CITY OF INGLEWOOD BASIC FINANCIAL STATEMENTS AND SUPPLEMENTAL INFORMATION FOR THE YEAR ENDED SEPTEMBER 30, 2015

Transcription

1 BASIC FINANCIAL STATEMENTS AND SUPPLEMENTAL INFORMATION FOR THE YEAR ENDED SEPTEMBER 30, 2015

2 BASIC FINANCIAL STATEMENTS AND SUPPLEMENTAL INFORMATION FOR THE YEAR ENDED SEPTEMBER 30, 2015

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4 BASIC FINANCIAL STATEMENTS AND SUPPLEMENTAL INFORMATION YEAR ENDED SEPTEMBER 30, 2015 TABLE OF CONTENTS FINANCIAL SECTION Page INDEPENDENT AUDITORS REPORT... 1 BASIC FINANCIAL STATEMENTS Government-wide Financial Statements: Statement of Net Position... 5 Statement of Activities... 6 Fund Financial Statements: Balance Sheet Governmental Funds... 8 Reconciliation of the Balance Sheet of Governmental Funds to the Statement of Net Position Statement of Revenues, Expenditures and Changes in Fund Balance Reconciliation of the Statement of Revenues, Expenditures and Changes in Fund Balances of Governmental Funds to the Statement of Activities Statement of Net Position Proprietary Funds Statement of Revenues, Expenses and Changes in Fund Net Position Proprietary Funds Statement of Cash Flows Proprietary Funds Statement of Fiduciary Net Position Fiduciary Funds Statement of Changes in Fiduciary Net Position Fiduciary Funds Notes to the Basic Financial Statements... 25

5 BASIC FINANCIAL STATEMENTS AND SUPPLEMENTAL INFORMATION YEAR ENDED SEPTEMBER 30, 2015 TABLE OF CONTENTS Page REQUIRED SUPPLEMENTARY INFORMATION Schedules of Changes in Net Pension Liability and Related Ratios: Miscellaneous Plan Safety Plan Schedules of Plan Contributions: Miscellaneous Plan Safety Plan Budget and Actual Comparison Schedules: General Fund Noise Mitigation Special Revenue Fund Notes to Required Supplementary Information COMBINING AND INDIVIDUAL FUND STATEMENTS Combining Balance Sheet Nonmajor Governmental Funds Combining Statement of Revenues, Expenditures and Changes in fund Balances Nonmajor Government Funds Budgetary Comparison Schedules: Meaure IT Fund Traffic Offender Fund Arts Fund Gas Tax Fund Proposition A Fund Prop C, Federal, State Transportation Fund ARRA Fund AB2766 (AQMD) Fund Special Assessment Fund Grants Fund TDA Article 3Fund Street Highway Fund HUD (CDBG) Fund Measure R Fund Prop 1B Call for Projects Fund... 96

6 BASIC FINANCIAL STATEMENTS AND SUPPLEMENTAL INFORMATION YEAR ENDED SEPTEMBER 30, 2015 TABLE OF CONTENTS Page COMBINING AND INDIVIDUAL FUND STATEMENTS (CONTINUED) State Transportation Special Revenue Fund Civic Center Capital Project Fund Civic Center Fund Pension Obligation Bond Fund Combining Statement of Fiduciary Net Position Pension Trust Funds Combining Statement of Changes in Fiduciary Net Position Pension Trust Funds Combining Statement of Fiduciary Net Position Private Purpose Trust Funds Combining Statement of Changes in Fiduciary Net Position Private Purpose Trust Funds Combining Statement of Assets and Liabilities Agency Funds Combining Statement of Changes in Assets and Liabilities Agency Funds

7 BASIC FINANCIAL STATEMENTS AND SUPPLEMENTAL INFORMATION YEAR ENDED SEPTEMBER 30, 2015 TABLE OF CONTENTS Page STATISTICAL SECTION Net Position by Component Changes in Net Position Fund Balances of Governmental Funds Changes in Fund Balances of Governmental Funds Assessed Value and Estimated Actual Value of Taxable Property Direct and Overlapping Property Tax Rates Principal Property Taxpayers Property Tax Levies and Collections Tax Revenue by Source Ratios of Outstanding Debt by Type Ratios of General Bonded Debt Direct and Overlapping Bond Debt Legal Debt Margin Information Pledged Revenue Coverage Demographic and Economic Status Principal Employers Full-time Equivalent City Governmental Employees by Function Operating Indicators by Function Capital Asset Statistics by Function

8 INDEPENDENT AUDITORS REPORT To the Honorable Mayor and Members of the City Council City of Inglewood, California Report on the Financial Statements We have audited the accompanying financial statements of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of City of Inglewood, California (the City), as of and for the year ended September 30, 2015, 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. Auditor s 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. An Association of Independent Accounting Firms 203 N. Brea Blvd., Suite 203 Brea, CA Phone:

