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HomeMy Public PortalAbout11_10C_CAFR_ Staff Report - CAFR2020-Final w attachmentsADMINISTRATIVE SERVICES DEPARTMENT MEMORANDUM DATE: January 19, 2021 TO: The Honorable City Council FROM: Bryan Cook, City Manager By: Susan Paragas, Administrative Services Director SUBJECT: COMPREHENSIVE ANNUAL FINANCIAL REPORT FOR THE YEAR ENDED JUNE 30, 2020 RECOMMENDATION: It is recommended that the City Council consider the recommendation from the Audit Standing Committee to receive and file the following reports: 1.Comprehensive Annual Financial Report (CAFR) for the year ended June 30, 2020 (Attachment “A”); 2. Independent Auditor’s Communication to the City (Attachment “B”); 3.Independent Accountants’ Report on Applying Agreed-Upon Procedures Related to the Article XIII-B Appropriations Limit Calculation (Gann Limit) (Attachment “C”); and 4.Independent Auditor’s Report on Internal Control over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in accordance with Government Auditing Standards (Attachment “D”) BACKGROUND: 1.In November 1979, Proposition 4 was approved by the voters adding Article XIIIB, also known as the Gann Limitation, to the State Constitution to ensure that limits were placed on all state and local government appropriations. These appropriations calculations must be approved by the City Council on an annual basis. 2.In June 1990, the voters of California approved Proposition 111 which revised the annual adjustment factors applied to the limit and each year thereafter. AGENDA ITEM 10.C. City Council January 19, 2021 Page 2 of 6 3. On June 18, 2019, the City Council adopted Resolution No. 19-5401 confirming the factors used for calculating the annual appropriations limit for the Fiscal Year (FY) 2019-20 City Budget. 4. On October 1, 2020, the Administrative Services Department received notice from the Government Finance Officers’ Association (GFOA) that the City was awarded a certificate from the GFOA’s Excellence in Financial Reporting Award program for its FY 2018-19 CAFR. 5. On, December 18, 2020, the Audit Standing Committee (i.e. Mayor Chavez and Mayor Pro Tem Yu) met with City staff and audit staff from Eide Bailly, LLP (EideBailly) and discussed the results of the field work and audit. ANALYSIS: Financial Reporting A CAFR is a set of United States government financial statements comprising the financial report of a state, municipal or other governmental entity that complies with the accounting requirements, (i.e., Generally Accepted Accounting Principles (GAAP)), created and circulated by the Governmental Accounting Standards Board (GASB). The CAFR accounting structure provides for standardization of financial reporting. All levels of government including federal, state, local and municipal, produce a CAFR to document an accurate picture of institutional funds, enterprise or financial holdings, assets and total investment incomes for those government and nongovernmental entities using the report, see Attachment A. Single Audit As a recipient of federal grant funds in past years, the City has been required to be in compliance with the requirements of the Office of Management and Budget Circular A-133, Audits of States, Local Governments and Non-Profit Organizations. The process, to ensure that the City is in compliance with this Circular, is commonly known as the “Single Audit”. For FY 2019-20, the City federal grant expenditures were less than $750,000, therefore, a Single Audit was not required. Auditors The auditors from EideBailly provided a communication letter AU-C260 to convey to the City Council (Council) matters related to the financial statement audit that are, in the auditors’ professional judgment, significant and relevant to the responsibilities of the Council in overseeing the financial reporting process, see Attachment B. Gann Limit and Other Reports Article XIII-B (Gann Limit) provides limits to the amount of tax proceeds state and local governments can spend each year. The limit for any fiscal year is equal to the previous City Council January 19, 2021 Page 3 of 6 year’s limit, adjusted for population changes and the change in the U.S. Consumer Price Index or California per capital personal income, whichever is less. A review of the City’s calculations is required by State law and is included as Attachment C. In addition, the auditors are required by the Statement of Auditing Standards (SAS) to prepare independent report on internal controls over financial reporting and a schedule of findings and responses. There were two findings in the auditor’s report on internal controls, but are easily remedied. The first one was due to the timing of the recording of transactions made in July when it should have been in June. It was made a finding because it understated the cash balance by about $111,000 which was due to the accrued payroll being understated by $56,000 and expenses were overstated by $55,000 for the audited year. The second finding was related to the Successor Agency’s bond accrued interest payable account for about $5,000 that was not recorded and a correction to the recognition of a $139,000 receivable in Measure W that will not be received for FY 2019-20. We will modify our year-end processes to record these type of transactions appropriately, see Attachment D. Audit EideBailly issued an unmodified (“clean”) opinion on the City financial statements for the year ended June 30, 2020. The City also provides a narrative introduction, overview and analysis of the CAFR in the form of Management’s Discussion and Analysis (MD&A). It can be found immediately following the independent auditors’ report. The City’s net position decreased by $0.9 million from $71.2 million as of June 30, 2019, to $70.3 million as of June 30, 2020, primarily resulting from liability increases due to a $3.1 million rise in payables, other post-employment benefits (OPEB) and pension liabilities but were offset with a $1.9 million increase in cash and investments. The total revenue from all sources was $21.5 million which is a decrease of $0.2 million from prior year due to the effect of the coronavirus (COVID-19) pandemic. The total cost of all City programs was $22.4, an increase of $3.3 million mainly due to project outlays. The City’s total long-term liabilities increased by $2.2 million to $17.5 million during the current fiscal year as the key factors in this increase were rise in the pension liability and the OPEB liability as mentioned above. The General Fund (GF) revenues of $15.49 million exceeded GF expenditures of $15.46 million, thus, providing an excess of revenues over expenditures by almost $33,500. Further, after the net transfers in of $20,500 from other financing sources, the GF realized a net increase in fund balance of $53,966. Primary revenue sources for the GF are sales taxes, property taxes and motor vehicle in lieu taxes. The GF is responsible for general services of the City which includes public safety, public works, community development, community services and administration. The largest expenditure is for public safety, which was $5.47 million for FY 2019-20. City Council January 19, 2021 Page 4 of 6 The Pension and OPEB liabilities are two key factors that could significantly impact the City’s long-term liabilities due to the sensitivity of the discount rates that are applied to each of the plans’ assets. A discount rate is the long-term expected rate of return. Currently, Pension assets use a discount rate of 7.15%. The table below reflects how sensitive the City’s proportionate share of the net pension liability is impacted when the discount rate is 1% lower or 1% higher. Disc Rate (-1%) Current Disc Rate Disc Rate (+1%) (6.15%) (7.15%) (8.15%) City’s Proportionate Share of Net Pension Liability $12.92 million $8.59 million $4.51 million OPEB assets use a discount rate of 3.52%. The table below reflects how sensitive the City’s net OPEB liability is impacted when the discount rate is 1% lower or 1% higher. Disc Rate (-1%) Current Disc Rate Disc Rate (+1%) (2.52%) (3.52%) (4.52%) City’s Net OPEB Liability $10.57 million $8.64 million $7.13 million GFOA Excellence in Financial Reporting Award Staff submitted the FY 2019-20 CAFR to the GFOA for the Excellence in Financial Report Award and is awaiting the result. As mentioned above, the City was awarded a certificate from the GFOA’s Excellence in Financial Reporting Award program for the City’s FY 2018- 19 CAFR. The GFOA recognizes innovative programs, contributions to the practice of government finance that exemplify outstanding financial management. The award stresses practical, documented work that offers leadership to the profession and promotes improved public finance. Audit Standing Committee For greater transparency and accountability, the City Council appointed an Audit Standing Committee (Committee), making it directly responsible for monitoring the work performed by the independent auditor. As outlined in the Audit Committee Charter, also adopted by the City Council, the responsibilities of the Audit Standing Committee include: • Assisting the City Council in monitoring, overseeing and assessing the City’s:  Accounting and financial reporting processes; City Council January 19, 2021 Page 5 of 6  Quality and integrity of the City’s financial statements, including audits of the financial statements;  Qualifications, independence and performance of the independent auditor;  Compliance with applicable legal and regulatory financial accounting requirements; and  Management’s ability to evaluate adequacy of internal controls and capably identify and control risks posed by its current and planned activities. • Providing an avenue for communication among the independent auditors, City management and the City Council. The Committee also has such other duties as set forth in this charter and as directed by the City Council. The Committee met on December 18, 2020 to discuss the result of the audit, thus, completing their due diligence as outlined in the Committee Charter and has brought forward their recommendation to receive and file the CAFR for the year ended June 30, 2020. Additional Information Towards the last four months of FY 2019-20, City revenues were mainly affected by the health order restrictions caused by the COVID-19 pandemic. Services were limited mainly to restaurants, retail stores and lodging and affected City revenues of Parks and Recreation programming due to cancellations of events and classes. Additionally, the concern for the COVID-19 transmission caused a slowdown in activities for building and planning permits. And, the suspension of the enforcement of overnight parking caused another reduction in City revenues. However, because of the efforts of management and staff in practicing strict monitoring and control of its expenditures, the GF was, nevertheless, able to achieve a slim positive net change to its fund balance. This effort is continued into the FY 2020-21 budget year as the COVID-19 pandemic remains to affect City revenues for a longer term. CITY STRATEGIC GOALS: Approval to receive and file the CAFR for FY 2019-20 will further City’s Strategic Goal to promote Good Governance. FISCAL IMPACT : This action of receiving and filing the CAFR does not have a fiscal impact to the FY 2020- 21 City Budget. City Council January 19, 2021 Page 6 of 6 ATTACHMENTS: A. Comprehensive Annual Financial Report (CAFR) for the year ended June 30, 2020 B. Auditor’s Communication to the City Council C. Independent Accountants’ Report on Applying Agreed-Upon Procedures Related to the Article XIII-B Appropriations Limit Calculation D. Independent Auditor’s Report on Internal Control over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in accordance with Government Auditing Standards Comprehensive Annual Financial Report for the period ended June 30, 2020 ATTACHMENT A CITY OF TEMPLE CITY, CALIFORNIA COMPREHENSIVE ANNUAL FINANCIAL REPORT YEAR ENDED JUNE 30, 2020 ATTACHMENT A City of Temple City, California Comprehensive Annual Financial Report Year Ended June 30, 2020 Prepared by: ADMINISTRATIVE SERVICES DEPARTMENT Susan Paragas Administrative Services Director ATTACHMENT A City of Temple City, California Table of Contents June 30, 2020 INTRODUCTORY SECTION Letter of Transmittal ......................................................................................................................................... i List of Elected Officials and Management Personnel ........................................................................................ vi Organizational Chart ....................................................................................................................................... vii Certificate of Achievement for Excellence in Financial Reporting ................................................................... viii FINANCIAL SECTION Independent Auditor’s Report ............................................................................................................................. 1 Management’s Discussion and Analysis ............................................................................................................... 5 Government-wide Financial Statements Statement of Net Position ..............................................................................................................................15 Statement of Activities ...................................................................................................................................16 Fund Financial Statements Description of Major Funds.............................................................................................................................17 Balance Sheet – Governmental Funds .............................................................................................................18 Reconciliation of the Governmental Funds Balance Sheet to the Statement of Net Position ...........................19 Statement of Revenues, Expenditures, and Changes in Fund Balances – Governmental Funds ........................20 Reconciliation of the Statement of Revenues, Expenditures, and Changes in Fund Balances of Governmental Funds to the Statement of Activities ........................................................................................21 Proprietary Fund Financial Statements Description of Proprietary Funds ....................................................................................................................22 Statement of Net Position – Proprietary Funds ...............................................................................................23 Statement of Revenues, Expenses, and Changes in Fund Net Position – Proprietary Funds .............................24 Statement of Cash Flows – Proprietary Funds .................................................................................................25 Fiduciary Fund Financial Statements Description of Fiduciary Funds ........................................................................................................................26 Statement of Fiduciary Net Position ................................................................................................................27 Statement of Changes in Fiduciary Net Position ..............................................................................................28 Notes to Financial Statements ............................................................................................................................29 REQUIRED SUPPLEMENTARY INFORMATION Budgetary Comparison Schedule – General Fund ............................................................................................63 Budgetary Comparison Schedule – Public Transportation- Prop A Fund ..........................................................65 Note to Budgetary Comparison Schedule ........................................................................................................66 Schedule of Proportionate Share of the Net Pension Liability ..........................................................................67 Schedule of Contributions...............................................................................................................................68 Schedule of Changes in the Net OPEB Liability ................................................................................................69 Schedule of the OPEB Contributions ...............................................................................................................70 ATTACHMENT A City of Temple City, California Table of Contents June 30, 2020 SUPPLEMENTARY INFORMATION Nonmajor Governmental Funds Combining Balance Sheet – Nonmajor Governmental Funds ...........................................................................73 Combining Statement of Revenues, Expenditures, and Changes in Fund Balances – Nonmajor Governmental Funds ......................................................................................................................74 Nonmajor Special Revenue Funds Description of Nonmajor Special Revenue Funds ............................................................................................75 Combining Balance Sheet – Nonmajor Special Revenue Funds ........................................................................77 Combining Statement of Revenues, Expenditures, and Changes in Fund Balances – Nonmajor Special Revenue Funds ...................................................................................................................84 Budgetary Comparison Schedules Permanent Fund .............................................................................................................................................91 COPS Fund ......................................................................................................................................................92 Public Transportation – Prop C Fund ...............................................................................................................93 Used Oil Fund .................................................................................................................................................94 State Gas Tax Fund .........................................................................................................................................95 Traffic Congestion Relief – Section 2181 .........................................................................................................96 CDBG Fund .....................................................................................................................................................97 Bicycle and Pedestrian Fund ...........................................................................................................................98 Air Quality Improvement District Fund............................................................................................................99 Measure R Fund ...........................................................................................................................................100 Sewer Reconstruction Fund ..........................................................................................................................101 Road Maintenance Rehab Act (RMRA) ..........................................................................................................102 1992/1996 Park Road Bond Fund ..................................................................................................................103 Measure M Fund ..........................................................................................................................................104 Park Acquisition Fund ...................................................................................................................................105 Lighting and Landscape District Fund ............................................................................................................106 STATISTICAL SECTION Description of Statistical Section Contents ....................................................................................................109 Net Position by Component ..........................................................................................................................110 Change in Net Position – Expenses and Program Revenues ...........................................................................111 Fund Balances of Governmental Funds .........................................................................................................112 Changes in Fund Balances of Governmental Funds .......................................................................................113 Assessed Value of Taxable Property ..............................................................................................................114 Direct and Overlapping Property Tax Rates ...................................................................................................115 Property Tax Levies and Collections ..............................................................................................................116 General Fund Revenues ................................................................................................................................117 Principal Property Taxpayers ........................................................................................................................118 Top 25 Sales Tax Producers ...........................................................................................................................119 Direct and Overlapping Debt.........................................................................................................................120 Demographic and Economic Statistics ...........................................................................................................122 Construction Activity ....................................................................................................................................123 Full-Time Equivalent City Employees by Function ..........................................................................................124 Operating Indicators by Function ..................................................................................................................125 Capital Asset Statistics by Function/Program ................................................................................................126 ATTACHMENT A i 9701 LAS TUNAS DRIVE  TEMPLE CITY  CALIFORNIA 91780-2249  (626) 285-2171 December 21, 2020 To the Honorable City Council, The Comprehensive Annual Financial Report (CAFR) of the City of Temple City (“City”) for the year ended June 30, 2020, is hereby submitted as mandated by applicable State of California statues. These statues require that the City annually issue a report on its financial position and activity, and that an independent firm of certified public accountants audit this report. Responsibilities for both the accuracy of the data and the completeness and fairness of the presentation, including all disclosures rests with the City’s management. The information in this report is intended to present the reader with a comprehensive view of the City’s financial position and the results of its operations for the fiscal year ending June 30, 2020, along with additional disclosures and financial information designed to enable the reader to gain an understanding of the City’s financial activities. Eide Bailly, LLP, a firm of certified public accountants, has issued an unmodified (“clean”) opinion on the City’s financial statements for the year ended June 30, 2020. The independent auditor concluded, based upon the audit that the City’s financial statements for the fiscal year ended June 30, 2020 are fairly presented in conformity with generally accepted accounting principles (GAAP). The auditor’s report is presented as the first component of the financial section of this report. Generally accepted accounting principles also require that management provide a narrative introduction, overview and analysis of the basic financial statements in the form of Management’s Discussion and Analysis (MD&A). It can be found following the independent auditor’s report. PROFILE OF THE GOVERNMENT The City is centrally located in the west San Gabriel Valley approximately 13 miles east of downtown Los Angeles and is in Los Angeles County. The City was incorporated on May 25, 1960 under the general laws of the State of California. On April 16, 1971, the City adopted Resolution No. 71-1084 declaring it a charter city. The City is approximately 3.85 square miles and is surrounded by the cities of Arcadia, San Gabriel, El Monte, Rosemead and unincorporated portions of Los Angeles County. The 2010 U.S. Census Bureau indicates a total population of 35,558. The City is predominately a residential community with over 10,000 residential parcels. The City is a charter city and operates under the Council – Manager Form of government and contracts for many of its public services including law enforcement. LOCAL ECONOMY The City of Temple City is a diverse, multicultural community centered on family values and active civic ATTACHMENT A ii engagement. As of January 2020, per the State of California Department of Finance, the City’s population increased to 36,150 (+52) with a median age of 43.3 years. The unemployment rate continues to be low at 3.6% for 2019. The 2019 taxable sales for the City were $221.4 million which is an increase of 1.8% or $4.0 million over 2018. The largest increase was in the category of Eating and Drinking Places which rose by 9.0% (+$6.7 million) and comprised 36.6% of the total taxable sales for 2019. Assessed valuation (“AV”) of citywide properties in FY 2019-20 increased by 5.8% from $5.22 billion to $5.52 billion primarily due to a $277 million increase in the AV of residential properties. This growth is mostly due to the Los Angeles County Assessor’s annual increase in assessed value of up to 2% and the median price of homes sold rose by approximately $37,000 (+4.8%) from prior year’s $768,000 to the current year’s $805,000. The average sales price of a single-family residence also grew from $835,961 to $905,834 (+$69,873) from prior year which is an 8.4% increase. The outbreak of the coronavirus (COVID-19) in the United States has caused business disruptions through mandated and voluntary closings and stay-at-home orders for all except for essential services. While the business disruption is currently expected to be temporary, there is considerable uncertainty around the length of the closings and stay-at-home orders. As a result, the outbreak has caused uncertainty and significantly impacted the various businesses and government revenues. City Hall was closed to the public on March 2020 and some of the City services moved to online-only. Because some of the City's major revenue sources are directly impacted by COVID-19 restrictions, the ultimate financial impact and duration cannot be estimated at this time. Nevertheless, the City adopted a balanced budget for FY 2020-21 without reducing services. Mid-year adjustments will be made to revenues and expenditures based on the economic changes during the year. It is important that the City continue to monitor and control all potential COVID-19 financial impacts so that the City is able to maintain its services to the community. The City continues to ensure that it builds healthy reserves to handle any downturn in the economy. MAJOR ACCOMPLISHMENTS The City of Temple City strives to continuously work toward improving its exceptional service to the community. Accomplishments for the FY 2019-20 include: Vision and Long-Range Planning • City Council adopted a comprehensive update of the Zoning Code. • Adopted a moratorium on subdivisions and public market uses within the Crossroads Specific Plan and began a study to adopt appropriate regulations. • Adopted an Ordinance modifying the City’s accessory and junior accessory dwelling unit standards. • Began the Series A Code Amendments to make various changes to the Zoning Code. • Amended the CEQA Traffic Threshold of Significance to VMT (vehicle miles traveled) rather than LOS (level of service). Sound Fiscal Policy • Continued to receive unmodified (i.e., “clean”) audit findings on the City’s financial reporting via enhanced fiscal controls and checks and balances. ATTACHMENT A iii • Recognition of excellence in financial reporting from Government Finance Officers Association of the United States and Canada. • Maintained Unassigned Fund Balance to $6.0 million in General Fund operating reserves despite financial impact of COVDI-19. Public Health and Safety • Maintained emergency management and public safety operations during the COVID-19 Pandemic. • Reduced Part I Crimes in Temple City by 21.2%. (FY1819: 472 crimes reported; FY1920: 372 crimes reported) • Continued the successful Neighborhood Watch Program with virtual meetings during the COVID- 19 Pandemic. • Continued emergency preparation and training for residents through the Community Emergency Response Team (CERT) Program. Basic City Services • Continued to digitize critical city documents, allowing for easy reference and improved public transparency. • Transition City's public records archive from on-premise server to cloud to ensure public records are protected from equipment failure and natural disasters. • Allow electronic filing of disclosure documents (i.e., campaign reporting and Statement of Economic Interest) to further information transparency and ensure timely filing by officeholders and potential council candidates during election year. Quality of Life • Completed re-roofing of Performing Arts Pavilion. • Completed