments for certain MOUs resulted in slightly higher salaries and benefits of $1.2 million, while efforts to promote Harbor business increased marketing and public relations and travel costs by a total of $0.5 million. These increases were offset by reduced other operating Expenses of $10.4 million due to lower litigation and settlement expenses of $3.0 million; reduced administrative expenditures for clean truck monitoring of trucks entering the Harbor and Clean Truck Program (CTP) subsidy payments of $4.7 million; decline in pollution remediation expenses of $8.6 million; offset by an increase of $5.8 million to provide for higher medical and other components of actuarially estimated workers’ compensation liability. Addition of $432.2 million in net depreciable assets during fiscal year 2012 resulted in higher depreciation expense of $10.0 million. Net nonoperating expenses for fiscal year 2012 increased by $3.3 million or 77.1%. Significant changes were as follows: Increase of $1.9 million in investment in the Intermodal Container Transfer Facility Joint Powers Authority; interest and investment income rose by $3.1 million or 47.4% due to higher interest earnings on investment; receipt of $2.5 million in solar power incentive from DWP; interest expense increased by $6.8 million, mainly from the adjustments in capitalized interest; and, a loss of $8.5 million from the sale of Port of Los Angeles High School. As a result of the above financial changes including capital contributions of $31.3 million, the Harbor Enterprise Fund’s change in net assets for fiscal year 2012 increased by $25.1 million to $133.2 million, a 23.2% increase over fiscal year 2011.

Power and Water

The Power and Water Enterprise Funds account for the operations of the Department of Water and Power (DWP) in supplying the City and its inhabitants with water and electric power by constructing, operating, and maintaining facilities located throughout the City and in Inyo and Mono counties. Power During fiscal year 2012, the Power Enterprise Fund’s (Power) operating revenues slightly declined by $44.0 million or 1.4% from the prior fiscal year. Retail revenues remained stable while wholesale revenue declined by $48.0 million. The decrease in wholesale revenue was mainly due to designation of $38 million of this revenue to deferred revenue and transferred to the Rate Stabilization Account. Retail consumption of energy decreased 27 gigawatt hours, or less than 1% year over year while wholesale consumption decreased 271 gigawatt hours. Operating expenses were $66.0 million lower than fiscal year 2011, driven primarily by an $82.0 million decrease in other operating expenses. Fuel and Purchased Power expenses increased $24.0 million due to a year-over-year increase of $56.0 million in renewable generation expenditures. Other operating expenses declined by $82.0 million primarily due to a decrease of $70.0 million in the expensing of demand side management (energy efficiency) and solar incentive program expenditures, which are treated as regulatory assets, and therefore, capitalized and amortized over the expected useful life. Lower transmission plant and steam plant maintenance costs accounted for the $14.0 million decrease in maintenance expenses. Depreciation and amortization expense rose by $7.1 million primarily due to capital improvements in Steam Production plant, as well as additional amortization expense from the regulatory assets mentioned above.


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The major nonoperating activities of Power for fiscal year 2012 included the transfer of $250.1 million to the City’s General Fund, interest income earned on investments of $78.0 million, $35.0 million in federal bond subsidies, and $237.0 million in debt expenses. The transfer to the City’s General Fund is based on 8% of the previous year’s operating revenues of $3.1 billion. Interest income decreased by $4.0 million as a result of declining market interest rates coupled with decreases in funds held in the related restricted investments. The $7.0 million increase in federal bond subsidies is directly related to interest payment subsidies that are received from the U.S. Treasury. Interest expenses on debt decreased by $7.0 million mainly due to the debt refinancing undertaken by Power during fiscal 2011. As a result of the above financial changes, including capital contributions of $26.7 million, Power’s change in net assets for fiscal year 2012 amounted to $118.2 million, an increase of $60.5 million from fiscal year 2011.

Water During fiscal year 2012, operating revenues increased by $55.3 million, or 7.3%, from fiscal year 2011 while sales of water increased by 1.6 million hundred cubic feet. The increase in revenue is primary due to the $0.35 Water Quality Cap and Second Tier Base rate increase in February 2012. In addition, the higher purchased water cost reduced the accumulated over collection from fiscal 2011 resulting in higher revenue in fiscal year 2012. Operating expenses for fiscal year 2012 were $4.1 million lower as compared to the prior year. This was due to the decreases in other operating and maintenance expenses of $22.7 million and $8.3 million, respectively, offset by increases in purchased water costs of $35.7 million. The decrease in other operating expenses was mainly due to capitalizing water conservation costs of $7.3 million as regulatory assets, expenditures for lower water supply of $7.1 million, distribution of $5.8 million and purification of $3.1 million. The decrease in maintenance expense was mainly due to lower year over year maintenance costs associated with water supply ($5.0 million) and purification plant ($2.9 million). The $8.9 million decline in depreciation expense was attributed to a change in the depreciation rate. The increase in purchase water costs was due to a 12.6% decrease in the water supplied by the L.A. Aqueduct. Nonoperating revenues were $10.8 million higher than the prior year mainly due to a $5.2 million increase in federal bond subsidies, a $2.6 million increase in miscellaneous nonoperating revenues due to insurance reimbursements and a $2.0 million increase in interest income from other sources. Debt expenses increased by $11.0 million primarily due to the $12.1 million increase in interest expense related to full year of interest paid for the water system revenue bonds issued during fiscal year 2011. Capital contributions decreased by $21.5 million due to a reduction in state and federal grants received through the American Recovery and Reinvestment Act (ARRA). As a result of the above financial changes, the Water Enterprise Fund’s increase in net assets for fiscal year 2012 was $77.0 million, an increase of $36.1 million from fiscal year 2011.


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Sewer

The Sewer Enterprise Fund (Sewer) accounts for the construction, operation, and maintenance of the City’s wastewater collection and treatment system. For fiscal year 2012, total Sewer operating revenues totaled $516.9 million, an increase of $10.3 million or 2% over the previous fiscal year. Sewer services charges and sewage disposal contract revenue rose $5.6 million and $2.1 million, respectively. In February 2012, the City approved a series of sewer service charge rate increases, with the first increase of 4.5% effective April 6, 2012.

Total operating expenses during fiscal year 2012 decreased by $14.2 million or 3.4%, from $424.4 million to $410.2 million. Depreciation expense was reduced by $12.6 million from prior fiscal year brought about by the depreciation of construction claims settlement capitalized in fiscal year 2011. Other nonoperating revenue increased $4.4 million or 62.4% mainly due to state grant revenues and interest subsidies from U.S. Treasury for certain bonds. Interest expense, a major component of nonoperating expenses, rose $7.0 million or 6.1% largely due to the settlement payment for partial termination of interest rate swap agreements offset by lower scheduled interest payments attributed to lower long-term debt outstanding. As a result of the above financial changes, including capital contributions of $10.2 million, Sewer’s change in net assets for fiscal year 2012 was a negative $10.8 million compared to fiscal year 2011 amount of negative $29.6 million.


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The following charts are graphical comparisons between June 30, 2012 and 2011, for enterprise funds/business-type activities operating revenues and operating expenses.

GENERAL FUND BUDGETARY HIGHLIGHTS For fiscal year 2012, the City budgeted the General Fund Operating Account. For purposes of the budget, General Fund Operating Account is separate and distinct from the non-budgeted Reserve Fund and other accounts that are classified by the City as having General Fund type activity for GAAP reporting purposes. At fiscal year end, the unreserved and undesignated fund balance of the General Fund Operating Account is transferred to the Reserve Fund and reported as “Reversion to Reserve Fund.” The General Fund ended the year spending less than budgeted while actual revenues ended lower than estimated. The following table summarizes the operating results on a budgetary basis of the City’s General Fund consolidated accounts as described above.

Airports15.69%

Harbor7.13%

Power53.59%

Water14.12%

Sewer8.99%

Convention Center0.48%

FY 2012Operating Revenues: $5.75 Billion

Airports15.02%

Harbor7.07%

Power55.16%

Water13.35%

Sewer8.94%

Convention Center0.46%

FY 2011Operating Revenues: $5.67 Billion

$0

$500

$1,000

$1,500

$2,000

$2,500

$3,000

$809 $748$300 $300

$2,630$2,695

$651 $655$410 $424

$39 $40

In M

illi

on

s

FY 2012 Operating Expenses: $4.84 Billion FY 2011 Operating Expenses: $4.86 Billion

Airports (FY12 - $809; FY11 - $748) Harbor (FY12 - $300; FY11 - $300)

Power (FY12 - $2,630; FY11 - $2,695) Water (FY12 - $651; FY11 - $655)

Sewer (FY12 - $410; FY11 - $424) Convention Center (FY12 - $39; FY11 - $40)


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City of Los AngelesBudgetary Operating Results- General Fund

Fiscal Year Ended June 30, 2012(amounts expressed in thousands)

Variance WithBudgeted Amounts Actual Final Budget

Original Final Amounts Above(Below )

Rev enues and Other Financing Sources

Tax es ………………………………………………… 3,191,058$ 3,191,058$ 3,204,805$ 13,747$

Licenses, Permits, Fees and Fines ……………… 861,971 878,627 879,088 461

Intergov ernmental …………………………………… 24,520 27,156 15,845 (11,311)

Interest ………………………………………………… 14,280 14,280 15,053 773

Other …………………………………………………… 9,500 9,500 9,197 (303)

Total Rev enues ………………………………… 4,101,329 4,120,621 4,123,988 3,367

Pow er Transfers …………………………………… 254,000 257,000 250,077 (6,923)

Transfers from Other Funds ……………………… 847,289 1,092,273 942,143 (150,130)

Loans from Other Funds …………………………… -- 1,318 2,820 1,502

Total Rev enues and Other Financing Sources ……… 5,202,618 5,471,212 5,319,028 (152,184)

Ex penditures and Other Financing Uses

General Gov ernment ……………………………… 1,343,125 1,463,716 1,383,343 (80,373)

Protection of Persons and Property ……………… 1,730,833 1,845,527 1,830,413 (15,114)

Public Works ………………………………………… 290,160 346,212 315,187 (31,025)

Health and Sanitation ………………………………… 222,203 222,247 200,181 (22,066)

Transportation ………………………………………… 127,918 140,048 134,092 (5,956)

Cultural and Recreational Serv ices ……………… 54,946 56,312 53,194 (3,118)

Community Dev elopment ………………………… 109,561 117,577 106,223 (11,354)

Pension and Retirement Contributions …………… 1,630 1,490 1,451 (39)

Capital Outlay ………………………………………… 6,510 27,797 9,763 (18,034)

Total Ex penditures …………………………… 3,886,886 4,220,926 4,033,847 (187,079)

Transfers to Other Funds …………………………… 1,315,732 1,250,286 1,244,810 (5,476)

Total Ex penditures and Other Financing Uses ……… 5,202,618 5,471,212 5,278,657 (192,555)

Ex cess (Deficiency ) of Rev enues and Other

Financing Sources Ov er Ex penditures

and Other Financing Uses ………………………… -- -- 40,371 40,371

Fund Balance, July 1 …………………………………… -- -- -- --

Encumbrances Lapsed ….……………………………… -- -- 16,760 16,760

Rev ersion to Reserv e Fund …………………………… -- -- (57,131) (57,131)

Fund Balance, June 30 ………………………………… --$ --$ --$ --$

In fiscal year 2012, total actual revenues and other financing sources fell below budgetary estimates by $152.2 million or 2.8%, primarily due to lower receipts from interfund transfers of $150.1 million and intergovernmental revenue of $11.3 million. Lower than anticipated receipts from interfund transfers primarily reflect delayed reimbursements for grants and capital projects. Tax receipts were $13.7 million above budget mainly due to positive variances in economy-sensitive revenues. Sales and transient occupancy taxes were above budget by $17.0 million or 5.3% and $15.5 million or 10.2%, respectively, reflecting gradual improvement in the local economy and travel and hotel occupancy rate. Property tax receipts ended the year $2.5 million above budget. The decrease in secured property tax receipts was offset by the early receipt of $26.5 million in partial ex-CRA tax increment monies programmed by the City for fiscal year 2013. Documentary transfer tax receipts dipped $3.8 million or 3.6% compared to budget as a result of lower than expected recovery of the local real estate market.


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Other below budget revenues included utility users’ receipts tax of $12.8 million or 2.1% and franchise income of $3.9 million or 8.8% due to the decline in natural gas prices and electricity sales. Power transfers to the City fell short by $3.9 million due to lower Power operating revenue for fiscal year 2011. The decrease of $11.1 million in intergovernmental receipts was largely due to the loss of motor vehicle license fees of $4.1 million as a result of State budget action, and lower than anticipated disaster-related grant reimbursements of $4.6 million. Parking fines receipts were nearly $16.0 million higher as a result of a one-month catch up of delayed receipts. While departmental receipts came in higher than expected, a shortfall resulted from a delayed surplus transfer of $16.5 million from the Special Parking Revenue Fund which was processed in fiscal year 2013. The City’s General Fund below budget expenditures of $192.6 million during fiscal year 2012 were realized in line with the City’s continuing efforts to achieve fiscal sustainability by implementing austerity measures, addressing rising pension costs and reducing its payroll. These efforts include establishment of a new retirement tier for sworn employees; lower new hire salary for sworn personnel; additional employee contributions for retiree health benefits; freeze of retiree medical subsidies for non-contributing employees; workforce attrition; and control of salary expenditures through the Managed Hiring Process. As a result of below budget variances in expenditures and other financing uses totaling $192.6 million, and lapsed encumbrances of $16.8 million, offset by below budget variances in revenues and other financing sources of $152.2 million, a total of $57.1 million reverted from the General Fund to the Reserve Fund at year-end. LONG-TERM DEBT At June 30, 2012 the City’s bonded indebtedness and long-term notes payable totaled $21.4 billion as follows:

FY 2012 FY 2011 FY 2012 FY 2011 FY 2012 FY 2011

Debt backed by the City

General Obligation Bonds ………………………… 1,288,674$ 1,288,707$ --$ --$ 1,288,674$ 1,288,707$

Judgment Obligation Bonds ……………………… 60,379 66,891 -- -- 60,379 66,891

Special Assessment Debt …………………………… 22,210 24,095 -- -- 22,210 24,095

Debt Secured by Specified Revenue Sources

Certificates of Participation and Lease

Revenue Bonds ………………………………… 1,978,452 1,958,319 -- -- 1,978,452 1,958,319

Revenue Bonds and Notes Payable …………… 523,387 620,272 17,295,716 17,453,856 17,819,103 18,074,128

Loans Payable to U.S. Department

of Housing and Urban Development ……………… 204,395 157,781 -- -- 204,395 157,781

Total ……………………………………………………… 4,077,497$ 4,116,065$ 17,295,716$ 17,453,856$ 21,373,213$ 21,569,921$

Governmental Activities Business-type Activities Total

City of Los AngelesSummary of Bonded Debts and Long-Term Notes Payable

(amounts expressed in thousands)

Significant new issuances during the year are the following:

• $248.3 million MICLA lease revenue bonds and $63.0 million MICLA commercial paper notes to finance and refinance costs associated with the acquisition of certain capital equipment, construction and improvement of certain real property, and to repay all or a portion of certain outstanding certificates of participation.


- 25 -

• $117.0 million and $485.5 million general obligation bonds for stormwater pollution abatement projects and to refund certain outstanding bonds, respectively.

• Harbor issued 2011 Series A and B Refunding Bonds of $58.9 million and $32.8 million,

respectively, to refund certain outstanding bonds.

• Water issued Water System Revenue Bonds, 2011 Series A in the amount of $307.1 million, and 2012 Series A in the amount of $276.8 million to refund all or a portion of certain outstanding bonds.

• Sewer Fund issued Wastewater System Subordinate Revenue Bonds Series 2012-A, 2012-B and Series 2012-C in the amount of $157.1 million, $253.9 million, and $133.7 million, respectively, and Wastewater System Revenue Bonds Series, 2012-A in the amount of $49.7 million, to refund all or a portion of certain outstanding bonds and terminate a portion of the swap agreements.

More detailed information on the City’s bonds and other long-term debt can be found in Note 4H of the Notes to the Basic Financial Statements beginning on page 116.

As of February 4, 2013, the ratings of the City’s debts by Moody’s Investors Service (Moody’s), Standard & Poors (S&P) and Fitch Ratings (Fitch) respectively are as follows: General Obligation Bonds – Aa2, AA- and AA-; Convention Center Lease Revenue Bonds – A2, A+ and A+; Judgment Obligation Bonds – A1, A+ and A+; MICLA Lease – Revenue Obligations (Real Property) – A2, A+ and A+; MICLA Lease-Revenue Obligations (Equipment) – A3, A+ and A+; Special Assessment Bonds – Aa3, AA and AA; Parking System Revenue Bonds – A2, A+ and A; Solid Waste Resources Revenue Bonds – Aa3, AA and AA-; and Tax and Revenue Anticipation Notes – M1G1, SP-1+ and F1+. The City’s Debt Management Policy establishes guidelines for the structure and management of the City's General Fund debt obligation. These guidelines include target and ceiling levels for certain debt ratios to be used for financial planning purposes. The policy places certain restrictions on the types of items that can be financed, limiting financing only to those items with a useful life of six years or more. In accordance with this policy, the ratio of annual debt payments cannot exceed 15% of General Fund revenues for voter-approved and non-voter approved debt overall, and cannot exceed 6% of General Fund revenues for non-voter approved debt alone. The 6% ceiling for non-voter approved debt may be exceeded, only if there is a guaranteed new revenue stream for the debt payments and the additional debt will not cause the ratio to exceed 7.5%, or there is no guaranteed revenue stream but the 6% ceiling shall not be exceeded for more than one year. The City’s Variable Rate Debt Policy sets forth the purposes and the criteria for using variable rate debt, and the factors to be considered in determining the appropriate amount of the variable rate debt. It also requires diversification of remarketing agents and counterparties. Budgeting, monitoring and reporting requirements are also included in the policy. The City’s Interest Rate Risk Mitigation Policy provides guidelines for the use of interest rate mitigation products such as swaps, caps, floors, collars and options in connection with the incurrence of debt. While the use of these financing products can reduce the City’s exposures to risks inherent to certain types of debts, careful monitoring is required to preserve the City’s credit strength and budget flexibility. As of June 30, 2012, the City is in compliance with the aforementioned policies. Information related to the City’s legal debt margin is found on pages 340 and 341. Pledged revenue bond coverage for the City’s enterprise funds is found on pages 342 and 343.


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CAPITAL ASSETS

The City’s investment in capital assets for its governmental and business-type activities as of June 30, 2012, amounted to $33.5 billion (net of accumulated depreciation). This investment in capital assets, which accounts for 68.1% of the City’s total assets, includes land, buildings, facilities, equipment, infrastructure, and construction in progress. The following table presents the City’s capital assets (in thousands):

City of Los AngelesSummary of Capital Assets Used in Operations


Governmental Activities Business-type Activities Total

FY 2012 FY 2011 FY 2012 FY 2011 FY 2012 FY 2011

Not Depreciated

Land………………………………… 816,958$ 812,560$ 2,405,465$ 2,357,216$ 3,222,423$ 3,169,776$ Infrastructure……………………… 171,155 170,605 -- -- 171,155 170,605 Construction in Progress………… 857,254 782,081 4,705,685 4,316,865 5,562,939 5,098,946 Intangible Assets…………………… 8,636 42,308 69,846 65,793 78,482 108,101

Subtotal……………………………… 1,854,003 1,807,554 7,180,996 6,739,874 9,034,999 8,547,428

Depreciated, NetBuildings, Facilities and Equipment……………………… 3,572,168 3,557,466 18,703,254 17,266,167 22,275,422 20,823,633 Infrastructure……………………… 1,747,886 1,723,943 -- -- 1,747,886 1,723,943 Intangible Assets…………………… 71,051 50,817 -- -- 71,051 50,817

Subtotal……………………………… 5,391,105 5,332,226 18,703,254 17,266,167 24,094,359 22,598,393

Natural Gas Field, Net………………… -- -- 293,006 256,622 293,006 256,622

Nuclear Fuel at Amortized Cost……… -- -- 49,687 44,328 49,687 44,328

Total……………………………………… 7,245,108$ 7,139,780$ 26,226,943$ 24,306,991$ 33,472,051$ 31,446,771$

The modified approach is used in reporting the City’s bridges infrastructure system. As of June 30, 2012, the condition of City bridges is compliant with the City’s policy. Seventy three percent of all City bridges are rated B or better. The planned costs for preservation and maintenance were $92.8 million, but $37.7 million was actually spent. See additional information on Note 1E of the Notes To Basic Financial Statements on pages 68-70. The required supplementary information for bridges is presented on page 198. Major capital assets activities during the year are as follows:

Governmental Activities • Completed building construction and various improvements, including transfers from construction

in progress, amounted to $96.7 million. These various projects include $21.0 million for fire facilities, $6.7 million for police facilities, $66.0 million for recreational, cultural and community centers, and $3.0 million for various municipal facilities.


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• Capitalized charges for various projects under construction totaled $205.0 million. These various projects include $64.6 million for recreational, cultural and community centers, $55.9 million for various public work projects, $65.1 million for transportation projects, $7.5 million for animal shelters, $2.9 for fire and police facilities, and $9.0 million for municipal facilities projects.

• Capitalized infrastructure assets totaled $79.8 million.

• Acquisition of machinery and equipment that were capitalized totaled $133.5 million, while those retired, salvaged, deleted or sold amounted to $71.8 million.

• Costs of $34.4 million for a computer software system that was implemented on July 1, 2011, started to be amortized in fiscal year 2012. Capitalized intangible assets amounted to $0.9 million in fiscal year 2012.


• Airport’s net capital assets increased by $871.9 million, or 19.5%. Major capital assets activities include improvements and security upgrades at the Tom Bradley International Terminal of $579.5 million; replacement of the Central Utility Plant and cogeneration facilities of $98.2 million; renovations at Terminals 5 and 6 of $69.4 million; residential acquisition, soundproofing, and noise mitigation of $41.4 million; security program-in-line baggage screening of $31.6 million; various IT network and systems projects of $27.9 million; repairs and improvements of elevators and escalators of $15.8 million; and, construction of new north/south crossfield taxiway and apron for overnight parking of $5.8 million.

• Harbor’s net capital assets rose by $79.4 million or 2.4%. Significant capital assets activities include the Cabrillo Way Marina Phase II development of $162.6 million; various wharves improvements of $113.7 million; Harry Bridges Boulevard improvement of $77.7 million; various terminal, building and other facilities, as well as waterfront and public area improvements totaled $58.3 million. On October 14, 2011, Harbor sold POLA High School for $3.5 million, with $0.4 million credited to rental income, which resulted in a loss of $8.5 million, compared to a net book value of $11.6 million, after accumulated depreciation of $2.7 million.

• Power capitalized $503.0 million of additions, including transfers from construction in progress, to depreciable utility plant in service. Of the $503.0 million, $294.0 million, or 59%, is related to distribution plant assets added to improve distribution system reliability in line with the Power Reliability Program; $128.0 million or 26% for generation plant assets including station improvements at the in-basin generating stations and construction of Adelanto Photovolataic System; and $57.0 million or 11% for general plant assets including purchases of transportation equipment, improvements to general facilities, and installation of fiber-optics. Construction work in progress increased by $526.0 million mostly due to repowering of a generating station, construction of Pine Tree Photovoltaic System, improvements at other in-basin generating stations, and replacement of the Customer Information System (CIS).

• Water capitalized $372.0 million of additions to depreciable utility plant in service. Of the $372.0 million, $229.0 million, or 61% is related to distribution plant assets including mains, meters and services. Other additions included construction of Parthenia Trunk Line, replacement of City Trunk Line South Unit 2, and improvements to water recycling, reservoirs, and tanks. Purification stations and pumping stations assets increased by $56.0 million, or 15%, mostly attributable to construction of the Van Norman Chloramination Station No. 1 and improvements to water treatment facilities. The value of assets in source of water supply increased by $47 million, or 13%, which comprised of construction at Terminal Hill for seismic hazard mitigation and improvements to aqueduct facilities. Lastly, general plant increased by $40.0 million, or 11%, which includes additions to fleet, communication systems, and demand side management.


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• Sewer capitalized $132.0 million of additions, including transfers from construction in progress. Of this amount, $104.1 million or 79% was for wastewater collection system, while $21.8 million or 16% was attributed to treatment plants and equipment. Charges to construction in progress totaled $90.0 million. These projects are driven by regulatory requirements.

Significant commitments that include construction contracts are discussed in Note 5C of the Notes to the Basic Financial Statements on page 171.

The City’s policy affecting capital assets can be found in Note1E of the Notes to the Basic Financial Statements on pages 68-70. Additional information can be found in Note 4E on pages 110-112.

ECONOMIC FACTORS AFFECTING NEXT YEAR’S BUDGET

The City’s fiscal year 2013 total adopted budget is $7.2 billion. Of this amount, $3.6 billion, or 49.3%, is appropriated for departmental expenditures. The remainder of $3.6 billion is appropriated for non-departmental expenditures. Estimated general receipts of $4.5 billion, special receipts of $2.1 billion, bond redemption and interest funds of $0.2 billion, and available balances of $0.4 billion are sources of funds for the budget. The fiscal year 2013 General Fund adopted budget was balanced through a combination of expenditure cuts and revenue enhancements. Significant revenue solutions included past and ongoing reimbursements of fire emergency medical services pursuant to Assembly Bill (AB) 678; ambulance billing efficiencies; past set asides and ongoing ex-CRA tax increment receipts; surplus transfer from the Special Parking Revenue Fund; and, increased parking citation receipts for productivity improvements implemented in fiscal year 2012, expanded part-time traffic officer program, and increased parking fines for certain violations. Aside from various expenditure reductions, the fiscal year 2013 budget included related cost reimbursements by special funds and cost savings such as furloughs for certain bargaining unit, as well as through workforce attrition and reduction that downsized authorized position counts. The fiscal year 2013 General Fund budgeted receipts of $4.5 billion increased by $161.3 million or 3.7% from fiscal year 2012 actual receipts as follows (amounts in millions):

FY 2012-13 FY 2011-12 Increase (Decrease)Budget Receipts Amount Percentage

Taxes……………………………………… 3,317.7$ 3,204.8$ 112.9$ 3.5 %Licenses, permits, fees and fines……… 925.4 880.4 45.0 5.1Intergovernmental………………………… 6.5 15.8 (9.3) -58.9Interest……………………………………… 10.5 15.1 (4.6) -30.5Other………………………………………… 8.7 9.2 (0.5) -5.4Transfers from other funds (a)…………… 281.7 263.9 17.8 6.7

Total………………………………………… 4,550.5$ 4,389.2$ 161.3$ 3.7

(a) Other funds include Reserve Fund, Pow er Fund, and Special Parking Revenue Fund.


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The increase of $112.9 million in budgeted tax receipts for fiscal year 2013 compared to actual fiscal year 2012 receipts reflects projected moderate growth of the economy. Property tax is the City’s largest General Fund revenue source. The amount of property tax received is determined by complex State Proposition 13 related factors, and other propositions approved by the electorate, inflation, the real estate market, new construction activity, assessment appeals, and restorations to the tax rolls. The projected increase of $66.8 million or 4.6% in property tax is primarily due to addition of ex-CRA tax increment receipts, and County Assessor estimated 1.14% increase in secured assessed valuation. Other taxes reflect the continued gradual pace of economic recovery. Sales tax receipts are expected to grow by $9.6 million or 3.0%. Business tax receipts are projected to be up by $10.2 million or 2.3%. Transient occupancy tax receipts are projected to increase by $6.1 million or 4.0% due to an improvement in hotel occupancy and room rates though restricted by room availability. Documentary transfer tax receipts estimated gains of 4.1% reflect anticipated stability and improvement in the housing market. Parking users’ tax receipts growth of $5.3 million or 6.1% also depends on increased enforcement and mandatory revenue control equipment for delinquent operators and mandatory collection of bonds for all operators. Utility users’ tax receipts are anticipated to increase by $7.6 million or 1.2%. Its components are electric, gas and communication users’ taxes which are affected by the price of fuel, weather, and the changing telecommunications marketplace. Although growth in electric consumption and gas prices are expected, these increases are offset by the continued decline in telephone users’ tax due to declines in land line usage and increased competition in the telecommunications sector. Lower federal and State grant receipts accounted for a $9.3 million decrease in intergovernmental revenue. The interest income decrease is primarily due to a lower reinvestment rate from an estimated 1.63% to 1.27% based on forward rate assumptions. Transfers from other funds is projected to increase by 6.7% primarily from a surplus transfer of $32.6 million from the Special Parking Revenue Fund, offset by a $4.9 million decreased transfer from the Telecommunications Development Account and $8.9 million decreased transfer from the Reserve Fund. Economic indicators released at the end of January 2013 were mixed. Gross domestic product (GDP) contracted by 0.1% annual rate from October to December 2012 for the first time since 2009. In addition, unemployment edged up from 7.8% to 7.9%. However, employment figures for November and December 2012 were higher than initially reported. Economists generally agree that the near term economic outlook would be sluggish. Significant factors that may adversely impact the economy are as follows: 1) Exports are impacted by the recession in Europe and Japan, as well as slowing growth in emerging countries such as Brazil, China and India; 2) Passage on January 1, 2013, of the American Taxpayer Relief Act (ATRA) only delayed automatic federal spending cuts or sequestration to March 1, 2013; 3) Expiration of the two-year payroll tax on most wage earners and of the Bush income tax cuts on certain incomes may dampen consumer spending; 4) A protracted debate on raising the debt ceiling may be a potential threat to consumer confidence and business investment; and, 5) Federal deficit spending remains a significant problem to the long-term health of the economy. In January 2013, the Governor released the 2013-14 State of California budget. The proposed budget’s economic outlook reflects the consensus among economists that the California economy will improve due to strengthening of the housing market, job growth and improved consumer spending. However, due to the factors delineated above, the recovery could be easily compromised. The following chart provides a comparison between recent economic forecasts from the Los Angeles Economic Development Corporation (LAEDC), the University of California, Los Angeles (UCLA) Anderson School of Management and the State Department of Finance (DOF).


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Comparison of Forecasts of Selected Economic Indicators

2012 LAEDC 1 UCLA 2 DOF 3 LAEDC UCLA DOFCaliforniaPercent change in: DOF Total Personal Income 5.1% 2.8% 3.3% 4.3% 5.0% 5.2% 5.5% Unemployment Rate 10.6% 9.8% 9.7% 9.6% 9.5% 8.4% 8.7% Taxable retail sales 7.8% 5.7% 3.0% 6.1% 3.2% 4.0% 7.1%Los Angeles CountyPercent change in: LAEDC Total Personal Income 3.4% 3.6% n/a n/a 4.5% n/a n/a Unemployment Rate 10.2% 10.0% n/a n/a 9.7% n/a n/a Taxable retail sales 9.4% 5.9% n/a n/a 3.4% n/a n/a

1 LAEDC : February 20132 UCLA Anderson Forecast: December 20123 State Department of Finance (DOF): 2013-14 Governor's Budget Summary, Economic Outlook

20142013

Other matters that are affecting and will affect the City’s future operations are as follows:

On April 6, 2012, the City Administrative Officer (CAO) transmitted a report entitled “Four-Year Outlook and Update to the Three-Year Plan for Fiscal Sustainability” to the Mayor and Council. The report stated that although the City has adopted structural budget balancing solutions, it has also relied significantly on one-time solutions to close the budget gap for ongoing programs, such as expenditure deferrals for capital improvements, furloughs, hiring freezes, and surplus funds. Workforce reduction, though ongoing in nature, targeted vacancies and was not always based on a strategic plan that considered core services and priorities. This “crisis management” mode has created an environment that has had little to no planning for the City’s future, limited capital investments and improvements, as well as avoided prioritization or elimination of services. When one-time solutions do not materialize, extraordinary mid-year adjustments are required to offset budgetary shortfalls. The City Council adopted some of the CAO recommendations relative to a number of strategies based on best practices in municipal finance, budgeting, and strategic planning to provide a blueprint for the City’s management.

The CAO reports to the Mayor and City Council on the status of the budget. In its First Financial Status Report (FSR), dated October 23, 2012, estimated receipts through September 2012, met planned revenue. However, revenue such as Fire medical reimbursement and ex-CRA tax increment receipts may be uncertain. It also raised concerns about factors that may erode the fragile economic recovery. The CAO projected expenditure shortfalls in sworn and civilian salaries, as well as other operating and maintenance accounts. The shortfalls assumed that the 209 positions, of which 186 were filled as of October 2012, would be eliminated as scheduled and no adverse outcome would result from litigation challenging the City’s use of mandatory furloughs on employees represented by the Los Angeles City Attorneys Association.

The CAO’s Four Year Budget Outlook reflects an ongoing structural deficit through fiscal year 2015. For fiscal year 2014, the estimated budgetary shortfall of $216.0 million assumed elimination of 209 positions previously mentioned. The fiscal year 2014 deficit would rise by $16.0 million to $232.0 million if the positions were not eliminated. The City Council continued temporary employment, rather than initiate the layoff process for those employees, pending identification of additional transfer opportunities with the goal of further reducing or eliminating all layoffs. The City Council adopted a goal to increase the Budget Stabilization Fund from its current balance of approximately $0.5 million to $40.0 million by the end of fiscal year 2013 for the purpose of protecting critical priority services in fiscal year 2014.

Due to actions by Congress relative to sequestration on March 1, 2013, the City could experience cuts in federal funding as high as $115.0 million in fiscal year 2013, with a majority of the cuts in housing, community development, public safety, and homeland security.


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REQUEST FOR INFORMATION This financial report is designed to provide our citizens, taxpayers, customers, creditors, and other users with a general overview of the City’s finances. Questions concerning any of the information provided in this report or requests for additional financial information should be addressed to the Office of the City Controller, 200 North Main Street, City Hall East Room 300, Los Angeles, CA 90012.

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CITY OF LOS ANGELES

Statement of Net Assets June 30, 2012



ASSETSCash and Pooled Investments 4,176,316$ 1,994,952$ 6,171,268$ Other Investments 92,331 61,764 154,095 Receivables, Net 1,460,271 1,898,423 3,358,694 Inventories 19,815 210,530 230,345 Prepaid Items and Other Assets 33,980 813,196 847,176 Restricted Assets 3,474 3,828,015 3,831,489 Investment in Joint Ventures -- 5,037 5,037 Net Pension Assets -- 28,133 28,133 Net Other Postemployment Benefits Assets -- 923,874 923,874 Deferred Outflow on Derivative Instruments -- 130,041 130,041 Capital Assets

Not Depreciated 1,854,003 7,180,996 9,034,999 Depreciated, Net 5,391,105 18,703,254 24,094,359 Natural Gas Field, Net -- 293,006 293,006 Nuclear Fuel, at Amortized Cost -- 49,687 49,687

TOTAL ASSETS 13,031,295 36,120,908 49,152,203

LIABILITIESAccounts Payable and Accrued Expenses 370,780 968,190 1,338,970 Accrued Interest Payable 56,414 266,375 322,789 Internal Balances 49,414 (49,414) -- Deposits and Advances 43,642 76,829 120,471 Other Liabilities 166,187 214,524 380,711 Tax and Revenue Anticipation Notes and

Related Interest Payable 601,541 -- 601,541 Advances from Fiduciary Funds 31,163 -- 31,163 Derivative Instrument Liabilities -- 130,041 130,041 Non-current Liabilities

Due Within One Year 600,343 668,975 1,269,318 Due In More Than One Year 6,391,284 17,150,045 23,541,329

TOTAL LIABILITIES 8,310,768 19,425,565 27,736,333

NET ASSETS Invested In Capital Assets, Net of Related Debt 4,416,934 9,855,473 14,272,407 Restricted for:

Capital Projects 74,721 168,924 243,645 Debt Service 157,402 1,223,993 1,381,395 Public Safety 192,135 -- 192,135 Public Works and Sanitation 429,323 -- 429,323 Transportation Programs 550,105 -- 550,105 Culture and Recreation Activities 316,327 -- 316,327 Community Development and Housing 356,093 -- 356,093 Passenger/Customer Facility Charges -- 894,563 894,563 Pension and Other Postemployment Benefits -- 952,007 952,007 Other Purposes 9,950 386,218 396,168

Unrestricted (Deficit) (1,782,463) 3,214,165 1,431,702

TOTAL NET ASSETS 4,720,527$ 16,695,343$ 21,415,870$

The notes to the financial statements are an integral part of this statement.

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CITY OF LOS ANGELES

Statement of ActivitiesFor the Fiscal Year Ended June 30, 2012


Operating CapitalCharges for Grants and Grants and Governmental Business- type

Functions/Programs Expenses Services Contributions Contributions Activities Activities TotalGovernmental Activities:

General Government 1,335,180$ 246,357$ 44,698$ --$ (1,044,125)$ --$ (1,044,125)$ Protection of Persons and Property 2,707,892 326,396 167,645 4,428 (2,209,423) -- (2,209,423) Public Works 413,348 166,061 148,766 43,978 (54,543) -- (54,543) Health and Sanitation 416,894 493,422 21,577 9,713 107,818 -- 107,818 Transportation 365,841 125,392 323,465 2,895 85,911 -- 85,911 Cultural and Recreational Services 445,815 152,434 6,534 35,142 (251,705) -- (251,705) Community Development 437,229 112,897 310,316 -- (14,016) -- (14,016) Interest on Long-Term Debt 194,513 -- -- -- (194,513) -- (194,513)

Total Governmental Activities 6,316,712 1,622,959 1,023,001 96,156 (3,574,596) -- (3,574,596) Business-type Activities:

Airports 897,380 1,114,431 -- 62,441 -- 279,492 279,492 Harbor 333,355 435,291 -- 31,307 -- 133,243 133,243 Power 2,870,609 3,212,141 -- 26,731 -- 368,263 368,263 Water 799,575 849,122 -- 27,482 -- 77,029 77,029 Sewer 553,047 532,026 -- 10,153 -- (10,868) (10,868) Other- Convention Center 39,107 27,355 -- -- -- (11,752) (11,752)

Total Business-type Activities 5,493,073 6,170,366 -- 158,114 -- 835,407 835,407

Total 11,809,785$ 7,793,325$ 1,023,001$ 254,270$ (3,574,596) 835,407 (2,739,189)

General Revenues: Property Taxes 1,662,316 -- 1,662,316 Utility Users Taxes 623,721 -- 623,721 Business Taxes 440,327 -- 440,327 Other Taxes Documentary Transfer 105,352 -- 105,352 Transient Occupancy 171,395 -- 171,395 Parking Occupancy 90,081 -- 90,081 Franchise Income 90,535 -- 90,535 Miscellaneous 1,378 -- 1,378 Grants and Contributions Not Restricted to Specific Programs Sales Taxes 324,859 -- 324,859 Motor Vehicle In-Lieu Taxes 2,026 -- 2,026 Other 43,403 -- 43,403 Unrestricted Investment Earnings 21,879 -- 21,879 Other 91,735 -- 91,735 Transfers 250,077 (250,077) -- Total General Revenues and Other Items 3,919,084 (250,077) 3,669,007 Change In Net Assets 344,488 585,330 929,818 Net Assets - July 1, Restated 4,376,039 16,110,013 20,486,052 Net Assets - June 30 4,720,527$ 16,695,343$ 21,415,870$


Program Revenues Net (Expense) Revenue and Changes in Net Assets

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CITY OF LOS ANGELES

Balance SheetGovernmental Funds

June 30, 2012(amounts expressed in thousands)

Community Special Debt General Development Revenue Service

ASSETS

Cash and Pooled Investments 1,235,260$ 5,969$ 78,339$ 59,911$

Other Investments -- -- -- 78,626

Taxes Receivable

(Net of Allowance for Uncollectibles of $43,948) 536,069 -- -- --

Accounts Receivable

(Net of Allowance for Uncollectibles of $349,580) 184,312 -- -- --

Special Assessments Receivable 4,598 -- -- --

Investment Income Receivable 6,122 12 187 227

Intergovernmental Receivable 47,152 5,533 -- 2,103

Loans Receivable

(Net of Allowance for Uncollectibles of $974,804) -- 116,367 -- --

Due from Other Funds 44,229 327 -- --

Inventories 19,815 -- -- --

Prepaid Items and Other Assets -- 8,347 2,083 --

Advances to Other Funds 11,319 -- -- --

Restricted Assets -- -- -- --

TOTAL ASSETS 2,088,876$ 136,555$ 80,609$ 140,867$

LIABILITIES AND FUND BALANCES

LIABILITIES

Accounts, Contracts and Retainage Payable 56,764$ 5,443$ 4,083$ --$

Accrued Salaries and Overtime Payable 121,845 -- -- --

Accrued Compensated Absences Payable 10,124 -- -- --

Estimated Claims and Judgments Payable 28,189 -- -- --

Intergovernmental Payable 776 1 -- --

Due to Other Funds 47,967 4,169 3,144 --

Deferred Revenue and Other Credits 528,669 2,934 -- 2,103

Deposits and Advances 24,007 39 -- -- Matured Bonds and Interest Payable -- -- -- --

Notes Payable 601,541 -- -- --

Advances from Other Funds 35,728 -- -- --

Other Liabilities 61,582 180 1,702 --

TOTAL LIABILITIES FORWARDED 1,517,192 12,766 8,929 2,103 Continued…

Municipal ImprovementCorporation

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CITY OF LOS ANGELES

Balance SheetGovernmental Funds




TOTAL LIABILITIES FORWARDED 1,517,192$ 12,766$ 8,929$ 2,103$

FUND BALANCESNonspendable:

Inventories 19,815 -- -- -- Prepaid Items and Other Assets -- 8,347 2,083 -- Advances to Other Funds 11,319 -- -- --

Restricted for:Animal Shelter Facilities -- -- -- -- Community Development -- 115,442 -- -- Construction and Engineering Regulation Enforcement -- -- -- -- Cultural Activities -- -- -- -- Debt Service -- -- -- 138,764 Fire Prevention and Emergency Preparedness -- -- -- -- General Government -- -- -- -- Health, Environment and Sanitation Programs -- -- -- -- Landfill Closure and Postclosure Maintenance -- -- -- -- Law Enforcement -- -- -- -- Library -- -- -- -- MICLA Capital Projects -- -- 69,597 -- Other Capital Projects -- -- -- -- Other Purposes -- -- -- -- Police, Fire and 911 Facilities -- -- -- -- Recreation and Parks -- -- -- -- Seismic Improvement -- -- -- -- Social Services -- -- -- -- Solid Waste -- -- -- -- Stormwater Cleanup Capital Projects -- -- -- -- Street Services -- -- -- -- Transportation -- -- -- --

Assigned to:Community Development -- -- -- -- Construction and Engineering Regulation Enforcement -- -- -- -- Cultural Activities -- -- -- -- Fire Prevention and Emergency Preparedness -- -- -- -- General Government 267,645 -- -- -- Health, Environment and Sanitation Programs -- -- -- -- Landfill Closure and Postclosure Maintenance -- -- -- -- Law Enforcement -- -- -- -- Library -- -- -- -- Other Capital Projects -- -- -- -- Other Purposes -- -- -- -- Recreation and Parks -- -- -- -- Social Services -- -- -- -- Solid Waste -- -- -- -- Street Services -- -- -- -- Transportation -- -- -- --

Unassigned:Economic Stabilization 528 -- -- -- Reserve, Emergency and Contingency 272,377 -- -- -- Unassigned -- -- -- --

TOTAL FUND BALANCES 571,684 123,789 71,680 138,764

TOTAL LIABILITIES AND FUND BALANCES 2,088,876$ 136,555$ 80,609$ 140,867$ Continued...

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CITY OF LOS ANGELES

Balance Sheet - (Continued)Governmental Funds


Proposition A Recreation Solid OtherLocal Transit and Waste GovernmentalAssistance Parks Resources Funds Total

ASSETS

Cash and Pooled Investments 143,476$ 291,647$ 198,228$ 2,163,486$ 4,176,316$

Other Investments -- -- -- 13,705 92,331

Taxes Receivable

(Net of Allowance for Uncollectibles of $43,948) -- -- -- 36,420 572,489

Accounts Receivable

(Net of Allowance for Uncollectibles of $349,580) 220 1,624 1,349 18,864 206,369

Special Assessments Receivable -- -- -- 21,146 25,744

Investment Income Receivable 519 1,066 660 7,433 16,226

Intergovernmental Receivable 23,035 -- 173 137,166 215,162

Loans Receivable

(Net of Allowance for Uncollectibles of $974,804) -- -- -- 307,914 424,281

Due from Other Funds -- 1,119 10,198 85,283 141,156

Inventories -- -- -- -- 19,815

Prepaid Items and Other Assets -- -- -- 2,915 13,345

Advances to Other Funds -- -- -- 69,052 80,371

Restricted Assets -- -- -- 3,474 3,474

TOTAL ASSETS 167,250$ 295,456$ 210,608$ 2,866,858$ 5,987,079$


LIABILITIES

Accounts, Contracts and Retainage Payable 16,765$ 7,989$ 8,805$ 137,100$ 236,949$

Accrued Salaries and Overtime Payable -- 5,990 -- 2,102 129,937

Accrued Compensated Absences Payable -- 97 -- 21 10,242

Estimated Claims and Judgments Payable -- -- -- -- 28,189

Intergovernmental Payable 6 227 49 2,835 3,894

Due to Other Funds 465 1,021 -- 95,918 152,684

Deferred Revenue and Other Credits 9,673 259 6,334 114,790 664,762

Deposits and Advances -- 1,952 407 17,237 43,642 Matured Bonds and Interest Payable -- -- -- 307 307

Notes Payable -- -- -- -- 601,541

Advances from Other Funds -- 841 -- 112,851 149,420

Other Liabilities 3,869 7,863 5,345 85,646 166,187

TOTAL LIABILITIES FORWARDED 30,778 26,239 20,940 568,807 2,187,754 Continued…

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CITY OF LOS ANGELES

Balance Sheet - (Continued)Governmental Funds



TOTAL LIABILITIES FORWARDED 30,778$ 26,239$ 20,940$ 568,807$ 2,187,754$

FUND BALANCES Nonspendable:

Inventories -- -- -- -- 19,815 Prepaid Items and Other Assets -- -- -- 2,915 13,345 Advances to Other Funds -- -- -- 69,052 80,371

Restricted for:Animal Shelter Facilities -- -- -- 25,034 25,034 Community Development -- -- -- 331,148 446,590 Construction and Engineering Regulation Enforcement -- -- -- 1,397 1,397 Cultural Activities -- -- -- 17,944 17,944 Debt Service -- -- 8,414 243,818 390,996 Fire Prevention and Emergency Preparedness -- -- -- 471 471 General Government -- -- -- 1,839 1,839 Health, Environment and Sanitation Programs -- -- -- 90,081 90,081 Landfill Closure and Postclosure Maintenance -- -- -- 20 20 Law Enforcement -- -- -- 54,104 54,104 Library -- -- -- 7,575 7,575 MICLA Capital Projects -- -- -- -- 69,597 Other Capital Projects -- -- -- 18,320 18,320 Other Purposes -- -- -- 1,631 1,631 Police, Fire and 911 Facilities -- -- -- 215,373 215,373 Recreation and Parks -- -- -- 194,535 194,535 Seismic Improvement -- -- -- 35,734 35,734 Social Services -- -- -- 4,864 4,864 Solid Waste -- -- 178,230 19,246 197,476 Stormwater Cleanup Capital Projects -- -- -- 273,272 273,272 Street Services -- -- -- 123,871 123,871 Transportation 136,472 -- -- 241,784 378,256

Assigned to:Community Development -- -- -- 98,252 98,252 Construction and Engineering Regulation Enforcement -- -- -- 49,754 49,754 Cultural Activities -- -- -- 4,466 4,466 Fire Prevention and Emergency Preparedness -- -- -- 10,487 10,487 General Government -- -- -- 48,269 315,914 Health, Environment and Sanitation Programs -- -- 1,943 7,751 9,694 Landfill Closure and Postclosure Maintenance -- -- -- 10,945 10,945 Law Enforcement -- -- -- 2,987 2,987 Library -- -- -- 4,534 4,534 Other Capital Projects -- -- -- 2,442 2,442 Other Purposes -- -- -- 25,218 25,218 Recreation and Parks -- 269,217 -- 4,430 273,647 Social Services -- -- -- 385 385 Solid Waste -- -- 1,081 -- 1,081 Street Services -- -- -- 6,838 6,838 Transportation -- -- -- 54,658 54,658

Unassigned:Economic Stabilization -- -- -- -- 528 Reserve, Emergency and Contingency -- -- -- -- 272,377 Unassigned -- -- -- (7,393) (7,393)

TOTAL FUND BALANCES 136,472 269,217 189,668 2,298,051 3,799,325

TOTAL LIABILITIES AND FUND BALANCES 167,250$ 295,456$ 210,608$ 2,866,858$ 5,987,079$


- 38 -

CITY OF LOS ANGELES

Reconciliation of the Balance Sheet of Governmental Fundsto the Statement of Net Assets


Total Fund Balances - Governmental Funds 3,799,325$

Amounts reported for Governmental Activities in the Statement of Net Assets aredifferent because:

Capital assets used in governmental activities are not financial resources and,therefore, are not reported in the funds. 7,245,108

Other long-term assets are not available to pay for current-period expenditures and,therefore, are deferred in the funds. 664,762

Long-term liabilities, including bonds payable, are not due and payable in the current period and, therefore, are not reported in the funds. (6,988,668)

Net Assets of Governmental Activities 4,720,527$


- 39 -


REVENUESProperty Taxes 1,470,799$ --$ --$ --$ Sales Taxes 328,059 -- -- -- Utility Users Taxes 634,629 -- -- -- Business Taxes 438,969 -- -- -- Other Taxes 392,686 -- -- -- Licenses and Permits 26,241 -- -- -- Intergovernmental 7,182 75,775 -- 353 Charges for Services 510,401 -- -- -- Services to Enterprise Funds 245,853 -- -- -- Fines 147,780 -- -- -- Special Assessments 1,922 -- -- -- Investment Earnings 21,456 3 1,256 1,821 Program Income -- 1,927 -- -- Other 91,357 473 22 --

TOTAL REVENUES 4,317,334 78,178 1,278 2,174EXPENDITURES

Current:General Government 1,257,198 -- 153 3,011 Protection of Persons and Property 2,279,987 -- -- -- Public Works 165,025 -- -- -- Health and Sanitation 146,270 -- -- -- Transportation 107,803 -- -- -- Cultural and Recreational Services 46,592 -- -- -- Community Development 30,544 97,602 -- --

Capital Outlay 17,751 -- 75,992 -- Debt Service:

Principal -- -- -- 222,711 Interest 1,152 -- -- 71,448 Cost of Issuance 940 -- 919 594

TOTAL EXPENDITURES 4,053,262 97,602 77,064 297,764

EXCESS (DEFICIENCY) OF REVENUES OVER

EXPENDITURES 264,072 (19,424) (75,786) (295,590)

OTHER FINANCING SOURCES (USES)Transfers In 270,660 8,405 -- 308,287 Transfers Out (486,336) (4,388) (153,556) (8) Issuance of Long-Term Debt -- -- 201,530 -- Premium on Issuance of Long-Term Debt -- -- 12,746 -- Loans from HUD -- -- -- -- Issuance of Refunding Bonds -- -- -- 109,730 Premium on Issuance of Refunding Bonds -- -- -- 11,555 Payment to Refunded Bond Escrow Agent -- -- -- (121,629)

TOTAL OTHER FINANCING SOURCES (USES) (215,676) 4,017 60,720 307,935NET CHANGE IN FUND BALANCES 48,396 (15,407) (15,066) 12,345

FUND BALANCES, JULY 1 520,058 139,196 86,746 126,419

INCREASE IN RESERVE FOR INVENTORIES 3,230 -- -- --

FUND BALANCES, JUNE 30 571,684$ 123,789$ 71,680$ 138,764$

Continued…




and Changes in Fund BalancesGovernmental Funds

CITY OF LOS ANGELES

Statement of Revenues, Expenditures

- 40 -


REVENUESProperty Taxes --$ --$ --$ 194,020$ 1,664,819$ Sales Taxes -- -- -- -- 328,059 Utility Users Taxes -- -- -- -- 634,629 Business Taxes -- -- -- -- 438,969 Other Taxes -- -- -- 59,195 451,881 Licenses and Permits -- 1,357 -- 32,876 60,474 Intergovernmental 135,225 281 1,027 717,974 937,817 Charges for Services 15,869 101,690 309,990 343,046 1,280,996 Services to Enterprise Funds -- -- 3,756 3,021 252,630 Fines -- -- -- 10,637 158,417 Special Assessments -- -- -- 121,461 123,383 Investment Earnings 2,454 5,464 3,079 36,878 72,411 Program Income -- -- -- 19,674 21,601 Other 836 4,951 3,521 49,508 150,668

TOTAL REVENUES 154,384 113,743 321,373 1,588,290 6,576,754 EXPENDITURES

Current:General Government -- -- -- 36,426 1,296,788 Protection of Persons and Property -- -- -- 252,275 2,532,262 Public Works -- -- -- 224,114 389,139 Health and Sanitation -- -- 230,634 76,777 453,681 Transportation 82,507 -- -- 155,361 345,671 Cultural and Recreational Services -- 222,760 -- 136,986 406,338 Community Development -- -- -- 337,838 465,984

Capital Outlay 80,087 14,080 13,746 322,275 523,931 Debt Service:

Principal -- -- -- 187,622 410,333 Interest -- -- -- 109,571 182,171 Cost of Issuance -- -- -- 2,889 5,342

TOTAL EXPENDITURES 162,594 236,840 244,380 1,842,134 7,011,640


EXPENDITURES (8,210) (123,097) 76,993 (253,844) (434,886)

OTHER FINANCING SOURCES (USES)Transfers In 11 148,726 -- 268,561 1,004,650 Transfers Out (3,411) -- (39,902) (66,972) (754,573) Issuance of Long-Term Debt -- -- -- 117,000 318,530 Premium on Issuance of Long-Term Debt -- -- -- 11,926 24,672 Loans from HUD -- -- -- 52,521 52,521 Issuance of Refunding Bonds -- -- -- 485,510 595,240 Premium on Issuance of Refunding Bonds -- -- -- 89,330 100,885 Payment to Refunded Bond Escrow Agent -- -- -- (572,697) (694,326)

TOTAL OTHER FINANCING SOURCES (USES) (3,400) 148,726 (39,902) 385,179 647,599NET CHANGE IN FUND BALANCES (11,610) 25,629 37,091 131,335 212,713

FUND BALANCES, JULY 1 148,082 243,588 152,577 2,166,716 3,583,382

INCREASE IN RESERVE FOR INVENTORIES -- -- -- -- 3,230

FUND BALANCES, JUNE 30 136,472$ 269,217$ 189,668$ 2,298,051$ 3,799,325$


(amounts expressed in thousands)For the Fiscal Year Ended June 30, 2012

and Changes in Fund Balances - (Continued)Governmental Funds

CITY OF LOS ANGELES

Statement of Revenues, Expenditures

- 41 -

CITY OF LOS ANGELES

Reconciliation of the Statement of Revenues,Expenditures, and Changes in Fund Balances of Governmental Funds

to the Statement of ActivitiesFor the Fiscal Year Ended June 30, 2012


Net Change in Fund Balances - Total Governmental Funds 212,713$

Amounts reported for Governmental Activities in the Statement of Activities aredifferent because:

105,328

84,483

5,410

(66,676)

Increase in reserve for inventory 3,230

Change in Net Assets of Governmental Activities 344,488$


The issuance of long-term debt (e.g. bonds) provides current financial resources to thegovernmental funds, while the repayment of the principal of long-term debt consumes thecurrent financial resources of governmental funds. Neither transaction, however, has anyeffect on net assets. Also, governmental funds report the effect of issuance costs,premiums, discounts, and similar items when debt is first issued, whereas, these amountsare deferred and amortized in the statement of activities. This amount is the net effect ofthese differences in the treatment of long-term debt and related items.

Some expenses reported in the statement of activities do not require the use of currentfinancial resources and, therefore, are not reported as expenditures in the governmentalfunds.

Governmental funds report capital outlays as expenditures. However, in the statement ofactivities, the cost of those assets is allocated over their estimated useful lives andreported as depreciation expense. This is the amount by which capital outlays exceededdepreciation in the current period.

Revenues and transfers in the statement of activities that do not provide current financialresources are not reported as revenues and other financing sources in the funds.

- 42 -


- 43 -

CITY OF LOS ANGELES

Statement of Revenues, Expenditures, and Changes in Fund BalancesBudget and Actual (Non-GAAP Budgetary Basis)

General FundFor the Fiscal Year Ended June 30, 2012


Actual Variance WithAmounts Final Budget

Budgeted Amounts (Budgetary PositiveOriginal Final Basis) (Negative)

REVENUESTaxes 3,191,058$ 3,191,058$ 3,204,805$ 13,747$ Licenses, Permits, Fees and Fines 861,971 878,627 879,088 461 Intergovernmental 24,520 27,156 15,845 (11,311) Interest 14,280 14,280 15,053 773 Other 9,500 9,500 9,197 (303)

TOTAL REVENUES 4,101,329 4,120,621 4,123,988 3,367

EXPENDITURESCurrent

General Government 1,343,125 1,463,716 1,383,343 80,373 Protection of Persons and Property 1,730,833 1,845,527 1,830,413 15,114 Public Works 290,160 346,212 315,187 31,025 Health and Sanitation 222,203 222,247 200,181 22,066 Transportation 127,918 140,048 134,092 5,956 Cultural and Recreational Services 54,946 56,312 53,194 3,118 Community Development 109,561 117,577 106,223 11,354 Pension and Retirement Contributions 1,630 1,490 1,451 39

Capital Outlay 6,510 27,797 9,763 18,034

TOTAL EXPENDITURES 3,886,886 4,220,926 4,033,847 187,079


EXPENDITURES 214,443 (100,305) 90,141 190,446

OTHER FINANCING SOURCES (USES) Transfers from Other Funds 1,101,289 1,349,273 1,192,220 (157,053) Loans from Other Funds -- 1,318 2,820 1,502 Transfers to Other Funds (1,315,732) (1,250,286) (1,244,810) 5,476

TOTAL OTHER FINANCING SOURCES (USES) (214,443) 100,305 (49,770) (150,075)

EXCESS (DEFICIENCY) OF REVENUES AND OTHER

FINANCING SOURCES OVER EXPENDITURES AND OTHER FINANCING USES -- -- 40,371 40,371

FUND BALANCES, JULY 1 -- -- -- -- Encumbrances Lapsed -- -- 16,760 16,760 Reversion to Reserve Fund -- -- (57,131) (57,131)

FUND BALANCES, JUNE 30 --$ --$ --$ --$


- 44 -

CITY OF LOS ANGELES

Statement of Revenues, Expenditures, and Changes in Fund Balances (Deficit)Budget and Actual (Non-GAAP Budgetary Basis)

Community Development FundFor the Fiscal Year Ended June 30, 2012




REVENUES

Intergovernmental 34,223$ 76,247$ 73,013$ (3,234)$

Charges for Services -- -- 2 2

Interest -- -- 3 3

Program Income -- 1,320 10,122 8,802

Other -- -- 474 474

TOTAL REVENUES 34,223 77,567 83,614 6,047

EXPENDITURES

Current

Community Development 9,238 143,675 61,590 82,085

EXCESS (DEFICIENCY) OF REVENUES OVEREXPENDITURES 24,985 (66,108) 22,024 88,132

OTHER FINANCING SOURCES (USES)

Transfers from Other Funds -- 1,050 4,090 3,040

Transfers to Other Funds (24,985) (38,276) (30,837) 7,439

TOTAL OTHER FINANCING SOURCES (USES) (24,985) (37,226) (26,747) 10,479

EXCESS (DEFICIENCY) OF REVENUES AND OTHERFINANCING SOURCES OVER EXPENDITURESAND OTHER FINANCING USES -- (103,334) (4,723) 98,611

FUND BALANCES (DEFICIT), JULY 1 -- -- (7,970) (7,970)

Appropriation of Fund Balance and CarryforwardAppropriations -- 103,334 -- (103,334)

Encumbrances Lapsed -- -- 843 843

FUND BALANCES (DEFICIT), JUNE 30 --$ --$ (11,850)$ (11,850)$


- 45 -

CITY OF LOS ANGELES

Statement of Revenues, Expenditures, and Changes in Fund Balances

Budget and Actual (Non-GAAP Budgetary Basis)

Proposition A Local Transit Assistance Fund



Actual Variance With

Amounts Final Budget

Budgeted Amounts (Budgetary Positive

Original Final Basis) (Negative)

REVENUES

Intergovernmental 105,900$ 105,900$ 132,259$ 26,359$

Charges for Services 14,905 14,905 16,676 1,771

Interest 1,300 1,300 2,169 869

Other 1,724 1,724 836 (888)

TOTAL REVENUES 123,829 123,829 151,940 28,111

EXPENDITURES

Current

Transportation 139,475 248,929 142,451 106,478

EXCESS (DEFICIENCY) OF REVENUES OVER EXPENDITURES (15,646) (125,100) 9,489 134,589

OTHER FINANCING SOURCES (USES)

Transfers from Other Funds -- 11 11 --

Transfers to Other Funds (8,403) (14,490) (7,278) 7,212



FINANCING SOURCES OVER EXPENDITURES

AND OTHER FINANCING USES (24,049) (139,579) 2,222 141,801


Appropriation of Fund Balance and Carryforward

Appropriations -- 115,530 -- (115,530)

Encumbrances Lapsed -- -- 10,278 10,278

FUND BALANCES, JUNE 30 --$ --$ 133,425$ 133,425$


- 46 -

CITY OF LOS ANGELES

Statement of Revenues, Expenditures, and Changes in Fund Balances Budget and Actual (Non-GAAP Budgetary Basis)

Solid Waste Resources FundFor the Fiscal Year Ended June 30, 2012




REVENUESIntergovernmental --$ --$ 862$ 862$ Charges for Services 289,519 289,519 309,915 20,396 Interest 1,876 1,876 2,585 709 Services to Enterprise Funds -- -- 4,370 4,370 Other 501 501 3,296 2,795

TOTAL REVENUES 291,896 291,896 321,028 29,132

EXPENDITURESCurrent Health and Sanitation 147,991 157,708 136,043 21,665

Capital Outlay 64,208 66,232 99 66,133 Debt Service Principal 26,045 26,045 26,045 -- Interest 14,027 15,775 14,027 1,748

TOTAL EXPENDITURES 252,271 265,760 176,214 89,546

EXCESS OF REVENUES OVER EXPENDITURES 39,625 26,136 144,814 118,678

OTHER FINANCING USESTransfers to Other Funds (107,720) (129,003) (102,785) 26,218


EXCESS (DEFICIENCY) OF REVENUES OVER EXPENDITURESAND OTHER FINANCING USES (68,095) (102,867) 42,029 144,896


Appropriation of Fund Balance and CarryforwardAppropriations -- 34,772 -- (34,772)



- 47 -

CITY OF LOS ANGELES

Statement of Fund Net AssetsProprietary Funds


Business-type Activities - Enterprise FundsAirports Harbor Power Water

ASSETS

CURRENT ASSETSCash, Pooled and Other Investments

Unrestricted 716,675$ 444,355$ 417,895$ 296,725$ Restricted 1,090,767 43,236 395,225 122,648

Investments Held by Escrow and Fiscal Agents Unrestricted 61,764 -- -- -- Restricted 1,144,974 -- -- --

Loans and Notes Receivable 141 62 65,593 -- Accounts Receivable

Accounts Receivable(Net of Allowance for Uncollectibles of $51,837) 27,685 33,646 325,702 86,712

Accrued Unbilled Revenue 30,073 -- 173,233 69,154 Investment Income Receivable 6,831 859 2,017 296 Intergovernmental Receivable 24,011 19,460 25,137 9,721 Passenger/Customer Facility Charge Receivable 25,009 -- -- -- Due from Other Funds 793 4,601 -- 64,978 Inventories 1,961 2,103 169,839 23,043 Prepaid Items and Other Assets 3,106 724 109,293 31,644

TOTAL CURRENT ASSETS 3,133,790 549,046 1,683,934 704,921

NONCURRENT ASSETSRestricted Assets

Pooled and Other Investments -- 9,401 20,730 -- Investments Held by Escrow and Fiscal Agents 61,580 68,185 639,121 33,078 Investment Income Receivable -- 2 -- --

Total Restricted Assets 61,580 77,588 659,851 33,078

Long-term InvestmentInvestment in Joint Ventures -- 5,037 -- --

Capital AssetsLand 872,057 1,072,398 166,137 115,188 Buildings, Facilities and Equipment 4,122,247 3,177,610 12,855,898 6,300,975 Leased Property and Improvements -- -- -- -- Intangible Assets 52,893 16,953 -- -- Accumulated Depreciation (1,743,013) (1,388,644) (6,462,915) (2,128,281) Construction in Progress 2,027,552 480,003 1,211,851 800,677 Natural Gas Field, Net -- -- 293,006 -- Nuclear Fuel, at Amortized Cost -- -- 49,687 --

Total Capital Assets 5,331,736 3,358,320 8,113,664 5,088,559

Other Noncurrent AssetsLoans and Notes Receivable 1,170 317 838,755 -- Intergovernmental Receivable -- -- -- -- Advances to Other Funds 14,657 14,658 -- -- Net Pension Assets -- -- -- 28,133 Net Other Postemployment Benefits Assets -- -- 631,479 292,395 Deferred Outflows on Derivative Instruments -- -- 91,296 -- Other Assets 22,767 7,198 608,596 14,621

Total Other Noncurrent Assets 38,594 22,173 2,170,126 335,149

TOTAL NONCURRENT ASSETS 5,431,910 3,463,118 10,943,641 5,456,786

TOTAL ASSETS 8,565,700$ 4,012,164$ 12,627,575$ 6,161,707$ Continued...

- 48 -

CITY OF LOS ANGELES

Statement of Fund Net Assets - (Continued)Proprietary Funds


Business-type Activities - Enterprise FundsOther-

ConventionSewer Center Total

ASSETS

CURRENT ASSETSCash, Pooled and Other Investments

Unrestricted 113,685$ 5,617$ 1,994,952$ Restricted 92,525 -- 1,744,401

Investments Held by Escrow and Fiscal Agents Unrestricted -- -- 61,764 Restricted -- -- 1,144,974

Loans and Notes Receivable -- -- 65,796 Accounts Receivable

Accounts Receivable (Net of Allowance for Uncollectibles of $51,837) 50,196 351 524,292

Accrued Unbilled Revenue 38,478 -- 310,938 Investment Income Receivable 1,049 19 11,071 Intergovernmental Receivable 7,736 -- 86,065 Passenger/Customer Facility Charge Receivable -- -- 25,009 Due from Other Funds 6,156 -- 76,528 Inventories 13,584 -- 210,530 Prepaid Items and Other Assets -- 1,116 145,883

TOTAL CURRENT ASSETS 323,409 7,103 6,402,203

NONCURRENT ASSETSRestricted Assets

Pooled and Other Investments 102,692 -- 132,823 Investments Held by Escrow and Fiscal Agents 3,851 -- 805,815 Investment Income Receivable -- -- 2

Total Restricted Assets 106,543 -- 938,640

Long-term InvestmentInvestment in Joint Ventures -- -- 5,037

Capital AssetsLand 40,093 139,592 2,405,465 Buildings, Facilities and Equipment 6,578,716 596,277 33,631,723 Leased Property and Improvements -- 9,500 9,500 Intangible Assets -- -- 69,846 Accumulated Depreciation (2,970,442) (244,674) (14,937,969) Construction in Progress 185,602 -- 4,705,685 Natural Gas Field, Net -- -- 293,006 Nuclear Fuel, at Amortized Cost -- -- 49,687

Total Capital Assets 3,833,969 500,695 26,226,943

Other Noncurrent AssetsLoans and Notes Receivable -- -- 840,242 Intergovernmental Receivable 35,010 -- 35,010 Advances to Other Funds 8,580 -- 37,895 Net Pension Assets -- -- 28,133 Net Other Postemployment Benefits Assets -- -- 923,874 Deferred Outflows on Derivative Instruments 38,745 -- 130,041 Other Assets 14,131 -- 667,313

Total Other Noncurrent Assets 96,466 -- 2,662,508

TOTAL NONCURRENT ASSETS 4,036,978 500,695 29,833,128

TOTAL ASSETS 4,360,387$ 507,798$ 36,235,331$ Continued...

- 49 -

CITY OF LOS ANGELES




LIABILITIES

CURRENT LIABILITIESAccounts, Contracts and Retainage Payable 164,116$ 43,289$ 341,942$ 107,212$ Accrued Salaries and Overtime Payable 10,244 1,930 41,736 18,317 Accrued Compensated Absences Payable 4,513 8,856 60,535 30,125 Due to Other Funds -- -- 64,978 -- Deferred Revenue and Other Credits 4,215 1,006 21,100 -- Deposits and Advances -- -- -- 76,829 Interest Payable 23,316 17,650 139,872 73,419 Bonds and Notes Payable - Current Portion 55,265 31,816 246,582 63,401 Advances from Other Funds -- -- -- -- Other Current Liabilities 68,907 62,709 -- 123,435

TOTAL CURRENT LIABILITIES 330,576 167,256 916,745 492,738

LONG-TERM LIABILITIESBonds and Notes Payable - Noncurrent Portion

(Net of Unamortized Debt Related Costsof $302,319) 3,749,805 936,312 6,354,469 3,195,110

Net Pension Liability 9,474 3,039 18,209 -- Derivative Instrument Liabilities -- -- 91,296 -- Other Long-term Liabilities 119,963 129,429 192,118 20,226

TOTAL LONG-TERM LIABILITIES 3,879,242 1,068,780 6,656,092 3,215,336

TOTAL LIABILITIES 4,209,818 1,236,036 7,572,837 3,708,074

NET ASSETSInvested in Capital Assets, Net of Related Debt 2,407,904 2,397,744 1,533,344 1,830,049 Restricted for:

Capital Projects 8,552 -- 123,627 -- Debt Service 388,458 67,796 620,688 24,997 Passenger/Customer Facility Charges 894,563 -- -- -- Pension and Other Postemployment Benefits -- -- 631,479 320,528 Other Purposes 176,684 -- 148,949 24,167

Unrestricted 479,721 310,588 1,996,651 253,892

TOTAL NET ASSETS 4,355,882$ 2,776,128$ 5,054,738$ 2,453,633$ Continued...

- 50 -

CITY OF LOS ANGELES





LIABILITIES

CURRENT LIABILITIESAccounts, Contracts and Retainage Payable 18,792$ 1,348$ 676,699$ Accrued Salaries and Overtime Payable -- 159 72,386 Accrued Compensated Absences Payable 21,095 1,555 126,679 Due to Other Funds 22 -- 65,000 Deferred Revenue and Other Credits -- 2,595 28,916 Deposits and Advances -- -- 76,829 Interest Payable 12,118 -- 266,375 Bonds and Notes Payable - Current Portion 72,412 -- 469,476 Advances from Other Funds -- 9 9 Other Current Liabilities 36,874 -- 291,925

TOTAL CURRENT LIABILITIES 161,313 5,666 2,074,294

LONG-TERM LIABILITIESBonds and Notes Payable - Noncurrent Portion

(Net of Unamortized Debt Related Costsof $302,319) 2,590,544 -- 16,826,240

Net Pension Liability -- -- 30,722 Derivative Instrument Liabilities 38,745 -- 130,041 Other Long-term Liabilities 15,151 1,804 478,691

TOTAL LONG-TERM LIABILITIES 2,644,440 1,804 17,465,694

TOTAL LIABILITIES 2,805,753 7,470 19,539,988

NET ASSETSInvested in Capital Assets, Net of Related Debt 1,185,737 500,695 9,855,473 Restricted for:

Capital Projects 36,745 -- 168,924 Debt Service 122,054 -- 1,223,993 Passenger/Customer Facility Charges -- -- 894,563 Pension and Other Postemployment Benefits -- -- 952,007 Special Purposes 36,418 -- 386,218

Unrestricted 173,680 (367) 3,214,165

TOTAL NET ASSETS 1,554,634$ 500,328$ 16,695,343$


- 51 -

CITY OF LOS ANGELES

Statement of Revenues, Expenses, and Changes in Fund Net AssetsProprietary Funds



OPERATING REVENUES Charges for Services 218,224$ 357,716$ 3,081,680$ 811,897$ Rent, Concessions and Royalties 652,248 43,143 -- -- Other Operating Revenues 31,685 8,928 -- --

TOTAL OPERATING REVENUES 902,157 409,787 3,081,680 811,897

OPERATING EXPENSESFuel for Generation -- -- 403,406 -- Purchased Power/Water -- -- 909,910 161,039 Maintenance and Repairs -- -- 304,750 111,640 Operating and Administrative 657,716 199,806 617,456 272,145 Depreciation and Amortization 151,654 100,485 394,019 106,160

TOTAL OPERATING EXPENSES 809,370 300,291 2,629,541 650,984

OPERATING INCOME (LOSS) 92,787 109,496 452,139 160,913

NONOPERATING REVENUES (EXPENSES)Investment Income 36,014 11,337 77,747 7,960 Interest Expense (86,700) (10,538) (237,688) (144,917) Other Income (Expenses), Net 174,950 (8,359) 49,334 25,591

TOTAL NONOPERATING REVENUES (EXPENSES) 124,264 (7,560) (110,607) (111,366)

INCOME (LOSS) BEFORE CAPITAL CONTRIBUTIONS AND TRANSFERS 217,051 101,936 341,532 49,547

Capital Contributions 62,441 31,307 26,731 27,482 Transfers Out -- -- (250,077) --

CHANGE IN NET ASSETS 279,492 133,243 118,186 77,029

Net Assets, July 1 4,076,390 2,642,885 4,936,552 2,376,604

NET ASSETS, JUNE 30 4,355,882$ 2,776,128$ 5,054,738$ 2,453,633$

Continued...

- 52 -

CITY OF LOS ANGELES

Statement of Revenues, Expenses, and Changes in Fund Net Assets (Continued)Proprietary Funds




OPERATING REVENUESCharges for Services 507,818$ 10,432$ 4,987,767$ Rent, Concessions and Royalties -- 8,865 704,256 Other Operating Revenues 9,041 8,032 57,686

TOTAL OPERATING REVENUES 516,859 27,329 5,749,709

OPERATING EXPENSESFuel for Generation -- -- 403,406 Purchased Power/Water -- -- 1,070,949 Maintenance and Repairs -- 2,037 418,427 Operating and Administrative 254,980 25,013 2,027,116 Depreciation and Amortization 155,217 11,952 919,487

TOTAL OPERATING EXPENSES 410,197 39,002 4,839,385

OPERATING INCOME (LOSS) 106,662 (11,673) 910,324

NONOPERATING REVENUES (EXPENSES)Investment Income 3,805 26 136,889 Interest Expense (121,144) (105) (601,092) Other Income (Expenses), Net (10,344) -- 231,172

TOTAL NONOPERATING REVENUES (EXPENSES) (127,683) (79) (233,031)

INCOME (LOSS) BEFORE CAPITAL CONTRIBUTIONS AND TRANSFERS (21,021) (11,752) 677,293

Capital Contributions 10,153 -- 158,114 Transfers Out -- -- (250,077)

CHANGE IN NET ASSETS (10,868) (11,752) 585,330

Net Assets, July 1 1,565,502 512,080 16,110,013

NET ASSETS, JUNE 30 1,554,634$ 500,328$ 16,695,343$


- 53 -

CITY OF LOS ANGELES

Statement of Cash FlowsProprietary Funds



CASH FLOWS FROM OPERATING ACTIVITIESReceipts from Customers and Users 905,006$ 400,452$ 2,967,014$ 888,504$ Receipts for Interfund Services -- -- 476,406 307,293 Payments to Suppliers (142,837) (38,007) (1,471,947) (228,281) Payments to Employees (362,222) (106,886) (547,522) (236,955) Payments for Interfund Services (81,072) (38,446) (572,341) (492,462)

NET CASH PROVIDED BY (USED FOR) OPERATING ACTIVITIES 318,875 217,113 851,610 238,099

CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES

Transfers Out -- -- (250,077) -- Principal and Interest Received on Loans Receivable 235 -- -- -- Amounts Received on Advances to Other Funds -- 4,466 -- -- Noncapital Grants Received 11,206 2,674 -- --

NET CASH PROVIDED BY (USED FOR) NONCAPITAL FINANCING ACTIVITIES 11,441 7,140 (250,077) --

CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES

Acquisition and Construction of Capital Assets (939,230) (160,011) (1,093,491) (429,239) Proceeds from Sale of Capital Assets -- 3,604 -- -- Receipts from Passenger/Customer Facility Charges 159,192 -- -- -- Proceeds from Sale of Bonds and Notes 209,398 91,750 -- 54,752 Payments on Bonds and Notes - Interest (188,406) (32,339) (270,937) (152,105) Payments on Bonds and Notes - Principal (210,511) (132,063) (62,157) (28,960) Payments of Bonds and Notes Expenses -- -- -- -- Payments to/Receipts from Bond Sinking Fund -- (455) -- -- Deposits to Refunded Debt Escrow Account -- -- -- -- Capital Contributions/Grants Received 64,921 28,444 25,167 27,482 Federal Bond Subsidies -- -- 35,143 18,530

NET CASH PROVIDED BY (USED FOR) CAPITAL AND RELATED FINANCING ACTIVITIES (904,636) (201,070) (1,366,275) (509,540)

CASH FLOWS FROM INVESTING ACTIVITIESInvestment Income 36,659 12,579 116,008 8,241 Cash Collateral Received (Paid) Under

Securities Lending Transactions (165,984) (41,077) (69,534) (22,936) Purchase of Investment Securities 48,539 -- (1,224,872) (96,064) Proceeds from Maturities of Investment Securities 185,855 -- 1,220,159 95,879 Proceeds from Notes Receivable -- 83 64,300 --

NET CASH PROVIDED BY (USED FOR ) INVESTING ACTIVITIES 105,069 (28,415) 106,061 (14,880)

Continued…

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CITY OF LOS ANGELES

Statement of Cash Flows - (Continued)Proprietary Funds




CASH FLOWS FROM OPERATING ACTIVITIESReceipts from Customers and Users 514,358$ 26,657$ 5,701,991$ Receipts for Interfund Services 6,663 -- 790,362 Payments to Suppliers (90,711) (3,462) (1,975,245) Payments to Employees -- (14,924) (1,268,509) Payments for Interfund Services (193,542) (7,485) (1,385,348)

NET CASH PROVIDED BY (USED FOR) OPERATING ACTIVITIES 236,768 786 1,863,251

CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES

Transfers Out -- -- (250,077) Principal and Interest Received on Loans Receivable -- -- 235 Amounts Received on Advances to Other Funds 141 -- 4,607 Noncapital Grants Received 929 -- 14,809

NET CASH PROVIDED BY (USED FOR) NONCAPITAL FINANCING ACTIVITIES 1,070 -- (230,426)

CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES

Acquisition and Construction of Capital Assets (126,114) (359) (2,748,444) Proceeds from Sale of Capital Assets 3,165 -- 6,769 Receipts from Passenger/Customer Facility Charges -- -- 159,192 Proceeds from Sale of Bonds and Notes -- -- 355,900 Payments on Bonds and Notes - Interest (108,320) -- (752,107) Payments on Bonds and Notes - Principal (68,876) -- (502,567) Payments of Bonds and Notes Expenses (7,732) -- (7,732) Payments to/Receipts from Bond Sinking Fund -- -- (455) Deposits to Refunded Debt Escrow Account (17,551) -- (17,551) Capital Contributions/Grants Received 9,644 -- 155,658 Federal Bond Subsidies -- -- 53,673

NET CASH PROVIDED BY (USED FOR) CAPITAL AND RELATED FINANCING ACTIVITIES (315,784) (359) (3,297,664)

CASH FLOWS FROM INVESTING ACTIVITIESInvestment Income 3,637 99 177,223 Cash Collateral Received (Paid) Under

Securities Lending Transactions -- -- (299,531) Purchase of Investment Securities -- -- (1,272,397) Proceeds from Maturities of Investment Securities -- -- 1,501,893 Proceeds from Notes Receivable -- -- 64,383

NET CASH PROVIDED BY (USED FOR ) INVESTING ACTIVITIES 3,637 99 171,571

Continued…

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CITY OF LOS ANGELES




NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS (469,251)$ (5,232)$ (658,681)$ (286,321)$

CASH AND CASH EQUIVALENTS, JULY 1 3,483,431 492,823 1,492,531 705,694

CASH AND CASH EQUIVALENTS, JUNE 30 3,014,180$ 487,591$ 833,850$ 419,373$

CASH AND CASH EQUIVALENTS COMPONENTS:Unrestricted Cash, Pooled and Other Investments 716,675$ 444,355$ 417,895$ 296,725$ Restricted Cash, Pooled and Other Investments 1,090,767 43,236 415,955 122,648 Unrestricted Investments Held by Escrow and Fiscal Agents 61,764 -- -- -- Restricted Investments Held by Escrow and Fiscal Agents 1,144,974 -- -- --

TOTAL CASH AND CASH EQUIVALENTS, JUNE 30 3,014,180$ 487,591$ 833,850$ 419,373$

RECONCILIATION OF OPERATING INCOME (LOSS)TO NET CASH PROVIDED BY (USED FOR) OPERATING ACTIVITIES

Operating Income (Loss) 92,787$ 109,496$ 452,139$ 160,913$ Adjustments to Reconcile Operating Income (Loss) to Net Cash Provided by Operating Acitvities:

Depreciation and Amortization 151,654 100,485 394,019 106,160 Depletion -- -- 29,064 -- Amortization of Nuclear Fuel -- -- 13,248 -- Bad Debts Provision (Recovery) 7,633 323 23,834 10,446 Cash Provided By Other Nonoperating Income 774 -- 17,571 9,034 Cash Used in Other Nonoperating Expenses -- -- (3,380) (3,674) Decrease (Increase) in Assets:

Accounts Receivable (19,480) (6,606) (36,155) 19,319 Accrued Unbilled Revenue 9,323 -- (17,154) (4,972) Due from Other Funds -- -- 3,267 (64,978) Inventories -- 120 (15,349) (672) Prepaid Items and Other Current Assets (2,655) 2,151 38,641 9,228 Other Assets -- -- (120,822) 4,426

Increase (Decrease) in Liabilities:Accounts, Contracts and Retainage Payable 53,231 8,498 81,921 12,605 Accrued Salaries and Overtime Payable 1,407 -- 3,579 2,054 Accrued Compensated Absences Payable (2,092) (1,976) 1,352 397 Due to Other Funds -- -- 64,978 (3,267) Deferred Revenue and Other Credits -- 4,622 (58,014) -- Other Liabilities 26,293 -- (21,129) (18,920)

TOTAL ADJUSTMENTS 226,088 107,617 399,471 77,186

NET CASH PROVIDED BY (USED FOR) OPERATINGACTIVITIES 318,875$ 217,113$ 851,610$ 238,099$

NONCASH CAPITAL AND RELATED FINANCING ACTIVITIES

Net proceeds of revenue and refunding bonds depositedwith escrow agent to refund or redeem outstanding revenue bonds --$ --$ --$ 637,828$

Acquisition of capital assets included in accounts and contracts payable 54,811 4,696 -- --

Capital contributions 20,394 -- -- -- Interest rate swap termination payment -- -- -- --

Continued...