9 To the Honorable Mayor and Members of the City Council City of Inglewood, California Opinions In our opinion, the financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of the City of Inglewood, California, as of September 30, 2015, 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. Change in Accounting Principle As discussed in Note 1 to the financial statements, in 2015 the City adopted new accounting guidance, GASB Statement No. 68, Accounting and Financial Reporting for Pensions An Amendment of GASB Statement No. 27, and GASB Statement No. 71, Pension Transition for Contributions made subsequent to the measurement date an amendment of GASB Statement No. 68. Correction of an Error As discussed in Note 14 to the financial statements, September 30, 2014 net position and fund balances have been restated for the correction of material misstatements in the respective period. Other Matters Required Supplementary Information Accounting principles generally accepted in the United States of America require that the budgetary comparison schedules for the general fund and the noise mitigation fund, the schedule of changes in net pension liability and related ratios, and the schedule of plan contributions 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. Management has omitted the management s discussion and analysis, that accounting principles generally accepted in the United States of America require to be presented to supplement the basic financial statements. Such missing 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. Our opinion on the basic financial statements is not affected by this missing information 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 combining and individual nonmajor fund financial statements and schedules and statistical section are presented for purposes of additional analysis and are not a required part of the basic financial statements. 2

10 To the Honorable Mayor and Members of the City Council City of Inglewood, California The combining and individual non-major fund financial statements and schedules are the responsibility of management and were derived from and relate directly to the underlying accounting and other records used to prepare the 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 non-major fund financial statements and schedules are fairly stated in all material respects in relation to the basic financial statements as a whole. The statistical section has 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 it. Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated December 5, 2016 on our consideration of the City s internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on 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. Brea, California December 5,

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12 STATEMENT OF NET POSITION SEPTEMBER 30, 2015 Primary Government Governmental Business-Type Activities Activities Total Assets: Cash and investments $ 72,719,339 $ 10,385,566 $ 83,104,905 Receivables: Accounts 921,329 5,719,741 6,641,070 Taxes 3,912,258 17,677 3,929,935 Notes and loans 1,273,811-1,273,811 Accrued interest 111,795 8, ,484 Internal balances 5,100,000 (5,100,000) - Due from other governments 13,250,159-13,250,159 Inventories 152, ,248 Land held for resale 24,010,406-24,010,406 Restricted assets: Cash with fiscal agent 32,826,780-32,826,780 Capital assets not being depreciated 85,346,913 90,598 85,437,511 Capital assets, net of depreciation 70,955,307 36,058, ,013,550 Total Assets 310,580,345 47,180, ,760,859 Deferred Outflows of Resources: Deferred charge on refunding 344, ,762 Deferred pension contributions 2,308, ,211 2,509,804 Total Deferred Outflows of Resources 2,653, ,211 2,854,566 Liabilities: Accounts payable 14,111,938 2,701,594 16,813,532 Accrued liabilities 2,907,466-2,907,466 Accrued interest 263, ,890 Unearned revenue 6,845,289-6,845,289 Deposits payable 234,494 2,792,389 3,026,883 Due to other governments Noncurrent liabilities: OPEB Obligation, net 63,829,834-63,829,834 Net pension liability 144,734,302 31,561, ,295,909 Due within one year 12,055, ,433 12,345,893 Due in more than one year 119,716, , ,590,684 Total Liabilities 364,699,635 38,219, ,919,589 Deferred Inflows of Resources: Deferred changes in pension assumptions 6,097,321 1,373,937 7,471,258 Deferred changes in pension experiences 6,042, ,465 6,887,202 Deferred net earnings on pension 4,795,877 1,152,930 5,948,807 Total Deferred Inflows of Resources 16,935,935 3,371,332 20,307,267 Net Position: Net investment in capital assets 143,477,283 36,148, ,626,124 Restricted for: Community development projects 35,031,107-35,031,107 Public safety 1,264,491-1,264,491 Transportation 17,539,223-17,539,223 Public art 401, ,084 Unrestricted (266,115,058) (30,358,402) (296,473,460) Total Net Position $ (68,401,870) $ 5,790,439 $ (62,611,431) See Notes to Financial Statements 5

13 STATEMENT OF ACTIVITIES YEAR ENDED SEPTEMBER 30, 2015 Program Revenues Operating Capital Charges for Contributions Contributions Expenses Services and Grants and Grants Functions/Programs Primary Government: Governmental Activities: General government $ 11,455,823 $ 13,479,812 $ - $ - Public safety 62,619,956 2,432,879 9,181,724 - Community development 89,373,783 5,724,475 74,820,176 - Culture and leisure 11,416,411 3,793, Transportation 29,173,970 3,950,534 13,713,786 - Interest on long-term debt 5,168, Total Governmental Activities 209,208,918 29,381,376 97,715,686 - Business-Type Activities: Water Utility 22,910,346 19,557, Sanitation 14,942,145 13,777, Sewer 3,711,908 3,359, Parking 5,320,244 5,591, Total Business-Type Activities 46,884,643 42,285, Total Primary Government $ 256,093,561 $ 71,666,485 $ 97,715,686 $ - General Revenues: Taxes: Property taxes, levied for general purpose Transient occupancy taxes Sales taxes Franchise taxes Business licenses taxes Utility users tax Casino taxes Use of money and property Other Special Item (Note 15) Transfers Total General Revenues, Special Item, and Transfers Change in Net Position Net Position at Beginning of Year Restatement of Net Position Net Position at End of Year See Notes to Financial Statements 6

