HomeMy Public PortalAbout12) 9A Formation of an Audit CommitteeAGENDA
ITEM 9.A.
ADMINISTRATIVE SERVICES DEPARTMENT
MEMORANDUM
DATE: January 21, 2014
TO:
FROM:
SUBJECT:
The Honorable City Council
Tracey L. Hause, Acting City Manager I Administrative Services Direct~
FORMATION OF AN AUDIT COMMITTEE
RECOMMENDATION:
The City Council is requested to consider the formation of an audit committee.
BACKGROUND:
1. The 2011-2012 Los Angeles County Civil Grand Jury (CGJ) expressed concern
about the potential for abuse of charter cities in California as they are given greater
authority and flexibility, by California law, than general law cities over their respective
municipal affairs.
2. On January 24, 2012, the City of Temple City (City) received a questionnaire
developed by the CGJ to gather information regarding current practices of the charter
cities in the areas of: Financial Health; Governance Practices; Financial
Management Practices; Contracting and Procurement; and Employee
Compensation.
3. On February 9, 2012, the City returned the completed questionnaire and supporting
documentation and forwarded a copy of the City's Fiscal Year (FY) 2009-2010 Basic
Financial Statements to the CGJ as requested.
4. On June 26, 2012, the City received a copy of the 2011 -2012 Los Angeles County
Civil Grand Jury Report.
5. On September 18, 2012, staff brought forward to the City Council the CGJ Report
and a draft letter responding to the recommendations.
6. In mid-June 2013, the portion of the 2012-2013 Los Angeles County Civil Grand Jury
Report (2012-2013 CGJ Report) entitled "CITIES OF LOS ANGELES COUNTY
Fiscal Health, Governance, Management and Compensation" was delivered to City
Hall (Attachment "A").
7. On November 13, 2013, staff responded to the report (Attachment "B").
City Council
January 21, 2014
Page 2 of 3
ANALYSIS:
The main function of the Civil Grand Jury is to investigate county, city, and joint-power
agencies. The Grand Jury acts in a "watch-dog" capacity, by examining carefully and
completely, the operations of various government agencies within Los Angeles County.
The Civil Grand Jury cannot investigate state or federal agencies, which lie outside their
jurisdiction. Part of the investigation of governmental agencies includes the ability to
audit operations, accounts and records of officers and departments within the agency
under investigation. The Civil Grand Jury is further charged with investigating individual
complaints from citizens.
Due to problems in the last couple of years in the cities of Bell and Vernon, and fears of
bankruptcy in other cities in California, the Grand Jury undertook the "Charter Cities
Fiscal Health, Governance and Management Practices" investigation and issued a
report dated June 26, 2012. Of the twenty-five (25) Charter Cities within Los Angeles
County, twenty-three (23) Charter Cities were chosen because their greater autonomy
allows for greater potential for abuse. None of the sixty-three (63) "General Law" cities
within Los Angeles County were investigated in last year's report. This year's 2012-
2013 CGJ Report decided to expand the investigation to all eighty eight (88) cities within
Los Angeles County including all Charter and General Law cities as the economy has
increased the risk of bankruptcies.
Temple City faired rather well in the Grand Jury's investigation in light of actions by
other cities within Los Angeles County. For greater transparency and accountability,
one recommendation made in the 2012-13 CGJ Report is that cities should formally
establish an audit committee, making it directly responsible for the work of the
independent auditor. Temple City is one of the 59 out of 88 cities, in Los Angeles
County, that received this recommendation. As indicted in the 2012-2013 CGJ Report
(Attachment "A" page 89), it is recommended that the City establish a City Council audit
committee to provide independent review and oversight of financial reporting processes,
internal controls and independent audits.
Recommended best practice audit committees structures from the Government Finance
Officers Association (GFOA) include:
• The governing body of every state and local government should establish an
audit committee or its equivalent;
• The audit committee should be formally established by charter, enabling
resolution of other appropriate legal means and made directly responsible for the
appointment, compensation, retention and oversight of the work of any
independent accountants engaged for the purpose of preparing or issuing an
independent audit report or performing other independent audit, review or attest
services;
• The audit committee should be established in such a manner that all accountants
thus engaged report directly to the audit committee. The written documentation
City Council
January 21, 2014
Page 3 of 3
establishing the audit committee should prescribe the scope of the committee's
responsibilities, as well as its structure, processes, and membership
requirements; and
• The audit committee should itself periodically review such documentation, no
less than once every five years, to assess its continue adequacy.
Other structures of audit committees in California also exist, including finance and/or
budget committees, similar to the previous Budget Ad Hoc Committees in Temple City,
that assume the recommended audit committees' duties and responsibilities.
Consideration of options for structure is recommended.
Staff is recommending that the City Council establish an audit committee to provide
independent review and oversight of financial reporting processes, internal controls and
independent audits.
CONCLUSION:
If the City Council decides to form an audit committee, a standing committee is strongly
recommended, as on-going activities are necessary. If an audit committee is formed, it
is suggested staff work with the newly appointed members of the audit committee to
discuss structure, duties and responsibilities, and return to the City Council with a final
recommendation.
FISCAL IMPACT:
This action would have no fiscal impact to the Fiscal Year (FY) 2013-14 City Budget.
ATTACHMENTS:
A. 2012-2013 Los Angeles County Civil Grand Jury's Final Report-CITIES OF LOS
ANGELES COUNTY Fiscal Health, Governance, Management and Compensation
B. Staff's response to the Los Angeles County Civil Grand Jury's Final Report-CITIES
OF LOS ANGELES COUNTY Fiscal Health, Governance, Management and
Compensation
ATTACHMENT A
CITIES OF LOS ANGELES COUNTY
FISCAL HEALTH, GOVERNANCE,
FINANCIAL MANAGEMENT AND COMPENSATION
COMMITTEE MEMBERS
Kenneth Howard---Chair
James Bradford
David Dahl
Albert Handschumacher
Tom Scheerer
Jerome Strofs
Mel Widawski
Gilbert Zeal
CITIES FISCAL HEALTH, GOVERNANCE AND MANAGEMENT
Table of Contents
Executive Summary .................................................................................................................. 85
Background ............................................................................................................................... 86
Methodology ............................................................................................................................. 86
Discussion ................................................................................................................................. 87
Fiscal Health ............................................................................................................................. 96
Net Revenue Percent-All Funds ....................................................................................... 103
Ratio Of Assets To Liabilities-All Funds ......................................................................... 108
Change In Net Assets -All Funds .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. I I 3
General Fund Net Revenue Percent.. .................................................................................. I 17
Change In General Fund Balance ....................................................................................... 122
Unassigned General Fund Reserve .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. . .. . .. .. .. . .. .. .. .. .. .. .. .. .. .. .. .. .. 126
Findings-Fiscal Health ..................................................................................................... 130
Recommendations-Fiscal Health ...................................................................................... 130
Governance And Financial Management Best Practices ........................................................ 131
Governance Practices .............................................................................................................. 13 7
Strategic Planning ............................................................................................................... 13 7
Performance Measurement ................................................................................................. 13 8
City Council And Executive Relationship .......................................................................... 13 9
Executive Goals And Evaluation ........................................................................................ 140
Council-Adopted Policies ................................................................................................... 140
Findings -Governance Practices ........................................................................................ 141
Recommendations -Governance Practices ........................................................................ 141
Financial Management Practices ............................................................................................ 142
Audit Committee ................................................................................................................. 142
Audit Procurement .............................................................................................................. 14 3
Accounting Policies And Procedures .................................................................................. 14 7
Reporting Of Fraud, Abuse And Questionable Practices ................................................... 148
Internal Controls ................................................................................................................. 149
Internal Audit ...................................................................................................................... 151
General Fund Unassigned Fund Balance ............................................................................ 152
Finan cia! And Public Reporting Practices .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. 15 2
Findings-Financial Management Practices ...................................................................... 153
Recommendations -Financial Management ...................................................................... 154
Employee Compensation ........................................................................................................ 15 5
New Legislation ...................................................................................................................... 156
Recommendations And Required Responses ......................................................................... 156
Appendix A: Glossary ........................................................................................................... A-1
Appendix B: Sample Questionnaire ...................................................................................... B - 1
Appendix C: Employees With Compensation Over $200,000 In 20 II ................................ C-I
Appendix D: Progess Implementing Prior Recommendations ............................................. D-1
2012-2013 LOS ANGELES COUNTY CIVIL GRAND JURY REPORT
CITIES FISCAL HEALTH, GOVERNANCE AND MANAGEMENT
CinES FISCAL HEALTH, GOVERNANCE AND MANAGEMENT
CITIES OF LOS ANGELES COUNTY
Fiscal Health, Governance, Financial Management and Compensation
EXECUTIVE SUMMARY
The Los Angeles County Civil Grand Jury (Grand Jury) requested information from all 88
incorporated cities in Los Angeles County to determine the fiscal health of those cities. It also
sought to determine if the cities were following the "best practices" for governance and financial
management, as established by the Government Financial Officers Association (GFOA). This
report expands on a previous investigation from the 2011-2012 Grand Jury that studied the 23
charter cities in the County and follows reports in the media of California cities in financial
distress. This report also looks at the issue of employee compensation and recent legislation.
(Government Code section 8546.1 0.)
Fiscal health of cities in Los Angeles County has been severely impacted by the economic
downturn that began in 2008. The cities have responded to the downturn and have made
substantial efforts to reduce costs consistent with reduced revenues. For example, most cities
have improved their asset to liability ratio and have increased their total net assets.
Governance describes the role of a city council in providing leadership for a city. There should
be a strategic plan for planning and performance measurements. While most cities responded that
they have adopted performance measures to evaluate progress on priorities, only a few had
documented such measures. Cities must develop and report on performance measures. These
measures should be focused on results, and information should be provided for several years to
evaluate progress.
Effective governance also requires a definition of roles and relationships, especially between the
city council and city executive. It is important for city councils to provide clear direction for the
city executive, and evaluate the executive with performance reviews. A best practice is to
develop a detailed description of the city council-executive relationship. This can improve the
effectiveness of both. The Grand Jury found that all cities have adopted or are in the process of
adopting a conflict of interest policy, and an investment policy.
Financial management describes the process responsible for managing and protecting the
resources of the city and is directly related to fiscal health. Effective fiscal management requires
adequate systems of internal controls to insure funds are used for intended purposes. Along with
interviewing members of the Los Angeles County Treasurer-Tax Collector's office, the Grand
Jury has studied the extensive "Best Practices and Advisories" from the GFOA. This nationally
recognized association has developed best practices to provide guidance on sound financial
management. Many city officers in Los Angeles County are members of this organization, which
is a leader in establishing responsible policy. These best practices served as a basis for evaluating
the fiscal management practices of the cities.
Compensation for city employees who earned over $200,000 per year is also addressed in this
report.
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New legislation (AB 187, codified as Government Code section 8546.1 0) permits the California
State Auditor to investigate high risk cities, but requires legislative funding.
BACKGROUND
There have been recent problems in the cities of Bell, and Vernon. In addition, there are fears of
bankruptcy in the city of Duarte and other cities. One of the most important obligations of the
Grand Jury is as a government watchdog. Last year's Grand Jury undertook the "Charter Cities'
Fiscal Health, Governance and Management Practices" investigation. Of the twenty-five (25)
Charter cities within Los Angeles County, twenty-three (23) Charter cities were chosen because
their greater autonomy allows for greater potential for abuse. The recommendations resulting
from this investigation and the implementation progress are presented in Appendix D. None of
the sixty-three (63) "General Law" cities within Los Angeles County were investigated in last
year's report. This year's 2012-2013 Grand Jury decided to expand the investigation to all 88
cities within Los Angeles County including all Charter and General Law cities as the current
economy has increased the risk of bankruptcies. [City of Bell, Los Angeles Times Feb. 24, 20 II J, [City of
Vernon, The Economist May 7, 2011], [City of Duarte, CBSLA.com July 31, 2012]
METHODOLOGY
The following outlines the methodology used for this investigation:
I. Obtained and reviewed the Comprehensive Annual Financial Report (CAFR) or Financial
Statements for each of the 88 cities, if available.
2. Developed financial ratios and criteria to rate the financial health of the cities.
3. Ranked the cities based on the financial ratios and criteria.
4. Identified best practices criteria related to governance and financial management.
5. Developed and administered a questionnaire (both hard copy and online) to each of the
general law cities as well as the charter cities of Los Angeles and Long Beach. This
questionnaire was used to identify their current practices related to governance, and
financial management.
6. Developed and administered a questionnaire (both hard copy and online) to each of the
23 charter cities included in the previous investigation. This questionnaire was used to
update previous responses, and identify changes in their governance and financial
management practices since the previous questionnaire.
7. Reviewed and analyzed each city's response to the questionnaire.
8. Requested supporting documentation and explanations of responses for each section of
the questionnaire.
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9, Reviewed responses to the questionnaire, supporting documentation, and explanations
and developed findings,
I 0, Reviewed the reasonableness of salaries and compensation as obtained from the
California State Controller's Office,
DISCUSSION
Fiscal Health
Cities in Los Angeles County, like local governments throughout California and the nation, have
been severely impacted by the economic downturn that began in 2008 and continues, The cities
have responded to the economic downturn and have made substantial efforts to reduce costs
consistent with reduced revenues.
• Most cities expended more than they received in total revenues in all funds for both
FY's 2010-11 and 2011-12. The percentage of expenditures over revenues did decline,
from 12.5% in FY 2010-11 to 6.2% in FY 2011-12. There are also signs cities' financial
health is improving in terms of net assets, Most cities (63 of84) had a ratio of total
assets to liabilities greater than 2.0 in FY 2010-11, with an average ratio of 5 AS, This
improved for FY 2011-12, with even more cities (73 of77) with a ratio greater than 2.0,
and an average ratio of 8. 92,
• Most cities also had improvements in their total net assets during both FY 2010-11 and
FY 2011-12. Most cities' (53 of84) total net assets increased in FY 2010-11, and even
more cities' (58 of77) total net assets increased in FY 2011-12. The average change in
net assets was 1.2% for FY 2010-11, and 24% for FY 2011-12,
• For city general funds, most cities (52 of 84) received more in revenues than they spent
on general fund governmental activities during Fiscal Year 20 I 0-1], On average, cities
spent I, 7% more than received in general fund revenues, Most cities ( 46 of 77) also
received more in revenues than spent on these activities during FY 2011-12. On average,
cities spent I .5% more than received in general fund revenues,
• The city general fund balance also increased for most cities (47 of84) in FY 2010-1],
The general fund balance increased for fewer than half the cities (32 of 77) for FY 2011-
12. On average, city general fund balance declined 3.8% in FY 20 I 0-11, and declined
14.5% in FY 2011-12.
• Most cities (55 of 84) had an unassigned general fund reserve for emergencies and
other unforeseen needs equal to 2 months of regular general fund revenues as
recommended in FY 20 I 0-11, Most cities ( 47 of 77) also had such a reserve in FY 2011-
12. The average unassigned general fund reserves percentage of regular general fund
operating expenditures was 51.4% in FY 2010-11, and 38J% in FY 2011-12.
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Governance Practices
Governance describes the role of a city council in providing leadership for an organization.
• Strategic planning is a key tool for the city council to provide the overall direction for
the city, and overseeing the city's performance. Several cities had developed
comprehensive strategic plans. Others held regular strategic planning sessions with the
city council to discuss strategic issues and provide needed direction. Many other cities
focused on short-term or budget related goals, which do not provide the appropriate
strategic focus and direction for these cities. Cities that have not developed and adopted
a strategic plan that articulates the mission, vision, core values and priorities (goals and
objectives) for the city should do so.
• Another key tool is performance measures or indicators to evaluate progress on
priorities. Most cities said they had adopted performance measures or indicators, but
only a few cities provided documentation. Cities that have not developed and reported on
performance measures or indicators to evaluate progress on priorities should do so.
These performance measures should be quantified, focused on results, and information
should be provided for several years to allow evaluation of progress over time.
• Formal definitions of roles and relationships are critical to effective governance,
especially for the city council and executive (city manager or city administrator). It is
also important for city councils to provide clear direction for the executive through
specific goals and objectives and performance reviews of the executive. All cities had
defined basic roles and provided the legal framework for the city council and executive
through the charter and I or municipal code. A best practice is to go beyond this basic
framework and develop a more detailed description of the relationship. This more
extensive "governance framework" can improve the cohesion and effectiveness of both
the city council and the executive. City councils should develop a "governance" policy
that more specifically defines the relationship between the council and executive. City
councils that do not develop specific annual goals for the city's executive and conduct
meaningful evaluations annually should do so.
• Adopting appropriate policies is another key element of effective governance. Two
policies that cities are required to adopt by California Government Code are a "Conflict
of Interest" policy and an "Investment" policy. All cities have adopted or are in the
process of adopting a "Conflict of Interest" policy, and all have adopted an "Investment"
policy.
Financial Management Practices
Financial management within each city is responsible for managing and protecting the financial
resources and assets of the city. Effective financial management requires adequate systems of
internal controls to ensure funds are used for intended purposes, and transparency and reliability
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of financial reporting. The Government Finance Officers Association developed recommended
best practices to provide guidance on sound financial management practices.
These best practices in each of the following areas served as the basis for evaluating the financial
management practices of the cities:
• Establishing an audit committee is a best practice for the city council to provide
independent review and oversight of financial reporting processes, internal controls, and
independent auditors. Most cities have not established a formal audit committee with the
responsibility for monitoring and overseeing financial reporting. Cities should formally
establish an audit committee and make it directly responsible for the work of the
independent auditor.
• Annual independent audits are required by each city and are important in preserving
the integrity of public finance functions and maintaining the public's confidence. All
cities require their auditors to comply with independence standards and most select their
auditors through a competitive process. Most also preclude the auditor from providing
non-audit services. Cities should continue requiring compliance with standards of
independence for the external auditor. Cities that do not currently select the auditor
through a competitive process should do so. Cities that allow the auditor to provide non-
audit services should ensure appropriate review and approval of those services.
• Formal documentation of accounting policies and procedures is an essential
component in providing effective controls over accounting and financial reporting.
Several cities did not have documented accounting policies and procedures, and most of
those that did could improve their documentation and maintenance of accounting policies
and procedures. Cities should review and update accounting policies and procedures to
ensure they are appropriately detailed and define the specific authority and responsibility
of employees. Cities should also establish a policy requiring policies and procedures to
be reviewed annually and updated at least once every three years.
• Most fraud, abuse, and questionable practices are identified through reporting by
employees or members of the public. The Government Finance Officers Association
recommends establishment of policies and procedures to encourage and facilitate
reporting of fraud, abuse and questionable practices. This should include a formal ethics
policy, and practical mechanisms for confidential and anonymous reporting. Several
cities had very comprehensive and detailed policies and procedures including definitions
of fraud and abuse, clear responsibilities for employees and management personnel, and
guidelines and steps for investigating allegations and reporting the results. However,
most cities could improve their policies and procedures for reporting fraud, abuse, and
questionable practices. Cities should review and update policies and procedures for
reporting fraud, abuse, and questionable practices including a practical mechanism, such
as a hot line, to permit the confidential, anonymous reporting of concerns.
• Internal controls are important to safeguard city assets from error, loss, theft, misuse,
misappropriation, and fraud. The Government Finance Officers Association recommends
internal controls over financial management be documented, provide practical means for
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employees to report management override of controls, periodic evaluation of internal
control procedures, and development of corrective action plans to address identified
weaknesses. Two cities had developed comprehensive procedures for internal controls.
However, most cities provided no specific documentation of internal control procedures,
or made minor mention of internal controls procedures as part of their financial and
accounting policies and procedures. Most cities also relied on their external auditor for
internal control reviews during the annual audit. These reviews are typically limited to
review of internal controls over financial reporting and compliance, and do not include an
opinion on internal controls. Internal controls to ensure there are adequate procedures in
place to protect public funds are the responsibility of city financial management. Cities
should develop comprehensive procedures for internal controls over financial
management.
• The internal audit function serves as an additional level of control and helps improve the
overall control and risk environment. Most cities do not have a formal internal audit
function. Several state that, given the small size of their city, an internal audit function
and staff could not be justified. All cities should establish a formal internal audit
function.
• Setting aside adequate funds is necessary for use in emergencies, revenue shortages, or
budget imbalances. The Government Finance Officers Association recommends that
governments establish a formal policy on the level of unrestricted or unassigned fund
balance that should be maintained in the general fund, and that this balance should
provide no less than two months of regular general fund operating revenues or
expenditures. Many cities do not have such a policy, and most who do have not
established a minimum of two months of regular general fund operating revenues or
expenditures. Cities that do not have policies and procedures regarding general fund
unrestricted or unassigned fund balance should develop such policies.
• Ensuring transparency and reliability of financial reporting is a key responsibility of
financial management. Financial statements and information provide the public with
information on how their city is using its resources, as well as the financial stability and
health of the city. The Government Finance Officers Association recommends
maintaining an adequate accounting system, issue timely financial statements and a
Comprehensive Annual Financial Report (CAFR) in compliance with standards, and
make the information readily accessible to the general public on the city's website. All
cities maintain an adequate accounting system, most issue timely financial statements and
a CAFR, and most make the CAFR available on the city website. Cities that have not
developed and published a CAFR should do so. Cities that have not published financial
reports on the city's website should do so.
Summary of Fiscal Health and Best Practices Results
The following exhibit shows a summary of each city's average ranking and number and
percentage of positive responses to the best practices questionnaire. For financial health, each
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city's rank on each of the six criteria for financial health is averaged for both FY 2011 and FY
2012. The best practices questionnaire included a total of 32 possible positive responses. The
number and percentage of positive responses for each city is presented, as well as the ranking of
each city compared to all the other cities.
Exhibit 1: Summary of Fiscal Health and Best Practice Questionnaire Results
Financial Health Best Practices Questionnaire
Average Ranking Number Positive Percent Positive Rank Among
City FY 2011 FY 2012 Responses Responses Cities
Agoura Hills 34 36 25 78% 31
Alhambra 32 42 21 66% 55
Arcadia 49 47 20 63% 64
Artesia 38 47 18 56% 78
Avalon NA NA 18 56% 78
Azusa 55 NA 19 59% 73
Baldwin Park 41 39 29 91% 7
Bell 36 NA 19 59% 73
Bell Gardens 26 37 20 63% 64
Bellflower 26 30 21 66% 55
Beverly Hills 55 25 27 84% 20
Bradbury 53 NA 22 69% 49
Burbank 31 57 25 78% 31
Calabasas 45 33 27 84% 20
Carson 49 47 18 56% .. 78
Cerritos 22 34 28 88% 14
Claremont 53 28 23 72% 41
Commerce 49 33 23 72% 41
Compton 67 NA 21 66% 55
Covina 27 57 26 81% 25
Cudahy 55 34 9 28% 87
Culver City 61 37 30 94% 3
Diamond Bar 14 51 20 63% 64
Downey 44 55 29 91% 7
Duarte 48 16 28 88% 14
El Monte 37 41 22 69% 49
El Segundo 43 60 27 84% 20
Gardena 44 42 23 72% 41
Glendale 47 57 30 94% 3
Glendora 30 49 22 69% 49
Hawaiian Gardens 24 NA 19 59% 73
Hawthorne 45 34 20 63% 64
Hermosa Beach 55 28 24 75% 36
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Exhibit 1: Summary of Fiscal Health aud Best Practice Questiouuaire Results
Financial Health Best Practices Questionnaire
Average Ranking Number Positive Percent Positive Rank Among
City FY 2011 FY 2012 Responses Responses Cities
Hidden Hills 29 22 18 56% 78
Huntington Park 55 NA 21 66% 55
Industry 30 48 9 28% 87
Inglewood 17 NA 17 53% 83
Irwindale 29 44 26 81% 25
La Canada Flintridge 28 33 26 81% 25
La Habra Heights 48 NA 23 72% 41
La Mirada 38 13 21 66% 55
La Puente 29 41 24 75% 36
LaVerne 60 38 26 81% 25
Lakewood 54 27 25 78% 31
Lancaster 50 40 24 75% 36
Lawndale 50 NA 23 72% 41
Lomita 41 44 20 63% 64
Long Beach 56 51 31 97% I
Los Angeles 57 44 27 90% 13
Lynwood 26 53 29 91% 7
Malibu 79 54 26 81% 25
Manhattan Beach 57 34 20 63% 64
Maywood 52 NA 18 56% 78
Monrovia 37 58 26 81% 25
Montebello 27 40 19 59% 73
Monterey Park 36 39 29 91% 7
Norwalk 48 30 19 59% 73
Palmdale 51 37 29 91% 7
Palos Verdes Estates 54 39 20 63% 64
Paramount 62 29 21 66% 55
Pasadena 18 45 28 88% 14
Pico Rivera 31 45 28 88% 14
Pomona 41 51 29 91% 7
Rancho Palos Verdes 42 11 20 63% 64
Redondo Beach 49 41 31 97% 1
Rolling Hills 42 40 22 69% 49
Rolling Hills Estates 65 22 27 84% 20
Rosemead 55 34 23 72% 41
San Dimas 37 23 23 72% 41
San Fernando 28 58 14 44% 85
San Gabriel 43 61 23 72% 41
San Marino 33 38 22 69% 49
Santa Clarita 27 39 24 75% 36
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Exhibit 1: Summary of Fiscal Health and Best Practice Questionnaire Results
Financial Health Best Practices Questionnaire
Average Ranking Number Positive Percent Positive Rank Among
City FY 2011 FY 2012 Responses Responses Cities
Santa Fe Springs 47 34 17 53% 83
Santa Monica 51 24 20 63% 64
Sierra Madre 35 42 25 78% 31
Signal Hill 28 27 30 94% 3
South E1 Monte 16 18 22 69% 49
South Gate 45 36 21 66% 55
South Pasadena 82 32 21 66% 55
Temple City 58 31 25 78% 31
Torrance 56 31 28 88% 14
Vernon 39 77 30 94% 3
Walnut 44 36 27 84% 20
West Covina 32 44 14 44% 85
West Hollywood 55 33 28 88% 14
Westlake Village 41 37 24 75% 36
Whittier 36 40 21 66% 55
Employee Compensation
Until recently, there has been a lack of transparency and accountability for actual annual
compensation for some city employees. In 2010 reports revealed that some administrators in the
cities of Bell and Vernon were receiving disproportionately high compensation. In response to
these reports, the State Controller began requiring counties, cities, and special districts to report
government compensation to be posted on the Controller's website to promote transparency.
The information provided includes the approved salary range, as well as the actual compensation
received by each employee as reported to the U.S. Internal Revenue Service. City councils and
members ofthe public should annually review the actual compensation received by employees of
their city. The taxable compensation for employees receiving over $200,000 in 20 II is listed by
city and position title in Appendix C of this report.
As part of this investigation the Grand Jury requested information on city employee
compensation for those employees receiving over $200,000 in taxable compensation in calendar
year 2011. The following exhibit shows the number of employees receiving over $200,000 in
taxable compensation for each of the cities. The exhibit also shows the population of each city,
and the number of employees with taxable compensation over $200,000 by department or
function.
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Exhibit 2: Employees with Compensation over $200,000
With City Population and Employee Department I Function
Emplo ees by Department I Function
~ ~ o<l ~ ~ " ~ ~ ~ Number of ;.,bJI = ~ ~ -~ ~ City City Population ~ ~ bJI -~ g -= ·-= ~ ~ ~ 0 ~ Employees u ~ ...l = .. ; .. 0 :;: ~
Agoura Hills 1 23,387 I
Alhambra I 89,501 I
Arcadia I 56,719 I
Avalon I 3,559 I
Azusa 3 49,207 I I I
Bell Gardens I 77,312 1
Bellflower I 47,002 I
Beverly Hills 64 36,224 1 4 21 18 9 II
Burbank 14 108,469 I 2 4 2 5
Calabasas 1 23,788 1
Carson I 98,047 I
Cerritos I 54,946 I
Claremont I 37,608 I
Commerce I 13,581 I
Compton I 99,769 I
Covina 2 49,622 I I
Cudahy I 26,029 I
Culver City 14 40,722 2 I I 5 3 I I
Diamond Bar I 61,019 I
Downey 9 I 13,715 3 4 I I
Duarte I 23,124 I
El Monte 5 126,464 I 4
El Segundo 10 17,049 7 3
Gardena I 61,927 I
Glendale 15 207,902 I 2 6 4 2
Glendora I 52,830 I
Hawaiian Gardens I 15,884 I
Hawthorne 3 90,145 I I I
Hermosa Beach 2 19,599 I I
Huntington Park I 64,219 I
La Mirada I 50,015 I
Lancaster 2 145,875 I I
Long Beach 15 494,709 2 I 6 I I 4
Los Angeles 411 4,094,764 II I 115 20 224 40
Lynwood 2 73,295 2
2012-2013 LOS ANGELES COUNTY CIVIL GRAND JURY REPORT 94
CITIES FISCAL HEALTH, GOVERNANCE AND MANAGEMENT
Exhibit 2: Employees with Compensation over $200,000
With City Population and Employee Department I Function
Emplo ees by Department I Function
~ ~ oiJ ~ ~ ;; ~ ~ ~ Number of ;..,I>Jl = ~ '~ ~ ~ ~ City City Population ~ ~ I>J) ~ ~ 5 .c
Employees '~ = ~ ~ <;: 0 ~ u ~ -l = 0. ~0. 0 ~ <;:
Malibu I 13,765 I
Manhattan Beach 19 36,773 I 16 I I
Monrovia 1 39,984 I
Norwalk 1 109,817 1
Palmdale 3 152,622 I I I
Pasadena 8 151,576 4 1 1 1 1
Pico Rivera I 66,967 1
Pomona 2 163,683 2
Redondo Beach 7 68,105 1 1 4 I
Rosemead 1 57,756 1
San Dimas I 36,946 I
San Fernando 1 25,366 1
San Gabriel I 42,984 1
Santa Clarita 2 177,641 2
Santa Fe Springs 13 17,929 13
Santa Monica 64 92,703 2 17 1 29 12 1 2
Signal Hill I 11,465 I
Temple City I 35,892 1
Torrance 34 149,717 2 1 I 8 19 3
Vernon 5 96 1 I I 2
Walnut I 32,659 I
West Covina 6 112,890 1 3 2
West Hollywood 5 37,805 2 I 2
Westlake Village I 8,872 1
Whittier I 87,128 I
Totals 772 61 40 10 245 99 245 72
Sources·
Compensation Information: California State Controller's Office "Government Compensation in California." (http://publicnay.ca.gov)
City Population: California Department of Finance, January 2010
Note: Cities not listed did not have any employees with taxable compensation over $200,000,
The taxable compensation for all employees receiving over $200,000 in 2011 IS listed, by city
and position title, in Appendix C of this report
2012-2013 LOS ANGELES COUNTY CiVIL GRAND JURY REPORT 95
CITIES FISCAL HEALTH, GOVERNANCE AND MANAGEMENT
DETAILED ANALYSIS
FISCAL HEALTH
Cities in Los Angeles County, like local governments throughout California and the nation, have
been severely impacted by the economic downturn that began in 2008. Property tax revenues
received by these cities have declined substantially consistent with the decline in property values
and the reduction in the sale and turnover of real property. Sales tax revenues have also declined
substantially, with consumers reducing their spending in response to new economic realities and
loss of consumer confidence.
At the same time, the cost of funding public pensions for city employees has been impacted as
well. The annual cost of pension obligations is partially determined by the earnings of pension
funds, primarily the California Public Employees Retirement System (CALPERS). With the
economic decline came market corrections, and substantial reductions in the investment earnings
of CALPERS. This resulted in increased rates and costs for cities to fund their employee
pension obligations.
The Public Employees' Pension Reform Act of 2013 took effect on January I, 2013. The
reforms in this law mainly affect new employees hired after its effective date. Most new workers
will have to work until age 67 to receive full benefits. Police and firefighters will have to work
until age 57 to receive a maximum benefit that is less than what most safety workers currently
receive. The amount of salary that qualifies for pension benefits will be capped at just under
$114,000 per year for workers who are covered by Social Security and just over $136,000 for
those who are not. Another important provision is equal cost sharing between the employer and
the employee. New employees will pay at least half the cost of their pensions. Current employees
who are not paying half may be required to pay more in the future. (Source: California Public
Employees' Retirement System)
Cities have responded to the economic downturn and have made substantial efforts to reduce
costs consistent with reduced revenues. These efforts include hiring and pay freezes for
employees, furlough days for existing employees, increased cost to employees for benefits
(health care and retirement), and in some cases significant employee layoffs. In some cases
cities have also reduced the level of service provided to the community, with reduced hours of
operations and other reductions for some services.
To evaluate the financial health of the cities we obtained and reviewed the Comprehensive
Annual Financial Report (CAFR) or Basic Financial Statements for each city for Fiscal Years
2010-11 and 2011-12, the most recent years of audited financial reporting available. We were
able to obtain this information from 82 of the 88 cities. The cities of Avalon, Bell, Compton,
Cudahy, La Habra Heights, and Maywood are in the process of completing their financial
statements and audits for these fiscal years.
We developed criteria for evaluating the fiscal health of these cities, and compiled and analyzed
the information from the financial statements. Most of the cities had two primary types of
activities -governmental and proprietary or business-type activities. Governmental activities
include the core government activities such as government administration, public safety,
2012-2013 LOS ANGELES COUNTY CIVIL GRAND JuRY REPORT 96
CITIES FISCAL HEAL Til, GOVERNANCE AND MANAGEMENT
transportation, community development, and community services. These activities are reflected
in each city's general fund. Proprietary or business-type activities include operating public
utilities (electrical power, water, parking, refuse collection, etc.) or other non-governmental
activities.
It is important to note that all financial information reported here is as presented by each city in
their financial statements audited by each city's independent financial auditor,
The following are the criteria used, with definitions and explanations of each. Three of the
criteria are applied to all city funds, and three of the criteria are applied only to city general
funds.
• All Funds include each city's general fund as well as any other funds for proprietary or
business-type activities which include operating public utilities (electrical power, water,
parking, refuse collection, etc.) or other non-governmental type activities.
o Net Revenue Percent is the percent of all revenues remaining after all city
expenditures. Revenues are the amount received by a city from taxes, fees,
permits, licenses, interest, intergovernmental sources, and other sources during
the fiscal year, Expenditures are the actual spending of governmental funds by
each city. If a city spends less than received the net revenues and percentage
would be positive. If a city spends more than received in revenues the net
revenues and percentage would be negative. The net revenue percent is
calculated by dividing net revenues by total revenues.
o Ratio of Assets to Liabilities is the total assets of a city divided by the total
liabilities of a city. City assets include funds available for use by the city, as well
as the value of any capital assets such as land, buildings and improvements,
machinery and equipment, and infrastructure. Liabilities include accounts
payable and long-term debt such as bonds, certificates of participation, pension
obligations, and insurance claims. Net assets are the total city assets less total city
liabilities. The ratio of assets to liabilities is calculated by dividing a city's total
assets by its total liabilities. This ratio is an indicator of a city's solvency and
ability to meet long-term obligations, including financial obligations to creditors,
employees, taxpayers, and suppliers; as well as its service obligations to its
residents. Ideally, cities would at minimum, have twice as many assets as
liabilities. This would give them an asset to liability ratio of 2.0 or better.
o Change in Net Assets is the difference from the beginning of the fiscal year to
the end of the fiscal year in the total city assets minus total city liabilities. This
change indicates the extent to which total city assets are increasing or decreasing.
Ideally, city net assets would be stable or increasing. Declining net assets indicate
cities are spending down their assets in order to meet current financial obligations.
The change in net assets is calculated by subtracting the previous fiscal year's net
assets for each city from the current year's net assets. If the result is a positive
number the net assets are increasing, if a negative number the net assets are
decreasing.
2012-2013 LOS ANGELES COUNTY CIVIL GRAND JuRY REPORT 97
CJTJES FISCAL HEALTH, GOVERNANCE AND MANAGEMENT
• General Funds are used to fund core government activities such as government
administration, public safety, transportation, community development, and community
services.
o General Fund Net Revenue Percent is the percent of all general fund revenues
remaining after all city general fund expenditures. Revenues are the amount
received by a city from taxes, fees, permits, licenses, interest, intergovernmental
sources, and other sources during the fiscal year. Expenditures are the actual
spending of governmental general funds by each city. If a city spends less than
received the general fund net revenues and percentage would be positive. If a city
spends more than received in revenues the net general fund revenues and
percentage would be negative. The general fund net revenue percent is calculated
by dividing general fund net revenues by total general fund revenues.
o Change in General Fund Balance is the difference from the beginning of the
fiscal year to the end of the fiscal year in the total city general fund balance. This
change indicates the extent to which a city's general funds are increasing or
decreasing. Ideally, city net general fund balance would be stable or increasing.
A declining general fund balance indicates cities are spending down their general
fund in order to meet current financial obligations. The change in general fund
balance is calculated by subtracting the previous fiscal year's general fund
balance for each city from the current year's general fund balance. If the result is
a positive number the general fund balance is increasing, if a negative number the
general fund balance is decreasing.
o Unassigned General Fund Balance is the portion of a city's general fund
balance that is not assigned for a specific use and, therefore, available for
appropriation. The Government Finance Officers Association recommends each
city have an unassigned general fund reserve of no less than two months of
regular general fund operating revenues or regular general fund operating
expenditures. These are funds that have been formally set aside for use in
emergencies, revenue shortages, or budget imbalances, as well as provide stable
tax rates, maintain government services, and to facilitate long-term financial
planning.
The exhibits on the following pages provide an overview of the results of the financial
information and criteria developed for each city. This includes the actual financial health criteria
(ratio or percentage), as well as how each city compares or ranks against each of the other cities
in Los Angeles County. This information is provided for both Fiscal Years 2010-11 and 2011-
12. More information on each of these fiscal health criteria, and the results of the comparison, is
contained within the sections following this exhibit.
2012-2013 LOS ANGELES COUNTY CIVIL GRAND JURY REPORT 98
CITIES fiSCAL HEAL11-L GoVERNANCE Al'-TI MANAGEl'vlENT
Exhibit 3: Results and Ranki~ of Cities on Fiscal Health Criteria
All Funds General Fund
Net Revenue Percent Ratio or Assets to Liabilities Ch~ in Net Assets General Fund Net Revenue Ch~n G<lneral Fund Balance Una~ed G<lneral Fund Balance
FY 2010-11 FY 2011-12 FY 2010-11 FY 2011-12 FY 2010-11 FY 2011-12 FY 2010-11 FY 2011-12 FY 2010-11 1 FY 2011-12 FY 2010-11 J FY 2011-12
City I Rank I Percent I Rank I Percent ! Rank I Ratio ! Rank I Ratio I Rank I Percent I Rank I Percent I Rank I Per-cent I Rank I Percent I Rank I Percent ] Rank I Percent I Rank Percent I Rank Percent
Agoura Hills 79 (41.5%) 24 (.3%) 29 3_82 24 7.54 45 0.8% 70 (:!_6%) 36 3.5% 16 8_1% 1 285_1% 74 (78 3%) 14 80.3% 9 85.5%
Alhambra 12 3_9% 5 60% 52 248 52 377 6 8.1% 34 146% 44 1.5% 51 (:3'·-o) !3 243% 47 152%) 67 47% 64 07%!
Arcadia 63 (15.3%) 37 (4_2%) 23 4.31 28 6.92 70 (3 5%) 74 (5.7%) 52 0.0% 58 (50%) 34 6_1% 42 (3 5%) 50 19.0% 45 20.3% I
Artes1a 52 (34%1 70 (171%) 67 177 39 505 44 08% 37 8_8% 20 83% 54 t'''-·.;J 11 25_3% 51 (71%.; 31 449% 32 350%
Azusa 68 (19_8%) NA 0.0% 71 1.69 NA 0.00 73 {4.8%) NA 0.0% 30 4_7% NA 0_00/o 3 68_8% NA 0_0% 83 (l:J.3%) 67 0.0%
BaldV>~n Park
Bell Gardens
Bellflower
Bev~Hills
Bradbury
~
Calabasas
~
Cerritos
Claremont
~
Covina
Cudahy
CulverCi
D1amond Bar
Downey
Duarte
EIMonte
El Segundo
Gardena
~
G\endOf"a
Hawauan Gardens
Hawthorne
Hermosa Beach
Hidden Hills
Huntmgton Park
Indu:
Inglewood
Irwindale
La Canada Flintri!:J~
La Habra Heights
La M1rada
La Puente
La Verne
161 2.2%
33 (2.4'h)
251 ( g'};.,)
6 5,7%
82 '08 2".·01
54 (LS%
39 (--1-0%1
58 (I 1.7%)
55 (\0 l%j
5 8.5%
61 (]2_1'%1
66 {17.8%)
84 (1703'%)
17 2.1%
76 I f32_0%J
65 ( 17.&%)
3\ (_16%)
56 10.4%
35 (3_1%)
8 4.8%
53 ('' l"iOJ
44 () 6%)
32 (2 ~%)
20 I 1.4%
I 3
70
40
60
27
50
ll
3_7%
'23.3%
(4 5'!·0)
(12.0%)
4.7%
5.3%
11.6%
25.4%
(1 G%)
77%)
43%
331 (2.8%)
¥) {7.3%
121 4.1%
3 8.5%
NA 00%
69 06.6%)
22 0.2%
74 (24.5%)
35 (_j 2°-i:)
9 4.9%
31 (2.0%)
63 (!3_7%)
58 {I' 0%)
68 (15_5%)
76 (\>~ R'-;,l
62 ( 13.5%1
19 LO%
28 (1.3%
61 113 )"·a)
13 4.1%
56 i\] 2~·c.!