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CITY OF LOS ANGELES





NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS (74,309)$ 526$ (1,493,268)$

CASH AND CASH EQUIVALENTS, JULY 1 383,211 5,091 6,562,781

CASH AND CASH EQUIVALENTS, JUNE 30 308,902$ 5,617$ 5,069,513$

CASH AND CASH EQUIVALENTS COMPONENTS:Unrestricted Cash, Pooled and Other Investments 113,685$ 5,617$ 1,994,952$ Restricted Cash, Pooled and Other Investments 195,217 -- 1,867,823 Unrestricted Investments Held by Escrow and Fiscal Agents -- -- 61,764 Restricted Investments Held by Escrow and Fiscal Agents -- -- 1,144,974

TOTAL CASH AND CASH EQUIVALENTS, JUNE 30 308,902$ 5,617$ 5,069,513$

RECONCILIATION OF OPERATING INCOME (LOSS)TO NET CASH PROVIDED BY (USED FOR) OPERATING ACTIVITIES

Operating Income (Loss) 106,662$ (11,673)$ 910,324$ Adjustments to Reconcile Operating Income (Loss) to Net Cash Provided by Operating Acitvities:

Depreciation and Amortization 155,217 11,952 919,487 Depletion -- -- 29,064 Amortization of Nuclear Fuel -- -- 13,248 Bad Debts Provision (Recovery) (1,062) (132) 41,042 Cash Provided By Other Nonoperating Income 4,002 -- 31,381 Cash Used in Other Nonoperating Expenses (2,500) -- (9,554) Decrease (Increase) in Assets:

Accounts Receivable 1,222 295 (41,405) Accrued Unbilled Revenue -- -- (12,803) Due from Other Funds -- -- (61,711) Inventories (568) -- (16,469) Prepaid Items and Other Current Assets -- (42) 47,323 Other Assets -- -- (116,396)

Increase (Decrease) in Liabilities:Accounts, Contracts and Retainage Payable (9,326) (396) 146,533 Accrued Salaries and Overtime Payable -- (17) 7,023 Accrued Compensated Absences Payable -- (50) (2,369) Due to Other Funds (16,879) -- 44,832 Deferred Revenue and Other Credits -- (835) (54,227) Other Liabilities -- 1,684 (12,072)

TOTAL ADJUSTMENTS 130,106 12,459 952,927

NET CASH PROVIDED BY (USED FOR) OPERATINGACTIVITIES 236,768$ 786$ 1,863,251$

NONCASH CAPITAL AND RELATED FINANCING ACTIVITIES

Net proceeds of revenue and refunding bonds depositedwith escrow agent to refund or redeem outstanding revenue bonds 671,051$ --$ 1,308,879$

Acquisition of capital assets included in accounts and contracts payable 12,408 -- 71,915

Capital contributions -- -- 20,394 Interest rate swap termination payment 26,096 -- --


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CITY OF LOS ANGELES

Statement of Fiduciary Net AssetsFiduciary Funds


Pension andOther

PostemploymentBenefits Agency

Trust Funds FundsASSETS

Cash and Pooled Investments 22,456$ 239,147$ Prepaid Expense 3 -- Investments: Temporary 1,290,457 109 U.S. Government Agencies Securities 3,928,957 -- Medium Term Notes 218 -- Domestic Corporate Bonds 3,188,454 -- International Bonds 327,331 -- Bank Loan 4,213 -- Opportunistic Debt 78,925 -- Domestic Stocks 13,238,883 166 International Stocks 5,390,650 -- Mortgage-backed Securities 870,198 -- Derivative Instruments 424 -- Real Estate 2,091,391 -- Venture Capital and Alternative Investments 3,548,709 -- Security Lending Collateral 2,695,859 -- Accounts Receivable 66,324 -- Special Assessments Receivable -- 1,084 Investment Income Receivable 109,296 311 Due from Brokers 358,994 -- Advances to Other Funds -- 31,163 Prepaid Health Subsidy 7,363 -- Capital Assets (Net of Accumulated Depreciation of $825) 214 --

TOTAL ASSETS 37,219,319 271,980$

LIABILITIESAccounts Payable and Accrued Expenses 62,137 --$ Benefits in Process of Payment 20,064 -- Fiduciary Liabilities -- 162,617 Obligations Under Securities Lending Transactions 2,695,859 -- Deposits and Advances -- 109,363 Mortgage Loan Payable - Current Portion 520 -- Mortgage Loan Payable - Noncurrent Portion 206,970 -- Due to Brokers 684,115 --

TOTAL LIABILITIES 3,669,665 271,980$

NET ASSETSNet Assets Held in Trust for Pension and Other Employee Benefits Benefit Pension Plans 29,829,379 Disability Plan 47,634 Death Benefit Plan 24,757 Postemployment Healthcare Plans 3,647,884

TOTAL NET ASSETS 33,549,654$


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Pension andOther

PostemploymentBenefits

Trust FundsADDITIONS

ContributionsEmployer 1,318,438$ Plan Member 359,209 Other 1,999

Total Contributions 1,679,646

Investment IncomeNet Depreciation in Fair Value of Investments (424,177) Interest Income 377,531 Dividend Income 347,588 Securities Lending Income 15,651 Other Investment Income 44,511 Real Estate Operating Income, Net 86,529

Investment Income 447,633

Investment Expense (95,850) Securities Lending Expense (2,106)

Net Investment Income 349,677

TOTAL ADDITIONS 2,029,323

DEDUCTIONSBenefit Payments 2,179,066 Refunds of Member Contributions 17,965 Administrative Expenses 36,219

TOTAL DEDUCTIONS 2,233,250

CHANGE IN NET ASSETSBenefit Pension Plans (332,365) Disability Plan 575 Death Benefit Plan 2,314 Postemployment Healthcare Plans 125,549

TOTAL CHANGE IN NET ASSETS (203,927)

Net Assets Held in Trust for Pension and Other Employee Benefits, July 1

Benefit Pension Plans 30,161,744 Disability Plan 47,060 Death Benefit Plan 22,442 Postemployment Healthcare Plans 3,522,335

NET ASSETS HELD IN TRUST FOR PENSION AND OTHER EMPLOYEE BENEFITS, JUNE 30 33,549,654$



CITY OF LOS ANGELES

Statement of Changes in Fiduciary Net AssetsFiduciary Funds

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PageNote 1 - Summary of Significant Accounting Policies

A. 61B. 61C. 64D. Measurement Focus, Basis of Accounting, and Financial

Statement Presentation……………………………………………………………… 65E. 67

Note 2 - Reconciliation of Government-wide and Fund Financial StatementsA. Explanation of Certain Difference Between the Governmental Funds

Balance Sheet and the Government-wide Statement of Net Assets…………… 78B. Explanation of Certain Differences Between the Governmental Funds

Statement of Revenues, Expenditures, and Changes in Fund Balances and the Government-wide Statement of Activities……………………… 78

Note 3 - Stewardship, Compliance, and AccountabilityA. 80B. 82

Note 4 - Detailed Notes on All FundsA. Cash, Deposits and Investments………………………………………………………… 85B. Receivables………………………………………………………………………………… 107C. Restricted Assets………………………………………………………………………….. 108D. Joint Ventures……………………………………………………………………………… 109E. Capital Assets……………………………………………………………………………… 110F. Interfund Receivables, Payables and Transfers………………………………………… 113G. Accounts Payable and Accrued Expenses……………………………………………… 116H. Long-term Liabilities………………………………………………………………………… 116I. Current and Advance Refunding of Debt………………………………………………… 135J. Prior Years Defeasance of Debt…………………………………………………………… 137K. Tax and Revenue Anticipation Notes…………………………………………………… 137L. Interest Rate Swaps………………………………………………………………………… 138M. Electricity Swap and Forward Contracts………………………………………………… 140N. Leases……………………………………………………………………………………… 141O. Risk Management - Estimated Claims and Judgments Payable……………………… 146P. Accrued Landfill Liability…………………………………………………………………… 148Q. Pollution Remediation Obligations……………..………………………………………… 149

Note 5 - Other InformationA. Pension and Other Postemployment Benefit Plans…………………………………… 152B. Early Retirement Incentive Program ……………………………………………………… 162C. Commitments and Contingencies………………………………………………………… 163D. Third-Party Obligations…………………………………………………………………… 180E. Other Matters………………………………………………………………………………… 181F. Dissolution of Community Redevelopment Agency and Related Contingencies 190G. Subsequent Events………………………………………………………………………. 192H. Other Matters Affecting the City's Future Operations ………………………………… 196

Assets, Liabilities and Net Assets or Equity..............................................................

Budgets and Budgetary Basis of Accounting............................................................Reconciliation of Operations on Budgetary Basis to the GAAP Basis......................

Notes to the Basic Financial Statements

The Notes to the Basic Financial Statements include disclosures considered necessary for a betterunderstanding of the accompanying financial statements. An index to the Notes follows:

General.....................................................................................................................Reporting Entity.........................................................................................................Government-wide and Fund Financial Statements...................................................

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CITY OF LOS ANGELES

NOTES TO THE BASIC FINANCIAL STATEMENTS Fiscal Year Ended June 30, 2012

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NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES A. General The City of Los Angeles (City) was incorporated in 1850 under the provisions of a City Charter. The current Charter was approved by the electorate on June 8, 1999 and became operative on July 1, 2000. The City operates under a Mayor-Council form of government. As Executive Officer, the Mayor supervises the administrative process of the City and works with the Council in matters relating to legislation, budget, and finance. As governing body of the City, the 15-member full-time Council enacts ordinances, levies taxes, approves utility rates, authorizes contracts and public improvements, adopts zoning and other land use controls, and provides the necessary resources for the budgetary departments and offices of the City. Council action is subject to the approval or veto of the Mayor and Council may override a Mayoral veto by a two-thirds vote. The Charter provides for an independently elected City Attorney and independently elected City Controller.

Public services provided by the City include: police; fire and paramedics; residential refuse collection and disposal, wastewater collection and treatment, street maintenance, and other public works functions; enforcement of ordinances and statutes relating to building safety; public libraries; recreation and parks; community development; housing and aging services; planning; airports; harbor; power and water services; and the convention center. B. Reporting Entity For financial reporting purposes, the City (the primary government) consists of the funds, departments, agencies, boards, and commissions for which the City is financially accountable. Criteria indicating financial accountability include, but are not limited to, the following: • Appointment by the City of a majority of voting members of the governing body of an

organization and ability of the City to impose its will on the daily operations of an organization, such as power to remove appointed members at will; to modify or approve budgets, rates or fees; or to make other substantive decisions; or provision by the organization of specific financial benefits to the City; or imposition by an organization of specific financial burdens on the City, such as assumption of deficits or provision of support, or

• Fiscal dependency by the organization on the City such as lack of authority to determine a

budget, approve rates, or issue its own bonded debt without City approval.

Blended Component Units Although the following are legally separate from the City, they are reported as if they are part of the City because their sole purpose is to provide services entirely to or exclusively for the City or the City Council is the governing body.

CITY OF LOS ANGELES


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NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Los Angeles Convention and Exhibition Center Authority

The Authority was formed under a joint exercise of powers agreement between the City and the County of Los Angeles for the purpose of providing financial assistance with respect to the financing, acquisition and construction of convention and exhibition hall and related facilities within the boundaries of the City. The Authority is composed of 15 members, 10 are appointed by the City Mayor and 5 are appointed by the County Board of Supervisors. Capital financing activities are included in the Other Governmental Funds. Completed capital assets are contributed to the Convention Center Enterprise Fund.

Los Angeles Harbor Improvement Corporation

The Corporation is a nonprofit, public benefit corporation organized for the sole purpose of assisting the City, acting through the Board of Harbor Commissioners (Harbor Board), in providing financing for the acquisition, construction, replacement, or expansion of improvements to the facilities that the Board deems necessary for the promotion and accommodation of commerce within the area controlled by the Port of Los Angeles (Port). The Corporation is a component unit of the Port and is included in the Harbor Enterprise Fund.

Municipal Improvement Corporation of Los Angeles

The Municipal Improvement Corporation of Los Angeles (MICLA) was formed for the purpose of providing financial assistance to the City for the acquisition of certain real property and equipment, and the construction of buildings and other improvements, for the benefit of the public, through the issuance of certificates of participation and lease revenue bonds. MICLA is reported as a major special revenue and debt service fund. Community Redevelopment Agency The Community Redevelopment Agency of the City of Los Angeles (CRA) was a governmental entity that was legally separate from the City. It was created by the City to remove blight in accordance with Section 33000 of the California Health and Safety Code that authorized municipal agencies to form redevelopment areas and agencies. On December 29, 2011, the California Supreme Court upheld Assembly Bill 1X26 (Dissolution Act) that provides for the dissolution of all redevelopment agencies in the State of California (State). This action impacted the reporting entity of the City that previously had reported CRA as a discretely presented component unit. As a result of the change in reporting entity, the City restated the beginning balances as if CRA was not in the reporting entity in fiscal year 2010-11. See Note 5F on pages 190 to 191 for related discussion on this matter.

CITY OF LOS ANGELES


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Investment in Joint Ventures

The following entities are joint ventures of the Department of Harbor: Intermodal Container Transfer Facility Joint Powers Authority (ICTF) Alameda Corridor Transportation Authority (ACTA) Excluded Organizations

Joint Venture

The Los Angeles Memorial Coliseum Commission (Commission) was created by a joint powers agreement between the City, Los Angeles County, and the California Museum of Science and Industry, an institution of the State of California. Its purpose is to provide for the operation and maintenance of the Coliseum and Sports Arena. The Commission is not a City function and operates independent of City oversight and financial accountability. The City appointees comprise 33% of the Commission.

Related Organization

The Housing Authority of the City of Los Angeles is an organization for which the City has appointed the voting majority of the members of the governing body but for which the City is not financially accountable. The City retains and exercises its authority over the entity only as provided by the municipal code and Federal laws. The entity is fiscally independent from the City. The City is unable to impose its will on the daily operations of the entity. The City's accountability to this entity is limited to removal of a commissioner by the Mayor or the entire board by the City Council for cause and under due process.

CITY OF LOS ANGELES


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NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) Separate Audited Financial Statements Separate audited financial statements may be obtained through the Office of the City Controller, 200 North Main Street, Room 300, Los Angeles, California 90012, for the following City departments and component units:

Department of Airports (Airports) Department of Harbor (Harbor) Department of Water and Power (DWP) Sewer Construction and Maintenance Fund (Sewer) Los Angeles City Employees' Retirement System (LACERS)

Fire and Police Pension System (Pensions) Water and Power Employees' Retirement, Disability and

Death Benefit Insurance Plan (DWP Retirement) Municipal Improvement Corporation of Los Angeles (MICLA)

C. Government-wide and Fund Financial Statements The government-wide financial statements (i.e., the statement of net assets and the statement of activities) report information on all of the nonfiduciary activities of the primary government and its component units. For the most part, the effect of interfund activity has been removed from these statements. Governmental activities, which normally are supported by taxes and intergovernmental revenues, are reported separately from business-type activities, which rely, to a significant extent on fees and charges for support. The statement of activities demonstrates the degree to which the direct expenses of a given function or program are offset by program revenues. Direct expenses are those that are clearly identifiable with a specific function or program. Included in the direct expenses are indirect costs, such as fringe benefits, administrative overhead, and liability claims, which were automatically allocated to the specific function or program. Charges for workers’ compensation, information technology services, telephone, postage, and fleet services are not allocated and are included as part of the general government functional activity. Program revenues include 1) charges to customers or applicants who purchase, use, or directly benefit from goods, services, or privileges provided by a given function or segment and 2) grants and contributions that are restricted to meeting operational or capital requirements of a particular function or segment. Taxes and other items not included among program revenues are reported instead as general revenues. Separate financial statements are provided for governmental funds, proprietary funds, and fiduciary funds, even though the latter are excluded from the government-wide financial statements. Major individual governmental funds and individual enterprise funds are reported as separate columns in the fund financial statements.

CITY OF LOS ANGELES


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NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) D. Measurement Focus, Basis of Accounting, and Financial Statement Presentation The government-wide financial statements are reported using the economic resources measurement focus and the accrual basis of accounting, as are the proprietary fund and pension trust fund financial statements. Revenues are recognized when earned and expenses are recognized when a liability is incurred, regardless of the timing of related cash flows. The governmental fund financial statements are reported using the current financial resources measurement focus and the modified accrual basis of accounting. Revenues are recognized as soon as they are both measurable and available. Revenues are considered to be available when they are collectible within the current period or soon enough thereafter to pay liabilities of the current period. For this purpose, the City considers revenues to be available if they are collected within 60 days of the end of the current fiscal year. Expenditures generally are recorded when liability is incurred, as under accrual accounting. However, debt service expenditures are recorded only when payment is due, while expenditures related to compensated absences, claims and judgments, and landfill closure and postclosure care costs are recognized to the extent that they are normally expected to be liquidated with expendable available resources and are due and payable at year-end. Revenues susceptible to accrual are property taxes, business taxes, sales taxes, utility users’ taxes, transient occupancy tax, charges for services, special assessments, franchise income, licenses and permits, and interest income. In applying the susceptible to accrual concept to Federal and State grants and subventions, revenues are recognized when applicable eligibility requirements, including time requirements, are met and the resources are available. The City reports the following major governmental funds:

The General Fund is the primary operating fund of the City. It is used to account for all financial resources of the general government, except those required to be accounted for in other funds. The Community Development Fund accounts for the Block Grant funds allocated by the United States Department of Housing and Urban Development (HUD) for the development of viable urban communities, including: decent housing and suitable living environment; expanding economic opportunities, principally for persons of low and moderate income; and physical improvements to communities accompanied by supportive social services. The Municipal Improvement Corporation Funds account for the activity of the City’s public financing entity component unit which finances the acquisition of real property and equipment, the construction of buildings, and other improvements for the benefit of the public. The assets acquired or constructed by the Corporation are leased to the City under long-term capital lease agreements and become property of the City at the termination of the lease. The effects of the capital lease arrangements have been eliminated from the basic financial statements.

CITY OF LOS ANGELES


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The Proposition A Local Transit Assistance Fund accounts for the City’s 25% share of the additional one-half cent sales tax within the County of Los Angeles to (a) improve and expand existing public transit Countywide, including reduction of transit fares, (b) construct and operate a rail rapid transit system, and (c) more effectively use State and Federal funds, benefit assessments, and fares. The Recreation and Parks Fund accounts for the revenues and expenditures of the Department of Recreation and Parks in operating and maintaining parks, playgrounds, swimming pools, public golf courses, recreation centers, recreation camps and educational facilities, and structures of historical significance. The Solid Waste Resources Fund accounts for the solid waste collection, transfer, recycling, recovery of waste resources, and disposal fee imposed on all single dwellings in the City and on multiple unit dwellings for which the City provides refuse collection services. The fees collected are to cover all costs associated with the City’s solid waste collection, recycling and disposal activities. The Fund was formerly known as Sanitation Equipment Charge Fund.

The City reports the following major proprietary funds:

The Airports Fund accounts for the operation, maintenance and development of City airports, namely: Los Angeles International Airport, LA/Ontario International Airport, Van Nuys Airport and LA/Palmdale Regional Airport. The Harbor Fund accounts for the operations of the Port of Los Angeles formed for the purpose of providing shipping, fishing, recreational and other resources for the enjoyment of the citizens of California and surrounding communities. The Power and Water Funds account for the operations of the Department of Water and Power (DWP) in supplying the City and its inhabitants with water and electric power by constructing, operating, and maintaining facilities located throughout the City and Inyo and Mono Counties. The Sewer Fund accounts for the construction, operations and maintenance of the City’s wastewater collection and treatment system.

Additionally, the City reports the following fund types:

The Pension Trust Funds account for the activities of the City’s three single-employer defined benefit pension plans namely: Fire and Police Pensions System (Pensions); Los Angeles City Employees’ Retirement System (LACERS); and Water and Power Employees’ Retirement, Disability and Death Benefit Insurance Plan (DWP Retirement Plan). The Other Postemployment Benefits Trust Funds account for the activities of the City’s three single-employer defined benefit postemployment healthcare plans provided through the defined benefit pension plans namely: Fire and Police Health Subsidy Plan, Los Angeles City Employees’ Postemployment Healthcare Plan, and Water and Power Employees’ Retiree Health Benefits Plan.

CITY OF LOS ANGELES


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The Agency Funds account for assets held by the City as an agent for others, for example: Federal and State income taxes withheld from employees; and assessments for payments of certain conduit debt.

Private-sector standards of accounting and financial reporting issued prior to December 1, 1989, generally are followed in both the government-wide and proprietary fund financial statements to the extent that those standards do not conflict with or contradict guidance of the Governmental Accounting Standards Board (GASB). Governments also have the option of following subsequent private-sector guidance for their business-type activities and enterprise funds subject to this same limitation. The City has elected not to follow subsequent private-sector guidance. As a general rule, the effect of interfund activity has been eliminated from the government-wide financial statements. Exceptions to this general rule are charges between the City’s business-type activities and certain other governmental functions. Elimination of these charges would distort the direct costs and program revenues reported for the various functions concerned. Amounts reported as program revenues include 1) charges to customers or applicants for goods, services, or privileges provided, 2) operating grants and contributions, and 3) capital grants and contributions, including special assessments. Revenues that do not meet the criteria to be reported as program revenues are reported as general revenues. All taxes, even those levied for a specific purpose, are reported as general revenues. Proprietary funds distinguish operating revenues and expenses from nonoperating items. Operating revenues and expenses generally result from providing services in connection with a proprietary fund’s principal ongoing operations. The principal operating revenues of the City’s enterprise funds are charges to customers for sales and services while operating expenses include 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. When both restricted and unrestricted resources are available for use, it is the City’s policy to use restricted resources first, and then unrestricted resources, as they are needed. E. Assets, Liabilities and Net Assets or Equity Cash and Cash Equivalents For purposes of the statement of cash flows, all Proprietary Fund cash and pooled investments with the City Treasurer, cash deposits and other short-term investments that are both readily convertible to known amounts of cash and have maturities of three months or less at the time of purchase, are considered to be cash and cash equivalents. At June 30, 2012, the Proprietary Funds’ investments held by escrow and fiscal agents of $805.8 million and other investments of $9.4 million have maturities beyond three months and therefore are not considered cash and cash equivalents.

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Inventories

Inventories for materials and supplies, valued at average cost for the governmental activities and governmental funds, consist of expendable supplies held for consumption and are recorded as expenditures when purchased in the fund financial statements, but are recorded as expenses when consumed in the government-wide statement of activities.

For the business-type activities and proprietary funds, inventories for materials and supplies are stated at average cost except for Airports which uses cost on a first-in, first-out basis. Fuel is recorded at lower of cost or market on average cost basis. Restricted Assets The restricted assets for governmental activities and governmental funds are related to the State mandated deposit with a trustee bank to finance solid waste landfill closure and postclosure care costs. For the business-type activities and proprietary funds, amounts are reserved for accumulated resources for debt service payments, nuclear decommissioning trust funds, natural gas trust fund, hazardous waste treatment trust fund, SCPPA Palo Verde investment, self-insurance fund, bond security funds, and construction funds. Capital Assets Capital assets, which include property, plant, equipment, intangible assets, and infrastructure assets (e.g. streets and bridges) are reported in the applicable governmental or business-type activities columns in the government-wide statement of net assets. Generally, assets with an individual cost of at least $5,000 and an estimated useful life of more than one year are capitalized. Purchased or constructed capital assets, and intangible assets are valued at historical cost or estimated historical cost if actual historical cost is not available. Assets acquired by donation are recorded at estimated fair value on the date received. The costs of normal maintenance and repairs that do not add to the value of the asset or materially extend assets lives are not capitalized. Major outlays for capital assets and improvements are capitalized as projects are constructed. The business-type activities and proprietary funds capitalize interest costs as well as preliminary development costs of capital projects incurred prior to the finalization of formal construction contracts. The Power and Water Enterprise Funds provide an "allowance for funds used during construction (AFUDC)" which represents the cost of borrowed funds used for the construction of utility plant. Interest and AFUDC capitalized during the year ended June 30, 2012 were $128.5 million and $35.2 million, respectively. Depreciation, which includes amortization of assets under capital leases, is computed using the straight-line method over the estimated useful or service lives of the related assets, except as noted below.

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Depreciation for the Power Enterprise Fund (Power) facilities completed prior to July 1, 1973 is computed by the 5% sinking fund method based on estimated service lives. Decommissioning of a nuclear power plant, in which the City has an ownership interest, is expected to commence subsequent to the year 2044. The total cost to decommission the City’s interest in the nuclear plant is estimated to be $139.0 million in 2011 dollars. During fiscal year 2000, Power suspended contributing additional amounts to the decommissioning trust funds, as management believes that contribution to date combined with reinvested earnings, will be sufficient to fully fund Power’s share of decommissioning costs. As of June 30, 2012, Power has recorded $143.2 million to accumulated depreciation to provide for the decommissioning liability. The Power’s nuclear fuel is amortized and charged to operating expenses - fuel for generation on the basis of actual thermal energy produced relative to total thermal energy expected to be produced over the life of the fuel.

In July 2005, Power acquired approximately a 74.5% ownership interest in gas properties located in Pinedale, Wyoming. Power uses the successful efforts method of accounting for its investment in gas producing properties. Costs to acquire the mineral interest in gas properties, to drill and equip exploratory wells that find proven reserves, and to drill and equip development wells are capitalized. Costs to drill exploratory wells that do not find proven reserves are expensed. Capitalized costs of gas producing properties are depleted by the unit-of-production method based on the estimated future production of the proved developed producing wells. Depletion expense related to the gas field is recorded as a component of operating expenses - fuel for generation. During fiscal year 2012, Power recorded $29.1 million of depletion expense. The estimated useful lives of the primary government’s capital assets are as follows:

Governmental Business-typeCategory Activities Activities

Infrastructure 10 - 138 years --Buildings and facilities 20 - 40 years 10 - 75 yearsEquipment and vehicles 3 - 20 years 3 - 20 yearsWastewater collection system -- 80 yearsLandplane ports -- 10 - 35 yearsPower distribution, hydraulic and steam production, transmission plants -- 4 - 75 yearsTreatment and pumping plants -- 5 - 50 yearsWharves and sheds -- 10 - 15 yearsIntangible assets 5 - 22 years --

Useful Life

The City’s collection of artwork, certain scientific equipment, and zoo animals are not capitalized or depreciated. These capital assets are maintained for public exhibition, education or research, and are being preserved for future generations. The proceeds from sales of any pieces of the collection are used to purchase other items for collection.

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The City’s infrastructure assets and the reporting methods the City has elected are as follows:

Infrastructure Reporting Method

Bridges ModifiedStormwater system DepreciationStreets DepreciationTraffic signals DepreciationAutomated traffic signal and control DepreciationBikepaths DepreciationFiber optic telecommunication system DepreciationStreet lighting system DepreciationStreet pavement markings DepreciationTraffic signs Depreciation

The modified approach is used in reporting the City’s bridges infrastructure system. A comprehensive bridge database system, the Bridges and Tunnel System, enables the City to track the entire bridge inventory, the structural condition of various bridge elements, and bridge Sufficiency Ratings. Condition assessments of these structures are completed in a three-year cycle. The latest assessment report was as of July 1, 2010. A system of letter grades identifies the condition of each structure. Letter grades “A” through “D” represent the condition of the structure as Very Good, Good to Fair, Fair to Poor, and Very Poor. “F” rating symbolizes a failed condition where replacement of the structure is necessary. These letter grades are based on sufficiency ratings, or the overall condition of the structure based on the last inspection. It is the City’s policy that at least 70% of the bridges are rated “B” or better and that no bridge shall be rated less than “D”. It is also the intent of the City that at least 80% of bridges be rated “B” or better by 2017.

The City performs regular inspection and maintenance of the various structural elements for any defects. Funds for annual estimated inspection, maintenance and repair costs are provided in the City’s budget. Bridges infrastructure system is excluded in the determination of depreciation provisions for capital assets, while preservation and maintenance costs are charged to expense. Additional information for the condition ratings of City bridges, sufficiency ratings, estimated and actual maintenance, and preservation costs are found in the Required Supplementary Information on page 198.

The Pension Trust Funds capital assets consist primarily of office furniture and equipment pertaining to the City Employees’ Retirement System (LACERS). Capital assets acquisitions of at least $5,000 are capitalized and depreciated over five years.

Compensated Absences

Vacation Pay

Eligible employees accumulate vacation leave up to a maximum of 400 hours depending on the length of service. Sworn employees of the Police and Fire Departments accumulate from 256 hours to 400 hours. All employees are paid their accumulated leave upon termination or retirement.

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All vacation pay is accrued when incurred in the government-wide, proprietary, and fiduciary fund financial statements. For the Governmental Funds, earned vacation is recorded as expenditures to the extent that they are normally expected to be liquidated with expendable available resources and are due and payable at year-end. Also, for governmental activities, earned vacation is generally liquidated by the General Fund.

Sick Pay

City employees (except those of the DWP) are entitled to 96 hours of sick leave at full pay and 40 hours at 75% of full pay for each calendar year of employment. Sworn employees are entitled also to 40 hours at 50% of full pay. Employees may accumulate sick leave up to 800 hours at full pay and 800 hours at 75% of full pay. The City pays 50% of the excess over the maximum accumulated 800 hours at full pay in the subsequent calendar year. Upon retirement, the City pays 50% of the accumulated sick time at full pay. There is no provision for the payment of the accumulated sick time at 75% of full pay. Firefighters under Memorandums of Understanding (MOU) 22 and 23 may accumulate 1,088 hours at full pay. In fiscal year 2012, excess sick leave hour payments for MOUs representing police officers and certain civilian employees were converted to banked time to be used similar to vacation, or to be cashed out at the time of retirement. Accrued and accumulated sick leave at 50% of full pay was frozen for any credits or withdrawals. However, the City will pay 25% of the balance upon retirement.

DWP employees accumulate 40 hours of sick leave per year to a maximum of 80 hours. Any

excess over the maximum is paid to the employee at 100% of their current salary rate. The employee goes on disability after taking 2 consecutive days of sick leave.

Governmental activities accrue the estimated value of sick leave (vested and probable of being vested), which may be used in subsequent years, or paid upon retirement up to a set maximum accumulated balance. The Proprietary and Pension Trust Funds accrue sick leave in the fiscal year earned. For the Governmental Funds, earned sick leave is recorded as expenditures to the extent that they are normally expected to be liquidated with expendable available resources and are due and payable at year-end. Also, for governmental activities, accrued sick leave is generally liquidated by the General Fund.

Accumulated Compensated Time-Off

The MOU with the unions representing police officers at the rank of Lieutenant and below, and certain civilian employees, provide that these employees will accrue compensated time-off for accumulated overtime to certain limits. Whenever an employee resigns, retires or is discharged from the Police Department, the employee shall be paid in cash for all compensated time-off due. In case of death, payment will be made to the estate. Accrued compensated time-off is reported in the government-wide financial statements. For the Governmental Funds, expenditures are recognized to the extent that they are normally expected to be liquidated with expendable available resources and are due and payable at year-end. Also, for governmental activities, accrued compensated time-off is generally liquidated by the General Fund.

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Risk Management

The City is self-administered and self-funded for workers’ compensation, most property damage and the majority of tort liability exposures. Commercial insurance is used where it is legally required, contractually required, or judged to be the most effective way to finance risk. Indemnity and insurance protection is also required from all City contractors, vendors, lessees and permit holders. Claims and judgments are recorded when it is probable that an asset has been impaired or a liability has been incurred and the amount of loss can be reasonably estimated. The recorded estimated liability for claims and judgments includes a provision for Incurred But Not Reported (IBNR) liabilities for workers’ compensation, tort cases and liabilities for allocated expenses. For the Governmental Funds, only the portion of the liability is recognized to the extent that they are normally expected to be liquidated with expendable available resources and are due and payable at year-end. Also, for governmental activities, liability for claims and judgments is generally liquidated by the General Fund. Deferred Revenue Deferred revenue in the governmental funds arises when potential revenue does not meet both the “measurable” and “available” criteria for recognition. Deferred revenue also arises when the City receives resources before it has a legal claim to them. In subsequent periods, when both the revenue criteria are met, or when the City has a legal claim to the resources, the deferred revenue is removed from the balance sheet/statement of net assets and revenue is recognized. Long-term Obligations In the government-wide financial statements, and proprietary fund types in the fund financial statements, long-term debt and other long-term obligations are reported as liabilities in the applicable governmental activities, business-type activities, or proprietary fund type statement of net assets. Bond premiums, discounts and deferred losses on refundings as well as issuance costs are deferred and amortized over the life of the bonds. Bonds payable are reported net of the applicable bond premium or discount and deferred losses on refundings. Bond issuance costs are reported as deferred charges and amortized over the term of the related debt. In the fund financial statements, governmental fund types recognize bond premiums and discounts, as well as bond issuance costs, during the current period. The face amount of the debt issued is reported as other financing sources. Premiums received on debt issuances are reported as other financing sources while discounts on debt issuances are reported as other financing uses. Issuance costs, whether or not withheld from the actual debt proceeds received, are reported as debt service expenditures. Property Taxes Secured property taxes are levied on or before the first business day of September of each year. They become a lien on real property on January 1 preceding the fiscal year for which taxes are levied. These tax payments can be made in two equal installments; the first is due November 1 and delinquent with penalties after December 10; the second is due February 1 and delinquent with penalties after April 10.

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NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) Secured property taxes that are delinquent and unpaid as of June 30 are declared to be tax defaulted and are subject to redemption penalties, costs, and interest when paid. If the delinquent taxes are not paid at the end of five (5) years, the property can be sold at public auction. The proceeds are used to pay the delinquent amounts due, and any excess is remitted, if claimed, to the taxpayer. Additional tax liens are created when there is a change in ownership of property or upon completion of new construction. Tax bills for these new tax liens are issued throughout the fiscal year and contain various payments and delinquent dates but are generally due within one year. Unsecured personal property taxes are not a lien against real property. These taxes are due on January 1 and become delinquent, if unpaid, on August 31. The County of Los Angeles assesses, bills, and collects property taxes for all jurisdictions within its borders and remits the applicable portion less an administrative fee to the City throughout the year. Payments are normally remitted on the 20th

day of the month.

Interfund Transactions Interfund transactions are reflected as loans, services provided, reimbursements, or transfers. Loans are reported as receivables and payables as appropriate and are subject to elimination upon consolidation. Services provided are treated as revenues and expenditures/expenses. Reimbursements are when one fund incurs a cost, charges the appropriate benefiting fund and reduces its related cost as a reimbursement. All other interfund transactions are treated as transfers. Transfers between governmental or proprietary funds are netted as part of the reconciliation to the government-wide columnar presentation. Fund Equity In the fund financial statements, governmental funds report fund balances based on the extent to which the City is bound to observe constraints on the use of the governmental funds’ resources. Fund balances are classified as follows: • Nonspendable - includes amounts that are either 1) not in spendable form, or 2) legally or

contractually required to be maintained intact. Inventories, prepaid items and certain advances to other funds are classified as nonspendable fund balances.

• Restricted - includes amounts which are constrained for specific purposes that are 1)

externally imposed by creditors, grantors, contributors, or laws or regulations of other governments, or 2) imposed by law through enabling legislation.

• Committed - includes amounts that can be used for specific purposes with constraints

imposed by formal action of the highest level of decision-making authority. The authorization specifying the purposes for which committed funds can be used should have the consent of both the legislative and executive branches of government. The City operates under a Mayor-Council form of government. As Executive Officer, the Mayor supervises the administrative process of the City and works with the City Council. The City Council enacts ordinances and resolutions that may impose, modify or rescind fund balance commitments. City Council action is subject to the approval or veto of the Mayor, and the City Council may override a Mayoral veto by two-thirds vote. The City does not have any committed fund balances.

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• Assigned - includes amounts that are intended to be used for specific purposes, but are neither restricted nor committed. The authority for assignment of funds is not required to be the government’s highest level of decision making authority. Furthermore, the constraints imposed on the use of assigned amounts are more easily removed or modified than those imposed on committed fund balances. The City Council may authorize executive officers to assign fund balances for specific purposes through Council files, ordinances and resolutions.

• Unassigned - includes amounts that are not assigned to other funds and do not meet the

criteria for being classified as restricted, committed, or assigned. Fund balances that can be utilized for economic stabilization, emergencies and contingencies that do not qualify as restricted or committed are reported as unassigned.

The City established a Budget Stabilization Fund to set aside savings during periods of robust economic growth which can then be drawn upon to stabilize revenues during economic downturns.

Funds for urgent economic necessity based on a significant economic downturn after the budget is completed or an earthquake or other natural disaster were provided in an Emergency Reserve Account. To utilize funds from this account, a finding by the Mayor, with confirmation by the City Council will be required, as well as a determination that no other viable sources of funds are available.

In the event that there are unanticipated expenses or revenue shortfalls impacting programs approved in the current year budget, a Contingency Reserve Account was established to provide additional funding for those programs. Funds must be appropriated by a vote of at least a majority of the Council, with Mayoral concurrence, of by a super-majority of the Council in the event of a Mayoral veto. As of June 30, 2012, the City has $272.4 million in Emergency and Contingency Reserve accounts.

When both restricted and unrestricted resources are available for use, it is the City’s policy to use restricted resources first and then unrestricted resources as they are needed. Additionally, unless required by law or agreement, the City would use the restricted and assigned fund balances first, before using unassigned amounts of unrestricted fund balances. The Mayor and City Council adopted a Reserve Fund Policy per Council File 98-0459 that established a goal of increasing the Reserve Fund to 5 percent of the budgeted general receipts, with a minimum of 2.75 percent in the Emergency Account, and any additional funds allocated to the Contingency Reserve Account. In March 2011, voters approved Charter Amendment P, a measure that established the Reserve Fund’s Emergency and Contingency Reserve as Charter Accounts. The Reserve Fund is an account in which unrestricted cash is set aside outside the budget for unforeseen expenditures and emergencies. As of June 30, 2012, the Street Lighting Maintenance Assessment Fund has a negative fund balance of $2.7 million. Expenditures in excess of revenues were funded from liabilities incurred. In addition, the Workforce Investment Act Trust Fund has a negative fund balance of $1.2 million; receivables of $4.3 million will pay for eligible government expenditures that have been incurred.

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NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) Net Assets The government-wide financial statements utilize net assets presentation. Net assets are categorized as follows: • Invested in capital assets, net of related debt - This category groups all capital assets into

one component of net assets. Accumulated depreciation and the outstanding balances of debt that are attributable to the acquisition, construction, or improvement of these assets reduce the balance in this category.

• Restricted net assets –This category consists of net assets with constraints placed on their

use, either externally or internally. Constraints include those imposed by creditors (such as through bond covenants), grants or laws and regulations of other governments, or by law through constitutional provisions or enabling legislation.

• Unrestricted net assets – This category represents net assets of the City that are not

restricted for any project or other purposes. Use of Estimates The preparation of the financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts in the financial statements and accompanying notes. Actual results could differ from the estimates. Restatements On December 29, 2011, the California Supreme Court upheld the Dissolution Act that provides for the dissolution of all redevelopment agencies as of February 1, 2012. On January 11, 2012, the City Council adopted a resolution wherein it formally elected not to serve as the successor agency. Subsequently, on January 25, 2012, the City Council adopted a resolution to assume only the housing functions and activities of the CRA (Former Agency). As of June 30, 2012, the City has yet to assume the housing assets and functions of the Former Agency. The transition of the housing assets and functions is currently on hold pending the completion of the meet and confer process between the State Department of Finance and the City’s Housing Department (LAHD). At the time of the release of this report, the number of housing assets and residual receipts to be transferred to LAHD is unknown. As a result of the CRA dissolution, the CRA is no longer considered a component unit of the City. Due to this change in reporting entity, the City restated the beginning balances as if CRA was not in the reporting entity in fiscal year 2011. Consequently, CRA’s total assets, liabilities, and net assets as of June 30, 2011, of $916,118 (in thousands), $853,995 (in thousands), and $62,123 (in thousands), respectively, have been eliminated from the City’s financial statements. See Note 5F on pages 190 and 191 for related discussion on this matter.

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NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) Reclassifications Certain reclassifications have been made to amounts reported in the separately audited financial statements of certain Enterprise Funds, Pension Trust Funds, Other Postemployment Benefits Trust Funds, and other component units to conform to the City reporting entity's report format and to account for transactions between the City's reporting entity and such entities in accordance with GAAP. Adoption of New GASB Pronouncements The primary government adopted the following: GASB Statement No. 64, “Derivative Instruments: Application of Hedge Accounting Termination Provisions - an amendment of GASB Statement No.53.”

Issued in June 2011, this statement aims to clarify whether an effective hedging relationship continues after the replacement of a swap counterparty or a swap counterparty’s credit support provider. The statement sets forth criteria that establish when the effective hedging relationship continues and hedge accounting should continue to be applied. This statement is effective for the City beginning fiscal year 2012. This statement has no material impact on the City’s financial statements.

Recent GASB Pronouncements GASB Statement No. 60, “Accounting and Financial Reporting for Service Concession Arrangements.”

Issued in November 2010, this statement addresses financial reporting issues related to service concession arrangements (SCAs). SCA is an arrangement between a transferor (a government) and an operator (governmental or nongovernmental entity) in which (1) the transferor conveys to an operator the right and related obligation to provide services through the use of infrastructure or another public asset (a “facility”) in exchange for significant consideration and (2) the operator collects and is compensated by fees from third parties. This statement is effective for the City beginning fiscal year 2013.

GASB Statement No. 61, “The Financial Reporting Entity: Omnibus - an amendment of GASB Statements No. 14 and No.34.”

Issued in November 2010, this statement modifies certain requirements for inclusion of component units in the financial reporting entity. It also amends the criteria for reporting component units as if they were part of the primary government in certain circumstances. It also clarifies the reporting of equity interest in legally separate organizations. This statement is effective for the City beginning fiscal year 2013.

GASB Statement No. 62, “Codification of Accounting and Financial Reporting Guidance Contained in Pre-November 30, 1989 FASB and AICPA Pronouncements.”

Issued in December 2010, this statement aims to improve financial reporting by contributing to the GASB’s efforts to codify all generally accepted accounting principles for state and local governments so that they may derive from a single source. This statement is effective for the City beginning fiscal year 2013.

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NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) GASB Statement No. 63, “Financial Reporting of Deferred Outflows of Resources, Deferred Inflows of Resources, and Net Position.”

Issued in June 2011, this statement provides guidance for reporting deferred outflows of resources, deferred inflows of resources, and their effects on a government’s net position. It alleviates uncertainty about reporting those financial statement elements by providing guidance where none previously existed. This statement is effective for the City beginning fiscal year 2013.

GASB Statement No. 65, “Items Previously Reported as Assets and Liabilities.”

Issued in March 2012, the statement establishes accounting and financial reporting standards that reclassify, as deferred outflows of resources or deferred inflows of resources, certain items that were previously reported as assets and liabilities and recognizes, as outflows of resources or inflows of resources, certain items that were previously reported as assets and liabilities. It will improve financial reporting by clarifying the appropriate use of the financial statement elements deferred outflows of resources and deferred inflows of resources to ensure consistency in financial reporting. This statement is effective for the City beginning fiscal year 2014.

GASB Statement No. 66, “Technical Corrections – 2012 - an amendment of GASB Statements No. 10 and No. 62.” Issued in March 2012, this statement improves accounting and financial reporting for a governmental financial reporting entity by resolving conflicting guidance that resulted from the issuance of two pronouncements, Statements No. 54, Fund Balance Reporting and Governmental Fund Type Definitions, and No. 62,

Codification of Accounting and Financial Reporting Guidance Contained in Pre-November 30, 1989 FASB and AICPA Pronouncements. This statement is effective for the City beginning fiscal year 2014.

GASB Statement No. 67, “Financial Reporting for Pension Plans – an amendment of GASB Statement No. 25.”

Issued in June 2012, this statement replaces previously issued statements related to pension plans administered through trusts or similar arrangement that meet certain criteria. It builds upon the existing framework for financial reports of defined benefit pension plans, which includes a statement of fiduciary net position and a statement of changes in fiduciary net position. It also enhances note disclosures and required supplementary information (RSI), including the presentation of new information about annual money-weighted rates of return in the notes to the financial statements and in 10-year RSI schedules. This statement is effective for the City’s pension plans effective fiscal year 2014.

GASB Statement No. 68, “Accounting and Financial Reporting for Pensions - an amendment of GASB Statement No. 27.”

Issued in June 2012, this statement replaces previously issued statements related to governments that provide pensions through pensions plans administered as trusts or similar arrangements that meet certain criteria. It requires governments providing defined benefit pensions to report a net pension liability, the difference between the total pension liability and the assets set aside in a trust; to recognize their long-term obligation for pension benefits as a liability for the first time; and to more comprehensively and comparably measure the annual costs of pension benefits. It also enhances accountability and transparency through revised and new note disclosures and RSI, including types of benefits provided, how contributions to the pension plan are determined, and assumptions and methods used to calculate the pension liability. This statement is effective for the City beginning fiscal year 2015.

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NOTE 2 – RECONCILIATION OF GOVERNMENT-WIDE AND FUND FINANCIAL STATEMENTS A. Explanation of Certain Difference Between the Governmental Funds Balance Sheet and

the Government-wide Statement of Net Assets The governmental funds balance sheet includes reconciliation between total fund balancesgovernmental funds and net assets of governmental activities as reported in the government-wide statement of net assets. One element of that reconciliation explains that long-term liabilities, including bonds payable, are not due and payable in the current period and therefore are not reported in the funds. The details of this $6,988,668 difference are as follows (in thousands):

Bonds, Certificates of Participation, and Notes 3,751,557$ Add: Issuance Premium (to be amortized

as interest income) 172,202 Less: Deferred Charge on Refunding (to be

amortized as interest expense) (50,657) Less: Deferred Charge for Cost of Issuance (to

be amortized over the life of the debt) (20,635) HUD Loans 204,395 Accrued Interest Payable 56,107 Accrued Compensated Absences 537,990 Estimated Claims and Judgments Payable 2,102,535 Accrued Landfill Liability 45,906 Estimated Pollution Remediation Liability 6,768 Net Pension Liability 55,476 Net OPEB Liability 127,024

Net adjustments to reduce governmental fundbalance to arrive at governmental activitiesnet assets 6,988,668$

B. Explanation of Certain Differences Between the Governmental Funds Statement of

Revenues, Expenditures, and Changes in Fund Balances and the Government-wide Statement of Activities

The governmental funds statement of revenues, expenditures, and changes in fund balances includes reconciliation between net change in fund balances-total governmental funds and change in net assets of governmental activities as reported in the government-wide statement of activities. One element of that reconciliation explains that governmental funds report capital outlays as expenditures. However in the statement of activities, the cost of those assets is allocated over their estimated useful lives and reported as depreciation expense. The details of this $105,328 difference are as follows (in thousands):

Capital Outlay 390,465$ Less: Depreciation expense (285,137) Net adjustments to increase net change in fund

balances of governmental funds to arrive at change in net assets of governmental activities 105,328$

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NOTE 2 – RECONCILIATION OF GOVERNMENT-WIDE AND FUND FINANCIAL STATEMENTS (Continued)

Another element of that reconciliation states that the issuance of long-term debt provides current financial resources to the governmental funds while the repayment of the principal of long-term debt consumes the current financial resources of governmental funds. Neither transaction, however, has any effect on net assets. Also governmental funds report the effect of issuance costs, premiums, discounts, and similar items when debt is first issued, whereas, these amounts are deferred and amortized in the statement of activities. The details of this $5,410 difference are as follows (in thousands):

Debt issued or incurred:General Obligation Bonds 602,510$

Add: Issuance Premium 101,256 Less: Unamortized Deferred Charge on Refunding (30,767)

Deferred Charge for Cost of Issuance (2,890) Certificates of Participation, Revenue Bonds, and Notes 311,260

Add: Issuance Premium 24,301 Less: Deferred Charge for Cost of Issuance (1,514)

Unamortized Deferred Charge on Refunding (1,144) HUD Loans 52,521

Principal repayments and bond refunding:General and Judgment Obligation Bonds (648,910) Certificates of Participation, Revenue Bonds, and Notes (406,126) HUD Loans (5,907)

Net adjustments to decrease net change in fund balances of governmental funds to arrive at change in net assets of governmental activities (5,410)$

Another element of that reconciliation states that some expenses reported in the statement of activities do not require the use of current financial resources and therefore are not reported as expenditures in governmental funds. The details of this $66,676 difference are as follows (in thousands):

Decrease in Accrued Interest (4,427)$ Increase in Accrued Compensated Absences 15,790 Increase in Estimated Claims and Judgments 18,403 Decrease in Accrued Landfill Liability (253) Decrease in Pollution Remediation Liability (308) Decrease in Net Pension Liability (3,345) Increase in Net OPEB Liability 27,672 Amortization of Deferred Charge on Refunding 4,887 Amortization of Deferred Charge for Cost of Issuance 8,257 Net adjustments to increase net change in fund balances of governmental funds to arrive at change in net assets of governmental activities 66,676$

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NOTE 3 – STEWARDSHIP, COMPLIANCE, AND ACCOUNTABILITY

A. Budgets and Budgetary Basis of Accounting Under the City Charter, the Mayor is required each year to submit to the Council a Proposed Budget by April 20 for the forthcoming fiscal year commencing July 1. The Proposed Budget is based on the Mayor's budget priorities, the responses of the City Administrative Officer and City Departments to the Mayor's budget policy letter, which is distributed early in the fiscal year, and estimates of receipts from the City's various revenue sources. The Council's Budget and Finance Committee reviews the Mayor's Proposed Budget and reports its recommendations to the full Council. The Council must legally adopt the Mayor's Proposed Budget, as modified by the Council, by June 1. The Mayor has five working days after adoption to approve or veto any items modified by the Council. The Council then has five working days to override by a two-thirds vote any items changed by the Mayor. The City Council adopts an annual operating budget for 34 City departments, bureaus, commissions and offices. The annual budget is essentially prepared on a departmental basis, with budgeted receipts and appropriations provided for the General Fund and certain Special Revenue, Debt Service, and Capital Projects Funds. Budgets are generally limited to funds, which in addition to the General Fund finance the operations of the City departments. Furthermore, the budgeted receipts and appropriations for the Allocations from Other Governmental Agencies Special Revenue Fund (which includes ARRA Workforce Investment, ARRA COPS Hiring Recovery Program, ARRA Neighborhood Stabilization, Bus Bench Advertising, Business Improvement District Trust, City Attorney Consumer Protection, City Planning Systems Development, Coastal Transportation Corridor Trust, Council District 15 Real Property Trust, Federal Emergency Shelter Grant, Fire Hydrant Installation and Main Replacement, General Services Trust, Integrated Solid Waste Management, Los Angeles Regional Agency Trust, Lopez Canyon Amenities, Neighborhood Stabilization, Off-Site Sign Periodic Inspection, Overnight Parking Program, Pershing Square Trust, Planning Long-Range Plan, Proposition 1B Infrastructure, Repair and Demolition, Section 108 Loan Guarantee, State AB1290, Used Oil Collection, Ventura/Cahuenga Boulevard Corridor Specific Plan, Warner Center Transportation Trust, and West LA Transportation Improvement and Mitigation Special Revenue Funds) is not all-inclusive because the budget provides for only the portion of fund receipts that are expended to finance City department operations. The City does not budget for the financial activities of all its Governmental Funds. The following Governmental Funds are not included in the City's legally adopted annual operating budget:

Reserve and certain other account components General Fund

Major Funds: Special Revenue

Municipal Improvement Corporation Recreation and Parks Nonmajor Funds: Economic Development Section 108 Loan Program Grant Seismic Bond Reimbursement Transportation Grant Certain Other Nonmajor Grant Funds Certain Other Nonmajor Special Revenue Funds

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NOTE 3 – STEWARDSHIP, COMPLIANCE, AND ACCOUNTABILITY (Continued)

Major Fund: Debt Service

Municipal Improvement Corporation Nonmajor Funds: General Obligation Bonds Series 2011-A General Obligation Bonds Refunding Series 2011-B General Obligation Bonds Refunding Series 2012-A Certain Convention Center Accounts Solid Waste Resources Certain Other Debt Service Funds Nonmajor Funds:

Capital Projects

General Obligation Bonds Series 2003-A General Obligation Bonds Series 2004-A General Obligation Bonds Series 2005-A General Obligation Bonds Series 2006-A General Obligation Bonds Series 2008-A General Obligation Bonds Series 2009-A General Obligation Bonds Series 2011-A Recreation and Parks Grant Parks Assessment Certain other Capital Project Funds

For the majority of the funds listed above, expenditure authority is approved by Council action during the fiscal year. The City's original adopted budget is subject to revision to reflect the changes in revenue projections and to make necessary adjustments to appropriations. Transfers of appropriations are approved by the Mayor subject to the following limitations and conditions. Funds appropriated in the general City budget or thereafter by the Council may be transferred to the Reserve Fund or Unappropriated Balance of the General Fund, or appropriated for the same or other purposes amending the budget and other spending authority, upon approval of the Mayor provided the amounts do not exceed $50,000 and required notices are made by the City Clerk to the President of the Council, Controller and City Administrative Officer. Intra-Department transfers from one appropriated item to another may be approved by the Mayor provided the amount does not exceed the greater of $35,000 or 1% of the budget for the account receiving the transfer but not exceeding $100,000. The $35,000 limit is subject to adjustment based on the consumer price index. For fiscal year ended June 30, 2012, the adjusted amount was $47,150. Transfers that exceed the amount limits require the approval of the City Council. During the fiscal year, capital related appropriations of $48.1 million that were reappropriated from prior budget years were included in the current annual operating budget. Transfers from the Reserve Fund (a nonbudgeted General Fund component), unanticipated receipts, and available fund balances that carried forward from the prior budget year financed these additional appropriations. In addition, non-capital related appropriations of $941.4 million were automatically carried forward from the prior budget year.

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NOTE 3 – STEWARDSHIP, COMPLIANCE, AND ACCOUNTABILITY (Continued) Unused and unencumbered appropriations lapse at year-end except for non-capital related continuing appropriations for certain Special Revenue and Capital Projects Funds that are carried forward to the next budget year. Capital related appropriations that are unused and unencumbered at year-end are re-appropriated in the subsequent budget year. The legal level of budgetary control (the level at which expenditures may not legally exceed appropriations) is as follows: The General Fund is by line item within each object by department, except for capital improvement program expenditures which are controlled by projects. Object levels of expenditures are salaries, expense, equipment, special, capital outlay, and transfers. For the Special Revenue Funds, Debt Service Funds and Capital Projects Funds, the line items consist of departments, projects, debt service, equipment and programs. Because of the large volume of detail, the budget and actual schedules on a budgetary basis have been aggregated by fund, function and object level. A separate budget and actual report by line item has been prepared. The budgetary documents are available to the general public in the Office of the City Controller. The City's annual budget is prepared on a modified cash basis of accounting, which is different from GAAP. Revenues are recognized when cash is received, and expenditures include both cash disbursements and current year encumbered appropriations that had not been paid at the end of the budget year. Where no appropriation is adopted, payments of interfund borrowings (or payment of loans to other funds) though recorded as a component of other financing uses, are not treated as budgetary transactions and are excluded in the separate budget and actual report. Encumbrance accounting, under which purchase orders, contracts and other commitments for the expenditure of monies are recorded in order to reserve that portion of the applicable appropriation, is used in the Governmental Funds, except for certain Special Revenue and Capital Projects Funds whose assets are managed by a third party trustee. Encumbrance outstanding at year-end for specific purposes for which resources already have been restricted, committed, or assigned will be included within those classifications. Encumbrance outstanding for which resources have not been previously restricted, committed, or assigned will be included within committed or assigned fund balance based on the source of the constraint. These commitments will be honored in subsequent year carryforward appropriations. B. Reconciliation of Operations on Budgetary Basis to the GAAP Basis The actual results of operations on a budgetary basis compared to the appropriations adopted by the City Council for budgeted major governmental funds are included in the fund financial statements. The comparisons of actual results with the budget for non-major funds are presented as supplemental information in the combining schedules. Because accounting principles applied for purposes of developing data on a budgetary basis differ from those used to present financial information in accordance with GAAP, a reconciliation of the resultant basis and perspective differences on operations for the year ended June 30, 2012 is presented in the following pages for the City’s budgeted major funds. The dollar amounts are expressed in thousands.

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Community General Development

Fund FundExcess (Deficiency) of Revenues and Other Financing Sources Over Expenditures and Other Financing Uses - Budgetary Basis 40,371$ (4,723)$

Basis Differences

Adjustment for net changes to accrued assets and liabilities.The GAAP basis operating statement recognizes revenues assoon as they are both measurable and available, andexpenditures generally are recorded when liability is incurredand is due and payable; whereas, the budgetary basis operating statement reflects revenues when received and expenditures when paid. 33,377 (10,415)

Interfund borrowings are recorded in the debtor fund as an other financing source "Loans from Other Funds" and in thecreditor fund as an other financing use "Loans to Other Funds"(budgetary) as opposed to "Due to Other Funds" in the debtorfund and "Due from Other Funds" in the creditor fund (GAAP). (2,820) --

Encumbrances, which represent commitments to acquiregoods and services, are recorded as the equivalent of expenditures in the budget year incurred (budgetary), butnot considered as expenditures in the GAAP basis operatingstatements (GAAP). Encumbrances reported as budgetary expenditures 248,477 10,706 Prior year encumbrances expended in current year (233,688) (9,253)

Grant funded loans are recorded as expenditures when disbursed and as program income when repaid (budgetary),as opposed to adjustments to the Loans Receivable accountbalance (GAAP). -- (2,621)

For purposes of the budget, the General Fund is a legal entity that is separate and distinct from the Reserve Fund and otheraccounts that are classified to have General Fund activity forGAAP purposes. (37,321) --

Perspective Difference Unbudgeted accounts -- 899

Net Change in Fund Balances - GAAP Basis 48,396$ (15,407)$

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Proposition A SolidLocal Transit WasteAssistance Resources

Fund Fund

Excess of Revenues and Other Financing SourcesOver Expenditures and Other Financing Uses - Budgetary Basis 2,222$ 42,029$

Basis Differences

(3,286) 426

Encumbrances reported as budgetary expenditures 367 20,768 Prior year encumbrances expended in current year (10,913) (8,380)

Perspective DifferenceUnbudgeted accounts -- (17,752)

Net Change in Fund Balances - GAAP Basis (11,610)$ 37,091$

expenditures when paid.

Adjustment for net changes to accrued assets and liabilities.The GAAP basis operating statement recognizes revenues assoon as they are both measurable and available, andexpenditures generally are recorded when liability is incurred

Encumbrances, which represent commitments to acquire

not considered as expenditures in the GAAP basis operating

and is due and payable; whereas, the budgetary basis operating statement reflects revenues when received and

goods and services, are recorded as the equivalent of expenditures in the budget year incurred (budgetary), but

statements (GAAP).

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NOTE 4 – DETAILED NOTES ON ALL FUNDS A. Cash, Deposits and Investments Summary of Cash and Investments At June 30, 2012, the summary of cash, pooled and other investments for governmental and business-type activities, and fiduciary funds is as follows (in thousands):

All City FundsBusiness-

Governmental type FiduciaryActivities Activities Funds Total

Cash and Pooled Investments 4,176,316$ 1,994,952$ 261,603$ 6,432,871$ Other Investments 92,331 61,764 36,654,944 36,809,039 Restricted Assets (Note 4C page 108) 3,474 3,828,015 -- 3,831,489 Total 4,272,121$ 5,884,731$ 36,916,547$ 47,073,399$

Other Cashand Investments

Pension TrustCash and and Other

Investments PostemploymentWith City Benefits

Treasurer Trust Other Total

Cash and Pooled Investments 6,295,293$ --$ 137,578$ 6,432,871$ Other Investments -- 36,654,669 154,370 36,809,039 Restricted Assets 1,877,224 -- 1,954,265 3,831,489

Total 8,172,517$ 36,654,669$ 2,246,213$ 47,073,399$

Summary of Deposits and Investments The carrying amount of cash on hand, deposits and investments at June 30, 2012, is as follows (in thousands):

Cash on Hand 377$ Deposits 260,733 Investments Pooled 7,988,318 Other 38,823,971

Total 47,073,399$

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NOTE 4 – DETAILED NOTES ON ALL FUNDS (Continued) Deposits At June 30, 2012, the book balance of the City's deposits was $260.7 million and the balance per various financial institutions was $253.4 million. The difference of $7.3 million represents primarily deposits in transit and other reconciling items. Of the bank balance, $4.3 million was covered by Federal depository insurance and $249.1 million was uninsured. The uninsured deposits of $249.1 million are held by financial institutions that are legally required by the California Government Code to collateralize the City’s deposits by pledging government securities or first trust deed mortgage notes. The market value of the pledged government securities and first trust deed mortgage notes must be at least 110% and 150% of the City's deposits, respectively. The collateral is held by the pledging financial institution's trust department and is considered held in the City's name. The City has a Daylight Overdraft Facility with a bank that maintains the City’s operating account, which may be used to facilitate Intra-Day transfers between City accounts. Any overdraft in the City’s account, including any charges, must be repaid immediately without demand, except when the City and the bank agrees otherwise or when the bank advised otherwise in writing. Pooled Investments The cash balances of substantially all funds on deposit in the City Treasury are pooled and invested by the City Treasurer for the purpose of maximizing interest earnings through pooled investment activities but safety and liquidity still take precedence over return. Interest earned on pooled investments is allocated to the participating funds based on each fund's average daily deposit balance during the allocation period with all remaining interest allocated to the General Fund. Investments in the City Treasury are stated at fair value based on quoted market prices except for money market investments that have remaining maturities of one year or less at time of purchase, which are reported at amortized cost. Pursuant to California Government Code Section 53607 and the Los Angeles City Council (City Council) File No. 94-2160, the City Treasury shall render to the City Council a statement of investment policy (the Policy) annually. City Council File No. 11-1740 was adopted on November 1, 2011 as the City’s investment policy. This Policy shall remain in effect until the City Council and the Mayor approve a subsequent revision. The Policy governs the City’s pooled investment practices. The Policy addresses soundness of financial institutions in which the Treasurer will deposit funds and types of investment instruments permitted by California Government Code Sections 53600-53635 and 16429.1. Examples of investments permitted by the Policy are obligations of the U.S. Treasury and government agencies, commercial paper notes, certificates of deposit (CD) placement service, bankers’ acceptances, medium term notes, mutual funds, money market mutual funds, and the State of California Local Agency Investment Fund.

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NOTE 4 – DETAILED NOTES ON ALL FUNDS (Continued) At June 30, 2012, the investments held in the City Treasury's General and Special Investment Pool Programs and their maturities are as follows (in thousands):

Investment Maturities

1 to 30 31 to 60 61 to 365 366 Days Over

Amount Days Days Days To 5 Years 5 Years

U.S. Treasury Notes 3,773,466$ 1,988$ --$ 62,617$ 3,689,504$ 19,357$

U.S. Treasury Bills 37,004 28,035 6,009 2,960 -- --

U.S. Sponsored Agency Issues 2,018,682 164,006 562,587 207,749 1,073,235 11,105

Medium Term Notes 1,318,929 14,500 -- 195,072 1,109,357 --

Commercial Paper 829,790 741,152 88,638 -- -- --

Certificates of Deposit 6,000 -- -- 6,000 -- --

Short Term Investment Funds 4,447 4,447 -- -- -- --

Total General and Special Pools 7,988,318$ 954,128$ 657,234$ 474,398$ 5,872,096$ 30,462$

Type of Investments

Interest Rate Risk. The Policy limits the maturity of its investments to five years for the U.S. Treasury and government agency securities, medium term notes, CD placement service, collateralized bank deposits, mortgage pass-through securities, and bank/time deposits; one year for repurchase agreements; 270 days for commercial paper; 180 days for bankers’ acceptances, and 92 days for reverse repurchase agreements. The Policy also allows City funds with longer-term investments horizons, to be invested in securities that at the time of the investment have a term remaining to maturity in excess of five years, but with a maximum final maturity of thirty years.

Credit Risk. The Policy establishes minimum credit ratings requirement for investments. There is no credit quality requirement for local agency bonds, U.S. Treasury Obligations, State of California Obligations, California Local Agency Obligations, and U.S. Sponsored Agencies (U.S. government sponsored enterprises) securities. The City’s $2.0 billion investments in U.S. government sponsored enterprises consist of securities issued by the Federal Home Loan Bank - $581.8 million, Federal National Mortgage Association - $602.4 million, Federal Home Loan Mortgage Corporation - $646.1 million, Federal Farm Credit Bank - $124.0 million, and Tennessee Valley Authority - $64.4 million. Of the City’s $2.0 billion investments in U.S. Sponsored Agencies securities, $1,253.9 million were rated “AA+” by S&P and “Aaa” by Moody’s; $764.8 million were not rated individually by S&P nor Moody’s (issuers of these securities are rated “A-1+” by S&P and “P-1” by Moody’s). Medium term notes must be issued by corporations organized and operating within the United States or by depository institutions licensed by the United States or any state and operating within the United States. Medium term notes must have at least an “A” rating. The City’s $1.3 billion investments in medium term notes consist of securities issued by banks and corporations that comply with these requirements and were rated “A” or better by S&P and “A3” or better by Moody’s. Subsequent to purchase, two issuers of $27.5 million medium term notes were downgraded to “BBB+” by S&P. Commercial paper issues must have a minimum of “A-1” or equivalent rating. If the issuer has issued long-term debt, it must be rated “A” without regard to modifiers. Issuing corporation must be organized and operating within the United States and have assets in excess of $500.0 million. Of the City’s $829.8 million investments in commercial paper, $709.8 million were rated A-1+/A-1 by S&P and P-1 by Moody’s; $120.0 million were not rated individually by S&P nor Moody’s. The issuers of the certificates of deposit were not rated.

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NOTE 4 – DETAILED NOTES ON ALL FUNDS (Continued) Concentration of Credit Risk. The Policy does not allow more than 40% of its investment portfolio be invested in commercial paper and bankers’ acceptances, 30% in certificates of deposit and medium term notes, 20% in mutual funds, money market mutual funds and mortgage pass-through securities. The Policy further provides for a maximum concentration limit of 10% in any one issuer of commercial paper as well as in any one mutual fund, and 30% in bankers’ acceptances of any one commercial bank. There is no percentage limitation on the amount that can be invested in the U.S. government agencies. The City’s pooled investments comply with these requirements. GAAP requires disclosure of certain investments in any one issuer that represent 5% or more of total investments. Of the City’s total pooled investments as of June 30, 2012, $581.8 million (7%) was invested in securities issued by the Federal Home Loan Bank, $646.1 million (8%) was invested in securities issued by Federal Home Loan Mortgage Corporation, and $602.4 million (8%) was invested in securities issued by Federal National Mortgage Association. General Investment Pool Securities Lending Program. Securities lending is permitted and limited under provisions of California Government Code Section 53601. The City Council approved the Securities Lending Program (the SLP) on October 22, 1991 under Council File No. 91-1860, which complies with the California Government Code. The objectives of the SLP in priority order are: safety of loaned securities; and prudent investment of cash collateral to enhance revenue from the investment program. The SLP is governed by a separate policy and guidelines. The City’s custodial bank acts as the securities lending agent. In the event a counterparty defaults by reason of an act of insolvency, the bank shall take all actions which it deems necessary or appropriate to liquidate permitted investment and collateral in connection with such transaction and shall make a reasonable effort for two business days (Replacement Period) to apply the proceeds thereof to the purchase of securities identical to the loaned securities not returned. If during the Replacement Period the collateral liquidation proceeds are insufficient to replace any of the loaned securities not returned, the bank shall, subject to payment by the City of the amount of any losses on any permitted investments, pay such additional amounts as necessary to make such replacement. Under the provisions of the SLP, and in accordance with the California Government Code, no more than 20% of the market value of the General Investment Pool (the Pool) is available for lending. The City receives cash as collateral on loaned securities, which is reinvested in securities permitted under the Policy. In accordance with the California Government Code, the securities lending agent marks to market the value of both the collateral and the reinvestments daily. Except for open loans where either party can terminate a lending contract on demand, term loans have a maximum life of 92 days. Earnings from securities lending accrue to the Pool and are allocated on a pro-rata basis to all Pool participants. During the fiscal year 2012, collateralizations on all loaned securities were compliant with the required 102% of the market value. The City can sell collateral securities only in the event of borrower default. The lending agent provides indemnification for borrower default. There were no violations of legal or contractual provisions and no borrower or lending agent default losses during the fiscal year. There was no credit risk exposure to the City because the amounts owed to the borrowers exceeded the amounts borrowed. Loaned securities are held by the City’s agents in the City’s name and are not subject to custodial credit risk. On May 31, 2012, the City temporarily suspended its SLP due to ongoing Request for Proposals (RFP) for securities lending agent. The City will resume its SLP upon execution of a contract with a selected agent.

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NOTE 4 – DETAILED NOTES ON ALL FUNDS (Continued) Other Investments Other deposits and investments maintained outside the City Treasury are invested pursuant to policies adopted by the boards of commissioners of the City’s pension systems and Water and Power, governing bond covenants or California Government Code provisions. Investments made under these provisions are reported as follows. Investments are stated at fair value. Pensions and other postemployment benefits investments are reported in accordance with GASB Statement Nos. 25 and 43, respectively. Real estate investments are recorded in the financial statements under the equity method, and are carried at fair value. Investments denominated in foreign currencies are translated to the U.S. dollar at the rate of exchange in effect at the statement of net assets date, with resulting gains and losses recorded in the statement of changes in fiduciary net assets. The stated fair value of securities investments are generally based on published market prices or quotations from major investment dealers. Real estate values are taken from recent appraisals, purchase prices and reports of investment advisors. The fair values of venture capital and alternative investments are estimated based on audited financial statements provided by the individual fund managers. The City’s other investments as of June 30, 2012 are as follows (in thousands):

Department of Water and Power 672,199$ Fire and Police Pension and Health Subsidy Plans 15,773,361 Los Angeles City Employees' Retirement and

Postemployment Healthcare Plans 11,624,008 Water and Power Employees' Retirement,

Disability, and Death Benefit Insurance; andRetiree Health Benefits Plans 9,257,300

Others 1,497,103

Total 38,823,971$

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NOTE 4 – DETAILED NOTES ON ALL FUNDS (Continued)

Department of Water and Power

The City Charter grants the Board of Water and Power Commissioners control over the investments of all financial assets of the Department of Water and Power (DWP). The $672.2 million investments not included in the City’s investment pool program are as follows (in thousands):

Power Water Total

Debt Reduction Trust Funds 490,444$ --$ 490,444$ Nuclear Decommissioning Trust Fund 123,627 -- 123,627 Natural Gas Trust Fund 268 -- 268 Hazardous Waste Treatment Trust Fund 2,177 -- 2,177 SCPPA Palo Verde Investment 22,605 -- 22,605 Water Expense Stabilization Fund -- 33,078 33,078

Total 639,121$ 33,078$ 672,199$

At June 30, 2012, the investments of the Power and Water Enterprise Funds outside of the City’s investment pool programs and their maturities are as follows (in thousands):

Investment Maturities1 to 30 31 to 60 61 to 365 366 Days Over

Type of Investments Amount Days Days Days To 5 Years 5 Years

U.S. Agencies 372,784$ -$ -$ 8,390$ 300,445$ 63,949$ Medium-term Corporate Notes 117,770 388 1,004 39,335 77,043 - Commercial Paper 46,223 6,999 1,000 38,224 - - Certificates of Deposit 40,026 12,001 - 28,025 - - Municipal Bonds 2,002 - 1,000 1,002 - - California Local Agency Bonds 42,614 5,000 - 16,287 21,327 - California State Bonds 9,790 - - - 9,790 - Bankers’ Acceptances 505 - - 505 - - Money Market Funds 17,880 17,880 - - - - SCPPA Palo Verde Investment 22,605 - - - 22,605 -

Total 672,199$ 42,268$ 3,004$ 131,768$ 431,210$ 63,949$

Interest Rate Risk. DWP’s investment policy limits the maturity of its investments to a maximum of 30 years for U.S. government agency securities; 5 years for medium-term corporate notes, California local agency obligations, and California state obligations and municipal bonds; 270 days for commercial paper; 397 days for negotiable certificates of deposits; 180 days for bankers’ acceptances; and 45 days for repurchase agreements purchased with cash collateral from securities lending agreements. Credit Risk. Under its investment policy and the State of California Government Code, DWP is subject to prudent investor standard of care in managing all aspects of its portfolios. The prudent investor standard requires that DWP “… shall act with care, skill, prudence, and diligence under the circumstances then prevailing, including, but not limited to, the general economic conditions and the anticipated needs of the agency, that a prudent person acting in a like capacity and in familiarity with those matters would use in the conduct of funds of a like character and with like aims, to safeguard the principal and maintain the liquidity needs of the agency.”

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NOTE 4 – DETAILED NOTES ON ALL FUNDS (Continued) The U.S. government agency securities in the portfolio consist of securities issued by government-sponsored enterprises, which are not explicitly guaranteed by the U.S. government. Of the U.S. government agency securities in the portfolio as of June 30, 2012, $344.8 million (92%) was rated with either the highest or second highest possible credit ratings by the Nationally Recognized Statistical Rating Organizations (NRSROs) that rated them and $28.0 million (8%) was not rated. DWP’s investment policy specifies that medium-term corporate notes must be rated in a rating category of “A” or its equivalent or better by a NRSRO. As of June 30, 2012, DWP’s investments in corporate notes were rated as follows: $8.1 million (7%) was rated in the category of AAA, $60.4 million (51%) was rated in the category of AA, and $48.9 million (42%) was rated in the category of A by at least one NRSRO, and $0.4 million were not rated. DWP’s investment policy specifies that commercial paper must be of the highest ranking or of the highest letter and number rating as provided for by at least two NRSROs. As of June 30, 2012, all of DWP’s investments in commercial paper were rated with at least the highest letter and number rating as provided by at least two NRSROs. DWP’s investment policy specifies that negotiable certificates of deposit must be of the highest ranking or letter and number rating as provided for by at least two NRSROs and that for nonnegotiable certificates of deposit, the full amount of principal and interest is insured by the Federal Deposit Insurance Corporation (FDIC) or National Credit Union Administration. As of June 30, 2012, the DWP’s investments in certificates of deposits included $39.0 million of negotiable certificates of deposit with at least the highest letter and number rating as provided by at least two NRSROs and $1.0 million of nonnegotiable certificates of deposit fully insured by the FDIC. DWP’s investment policy specifies that municipal bonds must be rated in a rating category of “A” or its equivalent or better by a NRSRO. As of June 30, 2012, DWP’s investments in municipal bonds were rated as follows: $1.0 million (50%) was rated in the category of AA; and $1.0 million was rated in the category of A by at least one NRSRO. DWP’s investment policy specifies that California local agency obligations must be rated in a rating category of A or its equivalent or better by a NRSRO. As of June 30, 2012, DWP’s investments in California local agency bonds were rated as follows: $6.0 million (14%) was rated in the category of AAA; $17.1 million (40%) was rated in the category of AA; $6.2 million (15%) was rated in the category of A; and $13.3 million (31%) was rated with the highest short-term ranking as provided by at least one NRSRO. DWP’s investment policy specifies that State of California obligations must be rated in a rating category of “A” or its equivalent or better by a NRSRO. As of June 30, 2012, all of the DWP’s investments in State of California Obligations were rated in the rating category of A by at least one NRSRO. DWP’s investment policy specifies that banker’s acceptances must be of the highest ranking or letter and number rating as provided for by at least two NRSROs. As of June 30, 2012, all of the DWP’s investments in banker’s acceptances were rated with the highest letter and number rating as provided by three NRSROs. DWP’s investment policy specifies that money market funds may be purchased as allowed under the State of California Government Code (“Code”), which requires that the fund must have either (1) attained t he highest ranking or highest letter and numerical rating provided by not less than

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two NRSROs; or 2) retained an investment advisor registered or exempt from registration with the Securities and Exchange Commission with not less than five years’ experience in managing money market mutual funds with assets under management in excess of $500.0 million. As of June 30, 2012, each of the money market funds in the portfolio had the highest possible ratings by at least two NRSROs. Concentration of Credit Risk. DWP’s investment policy specifies that there is no percentage limitation on the amount that can be invested in U.S. government agency securities, except that a maximum of 30 percent of the cost value of the portfolio may be invested in the securities of any single U.S. government agency issuer. Of DWP’s total investments as of June 30, 2012, $88.6 million (13%) was invested in securities issued by the Federal Home Loan Bank; $128.5 million (19%) was invested in securities issued by the Federal National Mortgage Association; $91.7 million (14%) was invested in securities issued by the Federal Home Loan Mortgage Corporation; and $35.0 million (5%) was invested in securities issued by the Federal Farm Credit Bank.. Securities Lending Transactions. DWP participates in the City’s securities lending program (SLP), through the pooled investment fund. DWP recognizes its proportionate share of the cash collateral received for securities loaned and the related obligation for the general investment pool. As previously stated, the City temporarily suspended its SLP due to ongoing Request for Proposals (RFP) for a securities lending agent. The City will resume its SLP upon execution of a contract with a selected agent. Derivative Instruments. In accordance with GASB No. 53, DWP records the fair value of its hedging derivative instruments, financial natural gas hedges, on the statement of net assets. As of June 30, 2012, the fair values of the financial natural gas hedges were approximately $(91.3) million. DWP enters into natural gas hedging contracts in order to stabilize the cost of gas needed to produce electricity to serve its customers. It is designed to cap gas prices over a portion of the forecasted gas requirements. DWP does not speculate when entering into financial transactions. Financial hedges are variable to fixed rate swaps and are layered by volumetric averaging. DWP is exposed to financial settlement risk if the counterparties default and/or the agreements are terminated. As of June 30, 2012, DWP’s financial natural gas hedges by fiscal year are the following (in thousands):

Notional Amount(Total Contract First Last

Contract Price Range Effective Termination Fair Derivative Description Quantities*) Dollar per Unit Date Date Value

Financial natural gas: FY 2012-13 6,387,500 5.96 - 8.31 07/01/12 06/30/13 (24,631)$ FY 2013-14 5,027,000 6.37 - 8.31 07/01/13 06/30/14 (17,221) FY 2014-15 5,384,500 6.37 - 9.38 07/01/14 06/30/15 (18,412) FY 2015-16 4,488,000 6.42 - 9.85 07/01/15 06/30/16 (15,312) FY 2016-17 3,197,500 6.61 - 9.83 07/01/16 06/30/17 (10,317) FY 2017-18 2,190,000 6.76 - 7.14 07/01/17 06/30/18 (5,403)

Total 26,674,500 5.96 - 9.85 07/01/11 06/30/18 (91,296)$

* Contract quantities in MMBtu - Million British Thermal Units

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The fair value of the natural gas hedges decreased by $17.5 million and is reported as a deferred outflow on the statement of net assets. All fair values were estimated using forward market prices available from broker quotes and exchanges.

Credit Risk. DWP is exposed to credit risk related to nonperformance by its wholesale counterparties under the terms of contractual agreements. In order to limit the risk of counterparty default, the Department has implemented a Wholesale Marketing Counterparty Evaluation Policy, which was amended and renamed as Counterparty Evaluation Credit Policy (the Counterparty Policy), and was approved by the Board on May 6, 2008. Under the new policy, the scope has been expanded beyond physical power to include transmission, physical natural gas, and financial natural gas. Also, the credit limit structure has been categorized into short-term and long-term structures where the short-term structure is applicable to transactions with terms of up to 18 months and the long-term structure to cover transactions beyond 18 months. The Policy includes provisions to limit risk including: the assignment of internal credit ratings to all DWP’s counterparties based on counterparty and/or debt ratings; the use of expected default frequency equivalent credit rating for short-term transactions; the requirement for credit enhancements (including advance payments, irrevocable letters of credit, escrow trust accounts, and parent company guarantees) for counterparties that do not meet an acceptable level of risk; and the use of standardized agreements, which allow for the netting of positive and negative exposures associated with a single counterparty. As of June 30, 2012, the ten financial natural gas hedge counterparties were rated by Moody’s as follows: three at Aa3, three at A2, three at A3, and one at Baa1. The counterparties were rated by S&P as follows: two at AA-, two at A+, four at A, and two at A-. Based on the International Swap Dealers Association agreements, DWP or the counterparty may be required to post collateral to support the financial natural gas hedges subject to credit risk in the form of cash, negotiable debt instruments (other than interest-only and principal-only securities), or eligible letters of credit. Collateral posted is held by a custodian. As of June 30, 2012, the fair values of the financial natural gas hedges are within the credit limits and collateral posting was not required. Basis Risk. DWP is exposed to basis risk between the financial natural gas hedges, which are settled monthly at NW Rocky Mountains Index, and the hedged gas deliveries, which are daily spot purchases at Kern River, Opal prices. However, these pricing points are in the same region and are highly correlated. Termination Risk. DWP or its counterparties may terminate the contractual agreements if the other party fails to perform under the terms of the contract. No termination events have occurred and there are no out-of-the-ordinary termination events contained in contractual documents.

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Fire and Police Pension and Health Subsidy Plans

At June 30, 2012, the Fire and Police Pension and Health Subsidy Plans’ (Pensions) investments are as follows (in thousands):

Pension Health SubsidyInvestment Type Plan Plan Total

Short-term Investments 492,173$ 33,802$ 525,975$ U.S. Government Obligations 1,682,432 115,547 1,797,979 Domestic Corporate Bonds 1,374,946 94,429 1,469,375 International Bonds 17,406 1,195 18,601 Domestic Stocks 5,003,235 343,615 5,346,850 International Stocks 2,137,109 146,773 2,283,882 Real Estate 1,158,265 79,548 1,237,813 Alternative Investments 1,691,151 116,146 1,807,297 Security Lending 1,202,971 82,618 1,285,589 Total 14,759,688$ 1,013,673$ 15,773,361$

Interest Rate Risk. Pensions manages its exposure to interest rate risk by requiring fixed income investment managers to maintain the effective duration of their portfolio within a specified range of the Barclays US Aggregate Bond Index for core fixed income investments, the Barclays US Government/Credit Long Term Bond Index for long duration investments, and the BofA ML High Yield Master II Index for high yield investments. The longer the duration, the greater the sensitivity to interest rate changes. Information about the sensitivity of the Pensions’ investments to interest rate fluctuations is provided in the following table that shows the weighted average effective duration of Pensions’ fixed income investments by investment type:

Weighted AverageAmount Maturity

Investment Type (in thousands) (in years)

Asset Backed Securities 111,169$ 5.33Commercial Mortgages 41,055 27.85Corporate Bonds 1,284,924 18.65Government Agencies Bonds 57,176 4.44Government Bonds 617,536 31.83Government Mortgage Backed Securities 390,719 21.47Index Linked Government Bonds 766,223 9.97Non-Government Backed Collateralized Mortgage Obligations 5,744 20.88Bond Index Fund * 11,410 N/ATotal 3,285,956$

* Shares are in commingled fixed income funds.