re-sealing of walking path at Live Oak Park. • Secured $2.9 million Prop 68 State grant funding for Primrose Park. • Completed water company testing of all park water fountains and filter retrofit. • Created new Bike Ride and Safety Expo event. • Created new eBlast notification system for Parks and Recreation. Communication and Special Projects • Continued to provide engaging and informative posts on the City's social media accounts. • Completed the relocation of Chamber of Commerce operations to the civic center. Sustainable Infrastructure • Completed Rosemead Boulevard resurfacing. • Initiated pavement management construction for Las Tunas drive resurfacing. COVID-19 Health and Safety Response • Utilized social media to disseminate information to the community. • Allocated CDBG/CARES Act funding for small business relief grant and temporary residential rental assistance program. ATTACHMENT A iv • Waived fees and modified rules for business banner permits. • Eased outdoor dining restrictions for restaurants. • Issued temporary use permits for restaurants to operate outside. • Extended planning entitlements for one year. • Transitioned to a full Senior Meal Program delivery service. • Transitioned to virtual programming: Temple City’s Got Talent, Arbor Day, Volunteer Week, Older American on the Year, Microsoft Enrichment Workshops, Virtual Recreation Center. • Transitioned Parks and Recreation Commission and Committee on Aging to video conference formats. • Operated a virtual/remote Emergency Operations Center (EOC) during the COVID-19 Pandemic. • Developed Temple City COVID-19 Situation Summary. The Situation Summary is distributed and made available to all stakeholders in Temple City. • Developed the COVID-19 Workplace Practices and Policies, which includes modified work schedules, for city staff. • Ensured the safety and well-being of the community during the COVID-19 Pandemic, civil unrest, curfews and requirements of the State and County Health Orders. OTHER FINANCIAL INFORMATION Internal Control Management assumes full responsibility for the completeness and reliability of the information contained in this report, based upon a comprehensive framework of internal control that it has established for this purpose. The internal control structure is designed to protect the City’s assets from loss, theft, or misuse and to ensure that adequate accounting data is compiled for the preparation of financial statements in conformity with GAAP. Because the cost of internal control should not exceed anticipated benefits, the objective is to provide reasonable, rather than absolute assurance that the financial statements are free of any material misstatements. Budgetary and Accounting System The City is required to adopt a budget for the following year before the end of each fiscal year. The objective of budgetary controls is to ensure compliance with legal provisions embodied in the annual appropriated budget approved by the City Council. The City’s budgetary control is maintained at the individual departmental level and any change in the adopted appropriations by a department requires approval from the City Manager and/or City Council. AWARDS AND ACKNOWLEDGEMENTS The Government Finance Officers Association (GFOA) awarded a Certificate of Achievement for Excellence in Financial Report to the City of Temple City for its Comprehensive Annual Financial Report (CAFR) for the fiscal year ended June 30, 2019. This was the eighth year in a row that Temple City has received this prestigious award since it began applying. In order to be awarded a Certificate of Achievement, a report must be published that satisfies both GAAP and applicable legal requirements. A Certificate of Achievement is valid for a period of one year only. We believe that our current CAFR continues to meet the Certificate of Achievement Program’s requirements and we are submitting it to the GFOA to determine its eligibility for another certificate. The City’s CAFR was prepared through combined efforts of City staff. Special recognition is due the ATTACHMENT A v ATTACHMENT A vi ATTACHMENT A vii ATTACHMENT A viii ATTACHMENT A Financial Section ATTACHMENT A This page intentionally left blank ATTACHMENT A What inspires you, inspires us. | eidebailly.com 10681 Foothill Blvd., Ste. 300 | Rancho Cucamonga, CA 91730-3831 | T 909.466.4410 | F 909.466.4431 | EOE 1 Independent Auditor’s Report The Honorable Mayor and the Members of the City Council City of Temple City, California Report on the Financial Statements We have audited the accompanying financial statements of the governmental activities, each major fund, and the aggregate remaining fund information of the City of Temple City, California (City), as of and for the year ended June 30, 2020, and the related notes to the financial statements, which collectively comprise the City's basic financial statements as listed in the table of contents. Management’s Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error. Auditors’ Responsibility Our responsibility is to express opinions on these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions. ATTACHMENT A 2 Opinions In our opinion, the financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities, each major fund, and the aggregate remaining fund information of the City, as of June 30, 2020, and the respective changes in financial position, and, where applicable, cash flows thereof for the year then ended in accordance with accounting principles generally accepted in the United States of America. Other Matters Required Supplementary Information Accounting principles generally accepted in the United States of America require that the management’s discussion and analysis, budgetary comparison schedule for the General Fund, budgetary comparison schedule for the Public Transportation – Prop A Fund, schedule of proportionate share of the net pension liability, schedule of contributions, schedule of changes in the net OPEB liability and schedule of OPEB contributions as listed in the table of contents, be presented to supplement the basic financial statements. Such information, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management’s responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance. Other Information Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the City’s basic financial statements. The introductory section, combining and individual nonmajor fund financial statements and budgetary comparison schedules, and statistical section, are presented for purposes of additional analysis and are not a required part of the basic financial statements. The combining and individual nonmajor fund financial statements and budgetary comparison schedules are the responsibility of management and were derived from and relate directly to the underlying accounting and other records used to prepare the basic financial statements. Such information has been subjected to the auditing procedures applied in the audit of the basic financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the basic financial statements or to the basic financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the combining and individual nonmajor fund financial statements and budgetary comparison schedules are fairly stated, in all material respects, in relation to the basic financial statements as a whole. The introductory and statistical sections have not been subjected to the auditing procedures applied in the audit of the basic financial statements, and accordingly, we do not express an opinion or provide any assurance on them. ATTACHMENT A 3 Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated December 21, 2020, on our consideration of the City’s internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is to solely describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the City’s internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the City’s internal control over financial reporting and compliance. Rancho Cucamonga, California December 21, 2020 ATTACHMENT A 4 This page intentionally left blank. ATTACHMENT A City of Temple City Management’s Discussion and Analysis June 30, 2020 5 The following discussion and analysis of the City of Temple City’s financial performance provides an overview of the financial activities for the fiscal year ended June 30, 2020. Readers are encouraged to consider the information presented here in conjunction with the accompanying basic financial statements. Financial Highlights Government-wide Financial Statements: • The City’s net position decreased by $0.9 million from $71.2 million as of June 30, 2019, to $70.3 million as of June 30, 2020, primarily resulting from liability increases due to a $3.1 million rise in payables, other post-employment benefits (OPEB) and pension liabilities but offset with a $1.9 million increase in cash and investments; • The total revenue from all sources was $21.5 million which is a decrease of $0.2 million from prior year; • The total cost of all City programs was $22.4 million, an increase of $3.3 million; and • The City’s total long-term liabilities increased by $2.2 million during the current fiscal year. The key factors in this increase are the net increase in Pension and OPEB obligations of $2.2 million; • The total deferred outflows of resources increased by $516,788 mainly due to the estimated lower investment earnings determined in the OPEB valuation; and • The total deferred inflows of resources were lower by $27,515 due to a decrease in estimated investment earnings. Fund Financial Statements: • As of June 30, 2020, the City’s governmental funds reported combined ending fund balances of $33.4 million, an increase of $1.4 million from the prior fiscal year. Approximately $6.1 million of the balance is unassigned and is available for spending at the government’s discretion; • As of June 30, 2020, the total fund balance of the City’s General Fund was $20.1 million or 130.0% of total General Fund expenditures. It is an increase of $54,000 from the prior year; and • In the General Fund, revenues exceeded expenditures by $33,466 before other financing sources/uses. Overview of the Financial Statements This discussion and analysis are intended to serve as an introduction to the City of Temple City’s basic financial statements. The City of Temple City’s Comprehensive Annual Financial Report (CAFR) is comprised of three components: Introduction, Financial Section and Statistical Section. Government-wide financial statements. The government-wide financial statements are designed to provide readers with a broad overview of the City of Temple City’s finances, in a manner similar to a private-sector business. The government-wide financial statements include not only the City, but also all legal entities for which the City is financially accountable, including the Successor Agency Private-Purpose Trust. The statement of net position presents information on all of the City of Temple City’s total assets and deferred outflows of resources and total liabilities and deferred inflows of resources, with the difference reported as total net position. Over time, increases and decreases in net position may serve as a useful indicator of whether the financial position of the City is improving or deteriorating. ATTACHMENT A City of Temple City Management’s Discussion and Analysis June 30, 2020 6 The statement of activities presents information showing how the City’s net position changed during the most recent fiscal year. All changes in net position are reported as soon as the underlying event giving rise to the change occurs, regardless of the timing related to cash flows. Thus, revenues and expenses are reported in this statement for some items that will only result in cash flows in future fiscal periods (e.g., uncollected taxes). Both of the government-wide financial statements report on functions of the City of Temple City that are principally supported by taxes and inter-governmental revenues (governmental activities). The governmental activities of the City of Temple City include general government, community development, public safety, public works and community services. Fund financial statements. A fund is a group of related accounts that is used to maintain control over resources that have been segregated for specific activities or objectives. The City of Temple City, like other state and local governments, uses fund accounting to ensure and demonstrate compliance with finance-related legal requirements. All of the funds of the City of Temple City are governmental funds. Governmental funds. Governmental funds are used to account for essentially the same functions reported as governmental activities in the government-wide financial statements. However, unlike the government-wide financial statements, governmental fund financial statements focus on near-term inflows and outflows of spendable resources, as well as balances of spendable resources available at the end of the fiscal year. Such information may be useful in evaluating a government’s near-term financing requirements. Because the focus of governmental funds is narrower than that of the government-wide financial statements, it is useful to compare the information presented for governmental funds with similar information presented for governmental activities in the government-wide financial statements. By doing so, readers may better understand the long-term impact of the City’s near-term financing decisions. Both the governmental funds balance sheet and the statement of revenues, expenditures, and changes in fund balances provide a reconciliation to facilitate this comparison between governmental funds and governmental activities. Information is presented separately in the governmental funds balance sheet and in the statement of revenues, expenditures, and changes in fund balances for the General Fund. The City of Temple City adopts an annual appropriated budget. A budgetary comparison statement has been provided to demonstrate compliance with this budget. Proprietary funds. The City maintains only one category of a proprietary fund, an internal service fund. Fiduciary fund. The City also maintains an Agency fund to account for the resources held and administered by the City of Temple City in a fiduciary capacity acting as the Successor Agency to the former Temple City Redevelopment Agency. Notes to basic financial statements. The notes provide additional information that is essential to a full understanding of the data provided in the government-wide and fund financial statements. Other information. In addition to the basic financial statements and accompanying notes, this report also presents certain required supplementary information concerning the City’s budget comparison schedules for the General Fund and each major revenue fund and progress in funding its obligation to provide pension benefits to its employees. ATTACHMENT A City of Temple City Management’s Discussion and Analysis June 30, 2020 7 Government-wide Financial Analysis Our analysis focuses on the net position and changes in net position of the City’s governmental activities for the fiscal year ended June 30, 2020. Net position. As noted earlier, net position may serve over time as a useful indicator of a government’s financial position. The City’s net position decreased by $0.9 million from $71.2 million as of June 30, 2019, to $70.3 million as of June 30, 2020, primarily resulting from liability increases due to a $3.1 million rise in payables, other post-employment benefits (OPEB) and pension liabilities but offset with a $1.9 million increase in cash and investments. The largest portion of the City’s net position is its investment in capital assets (e.g. land, infrastructure, building and equipment) representing 72.0%, or $50.6 million, of its total net position. The City uses these capital assets to provide services to citizens; consequently, these assets are not available for future spending. A portion of the City’s net position, $13.3 million or 19.0%, represents resources that are subject to external restrictions on how they may be used. The remaining balance of unrestricted net position of $6.4 million or 9.1% may be used to meet the government’s ongoing obligations to citizens and creditors. 2020 2019 Increase (Decrease) Current and other assets 37,643,914$ 35,256,299$ 2,387,615$ Capital assets, net 50,555,287 51,292,676 (737,389) Total assets 88,199,201 86,548,975 1,650,226 Deferred amounts related to pensions 2,024,383 2,109,892 (85,509) Deferred amounts related to OPEB 2,042,474 1,440,177 602,297 Total deferred outflow of resources 4,066,857 3,550,069 516,788 Current and other liabilities 3,608,712 2,710,075 898,637 Long-term liabilities 17,496,794 15,270,241 2,226,553 Total liabilities 21,105,506 17,980,316 3,125,190 Deferred amounts related to pensions 642,246 622,336 19,910 Deferred amounts related to OPEB 254,322 301,747 (47,425) Total deferred inflow of resources 896,568 924,083 (27,515) Net position: Net investment in capital assets 50,555,287 51,292,676 (737,389) Restricted 13,329,527 11,957,258 1,372,269 Unrestricted 6,379,170 7,944,711 (1,565,541) Total net position 70,263,984$ 71,194,645$ (930,661)$ City of Temple City Statement of Net Position For Fiscal Year Ended ATTACHMENT A City of Temple City Management’s Discussion and Analysis June 30, 2020 8 Invested in Capital Assets, Net of Related Debt Restricted Unrestricted Total Net Assets FY 18/19 $51.29 $11.96 $7.94 $71.19 FY 19/20 $50.55 $13.33 $6.38 $70.26 0.0 10.0 20.0 30.0 40.0 50.0 60.0 70.0 The following chart shows the comparison of the three components of net position for Fiscal Years 2019-20 and 2018-19 (in millions): Statement of Activities. Governmental activities decreased the City’s net position by $0.9 million for FY 2019-20. The total revenue for the fiscal year is $21.5 million, which is a decrease of $0.2 million from the prior year. Revenues were reduced mainly due to the impact of the Corona Virus (COVID- 19) health orders that resulted in the cancellation of Parks and Recreation programs and events, and the slowdown in construction fees such as building and planning. Additionally, lower interest rates resulted in lower interest income. However, increases in property tax revenues and a Proposition A fund exchange for general funds with Foothill Transit helped offset the losses. The total expenses increased by $3.3 million, at $22.4 million, from the prior year total of $19.1 million. The final subsidy payment for the Los Angeles County Library project of $1.5 million, increase costs of $1.15 million in public safety and capital improvement projects mainly caused the growth. ATTACHMENT A City of Temple City Management’s Discussion and Analysis June 30, 2020 9 The following table presents the comparative revenue and expense data for fiscal years ended June 30, 2020 and 2019. Key elements of the significant revenues reductions in FY 2019-20 are primarily because of decreases in sales taxes, community development fees and parks and recreation fees. Taxes are comprised of sales tax, property tax, franchise, transient occupancy tax and vehicle in lieu tax. 2020 2019 Increase (decrease) Program Revenues: Charges for services 3,050,921$ 3,841,190$ (790,269)$ Operating contributions and grants 5,190,855 5,132,393 58,462 Capital contributions and grants 437,166 454,608 (17,442) General Revenues: Taxes 11,889,363 11,171,563 717,800 Interest income 685,260 829,962 (144,702) Other revenue 265,222 289,474 (24,252) Total Revenues 21,518,787 21,719,190 (200,403) Expenses: General government 6,302,189 4,232,622 2,069,567 Community development 1,984,027 1,870,993 113,034 Public safety 6,690,824 5,952,525 738,299 Public works 3,248,159 2,837,774 410,385 Community services 4,224,249 4,208,894 15,355 Total Expenses 22,449,448 19,102,808 3,346,640 Increase (decrease) in net position (930,661) 2,616,382 (3,547,043) Net Position - Beginning 71,194,645 68,578,263 2,616,382 Net Position - Ending 70,263,984$ 71,194,645$ (930,661)$ City of Temple City Statement of Changes in Net Position For Fiscal Year Ended ATTACHMENT A City of Temple City Management’s Discussion and Analysis June 30, 2020 10 Expenses of the governmental activities totaled $22.4 million, which is an increase of $3.3 million or 17.5% over the prior year. ATTACHMENT A City of Temple City Management’s Discussion and Analysis June 30, 2020 11 Financial Analysis of the City’s Funds The City uses fund accounting to ensure and demonstrate compliance with finance related legal requirements. This section provides an analysis and discussion of individual funds and fund types presented in the fund financial statements. Governmental Funds. The City of Temple City’s governmental funds reported a combined fund balance of $33.4 million at the end of the fiscal year. The General Fund’s fund balance increased by $54,000 after net transfers in FY 2019-20. Revenues exceeded expenditures by $33,466, before other financing sources/uses. Other financing sources and uses netted an increase to the Fund Balance of $20,500 which is $290,395 higher than prior year. The General Fund no longer transfers a subsidy to the Lighting and Landscape District (LLD) due to the passage of Senate Bill 324, authorizing the City’s Ad Valorem taxes to be used. Primary revenue sources for this fund are sales tax, property tax and motor vehicle in lieu. The General Fund is responsible for general services of the City. This includes public safety, public works, community development, community services and administration. The largest expenditure is for public safety, which was $5.5 million for FY 2019-20. The Proposition A Fund accounts for the City’s share of additional sales tax collected in the County of Los Angeles as a result of Propositions A and is restricted to finance public transportation projects. The expenditures of $1.3 million include the Dial-A-Ride operations of $349,542 and an exchange of $750,000 with Foothill Transit for the use as general funds. The State Gas Tax Fund accounts for the revenues and expenditures of the City’s proportionate share of gas tax monies collected by the State of California which are used for street construction, street maintenance and engineering, and administrative expenses. For FY 2019-20, $430,947 was spent primarily on street cleaning and maintenance. The Lighting and Landscape District Fund is for the assessments and ad valorem taxes which are used for the operation and maintenance of street lights, traffic signals and trees and parkways within the City. $1.15 million was spent maintenance and upkeep. Proprietary Funds. Proprietary funds distinguish operating revenues and expenses from non- operating items. The City’s Proprietary Fund did not have any non-operating activity for the year ended June 30, 2020. In the case of the Proprietary Fund, assets exceeded liabilities by $566,915. General Fund Financial and Budgetary Highlights The General Fund is the chief operating fund of the City. The fund balance reported an increase of $53,966 at June 30, 2020. As a measure of the General Fund’s liquidity, it may be useful to compare both unassigned fund balance and total fund balance to total fund expenditures. Unassigned fund balance represents 39.2% of total General Fund expenditures, while total fund balance represents 130.0% of that same amount. Revenues: Actual revenues received were $15.49 million and were $119,155 higher than the final budget. This increase was primarily due higher interest income than estimated. ATTACHMENT A City of Temple City Management’s Discussion and Analysis June 30, 2020 12 Expenditures: Actual expenditures were $15.46 million and were lower than the final budget by a net of $6,984. General government and community services expenditures were under budget by $204,224. However, community development and public works were over budget by $181,671. The reclassification of Measure W expenditures caused the public works function in the General Fund to be over budget by $131,229. This was due to the Los Angeles County agreement with the City not being fully executed until the next fiscal year. Therefore, expenditures could not be charged against FY2019-20 Measure W funding. Variance with Final Budget Actual Positive Original Final Amounts (Negative) REVENUES Taxes 6,423,690$ 6,345,290$ 6,345,213$ (77)$ Licenses and permits 1,561,000 1,264,230 1,267,936 3,706 Intergovernmental 4,817,905 5,541,705 5,544,150 2,445 Charges for services 1,383,350 993,960 994,072 112 Interest Income 215,000 432,110 536,782 104,672 Other revenue 718,000 797,990 806,287 8,297 Total revenue 15,118,945 15,375,285 15,494,440 119,155 EXPENDITURES General government 5,279,620 5,401,051 5,287,395 113,656 Community development 1,502,110 1,308,527 1,358,969 (50,442) Public safety 5,753,995 5,479,510 5,473,199 6,311 Public works 1,015,425 941,752 1,072,981 (131,229) Community services 2,580,920 2,232,088 2,141,520 90,568 Capital outlay 678,890 105,030 126,910 (21,880) Total expenditures 16,810,960 15,467,958 15,460,974 6,984 Excess of revenues over expenditures (1,692,015) (92,673) 33,466 126,139 OTHER FINANCING SOURCES (USES) Transfers in - 20,500 20,500 - Total other financing sources (uses)- 20,500 20,500 - Net change in fund balance (1,692,015) (72,173) 53,966 126,139 Fund Balance at Beginning of Year 20,043,987 20,043,987 20,043,987 - Fund Balance at End of Year $18,351,972 $19,971,814 $20,097,953 $126,139 Budgeted Amounts City of Temple City General Fund Budgetary Summary Revenues, Expenditures, and Changes in Fund Balance June 30, 2020 ATTACHMENT A City of Temple City Management’s Discussion and Analysis June 30, 2020 13 Capital Assets and Other Long-term liabilities Capital Assets. As shown in the following table, as of June 30, 2020, the City of Temple City had $50.6 million invested in capital assets, including land, buildings, improvements, furniture and equipment, vehicles and infrastructure. See Note 6 for additional information. Other Long-term liabilities. Other long-term liabilities of the City are comprised of compensated absences, net OPEB liability, and net pension liability. The net OPEB liability pertains to the unfunded status of the City’s OPEB plan as of June 30, 2020. The net pension liability is based on a projection of the City’s long-term share of contributions to the pension plan relative to the projected contributions of all participating employers, actuarially determined. A summary of other long-term liabilities follows: Contacting the City’s Financial Management This financial report is designed to provide our citizens, taxpayers, customers, investors and creditors with a general overview of the City’s finances and to show the City’s accountability for the money it receives. There currently are not any known facts, decisions or condition that are expected to have a significant effect on the financial position of the City. If you have any questions about this report or need additional financial information, contact the Administrative Services Department, at the City of Temple City, 9701 Las Tunas Drive, Temple City, California, 91780, (626) 285-2171. Land and land rights 15,780,930$ Buildings and improvements 13,309,777 Furniture and equipment 1,149,296 Vehicles 646,562 Infrastructure 40,095,249 Subtotal 70,981,814 Less Depreciation 20,426,527 Net total, capital assets 50,555,287$ Capital Assets at Year-End Governmental Activities 2020 Net OPEB obligation 8,637,444$ Compensated absences 269,151 Net pension liability 8,590,199 Total 17,496,794$ Other Long-Term Liabilities at Year-End Governmental Activities 2020 ATTACHMENT A 14 This page intentionally left blank ATTACHMENT A See Notes to Financial Statements 15 City of Temple City, California Statement of Net Position June 30, 2020 Governmental Activities Assets Cash and investments 34,593,123$ Accounts receivable 310,581 Interest receivable 25,598 Due from governmental agencies 1,394,769 Due from Successor Agency 20,000 Loans receivable 1,261,319 Prepaid items 38,524 Capital assets not being depreciated 15,780,930 Capital assets being depreciated, net 34,774,357 Total assets 88,199,201 Deferred Outflows of Resources Deferred amount related to pensions 2,024,383 Deferred amount related to OPEB 2,042,474 Total deferred outflows of resources 4,066,857 Liabilities Accounts payable 2,441,788 Accrued payroll 157,450 Deposits payable 979,568 Noncurrent liabilities: Due within one year - compensated absences 29,906 Due in more than one year: Compensated absences 269,151 Proportionate share of net pension liability 8,590,199 Net OPEB liability 8,637,444 Total liabilities 21,105,506 Deferred Inflows of Resources Deferred amounts related to pensions 642,246 Deferred amounts related to OPEB 254,322 Total deferred inflows of resources 896,568 Net Position Net investment in capital assets 50,555,287 Restricted for: Education scholarship (nonspendable)174,744 Public safety 26,264 Public works 11,659,049 Community services 167,000 Community development 1,302,470 Unrestricted 6,379,170 Total net position 70,263,984$ ATTACHMENT A See Notes to Financial Statements 16 City of Temple City, California Statement of Activities Year Ended June 30, 2020 Net (Expense) Revenue and Change in Net Position Charges Operating Capital for Contributions Contributions Governmental Expenses Services and Grants and Grants Activities Governmental Activities: General government 6,302,189$ 36,011$ -$ -$ (6,266,178)$ Community development 1,984,027 1,276,471 738,391 - 30,835 Public safety 6,690,824 556,510 167,948 - (5,966,366) Public works 3,248,159 930,054 4,191,881 437,166 2,310,942 Community services 4,224,249 251,875 92,635 - (3,879,739) Total Governmental Activities 22,449,448$ 3,050,921$ 5,190,855$ 437,166$ (13,770,506) General Revenues: Taxes: Property taxes 3,670,281 Property taxes in lieu of motor vehicle fees 5,544,150 Sales taxes 1,919,780 Transient occupancy taxes 