36 /3 <l%)
NA 00%
16 I 3.4%
21 107%
8 5_6%
NA 00%
51 (9.6%)
NA 00%
52 (9 8%
26 I ( B"o)
NA 0.0%
29 f\.3'!·0)
45 {7 0'%)
25 I ( G%)
2012-2013 LOS ANGELES COU!'fl'Y CIVIL GRANDJURV REPORT
56 8.1%
41 0.0%
H M~
51 45.5%
2 0.0%
32 0.0%
35 Ml%
48 26.4%
e nN
22 31.7%
n 77.1%
49 31.1%
u a%
69 58.4%
4 %N
30 3.76 44 4_74 75 \51%) 44 5.7% 70 fl0.9"-'<>l 62 {8 S?-0) 66 -(9.9%) 60 -(i4.4%l 57 14.8% 55 8.8%
21 4 46 7 34.!5 16 5.1% 22 210% 1 42 6% 19 6 7% 4 58 3% 21 3 8% 11 97.4% 6 109.0%
19-4.77 33 5_44 43 LO% 49 4.1% 56 1.9'%) 56 \4_9%) 33 6.2% 32 0.8% 55 16_9% 48 16.3%
\6 5.47 47 449 65 (15%; 72 {34%i 60 i4!0 .,) 60 ;7(1'',.) 51 (3\":ol 67 (1'05°.'o) 62 9_8% 52 14.6%
42 2.89 62 2.91 55 (A%) 66 (L9%J 19 8.5% 31 52% 29 7.1% 16 7.5% 70 0.7% 66 0.5%
27 23.3%
33 0~
75 0~
791 us I 671 2.511 131 5.7% I 51 118.4% I 10 I 14.o% I 71 11.3% I lSI 19.4% I 11 I (59.o%J I 41 I 33.1% I 371 28.8%
12 232% I 41l 233% 10 """'"'M 'I .-,l'l1 t"IO/ \•"V'O] ~~ ~-~'" ~V\,£\0 ~n.ou
84 0.0%
66 454.7%
74 0.0%
58 0.0%
5ol 2.6ol 6sl 2661 101 60%1 511 1.9%1 sl 16.6%1 111 !0.4%1 281 7.J%1 381 C2I%~il 81 119J%1 sll\6_3%
8 0.0%
65 85.1%
59 50.6%
151 5.481 2716941 271 2.4%1 541 LJ%1 671 [~7"-oll sol ~~'''"ll 351 6.0%1 61 193%1 721 o_0%1 671 00%
99
CITIES FISCAL HEALnl, OOVERI\'ANC'E AND MANAGEMENT
Exhibit 3: Results and Rankings of Cities on Fiscal Health Criteria
All Funds General Fund
Net Revenue Percent Ratio of Assets to Liabilities Ch:aJJge in Net Assets General Fund Net Revenue Change in General Fnud Balance Unassigned General Fnnd Balance
F¥2010-11 FY 2011-12 FY 2010-ll FY 2011-12 FY 2010-ll FY 2011-12 FY2010-11 FY 2011-12 .,-Y20to-u FY 2011-12 FY 2010-lt FY 2011-12
City Rank Percent Rank Percent Rank Ratio Rank Ratio Rank Percent Rank Percent "'"' Percent Rank Percent Rank Percent Rook Percent Rank rercent Rank Percent
Lakewood IS 2.4% 21 0.7% I\ 8_85 \\ 17_97 24 2.8% 24 24.5% 27 6.2% 29 5_7% 26 Vi% \7 6_7% 68 3_2% 59 65%
Lancaster 69 (Z! S%) 49 (')2%) 28 3.88 \0 18 04 64 ( 4".'o\ 23 25.2% 76 {23 '."-·o) 47 (•lo:,) 74 (170%) 69 (_\!{ ''~"} 46 30_2% 43 21_5%
Lawndale 77 (39.1% NA 0_0% 44 2.85 NA 0_00 46 0.5% NA 0.0% 8\ (36_5%) NA Q_()''/o 57 (56% NA 0.0% \6 74_9',1, 67 0.0%
Lom1ta 42 (5l%j 48 (7 go-o) \7 4 99 34 5_33 66 (I -:'%! 65 {I 5%) 40 2.1% 13 ' 40% 69 (I:; 0'-b) 24 25% 64 8_5% 60 51%
Long Beach 26 (.9%) 75 (252%) 57 2.25 69 2_39 \\ 5.9% 53 1.5% 53 {.2%) 38 23% 82 (59.1%) 9 15.1% 7\ 0.2% 62 1.3%
Los Angeles 43 {5_.-1%} 44 (\,,_,o.;,! 68 1.74 75 \77 26 27% 48 4_5% 25 6_4% 26 61% \6 19.1% \2 92% 66 65% 58 67%
Lynwood 57 11.5%) 40 (4"%) 53 2.47 58 3.42 35 1.8% 63 (12%-) 64 (5_7%) 48 '1.0%) 75 (21 2% 59 (!4 3%) 53 18.2% 47 18.5%
Malibu 73 r:::<J2%l 55 { ll :' o) 38 3 0\ 6\ 2.95 49 02% 7\ (3 3~':) 6\ z.~ 2:·0) 57 (-1-<;>~-,I 77 {2~ 9%) 54 (B 7'-<>J 42 312% 28 36_2%
Manhattan Beach 10 4.3% 17 3.2% 24 4.12 50 4_07 29 2_4% 45 53% 32 4.3% 28 5_7% 24 9.1% 33 U'-'<•J 37 36.7% 29 .35.6%
Monrovia 78 (-FU%J 53 (100";,! 80 1.30 66 2_65 8\ (1:!8%) J 163.7% 78 Ol S":c) 72 (l/_2''·'ol 7\ {l-1-(J%! 76 en~~-'.) 84 {.!_7 l' ;,! 76 {277%)
Monte belle 34 (2_5%) 27 (_<J~ii,) 77 1.51 68 2.43 9 6.3% \8 37.5% 77 (25.4%) 74 (31.8%, 83 (i74.5%) 2 43.8% 6\ 10.5% 49 15.9%
Montere Park 36 t3 2%\ 50 (<i 4°-'0) 70 1.72 60 3 0\ 25 2.7% 16 39_6% 58 (3 [':·d 45 06% 55 H5%) 7 !8_1% 65 8.3% 57 7.8%
Norwalk 47 (6.9%) \0 4.6% 60 2.20 32 5_70 53 (_I%) \9 33.6% 4 17.6% \7 78% 8 36.0% 65 {10 ()"/o) 48 25.4% 36 29_9"/o
Palmdale \9 1.4% 4\ (5 ''"-~-! 31 3_73 26 713 5\ 0 l% 32 15 3% 9 144% 39 18% 12 247% 52 (:I%) 38 36 5% 33 34 6%
Palos Verdes Estates 28 (1.0%) 39 f-t8%) 1 50.47 3 44.98 62 (Ll%) 68 {2_4''/o) 4\ 2.1% 32 4.9% 22 9.4% 44 (47%) 60 10_7% 50 15_7%
Paramcunt 62 (1?5%) JS {!• 7%) 6\ 2_13 22 994 77 (6 :1~·~\ 17 39 5% 51 0.2% 42 14% 5 426% 29 16% 30 499% 23 49.6%
Pasadena 51 (8.3%) 72 (18_0%) 63 2.01 73 2.04 23 3.0% 26 20.7% 22 7'.3% 8 11.2% 67 ()2.4%) \4 7_7% 78 U\%) 75 (23.1%
P1co Rivera 64 (]?_!%) 59 ( 12 -1-'!·,,) 54 2.32 54 3_67 20 32% 8 809% 68 (8 6"-o~ 49 (I 7"-0j 60 (!S_~~-Ot 3\ 12% 59 11 5% 67 0_0%
Pomona 48 7.0%) 57 (lL2%J 78 1.48 7\ 2.22 57 (7%) \3 41_0% 48 0.9% 24 6.2% 70 (13.0'% 73 62_2%) 72 0_0% 67 D.O%
R=cho Palos Verdes 4 10.4% l 118% 7 12 25 4 41_90 22 3.0% 29 16.4% 3 25_5% l 26 2% 49 (' -'1-"b) \8 56% 21 667% \4 7\ 4%
Redcndo Beach 23 (.0% 34 (3_0"i0) 20 4.57 36 5.13 32 2.2% 36 1o_oc;., 34 4.1% 37 2.4% 6 38.0% 37 (19%) 72 0.0% 65 0.6%
Rolling Hills 80 {4)_(1%) 66 { 14_3~·.) 3 36 59 2 45_56 82 (129%) 52 1.5% 38 2.6% 09 ( (>0''-:0j 39 3_1% 50 i(,,l% 4 206_8% 3 177.0%
Rolling Hills Estates 30 1.6%) \\ 4.5% 9 \0.57 \9 10_72 31 2.4% 39 8_1% 65 (7_3%) 22 6_3% 72 (15_1%) 8 17.0% 47 28.5% 30 35.2%
Rosemead 7\ (16.-Hh) 7\ ([JJO,,) 64 \98 \5 15.41 4 84% \\ 56 2% 66 ,~ ";'-0) 46 04% 63 (<16%) 4\ {3 l%) 16 57_6% 10 56 0%
San Dimas 75 (30.5%) 6 5_9% 25 4.11 20 10_30 33 2.1% 20 33.2% 46 l.J% 36 2.5% 43 1.6% 35 (-')%) 27 55_2% \9 561%
San Fernando 49 (7 5%1 30 (1'•'-0l 39 208 43 48\ 58 {;%) 50 3 0% 80 p:uo.·,,; 73 (_lf; (l~·,j 84 (704 0"-·<) 75 ('l"l 7"-'•1 81 (4 4"-o) 74 (11)1)%;
San Gabriel 45 (5.8%) 47 (7.7%) \8 4.81 45 4.70 69 (3,1%) 67 (2_2%) 75 (22.2%) 75 (33.4%•} 4U 0,2% 68 125.9%1 79 (21%) 6\ 3.5%
San Manno 72 (2! 2%) 67 ( 1 S 0°'o) 5 15 44 9 21.50 47 0.4% 58 02% \8 9.1% \5 87% 62 f:C: '!~·o) 64 fl8 )''-;) \5 79 8% \3 726%
Santa Clarita 67 19.7% 32 (24% \4 6.22 2\ 10.14 36 1.7% 43 6.1% 7 15.5% 6\ (8.0%) 25 7.6% 62 (16.4%) 2\ 69.7% \6 58.4%
Santa Fe Sprin •s 24 l.?%) 73 (]Q D"Oi 73 1 66 29 6 27 \9 3.7% 9 72_8% 7\ (li,J:.-,,) 65 i l I ~"-;,j 3\ 6.7% 5 25 4% 411 35 4% 25 43.1%
Santa Monica 46 (6.7%) 42 {5.9%) 26 3.98 35 5.28 30 2.4% 30 16.3% 55 {1.7% 3 23.2% 7 37.0% 3 4LO% 34 40.0% 31 35.1%
S1erra Madre 37 (3.3%) 64 (IJ '"---! 6 12.97 \2 16_57 59 { S%) 6\ (_4%• \2 !!.3% Ill 105% 27 7_5% 53 (7.4%) 23 65 2% 54 122%
Si nal Hill 8\ ((>4.0%) 65 142%) 76 1.52 \8 1L31 4\ 1.3% 6 JOL5% 3\ 4.5% 25 6_1% 20 9.8% 23 2.5% 35 391% 27 4L7%
South El Monte 2\ 0.2% \5 35% " [_J3 23 938 l 100.0% 2 237 l% 50 04% 12 96% 80 (51 7"·'o) l 597% 69 20% 53 \3_2%
South Gate 14 2.4% \4 3.6% 47 2.68 56 3,56 7 6_8% 33 14.6% 54 (1.0%} 43 1.2% 32 6.5% 26 2.0% 58 13.2% % 19.5%
South Pasadena 38 (3')%) 4 77% 55 2.31 70 2.32 \7 40% 55 09% \3 112% 10 55% \4 208% \3 9_0% 29 53 9% 21 55_6%
Temple City 2 12.0% \8 2.2% \3 7.19 \3 16.34 \2 5.7% 4\ 7_7% 26 6.3% 27 5_8% 40 2.5% 45 (5.0%) 2 236.1% 42 22.5%
Terrance \8 2.0% 7 58% 43 2.88 55 3.66 42 12% 27 186% 43 1.9% 23 62% 58 (6 0°'o) 27 1.9% 63 97% 44 21 _4%
Vernon 83 110.4%) 77 pn_9'~'0l 8\ 1.29 77 1.14 79 (9.7%) 77 (51.4%) 84 {100 ]'/0 77 108.1%) 8\ (58.5%) 77 (455 O%i 82 {8.2%) 77 (47.4%
Walnut 74 (20 ~%) 23 (V'o) " 3.49 l 48_92 54 (.:'.%) 2\ 317% 35 3_5% 64 (\D '"'ol 79 {~ l 7"-'o) 46 (52'%) 72 00% 63 07%
West Covina 29 (1.2%1 43 (6 3%) 62 2.07 51 400 7\ (3.9%) 25 21.8% 62 55%) 66 (11.7%) 59 (6_2":0) 411 (2.9%) 54 170% 39 24.4%
2012-2013 LOS ANGELES COUNTY CIVIL GRAND JuRY REPORT \00
CITIES FISCAL HEAL Til, GoVERNANCE AND MANAGEMENT
Exhibit 3: Results aud Rankin2s of Cities on Fiscal Health Criteria
All Funds General Fund
Net Revenue Percent Ratio of Assets to Liabilities Chan!fe in Net Assets General Fund Net Revenue Oaan!fe in General Fund Balance Unassie;ned General Fund Balance
FY2010-l1 FY 2011-12 FY 2010-11 FY 2011-12 FY 2010-11 FY 2011-12 FY 2010-11 FY 2011-12 FY 2010-11 FY 2011-12 FY 2010-U FY 2011-12
C'itv Rank Percent R><ok Percent R><ok Ratio Rank Ratio Rank Percent R><ok Percent R><ok Percent R><ok Percent Rank Percent R><ok Percent R><ok Percent R><ok Percent
West Hollywood 59 (I! S%) 20 LO% 46 2.78 49 423 18 3.9% 46 50% 8 14_7% 4 17_4% 2l 96% 28 1.7% 80 (2 2"-:,) 5l 156%
Westlake Village 41 (4_6%) 54 '10.9% 37 3.13 59 3.16 68 (3.3"/0) 56 0_3% 47 1.2% 13 9_4% 56 (54%) 34 9%) l2 92_7% 4 139.3%
Whittier 22 (G%) 60 1126%\ 40 2.94 30 6.23 37 1.5% 28 18.2% l7 9_3% 55 14 3"-ol 45 0.2% 43 (4.4%) 32 43_7% 26 420%
Avera>e-All Clues (P 5%) \0 2°-'o) 545 892 0_8% 240% (1 7''-;,) {I 5"--,d ( l ~"<>) { 14 5%) 514% 38 3%
Source: Comprehensne Annual Fmanc1al Report (CAFR) or Bas1c FinanCial Statements obtamed from each City
Financial informatlon for FY 2010-11 or FY 2011-12 1-vas not available from the cities of Avalon, Bell, Compton, and Maywood as of April 25. 2013
Financial information for FY 2011-12 was not available from the cities of Azusa, Bradbury, Hawruian Gardens, Huntington Park, Inglewood, La Habra Heights, and Lawndale as of A nl25, 20 I 3
2012-2013 LOS ANGELES COUNTY CJVJLGRAl'-ID JURY REPORT !01
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CITIES FISCAL HEALTH, GOVERNANCE AND MANAGEMENT
Net Revenue Percent-All Funds
Net Revenue Percent is the percent of all revenues remammg after all city expenditures,
Revenues are the amount received by a city from taxes, fees, permits, licenses, interest,
intergovernmental sources, and other sources during the fiscal year, Expenditures are the actual
spending of governmental funds by each city, If a city spends less than received the net revenues
and percentage would be positive, If a city spends more than received in revenues the net
revenues and percentage would be negative, The net revenue percent is calculated by dividing
net revenues by total revenues,
All Funds include each city's general fund as well as any other funds for proprietary or business-
type activities which could include operating public utilities (power, water, parking, refuse
collection, etc,) or other non-governmental type activities,
As the following Exhibit shows, only 21 of the 84 cities spent less on all activities (governmental
and business) during Fiscal2010-11 than revenue received, The remaining 61 cities spent more
than they received in revenue, Both the cities of Vernon and Bradbury spent more than twice
what was received in revenues, On average, cities expended 12,5% more than they received in
revenue during FY 20 I 0-11,
The exhibit also shows that only 22 of the 77 cities spent less on all activities (governmental and
business) during Fiscal2011-12 than revenue received, The remaining 55 cities spent more than
they received in revenue, The City of Vernon spent nearly 84% more than it received in
revenue, On average, cities expended 6,2% more than they received in revenue during FY 2011-
12,
Cities cannot sustain a pattern of spending more than received in revenue, and essentially not
living within their means during the fiscal year, Cities can balance their budgets by spending
down reserve funds, liquidating city assets, or increasing city debt or liabilities, Cities may also
have to make even more substantial reductions in city services,
2012-2013 LOS ANGELES COUNTY CIVIL GRAND JuRY REPORT 103
CITIES FISCAL HEALTH, GOVERNANCE AND MANAGEMENT
Exhibit 4: Total Revenues, Expenditures and Net Revenues (Ranked Highest to Lowest % Net Revenue)
Fiscal Year 2010-11 Fiscal Year 2011-12
Total Total Net Total 0/o Net Total Total Net Total %Net
Rank City Revenues Expenditures Revenues Revenue Rank City Revenues Expenditures Revenues Revenue
1 La Habra Heights $6,456,271 $4,814,020 $1,642,251 25.4% I Rancho Palos Verdes $29,011,389 $25,599,287 $3,412,102 11.8%
2 Temple City $16,420,245 $14,450,445 $1,969,800 12.0% 2 Hermosa Beach $31 '902, 779 $28,502,703 $3,400,076 10.7%
3 La Canada Flintridge $19,534,017 $17,277,831 $2,256,186 11.6% 3 Beverly Hills $183,970,715 $168,405,846 $15,564,869 8.5%
4 Rancho Palos Verdes $28,586,567 $25,621,465 $2,965,102 10.4% 4 South Pasadena $26,985,579 $24,903,588 $2,081,991 7.7%
5 Claremont $39,818,642 $36,444,001 $3,374,641 8.5% 5 Alhambra $77,589,141 $72,938,495 $4,650,646 6.0%
6 Beverly Hills $175,405,113 $165,446,753 $9,958,360 5.7% 6 San Dimas $27,917,381 $26,276,406 $1,640,975 5.9%
7 Irwindale $40,546,295 $38,405,113 $2,141,182 5.3% 7 Torrahce $195,053,630 $183,716,160 $11,337,470 5.8%
8 Gardena $55,501,464 $52,863,734 $2,637,730 4.8% 8 Hidden Hills $1,986,620 $1,876,183 $110,437 5.6%
9 Inglewood $168,424,179 $160,475,460 $7,948,719 4.7% 9 Claremont $31,059,827 $29,552,680 $1,507,147 4.9%
10 Manhattan Beach $56,452,978 $54,010,853 $2,442,125 4.3% 10 Norwalk $67,602,693 $64,503,803 $3,098,890 4.6%
11 LaVerne $43,289,901 $41,424,471 $1,865,430 4.3% II Rolling Hills Estates $7,471,225 $7,132,456 $338,769 4.5%
12 Alhambra $86,087,510 $82,733,851 $3,353,659 3.9% 12 Bellflower $36,546,102 $35,047,877 $1,498,225 4.1%
13 Hermosa Beach $30,816,246 $29,665,905 $1,150,341 3.7% 13 Gardena $60,252,815 $57,803,736 $2,449,079 4.1%
14 South Gate $73,042,672 $71,273,643 $1,769,029 2.4% 14 South Gate $68,837,572 $66,381,334 $2,456,238 3.6%
15 Lakewood $63,285,286 $61,764,234 $1,521,052 2.4% 15 South El Monte $17,648,546 $17,026,023 $622,523 3.5%
16 Baldwin Park $52,944,564 $51,798,267 $1,146,297 2.2% 16 Hawthorne $\02,220,018 $98,760,719 $3,459,299 3.4%
17 Culver City $133,585,980 $130,820,129 $2,765,851 2.1% 17 Manhattan Beach $59,435,583 $57,509,547 $1,926,036 3.2%
18 Torrance $189,407,666 $185,597,318 $3,810,348 2.0% 18 Temple City $15,820,927 $15,475,107 $345,820 2.2%
19 Palmdale $141)56,940 $139,337 830 $2,019,110 1.4% 19 Duarte $19,196,567 $18,998,341 $198,226 1.0%
20 Ha\vthorne $186,430,835 $183,901,004 $2,529,831 1.4% 20 West Hollywood $91,152,934 $90,237,428 $915,506 1.0%
21 South El Monte $20,521,754 $20,476,305 $45,449 0.2% 21 Lakewood $54,708,076 $54,346,475 $361,601 0.7%
22 Whittier $78,336,992 $78,342,050 ($5,058) (.0%,) 22 Calabasas $30,547,600 $30,485,913 $61,687 0.2%
23 Redondo Beach $88,177,849 $88,219,070 ($41,2)1) (.0%) 23 Walnut $20,430,639 $20,435,518 ($4,879) (.0%)
24 Santa Fe Springs $80,476,230 $81,024,809 ($548.579) (.7%) 24 Agoura Hills $17,919,772 $17,971,461 ($5l.6S9J (.3':";,)
25 Bellflower $36,027,628 $36,332,559 ($304,931) (.&%) 25 La Verne $38,932,070 $39,181,093 ($249,023) (.6%)
26 Long Beach $744,321,000 $750,896,000 ($6,575,000) ( 9'%) 26 La Canada Flintridge $\8,415,244 $18,566,862 ($151.618) I.S'l,·U)
27 La Mirada , _j48,688,90 1 ' , $49,179,035 ($490,134) (LO%) 27 Montebello .. L__ $57,?58,906 $58,306,019 ~47,113) _(.9%)
2012-2013 LOS ANGELES COUNTY CIVIL GRAND JURY REPORT 104
CITIES FISCAL HEALTH, GOVERNANCE AND MANAGEMENT
Exhibit 4: Total Revenues, Expenditures and Net Revenues (Ranked Highest to Lowest % Net Revenue)
Fiscal Year 2010-11 Fiscal Year 2011-12
Total Total Net Total %Net Total Total Net Total %Net
Rank Citv Revenues Expenditures Revenues Revenue Rank City Revenues Exvcnditures Revenues Revenue
28 Palos Verdes Estates $17,223,619 $17,403,826 ($180.207) ( l_ 0"/Q) 28 E! Monte $90,057,014 $91,259,475 ($ 1.2(0 ,461) (IJ~:;,)
29 West Covina $95,268,424 $96,437,051 ($1, 168,627) (l .2%) 29 La Mirada $47,736,944 $48,379,569 ($642,625) (1.3%}
30 Rolling Hills Estates $7,712,444 $7,832,849 ($PUA05l (1.6%) 30 San Fernando $24,146,351 $24,538,873 (.'t392,522l (1.6%)
31 Duarte $34,095,894 $34,632,208 ($536,314) (L6%) 31 Commerce $67,986,383 $69,373,238 ($1,386,855) (2.0%)
32 Hawaiian Gardens $25,743,947 $26,346,129 ($6()2,!8)) (2_3%i 32 Santa Clarita $152,265,233 $155,915,292 ($3_050,059) (! .4%>)
33 Bell Gardens $36,168,220 $37,050,365 ($887,145) (2.4%) 33 Baldwin Park $48,524,783 $49,903,793 ($1,379,010) (2.8%)
34 Montebello $66,692,379 $68,373,345 (SL680:Y66) (2_5~·<,j 34 Redondo Beach $91,638,205 $94,354,704 {$2_7!6,494) (:j.Q~-<i)
35 ElS"gt!ndo $56,848,924 $58,596,145 ($1,747,221) (3,1%) 35 Cerritos $109,564,187 $113,114,628 ($3,550,441) (3.2%)
36 Monterey Park $55,463,357 $57,263,879 ($!,800.57?) r3.2%,) 36 Glendora $30,977,345 $32,193,962 ($1 .216,617) (3.9%)
37 Sierra Madre $12,843,017 $13,269,118 ($426,\01) (3Y!U) 37 Arcadia $56,153,430 $58,500,098 {$2,346,668) (4.2°/o)
38 South Pasadena $26,638,387 $27,690,116 !51,051.729) (3_()of;,) 38 Paramount $37,787,256 $39,563,203 ($L775,9471 (4_7%)
39 Calabasas $36,731,853 $38,212,438 1$1,480,585) (4.0%) 39 Palos Verdes Estates $17,091,040 $17,908,727 ($817,687) (4.8%)
40 Huntington Park $63,437,740 $66,277,764 (52,840.024) (4_5%) 40 Lynwood $45,862,239 $48,097,169 ($2.234,930) (4.9%)
41 Westlake Village $14,500,353 $15,172,774 ($672,421) (4.6%1 41 Palmdale $111,567,854 $117 835,268 ($6267,414) (5.6%)
42 Lomita $10,296,872 $10,817,426 ($:"20.554) (5_!~/0) 42 Santa Monica $511,734,482 $542,070,392 (~30.335,91 0) (:'1.9%)
43 Los Angeles $6,318,612,000 $6,651,535,000 ($332,923.()00) (5.3%) 43 West Covina $85,979,949 $91,360,471 ($5,380,522) (6.3%)
44 Glendora $36,854,996 $38,914,427 ($2,059.431) (5_6~:0) 44 Los Angeles $6,576,754,000 $7,011,640,000 ($434.8S6.0Cl0} (6.6%)
45 San Gabriel $38,303,555 $40,538,198 ($2,234,643) (5_8%1 45 La Puente $15,713,794 $16,816,779 ($1 ,102,985) (7.0%)
46 Santa Monica $396,641,357 $423,138,169 ($26,4%,8!2) (6. 7~,-0) 46 Bell Gardens $33,200,350 $35,618,158 ($2.417.808! {7.3'~·0)
47 Norwalk $89,562,951 $95,718,805 ($6, 155.854) (6.9%} 47 San Gabriel $36,799 301 $39,631,027 ($2.831,726) (7.7%)
48 Pomona $176,700,431 $189,109,432 ($17_409.(1()1) (7_0'%) 48 Lomita $10,488,783 $11_312,101 ($8?3,318) (7.S':!·G)
49 San Fernando $31,472,500 $33,826,270 ($2,353,770) (7.5%) 49 Lancaster $106,994,246 $116,817,014 ($9,822,768j (9.2%)
50 La Puente $15,486,398 $16,674,410 ($1,188.0121 (7_r/;ll 50 Monterey Park $52,083,910 $56,967,467 ($4.883.557) (9.4'%)
51 Pasadena $310,528,675 $336,154,767 1$25,626,092) (83%) 51 Industry $167,355,363 $183,339,067 ($15,983,704) (9.6%)
52 Artesia $10,989,185 $11,914,997 {$425.8 12) ( 8.4'~·"0) 52 lnvindale $29,430,380 $32,307,998 ($2,877.618) (9.8~·0)
53 Glendale $296,327,000 $323,168,000 ($26,841 ,000) (9.1%) 53 Monrovia $50,889,132 $55,958,172 ($5,069,040) c10 0%1 I
54 Burbank $230,59I,Q_QQ_ L_ $253,1 OS,OOQ _($22.5!4.0{)0) \ () .8'~/;,) ~~ Westlake Village $15,173,722 $16,828,541 {$1.654.819.!_ ___ (10,9%)!
2012-2013 LOS ANGELES COUNTY CIVIL GRAND JURY REPORT 105
CITtES FISCAL HEALTH, GOVERNANCE AND MANAGEMENT
Exhibit 4: Total Revenues, Expenditures and Net Revenues (Ranked Highest to Lowest % Net Revenue)
Fiscal Year 2010-11 Fiscal Year 2011-12
Total Total Net Total %Net Total Total Net Total %Net
Rank City Revenues Expenditures Revenues Revenue Rank City Revenues Expenditures Revenues Revenue
55 Cerritos $101,044,955 $l11,246,026 ($10,201,071) (10_1%) 55 Malibu $28,421,773 $31,565,940 ($3,144,167) tiLl%}
56 El Monte $91,497,196 $101,031,712 ($9,5?.4,516) ( ]0_4".-{,J 56 Glendale $258,957,000 $287,936,000 iS18_'-l79,000) ([ l_ '"~~)
57 Lynwood $51,010,935 $56,896,279 ($5,885,344) {1 L5%) 57 Pomona $14 7, 673,782 $164,237,168 f$16.563,386) (l L2.%)
58 Carson $106,849,098 $I 19,326,096 ($17,476,998) (ll 7":<:,") 58 Cudahy $10,981,676 $12,298,062 ($]J16,386) (17.0%)
59 West Hollywood $93,069,529 $104,010,240 ($10,940,711) (11.8%) 59 Pico Rivera $63,549,162 $71,405,949 ($U56,787) (12.4%}
60 Industry $192,308,249 $215,346,063 ($2\0F814J ( 12.0'~/~) 60 Whittier $68,696.215 $77,344,117 ($i(647,9U2) (12.6%)
61 Commerce $75,567,672 $84,678,025 ($9, 110,353) {12.1%) 61 E1 Segundo $56,220,110 $63,791,780 ($7,571,670) (13.5%}
62 Paramount $50,529,929 $56,826,715 (56,296,786) (123~/;,j 62 Downey $77,559,000 $88,020,000 (SlOA6l.Ull0) {L\.5'%i
63 Arcadia $61,191,647 $70,570,837 ($9,179,190) (15.3~·0) 63 Covina $37,960,839 $43,156,145 ($5_195,306) (13.7%)
64 Pico Rivera $61,415,487 $71,893,503 ($10.47S.OI6) (17_1%J 64 Sierra Madre $1l,l82,144 $12,712,931 ($!530,7'/1,7) ( l_:u~~nJ
65 Downey $81,960,000 $96,542,000 ($14,582,(100) (17.8%) 65 Slgna1Hill $27,749,195 $31,682,253 ($3,933,058) 04.2%)
66 Covina $44,510,982 $52,454,325 ($7,943.343) (17.8%) 66 Rolling Hills $1,634,820 $1,868,965 f$234,145) (!43%)
67 Santa Clarita $133,197,193 $159,438,000 ($26,240,807) (19.7%) 67 San Marino $22,782,822 $26,206,773 ($3.423,951) (}5.0%)
68 Azusa $45,373,595 $54,357, Ill ($8,983.5!6) { 10_8'>:,) 68 Culver City $107,089,835 $123,637,733 ($\6,547)N8J ( l:5_5uiU)
69 Lancaster $112,223,448 $136,732,232 ($24,508,784) (21.8%) 69 Burbank $212,012,000 $247,189,000 ($35, 177,000) (16.6%)
70 Hidden Hills $1,941,845 $2,393,563 ($451.7181 (23.3%>J 70 Artesia $10,236,246 $II ,988,734 ($1.752,4881 i J 7. ~~~(,)
71 Rosemead $32,963,479 $41,668,718 ($8,705,239) (26.4'}'0) 71 Rosemead $30,363,930 $35,614,356 ($5.250,426) {17.3%)
72 San Marino $23,745,622 $30,214,969 {$6,469, 147) (27.2%J 72 Pasadena $296,816,607 $350,327,610 (S5351 Ul03) (J8.(Y':;,)
73 Malibu $25,842,406 $33,393,351 ($7,550.945) (29.2%) 73 Santa Fe Springs $68,735,329 $81,778,621 ($13,043,292) (19.0%)
74 Walnut $20,725,302 $26,788,349 ($6,063.047) (2QJG:(,) 74 Carson $99,831,047 $124,270,497 ($24A39A50) P4.5%)
75 San Dimas $31,327,423 $40,866,676 ($9,539,253) (30.5%) 75 Long Beach $678,093,000 $848,789,000 ($170,696,0001 (25.2{}/n)
76 Diamond Bar $25,035,214 $33,040,359 {58,005,145) (32.fJ'~-·q_l 76 Diamond Bar $26,330,887 $43,649,908 ($!7,H9JPIJ (65.8%)
77 Lawndale $21,006,256 $29,229,256 ($8,223,000) (39J%) 77 Vernon $35,483,086 $65,241,372 ($29,758,286) (83.9%)
78 Monrovia $55,044,292 $77,249,492 {$22.205,20()) ( 40.3~~;}) NA Azusa
79 Agoura Hills $22,136,934 $31,318,579 ($9,181,645) (41.5%) NA Bradbury
80 Rolling Hills $1,805,!17 $2,627,724 ($822,607') (45.6%) NA Hawaiian Gardens
81 Signal Hill $32,521,138 $53,326,400 ($20,805262) (64.0%) NA Huntington Park
2012-2013 LOS ANGELES COUNTY CIVIL GRAND JURY REPORT 106
CITIES FISCAL HEALTH, GOVERNANCE AND MANAGEMENT
Exhibit 4: Total Revenues, Expenditures and Net Revenues (Ranked Highest to Lowest % Net Revenue)
Fiscal Year 2010-11 Fiscal Year 2011-12
Total Total Net Total %Net Total Total Net Total %Net
Rank City Revenues Expenditures Revenues Revenue Rank City Revenues Expenditures Revenues Revenue
82 Bradbury $1,276,231 $2,656,941 ($1JS\U10) (IOiU'%} NA Inglewood
83 Vernon $43,508,272 $91,538,194 ($48,029,922) (110.4%) NA La Habra Heigb.ts
84 Cudahy $12,766,738 $34,508,045 ($21, 741307) ( 170.3%.) NA Lawndale
Source: Comprehensive Annual Financial Report (CAFR) or Basic Financial Statements obtained from each City.
Financial information for FY 2010-11 or FY 2011-12 was not available from the cities of Avalon, Bell, Compton, and Maywood as of April 25, 2013.
Financial information for FY 20 ll-12 was not available from the cities of Azusa, Bradbury, Hawaiian Gardens, Huntington Park, Inglewood, La Habra Heights, and
Lawndale as of April25, 2013.
2012-2013 Los ANGELES COUNTY CtVIL GRAND JURY REPORT 107
CITIES fiSCAL HEALTH, GOVERNANCE AND MANAGEMENT
Ratio of Assets to Liabilities-All Funds
The Ratio of Assets to Liabilities is the total assets of a city divided by the total liabilities of a
city. City assets include funds available for use by the city, as well as the value of any capital
assets such as land, buildings and improvements, machinery and equipment, and infrastructure.
Liabilities include accounts payable and long-term debt such as bonds, certificates of
participation, pension obligations, and insurance claims. Net assets are the total city assets less
total city liabilities.
The ratio of assets to liabilities is calculated by dividing a city's total assets by its total liabilities.
This ratio is an indicator of a city's solvency and ability to meet long-term obligations, including
financial obligations to creditors, employees, taxpayers, and suppliers; as well as its service
obligations to its residents. Ideally, cities would at minimum, have twice as many assets as
liabilities. This would give them an asset to liability ratio of2.0 or better.
All Funds include each city's general fund as well as any other funds for proprietary or business-
type activities which could include operating public utilities (power, water, parking, refuse
collection, etc.) or other non-governmental type activities.
As the following Exhibit shows, 63 of the 84 cities ratio of total assets to total liabilities were
greater than 2.0 in FY 2010-2011. The remaining 21 cities had total asset to total liability ratios
less than 2.0. This indicates that several cities solvency may be at risk, as may their ability to
meet future obligations. The City of Huntington Park had the lowest ratio at .62. The average
ratio of total assets to liabilities was 5.45.
The exhibit also shows that 73 of the 77 cities ratio of total assets to total liabilities was greater
than 2.0 in FY 2011-2012. The remaining 4 cities had total asset to total liability ratios less than
2.0. The City of Vernon had the lowest ratio at 1.14. The average ratio of total assets to
liabilities was 8.92.
2012-2013 LOS ANGELES COUNTY CIVIL GRAND JURY REPORT 108
CITIES FISCAL HEALTH, GOVERNANCE AND MANAGEMENT
Exhibit 5: Ratio of Assets to Liabilities (Ranked Highest to Lowest Asset/ Liability Ratio)
Fiscal Year 2010-11 Fiscal Year 2011-12
Total Total Net Asset!Liab Total Total Net Asset/Liab
Rank City Assets Liabilities Assets Ratio Rank City Assets Liabilities Assets Ratio
I Palos Verdes Estates $88,420,940 $1,752,074 $86,668,866 50.47 I Walnut $115,898,582 $2,369,123 $113,529,459 48.92
2 Bradbu"' $5,872,368 $119,172 $5,753,196 49.28 2 Rollin~ Hills $6,123,294 $134,391 $5,988,903 45.56
3 Rolling Hills $6,064,186 $165 740 $5,898,446 36.59 3 Palos Verdes Estates $84,101,994 $1,869,782 $82,232,212 44.98
4 Diamond Bar $427,954,451 $17,170,854 $410,783,597 24_92 4 Rancho Palos Verdes $205,133,651 $4,895,?37 $200,238,414 41.90
5 San Marino $213,879,205 $13-,848;139 $200 03 I ,066 15.44 5 Irwindale $180,683,695 $4,508,093 $176,175,602 40.08
6 Sierra Madre $237,392,680 $18,307,775 $219,084,905 \2_97 6 Cerritos $521 ,22? ,864 $13,299,104 $507,923,760 39.19
7 Rancho Palos Verdes $183,351,452 $14,962,024 $168,389,428 12.25 7 Duarte $99,124,139 $2,902,268 $96,221,871 34.15
8 La Habra Heights $13,077,532 $1,112,685 $11,964,847 1 1.75 8 Diamond Bar $422,435,232 $16,574,686 $405,860,546 25.49
9 Rolling Hil1s Estates $11,410,435 $1 079,312 $10,331,123 10.57 9 San Marino $209,846,258 $9 760,547 $200,085,711 21.50
10 Hidden Hills $7,803,640 $740,696 $7,062,944 10.54 10 Lancaster $1,186,102,650 $65,739,528 $1,120,363,122 18.04
11 Lakewood $196,928,360 $22,239,508 $174,688,852 8.85 11 Lakewood $230,380,255 $12,818,746 $217,561,509 17.97
12 Hermosa Beach $94,678,094 $12,733,849 $81,944,245 7.44 12 Sierra Madre $232,472,623 $14,030,072 $218,442,551 16_57
13 Temple City $70,306,143 $9,784,669 $60,521,474 7_19 13 Temple City $69,449,861 $4,249,629 $65,200,232 1634
14 Santa Clarita $1,065,979,745 $171,394,178 $894,585,567 6.22 14 Cudahy $27,660,302 $L772,078 $25,888,224 15.61
15 La Verne $159,341,073 $29,061,008 $130,280,065 5.48 15 Rosemead $84,020,443 $5,451,588 $78,568,855 15.41
16 El Segundo $180,643,289 $32,996,639 $147,646,650 5 47 16 Hidden Hills $7,709,555 $630,966 $7,078,589 \2_22
17 Lomita $54,868,086 $10,991,133 $43,876,953 4.99 17 La Mirada $215,552,893 $18,941,473 $196,611,420 11.38
18 San Gabriel $70,957,616 $14,737,559 $56,220,057 4.81 18 Signal Hill $137,305,258 $12,138,801 $125,166,457 II .31
19 ElMonte $588,985,234 $123,456,692 $465,528,542 4.77 19 Rolling Hills Estates $12,316,003 $1,148,403 $11,167,600 10.72
20 Redondo Beach $281,608,087 $61,583,267 $220,024,820 4.57 20 San Dimas $113,932,782 $11,061,620 $102,871,162 10_30
21 Duarte $97,086,406 $21,786,945 $75,299,461 4.46 21 Santa Clarita $1,053,397,301 $103,905,196 $949,492,105 10_14
22 Claremont $180,897,011 $40,689,331 $140,207,680 4.45 22 Paramount $144,711,469 $14,555,553 $130,155,916 9_94
23 Arcadia $250,144,554 $58,079,723 $192,064,831 4_31 23 South El Monte $19,907,415 $2,121,622 $17,785,793 9.38
24 Manhattan Beach $233,817,711 $56,806,938 $177,010,773 4_12 24 Agoura Hills $96,625,546 $12,809,549 $83,815,997 7_54
25 San Dimas $101,991,554 $24,826,864 $77,164,690 4_11 25 Bell Gardens $191,871 967 $26,447,660 $165,424,307 7.25
26 Santa Monica $2,099,921,023 $527,963,742 $1,571,957,281 3_98 26 Palmdale $990,239,602 $138,797,258 $851,442,344 7_13
27 Glendale $2,226,232,000 $570,565,DOO $1,655,667,000 3.90 27 LaVerne $154,179,006 $22,230,669 $131,948,337 6.94
2012-2013 LOS ANGELES COUNTY CIVIL GRAND JURY REPORT 109
CITIES FISCAL HEALTH, GOVERNANCE AND MANAGEMENT
Exhibit 5: Ratio of Assets to liabilities {Ranked Highest to Lowest Asset I liability Ratio)
Fiscal Year 2010-11 Fiscal Year 2011-12 .
Total Total Net Asset/Liab Total Total Not Asset/Liab
Rank City Assets Liabilities Assets Ratio Rank City Assets Liabilities Assets Ratio
28 Lancaster $1,201,979,276 $309,840,170 $892,139,106 3 88 28 Arcadia $211,749,407 $30,596,842 $181,152,565 6_92
29 Agoura Hills $116,577,048 $30,528,813 $86,048,235 3.82 29 Santa Fe Springs $224,620,141 $35,848,313 $188,771,828 6.27
30 Downey $376,504,000 $100,120,000 $276,384,000 3.76 30 Whittier $324,214,159 $52,081,755 $272,132,404 6_23
31 Palmdale $999,515,730 $267,635,592 $731,880,138 3.73 31 Hermosa Beach $96,306,380 $16,337,945 $79,968,435 5.89
32 Burbank $1,880,182,000 $534,489,000 $1,345,693,000 3.52 32 Norwalk $274,460,360 $48,158,429 $226,301,931 5_70
33 Glendora $225,395,493 $64,330,673 $161,064,820 3.50 33 E!Monte $594,012,036 $109,264,631 $484,747,405 5_44
34 Walnut $120,777,488 $34,584,543 $86,192,945 3.49 34 Lomita $53,189,162 $9,981,603 $43,207,559 5.33
35 Calabasas $142,042,050 $40,792,991 $101,249,059 3.48 35 Santa Monica $2,255,578,274 $427,105,828 $1,828,472,446 5.28
36 Bellflower $101,310,675 $30,777,138 $70,533,537 3_29 36 Redondo Beach $300,717,204 $58,608,458 $242,108,746 5_13
37 Westlake Village $58,313,392 $18,618,023 $39,695,369 3.13 37 Glendora $204,385,316 $40,221,117 $164,164,199 5.08
38 Malibu $149,475,186 $49,713,408 $99,761,778 3 01 38 Culver City $472,606,147 $93,084,870 $379,521,277 5.08
39 San Fernando $90,834,622 $30,503,287 $60,331,335 2.98 39 Artesia $20,335,920 $4,023,492 $16,312,428 5.05
40 Whittier $348,490,082 $118,356,840 $230,133,242 2_94 40 Burbank $1,815,963,000 $364,619,000 $1,451,344,000 4.98
41 Bell Gardens $153,430,820 $52,319,436 $101,111,384 2.93 41 Claremont $170,116,198 $34,524,762 $135,591,436 4.93
42 Gardena $180,905,947 $62,498,588 $118,407,359 2.89 42 Glendale $2,059,200,000 $420,737,000 $1,638,463,000 4_89
43 Torrance $650,556,692 $226,219,659 $424,337,033 2.88 43 San Fernando $78,474,183 $16,305,374 $62,168,809 4.81
44 Lawndale $81,868,788 $28,703,834 $53,164,954 2.85 44 Downey $369,282,000 $77,836,000 $291,446,000 4.74
45 Cerritos $518,137,390 $183,36{),486 $334,776,904 2.83 45 San Gabriel $68,!98,445 $14,507,466 $53,690,979 4.70
46 West Hollywood $365,313,019 $131,186,941 $234,126,078 2.78 46 Bellt1ower $103,767,025 $22,358,267 $81,408,758 4.64
47 South Gate $376,365,993 $140,614,854 $235,751,139 2.68 47 El Segundo $183,826,202 $40,961,299 $142,864,903 4.49
48 Carson $609,443,656 $229,799,077 $379,644,579 2.65 48 Baldwin Park $190,905,224 $42,620,143 $148,285,081 4.48
49 Covina $221,644,683 $84,990,065 $136,654,618 2.61 49 West Hollvwood $322,446,228 $76,195,168 $246,251,060 4.23
50 La Canada Flintridge $109,044,832 $41,985,623 $67,059,209 2_60 50 Manhattan Beach $241,463,953 $59,289,301 $182,174,652 4_07
51 Beverly Hills $1,078,152,658 $422,582,158 $655,570,500 2.55 51 West Covina $330,435,933 $82,658,973 $247,776,960 4.00
52 Alhambra $296,469,828 $119,622,630 $176,847,198 2.48 52 Alhambra $276,233,851 $73,299,805 $202,934,046 3.77
53 Lynwood $238,731,698 $96,479,834 $142,25!,864 2.47 53 Covina $176,604,781 $47 891,935 $128,712,846 3.69 !
54 Pico Rivera $347,770,725 $149,661,007 $198,109,718 2.32 54 Pico Rivera $412,274,202 $112,231,407 $300,042,795 3.67
2012-2013 Los ANGELES COUNTY C!V!LGRANDJURY REPORT 110
CITIES FISCAL HEALTH, GOVERNANCE AND MANAGEMENT
Exhibit 5: Ratio of Assets to Liabilities {Ranked Highest to Lowest Asset I Liability Ratio)
Fiscal Year 2010-11 Fiscal Year 20 ll-12
Total Total Net AsseULiab Total Total Net Asset/Liab
Rank c;ty Assets Liabilities Assets Ratio Rank Ci~· Assets Liabilities Assets Ratio
55 South Pasadena $144,547,447 $62,543,545 $82,003,902 2.31 55 Torrance $692,737,932 $189,521,542 $503,216,390 3.66
56 Baldwin Park $]88,761,132 $82,777,566 $105,983,566 2_28 56 South Gate $351,583,719 $98,888,969 $252,694,750 3.56
57 Long Beach $7,893,542,000 $3,503,942,000 $4,389,600,000 2.25 57 Calabasas $141,403,315 $40,198,947 $101,204,368 3.52
58 Irwindale $227,433,081 $101,140,971 $126,292,110 2.25 58 Lynwood $198,530,985 $57' 991 ,202 $140,539,783 3.42
59 La Puente $65,715,521 $29,478,455 $36,237,066 2.23 59 Westlake Village $58,271,190 $18,459,480 $39,811,710 3.16
60 Norwalk $310,876,969 $141,534,883 $169,342,086 2.20 60 Monterey Park $181,010,277 $60,123,631 $120,886,646 3_01
61 Paramount $176,074,523 $82,761,827 $93,312,696 2.13 61 MaJibu $144,784,540 $49,149,344 $95,635,196 2_95
62 West Covina $393,668,391 $190,242,427 $203,425,964 2_07 62 Gardena $176,980,217 $60,851,921 $116,128,296 2_91
63 Pasadena $2,130,027,981 $1,057,963,954 $1,072 064 027 2.01 63 Beverly Hills $1 096,047,778 $386,615,376 $709,432,402 2.83
64 Rosemead $101,546,907 $51,231,316 $50,315,591 1.98 64 La Puente $61,958,667 $21,939,611 $40,019,056 2_82
65 La Mirada $187,410,425 $101,432,571 $85,977,854 1.85 65 La Canada Flintridge $109,404,743 $41,057,351 $68,347,392 2.66
66 Industry $1,318,370,797 $713,739,635 $604,631,162 1.85 66 Monrovia $147,325,528 $55,616,717 $91,708,811 265
67 Artesia $34,469,124 $19,520,803 $14,948,321 1.77 67 Hawthorne $210,886,565 $84,148,643 $126,737,922 2.51
68 Los Angeles $48,314,850,000 $27,828,798,000 $20,486,052,000 1.74 68 Montebello $187,942,699 $77,447,983 $110_494,716 2.43
69 CulverCitv $501,853,833 $290,221,863 $211,631,970 1.73 69 Long Beach $7,651,596,000 $3,195,961,000 $4,455,635,000 2.39
70 Monterey Park $206,689,014 $120,080,758 $86,608,256 1.72 70 South Pasadena $145,516,887 $62,739,288 $82,777,599 2.32
71 Azusa $309,924,813 $182,897,208 $127,027,605 1.69 71 Pomona $668,336,761 $300,869,530 $367,467,231 2.22
72 Commerce $239,293,851 $141,490,074 $97,803,777 L69 72 Industry $1,072,760,770 $505,840,188 $566,920,582 2.12
73 Santa Fe Springs $274,645,725 $165,374,866 $109,270,859 1.66 73 Pasadena $2,238,931,695 $1,096,733,295 $1,142,198,400 2.04
74 Inglewood $567,569,063 $353,685,792 $213,883,271 1.60 74 Carson $123,719,473 $63,174,711 $60,544,762 I 96
75 Hawaiian Gardens $67,599,243 $44,331,328 $23,267,915 1.52 75 Los Angeles $49,152,203,000 $27,736,333,000 $21,415,870,000 1.77
76 Signal Hill $182,250,557 $120,132,168 $62,118,389 I .52 76 Commerce $218,084,817 $135,097,508 $82,987,309 1.61
77 Montebello $236,456)71 $156)10,153 $80,346,018 1.51 77 Vernon $690,600,768 $608,242,470 $82,358,298 114
78 Pomona $798,930,067 $538,256,843 $260,673,224 1.48 NA Azusa
79 Hawthorne $212,647,750 $154,609,911 $58,037,839 1.38 NA Bradbury
80 Monrovia $188,236,546 $144,333,135 $43,903,411 uo NA Hawatian Gardens
81 Vernon $799,130,095 $617,439,595 $181,690,500 1.29 NA Huntington Park
2012-2013 LOS ANGELES COUNTY CIVIL GRAND JURY REPORT 111
CITIES FISCAL HEALTH, GoVERNANCE AND MANAGEMENT
Exhibit 5: Ratio of Assets to Liabilities (Ranked Highest to Lowest Asset I Liability Ratio)
Fiscal Year 2010-11 Fiscal Year 2011-12
Total Total Net Asset!Liab Total Total Net Asset/Liab
Rank City Assets Liabilities Assets Ratio Rank City Assets Liabilities Assets Ratio
82 Cudahy $34,358,80! $26,643,892 $7,714,909 129 NA Inglewood
83 South El Monte $45,102,055 $39,775,366 $5,326,689 1.13 NA La Habra Heights
84 Huntington Park $151,87!,161 $244,914,916 ($9.1,043,755_! 0_62 NA Lawndale
Source: Comprehensive Annual Financial Report (CAFR) or Basic Financial Statements obtained from each City.