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Investments that are highly sensitive to interest rate risk at June 30, 2012 are as follows (in thousands):

Investment Type Amount

Asset Backed Securities 111,169$ Commercial Mortgages 41,055 Government Agencies Bonds 57,176 Government Mortgage Backed Securities 390,719 Index Linked Government Bonds 766,223 Non-Government Backed Collateralized Mortgage Obligations 5,744

Total 1,372,086$

Credit Risk. Pensions seeks to maintain a diversified portfolio of fixed income securities in order to obtain the highest total return at an acceptable level of risk within this asset class. As of June 30, 2012, the quality ratings of Pensions’ fixed income investments are as follows:

AmountCredit Rating (in thousands) Percentage

AAA 103,937$ 3.26 %AA 52,661 1.65A 379,963 11.91BBB 983,429 30.83BB 66,953 2.10B 77,625 2.43CCC 41,956 1.32CC 13,753 0.43C 1,992 0.06Not Rated 1,467,930 46.01Subtotal 3,190,199 100.00 %

U.S. Government Issued or Guaranteed Securities 95,757 Total Fixed Income Investments 3,285,956$

Concentration of Credit Risk. As of June 30, 2012, Pensions’ investment portfolio has no concentration of investments of 5% or more of the total investment portfolio in any one entity except those issued or guaranteed by the U.S. Government.

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NOTE 4 – DETAILED NOTES ON ALL FUNDS (Continued) Custodial Credit Risk. Custodial credit risk for deposits is the risk that, in the event of a financial failure of a depository financial institution, Pensions’ deposits and collateral securities in the possession of an outside party would not be recoverable. Deposits are exposed if they are not insured or are not collateralized. As of June 30, 2012, Pensions’ exposure to such risk was $18.3 million, comprised of foreign currencies held outside the custodial bank. For investment securities, custodial credit risk is the risk that, in the event of the failure of the counterparty, Pensions will not be able to recover the value of its investments or collateral securities that are in the possession of an outside party. Investment securities are exposed to custodial credit risk if they are not insured, or not registered in Pensions’ name, and held by the counterparty. Pensions’ investments in publicly traded stocks and bonds were not exposed to custodial credit risk since they are held by the custodian and registered in the Pensions’ name. As of June 30, 2012, Pensions’ other investments are exposed to custodial credit risk including hedge fund of $598.7 million, private equity of $1.2 billion, and commingled real estate funds of $587.1 million.

Foreign Currency Risk. The Pensions’ asset allocation policy sets a target of 18% of the total portfolio for non-U.S. equity investments. The majority of Pensions’ currency exposure comes from its holdings of foreign stocks. Pensions’ foreign investment holdings, including foreign currencies in temporary investments at June 30, 2012 are as follows (in thousands):

Foreign Currency Amount

Australian Dollar 60,158$ Brazilian Real 64,294 British Pound Sterling 403,431 Canadian Dollar 47,316 Chilean Peso 7,346 Columbian Peso 798 Czech Koruna 1,786 Danish Krone 20,967 Euro 504,320 Hong Kong Dollar 171,070 Hungarian Forint 1,713 Indian Rupee 35,842 Indonesian Rupiah 19,402 Japanese Yen 374,201 Malaysian Ringgit 22,148 Mexican Peso 23,687 New Israeli Shekel 2,408 New Taiwan Dollar 87,693 New Zealand Dollar 513 Norwegian Krone 14,873 Peruvian Nuevo Sol 667 Philippine Peso 7,835 Polish Zloty 8,683 Singapore Dollar 26,362 South African Rand 58,582 South Korean Won 128,795 Swedish Krona 52,160 Swiss Franc 118,121 Thai Baht 19,292 Turkish Lira 18,021

Total 2,302,484$

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NOTE 4 – DETAILED NOTES ON ALL FUNDS (Continued) Securities Lending Transactions. Pensions has entered into various short-term arrangements with its custodian, whereby investments are loaned to various brokers, as selected by the custodian. The lending arrangements are collateralized by cash, letters of credit and marketable securities, held on Pensions’ behalf by the custodian. These agreements provide for the return of the investments and for a payment of a fee when the collateral is marketable securities or letters of credit, or interest earned when the collateral is cash on deposit. Upon direction of the Pensions’ Board, the custodian may loan securities to brokers or dealers or other borrowers upon such terms and conditions, as it deems advisable. The minimum required collateralization is 102% of market value plus any accrued interest of the borrowed U.S. securities and 105% of market value plus any accrued interest for non-U.S. securities. At year-end, Pensions had no credit risk exposure to borrowers because the amounts Pensions owes the borrowers exceed the amounts the borrowers owe Pensions. Borrowers of Pensions securities have all incidents of ownership with respect to borrowed securities and collateral including the right to vote, and transfer or loan borrowed securities to others. Pensions is entitled to receive all distributions, which are made by the issuer of the borrowed securities, directly from the borrower. Under the lending agreements, the custodian will indemnify Pensions as a result of the custodian’s failure to: (1) make a reasonable determination of the creditworthiness of a potential borrower before lending and, during the term of the loan or loans, the borrower files a petition for bankruptcy or similar action, (2) demand adequate collateral, or (3) otherwise maintain the securities lending program in compliance with the Federal Financial Institutions Examinations Council Supervisory Policy on Securities Lending. Derivative Instruments. The fair value balances and notional amounts of derivative instruments outstanding at June 30, 2012, classified by type, and the changes in fair value of such derivative instruments are as follows (in thousands):

Fair Value atChanges in Fair Value June 30, 2012 Notional

Type Classification Amount Classification Amount Amount Futures - Shorts $ -- Investment $ -- (14,119)$ Futures - Longs Investment Loss 503 Investment -- 3,574 Forwards Investment Revenue (1,769) Investment (28) -- Rights/Warrants Investment Loss 1,111 Investment 108 --

At June 30, 2012, Pensions held futures-shorts with a notional value of $(14.1) million and futures-longs with the notional value of $3.6 million with a realized loss of $0.5 million for the fiscal year. Pensions held forwards with a fair value of $(0.03) million and rights and warrants with a fair value of $0.1 million. Earnings of $1.8 million for forwards and loss of $1.1 million for rights and warrants were reported. The fair values of the futures that are traded on various exchanges are determined by the price on that exchange. Fair values for the currency forward contracts are determined by the exchange rate of the reference currency on the last day of the reporting period.

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NOTE 4 – DETAILED NOTES ON ALL FUNDS (Continued) Credit Risk. Pensions enters into futures and forward foreign currency contracts to manage portfolio risk or use them as substitutes for owning securities. Forward contracts are subject to credit risk if the counterparties to the contracts are unable to meet the terms of the contract. Futures contracts have little credit risk, as organized exchanges are the guarantors. Due to the level of risk associated with derivative investments, it is reasonably possible that changes in the values of these investments will occur in the near term and that such changes could materially affect the amount reported in the financial statements.

Los Angeles City Employees’ Retirement and Postemployment Healthcare Plans

At June 30, 2012, the Los Angeles City Employees’ Retirement and Postemployment Healthcare Plans’ (LACERS) investments are as follows (in thousands):

PostemploymentRetirement Healthcare

Plan Plan Total

Short-term Investments (non-U.S. of $166,243) 336,894$ 55,452$ 392,346$ U.S. Government/Agencies Securities 633,226 104,227 737,453 Municipal Bonds 5,457 898 6,355 Domestic Corporate Bonds 861,942 141,874 1,003,816 International Bonds 258,297 42,515 300,812 Bank Loans 3,617 596 4,213 Opportunistic Debt 67,770 11,155 78,925 Domestic Stocks 3,493,969 575,100 4,069,069 International Stocks 1,537,725 253,107 1,790,832 Mortgages 476,192 78,381 554,573 Derivative Instruments 365 59 424 Real Estate 551,643 90,799 642,442 Venture Capital and Alternative Investments 1,024,014 168,551 1,192,565 Security Lending Collateral 730,023 120,160 850,183 Total 9,981,134$ 1,642,874$ 11,624,008$

Investment Type

Interest Rate Risk. LACERS manages its exposure to interest rate risk by requiring the fixed income investment managers to maintain their portfolio effective duration within a specified range of the BC U.S. Universal Bond Index, the BC Intermediate Government Credit Index, or the BC Aggregate Bond Index, depending on the LACERS Board’s mandates. The effective duration is a measure, in years, of interest rate sensitivity in debt investments.

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NOTE 4 – DETAILED NOTES ON ALL FUNDS (Continued) Information about the sensitivity of the fair values of LACERS’ investments to market interest rate fluctuations is provided by the following table that shows the weighted average effective duration of fixed income investments:

Amount Weighted AverageInvestment Type (in thousands) Duration (in years)

Asset Backed Securities 15,026$ 4.50Bank Loans 4,213 0.25Commercial Mortgage Backed Securities 106,276 3.83Corporate Bonds 1,213,870 6.56Government Agencies 56,655 5.11Government Bonds 651,317 3.29Government Mortgage Backed Securities 448,297 1.23Index Linked Government Bonds 79,463 6.61Municipal/Provincial Bonds 6,954 7.53Nongovernment Backed Collateralized Mortgage Obligations 25,151 3.29Opportunistic Debt * 78,925 3.62Derivative Instruments 189 (4.33)Total 2,686,336$

* Due to the lack of sufficient data for a security in this category to report

Weighted Average Effective Duration, the Modified Duration was repored

instead for the security.

Credit Risk. LACERS seeks to maintain a diversified portfolio of fixed income investments in order to obtain the highest total return for the fund at an acceptable level of risk within this asset class. The credit quality ratings in fixed income securities by a nationally recognized statistical rating organization as of June 30, 2012 are as follows:


AAA 34,415$ 1.73 %AA * 535,664 26.89A 420,420 21.11BBB 587,353 29.49BB 145,032 7.28B 72,426 3.64CCC 27,337 1.37CC 5,367 0.27D 8,675 0.44Not Rated 154,998 7.78Subtotal 1,991,687 100.00 %

U.S. Government Guaranteed Securities ** 694,649 Total Fixed Income Investments 2,686,336$

* FNMA and FHLMC were downgraded from AAA to AA+ by S&P in August 2011.

LACERS had $486,268 of these securities at June 30, 2012.

** US Government Bonds and Notes and GNMA Mortgage-Backed

Securities were downgraded from AAA to AA+ by S&P in August 2011.

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Concentration of Credit Risk. LACERS’ investment portfolio as of June 30, 2012 has no concentration of investments in any one entity that represented 5% or more of the total investment portfolio. Custodial Credit Risk. Custodial credit risk for deposits is the risk that, in the event of a financial failure of depository financial institution, LACERS would not be able to recover its deposits or would not be able to recover collateral securities that are in the possession of an outside party. Deposits are exposed to custodial credit risk if they are not insured or not collateralized. As of June 30, 2012, LACERS has exposure to such risk in the amount of $41.9 million or 1.81% of the fair value of the total international investments. The amount represents non-invested cash denominated in foreign currencies, managed by 12 different investment managers, and held outside of LACERS custodial bank. LACERS policy requires each individual publicly traded equities investment managers to hold no more than 10% of their portfolios in the form of cash. LACERS is in compliance with the policy. Custodial credit risk for investments is the risk that, in the event of the failure of the counterparty to a transaction, LACERS would not be able to recover the value of the investment or collateral securities that are in the possession of an outside party. Investment securities are exposed to custodial credit risk if the securities are not insured, or are not registered in LACERS’ name, and held by the counterparty. LACERS’ investments are not exposed to custodial credit risk if they are insured or registered in LACERS’ name. LACERS’ investments are not exposed to custodial credit risk because all securities are held by LACERS’ custodial bank in LACERS’ name. Foreign Currency Risk. The Asset Allocation policy of LACERS sets a target of 20% of the total portfolio for foreign investments in equities. In addition, fixed income, real estate and alternative investment managers may hold foreign investments depending on their individual mandates. Forward currency contracts are permitted primarily to reduce foreign currency risk. Non-U.S. currency investment holdings as of June 30, 2012, which represents 17.1% of fair value of total investments, are as follows (in thousands):

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AmountArgentine Peso 59$ Australian Dollar 109,621 Brazilian Real 12,466 British Pound Sterling 270,185 Canadian Dollar 89,373 Columbian Peso 572 Czech Koruna 733 Danish Krone 15,685 Egyptian Pound 1,277 Euro 493,975 Hong Kong Dollar 136,672 Hungarian Forint 373 Indian Rupee 28,272 Indonesian Rupiah 10,788 Japanese Yen 307,895 Malaysian Ringgit 1,061 Mexican Peso 26,543 New Israeli Shekel 4,105 New Taiwan Dollar 36,698 New Zealand Dollar 1,078 Norwegian Krone 12,786 Philippine Peso 16,180 Polish Zloty 3,647 Singapore Dollar 50,020 South African Rand 18,220 South Korean Won 75,803 Swedish Krona 46,182 Swiss Franc 112,071 Thai Baht 28,482 Turkish Lira 6,330 United Arab Emirates Dirham 1,298

Total 1,918,450$

Foreign Currency

Highly Sensitive Investments. Highly sensitive investments are certain debt investments whose terms may cause their fair value to be highly sensitive to market interest rate changes. Terms include embedded options, coupon multipliers, benchmark indexes, and reset dates. The asset-backed investments of LACERS have embedded prepayment options that will typically cause prepayments by the obligees of the underlying investments when interest rates fall. Prepayments eliminate the stream of future interest payments and, therefore, diminish the fair value of the asset-backed investment. As of June 30, 2012, the fair value of LACERS asset-backed investments by investment type, are as follows (in thousands):

Investment Type Amount

Asset Backed Securities 15,026$ Commercial Mortgage Backed Securities 106,276 Government Agencies 56,655 Government Mortgage Backed Securities 448,297 Nongovernment Backed Collateralized Mortgage Obligations 25,151 Total 651,405$

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Derivative Instruments. LACERS enters into derivative contracts for investment purposes and to manage risks associated with its investment portfolio. All derivatives for the current and previous fiscal years are classified as investment derivatives. The notional amount and the fair value of derivative instruments as of June 30, 2012 are as follows (in thousands):

Notional Fair Change

Derivative Type Amount Value in Fair Value

Future Contracts - Equity Index 11,749$ 210$ 66$ Interest Rate (111,076) 189 40 Currency Forward Contracts 40,540 (20) (79) Right / Warrants N/A 45 (104)

Total Value 424$ (77)$

Credit Risk. Derivatives are subject to credit risk that the counterparty to a contract will default. LACERS is exposed to credit risk on reported assets of the investment derivatives that are traded over the counter. The credit risk of exchange traded derivatives for future contracts is considered minimal because the exchange clearing house is the counterparty and guarantees the performance. LACERS permits investment managers, under the terms of individual guidelines, to use derivative instruments as set forth in each manager’s investment guidelines to control portfolio risk. It is the responsibility of these investment managers to actively monitor counterparties on their financial safety and ensure compliance with the investment restrictions. LACERS has no general investment policy with respect to netting arrangements or collateral requirements. However, these individual investment managers have set up the arrangements with the counterparties to net off the positive and negative contracts with the same counterparty in case of the counterparty’s default. As of June 30, 2012, without respect to netting arrangements, LACERS maximum loss on derivative instruments subject to credit risk, namely currency forward contracts, is as follows (in thousands):

S & P Ratings AmountAA- 32$ A+ 141

Total Credit Risk 173$

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Securities Lending Transactions. LACERS has entered into various short-term arrangements with its custodian whereby securities are loaned to various brokers. The custodian determines which lenders’ accounts to lend securities from, by using an impartial sequential system that matches loan requests with various lenders’ accounts. All lenders are deemed to have relatively equal opportunity to profit from the lending of securities. Therefore, should a collateral deficiency occur beyond the custodian’s responsibilities, the deficiency is allocated pro rata among all lenders.

Minimum required collateralization is 102% of fair value of the borrowed U.S. securities and 105% for international securities. Collateral consists of cash, government securities and irrevocable bank letters of credit. To reduce reinvestment risk exposure, LACERS has approved a securities lending policy and strengthened existing securities lending guidelines to incorporate the use of only the highest quality securities. Cash collateral may be invested separately or pooled in a separate fund for investing in money market or cash equivalent investments. LACERS cannot pledge or sell non-cash collateral unless the borrower defaults. The cash collateral values of securities on loan to brokers are shown at fair value in the statement of fiduciary net assets. During fiscal year 2012, LACERS had no losses due to borrower default. There was no credit risk exposure at year-end because the amounts LACERS owed the borrowers exceed the amounts the borrowers owed LACERS.

Water and Power Employees’ Retirement, Disability, and Death Benefit Insurance; and Retiree Health Benefits Plans

At June 30, 2012, the Water and Power Employees’ Retirement, Disability, and Death Benefit Insurance; and Retiree Health Benefits Plans’ (DWP Plans) investments are as follows (in thousands):

Retirement,Disability, and RetireeDeath Benefit Health Benefits

Investment Type Insurance Plan Plan Total

Domestic Stocks 3,276,096$ 546,868$ 3,822,964$ International Stocks 1,138,199 177,737 1,315,936 Mortgage and Asset Backed Securities 267,071 48,554 315,625 Domestic Corporate Debts 567,170 107,299 674,469 International Corporate Debts 7,918 -- 7,918 Medium Term Notes 182 36 218 Preferred Securities/Convertible Bonds 38,341 2,453 40,794 Hedge Funds 481,079 67,768 548,847 Real Estate 199,990 11,146 211,136 U.S. Agencies and Other General Obligations 702,296 133,952 836,248 U.S. Treasuries 466,463 84,459 550,922 Money Market Mutual Funds 304,711 67,425 372,136 Securities Lending Short-term Collateral Investment Pool 490,028 70,059 560,087

Total 7,939,544$ 1,317,756$ 9,257,300$

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NOTE 4 – DETAILED NOTES ON ALL FUNDS (Continued) Interest Rate Risk. As of June 30, 2012, DWP Plans’ exposure to interest rate risk is as follows:

Amount(in thousands)

Mortgage and Asset Backed Securities 315,625$ 14.50Domestic Corporate Debts 674,469 9.52U.S. Treasuries 550,922 7.75Mutual Funds 372,136 0.06Medium Term Notes 219 2.67U.S. Agency Notes 836,248 21.36Preferred Securities/Convertible Bonds 40,794 5.48International Corporate Debts 7,918 9.10Total 2,798,331$ 11.95

Investment Type

WeightedAverage Maturity

(Years)

DWP Plans has a long-term investment horizon and utilizes an asset allocation that encompasses a long-run perspective of capital markets. DWP Plans maintains the interest rate risk consistent with its long-term investment horizon. Credit Risk. DWP Plans’ investment policy is to apply the “prudent-person” standards. Investments are made with care, skill, prudence, and diligence under the circumstances then prevailing that a prudent person acting in a like capacity and familiar with such matters would use in the conduct of an enterprise of a like character and with like aims. DWP Plans’ investment policy has been designed to produce the most favorable long-term total portfolio return consistent with reasonable levels of risks. Prudent risk-taking is warranted within the context of overall portfolio diversification. DWP Plans’ investment policy for fixed income allows investment grade and high yield fixed income securities with minimum credit ratings of BBB- or Baa3 by two or more rating agencies. Investment managers shall notify DWP Plans’ management of subsequent declines in ratings and shall develop an investment strategy for investments rated below Baa3 or BBB-. Active high yield fixed income investment is composed primarily of non-investment grade securities as rated by Moody’s, S&P or Fitch. The credit ratings of DWP Plans’ investments at June 30, 2012 are as follows:


AAA 220,150$ 15.60 %A or better 234,927 16.65B or better 498,779 35.35C or better 48,322 3.42Not Rated 408,982 28.98Subtotal 1,411,160 100.00 %U.S. Government Guaranteed Securities 1,387,170 Total Fixed Income Investments 2,798,330$

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NOTE 4 – DETAILED NOTES ON ALL FUNDS (Continued) Custodial Credit Risk. Custodial credit risk for deposits is the risk that in the event of a bank failure, DWP Plans deposits may not be returned. As of June 30, 2012, DWP Plans’ cash balances consist primarily of deposits with the City Treasurer. Concentration of Credit Risk. According to DWP Plans’ investment policy, no more than 5% of investments shall be invested in any one issue, except for investment in the fixed income asset class where no more than 10% of investments shall be invested in any one issue. United States Treasury or United States Agency issues are exempted from this limitation. As of June 30, 2012, there are no investment holdings of more than 5% in any one issue in each of the plan’s net assets or in DWP Plans’ aggregate, except investments issued or guaranteed by the U.S. Government and investments in commingled funds. Foreign Currency Risk. DWP Plans’ investment policy permits a maximum of 21% of the total investments in foreign currency-denominated securities. As of June 30, 2012, DWP Plans’ position is 16.6% as follows (in thousands):

Foreign Currency Amount

Australian Dollar 74,574$ Brazilian Real 2,331 British Pound Sterling 389,765 Canadian Dollar 106,829 Danish Krone 15,086 Euro 392,093 Hong Kong Dollar 30,298 Israeli Shekel 1,977 Japanese Yen 330,478 Mexican Peso 1,931 New Zealand Dollar 695 Norwegian Krone 13,031 Philippines Peso 782 Singapore Dollar 13,307 Swedish Krona 38,969 Swiss Franc 127,580 Uruguayan Peso 382 Total 1,540,108$

Securities Lending Transactions. DWP Plans’ custodial bank manages its securities lending. The DWP Plans or the borrowers can terminate the contract with advance notice. The lending arrangements are collateralized by cash and marketable securities (guaranteed by the full faith and credit of the U.S. Government) at (i) 102% with respect to U.S. securities; (ii) 105% with respect to foreign securities; or (iii) a percentage mutually agreed of the underlying securities’ market value. These arrangements provide for the return of the investments and a share of the interest earned on the collateral. The securities on loan to brokers remain the property of the DWP Plans and continue to be included in their respective accounts on the Statement of Plan Net Assets. At year-end, DWP Plans had no credit risk exposure to borrowers because the value of the collateral received exceeded the value of the securities on loan. Related borrower or lending agent default losses were recognized in the financial statements.

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NOTE 4 – DETAILED NOTES ON ALL FUNDS (Continued) DWP Plans’ custodian is the authorized agent to handle DWP Plans’ securities lending activity. The custodian may invest the cash collateral received in connection with loaned securities in investments permitted by DWP Plans. DWP Plans bears sole risk of all losses of the invested collateral, including losses incurred in the event of liquidation of the permitted investments. The custodial bank is responsible for the return of loaned securities from the borrowers. DWP Plans does not have the ability to pledge or sell collateral assets unless the borrower is in default of its obligation. In lending domestic securities, cash collateral is invested in the lending agent’s short-term investment pool, which at June 30, 2012, has an average maturity of 34 days. Derivative Instruments. The fair value balances and notional amounts of derivatives instruments outstanding at June 30, 2012, classified by type, and the changes in fair values of such derivative instruments are as follows (in thousands):

Notional Type Classification Amount Classification Amount Amount

Investment Forward Contracts Income / (Loss) 3,660$ Investment 6,525$ 365,298$

Investment Call Options Income / (Loss) (1,789) Investment 12,004 466,403

Changes in Fair Value June 30, 2012Fair Value at

At June 30, 2012, DWP Plans had direct commitments to purchase and/or sell foreign currency in the forms of swap and forward contracts as part of the strategy of hedging its currency risk. The fair values of the swap and forward contracts were based on the market price. At June 30, 2012, DWP Plans also had written S&P 500 call options as part of its asset allocation strategy. The fair value of the call options is based on market prices.

Others

Other investments are generally those required to be deposited in accounts established under various bond indentures and will be held, invested and reinvested by the trustees/fiscal agents in permitted investments as defined in the indentures. Investment maturities are scheduled to coincide with bond retirement and interest payments. At June 30, 2012, other investments are as follows (in thousands):

Investment Maturities1 to 30 31 to 60 61 to 365 366 Days

Investment Type Amount Days Days Days To 5 YearsU.S. Sponsored Agency Issues 59,149$ --$ --$ 11,349$ 47,800$ U.S. Treasury Notes 56,962 -- -- 56,962 -- U.S. Treasury Bills 12,943 -- 12,943 -- -- Mutual Funds 61,895 61,895 -- -- -- Money Market Funds 1,231,531 367,700 863,831 -- -- Short-term Investment Funds 225 225 -- -- -- Guaranteed Investment Contracts 74,398 -- -- -- 74,398

Total 1,497,103$ 429,820$ 876,774$ 68,311$ 122,198$

Credit Risk. At June 30, 2012, the investments in U.S. Sponsored Agency Issues and U.S. Treasury Notes have attained the highest possible ratings as follows: AA+ by S&P and Aaa by Moody’s. The short-term investment funds and guaranteed investment contracts were not rated.

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NOTE 4 – DETAILED NOTES ON ALL FUNDS (Continued) B. Receivables Primary Government The primary government’s net receivables at June 30, 2012 are as follows (in thousands):

Governmental Business-typeActivities Activities

Gross Receivables Taxes 616,437$ --$ Accounts 555,949 912,076 Special Assessments 25,744 -- Investment Income 16,226 11,071 Intergovernmental 215,162 121,075 Loans and Notes 1,399,085 906,038

Total 2,828,603 1,950,260 Allowance for Uncollectibles Taxes (43,948) -- Accounts (349,580) (51,837) Loans and Notes (974,804) --

Total (1,368,332) (51,837)

Net Receivables 1,460,271$ 1,898,423$

Net Receivables not scheduled for collection during the subsequent year: Loans, Notes and Intergovernmental 399,332$ 875,252$

The majority of the governmental activities loans consist of grant funded loans provided as follows: 1) to property owners for the upgrading and rehabilitation of residential or rental properties to eliminate the spread of slums and blight and repair earthquake damage; 2) to businesses to carry out economic development projects; and 3) to community based organizations to acquire, construct or improve existing public facilities. Interest rates ranged from 0.5% to 14.0% for outstanding interest bearing loans. The principal and interest are paid either monthly, quarterly, annually (amortizing loans), or when residual receipts are generated in accordance with the loan agreements (residual receipts loans), or deferred until maturity, transfer of title or sale of property occurs (deferred loans). The business-type activities loans include Airports’ long-term notes of $1.2 million, Power’s long-term notes of $838.8 million from Intermountain Power Agency (see Note 5C on page 172), and $0.3 million long-term Harbor notes receivable.

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NOTE 4 – DETAILED NOTES ON ALL FUNDS (Continued) Deferred Receivables Governmental funds report deferred revenue in connection with receivables for revenues that are not considered to be available to liquidate liabilities of the current period. At June 30, 2012, the various components of deferred revenue reported in the governmental funds were as follows (in thousands):

Taxes 355,906$ Accounts 109,555 Intergovernmental 184,755 Special Assessments 3,354 Investment Income 4,092 Services to Enterprise 7,100 Total Deferred Revenue for Governmental Funds 664,762$

C. Restricted Assets The primary government’s restricted assets are composed of the following at June 30, 2012 (in thousands):


Cash and InvestmentsCash and Pooled Investments

With City Treasurer --$ 1,877,224$ 1,877,224$ Other Investments 3,474 1,950,789 1,954,263

Subtotal 3,474 3,828,013 3,831,487

Other Restricted AssetsInvestment Income Receivable -- 2 2

Total 3,474$ 3,828,015$ 3,831,489$

The restricted assets for governmental activities are related to the State mandated deposit with a trustee bank to finance solidwaste landfill closure and postclosure care costs. For the business-type activities, the restricted amounts are for accumulated resources for debt service payments, nuclear decommissioning trust funds, natural gas trust fund, hazardous waste treatment storage and disposal trust fund, SCCPA Palo Verde investment, water expense stabilization fund, operations and maintenance reserve, capital construction projects and debt service.

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NOTE 4 – DETAILED NOTES ON ALL FUNDS (Continued) D. Joint Ventures Intermodal Container Transfer Facility Joint Powers Authority The Harbor departments of the City of Los Angeles (Harbor) and the City of Long Beach, California (Port of Long Beach) entered into a joint exercise of powers agreement to form the Intermodal Container Transfer Facility Joint Powers Authority (ICTF) for the purpose of financing and constructing a facility to transfer cargo containers between trucks and railroad cars. Harbor contributed $2.5 million to the ICTF as part of the agreement. The facility, which began operations in December 1986, was developed by Southern Pacific Transportation Company (SPTC, subsequently a wholly owned subsidiary of Union Pacific Corporation), which operates the facility under a long-term lease agreement. Harbor appoints two members of the ICTF’s five-member governing board and accounts for its investment using the equity method. Both Harbor and Port of Long Beach share income and equity distributions equally.

Pursuant to an indenture of trust dated November 1, 1984, the ICTF issued $53.9 million bonds (1984 Bonds) on behalf of the SPTC to construct the facility. In 1989, the ICTF issued $52.3 million refunding bonds (1989 Bonds) on behalf of SPTC to advance refund all of the 1984 Bonds. In 1999, the ICTF, on behalf of the SPTC, again issued $42.9 million refunding bonds (1999 Bonds) to advance refund all of the 1989 Bonds. The 1999 Bonds are payable solely from payments by the SPTC under the lease agreement for use of the facility. The nature of the bonds is such that the indebtedness is that of the SPTC and not of the ICTF, nor the Harbor, nor the Port of Long Beach. The ICTF’s operations are financed by lease revenues. The ICTF is empowered to perform those acts necessary for the development of its facilities and related facilities, including acquiring, constructing, leasing, and selling any of its property. Harbor’s share of the ICTF’s net assets at June 30, 2012 is $5.0 million. Separate financial statements for the ICTF’s may be obtained from the Executive Director, Port of Long Beach, 925 Harbor Plaza, Long Beach, California 90802. Alameda Corridor Transportation Authority In August 1989, Harbor and Port of Long Beach entered into a joint exercise of powers agreement and formed the Alameda Corridor Transportation Authority (ACTA) for the purpose of establishing a comprehensive transportation corridor and related facilities consisting of street and railroad rights-of-way, and an improved highway and railroad network along Alameda Street between the Santa Monica Freeway and the Ports of Los Angeles and Long Beach in San Pedro Bay linking the two ports to the central Los Angeles area. During fiscal year 1995, the Harbor and the Port of Long Beach purchased railroad rights-of-way and other assets totaling approximately $370.0 million along the proposed corridor route. At June 30, 1998, Harbor had advanced a total of $13.3 million to the ACTA to fund its share of planning and other costs incurred to date. During fiscal year 1999, the ACTA reimbursed the Harbor for all amounts advanced plus approximately $3.2 million of interest on the advances out of debt or grant financing proceeds. In addition, the ACTA reimbursed Harbor for approximately $81.7 million of capital assets directly related to the ACTA’s mission, which Harbor had previously included in construction in progress. Of the capital assets transferred, approximately $22.2 million had been funded by capital grants, which Harbor had previously included in contributions/land valuation equity.

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NOTE 4 – DETAILED NOTES ON ALL FUNDS (Continued) Harbor and Port of Long Beach share income and equity distributions equally. If ACTA revenues are insufficient to pay ACTA debt obligations, the Port will severally but not jointly with the Port of Long Beach pay up to 20% of any shortfall of that obligation on an annual basis. Harbor has no share of the ACTA’s net assets and income at June 30, 2012. Harbor paid $3.0 million in shortfall payments in fiscal year 2012, and will pay another $3.0 million in fiscal year 2013. Shortfall payments beyond fiscal year 2013 are not expected to occur until fiscal year 2020, at which time, payments are projected to be made each year over a four-year period. Separate financial statements for ACTA may be obtained from the Chief Financial Officer, Alameda Corridor Transportation Authority, One Civic Plaza Drive, Suite 350, Carson, California 90745. E. Capital Assets Governmental Activities Capital asset activity for Governmental Activities for the year ended June 30, 2012 is as follows (in thousands):

Balance Additions / Deductions / BalanceGovernmental Activities June 30, 2011 Transfers Transfers June 30, 2012

Capital Assets Not Depreciated Land 812,560$ 5,043$ (645)$ 816,958$ Infrastructure 170,605 550 -- 171,155 Construction in Progress 782,081 205,010 (129,837) 857,254 Intangible Assets 42,308 729 (34,401) 8,636

Total Capital Assets Not Depreciated 1,807,554 211,332 (164,883) 1,854,003

Capital Assets Depreciated Buildings and Improvements 4,314,955 96,680 (535) 4,411,100 Machinery, Furniture and Equipment 1,293,324 133,485 (71,839) 1,354,970 Infrastructure 2,790,270 79,296 (2,755) 2,866,811 Intangible Assets 66,544 34,555 -- 101,099

Total Capital Assets Depreciated 8,465,093 344,016 (75,129) 8,733,980

Less: Accumulated Depreciation/Amortization Buildings and Improvements (1,103,044) (112,198) 535 (1,214,707) Machinery, Furniture and Equipment (947,769) (103,265) 71,839 (979,195) Infrastructure (1,066,327) (55,353) 2,755 (1,118,925) Intangible Assets (15,727) (14,321) -- (30,048)

Total Accumulated Depreciation/Amortization (3,132,867) (285,137) 75,129 (3,342,875)

Total Capital Assets Depreciated/Amortized, Net 5,332,226 58,879 -- 5,391,105

Governmental Activities Capital Assets, Net 7,139,780$ 270,211$ (164,883)$ 7,245,108$

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NOTE 4 – DETAILED NOTES ON ALL FUNDS (Continued) Depreciation/amortization expense was charged to functions/programs of the governmental activities as follows (in thousands):

Function/Program AmountGeneral Government 35,834$ Protection of Persons and Property 87,331 Public Works 50,362 Health and Sanitation 21,785 Transportation 38,253 Cultural and Recreational Services 48,268 Community Development 3,304 Total Depreciation Expense - Governmental Activities 285,137$

Business-type Activities Capital asset activity for Business-type Activities for the year ended June 30, 2012 is as follows (in thousands):

Balance Additions/ Deductions/ BalanceBusiness-type Activities June 30, 2011 Transfers Transfers June 30, 2012

Capital Assets Not Depreciated Land 2,357,216$ 52,000$ (3,751)$ 2,405,465$ Construction in Progress 4,316,865 2,203,612 (1,814,792) 4,705,685 Intangible Assets 65,793 4,053 -- 69,846

Total Capital Assets Not Depreciated 6,739,874 2,259,665 (1,818,543) 7,180,996

Capital Assets Depreciated Buildings, Facilities and Equipment 31,310,422 2,411,954 (90,653) 33,631,723 Leased Property and Improvements 9,500 -- -- 9,500

Total Capital Assets Depreciated 31,319,922 2,411,954 (90,653) 33,641,223

Less: Accumulated Depreciation Buildings, Facilities and Equipment (14,053,755) (960,216) 76,002 (14,937,969)

Capital Assets Depreciated, Net 17,266,167 1,451,738 (14,651) 18,703,254

Natural Gas Field, Net 256,622 65,448 (29,064) 293,006

Nuclear Fuel at Amortized Cost 44,328 18,607 (13,248) 49,687 Business-type Activities Capital Assets, Net 24,306,991$ 3,795,458$ (1,875,506)$ 26,226,943$

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NOTE 4 – DETAILED NOTES ON ALL FUNDS (Continued) Additions to accumulated depreciation are accounted for as follows (in thousands):

Depreciation expense charged to functions of business-type activities:

Airports 151,654$ Harbor 100,485 Power 394,019 Water 106,160 Sewer 155,217 Other Enterprise Fund 11,952

Capitalized depreciation expense:Power 26,537 Water 14,192

Total 960,216$

Power has direct interests in several electrical generating stations and transmission systems that are jointly owned with other utilities. Power will incur minimal operating costs related to the jointly owned facilities, regardless of the amount or its ability to take delivery of its share of energy generated. Power’s proportionate share of the operating costs of the joint plants is included as part of operating expenses. The following schedule shows the ownership interest in each jointly owned utility plant as included in capital assets in the statement of net assets at June 30, 2012:

Plant in ServiceShare of (in thousands)

Ownership Capacity AccumulatedInterest (megawatts) Cost Depreciation

Palo Verde Nuclear Generating Station 5.7 % 224 602,408$ 374,273$ Navajo Generating Station 21.2 477 345,952 312,378 Mohave Generating Station 10.0 -- 64,639 57,852 Pacific Intertie DC Transmission Line 40.0 1,240 186,301 54,171 Other Transmission Systems -- various 89,205 52,027

Total 1,288,505$ 850,701$

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NOTE 4 – DETAILED NOTES ON ALL FUNDS (Continued) F. Interfund Receivables, Payables, and Transfers The following tables are summaries of the City’s interfund balances at June 30, 2012 (in thousands): Due From/To Other Funds

Receivable Fund Payable Fund Amount

General Community Development 4,068$ MICLA Special Revenue 3,103 Proposition A Local Transit Assistance 465 Recreation and Parks 559 Other Governmental Funds 36,012 Sewer 22

44,229

Community Development General 326 Other Governmental Funds 1

327

Recreation and Parks General 1 Other Governmental Funds 1,118

1,119

Solid Waste Resources General 9,723 Recreation and Parks 446 Other Governmental Funds 29

10,198

Other Governmental Funds General 26,371 Community Development 101 MICLA Special Revenue 41 Recreation and Parks 12 Other Governmental Funds 58,758

85,283

Airports General 793

Harbor General 4,601

Water Power 64,978

Sewer General 6,152 Recreation and Parks 4

6,156

Total 217,684$

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NOTE 4 – DETAILED NOTES ON ALL FUNDS (Continued) The receivable balance of the General Fund from the various governmental funds resulted from transfers from the Reserve Account as short-term loan to cover tardy receipts of revenues, while the payable balance is composed primarily of encumbered and unexpended budgetary transfers for certain costs allocated to the various funds. The Water Enterprise Fund’s receivable from the Power Enterprise Fund is related to outstanding costs of certain services provided by the fund. The receivable balance of Sewer Enterprise Fund pertains to related cost reimbursements as of June 30, 2012. The receivable balance of the Airports Enterprise Fund from the General Fund pertains to the current portion of two cases that were settled related with the FAA audit findings of improper payments made by Airports to the City’s General Fund discussed in Note 5C on page 163, while the receivable balance of the Harbor Enterprise Fund from the General Fund is related to the current portion of a litigation settlement discussed in Note 5C on page 169. Advances To/From Other Funds

Receivable Fund Payable Fund Amount

General Other Governmental Funds 11,310$ Other Enterprise Fund 9

11,319

Other Governmental Funds General 321 Recreation and Parks 841 Other Governmental Funds 67,890

69,052

Airports General 14,657

Harbor General 14,658

Sewer General 6,092 Other Governmental Funds 2,488

8,580

Agency Funds Other Governmental Funds 31,163

Total 149,429$

The above balances represent interfund borrowings payable beyond one year. Advances from General Fund represents Reserve Fund borrowings to cover temporary revenue shortfall. The $67.9 million advances from other governmental funds are mainly for funding of transportation activities and projects. The payable balance of the General Fund to the Airports Enterprise Fund pertains to the noncurrent portion of two cases that were settled related with the FAA audit findings of improper payments made by Airports to the City’s General Fund discussed in Note 5C on page 163, while the payable balance of the General Fund to the Harbor Enterprise Fund is related to the noncurrent portion of a litigation settlement discussed in Note 5C on page 169.

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Interfund Transfers

Transfers In Transfers Out AmountGeneral MICLA Special Revenue 15,000$

MICLA Debt Service 8 Other Governmental Funds 5,575 Power 250,077

270,660

Community Development Other Governmental Funds 8,405

MICLA Debt Service General 145,957 MICLA Special Revenue 138,556 Other Governmental Funds 23,774

308,287 Proposition A Local Transit Assistance Improvement General 11

Recreation and Parks General 148,616 Other Governmental Funds 110

148,726

Other Governmental Funds General 191,752 Community Development 4,388 Proposition A Local Transit Assistance Improvement 3,411 Solid Waste Resources 39,902 Other Governmental Funds 29,108

268,561

Total 1,004,650$

Transfers are used to 1) move revenues from the fund that statute or budget requires to collect them to the fund that statute or budget requires to expend them; 2) move receipts restricted to debt service from the funds collecting the receipts to the debt service fund as debt service payments become due; 3) use unrestricted revenues collected in the General Fund to finance various programs accounted for in other funds in accordance with budgetary authorizations; and 4) move unrestricted revenues collected in certain enterprise funds to partially finance various programs in the General Fund in accordance with budgetary authorizations. In fiscal year 2012, significant transfers include the following: 1) $250.1 million from the Power Enterprise Fund to the General Fund; 2) interfund transfers to and from MICLA, and various other funds to provide funding for debt service requirements and capital projects; 3) $148.6 million from the General Fund to fund the operation and maintenance of parks and various recreation facilities or activities; 4) $191.8 million budget allocation from the General Fund to finance various departmental programs including $89.2 million to the Library Department and $47.9 million to partially finance debt service payments; 5) $39.9 million from Solid Waste Resources primarily for debt service payments; and 6) $29.1 million to fund various projects related to transportation and parks and recreation activities.

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NOTE 4 – DETAILED NOTES ON ALL FUNDS (Continued) G. Accounts Payable and Accrued Expenses The primary government’s accounts payable and accrued expenses at June 30, 2012 are broken down as follows (in thousands):

Governmental Business-typeActivities Activities

Accounts, Contracts and Retainage Payable 236,949$ 653,149$ Accrued Salaries and Overtime Payable 129,937 72,386 Intergovernmental Payable 3,894 -- Other Current Liabilities (excluding workers compensation, claims, and pollution remediation liability) -- 242,655

Total 370,780$ 968,190$

H. Long-term Liabilities Governmental Activities

Changes in Long-term Liabilities

The changes in the governmental activities long-term liabilities for the year ended June 30, 2012 are as follows (in thousands):

Balance Balance Due WithinJune 30, 2011 Additions Deductions June 30, 2012 One Year

General Obligation Bonds 1,255,830$ 602,510$ (642,725)$ 1,215,615$ 112,330$ Judgment Obligation Bonds 64,005 -- (6,185) 57,820 6,460 Certificates of Participation and Lease Revenue Bonds 1,945,010 248,260 (246,045) 1,947,225 132,555 Commercial Paper Notes 206,173 63,000 (127,976) 141,197 --Special Assessment and Revenue Bonds 421,805 -- (32,105) 389,700 33,415 Subtotal Bonds and Notes 3,892,823 913,770 (1,055,036) 3,751,557 284,760 Add: Unamortized Net Premium and Deferred Charges 65,461 66,488 (10,404) 121,545 --

Total Bonds and Notes 3,958,284 980,258 (1,065,440) 3,873,102 284,760 Loans Payable to HUD 157,781 52,521 (5,907) 204,395 13,332 Compensated Absences 528,062 27,111 (6,941) 548,232 37,906 Claims and Judgments 2,108,234 258,797 (236,307) 2,130,724 259,807 Landfill Liability 46,159 -- (253) 45,906 -- Estimated Pollution Remediation Liability 7,076 11,973 (12,281) 6,768 4,538 Accrued Retirement Benefits 39,358 -- (39,358) -- -- Net Pension Liability 58,821 -- (3,345) 55,476 --Net OPEB Liability 99,352 27,672 -- 127,024 --

Governmental Activities Long-term Liabilities 7,003,127$ 1,358,332$ (1,369,832)$ 6,991,627$ 600,343$

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General Obligation Bonds (GO Bonds)

The voter authorizations for general obligation bonds are summarized as follows (in thousands):

Amount AmountElection Amount Issued as of Authorized

Date Project Authorized June 30, 2012 But Unissued

April 1989 Branch Library Facilities 53,400$ 53,400$ --$ April 1989 Police Facilities 176,000 176,000 -- April 1989 Fire Safety Facilities 60,000 60,000 -- June 1990 Seismic Safety Projects 376,000 376,000 -- November 1998 Library Facilities 178,300 178,300 -- November 1998 Zoo Facilities 47,600 47,600 -- November 2000 Fire, Paramedic, Helicopter and

Animal Shelter Projects 532,648 532,648 -- March 2002 Emergency Operations, Fire,

Dispatch and Police Facilities 600,000 600,000 -- November 2004 Stormwater Projects 500,000 439,500 60,500

Total 2,523,948$ 2,463,448$ 60,500$

The bonds are general obligations of the City payable as to principal and interest from proceeds of ad valorem taxes that may be levied, without limitation as to rate or amount, upon property subject to taxation by the City. The GO bonds outstanding as of June 30, 2012 and the original amounts issued are as follows (in thousands):

Final Interest Rates Original OutstandingMaturity (Percentage) Amount Balance

Series 1998-A, Refunding 9/1/15 4.00% - 5.25% 119,990$ 44,910$ Series 2002-A 9/1/22 2.50 - 5.25 262,200 39,330 Series 2002-B, Refunding 9/1/14 2.00 - 5.00 79,055 42,815 Series 2003-A 9/1/23 3.00 - 6.00 233,365 23,340 Series 2003-B, Refunding 9/1/13 3.625 - 6.00 77,345 13,425 Series 2004-A 9/1/24 3.00 - 5.00 360,540 54,075 Series 2005-A 9/1/25 3.00 - 5.00 126,800 25,360 Series 2005-B, Refunding 9/1/20 3.00 - 5.00 73,080 72,500 Series 2006-A 9/1/26 4.00 - 5.00 71,023 52,650 Series 2008-A 9/1/28 3.75 - 5.00 101,000 85,850 Series 2009-A 9/1/23 1.50 - 4.00 123,550 105,900 Series 2009-B 9/1/29 5.50 - 5.65 52,950 52,950 Series 2011-A 9/1/31 1.50 - 5.00 117,000 117,000 Series 2011-B, Refunding 9/1/23 2.00 - 5.00 259,660 259,660 Series 2012-A, Refunding 9/1/25 5.00 225,850 225,850

Total 2,283,408$ 1,215,615$

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NOTE 4 – DETAILED NOTES ON ALL FUNDS (Continued) Annual debt service requirements to maturity for the general obligation bonds are as follows (in thousands):

Fiscal Year Principal Interest Total

2013 112,330$ 52,146$ 164,476$ 2014 111,345 49,350 160,695 2015 104,205 44,685 148,890 2016 97,350 40,176 137,526 2017 86,565 35,930 122,495 2018-2022 420,735 118,722 539,457 2023-2027 217,260 38,156 255,416 2028-2032 65,825 6,355 72,180

Subtotal 1,215,615 385,520 1,601,135 Net Unamortized Premium and Deferred Charges 73,059 -- 73,059 Total 1,288,674$ 385,520$ 1,674,194$

Judgment Obligation Bonds (JOBs)

The City issued JOBs in June 2009 and June 2010 to pay for judgments related to civil rights violations and claims under the Fair Labor Standards Act. The judgment obligation bonds outstanding at June 30, 2012, and the original amounts issued are as follows (in thousands):


Series 2009-A 6/1/19 2.00% - 5.00% 20,600$ 15,170$ Series 2010-A 6/1/20 4.00 - 5.00 50,875 42,650 Total 71,475$ 57,820$

Annual debt service requirements to maturity for the judgment obligation bonds are as follows (in thousands):

Fiscal Year Principal Interest Total2013 6,460$ 2,570$ 9,030$ 2014 6,785 2,247 9,032 2015 7,055 1,973 9,028 2016 7,340 1,691 9,031 2017 7,635 1,397 9,032 2018-2020 22,545 2,005 24,550 Subtotal 57,820 11,883 69,703 Net Unamortized Premium and Deferred Charges 2,559 -- 2,559 Total 60,379$ 11,883$ 72,262$

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Certificates of Participation and Lease Revenue Bonds

In 1984, the Mayor and the City Council directed that a lease-purchase program for equipment be established. This program was subsequently expanded to include real property projects. A nonprofit corporation, the Municipal Improvement Corporation of Los Angeles (MICLA) was created to serve as the lessor. The City and MICLA have entered into a number of lease-purchase programs funded through the sale of certificates of participation and lease revenue bonds. During the year, MICLA lease revenue bonds totaling $248.3 million were issued to finance and refinance costs associated with the acquisition of certain capital equipment, construction and improvement of certain real property, and to prepay all or a portion of certain outstanding certificates of participation. The aggregate outstanding balance at June 30, 2012 and the aggregate original amount issued for MICLA’s certificates of participation and lease revenue bonds are as follows (in thousands):

Final Original OutstandingMaturity Interest Rates Amount Balance

MICLA Various Projects Various dates 1.500% - 7.842% 1,923,340$ 1,528,300$ through 2042

The City has pledged, as security for bonds issued by MICLA, revenues consisting of basic lease payments pursuant to the equipment lease agreements and earnings from investment of money held. The City includes all necessary MICLA lease payments in its annual budget appropriations. Principal and interest paid by MICLA for the current year totaled $166.5 million, while revenue from leases received and investment earnings totaled $177.7 million. Annual debt service requirements to maturity for MICLA certificates of participation and lease revenue bonds are as follows (in thousands):


2013 99,120$ 70,577$ 169,697$ 2014 103,245 68,585 171,830 2015 83,305 64,425 147,730 2016 67,600 61,090 128,690 2017 68,265 58,054 126,319 2018 - 2022 337,680 237,749 575,429 2023 - 2027 252,080 164,081 416,161 2028 - 2032 217,615 102,897 320,512 2033 - 2037 245,275 47,999 293,274 2038 - 2042 54,115 4,813 58,928

Subtotal 1,528,300 880,270 2,408,570 Net Unamortized Premium and Deferred Charges 43,611 -- 43,611

Total 1,571,911$ 880,270$ 2,452,181$

Please see Note 4I on pages 135 to 136 for additional information on refunding bonds.

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NOTE 4 – DETAILED NOTES ON ALL FUNDS (Continued) The City entered into a lease-purchase agreement with the Los Angeles Convention and Exhibition Center Authority, a joint powers authority between the City and the County, for the construction and expansion of the Los Angeles Convention Center. Certificates of participation debt were issued to provide funding for the expansion of the Los Angeles Convention Center which is owned and operated by the City. The Authority also issued lease revenue bonds to partially finance the City’s share for the development of the Staples Center. Bond payments are secured primarily by revenues from base rental payments and revenues earned by the facility. Principal and interest paid for the current year and revenues were $52.3 million and $79.7 million, respectively. The Convention Center certificates of participation and lease revenue bonds outstanding at June 30, 2012, and the original amounts issued are as follows (in thousands):


1998 Series A 8/15/24 6.500% - 7.125% 45,580$ 32,465$ 2003 Series A, Refunding 8/15/15 2.000 - 5.000 226,045 133,400 2008 Series A, Refunding 8/15/22 4.250 - 5.125 253,060 253,060

Total 524,685$ 418,925$

Annual debt service requirements to maturity for the Convention Center lease revenue bonds are as follows (in thousands):


2013 33,435$ 18,833$ 52,268$ 2014 34,490 17,710 52,200 2015 35,660 16,463 52,123 2016 36,965 15,082 52,047 2017 37,555 13,413 50,968 2018 - 2022 218,040 36,016 254,056 2023 - 2025 22,780 1,448 24,228

Subtotal 418,925 118,965 537,890 Net Unamortized Premium and Deferred Charges (12,384) -- (12,384)

Total 406,541$ 118,965$ 525,506$

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Commercial Paper Notes

In April 2004, the Mayor and City Council approved a $200.0 million MICLA Commercial Paper Lease Financing Program. In December 2009, the Mayor and City Council increased the program by $100.0 million. This program supplements the MICLA equipment and real property lease program, and allows MICLA to access financial markets quickly; to obtain flexible, short-term maturities; to borrow only those amounts needed as invoices are received; and to borrow at more favorable rates. The notes issued mature at a specific time between one and 270 days of issuance. Upon maturity, they are either re-sold in the open market or refinanced with longer-term bonds. As a security to the notes, the City and MICLA entered into an asset-transfer lease agreement on certain capital assets with a carrying net book value as of June 30, 2012 of $138.2 million and estimated fair value of $347.8 million. The payment of principal and interest on the notes is further supported by irrevocable direct letters of credit issued by three commercial banks pursuant to the terms of a reimbursement agreement among MICLA, the City, and the commercial banks. At June 30, 2012, outstanding commercial paper notes amounted to $141.2 million with interest rates ranging from 0.17% to 0.20%.

Build America Bonds

The City has designed the GOB 2009-B as a “Build America Bond” under the provisions of the American Recovery and Reinvestment Act of 2009. The City expects to receive a direct subsidy of 35% of the interest due to bondholders from the United States Treasury. As of June 30, 2012, the City recorded $1.0 million of the interest subsidy as revenues on the Statement of Activities. The City has designed MICLA Series 2009-D, Series 2010-B, and Series 2010-C as “Recovery Zone Economic Development Bonds” and MICLA Series 2011-A as a “Qualified Energy Conservation Bond” under the provisions of the American Recovery and Reinvestment Act of 2009. The City expects to receive a direct subsidy of 45% and 70% of the interest due to bondholders from the United States Treasury for “Recovery Zone Economic Development Bonds” and “Qualified Energy Conservation Bond”, respectively. As of June 30, 2012, the City recorded $2.4 million of the interest subsidy as revenues on the Statement of Activities.

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Special Assessment and Revenue Bonds

The special assessment and revenue bonds outstanding at June 30, 2012, and the original amounts issued are as follows (in thousands):


Special Assessment Bonds2000 Series 3/01/20 4.70% - 5.65% 14,355$ 4,680$ 2001 Series 3/01/21 4.00 - 7.00 10,305 5,745 2002 Series 3/01/22 3.75 - 5.00 19,630 11,785 Subtotal 44,290 22,210

Parking System Revenue Bonds1999-A Series 5/01/29 4.00 - 5.25 80,975 60,755 2003-A Series 5/01/32 2.00 - 5.25 39,630 24,535 Subtotal 120,605 85,290

Solid Waste Resources Revenue Bonds

2003-A Series 2/01/16 4.50 - 5.00 47,825 24,625 2003-B Series 2/01/18 4.00 - 5.00 61,120 46,130 2004-A Series 2/01/29 5.00 56,230 33,690 2005-A Series 2/01/19 5.00 45,750 31,780 2006-A Series 2/01/24 3.75 - 5.00 58,370 51,770 2009-A Series 2/01/22 2.00 - 5.00 65,020 57,350 2009-B Series 2/01/20 2.00 - 5.00 49,485 36,855 Subtotal 383,800 282,200

Total 548,695$ 389,700$

The special assessment bonds were issued to finance the acquisition and construction of, and improvements to certain park, recreation and community facilities owned by the City. The City levies annual assessments on the parcels located within the City in an amount sufficient to provide for the debt service of the bonds. The assessments, which constitute fixed liens on the parcels, are pledged to the payment of the bonds. The City has covenanted to take all steps necessary to assure the timely collection of the assessments, including without limitation, the enforcement of delinquent assessments. Principal and interest paid for the current year and revenue from assessments excluding interest earnings were $3.0 million and $24.6 million, respectively.

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NOTE 4 – DETAILED NOTES ON ALL FUNDS (Continued) Annual debt service requirements to maturity for the special assessment bonds are as follows (in thousands):


2013 1,970$ 1,082$ 3,052$ 2014 2,060 995 3,055 2015 2,155 902 3,057 2016 2,255 802 3,057 2017 2,360 695 3,055 2018 - 2022 11,410 1,606 13,016 Total 22,210$ 6,082$ 28,292$

The parking revenue bonds were issued to finance the acquisition and construction of, and improvements to certain City parking facilities. The bonds are payable from and secured by a pledge of the parking revenues generated from parking facilities owned by the City. Principal and interest paid for the current year and parking revenues were $8.6 million and $66.8 million, respectively. Annual debt service requirements to maturity for the parking revenue bonds are as follows (in thousands):


2013 4,355$ 4,250$ 8,605$ 2014 4,545 4,061 8,606 2015 4,760 3,842 8,602 2016 4,995 3,608 8,603 2017 5,240 3,362 8,602 2018 - 2022 30,400 12,628 43,028 2023 - 2027 21,000 5,980 26,980 2028 - 2032 9,995 794 10,789 Total 85,290$ 38,525$ 123,815$

The Solid Waste Resources (formerly Sanitation Equipment Charge) revenue bonds were issued to finance the acquisition of certain equipment and construction of certain facilities for the refuse collection and disposal system of the City. The bonds are payable from and secured by a pledge of revenues, which include the solid waste collection, transfer, recycling, recovery of waste resources and disposal fees, received by the Solid Waste Resources Revenue Fund. Principal and interest paid for the current year and total solid waste resources revenue were $40.1 million and $321.4 million, respectively.

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NOTE 4 – DETAILED NOTES ON ALL FUNDS (Continued) Annual debt service requirements to maturity for the Solid Waste Resources revenue bonds are as follows (in thousands):


2013 27,090$ 12,953$ 40,043$ 2014 28,215 11,768 39,983 2015 29,485 10,519 40,004 2016 30,840 9,129 39,969 2017 32,220 7,752 39,972 2018 - 2022 114,960 17,267 132,227 2023 - 2027 16,575 2,334 18,909 2028 - 2029 2,815 213 3,028

Subtotal 282,200 71,935 354,135 Unamortized Premium 14,700 -- 14,700

Total 296,900$ 71,935$ 368,835$

Loans Payable to HUD

The Loans Payable to HUD consists of $53.2 million fixed-rate loans and $151.1 million interim financing loans. The loans will be repaid from program income generated by HOME and Community Development Block Grant entitlements and the Section 108 Loan Program Funds. The debt service requirements to maturity are as follows (in thousands):


2013 13,332$ 3,064$ 16,396$ 2014 14,405 2,800 17,205 2015 15,503 2,489 17,992 2016 14,426 2,173 16,599 2017 14,496 1,889 16,385 2018 - 2022 63,903 7,253 71,156 2023 - 2027 47,352 3,983 51,335 2028 - 2032 20,978 1,318 22,296 Total 204,395$ 24,969$ 229,364$

The interest rates on the fixed-rate loans range from 0.56% to 7.21% and have maturity dates through 2025. The interim financing loans bear interest payable quarterly at 20 basis points above the applicable London Interbank Offered Rate (LIBOR). The loans mature on various dates through 2032. The interest rate in effect (LIBOR + 0.20%) as of June 30, 2012 of 0.4432% was used in the debt service requirement schedule.

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NOTE 4 – DETAILED NOTES ON ALL FUNDS (Continued) Business-type Activities

Changes in Long-term Liabilities

The changes in the business-type activities long-term liabilities for the year ended June 30, 2012 are as follows (in thousands):

Balance Balance Due WithinJune 30, 2011 Additions Deductions June 30, 2012 One Year

Airports Revenue Bonds and Notes 3,741,257$ 47,187$ (48,300)$ 3,740,144$ 55,265$ Harbor Revenue Bonds and Loans 981,804 91,750 (132,063) 941,491 31,816 Power System Revenue Bonds and Revenue Certificates 6,565,037 -- (62,157) 6,502,880 246,582 Water System Revenue Bonds and Loans 3,213,979 638,657 (653,560) 3,199,076 63,401 Wastewater System Revenue Bonds, Notes, and Loans 2,738,897 594,300 (723,391) 2,609,806 72,412

Subtotal Revenue Bonds and Notes 17,240,974 1,371,894 (1,619,471) 16,993,397 469,476 Add (Less): Unamortized Net Discount and Deferred Charges 212,882 114,095 (24,658) 302,319 --Net Revenue Bonds and Notes 17,453,856 1,485,989 (1,644,129) 17,295,716 469,476 Compensated Absences 170,462 36,158 (43,425) 163,195 126,679 Claims and Judgments 146,941 44,100 (2,586) 188,455 42,757 Estimated Pollution Remediation Liability 141,235 11,332 (11,635) 140,932 30,063 Net Pension Liability 13,052 17,670 -- 30,722 --

Business-type Activities Long-term Liabilities 17,925,546$ 1,595,249$ (1,701,775)$ 17,819,020$ 668,975$

Airports Revenue Bonds and Notes

Revenue bonds, revenue refunding bonds, and commercial paper notes outstanding at June 30, 2012, and the original amounts issued are as follows (in thousands):


Fixed rate revenue bonds 2040 2.00% - 7.053% 3,768,855$ 3,577,945$ Commercial paper notes -- variable 162,199 162,199 Subtotal 3,931,054$ 3,740,144

Net unamortized premiums, discounts, and debt related costs 64,926

Net revenue bonds and notes 3,805,070$

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NOTE 4 – DETAILED NOTES ON ALL FUNDS (Continued) Airports bonds are subject to optional and mandatory sinking fund redemption prior to maturity. Airports has agreed to certain covenants with respect to bonded indebtedness. Significant covenants include the requirement that Airport’s pledged revenues, as defined, shall be the security and source of payment for the bonds. Airports has received approval from the Federal Aviation Administration to collect and use passenger facility charges (PFC) to pay for debt service on bonds issued to finance the Tom Bradley International Terminal Renovations and Bradley West Projects. For fiscal year 2012, the LAWA Board authorized the use of PFC funds not to exceed $25.2 million for this purpose. The authorized amount was used for debt service. The total principal and interest remaining to be paid on the bonds is $6.9 billion. Principal and interest paid during fiscal year 2012 and the net pledged revenues (as defined and including the $25.2 million PFC funds discussed in the preceding paragraph), were $236.4 million and $312.8 million, respectively. Airport’s pledged revenue coverage is found in the Statistical Section-Debt Capacity on page 342. Scheduled annual principal maturities and interest are as follows (in thousands):

Fiscal Year Principal Interest Total2013 55,265$ 186,022$ 241,287$ 2014 64,630 183,511 248,141 2015 69,840 180,442 250,282 2016 72,375 177,270 249,645 2017 75,795 173,871 249,666 2018 - 2022 439,495 809,185 1,248,680 2023 - 2027 559,010 683,090 1,242,100 2028 - 2032 690,525 522,332 1,212,857 2033 - 2037 892,955 319,906 1,212,861 2038 - 2040 658,055 69,666 727,721

Subtotal 3,577,945 3,305,295 6,883,240 Net Unamortized Premium, Discount, and Deferred Charges 64,926 -- 64,926

Total 3,642,871$ 3,305,295$ 6,948,166$

The above schedule does not include the commercial paper notes that are assumed to be renewed or refinanced on a long-term basis. Build America Bonds Certain Airports revenue bonds with par amounts totaling $366.8 million were issued as federally taxable Build America Bonds (BABs) under the American Recovery and Reinvestment Act of 2009. Airports will receive a direct federal subsidy payment in the amount equal to 35% of the interest expense on the BABs. The interest subsidy on the BABs was $8.3 million in fiscal year 2012. The subsidy is recorded as a noncapital grant, a component of other nonoperating revenue.

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Harbor Revenue Bonds and Loans

Revenue bonds, revenue refunding bonds, notes and loans outstanding at June 30, 2012, and the original amounts issued are as follows (in thousands):


Fixed rate revenue bonds 2040 2.00% - 5.50% 1,328,675$ 840,125$

Commercial paper notes -- variable 100,000 100,000 Loans from CDBW 2015 4.50% 8,000 1,366 Subtotal 1,436,675$ 941,491

Net unamortized premiums, discounts, and debt related costs 26,637 Net revenue bonds, notes and loans 968,128$

Revenue bonds and refunding bonds are collateralized by the future revenues of the Harbor Enterprise Fund. Principal and interest paid for the current year and net pledged revenue were $71.4 million and $219.4 million, respectively. Information on Harbor’s pledged revenue coverage is found in the Statistical Section-Debt Capacity on page 342. On November 1, 2001, Harbor obtained a credit agreement to provide liquidity support for the issuance of commercial paper notes not to exceed $375.0 million to be used as interim financing primarily for construction, maintenance, and replacement of structures, facilities and equipment. In June 2009, Harbor reinstated its Commercial Paper Notes Program (Program) at an aggregate amount of $100.0 million. The Program was amended in June 2010 to increase the credit limit to $200.0 million, and extended the term to July 29, 2012. In June 2012, Harbor increased the credit limit for its Program to $250.0 million, and extended the term to July 2015. The outstanding loans were obtained from the California Department of Boating and Waterways. Harbor’s obligation with respect to paying such loans is subordinate to the lien of the Harbor’s parity obligations on the revenue bonds. Scheduled annual principal maturities and interest are as follows (in thousands):

Fiscal Year Principal Interest Total2013 31,816$ 41,481$ 73,297$ 2014 33,325 39,943 73,268 2015 34,445 38,272 72,717 2016 36,175 36,515 72,690 2017 37,970 34,713 72,683 2018-2022 222,160 142,586 364,746 2023-2027 268,170 79,518 347,688 2028-2032 62,045 37,919 99,964 2033-2037 79,855 19,910 99,765 2038-2040 35,530 2,862 38,392 Subtotal 841,491 473,719 1,315,210 Net Unamortized Premium, Discount, and Deferred Charges 26,637 -- 26,637 Total 868,128$ 473,719$ 1,341,847$

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NOTE 4 – DETAILED NOTES ON ALL FUNDS (Continued) In August 2011, Harbor issued Refunding Bonds Series A and B for $58.9 million and $32.8 million respectively. The net proceeds were used to refund $64.9 million and $32.8 million outstanding principal of the 2001 Refunding Bonds Series B and Series A, respectively. Please see Note 4I on pages 135 to 136 for additional information on refunding bonds.

Power System Bonds and Revenue Certificates

Revenue bonds and revenue refunding bonds due serially in varying annual amounts are as follows (in thousands):


Fixed rate revenue bonds 2046 2.188% - 5.583% 5,467,731$ 5,333,580$ Variable rate revenue bonds 2036 variable 1,169,300 969,300 Revenue certificates -- variable 200,000 200,000 Subtotal 6,837,031$ 6,502,880

Net unamortized premiums, discounts, and debt related costs 98,171 Net revenue bonds and notes 6,601,051$

Revenue bonds are generally callable 10 years after issuance. DWP has agreed to certain covenants with respect to bonded indebtedness. Significant covenants include the requirement that the Power Enterprise Fund’s net income, as defined, will be sufficient to pay certain amounts of future annual bond interest and of future annual aggregate bond interest and principal maturities. Revenue bonds and refunding bonds are collateralized by the future revenues of the Power Enterprise Fund. The variable rate bonds totaling $969.3 million currently bear interest at weekly and daily rates ranging from 0.15% to 0.17% as of June 30, 2012. Power can elect to change the interest rate period of the bonds with certain limitations. The bondholders have the right to tender the bonds to the tender agent on any business day with seven days’ prior notice. Power has entered into standby and line of credit agreements with a syndicate of commercial banks in an initial amount of $580.8 million and $388.5 million to provide liquidity for the variable rate bonds. The extended standby agreements expire in January 2015 for the $580.8 million and in June 2014 for the $388.5 million. Under the agreements, the $580.8 million variable rate bonds will bear interest that is payable quarterly at the greatest of: (a) the Prime Rate plus 1.00% (b) the Federal Funds Rate plus 2.00% and (c) 7.50%, while the $388.5 million variable rate bonds will bear interest that is payable quarterly at the greatest of: (a) the Prime Rate plus 2.00%; (b) the Federal Funds Rate plus 2.00%; (c) the Daily One-Month LIBOR plus 0.50%; and (d) 7.50%. The unpaid principal of each liquidity advance made by the liquidity provider is payable in ten equal semi-annual installments ninety days immediately following the related liquidity advance.

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NOTE 4 – DETAILED NOTES ON ALL FUNDS (Continued) At its discretion, Power has the ability to convert the outstanding bonds to fixed rate obligations, which cannot be tendered by the bondholders. The variable rate bonds have been classified as long-term on the balance sheets as the liquidity facilities give Power the ability to refinance on a long-term basis and Power intends to either renew the facility or exercise its right to tender the debt as a long-term financing. The portion that would be due in the next fiscal year in the event that the outstanding variable rate bonds were tendered and purchased by the commercial banks under the standby agreements has been included in the current portion of long-term debt and was $96.9 million at June 30, 2012. DWP entered into a letter of credit and reimbursement agreement with a commercial bank in the amount of $200.0 million to provide liquidity and credit support for the commercial paper program. Principal and interest paid for the current year and net pledged revenue were $407.5 million and $1,032.2 million, respectively. Information on Power’s pledged revenue coverage is found in the Statistical Section-Debt Capacity on page 342.

Scheduled annual principal maturities and interest are as follows (in thousands):

Fiscal Year Principal Interest Total2013 129,651$ 306,153$ 435,804$ 2014 131,575 300,546 432,121 2015 142,578 293,707 436,285 2016 145,865 286,684 432,549 2017 149,235 280,348 429,583 2018-2022 809,930 1,299,273 2,109,203 2023-2027 986,947 1,086,912 2,073,859 2028-2032 1,109,184 825,980 1,935,164 2033-2037 1,100,130 582,564 1,682,694 2038-2042 976,645 318,606 1,295,251 2043-2047 621,140 63,479 684,619 Subtotal 6,302,880 5,644,252 11,947,132 Net Unamortized Premium, Discount, and Deferred Charges 98,171 -- 98,171

Total 6,401,051$ 5,644,252$ 12,045,303$

The maturity schedule presented above reflects the scheduled debt service requirements for Power revenue bonds. The schedule is presented assuming that the tender options on the variable rate bonds, as previously discussed, will not be exercised and that the full amount of the revenue certificates will be renewed. Should the bondholders exercise the tender options and Power convert all of the revenue certificates under the line of credit, Power would be required to redeem the $1,169.3 million in variable rate bonds outstanding over the next six years, as follows: $116.9 million in fiscal year 2013, $233.9 million in each of the fiscal years 2014 through 2017, and $116.9 million in fiscal year 2018. Accordingly, the balance sheets recognize the possibility of the exercise of the tender options and reflect the $116.9 million that could be due in fiscal year 2013 as a current portion of long-term debt payable. Interest and amortization include interest requirements for variable rate bonds, using the variable debt interest rate in effect at June 30, 2012 of 0.144%.

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Water System Bonds and Loans

Revenue bonds, revenue refunding bonds due serially in varying annual amounts, and other long term debt are as follows (in thousands):


Fixed rate revenue bonds 2051 3.252% - 5.245% 3,677,290$ 2,715,610$ Variable rate revenue bonds 2036 variable 325,000 325,000 Loans payable to CDWR 2033 2.292 - 2.600 236,046 158,466 Subtotal 4,238,336$ 3,199,076


Net revenue bonds, notes and loans 3,258,511$

Revenue bonds generally are callable ten years after issuance. DWP has agreed to certain covenants with respect to bonded indebtedness. Significant covenants include the requirement that Water net income, as defined, will be sufficient to pay certain amounts of future annual bond interest and of future annual aggregate bond interest and principal maturities. Revenue bonds and refunding bonds are collateralized by the future revenues of the Water Enterprise Fund. In August 2011, Water issued $307.1 million of Water System Revenue Bonds, 2011 Series A. The net proceeds of $330.3 million, net of $23.2 million issue premium and underwriter’s discount, were used to refund all of the $284.0 million outstanding Water System Revenue Bonds, 2001 Series A and a portion of the Water System Revenue Bonds, 2004 Series C amounting to $40.6 million. The transaction resulted in a net present value savings of $20.3 million and a net loss for accounting purposes of $17.1 million, which was deferred and is being amortized over the life of the new bonds. In June 2012, Water issued $276.8 million of Water System Revenue Bonds, 2012 Series A. The net proceeds of $307.5 million, inclusive of $30.8 million issue premium and net of underwriter’s discount, were used to refund all of the $300.0 million outstanding Water System Revenue Bonds, 2003 Series A. The transaction resulted in a net present value savings of $35.6 million and a net loss for accounting purposes of $10.1 million, which was deferred and is being amortized over the life of the new bonds. In June 2010, DWP entered into two loan agreements with the California Department of Water Resources (CDWR). The loan agreements allow for a total maximum loan of $46.8 million and $9.6 million, respectively, at zero percent interest rate. In fiscal year 2012, DWP received $17.2 million and $6.7 million, respectively, under the agreements. The proceeds are being used to fund water quality capital improvements. The remaining $29.6 million and $2.9 million under the agreements are expected to be received during fiscal year 2013. Water expects to begin making principal payments under these agreements beginning in fiscal year 2014.

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On June 2011, DWP entered into three loan agreements with CDWR. The loan agreements allow for a total maximum loan of $20.0 million, $10.0 million and $33.0 million, respectively, at zero percent interest rate. During the year ended June 30, 2012, DWP received the full amounts for the $20.0 million and $10.0 million loans, and $0.8 million for the $33.0 million loan. The proceeds are being used to fund water quality capital improvements. The remaining $32.2 million is expected to be received during fiscal year 2013. Water expects to begin making principal payments under these agreements beginning in fiscal year 2014.

The variable rate bonds currently bear interest at daily and weekly rates ranging from 0.10% to 0.15% as of June 30, 2012. DWP can elect to change the interest rate period of the bonds, with certain limitations. The bondholders have the right to tender the bonds to the tender agent on any business day with seven days’ prior notice. DWP has entered into standby agreements with a syndicate of commercial banks in an initial amount of $225.0 million and $100.0 million to provide liquidity for these bonds. The extended standby agreements expire in February 2015 and October 2013, respectively. Under the agreements, the $225.0 million variable rate bonds will bear interest that is payable quarterly at the greatest of: (i) Prime Rate plus 1.00%; (ii) the Federal Funds Rate plus 2.00%; and (iii) 7.50%, while the $100.0 million variable rate bonds will bear interest that is payable quarterly at the greater of: (i) the Prime Rate; or (ii) the Federal Funds Rate plus 1.00%. The unpaid principal of each liquidity advance made by the liquidity provider is payable in ten equal semi-annual installments ninety days immediately following the related liquidity advance. At its discretion, DWP has the ability to convert the outstanding bonds to fixed-rate obligations, which cannot be tendered by the bondholders. These bonds have been classified as long-term on the statement of net assets as the liquidity facilities give DWP the ability to refinance on a long-term basis and DWP intends to either renew the facilities or exercise its right to tender the debt as a long-term financing. That portion, which would be due in the next fiscal year in the event that the outstanding variable rate bonds were tendered and purchased by the commercial banks under the standby agreements, has been included in the current portion of long-term debt and was $32.5 million as of June 30, 2012. Principal and interest paid for the current year and net pledged revenue were $172.8 million and $331.1 million, respectively. Information on Water’s pledged revenue coverage is found in the Statistical Section-Debt Capacity on page 343.

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NOTE 4 – DETAILED NOTES ON ALL FUNDS (Continued) Scheduled annual principal maturities and interest are as follows (in thousands):


2013 30,901$ 157,838$ 188,739$ 2014 33,905 155,551 189,456 2015 36,649 154,175 190,824 2016 45,576 152,361 197,937 2017 51,661 150,455 202,116 2018-2022 287,429 717,870 1,005,299 2023-2027 359,082 642,797 1,001,879 2028-2032 443,680 554,927 998,607 2033-2037 535,219 443,826 979,045 2038-2042 676,004 285,153 961,157 2043-2047 425,860 130,320 556,180 2048-2052 273,110 28,039 301,149

Subtotal 3,199,076 3,573,312 6,772,388 Net Unamortized Premium, Discount, and Deferred Charges 59,435 -- 59,435 Total 3,258,511$ 3,573,312$ 6,831,823$

The maturity schedule presented above reflects the scheduled debt service requirements for all of Water’s long-term debt. The schedule is presented assuming that the tender options on the variable rate bonds, as previously discussed, will not be exercised. Should the bondholders exercise the tender options, Water could be required to redeem the $325.0 million in variable rate bonds outstanding over the next six fiscal years as follows: $32.5 million in fiscal year 2013, $65.0 million in each of the fiscal years 2014 through 2017, and $32.5 million in fiscal year 2018. Accordingly, the statement of net assets recognize the possibility of the exercise of the tender options and reflect the $32.5 million that could be due in fiscal year 2013 as a current portion of long-term debt payable. The above schedule includes interest requirements for the variable rate debt over the regularly scheduled maturity period at the interest rate in effect at June 30, 2012 of 0.14% for tax-exempt bonds. Should the tender options be exercised, the interest would be payable at the rate in effect at the time the standby agreements are activated.

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Wastewater System Revenue Bonds, Notes, and Loans

Revenue bonds, revenue refunding bonds, commercial paper notes, and loans outstanding at June 30, 2012, and the original amounts issued are as follows (in thousands):


Fixed rate revenue bonds 2040 1.00% - 6.00% $ 3,047,910 $ 2,173,185 Variable rate revenue bonds 2032 variable 444,600 280,860 Loans payable to SWRCB 2024 1.80 219,081 155,761 Subtotal $ 3,711,591 2,609,806


Net revenue bonds and notes $ 2,662,956

Wastewater revenue bonds and commercial paper notes are issued under Senior Lien and Subordinate Lien General Resolutions dated November 10, 1987 and March 26, 1991, respectively, with a total authorization of $3.5 billion. Proceeds of wastewater revenue bonds and notes are restricted for the funding of the costs of construction, replacement and improvement of the sewerage system of the City. Under the terms of the General Resolution, the City has pledged the Sewer Enterprise Fund (Sewer) revenues, as defined, to secure the payment of all bonds issued under the General Resolution. Certain bond agreements provide for the early redemption of the revenue bonds at the City’s option at various dates with redemption prices ranging from 100% to 102% of the principal amount of the bonds called for redemption. On April 17, 2012, Sewer issued Wastewater System Subordinate Revenue Bonds Series 2012-A in the amount of $157.1 million with interest rates ranging from 1.00% to 5.00%. The bond proceeds were used to current refund the variable rate Subordinate Series 2008A-F1 totaling $160.6 million and funded the partial termination payment of the swap agreements totaling $26.1 million. On May 2, 2012, Sewer issued Wastewater System Subordinate Revenue Bonds Series 2012-B in the amount of $253.9 million with interest rates ranging from 2.00% to 5.00%. The bond proceeds were used to advance refund the entire Senior Series 2003-A of $204.3 million and portion of the Subordinate Series 2003-B of $86.2 totaling $290.5 million. The net proceeds of $297.6 million were deposited in an irrevocable trust with an escrow agent to provide funds for the future debt service payment on the refunded bonds. On May 17, 2012, Sewer issued Wastewater System Revenue Bonds Series 2012-A and Subordinate Revenue Bonds Series 2012-C in the amount of $49.7 million with interest rate of 5.00% and $133.7 million with interest rates ranging from 4.00% to 5.00%, respectively. The bond proceeds were used to partially refund the Senior Series 2003-B of $61.7 million, Subordinate Series 2003-A of $113.3 million, and Subordinate Series 2003-B of $28.5 million totaling $203.5 million.

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NOTE 4 – DETAILED NOTES ON ALL FUNDS (Continued) Build America Bonds The City has designated the Senior Lien Bonds Series 2010-A and 2010-B as “Build America Bonds” and “Recovery Zone Economic Development Bonds”, respectively, under the provisions of the American Recovery and Reinvestment Act of 2009. The City expects to receive a direct subsidy of 35% and 45% of the interest due to bondholders from the United States Treasury for the Series 2010-A and 2010-B, respectively. As of June 30, 2012, Sewer recorded $5.9 million of the interest subsidies as current other receivables and other nonoperating revenues. Principal and interest paid for the current year and net pledged revenue were $177.2 million and $265.7 million, respectively. Information on Wastewater’s pledged revenue coverage is found in the Statistical Section-Debt Capacity on page 343. In 2003, the City adopted a resolution, approved by the Mayor, authorizing a State Revolving Fund (SRF) loan from the State Water Resources Control Board (SWRCB) in the amount of $262.9 million to assist in financing the construction of the North Outfall Sewer-East Central Interceptor Project (Project). The Project fulfills certain requirements of the Cease and Desist Order issued by the Regional Water Quality Control Board. As of June 30, 2012, the balance of the SRF loan amounted to $155.8 million. The loan is paid from Sewer’s revenues subordinate to the Wastewater System revenue bonds and commercial paper notes.

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Scheduled annual principal maturities and interest are as follows (in thousands):


2013 72,412$ 123,676$ 196,088$ 2014 74,582 120,454 195,036 2015 87,965 117,390 205,355 2016 91,238 113,826 205,064 2017 94,539 109,890 204,429 2018 - 2022 533,346 483,371 1,016,717 2023 - 2027 614,759 352,645 967,404 2028 - 2032 459,400 228,169 687,569 2033 - 2037 376,030 116,826 492,856 2038 - 2040 205,535 22,531 228,066

Subtotal 2,609,806 1,788,778 4,398,584 Net Unamortized Premium, Discount, and Deferred Charges 53,150 -- 53,150

Total 2,662,956$ 1,788,778$ 4,451,734$

Interest presented in the above schedule includes requirements for the variable rate bond using the weighted average rate of 0.16% in effect as of June 30, 2012. Fiduciary Funds The notes payable of the Pensions are secured by real estate. Interest rates range from 2.94% to 7.50% per annum. Final maturity of the notes is in June 2031. The debt service payments to maturity for these notes are as follows (in thousands):

Fiscal Year Principal Interest Total2013 520$ 11,158$ 11,678$ 2014 10,976 10,604 21,580 2015 13,443 9,629 23,072 2016 36,675 9,038 45,713 2017 81,924 5,219 87,143 2018- 2022 56,026 12,742 68,768 2023 - 2027 3,883 1,803 5,686 2028 - 2031 4,043 506 4,549

Total 207,490$ 60,699$ 268,189$

I. Current and Advance Refunding of Debt Debt refunding activities occurred during the fiscal year that resulted in the defeasance of certain outstanding obligations. The proceeds from the advance refunding issues and amounts available from the debt service funds of the refunded bonds were deposited into irrevocable trusts with escrow agents. Following are the refunding activities that represent in-substance defeasance such that the refunded debts were removed from the accompanying financial statements (in thousands):

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Cash Flow EconomicRefunding Debt Refunded Debt Savings Gain

Governmental Activities

General Obligation Bonds General Obligation Bonds 36,438$ 30,639$ Series 2011-B Series 1999-A, 2001-A,$259,660 2002-A, and 2003-A2.000% - 5.000% $287,650

4.125% - 5.000%

General Obligation Bonds General Obligation Bonds 23,491$ 19,769$ Series 2012-A Series 2004-A and 2005-A$225,850 $243,6903.000% - 5.000% 4.000% - 5.000%

MICLA Lease Revenue Bonds MICLA COP 14,892$ 11,495$ Series 2012-C Programs AQ, AR, AU, and T$109,730 $119,2701.500% - 5.000% 3.750% - 5.000%


Harbor Revenue Bonds Harbor Revenue Bonds 10,748$ 8,612$ Refunding Series 2011A Series 2001-B$58,930 $64,9253.000% - 5.000% 5.250% - 5.500%

Harbor Revenue Bonds Harbor Revenue Bonds 5,736$ 4,019$ Refunding Series 2011B Series 2001-A $32,820 $36,1804.000% - 5.000% 5.000%

Water System Revenue Bonds Water System Revenue Bonds 23,050$ 19,916$ Refunding Series 2011A Series 2001-A and certain$307,140 Series 2004-C3.000% - 5.000% $324,600

5.125% - 5.250%

Water System Revenue Bonds Water System Revenue Bonds 61,761$ 33,172$ Refunding Series 2012A Series 2003-A $276,765 $300,0005.000% 4.75% - 5.125%

Wastewater System Revenue Bonds Wastewater System Revenue Bonds 29,623$ 23,714$ Refunding Series 2012-A; and 2012-C, Subordinate Series 2003-A, Subordinate; 2003-B; $183,365 2003-B, Subordinate4.000% - 5.000% $203,460

3.250% - 5.250%

Wastewater System Revenue Bonds Wastewater System Revenue Bonds 326$ 562$ Refunding Series 2012-A, Subordinate Series 2008 A-F1 Subordinate$157,055 $160,5551.000% - 5.000% Variable

Wastewater System Revenue Bonds Wastewater System Revenue Bonds 58,232$ 35,343$ Refunding Series 2012-B, Subordinate Series 2003A; 2003B, Subordinate$253,880 $290,5002.000% - 5.000% 3.250% - 5.000%

The above refunding transactions for business-type activities resulted in a total net loss for accounting purposes of $71.4 million, which is deferred and amortized through 2044.