43,505 Franchise taxes 576,214 Other taxes 135,433 Investment income 685,260 State revenue - other 7,112 Other revenue 258,110 Total General Revenues 12,839,845 Change in Net Position (930,661) Net Position, Beginning of Year 71,194,645 Net Position, End of Year 70,263,984$ Program Revenues Functions/Programs ATTACHMENT A See Notes to Financial Statements 17 City of Temple City, California Description of Major Funds June 30, 2020 Major Governmental Funds General Fund The General Fund has been classified as a major fund and is used to account for all of the general revenues of the City not specifically levied or collected for some special purpose, and for the expenditures related to the rendering of general services by the City. The General Fund is used to account for all resources not required to be accounted for in another fund. Major Special Revenue Fund Public Transportation – Proposition A Fund – To account for the City's share of additional sales tax collected in the County of Los Angeles as a result of Proposition A. The fund is restricted to finance public transportation projects. Nonmajor Governmental Funds Nonmajor governmental funds include the Special Revenue Funds and the Permanent Fund. Since total assets, liabilities and deferred inflows, revenues or expenditures of these funds do not exceed 10 percent of total governmental funds, they do not meet the criteria to be classified as major funds. ATTACHMENT A See Notes to Financial Statements 18 City of Temple City, California Balance Sheet – Governmental Funds June 30, 2020 Public Nonmajor Transportation Governmental General Prop A Funds Total Assets Cash and investments 20,960,321$ 1,433,938$ 11,631,949$ 34,026,208$ Accounts receivable 302,594 7,227 760 310,581 Interest receivable 25,598 - - 25,598 Due from other funds 98,836 - - 98,836 Due from other governments 1,094,289 - 300,480 1,394,769 Due from Successor Agency 20,000 - - 20,000 Prepaid items 27,686 10,838 - 38,524 Loans receivable 58,375 - 1,202,944 1,261,319 Total assets 22,587,699$ 1,452,003$ 13,136,133$ 37,175,835$ Liabilities, Deferred Inflows of Resources and Fund Balances Liabilities Accounts payable 1,394,950$ 775,495$ 271,343$ 2,441,788$ Accrued payroll 157,428 - 22 157,450 Due to other funds - - 98,836 98,836 Refundable deposits 877,493 - 102,075 979,568 Total liabilities 2,429,871 775,495 472,276 3,677,642 Deferred Inflows of Resources Unavailable revenues 59,875 - - 59,875 Total deferred inflows of resources 59,875 - - 59,875 Fund Balances Nonspendable 86,061 10,838 174,744 271,643 Restricted - 665,670 12,489,113 13,154,783 Committed 3,500,000 - - 3,500,000 Assigned 10,455,704 - - 10,455,704 Unassigned 6,056,188 - - 6,056,188 Total fund balances 20,097,953 676,508 12,663,857 33,438,318 Total liabilities, deferred inflows of resources and fund balances 22,587,699$ 1,452,003$ 13,136,133$ 37,175,835$ ATTACHMENT A See Notes to Financial Statements 19 City of Temple City, California Reconciliation of the Governmental Funds Balance Sheet to the Statement of Net Position June 30, 2020 Fund balances of governmental funds 33,438,318$ Amounts reported for governmental activities in the statement of net position are different because: Capital assets net of accumulated depreciation have not been included as financial resources in governmental fund activity Capital assets 70,981,814 Accumulated depreciation (20,426,527) Long-term liabilities have not been included in the governmental funds Compensated absences (299,057) Net OPEB liability (8,637,444) Net pension liability (8,590,199) Certain accounts and intergovernmental receivables are not available to pay for current-period expenditures and, therefore, are reflected as deferred inflows of resources in the governmental funds 59,875 Deferred outflows of resources related to pensions 2,024,383 Deferred inflows of resources related to pensions (642,246) Deferred outflows of resources related to OPEB 2,042,474 Deferred inflows of resources related to OPEB (254,322) The internal service fund is used by management to charge the costs of self-insurance activities to individual funds. The cash and investments of the internal service fund are included in governmental activities in the statement of net position because it primarily services governmental activities of the City.566,915 Net position of governmental activities 70,263,984$ ATTACHMENT A 20 City of Temple City, California Statement of Revenues, Expenditures, and Changes in Fund Balances – Governmental Funds Year Ended June 30, 2020 Public Nonmajor General Transportation Governmental Fund Prop A Funds Total Revenues Taxes 6,345,213$ -$ 1,565,816$ 7,911,029$ Licenses and permits 1,267,936 - - 1,267,936 Intergovernmental 5,544,150 703,703 3,471,350 9,719,203 Charges for services 994,072 27,365 29,500 1,050,937 Fines 541,065 - - 541,065 Investment income 536,782 17,772 130,706 685,260 Rental income 34,637 - - 34,637 Other 230,585 - 78,135 308,720 Total revenues 15,494,440 748,840 5,275,507 21,518,787 Expenditures Current: General government 5,287,395 - - 5,287,395 Community development 1,358,969 - 305,585 1,664,554 Public safety 5,473,199 - 140,250 5,613,449 Public works 1,072,981 - 1,652,151 2,725,132 Community services 2,141,520 1,253,696 148,833 3,544,049 Capital outlay 126,910 - 1,120,225 1,247,135 Total expenditures 15,460,974 1,253,696 3,367,044 20,081,714 Excess (Deficiency) of Revenues over (Under) Expenditures 33,466 (504,856) 1,908,463 1,437,073 Other Financing Sources (Uses) Transfers in 20,500 - - 20,500 Transfers out - - (20,500) (20,500) Total other financing sources (uses)20,500 - (20,500) - Net Changes in Fund Balances 53,966 (504,856) 1,887,963 1,437,073 Fund Balances, Beginning of Year 20,043,987 1,181,364 10,775,894 32,001,245 Fund Balances, End of Year 20,097,953$ 676,508$ 12,663,857$ 33,438,318$ ATTACHMENT A See Notes to Financial Statements 21 City of Temple City, California Reconciliation of the Statement of Revenues, Expenditures, and Changes in Fund Balances of Governmental Funds to the Statement of Activities Year Ended June 30, 2020 Net change in fund balances - total governmental funds 1,437,073$ Amounts reported for governmental activities in the statement of activities are different because: Governmental funds report capital outlays as expenditures. However, in the statement of activities the cost of those assets is allocated over their estimated useful lives and reported as depreciation expense. Adjustments for capital outlay, net depreciation expense, and disposition of capital assets is reported in the governmental activities Capital expenditures 869,491$ Disposal of capital assets (370,420) Depreciation (1,236,460) (737,389) Expenses reported in the statement of activities which do not require the use of current financial resources are not reported as expenditures in governmental funds Net difference between OPEB expense recorded on the government wide statement of activities and contributions paid (851,248) Net difference between pension expense recorded on the government wide statement of activities and contributions paid (786,211) Compensated absences (49,768) The internal service fund is not a governmental fund. However, it is used by management to charge the net cost of self insurance activities to individual funds. The net revenue of the internal service fund is reported with government activities 56,882 Change in net position of governmental activities (930,661)$ ATTACHMENT A See Notes to Financial Statements 22 City of Temple City, California Description of Proprietary Funds June 30, 2020 Internal Service Fund Self Insurance Fund – To account for goods and services relating to insurance premiums provided by one department to other departments on a cost reimbursement basis. ATTACHMENT A See Notes to Financial Statements 23 City of Temple City, California Statement of Net Position – Proprietary Funds June 30, 2020 Self Insurance Internal Service Fund Assets Current assets: Cash and investments 566,915$ Net Position Unrestricted 566,915 Total net position 566,915$ ATTACHMENT A See Notes to Financial Statements 24 City of Temple City, California Statement of Revenues, Expenses, and Changes in Fund Net Position – Proprietary Funds Year Ended June 30, 2020 Self Insurance Internal Service Fund Operating revenues: Interfund charges 56,882$ Changes in Net Position 56,882 Net Position - Beginning of the Year 510,033 Net Position - End of the Year 566,915$ ATTACHMENT A See Notes to Financial Statements 25 City of Temple City, California Statement of Cash Flows – Proprietary Funds Year Ended June 30, 2020 Self Insurance Internal Service Fund Operating activities: Cash received for operating activities 56,882$ Change in cash and cash equivalents 56,882 Cash and cash equivalents at beginning of year 510,033 Cash and cash equivalents at end of year 566,915$ Reconciliation of operating income to net cash provided by operating activities: Operating income 56,882$ Net cash provided by operating activities 56,882$ Noncash investing, capital, and financing activities: There were no significant noncash investing, capital, and financing activities during the year. ATTACHMENT A See Notes to Financial Statements 26 City of Temple City, California Description of Fiduciary Funds June 30, 2020 Successor Agency Private-Purpose Trust Fund To account for the resources held and administered by the City of Temple City in a fiduciary capacity acting as the Successor Agency to the former Temple City Redevelopment Agency. ATTACHMENT A See Notes to Financial Statements 27 City of Temple City, California Statement of Fiduciary Net Position June 30, 2020 Successor Agency Private-purpose Trust Fund Assets Cash and investments 1,360,996$ Cash with fiscal agent 32,664 Total assets 1,393,660 Liabilities Accounts payable 32,490 Accrued interest payable 23,956 Due to City 20,000 Noncurrent liabilities: Due within one year 545,000 Due in more than one year 1,850,000 Total liabilities 2,471,446 Fiduciary Net Position (Deficit) Total net position (deficit)(1,077,786)$ ATTACHMENT A See Notes to Financial Statements 28 City of Temple City, California Statement of Changes in Fiduciary Net Position Year Ended June 30, 2020 Successor Agency Private-purpose Trust Fund Additions Tax increment 595,794$ Deductions Administration 23,999 Interest expense and fiscal charges 74,660 Total deductions 98,659 Changes in Net Position 497,135 Net Position - Beginning of Year (1,574,921) Net Position - End of Year (1,077,786)$ ATTACHMENT A 29 City of Temple City, California Notes to Financial Statements June 30, 2020 Note 1 - Summary of Significant Accounting Policies Description of the Reporting Entity The City of Temple City, California (City) was incorporated on May 25, 1960, under the general laws of the State of California. On April 16, 1971, the City adopted resolution number 71-1084 declaring itself a charter city. The City operates under the Council - Manager form of government. The City provides the following services as authorized by its general laws: Public Safety, Highways and Streets, Health and Sanitation, Cultural and Park Facilities, Public Improvements, Planning, Recreation and General Administrative Services. The accounting policies of the City conform to generally accepted accounting principles as applicable to governments. As required by generally accepted accounting principles, these financial statements present the government and its component units, entities for which the government is considered to be financially accountable. The City is considered to be financially accountable for an organization if the City appoints a voting majority of that organization's governing body and the City is able to impose its will on that organization or there is a potential for that organization to provide specific financial benefits to or impose specific financial burdens on the City. The City is also considered to be financially accountable if an organization is fiscally dependent (i.e., it is unable to adopt its budget, levy taxes, set rates or charges, or issue bonded debt without approval from the City). In certain cases, other organizations are included as component units if the nature and significance of their relationship with the City are such that their exclusion would cause the City's financial statements to be misleading or incomplete. All of the City's component units are considered to be blended component units because in all cases the City Council serves as the governing board for each component unit. Blended component units, although legally separate entities, are, in substance, part of the City's operations, therefore data from these units are reported with the interfund data of the primary government. Management of the City has operational responsibility for each component unit, as it manages the activities of each component unit in a similar manner in which it manages other of its own programs and activities. The following organization is considered to be a component unit of the City: City of Temple City Housing Authority The City of Temple City Housing Authority (Housing Authority) was established on November 1, 2005, pursuant to the State of California Health and Safety Code 34200 entitled, "Housing Authority Law." The purpose of the Housing Authority is to provide safe and sanitary dwelling accommodations to persons of low income in the City. Even though it is legally separated, it is reported as if it is part of the City because the City Council also serves as the governing board of the Housing Authority and the City has operational responsibility of the Housing Authority. No separate financial statements are issued for the Housing Authority. ATTACHMENT A 30 City of Temple City, California Notes to Financial Statements June 30, 2020 Government-wide and Fund Financial Statements The government-wide financial statements (i.e., the statement of net position and the statement of activities) report information on all of the nonfiduciary activities of the primary government and its component units. For the most part, the effect of interfund activity has been removed from these statements, except for interfund services provided and used. The City’s governmental activities are supported by taxes and intergovernmental revenues. The statement of activities demonstrates the degree to which the direct expenses of a given function or segments are offset by program revenues. Direct expenses are those that are clearly identifiable with a specific function or segment. Indirect expenses are allocated based on the annual cost allocation plan. Program revenues include: (1) charges to customers or applicants who purchase, use, or directly benefit from goods, services, or privileges provided by a given function or segment and (2) grants and contributions that are restricted to meeting the operational or capital requirements of a particular function or segment. Taxes and other items not properly included among program revenues are reported instead as general revenues. Separate financial statements are provided for governmental funds, proprietary funds, and fiduciary funds, even though the latter are excluded from the government-wide financial statements. Major individual governmental funds are reported as a separate column in the fund financial statements. Measurement Focus, Basis of Accounting, and Financial Statement Presentation The government-wide financial statements are reported using the economic resources measurement focus and the accrual basis of accounting, as are the proprietary funds financial statements. Revenues are recorded when earned and expenses are recorded when the liability is incurred, regardless of the timing of the related cash flows. Fiduciary funds, including the private-purpose trust fund, use the economic resources measurement focus and the accrual basis of accounting. Property taxes are recognized as revenues in the fiscal year for which they are levied. Grants and similar items are recognized as revenue as soon as all eligibility requirements imposed by the provider have been met. Amounts reported as program revenues include: 1) charges to customers or applicants for goods, services, or privileges provided, 2) operating grants and contributions and 3) capital grants and contributions, including special assessments. Internally dedicated resources are reported as general revenues rather than as program revenues. Likewise, general revenues include all taxes. Governmental funds financial statements are reported using the current financial resources measurement focus and the modified accrual basis of accounting. Revenues are recognized as soon as they are both measurable and available. Revenues are considered to be available when they are collectible within the current period. For this purpose, the City considers revenues to be available if they are collected within 60 days of the end of the current fiscal period for property and sales tax, and 90 days for all other revenues. Expenditures generally are recorded when the liability is incurred, as under accrual accounting. However, debt service expenditures, as well as expenditures related to compensated absences and claims and judgments, are recorded only when payment is due. ATTACHMENT A 31 City of Temple City, California Notes to Financial Statements June 30, 2020 Property taxes, franchise taxes, licenses, and interest associated with the current fiscal period are all considered to be susceptible to accrual; therefore, they have been recognized as revenues of the current fiscal period. Only the portion of special assessments receivable due within the current fiscal period is considered to be susceptible to accrual as revenue of the current period. All other revenue items are considered to be measurable and available only when cash is received by the government. Proprietary funds distinguish operating revenues and expenses from nonoperating items. Operating revenues and expenses generally result from providing services and producing and delivering goods in connection with a proprietary fund's principal ongoing operations. The principal operating revenue of the Internal Service Fund are relating to self-insurance. Operating expenses for the Internal Service Fund include the cost of insurance premiums relating to the services provided. All revenues and expenses not meeting this definition are reported as nonoperating revenues and expenses. Although the City’s internal service fund is reported as a proprietary fund in the fund financial statements, it is incorporated into governmental activities in the government-wide financial statements. Fund Types The basic accounting and reporting entity is a "fund". A fund is defined as an independent fiscal and accounting entity with a self-balancing set of accounts, recording resources, related liabilities, obligations, reserves and equities segregated for the purpose of carrying out specific activities or attaining certain objectives in accordance with special regulations, restrictions or limitations. The accounting records of the City are organized on the basis of the various fund types as follows: Governmental Fund Types: General Fund The General Fund is the general operating fund of the City. All general tax revenues and other receipts that are not allocated by law or contractual agreement to some other fund are accounted for in this fund. Expenditures of this fund include the general operating expenses and capital improvement costs which are not paid through other funds. Special Revenue Funds The Special Revenue Funds are used to account for proceeds of specific revenue sources that are restricted by law or administrative action for specific purposes. Permanent Fund The Permanent Fund is used to account for financial resources that are legally restricted to the extent that only earnings, and not principal, may be used to support the City or its citizenry. ATTACHMENT A 32 City of Temple City, California Notes to Financial Statements June 30, 2020 Major Funds The City reports the following major governmental funds: • General Fund – To account for all of the general revenues of the City not specifically levied or collected for some special purpose, and for the expenditures related to the rendering of general services by the City. • Public Transportation – Proposition A Fund – To account for the City’s share of additional sales tax collected in the County of Los Angeles as a result of Proposition A. The fund is restricted to finance public transportation projects. Proprietary Fund Type: Internal Service Fund The Internal Service Fund is used to account for goods and services relating to insurance premiums provided by one department to other departments on a cost reimbursement basis. The City’s Internal Service Fund is the Self Insurance Fund. Fiduciary Fund Types: Successor Agency Private-purpose Trust Fund This fund is used to report the assets, liabilities and activities of the Successor Agency to the dissolved Temple City Community Redevelopment Agency. Unlike the limited reporting typically utilized for the Agency Fund, the Private-purpose Trust Fund reports a Statement of Fiduciary Net Position and a Statement of Changes in Fiduciary Net Position. Cash Equivalents For purposes of the statement of cash flows, cash equivalents are defined as short-term, highly liquid investments that are both readily convertible to known amounts of cash with maturities of three months or less at the time of purchase. Cash equivalents also represent the proprietary funds' share in the cash and investment pool of the City. Cash and Investments Cash and investments are reported in the accompanying balance sheet at fair value, except for certain certificates of deposit that are reported at cost because they are not transferable and they have terms that are not affected by changes in market interest rates. Changes in fair value that occur during a fiscal year are recognized as investment income reported for that fiscal year. Investment income includes interest earnings, changes in fair value, and any gains or losses realized upon the liquidation or sale of investments. ATTACHMENT A 33 City of Temple City, California Notes to Financial Statements June 30, 2020 The City pools cash and investments of all funds, except for assets held by fiscal agents. Each fund's share in this pool is displayed in the accompanying financial statements as cash and investments. Investment income earned by the pooled investments is allocated to the various funds based on each fund's average cash and investment balance, except for interest income (associated with funds not legally required to receive pooled investment income) that has been assigned to and recorded as revenue of the general fund, as provided by California Government Code Section 53647. Governmental Accounting Standards Board (“GASB”) Statement No. 72, Fair Value Measurements and Application, provides guidance for determining a fair value measurement for reporting purposes, applying fair value to investments, and disclosures related to a hierarchy established by generally accepted accounting principles. The fair value hierarchy, which has three levels, is based on the valuation inputs used to measure fair value: Level 1 inputs are quoted prices in active markets for identical assets; Level 2 inputs are significant other observable inputs; Level 3 inputs are significant unobservable inputs. Property Tax Calendar The County of Los Angeles assesses, levies, and collects property taxes for the City. Property taxes levied for the year ended June 30, 2020 were due and payable in two installments on November 1 and February 1 and became delinquent on December 10th and April 10th, respectively. At the date of incorporation, the City elected to be a no/low property tax city as an incentive for current and prospective residents to reside in the City. The property tax calendar is as follows: Lien Date:January 1 Levy Date July 1 Due Date:First installment - November 1 Second installment - February 1 Delinquent Date:First installment - December 10 Second installment - April 10 Taxes are collected by Los Angeles County and are remitted to the City periodically. Dates and percentages are as follows: December 10 30% Advance January 15 Collection No. 1 April 10 10% Advance May 15 Collection No. 2 July 31 Collection No. 3 Prepaid Items Certain payments to vendors reflect costs applicable to future accounting periods and are recorded as prepaid items in both the government-wide and fund financial statements. These are accounted for using the consumption method, and accordingly, the expenditure is recorded in the period in which the goods or services are received. ATTACHMENT A 34 City of Temple City, California Notes to Financial Statements June 30, 2020 Capital Assets Capital assets (including infrastructure) are valued at cost where historical records are available and at an estimated historical cost where no historical records exist. Donated capital assets are valued at their acquisition value on the date received. Public domain (infrastructure) capital assets consist of streets, bridges, traffic signals, street lights, bus shelters and sewers. Generally, the City capitalizes capital asset purchases in excess of $5,000 for general capital assets, $50,000 for sewers (infrastructure) and $10,000 for all other infrastructure and an estimated useful life in excess of one year. Capital assets used in operations are depreciated over their estimated useful lives using the straight-line method in the government-wide financial statements. Provision for depreciation is charged as an expense against operations and accumulated depreciation is reported on the statement of net position. The ranges of lives used for depreciation purposes for each capital asset class are as follows: Buildings & Improvements 40 years Furniture and equipment 5-7 years Vehicles 5 years Infrastructure: Streets 50-80 years Bridges 50 years Traffic signals 20 years Deferred Outflows and Inflows of Resources Under the modified accrual basis of accounting, it is not enough that revenue has been earned if it is to be recognized as revenue of the current period. Revenue must also be susceptible to accrual; it must be both measurable and available to finance expenditures of the current fiscal year. If assets are recognized in connection with a transaction, but those assets are not yet available to finance expenditures of the current fiscal year, then the assets must be offset by a corresponding deferred inflow of resources. This type of deferred inflow is unique to governmental funds since it is tied to the modified accrual basis of accounting. The City reports deferred outflows and inflows of resources. A deferred outflow of resources is a consumption of net position or fund balance by the government that is applicable to a future reporting period. A deferred inflow of resources represents an acquisition of net position or fund balance by the government that is applicable to a future period. The City reports deferred outflows and inflows of resources related to pensions and other post-employment benefits (OPEB) on the government-wide statement of net position, under full accrual basis of accounting. Refer to Note 8 and Note 10 for items identified as deferred inflows and outflows related to pensions and OPEB as of June 30, 2020. ATTACHMENT A 35 City of Temple City, California Notes to Financial Statements June 30, 2020 Compensated Absences Vacation time begins to accumulate as of the first day of employment to a maximum of 240 hours for non- represented employees and 320 hours for represented employees. Sick leave accumulates at the rate of 8 hours per month without limit. Employees are not entitled to compensation for accrued sick time upon separation from the City. Claims and Judgments The City records a liability for material litigation, judgments, and claims (including incurred but not reported losses) when it is probable that an asset has been impaired or a material liability has been incurred prior to year- end and the probable amount of loss (net of any insurance coverage) can be reasonably estimated. Pensions For purposes of measuring the net pension liability and deferred outflows/inflows of resources related to pensions, and pension expense, information about the fiduciary net position of the City’s California Public Employees’ Retirement System (CalPERS) plans and additions to/deductions from the Plans’ fiduciary net position have been determined on the same basis as they are reported by CalPERS. For this purpose, benefit payments (including refunds of employee contributions) are recognized when due and payable in accordance with the benefit terms. Investments are reported at fair value. Other Post-employment Benefits (OPEB) For the purposes of measuring the net OPEB liability and deferred outflows/inflows of resources related to OPEB, and OPEB expense, information about the fiduciary net position of the City’s Retiree Benefits Plan (OPEB Plan) and additions to/deductions from the OPEB Plan’s fiduciary net position have been determined on the same basis as they are reported by the OPEB Plan. For this purpose, the OPEB Plan recognizes benefit payments when due and payable in accordance with the benefit terms. Investments are reported at fair value, except for money market investments and participating interest-earning investment contracts that have a maturity date at the time or purchase of one year or less, which are reported at cost. Fund Balance Government Accounting Standards Board (GASB) Statement No. 54, Fund Balance Reporting and Government Fund-type Definitions, defines fund balance as the difference between the assets, liabilities and deferred inflows reported in the City’s governmental funds. There are generally limitations on the purpose for which all or a portion of the resources of a governmental fund may be used. The force behind these limitations can vary significantly, depending