Financial information for FY 2010-11 or FY 20 11-12 was not available from the cities of A val on, Bell, Compton, and Maywood as of April 25, 2013.
Financial information for FY 2011-12 was not available from the cities of Azusa, Bradbury, Hawaiian Gardens, Huntington Park, Inglewood, La Habra Heights, and
Lawndale as of April 25, 2013.
2012-2013 Los ANGELES COUNTY CIVIL GRAND JURY REPORT 112
CITIES FISCAL HEALTH, GOVERNANCE AND MANAGEMENT
Change in Net Assets-All Funds
Change in Net Assets is the difference from the beginning of the fiscal year to the end of the
fiscal year in the total city assets minus total city liabilities. This change indicates the extent to
which total city assets are increasing or decreasing. Ideally, city net assets would be stable or
increasing. Declining net assets indicate cities are spending down their assets in order to meet
current financial obligations. The change in net assets is calculated by subtracting the previous
fiscal year's net assets for each city from the current year's net assets. If the result is a positive
number the net assets are increasing, if a negative number the net assets are decreasing.
All Funds include each city's general fund as well as any other funds for proprietary or business-
type activities which could include operating public utilities (power, water, parking, refuse
collection, etc.) or other non-governmental type activities.
As the following exhibit shows, 52 of the 84 cities total net assets increased during FY 20 I 0-11.
The remaining 32 cities net assets declined during FY 2010-11. The exhibit also shows that 58
of the 77 cities total net assets increased during FY 2011-12. The remaining 19 cities net assets
declined during FY 2011-12. The average change in net assets was 0.8% in 2010-11, and 24%
for FY 2011-12. A positive percentage change indicates that the city's financial position is
improving, while a negative percentage change indicates that the city's financial position is
deteriorating.
2012-2013 LOS ANGELES COUNTY CIVIL GRAND JURY REPORT 113
CITIES FISCAL HEALTH, GOVERNANCE AND MANAGEMENT
Exhibit 6: Chan2e in Net Assets (Ranked Positive to Ne2ative Chan2e in Net Assets)_
Fiscal Year 2010-11 Fiscal Year 2011-12
Beginning Ending Change in Change in Beginning Ending Change in Change in
Rank City Net Assets Net Assets Net Assets Net Assets Rank City Net Assets Net Assets Net Assets Net Assets
1 South El Monte $2,663 813 $5,326,689 $2,662,876 100.0% 1 Cudiliy $7,173,952 $25,888,224 $18,714,272 260.9%
2 La Mirada $76,937,205 $85,977,854 $9,040,649 11.8% 2 South El Monte $5,?76,689 $17,785,793 $12,509,104 237.1%
3 Irwindale $116,423 063 $126,292,110 $9,869,047 8.5% 3 Monrovia $34,771,983 $91 708,811 $56,936,828 163.7%
4 Rosemead $46,401,401 $50,315,591 $3,914,190 8.4% 4 La Mirada $85,977,854 $196,611,420 $1 !0,633,566 128.7%
5 Bellflower $65,202,419 $70,533,537 $5 331,118 8.2% 5 Havvthorne $58,037 839 $126,737,922 $68,700,083 118.4%
6 Alhambra $163,529,822 $176,847,198 $13,317,376 8.1% 6 Signal Hill $62,118,389 $125,166,457 $63,048,068 101.5%
7 SouthGate $220,778,915 $235,751,139 $14,972,224 6.8% 7 Culver City $209,781,126 $379,521,277 $169,740,151 80.9%
8 Beverly Hills $614,725,670 $655,570,500 $40,844,830 6.6% 8 Pico Rivera $165,900,924 $300,042,795 $134,141,871 80 9%
9 Montebello $75,599,044 $80,346,018 $4 746,974 6.3% 9 Santa Fe Springs $109,270 859 $188,771,828 $79,500,969 72.8%
10 La Canada Flintridge $63,263,101 $67,059,209 $3,796,108 6.0% 10 Bell Gardens $101,111,384 $165,424,307 $64,312,923 63.6%
11 Long Beach $4,145,131,000 $4,389,600,000 $244,469,000 5.9% 11 Rosemead $50,315,591 $78,568,855 $28,253,264 56.2%
12 Temple Citv $57,233,673 $60,521,474 $3,287,801 5.7% 12 Cerritos $334,776,904 $507,923,760 $173,146,856 51.7%
13 Havvthorne $54,890,570 $58,037,839 $3,147,269 5.7% 13 Pomona $260,673,224 $367,467,231 $106,794,007 41.0%
14 Industry $571,843,610 $604,631,162 $32,787,552 5.7% 14 Irwindale $125,553,473 $176,175,602 $50,6?2, 129 40.3%
15 Calabasas $96,242,704 $101,249,059 $5,006,355 5.2% 15 Baldwin Park $105,983,566 $148,285,081 $42,301,515 39.9%
16 Duarte $71,674,385 $75,299,461 $3,625,076 5.1% 16 Monterey Park $86,608,256 $120,886,646 $34,278,390 39.6%
17 South Pasadena $78,836,763 $82,003 902 $3,167,139 4.0% 17 Paramount $93,312,696 $130 155,916 $36,843,220 39.5%
18 West Hollywood $225,262,308 $234,126,078 $8,863,770 3.9% 18 Montebello $80,346,018 $110,494,716 $30.148,698 37.5%
19 Santa Fe Springs $105,335,804 $109,270,859 $3,935,055 3.7% 19 Norwalk $169,342,086 $226,301 93 t $56,959,845 33.6%
20 Pico Rivera $191,918,476 $198,109,718 $6,191,242 3.2% 20 San Dimas $77,241,648 $102,871,162 $25,629,514 33.2%
21 Claremont $135,942,150 $140,207,680 $4,265,530 3.1% 21 Walnut $86,192,945 $113,529,459 $27,336,514 31.7%
22 Rancho Palos Verdes $163,468,852 $168,389,428 $4,920,576 3.0% 22 Duarte $75,750,203 $96,221,871 $20,471,668 27.0%
23 Pasadena $1,040,811,812 $1,072,064,027 $31,252,215 3.0% 23 Lancaster $894,735,818 $1,120,363,122 $225,627,304 25.2%
24 Lakewood $169,950,296 $174,688,852 $4,738,556 2.8% 24 Lakewood $174,688,852 $217,561,509 $42,872,657 24.5%
25 Monterey Park $84,302,457 $86,608,256 $2,305,799 2.7% 25 West Covina $203,425,964 $247,776,960 $44,350,996 21.8%
26 Los Angeles $19,954,256,000 $20,486,052,000 $531,796,000 2.7% 26 Pasadena $946,405,167 $1,142,215)57 $195,810,090 20.7%
27 La Verne $127,166,259 $130,280,065 $3,113,806 2.4% 27 Torrance $424,337,033 $503 216,390 $78,879,357 18.6%
28 Baldwin Park $103,455,582 $105,983,566 $2,527,984 2.4% 28 Whittier $230,133,242 $272,132,404 $41,999,162 18.2%
29 Manhattan Beach $172,84.:?,329 $177,010,773 $4,168,444 2.4% 29 Rancho Palo.!_ Verdes _$172,079,069_ $200,238,415 $28_,159,346 ........... 16.4%!
2012-2013 LOS ANGELES COUNTY CIVIL GRAND JURY REPORT 114
CITIES FISCAL HEALTH, GOVERNANCE AND MANAGEMENT
Exhibit 6: Change in Net Assets (Ranked Positive to Negative Change in Net Assets)
Fiscal Year 2010-11 Fiscal Year 2011-12
Beginning Ending Change in Change in Beginning Ending Change in Change in
Rank City Net Assets Net Assets Net Assets Net Assets Rank City Net Assets Net Assets Net Assets Net Assets
30 Santa Monica $1,535)62,226 $1,571,957,281 $36,595,055 2.4% 30 Santa Monica $1,571,957,281 $1,828,472,446 $256,515,165 16.3%
31 Rolling Hills Estates $10,091,850 $10,331,123 $239,273 2_4% 31 Bellflower $70,414,588 $81,408,758 $10,994,170 15.6%
32 Redondo Beach $215,266,893 $220,024,820 $4,757,927 2.2% 32 Palmdale $738,666,238 $851,442,344 $112,776,106 \5_3%
33 San Dimas $75,610,910 $77,164,690 $1,553,780 2.1% 33 South Gate $220,449,150 $252,694,750 $32,245,600 14.6%
34 Culver City $207,459,9\3 $211,631,970 $4,172,057 2.0% 34 Alhambra $177,111,578 $202,934,046 $25,822,468 14.6%
35 Lynwood $139,691,580 $142,251,864 $2,560,284 1.8% 35 La Puente $36,237,066 $40,019,056 $3,781,990 lOA%
36 Santa Clarita $879,262,993 $894,585,567 $15,32?,574 1.7% 36 Redondo Beach $220,008,247 $242,108,746 $22,!00,499 10.0%
37 Whittier $226,622,628 $230 133,242 $3,510,614 15% 37 Artesia $14,988,321 $16,312,428 $1,324,107 8.8%
38 La Puente $35,699,326 $36,237,066 $537,740 1.5% 38 Beverly Hills $655,570,500 $709,432,402 $53,861,902 8.2%
39 Hermosa Beach $80,738,553 $81,944,245 $1,205,692 1.5% 39 Rolling Hills Estates $10,331',123 $11,167,600 $836,477 8.1%
40 Hidden Hills $6,960,798 $7,062,944 $!02,146 1.5% 40 Burbank $1,345,693,000 $1,451,344,000 $105,651,000 79%
41 Signal Hill $61,339,935 $62,118,389 $778,454 13% 41 Temple City $60,521,475 $65,200,232 $4,678,757 7.7%
42 Torrance $419,292,996 $424,337,033 $5,044,037 \_2% 42 Commerce $77,866,876 $82,987,309 $5,120,433 6.6%
43 El Monte $461,076,559 $465,528,542 $4,451,983 1.0% 43 Santa Clarita $894,585,567 $949,492,105 $54,906,538 6.1%
44 Artesia $14,822,791 $14,948,321 $125,530 0.8% 44 Do 'Wiley $275,778,000 $291,446,000 $15,668,000 5.7%
45 AgouraHilis $85,359,390 $86,048,235 $688,845 0.8% 45 Manhattan Beach $173,023,924 $182,174,652 $9,150,728 5.3%
46 Lav..mdale $52,877,922 $53,164,954 $287,032 0.5% 46 West Hollywood $234,567,423 $246,251,060 $11,683,637 5.0%
47 San :Marino $199,264,839 $200,031,066 $766,227 0.4% 47 Glendora $156,845,282 $164,164,199 $7,318,917 4.7%
48 Glendora $160,580,571 $161,064,820 $484,249 03% 48 Los Angeles $20,486,052,000 $21,415,870,000 $929,818,000 4_5%
49 Malibu $99,601,111 $99,761,778 $160,667 0.2% 49 EIMonte $465,528,542 $484,747,405 $19,218,863 4.1%
50 Glendale $1,654,023,000 $1.655,667,000 $1,644,000 0_\% 50 San Fernando $60,331,335 $62,168,809 $1,837,474 3_0%
51 Palmdale $731,360,888 $731,880,138 $519,250 0.1% 51 La Canada FlintridJ?;e $67,059,209 $68,347,392 $1,288,183 1.9%
52 Hav.raiian Gardens $23,261,691 $23,267,915 $6,224 0.0% 52 Rolling Hills $5,898,446 $5,988,903 $90,457 15%
53 Norwalk $169,547,365 $169,342,086 ($205,279) (.1%) 53 Long Beach $4,389,600,000 $4,455,635,000 $66,035,000 1.5%
54 Walnut $86,393,828 $86,192,945 1$200,883) (.2%) 54 La Verne $130,280,065 $131,948,337 $1,668.272 1.3%
55 Gardena $118,827,858 $118,407,359 ($420,499) (.4%) 55 South Pasadena $82,003,902 $82,777,599 $773,697 0.9%
56 Burbank $1,353,345,000 $1,345,693,000 ($7,652,000) (.6%) 56 Westlake Village $39,695,369 $39,811,710 $116,341 0.3%
57 Pomona $262,449,409 $260,673,224 ($1,776,185) (.7%) 57 Hidden Hills $7,062,944 $7,078,589 $15,645 0.2% 1
58 San Fernando $60,778,589 $60,331,335 ($447,254) (.7%) 58 San Marino $199,706,593 _$200,085,711 .. ~.118 o.z% I
2012-2013 LOS ANGELES COUNTY CIVIL GRAND JURY REPORT 115
C!TJES FISCAL HEALTH, GOVERNANCE AND MANAGEMENT
Exhibit 6: Change in Net Assets (Ranked Positive to Negative Change in Net Assets)
Fiscal Year 2010-11 Fiscal Year 2011-12
Beginning Ending Change in Change in Beginning Ending Change in Change in
Rank Citv Net Assets Net Assets Net Assets Net Assets Rank City Net Assets Net Assets Net Assets Net Assets
59 Sierra Madre $220,802,817 $219,084,905 ($1,717,912) (.8%) 59 Calabasas $101,249,059 $101,204,368 ($44,691) (.0%)
60 La Habra Heights $12,082,251 $11,964,847 ($117,404) (1_0%) 60 Claremont $135,916,931 $135,591,436 t$325.4<:i5) ( 1"/f,)
61 Cerritos $338,239 068 $334,776,904 ($3,462,164) (10%) 61 Sierra Madre $219,400,219 $218,442 551 ($957.668) (.4%)
62 Palos Verdes Estates $87,668,455 $86,668,866 ($999,589) (Ll%) 62 Glendale $],655,667,000 $1,638,463,000 ($17.204,000) (l 0'%)
63 Diamond Bar $416,022,622 $410,783 597 ($5,239,025) (1.3%) 63 Lynwood $142,251,864 $140,539,783 ($1,7i2,081) (1.2%)
64 Lancaster $904,318,000 $891,819,345 ($12,498,655) (1_4%) 64 Diamond Bar $411,343,266 $405,860,546 ($5,4R2_ 7/(J} (l_3%l)
65 El Segundo $149,895,666 $147,646,650 ($2,249,016) (1.5%) 65 Lomita $43,876,953 $43,207,559 ($669,394) (1.5%)
66 Lomita $44,653,981 $43,876,953 ($777,028) (1_7%) 66 Gardena $118,407,359 $116,128,296 (P.279,06_1J (I 9<.Yo)
67 Inglewood $220,134,814 $213,883,271 ($6,251;543) (2.8%) 67 San Gabriel $54,887,950 $53,690,979 ($1,196,971) _(2.2%)
68 Westlake Village $41,067,970 $39,695,369 ($1,372,601) (3.3%) 68 Palos Verdes Estates $84,219,854 $82,232,212 ('li1,987.642) (2.4%!)
69 San Gabriel $58,199,540 $56,220,057 ($1,979,483) (3.4%) 69 Hermosa Beach $81,944,245 $79,968,435 ($1,975,810) {2.4%)
70 Arcadia $199,030,502 $192,064,831 ($6,965,671 I (3.5%) 70 Agoura Hills $86,048,235 $83,815,997 ($2,232,23::i) 12 {)~iCJ
71 West Covina $211,787,517 $203,425,964 ($8,361 553) (3.9%) 71 Malibu $98,924,563 $95,635, 196 ($3,289,367) (3.3%)
72 Bell Gardens $105,822,495 $101,111,384 ($4,711,111) (4_5%) 72 El Segundo $147,836,304 $14?,864,903 ($4.971AO!) (34%)
73 Azusa $133 485,442 $127 027,605 ($6,457,837) (4.8%) 73 Carson $379,644,579 $363,110,748 ($16,533,831) {4_4%)
74 Commerce $102,968,774 $97,803,777 ($5,164,997) (5.0%) 74 Arcadia $192,064,831 $181,152,565 {$\0,91?266) \5 7'YGJ
75 Downey $291,298,000 $276,384,000 ($14 914,000) (51%) 75 Indust:Jy $604 631,162 $566 920,582 ($37,710580) (6.2%)
76 Covina $145,143,945 $136,654,618 ($8,489,327) (5_8%) 76 Covina $140,149,595 $128,712,846 (S1 L4-36,7--1-9) (8_2%)
77 Paramount $99,609,482 $93,312,696 ($6,296,786) (6.3%) 77 Vernon $169,354,729 $82,358,298 ($86,996,431) l51,4%)
78 Carson $419,286,360 $379,644,579 ($39,641,781) (9.5%) NA Azusa
79 Vernon $201,108,074 $181,690,500 ($19,417,574) (9.7%) NA Bradbury
80 Bradbury $6,402,883 $5,753,196 ($649,687) (10_1%) NA Hawaiian Gardens
81 Monrovia $49,199,339 $43,903,411 ($5,295,928) (10.8%) NA Huntington Park
82 Rolling Hills $6,775,878 $5,898,446 ($877,432) (12.9%) NA Inglewood
83 Huntington Park ($82,332,367) ($93,043,755) ($10,711,388) (13.0%) NA La Habra Heights
84 Cudahy $28,414,815 $7,714,909 ($20,699,906) (72.8%) NA Lav.mdale
Source: Comprehensive Annual Financial Report (CAFR) or Basic Financial Statements obtained from each City I Financial information for FY 2010-11 or FY 2011-12 was not available from the cities of Avalon, Bell, Compton, and Maywood as of April25, 2013
Financial information for FY 2011-12 was not available from the cities of Azusa, Bradbury, Hawaiian Gardens, Huntington Park, Inglewood, La Habra Heights and Lawndale as of Apri\25, 2013.
2012-2013 LOS ANGELES COUNTY CIVIL GRAND JURY REPORT 116
C!TIES F!SCAL HEALTH, GOVERNANCE AND MANAGEMENT
General Fund Net Revenue Percent
General Fund Net Revenue Percent is the percent of all general fund revenues remaining after
all city general fund expenditures. Revenues are the amount received by a city rrom taxes, fees,
permits, licenses, interest, intergovernmental sources, and other sources during the fiscal year.
Expenditures are the actual spending of governmental general funds by each city. If a city
spends less than received the general fund net revenues and percentage would be positive. If a
city spends more than received in revenues the net general fund revenues and percentage would
be negative. The general fund net revenue percent is calculated by dividing general fund net
revenues by total general fund revenues.
As the following Exhibit shows, 52 of the 84 cities received more in general fund revenues than
they expended on general funded governmental activities during Fiscal Year 20 I 0-11. The
remaining 32 cities spent more on these activities than revenue received. The exhibit also shows
46 of the 77 cities received more in general fund revenues than they expended on general funded
governmental activities during Fiscal Year 2011-12. The remaining 3 I cities spent more on
these activities than revenue received. Cities spent an average of 1.7% more than received in
revenue in FY 20 I 0-11, and spent 1.5% more than received in revenue in FY 2011-12.
General Funds are used to fund core government activities such as government administration,
public safety, transportation, community development, and community services. Each city's
general fund is used to provide resources to provide for the basic city services including police,
fire, parks, library, and administrative support services. A negative net general fund revenues
and percentage means a city's ability to provide these essential services in the future may be at
risk, and they may have to make additional reductions in city services.
2012-2013 LOS ANGELES COUNTY CIVIL GRAND JURY REPORT 117
CITIES FISCAL HEALTH, GOVERNANCE AND MANAGEMENT
Exhibit 7: General Fund Revenues, Expenditures and Net Revenues
Fiscal Year 2010-11 Fiscal Year 2011-12
General Fund General Fund General Fund % NetGF General Fund General Fund General Fund 0/o NetGF
Rank City Revenues Expenditures Net Revenue Revenue Rank City Revenues Expenditures Net Revenue Revenue
I Duarte $20,672,184 $II ,859,298 $8,812,886 42.6% I Rancho Palos Verdes $23,670,857 $17,460,898 $6,209,959 26_2%
2 Indu'"J' $51,331,181 $35,935,257 $15,395,924 30.0% 2 La Mirada $37,134,080 $28,488,780 $8,645,300 23.3%
3 Rancho Palos Verdes $22,921,818 $17,081,270 $5,840,548 25.5% 3 Santa Monica $434,801,117 $334,088,752 $100,712,365 23_2%
4 Norwalk $51,364,870 $42,346,732 $9,018,138 17.6% 4 West Hollywood $72,214,859 $59,640,290 $12,574,569 17.4%
5 La Canada Flintridge $12,797,722 $10,676,861 $2,120,861 16.6% 5 He1mosa Beach $28,674,890 $24,769,924 $3,904,966 136%
6 Culvei-Citv $82,739,285 $69,164,968 $13,574,317 16.4% 6 La Puente $10,793,192 $9,563,650 $1,229,542 11.4%
7 Santa Clarita $79,670,171 $67,322,236 $12,347,935 15SYo 7 Hawthorne $55,129,557 $48,919,950 $6,209,607 11_3%
8 West Hollywood $68,722,966 $58,624,426 $10,098,540 14.7% 8 Pasadena $I95,589,261 $173,738 846 $21,850 415 11.2%
9 Palmdale $55,974,288 $47,890,405 $8,083,883 14_4% 9 Beverly Hills $172,764,744 $153,657,321 $19,107,423 ILl%
10 Hawthorne $56,575,507 $48,639,631 $7,936,146 14.0% lO Sierra Madre $7,979,366 $7,140,524 $838 842 10.5%
II Beverly Hills $165,530,333 $146,061,614 $19,468,719 11.8% II La Canada Flintridge $11,839,400 $10,612,344 $1,227,056 10.4%
12 Sierra Madre $8,169,722 $7,242,599 $927,123 IL3% 12 South El Monte $10,886,615 $9,841,361 $1,045,254 9.6%
13 South Pasadena $22,014,073 $19,547,071 $2,467,002 ]!_?% 13 Westlake Village $9,920,560 $8,988,739 $931,821 9.4%
14 Hermosa Beach $27,196,751 $24,321,633 $2,875,118 10.6% 14 Claremont $21,530,877 $19,647,490 $1,883,387 8_7%
I5 Bell Gardens $23,887,916 $21,497,729 $2,390,187 10.0% 15 San Marino $21,351,300 $19,494,858 $1,856,442 8_7%
16 La Mirada $31,266,046 $28,263,068 $3,002,978 9.6% 16 Agoura Hills $11,308,176 $10,392,563 $915,613 8.1%
17 Whittier $57,189,318 $51,856,441 $5,332,877 9.3% 17 Norwalk $38,712,928 $35,674,163 $3,038,765 7.8% .
18 San Marino $21,952,839 $19,%0,981 $1,991,858 9_1% 18 Carson $65,424,619 $60,481,818 $4 942,801 7.6%
19 Gardena $42,447,638 $38,830,154 $3,617,484 8_5% I9 Duarte $12,214,688 $11,398,359 $816,329 6.7%
20 Artesia $7,309,948 $6,700,829 $609,119 8.3% 20 Commerce $50,069,711 $46,783,647 $3,286,064 6_6%;
2I Claremont $21,598,847 $19,872,514 $1,726,333 8_0% 21 Hidden Hills $1,754,705 $1,641,310 $113,395 6_5%
22 Pasadena $195,614,741 $181,402,037 $14,212,704 7.3% 22 Rolling Hills Estates $6,366,990 $5,966,474 $400,516 6.3%
23 Baldwin Park $24,076,977 $22)64,752 $1,712,225 7_1% 23 Torrance $152,938,399 $143,470,325 $9,468,074 6.2%
24 Carson $61,764,161 $57,407,400 $4,356,761 7.1% 24 Pomona $76,869,936 $72,122,780 $4,747,156 6.2%
25 Los Angeles $4,179,291,000 $3,913,044,000 $266,247,000 6.4% 25 Signal Hill $!6,966,997 $15,928,094 $1,038,903 6_1%
26 TempleCitv $10,644,685 $9,972,639 $672,046 6.3% 26 Los Angeles $4,317,334,000 $4,053,262,000 $264,072,000 6.1%
27 Lakewood $42,507,652 $39,868,028 $2,639,624 6.2% 27 Temple Ctty $11,091,731 $10,444,775 $646,956 5_8%
2012-2013 LOS ANGELES COUNTY CIVIL GRAND JURY REPORT 118
CITIES FISCAL HEALTH. GOVERNANCE AND MANAGEMENT
Exhibit 7: General Fund Revenues, Expenditures and Net Revenues
Fiscal Year 2010-11 Fiscal Year 2011-12
General Fund General Fund General Fund %NetGF General Fund General Fund General Fund %NetGF
Rank City Revenues Expenditures Net Revenue Revenue Rank City Revenues Exuenditures Net Revenue Revenue
28 Glendora $22,684,726 $21,338-,243 $1,346,483 5_9% 28 Manhattan Beach $53,987,382 $50,930,438 $3,056,944 5.7%
29 Be!lflower $23,607,679 $22,488,247 $1,119,432 4.7% 29 Lakewood $41,824,853 $39,459,224 $2,365,629 57%
30 Azusa $31,960,738 $30,462,297 $1,498,441 4.7% 30 South Pasadena $22,361,777 $21,141,001 $1,220,776 5.5%
31 Signal Hill $16,503,772 $15,763,663 $740,109 4_5% 31 Gardena $44,782,462 $42,454,549 $2,327,913 5.2%
32 Manhattan Beach $52,027,800 $49,765,852 $2,261,948 4.3% 32 Palos Verdes Estates $10,775,050 $10,242,790 $532,260 4_9%
33 Calabasas $20,437,186 $19,553,214 $883,972 4.3% 33 Lomita $7,606,304 $7,301,566 $304,738 4_0%
34 Redondo Beach $67,!21,270 $64,350,055 $2,771,215 4.1% 34 Calabasas $19,628,049 $18,860,625 $767,424 3.9%
35 Walnut $11,794,092 $11,381,557 $412,535 3.5% 35 Baldwin Park $23,433,623 $22,548,214 $885,409 3_8%
36 Agoura Hills $11,031,740 $10,649,354 $382,386 3.5% 36 San Dimas $18,230,694 $17,775,563 $455,131 2.5%
37 lrwmdale $17,891,101 $17,343,600 $547,501 3.1% 37 Redondo Beach $67,811,693 $66,183,617 $1,628,076 2.4%
38 Rolling Hills $1,620,797 $1,578,562 $42 235 2.6% 38 Long Beach $388,538,000 $379,466,000 $9 072,000 2.3%
39 Huntington Park $30,583,128 $29,862,365 $720,763 2.4% 39 Palmdale $48,252,632 $4 7,398,402 $854,230 18%
40 Lomita $7,429,243 $7,269,805 $159,438 2.1% 40 Bell Garden.s $22,483,823 $22,108,676 $375,147 1.7%
41 Palos Verdes Estates $10,632,711 $10,406,520 $226,191 2.1% 41 Industry $46,085,842 $45,418,773 $667,069 1.4%
42 Covina $28,885 879 $28,329,627 $556 252 1.9% 42 Paramount $23,155,325 $22 836,405 $3!8,920 1.4%
43 Torrance $148,890,032 $146,087,069 $2,802,963 1.9% 43 South Gate $37,427,784 $36,974,158 $453,626 1.2%
44 Alhambra $50,980,178 $50,216,870 $763,308 1.5% 44 Bellflower $23,056,942 $22,816,147 $240 795 1.0%
45 Commerce $47,452,600 $46,748,647 $703,953 1.5% 45 Monterey Park $32,412,385 $32,217,428 $194,957 0_6%
46 San Dimas $19,188,807 $!8,938,547 $250,260 13% 46 Rosemead $17,078,236 $17,001,740 $76,496 0.4%
47 Westlake Village $9,570,726 $9,452,130 $118,596 L2% 47 Lancaster $54,034,215 $54,517,133 ($4S2,Y18) (.00:(,)
48 Pomona $76,597,406 $75,885,240 $712,166 0.9% 48 Lynwood $27,181,216 $27,466,586 (S285,370) (1.0%)
49 La Habra Heights $2,819,878 $2,803,953 $15,925 0.6% 49 Pico Rivera $32,595,768 $33,164,063 {$568,2'/."i) l[_70/(-,)
50 South El Monte $9,866,559 $9,827,652 $38,907 0.4% 50 La Verne $25_,272, 727 $25,846,547 ($573,820) (2.3%}
51 Paramount $22,349,332 $22,304,041 $45,291 0.2% 51 Alhambra $50,575,102 $51,754,955 ($l.179,851) (2_3%)
52 Arcadia $45,970,881 $45,957,932 $12,949 0.0% 52 Glendora $22,167,417 $22,736,426 ($569,009) \2.6%)
53 Long Beach $383,824,000 $384,441,000 ($617,00U} (_7';'0) 53 Culver City $70,610,080 $72,935,927 ($2,325,847) (_3.3%!)
54 South Gate $35,321,22_L _ $35,686,?}_L ($365,6!0) (1.0%) 54 Artesia -$7,440,4~1· $7,§?2_262 (H~9/l79) (35%) I
2012-2013 Los ANGELES COUNTY CIVIL GRAND JURY REPORT 119
CITIES FISCAL HEALTH, GOVERNANCE AND MANAGEMENT
Exhibit 7: General Fnnd Revenues, Expenditures and Net Revenues
Fiscal Year 2010-11 Fiscal Year 2011-12
General Fund General Fund General Fund %NetGF General Fund General Fund General Fund %NetGF
Rank Citv Revenues Expenditures Net Revenue Revenue Rank City Revenues Expenditures Net Revenue Revenue
55 Santa Monica $266,324,593 $270,917,006 ($4,5CJ? A 13) (l '7'!-if,) 55 Whittier $51,724,154 $53,935,356 ($2,21 1,207) {4_3"-0J
56 ElMonte $48,936,211 $49,864,596 ($928,385) (1.9%) 56 El Monte $50,425,256 $52,901,819 ($2,476,563) (4.9'%)
57 Inglewood $91' 1 88,526 $93,635,491 ($',446_065) (::'n,J 57 Malibu $22,864,947 $23,990,727 ($1, L?5_7&1l (4.CJ%)
58 Monterev Park $29,370 250 $30,285,009 ($914,759) (3.1%) 58 Arcadia $45,795,470 $48,079 568 ($2,284,098) (5.()%)
59 Hawaiian Gardens $16,140,191 $16,710,780 ($570_589) oy.-;,, 59 Covina $28,167,072 $29,581,412 ($1,414,3401 15 0'%)
60 El Segundo $52,261,377 $54,408,329 {$2,146,952) (4.1%) 60 EISegundo $50,276,959 $53,771,645 ($3,494,686) (7_0%)
61 Malibu $2 [ '722,890 $22,641,708 ($918,818) (4.2'~-·:,) 61 Santa Clarita $80,248,130 $86,681 ,522 ($t>,433,392) (R_o·~·<·J
62 West Covina $49,055,522 $51,760,549 {$2,705,027) (5_5%) 62 Downey $63,810,000 $69,232,000 ($5,422,000) (8.5%)
63 La Puente $9,678,875 $10,219,907 ($541Jl37) rs m--~J 63 Irwindale $15,557,396 $16,970,554 (S1AL\15S) (()_]".-(,]
64 Lynwood $26,536,562 $28,057,344 ($1 ,520. 782) (57%) 64 Walnut $10,855,654 $11,978,785 . ($1,123,I31) (10.3%)
65 Roiling Hills Estates $5,780,776 $6,204,793 ($424_017) (7 3'%) 65 Santa Fe Springs $49,986,372 $55,669,656 ($5,683,284\ ([[..:!-%)
66 Rosemead $16,477,300 $I7,730,943 ($1,253.643) (76%) 66 West Covina $48,345,460 $54 OI9, I95 ($5,673,735) (11.7%)
67 La Verne $23,768,896 $25,588,297 ($1,819.401) (77%} 67 Cudahy $6,900,915 $7,723,621 ($822,706) (1 ]_()~-{,)
68 Pico Rivera $30,222,633 $32,819,053 ($2,596,420) (8_6%) 68 Burbank $134,937,000 $152,537,000 ($17,600,000) (13.0%)
69 Cudahy $5,930,943 $6,513,443 {$<;tf',500) (9X%) 69 Rolling Hills $1,463,120 $1,697,941 ($234,821) (160'%)
70 Downey $6I,269,000 $67,951,000 {$6,68"1 ,000) (10.9%) 70 Glendale $138,953,000 $162,117,000 {$23,164,000) (16 7%)
71 Santa Fe Springs $41,744,050 $46,483,379 ($4,739,329) (II .4~-'n) 71 Diamond Bar $17,927,859 $22,239' 717 {$4,<1 L858) (24 l<:·n)
72 Cerritos $60,43I,960 $68,949,923 ($8,517,963) (14.1%) 72 Monrovia $25,206,23I $32,055,I55 ($6,848,924) (27.2%)
73 Glendale $142,582,000 $163,698,000 ($2l,i H1,0(!{1) (14_8%) 73 San Fernando $12,144,406 $15,788,936 ($3,644,530) (3(1 0°:0)
74 Burbank $!30,993,000 $150,679,000 ($19,686,000} (15.0%) 74 Montebello $33,7I6,297 $44,43I,004 ($10,714,707) (31J!%)
75 San Gabriel $25,312, 197 $30,9 I 9, 864 ($5,0fl7,f>67i (22 2'!-;-,) 75 San Gabriel $24,543,179 $32,751,441 ($8.208,262) (314°,f>)
76 Lancaster $44,307,303 $54,63I,910 ($(0,324,6071 (23.3%) 76 Cerritos $59,970,701 $86,349,754 ($26,379,053) (44.0%) !
77 Montebello $33,446,847 $41,947,119 ($8.500,:n2) (25.4'%) 77 Vernon $27,460,829 $57,151,710 {$29.690,881) {!OX_l "-·G) ;
78 Monrovia $23,488,715 $30,958,641 ($7,469,926) (31.8%) NA Azu»a i
. 79 Hidden Hills $1,710,883 $2,258,156 ($547,273) (32.0°~0) NA Bradbury
80 San Fernando $14,724,735 $19,438,178 ($4.713,443) (32.0%) NA Hawaiian Gardens I
SI Lav.mdale $11,313,334 $I5,437,446 {$4.12--1-,!121 (36 5°:!.)_ NA HuJ1~ington Park I
2012-2013 LOS ANGELES COUNTY CIVIL GRAND JURY REPORT 120
CITIES FISCAL HEALTH, GOVERNANCE AND MANAGEMENT
Exhibit 7: General Fund Revenues, Expenditures and Net Revenues
Fiscal Year 2010-11 Fiscal Year 2011-12
General Fund General Fund General Fund %NetGF General Fund General Fund General Fund %NetGF
Rank City Revenues Expenditures Net Revenue Revenue Rank City Revenues Expenditures ~et Revenue Revenue
82 Diamond Bar $17,882,284 $27,804,147 ($9,921,863) (55.5%) NA Inglewood
83 Bradbury $907,791 $1,444,788 ($536,9Cl7) ()') 2?I:,) NA La Habra Heights
84 Vernon $27,894,119 $55,868,389 ($27,974,270) (100.3%) NA Lawndale
Source: Comprehensive Annual Financial Report (CAFR) or Basic Financial Statements obtained from each City.
Financial information for FY 2010-11 or FY 2011-12 was not available from the cities of A val on, Bell, Compton, and Maywood as of April 25, 20 13.
Financial information for FY 2011-12 was not available from the cities of Azusa, Bradbury, Hawaiian Gardens, Huntington Park, Inglewood, La Habra Heights, and
Lawndale as of April 25,2013.
2012-2013 LOS ANGELES COUNTY CIVIL GRAND JURY REPORT 121
CITIES FISCAL HEALTH, GOVERNANCE AND MANAGEMENT
Change in General Fund Balance
Change in General Fund Balance is the difference from the beginning of the fiscal year to the
end of the fiscal year in the total city general fund balance. This change indicates the extent to
which total a city's general funds are increasing or decreasing. Ideally, city net general fund
balance would be stable or increasing. A declining general fund balance indicates cities are
spending down their general fund in order to meet current financial obligations. The change in
general fund balance is calculated by subtracting the previous fiscal year's general fund balance
for each city from the current year's general fund balance. If the result is a positive number than
the general fund balance is increasing, if a negative number the general fund balance is
decreasing.
As the following Exhibit shows, 4 7 of the 84 cities had positive changes in their general fund
balance in Fiscal Year 2010-11. The remaining 37 cities general fund balance declined. The
exhibit also shows 32 of the 77 cities had positive changes in their general fund balance in Fiscal
Year 2011-12. The remaining 45 cities general fund balance declined. The average change in
general fund balance was -3.8% in 2010-11, and -14.5% for FY 2011-12. A positive percentage
change indicates that the city's financial position is improving, while a negative percentage
change indicates that the city's financial position is deteriorating.