14 Net (Expenses) Revenues and Changes in Net Position Primary Government Governmental Business-Type Activities Activities Total $ 2,023,989 $ - $ 2,023,989 (51,005,353) - (51,005,353) (8,829,132) - (8,829,132) (7,622,735) - (7,622,735) (11,509,650) - (11,509,650) (5,168,975) - (5,168,975) (82,111,856) - (82,111,856) - (3,353,288) (3,353,288) - (1,165,081) (1,165,081) - (352,272) (352,272) - 271, ,107 - (4,599,534) (4,599,534) (82,111,856) (4,599,534) (86,711,390) 19,771,969-19,771,969 4,946,722-4,946,722 24,414,059-24,414,059 1,944,318-1,944,318 5,224,075-5,224,075 19,025,657-19,025,657 3,482,753-3,482,753 7,435, ,677 7,560,516 1,524, ,701 1,682, ,644 (225,644) - 93,601,038 56,734 88,052,753 11,489,182 (4,542,800) 1,341,363 23,598,249 41,278,931 64,877,180 (211,748,337) (30,945,692) (242,694,029) $ (176,660,906) $ 5,790,439 $ (176,475,486) See Notes to Financial Statements 7

15 BALANCE SHEET GOVERNMENTAL FUNDS SEPTEMBER 30, 2015 Noise Mitigation Special Revenue Funds Housing Successor Section 8 Housing Vouchers General Assets: Pooled cash and investments $ 37,618,514 $ 6,476,500 $ 940,825 $ 1,578,710 Receivables: Accounts 920, Taxes 3,339, Notes and loans - - 1,273,811 - Accrued interest 55, , Due from other governments - 7,520, ,247 Due from other funds 3,229, Advances to other funds 5,100, Inventories 152, Land held for resale 18,139,500-3,070,906 - Restricted assets: Cash and investments with fiscal agents ,093,389 - Total Assets $ 68,554,670 $ 13,998,030 $ 24,388,252 $ 1,748,038 Liabilities, Deferred inflows of Resources, and Fund Balances: Liabilities: Accounts payable $ 3,057,410 $ 6,734,005 $ 10,958 $ 770,176 Accrued liabilities 2,907, Unearned revenues - 6,834, Deposits payable 183,431-20,000 31,063 Due to other governments Due to other funds Total Liabilities 6,148,307 13,568,954 30, ,239 Deferred inflows of resources: Unavailable revenues 8,630 7,520, ,123 Total Deferred inflows of Resources 8,630 7,520, ,123 Fund Balances: Nonspendable: Inventories 152, Land held for resale 18,139, Advances to other funds 5,100, Restricted for: Community development projects ,357, ,676 Public safety Transportation Public art Assigned to: Capital Projects Debt service Unassigned 39,005,985 (7,091,676) - - Total Fund Balances 62,397,733 (7,091,676) 24,357, ,676 Total Liabilities, deferred inflows of resources, and Fund Balances $ 68,554,670 $ 13,998,030 $ 24,388,252 $ 1,748,038 See Notes to Financial Statements 8

16 BALANCE SHEET GOVERNMENTAL FUNDS SEPTEMBER 30, 2015 Assets: Pooled cash and investments Receivables: Accounts Taxes Notes and loans Accrued interest Due from other governments Due from other funds Advances to other funds Inventories Land held for resale Restricted assets: Cash and investments with fiscal agents Total Assets Liabilities, Deferred inflows of Resources, and Fund Balances: Liabilities: Accounts payable Accrued liabilities Unearned revenues Deposits payable Due to other governments Due to other funds Total Liabilities Deferred inflows of resources: Unavailable revenues Total Deferred inflows of Resources Fund Balances: Nonspendable: Inventories Land held for resale Advances to other funds Restricted for: Community development projects Public safety Transportation Public art Assigned to: Capital Projects Debt service Unassigned Total Fund Balances Total Liabilities, deferred inflows of resources, and Fund Balances Other Governmental Funds Total Governmental Funds $ 26,062,030 $ 72,676, , ,151 3,912,258-1,273,811 45, ,795 5,560,160 13,250,159-3,229,389-5,100, ,248 2,800,000 24,010,406 13,733,391 32,826,780 $ 48,774,621 $ 157,463,611 $ 3,213,694 $ 13,786,243-2,907,466 10,340 6,845, , ,229,119 3,229,119 6,453,362 27,002,820 3,496,159 11,167,664 3,496,159 11,167, ,248-18,139,500-5,100,000 9,869,137 35,031,107 1,264,491 1,264,491 17,539,223 17,539, , ,084 13,284,198 13,284, , ,254 (3,741,287) 28,173,022 38,825, ,293,127 $ 48,774,621 $ 157,463,611 See Notes to Financial Statements 9

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18 RECONCILIATION OF THE BALANCE SHEET OF GOVERNMENTAL FUNDS TO THE STATEMENT OF NET POSITION SEPTEMBER 30, 2015 Fund balances of governmental funds $ 119,293,127 Amounts reported for governmental activities in the statement of net position are different because: Capital assets net of depreciation have not been included as financial resources in governmental fund activity. 156,146,331 Long-term debt and compensated absences that have not been included in the governmental fund activity: Bonds payable $ (93,982,881) Unamortized defeasance on bonds 344,762 General claims liability (26,574,754) Compensated Absences (11,214,578) (131,427,451) Pension obligations and related deferrals that have not been included in the governmental fund activity: Net pension liability related to the Miscellaneous Pension Plan (40,697,863) Net pension liability related to the Safety Pension Plan (95,730,752) Pension contributions made after the measurement date that are deferred to future period 2,255,642 Changes in pension experiences that are deferred to future periods (5,820,509) Changes in pension assumptions that are deferred to future periods (5,735,759) Net difference in projected earnings over actual earnings deferred to future periods (4,492,474) Governmental funds report all OPEB contributions as expenditures; however, in the statement of net position any excesses or deficiencies in contributions in relation to the Annual Required Contribution (ARC) are recorded as an asset or liability. (63,829,834) Accrued interest payable for the current portion of interest due on bonds has not been reported in the governmental funds. (263,890) Revenues reported as unavailable revenue in the governmental funds and recognized in the statement of activities. These are included in the intergovernmental revenues in the governmental fund activity. 11,167,664 Internal service funds are used by management to charge the costs of certain activities, such as equipment management and self-insurance, to individual funds. The assets and liabilities of the internal service funds must be added to the statement of net position. (9,266,102) Net Position of governmental activities $ (68,401,870) See Notes to Financial Statements 11