upon their source. Consequently, the fund balance reported in the annual financial statements is categorized into five components whereby each component identifies the extent to which the City is bound to honor constraints on the specific purposes for which amounts in the fund can be spent. The five components of fund balance are as follows: ATTACHMENT A 36 City of Temple City, California Notes to Financial Statements June 30, 2020 • Nonspendable: Resources that are 1) not in spendable form, such as inventories, prepayments, long-term receivables, or non-financial assets held for resale, or 2) required to be maintained intact such as an endowment. • Restricted: Resources that are subject to externally enforceable legal restrictions; these restrictions would be either 1) externally imposed by creditors (such as through debt covenants), grantors, contributors, or laws or regulations of other governments or 2) imposed by law through constitutional provisions or enabling legislation. • Committed: Resources that are constrained to specific purposes by formal action approved by the City Council, which is the City’s highest level of decision-making authority. The formal action that is required to be taken to establish, modify, or rescind a fund balance is a resolution. The constraint remains binding unless removed in the same formal manner by the City Council. Council action to commit fund balance must occur within the fiscal reporting period while the amount committed may be determined subsequently. • Assigned: Resources that are constrained by the City’s intent to be used for specific purposes, but that are neither restricted nor committed. The City Council delegates the authority to assign fund balance to the City Manager for purposes of reporting in the annual financial statements. This was established by the governing body in the GASB 54 Fund Balance Policy resolution adopted and approved on May 15, 2012. • Unassigned: Within the General Fund, the residual resources, either positive or negative, in excess of what can be properly classified in one of the other four fund balance categories. Within all other governmental funds, the negative residual resources in excess of what can be properly classified as nonspendable, restricted, or committed. The City considers the restricted fund balances to have been spent when an expenditure is incurred for purposes for which both unrestricted and restricted fund balance is available. When expenditures are incurred for purposes for which amounts in any of the unrestricted fund balance classifications could be used, it is the policy of the City to reduce the committed amounts first, followed by assigned amounts, and then unassigned amounts. Net Position The government-wide financial statements utilize a net position presentation. Net position is categorized as net investment in capital assets, restricted and unrestricted. When both restricted and unrestricted resources are available for use, it is the government’s policy to use restricted resources first, then unrestricted resources as they are needed. • Net investment in capital assets – This category groups all capital assets, including infrastructure, into one component of net position. Accumulated depreciation and the outstanding balances of debt that are attributable to the acquisition, construction or improvement of these assets reduce the balance of this category. ATTACHMENT A 37 City of Temple City, California Notes to Financial Statements June 30, 2020 • Restricted net position – This category presents external restrictions imposed by creditors, grantors, contributors, laws or regulations of other governments and restrictions imposed by law through constitutional provisions or enabling legislation. • Unrestricted net position – This category represents the City’s net position, which is not restricted for any project or other purpose. Use of Estimates The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses, during the reporting period. Actual results could differ from those estimates. Pronouncements Adopted in the Current Year GASB Statement No. 95– In May 2020, the GASB issued Statement No. 95, Postponement of the Effective Dates of Certain Authority Guidance. The objective of this Statement is to provide temporary relief to governments and other stakeholders in light of the COVID-19 pandemic. The requirements of this Statement are effective immediately as they delayed the effective dates of several GASB Statements. The effective dates listed in the Future Governmental Accounting Standards Board (GASB) Pronouncement section have been updated to reflect the postponed effective dates. Pronouncements Effective in Future Years The City is currently evaluating the potential impact of the following issued, but not yet effective accounting statements: GASB Statement No. 84 – In January 2017, GASB issued Statement No. 84, Fiduciary Activities. The objective of this Statement is to improve guidance regarding the identification of fiduciary activities for accounting and financial reporting purposes and how those activities should be reported. This Statement is effective for reporting periods beginning after December 15, 2019. GASB Statement No. 87 – In June 2017, GASB issued Statement No. 87, Leases. The objective of this Statement is to better meet the information needs of financial statement users by improving accounting and financial reporting for leases; enhancing the comparability of financial statements between governments; and also enhancing the relevance, reliability (representational faithfulness), and consistency of information about the leasing activities of governments. This Statement is effective for reporting periods beginning after June 15, 2021. GASB Statement No. 89 – In June 2018, the GASB issued Statement No. 89, Accounting for Interest Cost Incurred Before the End of a Construction Period. The objectives of this Statement are (a) to enhance the relevance and comparability of information about capital assets and the cost of borrowing for a reporting period and (b) to simplify accounting for certain interest costs. This Statement is effective for reporting periods beginning after December 15, 2020. ATTACHMENT A 38 City of Temple City, California Notes to Financial Statements June 30, 2020 GASB Statement No. 90 – In September 2018, the GASB issued Statement No. 90, Majority Equity Interests, An Amendment of GASB Statements No. 14 and No. 61. The objectives of this Statement are to improve the consistency and comparability of reporting a government’s majority equity interest in a legally separate organization and to improve the relevance of financial statement information for certain component units. The Statement is effective for reporting periods beginning after December 15, 2019. GASB Statement No. 91 – In May 2019, the GASB issued Statement No. 91, Conduit Debt Obligations. The objective of this Statement is to provide a single method of reporting conduit debt obligations by issues and eliminate diversity in practice. The Statement is effective for reporting periods beginning after December 15, 2021. GASB Statement No. 92 – In January 2020, the GASB issued Statement No. 92, Omnibus 2020. The objectives of this Statement are to enhance comparability in accounting and financial reporting to improve the consistency of authoritative literature by addressing practices issues that have been identified during implementation and application of certain GASB Statements. The Statement is effective for reporting periods beginning after June 15, 2021. GASB Statement No. 93– In March 2020, the GASB issued Statement No. 93, Replacement of Interbank Offered Rates. The objective of this Statement is to address the accounting and financial reporting implications that result from the replacement of an IBOR. The Statement is effective for reporting periods beginning after June 15, 2021. GASB Statement No. 94– In March 2020, the GASB issued Statement No. 94, Public-Private and Public-Public Partnerships and Availability Payment Arrangements. The objective of this Statement is to improve financial reporting by addressing issues related to public-private and public-public partnership arrangements (PPPs). The Statement is effective for reporting periods beginning after June 15, 2022. GASB Statement No. 96– In May 2020, the GASB issued Statement No. 96, Subscription-based Information Technology Arrangements. The objective of this Statement is to provide guidance on the accounting and financial reporting for subscription-based information technology arrangements (SBITAs) for government end users (governments). The Statement is effective for reporting periods beginning after June 15, 2022. GASB Statement No. 97– In June 2020, the GASB issued Statement No. 97, Certain Component Unit Criteria, and Accounting and Financial Reporting For Internal Revenue Code Section 457 Deferred Compensation Plans – An Amendment of GASB Statement No.14 and No.84 and A Supersession of GASB Statement No.32. The objective of this Statement is (1) increase consistency and comparability related to the reporting of fiduciary component units in circumstances in which a potential component unit does not have a governing board and the primary government performs the duties that a governing board typically would perform; (2) mitigate costs associated with the reporting of certain defined contribution pension plans, defined contribution other postemployment benefit (OPEB) plans, and employee benefit plans other than pension plans or OPEB plans (other employee benefit plans) as fiduciary component units in fiduciary fund financial statements; and (3) enhance the relevance, consistency, and comparability of the accounting and financial reporting for Internal Revenue Code (IRC) Section 457 deferred compensation plans (Section 457 plans) that meet the definition of a pension plan and for benefits provided through those plans. The Statement is effective for reporting periods beginning after June 15, 2021. ATTACHMENT A 39 City of Temple City, California Notes to Financial Statements June 30, 2020 Note 2 - Stewardship, Compliance and Accountability Excess of Expenditures Over Appropriations Expenditures for the year ended June 30, 2020, exceeded appropriations in the following funds: Final Budget Expenditures Excess Major Funds: General Fund: Community development: Planning 697,224$ 697,415$ 191 Building 582,264 633,797 51,533$ Public safety: Emergency services 205,004$ 211,256$ 6,252 Public work: Administration & engineering 503,514$ 543,879$ 40,365 General government buildings 326,104 427,197 101,093 Capital outlay 105,030 126,910 21,880 Non-major Funds: Measure M 155,200$ 180,408$ 25,208$ Park Acquisition - Capital Outlay 26,000 27,232 1,232 Fund Note 3 - Cash and Investments Cash and investments at June 30, 2020 are classified in the accompanying financial statements as follows: Statement of Net Position: Cash and investments 34,593,123$ Fiduciary Fund: Cash and investments 1,360,996 Cash with fiscal agent 32,664 Total cash and investments 35,986,783$ Cash and investments as of June 30, 2020 consist of the following: Cash on hand 1,600$ Deposits with financial institutions 10,522,299 Investments 25,462,884 Total cash and investments 35,986,783$ ATTACHMENT A 40 City of Temple City, California Notes to Financial Statements June 30, 2020 Investments Authorized by the California Government Code and the City’s Investment Policy The accompanying table below identifies the investment types that are authorized for the City by the California Government Code (or the City's investment policy, where more restrictive). The table also identifies certain provisions of the California Government Code (or the City's investment policy, where more restrictive) that address interest rate risk, credit risk, and concentration of credit risk. This table does not address investments of debt proceeds held by the bond trustee that are governed by the provisions of debt agreements of the City, rather than the general provisions of the California Government Code or the City's investment policy. Authorized Maximum Maximum Investment Maximum Percentage Investment Policy Maturity of Portfolio In One Issuer Local Agency Bonds No 5 years None None U.S. Treasury Obligations Yes 5 years None None U.S. Agency Securities Yes 5 years None None State of California Obligation No 5 years None None Local Agency Obligation No 5 years None None Banker's Acceptances*No 180 days 40%30% Commercial Paper**No 270 days 25%10% Certificates of Deposit Yes 5 years 30%None Repurchase Agreements No 1 year None None Reverse Repurchase Agreements***No 92 days 20% of base value None Medium-Term Notes Yes 5 years 30%None Mutual Funds****No N/A 20%10% Money Market Mutual Funds Yes N/A 20%None Collateralized Bank Deposits Yes 5 years None None Mortgage Pass-Through Securities No 5 years 20%None County Pooled Investment Funds Yes N/A None None Local Agency Investment Fund (LAIF)Yes N/A None None Investment Types Authorized by State Law * No more than 30% of surplus funds may be invested in Bankers Acceptances of any one commercial bank. ** Commercial paper issuers must be U.S. Corporations with $500 million plus in assets. Purchases may not represent more than 10% of outstanding paper of an issuing corporation. *** Reverse Repurchase Agreements must be made with primary dealers of the Federal Reserve Bank of New York and the securities used for the agreements must have been held by the issuer for at least 30 days. **** No more than 10% of the City’s surplus funds may be invested in any one mutual fund. ATTACHMENT A 41 City of Temple City, California Notes to Financial Statements June 30, 2020 Disclosures Relating to Interest Rate Risk Interest rate risk is the risk that changes in market interest rates will adversely affect the fair value of an investment. Generally, the longer the maturity of an investment the greater the sensitivity of its fair value to changes in market interest rates. One of the ways that the City manages its exposure to interest rate risk is by purchasing a combination of shorter-term and longer-term investments and by timing cash flows from maturities so that a portion of the portfolio is maturing or coming close to maturity over time as necessary to provide the cash flow and liquidity needed for operations. Information about the sensitivity of the fair values of the City's investments, and those held by bond trustees, to market interest rate fluctuations is provided by the following table that shows the distribution of the City's investments by maturity: 12 Months or 12 to 60 Total Less Months State Investment Pool (LAIF)7,015,714$ 7,015,714$ -$ Los Angeles County Investment Pool 4,915,430 4,915,430 - Medium-Term Notes 3,893,592 - 3,893,592 Federal Agency Securities 2,254,169 - 2,254,169 Certificates of Deposit 7,383,979 1,977,749 5,406,230 25,462,884$ 13,908,893$ 11,553,991$ Remaining Maturing (in Months) The City can make withdrawals from LAIF and the Los Angeles County Investment Pool on demand. As of June 30, the weighted average maturity of the investments contained in the LAIF investment pool is approximately 6 months and for the Los Angeles County Investment Pool is approximately 590 days. Disclosures Relating to Credit Risk Generally, credit risk is the risk that an issuer of an investment will not fulfill its obligation to the holder of the investment. This is measured by the assignment of a rating by a nationally recognized statistical rating organization. Presented below is the minimum rating required by (where applicable) the California Government Code, the City’s investment policy, or debt agreements, and the actual rating, as reported by Standard & Poor’s, as of year-end for each investment type: Minimum Legal Not Amount Rating AAA/AA+AA-/A Rated State Investment Pool (LAIF)7,015,714$ N/A -$ -$ 7,015,714$ Los Angeles County Investment Pool 4,915,430 N/A - - 4,915,430 Medium-Term Notes 3,893,592 A 505,490 3,388,102 - Federal Agency Securities 2,254,169 N/A 2,254,169 - - Certificates of Deposit 7,383,979 N/A - - 7,383,979 25,462,884$ 2,759,659$ 3,388,102$ 19,315,123$ Rating as of June 30, 2020 ATTACHMENT A 42 City of Temple City, California Notes to Financial Statements June 30, 2020 Concentration of Credit Risk The investment policy of the City contains no limitations on the amount that can be invested in any one issuer beyond that stipulated by the California Government Code. As of June 30, 2020, the investments in any one issuer (other than U.S. Treasury Securities, mutual funds, and external investment pools) that represent 5 percent or more of the City’s total investments are as follows: Percent of Investment Type Amount Portfolio Toronto - Dominion Bank Medium-Term Notes 1,499,030 6% Issuer Custodial Credit Risk Custodial credit risk for deposits is the risk that, in the event of the failure of a depository financial institution, a government will not be able to recover its deposits or will not be able to recover collateral securities that are in the possession of an outside party. The custodial credit risk for investments is the risk that: in the event of the failure of the counterparty (e.g., broker-dealer) to a transaction, a government will not be able to recover the value of its investment or collateral securities that are in the possession of another party. The California Government Code and the City's investment policy do not contain legal or policy requirements that would limit the exposure to custodial credit risk for deposits or investments, other than the following provision for deposits: The California Government Code requires that a financial institution secure deposits made by state or local governmental units by pledging securities in an undivided collateral pool held by a depository regulated under state law (unless so waived by the governmental unit). The market value of the pledged securities in the collateral pool must equal at least 110 percent of the total amount deposited by the public agencies. California law also allows financial institutions to secure City deposits by pledging first trust deed mortgage notes having a value of 150 percent of the secured public deposits. Fair Value Classifications Fair value measurements are categorized based on the valuation inputs used to measure fair value: Level 1 inputs are quoted prices in active markets for identical asset assets; Level 2 inputs are significant other observable inputs; Level 3 inputs are significant unobservable inputs. Investments categorized as Level 2 are valued using the market approach and quoted market prices. ATTACHMENT A 43 City of Temple City, California Notes to Financial Statements June 30, 2020 Investments' fair value measurements are as follows as of June 30, 2020: Fair Value Level 1 Level 2 Level 3 Investments: Medium-Term Notes 3,893,592$ -$ 3,893,592$ -$ Federal Agency Securities 2,254,169 - 2,254,169 - Certificates of Deposit 7,223,979 - 7,223,979 - Total leveled investments 13,371,740 - 13,371,740 - Investments: Los Angeles County Investment Pool 4,915,430 State Investment Pool (LAIF)7,015,714 Non-negotiable Certificates of Deposit 160,000 Total investment portfolio 25,462,884$ Investment Type As of June 30, 2020, the City’s investments in government sponsored entities (e.g. FHLB, FHLMC, etc.), medium- term notes and Certificate of Deposit were considered Level 2 in the amount of $13,371,740. These investments are value using the market valuation approach based on quoted prices for similar assets. Investments in LAIF and LACPIF, are uncategorized as deposits and withdrawals are made on the basis of $1 and not fair value. Investment in State Investment Pool The City is a voluntary participant in the Local Agency Investment Fund (LAIF) that is regulated by the California Government Code under the oversight of the Treasurer of the State of California. The fair value of the City's investment in this pool is reported in the accompanying financial statements at amounts based upon the City's pro-rata share of the fair value provided by LAIF for the entire LAIF portfolio (in relation to the amortized cost of that portfolio). The balance available for withdrawal is based on the accounting records maintained by LAIF, which are recorded on an amortized cost basis. LAIF is not registered with the Securities and Exchange Commission and is not rated. Investment in County Investment Pool The Los Angeles County Pooled Investment Fund (LACPIF) is a pooled investment fund program governed by the Los Angeles County Board of Supervisors and administered by the Los Angeles County Treasurer and Tax Collector. Investments in the LACPIF are highly liquid, as deposits and withdrawals can be made at any time without penalty. The LACPIF does not impose any maximum investment limit. The fair value of the City’s investment in this pool is reported in the accompanying financial statements at amounts based upon the City’s prorated share of the fair value provided by the LACPIF for the entire LACPIF portfolio (in relation to the amortized cost of that portfolio). The balance available for withdrawal is based on the accounting records maintained by the LACPIF, which are recorded on an amortized cost basis. LACPIF is not registered with the Securities and Exchange Commission and is not rated. ATTACHMENT A 44 City of Temple City, California Notes to Financial Statements June 30, 2020 Note 4 - Interfund Activity The following represents the interfund activity of the City for the year ended June 30, 2020: Due From/To Other Funds: Amount General Fund Non-major Governmental Funds 98,836$ Due from (receivable fund)Due to (payable fund) The General Fund receivable from non-major governmental funds represents the elimination of negative cash balances in the funds. Transfers To/From Other Funds: Amount General Fund Nonmajor Governmental Funds 20,500$ Total 20,500$ Transfer In Transfers Out Transfers to/from other funds are based on the budget funding sources that the City Council approved. The City transfers monies from various funds to the General Fund for projects related to trees and parkways. Note 5 - Loans Receivable Loans receivable consist of the following at June 30, 2020: Amount General Fund: Low and Moderate Income Housing 56,775$ (A) Temple City Chamber of Commerce 1,600 (B) 58,375 Community Development Block Grant: Home Improvement Loans 1,202,944 (C) Total 1,261,319$ Description (A) During the 2008-09 fiscal year, the City issued three housing loans totaling $56,775. These loans are zero interest loans and are deferred until the secured property is sold or changes title. (B) On April 4, 1995, the City issued a loan to the Temple City Chamber of Commerce in the amount of $13,600 with an annual payment amount of $500. (C) The City uses Community Development Block Grant funds to issue loans to low and moderate income homeowners for repairs of building and zoning code violations. These loans are low interest loans and can be deferred until the secured property is sold or changes title. The maximum amount of each loan is $25,000. ATTACHMENT A 45 City of Temple City, California Notes to Financial Statements June 30, 2020 Note 6 - Capital Assets Capital asset governmental activity for the fiscal year ended June 30, 2020 was as follows: Balance Balance July 1, 2019 Additions Deletions June 30, 2020 Capital assets not being depreciated: Land 4,338,704$ -$ -$ 4,338,704$ Land improvements 2,494,650 - - 2,494,650 Construction in progress 209,053 312,863 (40,281) 481,635 Infrastructure: Land rights relating to streets 8,465,941 - - 8,465,941 Total 15,508,348 312,863 (40,281) 15,780,930 Capital assets being depreciated: Buildings 7,443,169 - (529,172) 6,913,997 Improvements 6,362,654 33,126 - 6,395,780 Furniture, fixtures and equipment 1,149,296 - - 1,149,296 Vehicles 646,562 - - 646,562 Infrastructure: Streets 35,083,585 563,783 - 35,647,368 Traffic signals 3,489,878 - - 3,489,878 Bridges 958,003 - - 958,003 Total 55,133,147 596,909 (529,172) 55,200,884 Less accumulated depreciation for: Buildings 2,901,849 167,249 (158,752) 2,910,346 Improvements 3,162,576 153,053 - 3,315,629 Furniture, fixtures and equipment 996,542 35,468 - 1,032,010 Vehicles 523,860 13,793 - 537,653 Infrastructure: Streets 9,320,632 750,737 - 10,071,369 Traffic signals 1,485,357 116,160 - 1,601,517 Bridges 958,003 - - 958,003 Total 19,348,819 1,236,460 (158,752) 20,426,527 Capital assets being depreciated, net 35,784,328 (639,551) (370,420) 34,774,357 Capital Assets, Net 51,292,676$ (326,688)$ (410,701)$ 50,555,287$ Governmental Activities ATTACHMENT A 46 City of Temple City, California Notes to Financial Statements June 30, 2020 Depreciation expense is charged to operations, as follows: General government 91,463$ Community development 3,229 Public safety 7,433 Public works 916,967 Community services 217,368 Total depreciation expense - governmental activities 1,236,460$ Note 7 - Compensated Absences The following is a summary of changes in the City’s long-term liabilities for the year ended June 30, 2020: Balance at Balance Due Within July 1, 2019 Additions Reductions June 30, 2020 One Year Compensated absences 249,289$ 68,901$ (19,133)$ 299,057$ 29,906$ For the compensated absences, the general fund has been used to liquidate such amounts. Note 8 - Defined Benefit Pension Plan Plan Description – All qualified permanent and probationary employees are eligible to participate in the City’s Miscellaneous Employee Pension Plan (Plan), a cost-sharing multiple employer defined benefit pension plan administered by the California Public Employees’ Retirement System (CalPERS). Benefit provisions under the Plan are established by State statute and the City’s resolution. CalPERS issues publicly available reports that include a full description of the pension plan regarding benefit provisions, assumptions and membership information that can be found on the CalPERS website. Classic participants (defined as eligible participants prior to January 1, 2013) are required to contribute 8 percent of their annual covered salary. New or Public Employees’ Pension Reform Act of 2013 (PEPRA) participants (defined as eligible employees brought into CalPERS membership for the first time on or after January 1, 2013) contribute at least half the normal cost rate as determined by CalPERS. The City contributes the remaining amounts necessary to fund the benefits for its employees, using the actuarial basis adopted by the CalPERS Board of Administration. Benefits Provided – CalPERS provides service retirement and disability benefits, annual cost of living adjustments and death benefits to Plan members, who must be public employees and beneficiaries. Benefits are based on years of credited service, equal to one year of full-time employment. Members with five years of total service are eligible to retire at age 50 with statutorily reduced benefits. All members are eligible for non-duty disability benefits after 10 years of service. The death benefit is one of the following: the Basic Death Benefit, the 1957 Survivor Benefit, or the Optional Settlement 2W Death Benefit. The cost of living adjustments for each plan are applied as specified by the California Public Employees’ Retirement Law. ATTACHMENT A 47 City of Temple City, California Notes to Financial Statements June 30, 2020 The Plans’ provisions and benefits in effect at June 30, 2020 are summarized as follows: Classic PEPRA Prior to On or after Hire Date January 1, 2013 January 1, 2013 Benefit formula 2.5% @ 55 2% @ 62 Benefit vesting schedule 5 years of service 5 years of service Benefit payments monthly for life monthly for life Retirement age 50-55 52-67 Monthly benefits, as a % of eligible compensation 2.0% to 2.7%1.0% to 2.5% Required employee contribution rates 8%6.50% Required employer contribution rates 12.14%7.07% Miscellaneous Plan Contributions – Section 20814 (c) of the California Public Employees’ Retirement Law requires that the employer contribution rates for all public employers are determined on an annual basis by the actuary and shall be effective on July 1st following notice of a change in the rate. Funding contributions for the Plan are determined annually on an actuarial basis as of June 30 by CalPERS. Beginning in fiscal year 2016, CalPERS collects employer contributions for the Plan as a percentage of payroll for the normal cost portion as noted in the rates above and as a dollar amount for contributions toward the unfunded liability. The dollar amounts are billed on a monthly basis. The City’s contributions to the pension plan were $886,665 for the year ended June 30, 2020. Pension Liabilities, Pension Expenses and Deferred Outflows/Inflows of Resources Related to Pensions – As of June 30, 2020, the City reported a net pension liability for its proportionate share of the net pension liability of the Miscellaneous Plan in the amount of $8,590,199. The City’s net pension liability for the Plan was measured as the proportionate share of the net pension liability of the collective cost-sharing plan. The City’s net pension liability was measured as of June 30, 2019 and the total pension liability used to calculate the net pension liability was determined by an actuarial valuation as of June 30, 2018, rolled forward to June 30, 2019 using standard update procedures. The City’s proportion of the net pension liability was based on a projection of the City’s long-term share of contributions to the pension plan relative to the projected contributions of all participating employers, actuarially determined. The City’s proportionate share of the net pension liability for the Plan as of June 30, 2018 and 2019 was as follows: Proportion - June 30, 2018 0.08208% Proportion - June 30, 2019 0.08383% Change - Increase (Decrease)0.00175% ATTACHMENT A 48 City of Temple City, California Notes to Financial Statements June 30, 2020 For the year ended June 30, 2020, the City recognized pension