2012-2013 LOS ANGELES COUNTY CIVIL GRAND JURY REPORT 122
CITTES FISCAL HEALTH, GOVERNANCE AND MANAGEMENT
Exhibit 8: Change in General Fund Balance (Ranked Positive to Negative Change in General Fund Balance)
Fiscal Year 2010-11 Fiscal Year 2011-12
Beginning Ending Change in %Change Beginning Ending Change in %Change
Rank City GF Balance GF Balance GF Balance GF Balance Rank City GF Balance GF Balance GF Balance GF Balance
1 Agoura Hills $10,346,064 $39,846,64! $29,500,577 285.1% 1 Beverly Hills $39,846,641 $107,208,994 $67,362,353 169.1%
2 Irwindale $27,375,796 $66,721,671 $39,345,875 143_7% 2 South El Monte $1,836,365 $2,932,157 $1,095,792 59.7%
3 Azusa $9,656,687 $16,303,959 $6,647,272 68.8% 3 Montebello $4,975,576 $7,155,057 $2,179,481 43.8%
4 Duarte $14,583,081 $23,090,967 $8,507,886 58.3% 4 Santa Monica $295,275,716 $416,257,281 $120,981,565 41.0%
5 Paramount $14,177,317 $20,217,152 $6,039,835 42_6% 5 Carson $23501,291 $29,618,905 $6,117,614 26.0%
6 Redondo Beach $9,894,077 $13,654,459 $3,760,382 38_0% 6 Santa Fe Sorinl'!:s $25,249,104 $31,662,518 $6,413,414 25_4%
7 Santa Monica $215,470,696 $295,275,716 $79,805,020 37.0% 7 La Verne $8,545,949 $10,197,783 $!,65!,834 19.3%
8 Norwalk $21,682,417 $29,478,353 $7,795,936 36_0% 8 Monterey Park $13,145,236 $15,528,130 $2,382,894 18_1%
9 Culver City $38,893,637 $50,316,015 $[[,422,378 29_4% 9 Rolling Hills Estates $2,392,970 $2,800,565 $407,595 17.0%
10 Carson $18,182,124 $23,50!,291 $5,319,167 29_3% IO Long Beach $66,993,000 $77,123,000 $10,130,000 15.1%
ll Artesia $3,163,243 $3,962,246 $799,003 25.3% ll Claremont $11,531,871 $13,191,567 $1,659,696 14.4%
12 Palmdale $23,524,967 $29,325,007 $5,800,040 24_7% 12 Los Angeles $523,288,000 $571,684,000 $48,396,000 9_2%
l3 Alhambra $8,080,126 $10,045 306 $1,965,180 24.3% 13 South Pasadena $13,532,500 $14,754,459 $1,221,959 9.0%
14 South Pasadena $11,199,357 $13,532,500 $2,333,143 20_8% 14 Pasadena $49,911,540 $53,775,868 $3,864,328 7.7%
15 Hawthorne $28,888,447 $34,484,777 $5,596,330 19.4% 15 La Mirada $48,22-8,160 $51,887,661 $3,659,501 7.6%
16 Los Angeles $436,484,000 $520,058,000 $83,574,000 19.1% 16 Gardena $9,267,031 $9,961,015 $693,984 7.5%
17 Claremont $10,158,269 $11,688,535 $1,530,266 15.1% [7 Lakewood $55,114,817 $58,824,823 $3,710,006 6.7%
18 Hermosa Beach $5,241,329 $5,853,457 $6!2,128 1!_7% [8 Rancho Palos Verdes $18,900,262 $19,957,249 $1,056,987 56%
[9 Glendale $120,471,000 $134,055,000 $13,584,000 11.3% 19 Commerce $48,742,675 $51,324,280 $2,58!,605 5.3%
20 Signal Hill $24,525,625 $26,926,465 $2,400,840 9.8% 20 Calabasas $16,990,628 $17,760,172 $769,544 4.5%
21 West Hollywood $68,564,646 $75,148,519 $6,583,873 9.6% 21 Duarte $23,090,967 $23,966,286 $875,319 3.8%
22 Palos Verdes Estates $8,528,709 $9,332,667 $803,958 9.4% 22 Hermosa Beach $5,853,457 $6,056,563 $203,106 3.5%
23 Covina $10,608,489 $11,607,880 $999,391 9.4% 23 Signal Hill $26,926,465 $27,604,374 $677,909 2.5%
24 Manhattan Beach $18,245,833 $19,904,622 $1,658,789 9.1% 24 Lomita $4,919,713 $5,041,171 $121,458 2.5%
25 Santa Clarita $77,757,523 $83,690,219 $5,932,696 7_6% 25 Hidden Hills $5,038,232 $5,151,627 $113,395 2.3%
26 Lakewood $51,225,124 $55,114,817 $3,889,693 7_6% 26 South Gate $44,430,290 $45,305,175 $874,885 2.0%
27 Sierra Madre $5,136,891 $5,52!,717 $384,826 7.5% 27 Torrance $51,737,301 $52,697,045 $959,744 1.9%
28 La Canada Flintridge $13,975,303 $14,997,521 $1,022,218 7_3% 28 West Hollywood $74,528,324 $75,775,059 $1,246,735 1.7%
29 Gardena $8,649,750 $9,267,031 $617,281 7.1% 29 Paramount $20,217,152 $20,536,072 $318,920 1.6%
30 Industry $204,929,546 $219,000,959 $14,071,413 6.9% 30 Bellflower $26,638,103 $27,034,507 $396,404 1.5%
3[ Santa I:~.ful~ $23,665,2?_?_ _$25,249,!04 $1,583,809 6.7% ___ _ll_ _Pico Rive~~-$42,±54,939 $42,945,527 $490,588 1.2%
2012-2013 LOS ANGELES COUNTY CIVIL GRAND JURY REPORT 123
CITIES FISCAL HEALTH, GOVERNANCE AND MANAGEMENT
Exhibit 8: Change in General Fond Balance (Ranked Positive to Negative Change in General Fund Balance)
Fiscal Year 2010-11 Fiscal Year 2011-12
Beginning Ending Change in %Change Beginning Ending Change in %Change
Rank City GF Balance GF Balance GF Balance GF Balance Rank City GF Balance GF Balance GF Balance GF Balance
32 South Gate $41,736,638 $44,430,290 $2,693,652 6.5% 32 El Monte $27,313,295 $27,530,76? $217,467 0.8%
33 El Monte $25,716,836 $27,313,295 $1,596,459 6.2% 33 Manhattan Beach $19,904,622 $19,860,593 ($44,029) {.2%)
34 Arcadia $25,198,726 $26,733,547 $1,534,821 6.1% 34 Westlake Village $15,429,166 $15,287,538 ($141,628) (.9%)
35 LaVerne $8,061,447 $8,545,949 $484,502 6.0% 35 San Dimas $30,886,489 $30,596,789 ($289,700) (.9%)
36 Bell Gardens $38,147,258 $40,042,997 $1,895,739 5_0% 36 Bell Gardens $40,042,997 $39,269,814 (577:<,183) (1.9%,)
37 Glendora $16,088,976 $16,766,521 $677,545 4.2% 37 Redondo Beach $13,654,459 $13,390,680 ($263,779) (1.9%)
38 Huntington Park $30,991,807 $32,074,080 $1,082,273 3.5% 38 La Canada Flintridge $14,997,521 $14,679,687 ($',]7,834) (2_1'};,)
39 Rolling Hills $3,221,894 $3,321,129 $99,235 3.1% 39 Culver City $50,316,015 $48,994,261 ($1321,754) (26%)
40 Temple C1ty $24,700,378 $?5,313,718 $613,340 2.5% 40 West Covina $29,613,277 $28,767,970 ($845.307) (2.0'%,)
41 Bellflower $27,469,072 $28,098,159 $629,087 2.3% 41 Rosemead $15,319,072 $14,821,172 ($497,900) {3.3%)
42 La Mirada $47,554,646 $48,527,355 $972,709 2.0% 42 Arcadia $26,733,547 $25,799,162 (5934,385) {3.5%)
43 San Dimas $30,419,495 $30,900,448 $480,953 1.6% 43 Whittier $36,473,307 $34,873,937 ($1,599,370) (4.4%)
44 Beverly Hills $97,564,979 $97,984,156 $419,177 0_4% 44 Palos Verdes Estates $9,332,667 $8,891,466 ($44!.20!) (4_7'}~)
45 Whittier $36,392,331 $36,473,307 $80,976 0.2% 45 Temple City $25,313,718 $24,054,080 ($1 ,?59,638) (5.0%}
46 San Gabriel $11,160,821 $11,182,894 $22,073 0_2% 46 Walnut $15,002,607 $14,215,976 ($7il6,631) (5 ..,,~~-0)
47 Commerce $48,716,793 $48,742,675 $25,882 0.1% 47 Alhambra $9,758,196 $9,245,955 ($512.241) (5.2%)
48 La Habra Heights $5,577,027 $5,546,038 ($30_989) (_6%) 48 Industry $219,000,959 $207,304,768 l$!l,690_!91} (5_3°-'i;}
49 Rancho Palos Verdes $19,373,042 $18,900,263 {$472,779) 1_24%) 49 Baldwin Park $17,077,153 $16,084,269 ($992,884) {5.8~-'(,)
50 La Puente $19,110,833 $18,569,801 {$541,032) l2-~%) 50 Rollin.e; Hills $3,321,129 $3,110,058 ($2! J.(l7lj (A_4%)
51 El Segundo $13,034,492 $12,628,952 ($405540) (3.1%) 51 Artesia $3,962,246 $3,682,488 ($279, 758) (7.1%)
52 Calabasas $17,617,282 $16,990,628 {$626,654} (3.6'%) 52 Palmdale $31,932,082 $29,657,651 ($2.274,431) 17.1%)
53 Cerrit-os $183,100,074 $175,341,307 ($7.758,767) (4.2%) 53 Sierra Madre $5,521,717 $5,110,444 t$41 1,273) (7.4%)
54 Hawaiian Gardens $21,034,418 $20,095,731 ($9JlL687) (4 5%.) 54 Malibu $20,352,411 $18,572,5?3 ($1.779,888) (8 7~/(.)
55 Monterey Park $13,762,704 $13,145,236 ($617A68J (4.5%) 55 Cudahy $7,530,636 $6,838,969 ($691__667) f9.20;Q)
56 Westlake Village $16,308,40 I $15,429,166 ($879.235) (5 ..J-';·f,) 56 Covina $11,607,880 $10,537,723 ($1 ,070.1 '>7) ('1_2%)
57 Lavmdale $24,655,831 $23,275,550 ($1.380,281) (5.6%) 57 Glendora $16,766,521 $15,158,169 ($1 ,608,352) (9_6%)
58 Torrance $55,023,286 $51,737,301 ($30785_98;-,) {60%) 58 Burbank $100,907,000 $86,565,000 {$!4,342JJ00) (!4 2'~'0)
59 West Covina $31,567,950 $29,613,277 ($1 ,954,673) {6.2%) 59 Lynwood $6,533,260 $5,601,665 ($931,595) {14_3%)
60 Pico Rivera $45,530,767 $42,454,939 ($3.075,82:-5) (6 8%,) 60 Downey $23,227,000 $19,887,000 ($3,340,()(J(J) (14.4%)
61 Burbank $108,520,000 $100,907,000 {$7,613,000) {7.0%) 61 Cerritos $175,341,307 $147,153,641 ($28,187,666) (16_1%)
62 San Marino $19,107,936 $17,399,938 ($1J07,9'1g) (8_9%) 62 Santa Clarita $83,690,219 $69,942,023 ($!3.748_196) (16.4'%)
2012-2013 LOS ANGELES COUNTY CIVIL GRAND JURY REPORT 124
CITIES FISCAL HEALTH. GOVERNANCE AND MANAGEMENT
Exhibit 8: Change in General Fund Balance (Ranked Positive to Negative Change in General Fund Balance)
Fiscal Year 2010-11 Fiscal Year 2011-12
Beginning Ending Change in %Change Beginning Ending Change in %Change
Rank City GF Balance GF Balance GF Balance GF Balance Rank City GF Balance GF Balance GF Balance GF Balance
63 Rosemead $16,953,956 $15,319,072 ($1 ,634,884} (9.6%} 63 Irwindale $66,721,671 $55,367,683 ($1 1.353,988) (17_0%)
64 Baldwin Park $18,918,838 $17,077,153 ($U~41.685J (0.7%) 64 San Marino $17,399,938 $14,258,891 !$3,141,0471 (1 !S F~fi)
65 Hidden Hills $5,585,505 $5,038,232 ($547,273) (9_8%)-65 Norwalk $29,478,353 $23,871,998 ($5,606,355) (19_0%J
66 Downey $23,119,000 $20,827,000 ($2292,000) 199%) 66 Diamond Bar $21,268,415 $17,144,314 ($4,!74,!01) {[()_4%;
67 Pasadena $53,177,187 $46,565,007 ($6,61 2, 180) (l2.4%) 67 El Segundo $12,628,952 $10,168,440 ($2,460,512) {19.5%)
68 Inglewood $19,569,028 $17,131,737 ($2,437.2'Jl) (12.5~c;,) 68 San Gabriel $11,182,894 $8,289,717 ($:?)N3,177) (/5_9%>)
69 Lomita $5,651,721 $4,919,713 ($732.008) (13.0%) 69 Lancaster $63,342,372 $38,910,226 ($24,432, 146) (38_6%i)
70 Pomona $6,535,641 $5,689,100 ($&-.f6.541) ( 13.0'}0) 70 Glendale $134,055,000 $59,566,000 ($74.489,000) (_S:, 0~-·(,j
71 Monrovia $3,739,203 $3,216,328 ($522,875) rt4.0%) 71 Hawthorne $34,484,777 $14,153,974 ($20,330,803) (59_0%)
72 Rolling Hills Estates $2,816,987 $2,392,970 ($~:::-iJ117} (15 1%) 72 La Puente $18,569,801 $7,508,388 ($11 ,U61,.1-13} ('i\i(;Gff,)
73 Cudahy $8,967,448 $7,567,550 {$1,399,898) {15.6%) 73 Pomona $5,689,100 $2,148,019 {$3,541 ,081) (62.:2%)
74 Lancaster $76,270,787 $63,342,372 ($12_028.415) (17.0%.) 74 Agoura Hills $41,569,987 $9,024,831 ($32,545,1561 (78 3'-','GJ
75 Lynwood $8,288,968 $6,533,260 ($1,755,708) (2L2%) 75 San Fernando {$619,317) ($1 ,236,782) {$617,465) (99.7%)
76 Bradbury $2,247,759 $1,710,767 ($:;3(:,_997) (23.9%) 76 Monrovia $3,216,328 ($8_S27_446) ($12.043,774) (374_:;'-',{o)
77 Malibu $26,751,198 $20,352,411 ($6,398,787) (23.9%) 77 Vernon ($4,526,031) {$25,120,702) ($20,594,671) (455.0%)
78 Diamond Bar $30,860,848 $21,268,415 ($0,592,433j (311%) NA Azu'a
79 Walnut $21,952,372 $15,002,607 ($6,949,765} (31.7%) NA Bradbury
80 South El Monte $3,802,320 $1,836,365 {$1 ,965,955:1 (51.7%) NA Hawaiian Gardens
81 Vernon $18,832,079 $7,809,740 ($11,022,339) (53.5%) NA Huntington Park
82 Long Beach $163,702,000 $66,993,000 (S4(),704_i)fi0) (59_i~;.) NA Inglewood
83 Montebello ($6,682.148) $4,975,576 $11,657,724 0 74.5%) NA La Habra Heights
84 San Fernando $102,384 ($0!9.317) ($721.7!)\) {704.9°i;)} NA La1A!fldale
Source: Comprehensive Annual Financial Report (CAFR) or Basic Financial Statements obtained from each City.
Financial information for FY 2010-11 or FY 2011-12 was not available from the cities of Avalon, Bell, Compton, and Maywood as of April25, 2013.
Financial information for FY 2011-12 was not available from the cities of Azusa, Bradbury, Hawaiian Gardens, Huntington Park, Inglewood, La Habra Heights, and
Lawndale as of April25, 2013. -
2012-2013 LOS ANGELES COUNTY CIV!LGRANDJURY REPORT 125
CITIES FISCAL 1-IEALTH. GOVERNANCE AND MANAGEMENT
Unassigned General Fund Reserve
Unassigned General Fund Balance is the portion of a city's general fund balance that is not
assigned for a specific use and, therefore, available for appropriation. The Government Finance
Officers Association recommends each city have an unassigned general fund reserve of no Jess
than two months (16.6%) of regular general fund operating revenues or regular general fund
operating expenditures. These are funds that have been formally set aside for use in
emergencies, revenue shortages, or budget imbalances, as well as provide stable tax rates,
maintain government services, and facilitate long-term financial planning.
As the exhibit on the following pages shows, 55 of the 84 cities had unassigned general fund
reserves greater than I 6.6%, or two months, of regular general fund operating expenditures for
Fiscal Year 2010-11. The exhibit also shows 47 of the 77 cities had unassigned general fund
reserves greater than 16.6%, or two months, of regular general fund operating expenditures for
Fiscal Year 20 II-I 2. The average unassigned general fund reserves percentage of regular
general fund operating expenditures was 5 I .4% in FY 2010-11, and 38.3% in FY 2011-12.
2012-2013 LOS ANGELES COUNTY CIVIL GRAND JURY REPORT 126
CITIES FISCAL HEALTH, GOVERNANCE AND MANAGEMENT
Exhibit 9: General Fnnd Balance Indicators (Ranked Highest to Lowest % Unassigned GF Balance)
Fiscal Year 2010-11 Fiscal Year 2011-12
GF Balance% Unassigned GF Unassigned GF GF Balance% Unassigned GF Unassigned GF
Rank City ofGF Exp's Balance % ofGFExp's Rank Gtv ofGF Exn's Balance %ofGF Exn's
1 Industry 609.4% $218,205,140 607.2% 1 1ndustrv 456.4% $206,508,950 454.7%
2 Temple City 253.8% $23,542,553 236.1% 2 Hidden Hills 3\3.9% $4,791,648 291.9%
3 Hidden Hills 223.1% $4,678,424 207.2% 3 Rollin2: Hills 183.2% $3,005,146 177.0%
4 RollingHills 210.4% $3,265,198 206.8% 4 Westlake Village 170.1% $12,525,377 139.3%.
5 La Habra Heights 197.8% $5,472,642 195.2% 5 La Canada Flintridge 138.3% $12,346,098 116.3%
6 Bradbury 118.4% $2,710,762 187.6% 6 Duarte 210.3% $12,421,537 109.0%
7 Hawaiian Gardens 120.3% $20,095,731 120.3% 7 Calabasas 94.2% $17,746,565 94.1%
8 La Canada Flintridge 140.5% $12,734,288 119.3% 8 Cudahv 88.5% $6,838,969 88.5%
9 Cerritos 254.3% $71,056,060 103.1% 9 Agoura Hills 86.8% $8,883,578 85.5%
10 Duarte 194.7% $11,552,824 97.4% 10 La Mirada 182.1% $24,253,682 85.1%
11 Westlake Village 163.2% $8,761,505 92.7% 11 Cenitos 170.4% $67,305,842 77.9%
12 Calabasas 86.9% $16,972,163 86.8% 12 Commerce 109.7% $36,051,479 77.1%
13 -1_giJura Hills 374.2% $8,547,388 80.3% 13 San Marino 73.1% $14,152,605 72.6%
14 San Marino 87.2% $15,934,468 79.8% 14 Rancho Palos Verdes 114.3% $12,464,439 71.4%
15 Lawndale 150.8% $11,560,364 74.9% 15 Bellflower 118.5% $14,376,492 63.0%
16 La Mirada 171.7% $20,693,194 73.2% 16 Santa Clarita 80.7% $50,664,338 58.4%
17 Bell Gardens 186.3% $0 73.2% 17 Culver City 67.2% $42,583,643 58.4%
18 Commerce 104.3% $33,552,248 71.8% 18 Diamond Bar 77.1% $12,616,200 56.7%
19 Bellflower 124.9% $15,735,669 70.0% 19 San Dimas 172.1% $9,976,322 56.1%
20 Santa Clarita 124.3% $46,915,238 69.7% 20 Rosemead 87.2% $9,519,173 56.0%
21 Rancho Palos Verdes 110.6% $11,385,761 66.7% 21 South Pasadena 69.8% $11,757,341 55.6%
22 Sierra Madre 76.2% $4,721,717 65.2% 22 La Puente 78.5% $4,843,455 50.6%
23 Culver City 72.7% $42,492,244 61.4% 23 Paramount 89.9% $11,335,035 49.6%
24 Diamond Bar 76.5% $16,726,964 60.2% 24 Beverly Hills 69.8% $69,963,868 45.5%
25 Rosemead 86.4% $10,209,075 57.6% 25 Santa Fe Springs 56.9% $23,978,015 43.1%
26 San Dimas 163.2% $10,451,853 55.2% 26 Whittier 64.7% $20,875,491 42.0%
27 La Puente 18L7% $5,601,360 54.8% 27 Signal Hill 173.3% $6,642,291 4L7%
28 South Pasadena 69.2% $10,541,790 53.9% 28 Malibu 77.4% $8,680,522 36.2%
29 Artesia 59.1% $3,007,803 44.9% 29 Manhattan Beach 39.0% $18,134,492 35.6%
30 Whittier 70.3% $22,674,738 43.7% 30 Rolling Hills Estates 46.9% $2,101,763 35.2%
31 Bey_erly Hills 67.1% $63,862,068 43.7% 31 Santa Monica 124.6% $117,225,871 35.1%
2012-2013 Los ANGELES COUNTY CIVIL GRAND JURY REPORT 127
CITIES FlSCAL HEALTH, GOVERNANCE AND MANAGEMENT
Exhibit 9: General Fund Balance Indicators (Ranked Highest to Lowest% Unassigned GF Balance)
Fiscal Year 2010-11 Fiscal Year 2011-12
GFBalance% Unassigned GF Unassigned GF GF Balance% Unassigned GF Unassigned GF
Rank City ofGF Exp's Balance '% ofGF Exp's Rank City ofGF Exp's Balance %of GF Ex_p's
32 Santa Monica 109.0% $108,382,191 40_0% 32 Artesia 47.8% $2,691,563 35.0%
33 Signal Hill 170.8% $6,167,408 39.1% 33 Palmdale 62.6% $16,415,346 34.6%
34 Glendale 81.9% $63,408,000 38.7% 34 Claremont 67.1% $6,227,688 31.7%
35 Manhattan Beach 40.0% $18,270,832 36.7% 35 Covina 35.6% $9,187,601 31.1%
36 Palmdale 61.2% $17,472,584 36.5% 36 Norwalk 66.9% $ [ 0,668,298 29.9%
37 Covina 41.0% $10,284,466 36.3% 37 Hawthorne 28.9% $14,100,610 28.8%
38 Santa Fe Springs 54.3% $16,439,102 35.4% 38 Carson 49.0% $15,971,310 26.4%
39 Cudahy 29.3% $6,707,195 33.6% 39 West Covina 53.3% $13,187,181 24.4%
40 Hawthorne 70.9% $16,077,846 33.1% 40 Glendale 36.7% $37,852,000 23.3%
41 Malibu 89.9% $7,058,095 31.2% 41 Hermosa Beach 24.5% $5,776,500 23.3%
42 Burbank 67.0% $46,871,000 31.1% 42 Temple City 230.3% $2,352,402 22.5%
43 Claremont 58.8% $6,149,503 30.9% 43 Lancaster 71.4% $1!,700,986 21.5%
44 Huntington Park 107.4% $9,153,901 30.7% 44 Torrance 36.7% $30,771,557 21.4%
45 Lancaster 115.9% $16,502,1!5 30.2% 45 Arcadia 53.7% $9,745,454 20.3%
46 Rolling Hills Estates 38.6% $1,766,793 28.5% 46 South Gate 122.5% $7,216,043 19.5%
47 Norwalk 69.6% $10,736,919 25.4% 47 Lvnwood 20.4% $5,079,182 18.5%
48 Hermosa Beach 24.1% $5,635,231 23.2% 48 El Monte 52.0% $8,644,339 16.3%
49 Patamount 30.9% $11,120,183 22.3% 49 Montebello 16.1% $7,047,301 15.9%
50 Arcadia 58.2% $8,711,216 19.0% 50 Palos Verdes Estates 86.8% $1,605,774 15.7%
51 Carson 40.9% $10,591,610 18.4% 51 West Hollywood 127.1% $9,295,313 15.6%
52 Inglewood 18.3% $17,131,737 18.3% 52 El Seoundo 18.9% $7,839,124 14.6%
53 Lynwood 23.3% $5,1!5,452 18.2% 53 South El Monte 29.8% $1,294,223 13.2%
54 West Covina 57.2% $8,786,221 17.0% 54 Sierra Madre 71.6% $870,761 12.2%
55 EIMonte 54.8% $8,440,216 16.9% 55 Downey 28.7% $6 123,000 8.8%
56 Baldwin Park 76.4% $3,429,025 15.3% 56 Baldwin Park 71.3% $1,826,473 8.1%
57 Downey 30.7% $10,070,000 14.8% 57 Monterey Park 48.2% $2,505,441 7.8%
58 South Gate 124.5% $4,716,524 13.2% 58 Los Angeles 14.1% $272,905,000 6.7%
59 Pica Rivera 129.4% $3,767,252 11.5% 59 Lakewood 149.1% $2,564,755 6.5%
60 Palos Verdes Estates 89.7% $1,111,013 10.7% 60 Lomita 69.0% $373,356 5.1%
61 Montebello 11.9% $4,394,672 10.5% 61 San Gabriel 25.3% $1,140,249 3.5%
62 El Segundo 23.2% $5,315,133 9.8% 62 Long Beach 20.3% $4,857,000 1.3%
2012-2013 LOS ANGELES COUNTY CiVIL GRAND JURY REPORT 128
CITIES FISCAL HEALTH, GOVERNANCE AND MANAGEMENT
Exhibit 9: General Fund Balance Indicators (Ranked Hi2hest to Lowest% Unassi2ned GF Balance)
Fiscal Year 2010-11 Fiscal Year 2011-12
GP Balance% Unassigned GF Unassigned GP GF Balance% Unassigned GF Unassigned GF
Rank City ofGF Exp's Balance % ofGF Exp's Rank City ofGF Exp's Balance % ofGF Exp's
63 Torrance 35.4% $14,156,365 9.7% 63 Walnut 118.7% $89,005 0.7%
64 Lomita 67.7% $619,957 8.5% 64 Alhambra 17.9% $374,673 0.7%
65 Monterey Park 43.4% $2,505,441 8.3% 65 Redondo Beach 20.2% $383,446 0.6%
66 Los Angeles 13.3% $253,882,000 6_5% 66 Gardena 23.5% $217,873 0.5%
67 Alhambra 20.0% $2,344,568 4.7% 67 Bell Gardens 177.6% $0 0.0%
68 Lakewood 138.2% $1,258,266 3.2% 67 Burbank 56.8% $47,098,000 0.0%
69 South EI Monte 18.7% $197,862 2.0% 67 Glendora 66.7% $0 0.0%
70 Gardena 23.9% $257,210 0.7% 67 Irwindale 326.3% $0 0.0%
71 Long Beach 17.4% $682,000 0.2% 67 La Verne 39.5% $0 0.0%
72 Glendora 78.6% $0 0.0% 67 Pica Rivera 129.5% $0 0.0%
72 Irwindale 384.7% $0 0.0% 67 Pomona 3.0% $0 0.0%
72 La Verne 33.4% $0 0.0% 74 San Fernando {7.8~·-;,) ($1_:>71,548) (!0.\J%)
72 Pomona 7.5% $0 0.0% 75 Pasadena 31.0% ($40,!?9.137) (23.1%)
72 Redondo Beach 21.2% $0 0.0% 76 Monrovia (27.5%) ($8)~74,464) (27.7°-;",)
72 Walnut 131.8% $0 0.0% 77 Vernon (44.0%) 1$27,064,820) (47.4%)
78 Pasadena 25.7% ($1390,808) {.l\l>.-{_l) NA Azusa
79 San Gabriel 36.2% ($639,868) (2.1%) NA Bradbury
80 West Hollywood 128.2% ($L266,4l2) 1),2~·(>) NA Hawaiian Gardens
81 San Fernando (3.2%) ($856,695) {4.4'};.) NA Huntington Park
82 Vernon 14.0% ($4,5~4.595) (~_!'~-'(,) NA Jnolewood
83 Azusa 53.5% ($4.662,967) (15.3%) NA La Habra Heights
84 Monrovia 10.4% ($8.+)2)52) (27_1 %,) NA Lawndale
Source: Comprehensive Annual Financial Report (CAFR) or Basic Financial Statements obtained from each City.
Financial information for FY 2010-11 or FY 2011-12 was not available from the cities of A val on, Bell, Compton, and Maywood as of April 25, 20 13.
Financial information for FY 2011-12 was not available from the cities of Azusa, Bradbury, Hawaiian Gardens, Huntington Park, Inglewood, La Habra
Heights, and Lawndale as of April25, 2013.
2012-2013 LOS ANGELES COUNTY CIVIL GRAND JURY REPORT 129
CITIES FISCAL HEALTH, GOVERNANCE AND MANAGEMENT
FINDINGS-FISCAL HEALTH
I. Most cities expended more than they received in revenues during FY 2011-12.
2. Most cities' total net assets and general fund balances declined during FY 2011-12, and
several cities' ratios of total net assets to total liabilities are lower than desirable.
RECOMMENDATIONS-FISCAL HEALTH 1
I. All cities should adopt financial planning, revenue and expenditure policies to guide city
officials to develop sustainable, balanced budgets.
2. All cities should develop a balanced budget and commit to operate within the budget
constraints.
3. All cities should not use one-time revenues to fund recurring or on-going expenditures.
4. All cities should adopt a method and practice of saving into a reserve or "rainy day" fund
to supplement operating revenue in years of short fall.
1 See Exhibit 12
2012-2013 LOS ANGELES COUNTY CIVIL GRAND JuRY REPORT 130
CITIES FISCAL HEALTH, GOVERNANCE AND MANAGEMENT
GOVERNANCE AND FINANCIAL MANAGEMENT BEST PRACTICES
The current fiscal health of cities is largely due to the economic downturn that began in 2008 and
continues. However, the overall governance and management practices of each city contributed
to how well each city was prepared for this downturn, and how effectively each has responded.
The following sections of this report present information on best practices for local governments
in the areas of governance and financial management.
Current practices by the cities are compared to these best practices and recommendations made
for improvements. These best practices and recommendations should be useful to the cities in
addressing their current financial challenges, and preparing for the future.
The Grand Jury identified best practices for local governments in the areas of governance and
financial management to be used as a basis for comparison with the practice of cities. A
questionnaire was developed and administered to identify the current practice of cities in each of
these areas. As part of this questionnaire cities were requested to provide specific documentation
in each of these areas and to provide comments or explanations regarding their responses and
policies. In the following sections, the Grand Jury provides information on the best practices
identified, and compares the current practices of cities with these best practices.
A copy of the questionnaire is provided in Appendix A of this report. The following table shows
each city's response in each area.
2012-2013 LOS ANGELES COUNTY CIVIL GRAND JURY REPORT 131
CiTIES FISCAL HEALTH, GOVERNANCE AND MANAGEMENT
2012-2013 LOS ANGELES COUNTY CIVIL GRAND JURY REPORT 132
CITIES FISCAL HEALTH, GoVERNANCE AND MA_'NAGEMENT
Exhibit 10: Overview of Governance and Financial Mana2ement Best Practices Questionnaire Reponses
Governance I Audit Committee Audit Procurement Acct • Manual Fraud I Ethics Internal Controls I Audit Gen Fund Public R~porting Results . . _g li ~ ~ ! ;; ] I ] ' ~ 3 ~ ' ~ ~ -~ " 1 ' ~ ~ ~ • ~ E ' E -~ ~ e ~ i7 ~ 5 ..,
& ·' -~ ' . ' 1 ~ ~
] I ;. 0 & F .. p 0 ] -~ • & -~ ~ . . :g • " ~ ~ 0 i7 " ' ] ' ~ e € ·' • ' ] ~ .< ~ § -~ . ~ "' ell " -~ ~ " :g ' ~ :g ~ ~ .. c ~ l g ~ ' g . 0 ~ a " ~ ' .$ ~ '5 ' -~ ... ~ 0 £ ' -~' " 0 & ' ~ ~ ' 1 . ·' ~ ~ ~ . ~ ~ ~ ~ ~ ~ ~ :i: g ,E :! • " ~ ' .. -~ ·E " l 1 0 i ~ • . ' I
.. ' -~ . § . 1 1 1 ~ ~ -~ ~ • ~ " ~ ~ 1 "i . -~ ::; .., ~ ~ s • ~ ~ ~ ~ ' "' ~ . ~ ~ ~ ~ ~ ! ~ t • ~ • ~ ~ ' ~ ~ :a d • ; • ~ ~ ~ ..,
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3 !!! ,; ~ • ;i :!! ~ i'i ;;! ::i :4 ;ii :;; ;:i ;;; $} " ,; ;;; r;i ~ ;f. ~ -:. .: ~ Cit ~ ... ,.; ..; "' -o '"' " '" "•
Agoura Hills N N y y y y y y y y N N y N y y N y N y y y y y N y y y y y y y 25 78% J!
Alhambra y y y N y y N y y N N y N y N y N N y N y y y N y N y y y y y 21 66% 56
Arcadia N N y y y y y N y y N y y N y N y N y y y y N y N NA y y y y y 20 63% 65
Artesia y y y y y y y y N N y y y y N NA y y y y y 18 56% 78
Avalon N N y N y y y y y y N y y N N N N N N y y y y y y N NA y N y y y " 56% 78
Azusa 1\: N y y y y y N y y N N y N y N y N NA N N y y y N N NA y y y y y 19 59% 74
Baldwin Park ·' y y y y y y y y y y y y y y y y y y y y y y y N y y y y y y y 29 91% 7
Bell y N y y y y y N y y N N y y N y y ' N N N N N y y N N NA y N y y y 19 59% 74
Bell Gardens N N y y y y y N y y N N y N y N N N N y y y y N N y N y y y y y 20 63% 65
Bellflower y y y y y y y N y N y y N y N y N NA y N y N y N y y y y y y y 11 66% 56
Beverly Hills y y y y y y y y y y N y N y y y y y y y y y y N y y y y y y y 27 84% 20
Bradbury y N y y y y y N y y N N N N y N y N y y y y y N N y y y N y y y 22 69% 50
Burbank y y y y y y y y y y N N N N N N N N y y y y y y y y y y y y y y 25 78% J!
Calabassas N N y y y y y N y y N N y y y y y y y y y y y y N y y y y y y y 27 84% 20
"""'"" N N y y y y y N y y N y N N y y y y N N N y N N N y N y y y y y 18 56% 78
Cerntos y y y y y y y N y y N N y y y y y y y y y y y y y N NA y y y y y 28 88% 14
Claremont y y y y y y y N y y N y y y y y N N N y y y y y N N NA y y y y y 23 72% 42
Commerce y N y y y y y y y y N y N N N y y y N y y y y N N y y y y y y y 23 72% 42
Compton N N y N N y y N y y N N y y y y y N N y y y y y N y N y y y y 21 66% 56
Covina y y y y y y y y y y N N y y y N N N N y y y y y N y y y y y y y 26 81% 15
Cudahy N N y N N y y N y y N N N N N N N N N N N N N N N N NA y N y N y 9 28% 87
Culver City y y y y y y y y y y N N y y y y y y y y y y y y N y y y y y y y 30 94% ' Diamond Bar y N y N y N y N y y N y y N y y N N N y y y y N N y y y y y y y 20 63% 65
Downev y y y y y y y y y y N N y y y y y y y y y y y y y N NA y y y y y 29 91% 7
Duarte y y y y y y y N y y N N y y y y y y y y y y y y y N NA y y y y y 28 88% 14
2012-2013 LOS A.'<GELES COUNTY C!V!LGRAND JURY REPORT 133
CITJES FISCAL HEALTH, GoVERNANCE AND MANAGEMENT
Exhibit lO: Overview of Governance and Financial Mana2;ement Best Practices Questionnaire Reponses
Governance I Audit Committee Audit Procurement Acctg~ Manual Fraud I Ethics Internal Controls I Audit Gen Fund Public Reportim! Results . . > ·~ ~ ] ~ • ~ . ' ] ~ ·' : ] • ~ ~ ' ~ ~ ] i ., ~ ] ~ ~ ~ ~ ,, ~ ~ . t ~ & ·= ~ i . -;, ~ 1 ~ § ·~ ~ ~ ~ 0 1 ~ ·' j > " ] ·' ~ i . ~ . " ~ ~ ~ ] ~ ~ u ~ ' ;; .~ ~ ] .0 ~ • ~ .~ ~ ·' ~ ~ " ~ ] ~ > > ~ ~ ' ·' ~ ' ' ;;: ~ • ~ ~ 00 £ > ] a .5 a ~ • : ~ ~ ~ i ~ ·' g a 0 cO g ~ • . ·E :E i • " .~ ~ [ . . 1 < ] ~ ~ ~ " ~ . ·~ ~ . ~ ~ ~ R ~ < • . ~ ~ i . 0 ~ £ . ' ~ " " .§ < ~ :~ < ~ ' .. • ~ ~ ~ ~ ' 0 ~ ! . .!;l ~ • ;: ~ ~ ~ .E ' ~ ' • ~ ' ~ ~ • d ;; . ~ . ' ~ < g i • . • ~ ~ 6 ~ 0 ~ • Q ~ ~ d 0 6 0 ~ d ~ ~ ] < ~ ~ .
~ 0 • • 0 ~ z ~ u u ~ '" < 1= u " ~ < < u ~ •
City ~ ~ ~ ~ "' • ~ ~ "' ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ :i :j, :g z ~ ~
El Monte y N y y y y y N y y N N N N N N N y N y y y y y N y y y y y y y 22 69% 50
ElSe undo y y y y y y y N y y N N y y y y y y N y y y y N N y y y y y y y 27 84% 20
Gardena y N y y y y y N y y N N y y y y N N N y y y y N y N y y y y y 23 72% 42
Glendale y y y y y y y y y y y y y y y y y y y y y y y y y y N y y y y y 30 94% 3
Glendora y y y y y y y N y N N N y N y N N N N N y y y y N y y y y y y y 22 69% 50
Hawaiian Gardens y y y y y y y N y y N N N N y y y N N y y y y y N y y y y y y 24 75% 36
Hawthorne N y y y y y y y N N y N y y N N y y y N y N N NA y y y y y 20 63% 65
Hermosa Beach N N y y y N y N y y N N y y y y N N y y y y y y N y y y y y y y 24 75"/o 36
Hidden Hills N N y N N y y N y N N N N N y y N N y N y y y y N y y y y y y N 18 56% 78
Huntington Park N N y y y y y N y y N y y y y N N N N y N y y y N y y y y y y y 21 66% 56
Industry N N y N N y y N y N N N N N N N N N N N N N N N N N NA y y y N y 9 28% 87
J!!,g_lewood N N y N y N y N y y N y y N y N y N y N N N y N N y y y y y y y 17 53% 83
lrwindale y y y y y y y N y N N N y y y N y y N y y y y y N y y y y y y y 26 81% 25
La Canada-Flintridge y y y y y y y y y N N N y N N y y N y y y y y y N y y y y y y y 26 81% 25
La Habra Heights ' N y y y y y y y y N N y N y y N N y y y y y y N N N y y y y y 23 72% 42
La Mirada y y y y y N y N y N N N y N y N y N N y y y y y N N NA y y y y y 21 66% 56
La Puente y y y y y y y N y y y N y N y y y y N y N y y N N y y y y y 24 75% 36
La Verne y y y y y y y N y y N y N y y y y y y y y y y y N y N y y y y y 26 81% 25
Lakewood y y y y y y y N y N N N y y y N y N N y y y y y N y y y y y y y 25 78% 31
Lancaster y N y y N y y y y y N N y N y y y y N y y y y N N y N y y y y y 24 75% 36
Lawndale y N y y y y y y y y N y y N N y y N y y y y y y N N NA y y y y y 23 72% 42
Lomita N N y y y y y y y y y N N N N N N N y N N N y y N y y y y y y y 20 63% 65
Long Beach y y y y y y y y y y N N y y y y y y y y y y y y y y y y y y y y 31 97% 1
Los An eles y y y N' N' y y y y y N N y N y y y y y y y y y y y y N y y y y y 27 90% 13
Lynwood y y y y y y y y y y N N y y y N y N y y y y y y y y y y y y y y 29 91% 7
Malibu N N y y y y y y y N N N y y y y y N y y y y y y__ N y y y y y y y ~§_ ill% 25
2012-20\3 LosMGELES COUNTY CJ\/U. GRAND JURY REPORT 134
CITIES FISCAL HEALTH, GOVERNANCE AND MANAGEMENT
Exhibit 10: Overview of Govemance and Financial Mana~ement Best Practices Questionnaire Reponses
Governance I Audit Committee Audit Procurement Acct . Manual Fraud I Ethics Internal Controls I Audit Gen Fund Public Reportine: Results
c c c ~ ~ I ~ ' ~ I ~ . ~ J! ~ ~ ~ ~ ] -~ "' J ~ 'i ~ j ~ ·' ] c .g ~ ~ ~ ~ e ~ • ' c ' ~ ~ 1 ~ ~ 00 ~ 0 ·~ l ~ u • ] ~ -~ ! 1 ~ ~ ~ ~ c ~ ~ ~ ~
] i ~ 00 ' ' 1 ., :§ ~ ~ " ~ ' E ~ ~ ' • :~ ~ ,;: -~ 0 ' " 8 ~ ~ ' ~ f G c 0 c ~ ~ ~ ~ ... ; ~ t' 8 0 :;_ .~ "' ~ ~ ~ l ~ ~ ~ g ~ "' ~ -~ ~ ' ~ • , ·' l 0 1 ~ ~ ~ " ~ • 1;:: ~ c ~ £ ~ ~ ~ ~ } " 1 ] ~ E ~ ~ ~ 0 c 'E .~ " £ l .~ ~ .:; 1 ~ > ~ ., 0
~ ~ : ~ ' ~ ~ c ·= ~ ';; ! b ~ ~ 1 ~ 'f ~ ~ c ~ i ~ c ; c ~ ] c ~ 0 0 c c u ~ ~ ~ ~ ~ ~ 0 u u u u u ~ • ~ ;: < l ' ~ ~ u c ~ u ~ z ~ ~ ~ ~ u ' ~ ~ City ~ 3 ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ;j ,; ~ :;; ~ ~ ~ ~ ~ ~ ~ :;i ~ :P. i " ~ ~ ,; ~ " ~ ~
Manhattan Beach y y y y y y y N y y N N N N y N N N y N N y N N N y y y y y y y 20 63% 65
Maywood y y y y N y N N y y N N y y N y y N N N y y y y N N NA y N y N N ]8 56% 78
Monrovm y y y y y y y N y y N y y y y y y N N y y y y y y y N y y y y y 26 81% 25
M<)Iltebello y N y y y y y y y y N y y N y N N N N y N N y N N y N y y y y y 19 59% 74
Monterrey Park y y y y y y y N y y y N y y y y N y y y y y y y N y y y y y y y 29 91% 7
Norwalk y y y N y y y N y y N N N N N N y N N N N y y N N y y y y y y y 19 59% 74
Palmdale y y y y y y y y y y N y y y y y y y y y y y y y N y y y y y y y 29 91% 7
Palos Verdes Estates N y y N N N y N y N N N y y y y N N N y N y y y N y y y y y y y 20 63% 65
Paramount y N y y N y y N y y N y y y y y N y y N y y N y N N NA y y y y y 21 66% 56
Pasadena y y y y y y y y y y N N y N y y y N y y y y y y y y N y y y y y 28 88% 14
P1c0 Rivera •' y y y y y y y y y N y y y y ,, y y y y y I y y ,. y y y y y y y 28 88% 14
Pomona y y y y y y y N y y y N y y y y y y N y y y y y N y y y y y y y 29 91% 7
Rancho Palos Verdes y y y y y N y N y y N y y y y N y N N N N y N N N y y y y y y y 20 63% 65
Redondo Beach y y y y y y y y y y y N y y y y y y y y y y y y y y N y y y y y 31 97% 1
Rolling Hills N N y y N y y N y y N y y y y N y N N y y y y y N y y y y y y y 22 69% 50
Rolling Hills Estates N y y y y y y y y y N y y N y y y y y y y y y y N y y y y y y y 27 84% 20
Rosemead y y y y y y y N y y N N y N y N N y " y N y y y N y N y y y y y 23 72% 42
San Dimas N N y y y N y y y N N N y y y y N N y y y y y y y N NA y y y y y 23 72% 42
San Fernando N N N N N y y N y y N N y N N N N N NA y N y y N N N NA y y y y y 14 44% 85
san Gabriel y y y y y y y N y y N y y y y N N N NA y y y y y N y N y y y y y 23 72% 42
San Manno y N y N y y y N y N N N y y y N N N y y N y y y y y N y y y y y 22 69% 50
Santa Clarita y N y y y y y N y y N N y N y y y N N y N y y y N y y y y y y y " 75% 36
Santa Fe Sprmgs y N y y y y y N y N N y y N y N y N N y N y N N N N NA y y y y y 17 53% 83
Santa Monica y y y y y y y N y y N y N N y N N N N N N y y y N y y y y y y y 20 63% 65
Sierra Madre y y y y y y y N y y N N N y y N y N NA y y y y y N y y y y y y y 25 78% 31
Si!Ulal Hill y y y y y y y N y y N N y y y y y y y y y y y y y y y y y y y y 30 94% 3
2012-2013 Los ANGELES COUNTY CIVIL GRAND JURY REPORT 135
CITIES FISCAL HEAL TI-l, GoVERNANCE AND MANAGEMENT
Exhibit 10: Overview of Governance and Financial Man;tZ!'ment Best Practices Questionnaire Reponses
Governance I Audit Committee Audit Procurement Att . Manual Fraud I Ethics Internal Controls I Audit Gen Fund Public Renorting Results
: • .~ li ~ ~ . I , ~ " ] .. ~ ~ ~ ~ • .; ·~ ·~ . ' ~ ~ 0 ~ ~ ~~ ~ ·' ~ 1 .~ ~ ~ ~ ~ • ' ·~ ] ' ; ~ ] ~ 1 ~ ~ 0 0 0 " u ' ] -. . ~ ! ·~ I ·~ 0 • ~ " ~ • ~ 1 ~ ' .~ ~ e ~ ~ ·~ ~ ] 0 ' ' 0 ~ ~ " ~ .i ;: ~ ~ j ~ 0 j ~ ~ ! " Q 0 • ~ ] " > ~ . ~ ~ ~ e ,q g < " ~ " 6 ~ ~ :; " ~ ' ·E :a • 0 0 • Q " ' ·~ $ ;; • u ~ ·E :~ ,:1 ,:1 li ~ ~ ~ ~ ~ ~ ~ ~ ' ·~ . 1l . . i • ] -3 ~ ] ' ~ ~ ~ 0 ~ • 0 ~ ] ~ .! ~ . < ~ : ' ~ ~ 1 • > ~ ~ 0 • . " .. I :a :g ' 0 ~ t ~ ] E ., • • ' E g ~ ~ ~ 6 • • ~ ~ . : I ] " . ~ ' a • ~ u • & 0 ~ ~ d • d u d . ~ 6 ~ ~ ] Q ~ .:1 ~ d 0 ~ z ~ u 0 ~ " City ~ " ~ .. "' ~ ~ ;; ~ ~ ~ • .. .,; ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ;j, ::; z ~ ~ ~ ~ " " " South El Monte N N y N y y y N y y y N y y y y N y N y y N y y N N NA y y y y y 22 69% so
South Pasadena y N y N y y y N y y N N y N y y N y y y N N y y y y y y y 21 66% 56
Southgate y y y y y y y N y y N y N N N y N y N N y y y y ~ y NA y y y y y 21 66% 56
TempleCitv y y y y y y y N y y N N y y y N y N N y y y y y N y N y y y y y 25 78% 31
Torrance y y y y y y y y y y N N y y y y y N y y y y y y y N NA y y y y y 28 88% 14
Vernon y y y y y y y y y y N N y y y y y y y y y y y y y y N y y y y y 30 94% 3
Walnut y y y y y y y y y N N N y l\ y y y y y N y y y y N y y y y y y y 27 84% 20
West Covina y N y y y y y N y N N N N N N N N N N N N y N N N N NA y y y y y 14 44% 85
West Hollywood y y y y y y y N y y N N y y y y y y N y y y y y N y y y y y y y " 88% 14
Westlake Vii! ' y y y y y y y N y y N N y y N N y y y y y N y y y y y y y 24 75% 36
Whittier y y y y y y y N y N N N N y y y y N N N y y y N N N NA Y Y Y Y Y-
Positive Responses 62 52 86 74 76 81 86 28 8& 71 9 63 68 45 72 54 52 33 36 67 64 80 77 65 18 ~ 44 u ~ a 85 u
Percentage 70% 59% 98% 84% 86% 92% 98% 32% 100% 81% 10% 72% 77% 51% 82% 61% 59% 38% 41% 76% 73% 91% 88% 74% 20% 72% 50% 100% 94% 100% 97% 95%
Average Number and Percentage of Pos1t1ve Responses 23 72%
Notes:
I. * A few dtie.~ did 11u! provide the. requested documentation 1o support thl' city's responses, or the d(lcumentatiou pnwidcd did not adeq•mtely Bupport tlu~ dty's r~pouses. TJH,se responses ban' been repla<:ed with an ".