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NOTE 4 – DETAILED NOTES ON ALL FUNDS (Continued) J. Prior Years Defeasance of Debt In prior years, the City defeased certain bonds by placing the proceeds of the new bonds in irrevocable trusts to provide for all future debt service payments on the old bonds. Accordingly, the trust account assets and the liability for the defeased bonds are not included in the City's financial statements. At June 30, 2012, the following bonds are considered defeased (in thousands):

June 30, 2012

Governmental Activities General Obligation Bonds 465,270$ MICLA Certificates of Participation and Lease Revenue Bonds 18,870 Total 484,140$

Business-type Activities Harbor Revenue Bonds 61,340$ Power Revenue Bonds 30,585 Water Revenue Bonds 413,270 Sewer Revenue Bonds 290,500 Total 795,695$

Outstanding Balance

K. Tax and Revenue Anticipation Notes On July 12, 2011, in anticipation of receiving taxes and other revenues, the City issued a total of $1.2 billion of tax and revenue anticipation notes (TRAN) with an overall true interest cost of 0.32% and total premium of $24.4 million, depositing the proceeds in a General Fund account. The notes were issued to pay the City’s annual contributions to the Fire and Police Pension System and the Los Angeles City Employees’ Retirement System at the beginning of the fiscal year and to provide effective cash flow management of the General Fund. The additional interest earned by the pension funds from these early payments was used to discount the required City contribution without reducing the pension funds’ annual receipts. Principal and interest maturing in fiscal year 2012 were paid in that year, and principal and interest maturing on August 12, 2012, were paid in fiscal year 2013. Short–term debt activity for the fiscal year ended June 30, 2012 was as follows (in thousands):

Tax and Revenue Anticipation NotesBeginning Ending Balance Issued Redeemed Balance

Principal --$ 1,204,665$ (604,915)$ 599,750$ Interest -- 27,319 (25,528) 1,791

Total --$ 1,231,984$ (630,443)$ 601,541$

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L. Interest Rate Swaps

Wastewater System Subordinate Variable Rate Revenue Refunding Bonds Objective of the swaps. On April 6, 2006, in order to protect against the potential of rising interest rates, Sewer entered into two separate pay-fixed, receive-variable interest rate swap agreements (Swap Agreements) on the $316.8 million Wastewater System Subordinate Variable Rate Revenue Bonds Refunding Series 2006 A through D. The expected costs associated with the swaps are less than what Sewer would have paid if it had issued fixed-rate debt. On May 1, 2008, Sewer refunded Series 2006 A-D with the issuance of $314.8 million Wastewater System Subordinate Variable Rate Revenue Refunding Bonds Series 2008 A through H. The proceeds of this issue, as previously discussed, were used to current refund certain outstanding debts that included the outstanding balance of the Series 2006 A-D referred to in the preceding paragraph. The Series 2008 A-H issuance for $444.6 million exceeded the Swap Agreement’s notional amount; therefore, the Swap Agreements are only in connection with Series 2008 A-F1. On April 17, 2012, Sewer refunded the Series 2008 A-F1 and partially terminated the Swap Agreements by issuing the Series 2012-A Subordinate Bonds. As of June 30, 2012, the aggregate notional amount of the swaps was $151.1 million. The reduction is equal to the amount of the principal of the refunded bonds that would have been due and payable had the refunded Series 2008 A-F1 bonds remained outstanding to such date. The fair value and notional amounts of the interest rate swaps outstanding at June 30, 2012, classified by type, and changes in fair value for the years then ended as reported in the financial statements are as follows (in thousands):

Classification Amount Classification Amount Notional

Cash flow hedges:Interest rate Deferred outflow swaps of resources $ (1,373) Liabilities $ (38,745) $ 151,085

Changes in Fair Value Fair Value at June 30, 2012

Terms, fair values, and credit risks. Under the Swap Agreements, Sewer owes interest to the counterparties calculated on a notional amount at a fixed rate and the counterparties owe Sewer interest on the same notional amount at a variable rate. Specific terms, including the fair values and counterparty credit ratings of the outstanding swaps as of June 30, 2012, are as follows:

Notional SwapAmount Effective Fixed Rate Variable Rate Fair Value Termination Counterparty

(in thousands) Date Paid Received (in thousands) Date Credit Rating (1)

75,543$ April 6, 2006 3.34% 64.1% of LIBOR (2) (19,373)$ June 1, 2028 Aa1/AA-/AA-75,543 April 6, 2006 3.34% 64.1% of LIBOR (2) (19,373) June 1, 2028 Baa2/BBB/A+

(1) Moody's Investors Service, Standard & Poor's and Fitch Ratings, respectively as of June 30, 2012(2) One-month LIBOR reset monthly. One-month LIBOR as of June 30, 2012 was 0.25%.

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NOTE 4 – DETAILED NOTES ON ALL FUNDS (Continued) Fair Values. Because swap interest rates were lower on June 30, 2012 than at the date the Swap Agreements were entered into, the swaps have a negative fair value as of June 30, 2012. The fair values were estimated using the zero-coupon method and include accrued interest. This method calculates the future net settlement payments required by the Swap Agreements, assuming that the current forward rates implied by the yield curve correctly anticipate future spot interest rates. These payments are then discounted using the spot rates implied by the current yield curve for hypothetical zero-coupon bonds due on the date of each future net settlement on the swaps. Credit Risk. The fair values of the swaps represented Sewer’s credit exposure to the swap counterparties as of June 30, 2012. If a counterparty to a swap transaction failed to perform according to the terms of the swap contract, and Sewer chose to terminate the swap, Sewer would be owed a termination payment by the counterparty when the fair value is positive. If the swaps had a negative fair value at the time the counterparty failed to perform, Sewer would be required to make a payment to the counterparty. To mitigate credit risk, a counterparty must fully collateralize the fair value of the swap with U.S. government securities if two of its credit ratings fall below Moody’s Investors Service Aa3, or AA- of Fitch Ratings or Standard & Poor’s. Collateral would be posted with a third-party custodian, Dexia Credit Locale, New York Branch, was rated below the specified requirements as of June 30, 2012; however, no collateralization was necessary because fair value of the swap indicated that Dexia Credit Locale would not be required to make a payment to Sewer in the event of a termination at that time. Basis Risk. Sewer is exposed to basis risk when the relationship between 64.1% of LIBOR and the actual rates on the associated variable rate bonds diverge. In this situation, the expected savings may not be realized. To illustrate, as of June 30, 2012, the weighted average rate on the variable bonds was 0.159% whereas 64.1% of the LIBOR was equal to 0.158%. Termination Risk. Sewer or the counterparties may terminate the Swap Agreements if the other party fails to perform under the terms of the contract or if various other events occur. If at the time of the termination the swap has a negative fair value, Sewer would be liable to the counterparty for a payment equal to the swap’s fair value. If any of the swaps were terminated and not replaced, Sewer would not receive a payment from the counterparty to offset its variable interest expense on the associated variable rate bonds. Swap payments and associated debt. Using rates as of June 30, 2012, net swap payments and debt service requirements of the associated variable-rate debt are as follows (in thousands):

Fiscal Year Variable-Rate Bonds Interest RateEnding June 30 Principal Interest (1) Swaps, Net (2) Total

2013 --$ 241$ 4,808$ 5,049$ 2014 -- 241 4,808 5,049 2015 -- 241 4,808 5,049 2016 -- 241 4,808 5,049 2017 -- 241 4,808 5,049 2018-2022 -- 1,205 24,041 25,246 2023-2027 111,440 1,031 20,573 133,044 2028 39,645 63 1,262 40,970 Total 151,085$ 3,504$ 69,916$ 224,505$

(1) Assumes rate of 0.1549% (the weighted average rate for period beginning June 30, 2012), thereafter (2) Assumes swap rate of 3.3400% less 0.15753% (64.1% of LIBOR as of June 30, 2012), thereafter

As rates vary, variable-rate bond interest payments and net swap payments will vary.

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NOTE 4 – DETAILED NOTES ON ALL FUNDS (Continued) M. Electricity Swap and Forward Contracts In order to obtain the highest market value on energy that is sold into the wholesale market, DWP monitors the sales price of energy, which varies based on which hub the energy is to be delivered. There are three primary hubs within DWP’s transmission region: Palo Verde, California Oregon Border, and Mead. DWP enters into various locational swap transactions with other electric utilities in order to effectively utilize its transmission capacity and to achieve the most economical exchange of energy purchased and sold. DWP procures renewable energy resources located remotely. These resources provide intermittent and limited source of energy and these resources are not directly connected to DWP’s transmission system. In order to receive firm renewable energy, DWP entered into a green for green energy exchange with the same or different Renewable Energy Credit source. DWP enters into power and natural gas forward contracts in order to meet the electricity requirements to serve its customers. To assist DWP in achieving its Renewable Portfolio Standards (RPS) goal of 20%, some of the forward purchases made are renewable energy and biomethane gas. DWP does not enter into swap and forward transactions for trading purposes. All of these transactions are intended to be used in the DWP’s normal course of operations. DWP is exposed to risk of nonperformance if the counterparties default or if the swap agreements are terminated. As of June 30, 2012, DWP had the following Electricity Swap and Forward Contracts, which are not recorded in DWP’s financial statements based on the criteria in GASB No. 53:

NotionalAmount Cash

(total Contract First Last Fair paid atcontract price range effective Termination Value inception

Description quantities) dollar per unit date Date (in thousands) (in thousands)

Electricity swaps: Purchases 325,760 MW $ 29.00 - 34.75 07/01/12 12/31/12 (10,101)$ --$ Sales 325,760 MW 33.31 - 35.50 07/01/12 12/31/12 10,953 --

Forward contracts: Electricity 260,274 MW 12.00 - 47.98 07/01/12 06/30/13 604 -- Natural gas 50,314,600 MMBtu 5.49 - 10.85 07/01/12 10/31/21 (295,805) --

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NOTE 4 – DETAILED NOTES ON ALL FUNDS (Continued) N. Leases Governmental Activities The City leases a significant amount of property and equipment under operating leases. Total rental expenditures, incurred primarily in the General Fund, on the operating leases for the fiscal year ended June 30, 2012 were approximately $25.8 million. The future lease payments under non-cancellable operating lease agreements are as follows (in thousands):

Fiscal Year Ending June 302013 8,564$ 2014 7,089 2015 6,296 2016 6,031 2017 6,010 2018 - 2022 24,134 2023 - 2027 23,256 2028 - 2032 16,466 2033 - 2037 6,975 2038 - 2042 8,087 2043 - 2047 9,374 2048 - 2052 10,868 2053 - 2057 7,124

Total 140,274$

The City also leases certain property and equipment under capital leases with the following component units/funds.

Municipal Improvement Corporation of Los Angeles

The MICLA was formed to finance certain capital improvement projects of the City and enter into long-term capital lease agreements with the City. Under the lease agreements, title transfers to the City at the end of the lease term. If the City defaults under the Lease and Trust Agreements, the Trustee may terminate the lease and re-let the properties. Since MICLA is included in the City's reporting entity, the lease payments by the City are accounted for in the fund financial statements as transfers from the General Fund and certain Special Revenue Funds to the MICLA Debt Service Fund. The leases have been eliminated in the government-wide financial statements.

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Los Angeles Convention and Exhibition Center Authority

Pursuant to a Facility Lease between the City and the Los Angeles Convention and Exhibition Center Authority (Authority), the Authority issued certificates of participation to provide financing for the acquisition and construction of certain improvements for the Los Angeles Convention Center, and taxable lease revenue bonds to finance the City’s share of the development of the Staples Center. Under the lease, the City is obligated to make rental payments sufficient to pay the debt service requirements on the certificates and bonds. The City’s General Fund made rental payments during fiscal year ended June 30, 2012. Since the Authority is included within the City's reporting entity, the lease payments by the City are accounted for in the fund financial statements as transfers from the General Fund to the Convention Center Debt Service Fund. The leases were eliminated in the government-wide financial statements. Business-type Activities

Airports

Airports has entered into numerous rental agreements with concessionaires for food and beverage, gift and news, duty-free, rental car facilities, and advertisements. In general, the agreements provide for cancellation on a 30-day notice by either party; however, they are intended to be long-term in nature with renewal options. Accordingly, these agreements are considered operating leases for purposes of financial reporting. The agreements provide for a concession fee equal to the greater of a minimum annual guarantee (MAG) or a percentage of gross revenues. Certain agreements are subject to escalation of the MAG. For fiscal year 2012, revenues from such agreements were approximately $210.7 million, which is $54.0 million over MAG. Minimum future rents under these agreements over the next five years, assuming that current agreements are carried to contractual termination, are as follows (in thousands):

Fiscal Year Ending June 302013 124,788$ 2014 77,036 2015 47,543 2016 5,203 2017 5,160

Total 259,730$

On March 1, 2012, Airports and Westfield Concession Management, LLC (Westfield) entered into a Terminal Commercial Management Concession Agreement (3-1-12 Agreement) for Westfield to develop, lease, and manage retail, food and beverage and certain passenger services in specified locations at the Tom Bradley International Terminal (TBIT), Terminal 2, and Theme Building at LAX for a term of 17 years consisting of two-year development period and fifteen-year operational period. Westfield will select concessionaires subject to Airports approval. Concession agreements awarded by Westfield shall have a term no longer than ten years. The agreement requires Westfield and its concessionaires to invest no less than $81.9 million in initial improvements and $16.4 million in mid-term refurbishments. Such improvements are subject to Airports approval.

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NOTE 4 – DETAILED NOTES ON ALL FUNDS (Continued) Under the 3-1-12 Agreement, Westfield shall pay Airports the minimum annual guaranteed rent (MAG) of $17.7 million ($210 per square foot of concession area) in the first year of full operations. Beginning January 1, 2014, the MAG will be adjusted each year by the greater of (a) $210 per square foot escalated by the Consumer Price Index, but not greater than 2% for any year, or (b) 85% of the prior year’s Percentage Rent (as defined) paid to Airports. For any year in which the number of enplaned passengers in TBIT and Terminal 2 is (a) less than the 2011 passenger enplanements, or (b) less than 90% of the prior year’s passenger enplanements in these terminals, an additional adjustment to the MAG is calculated on a retroactive basis. On June 22, 2012, Airports and Westfield entered into another Terminal Commercial Management Concession Agreement (6-22-12 Agreement) for Westfield to develop, lease, and manage retail, food and beverage and certain passenger services in specified locations at the Terminals 1, 3, and 6 at LAX. The term of this agreement is 17 years consisting of two-year development period and fifteen-year operational period. Westfield will select concessionaires subject to Airports approval. Concession agreements awarded by Westfield shall have a term no longer than ten years. The agreement requires Westfield and its concessionaires to invest no less than $78.6 million in initial improvements and $15.7 million in mid-term refurbishments. Such improvements are subject to Airports approval. Under the 6-22-12 Agreement, Westfield shall pay Airports the minimum annual guaranteed rent (MAG) of over $17 million ($240 per square foot of concession area) in the first year of full operations. Beginning January 1, 2014, the MAG will be adjusted each year by the greater of (a) $240 per square foot escalated by the Consumer Price Index, but not greater than 2% for any year, or (b) 85% of the prior year’s Percentage Rent (as defined) paid to Airports. For any year in which the number of enplaned passengers in Terminals 1, 3, and 6 is (a) less than the 2011 passenger enplanements, or (b) less than 90% of the prior year’s passenger enplanements in these terminals, an additional adjustment to the MAG is calculated on a retroactive basis. Minimum future rents under these two agreements with Westfield over the next five years are estimated as follows (in thousands):


Total 118,647$

Airports also leases land and terminal facilities to certain airlines and others. The terms of these long-term leases range from 35 to 40 years and generally expire between 2017 and 2025. Certain airlines and consortium of airlines at LAX also pay maintenance and operating charges (M&O Charges) that include direct and indirect costs allocated to all passenger terminal buildings, other related and appurtenant facilities, and associated land. Rates for M&O Charges are set each calendar year based on the actual audited M&O Charges for the prior fiscal year ending June 30. The land and terminal lease agreements are accounted for as operating leases. For the years ended June 30, 2012, revenues from these leases were approximately $347.6 million.

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NOTE 4 – DETAILED NOTES ON ALL FUNDS (Continued) Future rents under these land and terminal lease agreements over the next five years were based on the following assumptions: (a) current agreements are carried to contractual termination, (b) airline agreements with no definitive expiry dates are carried over for the next five years, and (c) non-airline agreements with no definitive expiry dates are carried over for the next three years. The future rents are as follows (in thousands):


Total 1,685,113$

The carrying cost and the related accumulate depreciation of property held for operating leases as of June 30, 2012 are as follows (in thousands):

Buildings and facilities 1,748,987$ Less: Accumulated Depreciation (505,895)

Net 1,243,092 Land 619,246 Total 1,862,338$

Airports leases office spaces under operating lease agreements that expire through 2032. Lease payments for the fiscal year ended June 30, 2012 amounted to $4.4 million. Future minimum lease payments under these agreements are as follows (in thousands):

Fiscal Year Ending June 302013 4,644$ 2014 4,528 2015 4,528 2016 4,528 2017 4,528 2018 - 2022 15,656 2023 - 2027 8,191

2028 - 2032 8,190

Total mimimum lease payments 54,793$

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Harbor

A substantial portion of the Harbor lands and facilities are leased to others. The majority of these leases provide for cancellation on a 30-day notice by either party and for retention of ownership by the Port or restoration of the property at the expiration of the agreement; accordingly, no leases are considered capital leases for purposes of financial reporting.

Minimum Annual Guarantee Agreements (MAG) relate to shipping services and provide for the additional payment beyond the fixed portion, based upon tenant usage, revenues, or volumes. Agreements relating to terminal operations tend to be long term in nature (as long as 30 years) and are made to provide Harbor with a firm tenant commitment. These agreements are subject to periodic review and reset of base amounts. For fiscal year June 30, 2012, the minimum rental income from such lease agreements was approximately $43.1 million, while MAG payments were approximately $ 235.1 million.

The carrying cost and related accumulated depreciation of property held for operating leases as of June 30, 2012 are as follows (in thousands):

Wharves and sheds 856,960$ Cranes/bulk facilities 52,441 Municipal warehouses 11,901 Port pilot facilities and equipment 7,705 Buildings and other facilities 775,434 Cabrillo Marina 210,452

Total 1,914,893

Less - Accumulated depreciation (879,479) Net 1,035,414$

Assuming that current agreements are carried to contractual termination, minimum tenant commitments due to the Harbor over the next five years are as follows (in thousands):

Fiscal Year Ending June 30: Rental Income MAG Income2013 43,574$ 235,049$ 2014 44,010 235,049 2015 44,450 251,963 2016 44,894 251,963 2017 45,343 251,963

Total 222,271$ 1,225,987$

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Water

Water utilizes an advanced wastewater treatment facility owned by Water but is operated by and located on property leased by a separate City department. The use of this facility is accounted for as an operating lease. During fiscal year 2012, Water spent approximately $2.3 million to operate and maintain this asset, with no required minimum rental payments. However, Water is obligated to reimburse the other City department for that department’s operating and maintenance costs to operate the facility, estimated to be about $2.3 million per year, for a term of 25 years. Water will also pay additional amounts to the other City department, if revenues generated by Water exceed the costs of operation and maintenance as defined by the agreement. Water does not expect to pay such additional amounts as it does not expect that a net operating profit will be achieved based on current demand for recycled water. Fiduciary Funds

Pensions leases an office space under an operating lease agreement that expires on April 14, 2014. Lease payments for the fiscal year ended June 30, 2012 were $0.9 million. The minimum lease commitment for fiscal year ending June 30, 2013, and 2014 is $0.8 million and $0.8 million, respectively.

O. Risk Management - Estimated Claims and Judgments Payable


Because of its size and financial capacity, the City has long followed the practice of directly assuming virtually all insurable risks without procuring commercial insurance policies, except for specific exposures where legally required, contractually required or when judged to be the most cost effective method of risk financing. The extent and variety of City exposure is such that the cost of the premiums would outweigh the benefits of such coverage. The City administers, adjusts, settles, defends and pays claims from budgeted resources. Funds are budgeted annually to provide for claims and other liabilities based both on the City’s historical record of payments and an evaluation of known or anticipated claims. As discussed in the summary of significant accounting policies (Note 1E), the City recognizes a liability for claims and judgments when it is probable that an asset has been impaired or a liability has been incurred and the amount of the loss can be reasonably estimated. Included in the account are amounts for tort liability and workers’ compensation, which include Incurred But Not Reported (IBNR) liabilities, and provision for allocated expenses. As of June 30, 2012, a number of lawsuits and claims were pending against the City that arose in the normal course of the City's general governmental operations. The City estimates the amount of tort and non-tort liabilities to be probable of occurring as of June 30, 2012 at approximately $435.9 million. Of this amount, approximately $106.7 million is estimated to be payable in the next fiscal year. The City Attorney also estimates that certain pending lawsuits and claims have a reasonable possibility of resulting in additional General Fund liability totaling $952.1 million. However, no amount has been accrued in the accompanying financial statements because it is not probable that a loss has been incurred as of June 30, 2012.

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NOTE 4 – DETAILED NOTES ON ALL FUNDS (Continued) The City’s liability for tort cases was actuarially estimated. The total of the present value of the estimated outstanding losses and loss adjustment expenses was used to record the City’s liability for tort cases. The present value of the estimated outstanding losses and loss adjustment expenses was calculated based on a 3.0% yield on investments. The liability for workers’ compensation was recorded using the present value of the actuarially estimated outstanding losses, which were based on an analysis of the City’s historical loss and allocated loss adjustment expenses (ALAE). The present value of the estimated outstanding losses was calculated based on a 3.0% yield on investments. At June 30, 2012, the City estimates its workers’ compensation liability at $1,694.8 million. Of this amount, $153.1 million is estimated to be payable in the next fiscal year.

Business-type Activities Airports’ risk and claims management program implements a comprehensive risk identification, assessment and treatment process that addresses key risks that may adversely affect Airports’ ability to meet its business goals and objectives. Airports maintains insurance coverage of $1.3 billion for general liability and $1.0 billion for war and terrorism. Additional coverage is carried for general property for $1.5 billion, boiler and machinery for $250.0 million and earthquake for $25.0 million. Deductibles for these policies are $10 thousand per claim with a $0.4 million annual aggregate for general liability, and $0.1 million per occurrence and annual aggregate for general property. Historically, no liability or property claims have reached or exceeded the stated policy limits. Airports also maintains catastrophic loss fund for claims or losses that may exceed insurance policy limits. Commercial insurance is used where it is legally required, contractually required, or judged to be the most effective way to finance risk. For fiscal year 2012, no claims were in excess of Airports’ insurance coverage. Harbor purchases insurance for a variety of exposures associated with property, automobiles, vessels, railroad, employment practices, travel, police, pilotage, and terrorism. The City is self-insured for workers compensation, and Harbor participates in the City’s self-insurance program. Third party general liability exposures are self-insured by Harbor for $1.0 million and the excess liability is maintained over the self-insured retention. There have been no settlements in the past three years that have exceeded Harbor’s insurance coverage.

DWP is subject to certain business risks common to the utility industry. The majority of these risks are mitigated by external insurance coverage obtained by DWP. For other significant business risks, however, DWP has elected to self-insure. DWP believes that exposure to loss arising out of self-insured business risks will not materially impact DWP’s financial position, results of operations, or cash flows as of June 30, 2012.

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NOTE 4 – DETAILED NOTES ON ALL FUNDS (Continued) Sewer has commercial insurance for risks of physical damage to real and personal properties and for business interruption expenses. Claims settlements have not exceeded commercial insurance coverage during the last three fiscal years. The Enterprise Funds estimated claims and judgments payable of $188.4 million consists of $52.2 million litigation-type claims and $136.2 million workers’ compensation liability. The amount estimated to be payable in the next fiscal year is approximately $42.8 million. Claim Changes

The changes in the City's total estimated claims and judgments liability are as follows (in thousands):

2012 2011Unpaid Claims, July 1 2,255,175$ 2,123,626$ Provisions for current year's events and changes in provision for prior years' events 302,897 423,755 Claims payments (238,893) (292,206)

Unpaid Claims, June 30 2,319,179$ 2,255,175$

P. Accrued Landfill Liability

Until July 1996, the City operated the Lopez Canyon Sanitary Landfill under a Conditional Use Permit (CUP), which expired on July 1, 1996. State and Federal laws required the City to close the landfill upon expiration of the CUP, and to monitor and maintain the site for thirty years after closure. The City recognized a portion of the estimated closure and postclosure care costs in each fiscal year based on landfill capacity used. As of June 30, 2012, the City’s liability of $45.9 million represents 100% of the estimated closure and postclosure care costs of the landfill. The estimated costs of closure and postclosure care are subject to changes due to inflation, changes in laws and regulations, or changes in technology. As required by the California Integrated Waste Management Board (CIWMB), the City makes annual contributions to a trust fund to finance closure construction. The City is in compliance with the State requirements, and, at June 30, 2012, investments of $3.5 million are held for these purposes and are reported as Restricted Assets. The City is not currently required to advance fund postclosure care costs. The City owns or operated other landfills that were already closed before the State and Federal requirements became enforceable. Therefore, no liability was included in the financial statements for these landfills (Toyon Canyon, Gaffey, Branford, Bishops Canyon and Sheldon-Arleta). The Landfill Closure and Post-closure Maintenance Special Revenue Fund was set up to defray the closure and postclosure maintenance costs of City landfills.

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NOTE 4 – DETAILED NOTES ON ALL FUNDS (Continued) Q. Pollution Remediation Obligations


The pollution remediation obligations for governmental activities for the year ended June 30, 2012 are as follows (in thousands):

Balance BalanceJune 30, 2011 Additions Deductions June 30, 2012

Obligating EventViolation of pollution prevention-related permit or license 5,194$ 4,688$ (6,009)$ 3,873$ Voluntary commencement 1,882 7,285 (6,272) 2,895

Total 7,076$ 11,973$ (12,281)$ 6,768$

Pollution TypeSoil and/or groundwater remediation 7,011$ 11,491$ (11,779)$ 6,723$ Lead paint removal -- 199 (199) -- Methane protection 45 45 (45) 45 Asbestos removal 20 235 (255) -- Mold removal -- 3 (3) --

7,076$ 11,973$ (12,281)$ 6,768$

The $6.8 million liabilities for governmental activities, net of $3.0 million recoveries, include violation of pollution prevention-related permits or licenses and voluntary commencement of $3.9 million and $2.9 million, respectively. These obligations were determined based on construction contract amount, contract change orders, related direct costs and allocated indirect project costs. For fiscal year 2012, no remediation outlays were capitalized. Estimated expenditures for fiscal year 2013 and beyond are $4.5 million and $2.3 million, respectively. These estimates recognized potential changes due to additional work that may be required to remediate existing pollution projects, unanticipated site conditions that may necessitate modifications in project work plans, possible adoption or application of improved technologies that may require changes in estimates, and provision for additional unexpected pollution projects. Consequently, changes in estimates will be processed through change orders.

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NOTE 4 – DETAILED NOTES ON ALL FUNDS (Continued) Business-type Activities The pollution remediation obligations for business-type activities for the year ended June 30, 2012 are as follows (in thousands):

Balance Balance40724 Additions Deductions 41090

Obligating EventNamed by a regulator as a potential

party to remediation 79,995$ 10,981$ (3,759)$ 87,217$ Named in law suit and compelled to

participate in remediation 2,500 -- (2,500) -- Voluntary commencement 58,740 351 (5,376) 53,715

Total 141,235$ 11,332$ (11,635)$ 140,932$

Pollution TypeSoil and/or groundw ater remediation 134,372$ 11,332$ (11,635)$ 134,069$ Asbestos removal 6,863 -- -- 6,863

Total 141,235$ 11,332$ (11,635)$ 140,932$

Airports bears full responsibility for the cleanup of environmental contamination on property it owns. Airports accrues pollution remediation liabilities when costs are incurred or amounts can be reasonably estimated based on expected outlays. Airports has accrued estimated pollution remediation liabilities of $12.8 million at June 30, 2012. Airports does not expect any recoveries reducing this obligation. Of the $12.8 million liability, $6.9 million was incurred for cleanup of asbestos in various sites, and $5.9 million are for soil and/or groundwater contamination. There are no undeterminable pollution remediation obligations, capitalized costs and recoveries realized in fiscal year 2012. Harbor’s estimated pollution remediation liability as of June 30, 2012 totaled $104.6 million. Certain costs may be recoverable but the amount cannot be determined at this time. These costs relate mostly to soil and ground water contamination on sites within the Harbor premises. As sites were formerly used for industrial purposes, legacy contamination or environmental impairments exist. As environmental risks may be managed, Harbor has adopted the “Managed Environmental Risk” approach in estimating the remediation liability. Harbor uses a combination of in-house specialists as well as outside consultants to perform estimates of potential liability. Certain remediation contracts are included in site development plans as final uses for the sites have been identified. There were no recoveries realized in fiscal year 2012. Power has identified sites that require remediation work and is working with the Department of Toxic Substances and the Los Angeles Regional Water Quality Control Board who have jurisdiction over these sites. The estimated liability for these sites for fiscal year 2012 is approximately $20.7 million. This liability includes remediation and ongoing operation and maintenance costs where estimable.

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NOTE 4 – DETAILED NOTES ON ALL FUNDS (Continued) Water has identified underground storage tanks that require remediation work and is working with the Los Angeles Regional Water Quality Control Board, and the Lahontan Regional Quality Control Board, which have jurisdiction over these sites. Water’s estimated liability for these sites is approximately $2.8 million and includes remediation and ongoing operation and maintenance costs where estimable. There are no estimated recoveries. During fiscal year 2010, a lawsuit was filed against the City for contamination remediation costs incurred by an adjacent property owner caused by hazardous substance emanating from a property owned by the City. This property was used by Sewer as part of the work performed on the Northeast Interceptor Sewer. A settlement of $2.5 million was paid in fiscal year 2012. The City was also named as a potentially responsible party for another case for contamination which migrated in the soil and ground onto the adjacent property. Cross claimant’s record show that hazardous material was transported to the site from the Hyperion Treatment Plant. The parties are still working on the extent of contamination. Until that time remediation cost for this site cannot be reasonably estimated. The County of Los Angeles (County) has notified the City and other entities of potential liabilities for cleanup and maintenance of a public golf course which was created over an old landfill due to environmental issues including leachate and gas migration. According to the County’s review of prior customer record, Sewer used the site for disposal of grit waste from the Hyperion Treatment Plan. The City entered into a settlement with the County for $0.2 million and remained an active participant in the site investigation. The next phase for site cleanup and maintenance is under review by the California Department of Toxic Substances Control (SDTSC) and, hence, additional remediation costs, if any, are not known at this time.

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NOTE 5 – OTHER INFORMATION A. Pension and Other Postemployment Benefit Plans Plan Descriptions The City of Los Angeles contributes to three single-employer defined benefit pension plans: Fire and Police Pension Plan (Pensions), Los Angeles City Employees’ Retirement Plan (LACERS), and Water and Power Employees’ Retirement, Disability and Death Benefit Insurance Plan (DWP Retirement Plan). Pensions and LACERS provide retirement benefits to sworn and civilian (other than DWP) employees, respectively. The DWP Retirement Plan provides retirement, disability, and death benefits to Department of Water and Power (DWP) employees. The City also provides three single-employer substantive other postemployment benefits (OPEB) healthcare plans through the aforementioned defined benefit plans: Fire and Police Health Subsidy Plan (Pensions OPEB), Los Angeles City Employees’ Postemployment Healthcare Plan (LACERS OPEB), and Water and Power Employees’ Retiree Health Benefits Plan (DWP OPEB). Each plan issues a publicly available financial report that includes financial statements and required supplementary information for that plan. Those reports may be obtained by writing or calling the plans.

Department of Fire and Police Pensions Los Angeles City Employees’ 360 E. Second Street, Suite 400 Retirement System Los Angeles, CA 90012 202 W. First Street, Suite 500 (213) 978-4545 Los Angeles, CA 90012-4401 (800) 779-8328 Department of Water and Power Retirement Office 111 N. Hope Street, Room 357 Los Angeles, CA 90012 (213) 367-1689

Funding Policy The City’s annual cost for each plan is calculated based on the annual required contribution (ARC) of the employer, an amount actuarially determined in accordance with the parameters of the applicable GASB Statements. The ARC represents a level of funding that, if paid on an ongoing basis, is projected to cover normal cost each year and to amortize unfunded actuarial liabilities over a period not to exceed thirty years. The City Administrative Code and related ordinances define member contributions. The City’s ARC and net pension obligation for Pensions and LACERS are generally liquidated by the General Fund.

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NOTE 5 – OTHER INFORMATION (Continued) Benefit Pension Plans

Annual Pension Cost and Net Pension Asset (Obligation)

The City’s annual pension cost for the current year, net pension asset (obligation) at the end of the year, and related information for each plan are as follows (in thousands):

Pensions LACERS DWP Retirement

Contribution rates:

City 24.0% of covered 17.99% of covered 41.82% of covered payroll payroll payroll

Plan members 6% - Tier 1 Prior to the City's Early 6% of salaries upon 7% - Tier 2 Retirement Incentive becoming a member on 8% - Tiers 3 & 4 Program (ERIP) - or after June 1, 1984; 9% - Tier 5 8.22% to 13.33% of prior to June 1, 1984,11% - Tier 6 salaries at entry age amount is based on entry

with City subsidy for age percentage ratemembers prior to February 1983.

Starting November 8,2009, as the ERIP Ordinance becameeffective, 6% of payrollfor all members.

Effective July 1, 2011,7% (increase from 6%)for 15 years or until ERIPcost obligation is fully paid,whichever comes first;9% or 11% dependingon bargaining unit.

Annual required contribution 321,593$ 308,540$ 363,886$ Interest on net pension asset (obligation) -- 5,750 (8,719) Adjustment to annual required contribution -- (9,633) 13,211 Annual pension cost 321,593 304,657 368,378 Contributions made 321,593 308,540 326,200 Change in net pension asset (obligation) -- 3,883 (42,178) Net pension asset (obligation) - beginning of year -- (71,873) 52,102 Net pension asset (obligation) - end of year --$ (67,990)$ 9,924$

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NOTE 5 – OTHER INFORMATION (Continued)

In 2011, the City Council adopted new ordinances that require members of LACERS represented by certain bargaining groups to contribute an additional 2% or 4% of pay beginning April 24, 2011. As a result, effective July 1, 2011, contribution rates were increased to 7%, 9% or 11% of pay. The majority of members currently contribute 9% or 11% depending upon the terms and conditions of the specific Memoranda of Understanding to which a member is subject. Most of the members who currently contribute 7% or 9% will be required to contribute 11% effective July 1, 2012 and January 1, 2013, respectively. For fiscal year 2012, LACERS received total contributions of $487.0 million. The City contribution for ARC and family death benefits insurance plan was $308.6 million and $0.2 million, respectively; and members’ contribution was $178.2 million. Pensions is composed of six tiers. Effective July 1, 2011, a new pension tier, Tier 6, was added for all firefighters, police officers, and Harbor port police officers hired on or after July 1, 2011. Tier 6 members are required to contribute 9% of salary for regular pension contributions. They are also required to make an additional pension contribution of 2% of salary to support the City’s ability to fund retiree health benefits. For fiscal year 2012, Pensions received total contributions of $564.7 million, with respect to the Pension Plan and Health Subsidy Plan, in accordance with the ARC determined through the June 30, 2010 actuarial valuation. The City and member contributions were $444.5 million and $120.1 million, respectively. The City’s annual pension cost, the percentage of annual pension cost contributed to the plans, and the net pension asset (obligation) for fiscal year 2011-12 and the two preceding years for each of the plans are as follows (in thousands):

Net PensionAnnual Pension Percentage of Asset

Year Ended Cost (APC) APC Contributed (Obligation)

Pensions 6/30/10 250,517$ 100% $ -- 6/30/11 277,092 100% -- 6/30/12 321,593 100% --

LACERS 6/30/10 255,999 101% (75,105) 6/30/11 300,329 101% (71,873) 6/30/12 304,657 101% (67,990)

DWP Retirement 6/30/10 215,787 93% 104,265 6/30/11 334,541 84% 52,102 6/30/12 368,378 89% 9,924

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Funded Status and Funding Progress

The following is funded status information for each plan as of June 30, 2012 (in thousands):

Pensions LACERS DWP Retirement

Actuarial Accrued Liability (AAL) 17,030,833$ 14,393,959$ 9,692,603$

Actuarial Value of Assets 14,251,914 9,934,959 7,573,886 Underfunded AAL 2,778,919$ 4,459,000$ 2,118,717$

Funded Ratio 83.7% 69.0% 78.1%

Covered Payroll 1,341,914$ 1,819,270$ 886,539$

Underfunded AAL as a percentage of covered payroll 207.1% 245.1% 239.0%

Actuarial valuations involve estimates of the value of reported amounts and assumptions about the probability of events in the future. Amounts determined regarding the funded status of the plans and the annual required contributions of the City are subject to continual revision as actual results are compared to past expectations and new estimates are made about the future. The required schedule of funding progress, presented as RSI following the notes to financial statements, which presents a multi-year trend information about whether the actuarial value of plan assets is increasing or decreasing over time relative to the AAL for benefits have been updated accordingly for the actuarial valuation date of June 30, 2012. In October 2012, the Board modified the LACERS funding policy to 1) change the actuarial cost method for the existing retirement benefits and health benefits from the Projected Unit Credit (PUC) method to the Entry Age Normal (EAN) method beginning with the June 30, 2012 valuation; and 2) amortize all UAAL layers as of June 30, 2012 over 30 years, except the layers created in 2004 and 2005 for GASB compliance and the layers created in 2009 as a result of the Early Retirement Incentive Plan, which will maintain their original amortization schedules.

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Actuarial Methods and Assumptions

The following is information as of the most recent actuarial valuation:

Pensions LACERS DWP Retirement Plan

Actuarial valuation date June 30, 2012 June 30, 2012 July 1, 2012

Actuarial cost method Entry age normal Entry age normal Entry age normal

Amortization method Level dollar - Tier 1 Level percent of payroll Level dollarLevel percent of payroll - Tiers 2, 3, 4, 5 & 6

Remaining amortization Multiple layers not Multiple layers not Multiple layers not period exceeding 25 years, exceeding 30 years, exceeding 15 years,

closed closed closed

Asset valuation method Before June 30, 2008, 7-year market related 5-year market related 5-year market relatedAfter June 30, 2008, 7-year market related

Actuarial assumptions: Investment rate of return 7.75% 7.75% 7.75%

Projected salary 5.25% - 12.25% 4.65% - 11.25% 5.35% - 10.50% increases

Inflation rate 3.50% 3.50% 3.50%

Cost-of-living 3.50% - Tiers 1 & 2 3.00% Based upon CPI adjustments 3% - Tiers 3, 4, 5 & 6 increases with a

3% maximum

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NOTE 5 – OTHER INFORMATION (Continued) Other Postemployment Benefits (OPEB) The City Charter, the Administrative Code and related ordinance define the postemployment healthcare benefits. There are no member contributions for healthcare benefits. The City’s OPEB and net OPEB obligations for Pensions and LACERS are generally liquidated by the General Fund.

Annual OPEB Cost and Net OPEB Asset (Liability)

The City’s annual OPEB cost for the current year, net OPEB asset (liability) at the end of the year, and related information for each plan are as follows (in thousands):

Pensions OPEB LACERS OPEB DWP OPEBCity contribution rates 9.20% of covered 6.72% of covered 5.94% of covered

payroll payroll payrollAnnual required contribution 158,265$ 115,209$ 53,691$ Interest on net OPEB asset (liability) 7,700 -- (69,046) Adjustment to annual required contribution (6,188) -- 56,975 Annual OPEB cost 159,777 115,209 41,620 Contributions made 132,105 115,209 101,610 Change in net OPEB asset (liability) (27,672) -- 59,990 Net OPEB asset (liability)- beginning of year (99,352) -- 863,884 Net OPEB asset (liability) - end of year (127,024)$ --$ 923,874$

During fiscal year 2011, the City adopted an ordinance to freeze the maximum medical subsidy at $1,190 for LACERS members who retire on or after July 1, 2011. However, LACERS members who at any time prior to retirement contribute the additional 2% or 4% of pay are exempted from the freeze and obtain a vested right to future increases in the maximum medical subsidy at an amount not less than the dollar increase in the Kaiser two-party non-Medicare Part A and Part B premium. As of June 30, 2012, approximately 76% of non-retired members were making the additional contributions, and therefore are not subject to the medical subsidy freeze. The Pensions OPEB actuarial study for valuation date June 30, 2008 determined the annual required contribution for fiscal year ended June 30, 2012. To reflect the phasing-in of assumption changes, the Pensions Board adopted a contribution rate that was lower than the actuarially determined rate and resulted in a net OPEB liability. The annual OPEB cost for fiscal years beginning July 1, 2007, and continuing during the 30-year amortization period, shall include interest on the OPEB liability and adjustment to the annual required contribution.

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NOTE 5 – OTHER INFORMATION (Continued) The City’s annual OPEB cost, the percentage of annual OPEB cost contributed to the plans, and the net OPEB asset (liability) for fiscal year 2012 and the two preceding years for each of the plans are as follows (in thousands):

Net OPEBAnnual OPEB Percentage of Asset

Year Ended Cost (AOC) AOC Contributed (Liability)

Pensions OPEB 6/30/10 127,604$ 90% $ (45,682) 6/30/11 173,646 69% (99,352) 6/30/12 159,777 83% (127,024)

LACERS OPEB 6/30/10 96,511 100% --6/30/11 107,396 100% --6/30/12 115,209 100% --

DWP OPEB 6/30/10 46,400 346% 779,758 6/30/11 56,464 249% 863,884 6/30/12 41,620 244% 923,874

Funded Status and Funding Progress

The following is funded status information for each plan as of June 30, 2012 (in thousands):

Pensions OPEB LACERS OPEB DWP OPEB

Actuarial Accrued Liability (AAL) 2,499,289$ 2,292,400$ 1,566,059$

Actuarial Value of Assets 927,362 1,642,374 1,244,039 Underfunded AAL 1,571,927$ 650,026$ 322,020$

Funded Ratio 37.1% 71.6% 79.4%

Covered Payroll 1,341,914$ 1,819,270$ 886,539$

Underfunded AAL as a percentage of covered payroll 117.1% 35.7% 36.3%

Actuarial valuations involve estimates of the value of reported amounts and assumptions about the probability of events in the future. Amounts determined regarding the funded status of the plans and the annual required contributions of the City are subject to continual revision as actual results are compared to past expectations and new estimates are made about the future. The required schedule of funding progress, presented as RSI following the notes to financial statements, which presents multi-year trend information about whether the actuarial value of plan assets is increasing or decreasing over time relative to the AAL for benefits have been updated accordingly for the actuarial valuation date of June 30, 2012.

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NOTE 5 – OTHER INFORMATION (Continued) Although no formal funding policy has been established for the future benefits to be provided under the DWP OPEB Plan, DWP has made significant contributions into the Plan. In fiscal year 2012, the DWP transferred $37.5 million into the Plan and paid an additional $64.1 million in retiree medical premiums. The Power and Water Enterprise Funds’ portions of these amounts were $69.1 million and $32.5 million, respectively.

Actuarial Methods and Assumptions

Projections of benefits are based on the substantive plan and include the types of benefits in force at the valuation date. Actuarial calculations reflect a long-term perspective and employ methods and assumptions that are designed to reduce short-term volatility in actuarial accrued liabilities and the actuarial value of assets. Significant methods and assumptions are as follows:

Pensions OPEB LACERS OPEB DWP OPEB

Actuarial valuation date June 30, 2012 June 30, 2012 June 30, 2012

Actuarial cost method Entry Age Normal Entry Age Normal Entry Age Normal

Amortization method Closed amortization periods Level percent of payroll Level percent of payroll

Remaining amortization Multiple layers, closed Multiple layers, closed 23 years, closed period Prior to June 30, 2012, not exceeding 30 years

24 yearsOn or after June 30, 2012,

20 years

Asset valuation method Before June 30, 2008, 7-year market related Before June 30, 2008, 5-year market related market value of assetAfter June 30, 2008, After June 30, 2008, 7-year market related 5-year market related

Actuarial assumptions: Investment rate of return 7.75% 7.75% 7.75%

Projected salary 4.25% 4.25% 4.25% increases

Inflation rate 3.50% 3.50% 3.50%

Healthcare cost trend rates Medical 8.5%, decreasing by 8.25%, decreasing by 8.5%, graded down to

0.5% for each year 0.5% for each year an ultimate rate of for seven years until it for seven years until it 5% over 7 years reaches an ultimate reaches an ultimate rate of 5% rate of 5%

Dental 5% 5% 5%

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Deferred Retirement Option Plan

Effective May 1, 2002, members of Pensions have the option to enroll in a Deferred Retirement Option Plan (DROP). Members of Tiers 2 and 4 who have at least 25 years of service, and members of Tiers 3 and 5 who have at least 25 years of service and who are at least 50 years old are eligible for the DROP. Participation in DROP by Tier 6 members is subject to amendment of the Administrative Code. Members who enroll continue to work and receive their active salary up to five years. Enrolled members continue to make contributions to Pensions until they have completed the maximum number of years required for their Tier but cease to earn additional retirement service and pay credits. Monthly pension benefits that would have been paid to enrolled members are credited to their DROP accounts which will earn 5% annual interest. Once the DROP participation period ends, enrolled members must terminate active employment. They then receive proceeds from their DROP account and a monthly benefit based on their service and salary at the beginning date of the DROP, plus applicable cost of living adjustments. At June 30, 2012, there were 1,193 pensioners enrolled in the DROP program and the total estimated value of the DROP accounts at that date was approximately $237.0 million. Two Percent Opt-In On July 15, 2011, the City Council adopted an ordinance to permanently freeze the retiree health subsidies and reimbursements for the members of Pensions who retired or entered DROP on or after July 15, 2011. This ordinance froze the maximum monthly subsidy for non-Medicare and Medicare members at the July 1, 2011 monthly rate of $1,097.4 and $480.4, respectively. However, the ordinance also provided that members may make an irrevocable election to contribute towards vesting increases in the maximum medical subsidy, as allowed by an applicable Memorandum of Understanding. Members who opted-in to make additional pension contributions are entitled to the current maximum medical subsidy benefit and all future subsidy increases once they retire and become eligible to receive a subsidy. The opt-in period for the majority of the members began August 15, 2011 and closed September 29, 2011. Patient Protection and Affordable Care Act The Patient Protection and Affordable Care Act (ACA) was signed into law in March 2010. One key provision of the legislation is the assessment of a 40% excise tax on the cost of health plans that exceed certain threshold. The thresholds in 2018 for non-Medicare retirees aged 55 through 64 are $11,850 for single coverage and $30,950 for family coverage. For all other retirees the thresholds in 2018 are $10,200 for single coverage and $27,500 for family coverage. PPACA allows the higher thresholds also to be used for any member “who participates in a plan sponsored by an employer the majority of whose employees covered by the plan are engaged in a high-risk profession or employed to repair or install electrical or telecommunication lines.”

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NOTE 5 – OTHER INFORMATION (Continued) LACERS and Pensions did not include the projected excise tax in the June 30, 2012 actuarial valuation. Both LACERS and Pensions estimate that if there is no change in the law or plan provisions between now and 2018, and if current medical cost trend stays substantially the same during the same period, some of their post-employment health care plans will be subject to the excise tax in 2018.

The impact of this potential excise tax is reflected in the DWP Retirement Plan’s actuarial valuation as of June 30, 2012. For the purpose of the actuarial valuation, the threshold in 2019 are indexed and assumed to increase by 4.5% over those in 2018. After 2019, the thresholds are assumed to increase by 3.5% (assumed CPI inflation) per year. DWP Retirement Plan’s share of the projected excise tax increased the ARC by about 0.15% of payroll. The increase in the UAAL is approximately $14.4 million and the decrease in the funded ratio is approximately 1.2%. The impact of this potential excise tax was lower than the June 30, 2011 valuation because the projected subsidy levels dropped from those in the prior valuation.

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B. Early Retirement Incentive Program In October 2009, the City adopted an Early Retirement Incentive Program (ERIP) aimed to reduce the City’s workforce by providing incentives for eligible members of the Los Angeles City Employees Retirement System (LACERS) to retire in the form of retirement benefit enhancement and/or separation pay incentives. The goal of the ERIP was to separate 2,400 employees from City service as quickly as possible. The ERIP enrollment period started on November 2, 2009 (effective date of the ERIP ordinance) and ended 45 days thereafter. Eligible ERIP participants received: 1) a “Severance Payment” in the amount of what would be the employee’s accumulated sick and vacation time payment if the employee were retiring pursuant to standard non-ERIP retirement policies and procedures, and 2) a “Separation Payment” whereby additional service and/or age credit was added to qualify an employee for an unreduced or standard retirement. Further, depending on length of service credit, ERIP retirees each received a separation payment of $1,000 for each year of service or $15,000. The Severance Payment and Separation Payment shall be paid over two separate calendar years and shall constitute, and be administered as, a Bona Fide Separation Pay Plan under Internal Revenue Code Section 457(e)(11). ERIP cost obligation shall be an obligation of the LACERS members and shall be cost-neutral to the City. To this end, the retirement benefits of employees retiring under ERIP shall be reduced by 1%. Further, the LACERS active employees’ retirement contribution rate increased from 6% to 7% based upon the terms of the ERIP. Once the City has recouped the ERIP cost obligation, the contribution rate shall be reduced by 1% for all employees who were LACERS members as of the ERIP beginning date. However, the City reserves the right to increase the retirement contribution rate for new hires. New ordinances adopted by the City Council in 2011 provide that members represented by certain bargaining units are required to contribute an additional 2% or 4% of pay beginning April 24, 2011. Effective July 1, 2011, members’ contribution rates were 7%, 9% or 11% of pay, depending upon the terms and conditions of specific MOU to which a member is subject. As of June 30, 2011, 2,400 eligible employees had retired under the City’s ERIP with total severance and separation payment costs of $89.4 million. Out of the $89.4 million, $77.9 million are payouts for General-Funded retirees that include $42.0 million separation bonus, and $35.9 million severance payout for sick and vacation benefits. The severance and separation payments were paid in two installments of $38.5 million in fiscal year 2011 and $39.4 million in fiscal year 2012. Sewer reimbursement to the General Fund was determined to be $7.4 million for ERIP related payouts (separation pay incentives of $3.8 million and accumulated sick and vacation time payment of $3.6 million.) Of the $7.4 million, 50% or $3.7 million were paid in fiscal year 2011 and the remaining 50% balance was paid in fiscal year 2012.

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NOTE 5 – OTHER INFORMATION (Continued) C. Commitments and Contingencies

Contingencies


Pledges of Future Revenues

The City has pledged certain future revenues for the payment of certain outstanding long-term obligations. Discussions about pledged revenues are included in Note 4H on Long-Term Liabilities beginning on page 116.

Pending Lawsuits and Claims

As mentioned in Note 4O on page 146, certain pending lawsuits and claims have a reasonable possibility of resulting in additional General Fund liability totaling approximately $952.1 million. However, no amount has been accrued in the accompanying financial statements because it is not probable that a loss has been incurred as of June 30, 2012.

City Repayments to Airports Enterprise Fund

In December 2009, the City settled two unrelated cases with the Federal Aviation Administration (FAA) relative to FAA’s audit findings of improper payments by Airports to the City. The cases involved compliance review by FAA of the transfer of Airports revenue funds to the City for the implementation of a joint strategic international marketing alliance, and the legality of the transfer of $43.0 million out of approximately $58.0 million representing condemnation proceeds received for certain City-owned property taken by the State for use in the construction of the Century Freeway. The settlement calls for a series of semi-annual payments over ten years through June 30, 2019 by the City to Airports totaling $17.7 million plus a 3% interest for a total of $21.3 million. To effect payment, the City will reduce the charges to Airports for future services rendered. As of June 30, 2012, $0.8 million installment payment has been offset against billings by the City for actual costs of services provided to Airports, which was verified by the City’s independent auditor. The City reported the outstanding principal balance of $14.7 million as payable beyond one year and $0.8 million as payable within one year.

Federal Consent Decree

The City has entered into a five-year consent decree agreement with the Federal government to avoid litigation. The Federal court extended the agreement by three years to June 2009. Under the agreement, the City is required to build a Training, Evaluation, and Management System (TEAMS II) database to track officer performance as well as undertake additional risk management and integrity assurance measures. On July 17, 2009, the Federal court terminated the Consent Decree and implemented a Transition Agreement under the court’s jurisdiction that included continued monitoring over the use of the TEAMS II database. TEAMS II databases include the Risk Management Information System (RMIS), Use of Force System (UOFS), Deployment Period System (DPS), and Complaint Management System (CMS). In fiscal year 2012, a pilot program at the Robbery Homicide Division and Operations South Bureau to automate the tracking of homicide investigations, including cold cases, was integrated into the TEAMS II environment to make use of existing hardware, resulting in costs savings to systems maintenance. Continued testing and implementation work was performed for the Claims Lawsuits Information System (CLIS) with deployment in December 2012.

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At June 30, 2012, the City incurred total costs of approximately $1.5 million for the enhancement and integration testing, as well as software maintenance and technical support. It is anticipated that the project will cost an additional $1.4 million in fiscal year 2013.

Telephone Users’ Tax

The City’s telephone users’ tax (TUT) ordinance was amended with the approval by the electorate of Proposition S, “Reduction of Tax Rate and Modernization of Communications Users Tax,” on the February 5, 2008 election ballot. This measure replaced the prior telephone users’ tax ordinance and reduced the rate of the City tax on users of communication services from 10% to 9%. The new ordinance, which was effective on March 15, 2008, provides for taxation of a broader tax base than the prior ordinance, and includes private communication services, voice mail, paging services, text messaging, and pay-phone usage. A number of claims have been filed in connection with this tax. On issues related to a certain class action, the appellate court held that class actions against local taxes are not permitted under State law. However, the California Supreme Court (Court) reversed the appellate court decision and concluded that class claims for tax refunds against a municipality are permissible, and remanded the matter back to the trial court. The class has not yet been certified. If plaintiffs obtain certification and prevail on the merits at trial, City liability could be up to $750.0 million. However, the City has procedural and substantive defenses that make it likely that even if plaintiffs prevail, the City’s ultimate liability may be significantly less. In a certain case, a plaintiff seeks refund of $6.3 million for alleged overpayment for the period February 2007 through February 2008. Plaintiff claims that it is not subject to TUT because it did not collect TUT from its customers, its prepaid service is excluded from TUT, that the municipal code provisions were invalid during the period which ended when the voters approved an amendment to the tax ordinance in February 2008, and the municipal code provisions violated Proposition 218. Other plaintiffs seek a total refund of $17.7 million for allegedly not being subject to TUT and that the TUT as amended does not apply to the services they provide. These cases were consolidated and the trial court placed a stay on all cases except the class action lawsuit.

A plaintiff filed a complaint against certain public agencies including the City, seeking a refund of TUT of $22.9 million paid to the City between November 1, 2005 and September 30, 2010. Plaintiff contends that TUT was erroneously collected on internet access charges, and that such charges were exempt under federal law. The parties are in the early pleading stages of this case.

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NOTE 5 – OTHER INFORMATION (Continued) Airports Enterprise Fund

Los Angeles International Airport (LAX) Master Plan

The LAX Master Plan was adopted by the Board of Airport Commissioners (BOAC) and approved by the City Council in 2004. It is a broad policy statement regarding the conceptual strategic framework for future improvements at LAX and describes how LAX can accommodate its appropriate share of the region’s aviation demand, while balancing those needs with environmental concerns, safety and security, and the concerns of LAX’s neighbors. Settlement agreements were entered into by the City and several entities that filed lawsuits in connection with the LAX Master Plan. Among other things, the agreements require Airports to limit the number of terminal gates; involve the surrounding communities in project planning; provide funding for traffic and noise mitigation and abatement, job training and opportunities, street and street lighting improvements, and air quality and environmental programs; and develop a regional initiative to encourage passenger and cargo activity at other airports. These agreements are conditioned upon FAA’s approval of expenditures and use of airport revenues for the specified purposes.

Environmental Issues

Airports bears full responsibility for the cleanup of environmental contamination on property it owns. However, if the contamination originated based on contractual arrangements, the tenants are held responsible even if they declare bankruptcy. As property owner, Airports assumes the ultimate responsibility for cleanup in the event the tenant is unable to make restitution. Under certain applicable laws, Airports may become liable for cleaning up soil and groundwater contamination on a property in the event that the previous owner does not perform its remediation obligations. Airports accrues pollution remediation liabilities when costs are incurred or amounts can be reasonably estimated based on expected outlays. At June 30, 2012, amounts accrued totaled $12.8 million. Airports does not expect any recoveries reducing this obligation. The State Water Resources Control Board (SWRCB) issued a Notice of Violation (NOV) to Airports generally alleging violations of underground storage tank (UST) construction, monitoring, and testing laws at facilities where Airports owns and operates USTs. Airports owns and/or operates 14 USTs (eight at LAX, four at VNY and two at ONT). The NOV is unclear as to the allege violation. The SWRCB’s investigation is continuing. The California Regional Water Quality Control Board, Lahontan Region issued a Notice of Revised Proposed Cleanup and Abatement Order (Order) to Los Angeles County Sanitation District No. 20 (District) and the City of Los Angeles (City), as Dischargers, with respect to discharges to underground water from the Palmdale Reclamation Plant (Reclamation Plant) owned by the District. The Order states that the discharges have resulted in violations of waste discharge requirements for the Reclamation Plant and prohibitions contained in the Water Quality Control Plan for the Lahontan Region, and that discharges from the Reclamation Plant to unlined ponds and to the Effluent Management Site (owned by the City and now known as the Agricultural Site) have adversely affected and polluted groundwater in the area of the discharges. Airports is reviewing the matter such that the associated costs and timeframe to perform the Order, along with the apportionment of liability, are uncertain at this time.

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Terminal Leases

In January 2007, American Airlines (AA), Continental Airlines, and United Air Lines (the Plaintiffs) filed a complaint in Federal District Court alleging that Airports has imposed new M&O charges in violation of their leases at LAX. In January 2008, the Airports Board (Board) approved interim settlement agreements with the Plaintiffs. Thereafter, a joint stipulation for dismissal of the entire action filed by the parties was granted by the Court without prejudice to renew. United Air Lines and Continental Airlines have since settled their claims with Airports relating to this matter. The interim settlement with American Airlines (AA) was subsequently extended until December 31, 2010 and the action has not been re-initiated as of October 30, 2012. AA continued to pay M&O charges, based on the already expired interim settlement agreement, that is lower than Airports’ interpretation of the lease. In November 2011, AA filed for Chapter 11 bankruptcy protection. Pursuant to bankruptcy laws, AA has a certain period of time to assume or reject the lease. If AA assumes the lease, it must cure existing defaults as Airports views the underpayment as a default under the lease. If AA rejects the lease, the lease is deemed terminated.

AMR Corporation Bankruptcy Filing

On November 29, 2011, AMR Corporation, the parent company of American Airlines (AA), filed for Chapter 11 bankruptcy protection. AA is one of the top ten airlines, by number of passengers, operating at LAX and ONT. As of October 30, 2012, Airports’ prepetition receivable from AA was $7.8 million. AA has provided Airports with a $15.0 million faithful performance guarantee (FPG); however, Airports and AA have agreed to not draw from the FPG to settle the prepetition receivable. Although AA’s operations at the airports remain as usual, Airports cannot predict the outcome of the bankruptcy filing. Power and Water Enterprise Funds A number of claims and suits are also pending against DWP for alleged damages to persons and property and for other alleged liabilities arising out of DWP’s operations. In the opinion of DWP management, any ultimate liability, which may arise from these actions, is not expected to materially impact the Power and Water Enterprise Funds’ financial statements.

Capital Facilities Fee Claims

In June 2007, DWP received a tentative decision in favor of the State and a number of local government agencies that are electric customers of DWP that claimed that DWP has rates that include a capital facilities’ charge that violates the State’s statute. However, in October 2008, DWP settled the case and recorded the $160.0 million settlement amount. Additionally, as permitted by generally accepted accounting principles, the DWP Board approved to defer all potential costs associated with the resolution of this litigation and establish a corresponding long-term deferred debit to be recovered through future revenues over a period of up to ten years, if necessary.

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NOTE 5 – OTHER INFORMATION (Continued) Harbor Enterprise Fund

Alameda Corridor Transportation Authority (ACTA) Agreement

In August 1989, Harbor and the Port of Long Beach (the Ports) entered into a joint exercise of powers agreement and formed ACTA for the purpose of establishing a comprehensive transportation corridor and related facilities consisting of street and railroad rights-of-way and an improved highway and railroad network along Alameda Street between the Santa Monica Freeway and the Ports in San Pedro Bay, linking the Ports to the central Los Angeles area. The Alameda Corridor began operating on April 15, 2002. ACTA is governed by a seven-member board, which comprises of two members from each Port, one each from the Cities of Los Angeles and Long Beach and one from the Metropolitan Transportation Authority. In 2003, ACTA agreed to an expanded mission to develop and support projects that more effectively move cargo to points around Southern California, ease truck congestion, improve air quality, and make roads safer. If in the future ACTA becomes entitled to distribute income or make equity distributions, the Ports shall share any such income or equity distributions equally. In October 1998, the Ports, ACTA, and the railroad companies, which operate on the corridor, entered into a Corridor Use and Operating Agreement (Corridor Agreement). The Corridor Agreement obligates the privilege of using the corridor to transport cargo into and out of the Ports. ACTA negotiated with BNSF Railway Company (BNSF) and Union Pacific (UP) regarding certain types of cargo movements (trans load movements) for which BNSF and UP are not paying use fees. In the Settlement and Release Agreement (the Agreement), dated as July 5, 2006, ACTA, BNSF, and UP agreed to resolve the “Trans loading Dispute.” ACTA, the Ports, the City of Los Angeles, and the City of Long Beach (the ACTA Releasing Parties) each release, acquit, and discharge BNSF and UP of all liability and costs, as stated in the Agreement, arising from or relating to the Trans loading Dispute. BNSF and UP (the Railroad Releasing Parties) each release, acquit, and discharge the ACTA Releasing Parties from any and all liability and costs, as stated in the Agreement, arising from or relating to any claim by the Railroad Releasing Parties. These use fees are used to pay (a) the debt service that ACTA incurs on approximately $1.20 billion of bonds, which ACTA issued in early 1999 and approximately $686 million of bonds issued in 2004, and (b) for the cost of funding required reserves and costs associated with the financing, including credit enhancement and rebate requirements, if any (collectively, ACTA Obligations). Use fees end after 35 years or sooner if the ACTA Obligations are paid off earlier. If ACTA revenues are insufficient to pay ACTA Obligations, the Corridor Agreement obligates each Port to pay up to twenty percent (20%) of the shortfall (Shortfall) on an annual basis. If this event occurs, the Ports’ payments to ACTA are intended to provide cash for debt service payments and to assure that the Alameda Corridor is available to maintain continued cargo movement through the Ports. The Ports are required to include expected Shortfall payments in their budgets, but Shortfall payments are subordinate to other obligations of Harbor, including the bonds and commercial paper currently outstanding, Harbor does not and is not required to take Shortfall payments into account when determining whether it may incur additional indebtedness or when calculating compliance with rate covenants under their respective bond indentures and resolutions. In April 2004, it was estimated by ACTA that Harbor would be required to make Shortfall payments totaling approximately $20.5 million (each port being liable for their one-half share of $10.3 million) through 2027. Pursuant to the ACTA Operating Agreement, Harbor is obligated to include any forecasted Shortfall payments in its budget each fiscal year. Harbor made a shortfall payment of $3.0 million in September 2011.

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Natural Resources Defense Council Settlement Judgment

In March 2003, Harbor settled a lawsuit entitled: Natural Resources Defense Council, Inc., et al. v. City of Los Angeles, et al., regarding the environmental review of a Harbor project. The settlement calls for a total of $50.0 million in mitigation measures to be undertaken by Harbor. This $50.0 million charge was recorded as expense in fiscal year 2003. The terms of the agreement require that Harbor fund various mitigation activities in the amount of $10.0 million per year over a five-year term ending in fiscal year 2007. As of June 30, 2009, a total of $50.0 million were transferred from Harbor Revenue Fund to the restricted mitigation funds. Pursuant to the settlement, Harbor is also obligated to expend up to $5.0 million to retrofit customer vessels to receive shore-side power as an alternative to using on-board diesel fueled generators. Through the end of fiscal year 2009, Harbor has spent $5.0 million for this program. In June 2004, Harbor agreed to amend the original settlement to include, and transferred to the restricted fund, an additional $3.5 million for the creation of parks and open space in San Pedro. The settlement agreement also established a throughput restriction at China Shipping Terminal per calendar year. Actual throughput at the terminal exceeded the cap for calendar years 2008, 2007, 2006, and 2005, and payments of $1.8 million, $6.9 million, $5.8 million, and $3.9 million, respectively, were made for having exceeded the caps. Harbor charged to nonoperating expense and deposited in the restricted mitigation funds the said amounts in June 2009, June 2008, May 2007, and April 2006, respectively. Total deposits for the four years were $18.3 million, with the June 2009 deposit for calendar year 2008 being the last payment for excess throughput required under the settlement agreement. As of June 30, 2012, Harbor has disbursed a total of $47.1 million from the $50.0 million in mitigation funds, of which $4.0 million was made in fiscal year 2012, as provided in accordance with the provisions of the settlement.

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Settlement on Dispute on Nexus Study

On January 19, 2001, the City, along with Harbor and the California State Lands Commission, entered into a settlement and mutual release agreement to resolve their disputes concerning the City’s entitlement to historic and future reimbursements for costs the City incurred or would incur providing services to Harbor. The settlement agreement provides that the City, as reimbursement for payments made by Harbor to the City for retroactive billings for City services provided during the period July 1, 1977 through June 30, 1994, inclusive, pay Harbor $53.4 million in principal plus 3.00% simple interest over a 15-year period. The settlement agreement also provides that the City reimburse Harbor for the payment differential, that amount representing the difference between the actual payments and the amount to which the City would have been entitled to reimbursement during fiscal year 1994–1995 through fiscal year 2000–2001, inclusive, had the reimbursement been computed during each of those fiscal years using the settlement formula. This amount is estimated at $8.4 million. Payment for this period is to be reimbursed to Harbor over 15 years, including 3.00% simple interest. The agreement also states that at any time after five years from January 19, 2001, the City, Harbor, and California State Lands Commission may negotiate to amend this agreement to account for new or changed circumstances. The State of California (the State), the City, and Harbor agreed to mutually release and discharge the other from any and all claims, demands, obligations, and causes of action, of whatever kind or nature pertaining in any way to the use, payment, transfer, or expenditure for any of the services or facilities identified in the Nexus Study or the 1997 MOU and provided for during the period July 1, 1977 through June 30, 2002. Accordingly, Harbor had recorded the amount due from the City as a long-term notes receivable of $14.7 million and current portion of notes receivable of $4.6 million as of June 30, 2012.

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Trapac Project and Environmental Impact Report On December 6, 2007, the Harbor Board approved the TraPac project, which involves the development of the various improvements to Berths 136-147 currently occupied by TraPac. Certain entities (Appellants) appealed the project approval under the provisions of the California Environmental Quality Act (CEQA). On April 3, 2008, the City and the Appellants agreed to a Memorandum of Understanding (MOU) providing for the revocation of the appeals and the establishment of a Port Community Mitigation Trust Fund (PCMTF) to be operated by the Harbor Community Benefit Foundation (HCBF), a non-profit entity. Harbor has provided the first two years funding of $16.1 million. Based on the volume of cargo processed in the third year, no additional funding was necessary. On November 3, 2011, the Harbor Board approved an agreement with the California Community Foundation (CCF) Community Initiative Fund (CIF), created to provide management service for HCBF, to transfer funds from existing PCMTF to the new PCMTF held by CCF CIF. As of June 30, 2012, a total of $ 16.8 million has been disbursed from the PCMTF including a $9.8 million funds transferred to the CCF CIF in fiscal year 2012. Total fund balance, including interest earned at the end of the fiscal year was $0.1 million.

Sewer Enterprise Fund Certain claims and lawsuits are pending against Sewer for construction claims and other alleged liabilities arising during the ordinary course of operations. Sewer recognizes liabilities for claims and lawsuits when it is probable that an asset has been impaired or a liability has been incurred and the amount of the loss can be reasonably estimated. The City Attorney estimates the amount of liabilities that are probable of occurring from these claims and lawsuits. For fiscal year 2012, $40.1 million was accrued as claims payable of Sewer. The increase was due to increase in claims involving construction project work, sewer back up and earth movement cases.

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NOTE 5 – OTHER INFORMATION (Continued) Commitments As of June 30, 2012, the City’s encumbrances are as follows: $132.2 million for General Fund, $12.7 million for Community Development Fund, $26.9 million for MICLA Special Revenue Fund, $3.2 million for Proposition A Local Transit Assistance Fund, $20.6 million for Recreation and Parks Fund, $31.4 million for Solid Waste Resources Fund, and $266.8 million for Other Governmental Funds. As of June 30, 2012, the following Enterprise Funds have commitments for construction contracts and open purchase orders in the following approximate amounts (in thousands):

Airports 125,600$ Harbor 225,100 Sewer 123,300

Other Enterprise Fund Commitments

Harbor Enterprise Fund In 1985, Harbor received a parcel of land, with an estimated value of $14.0 million from the federal government, for the purpose of constructing a marina. Harbor agreed to reimburse the federal government up to $14.0 million from excess revenues, if any, generated from marina operations after Harbor has recovered all costs of construction. No such payments were made in fiscal year 2012. Power Enterprise Fund

Purchase Power Commitments The DWP entered into a number of energy and transmission service contracts that involve substantial commitments as follows (in thousands):

DWP's Interest in Agency ShareAgency Share Interest Capacity Outstanding

Agency (Percentage) (Percentage) (Megaw atts) Principal

Intermountain Power Project IPA 100.0 % 63.0 % 1,125 916,295$ Palo Verde Nuclear Generating Station SCPPA 5.9 67.0 151 46,297 Mead-Adelanto Project SCPPA 68.0 36.0 313 58,073 Mead-Phoenix Project SCPPA 17.8 - 22.4 25.0 148 12,538 Southern Transmission System SCPPA 100.0 60.0 1,429 483,815 Milford I Wind SCPPA 100.0 93.0 188 212,417 Windy Point SCPPA 100.0 92.0 242 462,219 Linden Wind Energy SCPPA 100.0 90.0 45 * 122,234 Milford II Wind SCPPA 100.0 95.0 97 149,746

* For the f irst three years, DWP w ill receive 100% (50 MWs), unless City of Glendale exercises its option to take 10%.IPA: The Intermountain Pow er Agency is an agency of the State of Utah established to ow n, acquire, construct, operate, maintain, and repair the Intermountain Pow er Project (IPP). DWP Pow er System serves as the Project Manager and Operating Agent of IPP.SCPPA: The Southern California Public Pow er Authority, a California joint pow ers agency. Note: SCPPA's interest in the Mead-Phoenix Project includes three components.

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The above agreements require Power to make certain minimum payments that are based mainly upon debt service requirements. In addition to average annual fixed charges of approximately $357.0 million during each of the next five years, Power is required to pay for operating and maintenance costs related to actual deliveries of energy under these agreements (averaging approximately $526.0 million annually during each of the next five years). Power made total payments under these agreements of approximately $751.0 million in fiscal year 2012. These agreements are scheduled to expire from 2027 to 2035. Power earned fees under the IPP project manager and operating agent agreements totaling $18.9 million in fiscal year 2012.

Long-term Notes Receivable

Under the terms of its purchase power agreement with IPA, DWP is charged for its output entitlements based on its share of IPA’s costs, including debt service. During fiscal year 2000, DWP restructured a portion of this obligation by transferring $1.1 billion to IPA in exchange for long-term notes receivable. The funds transferred were obtained from the debt reduction trust funds and through the issuance of new variable rate debentures. IPA used the proceeds from these transactions to defease and to tender bonds with par values of approximately $618.0 million and $611.0 million, respectively. On September 7, 2000, DWP paid $187.0 million to IPA in exchange for additional long-term notes receivable. IPA used the proceeds to defease bonds with a face value of $198.0 million. On July 20, 2005, DWP paid $97.0 million to IPA in exchange for additional long-term notes receivable. IPA used the proceeds to defease bonds with a face value of $92.0 million. The IPA notes are subordinate to all of IPA’s publicly held debt obligations. Power’s future payments to IPA will be partially offset by interest payments and principal maturities from the subordinated notes receivable. The net IPA notes receivable balance totaled $904.0 million as of June 30, 2012. The IPA notes pay interest and principal monthly and mature on July 1, 2023. The interest rates range from 1.9% to 14.2% subject to adjustments related to IPA bond refundings. Energy Entitlement DWP has a contract through 2017 with the U.S. Department of Energy for the purchase of available energy generated at the Hoover Power Plant. Power’s share of capacity at Hoover is 491 MW (maximum rated capability). The cost of power purchased under this contract was approximately $18.0 million in fiscal year 2012. On December 20, 2011, the President signed H.R. 470, the “Hoover Power Allocation Act of 2011,” into law. The legislation reallocates, for 50 more years, power from the Hoover Dam Power Plant to existing contractors while creating an additional pool of 5% power for new entrants. DWP has a contract through 2026 with SCCPA for the purchase of available energy generated at the Pebble Springs Wind Project. Power’s share of capacity is approximately 69 MWs (maximum capacity). The cost of power purchased was $18.0 million as of June 30, 2012.

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Palo Verde Nuclear Generating Station Matters As a joint project participant in Palo Verde Nuclear Generating Station (PVNGS), DWP has certain commitments with respect to nuclear spent fuel and waste disposal. Under the Nuclear Policy Act, the U.S. Department of Energy (DOE) is to develop facilities necessary for the storage and disposal of spent fuel and to have the first such facility in operation by 1998; however, the development of the repository designated at Yucca Mountain in the state of Nevada was postponed indefinitely for political reasons after DOE spent some billions of dollars conducting feasibility studies. A Blue Ribbon Committee was formed by the federal government to look at other alternatives for nuclear waste disposal, but thus far, it still has not come up with any solutions. Capacity in existing fuel storage pools at PVNGS was exhausted in 2003. A Dry Cask Storage Facility (also called the Independent Spent Fuel Storage Facility) was built and completed in 2003 at a total cost of $33.9 million (about $3.3 million for DWP). The facility has the capacity to store all the spent fuel generated by the plant until the end of its life in 2027. With the current operating license extension granted by the Nuclear Regulatory Commission, PVNGS is allowed to operate until 2047. The Dry Cask Storage Facility will be expanded as needed to accommodate additional spent fuel until it is removed by DOE. DWP accrues for current nuclear fuel storage costs as a component of fuel expense as the fuel is burned. DWP’s share of spent nuclear fuel costs related to its indirect interest in PVNGS is included in purchased power expense. Because of DOE’s inability to provide a disposal site, the PVNGS operating agent filed damages actions against the DOE to recover costs incurred by the PVNGS participants. A settlement was reached in August 2010 in the amount of $30.2 million from DOE of which $1.7 million is DWP’s share of the settlement which covers costs incurred up to 2006. Additional cost recovery is being pursued for the period post 2006. The Price Anderson Act (the Act) requires that all utilities with nuclear generating facilities share in payment for claims resulting from a nuclear incident. Participants in PVNGS currently insure potential claims and liability through commercial insurance with a $375.0 million limit; the remainder of the potential liability is covered by the industry-wide retrospective assessment program provided under the Act. This program limits assessments to a maximum of $118.0 million for each licensee for each nuclear incident occurring at any nuclear reactor in the United States; payments under the program are limited to $18.0 million per incident, per year. Based on DWP’s 5.70% direct interest and its 3.96% indirect investment interest through SCPPA, DWP would be responsible for a maximum assessment of $11.0 million per incident, limited to payments of $2.0 million per incident annually. The NRC guidelines require improved security in immediate areas surrounding the reactor buildings. PVNGS enlarged the protected area with inclusion of an outage support facility, a new warehouse, a minor vehicle maintenance facility, and a fuel depot to reduce vehicular traffic in and out of the protected area. The estimated cost for these facilities to DWP is approximately $6.3 million. In response to the nuclear event in Fukushima, Japan, the NRC may require PVNGS to increase the redundancy in its power supply to emergency cooling systems and accelerate the transfer of spent fuel from the pool to the dry cask storage. DWP cannot predict what new requirements will be mandated by the NRC and the resulting costs to DWP.

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NOTE 5 – OTHER INFORMATION (Continued) Environmental Matters Numerous environmental laws and regulations affect Power’s facilities and operations. DWP monitors its compliance with laws and regulations, and reviews its remediation obligations on an ongoing basis. The following topics highlight some of the major environmental compliance issues affecting Power. Air Quality – Nitrogen Oxide Emissions. Power’s generating station facilities are subject to the Regional Clean Air Incentives Market (RECLAIM) nitrogen oxide (NOx) emission reduction program adopted by the South Coast Air Quality Management District (SCAQMD). In accordance with this program, SCAQMD established annual NOx allocations for NOx RECLAIM facilities based on historical emission and type of emission sources operated. These allocations are in the form of RECLAIM trading emission credits (RTCs). Facilities that exceed their allocations may buy RTCs from other companies that have emissions below their allocations. DWP has a program of installing emission controls and purchasing RTCs, as necessary, to meet its emission requirements. As a result of the installation of NOx control equipment and the repowering of existing units, DWP has sufficient RTCs to meet its native load requirements for normal operations. Air Quality – Greenhouse Gas Emissions. In September 2006, the state of California adopted two new laws designed to reduce greenhouse gas (GHG) emissions in California. The first, Assembly Bill 32, the California Global Warming Solutions Act of 2006, requires the California Air Resources Board (ARB) to develop regulations to reduce statewide GHG emissions back to 1990 levels by 2020. In 2007, the ARB established California’s 1990 GHG emissions baseline, and developed a mandatory reporting regulation to require California sources to report their GHG emissions annually starting with 2008 data. In December 2008, the ARB adopted a Climate Change Scoping Plan which identifies nearly 70 potential strategies and measures to achieve the state’s GHG emissions reduction goal. Subsequently, the ARB adopted regulations to implement a number of the emission reduction measures identified in the Scoping Plan. The Scoping Plan includes the following emission reduction measures applicable to the electricity sector: 1) increase renewable energy to 33.0%, 2) expand energy efficiency programs, 3) reduce SF6 emissions from gas insulated electrical switchgear, and 4) establish a GHG cap-and-trade program. The cap-and-trade program sets a statewide cap on GHG emissions beginning in January 2013, with the cap declining two to three percent per year from 2013 to 2020. The cap-and-trade program covers GHG emissions from all electricity generated in California or imported from other states, in-state industrial and manufacturing facilities, as well as natural gas and transportation fuels consumed in California. The second bill adopted by the state of California is designed to reduce greenhouse gas emissions from the generation of electricity consumed in California. Senate Bill 1368 requires the California Public Utilities Commission (CPUC) and the California Energy Commission (CEC) to establish a greenhouse gas emissions performance standard and implement regulations governing long-term financial commitments in base load generation made by load serving entities (LSEs) including publicly-owned electric utilities (POUs). These regulations are intended to prohibit any California LSE from entering into or renewing a long-term financial commitment with a base load generating resource that exceeds the greenhouse gas emissions performance standard, currently set at 1,100 pounds carbon dioxide per megawatt hour of electricity generated. This means that when existing contracts with high-emitting generating resources expire, those resources will be replaced by lower emitting generating resources that comply with the greenhouse gas emissions performance standard.

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At the federal level, several legislative bills have been proposed or introduced, but none have passed Congress. As such, a federal cap-and-trade program is unlikely to be established in the same time frame (2012) as a state cap-and-trade program, but may be considered in future years. However, the United States Environmental Protection Agency (EPA) adopted its Prevention of Significant Deterioration (PSD) and Title V Greenhouse Gas Tailoring Rule in June 2010. Power’s in-basin repowering projects requiring PSD permits after January 2, 2011 would be impacted as they would be required to submit a GHG Best Available Control Technology (BACT) analysis. EPA is expected to issue its GHG BACT guidance for public review later this year. Also, Power’s generating stations will need to amend their Title V operating permits to incorporate any GHG requirements when the permits are renewed. EPA Coal Combustion Residuals Proposed Rules. On June 21, 2010, the US Environmental Protection Agency (EPA) proposed to establish federal standards to regulate coal combustion residuals (coal ash). The two options being considered are to designate coal ash as either hazardous or non-hazardous. The hazardous waste proposal would phase out the disposal of ash in wet storage ponds. The nonhazardous designation would set federal guidelines for state disposal that require the installation of additional liners on new wet storage pond. Both options set new requirements for storing and monitoring the waste in dry landfills. The worst case scenario impact at the Intermountain Power Plant would be $483.0 million in capital cost plus $110.0 million in annual operating cost for the hazardous option if the existing landfill has to be removed and coal ash has to be disposed of at an offsite facility. For the nonhazardous option, the impact would be $62.0 million in capital cost plus $2.0 million in annual operating cost. For Mohave Power Plant, the worst case scenario impact would be $230.0 million in capital cost for the hazardous option if the existing landfill has to be removed and disposed of at an offsite facility. For the nonhazardous option, the impact would be $6.0 million in capital cost plus $0.25 million in annual operating cost. For the above facilities, the costs translate into electric rate impacts of about 1.4% for the hazardous option and 0.18% for the nonhazardous option. At this time, the EPA is still analyzing over half a million comments received following the rule proposal. The EPA is also gathering additional data prior to finalizing the rules and the time frame is still unknown at the present time. Power Plant Once-Through Cooling Water Systems. Once-through cooling (OTC) is the process where water is drawn from a source, pumped through equipment to provide cooling, and then discharged. Some type of cooling process is necessary for nearly every type of traditional electrical generating station, and the OTC process is utilized by many electrical generating stations located next to large bodies of water. Typically, the water used for cooling is not chemically changed in the process although its temperature is increased. Due to the Second Circuit Court’s decision to remand most of Environmental Protection Agency (EPA’s) 316(b) Rule finalized in July 2004, EPA suspended this Rule and is in the process of drafting a new rule. EPA’s proposed new rule for existing facilities was released in the federal register for comments on April 20, 2011 for a 120-day comments period. The newly proposed rule requirements applies to cooling water intake structures for all existing power generating facilities that withdraw more than 2 million gallons per day of water from waters of the United States and use at least 25% of the water they withdraw exclusively for cooling purposes.