19 STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES GOVERNMENTAL FUNDS YEAR ENDED SEPTEMBER 30, 2015 Noise Mitigation Special Revenue Funds Housing Successor Section 8 Housing Vouchers General Revenues: Taxes $ 68,742,971 $ - $ - $ - Assessments Licenses and permits 2,815, Intergovernmental 12,463,765 67,533,254-7,988,072 Charges for services 16,735, Use of money and property 1,178,780-34,489 5,998,966 Fines and forfeitures 399, Contributions - - 2,088 - Miscellaneous 1,226, ,487 - Total Revenues 103,562,715 67,533, ,064 13,987,038 Expenditures: Current: General government 11,017, Public safety 53,890, Community development 3,114,856 65,776,750 8,043,451 14,757,504 Culture and leisure 7,429, Transportation 7,117, Capital outlay Debt service: Principal retirement Interest and fiscal charges Total Expenditures 82,570,777 65,776,750 8,043,451 14,757,504 Excess (Deficiency) of Revenues Over (Under) Expenditures 20,991,938 1,756,504 (7,708,387) (770,466) Other Financing Sources (Uses): Transfers in 972, Transfers out (6,460,958) Total Other Financing Sources (Uses) (5,488,139) Special Item (Note 15) - - (13,929,863) - Net Change in Fund Balances 15,503,799 1,756,504 (21,638,250) (770,466) Fund Balances, Beginning of Year, as previously reported 28,754,434 (8,848,180) 44,291,713 1,575,142 Restatements 18,139,500-1,703,831 - Fund Balances, Beginning of Year, as restated 46,893,934 (8,848,180) 45,995,544 1,575,142 Fund Balances, End of Year $ 62,397,733 $ (7,091,676) $ 24,357,294 $ 804,676 See Notes to Financial Statements 12

20 STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES GOVERNMENTAL FUNDS YEAR ENDED SEPTEMBER 30, 2015 Revenues: Taxes Assessments Licenses and permits Intergovernmental Charges for services Use of money and property Fines and forfeitures Contributions Miscellaneous Total Revenues Expenditures: Current: General government Public safety Community development Culture and leisure Transportation Capital outlay Debt service: Principal retirement Interest and fiscal charges Total Expenditures Excess (Deficiency) of Revenues Over (Under) Expenditures Other Financing Sources (Uses): Transfers in Transfers out Total Other Financing Sources (Uses) Other Governmental Funds Total Governmental Funds $ 6,736,107 $ 75,479, ,777 2,888,435 17,978, ,963,366 2,829,715 19,565, ,382 7,477, ,791 1,097,469-2,088-1,524,983 28,580, ,998,118 43,627 11,061,263 8,295,132 62,185,973 2,643,301 94,335,862 3,620,056 11,049,974 14,959,716 22,077,242 1,735,019 1,735,019 3,870,000 3,870,000 3,614,596 3,614,596 38,781, ,929,929 (10,201,400) 4,068,189 20,820,653 21,793,472 (13,983,350) (20,444,308) 6,837,303 1,349,164 Special Item (Note 15) Net Change in Fund Balances Fund Balances, Beginning of Year, as previously reported Restatements Fund Balances, Beginning of Year, as restated Fund Balances, End of Year - (13,929,863) (3,364,097) (8,512,510) 42,203, ,976,359 (51,543) 19,791,788 42,151, ,768,147 $ 38,787,610 $ 119,255,637 See Notes to Financial Statements 13

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22 RECONCILIATION OF THE STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES OF GOVERNMENTAL FUNDS TO THE STATEMENT OF ACTIVITIES YEAR ENDED SEPTEMBER 30, 2015 Net change in fund balances - total governmental funds $ (8,500,791) 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 costs of those assets is allocated over their estimated useful lives as depreciation expense. This is the amount by which capital outlays exceeded depreciation in the current period. Capital outlay $ 14,830,372 Depreciation (7,530,227) 7,300,145 Repayment of bond principal is an expenditure in the governmental funds, but the repayment reduces long-term liabilities in the statement of net position. Principal repayments 3,870,000 Accreted interest (2,426,030) Premium amortization 28,672 Deferred charge amortization (57,461) 1,415,181 Changes in claims payable not recorded in governmental funds 5,279,068 Accrued interest for long-term liabilities. This is the net change in accrued interest for the current period. (41,535) Compensated absences expenses reported in the statement of activities do not require the use of current financial resources and, therefore, are not reported as expenditures in governmental funds. 43,690 Governmental funds report all contributions in relation to the annual required contribution (ARC) for OPEB as expenditures; however, in the statement of activities only the ARC is an expense. (3,142,871) Revenues reported as unavailable revenue in the governmental funds and recognized in the statement of activities. These are included in the intergovernmental revenues in the governmental fund activity. 445,755 Internal service funds are used by management to charge the costs of certain activities, such as equipment management and self-insurance, to individual funds. The net revenues (expenses) of the internal service funds are reported with governmental activities. (1,273,304) Pension obligation expenses reported in the statement of activities do not require the use of current financial resources and, therefore, are not reported as expenditures in governmental funds. (9,571,038) Change in net position of governmental activities $ (8,045,700) See Notes to Financial Statements 15