Each city was given numerous opportunities, over several mouths., to provide the requested documentation.
2. Some cities did not respond to some questions. If a question was left blank an answer of No was assumed.
3. The Executive ofthe Oty of Los Angeles is the elected Mayor. All such, it would not be appropriate for the City Council to establish goals or evaluate the executive's performance.
Responses of No to questions 4 and 5 regarding establishing goals and evaluation of the executive are considered appropriate and p<»itive responses for the City of Los Angeles.
4. For all cities a No is considered a positiven!Sponse for Question 20. Doe5 your city allow the independent auditor to provide non-audit S<:!rvices to the city?
2012-20!3 LOSANGELE.S COUNTY CfV!LGRAND JURY REPORT 136
GOVERNANCE PRACTICES
The quality of the leadership of an organization determines its performance and effectiveness.
An organization with effective leadership prepares for and quickly resolves issues and
challenges, provides clarity of direction and roles and establishes real accountability for the
organization.
"Governance" describes the role of the city council in providing leadership for an organization.
Governance generally includes responsibility for providing the overall direction for the
organization, making key decisions for the organization through policy, and overseeing the
organization's performance. Key tools of effective governance include strategic planning and
management including performance measurement and monitoring. The city council in each city
is responsible for governing the organization.
Strategic Planning
The role of any city council is to provide strategic focus and direction for the city. Oversight is
also an important function for any city council, ensuring that organizational activities are
consistent with legal requirements and its own policies and procedures. Since the city council of
each city controls the focus and direction of the organization, the risks posed by ineffective
leadership are substantial.
Strategic planning is a disciplined effort to produce fundamental decisions and shape and guide
what an organization is, what it does and why it does it. When the strategic plan is linked to
operations, all groups in the organization have a clear understanding of its purpose, the strategies
used to achieve that purpose and the progress being achieved.
The International City/County Management Association (ICMA) is the professional association
of city and county managers and administrators. The following excerpt is from the ICMA's
publication: Strategic Planning: A New Perspective (or Public Managers (2002).
Strmegic thinking and planning is one of the most critical elements of public
management. Its purpose is to establish long-term goals, annual objectives, and
detailed actions/strategies that address issues related to perfhrmance,
productivitv. required statutory services, and community and personal well-being.
Yet even though it is a key factor in the success of any organization. ~[forts to
implement strategic thinking and planning ofien fail.
In addition the Government Finance Officer's Association recommends that:
... all governmental entities use some.filrm oj'strategic planning to provide a long-
term per.1pective for service delive1:v and budgeting, thus establishing logical
links' bei1Veen authorized .lpimding and broad organizational goa!s.(GH>A:
Recommended Budget Practice on the Establishment of Strategic Plans (2005)( Budget).
2012-2013 LOS ANGELES COUNTY CJVJL GRAND JURY REPORT 137
Most cities (62 yes, 24 no, 2 not documented) responded that the city council developed and
adopted a strategic plan that articulates the mission, vision, core values and priorities for the city.
The Grand Jury asked each city to provide a copy of their strategic plan. In the review of this
documentation and comments provided by the cities the Grand Jury found that several cities had
developed and adopted comprehensive strategic plans. Other cities developed mission, vision,
core values and goals through strategic planning sessions with the city council. These strategic
planning efforts include assessments of the city's strengths, weaknesses, opportunities, and
threats, and included identification of specific strategies and initiatives with responsibility for
completion and timelines. Many of these cities conduct follow-up sessions every six months to
monitor and evaluate progress and any changes in priorities. These strategic plans also provide
appropriate strategic focus and direction for these cities.
Several cities that responded that they had adopted strategic plans provided documentation of
annual or biennial budget goals adopted. While these are important for the budget, they are
typically focused on the short term. Budget goals do not provide the appropriate strategic focus
for these cities that would be accomplished through a strategic planning effort.
A few cities submitted a copy of the city's general plan as their strategic plan. Every city is
required to have a general plan by state law (Government Code section 65300). The purpose of a
general plan is to define the city's physical development and focuses primarily on land use. A
general plan does not meet any standards for an organizational strategic plan.
Performance Measurement
Performance measurement demonstrates the success of organizational activities in addressing a
specific need. Meaningful performance measurement includes a balanced set of indicators,
ensures the collection of reliable indicator data, provides for the analysis and reporting of
indicator information and drives service improvement efforts and the testing of new initiatives.
Performance measures should generally be quantified to allow for comparison of performance
from year to year.
The following is an excerpt from the Government Finance Officers Association recommended
best practice regarding performance management and indicators:
... program and service performance measures (should) be developed and used as
an important component of long term strategic planning and decision making
which should be linked to governmental budgeting. Performance measures
should:
• Be based on program goals and objectives that tie to a statement of
program mission or purpose;
• Measure program outcomes;
• Provide for resource allocation comparisons over time;
• Measure efficiency and effectiveness for continuous improvement;
• Be verifiable, understandable, and timely;
• Be consistent throughout the strategic plan, budget, accounting and
reporting systems and to the extent practical, be consistent over time;
2012-2013 LOS ANGELES COUNTY CiVIL GRAND JURY REPORT 138
" B e r e p o r t e d i n t e r n a l l y a n d e x t e r n a l l y ;
" B e m o n i t o r e d a n d u s e d i n m a n a g e r i a l d e c i s i o n - m a k i n g p r o c e s s e s ;
" B e l i m i t e d t o a n u m b e r a n d d e g r e e o f c o m p l e x i t y t h a t c a n p r o v i d e a n
e f f i c i e n t a n d m e a n i n g f u l w a y t o a s s e s s t h e e f f e c t i v e n e s s a n d e f f i c i e n c y o f
k e y p r o g r a m s ; a n d
" B e d e s i g n e d i n s u c h a w a y t o m o t i v a t e s t a f f a t a l l l e v e l s t o c o n t r i b u t e
t o w a r d o r g a n i z a t i o n a l i m p r o v e m e n t . ( G F O A : P e r l ' o r m a n c e M a n a g e m e n t :
M e a s u r e m e n t f o r D e c i s i o n M a k i n g ( 2 0 0 2 a n d 2 0 0 7 ) B u d g e t )
M o s t o f t h e c i t i e s ( 5 2 y e s , 3 6 n o ) a l s o r e s p o n d e d t h a t t h e c i t y c o u n c i l h a d a d o p t e d p e r f o r m a n c e
m e a s u r e s o n p r i o r i t i e s . T h e G r a n d J u r y a s k e d e a c h c i t y t o p r o v i d e c o p i e s o f t h e i r p e r f o r m a n c e
m e a s u r e s o r i n d i c a t o r s . I n r e v i e w i n g t h i s s u p p o r t i n g d o c u m e n t a t i o n a n d c o m m e n t s p r o v i d e d b y
t h e c i t i e s t h e G r a n d J u r y f o u n d s e v e r a l c i t i e s h a d d e v e l o p e d p e r f o r m a n c e i n d i c a t o r s t i e d d i r e c t l y
t o t h e s t r a t e g i c g o a l s a d o p t e d b y t h e c o u n c i l . S e v e r a l c i t i e s t h a t r e s p o n d e d i n d i c a t e d t h e y h a d
d e v e l o p e d a n d r e p o r t e d o n p e r f o r m a n c e m e a s u r e s . H o w e v e r , t h e y d i d n o t p r o v i d e a n y
d o c u m e n t a t i o n o n p e r f o r m a n c e m e a s u r e s . O t h e r c i t i e s ' p e r f o r m a n c e i n f o r m a t i o n w a s n o t
q u a n t i f i e d , o r w a s f o c u s e d o n a c t i v i t i e s o r w o r k l o a d , w i t h l i t t l e o r n o i n f o r m a t i o n o n r e s u l t s o r
o u t c o m e s .
C i t i e s t h a t h a v e n o t d e v e l o p e d a n d r e p o r t e d o n p e r f o r m a n c e m e a s u r e s o r i n d i c a t o r s t o e v a l u a t e
o u t c o m e s o n p r i o r i t i e s s h o u l d c o n s i d e r d o s o . T h e s e p e r f o r m a n c e m e a s u r e s s h o u l d b e q u a n t i f i e d ,
f o c u s e d o n r e s u l t s . I n f o r m a t i o n s h o u l d b e p r o v i d e d f o r s e v e r a l y e a r s t o a l l o w e v a l u a t i o n o f
p r o g r e s s o v e r t i m e .
C i t y C o u n c i l a n d E x e c u t i v e R e l a t i o n s h i p
E f f e c t i v e g o v e r n a n c e r e q u i r e s t h a t f o r m a l s t r u c t u r e s a n d p r a c t i c e s d e f i n e h o w t h e c i t y c o u n c i l
c a r r i e s o u t i t s d u t i e s . M a n y c i t y c o u n c i l s d e v e l o p a n d d o c u m e n t b y l a w s , p o l i c i e s a n d p r o c e d u r e s
t h a t c l e a r l y d e f i n e t h e r o l e o f t h e c i t y c o u n c i l m e m b e r s . S p e c i f i c a r e a s i n w h i c h p o l i c i e s a r e m o s t
o f t e n n e e d e d i n c l u d e t h e r o l e o f c i t y c o u n c i l m e m b e r s a n d t h e e x e c u t i v e . T h e r e l a t i o n s h i p
b e t w e e n t h e c i t y c o u n c i l a n d m a n a g e m e n t i s e x t r e m e l y i m p o r t a n t .
C i t i e s o p e r a t e m o s t e f f e c t i v e l y w h e n t h e r e i s a c l e a r d e f i n i t i o n a n d u n d e r s t a n d i n g o f t h e c i t y
c o u n c i l ' s r o l e , m a n a g e m e n t ' s r o l e a n d t h e d i f f e r e n c e b e t w e e n t h e t w o . T h e c i t y c o u n c i l ' s r o l e
s h o u l d b e t o p r o v i d e p o l i c y d i r e c t i o n a n d o v e r s i g h t . M a n a g e m e n t ' s r o l e i s t o e x e c u t e t h a t
d i r e c t i o n .
I t i s a l s o i m p o r t a n t f o r c i t y c o u n c i l m e m b e r s t o r e c o g n i z e t h a t t h e i r a u t h o r i t y o n l y e x i s t s w h e n
a c t i n g a s a b o d y . I n d i v i d u a l m e m b e r s o f a c i t y c o u n c i l h a v e n o a u t h o r i t y t o m a k e d e c i s i o n s o r
d i r e c t t h e c i t y ' s m a n a g e m e n t o r c i t y s t a f f . O n l y d e c i s i o n s a n d d i r e c t i v e s o f t h e c i t y c o u n c i l ,
a c t i n g a s a w h o l e , a r e a u t h o r i t a t i v e a n d b i n d i n g .
2 0 1 2 - 2 0 1 3 L O S A N G E L E S C O U N T Y C I V I L G R A N D J U R Y R E P O R T 1 3 9
Most cities (86 yes, 2 no) responded that they have a formal policy that documents the roles of
the city council and the city's executive. The Grand Jury asked each city to provide a copy of
the formal policy defining roles. In reviewing this documentation and comments provided by the
cities the Grand Jury found all cities had defined the basic qualifications, powers and duties for
both the city council and the city's executive in either the city's charter, municipal code, or both.
These policies provide a solid legal foundation for the relationship between the two.
A best practice is to go beyond this basic framework and develop a more detailed description of
the relationship and working approach of the two. Some have developed a comprehensive
"governance" policy that defines the working relationship between the city council, executive,
and staff. While not required, this more extensive "governance framework" can improve the
cohesion and effectiveness of both the city council and the executive.
Executive Goals and Evaluation
A key role of each city council is providing clear direction to the city's executive. This clear
direction should establish specific expectations for the executive and consist of goals and
objectives to be accomplished within timeframes. Equally important is for the city council to
evaluate the performance of the city's executive, providing meaningful feedback on how well
expectations are being met. These evaluations should be accomplished routinely.
Most of the cities (74 yes, 14 no) also responded that the city council established specific goals
for the executive at least annually. Most of the cities (76 yes, 12 no) also responded that the city
council conducts a meaningful evaluation of the executive's performance annually.
The Grand Jury requested the specific goals established most recently for the city's executive. In
reviewing this documentation and comments provided by each, the Grand Jury found that several
cities had established very specific goals for the city's executive. Other cities established goals
for the city's executive as part of the strategic planning efforts, the budget document, or the
city's executive budget message. Several cities reported that the goals for the city's executive
were part of the performance evaluation process and were considered confidential.
City councils should develop a "governance" policy that more specifically defines the
relationship between the council and executive. City councils that do not develop specific
annual goals for the city's executive and conduct meaningful evaluations annually should do so.
Council-Adopted Policies
Other areas in which policies are most often needed include "Conflict of Interest" and
"Investment" policies. Transparency in public decision-making is essential. The public must be
able to rely on their representatives working in their best interest.
California Government Code sections 81000, et seq. ("Political Reform Act"), requires every
state and local government agency to adopt a conflict of interest code. The Political Reform Act
further requires every agency to review its conflict of interest code biennially to determine if it is
accurate or must be amended. The conflict of interest code must be amended when necessitated
by changed circumstances.
2012-2013 LOS ANGELES COUNTY CiVIL GRAND JURY REPORT 140
California Government Code section 53646 requires the city council of each city to annually
adopt an investment policy. The investment policy is intended to maximize the efficiency of the
city's cash management system, the investments of the city's funds, and to provide guidelines for
suitable investments. The primary goal of the investment policy should ensure compliance with
the law, provide protection of principal, maintain liquidity, and maximize investment income.
Most of the cities (81 yes, 7 no) responded the city council adopted and enforces a formal
"Conflict of Interest" policy. The Grand Jury requested each city provide a copy of the adopted
"Conflict of Interest" policy. Almost all the cities (86 yes, 2 no) also responded they had
adopted an "Investment" policy. The Grand Jury requested each city provide a copy of the
adopted "Investment" policy. In reviewing this documentation the Grand Jury found that cities
responding "yes" had provided investment policies. Artesia did not respond to this question,
which was recorded as a "no." Maywood responded "no", but also stated that the city did not
have any investments at this time.
FINDINGS-GOVERNANCE PRACTICES
I. Most cities have developed strategic plans to provide appropriate strategic focus and
direction for the city.
2. Most cities have developed performance measures to demonstrate the results of their
organizational activities and goals.
3. All cities stated they have a formal policy agreement, or other documents that define the
roles of city council and city executive.
4. Most city councils have established specific goals for executives at least annually.
5. Most cities have adopted a "Conflict of Interest" code.
6. Most cities have adopted an "Investment" policy.
7. Most cities published their financial reports or CAFR to their website.
RECOMMENDATIONS-GOVERNANCE PRACTICES 2
I. Cities should develop and adopt a strategic plan that articulates the mission, vision, core
values and priorities for the city.
2. Cities should develop and report on performance measures or indicators to evaluate
outcomes. These performance measures should be quantified, focused on outcomes, and
information should be provided for several years to allow evaluation of progress over
time.
3. City councils should develop specific annual goals for the city's executive.
4. City councils should conduct meaningful evaluations of the city's executive at least
annually.
5. Cities should publish their financial reports or CAFRs on their city's websites.
1 See Exhibit 12
2012-2013 LOS ANGELES COUNTY CIVIL GRAND JURY REPORT 141
FINANCIAL MANAGEMENT PRACTICES
The role and responsibility of financial management within each city is to manage and protect
the financial resources of the city. This includes planning, organizing, directing and controlling
the financial activities of the city. It also requires establishing adequate systems of internal
controls to ensure funds are used for their intended purposes. The transparency and reliability of
financial reporting is also important, ensuring that such reporting is consistent with appropriate
standards.
The Government Finance Officers Association is the association for public sector financial
management professionals. Its purpose is to enhance and promote the professional management
of governments for the public benefit. It identifies and develops financial policies and best
practices and promotes their use through education and training. It works closely with the
Governmental Accounting Standards Board (GASB), the American Institute of Certified Public
Accountants, and other organizations and recommends best practices for effective government
finance operations.
Beginning in 1993 the Government Finance Officers Association began to develop a body of
recommended practices in the functional areas of public finance. This gave Government Finance
Officers Association members and other state and local governments more guidance on sound
financial management practices. These recommended practices served as the basis for
evaluating the financial management practices of the cities discussed in the following sections.
Audit Committee
The responsibility for the quality of financial reporting by cities is shared by three groups: the
city council, finance department, and the independent auditor. Of these three, the city council is
in the unique position of being the ultimate monitor of the financial reporting process. An audit
committee is a practical approach for the city council to provide independent review of the city's
financial reporting processes, internal controls, and independent auditors.
The audit committee can also provide a forum for interested parties to candidly discuss concerns
separate from the management of the city. An effective audit committee helps ensure
management develops and follows a sound system of internal controls, procedures are in place to
objectively assess practices, and independent auditors objectively assess financial reporting
practices.
The following are excerpts from the Government Finance Officers Association recommended
best practice regarding audit committees:
The governing body of every state and local government should establish an audit
committee or its equivalent;
The audit committee should be formally established by charter, enabling resolution, or
other appropriate legal means and made directly responsible for the appointment,
compensation, retention, and oversight of the work of any independent accountants
engaged for the purpose of preparing or issuing an independent audit report or
performing other independent audit, review, or attest services. Likewise, the audit
2012-2013 LOS ANGELES COUNTY CIVIL GRAND JuRY REPORT 142
committee should be established in such a manner that all accountants thus engaged
report directly to the audit committee. The written documentation establishing the audit
committee should prescribe the scope of the committee's responsibilities, as well as its
structure, processes, and membership requirements. The audit committee should itself
periodically review such documentation, no less than once every jive years, to assess its
continued adequacy; (GFOA Audit Committees (1997, 2002, 2006. and 2008) (Committee on
Accounting. Auditing. and Financial Reporting--CAAFR).
Most cities (28 yes, 59 no, I not documented) responded that an audit committee had not been
established. For those cities that did have an audit committee, the Grand Jury requested each city
provide a copy of the formal document establishing the audit committee. Some cities stated that
the audit committee responsibilities were assigned to other committees of the city council. For
other cities the audit committee is a function of management, with members from the finance
department and other departments of the city. The Audit committee should not be a function of
management.
Audit Procurement
Independent audits play a key role in preserving the integrity of public finance functions and
maintaining public confidence in city government. Each city is required to have an independent
audit performed annually by external accountants. The selection of the independent auditor is an
important element of ensuring a quality audit. This includes ensuring the selected auditor meets
standards for independence and is selected competitively. Provision of non-audit services must
be carefully reviewed and approved.
The following are excerpts from the Government Finance Officers Association recommended
best practice regarding audit procurement:
Governmental entities should require in their audit contracts that the auditors of their
financial statements conform to the independence standard promulgated in the General
Accounting Office's Government Auditing Standards even for audit engagements that are
not otherwise subject to generally accepted government auditing standards.
Governmental entities should enter into multiyear agreements of at least five years in
duration when obtaining the services of independent auditors. Such multiyear agreements
can take a variety of different forms (e.g., a series of single-year contracts), consistent
with applicable legal requirements. Such agreements allow for greater continuity and
help to minimize the potential for disruption in connection with the independent audit.
Multiyear agreements can also help to reduce audit costs by allowing auditors to recover
certain "startup" costs over several years, rather than over a single year.
Governmental entities should undertake a full-scale competitive process for the selection
of independent auditors at the end of the term of each audit contract, consistent with
applicable legal requirements. Ideally, auditor independence would be enhanced by a
policy requiring that the independent auditor be replaced at the end of the audit contract,
as is often the case in the private sector. Unfortunately, the frequent lack of competition
among audit firms fully qualified to perform public-sector audits could make a policy of
mandatory auditor rotation counterproductive. In such cases, it is recommended that a
2012-2013 LOS ANGELES COUNTY CIVIL GRAND JURY REPORT 143
governmental entity actively seek the participation of all qualified firms, including the
current auditors, assuming that the past performance of the current auditors has proven
sati~factory. Except in cases where a multiyear agreement has taken the form of a series
~~single-year contracts, a contractual provision for the automatic renewal of the audit
contract (e.g., an automatic second term for the auditor upon satisfactory performance)
is inconsistent with this recommendation.
Professional standards allow independent auditors to perform certain types of non-audit
services for their audit clients. Any significant non-audit services should always be
approved in advance by a governmental entity's audit committee. Furthermore,
governmental entities should routinely explore the possibility of alternative service
providers before making a decision to engage their independent auditors to perform
significant non-audit services.
The audit procurement process should be structured so that the principal factor in the
selection of an independent auditor is the auditor's ability to perform a quality audit. In
no case should price be allowed to serve as the sole criterion for the selection of an
independent auditor. (UFO A: Audit Procurement ( 19% and 2002).
All cities (88 yes, 0 no) responded that audit contracts require auditors of financial statements
conform with independence standards. The Grand Jury obtained the audited financial statements
for most cities for Fiscal Years 2010-11 and 2011-12, the most recent available. In reviewing
this supporting documentation and comments provided by each city the Grand Jury found that all
independent audit reports included statements of compliance with auditing standards, including
standards of independence.
Most cities (71 yes, 17 no) responded that independent auditors were selected through a
competitive process. The Grand Jury requested each city provide copies of formal policies
related to audit procurement. In reviewing this supporting documentation and comments
provided by each city the Grand Jury found that most issue a Request for Proposals (RFP) for
audit services, typically with a term of up to 5 years. Most cities (9 yes, 79 no) do not require the
auditor to be replaced at the end of the contract term. Also most cities (25 yes, 63 no) responded
that they do not allow the independent auditor to provide non-audit services.
The Grand Jury also asked each city how many years the current independent auditor conducted
the annual city audit, and how long the term of the current independent audit contract was. The
exhibit below shows city responses.
Exhibit 11: Responses to Questions on Independent Auditor Contract Term
City 17. Years with 18. Audit Contract Term Current Auditor
Agoura Hills 3 3 + 2 one year renewals
Alhambra 7 5
Arcadia 2 4
2012-2013 LOS ANGELES COUNTY CIVIL GRAND JURY REPORT 144
Exhibit 11: Responses to Questions on Independent Auditor Contract Term
City 17. Years with 18. Audit Contract Term Current Auditor
Artesia I 3
Avalon 6 Current to FY20 I 0-11 with I yr term
Azusa 13 5
Baldwin Park II 2
Bell I 3
Bell Gardens 6 2006-2012 FYE 3 (1 year contract) (2 year option)
Bellflower 19 2
Beverly Hills Current 1 st year 5 years
Bradbury I 3
Burbank 2 3
Calabassas 8 3
Carson 3 3
Cerritos 4 3 with two I year extensions allowed
Claremont 6 5
Commerce 7 3
Compton NA NA
Covina 5 Annually
Cudahy 1 1
Culver City 2 3
Diamond Bar 3 years 3 years plus a 2 year extension at the City's option.
Downey 10+ I
Duarte 5 3
El Monte 3 3
El Segundo 6 4+ 2 1 yr extensions
Gardena 2 3
Glendale 5 6
Glendora 9 2014
Hawaiian Gardens one (I) year 4
Hawthorne 2 3+2 Yr Renewal
lstof3 year
Hermosa Beach contract 3 years with an option to extend 2 years
Hidden Hills 28 I
Huntington Park 5 5
Industry 5 ?
Inglewood 5 3
Irwindale 18 3
La Canada-
Flintridge 5 years I year
La Habra Heights 2 3
2012-2013 LOS ANGELES COUNTY CIVIL GRAND JURY REPORT 145
Exhibit 11: Responses to Questions on Independent Auditor Contract Term
City 17. Years with 18. Audit Contract Term Current Auditor
La Mirada 7 years 3 years with a 2 year option
La Puente 2 3
La Verne 2 6
Lakewood 34 Years 1-Year, contract renewed annually
Lancaster 23 5
Lawndale 3 3
Lomita 7 months 5 years
Long Beach 23+ 3
Los Angeles 10 5
Lynwood 3 I
Malibu 8 Expired after the close of FY II 112
Manhattan Beach 3 consecutive years 3 yrs +Two !-year extensions~ 5yrs
Maywood 3 5
Monrovia I I 5
Montebello I I
Monterrey Park I 3
Norwalk 5 5
Palmdale 15 5
Palos Verdes . .
Estates 2 3
Paramount 9 3
Pasadena 2 5
Pico Rivera I 3+1+1
Pomona 2 3
Rancho Palos
Verdes 5 5
Redondo Beach I 3
Rolling Hills 4 7
Rolling Hills
Estates 2 I year
Rosemead 2 5
San Dimas 32 3
San Fernando I 3
San Gabriel 3 3
San Marino 10 years+ 5 yrs std
Santa Clarita 3 I
Santa Fe Springs Four (4) years. One (I) year.
Santa Monica 1.5 5
Sierra Madre I 3 with option to extend to 5 years
2012-2013 LOS ANGELES COUNTY CIVIL GRAND JURY REPORT 146
Exhibit 11: Responses to Questions on Independent Auditor Contract Term
City 17. Years with 18. Audit Contract Term Current Auditor
Signal Hill 10 5
South El Monte 2 5
South Pasadena 17 3 years
Southgate 4 N/A
Temple City 2 3
Torrance 7 7
Vernon 14 I
Walnut Blank 5
West Covina 2 5
West Hollywood 13 3
Westlake Village 3 2
Whittier 2 3
Accounting Policies aud Procedures
Formal documentation of accounting policies and procedures is an essential component in
providing effective controls over accounting and financial reporting, as well as providing a
comprehensive framework of internal controls. Accountability requires a well-designed system
of documenting accounting policies and procedures. Documentation can also provide a useful
training tool for financial staff.
The following are excerpts from the Government Finance Officers Association recommended
best practice regarding accounting policies and procedures:
Every government should document its accounting policies and procedures.
Traditionally, such documentation has taken the form of an accounting policies and
procedures manual.
An appropriate level of management to emphasize their importance and authority should
promulgate accounting policies and procedures. The documentation of accounting
policies and procedures should be evaluated annually and updated periodically, no less
than once every three years, according to a predetermined schedule. Changes in policies
and procedures that occur between these periodic reviews should be updated in the
documentation promptly as they occur. A ;pecific employee should be assigned the duty
of overseeing this process. Management is responsible for ensuring that this duty is
performed consistently.
The documentation of accounting policies and procedures should be readily available to
all employees who need it. It should delineate the authority and responsibility of all
employees, especially the authority to authorize transactions and the responsibility for
the safekeeping of assets and records. Likewise, the documentation of accounting policies
2012-2013 LOS ANGELES COUNTY CIVIL GRAND JURY REPORT 147
and procedures should indicate which employees are to perform which procedures.
Procedures should be described as they are actually intended to be performed rather
than in some idealized form. Also, the documentation of accounting policies and
procedures should explain the design and purpose of control related procedures to
increase employee understanding of and support for controls. (CiFOA: Documentation of
Accounting Policies and Procedures (2002 and 2007) lCAAFR).
Most cities (68 yes, 20 no) responded that accounting policies and procedures were formally
documented in an accounting policies and procedures manual. Most cities (72 yes, 16 no) also
responded that accounting policies and procedures specifically define the authority and
responsibility of all employees, including the authority to authorize transactions and the
responsibility for safekeeping of assets and records.
The Grand Jury requested each city provide copies of their accounting policies and procedures
and accounting manual. In reviewing this supporting documentation and comments provided by
each city the Grand Jury found several cities had very comprehensive and detailed accounting
policies and procedures. These included specific authority and responsibility of employees.
Other cities had very high level and brief policies and procedures, with very little detail, and with
very little information on the specific authority and responsibility of employees.
About half the cities (45 yes, 43 no) also responded that the accounting policies and procedures
were reviewed annually and updated at least once every three years. The Grand Jury found very
little indication that policies and procedures were being reviewed and updated. Most policies
and procedures did not include an effective date or a revision date.
Reporting of Fraud, Abuse and Questionable Practices
Most cases of fraud, abuse or questionable accounting or auditing practices, come to the attention
of those responsible through employees or members of the public. In addition, accounting and
auditing standards require financial reporting systems to be designed to detect fraud and abuse.
They also detect any questionable accounting or auditing practices that could jeopardize the
integrity of the financial reporting system.
The following are excerpts from the Government Finance Officers Association recommended
best practice regarding reporting of fraud, abuse and questionable practices:
The Government Finance Officers Association recommends that every government
establish policies and procedures to encourage and facilitate the reporting of fraud or
abuse and questionable accounting or auditing practices. At a minimum, a government
should do all of the following:
• Formally approve, and widely distribute and publicize an ethics policy that can
serve as a practical basis for identifying potential instances of fraud or abuse and
questionable accounting or auditing practices.
• Establish practical mechanisms (e.g., hot line) to permit the confidential,
anonymous reporting of concerns about fraud or abuse and questionable
accounting or auditing practices to the appropriate responsible parties.
2012-2013 LOS ANGELES COUNTY CIVIL GRAND JURY REPORT 148
" A g o v e r n m e n t s h o u l d r e g u l a r l y p u b l i c i z e t h e a v a i l a b i l i t y o f t h e s e m e c h a n i s m s a n d
e n c o u r a g e i n d i v i d u a l s w h o m a y h a v e r e l e v a n t i n f o r m a t i o n t o p r o v i d e i t t o t h e
g o v e r n m e n t .
" M a k e i n t e r n a l a u d i t o r s ( o r t h e i r e q u i v a l e n t ) r e s p o n s i b l e f o r t h e m e c h a n i s m s u s e d
t o r e p o r t i n s t a n c e s o f p o t e n t i a l f r a u d o r a b u s e a n d q u e s t i o n a b l e a c c o u n t i n g o r
a u d i t i n g p r a c t i c e s . E m p h a s i z e t h a t t h e y s h o u l d t a k e w h a t e v e r s t e p s a r e n e c e s s a r y
t o s a t i s f Y t h e m s e l v e s t h a t a g i v e n c o m p l a i n t i s w i t h o u t m e r i t b e f o r e d i s p o s i n g o f i t .
F u r t h e r , t h e y a l s o s h o u l d d o c u m e n t t h e d i s p o s i t i o n o f e a c h c o m p l a i n t r e c e i v e d s o
i t c a n b e r e v i e w e d b y t h e a u d i t c o m m i t t e e .
" H a v e t h e a u d i t c o m m i t t e e , a s p a r t ~ f i t s e v a l u a t i o n o f t h e g o v e r n m e n t ' s i n t e r n a l
c o n t r o l f r a m e w o r k , e x a m i n e t h e d o c u m e n t a t i o n o f h o w c o m p l a i n t s w e r e h a n d l e d
t o s a t i s f y i t s e l f t h a t t h e m e c h a n i s m s f o r r e p o r t i n g i n s t a n c e s o f p o t e n t i a l f r a u d o r
a b u s e , a n d q u e s t i o n a b l e a c c o u n t i n g o r a u d i t i n g p r a c t i c e s a r e i n p l a c e a n d
w o r k i n g s a t i s f a c t o r i l y . ( G F O A : E n c o u r a g i n g a n d F a c i l i t a t i n g t h e R e p o r t i n g o f
F r a u d a n d Q u e s t i o n a b l e A c c o u n t i n g a n d A u d i t i n g P r a c t i c e s ( 2 0 0 7 ) ( C A A F R ) .
M o s t c i t i e s ( 5 4 y e s , 3 4 n o ) r e s p o n d e d t h a t t h e y h a v e p o l i c i e s a n d p r o c e d u r e s t o e n c o u r a g e a n d
f a c i l i t a t e t h e r e p o r t i n g o f f r a u d , a b u s e a n d q u e s t i o n a b l e a c c o u n t i n g o r a u d i t i n g p r a c t i c e s . M o s t
c i t i e s ( 5 2 y e s , 3 5 n o , I n o t d o c u m e n t e d ) a l s o r e s p o n d e d t h a t t h e y h a v e a f o r m a l l y a d o p t e d ,
w i d e l y d i s t r i b u t e d a n d p u b l i c i z e d e t h i c s p o l i c y .
I n r e v i e w i n g t h e s u p p o r t i n g d o c u m e n t a t i o n a n d c o m m e n t s p r o v i d e d b y t h e c i t i e s t h e G r a n d J u r y
f o u n d s e v e r a l c i t i e s h a d v e r y c o m p r e h e n s i v e p o l i c i e s a n d p r o c e d u r e s o n r e p o r t i n g f r a u d , a b u s e
a n d q u e s t i o n a b l e a c t s . T h e s e i n c l u d e d d e f i n i t i o n s o f f r a u d a n d a b u s e . A l s o , i n c l u d e d a r e c l e a r
r e s p o n s i b i l i t i e s f o r e m p l o y e e s , a n d g u i d e l i n e s a n d s t e p s f o r i n v e s t i g a t i n g a l l e g a t i o n s a n d
r e p o r t i n g t h e r e s u l t s . O t h e r c i t i e s h a d v e r y l i m i t e d p o l i c i e s , s u c h a s s t a t e m e n t s t h a t a l l c i t y
e m p l o y e e s f o l l o w t h e h i g h e s t e t h i c a l s t a n d a r d s , o r h a v e a d o p t e d s p e c i f i c p o l i c i e s r e g a r d i n g
r e p o r t i n g o f t r a v e l e x p e n s e r e i m b u r s e m e n t .
S e v e r a l c i t i e s ( 3 3 y e s , 5 5 n o ) r e s p o n d e d t h e y h a v e a p r a c t i c a l m e c h a n i s m , s u c h a s a f r a u d h o t
l i n e , t o p e r m i t t h e c o n f i d e n t i a l , a n o n y m o u s r e p o r t i n g f r a u d , a b u s e o r q u e s t i o n a b l e p r a c t i c e s .
H o w e v e r , i n r e v i e w o f t h e d o c u m e n t a t i o n a n d c o m m e n t s t h e G r a n d J u r y f o u n d v e r y f e w h a d a
h o t l i n e f o r c o n f i d e n t i a l a n d a n o n y m o u s r e p o r t i n g . O t h e r c i t i e s s t a t e d t h a t e m p l o y e e s o r m e m b e r s
o f t h e p u b l i c c o u l d w r i t e a l e t t e r t o t h e c i t y w i t h c o n c e r n s , o r t h a t t h e c i t y h a d a n " o p e n d o o r "
p o l i c y a n d c o n c e r n s c o u l d b e t a k e n t o s u p e r v i s o r s , m a n a g e r s , t h e c i t y m a n a g e r , o r t h e c i t y
a t t o r n e y . T h e G r a n d J u r y b e l i e v e s t h a t c i t y c o u n c i l m e m b e r s s h o u l d a l s o b e r e c e p t i v e t o s u c h
c o m p l a i n t s .
I n t e r n a l C o n t r o l s
I n t e r n a l c o n t r o l s a r e d e s i g n e d t o s a f e g u a r d c i t y a s s e t s f r o m e r r o r , l o s s , t h e f t , m i s u s e ,
m i s a p p r o p r i a t i o n , a n d f r a u d . E f f e c t i v e p r o g r a m s o f i n t e r n a l c o n t r o l s p r o v i d e r e a s o n a b l e
a s s u r a n c e t h a t t h e s e o b j e c t i v e s a r e m e t c o n s i s t e n t l y . I n t e r n a l c o n t r o l s p l a y a n i m p o r t a n t r o l e i n
p r e v e n t i n g a n d d e t e c t i n g f r a u d a n d p r o t e c t i n g t h e o r g a n i z a t i o n ' s r e s o u r c e s .
2 0 1 2 - 2 0 1 3 L O S A N G E L E S C O U N T Y C I V I L G R A N D J U R Y R E P O R T 1 4 9
The following are excerpts from the Government Finance Officers Association recommended
best practice regarding internal controls:
... internal control procedures over financial management should be documented.
Documented internal control procedures should include some practical means for lower
level employees to report instances of management override of controls that could be
indicative of fraud.
... financial managers, with the assistance of internal auditors or equivalent personnel as
needed, periodically evaluate relevant internal control procedures to satisfy themselves
that those procedures I) are adequately designed to achieve their intended purpose, 2)
have actually been implemented, and 3) continue to function as designed.
Evaluations should also encompass the effectiveness and timeliness of the government's
response to indications of potential control weaknesses generated by internal control
procedures (e.g., resolution of items in exception reports) .
.. . upon completion of any evaluation of internal control procedures financial managers
determine what specific actions are necessary to remedy the root cause of any disclosed
weaknesses. A corrective action plan with an appropriate timetable should be adopted.
There should be follow-up on the corrective action plan to ensure that it has been folly
implemented on a timely basis. (GFOA: Enhancing Management Involvement with Internal Control
(2004 and 2008) (CAAFR).
Most cities (67 yes, 21 no) responded that internal control procedures over financial management
were formally documented. Most cities (64 yes, 24 no) also responded that internal control
procedures include practical means for lower level employees to report instances of management
override of controls.
The Grand Jury requested a copy of the internal control procedures over financial management.
Several cities had developed comprehensive procedures for internal control, some with very
detailed procedural guidelines. Other cities provided no specific documentation of internal
control procedures, or made minor mention of internal control procedures.
Most cities (80 yes, 8 no) also responded that internal control procedures were evaluated to
determine if they are adequately designed to achieve their intended purpose, have actually been
implemented, and continue to function as designed. Most cities (77 yes, II no) responded that
potential internal control weaknesses are documented in exception reports. Most cities (65 yes,
23 no) also responded that there is a process in place to identify changes in what is being
controlled or controls themselves, and corrective action plans are developed with an appropriate
timeline. Most cities rely primarily on the internal controls review conducted by their
independent auditor as part of the annual financial audit.
Under Government Auditing Standards independent auditors consider the City's internal controls
over financial reporting and conduct tests of compliance. This review is focused on financial
reporting, and not the larger internal controls environment. Independent auditors generally do
not provide an opinion on the internal control over financial reporting or on compliance. Internal
2012-2013 LOS ANGELES COUNTY CIVIL GRAND JURY REPORT 150
controls that ensure there are adequate control procedures in place to protect public funds is the
responsibility of city financial management.
Internal Andit
The internal audit function serves as an additional level of control and helps improve a city's
overall control and risk environment. This includes monitoring the design and proper
functioning of the internal control policies and procedures. It is important that the internal audit
function be separate from those that are directly responsible for performing financial functions.
The following are excerpts from the Government Finance Officers Association recommended
best practice regarding internal audit:
Every government should consider the feasibility of establishing a formal internal audit
function because such a function can play an important role in helping management to
maintain a comprehensive framework of internal controls. As a rule, a formal internal
audit function is particularly valuable for those activities involving a high degree of risk
(e.g., complex accounting systems, contracts with outside parties, a rapidly changing
environment). If it is not feasible to establish a separate internal audit function, a
government is encouraged to consider either I) assigning internal audit responsibilities
to its regular employees or 2) obtaining the services of an accounting firm (other than the
independent auditor) for this purpose;
The internal audit function should be established formally by charter, enabling
resolution, or other appropriate legal means;
It is recommended that internal auditors of state and local governments conduct their
work in accordance with the pr~fessional standards relevant to internal auditing
contained in the US. General Accounting Office's publication Government Auditing
Standards, including those applicable to the independence of internal auditors;
At a minimum, the head of the internal audit function should possess a college degree
and appropriate relevant experience. It also is highly desirable that the head of the
internal audit junction hold some appropriate form of professional certification (e.g.,
certified internal auditor, certified public accountant, certified information systems
auditor); and
All reports of internal auditors, as well as the annual internal audit work plan, should be
made available to the government's audit committee or its equivalent. (GFOA: Establishment
of' an Internal Audit Function (1997 and 2006) (CAAFR).
Most cities (18 yes, 69 no, I not documented) responded that they do not have an internal audit
function formally established by charter, enabling resolution, or other legal means. One city
indicated it had an internal audit function, but did not provide the requested documentation.
Other cities stated that internal audit was an additional responsibility of the finance staff. Several
cities also stated that, given the small size of their city, an internal audit function and staff could
not be justified.
2012-2013 LOS ANGELES COUNTY CIVIL GRAND JURY REPORT 151
General Fund Unassigned Fund Balance
The term "fund balance" is used to describe the net assets of governmental funds, and is intended
to provide a measure of the financial resources available in the fund. Some ofthis fund balance
is typically restricted because it is not spendable (for legal or contractual reasons) or restricted by
external constraints.
Unrestricted funds include those that are unassigned, as well as those that are committed or
assigned by the city council. The city council would be able to change these commitments or
assignments if needed.
It is important that cities formally set aside adequate funds for use in emergencies, revenue
shortages, or budget imbalances. Adequate fund balances are also important to provide stable
tax rates, maintain government services, and to facilitate long-term financial planning.
The following are excerpts from the Government Finance Officers Association recommended
best practice regarding general fund unrestricted fund balance:
... recommends that governments establish a formal policy on the level of unrestricted
fund balance that should be maintained in the general fund. Such a guideline should be
set by the appropriate policy body and should provide both a temporalframework and
specific plans for increasing or decreasing the level of unrestricted fund balance, if it is
inconsistent with that policy.
The adequacy of unrestricted fund balance in the generalfitnd should be assessed based
upon a government's own specific circumstances. Nevertheless, GFOA recommends, at a
minimum, that general-purpose governments, regardless of size, maintain unrestricted
fund balance in their general fund of no less than two months of regular general fund
operating revenues or regular general fund operating expenditures. (GFOA: Appropriate
Level of Unrestricted Fund Balance in the General Fund (2002 and 2009) (BUDGET and CAAFR).
Most cities (63 yes, 25 no) responded that they have a formal policy on the level of unrestricted
fund balance to be maintained in the general fund. Half the cities (44 yes, 44 no) responded that
they do not have a policy requiring an unrestricted or unassigned fund balance of not less than
two months of regular general fund operating revenues or regular general fund operating
expenditures.
Financial and Public Reporting Practices
Financial statements and information prepared and provided by each city provide the public with
information on how their city is expending its resources, as well as the financial stability and
health of the city. Ensuring the transparency and reliability of financial reporting is a key
responsibility of financial management. This requires maintaining an adequate financial
accounting system and issuing financial statements in a timely manner.
The following are excerpts from the Government Finance Officers Association recommended
best practice regarding financial and public reporting practices:
2012-2013 LOS ANGELES COUNTY CiVlL GRAND JuRY REPORT 152
Maintain an accounting system adequate to provide all of the data needed to allow for
the timely preparation of financial statements for the entire financial reporting entity in
conformity with GAAP;
Issue timely financial statements for the entire financial reporting entity in conformity
with GAAP as part of a CAFR; and
Have those financial statements independently audited in accordance with either GAAS
or GAS, as appropriate. (GFOA: Governmental Accounting, Auditing, and Financial Reporting
Practices (1993, 1997, and 2000) (CAAFR).
The Government Finance Officers Association encourages every government to use its
web site as a primary means of communicating financial information to citizens and
other interested parties. (GOFA: Web Site Presentation of Official Financial Documents (2009)
(ALL).
All cities (88 yes, 0 no) responded they maintain an accounting system adequate to provide all
the data needed for the timely preparation of financial statement for the entire entity in
conformity with Generally Accepted Accounting Principles (GAAP). Most cities (83 yes, 5 no)
responded they issue timely financial statements for the entire financial reporting entity in
conformity with standards as part of a CAFR.