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NOTE 5 – OTHER INFORMATION (Continued) Under this proposed rule, an owner or operator of an existing facility would be able to choose one of two compliance options for impingement mortality (IM): (1) monitoring to demonstrate that specified performance standards for impingement mortality of fish and shellfish have been met, or (2) demonstrate that intake velocity meets specified design criteria. IM compliance must be met 8 years after the effective date of the Rule. For entrainment mortality, the proposed rule requires entrainment studies and allows for compliance on a site specific basis. As part of a settlement agreement, a final rule had to be issued by July 2012; however, on July 17, 2012, the parties to the underlying litigation signed a modified settlement agreement, which extends the deadline for the Final Rule to June 27, 2013. The language for the Final Rule is still subject to change. On June 11, 2012, the EPA published a Notice of Data Availability (NODA), for a 30-day comment period that would allow relief to the IM compliance. DWP will need an exemption or some relief from the eight year IM compliance date. In addition, on June 12, 2012, the EPA published a second NODA regarding the willingness to pay for quantifying the non-use benefits of reducing impingement and entrainment. DWP is evaluating the potential impacts of the proposed rule on its facilities. In the absence of EPA’s 316(b) Rule, the California State Water Resources Control Board (State Board) decided to move forward and adopted their own Statewide 316 b Policy (Policy) on May 4, 2010. The Policy became effective on October 1, 2010. This policy requires DWP’s coastal power plants to reduce OTC by 93.0% – equivalent to wet cooling towers using seawater. This is referred to as the Track 1 compliance path. If the Track 1 compliance path is found to be infeasible, with concurrence from the State Board, a Track 2 compliance path can be pursued, which requires that the cooling water intake structure (CWIS) achieve an impingement mortality and entrainment (IM/E) reduction level of 90.0% of the Track 1 compliance standard or 83.7% on a unit-by-unit basis. DWP has made a decision to pursue the Track 1 compliance path, in order to comply with the Policy and completely eliminate the use of OTC. Recently, DWP was successful in having the Policy amended to extend the compliance dates, for six out of the nine remaining OTC units, to 2024 for Scattergood, and 2029 for Haynes and Harbor. The other four OTC units are on schedule, due to an AQMD settlement, to be repowered with eliminating OTC by 2013 and 2015, respectively. The Amendment to the Policy was adopted on July 19, 2011. The Amendment requires DWP to submit additional information responsive to the Statewide Advisory Committee on Cooling Water Intake Structures (SACCWIS) resolution by December 31, 2012. Depending upon the information submitted by DWP and no later than December 31, 2013, the State Board will consider modifications to the 2029 compliance dates. Furthermore, the Amendment requires implementation of interim measures that include a proposal to study new and/or viable existing technologies to reduce impingement and entrainment. The proposal must be submitted to the State Board no later than December 31, 2015. Upon approval of the proposal, the interim measures must be in place no later than December 31, 2020. These interim measures will include the funding of a mitigation project or the use of screens or an equivalent alternative measure at each OTC unit or intake until the facility is in full compliance. In addition, other regulatory changes have been made that could significantly impact operations at the Haynes and Harbor Generating Stations. The Regional Water Quality Control Board reclassified the body of water that the OTC water is discharged to an enclosed bay for the Harbor Generating Station, and sent a letter of intent to reclassify the receiving water body of water as an estuary for the Haynes Generating Station discharge. Even though the Haynes Generating Station will be repowering existing units, should there be a reclassification for the water body discharges at the Haynes Generating Station, there will be requirements that cannot be met with its existing cooling or future repowered configuration. DWP is in the process of reviewing the regulations and conducting studies. Once the studies are reviewed, DWP will determine an appropriate course of action.

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NOTE 5 – OTHER INFORMATION (Continued) Water Enterprise Fund Surface Water Treatment Rule The State of California Surface Water Treatment Rule (SWTR) imposed increased filtration requirements at any open distribution reservoir exposed to surface water runoff. DWP had four major reservoirs in its system subject to SWTR: Upper and Lower Hollywood, Lower Stone Canyon, and Encino. To comply with SWTR, DWP designed projects to remove these reservoirs from regular service through construction of larger pipelines and alternate covered storage facilities. The Hollywood Water Quality Improvement Project was completed in July 2002. Upper and Lower Hollywood Reservoirs were removed from service and functionally replaced by two 30 million gallon tanks and additional pipelines. Construction of the Encino project was completed in December 2007. Construction of the Lower Stone Canyon Water Quality Improvement Project was completed in November 2008. DWP is now in compliance with the SWTR. Stage 2 Disinfectants and Disinfection Byproduct Rule In January 2006, the Environmental Protection Agency (EPA) published the Stage 2 Disinfectants and Disinfection Byproduct Rule (Stage 2 DBP Rule) in the federal register. The Stage 2 DBP Rule strengthens public health protection for customers by tightening compliance monitoring requirements for two groups of disinfection byproducts (DBPs): trihalomethanes (TTHM), and haloacetic acids (HAA5). DBPs form when naturally occurring materials in water (e.g., decomposing plant material) combine with chemicals added to disinfect the water. DBPs are associated with cancer. In order to comply with the requirements of the Stage 2 DBP Rule, DWP must change its primary disinfectant from chlorine to chloramines, a less reactive disinfectant, by April 1, 2014. In order to convert to chloramines, DWP is proposing the construction of several chloramination stations, ammoniation stations, and the installation of mixers in tanks and reservoirs. The cost of Stage 2 DBP compliance-related engineering studies and construction activities is expected to be approximately $315.0 million at completion. The actual expenditures to date are $162.0 million. Long Term 2 Enhanced Surface Water Treatment Rule In January 2006, the EPA published the Long-Term 2 Enhanced Surface Water Treatment Rule (LT2) in the federal register. The LT2 builds upon the Safe Drinking Water Act and other earlier water quality rules to strengthen protection against microbial contaminants, especially Cryptosporidium. Cryptosporidium is a significant concern in drinking water because it contaminates most watersheds used for the collection of drinking water and can cause gastrointestinal illness. DWP has six reservoirs in its system subject to LT2: Ivanhoe, Silver Lake, Elysian, Upper Stone Canyon, Santa Ynez, and Los Angeles. In order to comply with the requirements of the LT2, DWP is proposing to cover, bypass, or build alternate covered storage for the aforementioned reservoirs and to install additional pipelines and related facilities. All these projects are in different stages of planning, design, and construction. The cost of LT2 compliance-related engineering studies and construction activities is expected to reach $1.3 billion at completion in 2026. The actual cost spent to date has been $364.0 million.

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Owens Lake During 1997, the Great Basin Unified Air Pollution Control District (the District) adopted an initial State Implementation Plan, as amended, and an implementing order requiring DWP to initiate pollution control measures to control particulate matter emitting from the Owens Dry Lake bed. DWP disputed the remediation measures imposed by the original order; however, in July 1998, DWP and the District entered into a Memorandum of Agreement (MOA) to mitigate the dust problem. The MOA delineated the dust producing areas on the lakebed that needed to be controlled, specified what measures must be used to control the dust, and specified a timetable for implementation of the control measures. The MOA called for phased implementation to permit the effectiveness of the control measures to be evaluated and modifications to be made as the control measures were being installed. The MOA was incorporated into a formal air quality State Implementation Plan (SIP) by the District. This SIP was approved by the EPA on October 4, 1999. The District revised and adopted the SIP in November 2003. The revised SIP defines the additional boundaries and areas required to be controlled on the lakebed. DWP was allowed to examine the District’s methodology to determine the additional areas to be controlled. As a result of those efforts, the District ordered in the revised SIP that 29.8 square miles required control including the areas DWP agreed to and completed. The revised SIP demonstrated that upon completion of DWP’s work, emissions from Owens Lake bed should be reduced so that the Owens Valley Planning Area would attain and maintain the Federal Clean Air Act ambient air quality standards for particulate matter. The Federal Clean Air Act requires that Owens Lake meet ambient air quality standards by the end of 2006. The MOA specified that DWP must choose from among three control measures the District has certified as Best Available Control Measures for Owens Lake (BACM). The three measures are Shallow Flooding, Managed Vegetation, and Gravel. The first phase of dust control implementation, completed in December 2001, consists of 13.5 square miles of Shallow Flooding. Shallow Flooding involves flooding the area to be controlled until either it is inundated with a few inches of water or the soil becomes thoroughly saturated to the surface with water. The second phase of dust control implementation, completed in July 2002, consists of about four square miles of Managed Vegetation. Managed Vegetation involves growing native vegetative cover that will hold the shifting and emissive lakebed in place, locking up the dust. The third and fourth phases of dust control implementation, completed in March 2003 and September 2005, respectively, consist of a total of 5.6 square miles of additional Shallow Flooding. The fifth phase completed the remainder of the required 29.8 square miles of dust control in December 2006 with Shallow Flooding. The total capital-related costs of implementing the 29.8 square miles of dust control measures through 2008 are approximately $413.0 million. In November 2006, DWP and the District entered into an agreement to settle their disputes arising from supplemental dust control measures proposed to be ordered upon DWP by the District (Settlement Agreement). The Settlement Agreement largely defines DWP’s activities moving forward in terms of new dust control measure development and air quality regulatory and research activities. The essence of the agreement calls for the City to construct 12.7 square miles of dust control measures by April 2010, 9.2 square miles must be Shallow Flooding and the remaining 3.5 square miles can be of the City’s own choosing, including a new low to zero water using method called moat and row. Following a successful demonstration project, DWP moved forward with plans to implement moat and row on 3.5 square miles. In turn, the agreement allows for new opportunities for water savings and a marked improvement as to how DWP will be regulated in the future.

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The District issued a new revised SIP in February 2008 that included an order to control the additional dust control areas agreed to in the Settlement Agreement. DWP completed construction of 9.2 square miles of shallow flooding at a cost of $120.0 million in April 2010. DWP is now diverting up to 95,000 acre-feet per year of water from the Los Angeles Aqueduct for dust mitigation activities on Owens Lake. Due to concerns expressed by the California State Lands Commission and the California Department of Fish and Game, construction of moat and row on 3.5 square miles was delayed with a new required completion date of October 1, 2010 in order to conduct additional environmental analysis. This additional environmental analysis was completed in August 2009. However, the California State Lands Commission would only issue a lease for 0.4 square miles leaving 3.1 square miles unmitigated. In March 2011, DWP entered into a Stipulated Order of Abatement with the District requiring construction of BACM on the remaining 3.1 square miles with provisions for converting three square miles of existing shallow flooding dust control measures to a hybrid of shallow flooding, managed vegetation, and gravel in order to free up sufficient water for operation of the new areas without increasing water diversions from the Los Angeles Aqueduct. This project is known as Phase 7a with an estimated construction cost of $98.0 million, and is required to be completed by December 2013. DWP is also required to construct Phase 8 of the Owens Lake Dust Mitigation Program consisting of 2 square miles of Gravel Cover, a District-approved waterless dust control measure. DWP obtained a lease from the California State Lands Commission for Phase 8 in December 2010. Phase 8 has an estimated construction cost of $70.0 million, and is required to be completed by November 2012. On August 1, 2011, the District issued an order to DWP to construct an additional 2.93 square miles of dust control (Phase 9) and to develop a 30% design for an additional 2.07 square miles of watch list area (potentially Phase 10). DWP has expressed concern regarding the need for these additional projects based on new information and evidence, and has invoked the dispute resolution process. Fire and Police Pension System Pensions has commitments to contribute capital for real estate and alternative investments in the aggregate amount of approximately $962.2 million at June 30, 2012. All members of Pensions, except Tier 4 members, who were active on or after July 1, 1982 have vested rights to their past contributions and accrued interest in the event of termination prior to retirement. At June 30, 2012, the total amount subject to this right was $1,498.5 million. Pensions is in negotiation with the State of Arizona over the value received in a taking of property that was owned by the Pensions and might result in an additional payment to Pensions for the property. Los Angeles City Employees Retirement System

At June 30, 2012, the LACERS was committed to future purchases of real estate and alternative investments at an aggregate cost of approximately $742.8 million.

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NOTE 5 – OTHER INFORMATION (Continued) D. Third-Party Obligations The City participated in the issuance of the following indebtedness to provide financing to private-sector entities for the acquisition, construction and improvements of housing, commercial, educational, medical and other facilities deemed to be in the public interest (in thousands):

OutstandingJune 30, 2012

Multifamily Housing Bonds - 104 Issues 588,691$ Home Mortgage Revenue Bonds - 7 Issues 7,018

Bond proceeds were used to provide mortgage loans for the construction and financing of multi-family rental and single-family residences in the City. The indebtedness is secured solely by the property financed by the respective bond issues and by creditguarantees by reinvestment-grade financial institutions.

Industrial Development Bonds - 23 Issues 221,979 The proceeds were used to provide manufacturers low cost financing to expand industrial capacity and stimulate job creation in the City. The City has no financial obligation as each bond is secured througha letter of credit.

Limited Obligation Medium-Term Improvement Notes - 1 Issue 1,700 The proceeds were used to provide financing for the fire safety improvements in privately owned buildings in the City. The notes are supported solely through annual assessments on the properties and the value of the underlying properties themselves.

Community Facilities District No. 3 Special Tax Bonds 4,985 The proceeds were used to fund acquisition and construction of certain public improvements for the Cascade Business Park and Golf Course. The City's obligation is limited to collecting the special taxes annually levied and collected from the District for debt service payments.

Community Facilities District No. 4 Special Tax Bonds 124,435 The proceeds were used to fund acquisition and construction of public improvements for the Playa Vista Development project. The City's obligation is limited to collecting the special taxes annually levied and collected from the District for debt service payments.

Community Facilities District No. 8 Special Tax BondsThe proceeds were used to fund acquisition and construction of public 5,925 improvements for the Legends at Cascades Development.

Street Improvement Assessment 1911/1913 Act Bonds 855 The proceeds were used to finance certain public improvements for the Westwood Village Streetscape Assessment District. The City's obligation is limited to collecting the assessments annually levied fordebt service payment.

955,588$

Issue

The City is not obligated in any manner for repayment of the indebtedness. Accordingly, the liabilities are not reported in the accompanying financial statements.

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NOTE 5 – OTHER INFORMATION (Continued) E. Other Matters Airports Enterprise Fund Aviation Security Concerns about the safety and security of airline travel and the effectiveness of security precautions may influence passenger travel behavior and air travel demand, particularly in the light of existing international hostilities, potential terrorist attacks, and world health concerns. Intensified security precautions have been instituted by government agencies, airlines, and airport operators since the September 11, 2001 terrorist attacks. Intelligence reports have indicated that LAX was a target of a terrorist bombing plot as well as a potential terrorist target. Airports is unable to predict: (a) the likelihood of future incidents of terrorism and other airline travel disruptions; (b) the impact of the aforementioned security issues on its operations and revenues; and (c) financial impact to the airlines operating at the Airports. Passenger Facility Charges Passenger Facility Charges (PFC) are fees imposed on enplaning passengers by airports to finance eligible airport related projects that preserve or enhance safety, capacity, or security of the national air transportation system, reduce noise or mitigate noise impacts resulting from an airport, or furnish opportunities for enhanced competition between or among carriers. Airports has received approvals from FAA to impose PFCs at LAX and Ontario (ONT) airports for various projects. The current PFC at LAX and ONT is $4.50. On October 19, 2012, the FAA approved Airports’ application to reduce the PFC at ONT from $4.50 to $2.00 effective January 1, 2013. The application does not change ONT’s collection authority of $242.4 million but extends the collection period through October 2021. As previously stated, Airports has received approval from the FAA to collect and use PFCs to pay for debt service on bonds issued to finance the Tom Bradley International Terminal Renovations and Bradley West Projects. For fiscal year 2012, the Airports Board authorized the use of PFC funds not to exceed $25.2 million for these projects. A total of $25.2 million was used for debt service. Through June 30, 2012, the cumulative PFC collections and the related interest earned as reported to the FAA were $1,711.8 million and $209.4 million, respectively, while cumulative expenditures were $1.2 billion. Customer Facility Charges

In November 2001, the Airports Board approved the collection of a state-authorized Customer Facility Charge (CFC) from car rental agencies serving LAX and ONT. State law allows airports to collect a fee of $10 per on-airport rental car agency transaction to fund the development of consolidated car rental facility and common-use transportation system. CFCs are recorded as nonoperating revenue and presented as restricted assets in the financial statements. At June 30, 2012, CFCs collected and the related interest earnings were $160.2 million and $6.8 million, respectively, while cumulative expenditures were $43.9 million.

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NOTE 5 – OTHER INFORMATION (Continued) LA/ONT International Airport Local Control State lawmakers have introduced a bill in the California legislature that would transfer control of LA/Ontario International Airport (ONT) from the City to a regional airport authority. While Airports has indicated its opposition, it cannot predict the outcome of the legislation. In December 2011, the City of Ontario proposed to Airports that the operations of ONT be transferred from the City to the City of Ontario under certain terms. The terms include, among others, paying the City $50.0 million and assumption by the City of Ontario of the existing bonded debt of ONT. In August 2012, the San Bernardino County Board of Supervisors approved the creation of the Ontario International Airport Authority (OIAA) to oversee ONT should the City relinquish control. The OIAA is a joint powers arrangement between the County of San Bernardino and the City of Ontario. On September 21, 2012, as directed by the Trade, Commerce and Tourism Committee of the City Council, the City Administrative Officer (CAO) issued a report related to ONT. The report recommended that the Mayor and Council decline the December 2011 proposal of the City of Ontario. The CAO further recommended that Airports and the City shall negotiate with the City of Ontario, County of San Bernardino, OIAA, and other primary stakeholders to determine the most effective and appropriate ownership and management alternative, and the assigned value of such alternative for ONT. Power Enterprise Fund Regulatory Matters Affecting the Power System Federal Regulation of Transmission Access

The Energy Policy Act of 1992 (the Energy Policy Act) made fundamental changes in the federal regulation of the electric utility industry, particularly in the area of transmission. As amended by the Energy Policy Act, Sections 211, 212, and 213 of the Federal Power Act (FPA) provide Federal Energy Regulatory Commission (FERC) authority, upon application by any electric utility, federal power marketing agency, or other person or entity generating electric energy for sale or resale, to require a transmitting utility to provide transmission services (including any enlargement of transmission capacity necessary to provide such services) to the applicant at rates, charges, terms, and conditions set by FERC based on standards and provisions in the FPA. Under the Energy Policy Act, electric utilities owned by municipalities and other public agencies, which own or operate electric power transmission facilities that are used for the sale of electric energy at wholesale rates are “transmitting utilities” subject to the requirements of Sections 211, 212, and 213.

FERC has encouraged in the past the voluntary formation of regional transmission organizations (RTOs) independent from owners of generation and other market participants that will provide transmission access on a nondiscriminatory basis to buyers and sellers of power. Investor-owned utilities (IOUs) and publicly owned utilities (POUs) have been encouraged to participate in the formation and operation of RTOs, but POUs are not, at this time, being ordered by FERC to participate. FERC has adopted a “go slow” approach to the issue of RTO formation in the western United States; it is contemporaneously engaged in a wholesale overhaul of the California market design, referred to initially as the Market Design 2002 proceeding and lately as the Market Redesign and Technology Update (MRTU) proceeding. These FERC proceedings will have potential impacts on electric utility doing business in California. MRTU involves a

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NOTE 5 – OTHER INFORMATION (Continued) comprehensive overhaul of the electricity markets administered by California Independent System Operator (CAISO), including the areas of transmission congestion management, trading and scheduling energy in the day ahead, or spot market, improved market power mitigation, and pricing transparency measures and system improvements to increase operational efficiency and enhance reliability, among other things. MRTU was implemented on April 1, 2009. At this time, there is no material impact on DWP. In addition, CAISO has announced its intention to implement further market changes over the next several years. Federal Energy Legislation of 2005

On August 8, 2005, the Energy Policy Act of 2005 (EPAct) was enacted, the first comprehensive energy legislation in over a decade. One of the most significant provisions of EPAct empowers the Federal Energy Regulatory Commission (FERC) to certify an Electric Reliability Organization (ERO) to improve the reliability of the nation’s “bulk power system” through mandatory and enforceable electric reliability standards (in contrast to the long-standing voluntary system). The definition of “bulk power system” does not include facilities used in the local distribution of electric energy. The ERO is to file any proposed reliability standard or modification with FERC. “Reliability standards” are a set of criteria and requirements relating to the reliable operation of the bulk-power system. Such a standard includes requirements for the operation of existing transmission facilities or the design of planned additions or modifications (to the extent necessary) to provide for reliable operation. It does not include, and the ERO may not impose, any requirement to enlarge existing or to construct new transmission or generation facilities. All users, owners, and operators of the bulk-power system are required to comply with the electric reliability standards. The ERO may impose a penalty on a user, owner, or operator for violating a reliability standard, and FERC may order compliance with such a standard and impose a penalty if it finds that a user, owner, or operator is about to engage in an act that would violate a reliability standard.

Based on EPAct authority vested upon the FERC, the FERC approved the North American Electric Reliability Corporation (NERC) as the ERO. Currently, there are more than 100 mandatory NERC and Western Electricity Coordinating Council (WECC) reliability standards, all of which are subject to penalties ranging from $1,000 to $1,000,000, depending on the impact of the violation to reliability and other factors. DWP has implemented a NERC/WECC Reliability Standards Compliance Program to proactively prevent, monitor, and stop potential violations to these standards.

EPAct authorizes FERC to require nondiscriminatory access to transmission facilities owned by municipal, cooperative, and other transmission companies not currently regulated by FERC, unless exercising this authority would violate a private activity bond rule for purposes of Section 141 of the Internal Revenue Code of 1986. FERC is prohibited from requiring any such entities to join RTOs. EPAct also allows FERC to issue permits for the construction of new transmission facilities when states have been unable or unwilling to act and allows load-serving entities to use the firm transmission rights, or equivalent tradable or financial transmission rights, in order to deliver output or purchased energy to the extent required to meet its service obligations. EPAct does not relieve a load-serving entity from any obligation under state or local law to build transmission or distribution facilities adequate to meet its service obligations, or to abrogate preexisting firm transmission service contracts.

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EPAct directs FERC to establish, by rule, incentive-based rates for transmission no later than August 2006 and requires FERC to establish market transparency rules for the electric wholesale market (entities that have a de minims market presence are exempt from the rules). EPAct instructs that the market transparency rules must provide for the timely dissemination of information about the availability and prices of wholesale electric energy and transmission service to FERC, state commission, buyers and sellers of wholesale electric energy, users of transmission services, and the public. Within 180 days of EPAct’s enactment, FERC and the Commodity Futures Trading Commission are required to enter into a memorandum of understanding regarding information sharing pursuant to these rules.

In addition, EPAct prohibits any person from willfully and knowingly reporting false information to any federal agency on the price of wholesale electricity or availability of transmission capacity, or using (directly or indirectly) any manipulative device in contravention of any FERC rule. EPAct increases civil and criminal penalties, modifies the procedures for review of FERC orders under the FPA, and changes the refund date under the FPA to be effective as of the date an applicable complaint is filed. EPAct also establishes an entity’s right to a refund if (i) it makes a short-term sale of electric energy through an organized market in which the rates for the sale are set by a FERC-approved tariff (not by a contract) and (ii) the sale violates the terms of the tariff or applicable FERC rule in effect at the time of the sale.

DWP currently complies with the mandatory NERC/WECC Reliability Standards and with the statutory transmission and market requirements from FERC, and uses other FERC transmission policy as guidance for LADWP’s own transmission policy.

Final Rule on Transmission and Cost Allocation – FERC Order No. 1000 (RM10-23-000) On July 21, 2011, the FERC issued its Final Rule on Transmission Planning and Cost Allocation by Transmission Owning and Operating Public Utilities, denominated Order No. 1000 (Docket No. R10-23-000). The Final Rule, which largely mirrors FERC’s proposed rule issued in June 2010, requires public utility transmission providers to: develop and participate in a regional planning process that produces a regional transmission plan, consider state and federal public policy requirements in transmission planning processes, eliminate, with certain exceptions, rights of first refusal contained in FERC-approved tariffs, or contracts that entitle an incumbent utility to build transmission facilities identified in the regional transmission planning processes, develop regional cost allocation methods for transmission projects selected in regional transmission plans, and coordinate with each neighboring planning region to develop procedures for coordination of planning and methods of cost allocation for interregional transmission projects. The Final Rule reflects an ambitious effort by FERC to modify its policies in a manner that will result in more efficient and cost-effective transmission planning and support investment in transmission infrastructure. The Final Rule, however, leaves many of the critical details to be worked out at the regional and interregional levels, and subsequently, to be reviewed by FERC in the form of compliance filings. The Final Rule urges, but does not require, government-owned utilities such as DWP and cooperative utilities to participate in regional transmission planning and cost allocation. FERC indicates that if “nonjurisdictional” transmission owners do not comply with Order No. 1000, they may not meet reciprocity requirements, and thus may have access to third-party transmission services limited. DWP is expected to join a regional planning entity to proactively participate in this process, without commitment to cost allocation, as has been clarified and allowed by FERC.

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NOTE 5 – OTHER INFORMATION (Continued) Dodd-Frank Wall Street Reform and Consumer Protection Act

On July 21, 2010, the “Dodd-Frank Wall Street Reform and Consumer Protection Act” (Dodd-Frank) was signed into law. Dodd-Frank was enacted to minimize systemic risk to the U.S. financial system, in part by establishing new rules related to swaps and other derivatives. First, Dodd-Frank generally requires that parties to swap transactions provide collateral for their swaps. This “margining” requirement means that a party to a swap must set aside cash or other collateral to secure its obligations under the swap. Second, Dodd-Frank generally requires that swap transactions be conducted or “cleared” through financial intermediaries. This clearing requirement means that parties generally cannot enter into a swap that is customized to the needs of the parties, as is typically the case for public power and other electric utilities. Dodd-Frank did, however, provide exceptions to both the margining and clearing requirements for “end users” that are using swaps to hedge commercial risks. A third requirement of Dodd-Frank is to impose reporting requirements on swap transactions, including additional reporting for end-user transactions. Finally, Dodd-Frank imposed additional limitations on swaps with “special entities,” including public power and other governmental entities, to ensure that these special entities are being properly advised and dealt with fairly in consummating swap transactions. These rules require that a swap counterparty ensure that a special entity has an independent swap advisor and impose on the advisor a duty to act in the best interests of the special entity. The CFTC has recently finalized a swap dealer definition exempting entities doing less than $3.0 billion ($8.0 billion during a transition period) in swaps from being regulated as a “swap dealer”, and has further exempted transactions done between not–for–profit utilities from being considered swaps. Unfortunately, the swap dealer definition also includes a $25.0 million sub-threshold over a 12-month period for entities doing business with “special entities” (e.g., governmental entities such DWP) that will cause counterparties that do not want to be swap dealers (e.g., natural gas producers, independent generators, and utility companies) to severely limit their swap activities with government-owned utilities to avoid reaching the $25.0 million threshold. Various organizations representing the “special entities” have requested the CFTC to exclude government-owned utilities’ swap transactions related to utility operations from counting towards the $25.0 million de minimus threshold, and rather be subjected to the overall $3.0 billion threshold. As of this writing, the CFTC has not yet acted on this request. The overall impact of these CFTC rulings on DWP cannot be predicted at this time. Harbor Enterprise Fund Cash Funding of Reserve Fund The Harbor obtains one or more reserve sureties in lieu of fully funding the outstanding bonds’ reserve fund requirement with cash. Three bond insurers provide the reserve sureties. The downgrading of the rating of one of the insurers in June 2008 triggered certain specific requirements in compliance with the indenture. Harbor opted to cash fund its reserve fund requirements in order to comply with its bond covenants. On September 18, 2008, Harbor Board approved the one-time cash funding of the entire reserve requirement of $61.5 million which was transferred to the bond trustee in December 2008. Subsequent to the refunding in July 2011, total reserve fund balance increased to $63.6 million. The required amount for the reserve fund will be re-evaluated annually.

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NOTE 5 – OTHER INFORMATION (Continued) Community Redevelopment Agency (CRA) Agreement On September 20, 2007, Harbor entered into an agreement with CRA for the readying of the underutilized and contaminated industrial properties within the Wilmington Industrial Park. CRA may execute note(s) not to exceed $25.0 million. The notes will become due and payable sixty months from date of execution unless otherwise extended and approved in writing by CRA and Harbor. CRA shall pay down the line of credit by applying proceeds generated from the sale and disposition of acquired properties. CRA was dissolved on February 1, 2012. As of February 1, 2012, there were no drawdowns made by CRA from this line of credit. Sewer Enterprise Fund

Contract Agencies Sewer entered into universal terms agreements with 20 contract agencies for which Sewer provides wastewater treatment services. The contract agencies are billed based on the City’s budgeted costs and agencies’ projected wastewater flow and strength. According to the agreement, the annual billings are reconciled to the City’s actual costs and agencies’ actual flow and strength after the close of the fiscal year. In general, only one fiscal year is being reconciled. The reconciliation process for fiscal year 2012 is still in progress and adjustments to the amounts billed are not determinable at this time.

The cities of Burbank and Los Angeles disagreed on the wastewater flow to be used in the City’s billings. As a result, the billings to the City of Burbank have been on hold. The amounts of the City’s costs that will be recovered from the deferred billings, as well as from future billings, will depend on the result of studies and negotiations between the two cities. Past billings to the City of Burbank may also possibly be recalculated and adjusted. A discrepancy was discovered between two gauging devices that monitor the City’s wastewater flow into the City of Santa Monica. Correction of the discrepancy could potentially reduce revenues from the City of Santa Monica by $0.9 million for wastewater service provided to Santa Monica in fiscal years 2010 to 2013. The Las Virgenes Municipal Water District (District) incorrectly calculated the strength of its wastewater resulting in a credit owed by Sewer. The credit is being applied to the District’s ongoing service charges, with a remaining credit of $.03 million expected at the end of fiscal year 2013. Air Treatment Facilities (ATFs) The Collection System Settlement Agreement (CSSA) requires the construction of seven ATFs as a means of controlling odors that were expected to develop due to high pressures in the North Outfall Relief Sewer, North Outfall Sewer and East Central Interceptor. Two of the facilities have been constructed and the City has installed and is operating temporary odor scrubbers that are currently providing adequate treatment in the remaining five locations. The City conducted a study to determine the necessity of constructing the remaining five ATFs. The study indicates that four of the ATFs are not required for odor treatment. The City has requested a release from the requirement to construct the four ATFs from the court and plaintiffs. If not granted, the additional construction cost to the program is estimated at $60.0 million.

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National Pollutant Discharge Elimination System Permits On December 8, 2011, the Los Angeles Regional Water Quality Control Board (LARWQCB) adopted new National Pollutant Discharge Elimination System (NPDES) permits for the DC Tillman Water Reclamation Plant (DCTWRP) and the Los Angeles-Glendale Water Reclamation Plant (LAGWRP). In March 2010, all parties to the lawsuit filed during the previous permit agreed to a negotiated settlement agreement. As a result of the settlement agreement, most of the Groundwater Monitoring Requirements in the DCTWRP and LAGWRP permits have been removed. Currently, both DCTWRP and LAGWRP are complying with their final permit limits for copper, and neither plant is expected to experience difficulty meeting these final copper limits. In anticipation of the expiration of the copper interim limits, the Cities of Burbank and Los Angeles completed a Copper Site-Specific Objective Study for the Los Angeles River. The study was adopted by the LARWQCB on May 6, 2010. The study has been approved by the State Water Resources Control Board (SWRCB), US EPA and the Office of Administrative Law. The study has also been incorporated into the Los Angeles River heavy metal Total Maximum Daily Loads (TMDLs). Based on the new copper effluent limit, it is anticipated that there will be no potential financial impact to the City. If the plants cannot meet future permit requirements, it is possible that the City may be required to install new treatment processes at a substantial cost to the City. The City cannot currently estimate the cost of such permit requirements, and are not included in the current Capital Improvement Program. The previous permits also required compliance with the Nitrogen TMDL and construction of Nitrification-Denitrification (NDN) facilities. NDN facilities have been constructed at DCTWRP and LAGWRP and both plants are operating in full NDN mode. An Ammonia Site-Specific Objective Study was approved by the LARWQCB and adopted by the SWRCB, Office of Administrative Law and US EPA. The adoption of this study will allow the adjustment of ammonia limits that will allow operators flexibility in the disinfection process. The LARWQCB is in the process of re-opening the Nitrogen TMDL to revise the waste load allocations for ammonia and the permits to revise ammonia permit limits. Sewer is also pursuing the possibility of de-listing the Los Angeles River which would also provide relief from the ammonia wasteload allocations. If the results of the study are not incorporated into the permits, the operator flexibility may be limited and additional modifications to the treatment process may be required. Potential costs for compliance are unknown at this time.

The SWRCB has initiated a process to develop a nutrient policy for inland surface waters in California. The proposed policy will establish methods to develop numeric or narrative water quality objectives for nutrients. Potential impacts of the policy for DCTWRP and LAGWRP may include significant upgrades to the facilities and increased energy demand. Potential cost impacts are unknown at this time. On May 6, 2010, the LARWQCB adopted TIWRP’s new NPDES permit, which will expire on June 25, 2015. The NPDES permit is based upon Resolution 94-009 adopted by LARWQCB in 1994 and as required by the 1974 Bay and Estuary policy calls for the City to eliminate TIWRP tertiary discharge to the Los Angeles Harbor by 2020. Resolution 94-009 sets the goal of eliminating the effluent discharge by expanding the Advance Water Purification Facility (AWPF) and increasing water reuse.

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At this time, it is difficult to project whether this permit requirement will result in additional costs to Sewer. Previous water recycling facilities constructed and operated at TIWRP received funding from DWP. While it is expected that DWP will participate in a cost-sharing agreement for future water recycling facilities, no agreement is currently in place. Total Maximum Daily Loads (TMDLs) The US EPA and the LARWQCB are required to develop TMDLs for impaired water bodies. Various watersheds in the Los Angeles area have water body segments that are listed as impaired due to a variety of pollutants. Although some TMDLs have already been released, additional TMDLs will be under development and compliance with both existing and new TMDLs will continue into the next decade. At this time, it is difficult to predict the full impact of TMDLs on the NPDES effluent limits at the City’s four treatment plants. In addition, the proposed Greater Los Angeles County Municipal Separate Stormwater Sewer Systems (MS4) permit contains provisions that require compliance with all the adopted TMDLs. The proposed MS4 permit is scheduled for adoption in late 2012. It is expected that significant capital improvements may be required to comply with the TMDLs. Judicial Interpretation of Articles XIIIC and XIIID of Proposition 218 In Bighorn-Desert View Water Agency v. Beringson (Bighorn), the California Supreme Court held that fees and charges for ongoing water service through an existing connection were property related fees and charges imposed on a person as an incident of property ownership for purposes of Article XIIID, whether the fees and charges are calculated based on consumption or are imposed as a fixed monthly fee. The City believes that the Bighorn decision, which applied to water fees and charges, would apply equally to sewer service charges. As a result, if the sewer service charges are a “fee” or “charge” under Article XIIID, any increase would require a public hearing, preceded by mailed notices, and would be subject to a majority written protest. The City currently provides written notices to all property owners and rate-payers receiving service in connection with proposed increases in sewer service charges and holds public hearings with respect to such increases. Article XIIIC provides that the initiative power shall not be prohibited or otherwise limited in matters of reducing or repealing any local tax, assessment, fee or charge and that the power of initiative to affect local taxes, assessments, fees and charges shall be applicable to all local governments. Article XIIIC does not define the terms “local tax,” “assessment,” “fee” or “charge.” No assurance can be given that the voters of the City will not, in the future, approve an initiative, which reduces or repeals local taxes, assessments, fees or charges, including a reduction of all or any portion of the sewer service charge. The use of the initiative power is arguably limited in the case of levies directly pledged to bonded indebtedness, such as the sewer service charge. However, there is no assurance that the voters of the City will not approve an initiative that attempts to reduce the sewer service charge. The interpretation and application of Proposition 218 will likely be subject to further judicial determinations, and it is not possible at this time to predict with certainty the outcome of such determinations.

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Fire and Police Pension System Donations

The Pensions has been a recipient of donations in the form of non-voting common stocks of certain non-public corporations (donors). Under the terms of the agreements, the Pensions acknowledged that: (a) the non-voting common stocks have not been registered under the Federal Securities Act of 1933 or qualified under the California Corporate Securities Law of 1968, (b) no public market exists for the non-voting common stocks, and (c) the non-voting common stock are subject to a right of first refusal prohibiting Pensions from selling or otherwise disposing of the stocks without first offering to sell them to the donors. Pensions records the donated stocks at zero cost and zero market value. Donated income is recorded when cash dividends and sales proceeds are received. The last donation of private equity was accepted by Pensions in 2002. Pensions has sold or returned the majority of donation of private equity since August 2005. Through June 30, 2009, the Pensions has received $28.8 million of such donated income. No dividend from these donations was received in fiscal year 2012.

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F. Dissolution of Community Redevelopment Agency and Related Contingencies The enactment in June 2011 of the Dissolution Act, upheld by the California Supreme Court to be largely constitutional on December 29, 2011, resulted in the dissolution of all redevelopment agencies as of February 1, 2012. The Dissolution Act also called for the establishment of successor agencies and other designated entities to initiate the process to unwind the affairs of the former agencies. On June 27, 2012, the Governor signed AB 1484 which makes technical and substantive amendments to the Dissolution Act. On January 11, 2012, the City Council, the legislative body that created the CRA, adopted a resolution wherein it formally elected not to serve as the successor agency. Subsequently, on January 25, 2012, the City Council adopted a resolution to assume only the housing functions and activities of the Former Agency, excluding any amount on deposit in the Low and Moderate Income Housing Fund. Subsequently, and as authorized by State Law, Governor Brown appointed three residents of Los Angeles County as a Designated Local Authority (DLA) to serve as the successor agency. The Dissolution Act provides that all authority, rights, powers, duties, and obligations previously vested with the Former Agency, under the Community Redevelopment Law, are vested in the successor agency [H&SC Section 34173(a)]. The DLA or successor agency was established on February 3, 2012. At its inaugural meeting of the same date, the Governing Board of the DLA adopted Bylaws and other organizational rules and procedures relating to meetings, appointment of officers and delegated authority to management for certain day-to-day functions. The transfer of assets and liabilities of the Former Agency as of February 1, 2012, effectively the same date as of January 31, 2012, to the DLA amounted to $921.2 million (unaudited) and $824.0 million (unaudited), respectively. As discussed in Note 1.E, as a result of the CRA dissolution, the CRA is no longer considered a component unit of the City. Due to this change in reporting entity, the City restated the beginning balances as if CRA was not in the reporting entity in fiscal year 2011. Consequently, CRA’s total assets, liabilities, and net assets as of June 30, 2011 of $916,118 (in thousands), $853,995 (in thousands), and $62,123 (in thousands), respectively, have been eliminated from the City’s financial statements. As of June 30, 2012, the City has yet to assume the housing assets and functions of the Former Agency. The transition of the housing assets and functions is currently on hold pending the completion of the meet and confer process between the State Department of Finance and LAHD. At the time of the release of this report, the number of housing assets and residual receipts to be transferred to LAHD is unknown.

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NOTE 5 – OTHER INFORMATION (Continued) The Former Agency transferred certain properties to the City in fiscal year 2011. On March 8, 2011, the City Council approved the transfer of certain commercial properties costing $3.7 million from the CRA to the City in repayment of CDBG no-terms loans of $50.7 million. On March 22, 2011, the City Council authorized the transfer of additional 74 properties in connection with the implementation of a Cooperation Agreement. At the close of fiscal year 2011, 52 grant deeds, including 106 parcels, with historical cost of $93.4 million were transferred to the City. In addition, the Former Agency entered into memoranda of understanding and cooperation agreement with various City Departments for administrative services and development activities. On April 20, 2012, pursuant to the Dissolution Act, the State Controller issued an order for all cities and other public agencies to reverse any asset transfers unless the city or public agency had committed to a third party for an expenditure or encumbrance of a specific asset prior to June 28, 2011. On November 26, 2012, the City returned certain properties to the DLA as part of this order. While these properties along with others may ultimately be considered for transfer to the City for governmental uses or continued redevelopment as part of the DLA’s Long Range Property Management Plan, the transfer of properties to the City is uncertain at this time. Also, the collectability of funds that were loaned or advanced to the Former Agency is uncertain at this time. The City believes that the obligations of the Former Agency due to the City are valid enforceable obligations under the requirements of the Dissolution Act. The City’s position on this issue is not a position of settled law and there is considerable legal uncertainty regarding this issue. It is reasonably possible that a legal determination may be made at a later date by an appropriate judicial authority that would resolve this issue unfavorably to the City.

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G. Subsequent Events

Indebtedness Subsequent to June 30, 2012, the City issued the following indebtedness:

AmountIssue Date Bond Description (in millions)

July 10, 2012 2012 Tax and Revenue Anticipation Notes 1,256.3$ 2.000 %

December 18, 2012 Airports Senior Revenue Bonds Series 2012-A 105.6 3.000 - 5.000

December 18, 2012 Airports Senior Revenue Bonds Series 2012-B 145.6 2.000 - 5.000

December 18, 2012 Airports Senior Revenue Bonds Series 2012-C 27.9 3.000 - 5.000

August 9, 2012 Water System Revenue Bonds Series 2012-B 322.0 4.060

August 9, 2012 Water System Revenue Bonds Series 2012-C 92.7 2.490

October 25, 2012 Power System Revenue Bonds Series 2012-A 104.1 2.940

October 25, 2012 Power System Revenue Bonds Series 2012-B 350.0 4.160

October 25, 2012 Power System Revenue Bonds Series 2012-C 300.0 0.960

December 18, 2012 Wastewater System Revenue Bonds Series 2012-D Subordinate 280.9 variable

December 18, 2012 Wastewater System Commercial Paper Revenue Note 80.0 variable

(Percentage)Interest Rate

On January 29, 2013, the Mayor and City Council approved two bond issuances for the City's Solid Waste Collection Program (C.F. 13-0086). Solid Waste Resources Revenue Bonds, Series 2013-A, in an amount not to exceed $80.0 million, will be issued for the completion of capital improvements and for the acquisition of equipment and vehicles; and, Solid Waste Resources Revenue Bonds, Series 2013-B, in an amount not to exceed $101.0 million, for the refunding of certain outstanding Solid Waste Resources Revenue Bonds. On October 23, 2012, LAWA sold commercial paper (CP) notes for the redemption of the outstanding LAX Series 2002-A bonds and advance refunding of the outstanding LAX Series 2003-B bonds. The net proceeds of the CP notes of $59.9 million plus $7.5 million from the debt service fund accounts of the aforementioned bonds were deposited into escrow accounts as follows: $33.2 million Series 2002-A Escrow Fund, and $34.2 million Series 2003-B Escrow Fund. On November 1, 2012, the outstanding Series 2002-A bonds with par amount of $32.5 million were redeemed. The amount deposited into the irrevocable Series 2003-B Escrow Fund will provide for all future debt service on the bonds. Accordingly, the refunded bonds with par amount of $31.8 million were considered defeased. The redemption and advance refunding transactions resulted in a net gain for accounting purposes of $0.4 million.

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Airports Enterprise Fund New Rates and Charges Methodology On September 17, 2012, Airports Board approved a new methodology of calculating rates and charges for airlines and airline consortia using passenger terminals at LAX. The new rates that will recover from the airlines costs of acquiring, constructing, operating and maintaining terminal facilities are as follows: (i) terminal building rate, (ii) federal inspection services area (FIS) rate, (iii) common use holdroom rate, (iv) common use baggage claim rate, (v) common use outbound baggage system rate, (vi) common use ticket counter rate, and (vii) terminal special charges for custodial services, outbound baggage system maintenance, terminal airline support systems, and loading bridge capital and maintenance. The new rates shall apply beginning January 1, 2013 to airlines and airline consortia agreeing to the new methodology and executing a rate agreement with Airports (signatory airlines) by December 15, 2012. Agreements executed after December 15, 2012 shall commence on the first day of the next month beginning no less than sixty days after the execution of the agreement. Agreements with signatory airlines terminate on December 31, 2022. The new rate agreement provides a Signatory Transitional Phase-in (STP) program that allows for reduced rates during the first five years of the implementation period. In addition, signatory airlines will share in the concession revenue derived from the terminals based on prescribed two-tiered formulae. Tier One Revenue Sharing will have the effect of reducing the calculated terminal building rate (beginning calendar year 2014) and FIS rate (beginning calendar year 2016). Tier Two Revenue Sharing will be distributed to signatory airlines in the form of a credit at the end of each calendar year beginning in 2014, subject to certain conditions. Airlines with existing leases that opt not to sign an agreement under the new methodology (non-signatory tenant airlines) will continue to pay rates and charges based on their current leases until they sign the new rate agreement. Airlines with no existing leases that opt not to sign the new rate agreement (non-signatory tariff airlines) will be charged with the new rates effective January 1, 2013. Non-signatory airlines are not eligible to participate in the STP and revenue sharing programs. American Airlines Terminal Lease On November 29, 2012, the Bankruptcy Court granted American Airlines’ motion to assume the Terminal 4 lease at LAX. The parties involved are discussing the cure amount of the lease for the April 2013 hearing. LAX Modernization On December 17, 2012, Airports Board approved the award of a $300.0 million, three-year construction contract for the “Construction of Central Terminal Area Improvements” project at LAX. The project will upgrade the existing terminals’ infrastructure for systems reliability and efficiency, support the Concessions Redevelopment Program, enhance customer service and convenience, and address building and fire code compliance issues.

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LA/Ontario International Airport (ONT) Local Control On December 17, 2012, Airports Board directed Airport’s executive director to make efforts by April 1, 2013, to negotiate a Letter of Intent between Airports and the Ontario International Airport Authority (OIAA) establishing terms, consistent with certain guiding principles, that would result in Airports divesting of ONT through a sale to OIAA, recognizing that Airports Board has not to date endorsed any sale of ONT but seeks to initiate actions consistent with the recommendations of the City Council and City Administrative Officer. Convention Center On December 18, 2012, the City Council authorized the release of a Request for Proposal for the operation and management of the Convention Center (C.F. 12-0692). In addition to other actions, it instructed the City Administrative Officer and the City Legislative Analyst, and requested the City Attorney, to report on legislative actions necessary to 1) expand the duties and scope of responsibilities of the existing LACC Commission to instead operate as a Board of Commissioners that advises the Mayor and Council on all policies related to tourism, marketing Los Angeles, convention business, and administration of the Alternative Service Management and Los Angeles Tourism and Convention Board agreements; and, 2) create a Chief Executive Officer position that serves as a representative of the Board and a liaison to Mayor, Council, and City department. The City Council also required submission of a policy and fiscal analysis of the tax exempt status of Convention Center bonds and any related changes that may occur with approved or proposed actions. Harbor Enterprise Fund Commercial Paper Program On June 7, 2012, Harbor Board approved an increase in the standby line of credit to $250.0 million from $200.0 million and extended the commercial paper program through July 2015. At the same meeting, Harbor Board approved the replacement of the commercial paper liquidity provider, JP Morgan Chase Bank, whose contract expired on July 29, 2012, with Mizuho Corporate Bank and Wells Fargo Bank at $125.0 million each. Redemption of 2002 Harbor Revenue Bonds Series A On August 1, 2012, Harbor redeemed the outstanding $18.1 million of 2002 Harbor Revenue Bonds Series A, which had a 5.50% coupon rate. The bonds were redeemed with $6.7 million of debt service reserve fund proceeds and with $11.4 million of cash from operations. With the repayment, the debt service reserve requirement was reduced to $58.2 million. Alameda Corridor Transportation Authority (ACTA) Agreement In ACTA’s Notice of Port Shortfall Advance dated August 8, 2012, a revised Shortfall Advance of $3.0 million each from Harbor and Port of Long Beach is due no later than September 24, 2012. On June 30, 2012, Harbor charged this shortfall amount to nonoperating expense, and was recorded as a current liability. Harbor paid this shortfall advance on September 14, 2012.

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Port Operators Labor Dispute In December 2012, employees of various Harbor operators assembled a worker’s strike on their employers. The estimated financial impact to Harbor operators as a result of this strike is unknown. However, the strike did not have any financial impact on Harbor, as Harbor operators affected by the strike continued to make contractual lease payments to Harbor. Power Enterprise Fund Bond Sale

On January 11, 2013, the DWP Board authorized the issuance of up to $625.0 million of Power System Revenue Bonds, 2013 Series A, to refund certain outstanding Power System Revenue Bonds, 2003 Series A, Subseries A-1 and Subseries A-2 Bonds, under Resolution No. 4857. Rate Action In October 2012, the Los Angeles City Council, approved two years of revenue increases for the Power System. System average rates will increase approximately 4.9% and 6.0% for fiscal years 2013 and 2014, respectively.

Fire and Police Pension System On September 12, 2012, Governor Jerry Brown signed Assembly Bill 340, known as the California public Employees’ Pension Reform Act of 2013 (CalPEPRA) into law. The new law is complex and broad-reaching and takes effect on January 1, 2013. Pensions is currently working with the City to analyze CalPEPRA and determine how it will apply to the City of Los Angeles. Los Angeles City Employees’ Retirement System On October 26, 2012, the City Council approved amending Chapter 10 and 11 of Division 4 of the Administrative Code to establish a second tier (Tier 2) with different retirement and postemployment healthcare benefits, and conditions of entitlement for new hires who become LACERS members on or after July 1, 2013.

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H. Other Matters Affecting the City’s Future Operations

The fiscal year 2013 General Fund adopted budget was balanced through a combination of expenditure cuts and revenue enhancements. Significant revenue solutions included past and ongoing reimbursement of fire emergency medical services pursuant to Assembly Bill (AB) 678; ambulance billing efficiencies; past set asides and ongoing ex-CRA tax increment receipts; surplus transfer from the Special Parking Revenue Fund; and, increased parking citation receipts for productivity improvements implemented in fiscal year 2012, expanded part-time traffic officers program, and increased parking fines for certain violations.

Aside from various expenditure reductions, the fiscal year 2013 budget included reimbursements of related costs by special funds and cost savings such as furloughs for certain bargaining unit, as well as workforce attrition and reduction that downsized authorized position counts.

The City Administrative Officer (CAO) reports to the Mayor and City Council on the status of the budget. In its First Financial Status Report (FSR), dated October 23, 2012, estimated receipts through September 2012, met planned revenue. However, revenue such as Fire medical reimbursement and ex-CRA tax increment receipts may be uncertain. It also raised concerns about factors that may erode the fragile economic recovery. The CAO projected expenditure shortfalls in sworn and civilian salaries, as well as other operating and maintenance accounts. The shortfalls assumed that the 209 positions, of which 186 were filled as of October 2012, would be eliminated as scheduled and no adverse outcome would result from litigation challenging the City’s use of mandatory furloughs on employees represented by the Los Angeles City Attorneys Association.

The CAO’s Four Year Budget Outlook reflects ongoing structural deficit through fiscal year 2015. For fiscal year 2014, the estimated budgetary shortfall of $216.0 million assumed elimination of 209 positions previously mentioned. The fiscal year 2014 deficit would rise by $16.0 million to $232.0 million if the positions were not eliminated. The City Council continued temporary employment, rather than initiate the layoff process for those employees, pending identification of additional transfer opportunities with the goal of further reducing or eliminating all layoffs. The City Council adopted a goal to increase the Budget Stabilization Fund from its current balance of approximately $0.5 million to $40.0 million by the end of fiscal year 2013 for the purpose of protecting critical priority services in fiscal year 2014.

Due to actions by Congress relative to sequestration on March 1, 2013, the City could experience cuts in federal funding as high as $115.0 million in fiscal year 2013, with a majority of the cuts in housing, community development, public safety, and homeland security.

Half-Cent Sales Tax Measure

On November 20, 2012, the City Council adopted Ordinance No. 182331 to place a half-cent transactions and use (sales) tax measure on the City’s March 5, 2013 primary Nominating Election. The ordinance became effective December 7, 2012, without the Mayor’s signature. The Mayor advised the City Council that he would submit a balanced fiscal year 2014 proposed budget with a new package of reforms rather than assumed passage of the tax measure.

If approved by voters, the sales tax rate would increase from 9.0% to 9.5%, of which the City’s share would increase from 0.75% to 1.25%. The estimated General Fund revenue would be approximately $211.0 million annually, of which approximately $106.0 million would be received in its first year of implementation in fiscal year 2014.

CITY OF LOS ANGELES

REQUIRED SUPPLEMENTARY INFORMATION Fiscal Year Ended June 30, 2012

(Unaudited)

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Benefit Pension Plans Schedule of Funding Progress


UnderfundedActuarial AAL as a

Actuarial Actuarial Accrued PercentageValuation Value of Liability Underfunded Funded Covered of Covered

Date Assets (AAL) AAL Ratio Payroll Payroll

Fire and Police Pension Plan

6/30/10 14,219,581$ 15,520,625$ 1,301,044$ 91.6% 1,356,986$ 95.9%6/30/11 14,337,669 16,616,476 2,278,807 86.3% 1,343,963 169.6%6/30/12 14,251,914 17,030,833 2,778,919 83.7% 1,341,914 207.1%

Los Angeles City Employees' Retirement Plan

6/30/10 9,554,027$ 12,595,025$ 3,040,998$ 75.9% 1,817,662$ 167.3%6/30/11 9,691,011 13,391,704 3,700,693 72.4% 1,833,392 201.9%6/30/12 9,934,959 14,393,959 4,459,000 69.0% 1,819,270 245.1%

Water and Power Employees' Retirement and Death Benefit Insurance Plan

7/1/10 7,244,430$ 8,893,618$ 1,649,188$ 81.5% 856,090$ 192.6%7/1/11 7,465,184 9,297,204 1,832,020 80.3% 870,203 210.5%7/1/12 7,573,886 9,692,603 2,118,717 78.1% 886,539 239.0%

Other Postemployment Benefits Healthcare Plans

Schedule of Funding Progress (amounts expressed in thousands)

Underfunded

Actuarial AAL as aActuarial Actuarial Accrued PercentageValuation Value of Liability Underfunded Funded Covered of Covered

Date Assets (AAL) AAL Ratio Payroll Payroll

Fire and Police Health Subsidy Plan

6/30/10 817,276$ 2,537,825$ 1,720,549$ 32.2% 1,356,986$ 126.8%6/30/11 882,890 2,557,607 1,674,717 34.5% 1,343,963 124.6%6/30/12 927,362 2,499,289 1,571,927 37.1% 1,341,914 117.1%

Los Angeles City Employees' Postemployment Healthcare Plan

6/30/10 1,425,726$ 2,233,874$ 808,148$ 63.8% 1,817,662$ 44.5%6/30/11 1,546,884 1,968,708 421,824 78.6% 1,833,392 23.0%6/30/12 1,642,374 2,292,400 650,026 71.6% 1,819,270 35.7%

Water and Power Employees' Retiree Health Benefits Plan

7/1/10 987,476$ 1,631,916$ 644,440$ 60.5% 856,090$ 75.3%7/1/11 1,132,929 1,550,896 417,967 73.0% 870,203 48.0%7/1/12 1,244,039 1,566,059 322,020 79.4% 886,539 36.3%

CITY OF LOS ANGELES

REQUIRED SUPPLEMENTARY INFORMATION Fiscal Year Ended June 30, 2012

(Unaudited)

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Condition Rating for City Bridges As of July 1, 2010

Rating

No. of A = 90% - 100% B = 80% - 89% C = 70% - 79% D = 50% - 69% F = below 50% Bridge Type Bridges (very good) (good to fair) (fair to poor) (very poor) (failure)

Vehicular 425 207 83 104 31 -- Pedestrian 66 8 56 2 -- -- Tunnel 15 10 3 2 -- -- Bikeway 2 1 1 -- -- -- Total 508 226 143 108 31 -- Percentage 100% 45% 28% 21% 6% 0%

Note: Based on rev ised/amended Nov ember 2010 condition assessment. The nex t condition assessment w ill be completed in fiscal y ear 2013.

Condition Rating for City Bridges As of July 1, 2007

Rating

No. of A = 90% - 100% B = 80% - 89% C = 70% - 79% D = 50% - 69% F = below 50% Bridge Type Bridges (very good) (good to fair) (fair to poor) (very poor) (failure)

Vehicular 425 214 73 117 21 -- Pedestrian 66 16 48 2 -- -- Tunnel 14 7 5 2 -- -- Bikeway 2 1 1 -- -- -- Total 507 238 127 121 21 -- Percentage 100% 47% 25% 24% 4% 0%

Comparison of Needed-to-Actual Maintenance/Preservation Costs (amounts expressed in thousands)

Fiscal Year Ended June 30

2008 2009 2010 2011 2012Needed 35,080$ 29,434$ 73,772$ 98,794$ 92,769$ Actual 35,789 51,101 39,818 41,003 37,726

The Bridges and Tunnel System is a comprehensive bridge database system that enables the City to track the entire bridge inventory, inspection data, repair records, structural condition of various bridge elements, bridge sufficiency rating, cost data, traffic data, and geometric data. The Sufficiency Rating given each bridge is in accordance with national standards developed by the Federal Highway Administration. The Sufficiency Rating ranges from 0% to 100% and is composed of the following elements: Structural Safety and Adequacy (S1=55%), Serviceability and Functional Obsolescence (S2=30%), Essentiality for Public Use (S3=15%), and Special Reductions (S4=up to a maximum of 13%). The Special Reductions is provided for long detour distance, traffic safety features, and structure type. The Sufficiency Rating is computed by summing the four elements (SR = S1+ S2+ S3 –S4). It is the City’s policy that bridges shall be maintained so that at least 70% of the bridges are rated “B” or better, and no bridge shall be rated less than “D.” As of June 30, 2010, the overall ratings of the City’s bridges meet these standards. The latest condition assessments, that are determined every three years, were completed in November 2010. The initial November 2010 condition assessment report shows three bridges with ratings of “F” or below 50% rating. However, the original assessment report was revised and showed corrected ratings of “D” or 50%-69% for the three bridges. The next condition assessment will be completed in fiscal year 2013.

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CITY OF LOS ANGELES

COMBINING AND INDIVIDUAL FUND FINANCIAL STATEMENTS AND SCHEDULES The other governmental funds combining balance sheet and other governmental funds combining statement of revenues, expenditures and changes in fund balances provide the detail for the combined amounts presented in the basic financial statements (pages 35-38 and pages 40-41, respectively). Subcombining statements are presented to provide the detail for the Nonmajor Special Revenue Funds, Nonmajor Debt Service Funds, and Nonmajor Capital Projects Funds. In addition, budgetary comparison schedules are presented for each of the Nonmajor Budgeted Funds. The combining statements for the fiduciary funds are also presented for the Pension and Other Employee Benefits Trust Funds, and Agency Funds to provide the detail for the combined amounts presented in the basic financial statements (pages 58 and 59).

CITY OF LOS ANGELES

Combining Balance SheetOther Governmental Funds


Nonmajor Nonmajor Nonmajor TotalSpecial Debt Capital Other

Revenue Service Projects GovernmentalFunds Funds Funds Funds

ASSETS

Cash and Pooled Investments 1,196,249$ 218,796$ 748,441$ 2,163,486$

Other Investments -- 13,705 -- 13,705

Taxes Receivable

(Net of Allowance for Uncollectibles of $6,752) 6,983 29,437 -- 36,420

Accounts Receivable

(Net of Allowance for Uncollectibles of $33,603) 16,061 -- 2,803 18,864

Special Assessments Receivable 18,249 -- 2,897 21,146

Investment Income Receivable 4,059 545 2,829 7,433

Intergovernmental Receivable 136,642 -- 524 137,166

Loans Receivable

(Net of Allowance for Uncollectibles of $786,166) 307,914 -- -- 307,914

Due from Other Funds 84,916 -- 367 85,283

Prepaid Items and Other Assets 2,915 -- -- 2,915

Advances to Other Funds 69,052 -- -- 69,052

Restricted Assets 3,474 -- -- 3,474

TOTAL ASSETS 1,846,514$ 262,483$ 757,861$ 2,866,858$


LIABILITIES

Accounts, Contracts and Retainage Payable 126,292$ --$ 10,808$ 137,100$

Accrued Salaries and Overtime Payable 2,102 -- -- 2,102

Accrued Compensated Absences Payable 21 -- -- 21

Intergovernmental Payable 2,817 -- 18 2,835

Due to Other Funds 89,996 -- 5,922 95,918

Deferred Revenue and Other Credits 94,607 17,851 2,332 114,790

Deposits and Advances 17,233 -- 4 17,237

Matured Bonds and Interest Payable -- 307 -- 307

Advances from Other Funds 104,002 -- 8,849 112,851

Other Liabilities 61,109 4,587 19,950 85,646

TOTAL LIABILITIES FORWARDED 498,179 22,745 47,883 568,807

Continued….

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CITY OF LOS ANGELES

Combining Balance SheetOther Governmental Funds




TOTAL LIABILITIES FORWARDED 498,179$ 22,745$ 47,883$ 568,807$

FUND BALANCESNonspendable:

Prepaid Items and Other Assets 2,915 -- -- 2,915 Advances to Other Funds 69,052 -- -- 69,052

Restricted for:Animal Shelter Facilities -- -- 25,034 25,034 Community Development 331,148 -- -- 331,148 Construction and Engineering Regulation Enforcement 1,397 -- -- 1,397 Cultural Activities 16,147 -- 1,797 17,944 Debt Service 3,538 239,738 542 243,818 Fire Prevention and Emergency Preparedness 471 -- -- 471 General Government 1,839 -- -- 1,839 Health, Environment and Sanitation Programs 90,081 -- -- 90,081 Landfill Closure and Postclosure Maintenance 20 -- -- 20 Law Enforcement 54,104 -- -- 54,104 Library 5,073 -- 2,502 7,575 Other Capital Projects 18,320 -- -- 18,320 Other Purposes 1,631 -- -- 1,631 Police, Fire and 911 Facilities -- -- 215,373 215,373 Recreation and Parks 3,596 -- 190,939 194,535 Seismic Improvement 33,505 -- 2,229 35,734 Social Services 4,864 -- -- 4,864 Solid Waste 19,246 -- -- 19,246 Stormwater Cleanup Capital Projects 8,352 -- 264,920 273,272 Street Services 123,871 -- -- 123,871 Transportation 235,142 -- 6,642 241,784

Assigned to:Community Development 98,252 -- -- 98,252 Construction and Engineering Regulation Enforcement 49,754 -- -- 49,754 Cultural Activities 4,466 -- -- 4,466 Fire Prevention and Emergency Preparedness 10,487 -- -- 10,487 General Government 48,269 -- -- 48,269 Health, Environment and Sanitation Programs 7,751 -- -- 7,751 Landfill Closure and Postclosure Maintenance 10,945 -- -- 10,945 Law Enforcement 2,987 -- -- 2,987 Library 4,534 -- -- 4,534 Other Capital Projects 2,442 -- -- 2,442 Other Purposes 25,218 -- -- 25,218 Recreation and Parks 4,430 -- -- 4,430 Social Services 385 -- -- 385 Street Services 6,838 -- -- 6,838 Transportation 54,658 -- -- 54,658

Unassigned (7,393) -- -- (7,393)

TOTAL FUND BALANCES 1,348,335 239,738 709,978 2,298,051

TOTAL LIABILITIES AND FUND BALANCES 1,846,514$ 262,483$ 757,861$ 2,866,858$

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CITY OF LOS ANGELES

Combining Statement of Revenues, Expendituresand Changes in Fund Balances

Other Governmental FundsFor the Fiscal Year Ended June 30, 2012




REVENUESProperty Taxes 32,867$ 161,153$ --$ 194,020$ Other Taxes 57,884 -- 1,311 59,195 Licenses and Permits 32,856 -- 20 32,876 Intergovernmental 704,780 517 12,677 717,974 Charges for Services 335,850 4,536 2,660 343,046 Services to Enterprise Funds 3,021 -- -- 3,021 Fines 10,637 -- -- 10,637 Special Assessments 96,307 -- 25,154 121,461 Investment Earnings 18,899 3,593 14,386 36,878 Program Income 19,674 -- -- 19,674 Other 49,191 -- 317 49,508

TOTAL REVENUES 1,361,966 169,799 56,525 1,588,290

EXPENDITURESCurrent:

General Government 36,426 -- -- 36,426 Protection of Persons and Property 252,275 -- -- 252,275 Public Works 224,114 -- -- 224,114 Health and Sanitation 76,777 -- -- 76,777 Transportation 155,361 -- -- 155,361 Cultural and Recreational Services 136,986 -- -- 136,986 Community Development 337,838 -- -- 337,838

Capital Outlay 203,812 -- 118,463 322,275 Debt Service:

Principal 5,907 181,715 -- 187,622 Interest 3,149 106,422 -- 109,571 Cost of Issuance -- 2,889 -- 2,889

TOTAL EXPENDITURES 1,432,645 291,026 118,463 1,842,134

EXCESS (DEFICIENCY) OF REVENUES OVER EXPENDITURES (70,679) (121,227) (61,938) (253,844)

OTHER FINANCING SOURCES (USES)Transfers In 153,229 110,597 4,735 268,561 Transfers Out (60,090) (3,089) (3,793) (66,972) Issuance of Long-term Debt -- -- 117,000 117,000 Premium on Issuance of Long-term Debt -- 11,926 -- 11,926 Loans from HUD 52,521 -- -- 52,521 Issuance of Refunding Bonds -- 485,510 -- 485,510 Premium on Issuance of Refunding Bonds -- 89,330 -- 89,330 Payment to Refunded Bond Escrow Agent -- (572,697) -- (572,697)

TOTAL OTHER FINANCING SOURCES (USES) 145,660 121,577 117,942 385,179

NET CHANGE IN FUND BALANCES 74,981 350 56,004 131,335

FUND BALANCES, JULY 1 1,273,354 239,388 653,974 2,166,716

FUND BALANCES, JUNE 30 1,348,335$ 239,738$ 709,978$ 2,298,051$

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Variance WithOriginal Additional Final BudgetAdopted Appropriations Final Encumbrances Total PositiveBudget and Transfers Budget Expenditures June 30, 2012 Actual (Negative)

GENERAL GOVERNMENT City Administrative Officer 11,581$ 2,509$ 14,090$ 11,593$ 1,199$ 12,792$ 1,298$ City Attorney 94,952 8,554 103,506 95,775 6,662 102,437 1,069 City Clerk 8,604 4,951 13,555 10,278 824 11,102 2,453 Controller 13,791 3,034 16,825 14,430 1,645 16,075 750 Council 18,882 17,988 36,870 25,308 1,670 26,978 9,892 Employee Relations Board 422 (39) 383 272 35 307 76 Ethics Commission 2,031 55 2,086 1,688 135 1,823 263 Finance 37,644 4,823 42,467 37,561 4,499 42,060 407 General Services 228,012 86,544 314,556 253,642 25,691 279,333 35,223 Information Technology Agency 78,379 12,203 90,582 69,515 20,065 89,580 1,002 Mayor 22,752 14,037 36,789 25,833 8,695 34,528 2,261 Neighborhood Empowerment 1,832 91 1,923 1,622 62 1,684 239 Personnel 41,267 1,420 42,687 36,012 3,589 39,601 3,086 Non-Departmental

Capital Finance Administration 52,635 (337) 52,298 51,894 65 51,959 339 General City Purposes 80,622 (24,706) 55,916 40,642 10,549 51,191 4,725 Human Resources Benefits 553,488 (3,702) 549,786 535,641 10,493 546,134 3,652 Liability Claims 47,850 1,325 49,175 49,057 -- 49,057 118 Unappropriated Balance 21,679 (8,159) 13,520 -- -- -- 13,520 Water and Electricity 26,702 -- 26,702 16,219 10,483 26,702 --

TOTAL GENERAL GOVERNMENT 1,343,125 120,591 1,463,716 1,276,982 106,361 1,383,343 80,373

PROTECTION OF PERSONS AND PROPERTY

Animal Services 19,920 465 20,385 19,076 1,065 20,141 244 Building and Safety 68,944 2,821 71,765 67,830 2,713 70,543 1,222 Emergency Management 1,600 1,291 2,891 2,366 103 2,469 422 Fire 472,597 34,246 506,843 483,352 19,510 502,862 3,981 Police 1,167,772 75,871 1,243,643 1,178,054 56,344 1,234,398 9,245

TOTAL PROTECTION OF PERSONS AND PROPERTY 1,730,833 114,694 1,845,527 1,750,678 79,735 1,830,413 15,114

PUBLIC WORKS Public Works Bureaus

Board of Public Works 15,212 5,064 20,276 17,468 2,314 19,782 494 Bureau of Contract Administration 28,487 3,664 32,151 27,034 1,090 28,124 4,027 Engineering 71,568 5,298 76,866 67,181 3,101 70,282 6,584 Street Lighting 23,908 6,309 30,217 23,615 1,289 24,904 5,313 Street Services 146,019 35,717 181,736 147,089 20,040 167,129 14,607

Non-Departmental Water and Electricity 4,966 -- 4,966 3,407 1,559 4,966 --

TOTAL PUBLIC WORKS 290,160 56,052 346,212 285,794 29,393 315,187 31,025

HEALTH AND SANITATION Public Works- Bureau of Sanitation 221,353 44 221,397 190,222 9,109 199,331 22,066 Non-Departmental

Water and Electricity 850 -- 850 385 465 850 --

TOTAL HEALTH AND SANITATION 222,203 44 222,247 190,607 9,574 200,181 22,066 Continued...



CITY OF LOS ANGELES

Supplemental Schedule of Budget Appropriations,Expenditures and Other Financing Uses by Function

Budget and Actual (Non-GAAP Budgetary Basis)

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Variance With Original Additional Final Budget

Adopted Appropriations Final Encumbrances Total PositiveBudget and Transfers Budget Expenditures June 30, 2012 Actual (Negative)

TRANSPORTATION 127,918$ 12,130$ 140,048$ 125,531$ 8,561$ 134,092$ 5,956$

CULTURAL AND RECREATIONAL SERVICES

Convention Center 24,265 560 24,825 22,654 1,084 23,738 1,087 Cultural Affairs 7,421 720 8,141 6,011 1,406 7,417 724 El Pueblo De Los Angeles Historical Monument Authority 1,517 127 1,644 1,455 98 1,553 91 Zoo 18,283 (41) 18,242 16,071 955 17,026 1,216 Non-Departmental

Water and Electricity 3,460 -- 3,460 1,970 1,490 3,460 --

TOTAL CULTURAL AND RECREATIONAL SERVICES 54,946 1,366 56,312 48,161 5,033 53,194 3,118

COMMUNITY DEVELOPMENT Aging 3,793 996 4,789 3,235 251 3,486 1,303 Community Development 26,620 4,259 30,879 26,936 1,782 28,718 2,161 Disability 1,609 (129) 1,480 1,218 167 1,385 95 Los Angeles Housing 52,146 2,938 55,084 48,166 2,118 50,284 4,800 Planning 25,393 (48) 25,345 20,786 1,564 22,350 2,995

TOTAL COMMUNITY DEVELOPMENT 109,561 8,016 117,577 100,341 5,882 106,223 11,354

PENSION AND RETIREMENT CONTRIBUTIONS

Non-Departmental General City Purposes 1,630 (140) 1,490 1,365 86 1,451 39 ,

CAPITAL OUTLAY Non-Departmental

Capital Improvement Projects 6,510 21,287 27,797 6,050 3,713 9,763 18,034

TRANSFERS TO OTHER FUNDS Non-Departmental

Capital Finance Administration 149,463 9,616 159,079 153,463 140 153,603 5,476 General 1,166,269 (75,062) 1,091,207 1,091,207 -- 1,091,207 --

TOTAL TRANSFERS TO OTHER FUNDS 1,315,732 (65,446) 1,250,286 1,244,670 140 1,244,810 5,476

GRAND TOTAL 5,202,618$ 268,594$ 5,471,212$ 5,030,179$ 248,478$ 5,278,657$ 192,555$



CITY OF LOS ANGELES

Supplemental Schedule of Budget Appropriations,Expenditures and Other Financing Uses by Function

Budget and Actual (Non-GAAP Budgetary Basis) - (Continued)

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CITY OF LOS ANGELES

Supplemental Schedule of Budget Appropriations,Expenditures and Other Financing Uses by Function and Object

Budget and Actual (Non-GAAP Budgetary Basis)General Fund


Variance WithOriginal Additional Final BudgetAdopted Appropriations Final Encumbrances Total Positive Budget and Transfers Budget Expenditures June 30, 2012 Actual (Negative)

GENERAL GOVERNMENT

CITY ADMINISTRATIVE OFFICER

Salaries 10,030$ 1,417$ 11,447$ 10,596$ 492$ 11,088$ 359$ Expenses 1,324 1,272 2,596 950 707 1,657 939 Equipment -- 47 47 47 -- 47 -- Special 227 (227) -- -- -- -- --

Subtotal 11,581 2,509 14,090 11,593 1,199 12,792 1,298

CITY ATTORNEYSalaries 85,977 5,585 91,562 87,282 3,615 90,897 665 Expenses 7,166 1,475 8,641 6,873 1,364 8,237 404 Special 1,809 1,494 3,303 1,620 1,683 3,303 --

Subtotal 94,952 8,554 103,506 95,775 6,662 102,437 1,069

CITY CLERKSalaries 7,638 1,536 9,174 8,800 293 9,093 81 Expenses 437 3,934 4,371 1,478 531 2,009 2,362 Special 529 (519) 10 -- -- -- 10

Subtotal 8,604 4,951 13,555 10,278 824 11,102 2,453

CONTROLLERSalaries 12,065 2,927 14,992 13,822 538 14,360 632 Expenses 1,117 661 1,778 608 1,053 1,661 117 Equipment 55 -- 55 -- 54 54 1 Special 554 (554) -- -- -- -- --

Subtotal 13,791 3,034 16,825 14,430 1,645 16,075 750

COUNCILSalaries 17,646 16,197 33,843 23,568 957 24,525 9,318 Expenses 1,096 1,931 3,027 1,740 713 2,453 574 Special 140 (140) -- -- -- -- --

Subtotal 18,882 17,988 36,870 25,308 1,670 26,978 9,892

EMPLOYEE RELATIONS BOARD

Salaries 278 14 292 264 14 278 14 Expenses 91 -- 91 8 21 29 62 Special 53 (53) -- -- -- -- --

Subtotal 422 (39) 383 272 35 307 76

ETHICS COMMISSIONSalaries 1,685 97 1,782 1,625 65 1,690 92 Expenses 336 (32) 304 63 70 133 171 Special 10 (10) -- -- -- -- --

Subtotal 2,031 55 2,086 1,688 135 1,823 263

FINANCESalaries 25,605 670 26,275 25,001 1,004 26,005 270 Expenses 11,614 4,223 15,837 12,517 3,202 15,719 118 Equipment -- 355 355 43 293 336 19 Special 425 (425) -- -- -- -- --

Subtotal 37,644 4,823 42,467 37,561 4,499 42,060 407 Continued...

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CITY OF LOS ANGELES

Supplemental Schedule of Budget Appropriations,Expenditures and Other Financing Uses by Function and ObjectBudget and Actual (Non-GAAP Budgetary Basis) - (Continued)




GENERAL SERVICESSalaries 112,392 43,355 155,747 129,565 5,256 134,821 20,926 Expenses 108,045 46,556 154,601 120,477 19,839 140,316 14,285 Equipment 171 172 343 33 298 331 12 Special 7,404 (3,539) 3,865 3,567 298 3,865 --

Subtotal 228,012 86,544 314,556 253,642 25,691 279,333 35,223

INFORMATION TECHNOLOGY AGENCY

Salaries 43,040$ 7,416$ 50,456$ 47,865$ 1,830$ 49,695$ 761$ Expenses 15,835 7,494 23,329 13,081 10,170 23,251 78 Equipment 168 342 510 203 145 348 162 Special 19,336 (3,049) 16,287 8,366 7,920 16,286 1

Subtotal 78,379 12,203 90,582 69,515 20,065 89,580 1,002

MAYORSalaries 6,880 8,100 14,980 13,302 516 13,818 1,162 Expenses 15,852 5,957 21,809 12,531 8,179 20,710 1,099 Special 20 (20) -- -- -- -- --

Subtotal 22,752 14,037 36,789 25,833 8,695 34,528 2,261

NEIGHBORHOOD EMPOWERMENT

Salaries 1,513 (22) 1,491 1,431 54 1,485 6 Expenses 250 119 369 191 8 199 170 Special 69 (6) 63 -- -- -- 63

Subtotal 1,832 91 1,923 1,622 62 1,684 239

PERSONNELSalaries 31,216 1,274 32,490 30,588 1,352 31,940 550 Expenses 6,701 1,031 7,732 3,952 2,004 5,956 1,776 Special 3,350 (885) 2,465 1,472 233 1,705 760

Subtotal 41,267 1,420 42,687 36,012 3,589 39,601 3,086

NON-DEPARTMENTALCapital Finance Administration 52,635 (337) 52,298 51,894 65 51,959 339 General City Purposes 80,622 (24,706) 55,916 40,642 10,549 51,191 4,725 Human Resources Benefits 553,488 (3,702) 549,786 535,641 10,493 546,134 3,652 Liability Claims 47,850 1,325 49,175 49,057 -- 49,057 118 Unappropriated Balance 21,679 (8,159) 13,520 -- -- -- 13,520 Water and Electricity 26,702 -- 26,702 16,219 10,483 26,702 --

Subtotal 782,976 (35,579) 747,397 693,453 31,590 725,043 22,354

TOTAL GENERAL GOVERNMENT 1,343,125 120,591 1,463,716 1,276,982 106,361 1,383,343 80,373

PROTECTION OF PERSONS AND PROPERTY

ANIMAL SERVICESSalaries 17,862 1,114 18,976 18,027 706 18,733 243 Expenses 1,822 (413) 1,409 1,049 359 1,408 1 Special 236 (236) -- -- -- -- --

Subtotal 19,920 465 20,385 19,076 1,065 20,141 244 Continued...

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CITY OF LOS ANGELES





BUILDING AND SAFETYSalaries 64,487$ 5,103$ 69,590$ 66,092$ 2,575$ 68,667$ 923$ Expenses 2,069 106 2,175 1,738 138 1,876 299 Special 2,388 (2,388) --

Subtotal 68,944 2,821 71,765 67,830 2,713 70,543 1,222

EMERGENCY MANAGEMENT

Salaries 1,517 1,307 2,824 2,311 92 2,403 421 Expenses 71 (4) 67 55 11 66 1 Special 12 (12) -- -- -- -- --

Subtotal 1,600 1,291 2,891 2,366 103 2,469 422

FIRESalaries 448,064 36,411 484,475 463,497 17,215 480,712 3,763 Expenses 23,353 (1,004) 22,349 19,855 2,295 22,150 199 Equipment 350 (331) 19 -- -- -- 19 Special 830 (830) -- -- -- -- --

Subtotal 472,597 34,246 506,843 483,352 19,510 502,862 3,981

POLICESalaries 1,116,554 78,003 1,194,557 1,143,765 43,893 1,187,658 6,899 Expenses 46,899 1,846 48,745 34,025 12,393 46,418 2,327 Equipment 273 68 341 264 58 322 19 Special 4,046 (4,046) -- -- -- -- --

Subtotal 1,167,772 75,871 1,243,643 1,178,054 56,344 1,234,398 9,245

TOTAL PROTECTION OF PERSONS AND PROPERTY 1,730,833 114,694 1,845,527 1,750,678 79,735 1,830,413 15,114

PUBLIC WORKS

BOARD OF PUBLIC WORKSSalaries 6,967 1,100 8,067 7,562 269 7,831 236 Expenses 7,617 4,397 12,014 9,859 2,045 11,904 110 Special 628 (433) 195 47 -- 47 148

Subtotal 15,212 5,064 20,276 17,468 2,314 19,782 494

BUREAU OF CONTRACT ADMINISTRATION

Salaries 26,130 4,148 30,278 25,480 992 26,472 3,806 Expenses 1,528 345 1,873 1,554 98 1,652 221 Special 829 (829) -- -- -- -- --

Subtotal 28,487 3,664 32,151 27,034 1,090 28,124 4,027

BUREAU OF ENGINEERINGSalaries 65,589 6,379 71,968 66,110 2,488 68,598 3,370 Expenses 3,082 216 3,298 1,071 613 1,684 1,614 Special 2,897 (1,297) 1,600 -- -- -- 1,600

Subtotal 71,568 5,298 76,866 67,181 3,101 70,282 6,584

BUREAU OF STREET LIGHTING

Salaries 18,629 3,427 22,056 18,192 665 18,857 3,199 Expenses 1,519 1,194 2,713 1,293 478 1,771 942 Equipment 140 -- 140 124 -- 124 16 Special 3,620 1,688 5,308 4,006 146 4,152 1,156

Subtotal 23,908 6,309 30,217 23,615 1,289 24,904 5,313 Continued...

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CITY OF LOS ANGELES





BUREAU OF STREET SERVICES

Salaries 63,890$ 17,698$ 81,588$ 73,722$ 2,763$ 76,485$ 5,103$ Expenses 79,673 20,475 100,148 73,367 17,277 90,644 9,504 Special 2,456 (2,456) -- -- -- -- --

Subtotal 146,019 35,717 181,736 147,089 20,040 167,129 14,607

NON-DEPARTMENTALWater and Electricity 4,966 -- 4,966 3,407 1,559 4,966 --

TOTAL PUBLIC WORKS 290,160 56,052 346,212 285,794 29,393 315,187 31,025

HEALTH AND SANITATION

PUBLIC WORKS - BUREAU OF SANITATION

Salaries 210,298 576 210,874 186,344 7,258 193,602 17,272 Expenses 8,141 (437) 7,704 3,878 1,839 5,717 1,987 Equipment 27 -- 27 -- 12 12 15 Special 2,887 (95) 2,792 -- -- -- 2,792

Subtotal 221,353 44 221,397 190,222 9,109 199,331 22,066

NON-DEPARTMENTALWater and Electricity 850 -- 850 385 465 850 --

TOTAL HEALTH AND SANITATION 222,203 44 222,247 190,607 9,574 200,181 22,066

TRANSPORTATIONSalaries 102,064 15,935 117,999 110,959 4,419 115,378 2,621 Expenses 23,076 (1,999) 21,077 14,572 4,142 18,714 2,363 Special 2,778 (1,806) 972 -- -- -- 972

TOTAL TRANSPORTATION 127,918 12,130 140,048 125,531 8,561 134,092 5,956

CULTURAL AND RECREATIONAL SERVICES

CONVENTION CENTERSalaries 14,676 562 15,238 14,427 497 14,924 314 Expenses 7,897 445 8,342 7,411 389 7,800 542 Equipment 165 -- 165 108 57 165 -- Special 1,527 (447) 1,080 708 141 849 231

Subtotal 24,265 560 24,825 22,654 1,084 23,738 1,087

CULTURAL AFFAIRSSalaries 3,616 641 4,257 4,075 157 4,232 25 Expenses 438 5 443 381 57 438 5 Special 3,367 74 3,441 1,555 1,192 2,747 694

Subtotal 7,421 720 8,141 6,011 1,406 7,417 724

EL PUEBLO DE LOS ANGELES HISTORICAL MONUMENT AUTHORITY

Salaries 1,110 97 1,207 1,128 41 1,169 38 Expenses 407 30 437 327 57 384 53

Subtotal 1,517 127 1,644 1,455 98 1,553 91

ZOOSalaries 14,858 (90) 14,768 13,668 538 14,206 562 Expenses 3,128 49 3,177 2,403 417 2,820 357 Special 297 -- 297 -- -- -- 297

Subtotal 18,283 (41) 18,242 16,071 955 17,026 1,216 Continued...