expense of $1,672,876. At June 30, 2020, the City reported deferred outflows of resources and deferred inflows of resources related to pensions from the following sources: Deferred Outflows Deferred Inflows of Resources of Resources Pension contributions subsequent to measurement date 886,665$ -$ Differences between expected and actual experience 596,625 46,226 Changes in assumptions 409,620 145,207 Changes in proportion and difference between City's contributions and proportionate share of contributions - 250,010 Changes in employer's proportion 131,473 50,620 Net difference between projected and actual earnings on pension plan investments - 150,183 Total 2,024,383$ 642,246$ The amount of $886,665 reported as deferred outflows of resources related to contributions subsequent to the measurement date will be recognized as a reduction of the net pension liability in the year ended June 30, 2021. Other amounts reported as deferred outflows of resources and deferred inflows of resources related to pensions will be recognized as pension expense as follows: 2021 537,214$ 2022 (134,871) 2023 62,781 2024 30,348 Total 495,472$ Year Ended June 30, Actuarial Assumptions – The total pension liabilities in the June 30, 2018 actuarial valuations were determined using the following actuarial assumptions: Valuation Date June 30, 2018 Measurement Date June 30, 2019 Actuarial Cost Method Entry-Age Normal Cost Method Actuarial Assumptions Discount Rate 7.15% Inflation 2.50% Salary Increases Varies by Entry Age and Service Investment Rate of Return 7.15% Mortality Rate Table Derived using CalPERS' Membership Data for all Funds Miscellaneous ATTACHMENT A 49 City of Temple City, California Notes to Financial Statements June 30, 2020 All other actuarial assumptions used in the June 30, 2018 valuation were based on the results of an experience study from December 2017. Further details of the Experience Study can be found on the CalPERs website. Discount Rate –The discount rate used to measure the total pension liability was 7.15 percent for the plan. The projection of cash flows used to determine the discount rate assumed that employee contributions will be made at the current contribution rate and that the City’s contributions will be made at rates equal to the difference between actuarially determined contributions rates and the employee rate. Based on those assumptions, each pension plan’s fiduciary net position was projected to be available to make all projected future benefit payments of current active and inactive employees. Therefore, the long-term expected rate of return on pension plan investments was applied to all periods of projected benefit payments to determine the total pension liability. In determining the long-term expected 7.15 percent rate of return on pension plan investments, CalPERS took into account both short and long-term market return expectations as well as the expected pension fund cash flows. Such cash flows were developed assuming that both members and employers will make their required contributions on time and as scheduled in all future years. Using historical returns of all the pension funds’ asset classes, expected compound (geometric) returns were calculated over the short-term (first 10 years) and the long-term (11+ years) using a building-block approach. Using the expected nominal returns for both short-term and long-term, the present value of benefits was calculated for each fund. The expected rate of return was set by calculating the single equivalent expected return that arrived at the same present value of benefits for cash flows as the one calculated using both short-term and long-term returns. The expected rate of return was then set equivalent to the single equivalent rate calculated above and adjusted to the account for assumed administrative expenses. The table below reflects long-term expected real rate of return by asset class. The rate of return was calculated using the capital market assumptions applied to determine the discount rate and asset allocation. Current Target Real Return Real Return Allocation Years 1 - 10 (a)Years 11 + (b) Global Equity 50.0%4.80%5.98% Global Fixed Income 28.0%1.00%2.62% Inflation Assets 0.0%0.77%1.81% Private Equity 8.0%6.30%7.23% Real Estate 13.0%3.75%4.93% Liquidity 1.0%0.00%-0.92% Total 100.0% (a) An expected inflation of 2.00% used for this period (b) An expected inflation of 2.92% used for this period Asset Class ATTACHMENT A 50 City of Temple City, California Notes to Financial Statements June 30, 2020 Sensitivity of the Proportionate Share of the Net Pension Liability to Changes in the Discount Rate - The following presents the City’s proportionate share of the net pension liability, calculated using the discount rate of 7.15 percent, as well as what the City’s proportionate share of the net pension liability would be if it were calculated using a discount rate that is 1-percentage point lower (6.15 percent) or 1-percentage point higher (8.15 percent) than the current rate: Discount Current Discount Rate - 1%Discount Rate Rate +1% (6.15%)(7.15%)(8.15%) City's proportionate share of the net pension liability 12,922,015$ 8,590,199$ 5,014,590$ Pension Plan Fiduciary Net Position - Detailed information about the Plan’s fiduciary net position is available in the separately issued CalPERS financial reports. Note 9 - Liability, Property and Workers’ Compensation Protection Description of Self-Insurance Pool Pursuant to Joint Powers Agreement The City is a member of the California Joint Powers Insurance Authority (“CJPIA”). The CJPIA is composed of 118 California public entities and is organized under a joint powers agreement pursuant to California Government Code §6500 et seq. The purpose of the CJPIA is to arrange and administer programs for the pooling of self- insured losses, to purchase excess insurance or reinsurance, and to arrange for group purchased insurance for property and other lines of coverage. The California JPIA began covering claims of its members in 1978. Each member government has an elected official as its representative on the Board of Directors. The Board operates through a nine-member Executive Committee. Self-Insurance Programs of the CJPIA Each member pays an annual contribution at the beginning of the coverage period. A retrospective adjustment is then conducted annually thereafter, for coverage years 2012-13 and prior. Coverage years 2013-14 and forward are not subject to routine annual retrospective adjustment. The total funding requirement for self- insurance programs is based on an actuarial analysis. Costs are allocated to individual agencies based on payroll and claims history, relative to other members of the risk-sharing pool. Primary Liability Program Claims are pooled separately between police and general government exposures. (1) The payroll of each member is evaluated relative to the payroll of other members. A variable credibility factor is determined for each member, which establishes the weight applied to payroll and the weight applied to losses within the formula. (2) The first layer of losses includes incurred costs up to $30,000 for each occurrence and is evaluated as a percentage of the pool’s total incurred costs within the first layer. (3) The second layer of losses includes incurred costs from $30,000 to $750,000 for each occurrence and is evaluated as a percentage of the pool’s total incurred costs within the second layer. (4) Incurred costs from $750,000 to $50 million, are distributed based on the outcome of cost allocation within the first and second loss layers. ATTACHMENT A 51 City of Temple City, California Notes to Financial Statements June 30, 2020 For 2019-20, the CJPIA’s pooled retention is $3 million per occurrence, with reinsurance to $30 million, and excess insurance to $50 million. The CJPIA’s reinsurance contracts are subject to the following additional pooled retentions: (a) $2 million in excess of $3 million layer, (b) $2 million annual aggregate deductible in the $5 million in excess of $5 million layer (c) $3 million annual aggregate deductible in the $10 million in excess of $10 million layer and (d) $10 million in excess of $20 million layer. The overall coverage limit for each member, including all layers of coverage, is $50 million per occurrence. Costs of covered claims for subsidence losses have a sub-limit of $40 million per occurrence. Workers’ Compensation Program Claims are pooled separately between public safety (police and fire) and general government exposures. (1) The payroll of each member is evaluated relative to the payroll of other members. A variable credibility factor is determined for each member, which establishes the weight applied to payroll and the weight applied to losses within the formula. (2) The first layer of losses includes incurred costs up to $50,000 for each occurrence and is evaluated as a percentage of the pool’s total incurred costs within the first layer. (3) The second layer of losses includes incurred costs from $50,000 to $100,000 for each occurrence and is evaluated as a percentage of the pool’s total incurred costs within the second layer. (4) Incurred costs from $100,000 to statutory limits are distributed based on the outcome of cost allocation within the first and second loss layers. For 2019-20, the CJPIA’s pooled retention is $1 million per occurrence, with reinsurance to statutory limits under California Workers’ Compensation Law. Employer’s Liability losses are pooled among members to $1 million. Coverage from $1 million to $5 million is purchased as part of a reinsurance policy, and Employer’s Liability losses from $5 million to $10 million are pooled among members. Purchased Insurance Pollution Legal Liability Insurance The City participates in the pollution legal liability insurance program which is available through the CJPIA. The policy covers sudden and gradual pollution of scheduled property, streets, and storm drains owned by the City. Coverage is on a claims-made basis. There is a $50,000 deductible. The CJPIA has an aggregate limit of $50 million for the 3-year period from July 1, 2017 through July 1, 2020. Each member of the CJPIA has a $10 million sub-limit during the 3-year policy term. Property Insurance The City participates in the all-risk property protection program of the CJPIA. This insurance protection is underwritten by several insurance companies. The City’s property is currently insured according to a schedule of covered property submitted by the City to the CJPIA. The City’s property currently has all-risk property insurance protection in the amount of $47,175,751. There is a $10,000 deductible per occurrence except for non- emergency vehicle insurance which has a $2,500 deductible. Earthquake and Flood Insurance The City purchases earthquake and flood insurance on a portion of its property. The earthquake insurance is part of the property protection insurance program of the CJPIA. City’s property currently has earthquake protection in the amount of $11,273,974. There is a deductible of 5% per unit of value with a minimum deductible of $100,000. ATTACHMENT A 52 City of Temple City, California Notes to Financial Statements June 30, 2020 Crime Insurance The City purchases crime insurance coverage in the amount of $1,000,000 with a $2,500 deductible. The fidelity coverage is provided through the CJPIA. Special Event Tenant User Liability Insurance The City further protects against liability damages by requiring tenant users of certain property to purchase low- cost tenant user liability insurance for certain activities on agency property. The insurance premium is paid by the tenant user and is paid to the City according to a schedule. The City then pays for the insurance. The insurance is facilitated by the CJPIA. Adequacy of Protection During the past three fiscal years, none of the above programs of protection experienced settlements or judgments that exceeded pooled or insured coverage. There were also no significant reductions in pooled or insured liability coverage in 2019-20. CJPIA premiums for fiscal year 2020 were $603,557. Since claims are paid by the CJPIA and, in effect, charged back to the City via future insurance deposits, no long-term liability for claims has been recorded. Note 10 - Other Postemployment Benefit Plan Plan Description The City of Temple City Retiree Healthcare Plan (“OPEB Plan”) is an agent multiple employer defined benefit healthcare plan with Public Agency Retirement Services (PARS). Benefits vary by hire date and employment status. Benefits continue to dependents, including surviving spouses. Benefits Provided Employees who retire directly from the City under CalPERS are eligible to receive health care benefits covering themselves and any qualified family members under the OPEB Plan. The City pays 100 percent of the cost of the medical insurance premiums of the retired employees and 50 percent of the cost of the medical insurance premiums of their family members. Employees retired on or after April 1, 2000 receive full dental and vision premiums. Dependent coverage for dental and vision is available at the employee’s expense. Surviving spouses may receive the full premium with their dependents receiving 50 percent of the premium. ATTACHMENT A 53 City of Temple City, California Notes to Financial Statements June 30, 2020 Employee Covered by Benefit Terms At June 30, 2019, most recent measurement date, the benefit terms covered the following employees: Inactive employees or beneficiaries currently receiving benefits payments 33 Active employees 46 Total 79 Contributions The City establishes rates based on an actuarially determined rate. For the year ended June 30, 2020, the City’s expected contribution rate is 7.5 percent of covered-employee payroll. Employees pay the difference between the benefit they receive and the monthly premium. The City paid $266,639 in contributions during the year. Net OPEB Liability The City’s net OPEB liability was measured as the total OPEB liability, less the OPEB Plan’s fiduciary net position. The net OPEB liability was measured as of June 30, 2019, using an actuarial valuation as of June 30, 2019. A summary of principal assumptions and methods used to determine the net OPEB liability is shown below. Actuarial Assumption – The total OPEB liability in the June 30, 2019 actuarial valuation was determined using the following actuarial assumptions, applied to all periods included in the measurement, unless otherwise specified: Actuarial Cost Method Actuarial Assumptions: Discount Rate 3.52% Inflation 2.75% Aggregate salary increases 3% annually. Merit increases based on CalPERS 1997-2015 experience study Payroll Growth 2015 Experience Study Investment Rate of Return 6.00% Mortality Based on CalPERS 1997-2015 experience study Mortality Improvement Post-retirement mortality projected fully generational with Scale MP-2018 Non-Medicare - 7.25% for 2021, decreasing to an ultimate rate of 4.0% in 2076 Medical Trend Changes of assumptions – The discount rate of 3.52 percent used for the June 30, 2019 measurement date was decreased from 4.10 percent used for the June 30, 2018 measurement date. Discount Rate – The discount rate used to measure the total OPEB liability was 3.52 percent. The discount rate was updated based on the crossover test. The projection of cash flows used to determine the discount rate assumed that the City will contribute pay-as-you-go only. ATTACHMENT A 54 City of Temple City, California Notes to Financial Statements June 30, 2020 The long-term expected rate of return on OPEB plan investments was determined using a building-block method in which best-estimated ranges of expected future real rates of return (expected returns, net of OPEB plan investment expense and inflation) are developed for each major asset class. These ranges are combined to produce the long-term expected rate of return by weighting the expected future real rates of return by the target asset allocation percentage and by adding expected inflation. The target allocation and best estimates of the arithmetic real rates of return for each major asset class are summarized in the following table: Target Allocation Global Equity 48.0% Fixed Income 45.0% REITs 2.0% Cash 5.0% Total 100% 0.06% Long-Term Expected Asset Class Real Rate of Return 4.82% 1.47% 3.76% Changes in Net OPEB Liability Total OPEB Plan Fiduciary Net OPEB Liability Net Position Liability Balance at June 30, 2019 8,596,635$ 1,460,161$ 7,136,474$ Changes in the year: Service Cost 566,023 - 566,023 Interest on the total OPEB liability 370,307 - 370,307 Differences between expected and actual experience - - - Assumption changes 920,505 - 920,505 Contributions - employer - expected retiree benefit payments - 262,065 (262,065) Net investment income - 98,019 (98,019) Benefit payments (261,547) (261,547) - Administrative expenses - (4,219) 4,219 Net changes 1,595,288 94,318 1,500,970 Balance at June 30, 2020 10,191,923$ 1,554,479$ 8,637,444$ Increase (Decrease) Sensitivity of the Net OPEB Liability to Changes in the Discount Rate – The following presents the net OPEB liability of the City, as well as what the City’s net OPEB liability would be if it were calculated using a discount rate that is one percentage point lower (3.10 percent) or one percentage point higher (5.10 percent) follows: 1% Decrease Discount Rate 1% Increase (2.52%)(3.52%)(4.52%) Net OPEB Liability 10,574,382$ 8,637,444$ 7,126,086$ ATTACHMENT A 55 City of Temple City, California Notes to Financial Statements June 30, 2020 Sensitivity of the Net OPEB Liability to Changes in the Healthcare Cost Trend Rates – The following presents the net OPEB liability of the City, as well as what the City’s net OPEB liability would be if it were calculated using healthcare cost trend rates that are one percentage point lower or one percentage point higher than current healthcare cost trend rates follows: 1% Decrease Current Trend 1% Increase Net OPEB Liability 6,923,784$ 8,637,444$ 10,897,935$ OPEB Expense and Deferred Inflows and Outflows of Resources Related to OPEB For the year ended June 30, 2020, the City recognized an OPEB expense of $1,117,887. As of June 30, 2020, the City reported deferred outflows of resources and deferred inflows of resources related to the Plan as follows: Deferred Outflows Deferred Inflows of Resources of Resources OPEB contributions subsequent to measurement date 266,639$ -$ Changes in assumptions 1,775,835 - Differences between actual and expected experience - 220,786 Net difference between projected and actual earnings on plan investments - 33,536 Total 2,042,474$ 254,322$ $266,639 reported as deferred outflows of resources related to contributions subsequent to the measurement date will be recognized as a reduction of the net OPEB liability in the year ended June 30, 2021. Other amounts reported as deferred outflows and deferred inflows of resources related to OPEB will be recognized in OPEB expense as follows: Amortization 2021 264,837$ 2022 264,838 2023 277,363 2024 277,386 2025 279,490 Thereafter 157,599 Total 1,521,513$ Year Ended June 30, ATTACHMENT A 56 City of Temple City, California Notes to Financial Statements June 30, 2020 Note 11 - Fund Balance Classifications Public Nonmajor Transportation Governmental General Prop A Funds Totals Nonspendable Prepaid items 27,686$ 10,838$ -$ 38,524$ Educational scholarship - - 174,744 174,744 Loans receivable 58,375 - - 58,375 Subtotal 86,061 10,838 174,744 271,643 Restricted Community development - - 1,302,470 1,302,470 Public safety - - 26,264 26,264 Community services - - 167,000 167,000 Public works - 665,670 10,993,379 11,659,049 Subtotal - 665,670 12,489,113 13,154,783 Committed Emergency/disasters 50,000 - - 50,000 Liquidity 2,000,000 - - 2,000,000 Local economic uncertainty 1,450,000 - - 1,450,000 Subtotal 3,500,000 - - 3,500,000 Assigned Fleet management 400,000 - - 400,000 Facilities management 3,540,000 - - 3,540,000 Technology replacement 40,792 - - 40,792 Economic development 2,254,473 - - 2,254,473 Opportunities for one-time expenditures 4,220,439 - - 4,220,439 Subtotal 10,455,704 - - 10,455,704 Unassigned 6,056,188 - - 6,056,188 Total 20,097,953$ 676,508$ 12,663,857$ 33,438,318$ On June 29, 2020, the City reaffirmed the committed and assigned fund balance classifications for the General Fund. At June 30, 2020, the City had committed and assigned balances as follow, in accordance with the City’s adopted GASB 54 Fund Balance Policy. Committed 3,500,000$ Assigned 10,455,704$ Any remaining fund balance at the close of the fiscal year will be designated as Unassigned. ATTACHMENT A 57 City of Temple City, California Notes to Financial Statements June 30, 2020 Note 12 - Contingent Liabilities/Commitments Various claims and suits have been filed against the City in the normal course of business. Although the outcome of these matters is not presently determinable in the opinion of legal counsel, the resolution of these matters will not have a material adverse effect on the financial condition of the City. Note 13 - Successor Agency Trust for Assets of Former Redevelopment Agency The accompanying financial statements also include the Private-purpose Trust Fund for the Successor Agency to the City’s former Redevelopment Agency (Successor Agency). The City, as the Successor Agency, serves in a fiduciary capacity, as custodian for the assets and to wind down the affairs of the former Redevelopment Agency. Its assets are held in trust for the benefit of the taxing entities within the former Redevelopment Agency’s boundaries and as such, are not available for the use of the City. Disclosures related to the certain assets and long-term liabilities of the Successor Agency are as follows: Agency’s Payable to the City As of June 30, 2020, the Successor Agency owes the City $20,000 for expenses by the former redevelopment agency to support redevelopment activities. Information about the Outstanding Bonds of the Successor Agency Trust Fund Tax Allocation Refunding Bonds, Series 2016 On March 31, 2016, the Successor Agency issued $2,150,000 Tax-exempt Tax Allocation Refunding Bonds and $2,240,000 Taxable Tax Allocation Refunding Bonds (“Bonds”) for a total of $4,390,000. Proceeds from the sale of the Bonds will be used to refund the Refunding Bonds Series 2005. The Series 2005 bonds were originally issued to refund the Temple City Financing Authority, 1993 Revenue Bonds for the Rosemead Boulevard Redevelopment Project. The refunding resulted in an economic gain of $275,962 with a percentage savings of refunded bonds of 5.67 percent and debt service savings of $1,154,885. The principal of the Bonds is payable commencing September 1, 2016 through September 1, 2024 and interest payable is payable semiannually each March and September beginning September 1, 2016. Interest rates are 2.40 percent fixed on the Tax-Exempt bonds and 3.72 percent on the Taxable bonds. The principal amount outstanding at June 30, 2020 is $2,395,000. The principal of, premium, if any, and interest on 2016 Tax Allocation Refunding Bonds shall be payable from and secured by the following: (i) a priority pledge of the tax revenues allocated to the Issuer by the County- Controller-Auditor from the Issuer’s Redevelopment Obligation Payment Schedule, after amounts required for pass-through payments, including negotiated pass-through payments and statutory pass-through obligations; and (ii) all funds and accounts to be held in connection with the Bonds and all investment earnings on such fund and accounts. Additionally, the City will be charged a 12% interest rate per year on overdue installments of principal with reasonable fees and expenses of the Trustee (including attorney fees and expenses). ATTACHMENT A 58 City of Temple City, California Notes to Financial Statements June 30, 2020 The annual requirements for repayment of principal and interest on the bonds payable outstanding as of June 30, 2020 are as follows: Principal Interest Total 2021 545,000$ 63,249$ 608,249$ 2022 565,000 45,672 610,672 2023 580,000 27,510 607,510 2024 345,000 13,836 358,836 2025 360,000 4,683 364,683 Total 2,395,000$ 154,950$ 2,549,950$ Year Ending June 30, Deficit Net Position As of June 30, 2020, the Successor Agency Private-Purpose Trust Fund had a deficit net position of $1,077,786. This will be reduced with future receipt of distributions from the Redevelopment Property Tax Trust Fund from the County. Note 14 - Subsequent Events On July 1, 2020, the City entered into an agreement with the State of California to receive approximately $446,000 in CARES Act funds. As the grant agreement was entered into subsequent to year end, resulting in future revenues for the City, the City will be allowed to apply costs incurred between the period of January 20, 2020 through June 30, 2020 to this grant. The amount to be applied has not yet been determined. ATTACHMENT A Required Supplementary Information June 30, 2020 City of Temple City, California ATTACHMENT A This page intentionally left blank. ATTACHMENT A See Notes to Required Supplementary Information 61 City of Temple City, California Budget Actual Comparison Year Ended June 30, 2020 General Fund General Fund – This fund has been classified as a major fund and is used to account for all of the general revenues of the City not specifically levied or collected for some special purpose, and for the expenditures related to the rendering of general services by the City. The General Fund is used to account for all resources not required to be accounted for in another fund. The budget-to-actual comparison for this fund has been presented in the accompanying financial statements as required supplementary information. Special Revenue Funds The Special Revenue Funds are used to account for specific revenues that are legally restricted to expenditure for a particular purpose. The following fund has been classified as a major fund and budget-to-actual comparison for the fund has been presented in the accompanying financial statements as required supplementary information. Public Transportation - Proposition A Fund – To account for the City's share of additional sales tax collected in the County of Los Angeles as a result of Proposition A. The fund is restricted to finance public transportation projects. ATTACHMENT A 62 This page intentionally left blank ATTACHMENT A See Note to Required Supplementary Information 63 City of Temple City, California Budgetary Comparison Schedule – General Fund Year Ended June 30, 2020 Variance with Final Budget - Actual Positive Original Final Amounts (Negative) Revenues Taxes: Real estate transfer tax $ 180,000 $ 135,500 $ 135,433 $ (67) Sales and use tax 2,145,200 1,919,800 1,919,780 (20) Franchise tax 530,000 576,210 576,214 4 Transient occupancy tax 60,000 43,500 43,505 5 Property tax allocation 3,508,490 3,670,280 3,670,281 1 Total taxes 6,423,690 6,345,290 6,345,213 (77) Licenses and permits: Business license fees 200,000 185,380 185,382 2 Building permit fees 800,000 622,760 622,762 2 Parking permit fees 85,000 66,560 66,556 (4) Encroachment permit fees 160,000 147,840 147,839 (1) Animal license fees 35,000 35,000 38,707 3,707 Vehicle impound fees 11,000 15,450 15,447 (3) Temp parking permit fees 200,000 145,200 145,204 4 Code enforcement fees 70,000 46,040 46,039 (1) Total licenses and permits 1,561,000 1,264,230 1,267,936 3,706 Intergovernmental: Intergovernmental - 562,500 564,940 2,440 In lieu vehicle license fees 4,817,905 4,979,205 4,979,210 5 Total intergovernmental 4,817,905 5,541,705 5,544,150 2,445 Charges for services: Shared maintenance charges 4,350 4,350 4,480 130 Zoning fees 170,000 200,320 200,316 (4) Recreation fees 575,000 251,880 251,875 (5) Plan check fees 500,000 478,280 478,275 (5) Facility rental fees 54,000 31,530 31,531 1 PW/Engineering fees 80,000 27,600 27,595 (5) Total charges for services 1,383,350 993,960 994,072 112 Fines, forfeitures and penalties: Court fines 500,000 541,060 541,065 5 Investment income: Interest - LAIF 15,000 129,450 129,447 (3) Interest - Securities 50,000 23,480 23,478 (2) Interest - Others 50,000 103,170 103,166 (4) Interest - CD 100,000 176,010 176,010 - Change in value of investment - - 104,681 104,681 Total investment income 215,000 432,110 536,782 104,672 Other: AB939 reimbursement 15,000 7,110 7,112 2 Rental income 34,000 34,000 34,637 637 Other reimbursement 139,000 179,440 187,088 7,648 CRA/LLD reimbursement 30,000 36,380 36,385 5 Total other income 218,000 256,930 265,222 8,292 Total revenues 15,118,945 15,375,285 15,494,440 119,155 Budgeted Amounts ATTACHMENT A See Note to Required Supplementary Information 64 City of Temple City, California Budgetary Comparison Schedule – General Fund Year Ended June 30, 2020 Final Budget - Actual Positive Original Final Amounts (Negative) Expenditures General government: City council $ 194,190 $ 154,490 $ 153,148 $ 1,342 City manager 2,515,480 2,480,830 2,451,488 29,342 City clerk 358,485 369,539 368,775 764 Accounting 644,580 655,239 628,670 26,569 City attorney 320,000 329,420 329,417 3 Support services 143,015 312,509 307,955 4,554 Purchasing 255,460 355,690 333,217 22,473 Personnel 731,610 733,784 712,251 21,533 Elections 116,800 9,550 2,474 7,076 Total general government 5,279,620 5,401,051 5,287,395 113,656 Community development: Planning 743,770 697,224 697,415 (191) Housing 34,490 29,039 27,757 1,282 Building 723,850 582,264 633,797 (51,533) Total community development 1,502,110 1,308,527 1,358,969 (50,442) Public safety: Law enforcement 4,623,350 4,385,104 4,377,378 7,726 Traffic engineering 38,110 45,964 45,672 292 Emergency services 164,740 205,004 211,256 (6,252) Community preservation 610,365 577,219 574,521 2,698 Parking administration 317,430 266,219 264,372 1,847 Total public safety 5,753,995 5,479,510 5,473,199 6,311 Public works: Parking facilities 110,980 112,134 101,905 10,229 Administration & engineering 601,345 503,514 