The cities of Avalon, Bell, Compton and Maywood have not yet issued financial statements for
FY 2010-11. The cities of Avalon, Aznsa, Bradbury, Bell, Compton, Hawaiian Gardens,
Huntington Park, Inglewood, La Habra Heights, Lawndale and Maywood have not yet
issued financial statements for FY 2011-12, and report they are in the process of developing
these with an independent auditor.
All cities (88 yes, 0 no) responded the city's financial statements are independently audited.
Most cities (85 yes, 3 no) also responded that the financial statements or CAFR were readily
available on the city's website. Most cities (85 yes, 3 no) responded that city financial
management staff are members of and participate in the Government Finance Officers
Association.
FINDINGS-FINANCIAL MANAGEMENT PRACTICES
I. Few cities fonnally established an audit committee responsible for monitoring and overseeing
financial reporting.
2. All cities required their auditors to comply with independence standards and most selected their
auditors through a competitive process. Most also precluded the auditor from providing non-audit
services.
3. Many cities could improve their documentation and maintenance of accounting policies and
procedures.
4. Many cities could improve their policies and procedures for reporting fraud, abuse, and
questionable practices.
5. Many cities could improve their internal control procedures over financial management.
6. Most cities did not have a formal internal audit function.
2012-2013 LOS ANGELES COUNTY CIVIL GRAND JURY REPORT 153
7. Many cities' policies and procedures governing general fund uruestricted fund balance could be
improved.
8. All cities maintained an adequate accounting system. Most issued timely financial statements and
a CAFR in compliance with standards, and most made the CAFR readily accessible to the general
public on their website.
RECOMMENDATIONS-FINANCIAL MANAGEMENT 3
I. Cities should formally establish an audit committee making it directly responsible for the work of
the independent auditor.
2. Cities that do not currently select the auditor through a competitive process should do so.
3. Cities that allow the auditor to provide non-audit Services should ensure appropriate review and
approval of those services.
4. Cities should review and update accounting policies and procedures to ensure they are
appropriately detailed and define the specific authority and responsibility of employees.
5. Cities should establish a policy requiring policies and procedures to be reviewed annually and
updated at least once every three years.
6. Cities should review and update policies and procedures for reporting fraud, abuse and
questionable practices including a practical mechanism, such as a fraud hot line, to permit the
confidential, anonymous reporting of concerns.
7. Cities should periodically review and update internal control procedures over financial
management.
8. Cities should undertake a full-scale competitive process every 5 years for the selection of an
independent external auditor.
3 See Exhibit 12
2012-2013 LOS ANGELES COUNTY CIVIL GRAND JuRY REPORT 154
EMPLOYEE COMPENSATION
Until recently, there has been a lack of transparency and accountability for actual annual
compensation for employees of cities. In July 20 I 0 news media reports (Los Angeles Times,
July 14, 2010) revealed that some City of Bell administrators and Council members were
receiving disproportionately high salaries. In addition, the report of the independent reform
monitor for the City of Vernon found:
There is evidence that in the past, the salaries of City officials were bloated, that some
who held more than one position were receiving compensation for each position, and that
some contracts were drawn so that ajier 1,500 hours of City work and a set salary, City
officials would charge hourly rates that would elevate those salaries way beyond any
norm. (City of Vernon Report, John Van De Kamp, Independent Ethics Advisor, July 29, 20I I; p.5.)
In the past, each city council was required to establish the range of salary for each position and
adopt that range in a "salary resolution." These salary resolutions were reported to the State
Controller's Office and published on its website. Requiring and publishing the salary resolutions
did not prove to be an effective means of providing transparency and accountability for
government compensation.
In late 2010 State Controller John Chiang began requiring counties, cities and special districts to
report government compensation, which was posted to the Controller's website in an effort to
promote transparency following the salary scandal in the City of Bell. Government compensation
is now posted on the State Controller's website for all government employees. The information
provided includes the approved salary range, as well as the actual compensation received by each
employee as reported to the U.S. Internal Revenue Service. Refer to Exhibit 2 presented
previously and Appendix C.
The Grand Jury noted that several cities had a high number of employees in several departments
earning over $200,000. Exhibit 2 reflects these city's as follows:
• Beverly Hills: 21 Fire Department employees and 18 Police department employees made
over $200,000.
• El Segundo: 7 Fire Department employees made over $200,000.
• Los Angeles: 224 Water and Power employees and 115 Fire Department made over
$200,000.
• Manhattan Beach: 16 Fire Department employees made over $200,000.
• Santa Fe Springs: 13 Fire Department employees made over $200,000.
• Santa Monica: 17 employees in the legal department and 29 Fire Department employees
made over $200,000.
• Vernon: 5 employees in various departments made over $200,000.
2012-2013 LOS ANGELES COUNTY CIVIL ORAND JuRY REPORT 155
NEW LEGISLATION
The Grand Jury desires all citizens within Los Angeles County and its incorporated cities avail
themselves of recent legislation specific to the California State Auditor and its Local High Risk
Program. The following is from the California State Auditor website (www.bsa.ca.gov):
Recent legislation-ABJ87, which went into effect in January 2012-permits the California State
Auditor to develop a high-risk local government agency audit program for the purpose of
identifYing, auditing, and issuing reports on any local agency, including a city, county, special
district, or other publicly created entity, that the State Auditor identifies as being at high risk for
waste, fraud, abuse, and mismanagement or as having major challenges associated with its
economy, efficiency, or effectiveness. However, any audit that the State Auditor wishes to
perform under this authority must be authorized by the Legislature's Joint Legislative Audit
Committee before it may move forward.
Because this legislation just recently took effect, the program still is being developed. Please
check back periodically for updates regarding the implementation of this program. As we
establish protocols for the program, we will post the information on our Web site
(www.bsa.ca.gov). In the meantime, if you have any information about a local government
agency that you would like to share with us, refer to "Report an Improper Activity" on our home
page.
The Grand Jury believes that the State Auditor's "Local High Risk Program" once established,
will provide the public with greater oversight over local government agencies, which includes
cities. Citizens need to work through their local State Representatives in order to expedite the
implementation of this Program.
RECOMMENDATIONS AND REQUIRED RESPONSES
Responses are required from the following cities:
I. Cities should adopt financial planning,
revenue and expenditure policies to
guide city officials to develop
sustainable, balanced budgets.
Agoura Hills, Alhambra, Arcadia, Artesia, Avalon, Azusa,
Baldwin Park, Bell, Bell Gardens, Bellnower, Beverly
Hills, Bradbury, Burbank, Calabasas, Carson, Cerritos,
Claremont, Commerce, Compton, Covina, Cudahy, Culver
City, Diamond Bar, Downey, Duarte, El Monte, El
Segundo, Gardena, Glendale, Glendora, Hawaiian Gardens,
Hawthorne, Hermosa Beach, Hidden Hills, Huntington
Park, Industry, Inglewood, Irwindale, La Canada Flintridge,
La Habra Heights, La Mirada, La Puente, La Verne,
Lakewood, Lancaster, Lawndale, Lomita, Long Beach, Los
Angeles, Lynwood, Malibu, Manhattan Beach, Maywood,
Monrovia, Montebello, Monterey Park, Norwalk, Palmdale,
Palos Verdes Estates, Paramount, Pasadena, Pico Rivera,
2012-20I3 LOS ANGELES COUNTY CIVIL GRAND JURY REPORT 156
Exhibit 12: Recap of Recommendations and Required Responses I ..• · .. llec&mmendatiqJ1 .• · ·•·.·.·· < ; ·•··.·· .•.. · .... ··.·•··· .· ··~1\s!iiln:S~ "R~<Int~~Fh!m
Hills, Rolling Hills Estates, Rosemead, San Dimas, San
Fernando, San Gabriel, San Marino, Santa Clarita, Santa Fe
Springs, Santa Monica, Sierra Madre, Signal Hill, South El
Monte, South Gate, South Pasadena, Temple City,
Torrance, Vernon, Walnut, West Covina, West Hollywood,
Westlake Village, Whittier
2. Cities should develop a balanced budget Agoura Hills, Alhambra, Arcadia, Artesia, A val on, Azusa,
and commit to operate within the budget Baldwin Park, Bell, Bell Gardens, Bellflower, Beverly
constraints. Hills, Bradbury, Burbank, Calabasas, Carson, Cerritos,
Claremont, Commerce, Compton, Covina, Cudahy, Culver
City, Diamond Bar, Downey, Duarte, El Monte, El
Segundo, Gardena, Glendale, Glendora, Hawaiian Gardens,
Hawthorne, Hermosa Beach, I-lidden Hills, Huntington
Park, Industry, Inglewood, Irwindale, La Canada Flintridge,
La Habra Heights, La Mirada, La Puente, La Verne,
Lakewood, Lancaster, Lawndale, Lomita, Long Beach, Los
Angeles, Lynwood, Malibu, Manhattan Beach, Maywood,
Monrovia, Montebello, Monterey Park, Norwalk, Palmdale,
Palos Verdes Estates, Paramount, Pasadena, Pico Rivera,
Pomona, Rancho Palos Verdes, Redondo Beach, Rolling
Hills, Rolling Hills Estates, Rosemead, San Dimas, San
Fernando, San Gabriel, San Marino, Santa Clarita, Santa Fe
Springs, Santa Monica, Sierra Madre, Signal Hi\1, South El
Monte, South Gate, South Pasadena, Temple City,
Torrance, Vernon, Walnut, West Covina, West Hollywood,
Westlake Village, Whittier
3. Cities should commit to not using one-Agoura Hills, Alhambra, Arcadia, Artesia, Avalon, Azusa,
time revenues to fund recurring or on-Baldwin Park, Bell, Bell Gardens, Bellflower, Beverly
going expenditures. Hills, Bradbury, Burbank, Calabasas, Carson, Cerritos,
Claremont, Commerce, Compton, Covina, Cudahy, Culver
City, Diamond Bar, Downey, Duarte, El Monte, El
Segundo, Gardena, Glendale, Glendora, Hawaiian Gardens,
Hawthorne, Hermosa Beach, Hidden Hills, Huntington
Park, Industry, Inglewood, Irwindale, La Canada Flintridge,
La Habra Heights, La Mirada, La Puente, La Verne,
Lakewood, Lancaster, Lawndale, Lomita, Long Beach, Los
Angeles, Lynwood, Malibu, Manhattan Beach, Maywood,
Monrovia, Montebello, Monterey Park, Norwalk, Palmdale,
Palos Verdes Estates, Paramount, Pasadena, Pico Rivera,
Pomona, Rancho Palos Verdes, Redondo Beach, Rolling
Hills, Rolling Hills Estates, Rosemead, San Dimas, San
Fernando, San Gabriel, San Marino, Santa Clarita, Santa Fe
Springs, Santa Monica, Sierra Madre, Signal Hill, South El
Monte, South Gate, South Pasadena, Temple City,
Torrance, Vernon, Walnut, West Covina, West Hollywood,
Westlake Vi\lage, Whittier
4. Cities should adopt a method and Agoura Hills, Alhambra, Arcadia, Artesia, Avalon, Azusa,
practice of saving into a reserve or Baldwin Park, Be\1, Bell Gardens, Be\lflower, Beverly
"rainy day" fund to supplement Hills, Bradbury, Burbank, Calabasas, Carson, Cerritos,
Claremont, Commerce, Compton, Covina, Cudahy, Culver
operating revenue in years of short fall. City, Diamond Bar, Downey, Duarte, El Monte, El
Segundo, Gardena, Glendale, Glendora, Hawaiian Gardens,
Hawthorne, Hermosa Beach, Hidden Hills, Huntington
2012-2013 LOS ANGELES COUNTY CIVIL GRAND JURY REPORT 157
Exhibit 12: Recap of Recommendations and Required Responses
I. .., ' 'Rec!llllfue!illi!.troli ···. ·., ......... ···•·· ... · .... · . ·•·· ...... , •...•... '•·•Re~li!ill$eJietlllil"ed.Frofu···• :·.···········.\ .
Park, Industry, Inglewood, Irwindale, La Canada Flintridge,
La Habra Heights, La Mirada, La Puente, La Verne,
Lakewood, Lancaster, Lawndale, Lomita, Long Beach, Los
Angeles, Lynwood, Malibu, Manhattan Beach, Maywood,
Monrovia, Montebello, Monterey Park, Norwalk, Palmdale,
Palos Verdes Estates, Paramount, Pasadena, Pica Rivera,
Pomona, Rancho Palos Verdes, Redondo Beach, Rolling
Hills, Rolling Hills Estates, Rosemead, San Dimas, San
Fernando, San Gabriel, San Marino, Santa Clarita, Santa Fe
Springs, Santa Monica, Sierra Madre, Signal Hill, South El
Monte, South Gate, South Pasadena, Temple City,
Torrance, Vernon, Walnut, West Covina, West Hollywood,
Westlake Village, Whittier
Governance Practices
1. Cities should develop and adopt a Agoura Hills, Arcadia, Avalon, Azusa, Baldwin
strategic plan that articulates the Park, Bell Gardens, Calabassas, Carson,
mission, vision, core values and Compton, Cudahy, Hawthorne, Hermosa Beach,
priorities for the city. Hidden Hills, Huntington Park, Industry,
Inglewood, La Habra Heights, Lomita, Malibu,
Palos Verdes Estates, Pica Rivera, Rolling Hills,
Rolling Hills Estates, San Dimas, San Fernando,
South El Monte
2, Cities should develop and report on Agoura Hills, Arcadia, Avalon, Azusa, Bell, Bell
performance measures or indicators to Gardens, Bradbury, Calabassas, Carson,
evaluate outcomes. These performance Commerce, Compton, Cudahy, Diamond Bar, El
measures should be quantified, focused Monte, Gardena, Hermosa Beach, Hidden Hills,
on outcomes and information should be Huntington Park, Industry, Inglewood, La Habra
provided for several years to allow Heights, Lancaster, Lawndale, Lomita, Malibu,
evaluation of progress over time. Montebello, Paramount, Rolling Hills, San
Dimas, San Fernando, San Marino, Santa Clarita,
Santa Fe Springs, South El Monte, South
Pasadena, West Covina
3, City councils should develop specific Avalon, Compton, Cudahy, Diamond Bar, Hidden
annual goals for the city's executive. Hills, Industry, Inglewood, Norwalk, Palos
Verdes Estates, San Fernando, San Marin, South
El Monte, South Pasadena
4, City councils should conduct Alhambra, Compton, Cudahy, Hidden Hills,
meaningful evaluations of the city's Industry, Lancaster, Maywood, Palos Verdes
executive at least annually. Estates, Paramount, Rolling Hills, San Fernando
5, Cities should publish their financial Cudahy, Industry, Maywood
reports or CAFR on their city's website,
Financial Management
I. Cities should formally establish an audit Alhambra, Arcadia, Azusa, Bell, Bell Gardens,
committee making it directly responsible Bellflower, Bradbury, Calabassas, Carson,
for the work of the independent auditor, Cerritos, Claremont, Compton, Cudahy, Diamond
Bar, Duarte, El Monte, El Segundo, Gardena,
2012-2013 LOS ANGELES COUNTY CIVIL GRAND JURY REPORT 158
Exhibit 12: Recap of Recommendations and Reuuired Responses
··•······· .. · ..... ·.· .'
Recommendation. ' . . ·.·.·· .. · ·· 1 s. ·.•·•· , ··.· · .'Rei;J)ons~ R!iiliiir«l Ff()lt\ •• • • •••• ••• • •• •
Glendora, Hawaiian Gardens, Hermosa Beach,
Hidden Hills, Huntington Park, Industry,
Inglewood, Irwindale, La Mirada, La Puente, La
Verne, Lakewood, Manhattan Beach, Maywood,
Monrovia, Monterrey Park, Norwalk, Palos
Verdes Estates, Paramount, Pico Rivera, Pomona,
Rancho Palos Verdes, Rolling Hills, Rosemead,
San Fernando, San Gabriel, San Marin, Santa
Clarita, Santa Fe Springs, Santa Monica, Sierra
Madre, Signal Hill, South El Monte, South
Pasadena, Southgate, Temple City, West Covina,
West Hollywood, Westlake Village, Whittier
2. Cities that do not currently select the Bellflower, Glendora, Hawthorne, Hidden Hills,
auditor through a competitive process Industry, Irwindale, La Canada-Flintridge, La
should do so. Mirada, Lakewood, Malibu, Palos Verdes Estates,
San Dimas, San Marino, Santa Fe Springs,
Walnut, West Covina, Whittier
3. Cities that allow the auditor to provide Arcadia, Avalon, Baldwin Park, Bellflower,
non-audit services should ensure Beverly Hills, Carson, Claremont, Commerce,
appropriate review and approval of those Diamond Bar, Glendale, Huntington Park,
serv1ces. Inglewood, La Vern, Lawndale, Monrovia,
Montebello, Palmdale, Paramount, Rancho Palos
Verdes, Rolling Hills, Rolling Hills Estates, San
Gabriel, Santa Fe Springs, Santa Monica,
Southgate.
4. Cities should review and update Beverly Hills, Bradbury, Burbank, Carson,
accounting policies and procedures to Commerce, Cudahy, El Monte, Hawaiian
ensure they are appropriately detailed Gardens, Hidden Hills, Industry, La Verne,
and define the specific authority and Lomita, Manhattan Beach, Norwalk, Santa
responsibility of employees. Monica, Sierra Madre, Southgate, West Covina,
Whittier
5. Cities should establish a policy requiring Agoura Hills, Alhambra, Arcadia, Avalon, Azusa,
financial policies and procedures to be Bell Gardens, Bellflower, Bradbury, Burbank,
reviewed annually and updated at least Carson, Commerce, Cudahy, Diamond Bar, El
once every three years. Monte, Glendora, Hawaiian Gardens, Hawthorne,
Hidden Hills, Industry, Inglewood, La Canada-
Flintridge, La Habra Heights, La Mirada, La
Puente, Lancaster, Lawndale, Lomita, Los
Angeles, Manhattan Beach, Montebello, Norwalk,
Pasadena, Rolling Hills Estates, Rosemead, San
Fernando, Santa Clarita, Santa Fe Springs, Santa
Monica, South Pasadena, Southgate, Walnut,
West Covina
2012-2013 LOS ANGELES COUNTY CIVIL GRAND JuRY REPORT 159
Cities should review and update policies
and procedures for reporting fraud,
abuse and questionable practices
including a practical mechanism, such as
a fraud hot line, to perm it the
confidential, anonymous reporting of
concerns.
7. Cities should periodically review and
update internal control procedures over
financial
8. Cities should undertake a full-scale
competitive process every 5 years for
the selection of an independent external
auditor.
Alhambra, Arcadia, Avalon, Azusa, Bell Gardens,
Bellflower, Bradbury, Burbank, Covina, Cudahy,
El Monte, Glendora, Huntington Park, Industry,
Inglewood, Irwindale, La Mirada, Lakewood,
Lomita, Lynwood, Manhattan Beach, Montebello,
Norwalk, Rancho Palos Verdes, Rolling Hills,
Rosemead, San Fernando, San Gabriel, San
Marino, Santa Fe Springs, Santa Monica, Sierra
West Covina
Bell, Cudahy, Industry, Inglewood, Lomita,
Montebello, South El Monte
Agoura
Baldwin Park, Bell, Bell Gardens, Bellflower, Beverly
Hills, Bradbury, Burbank, Calabasas, Carson, Cerritos,
Claremont, Commerce, Compton, Covina, Cudahy, Culver
City, Diamond Bar, Downey, Duarte, El Monte, El
Segundo, Gardena, Glendale, Glendora, Hawaiian Gardens,
Hawthorne, Hermosa Beach, Hidden Hills, Huntington
Park, lndustry,lnglewood, Irwindale, La Canada Flintridge,
La Habra Heights, La Mirada, La Puente, La Verne,
Lakewood, Lancaster, Lawndale, Lomita, Long Beach, Los
Angeles, Lynwood, Malibu, Manhattan Beach, Maywood,
Monrovia, Montebello, Monterey Park, Norwalk, Palmdale,
Palos Verdes Estates, Paramount, Pasadena, Pica Rivera,
Pomona, Rancho Palos Verdes, Redondo Beach, Rolling
Hills, Rolling Hills Estates, Rosemead, San Dimas, San
Fernando, San Gabriel, San Marino, Santa Clarita, Santa Fe
Springs, Santa Monica, Sierra Madre, Signal Hill, South El
Monte, South Gate, South Pasadena, Temple City,
Torrance, Vernon, Walnut, West Covina, West Hollywood,
Vii .
2012-2013 LOS ANGELES COUNTY CIVIL GRAND JURY REPORT 160
APPENDICES
APPENDIX A: GLOSSARY
Adopted Budget-The City Council approved annual budget establishing the legal authority for
the expenditure of funds as set forth in the adopting Council budget resolution.
Asset-Property owned by a government, which has monetary value.
Audit -An examination and evaluation of the City's records and procedures to ensure
compliance with specified rules, regulations, and best practices. The City Charter requires a
yearly independent financial audit, by an independent certified public accountant that forms an
audit opinion regarding the legitimacy of transactions and internal controls.
Balanced Budget -When the total of revenues and other financing sources is equal to or greater
than the total of expenditures and other financing uses.
Budget -A fiscal plan of financial operation comprised of estimated expenditures and the
proposed means of financing them for a given period (usually a single fiscal year). The budget is
proposed until it has been approved by the City Council through a series of budget study sessions
and a formal budget hearing in June.
Budget Message -The City Manager's general discussion of the budget which contains an
explanation of principal budget items and summary of the City's financial status at the time of
the message.
California Public Employees' Retirement System (CaiPERS) -The retirement system
administered by the State of California.
Capital Asset -A tangible, fixed asset that is long-term in nature, of significant value, and
obtained or controlled as a result of past transactions, events or circumstances. Fixed assets
include land, buildings, equipment, improvements to buildings, and infrastructure (i.e., streets,
highways, bridges, and other immovable assets). A capital asset is defined as an asset with a
useful life extending beyond a single accounting period.
City Charter -The legal authority granted by the State of California establishing the City and its
form of government. The Charter also gives the City the ability to provide services and collect
revenue to support those services.
Comprehensive Annual Financial Report (CAFR) -A government financial statement that
provides a thorough and detailed presentation of the government's financial condition. It
provides the Council, residents and other interested parties with information on the financial
position of the City and its various agencies and funds. Report contents include various financial
statements and schedules and all available reports by the City's independent auditors.
2012-2013 LOS ANGELES COUNTY CiVIL GRAND JURY REPORT A-1
Deficit-An excess of expenditures or expenses over revenues (resources) during an accounting
period.
Department -An organization unit comprised of divisions, sections, and/or programs. A
department has overall management responsibility for an operation or a group of related
operations.
Expenditure -The actual spending of Governmental funds set aside by an appropriation.
Fiscal Year-A twelve-month period of time to which the annual budget applies. Fiscal years
are designated by the calendar year that they begin and end. Abbreviation: FY.
Fund -In Governmental Accounting, a fund is a fiscal and accounting entity with a self-
balancing set of accounts recording cash and other financial resources, together with related
liabilities and residual equities or balances, and changes therein. Funds are segregated for the
purpose of conducting specific activities or attaining certain objectives in accordance with
special regulations, restrictions, or limitations.
Fund Balance -The amount of financial resources immediately available for use. Generally, this
represents the accumulated annual operating surpluses and deficits since the fund's inception.
General Fund-The primary fund of the City used to account for all revenues and expenditures
of the City not legally restricted as to use. Departments financed by the General Fund include
Police, Fire, Parks, Library, and administrative support departments (Finance, Human Resources,
City Attorney, etc.)
Generally Accepted Accounting Principles (GAAP) -Uniform m1mmum standards of/and
guidelines for financial accounting and reporting. They govern the form and content of the basic
financial statements of an entity. GAAP encompasses the conventions, rules, and procedures
necessary to define accepted accounting practices at a particular time. They include not only
broad guidelines of general application, but also detailed practices and procedures. GAPP
provides a standard by which to measure financial presentations.
Goal -A long-term organizational target or direction. It states what the organization wants to
accomplish or become over the next several years. Goals provide the direction for an
organization and define the nature, scope, and relative priorities of all projects and activities.
Everything the organization does should help it move toward attainment of one or more goals.
Governmental Accounting Standards Board (GASB) -The organization that establishes
generally accepted accounting principles (GAAP) for states and local governments.
Government Finance Officers Association (GFOA) -A professional association that enhances
and promotes the professional management of state and local governments for the public benefits
by identifying and developing financial policies and best practices through education, training,
facilitation of member networking, and leadership. The organization sponsors award programs
designed to encourage good financial reporting for financial documents including the
Comprehensive Annual Financial Report (CAFR) and the annual budget.
2012-2013 LOS ANGELES COUNTY CIVIL GRAND JURY REPORT A-2
Ordinance -A fonnal legislative enactment by the City Council. It has the full force and effect
of law within City boundaries unless pre-empted by a higher form of law. An Ordinance has a
higher legal standing than a Resolution.
Reserve -An account used to record a portion of the fund balance as legally segregated for a
specific use.
Resolution -A special order of the City Council which has a lower legal standing than an
ordinance. The City's budget is adopted via a Resolution of Appropriation.
Revenues -Amount received for taxes, fees, permits, licenses, interest, intergovernmental
sources, and other sources during the fiscal year.
Salaries and Benefits-A budget category which generally accounts for full-time and temporary
employees, overtime expenses, and all employee benefits such as medical, dental, and
retirement.
Undesignated Fund Balance-Accounts used to record a portion of the fund balance not legally
segregated for a specific used and, therefore, available for appropriation.
2012-2013 LOS ANGELES COUNTY CIVIL GRAND .JURY REPORT A-3
APPENDIX B: SAMPLE QUESTIONNAIRE
DECEMBER 21,2012
Greg Ramirez, City Manager
City of Agoura Hills
3000 I Ladyface Court
Agoura Hills, CA 91301
Dear City Manager Ramirez,
The Los Angeles County Civil Grand Jury is currently conducting an investigation of
governance, management, and financial health of cities in Los Angeles County. The enclosed
questionnaire is being sent to cities to collect information on each City's practices in these areas.
Under Penal Code sections 925 and 925A, the Grand Jury may investigate and examine the
books and records of County and City operations. Penal Code section 921 gives the Grand Jury
free access at all reasonable times to the examination of all public records within a County. The
Civil Grand Jury has an aggressive schedule in completing this investigation and is requesting
your timely cooperation in compliance with the above.
Please send the completed questionnaire and documentation by Friday, January 181"
to Frederick Piltz, Foreperson, at the address above.
The questionnaire is available at http://www.stellarsurvey.com/s.aspx?u=l471 BE47-06CD-
469B-B486-A61E54F42C67& if you prefer to complete and submit it online. This will also
allow you to upload requested support documentation. You were sent an email with this link on
December 20'h
The Grand Jury has retained the firm of Bazilio Cobb Associates (BCA) to assist in this
investigation. BCA is administering the survey and will be reviewing information submitted. If
you have any questions please contact Scott Bryant with BCA at sbryant@baziliocobb.com.
Sincerely,
Frederick Piltz
Foreperson
Enclosure: Charter City Questionnaire
2012-2013 LOS ANGELES COUNTY CIVIL GRAND JURY REPORT B-1
CITIES FISCAL HEALTH, GOVERNANCE AND MANAGEMENT
Governance
1. Has the City Council developed and adopted a strategic plan that articulates the mission,
vision, core values and priorities (goals and objectives) for the City?
o Yes
o No
2. Has the City Council adopted performance measures or indicators to evaluate outcomes
or progress on priorities?
o Yes
o No
3. Does your city have a formal policy, agreement, or other document that clearly defines
the roles of the City Council and executive (City Manager or Administrator) and their
relationship?
o Yes
o No
4. Does the City Council establish specific goals for the Executive at least annually?
o Yes
o No
5. Does the City Council conduct a meaningful evaluation of the Executive's performance
at least annually?
o Yes
o No
6. Has the City Council adopted and does it enforce a formal "Conflict oflnterest" policy?
o Yes
o No
7. Has the City Council adopted an "Investment" policy?
o Yes
o No
8. Please provide copies of the
• strategic plan and performance measures or indicators,
• formal agreement or other document that clearly defines the roles of the City
Council and executive and their relationship,
• the specific goals most recently established for the Executive,
• adopted "Conflict of Interest" policy, and
• adopted "Investment" policy.
9. Please provide any comments or explanations regarding your responses on governance:
PLEASE RETURN BY JANUARY 18, 2013 PAGE 1 QUESTIONS? EMAIL SBRYANT@BAZ/LIOCOBB. COM
CITIES fiSCAL HEALTH, GOVERNANCE AND MANAGEMENT
Audit Committee
I 0. Does your city have an audit committee that is formally established by enabling
resolution or other appropriate legal means?
o Yes
o No
11. Is the audit committee directly responsible for the appointment, compensation, retention,
and oversight of the work of independent accountants engaged to perform independent
audit, review, or attestation services?
o Yes
o No
12. Do such independent accountants report directly to the audit committee?
o Yes
o No
13. Please provide a copy of the action formally establishing the audit committee.
14. Please provide any comments or explanations regarding your responses on audit
committees:
Audit Procurement
15. Do your city's audit contracts require auditors of financial statements conform with the
independence standard defined in the General Accounting Office's Government Auditing
Standards?
o Yes
o No
16. In selecting independent auditors does your city undertake a full-scale competitive
process at the end of the term of each audit contract?
o Yes
o No
17. How many years has your current independent auditor conducted the annual city audit?
_____ Years
18. How long is the term of your current independent audit contract?
_____ Years
19. Does your city have a formal policy requiring that the independent auditor be replaced at
the end of the audit contract?
o Yes
o No
PLEASE RETURN BY JANUARY 18, 2013 PAGE2 QUESTIONS? EMAIL SBRYANT@BAZIL/OCOBB.COM
CITIES FISCAL HEALTH, GOVERNANCE AND MANAGEMENT
20. Does your city allow the independent auditor to provide nonaudit services to the city?
o Yes
o No
21. If yes, does the Audit Committee review and approve these services?
o Yes
o No
22. Please provide a copy of the formal policies related to audit procurement.
23. Please provide any comments or explanations regarding your responses on audit
procurement:
Accounting Policies and Procedures
24. Are accounting policies and procedures formally documented in an accounting policies
and procedures manual?
o Yes
o No
25. Are accounting policies and procedures reviewed annually and updated at least once
every three years on a predetermined schedule?
o Yes
o No
26. Do the accounting policies and procedures specifically define the authority and
responsibility of all employees, including the authority to authorize transactions and the
responsibility for safekeeping of assets and records?
o Yes
o No
27. Please provide a copy of the accounting policies and procedures manual.
28. Please provide any comments or explanations regarding accounting policies and
procedures:
PLEASE RETURN BY JANUARY 18, 2013 PAGE3 QUESTIONS? EMAIL SBRYANT@BAZILIOCOBB. COM
CiTIES FISCAL HEALTH, GOVERNANCE AND MANAGEMENT
Reporting of Fraud, Abuse, and Questionable Practices
29, Does your city have policies and procedures to encourage and facilitate the reporting of
fraud or abuse (whistleblowers) and questionable accounting or auditing practices?
o Yes
o No
30, Does your city have a formally adopted and widely distributed and publicized ethics
policy?
o Yes
o No
3 L Does your city have a practical mechanism, such as a fraud hot line, to permit the
confidential, anonymous reporting of concerns about fraud, abuse, or questionable
practices?
o Yes
o No
32, Are concerns received regarding fraud, abuse, or questionable practices reviewed by
internal auditors, with documentation reviewed by the Audit Committee,
o Yes
o No
33, Please provide a copy of the ethics policy and information on mechanisms for reporting
concerns of fraud, abuse, or questionable practices,
34, Please provide any comments or explanations regarding reporting of fraud, abuse, and
questionable practices:
Internal Controls
35, Are internal control procedures over financial management formally documented?
o Yes
o No
36, Do internal control procedures include practical means for lower level employees to
report instances of management override of controls?
o Yes
o No
37, Are internal control procedures evaluated to determine if those controls are adequately
designed to achieve their intended purpose, have actually been implemented, and
continue to function as designed?
o Yes
o No
PLEASE RETURN BY JANUARY 18, 2013 PAGE4 QUESTIONS? EMAIL SBRYANT@BAZILIOCOBB,COM
CITIES FISCAL HEALTH, GOVERNANCE AND MANAGEMENT
38. Are potential internal control weaknesses documented in exception reports?
o Yes
o No
39. Is there a process in place to identify changes in what is being controlled or controls
themselves, and corrective action plans are developed with an appropriate timeline?
o Yes
o No
40. Please provide a copy of the internal control procedures over financial management.
41. Please provide any comments or explanations regarding your responses on internal
controls:
Internal Audit
42. Does your city have an internal audit function formally established by enabling resolution
or other legal means?
o Yes
o No
43. Is the work of the internal audit function conducted in accordance with the U.S. General
Accounting Office's Government Auditing Standards?
o Yes
o No
44. Are all reports of the Internal Audit function provided to or available to the Audit
Committee?
o Yes
o No
45. Please provide a copy of the formal action establishing the internal audit function.
46. Please provide any comments or explanations regarding your responses on internal audit:
PLEASE RETURN BY JANUARY 18, 2013 PAGE5 QUESTIONS? EMAIL SBRYANT@BAZILIOCOBB.COM
CITIES FISCAL l-IEALTH, GOVERNANCE AND MANAGEMENT
General Fund Unrestricted Fund Balance
47. Does your city have a formal policy on the level of unrestricted fund balance to be
maintained in the General Fund?
o Yes
o No
48. Does this policy require an unrestricted fund balance of no less than two months of
regular general fund operating revenues or regular general fund operating expenditures?
o Yes
o No
49. Please provide a copy of the formal policy on the level of unrestricted fund balance to be
maintained in the General Fund.
50. Please provide any comments or explanations regarding your responses on general fund
unrestricted fund balance:
Financial and Public Reporting Practices
51. Does your city maintain an accounting system adequate to provide all the data needed for
the timely preparation of financial statement in conformity with Generally Accepted
Accounting Principles (GAAP)?
o Yes
o No
52. Does your city issue timely financial statements for the entire financial reporting entity in
conformity with GAAP as part of a Comprehensive Annual Financial Report (CAFR)?
o Yes
o No
53. Has your city"s financial statements been independently audited in accordance with either
generally accepted auditing standards (GAAP) or Government Auditing Standards
(GAS)?
o Yes
o No
54. Are the annual budget documents or CAFR for your city published and readily accessible
to the general public on your city's website?
o Yes
o No
55. Are city financial management staff members of and participate in the Government
Finance Officers Association ?
o Yes
o No
PLEASE RETURN BY JANUARY 18, 2013 PAGE 6 QUESTIONS? EMAil SBRYANT@BAZ/l/OCOBB.COM
CmES FISCAL HEALTH, GOVERNANCE AND MANAGEMENT
56, Please provide any comments or explanations regarding your responses on financial and
public reporting practices:
Please provide the contact information for the individnal with primary responsibility for
completing this snrvey:
Name: ____________________________________ __
Title:
Phone:
Email:
PLEASE RETURN BY JANUARY 18, 2013 PAGE 7 QUESTIONS? EMAIL SBRYANT@BAZILIOCOBB,COM
CITIES FISCAL HEALTH, GOVERNANCE AND MANAGEMENT
APPENDIX C: EMPLOYEES WITH COMPENSATION OVER $200,000 IN 2011
Beverly Hills $279,819 $52,570 $13,778 $360
Beverly Hills $279,444 $20,939 $13,446 $360
2012-2013 LOS ANGELES COUNTY CiVIL GRAND JURVREPORT C-I
CITIES FISCAL HEALTH. GOVERNANCE AND MANAGEMENT
1•::·: ~--•·•· >f''''·'~ ''<s•. ~' .·;:',;·;·,;;i,''1' i\;(",;~; ;•.·•'••··--·••-•·f', .. ;••···.•·• I •
Beverly Hills Assistant City City Manager $255,230 $31 ,946 $20,089 $360 Manager ..
Beverly Hills Art Director Information $255,157 $12,039 $7,952 $600 Technology ,,
Beverly Hills Police Officer Police Department $244,218 $35,288 $9,612 $4,513 $11,971
Beverly Hills Solid Waste Manager Public Works $242,717 $16,438 $9,870 $600 ..
Beverly Hills Fire Battalion Chief Fire Department $242,422 $49,644 $13,239 $360 112 ..
Beverly Hi!ls Police Officer Police Department $240,675 $28,663 $7,807 $3,040 $13,108
Beverly Hills Fire Captain 112 Fire Department $237,618 $42,176 $10,755 $360 ..
Beverly Hills Street Superintendent Public Works $235,987 $11,938 $7,086 $600 ..
Beverly Hills Police Captain Police Department $234,240 $62,768 $18,977 $360 $17,105
Beverly Hills Plan Reviewer Community $232,892 Development $ll,474 $7,581 $600 ,,
Beverly Hills Fire Battalion Chief Fire Department $232,516 $50,778 $13,867 $360 112 "
Beverly Hills Fire Captain 112 Fire Department $230,046 $44,647 $11,614 $360 -
Beverly Hills Police Oftlcer Police Department $229,901 $35,825 $9,465 $3,840 $17,105
Beverly Hills Fire Engineer 112 Fire Department $228,362 $37,955 $9,868 $360 -·
Beverly Hills Director Of Public Public Works $227,631 $26,176 $16,594 $600 Works "
Beverly Hills Fire Captain 112 Fire Department $226,817 $44,628 $11,707 $360 -·
Beverly Hills Police Oflicer Police Department $222,214 $24,780 $7,082 $2,880 $12,529
Assistant Director Of Community Beverly Bills Community $220,924 $19,589 $12.554 $360 "
Development-C Development
Beverly Hills Fire Captain 112 Fire Department $217,085 $43,486 $11,677 $360 "
Beverly Hills Police Officer Police Department $216,601 $26,733 $7,568 $3,040 $13,108
Beverly Hills Fire Captain 112 Fire Department $215,721 $43,512 $11 ,30! $360 "
Beverly Hills Fire Captain 112 Fire Department $215,476 $43,440 $11,676 $360 -
Beverly Hills Police Officer Police Department $215,355 $15,344 $4,480 $1,900 $2,420
Beverly Hills Fire Captain 112 Fire Department $214,711 $44,629 $11,707 $360 ·-
Beverly Hills Fire Captain 112 Fire Department $214,645 $44,650 $11,614 $360 "
Beverly Hills Police Captain Police Department $212,827 $57.725 $17,401 $360 $17,105
Beverly Hills Fire Engineer 112 Fire Department $212,669 $38,009 $9,66] $360 "
Beverly Hills Director Community Community $212,368 $25,832 $16,45! $360 " Development Development
Beverly Hills Director Of Community Services $211,831 $23,728 $14,973 $360 Community Services "
Beverly Hills Fire Engineer 112 Fire Department $208,536 $37,958 $9,868 $360 "
Assistant Director Of
Beverly Hills Community Services-Community Services $208,424 $21,003 $13,495 $360 "
Lib
Beverly Hills Fire Captain 112 Fire Department $206,568 $44,501 $11,703 $360 "
Beverly Hills Risk Manager Administrative $205,930 $18,395 $11,850 $360 Services ,
Beverly l-Iills Fire Captain 112 Fire Department $205,710 $43,437 $11,676 $360 --
Beverly Hills Police Ofllcer Police Department $205,668 $27,530 $7,589 $3,040 $10,653
Beverly Hills Fire Engineer 112 Fire Department $205,360 $37,942 $9,947 $360 ,
Beverly Hills Police Captain Police Department $203,395 $56,473 $17,069 $360 $17,105
2012-2013 LOS ANGELES COUNTY CIVIL GRAND JURY REPORT C-2
Beverly Hills
Burbank
Burbank
Burbank
Burbank
Burbank
Burbank
Burbank
Burbank
Burbank
Burbank
Burbank
Burbank
Burbank
Burbank
Calabasas
Carson
Cerritos
Claremont
Commerce
Compton
Covina
Covina
Cudahy
Culver City
Culver City
Culver City
Culver City
Culver City
Culver City
Culver City
Culver City
Culver City
Culver City
Culver City
Senior Planner
City Manager
General Manager~
Burbank Water &
Power
Line Mechanic
Supervisor-G
Police Lieutenant
Fire Chief
Police Chief
City Attorney
Chief Assistant City
Attorney
Assistant General
Manager-Burbank
Water & Power
Chief Financial
Officer
Fire Captain
Fire Battalion Chief
Fire Battalion Chief
Assistant General
Manager-Burbank
Water & Power
City Manager
Economic
Development General
Manager
City Manager
City Manager
Director Of Parks &
Recreation
City Manager
City Manager
Chief Of Police
Dir. Of Com Services
City Manager
City Attorney
Police Captain
Chief of Police
Fire Chief
Police Lieutenant
Chief lnformation
Officer
Battalion Chief
Battalion Chief
Chief Financial
Officer
Assistant City
Manager
Community
Development
City Manager
Department
BUrbank Water And
Power Department
Burbank Water And
Power Department
Police Department
Fire Department
Police Department
City Attorney
Department
City Attorney
Department
Burbank Water And
Power Department
Burbank Water And
Power Department
Fire Department
Fire Department
Fire Department
Burbank Water And
Power Department
City Manager
Economic
Development
City Manager
-Council/Manager
Community Services
City Manager
Administration
Police
Recreation
City Manager's Office
City Attorney
Police
Police
Fire
Police
Information
Technology
Fire
Fire
Finance
City Manager's Office
CITIES FISCAL HEALTH, GOVERNANCE AND MANAGEMENT
$200,128 $13,332 $8,010 $600
$259,919 $28,166 $16,526 $1,154 $14,010
$240,003 $31,411 $18,196 $1,200 $11,765
$225,892 $19,390 $1,505
$224,817 $36,166 $13,169 $13,753
$218,057 $31,838 $17,180 $1,154 $15,305
$217,734 $47,685 $16,373 $969
$215,238 $21,017 $13,514 $12,321
$215,150 $26,769 $16,920 $900 $1,505
$214,340 $25,704 $16,283 $900 $183
$211,609 $23,805 $15,037 $780 $3,997
$209,554 $21 ,733 $12,145 $11,433
$208,661 $23,023 $12,866 $12,010
$205,053 $27,352 $15,382 $12,010
$200,566 $25,872 $16,357 $900 $15,140
$219,801 $15,386 $12,286 $4,318
$227,748 $36,891 $13,931 $13,174
$246,021 $18,164 $43,257 $14,197
$280,627 $36,408 $18,278 $23,226 $13,599
$219,641 $13,414 $8,602 $2,098 $11,461
$258,041 $11,527 $1,250
$221,295 $2,135 $11,880
$209,909 $10,560
$214,237 $1,367
$272,006 $16,199 $15,887
$244,561 $3,541 $3,699 $18,375
$234,556 $17,395 $3,250 $12,433
$232,447 $19,141 $3,250 $15,477
$226,704 $17,988 $3,699 $15,477
$225,155 $15,023 $2,125 $15,477
$218,895 $7,902 $3,699 $11,950
$215,506 $15,682 $3,699 $15,477
$213,052 $15,682 $3,699 $15,910
$211,431 $8,565 $3,556 $15,887
$210,260 $8,916 $3,699 $12,494
2012-2013 LOS ANGELES COUNTY CIVIL GRAND JURY REPORT c-3
CITIES FISCAL HEALTH, GOVERNANCE AND MANAGEMENT
··......• ·t•,;>; l,;;g;:····· •,;,,xi\ ,':jiiy\'''·;·······.····· I ... ·.. ···•
• • •••••••
I') ·{
!················· :•··
r~c .. _.··.
•· .......••.......•... • · ...... li •. ··•···· .,_ ...•.... ..... ; .......