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CITY OF LOS ANGELES





NON-DEPARTMENTALWater and Electricity 3,460$ --$ 3,460$ 1,970$ 1,490$ 3,460$ --$

TOTAL CULTURAL AND RECREATIONAL SERVICES 54,946 1,366 56,312 48,161 5,033 53,194 3,118

COMMUNITY DEVELOPMENT

AGINGSalaries 3,594 755 4,349 3,119 131 3,250 1,099 Expenses 134 295 429 116 109 225 204 Equipment -- 11 11 -- 11 11 -- Special 65 (65) -- -- -- -- --

Subtotal 3,793 996 4,789 3,235 251 3,486 1,303

COMMUNITY DEVELOPMENT

Salaries 24,162 504 24,666 22,899 877 23,776 890 Expenses 1,878 3,746 5,624 4,037 905 4,942 682 Equipment -- 9 9 -- -- -- 9 Special 580 -- 580 -- -- -- 580

Subtotal 26,620 4,259 30,879 26,936 1,782 28,718 2,161

DISABILITYSalaries 1,178 (98) 1,080 1,009 28 1,037 43 Expenses 288 7 295 168 125 293 2 Special 143 (38) 105 41 14 55 50

Subtotal 1,609 (129) 1,480 1,218 167 1,385 95

LOS ANGELES HOUSINGSalaries 45,116 3,386 48,502 42,590 1,621 44,211 4,291 Expenses 5,630 251 5,881 5,009 497 5,506 375 Equipment -- 4 4 -- -- -- 4 Special 1,400 (703) 697 567 -- 567 130

Subtotal 52,146 2,938 55,084 48,166 2,118 50,284 4,800

PLANNINGSalaries 21,824 646 22,470 19,185 724 19,909 2,561 Expenses 2,750 125 2,875 1,601 840 2,441 434 Special 819 (819) -- -- -- -- --

Subtotal 25,393 (48) 25,345 20,786 1,564 22,350 2,995

TOTAL COMMUNITY DEVELOPMENT 109,561 8,016 117,577 100,341 5,882 106,223 11,354

PENSION AND RETIREMENT CONTRIBUTION

Non-Departmental 1,630 (140) 1,490 1,365 86 1,451 39

CAPITAL OUTLAYNon-Departmental 6,510 21,287 27,797 6,050 3,713 9,763 18,034

TRANSFERS TO OTHER FUNDS

Non-Departmental 1,315,732 (65,446) 1,250,286 1,244,670 140 1,244,810 5,476

GRAND TOTAL 5,202,618$ 268,594$ 5,471,212$ 5,030,179$ 248,478$ 5,278,657$ 192,555$

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CITY OF LOS ANGELES

SPECIAL REVENUE FUNDS Special Revenue Funds are used to account for revenues derived from specific taxes, governmental grants, or other revenue sources that are designated to finance particular functions and activities of the City. Five funds are reported as major funds and are presented in the basic financial statements. Fourteen funds are separately identified in the Nonmajor Special Revenue Funds combining schedules and they account for 45.4% of the combined revenues of the Nonmajor Special Revenue Funds. Three groupings of numerous smaller funds are reported for other grants, other special revenue, and allocations from other governmental agencies funds. Building & Safety Permit fund - Accounts for the fees collected for plan check, permitting, and inspection of new construction in the City; testing of construction materials and methods; and examining the licensing of welders, equipment operators, and registered deputy building inspector. Citywide Recycling Fund – Accounts for compliance fees collected from private solid waste haulers. Monies deposited in the Fund are used to pay for industrial, commercial, and multi-family recycling programs that include program administration, public education, technical assistance to private businesses, research, market development, development of material recovery/diversion facilities, and other programs designed to increase solid waste diversion rates. Proposition C Anti-Gridlock Transit Improvement Fund – Accounts for the City’s 20% share of the additional one-half cent sales tax within the County of Los Angeles to improve transit service and operations, reduce traffic congestion, improve air quality and the condition of streets and freeways utilized by public transit, and reduce foreign fuel dependence. Special Parking Revenue Fund – Accounts for all monies collected from parking meters in the City, except those monies from meters located in established vehicle parking districts. Monies in this fund may be used for the purchase, installation and maintenance of parking meters; the policing of parking meters and parking meter spaces; the collection of monies deposited in parking meters; the purchase, improvement, and operation of off-street parking facilities; the painting and marking of streets and curbs for the direction of traffic and parking of vehicles; and the installation of traffic signs, signals and other traffic control devices. Special Police Communications/911 System Tax Fund – Accounts for the special tax imposed on each parcel, improvement to property, and use of property to finance improvements to the police communications system that includes the 911 system for the fire and police emergency calls. Stormwater Pollution Abatement Fund – Accounts for the charge on all properties in the City in order to treat and abate stormwater. The charge is based on stormwater runoff and pollutant loading associated with property size and land use. Street Lighting Maintenance Assessment Fund – Accounts for revenues received for maintenance and operation of the majority of the streetlights in the City. Revenues are derived from benefit assessments to properties that comprise the Los Angeles City Lighting District. Expenditures include payments of electricity bills, replacement and modernization of older lighting systems, all repairs, engineering and administrative costs, purchase of supplies and equipment, and other items associated with the operation and maintenance of the street lighting system.

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CITY OF LOS ANGELES

SPECIAL REVENUE FUNDS – (Continued) Disaster Assistance Fund – Accounts for grants received for emergency and disaster recovery costs and similar grant programs. Economic Development Section 108 Loan Guarantee Program Fund – Accounts for loan guarantee funds from HUD for housing, commercial and industrial development projects. Home Investment Partnership Program Fund – Accounts for the grants received from HUD to expand the supply of decent, safe, sanitary and affordable housing with the primary focus on rental housing, and to strengthen the abilities of state and local governments to provide housing to persons principally of low and very low income. Seismic Bond Reimbursement Fund – Accounts for the funds received from the Federal government and other sources to reimburse the City for its seismic bond program. Special Gas Tax Street Improvement Fund – Accounts for the revenues received from the State for the City’s share of the gasoline tax and Traffic Congestion Relief Fund to be used for preservation, maintenance, and rehabilitation of local streets and road system. The fund also accounts for federal grants from the Surface Transportation Program to finance the upgrade of the most heavily traveled highways. Transportation Fund – Accounts for grant funds from the Metropolitan Transit Authority (MTA) to implement the Transportation Improvement Program Call for Projects (TIP). Workforce Investment Act Fund – Accounts for the grants received from the United States Department of Labor for the purpose of providing employment and training opportunities for the disadvantaged residents and dislocated workers of the City. Nonmajor Other Grant Funds – Account for various grants received from the Federal and State governments used for a specific purpose, activity or facility. This group represents 20.1% of the combined revenues of the Nonmajor Special Revenue Funds. Included in this group are seven annually budgeted funds: Community Services Block Grant, Forfeited Assets Trust of Police Department, Household Hazardous Waste, Housing Opportunities for Persons with AIDS, Mobile Source Air Pollution Reduction, Older Americans Act, and Supplemental Law Enforcement Services. Nonmajor Other Special Revenue Funds – Account for the activities of non-grant Special Revenue Funds that represent 26.2% of the combined revenues of the Nonmajor Special Revenue Funds. Included in this group are 20 annually budgeted funds: Arts and Cultural Facilities and Services, Arts Development Fee, City Employees Ridesharing, City Ethics Commission, City of Los Angeles Affordable Housing, Department of Neighborhood Empowerment, El Pueblo de Los Angeles Historical Monument, Landfill Maintenance, Local Public Safety, Los Angeles Convention and Visitors Bureau, Measure R Traffic Relief and Rail Expansion Funds, Multi-Family Bulky Item Fee, Municipal Housing Finance, Planning Case Processing Special Fund, Rent Stabilization, Street Damage Restoration Fee, Systematic Code Enforcement Fee, Telecommunications Liquidated Damages and Lost Franchise Fees, Traffic Safety, and Zoo.

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CITY OF LOS ANGELES

SPECIAL REVENUE FUNDS – (Continued) Allocations From Other Governmental Agencies – Account for funds received by the City from various sources used for engineering design, fire protection, acquiring rights if any, construction and for various other programs. This group represents 8.3% of the combined revenues of the Nonmajor Special Revenue Funds. Included in this group are 27 partially budgeted funds: ARRA COPS Hiring Recovery Program, ARRA Neighborhood Stabilization Program, ARRA Workforce Investment Act, Bus Bench Advertising, Business Improvement Trust, City Attorney Consumer Protection Prosecution, City Planning Long Range Planning, City Planning Systems Development, Coastal Transportation Corridor Trust, Council District 15 Real Property Trust, Federal Emergency Shelter Grant, Fire Hydrant Installation and Main Replacement, Integrated Solid Waste Management, Lopez Canyon Community Amenities, Los Angeles Regional Agency, Neighborhood Stabilization Program Grant, Off-Site Sign Periodic Inspection Fee, Permit Parking Program Revenue, Pershing Square Project, Proposition 1B Infrastructure, Repair and Demolition, Section 108 Loan Guarantee Program, State AB1290 City Fund, Used Oil Collection, Ventura/Cahuenga Boulevard Corridor Specific Plan Revenue, Warner Center Transportation Trust, and West LA Transportation Improvement and Mitigation Special Revenue Funds.

CITY OF LOS ANGELES

Combining Balance SheetNonmajor Special Revenue Funds


Proposition CBuilding Anti-Gridlock Special

and Safety Citywide Transit Parking Permit Recycling Improvement Revenue

ASSETS

Cash and Pooled Investments 36,957$ 39,567$ 21,585$ 55,130$

Taxes Receivable -- 5,768 -- --

Accounts Receivable

(Net of Allowance for Uncollectibles of $33,603) 2,257 -- 25 382

Special Assessments Receivable 1,280 -- -- --

Investment Income Receivable 126 152 73 192

Intergovernmental Receivable -- -- 1,845 --

Loans Receivable

(Net of Allowance for Uncollectibles of $786,166) -- -- -- 695

Due from Other Funds 2,428 292 48,014 299

Prepaid Items and Other Assets -- -- -- --

Advances to Other Funds -- -- 66,540 --


TOTAL ASSETS 43,048$ 45,779$ 138,082$ 56,698$


LIABILITIES

Accounts, Contracts and Retainage Payable 1,346$ 1,296$ 19,632$ 1,921$

Accrued Salaries and Overtime Payable -- -- -- --

Accrued Compensated Absences Payable -- -- -- --

Intergovernmental Payable 70 1 8 1

Due to Other Funds 262 24 3,301 1,804

Deferred Revenue and Other Credits 2,256 1,370 1,027 49

Deposits and Advances 305 -- -- 93

Advances from Other Funds -- -- -- --

Other Liabilities 997 1,067 582 1,487

TOTAL LIABILITIES FORWARDED 5,236 3,758 24,550 5,355 Continued…

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CITY OF LOS ANGELES

Combining Balance Sheet - (Continued)Nonmajor Special Revenue Funds





FUND BALANCES (DEFICIT)Nonspendable:

Prepaid Items and Other Assets -- -- -- -- Advances to Other Funds -- -- 66,540 --

Restricted for:Community Development -- -- -- -- Construction and Engineering Regulation Enforcement -- -- -- -- Cultural Activities -- -- -- -- Debt Service -- -- -- -- Fire Prevention and Emergency Preparedness -- -- -- -- General Government -- -- -- -- Health, Environment and Sanitation Programs -- 42,021 -- -- Landfill Closure and Postclosure Maintenance -- -- -- -- Law Enforcement -- -- -- -- Library -- -- -- -- Other Capital Projects -- -- -- -- Other Purposes -- -- -- -- Recreation and Parks -- -- -- -- Seismic Improvement -- -- -- -- Social Services -- -- -- -- Solid Waste -- -- -- -- Stormwater Cleanup Capital Projects -- -- -- -- Street Services -- -- -- -- Transportation -- -- 46,992 --

Assigned to:Community Development -- -- -- -- Construction and Engineering Regulation Enforcement 37,812 -- -- -- Cultural Activities -- -- -- -- Fire Prevention and Emergency Preparedness -- -- -- -- General Government -- -- -- -- Health, Environment and Sanitation Programs -- -- -- -- Landfill Closure and Postclosure Maintenance -- -- -- -- Law Enforcement -- -- -- -- Library -- -- -- -- Other Capital Projects -- -- -- -- Other Purposes -- -- -- -- Recreation and Parks -- -- -- -- Social Services -- -- -- -- Street Services -- -- -- -- Transportation -- -- -- 51,343

Unassigned -- -- -- --

TOTAL FUND BALANCES (DEFICIT) 37,812 42,021 113,532 51,343

TOTAL LIABILITIES AND FUND BALANCES 43,048$ 45,779$ 138,082$ 56,698$ Continued...

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CITY OF LOS ANGELES



Special Police StreetCommuni- Stormwater Lighting Grant Fundcations/911 Pollution Maintenance DisasterSystem Tax Abatement Assessment Assistance

ASSETS

Cash and Pooled Investments 445$ 6,518$ 25,623$ 10,610$

Taxes Receivable -- -- -- --

Accounts Receivable

(Net of Allowance for Uncollectibles of $33,603) -- -- 2,375 --

Special Assessments Receivable 2,488 3,444 5,323 --

Investment Income Receivable 52 43 -- 38

Intergovernmental Receivable -- -- -- 7,826

Loans Receivable

(Net of Allowance for Uncollectibles of $786,166) -- -- -- --

Due from Other Funds 41 517 2,564 --

Prepaid Items and Other Assets -- -- -- --

Advances to Other Funds -- -- -- 841


TOTAL ASSETS 3,026$ 10,522$ 35,885$ 19,315$


LIABILITIES

Accounts, Contracts and Retainage Payable --$ 456$ 3,749$ --$

Accrued Salaries and Overtime Payable -- -- -- --

Accrued Compensated Absences Payable -- -- -- --

Intergovernmental Payable -- -- 62 520

Due to Other Funds -- -- -- 7,420

Deferred Revenue and Other Credits 1,041 1,538 5,010 11,050

Deposits and Advances -- -- 31 23

Advances from Other Funds -- -- 78 --

Other Liabilities 12 176 29,667 286

TOTAL LIABILITIES FORWARDED 1,053 2,170 38,597 19,299 Continued…

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CITY OF LOS ANGELES






Prepaid Items and Other Assets -- -- -- -- Advances to Other Funds -- -- -- 841

Restricted for:Community Development -- -- -- -- Construction and Engineering Regulation Enforcement -- -- -- -- Cultural Activities -- -- -- -- Debt Service 1,973 -- -- -- Fire Prevention and Emergency Preparedness -- -- -- -- General Government -- -- -- -- Health, Environment and Sanitation Programs -- -- -- -- Landfill Closure and Postclosure Maintenance -- -- -- -- Law Enforcement -- -- -- -- Library -- -- -- -- Other Capital Projects -- -- -- -- Other Purposes -- -- -- -- Recreation and Parks -- -- -- -- Seismic Improvement -- -- -- -- Social Services -- -- -- -- Solid Waste -- -- -- -- Stormwater Cleanup Capital Projects -- 8,352 -- -- Street Services -- -- -- -- Transportation -- -- -- --

Assigned to:Community Development -- -- -- -- Construction and Engineering Regulation Enforcement -- -- -- -- Cultural Activities -- -- -- -- Fire Prevention and Emergency Preparedness -- -- -- -- General Government -- -- -- -- Health, Environment and Sanitation Programs -- -- -- -- Landfill Closure and Postclosure Maintenance -- -- -- -- Law Enforcement -- -- -- -- Library -- -- -- -- Other Capital Projects -- -- -- -- Other Purposes -- -- -- -- Recreation and Parks -- -- -- -- Social Services -- -- -- -- Street Services -- -- -- -- Transportation -- -- -- --

Unassigned -- -- (2,712) (825)

TOTAL FUND BALANCES (DEFICIT) 1,973 8,352 (2,712) 16


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CITY OF LOS ANGELES



Grant FundsEconomic

DevelopmentSection 108 Home

Loan Investment Special GasGuarantee Partnership Seismic Bond Tax StreetProgram Program Reimbursement Improvement Transportation

ASSETS

Cash and Pooled Investments 22,433$ 2,477$ 33,011$ 62,309$ 163,923$

Taxes Receivable -- -- -- -- --

Accounts Receivable

(Net of Allowance for Uncollectibles of $33,603) -- -- -- -- --

Special Assessments Receivable -- -- -- -- --

Investment Income Receivable -- 11 136 249 674

Intergovernmental Receivable -- -- 8,536 10,959 40,381

Loans Receivable

(Net of Allowance for Uncollectibles of $786,166) 167,734 68,786 -- -- --

Due from Other Funds -- 21 -- 458 108

Prepaid Items and Other Assets -- 2,559 -- -- --

Advances to Other Funds -- -- -- -- --

Restricted Assets -- -- -- -- --

TOTAL ASSETS 190,167$ 73,854$ 41,683$ 73,975$ 205,086$


LIABILITIES

Accounts, Contracts and Retainage Payable 7,187$ 1,789$ 391$ 186$ 5,477$

Accrued Salaries and Overtime Payable -- -- -- -- --

Accrued Compensated Absences Payable -- -- -- -- --

Intergovernmental Payable -- -- -- 1 12

Due to Other Funds 33 80 511 9 58,236

Deferred Revenue and Other Credits -- 3 6,386 56 35,108

Deposits and Advances 1,192 277 -- -- --

Advances from Other Funds -- -- -- 1,307 66,840

Other Liabilities 1 67 890 1,680 4,420

TOTAL LIABILITIES FORWARDED 8,413 2,216 8,178 3,239 170,093 Continued…

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CITY OF LOS ANGELES



Grant FundsEconomic



TOTAL LIABILITIES FORWARDED 8,413$ 2,216$ 8,178$ 3,239$ 170,093$


Prepaid Items and Other Assets -- 2,559 -- -- -- Advances to Other Funds -- -- -- -- --

Restricted for:Community Development 181,754 69,079 -- -- -- Construction and Engineering Regulation Enforcement -- -- -- -- -- Cultural Activities -- -- -- -- -- Debt Service -- -- -- -- -- Fire Prevention and Emergency Preparedness -- -- -- -- -- General Government -- -- -- -- -- Health, Environment and Sanitation Programs -- -- -- -- -- Landfill Closure and Postclosure Maintenance -- -- -- -- -- Law Enforcement -- -- -- -- -- Library -- -- -- -- -- Other Capital Projects -- -- -- -- -- Other Purposes -- -- -- -- -- Recreation and Parks -- -- -- -- -- Seismic Improvement -- -- 33,505 -- -- Social Services -- -- -- -- -- Solid Waste -- -- -- -- -- Stormwater Cleanup Capital Projects -- -- -- -- -- Street Services -- -- -- 70,736 -- Transportation -- -- -- -- 34,993

Assigned to:Community Development -- -- -- -- -- Construction and Engineering Regulation Enforcement -- -- -- -- -- Cultural Activities -- -- -- -- -- Fire Prevention and Emergency Preparedness -- -- -- -- -- General Government -- -- -- -- -- Health, Environment and Sanitation Programs -- -- -- -- -- Landfill Closure and Postclosure Maintenance -- -- -- -- -- Law Enforcement -- -- -- -- -- Library -- -- -- -- -- Other Capital Projects -- -- -- -- -- Other Purposes -- -- -- -- -- Recreation and Parks -- -- -- -- -- Social Services -- -- -- -- -- Street Services -- -- -- -- -- Transportation -- -- -- -- --

Unassigned -- -- -- -- --

TOTAL FUND BALANCES (DEFICIT) 181,754 71,638 33,505 70,736 34,993

TOTAL LIABILITIES AND FUND BALANCES 190,167$ 73,854$ 41,683$ 73,975$ 205,086$ Continued...

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CITY OF LOS ANGELES



NonmajorNonmajor Other Allocations

Workforce Other Special from OtherInvestment Grant Revenue Governmental

Act Funds Funds Agencies Total

ASSETS

Cash and Pooled Investments 2,043$ 198,969$ 356,672$ 157,977$ 1,196,249$

Taxes Receivable -- -- 1,215 -- 6,983

Accounts Receivable

(Net of Allowance for Uncollectibles of $33,603) -- 770 10,054 198 16,061

Special Assessments Receivable -- -- 5,401 313 18,249

Investment Income Receivable 6 579 1,017 711 4,059

Intergovernmental Receivable 4,336 41,873 20,149 737 136,642

Loans Receivable

(Net of Allowance for Uncollectibles of $786,166) -- 39,421 27,732 3,546 307,914

Due from Other Funds 426 2,077 19,233 8,438 84,916

Prepaid Items and Other Assets 252 -- 104 -- 2,915

Advances to Other Funds -- 400 1,021 250 69,052

Restricted Assets -- -- 3,474 -- 3,474

TOTAL ASSETS 7,063$ 284,089$ 446,072$ 172,170$ 1,846,514$


LIABILITIES

Accounts, Contracts and Retainage Payable 6,832$ 45,090$ 22,999$ 7,941$ 126,292$

Accrued Salaries and Overtime Payable -- 89 2,013 -- 2,102

Accrued Compensated Absences Payable -- 1 20 -- 21

Intergovernmental Payable 252 1,336 554 -- 2,817

Due to Other Funds 46 11,359 6,302 609 89,996

Deferred Revenue and Other Credits 1,124 15,186 12,865 538 94,607

Deposits and Advances -- 2,184 12,651 477 17,233

Advances from Other Funds -- 23,608 12,169 -- 104,002

Other Liabilities 55 4,116 10,781 4,825 61,109

TOTAL LIABILITIES FORWARDED 8,309 102,969 80,354 14,390 498,179Continued…

Grant Funds

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CITY OF LOS ANGELES






TOTAL LIABILITIES FORWARDED 8,309$ 102,969$ 80,354$ 14,390$ 498,179$


Prepaid Items and Other Assets 252 -- 104 -- 2,915 Advances to Other Funds -- 400 1,021 250 69,052

Restricted for:Community Development -- 51,527 19,502 9,286 331,148 Construction and Engineering Regulation Enforcement -- -- -- 1,397 1,397 Cultural Activities -- 256 15,891 -- 16,147 Debt Service -- -- 159 1,406 3,538 Fire Prevention and Emergency Preparedness -- 306 66 99 471 General Government -- 1,839 -- -- 1,839 Health, Environment and Sanitation Programs -- 21,619 26,441 -- 90,081 Landfill Closure and Postclosure Maintenance -- 20 -- -- 20 Law Enforcement -- 43,312 8,114 2,678 54,104 Library -- 4,771 302 -- 5,073 Other Capital Projects -- 17,768 552 -- 18,320 Other Purposes -- 1,108 523 -- 1,631 Recreation and Parks -- 97 3,499 -- 3,596 Seismic Improvement -- -- -- -- 33,505 Social Services -- 4,828 36 -- 4,864 Solid Waste -- -- 4,582 14,664 19,246 Stormwater Cleanup Capital Projects -- -- -- -- 8,352 Street Services -- -- 2,263 50,872 123,871 Transportation -- 33,113 87,846 32,198 235,142

Assigned to:Community Development -- -- 69,832 28,420 98,252 Construction and Engineering Regulation Enforcement -- -- 11,942 -- 49,754 Cultural Activities -- -- 4,466 -- 4,466 Fire Prevention and Emergency Preparedness -- -- 2,569 7,918 10,487 General Government -- 156 48,113 -- 48,269 Health, Environment and Sanitation Programs -- -- 3,696 4,055 7,751 Landfill Closure and Postclosure Maintenance -- -- 10,945 -- 10,945 Law Enforcement -- -- 2,987 -- 2,987 Library -- -- 4,534 -- 4,534 Other Capital Projects -- -- 2,442 -- 2,442 Other Purposes -- -- 22,911 2,307 25,218 Recreation and Parks -- -- 4,430 -- 4,430 Social Services -- -- 385 -- 385 Street Services -- -- 6,838 -- 6,838 Transportation -- -- 1,085 2,230 54,658

Unassigned (1,498) -- (2,358) -- (7,393)

TOTAL FUND BALANCES (DEFICIT) (1,246) 181,120 365,718 157,780 1,348,335

TOTAL LIABILITIES AND FUND BALANCES 7,063$ 284,089$ 446,072$ 172,170$ 1,846,514$

Grant Funds

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CITY OF LOS ANGELES

Combining Statement of Revenues, Expendituresand Changes in Fund Balances (Deficit)

Nonmajor Special Revenue FundsFor the Fiscal Year Ended June 30, 2012




REVENUESProperty Taxes --$ --$ --$ --$ Other Taxes -- 21,562 -- -- Licenses and Permits 28,952 -- -- -- Intergovernmental -- -- 42,112 -- Charges for Services 76,439 194 6,781 65,539 Services to Enterprise Funds 1,243 -- -- -- Fines -- -- -- -- Special Assessments 73 -- -- -- Investment Earnings 738 706 387 1,147 Program Income -- -- -- -- Other 11 -- 10 820

TOTAL REVENUES 107,456 22,462 49,290 67,506


General Government -- -- -- -- Protection of Persons and Property 93,140 -- -- -- Public Works -- -- -- -- Health and Sanitation -- 29,426 -- -- Transportation -- -- 46,787 28,438 Cultural and Recreational Services -- -- -- -- Community Development -- -- -- --

Capital Outlay 7 153 19,595 6,242 Debt Service:

Principal -- -- -- -- Interest -- -- -- --


EXCESS (DEFICIENCY) OF REVENUES OVER EXPENDITURES 14,309 (7,117) (17,092) 32,826

OTHER FINANCING SOURCES (USES)Transfers In -- -- -- -- Transfers Out (70) -- (2,314) (8,444) Loans from HUD -- -- -- --

TOTAL OTHER FINANCING SOURCES (USES) (70) -- (2,314) (8,444)

NET CHANGE IN FUND BALANCES 14,239 (7,117) (19,406) 24,382

FUND BALANCES (DEFICIT), JULY 1 23,573 49,138 132,938 26,961

FUND BALANCES (DEFICIT), JUNE 30 37,812$ 42,021$ 113,532$ 51,343$ Continued...

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CITY OF LOS ANGELES

Combining Statement of Revenues, Expendituresand Changes in Fund Balances (Deficit) - (Continued)




REVENUESProperty Taxes 20,926$ --$ --$ --$ Other Taxes -- -- -- -- Licenses and Permits -- -- 706 -- Intergovernmental -- 524 338 6,390 Charges for Services -- 28,523 530 -- Services to Enterprise Funds -- -- -- -- Fines -- 271 -- -- Special Assessments 542 578 44,427 -- Investment Earnings 108 173 -- 188 Program Income -- -- -- -- Other -- 8 3,367 --

TOTAL REVENUES 21,576 30,077 49,368 6,578


General Government -- -- -- -- Protection of Persons and Property 820 -- -- 5,985 Public Works -- -- 40,524 -- Health and Sanitation -- 27,529 -- -- Transportation -- -- -- -- Cultural and Recreational Services -- -- -- -- Community Development -- -- -- --

Capital Outlay -- 1,386 16,745 -- Debt Service:


TOTAL EXPENDITURES 820 28,915 57,269 5,985

EXCESS (DEFICIENCY) OF REVENUES OVER EXPENDITURES 20,756 1,162 (7,901) 593

OTHER FINANCING SOURCES (USES)Transfers In -- -- 150 -- Transfers Out (20,774) -- -- -- Loans from HUD -- -- -- --

TOTAL OTHER FINANCING SOURCES (USES) (20,774) -- 150 --

NET CHANGE IN FUND BALANCES (18) 1,162 (7,751) 593

FUND BALANCES (DEFICIT), JULY 1 1,991 7,190 5,039 (577)

FUND BALANCES (DEFICIT), JUNE 30 1,973$ 8,352$ (2,712)$ 16$ Continued...

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CITY OF LOS ANGELES




Grant FundsEconomic



REVENUESProperty Taxes --$ --$ --$ --$ --$ Other Taxes -- -- -- -- -- Licenses and Permits -- -- -- -- -- Intergovernmental 540 36,970 9,674 118,956 39,003 Charges for Services -- -- -- -- 132 Services to Enterprise Funds -- -- 147 -- -- Fines -- -- -- -- -- Special Assessments -- -- -- -- -- Investment Earnings 5 39 602 1,231 2,885 Program Income 4,215 3,261 -- -- -- Other -- 10 251 33 --

TOTAL REVENUES 4,760 40,280 10,674 120,220 42,020


General Government -- -- -- -- -- Protection of Persons and Property -- -- -- -- -- Public Works -- -- 5,960 101,416 -- Health and Sanitation -- -- -- -- -- Transportation -- -- -- -- 31,512 Cultural and Recreational Services -- -- -- -- -- Community Development 947 41,390 -- -- --

Capital Outlay -- -- 5,488 1,666 49,726 Debt Service:

Principal 2,504 -- -- -- -- Interest 2,164 -- -- -- --

TOTAL EXPENDITURES 5,615 41,390 11,448 103,082 81,238

EXCESS (DEFICIENCY) OF REVENUES OVER EXPENDITURES (855) (1,110) (774) 17,138 (39,218)

OTHER FINANCING SOURCES (USES)Transfers In -- 92 -- 84 2,724 Transfers Out -- -- -- -- -- Loans from HUD 52,521 -- -- -- --

TOTAL OTHER FINANCING SOURCES (USES) 52,521 92 -- 84 2,724

NET CHANGE IN FUND BALANCES 51,666 (1,018) (774) 17,222 (36,494)

FUND BALANCES (DEFICIT), JULY 1 130,088 72,656 34,279 53,514 71,487

FUND BALANCES (DEFICIT), JUNE 30 181,754$ 71,638$ 33,505$ 70,736$ 34,993$ Continued...

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CITY OF LOS ANGELES







REVENUESProperty Taxes --$ --$ --$ 11,941$ 32,867$ Other Taxes -- -- 31,247 5,075 57,884 Licenses and Permits -- -- 2,206 992 32,856 Intergovernmental 46,320 252,902 85,372 65,679 704,780 Charges for Services -- 6,666 136,837 14,209 335,850 Services to Enterprise Funds -- 1,600 -- 31 3,021 Fines -- 1 10,365 -- 10,637 Special Assessments -- -- 49,038 1,649 96,307 Investment Earnings 56 2,526 5,249 2,859 18,899 Program Income -- 1,242 1,050 9,906 19,674 Other 27 8,324 35,991 339 49,191

TOTAL REVENUES 46,403 273,261 357,355 112,680 1,361,966


General Government -- 19,339 16,939 148 36,426 Protection of Persons and Property -- 53,354 89,220 9,756 252,275 Public Works -- 8,329 28,839 39,046 224,114 Health and Sanitation -- 8,846 8,156 2,820 76,777 Transportation -- 14,387 30,685 3,552 155,361 Cultural and Recreational Services -- 1,241 135,745 -- 136,986 Community Development 47,948 60,373 107,752 79,428 337,838

Capital Outlay -- 81,135 21,593 76 203,812 Debt Service:

Principal -- 1,498 -- 1,905 5,907 Interest -- 358 -- 627 3,149

TOTAL EXPENDITURES 47,948 248,860 438,929 137,358 1,432,645

EXCESS (DEFICIENCY) OF REVENUES OVER EXPENDITURES (1,545) 24,401 (81,574) (24,678) (70,679)

OTHER FINANCING SOURCES (USES)Transfers In -- 8,063 136,601 5,515 153,229 Transfers Out -- (11,947) (9,852) (6,689) (60,090) Loans from HUD -- -- -- -- 52,521

TOTAL OTHER FINANCING SOURCES (USES) -- (3,884) 126,749 (1,174) 145,660

NET CHANGE IN FUND BALANCES (1,545) 20,517 45,175 (25,852) 74,981

FUND BALANCES (DEFICIT), JULY 1 299 160,603 320,543 183,632 1,273,354

FUND BALANCES (DEFICIT), JUNE 30 (1,246)$ 181,120$ 365,718$ 157,780$ 1,348,335$

Grant Funds

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CITY OF LOS ANGELES

Budgetary Comparison Schedule(Non-GAAP Budgetary Basis)

Annually Budgeted Nonmajor Special Revenue FundsFor the Fiscal Year Ended June 30, 2012


Building and Safety PermitActual Variance With

Amounts Final BudgetBudgeted Amounts (Budgetary Positive


REVENUES AND OTHER FINANCING SOURCES

RevenuesTaxes --$ --$ --$ --$ Licenses, Permits and Fines -- -- 28,958 28,958 Intergovernmental -- -- -- -- Charges for Services 100,117 100,117 76,650 (23,467) Services to Enterprise Funds -- -- 1,243 1,243 Special Assessments -- -- -- -- Interest 400 400 407 7 Program Income -- -- -- -- Other -- -- 11 11

Total Revenues 100,517 100,517 107,269 6,752

Other Financing SourcesTransfers from Other Funds -- -- -- -- Loans from Other Funds -- -- -- --

Total Other Financing Sources -- -- -- --

TOTAL REVENUES AND OTHER FINANCING SOURCES 100,517 100,517 107,269 6,752

EXPENDITURES AND OTHER FINANCING USES

ExpendituresCurrent

General Government -- -- -- -- Protection of Persons and Property 46,739 145,757 33,532 112,225 Public Works -- -- -- -- Health and Sanitation -- -- -- -- Transportation -- -- -- -- Cultural and Recreational Services -- -- -- -- Community Development -- -- -- --

Capital Outlay -- -- -- -- Debt Service


Total Expenditures 46,739 145,757 33,532 112,225

Other Financing UsesTransfers to Other Funds 63,091 68,287 62,865 5,422 Payment of Loans to Other Funds -- -- -- --

Total Other Financing Uses 63,091 68,287 62,865 5,422

TOTAL EXPENDITURES AND OTHER FINANCING USES 109,830 214,044 96,397 117,647

EXCESS (DEFICIENCY) OF REVENUES AND OTHERFINANCING SOURCES OVER EXPENDITURES ANDOTHER FINANCING USES (9,313) (113,527) 10,872 124,399

FUND BALANCES (DEFICITS), JULY 1, RESTATED 9,313 9,313 17,182 7,869

Appropriation of Fund Balances and CarryforwardAppropriations -- 104,214 -- (104,214)


FUND BALANCES (DEFICITS), JUNE 30 --$ --$ 28,146$ 28,146$ Continued...

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CITY OF LOS ANGELES


Annually Budgeted Nonmajor Special Revenue Funds - (Continued)For the Fiscal Year Ended June 30, 2012


Citywide RecyclingActual Variance With




RevenuesTaxes 22,865$ 22,865$ 20,788$ (2,077)$ Licenses, Permits and Fines -- -- -- -- Intergovernmental -- -- -- -- Charges for Services -- -- 194 194 Services to Enterprise Funds -- -- -- -- Special Assessments -- -- -- -- Interest 884 884 716 (168) Program Income -- -- -- -- Other -- -- -- --

Total Revenues 23,749 23,749 21,698 (2,051)



TOTAL REVENUES AND OTHER FINANCING SOURCES 23,749 23,749 21,698 (2,051)


ExpendituresCurrent

General Government -- -- -- -- Protection of Persons and Property -- -- -- -- Public Works -- -- -- -- Health and Sanitation 55,493 57,246 26,115 31,131 Transportation -- -- -- -- Cultural and Recreational Services -- -- -- -- Community Development -- -- -- --







EXCESS (DEFICIENCY) OF REVENUES AND OTHERFINANCING SOURCES OVER EXPENDITURES ANDOTHER FINANCING USES (38,349) (40,611) (10,227) 30,384

FUND BALANCES (DEFICITS), JULY 1, RESTATED 38,349 38,349 38,672 323




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CITY OF LOS ANGELES




Proposition C Anti-Gridlock Transit ImprovementActual Variance With




RevenuesTaxes --$ --$ --$ --$ Licenses, Permits and Fines -- -- -- -- Intergovernmental 59,151 67,582 49,975 (17,607) Charges for Services -- -- 8,141 8,141 Services to Enterprise Funds -- -- -- -- Special Assessments -- -- -- -- Interest 295 295 335 40 Program Income -- -- -- -- Other 283 358 10 (348)

Total Revenues 59,729 68,235 58,461 (9,774)

Other Financing SourcesTransfers from Other Funds 2,200 2,200 -- (2,200) Loans from Other Funds -- -- -- --

Total Other Financing Sources 2,200 2,200 -- (2,200)



ExpendituresCurrent

General Government -- -- -- -- Protection of Persons and Property -- -- -- -- Public Works -- -- -- -- Health and Sanitation -- -- -- -- Transportation 29,351 61,442 13,910 47,532 Cultural and Recreational Services -- -- -- -- Community Development -- -- -- --












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CITY OF LOS ANGELES




Special Parking RevenueActual Variance With




RevenuesTaxes --$ --$ --$ --$ Licenses, Permits and Fines -- -- -- -- Intergovernmental -- -- -- -- Charges for Services 59,589 59,589 65,353 5,764 Services to Enterprise Funds -- -- -- -- Special Assessments -- -- -- -- Interest 770 770 590 (180) Program Income -- -- -- -- Other -- -- 818 818

Total Revenues 60,359 60,359 66,761 6,402





ExpendituresCurrent


Capital Outlay 536 3,692 716 2,976 Debt Service

Principal 4,175 4,805 4,175 630 Interest 4,428 4,626 4,158 468










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CITY OF LOS ANGELES




Special Police Communications/911 System TaxActual Variance With




RevenuesTaxes 21,509$ 21,509$ 20,926$ (583)$ Licenses, Permits and Fines -- -- -- -- Intergovernmental -- -- -- -- Charges for Services -- -- -- -- Services to Enterprise Funds -- -- -- -- Special Assessments -- -- -- -- Interest 100 100 113 13 Program Income -- -- -- -- Other -- -- -- --

Total Revenues 21,609 21,609 21,039 (570)



TOTAL REVENUES AND OTHER FINANCING SOURCES 21,609 21,609 21,039 (570)


ExpendituresCurrent

General Government -- -- -- -- Protection of Persons and Property 966 966 420 546 Public Works -- -- -- -- Health and Sanitation -- -- -- -- Transportation -- -- -- -- Cultural and Recreational Services -- -- -- -- Community Development -- -- -- --



Total Expenditures 966 966 420 546

Other Financing UsesTransfers to Other Funds 21,468 21,468 21,175 293 Payment of Loans to Other Funds -- -- -- --

Total Other Financing Uses 21,468 21,468 21,175 293

TOTAL EXPENDITURES AND OTHER FINANCING USES 22,434 22,434 21,595 839

EXCESS (DEFICIENCY) OF REVENUES AND OTHERFINANCING SOURCES OVER EXPENDITURES ANDOTHER FINANCING USES (825) (825) (556) 269

FUND BALANCES (DEFICITS), JULY 1, RESTATED 825 825 982 157

Appropriation of Fund Balances and Carryforward Appropriations -- -- -- --

Encumbrances Lapsed -- -- -- --

FUND BALANCES (DEFICITS), JUNE 30 --$ --$ 426$ 426$ Continued...

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CITY OF LOS ANGELES




Stormwater Pollution AbatementActual Variance With




RevenuesTaxes --$ --$ --$ --$ Licenses, Permits and Fines -- -- 271 271 Intergovernmental 1,642 1,642 524 (1,118) Charges for Services 28,650 28,650 28,522 (128) Services to Enterprise Funds -- -- -- -- Special Assessments -- -- -- -- Interest 137 137 140 3 Program Income -- -- -- -- Other -- -- 8 8

Total Revenues 30,429 30,429 29,465 (964)





ExpendituresCurrent


Capital Outlay 1,063 1,063 86 977 Debt Service






EXCESS (DEFICIENCY) OF REVENUES AND OTHERFINANCING SOURCES OVER EXPENDITURES ANDOTHER FINANCING USES (1,396) (6,607) 768 7,375





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CITY OF LOS ANGELES




Street Lighting Maintenance AssessmentActual Variance With




RevenuesTaxes --$ --$ --$ --$ Licenses, Permits and Fines 1,100 1,100 706 (394) Intergovernmental 729 1,186 338 (848) Charges for Services -- -- 676 676 Services to Enterprise Funds -- -- -- -- Special Assessments 43,411 43,411 44,574 1,163 Interest -- -- -- -- Program Income -- -- -- -- Other 4,196 4,196 950 (3,246)

Total Revenues 49,436 49,893 47,244 (2,649)

Other Financing SourcesTransfers from Other Funds -- 150 150 -- Loans from Other Funds 11,608 18,192 17,447 (745)

Total Other Financing Sources 11,608 18,342 17,597 (745)



ExpendituresCurrent

General Government -- -- -- -- Protection of Persons and Property -- -- -- -- Public Works 34,390 47,944 37,211 10,733 Health and Sanitation -- -- -- -- Transportation -- -- -- -- Cultural and Recreational Services -- -- -- -- Community Development -- -- -- --

Capital Outlay 1,531 4,286 1,078 3,208 Debt Service



Other Financing UsesTransfers to Other Funds 23,146 27,087 20,887 6,200 Payment of Loans to Other Funds 7,099 6,372 3,737 2,635








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CITY OF LOS ANGELES




Disaster Assistance Actual Variance With




RevenuesTaxes --$ --$ --$ --$ Licenses, Permits and Fines -- -- -- -- Intergovernmental 7,510 7,510 2,427 (5,083) Charges for Services -- -- -- -- Services to Enterprise Funds -- -- -- -- Special Assessments -- -- -- -- Interest -- -- 154 154 Program Income -- -- -- -- Other -- -- -- --

Total Revenues 7,510 7,510 2,581 (4,929)





ExpendituresCurrent

General Government -- -- -- -- Protection of Persons and Property 4,700 2,100 2,100 -- Public Works -- -- -- -- Health and Sanitation -- -- -- -- Transportation -- -- -- -- Cultural and Recreational Services -- -- -- -- Community Development -- -- -- --



Total Expenditures 4,700 2,100 2,100 --

Other Financing UsesTransfers to Other Funds 9,824 412 201 211 Payment of Loans to Other Funds -- -- -- --

Total Other Financing Uses 9,824 412 201 211


EXCESS (DEFICIENCY) OF REVENUES AND OTHERFINANCING SOURCES OVER EXPENDITURES ANDOTHER FINANCING USES (7,014) 4,998 280 (4,718)


Appropriation of Fund Balances and CarryforwardAppropriations -- (12,012) -- 12,012



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CITY OF LOS ANGELES




Home Investment Partnership ProgramActual Variance With




RevenuesTaxes --$ --$ --$ --$ Licenses, Permits and Fines -- -- -- -- Intergovernmental 6,091 45,532 36,970 (8,562) Charges for Services -- -- -- -- Services to Enterprise Funds -- -- -- -- Special Assessments -- -- -- -- Interest -- -- 41 41 Program Income -- -- 9,514 9,514 Other -- -- 10 10

Total Revenues 6,091 45,532 46,535 1,003

Other Financing SourcesTransfers from Other Funds -- -- 91 91 Loans from Other Funds -- -- -- --

Total Other Financing Sources -- -- 91 91



ExpendituresCurrent

General Government -- -- -- -- Protection of Persons and Property -- -- -- -- Public Works -- -- -- -- Health and Sanitation -- -- -- -- Transportation -- -- -- -- Cultural and Recreational Services -- -- -- -- Community Development 2,268 81,254 33,949 47,305







EXCESS (DEFICIENCY) OF REVENUES AND OTHERFINANCING SOURCES OVER EXPENDITURES ANDOTHER FINANCING USES -- (41,428) 9,018 50,446

FUND BALANCES (DEFICITS), JULY 1, RESTATED -- -- (33,001) (33,001)



FUND BALANCES (DEFICITS), JUNE 30 --$ --$ (23,896)$ (23,896)$ Continued...

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CITY OF LOS ANGELES




Special Gas Tax Street ImprovementActual Variance With




RevenuesTaxes --$ --$ --$ --$ Licenses, Permits and Fines -- -- -- -- Intergovernmental 112,820 112,820 119,614 6,794 Charges for Services -- -- -- -- Services to Enterprise Funds -- -- -- -- Special Assessments -- -- -- -- Interest 700 700 716 16 Program Income -- -- -- -- Other 31 31 33 2

Total Revenues 113,551 113,551 120,363 6,812

Other Financing SourcesTransfers from Other Funds -- 84 84 -- Loans from Other Funds -- 896 -- (896)

Total Other Financing Sources -- 980 84 (896)



ExpendituresCurrent

General Government -- -- -- -- Protection of Persons and Property -- -- -- -- Public Works 24,023 24,023 24,023 -- Health and Sanitation -- -- -- -- Transportation -- -- -- -- Cultural and Recreational Services -- -- -- -- Community Development -- -- -- --












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CITY OF LOS ANGELES




Workforce Investment Act Actual Variance With




RevenuesTaxes --$ --$ --$ --$ Licenses, Permits and Fines -- -- -- -- Intergovernmental 16,781 57,176 51,642 (5,534) Charges for Services -- -- -- -- Services to Enterprise Funds -- -- -- -- Special Assessments -- -- -- -- Interest -- -- 24 24 Program Income -- 50 -- (50) Other -- -- 27 27

Total Revenues 16,781 57,226 51,693 (5,533)





ExpendituresCurrent













- 236 -

CITY OF LOS ANGELES




Community Services Block GrantActual Variance With




RevenuesTaxes --$ --$ --$ --$ Licenses, Permits and Fines -- -- -- -- Intergovernmental 1,976 7,441 7,105 (336) Charges for Services -- -- -- -- Services to Enterprise Funds -- -- -- -- Special Assessments -- -- -- -- Interest -- -- 15 15 Program Income -- -- -- -- Other -- -- 4 4

Total Revenues 1,976 7,441 7,124 (317)





ExpendituresCurrent

General Government -- -- -- -- Protection of Persons and Property -- -- -- -- Public Works -- -- -- -- Health and Sanitation -- -- -- -- Transportation -- -- -- -- Cultural and Recreational Services -- -- -- -- Community Development 604 10,333 8,117 2,216



Total Expenditures 604 10,333 8,117 2,216




EXCESS (DEFICIENCY) OF REVENUES AND OTHERFINANCING SOURCES OVER EXPENDITURES ANDOTHER FINANCING USES -- (5,809) (2,692) 3,117

FUND BALANCES (DEFICITS), JULY 1, RESTATED -- -- 979 979




Nonmajor Other Grant Fund -

- 237 -

CITY OF LOS ANGELES




Forfeited Assets Trust of Police DepartmentActual Variance With




RevenuesTaxes --$ --$ --$ --$ Licenses, Permits and Fines -- -- -- -- Intergovernmental -- 872 6,211 5,339 Charges for Services -- -- -- -- Services to Enterprise Funds -- -- -- -- Special Assessments -- -- -- -- Interest -- -- 357 357 Program Income -- -- -- -- Other -- -- -- --

Total Revenues -- 872 6,568 5,696

Other Financing SourcesTransfers from Other Funds -- -- 282 282 Loans from Other Funds -- -- -- --

Total Other Financing Sources -- -- 282 282

TOTAL REVENUES AND OTHER FINANCING SOURCES -- 872 6,850 5,978


ExpendituresCurrent





Other Financing UsesTransfers to Other Funds 199 2,329 2,109 220 Payment of Loans to Other Funds -- -- -- --

Total Other Financing Uses 199 2,329 2,109 220








- 238 -

CITY OF LOS ANGELES




Household Hazardous WasteActual Variance With




RevenuesTaxes --$ --$ --$ --$ Licenses, Permits and Fines -- -- -- -- Intergovernmental 2,000 2,000 2,816 816 Charges for Services -- -- -- -- Services to Enterprise Funds -- -- -- -- Special Assessments -- -- -- -- Interest 13 13 27 14 Program Income -- -- -- -- Other -- -- -- --

Total Revenues 2,013 2,013 2,843 830



TOTAL REVENUES AND OTHER FINANCING SOURCES 2,013 2,013 2,843 830


ExpendituresCurrent

General Government -- -- -- -- Protection of Persons and Property -- -- -- -- Public Works -- -- -- -- Health and Sanitation 846 846 764 82 Transportation -- -- -- -- Cultural and Recreational Services -- -- -- -- Community Development -- -- -- --







EXCESS (DEFICIENCY) OF REVENUES AND OTHERFINANCING SOURCES OVER EXPENDITURES ANDOTHER FINANCING USES (719) (1,384) 559 1,943

FUND BALANCES (DEFICITS), JULY 1, RESTATED 719 719 1,342 623

Appropriation of Fund Balances and CarryforwardAppropriations -- 665 -- (665)




- 239 -

CITY OF LOS ANGELES




Housing Opportunities for Persons with AIDSActual Variance With




RevenuesTaxes --$ --$ --$ --$ Licenses, Permits and Fines -- -- -- -- Intergovernmental 323 323 13,404 13,081 Charges for Services -- -- -- -- Services to Enterprise Funds -- -- -- -- Special Assessments -- -- -- -- Interest -- -- -- -- Program Income -- -- 69 69 Other -- -- -- --

Total Revenues 323 323 13,473 13,150



TOTAL REVENUES AND OTHER FINANCING SOURCES 323 323 13,473 13,150


ExpendituresCurrent

General Government -- -- -- -- Protection of Persons and Property -- -- -- -- Public Works -- -- -- -- Health and Sanitation -- -- -- -- Transportation -- -- -- -- Cultural and Recreational Services -- -- -- -- Community Development 93 14,214 12,246 1,968



Total Expenditures 93 14,214 12,246 1,968

Other Financing UsesTransfers to Other Funds 230 337 222 115 Payment of Loans to Other Funds -- -- -- --

Total Other Financing Uses 230 337 222 115

TOTAL EXPENDITURES AND OTHER FINANCING USES 323 14,551 12,468 2,083







- 240 -

CITY OF LOS ANGELES




Mobile Source Air Pollution ReductionActual Variance With




RevenuesTaxes --$ --$ --$ --$ Licenses, Permits and Fines -- -- -- -- Intergovernmental 4,640 4,838 4,593 (245) Charges for Services -- -- -- -- Services to Enterprise Funds -- -- -- -- Special Assessments -- -- -- -- Interest 75 75 73 (2) Program Income -- -- -- -- Other -- -- -- --

Total Revenues 4,715 4,913 4,666 (247)





ExpendituresCurrent








EXCESS (DEFICIENCY) OF REVENUES AND OTHERFINANCING SOURCES OVER EXPENDITURES ANDOTHER FINANCING USES (2,879) (3,357) (725) 2,632






- 241 -

CITY OF LOS ANGELES




Older Americans ActActual Variance With




RevenuesTaxes --$ --$ --$ --$ Licenses, Permits and Fines -- -- -- -- Intergovernmental 2,326 16,731 16,489 (242) Charges for Services -- -- -- -- Special Assessments -- -- -- -- Interest -- -- -- -- Program Income -- -- -- -- Other -- -- 6 6

Total Revenues 2,326 16,731 16,495 (236)

Other Financing SourcesTransfers from Other Funds -- 1,905 1,905 -- Loans from Other Funds -- -- -- --

Total Other Financing Sources -- 1,905 1,905 --



ExpendituresCurrent

General Government -- -- -- -- Protection of Persons and Property -- -- -- -- Public Works -- -- -- -- Health and Sanitation -- -- -- -- Transportation -- -- -- -- Cultural and Recreational Services -- -- -- -- Community Development -- 21,999 16,999 5,000



Total Expenditures -- 21,999 16,999 5,000




EXCESS (DEFICIENCY) OF REVENUES AND OTHERFINANCING SOURCES OVER EXPENDITURES ANDOTHER FINANCING USES -- (8,950) (625) 8,325

FUND BALANCES (DEFICITS), JULY 1, RESTATED -- -- 1,407 1,407





- 242 -

CITY OF LOS ANGELES




Supplemental Law Enforcement ServicesActual Variance With




RevenuesTaxes --$ --$ --$ --$ Licenses, Permits and Fines -- -- -- -- Intergovernmental 100 3,432 4,979 1,547 Charges for Services -- -- -- -- Special Assessments -- -- -- -- Interest -- -- 50 50 Program Income -- -- -- -- Other -- -- -- --

Total Revenues 100 3,432 5,029 1,597



TOTAL REVENUES AND OTHER FINANCING SOURCES 100 3,432 5,029 1,597


ExpendituresCurrent

General Government -- -- -- -- Protection of Persons and Property -- 66 -- 66 Public Works -- -- -- -- Health and Sanitation -- -- -- -- Transportation -- -- -- -- Cultural and Recreational Services -- -- -- -- Community Development -- -- -- --



Total Expenditures -- 66 -- 66

Other Financing UsesTransfers to Other Funds 100 11,663 7,713 3,950 Payment of Loans to Other Funds -- -- -- --

Total Other Financing Uses 100 11,663 7,713 3,950

TOTAL EXPENDITURES AND OTHER FINANCING USES 100 11,729 7,713 4,016

EXCESS (DEFICIENCY) OF REVENUES AND OTHERFINANCING SOURCES OVER EXPENDITURES ANDOTHER FINANCING USES -- (8,297) (2,684) 5,613






- 243 -

CITY OF LOS ANGELES




Arts and Cultural Facilities and ServicesActual Variance With




RevenuesTaxes --$ --$ --$ --$ Licenses, Permits and Fines -- -- -- -- Intergovernmental -- -- -- -- Charges for Services 107 221 168 (53) Special Assessments -- -- -- -- Interest 8 8 19 11 Program Income -- -- -- -- Other -- -- -- --

Total Revenues 115 229 187 (42)

Other Financing SourcesTransfers from Other Funds 10,477 10,477 10,477 -- Loans from Other Funds -- -- -- --

Total Other Financing Sources 10,477 10,477 10,477 --



ExpendituresCurrent

General Government -- -- -- -- Protection of Persons and Property -- -- -- -- Public Works -- -- -- -- Health and Sanitation -- -- -- -- Transportation -- -- -- -- Cultural and Recreational Services 2,981 3,797 2,501 1,296 Community Development -- -- -- --







EXCESS (DEFICIENCY) OF REVENUES AND OTHERFINANCING SOURCES OVER EXPENDITURES ANDOTHER FINANCING USES -- (1,369) 825 2,194





Nonmajor Other Special Revenue Fund -

- 244 -

CITY OF LOS ANGELES




Arts Development FeeActual Variance With




RevenuesTaxes --$ --$ --$ --$ Licenses, Permits and Fines -- -- -- -- Intergovernmental -- -- -- -- Charges for Services 900 4,334 5,021 687 Special Assessments -- -- -- -- Interest 90 90 122 32 Program Income -- -- -- -- Other -- -- -- --

Total Revenues 990 4,424 5,143 719



TOTAL REVENUES AND OTHER FINANCING SOURCES 990 4,424 5,143 719


ExpendituresCurrent





Other Financing UsesTransfers to Other Funds -- 77 76 1 Payment of Loans to Other Funds -- -- -- --

Total Other Financing Uses -- 77 76 1


EXCESS (DEFICIENCY) OF REVENUES AND OTHERFINANCING SOURCES OVER EXPENDITURES ANDOTHER FINANCING USES (725) (6,758) 1,223 7,981

FUND BALANCES (DEFICITS), JULY 1, RESTATED 725 725 6,751 6,026





- 245 -

CITY OF LOS ANGELES




City Employees RidesharingActual Variance With




RevenuesTaxes --$ --$ --$ --$ Licenses, Permits and Fines -- -- -- -- Intergovernmental -- -- -- -- Charges for Services 3,318 1,488 -- (1,488) Special Assessments -- -- -- -- Interest 12 15 8 (7) Program Income -- -- -- -- Other -- 896 2,920 2,024

Total Revenues 3,330 2,399 2,928 529





ExpendituresCurrent

General Government -- -- -- -- Protection of Persons and Property -- -- -- -- Public Works -- -- -- -- Health and Sanitation -- -- -- -- Transportation -- -- -- -- Cultural and Recreational Services -- -- -- -- Community Development -- -- -- --



Total Expenditures -- -- -- --

Other Financing UsesTransfers to Other Funds 3,739 3,116 3,116 -- Payment of Loans to Other Funds -- -- -- --

Total Other Financing Uses 3,739 3,116 3,116 --

TOTAL EXPENDITURES AND OTHER FINANCING USES 3,739 3,116 3,116 --

EXCESS (DEFICIENCY) OF REVENUES AND OTHERFINANCING SOURCES OVER EXPENDITURES ANDOTHER FINANCING USES (409) (717) (188) 529

FUND BALANCES (DEFICITS), JULY 1, RESTATED 409 409 188 (221)



FUND BALANCES (DEFICITS), JUNE 30 --$ --$ --$ --$ Continued...


- 246 -

CITY OF LOS ANGELES




City Ethics CommissionActual Variance With




RevenuesTaxes --$ --$ --$ --$ Licenses, Permits and Fines -- -- -- -- Intergovernmental -- -- -- -- Charges for Services -- -- -- -- Special Assessments -- -- -- -- Interest -- -- -- -- Program Income -- -- -- -- Other -- -- -- --

Total Revenues -- -- -- --



TOTAL REVENUES AND OTHER FINANCING SOURCES 1,866 1,866 1,866 --


ExpendituresCurrent

General Government 165 1,535 -- 1,535 Protection of Persons and Property -- -- -- -- Public Works -- -- -- -- Health and Sanitation -- -- -- -- Transportation -- -- -- -- Cultural and Recreational Services -- -- -- -- Community Development -- -- -- --



Total Expenditures 165 1,535 -- 1,535




EXCESS (DEFICIENCY) OF REVENUES AND OTHERFINANCING SOURCES OVER EXPENDITURES ANDOTHER FINANCING USES (330) (4,310) 18 4,328






- 247 -

CITY OF LOS ANGELES




City of Los Angeles Affordable HousingActual Variance With




RevenuesTaxes --$ --$ --$ --$ Licenses, Permits and Fines -- -- -- -- Intergovernmental 1,000 1,000 1,411 411 Charges for Services -- -- -- -- Special Assessments -- -- -- -- Interest 100 100 169 69 Program Income -- -- 406 406 Other -- -- 4,379 4,379

Total Revenues 1,100 1,100 6,365 5,265

Other Financing SourcesTransfers from Other Funds -- 9,238 26,440 17,202 Loans from Other Funds -- -- -- --

Total Other Financing Sources -- 9,238 26,440 17,202



ExpendituresCurrent





Other Financing UsesTransfers to Other Funds 1,248 1,576 715 861 Payment of Loans to Other Funds -- -- -- --

Total Other Financing Uses 1,248 1,576 715 861



FUND BALANCES (DEFICITS), JULY 1, RESTATED 1,719 1,719 (8,507) (10,226)





- 248 -

CITY OF LOS ANGELES




Department of Neighborhood EmpowermentActual Variance With




RevenuesTaxes --$ --$ --$ --$ Licenses, Permits and Fines -- -- -- -- Intergovernmental -- -- -- -- Charges for Services -- -- 6 6 Special Assessments -- -- -- -- Interest -- -- -- -- Program Income -- -- -- -- Other -- -- 9 9

Total Revenues -- -- 15 15





ExpendituresCurrent

General Government 3,906 4,696 3,833 863 Protection of Persons and Property -- -- -- -- Public Works -- -- -- -- Health and Sanitation -- -- -- -- Transportation -- -- -- -- Cultural and Recreational Services -- -- -- -- Community Development -- -- -- --



Total Expenditures 3,906 4,696 3,833 863





FUND BALANCES (DEFICITS), JULY 1, RESTATED 1,279 1,279 456 (823)



FUND BALANCES (DEFICITS), JUNE 30 --$ --$ (508)$ (508)$ Continued...


- 249 -

CITY OF LOS ANGELES




El Pueblo de Los Angeles Historical MonumentActual Variance With




RevenuesTaxes --$ --$ --$ --$ Licenses, Permits and Fines -- -- -- -- Intergovernmental -- -- -- -- Charges for Services 4,507 2,458 2,741 283 Special Assessments -- -- -- -- Interest -- -- -- -- Program Income -- -- -- -- Other -- 56 1,753 1,697

Total Revenues 4,507 2,514 4,494 1,980

Other Financing SourcesTransfers from Other Funds -- 152 96 (56) Loans from Other Funds -- -- -- --

Total Other Financing Sources -- 152 96 (56)



ExpendituresCurrent

General Government -- -- -- -- Protection of Persons and Property -- -- -- -- Public Works -- -- -- -- Health and Sanitation -- -- -- -- Transportation -- -- -- -- Cultural and Recreational Services 825 982 921 61 Community Development -- -- -- --







EXCESS (DEFICIENCY) OF REVENUES AND OTHERFINANCING SOURCES OVER EXPENDITURES ANDOTHER FINANCING USES (145) (2,180) (111) 2,069






- 250 -

CITY OF LOS ANGELES




Landfill MaintenanceActual Variance With




RevenuesTaxes --$ --$ --$ --$ Licenses, Permits and Fines -- -- -- -- Intergovernmental -- -- -- -- Charges for Services 4,600 4,600 6,096 1,496 Special Assessments -- -- -- -- Interest 32 32 51 19 Program Income -- -- -- -- Other -- -- -- --

Total Revenues 4,632 4,632 6,147 1,515





ExpendituresCurrent

General Government -- -- -- -- Protection of Persons and Property -- -- -- -- Public Works -- -- -- -- Health and Sanitation 1,454 1,693 1,472 221 Transportation -- -- -- -- Cultural and Recreational Services -- -- -- -- Community Development -- -- -- --







EXCESS (DEFICIENCY) OF REVENUES AND OTHERFINANCING SOURCES OVER EXPENDITURES ANDOTHER FINANCING USES (1,592) (1,864) 58 1,922






- 251 -

CITY OF LOS ANGELES




Local Public SafetyActual Variance With



RevenuesTaxes --$ --$ --$ --$ Licenses, Permits and Fines -- -- -- -- Intergovernmental 32,850 32,850 34,433 1,583 Charges for Services -- -- -- -- Special Assessments -- -- -- -- Interest -- -- -- -- Program Income -- -- -- -- Other -- -- -- --

Total Revenues 32,850 32,850 34,433 1,583





ExpendituresCurrent

General Government -- -- -- -- Protection of Persons and Property -- -- -- -- Public Works -- -- -- -- Health and Sanitation -- -- -- -- Transportation -- -- -- -- Cultural and Recreational Services -- -- -- -- Community Development -- -- -- --



Total Expenditures -- -- -- --




EXCESS (DEFICIENCY) OF REVENUES AND OTHERFINANCING SOURCES OVER EXPENDITURES ANDOTHER FINANCING USES (2,314) (21,551) (731) 20,820






- 252 -

CITY OF LOS ANGELES




Los Angeles Convention and Visitors BureauActual Variance With




RevenuesTaxes 10,477$ 10,477$ 11,673$ 1,196$ Licenses, Permits and Fines -- -- -- -- Intergovernmental -- -- -- -- Charges for Services -- -- -- -- Services to Enterprise -- -- -- -- Special Assessments -- -- -- -- Interest -- -- -- -- Program Income -- -- -- -- Other -- -- -- --

Total Revenues 10,477 10,477 11,673 1,196





ExpendituresCurrent





Other Financing Uses

Transfers to Other Funds 91 91 91 -- Payment of Loans to Other Funds -- -- -- --

Total Other Financing Uses 91 91 91 -- TOTAL EXPENDITURES AND OTHER FINANCING USES 11,697 18,262 11,311 6,951


FINANCING SOURCES OVER EXPENDITURES ANDOTHER FINANCING USES (1,220) (7,785) 362 8,147


Appropriation of Fund Balances and Carryforward

Appropriations -- 6,565 -- (6,565) Encumbrances Lapsed -- -- -- --



- 253 -

Measure R Traffic Relief and Rail Expansion FundsActual Variance With




RevenuesTaxes --$ --$ --$ --$ Licenses, Permits and Fines -- -- -- -- Intergovernmental 37,500 37,500 37,375 (125) Charges for Services -- -- 71 71 Services to Enterprise -- -- -- -- Special Assessments -- -- -- -- Interest 320 320 740 420 Program Income -- -- -- -- Other -- -- -- --

Total Revenues 37,820 37,820 38,186 366





ExpendituresCurrent






Transfers to Other Funds 6,509 10,064 7,807 2,257 Payment of Loans to Other Funds -- -- -- --

Total Other Financing Uses 6,509 10,064 7,807 2,257 TOTAL EXPENDITURES AND OTHER FINANCING USES 51,475 102,164 25,170 76,994


FINANCING SOURCES OVER EXPENDITURES ANDOTHER FINANCING USES (13,655) (64,344) 13,016 77,360








CITY OF LOS ANGELES


- 254 -

CITY OF LOS ANGELES




Multi-Family Bulky Item FeeActual Variance With




RevenuesTaxes --$ --$ --$ --$ Licenses, Permits and Fines -- -- -- -- Intergovernmental -- -- -- -- Charges for Services 6,450 6,450 7,034 584 Services to Enterprise -- -- -- -- Special Assessments -- -- -- -- Interest 61 61 80 19 Program Income -- -- -- -- Other -- -- -- --

Total Revenues 6,511 6,511 7,114 603





ExpendituresCurrent






Transfers to Other Funds 3,418 3,624 3,187 437 Payment of Loans to Other Funds -- -- -- --

Total Other Financing Uses 3,418 3,624 3,187 437 TOTAL EXPENDITURES AND OTHER FINANCING USES 9,994 10,533 6,915 3,618


FINANCING SOURCES OVER EXPENDITURES ANDOTHER FINANCING USES (3,483) (4,022) 199 4,221



Appropriations -- 539 -- (539) Encumbrances Lapsed -- -- -- --



- 255 -

CITY OF LOS ANGELES




Municipal Housing FinanceActual Variance With




RevenuesTaxes --$ --$ --$ --$ Licenses, Permits and Fines -- -- -- -- Intergovernmental -- -- -- -- Charges for Services -- -- 1,397 1,397 Services to Enterprise -- -- -- -- Special Assessments -- -- -- -- Interest -- -- 65 65 Program Income -- -- 35 35 Other -- -- 16 16

Total Revenues -- -- 1,513 1,513



TOTAL REVENUES AND OTHER FINANCING SOURCES -- -- 1,513 1,513


ExpendituresCurrent

General Government -- -- -- -- Protection of Persons and Property -- -- -- -- Public Works -- -- -- -- Health and Sanitation -- -- -- -- Transportation -- -- -- -- Cultural and Recreational Services -- -- -- -- Community Development 574 826 500 326








FINANCING SOURCES OVER EXPENDITURES ANDOTHER FINANCING USES (2,025) (3,141) (54) 3,087



Appropriations -- 1,116 -- (1,116) Encumbrances Lapsed -- -- 234 234



- 256 -




RevenuesTaxes --$ --$ --$ --$ Licenses, Permits and Fines -- -- -- -- Intergovernmental -- -- -- -- Charges for Services 13,982 12,031 15,854 3,823 Services to Enterprise -- -- -- -- Special Assessments -- -- -- -- Interest 80 80 142 62 Program Income -- -- -- -- Other -- -- -- --

Total Revenues 14,062 12,111 15,996 3,885





ExpendituresCurrent










FUND BALANCES (DEFICITS), JULY 1, RESTATED 2,661 2,661 2,125 (536)




(Non-GAAP Budgetary Basis)Annually Budgeted Nonmajor Special Revenue Funds - (Continued)


CITY OF LOS ANGELES

Budgetary Comparison Schedule


Planning Case Processing Special Fund

- 257 -

CITY OF LOS ANGELES




Rent StabilizationActual Variance With




RevenuesTaxes --$ --$ --$ --$ Licenses, Permits and Fines -- -- -- -- Intergovernmental -- -- -- -- Charges for Services 11,054 11,251 14,221 2,970 Services to Enterprise -- -- -- -- Special Assessments -- -- -- -- Interest -- -- -- -- Program Income -- -- -- -- Other -- -- 28 28

Total Revenues 11,054 11,251 14,249 2,998





ExpendituresCurrent















- 258 -

CITY OF LOS ANGELES




Street Damage Restoration FeeActual Variance With




RevenuesTaxes --$ --$ --$ --$ Licenses, Permits and Fines -- -- -- -- Intergovernmental -- -- -- -- Charges for Services 7,600 7,600 5,416 (2,184) Services to Enterprise -- -- -- -- Special Assessments -- -- -- -- Interest 93 93 22 (71) Program Income -- -- -- -- Other -- -- -- --

Total Revenues 7,693 7,693 5,438 (2,255)





ExpendituresCurrent

General Government -- -- -- -- Protection of Persons and Property -- -- -- -- Public Works 3,418 2,658 -- 2,658 Health and Sanitation -- -- -- -- Transportation -- -- -- -- Cultural and Recreational Services -- -- -- -- Community Development -- -- -- --



Total Expenditures 3,418 2,658 -- 2,658


Transfers to Other Funds 9,323 5,652 5,600 52 Payment of Loans to Other Funds -- -- -- --

Total Other Financing Uses 9,323 5,652 5,600 52 TOTAL EXPENDITURES AND OTHER FINANCING USES 12,741 8,310 5,600 2,710


FINANCING SOURCES OVER EXPENDITURES ANDOTHER FINANCING USES (5,048) (617) (162) 455

FUND BALANCES (DEFICITS), JULY 1, RESTATED 5,048 5,048 1,550 (3,498)


Appropriations -- (4,431) -- 4,431 Encumbrances Lapsed -- -- -- --



- 259 -

Systematic Code Enforcement FeeActual Variance With




RevenuesTaxes --$ --$ --$ --$ Licenses, Permits and Fines -- -- -- -- Intergovernmental -- -- -- -- Charges for Services 31,991 31,991 41,570 9,579 Services to Enterprise -- -- -- -- Special Assessments -- -- 88 88 Interest 350 350 374 24 Program Income -- -- -- -- Other -- -- 58 58

Total Revenues 32,341 32,341 42,090 9,749





ExpendituresCurrent















CITY OF LOS ANGELES




- 260 -




RevenuesTaxes 17,439$ 17,439$ 17,959$ 520$ Licenses, Permits and Fines -- -- -- -- Intergovernmental -- -- -- -- Charges for Services -- 127 287 160 Services to Enterprise -- -- -- -- Special Assessments -- -- -- -- Interest -- -- -- -- Program Income -- -- -- -- Other 150 155 5 (150)

Total Revenues 17,589 17,721 18,251 530





ExpendituresCurrent









FINANCING SOURCES OVER EXPENDITURES ANDOTHER FINANCING USES (386) (12,103) 5,457 17,560

FUND BALANCES (DEFICITS), JULY 1, RESTATED 386 386 17,675 17,289





(Non-GAAP Budgetary Basis)Annually Budgeted Nonmajor Special Revenue Funds - (Continued)


CITY OF LOS ANGELES


Telecommunications Liquidated Damages and Lost Franchise Fees

- 261 -

Actual Variance With Amounts Final Budget Budgeted Amounts (Budgetary Positive Original Final Basis) (Negative)


RevenuesTaxes --$ --$ --$ --$ Licenses, Permits and Fines 13,121 13,121 10,251 (2,870) Intergovernmental -- -- -- -- Charges for Services -- -- -- -- Services to Enterprise -- -- -- -- Special Assessments -- -- -- -- Interest -- -- -- -- Program Income -- -- -- -- Other -- -- -- --

Total Revenues 13,121 13,121 10,251 (2,870)





ExpendituresCurrent

General Government -- -- -- -- Protection of Persons and Property -- -- -- -- Public Works -- -- -- -- Health and Sanitation -- -- -- -- Transportation -- 12 -- 12 Cultural and Recreational Services -- -- -- -- Community Development -- -- -- --



Total Expenditures -- 12 -- 12





FINANCING SOURCES OVER EXPENDITURES ANDOTHER FINANCING USES -- 1,084 (725) (1,809)



Appropriations -- (1,084) -- 1,084 Encumbrances Lapsed -- -- -- --


CITY OF LOS ANGELES


Annually Budgeted Nonmajor Special Revenue Funds - (Continued)

Nonmajor Other Special Revenue Fund - Traffic Safety

(amounts expressed in thousands)For the Fiscal Year Ended June 30, 2012

- 262 -

CITY OF LOS ANGELES




ZooActual Variance With




RevenuesTaxes --$ --$ --$ --$ Licenses, Permits and Fines -- -- 9 9 Intergovernmental -- -- -- -- Charges for Services 13,336 13,537 14,219 682 Services to Enterprise -- -- -- -- Special Assessments -- -- -- -- Interest 96 96 46 (50) Program Income -- -- -- -- Other -- -- 4 4

Total Revenues 13,432 13,633 14,278 645


-- -- -- --

TOTAL REVENUES AND OTHER FINANCING SOURCES 4,851 4,851 4,851 --

EXPENDITURES AND OTHER FINANCING USES 18,283 18,484 19,129 645

ExpendituresCurrent

General Government -- -- -- -- Protection of Persons and Property -- -- -- -- Public Works -- -- -- -- Health and Sanitation -- -- -- -- Transportation -- -- -- -- Cultural and Recreational Services -- 966 470 496 Community Development -- -- -- --



Total Expenditures -- 966 470 496





FINANCING SOURCES OVER EXPENDITURES ANDOTHER FINANCING USES -- (3,955) 1,581 5,536





Total Other Financing Sources


- 263 -

Allocations from Other Governmental AgenciesActual Variance With




RevenuesTaxes 1,072$ 1,072$ 1,068$ (4)$ Licenses, Permits and Fines 2,613 2,613 992 (1,621) Intergovernmental 6,029 5,870 7,736 1,866 Charges for Services 9,165 11,243 14,071 2,828 Services to Enterprise -- -- 31 31 Special Assessments 300 997 952 (45) Interest 2,651 2,651 2,327 (324) Program Income 153 153 153 -- Other 844 968 533 (435)

Total Revenues 22,827 25,567 27,863 2,296

Other Financing SourcesTransfers from Other Funds -- 856 856 -- Loans from Other Funds -- -- -- --

Total Other Financing Sources -- 856 856 --



ExpendituresCurrent

General Government -- -- -- -- Protection of Persons and Property 74 4,031 2,841 1,190 Public Works -- 8,697 8,697 -- Health and Sanitation -- -- -- -- Transportation 2,016 2,093 452 1,641 Cultural and Recreational Services -- -- -- -- Community Development 2,602 7,178 4,194 2,984








FINANCING SOURCES OVER EXPENDITURES ANDOTHER FINANCING USES (32,857) (51,507) (40,994) 10,513





CITY OF LOS ANGELES




- 264 -




RevenuesTaxes 73,362$ 73,362$ 72,414$ (948)$ Licenses, Permits and Fines 16,834 16,834 41,187 24,353 Intergovernmental 293,468 406,305 398,042 (8,263) Charges for Services 295,366 295,687 307,708 12,021 Services to Enterprise -- -- 1,274 1,274 Special Assessments 43,711 44,408 45,614 1,206 Interest 7,267 7,270 7,923 653 Program Income 153 203 10,177 9,974 Other 5,504 6,660 11,582 4,922

Total Revenues 735,665 850,729 895,921 45,192

Other Financing SourcesTransfers from Other Funds 23,853 36,319 51,638 15,319 Loans from Other Funds 11,608 19,088 17,447 (1,641)

Total Other Financing Sources 35,461 55,407 69,085 13,678



ExpendituresCurrent

General Government 4,071 6,231 3,833 2,398 Protection of Persons and Property 84,322 236,514 60,513 176,001 Public Works 61,831 83,322 69,931 13,391 Health and Sanitation 80,647 88,127 45,745 42,382 Transportation 116,535 207,348 62,014 145,334 Cultural and Recreational Services 17,127 35,021 18,956 16,065 Community Development 22,531 297,813 145,604 152,209


Principal 4,175 4,805 4,175 630 Interest 4,428 4,626 4,158 468

Total Expenditures 416,509 1,013,410 421,198 592,212


Transfers to Other Funds 527,498 647,351 499,690 147,661 Payment of Loans to Other Funds 7,099 6,372 3,737 2,635

Total Other Financing Uses 534,597 653,723 503,427 150,296 TOTAL EXPENDITURES AND OTHER FINANCING USES 951,106 1,667,133 924,625 742,508





Appropriations -- 581,017 -- (581,017) Encumbrances Lapsed -- -- 3,737 3,737

FUND BALANCES (DEFICITS), JUNE 30 --$ --$ 453,680$ 453,680$

CITY OF LOS ANGELES


Annually Budgeted Nonmajor Special Revenue Funds - (Continued)

Total Annually Budgeted Nonmajor Special Revenue Funds


- 265 -

CITY OF LOS ANGELES

Reconciliation of Operations on Budgetary Basis to the GAAP BasisNonmajor Special Revenue Funds


Deficiency of Revenues and Other Financing Sources OverExpenditures and Other Financing Uses- Budgetary 40,381$

Basis DifferenceAdjustments for net changes to accrued assets and liabilities. The GAAP basis

operating statement recognizes revenues as soon as they are both measurable and available, and expenditures generally are recorded whenliability is incurred; whereas, the budget basis operating statement reflectsrevenues when received and expenditures when paid. (18,870)

Grant funded loans are recorded as expenditures when disbursed and asprogram income when repaid (budget), as opposed to adjustments to the loans receivable account balance (GAAP). (4,115)

Encumbrances, which represent commitments to acquire goods and services,are recorded as the equivalent of expenditures in the budget year incurred(budget), as opposed to a reservation of fund balance (GAAP). Encumbrances reported as budgetary expenditures 89,315 Prior year encumbrances expended in current year (79,035)

Perspective DifferenceCertain Nonmajor Special Revenue Funds are not included in the legally adopted

budget; while for some, the budget provides for only the portion of fund receiptsthat are expended for City department operations. 47,305

Net Change in Fund Balances- Nonmajor Special Revenue Funds 74,981$

DETAILS OF RESTATEMENT OF JULY 1 FUND BALANCES

Fund Balances, July 1, as previously reported 406,745$ Adjustment for fund not budgeted in current year included in the Allocationsfrom other Governmental Agencies:

Industrial Development Authority 161 Subtotal 161

Adjustment for fund budgeted in current year included in the Allocationsfrom other Governmental Agencies:

Overnight/Permit Parking Program Revenue 2,220 Repair and Demolition 840 City Attorney's Consumer Protection Prosecution (404)

2,656

Fund Balances, July 1, as restated 409,562$

- 266 -

CITY OF LOS ANGELES

Supplemental Schedule of Appropriations,Expenditures and Other Financing Uses

Budget and Actual (Non-GAAP Budgetary Basis) All Budgeted Special Revenue Funds


Additional Variance With Original Appropriations, Final Budget Adopted Carryforward Final Encumbrances Total Positive Budget and Transfers Budget Expenditures June 30, 2012 Actual (Negative)

MAJOR FUNDS

COMMUNITY DEVELOPMENTCurrent - Special Purpose 9,238$ 134,437$ 143,675$ 50,883$ 10,707$ 61,590$ 82,085$ Transfers to Other Funds 24,985 13,291 38,276 30,837 -- 30,837 7,439

TOTAL 34,223 147,728 181,951 81,720 10,707 92,427 89,524

PROPOSITION A LOCAL TRANSIT ASSISTANCE

Current - Special Purpose 139,475 109,454 248,929 142,084 367 142,451 106,478 Transfers to Other Funds 8,403 6,087 14,490 7,278 -- 7,278 7,212

TOTAL 147,878 115,541 263,419 149,362 367 149,729 113,690

SOLID WASTE RESOURCES Current - Special Purpose 147,991 9,717 157,708 115,278 20,765 136,043 21,665 Debt Service Principal 26,045 -- 26,045 26,045 -- 26,045 -- Interest 14,027 1,748 15,775 14,027 -- 14,027 1,748 Capital Outlay 64,208 2,024 66,232 97 2 99 66,133 Transfers to Other Funds 107,720 21,283 129,003 102,785 -- 102,785 26,218

TOTAL 359,991 34,772 394,763 258,232 20,767 278,999 115,764

NONMAJOR FUNDS

BUILDING AND SAFETY PERMITCurrent - Special Purpose 46,739 99,018 145,757 26,821 6,711 33,532 112,225 Transfers to Other Funds 63,091 5,196 68,287 62,865 -- 62,865 5,422

TOTAL 109,830 104,214 214,044 89,686 6,711 96,397 117,647

CITYWIDE RECYCLINGCurrent - Special Purpose 55,493 1,753 57,246 18,307 7,808 26,115 31,131 Transfers to Other Funds 6,605 509 7,114 5,810 -- 5,810 1,304

TOTAL 62,098 2,262 64,360 24,117 7,808 31,925 32,435

PROPOSITION C ANTI-GRIDLOCK TRANSITIMPROVEMENT


TOTAL 73,851 64,324 138,175 61,999 295 62,294 75,881

SPECIAL PARKING REVENUECurrent - Special Purpose 40,202 11,499 51,701 26,955 3,334 30,289 21,412 Capital Outlay 536 3,156 3,692 716 -- 716 2,976 Debt Service Principal 4,175 630 4,805 4,175 -- 4,175 630 Interest 4,428 198 4,626 4,158 -- 4,158 468 Transfers to Other Funds 17,193 (9,430) 7,763 2,225 -- 2,225 5,538

TOTAL 66,534 6,053 72,587 38,229 3,334 41,563 31,024

Continued...