543,879 (40,365) General government buildings 303,100 326,104 427,197 (101,093) Total public works 1,015,425 941,752 1,072,981 (131,229) Community services: Recreation/human services 1,370,165 1,047,114 958,951 88,163 Parks - maintenance/facilities 1,210,755 1,184,974 1,182,569 2,405 Total community services 2,580,920 2,232,088 2,141,520 90,568 Capital outlay 678,890 105,030 126,910 (21,880) Total expenditures 16,810,960 15,467,958 15,460,974 6,984 Excess (Deficiency) of Revenue over Expenditures (1,692,015) (92,673) 33,466 126,139 Other Financing Sources (Uses) Transfers in - 20,500 20,500 - Net Change in Fund Balances $ (1,692,015) $ (72,173) 53,966 $ 126,139 Fund Balance at Beginning of Year 20,043,987 Fund Balance at End of Year $ 20,097,953 Budgeted Amounts ATTACHMENT A See Note to Required Supplementary Information 65 City of Temple City, California Budgetary Comparison Schedule – Public Transportation- Prop A Fund Year Ended June 30, 2020 Variance with Final Budget - Actual Positive Original Final Amounts (Negative) Revenues Intergovernmental 734,320$ 703,703$ 703,703$ -$ Charges for services 44,170 27,365 27,365 - Investment income 9,000 17,772 17,772 - Total revenues 787,490 748,840 748,840 - Expenditures Current: Community services 939,735 1,489,737 1,253,696 236,041 Total expenditures 939,735 1,489,737 1,253,696 236,041 Net Change in Fund Balances (152,245)$ (740,897)$ (504,856) 236,041$ Fund Balance at Beginning of Year 1,181,364 Fund Balance at End of Year 676,508$ Budgeted Amounts ATTACHMENT A 66 City of Temple City, California Note to Budgetary Comparison Schedule Year Ended June 30, 2020 Note 1 - Budgets and Budgetary Accounting The City adopts an annual budget prepared on the modified accrual basis for all of its governmental funds except the Parking Concession and Affordable Housing, the Measure A, and the Public Art Fee funds. The City Manager or his designee is authorized to transfer budgeted amounts between the accounts of any program. Revisions that alter the total appropriations of any program or fund are approved by the City Council. Prior year appropriations lapse unless they are appropriated through the formal budget process. Expenditures may not legally exceed appropriations at department level. Reserves for encumbrances are not recorded by the City. ATTACHMENT A 67 City of Temple City, California Schedule of Proportionate Share of the Net Pension Liability Last Ten Years* June 30, 2020 202020192018201720162015Proportion of the net pension liability0.08383%0.08208%0.08108%0.08004%0.08021%0.06544%Proportionate share of the net pension liability8,590,199$ $7,909,4078,041,060$ 6,925,534$ 5,505,224$ 4,072,235$ Covered payroll3,454,883 3,534,081 3,324,680 2,952,148 2,785,261 2,820,374 Proportionate share of the net pension liability as apercentage of covered payroll248.64%223.80%241.86%234.59%197.66%144.39%Plan fiduciary net position as a percentage of the total pension liability75.30%75.30%73.31%74.06%78.40%79.82%Notes to Schedule:* Fiscal year 2015 was the 1st year of implementation.Changes of AssumptionThe discount rate changed from 7.65 percent used for the June 30, 2016 measurement date to 7.15 percent used for the June 30, 2017 measurement date. ATTACHMENT A 68 City of Temple City, California Schedule of Contributions Last Ten Years* June 30, 2020 202020192018201720162015Actuarially determined contributions886,665$ 787,740$ 700,176$ 629,063$ 556,380$ 444,577$ Contributions in relation to the actuarially determined contributions886,665 787,740 700,176 629,063 556,380 444,577 Contribution deficiency (excess)-$ -$ -$ -$ -$ -$ Covered payroll3,537,668$ 3,454,883$ 3,534,081$ 3,324,680$ 2,952,148$ 2,785,261$ Contributions as a percentage of covered payroll25.06%22.80%19.81%18.92%18.85%15.96%Notes to Schedule:* Fiscal year 2015 was the 1st year of implementation. ATTACHMENT A 69 City of Temple City, California Schedule of Changes in the Net OPEB Liability Last Ten Years* June 30, 2020 2020 2019 2018* Total OPEB Liability Service cost 566,023$ 242,691$ 228,759$ Interest on the total OPEB liability 370,307 449,797 422,018 Differences between actual and expected experience - (307,370) - Changes in assumptions 920,505 1,371,245 - Benefit payments, including refunds of employee contributions (261,547) (227,588) (172,603) Implicit rate subsidy fulfilled - - (40,290) Net change in total OPEB liability 1,595,288 1,528,775 437,884 Total OPEB liability - beginning 8,596,635 7,067,860 6,629,976 Total OPEB liability - ending (a)10,191,923$ 8,596,635$ 7,067,860$ Plan fiduciary net position Contributions - employer expected retiree benefit payments 262,065$ 228,197$ 172,603$ Contributions - employer implicit subsidy - - 40,290 Net investment income 98,019 86,115 133,506 Benefit payments (261,547) (227,588) (172,603) Implicit rate subsidy fulfilled - - (40,290) Administrative expenses (4,219) (4,235) (7,413) Net change in plan fiduciary net position 94,318 82,489 126,093 Plan fiduciary net position - beginning 1,460,161 1,377,672 1,251,579 Plan fiduciary net position - ending (b)1,554,479 1,460,161 1,377,672 Net OPEB liability - ending (a)-(b)8,637,444$ 7,136,474$ 5,690,188$ Plan fiduciary net position as a percentage of the total OPEB liability 15.25%16.99%19.49% Covered-employee payroll 3,340,220$ 3,302,589$ 2,809,688$ Net OPEB liability as percentage of covered-employee payroll 258.59%216.09%202.52% Notes to Schedule: * - Fiscal year 2018 was the 1st year of implementation. ATTACHMENT A 70 City of Temple City, California Schedule of the OPEB Contributions Last Ten Years* Year Ended June 30, 2020 2020 2019 2018* Actuarially determined contribution 779,000$ 726,000$ 311,743$ Contributions in relation to the actuarially determined contributions (266,639) (262,065) (229,963) Contribution deficiency (excess)512,361$ 463,935$ 81,780$ Covered-employee payroll 3,537,668$ 3,340,220$ 3,302,589$ Contributions as a percentage of covered-employee payroll 7.54%7.85%6.96% Notes to Schedule Valuation date:6/30/2019 6/30/2019 6/30/2017 Methods and assumptions used to determine contribution rates: Actuarial cost method Entry Age Normal Cost Method Amortization method Level percent of payroll Amortization period 20-year fixed period Asset valuation method Market value Inflation 2.75% Non-Medicare - 7.25% for 2021, decreasing to an ultimate rate of 4% in 2076 Medicare - 6.3% for 2021, decreasing to an ultimate rate of 4% in 2076 Medical trend Mortality CalPERS 1997-2015 experience study Mortality improvement Post-retirement mortality projected fully generational with Scale MP-2018 * - Fiscal year 2018 was the 1st year of implementation. ATTACHMENT A Supplementary Information June 30, 2020 City of Temple City, California ATTACHMENT A This page intentionally left blank. ATTACHMENT A 73 City of Temple City, California Combining Balance Sheet – Nonmajor Governmental Funds June 30, 2020 Special Camelia Revenue Permanent Funds Fund Totals Assets Cash and investments 11,457,205$ 174,744$ 11,631,949$ Accounts receivable 760 - 760 Loans receivable 1,202,944 - 1,202,944 Due from other governments 300,480 - 300,480 Total assets 12,961,389$ 174,744$ 13,136,133$ Liabilities and Fund Balances Liabilities: Accounts payable 271,343$ -$ 271,343$ Accrued payroll 22 - 22 Due to other funds 98,836 - 98,836 Refundable deposits 102,075 - 102,075 Total liabilities 472,276 - 472,276 Fund Balances: Nonspendable - 174,744 174,744 Restricted 12,489,113 - 12,489,113 Total fund balances 12,489,113 174,744 12,663,857 Total liabilities and fund balances 12,961,389$ 174,744$ 13,136,133$ ATTACHMENT A 74 City of Temple City, California Combining Statement of Revenues, Expenditures, and Changes in Fund Balances – Nonmajor Governmental Funds Year Ended June 30, 2020 Special Camelia Revenue Permanent Funds Fund Totals Revenues Taxes 1,565,816$ -$ 1,565,816$ Intergovernmental 3,471,350 - 3,471,350 Charges for services 29,500 - 29,500 Investment income 127,956 2,750 130,706 Other 78,135 - 78,135 Total revenues 5,272,757 2,750 5,275,507 Expenditures Current: Community development 305,585 - 305,585 Public safety 140,250 - 140,250 Public works 1,652,151 - 1,652,151 Community services 148,833 - 148,833 Capital outlay 1,120,225 - 1,120,225 Total expenditures 3,367,044 - 3,367,044 Excess (Deficiency) of Revenues over (Under) Expenditures 1,905,713 2,750 1,908,463 Other Financing Sources (Uses) Transfers out (20,500) - (20,500) Total other financing sources (uses)(20,500) - (20,500) Net Change in Fund Balances 1,885,213 2,750 1,887,963 Fund Balances at Beginning of Year 10,603,900 171,994 10,775,894 Fund Balances at End of Year 12,489,113$ 174,744$ 12,663,857$ ATTACHMENT A 75 City of Temple City, California Description of Nonmajor Special Revenue Funds June 30, 2020 The following Special Revenue Funds have been classified as nonmajor funds in the accompanying financial statements: Citizens Option for Public Safety (COPS) Fund – To account for the revenues received from the California Department of Justice to be restricted to enhance existing law enforcement services. Public Transportation - Proposition C Fund – To account for the City's share of additional sales tax collected in the County of Los Angeles as a result of Proposition C. The fund is restricted to finance public transportation projects. Used Oil Fund – To account for the revenues and expenditures of the Used Oil Recycling Block Grant. State Gas Tax Fund – To account for the revenues and expenditures of the City's proportionate share of gas tax monies collected by the State of California which are used for street construction, street maintenance and engineering, and administrative expenses. Traffic Congestion Relief – Sect. 2182 Fund – To account for revenues and expenditures related to Traffic Congestion Relief Program, pursuant to Section 2182 of the Street and Highways Code. CDBG Fund – To account for resources in managing the different programs under the Community Development Block Grant funded by the U.S. Department of Housing and Urban Development. Bicycle and Pedestrian – To account for the grant revenues received from the Department of Transportation to fund the City’s improvement projects. Air Quality Improvement District Fund – To account for the City's share of automobile registration fees collected from the State and distributed to the City by the South Coast Air Quality Management District. The funds are used to improve transportation systems and reduce the reliance on private vehicles. Measure R Fund – These are similar to local return type funds to be used for traffic relief and transportation upgrades citywide over the next 30 years. These funds may be for projects such as pothole repairs, major street resurfacing, left-turn signals, bikeways, pedestrian improvements, streetscapes, traffic signal synchronization, local transit services and programs. Parking Concession Fund – To account for revenues and expenditures related to the operation of the parking concession agreements. Affordable Housing Fee Fund – An optional development impact fee used on City approved affordable housing programs geared towards assisting low-income households (e.g. handy worker grant, home improvement loan, Brush with Kindness grant, senior housing development, first-time homebuyers program, etc.). Sewer Reconstruction Fund – To account for special fees collected to be used for new sewer lines and sewer line replacement. ATTACHMENT A 76 City of Temple City, California Description of Nonmajor Special Revenue Funds June 30, 2020 Road Maintenance Rehab Act (RMRA) Fund – This fund was established to account for revenues received under the passage of Senate Bill 1 (SB-1) which is known as the Road Repair and Accountability Act of 2017. Revenues collected in the fund will be utilized on future road maintenance projects. 1992/1996 Park Bond Fund – To account for revenues received from the Los Angeles County Regional Park and Open Space Grant. This grant was approved November 3, 1992 and November 5, 1996 to benefit property through the improvement of neighborhood parks and recreation facilities for youth and senior citizens. Measure M Fund – This fund was established to account for revenues under the passage of Measure M approved by the voters of Los Angeles County on November 2016 to improve transportation and ease traffic congestion for the Measure M Local Return (LR) program. This program is funded by the Measure M sales tax with no sunset, beginning on July 1, 2017. Measure A Fund – To account for revenues under the passage of Measure A approved by voters of Los Angeles County on November 2016 to provide safe, clean neighborhood park, open space, beaches, river protection and water conservation. A tax of 1.5 cents is levied annually per square foot of improved property in Los Angeles County. Park Acquisition Fund – To account for City imposed fees from the construction of new dwellings within the City. Expenditures are for the acquisition or improvement of neighborhood or community parks in conformance with the priorities established by the General Plan. Lighting and Landscape District Fund – To account for assessments and ad valorem taxes which are used for the operation and maintenance of street lights, traffic signals, and trees and parkways within the City. Public Art Fee Fund – An optional development impact fee used to procure, commission, install and/or maintain art in a public place. The impact fee could be identified for an individual art piece per the development agreement. If the development agreement does not specify a particular art piece for the impact fee, it shall be deposited into the City’s Public Art Fund. ATTACHMENT A 77 City of Temple City, California Combining Balance Sheet – Nonmajor Special Revenue Funds June 30, 2020 Public Transportation COPS Prop C Used Oil Assets Cash and investments 61,327$ 1,933,412$ 15,732$ Accounts receivable - - - Loans receivable - - - Due from other governments - - - Total assets 61,327$ 1,933,412$ 15,732$ Liabilities and Fund Balances Liabilities: Accounts payable 35,063$ -$ 4,759$ Accrued payroll - - - Due to other funds - - - Refundable deposits - - - Total liabilities 35,063 - 4,759 Fund Balances: Restricted 26,264 1,933,412 10,973 Total fund balances 26,264 1,933,412 10,973 Total liabilities and fund balances 61,327$ 1,933,412$ 15,732$ ATTACHMENT A 78 City of Temple City, California Combining Balance Sheet – Nonmajor Special Revenue Funds June 30, 2020 Assets Cash and investments Accounts receivable Loans receivable Due from other governments Total assets Liabilities and Fund Balances Liabilities: Accounts payable Accrued payroll Due to other funds Refundable deposits Total liabilities Fund Balances: Restricted Total fund balances Total liabilities and fund balances Traffic State Cong Relief Gas Tax Section 2182 CDBG 884,822$ 92,959$ -$ - - - - - 1,202,944 - - 57,975 884,822$ 92,959$ 1,260,919$ 69,388$ -$ 38,660$ - - - - - 29,313 - - - 69,388 - 67,973 815,434 92,959 1,192,946 815,434 92,959 1,192,946 884,822$ 92,959$ 1,260,919$ ATTACHMENT A 79 City of Temple City, California Combining Balance Sheet – Nonmajor Special Revenue Funds June 30, 2020 Assets Cash and investments Accounts receivable Loans receivable Due from other governments Total assets Liabilities and Fund Balances Liabilities: Accounts payable Accrued payroll Due to other funds Refundable deposits Total liabilities Fund Balances: Restricted Total fund balances Total liabilities and fund balances Bicycle Air Quality and Improvement Pedestrian District Measure R -$ 87,342$ 1,485,561$ - - - - - - 55,023 11,449 - 55,023$ 98,791$ 1,485,561$ -$ 240$ -$ - - 55,023 - - - - - 55,023 240 - - 98,551 1,485,561 - 98,551 1,485,561 55,023$ 98,791$ 1,485,561$ ATTACHMENT A 80 City of Temple City, California Combining Balance Sheet – Nonmajor Special Revenue Funds June 30, 2020 Assets Cash and investments Accounts receivable Loans receivable Due from other governments Total assets Liabilities and Fund Balances Liabilities: Accounts payable Accrued payroll Due to other funds Refundable deposits Total liabilities Fund Balances: Restricted Total fund balances Total liabilities and fund balances Parking Affordable Sewer Concession Housing Reconstruction 10,000$ 157,000$ 979,171$ - - - - - - - - - 10,000$ 157,000$ 979,171$ -$ -$ -$ - - - - - - - - - - - - 10,000 157,000 979,171 10,000 157,000 979,171 10,000$ 157,000$ 979,171$ ATTACHMENT A 81 City of Temple City, California Combining Balance Sheet – Nonmajor Special Revenue Funds June 30, 2020 Assets Cash and investments Accounts receivable Loans receivable Due from other governments Total assets Liabilities and Fund Balances Liabilities: Accounts payable Accrued payroll Due to other funds Refundable deposits Total liabilities Fund Balances: Restricted Total fund balances Total liabilities and fund balances Road Maintenance 1992/1996 Rehab Act Park Bond Measure M 976,314$ -$ 1,093,879$ - - - - - - 96,756 14,500 - 1,073,070$ 14,500$ 1,093,879$ -$ -$ 55,306$ - - - - 14,500 - - - - - 14,500 55,306 1,073,070 - 1,038,573 1,073,070 - 1,038,573 1,073,070$ 14,500$ 1,093,879$ ATTACHMENT A 82 City of Temple City, California Combining Balance Sheet – Nonmajor Special Revenue Funds June 30, 2020 Assets Cash and investments Accounts receivable Loans receivable Due from other governments Total assets Liabilities and Fund Balances Liabilities: Accounts payable Accrued payroll Due to other funds Refundable deposits Total liabilities Fund Balances: Restricted Total fund balances Total liabilities and fund balances Lighting and Park Landscape Acquisition District 92,007$ 3,366,184$ 500 260 - - - 64,777 92,507$ 3,431,221$ -$ 67,927$ - 22 - - - - - 67,949 92,507 3,363,272 92,507 3,363,272 92,507$ 3,431,221$ ATTACHMENT A 83 City of Temple City, California Combining Balance Sheet – Nonmajor Special Revenue Funds June 30, 2020 Assets Cash and investments Accounts receivable Loans receivable Due from other governments Total assets Liabilities and Fund Balances Liabilities: Accounts payable Accrued payroll Due to other funds Refundable deposits Total liabilities Fund Balances: Restricted Total fund balances Total liabilities and fund balances Public Art Fee Total 221,495$ 11,457,205$ - 760 - 1,202,944 - 300,480 221,495$ 12,961,389$ -$ 271,343$ - 22 - 98,836 102,075 102,075 102,075 472,276 119,420 12,489,113 119,420 12,489,113 221,495$ 12,961,389$ ATTACHMENT A 84 City of Temple City, California Combining Statement of Revenues, Expenditures, and Changes in Fund Balances – Nonmajor Special Revenue Funds Year Ended June 30, 2020 Public Transportation COPS Prop C Used Oil Revenues Taxes -$ -$ -$ Intergovernmental 155,946 583,723 9,936 Charges for services - - - Investment income 920 27,667 - Others - - - Total revenues 156,866 611,390 9,936 Expenditures Current: Community development - - - Public safety 140,250 - - Public works - - 7,111 Community services - - - Capital outlay - 437,562 - Total expenditures 140,250 437,562 7,111 Excess (Deficiency) of Revenues over (Under) Expenditures 16,616 173,828 2,825 Other Financing Sources (Uses) Transfers out - - - Total other financing sources (uses)- - - Net Change in Fund Balances 16,616 173,828 2,825 Fund Balances at Beginning of Year 9,648 1,759,584 8,148 Fund Balances at End of Year 26,264$ 1,933,412$ 10,973$ ATTACHMENT A 85 City of Temple City, California Combining Statement of Revenues, Expenditures, and Changes in Fund Balances – Nonmajor Special Revenue Funds Year Ended June 30, 2020 Revenues Taxes Intergovernmental Charges for services Investment income Others Total revenues Expenditures Current: Community development Public safety Public works Community services Capital outlay Total expenditures Excess (Deficiency) of Revenues over (Under) Expenditures Other Financing Sources (Uses) Transfers out Total other financing sources (uses) Net Change in Fund Balances Fund Balances at Beginning of Year Fund Balances at End of Year Traffic State Cong Relief Gas Tax Section 2182 CDBG -$ -$ -$ 791,136 41,127 198,986 - - - 10,779 1,150 - - - 78,135 801,915 42,277 277,121 - - 305,585 - - - 430,947 32,705 - - - - - - - 430,947 32,705 305,585 370,968 9,572 (28,464) (6,000) - - (6,000) - - 364,968 9,572 (28,464) 450,466 83,387 1,221,410 815,434$ 92,959$ 1,192,946$ ATTACHMENT A 86 City of Temple City, California Combining Statement of Revenues, Expenditures, and Changes in Fund Balances – Nonmajor Special Revenue Funds Year Ended June 30, 2020 Revenues Taxes Intergovernmental Charges for services Investment income Others Total revenues Expenditures Current: Community development Public safety Public works Community services Capital outlay Total expenditures Excess (Deficiency) of Revenues over (Under) Expenditures Other Financing Sources (Uses) Transfers out Total other financing sources (uses) Net Change in Fund Balances Fund Balances at Beginning of Year Fund Balances at End of Year Bicycle Air Quality and Improvement Pedestrian District Measure R -$ -$ -$ 55,023 58,251 437,166 - - - - 686 17,515 - - - 55,023 58,937 454,681 - - - - - - - 12,229 - 148,833 - 55,023 - - 55,023 148,833 12,229 - (89,896) 442,452 - - - - - - - (89,896) 442,452 - 188,447 1,043,109 -$ 98,551$ 1,485,561$ ATTACHMENT A 87 City of Temple City, California Combining Statement of Revenues, Expenditures, and Changes in Fund Balances – Nonmajor Special Revenue Funds Year Ended June 30, 2020 Revenues Taxes Intergovernmental Charges for services Investment income Others Total revenues Expenditures Current: Community development Public safety Public works Community services Capital outlay Total expenditures Excess (Deficiency) of Revenues over (Under) Expenditures Other Financing Sources (Uses) Transfers out Total other financing sources (uses) Net Change in Fund Balances Fund Balances at Beginning of Year Fund Balances at End of Year Parking Affordable Sewer Concession Housing Reconstruction -$ -$ -$ - - - - - 5,000 - - - - - - - - 5,000 - - - - - - - - - - - - - - - - - - - - 5,000 - - - - - - - - 5,000 10,000 157,000 974,171 10,000$ 157,000$ 979,171$ ATTACHMENT A 88 City of Temple City, California Combining Statement of Revenues, Expenditures, and Changes in Fund Balances – Nonmajor Special Revenue Funds Year Ended June 30, 2020 Revenues Taxes Intergovernmental Charges for services Investment income Others Total revenues Expenditures Current: Community development Public safety Public works Community services Capital outlay Total expenditures Excess (Deficiency) of Revenues over (Under) Expenditures Other Financing Sources (Uses) Transfers out Total other financing sources (uses) Net Change in Fund Balances Fund Balances at Beginning of Year Fund Balances at End of Year Road Maintenance 1992/1996 Rehab Act Park Bond Measure M -$ -$ -$ 633,613 14,500 491,943 - - - 9,786 - 12,890 - - - 643,399 14,500 504,833 - - - - - - - - - - - - 420,000 - 180,408 420,000 - 180,408 223,399 14,500 324,425 - (14,500) - - (14,500) - 223,399 - 324,425 849,671 - 714,148 1,073,070$ -$ 1,038,573$ ATTACHMENT A 89 City of Temple City, California Combining Statement of Revenues, Expenditures, and Changes in Fund Balances – Nonmajor Special Revenue Funds Year Ended June 30, 2020 Revenues Taxes Intergovernmental Charges for services Investment income Others Total revenues Expenditures Current: Community development Public safety Public works Community services Capital outlay Total expenditures Excess (Deficiency) of Revenues over (Under) Expenditures Other Financing Sources (Uses) Transfers out Total other financing sources (uses) Net Change in Fund Balances Fund Balances at Beginning of Year Fund Balances at End of Year Lighting and Park Landscape Acquisition District -$ 1,565,816$ - - 24,500 - - 46,563 - - 24,500 1,612,379 - - - - 14,563 1,154,596 - - 27,232 - 41,795 1,154,596 (17,295) 457,783 - - - - (17,295) 457,783 109,802 2,905,489 92,507$ 3,363,272$ ATTACHMENT A 90 City of Temple City, California Combining Statement of Revenues, Expenditures, and Changes in Fund Balances – Nonmajor Special Revenue Funds Year Ended June 30, 2020 Revenues Taxes Intergovernmental Charges for services Investment income Others Total revenues Expenditures Current: Community development Public safety Public works Community services Capital outlay Total expenditures Excess (Deficiency) of Revenues over (Under) Expenditures Other Financing Sources (Uses) Transfers out Total other financing sources (uses) Net Change in Fund Balances Fund Balances at Beginning of Year Fund Balances at End of Year Public Art Fee Total -$ 1,565,816$ - 3,471,350 - 29,500 - 127,956 - 78,135 - 5,272,757 - 305,585 - 140,250 - 1,652,151 - 148,833 - 1,120,225 - 3,367,044 - 1,905,713 - (20,500) - (20,500) - 1,885,213 119,420 10,603,900 119,420$ 12,489,113$ ATTACHMENT A 91 City of Temple City, California Schedule of Revenues, Expenditures and Changes in Fund Balance -Budget and Actual Permanent Fund Year Ended June 30, 2020 Variance with Final Budget - Actual Positive Original Final Amounts (Negative) Revenues Investment income 600$ 600$ 2,750$ 2,150$ Total revenues 600 600 2,750 2,150 Net Changes in Fund Balance 600$ 600$ 2,750 2,150$ Fund Balance at Beginning of Year 171,994 Fund Balance at End of Year 174,744$ Budgeted Amounts ATTACHMENT A 92 City of Temple City, California Schedule of Revenues, Expenditures and Changes in Fund Balance -Budget and Actual COPS Fund Year Ended June 30, 2020 Variance with Final Budget - Actual Positive Original Final Amounts (Negative) Revenues Intergovernmental 140,000$ 155,946$ 155,946$ -$ Investment income 250 250 920 670 Total revenues 140,250 156,196 156,866 670 Expenditures Current: Public safety 140,250 140,250 140,250 - Total expenditures 140,250 140,250 140,250 - Net Change in Fund Balances -$ 15,946$ 16,616 670$ Fund Balance at Beginning of Year 9,648 Fund Balance at End of Year 26,264$ Budgeted Amounts ATTACHMENT A 93 City of Temple City, California Schedule of Revenues, Expenditures and Changes in Fund Balance -Budget and Actual Public Transportation – Prop C Fund Year Ended June 30, 2020 Variance with Final Budget - Actual Positive Original Final Amounts (Negative) Revenues Intergovernmental 609,100$ 583,723$ 583,723$ -$ Investment income 16,000 27,667 27,667 - Total revenues 625,100 611,390 611,390 - Expenditures Capital Outlay 1,200,000 1,200,000 437,562 762,438 Total expenditures 1,200,000 1,200,000 437,562 762,438 Net Changes in Fund Balance (574,900)$ (588,610)$ 173,828 762,438$ Fund Balance at Beginning of Year 1,759,584 Fund Balance at End of Year 1,933,412$ Budgeted Amounts ATTACHMENT A 94 City of Temple City, California Schedule of Revenues, Expenditures and Changes in Fund Balance -Budget and Actual Used Oil Fund Year Ended June 30, 2020 Variance with Final Budget - Actual Positive Original Final Amounts (Negative) Revenues Intergovernmental 10,000$ 10,000$ 9,936$ (64)$ Total revenues 10,000 10,000 9,936 (64) Expenditures Current: Public Works 9,000 9,000 7,111 1,889 Total expenditures 9,000 9,000 7,111 1,889 Net Change in Fund Balances 1,000$ 1,000$ 2,825 1,825$ Fund Balance at Beginning of Year 8,148 Fund Balance at End of Year 10,973$ Budgeted Amounts ATTACHMENT A 95 City of Temple City, California Schedule of Revenues, Expenditures and Changes in Fund Balance -Budget and Actual State Gas Tax Fund Year Ended June 30, 2020 Variance with Final Budget - Actual Positive Original Final Amounts (Negative) Revenues Intergovernmental 903,490$ 791,131$ 791,136$ 5$ Investment income 9,500 10,779 10,779 - Total revenues 912,990 801,910 801,915 5 Expenditures Current: Public works 491,582 491,582 430,947 60,635 Total expenditures 491,582 491,582 430,947 60,635 Excess (Deficiency) of Revenue over Expenditures 421,408 310,328 370,968 60,640 Other Financing Sources (Uses) Transfers out - (6,000) (6,000) - Total other financing sources (uses)- (6,000) (6,000) - Net Change in Fund Balances 421,408$ 304,328$ 364,968 60,640$ Fund Balance at Beginning of Year 450,466 Fund Balance at End of Year 815,434$ Budgeted Amounts ATTACHMENT A 96 City of Temple City, California Schedule of Revenues, Expenditures and Changes in Fund Balance -Budget and Actual Traffic Congestion Relief – Section 2181 Year Ended June 30, 2020 Variance with Final Budget - Actual Positive Original Final Amounts (Negative) Revenues Intergovernmental 41,060$ 41,060$ 41,127$ 67$ Investment income 300 300 1,150 850 Total revenues 41,360 41,360 42,277 917 Expenditures Current: Public works - 41,000 32,705 8,295 Total expenditures - 41,000 32,705 8,295 Net Change in Fund Balances 41,360$ 360$ 9,572 9,212$ Fund Balance at Beginning of Year 83,387 Fund Balance at End of Year 92,959$ Budgeted Amounts ATTACHMENT A 97 City of Temple City, California Schedule of Revenues, Expenditures and Changes in Fund Balance -Budget and Actual CDBG Fund Year Ended June 30, 2020 Variance with Final Budget - Actual Positive Original Final Amounts (Negative) Revenues Intergovernmental 552,510$ 552,510$ 198,986$ (353,524)$ Other - - 78,135 78,135 Total revenues 552,510 552,510 277,121 (275,389) Expenditures Current: Community development 552,510 552,510 305,585 246,925 Total expenditures 552,510 552,510 305,585 246,925 Net Changes in Fund Balance -$ -$ (28,464) (28,464)$ Fund Balance at Beginning of Year 1,221,410 Fund Balance at End of Year 1,192,946$ Budgeted Amounts ATTACHMENT A 98 City of Temple City, California Schedule of Revenues, Expenditures and Changes in Fund Balance -Budget and Actual Bicycle and Pedestrian Fund Year Ended June 30, 2020 Variance with Final Budget - Actual Positive Original Final Amounts (Negative) Revenues Intergovernmental 27,000$ 27,000$ 55,023$ 28,023$ Total revenues 27,000 27,000 55,023 28,023 Expenditures Capital outlay 71,000 94,000 55,023 38,977 Total expenditures 71,000 94,000 55,023 38,977 Net Change in Fund Balances (44,000)$ (67,000)$ - 67,000$ Fund Balance at Beginning of Year - Fund Balance at End of Year -$ Budgeted Amounts ATTACHMENT A 99 City of Temple City, California Schedule of Revenues, Expenditures and Changes