Culver City Fire Captain Fire $209,288 .. $9,894 .. $14,187
Public Works
Culver City Director/City Public Works $206,378 --$7,864 $3,699 $14,041
Engineer
Culver City Battalion Chief Fire $201,616 .. $13,743 $3,699 $15,477
Diamond Bar City Manager City Manager/City $210,206 $22,240 $13,735 .. $13,074 Clerk
Downey City Manager City Manager Office $263,051 $479 $305 .. $4,379
Downey Deputy City Manager Emergency Operations $239,448 $720 $296 .. .. Emergency Ops
Downey Deputy City Manager City Manager Office $231,813 $8,749 $5,570 .. $1,575 Spec Project
Downey Chief Of Police Police Administration $213,097 $49,393 $18,301 .. $15,599
Downey Fire Captain Fire Suppression $211,322 $31,756 $11,757 .. $3,778
Downey Battalion Chief Fire Suppression $208,014 $35,652 $13,!60 -$3,778
Do'Nilcy Battalion Chief Fire Prevention $205,220 $4! ,280 $15,256 .. $3,778
Downey Assistant City City Manager Office $203,807 $30,041 $16,057 .. $3,780 Manager Gen Service
Do'Niley Battalion Chief Fire Suppression $203,380 $40,556 $15,010 --$3,778
Duarte City Manager City Manager $227,707 $42,727 $13,469 --$11,724
E1 Monte Chief Of Police Police/Safety $310,265 $43,721 $13,212 .. $7,213
El Monte Captain Police/Safety $277,774 $37,517 $13,821 .. $7,167
El Monte City Manager City Managers Office $245,583 $64,160 $18,505 $3,775 $5,004
El Monte Chief Of Police Police/Safety $226,796 $90,393 $27,844 --$12,744
El Monte Officer/Bonus Police/Safety $218,931 $4! ,774 $13,942 $10,712 Assignment ..
El Segundo Police Chief Police Patrol & Safety $271,940 $68,235 $17,874 $15,369 $1,616
El Segundo Fire Chief Fire Administration $261,296 $67,328 $17,576 $15,638 $1,960
El Segundo Battalion Chief Fire Suppression $246,712 $60,054 $17,233 $10,860 $1,960
El Segundo Battalion Chief Fire Suppression $244,015 $59,712 $16,982 $10,784 $1,372
El Segundo Fire Captain Fire Suppression $235,832 $57,613 --.. $14,174
El Segundo Fire Captain Fire Suppression $230,954 $54,047 .. .. $6,460
El Segundo Battalion Chief Fire Suppression $224,816 $55,273 $2,375 $3,200 $9,416
El Segundo Police Captain Police Patrol & Safety $210,675 $65,363 $19,749 .. $1,868
El Segundo Fire Captain Fire Suppression $205,894 $51,410 .. .. $14,174
El Segundo Police Lieutenant Police Patrol & Safety $202,025 $59,432 $17,582 .. $1,030
Gardena City Manager City Manager $226,817 $14,990 $7,692 --$10,440
Glendale City Attorney City Attorney $284,734 .. .. .. $15,459
Glendale General Manager -Glendale Water & $262,855 $13,766 GWP Power --.. --
Glendale Police Lieutenant Police $262,148 .. .. .. $12,649
Glendale Police Chief Police $259,193 .. .. --$19,524
Glendale City Manager Management Services $251,820 .. --.. $14,339
Glendale Integrated Resources Glendale Water & $248,354 --$13,252 Plan Admin Power ----
Glendale Fire Chief Fire $231 ,907 .. .. .. $19,524
Glendale Deputy Fire Chief Fire $220,092 .. --.. $19,608
2012-2013 LOS ANGELES COUNTY CIVIL GRAND JURY REPORT C-4
CITIES FISCAL HEALTH, GOVERNANCE AND MANAGEMENT
~ ••.••••.•• ·.··· ; " ''li si"•)''i ;<>.i.•' ,,, •••• ,............ C;. ~\'•.•.. ..·· .. ·•:< r;;(;;~ :;·~{01'\"~"';Fi.~ ··';~}\"'~:
·.... i·.••••· ···•· >'",; ·;F: li,~" li~·c· ......... 1>. , ..
Glendale Police Captain Police $217,863 ------$5,777
Glendale Police Captain Police $216,810 ------$5,777
Glendale Fire Battalion Chief Fire $214,133 ------$19,608
Glendale Firefighter Fire $208,667 ------$15,660
Glendale Fire Captain Fire $207,894 ------$15,660
Glendale City Attorney City Attorney $207,796 ------$10,316
Glendale Fire Battalion Chief Fire $203,799 ------$19,608
Glendora City Manager City Manager $209,144 $24,517 $1,292 $11,158 $12,821
Hawaiian City Administration Administration $202,486 $5,098 $13,595 $11,768 Gardens --
Hawthorne Chief Of Police Police $221,871 $64,956 $16,910 Services ----
Hawthorne City Attorney City Attorney $208, I 08 --$42,557 --$9,967
Hawthorne City Manager City Manager $200,475 --$38,694 --$27,159
Hermosa Beach City Manager City Manager $257,918 $69,445 $14,979 $16,500 $17,474
Hermosa Beach Fire Captain Fire $239,706 $74,038 $13,696 --$14,275
Huntington Park Chief of Police Police $218,185 $48,805 $20,906 --$15,657
Los Angeles Chief Port Pilot II Harbor Department $389,664 ------$10,608
Los Angeles Chief Port Pilot lJ Harbor Department $385,064 ------$10,608
Los Angeles Port Pilot ll Harbor Department $361,525 ------$10,608
Los Angeles Port Pilot II Harbor Department $356,710 ------$10,608
General Manager & Los Angeles
Los Angeles Chief Engineer Water Department of Water $346,778 -----$14,224
& Power and Power
Los Angeles Port Pilot II Harbor Department $342,307 ------$10,608
Los Angeles Port Pilot II Harbor Department $340,017 ---- --$10,608
Los Angeles Port Pilot II Harbor Department $333,202 ------$10,608
Los Angeles General Manager Lns Angeles World $325,693 ------$10,608 Airports Airports
Los Angeles Port Pilot II Harbor Department $318,455 ------$10,608
Los Angeles Port Pilot li Harbor Department $315,041 ------$10,608
Los Angeles Port Pilot ll Harbor Department $314,855 ------$10,608
Los Angeles General Manager :Harbor Department $307,411 ------$10,608 Harbor Department
Los Angeles Port Pilot TJ Harbor Department $299,291 ------$10,608
Los Angeles Chief of Police Los Angeles Police $296,989 ------$10,608 Department
Los Angeles Fire Deputy Chief Los Angeles Fire $294,742 ------$13,368 Department
Los Angeles Port Pilot II Harbor Department $290,485 ------$10,608
Los Angeles Port Pilot Il Harbor Department $287,242 ------$10,608
Senior Load Los Angeles
Los Angeles Dispatcher Department of Water $281,142 -----$14,224
and Power
Utility Services Los Angeles
Los Angeles Manager Department of Water $285,042 ------$14,224
and Power
Los Angeles Port Pilot II Harbor Department $279,717 ------$10,608
Los Angeles Assistant General Los Angeles $276,518 $14,224 Manager Water and Department of Water ------
2012-2013 LOS ANGELES COUNTY CIVIL GRAND JURY REPORT c-5
CITIES FISCAL HEALTH, GOVERNANCE AND MANAGEMENT
lc ........... c........... / -._ •. __ •i> . •• .i./ ,:······ i.:: /') ......... ; ;;~t :, . ~-···. _·· .. . _.-_._·.
•...• >·-··.·· •••. _.-... _.· >
... ····· .. -· .. ....•... _._·. ···•··.-.·-··-··
'. :c > .
Power and Power
Senior Load Los Angeles
Los Angeles Dispatcher Department of Water $271,192 ------$14,224
and Power
Los Angeles Fire Captain I Los Angeles Fire $270,622 ------$13,368 Department
Los Angeles Port Pilot II Harbor Department $268,270 ------$I0,608
Transmission & Los Angeles
Los Angeles Distribution District Department of Water $267,603 ------$14,224
Supervisor and Power
Los Angeles Fire Battalion Chief Los Angeles Fire $267,124 ------$13,368 Department
Transmission & Los Angeles
Los Angeles Distribution District Department of Water $266,895 ------$14,224
Supervisor and Power
General Services Los Angeles
Los Angeles Manager Department of Water $266,402 ------$I4,224
and Power
Transmission & Los Angeles
Los Angeles Distribution District Department of Water $266,138 ------$14,224
Supervisor and Power
Senior Load Los Angeles
Los Angeles Dispatcher Department of Water $265,024 ------$14,224
and Power
Electrical Distribution Los Angeles
Los Angeles Mechanic Supervisor Department of Water $264,808 ------$14,224
and Power
Los Angeles
Los Angeles Electrical Engineer Department of Water $264,387 ------$14,224
and Power
Los Angeles Police Deputy Chief Il Los Angeles Police $263,517 ------$12,592 Department
Senior Load Los Angeles
Los Angeles Dispatcher Department of Water $262,687 ------$14,224
and Power
Los Angeles Fire Helicopter Pilot Los Angeles Fire $261,460 ------$13,368 111 Department
Transmission & Los Angeles
Los Angeles Distribution District Department of Water $261,049 ------$14,224
Suoervisor and Power
Assistant General Los Angeles
Los Angeles Manager Water and Department of Water $260,866 ------$14,224
Power and Power
Assistant General Los Angeles
Los Angeles Manager Water and Department of Water $260,607 ------$14,224
Power and Power
Los Angeles Police Deputy Chief li Los Angeles Police $260,186 ------$12,592 Department
Electrical Service Los Angeles
Los Angeles Manager Department of Water $259,487 ------$14,224
and Power
Electrical Distribution Los Angeles
Los Angeles Mechanic Supervisor Department of Water $259,383 ------$14,224
and Power
Electrical Service Los Angeles
Los Angeles Manager Department ofW ater $259,097 -----$I4,224
and Power
Auditor Water And Los Angeles
Los Angeles Power Department of Water $259,019 ------$14,224
and Power
Electrical Service Los Angeles
Los Angeles Manager Department of Water $257,895 ------$14,224
and Power
2012-2013 LOS ANGELES COUNTY CIVIL GRAND JURY REPORT C-6
CITIES FISCAL HEALTH, GOVERNANCE AND MANAGEMENT
1·····-· y:·-····\ I > ! , '~• iF'>•·--····-.i:t·; r>·> .. ;. -----·-.-•. -......... <.0
-·····-·--->• < .... -
&\:t;:·x:
l:ct••.•---•••.•• •·•• ······~·····.·-·;-.· i I) ~.~:; i.·. ; ·.;·
Electrical Distribution Los Angeles
Los Angeles Mechanic Supervisor Department of Water $257.766 ------$14,224
and Power
Los Angeles Chief Legislative Council $257,482 ------$10,608 Analyst
Transmission & Los Angeles
Los Angeles Distribution District Department of Water $256,801 ------$14,224
Supervisor and Power
Los Angeles Fire Helicopter Pilot Los Angeles Fire $256,759 ------$13,368 Ill Department
Los Angeles Fire Chief Los Angeles Fire $256,716 ------$13,368 Department
General Services Los Angeles
Los Angeles Manager Department of Water $256,371 ------$14,224
and Power
Transmission & Los Angeles
Los Angeles Distribution District Department of Water $256,226 ------$14,224
Supervisor and Power
Power Engineering Los Angeles
Los Angeles Department ofWater $256,111 ------$14,224 Manager and Power
Los Angeles Fire Battalion Chief Los Angeles Fire $255,958 ------$13,368 Department
General Services Los Angeles
Los Angeles Manager Department of Water $255,793 ------$14,224
and Power
Power Engineering Los Angeles
Los Angeles Manager Department of Water $254,827 ------$14,224
and Power
Power Engineering Los Angeles
Los Angeles Manager Department of Water $254,772 ------$14,224
and Power
Power Engineering Los Angeles
Los Angeles Manager Department of Water $254,656 ------$14,224
and Power
Principal Utility Los Angeles
Los Angeles Department ofWater $253,726 ------$14,224 AccoWltant and Power
Managing Water Los Angeles
Los Angeles Utility Engineer Department of Water $253,630 ------$14,224
and Power
Transmission & Los Angeles
Los Angeles Distribution District Department of Water $253,441 ------$14,224
Supervisor and Power
Managing Water Los Angeles
Los Angeles Utility Engineer Department of Water $252,917 ------$14,224
and Power
Los Angeles
Los Angeles Medical Director Department of Water $252,817 ------$14,224
and Power
Senior Load Los Angeles
Los Angeles Dispatcher Department of Water $252,653 ------$14,224
and Power
Los Angeles Fire Battalion Chief Los Angeles Fire $252,512 ------$13,368 Department
Managing Water Los Angeles
Los Angeles Utility Engineer Department of Water $252,341 ------$14,224
<md Power
Power Engineering Los Angeles
Los Angeles Manager Department ofWater $252,284 ------$14,224
and Power
Managing Water Los Angeles
Los Angeles Utility Engineer Department of Water $252,198 ------$14,224
and Power
Los Angeles Fire Helicopter Pilot Los Angeles Fire $251,926 ------$13,368
2012-2013 LOS ANGELES COUNTY C1V1L GRAND JURY REPORT C-7
CITIES FISCAL HEALTH, GOVERNANCE AND MANAGEMENT
7mi~~ c-;~ •. ,, •. _._~ ;·· .•.. ;~r;i·~~;:~c .. ,. • .•• •··. ;1
1' .. );7&.······"' ~--•. · •• : ........ I" \iF··-··.········ •·-·······>·"·.•-.. ·< ......
Los Angeles Fire Deputy Chief Lo; Aogeles Fire $251,731 .. .. . . $13.368
Los Angeles Firefighter III ~os Angeles Fire $251,508 ------$13,368
Los Angeles g~;~ ' g~e~rd i i $250,840 $10,608 ------
Los Angeles Senior Load :d Power of Water $250,410 $14,224 Dispatcher ------
& Los Angel"
Los Angeles District ;n"J' Power of Water $250,268 ------$14,224
Los Angeles i;re• ~osA $249,516 ------$13,368
Los Angeles Police Deputy Chief II Los Angeles Police $248,942 ------$12,592
Los Angeles ~:;,~;; ~~~~~: LosA~gel" World
Airport; $248,754 ------$10,608
' •& Los Angeles
Los Angeles "''"'h District Department of Water $248,707 ------$14224
' and Power
Los Angeles Fire Battalion Chief Los Angeles Fire $247,996 ------$13.368
Los Angeles Electrical Service Los Angeles
$247,721 $14,224 Manager Department of Water ------
and Power
Los Angeles Electrical Engineer ~;s Angeles Water $247,644 ----$14,224
. and Power
Los Angeles ~~~a~:~~~r~rneral Harbor Department $247,582 ------$10,608
&
Los Angeles District waTer $247,150
and Power
------$14,224
LosAngeie'_ Council Member Cooncil $247,106 ------$10,608
Los Angeles ~:~~e:~~~;~s /l ~~~~~~eles World $247,040 ---- --$10,608
Los Angeles Electrical Distribution Los Angeles
$246,654 $14,224 Mechanic Supervisor of Water ------
and Power
Los Angeles Fire Deputy Chief ;;"' ""' ;Fire $246,530 ------$13,368
Assistant General Los Angeles
Los Angeles Water and ;n'"'J'p;~~~ _of Water $246,410 ------$14,224
Po wee
Los Angeles 'o& ""' ofWater $246,242 $14,224 tstnct :,f'o" ------
Assistant Geneml Los Angeles
Los Angeles Water and ;n"d'Power ofWater $246,213 ------$14,224
Power
Los Angeles
Assistant _General ~os Angeles
$246,072 $14,224 Powe; Water and u<;;;~ 1 of Water ------
Los Angeles Fire Deputy Chief Los Angele> Flee $245,478 ------$13,368
Los Angeles Senior Load Los Angeles
$244,975 $14,224 Dispatcher of Water ------and Power
Los Angeles Managing Water Los Angel~s _
$244,932 $14,224 Utility Engineer ;n'"J'P~\Ver _of Water ------
2012-2013 LOS ANGELES COUNTY ClVlLGRAND JURY REPORT C-8
CITlES FISCAL HEALTH, GOVERNANCE AND MANAGEMENT
,, \ < <'! ,. ' ..... ·._-.. ' ' .. '·_ .. __ . __ -.. _. __ .·· .... >) I ··.·· __ ,,_·, •. _ •.
I > _-; I> > ... ;•.• ··-·-· ., •. _ ••••.•••
. .. __ .· <> . • ·_ ... .. •··•-...... _,•.• . .•... , ..... _._,'.,_,·,-···· --····' i < i ... .;. ,, .
Los Angeles Fire Battalion Chief Los Angeles Fire $244,664 ------$13,368 Department
Los Angeles First Deputy General Harbor Department $244,309 ------$10,608 Manager Harbor
Power Engineering Los Angeles
Los Angeles Manager Department of Water $244,033 ------$14,224
and Power
Assistant General Los Angeles
Los Angeles Manager Water and Department of Water $243,807 ------$14,224
Power and Power
Electrical Service Los Angeles
Los Angeles Manager Department of Water $243,705 ------$14,224
and Power
Senior Load Los Angeles
Los Angeles Dispatcher Department of Water $243,657 ------$14,224
and Power
Los Angeles First Deputy General Harbor Department $243,115 ------$10,608 Manager Harbor
Los Angeles First Deputy General Harbor Department $243,115 ------$10,608 Manager Harbor
Power Engineering Los Angeles
Los Angeles Department of Water $242,564 ------$14,224 Manager and Power
Managing Water Los Angeles
Los Angeles Utility Engineer Department of Water $242,487 ------$14,224
and Power
Los Angeles Fire Assistant Chief Los Angeles Fire $242,370 ------$13,368 Department
Transmission & Los Angeles
Los Angeles Distribution District Department of Water $242,133 ------$14,224
Supervisor and Power
Los Angeles Deputy General Los Angeles World $241,635 ------$10,608 Manager Airports /1 Airports
Los Angeles Deputy General Los Angeles World $241,628 ------$10,608 Manager Airports /1 Airports
Power Engineering Los Angeles
Los Angeles Department ofWater $241,616 ------$14,224 Manager and Power
Power Engineering Los Angeles
Los Angeles Department of Water $241,435 ------$14,224 Manager and Power
Senior Load Los Angeles
Los Angeles Dispatcher Department of Water $241,395 ------$14,224
and Power
Managing Water Los Angeles
Los Angeles Utility Engineer Department of Water $241,293 ------$14,224
and Power
Los Angeles Fire Assistant Chief Los Angeles Fire $241,268 -----$13,368 Department
Managing Water Los Angeles
Los Angeles Utility Engineer Department of Water $241,010 ------$14,224
and Power
Principal Utility Los Angeles
Los Angeles Department of Water $240,844 ------$14,224 Accountant and Power
Transmission & Los Angeles
Los Angeles Distribution District Department of Water $240,741 ------$14,224
Supervisor and Power
Managing Water Los Angeles
Los Angeles Utility Engineer Department of Water $240,526 ------$14,224
and Power
Transmission & Los Angeles
Los Angeles Distribution District Department of Water $240,146 ------$14,224
Supervisor and Power
2012-2013 LOS ANGELES COUNTY CiVIL GRAND JuRY REPORT C-9
CITIES FISCAL HEALTH, GOVERNANCE AND MANAGEMENT
'~N;;~'i,';;";i~'i\l~~;g;cF~,;,'f;C,•,; ~~) ; •• , ;Z ~, / ,~r;\'"c;.·· .... •· .. ,;.;,' .. ;;</;;1; } •...••••..• ;,; .•.... ······.·:.·,x,,;.i;l 'C:;. i. l'.hcil'"' \( .•••....
Los Angeles Deputy General Los Angeles World $239,949 '' " " $!0,608 Manager Airports /1 Airports
Transmission & Los Angeles
Los Angeles Distribution District Department of Water $239,627 " " " $14,224
Supervisor and Power
Electric Distribution Los Angeles
Los Angeles M~hanic Department of Water $239,541 " " " $14,224
and Power
Los Angeles Fire Battalion Chief Los Angeles Fire $239,426 --" " $13,368 Department
Los Angeles
Los Angeles Electrical Engineer Department of Water $238,938 " " " $14.224
and Power
General Manager Information Los Angeles Information Technology Agency $238,936 " " " $10,608
Technology Agency
Los Angeles Police Sergeant I Los Angeles Police $238,666 " " " $12,592 Department
Los Angeles Firefighter III Los Angeles Fire $238,66\ " " " $13,368 Department
Los Angeles Fire Helicopter Pilot Los Angeles Fire $238,388 " " " $13,368 IV Department
Principal Utility Los Angeles
Los Angeles Department of Water $238,211 " " " $14,224 Accountant and Power
Electrical Engineering Los Angeles
Los Angeles Department of Water $237,696 -" " $14,224 Associate and Power
Transmission & Los Angeles
Los Angeles Distribution District Department of Water $237,497 " " " $14,224
Supervisor and Power
Transmission & Los Angeles
Los Angeles Distribution District Department ofWater $236,842 " " " $14,224
Supervisor and Power
Senior Load Los Angeles
Los Angeles Dispatcher Department of Water $236,662 " " " $14,224
and Power
Los Angeles Fire Battalion Chief Los Angeles Fire $236,469 " " " $13,368 Department
Los Angeles Fire Deputy Chief Los Angeles Fire $235,510 " " " $13,368 Department
Los Angeles Fire Battalion Chief Los Angeles Fire $235,313 " " " $13,368 Department
Transmission & Los Angeles
Los Angeles Distribution District Department of Water $235,050 " " " $14,224
Supervisor and Power
Los Angeles
Los Angeles Load Dispatcher Department of Water $234,881 " " " $14,224
and Power
Transmission & Los Angeles
Los Angeles Distribution District Department of Water $234,802 " " " $14,224
Supervisor and Power
Power Engineering Los Angeles
Los Angeles Department of Water $234,684 " " " $14,224 Manager and Power
Transmission & Los Angeles
Los Angeles Distribution District Department of Water $233,886 " " " $14,224
Supervisor and Power
Los Angeles Fire Assistant Chief Los Angeles Fire $233,877 " " " $13,368 Department
Transmission & Los Angeles
Los Angeles Distribution District Department of Water $233,113 " " " $14,224
Supervisor and Power
Los Angeles Fire Helicopter Pilot Los Angeles Fire $232,663 " " " $13,368 v Department
2012-2013 LOS ANGELES COUNTY CTV1L GRAND JURY REPORT C-10
CJTlliS FISCAL HEAL TI-l, GOVERNANCE AND MANAGEMENT
!·':· ..•... ·.<<; ..•..••• l:">;!i'<' ~;~;~c>i::ft<i:>j {• ,· l'!•;j;_ ;",;~ c'f( ! i ::; c•'Ui··· i 1•:·.:?· [i <;\ ·.•'\
• Jii .· .. • •••
Electrical Service Los Angeles
Los Angeles Manager Department of Water $232,614 ------$14,224
and Power
Electrical Service Los Angeles
Los Angeles Manager Department of Water $232,591 --·---$14,224
and Power
Transmission & Los Angeles
Los Angeles Distn.bution District Department of Water $232,232 ------$14,224
Supervisor and Power
Transmission & Los Angeles
Los Angeles Distribution District Department of Water $232,128 ------$14,224
Supervisor and Power
Utility Services Los Angeles
Los Angeles Manager Department of Water $232, I 05 ------$14,224
and Power
Los Angeles Fire Helicopter Pilot Los Angeles Fire $231,430 ------$13,368 lJl Department
General Manager Fire Fire and Police Los Angeles & Police Pension Pension System $231,409 ----$10,608
System
Senior Load Los Angeles
Los Angeles Dispatcher Department of Water $231,148 ------$14,224
and Power
General Services Los Angeles
Los Angeles Manager Department of Water $230,415 ------$14,224
and Power
Man;:~.ging Water Los Angeles
Los Angeles Uti1ity Engineer Department of Water $228,883 ------$14,224
and Power
Los Angeles Fire Battalion Chief Los Angeles fire $228,881 ------$13,368 Department
Power Engineering Los Angeles
Los Angeles Department of Water $228,758 ------$14,224 Manager and Power
Managing Water Los Angeles
Los Angeles Utility Engineer Department of Water $228,463 ------$14,224
and Power
Los Angeles Fire Captain 1 Los Angeles Fire $228,362 -----$13,368 Deuartment
Los Angeles Fire Helicopter Pilot Los Angeles Fire $228,358 ------$13.368 lll Department
Los Angeles General Manager Department of $228,287 ------$10,608 Recreation & Parks Recreation & Parks
Transmission & Los Angeles
Los Angeles Distribution District Department of Water $228,006 ------$14,224
Supervisor and Power
Los Angeles Fire Captain I Los Angeles Fire $227,862 ------$13,368 Deoartment
Electrical Distribution Los Angeles
Los Angeles Mechanic Supervisor Department of Water $227,806 ------$14,224
and Power
Transmission & Los Angeles
Los Angeles Distribution District Department of Water $227,648 --.. --$14,224
Supervisor and Power
Los Angeles Fire Assistant Chief Los Angeles fire $227,632 ------$13,368 Department
Los Angeles Fire Assistant Chief Los Angeles Fire $227,482 Department -· ----$13,368
Electrical Service Los Angeles
Los Angeles Manager Department of Water $227,216 ------$14,224
and Power
Senior Load Los Angeles
Los Angeles Dispatcher Department of Water $227,173 ----.. $14,224
and Power
2012-2013 LOS ANGELES COUNTY CIVIL GRAND JURY REPORT C ·II
Los Angeles
Los Angeles
Los Angeles
Los Angeles
Los Angeles
Los Angeles
Los Angeles
Los Angeles
Los Angeles
Los Angeles
Los Angeles
Los Angeles
Los Angeles
Los Angeles
Los Angeles
Los Angeles
Los Angeles
Los Angeles
Los Angeles
Los Angeles
Los Angeles
Los Angeles
Los Angeles
Los Angeles
Los Angeles
Los Angeles
Power Engineering
Manager
Fire Battalion Chief
Chief Electric Plant
Operator
Transmission &
Distribution District
Supervisor
Fire Battalion Chief
Electric Distribution
Mechanic
Electrical Distribution
Mechanic Supervisor
Electric Distribution
Mechanic
Transmission &
Distribution District
Supervisor
Transmission &
Distribution District
Supervisor
Police Deputy Chief II
Police Deputy Chief IT
Fire Battalion Chief
Electric Distribution
Mechanic
Fire Battalion Chief
Electrical Distribution
Mechanic Supervisor
Firefighter III
Firefighter III
City Engineer
Transmission &
Distribution District
Supervisor
Fire Assistant Chief
Chief Engineer Fire
Department
Firefighter III
Executive Assistant
To The General
Manager
Police Lieutenant ll
Transmission &
Distribution District
Los Angeles
Department of Water
and Power
Los Angeles Fire
Department
Los Angeles
Department of Water
and Power
Los Angeles
Department of Water
and Power
Los Angeles Fire
Department
Los Angeles
Department ofWater
and Power
Los Angeles
Department of Water
and Power
Los Angeles
Department of Water
and Power
Los Angeles
Department of Water
and Power
Los Angeles
Department of Water
and Power
Los Angeles Police
Department
Los Angeles Police
Deoartment
Los Angeles Fire
Department
Los Angeles
Department of Water
and Power
Los Angeles Fire
Department
Los Angeles
Department of Water
and Power
Los Angeles Fire
Department
Los Angeles Fire
Department
Public Works
Department -Bureau
of Engineering
Los Angeles
Department ofWater
and Power
Los Angeles Fire
Department
Los Angeles Fire
Department
Los Angeles Fire
Department
Los Angeles
Department of Water
and Power
Los Angeles Police
Department
LQS Angeles
Department of Water
CITIES FISCAL HEALTH, GOVERNANCE AND MANAGEMENT
$226.958 $14,224
$226,849 $13,368
$226,317 $14,224
$226,110 $14,224
$226,017 $13,368
$225,724 $14,224
$225,557 $14,224
$225,173 $14,224
$225,121 $14,224
$224,957 $14,224
$224,809 $12,592
$224,809 $12,592
$224,681 $13,368
$224,526 $14,224
$224,388 $13,368
$224,248 $14,224
$224,179 $!3,368
$224,133 $13,368
$224,125 $10,608
$223,793 $14,224
$223,669 $13,368
$223,590 $10,608
$223,207 $13,368
$223,206 $14,224
$223,134 $12,592
$223,117 $14,224
2012-2013 LOS ANGELES COUNTY CiVIL GRAND JURY REPORT C-12
CITIES FISCAL HEALTH, GOVERNANCE AND MANAGEMENT
····.-................. (
. , ... · ..•....•.. -.... ·-· ; I. -< ............ 1'·.·. }. I;;~ -··· ./
< .. ·.·.· ..
I .. ·•-•. / ' . • < .. : .. ··.· ...•. · •..••••.. < .. -·-··. 1· .•• I._.·· .. ..-.... ·· ..... 5
Supervisor and Power
Los Angeles Police Deputy Chief 11 Los Angeles Police $223,086 ------$12,592 Department
Los Angeles Fire Assistant Chief Los Angeles Fire $222,754 ------$13,368 Department
Los Angeles Fire Battalion Chief Los Angeles Fire $222,553 ------$13,368 Department
Senior Load Los Angeles
Los Angeles Dispatcher Department of Water $22I,903 --, , $I4,224
and Power
Senior Load Los Angeles
Los Angeles Dispatcher Department of Water $221,832 , , , $I4,224
and Power
Electric Distribution Los Angeles
Los Angeles Mechanic Department ofWater $221,546 --, --$14,224
and Power
Los Angeles Police Deputy Chiefll Los Angeles Police $221,471 ------$12,592 Department
Electrical Distribution Los Angeles
Los Angeles Mechanic Supervisor Department of Water $221,279 , --, $14,224
and Power
Managing Water Los Angeles
Los Angeles Utility Engineer Department of Water $221,198 ------$14,224
and Power
Los Angeles General Manager Personnel Department $221,099 Personnel Department , ----$10,608
Los Angeles Chief Assistant City Office of the City $220,976 ------$10,608 Attomey Attorney
Los Angeles Fire Captain I L<>s Angeles Fire $220,874 , , --$13,368 Department
Electric Distribution Los Angeles
Los Angeles Mechanic Department of Water $220,773 ------$I4,224
and Power
Los Angeles Fire Battalion Chief Los Angeles Fire $220,549 ------$13,368 Department
Electrical Distribution Los Angeles
Los Angeles Mechanic Supervisor Department of Water $220,544 ------$I4,224
and Power
Los Angeles Fire Battalion Chief Los Angeles Fire $220,532 -----$13,368 Department
Los Angeles Fire Assistant Chief Los Angeles Fire $220,416 ------$I3,368 Department
Los Angeles Fire Battalion Chief Los Angeles Fire $220,203 ------$13,368 Department
Los Angeles Police Deputy Chief II Los Angeles Police $220,080 ------$I 2,592 Department
Power Engineering Los Angeles
Los Angeles Manager Department ofWater $2I9,956 --, --$I4,224
and Power
Los Angeles Fire Assistant Chief Los Angeles Fire $2 I 9,853 ------$I3,368 Department
Assistant General Los Angeles
Los Angeles Manager Water and Department of Water $219,707 " ----$I4,224
Power and Power
Los Angeles Fire Assistant Chief Los Angeles Fire $2I9,475 ------$I 3,368 Department
Executive Assistant Los Angeles
Los Angeles To The General Department of Water $2I9,293 ----, $I4,224
Manager and Power
Senior Load Los Angeles
Los Angeles Dispatcher Department of Water $219,006 --, --$14,224
and Power
Los Angeles Chief Assistant City Office of the City $2I 8,565 ----, $10,608 Attorney Attorney
2012-2013 LOS ANGELES COUNTY CIVIL GRAND JURY REPORT
C!TlES FISCAL HEALTH, GOVERNANCE AND MANAGEMENT
I ' , • •·•••··. 1•••·, .. ; >.;.·'f ,>, lr;:~.: •. :••••••f••ys, ··~······ ... '· ' I • ~\'i<:,;. \•) cue; .,/,.·· .•. ·.·••· /.
.··········.••·······
I', ;• ;, l\~~:i·.:~
Los Angeles Tmffie Manager Harbor $218,524 ------$10,608
Los Angeles Fire Battalion Chief :•o• s Fire $218,496 ---- --$1),368
Los Angeles Chief Electric Plant Los Angeles
$218,265 $14,224 Operator of Water ------
and Power
Los Angeles Electrical Service Los Angeles'""'
$218,227 $14,224 Manager """" ------
Los Angeles Police Captain Ill Los Angeles Police $218,151 ------$12,592
•& Los Angeles
Los Angeles District
and Power
of Water $217,817 ------$14,224
Los Angeles Police Lieutenant II Los Angeles Police $217,754 ------$12,592
". 1& Los Angeks
$217,601 Los Angeles District of Water ------$14,224
and Power
•& Los Angeles
Los Angeles i ofWater $217,397 ------$14,224
i and Power
Los Angeles Fire Battalion Chief o ; Fire $217,387 ------$13,368
Los Angeles
Cieneml Maneger Los Angeles Housing $217,272 $10,608 of ------
Housing Department
Los Angeles Fire lnspector I ;, ; Fi<e $216,998 ------$13,368
Electric Distribution Los Angeles
Los Angeles Mechanic Department of Water $216,822 ------$14,224
and Power
Los Angeles Fire Battalion Chief . Los Angeles Fire $216,707 ------$13,368
Los Angeles Electrical Distribution Los Angeles
$216,686 $14,224 Mechanic Supervisor of Water ------
and Power
Los Angeles Fire Captain 1 Los Angeles Fire $216,491 ------$13,368
Los Angeles Electric Distribution L"' Angeles
$216,461 $14.224 Mechanic a;dPower ofWater ------
Los Angeles Firefighter III Los Angeks Fire $216,368 -----$13,368
Electrical Distnbution Los Angeles
Los Angeles Mechanic Supervisor Department of Water $215,859 ----$14,224
and Power
Los Angeles Fire Battalion Chief Los Fire $215,824 $13,368 ------
Electrical Distribution Los Angeles
Los Angeles Mechanic Supervisor Department of Water $215,816 ------$14,224
and Power
Los Angeles Senior Load Los A~geks ofWatec $215,810 $14,224 Dispatcher -----
and Power
Los Angeles Electrical Distribution Los Angeles
$215,705 $14,224 Mechanic Supervisor and Power ofWatec ------
Los Angeles Fire Captain I Los Angeles Fire $215,666 ------$13,368
Los Angeles Fire Battalion Chief Los Angeles Fire $215,477 ------$13,368
Los Angeles Fire Battalion Chief 'Fire $215,382 $13,368 ------
2012-2013 LOS ANGELES COUNTY CIVIL GRAND JURY REPORT c -14
CITIES FISCAL HEALTH, GOVERNANCE AND MANAGEMENT
1:·--•_···-•r<··-•·•·•·'•• I c'( : ;·-•• i <·ji>iw;,_ •. ;._-. <:~: ti• ..•. > ;·· ••••••••• ._ .•.•..• <•;;·_-_.--.<;,.. 1··-·····.-·i ;~{i iii·····•······ < •. -•• · .. ·· .•..•.. _.·· .... .). .. ·.·.· .. 1·•-
Los Angeles City Librarian Library Department $215,285 --" " $10,608
Los Angeles Fire Assistant Chief Los Angeles Fire $215,243 " " " $13,368 Department
Electrical Distribution Los Angeles
Los Angeles Mechanic Supervisor Department of Water $215,112 " " " $14,224
and Power
Los Angeles Fire Battalion Chief Los Angeles Fire $215,102 " " " $13,368 Department
Los Angeles City Attorney Office of the City $215,015 " " " $10,608 Attorney
Transmission & Los Angeles
Los Angeles Distribution District Department of Water $214,989 " " " $14,224
Supervisor and Power
General Manager City City Employees Los Angeles Employees $214,864 " " " $10,608
Retirement System Retirement System
Los Angeles Police Lieutenant ll Los Angeles Police $214,833 --" " $12,592 Department
Electrical Service Los Angeles
Los Angeles Manager Department of Water $214,730 " " " $14,224
and Power
Senior Load Los Angeles
Los Angeles Dispatcher Department of Water $214,616 " " " $14,224
and Power
Los Angeles Fire Battalion Chief Los Angeles Fire $214,422 " " " $13,368 Department
Electric Distribution Los Angeles
Los Angeles Mechanic Department of Water $214,403 -" " $14,224
and Power
Transmission & Los Angeles
Los Angeles Distribution District Department of Water $214,394 " " " $14,224
Supervisor and Power
Electric Distribution Los Angeles
Los Angeles Mechanic Department of Water $214,318 " " " $14,224
and Power
Electrical Service Los Angeles
Los Angeles Manager Department of Water $214,124 " " " $14,224
and Power
Los Angeles Chief Assistant City Office of the City $213,852 -----$10,608 Attorney Attorney
Los Angeles Director of Finance Office of Finance $213,843 --" --$10,608
Los Angeles Fire Captain II Los Angeles Fire $213,447 ------$13,368 Department
Electrical Distribution Los Angeles
Los Angeles Mechanic Supervisor Department of Water $213,400 " --" $14,224
and Power
Los Angeles Police Sergeant II Los Angeles Police $213,268 ----" $12,592 Department
Los Angeles Mayor Mayor $213,020 --" " $10,608
Electric Distribution Los Angeles
Los Angeles Mechanic Department of Water $212,956 --" --$14,224
and Power
Electrical Repair Los Angeles
Los Angeles Supervisor Department of Water $212,836 " ----$14,224
and Power
Electrical Service Los Angeles
Los Angeles Manager Department ofWater $212,751 " ----$14,224
and Power
Los Angeles Senor Assistant City Office of the City $212,538 --" --$10,608 Attorney Attorney
Lns Angeles Police Deputy Chief II Los Angeles Police $212,457 Department ------$12,592
2012-2013 LOS ANGELES COUNTY CIVIL GRAND JURY REPORT C-IS
CITIES FISCAL HEALTH, GOVERNANCE AND MANAGEMENT
.)"!ti~)'i <i);•··· l.:.i ;.·;;.> c'f'·······~l······.··.····)············· ······
';
········•) ;~:· !'···············: . r;.• .•..... i••••···•···•·
.. 1 •.••••.•...•..••.•••... ·.•·•·>
···••··········. . ;,;
.'·!• . ·.•.·.···.· ·.
Electric Distribution Los Angeles
Los Angeles Mechanic Department of Water $212,456 '' " " $14,224
and Power
Electrical Distribution Los Angeles
Los Angeles Mechanic Supervisor Department of Water $212,379 -" " $14,224
and Power
Electric Distribution Los Angeles
Los Angeles Mechanic Department of Water $212,329 " " " $14,224
and Power
Electrical Distribution Los Angeles
Los Angeles Mechanic Supervisor Department of Water $212,265 " .. " $I4,224
and Power
Los Angeles Fire Captain l Los Angeles Fire $212,108 " " " $13,368 Department
Los Angeles Senor Assistant City Office of the City $212,073 " " " $10,608 Attorney Attorney
Electrical Distribution Los Angeles
Los Angeles Mechanic Supervisor Department of Water $2I2,0I4 " " " $14,224
and Power
Los Angeles Fire Battalion Chief Los Angeles Fire $212,001 " " " $13,368 Department
Los Angeles Fire Captain I Los Angeles Fire $211,843 " " " $13,368 Department
Los Angeles Fire Battalion Chief Los Angeles Fire $211,570 " " " $13,368 Department
Los Angeles
Los Angeles Rates Manager Department of Water $211,206 " " " $14,224
and Power
Electric Distribution Los Angeles
Los Angeles Mechanic Department of Water $211,193 " " " $14,224
and Power
Electrical Service Los Angeles
Los Angeles Manager Department of Water $21\,125 ,, " " $14,224
and Power
Electrical Service Los Angeles
Los Angeles Manager Department ofWater $211,006 " " " $14,224
and Power
Electrical Distribution Los Angeles
Los Angeles Mechanic Supervisor Department of Water $210,768 " " " $14,224
and Power
Executive Assistant Los Angeles
Los Angeles To The General Department of Water $210,747 " " " $14,224
Manager and Power
Senior Electrical Los Angeles
Los Angeles Mechanic Supervisor Department of Water $210,714 " , " $14,224
and Power
Senior Load Los Angeles
Los Angeles Dispatcher Department of Water $210,624 " " " $14,224
and Power
Chief Real Estate Los Angeles
Los Angeles Officer Department of Water $210,598 " " " $14,224
and Power
Los Angeles Fire Inspector I Los Angeles Fire $210,565 " " " $13,368 Depart~ent
Los Angeles Superintendent of Department of $210,368 " " " $10,608 Building Building and Safety
Electrical Distribution Los Angeles
Los Angeles Mechanic Supervisor Department of Water $210,338 " " " "
and Power
Los Angeles Police Captain IIl Los Angeles Police $210,310 " , " $12,592 Department
Electrical Service Los Angeles
Los Angeles Manager Department of Water $210,278 " " " $14,224
and Power
2012-2013 LOS ANGELES COUNTY CIVIL GRAND JURY REPORT c' 16
CITIES FISCAL HEALTH, GOVERNANCE AND MANAGEMENT
I\' , ....•.•.•• / '''i;z••·· ···;;. ii ;>·•Hi.t • ···,;.:r••·y '· ;;~}' ·~0') I'• :.;·, ··•• t···•··•·•·•··•·••·u .. "'' ······· ·. I}' ,. · .. ··. I·.·······. ii;. 1 ............
ti....... • ... ,.
Electrical Service Los Angeles
Los Angeles Manager Department of Water $210,014 ------$14,224
and Power
Deputy City Engineer Public Works
Los Angeles Department • Bureau $209,739 ------$10,608 II of Engineering
Electric Distribution Los Angeles
Los Angeles Mechanic Department of Water $209,653 ------$14,224
and Power
Los Angeles General Manager Zoo Zoo Department $209,585
.
$10,608 Department ------
Electrical Service Los Angeles
Los Angeles Manager Department of Water $209,489 ------$14,224
and Power
Los Angeles Fire Battalion Chief Los Angeles Fire $209,447 ------$13,368 Department
Los Angeles Fire Captain II Los Angeles Fire $209,376 ------$13,368 Department
Electrical Service Los Angeles
Los Angeles Manager Department of Water $209,122 ------$14,224
and Power
Los Angeles Fire Captain I Los Angeles Fire $209,046 ------$13,368 Department
Los Angeles Fire Captain 1 Los Angeles Fire $209,045 ------$13,368 Department
Electric Distribution Los Angeles
Los Angeles Mechanic Department of Water $208,768 ------$14,224
and Power
Electrical Service Los Atigeles
Los Angeles Manager Department ofWater $208,646 ---- ----
and Power
Los Angeles Fire Inspector 1 Los Angeles Fire $208,567 ------$13,368 Deoartment
Los Angeles Firefighter III Los Angeles Fire $208,561 ------$13,368 Department
Transmission & Los Angeles
Los Angeles Distribution District Department of Water $208,436 ------$14,224
Supervisor and Power
Electrical Distribution Los Angeles
Los Angeles Mechanic Supervisor Department of Water $208,342 ------$14,224
and Power
Electric Distribution Los Angeles
Los Angeles Mechanic Department of Water $208,270 ------$14,224
and Power
Los Angeles Fire Captain l Los Angeles Fire $207,998 ------$13,368 Department
Los Angeles Fireboat Mate Los Angeles Fire $207,843 ------$13,368 Deoartment
Electric Distribution Los Angeles
Los Angeles Mechanic Department of Water $207,818 ------$14,224
and Power
Electric Distribution Los Angeles
Los Angeles Mechanic Department of Water $207,796 ------$14,224
and Power
Los Angeles
Los Angeles Load Dispatcher Department of Water $207,456 ------$14,224
and Power
Los Angeles Fire Captain II Los Angeles Fire $207,275 ------$13,368 Department
Electrical Distribution Los Angeles
Los Angeles Mechanic Supervisor Department of Water $207,204 ------$14,224
and Power
Electric Distribution Los Angeles
Los Angeles Mechanic Department of Water $207,200 ------$14,224
and Power
2012-2013 LOS ANGELES COUNTY CIVIL GRAND JuRY REPORT c -17
CITIES FISCAL !·lEAL TH, GOVERNANCE AND MANAGEMENT
•if~,C~')'iX• t;r····••··•···· T >,;.,;. l·;}':t; \ ; ~:r• I ;( :;~~-';~~~ !,' ,•/\·········.• ... •..•. '';,•? }' \
'·.· . . .. I < ..••.... • .··:.