- 267 -

CITY OF LOS ANGELES


Budget and Actual (Non-GAAP Budgetary Basis) All Budgeted Special Revenue Funds - (Continued)



SPECIAL POLICE COMMUNICATIONS/911 SYSTEM TAX

Current - Special Purpose 966$ --$ 966$ 420$ --$ 420$ 546$ Transfers to Other Funds 21,468 -- 21,468 21,175 -- 21,175 293

TOTAL 22,434 -- 22,434 21,595 -- 21,595 839

STORMWATER POLLUTIONABATEMENT

Current - Special Purpose 11,391 4,746 16,137 10,085 600 10,685 5,452 Capital Outlay 1,063 -- 1,063 -- 86 86 977 Transfers to Other Funds 19,371 465 19,836 17,926 -- 17,926 1,910

TOTAL 31,825 5,211 37,036 28,011 686 28,697 8,339

STREET LIGHTING MAINTENANCE ASSESSMENT

Current - Special Purpose 34,390 13,554 47,944 24,575 12,636 37,211 10,733 Capital Outlay 1,531 2,755 4,286 854 224 1,078 3,208 Payment of Loans 7,099 (727) 6,372 3,579 158 3,737 2,635 Transfers to Other Funds 23,146 3,941 27,087 20,887 -- 20,887 6,200

TOTAL 66,166 19,523 85,689 49,895 13,018 62,913 22,776

DISASTER ASSISTANCECurrent - Special Purpose 4,700 (2,600) 2,100 2,100 -- 2,100 -- Transfers to Other Funds 9,824 (9,412) 412 201 -- 201 211

TOTAL 14,524 (12,012) 2,512 2,301 -- 2,301 211

HOME INVESTMENT PARTNERSHIP PROGRAM

Current - Special Purpose 2,268 78,986 81,254 18,390 15,559 33,949 47,305 Transfers to Other Funds 3,823 1,883 5,706 3,659 -- 3,659 2,047

TOTAL 6,091 80,869 86,960 22,049 15,559 37,608 49,352

SPECIAL GAS TAX STREETIMPROVEMENT

Current - Special Purpose 24,023 -- 24,023 24,023 -- 24,023 -- Capital Outlay 17,712 22,850 40,562 1,837 2,552 4,389 36,173 Transfers to Other Funds 77,401 10,319 87,720 76,885 -- 76,885 10,835

TOTAL 119,136 33,169 152,305 102,745 2,552 105,297 47,008

WORKFORCE INVESTMENT ACTCurrent - Special Purpose 4,888 88,363 93,251 30,125 7,752 37,877 55,374 Transfers to Other Funds 11,893 25,554 37,447 11,201 -- 11,201 26,246

TOTAL 16,781 113,917 130,698 41,326 7,752 49,078 81,620

COMMUNITY SERVICES BLOCK GRANT

Current - Special Purpose 604 9,729 10,333 5,283 2,834 8,117 2,216 Transfers to Other Funds 1,372 1,545 2,917 1,699 -- 1,699 1,218

TOTAL 1,976 11,274 13,250 6,982 2,834 9,816 3,434 Continued...

- 268 -

CITY OF LOS ANGELES





FORFEITED ASSETS TRUST OFPOLICE DEPARTMENT

Current - Special Purpose 5,130$ 9,734$ 14,864$ 3,888$ 2,847$ 6,735$ 8,129$ Transfers to Other Funds 199 2,130 2,329 2,109 -- 2,109 220

TOTAL 5,329 11,864 17,193 5,997 2,847 8,844 8,349

HOUSEHOLD HAZARDOUS WASTE

Current - Special Purpose 846 -- 846 764 -- 764 82 Transfers to Other Funds 1,886 665 2,551 1,520 -- 1,520 1,031

TOTAL 2,732 665 3,397 2,284 -- 2,284 1,113

HOUSING OPPORTUNITIES FORPERSONS WITH AIDS

Current - Special Purpose 93 14,121 14,214 10,332 1,914 12,246 1,968 Transfers to Other Funds 230 107 337 222 -- 222 115

TOTAL 323 14,228 14,551 10,554 1,914 12,468 2,083

MOBILE SOURCE AIRPOLLUTION REDUCTION

Current - Special Purpose 4,887 409 5,296 2,978 3 2,981 2,315 Transfers to Other Funds 2,707 267 2,974 2,410 -- 2,410 564

TOTAL 7,594 676 8,270 5,388 3 5,391 2,879

OLDER AMERICANS ACTCurrent - Special Purpose -- 21,999 21,999 14,171 2,828 16,999 5,000 Transfers to Other Funds 2,326 3,261 5,587 2,026 -- 2,026 3,561

TOTAL 2,326 25,260 27,586 16,197 2,828 19,025 8,561

SUPPLEMENTAL LAW ENFORCEMENT SERVICES

Current - Special Purpose -- 66 66 -- -- -- 66 Transfers to Other Funds 100 11,563 11,663 7,713 -- 7,713 3,950

TOTAL 100 11,629 11,729 7,713 -- 7,713 4,016

ARTS AND CULTURAL FACILITIES AND SERVICES

Current - Special Purpose 2,981 816 3,797 2,485 16 2,501 1,296 Transfers to Other Funds 7,611 667 8,278 7,338 -- 7,338 940

TOTAL 10,592 1,483 12,075 9,823 16 9,839 2,236

ARTS DEVELOPMENT FEECurrent - Special Purpose 1,715 9,390 11,105 1,222 2,622 3,844 7,261 Transfers to Other Funds -- 77 77 76 -- 76 1

TOTAL 1,715 9,467 11,182 1,298 2,622 3,920 7,262

CITY EMPLOYEES RIDESHARING

Transfers to Other Funds 3,739 (623) 3,116 3,116 -- 3,116 -- Continued...

- 269 -

CITY OF LOS ANGELES





CITY ETHICS COMMISSIONCurrent - Special Purpose 165$ 1,370$ 1,535$ --$ --$ --$ 1,535$ Transfers to Other Funds 2,031 2,610 4,641 1,848 -- 1,848 2,793

TOTAL 2,196 3,980 6,176 1,848 -- 1,848 4,328

CITY OF LOS ANGELESAFFORDABLE HOUSING

Current - Special Purpose 1,571 40,907 42,478 12,120 13,368 25,488 16,990 Transfers to Other Funds 1,248 328 1,576 715 -- 715 861

TOTAL 2,819 41,235 44,054 12,835 13,368 26,203 17,851

DEPARTMENT OF NEIGHBORHOODEMPOWERMENT

Current - Special Purpose 3,906 790 4,696 2,857 976 3,833 863 Transfers to Other Funds 1,832 272 2,104 1,738 -- 1,738 366

TOTAL 5,738 1,062 6,800 4,595 976 5,571 1,229

EL PUEBLO DE LOS ANGELESHISTORICAL MONUMENT

Current - Special Purpose 825 157 982 921 -- 921 61 Transfers to Other Funds 3,827 37 3,864 3,780 -- 3,780 84

TOTAL 4,652 194 4,846 4,701 -- 4,701 145

LANDFILL MAINTENANCECurrent - Special Purpose 1,454 239 1,693 1,471 1 1,472 221 Transfers to Other Funds 4,770 33 4,803 4,617 -- 4,617 186

TOTAL 6,224 272 6,496 6,088 1 6,089 407

LOCAL PUBLIC SAFETYTransfers to Other Funds 35,164 19,237 54,401 35,164 -- 35,164 19,237

LOS ANGELES CONVENTION AND VISITORS BUREAU

Current - Special Purpose 11,606 6,565 18,171 11,220 -- 11,220 6,951 Transfers to Other Funds 91 -- 91 91 -- 91 --

TOTAL 11,697 6,565 18,262 11,311 -- 11,311 6,951

MEASURE R TRAFFIC RELIEF ANDRAIL EXPANSION

Current - Special Purpose 44,966 47,134 92,100 14,707 2,656 17,363 74,737 Transfers to Other Funds 6,509 3,555 10,064 7,807 -- 7,807 2,257

TOTAL 51,475 50,689 102,164 22,514 2,656 25,170 76,994

MULTI-FAMILY BULKY ITEM FEECurrent - Special Purpose 6,576 333 6,909 3,706 22 3,728 3,181 Transfers to Other Funds 3,418 206 3,624 3,187 -- 3,187 437

TOTAL 9,994 539 10,533 6,893 22 6,915 3,618 Continued...

- 270 -

CITY OF LOS ANGELES





MUNICIPAL HOUSING FINANCECurrent - Special Purpose 574$ 252$ 826$ 418$ 82$ 500$ 326$ Transfers to Other Funds 1,451 864 2,315 1,067 -- 1,067 1,248

TOTAL 2,025 1,116 3,141 1,485 82 1,567 1,574

PLANNING CASE PROCESSINGSPECIAL FUND

Current - Special Purpose 3,760 171 3,931 2,219 59 2,278 1,653 Transfers to Other Funds 12,963 (6) 12,957 10,796 -- 10,796 2,161

TOTAL 16,723 165 16,888 13,015 59 13,074 3,814

RENT STABILIZATIONCurrent - Special Purpose 6,171 16,178 22,349 3,566 390 3,956 18,393 Transfers to Other Funds 9,900 1,172 11,072 8,591 -- 8,591 2,481

TOTAL 16,071 17,350 33,421 12,157 390 12,547 20,874

STREET DAMAGE RESTORATION

Current - Special Purpose 3,418 (760) 2,658 -- -- -- 2,658 Transfers to Other Funds 9,323 (3,671) 5,652 5,600 -- 5,600 52

TOTAL 12,741 (4,431) 8,310 5,600 -- 5,600 2,710

SYSTEMATIC CODEENFORCEMENT FEE


TOTAL 42,828 37,434 80,262 35,469 281 35,750 44,512

TELECOMMUNICATIONSLIQUIDATED DAMAGES ANDLOST FRANCHISE FEES


TOTAL 17,975 11,849 29,824 12,173 621 12,794 17,030

TRAFFIC SAFETYCurrent - Special Purpose -- 12 12 -- -- -- 12 Transfers to Other Funds 13,121 (1,096) 12,025 10,976 -- 10,976 1,049

TOTAL 13,121 (1,084) 12,037 10,976 -- 10,976 1,061

ZOOCurrent - Special Purpose -- 966 966 391 79 470 496 Transfers to Other Funds 18,283 3,190 21,473 17,078 -- 17,078 4,395

TOTAL 18,283 4,156 22,439 17,469 79 17,548 4,891

ALLOCATIONS FROM OTHERGOVERNMENTAL AGENCIES


TOTAL 55,684 22,246 77,930 68,985 728 69,713 8,217 Continued...

- 271 -

CITY OF LOS ANGELES





TOTAL BUDGETED SPECIALREVENUE FUNDS 1,493,198$ 1,014,068$ 2,507,266$ 1,323,897$ 121,883$ 1,445,780$ 1,061,486$

ALL ANNUALLY BUDGETEDSPECIAL REVENUE FUNDS

Current - Special Purpose 683,768$ 820,920$ 1,504,688$ 627,819$ 118,861$ 746,680$ 758,008$ Capital Outlay 85,050 30,785 115,835 3,504 2,864 6,368 109,467 Payment of Loans 7,099 (727) 6,372 3,579 158 3,737 2,635 Debt Service Principal 30,220 630 30,850 30,220 -- 30,220 630 Interest 18,455 1,946 20,401 18,185 -- 18,185 2,216 Transfers to Other Funds 668,606 160,514 829,120 640,590 -- 640,590 188,530

TOTAL 1,493,198$ 1,014,068$ 2,507,266$ 1,323,897$ 121,883$ 1,445,780$ 1,061,486$

- 272 -

Refunding

Series 2002-A Series 2003-A Series 2003-B Series 2004-A Series 2008-A

ASSETSCash and Pooled Investments 16,127$ 13,929$ 8,048$ 24,103$ 8,063$ Other Investments -- -- -- -- -- Taxes Receivable (Net of Allowance for Uncollectibles of $6,752) 2,764 2,340 1,310 3,303 1,646 Investment Income Receivable 54 47 26 82 26

TOTAL ASSETS 18,945$ 16,316$ 9,384$ 27,488$ 9,735$


LIABILITIESDeferred Revenue and Other Credits 1,676$ 1,420$ 795$ 2,008$ 997$ Matured Bonds and Interest Payable -- -- -- -- -- Other Liabilities 435 375 217 650 217

TOTAL LIABILITIES 2,111 1,795 1,012 2,658 1,214

FUND BALANCESRestricted for: Debt Service 16,834 14,521 8,372 24,830 8,521

TOTAL LIABILITIES AND FUND BALANCES 18,945$ 16,316$ 9,384$ 27,488$ 9,735$ Continued...

CITY OF LOS ANGELES

General Obligation Bonds

Combining Balance SheetNonmajor Debt Service Funds


- 273 -

Refunding Refunding

Series 2009-A Series 2011-A Series 2011-B Series 2012-A

ASSETSCash and Pooled Investments 14,606$ 15,422$ 10,868$ 3,884$ Other Investments -- -- -- -- Taxes Receivable (Net of Allowance for Uncollectibles of $6,752) 2,805 904 3,135 2,343 Investment Income Receivable 48 54 22 6

TOTAL ASSETS 17,459$ 16,380$ 14,025$ 6,233$


LIABILITIESDeferred Revenue and Other Credits 1,700$ 557$ 1,893$ 1,412$ Matured Bonds and Interest Payable -- -- -- -- Other Liabilities 394 416 293 105

TOTAL LIABILITIES 2,094 973 2,186 1,517

FUND BALANCESRestricted for: Debt Service 15,365 15,407 11,839 4,716


CITY OF LOS ANGELES


Combining Balance Sheet - (Continued)Nonmajor Debt Service Funds


- 274 -

OtherSolid Nonmajor

Convention Waste Debt ServiceCenter Resources Funds Total

ASSETSCash and Pooled Investments 1,667$ 36,882$ 65,197$ 218,796$ Other Investments 13,705 -- -- 13,705 Taxes Receivable (Net of Allowance for Uncollectibles of $6,752) -- -- 8,887 29,437 Investment Income Receivable 3 -- 177 545

TOTAL ASSETS 15,375$ 36,882$ 74,261$ 262,483$


LIABILITIESDeferred Revenue and Other Credits 1$ $ -- 5,392$ 17,851$ Matured Bonds and Interest Payable -- -- 307 307 Other Liabilities 45 -- 1,440 4,587

TOTAL LIABILITIES 46 -- 7,139 22,745

FUND BALANCESRestricted for: Debt Service 15,329 36,882 67,122 239,738

TOTAL LIABILITIES AND FUND BALANCES 15,375$ 36,882$ 74,261$ 262,483$

CITY OF LOS ANGELES

(amounts expressed in thousands)June 30, 2012

Nonmajor Debt Service FundsCombining Balance Sheet - (Continued)

- 275 -

Refunding

Series 2002-A Series 2003-A Series 2003-B Series 2004-A Series 2008-A

REVENUESProperty Taxes 13,585$ 11,257$ 7,773$ 27,038$ 8,373$ Charges for Services -- -- -- -- -- Intergovernmental -- -- -- -- -- Investment Earnings 207 169 161 356 123

TOTAL REVENUES 13,792 11,426 7,934 27,394 8,496

EXPENDITURESDebt Service:

Principal 13,110 11,670 1,365 18,025 5,050 Interest 4,924 4,376 562 14,935 3,888 Cost of Issuance -- -- -- -- --


EXCESS (DEFICIENCY) OF REVENUES OVER EXPENDITURES (4,242) (4,620) 6,007 (5,566) (442)

OTHER FINANCING SOURCES (USES)Transfers In -- -- -- -- -- Transfers Out -- -- -- -- -- Premium on Issuance of Long-term Debt -- -- -- -- -- Issuance of Refunding Bonds -- -- -- -- -- Premium on Issuance of Refunding Bonds -- -- -- -- -- Payment to Refunded Bond Escrow Agent -- -- -- -- --

TOTAL OTHER FINANCING SOURCES (USES) -- -- -- -- --

NET CHANGE IN FUND BALANCES (4,242) (4,620) 6,007 (5,566) (442)

FUND BALANCES, JULY 1 21,076 19,141 2,365 30,396 8,963

FUND BALANCES, JUNE 30 16,834$ 14,521$ 8,372$ 24,830$ 8,521$ Continued...

CITY OF LOS ANGELES

Combining Statement of Revenues, Expenditures


and Changes in Fund BalancesNonmajor Debt Service Funds


- 276 -

Refunding Refunding

Series 2009-A Series 2011-A Series 2011-B Series 2012-A

REVENUESProperty Taxes 14,091$ 6,745$ 16,023$ 4,650$ Charges for Services -- -- -- -- Intergovernmental 517 -- -- -- Investment Earnings 227 424 228 66

TOTAL REVENUES 14,835 7,169 16,251 4,716


Principal 8,825 -- -- -- Interest 6,747 2,942 7,500 -- Cost of Issuance -- 746 741 1,402


EXCESS (DEFICIENCY) OF REVENUES OVER EXPENDITURES (737) 3,481 8,010 3,314

OTHER FINANCING SOURCES (USES)Transfers In -- -- 3,088 -- Transfers Out -- -- -- -- Premium on Issuance of Long-term Debt -- 11,926 -- -- Issuance of Refunding Bonds -- -- 259,660 225,850 Premium on Issuance of Refunding Bonds -- -- 44,049 45,281 Payment to Refunded Bond Escrow Agent -- -- (302,968) (269,729)

TOTAL OTHER FINANCING SOURCES (USES) -- 11,926 3,829 1,402

NET CHANGE IN FUND BALANCES (737) 15,407 11,839 4,716

FUND BALANCES, JULY 1 16,102 -- -- --

FUND BALANCES, JUNE 30 15,365$ 15,407$ 11,839$ 4,716$ Continued...

CITY OF LOS ANGELES

Combining Statement of Revenues, Expenditures


and Changes in Fund Balances - (Continued)Nonmajor Debt Service Funds


- 277 -

OtherSolid Nonmajor

Convention Waste Debt ServiceCenter Resources Funds Total

REVENUESProperty Taxes --$ --$ 51,618$ 161,153$ Charges for Services 4,536 -- -- 4,536 Intergovernmental -- -- -- 517 Investment Earnings 11 830 791 3,593

TOTAL REVENUES 4,547 830 52,409 169,799


Principal 32,040 26,045 65,585 181,715 Interest 20,279 14,028 26,241 106,422 Cost of Issuance -- -- -- 2,889


EXCESS (DEFICIENCY) OF REVENUES OVER EXPENDITURES (47,772) (39,243) (39,417) (121,227)

OTHER FINANCING SOURCES (USES)Transfers In 47,949 39,188 20,372 110,597 Transfers Out -- -- (3,089) (3,089) Premium on Issuance of Long-term Debt -- -- -- 11,926 Issuance of Refunding Bonds -- -- -- 485,510 Premium on Issuance of Refunding Bonds -- -- -- 89,330 Payment to Refunded Bond Escrow Agent -- -- -- (572,697)

TOTAL OTHER FINANCING SOURCES (USES) 47,949 39,188 17,283 121,577

NET CHANGE IN FUND BALANCES 177 (55) (22,134) 350


FUND BALANCES, JUNE 30 15,329$ 36,882$ 67,122$ 239,738$


CITY OF LOS ANGELES

Combining Statement of Revenues, Expendituresand Changes in Fund Balances - (Continued)

Nonmajor Debt Service FundsFor the Fiscal Year Ended June 30, 2012

- 278 -

CITY OF LOS ANGELES


(Non-GAAP Budgetary Basis)

Annually Budgeted Nonmajor Debt Service Funds



General Obligation Bonds Series 2002-A



(Budgetary Positive


REVENUES

RevenuesTaxes 20,550$ 20,550$ 13,198$ (7,352)$ Intergovernmental -- -- -- -- Charges for Services -- -- -- -- Interest -- -- 240 240

TOTAL REVENUES 20,550 20,550 13,438 (7,112)


ExpendituresCurrent General Government -- -- -- -- Debt Service Principal 13,110 13,110 13,110 -- Interest 7,440 7,440 4,925 2,515


Other Financing UsesTransfers to Other Funds -- -- -- --


EXCESS (DEFICIENCY) OF REVENUESOVER EXPENDITURES ANDOTHER FINANCING USES -- -- (4,597) (4,597)

FUND BALANCES, JULY 1, RESTATED -- -- 20,026 20,026

Appropriation of Fund Balance andCarryforward Appropriations -- -- -- --


Continued..

Budgeted Amounts

- 279 -

CITY OF LOS ANGELES



Annually Budgeted Nonmajor Debt Service Funds - (Continued)






(Budgetary Positive


REVENUES


TOTAL REVENUES 18,964 18,964 11,124 (7,840)










Continued..

Budgeted Amounts

- 280 -

CITY OF LOS ANGELES






General Obligation Bonds Refunding Series 2003-B



(Budgetary Positive


REVENUES

RevenuesTaxes 1,927$ 1,927$ 7,673$ 5,746$ Intergovernmental -- -- -- -- Charges for Services -- -- -- -- Interest -- -- 42 42

TOTAL REVENUES 1,927 1,927 7,715 5,788


ExpendituresCurrent General Government -- -- -- -- Debt Service Principal 1,365 1,365 1,365 -- Interest 562 562 562 --




EXCESS (DEFICIENCY) OF REVENUESOVER EXPENDITURES ANDOTHER FINANCING USES -- -- 5,788 5,788




Continued..

Budgeted Amounts

- 281 -

CITY OF LOS ANGELES








(Budgetary Positive


REVENUES


TOTAL REVENUES 29,743 32,961 27,599 (5,362)


ExpendituresCurrent General Government -- -- -- -- Debt Service Principal 18,025 18,025 18,025 -- Interest 11,718 14,936 14,936 --








Continued..


Budgeted Amounts

- 282 -

CITY OF LOS ANGELES









(Budgetary Positive


REVENUES

RevenuesTaxes 8,938$ 8,938$ 8,167$ (771)$ Intergovernmental -- -- -- -- Charges for Services -- -- -- -- Interest -- -- 112 112

TOTAL REVENUES 8,938 8,938 8,279 (659)






EXCESS (DEFICIENCY) OF REVENUESOVER EXPENDITURES ANDOTHER FINANCING USES -- -- (659) (659)




Continued..

Budgeted Amounts

- 283 -

CITY OF LOS ANGELES






Staples Arena Account



(Budgetary Positive


REVENUES

RevenuesTaxes --$ --$ --$ --$ Intergovernmental -- -- -- -- Charges for Services 4,000 4,000 4,641 641 Interest 90 90 11 (79)

TOTAL REVENUES 4,090 4,090 4,652 562


ExpendituresCurrent General Government 2,093 11,173 -- 11,173 Debt Service Principal 1,515 1,515 1,515 -- Interest 2,338 2,338 2,338 --




EXCESS (DEFICIENCY) OF REVENUESOVER EXPENDITURES ANDOTHER FINANCING USES (1,856) (10,936) 799 11,735

FUND BALANCES, JULY 1, RESTATED 1,856 1,856 796 (1,060)

Appropriation of Fund Balance andCarryforward Appropriations -- 9,080 -- (9,080)


Continued..

Convention Center -

Budgeted Amounts

- 284 -

CITY OF LOS ANGELES






General Obligation Bonds Series Refunding Series 1998-A



(Budgetary Positive


REVENUES


TOTAL REVENUES 15,345 15,345 13,921 (1,424)










Continued..

Other Nonmajor Debt Service Fund -

Budgeted Amounts

- 285 -

CITY OF LOS ANGELES






General Obligation Bonds Refunding Series 1999-A



(Budgetary Positive


REVENUES

RevenuesTaxes 6,279$ 6,279$ 211$ (6,068)$ Intergovernmental -- -- -- -- Charges for Services -- -- -- -- Interest -- -- 7 7

TOTAL REVENUES 6,279 6,279 218 (6,061)


ExpendituresCurrent General Government -- -- -- -- Debt Service Principal 5,435 5,435 5,435 -- Interest 844 844 482 362


Other Financing UsesTransfers to Other Funds -- -- 1,164 (1,164)

TOTAL EXPENDITURES AND OTHER FINANCING USES 6,279 6,279 7,081 (802)





Continued..


Budgeted Amounts

- 286 -

CITY OF LOS ANGELES









(Budgetary Positive


REVENUES

RevenuesTaxes 12,782$ 12,782$ 26$ (12,756)$ Intergovernmental -- -- -- -- Charges for Services -- -- -- -- Interest -- -- 13 13

TOTAL REVENUES 12,782 12,782 39 (12,743)





TOTAL EXPENDITURES AND OTHER FINANCING USES 12,782 12,782 13,447 (665)





Continued..

Budgeted Amounts


- 287 -

CITY OF LOS ANGELES









(Budgetary Positive


REVENUES

RevenuesTaxes 17,322$ 17,322$ 18,570$ 1,248$ Intergovernmental -- -- -- -- Charges for Services -- -- -- -- Interest -- -- 249 249

TOTAL REVENUES 17,322 17,322 18,819 1,497






EXCESS (DEFICIENCY) OF REVENUESOVER EXPENDITURES ANDOTHER FINANCING USES -- -- 1,497 1,497




Continued..


Budgeted Amounts

- 288 -

CITY OF LOS ANGELES









(Budgetary Positive


REVENUES


TOTAL REVENUES 10,588 11,649 9,826 (1,823)










Continued..

Budgeted Amounts


- 289 -

CITY OF LOS ANGELES









(Budgetary Positive


REVENUES


TOTAL REVENUES 3,502 3,502 3,302 (200)


ExpendituresCurrent General Government -- -- -- -- Debt Service Principal 105 105 105 -- Interest 3,397 3,397 3,397 --








Continued..

Budgeted Amounts


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CITY OF LOS ANGELES









(Budgetary Positive


REVENUES


TOTAL REVENUES 5,884 5,884 5,462 (422)










Continued..

Budgeted Amounts


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CITY OF LOS ANGELES






General Obligation Bonds Series 2009-A and B



(Budgetary Positive


REVENUES

RevenuesTaxes 15,572$ 15,572$ 13,729$ (1,843)$ Intergovernmental -- -- 516 516 Charges for Services -- -- -- -- Interest -- -- 207 207

TOTAL REVENUES 15,572 15,572 14,452 (1,120)










Continued..


Budgeted Amounts

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CITY OF LOS ANGELES






Total Annually Budgeted Nonmajor Debt Service Funds



(Budgetary Positive


REVENUES

RevenuesTaxes 167,396$ 171,675$ 131,762$ (39,913)$ Intergovernmental -- -- 516 516 Charges for Services 4,000 4,000 4,641 641 Interest 90 90 1,927 1,837

TOTAL REVENUES 171,486 175,765 138,846 (36,919)


ExpendituresCurrent General Government 2,093 11,173 -- 11,173 Debt Service Principal 112,900 112,900 112,900 -- Interest 58,349 62,628 55,575 7,053




EXCESS (DEFICIENCY) OF REVENUESOVER EXPENDITURES ANDOTHER FINANCING USES (1,856) (10,936) (32,716) (21,780)

FUND BALANCES, JULY 1, RESTATED 1,856 1,856 166,483 164,627

Appropriation of Fund Balance andCarryforward Appropriations -- 9,080 -- (9,080)


Budgeted Amounts

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CITY OF LOS ANGELES

Reconciliation of Operations on Budgetary Basis to the GAAP BasisNonmajor Debt Service Funds


Deficiency of Revenues Over Expendituresand Other Financing Uses - Budgetary (32,716)$

Basis Difference

Adjustments for net changes to accrued assets and liabilities. The GAAP basisoperating statement recognizes revenues as soon as they are both measurable and available, and expenditures generally are recorded whenliability is incurred; whereas, the budget basis operating statement reflectsrevenues when received and expenditures when paid. 1,828

Perspective Difference

Certain Nonmajor Debt Service Funds are not included in the legally adoptedbudget. 31,238

Net Change in Fund Balances- Nonmajor Debt Service Funds 350$

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CITY OF LOS ANGELES

CAPITAL PROJECTS FUNDS

Capital Projects Funds are used to account for capital improvements which are financed from the City’s and component units’ general obligation bond, certificates of participation issues, special assessments, certain Federal grants and other specific receipts. All of the City’s Capital Projects Funds are considered nonmajor funds. Nine funds are separately identified. These funds represent 90.6% of the combined revenues of the Capital Project Funds. The other smaller funds are grouped as other nonmajor capital project funds. General Obligation Bonds – Series 2003-A, Series 2004-A, Series 2005-A, Series 2006-A, Series 2008-A, Series 2009-A and Series 2011-A – These funds account for the proceeds from the sales of bonds authorized by the voters in November 1998, November 2000, March 2002, and November 2004 for the acquisition, improvement, and construction of certain police and fire safety facilities and equipment, animal shelter, zoo facilities, and stormwater infrastructure assets. Recreation and Parks Grant Fund – Accounts for grants received for major capital improvements undertaken by the City’s Department of Recreation and Parks. Parks Assessment Fund – Accounts for assessments levied pursuant to Proposition K– Los Angeles Kids program approved by City voters on November 5, 1996. The assessments from the City of Los Angeles Landscaping and Lighting District 96-1 will be used for the acquisition of land, construction of capital improvements and maintenance of facilities. The fund also accounts for the proceeds from the sale of special assessment bonds. Other Nonmajor Capital Projects Funds - Account for the activities of smaller Capital Project Funds and represent 9.4% of the combined revenues. Included in this group are two annually budgeted funds: Local Transportation and Park and Recreational Sites and Facilities.

Series 2003-A Series 2004-A Series 2005-A Series 2006-A Series 2008-A

ASSETSCash and Pooled Investments 44,140$ 84,324$ 31,265$ 56,531$ 29,203$ Accounts Receivable -- -- -- -- -- Special Assessments Receivable -- -- -- -- -- Investment Income Receivable 167 315 121 213 109Intergovernmental Receivable -- -- -- -- 436 Due from Other Funds 2 -- 12 -- --

TOTAL ASSETS 44,309$ 84,639$ 31,398$ 56,744$ 29,748$


LIABILITIESAccounts, Contracts and Retainage Payable 324$ 386$ 400$ 552$ 2,067$ Intergovernmental PayableDue to Other Funds 116 819 110 4 68Deferred Revenue and Other Credits 40 77 29 52 26Deposits and Advances -- -- -- -- -- Advances from Other Funds -- -- -- -- -- Other Liabilities 1,190 2,274 843 1,524 788

TOTAL LIABILITIES 1,670 3,556 1,382 2,132 2,949

FUND BALANCESRestricted for: Animal Shelter Facilities 9,245 -- -- 14,665 -- Cultural Activities -- -- -- -- -- Debt Service 40 -- -- 20 49 Library -- -- -- -- -- Police, Fire and 911 Facilities 33,354 81,083 28,914 38,896 -- Recreation and Parks -- -- -- -- -- Seismic Improvement -- -- -- -- -- Stormwater Cleanup Capital Projects -- -- 1,102 1,031 26,750 Transportation -- -- -- -- --

TOTAL FUND BALANCES 42,639 81,083 30,016 54,612 26,799

TOTAL LIABILITIES AND FUND BALANCES 44,309$ 84,639$ 31,398$ 56,744$ 29,748$

Continued...



CITY OF LOS ANGELES

Combining Balance SheetNonmajor Capital Projects Funds

June 30, 2012

- 296 -

OtherNonmajor

Recreation Capitaland Parks Projects

Series 2009-A Series 2011-A Parks Grant Assessment Funds Total

ASSETSCash and Pooled Investments 124,946$ 119,905$ 72,688$ 110,049$ 75,390$ 748,441$ Accounts Receivable 2,803 -- -- -- -- 2,803 Special Assessments Receivable -- -- -- 2,897 -- 2,897 Investment Income Receivable 481 455 270 433 265 2,829 Intergovernmental Receivable -- -- 88 -- -- 524 Due from Other Funds -- -- 272 -- 81 367

TOTAL ASSETS 128,230$ 120,360$ 73,318$ 113,379$ 75,736$ 757,861$


LIABILITIESAccounts, Contracts and Retainage Payable 3,204$ 98$ 1,043$ 1,729$ 1,005$ 10,808$ Intergovernmental Payable 8 -- 10 -- -- 18 Due to Other Funds 267 2,150 166 135 2,087 5,922 Deferred Revenue and Other Credits 113 111 425 1,395 64 2,332 Deposits and Advances -- -- -- 4 4 Advances from Other Funds -- -- 8,849 -- -- 8,849 Other Liabilities 3,369 3,233 1,960 2,967 1,802 19,950

TOTAL LIABILITIES 6,961 5,592 12,453 6,226 4,962 47,883

FUND BALANCESRestricted for: Animal Shelter Facilities -- -- -- -- 1,124 25,034 Cultural Activities -- -- -- -- 1,797 1,797 Debt Service -- -- -- -- 433 542 Library -- -- -- -- 2,502 2,502 Police, Fire and 911 Facilities -- -- -- -- 33,126 215,373 Recreation and Parks -- -- 60,865 107,153 22,921 190,939 Seismic Improvement -- -- -- -- 2,229 2,229 Stormwater Cleanup Capital Projects 121,269 114,768 -- -- -- 264,920 Transportation -- -- -- -- 6,642 6,642

TOTAL FUND BALANCES 121,269 114,768 60,865 107,153 70,774 709,978

TOTAL LIABILITIES AND FUND BALANCES 128,230$ 120,360$ 73,318$ 113,379$ 75,736$ 757,861$



CITY OF LOS ANGELES

Combining Balance Sheet - (Continued)Nonmajor Capital Projects Funds

June 30, 2012

- 297 -

Series 2003-A Series 2004-A Series 2005-A Series 2006-A Series 2008-A

REVENUESOther Taxes --$ --$ --$ --$ --$ Licenses and Permits -- -- -- -- -- Intergovernmental -- -- -- -- 459 Charges for Services -- -- -- -- 65 Special Assessments -- -- -- -- -- Investment Earnings 760 1,504 561 1,013 491 Other -- -- -- -- 17

TOTAL REVENUES 760 1,504 561 1,013 1,032

EXPENDITURESCapital Outlay 6,454 2,950 2,382 1,997 6,969


EXCESS (DEFICIENCY) OF REVENUES OVER EXPENDITURES (5,694) (1,446) (1,821) (984) (5,937)

OTHER FINANCING SOURCES (USES)Transfers In -- -- -- -- -- Transfers Out -- -- -- -- -- Issuance of Long-Term Debt -- -- -- -- --

TOTAL OTHER FINANCING SOURCES (USES) -- -- -- -- --

NET CHANGE IN FUND BALANCES (5,694) (1,446) (1,821) (984) (5,937)

FUND BALANCES, JULY 1 48,333 82,529 31,837 55,596 32,736

FUND BALANCES, JUNE 30 42,639$ 81,083$ 30,016$ 54,612$ 26,799$

Continued...



CITY OF LOS ANGELES

Combining Statement of Revenues, Expendituresand Changes in Fund Balances

Nonmajor Capital Projects Funds

- 298 -

OtherNonmajor

Recreation Capitaland Parks Projects

Series 2009-A Series 2011-A Parks Grant Assessment Funds Total

REVENUESOther Taxes --$ --$ --$ --$ 1,311$ 1,311$ Licenses and Permits -- -- -- -- 20 20 Intergovernmental 3,101 -- 6,350 -- 2,767 12,677 Charges for Services 21 -- 2,574 -- -- 2,660 Special Assessments -- -- -- 25,154 -- 25,154 Investment Earnings 2,096 3,526 1,355 1,966 1,114 14,386 Other -- -- 200 -- 100 317

TOTAL REVENUES 5,218 3,526 10,479 27,120 5,312 56,525

EXPENDITURESCapital Outlay 36,784 5,758 13,290 22,019 19,860 118,463

TOTAL EXPENDITURES 36,784 5,758 13,290 22,019 19,860 118,463

EXCESS (DEFICIENCY) OF REVENUES OVER EXPENDITURES (31,566) (2,232) (2,811) 5,101 (14,548) (61,938)

OTHER FINANCING SOURCES (USES)Transfers In -- -- 4,730 5 -- 4,735 Transfers Out -- -- -- (3,658) (135) (3,793) Issuance of Long-Term Debt -- 117,000 -- -- -- 117,000

TOTAL OTHER FINANCING SOURCES (USES) -- 117,000 4,730 (3,653) (135) 117,942

NET CHANGE IN FUND BALANCES (31,566) 114,768 1,919 1,448 (14,683) 56,004

FUND BALANCES, JULY 1, 152,835 -- 58,946 105,705 85,457 653,974

FUND BALANCES, JUNE 30 121,269$ 114,768$ 60,865$ 107,153$ 70,774$ 709,978$



CITY OF LOS ANGELES

Combining Statement of Revenues, Expendituresand Changes in Fund Balances - (Continued)

Nonmajor Capital Projects Funds

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CITY OF LOS ANGELES


Annually Budgeted Nonmajor Capital Projects FundsFor the Fiscal Year Ended June 30, 2012


Local TransportationActual Variance With



REVENUES

RevenuesTaxes --$ --$ --$ --$ Intergovernmental 2,767 2,767 2,767 -- Interest 82 82 89 7

TOTAL REVENUES 2,849 2,849 2,856 7


ExpendituresCapital Outlay 7,164 13,217 313 12,904

Other Financing UsesTransfers to Other Funds -- 949 705 244


EXCESS (DEFICIENCY) OF REVENUES AND OTHER FINANCING SOURCES OVER EXPENDITURES AND OTHER FINANCING USES (4,315) (11,317) 1,838 13,155

FUND BALANCES, JULY 1 4,315 4,315 4,363 48

Appropriation of Fund Balances and Carryforward Appropriations -- 7,002 -- (7,002)



Continued...

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CITY OF LOS ANGELES


Annually Budgeted Nonmajor Capital Projects Funds - (Continued)For the Fiscal Year Ended June 30, 2012


Park and Recreational Sites and FacilitiesActual Variance With



REVENUES

RevenuesTaxes 1,200$ 1,200$ 1,311$ 111$ Intergovernmental -- -- -- -- Interest -- -- -- --

TOTAL REVENUES 1,200 1,200 1,311 111



Other Financing UsesTransfers to Other Funds -- 559 105 454

TOTAL EXPENDITURES AND OTHER FINANCING USES 1,200 7,550 454 7,096

EXCESS (DEFICIENCY) OF REVENUES AND OTHER FINANCING SOURCES OVER EXPENDITURES AND OTHER FINANCING USES -- (6,350) 857 7,207

FUND BALANCES, JULY 1 -- -- 6,492 6,492

Appropriation of Fund Balances and Carryforward Appropriations -- 6,350 -- (6,350)



Continued...

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CITY OF LOS ANGELES


Annually Budgeted Nonmajor Capital Projects Funds - (Continued)For the Fiscal Year Ended June 30, 2012


Total Annually Budgeted Nonmajor Capital Projects FundsActual Variance With



REVENUES

RevenuesTaxes 1,200$ 1,200$ 1,311$ 111$ Intergovernmental 2,767 2,767 2,767 -- Interest 82 82 89 7

TOTAL REVENUES 4,049 4,049 4,167 118



Other Financing UsesTransfers to Other Funds -- 1,508 810 698


EXCESS (DEFICIENCY) OF REVENUES AND OTHER FINANCING SOURCES OVER EXPENDITURES AND OTHER FINANCING USES (4,315) (17,667) 2,695 20,362





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CITY OF LOS ANGELES

Reconciliation of Operations on Budgetary Basis to the GAAP BasisNonmajor Capital Projects Funds


Excess of Revenues and Other Financing Sources OverExpenditures and Other Financing Uses - Budgetary 2,695$

Basis DifferenceAdjustments for net changes to accrued assets and liabilities. The GAAP basis

operating statement recognizes revenues as soon as they are both measurable and available, and expenditures generally are recorded whenliability is incurred; whereas, the budget basis operating statement reflectsrevenues when received and expenditures when paid. (62)

Encumbrances, which represent commitments to acquire goods and services,are recorded as the equivalent of expenditures in the budget year incurred(budget), as opposed to a reservation of fund balance (GAAP). Encumbrances reported as budgetary expenditures 152 Prior year encumbrances expended in current year (600)

Perspective DifferenceCertain Nonmajor Capital Projects Funds are not included in the legally adopted

budget; while for some, the budget provides for only the portion of fund receiptsthat are expended for City department operations. 53,819

Net Change in Fund Balances- Nonmajor Capital Projects Funds 56,004$

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CITY OF LOS ANGELES


Budget and Actual (Non-GAAP Budgetary Basis) All Budgeted Capital Projects Funds


Additional Variance WithOriginal Appropriations, Final BudgetAdopted Carryforward Final Encumbrances Total PositiveBudget and Transfers Budget Expenditures June 30, 2012 Actual (Negative)

LOCAL TRANSPORTATIONCapital Outlay 7,164$ 6,053$ 13,217$ 200$ 113$ 313$ 12,904$ Transfers to Other Funds -- 949 949 705 -- 705 244

TOTAL 7,164 7,002 14,166 905 113 1,018 13,148

PARK AND RECREATION SITES AND FACILITIES

Capital Outlay 1,200 5,791 6,991 310 39 349 6,642 Transfers to Other Funds -- 559 559 105 -- 105 454

TOTAL 1,200 6,350 7,550 415 39 454 7,096

TOTAL BUDGETED CAPITALPROJECTS FUNDS 8,364$ 13,352$ 21,716$ 1,320$ 152$ 1,472$ 20,244$

ALL ANNUALLY BUDGETEDCAPITAL PROJECTS FUNDS

Capital Outlay 8,364$ 11,844$ 20,208$ 510$ 152$ 662$ 19,546$ Transfers to Other Funds -- 1,508 1,508 810 -- 810 698

TOTAL 8,364$ 13,352$ 21,716$ 1,320$ 152$ 1,472$ 20,244$

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CITY OF LOS ANGELES

FIDUCIARY FUNDS

Fiduciary Funds are used to report assets held by the City in a trustee or agency capacity for others and therefore cannot be used to support the City government’s programs. These include Pension Trust Funds, Other Employee Benefits Trust Funds, and Agency Funds. Pension Trust Funds – These funds are used to report resources that are held in trust for the members and beneficiaries of the City’s defined benefit and pension plans namely: Fire and Police Pension Plan, Los Angeles City Employees’ Retirement Plan, and Water and Power Employees’ Retirement, Disability and Death Benefit Insurance Plan. Other Employee Benefits Trust Funds – These funds are used to report resources that are held in trust for the members of the City’s postemployment healthcare plans namely: Fire and Police Health Subsidy Plan, Los Angeles City Employees’ Postemployment Healthcare Plan, and Water and Power Employees’ Retiree Health Benefits Plan. Agency Funds – These funds are used to account for assets held by the City as an agent for others, for example, federal and state income tax withheld from employees, and assessments for payments of certain conduit debt.

OtherEmployee

Pension BenefitsTrust TrustFunds Funds Total

ASSETSCash and Pooled Investments 21,073$ 1,383$ 22,456$ Prepaid Expense 3 - 3 Receivables:

Contributions 51,801 13 51,814Accrued Investment Income 97,574 11,722 109,296Contingent Disability Benefit Advance 3,310 -- 3,310Other Receivables 10,127 1,073 11,200Due from Brokers 312,529 46,465 358,994Prepaid Health Subsidy -- 7,363 7,363

Other Investments: Temporary 1,133,778 156,679 1,290,457U. S. Government Agencies Securities 3,489,874 439,083 3,928,957Medium Term Notes 182 36 218Domestic Corporate Bonds 2,842,399 346,055 3,188,454International Bonds 283,621 43,710 327,331Bank Loan 3,617 596 4,213Opportunistic Debt 67,770 11,155 78,925Domestic Stocks 11,773,300 1,465,583 13,238,883 International Stocks 4,813,033 577,617 5,390,650 Mortgage-backed Securities 743,263 126,935 870,198 Derivative Instruments 365 59 424 Real Estate 1,909,898 181,493 2,091,391 Venture Capital and Alternative Investments 3,196,244 352,465 3,548,709 Security Lending Collateral 2,423,022 272,837 2,695,859

Capital Assets Furniture, Fixtures and Equipment (Net of Accumulated Depreciation of $825) 184 30 214

TOTAL ASSETS 33,176,967 4,042,352 37,219,319

LIABILITIESAccounts Payable and Accrued Expenses 53,931 8,206 62,137Benefits in Process of Payment 19,738 326 20,064 Due to Brokers 584,350 99,765 684,115 Obligations Under Securities Lending Transactions 2,423,022 272,837 2,695,859 Mortgage Loan Payable - Current 487 33 520 Mortgage Loan Payable - Noncurrent 193,669 13,301 206,970

TOTAL LIABILITIES 3,275,197 394,468 3,669,665

NET ASSETSHeld in Trust for Pension and Other Employee Benefits

Benefit Pension Plans 29,829,379 -- 29,829,379Disability Plan 47,634 -- 47,634Death Benefit Plan 24,757 -- 24,757Postemployment Healthcare Plans -- 3,647,884 3,647,884

TOTAL NET ASSETS 29,901,770$ 3,647,884$ 33,549,654$


CITY OF LOS ANGELES

Combining Statement of Fiduciary Net AssetsPension and Other Employee Benefits Trust Funds

- 306 -

OtherEmployee

Pension BenefitsTrust TrustFunds Funds Total

ADDITIONSContributions

Employer 977,931$ 340,507$ 1,318,438$ Plan Member 359,209 -- 359,209Other 1,877 122 1,999

Total Contributions 1,339,017 340,629 1,679,646

Investment IncomeNet Depreciation in Fair Value of Investments (378,973) (45,204) (424,177)Interest Income 322,221 55,310 377,531Dividend Income 322,464 25,124 347,588Securities Lending Income 13,955 1,696 15,651Other Investment Income 39,609 4,902 44,511Real Estate Operating Income, Net 80,473 6,056 86,529

Investment Income 399,749 47,884 447,633

Investment Expense (86,567) (9,283) (95,850)Securities Lending Expense (1,850) (256) (2,106)

Net Investment Income 311,332 38,345 349,677

TOTAL ADDITIONS 1,650,349 378,974 2,029,323

DEDUCTIONSBenefit Payments 1,929,871 249,195 2,179,066Refunds of Member Contributions 17,965 -- 17,965Administrative Expenses 31,989 4,230 36,219

TOTAL DEDUCTIONS 1,979,825 253,425 2,233,250

CHANGE IN NET ASSETSBenefit Pension Plans (332,365) -- (332,365)Disability Plan 575 -- 575Death Benefit Plan 2,314 -- 2,314Postemployment Healthcare Plans -- 125,549 125,549

TOTAL CHANGE IN NET ASSETS (329,476) 125,549 (203,927)


Benefit Pension Plans 30,161,744 -- 30,161,744Disability Plan 47,060 -- 47,060Death Benefit Plan 22,442 -- 22,442Postemployment Healthcare Plans -- 3,522,335 3,522,335

NET ASSETS HELD IN TRUST FOR PENSION AND OTHER EMPLOYEE BENEFITS, JUNE 30 29,901,770$ 3,647,884$ 33,549,654$


CITY OF LOS ANGELES

Combining Statement of Changes in Fiduciary Net AssetsPension and Other Employee Benefits Trust Funds


- 307 -

CITY OF LOS ANGELES


Water and PowerEmployees'

Los Angeles Retirement,City Employees' Disability, and

Fire and Police Retirement Death BenefitPension Plan Plan Insurance Plan Total

ASSETSCash and Pooled Investments 5,648$ 469$ 14,956$ 21,073$ Prepaid Expense -- -- 3 3 Receivables:

Contributions 5,144 -- 46,657 51,801 Accrued Investment Income 45,452 30,041 22,081 97,574 Contingent Disability Benefit Advance -- -- 3,310 3,310 Other Receivables -- 6,518 3,609 10,127 Due from Brokers 118,823 49,089 144,617 312,529

Other Investments:Temporary 492,173 336,894 304,711 1,133,778 U. S. Government Agencies Securities 1,682,432 638,683 1,168,759 3,489,874 Medium Term Notes -- -- 182 182 Domestic Corporate Bonds 1,374,946 861,942 605,511 2,842,399 International Bonds 17,406 258,297 7,918 283,621 Bank Loan -- 3,617 -- 3,617 Opportunistic Debt -- 67,770 -- 67,770 Domestic Stocks 5,003,235 3,493,969 3,276,096 11,773,300 International Stocks 2,137,109 1,537,725 1,138,199 4,813,033 Mortgage-backed Securities -- 476,192 267,071 743,263 Derivative Instruments -- 365 -- 365 Real Estate 1,158,265 551,643 199,990 1,909,898 Venture Capital and Alternative Investments 1,691,151 1,024,014 481,079 3,196,244 Security Lending Collateral 1,202,971 730,023 490,028 2,423,022

Capital AssetsFurniture, Fixtures and Equipment (Net of Accumulated Depreciation of $708) -- 184 -- 184

TOTAL ASSETS 14,934,755 10,067,435 8,174,777 33,176,967

LIABILITIESAccounts Payable and Accrued Expenses 7,571 34,260 12,100 53,931 Benefits in Process of Payment 17,261 -- 2,477 19,738 Due to Brokers 165,722 204,991 213,637 584,350 Obligations Under Securities Lending Transactions 1,202,971 730,023 490,028 2,423,022 Mortgage Loan Payable - Current 487 -- -- 487 Mortgage Loan Payable - Noncurrent 193,669 -- -- 193,669

TOTAL LIABILITIES 1,587,681 969,274 718,242 3,275,197

NET ASSETSHeld in Trust for Pension and Other Employee Benefits

Benefit Pension Plans 13,347,074 9,098,161 7,384,144 29,829,379 Disability Plan -- -- 47,634 47,634 Death Benefit Plan -- -- 24,757 24,757

TOTAL NET ASSETS 13,347,074$ 9,098,161$ 7,456,535$ 29,901,770$

Combining Statement of Fiduciary Net AssetsPension Trust Funds

- 308 -

CITY OF LOS ANGELES

Combining Statement of Changes in Fiduciary Net AssetsPension Trust Funds


Water and PowerEmployees'

Los Angeles Retirement,City Employees' Disability, and

Fire and Police Retirement Death BenefitPension Plan Plan Insurance Plan Total

ADDITIONSContributions

Employer 321,593$ 308,712$ 347,626$ 977,931$ Plan Member 120,099 178,246 60,864 359,209 Other 1,877 -- -- 1,877

Total Contributions 443,569 486,958 408,490 1,339,017

Investment IncomeNet Depreciation in Fair Value of Investments (91,411) (123,474) (164,088) (378,973) Interest Income 113,081 95,156 113,984 322,221 Dividend Income 169,456 80,469 72,539 322,464 Securities Lending Income 5,951 4,605 3,399 13,955 Other Investment Income 18,026 20,949 634 39,609 Real Estate Operating Income, Net 59,570 13,059 7,844 80,473

Investment Income 274,673 90,764 34,312 399,749

Investment Expense (48,622) (17,378) (20,567) (86,567) Securities Lending Expense (594) (681) (575) (1,850)

Net Investment Income 225,457 72,705 13,170 311,332

TOTAL ADDITIONS 669,026 559,663 421,660 1,650,349

DEDUCTIONSBenefit Payments 831,191 664,626 434,054 1,929,871 Refunds of Member Contributions 1,338 11,100 5,527 17,965 Administrative Expenses 13,611 12,995 5,383 31,989

TOTAL DEDUCTIONS 846,140 688,721 444,964 1,979,825

CHANGE IN NET ASSETSBenefit Pension Plans (177,114) (129,058) (26,193) (332,365) Disability Plan -- -- 575 575 Death Benefit Plan -- -- 2,314 2,314

TOTAL CHANGE IN NET ASSETS (177,114) (129,058) (23,304) (329,476)


Benefit Pension Plans 13,524,188 9,227,219 7,410,337 30,161,744 Disability Plan -- -- 47,060 47,060 Death Benefit Plan -- -- 22,442 22,442

NET ASSETS HELD IN TRUST FOR PENSION AND OTHER BENEFITS, JUNE 30 13,347,074$ 9,098,161$ 7,456,535$ 29,901,770$

- 309 -

CITY OF LOS ANGELES

Combining Statement of Fiduciary Net Assets

Other Employee Benefits Trust Funds June 30, 2012


Los Angeles Water and PowerCity Employees' Employees'

Fire and Police Postemployment Retiree HealthHealth Subsidy Healthcare Benefits

Plan Plan Plan Total

ASSETSCash and Pooled Investments 388$ 77$ 918$ 1,383$ Receivables:

Contributions -- -- 13 13 Accrued Investment Income 3,121 4,945 3,656 11,722 Other Receivables -- 1,073 -- 1,073 Due from Brokers 8,161 8,080 30,224 46,465 Prepaid Health Subsidy 7,363 -- -- 7,363

Other Investments:Temporary 33,802 55,452 67,425 156,679 U. S. Government Agencies Securities 115,547 105,125 218,411 439,083 Medium Term Notes -- -- 36 36 Domestic Corporate Bonds 94,429 141,874 109,752 346,055 International Bonds 1,195 42,515 -- 43,710 Bank Loan -- 596 -- 596 Opportunistic Debt -- 11,155 -- 11,155 Domestic Stocks 343,615 575,100 546,868 1,465,583 International Stocks 146,773 253,107 177,737 577,617 Mortgage-backed Securities -- 78,381 48,554 126,935 Derivative Instruments -- 59 -- 59 Real Estate 79,548 90,799 11,146 181,493 Venture Capital and Alternative Investments 116,146 168,551 67,768 352,465 Security Lending Collateral 82,618 120,160 70,059 272,837

Capital AssetsFurniture, Fixtures and Equipment (Net of Accumulated Depreciation of $117) -- 30 -- 30

TOTAL ASSETS 1,032,706 1,657,079 1,352,567 4,042,352

LIABILITIESAccounts Payable and Accrued Expenses 482 5,639 2,085 8,206 Benefits in Process of Payment 326 -- -- 326 Due to Brokers 11,382 33,740 54,643 99,765 Obligations Under Securities Lending Transactions 82,618 120,160 70,059 272,837 Mortgage Loan Payable - Current 33 -- -- 33 Mortgage Loan Payable - Noncurrent 13,301 -- -- 13,301

TOTAL LIABILITIES 108,142 159,539 126,787 394,468

NET ASSETSHeld in Trust for Postemployment Healthcare Benefits 924,564$ 1,497,540$ 1,225,780$ 3,647,884$

- 310 -

CITY OF LOS ANGELES

Combining Statement of Changes in Fiduciary Net Assets


Los Angeles Water and PowerCity Employees' Employees'

Fire and Police Postemployment Retiree HealthHealth Subsidy Healthcare Benefits

Plan Plan Plan TotalADDITIONS

ContributionsEmployer 122,972$ 115,209$ 102,326$ 340,507$ Other 122 -- -- 122

Total Contributions 123,094 115,209 102,326 340,629

Investment IncomeNet Depreciation in Fair Value of Investments (5,956) (23,414) (15,834) (45,204) Interest Income 7,368 16,653 31,289 55,310 Dividend Income 11,041 14,083 -- 25,124 Securities Lending Income 388 806 502 1,696 Other Investment Income 1,175 3,436 291 4,902 Real Estate Operating Income, Net 3,881 2,175 -- 6,056

Investment Income 17,897 13,739 16,248 47,884

Investment Expense (3,168) (3,295) (2,820) (9,283) Securities Lending Expense (39) (130) (87) (256)

Net Investment Income 14,690 10,314 13,341 38,345

TOTAL ADDITIONS 137,784 125,523 115,667 378,974

DEDUCTIONSBenefit Payments 93,537 91,437 64,221 249,195 Administrative Expenses 887 2,931 412 4,230

TOTAL DEDUCTIONS 94,424 94,368 64,633 253,425

CHANGE IN NET ASSETS 43,360 31,155 51,034 125,549

Net Assets Held in Trust for Postemployment Healthcare Benefits, July 1 881,204 1,466,385 1,174,746 3,522,335

NET ASSETS HELD IN TRUST FOR POSTEMPLOYMENT HEALTHCARE BENEFITS, JUNE 30 924,564$ 1,497,540$ 1,225,780$ 3,647,884$


Other Employee Benefits Trust Funds

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CITY OF LOS ANGELES

Combining Statement of Fiduciary Assets and LiabilitiesAgency FundsJune 30, 2012


InternalRevenue

CodeSection501 (c) Other

Building Employee Public Agencyand Safety Benefits Works Funds Total

ASSETSCash and Pooled Investments 15,847$ 22,311$ 41,390$ 159,599$ 239,147$ Other Investments -- -- -- 275 275 Special Assessments Receivable -- -- -- 1,084 1,084 Investment Income Receivable -- 240 -- 71 311 Advances to Other Funds -- -- 31,163 -- 31,163

TOTAL ASSETS 15,847$ 22,551$ 72,553$ 161,029$ 271,980$

LIABILITIESFiduciary Liabilities --$ 22,551$ --$ 140,066$ 162,617$ Deposits and Advances 15,847 -- 72,553 20,963 109,363

TOTAL LIABILITIES 15,847$ 22,551$ 72,553$ 161,029$ 271,980$

- 312 -

CITY OF LOS ANGELES

Combining Statement of Changes in Fiduciary Assets and LiabilitiesAgency Funds


Balance BalanceJuly 1, June 30,2011 Additions Deductions 2012

BUILDING AND SAFETY

ASSETS

Cash and Pooled Investments 18,868$ 47,261$ 50,282$ 15,847$

LIABILITIES

Deposits and Advances 18,868$ 47,261$ 50,282$ 15,847$

INTERNAL REVENUE CODE SECTION 501(c)

EMPLOYEE BENEFITS

ASSETSCash and Pooled Investments 34,203$ 73,652$ 85,544$ 22,311$ Investment Income Receivable 109 131 -- 240

TOTAL ASSETS 34,312$ 73,783$ 85,544$ 22,551$

LIABILITIESFiduciary Liabilities 34,312$ 73,783$ 85,544$ 22,551$

PUBLIC WORKS

ASSETSCash and Pooled Investments 41,265$ 17,987$ 17,862$ 41,390$ Advances to Other Funds 31,608 -- 445 31,163

TOTAL ASSETS 72,873$ 17,987$ 18,307$ 72,553$

LIABILITIES

Deposits and Advances 72,873$ 17,987$ 18,307$ 72,553$

OTHER AGENCY FUNDS

ASSETSCash and Pooled Investments 185,279$ 13,732,752$ 13,758,432$ 159,599$ Other Investments 918 -- 643 275 Special Assessments Receivable 2,188 1,083 2,187 1,084 Investment Income Receivable 35 36 -- 71

TOTAL ASSETS 188,420$ 13,733,871$ 13,761,262$ 161,029$

LIABILITIESFiduciary Liabilities 166,528$ 13,731,938$ 13,758,400$ 140,066$ Deposits and Advances 21,892 1,933 2,862 20,963

TOTAL LIABILITIES 188,420$ 13,733,871$ 13,761,262$ 161,029$

Continued…

- 313 -

CITY OF LOS ANGELES

Combining Statement of Changes in Fiduciary Assets and LiabilitiesAgency Funds - (Continued)


Balance BalanceJuly 1, June 30,2011 Additions Deductions 2012

TOTAL AGENCY FUNDS

ASSETSCash and Pooled Investments 279,615$ 13,871,652$ 13,912,120$ 239,147$ Other Investments 918 -- 643 275 Special Assessments Receivable 2,188 1,083 2,187 1,084 Investment Income Receivable 144 167 -- 311 Advances to Other Funds 31,608 -- 445 31,163

TOTAL ASSETS 314,473$ 13,872,902$ 13,915,395$ 271,980$

LIABILITIESFiduciary Liabilities 200,840$ 13,805,721$ 13,843,944$ 162,617$ Deposits and Advances 113,633 67,181 71,451 109,363

TOTAL LIABILITIES 314,473$ 13,872,902$ 13,915,395$ 271,980$

- 314 -



- 315 -

2003 2004 2005 2006 2007

Governmental ActivitiesInvested in Capital Assets, Net of Related Debt 730,518$ 1,111,107$ 1,562,198$ 2,946,666$ 3,189,365$ Restricted for:

Capital Projects 178,644 152,433 94,725 104,715 123,082 Debt Service 155,079 176,584 195,334 231,421 237,597 Special Purposes 1,213,893 1,229,977 1,270,095 1,419,754 1,582,551

Unrestricted (Deficit) (663,132) (1,061,469) (1,192,219) (1,019,029) (1,223,123)

Subtotal Governmental Activities Net Assets 1,615,002 1,608,632 1,930,133 3,683,527 3,909,472

Business-type ActivitiesInvested in Capital Assets, Net of Related Debt 7,996,013 8,317,620 8,405,535 8,777,029 8,974,991 Restricted for:

Capital Projects 182,333 135,418 449,970 163,951 178,955 Debt Service 1,107,830 952,828 917,973 875,761 837,414 Special Purposes 643,609 815,979 915,466 1,102,949 1,375,876

Unrestricted 1,764,334 2,153,319 1,936,039 2,103,362 2,311,450

Subtotal Business-type Activities Net Assets 11,694,119 12,375,164 12,624,983 13,023,052 13,678,686

Primary GovernmentInvested in Capital Assets, Net of Related Debt 8,726,531 9,428,727 9,967,733 11,723,695 12,164,356 Restricted for:

Capital Projects 360,977 287,851 544,695 268,666 302,037 Debt Service 1,262,909 1,129,412 1,113,307 1,107,182 1,075,011 Special Purposes 1,857,502 2,045,956 2,185,561 2,522,703 2,958,427

Unrestricted 1,101,202 1,091,850 743,820 1,084,333 1,088,327

Total Primary Government Net Assets 13,309,121$ 13,983,796$ 14,555,116$ 16,706,579$ 17,588,158$ Continued…

Fiscal Year

CITY OF LOS ANGELES

Net Assets by CategoryAccrual Basis of Accounting

Last Ten Fiscal Years(amounts expressed in thousands)

- 316 -

Primary Government- Net Assets by Category

Invested in Capital Assets, Net of Related

Debt66%

Restricted for Capital Projects

3%

Restricted for Debt Service

9%

Restricted for Special

Purposes14%

Unrestricted8%

Restricted26%

2003

Invested in Capital

Assets, Net of Related Debt

67%


2%


8%


Purposes15%

Unrestricted8%

Restricted25%

2004


Debt70%


2%


7%


Purposes15%

Unrestricted6%

Restricted24%

2006


Debt69%


2%


6%


Purposes17%

Unrestricted6%

Restricted25%

2007

Invested in Capital


68%


4%Restricted for Debt Service

8%


Purposes15%

Unrestricted5%

Restricted27%

2005

- 316 -

2008 2009 2010 2011 2012

Governmental ActivitiesInvested in Capital Assets, Net of Related Debt 3,415,049$ 3,633,548$ 3,798,442$ 4,140,258$ 4,416,934$ Restricted for:

Capital Projects 132,583 138,237 158,878 61,090 74,721 Debt Service 209,072 216,751 228,515 215,496 157,402 Special Purposes 1,736,490 1,639,594 1,679,989 1,753,510 1,853,933

Unrestricted (Deficit) (1,455,537) (1,707,447) (1,564,473) (1,794,315) (1,782,463)

Subtotal Governmental Activities Net Assets 4,037,657 3,920,683 4,301,351 4,376,039 4,720,527

Business-type ActivitiesInvested in Capital Assets, Net of Related Debt 9,372,493 9,148,381 9,135,266 9,186,620 9,855,473 Restricted for:

Capital Projects 115,428 274,711 238,467 237,019 168,924 Debt Service 758,318 1,044,956 1,214,521 1,262,623 1,223,993 Special Purposes 1,606,749 1,750,093 2,026,244 2,086,775 2,232,788

Unrestricted 2,527,916 2,657,431 3,038,407 3,336,976 3,214,165

Subtotal Business-type Activities Net Assets 14,380,904 14,875,572 15,652,905 16,110,013 16,695,343

Primary GovernmentInvested in Capital Assets, Net of Related Debt 12,787,542 12,781,929 12,933,708 13,326,878 14,272,407 Restricted for:

Capital Projects 248,011 412,948 397,345 298,109 243,645 Debt Service 967,390 1,261,707 1,443,036 1,478,119 1,381,395 Special Purposes 3,343,239 3,389,687 3,706,233 3,840,285 4,086,721

Unrestricted 1,072,379 949,984 1,473,934 1,542,661 1,431,702

Total Primary Government Net Assets 18,418,561$ 18,796,255$ 19,954,256$ 20,486,052$ 21,415,870$

Fiscal Year

Net Assets by CategoryAccrual Basis of Accounting (Continued)


CITY OF LOS ANGELES

- 317 -

Primary Government- Net Assets by Category

Invested in Capital


69%



5%


Purposes18%

Unrestricted6%

Restricted25%

2008


Debt65%


2%


7%


Purposes19%

Unrestricted7%

Restricted28%

2010

Invested in Capital


68%



7%


Purposes18%

Unrestricted5%

Restricted27%

2009


Debt64%


1%


7%


Purposes19%

Unrestricted8%

Restricted28%

2011


Debt67%


1%


6%


Purposes19%

Unrestricted7%

Restricted26%

2012

- 317 -

CITY OF LOS ANGELES

Changes in Net AssetsAccrual Basis of Accounting


2003 2004 2005 2006 2007

ExpensesGovernmental Activities

General Government 1,055,535$ 1,362,157$ 1,220,826$ 921,672$ 1,429,922$ Protection of Persons and Property 1,761,748 1,965,205 2,156,914 2,117,147 2,414,058 Public Works 320,230 224,080 337,627 374,293 300,817 Health and Sanitation 293,573 334,229 298,777 357,574 402,730 Transportation 294,116 253,560 202,952 286,741 367,198 Cultural and Recreational Services 320,123 338,860 413,344 336,264 382,523 Community Development 336,611 404,800 318,119 297,308 308,700 Interest on Long-term Debt 142,946 142,758 181,113 173,930 195,925

Subtotal Governmental Activities Expenses 4,524,882 5,025,649 5,129,672 4,864,929 5,801,873

Business-type ActivitiesAirports 508,649 564,131 599,483 657,358 684,853 Harbor 291,451 272,273 284,567 340,656 326,368 Power 2,068,098 2,178,837 2,233,084 2,458,667 2,462,202 Water 553,916 575,941 525,152 543,574 605,181 Sewer 477,630 444,973 480,392 497,699 513,377 Other- Convention Center 35,823 36,031 34,371 34,939 35,741

Subtotal Business-type Activities Expenses 3,935,567 4,072,186 4,157,049 4,532,893 4,627,722

Total Primary Government Expenses 8,460,449 9,097,835 9,286,721 9,397,822 10,429,595

Program RevenuesGovernmental Activities

Charges for ServicesGeneral Government 269,016 244,329 254,101 250,111 256,524

Fiscal Year

- 318 -

General Government 269,016 244,329 254,101 250,111 256,524 Protection of Persons and Property 263,394 226,009 281,451 260,457 323,736 Public Works 124,291 146,771 144,037 138,345 160,213 Health and Sanitation 190,243 211,981 242,681 250,527 285,705 Transportation 66,639 71,028 65,729 76,785 79,961 Cultural and Recreational Services 90,695 93,965 98,808 133,073 130,399 Community Development 46,257 74,237 64,435 71,884 86,800

Operating Grants and Contributions 744,819 677,536 710,146 644,539 820,809 Capital Grants and Contributions 91,041 56,657 81,402 65,850 94,607

Subtotal Governmental Activities Program Revenues 1,886,395 1,802,513 1,942,790 1,891,571 2,238,754

Business-type ActivitiesCharges for Services

Airports 627,967 679,063 736,535 767,660 846,309 Harbor 359,103 354,754 379,637 433,223 458,785 Power 2,295,357 2,401,011 2,378,108 2,636,517 2,773,547 Water 571,893 601,504 579,134 614,620 698,773 Sewer 425,951 430,263 437,996 492,403 521,393 Other- Convention Center 22,224 19,885 20,409 24,261 26,449

Operating Grants and Contributions 20,422 18,931 11,971 17,281 11,776 Capital Grants and Contributions 87,656 92,640 53,276 130,885 150,991

Subtotal Business-type Activities Program Revenues 4,410,573 4,598,051 4,597,066 5,116,850 5,488,023

Total Primary Government Program Revenues 6,296,968 6,400,564 6,539,856 7,008,421 7,726,777 Continued…

- 318 -

CITY OF LOS ANGELES

Changes in Net AssetsAccrual Basis of Accounting - (Continued)


2008 2009 2010 2011 2012

ExpensesGovernmental Activities

General Government 1,570,377$ 1,507,318$ 1,279,697$ 1,462,581$ 1,335,180$ Protection of Persons and Property 2,741,492 2,552,413 2,618,138 2,641,343 2,707,892Public Works 261,917 451,141 392,874 342,722 413,348Health and Sanitation 381,406 416,247 382,127 393,827 416,894Transportation 392,748 406,464 368,000 338,755 365,841Cultural and Recreational Services 446,051 413,119 415,344 446,805 445,815Community Development 405,859 373,244 349,203 429,695 437,229Interest on Long-term Debt 217,073 189,966 186,711 190,424 194,513

Subtotal Governmental Activities Expenses 6,416,923 6,309,912 5,992,094 6,246,152 6,316,712

Business-type ActivitiesAirports 755,983 782,036 765,513 834,071 897,380Harbor 342,148 382,168 336,104 310,534 333,355Power 2,658,634 2,544,032 2,843,642 2,964,399 2,870,609Water 704,529 762,802 787,836 791,049 799,575Sewer 554,447 553,251 552,006 557,269 553,047Other- Convention Center 38,753 38,718 32,842 40,400 39,107

Subtotal Business-type Activities Expenses 5,054,494 5,063,007 5,317,943 5,497,722 5,493,073

Total Primary Government Expenses 11,471,417 11,372,919 11,310,037 11,743,874 11,809,785

Program RevenuesGovernmental Activities

Charges for ServicesGeneral Government 260,540 278,800 204,372 241,681 246,357

Fiscal Year

- 319 -

General Government 260,540 278,800 204,372 241,681 246,357Protection of Persons and Property 357,038 281,388 333,778 317,283 326,396Public Works 173,774 166,387 170,997 162,551 166,061Health and Sanitation 379,300 445,108 454,586 467,614 493,422Transportation 90,588 94,832 92,390 99,797 125,392Cultural and Recreational Services 116,853 119,180 108,822 128,170 152,434Community Development 91,347 74,988 73,344 63,903 112,897

Operating Grants and Contributions 979,238 854,128 900,569 924,031 1,023,001Capital Grants and Contributions 100,994 79,981 86,275 75,744 96,156

Subtotal Governmental Activities Program Revenues 2,549,672 2,394,792 2,425,133 2,480,774 2,742,116

Business-type ActivitiesCharges for Services

Airports 983,787 960,461 968,022 1,052,790 1,114,431Harbor 467,161 424,036 424,321 406,606 435,291Power 2,962,693 2,899,485 3,372,648 3,252,872 3,212,141Water 777,110 798,664 831,039 783,056 849,122Sewer 543,417 547,666 545,874 517,212 532,026Other- Convention Center 26,162 26,798 22,501 26,535 27,355

Operating Grants and Contributions 10,490 -- -- -- -- Capital Grants and Contributions 201,299 153,142 151,346 174,574 158,114

Subtotal Business-type Activities Program Revenues 5,972,119 5,810,252 6,315,751 6,213,645 6,328,480

Total Primary Government Program Revenues 8,521,791 8,205,044 8,740,884 8,694,419 9,070,596Continued…

- 319 -

CITY OF LOS ANGELES



2003 2004 2005 (a)2006 2007

Net (Expense)/RevenueGovernmental Activities (2,638,487)$ (3,223,136)$ (3,186,882)$ (2,973,358)$ (3,563,119)$ Business-type Activities 475,006 525,865 440,017 583,957 860,301

Total Primary Government Net Expense (2,163,481) (2,697,271) (2,746,865) (2,389,401) (2,702,818)

General Revenues and Other Changes in Net AssetsGovernmental Activities

TaxesProperty Taxes 787,048 884,665 1,236,559 1,377,063 1,501,605 Utility Users Taxes 521,148 572,018 578,542 606,617 606,624 Business Taxes 356,937 372,376 396,316 436,621 465,353 Other Taxes 335,779 417,714 447,397 521,451 512,410

Unrestricted Grants and ContributionsSales Taxes 367,112 381,090 303,954 329,169 333,386 Motor Vehicle In-lieu Taxes 219,694 176,853 90,944 24,120 24,568 Other Grants and Contributions 3,849 -- 16,059 14,297 33,525

Unrestricted Investment Earnings 49,173 667 29,828 21,555 72,559 Other General Revenues 33,435 34,790 30,687 38,795 34,367 Transfers 211,936 238,237 190,198 185,888 204,667

Special ItemsGain (Loss) on Loan Settlement -- -- -- -- -- Transfer of Properties -- -- -- -- --

Subtotal Governmental Activities 2,886,111 3,078,410 3,320,484 3,555,576 3,789,064

Business-type ActivitiesTransfers (211,936) (238,237) (190,198) (185,888) (204,667)

Fiscal Year

- 320 -

Transfers (211,936) (238,237) (190,198) (185,888) (204,667)

Total Primary Government General Revenues andOther Changes in Net Assets 2,674,175 2,840,173 3,130,286 3,369,688 3,584,397

Changes in Net AssetsGovernmental Activities 247,624 (144,726) 133,602 582,218 225,945Business-type Activities 263,070 287,628 249,819 398,069 655,634

Total Primary Government Changes in Net Assets 510,694$ 142,902$ 383,421$ 980,287$ 881,579$

Continued…

Changes in Net Assets

($200,000)

$200,000

$600,000

$1,000,000

$1,400,000

2003 2004 2005 2006 2007

Governmental Activities Business-type Activities

- 320 -

2008 2009 2010 2011 2012

Net (Expense)/RevenueGovernmental Activities (3,867,251)$ (3,915,120)$ (3,566,961)$ (3,765,378)$ (3,574,596)$ Business-type Activities 917,625 747,245 997,808 715,923 835,407

Total Primary Government Net Expense (2,949,626) (3,167,875) (2,569,153) (3,049,455) (2,739,189)

General Revenues and Other Changes in Net AssetsGovernmental Activities

TaxesProperty Taxes 1,602,386 1,714,892 1,641,155 1,618,444 1,662,316 Utility Users Taxes 631,716 646,165 658,110 628,028 623,721 Business Taxes 534,272 450,848 510,269 410,888 440,327 Other Taxes 497,455 399,851 457,473 392,405 458,741

Unrestricted Grants and ContributionsSales Taxes 337,313 300,585 314,354 337,727 324,859 Motor Vehicle In-lieu Taxes -- 13,764 11,496 7,631 2,026 Other Grants and Contributions 32,064 19,703 44,552 45,073 43,403

Unrestricted Investment Earnings 80,538 46,772 27,372 18,814 21,879 Other General Revenues 64,285 60,879 54,005 75,838 91,735 Transfers 215,407 159,150 220,475 258,815 250,077

Special ItemsGain (Loss) on Loan Settlement -- -- -- (47,007) -- Transfer of Properties -- -- -- 93,410 --

Subtotal Governmental Activities 3,995,436 3,812,609 3,939,261 3,840,066 3,919,084

Business-type ActivitiesTransfers (215,407) (159,150) (220,475) (258,815) (250,077)

Fiscal Year


CITY OF LOS ANGELES


Last Ten Fiscal Years

- 321 -

Transfers (215,407) (159,150) (220,475) (258,815) (250,077)

Total Primary Government General Revenues andOther Changes in Net Assets 3,780,029 3,653,459 3,718,786 3,581,251 3,669,007

Changes in Net AssetsGovernmental Activities 128,185 (102,511) 372,300 74,688 344,488 Business-type Activities 702,218 588,095 777,333 457,108 585,330

Total Primary Government Changes in Net Assets 830,403$ 485,584$ 1,149,633$ 531,796$ 929,818$

(a)

Certain actions by the State affected the Governmental Activities revenues from property, sales and motor vehicle in-lieu taxes. In March 2004, California voters approved the State's Economic Recovery Bond measure. Repayment of the bonds is from increasing the State's share of the sales tax by 0.25% and reducing the local government's share by the same rate. The sales tax reduction is offset by increased property tax allocation. The property tax for sales tax swap will remain in effect until the Economic Recovery Bonds are fully

redeemed. In addition, the State effected changes in the vehicle license fee (VLF) distribution to local governments such that the State

general fund component of the VLF is shifted to the State and is replaced by equivalent property tax.

Changes in Net Assets

($200,000)

$200,000

$600,000

$1,000,000

$1,400,000

2008 2009 2010 2011 2012

Governmental Activities Business-type Activities

- 321 -

CITY OF LOS ANGELES

Fund Balances - Governmental FundsModified Accrual Basis of Accounting


2003 2004 2005 2006 2007

General FundNonspendable 40,795$ 36,410$ 43,665$ 41,449$ 59,638$ Assigned 287,553 301,587 284,058 296,999 391,023 Unassigned 353,523 291,608 481,868 446,942 257,249

Subtotal General Fund 681,871 629,605 809,591 785,390 707,910 All Other Governmental Funds

Nonspendable 42,674 10,675 10,772 18,073 98,568 Restricted 1,803,368 1,994,829 2,258,928 2,190,243 2,138,184 Assigned 588,834 643,707 584,112 711,750 1,011,697 Unassigned (6,792) (11,145) (9,763) (8,874) (1,990)

Subtotal All Other Governmental Funds 2,428,084 2,638,066 2,844,049 2,911,192 3,246,459

All Governmental FundsNonspendable 83,469 47,085 54,437 59,522 158,206Restricted 1,803,368 1,994,829 2,258,928 2,190,243 2,138,184 Assigned 876,387 945,294 868,170 1,008,749 1,402,720Unassigned 346,731 280,463 472,105 438,068 255,259

Total All Governmental Funds 3,109,955$ 3,267,671$ 3,653,640$ 3,696,582$ 3,954,369$

Continued…

- 322 -

Fund Balances - Governmental Funds

$0

$500,000

$1,000,000

$1,500,000

$2,000,000

$2,500,000

$3,000,000

$3,500,000

$4,000,000

$4,500,000

2003 2004 2005 2006 2007

Nonspendable Restricted Assigned Unassigned

- 322 -

CITY OF LOS ANGELES

Fund Balances - Governmental FundsModified Accrual Basis of Accounting - (Continued)


Fiscal Year2008 2009 2010 2011 2012

General FundNonspendable 30,304$ 27,879$ 29,771$ 26,299$ 31,134$ Assigned 352,416 233,761 182,835 239,877 267,645 Unassigned 215,227 221,811 224,574 253,882 272,905

Subtotal General Fund 597,947 483,451 437,180 520,058 571,684 All Other Governmental Funds

Nonspendable 97,966 98,048 97,785 104,175 82,397 Restricted 1,912,230 1,942,596 2,084,310 2,447,798 2,548,980 Assigned 948,735 743,720 838,014 512,650 603,657 Unassigned (2,473) 712 (789) (1,299) (7,393)

Subtotal All Other Governmental Funds 2,956,458 2,785,076 3,019,320 3,063,324 3,227,641

All Governmental FundsNonspendable 128,270 125,927 127,556 130,474 113,531 Restricted 1,912,230 1,942,596 2,084,310 2,447,798 2,548,980 Assigned 1,301,151 977,481 1,020,849 752,527 871,302 Unassigned 212,754 222,523 223,785 252,583 265,512

Total All Governmental Funds 3,554,405$ 3,268,527$ 3,456,500$ 3,583,382$ 3,799,325$

Note: In fiscal year 2011, the City implemented GASB Statement No. 54. Fund balances starting from fiscal year 2003 were restated

- 323 -

to conform to the requirements of this Statement.

Fund Balances - Governmental Funds

$0

$500,000

$1,000,000

$1,500,000

$2,000,000

$2,500,000

$3,000,000

$3,500,000

$4,000,000

$4,500,000

2008 2009 2010 2011 2012

Nonspendable Restricted Assigned Unassigned

- 323 -

CITY OF LOS ANGELES

Changes in Fund Balances - Governmental FundsModified Accrual Basis of Accounting


Fiscal Year2003 2004 2005 2006 2007

RevenuesTaxes 2,373,673$ 2,625,489$ 2,960,621$ 3,259,718$ 3,407,996$ Licenses and Permits 40,969 39,627 46,979 55,260 59,443 Intergovernmental 935,583 884,704 773,137 649,969 775,771 Charges for Services 825,400 892,501 966,187 1,031,895 1,134,205Fines 131,760 123,226 136,761 132,574 150,059 Special Assessments 92,568 97,429 95,293 97,193 100,872 Investment Earnings 159,059 13,504 102,198 71,714 231,677 Other 67,306 91,689 73,136 81,227 101,009

Total Revenues 4,626,318 4,768,169 5,154,312 5,379,550 5,961,032

ExpendituresGeneral Government 966,212 985,796 1,033,826 1,102,270 1,243,090Protection of Persons and Property 1,710,438 1,851,489 1,944,897 2,089,451 2,366,956Public Works 334,346 308,973 334,381 357,695 373,107 Health and Sanitation 285,370 328,407 321,322 348,258 373,644 Transportation 243,193 259,665 268,801 276,616 306,853 Cultural and Recreational Services 276,949 294,594 294,423 334,671 351,536 Community Development 373,147 430,768 345,368 322,683 347,319 Capital Outlay 558,493 522,256 472,648 547,787 730,117 Debt Service:

Principal 190,716 186,024 219,144 241,142 340,091 Interest 143,784 136,651 166,367 177,756 181,677 Cost of Issuance 14,387 5,057 2,744 2,053 5,745 Advance Refunding Loan Escrow 23,076 3,253 -- 1,878 --

- 324 -

Advance Refunding Loan Escrow 23,076 3,253 1,878

Total Expenditures 5,120,111 5,312,933 5,403,921 5,802,260 6,620,135

Excess (Deficit) of Revenues overExpenditures (493,793) (544,764) (249,609) (422,710) (659,103)

Other Financing Sources (Uses)Issuance of Long-term Debt 518,615 468,135 377,140 268,750 695,488 Discount on Issuance of Long-term Debt -- -- -- -- -- Premium on Issuance of Long-term Debt 23,867 25,522 15,944 9,740 15,138 Issuance of Refunding Bonds 583,950 77,345 49,395 73,080 -- Premium on Issuance of Refunding Bonds 13,031 4,736 1,497 4,786 -- Payment to Refunded Bond Escrow Agent -- -- -- -- -- Proceeds of Refunding Loan -- -- -- -- -- Payment for Current Refunding of Loan -- -- -- -- -- Loans from HUD 2,095 23,895 14,400 1 -- Transfers In 711,012 745,533 775,697 828,604 1,058,449Transfers Out (499,076) (547,296) (545,499) (642,716) (853,782)

Total Other Financing Sources (Uses) 1,353,494 797,870 688,574 542,245 915,293 Special Item - Loss on Loan Settlement -- -- -- -- --

Net Change in Fund Balances 859,701$ 253,106$ 438,965$ 119,535$ 256,190$

Debt Service as a Percentage ofNoncapital Expenditures 8.0% 7.0% 7.8% 8.1% 8.9%

Continued…

- 324 -

CITY OF LOS ANGELES

Changes in Fund Balances - Governmental FundsModified Accrual Basis of Accounting - (Continued)


Fiscal Year2008 2009 2010 2011 2012

RevenuesTaxes 3,480,296$ 3,506,089$ 3,397,650$ 3,435,063$ 3,518,357$ Licenses and Permits 61,047 51,084 48,186 51,691 60,474 Intergovernmental 852,376 838,722 876,470 920,809 937,817 Charges for Services 1,254,704 1,375,875 1,419,145 1,436,977 1,533,626 Fines 154,600 156,211 153,707 158,612 158,417 Special Assessments 103,782 104,149 105,998 106,514 123,383 Investment Earnings 255,254 134,830 104,365 65,978 72,411 Other 134,564 114,336 96,255 142,968 172,269

Total Revenues 6,296,623 6,281,296 6,201,776 6,318,612 6,576,754

ExpendituresGeneral Government 1,268,572 1,339,379 1,357,239 1,269,321 1,296,788 Protection of Persons and Property 2,573,006 2,599,294 2,551,225 2,477,648 2,532,262 Public Works 379,026 422,994 354,567 347,485 389,139 Health and Sanitation 398,152 467,392 449,083 459,785 453,681 Transportation 357,301 361,371 327,328 321,797 345,671 Cultural and Recreational Services 387,727 376,869 389,371 389,165 406,338 Community Development 435,768 402,152 383,256 463,920 465,984 Capital Outlay 934,999 641,363 491,187 362,867 523,931 Debt Service:

Principal 391,585 495,258 366,663 367,206 410,333 Interest 206,675 188,552 181,495 189,902 182,171 Cost of Issuance 2,604 6,285 4,954 2,439 5,342 Advance Refunding Loan Escrow 41,311 -- -- -- --

- 325 -

Advance Refunding Loan Escrow 41,311

Total Expenditures 7,376,726 7,300,909 6,856,368 6,651,535 7,011,640

Excess (Deficit) of Revenues overExpenditures (1,080,103) (1,019,613) (654,592) (332,923) (434,886)

Other Financing Sources (Uses)Issuance of Long-term Debt 461,035 530,225 545,155 219,186 318,530 Discount on Issuance of Long-term Debt -- (1,168) (370) -- -- Premium on Issuance of Long-term Debt 3,596 6,517 15,479 2,216 24,672 Issuance of Refunding Bonds -- 253,060 49,485 18,705 595,240 Premium on Issuance of Refunding Bonds -- 221 3,824 1,198 100,885 Payment to Refunded Bond Escrow Agent -- (239,201) (54,463) -- (694,326) Proceeds of Refunding Loan 24,110 -- -- 1,983 -- Payment for Current Refunding of Loan (24,110) -- -- (1,983) -- Loans from HUD -- 25,408 63,904 7,388 52,521 Transfers In 1,021,078 1,088,358 1,041,071 1,086,218 1,004,650 Transfers Out (805,671) (929,208) (820,596) (827,403) (754,573)

Total Other Financing Sources (Uses) 680,038 734,212 843,489 507,508 647,599 Special Item - Loss on Loan Settlement -- -- -- (47,007) --

Net Change in Fund Balances (400,065)$ (285,401)$ 188,897$ 127,578$ 212,713$

Debt Service as a Percentage ofNoncapital Expenditures 9.9% 10.3% 8.6% 9.0% 9.0%

Notes: Certain prior years' data were reclassified to conform to the fiscal year 2012 presentation.