23 STATEMENT OF NET POSITION PROPRIETARY FUNDS SEPTEMBER 30, 2015 Business-Type Activities - Enterprise Funds Water Utility Sanitation Sewer Assets: Current: Cash and investments $ 5,445,554 $ 165,824 $ 2,985,852 Receivables: Accounts 3,142,791 2,053, ,533 Taxes - 17,677 - Accrued interest 1,248 2,315 4,582 Total Current Assets 8,589,593 2,239,477 3,507,967 Noncurrent: Capital assets - net of accumulated depreciation 30,650,257-5,498,584 Total Noncurrent Assets 30,650,257-5,498,584 Total Assets 39,239,850 2,239,477 9,006,551 Deferred Outflows of Resources: Deferred pension contributions 116,491 21,180 42,360 Total Deferred Outflows of Resources 116,491 21,180 42,360 Liabilities: Current: Accounts payable 1,189, ,726 72,504 Deposits payable 2,643, ,833 - Due to other funds Accrued compensated absences 178,661 51,969 36,332 Total Current Liabilities 4,012,207 1,098, ,836 Noncurrent: Advances from other funds 5,100, Accrued compensated absences 585,349 42, ,794 Net pension liability 18,272,510 3,322,274 6,644,549 Total Noncurrent Liabilities 23,957,859 3,364,680 6,860,343 Total Liabilities 27,970,066 4,463,208 6,969,179 Deferred Inflows of Resources: Deferred pension changes in assumptions 795, , ,250 Deferred pension changes in experiences 488,901 88, ,782 Deferred earnings on pension 667, , ,722 Total Deferred Inflows of Resources 1,951, , ,754 Net Position: Investment in capital assets 30,650,257-5,498,584 Unrestricted (21,215,806) (2,557,428) (4,128,606) Total Net Position $ 9,434,451 $ (2,557,428) $ 1,369,978 See Notes to Financial Statements 16

24 STATEMENT OF NET POSITION PROPRIETARY FUNDS SEPTEMBER 30, 2015 Assets: Current: Cash and investments Receivables: Accounts Taxes Accrued interest Total Current Assets Noncurrent: Capital assets - net of accumulated depreciation Total Noncurrent Assets Total Assets Deferred Outflows of Resources: Deferred pension contributions Total Deferred Outflows of Resources Liabilities: Current: Accounts payable Deposits payable Due to other funds Accrued compensated absences Total Current Liabilities Noncurrent: Advances from other funds Accrued compensated absences Net pension liability Total Noncurrent Liabilities Total Liabilities Deferred Inflows of Resources: Deferred pension changes in assumptions Deferred pension changes in experiences Deferred earnings on pension Total Deferred Inflows of Resources Net Position: Investment in capital assets Unrestricted Total Net Position Business-Type Activities - Enterprise Funds Parking Totals Internal Service Information Technology and Communications $ 1,788,336 $ 10,385,566 $ 42,760 5,756 5,719,741 1,143-17, ,689-1,794,636 16,131,673 43,903-36,148, ,889-36,148, ,889 1,794,636 52,280, ,792 21, ,211 52,951 21, ,211 52, ,374 2,701, ,695-2,792, , , ,845 5,784, ,965-5,100,000-30, ,931-3,322,274 31,561,607 8,305,687 3,352,656 37,535,538 8,305,687 3,917,501 43,319,954 8,631, ,625 1,373, ,562 88, , , ,361 1,152, , ,877 3,371, ,193-36,148, ,889 (2,456,562) (30,358,402) (9,421,991) $ (2,456,562) $ 5,790,439 $ (9,266,102) See Notes to Financial Statements 17

25 STATEMENT OF REVENUES, EXPENSES AND CHANGES IN FUND NET POSITION PROPRIETARY FUNDS YEAR ENDED SEPTEMBER 30, 2015 Business-Type Activities - Enterprise Funds Water Utility Sanitation Sewer Operating Revenues: Charges for services $ 19,557,058 $ 13,746,026 $ 3,359,636 Licenses and permits ,308 Miscellaneous - 110,393 - Intergovernmental - 31,038 - Total Operating Revenues 19,557,058 13,887,457 3,406,944 Operating Expenses: Personnel services 5,875,552 1,146,681 2,248,442 Maintenance and operations 15,974,081 13,685,071 1,211,777 Depreciation expense 1,060, , ,689 Total Operating Expenses 22,910,346 14,942,145 3,711,908 Operating Income (Loss) (3,353,288) (1,054,688) (304,964) Nonoperating Revenues: Interest revenue 87,365 10,810 21,088 Total Nonoperating Revenues (Expenses) 87,365 10,810 21,088 Income (Loss) Before Transfers (3,265,923) (1,043,878) (283,876) Transfers out Changes in Net Position (3,265,923) (1,043,878) (283,876) Net Position: Beginning of Year, as previously reported 30,616,302 1,743,891 8,168,736 Restatements (17,915,928) (3,257,441) (6,514,882) Beginning of Fiscal Year, as restated 12,700,374 (1,513,550) 1,653,854 End of Fiscal Year $ 9,434,451 $ (2,557,428) $ 1,369,978 See Notes to Financial Statements 18