in Fund Balance -Budget and Actual Air Quality Improvement District Fund Year Ended June 30, 2020 Variance with Final Budget - Actual Positive Original Final Amounts (Negative) Revenues Intergovernmental 47,000$ 47,000$ 58,251$ 11,251$ Investment income 1,999 1,999 686 (1,313) Total revenues 48,999 48,999 58,937 9,938 Expenditures Current: Community services 44,340 171,240 148,833 22,407 Total expenditures 44,340 171,240 148,833 22,407 Net Change in Fund Balances 4,659$ (122,241)$ (89,896) 32,345$ Fund Balance at Beginning of Year 188,447 Fund Balance at End of Year 98,551$ Budgeted Amounts ATTACHMENT A 100 City of Temple City, California Schedule of Revenues, Expenditures and Changes in Fund Balance -Budget and Actual Measure R Fund Year Ended June 30, 2020 Variance with Final Budget - Actual Positive Original Final Amounts (Negative) Revenues Intergovernmental 456,880$ 437,166$ 437,166$ -$ Investment income 5,000 17,515 17,515 - Total revenues 461,880 454,681 454,681 - Expenditures Current: Public works - 14,855 12,229 2,626 Total expenditures - 14,855 12,229 2,626 Net Change in Fund Balances 461,880$ 439,826$ 442,452 2,626$ Fund Balance at Beginning of Year 1,043,109 Fund Balance at End of Year 1,485,561$ Budgeted Amounts ATTACHMENT A 101 City of Temple City, California Schedule of Revenues, Expenditures and Changes in Fund Balance -Budget and Actual Sewer Reconstruction Fund Year Ended June 30, 2020 Variance with Final Budget - Actual Positive Original Final Amounts (Negative) Revenues Charges for services 40,000$ 5,000$ 5,000$ -$ Total revenues 40,000 5,000 5,000 - Net Change in Fund Balances -$ 5,000$ 5,000 -$ Fund Balance at Beginning of Year 974,171 Fund Balance at End of Year 979,171$ Budgeted Amounts ATTACHMENT A 102 City of Temple City, California Schedule of Revenues, Expenditures and Changes in Fund Balance -Budget and Actual Road Maintenance Rehab Act (RMRA) Year Ended June 30, 2020 Variance with Final Budget - Actual Positive Original Final Amounts (Negative) Revenues Intergovernmental 602,660$ 602,660$ 633,613$ 30,953$ Investment income 2,500 2,500 9,786 7,286 Total revenues 605,160 605,160 643,399 38,239 Expenditures Capital outlay 1,384,000 464,000 420,000 44,000 Total expenditures 1,384,000 464,000 420,000 44,000 Net Change in Fund Balances (778,840)$ 141,160$ 223,399 82,239$ Fund Balance at Beginning of Year 849,671 Fund Balance at End of Year 1,073,070$ Budgeted Amounts ATTACHMENT A 103 City of Temple City, California Schedule of Revenues, Expenditures and Changes in Fund Balance -Budget and Actual 1992/1996 Park Road Bond Fund Year Ended June 30, 2020 Variance with Final Budget - Actual Positive Original Final Amounts (Negative) Revenues Intergovernmental 14,500$ 14,500$ 14,500$ -$ Total revenues 14,500 14,500 14,500 - Other Financing Sources (Uses) Transfers out - - (14,500) (14,500) Total other financing sources (uses)- - (14,500) (14,500) Net Change in Fund Balances 14,500$ 14,500$ - (14,500)$ Fund Balance at Beginning of Year - Fund Balance at End of Year -$ Budgeted Amounts ATTACHMENT A 104 City of Temple City, California Schedule of Revenues, Expenditures and Changes in Fund Balance -Budget and Actual Measure M Fund Year Ended June 30, 2020 Variance with Final Budget - Actual Positive Original Final Amounts (Negative) Revenues Intergovernmental 517,740$ 491,943$ 491,943$ -$ Investment income 2,500 12,890 12,890 - Total revenues 520,240 504,833 504,833 - Expenditures Capital outlay 800,000 155,200 180,408 (25,208) Total expenditures 800,000 155,200 180,408 (25,208) Net Change in Fund Balances (279,760)$ 349,633$ 324,425 (25,208)$ Fund Balance at Beginning of Year 714,148 Fund Balance at End of Year 1,038,573$ Budgeted Amounts ATTACHMENT A 105 City of Temple City, California Schedule of Revenues, Expenditures and Changes in Fund Balance -Budget and Actual Park Acquisition Fund Year Ended June 30, 2020 Variance with Final Budget - Actual Positive Original Final Amounts (Negative) Revenues Charges for services 40,000$ 24,500$ 24,500$ -$ Total revenues 40,000 24,500 24,500 - Expenditures Current: Public Works - 15,000 14,563 437 Capital outlay 35,000 26,000 27,232 (1,232) Total expenditures 35,000 41,000 41,795 (795) Net Change in Fund Balances 5,000$ (16,500)$ (17,295) (795)$ Fund Balance at Beginning of Year 109,802 Fund Balance at End of Year 92,507$ Budgeted Amounts ATTACHMENT A 106 City of Temple City, California Schedule of Revenues, Expenditures and Changes in Fund Balance -Budget and Actual Lighting and Landscape District Fund Year Ended June 30, 2020 Variance with Final Budget - Actual Positive Original Final Amounts (Negative) Revenues Taxes 1,510,000$ 1,571,790$ 1,565,816$ (5,974)$ Investment income 5,000 46,563 46,563 - Total revenues 1,515,000 1,618,353 1,612,379 (5,974) Expenditures Current: Public works 1,287,825 1,167,779 1,154,596 13,183 Total expenditures 1,287,825 1,167,779 1,154,596 13,183 Net Change in Fund Balances 227,175$ 450,574$ 457,783 7,209$ Fund Balance at Beginning of Year 2,905,489 Fund Balance at End of Year 3,363,272$ Budgeted Amounts ATTACHMENT A Statistical Section June 30, 2020 City of Temple City, California ATTACHMENT A This page intentionally left blank. ATTACHMENT A 109 City of Temple City, California Description of Statistical Section Contents June 30, 2020 This part of the City of Temple City’s (City) comprehensive annual financial report presents detail information as a context for understanding what the information in the financial statements, note disclosures and required supplementary information says about the City’s overall financial health. Financial Trends These schedules contain trend information to help the reader understand how the City’s financial performance and well-being have changed over time. Revenue Capacity These schedules contain information to help the reader assess the affordability of the City’s current levels of outstanding debt and the City’s ability to issued additional debt in the future. Debt Capacity These schedules present information to help the reader assess the affordability of the City’s current levels of outstanding debt and the City’s ability to issue additional debt in the future. Demographic and Economic Information These schedules offer demographic and economic indicators to help the reader understand the environmental within which the City’s financial activities take place. Operating Information These schedules contain service and infrastructure data to help the reader understand how the information of the City’s financial report relates to the services the City provides and the activities it performs. Sources: Unless otherwise noted, the information in these schedules is derived from the comprehensive annual financial reports for the relevant year. ATTACHMENT A 110 City of Temple City, California Financial Trends Net Position by Component Last Ten Fiscal Years 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020Governmental activities:Net position, investment in capital assets 28,131,358 29,208,039 38,038,920 51,168,623 52,166,900 53,143,904 51,724,138 52,306,797 51,292,676 50,555,287 Restricted14,736,866 11,889,013 8,445,931 4,083,955 4,898,508 6,132,978 7,098,321 8,518,526 11,957,258 13,329,527Unrestricted16,112,547 24,103,180 21,329,869 9,044,919 11,485,507 11,584,805 9,745,324 7,752,940 7,944,711 6,379,170 Total governmental activities net assets58,980,771 65,200,232 67,814,720 64,297,497 68,550,915 70,861,687 68,567,783 68,578,263 71,194,645 70,263,984 % changes from prior year3.05% 10.54% 4.01% -5.19% 6.62% 3.37% -3.24% 0.02% 3.82% -1.31%Source: City of Temple City's Comprehensive Annual Financial Report ATTACHMENT A 111 City of Temple City, California Financial Trends Change in Net Position – Expenses and Program Revenues Last Ten Fiscal Years 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Expenses: Governmental activities: General government 2,827,384 3,281,194 3,769,018 3,512,190 3,663,847 4,051,109 5,502,437 4,135,881 4,232,622 6,302,189 Public safety 4,662,120 4,818,217 5,122,868 5,718,966 5,005,841 4,958,470 5,301,481 5,878,016 5,952,525 6,690,824 Public works 1,960,629 2,162,481 2,520,925 2,970,264 3,065,241 2,901,053 4,813,770 4,668,273 2,837,774 3,248,159 Community development 1,657,399 1,562,859 1,692,614 2,222,569 3,314,298 2,165,352 2,600,043 1,924,496 1,870,993 1,984,027 Community Services 3,016,958 3,357,423 2,990,670 2,947,479 2,940,625 3,042,016 3,416,338 3,659,828 4,208,894 4,224,249 Interest on Long-Term Debt 429,238 149,503 - - - - - - - - Total governmental activities expenses 14,553,728 15,331,677 16,096,095 17,371,468 17,989,852 17,118,000 21,634,069 20,266,494 19,102,808 22,449,448 Program revenues: Governmental activities: Changes for services General government 82,910 39,317 1,128,428 142,880 168,420 117,564 114,326 105,743 116,086 36,011 Public safety 516,034 719,955 588,380 596,058 469,919 323,446 825,166 624,852 642,185 556,510 Public works 88,506 220,136 314,631 917,044 978,835 915,330 1,038,514 976,036 944,665 930,054 Community development 1,007,719 1,322,476 1,315,893 1,424,955 1,953,925 2,005,946 1,845,202 1,805,059 1,609,882 1,276,471 Community Services 517,381 528,043 567,649 596,879 588,477 670,770 597,718 539,835 528,372 251,875 Operating grants and contributions General government 44,773 - - 141,216 8,089 7,812 - - - - Public safety 136,935 100,238 100,135 100,000 106,230 120,618 129,323 139,416 148,748 167,948 Public works 4,065,287 3,749,837 5,128,889 4,772,938 4,679,133 3,468,405 3,496,161 3,800,689 4,121,316 4,191,881 Community development 273,917 246,086 856,693 2,279,234 785,166 701,996 726,858 789,118 786,821 738,391 Community Services 83,035 99,848 73,000 88,168 227,450 117,093 131,600 21,900 75,508 92,635 Capital grants and contributions Public works - - - - - - - 1,295,350 454,608 437,166 Total governmental activities revenues 6,816,497 7,025,936 10,073,698 11,059,372 9,965,644 8,448,980 8,904,868 10,097,998 9,428,191 8,678,942 Net revenues (expenses): Governmental activities:(7,737,231) (8,305,741) (6,022,397) (6,312,096) (8,024,208) (8,669,020) (12,729,201) (10,168,496) (9,674,617) (13,770,506) General revenues and other changes in net assets: Taxes Property Taxes 3,259,485 2,253,677 2,474,978 2,597,549 2,728,718 2,873,580 3,044,928 3,301,789 3,495,364 3,670,281 Transient Occupancy Tax 34,221 32,966 28,898 46,849 53,612 59,522 54,864 61,271 58,424 43,505 Sales Tax 1,614,726 1,642,318 1,711,128 1,735,613 1,873,423 2,000,558 1,959,152 2,146,888 2,189,206 1,919,780 Franchise Tax 542,523 553,598 550,527 562,535 590,620 573,650 537,773 557,594 569,736 576,214 Other Taxes 99,701 99,417 158,962 171,193 175,892 180,943 193,670 187,066 163,989 135,433 Investment Income 409,097 378,269 132,565 203,571 180,197 282,190 78,329 186,315 829,962 685,260 State Motor Vehicle In Lieu 3,229,851 3,196,237 3,310,180 3,472,659 4,887,322 4,071,629 4,172,548 4,463,316 4,694,844 5,544,150 State Revenue-Other 8,844 12,276 7,579 11,166 8,958 15,273 8,575 9,064 9,669 7,112 Other 285,881 1,071,678 262,068 237,723 778,693 399,458 385,458 309,163 279,805 258,110 Total general revenues and transfers 9,484,329 9,240,436 8,636,885 9,038,858 11,277,435 10,456,803 10,435,297 11,222,466 12,290,999 12,839,845 Changes in net position 1,747,098 934,695 2,614,488 2,726,762 3,253,227 1,787,783 (2,293,904) 1,053,970 2,616,382 (930,661) Extraordinary items - RDA dissolution:- 3,744,062 - - - - - - - - Change in net assets 1,747,098 4,678,757 2,614,488 2,726,762 3,253,227 1,787,783 (2,293,904) 1,053,970 2,616,382 (930,661) Net Assets at beginning of year 57,233,673 60,521,475 65,200,232 61,570,735 65,297,488 69,073,904 70,861,867 67,524,293 68,578,263 71,194,645 Net Assets at end of year 58,980,771 68,944,294 67,814,720 64,297,497 68,550,715 70,861,687 68,567,963 68,578,263 71,194,645 70,263,984 Source: City of Temple City's Comprehensive Annual Financial Report ATTACHMENT A 112 City of Temple City, California Financial Trends Fund Balances of Governmental Funds Last Ten Fiscal Years 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020General FundNonspendable - 1,678 12,795 10,531 409,084 463,539 480,576 128,670 68,993 86,061 Restricted1,771,165 - - - - - - - - - Committed- 4,500,000 4,500,000 3,500,000 3,500,000 3,500,000 3,500,000 3,500,000 3,500,000 3,500,000 Assigned- 17,200,000 15,150,000 12,769,580 12,868,392 12,302,864 11,513,004 10,589,004 10,455,704 10,455,704 Unassigned23,542,553 2,352,402 1,764,267 1,725,404 3,249,131 3,538,853 3,403,359 4,713,137 6,019,290 6,056,188 Total general Fund25,313,718 24,054,080 21,427,062 18,005,515 20,026,607 19,805,256 18,896,939 18,930,811 20,043,987 20,097,953 All other governmental fund:Nonspendable- - - - 1,088,219 170,305 170,597 174,549 171,994 185,582 Restricted14,736,866 11,889,013 8,445,931 2,959,528 4,898,508 6,322,718 6,927,724 8,343,977 11,785,264 13,154,783 Unassigned, reported in:Special revenue funds (84,843) - (150) - - (360,045) (197,244) - - - Capital projects funds- - - - (1,722,989) - - - - - Debt service funds (3,223,856) - - - - - - - - - Total all other governmental funds11,428,167 11,889,013 8,445,781 2,959,528 4,263,738 6,132,978 6,901,077 8,518,526 11,957,258 13,340,365 Total Governmental Funds36,741,885 35,943,093 29,872,843 20,965,043 24,290,345 25,938,234 25,798,016 27,449,337 32,001,245 33,438,318 Note: This schedule reports is using the modified accrual basis of accountingSource: City of Temple City's Comprehensive Annual Financial Report ATTACHMENT A 113 City of Temple City, California Financial Trends Changes in Fund Balances of Governmental Funds Last Ten Fiscal Years 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Revenues: Taxes 6,303,326 6,126,340 6,068,935 6,310,783 6,678,220 7,004,011 7,164,365 7,609,593 8,056,086 7,911,029 Licenses and Permits 1,028,284 1,345,183 1,335,720 1,434,610 1,844,793 1,775,836 1,772,186 1,653,939 1,653,876 1,267,936 Intergovermental 6,462,142 6,026,300 7,980,590 9,334,821 8,964,552 6,816,792 7,324,903 9,234,861 8,800,188 9,719,203 Charges for services 1,104,495 929,351 2,180,285 1,760,155 2,204,878 1,985,763 1,622,594 1,693,445 1,430,382 1,050,937 Fines 495,469 697,246 568,553 580,039 447,512 312,136 813,727 611,077 624,968 541,065 Use of money and property 562,190 493,070 220,984 411,657 242,457 312,681 91,291 192,144 829,962 685,260 Rental Income 49,195 74,632 85,359 68,411 89,116 84,241 87,460 31,686 32,636 34,637 Other 415,145 128,805 269,647 197,755 771,551 373,933 411,573 356,541 317,846 308,720 Total revenues 16,420,246 15,820,927 18,710,073 20,098,231 21,243,079 18,665,393 19,288,099 21,383,286 21,745,944 21,518,787 Expenditures Current: General Government 2,492,012 2,773,777 3,778,538 3,130,434 3,393,501 3,440,424 4,502,828 3,822,997 3,832,851 5,287,395 Community development 1,231,126 1,227,221 1,635,843 2,047,539 1,843,581 2,137,193 2,260,626 1,763,859 1,653,288 1,664,554 Public Safety 4,353,874 4,676,268 5,103,805 5,213,419 4,878,406 4,834,728 5,208,959 5,479,406 5,498,837 5,613,449 Public works 1,665,506 1,803,025 2,207,950 2,544,287 2,746,162 2,888,326 2,555,994 4,400,038 2,687,989 2,725,132 Community Services 2,733,160 2,994,515 2,784,456 2,739,171 2,667,377 2,926,417 2,998,348 3,060,094 3,061,698 3,544,049 Capital outlay:1,132,410 1,520,720 9,269,731 13,929,743 1,665,752 1,313,404 1,901,562 1,205,571 459,373 1,247,135 Debt services Principal retirement 305,000 315,000 - - - - - - - - Interest and fiscal charges 433,050 153,684 - - - - - - - - Bond Issuance Costs - - - - - - - - - - Pass-Through payment 36,333 10,897 - - - - - - - - ERAF Payment 67,974 - - - - - - - - - Total expenditures 14,450,445 15,475,107 24,780,323 29,604,593 17,194,779 17,540,492 19,428,317 19,731,965 17,194,036 20,081,714 Excess (deficiency) of revenues over (under) expenditures 1,969,801 345,820 (6,070,250) (9,506,362) 4,048,300 1,124,901 (140,218) 1,651,321 4,551,908 1,437,073 Other financing sources (uses): Transfers in 1,740,640 2,345,392 10,038,826 13,041,701 13,041,701 2,422,109 2,583,586 3,434,672 705,625 20,500 Transfer out (1,740,640) (2,345,392) (10,038,826) (13,041,701) (13,041,701) (2,422,109) (2,583,586) (3,434,672) (705,625) (20,500) Net other financing sources (uses)- - - - - - - - - - Change in fund balance before extraordinary items 1,969,801 345,820 (6,070,250) (9,506,362) 4,048,300 1,124,901 (140,218) 1,651,321 4,551,908 1,437,073 Extraordinary items - RDA dissolution transaction:- (517,387) - - - - - - - - Net change in fund balance 1,969,801 (171,567) (6,070,250) (9,506,362) 4,048,300 1,124,901 (140,218) 1,651,321 4,551,908 1,437,073 Fund balances at beginning of year - restated:34,144,859 36,114,660 35,943,093 30,471,405 20,242,045 24,813,333 25,938,234 25,798,016 27,449,337 32,001,245 Fund balance (deficit) at end of year:36,114,660 35,943,093 29,872,843 20,965,043 24,290,345 25,938,234 25,798,016 27,449,337 32,001,245 33,438,318 Note: This schedule reports using the modified accrual basis of accounting Source: City of Temple City's Comprehensive Annual Financial Report ATTACHMENT A 114 City of Temple City, California Revenue Capacity Assessed Value of Taxable Property Last Ten Fiscal Years Category2011 2012 2013 2014 2015 20162017 2018 2019 2020Residential3,049,375,507 3,176,587,665 3,291,734,411 3,466,485,194 3,689,389,556 3,949,327,479 4,184,155,132 4,464,264,206 4,706,546,836 4,983,964,871Commercial235,240,642 241,334,139 247,949,455 256,434,441 268,609,969 282,005,464 288,818,280 336,078,499 349,480,195 364,488,850Industrial38,968,701 39,934,596 41,224,415 42,828,810 43,112,473 40,173,472 43,967,128 49,126,947 50,709,009 51,723,144Institutional17,129,301 19,415,635 14,560,720 14,528,414 19,873,535 20,262,630 23,706,695 22,852,164 16,006,110 26,222,954Irrigated495,652 499,382 459,000 468,180 106,342 106,342 106,965 88,220 88,220 92,280Miscellaneous55,370 55,784 56,898 58,033 38,308 38,398 39,061 11,717 11,968 12,567Recreational2,150,752 1,191,956 1,213,113 1,522,574 1,239,690 1,261,780 2,467,340 2,514,003 2,561,599 4,319,815Vacant28,565,197 27,242,717 32,285,185 32,646,273 31,540,476 35,042,469 50,776,655 41,788,132 53,403,213 48,730,812SBE Nonunitary252,011 252,011 252,011 252,011 252,011 252,011 82,127 82,127 82,127 82,127Cross Reference7,959,915 8,116,437 9,176,726 10,334,699 10,214,241 11,719,323 12,598,787 6,914,280 7,105,994 7,387,739Unsecured29,917,083 32,360,705 32,947,948 32,675,627 33,888,380 33,249,866 31,320,279 35,686,580 33,655,896 37,153,754Exempt(5,735,744) (5,735,744) (5,735,744) (5,735,744) (6,706,835) (6,812,731) (6,587,215) (6,587,215) (6,587,215) (6,587,215)TOTALS3,410,110,131 3,546,991,027 3,671,859,882 3,858,234,256 4,098,264,981 4,373,439,234 4,638,038,449 4,959,406,875 5,219,651,167 5,524,178,913Total Direct Rate0.09202 0.09120 0.09076 0.08886 0.08892 0.08895 0.08895 0.08891 0.08893 0.08899Source: HdL Coren & ConeNotes:Exempt values are not included in Total.In 1978 the voters of the State of California passed Proposition 13 which limited taxes to a total maximum rate of 1%, based upon the assessed value of the property being taxed. Each year, the assessed value of property may be increased by an "inflation factor" (limited to a maximum of 2%). With few exceptions, property is only reassessed as a result of new construction activity or at the time it is sold to a new owner. At that point, the property is reassessed based upon the added value of the construction or at the purchase price (market value) or economic value of the property sold. The assessed valuation data shown above represents the only data currently available with respect to the actual market value of taxable property and is subject to the limitations described above. ATTACHMENT A 115 City of Temple City, California Revenue Capacity Direct and Overlapping Property Tax Rates Last Ten Fiscal Years 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Basic Levy¹1.00000 1.00000 1.00000 1.00000 1.00000 1.00000 1.00000 1.00000 1.00000 1.00000 Arcadia Unified 0.07456 0.07691 0.07670 0.07550 0.07653 0.07507 0.07788 0.07551 0.05365 0.05433 El Monte City School District 0.12388 0.12733 0.13288 0.12735 0.11822 0.14642 0.14682 0.14616 0.14580 0.10803 El Monte Union High School 0.08475 0.09591 0.08992 0.09799 0.08418 0.09155 0.08469 0.08243 0.08793 0.10969 La Community College District 0.04031 0.03530 0.04875 0.04454 0.04017 0.03575 0.03596 0.04599 0.04621 0.02717 Metropolitan Water District 0.00370 0.00370 0.00350 0.00350 0.00350 0.00350 0.00350 0.00350 0.00350 0.00350 Pasadena Community College Dist 0.01986 0.01956 0.02056 0.01899 0.01032 0.00872 0.00885 0.00819 0.00767 0.00721 Rosemead School District 0.10743 0.10507 0.10240 0.10314 0.09886 0.09997 0.08533 0.11979 0.09260 0.08682 San Gabriel Unified 0.10190 0.08454 0.10523 0.10082 0.11444 0.10684 0.10534 0.10078 0.10563 0.09682 Temple City Unified 0.04950 0.04590 0.04981 0.10744 0.09985 0.09823 0.10052 0.10232 0.10245 0.09712 Total Direct & Overlapping² Tax Rates 1.60589 1.59422 1.62975 1.67927 1.64607 1.66605 1.64889 1.68467 1.64544 1.59069 City's Share of 1% Levy Per Prop 13³ 0.09370 0.09370 0.09370 0.09370 0.09370 0.09370 0.09370 0.09370 0.09370 0.09370 Voter Approved City Debt Rate Redevelopment Rate⁴1.00370 1.00370 Total Direct Rate⁵0.09202 0.09120 0.09076 0.08886 0.08892 0.08895 0.08895 0.08891 0.08895 0.08899 Notes: ¹In 1978, California voters passed Proposition 13 which set the property tax rate at a 1.00% fixed amount. This 1.00% is shared by all taxing agencies for which the subject property resides within. In addition to the 1.00% fixed amount, property owners are charged taxes as a percentage of assessed property values for the payment of any voter approved bonds. ²Overlapping rates are those of local and county governments that apply to property owners within the City. Not all overlapping rates apply to all property owners. ³City's Share of 1% Levy is based on the City's share of the general fund tax rate area with the largest net taxable value within the City. The ERAF portion of the City's Levy has been subtracted where known. ⁴Redevelopment Rate is based on the largest RDA tax rate area and only includes rate(s) from indebtedness adopted prior to 1989 per California State statute. RDA direct and overlapping rates are applied only to the incremental property values. The approval of ABX1 26 eliminated Redevelopment from the State of California for the fiscal year 2012/13 and years thereafter. ⁵Total Direct Rate is the weighted average of all individual direct rates applied by the City/Agency preparing the statistical section information and excludes revenues derived from aircraft. Beginning in 2013/14 the Total Direct Rate no longer includes revenue generated from the former redevelopment tax rate areas. Challenges to recognized enforceable obligations are assumed to have been resolved during 2012/13. For the purposes of this report, residual revenue is assumed to be distributed to the City/Agency in the same proportions as general fund revenue. Source: HdL Coren & Cone ATTACHMENT A 116 City of Temple City, California Revenue Capacity Property Tax Levies and Collections Last Ten Fiscal Years Fiscal Year Ended June 30 Taxes Levied for the Fiscal Year Amount Percent of Levy Collections in Subsequent Years Amount Percent of Levy 2011 3,238,026 2,941,760 90.85%296,266 3,238,026 100.00% 2012 3,359,572 3,063,945 91.20%295,627 3,359,572 100.00% 2013 3,619,421 3,174,199 87.70%445,222 3,619,421 100.00% 2014 3,794,593 3,340,124 88.02%454,469 3,794,593 100.00% 2015 3,984,673 3,549,165 89.07%435,508 3,984,673 100.00% 2016 3,897,361 3,428,032 87.96%469,329 3,897,361 100.00% 2017 3,421,264 3,044,928 89.00%376,336 3,421,264 100.00% 2018 4,318,723 4,111,632 95.20%37,046 4,148,678 96.06% 2019 4,565,629 4,391,199 96.18%- 4,391,199 96.18% 2020 4,851,363 4,660,956 96.08%- 4,660,956 96.08% Source: Los Angeles County Auditor Controller Collected within the Fiscal Year of Levy Total Collections to Date Note: The amounts presented include city property taxes, Muni Lighting District, Muni Lighting District A, and Muni Lighting District B ATTACHMENT A 117 City of Temple City, California Revenue Capacity General Fund Revenues Last Ten Fiscal Years Fiscal year Licenses &Charges for Investment Rental Total ended Taxes Permits Inter-Gov'tal Services Fines Income Income Other Revenues 2011 4,451,470 1,028,284 3,229,851 631,355 423,041 409,097 57,442 414,145 10,644,685 2012 4,581,975 1,345,183 3,196,237 757,496 646,498 378,269 57,268 128,805 11,091,731 2013 4,924,493 1,335,720 3,310,180 957,437 521,440 132,565 53,369 269,647 11,504,851 2014 5,113,739 1,434,610 3,480,366 1,510,392 554,805 203,571 68,411 246,206 12,612,100 2015 5,422,265 1,844,793 4,895,411 1,527,116 433,102 148,086 89,116 819,206 15,179,095 2016 5,688,253 1,775,836 4,079,441 1,627,626 303,524 306,568 84,241 303,058 14,168,547 2017 5,790,387 1,772,186 4,172,548 1,414,108 813,356 77,777 87,460 306,575 14,434,397 2018 6,173,068 1,653,939 4,463,317 1,491,537 611,074 131,324 31,686 286,041 14,841,986 2019 6,558,259 1,653,876 4,694,844 1,292,466 624,968 714,889 32,636 256,838 15,828,776 2020 6,345,213 1,267,936 5,544,150 994,072 541,065 536,782 34,637 230,585 15,494,440 Source: City of Temple City's Comprehensive Annual Financial Report ATTACHMENT A 118 City of Temple City, California Revenue Capacity Principal Property Taxpayers Current Fiscal Year and Nine Fiscal Years 2020 2011 Percentage of Percentage of City City Taxable Taxable Taxable Taxable Assessed Assessed Assessed Assessed Taxpayer Value Rank Value Value Rank Value Gateway LP $38,583,220 1 0.70% - - - Calac Investment $25,517,368 2 0.46% $20,466,231 1 0.60% Gradiazio Investment Company $15,777,467 3 0.29% $10,313,027 3 0.30% Meiling Wang $9,733,130 4 0.18%- - - Ho Sultana LLC $9,030,392 5 0.16%- - - Ralphs Grocery Company (Pending Appeals on Parcels) $8,460,282 6 0.15% $6,115,095 5 0.18% Huixia Chen Trust Wang Chen Family $8,416,020 7 0.15%- - - 5600 Gracewood LLC $7,784,691 8 0.14%- - - James J and Sue Femino Trust $6,374,615 9 0.12% $5,508,894 6 0.16% Dominic Zhang 66 LLC $6,350,000 10 0.11%- - - TCD Enterprises (Pending Appeals on Parcels) - - - $13,094,990 2 0.38% Santa Anita Convalescent Hospital and Rehab - - - $7,763,537 4 0.23% General Board of the Church of the Nazarene - - - $5,101,580 7 0.15% Barchester Temple City - - - $4,982,081 8 0.15% Christian Church Pacific Southwest Region - - - $4,935,478 9 0.14% Zou Xiachun and Chang Peiwen - - - $4,609,690 10 0.14% Top Ten Total $136,027,185 2.46% $82,890,603 2.43% City Total $5,524,178,913 $3,410,110,131 The amounts shown above include assessed value data for both the City and the Successor Agency. Source: HdL Coren & Cone ATTACHMENT A 119 City of Temple City, California Revenue Capacity Top 25 Sales Tax Producers Current Fiscal Year Business Name*Business Category AT&T Mobility Electronics/Appliance Bistro Na's Casual Dining Chevron Service Stations Chun La Hao Chongqing Hot Pot Casual Dining Circle K Service Stations CVS Pharmacy Drug Stores Grand Harbor Restaurant Casual Dining Icho Izakaya Fusion Cuisine Casual Dining In N Out Burger Quick-Service Restaurants Kanghodong Baekjeong Casual Dining Kmart Discount Dept Stores McDonalds Quick-Service Restaurant Modern Lighting Plumbing/Electrical Office Office Depot Supplies/Furniture Oo-Kook Korean BBQ Casual Dining Ralphs Grocery Store Rite Aid Drug Stores Shiki Seafood Buffet Casual Dining Summer Rolls Fast-Casual Restaurants Super A Foods Grocery Stores Temple City Shell Service Stations Temple Oak Fuel Service Stations The Hat Quick-Service Restaurants TJ Maxx Family Apparel Valero Service Stations *Firms listed alphabetically. Period: July 2019 thru March 2020 Source: HdL Coren & Cone Percent of Fiscal Year Total Paid By Top 25 Accounts = 56.11% ATTACHMENT A 120 City of Temple City, California Debt Capacity Direct and Overlapping Debt June 30, 2020 Gross Bonded Debt Balance Percent Applicable to City Net Bonded Debt *337.0 18,151,752 0.417 75,718 473.57 10,560,000 10.696 1,129,472 473.58 453,123 10.696 48,465 473.59 9,780,000 10.696 1,046,046 473.62 5,967,741 10.696 638,295 473.63 8,564,121 10.696 915,998 473.64 6,675,000 10.696 713,942 473.65 31,920,000 10.696 3,414,087 473.66 5,490,000 10.696 587,197 473.67 4,845,000 10.696 518,210 473.68 17,505,000 10.696 1,872,293 629.55 625,000 4.005 25,032 629.56 5,110,000 4.005 204,658 629.57 273,740 4.005 10,963 629.59 5,340,000 4.005 213,869 629.60 12,075,000 4.005 483,609 629.61 1,800,000 4.005 72,091 629.62 25,575,000 4.005 1,024,289 745.56 29,820,673 6.460 1,926,287 745.57 25,460,000 6.460 1,644,607 745.58 3,880,000 6.460 250,631 745.59 2,550,000 6.460 164,719 745.60 48,425,000 6.460 3,128,047 745.61 10,500,098 6.460 678,261 745.62 52,245,000 6.460 3,374,802 805.55 2,115,000 0.016 332 805.56 31,555,000 0.016 4,953 805.65 75,000,000 0.016 11,772 805.66 125,000,000 0.016 19,620 805.67 900,000,000 0.016 141,263 805.69 199,000,000 0.016 31,235 805.70 35,410,000 0.016 5,558 805.71 205,725,000 0.016 32,290 805.73 1,395,190,000 0.016 218,987 805.74 24,305,000 0.016 3,815 805.75 230,015,000 0.016 36,103 805.76 197,360,000 0.016 30,977 805.78 813,785,000 0.016 127,730 812.55 12,405,000 5.733 711,160 812.56 54,045,000 5.733 3,098,317 LA CCD DS 2015 REF SERIES A LA CCD DS 2015 REF SERIES B LA CCD DS 2015 REF SERIES C LA CCD DS 2008 SERIES I LA CCD DS 2016 REF BONDS PASADENA CCD DS 2014 REF SERIES A PASADENA CCD DS 2016 REF SERIES A LA CCD DS 2008 SERIES G EL MONTE UNION HSD DS 2008 SERIES C EL MONTE UNION HSD DS 2016 REF BONDS EL MONTE UNION HSD DS 2008 SERIES D EL MONTE UNION HSD DS 2018 SERIES A LA CCD DS 2003 TAXABLE SERIES 2004B LA CCD DS 2001 TAXABLE SERIES 2004A LA CCD DS 2008, 2009 TAXABLE SER B LA CCD DS 2008, 2010 TAX SERIES D LA CCD DS 2008, 2010 TAX SER E (BABS) LA CCD DS 2008 2012 SERIES F LA CCD DS 2013 REF BONDS EL MONTE UNION HSD DS 2016 REF DLYD DLVR EL MONTE CITY SD DS 2017 REF BOND SER A EL MONTE CITY SD DS 2017 REF BOND SER B ROSEMEAD SD DS 2011 REF BOND ROSEMEAD SD DS 2012 REF BONDS ROSEMEAD SD DS 2008 SERIES B ROSEMEAD SD