Electrical Distribution Los Angeles
Los Angeles Mechanic Supervisor Department of Water $207,141 ------$I4,224
and Power
Senior Load Los Angeles
Los Angeles Dispatcher Department of Water $206,962 ------$I 4,224
and Power
Electrical Distribution Los Angeles
Los Angeles Mechanic Supervisor Department of Water $206,905 ------$I4,224
and Power
Los Angeles Fire Battalion Chief Los Angeles Fire $206,87I ------$I 3,368 Department
Los Angeles Fire Captain II Los Angeles Fire $206,749 ------$13,368 Department
Senior Underground Los Angeles Distribution Los Angeles Construction Department of Water $206,720 ------$I4,224
Supervisor and Power
Electrical Distribution Los Angeles
Los Angeles Mechanic Supervisor Department of Water $206,69I ------$I4,224
and Power
Los Angeles Fire Assistant Chief Los Angeles Fire $206,662 ------$I 3,368 Department
Los Angeles Fire Captain 1 Los Angeles Fire $206,657 ------$13,368 Department
Electrical Distribution Los Angeles
Los Angeles Mechanic Supervisor Department of Water $206,640 ------$14,224
and Power
Los Angeles Firefighter III Los Angeles Fire $206,455 ------$13,368 Department
Los Angeles Fire Captain II Los Angeles Fire $206,344 ------$13,368 Department
Electric Distribution Los Angeles
Los Angeles Mechanic Department of Water $206,225 ------$14,224
and Power
Los Angeles Firefighter Ill Los Angeles Fire $205,957 ------$13,368 Department
Los Angeles Senor Assistant City Office of the City $205,926 ,, ----$10,608 Attorney Attorney
Los Angeles Police Deputy Chief IT Los Angeles Police $205,762 ------$12,592 Department
Electrical Distribution Los Angeles
Los Angeles Mechanic Supervisor Department of Water $205,739 ------$14,224
and Power
Los Angeles Fire Captain l Los Angeles Fire $205,681 ------$I 3,368 Department
Los Angeles Assistant Chief Council $205,343 --$10,608 Legislative Analyst ----
Los Angeles Fire Captain I Los Angeles Fire $205,290 ------$I3,368 Department
Los Angeles Fire Battalion Chief Los Angeles Fire $205,087 ------$13,368 Department
Los Angeles Firefighter III Los Angeles Fire $205,057 ------$13,368 Department
Electrical Distribution Los Angeles
Los Angeles Mechanic Supervisor Department ofWater $204,944 ------$14,224
and Power
Los Angeles Fire Battalion Chief Los Angeles Fire $204.909 ------$13,368 Department
Electric Distribution Los Angeles
Los Angeles Mechanic Department of Water $204,385 ------$14,224
and Power
Los Angeles Senor Assistant City Office of the City $204,355 ------$I0,608 Attorney Attorney
Los Angeles Electric Distribution Los Angeles $204,326 ----$14,224 Mechanic Department ofWater --
2012-2013 LOS ANGELES COUNTY CIVIL GRAND JURY REPORT c -18
CITIES FISCAL HEALTH, GOVERNANCE AND MANAGEMENT
I >··· . Yy
• •• •••••••••••••
i .•••••. ······.·---·:·.; • I .; , • '.·.·
!"~(· ~· •.•.. _ .....••••.
· ..... -._-._·······
..•.. i ' •
···.·.···-· .. _·-············-·· i.r<_.-•. -••·
j• . ;
1·---•-·-
1.··-.·· 7 I >
and Power
Electrical Distribution Los Angeles
Los Angeles Mechanic Supervisor Department of Water $204,306 ------$14,224
and Power
Los Angeles Police Deputy Chief IT Los Angeles Police $204,303 ------$12,592 Department
Los Angeles Senor Assistant City Office of the City $204,271 ------$10,608 Attorney Attorney
Electrical Distribution Los Angeles
Los Angeles Mechanic Supervisor Department of Water $204,245 --,, --$14,224
and Power
Electrical Distribution Los Angeles
Los Angeles Mechanic Supervisor Department of Water $204,218 ------$14,224
and Power
Electrical Distribution Los Angeles
Los Angeles Mechanic Supervisor Department of Water $204,033 ------$14,224
and Power
Los Angeles Police Commander Los Angeles Police $203,995 ------$]2,592 Department
Electric Distribution Los Angeles
Los Angeles Mechanic Department of Water $203,965 ------$14,224
and Power
Los Angeles Fire Battalion Chief Los Angeles Fire $203,826 ------$13,368 Department
Electrical Distribution Los Angeles
Los Angeles Mechanic Supervisor Department of Water $203,757 ------$14,224
and Power
Los Angeles Fire Battalion Chief Los Angeles Fire $203,556 ------$13,368 Department
Los Angeles Fire Assistant Chief Los Angeles Fire $203,554 ------$13,368 Department
Senior Underground Los Angeles Distribution Los Angeles Construction Department of Water $203,431 ------$14,224
Supervisor and Power
Los Angeles Fire Battalion Chief Los Angeles Fire $203,430 ------$13,368 Department
Electrical Distribution Los Angeles
Los Angeles Mechanic Supervisor Department of Water $203_371 ------$14,224
and Power
Los Angeles Fireboat Pilot Los Angeles Fire $203,193 ------$13,368 Department
Second Deputy
Los Angeles General Manager Harbor Department $203, I 03 ------$10,608
Harbor
Los Angeles Firefighter TIT Los Angeles Fire $203,049 " ----$13,368 Deoartment
Los Angeles Fire Battalion Chief Los Ai1geles Fire $203,031 ------$13,368 Department
Los Angeles Fire Battalion Chief Los Angeles Fire $203,022 -----$13,368 Department
Los Angeles Fireboat Mate Los Angeles Fire $202,827 ------$13,368 Department
Los Angeles
Los Angeles Load Dispatcher Department of Water $202,672 ----" $14,224
and Power
Electric Distribution Los Angeles
Los Angeles Mechanic Department of Water $202,472 ------$14,224
and Power
Electrical Distribution Los Angeles
Los Angeles Mechanic Supervisor Department ofWater $202,445 " --" $14,224
and Power
Los Angeles Steam Plant Operating Los Angeles $202,292 ------$14,224 Supervisor Department of Water
2012-2013 LOS ANGELES COUNTY CiVIL GRAND JuRY REPORT c -19
CITIES FISCAL HEALTH, GOVERNANCE AND MANAGEMENT
', ,, '',',, , .. ' ',' ic;, ,,.' ,, '',,,,,'',,',' .· i ······ ... . ' ... .·.·.
> . ·'··. . ' ,,;<. < · ...• ,, .•.•.......•..• , •. •.• },,,·,'.·, •. ·.•·,,) ... '. : .. I " . ·•· • i ' . • <,L••· ' .• , ·,······~ .. and Power
Los Angeles
Los Angeles Load Dispatcher Department ofWater $202,152 .. .. .. $14,224
and Power
Director Bureau of Public Works
Los Angeles Sanitation Department-Bureau $202,116 .. .. .. $10,608
of Sanitation
Los Angeles Chief Information Los Angeles World $202,078 $10,608 Officer Airoorts .. .. ..
Electric Distribution Los Angeles
Los Angeles Mechanic Department of Water $202,064 .. .. .. $14,224
and Power
Los Angeles Fire Captain II Los Angeles Fire $201,995 .. .. .. $13,368 Department
Electrical Distribution Los Angeles
Los Angeles Mechanic Supervisor Department of Water $201,969 .. .. $14,224
and Power
Los Angeles Senor Assistant City Office of the City $201,891 .. .. .. $10,608 Attorney Attorney
Electric Distribution Los Angeles
Los Angeles Mechanic Department of Water $201,719 .. .. .. $14,224
and Power
Los Angeles Fireboat Pilot Los Angeles Fire $201,663 .. .. .. $13,368 Department
Los Angeles Fire Battalion Chief Los Angeles Fire $201 ,640 .. .. .. $13,368 Department
Los Angeles Fire Battalion Chief Los Angeles Fire $201,619 .. .. .. $13,368 Department
Los Angeles Fire Captain l Los Angeles Fire $201,491 .. .. .. $13,368 Department
Electrical Distribution Los Angeles
Los Angeles Mechanic Supervisor D_epartrnent ofWater $201,421 .. .. .. $14,224
and Power
Electrical Distribution Los Angeles
Los Angeles Mechanic Supervisor Department of Water $201,342 .. .. .. $14,224
and Power
Los Angeles Fire Inspector l Los Angeles Fire $201,282 .. -.. $13,368 Department
Los Angeles Executive Assistant Office ofthe City $201,211 $10,608 City Attorney Attorney .. .. ..
Electric Distribution Los Angeles
Los Angeles Mechanic Department ofWater $201,122 .. .. .. $14,224
and Power
Electrical Distribution Los Angeles
Los Angeles Mechanic Supervisor Department of Water $201,081 .. .. .. $14,224
and Power
Electrical Distribution Los Angeles
Los Angeles Mechanic Supervisor Department of Water $201,042 .. .. .. $14,224
and Power
Electric Distribution Los Angeles
Los Angeles Mechanic Department of Water $200,935 .. .. .. $14,224
and Power
Los Angeles Fire Captain I Los Angeles Fire $200,912 -.. .. $13,368 Department
Los Angeles Fire Inspector l Los Angeles Fire $200,870 •· .. .. $13,368 Department
Electrical Service Los Angeles
Los Angeles Manager Department ofWater $200,811 .. .. .. $14,224
and Power
Electric Distribution Los Angeles
Los Angeles Mechanic Department of Water $200,786 .. .. .. $14,224
and Power
2012-2013 LOS ANGELES COUNTY CIVIL GRAND JURY REPORT c. 20
CITIES FISCAL HEALTH, GOVERNANCE AND MANAGEMENT
.···· •. i:······· > <
. .. · .. ···.·.·.·•·
.·.·• ': <;i;' .. ·· .. · ; > •
i '')'2····>·•·.·· ...... · ..
. ; ... ' ····•
1 ''t:'c k'•'· .............................. I' 1•·•···················· ...•.•. [;;·······( ' lt'·i;• ..
Electric Distribution Los Angeles
Los Angeles Mechanic Department of Water $200,723 ------$14,224
and Power
Electric Distribution Los Angeles
Los Angeles Mechanic Department of Water $200,64 I ------$14,224
and Power
Electrical Distribution Los Angeles
Los Angeles Mechanic Supervisor Department of Water $200,637 ------$14,224
and Power
Electrical Distribution Los Angeles
Los Angeles Mechanic Supervisor Department of Water $200,481 ------$14,224
and Power
Los Angeles Fire Inspector I Los Angeles Fire $200,326 ------$13,368 Department
Electrical Distribution Los Angeles
Los Angeles Mechanic Supervisor Department of Water $200,226 ------$14,224
and Power
Los Angeles Fire Assistant Chief Los Angeles Fire $200,210 ------$13,368 Department
Electric Distribution Los Angeles
Los Angeles Mechanic Department of Water $200,196 ------$14,224
and Power
Los Angeles Fire Battalion Chief Los Angeles Fire $200,177 ------$13,368 Department
Electric Distribution Los Angeles
Los Angeles Mechanic Department of Water $200,166 ------$14,224
and Power
Los Angeles Fire Battalion Chief Los Angeles Fire $200,163 ------$13,368 Department
Electric Distribution Los Angeles
Los Angeles Mechanic Department of Water $200,157 ------$14,224
and Power
Los Angeles Senor Assistant City Office of the City $200,133 ------$10,608 Attorney Attorney
Los Angeles
Los Angeles Load Dispatcher Department of Water $200,122 ------$14,224
and Power
Los Angeles Firefighter III Los Angeles Fire $200,018 ------$13,368 Department
La Mirada City Manager City Administration $211,713 $41,385 $13,723 $8,100 $20,210
Lancaster City Manager City Manager/ Admin $253,574 $23,276 $17,080 $32,941 $22,908
Lancaster Utility Services Public Works $207,063 $13,140 $9,615 $16,483 $11,178 Manager
Long Beach Executive Director-Harbor $319,151 $41,592 $18,850 $12,648 Harbor --
Long Beach City Manager City Manager $255,532 $32,690 $14,794 --$12,755
Long Beach City Attorney Law $252,597 $32,951 $7,383 --$13,055
Long Beach Assistant Executive Harbor $237,582 $3 I ,409 $14,311 $12,648 Director-llarbor --
Long Beach General Manager-Water $236,563 Water $30,998 $14,092 -$11,823
Long Beach Assistant City City Manager $234,958 $30,255 $13,685 --$12,930 Manager
Long Beach Firefighter Fire $222,616 $18,298 $5,387 --$10,106
Long Beach Firefighter Fire $218,564 $16,646 $4,895 --$10,106
Long Beach ChiefOfPolice Police $217,747 $42,593 $16,212 --$12,648
Long Beach Firefighter Fire $212,081 $17,714 $5,225 --$10,791
Long Beach Firefighter Fire $208,439 $16,947 $4,970 --$14,554
Long Beach Fire Captain Fire $201,500 $24,707 $7,261 --$1 I ,823
2012-2013 LOS ANGELES COUNTY CIVIL GRAND JURY REPORT C-21
CJTrES FISCAL HEALTH, GOVERNANCE AND MANAGEMENT
2012-2013 LOS ANGELES COUNTY CIVIL GRAND JuRY REPORT c-22
Pico Rivera
Pomona
Pomona
Redondo Beach
Redondo Beach
Redondo Beach
Redondo Beach
Redondo Beach
Redondo Beach
Redondo Beach
Rosemead
San Dimas
San Fernando
San Gabriel
Santa Clarita
Santa Clarita
Santa Fe Spi"ings
Santa Fe Springs
Santa Fe Springs
Santa Fe Springs
Santa Fe Springs
Santa Fe Springs
Santa Fe Springs
Santa Fe Springs
Santa Fe Springs
Santa Fe Springs
Santa Fe Springs
Santa Fe Springs
Santa Fe Springs
Santa Monica
Santa Monica
Santa Monica
Santa Monica
Santa Monica
Santa Monica
Santa Monica
Santa Monica
Santa Monica
Santa Monica
Assistant City
Manager
C1ty Manager
Police Chief
City Attorney
City Manager
Fire Captain
Fire Division Chief
Fire Chief
Fire Division Chief
Chief of Police
City Manager
City Manager
Police Chief
City Manager
City Manager
Assistant City
Manager
Fire Captain
Fire Captain
Fire Captain
Fire Captain
Ff/Paramedic II
Fire Captain
Fire Engineer
Fire Captain
Fire Engineer
Fire Captain
Division Chief
Division Chief~
Admin
Division Chief
City Manager
City Attorney
Assistant City
Attorney
Police Sergeant
Police Sergeant
Police Chief (As·
Needed)
Assistant City
Manager
Battalion Chief~
Suppression
Police Officer
Deputy Police Chief
Administration
Administration
Police
City Attorney
City Manager
Fire
Fire
Fire
Fire
Police
Administration
Administrative
Services
Police Department
Administration
City Manager Admin
City Manager Admin
Fire
Fire
Fire
Fire
Fire
Fire
Fire
Fire
Fire
Fire
Fire
Fire
Fire
City Manager-
Administration
City Attorney
City Attorney
Administrative
Services
Operations
Administrative
Services
City Manager-
Administration
Fire Suppression &
Rescue
Criminal
Investigations
Administrative
Services
CiTIES FiSCAL HEALTH, GOVERNANCE AND MANAGEMENT
$201,014 $575 $7,191 $818
$207,497 $24,869 $6,669 $9,300
$201,981 $55,966 $17,805 $9,300
$283,417 $33,394 $18,191 $14,352
$251,012 $30,149 $16,420 $9,719
$214,784 $44,389 $11,773 $13,473
$214,315 $61,694 $15,832 $13,473
$207,910 $69,313 $17,827 $9,719
$204,489 $6!,726 $15,859 $14,352
$201 ,294 $66,206 $16,961 $14,352
$215,408 $48,038 $14,544 $6,000 $15,339
$208,291 $27,919 $9,300 $2,400 $12,771
$278,841 $16,981 $26,376
$219,317 $42,114 $15,581 $1,277
$282,427 $30,188 $19,509 $16,500 $13,348
$230,579 $23,972 $15,482 $5,000 $13,541
$293,017 $57,753 $13,368 $3,895 $15,388
$235,244 $56,188 $13,006 $4,128 $16,822
$232,196 $51,955 $12,026 $3,813 $16,822
$226,557 $54,506 $12,616 $3,999 $16,822
$225,153 $43,428 $10,052 $3,184 $2,083
$224,314 $56,139 $12,994 $4,125 $16,822
$218,943 $46,052 $10,660 $16,822
$209,036 $51,740 $11,976 $3,740 $16,822
$206,445 $41,753 $9,664 $3,071 $17,024
$205,741 $54,510 $12,617 $3,999 $16,822
$205,306 $67,122 $15,615 $4,640 $16,822
$201,872 $64,650 $14,964 $4,672 $13,684
$201,853 $67,491 $15,622 $89 $11,344
$330,573 $53,088 $27,940 $19,716
$289,705 $45,522 $23,958 $19,716
$278,425 $43,884 $23,095 $19,716
$275,062 $55,113 $15,022 $16,670
$273,901 $52,688 $14,361 $16,214
$271,241 $94,647 $25,802 $19,716
$261,485 $41,388 $21,674 $15,439
$254,866 $35,433 $14,188 $12,631
$249,047 $39,944 $10,883 $16,214
$248,558 $85,364 $23,267 $1,166
2012-2013 LOS ANOELES COUNTY C!V1L GRAND JuRY REPORT c-23
CiTLES FISCAL HEALTH, GOVERNANCE AND MANAGEMENT
' '' ..•• _iii.l'' . ~,.·' ~f? ' s> ,":{!'"'-·.·1,-·''·· ·. ,;1 , ••··_··•·•-••,]'' ··-~
·•.· .··.·.· .. ··•_·.··. I '.•··.'.· .·.····-·· .·.···•··· <.·· •·•· <•1 .. ··.·-•••··•1 1'····•·-··· .•. ·· , ·''<' , ; CCS -Administrative Santa Monica rc . . $244,86 I $38,455 $20,045 $!9,716 Secvlce' "'' '"""'"' & Planning Services --
"' "' c;, rh of Flre-$244,380 $56,795 $23,318 --$19,716
Santa Monica Fne Captam -Flre 1& $241,148 $38,067 $15,725 --$!9,356 Re"ue.
Santa Monica :;;puty Clty Attorney City Attorney $238,788 $38,513 $20,362 -$19,716
Santa Monica lii .. , .. ; Attorney City Attorney $237,840 $37,305 $19,672 --$19,716
Santa Monlca Pohce Sergeant $235,684 $53,253 $14,515 --$7,490
Santa Monica ~:wcaptam ~;:cue' 1& $234,544 $38,823 $16,036 --$19,356
Santa Monica Flre Captaln -& $234,518 $38,823 $16,036 $19,356 Re"ue --
Santa Monica ~~puty Clty Attorney City Attorney $232,884 $38,921 $20,386 --$11,524
Santa Monica ~~puty Clty Attorney City Attorney $231,574 $37,267 $19,515 --$19,716
Santa Monica ~~puty Clty Attorney City Attorney $231,363 $36,110 $19,138 --$19,716
Santa Monica Flre Captain-~~:~ue' $230,687 $38,954 $16,049 --$19,356
Santa Monica ~~puty Clty Attorney City Attorney $230,245 $36,110 $19,138 --$14,635
Santa Manka Police Sergeant Crlrnlnal $229,822 $54,466 $14,845 --$16,214
Sauta Monlca PoJlce Se<geaut ' $228,308 $53,934 $14,675 --$16,214
Santa Monica ~?uty Clty Attorney City Attorney $228,283 $36,099 $18,983 --$19,716
Santa Monica Fire Captain -Fire Training $227,850 $38,973 $16,046 --$14,374 Prevention
Santa Monica ~;""'' ~"i Attorney City Attorney $226,412 $35,612 $18,645 --$19,716
Santa Monica -Fl<e & $226,345 $37,620 $15,541 $14,294 Re"ue --
Santa Monica ~t"'' '"' "'"' "'' City Attorney $226,274 $35,204 $18,620 --$19,716
Santa Monica Firefighter Fire Suppression & $225,819 $25,008 $10,299 --$8,159 Rescue
Santa Monica iii' 'Attorney City Attorney $225,665 $34,902 $18,448 --$19,716
Santa Monica ~:re Captalu-~;:cue & $225,230 $38,397 $15,830 $19,356 --
Santa Monica hre Engmeer -~~:;ue 1& $224,399 $29,514 $12,145 --$19,356
Santa Monica Flre Captmu -~~:c:ue 1& $223,236 $38,303 $15,802 --$19,356
Flre 1& Santa Monica Rescue $223,003 $37,751 $15,554 --$18,744
Santa Monica ~:puty Clty Attorney City Attorney $222,160 $34,150 $17,930 --$1,166
Santa Monica Director of Public nuu~ "'"'" $221,900 $34,686 $18,115 $6,811 Works --
Services
Santa Monica For~.:'"~~;~m -Fire-Administration $220,453 $37,914 $15,604 --Ill ,321
Santa Monica ~~puty Clty Attorney City Attorney $217,761 $34,298 $18,103 --$8,299
Sant<1 Monica Batta11ou Chlef-~;:;ue ] Y& $216,487 $41,133 $16,994 --$19,356
Santa Monica ~:puty City Attomey City Attorney $215,888 $34,298 $18,103 --$19,716 III
2012-2013 LOS ANGELES COUNTY CIVIL GRAND JURY REPORT C-24
CITIES FISCAL HEALTH, GOVERNANCE AND MANAGEMENT
I;";! ~~ L{'':;; iN~?\; y < ;:,:; i'• ;;,;;,, ,;;'·············· I ;:.;?'''' l·;·······_i: 1·•/,;. l·••·•i' ,i . < ;·.... . .. ,· .. · ..
• •• E . ····•·····
Santa Monica Deputy City Attorney City Attorney $215,752 $34,531 $I8,I17 --$6,049 lll
Santa Monica Police Captain Criminal $2I4,586 $77,048 $2I,OOO $I6,2I4 Investigations --
Santa Monica Fire Captain-Fire Suppression & $214,492 $36,922 $15,227 $I4,374 Suppression Rescue --
Director of Finance-Santa Monica Finance(Contr/Ci Administration $2I2,725 $34,435 $I8,064 --$15,439
Treas)
Santa Monica Fire Captain-Fire Suppression & $212,275 $36,525 $15,088 --$14,374 Suppression Rescue
Santa Monica Fire Captain M Fire Support Services $2I2,097 $38,116 $15,693 --$I0,736 Prevention
Santa Monica Director of Housing & Administration & $211,405 $33,280 $17,458 $11,524 Economic Dev Redevelopment --
Santa Monica Fire Captain ~ Fire Suppression & $211,377 $37,751 $15,554 --$19,356 Suppression Rescue
Santa Monica Fire Engineer" Fire Suppression & $209,2 I 8 $33,935 $13,970 --$13,762 Suppression Rescue
Santa Monica Deputy City Attorney City Attorney $207,849 $34,I64 $I7,937 --$19,716 III
Santa Monica Police Captain Operations $207,754 $74,841 $20,371 --$14,707
Santa Monica Battalion Chief~ Fire Training $205,808 $40,519 $16,690 $11,321 Prevention --
Santa Monica Fire Captain " Fire Suppression & $205,654 $37,574 $15,474 --$19,356 Suppression Rescue
Santa Monica Fire Inspector Fire Prevention $205,617 $29,840 $I2,289 --$14,374
Santa Monica Fire Captain" Fire Suppression & $204,845 $34,708 $14,344 --$14,294 Suppression Rescue
Santa Monica Fire Captain ~ Fire Suppression & $204,288 $35,852 $14,808 --$I4,374 Suppression Rescue
Santa Monica Deputy Fire Chief Fire~ Administration $202,875 $47,582 $19,552 --$15,943
Santa Monica Battalion Chief~ Fire¥ Administration $202,774 $44,274 $18,203 $14,374 Prevention --
Santa Monica Police Sergeant Criminal $202,306 $54,466 $14,845 $I6,214 Investigations --
Santa Monica Fire Engineer-Fire Suppression & $20I,951 $30,187 $I2,443 --$I9,356 Suppression Rescue
Santa Monica Police Captain Special Enforcement $201,945 $72,295 $19,686 --$12,399
Santa Monica Fire Captain -Fire~ Administration $201,130 $35,340 $14,528 --$I5,164 Prevention
Signal Hill City Manager Program $229,249 $28,236 $6,066 $I4,153 $11,740 Administration
Temple City City Manager Management Services $217,593 $28,505 $13,776 --$15,990
Torrance Manager, City City Manager $340,897 $33,851 $18,787 $1,342 $9,539
Torrance Attorney, City City Attorney $297,579 $33,675 $18,689 --$9,539
Torrance Fire Chief Fire $276,351 $90,993 $20,137 $1,119 $I2,131
Torrance Police Captain Police $267,043 $101,198 $19,789 --$II,872
Torrance Police Chief Police $261,026 $108,726 $2I ,286 $I,I83 $]] ,710
Torrance Police Lieutenant Police $254,228 $78,674 $15,390 $902 $15,334
Torrance Deputy Fire Chief Fire $251,493 $84,188 $I8,614 --$14,324
Torrance Assistant City City Manager $248,03I $28,305 $I5,709 $1,122 $12,13I Manager
Torrance Police Lieutenant Police $247,136 $81,216 $15,887 $863 $15,334
Torrance Fire Chief, Battalion Fire $240,358 $71,284 $15,727 $1,644 $14,797
Torrance Police Captain Police $239,604 $9I,400 $17,876 --$14,324
2012-2013 LOS ANGELES COUNTY CIVIL GRAND JURY REPORT c-25
Torrance
Torrance
Torrance
Torrance
Torrance
Torrance
Torrance
Torrance
Torrance
Torrance
Torrance
Torrance
Torrance
Torrance
Torrance
Torrance
Torrance
Torrance
Torrance
Torrance
Torrance
Torrance
Torrance
Vernon
Vernon
Vernon
Vernon
Vernon
Walnut
West Covina
West Covina
West Covina
West Covina
West Covina
West Covina
West Hollywood
West Hollywood
West Hollywood
Police Lieutenant
Police Captain
Police Captain
Police Sergeant
Public Works Director
Fire Chief, Battalion
Community
Development Director
Police Sergeant
Finance Director
Police Officer
Fire Chief, Battalion-
40Hr
Police Sergeant
Police Captain
Fire Engineer
Fire Captain
Information
Technology Director
Police Lieutenant
Police Sergeant
Police Officer
Fire Captain
Police Lieutenant
Police Sergeant-! Yr
Lat Credt
Police Lieutenant
Finance Director
Chief Deputy City
Attorney
Director Of
Community Services
& Water
Fire Chief
Engineering Manager
City Manager
City Manager
Assistant Fire Chief
Assistant Fire Chief
Assistant Fire Chief
Police Chief
Officer .
City Manager
Executive Coordinator
of Development
Director of Finance &
Technician
Police
Police
Police
Police
Public Works
Fire
Community
Development
Police
Finance
Police
Fire
Police
Police
fire
Fire
Communication &
Info Systems
Police
Police
Police
Fire
Police
Police
Police
Finance
City Attomey
Administrative,
Engineering &
Planning
Fire
L&P Engineering
Administration
City Manager
Fire
Fire
Fire
Police
Police
City Manager
Assistant City
Manager
Finance
Administration
CinES FISCAL HEALTH, GOVERNANCE AND MANAGEMENT
$237,965 $79,452 $15,541 $942 $5,973
$233,873 $88,531 $17,300 $14,744
$230,268 $91,399 $17,876 $14,744
$230,200 $69,400 $13,576 $1,020 $5,980
$229,937 $26,403 $14,653 $1,047 $5,220
$229,614 $66,500 $14,656 $1,644 $15,458
$229,498 $24,068 $13,357 $954 $12,131
$229,271 $67,373 $13,174 $1,020 $14,723
$226,101 $24,291 $13,481 $963 $12,131
$223,133 $56,635 $11,059 $1,020 $14,723
$221,462 $76,172 $16,812 $1,644 $15,458
$219,323 $59,326 $11,603 $1,020 $13,967
$219,060 $76,700 $14,979 $667 $5,980
$209,786 $53,740 $11,856 $1,644 $8,054
$209,129 $62,093 $13,699 $1,644 $11,127
$206,835 $21,311 $11,827 $12,131
$206,731 $78,449 $15,338 $588 $15,334
$206,359 $58,122 $11,371 $1,020 $14,723
$204,688 $52,643 $10,252 $1,020 $14,723
$203,821 $63,202 $13,944 $],644 $14,723
$203,715 $74,081 $14,466 $1,020 $15,334
$201,051 $62,002 $12,118 $1,020 $14,723
$200,975 $68,707 $13,434 $1,020 $14,723
$278,612 $40,863 $12,600
$237,589 $64,598 $12,600
$228,432 $32,797 $12,600
$222,956 $58,807 $12,600
$205,558 $24,600 $12,675
$214,172 $22,071 $13,765 $15,000
$282,740 $26,714 $9,634 $2,918 $27,174
$249,567 $49,294 $14,479 $6,592 $13,900
$244,530 $48,975 $14,397 $6,551 $15,272
$235,813 $49,540 $14,566 $6,627 $13,900
$217,147 $54,847 $16,126 $7,335 $6,044
$202,541 $29,366 $8,620 $3,418 $11,108
$304,904 $48,408 $23,975 $13,760 $15,887
$276,859 $1,341 $727 $975 $424
$208,181 $30,937 $15,318 $1,800 $6,763
2012-2013 LOS ANGELES COUNTY CIVIL GRAND JURY REPORT c-26
CITIES FISCAL HEALTH, GOVERNANCE AND MANAGEMENT
West Hollywood
West Hollywood
Westlake Village
Whittier
Housing Manager
Director of Human
Services
City Manager
City Manager-
Provisional
$205,383
Department of Human
Services & Rent $200,120
Stabilization
Administration $213,508
City Manager $219,052
$22,73 I $11,389 $I,575 $5,918
$30,937 $15,3I8 $1,800 $II,89I
$25,509 $I5,772 $6,324 $17,174
$38,290 $8,689 $10,222 $16,425
Source. California State Controller's Office "Government Compensation in California." (http://publicpay.ca.gov)_ The information presented is
osted as submitted by the reportin entity. The State Controller's Office is not res onsible for the accuracy of this information
2012-2013 LOS ANGELES COUNTY CIVIL GRAND JURY REPORT C-27
CITIES FISCAL HEALTH, GOVERNANCE AND MANAGEMENT
APPENDIX D: PROGESS IMPLEMENTING PRIOR RECOMMENDATIONS
Appendix D: Progress Implementing Prior Recommendations
City Implementation Complete Implementation In-Leadership
Process Considering
• Implemented a Revenue and
Expenditure Management
Policy
• Amended General Fund
Reserve Policy and increased
the reserve amount
• Established a formal audit
Alhambra committee
• Adopted a policy for updating
accounting policies and
procedures
• Adopted a formal fraud
reporting policy to provide a
mechanism for confidential and
anonymous reporting
• Developing Five-Year • Establishing a formal
financial plan audit committee
• Development of a
strategic plan
• Development of
performance measures
Arcadia • Updating financial
policies and procedures
• Updating fraud
reporting policies and
procedures
• Developing a General
Fund Reserve policy
• Adopted budget policies
• Adopted a five-year financial
forecast
• Adopted a General Fund
Bell reserve policy
• Developed workload measures
as a preliminary step toward
developing performance
measures
2012-2013 LOS ANGELES COUNTY CIVIL GRAND JURY REPORT D-1
CITIES FISCAL HEALTH, GOVERNANCE AND MANAGEMENT
Appendix D: Prof(ress lmplementinf( Prior Recommendations
City Implementation Complete Implementation In-Leadership
Process Considering
• Establishing a formal Cerritos audit committee
• Developing a strategic • Establishing a formal
plan audit committee Compton • Developing
performance measures
• Developing a General Downey Fund reserve policy
• Post audited financial • Long term financial • Establishing a formal
statements on the City's plan audit committee
website. • Two year budget
• Strategic plan
• Performance indicators
Industry • Accounting policies
and procedures
• Fraud reporting policies
and procedures
• General Fund reserve
policy
• Fraud reporting policies • Establishing the
Irwindale and procedures entire City Council as
the formal audit
committee
• Establishing a formal Palmdale audit committee
• Increased the unassigned • Established a fraud • Multi-year budget
General Fund reserve goal to reporting hot line
Pasadena 20% • Reviewing and
updating financial
policies and procedures
• Policy to monitor the review
Pomona and update of financial policies
and procedures
• Increased General Fund • Establish a formal audit
Reserve committee
Santa Review of financial • Monica policies and procedures
every three years
2012-2013 LOS ANGELES COUNTY ClVIL GRAND JURY REPORT D-2
CITIES FISCAL HEALTH, GOVERNANCE AND MANAGEMENT
Appendix D: Progress Implementing Prior Recommendations
City Implementation Complete Implementation In-Leadership
Process Considering
• Establish a formal audit • Developing a two-
committee year budget
Signal Hill • Policy providing for the
routine change of
independent auditor
• Develop a 2 year budget • Review financial • Establish a formal
• Develop a General Fund policies and procedures audit committee
Temple Reserve Policy every three years • City • Develop a strategic plan • Develop fraud reporting
• Develop performance indicators policies
• Establishing the
Whittier entire City Council as
the formal audit
committee
2012-2013 LOS ANGELES COUNTY CIVIL GRAND JURY REPORT D-3
CITIES FISCAL HEALTH, GOVERNANCE AND MANAGEMENT
2012-2013 LOS ANGELES COUNTY CiVIL GRAND JuRY REPORT D -4
ATTACHMENT B
9701 LAS TUNAS DRIVE o TEMPLE CITY o CALIFORNIA 91780-2249 o (626) 285-2171
November 13, 2013
Ms. Nancy Coleman
Clara Shortridge-Foltz Criminal Justice Center
Presiding Judge of the Los Angeles Superior Court
Los Angeles County Civil Grand Jury
210 West Temple Street, Room 11-506
Los Angeles, CA 90012
RE: Response to "CITIES OF LOS ANGELES COUNTY, Fiscal Health, Governance,
Management and Compensation"
Dear Ms. Coleman:
This correspondence 1s 1n response to the "CITIES OF LOS ANGELES COUNTY,
Fiscal Health, Governance, Management and Compensation".
RECOMMENDATIONS-FISCAL HEALTH
1. Cities should adopt financial planning, revenue and expenditure policies to guide city
officials to develop sustainable, balanced budgets.
The City agrees with this recommendation and will adopt financial planning,
revenue and expenditure policies to guide the City of Temple City officials to
develop sustainable, balanced budgets.
2. Cities should develop a balanced budget and commit to operative within the budget
constraints.
The City agrees with this recommendation and has developed a balanced
budget for the Fiscal Year (FY) 2013-14, and plans to continue this practice in
the future. The City is also committed to operating within the budget
constraints.
3. Cities should not use one-time revenues to fund recurring or on-going expenditures.
The City agrees with this recommendation and does not use one-time
revenues to fund recurring or on-going expenditures.
4. Cities should adopt a method and practice of savings into a reserve or "rainy day"
fund to supplement operating revenue in years of short fall.
The City agrees with this recommendation and on June 5, 2012, adopted an
ordinance requiring budget reserve fund balance requirements. The adopted
ordinance is attached.
RECOMMENDATIONS-FINANCIAL MANAGEMENT
1. Cities should formally establish an audit committee making it directly responsible for
the work of the independent auditor.
The City agrees with this recommendation however will further analyze
implementation. The City currently has a City Council appointed Budget Ad
Hoc Committee (i.e., Mayor and Council member) that provides guidance on
financial management practices. Staff will discuss this recommendation
further with the City Council Budget Ad Hoc Committee for a final
recommendation to the City Council.
2. Cities that do not currently select the auditor through a competitive process should
do so.
The City agrees with this recommendation and selects the auditor through a
competitive process.
6. Cities should review and update policies and procedures for reporting fraud, abuse
and questionable practices including a practical mechanism, such as a fraud hot
line, to permit the confidential, anonymous reporting of concerns.
The City agrees with this recommendation and will adopt policies and
procedures for reporting fraud, abuse and questionable practices including a
practical mechanism, such as a fraud hotline, to permit the confidential,
anonymous reporting of concerns.
8. Cities should undertake a full-scale competitive process every 5 years for the
selection on an independent external auditor.
The City agrees with this recommendation and will undertake a full-scale
competitive process at least every 5 years for the selection of an independent
external auditor. The current audit firm has been auditing the City of Temple
City since the FY 2010-11.
If you have any other questions, please do not hesitate to contact me.
Sincerely,
~=-=c)=:~~~~
Tracey L. Hause
Administrative Services Director
Attachment: Ordinance No. 12-953
C: Jose E. Pulido, City Manager
ORDINANCE NO. 12-953
AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF TEMPLE
CITY, CALIFORNIA, ADDING A NEW CHAPTER 10 "BUDGET
RESI;RVE FUND BALANCE REQUIREMENTS" TO TITLE 2
"ADMINISTRATION" OF THE TEMPLE CITY MUNICIPAL CODE.
WHEREAS, to ensure adequate fiscal resources and stable delivery of City services during
emergencies, fiscal emergencies , annual revenue fluctuation, liquidity shortages, or severe economic
downturns, the City desires to establish a General Fund reserve requirements, and;
WHEREAS, to ensure fiscal prudence and responsibility the City desires to also
establish criteria for use of General Fund reserves; and
WHEREAS, the City desires to adopt these requirements and criteria by Ordinance
and codify its provisions in the City of Temple City Municipal Code.
NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF TEMPLE CITY HEREBY
ORDAINS AS FOLLOWS:
SECTION 1. Addition of Chapter 10 to Title 2 of the Temple City Municipal Code. The
City Council hereby adds a new Chapter 1 D " Budget Reserve Fund Balance Requirements ) to Title 2
"Administration' of the Temple City Municipal Code, which shall read as follows:
Chapter 10
BUDGET RESERVE FUND BALANCE REQUIREMENTS
2550: PURPOSE
2560: DEFINITIONS
2570: BUDGET RESERVE FUND BALANCE TARGETS
2550: PURPOSE
The primary purpose of this Chapter is to ensure adequate fiscal resources and stable delivery of City
services during emergencies, fiscal emergencies, annual revenue fluctuations, liquidity shortages, or
severe economic downturns so that in the event of these occurrences the City is able to continue
providing essential city services and satisfying expenditure obligation. The secondary purpose of this
Chapter is to enable realistic long-term planning, assist in development of annual budgets, require the
prudent use of resources, and to implement of sound fiscal management practices. To achieve these
purposes, this Chapter requires the City to:
1. Establish adequate reserves.
2. Establish sound fiscal reserve requirements.
3. Ensure the City satisfies its short-term and long-term financial obligations.
4. Establish a periodic review of the City's fund balances and reserves.
5. Enhance the City's credit rating.
To achieve the purposes of this Chapter it is contemplated that the City will establish various Budget
Reserve Fund Balance accounts facilitating funding of emergencies, contingencies, liabilities and
planned major capital projects ..
1
2560: DEFINITIONS
For the purposes of this Chapter 10, the following terms shall have the following meanings:
(a) "Emergency" shall mean, in accordance with Section 2701, the actual or threatened
existence of conditions of disaster or of extreme peril to the safety of persons and property within
the city caused by such conditions as air pollution, fire, flood, storm, epidemic, riot or earthquake,
or other conditions, including conditions resulting from a labor controversy, which conditions are
or are likely to be beyond the control of the services, personnel, equipment and facilities of the
city, requiring the combined forces of other political subdivisions to combat.
(b) "Fiscal Emergency" shall mean the occurrence of any one or more of the following:
(1) the existence of a default on a debt obligation for more than thirty days, or the
reasonable probability that the City will default on a debt obligation, or that the City will
not be able to cure a default on a debt obligation within thirty days;
(2) the existence of a failure for lack of funds to make payment of all payroll to officials,
officers, or employees of the municipal corporation for more than one payment cycled ;
(3) the existence of a condition in which accounts due and payable at the end of the
preceding fiscal year, Jess the year-end balance, exceeded one-twelfth of the available
revenues during the preceding fiscal year;
(4) the existence of a condition in which the aggregate of deficit amounts of all deficit
funds at the end of the preceding fiscal year, less the year-end balance, exceeded one-
twelfth of the total of the general fund budget for that year and the receipts to those deficit
funds other than from transfers from the general fund;
(5) the existence of a condition in which, at the end of the preceding fiscal year, moneys
and marketable investments in or held for the unsegregated treasury of the municipal
corporation, minus outstanding checks and warrants, were less than the aggregate of the
positive balances of the general fund and those special funds whose purposes the
unsegregated treasury meets, and such deficiency exceeded one-twelfth of the total
amount received into the unsegregated treasury during the preceding fiscal year.
(c) "Economic Stabilization Reserve" shall mean, as provided in GASB 54 (Governmental
Accounting Standards Board), an identified fund for which the specified purpose is stabilizing the
delivery of city services during periods of operational deficits resulting from deferral of federal,
state, or county remitlance and which may also be used as a short-term bridge from unexpected
and drastic downturns in the economy. Pursuant to GASB 54 stabilization is regarded as a
specified purpose only if the circumstances or conditions that signal the need for stabilization (a)
are identified in sufficient detail and (b) are not expected to occur routinely.
2570: MINIMUM BUDGET RESERVE FUND BALANCE
The City will maintain combined General Fund reserves as follows:
2
(a) Emergency/Disaster Reserve-$1,000,000.
(1) Use of these funds is allowable only when the following conditions have been met: {i)
The City Council has declared the existence of either an "Emergency' or "Fiscal
Emergency'; and (ii) The use of the reserve has been approved by 4/51h vote of the
membership of the City Council.
(2} Within 6 months after the Council's determination in paragraph (1) above the City
Manager shall present a plan to the City Council to replenish this fund.
(3} If all or a portion of the Reserve is utilized, the Reserve will be restored to the original
level as adopted within the next five years or whenever reasonably possible.
(b) Liquidity Reserve -$2,000,000.
(1) Funds are to be set-aside to provide cash flow for timing of revenues and
expenditures. For example, while payroll costs are bi-weekly and fairly predictable, state
and county tax payments can vary. The City may also from time to time have major
projects that are grant funded on a reimbursement basis that require large cash outlays.
A "Liquidity Reserve' is established to provide the cash-an-hand needed in between large
revenue payments and grant reimbursements and will alleviate the need for short-term
borrowing.
(2} If all or a portion of the Reserve is utilized, the Reserve will be restored to the original
level as adopted within the next five years or whenever reasonably possible.
(c) Local Economic Uncertainty Reserve-$500,000
(1) Funds :are to be set aside for the purpose of stabilizing the delivery of City services
during periods of operational budget deficits resulting from the conditions as described in
the definition above "Economic Stabilization Reserve.
(2) Use of the funds are allowable only when the City Council, upon the 4/51h vote of its
membership, has approved the use of the fund.
(3) If all or a portion of the Reserve is utilized, the Reserve will be restored to the original
level as adopted within the next five years or whenever reasonably possible
(d) Other Reserve Designations. The City Council may at any time designate specific fund
balance levels for future development of projects which it has determined to be in the best
long-term interests of the City.
(e) The City Manager must include a recommendation for the amounts to be appointed to
these reserves during the annual budget process.
SECTION 2. Severability. The City Council hereby declares that, should any provision, section,
subsection, paragraph, sentence, clause, phrase, or word of this Ordinance or any part thereof, be rendered
or declared invalid or unconstitutional by any final court action in a court of competent jurisdiction or by
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reason of any preemptive legislation, such decision or action shall not affect the validity of the remaining
section or portions of the Ordinance or part thereof. The City Council hereby declares that it would have
independently adopted the remaining provisions, sections, subsections, paragraphs, sentences, clauses,
phrases, or words of this Ordinance irrespective of the fact that any one or more provisions, sections,
subsections, paragraphs, sentences, clauses, phrases, or words may be declared invalid or unconstitutional.
SECTION 3. Publication. The City Clerk shall certify to the passage and adoption of this
Ordinance and to its approval by the Mayor and shall cause the same to be published according to law.
PASSED, APPROVED, AND ADOPTED this 5th day of June, 2012. ~
V_t aJJft{~e--;()
ATTrfT:
-~~M) Deputy Ci e
I, Peggy Kuo, Deputy City Clerk of the City of Temple City, hereby certify that the foregoing Ordinance No.
12-953 was introduced at the regular meeting of the City Council of the City of Temple City held on the 15'h
day of May, 2012 and was duly passed, approved and adopted by said Council at the regular meeting held
on s'" of June, 2012 by the following vote:
AYES:
NOES:
ABSENT:
Councilmember-Bium, Chavez, Vizcarra, Stemquist
Councilmember-None
Councilmember-Yu
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