26 STATEMENT OF REVENUES, EXPENSES AND CHANGES IN FUND NET POSITION PROPRIETARY FUNDS YEAR ENDED SEPTEMBER 30, 2015 Operating Revenues: Charges for services Licenses and permits Miscellaneous Intergovernmental Total Operating Revenues Operating Expenses: Personnel services Maintenance and operations Depreciation expense Total Operating Expenses Operating Income (Loss) Nonoperating Revenues: Interest revenue Transfers out Total Nonoperating Revenues (Expenses) Income (Loss) Before Transfers Changes in Net Position Net Position: Beginning of Year, as previously reported Restatements Beginning of Fiscal Year, as restated End of Fiscal Year Business-Type Activities - Enterprise Funds Parking Totals Internal Service Information Technology and Communications $ 5,591,351 $ 42,254,071 $ 3,208,292-47, , ,038-5,591,351 42,442,810 3,208,292 1,144,013 10,414,688 2,752,253 4,176,231 35,047,160 1,449,711-1,422,795 44,592 5,320,244 46,884,643 4,246, ,107 (4,441,833) (1,038,264) 5, ,677-5, , ,521 (4,317,156) (1,038,264) (225,644) (225,644) (235,040) 50,877 (4,542,800) (1,273,304) 750,002 41,278, ,806 (3,257,441) (30,945,692) (8,143,604) (2,507,439) 10,333,239 (7,992,798) $ (2,456,562) $ 5,790,439 $ (9,266,102) See Notes to Financial Statements 19

27 STATEMENT OF CASH FLOWS PROPRIETARY FUNDS YEAR ENDED SEPTEMBER 30, 2015 Business-Type Activities - Enterprise Funds Water Utility Sanitation Sewer Cash Flows from Operating Activities: Cash received from customers and users $ 19,586,767 $ 13,715,918 $ 3,470,783 Cash received from/(paid to) interfund service provided Cash paid to suppliers for goods and services (15,566,476) (15,281,589) (1,694,030) Cash paid to employees for services (3,756,383) (743,133) (1,456,200) Cash received from (payments to) others - 141,431 - Net Cash Provided (Used) by Operating Activities 263,908 (2,167,373) 320,553 Cash Flows from Non-Capital Financing Activities: Cash transfers out Repayment received from other funds Net Cash Provided (Used) by Non-Capital Financing Activities Cash Flows from Capital and Related Financing Activities: Acquisition and construction of capital assets (1,807,607) - (1,043,142) Advance from other funds 5,100, Net Cash Provided (Used) by Capital and Related Financing Activities 3,292,393 - (1,043,142) Cash Flows from Investing Activities: Interest received 91,859 11,804 23,027 Net Cash Provided (Used) by Investing Activities 91,859 11,804 23,027 Net Increase (Decrease) in Cash and Cash Equivalents 3,648,160 (2,155,569) (699,562) Cash and Cash Equivalents at Beginning of Year 1,797,394 2,321,393 3,685,414 Cash and Cash Equivalents at End of Year $ 5,445,554 $ 165,824 $ 2,985,852 Reconciliation of Operating Income to Net Cash Provided (Used) by Operating Activities: Operating income (loss) $ (3,353,288) $ (1,054,688) $ (304,964) Adjustments to reconcile operating income (loss) net cash provided (used) by operating activities: Depreciation 1,060, , ,689 (Increase) decrease in accounts receivable 29,709 (30,108) 63,839 Increase (decrease) in accounts payable (55,746) (1,596,518) (482,253) Increase (decrease) in deposits payable 463, Increase (decrease) in payroll related items 2,119, , ,242 Total Adjustments 3,617,196 (1,112,685) 625,517 Net Cash Provided (Used) by Operating Activities $ 263,908 $ (2,167,373) $ 320,553 Non-Cash Investing, Capital, and Financing Activities: Increase in Fair Value of Investments $ 87,365 $ 10,810 $ 21,088 See Notes to Financial Statements 20

28 STATEMENT OF CASH FLOWS PROPRIETARY FUNDS YEAR ENDED SEPTEMBER 30, 2015 Cash Flows from Operating Activities: Cash received from customers and users Cash received from/(paid to) interfund service provided Cash paid to suppliers for goods and services Cash paid to employees for services Cash received from (payments to) others Net Cash Provided (Used) by Operating Activities Cash Flows from Non-Capital Financing Activities: Cash transfers out Repayment received from other funds Net Cash Provided (Used) by Non-Capital Financing Activities Cash Flows from Capital and Related Financing Activities: Acquisition and construction of capital assets Advance from other funds Net Cash Provided (Used) by Capital and Related Financing Activities Cash Flows from Investing Activities: Interest received Net Cash Provided (Used) by Investing Activities Net Increase (Decrease) in Cash and Cash Equivalents Cash and Cash Equivalents at Beginning of Year Cash and Cash Equivalents at End of Year Reconciliation of Operating Income to Net Cash Provided (Used) by Operating Activities: Operating income (loss) Adjustments to reconcile operating income (loss) net cash provided (used) by operating activities: Depreciation (Increase) decrease in accounts receivable Increase (decrease) in accounts payable Increase (decrease) in deposits payable Increase (decrease) in payroll related items Total Adjustments Net Cash Provided (Used) by Operating Activities Non-Cash Investing, Capital, and Financing Activities: Increase in Fair Value of Investments Business-Type Activities - Enterprise Funds Parking Totals Governmental Activities- Internal Service Fund $ 5,671,813 $ 42,445,281 $ ,208,292 (4,513,494) (37,055,589) (1,174,834) (769,671) (6,725,387) (1,755,928) - 141, ,648 (1,194,264) 277,530 (225,644) (225,644) (235,040) (225,644) (225,644) (234,770) - (2,850,749) - - 5,100, ,249,251-4, ,560-4, , , ,903 42,760 1,620,462 9,424,663 - $ 1,788,336 $ 10,385,566 $ 42,760 $ 271,107 $ (4,441,833) $ (1,038,264) - 1,422,795 44,592 80, ,902 - (337,263) (2,471,780) 274, , ,342 3,689, , ,541 3,247,569 1,315,794 $ 388,648 $ (1,194,264) $ 277,530 $ 5,414 $ 124,677 $ - See Notes to Financial Statements 21