DS 2014 REF BONDS ROSEMEAD SD DS 2016 REF BONDS ROSEMEAD SD DS 2008 SERIES C ROSEMEAD SD DS 2014 SERIES A EL MONTE UNION HSD DS 2008 SERIES B EL MONTE UNION HSD DS 2015 REF BONDS EL MONTE CITY SD DS 2014 SERIES B Overlapping Debt METROPOLITAN WATER DISTRICT EL MONTE CITY SD DS 2015 EL MONTE CITY SD DS 2004 SERIES C EL MONTE CITY SD DS 2016 EL MONTE CITY SD DS 2008, SERIES B EL MONTE CITY SD DS 2012 REFUND BONDS EL MONTE CITY SD DS 2014 SERIES A EL MONTE CITY SD DS 2015 REF BONDS ATTACHMENT A 121 City of Temple City, California Debt Capacity Direct and Overlapping Debt June 30, 2020 Gross Bonded Debt Balance Percent Applicable to City Net Bonded Debt 817.53 220,889 2.906 6,418 817.57 28,850,000 2.906 838,262 817.58 190,425,000 2.906 5,532,963 920.56 8,407,370 2.260 190,026 920.57 5,705,000 2.260 128,946 920.58 13,235,940 2.260 299,163 920.59 22,851,249 2.260 516,492 920.60 29,830,000 2.260 674,228 947.52 4,288,283 71.927 3,084,429 947.53 6,780,000 71.927 4,876,643 947.54 5,061,823 71.927 3,640,812 947.55 27,295,000 71.927 19,632,446 947.56 53,152,588 71.927 38,231,006 106,287,534 Direct Debt Overlapping Debt Total Debt *This fund is a portion of a larger agency, and is responsible for debt in areas outside the city. Note: Overlapping governments are those that coincide, at least in part, with the geographic boundaries of the city. The percentage of overlapping debt applicable is estimated by using taxable assessed values. Applicable percentages were estimated by determining the portion of another governmental unit's taxable assessed value that is within the city's boundaries and dividing it by each unit's total taxable assessed value. Source: HdL Coren & Cone Debt to Assessed Valuation Ratios:0.00% 1.98% 1.98% 2019/20 Assessed Valuation: $5,374,176,228 After Deducting $150,002,685 Incremental Value. SAN GABRIEL USD DS 2010 REF BOND SAN GABRIEL USD DS 2008 SERIES B SAN GABRIEL USD DS 2012 REF BOND SERIES B SAN GABRIEL USD DS 2008 SERIES C SAN GABRIEL USD DS 2015 REF BOND SERIES A TEMPLE CITY USD DS 1998 SERIES B TEMPLE CITY USD DS 2005 REFUNDING BOND TEMPLE CITY USD DS 2012 SERIES A TEMPLE CITY USD DS 2019 TEMPLE CITY USD DS 2017 REFUNDING BOND Total Overlapping Debt ARCADIA UNIFIED DS 2017 REF Overlapping Debt (Continued) ARCADIA UNIFIED DS 1993 SERIES C ARCADIA UNIFIED DS 2006 SERIES B ATTACHMENT A 122 City of Temple City, California Demographic and Economic Statistics Lat Ten Fiscal Years Per Capita Calendar City Personal Personal Unemployment Median Year Population Income Income Rate Age 2010 35,892 $1,000,992,000 $27,889 8.2%40.8 2011 35,749 $936,409,000 $26,194 8.0%40.6 2012 35,952 $947,227,000 $26,347 6.0%40.9 2013 36,134 $932,474,000 $25,806 4.9%41.5 2014 36,152 $963,668,000 $26,656 5.4%41.3 2015 36,534 $986,655,000 $27,006 4.4%42.3 2016 36,389 $1,008,813,000 $27,723 3.4%42.9 2017 36,411 $974,762,000 $26,771 3.5%43.4 2018 36,583 $1,031,698,000 $28,201 3.8%43.0 2019 36,150 $1,083,242,000 $29,965 3.6%43.3 Sources: HdL Coren & Cone ATTACHMENT A 123 City of Temple City, California Operating Information Construction Activity Last Ten Fiscal Years New Calendar New New Value of year ended Residential Commercial Total Demolitions Construction 2011 23,754,355 1,175,540 24,929,895 139,048 24,790,847 2012 19,536,413 2,490,427 22,026,840 144,000 21,882,840 2013 21,298,596 14,433,160 35,731,756 322,000 35,409,756 2014 32,964,118 1,298,205 34,262,323 429,900 33,832,423 2015 37,651,625 2,217,000 39,868,625 421,900 39,446,725 2016 30,428,763 2,153,520 32,582,283 474,000 32,108,283 2017 32,812,558 725,000 33,537,558 371,398 33,166,160 2018 21,043,402 1,325,360 22,368,762 439,850 21,928,912 2019 21,659,346 2,726,606 24,385,952 328,600 24,057,352 2020 9,065,360 185,000 9,250,360 210,200 9,040,160 Source: City of Temple City Community Development Department ATTACHMENT A 124 City of Temple City, California Operating Information Full-Time Equivalent City Employees by Function Last Ten Fiscal Years Function 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 General Government Full-Time 7.80 7.80 8.80 9.95 9.95 9.95 10.95 10.95 10.95 10.95 Part-Time 0.85 3.11 3.11 1.85 2.12 2.82 1.44 1.26 0.68 0.73 8.65 10.91 11.91 11.80 12.07 12.77 12.39 12.21 11.63 11.68 Community Development Full-Time 6.10 6.10 6.20 6.90 6.90 6.90 6.90 6.95 6.95 6.95 Part-Time 0.06 1.64 2.64 1.60 1.26 0.69 0.55 0.85 1.19 0.53 6.16 7.74 8.84 8.50 8.16 7.59 7.45 7.80 8.14 7.48 Parks & Recreation Full-Time 12.15 12.15 12.25 12.05 12.05 12.05 12.05 12.05 12.05 12.05 Part-Time 18.96 22.66 18.92 26.05 26.22 26.69 23.97 24.86 18.05 15.45 31.11 34.81 31.17 38.10 38.27 38.74 36.02 36.91 30.10 27.50 Public Safety Full-Time 7.05 7.05 7.65 7.55 7.55 6.85 6.85 4.60 4.60 4.60 Part-Time 2.33 4.22 4.07 4.51 2.83 1.41 1.54 1.64 1.74 1.52 9.38 11.27 11.72 12.06 10.38 8.26 8.39 6.24 6.34 6.12 Public Works Full-Time 2.90 2.90 3.10 3.55 3.55 3.25 4.25 6.45 6.45 6.45 Part-Time - 0.28 1.79 0.46 1.84 0.83 0.12 - - 1.33 2.90 3.18 4.89 4.01 5.39 4.08 4.37 6.45 6.45 7.78 Full-Time Total 36.00 36.00 38.00 40.00 40.00 39.00 41.00 41.00 41.00 41.00 Part-Time Total (1)22.20 31.91 30.53 34.47 34.27 32.44 27.62 28.61 21.66 19.56 TOTAL 58.20 67.91 68.53 74.47 74.27 71.44 68.62 69.61 62.66 60.56 Note: (1) 2,080 Hours of Part Time equals to 1 Full-Time Equivalent Source: City of Temple City Administrative Services Department ATTACHMENT A 125 City of Temple City, California Operating Information Operating Indicators by Function Last Ten Fiscal Years 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Public Safety: Arrests 949 1,105 852 626 758 535 548 486 680 792 Parking Citations 9,024 9,926 10,025 10,260 9,919 5,288 9,946 13,128 11,419 8,449 Public Works: Sewers new connections 25 30 59 94 106 82 87 78 80 48 Parks & Recreation: Number of recreation classes 390 400 368 380 374 326 320 210 204 116 Number of facility rentals 1,083 1,110 1,178 1,072 1,254 972 1,057 1,521 1,513 807 Source: City of Temple City Community Development Dept., Parks & Recreation Dept., and Los Angeles County Sheriff Dept. ATTACHMENT A 126 City of Temple City, California Operating Information Capital Asset Statistics by Function/Program Last Ten Fiscal Years 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Public Works: Miles of arterial streets maintained 14 14 14 14 14 14 14 14 14 14 Miles of non-arterial streets maintained 57 57 57 57 57 57 57 57 57 57 Miles of storm drain maintained 2 2 2 2 2 2 2 2 2 2 Number of traffic signals 39 39 39 39 39 39 39 39 39 39 Number of street lights 364 364 706 706 706 706 706 706 706 706 Parks & Recreation: Number of parks 2 2 2 2 2 2 2 2 2 2 Total park acreage 19 19 19 19 19 19 19 19 19 19 Number of baseball/sofball diamonds 2 2 2 2 2 2 2 2 2 2 Number of community centers 1 1 1 1 1 1 1 1 1 1 Number of tennis courts 7 7 7 7 7 7 7 7 7 7 Number of basketball courts 2 2 2 2 2 2 2 2 2 2 Source: City of Temple City Community Development Department and Parks & Recreation Department ATTACHMENT A What inspires you, inspires us. | eidebailly.com 10681 Foothill Blvd., Ste. 300 | Rancho Cucamonga, CA 91730-3831 | T 909.466.4410 | F 909.466.4431 | EOE 1 December 21, 2020 To the Honorable Mayor and Members of the City Council City of Temple City, California We have audited the financial statements of the City of Temple City (City) as of and for the year ended June 30, 2020, and have issued our report thereon dated December 21, 2020. Professional standards require that we advise you of the following matters relating to our audit. Our Responsibility in Relation to the Financial Statement Audit under Generally Accepted Auditing Standards and Government Auditing Standards As communicated in our letter dated July 8, 2020 our responsibility, as described by professional standards, is to form and express an opinion about whether the financial statements that have been prepared by management with your oversight are presented fairly, in all material respects, in accordance with accounting principles generally accepted in the United States of America. Our audit of the financial statements does not relieve you or management of your respective responsibilities. Our responsibility, as prescribed by professional standards, is to plan and perform our audit to obtain reasonable, rather than absolute, assurance about whether the financial statements are free of material misstatement. An audit of financial statements includes consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control over financial reporting. Accordingly, as part of our audit, we considered the internal control of the City solely for the purpose of determining our audit procedures and not to provide any assurance concerning such internal control. We are also responsible for communicating significant matters related to the audit that are, in our professional judgment, relevant to your responsibilities in overseeing the financial reporting process. However, we are not required to design procedures for the purpose of identifying other matters to communicate to you. We have provided our comments regarding significant deficiencies in internal control in our Independent Auditor’s Report on Internal Control over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance with Government Auditing Standards dated December 21, 2020. ATTACHMENT B 2 Planned Scope and Timing of the Audit We conducted our audit consistent with the planned scope and timing we previously communicated to you. Compliance with All Ethics Requirements Regarding Independence The engagement team, others in our firm, as appropriate, our firm, and other firms utilized in the engagement, if applicable, have complied with all relevant ethical requirements regarding independence. Qualitative Aspects of the Entity’s Significant Accounting Practices Significant Accounting Policies Management has the responsibility to select and use appropriate accounting policies. A summary of the significant accounting policies adopted by the City is included in Note 1 to the financial statements. During the year, the City adopted Governmental Accounting Standards Board (GASB) Statement No. 95, Postponement of the Effective Dates of Certain Authority Guidance. No matters have come to our attention that would require us, under professional standards, to inform you about (1) the methods used to account for significant unusual transactions and (2) the effect of significant accounting policies in controversial or emerging areas for which there is a lack of authoritative guidance or consensus. Significant Accounting Estimates Accounting estimates are an integral part of the financial statements prepared by management and are based on management’s current judgments. Those judgments are normally based on knowledge and experience about past and current events and assumptions about future events. Certain accounting estimates are particularly sensitive because of their significance to the financial statements and because of the possibility that future events affecting them may differ markedly from management’s current judgments. The most sensitive accounting estimates affecting the financial statements were: Management’s estimates of the: •Net pension liability, deferred inflows/outflows of resources, pension expense, and disclosures, are based on actuarial valuations for the CalPERS plan. •Net other post-employment benefits (OPEB) liability, deferred inflows/outflows of resources, OPEB expense, and disclosures are based on actuarial valuations. We evaluated the key factors and assumptions used to develop the estimates noted above and determined that they were reasonable in relation to the basic financial statements taken as a whole. ATTACHMENT B 3 Financial Statement Disclosures Certain financial statement disclosures involve significant judgment and are particularly sensitive because of their significance to financial statement users. The most sensitive disclosures affecting the City’s financial statements relate to: The disclosure of the City’s cost-sharing multiple employer defined benefit pension plan, net pension liability, deferred outflows/inflows of resources, and pension expense, in Note 8 to the financial statements. The valuation of the net pension liability and deferred outflows/inflows of resources are sensitive to the underlying actuarial assumptions used, including but not limited to, the investment rate of return and discount rate. As disclosed in Note 8, a 1% increase or decrease in the discount rate has a significant effect on the City’s net pension liability. The disclosures related to the City’s agent multiple employer defined benefit OPEB plan, net OPEB liability, deferred outflows/inflows of resources, and OPEB expense, in Note 10 to the financial statements. The valuations of the net OPEB liability and deferred outflows/inflows of resources are sensitive to the underlying actuarial assumptions used including, but not limited to, the investment rate of return, discount rate, and healthcare cost trend rates. As disclosed in Note 10, a 1% increase or decrease in the discount rate and healthcare cost trend rates has a significant effect on the City’s net OPEB liability. The financial statement disclosures are neutral, consistent, and clear. Significant Difficulties Encountered during the Audit We encountered no significant difficulties in dealing with management relating to the performance of the audit. Uncorrected and Corrected Misstatements For purposes of this communication, professional standards require us to accumulate all known and likely misstatements identified during the audit, other than those that we believe are trivial, and communicate them to the appropriate level of management. Further, professional standards require us to also communicate the effect of uncorrected misstatements related to prior periods on the relevant classes of transactions, account balances or disclosures, and the financial statements as a whole. Misstatements that we identified as a result of our audit procedures were brought to the attention of, and corrected by, management are identified in the attached Schedule of Corrected Misstatements. Disagreements with Management For purposes of this letter, professional standards define a disagreement with management as a matter, whether or not resolved to our satisfaction, concerning a financial accounting, reporting, or auditing matter, which could be significant to the City’s financial statements or the auditor’s report. No such disagreements arose during the course of the audit. ATTACHMENT B 4 Representations Requested from Management We have requested certain written representations from management which are included in the management representation letter dated December 21, 2020. Management’s Consultations with Other Accountants In some cases, management may decide to consult with other accountants about auditing and accounting matters. Management informed us that, and to our knowledge, there were no consultations with other accountants regarding auditing and accounting matters. Other Significant Matters, Findings, or Issues In the normal course of our professional association with the City, we generally discuss a variety of matters, including the application of accounting principles and auditing standards, operating conditions affecting the entity, and operating plans and strategies that may affect the risks of material misstatement. None of the matters discussed resulted in a condition to our retention as the City’s auditors. Group Audits The financial statements include the financial statements of the City of Temple City Housing Authority (Housing Authority), a blended component unit of the City, which for the purposes of our audit we do not consider to be a significant component within the financial statements. Consistent with the audit of the financial statements as a whole, our audit included obtaining an understanding of the Housing Authority and its environment, including internal control, sufficient to assess the risks of material misstatement of the financial statements and completion of further audit procedures. This report is intended solely for the information and use of the City Council, and management of the City and is not intended to be, and should not be, used by anyone other than these specified parties. Rancho Cucamonga, California ATTACHMENT B City of Temple City, California Schedule of Corrected Misstatements June 30, 2020 5 Number Fund Account/Description Debit Credit 1 General Payroll Checking 110,690$ Salaries and Wages Expense 54,915$ Wages Payable 55,775 To correct accrued payroll/wages payable balance, salaries & wages expense, and payroll checking account balance 2 Various Miscellaneous Liability (Year-End Accounts Payable Accruals)759,429 Main Checking 759,429 To correct the accrued liabilities balance and main checking account balance 3 Various Main Checking 1,000,000 Securities Investments 1,000,000 To correct the main checking account balance and the securities investment balance 4 Sucessor Accrued Interest Payable 5,582 Agency Interest Expense 5,582 To correct accrued interest payable account balance 5 Measure Measure W.139,297 W A/R Intergovernmental 139,297 To remove Measure W receivable as the requirements for revenue recognition had not been met ATTACHMENT B What inspires you, inspires us. | eidebailly.com 10681 Foothill Blvd., Ste. 300 | Rancho Cucamonga, CA 91730-3831 | T 909.466.4410 | F 909.466.4431 | EOE 1 Independent Accountant’s Report on Applying Agreed-Upon Procedures Related to the Article XIII-B Appropriations Limit Calculation The Honorable Mayor and Members of the City Council City of Temple City, California We have performed the procedures enumerated below, which were agreed to by the City of Temple City, California (City) (the specified party), to the Appropriations Limit Calculation of the City prepared in accordance with Section 1.5 of Article XIII-B of the California Constitution, for the fiscal year ended June 30, 2020. The City’s management is responsible for the Appropriations Limit Calculation. The sufficiency of the procedures is solely the responsibility of the City. Consequently, we make no representation regarding the sufficiency of the procedures described below either for the purpose for which this report has been requested or for any other purpose. The procedures performed and our findings are as follows: 1. We obtained the completed worksheets setting forth the calculations necessary to establish the City’s appropriation limit and compared the 2019-2020 limit and annual adjustment factors included in those worksheets to the limit and annual adjustment factors that were adopted by resolution of the City Council. We also compared the population and inflation options included in the aforementioned worksheets to those that were selected by a recorded vote of the City Council. Finding: No exceptions were found as a result of this procedure. 2. We added last year's limit to the annual adjustment amount and compared the resulting amount to the 2019-20 appropriations limit. Finding: No exceptions were found as a result of this procedure. 3. We compared the current year information to the worksheets described in No. 1 above and to information provided by the California State Department of Finance. Finding: No exceptions were found as a result of this procedure. 4. We agreed the prior year appropriations limit to the prior year appropriations limit adopted by the City Council. Finding: No exceptions were found as a result of this procedure. ATTACHMENT C 2 This agreed-upon procedures engagement was conducted in accordance with attestation standards established by the American Institute of Certified Public Accountants. We were not engaged to and did not conduct an examination or review, the objective of which would be the expression of an opinion or conclusion, respectively, on the Appropriations Limit calculation. Accordingly, we do not express such an opinion or conclusion. Had we performed additional procedures, other matters might have come to our attention that would have been reported to you. No procedures have been performed with respect to the determination of the appropriation limit for the base year, as defined by Article XIII-B of the California Constitution. This report is intended solely for the information and use of the City Council and management of the City and is not intended to be and should not be used by anyone other than those specified parties. Rancho Cucamonga, California December 21, 2020 ATTACHMENT C What inspires you, inspires us. | eidebailly.com 10681 Foothill Blvd., Ste. 300 | Rancho Cucamonga, CA 91730-3831 | T 909.466.4410 | F 909.466.4431 | EOE 1 Independent Auditor’s Report on Internal Control over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance with Government Auditing Standards The Honorable Mayor and the Members of the City Council City of Temple City, California We have audited, in accordance with the auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States, the financial statements of the governmental activities, each major fund, and the aggregate remaining fund information of the City of Temple City, California (City), as of and for the year ended June 30, 2020, and the related notes to the financial statements, which collectively comprise the City's basic financial statements, and have issued our report thereon dated December 21, 2020. Internal Control Over Financial Reporting In planning and performing our audit of the financial statements, we considered the City’s internal control over financial reporting (internal control) as a basis for designing audit procedures that are appropriate in the circumstances for the purpose of expressing our opinions on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of the City’s internal control. Accordingly, we do not express an opinion on the effectiveness of the City’s internal control. A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, misstatements on a timely basis. A material weakness is a deficiency, or a combination of deficiencies, in internal control such that there is a reasonable possibility that a material misstatement of the entity’s financial statements will not be prevented, or detected and corrected, on a timely basis. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with governance. Our consideration of internal control was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control that might be material weaknesses or significant deficiencies and therefore, material weaknesses or significant deficiencies may exist that have not been identified. Given these limitations, during our audit we did not identify any deficiencies in internal control that we consider to be material weaknesses. We did identify certain deficiencies in internal control, described in the accompanying schedule of finding and response as item 2020-001 and 2020-002 that we consider to be significant deficiencies. ATTACHMENT D 2 Compliance and Other Matters As part of obtaining reasonable assurance about whether the City’s financial statements are free from material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements, noncompliance with which could have a direct and material effect on the financial statements. However, providing an opinion on compliance with those provisions was not an objective of our audit, and accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance or other matters that are required to be reported under Government Auditing Standards. The City’s Response to Findings The City’s response to the findings identified in our audit is described in the accompanying schedule of findings and response. The City’s response was not subjected to the auditing procedures applied in the audit of the financial statements and, accordingly, we express no opinion on it. Purpose of this Report The purpose of this report is solely to describe the scope of our testing of internal control and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the entity’s internal control or on compliance. This report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the entity’s internal control and compliance. Accordingly, this communication is not suitable for any other purpose. Rancho Cucamonga, California December 21, 2020 ATTACHMENT D 3 City of Temple City, California Schedule of Findings and Responses June 30, 2020 Finding 2020-001 BANK RECONCILIATION Criteria or Specific Requirement: As part of the City’s year-end closing process, the reconciliation of bank accounts is a significant control in ensuring the account balance is reasonably stated for completeness, accuracy and cutoff. This process should be completed on a timely manner to ensure the accuracy of the account balance. Condition: As a result of our audit procedures, we noted the following: • During our testing of the City’s June 2020 payroll account, we noted the cash balance was adjusted as the accrued payroll/wages for payments issued subsequent to June 2020 had been reflected as deductions to cash at June 30. Additionally, it was noted the City had over-expensed life insurance expenses during the year; cash was understated by $111 thousand at year end, accrued payroll/wages were understated at year end by $56 thousand, and life insurance expenses were overstated by $55 thousand at year end. • During our testing of the City’s June 2020 main checking account, we noted the cash balance excluded a deposit-in-transit related to an investment security that had matured prior to year- end. As a result, cash was understated by $1 million while investment securities was overstated by the same amount. Additionally, it was noted that due to an error in the year end closing process related to voided checks, the City overstated the cash and current liabilities balances. As a result, cash and current liabilities were both overstated by $759 thousand. Effect: Audit adjustments were proposed to correct the City’s cash, accrued payroll, salaries/wages expense, miscellaneous liability and securities investment accounts. Further, the internal control environment is weakened. Cause: Certain aspects of the City’s reconciliation and/or year-end closing procedures were not in place or consistently applied. Recommendation: We recommend that the City strengthen its bank reconciliation procedures to ensure that reconciling items are properly evaluated, supported and recorded on a timely basis. ATTACHMENT D 4 City of Temple City, California Schedule of Findings and Responses June 30, 2020 View of Responsible Officials and Planned Corrective Action: Management agrees with the finding. City will ensure to improve its review and evaluation of its payroll bank reconciliations especially as it relates to the cash activities and accruals. Staff has made the corrections to record activities to the appropriate accounts. Additionally, to address the investment account reconciliation, City will make sure to record activities in the appropriate period. For the accounts payable (AP) year-end process issue relating to the recording of liabilities, staff will make certain instructions are clear regarding the accrual process. Staff will also work with its financial system software company to make sure that AP batch transactions are not able to be posted to separate periods. Finding 2020-002 YEAR-END CLOSING Criteria or Specific Requirement: Management is responsible for the basic financial statements and all accompanying information as well as all representations contained therein and for the fair presentation of the financial statement in conformity with U.S. general accepted accounting principles. This requires management to work through a year-end closing process to accumulate, reconcile, and summarize information for inclusion in the annual financial statements. The year-end closing process include the review and/or reconciliation of all balances within the City’s general ledger. Accounts must be reviewed for proper cutoff, classification and presentation. These processes should be completed on a timely manner to ensure the accurate presentation of financial information. Condition: As a result of our audit procedures, we noted the Successor Agency’s accrued interest payable had an accumulated balance of $29 thousand. This balance had not been updated for this fiscal year. As a result, accrued interest payable was overstated by $5 thousand. Additionally, we noted the Measure W fund accrued revenue, however the City had not met the revenue recognition requirements to record. As a result, both the receivable and revenue were overstated by $139 thousand. Context: The conditions noted above were identified as a result of our audit procedures. Effect: Audit adjustments were proposed to correct the City’s accrued interest payable and related expense for the private purpose trust fund, and to correct the City’s accrued intergovernmental receivable and related revenue for the Measure W special revenue fund. ATTACHMENT D 5 City of Temple City, California Schedule of Findings and Responses June 30, 2020 Cause: Certain aspects of the City’s reconciliation and/or year-end closing procedures were not in place or consistently applied. Recommendation: We recommend that the City strengthen its year-end closing procedures to ensure that year-end account balances are properly evaluated, supported and recorded on a timely basis. View of Responsible Officials and Planned Corrective Action: Management agrees with the finding. Staff will ensure that the interest payable accrual adjustment is included on the year-end checklist. Staff will also make sure that activities are recorded to the applicable period based on the date of a fully executed agreement. ATTACHMENT D 6 City of Temple City, California Summary Schedule of Prior Audit Findings June 30, 2020 2019-001 Bank Reconciliation 2019-002 Year-End Closing Not Implemented - Refer to current year Finding 2020-001 Finding No.Area Status of Corrective Action Not Implemented - Refer to current year Finding 2020-002 ATTACHMENT D