- 325 -

Fiscal Year 2003 2004 2005(a) 2006 2007

Property Taxes 792,839$ 882,531$ 1,229,381$ 1,365,860$ 1,490,223$ Sales Taxes 367,112 381,090 303,954 329,169 333,386 Utility Users Taxes 521,148 572,018 578,542 606,617 606,624 Business Taxes 356,937 372,376 396,316 436,621 465,353 Other Taxes 335,637 417,474 452,428 521,451 512,410

Total Revenues 2,373,673$ 2,625,489$ 2,960,621$ 3,259,718$ 3,407,996$

Continued…


CITY OF LOS ANGELES

Tax Revenues by Source - Governmental FundsModified Accrual Basis of Accounting

- 326 -

Tax Revenue by Source - Governmental Funds

Property Taxes33%

Sales Taxes16%

Utility Users Taxes22%

Business Taxes15%

Other Taxes14%

2003

Property Taxes34%

Sales Taxes14%


Business Taxes14%

Other Taxes16%

2004

Property Taxes42%

Sales Taxes10%


Business Taxes13%

Other Taxes15%

2005

Property Taxes44%

Sales Taxes10%


Business Taxes13%

Other Taxes15%

2007Property Taxes42%

Sales Taxes10%

Utility Users Taxes 19%

Business Taxes14%

Other Taxes15%

2006

- 326 -

ChangeFiscal Year 2003 -

2008 2009 2010 2011 2012 2012

Property Taxes 1,585,229$ 1,702,884$ 1,648,490$ 1,643,696$ 1,664,819$ 110%Sales Taxes 337,313 300,585 311,520 337,360 328,059 -11%Utility Users Taxes 617,199 646,256 628,484 618,307 634,629 22%Business Taxes 465,124 461,374 412,287 424,762 438,969 23%Other Taxes 475,431 394,990 396,869 410,938 451,881 35%

Total Revenues 3,480,296$ 3,506,089$ 3,397,650$ 3,435,063$ 3,518,357$ 48%

(a) Certain actions by the State affected the City's General Fund revenues from property taxes and sales taxes.

In March 2004, California voters approved the State's Economic Recovery Bond measure. Repayment of the bonds is from increasing the State's share of the sales tax by 0.25% and reducing the local government's share by the same rate. The sales tax reduction is offset by increased property tax allocation. The property tax for sales tax swap will remain in effect until the Economic Recovery Bonds are fully redeemed.


CITY OF LOS ANGELES

Tax Revenues by Source - Governmental FundsModified Accrual Basis of Accounting - (Continued)

- 327 -

Tax Revenue by Source - Governmental Funds

Property Taxes45%

Sales Taxes

10%

Utility Users Taxes

18%

Business Taxes

13%

Other Taxes

14%2008

Property Taxes49%

Sales Taxes

9%


Business Taxes

13%

Other Taxes11%

2009Property Taxes49%

SalesTaxes9%


Business Taxes12%

Other Taxes12%

2010

Property Taxes48%

Sales Taxes10%


Business Taxes12%

Other Taxes12%

2011

Property Taxes47%

Sales Taxes9%


Business Taxes13%

Other Taxes13%

2012

- 327 -


- 328 -

Total

Direct

Tax

Year Real Personal Average Rate (3) Assessed

of Property (2) Property Total Annual (per $1,000 of ValueLevy ($ 000's) ($ 000's) ($ 000's) Growth assessed value) Per Capita

2003 227,593,072$ 16,806,678$ 244,399,750$ 6.20% 1.042312 65

2004 246,906,688 16,640,805 263,547,493 7.83% 1.050574 70

2005 268,163,573 16,304,721 284,468,294 7.94% 1.055733 75

2006 296,325,286 16,343,009 312,668,295 9.91% 1.051289 83

2007 331,032,179 15,950,614 346,982,793 10.97% 1.045354 92

2008 363,755,025 17,398,206 381,153,231 9.85% 1.038051 101

2009 392,197,205 18,938,019 411,135,224 7.87% 1.038541 109

2010 391,747,407 19,008,923 410,756,330 -0.09% 1.041220 108

2011 384,126,153 17,147,802 401,273,955 -2.31% 1.038895 105

2012 389,768,424 16,688,249 406,456,673 1.29% 1.038666 106

Source: Taxpayer's Guide - Auditor Controller, County of Los Angeles.

Assessed and Estimated

Actual Value (1)

CITY OF LOS ANGELES

Assessed and Estimated Actual Value of PropertyLast Ten Fiscal Years

- 329 -

(1) Net of Homeowners' Exemption.(2) Assessed at 100% of estimated actual value.(3) Total Direct Tax Rate for Tax Rate Area # 4 is used as it applies to most properties within the City of Los Angeles. Since each property

is subject to taxation by a number of taxing entities, the County groups all properties subject to taxation by the same entities into Tax

Rate Areas (TRAs). There are over 274 TRAs in the City.

Total Assessed and Estimated Actual Value of Property

$0

$50,000,000

$100,000,000

$150,000,000

$200,000,000

$250,000,000

$300,000,000

$350,000,000

$400,000,000

$450,000,000

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

In T

ho

usa

nd

s

Fiscal Year

Real Property Personal Property

- 329 -

CITY OF LOS ANGELES

Direct and Overlapping Property Tax Rates

Tax Rate Area No. 4 (a)


City Direct Rates Total

General L.A. Unified L.A. Unified Metropolitan Direct and

Fiscal Obligation Total Los Angeles School Flood Control Water Overlapping

Year Basic Rate Debt Service Direct County District District District Rates

2002-03 $ 1.000000 $ 0.042312 $ 1.042312 $ 0.001033 $ 0.036973 $ 0.000881 $ 0.006700 $ 1.087899

2003-04 1.000000 0.050574 1.050574 0.000992 0.077145 0.000462 0.006100 1.135273

2004-05 1.000000 0.055733 1.055733 0.000923 0.088839 0.000245 0.005800 1.151540

2005-06 1.000000 0.051289 1.051289 0.000795 0.084346 0.000049 0.005200 1.141679

2006-07 1.000000 0.045354 1.045354 0.000663 0.106735 0.000052 0.004700 1.157504

2007-08 1.000000 0.038051 1.038051 0.000000 0.123302 0.000000 0.004500 1.165853

2008-09 1.000000 0.038541 1.038541 0.141730 0.124724 0.000000 0.004300 1.309295

2009-10 1.000000 0.041220 1.041220 0.000000 0.151809 0.000000 0.004300 1.197329

2010-11 1.000000 0.038895 1.038895 0.000000 0.186954 0.000000 0.003700 1.229549

2011-12 1.000000 0.038666 1.038666 0.000000 0.168187 0.000000 0.003700 1.210553

Source: Tax Rates, Los Angeles County Tax Collector.

(a) Tax Rate Area # 4 is used to illustrate the breakdown of a tax rate within the City and applies to most properties within the City of Los Angeles. Since each property is subject to taxation by a number of taxing entities, the County groups all properties subject to taxation by the same entities into Tax Rate Areas (TRAs). There are over 274 TRAs in the City.

Overlapping Rates

- 330 -

Total City Direct and Overlapping Property Tax Rates

$0

$0

$0

$0

$0

$1

$1

$1

$1

$1

$1

In T

ho

usa

nd

s

Fiscal Years

$0.950000

$1.000000

$1.050000

$1.100000

$1.150000

$1.200000

$1.250000

$1.300000

$1.350000

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

To

tal D

irec

t an

d O

verl

app

ing

Rat

es

Fiscal Year

Total Direct Overlapping Rates

- 330 -

Secured SecuredAssessed Assessed Assessed

Taxpayer Valuation Rank Valuation Rank

Douglas Emmett LLC 2,298,099,106$ 1 0.59 % 942,782,411$ 1 0.41 %

Valero Energy Corporation 910,727,551 2 0.23 --

Anheuser Busch Inc. 779,389,837 3 0.20 710,251,800 5 0.31

ConocoPhillips Co. 718,794,400 4 0.18 -- --

Tesoro Corporation 597,521,183 5 0.15 -- --

APM Terminals Pacific Ltd. 529,063,387 6 0.14 -- --

Donald T. Sterling 524,770,043 7 0.13 -- --

Tishman Speyer Archstone Smith 499,685,502 8 0.13 -- --

Paramount Pictures Corp. 473,288,626 9 0.14 357,737,934 9 0.16

Century City Mall LLC 459,585,261 10 0.13

Ultramar Inc. -- -- 785,599,254 2 0.35

Tosco Corporation -- -- 781,298,761 3 0.34

Arden Realty Finance Partnership -- -- 653,193,624 6 0.29

Equilon Enterprises LLC -- -- 761,236,730 4 0.33

Entertainment Center LLC -- -- 536,607,706 7 0.24

2121 Avenue of the Stars LLC -- -- 362,059,200 8 0.16

1999 Stars LLC 309,873,705 10 0.14

Total 7,790,924,896$ 2.00 % 6,200,641,125$ 2.74 %

Total City Secured Assessed Valuation 389,710,610,377$ 227,445,670,102$

Source: California Municipal Statistics Inc Taxpayers' Guides, 2011-2012 and 2002-2003

Value Value

of Total City of Total CityTaxable Taxable

Assessed

2012 2003Percentage Percentage

CITY OF LOS ANGELES

Ten Largest Property Taxpayers

Secured Assessed Valuation

Current and Nine Years Ago

- 331 -

Total CollectionsTax Levy (a) in

Fiscal for the Percent Subsequent PercentYear Fiscal Year Amount of Levy Years (b) Amount of Levy

2002-03 624,633$ 599,921$ 96.04% 28,939$ 628,860$ 100.68%

2003-04 673,417 645,697 95.88% 27,328 673,025 99.94%

2004-05 730,495 688,993 94.32% 30,932 719,925 98.55%

2005-06 784,864 708,009 90.21% 45,693 753,702 96.03%

2006-07 862,415 814,880 94.49% 80,748 895,628 103.85%

2007-08 935,881 872,254 93.20% 64,845 937,099 100.13%

2008-09 1,008,578 948,294 94.02% 110,519 1,058,813 104.98%

2009-10 1,009,256 947,165 93.85% 86,089 1,033,254 102.38%

2010-11 984,897 941,070 95.55% 73,905 1,014,975 103.05%

2011-12 1,000,689 936,265 93.56% 30,763 967,028 96.64%

CITY OF LOS ANGELES

Property Tax Levies and CollectionsLast Ten Fiscal Years


Collected within theFiscal Year of Levy Total Collections to Date

- 332 -

, , , , ,

(a) One percent basic levy only, which is a General Fund revenue; excludes City levy for debt service.(b) Includes collections on adjustments for undetermined prior fiscal year(s).

Property Tax Levies and Collections Within Fiscal Year of Levy

$0 $200,000 $400,000 $600,000 $800,000 $1,000,000

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

In Thousands

Fis

cal Y

ear

Levy

Collections in Year of Levy

- 332 -

Direct Rate per Kilowatt Hour

Commercial Commercial

Fiscal and andYear Residential Industrial All Other Total Residential Industrial

2003 6,554 15,350 1,831 23,735 0.10 0.09

2004 7,266 15,895 473 23,634 0.10 0.09

2005 7,063 15,705 2,675 25,443 0.10 0.09

2006 7,252 16,085 2,726 26,063 0.10 0.09

2007 7,641 16,291 2,556 26,488 0.11 0.10

2008 7,664 16,482 2,206 26,352 0.11 0.10

2009 7,641 16,250 1,982 25,873 0.12 0.11

2010 7,434 15,485 3,396 26,315 0.14 0.13

2011 7,230 15,541 2,060 24,831 0.13 0.13

2012 7,316 15,456 1,843 24,615 0.13 0.13

Average Number of Customers (in thousands)

Commercial

Fiscal andYear Residential Industrial All Other Total

2003 1,224 195 2 1,421

2004 1,230 196 2 1,428

2005 1,237 197 3 1,437

2006 1,242 200 3 1,445

2007 1,247 199 2 1,448

2008 1,252 192 2 1,446

2009 1,257 193 2 1,452

2010 1,252 193 2 1,447

2011 1,263 196 2 1,461

2012 1,274 195 2 1,471

CITY OF LOS ANGELES

Energy Sold by Type of CustomerPower Enterprise FundLast Ten Fiscal Years


Sales of Energy (in thousands of megawatt hours)

CITY OF LOS ANGELES

Average Number of Customers for Energy SalesPower Enterprise Fund

- 333 -


- 334 -


- 335 -

CITY OF LOS ANGELES

Ratios of Outstanding Debt By TypeLast Ten Fiscal Years

(amounts expressed in thousands, except per capita)

Certificates of Participation

Fiscal Year General Judgment and Special Ended Obligation Obligation Lease Revenue Assessment Revenue Notes HUD

June 30 Bonds Bonds Bonds Bonds Bonds Payable Loan

2003 978,120$ 41,450$ 981,330$ 38,380$ 825,379$ $ -- 104,501$

2004 1,140,850 34,795 965,625 35,650 931,886 36,373 126,079

2005 1,418,980 28,140 850,730 34,160 920,543 52,973 135,903

2006 1,445,250 21,485 736,705 32,595 951,910 148,000 132,953

2007 1,411,898 15,340 1,090,485 31,025 969,890 176,000 129,657

2008 1,303,035 9,195 1,309,510 29,390 926,560 200,000 76,055

2009 1,298,085 25,895 1,475,735 27,685 898,490 107,735 98,035

2010 1,369,450 71,065 1,489,645 25,910 907,555 152,630 156,276

2011 1,255,830 64,005 1,494,045 24,095 848,675 206,173 157,781

2012 1,215,615 57,820 1,528,300 22,210 786,415 141,197 204,395

Continued…


- 336 -

CITY OF LOS ANGELES

Ratios of Outstanding Debt By Type - (Continued)Last Ten Fiscal Years


Fiscal Year Total PercentageEnded Revenue Commercial Notes Loans Capital Primary of Personal Per

June 30 Bonds Paper Payable Payable Leases Government Income (1) Capita (2)

2003 8,049,178$ 407,302$ 9,887$ 13,252$ 55,446$ 11,504,225$ 3.57% 3,059$

2004 8,075,776 266,095 9,715 146,215 54,648 11,823,707 3.50% 3,133

2005 8,342,058 366,561 4,495 166,684 53,793 12,375,020 3.46% 3,283

2006 9,591,763 313,561 4,105 159,659 52,881 13,590,867 3.52% 3,606

2007 9,642,881 498,745 3,697 242,122 51,855 14,263,595 3.56% 3,789

2008 9,931,564 810,328 3,271 266,441 50,715 14,916,064 3.57% 3,952

2009 11,557,118 446,989 2,826 255,723 49,518 16,243,834 4.14% 4,295

2010 14,102,701 647,116 2,361 288,273 -- 19,212,982 4.77% 5,066

2011 16,549,219 415,012 1,874 274,869 -- 21,291,578 5.06% 5,594

2012 16,215,605 462,199 1,366 314,227 -- 20,949,349 N/A 5,477

Note: Details regarding the City's outstanding debt can be found in the Notes to the Financial Statements beginning on page 116. (1) Personal income data can be found in the Statistical Section, Demographic and Economic Information. (2) Population data updated based on current estimates. See Statistical Section, Demographic and Economic Information. N/A - Data not available

Business-Type Activities

- 337 -

Net Net General General

Fiscal Bonded Debt Bonded Year Ratio to Debt

Ended Net General Assessed Per

June 30 Bonded Debt Assessed Value(1) Value Population(2) Capita(2)

2003 978,120,000$ 244,399,750,197$ 0.40% 3,760,410 260$

2004 1,140,850,000 263,547,493,340 0.43% 3,773,549 302

2005 1,418,980,000 284,468,294,432 0.50% 3,769,130 376

2006 1,445,250,000 312,668,294,401 0.46% 3,768,645 383

2007 1,411,898,000 346,982,792,759 0.41% 3,764,062 375

2008 1,303,035,000 381,153,231,570 0.34% 3,774,497 345

2009 1,298,085,000 411,135,224,351 0.32% 3,781,951 343

2010 1,369,450,000 410,756,330,048 0.33% 3,792,621 361

2011 1,255,830,000 401,273,954,269 0.31% 3,806,411 330

CITY OF LOS ANGELES

Ratios of Net General Bonded Debtto Assessed Value and Per Capita


- 338 -

2012 1,215,615,000 406,456,672,926 0.30% 3,825,297 318

(1) Net of homeowners exemptions.(2) Population data updated based on current estimates.

Net General Bonded Debt and Population

3,500,000

3,600,000

3,700,000

3,800,000

3,900,000

4,000,000

4,100,000

4,200,000

$0

$200,000,000

$400,000,000

$600,000,000

$800,000,000

$1,000,000,000

$1,200,000,000

$1,400,000,000

$1,600,000,000

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

Po

pu

lati

on

Net

Gen

eral

Bo

nd

ed D

ebt

Fiscal Years

Net General Bonded Debt Population

- 338 -

Estimated ShareDebt Estimated of Overlapping

Outstanding Percentage DebtJune 30, 2012 Applicable (1) June 30, 2012

Debt repaid with property taxesLos Angeles Flood Control District 37,195,000$ 41.297 % 15,360,419$ Metropolitan Water District of Southern California 196,545,000 20.859 40,997,322 Los Angeles Community College District 3,504,910,000 71.704 2,513,160,666 Beverly Hills Unified School District 180,084,540 0.181 325,953 Inglewood Unified School District 108,930,000 1.308 1,424,804 Las Virgenes Joint Unified School District 168,796,598 0.999 1,686,278 Los Angeles Unified School District 11,279,905,000 88.005 9,926,880,395 Other School Districts 275,834,058 various 184,487 City of Los Angeles Community Facilities District No. 3 (Estimate) 4,985,000 100.000 4,985,000 City of Los Angeles Community Facilities District No. 4 124,400,000 100.000 124,400,000 City of Los Angeles Community Facilities District No. 8 5,925,000 100.000 5,925,000 City of Los Angeles Landscaping and Lighting Benefit Assessment District 22,210,000 100.000 22,210,000 Mountains Recreation and Conservation Authority Assessment Districts 22,625,000 99.976 - 99.998 22,621,915 Los Angeles County Regional Park and Open Space Assessment District 170,725,000 40.539 69,210,208

Other overlapping debtLos Angeles County General Fund Obligations 1,474,122,758 40.539 597,594,625 Los Angeles County Superintendent of Schools Certificates of Participation 11,269,678 40.539 4,568,615 Los Angeles County Sanitation District Nos. 1, 3, 4, 5, 8 and 16 Authorities 104,142,551 0.002 - 13.709 7,439,709 Pasadena Area Community College District Certificates of Participation 1,225,000 0.001 12 Inglewood Unified School District Certificates of Participation 1,700,000 1.308 22,236 Las Virgenes Joint Unified School District Certificates of Participation 11,985,000 0.999 119,730 Los Angeles Unified School District Certificates of Participation 419,851,037 88.005 369,489,905 Less: Los Angeles County General Fund Obligations (supported by landfill revenues) (6,769,269) Less: Los Angeles Unified School District QZAB Bonds

(supported by periodic payments to investment accounts) (3,880,140)

Subtotal- overlapping debt 13,717,957,870

City of Los Angeles direct debtGeneral Obligation Bonds 1,215,615,000 Special Assessment Bonds 22,210,000 Special Tax Obligation Bonds 44,180,000 Lease Obligation Bonds 1,903,045,000 Judgment Obligation Bonds 57,820,000

Subtotal- City of Los Angeles direct debt 3,242,870,000

Total direct and overlapping debt (2)16,960,827,870$

(1) Percentage of overlapping agency's assessed valuation located within boundaries of the City.(2) Excludes tax and revenue anticipation notes, commercial paper notes, revenue bonds,

mortgage revenue and tax allocation bonds, and non-bonded capital lease obligations.Source: Kelling, Northcross & Nobriga for overlapping debt.

CITY OF LOS ANGELES

Direct and Overlapping Governmental Activities DebtJune 30, 2012

- 339 -

2003 2004 2005 2006 2007

Assessed Valuation Net ofHomeowners' Exemptions 244,399,750$ 263,547,493$ 284,468,294$ 312,668,295$ 346,982,793$

Add: Homeowners' Exemptions 2,625,257 2,598,874 2,641,639 2,642,161 2,637,783

Gross Assessed Valuation 247,025,007$ 266,146,367$ 287,109,933$ 315,310,456$ 349,620,576$

Legal Debt Limit (a)

(15% of assessed value) 37,053,751$ 39,921,955$ 43,066,490$ 47,296,568$ 52,443,086$

Less: General Obligation BondsOutstanding 978,120 1,140,850 1,418,980 1,445,250 1,411,898

Legal Debt Margin 36,075,631$ 38,781,105$ 41,647,510$ 45,851,318$ 51,031,188$

Legal Debt Margin as a Percentage of the DebtLimit 97.36% 97.14% 96.71% 96.94% 97.31%

General Obligation BondsOutstanding as aPercentage of AssessedValue 0.40% 0.43% 0.49% 0.46% 0.40%

Population (b) 3,760,410 3,773,549 3,769,130 3,768,645 3,764,062

General Obligation BondsOutstanding Per Capita $260 $302 $376 $383 $375

Continued…

Ratios of General Bonded Debt Outstanding and Legal Debt MarginLast Ten Fiscal Years


CITY OF LOS ANGELES

Fiscal Year

- 340 -

CITY OF LOS ANGELES

Ratios of General Bonded Debt Outstanding and Legal Debt Margin - (Continued)Last Ten Fiscal Years


2008 2009 2010 2011 2012

Assessed Valuation Net ofHomeowners' Exemptions 381,153,232$ 411,135,224$ 410,756,330$ 401,273,954$ 406,456,673$

Add: Homeowners' Exemptions 2,664,276 2,688,218 2,707,745 2,696,221 2,674,226

Gross Assessed Valuation 383,817,508$ 413,823,442$ 413,464,075$ 403,970,175$ 409,130,899$

Legal Debt Limit (a)

(15% of assessed value) 57,572,626$ 62,073,516$ 62,019,611$ 60,595,526$ 61,369,634$

Less: General Obligation BondsOutstanding 1,303,035 1,298,085 1,369,450 1,255,830 1,215,615

Legal Debt Margin 56,269,591$ 60,775,431$ 60,650,161$ 59,339,696$ 60,154,019$

Legal Debt Margin as a Percentage of the DebtLimit 97.74% 97.91% 97.79% 97.93% 98.02%

General Obligation BondsOutstanding as aPercentage of AssessedValue 0.34% 0.31% 0.33% 0.31% 0.30%

Population (b) 3,774,497 3,781,951 3,792,621 3,806,411 3,825,297

General Obligation BondsOutstanding Per Capita $345 $343 $361 $330 $318

(a)Debt limit provided in Section 43605 of the State of California Government Code.

(b)Population data updated based on current estimates.

Fiscal Year

- 341 -

CITY OF LOS ANGELES

Pledged Revenue CoverageLast Ten Fiscal Years


Net NetLess: Net Available Net Operating

Fiscal Operating Operating Available Debt Revenue Operating Cash FlowYear Revenues (1) Expenses (2) Revenue Service (3) Coverage Cash Flow Coverage (4)

Airports Enterprise Fund Revenue Bonds and Notes

2003 517,583$ 400,944$ 116,639$ 42,584$ 2.7 134,554$ 3.2

2004 558,602 437,127 121,475 44,826 2.7 33,285 0.7

2005 585,065 476,349 108,716 43,027 2.5 119,760 2.8

2006 630,036 520,170 109,866 41,452 2.7 72,531 1.7

2007 664,304 548,167 116,137 29,116 4.0 223,202 7.7

2008 757,015 595,408 161,607 28,621 5.6 196,534 6.9

2009 771,364 590,960 180,404 38,730 4.7 40,076 1.0

2010 758,594 596,802 161,792 54,948 2.9 122,946 2.2

2011 887,762 601,964 285,798 126,331 2.3 215,572 1.7

2012 952,129 639,355 312,774 138,010 2.3 313,774 2.3

Harbor Enterprise Fund Revenue Bonds and Notes

2003 338,423$ 148,415$ 190,008$ 55,085$ 3.4 215,117$ 3.9

2004 337,347 130,174 207,173 59,023 3.5 208,762 3.5

2005 366,438 170,891 195,547 60,536 3.2 226,037 3.7

2006 406,043 184,132 221,911 61,574 3.6 201,575 3.3

2007 445,609 163,775 281,834 59,085 4.8 246,665 4.2

2008 465,648 221,752 243,896 61,318 4.0 252,898 4.1

2009 424,028 254,143 169,885 61,298 2.8 151,264 2.5

2010 424,306 210,235 214,071 66,851 3.2 185,416 2.8

2011 406,606 209,695 196,911 72,927 2.7 158,228 2.2

2012 419,158 199,806 219,352 71,609 3.1 217,113 3.0

Power Enterprise Fund Revenue Bonds and Notes

2003 2,318,167$ 1,655,240$ 662,927$ 168,119$ 3.9 792,585$ 4.7

2004 2,437,461 1,771,230 666,231 170,466 3.9 505,187 3.0

2005 2,401,458 1,835,594 565,864 189,105 3.0 611,579 3.2

2006 2,665,535 2,016,080 649,455 223,678 2.9 559,157 2.5

2007 2,799,140 1,996,649 802,491 267,144 3.0 507,934 1.9

2008 2,989,725 2,176,056 813,669 250,484 3.2 469,188 1.9

2009 2,924,155 2,043,192 880,963 270,357 3.3 427,647 1.6

2010 3,387,361 2,287,434 1,099,927 309,349 3.6 741,881 2.4

2011 3,288,476 2,308,188 980,288 400,846 2.4 666,711 1.7

2012 3,267,679 2,235,522 1,032,157 343,093 3.0 851,613 2.5

Continued…

- 342 -

CITY OF LOS ANGELES

Pledged Revenue Coverage - (Continued)Last Ten Fiscal Years


Net NetLess: Net Available Net Operating

Fiscal Operating Operating Available Debt Revenue Operating Cash FlowYear Revenues (1) Expenses (2) Revenue Service (3) Coverage Cash Flow Coverage (4)

Water Enterprise Fund Revenue Bonds and Notes

2003 584,306$ 410,899$ 173,407$ 46,684$ 3.7 112,840$ 2.4

2004 618,589 421,634 196,955 64,135 3.1 282,914 4.4

2005 590,751 387,264 203,487 71,851 2.8 210,129 2.9

2006 625,995 394,543 231,452 95,681 2.4 251,198 2.6

2007 717,145 442,962 274,183 122,928 2.2 231,297 1.9

2008 799,706 523,657 276,049 133,354 2.1 132,714 1.0

2009 825,168 581,587 243,581 116,026 2.1 189,718 1.6

2010 858,201 584,382 273,819 134,106 2.0 152,044 1.1

2011 831,771 540,041 291,730 167,371 1.7 290,206 1.7

2012 875,909 544,824 331,085 178,468 1.9 238,099 1.3

Sewer Enterprise Fund Revenue Bonds and Notes

2003 422,951$ 197,516$ 225,435$ 122,680$ 1.8 195,596$ 1.6

2004 428,271 202,279 225,992 118,588 1.9 218,364 1.8

2005 437,411 212,051 225,360 125,309 1.8 200,550 1.6

2006 492,711 232,971 259,740 143,974 1.8 206,380 1.4

2007 518,393 240,840 277,553 160,005 1.7 262,994 1.6

2008 543,417 276,508 266,909 170,140 1.6 248,030 1.5

2009 543,318 287,135 256,183 151,996 1.7 237,586 1.6

2010 543,258 264,072 279,186 170,413 1.6 265,541 1.6

2011 510,214 256,664 253,550 174,804 1.5 214,662 1.2

2012 520,664 254,980 265,684 177,195 1.5 236,768 1.3

(1) For Airports, operating revenues include pledged pooled investment interest income. For Power and

Water, operating revenues include capital contributions, net nonoperating revenues and allowance

for funds used during construction. For Sewer, operating revenues include interest income from

pooled investments other than interest income from construction funds.

(2) For Airports, Harbor and Sewer, operating expenses do not include interest, depreciation and amortization

expenses. For Power and Water, operating expenses do not include depreciation and amortization

expenses.

(3) Debt service includes principal and interest payments on bonds, and State loan for Sewer.

(4) Net operating cash flow coverage is presented to show the Funds' ability to generate sufficient

cash flow to cover debt service costs.

- 343 -


- 344 -

Personal Personal

Fiscal Estimated Income Income Median Public School Unemployment

Year Population (1) (in thousands)(2) Per Capita (2) Age (3) Enrollment (4) Rate (5)

2002-03 3,760,410 322,267,247$ 32,995$ 33.0 894,183 8.3%

2003-04 3,773,549 338,203,048 34,534 33.4 900,436 7.7%

2004-05 3,769,130 357,186,377 36,498 34.0 891,252 5.9%

2005-06 3,768,645 385,724,212 39,610 33.4 836,301 5.2%

2006-07 3,764,062 400,366,343 41,273 34.5 819,268 5.5%

2007-08 3,774,497 417,454,378 42,881 33.9 801,838 8.0%

2008-09 3,781,951 392,579,855 40,111 33.3 784,457 13.0%

2009-10 3,792,621 403,144,483 41,025 n/a 748,273 13.7%

2010-11 3,806,411 420,913,463 42,564 n/a 738,113 13.8%

2011-12 3,825,297 n/a n/a n/a 701,208 12.2%

(1) Data based on California Department of Finance revised population estimates from 2003 to 2012, except for 2010 which is an actual decennial census counts.

(2) U.S. Department of Commerce, Bureau of Economic Analysis - revised estimates of personal income for Los Angeles County updated on November 26, 2012.

The U.S. Census Bureau defines personal income as the income received by all persons from all sources, and is the sum of "net earnings", rental

income, dividend income, interest income, and transfer receipts. " Net earnings" is defined as wage and salary, supplements to wages and salaries,

and proprietors' income, less contributions for government social insurance, before deduction of personal income and other taxes.

Separate information for the City of Los Angeles are not available.

(3) US Census Bureau for California population. No information available for the City. Source: http://factfinder.census.gov

(4) Enrollment data determined at the beginning of each school year (October). Data include the City and all or significant portions of a number of smaller

cities and unincorporated territories. Beginning of Fiscal Year 2003-04 enrollment data do not include fiscally independent charter schools.

(5) Data based on California Employment Development Department for City of Los Angeles, not seasonally adjusted.

n/a Not Available

CITY OF LOS ANGELES

Demographic and Economic StatisticsLast Ten Fiscal Years

- 345 -

3,720,000

3,740,000

3,760,000

3,780,000

3,800,000

3,820,000

3,840,000 Estimated Population

0 100,000 200,000 300,000 400,000 500,000 600,000 700,000 800,000 900,000

1,000,000 Public School Enrollment

0.0%

2.0%

4.0%

6.0%

8.0%

10.0%

12.0%

14.0%

16.0%

Unemployment Rate

$0$5,000

$10,000$15,000$20,000$25,000$30,000$35,000$40,000$45,000$50,000

Personal Income Per Capita

- 345 -

CITY OF LOS ANGELES

Principal EmployersCurrent Year and Nine Years Ago

Employer Employees Rank Employees Rank

City of Los Angeles 44,947 1 9.13 % 47,686 1 8.51 %

County of Los Angeles 40,691 2 8.27 34,075 3 6.08

Los Angeles Unified School District 36,881 3 7.49 40,655 2 7.25

University of California Los Angeles 32,300 4 6.56 8,950 7 1.60

Cedars-Sinai Medical Center 17,000 5 3.45 17,500 4 3.12

University of Southern California 16,623 6 3.38 11,661 5 2.08

Kaiser Foundation Hospitals 11,775 7 2.39 11,596 6 2.07

Veterans Health Administration 10,400 8 2.11 5,800 -- 1.03

Farmers Insurance Group 9,167 9 1.86 8,167 8 1.46

Team-One Employment Specialists LLC 5,000 10 1.02 4,000 -- 0.71

United States Postal Service 1,500 -- 0.30 7,000 9 1.25

The Walt-Disney 350 -- 0.07 6,000 10 1.07

226,634 46.04 % 203,090 36.24 %

(1) Based on a total city employment of 492,295(2) Based on a total city employment of 560,076

Sources: City of Los Angeles Detail of Department Programs and various City Departments

D&B Regional Business Directories Los Angeles County Area, 2012 and 2003

Los Angeles Unified School District Human Resources Department (Certificated Employees)

County of Los Angeles Human Resources Department (2012)

University of Southern California, Office of Budget and Planning

Cedar-Sinai Human Resource Department (2012)

Note: From the Sources, employers located outside the City of Los Angeles were excluded.

2012 2003Percentage

of TotalCity

Employment (1) Employment (2)City

of TotalPercentage

- 346 -


- 347 -

CITY OF LOS ANGELES

Number of City Government Employees by Function/ProgramFull-Time EquivalentLast Ten Fiscal Years

2003 2004 2005 2006 2007GOVERNMENTAL ACTIVITIES

General GovernmentCity Administrative Officer 122 129 125 126 122 City Attorney 839 820 808 963 984 City Clerk (1) 140 139 137 130 135 City Ethics Commission 29 31 30 26 28 Commission on the Status of Women (6) 15 15 12 12 12 Controller 183 183 180 167 173 Council 108 108 108 336 367 Employee Relations Board 8 8 8 3 3 General Services 1,861 1,871 1,923 2,236 2,337 Human Relations Commission (6) 26 24 21 16 16 Human Services -- -- -- -- -- Information Technology Agency 825 764 748 739 734 Mayor 74 74 66 132 154 Neighborhood Empowerment (2) 52 68 62 40 47 Office of Finance (3) 360 343 350 351 358 Personnel 405 394 440 478 492 Treasurer (3) -- 39 39 34 38

Protection of Persons and PropertyAnimal Services 309 304 296 311 352 Building & Safety 859 858 835 864 944 Emergency Preparedness/Management (4) 14 14 14 17 17 Fire-Civilian 320 321 322 333 365 Fire-Sworn 3,460 3,530 3,423 3,572 3,673 Police- Civilian 3,609 3,595 3,592 3,166 3,337 Police- Sworn 10,190 10,212 10,213 9,310 9,509

Public WorksPublic Works- Accounting (5) -- -- -- -- -- Public Works- Board of Commissioners (5) 59 59 153 160 161 Public Works- Contract Administration 356 347 335 328 363 Public Works- Engineering 972 969 950 1,000 998 Public Works- Management-Employee Services (5) 107 109 -- -- -- Public Works- Street Lighting 218 224 231 227 223 Public Works- Street Services 1,318 1,318 1,285 1,363 1,390

Health and SanitationEnvironmental Affairs (1) 43 43 43 34 31 Public Works- Sanitation 2,652 2,695 2,762 2,632 2,691

Transportation 1,527 1,524 1,521 1,559 1,637

Continued…

Fiscal Year

- 348 -

CITY OF LOS ANGELES

Number of City Government Employees by Function/ProgramFull-Time Equivalent - (Continued)


2008 2009 2010 2011 2012GOVERNMENTAL ACTIVITIES

General GovernmentCity Administrative Officer 128 128 107 103 102 City Attorney 978 986 885 870 825 City Clerk (1) 146 140 99 96 98 City Ethics Commission 26 26 22 18 17 Commission on the Status of Women (6) 9 2 -- -- -- Controller 185 184 156 157 152 Council 355 350 338 321 334 Employee Relations Board 3 4 3 3 3 General Services 2,302 2,273 1,881 1,707 1,630 Human Relations Commission (6) 15 10 -- -- -- Human Services (6) -- -- 1 -- -- Information Technology Agency 728 714 582 522 488 Mayor 163 189 195 171 175 Neighborhood Empowerment (2) 42 42 19 18 18 Office of Finance (3) 353 372 324 326 345 Personnel 495 477 384 371 380 Treasurer (3) 38 39 34 30 --

Protection of Persons and PropertyAnimal Services 379 366 343 319 311 Building & Safety 992 958 782 719 723 Emergency Preparedness/Management (4) 23 27 21 24 22 Fire-Civilian 366 362 298 296 298 Fire-Sworn 3,730 3,708 3,562 3,459 3,317 Police- Civilian 3,278 3,256 2,877 2,824 2,783 Police- Sworn 9,704 9,973 9,878 9,810 9,875

Public WorksPublic Works- Accounting (5) -- -- -- -- -- Public Works- Board of Commissioners (5) 155 131 94 93 92 Public Works- Contract Administration 371 358 306 293 287 Public Works- Engineering 971 932 738 737 718 Public Works- Management-Employee Services (5) -- -- -- -- -- Public Works- Street Lighting 210 215 198 200 192 Public Works- Street Services 1,350 1,327 1,073 1,011 982

Health and SanitationEnvironmental Affairs (1) 31 28 18 -- -- Public Works- Sanitation 2,684 2,701 2,427 2,430 2,333

Transportation 1,572 1,597 1,414 1,355 1,307

Continued…

Fiscal Year

- 349 -

CITY OF LOS ANGELES



2003 2004 2005 2006 2007GOVERNMENTAL ACTIVITIES (Continued)

Cultural and Recreational ServicesCultural Affairs 97 94 74 60 66 El Pueblo de los Angeles Historical Monument 53 58 25 20 17 Library 1,184 1,194 1,138 781 819 Recreation and Parks 2,037 2,053 1,905 1,929 2,070 Zoo 241 272 256 223 237

Community DevelopmentAging 48 48 42 51 50 Commission for Children, Youth and Their Families (6) 42 37 24 60 53 Community Development Department 281 274 273 291 265 Disability 26 26 23 22 22 Los Angeles Housing 379 408 403 464 528 Planning 323 323 304 280 283

TOTAL GOVERNMENTAL ACTIVITIES 35,771 35,919 35,499 34,846 36,101

BUSINESS-TYPE ACTIVITIESAirports (7) 2,841 3,048 3,300 3,454 3,630 Harbor (7) 594 634 659 717 806 Los Angeles Convention Center 208 197 163 154 155 Water and Power 8,108 8,101 8,029 8,119 8,241

TOTAL BUSINESS-TYPE ACTIVITIES 11,751 11,980 12,151 12,444 12,832

PENSION SYSTEMSCity Employees Retirement System 103 109 110 113 125 Fire and Police Pension System 78 84 86 88 97

TOTAL PENSION FUNDS 181 193 196 201 222

GRAND TOTAL 47,703 48,092 47,846 47,491 49,155

Continued…

Fiscal Year

- 350 -

CITY OF LOS ANGELES



2008 2009 2010 2011 2012GOVERNMENTAL ACTIVITIES (Continued)

Cultural and Recreational ServicesCultural Affairs 67 57 45 39 34 El Pueblo de los Angeles Historical 19 18 15 11 10 Library 828 833 699 664 655 Recreation and Parks 1,980 1,904 1,587 1,478 1,429 Zoo 220 211 186 201 205

Community DevelopmentAging 49 45 42 41 41 Commission for Children, Youth and Their Families (6) 53 53 -- -- -- Community Development Department 254 236 270 266 268 Disability 20 19 16 14 11 Los Angeles Housing 528 526 528 544 531 Planning 300 297 242 237 234

TOTAL GOVERNMENTAL ACTIVITIES 36,100 36,074 32,689 31,778 31,225

BUSINESS-TYPE ACTIVITIESAirports (7) 3,804 3,747 3,535 3,535 3,552 Harbor (7) 935 971 948 959 963 Los Angeles Convention Center 156 150 111 112 109 Water and Power 8,592 9,210 9,200 9,065 8,867

TOTAL BUSINESS-TYPE ACTIVITIES 13,487 14,078 13,794 13,671 13,491

PENSION SYSTEMSCity Employees Retirement System 131 134 126 124 124 Fire and Police Pension System 103 105 98 105 107

TOTAL PENSION FUNDS 234 239 224 229 231

GRAND TOTAL 49,821 50,391 46,707 45,678 44,947

(1) In fiscal year 2011, Environmental Affairs Department was eliminated. Its resources and functions were transferred to

the Department of Public Works Bureau of Sanitation, Building and Safety, and Transportation.(2) The Department of Neighborhood Empowerment was created by Ordinance in fiscal year 2000 .(3) The Treasurer was transferred out of Finance and restored as its own department in fiscal year 2004.

Both departments were consolidated in fiscal year 2012.(4) Emergency Preparedness was created as a separate department in fiscal year 2001. In November 2007, name changed

to Emergency Management Department.(5) In fiscal year 2002, Public Works- Accounting and Management Employee Services were consolidated. In fiscal year 2005,

their resources and functions were transferred to the Board of Public Works Commissioners.(6) In fiscal year 2009, Commission on the Status of Women, Commission for Children, Youth and Familiess and Human

Relations Commission were consolidated.(7) Certain changes were made to conform to the FY2012 presentation.

Sources: Prior to FY 2006: City of Los Angeles Detail of Department Programs and data from the Fire, Airports, Harbor,

Water and Power, Fire and Police Pension, and City Employees Retirement System.

FY 2006 through 2010: Data restated to conform with Office fo the Controller Full-Time Active Employee Count

as of the last pay period of the fiscal year, except those of Harbor and Water and Power.

Fiscal Year

- 351 -

2003 2004 2005 2006 2007

General Government

City Attorney

Criminal Prosecution ProgramCombined criminal jury and court trials 716 584 549 575 699 Consumer cases concluded (3) 198 707 -- -- --Consumer protection-cases reviewed (3) -- -- 194 200 230 Consumer protection-consumer complaints (3) -- -- 302 500 500 Environmental cases concluded 60 30 250 375 450 Housing/rent control cases concluded 193 221 320 400 176

Whistle-blower complaints and investigations processed 400 410 490 400 723 Investigations resolved within 2 years (%) -- -- -- -- --

Information Technology Agency

3-1-1 Call Center Operations (4)

Number of calls received 356,079 403,386 611,982 890,233 998,218 Number of wireless calls -- 39,424 60,191 178,964 286,772 Average wait time per caller (in sec) -- -- -- -- --

Total tax accounts audited 3,549 4,322 4,187 5,545 5,880 Revenue enhancement unit investigations (5) 14,901 19,840 24,463 27,738 52,441 Refund claims processed 14,100 13,804 13,555 14,240 19,374 Collections from Citywide Collection Unit ($ in 000's) -- -- -- -- -- Annual Business Tax renewal e-filings -- -- -- -- --

Building Services ProgramRecycling Operations

Tonnage Collected 1,503 1,650 1,637 1,600 1,700 Special Events

Filmings coordinated 56 75 75 101 82 Filmings and Special Events coordinated -- -- -- -- --

Building Maintenance and RepairSquare feet of buildings 15,146,677 15,626,000 16,228,700 16,370,578 16,867,229 Preventative maintenance orders completed (%) -- -- -- -- --

Neighborhood councils certified (6) 33 15 1 2 2

Protection of Persons and Property

Animal Shelter Operations ProgramAnimals impounded (7) 62,704 59,065 57,923 55,652 55,183 Animals adopted 18,708 18,741 18,879 19,592 21,017 Animals euthanized 34,002 29,554 25,029 22,333 20,085 Animals which die while in City's care (%) -- -- -- -- --

Animal Licensing and Permitting OperationsDog licenses issued 147,144 133,202 131,022 126,337 121,277

Building Permits Issued 140,120 144,000 141,000 141,403 139,220 Response to inspection requests within 24 hrs (%) -- -- -- -- --

Fire

Fire Suppression ProgramActual Fires

Structure fires 2,436 2,431 3,222 3,406 3,327 Non structure fires 8,866 8,362 6,303 9,358 10,060 Response within 5 mins of notification (%) -- 85 87 86 94

Continued…

Building and Safety

General Services

Neighborhood Empowerment

Animal Services

Function/Program

City Ethics Commission

Office of Finance

Fiscal Year

Operating Indicators by Function/Program

CITY OF LOS ANGELES


- 352 -

2008 2009 (1) 2010 (2) 2011 (1) 2012

General Government

City Attorney

Criminal Prosecution ProgramCombined criminal jury and court trials 769 845 632 477 315Consumer cases concluded (3) -- -- -- -- --Consumer protection-cases reviewed (3) 265 300 170 160 159 Consumer protection-consumer complaints (3) 550 575 400 400 400 Environmental cases concluded 542 600 350 312 488 Housing/rent control cases concluded 300 250 395 402 435

Whistle-blower complaints and investigations processed 450 500 -- -- --Investigations resolved within 2 years (%) 85 92 63 93 90

Information Technology Agency

3-1-1 Call Center Operations (4)

Number of calls received 1,257,629 1,402,658 1,417,801 1,341,000 1,211,000 Number of wireless calls 335,979 393,626 525,000 561,000 535,000 Average wait time per caller (in sec) 53 40 140 180 170

Total tax accounts audited 6,677 7,771 6,297 5,567 5,146 Revenue enhancement unit investigations (5) 71,234 83,611 93,072 133,009 107,696 Refund claims processed 26,125 27,934 15,591 16,969 10,010 Collections from Citywide Collection Unit ($ in 000's) 25,700 30,184 28,332 27,281 31,019 Annual Business Tax renewal e-filings 70,000 80,000 146,713 182,801 200,000

Building Services ProgramRecycling Operations

Tonnage Collected 1,700 1,700 -- -- --Special Events

Filmings coordinated 103 70 65 75 52 Filmings and Special Events coordinated -- 3,318 2,579 1,887 1479

Building Maintenance and RepairSquare feet of buildings 17,775,611 19,067,108 19,606,408 19,691,358 19,756,358 Preventative maintenance orders completed (%) -- 73 78 77 74

Neighborhood councils certified (6) 4 1 -- 4 2


Animal Shelter Operations ProgramAnimals impounded (7) 57,804 65,445 64,333 64,417 64,952 Animals adopted 23,608 28,154 26,952 29,525 30,414 Animals euthanized 19,942 24,742 25,298 24,632 23,955 Animals which die while in City's care (%) -- 1.50 1.40 1.40 --

Animal Licensing and Permitting OperationsDog licenses issued 114,531 121,138 116,500 121,817 123,080

Building Permits Issued 127,700 110,992 115,213 115,694 121,140 Response to inspection requests within 24 hrs (%) 100 99 100 98 98

Fire

Fire Suppression ProgramActual Fires

Structure fires 3,800 4,026 3,734 4,172 4,871 Non structure fires 7,400 12,173 11,640 10,686 10,991 Response within 5 mins of notification (%) 94 95 93 94 --

Continued…

Building and Safety

General Services

Neighborhood Empowerment

Animal Services

Function/Program

City Ethics Commission

Office of Finance

Fiscal Year

Operating Indicators by Function/Program - (Continued)


CITY OF LOS ANGELES

- 353 -

2003 2004 2005 2006 2007

Protection of Persons and Property - (Continued)

Fire - (Continued)

Emergency responsesFires (includes automatic alarms) 114,346 118,394 131,293 137,687 137,309 Hazardous conditions 4,766 4,932 5,464 5,730 5,567 Rescues and others 25,057 25,934 28,808 30,211 35,773 Helicopter flight hours for brush and structure fires 526 560 490 652 575

Arson Investigation and Counter-TerrorismClosure rate in criminal fires investigation (%) -- -- -- -- --

Emergency Ambulance Services

Emergency medical responses byParamedic ambulances 168,846 180,927 175,423 249,666 252,426 EMT ambulances 87,806 93,856 91,001 100,995 116,823 Paramedic fire resources 53,700 57,671 55,916 77,088 77,467 EMT fire resources 217,457 232,944 225,857 259,582 266,438 Response to emergencies within 5 mins (%) -- 70 71 66 86

Police

Patrol ProgramPart I crimes reported 190,368 177,681 151,552 144,100 132,664 Selected Part II crimes reported 109,028 72,513 67,977 67,400 108,246 Total arrests 151,285 168,153 175,666 185,000 171,390 Response to emergency calls (in minutes) -- -- -- -- --

Traffic Control ProgramTraffic collisions investigated 48,357 47,798 51,643 54,225 52,190 Fatal and injury traffic accidents 23,647 23,270 24,776 26,014 23,755 Traffic citations issued 516,814 421,582 443,990 466,190 501,964

Technical Support ProgramComplaint board calls received (911) 1,852,500 1,817,331 1,752,555 1,726,179 2,104,658

Specialized Crime Suppression & InvestigationNumber of backlogged fingerprint cases reduced -- -- -- -- -- Number of backlogged rape kits reduced -- -- -- -- --

Public Works

Graffiti eradicated/square footage (per 1,000 sq. ft.) (8) 29,375 22,907 21,441 22,000 30,503

Street Services

Weed Abatement, Brush and Debris Clearance Land cleared/cleaned-private (million sq ft) 18 10 4 7 7 Land cleared/cleaned-public (million sq ft) 18 19 18 12 14 Debris removed (cubic yards) 245,000 276,696 180,000 237,474 206,051 Response time to clear illegal dumping (days) -- -- -- -- --

Street Cleaning ProgramCompletion frequency-posted routes 97% 100% 97% 98% 97%

Goal-posted routes 97% 97% 97% 98% 97%Completion frequency-nonposted routes (weeks) 4 4 4 4 4

Goal-nonposted routes (weeks) 4 4 4 4 4

Street Tree and Parkway Maintenance ProgramTrees planted - City forces & Non-profits (MTLA) 4,200 4,068 4,200 3,889 5,578 Trees trimmed - City forces (broadhead) 40,000 41,000 40,000 44,514 48,555 Trees trimmed in City's urban forest -- -- -- -- --

Street Resurfacing and Reconstruction ProgramStreets resurfaced (miles) 232 123 135 234 213 Bus pads constructed 250 97 100 46 51 Access ramps constructed 920 1,017 1,200 893 570 Sidewalks repaired (miles) 130 63 52 59 51

Continued…

Function/Program

Board of Commissioners

CITY OF LOS ANGELES


Fiscal Year


- 354 -

2008 2009 (1) 2010 (2) 2011 (1) 2012

Protection of Persons and Property - (Continued)

Fire - (Continued)

Emergency responsesFires (includes automatic alarms) 137,687 138,200 114,121 118,986 122,492 Hazardous conditions 5,730 5,700 4,636 5,209 4,852 Rescues and others 30,211 35,500 38,247 37,834 39,324 Helicopter flight hours for brush and structure fires 660 726 645 609 745

Arson Investigation and Counter-TerrorismClosure rate in criminal fires investigation (%) 65 71 69 70 40

Emergency Ambulance Services

Emergency medical responses byParamedic ambulances 260,000 262,000 249,408 252,587 250,362 EMT ambulances 125,000 120,000 127,859 124,439 134,195 Paramedic fire resources 78,000 84,000 117,449 126,506 125,196 EMT fire resources 235,000 260,000 153,478 145,559 166,684 Response to emergencies within 5 mins (%) 87 90 88 86 --

Police

Patrol ProgramPart I crimes reported 124,000 115,000 110,827 106,827 104,604 Selected Part II crimes reported 95,000 84,000 77,325 74,251 85,938 Total arrests 167,000 168,000 151,174 160,480 162,698 Response to emergency calls (in minutes) -- 7 7 6 6

Traffic Control ProgramTraffic collisions investigated 55,000 58,000 45,105 44,725 45,446 Fatal and injury traffic accidents 25,000 26,000 20,408 18,448 21,216 Traffic citations issued 527,000 553,000 594,193 564,432 504,312

Technical Support ProgramComplaint board calls received (911) 2,303,000 2,520,000 3,557,626 2,140,387 2,269,872

Specialized Crime Suppression & InvestigationNumber of backlogged fingerprint cases reduced 3,811 6,778 9,669 5,492 4,342 Number of backlogged rape kits reduced 7,240 2,740 1,332 1,097 -

Public Works

Graffiti eradicated/square footage (per 1,000 sq. ft.) (8) 30,500 28,300 32,000 35,700 30,100

Street Services

Weed Abatement, Brush and Debris Clearance Land cleared/cleaned-private (million sq ft) 9.0 9.8 7.1 6.5 6.5 Land cleared/cleaned-public (million sq ft) 14.5 15.2 11.0 10.0 7.2 Debris removed (cubic yards) 201,305 183,379 157,886 125,000 95,505 Response time to clear illegal dumping (days) -- 5 5 -- --

Street Cleaning ProgramCompletion frequency-posted routes 97% 97% 95% 93% 97%

Goal-posted routes 97% 97% 97% 97% 97%Completion frequency-nonposted routes (weeks) 3.9 4.0 5.8 13.0 14.5

Goal-nonposted routes (weeks) 4.0 4.0 4.0 4.0 4.0 - 8.0

Street Tree and Parkway Maintenance ProgramTrees planted - City forces & Non-profits (MTLA) 8,431 8,943 4,677 527 3,239 Trees trimmed - City forces (broadhead) 45,637 41,804 21,068 2,251 2,046 Trees trimmed in City's urban forest 51,704 75,504 32,211 13,351 22,226

Street Resurfacing and Reconstruction ProgramStreets resurfaced (miles) 179 200 149 174 236 Bus pads constructed 40 76 36 144 144 Curb ramps constructed 1,094 1,044 1,556 1,829 1,724 Sidewalks repaired (miles) 59 59 -- -- --

Continued…

Function/Program

Board of Commissioners

Fiscal Year

CITY OF LOS ANGELES



- 355 -

2003 2004 2005 2006 2007

Health and Sanitation

Sanitation

Maintenance and Operation of Flood Control Facilities Catch Basin Cleaning 76,668 83,184 87,239 123,521 113,068

Watershed ProtectionClean 90,000 catch basins annually (%) -- -- -- -- --

Maintenance and Operation of Wastewater Facilities HTP Wastewater Treatment (MGD) 342 339 358 337 342 HTP Wastewater Reclaimed (MGD) 25 23 24 23 32 TITP Wastewater Treatment (MGD) 16 15 16 16 16 TITP Wastewater Reclaimed (MGD) 1 1 1 1 3 LAG Wastewater Treatment (MGD) 16 16 16 13 21 LAG Water Reclaimed (MGD) 3 4 3 4 4 DCT Wastewater Treatment (MGD) 61 60 57 49 54 DCT Water Reclaimed (MGD) 24 25 26 25 25 WCSD Sewer Cleaning - miles of sewers cleaned (10) 2,509 2,832 3,627 4,797 4,930 Maintain 3-yr rolling avrg of 60 miles of sewers (%) -- -- -- -- --

Clean WaterClean 60,000 pipe reaches as mandated (%) -- -- -- -- --

Solid ResourcesImplement LAUSD Blue Bin Recycling Program (%) -- -- -- -- -- Convert refuse collection fleet to clean fuels (%) -- -- -- -- -- Increase truck fleet conversion to clean fuel (no. of trucks) -- -- -- -- -- Maintain a baseline 99.5% of refuse collected on schedule (%) -- -- -- -- 99.92

Household Refuse Collection ProgramTons Collected:

Refuse and Yard Trimmings Refuse 953,266 914,139 1,009,618 955,092 932,196 Yard Trimmings 471,669 491,422 495,387 503,646 507,100 Recyclables 191,532 186,992 193,941 191,024 181,215 Bulky Items 33,267 29,740 31,150 33,038 33,047 Recycling Contamination 72,945 76,754 85,044 81,868 85,614

Transportation

Transportation

Franchise and Taxicab RegulationBandit drivers arrested 399 339 400 211 1,116 Bandit vehicles impounded 337 297 390 193 388

Transit Capital ProgrammingIncrease in bicycle lane miles -- -- -- -- -- Increase in bicycle sharrow miles -- -- -- -- -- Active traffic congestion relief projects -- -- -- -- --

Transportation System Engineering ProgramSpeed humps/tables constructed 433 550 282 356 481

Transportation System OperationsRed curb miles reinstalled/installed 358 460 500 526 729 Thermoplastic longline striping installed/ reinstalled (previously lane miles) 748 760 850 883 820

Signs Replaced (9) 26,674 20,000 21,000 30,000 -- Signs Maintained/Replaced -- -- -- -- 116,414 Temporary Signs installed/removed -- -- -- -- 360,573 Number miles of lane markings installed -- -- -- -- --

Parking Management and Intersection ControlCitations written 3,248,081 3,152,691 3,101,079 3,205,565 3,102,611 Citations written per officer per eight-hour shift 35 36 36 37 35 Peak hour tows and other tows 10,549 10,000 10,000 18,359 8,813 Crossing guard assignments 511 518 525 501 486 Number of hours of intersection control 32,242 28,960 84,262 56,837 79,415 Abandoned vehicles abated 135,491 133,219 131,768 122,731 142,041 Abandoned vehicles impounded 11,719 12,036 9,516 5,577 8,813

Continued…

Function/Program

Fiscal Year

CITY OF LOS ANGELES



- 356 -

2008 2009 (1) 2010 (2) 2011 (1) 2012


Sanitation

Maintenance and Operation of Flood Control Facilities Catch Basin Cleaning 112,300 115,000 87,051 63,070 68,750

Watershed ProtectionClean 90,000 catch basins annually (%) 119 113 70 76 --

Maintenance and Operation of Wastewater Facilities HTP Wastewater Treatment (MGD) 350 350 305 297 305 HTP Wastewater Reclaimed (MGD) 35 35 35 26 28 TITP Wastewater Treatment (MGD) 16 16 16 15 16 TITP Wastewater Reclaimed (MGD) 4 5 4 2 1 LAG Wastewater Treatment (MGD) 20 20 20 20 20 LAG Water Reclaimed (MGD) 6 6 8 8 5 DCT Wastewater Treatment (MGD) 62 65 52 52 57 DCT Water Reclaimed (MGD) 30 32 34 32 28 WCSD Sewer Cleaning - miles of sewers cleaned (10) 4,981 5,000 5,903 6,093 6,750 Maintain 3-yr rolling avrg of 60 miles of sewers (%) -- 129 100 100 --

Clean WaterClean 60,000 pipe reaches as mandated (%) 200 194 216 233 --

Solid Resources Implement LAUSD Blue Bin Recycling Program (%) 54 69 75 85 -- Convert refuse collection fleet to clean fuels (%) 44 61 66 66 -- Increase truck fleet conversion to clean fuel (no. of trucks) -- -- -- -- 544Maintain a baseline 99.5% of refuse collected on schedule (%) 99.96 99.95 99.95 99.95 99.95

Household Refuse Collection ProgramTons Collected:

Refuse and Yard Trimmings Refuse 1,034,429 1,034,429 867,113 882,005 851,434 Yard Trimmings 545,467 555,049 474,657 492,341 470,527 Recyclables 206,369 170,000 141,314 148,194 143,338 Bulky Items 33,146 33,146 33,330 32,479 27,640 Recycling Contamination 87,014 85,000 69,976 58,806 54,064

Transportation

Transportation

Franchise and Taxicab RegulationBandit drivers arrested 1,427 1,144 1,036 1,045 991 Bandit vehicles impounded 446 1,061 812 908 916

Transit Capital ProgrammingIncrease in bicycle lane miles 4 7 10 17 51 Increase in bicycle sharrow miles 21 Active traffic congestion relief projects 43 58 45 59 78

Transportation System Engineering ProgramSpeed humps/tables constructed 382 374 -- -- 38

Transportation System OperationsRed curb miles reinstalled/installed 523 611 540 466 470 Thermoplastic longline striping installed/reinstalled (previously lane miles) 717 617 632 540 925

Signs Replaced (9) -- -- -- -- -- Signs Maintained/Replaced 96,885 108,032 89,415 63,019 66,556 Temporary Signs installed/removed 383,005 365,389 347,990 414,268 423,759 Number miles of lane markings installed -- -- -- -- 255

Parking Management and Intersection ControlCitations written 2,806,712 2,784,351 2,587,925 2,461,529 2,522,302 Citations written per officer per eight-hour shift 31 30 31 32 33 Peak hour tows and other tows 54,231 55,057 44,334 41,244 48,648 Crossing guard assignments 486 486 486 486 492 Number of hours of intersection control 90,478 72,618 42,842 27,622 30,370 Abandoned vehicles abated 139,325 116,967 100,589 102,911 74,270 Abandoned vehicles impounded 8,602 6,972 3,546 2,924 2,776

Continued…

Function/Program

Fiscal Year

CITY OF LOS ANGELES



- 357 -

2003 2004 2005 2006 2007

Transportation - (Continued)Transit Operations

Fixed transit routes in service 55 57 57 55 55 Fixed transit route passenger trips 24,997,011 29,175,688 30,711,799 30,630,303 29,808,908 Total transit vehicle passenger trips 25,154,903 29,368,124 30,851,486 30,765,034 29,990,787

Parking Operations Support and AdjudicationCitation reviews completed within 21 days (%) -- -- -- -- -- Collection rate of citations issued in the year (%) -- -- -- -- --

Traffic Control DevicesTraffic control signals maintained (%) -- -- -- -- -- Number Traffic Signals Repaired -- -- -- -- -- Number New Signals (Traffic and Pedestrian) Installed -- -- -- -- --

Mass Transit Information ServicesShuttle bus transit ridership per hour 45 49 48 48 46

Cultural and Recreational Services

Cultural Affairs

Community ArtsArt exhibitions presented 66 66 70 70 70 Special events/festivals 104 104 104 104 104

Performing ArtsMusic/theatre programs presented 635 375 292 400 390

City ArtsArt class enrollment -- -- -- -- -- Theater attendance -- -- -- -- --

El Pueblo

Art exhibitions presented 8 8 10 10 12 Special events/festivals held 32 35 40 40 52 Children's art workshops held 130 100 110 110 110 Cultural and historical tours given 1,100 1,200 1,400 1,400 1,450 Historic sites maintained 4 5 7 7 7 History and Museums

Tours provided to the public -- -- -- -- -- Visitors to educational and cultural programs -- -- -- -- --

Library

Public Library Services ProgramItems circulated 14,868,262 15,333,869 15,744,303 15,639,485 15,800,000 Books received:

Volumes 368,255 275,000 200,000 175,000 560,332 Books cataloged 61,625 56,294 50,915 50,000 50,000 Registered Borrowers 1,571,346 1,496,250 1,424,922 1,429,345 1,440,000 Number of people visiting library facilities 12,046,053 13,533,822 14,011,932 14,032,869 16,003,909 Number of library cardholders -- -- -- -- -- Number of volunteers for special programs -- -- -- -- -- Attendance level for cultural programming -- -- -- -- -- Number of library materials checked out -- -- -- -- --

Convention Center

Scheduled exhibit hall events 75 83 126 130 175 Client Revenue Services

Repeat events hosted (#) -- -- -- -- 279

Zoo

Educational ExhibitsAttendance 1,516,067 1,389,639 1,396,538 1,523,469 1,564,674

AdmissionsNumber of group reservations processed -- -- -- -- --

Recreation and Parks

Educational ExhibitsObservatory

Attendance 195,000 -- -- -- 415,000

Continued…

Function/Program

Fiscal Year

CITY OF LOS ANGELES



- 358 -

2008 2009 (1) 2010 (2) 2011 (1) 2012

Transportation - (Continued)Transit Operations

Fixed transit routes in service 54 56 55 45 45 Fixed transit route passenger trips 30,533,399 31,675,393 30,368,887 27,356,994 23,736,486 Total transit vehicle passenger trips 30,724,278 31,860,898 30,535,921 27,466,279 23,824,821

Parking Operations Support and AdjudicationCitation reviews completed within 21 days (%) 58 80 80 80 81 Collection rate of citations issued in the year (%) -- 68.03 67.50 71 72

Traffic Control DevicesTraffic control signals maintained (%) 87 90 94 24 24 Number Traffic Signals Repaired -- -- -- -- 8,832 Number New Signals (Traffic and Pedestrian) Installed -- -- -- -- 105

Mass Transit Information ServicesShuttle bus transit ridership per hour 46 47 46 48 39


Cultural Affairs

Community ArtsArt exhibitions presented 70 52 46 27 52 Special events/festivals 104 33 30 18 15

Performing ArtsMusic/theatre programs presented -- -- -- -- --

City ArtsArt class enrollment -- 16,850 15,000 13,000 13,500 Theater attendance -- 120,000 121,014 115,000 128,625

El Pueblo

Art exhibitions presented 9 10 8 6 8 Special events/festivals held 55 55 67 89 85 Children's art workshops held 130 130 104 109 105 Cultural and historical tours given 1,450 1,500 1,260 1,116 1,098 Historic sites maintained -- -- -- -- -- History and Museums

Tours provided to the public 962 1,000 967 1,042 936 Visitors to educational and cultural programs 396,210 425,000 453,576 485,340 502,268

Library

Public Library Services ProgramItems circulated 15,900,000 15,925,000 16,524,292 15,144,804 15,337,032 Books received:

Volumes 225,389 -- 271,499 186,988 229,719 Books cataloged -- -- 38,495 48,304 49,495 Registered Borrowers 1,445,000 1,475,000 1,368,354 1,231,764 1,076,578 Number of people visiting library facilities 16,100,000 16,400,000 16,041,407 12,673,629 13,821,289 Number of library cardholders 1,331,240 1,350,000 1,375,000 1,300,000 1,076,578 Number of volunteers for special programs 2,373 2,600 2,800 2,964 4,524 Attendance level for cultural programming 279,560 282,380 283,000 301,387 332,937 Number of library materials checked out 17,234,888 17,250,000 17,300,000 16,000,000 15,337,032

Convention Center

Scheduled exhibit hall events 180 161 161 149 137 Client Revenue Services

Repeat events hosted (#) 339 274 297 304 281

Zoo

Educational ExhibitsAttendance 1,602,171 1,556,162 1,459,080 1,538,516 1,706,113

AdmissionsNumber of group reservations processed 2,585 2,521 2,239 1,989 2,955

Recreation and Parks

Educational ExhibitsObservatory

Attendance 641,000 840,151 902,489 909,668 969,479

Continued…

Fiscal Year

Function/Program

CITY OF LOS ANGELES



- 359 -

2003 2004 2005 2006 2007

Cultural and Recreational Services - (Continued)Recreational Opportunities

AquaticsPool Attendance 2,650,000 2,300,000 1,389,678 1,298,123 1,292,655 Attendance for recreational swim -- -- -- -- --

CampsCamper days 48,000 48,000 52,652 48,454 50,000

Municipal SportsTeam sports participants 71,400 72,000 73,307 76,498 74,000 Number of teams 5,200 5,200 4,864 5,099 5,200

Senior Citizens ServicesSr. Citizens Clubs 180 180 155 165 170 Number of senior club members -- -- -- -- --

Youth Services and Intervention ProgrammingYouth (ages 5-15) in organized sports programs -- -- -- -- --

Other RecreationOccupancy at child care facilities (%) -- -- -- -- --


Aging

Senior Social Services ProgramProp A - One-way transportation trips 143,567 133,779 145,000 130,200 133,807 Congregate meals served 940,430 891,128 964,196 906,858 859,169 Homebound meals served 750,431 845,287 839,460 845,904 816,581 Meals served vs. Meals contracted (%) -- -- -- -- --

HousingHousing Preservation and Production Programs

Residential units preserved under the Housing Rehabilitation Program 267 350 356 310 55

Units financed by GAP under the Homeownership Program - Low Income 160 250 90 125 120 Units financed by MRB under the Homeownership

Program 17 90 90 120 95 Homeownership and Preservation

Number of housing units made lead safe -- -- -- -- -- Compliance Monitoring

Affordable units monitored 9,000 15,000 15,000 17,000 17,476 Code Enforcement Program

Periodic inspections (units) 146,985 150,000 153,000 180,000 180,000 Multi-family unit inspected every 4 years -- -- -- -- -- Urgent repair referrals 550 500 600 650 497

Rent ProgramRent adjustments processed 517 563 510 550 575 Rental units registered 554,000 565,000 600,000 600,000 518,658 Tenant complaints processed 6,155 8,000 8,000 8,000 7,404

Disability

Constituents served 703 702 659 720 1,001 Counseling sessions 120 202 107 100 103 Crisis intervention 105 90 55 80 80 ADA Compliance

Days to respond for interpreter services -- -- -- -- -- AIDS Coordination

HIV Testing and counseling -- -- -- -- --

Business Type Activities

Airports

Aircraft movements (thousands) 1,292 1,280 1,270 1,220 1,225 Passengers (millions) 62 65 68 69 69 Air cargo (thousand tons) 2,590 2,661 2,718 2,677 2,631

Continued…

Fiscal Year

CITY OF LOS ANGELES



Function/Program

- 360 -

2008 2009 (1) 2010 (2) 2011 (1) 2012

Cultural and Recreational Services - (Continued)Recreational Opportunities

AquaticsPool Attendance 1,500,000 1,208,758 1,287,602 1,230,362 1,327,220 Attendance for recreational swim 2,849,338 2,811,807 3,296,327 2,635,207 2,696,366

CampsCamper days 52,000 39,513 34,060 18,900 56,204

Municipal SportsTeam sports participants 76,000 76,543 75,500 72,502 94,141 Number of teams 5,000 5,248 5,210 5,110 6,330

Senior Citizens ServicesSr. Citizens Clubs 175 125 123 132 109 Number of senior club members 13,317 14,125 15,800 10,770 12,393

Youth Services and Intervention ProgrammingYouth (ages 5-15) in organized sports programs 76,000 64,328 53,422 55,752 61,947

Other RecreationOccupancy at child care facilities (%) 68 69 59 95 97


Aging

Senior Social Services ProgramProp A - One-way transportation trips 142,152 134,849 135,057 134,412 128,300 Congregate meals served 835,229 840,605 845,797 844,074 834,063 Homebound meals served 817,630 791,422 809,649 781,553 756,462 Meals served vs. Meals contracted (%) 94 100 98 98 99

HousingHousing Preservation and Production Programs

Residential units preserved under the Housing Rehabilitation Program 29 29 -- -- --

Units financed by GAP under the Homeownership Program - Low Income 133 57 -- -- --Units financed by MRB under the Homeownership

Program -- -- -- -- --Homeownership and Preservation

Number of housing units made lead safe 135 138 80 41 195Compliance Monitoring

Affordable units monitored 18,000 18,000 15,121 20,684 20,226 Code Enforcement Program

Periodic inspections (units) 180,000 -- -- -- --Multi-family unit inspected every 4 years -- 183,741 183,741 180,000 189,771 Urgent repair referrals 564 564 -- -- --

Rent ProgramRent adjustments processed 525 550 -- -- --Rental units registered 518,000 518,000 -- -- --Tenant complaints processed 8,100 8,900 5,632 6,408 5,426

Disability

Constituents served 1,000 1,000 800 800 800 Counseling sessions 100 100 80 80 80 Crisis intervention 80 80 -- -- --ADA Compliance

Days to respond for interpreter services 2 2 2 -- --AIDS Coordination

HIV Testing and counseling 2,400 2,500 3,000 -- --

Business Type Activities

Airports

Aircraft movements (thousands) 1,249 1,049 1,025 989 976 Passengers (millions) 69 62 63 65 67 Air cargo (thousand tons) 2,519 2,018 2,242 2,296 2,366

Continued…

Fiscal Year

CITY OF LOS ANGELES



Function/Program

- 361 -

2003 2004 2005 2006 2007

Business Type Activities - (Continued)

Harbor

Miles of waterfront 43 43 43 43 43 Inbound tonnage (million tons) 94 104 102 113 118 Outbound tonnage (million tons) 53 58 60 69 72 Containerized cargo volume (in million of TEUs) 7 7 7 8 9 Vessel arrivals 2,845 2,812 2,646 2,771 2,920 Cruise passengers 1,057,293 803,308 1,097,204 1,205,947 1,194,984

Power

Kilowatt hours sold (billions) 24 25 25 26 26 Customers-average number (thousands) 1,421 1,428 1,437 1,445 1,448 Energy production (billion kwh) 27 29 29 30 28 Net system capability (megawatts) 8 7 7 7 7

Water

Gallons sold (billions) 193 203 191 194 207 Customers-average number (thousands) 659 662 664 670 667 Net water supply (billions of gallons) 217 225 266 203 216

Continued…

Function/Program

Fiscal Year

CITY OF LOS ANGELES



- 362 -

2008 2009 (1) 2010 (2) 2011 (1) 2012

Business Type Activities - (Continued)

Harbor

Miles of waterfront 43 43 43 43 43 Inbound tonnage (million tons) 105 94 88 94 98 Outbound tonnage (million tons) 65 66 67 68 75 Containerized cargo volume (in million of TEUs) 8 7 7 8 8 Vessel arrivals 2,467 2,322 2,124 2,236 2,100 Cruise passengers 1,191,449 990,965 802,899 667,434 515,827

Power

Kilowatt hours sold (billions) 26 25 26 25 25 Customers-average number (thousands) 1,446 1,452 1,447 1,461 1,471 Energy production (billion kwh) 29 29 28 27 28 Net system capability (megawatts) 7 7 7 7 7

Water

Gallons sold (billions) 199 189 166 169 170 Customers-average number (thousands) 666 666 659 667 674 Net water supply (billions of gallons) 210 197 173 169 177

(1)FY 2009 figures are based on actual and estimates; FY2011 figures are based on departmental reports.

(2)FY 2010 figures are based on estimates. Data are performance metrics narrowed down to the City's core functions, namely, Public Safety, Community

Environment, Transportation, Culture, Education and Recreation, Socio-Economic Development and Support Services.(3)

Beginning in FY 2005, this category was broken into: "Consumer Protection-cases reviewed" and "Consumer Protection-consumer complaints".(4)

The 3-1-1 Call Center Operations, which provides assistance on routine and non-emergency City services, began operations in November 2002.(5)

The revenue enhancement unit investigations data include the number of tax discovery cases resulting from the implementation of the new LATAX program.

(6)The Citywide system of neighborhood councils was adopted on May 25, 2001. No data available for FY 2008, 2009 and 2010.

(7)This category was formerly "Animals Rescued".

(8)The City offers free graffiti removal services through its Operation Clean Sweep Program.

(9)In FY 2006, the Dept of Transportation changed "Signs Replaced" to "Signs Maintained/Replaced" for better description of reporting.

(10)Figures were updated and restated in miles.

-- Data not available or no longer reported

Sources: Except for the business-type activities data, of which were provided by the departments, all departmental workload indicators and performace metrics

are from the Detail of Department Programs which is a supplemental budget document.

Function/Program

Fiscal Year

CITY OF LOS ANGELES



- 363 -

CITY OF LOS ANGELES

Capital Assets InformationLast Ten Fiscal Years

Fiscal Year

Function/Program 2003 2004 2005 2006 2007

General Government

Fiber optic cabling (fiber miles)(1) 9,835 9,843 9,855 9,870 9,870 Public office buildings 16 16 17 17 17


Animal shelters 6 6 6 6 6 Fire stations 103 103 103 103 104 Fire trucks 347 360 360 360 360 Patrol units 1,276 1,276 1,276 1,276 1,374 Police stations 20 20 21 21 21 Police training centers 3 3 3 3 3

Public Works

Bridges 533 533 533 533 507 Street lights 242,885 242,000 218,248 221,113 231,402 Streets (miles) 7,300 7,221 6,493 6,489 6,500


Refuse collection trucks 710 734 751 705 725 Refuse yards 7 7 7 7 7

Transportation

Automated traffic signal and control systems 39 42 43 46 41 Bike paths 14 14 14 14 12 Commuter buses 449 513 516 535 488 Traffic signals 2,902 3,403 4,251 4,555 4,506


Acres of beach land 232 232 232 232 232 Acres park land (incl. beaches) 15,535 15,553 15,704 15,822 15,944 Archery ranges 3 3 3 3 3 Baseball/softball diamonds 251 251 253 253 255 Children's play areas 372 372 374 377 377 Dog parks 8 8 9 9 9 Golf courses 13 13 13 13 13 Hiking trails (miles) 92 92 92 92 92 Historical sites 11 11 11 11 11 Horticulture centers 6 6 6 6 6 Indoor gyms 94 95 95 95 95 Lakes 9 9 9 9 9 Libraries 68 71 72 72 72 Licensed child-care centers 21 23 24 25 26 Museums 7 7 7 7 7 Park sites 393 394 396 397 398 Pools 59 59 59 60 60 Recreational centers 175 176 179 180 181 Regional parks 5 5 5 5 5 Residential camps 7 7 7 7 7 Senior citizen centers 27 27 30 30 30 Skate parks 6 7 7 7 7 Tennis courts 287 287 287 287 287 Therapeutic centers 3 3 3 3 3 Wedding sites 12 12 12 12 12

Continued…

- 364 -

CITY OF LOS ANGELES

Capital Assets Information - (Continued)Last Ten Fiscal Years

Fiscal Year


General Government

Fiber optic cabling (fiber miles) (1) 9,876 3,426 150 150 150 Public office buildings 18 18 18 18 18


Animal shelters 6 6 6 6 6 Fire stations 105 106 106 106 106 Fire trucks 360 362 362 336 337 Patrol units 1,374 1,374 1,374 1,374 1,374 Police stations 25 26 28 29 29 Police training centers 3 3 3 3 3

Public Works

Bridges 507 509 508 508 508 Street lights 206,000 207,000 204,000 204,750 206,757 Streets (miles) 6,500 6,500 6,500 6,500 6,500


Refuse collection trucks 744 744 742 732 750 Refuse yards 7 7 7 7 7

Transportation

Automated traffic signal and control systems 46 48 48 48 48 Bike paths 12 12 13 13 13 Commuter buses 440 468 450 407 361 Traffic signals 4,515 4,530 4,589 4,607 4,625


Acres of beach land 232 232 232 232 232 Acres park land (incl. beaches) 15,710 15,786 15,717 15,717 15,865 Archery ranges 3 3 3 3 3 Baseball/softball diamonds 256 256 256 256 256 Children's play areas 368 368 368 368 368 Dog parks 9 9 9 9 9 Golf courses 13 13 13 13 13 Hiking trails (miles) 92 92 92 92 92 Historical sites 11 11 11 11 11 Horticulture centers 6 6 6 6 6 Indoor gyms 95 95 95 95 95 Lakes 11 11 11 11 11 Libraries 72 72 73 -- --Licensed child-care centers 26 26 2 2 2 Museums 12 12 12 12 12 Park sites 404 417 427 427 427 Pools 60 60 61 61 61 Recreational centers 183 183 184 184 184 Regional parks 5 5 5 5 5 Residential camps 7 7 7 7 7 Senior citizen centers 31 31 31 31 31 Skate parks 9 9 9 9 18 Tennis courts 321 321 321 321 321 Therapeutic centers 3 3 3 -- --Wedding sites 12 12 12 12 19

Continued…

- 365 -

CITY OF LOS ANGELES


Fiscal Year


Airports

Number of airports 4 4 4 4 4

Harbor

Number of major container terminals 8 8 8 8 8 Number of cargo terminals 27 26 26 27 25

Power

Number of generating units(2) 61 60 60 67 50 Transmission lines (miles) 3,631 3,631 3,631 3,643 3,643 Overhead distribution lines (miles) 6,223 6,949 7,268 7,268 6,954 Underground distribution lines (miles) 5,718 6,257 6,115 6,115 6,061

Water

Aqueduct (miles) 571 571 571 571 340 Number of storage reservoirs and tanks 109 109 107 107 108 Distribution pipe (miles) 7,098 7,108 7,119 7,137 7,229 Service connections 709,112 706,789 708,167 709,988 712,184

Wastewater

Sanitary sewers (miles) 6,500 6,500 6,500 6,500 6,500 Stormdrain pipe mainline (miles) 1,261 1,500 1,200 1,000 1,000

Continued…

- 366 -

CITY OF LOS ANGELES


Fiscal Year


Airports

Number of airports (3) 4 4 4 4 4

Harbor

Number of major container terminals 8 8 8 8 8 Number of cargo terminals 25 25 24 24 24

Power

Number of generating units (2) 51 50 51 235 235 Transmission lines (miles) 3,643 3,631 3,631 3,626 3,626 Overhead distribution lines (miles) 6,947 8,782 10,140 10,186 10,220 Underground distribution lines (miles) 6,095 3,235 3,505 3,547 3,594

Water

Aqueduct (miles) 367 367 390 472 472 Number of storage reservoirs and tanks 104 114 106 114 114 Distribution pipe (miles) 7,227 7,248 7,273 7,221 7,225 Service connections 715,430 716,919 718,511 719,154 701,644

Wastewater

Sanitary sewers (miles) 6,550 6,500 6,500 6,700 6,700 Stormdrain pipe mainline (miles) 1,200 1,200 1,200 1,200 1,200

(1)In fiscal year 2010, DWP took over possession, management and control over majority of the assets.

(2)Data changed to Department-owned generating units beginning fiscal year 2007. The increase in generating units is due to renewables.

(3)The Airports operate LAX, ONT, VNY and PMD. However, PMD is not currently certificated by the FAA.

Source: Various City departments

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Comprehensive Annual Financial Report - The City of Los Angeles

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