29 STATEMENT OF FIDUCIARY NET POSITION FIDUCIARY FUNDS SEPTEMBER 30, 2015 Private- Purpose Trust Fund Successor Agency Funds Pension Trust Funds Agency of the Former RDA Assets: Pooled cash and investments $ 1,651,004 $ 817,872 $ 11,641,500 Receivables: Accounts ,830 Accrued interest ,038 Land held for resale ,866,919 Restricted assets: Cash and investments with fiscal agents ,723,197 Capital assets: Capital assets, not being depreciated - - 1,387,000 Capital assets, net of accumulated depreciation - - 3,327,903 Total Assets $ 1,651, , ,974,387 Deferred Outflows of Resources: Deferred charge on refunding - 372,815 Deferred pension contributions - 15,885 Total Deferred Outflows of Resources - 388,700 Liabilities: Accounts payable $ 356, ,531 Accrued interest - - 3,087,494 Deposits payable ,000 Pass-thru payables 1,294, Compensated absences ,579 Long-term liabilities: Due in one year - - 5,460,523 Due in more than one year ,767,738 Net pension liability - - 2,491,706 Total Liabilities $ 1,651, ,100,571 Deferred Inflows of Resources: Deferred pension changes in assumptions - 108,469 Deferred pension change in experiences - 66,668 Deferred net earnings on pension - 91,021 Total Deferred Inflows or Resources - 266,158 Net Position: Held in trust for pension 818,489 - Held in trust for other purposes - (28,003,642) Total Net Position $ 818,489 $ (28,003,642) See Notes to Financial Statements 22

30 STATEMENT OF CHANGES IN FIDUCIARY NET POSITION FIDUCIARY FUNDS YEAR ENDED SEPTEMBER 30, 2015 Pension Trust Funds Additions: Contributions: Employers 101,810 Private- Purpose Trust Fund Successor Agency of the Former RDA $ $ - Taxes - 18,402,441 Interest and change in fair value of investments 5,849 23,754 Contributions from City - 6,863,543 Miscellaneous - 445,337 Total Additions 107,659 25,735,075 Deductions: Benefits 68,410 - Community development - 5,069,997 Administrative expenses 8, ,898 Interest expense - 4,780,369 Depreciation expense - 227,000 Contributions to City - 941,976 Total Deductions 76,979 11,318,240 Special item (Note 15) - (11,312,593) Changes in Net Position 30,680 3,104,242 Net Position - Beginning of the Year, previously stated 787,809 (33,948,433) Restatement - 2,840,549 Net Position - Beginning of the Year, restated 787,809 (31,107,884) Net Position - End of the Year $ 818,489 $ (28,003,642) See Notes to Financial Statements 23

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32 NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30, 2015 I. SIGNIFICANT ACCOUNTING POLICIES Note 1: Summary of Significant Accounting Policies The financial statements of the City of Inglewood, California ( City ) have been prepared in conformity with accounting principles generally accepted in the United States of America. The Governmental Accounting Standards Board ( GASB ) is the accepted standard-setting body for establishing governmental accounting and financial reporting principles. The more significant of the City s accounting policies are described below. a. Reporting Entity The City is a municipal corporation governed by an elected mayor and a four-member council. As required by generally accepted accounting principles, the accompanying basic financial statements present the City of Inglewood (primary government) and its component units, entities for which the primary government is considered to be financially accountable. In accordance with GASB Statement No. 14, as amended by GASB Statement No. 61, all of the City s component units are considered blended component units. Although legally separate entities, they are, in substance, part of the City s operations, and therefore, data from these units are combined with data of the primary government. Blended Component Units Inglewood Housing Authority (Housing Authority) The governing body of the Housing Authority is comprised of members of the City Council and the Mayor. Among its duties, it approves the Housing Authority s budget, determines the rates and charges for the use of facilities and appoints the management. The financial activities of the Housing Authority are reported as a special revenue fund. Separately issued financial statements for the Housing Authority may be obtained through the City of Inglewood, Finance Department. Inglewood Public Financing Authority (Public Financing Authority) The governing body of the Public Financing Authority is comprised of members of the City Council and the Mayor. The Public Financing Authority was formed for the public purpose of assisting in financing public improvements of the City, the RDA and other local agencies. The financial activities of the Public Financing Authority are included within the debt service funds. Separately issued financial statements are not prepared for this entity. Inglewood Development Corporation (Development Corporation) The governing body is a board appointed by the Mayor and members of the City Council, and is included as part of the City s Grants Special Revenue Fund. The Development Corporation administers federally funded small business loans for the City, who is the grantee. Separately issued financial statements are not prepared for this entity. b. Basis of Presentation Government-wide Financial Statements The statement of net position and statement of activities display information about the primary government (the City) and its component units. These statements include the financial activities of the overall government, except for fiduciary activities. It is the City s policy to make eliminations to minimize the double counting of internal activities. These statements distinguish between the governmental and business-type activities of the City. 25

33 NOTES TO FINANCIAL STATEMENTS (CONTINUED) SEPTEMBER 30, 2015 Note 1: Summary of Significant Accounting Policies (Continued) Governmental activities, which normally are supported by taxes and intergovernmental revenues, are reported separately from business-type activities, which rely to a significant extent on fees charged to external parties. The statement of activities presents a comparison between direct expenses and program revenues for each segment of the business-type activities of the City and for each function of the City s governmental activities. Direct expenses are those that are specifically associated with a program or function and; therefore, are clearly identifiable to a particular function. The City has included indirect expenses within direct expenses. Expenses by function have been adjusted for any internal service profit/loss existing at fiscal year-end. Program revenues include (1) charges paid by the recipients of goods or services offered by the programs and (2) grants and contributions that are restricted to meeting the operational or capital requirements of a particular program. Revenues that are not classified as program revenues, including all taxes, are presented instead as general revenues. Fund Financial Statements The fund financial statements provide information about the City s funds, including fiduciary funds and blended component units. Separate statements for each fund category governmental, proprietary and fiduciary are presented. The emphasis of fund financial statements is on major governmental and enterprise funds, each displayed in a separate column. All remaining governmental and enterprise funds are separately aggregated and reported as non-major funds. Proprietary funds distinguish operating revenues and expenses from nonoperating items. Proprietary fund operating revenues, such as charges for services, result from exchange transactions associated with the principal activity of the fund. Exchange transactions are those in which each party receives and gives up essentially equal values. Nonoperating revenues, such as subsidies and investment earnings, result from nonexchange transactions or ancillary activities. Operating expenses include the cost of sales and services, administrative expenses and depreciation on capital assets. All expenses not meeting this definition are reported as nonoperating expenses. The City reports the following major governmental funds: The General Fund is the City s primary operating fund. It is used to account for all revenues and expenditures necessary to carry out basic governmental activities of the City that are not accounted for through other funds. For the City, the General Fund includes such activities as general government, public safety, transportation, culture and leisure, and community development. The Noise Mitigation Fund accounts for revenues and expenditures from the Federal Aviation Administration ( FAA ) and the Los Angeles World Airport ( LAWA ) to pay for noise abatement programs for those properties under the flightpath and in the noise corridor. The Successor Housing Fund is used to account for the housing activities of the City that were previously accounted for in the low and moderate income housing fund of the former redevelopment agency. The Section 8 Housing Voucher Fund is used to account for providing housing to the qualifying individuals of the City using Section 8 Housing Voucher grants. 26

34 NOTES TO FINANCIAL STATEMENTS (CONTINUED) SEPTEMBER 30, 2015 Note 1: Summary of Significant Accounting Policies (Continued) The City reports the following major enterprise funds: The Water Utility Fund accounts for the maintenance and operations of the City s water system. Revenue for this fund is primarily from charges for services. The Sanitation Fund accounts for the refuse pick-up services provided by private contract. Billing and collection is performed by City staff. The Sewer Fund accounts for the maintenance and operations of the City s sewer system. Revenue for this fund is primarily from charges for services. The Parking Fund accounts for the citation management and processing services that the City provides to other cities. The City reports the following additional fund types: The City s Internal Service Fund is used to account for services provided by the City s Information Technology and Communications Department. The Internal Service Fund is presented in summary form as part of the proprietary fund financial statements. In the government-wide financial statements, the changes in net position at the end of the fiscal year, as presented in the statements of activities, were allocated to the user functions of the governmental activities, to reflect the entire activity for the year. Since the predominant users of the internal services are the City s governmental activities, the asset and liability balances of the Internal Service Funds are consolidated into the governmental activities column at the government-wide level. Pension Trust Funds are used to account for resources held in trust for the members and beneficiaries of certain retirement plans established for part-time City or seasonal employees not eligible for social security or California Public Employees Retirement System ( PERS ) participation. The City s Agency Funds account for funds due to other cities as part of the City s parking ticket collection services and funds advanced under the terms of the Advance Funds Agreement(s) between the City of Inglewood and Hollywood Park Land Company, LLC providing for reimbursement of costs incurred by the City for the redevelopment of the Hollywood Park mixed use project. The City s Private Purpose Trust Funds are used to account for the activities of the Redevelopment Obligation Retirement Funds, and other Successor Agency funds, which accumulates resources for obligations previously incurred by the former Inglewood Redevelopment Agency. The government-wide, proprietary, and fiduciary fund financial statements are reported using the economic resources measurement focus and the accrual basis of accounting. Revenues are recorded when earned and expenses are recorded at the time liabilities are incurred, regardless of when the related cash flows take place. Nonexchange transactions in which the City gives (or receives) value without directly receiving (or giving) equal value in exchange, include property and sales taxes, grants, entitlements and donations. 27